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ANNUAL
REPORT
of the Secretary of the Treasury
on the State of the Finances
FOU THE FISCAL YEAR ENDED JUNE 30,1968
U-S,
l^ja (LCUK^i
TREASURY DEPARTMENT
DOCUMENT NO. 3245
Secretary
U.S. GOVERNMENT P R I N T I N G OFFICE, WASHINGTON
:
1969
For sale by the Superintendient of Documerits, U.S. Government P r i n t i n g Office,
Washington, D.C. 20402 - Price $2..50 (paper cover)
CONTENTS
Page
statement by the Secretary of the Treasury
xv
REVIEW OF FISCAL OPERATIONS
Financial operations
Budget receipts and outlays
Cash and monetary assets
Corporations and other business-type activities of the U.S. Government. _
Go vernment-wide financial management
Federal debt management
Financing operations
Ownership of Federal securities
Taxation developments
International financial affairs
3
4
6
7
8
11
15
20
25
37
ADMINISTRATIVE REPORTS
Administrative management
Comptroller of the Currency, Office of the
Customs, Bureau of
Director of Practice, Office of the..^
Domestic Gold and Silver Operations, Office of
Engraving and Printing, Bureau of
Fiscal service
Accounts, Bureau of
Public Debt, Bureau of the
Treasurer of the United States, Office of the
Foreign Assets Control, Office of
Internal Revenue Service
Mint, Bureau of the
Narcotics, Bureau of..
U.S. Savings Bonds Division
U.S. Secret Service
1
57
61
65
77
78
80
86
86
92
97
104
105
117
120
125
128
^
EXHIBITS
PUBLIC DEBT OPERATIONS, REGULATIONS, AND LEGISLATION
Treasury Notes Offered and Allotted
1. Treasury notes
137
Treasury Bills Offered and Tenders Accepted
2. Treasury bills
146
Regulations
3. Second amendment, November 7, 1967, of Department Circular No.
300, general regulations with respect to United States securities
Second Supplement, February 29, 1968, of Department Circular No.
653, offering of United States savings bonds, Series E
Fourth amendment, June 19, 1968, to Department Circular No. 653,
seventh revision, offering of United States savings bonds. Series E__
Amendment, September 5, 1967, of Department Circular No. 750,
regulations governing payments by banks and other financial institutions in connection with the redemption of United States savings
bonds
7. Third amendment, June 19, 1968, to Department Circular No. 905,
fourth revision, offering of United States savings bonds, Series H._.
Ill
155
159
160
197
198
IV
CONTENTS
Page
8. Department Circular, Public Debt Series No. 3-67, Revised, June 19,
1968, offering of United States savings notes
9. Amendment, September 5, 1967, of Department Circular Public Debt
Series No. 4-67, regulations governing agencies for the issue of United
States savings bonds of Series E and United States savings notes__.
10. Department Circular, Public Debt Series No. 3-68, March 18, 1968,
regulations governing United States mortgage guaranty insurance
company tax and loss bonds
218
221
222
Legislation
11. An act to amend section 14(b) of the Federal Reserve Act, as amended,
to extend for two years the authority of Federal Reserve banks to
purchase United States obligations directly from the Treasury
224
FINANCIAL POLICY
12. Statement by Secretary Fowler, January 30, 1968, before the Senate
Banking and Currency Committee, on legislation to remove the gold
cover
13. Statement by Secretary Fowler, February 15, 1968, before the Joint
Economic Committee, on economic and financial policies and
programs
1
14. Remarks by Under Secretary Barr, October 4, 1967, before the Boston
Economic Club, on economic and financial policy
15. Remarks by Under Secretary Barr, June 25, 1968, before the Town
Hall of California, Los Angeles, California, on potential claims
on the Federal budget
16. Other Treasury testimony published in hearings before congressional
committees, July 1, 1967-June 30, 1968
224
230
237
241
245
PUBLIC DEBT AND FINANCIAL MANAGEMENT
17. Remarks by Under Secretary for Monetary Affairs Deming, October 19,
1967, at the Mid-Continent East Regional Meeting of the American
Association of Collegiate Schools of Business, Minneapolis, Minn.,
on fiscal and financial policy
:
18. Remarks by Under Secretary for Monetary Affairs Deming, February
27, 1968, at the Greater Los Angeles Metropolitan Area 1968 Industrial Payroll Savings Campaign Meeting, Los Angeles, California,
ori fiscal and financial policies..:
19. Statement by Under Secretary for Monetary Affairs Deming, April 3,
1968, before the Senate Banking and Currency Committee, on
S. 2923, a bill to extend existing authority of the Federal Reserve'
banks to purchase public debt obligations directly from the Treasury.
246
253
257
TAXATION DEVELOPMENTS
20. Statement by Secretary Fowler, August 14, 1967, before the House
Ways and Means Committee, on the President's fiscal program
21. Statement by Secretary Fowler, November 15, 1967, before Subcommittee Number 1, Select Committee on Small Business, House of
Representatives, concerning legislative reform relating to private
foundations
22. Letter from Secretary Fowler to Senator John J. Williams, November 22, 1967 concerning the Administration's tax surcharge proposaL
23. Statement, by Secretary Fowler, November 29, 1967, before the House
Committee on Ways and Means, on the President's proposals for
an income tax increase and for expenditure reduction and control
for the fiscal year 1968
24. Statement by Secretary Fowler, March 12, 1968, before the Senate
Finance Committee, on H.R. 15414, the Tax Adjustment Act of
1968
25. Excerpts from statement by Secretary Fowler, June 25, 1968, before
the Senate Finance Committee, on H.R. 16241, a bill containing a
portion of the Administration's recommendations for dealing with
our foreign travel payments deficit
258
272
274
276
288
294
CONTENTS
V
Page
26. Statement by Under Secretary Barr, September 14, 1967, before the
Senate Finance Committee, on S. 2100, which provides certain
encouragements to the construction or rehabilitation of low-income
housing
27. Remarks by Assistant Secretary Surrey, May 15, 1968, before the
Boston Economic Club, Boston, on the Federal tax system—current
activities and future possibilities
28. Remarks by Assistant Secretary Surrey, June 18, 1968, before the
Computers and Taxes Conference, National Law Center, George
Washington University, on a computer study of tax depreciation
policy
29. Excerpts from remarks by Assistant Secretary Surrey, November 15,
1967, before the Money Marketeers, on the U.S. income tax system—
the need for a full accounting; and Treasury Department Report
''The Tax Expenditure Budget: A Conceptual Analysis"
29A. Other Treasury testimony published in hearings before congressional
committees, July 1, 1967-June 30, 1968
301
306
314
322
340
INTERNATIONAL FINANCIAL AND MONETARY DEVELOPMENTS
30. Communique of the Ministerial Meeting of the Group of Ten on
August 26, 1967, London
31. White House press release, August 28, 1967 (Statement by the President welcoming Secretary Henry Fowler, William McChesney Martin, Jr., and Under Secretary Deming)
32. Remarks by Secretary Fowler as Governor for the United States,
September 26, 1967, at the Annual Meeting of the International
Monetary Fund, Rio de Janeiro, Brazil
33. Statement by Secretary Fowler, November 19, 1967, following
announcement of a new parity rate for the pound
34. Frankfurt Communique of November 26, 1967, by the Governors of
the Central Banks of Belgium, Germany, Italy, Netherlands,
Switzerland, the United Kingdom, and the United States
35. Statement by Secretary Fowler and Chairman Martin of the Federal
Reserve Board, December 16, 1967, on maintenance of the gold
value of the dollar
36. Remarks by Secretary Fowler, January 10, 1968, before 1968 "Share
in Freedom" Savings Bonds Volunteer Conference
37. Statement by Secretary Fowler, February 5, 1968, before the House
Committee on Ways and Means, on certain legislative aspects of
the President's balance-of-payments program
38. Statement by Secretary Fowler and Chairman Martin of the Federal
Reserve Board, March 14, 1968, on the temporary closing of the
London gold market
39. Washington Communique of March 17, 1968
40. Statement by the Managing Director of the International Monetary
Fund, Mr. Pierre-Paul Schweitzer, March 17, 1968
41. Communique of the Ministerial Meeting of the Group of Ten, March
29-30, 1968, Stockholm, Sweden
42. Remarks by Secretary Fowler as Governor for the United States and
Chairman of the Board of Governors, April 22, 1968, at the inaugural
session of the 9th annual meeting of the Inter-American Development Bank, Bogota, Colombia
43. Remarks by Secretary Fowler, April 30, 1968, before the Chamber of
Commerce of the United States, on the hour of fiscal responsibility__
44. Statement by Secretary Fowler, May 1, 1968, before the House Committee on Banking and Currency, on H.R. 16911, a bill to provide
for U.S. participation in the facility based on Special Drawing
Rights in the International Monetary Fund
45. An act to provide for U.S. participation in the facility based on Special
Drawing Rights in the IMF
46. Statement by Secretary Fowler, May 8, 1968, before the House Banking and Currency Committee, on replenishment of the resources of
the International Development Association
47. Remarks by Secretary Fowler, May 24, 1968, at the 15th Annual
Monetary Conference of the American Bankers Association, Puerto
Rico
341
342
342
348
349
349
349
355
370
370
371
372
373
376
381
393
395
400
VI
CONTENTS
Page
48. Letter from Secretary Fowler to Chairman Mills, liouse Ways and
Means Committee, June 6, 1968
49. Statement by Under Secretary Barr, February 28, 1968, before the
International Finance Subcommittee of the House Banking and
Currency Committee, on H.R. 15364, a bill to increase the Ordinary Capital resources of the Inter-American Development Bank
50. Statement by Under Secretary Barr, Acting as Governor for the
United States, April 5, 1968, at the 1st Annual Meeting of the Asiari
Development Bank, Manila, Philippines
51. Statement by Under Secretary for Monetary Affairs Deming, July 14,
1967, before the Senate Finance Committee, on the interest equalization tax
.
52. Remarks by Under Secretary for Monetary Affairs Deming, April 4,
1968, at the New York Society of Security Analysts International
Monetary Seminar, New York, on the U.S. balance of international
payments problem in our modern economic environment
53. Remarks by Under Secretary for Monetary Affairs Deming, May 6,
1968, to the Istituto Nazionale per il Commercio Estero (ICE),
Rome, Italy, on recent developments in the monetary system and
international payments
54. Remarks by Under Secretary for Monetary Affairs Deming, June 17,
1968, at the Sixth International Program of the Instituto de Estudios Superiores de la Empresa Universidad de Navarra, Barcelona,
Spain
:__
55. Statement by Acting Assistant Secretary Petty, April 5, 1968, before
the Senate Committee on Banking and Currency, on S. 3218, a
bill to provide an export expansion facility tlirough the ExportImport Bank_
56. Remarks by Assistant Secretary Petty, May 14, 1968, before the New
York Society of Security Analysts, New York, on international
financial considerations ' * When Peace Comes''
57. Press release, December 21, 1967, announcing the signing of an exchange agreement by the United States and Mexico.
58. Press release, January 18, 1968, announcing publication of a documentary report on "Maintaining the Strength of the United States
Dollar in a Strong Free World Economy"
—
59. Press release, March 4, 1968, announcing the signing of an exchange
agreement by the United States and Nicaragua
60. Press release, March 8, 1968, announcing a U.S. drawing from the
International Monetary Fund
61. Press release, March 18, 1968, announcing the signing of an exchange
agreement by the United States and Venezuela
62. Press release, April 30, 1968, announcing the signing of an exchange
agreement by the United States and Argentina
63. Other Treasury testimony published in hearings before congressional
committees, July 1, 1967-June 30, 1968
411
417
420
422
434
439
447
453
455
460
461
463
463
463
464
464
GOLD AND SILVER OPERATIONS
64. Press release, July 14, 1967, concerning Treasury sales of silver
65. Amendments to silver regulations, September 21, 1967
66. Press release, March 17, 1968, concerning amendments of Treasury
gold regulations
...
67. Amendments to gold regulations, March 18, 1968
68. Amendments to gold regulations, April 15, 1968
465
466
467
467
468
ORGANIZATION AND PROCEDURE
69. Treasury Department orders relating to organization and procedure..
471
ADVISORY COMMITTEES
70. Advisory committees utilized by the Department of the Treasury
under Executive Order 11007
.^
480
CONTENTS
VII
TABLES
'The tables section previously included i n the A n n u a l Report will, beginning with
this edition, be published in a separate ^'Statistical Appendix.'' The second volume is
to follow this one, as soon as all fiscal year 1968 figures can be finalized and published.
Page
INDEX
N O T E . — D e t a i l s of figures m a y n o t add to totals because of rounding.
515
S E C R E T A R I E S , U N D E R S E C R E T A R I E S , GENERAL C O U N S E L S , A S S I S T ANT S E C R E T A R I E S , SPECIAL A S S I S T A N T S T O T H E SECRETARY
(FOR E N F O R C E M E N T ) , AND D E P U T Y U N D E R S E C R E T A R I E S F O R
M O N E T A R Y AFFAIRS, SERVING I N T H E D E P A R T M E N T O F T H E
TREASURY F R O M JANUARY 20, 1965, T H R O U G H N O V E M B E R 1, 1968 i
T e r m of service
Officials
To
From
Secretaries of ihe Treasury
J a n . 21, 1961
Apr.
1, 1965
Apr.
1,1965
Douglas Dillon, New Jersey.
H e n r y H. Fowler, Virginia.
Under Secretary
Joseph W. Barr, Indiana.
Apr. 29, 1965
Under Secreiary of the Treasury
for Monetary Affairs
Feb.
Frederick L. Deming, Minnesota.
1, 1965
General Counsels
Nov. 16, 1962
Apr. 12, 1966
Jan. 31, 1965
G. d'Andelot Belin, Massachusetts.
Fred B. Smith, Maryland.
Assistant Secretaries
Apr.
Dec.
Sept.
Apr.
Sept.
Aug.
Mar.
May
24,
20,
18,
29,
14,
2,
19,
15,
1961
1961
1963
1965
1965
1966
1968
1968
Sept. 1,1965
June 10, 1966
Jan. 15, 1968
Jan. 31, 1968
Stanley S. Surrey, Massachusetts.
James A. Reed, Massachusetts.
Robert A, Wallace, Illinois.
Merlyn N . Trued, New Jersey.
W. True Davis, Jr., Missouri.
Winthrop Knowlton, New York.
Joseph M. Bowman, Georgia.
J o h n R. P e t t y , New York.
Special Assistants to the Secretary
(for Enforcement)
Sept. 16, 1965
Apr. 4, 1967
Feb. 10, 1967
D a v i d C. Acheson, District of Columbia.
James P . Hendrick, District of Columbia.
Deputy Under Secretaries of ihe Treasury
for Monetary Afi^airs
Dec. 3, 1963
Nov. 24, 1965
Feb. 12, 1968
Nov. 23, 1965
Nov. 11, 1967
Paul A. Volcker, New Jersey.
Peter D . Sternlight, New York.
F r a n k W. Schiff, New York.
Fiscal Assistant Secretary
J u n e 15, 1962
J o h n K. Carlock, Arizona.
Assistant Secretary for Administration
Sept. 14, 1959
A. E. Weatherbee, Maine.
» For oflacials from Sept. 11, 1789, to Jan. 20,1965, see the 1965 annual report exhibit 69, pp. 449-457.
IX
PRINCIPAL ADMINISTRATIVE AND STAFF OFFICERS OF THE DEPARTMENT OF THE TREASURY AS OF NOVEMBER 1, 1968
Secretary of the Treasury
Henry H. Fowler
Special Assistant to the Siecretary
Douglass Hunt
Under Secretary of the Treasury
Joseph W. Barr
Special Assistant to the Under Secretary
Mark A. Weiss
Under Secretary for Monetary Affairs
Frederick L. Deming
Deputy Under Secretary for Monetary
Affairs
Frank W. Schiff
Director, Office of Domestic Gold
and Silver Operations
Thomas W. Wolfe
Director, Office of Financial Analysis
John H. Auten
Director, Office of Debt Analysis
Edward P. Snyder
Assistant to the Secretary (Debt Management)
^
R. Duane Saunders
General Counsel
Fred B. Smith.
Deputy General Counsel
Roy T. Englert
Assistant General Counsel
Charlotte Tuttle Lloyd
Assistant Oeneral Counsel
Michael Bradfield
Assistant General Counsel
Hugo A. Ranta
Assistant General Counsel
Donald L. E. Ritger
Chief Counsel, Foreign Assets Control.. Stanley L. Sommerfield
Director of Practice
William H. Sager
Assistant Secretary
Stanley S. Surrey
Deputy Assistant Secretary
William F. Hellmuth, Jr.
Director, Office of Tax Analysis
Gerard M. Brannon
Tax Legislative Counsel
Vacancy
Special Assistant for International Tax
Affairs
Robert T. Cole
Assistant Secretary '.
Robert A. Wallace
Special Assistant to Assistant Secretary- Vacancy
Director, Employment Policy Program. Mrs. Mary F. Nolan
Associate Director, Employment Policy
Program
David A. Sawyer
Assistant Secretary
Joseph M. Bowman
Deputy to the Assistant Secretary
Matthew J. Marks
Deputy to the Assistant Secretary
(Congressional Relations)
Joseph L. Spilman, Jr.
Deputy to the Assistant Secretary
(Oongressional Relations)
Samuel M. Jones
Assistant Secretary
John R. Petty
Deputy Assistant Secretary
JohnCOolman
Deputy to Assistant Secretary for International Monetary Affairs
George I-I. Willis
Deputy to Assistant Secretary for International Financial and Economic
Affairs
Ralph Hirschtritt
Special iVssistant to the Secretary (for Enforcement)
...
James P. Hendrick
Deputy Special Assistant to the Secretary (for Enforcement)
Charles C. Humpstone
Fiscal Assistant Secretary
John K. Oarlock
Deputy Fiscal Assistant Secretary
Hampton A. Rabon
Assistant Fiscal Assistant Secretary.. Boyd A. Evans
Assistant to Fiscal Assistant Secretary. Vacancy
Assistant to Fiscal Assistant Secretary. Sidney Cox
X
PRINCIPAL ADMINISTRATIVE AND STAFF OFFICERS
Assistant Secretary for Administration
Deputy Assistant Secretary for Administration and Director, Office of
Budget and Finance
Director, Office of Planning and P r o gram Evaluation
Director, Office of Personnel
Director, Office of Management and
Organization
Director,
Office
of
Administrative
Services
Director, Office of Security
Assistant to the Secretary (Public Affairs)—
Deputy Assistant to the Secretary
(Public Affairs)
Assistant t o the Secretary (National Security Affairs)
Deputy Assistant t o the Secretary
(National Security Affairs)
National Security Affairs Adviser
National Security Affairs Adviser
National Security Affairs Adviser
Financial Adviser
Director, Office of Foreign Assets
Control
Senior Consultant
Director, Executive Secretariat
A. E. Weatherbee
Ernest C. Betts, J r .
Benjamin Caplan
Amos N. Latham, J r .
J. Elton Greenlee
P a u l McDonald
Thomas M. Hughes
John F . Kane
E d g a r A. Oomee
Raymond J. Albright
William F . H a u s m a n
Robert G. Efteland
Clyde C. Crosswhlte
William N. Turpin
Robert W. Bean
Mrs. Margaret W. Schwartz
Seymour E. H a r r i s
J a m e s E. Ammerman (Acting)
BUREAU O F ACCOUNTS
Commissioner of Accounts
Assistant Commissioner
Comptroller
Ohief Disbursing Officer
Deputy Commissioner for Central Accounts
and Reports
Deputy Commissioner for Deposits and
Investments
Sidney S. Sokol
L. D. Mosso
Steve L. Comings
Lester W. Plumly
BCoward A. T u r n e r
Sebastian F a m a
BUREAU O F CUSTOMS
Commissioner of Customs
Deputy Commissioner of Customs
Assistant Commissioner, Office of Administration
Assistant Commissioner, Office of Investigations
.
Assistant Commissioner, Office of Operations
Assistant Commissioner, Office of Regulations a n d Rulings
Chief Counsel
Lester D. Johnson
Edwin F . Rains
Glenn R. Dickerson
Lawrence Fleishman
David C. Ellis
Robert V. M c l n t y r e
Alfred H. Golden
BUREAU OF ENGRAVING AND P R I N T I N G
Director, B u r e a u of Engraving and P r i n t i n g
Deputy Director, B u r e a u of Engraving
and P r i n t i n g
J a m e s A. Conlon
Donald C. Tolson
BUREAU OF T H E MINT
Director of the Mint
Miss E v a Aduims
Assistant Director of the Mint
Frederick W. T a t e
BUREAU OF THE PUBLIC DEBT
Commissioner of the Public Debt
—
Donald M. Merritt
Assistant Commissioner
I-I. J. Hintgen
Deputy Oommissioner
J. J. Lubeley
Deputy Commissioner in Charge, Chicago
Office
Michael E. McGeoghegan
XI
xn
PRINCIPAL ADMINISTRATIVE AND STAFF OFFICERS
INTERNAL REVENUE SERVICE
Commissioner of I n t e m a l Revenue
Sheldon S. Cohen
Deputy Commissioner
William H. Smith
Assistant Commissioner ( A d m i n i s t r a t i o n ) - E d w a r d F . Preston
Assistant Commissioner (Inspection)
Vernon D. Acree
Assistant Commissioner (Compliance)
Donald W. Bacon
Assistant Commissioner ( D a t a Processing) _ Robert L. J a c k
Assistant Oommissioner (Planning ,and
Research)
Albert W. Brisbin
Assistant Commisisioner (Technical) __i
Harold T. Swartz
Chief Counsel
Lester R. Uretz
OFFICE OF THE COMPTROLLER
Comptroller of the Currency
F i r s t Deputy Comptroller
Administrative Assistant to the
Comptroller
Deputy ComptrollerDeputy Comptroller—
Deputy Comptroller—
Chief National Banli E x a m i n e r
Deputy Comiptroller (Mergers and
Branches)
Deputy Comptroller ( T r u s t s )
Deputy Comptroller ( F D I C Affairs)
Ohief Counsel
OF THE CURRENCY
Willaam B. Camp
J u s t i n T. W a t s o n
John Nicoll
J o h n D. Gwin
T h o m a s G. DeShazo
David C. Motter
F . H. Ellis
R. J. Blanchard
Dean E. Miller
Albert J. Faulstich
Robert Bloom
OFFICE OP THE O-'REASURER OF THE UNITED STATES
T r e a s u r e r of the United States
Vacancy
Deputy T r e a s u r e r
William T. Howell
Assistant Deputy T r e a s u r e r
Willard E. Scott
UNITED ISTATES SAVINGS BONDS DIVISION
National Director
Glen R. Johnson
Assistant National Director
Elmer L. R u s t a d
UNITED STATES SECRET SERVICE
Director
J a m e s J. Rowley
Deputy Director
.
Rufus W. Youngblood
Assistant Director (Administration)
Phil W . J o r d a n
Assistant Director (Investigations)
B u r r i l l A. Peterson
Assistant Director (Protective Forces)
T h o m a s L. J o h n s
Assistant
Director
(Protective
Intelligence)
^
Thomas J. Kelley
COMMITTEES AND
Chairman, T r e a s u r y Management Committee
Chairman, T r e a s u r y A w a r d s Committee
Chairman, T r e a s u r y Wage Board
Employment Policy Officer
Principal Compliance Officer^^__^^_^_^^^_^.,
BOARDS
A. E. Weatherbee
Amos N. L a t h a m , J r .
Amos N. L a t h a m , J r .
Robert A. Wallace
Robert A, Wallace
NOVEMBER 1.1968
^ORGANIZATION OF THE DEPARTMENT OF THE TREASURY-
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HH
<1
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Bureou of
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Bureau of
'"Sg"'
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02
CHART 1
A N N U A L R E P O R T ON T H E F I N A N C E S
TREASURY DEPARTMENT.
Washington.) December 5,1968,
SIRS : I have the honor to report to you on the finances of the Federal
Government for the fiscal year 1968. The main text of this report
consists of a detailed review of Treasury fiscal operations and administrative reports of the offices under my supervision during the fiscal year
1968, along with supporting exhibits. This general introduction reviews
the major fiscal and financial developments that have taken place since
the time of my last report in May of this year. Also, since this is my
final report as Secretary of the Treasury, I will take the liberty of
commenting briefly upon some of the accomplishments of recent years
and the problems that remain.
Overall Review
I t has been a major objective of policy during the past year to reverse
decisively the trend toward larger deficits in our internal budget and
in our international balance of payments, while continuing to sustain
the current economic expansion. Despite the delay in enactment of the
fiscal restraint program until late June, encouraging progress has been
made toward the achievement of a better degree of financial balance
and the economy continues to expand vigorously.
Enactment of the fiscal restraint package in late June marked a
significant change in the national financial position. The budget deficit,
Avhich had become excessively large, was turned decisively in the
direction of balance. Internationally, the enactment of fiscal restraint
greatly strengthened foreign confidence in the dollar. Our balance of
payments has shown steady improvement during the course of the
year and a small surplus was actually registered on the liquidity basis
during the third quarter—the first such quarterly surplus in 3 years.
During the calendar year 1968, the economy continued to grow at a
relatively rapid pace. Delay in enactment of the fiscal restraint package contributed to the rapidity of the advance and led to some intensification of inflationary pressures. During the first half of the year,
gross national product in constant prices rose at more than a 6 percent
annual rate—appreciably above the approximately 4 percent trend
rate of growth in capacity. This more than 6 percent rate of growth in
real output represented a significant acceleration from a rate slightly
below 4 percent in the second half of calendar 1967.
XVI
19618 REPORT OF T H E SECRETARY OF T H E
TREASURY
The upward movement of prices, which moderated during the first
half of 1967, had already stepped up by the second half of 1967. The
further quickening in the pace of expansion in the first half of calendar
1968 added to inflationary pressures. Therefore, a shift to fiscal restraint was badly needed in order to bring inflationary tendencies
under better control and to start a movement back toward relative
price stability. This was recognized as essential for the continued
strength and stability of the dollar at home and abroad.
During the second half of calendar 1968 the expansion of the economy gradually began to show some moderating tendencies. Fiscal restraint did not have a strong, immediate effect upon the overall pace of
economic expansion, nor was it expected to. But, the rise in gross national product in the third quarter was somewhat below the faster pace
of the first half, although final sales were very strong. Moderate easing
of the pace of expansion appeared to be probable in the period ahead,
but there were no signs of the fiscal "overkill" that some had feared
at the time the need for fiscal restraint was being debated.
The budget deficit on national income account fell sharply from a
rate of about $10 billion to a rate of $3 billion by the third quarter of
1968. The move toward fiscal restraint will be continuing in the first
half of calendar 1969 when the national income budget is expected
to swing into surplus. On a unified budget basis, the deficit had soared
to $25.2 billion in fiscal 1968 when legislative delays were encountered
in implementing fiscal restraint. I n the early parts of fiscal 1969 the
deficit position on the unified basis began to narrow quickly. While a
final assessment will necessarily await the January budget, it appeared
that the budget results for fiscal 1969 would be greatly improved from
the $5 billion deficit estimated in the midyear budget review of September 1968.
Immediate and substantial relief on the price front could not be
expected. While there were some encouraging signs in the second half
of calendar year 1968, it would take a considerable period of time for
a noninflationary pattern of expansion to be reestablished. The
strength of inflationary tendencies in late 1968 only underlined the
importance of the move toward fiscal restraint begun at mid-1968. I n
the absence of that- fiscal move, there would have been serious risk of
an inflationary breakout of prices. This would have threatened the
current expansion and delayed unduly the achievement of balance-ofpayments equilibrium. While the fiscal action was long delayed, it was
taken in time to avert these serious consequences.
With demand pressures easing a little and a period of somewhat
moderate growth in prospect for the first half of calendar 1969, some
improvement in price performance was a reasonable expectation, How-
ANNUAL REPORT ON T H E FINANCES
XVII
ever, cooperation and restraint on the part of both business and labor
would be vitally important to the early restoration of a more stable
cost-price relationship.
The improved Federal budgetary outlook was already becoming an
important influence in the money and credit markets in the second
half of calendar 1968. During the third quarter the net market impact
of Federal finance was little changed from the corresponding period
a year earlier. But by the fourth quarter there Avas a significant decline
in Federal financial requirements relative to a year earlier.
I n the first half of calendar 1969, the Federal financial sector will
return to the traditional seasonal pattern of sizable repayment of debt.
The net effect would be a very appreciable reduction of pressures from
this source on the money and capital markets. However, private demands for credit were still running at a relatively high rate in the second half of 1968. After some initial easing in response to passage of
the Revenue and Expenditure Control Act of 1968, interest rates rose
irregularly during the late summer and into the autumn.
On the intemational side, substantial progress was made during
1968 toward achieving equilibrium in the balance of payments. A huge
deficit in the fourth quarter of 1967 was reduced sharply in the first
quarter of 1968 as the Action Program announced by President
Johnson on New Year's Day got underway. I n the second quarter, the
liquidity deficit declined further and actually moved into a small
surplus position in the third quarter. On the official settlements basis,
results were equally impressive.
This sharp improvement in the balance of payments was extremely
welcome. However, transitory elements were responsible for some of
the improvement. Furthermore, the composition of the balance was far
from ideal. A large part of the improvement was attributable to foreign
capital inflows whose continuation on that scale was far from assured.
The trade account did begin to show signs of improvement after the
second quarter but was still at very low levels. I t was clear that a prolonged effort would be required to rebuild the trade surplus to a satisfactory level. A period of moderate domestic growth and a return to
a less inflationary environment would be of great help in strengthening
the trade position.
The notable balance-of-payments progress achieved in 1968 had
necessarily relied primarily on temporary measures. The long term
ineasures to increase exports, to reduce nontariff barriers and to increase
foreign investment and travel in the United States have only begun to
have an impact. Moreover, the continuation of a high level of military
expenditures in the F a r East has limited our ability to neutralize
Government expenditures abroad. Certainly, until the full effects of
longer run measures materialize, we cannot safely abandon the tem318-223—69
3
XVIII
19 618 REPORT OF T H E SECRETARY OF T H E
TREASURY
porary measures, particularly the restraints over U.S. capital outflow,
which are accountable for so much of the recent improvement.
I n the intemational financial area, the past year has seen a number
of important developments. Two major threats to the continued stability of the international financial system were dealt with effectively
by cooperative action. The first occurred early in the year and centered
around speculative activity in the gold market. The second occurred
late in the year and involved special measures to deal with the international financial repercussions of large speculative capital inflows to
West Germany. I n each case, multilateral consultation and discussion
among the major financial nations led to an agreed upon course of
action and at least a temporary resolution of the problems encountered.
Against a background of multilateral cooperation, further progress
Avas made during the year toward the activation of the Special Drawing Rights machinery to provide by deliberate decision over the years
ahead new reserve assets supplemental to gold and dollars. On June
19,1968, President Johnson signed the bill authorizing U.S. participation in the Special Drawing Rights Plan. The U.S. acceptance of the
proposed amendment to the Fund's Articles of Agreement and certificate of participation were then transmitted to the Fund. The United
States was the first Fund member to complete both steps. As I indicated in my remarks at the Annual Meeting of the Fund and the
World Bank, the U.S. Government was proud to act promptly both to
ratify the amendments establishing the Special Drawing Rights facility and to deposit its instrument of participation.
T a x Policy
The major tax development since the time of my last report was
the Revenue and Expenditure Control Act of 1968 (Public Law
90-364) which was approved by President Johnson on June 28, 1968.
This measure not only increased taxes but also required reduction
in Federal spending and employment and amended the Social Security
Act. Fuller details on this and other developments in tax policy during the fiscal year 1968 are provided on pages 25-37 of the accompanying report.
Since there was lengthy legislative delay in enactment of the fiscal
restraint package,;a brief review of the events leading up to its final
passage may be useful. The initial proposal for a general increase in
income taxes was made by President Johnson in his state of the
Union message of January 10, 1967. He called for a surcharge of 6
percent on both individual and corporate income taxes to last for 2
years or so long as the unusual expenditures associated with our efforts
in Vietnam continue. The temporary surcharge was to be effective
from July 1,1967.
ANNUAL REPORT ON T H E FINANCES
XIX
As revised estimates of revenues and expenditures made it clear
that the budget deficit would be much larger than had-been anticipated
in early 1967, President Johnson requested on August 3, 1967, that
the surcharge be raised from 6 to 10 percent. Aside from the recommendation for a 10-percent surcharge the President repeated his
January 1967 recommendations for a further speedup of corporate
tax collections and a postponement of scheduled reductions in excise
taxes. In addition, the President urged the Congress to exercise the
utmost restraint and responsibility in the appropriations process and
to make every effort not to exceed the January budget estimates. For
its part, the executive branch promised to take every proper action
within its power to reduce expenditures in the January budget.
Hearings were held on the tax proposals at the BLouse Ways and
Means Committee in August and September and again in November
1967 following the devaluation of sterling. At the November hearings
the Administration presented a two-part plan: the tax proposals and
a specific statutory plan for expenditure reduction in fiscal 1968 from
the levels then in prospect. Wlijle the Ways and Means Committee
did not take favorable action on the proposals, the expenditure reduction part of the plan was implemented by joint congressional and executive action in December 1967.
On January 22, 1968, the HLouse Ways and Means Committee resumed its hearings on the President's tax proposals. The committee
took favorable action on the corporate tax acceleration and excise tax
components of the tax package, but not on the proposed 10-percent
surcharge on individual and corporate income tax liabilities. The corporate tax acceleration and the postponement of scheduled excise tax
reductions were passed by the HLouse of Representatives on February 29,1968.
The scene then shifted to the Senate. The Senate Finance Committee
approved action on excise taxes and the corporate tax acceleration but
decided, on a close vote, against the proposed 10-percent surcharge.
On the floor of the Senate, however, the 10-percent surcharge and a
ceiling on Federal expenditures, along with a number of other amendments were added to the excise tax and corporate acceleration
legislation.
The bill went to conference in early April but further delay ensued.
The House finally agreed to the conference report on June 20 and the
Senate on June 21. The Revenue and Expenditure Control Act of 1968
(Public Law 90-364) was signed by the President on June 28, 1968.
In addition to its tax provisions and the amendment of certain provisions of the Social Security Act, the final legislation provided limitations on 1969 budget authority and outlays of $10 billion and $6 billion,
respectively, below the levels estimated in the 1969 budget with certain
XX
19 6i8 REPORT OF THE SECRETARY OF THE
TREASURY
specific exceptions. I t also required specific recommendations by the
President in the budget message for fiscal 1970 for rescinding $8 billion
of carryover obligational authority.
At the time of final congressional action, I indicated my belief that
the decisive vote increasing taxes and decreasing projected public expenditures—both unpopular measures in an election year—should go
far to sustain confidence in the dollar, the economy on which it is based,
and our system of government. The favorable congressional action was
a momentous decision—^to pay our nation's bills and order our economic
and financial affairs in such a manner as to reduce sharply the twin
deficits in our budget and international balance of payments. Events
since June 1968 have only served to reinforce my belief that the passage of the Revenue and Expenditure Control Act of 1968 was a crucial
step, marking a decisive improvement in our financial affairs.
Financial Policies and, Debt Management
I n the domestic financial area, the past year has been one of continuing strong demands in our money and capital markets. During the
first part of calendar 1968, the Federal Reserve was applying some
monetary restraint. Following the devaluation of sterling in November 1967, the discount rate was raised from 4 percent to 4i/^ percent.
I n early 1968, with little apparent progress being made towiard the enactment of a fiscal restraint program, the discount rate was raised
in two further one-half point steps (March 15, 1968, and April 19,
1968) to a level of 5 % percent. I n January reserve requirements on demand deposits in excess of $5 million were raised by one-half of one percent and in April the maximum rates payable on certificates of deposit
were raised to 6% percent on the longest maturities. Total and nonborrowed reserves increased substantially in January and February
but then remained about flat through the middle of the year.
Both short and long term interest rates on Government securities
dipped early in 1968 after rising steadily in the last half of 1967. Threemonth Treasury bills averaged a bit less than 5 percent in February
1968 after edging above 5 percent earlier in the year. Interest rates
on Government securities then rose until late May when the expectation
of imminent fiscal action sponsored an easing trend. At the high point
in late May, 3-month Treasury bills reached 5.92 percent and longer
bills edged above 6 percent. Intermediate coupon rates moved up about
one-half of one percent in this period. High grade corporate and municipal bond yields also moved higher.
An easing trend in interest rates began before the passage of the
Revenue and Expenditure Control Act of 1968 and was accommodated
by monetary policy during the summer. I n August the discount rate
was reduced from 5i/^ percent to 5^4 percent. The Board of Governors
ANNUAL REPORT ON T H E FINANCES
XXI
of the Federal Reserve System stated that the change was primarily
technical, to align the discount rate with the change in money market
conditions which had occurred chiefly as a result of the increased fiscal
restraint and a lower Treasury demand for financing resulting from
the enactment of the tax increase and its related expenditure cuts.
With the economy moving ahead rapidly and private demands for
credit continuing to be strong, interest rates began to move back up
again by early autumn. Three-month Treasury bills which averaged
5.10 percent in August were near 5% percent by late November. Most
other interest rates rose during this period and yields on some private
securities were not far below their highs for the year. New Aa-rated
corporate bonds were slightly above 7 percent, new municipal bonds
were at 4% percent and new home mortgages were about 71/4 percent.
Most rates rose further in early December.
A relatively large volume of private securities had been offered for
sale during the course of the year, partly accounting for the continuing
high level of interest rates. Gross corporate offerings appeared likely
to total some $21 billion for the year—only slightly below the record
1967 total of $24 billion. State and local offerings in 1968 were running
about 13 percent above the 1967 rate and would probably reach some
$16% billion for the year as a whole.
Wliile private demands for credit appeared likely to remain relatively strong, there had been a pronounced alteration in the Federal
financial position with the passage of the tax and expenditure legislation. Federal demands continued to run at a fairly high level in the
third quarter of 1968 but then began to fall off very appreciably. This
was readily apparent from a comparison of prospective Federal market impact for the final three quarters of fiscal 1969 with the corresponding period of fiscal 1968. I n the earlier period—^the last three
quarters of fiscal 1968—there was a net market demand by the Federal
sector of about $9 billion. This was after adjustment for Treasury
cash, purchases of Government Investment Accounts and the Federal
Reserve, sales of nonmarketable issues, and included all direct Treasury finance plus all agency borrowings. The final three quarters of
fiscal 1969 were expected to result in a net market paydown of about
$7 billion on the same basis. The swing of some $15 billion in Federal
financial requirements was an extremely important development.
The bulk of Treasury cash requirements between mid-1968 and the
end of the calendar year was met through the issuance of tax anticipation bills which helped to insure a minimum market impact. (A full
discussion of debt management activities during the fiscal year 1968
will be found in the body of this report, pages 11-25). A $4 billion
offering of March and April 1969 tax anticipation bills in early July
began the Treasury's financing operations in the second half of calendar
XXII
1'9 618 REPORT OF T H E
SECRETARY OF T H E
TREASURY
1968. Approximately $5 billion more of tax bills were sold in the
balance of the year—$3 billion in October and the final $2 billion at
the end of November.
Major financing operations were conducted in August and again in
late October. The books were open on August 5 for a cash offering of
5% percent, 6-year notes, priced to yield about 5.70 percent. This issue
raised some new cash but the bulk of the proceeds Avas used to pay off
issues maturing at mid-August. In late October the books were open
for an exchange offering. The holders of November 15 and December 15
maturities were offered an exchange into either a 5% percent, 18month note, priced to yield 5.73 percent or a 6-year 5% percent note,
originally issued as a 7-year note on November 15,1967.
The financing operations in the second half of calendar year 1968
were conducted smoothly and successfully. With the peak period of
Federal demand in the past and the budget moving toward balance,
the Government's financial outlook was greatly improved.
International Financial Affairs
A summary of a wide range of developments in international financial affairs through fiscal 1968 will be found in the text of this report
(pages 37-55). Attention will be confined here to major developments
during the year iii the U.S. balance of payments and the progress made
toward improved international financial arrangements.
Balance of Payments
During the first three quarters of calendar year 1968 steady improvement was registered in the U.S. balance of payments. The impetus for
this improvement was provided by President Johnson's Action Program for the balance of payments announced on January 1, 1968. In
1967, the deficit on the liquidity basis reached $3.6 billion and returned
near the deficit levels of 1959 and 1960. On the official reserve transactions basis, the deficit for calendar 1967 was $3.4 billion. U.S. gold
losses in 1967 rose to $1,170 million, about double the $571 million loss
in 1966. Much of the deterioration occurred in the final quarter of the
year when the liquidity deficit reached $1,742 million and gold losses
exceeded $1 billion. The heavy pressure in gold markets continued in
early 1968 until it was checked by international agreement on new
arrangements with respect to private gold markets.
Some part of the large fourth-quarter 1967 balance-of-payments
deficit was due to such temporary factors as the weakness of sterling
and the effects of work stoppages in this country. Even after allowance
for these and other special factors, however, it was clear that there had
been a significant worsening of the deficit during 1967 and that a
tightening of the balance-of-payments program was essential under
the circumstances. President Johnson announced the details of the new
ANNUAL REPORT ON THE FINANCES
XXIII
balance-of-payments program in a special message on January 1,1968.
Major emphasis was placed on the close relationship between the
domestic economy and the balance of payments. The Presidential
statement stressed the need for fiscal restraint and called on business
and labor to exercise the utmost responsibility in their wage-price
decisions.
The new balance-of-payments program consisted of temporary
measures in the areas of direct investment, lending by financial institutions, foreign travel, and Government overseas expenditure. I n addition, long teiTQ measures were proposed to increase U.S. exports, deal
with the problem of nontariff barriers, and encourage foreign investment and travel in the United States. The program embodied a comprehensive approach to the problem with savings sought in all major
areas of the balance of payments. I t was evolutionary in the sense of
building upon the experience gained from previous balance-ofpayments programs, but also included new techniques designed to
achieve effective control of direct investment and the overseas, expenditures of U.S. tourists.
The main specific elements of the new program were:
—a mandatory program, administered by the Department of Commerce, to restrain direct investment abroad
—revised guidelines by the Board of Governors of the Federal
Reserve System to reduce credits from U.S. banks and other financial
institutions
—encouragement of foreign travel in the United States and proposed
measures to restrain the volume of U.S. travel expenditures outside
the Western Hemisphere
—further reductions in the balance-of-payments impact of Government expenditures overseas
—a long-term export expansion program, including intensified promotional efforts and enlarged facilities for export insurance, guarantees, and financing
—consultation with foreign countries to minimize the disadvantages
to our trade which arise from differences among our national tax
systems
—further efforts to attract greater foreign investment in U.S. corporate securities, carrying out the principles of the Foreign Investors
Tax Act of 1966.
Some parts of the program, such as those designed to help rebuild
the trade surplus, were longer run measures and did not exert much
immediate effect during 1968. The proposal to impose a temporary tax
on foreign travel expenditures outside the Western Hemisphere did
not receive congressional approval during 1968. But in the areas where
it was carried into effect, the January 1968 program was extremely
successful.
XXIV 19 68 REPORT OF THE SECRETARY OF THE TREASURY
For three successive quarters, the deficit of the United States moved
toward equilibrium. The huge deficit of $1,742 million (liquidity basis)
in the fourth quarter of 1967 was reduced to $680 million in the first
quarter of 1968 as the program got underway, moved downward to
$160 million in the second quarter, and then into a small surplus, on
the basis of preliminary figures, in the third quarter.
On the official settlements measure, the deficit had reached the very
high level of $1,082 million in the fourth quarter of 1967. After the
new aotion program, the deficit declined to $552 million in the first
quarter of 1968. Surpluses of $1,523 million and $439 million were
registered in the second and third quarters.
U.S. gold losses were checked after the first quarter by the separation
of the private and official markets. I n the first quarter of 1968, U.S.
gold losses soared to $1,362 million. I n the second quarter losses were
only $22 million and in the third quarter there was a net gain of $73
million.
The dramatic improvement in the balance of payments was, of
course, extremely welcome. However, the composition of the accounts
was somewhat unbalanced with the trade surplus at abnormally low
levels. Furthermore, it had to be recognized that there were transitory
elements accounting for some of the recorded improvement. There
would be a need to guard against any overconfidence and to recall that
setbacks had previously been encountered when the balance of payments was showing an improving trend. Clearly, it would be essential
to carry through vigorously on the balance-of-payments program until
equilibrium had been established on an enduring basis.
I n t e r n a t i o n a l Finance
Events since the time of my last report have demonstrated once
again the value of cooperative multilateral action in international
financial affairs. Early in the year, the international financial system
was still unsettled by heavy speculative activity in gold markets as an
aftermath of the sterling devaluation in November 1967. After a period
of relative calm following the announcement of the January 1, 1968,
U.S. balance-of-payments program, there was a renewed surge of
speculation in foreign gold markets.
The representatives of the central banks that were cooperating
in the gold pool arrangement met in Washington over the weekend
of March 16 and 17, 1968, and developed the plans for what has
come to be known as the two-tier gold system. As a result of the
agreements reached at this meeting, the drain from monetary gold
stocks was halted and the private and official gold markets were
effectively separated. The transition at mid-March took place with
remarkable smoothness, considering the tense atmosphere that had
preceded it, the abrupt change in conditions, and the inevitable doubts
and uncertainties about anything new or unknown in the international
ANNUAL REPORT ON T H E FINANCES
XXV
monetary field. The new system has worked very well. I t has provided
additional assurance that the present $35.00 an ounce price of gold
will be maintained in official transactions.
Despite the successful resolution of the gold market problem, the
course of international financial developments was far from smooth
during the balance of the year. After a brief period of comparative
calm, the outbreak of student rioting and labor strikes in late May
turned speculative pressure on the French franc. Prompt and coordinated international action was successful in dealing with the speculative pressure and the franc improved gradually during the summer. By late summer, the gold and foreign exchange markets had
settled down to orderly trading in a reasonably calm atmosphere.
I n early September 1968 the French authorities announced the lifting of the exchange controls that had been imposed in late May. A t
about the same time, the Bank for International Settlements and
a group of 12 central banks announced that they would provide a
$2 billion medium term credit to the United Kingdom to offset reductions in the sterling balances of overseas sterling countries. By midOctober the gold and foreign exchange markets were more settled and
orderly than in many months.
I n November 1968 a wave of currency speculation developed. Continued large surpluses by West Germany encouraged a belief that the
mark might be revalued. This reacted adversely on both the French
franc and the pound sterling. The possibility of an unsettling series
of exchange rate adjustments was a clear threat to the stability of the
international financial system. A meeting of representatives of the
Group of Ten nations was held at Bonn, West Germany, between
November 20 and '22. The outcome was special border tax and other
measures by West Germany instead of a revaluation of the mark.
Both the United Kingdom and France took measures of additional
budgetary restraint. Despite widespread expectations to the contrary,
the French franc was not devalued.
The Bonn meeting represented a further recognition of the principle
of cooperative multilateral action in financial affairs affecting major
countries and major currencies. The approach to the problem was
multilateral and every effort was made to concert rational policies
and reach common decisions with financial partners. This was another
step away from a narroAv, nationalistic view of international finance
and toward the multilateral, cooperative approach.
While turbulent events in the gold and foreign exchange markets
have claimed much of the attention of the financial world during
the past year, the extension of the principle of multilateral cooperation seems sure to be the development of lasting significance. Acting
in concert, the major nations had staved off threats to the stability
of the international monetary system and proceeded with the plans
for an orderly evolution of existing arrangements.
XXVI
19 618 REPORT OF T H E
SECRETARY OF T H E
TREASURY
During the year further progress was made in implementing the
Special DraAving Rights plan. The ratification of the amendment to
the Articles of Agreement of the International Monetary Fund establishing this facility is proceeding satisfactorily, and when, in 1969,
this process has been completed and drawing levels determined, the
Avorld Avill have; taken the most fundamental progressive step in
monetary affairs since Bretton Woods. For the first time in the world's
history Ave shall be looking to the leadership of an intemational institution to provide conscious direction in recommending the amount
of groAvth in Avorld reserves which the international community needs
to facilitate trade and development.
Summary
Since this is my last Annual Report as Secretary of the Treasury,
I will supplement my usual review of recent developments Avith brief
comment on some of the major achievements of recent years in areas
of Treasury interest and responsibility. While the future Avill bring
ncAv problems requiring new solutions, there is a continuity in economic
and financial events and in established national objectives. Therefore,
a review of recent experience may be of some value in pointing to some
of the lessons that have been learned and the tasks that remain.
An important lesson of the 1960's is the enormous difference that
public policies can make in creating an atmosphere Avithin Avhich the
private economy can flourish. From early 1961 to the present, the
national groAvth rate—in terms of real gross national product—has
averaged more than 5 percent per annum. This longest economic expansion in our nation's history—nearing the end of its eighth year—
has raised our annual total real output as much as in the previous 20
years. The increase in the value of our annual production during the
current expansion is roughly equivalent to the total annual output of
the European Economic Community or the Soviet Union in a recent
year.
Until late 1965, this immense productive achievement featured stable
costs per unit of output. Within the last 3 years, costs and prices have
risen too rapidly, triggered by the rapid buildup of the war in Southeast Asia after mid-1965. Even so, the United States still has the best
overall record of price stability since 1960 of any of the major industrialized nations. But, it is all too clear that our recent price record
must be improved. I t is a major challenge for future U.S. domestic
policy to maintain a healthy rate of growth in production and employment Avhile moving back to a noninflationary environment. The efforts
of the incoming Administration in tliis area deserve, and should receive, full support and cooperation.
Economic groAvth—even in a noninflationary enviroimient—Avill certainly not solve all of our domestic problems. But the recent record
demonstrates clearly that vigorous economic groAvth remains the most
ANNUAL REPORT ON T H E FINANCES
XXVII
powerful social weapon at our disposal. The economic gains of recent
years have brought substantial gains to minority groups and given an
added degree of dignity and security to millions of Americans. And, in
an interdependent world economy, the better U.S. economic performance has also had dramatic effect internationally. The growth of the
entire free world has picked up in this decade and the volume of trade
has increased impressively.
Experience has proven the value of the use of a range of key policy
tools in the pursuit of economic growth and social progress. Suitably
adapted to changing circumstances, and supplemented by new techniques, these policy tools can continue to make a distinctive contribution to the promotion of our economic welfare. The major tools Avhich
have proven their value can conveniently be summarized under the
folloAving headings: structural policies, flexible and coordinated fiscal
and monetary policies, cooperation between labor, management, and
government, and international policy coordination and cooperation.
Structural policies in the tax area have greatly strengthened investment incentives since the early 19'60's and promoted a more rapid
rate of groAvth in productivity. Even Avith the recently enacted surcharge. Federal income tax rates are much lower than at the beginning
of this decade. Tax reform has continued to be a major and continuing
objective.
Structural policies outside the tax area also hold great promise.
I n recent years, the development of intensified public policy and
imaginative efforts in private industry in manpoAver training have
mounted a concerted attack on structural unemployment. Sizable investment in these activities and the underlying educative capacity that
makes manpower training meaningful, coupled Avith the investment in
tools of production, have become recognized as essential to the successful pursuit of the economies of growth.
Flexible and coordinated fiscal and monetary policies will continue
to be major instruments of national economic policy in the years
ahead—as they have been in this decade. During recent years it has
been shoAvn that fiscal policy can be used to restrain as well as to stimulate. The long delay in the application of fiscal restraint was unfortunate. I t may point to the need for some procedures Avhereby the fiscal
position can be adjusted more smoothly and promptly. This is a matter
of major importance since an appropriate degree of fiscal stimulus or
restraint, combined with a flexible and responsive monetary policy,
can help insure that growth in total spending and productive capacity
will be kept in reasonable correspondence, thereby avoiding the waste
of unemployment and the inequity of inflation. I n the absence of a
coordinated and stabilizing response from fiscal and monetary policy,
Ave run the risk of returning to the old cycle of expansion and contraction—^boom and bust.
XXVIII 1968 REPORT OF THE SEGRETARY OF THE TREASURY
I n recent yearSj a remarkable degree of cooperation, understanding,
and mutual confidence has gradually emerged between business and
labor and Government. Business and labor and Government have
moved together in a groAving partnership for progress. A key problem
remains to be soh^ed: wage-price stability at high levels of employment.
Even with sound monetary and fiscal policies,'Avage-price stability
depends upon the determination of American business and American
labor to avoid wage rises that outdistance our gains in productivity
and to take the national interest into account in pricing decisions. Wage
and price stability is vital to both our balance of payments and our
domestic progress—business and labor and Government have a joint
responsibility to cooperate in its achievement.
I n the area of international fiiiancial policy coordination and cooperation, great progress has been made in recent years. This progress
has been achieved during a period of formidable pressures on the international financial system and on our own balance of payments. Increasingly, the major countries are sharing the responsibility on a
multilateral free world scale for an improved trade and payments
system, mutual security arrangements that are soundly and fairly
financed, and an expanding system of development aid and finance.
The landmark agreement on the Special Drawing Rights Plan to provide for orderly groAvth in world reserves is but one indication of the
cooperative approach in international financial affairs.
I n all of these areas of domestic and international economic policy,
there are common objectives and a growing consensus as to the means
of achieving them. While there are differences of opinion and shadings of emphasis, there is also a considerable area of agreement on
national economic objectives. We must keep the economy growing and
productive, the nation's finances in reasonable balance, and the dollar
sound and respected.
HENRY H .
FOAVLER,
Secretary of the Treasury.
To
THE P R E S I D E N T OF T H E S E N A T E .
T o THE S P E A K E R OF T H E H O U S E OF R E P R E S E N T A T I V E S .
REVIEW
OF FISCAL
OPERATIONS
Financial Operations
Basis
Budget receipt and expenditure data in this section are on the
basis of the budget concepts adopted pursuant to the recommendations
of the Presidents Oow/mission on Budget Concepts}
Summary
On the basis of the new unified budget concepts, the deficit for
fiscal 1968 Avas $25.2 billion (compared Avith $8.8 billion for fiscal
1967, using the same basis). Net reoeipts for fiscal 1968 amounted to
$153.7 billion ($4.1 billion over 1967) and outlays totaled $178.9
billion ($20.5 billion over 1967).
The deficit of $25.2 billion and the $1.3 billion increase in cash and
monetary assets were financed by borrowing $23.1 billion friom the
public and $3.4 billion through other means. As of June 30, 1968,
Federal securities outstanding totaled $372 billion, comprised of $348
billion in public debt securities and $24 billion in agency securities.
Of the $372 billion, $291 billion represented borrowing from the
public. The Government's fiscal operations in fiscal years 1967-68 are
summarized as follows:
In billions of dollars
1967
Budget receipts, expenditures, and lending:
Receipt-expenditure account:
Receipts.
Expenditures
._
.
Budget deficit ( - )
-19.1
5.1
6.1
153.7
178. 9
-25.2
-8.8
.
.
.
23.1
-1.3
3.4
2.9
4.9
1.0
financing
' See pages 8-10 for a discussion of.the Commission's recommendations.
-3.7
. 149.6
. 158.4
-.
Means of financing:
Borrowing from the public
Reduction of cash and monetary assets, increase (—).other means
_
Total budget
153. 7
172.8
. 149.6
. 153.3
Receipt-expenditure deficit (—)
Loan account:
Netlending
Total budget:
Receipts
Outlays
1968
8.8
25.2
1,9 6.8 REPORT OF THE SECRETARY OF THE TREASURY
Budget Receipts a n d Outlays
CHART 2
THEBUOGST
Receipts
Budget reoeipts under the more inclusive concept recommended
by the President's Commission on Budget Concepts, amoiunted to
$153.7 billion in fiscal year 1968, $4.1 billion above fiscal 1967. NCAV
peaks of budget revenue have thus been established in each of the last
9 years. The 1968 increase occurred despite the virtual end (in fiscal
year 1967) of the aoceleration of corporate payments under the Revenue Acts of 1964 and 1966. On the other, hand, fiscal 1968 reoeipts were
bolstered by the full-year effect of rate increases for employment taxes.
I n summary, Govemmeint revenues continued to rise during fiscal
1968, accompanying the general expansion in economic activity. A
comparison of net budget receipts by major sources for the fiscal years
1967 and 1968 is shown below. Estimates of receipts requiried of the
Secretary of the Treasury are shown separately in the President's
budget.
[In millions of dollars]
1968
Individual income taxes. _.
Corporation income taxes
Employment taxes—
UnemjployTnent insurance
C ontributions for other insurance and retirement
Excise taxes
Estate and gift taxes
•.
Customs
Miscellaneousreccipts
Total budget receipts
_
_
Increase, or
decrease (—)
61,526
33,971
27,823
3,659
1,865
13,719
2,978
1,901
2,120
68, 726
28, 665
29, 224
3,346
2,051
14, 079
3,051
2,038
2,498
7,200
-5,307
1,401
-314
149,562
153, 676
4,113
185
360
72
138
378
REVIEW OF FISCAL OPERATIONS
5
Individual income taxes.—Individual income taxes amounted to
$68.7 billion in fiscal 1968, up $7.2 billion from 1967. The percentage
rise of 12 percent Avas about the same as in 1967 and reflected generally
rising incomes.
Ccorporation income taxes.—Corporation income receipts fell off'
sharply during fiscal 1968, amounting to $28.7 billion, down $5.3 billion from 1967. The major part of this drop was due to the end of the
acceleration of payments in fiscal 1967. (The acceleration of payments
added to receipts during the fiscal years 1964 through 1967 but did
not affect tax liabilities.)
Also contributing to the drop in receipts Avas a $4.0 billion decrease
in corporate profits from calendar year 1966 to 1967. These are the
calendar year results which most affect the fiscal year 1967 to 1968
comparison of receipts.
Employment taxes.—Employment taxes totaled $29.2 billion in
fiscal 1968, up $1.4 billion from 1967. The rise reflected expanding payrolls and number of people employed, as well as an increase in the combined tax rate on employers and employees. The combined tax rate
Avas increased from 8.4 percent to 8.8 percent effective January 1,
1967. The higher rate Avas wholly reflected in fiscal 1968 but only
partially in 1967.
Unemployment insurance.—Unemployment insurance receipts fell
off some $300 million in fiscal 1968, amounting to $3.3 billion. The
drop was almost wholly due to smaller deposits by States in the unemployment trust fund.
Contributions for other insurance and retirement.—At $2.1 billion in
fiscal 1968, such premiums were some $185 million above 1967. These
premiums are composed of medical insurance for the aged and Federal
employee retirement deductions, each increasing in fiscal 1968.
Excises.—Excise tax receipts are detailed in the following table.
[In millions of dollars]
1967
Alcohol taxes
Tobacco taxes
Documents
Manufacturers excise taxes
Retailers excise taxes (repealed)
.
Miscellaneous excise taxes
Undistributed depositary receipts and unapplied collections
Gross excise taxes
Less refund of receipts
Net excise taxes
• •
1968
Increase, or
decrease (—)
4,076
2,080
68
5,478
4
1,732
676
4,287
2,122
14,114
395
13,719
1,859
212
42
-20
236
-3
127
288
-387
14,320
241
14,079
207
-163
360
49
6,714
1
Excise taxes rose from $13.7 billion in fiscal 1967 to $14.1 billion in
1968, an increase of some $360 million. Over $250 million of this
rise was in the alcohol and tobacco taxes.
318-223—69
3
6
li9 6.8 REPORT OF THE SECRETARY OF THE TREASURY
Estate and gift taxes.—Estate and gift taxes reached $3.1 billion in
fiscal 1968, only slightly above 1967.
Customs.—Castoms duties continued to advance in fiscal 1968,
amounting to $2.0 billion, $138 million greater than in 1967. The rise
reflected a further increase in taxable imports.
Miscellaneous receipts.—Miscellaneous receipts amounted to $2.5
billion in 1968, increasing some $380 million. With the changes in
budget concepts reflected in this section, miscellaneous receipts are
largely the deposits of earnings by Federal Reserve banks. These increased $286 million.
Outlays
Total outlays in fiscal 1968 were $178.9 billion (compared with
$158.4 billion for 1967). The outlays consisted of expenditures in the
receipt-expenditure laccount of $172.8 billion and net lending in the
loan account of $6.1 billion. Outlays for fiscal 1968, by major agency,
are compared to those of 1967 in the folloAving table. For details of
the receipt-expenditure account and the loan account see the Statistical
Appendix.
[In millions of dollars]
Agency
Funds appropriated to thc President
Agriculture Department
Defense Department
Health, Education, and Welfare Department
Housing and Urban Developraent DepartmentLabor Department
Transportation Department.
Treasury D e p a r t m e n t . . . . . .
Atomic Energy Commission
National Aeronautics and;Space Administration
Veterans' Administration
other....
Undistributed interfund receipt transactions
Total outlays
1067
4,872
5,841
68,763
34,608
2,783
3,286
5,428
13,059
2,264
5,423
6,845
9,189
—4,009
158,352
1968
4, 913•
7,308
78, 673
40, 576
4,140
3, 272
5,732
14, 655
2,466
4,721
6,858
10,119
178,862
Increase, or
decrease (—)
41
1,467
9,910
5,969
1,357
-14
304
1,595
202
-703
14
930
-561
20, 511
Cash and Monetary Assets
On June 30, 1968, cash and monetary assets directly related to the
budget amounted to $11,287 million, an increase of $1,303 million over
fiscal 1967. The balance consisted of $6,785 million in the general account of the Treasurer of the United States, which included $91 million
net transactions in transit as of June 30 (this balance was $1,094
million less than June 30, 1967) ; $3,536 million Avith other GoA^ernment officers ($1,858 million more than 1967); and $966 million Avith
the International Monetary Fund ($538 million more than 1967). For
a discussion of the assets and liabilities of the Treasurer's account see
pages 98-100. The transactions affecting the account in fiscal 1968
follow:
REVIEW OF FISCAL OPERATIONS
7
Transactions affecting the account of the Treasurer of the TJnited States, ftscal
1968
[In millions of dollars]
Balance June 30, 1967
Excess of deposilts, or withdrawals (—), budget, trust, and
other accounts:
Deposits
Withdrawals ( —)
Excess of deposits, or withdrawals ( —), public debt
accounts:
Increase in gross public debt
Deduct:
Excess of Government agencies' investments in public debt issues
4,307
Accruals on savings and retirement plan
bonds and Treasury bills (included in
increase in gross public debt above)
5, 319
Less certain public debt redempitions (included above in withdrawals, budget,
trust, and! other accounts)
5,315
Net deductions
7, 759
165,086
184,581
-19,495
21, 357
4,311
17,046
Excess of sales of Government agencies' securities in the market
Net transactions in clearing accounts (documents not received or
classified by (the Oflfice of the Treasurer)
Net transactions in transit
3, 480
Balance June 30, 1968
—2, 095
91
6,785
Corporations and Other Business-type Activities of the
U.S. Government
The business-type programs which Government corporations and
agencies administer are financed by various means: Appropriations,
sales of capital stock, borrowings from either the U.'So Treasury or
the public, or by revenues derived from their own operations.
Corporations or agencies having legislative authority to borrow
from the Treasury issue their formal securities to the Secretary of the
Treasury. Amounts borrowed are reported in the periodic financial
statements of the Government corporations and agencies as part of
the Government's net investment in the enterprise. I n fiscal 1968, borrowings from the Treasury, exclusive of refinancing transactions,
totaled $12,608 million, repayments were $10,179 million, and outstanding loans on June 30,1968, totaled $27,040 million.
Those agencies having legislative authority to borrow from the
public must either consult with the Secretary of the Treasury regarding the proposed offering, or have the terms of the securities to be offered approved by the Secretary.
During fiscal 1968, Congress granted IICAV authority to borrow from
the Treasury in the total amount of $1,587 million, and reduced existing authority by $791 million, resulting in a net increase of $868 mil-
8
li9 6 8 REPORT OF THE SECRETARY OF THE TREASURY
lion. The status of borrowing authority and the amount of corporation
and agency securities outstanding as of June 30,1968, are shown in the
Statistical Appendix.
Unless otherwise specifically fixed by law, the Treasury determines
interest rates on its loans to agencies by considering the Government's
cost for its borrowings in the current market, as reflected by prevailing mai'ket yields on Government securities which have maturities
comparable with the Treasury loans to the agencies. A description of
the Federal agencies' securities held by the Treasury on June 30,1968,
is shown in the Statistical Appendix.
During fiscal 1968, the Treasury received from agencies a total of
$888 million in interest, dividends, and similar payments. (See the
Statistical Appendix.)
Quarterly statements of financial condition, income and expense,
and source and application of funds are submitted to the Treasury
by Government corporations and agencies. These statements serve as
the basis for the combined financial statements compiled by the Treasury which, together with the individual statements, are published
periodically in the ''Treasury Bulletin." Summary statements of the
financial condition of Government corporations and other businesstype activities, as of June 30, 1968, are shown in the Statistical
• Appendix.
Government-wide Financial Management
New budget concepts
On March 3, 1967, President Johnson appointed a Commission "to
make a thorough study of the Federal budget and the manner in Avhich
it is presented to the Congress and the public." The decision to form
a Commission on Budget Concepts climaxed many years, under several
Administrations, of discussion and criticism about the inadequacy of
the Federal budget. Confusion and criticism grew primarily because
of the use of three major "budget" concepts (administrative, consolidated ca^h, and national income accounts) and the accomiting treatment of individual items or groups of items within the three concepts.
The Secretary served as a member of the Commission, which carried
on its deliberations throughout the summer and submitted its report
to the President in October 1967. Among the major recommendations
made by the Commission were :
(1) That a unified budget statement, with complementary rather
than competing concepts, be adopted to replace the three or more existing concepts;
(2) That the budget have broad coverage to include all programs
of the Federal Govemment, including trust funds;
REVIEW OF FISCAL OPERATIONS
9
(3) That a breakdown of total Government outlays between loans
and other expenditures be made witliin the unified budget.
(4) That receipts which are enterprise or market-oriented be netted
i.e., treated as offsets to expenditures to which they relate;
(5) That the budget include a "means of financing" statement
utilizing a debt concept which emphasizes net Federal borrowing
from the public;
(6) That the sale of participation certificates in pools of loans be
treated as a means of financing (borrowing) rather than as budget
receipts;
(7) That receipts and expenditures be reported on the accrual basis
instead of a cash basis; and
(8) That subsidies involved in Federal direct loan programs be
separately identified in the expenditure account.
All of these recommendations except the last two were implemented
in the 1969 budget presented to the Congress in January 1968 and in
the Treasury's financial reports for fiscal 1968. As suggested by the
Commission, the Bureau of Accounts, collaborating with Bureau of
the Budget and General Accounting Office staff, conducted a review of
all deposit fund accounts in order to classify the accounts within or
outside the new unified budget.
A steering committee representing the Bureau of the Budget, the
Genei^al Accounting Office, and the Treasury is guiding joint efforts
toward implementation of the last two reconimendations. Governmentwide, through a number of specialized task groups:
ACCRUED EXPENDITURES AND NONTAX RECEIPTS
The Commission recommended that the conversion to the accrual
basis take place Avith the 1971 budget to be preceded by a test period
beginning July 1968. As a first step, meetings were held in February
and March 1968 to discuss the requirements with top-level agency financial personnel, identify potential problems, and determine agency
capability to implement the Commission's recommendation on
schedule.
After meeting with all major agencies, the Steering Committee
focused on drafting necessary regulations to guide agencies in preparing for the test and subsequent conversion of the Budget and
Treasury reports from the cash to the accrual basis. Bureau of Accounts staff participated in a coordinated effort to define the new requirements, the outgroAvth of which was Bureau of the Budget Bulletin No. 68-10, dated April 26,1968, the Comptroller General's letter
to agencies dated May 4, 1968, and Transmittal Letter No. 18 to the
Treasury Fiscal Kequirements Manual, dated June 20,1968. The latter
10
19 68 REPORT OF TPIE SECRETARY OF THE TREASURY
set forth preliminary requirements for reporting accrual data to the
Treasury during the test period (fiscal year 1969).
TAVO major problem areas were identified iu discussion with agencies, namely (1) the reporting of unbilled cost on Fedeml contr'acts
under the constructive delivery concept recommended by the Commission and (2) the reporting of accrual data by grantees under Federal
grant programs. The Steering Committee appointed separate task
force groups, with Treasury representation, to study each area in
depth. These studies will be completed early in fiscal 1969.
ACCRUAL OF CORPORATE INCOME TAXES AND EXCISE TAXES
The Comniission recommended that all budget receipts be reported
on the accrual basis as soon as feasible and specified corporation income taxes and excise taxes as categories which should be converted to
the accrual basis promptly. The Steering Committee established a
study team consisting of representatives from the Treasury Department (Office of Tax Analysis (Chairman), Internal Revenue Service,
and Bureau of Accounts), Bureau of tlie Budget, General Accounting
Office, and Department of Commerce.
IDENTIFICATION OF INTEREST SUBSIDIES
It was the Commission's recommendation that the full amount
of the interest subsidy on loiaiis, 'as compared to Treasury borrowingcosts, be determined and specifically disclosed in the expenditure
account of the budget, and furthermore, that it be measured on a capitalized basis at the time the loans are made. In May, all major lendiag
agencies were invited to offer suggestions on the most practical method
of implementing this recoimnendation. Further efforts will continue in
fiscal 1969.
Joint Financial Management Improvement Program
On April 29,1968, the Secretary met Avitli the Comptroller General,
the Director of the Bureau of the Budget, and the Chairman of the
Civil Service Commissioil to review progress under the Joint Financial
Management Improvement Program (JFMIP). In addition to topics
involving key recommendations of the President's Commission on
Budget Concepts, a joint project was approved to conduct a broad
review of Federal grant-in-aid programs with the objective of simplifying their financial administration. Progress on projects studying
letter-of-credit operations and payment for transportation services Avas
reviewed.
The Treasury Department is chairing the J F M I P project established to evaluate the application, administration, and operation of the
REVIEW OF FISCAL OPERATIONS
11
letter-of-credit method of financing Federal programs. I t is expected
that reconimendations will be made early in fiscal year 1969 concerning
(a) further application of the system, (b) program agency monitoring
of the system, (c) problems in Stiate, municipal, or other local laws
Avliich may impede optimum use of the system, (d) methods to reduce
the amount of cash in the hands of secondary recipients, and (e)
other improvements whicii would result in keeping cash in Treasury
until actually needed.
Use of letters of credit
The use of letters of credit to finance appropriate Federal programs has continued to expand. During fis'cal year 1968, it Avas applied
to additional programs in the Departnient of Health, Education, and
Welfare, the Federal Extension Service of the Department of Agriculture, and the Department of Housing and Urban Development.
This brought the number of p'articipating entities to 26. Over 60,000
draw-doAvns, totaling $18.3 billion, were generated in fiscal 1968.
Federal Tax Deposit System
The Federal Tax Deposit System which was initiated in fiscal 1967
for corporation income taxes was extended in 1968, as planned, to all
other classes of taxes formerly handled through the "depositary receipts" systeni. The new system will produce substantial operating
economies.
F e d e r a l Debt Management
The primary function of Federal debt nianagement is to raise the
funds needed to meet expenditures not covered by revenues and to
refund maturing debt obligations. This primary function must be
carried out in a manner that contributes to noninflationary growth in
the doniestic economy and achievement of balance in our international
accounts. Secondary objectives are establishing and maintaining a wellbalanced debt structure, providing debt instruments commensurate
Avith the needs and requirements of an orderly securities market, coordinating the groAving volume of Government agency debt operations
with Treasury debt management policy, and minimizing the interest
cost of Treasury and Federal agency borroAving.
Debt management policy faced a complex task in fiscal 1968. The
major problem was the very size of the combined refundings and IICAV
cash needs. By normal standards the volume of maturing Treasury and
agency issues was moderate. However, the financing of the $25.2 billion budget deficit would add a heavy Federal demand to large private
and State and local government credit demands. Moreover, the protracted uncertainty over the fate of the fiscal prograni pending before
Congress made forAvard planning unusually difficult.
12
119 68 REPORT OF THE SECRETARY OF THE TREASURY
CHART 3
iARKET m i m AT CONSTANT MATOWTfES' 1962-^68
e.o
u
- i ^ ^ ^ — ? ; ^ ' ^ ' ^ ; ^ ^ - / Year
4.D
V-^* "•''^..-"
u
^ 3 Month
Bills __
S.A
MhjMlMj,ulML
1963
196a
1964
1966
aU^
u.,i.iiL,.i..ij
1968
1 Monthly averages of daily estimated yields of public debt securities. Bank
rates on Treasury bills.
discount
To finance the large Federal demands for credit. Treasury debt
management policymakers relied in good part on Treasury bills and
short term notes. Nevertheless, the Treasury was able to minimize the
erosion of the debt structure by combining intermediate exchange
issues with short term cash offerings. This allowed the placing of a
moderate amount of debt in the 7-year area in three of the four
quarterly financings.
I n the domestic economy the first half of the fiscal year saw a
quickened rate of real groAvth accompanied by an excessively rapid
rise in costs and prices. A t the same time the capital market Avas subjected to the ebb and flow of expectations for peace in Vietnam. The
President formally requested a tax increase in August, but the Congress did not act until the end of the fiscal year. I n the interim there
were several occasions on which approval seemed near followed by
frustrating delays. Consequently economic restraint depended heavily
on monetary policy during the fiscal year.
The discount rate was raised by one-half of a percent on November 20, 1967, and again on March 15, 1968, and on April 19, 1968,
increasing the rate during the year to 51/^ percent. I n January the
Federal Reserve increased reserve requirements on commercial bank
deposits and in April raised the maximum rates payable on certificates
of deposit to 6i/4 percent on the longest maturities.
A series of international problems arose during the fiscal year. I n
mid-NoA^ember 1967 the British pound came under severe pressure and
was devalued from $2.80 to $2.40. I n the final quarter of 1967, the
U.S. balance of payments deteriorated sharply, and in his New Year's
REVIEW
OF FISCAL
13
OPERATIONS
CHART 4
rmVATE H0LDIN6S OF MIARKETABIE I^EOEflAL SECUBITIES
mi
1966
mt
196? 1966
19e4
1965
16S6 1967
mS
Fiscal ¥*ar$
1 Export-Imiport a n d FNMA participation certificates.
Day message the President announced a broad program to bring our
payments into or close to equilibrium. Sharp increases in gold sales
in late 1967 and the renewed speculative pressure on the British pound
and gold at the end of February 1968 led to the establishment of the
two-price gold system in mid-March.
Market rates on Treasury securities rose steadily through December
1967 with the 3-month bill showing an increase of 1 percent over June
levels while yields on intermediate term securities rose one-half to
three-quarters of a percent. On December 30, 1967, 3-month bills were
CHART 5
CHAKSES m m m m S OF FEOEBAlSECilBmES
h27.3
Fiscal Year 1967
+iDi
I
Fiscal Year 1968
+6^
E+9.of
+5.3
^
^
Tijtel
Aeeoums
.
5
5
^
+25
Fl
Cdm'l
Corpor-
-1.3
14
19 68 REPORT OF THE SECRETARY OF THE TREASURY
at the 5-percent level and intermediate coupon issues were about 5%
percent.
During January and early February interest rates on Government
securities dropped back moderately, then rose through the third Aveek
in May before the niarket became convinced that the Congress Avould
enact a tax increase. I n this period the short bill rate rose an additional
percentage point and intermediate coupon rates rose one-half of 1 ^
percent. The tax action sharply reduced rates in the last month of the
fiscal year, with 3-moiith bills yielding 5.30 percent and intermediate
coupon issues yielding 5% percent at the end of the fiscal year.
Public Debt Changes
Treasury debt securities outstanding increased $21.4 billion in fiscal
1968 to a level of $347.6 billion on June 30,1968. Over the course of the
fiscal year the Treasury issued $50.3 billion of new marketable securities
excluding $11.0 billion of tax anticipation bills Avhicli Avere both issued
and redeemed during the fiscal year. Redemptions, also excluding tax
bills, totaled $34.4 billion.
J u n e 30, J u n e 30,
1967
1968
Class of debt
Increase, or
decrease (—)
I n billions of dollars
Public debt securities:
Marketable public issues by maturity class:
Within 1 year
1-5 years
5-20 years
^
Over 20 years
Total marketable issues
Nonmarketable public issues:
Savings bonds:
Series E and H
Other series
U.S. savings notes
Investment series bonds
Foreign series securities
Foreign currency securities
Other nonmarketable debt
1...
_
106.4
64.5
39.2
16.6
16.8
-7.0
6.4
-0.2
210. 7
226.6
15.9
50.8
0.4
2.6
0.6
0.9
0.1
51.6
0.1
0.2
2.5
2.0
1.7
0.1
0.8
-0.3
0.2
-0.1
1.4
0.8
55:5
56.2
3.9
58.3
59.5
3.2
2.8
3.4
-0.8
326.2
347.6
21.4
(*)
.
_.
Total nonmarketable public issues
Special issues to Government investment accounts (nonmarketable).
Noninterest-bearing debt
Total gross public debt
89.6
71.4
32.8
16.8
(*)
*Less than $50 million.
The outstanding marketable public debt increased $15.9 billion. The
total maturing within 1 year rose $16.8 billion, 1 year-5 year maturities
decreased $7.0 billion, and debt maturing beyond 5 years increased by
$6.1 billion. The increase in debt maturing beyond 5 years reflected
the offerings of 7 year maturities in three of the four quarterly Treasury financings. Despite these ofi-erings, hoAvever, the average length
of the public marketable debt declined 5 months to 4 years 2 nionths.
Nonmarketable Treasury debt outstanding increased $6.2 billion.
REVIEW OF FISCAL OPERATIONS
15
Special nonmarketable securities issued to official foreign agencies increased $2.2 billion and special securities issued to Government accounts rose $3.4 billion. Outstanding Series E and H savings bonds
and U.S. savings notes increased $1.0 billion; cash sales and the interest accrual on outstanding Series E bonds and U.S. savings notes
amounted to $6.7 billion and redemptions totaled $5.7 billion. Eedemptions of other savings bonds, investment series bonds, and other nonmarketable debt aniounted to $0.4 billion.
Matured debt and debt bearing no interest declined $0.8 billion.
Federal agency issues outstanding reached $24.4 billion in fiscal 1968,
an increase of $6.0 billion. More than four-fifths of the increase Avas
in issues by the Federal National Mortgage Association—$3.1 billion
from participation certificates sales and $1.8 billion from secondary
niarket operations. Banks for cooperatives issues rose $0.2 billion and
Federal intermediate credit bank issues increased $0.4 billion. Securities issued by the Export-Import Bank increased $0.4 billion;
Tennessee Valley Authority $0.1 billion; Federal Housing Administration $0.1 billion. All other agency issues on balance declined $0.1
billion.
FINANCING OPERATIONS
The Treasury's operating cash balance at the end of fiscal 1967 was
$5.7 billion, the lowest yearend level since fiscal year 1959. On June 28,
1967, hoAvever, the Treasury had announced an auction of $4 billion of
tax anticipation bills ($2 billion maturing March 22, 1968, and $2
billion maturing April 22,1968) for July 5 Avith payment on July 11,
1967. The Treasury also had announced that it would also raise $1.3
billion through adding $100 million each week to the offerings of
3-nioiitli bills begimiing July 13 and an additional $900 million by
adding $100 million each month to the annual bills beginning September 30, 1967.
Prior to this announcement, the 3-month rate had reached a fiscal
1967 low of 3.33 percent in the third week of June. However, a heavy
tone developed in the bill market and by July 5, the 3-month bill rate
had climbed to 4.29 percent. Although full tax and loan credit was
allowed, the average issuing rates on the March and April tax bills
Avere 4.86 percent and 4.90 percent, respectively.
Sentiment in the coupon sector of the Government securities market
Avas apprehensive in early July, but by mid-month a steadier tone
developed, reflecting primarily favorable market reaction to discussions of an early tax increase. A cautious atmosphere reappeared
briefly after mid-month as participants awaited terms ofthe Treasury's
August quarterly refimding, revised budget figures for fiscal 1968,
and clarification of the tax situation.
16
1.9 68 REPORT OF THE SECRETARY OF THE TREASURY
To refund the August maturities the Treasury offered a 15-month
5%^ percent note priced at 99.94 to yield 5.30 percent for cash. The
maturing issues were $5.6 billion 5i/4 percent certificate of indebtedness, $2.1 billion 3% percent note, and $1.9 billion 4% percent note.
Of the $9.6 billion total, $3.5 billion was held by private investors.
Allotments of the new note to private investors totaled $3.8 billion,
resulting in net new cash of $0.3 billion.
In September, market participants began to assume that even with
passage of the Administration's tax proposals. Treasury's near term
financing needs would be greater than had been expected. Prices of
Government coupon securities generally drifted lower and bill rates,
which had been steady at the beginning of the month, began to
climb under expectations that a sizable portion of the financing needs
would probably be met through issuance of additional bills.
On September 22 the Treasury announced its second offering of
tax anticipation securities for the fiscal year in an amount of $4.5
billion and indicated that it planned to continue to add $100 million
weekly to the 3-month bills for another full cycle of 13 weeks.
Of the $4.5 billion tax bills, $1.5 billion represented an additional
offering of the April 22, 1968, maturity; the remaining $3 billion was
to mature on June 24, 1968. Average rates in the October 3 auction
were 4.93 percent on the April maturity and 5.11 percent on the June
maturity. Commercial banks were allowed to pay for 75 percent of
their allotments through credit to tax and loan accounts.
The upward trend of capital market yields continued during October. This reflected market disappointment over the postponement
of action on the President's surtax proposal, and over the outlook for
a settlement in the Vietnam conflict, as well as pressure of continuing large amounts of new corporate issues entering the market. At
the close of the month market yields of outstanding Treasury securities were aibout 5% percent in the intermediate maturity area.
The terms of the November quarterly financing were announced
on October 25. The Treasury offered $12.2 billion of new notes to refund the maturing $10.2 billion of 4% percent notes and 3% percent bonds and to raise about $2 billion of new cash. The offered
issues were $10.7 billion of a 15-month, 5% percent note to mature
in February 1969 and $1.5 billion of a 6% percent, 7-year note to
mature in November 1974. This was the first use of the 7-year note
authority granted by Congress in June 1967. A heavy oversubscription
allowed the Treasury to overallot and raise $2.2 billion of new cash
by issuing $1.7 billion rather than $1.5 billion of the 7-year 5% percent notes. Including the increase in regular Treasury bills this
brought the total of ncAv cash raised in the market since the begin-
REVIEV^ OF FISCAL OPERATIONS
17
ning of the fiscal year to $16.3 billion and completed the Treasury's
financing operations for the July-December half.
On November 18, immediately after the settlement day of the
[Treasury financing, the British Governnient devalued the pound
from $2.80 to $2.40, and increased the Bank of England discount
rate from 6i/^ percent to 8 percent. In the wake of the British action
the Federal Eeserve Board announced a discount rate increase from
4 percent to 4i/^ percent. After an initial reaction, the Government
market stabilized and, apart from a temporary reaction to the early
December announcement that Congress would delay action on the
tax proposal, remained fairly steady until the close of the calendar
year.
On January 1, President Johnson 'announced a program to improve our international balance of payments. This announcement, following on the heels of the Board of Governors' action in late December
to increase member bank reserve requirements by one-half of a percent, had a beneficial effect on the capital market.
On January 3, the Treasury announced an offering of an additional $21^ billion in tax anticipation bills to mature on June 24,
1968. Comniercial banks were again permitted to pay for the bills
by full credit to tax and loan accounts. The auction was considered
strong and the average issuing rate was 5.06 percent. For the remainder of the month of January prices of intermediate and long term
securities continued to gain and a generally strong investment demand persisted.
On January 31, the Treasury announced the offering of a long
term note to refund the February maturities, and prerefund a sizable segment of the August and November 1968 maturities. This was
combined with a cash offering of a short term note to cover attrition and raise additional new cash.
Holders of 5% percent notes due February 15, 4 ^ percent notes
and 3% percent bonds due August 15, and 5%^ percent notes and 3%
percent bonds due NoA^ember 15 were permitted to exchange their
holdings for a new 5% percent 7-year note to be dated February 15,
1968, and maturing on February 15,1975. Of the $24.3 billion of these
securities outstanding, approximately $12.1 billion was held by private investors. Subscription books for the exchange were open February 5—7. The Treasury also announced that it would offer about
$4 billion of 15-month notes for cash on February 13.
About $1.3 billion of the $1.7 billion of privately-held February
miaturities ^and $2.6 billion of the $10.3 billion privately-held prerefunded maturities were exchanged. The total of the new 5'% percent
notes issued, including exchanges by the Federal Eeserve and Govern-
18
1<9 68 REPORT OF TPIE SECRETARY OF TI-IE TREASURY
ment accounts, was $5.1 billion. Ternis of the short note were announced on February 8, 1968. The coupon Avas 5% percent and
payment through credit to tax and loan accounts by commercial banks
was allowed. An allotment ratio of 39 percent on subscriptions in
excess of $200,000 resulted in a total issue of $4.3 billion wliich
covered the attrition in the exchange offering and raised an additional
$3.8 billion of new cash.
On February 20 the Treasury announced that the weekly offerings
of 3-moiitli bills would be enlarged by $100 million commencing on
February 26 and probably running for a full 13-week cycle ending
with the auction of May 20.
Developments in domestic financial markets during Marcli were
largely dominated by foreign exchange and gold market developments.
Speculative pressures on the pound and Canadian dollar, beginning
in late February, spread to tlie U.S. dollar. As a consequence, the
structure of interest rates shifted moderately upward in March. Pressures on the financial markets increased steadily over the month and
betAveen March 15 and March 22 the discount rates of all 12 Federal
Eeserve banks Avere increased from 4i/^ percent to 5 percent.
I n April the Treasury returned to the bill market and announced
a weekly increase of $100 million in the 6-month bill cycle beginning
Avitli the auction of April 15 and continuing through the end of the
fiscal year for total new money of $1.1 billion.
On April 15 the Board of Governors of the Federal Eeserve Systeni
approved a discount rate increase from 5 percent to 5l^ percent and
liberalized the schedule of maximum interest rates payable on large
denomination certificates of deposit. Prices in the Government coupon
market were marked down sharply creating the highest rate structure
in the short and intermediate niarket since the fall of 1966.
T h e May financing agaiii combined an exchange and a cash operation, using a 6 percent, 7-year note maturing in May 1975 for the
long exchange option and a 6 percent, 15-montli note maturing August
1969 for the cash anchor issue. Unlike the February financing, the
terms of the two IICAV issues were announced concurrently.
The 7-year note Avas offered to holders of $8.0 billion of 4 % percent
Treasury notes and 3 % percent bonds maturing on May 15. Private
investors held $3.9 billion of the eligible issues. The cash offering
of the 6 percent 15-montIi note Avas $3.0 billion to cover attrition and
raise additional new nioney. Commercial banks Avere alloAved to credit
tax and loan accounts in payment.
Attrition on the privately-held portions of the maturing issues was
only $1.3 billion, and the cash subscription on the short issue was
sufficient to alloAv the Treasury to issue $3.4 billion Avith a 28 percent
19
REVIEW OF FISCAL OPERATIONS
allotment on those subscriptions above $100,000. This resulted in net
iieAv cash of about $2.1 billion.
The two accompanying tables summarize the Treasury's major
financing operations during the fiscal year. Data on allotments by
investor classes will be found in the Statistical Appendix.
Offerings of marketable Treasury securities excluding refunding of regular bills,
fiscal year 1968
[In millions of dollars]
Cash offerings
Issue
dato
1967
Apr.l
Aug. 15
Aug. 30
Oct.l
Nov. 15
Nov. 16
1968
Feb. ] 5
Feb. 21
Apr.l
May 15
May 15
Description
For new
money
Exchange offerings
For
maturing
issues
For
refunding
In advance
refunding
Total.
NOTES
VA% exchange note-Apr. 1,1972 i
5H% note-Nov. 15,1968 at 99.94 3
5H% note-Feb. 15,1971
1}^% exchange note-Oct. 1,1972 i
5^A% note-Feb. 15, 1969 3
5%% note-Nov. 15,1974 3
__
'.
305" '"'9^608'
2, 509 .
,-]
2,236
5%% note-Feb. 15,1975 4
6H% note-May 15,1969 *
11^% exchange note-Apr. 1,1973 i
6% note-Aug. 15,1969 *
6% note-May 15,1975 *
Total notes
10,154
'.'""dysis"
_. . .
10,932
33 .
f
{:
464"
'.""2"om" ""i,"297"
21,523
26
9,913
2,509
33
10, 738
1,652
2 26 .
2,171
2,977
5,148
4,277
13
3,366
6,750
2,977
44,425
6, 750 .
8,993
BILLS « (MATURITY VALUE)
1967
1968
1968
1967
1968
Increase in 3-month bill offerings:
July through September
___
October through December .
January through March—
April through June
_
Total 3-month bill increase
Increase in 6-month bill offerings:
April through June
Increase in 1-year bUl offerings:
July through September..
October through December
January through March
April through June
Total 1-year biU increase
1967
July 11
July 11
Oct. 9
Oct. 9
1968
Jan.15
__.
__.
1,201
1,315
598
802
3, 916 .
3,916
1, 079 .
1,079
.
.
.
.
100
197
399
201
897 .
897
2, 003 .
2,001 .
2,003
2,001
1, 506 .
3, 006 .
1,506
3,006
100
197
399
201
...
Tax anticipation bill offerings:
4.861% 255-day, maturing Mar. 22,1968
4.898% 286-day, maturing Apr. 22, 1968—.
4.934% 196-day, maturing Apr. 22, 1968,
additional
5.108% 259-day, maturing June 24,1968
5.058% 161-day, maturing June 24, 1968,
additional
_
Total tax anticipation offerings
Total offerings—-
1,201 .
1, 315 .
598 802 .
2, 528 .
.
11,044 .
27,868 "2i,'523'"
2,528
11, 044
8,'993" """2,'977" 61, 301
1 Issued only on demand in exchange for 2H percent Treasury bonds. Investment Series B-1975-80.
2 Issued subsequent to June 30,1967.
3 A cash offering (all subscriptions subject to allotment) was made for the purpose of paying off the matured
securities in cash and to raise new money. Holders of the maturing issues were not offered preemptive rights
to exchange their holdings, but were permitted to present them in payment or exchange, in lieu of cash,
for the new securities offered. For further details, see exhibit 1.
^ In the February and May 1968 financings combinations of cash and exchange offerings were made to
refund maturing issues and raise new cash.
8 Treasury bills are sold on a discount basis with competitive bids for each issue. The average price for
auctioned issues gives an approximate yield on a bank discount basis as indicated for each series.
20
1,9 6 8 REPORT OF THE SECRETARY OF THE TREASURY
Disposition of marketable Treasury securities excluding regular bills, Hscal year 1968
[In millions of dollars]
Date of
refund- ing or
retirement
1967
Aug. 15
Aug. 15
Aug. 15
Oct. 1
Nov. 15
Nov. 15
1968
Feb. 15
Feb. 15
Feb. 15
Feb. 15
Feb. 15
Apr. 1
May 15
May 15
Description and maturity date
Issue date
BONDS, NOTES, AND CERTIFICATES
5H% certificate-Aug. 15,1967
3 ^ % note-Aug. 15,1967
4 ^ % note-Aug. 15,1967
11^% exchange note-Oct. 1,1967
4%% note-Nov. 15, 1967
3^^% bond-Nov. 15, 1967
Aug. 15,1966
Sept. 15,1962
Feb. 15,1966
Oct. 1,1962
May 15,1966
Mar. 15,1961
5'A% note-Feb. 15,1968
4^4% note-Aug. 15,1968
33/4% bond-Aug. 15, 1968
5j4% note-Nov. 15, 1968
3^^% bond-Nov. 15,1968
1 ^ % exchange note-Apr. 1,1968
4%% note-May 15,1968
37/i% bond-May 15,1968
Nov.
May
Apr.
Aug.
Sept.
Apr.
Feb.
June
5,610
2,094
1,904
457
8,135
2,019
989
14,621 . .
1,674
1 420 . .
582
11,322 _.
457 _.
1,101
17,034 . .
1,326
1 692 _.
15,1966
15,1967
18,1962
15,1967
15,1963
1,1963
15,1967
23,1960
Total coupon securities
1968
Mar. 22
Apr. 22
Apr. 22
June 24
June 24
ReExchanged for
deemed
new issue
for cash •
Total
or carIn
ried to At ma- advance
marefundturity
tured
ing
debt
Securities
464
2,171 . .
507
1,107
929
433
212
540
761
.
8,106
•5,047 . .
1,699 - .
23,006
2,976
2,635
507
1,107
929
433
212
5,587
2,460
34,089
BILLS
4.861% (tax anticipation)
4.898% (tax anticipation)
4.934% (tax anticipation)
5.108% (tax anticipation)
5.058% (tax anticipation)
July 11,1967
July 11,1967
Oct. 9,1967
Oct. 9,1967
Jan. 15,1968
2 2 003
2 2 001
2 1 , 506 .,
2 3,006 .
2 2,528
Total bills.
11,044
11 044
Total securities-
19,150
2,003
2,001
1,506
3,006
2,528
11,044
23,006
2,976
45,133
1 Holders of the maturing issues were not offered preemptive rights to exchange their holdings, but were
permitted to present them in payment or exchange, in lieu of cash, for the new securities offered.
2 Including tax anticipation issues redeemed for taxes in the amounts of $884 million in March 1968, $1,288
million in April 1968, and $2,113 million in June 1968.
The exhibits on public debt operations provide further information
on public offerings and allotments by issues in tajbles and representative circulars. For details on participation certificate sales, retirements,
and those outstanding see the Statistical Appendix.
OWNERSHIP OF FEDERAL SECURITIES
In consonance with the unified budget concept,^ the definition of
Federal securities includes both public debt issues and the issues of
Federal agencies having an element of Federal ownership. In addition to direct Treasury debt, this includes the issues of the Federal
Housing Administration, Federal National Mortgage Association,
banks for cooperatives. Federal intermediate credit banks, and Tennessee Valley Authority. Also included are the participation certificates of the Federal National Mortgage Association and the Export1 See pages 8-10.
21
REVIEW^ OF FISCAL OPERATIONS
Import Bank, and defense family housing mortgages. Excluded are
the Federal land banks and Federal home loan banks, both of which
are entirely under private ownership, and the municipal Government
of the District of Columbia.
From an ownership point. Federal securities held by the Federal
home loan banks, the Federal land banks, the municipal Government
of the District of Columbia, and various deposit accounts for moneys
held by the Government for others are now included in the private
nonbank ownership category.
At the end of fiscal 1968 public d^bt outstanding (direct issues of the
Treasury) was $347.6 billion, an increase of $21.4 billion over the
previous yearend. Agency issues outstanding totaled $24.4 billion, an
increase of $6.0 billion over the previous year. The increase in public
debt securities was nearly three and one-half times the increase in
fiscal 1967 and the increase in agency securities was $0.9 billion higher
than the increase in the previous year. Federal Eeserve banks and
Government accounts aJbsorbed $10.9 billion of the total increase in
Federal securities and private investors acquired the remaining $16.4
billion.
At the end of the year over one-third of the total Federal securities,
or $131.4 billion, was held by Govemment accounts and Federal Eeserve banks; slightly over one-sixth, or $66.3 billion, was held by
commercial banks; and just under one-half, or $174.3 billion was held
by private nonbank investors.
CHART 6
OWKSRSHIP o r f^BERAl S^CUftlTIES. 4UI\I£ 30, W U
m}
f^
Gov't
Accounts
^ Federal
Reserve
m
Com 7 ^ ^
Banks
r'
Private
Nonbank Investors
W n . l i ' ^ Individuals
}mt
Savings^mi"i%
instit.
. Corps
mm^"'^''
All O t h e r ^ ^ i i ^ M
318-223—69-
22
1\9 6 8 REPORT OF T H E SECRETARY OF T H E TREASURY
Ownership of public debt securities on selected dates, 1958-68
[Dollar a m o u n t s in billions]
Change
duriug
fiscal
year
1968
J u n e 30, J u n e 30, J u n e 30, J u n e 30,
1958
1966
1967
1968
\
Estimated ownership b y : ,
P r i v a t e n o n b a n k investors:
Individuals: ^
Series E a n d H savings b o n d s
U . S . savings notes 2
O t h e r securities.
Total individuals
I n s u r a n c e companies
M u t u a l savings b a n k s .
Savings a n d loan associations
S t a t e a n d local g o v e r n m e n t s
Foreign a n d i n t e r n a t i o n a l
Corporations..
Miscellaneous investors 3
$42.1
$49.2
22.3
23.9
$50.4
(*)
20.6
$51.1
.2
22.9
.2
2.3
64.4
12.2
7.4
3.3
16.3
6.5
14.1
73.1
9.6
5.0
7.3
24.5
15.4
14.2
70.9
8.6
4.0
7.9
24.9
14.7
11.1
74.2
8.1
3.9
9.8
26.6
12.9
13.0
3.3
-.6
— .2
1.'9
1.7
-1.8
2.8
9.5
9.9
10.8
.8
132. 5
65.2
25.4
53.2
158.6
54.8
42.2
64.4
152.2
55.5
46.7
71.8
159.4
59.8
52.2
76.2
7.2
4.3
5.5
4.3
276. 3
319.9
326.2
347.6
21.4
8.2
T o t a l p r i v a t e n o n b a n k investors
Commercial banks
F e d e r a l Reserve b a n k s . .
Government accounts.
T o t a l gross d e b t o u t s t a n d i n g .
Percent
Percent owned b y :
Individuals
O t h e r p r i v a t e n o n b a n k investors
Commercial banks
F e d e r a l Reserve banks-L
Government accounts.......
T o t a l gross d e b t o u t s t a n d i n g
.
23
25
24
9
19
23
27
17
13
20
22
25
17
14
22
21
25
17
15
22
.
.
.
.
.
100
100
100
100 .
» I n c l u d i n g p a r t n e r s h i p s a n d personal t r u s t accounts.
*Less t h a n $50 million.
2 U . S . savings notes first offered in M a y 1967.
8 I n c l u d e s nonprofit i n s t i t u t i o n s , corporate pension t r u s t funds, n o n b a n k G o v e r n m e n t security dealers,
a n d F e d e r a l oriented agencies n o t i n c l u d e d in G o v e r n m e n t a c c o u n t s .
N O T E . — F i g m - e s b a s e d on n e w b u d g e t concepts; therefore certain figures for 1966 a n d 1907 m a y differ from
those p u b l i s h e d i n t h e 1967 a n n u a l r e p o r t , page 25.
Individuals.—Public debt securities held by individuals increased
$3.3 billion during fiscal 1968 from $70.9 billion in June 1967 to $74.2
billion in June 1968. Two-thirds of the increase was in marketable
securities; savings bonds and U.S. savings notes accounted for the
remaining one-third. On June 30, 1968, individuals continued to hold
more of the public debt than any other private investor category. Individual holdings of Federal agency issues increased by $1.2 billion to
a level of $4.0 billion. This increase was second only to that of State
and local governments and accounted for more than one-fifth of the
total increase in agency issues.
Insurance companies.—Holdings of public debt securities by insurance companies declined $0.6 billion during the fiscal year. Life companies reduced their holdings $0.2 billion to a new postwar low of
$4.1 billion. Fire, casualty and niarine companies liquidated $0.3 billion to reduce their portfolios to $4.0 billion. Although life insurance
REVIEW OF FISCAL OPERATIONS
23
companies hold a large proportion of their portfolios in long term
securities, the average niaturity of their marketable Treasuries declined by 16 months from the previous yearend to a level of 18 years.
The average maturity of the marketable Treasuries held by fire, casualty and marine companies fell 9 months from a level of 7 years at the
end of fiscal 1967 to 6 years 3 months at the end of fiscal 1968. Holdings
of agency securities by insurance companies increased $0.2 billion durin the year.
Mutual savings banhs.—Public debt securities held by mutual savings banks also continued to decline during fiscal 1968, falling $0.2
billion to a new postwar low of $3.9 billion. I n contrast to fiscal 1967,
when the structure of the mutual savings bank portfolio of Treasury
securities remained relatively stable, the average length declined by 18
months to 8 years 5 months. Mutual savings bank holdings of Federal
agency securities increased $0.3 billion to $1.3 billion.
Savings and loan associations.—In fiscal 1968 savings and loan associations acquired $1.9 billion of public debt securities. I n contrast to
mutual savings banks and insurance companies, savings and loans have
increased their holdings continuously in recent years from a level of
$2.0 billion at the end of fiscal 1954 to $9.8 billion in fiscal 1968. The
average length of this industry's holdings of marketable public debt
securities was 5 years 10 months on June 30,1968, a reduction of 1 year
and 3 months in the fiscal year. Savings and loan holdings of Federal
agency issues increased $0.6 billon to a level of $0.9 billion on June 30,
1968.
State and local governments.—State and local governments held
$26.6 billion public debt securities on June 30, 1968, an increase of
$1.7 billion for the fiscal year. Holdings of State and municipal pension funds increased by $0.2 billion and holdings by general funds rose
$1.5 billion. Pension funds have about 80 percent of their public debt
investments in long term issues and the average maturity of their total
holdings was nearly 19 years at the end of fiscal 1968. The investments
for general purpose funds of States and municipalities, however, are
in relatively short maturities, generally concentrated in Treasury bills.
State and local holdings of agency securities increased by $1.3
billion to a June 30,1968, level of $4.8 billion.
Foreign and international.—In fiscal year 1968 foreign holdings of
public debt securities declined by $0.6 billion to a yearend level of
$9.5 billion.
Special nonmarketable securities issued directly to foreign monetary
authorities increased $2.2 billion but this was offset by a $2.8 billion
drop in holdings of marketaible issues. Major changes during the year
by individual countries were liquidations of $0.4 billion by both Great
24
1(9 68 REPORT OF THE SECRETARY OF THE TREASURY
Britain and Italy while Canadian holdings incre'ased $0.4 billion. On
June 30, foreign investors held $3.8 billion of nonmarketable securities
and $5.7 billion of miarketable issues.
Holdings by international and regional institutions fell $1.2 billion
to a level of $3.4 biUion on Jmie 30,1968.
The decrease in holdings was accounted for by a $1.1 billion drop
in special noninterest-bearing notes issued to the International Monetary F u n d with substitution of letters of credit for $0.6 billion of this
amoimt, and a net decline of $0.1 billion in marketable securities held
by international and regional institutions. Holdings on June 30
amounted to $2.2 billion of noninterest-bearing special notes and $1.2
billion of marketable securities.
I n fiscal 1968, the foreign and international investor group continued to acquire Federal agency securities and added $0.2 billion to
their holdings of these securities, reaching la level of $0.8 billion on
June 30,1968.
Nonfinancial corporations,—Holdings of public debt securities by
nonfinancial corporations increased $2.0 billion to a level of $13.0 billion at the end of fiscal year 1968. By contrast, in fiscal 1967 corporate
holdings declined $3.2 billion, and in fiscal 1966 $1.0 billion. Holdings
are concentrated in the short term issues with an average length of
about one year.
Corporations increased their holdings of Federal agency securities
by $0.5 billion in fiscal 1968 and now hold a total of $1.1 billion.
Commercial banks.—In fiscal 1968, conimercial banks added substantially to their holdings of public debt securities accounting for more
than one-third of tlie $11.6 billion increase in the hands of investors
excluding the Federal Eeserve System 'and Govemment accounts. This
increase in bank holdings was nearly seven tinies as great as the increase in fiscal 1967, and raised their holdings to a level of $59.8 billion
on June 30,1968. The larger reserve city banks increased their holdings
of Governments by $0.8 billion while the smaller banks had net 'acquisitions of $3.5 billion.
The average length of commercial bank holdings of marketable
Treasuries declined slightly to a level of 3 years. Federal agency securities held by commercial banks rose $1.1 billion in fiscal 1968 to a level
of $6.5 billion.
Other private nonbank investors,—This group of investors increased
their holdings of public ddbt securities $0.8 billion in fiscal 1968 to a
level of $10.8 billion. Major changes were an increase of $1.8 billion
in the hands of miscellaneous investors including dealers and a liquidation of $1.0 billion by the Federal home loan banks. Holdings of
Federal agencies issues rose $0.4 billion.
REVIEW OF FISCAL OPERATIONS
25
Federal Reserve System.—During fiscal year 1968 the Federal Eeserve System absorbed a net $5.5 billion of public defbt securities as the
System continued to provide for growth in member bank reserves and
to offset reserve drains caused by sales of gold. Net acquisitions of
Government securities this year were $1.0 billion larger than in fiscal
1967. Holdings of Treasury bills increased $4.3 billion and coupon
securities rose by $1.2 billion. On June 30, 1968, holdings of Governments in the System Open Market Account amounted to $52.2 billion
with an average maturity of nearly 20 months.
Government accounts.—Public debt securities held by Government
accounts increased $4.3 billion in fiscal 1968. Special issues held by
these accounts rose $3.3 billion and holdings of marketable securities
increased by $1.0 billion. Major acquisitions occurred in the accounts
of the Federal old age and survivors insurance trust fund—$1.3 billion;
the unemployment trust fund—$1.0 billion; the civil service retirement fund—$0.6 billion; and the Federal disability insurance trust
fund—$0.5 billion.
At the end of fiscal 1968 Govemment accounts held $76.2 billion of
public deibt securities. About 80 percent or $59.4 billion of the total
was accounted for by special issues. The remaining 20 percent included $2.1 billion of nonmarketable Investment Series B bonds and
$14.7 billion of other issues, primarily intermediate and longer term
marketable securities.
Holdings of Federal agency securities in Government accounts increased $1.0 billion to a level of $3.0 billion on June 30,1968.
Taxation Developments
The major tax development in fiscal year 1968 was the Eevenue and
Expenditure Control Act of 1968 (Public Law 90-364) which was approved by President Johnson on June 28, 1968, almost 18 months
after the President's initial request for a temporary tax increase. This
measure not only increased taxes but also required reduction in Federal spending and employment and amended the Social Security Act.
President's recommendations
The President in his state of the Union message of January 10,
1967, recommended a three-point tax program to increase revenues to
meet the continuing and rising Vietnam obligations and increasing
domestic needs: a 6-percent temporary surcharge on corporate and
individual income tax liabilities, a speedup of corporate income tax
collections, and postponement of reduction of automobile and telephone excises beyond the dates specified in the Tax Adjustment Act
of 1966. The surcharge was to become effective October 1, 1967, for
26
1'9 6.8 REPORT OF THE SECRETARY OF THE TREASURY
individuals and July 1, 1967, for corporations, and was to remain in
effect until June 30,1969, or continue so long as the unusual expenditures associated with Vietnam require higher revenues.
When revised budget estimates at midyear indicated a substantial
increase in the prospective budget deficit to be likely, the President
in his message of August 3, 1967, to the Congress requested that the
surcharge be raised from 6 to 10 percent. The President urged the
Congress to make every effort not to exceed the January budget estimates of expenditures and pledged the executive branch to take every
proper action within its power to reduce expenditures. H e pointed
out, however, that reductions in spending would not be easy for the
budget submitted in January was already lean and outlays over which
the President has discretion were limited. This overall fiscal program
was urged by the President as a method of reducing the prospective
deficit.
On August 14,1967, in his statement before the Committee on Ways
and Means, Secretary Fowler presented the detailed recommendations for the tax increase program and stressed five reasons why the
tax increase was needed: (1) to meet the special cost of Vietnam;
(2) to hold down the deficit; (3) to avoid excessively high interest
rates and tight money; (4) to protect healthy economic growth
and price stability; and (5) to protect our balance of payments. (See
exhibit 20.) H e explained that the surcharge form of tax increase
was chosen as the inost appropriate form for a teniporary tax increase
because it "is simple to administer and easy for the taxpayer to understand. I t is relatively prompt and predictable in its impact. I t causes
minimal disturbances to the existing pattern of relationships among
taxpayers, and this seems fair and sensible for a moderate, temporary, emergency increase."
On October 3, 1967, the Ways and Means Committee adopted a
resolution temporarily laying aside the Administration's surcharge
proposal until such time as the President and the Congress could
reach an understanding on a means of implementing more effective
expenditure reduction and controls as an essential corollary to further
consideration of the tax increase.
I n his reply of November 22,1967, to a letter he had received from
Senator Williams of the Senate Finance Committee concerning the
tax surcharge. Secretary Fowler indicated that a plan had been prepared which combined the President's tax proposals with a statutory
provision embodying a program of realistic expenditure reductions.
(See exhibit 22.) The Secretary stated that he had requested Chairman Mills to convene the,Ways and Means Committee on Novem-
REVIEW OP FISCAL OPERATIONS
27
ber 29 to consider this plan. On November 29, the Secretary presented
the plan to the Ways and Means Comniittee. (See exhibit 23.)
On February 20, 1968, Chairman Mills of the Committee on Ways
and Means and Eepreseiitative Byrnes introduced H.E. 15414 which
contained two parts of the President's tax recommendations: Extension of the excise taxes on automobiles and telephone service
beyond April 1, 1968, and acceleration of corporate income tax payments. The bill was reported by the Committee on February 23 with
some minor modifications and approved by the House on February 29,
1968.
I n Senate Finance Committee hearings on H.E. 15414 on March 12,
1968, Secretary Fowler emphasized that the Administration was still
strongly in favor of the full tax program which would include in
addition to the extension of the excise taxes on automobiles and telephone service a teniporary 10-percent income tax surcharge. (See
exhibit 24.)
The Senate Finance Committee re^Dorted the bill on Marcli 15,1968,
with several amendnients, but did not include the 10-percent surcharge. The bill was considered by the Senate on March 22, 25-28, and
April 1 and 2, 1968, and as passed on April 2, 1968, included the 10percent surcharge, which had been added as an amendment during
Senate consideration, together with measures involving expenditure
control.
The bill was sent to conference on April 3. The President in a letter
of May 4 to the Speaker of the House (H. Doc. 305, 90th Cong.,
second sess.) urged immediate action by the Congress on the tax
surcharge. The House agreed to the conference report on June 20
and the Senate on June 21. The bill was signed by the President on
June 28,1968 (Public Law 90-364).
Revenue and Expenditure Control Act of 1968
TITLE I—INTERNAL REVENUE CODE AMENDMENTS
Tax surcharge for individuals and corporations.—-A temporary 10percent surcharge on individual and corporation income taxes was
provided. For individuals, the surcharge was to be effective from
April 1, 1968, and for corporations from. January 1, 1968. I n both
cases the surcharge was to expire June 30, 1969. These effective dates
meant for individuals a 7%-percent surcharge for calendar year 1968,
and a 5-percent surcharge for calendar year 1969; and for corporations a 10-perceiit surcharge for calendar year 1968 and a 5-percent
surcharge for calendar year 1969. The withholding rate was increased
10 percent on wages paid on or after July 15,1968.
Individuals in the two lowest inconie brackets were exenipt from the
28
1(9 6,8 REPORT OF THE SECRETARY OF THE TREASURY
surcharge. This exemption excluded from the surcharge, in ternis of
specific tax liabilities, single returns having a tax of $145 or less (the
tax on taxable income of $1,000), joint returns having a tax of $290
or less (the tax on taxable income of $2,000), and head-of-hoiusehold
returns having a tax of $220 or less (the tax on taxable income of
$1,500). To take care of the notch problem a special provision applied
to individual taxpayers whose tax (without regard to the surcharge)
was just above the amount of the exemption. They were not required
to pay the surcharge at the full annual rate of 10 percent. The tax
increase could not be greater than an amount equal toi twice the tax
which wiould result if the surcharge were imposed on the amount of
tax above the exemption level. The effect of this proivision was to phase
the surcharge in gradually until it reached the full 10-perceiit annual
rate on middle- and high-income taxpayers.
Acceleration of corporation payments of estimated tax.—^Tlie act
provided a phased reduction in the exemption from current payment
of estimated income tax and an increase in the percentage of estimated
tax which must be paid by corporations which, by 1977, will place
corporations on the same taxpaying basis 'as individual taxpayers.
The Eevenue Act of 1964 and Tax Adjustment Act of 1966 previously
included provisions which had the effect of requiring corporations to
pay in four quarterly payments 70 percent of their estimated tax in
excess oif $100,000 during the current tax year, acliieving this condition by January 1,1968. However, as compared with individual taxpayers who are required to pay currently 80 percent oif their estimated
tax (in excess of $40), corporations with estimated tax liabilities less
than $100,000 still could defer payment of tax until the middle of the
third and sixth months after the close of the taxable year (nearly 15
to 18 months after, the beginning of the taxable year) without penalty,
and those' with tax liabilities in excess of $100,000 were required to
piay only 70 percent lof the excess currently. I n order to equalize tax
payment requirements of corporations and individual taxpayers, the
President recommended a phased elimination of tlie $100,000 exemption from estimated tax and an increase in the percentage from 70 to
80 per,cent to be paid currently by corporations if they were to avoid
penalties for under^payment. Moreover, the President urged accomplishment of this equalization as part of the surcharge and excise tax
extension legislation in order to gain the beneficial effect oif an increase
in tax revenues to further reduce the budget deficit.
Although the President recommended elimination of the exemption
over a 5-year period, the Eevenue and Expenditure Control Act of
1968 provided that this be accomplished in 10 years, according to the
following schedule.
REVIEW OF FISCAL OPERATIONS
29
Transitional exemptions from current payment of estimated income tax for
corporations, 1968 to 1977 and later years
FIRST 5-YEAR PERIOD
Year
1968.
1969.1970.1971
1972-
Exclusion
percentage
80
60
40
20
'....
Exclusion
base i
Transitional
exemption 2
$94,500
94,500
94,500
94,500
$75,600
56,700
37,800
18,900
5,500
SECOND 5-YEAR PERIOD
Applicable
percentage
1973
1974—
1975
1976...
-
-
80
60
40
20
Exclusion
base
Temporary
estimated
tax
exemption 2
$5,500
5,500
5,500
5,500
1977 and later years
$4,400
3,300
2,200
1,100
0
1 $100,000 less $5,600 in first 5-year period.
2 Payment of estimated tax required only if estimated tax exceeds exemptions by $40'or raore.
I n effect, during the first 5 years, corporations with estimated tax
liabilities less than $100,000 determine the amount of their exemption
from current payment by subtracting $5,500 from their estimated
tax and then multiplying the remainder by the percentage corresponding to the tax year; corporations with estimated tax liabilities' of
$100,000 or more may exempt the amounts indicated in the sdhedule
from current payment b ysubtracting $5,500 from their estimated
corporations may exempt the scheduled amounts from current payment. A t no time will corporations with $40 or less of estimated tax be
required to make quarterly payments currently; this equates the tax
position of the corporation with that of the individual.
The act also raised to 80 ^percent the percentage of estimated tax
(in excess of the exemption) which corporations must pay currently
to avoid payment of an additional tax amounting tO' 6 percent per
annum on the .amount of underp-ayment each quarter. I t repealed the
requirement that a corporation file a declaration of estimated tax
when making its quarterly payment since the initiation of tax collection through depositary banks in 1967 made the filing of declarations
unnecessary.
Continuation of excise taxes,—The 10-percent tax on telephone
service and the 7-percent tax on passenger automobiles which had been
scheduled to decline to 1 and 2 percent, respectively, on April 1,1968,
were continued through December 31, 1969, with reductions to take
place on January 1, 1970, 1971, and 1972, ^and both to be repealed on
30
1,9 68 REPORT OF THE SECRETARY OF THE TREASURY
January 1,1973. (A joint congressional resolution, Public Law 90-258,
approved April 13, 1968, had extended the existing rates through
April 30, 1968. Before the end of April the Internal Eevenue Service
suggested to automobile manufacturers and telephone companies that
in planning for the period followiag April 30, they take into iaccount
the pending tax bill then in the conference comniittee whicii provided
for contmuation of the excises at existing rates until January 1,1970.)
Revenue effect.—The estimated revenue increase from the surdiarge,
the speedup of corporate tax payments, and the excise tax extensions
for fiscal years 1968 and 1969, and for the surcharge a full-year liaibility at 1968 income levels is indicated in the following table.
Estimated revenue increases from tax provisions of the Revenue and Expenditure
control Act of 1968
[In billions]
Fiscal year
1968
Excise taxes, extension of present rates:
Automobiles
Telephone service
1969
$0.2
.1
$L 5
1.2
.3
.0
2.7
1.0
.0
.0
7.8
3.8
Total surcharge
.0
11.6
Total revenue iucrease
.3
15.2
Total excise extension.
Corporations estimated tax payments •
Surcharge :i
Individuals..
Corporatioris
1 Assumes enactment ofthis bill too late for Treasury receipts to reflect much, if any, increase in the case
of the individual or corporate income tax payments in the fiscal year 1968.
ADDENDUM'.—The surcharge would provide a full year liability at 1968 income levels, as follows:
In billions
Individuals
1...
$6.8
Corporations
3.4
Total
10.2
Industrial development bonds,—The 1968 act also provided that
interest on industrial development bond issues of more than $1 million,
issued after April 30,1968, would be subject to tax.^ A bond is classed
as an industrial development bond if (1) it is a part of a bond issue all
or a major part of the proceeds of which are to be used, directly or
indirectly, in any trade or business of a person other than an exempt
person, and (2) it is in whole or in inajor part either (a) secured by
an interest in property used in a trade or business, or in payments made
in respect of such property, or (b) derived from payments in respect
of property or borrowed nioney used (or to be used) in a trade or
business.
1 Under an amendment to Public Law 90-634, a $5 million exemption may be elected,
provided the entire cost of the project does not exceed $5 million.
REVIEW OF FISCAL OPERATIONS
31
111 addition to the exeniption for bond issues of $1 million or less, the
act exempted bonds issued by a governmental unit to provide the
following facilities: (1) residential real property; (2) sports facilities; (3) facilities for a convention or trade show; (4) airports, docks,
wharves, mass commuting facilities, parking facilities, or facilities for
storage or training directly related to any ofthe foregoing; (5) sewage
or solid waste disposal facilities, facilities for the local furnishing of
electric energy, gas, or water; and (6) air or water pollution control
facilities. A special exemption also was provided for interest on a bond
issued as part of an issue substantially all the proceeds of which are to
be used for the acquisition or development of land as the site for an
industrial park.
Other tax provisions.—Other tax provisions of the act were: Extension of tax-exempt status to certain hospital service organizations, a
provision regarding timely mailing of tax deposits, and allowance of a
deduction for expenses for advertising in a program of a political convention held to nominate candidates for President and Vice President.
(A substantially identical provision regarding advertising in a convention program had been enacted by Public Law 90-346, approved June
18, 1968.)
The act also provided that the President was to submit to Congress,
no later than December 31, 1968, proposals for a comjirehensive reform of the Internal Eevenue Code of 1954.
T I T L E I I — E X P E N D I T U R E AND RELATED CONTROLS
111 addition to the tax measures, the Eevenue and Expenditure Control Act of 1968 required a $6 billion reduction in Federal spending
• during fiscal year 1968 and an accompanying reduction in Federal
employment, with certain agencies and programs exempt from these
limitations. I t also required a reduction of $10 billion in proposed new
obligational authority shown in the budget for fiscal year 1969 and
specific reconimendations by the President in the budget message for
fiscal year 1970 for rescinding $8 billion of carryover obligational
authority.
T I T L E I I I — S O C I A L SECURITY A M E N D M E N T S
The Eevenue and Expenditure Control Act of 1968 also amended
certain provisions of the Social Security Act relating to the program
of aid to dependent children and Federal matching funds for medical
assistance (medicaid).
The tax provisions of the Social Security Act had been revised
earlier in the fiscal year by the Social Security Amendnients of 1967,
approved January 3,1968.
32
li9 6.8 REPORT OF THE SECRETARY OF THE TREASURY
Social Security Amendments of 1967
In his aid for the aged message of January 23, 1967, the President
recommended major revisions of the Social Security Act. (For a
description of these recommendations, see the 1967 annual report,
page 33.)
H.E. 5710, introduced on February 20,1967, incorporated the President's recommendations. They were reformulated in H.E. 12080 which
was reported by the Ways and Means Committee on August 7, 1967.
As finally approved on January 2,1968, the Social Security Amendments of 1967 (Public Law 90-248) provided an increase in benefit
payments of 13 percent for all beneficiaries. The amount of earnings
subject to tax and creditable toward benefits was increased from $6,600
to $7,800, effective January 1, 1968. The amount of annual earnings a
beneficiary under age 72 can receive without having his benefits reduced was increased from $1,500 to $1,680. For eamings between $1,680
and $2,880, $1 of benefits is withheld for each $2 of earnings, and for
earnings above $2,880, $1 of benefits is withheld for each $1 of
earnings.
The new schedules of tax rates for financing social security and hospital insurance programs are shown in the following table.
Tax rates provided by the Social Security Amendments of 1967
[In percent]
EMPLOYER-EMPLOYEE, EACH
Period
1968
1969-70
1971-72
1973-75
1976-79
1980-86
1987 and after
OASDI
Health
insurance
3.8
4.2
4.6
5.0
5.0
5.0
5.0
0.6
.6
.6
.65
.7
.8
.9
44
4.8
52
5.65
57
5.8
59
5.8
6.3
6.9
7.0
7.0
7.0
7.0
0.6
.6
.6
.65
.7
.8
.9
64
6.9
7.5
7 65
7.7
78
7.9
Total
SELF-EMPLOYED
1968
1969-70—
1971-72
1973-75
1976-79
1980-86
1987 and after
Excise taxes
Travel tax.—In his statement of January 1,1968, on the balance of
payments which outlined a program of action to reduce the balance-ofpayments deficit, the President stated the objective of reducing the
foreign travel deficit by $500 million.^ On February 5, the Secretary
1 See exhibit 12.
REVIEW OF FISCAL OPERATIONS
33
in a statement before the Ways and Means Committee recommended
a program of travel taxation and customs changes.^ The tax proposals
were: (1) a permanent extension to foreign air travel of the 5-percent
tax on domestic air travel; (2) a temporary 5-percent tax on travel by
water between the United States and points outside the Western
Hemisphere; and (3) a temporary tax on expenditures for travel outside the Western Hemisphere, exclusive of transportation to and
from the United States. The expenditure tax rates suggested were 15
percent for expenditures of $7.01 to $15 a day per person and 30
percent on the excess over $15. The customs proposals would have
(1) lowered to $10 the duty-free exemption for residents returning
to the United States from countries other than Canada, Mexico, and
the Caribbean area; and (2) imposed a flat rate of duty on articles
brought or mailed into the country by travelers within certain monetary limits.
H . E . 16241, as passed by the House, April 4,1968, included only the
air ticket tax and customs recommendations, with some modifications.
I n Senate Finance Committee hearings on the bill on June 25, the
Secretary ^ suggested certain modifications in his recommendations
of February 5, the most important of which would have limited the
tax on expenditures abroad to expenditures in excess of $15 a day (at
the previously suggested 30-percent rate). No further action was
taken by the Finance Committee on the recommendations.
Transportation user charges,—The President in his January 1968
budget message repeated prior suggestions for new and increased user
charges for programs in which the services provided by the Federal
Government yield direct benefits to specific individuals and businesses,
notably in connection with Federal aid to highways and Federal expenditures for the airways and waterways systems. No action was
taken by the Congress on these recommendations.
Other excise legislation.—Public Law 90-240, approved January 2,
1968, revised the method of computing the retail price of a cigar for
purposes of determining the Federal tax in cases where a State or local
tax was imposed on cigars.
Public Law 90-351, the Omnibus Crime Control and Safe Streets Act
of 1968, approved June 19,1968, repealed the Federal Firearms Act and
substituted a new set of firearms control provisions. The new law
raised the annual fees required of manufacturers, importers, and dealers
in firearms and ammunition and gave the Department of the Treasury
responsibility for administration and enforcement of titles I V and V I I
of the act which relate to possession, sale, transportation, and im1 See exhibit 37.
2 See exhibit 25.
34
li9 6 8 REPORT OF THE SECRETARY OF THE TREASURY
portation of firearms. The Secretary has delegated this responsibility
to the Internal Eevenue Service (Alcohol and Tobacco Division).
Other legislation
Public Law 90-225, signed by the President on December 27, 1967,
amended a variety of tax law provisions:
(1) Provisions of the existing law that accorded tax-free status to
distributions of assets to their shareholders by corporations classified
as bank holding companies under the Bank HLolding Company Act of
1956 and thus required to divest themselves of either their banking or
nonbanking interests were extended to other corporations which had
been subsequently brought within the scope of the Bank Holding Company Act by the 1966 amendments to that act.
(2) Existing law regarding the carryback of unused investment
credits was amended to permit the full 3-year carryback of credits not
used during a tax year by a taxpayer by reason of his having incurred
a subsequent net operating loss.
(3) The tax treatment of distributions of stock of a controlled corporation by a life insurance company to its parent company was altered.
Such distributions ,wliicli under existing law would have resulted in an
increase in the taxable income of the distributing life insurance company, will not be regarded as taxable income if (a) both the distributing corporation and the controlled company are controlled by the
same corporation to which the distribution was made, and (b) the
controlled corporation is a life insurance company of which the distributing corporation has been in control at all times since December
31,1957.
1
Public Law 90-240 included a provision significantly altering the
tax treatment of mortgage guaranty insurance companies. Such companies, which engage in the business of guaranteeing holders of real
estate mortgages against loss, are customarily required by State regulatory agencies to make large annual contributions to reserves for
contingency losses from their premium incomes and to maintain those
reserves for periods frequently exceeding the actual duration of mortgages guaranteed. Under provisions of Public Law 90-240, mortgage
guaranty insurance companies will be permitted to take as deductions
in determining taxable income up to 50 percent of annual premiums
earned, provided that noninterest-bearing Federal bonds equivalent
to the amount of the deduction are purchased. In subsequent years,
when aniounts in i contingency reserves are returned to income, the
bonds may be used to pay taxes or redeemed for cash.
REVIEW OF FISCAL OPERATIONS
35
Administration, interpretation, and clarification of tax laws
During the fiscal year 1968, the Treasury Department issued 28 final
regulations, three temporary regulations, five Executive orders, and 22
notices of proposed rulemaking, relating to matters other than alcohol
and tobacco taxes. In addition, the Department issued six final regulations and seven notices of proposed rulemaking on alcohol and tobacco
tax matters.
Among the subjects dealt with in Treasury decisions published during the fiscal year were the allocation of income and deductions among
related businesses, the treatment of income from an unrelated trade or
business activity of an exempt organization, interest paid on indebtedness incurred or continued to purchase or carry tax-exempt bonds,
transfers of property to investment companies controlled by the transferors, nonresident aliens and foreign corporations engaged in business
in the United States, recapture of the investment credit on early disposition of property, and the allocation of Federal income tax liability
among members of an affiliated group filing a consolidated return, for
the purpose of determining their respective earnings and profits.
Notices of proposed rulemaking still pending at the year's end included those relating to the allocation of cost of investment units, social
security and withholding taxes on tips, the computation of percentage
depletion, the so-called cutoff point for percentage depletion, the deduction for dividends received from an affiliated corporation, interest on
certain negotiable certificates of deposit, indirect contributions to
political parties, and the allocation of service income and deductions
among related businesses.
"Tax expenditures"
During fiscal year 1968 there was much public discussion of use of
tax incentives to achieve various desirable social and economic objectives. The present Federal tax structure contains a large number of
special deductions, credits, exclusions, and exemptions for social and
economic purposes. Each of these special tax provisions reduces Government revenues available for other purposes, much as do increases in
direct Government expenditures. In most cases, direct expenditures or
loan programs could be utilized as alternatives for achieving the same
purpose that the special tax provisions are designed to accomplish.
Our Federal budget as presently constituted, however, does not report
those tax revenues which the Government does not collect because
income subject to tax is reduced by these special provisions. The budget
in its present form thus understates the role of Federal Government
financial influences on the behavior of individuals and businesses and
on income distribution.
36
li9 68 REPORT OF THE SECRETARY OF THE TREASURY
Treasury officials have suggested the need for a full accounting for
the effects of these tax benefit provisions which are expenditure equivalents. Exhibit 29 discusses "tax expenditures" and for the first time
presents an explicit accounting.
International tax matters
Legislation a/nd regulations,—The Interest Equalization Tax Extension Act of 1967 was signed by the President on July 31,1967. The act
is described on page 38 of the 1967 annual report.
I n April 1968 final regulations were issued under section 482 (allocation of income between related companies), covering most of the
areas dealt with in the proposed regulations issued in August 1966. One
section, dealing with the valuation of services was reserved and new
proposals on this subj ect were published.
Guidelines were developed and published under Internal Eevenue
Code sectioii 367. The section requires advance clearance by the Commissioner of Internal Eevenue for corporate reorganizations and other
adjustments involving foreign corporations. The guidelines set forth
the circumstances under which the Commissioner may grant such
clearances and will, thus, facilitate tax planning.
Tax treaties,—Income tax treaty negotiations were initiated with
Finland for the purpose of revising and updating the existing treaty.
Negotiations were held with Trinidad and Tobago to develop a comprehensive treaty to replace the abbreviated interim treaty which was
signed in 1966. A new income tax convention with France was signed
in July 1967 and Sent to the Senate for ratification. I t was ratified in
July 1968 and came into effect in August 1968.
Negotiations were held with Argentina on an income tax treaty, and
exploratory talks were conducted with Peru and Chile with a view
toward initiating formal income tax treaty negotiations in the near
future. Discussions on an income tax treaty with Portugal were continued during the year. Discussions were held with France to consider
the discriminatory aspects of the French treatment of dividends paid
to U.S. residents investing in France and to French residents investing
in the United States arising from the dividends received credit granted
by France.
I n July 1968, at the same time that the French treaty was ratified,
the Senate ratified the treaties with Brazil and the Philippines, both
with reservations. Tlie Senate reserved on the effective date of the
investment credit provision in the Brazil treaty and on the provision
allowing for the deduction of charitable contributions in the Brazil
treaty and the Philippine treaty.
Negotiations were begun on new estate tax treaties with Sweden
and the Netherlands, and agreement was reached to begin negotiations
REVIEW OF FISCAL OPERATIONS
37
on a new estate tax treaty with France during fiscal year 1969 and a
new income tax treaty with Japan.
Intemational organisations.—Treasury representatives participated
in the work of the Fiscal Committee of the Organization for Economic
Cooperation and Development ( O E C D ) . During the course of the year
the Committee established working parties to study changes in the
OECD's 1963 draft inconie tax convention. Discussions were held on
the problem of the allocation of profits between related companies, and
the Conimittee initiated the preparation of an analysis of the provisions
of inconie tax treaties between industrial countries and developing
countries.
Treasury representatives attended the second General Assembly of
the Inter-American Center of Tax Administrators in Buenos Aires,
Argentina, during May 1968. Various aspects of tax administration
and policy were discussed, such as the collection and use of information
for efficient tax management and administrative implications of a
common market.
A participating agreement with the Agency for International Development was signed in April 1968 under which the Treasury Department, during fiscal year 1968 and succeeding years, will conduct studies
of tax policy in Latin American countries to identify j)olicy problems
and make recommendations for structural reform that would promote
economic development, to assist, when requested, in implementing tax
reform, and to provide training services. The first study, of the Dominican Eepublic, was initiated in the spring of 1968.
I n t e r n a t i o n a l Financial Affairs
The U.S. balance of payments
As a result of the increased costs of the Vietnam war, increased
private capital outflows, and increased tourist expenditures, the U.S.
balance-of-payments deficit worsened in the second half of calendar
year 1967. I n the third quarter of the year the deficit, on a seasonally
adjusted liquidity basis, was $802 million. This represented an increase
of $280 million from the $522 million deficit registered in the second
quarter of calendar year 1967. F o r the first 9 months of 1967 the
liquidity deficit, seasonally adjusted, was $1,829 million as compared
to a deficit of $1,024 niillion for the corresponding period of 1966.
I n the fourth quarter of 1967 the deterioration in the U.S. balance
of payments that had started earlier in the year worsened sharply.
The fourth quarter liquidity deficit, after adjustments for seasonal
variations was $1,742 million, more than twice the seasonally adjusted
figure for the third quarter. F o r calendar year 1967 as a whole, the
liquidity deficit was $3,571 million, which was $2,214 million higher
than the liquidity deficit of $1,357 million in 1966.
318-223—69
5
38
li9 6 8 REPORT OF THE SECRETARY OF THE TREASURY
The fourth quarter balance measured on the official reserve transactions basis was adverse by $1,082 million, whicii was a $1,329 million
deterioration from the $247 million surj^lus of the third quarter. For
1967 as a whole, the balance of payments on the official reserve transactions basis was adverse by $3,405 million which represented a $3,671
million change from the $266 million surplus in 1966.
Against the background of the persistent deficit in the U.S. balance
of payments, the British devaluation of sterling in Noveniber 1967
resulted in a general weakening of confidence in currencies and a burst
of speculative gold buying. The U.S. gold reserve declined by $920
million in the fourth quarter of 1967. Although the gold speculation
was effectively counteracted with the cooperation of most of the members of the Gold Pool, it was quite clear that this speculative buying
presented a threat to the stability of the dollar and to the international
monetary system as a whole.
I n response to the occurrences in the latter part of 1967, President
Jolmson amioiiiioed on January 1, 1968, a comprehensive balance-ofpayments program aimed at substantially reducing the U.S. balanceof-payments deficit and reestablishing confidence in the international
monetary system! The Presidential statenient of January 1 reemphasized the need for congressional action on the anti-inflationary tax
proposal of the Administration and urged American business and
la;bor to take the steps necessary to maintain price and wage stability
in tlie United States in order to insure the competitiveness O'f our goods
in the world's markets. I n addition to the steps required to strengthen
the U.S. economy, the January 1968 balance-of-payments. program
contained a combination of temporary and long term measures designed to improve substantially the U.S. balance of paynients in 1968.
The temporary measures announced included:
(1) A mandatory prograni to limit U.S. direct investment abroad.
(2) A tightening of the Federial Eeserve Board program restraining foreign lending by banks and other financial institutions.
(3) A Presidential appeal to defer for 2 years all nonessential travel
outside the Western Hemisphere as well as a proposal for legislation
designed to reduce the U.S. travel deficit.
(4) A variety of steps designed to neutralize the foreign exchange
costs of maintaining our troops abroiad and nieasures designed tO' reduce the foreign exchange costs of the Government's overseas
operations.
I n addition, the January 1, 1968, balance-of-payments program
contained measures aimed at improving the long term strength of the
U.S. balance-of-payments position by:
(1) increasing exports by improving export financing via a $500
REVIEW OF FISCAL OPERATIONS
39
million export expansion facility, iniproved export insurance and
guarantees, and a liberalized discount facility;
(2) increasing the access of U.S. goods to foreign markets by reducing nontariff barriers; and
(3) continued progranis to encourage foreign investment and travel
in the United States.
The balianoe of payments in the first two quarters of 1968 showed
substantial improvement. The seasonally adjusted liquidity deficit
for the first quarter was $660 million conipared with the $1,742 million deficit in the fourth quarter of 1967, and the nearly $900 million
quarterly average in 1967. The seasonally adjusted balance for the
second quarter of 1968 showed further improvement, ending in a
deficit of about $170 million. Even greater progress was showii in the
balance of payments on the official reserve transactions basis. On this
measure the second quarter showed a surplus of $1,459 million seasonally adjusted, a large swing from the $535 million deficit for the
first quarter of 1968. F o r the 6-nioiitli period the official reserve transactions basis showed a surplus of $924 million compared with a deficit
in the first 6 months of 1967 of $2,570 million, and a deficit in the
second half of 1967 of $835 million.
Progress in the first half of 1968 occurred despite continued deterioration in the merchandise trade account. The unfavorable trend in the
trade balance was partially offset by reductions in private capital outflows as both bank lending to foreign borrowers and direct investment
capital outflows declined. Substantially increased foreign purchases
of U.S. securities, both private and Goverment, also contributed to
the favorable results in the first half of 1968.
Foreign exchange operations^
The international monetary system experienced intense and often
prolonged pressures during the fiscal year and the cooperative arrangements which had been built up over a nuniber of years by the major
industrial countries were put to a severe but quite successful test. Early
in the period financial markets were uneasy following the Middle East
crisis, although official operations had successfully contained the effects
of the floAvs of funds. Meanwhile, long-range plans for strengthening
the international monetary systeni by the creation of Special Drawing
Eights in the I M F were being successfully negotiated. More immediately, however, pressure on sterling became progressively more intense,
reaching a climax in November, and resulted in the devaluation of sterling on November 18,1967.
^ Detailed reports on Treasury and Federal Reserve foreign exchange operations are
contained in the March and Septeraber issues of the "Federal Reserve Bulletin" and the
"Monthly Review" of the New York Federal Reserve Bank.
40
1.9 68 REPORT OF THE SECRETARY OF THE TREASURY
As had been anticipated, this resulted in massive speculative buying
on the London gold market, even though firm and concerted action
among the major industrial countries successfully avoided any change
in the parity of other major currencies. At the same time the U.S. balance-of-payments position also deteriorated seriously, adding to exchange market pressures and necessitating a strong new prograni which
was announced by President Johnson on New Year's Day.^ I n January the Canadian dollar experienced a short lived attack resulting in
large part from an exaggerated inipression in the niarket of the probable effect on Canada of the new U.S. balance-of-payments prograni.
This attack stopped—and capital flows commenced to reverse themselves—with the exclusion on Marcli 7, 1968, of Canada from the
balance-of-payments prograni.
There was a recurrence of massive speculative buying of gold in
March which drained gold from nionetary reserves into private gold
hoardes and Avliich culminated in the Washington communique,^ an
agreement by the active members of the Gold Pool to insulate golcl
reserves from market influences through creation of the two-tier gold
system. After a brief lull in the gold and exchange markets, the outbreak of student rioting and labor strikes in France in late May turned
speculative pressure on the French franc.
Prompt and coordinated intem'ational action was effective in dealing with each of these crises. By the end of the fiscal year the gold and
foreign exchange markets had settled down to orderly trading in a
reasonably calm atmosphere, although the French situation had not
fully stabilized. Major operations are summarized iri the following
paragraphs.
Strenuous and successful efforts had been made to defend the
$2.80 parity of sterling during three rather turbulent years, but at the
same time there had been contingency planning on measures that
would be required in the event of a devaluation. These were aimed at
preventing the spread of devaluation to other major currencies, avoiding a serious disruption of trade and piayments globally and protecting
the international monetary system. The Treasury Department, working closely with the Federal Eeserve and other agencies, based its
actions on a firm reiteration of its policy tO' maintain the official
parity of the dollar at $35 per ounce of gold, to participate with other
monetary authorities in providing emergency credit facilities and
other foreign exchange operations to the extent needed to counteract
any speculative attack, and through consultation with other major
countries to provide assurance that other major currency rates would
remain staible.
^ See exhibit 12.
2 See exhibit 39.
REVIEW OF FISCAL OPERATIONS
41
At the time of the devaluation of sterling the Bank of England had
utilized the credit facilities provided by the Treasury and the Federal
Eeserve System. Shortly thereafter, the United Kingdom entered into
negotiations for a $1.4 billion standby arrangement with the International Monetary Fund, whicii included the provision of $250 million
in U.S. dollars by the Treasury. I n addition, the United Kingdom
obtained $1.5 billion of short term credit facilities provided collectively by the U.S. Treasury, the Federal Eeserve System, the Bank for
International Settlements, and other central banks. These facilities,
includin^g increases in the Federal Eeserve swap network and U.S.
Treasury credits, were augmented at the time of the decision by the
Gold Pool to cease support of the private gold markets. I n June 1968,
the United Kingdom drew the full $1.4 billion available under the
standby credit with the IJMF, to repay much of its outstanding short
term indebtedness.
The Canadian dollar came under speculative attack duruig the winter months of 1968. Because of the devaluation of sterling and the
gold rush there was 'an extremely nervous atmosphere in the markets,
and there were fears that the new U.S. balance-of-payments program
would adversely affect Canadian access to the U.S. capital market.
To bolster its reserves, Canada drew from the International Monetary
Fund and from the Federal Eeserve swap facility. I n addition, new
international credits were provided by the Export-Import Bank and
European central banks. Finally, after consultations with the Canadian authorities. Secretary Fowler informed the Canadian Finance
Minister that the United States would grant Canada a complete exemption from the restraints on capital flows in the new balance-ofpayments program. I n turn, the Canadian Minister assured the United
States Govemment that this exemption would in no way impair the
effectiveness of the U.S. program. I n addition, he (announced the
intention of investing Canada's holdings of U.S. dollars, apart from
working balances, in U.S. Government securities which do not constitute a liquid claim on the United States. Taken together, these measures assisted in stabilizing the value of the Canadian dollar in the
niarket, Canadian reserves began to increase, and its short term
indebtedness was repaid.
I n May, a strong speculative ooitbreak occurred against the French
franc which continued through the end of the fiscal year. The cost
of official support for the franc in May and June came to $1.5 billion.
P a r t of this reserve loss took the form of gold sales by the French
authorities to replenish dollar balances, including $220 mUlion of
gold sold to the U.S. Treasury, and the balance was financed by the
utilization of French drawing rights on the International Monetary
42
1.9 6.8 REPORT OF THE SECRETARY OF THE TREASURY
Fund of which $150 million was provided by the Treasury in U.S.
dollars. France lalso drew the $100 million available under its swapline
with the Federal Eeserve.
During the fisqal year the Treasury issued foreign currency securities to assist in the liquidation of short term obligations, to finance
other foreign exchange operations, and in connection with the neutralization of military expenditures abroad, primarily in Germany.
On June 30, 1968;, Treasury securities denominated in foreign currencies aniounted to $1,740.4 million equivalent compared with $890.4 million on June 30, il967. Apart from the issuance of foreign currency
securities, the Treasury also obtained foreign.currencies in connection
with drawings on the I M F by Canada, tlie United Kingdom, and
France. On Marcli 8 the United States itself drew $200 million equivalent of continental European currencies from the I M F ^ to
assist further in liquidating outstanding short term commitments
in foreign countries.
The U.S. reserve position in the Fund increased during the fiscal
year from $367 million at the end of June 1967 to $903 million at the
end of June 1968—despite the drawing on the part of the United
States—because of the relatively large drawings of dollars by other
countries, primarily the United Kingdom, France, and Canada.
U.S. participation in the Gold Pool resulted in heavy gold sales
through the London Market until March 1968. Gold purchases by
some foreign central banks were also stimulated by the sterling devaluation and the gold market tension, but by the end of the fiscal
year the volume of these purchases was decreasing. Details of net
gold sales and purchases are contained in the Statistical Appendix.
Treasury exchange and stabilization agreements
During the fiscal year 1968 exchange agreements were in effect with
Argentina, Mexico, Nicaragua, and Venezuela. On December 31, 1967,
the Treasury and the Bank of Mexico renewed their $100 million exchange agreement for 2 years. The Treasury and the Central Bank of
Nicaragua entered: into a 1 year $4,750 million agreement on March 4,
1968. A new 2 year agreement with Venezuela for $50 miilion w^as
signed on March 18, 1968. I n addition, the Argentine agreement expired on May 2, 1968, and a new 1 year agreement was signed, simultaneously with the' expiration, in the amount of $75 million.^
Treasury foreign exchange reporting system
A number of steps were taken during the year to improve the Treasury foreign exchange reporting system, which covers capital movements
1 See exhibit 60.
2 See exhibits 57, 59, 61, and 62.
REVIEW OF FISCAL OPERATIONS
43
between the United States and foreign countries. Instructions were issued to reporting banks clarifying the reporting of bankers' acceptances
and deferred payment letters of credit. A survey was taken of the types
of items, other than deposits and Government obligations, included
in the reports of short term banking liabilities to foreigners. Because of
the increase in recent years in brokerage balances in the United Staites
and abroad, reports of such balances were required quarterly, beginning March 31, rather than semiannually. Further study was made of
the reporting of securities transactions by mutual funds with
foreigners.
Data on banking liabilities to, and claims on, foreigners for the
period 1957 to the end of fiscal 1968 were put on magnetic tape to facilitate their use for analytical purposes. An amendment to the Treasury Eegulations was issued permitting reporting institutions to file
their reports on punch cards, magnetic tape, or other machine-readable
media instead of on the regular report forms.
International monetary system
The negotiations on an agreement for strengthening the international monetary system through the creation of the Special Drawing
Eights facility reached a successful climax in fiscal 1968. The final
plan is the work of the Group of Ten industrial countries (Belgium,
Canada, France, Germany, Italy, Japan, the Netherlands, Sweden, the
United Kingdom, and the United States) and the Intemational Monetary Fund. I n a series of four joint meetings between the Deputies of
the Group of Ten and the Executive Directors of the Fund during
fiscal 1967, a draft outline of a plan was produced.^
The draft outline left several issues unresolved. These concerned the
method of decisionmaking regarding the timing and amounts of the
new asset to be created, the mode of transfer of the asset between
countries, and the requirements for reconstitution of balances of the
asset following its use. These issues were considered and resolved by
the Ministers and Governors of the Group of Ten in two meetings held
in London in July and August 1967. The Group of Ten at these meetings also agreed that a review of the rules and practices of the F u n d
since its inception should proceed in the Fund, in parallel with the
development of the plan for a Special Drawing Eights facility.^ The
. U.S. delegation to these meetings was headed by Secretary Fowler.
The Outline Plan for the Special Drawing Eights facility was
presented to the Governors of the International Monetary Fund at its
annual meeting in September, Avliere it was strongly supported and
approved by the Governors without dissent. The Fund Governors also
' See 1967 annual report, pp. 42-44.
2 See exhibit 30.
44
li9 6 8 REPORT OF THE SECRETARY OF THE TREASURY
noted the studies on possible improvements in the rules and practices
of the Fund. They instructed the Executive Directors to submit reports by Marcli 31,1968, proposing amendments to the Fund's Articles
of Agreement and Bylaws, (a) for the purpose of establishing the
Special Drawing Eights facility, and (b) as required to give effect
to those modifications in the present rules and practices of the Fund
that the Executive Directors might recommend.
I n the spring of 1967, the Monetary Comniittee of the European
Econoniic Community had put forward in the Fund several proposals
Avliich would require amendments to the Fund's Articles of Agreement
beyond those required for the introduction of the Special Drawing
Eights facility. These proposals called for some changes in the use
of the Fund's regular credit facilities and in the procedures for taking
certain decisions in the Fund. I t was also proposed that the unconditional availability of the gold tranche segment of Fund drawings be
clarified in order that these drawings could qualify as de jure as well
as de facto reserves. Finally the E E C menibers felt that approval of
future increases in IMF-quotas should be subject to a weighted vote of
85 percent instead of 80 percent.
The Executive Directors soon began intensive meetings to turn the
Outline Plan and the recommendations for Fund reform into the form
of amendments, but by early March, it became apparent that the
Executive Directors could not resolve all the issues and that another
IMinisterial meeting would be required. The Outline Plan itself did
not fully resolve certain issues, among these being the question of
"o]3ting out", whereby a participant might elect not to accept allocations arising from particular decisions to create Special Drawing
Eights, and the use of SDE's in transactions betAveen member countries and the General Account of the Fund itself. Other problenis regarding the Special Drawing Eights facility that had to be referred
to the Ministers and Governors concerned rules regarding obligations
to acquire and hold SDE's, provisions for voluntary transfers of SDE's
between participants, and prerequisites for activation of the Special
Drawing Eights facility. I n addition, several of the proposals for
Fund reform had raised issues that could not be settled by the Fund's
Executive Directors. These included the size of the weighted vote
necessary to approve quota increases and a uniform change in par
values plus the consequent problem of the maintenance of value
of the Fund's assets. A third problem dealt with the questioii of
interpretation of the Fund's rules. Meeting in Stockholm on Marcli
29-30,1968, the Ministers and Governors of the Group of Ten resolved
these issues to the'satisf action of all except the French delegation. The
French Minister maintained that the amendnients went beyond the
provisions of the Draft Outline and reserved his position until he
REVIEW OF FISCAL OPERATIONS
45
saw the final texts.^ The Fund Executive Directors were then able to
complete their work. On April 16, 1968, the text of a resolution was
agreed for submission to the Governors of the Fund for their approval
by May 31,1968.
After consultation with the National Advisory Council on International Monetary and Financial Policies, the Secretary, acting as
U.S. Governor, notified the Fund of U.S. approval of the resolution.
The necessary approval by a large majority of the Fund Governors
was obtained for the Eesolution and the Proposed Amendment was
transmitted to all members for their formal acceptance and certification of readiness to participate in the new facility. The Proposed
Amendment will enter into force for all members when three-fifths of
the members, having four-fifths of the total voting power, have accepted the modifications. For the Special Drawing Eights facility to
be established, it is also necessary that members representing 75 percent of the Fund's quota certify to the Fund that they have taken all
necessary steps to enable them to carry out the obligations of a
participant.
On April 26, 1968, the Secretary transmitted to Congress the National Advisory Council's "Special Eeport on the Proposed Establishment of a Facility Based on Special Drawing Eights in the International Monetary Fund and Modifications in the Eules and Practices
of the F u n d " recommending approval of the Proposed Amendment.
President Johnson addressed a message to the Congress on April 30,
1968, entitled "Strengthening the International Monetary System"
and on May 1, the Secretary testified before the Banking and Currency
Committee of the House of Eepresentatives in favor of the bill.^ The
full House approved the bill authorizing U.S. participation in the
Special Drawing Eights Plan on May 10, 1968. The bill was reported
out by the Senate Committee on Foreign Eelations and subsequently
approved by the full Senate on June 6,1968. President Johnson signed
the bill (Public Law 90-349) on June 19, 1968.-^ The U.S. acceptance
of the Proposed Amendment and certification of participation were
then transmitted to the Fund. The United States was the first Fund
member to complete both steps.
During these final months of negotiation leading to agreement on
the Special Drawing Eights facility, the international monetary system was placed under severe pressure by the devaluation of the pound
sterling on November 18, 1967, and the subsequent heavy speculative
activity in the gold and foreign exchange markets. Large amounts of
gold were being purchased in London by foreign holders of dollars
and other currencies. Gold from new production was not enough to
1 See exhibit 41.
2 See exhibit 44.
3 See exihibit 45.
46
1.9 68 REPORT OF THE SECRETARY OF THE TREASURY
fill all the orders and demand was being met in large part from the
gold reserves of the active members of the Gold Pool (Belgium, Germany, Italy, Netherlands, United Kingdom, United States—France
withdi^w from active memibership in the Pool in June 1967). Tlie Gold
Pool which, had been organized in 1962, had. succeeded, in stabilizing
the price of gold on the London market without any appreciable
drain of monetary reserves until the latter part of 1967.
The active members of the Gold Pool met in Frankfurt, Germany,
on November 26, 1967, and issued a statement intended to discourage
speculative demand.^ T h e calming effect proved only temporary, and
heavy demand developed once more in December 1967. By mid- March, it was apparent that meeting private demand was likely to
become more and more costly iri terms of reserve losses. Furthermore,
the conversion of liquid assets by private holders into gold was a
serious strain on iriternational credit markets. Credit in foreign markets was tightening and interest rates were cliiribing at a rapid rai^te.
The world faced the possibility of a severe financial disturbance.
I n this same period, the Administration moved to eliminate the
remaining gold cover requirements for Federal Eeserve notes and ^
U.S. notes and Treasury notes of 1890, proposing legislation to this
effect in January 11968. The Administration's action reflected both.
domestic and international considerations. On the doniestic side, the
demand for currency was rising about $2 billion per year. This dictated that an additional $500 million in gold be set aside each year to.
satisfy the gold reserve requirements. I n addition to this, industrial
gold consumption, was taking some $160 million per year.. On the
internatioriai side, it was felt that the strong speculative pressure in
the London gold market reflected a feeling that the U.S. stock of "free
gold"—that amount of gold above the gold needed to meet reserve
requirenients—Avould soon be exhausted.
Secretary Fowler testified in favor of the bill before the House
Banking and Currency Committee on January 23, and the Senate
Banking and Currency Comniittee on January 30.^ On February 21,
1968, the bill, H.E. 14743, passed the House.and on March 14, the
Senate approved the House-passed version. The President signed the
bill into Public Law 90-269 on March 18,1968;
Against this background, the Governors of the Central;Banks represented in the Gold Pool were invited by the Secretary and Mr. Martin,
Chairman of the Federal Eeserve Board, to meet in Washington on.,,
March 16-17, under the chairmanship of Mr. Martin.^Tliey. decided..
to adopt a new approach to the gold problem. This took the forin of
1 See exhibit 34.
2 See exhibit 12.
3 See ex'hibit 38.
REVIEW QF FISCAL OPERATIONS
47
the so-called two-tiered gold system under which the private commodity price of gold is permitted to fluctuate without official intervention
Avhile the official price and role of monetary gold remains unchanged
in transactions between nionetary authorities. The participants agreed
that they ivould no longer supply gold to the London market and that
"in view of the prospective, establishment of the facility for Special
Drawing Eights, they no longer feel it necessary to buy gold from the
niarket." ^ The Managing Director of the International Monetary
Fund issued a statenient immediately following the March 16-17 meeting in whicii he voiced the Fund's approval of the agreement reached
and called upon all countries belonging to the Fund to conduct gold
transactions in a manner consistent with the agreement.^
International Monetary Fund^
The main developments during the fiscal year, i.e., the adoption of
the plan for a facility based on Special Drawing Eights in the Fuiid,^
the devaluation of sterling and other currencies in November 1967, and
the institution of a two-tier price system for gold, have been discussed
in detail above. Other developments included a record use of Fund
resources by member countries, including a large increase in resort to
the facility for compensatory financing of export fluctuations. The
Fund, along with the International Bank, was actively engaged at the
close of the fiscal year in preparing a study on the .stabilization of
prices of primary products, in response to resolutions adopted at the
1967 annual meetings in Eio de Janeiro.
• During fiscal 1968 the Fund's currency sales (draAvings) aggregated
the equivalent of $3.7 billion, the largest in any fiscal year since the
inception'of the Fund. The three mairi transactions involved the
United Kingdom ($1.4 billion), France ($885 million), and Canada
($426 million) .^ The chief currencies draAvii Avere Deutsche Mark ($873
million), U.S. dollars ($752 million), and Italian lire ($497 million).
Eepurchases during the year aggregated $812 million, all in currencies
other than the dollar. From the beginning of operations to June 30,
1968, cumulative draAAniigs AA'ere the equivalent of $17.1 billion, of
whicii $5.9 billion Avas iri dollars. Eepurchases to June 30, 1968, aggregated $7.9 billion, of which $3.6 billiori Avas in dollars.
1 See ex'Mbit 39.
2 See exhibit 40.
«^ Fuller discussions of the activities of the Internaitional Monetary Funid and, the other
international financial organizations are included i n the National Advisory Council's Annual
Report for the fiscal year 1968.
* Consideration of the Outline Plan for the facility w a s the principal business of the 1967a n n u a l meeting. See exhibit 32 for s t a t e m e n t by Secretary Fowler as Governor for t h e
United States. The U.S. Delegation included Under Secretary of S t a t e Rostow ( a l t e r n a t e '
Governor), Treasury Under Secretary for Monetary Affairs Deming, U.S. Executive Director of the I M F Dale, and U.S. Executive Director of the IBRD Merchant as TemporaryA l t e r n a t e Governors. Members of the National Advisory Council and congressional committee members served as advisers.
s These figures i n c l u d e t h e Fundi's repayments of i t s 1965 borrowings from France ($140
million) and Canada ($35 million).
48
19 68 REPORT OF THE SECRETARY OF THE TREASURY
A drawing of the equivalent of $200 million by the United States
in March 1968 marked the first use by this country of the Fund's resources since December 1966. This draAving in Netherlands guilders,
Italian lire, and Belgian francs, Avas used to repay short term SAvap
draAvings made by the United States late in 1967. The swap drawings
had been designed to help stabilize the international exchanges at the
time of the uncertainties attendant upon the position of the pound
sterling and its devaluation. Most of the earlier U.S. drawings had
been technical draAvings to enable third countries to purchase with
dollars amounts needed in other currencies in repurchase transactions.
The cumulative total of gross draAvings by the United States Avas
$1,840 million on June 30,1968, but as a result of purchases of dollars
by other countries, including substantial aniounts by the United Kingdom and France in the transactions noted, the United States Avas indebted to the Fund for only $299 million by the end of the fiscal year.
On balance there was little gain during the year in liberalization
of exchange restrictions, in the aA^oidance of multiple currency practices, or in the scope of bilateralism. The Fund further broadened its
technical assistance activities, including expansion of the offerings of
the I M F Institute, and continued its consultations with both Article
X I V (inconvertible currency) and Article V I I I (convertible currency) countries on economic and financial matters of mutual interest
and concern.
T h e I n t e r n a t i o n a l Bank group ^
The International Bank for Eeconstruction and Developnient and
its affiliates, the Iriternational Development Association (IDA) and
the International Finance Corporation ( I F C ) , committed a total of
$i.O billion during the fiscal year for financing econoniic developnient
projects in the member countries. The World Bank made IICAV loans of
$847.0 million, mainly to less-developed countries for electric power,
roads, railways, and industry. I n view of its limited resources, I D A
credits Avere $106.6 million during the year compared Avith $353 million in the preceding year. I F C iiiA^estments, Avhich are not guaranteed
by governments, were made in private companies on a loan and equity
basis for copper mining, developnient banks, iron and steel plants, and
some smaller items. The total amount, including underAvriting commitments, was $50 million.
The loan operations of the World Bank are financed by capital
subscriptions, borrowing on financial markets, sales of participations,
repaynients and earnings on loans and investments. During the year
the Bank's outstanding funded debt increased by $214.3 million to the
J For more complete discussion see NAC Report for the year ending Juue 30, 1968.
REVIEW OF FISCAL dPERATlC:^^
49
equivalent of $3,289.6 million. The debt includes 78 separate issues,
denominated chiefly in U.S. dollars ($2,446.7 million), Deutsche Mark
($422.7 million equivalent), and Swiss francs ($204.4 million equivalent). Increases in the funded debt represented the public sale of $300million of U.S. dollar bonds ($159.4 million under dela,yed delivery
arrangements), and securities denominated in Deutsche Mark (U.S.
$30 million equivalent), Swiss francs ($17.5 million equivalent), Swedish kronor ($14.5 million equivalent), Canadian dollars ($13.9 million
equivalent), and Netherlands guilders ($11 million equivalent), The
funded debt was further increased through the private placement of
bonds and notes totaling the equivalent of $347.9 million and the issuance of $158.7 million of bonds under delayed delivery arrangements
of previous issues. The Bank has continued its efforts to obtain financing abroad, iand has invested the pfroceeds of the issues on the U.S. market in longer term Treasury obligations pending disbursement, to
reduce possible adverse effects on the U.S. balance of payments.
Decreases in the funded debt resulted from the retirement of bonds
and notes totaling the equivalent of $457.9 million, including $406.4
million denominated in dollars. Purchase and sinking fund transactions amounted to $55.9 million and the dollar valueof the outstanding
ddbt was reduced by the devaluation of sterling ($6 million).
I D A credits are funded by member subscriptions and contributions,
grants from tlie net eamings of the World Bank, repayment oif credits,
and eamings. IDA's usable resources, cumulative to J u n e 30, 1968,
amounted to $1,795 million, of AA^hich the P a r t I (developed) countries
contributed $1,524 million; I B E D grants $210 million, and earnings
and contributions of P a r t I I countries, the balance. A t the end of the
fiscal year only $7 million was uncommitted.
I n March 1968 agreement Avas reached in principle among P a r t I
membere to provide additional resources to I D A in three annual installments of $400 million each to finance operations during the fiscal
years 1969 through 1971. The U.S. share will be 40 percent or $160
million annually for 3 years. Legislation to 'authorize U.S. participation 'in this replenisliment was before Congress (H.E. 16775 and
S. 3378) 'at the end of the fiscal year. The arrangements for the replenishment include provisions to mitigate any adverse effects on the
U.S. balance of payments resulting from the U.S. participation.
Inter-American Development Bank
The Ninth Annual Meeting of the Board of Governors of the InterAmerican Development Bank ^ was held at Bogota, Colombia, April
^ For background on tbe establishment and operations of the Inter-American Development Bank, see 1965 annual report, pp. 58-60.
50
19 68 REPORT OF THE SECRETARY OF THE TREASURY
22-26, 1968.^ At this meeting the Board of Governors discussed a
broad range of policy issues, including resources available to the Bank,
the operating policies of the Bank, the state of the Alliance for.Progress, econoniic integration of Latin America, and international trade
and financial cooperation. Among the resolutions adopted at this iheet^
ing was one directing the Bank to initiate, in conjunction with C I A P
(Inter-American Committee for the Alliance for Progress), the estabr
lishment of a task force to develop a 5-year plan and action program
for projects for the physical integration of Latin America..:
To obtain resources for Ordinary Capital lending the I D B increased
its short and longiterrri borrowings by approximately $64.0.million
during the fiscal year, comprising a $60.0 million issue in.the United
States in November 1967, a $6.0 equivalent Belgian franc issue also in
November 1967, and a $43 million short term dollar bond issue (nearly
replacing $45 million of maturing bonds of 1966 and 1967) placed
outside the United States in April 1968. As of June 30,1968, the Bank's
cumulatiA^e total borro Avirigs (after sinking fund purchases)
amounted to $507.4;million equivalent, of which $335 million had been
raised in the U.S. market and the balance in foreign capital markets.
The subscribed resources of the Bank's Fund for Special Operations
totaled $2,309.9 million equivalent as of June 30, 1968. The increase
during the year reflected paynients to the Bank by member countries
under a $1.2 billion increase in the resources of.the F u n d for Special
Operations which became effective in December 1967.. U.S. participation in this increase was authorized by the Congress in Public Law
90-88, approved September 22,1967. The first payment by the United
States, amounting to $300 million, was made to the Bank in January
1968.
As of June 30, 1968, the Inter-American Development Bank had
authorized 465 loans amounting to the equivalent of $2,497.9 million,
comprising: 157 loans amounting to $924.0 million equivalent from
its Ordinary Capital resources; 177 loans amounting to $1,045.6 million
equivalent from the resources of the Fund for.Special Operations;
and 117 loans from the Social Progress Trust Fund amounting to
$501.0 million. I n addition, the Bank had authorized 14 loans amounting to $27.3 milliori equivalent from the economic develppment funds
it administers on behalf of the Governments of Canada, the.United
Kingdom, and Sweden.
:^Tlie U.S. Governor of the Bank, Secretary of the Treasury Henry H. Fowler, headed the
U.S. delegation to the meeting. The delegation included Assistant Secretary of S t a t e for
Inter-American Affairs and U.S. Coordinator, Alliance for Progress, Covey T. Oliver and
Assistant Secretary: of the Treasury John R. P e t t y (both of whom acted' as Temporary
Alternate Governors); together with Members of the Congress and. representatives of the
U.S. Government agencies constituting the National Advisory Council on I n t e r n a t i o n a l
Monetary and Financial Policies.
REVIEW OF FISCAL OPERATIONS
'
51
The Asian Development Bank^
T^he First Annual Meeting of the Board of Governors of the Asian
Development Bank was held in Manila, Philippines, April 4-6, 1968.^
At this meeting Switzerland was accepted as the 32d member of the
Bank, subscribing to $5 million of stock. This raised the total subscriptions to $970 million and brought the total membership to 32, of which
19 are countries of the region and 13 are nonregional countries.
The second of the United States five $20 million installments of
paid-in capital was paid in August 1967, and consisted of $10 million
in cash and $10 million in the fonn of a noninterest-bearing letter of
credit which may be drawn on in future years when required by the
Bank for disbursement. As bf June 30, 1968, of the $485 million subscriptions on paid-in capital of the Bank, installments totaling $193.5
million had matured.
The Bank made its first loan from Ordinary Capital in January 1968,
the equivalent of $5 million to the Industrial Finance Corporation
of Thailand, against which no disbursements had been made by June
30, 1968.3 During the 12 months ending June 30, 1968, the Bank also
extended technical assistance to Indonesia in the field of food production and distribution, to the Agricultural and Fisheries Development
Corporation of Korea, to the Philippines on water management, and
to Vietnam on development financing. I n March 1968, the Bank issued
the Asian Agricultural Survey, Avhich constitutes a major model study
of Asian agriculture.
•' On September 26, 1967, President Johnson submitted to the Congress the A D B Special Funds bill ('S. 2479 and H.E. 13217), which
would authorize the appropriation of up to $200 million over a 4-year
period as the U.S. contribution to Multilateral Special Funds of the
A D B . Under the proposed legislation the U.S. contribution Avould constitute less than one-half of the total contributions to the Bank's Special Funds, would be available only for the procurement of U.S. goods
and services, and would be used to finance high priority development
progranis and projects in such key areas as agriculture, transport and
communications, and Mekong development. At the First Annual Meeting of the A D B Board of Governors, dcA^eloped country menibers of
the A D B offered to contribute a total of $128.1 million to the Bank's
Special Funds—Japan offered $100 million, mainly for agricultural
1 F o r background on the establishment and early operations of the Asian Development
Bank (ADB), see 1966 and 1967 a n n u a l reports, pp. 64-65 and pp. 49-50, respectively.
2 Under Secretary of t h e Treasury Joseph W. B a r r headed the U.S. delegation to the
meeting. The delegation included Assistant Administrator for E a s t Asia of AID J o h n C.
B u l l i t t and U.S. Director of the Asian Development Bank B e r n a r d Zagorin (both of whom
acted as t e m p o r a r y a l t e r n a t e Governors), together w i t h representatives of the Treasury
D e p a r t m e n t and AID and the Secretary of the Senate.
3 ^ ^ 2 million equivalent loan to the Central Bank of Ceylon for modernization of tea
factories w a s made in J u l y 1968 and a $6.8 million equivalent loan was made in September
1968) to the Republic of Korea for the Seoul^Inchon Expressway project.
52
19 68 REPORT OF THE SECRETARY OF THE TREASURY
development, of which $20 million was appropriated for this year;
Canada offered $25 million over the next 5 years; Denmark offered an
initial contribution of $2 million for agriculture; and the Netherlands
offered $1.1 million for agriculture for the current year.
I n June 1967 the United States made available to the A D B $250,000
for technical assistance, of which $161,798 had been used by June 30,
1968. J a p a n has made available $131,000 for technical assistarice,
Canada $100,000, Germany $40,000, Denmark $300,000, and the United
Kingdom, Finland, India, and Korea unspecified aniounts of technical
assistance.
Organization for Economic Cooperation and Development
The seventh Ministerial Council meeting of the Organization for
Economic Cooperation and Development (OECD) in Paris November 30-December 1,1967, stressed the need for both surplus and deficit
countries to intensify their efforts to reduce persisting disequilibria
in their external positions. Progress in examining trade relations with
developing countries Avas also noted. A Treasury representative served
on the U.S. delegation.
Both the Economic Policy Conimittee ( E P C ) of the OECD and its
Working Party on Policies for the Promotion of Better International
Payments Equilibrium (Working Party 3) concentrated much of their
attention during the year on the balance of payments of the United
States and the United Kingdom and the need for complementary adjustment by other countries. Under Secretary of the Treasury for
Monetary Affairs Deming served as chairman of the U.S. delegation to
Working Party 3 and as a member of the E P C delegation.
Wlien the Foreign Direct Investment Program was introduced in
January 1968, the United States invoked the balance-of-payments
derogation clause of the Code of Liberalization of Capital Movements.
The Conimittee for Invisible Transactions, on Avhich a U.S. Treasury
official serves, reviewed the U.S. action and the Council of the O E C D
found the United States justified.
A Treasury representative led the U.S. delegation in discussions in an
ad hoc group of the Trade Committee concerning Germany's shift to
a value-added taxi The group could not agree on the impact of the
change on international trade. Similar discussions Avitli Belgium and
the Netherlands are scheduled for fiscal year 1969.
A Treasury representative led the U.S. delegation to the September 1967 meeting of the group on export credits and creciit guarantees.
Treasury representatives participated actively in the work of the Fiscal Committee,^ in the annual examination of the United States by the
Economic Development and Eeview Comniittee, and in a group Avhich
1 For a description of the activities of the Fiscal Committee see p. 37.
REVIEW OF FISCAL OPERATIONS
53
examines short-term economic prospects. A Treasury official regularly
represents the United States as an observer at the meetings of the Managing Board of the European Monetary Agreement.
Trade policy
With the successful conclusion of the Kennedy Eound tariff negotiations, the United States began an extensive review of its trade
policy. A t the request of the President, the Special Eepresentative
for Trade Negotiations instituted a wide-ranging study of future
U.S. foreign trade policy Avhich included both public hearings and
analysis by experts within the Government. Treasury Departmerit
representatives participated in the public hearings and the development of background papers for the study.
At the request of the United States, the Contracting Parties to the
General Agreement on Tariffs and Trade (GATT) established a
working party to examine the G A T T rules dealing with border tax
adjustments, i.e. the remission of indirect taxes on exports and the
levying of compensatory duties on imports. The Treasury Department has taken an active and leading role in the international discussions of this issue since the G A T T rules disadvantage our trade and adversely affect our balance-of-payments position. Treasury representatives, led by Assistant Secretary Petty, have been members of the
U.S. delegation to the G A T T meetings on this subject. The sharp
reduction of tariff barriers has focused increased attention on nontariff barriers to trade. The G A T T has established a procedure for
examining these nontariff barriers and an inventory has been
drawn up.
As a member of the Trade Staff Comniittee, the Trade Executive
Conimittee, and the Trade Information Comniittee, the Treasury
Department actively participated in the development of U.S. trade
policy. A Treasury representative was also a member of the U.S.
delegation to the 24tli session of the Contracting Parties to the G A T T
and various other G A T T committees and working parties as well as
the Second United Nations Conference on Trade and Development
(UNCTAD).
318-223—69-
ADMINISTRATIVE
REPORTS
Administrative Management
Management improvement program
The Department realized $28.1 million and 2,580 man-years in savings during fiscal 1968 from actions to improve managenient.
While not the result of managenient improvements, additional benefits amounting to $68.8 millionflow^edfrom policy changes. The largest
portion, $55.1 million, resulted from a policy decision of July 14,1967,
to sell silver reserves at the market value rather than at the monetary
A^alue. Net receipts from the sale of proof coins added $3.3 million to
the general fund. An additional $10.4 million is attributaible to a reduction in borroAving costs because new requirements for the earlier
deposit of Avithheld taxes resulted in earlier availability of these funds.
Special studies and projects
The individual bureau reports Avliich appear later contain details
of studies and projects carried on by the bureaus to promote econoniy
and-oiTiciency. Among the studies completed at the departmental level
AV'ire those of the organization and management of the Treasury laborat<.ries and of the Bureau of Narcotics before its transfer to the Department of Justice on April 8, 1968. At the request of the Bureau of the
Budget, the Treasury also participated in a study to develop the organization and administrative structure for a ncAv consolidated laAv
enforcement training center for all Federal agencies except the F B I
and Defense Departnient. I n addition, revisions were made in the
custody and handling of coin and currency in the main Treasury
building. The program to improve serAdces to the individual citizen
Avas pursued vigorously, and a checklist was developed to appraise
progress in the prograni.
Treasury participation in the foreign technical cooperation programs of the Agency for International Development increased Avitli
the introduction of a new prograni of tax policy assistance for certain
Latin American countries. There was also an increase in the number of
participants from developing nations Avho received instruction and
training in Treasury operating methods.
Emergency preparedness
An appropriate degree of emergency preparedness Avas maintained
during the year. A selected group of employees participated in the
National Civil Defense Exercise in October 1967 at the Department's
, relocation site, and emergency communications operators attended
periodic training exercises there. Indoctrination sessions Avitli field
office representatives having emergency assignments at Federal Eegional Emergency Operating Centers Avere held to inaintain the regional emergency plan. Defense readiness planning instructions Avere
brought up to date for guidance of bureaus and offices. The Treasury
57
58
19 68 REPORT OF THE SECRETARY OF THE TREASURY
collaborated Avitli the Office of Emergency Planning on technical matters concerning emergency functions of the Department.
Planning and program evaluation
Plamiing and program evaluation aids in improving the allocation
of the Department's resources by dcA^^eloping the relatiA^e costs and benefits of alternative courses of action and by providing staff leadership,
coordination, and direction of the Department's planning-programingbudget systeni.
During fiscal 1968 this staff:
(1) Developed a pilot- study for the determination of an optimum
level of examination of mail packages by the Customs Bureau including the applicatipn of sampling techniques to develop the basic data.
I n addition, cooperation continued in the development of improved
output and related cost data systems in the bureau;
(2) Participated in the current revicAv of the planning and evaluation techniques employed by Internal Eevenue Service's automatic
data processing complex; .
(3) Continued the preparation of the monthly coin sainple as a
measure of the rate of disappearance of sih^er coin from circidatioii
and the further transition to clad coin, and developed a series of analyses in coin requirements; .
(4) Coordinated preparation by the Treasury bureaus of the third
annual program and financial plan, together Avitli supporting analytical material as a i basis of determinations on fiscal year 1970 program
levels;
i
.
(5) Developedi cooperatively Avitli Budget Bureau staff the format
and substance of a compendium setting forth the Treasury prograni
in plamiing-programing-budgeting tenns, designed as a model for
further compendiums supplementing the President's budget; and
(6) ProAddingian analytical basis for a proposed allocation of resources in the U.S. SaAdngs Bonds Division.
Financial management^
Budgeting.—The Avorking capital fund sought for the Office of the
Secretary to finance common service functions performed for other
Treasury bureaus had received approval from the Plouse of Eepresentatives but not the Senate at fiscal yearend. Controls were exercised
in expenditures, employment, overseas travel and employment, and
size of motor vehicle fleets. Information Avas provided t h e Office of
Economic Opportunity for use in preparing the publication "Summary of Federal Programs—A Eeport of Federal Program Impact
on the Local Community" and that publication became the principal
source document for jDioviding information on Federal expenditures
by geographic or political subdivision. The supplemental or appropriation request for the cost of pay and postal rate increases, taking effect
in fiscal year 1968, principally under Public LaAv 90-206, was held to
$8.9 million although the costs totaled $30.5 million. Costs Avere absorbed to the extent of 71 percent by application of managenient sav-,
ings and reinibursements aiid use of budgetary reserves and transfers.
betAveen appropriations. . .
;
^ See detailed statement in the "Annual Report of the Secretary of the Treasury on
Improvements in Financial Management."
ADMINISTRATIVE REPORTS
59'
Automated payroll operations.—:A review of all payroll operations
Avas completed. Action Avas initiated to convert the Secret Service payroll operation to the. I E S computer system. Arrangements Avere completed for continuation of payroll services to the Coast Guard and the
Bureau of Narcotics, Avliich had been transferred to other departments,
until such time as they are able to provide their OAVU services.
The payroll for the Comptroller of the Currency Avas authorized, to
be placed on the automated systeni of the fiscal service effective January 1969.
Accounting systems.—Adniinistrative accounting systems of the
Office of the Treasurer of the United States and the Bureau of the
Public Debt were approved by the Comptroller General. DepartmentA^dde administrative accounting principles and standards applicable
to all Treasury bureaus Avere drafted and were being, considered by
the.General Accounting Office at thefiscal yearend.
.
^
. Mamagefment of automatic data processing.-^QigmfiQ,Mit benefits
Avere obtained through the use and management of the Department's
60 coniputers, other A D P equipment, and the related operations which
required over 19,000 man-years and $135 million in fiscal year 1968.
Beiiefi.ts.to the public include more uniform and equitable treatment
of taxpayers, a speedup in the issuance of tax refund checks, improved
handling, of current income, savings bonds operations, and continueci
improvements in issuing benefits and salary checks.; Benefits to Federal
fisca.l and tax administration include expansion of net additional revenue as a result of Internal Eevenue's A D P masterfil.e systeni. Operating benefits include over $1 million and 150 man-years in recurring:
and $213,000 and 38 man-years in oner time reductions in operating
costs, over $1 million worth of sharing of A D P facilities, use of excess
as Avell as IICAV equipment and extensive participation in GovernmentAvide efforts to bring about standardization and compatibility in computer-based data processing operations. .
I n t e m a l auditing.—FolloAving completion of initial reviews and appraisals of internal auditing activities in all Treasury bureaus and offices, the departmental internal audit staff concentrated on assisting
the bureaus.in improving their internal auditing operations. This in^
eluded help in developing iniproved audit policy statements and ._
manuals for the guidance of their audit staffs. I n addition, the departmental staff audited Office of the Secretary administrative accounts
and selected procedures and practices, and cond.ucted:a special audit
of similar accounts for the Bureau of Narcotics prior to its transfer to
the Department of justice..
Personnel management
I n the fiscal year 1968 emphasis was again placed on improving all
areas of personnel management, Avitli continued particular attention
to special programs of interest to the President.
:
The equal employment opportunity program forged ahead with the
placement of minority employees in positions never before occupied,
by this group. Bureaus revised their equal employment opportunity,
action plans to schedule positive action goals for fiscal 1969 and to
include the.new Federal Avoman's.program established by Executive
Order.11375 issued by the President on October 13, 1967. Individual
conferences were held with bureau heads to followup on positive ac-.
60
19 6,8 REPORT OF THE SECRETARY OF THE TREASURY
tion taken in furtherance of the equal employment opportunity objectives.
Despite drastic cutbacks in the number of employees hired, the
Department managed to hire 80 percent of the number of handicapped
persons hired during fiscal 1967, Avhich represented an alltime high
year for the Department. Special emphasis Avas placed on training
and employment of the blind. As a result of a successful pilot training
program during the fiscal years 1967 and 1968, H E W made available
a grant of $100,000 for training 50 blind persons to be employed by
I E S during the next 3 years.
The executive assignment system affecting supergrade positions was
introduced into the Treasury Department through installation of
streamlined procedures, detailed records, and other control measures
designed to effect promptly all personnel actions involving key positions. Among measures adopted Avas establishment of an executive
assignment board and an executive assignment committee to review
and approve recommendations for recrmtment, selection, and placement of top officials on a systematic and objective basis.
The Department continued to participate in the development of a
coordinated Federal wage board system. Specific recommendations
Avere made to the Civil Service Commission for regulatory provisions
in the system. Data Avere furnished and obtained to facilitate develop-.
ment of the Government-wide system.
A ncAV natiouAvide plan for the inspection of Treasury personnel
operations Avas jointly formulated with the Civil Service Commission.
Inspection under the plan is scheduled for fiscal 1969.
Although there, are still areas of incomplete development in the
organized relations between labor and management in the Treasury
Department, during fiscal 1968 there have been substantial gains in
(1) union membership, whicii approaches 50 percent of the total employment, (2) recognitions granted, both exclusive and formal, and
(3) negotiated agreements.
This increased activity has created a greater aAvareness, among
supervisory and managerial personnel, of the rights and aspirations of
organized employees, and of the continuing need to improve working
conditions and apply personnel policies fairly and impartially.
Estimated first year benefits from employee suggestions totaled
$935,112 and similar benefits recognized by performance awards
brought the total to $1,652,762.
Budgetary restrictions made it unusually difficult to meet employee
training requirements. Every effort Avas made to provide immediately
required operational training. As a result, advanced professional and
technical training and supervisory and management development and
other training with longer range objectives was deferred.
Administrative services
Personal property.—From April 1967 through March 1968, Treasury
declared as excess to its needs property having an original acquisition
cost of about $3,455,000 and reassigned excess property valued at $782,000 Avithin the Department. Personal property transferred to other
Federal agencies totaled about $1,103,000. I n turn. Treasury received
about $1,004,000 of; excess personal property from other Federal agencies without reimbursement. Personal property valued at $3,596,000
ADMINISTRATIVE REPORTS
61
was determined surplus; $1,294,000 worth of personal property Avas
released for donation through GSA and DH[EW clearances. Proceeds
from sales of surplus, including scrap, totaled $53,000, for deposit to
the general fund of the Treasury.
Real property.—T>iiTmg the fiscal year 1968, Treasury activities in
29 locations in 11 cities were consolidated into single locations, with
attendant increases in productivity and econoniy. Treasury activities
Avere relocated from leased to Government-owned buildings in 32 locations with rental savings. Forty-eight offices occupying both Government-owned and leased space were closed Avitli an annual rental savings
of approximately $51,000.
Library.—A 3-year program to modernize and upgrade the Department's library facilities was completed.
Safety.—The frequency of disabling injuries dropped in calendar
year 1967 as Avell as the number of days lost and the frequency of
motor vehicle collisions.
Security activities
During fiscal year 1968, physical security inspections were conducted
in the offices within the Office of the Secretary, bureau headquarters
offices, and 44 bureau field offices.
I n the personnel security program, 1,280 sensitive cases, 431 nonsensitive cases, and 590 reinvestigation cases were processed. A survey
of all personnel holding " Q " clearances was made to determine if they
Avere still needed. If not, they were canceled.
Office of the Comptroller of the Currency
The Comptroller of the Currency, as the Administrator of the National Banking System, is charged with the responsibility of maintaining the public's confidence in the System by sustaining the banks'
solvency and liquidity. An equally important public objective is to
fashion the controls OA^er banking so that banks may have the discretionary power to adapt their operations sensitively and efficiently to the
needs of a growing economy.
Office operations
During fiscal 1968 emphasis Avas placed on improving the quality of
the bank exaniining function, while exploring more efficient methods
of meeting the challenges and requirenients of the growing National
Banking Systeni. Modernization of bank examining methods continues
as a major theme in this Office. Twenty-eight national bank examiners
have beconie experts in the field of electronic data processing. This
training has been a necessary and effective refinement of bank examining procedures and has aided this Office in its evaluation of the National Banking System.
I n Washington, a major reorganization within the Administrative
Department established the proper allocation of major administrative
responsibilities in the Office, including the creation of a Fiscal Management Divisioii and a Management Services Division, the latter comprised of experienced management analysts and computer technicians.
This improvement in administration is another facet of the continued
program of modernization throughout the organization.
62
19 68 REPORT OF THE SECRETARY OF THE TREASURY
The program of active cooperation Avith other Federal bank regulatory agencies continues, creating more efficient and meaningful methods of gathering significant information. The present trend of active
participation by joint committee members to further streamline administration of the banking system is expected to continue.
Personnel
Personnel administration played a vital part in the Office's progress.
To alleviate the critical shortage of qualified personnel, a select group
of regional recruitment coordinators was established in each of the
14 national bank regions. The recruiters were given training, instruction, guidance, and responsibility for recruitment on college and
university campuses throughout the multistate area covered by their
region. During fiscal 1968 there was a marked increase in the activities
of these recruiters throughout the country, Avhich resulted in a net
gain of 84 new assistant national bank examiners and assistants in
trust. I n the fall of 1967 the second annual recruiters' conference convened in Washington to provide a forum for an exchange of experience
and methods used in the various regions throughout the country.
The incentive awards prograni was given special emphasis in fiscal
1968. Employee response has resulted in further modifications of procedures and methods. I n addition, all phases of the Office training
prograni received IICAV attention. Various schools and seminars were
conducted for all IcA^els of employees. During the fiscal year, a study
was initiated for the purpose of evaluating instructional techniques
used in the training of assistant national bank examiners which is expected to result in a more effective training program.
Fiscal management
A sound fiscal management program was implemented and strengthened during fiscal 1968. Tighter expenditure control, an improved
and expanded accounting system, a timelier investment program in
Government securities, and a more responsive fiscal information system have been instituted, along Avitli studies for improving other support operations in this iniportant area of the organization.
Information services program
The purpose of this program is to make the policies and procedures
of the Office of the Comptroller of the Currency better known and to
facilitate communications among the Office, the banking industry, and
the general public.
Four basic manuals are aA^ailable to employees, banks, and other
interested parties: "Comptroller's Manual for National Banks,"
"Comptroller's Manual for Eepresentatives in Trusts," "Comptroller's
Policy Guidelines for National Bank Directors," and "Instructions,
Procedures, Fornis for National Bank Examiners." A new publication
has been issued to the National Banking Systeni. This "Directory"
contains the address and telephone number of every decisionmaking
official in the Office together Avitli his picture and a biographical sketch.
The "Annual Eeport of the Comptroller of the Currency" is available
to interested parties and contains a general statement of policy, descriptions of the state of the National Banking System, of Office operations,
63
ADMINISTRATIVE REPORTS
and reprints of selected Office documents relating to crucial public
issues in banking.
Status of national banks
While the number of national banks decreased from 4,780 to 4,743
during fiscal 1968, the number of national bank branches rose from
9,710 to 10,240, a 5.4 percent increase. These branches were operated
by 1,502 of the 4,743 national banks, for a total of 14,983 national bank
offices. During the 12 months preceding June 30, 1968, a total of 18
charters Avere issued for iiCAvly organized national banks. Approval
Number of national banks and banking offices, by States, June 30, 1968
National banks
Total
United States
Alabama
Alaska
Arizona
Arkansas
California
Colorado.—
Connecticut
D elaware
District of Columbia
Florida
Georgia
Hawaii
Idaho
Illinois
Indiana
Iowa
Kansas
Kentucky
Louisiana
Maine
Maryland
Massachusetts
Michigan
Minnesota
Mississippi
Missouri
_
Montana
Nebraska
Nevada
New Hampshire
New Jersey
New Mexico
New York
North Carolina
North Dakota
Ohio
.Oklahoma
Oregon. _
Pennsylvania
Rhode Island
South Carolina
South Dakota
Tennessee
Texas
Utah.
,
Vermont
Virginia
Washington
West Virginia
Wisconsin
Wyoming
Virgin Islands
District of Columbia—all V
Unit
With
branches
Number
of
branches
14,983
4,743
88
5
4
67
77
118
30
5
9
202
62
2
9
421
123
102
171
80
48
21
48
88
98
195
36
98
48
127
4
53
145
34
182
23
42
220
220
12
331
4
26
34
77
539
12
27
111
27
80
117
40
1
14
Number
of
offices
50
0
1
36
27
118
8
3
0
202
33
0
3
408
54
64
145
37
15
6
17
21
30
193
7
78
47
108
1
30
38
14
80
7
33
83
185
6
181
0
4
25
20
539
9
13
36
12
80
94
40
0
1
38
5
3
31
50
0
22
2
9
0
29
2
6
13
69
• 38
26
43
33
15
31
67
68
2
29
20
1
19
3
23
107
20
102
16
9
137
35
6
150
4
22
9
57
0
3
14
75
15
0
23
0
1
13
156
41
188
73
244
46
192
140
1,926
2,003
0
191
4
55
0
142
41
103
13
289
46
26
126
151
77
214
384
498
6
109
20
1
19
55
30
507
59
118
221
9
64
202
204
43
112
434
412
148
197
206
199
98
262
472
596
201
145
118
49
146
59
83
652
93
1,094
1,276
306
9
629
35
227
908
56
214
49
243
0
55
39
403
378
0
41
0
4
95
329
51
849
255
239
1,239
60
240
83
320
539
67
66
514
405
80
158
40
5
109
^ Includes national and nonnational banks in the District of Columbia, all of which are supervised by the
Coraptroller of the Currency.
64
19 68 REPORT OF THE SECRETARY OF THE TREASURY
Avas granted by the Comptroller forthe conversioii of eight State banks
to national banks.
Total assets of national banks reached $265.5 billion on June 29,1968,
an increase of $23.5 billion, or 9.7 percent, during the previous 12
months. Total loans Avere $140.7 billion, compared to $130.1 billion 12
months before. EcA^ersing a persistent trend at least temporarily, time
and savings dej)osits of national banks did not groAv as fast as demand
deposits during fiscal 1968: the respective increases Avere 8.0 percent,
to $111.7 billion ^compared Avitli 9.0 percent, to $117.3 billion. Net
current operating earnings in calendar 1967 were up 5.0 percent over
the 1966 figures, Avliile net income after taxes rose 11.1 percent, reaching $1.8 billion.
Assets, liabilities,,and capital of national banks, selected dates
[In millions of dollars]
June 30, 1967
(4,780 banks)
Dec. 31,1967
(4,758 banks)
June 29,1968
(4,742 banks)
• ASSETS
Cash, balances with other banks, and cash items in process
of collection.
39,462
46,634
44,787
U.S. Government securities
Obligations of States and political subdivisions
other securities
.
29,544
27, 660
5,409
34,308
29,002
6,346
31,627
30,630
6,285
62,613
69,656
68,542
2,643
360
130,082
3,644
1,181
2,054
2,562
412
136,753
3,876
1,182
2,300
3,113
460
140, 690
3,893
1,250
2,762
242,039
263,375
265,497
Total secm'ities
.
Federal funds sold and securities purchased under agreements to resell
Direct lease financing
.
•
Loans and discounts
Fixed assets
_
Customers' habihty on acceptances outstanding
other assets
Totalassets
LlABELITIES
Demand deposits of individuals, partnerships, and corporations
Time and savings deposits of individuals, partnerships,
and corporations
Deposits of U.S. Government..
Deposits of States and political subdivisions
Deposits of foreign governments and official institutions,
central banks, and international institutions
._
Deposits of commercial banks
Certified and officers' checks, etc
Total deposits
Demand deposits....
Time and savings deposits..;.
Federal funds pm-chased and securities sold under agreements to repurchase
Liabilities for borrowed money
Acceptances executed by or for account of reporting banks
and outstanding
Otherliabilities
_
Totaliiabilities
•
80,208
92, 686
87, 595
90,488
3,367
18,466
95,104
3,297
18,511
98, 695
3,010
19,377
3,344
11,470
3,755
3,483
13,963
4,330
2,994
12,441
4,916
211,098
231,374
229,028
107, 595
103,503
123,038
108,336
117,296
111,732
3,140
279
3,182
297
4,371
• 726
1,206
7,218
1,205
7,587
1,275
9,594
222,941
243,645
244,994
1,227
1,390
CAPITAL ACCOUNTS
Capital notes and debentm'es
Preferred stock..
Commonstock.
Surplus
Undivided profits
Reserves
.
19,098
19,730
20,603
242,039
263,376
265,497
5,252
8,465
3,539
_
Total capital accounts
Total liabilities and capital accounts
585
1,235
55
5,312
8,832
3,549
747
30
_
_
59
5,505
9,000
3,840
709
ADMINISTRATIVE REPORTS
65
Resume
The change and groAvth of the Office of the Comptroller of the Currency continues its direct relationship to the groAvth and vitality of the
National Banking System. Internal operations and administration are
undergoing continual refinement and improvement to better serve the
public and the banking industry.
Bureaii of Customs
The Bureau of Customs is responsible for the assessment and collection of iniport duties and taxes and the control of carriers, persons, and
articles entering or departing the United States; for admiiiistering the
tariff and related laAvs affecting international trade and traffic; for
detecting and preventing smuggling and frauds on the reA^enue; and
for regulating A^essels in the coastAvise and fishing trades. The Customs
Service conducts a continuing program of informing the public and
•encouraging A^oluntary compliance by the international trading community with the laAvs, regulations, and controls established by Customs
and numerous other Federal agencies.
Cost reduction/management improvement program
During fiscal year 1968 this program resulted in the greatest annual
saAdngs in the Bureau's history, benefits exceeding $6,873,000. Of this
aniount, approximately $500,000 represented "cost reduction" and
$6,400,000 "cost avoidance."
A large part of the savings Avere utilized in the Customs Service to
cope Avith the constantly increasing workload Avithout adding to staff
or to expenditures.
Bureau operations
Collections.—EcA^enue collected by Customs during fiscal 1968
reached an alltime high of $2.9 billion—an 8.4-perceiit rise OA^er 1967.
This included customs duty collections, excise taxes on imported merchandise collected for the Internal EcA^enue Service, and certain miscellaneous collections. Collections and paynients by customs regions
and districts are contained in the Statistical Appendix. The major
classes of all collections made by the Customs Bureau are also sho AVH in
that A^olume. The cost of collecting each $100 Avas $3.09 compared Avith
$3.27 in fiscal 1967.
Carriers and persons entering.—Nearly 214 million persons AA^ere
subject to customs inspection during fisoal 1968, a 5.8-perceiit increase
in persons arriving and a 5.9-percent increase in carriers over fiscal
1967. (See the Statistical Appendix.)
Entries of merchandise.—Both the A^olume and A'^alue of imports
continued to climb, Avitli the A^^alue reaching $29.5 billion in fiscal 1968
conipared Avitli $26.4 billion last year—an increase of 11.7 percent. The
A'olume and type of entries handled during the last 2 fiscal years are
sliOAvii in the Statistical Appendix.
A total of 38.3 percent of all imports entering the United States
during the year Avere duty free and included comniodities imported
free for Government stockpile purposes or authorized for free eiitr}^
by special acts of Congress. The remaining 61.7 percent Avere subject to duty.
66
19 68 REPORT OF THE SEORETARY OF THE TREASURY
'{Automatic data processing.—During the year the prcxiess of pliasiiig-in the revenue and appropriation accounting system was substantially advanced. The first 6 months Avere occupied with extensive
reprograming that was required to make the system operational. ToAvard the end of the 6-month period, the systeni becanie totally operational in three regions Avitli the discontinuance of manual accounting.
TAVO more regions had been added to the system by the fiscal yearend.
The Bureau continued the system design of a computerized report
of importer's bond coA^erage, in-bond shipnient control systeni, and.
produced reports of user charges for management use.
In addition, a request for proposals Avas developed to conduct a feasibility study for' the automation of formal entry processing and merchandise control. The Bureau is also engaged in an experimental study
Avitli Pan American and Emery Air Freight to automate the clearance
of manifests on certain cargo flights at the John F . Kennedy International Airport in NCAV York.
During fiscal 1968, 30 key managers attended a 1-week A D P concepts course. A training plan for nianagement analysts, operations officers, and other technicians in the fundamentals of A D P systems design
and analysis was developed.
I n order to provide greater overall direction to the Bureau's A D P
program, a planning committee was established with the mission of
developing a long-range program for automating customs activities.
The connnittee is composed of key Bureau and field officials.
Audits.—During fiscal 1968, 319 offices were examined and 103 internal audit reports Avere made. A total of 306 commercial audits of
brokers and 39 cost systems audits (AVOOI) were made; 46,904 liq[uidations were verified taking 3,547 correctiA^e actions and an audit survey of the A D P systeni Avas completed, including its services to the
accounting functions of the customs regions. A report Avas made Avhich
pointed up the need for data control, management control, and more
effective services to regional customs accountants.
Security.—The fruits of continued efforts to improA^e the overall
Bureau security prograni becanie more apparent during the year. Inspections of Bureau headquarters and many field offices by Department
of the Treasury officials failed to disclose any major deficiencies.
Customs^ was commended on scA^eral occasions for improving its security measures.
A new category of investigation, initiated in fiscal 1967, has noAv
been evaluated. Its purpose Avas to explore and make preliminary
checks of information or allegations to insure that personnel conduct
investigations Avere not opened unless Avarranted. The category further
served as a factfinding means to inquire into broad, overall conditions
pertaining to general conduct, irregularities, and procedural matters
affecting public confidence. I t has proved beneficial both to customs
employees and management by giving added protection to the rights
of employees as Avell as eliminating unnecessary Avork caused by the
formal processing: of conduct investigations.
Publication of the Bureau of Customs "Security Manual" Avas a
major accomplishment during the year.
Equal employment opporturvliy.—During fiscal 1968 the Bureau
of Customs introduced a ncAv self-evaluation and reporting system
ADMINISTRATIVE REPORTS
67
that provides a uniform communication channel betAveen the Bureau
and field offices for the transmission of program inforniation. The plan
for the field and Bureau headquarters Avas updated to meet local needs
and resources and to encompass the Federal Avomen's prograni. The
number of minority group and female employees holding responsible
positions grew steadily.
Foreign Customs Assistance.—The largest overseas concentration
of Customs advisors continues to be in Vietnam. U.S. Customs had contracted to supply 26 men, but the number had been reduced to 16 by
the end of fiscal 1968 (because of A I D budget restrictions). Their mission Avas the institutional development of Vietnamese Customs Seryice ; the monitoring of the commercial import program; and supervision of the Societe de Surveillance, an organization under contract to
the U.S. Government performing commodity inspections of bulk
merchandise.
At the end of fiscal 1968 five teams were operating in Latin America and one man was in Liberia. One man Avas assigned to Afghanistan
and one to the Philippines.
During fiscal 1968, 32 comitries sent 171 Customs officers to the
United States for training. This training in customs techniques is
designed to enable these officers to develop more efficient customs service in their home countries, eventually enhancing the econoniic independence and viability of these countries.
Planning and research.—The installation of a comprehensive management inforniation system was begun in fiscal 1968. Eandoni time
sampling of customs activities was installed in the NCAV York and
Miami regions.
Initial study of the possibility of increasing importers' voluntary
compliance in payment of customs duties was completed in fiscal 1968
and some beneficial results were obtained. Studies also were initiated
to help determine an optimal rate of mail examination to insure adequate enforcenient and maximum revenue.
Methods for developing accurate econometric forecasts of imports,
by quantity and value, were explored to aid managenient in making
planning decisions. A model for 1-year forecasts of imports and customs collections was developed. Work on this was closely coordinated
with the Council of Economic Advisers, the Office of Business Economics, other parts of Treasury, and other interested agencies.
Facilities management.—In collaboration with the Immigration
and Naturalization Service, four employee residences were completed
in North Dakota. One border station in NCAV York, two residences in
Maine, and three residences in Montana Avere under construction or
nearing completion by the end of fiscal 1968.
A concept study for a new border station at Champlain, N.Y., Avas
reviewed and approved.
Plans for major improvements to customs facilities prepared by
GSA were reviewed for the Alaska Highway Station; Calexico, Calif.;
San Ysidro, Calif.; Douglas, Ariz.; and Massena, N.Y. Space requirements for future major facilities Avere forAvardeci to GSA for Blaine,
Wash.; Laredo, Tex.; B. & M. Bridge, BroAvnsville, Tex.; Wellesley
Island, N.Y.; and Detroit-Canada Tunnel, Detroit, Mich.
68
19 68 REPORT OF THE SECRETARY OF THE TREASURY
Personnel,—Employee organizations have increased their competi^. tion Avitli each other to organize and to secure exclusive recognition
for customs employees. Exclusive recognition Avas granted in five customs regions during the year. Petitions for exclusive recognition in
other regions and districts have resulted in four requests for formal
arbitration.
Incentive awards.—A total of 1,824 suggestions were received in
1968, of which 457 Avere adopted. The tangible savings for 1968 totaled
$147,198, and $17,350 Avas paid in awards.
There were 141 Superior Work Performance Awards and 119 Special Act or Service AAvards during the year.
Training,—Customs training during fiscal 1968 was directed toward program improvement and development. Of major significance
was the development of an "executive development program" geared
to the needs of each customs executive. The Bureau's 12-week course
for import specialists was reduced to 8 Aveeks without loss of effectiveness.. I t is estimated that savings of $7,200 per course will accrue from
this change.
The Kennedy Eound required so many changes that a major revision had to be made to the Inspectors Eate Book, whicii is also used as
a teaching tool in the Bureau's basic inspector training course. All of
the rate changes which are expected to occur during the next 4 years
are contained in the one book, thus eliminating the necessity for annual rcAdsion.
The New York Eegion I I , as a part of its orientation program, prepared letters of welcome for new employees as well as an attractive
orientation kit. A reference library of school catalogs and correspondence courses has been established with bulletins issued advising employees that this material is available. Employee development specialists have counseled interested employees.
San Francisco Eegion established a lending library of some 70 books
on management, training, personnel, psychology, and accounting Avhicli
are available to the many customs employees located at border ports.
The Los Angeles Eegion has been operating 1-day Avorkshops for
supervisors to aid them in personnel management. TAVCIVC trainingcourses were also conducted Avitli over 750 employees attending. I n the
Boston Eegion a total of 5,546 man-hours were devoted to training.
Marine,—Because of the transfer of certain functions from Customs
to Coast Guard, some statutes are to be administered by it and some by
Customs. A proposal has ibeen prepared outlining each agency's
responsibility.
Antidumping and cou/ntervailing duties,—The antidumping regulations were rewritten and consoliciated into a single part of the Customs regulations. The change was made contemporaneously with
amendnients to accommodate to the accelerated procedures of the International Anti-Dumping Code Avliich Avas adopted by the United
States on June 30, 1967, and which entered into force July 1, 1968.
An amendment to the Customs regulations (19 C F E 16.24) provides
for the issuance of a notice that a countervailing duty procedure is
being initiated to determine whether a bounty or grant is being paid or
bestowed within the meaning of 19 U.S.C. 1303.
ADMINISTRATIVE
69
REPORTS
Thirteen dumping complaints Avere received this fiscal year and 11
cases closed. Nineteen cases remained on hand at the yearend. Five
cases Avere referred to the Tariff Commission and determinations as to
injury Avere pending at the end of the year. One finding of dumping
Avas issued.
Three countervailing duty orders Avere issued during this fiscal year.
They were on canned tomato paste from France; canned tomatoes and
canned tomato concentrates from Italy; and Avelded steel Avire mesh
from Italy.
Tariff classification.—Over 8,400 Avritten replies to inquiries on tariff
classification Avere made. Of these, 435 were of sufficient importance
to be published as summaries of Bureau rulings in the "Customs Bulletin." Applications for free entry of 696 scientific instruments and
apparatus were processed.
Regulations,—T>m:v[ig fiscal 1968 major progress was mude in preparing the revised Customs regulations necessary to accurately reflect the changes brought about by the President's Eeorganization
Plan No. 1 of 1965.
Drawback,—The total drawback allowance paid during fiscal 1968
amounted to $48,634,837, as reflected in the Statistical Appendix.
DraAvback allowance on the exportation of merchandise manufactured
from impoited materials amounts to 99 percent of the customs duties
paid iat the time the goods are entered.
Among the more significant actions in the drawback field wias a
decision by the Bureau t h a t the launching of a communications satellite into orbit in outer space constitutes an exportation entitling draAvback payment on the satellite. Thus drawback, which reportedly had
its origin in the reign of Louis X I V of France (1661-1715) may be
said to have entered the space age.
A customs committee has been Avorking on plans to accelerate payment of drawback claims. A notice Avas published in the "Federal
Eegister" proposing to amend the draAvback regulations to permit the
payment of drawback claimed on the basis of estimated duties and to
eliminate the certificate of importation from the drawback program.
Protests,—Protests filed by importers against the rate and amount of
duty assessed and appeals for reappraisement filed by importers Avho
did not agree with the customs officers on the A^alue of merchandise
are shoAvn in the following table.
Protests and appeals
Protests*
Filed with district directors by importers (formal)
Filed with district dkectors by importers (informal)
Appeals for reappraisement filed with district directors
Percentage
increase, or
decrease (—)
1967
68, 260
78,189
23,907
86,419
110,913
21,010
26. 6
41.9
—12.1
Penalties,—Decisions were made on 938 penalty cases in 1968. A
total of $102,639 was paid to 57 informers for a recovery of $542,819.08
to the Govemment. The amount of penalties assessed totaled nearly
$68.5 million.
318-223—69-
70
1-9 68 REPORT OF THE SECRETARY OF THE TREASURY
Penalty cases, fiscal year 1968
Type of case
Penalty and forfeiture
Liquidated damages
<
.
Number
-
Total
Full statutory
liability of
violators
749
189
$64, 742, 841
3,727, 670
938
68,470, 411
Net liability imposed by penalty decisions, 1967 and 1968
Type of case
Penalty and forfeiture cases
Liquidated damages
Total
1967
..-..
$3,800,798
201,349
4,002,147
.
1968
$3,110,828'
149, 249
3,260,077
Restricted merchandise,—About 2,150 cases pertaining to a variety
of import restrictions, prohibitions, or controls were received and
handled. These included country of origin markings and labeling;
use of foreign convict lalbor; trademarks, copyrights and patents;
obscenity matters, contraceptive devices, and lottery and seditious
materials; birds and plumage or eggs, and wild animals; switchblade
knives; Federal and State liquor laws; and technical matters arising
mider the International Coffee Agreement.
A total of 150 trademarks, trade names (renewals and assignments)
and 44 copyrights were recorded. Fifteen patent iniport surveys Avere
initiated or reneAved.
I n litigation the U.S. Supreme Court in effect sustained the judicial
decision in loAver courts AAdiich held inadmissible imported knives
which by manipulation can be made to open automatically through
insignificant alterations, as the evidence demonstrated that a primary
purpose was for use as a weapon.
Entrance and clearance of vessels,—The following table compares
entrances and clearances of vessels for fiscal years 1967 and 1968.
Vessel movements
1967
Entrances:
Direct from foreign ports. _
Via other domestic ports...
Total.
..
Clearances:
Direct to foreign ports
Via other domestic ports
Total
.
1968
Percentage
decrease (—)
51,189
42,880
50,412
41,121
94,069
91,533
49,737
43,476
49,199
40,402
-1.1
-7.1
93,213
89,601
-3.9
-1.5
-4.1
Management aruxlysis',—A complete analysis was made of the reporting practices of the Bureau of Customs. Determinations were made
as to origin and destination of the reports, content, authority, et cetera.
I t Avas found thero were 557 reporting forms, leading to 309,357 report
ADMINISTRATIVE REPORTS
71
preparations. Nineteen reports had been eliminated by the fiscal
yearend.
Emergency Planning Manual, P a r t I, Avas completely revised and
issued to employees.
Management analysis prograni guidelines were prepared and issued
to the field.
Three regional surA^eys Avere made.
Containerization.—Public Law 89-194, approved iSeptember 21,
1965, permitted vessels of countries Avliich granted reciprocal privileges
to vessels of the United States to transport empty cargo vans and shipping tanks betAveen U.S. ports, under certain circumstances. During
the year, the Customs Eegulations were amended to provide that vessels of Ireland, Polish People's Eepublic, and France may transport
such cargo vans and tanks betAveen U.S. ports.
General guidelines Avere issued covering the entry, clearance and
coastAvise laAvs for Lash-type vessel operations. These vessels Avould
carry smaller barges in foreign trade loaded with cargo to be deliAT^ered
from or to the Lash vessels.
I n connection Avitli the entr}^, movement, and use of containers in the
United States as instruments of international traffic, guidelines Avere
established to assure compliance with the applicable laAvs and regulations. The extent to Avliich containers in intemational traffic might be
controlled and used in the United States under applicable law Avas
also studied in connection Avitli programs of international organizations to facilitate the use of containers in all countries.
I n the New York Eegion not only has the volume of cargo moving
in containers increased and become a significant aspect of their operations, but during 1968 over 40 ncAv vessels or newly redesigned vessels
for transportation of containerized cargo arriA^ed at the port of NCAA"
York, including NcAvark, N.J. I n the Los Angeles district there Avas a
30-percent increase in containerized cargo. An entirely IICAV and modern container terminal has been built and another modernized at the
port of Norfolk, Va. The port of Baltimore has three bonded container
stations in operation. A new terminal has been put into operation at
Philadelphia. Two inspectors have been assigned exclusively to container stations in San Francisco and additional assignments Avere
planned for early in fisoal 1969, Avheii major container facilities become operational. A regional container conimittee is represented at
industry meetings.
The Bureau of Customs has undertaken various progranis aimed at
coordination of customs responsibilities Avith the goal of containerization. The movement of containers has been the subject of continuing
conferences betAveen the U.S. Customs Service and the Customs services of other countries. A continuing study is underAvay in anticipation
of changes in present procedures to meet the impact of containerization.
Appraisement and collections.—The entry form Avhicli, among other
important benefits, Avill consolidate 21 existing forms, has been sent
to the field for evaluation and study. The monthly entry form is also
under study.
Mail operations.—The completion of the initial phase of the consolidation last year has led to the planning for improving existing
mail facilities in order to more efficiently meet the goals of mail proc-
72
19 6,8 REPORT OF THE SECRETARY OF THE TREASURY
essing at the port of first arrival. Plans undenvay jointly Avith the
Post Office Departnient are well established for ncAv facilities at various sites throughout the country. Preliminary planning has been
undertaken at Atlanta and Dallas. Initial planning has also been accomplished for iicAv airport mail facilities at Dallas and the SeattleTaconia Airport.
Construction Avas Avell underAA^ay at the end of fiscal 1968 for tAvo
ncAv major mail processing facilities, the IICAV Morgan Annex located
in midtown Manhattan and the other at Kennedy Airport. Both units
Avill utilize the most sophisticated mechanized mail handling and sortation equipnient. A ncAv surface mail facility at Oakland was under
construction at the fiscal yearend and the IICAV airport facility at Los
Angeles Avas to open shortly.
A mechanized parcel handling system Avas installed at Washington,
D . C , and the updating of the mechanized systeni at Chicago is in
process.
During fiscal 1968, the nuniber of foreign mail parcels rose 1.9 percent from 55,052,498 to 56,126,729. The addition of 72 positions in the
mail divisions during the year helped to raise the number of mail entries written from 1,549,231 to 1,855,550, or 19.7 percent.
Commodity specialization.—One of the most significant features of
the 1965 reorganization AA^as the introduction of commodity specialization whicii unified the chain of command for the clearance and assessment of duties on imported merchandise. During fiscal 1968 an
appraisement task force produced "Fundamentals of Duty Assessment," an excellent manual of instruction for iniport specialists. Based
on this ncAv text, a full-time 8-Aveek prograni of instruction has been
completed.
The Bureau participates in international and interagency affairs
as the Government's representative in the cotton textile arrangement.
It collects information, meets with other agencies, supplies written
rulings, esta;blislies and coordinates import controls, takes steps to
prevent transshipment of restrained textiles, and has established a
special procedure to identify di fferences of opinion regarding the classification of cotton textile imports from Hong Kong.
With respect to importecl motor vehicles, the Bureau is responsible
for the administration of the Motor Vehicle Air Pollution Control Act
and the National Traffic and Motor Vehicle Safety Act. Eegulations
Avere coordinated Avith the Department of Health, Education, and
Welfare, the Depaitment of Transportation, and other offices of the
Department of the Treasury prior to the issuance of instructions to
the field of IICAV standards governing such vehicles.
The Canadian Quer}^ Prograni is designed to assist Canadian firms
to arrive at a better understanding of U.S. Customs laAvs. During 1968,
a total of 36 inquiries Avere processed.
The continuing embargo on all goods of Cuban origin Avas the basis
for special procedures regarding tobacco and tobacco products. A
total of 23,831 special samplings of tobacco and 1,069 of cigars suspeoted of being made in Cuba AA^ere handled in 1968.
Quotas.—During the year 110 absolute and tarift'-rate quotas Avere
administered, uncier specific Presidential proclamation and legislation. TAVO quotas Avere iniposed under the International Coffee Agree
ADMINISTRATIVE REPORTS
73
ment Act of 1965; five under the Philippine Trade Agreeanent Act
of 1955, and 158 involving 16 foreign coimtries iniposed under the
Long-Term Cotton Textile Arrangement. Presidential Proclamation
3856, dated June 10, 1968, resulted in the establislniient of 10 absolute
quotas on milk and cream, condensed or evaporated, administered on
a country allocation system.
Fibers administration.—In striving for uniformity in identification,
grade, and conditions of AVOOI imports, 9,076- reports Avere analyzed
during the year. Samples of AVOOI submitted for an opinion as to
identity, condition, grade, and yield totaled 612. There Avere 462 samples of manmade fibers and Avaste samples, plus samples of w^ool
Avastes, examined for opinions on identity, advisory classificatioii and
quota status. I n addition, a total of 34 raw cashmere and raw camel
hair samples were received from official gOA^ernment agencies in the
United Kingdom and Belgium.
Customs districts are advised on the classificatioii of those products
processed from duty-free AVOOI under the Tariff Schedules.
Backlogs of entries and invoices,—Total invoices received during
1968 increased 5.5 percent from 3,981,806 ^ to 4,201,102. During this
period the backlog of invoices on hand increased 21.6 percent from
317,935 to 386,495 due in part to the increased workload and in part
to personnel shortages resulting from year-long budgetary restrictions. Increases in the backlog occurred in all regions except Miami
and New Orleans.
The backlog of miliquidated entries continued to be reduced during 1968. The overall percentage decrease was 3.2 percent Avitli the
largest decline occurring in Eegion IV, Miami. The 1967 backlog was
935,076 and the 1968 backlog 904,987. A total of 2,398,175 entries were
filed.
Customs Information Exchange,—There were 2,209 catalogs, price
lists, and other value data of foreign manufacturers and shippers received, reproduced and disseminated by the C L E . during the period
under review. A total of 172 foreign and local inquiry reports were
processed. Two hundred ninety-two advance reports Avere received
from various import specialists.
Also, there AA^ere 861 reports lof value changes sent to district directors of ports Avliere similar shipments Avere received.
Export control.—Export control procedures Avere reviewed. The
monthly export declaration previously applicable only to the motor
companies in the port of Detroit Avas expanded to all ports on the
Canadian border. Studies are being made to establish methods to* make
this system available to other exporters.
The Bureau of Customs participated Avitli the Bureau of Census
and the Office of Export Control in a project whicii resulted in the
elimination of the requirement for filing shipper's export declarations
for shipments valued at less than $100.
Laboratories.—A total of 160,315 samples Avere analyzed by the
laboratories in 1968 compared to 143,577 in 1967. There were 21,368
samples taken from customs seizures, mostly narcotic drugs and other
'• Revised.
74
1-9 6,8 REPORT OF THE SECRETARY OF THE TREASURY
prohibited articles; 130 samples of ncAv types of merchandise analyzed
to dcA^elop facts on Avhicli to base tariff' classifications; and 14,027
samples tested on behalf of other Government agencies.
During 1968 customs chemists spent 2,686 man-hours in court testifying as expert witnesses in cases Avhere their testimony was required
to present technical facts needed by the Government. The majority of
their time Avas spent on narcotic cases.
The policy of equipping laboratories Avitli advanced analytical
instruments continued during 1968. Among the major items acquired
Avere: X-ray spectrograph; ultraviolet spectrophotometer; infrared
spectrophotometer; emission spectrograph Avith accessories; gas
chromatograph Avith accessories; ultraviolet-visible spectrophotometer ; and an electrolytic analyzer.
Work continued on methods to analyze multicomponent blends of
textile fibers; and iniproved methods of fluorspar analysis are also
under development.
Tentative approA^al Avas granted for the use of a 20,000-pound capacity tank scale of the Sazerac Co., Inc., NCAV Orleans, La., for determining the dutiable quantities of distilled spirits.
International conferences.—Customs Bureau officials represented the
United States as delegates or observers at meetings of the Permanent
Technical Committee of the Customs Cooperation Council at Brussels,
Belgium; the Inland Transport Committee and its subsidiary organs
of the Economic Commission for Europe at Geneva; and the Working
Group on Facilitation of the Intergovernmental Maritime Consultative Organization. Documentation Avas drafted for presentation to the
Seventh Session of the Facilitation Divisioii of the International Civil
Aviation Organization held at Montreal.
Improved service to the public.—In keeping with the administration's policy of improving service to the traveling public and niaking
foreign visitors feel welcome, the four inspectional agencies. Customs,
Public I-Iealth Service, Immigration and Naturalization, and the U.S.
Department of Agriculture, jointly initiated a "One-Stop" inspection
systeni, at the comitry's number one air gatcAvay—the John F . Kennedy International Airport at New York, and at San Antonio, Tex.,
early in June.
The systeni, proposed after a study by a special port of entry task
force representing the four agencies, Avas designed to cope with the
sharp rise in international travel occasioned by the oncoming use of
"jumbo jet" aircraft. I t provides for examination by a single officer
for the four inspectional agencies and is backed by necessary monitoring and secondary operations by specialists from each agency.
President Jolmson praised the system and announced that the clearance time for the average passenger arriving at Kennedy International has been reduced from 45 minutes to 15 minutes.
Besides speeding up clearance procedures, the new system has
resulted in better enforcement especially by Customs and Agriculture.
More rapid handling of merchandise and more prompt release of
shipments to importers Avere achieved throughout the Customs Service
during fiscal 1968.
ADMINISTRATIVE REPORTS
75
The headquarters office of the Alaska district Avas moved from
Juneau to Anchorage in order to facilitate Avork in that district.
Studies were made that led to the establishment of Washington, D . C ,
as a separate district on July 1,1968.
Public information.—The increasing demands on the Customs Service to process people and merchandise Avere reflected in the need for
an intensified and somewhat expanded information program. The
major themes emphasized Avere that the Bureau is adapting its organizational structure to make it more responsive to the needs of the
people; that customs laAvs require voluntary compliance; and that
customs is cooperating in making foreign visitors feel Avelcome.
During the year thousands of inquiries received from the public
by phone or by mail were satisfied. Queries from Avriters, editors, radio
and T V commentators, and authors of books and magazine articles
Avere handled with the assistance of technical specialists at the Bureau
and in the field. An occupational brief on "Customs Workers" Avas
prepared for Science Eesearch Associates.
The Bureau issued a new edition of "U.S. Customs & You," designed
especially for students studying governnient, whicii received wide distribution in schools throughout the country. A booklet, "The Customs
Story," designed for adults interested in customs Avas also produced.
New publications included a Chinese language edition of "Customs
Hints for Nonresidents;" a Spanish language edition of "Custoins
Hints for Eeturning Eesidents" (abbreviated) ; "Import Quotas;"
and a folder "Why Your Import Is Detained!"
A poster on the dangers of importing harmful pests in fruit and
meat was suggested by a customs inspector, and the Department of
Agriculture prepared the poster, whicii Avas distributed throughout
the Customs Service.
"Customs Today" was issued regularly to all customs employees; and
a sampling of news items about customs Avas sent to all offices via
"Press Digest."
Investigative activities
The Customs Agency Service is the primary enforcement arm of the
Bureau. During fiscal 1968 extensive improvements and modernization were made in its radio communication system. A radio "link"
system Avas designed and equipment purchased for the Southern
California area Avliich will provide two-Avay communications among
and between official vehicles and offices in Calexico, San Ysidro, San
Diego, and Los Angeles. A complete radio systeni Avas established in
Corpus Christi, Tex. A 23-foot motorboat seized in Miami was forfeited to the Government and assigned to the office of the customs
agent-in-charge. Corpus Christi, Tex., for official use. The Miami,
Fla., office acquired a 40-foot boat Avhich was assigned for official use
to San Juan, P.E.
A German shepherd dog trained to detect the odor of marihuana
Avas used on an experimental basis along the Mexican border. The dog
proved effective in detecting marihuana in automobiles and in mail
packages, and a number of seizures Avere made with his assistance.
76
1.9 6 8 REPORT OF THE SECRETARY OF THE TREASURY
Arrests.—The folloAving table SIIOAVS the number of arrests and dispositions during the last 2 fiscal years.
Fiscal years
Activity
1967
Persons under or awaiting indictment at begirming of year.
Arrests
Turned over to other agencies
Prosecutions dechned
Not indicted
C onvictions _ _
Dismissals and acquittals.
Nolle prossed
Persons under or awaiting indictment at end of year
1968
1,382
3,374
1,009
464
12
1,137
179
78
1,877
1,887
4,343
1,164
596
11
1,316
346
157
2,640
Percentage
increase, or
decrease (—)
36.5
28.7
15.4
28.4
-8.3
15.7
93.3
101.3
40.6
Cases investigated.—The number and types of cases investigated
under customs, navigation, and relaited laws enforced by Customs increased 3.7 percent over fiscal year 1967, from 26,993 cases to 27,989.
as slioAvii in the Statistical Appendix.
Seizures.^ general.—There were 28,566 seizures made during the year,
excluding narcotics and marihuana.
Seizures^ narcotics and marihuana.—An alltime record in seizures
of heroin, cocaine, and marihuana Avas established in fiscal 1968. The
amount of heroin seized Avas up 215 percent OA^er 1967, cocaine was up
143 percent, and marihuana at OA^er 35 tons represented an increase of
166 percent.
I n achicAdng these results customs agents conducted 9,226 narcotic
investigations, 1,980 more than last year. Arrests increased from 3,374
to 4,343, an increase of 969. There were 179 more convictions, up from
1,137 to 1,316. The majority were along the Mexican border in the
PIouston, Tex., and Los Angeles, Calif., regions.
The folloAving table gwes the deitails of narcotic and marihuana
seizures.
Fiscal years
Seizures
Narcotic drugs (weight in grams):
Heroin
Number of seizures. Rawopium
Number of seizures
Smokingopium
.
Number of seizures
Others.
...-.
Number of seizures
Marihuana: '
Bulk (grams).
Number of seizures...
Cigarettes ( n u m b e r ) . . . . . . . .
Number of seizures...
1967
.-.
1968
Percentage
- increase, or
decrease ( - )
35,323
225
2,036
9
2,400
7
18,304
291
111,741
265
1,043
6
6,496
15
44,325
259
216.3
17.8
-48.8
—33.3
129.0
114.3
142.2
-11.0
11,935,431
1,081
1,829
334
31,847,395
2,010
20,802
440
166.8
85.9
1,037.4
31.7
Dangerous drugs.—Fiscal 1968 Avas the first year that uniform statistics Avere maintained for seizures of dangerous drugs. Quantities are
expressed in five-grain units, and no attempt has been made to differentiate between stimulants consisting principally of amphetamines
and depressants, the barbiturates, tranquilizers, etc. During the year
525 seizures Avere made, comprising 3,936,800 units, most of which Avere
made on the Mexican border.
ADMINISTRATIVE
77
REPORTS
Seizures.^ merchandise.—Customs seizures for various violations of
customs laAvs by number and A^alue are sliOAvn in the Statistical
Appendix.
Foreign trade zones
Customs duties and internal revenue taxes collected during fiscal
1968 in the nine zones in operation amounted to $12,505,862.
The boundaries of Foreign Trade Zone No. 9 at Honolulu, Hawaii,
occupying an area of approximately 82,571 square feet on pier 39,
have been expanded to include an additional 23,060 square feet of
covered space contiguous to the primary zone.
The folloAving table summarizes foreign trade zone operations dur-
ingfiscal1968.
Number
of
entries
Trade zone
New York
New Orleans..
San Francisco San Francisco (subzone)...
Seattle
Mayaguez
Penuelas (subzone)
Toledo.
Honolulu
4,261
5,081
908
427
594
574
18
173
1,878
•
Eeceived in zone
Long
tons
22,175
27,688
4,156
95
1,240
526
368, 552
26, 749
5,144
Value
$37,039, 602
24, 590, 382
6, 684, 032
392,076
2,055, 557
898, 607
6, 364,839
12, 090, 307
3, 754, 079
Delivered from zone
Long
tons
22,638
25, 375
4,553
75
970
655
232,986
28, 084
4.840
A^alue
$37,162,874
26,942,406
7, 755, 934
449, 237
1,914, 205
1,793,333
11,122, 748
12, 644,206
2, 525,145
Duties and
internal
revenue
taxes
collected
$5,885, 741
2, 509, 266
467, 596
131, 780
177, 810
117, 369
212, 555
2, 816, 685
187,060
Cost of administration
Customs operating expenses aniounted to $93,952,853, including export control expenses ^aiid the cost of additional inspection reimbursed
by the Department of Agriculture.
The following table shows man-year employment data in the fiscal
years 1967 and 1968.
Operation
Regular customs operations:
Nom'eimbursable
Reimbursable i
Total regular customs employment
Export control
Additional inspection for Department of Agriculture.
Man-years
1967
Man-years
1968
Percentage
increase, or
decrease (—)
1,093
1,103
432
8, 501
226
262
8,535
220
271
0.1
5.9
.4
-2.7
3.4
9,026
.4
Total employment
1 Salaries reimbursed to the Government by the private finns who received the exclusive services of
these employees.
Office of Director of Practice
The Office of the Director of Practice is a part of the Office of the
Secretary of the Treasury and is under the immediate supervision of
the General Counsel. Pursuant to the provisions in Treasury Department Circular No. 230 (31 C F E , Pt. 10), the Director of Practice
institutes and provides for the conduct of disciplinary proceed-
78
1.9 68 REPORT OF THE SECRETARY OF THE TREASURY
ings against attoriieys, certified public accountants, and enrolled agents
who are alleged to have engaged in disreputable conduct or who are
alleged to have violated the rules and regulations regarding practice
before the Internal Eevenue Service. The Director of Practice also
exercises jurisdiction, as the first level of administrative appeal, in
those cases Avhere the Commissioner of Internal Eevenue denies an
application for enrollment to practice before the Internal Eevenue
Service made by persons seeking enrollment pursuant to section 10.4
of Circular 230.
On July 1,1967, there were 78 cases pending in the Office under active
review and evaluation, tAvo of which Avere awaiting presentation bef ore
a hearing examiner. During the fiscal year, 117 ncAv derogatory information cases were received. Disciplinary action was taken in 44
cases, either by the Office or by order of a hearing examiner. These
44 actions consisted of one order of disbarment, 20 suspensions, 19
reprimands, and four instances where resignations Avere accepted from
enrolled agents to terminate their eligibility to practice before the
Internal Eevenue Service. The 44 actions affected eight attorneys, 23
certified public accountants, and 13 enrolled agents.
Seven proceedings for disbarment or suspension Avere initiated before a hearing examiner during fiscal 1968. Including the tAvo cases
remaining on the examiner's docket from the previous fiscal year,
there were nine cases before the examiner during fiscal 1968. Decisions
Avere rendered in five of these cases. I n one case heard involving a certified public accountant the examiner issued an initial order for disbarment. I n the remaining cases heard, the examiner issued. initial
orders for suspension from practice before the Internal Eevenue Service. I n one case a motion by the Director of Practice to dismiss the
proceeding was granted by the examiner. As of June 30, 1968, three
cases were pending on the examiner's docket, one of which had been
heard by the examiner and Avas aAvaiting decision at the end of fiscal
1968. As of June 30,1968, 50 derogatory information cases Avere pending under active review and evaluation in the Office.
During the fiscal year one applicant appealed to the Director of
Practice the denial of his application for enrollment by the -Commissioner of Intemal Eevenue. The decision on appeal Avas pending
as of June 30,1968.
Office of Domestic Gold and Silver Operations
The Office of Domestic Gold and Silver Operations, in the Office of
the Under Secretary for Monetary Affairs, assists the Under Secretary in the formulation, execution, and coordination of policies and
programs relating to gold and silver in both their nionetary and commercial aspects. The Office administers the Treasury Department gold
regulations relating to the purchase, sale, and control of industrial
gold, gold coin, anci gold certificates; issues licenses and other authorizations for the use, import and export of gold, and for the importation
and exportation of gold coin; receives and examines reports of operations; investigates and supervises the activities of users of gold; and
administers the silver coin regulations relating to the melting, treating,
and export of silver coins of the United States. Investigations into
ADMINISTRATIVE REPORTS
79
possible violations of the gold regulations and the silver coin regulations are coordinated with the U.S. Secret Service, the Bureau of
Customs, and other enforcement agencies.
Gold
Purchases of gold for industrial use from the Treasury,—The gross
sales of gold, not including scrap gold exchanges or deposits, for industrial use by the Treasury increased in the calendar year 1967 to
6,294,000 fine troy ounces, as compared to 5,585,000 fine troy ounces
in calendar year 1966, 4,691,000 fine troy ounces in calendar year 1965,
and 3,665,000 fine troy ounces in calendar year 1964. The increase in
sales by the Treasury in calendar year 1967 was largely due to the
smelters and refiners strike during the last half of 1967 Avhen the Treasury Avas virtually the only domestic source of gold for industrial use.
Sales of gold by the Treasury for industrial use and purchases from
the private market were terminated on Marcli 18,1968, pursuant to the
Communique issued on Marcli 17 by the Governors of the Central
Banks of Belgium, Germany, Italy, the Netherlands, SAvitzerland, the
United Kingdom, and the United States.^
Gold coin licensing,—The number of gold coins licensed by the
Treasury decreased in the calendar year 1967 to 4,313 gold coins, as
conipared with 8,633 gold coins licensed in the calendar year 1966. The
decrease in the nuniber of gold coins licensed reflects the fact that 1966
Avas the last year in Avliich licenses were issued for the importation of
South African gold coins. The number of gold coins licensed in the
first half of calendar year 1968 increased to 10,513 gold coins.
Licensing of gold dealers.—In order to encourage the establishment
of a private trading function in the niarket to bridge the gap between
industrial users of gold and producers and sellers of gold following
the termination of Treasury dealings in the private market on Marcli
18, 1968, the Office of Domestic Gold and Silver Operations issued
licenses to banks and commodity firms whicii because of resources, past
business experience and strategic location Avere in a position to perform this service. From March 18,1968, until the end of the fiscal year,
the Office issued 22 such licenses.
E n d uses of gold.—End-use certificates Avith detailed information
concerning the end use of gold continued to be required through the
calendar year 1967. The estimated allocation by industrial use for 1967
is sliOAvn in the table below.
Estimated industrial use of gold in the United Staies in calendar year 1967
Fine
ounces
Jeweky and arts
Dental
.
Industrial, including space and defense...
Total...
^ See exhibit (
.
Dollars, based
Percent
on $35 per
ounce
3,840,000
566,000
1,888, 000
134,400,000
19,810,000
66, 080, 000
61
9
30
6,294,000
220,290, 000
100
80
19 68 REPORT OF THE SECRETARY OF THE TREASURY
Silver
On July 14, 1967, silver sales to domestic industrial users at $1.29
per fine troy ounce were suspended by the Treasury.^ Since then Treasury silver has been sold for domestic industrial use at going niarket
rates on the basis of competitive sealed bids at a rate not exceeding 2
million ounces a Aveek. Such sales have been conducted by GSA as
agent for the Treasury.^ Through June 30, 1968, 98 million ounces of
silver were sold in this manner at a profit to the Government of
$55,145,000. On June 24,1968, pursuant to Public Law 90-29 approved
June 24,1967, the right of holders of silver certificates to redeem them
for silver came to an end, thus freeing all remaining Treasury silver
for other uses. On June 2)5,1968,165 million ounces of silver was transferred to the National Defense Stockpile as required by Public Law
90-29.^ All of this silver was 0.999 fine. Treasury silver holdings at the
end of the fiscal year, including the silver in coin inventories, amounted
to approxiniately 300 million fine troy ounces.
Bureau of E n g r a v i n g and P r i n t i n g
The Bureau of Engraving and Printing is responsible for manufacturing U.S. paper currency, various public debt instruments, and most
other CAddences of a financial character issued by the Govemment, such
as postage and internal rcA^enue stamps, food coupons, and military
paynient certificates. I n addition, the Bureau prints commissions, certificates of awards, permits, and a wide variety of other miscellaneous
items. The Bureau also executes certain printings for various territories administered by the United States.
On October 8, 1967, Mr. Henry J. HoltzclaAv retired as Director,
after 50 years of dedicated service in the Bureau. By Treasury Order
No. 210,* Mr. James A. Conlon was designated Director, effective October 9, 1967. Under the IICAV directorship, the Bureau has continued
to pursue the vigorous technological improvement prograni initiated
earlier and has introduced new studies and innovations designed to increase the efficiency and economy of its administrative and production
operations.
Management attainments
Among significant actions Avas a major reorganization, effected on
February 15, 1968. All Bureau progranis Avere grouped, functionally,
under eight staff offices, each office being headed by a chief responsible
to the Director for the direction of assigned activities. Office titles are:
Administrative Services, Engineering, Engraving, Financial Management, Industrial Eelations, Manufacturing, Eesearch and Technical
Services, and Security and Audit.
Eesponsibility for custody of unissued Federal Eeserve notes, formerly exercised jointly by the Comptroller of the Currency and the
1 See exhibit 64.
2 See exhibit 65.
3 See 1967 a n n u a l report, p. 400.
^ See exhibit 69.
ADMINISTRATIVE REPORTS
81
Treasurer of the United States, Avas transferred to the Bureau, effective April 19, 1968.^ As a means of insuring proper coordination and
integration of this function with Bureau policies and methods, a management survey of the operations in the Federal Eeserve Vault has
been initiated.
On April 17,1968, the Bureau completed the program of converting
the printing of currency by the dry-print method to its high-speed
intaglio printing presses, thereby ending production of currency by
the old, Avet ]3rocess. I t is conservatively estimated that additional
annual savings, representing 29 direct-labor man-years Avith a related
cost savings of $250,000, were realized from this project in 1968. Currency production in fiscal 1968 exceeded that of 1967 by 120,920,000
notes, and the low miit cost rate of $8.14 per thousand notes achieved in
1967 Avas maintained, despite an overall rise in the cost of operations
brought about, primarily, by increases in the cost of labor and
niaterials.
The production of postage stamps comprises the Bureau's second
major Avork program. During the 3-montli period from December 1967
through February 1968, the Bureau successfully met the unprecedented
demands for postage stamps resulting from the increase in postal
rates which became effective January 7, 1968. Approxiniately 7,200
million stamps Avere delivered during the first month the increased
rate Avas in effect. This represented 20 percent of the total number of
postage stamps delivered inthe entire fiscal year.
The Bureau realized annual savings estimated at 3 man-years and
$20,000 in fiscal 1968 by correcting technical difficulties that were
experienced in the conversion of the printing of Treasury bills to the
dry intaglio process on high-speed rotary presses, a prograni reported
in 1967. Having completed the conversion in the method of printing
Treasury bills, the Bureau focused attention on converting the printing
of the 10-coupon and 14-coupon Treasury notes from the wet to the
dry method. Based on the number of notes printed by the new method,
an annual savings of $88,000, representing 11 man-years, Avas realized
in fiscal 1968. The balance of the estimated annual savings of $140,000,
or $52,000, is anticipated in fiscal 1969.
Throug4i the continuance of certain management actions initiated
and reported last year, the Bureau realized in fiscal 1968 additional
savings of $10,000 from the revised procedure for manufacturing the
green ink used in printing currency backs and annual savings of
$11,000 from research and engineering work leading to changed criteria
for the acceptability of phosphor-tagged postage stamps.
Savings of 1 man-year and $5,000 Avere realized from the installation of "self-ink" numbering blocks on three currency overprinting
presses, Avliich release the pressmen from a great deal of makeready
time previously required for inking in the numbering blocks. Additional savings are anticipated from this project, inasmuch as it is
1 See exhibit 69.
82
19 6 8 REPORT OF THE SECRETARY OF THE TREASURY
planned to continue the installations until 13 presses are so equipped.
As a result of an industrial engineering study, annual savings of
2 man-years and $16,000 Avere realized from changes made in coil stanip
boxing operations.
Continuing the special expenditure reductioii efforts directed by the
President in 1966; the Bureau realized annual recurring savings of
2 man-years and $11,000 and one-time savings of $211,000 in fiscal
1968. Full utilization Avas made of the Federal excess property program in fulfilling procurement needs.
Estimated annual recurring savings representing 7 man-years and
$85,000 and one-time saAdngs of $4,000 Avill accrue to the Bureau as a
result of suggestions adopted in fiscal 1968. Also, it is estunated that
one-time savings of $65,000 and 11 man-years were realized in fiscal
1968 through the sustained superior Avork performance phase of the
incentives awards program.
I n the interest of maintaining efficient and economical operations,
the Bureau has carried on intensive research, engineering, and deve;lopmeiit activities and a continuing program of production and quality
control studies. During fiscal 1968, 59 reports of audit, containing 83
recommendations for consideration by various levels of management,
Avere released by the Bureau's internal auditors. Actions taken during
the fiscal year resulted in the clearing or dropping of 101 reconimendations. There Avere 19 recommeiidations outstanding at the end of the
year.
Constant attention has been focused throughout the year on improving communications and services to the public. A reevaluation
Avas made of policies and procedures relative to the Bureau's activities
in response to requests received for numismatic and philatelic exhibits
and displays. Efforts have been directed toAvard giving maximum
cooperation in honoring requests, and, at the same time, providing
adequate security for products exhibited and economical costs in operations. The Bureau participated in a nuniber of SIIOAVS during the year,
proAdding display ! frames, photographs of Bureau operations, and
miscellaneous exhibit engravings. Bureau representatives were present
at shows to ansAver questions regarding the Bureau and its activities
and to distribute selected pamphlets and other descriptive handouts.
This participation has been enthusiastically received and has resulted
in very favorable ncAvs media coA^erage.
During the year, 541,446 visitors took the self-guided tour to view
Bureau operations. Cards are provided at the end of the tour, askingvisitors for comments or suggestions to improve the tour. As another
point of interest, display frames have been erected on the visitors' gallery to exhibit samples of the portraits, seals, and other prints produced
by the Bureau and available for sale to the public.
Various programs have been undertaken in the interest of improv-
ADMINISTRATIVE REPORTS
83
ing employee-management relations. Significant aniong these was a
total revamping of the noncraft, nonsupervisory. Wage Board promotion policy, which provided realistic standards, broader areas of opportunity, and a system more responsive to staffing needs at operating
levels. Another action contributing to improved employee relations is
the periodic issuance of an "Employees' Newsletter." The initial issue
distributed on October 19, 1967, marked the beginning of a program
Avhich emphasizes improved internal employee communications. To
promote the equal employment opportunity program, a series of seminars was initiated for all Bureau supervisory personnel so that they
might exchange views and recommend improvements in the program.
Employee Equal Employment Opportunity Committees have been
formed to develop a climate of understanding and a positive means of
communication between management and employees. This active,
continuing program has been most effective.
Significant progress is reported in the area of craft training opportunities. On the basis of anticipated manpower needs for journeyman
craftsmen, there have been established trainee or apprenticeship programs in 16 distinct craft categories. A t the close of fiscal 1968,11 of 30
trainees had been promoted to journeyman status in the plate printer
craft.
The Bureau engages primarily in on-the-job training to meet staffing
needs. I t uses both interagency and non-Government sources as a
means of keeping employees abreast of technological advances and
maintaining proficiency in specialization. I n fiscal 1968, 98 employees
completed Bureau or departmental training; 51 employees completed
interagency training courses; and 84 employees attended specialized
conferences, seminars, or training classes sponsored by non-Government
organizations.
Total estimated savings from cost reduction and management
improvement efforts during fiscal 1968 approximate $496,000 on a recurring amiual basis and $280,000 on a one-time basis. All savings
realized are applied against the cost of products produced and are reflected in doAvuAvard adjustments in products costs and passed on to
customer agencies.
New issues of postage stamps and deliveries of finished work
New issues of postage stamps delivered by the Bureau in fiscal 1968
are slioAvn in the Statistical Appendix. A comparative statement of
deliveries of finished work for the fiscal years 1967 and 1968 also
appears in that volume.
Finances
Bureau operations are financed by reimbursements to the Bureau of
EngraAdng and Printing fund, as authorized by law. Comparative
financial statements follow.
84
1,9 68 REPORT OF THE SECRETARY OF THE TREASURY
Statement of financial condition June 30, 1967 and 1968
Assets
June 30, 1967 June 30, 1968
Cash with'the Treasury
Accounts receivable.-.
Inventories: ^
Finished goods.
Work in process.
Raw materials....
Stores
Prepaid expenses
...
Total current assets.
Fixed assets: 2
Plant machinery and equipment
Motor vehicles...
Officemachines
Fm-niture and fixtures.
Dies, rolls, and plates...
Building appurtenances
Fixed assets under construction
:
Less accumulated depreciation
Excess fixed assets (written down to 30% of book value)
Total fixed assets....
Deferred charges
Totalassets
Liabilities ahd investment of the United States
Liabilities:
Accounts payable
Accrued liabilities:
Payroll.
Accrued leave...
Other
Trust and deposit liabilities.
Otherliabilities
$5,540,167
2,042,903
$4,279,538
3,848,078
2,108,080
3,813,874
1,260,832
1,215,127
157,317
2,039,725
3,211,602
1,475,126
1,211,096
131,705
16,138,300
16,196,770
22,400,970
160,744
276,905
459,933
3,955,961
3,399,562
41,472
22,063,604
160,744
313,374
484,681
3,955,961
3,449,951
203,630
30,695, 547
15,923,659
30, 621,845
16,548,234
14,771,888
14,073,611
4,343
8,051
14,776,231
14,081,662
85,523
89,117
31,000,054
30,367,549
1,816,017
664,312
931,610
1,861,391
160,748
1,156,462
343
1,094,516
2,041,457
177,340
1,367,399
307
6,926,471
6,245,330
3,250,000
22,000,930
3,250,000
22,000,930
26,250,930
-176,347
26,250,930
-128,711
Total investment of the U.S. Government
25,074, 583
25,122,219
Total liabilities and investment of the U.S. Government..
31, 000, 054
30,367, 649
Total liabilities 3
Investment ofthe U.S. Goverrmient:
Appropriation from U.S. Treasm-y
Donated assets, net
Accumulated earnings, or deficit ( - ) *
1 Finished goods and work In process inventories are valued at cost, including administrative and service overhead. Except for the distinctive paper which is valued at the
acquisition cost, raw materials and stores inventories are valued at the average cost of
the materials and supplies on hand.
2 Plant machinery and equipment, furniture and fixtures, office machines, and motor
vehicles acquired on or before June 30, 1950, are stated at appraised values. Additions
since June 30, 1950, and all building appurtenances are valued at acquisition cost. The
act of Aug. 4, 1950 (31 U.S.C. 181a), which established the Bureau of Engraving and
Printing fund, specifically excluded land and buildings valued at about $9,000,000 from
the assets of the fund. Also excluded are appropriated funds of about $6,784,000 expended
or transferred to GSA; for extraordinary expenses in connection with uncapitalized
building repairs and air conditioning. As of June 30, 1968, fixed assets included $7,405,034
of fully depreciated items, principally plant machinery and equipment and building
appurtenances. Dies, rolls, and plates were capitalized) at July 1, 1951, on the basis of
average unit costs of manufacture, reduced to recognize their estimated useful life. Since
July 1, 1951, all costs of dies, rolls, and plates have been charged to operations in the
year acquired.
3 In addition, outstanding commitments with suppliers for unperformed contracts and
undelivered purchase orders totaled $6,393,232 as of June 30, 1968, as compared with
$6,330,312 at June 30, 1967.
* The act of Aug. 4, 1950, provided that customer agencies make payment to the Bureau
at prices deemed adequate to recover all costs incidental to performing work or services
requisitioned. Any surplus accruing to the fund in any fiscal year is to be paid into the
general fund of the Treasury as miscellaneous receipts except that any surplus is applied
first to restore any impairment of capital by reason of variations between prices charged
and actual costs.
ADMINISTRATIVE REPORTS
85
Statement of income and expense, fiscal years 1967 and 1968
Income and expense
Operating revenue: Sales of engraving and printing.
1967
1968
$33, 640, 752
$39,221, 724
13,919,731
5,601,621
16,016,960
6,037,230
238,261
19,521,352
22,292,461
9,263,233
1,428, 698
316,609
1,666,056
579,145
455,147
1,853,258
229,384
73,242
103,060
10,032,220
1, 718,343
410,567
1,834,383
759,145
681,200
1,665,276
60, 277
Total overhead
15,967,722
17,168,303
Total costs 1
36,489,074
39,460,754
150,381
570, 064
314,804
642,589
Operating costs:
Cost of sales:
Directlabor..
Direct materials used
Contract printing (postage stamps)
Prime cost
Overhead costs:
Salaries and indirect labor
Factory supplies
Repair parts and supplies
Employer's share personnel benefits
Rents, communications and utilities.
Other services..
Depreciation and amortization
Gains (—), or losses on disposal or retirement of fixed assets...
Fire loss
Sundry expense (net)
• Less:
Nonproduction costs:
Shop costs capitahzed-.-.
Cost of miscehaneous services rendered other agencies.
Cost of production
Net increase (—), or decrease in finished goods and work in process
inventories from operations
Costofsales
Operating profit or loss ( - )
Nonoperating revenue:
Operation and maintenance of incinerator and space utilized by other
agencies
0ther direct charges for miscellaneous services
Nonoperating costs:
Cost of miscellaneous services rendered other agencies
Net profit or loss ( - ) for the year 2....
116,892
720,446
967,393
34,768,629
38,503,361
-1,126,366
670,727
33,642,263
39,174,088
-101,511
47,636
496,105
73,959
610,941
131,648
570,064
642,589
670,064
-101, 611
642,689
47,636
1 No amounts are included in the accounts of the fund for (1) interest on the investment ofthe Government
in the Bureau of Engraving and Printing fund, (2) depreciation on the Bureau's buildings excluded from the
assets of the fund by the act of Aug. 4,1950, and (3) certain costs of services performed by other agencies on
behalf of the Bureau.
2 See preceding table, footnote 4.
318-223—69-
86
19 68 REPORT OF THE SECRETARY OF THE TREASURY
Statement of source and application of funds, fiscal years 1967 and 1968
Funds provided and applied
Funds provided:
Sales of engraving and printing
Operation and maintenance of incinerator and space utilized by other
agencies.
0ther direct charges for miscellaneous services
Total
Less cost of sales and services (excluding depreciation and other charges
not requiring expenditure of funds: Fiscal year 1967, $2,082,642; fiscal year
1968, $1,716,553)
Sale of surplus equipment
Total funds provided
Funds applied:
Acquisition of fixed assets
Acquisition of experimental equipment; and plant repairs and alterations
to be charged to future operations
Increase in working capital _
.
Total funds applied
1967
1968
$33,540,762
$39,221,724
496,106
73,959
510,941
131,648
34,110,816
39,864,313
32,129,686
38,101,124
1,981,131
1,763,189
9,508
6,727
1,990,639
1,769,916
394,916
962,946
80,049
1, 515,674
1,990,639
68,359
738,611
1,769,916
Fiscal Service
BUREAU OF ACCOUNTS
The functions of the Bureau are Govern ment Avide in scope. They
include central accounting and financial reporting; disbursing for Adrtually all civilian agencies; supervising the Government's depositary
system; determining qualifications of insurance companies to do
surety business with Government agencies; a variety of fiscal activities such as investment of trust funds, agency borrowings from the
Treasury, and international claims and indebtedness; and Treasury
staff representation in the joint financial management improvement
program.
Management improvement
Under the cost reductioii and managenient improvement program,
savings of $446,000 Avere realized during fiscal 1968, attributable to
further improA^ements in technology and systems, realinement of
organization and staffing, and the fruits of continuing programs for
the development of people in management skills at all levels.
Personnel
Special manpoAver and employment programs Avere emphasized in
both the headquarters and field organizations of the Bureau of Accounts during the year. Included in or covered by this activity were
(1) the equal employment opportunity program and (2) Operation
M U S T (Maximum Utilization of Skills and Training), the advancement of women and the employment of the physically, economically,
and educationally disadvantaged. These programs were pursued both
in ternis of increasing the degree of participation and improving the
general content.
ADMINISTRATIVE REPORTS
87
Systems improvement
Bureau staff continued to represent the Treasury on the steering
committee and survey teams of the joint financial management improvement program. Primary attention Avas given to implementing
the recommendations of the President's Commission on Budget Concepts as described under "Government-wide Financial Management." ^
Other systems work during the year included various studies to improve internal procedures and the release of Govemment-Avide regulations under the Treasury Fiscal Eequirements Manual.
Central accounting and reporting
Adoption in 1968 of a wide range of recommendations of the President's Commissioil on Budget Concepts dealing* AAdth the form and
content of the budget ^ represented the most signilicant development in
Government-wide accounting and reporting since the Budget and
Accounting Procedures Act of 1950. During the Commission's study
and formulation of recommendations, the Bureau furnished the staff a
number of papers, tables, and technical advice on draft chapters.
Many of the Commission's reconimendations were incorporated in the
President's budget for 1969. I t Avas then necessary for the Bureau
to make these conceptual changes in various Government-Avide financial repoi^ts, including complete revisions of the "Monthly Statement
of Eeceipts and Expenditures of the United States Government" and
the "Combined Statement of Keceipts, Expenditures and Balances of
the United States Governnient," along Avith changes in applicable portions of the "Treasury Bulletin" and this report. Also, instructions to
the agencies and departnients concerning repoiiing under the new
budget concepts Avere required.
A new monthly series on obligations, by object class, incurred by
Federal departments and agencies was developed jointly by the Bureau
of the Budget and the Bureau of Accounts. This data was firsit published in the September 1967 "Treasury Bulletin" covering fiscal years
1964, 1965, 1966, and 1967 through May. Additional monthly data
have been continued in subsequent issues of the bulletin.
The final chapter of the accounting manual covering the Bureau's
system of central accounting for cash operations Avas submitted to the
General Accounting Office for review in June 1968. The separate special manual covering the Bureau's central accounting for foreign currency operations was submitted to the General Accounting Office in
February 1967.
I n fiscal 1968, the first "Statement df Liabilities and Other Financial
Commitments of the United States Government" compiled in accordance Avith 31 U.S.C. 757f Avas submitted to the Congress. This annual
statement shoAvs the liabilities of the Federal Government as of the
end of the fiscal year and other financial commitments whicii may or
may not subsequently become liabilities, depending upon a variety of
future conditions and events.
1 In the "Review of Fiscal Operaitions" portion of this report, pages 8-10.
88
19 68 REPORT OF THE SECRETARY OF THE TREASURY
Auditing
During fiscal 1968, the audit staff of the Bureau conducted 15 financial and two management audits. I n addition, comprehensive management surveys Avere performed in five regional offices.
Also completed was the annual examination of the financial statements and related supporting data of surety companies holding Treasury Certificates of Authority as acceptable sureties on bonds running in
favor of the United States (6 U.S.C. 8). Certificates are reneAvable each
July 1 and a list of approved companies (Department Circular 570,
Kevised) is published annually in the "Federal Kegister" for the information of Federal bond approving officers and persons required to
give bonds to the United States. As of June 30,1968, a total of 248 companies held certificaites.
General coordination and staff assistance Avere furnished for the annual audit of the Exchange Stabilization Fund. Other audits made of
departmental activities included the unissued stocks of Federal Keserve
notes.
Disbursing operations
The Division of Disbursement reached a new level of output
in fiscal 1968, producing 440.4 million checks and bonds in 11 disbursing offices for 1,400 adniinistrative agency offices. The 440.4 million
items was an increase of 18 million over 1967. The Washington and
Manila disbursing offices serviced a number of foreign service posts
in the Caribbean and F a r East. The Washington Disbursing Center
also initiated checkwriting activities for the D.C. Government and
Avill soon begin issuing their U.S. savings bonds.
Management savings and employee productivity, which increased by
3.5 percent, helped reduce the average unit cost of checks and bonds
to 2.7 cents, an alltime low. Aside from the increased productivity and
the absorption of increased volumes by E D P equipment, the programs
or projects which accounted for the bulk of nionetary and man-years
savings included:
(1) Keplacement of E A M equipment by a different lessor at reduced rates.
(2) Full utilization of ncAv and improved inserting and sealing
equipnient.
(3) Implementation of a joint Social Security Administration—
Treasury study group recommendation to eliminate gunniied label
redirection notices for payee changes of address within the same Z I P
code.
Through cooperative efforts, the following projects resulted in savings to the agencies concerned:
(1) The Social Security Administration estimates savings of
$105,000 ;and 19 man-years as the result of a recommendation of the
joint Social Security Administration—Treasury study group that nonreceipt clainis of social security beneficiaries be f orAvarded to disbursing centers on the day of receipt without beneficiary folder reference
in the Social Security Payment Center. This accelerates the remailing of returned checks or the issuance of substitute checks.
(2) Beginning with the June 1968 payments, checks for railroad
retirement benefits, encompassing approximately 13 million payments
ADMINISTRATIVE REPORTS
89
annually, Avere added to the Z I P code presort system. The future addition of veterans' compensation and pension payments, civil service
annuity payments and public debt interest payments will complete
the project to presort all of the major A^olume pa37meiits susceptible
to presorting. The system is responsible for substantial savings in the
Post Office Department's operations and has greatly improved delivery service to recipients of the checks.
The following table compares the Avorkloads for fiscal years 1967
and 1968.
Volume
Classification
1968
Operations financed by appropriated funds:
Checks*
Social security benefits..
Veterans' benefits
Income tax refunds
Veterans' national service life insurance dividends programs
other
-.
Savings bonds
Adjustments and transfers
234,210,686
64,764,251
48,991,364
6,793,488
48,666,410
6,623,058
234,886
246,762,214
66,292,702
51,868,895
2,254, 582
62,797,084
7,273,797
252,322
409, 274,133
426,491, 596
12,152,596
933,775
12,894,907
978, 591
Operations financed by reimbursements:
Raih-oad Retirement Board
Bureau of Public Debt (General Electric Co. bond program)
Total workload—reimbursable items
Total workload
13,086,371
13,873,498
422,360,504
440,366,094
Deposits, investments, and related activities
Federal depositary system.—The types of depositary services provided and the number of depositaries for each of the authorized services as of June 30, 1967 and 1968, are slioAvii in the folloAving table:
Type of service provided by depositaries
Receive deposits from taxpayers and purchasers of public debt securities, for credit
in Treasury tax and loan accounts
Receive deposits from Governnient officers for credit in Treasurer's general accounts
Maintain official checking accounts of Government officers
Furnish bank drafts to Government officers in exchange for collections
Maintain State unemployment compensation benefit paynients and clearing accounts
Operate limited banking facilities:
I n t h e United States and its outlying areas
In foreign areas.--
1967
1968
12,362
12,613
1,373
6,863
1,100
1,506
7, 273
1,250
52
53
248
227
245
218
Investments.—Government trust funds are invested in marketable
U.S. securities, participation certificates. Government agency securities, and special securities issued for purchase by the major trust
funds as authorized by law.
See the Statistical Appendix for table showing the holdings of
public debt securities, agency securities, and participation certificates
by Government agencies and accounts.
90
19 68 REPORT OF THE SECRETARY OF THE TREASURY
Loans by the Treasury.—The Bureau administers loan agreements
Avith those corporations and agencies that have authority to borroAV
from the Treasury. See the Statistical Appendix for tables showing
the status of Treasury loans to Government corporations and agencies
as of June 30,1968.
Surety bonds,-—Executive agencies are required by law (6 U.S.C.
14) to obtain, at their OAVU expense, blanket, position schedule, or other
types of surety bonds covering employees required to be bonded. The
legislative and judicial branches are permitted by laAv to follow the
same procedure. A summary of bonding activities of Government
agencies follows:
Number of officers and employees covered on June 30, 196.8
Aggregate penal sums of bonds procured
Total premiums paid by the Government in fiscal 1968
Administrative expenses in fiscal 1968
971, 891
$3, 542, 610, 350
$266,125
$71,461
Foreign indebtedness
IVorld War /.—During fiscal 1968 the first paynient of $328,898.02
Avas made pursuant to the agreement of May 28, 1964, betAveen the
United States and Greece concerning the refinancing of a portion of
the Greek debt. For status of World W a r I indebtedness to the United
States see the Statistical Appendix. •
Credit to the United Kingdom.—The Government of the United
Kingdom made a principal payment of $60.9 million and an interest
payment of $67 million on December 31, 1967, under the Financial
Aid Agreenient of December 6, 1945, as amended March 6, 1957. The
interest payment includes $8.6 million representing interest on principal and interest installments previously deferred. Through June 30,
1968, cumulatiA^e payments totaled $1,651.6 million, of Avliich $930.1
million was interest. A principal balance of $3,028.5 million remains
outstanding; intbrest installments of $262.6 million Avhicli have been
deferred by agreenient also were outstanding at the fiscal yearend.
Japan.^ postioar economic assistance.—^The Government of Japan
made payments in fiscal year 1968 of $35.6 million principal and $8.3
million interest on its indebtedness arising from postAvar economic
assistance. Cumulative payments through June 30,1968, totaled $185.5
million principal and $56 million interest, leaving an unpaid principal
balance of $304.5 million.
Payment of claims against foreign governments
The eighth installment of $2 million Avas received from the Polish
Government imder the Agreenient of July 16,1960, and a pro rata payment of 2.305 percent on the unpaid balance of each aAvard Avas
authorized.
The Foreign Claims Settlement Commission notified the Secretary
of the Treasury of the final aniount of the aAvards adjudicated under
the W a r Claims Act of 1948, as aniended, and a pro rata payment of
61.3 percent on the impaid balance of each award over $10,000 Avas
authorized.
The Comniission recertified Hungarian war daniage awards aniount-
ADMINISTRATIVE REPORTS
91
ing to $5.7 million. Under the War Claims Act of 1948, as amended,
payments made on awards recertified could not exceed 40 percent of
the amount of the award recertified.
The Foreign Claims Settlement Commission at the fiscal yearend
was certifying to the Secretary of the Treasury awards for payment
under the International Clainis Settlement Act of 1949, as amended,
and the Yugoslav Claims Agreement of Noveniber 5,1964. Initial payments up to $1,000 on all aAvards certified were authorized and payments were being made at the fiscal yearend. See the Statistical Appendix for more details.
Defense lending
Defense Production Act.—Loans outstanding Avere reduced from
$11.7 million to $10.1 million during fiscal 1968. Further transfers of
$1.7 million were made to the account of the General Services Administration, from the net earnings accumulated since inception of
the program, bringing the total of these transfers to $23.8 million.
Federal Civil Defense Act.—Outstanding loans were reduced from
$429,706 to $386,375 during fiscal 1968.
Liquidation of Reconstruction Finance Corporation assets.—The
Secretary of the Treasury's responsibilities in the liquidation of E F C
assets relate to completing the liquidation of business loans and securities with individual balances of $250,000 or more as of June 30, 1957,
and securities of and loans to railroads and financial institutions. Net
income and proceeds of liquidation amoimting to $54.2 million have
been paid into Treasury as miscellaneous receipts since July 1, 1957.
Total unliquidated assets as of June 30, 1968, had a gross book value
of $5.0 million.
Liquidation of Postal Savings System
Effective July 1, 1967, pursuant to the act of March 28, 1966 (39
U.S.C. 5225-5229) the unpaid deposits of the Postal Savings System
as shoAvn on the books of the Board of Trustees, totaling $56,788,958.29
(including accrued interest due), were to be transferred to the Secretary of the Treasury, of which $50 million was transferred duringfiscal 1968. These deposits are held in trust by the Secretary pending
proper application for payment. Under interim arrangements, except
for certain dormant accounts, local post offices process applications
for withdrawal of funds by depositors and forward them to the
Bureau for payment. Payments totaling $35,350,234.78 were made
during fiscal 1968.
Federal tax deposits (depositary receipts)
I n fiscal 1967 the Federal Tax Deposit System was used for the collection of corporate income taxes only. During fiscal 1968, this modified
depositary receipts procedure was extended to all other classes of
taxes formerly handled through the depositary receipts system. As
discussed in the description of the new system on page 11 of the 1967
annual report, the Bureau of Accounts prepares and mails the Federal tax deposit forms quarterly to private enterprises. During fiscal
year 1968, five disbursing centers handled a total volume exceeding
51 million fornis, involving approximately 4 million taxpayers. The
92
19 68 REPORT OF THE SECRETARY OF THE TREASURY
folloAving table
1960-68.
SIIOAVS
the volume of deposits processed for fiscal years
Individual
income and
social security taxes
Fiscal year
1960
1961
1962
1963
1964
1966
1966
1967
1968
.
.....
9,469,057
9,908,068
10,477,119
11,161,897
11,729,243
12,012,386
12,518,436
16,007,304
17,412,921
RaUroad
retirement
taxes
10,625
10,724
10,262
9,937
9,911
9,859
9,986
10,661
14,596
Federal
excise
taxes
698,881
618,971
610,026
619,519
633,437
644,753
259,952
236,538
233,083
Corporate
income
taxes
22,783
394,792
Total
10,078,563
10,537,763
11,097,407
11,791,353
12,372,691
12,666,997
12,788,374
15,277,176
18,055,392
NOTE,—Comparable data for 1944-69 will be found in the 1962 annual report, page 141.
Government losses in shipment
Clainis totaling $156,694.35 Avere paid from the revolving fund
established by the Government Losses in Shipment Act, as amended.
Details of operations under this act are shoAvn in the Statistical
Appendix.
Other operations
Donations and contributions.—During the year the Bureau of Accounts received "conscience fund" contributions totaling $28,371.63
and other unconditional donations totaling $520,845.29. Other Government agencies received oonscience fund contributions and unconditional donations amounting to $7,779.89 and $798,067.81, respectively.
Conditional gifts to further the defense effort amounted to $3,774.31.
Gifts of money and the proceeds of real or personal property donated
in fiscal 1968 for the purpose of reducing the public debt
amounted to $98,942.97, of which $98,301.71 was used to redeem public
debt securities.
BUREAU OF THE PUBLIC DEBT
The Bureau of the Public Debt, in support of the management of
the public debt, has responsibility for the preparation of Treasury
Department circulars offering public debt securities, the direction of
the handling of subscriptions and making of allotments, the formulation of instructions and regulations pertaining to each security issue,
the issuance of the securities, and the conduct or direction of transactions in those outstanding. The Bureau is responsible for the final audit
and custody of retired securities, the maintenance of the control
accounts coyering all public debt issues, the keeping of individual
accounts with owners of registered securities and authorizing the
issue of checks in payment of interest thereon, and the handling of
claims on account of lost, stolen, destroyed, or mutilated securities.
The Bureau's principal office and headquarters is in Washington,
D.C. Offices also are maintained in Chicago, 111., and Parkersburg,
W. Va., where most Bureau operations related to U.S. savings bonds
and U.O. savings notes are handled. Under Bureau supervision many
transactions in public debt securities are conducted by the Federal
Reserve banks and their branches as fiscal agents of the United States.
Selected post offices, private financial institutions, industrial organizations, and others I (approximately 19,000 in all) cooperate in the
ADMINISTRATIVE REPORTS
93
issuance of savings bonds and savings notes, and approximately 16,500
financial institutions act as paying agents for savings bonds.
Management improvement
Regulations and implementing procedures providing for the use of
book-entry Treasury securities were put into effect as of January 1,
1968.^ These book-entry securities consist of transferable Treasury
bonds, notes, certificates of indebtedness, and bills represented by entries in the records of the issuing Federal Reserve bank, as distinguished from definitive securities represented by distinctively printed
pieces of paper. Transactions are accomplished by accounting entries,
rather than through the issue, exchange, and retirement of physical
securities. The adoption of the book-entry system culminated a joint
study by the Treasury and the Federal Reserve banks, of some 4 years
duratioii.2 The system was designed to take advantage of modern
equipment and technology in reducing paperwork, while enhancing
the attractiveness and safety of Treasury securities. I n its initial application, the book-entry system was limited to transferable Treasury
securities deposited with a Federal Reserve bank or branch as collateral for Treasury tax and loan accounts; as collateral for the
deposit of public moneys; or, by a member bank, for safekeeping or
as collateral for advances. Studies have been undertaken to determine
the feasibility of expanding the system to include other classes of
securities not initially eligible.
To take m-aximum advantage of the book-entiy systeni, the Depiartment arranged to have all transferable Treasury securities held for
Govermnent investment accomits deposited with the Federal Reserve
Bank of New York in book-entry form. Special Treasury issues representing the investnient of various Government trust funds were also
converted to a book-entry system operated Avithin the Department.
The Bureau of the Public Debt maintains the book-entry accounts for
these special issues.
Beginning in January 1968 the Federal Reserve banks were authorized 'to issue registered Treasury securities. This delegation to the
banks is intended primarily as a means of improving service to security
owners through the accelerated delivery of registered bonds and notes.
The conversion of the current income savings bonds operations of the
Chicago office to an electronic data processing system was completed
in Deceniber 1967. The converted activities include the audit and
classification of transactions; the establishment and maintenance of
accounts of owners; and the preparation of tapes to furnish data to
the regional disbursing office for use in issuing interest checks and to
the Internal Revenue Service in connection Avith interest paid. Significant monetary benefits are being realized and service to the public has
been improved.
During the year a computer system was selected for installation in
the Washington office, and the training of programers, the development
and testing of programs, and site preparation were undertaken. The
initial objective of the system is the conversion of public debt accounting and other operations noAv performed on conventional tabulating
equipment. The equipment is to be installed during July 1968.
1 See exhibit 3.
2 See 1967 annual report, page 88.
94
19 68 REPORT OF THE SECRETARY OF THE TREASURY
The Parkersburg office has continned to emphasize the project of
having large volume issuing agents Avhich use computers report savings bonds issue data on magnetic tape and microfilm in lieu of registration stubs. One additional Federal ReserA^e bank converted to
this system during the year, bringing to six the number of agents reporting on tape. Pilot studies Avere also initiated with four other
agents. The office has now acquired a micromatic printer which can
generate microfilm of registration data direct from magnetic tape.
This Avill eliminate the microfilming requirement for agents which
are noAv reporting on tape, and Avill permit extension of the reporting system to agents Avhicli use computers but do not have microfilm
facilities.
The efficiency and versatility of the Parkersburg office E D P system
have been increased by the installation of additional peripheral equipment. Encoders permit the entry of data directly onto magnetic tape,
rather than through the medium of punch cards. The original application of these machines in recording numeric data relating to retired
paper bonds has demonstrated their economy of operation. Supplementing the encoders is equipment that permits the interchange of
data betAveen one-half inch and three-quarter inch tapes. This facility
makes possible the onsite conversion of half-inch tapes supplied by
issuing agents, as well as the tapes f rem the encoders.
Safekeeping facilities for U.S. savings bonds and notes issued to
members of the Army and Air Force, heretofore provided by the Federal Reserve Bank of Chicago at Bureau expense, Avill be assumed by
those services, starting with bonds and notes issued after June 30,1968.
The concentration of the operations Avithin the Department of Defense
should benefit serAdce personnel.
Bureau operations
The extent of the change in the composition of the public debt is
one measure of the Bureau's Avork. The debt falls into tAvo broad
categories: public issues and special issues. Public issues consist of
marketable Treasury bills, certificates of indebtedness, notes, and
bonds; and nonmarketable securities, chiefly U.S. savings bonds, U.S.
savings notes, U.S. retirement plan bonds, and Treasury bonds of the
investnient series. Special issues of certificates, notes, and bonds are
made by the Treasury directly to various Government trust and certain other accounts and are payable only for these accounts.
During the year, 35,629 individual accounts covering publicly held
registered securities other than saAdngs bonds, savings notes, and retirement plan bpnds were opened and 27,323 were closed. This increased the number of open accounts to 223,199 covering registered
securities in the principal amount of $11,239 million. There were
416,980 interest checks with a A^alue of $389 million issued during the
year.
Redeemed and canceled securities other than savings bonds, savings
notes, and retirement plan bonds received for audit included 6,400,800
bearer securities and 236,496 registered securities. Coupons totaling
16,357,783 AA^ere received.
During the year 15,933 registration stubs of retirement plan bonds
and 3,184 retirement plan bonds were received for audit.
ADMINISTRATIVE
95
REPORTS
A sumniary of public debt operations handled by the Bureau appears
on pages 11-20 of this report and in the Statistical Appendix.
U.S, savings bonds.—The issuance and redemption of savings bonds
results in a heavy administrative burden for the Bureau of the Public
Debt, involving: niaintenance of alphabetical and numerical ownership records for the 3.1 billion bonds issued since 1935; adjudication of
claims for lost, stolen, and destroyed bonds (Avhicli totaled 2.3 million
pieces on June 30, 1968) ; and the handling and recording of retired
bonds.
Detailed information on sales, accrued discount, and redemptions of
savings bonds will be found in the Statistical Appendix.
There Avere 121 million stubs or records on magnetic tape and microfilm representing the issuance of series E bonds received for registration, niaking a grand total of 3,001 million, including reissues, received
through June 30,1968.
All registration stubs of series E savings bonds and all retired series
E savings bonds are microfilmed, audited, and destroyed, after required permanent record data are prepared by an E D P systein in the
Parkersburg office. The f olloAving table SIIOAVS the status of processing
operations for savings bonds and savings notes in the Parkersburg
office.
Fiscal year
ConBalance
verted Audited
Re- MicroKey
to magand
DeNot conceived filmed punched netic
classi- stroyed Un- Not key verted to Unautape
fied
filmed punched magnetic dited
tape
Stubs of issued card type series E savings bonds (in millions of pieces)
1958-63
1964
1965
1966
1967
1968
-
Total L . . .
508
100
98
101
104
102
506
98
101
101
104
103
503
98
101
100
105
103
503
98
101
100
105
103
600
98
102
100
103
103
1,014
1,013
1,010
1,010
1,006
436
96
124
100
103
98
2.7
4.6
2.3
2.3
2.6
1.7
4.7
7.2
4.5
5.5
5.2
4.4
4.7
7.2
4.5
6.9
5.2
4.4
8.2
9.9
6.6
7.5
8.9
8.1
957 . . . . . '
Retired card type series E savings bonds and savings notes 2 (in millions of pieces)
1958-63
1964
1965-...
1966
1967
1968
Total
305
70
75
82
87
95
303
70
76
81
88
94
301
69
77
80
87
96
301
69
77
80
87
97
299
69
77
80
86
95
257
83
60
92
86
84
714
711
710
710
706
661
2.2
2.3
1.7
2.2
2.0
2.5
3.8
5.0
3.2
5.0
4.9
3.6
3.8
5.0
3.6
6.0
6.6
3.6
5.8
6.8
6.2
6.5
8.3
7.6
1.1
1.4
.9
1.0
.8
.8
2.0
2.1
1.3
1.3
1.4
1.3
Retired paper type series E savings bonds (in millions of pieces)
1962-63 3
1964
1965
1966
1967
1968
Total
._--
22.6
22.4
20.4
19.3
16.8
15.2
22.0
22.4
20.5
19.4
16.8
15.2
21.5
22.1
21.0
19.1
17.0
16.3
21.5
22.1
20.9
19.2
17.0
15.2
20.6
22.3
21.2
19.3
16.7
15.3
6.1
23.4
11.0
33.9
16.0
13.8
116.7
116.3
116.0
116.9
116.4
103.2
0.6
.6
.6
.4
.4
.4
1.1
1.4
.8
1.0
.8
.7
Stubs of issued United States savings notes 2 (in millions of pieces)
1967
— ~ ~ n
(*)
(*)
(*)
(*)
(*)
n
(*)
(*)
(*r~
1968
6.9
6.6
6.5
6.5
6.2
2.3
0.3
0.4
0.4
0.7
•Less than 50,000.
1 Excludes records received on magnetic tape and microfilm; 6.3 million in 1966, 6.4 million in 1966, 12.8
miUion in 1967, and 17.2 million in 1968, for a total of 41.7 million.
2 U.S. savings notes were first issued in May 1967.
8 In 1962 (and in prior years) most paper type bonds were processed in other oflices manually and on
tabulating equipment.
96
1968 REPORT OF THE SECRETARY OF THE TREASURY
Of the 106.1 million series A - E savings bonds redeenied and charged
to the Bureau during the year 103.5 million (97.6 percent) were redeemed by authorized paying agents. For these redemptions these
agents Avere reimbursed quarterly at the rate of 15 cents each for the
first 1,000 bonds paid and 10 cents each for all over the first 1,000 for a
total of $13,349,439 and an average of 12.89 cents per bond.
The f olloAving table shows the number of savings bonds outstanding
as of June 30,1968, by series and denomination.
D e n o m i n a t i o n (in t h o u s a n d s of pieces)
Series i
Total •
$10
E
H...
A
B.
C
D
F
G
J
K
$50
$25
$75
. 504,616 596 270,412 115, 945 3,703
.
6,955
1
2
1
3
1
3
7
33
13
6
30
15
66
108
56
.
...
T o t a l . - . 511,876 696 270,471
115, 953 3,703
$100
$200
$500
$1,000
$5,000
81, 001 8, 707 11,967 12, 235
. 2,702 3,836 " " " 3 1 9 "
1
(*)
1
(*)
2
1
9
3 .
9
2
(*)
4
34
1
13
18
44
2
11
22
4
18
31
. (*)
(*)
'\
81,101 8,707
14, 715 16,150
$10,000 $100,000
2
48
98
(*)
(*)
3
3
(*)
(*)
152
326
2
*Less than 500 pieces.
1 Currently only bonds of Series E and H are on sale.
The folloAving table shows the number of issuing and paying agents
for series A - E savings bonds by classes.
Post
offices 1
June 30
Banks
Building
and savings
and loan
associations
Credit
unions
Companies
operating
payroll
plans
All
others
Total 2
Issuing agents
1945....
1950...
1955
1960
1964..
1965
1966
1967
1968
.
.
-.
24,038
24,038
25,060
2, 476
1, 093
977
943
934
901
870
15, 232
15, 225
15, 692
16, 436
13, 908
14, 095
14,114
14,181
14, 234
3, 477
1,557
1,655
1,851
1,702
1,702
1,710
1,717
1,701
2, 081
522
428
320
252
246
241
231
227
3 9, 605
3,052
2,942
2,352
1,783
1,696
1,621
1,541
1,485
(')
560
588
643
528
610
482
460
448
64, 433
45, 966
23,681
22, 695
19,160
19,191
19,102
19, 031
18, 965
57
56
60
15
15
15
14
79
13,466
16,691
17,652
19,163
15,991
16,178
16,283
16,327
16,528
P a y i n g agents
1945.
1950..
1955
1960
1964...
1965...
1966
1967
1968
...
13,466
15,623
16,269
17,127
14,039
14,190
14,247
14,264
14,304
874
1,188
1,797
1,779
1,816
1,857
1,884
1,970
137
139
169
158
157
164
165
175
1 Estimated by the Post Office Department for 1955 and thereafter. Sale of series E savings bonds was
discontinued at post offices at the close of business on Dec. 31,1953, except in those localities where no other
public facilities for then sale were availaole.
2 Eflective Dec. 31, 1960, a substantial reduction was made due to reclassification by Federal Reserve
banks to include only the actual number of entities currently qualified. Does not include branches active
in the savings bond program.
» "All others" included with companies operating payroll plans.
ADMINISTRATIVE REPORTS
97
Interest checks issued on current income-type savings bonds (series
H and K ) during the year totaled 4,759,121 Avith a value of $329,055,491. New accounts established for series H bonds, the only current
income-type savings bonds presently on sale, totaled 104,523 Avhile accounts closed for series H bonds totaled 171,476, a decrease of 66,953
accoimts.
Applications i-eceived during the year for the issue of duplicates of
savings bonds lost, stolen, or destroyed after receipt by the registered
owner or his agent totaled 42,532. I n 24,106 of such cases the issuance
of duplicate bonds was authorized. I n addition, 24,496 applications
for relief were received in cases Avhere the original bonds were reported as not being received after having been mailed to the registered
OAvner or his agent. OFFICE OF THE TREASURER OF THE UNITED STATES
The Treasurer of the United States is responsible for the receipt,
custody, and disbursement, upon proper order, of the public moneys
and for maintaining records of the source, location, and disposition of
these funds. The functions performed by the Treasurer's Office include
the verification and destruction of U.S. paper currency; the redemption of public debt securities; the keeping of cash accounts in the name
of the Treasurer; the acceptance of deposits made by Government
officers for credit; and the custody of bonds held to secure public
deposits in conimercial banks. In addition. Federal ReserA^e banks, as
depositaries and fiscal agents of the United States, perform many
similar functions for the Treasurer.
Commercial banks qualifying as depositaries provide banking
facilities for the Governnient in the United States and in foreign
countries. Data on the transactions handled for the Treasurer by
Federal Reserve banks and commercial banks are reported daily to
the Treasurer and are entered in the Treasurer's general accounts.
The Treasurer maintains current summary accounts of all receipts
and expenditures; pays the principal and interest on the public debt;
provides checking account facilities for GoA^ernment disbursing officers,
corporations, and agencies; pays checks draAvii on the Treasurer of
the United States and reconciles the checking accounts of the disbursing officers; procures, stores, issues, and redeems U.S. currency; audits
redeenied Federal Reserve currency; examines and determines the
value of mutilated currency; and acts as special agent for the payment
of principal and interest on certain securities of U.S. Government
corporations.
The Office of the Treasurer maintains facilities at the Treasury t o :
Accept deposits of public moneys by Government officers; cash U.S.
savings bonds and checks drawn on the Treasurer; receive excess and
unfit currency and coins from banks in the Washington, D . C , area;
and conduct transactions in both marketable and nonmarketable public debt securities. The Office also prepares the "Daily Statement of
the United States Treasury" and the monthly "Statenient of United
States Currency and Coin."
98
19 68 REPORT OF THE SECRETARY OF THE TREASURY
Under the authority delegated by the Comptroller General of the
United States, the Treasurer processes claims arising from forged
endorsements and other irregularities involving checks paid by the
Treasurer and passes upon claims for substitute checks to replace lost
or destroyed unpaid checks.
The Treasurer of the United States is custodian of bonds held to
secure public deposits in commercial banks, and miscellaneous securities held for other agencies.
Management improvements
Federal Reserve notes.—On January 1, 1968, under the Secretary's
authority as set forth in Public Law 89-427, enacted May 20,1966, the
verification and destruction of unfit Federal Reserve notes in the Reserve banks Avas extended to the $20, $50, and $100 denominations.
Notes of these denominations, totaling about 188 million pieces a year,
Avill no longer be shipped to the Treasury where they formerly were
verified and destroyed. The Federal Reserve Audit Branch in the Currency Redemption Division of this office has been abolished. The realinement of procedures and decentralization of this function are
estimated to result in annual recurring savings of $346,000 and 50
man-years.
A D P management.—During the fiscal year, Avork performed for
other agencies by the Treasurer's Office required the services of A D P
personnel valued at $210,000 and computer time valued at $150,000.
The general fund of the Treasury Avas increased by about $105,000 in
reimlbursements for such computer usage.
The payroll processing services provided by the Treasurer's Office
Avere extended in July 1967, to about 350 employees of the National Gallery of Art. I n January 1968, these services were made available to
approxiniately 680 employees in four installations of the Bureau of
Prisons.
The second phase of the Federal Tax Deposit prograni began in
January 1968. Under this procedure approximately 7,200,000 payments
received from the banking system covering income, F I C A , excise,
corporation, and other taxes Avere converted to magnetic tape and
furnished to the Intemal Revenue Service.
The procedure for distributing the stock of doniestic money orders
to over 30,000 U.S. Post Offices has been computerized by the Treasurer's Office. Delivery of the money orders is noAv made each quarter on
the basis of requirements developed from past usage experience. The
Post Office has indicated that this automated distribution system is
expected to generate $50,000 in annual savings..
Assets and liabilities in the Treasurer's account
A summary of the assets and liabilities in the Treasurer's account at
the close of the fiscal years 1967 and 1968 appears in the Statistical
Appendix.
The assets of the Treasurer consist of gold and sih^er bullion, coin
and coinage metals, paper currency, deposits in Federal ReserA^e
ADMINISTRATIVE REPORTS
99
banks, and deposits in commercial banks designated as Government
depositaries.
Gold.—The Treasurer's gold assets declined sharply during fiscal
1968, largely as the result of contributions to an international pool
supplying gold to the London market. On March 16 and 17, 1968, the
contributing menibers of the pool met in Washington and agreed that
officially-held gold should be used only for transfers among monetary
authorities thereafter.^ The outfloAv was slowed appreciably following
this action.
The net reduction of $2,742.8 million for fiscal 1968 represents sales
of $5,899.0 million, purc^hases of $3,159.2 million, 'deposits by the
International Monetary Fund of $14.0 million and a Avithdrawal by
the Fimd of $17.0 million.
Silver.—In July 1967 the Department discontinued sales of silver at
the monetary value of $1.29+ per ounce, a practice which it had followed up to that time to keep silver coins in circulation. An adequate
supply of the new silverless coins permitted the change in policy.
Beginning on August 4,1967, Treasury silver was offered for sale each
Aveek on a bid basis through the General Services Administration in
amounts needed to meet domestic demand. I n March 1968 the Bureau
of the Mint began melting down silver coins returned by the banking
systeni, and beginning in May, silver from this source was also offered
for sale. By the yearend, some 98 million ounces had been sold in this
manner, at a profit of $55 million, which was deposited to the general
fund of the Treasury.
U n d e r t h e act of June 24,1967 ^ (31 U.S.C. 405a-3) silver certificates
continued to be exchangeable for silver bullion at the monetary value
of $1.29+ per ounce until June 24, 1968. On June 25, 1968, in compliance with the same act, 165 million ounces of silver with a monetary
value of $213.3 million were transferred to the stockpiles establishefd
pursuant to the Strategic and Critical Materials Stock Piling Act.
The following table on the daily Treasury sta/tement basis, summarizes transactions in silver bullion of all types during fiscal 1968.
Silver bullion (in millions)
Fiscal year 1968
On hand July 1,1967
Received (+), or disbursed ( - ) , net
Revalued....
Exchanged for silver certificates
Released for coinage.
Withdrawn as security for certificates.
Used in coinage or in coinage metal
Transferred to General Services Administration
stockpile
Onhand June 30, 1968...
*Less than $50,000.
1 See exhibit 39.
2 See 1967 a n n u a l report, p . 400.
Held to secure
Held for coinage, etc.
certificates,
monetary
Monetary Cost value Uncurrent
value
value
coin value
$561.7
-141.0
(*)
—94.0
—70.8
—246.0
$17.5
-,4
—4.2
+70.8
+246.0
—37.2
(*)
+$0.6
(*)
$0.3
+22,8
-17.1
—.5
-213.3
79.2
.6
6.5
100
19 68 REPORT OF THE SECRETARY OF THE TREASURY
Balances with depositaries.—The f olloAving table SIIOAVS the number
of each class of depositaries and balances on June 30, 1968.
Number of
accounts with
depositaries i
Federal Reserve banks and branches
Other domestic depositaries reporting directly to the Treasurer.
Depositaries reporting through Federal Reserve banks:
General depositaries, etc
Special depositaries, Treasury tax and loan accounts...
Foreign depositaries 3
Total
Deposits to
the credit of
the Treasurer
of the
United States,
June 30,1968
36 2 $i^ 425,225,335
35
13,557, 796
-
2,355
12,483
61
141,140,744
4,113,454,028
36,577,406
14,970
6,728,965,307
1 Includes only depositaries having balances with the Treasurer of the United States on June 30, 1968,
Excludes depositaries designated to furnish official checking account facilities or other services to Government ofRcers, but which are not authorized to maintain accounts with the Treasurer. Banking institutions
designated as general depositaries are frequently also designated as special depositaries hence the total
number of accounts exceeds the number of institutions involved.
2 Includes checks for $351,535,487 in process of collection,
3 Principally branches of U.S. banks and of the American Express International Banking Corp.
Bureau operations
Receiving and clislyursing public moneys.—Government officers deposit moneys Avhicli they have colle(ited to the credit of the Treasurer
of the United States. Such deposits may be made with the Treasurer
at Washington, or at Federal Reserve banks, or at designated Government depositaries, doniestic or foreign. Certain taxes are also deposited
directly by the employ el's or manufacturers Avho Avithhold or pay them.
All paynients are^ withdrawn from the Treasurer's account. Moneys
deposited and AvithdraAvn in the fiscal years 1967 and 1968, exclusive
of certain intragovernmental transactions, are shown in the folloAving
table on the daily Treasury statenient basis.
Deposits, withdrawals, and balances in the Treasurer's account
Balance at beginmng of fiscal year
1967
$12,407,377,210
Cash deposits:
'
Internal revenue, customs, trust fund, and other collections
163,036,203,399
Public debt receipts L . .
280,893,225,792
Less:
'
Accruals on savings bonds and notes, retirement plan
bonds, and Treasury biUs
-4,705,989,274
Purchases by Governinent agencies
-82,729,779,799
Sales of securities of Government agencies in market
14,481,607,776
Total deposits
Cash withdrawals:
Budget and trust accounts, etc.
Public debt redemptions 1
Less:
Redemptions included in budget and trust accounts
Redemptions by Govermnent agencies
Redemptions of securities of Government agencies in market
Total with drawals...
Change in clearing accounts (checks outstanding, deposits in transit,
unclassified transactions, etc.), net deposits, or withdrawals (—)
Balance at close of fiscal year
1 For details see Statistical Appendix,
1968
$7,758,994,626
165,086,296,206
303,962,463,920
-5,319,480,407
-75,264,118,336
21,793,361,288
370,975,267,894
410,268,512,669
164,691,006,692
274,579,375,793
184,581,367,232
282,604,995,288
—6,020,054,314
— 74,141,110,873
16,268,217,025
-5,315,093,680
— 70,956, 764,690
18,313, 713,142
376,277,434,323
409,228,217,292
653,783, 744
7,758,994,525
—2,095,227,780
6,694,062,122
ADMINISTRATIVE REPORTS
101
Issuing and redeeming paper currency.—U.S. notes Avere the only
U.S. paper currency issued by the Office of the Treasurer during fiscal
1968. As required by laAv (31 U.S.C. 404) these notes were issued in
amounts equal to those redeemed. Unfit U.S. paper currency is redeemed and destroyed at the Federal Reserve banks and branches and
at the Treasurer's Office in Washington, D.C.
Federal Reserve notes constitute over 98 percent of the paper currency in circulation. When printed by the Bureau of Engraving and
Printing these notes were formerly delivered to the Office of the Comptroller of the Currency and the Treasurer's Office, to be held in joint
custody; however, this arrangement was discontinued in April 1968
in the interest of economy. Under Treasury Department Order No. 95
(Revision No. 2 ) , dated April 19, 1968 (see exhibit 69), the ncAvly
printed notes are retained in the custody of the Bureau of Engraving
and Printing for the account of the Comptroller of the Currency. The
Bureau ships notes to Federal Reserve agents and their representatives
at Federal Reserve banks and branches as needed. Federal Reserve
banks then obtain notes for issuance to the commercial banking system
by depositing equivalent amounts of collateral with their respective
agents.
As the notes become unfit for further circulation they are redeemed
under procedures prescribed by the Fiscal Assistant Secretary. Notes
of the $1, $5, and $10 denominations are cancelled, verified, and destroyed at the Federal Reserve banks and at the Treasurer's Currency
Redemption Divisioii in Washington without being sorted by bank of
issue. The Federal Reserve Board of Governors then apportions the
redemption of such notes among the banks of issue on a formula basis.
Since January 1, 1968, notes of the $20, $50, and $100 denominations
are sorted by bank of issue, then cancelled, verified, and destroyed at
the same locations. The $500, $1,000, $5,000, and $10,000 denominations
are sorted by bank of issue, cut in half and the lower halves forwarded
to the Treasurer's Currency Verification Section in Washington, the
banks retaining the upper halves and adjusting and destroying them
after the Treasurer's verification is completed. I n all cases the Federal
Reserve Board of Governors serves as a clearing house for effecting
appropriate settlements among the banks.
The Treasurer's Office accounts for Federal Reserve notes from the
time that they are delivered by the Bureau of Engraving and Printing
mitil finally redeemed and destroyed. The accounts show the amounts
for each bank of issue and each denomination of notes held in the reserve vault, held by each Federal Reserve agent, or issued and
outstanding.
The Currency Redeniption Division redeems unfit paper currency
of all types received locally in Washington and from Government officers abroad, as well as burned or mutilated currency from any source.
During fiscal 1968 the Divisioii examined and identified burned and
mutilated currency for approxiniately 49,000 claimants and made payments therefor totaling $12,117,865.
A comparison of the amounts of paper currency of all classes, issued,
318-223—69
9
102
19 68 REPORT OF THE SECRETARY OF THE TREASURY
redeemed, and outstanding during the fiscal years 1967 and 1968
folloAvs.
Fiscal year 1967
Outstanding July 1
Issues during year
_.
Redemptions dm-ing year
Outstanding June 30
Fiscal year 1968
Pieces
Amount
6,264,762,001
1,990,312,012
2,624,640,593
4,630,433,420
$41,967,363,297
11,899,289,572
11,371,465,770
42,495,177,099
Pieces
Amount
4,630,433,420 $42,495,177,099
2,268,619,466 13,074,100,130
2,074,016,826 10,490,967,086
4,825,036,060 45,078,310,143
The Statistical Appendix shows by class and denomination the value
of paper currehcy issued and redeemed during the fiscal year 1968
and the amounts outstanding at the end of the year; that volume also
gives further details on the stock and circulation of money in the
United States.
Paying grants through letters of credit,—Treasury Department
Circular No. 1075, dated May 28,1964, established a procedure "to preclude withdrawals from the Treasury any sooner than necessary" in
cases where Federal programs are financed by grants or other payments to State or local governments or to educational or other institutions. Under this procedure Government departments and agencies
issue letters of credit which permit grantees to make withdrawals from
the account of the Treasurer of the United States as they need funds
to accomplish the object for which a grant has been awarded.
By the close of fiscal 1968, 41 Government agency accounting stations were making disbursements through letters of credit. A total of
60,327 withdrawal transactions, aggregating $18,310.8 million, were
processed during the year, compared with 57,007 transactions, totaling
$13,955.6 million for the preceding year.
Checking accounts of disbursing officers and agencies,—^As of June
30,1968, the Treasurer maintained 2,128 checking accounts, compared
with 2,104 the year before. The number of checks paid by categories of
disbursing officers during fiscal 1967 and 1968 follow.
Number of checks paid
Disbursing officers
1967
Treasury
Army.
Navy
Air Force
Other
Total
„
-
-
1968
412,134,281
36,629,305
38,775,501
35,415,052
26,822,415
426,439,674
38,883,267
39,952,041
35,882,940
28,671,971
549,776,664
569,729,893
Settling check claims,—During the fiscal year the Treasurer processed 628,406 requests for stop payment on Government checks and
97,755 requests for removal of stoppage of payments.
The Treasurer acted upon 329,768 paid check claims during the
year, including those referred to the U.S. Secret Service for investiga-
ADMINISTRATIVE REPORTS
103
tion which involved the forgery, alteration, counterfeiting, or fraudulent issuance and negotiation of Government checks. Reclamation was
requested from those having liability to the United States on 46,976
claims, and $5,307,083.59 was recovered. Settlements and adjustments
were made on 35,620 cases totaling $5,848,107.39. Disbursements from
the check forgery insurance fund, established to enable the Treasurer
to expedite settlement of check claims, totaled $771,728.32. As recoveries are made, these moneys are resix)red to the fund. Settlements
totaling $6,698,196.60 have been made from the Treasurer's Check
Forgery Insurance F u n d since it was established on November 21,1941.
Claims by payees and others involving 141,668 outstanding checks
were acted upon. Of these, 133,733 were certified for issuance of substitute checks valued at $92,596,411.90 to replace checks that were not
received or were lost, stolen, or destroyed.
The Treasurer treated as canceled and transferred to accounts of
agencies concerned for adjustment purposes the proceeds of 18,100 unavailable outstanding checks, totaling $9,730,365.38.
Collecting checks deposited.—Govemment officers during the year
deposited more than 8,542,000 commercial checks, drafts, money orders, etc., with the Treasurer's Cash Division in Washington for
collection.
Custody of securities.—The face value of securities held in the custody of the Treasurer as of June 30,1967, and June 30,1968, is shown
below.
June 30
Purpose for which held
1967
As collateral:
To secure deposits of pubhc moneys in depositary banks
In lieu of sureties
In custody for Government officers and others:
Forthe Secretary of the Treasury i
Forthe Comptroller of the Currency
For the Federal Deposit Insurance Corporation
For the Rural Electrification Admmistration
For the District of Columbia
Forthe Commissioner of Indian Aflau-s
Foreign obligations 2
Others
For Govemment security transactions:
Unissued bearer securities
Total
1968
$59,514,600
4,227,850
$42,439,600
4,622,000
33,086,328,515
17,964,500
842,062,000
139,661,506
182,667,476
37,728,250
12,045,086,451
62,660,356
33,173,227,275
10,015,000
245,000,000
162,733,373
169,955,879
53,246,650
12,040,894,461
49,087,296
1,737,334,000
4,190,314,800
48,205,235,504
50,141,535,324
1 Includes those securities of Government corporations and other business-type activities reported in the
Statistical Appendix as held by the Treasury.
2 Issued by foreign governments to the United States for indebtedness arising from World War I,
3 Includes U.S. savings bonds in safekeeping for individuals.
Servicing securities for Government corporations and Federal
agencies.—In accordance with agreements between the Secretary of the
Treasury and various Government corporations and agencies, the
Treasurer of the United States acts as special agent for the payment
of principal of and interest on their securities. A comparison of these
104
1,9 6,8 REPORT OF THE SECRETARY OF THE TREASURY
payments during the fiscal years 1967 and 1968, on the daily Treasury
statement basis, is as f OUOAVS.
1968
Payment made for
Principal
redeemed
Banks for cooperatives.. J
District of Columbia Armory Board
Federal home loan banks
Federal Housing Administration.
Federal intermediate credit banks
Federal land banks
Federal National Mortgage Association
Others
Total
$1,783,705,000
Interest
paid
Principal
redeemed
Interest
paid
5,566,395,000
106,644,760
3,756,645,000
1,082,109,800
891,289,000
139,475
$50,203,178 $2,360,260,000
781,641
341,123,959 5,222,730,000
23,486,977
55,496,650
146,476,292 4,100,310,000
183,940,306 1,656,903,600
120, 264,871
638,404,000
45,607
159,025
$69,758,861
813,981
226,814,788
23,416,580
169,061,722
238,231, 761
120,826,176
39,160
13,185,928,025
866,312,831 14,034,263,275
828,952,018
Office of Foreign Assets Control
The Office of Foreign Assets Control is responsible for administering the Treasury Department's freezing controls. During fiscal 1968,
the controls under the Foreign Assets Control Regulations and the
Cuban Assets Control Regulations Avith respect to trade and financial
transactions Avith, and assets in the United States of Communist China,
North Korea, North Vietnam, Cuba and their nationals and the prohibitions relating to the purchase abroad and importation of Communist Chinese, North Korean, North Vietnamese and Cuban
merchandise Avere continued.
The Office of Foreign Assets Control also administered without
change during fiscal 1968 the Transaction Control Regulations which
supplement the export controls exercised by the Department of Commerce over direct exports from the United States to Eastern Europe
and the U.S.S.R. These prohibit, unless licensed, any person within
the United States from purchasing or selling or arranging the purchase or sale of internationally controlled strategic commodities
located outside the United States for ultimate delivery to the Soviet
Bloc. As in the case of both the Foreign Assets and Cuban Assets Control Regulations, the prohibitions apply not only to domestic American companies but also to foreign firms owned or controlled by persons
within the United States.
The administration of assets remaining blocked under the World
W a r I I Foreign Funds Control Regulations Avhich Avere transferred
to the Office of Foreign Assets Control from the Department of Justice in fiscal 1966 Avas also continued. These regulations apply to assets
blocked under Executive Order 8389 of Hungary, Czechoslovakia,
Estonia, Latvia, Lithuania, East Germany, and nationals thereof who
weve on January 1, 1945, in Himgary or on December 7, 1945, in
Czechoslovakia, Estonia, Latvia or Lithuania or on Deceniber 31,
1946, in East Germany.
^ I n addition, the Office administered unchanged the Rhodesian
Iransaction Regulations, issued on March 1, 1967, under Executive
Order No. 11322 of January 5,1967, hnplementing the United Nations
becurity Council's resolution No. 232.of Deceniber 16, 1966, Avliich
ADMINISTRATIVE REPORTS
105
imposed selective mandatory economic sanctions against Southern
Rhodesia.
Under the Foreign Assets Control and Transaction Control Regulations, the number of specific license applications received (including
applications reopened) during the fiscal year ending June 30, 1968,
was 5,713. During that period a total of 5,684 was acted on.
Under the Cuban Assets Control Regulations, 452 applications for
licenses were received (including applications reopened) during the
fiscal year, and 451 applications were acted on. Comparable figures
under the Foreign Funds Control Regulations Avere 153 applications
received and 163 acted on and under the Rhodesian Transaction Control Regulations, 21 applications received and 22 acted on.
Certain broad categories of unexceptionable transactions are covered by general licenses set forth in the regulations, and such transactions may be engaged in by interested parties without need for securing
specific licenses.
The enforcement efforts of the Control resulted in three criminal
convictions during the fiscal year for violations of the Regulations.
Fines totaling $13,500 were imposed and collected. Moreover, during
this period, violations of the Foreign Assets Control Regulations led
to the forfeiture to the United States, under applicable Customs laws,
of merchandise totaling in excess of $55,063. I n addition, merchandise
tentatively valued at approximately $110,871 was seized and is expected to be forfeited after the completion of the necessary formal
procedures. I n still other cases where forfeitures and civil penalties
were mitigated as a result of extenuating circumstances, more than
$34,491 was collected in lieu of forfeiture and civil penalties.
I n t e r n a l Revenue Service^
The Internal Revenue Service administers the internal revenue laws
embodied in the Internal Revenue Code (title 26 U.S.C.) and certain
other statutes, including the Federal Alcohol Administration Act
(27 U.S.C. 201-212), the Liquor Enforcement Act of 1936 (18 U.S.C.
1261,1262, 3615), and the Federal Firearms Act (15 U.S.C. 901-910) .^
I t is the mission of the Service to encourage and achieve the highest
possible degree of voluntary compliance Avitli the tax laAvs and regulations and to maintain the highest degree of public confidence in the
integrity and efficiency of the Service.
Major management improvements
Since the Government-wide program for cost reduction and management improvement was initiated by the President 3 years ago, the
Service has documented and reported savings of almost $48 million.
The $16.8 million reported in fiscal 1968 represented a record high. This
savings is considered particularly significant since it Avas achieved
despite funding restrictions whicii resulted in the deferral of several
major projects.
Major systems and procedural changes,—Agreement was reached
Avith 27 States and the District of Columbia for providing them with
1 Additional information will be found in the separate "Annual Report of the Commissioner of Internal Revenue."
^ See also page 33,
106
li9 6,8 REPORT OF THE SECRETARY OF THE TREASURY
magnetic tapes of selected data elements from the Service's individual
master tape file. Tapes are made available to States on a reimbursable
basis. The magnetic tape interchange program benefits both the Federal Governmeiit and the States by making the information interchange more efficient and economical than was possible under the manual means used in years past. To insure the confidentiality of tax information supplied States and their political subdivisions, the Service
participated in a joint Service-State review of the controls employed
to safeguard against improper disclosure of information. As a result
of the review, new and revised guidelines for States to folloAv in the
use and protectibn of federally supplied information were approved
for inclusion in subsequent Federal-State exchange agreements.
A new approach for reviewing regional financial plans has resulted
in a significant reduction in travel costs for this function. Under the
new system, proposed plans are first reviewed in the National Office
by budget analysts in each area of budgetary responsibility. The analysts develop a^ point list recommending adjustments, enumerating
iteins in need of additional information, and reporting on the general
status of each planned activity. A senior budget official is briefed on the
results of the review, and a copy of the list is supplied to the region to
help them prepare for onsite review. The onsite review is conducted
only by the senior official compared tofthe three-member teams formerly
used, and onsite review time has been reduced from 10 days to 4 days.
Informing and assisting taxpayers
The Service conveyed its philosophy of tax administration in a
"personal letter" to American taxpayers which accompanied distribution of individual tax forms in Deceniber 1967. Along with rights and
obligations of taxpayers were listed some of the responsibilities of the
Internal Revenue Service: evenhanded, reasonable, and courteous
treatment of taxpayers; vigorous enforcement; and prompt action on
taxpayer problems. With the help of taxpayers' views, the Service has
sought to provide better service and to make tax compliance as easy
as it can be and thereby encourage taxpayers to cooperate fully in the
joint endeavor of achieving fair, prompt, and economical tax
administration.
Public information program.—The need to exercise ingenuity in
finding inexpensive means to accomplish program objectives was
particularly critical due to fiscal 1968 budgetary restraints. Two examples of getting the job done effectively and economically are the
annual T V half-nour presentation on how-to-file and a new 30-minute
film on automatic data processing, intended for tax practitioners. Both
items were prepared 'at minimum cost through the use of considerable
film footage made previously. Tax information was provided to private
firms and commercial banks for use in customer service booklets and
commercial bank newspaper advertisements, thereby reaching ncAv and
larger audiences of taxpayers. Tens of millions of taxpayers were
served throughout the year by articles and feature stories providing
tax return guidance in books, magazines, and ncAvspapers. Questionand-answer columns were carried by more than half of all daily newspapers during the filing season.
Since the benefits of computer processing are lost to the extent
ADMINISTRATIVE REPORTS
107
incorrect information is fed into the machines, the taxpayer error
prevention campaign was greatly expanded in fiscal 1968. I n 'addition
to providing T V and radio information about avoidable errors, the
importance of accuracy on returns was stressed in news releases, magazine articles, question-and-answer columns, and on some 50,000 mailtruck posters. Throughout the filing period, error rates were computed
on a weekly basis for the five principal types of individual and business
taxpayer errors. By having these error rates available, district offices
were able to select for publicity the rates of greatest local concern
and potential improvement.
Taxpayer assistance program.—In fiscal 1968 the Service concluded
a 3-year program of selection 'and special training of approximately
900 taxpayer service representatives for the specific purpose of providing year-round service to taxpayers in 493 Service office locations.
As a further aid, 57 taxpayer service representatives proAdded itinerant
service at 141 office locations not having a permanent taxpayer service
staff. The presence of these employees on publicized days of the week
prevented the inconvenience prcAdously experienced by taxpayers who
visited or called the office only to find all technical employees out
on official business, and conserved the costly expenditure of technical time f ormerl}^ used in providing taxpayer assistance.
Year-round service to taxpayers increased for the fourth consecutive
year when 26.6 million taxpayers telephoned or visited Service offices
in fiscal 1968, an increase of 300,000 over last year. Telephone inquiries
continued to comprise the bulk of the total with 17 million taxpayers
(64 percent) serviced in this way.
Tax forms.—The success of the self-assessment system depends in
part upon the quality of tax return forms and related instructions
to taxpayers. Continued attention was devoted to forms improvement
in fiscal 1968 and activity remained high. Among the factors Avhich
made new or revised fornis necessary were: (1) The Revenue and
Expenditure Control Act of 1968, passed in June 1968, but containing
retroactive features making prompt distribution of revised forms
essential- (2) changes in the rules for making tax deposits; (3)
changes in the social security laws; (4) changes which extended direct
filing; and (5) changes in the law and rules relating to the interest
equalization tax.
Included among the new tax forms was form 1040X, whicii provides
a simple means for a taxpayer to correct any erroneous information
reported on his original income tax retum. At the same time it supplies
iniormation required for expeditious processing of amended overpayment returns and thereby accelerates issuance of refund checks.
Tax rulings,—The National Office interprets the tax law and issues
letter rulings on specific sets of facts in response to inquiries from
taxpayers or their representatives. Technical advice is also provided
to district directors on technical or procedural questions which cannot be resolved at the local level on the basis of law, regulations, or
other definitive information. During fiscal 1968, 26,585 requests for
letter rulings and 3,222 requests for technidal advice were met.
Regulations program.—Twenty-eight final regulations, three temporary regulations, and 22 notices of proposed rulemaking, relating
to matters other than alcohol and tobacco taxes, were published in the
108
19 6,8 REPORT OF THE SECRETARY OF THE TREASURY
"Federal Register" during the year. Five public hearings attended by
over 400 persons Avere held on proposed regulations.
Personnel
The task of finding or reassigning qualified personnel for professional positions has been quite challenging for the past 3 years,
and yet in fiscal 1968, a year of relative austerity, appreciable gains
Avere made, especially in the number and quality of revenue agents and
tax technicians. Many vacancies were filled early in the year through an
aggressive recruitment campaign. As a result of the budgetary reductions, tight restrictions were placed on college recruitment and recruitment for enforcement positions during the second half of the year.
The concentration in seven service centers of returns processing
operations formerly performed in 58 district offices resulted in a
heavy demiand on service center labor markets. Over 100,000 applications for employment were reviewed to select 15,000 seasonal employees
needed to fill card punch operator, clerk, and tax examiner positions
required for the filing season workload.
Over the past' few years, the Service has rapidly increased its
programs to provide employment for economically and educationally
disadvantaged young people. These programs, funded largely by
sources other than the Service, proAdde each enrollee with direct
financial benefits and an introduction to the Avorld of Avork. I n June
the Service had hired 1,345 disadvantaged youngsters betAveen the ages
of 16 and 21 under the Youth Opportunity Prograni. All Service
supervisors received a booklet developed by the Service on superAdsing
the disadvantaged. This special guide, entitled "Adjusting to the
World of Work," Avas highly successful, and Avas later reprinted by
the Civil Service Commission for distribution to other Federal offices.
This year there bas been special success in the hiring and training
of the handicapped. CiAdl Service Commission Chairman John W.
Macy, Jr., honored the Service with two awards: one to the agency,
and the other to an individual employee. Service centers are among
the leading employers of the handicapped. The Governor of Massachusetts honored the North-Atlantic Service Center with a Citation for
Meritorious Service, largely for its achievements in the einployment of
the mentally restored. The Director of the SoutliAvest Service Center
received the John E. Fogarty public personnel award in recognition
of his devotion to the program for hiring the handicapped.
Training
The Service recently has developed several programs aimed at
improving its ability to 'administer specific areas of the law. An
automatic data processing course acquaints revenue agents with the
operations of the A D P system and teaches them how to use the information in the system when auditing tax returns. Training in international issues prepares Service employees to apply the provisions
of tax law that affect foreign taxpayers with income in the United
States and U.S. taxpayers with foreign income. The large case training
program helps revenue agents conduct effective team audits of corporate giants, Avhile the advanced training prograni for revenue officers
concentrated on sophisticated legal collection problems.
ADMINISTRATIVE REPORTS
,
109
The Service annually presents tax education institutes, usually
2 days each, during the tax filing period. These are for professional
tax practitioners and anyone else Avho helps others fill out their tax
returns. The institutes have been expanding in the past few years, with
over 35,000 persons attending in 1968.
Since the International Tax Seminars began in 1965, the Service has
steadily increased its contribution in training employees of participating countries in tax matters. Technical assistance, including the
use of onsite training advisors, has been given to countries requesting
aid in planning and implementing institutional reform. Training programs, conducted in English, Spanish, and Portuguese increased in
both amoimt and types of training off ered.
Internal revenue collections and refunds
Go'oss collections.—Fiscal 1968 internal revenue collections reached
a new high of $153.6 billion, an increase of $5.3 billion (3.5 percent)
over fiscal 1967 collections. A monthly record was set in April 1968,
when almost $21 billion was collected, including record monthly receipts of $7.6 billion in individual income taxes (other than withheld).
Individual income tax payments showed a particularly sharp increase this year. Individual income tax payments (including both
amounts withheld by employers and amounts paid by individuals with
their returns) increased by $8.8 billion (12.6 percent) to a total of
$78.1 billion. Individual income tax collections accounted for slightly
over one-half of total collections in fiscal 1968, compared to 47 percent
in fiscal 1967.
Corporate income tax pa3nnents totaled $29.9 billion, a decline of
$5.0 billion (14.4 percent) from last year. The Revenue and Expenditure Control Act of 1968, approved June 28, 1968, was enacted too
late in the year to have an effect on tax revenues for the 12 months
ended June 30,1968. The retroactive application of the act, increasing
the tax rate by a 10-percent surcharge on corporate income tax from
January 1, 1968 (and on individual income tax from April 1, 1968)
will be reflected in fiscal 1969 collections.
Increases in both the Federal Insurance Contributions Act and the
Self-Employment Contributions Act tax rate and in the amount of
income on which the tax is imposed helped raise the amount of employment taxes collected over last year. The total of $28.2 billion collected was $1.3 billion (4.7 percent) higher than fiscal 1967 collections.
Excise tax collections showed a moderate increase of $0.2 billion
over last year.
Gross collections by detailed categories from 1936-68 are contained
in the Statistical Appendix to this annual report.
Refunds.—The number of refunds of all classes of tax totaled 51.9
million in fiscal 1968, a 5.9-percent increase over the prior year. These
refunds covered tax overpayments of $11.3 billion to Avhich Avas added
interest of $121 million. The increase in principal refunded was $1.8
billion, and in interest paid $0.2 million. The ratio of interest to principal declined from 1.27 percent in fiscal 1967 to 1.07 percent in fiscal
1968.
110
1/9 6 8 REPORT OF THE SECRETARY OF THE TREASURY
Receipt and processing of returns
Number of returns filed,—A total of 107.6 million returns Avas filed
in fiscal 1968, an increase of 2.2 million. The largest increase for any
single type of return filed was for form 1040, which increased to 54.1
million, 2.1 million more than last year. The number of forms 1040A
decreased by 0.5 million to a total of 18.6 million.
Automatic data processing,—As of June 30, 1968, the master file
maintained on magnetic tape at the National Computer Center in
Martinsburg, W. Va., contained 6.7 million business accounts and 81.1
million accounts for individual taxpayers. The feature of the system
under which all transactions of each taxpayer are recorded in one
place is providing a truly effective information base from whicii to
administer the tax laws and to assure fair and impartial treatment of
all taxpayers.
The phase-in of the program under which taxpayers file their individual returns directly with the service centers continued in 1968 and
will be completed with returns filed in 1970. In the Southeast Region,
begimiing in Jahuary 1968, all individual income tax returns, whether
fully paid or disclosing a balance or a refund due, were filed directly
with the service center. In the other six regions taxpayers requesting
refunds were asked to file their returns directly with service centers.
Direct filmg of selected quarterly and annual business returns is also
progressing on schedule.
Enforcement activities
Service operations in fiscal 1968 were severely affected by the reductions in Federal expenditures imposed by Public Law 90-218. The
budget cuts first proposed were very large, and demanded radical
aotion. Before tliese cuts were announced the Service had already hired
people to fill most of the additional enforcement positions authorized
under the fiscal 1968 appropriation, as well as most of the estimated
attrition losses for the entire year. Laying off these new employees
would have seriously damaged morale, and very likely would have
affected the future ability of the Service to recruit personnel; hence,
reductions had tb be taken in other areas, which upset the balance of
Service programs and operations.
Examination qf returns,—For the second consecutive year computers
were used nationwide by the Service to identify returns most in need
of examination. To strengthen this essential first step in the audit program, machine selection criteria are continually updated to include
most recent Service experience and operations research results. Computer screening pf returns for examination is a good example of the
release of valuable technical manpower for more productive work, in
this case the examination of returns.
Returns are ajudited either by field audit, conducted by revenue
agents at the taxpayer's place of business or home, or by office audit,
performed by tax technicians in Service offices either by interview or
correspondence. This year fewer returns Avere examined caused in
part by the rising trend in complexity of returns filed. The 2.9 million
returns examined in fiscal 1968 is a 6.6-percent decrease from the 3.1
million examined in fiscal 1967.
ADMINISTRATIVE REPORTS
111
Additional taxes recommended in fiscal 1968 totaled $2.9 billion-:somewhat below the $3.3 billion recommended in fiscal 1967 and $3.1
billion in fiscal 1966.
Mathematical verification,—About 75 million individual income tax
returns were mathematically verified in fiscal 1968 as compared to
about 65 million in fiscal 1967. Among the reasons for the increase of
9.6 million (14.6 percent) are: more returns filed this year; a carryover of unprocessed returns from the last half of fiscal 1967 into this
year; and more expeditious processing of returns in the last half of
fiscal 1968.
^
^
.
Correction of taxpayers' arithmetic errors resulted in increases of
tax liabilities of $267 million and decreases of $136 million for a net
tax yield of $131 million.
Delinquent returns,—There was a slight increase in results from the
Service's delinquent returns program in fiscal 1968. A total of 770,587
delinquent returns were secured, representing $293.1 million in previously unreported tax, interest, and penalties.
Summary of additional taxes from direct enforcement.—A detailed
comparison of additional tax assessments resulting from direct
enforcement during the last 2 fiscal years is presented below:
Sources
In thousands of dollars
1967
Additional tax, interest, and penalties resulting from examination
Increases In individual income tax resulting from mathematical verification—
Increases in individual income tax and penalties resulting from verification of
estimated tax payments claimed
National identity
file
_
Tax, interest, and penalties on delinquent returns
Total additional tax, interest, and penalties
Clainis disallowed
1968 »
2,256,933
' 207,605
2,208,151
266,763
103,522
2,271
262,666
161,721
n.a.
293,143
'2,832,996
2,929,778
392,199
326,067
' Revised.
n.a. Not applicable.
Tax fraud investigations.^ indictments., and convictions,—A. total of
9,739 fraud investigations were completed during the year, with prosecution recommended in 1,620 cases. Included among these were 1,566
investigations of racketeers, with prosecution recommended in 709
cases. There was a sharp drop in prosecution recommendations in
wagering cases—586 in fiscal 1968 versus 941 in fiscal 1967—due primarily to Supreme Court decisions in the cases of James Marchetti
and Anthony M. Grosso. In these cases, while the Court held the
wagering tax provisions constitutional, it also held that persons who
properly assert their constitutional privilege against self-incrimination may not be criminally punished for failure to comply with the
requirements. While civil enforcement is continuing in this area,
criminal prosecution has been sharply affected.
Indictments were returned against 1,026 defendants in tax fraud
cases in fiscal 1968. Pleas of guilty or nolo contendere were entered
for 638 defendants in cases reaching the courts, 118 defendants were
convicted after trial, 39 were acquitted, while cases against 944 were
112
L9 6,8 REPORT OF THE SECRETARY OF THE TREASURY
nol-prossed or dismissed, including 879 defendants in wagering tax
cases
Collection of past-due accounts.—?^ogT^m changes necessitated by
budgetary limitations reduced the number of past-due accounts established during fiscal 1968 to 2.2 million. This was more than half a million, or 21 percent, beloAv fiscal 1967. The aniount of past-due tax
involved, $2,052 million, was $80 million beloAv last year. Accounts
closed in fiscal 1968 were 2.4 million. While this was 400,000 fewer
than were closed in fiscal 1967, it Avas 200,000 more than were established during the year. Of even greater significance, the $2,054 million
of past-due taxes in the accounts closed was only $12 million less than
in fiscal 1967. Fbr the third consecutive year, the yearend inventory
declined, with 608,000 accounts in inventory valued at $1,379 million.
Continued effort Avas made to increase the use of the A D P systeni
to collect and close past due accounts. For the second time on a nationwide basis, names of individuals owing income or business taxes for
periods prior to the Service's A D P system were input into the computer so that any prior liability could be deducted before a refund
Avas made. Collections under this system totaled $7 million this year.
The decline from the $12 million collected by this means last year was
expected, since both the amount and the number of accoimts outstanding Avill decline as the program continues. I n the related program
covermg accounts becoming past due after the A D P systeni came into
being, approximately $168 million was collected.
Alcohol and tobacco tax administration.—The primary effort in
the alcohol and tobacco tax enforcement area remains concentrated
in the Southeastern States. I n 1968, 86 percent of illegal distilleries
seized and 93 percent of mash seized were in the Southeast Region.
There is strong evidence that the concentrated program in these States,
knoAvn as Operation Dry-Up, is directly responsible for increased
sales of tax-paid alcoholic beverages in the areas Avliere it is in effect.
Thus, tax revenue is being generated at the same time that production
of untaxed spirits is being curtailed.
NationAvide, seizures of illegal distilleries and arrests decreased during fiscal 1968. This decline is in part the result of prior successes under
Operation Dry-Up, and in part results from the continued diversion of
manpower from the illicit liquor prograni to the firearms and organized crime drive programs. The following table provides information
on nationwide seizures and arrests during the last 6 fiscal years.
Number of
of stills
seized
Fiscal year
1963
1964
1965
1966
1967
1968
.. -
-
6,213
6,837
7,432
7,686
6,608
5,899
Gallons of
mash
seized
3,092,600
3,123,800
3,637,900
3,664'; 900
3,125,400
2, 697,300
Arrests for
liquor lawviolations
8,153
7,897
7,171
6,629
6,148
4,884
The alcohol and tobacco tax laboratory of the National Office examined 2,200 samples in connection with criminal cases during fiscal
1968 using such techniques as atomic absorption spectrophotometry
ADMINISTRATIVE REPORTS
113
and neutron activation analysis. The samples examined Avere in the
areas of illicit alcohol production, firearms control, tax depletion
allowances, racketeering, and art authentication. Development of improved techniques and the installation of modern laboratory equipment made it possible to analyze approximately 25 percent more samples this year with no significant increase in personnel.
The National Laboratory and regional laboratories analyzed 8,120
samples of illicit alcohol during the year. This represented a decrease
from 8,710 in 1967 and 9,260 in 1966. I n contrast, narcotic drug samples
examined increased to 11,500 in fiscal 1968, compared to 8,382 in 1967
and 6,400 in 1966.
The amount of distilled spirits tax determined continued its upward
trend Avith 227.7 million tax gallons of spirits being removed from
bonded storage upon determination of tax, an increase of 2.9 percent
from fiscal 1967. Production of distilled spirits increased from 873
million tax gallons in fiscal 1967 to 905.5 million tax gallons in fiscal
1968.
Firearms laio enforcement.—The increased activity in the administration of the firearms laAvs parallels the rising concern of the general
public over firearms, their use in crime, and their control. Excluding
the Southeastem Region, where Operation Dry-Up is in force, approximately 40 percent of total alcohol and tobacco tax special investigator manpower Avas expended on firearms investigations in fiscal 1968.
Investigations conducted resulted in 919 criminal cases submitted for
prosecution, 449 arrests, and 1,092 firearms seized. I n addition, 33,786
firearms record inspections were made at the premises of Federal Firearms Act licensees. Stemming from these inspections, 5,652 referrals
were made to State and local authorities reporting possible instances of
noncompliance with State and local laws.
Appeals and civil litigation.—For the first time in years, case receipts in regional appellate divisions showed a significant decline from
the prior year. Total receipts Avere 33,213, a 9-percent decrease from
the 36,664 received in fiscal 1967. Total case disposals were 35,046, a decrease of 2,709. The excess of disposals over receipts reduced the
eTune 30,1968, inventory to 31,264 cases, compared to 33,097 cases a year
Civil cases in the trial courts Avere won or partially won by the Government during fiscal 1968 as follows: in the Tax Court, 80 percent;
in the Court of Claims, 73 percent; and in the U.S. district courts, 71
percent. The Government AVOU, in Avhole or in partj 192 of the 243
civil tax cases decided by courts of appeal (exclusive of collection
litigation and alcohol and tobacco tax legal matters).
The Suprenie Court rendered IAVO decisions in Tax Court cases during the year. The Court decided both for the Government, reversing an
appellate court decision in one and affirming the other. The Government's position was also sustained in the two decisions rendered by the
Supreme Court in tax refund suits in fiscal 1968.
International activities
Activities of the Service in the international theater embrace three
major progranis: (1) Administration of the tax laws as they apply to
U.S. citizens living abroad, nonresident aliens, and foreign corpora-
114
1.9 68 REPORT OF THE SECRETARY OF THE TREASURY
tions; (2) negotiation and administration of tax conventions with
foreign countries, established to prevent double taxation of individuals
and corporations subject to taxation by two or more countries;
and (3) providing assistance requested by developing countries in
upgrading and improving their tax administration systems.
International operations,—The Service maintains foreign posts in
Bonn, London, Manila, Mexico City, Ottawa, Paris, Ilome, Sao Paulo,
and Tokyo. These overseas offices are managed by revenue service representatives who perfomi functions for all branches of the Service.
They assist U.S. citizens overseas in complying with their U.S. tax
responsibilities and, as part of their normal duties, they audit returns,
collect taxes, and maintain close liaison with tax authorities of foreign
governments on the administration of tax treaties, exchange of information ,and other matters of mutual interest. Further assistance to
U.S. citizens living abroad was provided for the 1968 filing period by:
(1) visits by SerAdce personnel to 50 countries, plus Guam, Wake, Okinawa, and the Panama Canal Zone, and (2) classroom instruction
at 13 military tax schools in Canada, the Canal Zone, EuropCj and the
F a r East to some 850 servicemen. Militaiy personnel completing these
courses were assigned as tax assistors within the military community.
This joint effort on the part of the Service and the Department of the
Army helped to expand the scope of the tax assistance program by
making available inconie tax advice to about two-thirds of the Armed
Forces abroad.
Tax conventions.—The Service participated in negotiations with
seven countries concerning bilateral income tax conventions and with
two countries concerning bilateral estate tax conventions. During fiscal
1968 the Senate ratified, subject to certain reservations, income tax
conventions with France, Brazil, and the Philippines. Instruments of
ratification of a supplementary income tax convention with Canada
were exchanged on December 20, 1967, and instruments of ratification of an income tax convention Avith Trinidad and Tobago were exchanged on December 19, 1967. Instruments of ratification of a protocol to an estate tax convention with Greece were exchanged on
October 27,1967.
Foreign tax assistance.—A fast-developing aspect of the foreign tax
assistance program has been the promotion of institutions for the exchange of ideas, and experience in tax administration among the principal tax administrators in a particular region. The prototype for such
organizations, the Inter-American Center for Tax Administrators,
held its second annual general assembly in Buenos Aires in May 1968,
and now has members from 20 countries of this hemisphere. The success of this initial Center has generated considerable interest in the
potential of similar organizations for other parts of the world, as
evidenced by recent Service participation in discussions concerning
such organizations for both Asia and Africa.
During the 5 years of the foreign tax assistance program, one of
the principal points of emphasis has been the encouragement of participating countries to develop their own in-service training programs.
Signs of the success of this objective are now evident. I n Latin America
in 1963, only one country had in-service training. By the end of fiscal
ADMINISTRATIVE REPORTS
115
1968, 15 countries of that region had such programs on a permanent
basis.
Planning activities
The planning function of the Service covers every aspect of tax
administration. The extremely low cost of operating the Service per
dollar collected, and the high effectiveness of the Service in collecting
the great majority of taxes owed without the necessity for direct enforcement can be credited in part to the successful application of
planning done in prior years.
Long-range planning.—The planning-programing-budgeting system ( P P B S ) continues to be the Service's management tool for the
examination and evaluation of major program alternatives and the
long-range planning of Service activities. The P P B system was refined
to focus on major program issues, reducing the amount of program
planning material requiring executive attention. During fiscal 1968
P P B S analytical techniques were not only used to project fiscal 196974 program plans, but choices were also developed for effecting the
fiscal 1968 appropriation reductions with the least loss in tax revenue
yields.
All Service studies and significant staff projects were assigned relative priorities; controls were instituted to avoid duplication of effort
and to assure that scarce research and staff resources were expended
on only the most vital studies and projects. However, due to the fiscal
1968 economy reduction, sharp temporary curtailments had to be
made in research projects.
Current research program.—Research activities continued to be
directed primarily toward solutions of administrative problems involved in the tax system. While the chief objective of all research
projects was to effect increased taxpayer compliance or an overall
improvement in tax administration, the impacts of proposed changes
on the taxpayer reporting burden were kept constantly in mind; in
fact, a significant proportion of research activities was concentrated on
improving instructions and tax forms to make the overall taxing
process more understandable and less burdensome to taxpayers.
Among the compliance oriented studies conducted during the year
were the following: (1) Continuation of the nationwide survey of
taxpayer compliance in reporting interest from the redemption of
Series E savings bonds; (2) study of compliance among agricultural
workers in reporting wages; (3) a study to pinpoint more specifically
characteristics of employers who fail to fully comply with the requirements for withholding and paying income and social security taxes;
(4) a study to determine the extent to which employers comply with
the Federal unemployment tax laws; and (5) a followup on last year's
study of payees who are required, but fail, to supply their taxpayer
identifying number to payers.
I n connection with the Revenue and Expenditure Control Act of
1968, alternative withholding rates and tables were developed and
their impact on relative over- and underAvithholding was measured
in context with various effective dates for the legislation. Specific
116
1.9 6 8 REPORT OF THE SECRETARY OF THE TREASURY
studies and detailed analyses or comments were prepared on the administrative impact of other legislative proposals during the year.
Syste7rbs development.—Principal emphasis in the systems development area continues to be placed on the short-range problem of improvement of data transcription methods and the long-range problem
of the design of a data processing system to satisfy the requirements
of the future. ,
.
. A successful test was carried out on a small scale version of a direct
data entry system in the search for an improved data transcription
method. This system permits an operator to enter data directly into
a computer Avhere the data is internally validated and a signal flashed
back to the operator if corrective action is required. Advantages of this
technique over conventional keypunching and key verification operations include substantial reductions in key stroke requirements, elimination of much replication of effort in verification, simplified correction
procedures, and elimination of the card-to-tape conversion operation.
Analysis of the test results indicate that the direct data entry system
Avill increase transcription productivity by more than 25 percent.
Inspection activities
Protection of the integrity of the Service is a niatter of vital concern.
Comprehensive internal audit and internal security programs are
maintained to furnish the Commissioner and other levels of Service
management with the assurance that the highest standards are maintained, and Avith information required to correct any deficiencies. The
internal audit program examines and reports upon all activities and
functions of the Service, Avith primary emphasis on those elements
which are most closely related to collection of tax revenues and enforcement of tax laws. The internal security program provides
thorough investigation of the character, reputation, and loyalty to the
United States of personnel apjiointed to positions involving taxpayer
contact, handling money, and other key Service fimctions. Allegations
of employee misconduct and actual or suspected attempts to bribe
Service employees are also investigated under the internal security
program.
Internal audit.-—More than 85 percent of direct internal audit staff
time in fiscal 1968 was spent on examinations of data processing, collection, audit, intelligence, and alcohol and tobacco tax fimctions.
Audits of automatic data processing activities are on a continuing basis
by internal auditors stationed at each of the seven regional service
centers. Actions by management on problem areas detected resulted
in significant improvements in operating efficiency and effectiveness
and in improved taxpayer relations. Many of the resulting improvements can be measured in terms of their impact on the revenue. For
fiscal 1968, these accomplishments are conserA^atively estimated to
total more than $48 million.
Inteomal security.—During fiscal 1968, a total of 12,081 internal
.security investigations of all types Avere completed. I n addition,
police records checks were made on 3,191 individuals considered for
short-term, temporary appointments and on 1,307 persons hired in
connection Avith economic and educational opportunity programs.
Teams composed of internal auditors and internal security inspectors
ADMINISTRATIVE REPORTS
117
investigate breaches of integrity involving actual or potential fraud
by employees or through collusion betAveen employees and non-Service
individuals. One such case involved a practitioner and four employees.
The practitioner, who was both an attorney and a CPA, was convicted
on 17 counts of paying bribes and gratuities to the four employees, and
Avas sentenced to 9 nionths imprisonment. Three of the four employees
pleaded guilty to receiving money from the practitioner, and the
fourth Avas aAvaiting trial at the fiscal yearend. All of the employees
have been separated from the Service. Another case resulted in criminal
action against 25 employees, 10 of whom have already been convicted.
I n this case, tax deficiencies totaling more than $7 million have been
proposed as a result of the investigation.
I n January 1968, 26 employees and former employees of the Service
and one tax practitioner were arrested on charges of trying to bribe
an inspector to furnish them confidential information from inspection
files or to stop certain investigations. From the inception of these bribe
attempts, the inspector worked closely Avitli his superiors and the U.S.
Attorney's Office. Following the arrests, the U.S. Attorney impaneled
a special grand jury to further probe these corrupt activities. As a
result, four more employees, four additional practitioners, and one
taxpayer Avere arrested. At fiscal yearend, investigation Avas continuing, hundreds of questionable tax returns were being scrutinized, and
prosecution actions Avere pending on all 36 defendants.
Service investigations and arrests are in line Avith its policy to police
itself by a constant and vigorous campaign to achieve and maintain
high integrity in tax administration. One of the most rewarding aspects of the Avork of inspection is that many investigations result in
the exoneration of wrongfully accused employees. As in prior years,
the majority of employees suspected or accused of Avrongdoing were
cleared after investigation.
B u r e a u of the Mint^
The major functions of the Bureau of the Mint are the manufacture
of coins of the United States and their distribution to the Federal Reserve banks and branches. Other functions involve the safeguarding,
processing, and movement of gold and silver bullion for the Treasury;
the manufacture of medals of a national character; and as scheduling
permits, the manufacture of foreign dies and coins on a reimbursable
basis.
Headquarters for the Bureau of the Mint are located in Washington, D.C. The operations involved in carrying on the business of the
mint are perfornied in the several field offices. Mints are located in
Philadelphia, Pa., and DeiiA^er, Colo.; assay offices are in New York,
N. Y., and San Francisco, Calif .^; bullion depositories are in Fort Knox,
Ky., and an adjunct of the New York Assay Office in West Point, N.Y.
Domestic coinage
During fiscal 1968 the three coinage facilities processed approximately 24,450 short tons of coinage metal into 5.9 billion finished coins
1 Additional information is contained in the separate "Annual Report of the Director
of the Mint."
2 The San Francisco Assay Office also operates as a mint.
318-223—69
10
118
19 68 REPORT OF THE SECRETARY OF THE TREASURY
with a face value of nearly $478 million dollars. These amounts include 1,166,193 special mint sets (1967), and 1,272,070 proof coin sets
(1968), or a total of 12,191,315 individual coins with a face value of
$2,218,819.33.
Proof coin production was resumed for the first time since calendar
1964 and for the first time in mint history at a location other than the
Philadelphia Mint. The 1968 proof coin sets were manufactured at
the San Francisco Assay Office and all coins in the set bear the " S "
mint mark. The Bureau of the Mint began accepting orders for the
1968 proof coin sets November 1, 1967, and by May 1968, orders had
been received to fill the maximum production capacity of 3 million
sets.
The distribution by denomination of the coins produced in fiscal
1968 differs substantially from that of the past 2 years due to current
requirements of the economy. The 1-cent coins which continued as the
most largely produced, accounted for 64 percent of the total production
in fiscal 1968, increased from only 40 percent in 1967 and 32 percent
in 1966. The 1-cent production of more than 3.749 billion pieces^ is
the greatest single year production for this denomination in mint
history. Quarters on the other hand decreased from 25 percent of
total production in fiscal 1966, to 20 percent in 1967, and 13 percent
ill 1968. The remaining distribution of the 1968 production is as follows: dimes, 16 percent; half dollars, 5 percent; and 5-cent pieces, 2
percent.
All subsidiary coins (dimes, quarters, and halves) were of the composite type authorized by the Coinage Act of 1965 (31 U.S.C. 391).
The composite quarters and dimes consist of three layers of material.
The metallic composition of the outer layers is an alloy of 75 percent
copper and 25 percent nickel bonded to an inner core of pure copper.
The composite half dollar also consists of three layers of material. The
metalic composition of the outer layers is 80 percent silver and 20 percent copper bonded to an inner core of approximately 20 percent silver
and 80 percent copper, giving the coin an overall silver content of 40
percent. Cents were made from bronze with a 95 percent copper-5 percent zinc composition. Nickels were made from a 75 percent copper-25
percent nickel alloy.
The Bureau of the Mint delivered 10.142 billion new coins to the
Federal Reserve banks and branches in fiscal 1968. This exceeded by
over 2.7 billion pieces the previous high of 7.4 billion pieces delivered
in fiscal 1966. Most of this increase is due to shipments of over 2.3
billion pieces to replace inventories containing silver coin whicii are
not being recirculated by the Federal Reserve System. Over 380 million
clad quarters were also shipped to the F R B after they had been removed from the silver coin.
Foreign coinage
Foreign coinage production of 249 million pieces during fiscal 1968
Avas the highest in the last 20 years with the exception of fiscal years
1960 (312 million pieces) and 1963 (295 million pieces). During fiscal
1968 the mint produced foreign coins for Costa Rica, E l Salvador,
Panama, and the Philippines. For Costa Rica, tAvo denominations of
stainless steel coins were produced. These were the 5 centimos and 10
ADMINISTRATIVE REPORTS
119
centimes in quantities of 10.86 million and 5.5 million pieces, respectively. For E l Salvador, the mint furnished 10 million 5 centavos and 2
million 10 centavos both of a 75 percent copper 25 percent nickel
composition.
F o r the Government of Panama, the mint manufactured the following coins for general circulation: 7.6 million 1 centesimo which were
bronze of a 95 percent copper 5 percent zinc composition; 2.6 million
5 centesimos of a 75 percent copper 25 percent nickel composition; and
300,000 half balboas which were silver clad, averaging 40 percent silver
60 percent copper. Also produced by the mint for the Government of
Panama were 19,983 Panamanian proof sets containing one each of
the following denominations: 1 balboa; i/^ balboa; 14 balboa; 1/10 balboa; 5 centesimos; and 1 centesimo.
For the Philippine Government during fiscal 1968, the mint furnished 10 million 95 percent aluminum 5 percent magnesium 1 centavos ; 40 million 5 centavos which were 60 percent copper 40 percent zinc;
and 100 million 10 centavos, 40 million 25 centavos, and 20 million 50
centavos which were all 70 percent copper, 18 percent zinc, and 12 percent nickel.
I n addition to the finished coins which were produced for foreign
governments in fiscal 1968, the Bureau of the Mint manufactured two
sizes of coinage blanks for the Government of Brazil. The blanks were
23 mm. and 25 mm. in diameter, for the 10-centavo and 20-centavo coin,
respectively. Deliveries of these blanks during the fiscal year amounted
to 10.8 million pieces of which 6.3 million were of the 10-centavo size
and 4.5 million were of the 20-centavo size.
Silver activities
I n connection with the Treasury's program to make silver bullion
available for industrial use, the Bureau of the Mint recovered 30.8 million fine ounces of silver from the melting of $381/^ million of silver
quarters and $4i/^ million of silver dimes which had been separated
from inventories of coins not recirculated by the Federal Reserve System. At the end of fiscal 1968 the Bureau of the Mint had in its inventories circulated coins estimated to contain silver coins equivalent to
114.7 million fine ounces of silver. I n addition, the Federal Reserve
banks and branches had in their inventories circulated coins estimated
to contain silver coins equivalent to 127 million fine ounces of silver.
These inventories were the result of a program initiated in fiscal 1968,
for recovering the silver from silver coin. This remaining silver will be
recovered during fiscal years 1969 and 1970, as the silver coins are separated from the clad coins and are melted.
I n August 1967, the handling of sales of Treasury silver for industrial use was transferred to the General Services Administration. Approximately 98 million fine troy ounces were contracted for sale during
fiscal 1968. The processing of this silver to a deliverable state was accomplished by the Bureau of the Mint.
I n fiscal 1968 the Bureau of the Mint redeemed silver certificates
equivalent to 89.3 million ounces of silver under the silver certificate
redemption program. Of this total, 4.9 million ounces were redeemed
at the San Francisco Assay Office while the balance of 84.4 million
ounces were handled through the New York Assay Office. More than
120
19 68 REPORT OF THE SECRETARY OF THE TREASURY
30,000 individual transactions Avere completed at these IAVO offices
during the fiscal year. On June 24,1968, the final exchanges were made
under this program.
Management improvement program
The Bureau of the Mint has an active management improvement and
cost reduction program under the direction of management and operating officials in the Office of the Director, and in each of the mints and
assay offices. Major efforts of these officials are directed toAvard achieving efficient maximum production of domestic coins and it has been
largely through their efforts that this has been accomplished for the
past several years.
Savings of $831,000 were realized during fiscal 1968 under the program. These savings represented an increase of $113,000 or 15 percent
over the goal established for fiscal 1968, and were attributable to further improvements in technology and operating procedures and continuing programs for developing personnel in management and other
skills.
B u r e a u of Narcotics
Since its establishment in 1930, the Bureau of Narcotics had been
the agency Avithin the Treasury Department charged with administering Federal laws controlling narcotic drugs and marihuana. On
April 8,1968, the President's Reorganization Plan No. 1 of 1968 gained
congressional approval and the Treasury Department's Bureau of
Narcotics was transferred to the Justice Departnient and consolidated
with H E W ' s Bureau of Drug Abuse Control to form the new Bureau
of Narcotics and Dangerous Drugs. Therefore, this report covers the
activities of the Bureau of Narcotics for the first 9 months of the fiscal
year 1968.
Wliile still an arm of the Treasury Department, the Bureau of Narcotics' responsibility for regulating the legitimate supplies of narcotic
drugs for medical and scientific purposes involved supervision of U.S.
imports and exports of these drugs as well as control OA^er the manufacture and domestic trade in narcotic drugs to prevent diversion into
illicit channels. Enforcement duties included apprehension of interstate and international violators of narcotic laws and cooperation
Avith State and local laAv enforcement agencies. A t the request of foreign police authorities. Bureau agents assisted in mutually beneficial
investigations of international traffickers. Further acceleration of the
expanded program in cooperation with foreign countries notably reduced smuggling of narcotic drugs into the United States during the
first 9 months of the fiscal year.
Cost reduction and management improvement
During fiscal 1968, the Bureau placed in reserve $203,405 which had
been taken from current operating programs. The reserve was applied
against the total cost of. pay increases effective October 1967. An additional $88,000 supplemental appropriation Avas later requested to cover
the pay increase costs.
ADMINISTRATIVE REPORTS
121
Training
Emphasis on the interagency program of training continued. Fifty
Bureau employees participated in various programs which included
technical, managerial, and supervisory instruction. Of these 50 persons, 26 received training from interdepartmental programs. Bureau
officials attending the planning-programing-budgeting seminars
broadened their insight concerning current developments in administrative matters. Participation in this program is continuing. Four
Bureau employees also received nongovernmental training in supervisory and technical areas.
The Bureau of Narcotics Training School conducted 10 intensive
2-week sessions during the first 9 months of fiscal 1968. Eight sessions
Avere held in Washington, D . C , with one in Mahwah, N. J., and another
in Monterey, Calif. A total of 600 local and State law enforcement
officers were trained in narcotic controls at these sessions.
Bilingual Bureau agents conducted a special 2-week course on narcotic controls, particularly the abuse of cocaine, heroin, and marihuana, in the early part of fiscal 1968. The course, taught in cooperation with the International Police Academy for the Agency for
International Developnient, is part of the Bureau's intense program of
cooperation with Latin American countries. Bureau of Narcotics instructors also addressed senior police officers at regular sessions of
A I D ' S International Police Academy.
During the first part of fiscal 1968, the Bureau of Narcotics continued its policy of providing narcotic training by participating in special
Avorkshops and seminars. These sessions, which were held at Little
Rock, Ark., Plershey, Pa., Baton Rouge, La., and St. Petersburg, Fla.,
Avere attended by a total of 236 local and State laAv enforcement officers.
The school staff also lectured regularly before the U.S. Air Force
Office of Special Investigations, the Federal Bureau of Investigation's
National Academy, the Harvard School of Legal Medicine, the Bureau of Drug Abuse Control, the International Police Academy, and
AID.
Information
The demand for information about narcotic drugs and marihuana
increased during fiscal 1968. The Bureau met this demand by supplying over 48,685 publications as a public service to more than 47,000
students, teachers, libraries, parents, individuals, and agencies.
As part of the Bureau's continuing education program. Bureau
agents addressed 579 groups consisting of approximately 50,000
persons.
The traveling exhibit relating to Bureau responsibilities Avas displayed at the National Association of Retail Druggists convention in
Houston, Tex., Avliich was attended by more than 2,500 persons. Bureau
agents were available to discuss registrant responsibilities and distribute literature. I n addition, smaller exhibits were displayed at
various State and local conventions and meetings. For example, the
Bureau cooperated Avith the Minnesota State Pharmaceutical Association and the Florida Medical Association by displaying exhibits
at their annual meetings at St. Paul and Bal Harbour, respectively.
122
1.9 6,8 REPORT OF THE SECRETARY OF THE TREASURY
The Bureau of Narcotics also launched several special information
projects in the first part of fiscal 1968. First, it provided technical
assistance to the International Association of Chiefs of Police in their
production of a narcotic film, "Fight or Flight." Throughout the year,
the Bureau also contacted and cooperated with numerous national
organizations to assist in the, planning or implementation of a narcotic drug education program. Two of the most significant examples
involved cooperation with the National Catholic Youth Organization,
AA^hose program reaches more than 6 million persons, and the American
Legion, which has made narcotic information available to nearly
3,500,000 Legion and auxiliary members.
As part of the Bureau's efforts to counteract the misinformation
available on marihuana, a "Marihuana Task Force" was appointed in
November 1967. The task force consisted of four Bureau agents who
had been specially trained in the problem of marihuana—its abuse
and dangers. The four men were assigned to various areas of the
country where the more vocal pro-marihuana groups and individuals
weve located. The task force received executive direction from Bureau
headquarters in addition to all new articles, papers, and speeches dealing with the subject. This well-informed team used all avenues of communication—speeches, conventions, seminars, symposiums, conferences, resolutions, etc.—to get the message to the American public.
In the short time between November 20 and April 8, 1968, the task
force had" presented speeches to more than 10,000 persons, had begun
to distribute literature about marihuana and narcotic drugs, had participated in several seminars and conferences, and had made the initial
contacts with educational and organizational leaders in their regions.
Enforcement activities
Investigations by Bureau agents of the international narcotic traffic which affects the United States continued on an intensive basis in
cooperation with police authorities of many countries. Listed below
are examples of exceptionally significant investigations completed
between July 1, 1967, and the date of the Bureau's transfer to the
Department of Justice.
U.S. agents in Bangkok, Thailand, assisted Thai police on August
15,1967, as they arrested three men who were delivering approximately
40 kilograms of morphine base to an undercover agent.
On August 25, i 1967, a U.S. narcotic agent in Naples, Italy, purchased 2 kilograms of morphine base for 1,200,000 lire ($2,000) from
four traffickers as part of an undercover investigation. Three other
defendants were arrested the same day by the Italian police and 820,000 lire was recovered.
Based on information received from a U.S. narcotic agent stationed
in Lima, Peru, the Chilean police arrested a trafficker in possession of
2 kilograms of cocaine and three intended recipients in Arica, Chile,
October 9, 1967. In addition to the narcotics, the police also seized
equipment and chemicals used in the processing of cocaine. This case
led to other arrests in Arica, Chile, October 13, 1967, when approximately 5,550 grams of cocaine and a fully equipped clandestine laboratory were seized. Two defendants were arrested at that time.
ADMINISTRATIVE REPORTS
123
U.S. narcotic agents and the Mexican Federal Judicial Police in
Tijuana teamed up to arrest a marihuana trafficker and seize approximately 4 kilograms of marihuana on October 30, 1967. Information
gained through this arrest indicated Avhere a large amount of marihuana could be found. Officers proceeded to the spot and found bricks
of marihuana .wrapped in brown paper. They arrested a union leader
in the Tijuana taxicab business and another defendant and seized
approximately 716 kilograms of marihuana. Agents learned that all
of the marihuana had been shipped from Sinai oa to Tijuana in
50-gallon grease drums, with a 6-incli layer of grease on a plastic cover
camouflaging the marihuana.
An undercover U.S. narcotic agent assisted local police and Singapore Customs authorities in October 1967, in the arrest of IAVO traffickers and the seizure of 2,500 grams of opium.
I n Beirut, Lebanon, U.S. narcotic agents assisted Lebanese Police
arrest two defendants and seize 360 grams of heroin on November 8,
1967. One of the defendants was the sister-in-law of a notorious criminal and the widow of a former major Lebanese heroin trafficker.
Korean Police officers and a U.S. narcotic agent stationed in Seoul,
Korea, worked together in an investigation. On November 27, 1967,
they arrested four defendants in a remote farm house 175 miles from
Seoul and seized a complete clandestine heroin manufacturing laboratory Avith 120 grams of heroin, 6,000 cc. liquid opium, and assorted
heroin-making chemicals.
Narcotic agents in Frankfort assisted German Police as they
arrested tAvo Turkish nationals on December 8, 1967. I n addition to
arresting the IAVO defendants, the officers seized approximately 7 kilograms of morphine base which had been smuggled into Germany from
Turkey by truck.
On January 20,1968, U.S. narcotic agents in Izmir, Turkey, cooperated with Turkish police to arrest two Tuikish nationals ahd seize
approximately 15 kilograms of morphine base.
U.S. narcotic agents joined with the Turkish National Police to
arrest six Turkish nationals on March 28,1968. The arrests and seizure
of 250 kilograms of opium took place in the Turkish province of
Denizle.
On January 29,1968, U.S. narcotic agents stationed in Paris, France,
assisted the French Police arrest a U.S. citizen, from Avhom they seized
nearly 15 kilograms of marihuana.
U.S. narcotic agents in Mexico, assisting the Mexican Federal Judicial Police, located 60 acres of opiuni poppy plants in Gral Teran,
Nuevo Leon, Mexico, on January 31, 1968. Agents and police arrested two defendants, but are still seeking three others; Upon finding
the fields of poppies, the officers called in a contingent of 22 Mexican
Army troops who destroyed the illicit crop.
Narcotic agents in Tijuana cooperated Avith the Mexican Federal
Judicial Police to arrest three defendants between February 8 and 10,
1968. At the same time, they seized a total of 233 kilograms, 982 grams
of marihuana.
I n these and other narcotic cases Bureau of Narcotic agents assisted
foreign authorities in the seizure of a total of 1832.5 kilograms of
124
19 68 REPORT OF THE SECRETARY OF THE TREASURY
narcotic drugs and 1390.5 kilograms of marihuana from the illicit
traffic in other coimtries between July 1,1967, and March 31,1968.
The following table shows the number of violations of the narcotic
laAvs reported by Federal narcotic enforcenient officers.
Number of violators of the narcotic and marihuana laws prosecuted during the
fiscal year 1968, with their dispositions and penalties
N a r c o t i c laws
Registered persons
Federal
court
Convicted
Acquitted.
Federal
court
1
State
court
684
27
1
2
. .
^
2
Kl
2
Average fine per
conviction:
1968
1967
7
3
11
3,200
.
F i n e s imposed
Average sentence of
imprisonment:
1968
1967
Federal
court
271
10
State
court
273
.
1
o
$10,677
w
i
1
5
6
6
1
$31
195
1
4
4
......
$39
45
1 1
o
4
948
553
CO
^
,ti
o
$21,036
>*
175
6
459
1
1
ti
o
7
o
Nonregistered persons
992
1
Sentence i m p o s e d
Nonregistered persons
state
court
Total
M a r i h u a n a laws
6
$6, 781
347
2
$25,197
CO
2
1
><
4
3
$25
53
2
7
O
i
3
2
2
$144
78
Control of manufacture and medical distribution
During the first 9 months of fiscal 1968, the Bureau of Narcotics
issued 37 permits to import crude opium and coca leaves. To meet the
medical requirements for opium derivatives and cocaine and to supply
nonnarcotic coca flavoring extracts, 105,644 kilograms of raAv opium
Avere imported from India and Turkey and 181,440 kilograms of coca
leaves were imported from Peru.
A total of 546 export authorizations Avere issued for the export of
manufactured narcotics to other countries. The quantity of narcotic
drugs exported during the first 9 months of fiscal 1968 Avas 711,972.26
grams.
There were 1,666 thefts of narcotic drugs, amounting to 84,231
grams reported during the first portion of fiscal 1968.
During the same period of time, 420,638 persons Avere registered
under the Harrison Narcotic Act and the Marihuana Tax Act to engage in lawful narcotic and marihuana activities.
ADMINISTRATIVE REPORTS
125
International control and cooperation
The United States is a party to the following conventions, treaties
and protocols relating to the international control over narcotic drugs
and marihuana: The Opium Convention of 1912 and 1931, the International Protocols of December 11, 1946, November 19, 1948, and
June 23, 1953; and the Single Convention of 1961. Additionally, the
United States adheres to all of the provisions, so far as possible, of
several other international regimes of control even though we are not
signatories.
The Bureau of Narcotics continued its international cooperation
during fiscal 1968 through participation in several international meetings. Bureau representatives were among delegates attending the
Interpol 36th General Assembly in Kyoto, Japan, from September 27,
to October 4, 1967, to discuss the events relating to international
criminal activity from September 1966 to August 1967. The United
States was also among 24 countries represented at the 22d Session
of the United Nations Commission on Narcotic Drugs in Geneva,
Switzerland, January 8-26, 1968, to review the Avorld drug situation
and the events concerning narcotic controls of 1967. Representatives
from 24 nations, including the United States met in New Delhi, India,
for the U.N. Consultative Group on. Opium Problems October 9-21,
1967. Discussions covered the gamut of problems related to the
production of opium.
Cooperation with State and local authorities
Excellent cooperation among Federal, State, and local narcotic law
enforcement agencies continued with a free exchange of information
during the investigation and prosecution of narcotic violators and the
routine inspections by State and local authorities. The Bureau's special seminars were held in cooperation with the local, county, and
State agencies as a continuing cooperative training program.
Drug addiction
As of Marcli 31, 1968, just prior to the Bureau of Narcotics' transfer from the Treasury Department to the Department of Justice, the
total number of active narcotic addicts recorded by the Bureau, as reported by Federal, State, local, and private agencies was 62,624.
U.S. Savings Bonds Division
The U.S. Savings Bonds Division promotes the sale and retention
of U.S. savings bonds and U.S. savings notes ("Freedom Shares",
first issued in May 1967) and the sale of savings stamps. The systematic
buying and continued holding of these savings securities makes an
important contribution to the Government's efforts to finance our
national debt in a noninflationary maimer and broadens the ownership
of the Federal debt.
The program is carried out by a relatively small Government staff
assisted by a large corps of sales promotion volunteers. Liaison is
maintained with all types of financial, business, la;bor, agricultural,
and educational institutions, and Avith comniunity groups of all kinds.
Their volunteer services are enlisted to sell savings bonds through
126
1.9 6,8 REPORT OF THE SECRETARY OF THE TREASURY
banks, savings and loan associations, credit unions, certain post offices,
and thousands of business establishments and other employers operating payroll savings plans.
Sales of series E and H savings bonds and savings notes during the
fiscal year 1968 totaled $4,940 million, only slightly below the 1967
11-year record of $4,967 million.
Promotional activities
The Share-in-Freedom plan was continued as the theme of the Division's promotional activities in fiscal 1968. Excellent progress was
made in promoting the payroll savings plan among industrial employees. Federal, State, and local Government employees, and the military services. Over 2,264,000 persons were enrolled. After taking into
account turnover, retirements, and discontinued allotments, there was
a net increase of more than a half million savers during the 1968 fiscal
year. Over 10 million persons were participating in payroll savings
plans as of June 30, 1968. Promotional efforts produced the highest
sales since 1946 in small denomination E bonds, bought primarily by
payroll savers.
Mr. William P. Gwinn, president of the United Aircraft Corp., directed the 1968 payroll savings effort in industry as chairman of the
Industrial Payroll Savings Conimittee. This Committee consisted of
top executives representing 23 major market areas and 27 major industries. Secretary Fowler and other cabinet members, as well as other
Treasury officials, addressed naitional and local campaign kickoff meetings, which were attended by State volnnteer chairmen, financial
leaders, 135 Share-in-Freedom Center chairmen from the larger metropolitan areas. National labor executives, alternates of the Interdepartmental SaAdngs Bonds Committee, and some 350 leading industrialists.
As a result of these meetings, intensive campaigns were undertaken in
the 23 major industrial centers by niembers of the Committee. Similar
campaigns took place in 135 urban centers,.each under the chairmanship of a local business leader.
Campaign preconditioning sponsored by the United Aircraft Corp.
included tAvo full-page advertisements in the "Wall Street Journal"
emphasizing the role of the savings bond program in the maintenance
of the country's sound financial structure, and the mailing of over
35,000 personalized letters, with enclosed brochures, from Mr. Gwinn
to executives throughout the country. This resulted in a 20-percent
response, which was promptly followed up by staff members and the
industrial task force which consisted of approximately 750 junior executives loaned by industry and .directed by the Savings Bonds Division
field staff.
FolloAving meetings in all Share-in-Freedom Centers, staff members
and volunteers personally assisted companies in organizing campaigns.
During the fiscal year, more than 12,500 campaigns were completed
in companies of all sizes, resulting in over 1% niillion new savers.
Successful campaigns in the Federal Government, among both civilian and military personnel, were conducted under the direction of
Interdepartmental;Chairman, Postmaster General LaAvrence O'Brien,
and Vice Chairman Richard Murphy. Special events helped to
dramatize the Federal campaign, with the participation of Hollywood
ADMINISTRATIVE REPORTS
127
celebrities at the Washington kickoff ceremonies. Government girls
march, and Pentagon rally in early 1968.
During the 1968 Federal Governnient spring campaign, approximately 150,000 additional civilian employees and 81,500 additional
members of the Armed Forces signed bond allotments. Total enrollments were over 3.7 million on June 30, 1968-—the highest level since
the inception of the program. Total purchases by Federal civilian and
military personnel in fiscal 1968 amounted to over $1 billion.
The 1968 spring campaign was promoted by special events in many
other areas. Governors, mayors, and other leading local Government
authorities issued savings bonds proclamations. Decorated Vietnam
veterans representing all services again toured the country. They
visited 80 cities in 26 States, appearing on television and at community
meetings and plant rallies to dramatize the theme, "Buy Bonds Where
You Work—They Do."
Organized labor gave its full cooperation to the pa3^roll savings campaign in industry and Government. The sales program was successfully promoted by national unions through the National Labor Advisory Committee for savings bonds.
Sales of savings stamps, primarily through the Nation's schools,
increased 1 percent during the fiscal year 1968. The women's organizations of the Nation act as volunteer leaders in the promotion of stamps.
Banks and other financial institutions contributed substantially to
the success of the savings bonds-freedom shares program. During fiscal
1968, over 13,000 banks sent more than 36 million letters to their customers promoting savings bonds and freedom shares.
Voluntary assistance provided by the Advertising Council and its
task force agencies was of major importance in all promotional activities undertaken by the U.S. Savings Bonds Division during fiscal 1968.
Support of all advertising media—newspapers, magazines, radio,
television, and outdoor—continued at a high level. Magazines, for example, carried over 148,000 lines advertising savings bonds durtng
fiscal 1968.
The Advertising Research Foundation, 'at the request of the Advertising Council and the Treasury, undertook the first public service
project of its 31-year history to develop a consumer research program
on the savings bonds market.
The entertainment industries continued their exceptional cooperation. The motion picture industry contributed a payroll savings film,
"Star-Spangled Salesman," with an all-star cast. Several top stars
lent their services in personal appearances and in theatrical trailers
and television commercials.
Management improvement
An innovation in the volunteer sector of operations was the establishment, January 24,1968, of a new State Chairman's Executive Committee which consisted of two executive committee members for each
of the division's seven regions. The purpose of the Committee is to give
more emphasis to the position of the volunteer chairmen throughout
the various States; to provide more wingspread for their statewide
activities and to create more specific liaison for their campaign planning and programing. The new executive committee will serve nation-
128
19 68 REPORT OF THE SECRETARY OF THE TREASURY
ally as an advisory group to the National Director for Savings Bonds,
in creating and coordinating a nationwide program of State chairmen
projects.
U.S. Secret Service
The major responsibilities of the U.S. Secret SerAdce defined by
section 3056, title 18, United States Code, are the protection of the
President of the United States, the members of his immediate family,
the President-elect, the Vice President or other officer next in the order
of succession to the office of President, and the Vice-President-elect;
protection of a former President and his wife during his lifetime and
the person of a widow and minor children of a former President for
a period of 4 years after he leaves or dies in office, unless such protection is declined; protection of persons AVIIO are determined from time
to time by the Secretary of the Treasury, after consultation with an
advisory committee, -as being major presidential or vice presidential
candidates, unless such protection is declined; the detection and arrest
of persons committing any offenses against the laAvs of the United
States relating to obligations and securities of the United States and
of foreign governments; and the detection and arrest of persons violating certain laAvs relating to the Federal Deposit Insurance Corporation, Federal land banks, and Federal land bank associations.
Management improvement
Eight teletype units have been installed in headquarters and field
offices to connect the Secret Service with the National Crime Information Center (NCIC) and with the Law Enforcement Teletype System
( L E T S ) . The teletype installation will provide rapid input to the
Secret Service and the N C I C computer records system for interchange of printed material necessary in attaining speed and accuracy
in laAV enforcement and protective response. The ( L E T S ) systeni
connects the Secret Sei-vice to 4,500 law enforcement organizations
throughout the Nation in keeping with presidential directives on improved communications aniong law enforcement agencies.
An analytical system was developed for use in the investigative area
to evaluate comparative field office data on check forgery cases received, closed, and pending. The information system provides total
investigative hours spent as Avell as arrests for check forgery and is
a valuable ^management tool in evaluating Service progress in the
check forgery area.
Certain lorganizational changes were effected in fiscal 1968 to facilitate the specialization necessary t o support the expanded operations
of the Service. The Financial Management Divisioii Avas established as
a separate entity in the Office of Administration to centralize responsibility for budget operations, accounting, financial reporting, payroll
operations, and voucher examination.
Preliminary work was initiated in April 1968, to transfer the Secret
"Service payroll operation to the Internal Revenue Service's automated
system in Detroit. I t is expected that this conversion will be accomplished early in fiscal 1969. I t is estimated that tliis will result in recurring annual savings of $24,000.
ADMINISTRATIVE REPORTS
129
Personnel
During fiscal 1968 the Secret Service appointed approximately
242 new special agents, technicians, specialists, and support personnel.
Personnel security investigations, were added to the responsibilities
of the Personnel Divisioii during the fiscal year.
Training
A pilot training project to accelerate the training of new special
agents was initiated during the fiscal year. I t was designed to permit iiCAv personnel to perforin the full range of their duties at the
earliest possible date.
Seven employees attended seminars on planning-programing-budgeting conducted by the Civil Service Commission. Other employees
participated in management seminars conducted by the Brookings
Institution and the Civil Service Comniission.
Inspection and audit program
During fiscal 1968 the inspection,and audit program was improved
by the development of revised check lists and evaluation forms, and
the publication of a new "Inspection Procedures Manual." I n addition, a new format was adopted for reporting inspections of units
other than field offices.
Protective responsibilities
The protection of the First Family, Vice President, former Presidents, their wives, and the widoAv and minor children of the late President Kennedy continued to be the primary responsibility of the Service.
On June 6, 1968, Congress expanded the protective responsibilities
of the Service by enacting a joint resolution (Public LaAv 90-331)
Avliich provided for the protection of major presidential and vice
presidential candidates.
Investigative responsibilities
Counterfeiting violations continued to pose an enforcement problem of increasing magnitude during fiscal 1968. The Secret Service
arrested 1,370 persons, an increase of 27.8 percent over the previous
year, for currency counterfeiting violations. More than $10 million
in counterfeit currency, 76 percent of the total received, Avas seized
before being placed in circulation.
Losses to the public, the amount of counterfeit currency passed on
the public, reached $2.8 inillion. Of this total, $1.4 million Avas traced
to 36 plant operations (places of manufacture) Avhich produced 136
counterfeit issues. The Secret Service suppressed the operations of
these plants prior to June 30,1968. Another $365,000 in losses Avas the
residue from plants seized in previous years. Of the $1 million in
losses remaining, about $800,000 was attributed to seven major counterfeiting operations which were under investigation at the fiscal yearend.
The Service's enforcenient prograni has resulted in the su]3pression
of counterfeit plant operations responsible for 63 percent of the losses
suffered during the fiscal year.
The following summaries are illustrative of the type and scope of
counterfeiting: actiAdties durino; fiscal 1968.
130
li9 6,8 REPORT OF THE SECRETARY OF THE TREASURY
I n the fall of 1967, an undercover agent was introduced to a woman
who was acting on behalf of several well-known Chicago hoodlums.
They wanted to locate a buyer for a larger quantity of counterfeit
$10,000 Treasury bearer securities. The agent succeeded in arranging
for the purchase of $1 million in the counterfeits. I n January 1968, the
woman and four men were arrested while niaking the delivery to the
agent. The group's ringleader was arrested nearby in his car.
During January 1966, an individual was convicted in Los Angeles for
possessing $300,000 in counterfeit $100 notes. Later, the defendant contacted the Secret Service and offered to identify the source of the notes.
H e claimed the $300,000 was only the initial delivery of over $10
million he had ordered from a Miami attorney. He also offered to
assist in obtaining the remainder of the notes which were still available for delivery.
Negotiations with the attorney culminated in late December 1967,
when the attorney forwarded three boxes by air to the defendant in
New York City. The boxes, which were received and opened at the
J F K International Airport, contained $4.1 million in counterfeit $100
notes, the largest single counterfeit seizure in the history of the Secret
Service.
The Miami attorney was arrested in New York City several days
later. Prosecution was pending at the fiscal yearend.
Of the $2.8 million passed on the public during fiscal 1968, over
$400,000 came from a single counterfeiting operation in the Birmingham, Ala., area that reached into almost every State of the Nation.
By the spring of 1968, a special squad assigned to investigate this
operation, had arrested the two printers and several of the organization's major distributors. The fact that over 225 persons were arrested for passing notes produced by this counterfeiting plant
illustrates the complex enforcement problem which confronts the
Secret Service when a single operation has such well-organized distribution facilities.
Total counterfeits attributed to this group exceeded $880,000 of
which $384,000 was seized before being placed in circulation. One of
the printers plead guilty to the charges placed against him and was
given a suspended sentence.
An unusual counterfeiting operation was discovered when a new
counterfeit $5 note Avas passed in Tampa, Fla., in January 1967. Five
other related counterfeits appeared during the next month in Florida
and Georgia. During the following weeks these notes were passed in
other States aloilg the east coast and into the Midwest, but in such
small quantities that only one or tAvo individuals appeared to be
involved.
The first break in this case came in May when a Florida resident was
arrested while attempting to pass one of the notes near Detroit. H e
claimed the notes were printed by a fellow Floridian, a prominent
coin dealer, who had accompanied him to the shopping center but who
had fled to avoid arrest. Based on this information, the plant in
Florida was seized and a fugitive Avarrant issued for the coin dealer.
Efforts to locate the fugitive Avere unsuccessful.
Weeks later, another group of new counterfeit $5, $10, and $20 notes
ADMINISTRATIVE REPORTS
131
appeared in California, Colorado, and Texas. The pattern of passing
the notes again indicated that this was the work of only one or tAvo
persons. One of the notes was passed at a small coin shop in Amarillo,
Tex. When questioned later, the owner of the shop recalled that the
passer was an individual whom he had previously met at several coin
shows—the missing Florida coin dealer.
Efforts to locate the fugitive were intensified and the suspect was
taken into custody near New Orleans during September. He had fled
to Los Angeles after narrowly escaping arrest in Detroit. There he
rented a small print shop and produced a second group of notes.
The passer arrested at Detroit received a 6-year sentence. The coin
dealer received a sentence of .5 years. In all, he was responsible for the
manufacture of 14 different counterfeits totaling nearly $200,000.
Another issue of counterfeit $20 notes first appeared in August 1967,
when 15 were passed at a dog track near Portland, Oreg. Three days
later Secret Service agents from the Seattle office were called to a
downtown store where employees were holding a Avoman who had attempted to make a purchase with one of the notes.
While one agent questioned the suspect, another canvassed nearby
stores wihere he picked up several other counterfeit notes which had
been passed by a woman answering the suspect's description. When
confronted Avith this information, the woman amazed the agents by
admitting that she was not only responsible for passing the notes but
that she had also printed them! The arresting agents were dubious
until they learned that a printing press, camera, and other paraphernalia had been found in her apartment in Portland. The defendant
was placed on probation bringing to a close the 3-day career of the
first female counterfeiter in recent Secret Service history.
Two major counterfeiting operations centered in the Metropolitan
New York City area posed potential problems to the Secret Service
during the fiscal year. Both involved printers who operated legitimate
printing firms and had wide contacts among the criminal element,
which they used as outlets for their products.
In April 1968, an informant contacted the Secret Service in NCAV.
York City and surrendered specimens of a new counterfeit $10 note.
The note was associated with a group of counterfeits which had plagued
New York agents for several months. Several days later the printer
was arrested at his Brooklyn shop and $100,000 in counterfeits was
seized.
The other case was solved when agents identified a major New Jersey
distributor. This man had sold counterfeit notes to several persons
who were later arrested for passing them. Surveillance of the distributor led to a midtown New York printing firm where the notes were
being produced. Early in Marcli the printer and two associates were
arrested at the shop and $23,000 in the notes seized.
These two New York City counterfeiting operations produced 19
different counterfeit issues totaliug $450,000, of which $285,000 Avas
seized before being placed in circulation.
The following table summarizes receipts of counterfeit money duringthe fiscal years 1967 and 1968.
132
19 6,8 REPORT OF THE SECRETARY OF THE TREASURY
Counierfeii money received, fiscal years 1967 and 1968
Receipts pf counterfeit notes and coins
Counterfeit money received in.the United States:
Loss to the public—
Seized before circulation...
Total
..•...-..
1968
$1,658,100.75
8,587,845.49
$2,887,011.15
• 10,294,386.32
10,245,946.24
13,181, 397. 47
During fiscal 1968 the forgery of Government obligations continued
to represent a substantial part of the investigative responsibilities of
the Secret Service.
The number of U.S. Treasury checks requiring investigation increased 16.9 percent in fiscal 1968 over fiscal 1967, while the number of
Government bonds received for investigation increased 61.9 percent.
The Secret Service completed investigations of 52,667 Government
checks, involving approximately $5.5 million. A total of 2,422 persons
Avere arrested and prosecuted for Government check violations during
fiscal 1968. I n addition, the Secret Service investigated 11,505 cases involving the forgery and fradulent negotiation of U.S. Government
bonds having a maturity value of $1,242,000 and arrested 146 persons.
Representative of the cases involving forgery of Government checks
during fiscal 1968' Avas that of a 40-year-old narcotic addict. This individual had stolen, forged, and cashed approximately 100 Treasury
checks amounting to about $10,700. His criminal actions Avere prompted
by his desperate heed for money to satisfy his narcotic habit. The defendant who had operated for about 14 months, had altered the aniount
on a number of checks to a higher sum before cashing them.
The def endant^ who has a prior record having been arrested for similar offenses in 1955, Avas sentenced in Federal court to serve 5 years
for his offenses Avliich culminated in 1968.
One 69-year-old forger of U.S. Government bonds was sentenced in
Federal court in Febniary 1968 to 2i/^ years imprisonment. U p to January 26, 1968, he had forged and redeemed 1,246 Government bonds
aniounting to approxiniately $280,000.
BetAveen May 1967 and January 1968, he had been arrested on five
different occasions for bond forgery and in each instance had been
released on bail. This forger is also a prime suspect in the investigation of a large nuniber of bonds which Avere stolen, forged, and cashed
between January 26, 1968, Avlien he entered his plea of guilty and
February 12,1968, Avlieii his imprisonment began. H e is also one of 32
defendants in a conspiracy case pending at San Antonio, Tex.
While on bail, this defendant surrendered approximately $230,000
in stolen U.S. Government bonds. State of Israel bonds, and U.S.
Postal money orders.
The Secret Service continues to conduct other investigations coming
within its statutory responsibility concerning violations of the Gold
Reserve Act, Government losses in shipment, and silver regulations.
A joint inA^estigation by Secret Service offices in E l Paso, Tex., and
Phoenix, Ariz., from January 1968 to April 1968 involved Adolations of
the silver regulations. TAVO men had been receiving large shipments of
U.S. silver coins from various parts of the nation. The coins were
ADMINISTRATIVE REPORTS
133
melted into ingots at Tucson, Ariz., and sold for the silver value
Avhich yielded a large profit above the coinage value. The investigation
resulted in the arrest of the tAvo men and the seizure of $68,632 in coins
and tAVO 100-pound ingots of silver.
The Secret Service continued to participate Avitli other Treasury
Departnient enforcement agencies in the Department of Justice Organized Crime Task Force projects. Four senior agents are assigned
to the task forces. This combined Federal effort against organized
crime has sho AVH encouraging results.
The following tables shoAv the number of criminal and noncriminal
investigations completed and arrests made by the Secret Service in
fiscal years 1967 and 1968.
Criminal and noncriminal cases investigated, fiscal years 1967 and 1968
Cases investigated
Counterfeiting
Forged Government checks
Forged Goverrunent bonds
Protective intelligence
Other criminal and noncriminal
1967
^
Total
-
1968
24,911
43,056
6,413
15,829
3,276
23,025
52,667
11,505
14,614
3,422
93,484
105,233
1967
1968
Number of arrests, fiscal years 1967 and 1968
Offenses
Counterfeiting
Forged Government checks
Forged Government bonds
Protective intelligence
MisceUaneous
Total
1,072
2,431
113
428
73
4,117
1,370
2,422
146
338
61
4,337
Offenses investigated by the Secret Service resulted in the conviction of 3,368 persons—97.1 percent of the cases brought to trial during
fiscal year 1968.
Cooperation
The Secret Service continues to receive outstanding cooperation and
assistance from local. State, and other Federal law enforcement agencies in support of its protective and investigative responsibilities.
318-223—69
11
EXHIBITS
Public Debt Operations, Regulations, and Legislation
Treasury Notes Offered and Allotted
During fiscal year 1968 there were no offerings of marketable Treasury certificates of indebtedness or Treasury bonds.
Exhibit 1.—Treasury notes
Two Treasury circulars, one containing an exchange offering and the other
containing a cash offering, are reproduced in this exhibit. Circulars pertaining
to the other note offerings during the fiscal year 1968 are similar in form and
therefore are not reproduced in this report. However, essential details for each
offering are summarized in the first table following the circulars and the final
allotments of the new notes are shown in the second table.
DEPARTMENT CIRCULAR NO. 1-68.
PUBLIC DEBT
TKEASURY
DEPARTMENT,
Washmgton, February 1, 1968.
I . OFFERING OF NOTES
1. The Secretary of the Treasury, pursuant to the authority of the Second
Liberty Bond Act, as amended, offers notes of the United States, designated 5%
percent Treasury Notes of Series A—1975 at par :
(1) in exchange for 5% percent Treasury Notes of Series A—1968, dated
November 15,1966, due February 15,1968;
(2) with a cash payment of $6.00 per $1,000 to the United States in exchange
for 41/4 percent Treasury Notes of Series C—1968, dated May 15, 1967,
due August 15, 1968 ;
(3) with a cash payment of $8.50 per $1,000 to the United States in exchange
for 3% percent Treasury Bonds of 1968, dated April 18,1962, due August
15,1968, in amounts of $1,000 or multiples thereof;
(4) with a cash payment of $1.50 per $1,000 to the United States in
exchange for 5 ^ percent Treasury Notes of Series D—1968, dated August
15,1967, due November 15,1968; or
(5) with a cash payment of $11.50 per $1,000 to the United States in
exchange for 378 percent Treasury Bonds of 1968, dated September 15,
1963, due November 15,1968, in amounts of $1,000 or multiples thereof.
Interest will be adjusted as of February 15,1968, in the case of the securities due
November 15, 1968. Payments on account of accrued interest and cash adjustments will be made as set forth in Section IV hereof. The amount of this off'ering will be limited to the amount of eligible securities tendered in exchange. The
books will be open only on February 5 through February 7, 1968, for the receipt
of subscriptions.
I I . DESCRIPTION OF NOTES
1. The notes will be dated February 15, 1968, and will bear interest from that
date at the rate of 5% percent per annum, payable semiannually on August 15,
1968, and thereafter on February 15 and August 15 in each year until the principal amount becomes payable. They will mature February 15, 1975, and will
not be subject to call for redemption prior to maturity.
2. The income derived from the notes is subject to all taxes imposed under the
Internal Revenue Code of 1954. The notes are subject to estate, inheritance, gift
or other excise taxes, whether Federal or State, but are exempt from all taxation
now or hereafter imposed on the principal or interest thereof by any State, or
any of the possessions of the United States, or by any local taxing authority.
137
138
19'68 REPORT OF THE SECRETARY OF THE TREASURY
3. The notes will be acceptable to secure deposits of public moneys. They will
not be acceptable in payment of taxes.
4. Bearer notes with interest coupons attached, and notes registered as to principal and interest, wiU be issued in denominations of $1,000, $5,000, $10,000,
$100,000, $1,000,000, $100,000,000 and $500,000,000. Provision wiU be made for
the interchange of notes of different denominations and of coupon and registered
notes, and for the transfer of registered notes, under rules and regulations
prescribed by the Secretary of the Treasury.
5. The notes will be subject to the general regulations of the Treasury Department, now or hereafter prescribed, governing United States notes.
IIi; SUBSCRIPTION AND ALLOTMENT
1. Subscriptions accepting the offer made by this circular will be received at
the Federal Reserye Banks and Branches and at the Office of the Treasurer of
the United States, Washington, D.C. 20220. Banking institutions generally may
submit subscriptions for account of customers, but only the Federal Reserve
Banks and the Treasury Department are authorized to act as official agencies.
2. Under the Second Liberty Bond Act, as amended, the Secretary of the
Treasury has the authority to reject or reduce any subscription, and to allot
less than the amount of notes applied for when he deems it to be in the public
interest; and any action he may take in these respects shall be final. Subject
to the exercise of that authority, all subscriptions will be allotted in full.
IV. PAYMENT
1. Payment for the face amount of notes allotted hereunder must be made
on or before February 15, 1968, or on later allotment, and may be made only in
a like face amount of the securities enumerated in Paragraph 1 of Section I
hereof, which should accompany the subscription. Payment will not be deemed
to have been completed where registered notes are requested if the appropriate
identifying number as required on tax returns and other documents submitted
to the Internal Revenue Service (an individual's social security number or an
employer identification number) is not furnished. Cash payments due from subscrihers (paragraphs 3, 4 and 6 below) should accompany the subscription. Cash
payments due to subscribers (paragraph 5 below) will be made by check or by
credit in any account maintained by a banking institution with the Federal Reserve Bank of its District following acceptance of the securities surrendered. In
the case of registered securities, the payment will be made in accordance with
the assignments thereon.
2. 5% percent notes of Series A-1968.—Coupons dated February 15, 1968,
should be detached and cashed when due.^
3. 41/4 percent notes of Series C-1968.—Coupons dated August 15, 1968, must
be attached (February 15, 1968, coupons should be detached^) to the notes in
bearer form when surrendered. A cash payment of $6.00 per $1,000 must be made
by subscribers.
4. 3% percent bonds of 1968.—Coupons dated August 15,1968, must be attached
(February 15, 1968, coupons should be detached^) to the bonds in bearer form
when surrendered. A cash payment of $8.50 per $1,000 must be made by subscribers.
5. 51/4 percent notes of Series D-1968.—Coupons dated May 15 and November
15,1968, must be attached to the notes in bearer form when surrendered. Accrued
interest from November 15,1967, to February 15,1968 ($13.26923 per $1,000), whl
be credited, the payment ($1.50 per $1,000) due the United States will be charged
and the difference ($11.76923 per $1,000) wiU be paid to subscribers.
6. 3% percent bonds of November 15,1968.—Coupons dated May 15 and November 15, 1968, must be attached to the bonds in bearer form when surrendered.
Accrued interest from November 15, 1967, to February 15, 1968 ($9.79396 per
$1,000), win be credited, the payment ($11.50 per $1,000) due the United States
will be charged and the difference ($1.70604 per $1,000) must be paid by
subscribers.
^ Interest due on Feb. 15, 1968, on registered securities will be paid by issue of interest
cliecks in reprular course to holders of record on Jan. 15, 1968, the daite the transfer books
closed.
EXHIBITS
139
V. A S S I G N M E N T OF REGISTERED S E C U R I T I E S
1. Treasury securities in registered form tendered in payment for notes offered
hereunder should be assigned by the registered payees or assignees thereof, in
accordance with the general regulations of the Treaisury Department governing
assignments for transfer or exchange, in one of the forms hereafter set forth,
and thereafter should be surrendered with the subscription to a Federal Reserve
Bank or Branch or to the Office of the Treasurer of the United States, Washington,
D.C. 20220. The securities must be delivered at the expense and risk of the holder.
If the new notes are desired registered in the same name as the securities surrendered, the assignment should be to "The Secretary of the Treasury for exchange for 5% percent Treasury Notes of Series A-l975"; if the new notes are
desired registered in another name, the assignment should be to "The Secretary
of the Treasury for exchange for 5% percent Treasury Notes of Series A-1975
in the name of
"; if new notes in coupon form are desired,
the assignment should be to "The Secretary of the Treasury for exchange for
5% percent Treasury Notes of Series A-1975 in coupon form to be delivered
to
".
VI. GENERAL PROVISIONS
1. As fiscal agents of the United States, Federal Reserve Banks are authorized
and requested to receive subscriptions, to make such allotments as may be prescribed by the Secretary of the Treasury, to issue such notes as may be
necessary, to receive payment for and make delivery of notes on full-paid
subscriptions allotted, and they may issue interim receipts pending delivery of
the definitive notes.
2. 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 H . FOWLER,
Secretary of the Treasury.
DEPARTMENT CIRCULAR NO. 4-68. PUBLIC DEBT
TREASURY DEPARTMENT,
Washington, May 2, 1968.
I . OFFERING OF NOTES
1. The Secretary of the Treasury, pursuant to the authority of the Second
Liberty Bond Act, as amended, offers $3,000,000,000, or thereabouts, of notes of
the United States, designated 6 percent Treasury Notes of Series C^-1969', at par
and accrued interest. The following securities, maturing May 15, 1968, will be
accepted at par in payment, in whole or in part, to the extent subscriptions are
allotted by 'the Treasury:
4% percent Treasury Notes of Series B-1968; or
3% percent Treasury Bonds of 1968.
The books will be open only on May 8, 1968, for the receipt of subscriptions.
I I . DESCRIPTION OF NOTES
1. The notes will be dated May 15, 1968, and will bear interest from that date
at the rate of 6 percent per annum, payable on a semiannual basis on August
15, 1968, and February 15 and August 15, 1969. They will mature August 15,1969,
and will not be subject to call for redemption prior to maturity.
2. The income derived from the notes is subject to all taxes imposed under the
Internal Revenue Code of 1954. The notes are subject to estate, inheritance, gift
or other excise taxes, whether Federal or State, but are exempt from all taxation
now or hereafter imposed on the principal or interest thereof by any State, or
any of the possessions of the United States, or by any local taxing authority.
3. The notes will be acceptable to secure deposits of public moneys. They
will not be aeceptable in payment of taxes.
4. Bearer notes with interest coupons attached, and notes registered as to
principal and interest, will be issued in denomiaations of $1,000, $5,000, $10,000,
$100,000, $1,000,000, $100,000,000 and $500,000,000. Provision wiU be made for
the interchange of notes of different denominations and of coupon and registered
140
19 68 REPORT OF THE SECRETARY OF THE TREASURY
notes, and for the transfer of registered notes, under rules and regulations
prescribed by the Secretary of the Treasury.
5. The notes will be subject to the general regulations of the Treasury
Department, now or hereafter prescribed, governing United States notes.
I I I . S U B S C R I P T I O N AND ALLOTMENT
1. Subscriptions accepting the offer made by this circular will be received
at the Federal Reserve Banks and Branches and at the Office of the Treasurer
of the United States, Washington, D.C. 20220. Only the Federal Reserve Banks
and the Treasury Departinent are authorized to act as official agencies. Commercial banks, which for this purpose are defined as banks accepting demand
deposits, may submit subscriptions for account of customers provided the names
of the customers are set forth in such subscriptions. Others than commercial
banks will not be permitted to enter subscriptions except for their own account.
Subscriptions from commercial banks for their own account will be restricted
in each case to an amount not exceeding 50 percent of the combined capital
(not including capital notes or debentures), surplus and undivided profits of
the subscribing bank. Subscriptions will be received without deposit from
banking institutions for their own account. Federally-insured savings and loan
associations, States, political subdivisions or instrumentalities thereof, public
pension and retirement and other public funds, international organizations in
which the United States holds membership, foreign central banks and foreign
States, dealers who make primary markets in Government securities and report
daily to the Federal Reserve Bank of New York their positions with respect to
Government securities and borrowings thereon, Federal Reserve Banks and
Government Investment Accounts. Subscriptions from all others must be accompanied by payment (in cash or in securities of the issues enumerated in
Paragraph 1 of Section I hereof, which will be accepted at par) of 10 percent
of the amount of notes applied for, not subject to withdrawal until after
allotment. Registered securities submitted as deposits should be assigned as
provided in Section V hereof. Following allotment, any portion of the 10 percenit
payment in excess of 10 percent of the amount of notes allotted may be released
upon the request of the subscribers.
2. All subscribers are required to agree not to purchase or to sell, or to
make any agreements with respect to the purchase or sale or other disposition
of any notes of this issue at a specific rate or price, until after midnight
May 8, 1968.
3. Commercial banks in suibmitting subscriptions will be required to certify
that they have no beneficial interest in any of the subscriptions they enter
for the account of their customers, and that their customers have no beneficial
interest in the banks' subscriptions for their own account.
4. Under the Second Liberty Bond Act, as amended, the Secretary of the Treasury has the authority to reject or reduce any subscription, to allot less than
the amount of notes applied for, and to make different percentage allotments
to various classes of subscribers when he deems it, to be in the public interest;
and any action he may take in these respects shall be final. The basis of the
allotment will be publicly announced, and allotment notices will be sent out
promptly upon allotment.
IV.
PAYMENT
1. Payment at par and accrued interest, if any, for notes allotted hereunder
must be made or completed on or before May 15, 1968, or on later allotment.
Payment will not be deemed to have been completed where registered notes
are requested if the appropriate identifying number as required on tax returns
and other documents submitted to the Internal Revenue Service (an individual's
social security number or an employer identification number) is not furnished.
In every case where full payment is not completed, the payment with application
up to 10 percent of the amount of notes allotted shall, upon declaration made
by the Secretary of the Treasury in his discretion, be forfeited to the United
States. Payment iliay be made for any notes allotted hereunder in cash or in
securities of the issues enumerated in Paragraph 1 of Section I hereof, which
will be accepted at par. Any qualified depositary will be permitted to make payment by credit in its Treasury Tax and Loan Account for notes allotted to
it for itself and its customers up to any amount for which it shall be qualified
EXHIBITS
141
in excess of existing deposits, when so notified by the Federal Reserve Bank
of its District. AVhen payment is made with securities in bearer form, coupons
dated May 15, 1968, should be detached and cashed when due. When payment
is made with registered securities, the final interest due on May 15, 1968, will
be paid by issue of interest checks in regular course to holders of record on
April 15,1968, the date the transfer books closed.
v.
ASSIGNMENT
OF REGISTERED
SECURITIES
1. Treasury securities in registered form tendered as deposits and in payment
for notes allotted hereunder should be assigned by the registered payees or
assignees thereof, in accordance with the general regulations of the Treasury
Department, in one of the forms hereafter set forth. Securities tendered in
payment should be surrendered to a Federal Reserve Bank or Branch or to the
Office of the Treasurer of the United States, Washington, D.C. 20220. The maturing securities must be delivered at the expense and risk of the holder. If the
new notes are desired registered in the same name as the securities surrendered,
the assignment should be to "The Secretary of the Treasury for 6 percent
Treasury Notes of Series C-1969"; if the new notes are desired registered in another name, the assignment should be to "The Secretary of the Treasury for 6 percent Treasury Notes of Series C-1969 in the name of
";
if new notes in coupon form are desired, the assignment should be to "The Secretary of the Treasury for 6 percent Treasury Notes of Series C-1969 in coupon
form to be delivered to
".
VI.
GENERAL
PROVISIONS
1. As fiscal agents of the United States, Federal Reserve Banks are authorized
and requested to receive subscriptions, to make such allotments as may be prescribed by the Secretary of the Treasury, to issue such notices as may be necessary, to receive payment for and make delivery of notes on full-paid subscriptions
allotted, and they may issue interim receipts pending delivery of the definitive
notes.
2. 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 coimmunicated promptly to the Federal Reserve Banks.
HENRY H . FOWLER,
Secretary of the Treasury.
to
Summary of information pertaining to Treasury notes issued during the fiscal year 1968
Date of
preliminary announcement
Department
circular
No.
Concurrent
offering
circular No.
Allotment
Date payment
Date of Date of subscrip- date on
issue ' maturity
tion
or before
books
(or on
closed
later
allot-,
ment)
Treasury notes issued for exchange or for cash
Date
SI
t=J
O
S3
O
1967
July 26
1967
7-67 July 27
Aug. 17
8-67 Aug. 18
Oct. 25
9-67 Oct. 26
10-67 5 ^ percent Series A-1969 issued at par for cash 1
Oct. 25
1968
Jan. 31
10-67 Oct. 26
1968
1-68 Feb. 1
9-67 5M percent Series A-1974 issued at par for cash L
Feb.
May
8
1
2-68 Feb.
4-68 May
9
2
May
1
May
2
1968
1967
Aug. 15 Nov. 15
1971
Aug. 30 Feb. 15
1969
Nov.15 Feb. 15
1974
Nov. 15 Nov. 15
1968
1975
Feb. 15 Feb. 15
5K percent Series D-1968 issued at 99.94 for cash 1
5?^ percent Series C-1971 issued at 99.92 for cash
'.
5M percent Series A-1975 issued at par in exchange for:
5H percent Series A-1968 notes maturing Feb. 15,1968
i H percent Series C-1968 notes maturing Aug. 15, 1968 ($0.60) 3
SH percent bonds maturing Aug. 15, 1968 ($0.85) 3
5H percent Series D-1968 notes maturing Nov. 15,1968 ($0.15) 3
d% percent bonds maturing Nov. 15, 1968 ($1.15) 3
5^6 percent Series B-1969 issued at par for cash
5-68 6 percent Series C-1969 issued at par for cash 1
4-68 6 percent Series B-1975 issued at par in exchange for:
i H percent Series B-1968 notes maturing May 15, 1968
SH percent bonds maturing May 15, 1968
1967
1967
July 31 Aug. 15
Aug. 22 Aug. 30
Oct. 30 Nov. 15
Oct. 30 Nov. 15
1968
1968
Feb. 7 2 peb. 15
w
l=j
o
S3
te)
>
_
Feb. 21 May 15 Feb. 13 Feb.
May 15 Aug. 15 May 8 May
1975
May 15 May 15 May 8 May
21
15
o
15
S3
1 Holders of Treasury certificates of indebtedness, notes, or bonds maturing on the
issue date of the new notes were not ofiered preemptive rights to exchange their holdings
for the hew notes. Payment for cash subscriptions allotted could be made in whole or
In part by exchange of the maturing securities, which were accepted at par.
2 See Department Circular No. 1-68 in this exhibit for provisions for subscription and
payment.
3 Araount per $100 payable by subscribers exchanging this security.
>
d
S3
Allotments of Treasury notes issued during thefiscal year 1968, by Federal Reserve districts
[ In thousands ]
Federal Reserve district
Boston
New York
Philadelphia
Cleveland
Richmond
Atlanta
Chicago.
St. Louis
Minneapolis
KansasCity
DaUas
SanFrancisco
Treasury
Totalnote allotments
Securities eligible for exchange: Exchanged in concurrent offerings
Total exchanged
Not submitted for exchange
Total securities eligible for exchange
,
..
5H percent
Series D-1968
notes 1
oH percent
Series C-1971
notes 2
55^ percent
Series A-1969
notes 1
$137,471
7,428,564
114,009
254,122
170,661
201,668
557,304
189,946
106,171
162,549
171,203
403,412
16,118
$160,943
682,474
93,545
193,377
117,113
156,159
383,889
132,824
111,532
163,119
97,154
215,770
657
$150,544
8,831,472
124,526
200,903
103,426
144,337
388,628
155,692
87,446
120,539
116,460
298,521
15,068
$77,509
685,690
35,254
65,761
45,369
79,479
210,948
77,110
43,981
95,311
46,987
184,980
3,352
9,913,198
2,508,556
10,737,561
1,651,731
5H percent
Series A-1974
notes 1
^
^
^
ffi
g
M
H
CO
_.
Footnotes at end of table.
OO
Alloimenis of Treasury notes issued during ihe fiscal year 1968, by Federal Reserve districts—Continued
[In thousands]
S3
53^ percent Series A-1975 notes issued iu exchange for 35 ^ percent
i H percent
SH percent
5H percent
SJi percent
Series A-1968 Series C-1968
Treasury
Series D-1968
Treasury
Treasm-y
Treasury
bonds of 1968
Treasury
bonds of 1968
notes matm-ing notes maturing
maturing
notes maturing
maturing
Feb. 15, 1968 Aug. 15, 1968 Aug. 15, 1968 . Nov. 15, 1968 Nov. 15,1968
Federal Reserve district
Hd
O
S3
H3
Total issued
O
^
Boston
NewYork
Philadelphia
Cleveland
Richmond
Atlanta
Chicago
St. Louis
Mimieapohs
KansasCity
Dallas
SanFrancisco
TreasmT
-
$41,841
1,679,786
36,233
48,885
20,237
36,328
109,956
56,600
24,997
32,939
43,640
30,533
9,319
$15,007
211,146
17,560
47,064
10,987
15,927
94,516
34,967
10,342
11,428
10,428
25,749
2,104
$24,613
447,398
29,189
49,782
18,424
28,500
170,874
39,784
44,891
34,763
23,720
93,402
102,099
$39,286
392,674
30,701
52,382
12,950
31,606
137,709
39,629
29,960
35,133
41,681
79,460
6,966
$22,566
139,011
8,204
25,947
9,476
15,486
99,922
19,158
16,639
21,221
15,514
34,085
6,119
$143,313
2,870,015
121,887
224,060
72,074
127,847
612,977
190,138
126,829
135,484
134,983
263,229
126,607
W
^
\£
S
HH
M
H
>
W
K|
O
^
Total note allotments
Secm'ities eligible for exchange: Exchanged in concurrent offerings
Total exchanged
N o t submitted for exchange
Total securities eligible for exchange
2,171,294
507,225
1,107,439
929,137
433,348
5,148,443
2,171,294
463, .535
507,225
5,936,487
1,107,439
2,639,920
929,137
8,984,061
433,348
1,168,086
5,148,443
19,182,089
2,634,829
6,443,712
3,747,359
9,913,198
1,591,434
24,330,532
t^
\^
H
S)
>
Footnotes at end of table.
^
S3
Allotments of Treasury notes issued during the fiscal year 1968, by Federal Reserve districts—-Continued
[In thousands]
5% percent
Series B-1969
notes 4
Federal Reserve district
Boston
NewYork
Philadelphia..
Cleveland-.
Richmond
Atlanta
Chicago
St. Louis
Minneapolis
KansasCity
DaUas
SanFrancisco
Treasury.-..
Total note allotments
Securities eligible for exchange: Exchanged in concurrent offerings.
Total exchanged
Not submitted for exchange
.
Total securities eligible for exchange
1 Subscriptions from States, political subdivisions or instrumentalities
thereof, public pension and r e t i r e m e n t and other public funds, international organizations in which the United States holds membership,
foreign central banks and foreign states, Government investment accounts, and the Federal Reserve banks were allotted in full up to the
a m o u n t t h a t t h e subscriber certified t h a t it owned a like a m o u n t of
m a t u r i n g securities t h a t could be used in payment for the notes. All
subscriptions for $100,000 or less were allotted in full. Other subscriptions were allotted as follows : 35 percent for the notes of Series D-1968,
36 percent for t h e notes of Series A-1969, and 7y2 percent for t h e notes
of Series A-1974, but not less t h a n $100,000 to any 1 subscriber.
6 percent
Series C-1969
notes 6
6 percent Series B-1975 notes issued in
exchange for 3—
i H percent
SH percent
Series B-1968
Treasury
Treasury notes bonds of 1968
maturing
maturing
May 15, 1968 May 15,1968
Total issued
$211,826
1,218,954
168,361
308,760
199,246
252,658
668,431
202,241
125,541
173,943
142,931
613,564
801
$194,030
943,574
166,514
243,503
169,016
197,366
516,904
166,916
100,682
163,833
118,830
389,404
5,615
$41,646
4,367,210
33,760
44,676
18,338
66,666
236,052
56,493
20,299
31,164
19,350
149,725
6,439
$42,551
991,018
69,058
68,929
33,226
44,633
172,731
60,181
31,800
61,774
36,471
71,643
4,164
$84,197
5,348,228
92,808
113,605
51,564
111,299
408,783
116,674
52,099
92,938
65,821
221,368
10,603
4,277,267
3,366,087
5,081,808
1,678,179
6,759,987
5,081,808
505,034
5,586,842
1,678,179
781,762
2,469,931
6,759,987
1,286,786
8,046,773
.-...
- Subscriptions for $100,000 or less were allotted in full. Other subscriptions were allotted 38 percent but with a minimum allotment of
$100,000 to any 1 subscriber.
3 All subscriptions were allotted in full.
* Subscriptions for $200,000 or less were allotted in full. Other subscriptions were allotted 39 percent but w i t h a minimum allotment of
$200,000 to any 1 subscriber.
5 Subscriptions for $100,000 or less were allotted in full. Other subscriptions were allotted 28 percent but with a minimum allotment of
$100,000 to any 1 subscriber.
^
f^.
M
^
{-J
g
H^
m
146
19 68 REPORT OF THE SECRETAIIY OF THE TREASURY
Treasury Bills Offered and Tenders Accepted
Exhibit 2.—Treasury bills
During the fiscal year there were 52 weekly issues of 13-week and 26-week
bills (the 13-week bills represent additional issues of bills with an original
maturity of 26 weeks), 11 monthly issues of one-year and 9-month bills (the
9-month bills represent additional issues of bills with an original maturity of
one year), and 5 issues of tax anticipation series. Two press releases inviting
tenders are reproduced in this exhibit. The release of June 5, 1968> is representative of releases for regular weekly and regular monthly issues while the release of January 3, 1968, is representative of tax anticipation series issues.
Also reproduced is the press release of June 10, 1968, which is representative
of releases announcing the results of the offerings. Following the press releases
is a table of data for each issue issued during the fiscal year.
PRESS RELEASE OF JUNE 5, 1968
The Treasury Department, by this public notice, invites tenders for two
series of Treasury bills to the aggregate amount of $2,700,000,000 or thereabouts,
for cash and in exchange for Treasury bills maturing June 13, 1968, in the
amount of $2,600,476,000, as follows :
91-day bills (to maturity date) to be issued June 13, 1968, in the amount of
$1,600,000,000, or thereabouts, representing an additional amount of bills dated
March 14,1968, and to mature September 12,1968, originally issued in the amount
of $1,000,290,000, the additional and original bills to be freely interchangeable.
182-day bills, for $1,100,000,000, or thereabouts, to be dated June 13, 1968,
and to mature December 12,1968.
The bills of both series will be issued on a discount basis under competitive
and noncompetitive bidding as hereinafter provided, and at maturity their face
amount will be payable without interest. They will be issued in bearer form
only, and in denominations of $1,000, $5,000, $10,000, $50,000, $100,000, $500,000
and $1,000,000 (maturity value).
Tenders will be received at Federal Reserve Banks and Branches up to the
closing hour, 1:30 p.m., eastern daylight saving time, Monday, June 10, 1968.
Tenders will not be received at the Treasury Department, Washington. Each
tender must be for an even multiple of $1,0()0, and in the case of competitive
tenders the price offered must be expressed on the basis of 100, with not more
than three decimals, e.g., 99.925. Fractions may not be used. It is urged that
tenders be made on the printed forms and forwarded in the special envelopes
which will be supplied by Federal Reserve Banks or Branches on application
therefor.
Banking institutions generally may submit tenders for account of customers
provided the names of the customers are set forth in such tenders. Others than
banking institutions will not be permitted to submit tenders except for their
own account. Tenders will be received without deposit from incorporated banks
and trust companies and from responsible and recognized dealers in investment
securities. Tenders from others must be accompanied by payment of 2 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, tenders will be opened at the Federal
Reserve Banks and Branches, following which public announcement will be
made by the Treasury Department of the amount and price range of accepted
bids. Those submitting tenders will be advised of the acceptance 'or rejection
thereof. The Secretary of the Treasury expressly reserves the right to accept or
reject any or all tenders, in whole or in part, and his action in any isuch respect
shall be final. Subject to these reservations, noncompetitive tenders for each issue
for $200,000 ior less without stated price from any one bidder will be accepted in
full at the average price (in three decimals) of accepted competitive bids for the
respective issues. Settlement for accepted tenders in accordance with the bids
must be made or completed at the Federal Reserve Bank on June 13,1968, in cash
or other iminediately available funds or in a like face amount of Treasury bills
maturing June 13, 1968. Cash and exchange tenders will receive equal treatment.
Cash adjustments will be made for differences between the par value of maturing
bills accepted in exchange and the issue price 'of the new bills.
EXHIBITS
147
The income derived from Treasury bills, whether interest or gain from the sale
or other disposition of the bills, does not have any exemption, as such, and loss
from the sale or other disposition of Treasury bills does not have any special
treatment, as such, under the Internal Revenue Code of 1954. The bills are
subject to estate, inheritance, gift or other excise taxes, whether Federal or
State, but are exempt from all taxation now or hereafter imposed on the principal
or interest thereof by any State, or -any of the possessions of the United States,
or by any local taxing authority. For purposes of taxation the amount of discount
at which Treasury bills are originally sold by the United States is considered to
be interest. Under sections 454(b) and 1221(5) of the Internal Revenue Code of
1954 the amount of discount at which bills issued hereunder are sold is not considered to accrue until such bills are sold, redeemed or otherwise disposed of, and
such bills are excluded from consideration as capital assets. Accordingly, the
owner of Treasury bills (other than life insurance companies) issued hereunder
need include in his income tax return only the difference between the price paid
for such bills, whether on original issue or on subsequent purchase, and the
amount actually received either upon sale or redemption at maturity during
the taxable year for which the return is made, as ordinary gain or loss.
Treasury Department Circular No. 418 (current revision) 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.
PRESS RELEASE OF JANUARY 3, 1968
The Treasury Department, by this public notice, invites tenders for $2,500,000,000, or thereabouts, of 161-day Treasury bills (to maturity date), to be
issued January 15,1968, on a discount basis under competitive and noncompetitive
bidding as hereinafter provided. The bills of this series will be designated Tax
Anticipation Series and represent an additional amount of bills dated October 9,
1967, to mature June 24, 1968, originally issued in the amount of $3,005,517,000.
The additional and original bills will be freely interchangeable. They will be
accepted at face value in payment of income taxes due on June 15,1968, and to
the extent they are hot presented for this purpose the face amount of these bills
will be payable without interest at maturity. Taxpayers desiring to apply these
bills in payment of June 15, 1968, income taxes may submit the bills to a Federal
Reserve Bank or Branch or to the Office of the Treasurer of the United States,
Washington, not more than 15 days before that date. In the case of bills submitted in payment 'of income taxes of a corporation they shall be accompanied by a
duly completed Form 503 and the office receiving these items will effect the deposit
on June 15, 1968. In the case of bills isuhmitted in payment of income taxes of all
other taxpayers, the office receiving the bills will issue receipts therefor, the original of which the taxpayer ishall 'submit on or before June 15,1968, to the District
Director of Internal Revenue for the District in which such taxes are payable.
The bills will he issued in bearer form only, and in denominations of $1,000,
$5,000, $10,000, $50,000, $100,000, $500,000, and $1,000,000 (maturity value).
Tenders will be received at Federal Reserve Banks and Branches up to the
closing hour, 1: 30 p.m., eastern standard time, Tuesday, January 9,1968. Tenders
will not be received at the Treasury Department, Washington. Each tender must
be for an even multiple of $1,000, and in the case of competitive tenders the price
offered must be expressed on the basis of 100, with not more than three decimals,
e.g., 99.925. Fractions may not be used. It is urged that tenders be made on the
printed forms and forwarded in the special envelopes which will be supplied by
Federal Reserve Banks or Branches on application therefor.
Banking institutions generally may isubmit tenders for account of customers
provided the names of the customers are set forth in such tenders. Others than
banking institutions will not be permitted to submit tenders except for their own
account. Tenders will be received without deposit from incorporated banks and
trust companies and from responsible and recognized dealers in investment securities. Tenders from others must be accompanied by payment of 2 percent of the
face amount of Treasury bills applied for, unless the tenders are accompanied by
an express guaranty of payment hy 'an incorporated bank or trust company.
All bidders are required to agree not to purchase or to sell, or to make any
agreements with respect to the purchase or sale or other disposition of any bills
148
19 68 REPORT OF THE SECRETARY OF THE TREASURY
of this issue at a specific rate or price, until after 1:30 p.m., eastern standard
time, Tuesday, January 9,1968.
Immediately after the closing hour, tenders will be opened at the Federal
Reserve Banks and Branches, following which public announcement will be
made by the Treasury Department of the amount and price range of accepted
bids. Those submitting tenders will be advised of the acceptance or rejection
thereof. The Secretary of the Treasury expressly reserves the right to accept or
reject any or all tenders, in whole or in part, and his 'action in any such respect
shall be final. Subject to these reservations, noncompetitive tenders for $400,000
or less without stated price from any one bidder will be accepted in full at the
average price (in three decimals) of accepted competitive bids. Payment of
accepted tenders at the prices offered must be made or completed at the Federal
Reserve Bank in cash or other immediately available funds on January 15, 1968,
provided, however, any qualified depositary will be permitted to make payment .
by credit in its Treasury tax and loan account for Treasury bills -allotted to it
for itself and its customers up to any amount for which it shall be qualified in
excess of existing deposits when so notified by the Federal Reserve Bank of its
District.
The income derived from Treasury bills, whether interest or gain from the sale
or other disposition of the bills, does not have any exemption, 'as such, and loss
from the sale or other disposition of Treasury bills does not have any special
treatment, as such, under the Internal Revenue Code of 1954. The bills are subject to estate, inheritance, gift or other excise taxes, w^hether Federal or State,
ibut 'are exempt from all taxation now or hereafter imposed on the principal or
interest thereof by any State, or any of the possessions of the United States, or
by any local taxing authority. For purposes of taxation the amount of discount
at which Treasury bills are originally sold by the United States is considered
to be interest. Under sections 454(b) and 1221(5) of the Internal Revenue Code
of 1954 the 'amount of discount 'at which bills issued hereunder are sold is not
considered to accrue until such bills are sold, redeemed or otherwise disposed of,
and such bills are excluded from consideration as capital assets. Accordingly, the
owner of Treasury bills (other than life insurance companies) issued hereunder
need include in his income tax return only the difference between the price paid
for such bills, whether on original issue 'or on subsequent purchase, 'and the
amount actually received either upon sale or redemption at maturity during the
taxable year for which the return is made, as ordinary gain or loss.
Treasury Department Circular No. 418 (current revision) 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.
PRESS RELEASE OF JUNE 10, 1968
The Treasury Department announced that the tenders for two series of Treasury bills, one series to be an additional issue of the bills dated March 14, 1968,
and the other series to be dated June 13, 1968, which were offered on June 5,
1968, were opened at the Federal Reserve Banks today. Tenders were invited for
$1,600,000,000, or thereabouts, of 91-day bills and for $1,100,000,000, or thereabouts, of 182-day bills. The details of the two series are as follows:
91-day Treasm-y biUs
maturing Sept. 12, 1968
Range of accepted coinpetitive bids
Price
High
Low
Average
198.669
2 98.662
98.556
Appi:oximate
equivalent
annual rate
Percent
5.661
6.728
< 5. 713
182-day Treasury biUs
maturing Dec. 12, 1968
Price
97.088
3 97.067
97. 073
Approximate
equivalent
annual rate
Percent
6.760
5.802
* 5. 790
1 Excepting 5 tenders totaling $600,000.
2 69 percent of the amount of 91-day bills bid for at the low price was accepted.
3 47 percent of the amount of 182-day bills bid for at the low price was accepted,
* These rates are on a bank discount basis. The equivalent coupon issue yields are 5.S 1 percent for the
91-day biUs. and 6.05 percent for the 182-day biUs.
EXHIBITS
149
Total tenders applied for and accepted hy Federal Reserve districts
District
Applied for
Boston
NewYork....:
Philadelphia
Cleveland..
Richmond
Atlanta
Chicago
St. Louis
Minneapolis
KansasCity
DaUas
SanFrancisco.
Total.-..
Accepted
$20,826,000
$10,826,000
1,774,081,000 1,095,211,000
28,070,000
21,070,000
48,321,000
40,321,000
15,689,000
14,689,000
43,336,000
36,336,000
372,211,000
191,231,000
43,127,000
33,424,000
21,642,000
19,565,000
43,832,000
37,832,000
23,698,000
15,598,000
193,390,000
84,269,000
2,628,123,000 11,600,372,000
Applied for
$3,143,000
1,326,213,000
19,637,000
31,865,000
6,038,000
29,821,000
328,069,000
23,699,000
16,064,000
20,183,000
17,828,000
218,513,000
2,041,063,000
1 Includes $277,907,000 noncompetitive tenders accepted at the average price of 98.656.
2 Includes $130,718,000 noncompetitive tenders accepted at the average price of 97.073.
318-223—69
12
Accepted
$2,143,000
819,563,000
11,637,000
18,815,000
4,038,000
18,994,000
117,669,000
13,999,000
14,064,000
13,183,000
9,828,000
56,313,000
21^ IQO, 136, 000
Ol
O
Summary of information pertaining to Treasury hills issued during the fiscal year 1968
[DoUar amounts in thousands]
Maturity value
Date of
issue
Date of
maturity
Days to
maturity i
Prices and rates
Tenders accepted
Total
applied
for
Total
accepted
On
competitive
basis
On noncompetitive
basis
Amount
maturing
on issue
date of
Average EquivaHigh
Low
new
In
price
lent
Price. EquivaPrice
Equiva- offering
exchange
per
average
per
lent rate
per
lent rate
hundred
rate
(percent) hundred (percent) hundred (percent)
Total bids accepted
For
cash
Competitive bids accepted
S3
>d
O
S3
O
"^
REGULAR WEEKLY
1967
6
6
13
13
20
20
27
27
Aug. 3
3
10
10
17
17
24
24
31
31
.Sept. 7
7
14
14
21
21
28
28
July
Oct. 5, 1967
Jan. 4, 1968
Oct. 13, 1967
Jan. 11, 1968
Oct. 19, 1967
Jan. 18, 1968
Oct. 26, 1967
Jan. 26, 1968
Nov. 2 1967
Feb. 1, 1968
Nov. 9 1967
Feb. 8, 1968
Nov. 16 1967
Feb. 16, 1968
Nov. 24 1967
Feb. 23, 1968
Nov. 30 1967
Feb. 29, 1968
Dec. 7, 1967
Mar. 7, 1968
Dec. 14, 1967
Mar. 14, 1968
Dec. 21, 1967
Mar. 21, 1968
Dec. 28, 1967
Mar. 28, 1968
91 $1,989,207
182 1,699,442
92 2,206,559
182 1,646,244
91 2,404, 610
182 1,867,034
91 2, 366, 059
182 2, 029,634
91 2,367,793
182 2,019,129
91 2,422,299
182 1, 980,610
91 2,347, 546
182 1,979,946
92 2, 232, 607
183 2, 023, 049
91 2,367, 239
182 2,195, 568
91 2, 678,904
182 1, 633, 476
91 2,162,113
182 1, 793, 449
91 2, 004, 219
182 1,810, 313
91 2,821, 466
182 1,844, 720
$1,301, 602
1, 000,092
1, 400,319
1, 000,444
1,400,893
1, 000, 696
1, 400,678
1, 000,293
1, 404,964
1, 000,357
1, 400,251
1, 000, 492
1,399, 766
1, 000,669
1,401, 656
1,001, 494
1,400,443
1, 001,441
1, 400,911
1, 001, 208
1, 400, 501
1, 000,627
1,399, 965
1,000, 249
1, 401,164
1, 000, 271
$1,073,102
895,148
1,100,726
863,783
1,131,516
870,925
1,150,316
880, 627
1,178,178
869, 009
1,166, 275
874, 415
1,166,568
868,866
1,192, 017
875, 015
1,177, 049
870,818
1,199,280
892, 523
1,146,824
856, 033
1,140, 000
857,780
1,181, 532
866, 426
$228, 400 $1,012,668
767,314
104,944
299,593 1,236,200
146,661
861,417
269,377 1, 072,490
129,771
772,089
250,362 1,124,212
119,666
746,159
226,786
999,161
131,348
798,578
233,976 1, 251, 551
126, 077
838,124
233,197 1,169,777
131,703
836, 719
209, 639 1, 091,888
126,479
821, 282
223,394 1, 091,125
130, 623
869, 669
201, 631 1, 211,849
108, 686
868, 080
253,677 1,120, 497
144, 494
795, 949
259,965
1, 052, 721
142,469
764,780
219,622 1, 016,122
133,845
757,139
$288,834
232.778
164,119
139,027
328,403
228,607
276, 466
264,134
405,803
201.779
148,700
162,368
239, 988
163,860
309,768
180,212
309,318
131,882
189, 062
133,128
280, 004
204, 578
347,244
236,469
385,032
243,132
98.918
97.616
98.905
97,630
98.927
97.601
98.882
97.460
98.943
97. 665
98.945
97.595
98.940
97.678
98.892
97.498
98.865
97.476
98.907
97.591
98.898
97.497
98.865
97.473
98.830
97.400
4.279
4.716
4.286
4.689
4.244
4.745
4.424
5.044
4.181
4.639
4.173
4.767
4.194
4.791
4.334
4.922
4.492
4.994
4.324
4.765
4.358
4.952
4.489
4.998
4.628
6.143
2 98.958
97.700
98.918
97.652
2 98.933
97.614
98.916
2 97. 470
98.956
97.674
98. 956
97.610
98.948
97. 588
2 98. 905
97.624
98.871
97.484
98.912
97.604
2 98. 906
97.610
2 98.875
97.490
2 98.834
97.406
4.122
4.549
4.234
4.644
4.221
4.720
4.288
5.004
4.130
4.601
4.130
4.727
4.162
4.771
4.285
4.871
4.466
4.977
4.304
4.739
4.328
4.926
4.451
4.965
4.613
5.131
97,565
98.899
97.605
98.924
97. 694
98.874
97.428
98.941
97.647
98.934
97. 578
98.934
97.568
98.884
97. 489
98.861
97.472
98. 904
97.672
98.891
97.490
98.856
97. 462
98.827
97.394
4.391
4.816
4.308
4.737
4.257
4.759
4.455
5.087
4.189
4.654
4.217
4.791
4.217
4.811
4.370
4.940
4.506
5.000
4.336
4.803
4.387
4.965
4.526
6.020
4.640
5.155
$1,301,040
1, 001,157
1,301,306
1, 000,205
1,300,505
1, 000,906
1,300,868
999,932
1,300,949
1, 002,103
1,301,014
1, 000,116
1, 300,565
1, 001,414
1,299,969
1, 000,119
1,300,390
1, 004,485
1, 300, 021
1, 000, 488
1, 300,002
1, 001, 567
1, 299,958
1,000,191
1,300,206
1, 000, 402
Ul
o
S3
>
S3
O
• ^
W
S3
>
Ul
d
S3
Oct.
Nov.
Dec.
6
5
13
13
19
19
26
26
2
2
9
Jan. 4
Apr. 4
Jan. 11
Apr. 11
Jan. 18
Apr. 18
Jan. 25
Apr. 26
Feb. 1
May 2
Feb. 8
9
16
16
24
24
30
30
7
7
14
14
21
21
28
28
May
Feb.
May
Feb.
May
Feb.
May
Mar.
June
Mar.
June
Mar.
June
Mar.
Jime
9
15
16
23
23
29
31
7
6
1413
21
20
28
27
91
182
90
181
91
182
91
182
91
182
91
182
91
182
91
181
91
183
91
182
91
182
91
182
91
182
2,064, 675
1,907,210
2,183, 088
1,892,102
2, 452,235
2,006,089
2,756,896
1, 964,467
2,285,747
1,911, 495
2,381, 611
1, 756, 777
2, 628,447
1, 651,536
3,037,613
2, 289,430
2, 705,385
2,146, 469
2, 761,841
2, 415,777
2, 489,201
1, 974, 019
2, 729, 619
2,304, 214
2,450, 629
2,062,908
1, 400, 631
1, 000,306
1, 501,302
1,000,840
1, 500,372
1, 000,119
1, 501,091
1,000,763
1,601,073
999,896
1, 501, 475
1,000,647
1,500,890
999,947
1,499,996
1,000, 010
1,502, 081
1,002, 582
1,500,259
1,000, 639
1,600,933
1,000,357
1,506, 307
1,006,112
1, 502,159
1,003, 266
1,173,460
862, 033
1,263, 047
838,865
1,267, 689
848,244
1,259,860
861, 617
1,290,371
873,877
1, 279,136
867,320
1,272, 740
851,448
1,300,379
877,927
1,283,103
872,934
1,284,087
866, 795
1,263,069
840,084
1,292,034
864,303
1,287, 261
849, 686
227,171 1,071, 492
148,272
777, 662
248,265 1,192,963
161,975
817,163
232, 683 1,237,294
151,875
856,704
241,231 1,139,587
139,146
758,861
210,702 1, 065, 966
126, 019
747, 041
222,339 1, 245,360
133,327
767, 294
228,150 1,293,407
148,499
826, 606
199, 617 1,169, 517
122,083
748,003
218,978 1,065,018
129, 648
747, 221
216,172 1, 111, 647
133,844
766,066
237,864 1,183, 825
160,273
833,632
214,273 1,176,426
141,809
675,007
214,898 1,166, 264
153,580
759,166
329,139
222,643
308,349
183,687
263,078
143,415
361,504
241,902
435,117
252,856
256,115
233,353
207,483
173,341
340, 479
252,007
437,063
265,361
388, 712
234,573
317,108
166,825
329,881
331,105
345,895
244,100
98.869
97.427
98.859
97.476
98.818
97.389
98.838
97.409
98.862
97.450
98.819
97.381
98.825
97.394
98.739
97.226
98.747
97.186
98.739
97.179
98.751
97.223
98. 704
97.139
98.739
97.212
4.513
5.089
4.663
• 5.022
4.678
5.165
4.597
5.124
4.543
5.043
4.674
6.180
4.648
5.154
4.988
6.517
4.957
5.535
4.988
5.679
4.943
5.493
5.128
5.659
4.990
5.515
2 98.868
2 97.440
98.870
97.491
98.827
2 97. 403
98.841
97.421
98.860
97.453
2 98.827
97.406
98.834
97.411
98.751
2 97.256
98.762
97.206
98.746
97.190
2 98.758
2 97.238
98.723
2 97.189
98.748
2 97.224
4.478
5.064
4.520
4.990
4.640
5.137
4.686
5.101
4.510
5.038
• 4,640
5.131
4.613
5.121
4.941
5.460
4.937
6.496
4.961
5.558
4.913
5.463
5.052
5.560
4.953
5.491
98.852
97.418
98.852
97. 467
98.808
97.376
98.836
97. 402
98.848
97.442
98.814
97.369
98.822
97.382
98.735
97.204
98.743
97.182
98.736
97.174
98.746
97.215
98.696
97.131
98.730
97.201
4.542
5.107
4.592
5.038
4.716
5.190
4.606
5.139
4.567
5.060
4.692
5.204
4.660
5.178
5.004
5.561
4.973
6.544
6.000
5.590
4.961
5.609
5.159
6.676
5.024
5.536
1, 301, 502
1,000,743
1, 400,319
1,000,667
1,400,893
1,000, .713
1, 400,678
1,000,267
1, 404, 964
1,000.332
1,400,261
1,000,103
1,399, 765
1,000,647
1,401,656
1,000,329
1,400, 443
1,000,993
1,400,911
1,000, 626
1,400,501
fet
1,000,134
X
1,399,965
hrt
1,000,060
H
1,401,154
W
1,000,439
J:^
ui
1968
Jan.
4 Apr. 4
4 July 5
11 Apr. 11
11 July 11
18 Apr. 18
18 July 18
25 Apr. 25
25 July 25
Feb.
1 May 2
1 Aug. 1
8 May 9
8 Aug. 8
15 May 16
15 Aug. 15
23 May 23
23 Aug. 22
29 May 31
29 Aug. 29
Footnotes at end of table.
91
183
91
182
91
182
91
182
91
182
91
182
91
182
90
181
92
182
2,376,761
2,063,179
2,413,567
2,001,875
3, 562, 684
2,104,154
3,217,925
2, 680,152
2, 469,866
1, 918,070
2,285,646
1, 683, 660
2, 618,857
2, 219, 671
2, 264,646
1,846,353
2,510,045
2,052,325
1,501, 231
1,001,047
1,502,487
1,001,879
1, 602,169
1,000, 753
1,503,461
1,002,368
1,600,211
999, 988
1,601,384
1, 000, 905
1,501,334
1, 001, 918
1, 600, 893
1,000,178
1,600,576
1,000, 438
1, 285, 229
874,579
1, 219,310
813,098
1,262, 689
849,978
1,248,002
862,476
1,265,817
869,933
1,266,964
884, 666
1, 277,552
882,648
1,276,569
877,492
1,358, 701
874,485
216,002
126, 468
283,177
188, 781
249,480
160,776
255,469
139, 892
244,394
130,065
236,420
116,240
223,782
119,270
224,324
122, 686
241,875
125,953
1,104,513
758,476
1,231,876
798,864
1, 094,379
768, 032
1,143,384
799, 590
1,183,007
738,800
1,156,015
769,193
1, 267,470
869,863
1,122,985
776,981
1,176,165
758, 744
396, 718
242,571
270, 611
203,015
407, 790
232, 721
360,077
202, 778
317,204
261,188
345,369
231,712
243,864
132,055
377,908
223,197
425,421
241,694
98.710
97.157
98.716
97.282
98. 718
97.352
98.719
97.303
98.775
97.494 •
98.747
97.412
98.726
97.333
98.766
97.419
98.706
97.353
5.104
6.693
6.081
5.376
5.070
6.238
5.067
5.334
4.846
4.956
4.957
5.120
6.040
6.276
4.939
6.134
5.065
5.235
98.722
97.168
98.731
2 97.301
98.723
97.360
98.728
2 97.318
2 98.783
2 97.616
2 98.762
2 97.442
98.734
97.354
98.774
97.433
98.721
97.360
5.056
5.671
5.020
6.339
6.052
5.222
5.032
6,305
4.815
i. 915
4.898
5.060
5.008
6.234
4.904
5.106
5.006
5.222
98.700
97.146
98.708
97.272
98.716
97.348
98.717
97.300
98.767
97.478
98.739
97.397
98.720
97.326
98.758
97.411
98.700
97.350
6.143
5.614
5.111
5.396
5.080
5.246
5.076
6.341
4.878
4.989
4.989
6.149
5.064
5.289
4.968
5.149
5.087
5.242
1,400, 631
1,000,092
1, 501,302
1,000, 444
1,500,372
1,000,696
1,501,091
1,000,293
1,501, 073
1,000,367
1,501,475
1,000,492
1,500,890
1,000, 569
1, 499,996
1,001,494
1,602,081
1,001, 441
Ol-
Summary of information pertaining to Treasury bills issued during the fiscal year 1968—^Continued
or
to
[Dollar amounts in thousands]
M a t u r i t y value
Prices a n d rates
T e n d e r s accepted
D a t e of
•issue
1968
Mar.
7
7
14
14
21
21
28
28
Apr.
4
4
11
11
18
18
25
25
May
2
2
9
9
16
16
23
23
31
31
June
6
6
13
13
20
20
27
FRASER27
D a t e of
maturity
1968
June 6
Sept. 5
J u n e 13
Sept. 12
J u n e 20
S e p t . 19
J u n e 27
S e p t . 26
July 5
Oct. 3
J u l y 11
O c t . 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 . 16
N o v . 14
A u g . 22
N o v . 21
A u g . 29
N o v . 29
Sept. 5
Dec. 5
Sept. 12
D e c . 12
Sept. 19
D e c . 19
S e p t . 26
D e c . 26
Digitized for
D a y s to
maturity
Total
applied
for
Total
accepted
On
competitive
basis
91 $2,732,066 $1, 601,583 $1,365, 293
182
1,930, 961 1, 000,041
880, 722
91 2,388, 799 1, 600,119
1,328, 016
182 1, 742, 890 1, 000, 290
869, 028
91 2,469, 617 1, 600,198 1,329, 980
182 1,847,818
1,000, 061
876, 423
91 3, 426,841 1, 607, 732 1,340,361
182
1, 836, 261 1, 000,527
879, 074
92
2,178, 883 1, 600, 433 1,331,074
182
1, 601, 045 1, 000, 448
882,153
91 2,394, 685
1, 600, 486 1, 288, 548
182
1,883, 624 1,000, 611
866, 248
91 3, 256,069
1, 602, 462 1,325, 843
182
2, 492, 608 1,102, 644
961, 784
91 2, 614, 047 1, 601, 006 1,308, 818
182 2, 328, 060 1,100, 682
953, 834
91 2, 703, 982 1, 600, 432 1,324, 416
182
1, 966,240
1,100,119
966, 767
91 2, 493, 576 1, 600, 291 1, 345, 665
182
2,176, 299
1,101, 578
980, 894
91 2, 416, 860 1, 600, 009 1,336, 426
182 2, 064, 872 1,101, 062
967, 489
91 2, 526,110
1, 600, 680 1, 357,104
182
2,149, 839 1,100,119
985, 637
2, 291, 636 1, 600, 036 1, 341, 943
90
182
2,164, 206
1, 099, 821
962, 403
91 2, 409, 768 1, 600,368 1, 349, 213
182 2, 365, 290 1, 099,439
• 979, 454
91 2, 628, 238 1, 600, 487 1,322, 465
182
2, 041, 048 1,100,121
969, 418
91
2,590,127
1, 600, 480 1, 316,134
182
968, 047
1,968, 531 1,100, 851
91 2, 376, 249 1, 699, 999 1,319, 474
182
1,967, 927
1,105, 037
952, 322
O n noncompetitive
basis
T o t a l b i d s accepted
For
ca^h
In
exchange
$246, 290 $1,175,031 $426,562
119,319
777,826
222, 216
272,103
1,182, 460
417, 659
131, 262
797,116
203,174
270, 218 1, 291, 618 308, 680
123,628
736, 967 264, 084
267,381
1, 206, 308 401, 424
121,463
798,122
202,405
269,369
1, 203, 375 397, 068
118,296
748, 318 252,130
311,937
1,289, 613 310, 972
134, 263
827, 848 172, 663
276, 619 1, 216, 052 386,410
140,860
878, 659 223,985
292,188
1, 205, 487 396,519
146, 848
819, 020 281, 662
276, 016 1,183, 818 416, 614
133, 352
827, 779 272, 340
254, 626 1, 260, 228 340, 063
120, 684
861, 626 239, 952
263, 583 1, 273, 683 326,326
133,573
848, 887 252,175
243, 676 1,216, 740 383, 940
114, 482
797, 610 302, 609
268, 093 1,204, 808 396, 228
137, 418
838, 666 261, 265
261,165
1, 238,379 361, 989
119,985
866, 866 232,573
278, 022 1,153, 694 446, 893
130, 703
836, 668 263, 453
284,346
1,173, 668 426, 822
142, 804
796,369
304, 492
280, 625 1,167, 275 432, 724
162, 716
801,319
303, 718
C o m p e t i t i v e b i d s accepted
Average EquivaHigh
Low
price
lent
per
average . P r i c e
EquivaPrice
Equivahundred
rate
per
lent r a t e
per
lent r a t e
(percent) h u n d r e d (percent) h u n d r e d (percent)
98.736
97.385
98. 709
97.310
98.664
97. 281
98. 689
97.320
98. 686
97.338
98.658
97.270
98.619
97.185
98.599
97.124
98. 610
97.163
98.608
97.120
98. 695
97.093
98.522
96.969
98.676
97.033
98.672
97.119
98.566
97.073
98.690
97.162
98.676
97.227
4.999
5.172
5.107
5.321
6.285
5.377
6.185
5.301
5.146
5.266
5.310
6.399
5.462
6.568
5.643
6.689
6.498
5.611
6.606
5.697
5.557
5.750
5.848
5.996
6.697
5.869
5.660
5.699
5.711
5.789
5.579
5.633
5.237
5.486
98.748
97.392
2 98.721
2 97.335
2 98.676
97.298
98.691
97.349
98.711
97.362
2 98.673
297.286
98. 626
97.200
98. 614
2 97.138
98. 617
97.176
2 98.615
97.135
98. 607
2 97.108
2 98.534
2 96.985
98.683
97.039
98. 579
2 97.128
2 98. 669
97. 088
98. 595
97.170
98.690
2 97. 250
4.963
6.159
6.060
5.271
5.238
5.345
6.178
6.244
5.044
6.238
5.250
5.368
5.436
5.538
6.483
5.661
5.471
5.686
6.479
6.667
5.511
5.720
5.800
5.964
5.668
5. 867
6.622
5.681
5.661
5.760
5.658
5.698
6.182
6.440
98.731
97.374
97.704
97.300
98.666
97.271
98.689
97.310
98.673
97.320
98.649
97.260
98.616
97.180
98. .593
97.114
98. 606
97.164
98. 603
97.116
98.590
97.084
98.517
96.959
98. 566
97.026
98.564
97.109
98.552
97. 067
98.684
97.142
98. 649
97. 206
6.020
6.194
5.127
5.341
5.321
6.398
5.186
6.321
5.193
6.301
5.345
5.420
6.475
6.678
5.666
5.709
6.615
5.629
6.527
5.705
5.678
5.768
5.867
6.016
6.736
5.883
5.681
5.718
5.728
6.802
5.602
6.653
6.345
6.629
Amount
maturing
o n issue
d a t e of
new
offering
1—»
05
00'
S3"'
H
^.
$1, 500,259
1, 001,208
1, 500, 933
1, 000, 527
1, 606, 307
1, 000, 249
1, 602,160
1, 000, 271
1, 501, 231
1, 000, 305
1, 502, 487
1, 000, 840
1, 502,169
1, 000,119
1. 503, 461
i; 000, 763
1, 500, 211
999, 896
1, 601, 384
1,000, 647
1, 501, 334
999, 947
1, 50O, 893
1, 000, 010
1, 600, 576
1, 002, 682
1, 601,583
1, 000, 639
1, 600,119
1, 000,357
1, 600,198
1, 006,112
1, 607, 732
1, 003, 266
a
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2
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w
^
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REGULAR
1967
J u l y 31
31
A u g . 31
31
1968
A p r . 30
J u l y 31
M a y 31
A u g . 31
Oct. 2 J u n e 30
2 3 S e p t . 30
31 J u l y 31
31
Oct. 31
N o v . 30 A u g . 31
30
N o v . 30
1968
Jan. 2
Sept. 30
2 3 D e c . 31
31
Oct. 31
31 J a n . 31,1969
F e b . 29
N o v . 30,1968
29
F e b . 28,1969
A p r . 1 D e c . 31,1968
1969
1 3 Mar. 31
30 J a n . 31
30 A p r . 30
M a y 31 F e b . 28
31 M a y 31
MONTHLY
274 $1,196, 723
366 2, 687, 493
274
1, 297,305
366
1, 901, 081
272
1, 256, 519
366
1, 740, 656
274
1,281,979
366 2, 073, 639
275
1, 263, 705
366
1, 766, 987
$500,273
1,000, 661
600, 686
1, 000,336
500, 005
1, 000,206
500, 629
1, 001,770
500,175
1, 000,262
$481, 456
953,292
479, 882
957, 886
478,358
943,338
485, 661
961,988
483,938
965, 857
$18, 818
47, 259
20,804
42, 460
21,647
56, 868
14, 968
39, 782
16, 237
34,406
$440, 063
759, 879
349,975
774, 810
381, 611
769, 854
379, 958
789,957
424,491
774, 386
$60,210
240, 672
150,711
225, 526
118,394
230,352
120, 571
211,813
75, 684
225, 877
96. 070
94.764
96.120
94. 816
96.113
94. 791
96. 956
94. 610
96. 858
94. 479
5.164
6.160
6.097
6.100
6.144
5.124
6.313
6.301
5.422
5.431
2 96. 084
2 94. 774
96.164
2 94. 881
96.154
94. 835
2 95. 982
2 94. 637
95. 883
94. 525
5.145
96. 038
5.140
94. 744
5.040
96. 099
6.035
94. 774
5.090
96. 096
6.080
94. 745
5.279
95. 944
5.275 => 94.592
5.390
95. 838
5.385
94.429
6.206
5.170
5.125
5.140
5.168
5.169
5.329
5.319
5.448
5.480
$500,370
994, 844
500, 717
1, 000,051
600,050
900,113
501,100
904, 640
499,966
900,493
272
366
274
366
275
365
274
1,137,110
1,492,945
1,209, 230
1, 604,238
1,348,327
1, 519, 526
1,119, 729
500,190
999,946
500,170
1, 000, 078
500,267
1, 001,786
499, 649
483,216
953, 599
485,372
956,303
484,400
973, 641
484,346
16,975
46,346
14, 798
43,775
15,857
28,145
15, 203
311, 616
728, 529
336, 647
719, 059
349,965
750, 931
339, 098
188,576
271,416
163,523
281, 019
150,302
250, 855
160,461
95. 803
94.364
96. 001
94.645
95.998
94.646
95.872
5.656
5.644
5.254
5.267
6.240
5.281
6.423
95. 833
94.408
96. 028
2 94. 685
96. 021
2 94. 708
95. 922
6.615
6.600
5.219
6.228
5.209
5.220
5.358
95.777
94. 307
96. 970
94. 576
96.975
94. 587
95. 840
5.589
5.600
5.295
5. 3:35
6. 269
6.339
5.466
600, 091
901, 030
500,445
900, 967
600, 040
901, 029
500, 329
365
276
365
273
365
1,622, 679
1,439,641
2,304,585
1,140,194
1,861, 382
1,000,119
500,387
1,000, 784
500,444
1,002, 217
968,236
483,196
962,463
486,451
973,689
31,883
17,191
38,331
13,993
28, 528
736, 300
350,151
726, 717
360, 270
721, 678
263,819
160,236
274, 067
150,174
280,539
94.449
95. 657
94.268
95.386
93. 837
6.476
5.665
5.663
6.086
6.079
2 94. 536
95. 668
94.272
95.420
93. 881
5.389
5.650
5.650
6.040
6.035
94.373
95. 645
94. 241
95.363
93. 805
5.550
5.680
5.680
6.128
6.110
900, 047
600, 273
902, 021
600, 686
900,146
H
><
U
5
Ul
(4)
Footnotes at end of table.
Ol
CO
Ol
Summary of information pertaining to Treasury bills issued during the fiscal year 1968—^Continued
[DoUar amounts.in thousands]
Date of
issue
Date of
maturity
Days to
maturity 1
Tenders accepted
Total
apphed
for
Total
accepted
On
competitive
basis
Oi
Prices and rates
Maturity value
Total bids accepted
On noncompetitive
basis
For
cash
Average EquivaIn
price
lent
exchang e
per
average
hundred
rate
(percent)
Amount
maturing
Competitive bids accepted
on issue
date of
High
Low
new
Price
EquivaPrice , Equiva- offering
per
lent rate
per
lent rate
hundred (percent) hundred (percent)
oo
S3
tei
Q
o
•=1
TAX ANTICIPATION
1967
July 11
11
Oct. 9
9
1968
Jan. 15
1968
Mar. 22
Apr. 22
Apr. 22
June 24
255 $3,251,304 $2,003,379 $1,732,975
286 3,027,417 2,000,967 1,775,550
196 3,217,332 1,506, 037 1,318,800
259 3,279,317 3,005,517 2,807,350
June 24
161
6,359, 775
2,528,267
2,132,982
$270,404 $2 003 379
225,417 2,000 967
187,237 1 606 037
198,167 3 006 617
395,285
2,628,267
' The 13-week bills are additional issues of bills with an original maturity of 26 weeks,
except that when the date of maturity of either a 13-week or 26-week issue is on the last
day of a month, the bhls are additional issues of bills with an original maturity of 1 year.
The 9-month bhls are additional issues of biUs with an original maturity of 1 year.
2 Relatively small amounts of bids were accepted at a price or prices somewhat above
the high shown. However, the higher price or prices are not shown in order to prevent
an appreciable discontinuity in the range (covered by the high to the low prices shown)
which would make it misrepresentatlve.
3 Issue date on bUls is last day of previous month.
4 On July 1,1968, 273-day biUs to mature Mar. 31, 1969, were issued in the amount of
$500 miUion with an equivalent average rate of 6.745 percent, and 366-day bills, dated
June 30, 1968, were issued in the amount of $1,002 million with an equivalent average
rate of 5.732 percent.
NOTE.—The usual timing with respect to weekly issues of Treasury biUs is: Press
release inviting tenders, 8 days before date of issue; and closing date for the receipt of
tenders and press release announcing results of auction, 3 days before date of issue.
_
.
96.108
97.314
96.325
4.861
4.898
4.934
5.108
2 96. 607
2 96.171
97.327
96.381
4. 790
4. 820
4.910
5.030
.
97.738
5.058
2 97. 788
4. 946 " 97. 727
-
96.557
96. 522
96. 066
97.306
96.260
4.910 .
4.963 .
4.948 .
6.212 _
6.082 .
F i g u r e s are final a n d m a y differ from those s h o w n i n t h e press release a n n o u n c i n g
p r e l i m i n a r y results.
F o r each issue of regular w e e k l y (13-week a n d 26-week biUs) a n d regular m o n t h l y
(9-month a n d 1-year) biUs n o n c o m p e t i t i v e t e n d e r s for $200,000 or less from a n y 1 b i d d e r
w e r e accepted in full a t t h e average price of accepted c o m p e t i t i v e b i d s . F o r each issue
of tax a n t i c i p a t i o n bills t h e m a x i m u m a m o u n t for n o n c o m p e t i t i v e t e n d e r s w a s $400,000
except for t h e 196-day issue of October 9 w h e n t h e a m o u n t w a s $300,000.
AU e q u i v a l e n t rates of d i s c o u n t are on a b a n k - d i s c o u n t basis.
Qualified depositaries w e r e p e r m i t t e d t o m a k e p a y m e n t b y credit i n T r e a s u r y tax
a n d loan accounts for 100 p e r c e n t of t h e tax a n t i c i p a t i o n series issued J u l y 11 a n d J a n u a r y 15, a n d for n o t m o r e t h a n 76 p e r c e n t of t h e tax a n t i c i p a t i o n series issued October 9,
aUotted to t h e m for t h e m s e l v e s a n d their customers u p to a n y a m o u n t for w h i c h t h e y
were qualified in excess of existing deposits w h e n so notified b y t h e F e d e r a l R e s e r v e
b a n k of their district. P a y m e n t b y credit in T r e a s u r y tax a n d loan accounts for t h e
regular w e e k l y a n d regular m o n t h l y bills w a s n o t p e r m i t t e d .
Ul
te)
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EXHIBITS
155
Regulations
Exhibit 3.—Second Amendment, November 7, 1967, of Department Circular
No. 300, general regulations with respect to United States securities
TREASURY DEPARTMENT,
Washington, November 7, 1967.
Department Circular No. 300, Third Kevision, dated December 23, 1964, as
amended, is hereby further amended effective Januaiy 1, 1968, by redesignating
Subpart O (entitled "IMiscellaneous Provisions") as Subpart P, and renumbering Sees. 306.115 through 306.118 as Sees. 306.123 through 306.126, respectively,
and by inserting a new Subpart O as follows :
SUBPART O—BOOK-ENTRY PROCEDURE
Sec. 306.115. Definition of terms.
In this subpart, unless the context otherwise requires or indicates:
(a) "Reserve Bank" means a Federal Reserve Bank and its branches acting as
Fiscal Agent of the United States.
(b) "Treasury security" means a transferable Treasury bond, note, certificate
of indebtedness, or bill issued under the Second Liberty Bond Act, as amended,
in the form of a definitive Treasury security or a book-entry Treasury security.
(c) "Definitive Treasury security" means a transferable Treasuiy bond, note,
certificate of indebtedness, or bill issued under the Second Liberty Bond Act, as
amended, in engraved or printed form.
(d) "Book-enitry Treasury security" means a transferable Treasury bond, note,
certificate of indebtedness, or bill issued under the Second Liberty Bond Act, as
amended, in the form of an entry made as prescribed in this subpart on the records of a Reserve Bank.
(e) "Serially-numbered advice of transaction" means the confirmation (prescribed in Sec. 306.116) issued by a Reserve Bank which is identifiable by a
unique number and indicates that a particular written instruction to the Reserve
Bank with respect to the deposit or withdrawal of a specified book-entry Treasury
security (or securities) has been executed.
Sec. 306.116. Authority of Reserve Banks.
Each Reserve Bank is hereby authorized and directed, in accordance with the
provisions of this subpart, to (a) issue book-entry Treasury securities by means
of entries on its records which shall include the name of the depositor, the
amount, the title of the loan (or the series) and the maturity date; (b) effect
conversions between book-entry Treasury securities and definitive Treasury securities ; (c) otherwise service and maintain book-entry Treasury securities; and
(d) issue serially-numbered advices of transactions with respect to each instruction relating to the deposit or withdrawal of a book-entry Treasury security (or
securities) which has been executed. Each such advice shall confirm that bookentry Treasury securities of the amount, loan title (or series) and maturity date
specified in the depositor's instniction have been deposited or withdrawn.
Sec. 306.117. Scope of book-entry procedure.
(a) The book-entry procedure shall apply to Treasury securities now on deposit
or hereafter deposited in accounts with any Reserve Bank (1) as collateral
pledged to a Reserve Bank (in its individual capacity) for advances by it, (2)
as collateral pledged to the United States under Treasury Department Circulars
No. 92 or 176, both as revised and amended, and (3) by a member bank of the
Federal Reserve System for its sole account and in lieu of the safekeeping of
definitive Treasury securities by a Reserve Bank in its individual capacity. Any
depositor which on the effective date of this subpart has definitive Treasury securities on deposit with a Reserve Bank (in either its individual capacity or as
Fiscal Agent) for any purpose specified above or which thereafter deposits siuch
securities for any such purpose shall be deemed to have consented to their conversion to book-entry Treasury securities pursuant to the provisions of this subpart,
and in the manner and under the procedures prescribed by the Reserve Bank.
(b) The book-entry procedure may be applied to any Treasury securities now
on deposit or hereafter deposited with any Reserve Bank for any other purpose
under such terms and conditions as may be prescribed by the Reserye Bank with
the approval of the Secretary of the Treasury.
156
19 68 REPORT OF THE SECRETARY OF THE TREASURY
(c) No deposits shall be accepted under this section on or after the date of
maturity or call of the securities."^
Sec. 306.118. Pledges.
A pledge of book-entry Treasury securities, or of any interest therein, in favor
of a Reserve Bank in its own right as pledgee or in favor of the United States
as pledgee, is effected, notwithstanding any provision of law to the contrary, by
the making of an appropriate entry under paragraph (a) (1) or (2) of Sec.
306.117, of the amount of the securities pledged. The making of such entry shall
have the effect of a delivery of definitive Treasury securities in bearer form
representing the amount of the obligations pledged and shall effect a perfected
security interest therein in favor of the pledgee, who shall be a holder. No filing
or recording with a public recording office or officer shall be necessary to perfect
the pledge or security interest in book-entry Treasury securities under this
section. Pledges of definitive Treasury securities, or of any security interest
therein, to a Reserve Bank in its own right or to the United States at the time
of their conversion to book-entry Treasury securities shall be fully effective with
respect to such bookTontry Treasury securities. A Reserve Bank, when requested
by the pledgee, shall convert book-entry Treasury securities into definitive Treasury securities and deliver them to the pledgee for disposition under the applicable
pledge arrangement; and the pledge or security interest of the pledgee in the
book-entry Treasury securities prior to conversion shall continue to be fully
effective with respect to such definitive Treasury securities.
Sec. 306.119. Limitations on transfers or pledges.
Except as provided in this subpart, book-entry Treasury securities may not be
assigned, transferred, hypothecated, pledged as collateral, or used as security for
the performance of an obligation, and the Treasury Department will not recognize
any such assignment, transfer, hypothecation, pledge or use.
Sec. 306.120. Withdrawals and tranfers.^
Withdrawals and transfers of book-entry Treasury securities may be made
upon a depositor requesting (a) delivery of like definitive Treasury securities to
itself or on its order to a transferee, or (b) transfer to any transferee eligible
under Sec. 306.117. The making of any book-entry transfer by a Reserve B'ank
shall have the same effect as a delivery to the transferee of definitive Treiasury
securities in bearer form. The transfer of book-entry Treasury securities within a
Reserve Bank will be made in accordance with procedures established by the
latter not inconsistent with this subpart. The transfer of book-entry Treasury
securities between Reserve Banks will be made through a telegraphic transfer
procedure. All requests for withdrawial or for transfer must be made prior to the
maturity or date of c'all of the securities. Treasury bonds and notes which are
actually to be delivered upon withdrawal or transfer may be issued either in
registered ^ or in bearer form.
Sec. 306.121. Registered bonds and notes.
No formal lassignment shall be required for the conversion to book-entry
Treasury securities of registered Treasury securities held by a Reserve Bank
(Iin either its individual caip^acity or as Fiscal Agent) on the effective date of this
subpart for any purpose specified in Sec. 306.117(a). Registered Treasury securities deposited thereafter with a Reserve Bank for any purpose specified in Sec.
306.117 shall be assigned for conversion to book-entry Treasury securities. The
assignment, which shall be executed in accordance with the provisions of
subpart F of these regulations, so far as applicable, .shall be to "Federal Reserve
Bank of
, as Fiscal Agent of the United States, for conversion to book-entry Treasury securities."
Sec. 306.122. Servicing book-entry Treasnry securities; payment of interest,
payment at maturity or upon call.
^ The date of call as defined in these regulations (Sec. 306.2) is " t h e date fixed in the
official notice of call published in t h e Federal Register * * * on which the obligor will
make p a y m e n t of the security before m a t u r i t y in accordance with its t e r m s . "
2 There is an Appendix hereto which contains information regarding the identification of
book-entry Treasury securities for Federal income tax purposes and the accounting separation for such purposes on books of dealers. Although dealers in Treasury securities are
not eligible as dealers to have them in book-entry form under these regulations, if they or
any other depositors are dealers in other types of securities they m u s t meet the requirements
of Sec. 1236 of the I n t e r n a l Revenue Code to establish t h a t they are holding the book-entry
T r e a s u r y securities for investment.
3 Except for Treasury notes, EA and EO series.
EXHIBITS
157
Interest becoming due on book-entry Treasury securities shall be charged in
the Treasurer's account on the interest due date and remitted or credited in
accordance with the depositor's instructions. Such securities shall be redeemed
and charged in the Treasurer's account on the date of maturity, call or advance
refunding, and the redemption proceeds, priacipal and interest, shall be disposed
of in accordance with the depositor's instructions.
JOHN K. CARLOOK,
Fiscal Assistant Secretary.
APPENDIX
RECORDS FOR FEDERAL INCOME TAX PURPOSES
Section 1.1012-1 (c) of the Federal Income Tax Regulations provides certain
rules regarding the identification of securities for the purpose of determining the
basis (normally cost) and holding period of assets'—data relevant in ascertaining
the amount and nature of gain or loss upon the sale or transfer of the assets.
Subparagraph (7) of section 1.1012-1 (c) of the Income Tax Regulations
(added by Treasury Decision 6934, quoted below) provides a special rule for the
identification of a book-entry Treasury security directed to be disposed of by the
owner.^ The special rule permits the serially-numbered ladvice of transaction
(required by sec. 306.116 of the Fiscal Service Regulations to which this is
appended) issued by a Reserve Bank upon completion of a transaction, when
made pursuant to written instructions, to be used in identifying the particular
security sold or transferred. The written instruction and advice of transaction
constitute ladequate identification.
Revenue Ruling 67-419 (set forth below) particularizes the mianner in which
the identification may be made by requiring the written instruction to identify
the particular book-entry Treasury security either by purchase date and cost
or by reference, where applicable, simply to the serially-numbered advice of
transaction relating to its lacquisition. This latter method applies only to 'a limited
class of case—that is, where the securities are acquired by a Reserve Bank for
the owner in book-entry form, either upon original subscription to a Treasury
off'ering or otherwiise.^
It is important for a taxpayer to comply fully with the ^special rule of section
1.1012-1 (c) (7) of the Income Tax Regulations if it wishes to be certain that the
"first^n, first-out" (FIFO) rule of section 1.1012-1 (c) (1) of the cited regulations
will not apply to its disposition of a book-entry Treasury security.
Although dealers in any securities are not eligible as dealers to hold a
Treasury security in book-entry form under the present Fiscal Service Regulations, if they are otherwise eligible to do so, they may hold such a security in the
form of a book-entry for investment purposes. Since all dealers in securities are
subject to the requirements of section 1236 of the Internal Revenue Code, the
Revenue Ruling set forth below also provides a method for them to use in
identifying a book-entry Treasury security held for investment which satisfies
section 1236. Whenever a book-entry security is acquired on original issue or
otherwise for the.account of the owner, the Reserve Bank will issue a seriallynumbered advice. The entry on the taxpayer's books of account of the number of
the /advice, together with a description of the security acquired to which it
relates and an indication that it is held for investment, will be sufficient to
identify it as being held for investment purposes.
1 I t should be noted t h a t t h i s rule is only a p p r o p r i a t e where the disposing owner retains
one or more securities of precisely the same description which it had acquired on a different
date or a t a different price. Where a security of precisely the same description acquired
on a different date or a t a different price is not retained, there is no problem of identifying
the securities being sold or transferred, since either no others of similar description are
owned, or they are from the same lot.
2 The serially-numbered advice of t r a n s a c t i o n issued by a Federal Reserve Bank in t h i s
or any other type of case in or in connection w i t h book entry will not contain price and
date of acquisition b u t in this type of case t h e advice relating to the acquisition can be used
to identify the p a r t i c u l a r book-entry security involved. Since the mere conversion by a
Reserve Bank of definitive Treasury securities owned by a depositor into book-entry form
(or vice versa) occurs after the depositor-taxpayer's books of account properly should
reflect their acquisition, which might have been a t different times or a t different prices, the
number of a serially-numbered advice of transaction relating to such conversion affords no
adequate means of identifying a p a r t i c u l a r security for purposes of either section 1012 or
section 1236 of the I n t e r n a l Revenue Code of 1954.
158
19 68 REPORT OF THE SECRETARY OF THE TREASURY
(T.D. 6934)
Title 26—INTERNAL REVENUE
Chapter I—Internal Revenue Service, Department of the Treasury
Subchapter A—Income Tax
(INCOME TAX REGULATIONS)
PART 1—INCOME TAX; TAXABLE YEARS BEGINNING AFTER DECEMBER 31, 1953
Identification of book-entry Treasury securities
DEPARTMENT OF THE TREASURY
Office of Commissioner of Internal Revenue,
Washington, D.C. 20224
TO OFFICERS AND EMPLOYEES OF THB INTERNAL REfVENUE iSERVICE
AND OTHERS CONCERNED:
In order to modify the identification rules for purposes of determining basis
and holding period of property in the case of certain Treasury securities, paragraph (c) of Sec. i.1012-1 of the Income Tax Regulations (26 CFR Part 1)
is amended by adding a new subparagraph (7) to read as follows:
Sec. 1.1012-1 Rasis of property.
(e) Sale of stock. * * *
(7) Book-entry Treasury securities.
(i) In applying the provisions of subparagraph (3) (i) (&) of this paragraph
in the case of a sale or transfer of a book-entry Treasury security which is
made pursuant to a written instruction by the seller or transferor, the seriallynumbered advice of transaction prescribed by the Fiscal Service of the Department of the Treasury and furnished by a Reserve Bank shall constitute
confirmation as required by such subparagraph.
(ii) For purposes of this subparagraph:
{a) The term "book-entry Treasury security" means a transferable Treasury
bond, note, certificate of indebtedness, or bill issued under the Second Liberty
Bond Act (31 U.S.C. 774 (2)), as amended, in the form of an entry made as
prescribed in 31 OFR Part 306, Subpart O, on the records of a Reserve Bank
which is deposited in an account with a Reserve Bank {1) as collateral pledged
to a Reserve Bank (in its individual capacity) for advances hy it, {2) as collateral pledged to the United States under Treasury Department Circular No.
92 or 176, both as revised and amended, and {S) by a member bank of the
Federal Reserve System for its sole account for safekeeping by a Reserve Bank
in its individual capacity;
(&) The term "serially-numbered advice of transaction" means the confirmation (prescribed in 31 CFR 306.116) issued by the Reserve Bank which is
identifiable by a unique number and indicates that a particular written instruction to the Reserve Bank with respect to the deposit or withdrawal of a
specified book-entry Treasury security (or securities) has heen executed; and
(c) The term "Reserve Bank" means a Federal Reserve Bank and its branches
acting as Fiscal Agent of the United States.
Because this Treasury decision merely liberalizes the identification rules for
purposes of determining basis and holding period in the case of certain securities,
it is found that it is unnecessary to issue this Treasury decision with notice
and public procedure thereon under 5 U.S.C. 553 (b), or subject to the effective
date limitation of 5 U.S.C. 553 (d).
EXHIBITS
159
(This T r e a s u r y decision is issued under the authority contained in Section
7805 of t h e I n t e r n a l Revenue Code of 1954 (68A Stat. 917; 26 U.S.C. 7805).)
(Signed)
SHELDON IS. C O H E N ,
Commissioner of I n t e r n a l Revenue.
APPROVED: November 7, 1967
(Signed)
STANLEY S . SURREY,
Assistant Secretary of the Treasury.
SECTION 1012.—BASIS O F P R O P E R T Y — C O S T
26 C F R 1.1012-1: Basis of property.
(Also Section 1236; 1.1236-1.)
Rev. Rul. 67-419
Section 1.1012-1 (c) (7) of t h e Income T a x Regulations provides a special
rule for the identification of a "book-entry T r e a s u r y security" (which i s a "bond"
under section 1.1012-1 (c) (6) of t h e regulations) directed to be disposed of
by t h e owner who holds securities of precisely the same description which were
acquired on different dates o r a t different prices. T h i s special rule permits t h e
"serially-numbered advice of transaction" prescribed by t h e Fiscal Service of
the D e p a r t m e n t of t h e T r e a s u r y a n d furnished hy a "Reserve B a n k " ( a s those
terms a r e defined i n section 1.1012-1 (c) (7) of t h e regulations) t o satisfy t h e
requirements of section 1.1012-1 (c) (3) (i) (b) of t h e regulations for a written
confirmation if made p u r s u a n t t o a w r i t t e n instruction by t h e seller o r t r a n s feror. I n such case, if t h e written instruction identifies t h e book-entry T r e a s u r y
security t o be sold either by purchase date a n d eost, or by reference to the
serially-numbered advice of transaction relating to t h e acquisition, and a copy
thereof is associated with t h e serially-numbered advice of t r a n s a c t i o n received
from t h e Reserve B a n k upon disposition, t h e identification requirement of section
1.1012-1 (c) (3)'(i) of t h e regulations shall be considered satisfied. Compare
Rev. Rul. 61-97, C B . 1961-1, 394, which provides a rule of identification in t h e
circumstances described therein. W h e r e t h e identification requirements of section 1.1012-1 (c) (3) ( i ) of t h e regulations a r e satisfied in t h e m a n n e r provided
for labove, t h e rule s t a t e d in t h e first sentence of section 1.1012-1 (c) (1) of the
regulations will not be applied.
F o r t h e purpose of determining when a security i s clearly identified i n t h e
records of a dealer in securities a s a security held for investment within t h e
meaning of section 1236 of t h e I n t e r n a l Revenue Code of 1954, section 1.1236-1
(d) (1) of t h e regulations provides t h a t an investment security is clearly identified where t h e r e is a n accounting separation of t h e security from other securities, a s by making appropriate entries in t h e dealer's books of account to
distinguish it from inventories a n d to designate i t a s a n investment, a n d by (i)
indicating w i t h such entries the individual serial number of, or other characteristic symbol imprinted upon, t h e individual security, or (ii) adopting any other
method of identification satisfactory to the Oommissioner.
Using t h e definitions found i n section 1.1012-1 (c) (7) of t h e regulations
wherever applicable here, t h e identification of a p a r t i c u l a r book-entry T r e a s u r y
security in t h e dealer's books of account by reference t o t h e serially-numbered
advice of transaction f u m i s h e d by t h e Reserve B a n k upon t h e acquisition of
such security is a method of identification satisfactory to t h e Commissioner
under section 1.123&-l(d) (1) (ii) of t h e regulations.
Exhibit 4.—Second Supplement, F e b r u a r y 29, 1968, of D e p a r t m e n t Circular
No. 653, offering of U n i t e d S t a t e s savings bonds. Series E
TREASURY DEPARTMENT,
Washington, F e b r u a r y 29,1968.
Table 52,^ showing t h e investment yields to m a t u r i t y for Series E Savings
Bonds with issue dates from J u n e 1 through November 1, 1960, which is a p a r t
of D e p a r t m e n t Circular No. 653, Seventh Revision, dated March 18, 1966,^ a s
1 See exhibit 5.
2 See 1966> annual report, page 2.5i3.
160
19 68 REPORT OF THE SECRETARY OF THE TREASURY
amended (31 CFR, Part 316), is hereby supplemented by addition of the redemption values and investment yields for the extended maturity period, as
set forth below.
JOHN K. CARLOCK,
Fiscal Assistant Secretary of the Treasury.
Exhibit 5.—Fourth amendment, June 19, 1968, to Department Circular No. 653,
Seventh Revision, offering of United States savings bonds. Series E
TREASURY
DEPARTMENT,
Washington, June 19,1968.
Treasury Department Circular No. 653, Seventh Revision, dated March 18,
1966, as revised and amended (31 OFR Part 316), is hereby further amended
and revised as follows :
Sec. 316.1. Offering of bonds.—The Secretary of the Treasury hereby offers for
sale to the people of the United States, United States Savings Bonds of 'Series
E, hereinafter generally referred to as "'Series E bonds" or "bonds." This offering,
which shall be effeotive June 1, 1968, will continue until terminated by the Secretary of the Treasury.
Sec. 316.2. Description of bonds. * * *
(b) Denomnations and prices.—Series E bonds are issued on a discount basis.
The denominations and purchase prices are :
Denomination
$25
50
75
100
200
500
1,000
10,000
100,000 ^
*
:J:
-
«
-
Purchase
price
$18. 75
37. 50
56. 25
75. 00
150. 00
375. 00
750. 00
7, 500. 00
75, 000. 00
:!c
(e) Investment yield (interest).—The investment yield (interest) on a Series
E bond with issue date of June 1, 1968, or thereafter, will be approximately
4.25 percent per annum compounded semiannually, if the bond is held to maturity ^ hut the yield will be less if the bond is redeemed prior to maturity. The
interest will be paid as a part of the redemption value. For the first six months
from issue date the bond will be redeemable only at purchase price. Thereafter,
its redemption value will increase at the heginning of each successive half-year
period. See table 1.
(f) Stock for bonds issued on and after June 1, 1968.—Series E bond stock
in use prior to June 1, 1968, will he used for bonds issued hereunder until such
time as new stock is printed and supplied to issuing agents. THE NEW INVESTMENT YIELD, AND REDEMPTION VALUES SHALL APPLY TO SUCH
BONDS AS FULLY AS I F EXPRESSLY SET FORTH IN THE TEXT. They
will he redeemed hy all paying agents at the redemption values in Table 1. Accordingly, it is not necessary for owners to exchange bonds on old stock when
the new stock is available but they may do so if they wish by presenting bonds
issued on and after June 1, 1968, on old stock to any Federal Reserve Bank
or Branch, or to the Treasurer of the United States, 'Securities Division, Washington, D.C. 20220.
Sec. 316.8. Extended terms and improved yields on outstanding bonds.
^ The $100,000 denomination is available only for purchase by trustees of employees'
savings and savings and vacation plans (see Sec. 316.5(c) of D e p a r t m e n t Circular No. 653,
Seventh Revision).
2 Under a u t h o r i t y of Section 25, 73 S t a t . 621 (31 U.S.C. 7 5 7 c - l ) , the President of the
United S t a t e s on May 31, 1968, concluded t h a t w i t h respect to Series E bonds it was
necessary in the national interest to exceed the maximum interest r a t e and investment
yield prescribed by Section 22 of t h e Second Liberty Bond Act, as amended (31 U.S.C. 757c).
161
EXHIBITS
(b) Improved yields.^—The investment yield on outstanding bonds is increased
by M.0 of 1 percent per annum oompounded semiannually but only if the bonds
are held to the next maturity date and there is an intervening or final six-month
interest accrual period. In addition, the investment yield for any presently authorized subsequent extension period will be 4.25 percent per annum compounded
semiannually provided the bonds are held to the maturity date for that period.
Interim redemption values remain unchanged and the increases, which will
be eomputed from the first six-month interest accrual period starting on or after
the following dates, is conditioned on retention of the bonds to next maturity
and, as appropriate, to the end of the authorized subsequent extension period:
(1) March 1, 1968.—For bonds with issue dates of June 1, 1959, through
November 1,1960.
(2) May 1, 1968.—For bonds with issue dates of February 1, 1957, through
May 1,1959.
(3) June 1, 1968.—For bonds with issue dates of May 1, 1941, through January 1,1957, and December 1,1960, through May 1,1968.
The Secretary of the Treasury may at any time prior to their maturity
prescribe a different yield for the extended maturity period for honds for which
no tables of redemption values ^and investment yields have been previously provided for such period. The tables, which are a part of this circular, will be
published periodically for the extended maturity for bonds bearing issue dates
of June 1,1961, or thereafter.^
JOHN K . CARLOCK,
Fiscal Assistant Secretary of the Treasury.
TABLES OF REDEMPTION VALUES AND INVESTMENT YIELDS FOR UNITED STATES SAVINGS BONDS
OF SERIES E
Each tabic shows: (1) thc reclemption value for each successive half-year term of holding during the current maturity period and the authorized redemption values during any subsequent maturity period, on bonds bearing issue dates
covered by the table; (2) for each maturity period shown, the approximate investment yield on the redemption value at
tlie beginning of such maturity period to the beginning of each half-year period thereafter; and (3) the approximate
investment yield on the current redemption value from thc beginning of each half-year period to next inaturity. Yields
are expressed in terms of rate percent per annum, compounded semiannually.
TABLE 1
BONDS BEARING ISSUE DATES BEGINNING JUNE 1, 1968
I s s u e price
Denoinination
Period after issue dale
First % year
y2 to 1 y e a r
1 t o 1>{ y e a r s
l } ^ to 2 y e a r s
2 to 2M vears
'I'A to 3 y e a r s
3 to sy> y e a r s
Syi to 4 y e a r s
4 to 4% y e a r s
4% to 5 y e a r s
.') to 5y2 vcai-s
5y2 to 6 y e a r s . . .
6 to Gy> y e a r s . . .
a y to 7 vears
M A T U R I T Y VALUE
(7 y e a r s from
issue date).
$18.75
25.00
$37. 50
50.00
$56. 25
75.00
$75. 00 $ 1 5 0 . 0 0 $375. 00
100.00
200. 00
500. 00
$750. 00
1,000.00
$7, 500
10, 000
(1) Kedcn ption value during cad lialf-ycar p riod (values increase on first day of peri od shown)
SIS. 75
18.96
19. 32
19. 70
20. 10
20. 52
20. 96
21. 42
21. S9
22. 37
22. 86
23. 36
23. SS
24. 42
$37. 50
37. 92
3S. 64
39. 40
40.20
41. 04
41.92
42. 84
43. 78
44. 74
45. 72
46. 72
47. 76
48. 84
25.16
50.32
$56.
56.
57.
.59.
60.
61.
62.
64.
65.
67.
6S.
70.
71.
73.
25
8S
96
10
30
56
88
26
67
11
58
OS
64
26
75.48
$75. 00 $150. 00 $375. 00
151. 6S 379. 20
75. 84
154. 56
386. 40
77.28
157. 60
394. 00
78.80
160. SO 402. 00
80.40
164. 16
410. 40
S2. OS
83.84
167. 68
419. 20
171.36
428. 40
85. 68
175. 12
437. 80
87. 56
17S. 96
447. 40
89. 48
457. 20
91. 44
182. SS
93. 44
1S6. 88
467. 20
95. 52
191. 04
477. 60
97^ 68
195. 36
488. 40
100. 64
201.28
5 0 3 . 20
•Vpproxinn.oinvo...
ment yield
(2) On
(3) On curpurchase
rent reprice from demption
issue date vaUie from
to begin- beginning
ning of
of each
half-year
each
period lo
half-year
maturity
period
00
40
80
00
00
SO
40
80
60
80
40
40
20
SO
$7, 500
7, 5S4
7,728
7,880
8, 040
8, 208
8,384
8,568
8,756
8,948
9, 144
9, 344
9, 552
9,768
Percent
0.00
2.24
3.02
3.32
.3.51
3.64
3. 75
3. 84
3.91
3.96
4.00
4. 04
4. 07
4. 11
1,006.40
10, 064
4.25
$750.
758.
772.
788.
804.
820.
838.
856.
S75.
S94.
914.
934.
95.5.
976.
Percent
4. 25
4. 40
4. 45
4. 50
4. 54
4. 58
4. 62
4. 65
4. 70
4.76
4.85
5. 01
5. 29
6.06
^ See Sec. 316.8(b) and footnote 8 of Department Circular No. 653, Seventh Revision, as
amended, for earlier yields.
2 In effect since Feb. 23, 1967.
162
19 68 REPORT OF T H E
SECRETARY OF T H E
TREASTJRY
TABLE 2
BONDS BEARING ISSUE DATE OF MAY 1, 1941
$18.75
25.00
Issue price
Denomination.
$37. 50
50.00
$75. 00
100. 00
$375. 00
500. 00
$750. 00
1, 000. 00
SECOND EXTENDED MATURITY PERIOD
First y year
.'(5/J/61)
y to 1 vear
...(11/1/61)
1 to l y vears
(5/1/62)
l y to 2 years
(11/1/62)
2 to 2y years
(5/1 /63)
2y to 3 years
(11/1/63)
3 to s y years
.(5/1/64)
s y to 4 years
(11/1/64)
4 to 4/2 years
(5/1 /65)
4y to 5 years
(11/1/65)
5 to 5y years..
i(5/]/66)
5/2 to 6 years
(11/1/66)
6 to ey years
(5/1/67)
C^y to 7 years
(11/1/67)
7 to 7y years..
(5/1/68)
l y to S years
(11/1/68)
S to 8/. years
(5/1/69)
s y to 9 years
(11/1/69)
9 to 9/> years
(5/1/70)
\)y to 10 years
(11/1/70)
SECOND EXTENDED MATURITY
VALUE (20 years from original
maturity date)'
(5/1/71)
$33.
34.
34.
35.
36.
36.
37.
38.
63
26
90
56
22
90
60
30
39. 02
39. 75
40. 50
41. 26
42. 06
42. 90
43. 76
44. 66
45. 60
46. 57
47. 58
48.64
$672. 00
685. 20
69S. 00
711. 20
724. 40
73S. 00
752. 00
766. 00
7 SO. 40
795. 00
SIO. 00
825. 20
841. 20
858. 00
875. 20
S93. 20
912. 00
931.40
951. 60
972. SO
$67.
6S.
69.
71.
72.
73.
75.
26 $134. 52
52
, 04
SO 139. 60
12 142. 24
44 144. 88
SO 147. 60
20 150. 40
76. 60 153. 20
•78. 04 156.08
79. 50 159. 00
Sl. 00 ] 62. 00
82. 52 165. 04
84. 12 168. 24
171. 60
85. 80
175. 04
S7. 52
89. 32 178. 64
91. 20 1S2. 40
93. 14 186. 28
190. 32
95. 16
194. 56
97.28
$1,345.20
1,370. 40
1, 396. 00
1,422.40
1,448. SO
1,476.00
1, 504. 00
1, 532. 00
1,560. SO
1,590. 00
1, 620. 00
1, 650. 40
1, 682. 40
1, 716. 00
1,750. 40
1, 7S6. 40
1, 824. 00
1, 862. 80
1, 903. 20
1, 945. 60
Approximate investment yield
(2) On tlie re- (3) On current redemption value demption value
from beginning
at start of the
second extended of each half-year
maturity period period to second
extended
to thc beginning
maturity
of each half-year
period thereafter
Percent
0.00
3. 75
3.74
3.76
3.74
3. 75
3. 75
3. 75
3. 75
3. 75
3. 75
3. 75
3. 76
3. 7S
3. SO
3. 82
3.84
3.87
3.89
3.92
Percent
•S.
23.
23.
23.
23.
2'3.
='3.
2,3.
23.
="4.
34.
34.;
.31
. 45
:. 52
.60
. 74
1.02
1, 994. 40
• Month, day, and year on which issues of May 1, 1941, enter each period.
" Yield from beginning of each half-year period to second extended maturity at second extended maturity value prior to the December 1,1965, revision.
•• Yield from beginning of each lialf-ycar period lo second extended maturity at second extended maturity value prior to the June J, 1968, revision.
•• 30 years from issue date. Second extended maturity value improved by the revision of June 1, 1968.
» Yield on purchase price from issue date to second extended maturity date is 3.29 percent.
TABLE 3
BONDS BEARING ISSUE DATES FROM JUNE 1 THROUGH NOVEMBER
Issue price
Denomination..
$18.75
25.00
$37. 50
50.00
$75. 00
100. 00
$375. 00
500. 00
$750. 00
1, 000. 00
SECOND EXTENDED MATURITY PERIOD
First M year
',(6/1/61)
>Uo 1 year
..(12/1/61)
1 to 1}^ years
(6/1/62)
l y to 2 vears..
...(12/1/62)
2 to 2>^ years
(6/1/63)
2 y to 3 years
(12/1/63)
3 to 'Sy years
(6/1/64)
s y to 4 years
(12/1 /64)
4 to 4y vears
(6/1/65)
4y to 5 years
(12/1/65)
5 to 5>< vears
(6/1/66)
5y to 6 years
(12/1 /66)
6 to 6M vears
,(0/1/67)
a y to 7 years
(12/1/67)
7 to l y years
. (6/1/6S)
7 y to S years
(12/1 /6S)
S to s y years
(6/1/69)
S)^ to 9 years
(12/1/69)
9 to 9y years
(6/1 /70)
oy to 10 years
(12/1/70)
SECOND E.VrENDED MATURITY
VALUE (20 years from original
maturity dateV
(6/1/71)
1, 002. 60
Month, day, and year on wliioli issues of .lune 1, 1!H1, enter eacli period. l''or subsequent
Yield from begin ling of each half-year period to seto ml rxleiidcd maturitv at second t
Yield fiom bi'gin ing ofcach lialf-Vi;;ir |ii'rioil to .secoi (1 cxiendeU maiuniy at second exi
30 vears from is.su
due iniproved by Uic revision of J
Yield on purchas - Ijricc from issue dale lo second exu iided maturity dale is 3.31 percen
(2) On the re- (3) On current redemption value demption value
from beginning
at start of the
second extended of each half-year
maturity period period to second
to the beginning
extended
of each half-year
maturity
period thereafter
Percent
$674.
687.
700.
713.
726.
740.
754.
76S.
782.
797.
812.
82S.
844.
861.
879.
897.
916.
936.
956.
977.
$33. 73 $67. 46 $134. 92
6S. 72 137. 44
34.36
35. 01
70. 02 140. 04
71. 32 142. 64
35. 66
72. 66 14.5. 32
36. 33
37. 01
74. 02 148. 04
37. 71
75. 42 150. 84
76. 82 153. 64
38. 41
39. 13
78. 20 156. 52
39. 87
79. 74 159. 48
Sl. 26 162. 52
40. 63
41. 41 82. 82 16.5. 64
42. 22 84. 44 168. 88
S6. 12 172. 24
43. 06
87. 90 175. SO
43. 95
S9. 72 179. 44
44. S6
91. 60 183. 20
45. SO
93. 60 187.20
46. 80
95. 62 191. 24
47. 81
195. 52
97. 76
48.88
Approximate hivestment yield
0.00
3. 74
3. 76
3.74
3. 74
3. 75
3.75
3.75
3.75
3. 75
3. 76
3.76
3.78
3.79
3. 82
3. S4
3.86
3. S9
3.91
3.94
Percent
2 3.'
23.'
23.:
23.'
23. '
23.'
2 3.'
23.'
2, 005. 20
ssue months add llie appropriate number of montli;
leiided matmity value prior to tlie December 1, IG
nded maturity value prior to the June 1, I'JUS, revis
lie 1, IDOS.
. 15
. 19
. 22
' 26
.30
.43
. 49
.57
.64
163
EXHIBITS
TABLE 4
BONDS BEARING ISSUE DATES FROM DECEMBER I, 1941, THROUGH APRIL 1, 1942
Issue price
Denomination
_
$18. 75
25. 00
Period after first extended maturity
(beginning 20 years after issue dale)
First y year
i (12/1/61)
y t o 1 year
(6/1/62)
1 to l y years
(12/1/62)
vy to 2 years
(6/1/63)
2 to 2>^ years
(12/1/63)
2y to 3 years
(6/1/64)
3 to 3/^ years
..(12/1/64)
s y to 4 years
(6/1/65)
4 to i y years
(12/1/65)
4/2 to 5 years
(6/1/66)
5 to 5y years
(12/1/66)
5 y to 6 years
(6/1/67)
6 to 6/2 years
(12/1/67)
6/2 to 7 years
(6/1/6S)
7 to l y years
.(12/1/68)
7/2 to S years
(6/1/69)
S to s y years
(12/1/09)
s y to 9 years
(6/1/70)
9 to 9/2 years
(12/1/70)
9^^ to 10 years
(6/1/71)
SECOND EXTENDED MATURITY
VALUE (20 years from original
maturity date)*
(12/1/71)
$37.50
50.00
$75. 00
100. 00
$375. 00
500. 00
$750. 00
1, 000. 00
SECOND EXTENDED MATURITY PERIOD
$33. S3 $67. 66 $135. .32
68. 92 137. 84
34.46
70. 22 140. 44
35. 11
3.5. 77
71. .54 143. 08
145. 76
36.44
72.88
37. 12
74. 24 148. 48
75. 64 151. 2S
37. 82
154. 12
77.06
38. 53
78.50 157. 00
39. 25
160. 00
80.00
40.00
81.54 163. 08
40.77
83. 12 166. 24
41. 56
84. 78 169. 56
42. 39
86.50 173. 00
43. 25
176. 56
88.28
44. 14
90. 14 180. 28
45. 07
92. 06 184. 12
46.03
94.04 155. OS
47. 02
96. 10 192. 20
48.05
98. 24 196. 48
49. 12
$676. 60 $1, 353. 20
689. 20 1, 378. 40
702. 20 1, 404. 40
715. 40 1, 430. 80
1, 457. 60
728. SO
742. 40 1, 484. SO
756. 40 1, 512. SO
770. 60 1, 541. 20
785. 00 1, 570. 00
800. 00 1, 600. 00
815. 40 1, 630. SO
831. 20 1, 662. 40
847. 80 1, 695. 60
865. 00 1, 730. 00
882. 80 1, 765. 60
901. 40 1, 802. 80
920. 60 1,841.20
940. 40 1, SSO. 80
961. 00 1, 922. 00
982. 40 1, 964. 80
Approximate iavcstnicnt yield
(2) Oil thc redemption value
al start of the
second extended
maturity period
to the beginning
of each half-year
period thereafter
Percent
0.00
3. 72
3.75
3.75
3.75
3.75
3.75
3.75
3.75
3.76
3.77
3.78
3.79
3.82
3.84
3.86
3.89
3.91
3.94
3.96
(3) On current redemption valuo
from beginning
of eaeh half-year
period to second
extended
maturity
Percent
23. 75
23. 75
23.75
23. 75
2 3. 75
23. 75
23. 75
23.75
34. 15
34. 18
34. 21
34.25
M . 28
4.42
4. 47
4.52
4.59
4.68
4.83
5.21
1, 008. 00
1 Month, day, and year on which issues of IDecember 1, 1941, enter each jjei iod. For subsequent issue months add the appropriate number of monlh.s.
- Yield from begimiing of each half-year period to second extended maturity at second extended maturity valuo prior to the December 1, lOliS, revision.
' Yield from beginning of each half-year period lo second extended maturity al second extended maturity value prior lo the June 1, 1%S, revision.
* 30 years from issue djiie. Second extended maturity value improvetl by llie revision of June 1, 1908.
« Yield on purchase price from issue date lo second extended malurity dale is 3.32 percent.
TABLE 5
BONDS BEARING ISSUE DATE OF MAY I, 1942
Issue price
Denomination.
$18.75
25.00
$37. 50
50.00
$75. 00
100. 00
$375. 00
500.00
$750. 00
1, 000. 00
Period after first extended maturity
(beginning 20 years after issue date)
SECOND EXTENDED MATURITY PERIOD
First y year
'(5/1/62)
y to 1 year
.(11/1/62)
1 to IH years
-(5/1/63)
l y to 2 y e a r s . . .
(11/1/63)
2 to 2y y e a r s . .
(5/1/64)
2y to 3 years
.(11/1/64)
3 to 3^2 years
(5/1/65)
s y to 4 years
(11/1/65)
4 to 4 ^ years
(5/1/66)
i y to 5 years
(11/1/66)
5 to 5y years
(5/1/67)
a y to 6 years
...(11/1/67)
6 to Qy years
(5/1/68)
(jy to 7 y e a r s . . .
(11/1/68)
7 to 7H years
(5/1/69)
7y to 8 years
(11/1/69)
8 to s y years
(5/1/70)
8/2 to 9 y e a r s . .
....(11/1/70)
9 to 9/2 years
(5/1/71)
9K to 10 years
(11/1/71)
SECOND EXTENDED MATURITY
VALUE (20 years from original
maturity date)^
(5/1/72)
$34. 09
34.73
35. 38
36.04
36. 72
37. 41
38. 11
38. 82
39. 55
40. 30
41. 08
41.88
42. 71
43. 58
44. 49
45. 41
46. 38
47. 38
48 42
49. 50
$68. 18 $136. 36
138. 92
69.46
141. 52
70.76
144. 16
72.08
146. 88
73. 44
74. 82 149. 64
76. 22 152.44
77.64 155. 28
79. 10 158. 20
80.60 161. 20
82. 16 164. 32
167. 52
83.76
85. 42 170. 84
87. 16 174. 32
88.98 177. 96
90. 82 181. 64
92. 76 185. 52
94. 76 189. 52
96.84 193. 68
99. 00 198. 00
$681. 80 $1, 363. 60
694. 60 1, 389. 20
707. 60 1,415. 20
720. 80 1, 441. 60
734. 40 1, 468. 80
748. 20 1, 496. 40
762. 20 1, 524. 40
776. 40 1, 552. 80
791. 00 1, 582. 00
806. 00 1, 612. 00
821. 60 1, 643. 20
837. 60 1, 675. 20
854. 20 1,708. 40
871. 60 1, 743. 20
889. 80 1, 779. 60
908. 20 1,816.40
927. 60 1, 855. 20
947. 60 1, 895. 20
968. 40 1, 936. 80
990. 00 1, 980. 00
Approximate investment yield
(2) On the redemption value
at start of the
second extended
maturity period
to thc beginning
of each half-year
period thereafter
Percent
0.00
3.75
3.75
3.74
3.75
3.75
3.75
3.75
3.75
3.75
3.77
3.78
3.79
3.81
3.84
3.86
3.89
3.91
3.94
3.96
(3) On current redemption value
from beginning
of each half-year
period to second
extended
maturity
Percent
23.75
23.75
23. 75
2 3. 75
23.75
23.75
2 3. 75
2 3. 75
3 4. 15
M. 18
3 4 22
3 4. 25
3 4. 29
4. 42
4. 46
4. 53
4. 59
4. 69
4.84
5. 21
2,031.60
' Month, day, and year on wliich issues of May 1, 1942, enter eaeh period.
2 Yield from beginning of each lialf-ycar period lo second extended maturity at second extended malurity value prior lo the December 1,1905, revision.
3 Yield from beginning of each half-year period lo second exieiulcd maturity al second exiended malurity value prior to llic June 1, 1908, revision.
* 30 years from issue dale. Second exiended maturity value iinproved bv the revision of June 1, 1968.
• Yield on purchase price from issue dale to second exiended maturity date is 3.35 percent.
164
19 68 REPORT OF T H E SECRETARY OF T H E TREASURY
TABLE 6
BONDS BEARING ISSUE DATES FROM JUNE 1 THROUGH NOVEMBER 1. 1912
$18. 75
25. 00
Issue price
Denomination.
$37. 50
50. 00
$75. 00
100. 00
$375. 00
500. 00
$750. 00
1, 000. 00
SECOND EXTENDED MATURITY PERIOD
First y 3-ear
'(6/1/02)
Yz to 1 year
(12/1/62)
1 to l y years
(6/1/63)
IK' to 2 vears
(12/1/63)
2 to 2y vears
.(6/1/64)
2>Uo 3 vears
.,(12/1/64)
3 to s y vears
(6/1/65)
s y to 4 vears
(12/1/65)
4 to 4^2 years
(6/1/66)
4y to 5 years
(12/1/66)
5 to 5^2 vears
(6/1/67)
5/2 to 6 vears
(12/1/67)
6 to 6K> vears
..(6/1/68)
ay to 7 vears
(12/1/68)
7 to 7y years
(6/1/69)
7y to 8 years
(12/1/69)
8 to 8K years
(6/1/70)
8^2 to 9 vears
(12/1/70)
!) to dy vears
-(6/1/71)
9/2 to 10 years
.(12/1/71)
SECOND EXTENDED MATURITY
VALUE (20 years from original
maturity date)*
,..(6/1/72)
$.34. 17 $0S. 34 $130. 08
69. 62 139. 24
34. 81
70. 92 141. 84
35. 46
72. 26 144. 52
36. 13
7.3. 62 147. 24
36. 81
37. 50
75. 00 150. 00
76. 40 152. 80
38. 20
77. 84 155. 68
38. 92
79. 30 158. 60
39. 65
80. 82 161. 64
40. 41
82. 42 164. 84
41. 21
84. 04 168. OS
42. 02
85. 72 171. 44
42. 86
87. 48 174. 96
43. 74
89. 30 178. 60
44. 65
91. 18 182. 36
45. 59
93. 14 186. 28
46. 57
95. 10 190. 32
47. 58
97. 26 194. 52
48. 63
99. 42 198. 84
49. 71
$083.
696.
709.
722.
736.
750.
764.
778.
793.
808.
824.
840.
857.
874.
893.
911.
931.
951.
972.
994.
40 $1, 366. 80
20 1, 392. 40
20 1, 418. 40
60 1, 445. 20
20 1, 472. 40
00 1, 500. 00
00 1, 528. 00
40 1, 556. 80
00 1, 586. 00
20 1, 616. 40
20 1, 648. 40
40 1, 680. 80
20 1, 714. 40
80 1, 749. 60
00 1, 786. 00
SO 1, 823. 60
40 1, 862. 80
60 1, 903. 20
60 1, 945. 20
20 1, 988. 40
1, 020. 40
Approximate investment yield
(2) On thc redemption value
at start of the
second extended
niaturity period
to the beginning
of each half-year
period thereafter
(3) On current rodemption value
from beginning
of each half-year
period to second
extended
maturity
Percent
0. 00
3. 75
.3. 74
3. 7 5
3.76
3.75
3. 75
3. 7 5
3. 75
3.76
3. 78
3. SO
3. 81
3. 83
3. 86
3. 88
3.91
3.93
3.96
3.99
Percent
2 3. 75
2 3.75
2 .3. 75
2 3. 7 5
2 3.75
2 3. 7 5
2 3. 75
3 4. 15
3 4. 18
34. 21
3 4. 24
3 4. 27
4.40
4. 4 5
4. 50
4. 5 5
4. 62
4. 7 1
4. 86
5.27
2, 040. 80
day, and year on which issues of June 1, MM', enter each period. Kor subsequent issue nionths add the appropriate nuinber of months.
om beginniiig of each half-year peiiod lo sec nd extended malurity al second exiended maturity value prior to the December 1, 1905, revision.
om Ijegimiiiig of each half-year period lo .sec md exiended maturity at second extended malurity value prior lo the June 1, 1968, revision.
I from issue dale. Second extended nialinity t'alue improvetl by the revision of June 1, \'.)<J8.
II purchase priee from issue dale to second e tended malurity date is 3.36 percent.
TABLE 7
BONDS BEARING ISSUE DATES FROM DECEMBER 1, 1942, THROUGH MAY 1, 1943
Issue price
Denomination
'
$18.75
25. 00
$37. 50
50.00
$75.00
100. 00
$375.00
500. 00
$750.00
1, 000. 00
SECOND EXTENDED MATURITY PERIOD
First y year
' (12/1/62)
y to 1 year
...(6/1/63)
1 to vy years
..(12/1/63)
1^2 to 2 years
(6/1/64)
2 to 2y years
(12/1/64)
2^2 to 3 years. _(6/1/65)
3 to 3/2 years
.(12/1/65)
3/2 to 4 years
(6/1/66)
4 to 4y years
..(12/1/66)
4y to 5 years
(6/1/67)
5 to 5)^2 years
(12/1/67)
5/2 to 6 years
-(6/1/68)
6 to 6/2 years
(12/1/68)
6^2 to 7 years
1(6/1/69)
7 to 7y years
(12/1/69)
7y to 8 years
...(6/1/70)
S to s y years
(12/1/70)
8/2 to 9 vears
(6/1/71)
9 to 9^2 years
(12/1/71)
9^2 years to 10 years
-(6/1/72)
SECOND EXTENDED MATURITY
VALUE (20 years from original
maturity date)*
(12/1/72)
$34. 26
34.90
35. 56
36. 22
36.90
37. 59
38. 30
39. 03
39. 77
40. 54
41. 34
42. 18
43. 04
43.93
44. 85
45.79
46.78
47.79
48.84
49. 94
$68. 52 $137. 04
139. 60
69.80
71. 12 142. 24
144. 88
72.44
147. 60
73.80
75. 18 150. 36
76. 60 153. 20
78. 06 156. 12
159. 08
79.54
81. 08 162. 16
82.68 165. 36
84. 36 168. 72
86. 08 172. 16
87. 86 175. 72
179. 40
89.70
91. 58 183. 16
187. 12
93.56
95. 58 191. 16
195. 36
97.68
199. 76
99.88
$685;
698.
711.
724.
738.
751.
766.
780.
795.
810.
826.
843.
860.
878.
897.
915.
935.
955.
976.
998.
20
00
20
40
00
SO
00
60
40
80
80
60
80
60
00
80
60
80
80
80
$1, 370. 40
1, 396. 00
1, 422. 40
1, 448. 80
1, 476. 00
1, 503. 60
1, 532. 00
1, 561. 20
1, 590. 80
1, 621. 60
1, 653. 60
1, 687. 20
1, 721. 60
1, 757. 20
1, 794. 00
1, 831. 60
1, 871. 20
1,911.60
1, 953. 60
1, 997. 60
Approximate investment yield
(2) On the re- (3) On current redemption value demption value
at start of thc
from beginning
second extended of each half-year
maturity period period to second
to the beginning
extended
of each half-year
maturity
period thereafter
Percent
0.00
3.74
3.76
3.74
3.75
3.75
3.75
3.76
3.76
3.78
3.79
3.82
3.84
3.86
3.89
3.91
3.93
3.95
3.98
4.01
Percent
23.75
23.75
23.75
2 3. 75
23.75
23.75
3 4 . 15
3 4 . 18
34.21
3 4 . 24:
34.27
4.40
4.44:
4.48
4.53
4.60
4.67
4.78
4.97
5.45
1, 026. 00
' Month, day, and year on which issues of 15eccinber 1, 1942, enter each period. For subsequent issue months add thc appropriate number of months.
a Yield from begimiing of each half-year period lo second extended malurity at second extended maturitv valuo prior to thc December 1,1965, revision.
3 Yield from beginning of each half-year period to second extended maturity al second extended maturity value prior lo the June 1 1968 revision
* 30 years from issue dale. Second extended maturity value improved by the revision of June 1,1968.
•
'
* Yield on purchase price from issue date lo second extended maturity date is 3.38 percent.
165
EXHIBITS
TABLE 8
BONDS BEARING ISSUE DATES FROM JUNE 1 THROUGH NOVEMBER 1, 1943
Issue price
Denomination
$18.75
25. 00
$37. 50
50.00
$75.00
100. 00
$375.00
500. 00
$750.00
1, 000. 00
SECOND EXTENDED MATURITY PERIOD
First Yl year
..'(6/1/63)
y to 1 year
(12/1/63)
1 to 1^2 years
(6/1/64)
1 y, to 2 vears
(12/1/64)
2 to 2^4 years
(6/1/65)
2^2 to 3 years
(12/1/65)
3 to 3^^2 years
(6/1/66)
s y to 4 years
(12/1/66)
4 to iYi years
(6/1/67)
4K' to 5 years
(12/1/67)
5 to 5^2 years
(6/1/68)
5^2 to 6 years
(12/1/68)
6 to 6/2 years
(6/1/69)
6;,^2 to 7 years
.(12/1/69)
7 to 7^2 years
(6/1/70)
7K2 to 8 years
(12/1/70)
8 to 8/2 years
-(6/1/71)
Sy> to 9 years
(12/1/71)
9 to %<, years
(6/1/72)
%^i to 10 years.
(12/1/72)
SECOND EXTENDED MATURITY
VALUE (20 years from original
maturity date)^
(6/1/73)
$34. 34
34.98
35. 64
36. 31
36.99
37.68
38. 40
39. 13
39.89
40.08
41. 49
42. 33
43. 20
44. 09
45. 02
45. 97
46.98
47. 99
49. 06
50. 15
$68. 68 ;137. 36
69. 96 139. 92
71. 28 142. 56
72. 62 145. 24
73. 98 147. 96
75. 36 150. 72
15.3. 60
76.80
78. 26 156. 52
79. 78 159. .56
81. 36 162. 72
82. 98 165. 96
84. 66 169. 32
86. 40 172. 80
88. 18 176. 36
90.04 180. 08
183. 88
91.94
9.3. 96 187. 92
95. 98 191. 96
98. 12 196. 24
100. 30 200. 60
$686. 80 |$1, 373. 60
699. 60 1, 399. 20
712. SO 1, 425. 60
726. 20 1,452. 40
739. 80 1, 479. 60
753. 60 1, 507. 20
768. 00 1, 536. 00
782. 60 1, 565. 20
797. 80 1, 595. 60
813. 60 1, 627. 20
829. 80 1, 659. 60
846. 60 1, 693. 20
864. 00 1,728. 00
881. 80 1, 763. 60
900. 40- 1, 800. 80
919. 40 1, 838. 80
939. 60 1, 879. 20
959. SO 1,919.60
981. 20 1, 962. 40
1, 003. 00 2, 006. 00
Approximate investment yield
(2) On the re- (3) On current redemption value demption value
at start of thc
from beginning
second extended of each half-year
maturity period period to second
to the beginning
extended
ofcach half-year
maturity
period thereafter
Percent
0. 00
3.73
3. 75
3.75
3. 75
3. 75
3.76
3.77
3.78
3. 80
3. 82
3.84
3.86
3.88
.3. 91
3. .93
3.96
3.98
4.00
4.03
Percent
2 3. 75
2 3. 75
2 3. 7 5
2 3. 75
2 3. 75
3 4. 15
3.4. 18
3 4. 20
34. 23
3 4. 25
4. 39
4. 42
4. 46
4. 51
4.56
4.63
4. 69
4.81
4.99
5.54
1, 030. 80 2,061.60
> Month, day, and year on whicii issues of June 1, 1943, enter each period. For subsequent issue months add the appropriate number of months.
= ^•ield from Ijeginning of each half-year period to second extended maturity at second extended malurity value prior to the December 1, 1965, revision.
3 Yield from beginning ofcach half-year period lo second exiended niaturity at second extended maturity value prior lo thc June 1, 1968, revision.
< 30 years from issue dale. Second extended maturity value improved by the revision of June 1, 1968.
' Yield on purchase price from issue date to second extended niaturity dale is 3.40 percent.
TABLE 9
BONDS BEARING ISSUE DATES FROM DECEMBER 1, 1943, THROUGH MAY 1, 1944
$18.75
25.00
Issue price
Denomination.
$37. 50
50.00
$75. 00
100. 00
$375. 00
500. 00
$750. 00
1,000.00
SECOND EXTENDED MATURITY PERIOD
First 1,^ year
'(12/1/63)
Yz to 1 year
(6/1/64)
1 to Uiyears
(12/1/64)
1 y to 2 yeai-s
(6/1 /65)
2 to 2K2 years
(12/1/65)
2/2 to 3 years
(6/1/66)
3 to 3^/2 years
(12/1/66)
3^2 to 4 years
(6/1/67)
4 to 4}ryears
(12/1/67)
iy, to 5 years
(6/1/6S)
5 to 5><; years..
(12/1/68)
5'/2 to 6 years
(6/1/69)
6 to a y years
(12/1/69)
6^2 to 7 years
(6/1/70)
7 to 7/2 years
(12/1/70)
7^2 to 8 years
(6/1/71)
S to SYi years
(12/1/71)
8/2 to 9 years
(6/1/72)
9 to 9/2 years
(12/1/72)
9}^2 to 10 years
(6/1/73)
SECOND EXTENDED
MATURITY VALUE
(20 years from original
maturity date)*
(12/1/73)
$688. 60 $1, 377. 20
$34. 43 $68. 86 $137. 72
1, 403. 20
701.60
70. 16 140. 32
35. OS
142. 92
714. 60 1, 429. 20
71.46
3.5. 73
728. 00 1, 456. 00
72. SO 145. 60
36. 40
741. SO 1, 483. 60
37.09
74. 18 148. 36
7.55. 80 1,511. 60
37. 79
75. 5S 151. 16
154.04
770. 20 1, 540. 40
77.02
38. 51
785. 00 1, 570. 00
78. 50 157. 00
39. 25
160. 12.
800. 60 1, 601. 20
80.06
40.03
816. 60 1, 633. 20
81. 66 163. 32
40. S3
833. 00 1, 666. 00
83. 30 166. 60
4h 65
850. 00 1, 700. 00
42. 50
85. 00 170. 00
867. 40 1, 734. 80
43.37
86. 74 173. 48
885. 40 1, 770. 80
44. 27
88. 54 177.08
904. 40 1, SOS. SO
90. 44 180. 88
45. 22
923. 60 1, 847. 20
92. 36 184. 72
46. IS
943. 60 1, 887. 20
94. 36 188. 72
47. IS
964. 40 1, 928. 80
96. 44 192. 88
48.22
985. 60 1, 971. 20
98. 56 197. 12
49. 28
50. 38 100. 76 201. 52 1, 007. 60 2, 015. 20
Approximate investment yield
(2) On the re- (3) On current redemption value demption value
from beginning
al start of the
second extended of each half-year
maturity period period to second
extended
to the beginning
maturity
of each half-year
period thereafter
Percent
0.00
3.78
3.74
3.74
3.76
3.76
3.77
3. 78
3. SO
3. 82
3. 84
3. 87
3.88
3. 90
3.93
3. 95
3.98
4.00
4.02
4.05
Percent
2 3. 75
2 3. 75
2 3. 75
2 3. 75
3 4. 15
3 4 . 17
3 4. 20
3 4. 23
3 4. 25
4. 37
4.41
4. 44
4. 49
4.53
4.57
4. 64
4.72
4.82
5.03
5.60
_L
' Month, day, and year on which issues of December 1, 1943, enter each period. Forsubsequent issue months add the appropriate number of months.
3 Yield from beginning of each half-year period to second extended niaturity at secoiure.ttended maturity value prior to the December 1, 1965, revision,
' Yield from beginning of each half-year period lo second extended maturity at second extended maturity value prior to the June 1, 1968, revision.
< 30 years from issue date. Second extended malurity value iniproved by the revision of June 1,1968.
» Yield on purchase price from issue date to second extended maturity dat iis 3.42 percent.
318-223—69-
-13
166
1 9 6 8 REPORT OF THE SECRETARY OF T H E
TREASURY
TABLE 10
BONDS BEARING ISSUE DATES FROM JUNE 1 THROUGH NOVEMBER 1, 1944
Issue price
Denomination.
$7.50
10.00
$18.75
25.00
$37.50
50.00
$75.00
100.00
$375. 00
500. 00
.$7.50. 00
1, 000. 00
(2) On thc
redemption
Period after first extended
maturity (beginning 20
years after issue dale)
of the second
exiended malurity period
to the beginning of each
half-year
period ihereaftcr
SECOND EXTENDED MATURITY PERIOD
First K y e a r . .
'(6/1/64) $13. 80 $34. 51 $69. 02
Y2 to 1 year
(12/1/64)
14. 06
70. 32
35. 16
14.33
1 to \Y> years
(6/1/65)
71.64
35. 82
14. 60
vy to 2 vears
(12/1/65)
72. 9S
36. 49
14.87
2 to 2^2 years..
(6/1/66)
74.36
37. 18
2^2 to 3 years
(12/1/66)
75.78
37. 89
15. 16
77.24
15. 45
3 to 3^2 years
(6/1/67)
38. 62
78. 74
1.5. 75
s y to 4 years
(12/1/67)
39. 37
SO. 32
16.06
•4 to 4^2 years.
.(6/1/68)
40. 16
81.92
16.38
40.96
4/2 to 5 years......(12/1/68)
83.58
16.72
41.79
5 to 5y years
(6/1/69)
85.30
17.06
42. 65
5^2 to 0 years
(12/1/69)
17.42
6 to 6/2 vears
(6/1/70)
87. 08
43. 54
17.78
6J,Uo7 years
(12/1/70)
88. 92
44. 46
18. 16
7 to 7/2 years
(6/1/71)
90. SO
45. 40
18. 55
7^2 to 8 years
(12/1/71)
92. 74
46.37
94. 74
47. 37
8 to S/2 years
(6/1/72)
18. 95
96. 84
48.42
8/2 to 9 years
(12/1/72)
19. 37
98. 98
19.80
9 to 9Yi years.
(6/1/73)
49. 49
OY2 to 10 years
(12/1/73)
20. 24
50. 60 101. 20
SECOND EXTENDED
MATURITY VALUE
(20 years from original
maturity date)*..(6/1/74)
rent redeinpfroin beginning of each
half-year
period to second extended
inaturity
Percent
$138. 04
140. 64
143. 28
14.5. 96
148.72
151. 56
154. 48
157. 48
160. 64
163. 84
167. 16
170. 60
174. 16
177. 84
181. 60
185. 48
189. 48
193. 68
197. 96
202. 40
$690. 20 $1, 380. 40
703. 20 1, 406. 40
1, 432. 80
716.40
729. 80 1, 459. 60
743. 60 1, 487. 20
757. 80 1, 515. 60
772. 40 1, 544. 80
787. 40 1, 574. 80
803. 20 1, 606. 40
819. 20 1, 638. 40
835. 80 1, 671. 60
853. 00 1,706.00
870. SO 1, 741. 60
889. 20 1, 778. 40
908. 00 1, 816. 00
927. 40 1, 854. 80
947. 40 1, 894. SO
968. 40 1, 936. SO
989. SO 1,979. 60
1,012.00 2, 024. 00
0.00
3.77
3. 76
3. 75
3.76
3.77
3.79
3.80
3.83
3.84
.3. 87
3.89
3. 91
3.94
3.96
3.98
4.00
4.02
4.05
4.07
Percent
2 3. 75
2 3 . 75
2 3. 75
3 4. 15
3 4 . 17
34.20
34.22
34.25
4.37
4. 40
4. 44
4. 48
4.51
4. 55
4. 61
4. 68
4.77
4.88
5. 11
5.73
2, 082. 00
' Montli, day, and year on which issues of June 1, 1944, enter each period. For subsequent issue months add the appropriate number of months.
2 Yield from beginning ofcach half-year period to secoiul exiended maturity al second extended maturity value pnor lo the December 1, 1965, revision.
3 Yield hom begiiming of each half-year periotl lo secoiul extended malurity at second exiended maturity value prior to the June 1, 1968, revision.
« 30 years from issue dale. Second exiended malurity value iini)ioved by the revision of Juue 1, 1968.
* Yield on purchase price from issue date lo second extended malurity date is 3.43 percent.
TABLE 11
BONDS BEARING ISSUE DATES FROM DECEMBER 1, 1944, THROUGH MAY 1, 1945
Issue price
Denomination
$7.50
10.00
$18.75
25.00
$37. 50
50.00
$75.00
100. 00
$375. 00
500. 00
$750. 00
1,000.00
(1) Rcdon- ption value during eacl half-year perio J
(values mcrease on irst day of p eriod shown)
Period after first extended maturity
(beginning 20 years after issue date)
SECOND
EXTEND ED MATU RITY PERIO D
Approximate in
(2) On the re(3) On current
demption valuo redemption valuo
at start of the
from beginning
second extended of each half-year
maturity period period to second
to the begmning
extended
of each half-year
maturity
period thereafter
Percent
First Kyear
'(12/1/64)
y t o lyear
(6/1/65)
1 to 1}{ years
(12/1/65)
1/2 to 2 years
.(6/1/66)'
2 to 2K years
(12/1/66)
2K to 3 years
(6/1/67):
3 to 3/2 years
(12/1/67)
3K to 4 years
(6/1/68):
4 to 4Y2 years
(12/1/68)
iYz to 5 years
(6/l/69>
5 to 5/2 years
(12/1/69)
5/2 to 6 years
(6/1/70),
6 to 6K years
(12/1/70)
6/2 to 7 years
(6/1/71):
7 to 7K years
(12/1/71)
7)/. to 8 years
(6/1/72)
•8 to 8K years
(12/1/72)
8M to 9 years
(6/1/73)
9 to OYi years
(12/1/73)
9K to 10 years
(6/1/74)
SECOND EXTENDED MATURITY VALUE (20
years from original maturity date)*.-(12/l/74)
$13. 84
14. 10
14.36
14.63
14.91
15.20
15.50
15.80
16. 12
16. 44
16.78
17. 12
17.48
17.85
18.23
18.63
19.03
19. 45
19. 88
20.32
$34. 59
35.24
35.90
36.58
37.28
38.00
38.74
39.50
40.29
41. 10
41. 95
42. 81
43.71
44.63
45. 58
46.57
47.57
48.63
49.69
50.81
20.92
52.29
$69. 18 $138. 36
70.48 140. 96
71.80 143. 60
73. 16 146. 32
74.56 149. 12
76. 00 152. 00
77. 48 154. 96
79.00 158. 00
80.58 161. 10
82.20 164. 40
83.90 167. 80
85.62 171.24
87. 42 174. 84
89.26 178. 52
91.16 182. 32
93. 14 186. 28
95.14 190. 28
97.26 194. 52
99.38 198. 76
101. 62 203. 24
$691. 80 $1, 383. 60
704. 80 1, 409. 60
718. 00 1, 436. 00
731.60 1, 463. 20
745. 60 1,491.20
760. 00 1, 520. 00
774. SO 1, 549. 60
i 790. 00 ,1,580.00
805. SO 1,611.60
822. 00 1, 644. 00
839. 00 1, 678. 00
856. 20 1,712.40
874. 20 1,748.40
892. 60 1, 785. 20
911. 60 1,823.20
931. 40 1, 862. 80
951. 40 1, 902. 80
972. 60 1, 945. 20
993. 80 1, 987. 60
1, 016. 20 2, 032. 40
104. 58
1, 045. 80
209.16
2. 091. 60
0.00
3.76
3. 75
3.76
3.78
3.80
3.81
3.83
3.85
3.87
3.90
3.91
3.94
3.96
3.98
4.00
4.02
4.05
4.07
4.09
Percent
23.75
23.75
34.15
34.17
34. 19
34.21
3 4. 24
4.36
4.39
4.43
4.46
4.49
4.53
4.58
4.63
4.69
4 79
4.90
5.17
5.83
5 4.18
' Month, day, and year on which issues of December 1, 1944, enter each period. For subsequent issue months add thc appropriate number of months.
- Yield from beginning ofcach half-year period to second extended maturity at second extended maturity value prior to the December 1, 1965, revision.
3 Yield from beginning of each half-year period lo second extended maturity at second extended maturity value prior to tho June 1,1%8, revisioa.
* 30 years from issue date. Second extended maturity value imiJioved by the revision of June 1,1968.
« Yield on purchase price from issue dato to second extended maturity dato is 3.45 percent.
167
EXHIBITS
TABLE 12
BONDS BEARING ISSUES DATES FROM JUNE 1 THROUGH NOVEMBER 1, 1945
Issue price
Denomination..
$7.50 $18.75 $37. 50
10.00
25.00
50.00
Period after first extended
maturity (beginning 20
years after issue date)
$75. 00 $150. 00
100. 00 200. 00
$375. 00
500. 00
$750. 00
1, 000. 00
(2) On the
redemption
value at start
of the second
extended maturity period
to the beginning of each
half-year
period thereafter
SECOND EXTENDED MATURITY PERIOD
First Hyear
'(6/1/65) |$13. 87 $34. 68 $69. 36 $138. 72 ;$277. 44 $693. 60 $1, 387. 20
706. 60 1, 413. 20
14. 13 35. 33 70. 66 141. 32 282. 64
Y2 to 1 year
(12/1/65)
720. 00 1, 440. 00
14. 40 36. 00 72. 00 144. 00 288. 00
1 to i K years
(6/1/66)
733. 80 1, 467. 60
14. 68 36. 69 73. 38 146. 76 293. 52
VA to 2 years
(12/1/66)
748. 00 1, 496. 00
14. 96 37. 40 74. 80 149. 60 299. 20
2 to 2/2 years
.(6/1/67)
762. 40 1, 524. 80
2Y2 to 3 years
(12/1/67)
15. 25 38. 12 76. 24 152.48 304. 96
777. 40 1, 554 80
3 to SY2 years
(6/1/68)
15. 55 38. 87 77. 74 155. 48 310. 96
793. 00 1, 586. 00
15. 86 39. 65 79. 30 158. 60 317.20
3/2 to 4 vears
(12/1/68)
809. 00 1, 618. 00
161. 80 323. 60
16. 18 40. 45 80.90
4 to 4Y2 vears
(6/1/69)
825. 40 1, 650. 80
16. 51 41.27 82. 54 165. 08 330. 16
4/2 to 5 years
(12/1/69)
842. 40 1, 684 80
16. 85 42. 12 84. 24 168. 48 336. 96
S t o 5/2 vears
(6/1/70)
859. 80 1,719. 60
171.96 343. 92
17. 20 42. 99 85.98
5/2 to Oyears
(12/1/70)
877. 80 1, 755. 60
17. 56 43. 89 87. 78 175. 56 35L 12
Oto 6K years
(6/1/71)
896. 40 1, 792. 80
17. 93 44. 82 89. 64 179. 28 358. 56
(iYz to 7 years
(12/1/71)
915. 60 1, 831. 20
7 to 7Y2 years
(6/1/72)
18. 31 45. 78 91. 56 183. 12 366. 24
935. 40 1, 870. 80
7/2 to Syears
(12/1/72)
18. 71 46. 77 93. 54 187. 08 374. 16
955. 80 1,911. 60
19. 12 47. 79 9.5. 58 191. 10 382. 32
S t o 8^2 years
(6/1/73)
976. 80 1, 953. 60
19. 54 48. 84 97. 68 195. 36 390. 72
8/2 to 9 years
(12/1/73)
998. 40 1, 996. 80
19. 97 49. 92 99. 84 199. 68 399. 36
9 to 9/2 years
(6/1/74)
20. 42 51. 04 102. 08 204. 16 408. 32 1, 020. 80 2, 04 L 60
9/2 to 10 years
(12/1/74)
SECOND EXTENDED
MATURITY
VALUE (20 years
from original maturity d a t e ) ^ . . ( 6 / 1 / 7 5 )
Percent
0.00
3. 75
3. 77
3.79
3. 81
3. 82
3. 84
3.86
3. 88
3.90
3. 93
3. 94
3.96
3.99
4 01
4 03
4 05
4. 07
4 09
4 11
(3) On current redemption value
from beginning of each
half-year
period to second extended
maturity
Percent
2 3.75
34. 15
3 4 17
3 4 19
3421
3423
4 35
4 38
4 41
4 44
4. 47
4 51
4. 5 5
4 60
4. 65
4 72
4.80
4.94
5.20
5.92
' Month, day, and year on which issues of June 1,1945, enter each period. For subsequent issue months add the appropriate numberof months.
- Yield from beginning ofcach half-year period to second extended maturity at second extended maturity value prior to the December 1,1965, revision.
3 Yield from beginning of each half-year period lo second extended maturity at second extended maturity value prior to the June 1, 1968, revision.
« 30 years from issue date. Second extended maturity value improved by the revision of June 1,1968.
^ Yield on purchase price from issue date to second extended maturity date is 3.46 percent.
TABLE 13
BONDS BEARING ISSUE DATES FROM DECEMBER 1, 1945, THROUGH MAY 1, 1946
Issueprice
Denomination
$7.50 $18.75
10.00
25.00
Period after first extended
maturity (beginning 20
years after issue date)
$37.50
50.00
$75. 00 $150. 00
100.00
200. 00
$375.00
500. 00
$750. 00
1, 000. 00
SECOND EXTENDED MATURITY PERIOD
First }^ year
'(12/1/65) $13. 91 $34 77
Yito 1 year
(6/1/66)
1^. 20 35.49
1 to 1>{ years
(12/1/66)
36. 23
1^.49
I'/Uo 2 years
(6/1/67)
1^. 79 36. 98
2 to 2/2 years
(12/1/67)
1.5. 10 37. 75
--(6/1/68)
15. 41 38. 53
2/2 to 3 years.
-(12/1/68)
3 to SY2 years.
15. 73 39.33
--(6/1/69)
s y to 4 years..
16. 06 40. 15
-(12/1/69)
4 to iY2 years..
16. 39 40.98
-(6/1/70)
iYi to 5 years.
16. 73 41.83
-(12/1/70)
17.08 42.70
5 to 5Y2 years..
-(6/1/71)
a y to 6 years..
17. 43 43.58
-(12/1/71)
6 to 6V2 years..
17.80 44. 49
--(6/1/72)
6Y2 to 7 years.
18. 16 45.41
-(12/1/72)
18. 54 46. 35
7 to 7>i years..
-(6/1/73)
7Y2 to 8 years..
1&92 47. 31
S t o 8/2 years
(12/1/73)
19.32 48. 30
8/2 to 9 years.
(6/1/74)
19.72 4c. 30
9 to 9/2 years
(12/1/74)
20. 13 50. 32
9K to 10 years
(6/1/75)
20. 55 51.37
SECOND EXTENDED
MATURITY
VALUE (20 years
from original maturity date)3...(12/1/75)
21.13 52.82
$69. 54 $139. 08 $278. 16 $695. 40 $1, 390. 80
141. 96 28c. 92
709. 80 1,419. 60
7C.98
724 60
1, 449. 20
72.46
144. 92 28?. 84
739. 60 1, 479. 20
7^. 96 147. 92 295. 84
75.5. 00 1, 510. 00
7.5. 50 15L 00 302. 00
770. 60 1, 541. 20
15'!. 12 308. 24
77.06
786. 60 1, 573. 20
78.66
157. 32 31^. 64
803. 00 1, 606. 00
8C. 30 160. 60 32L 20
819. 60 1, 639. 20
81. 96 163. 92 327. 84
836. 60 1, 673. 20
85. 66 167. 32 334 64
854 00
1, 708. 00
85.40
170. 80 341. 60
871. 60 1, 743. 20
87. 16 174 32 348. 64
889. 80 1, 779. 60
88.98
177. 96 355. 92
908. 20 1, 816. 40
9C.S2
181. 64 36c. 28
927. 00 1, 854 00
92. 70 185. 40 370. 80
946. 20 1, 892. 40
O'l. 62 18C. 24 378. 48
966. 00 1, 932. 00
96. 60 19c. 20 386. 40
986. 00 1, 972. 00
98. 60 197. 20 39'!. 40
100. 64 201.28 402. 56 1, 006. 40 2, 012. 80
102. 74 205. 48 410 96 1, 027. 40 2, 054 80
105.64
211.28
(2) On the
redemption
value at start
of the second
extended maturity period
to the beginning of each
half-year
period thereafter
Percent
0.00
4. 14
4 16
4 15
4 15
4 15
4 15
4 15
4 15
4 15
4 15
4 15
4 15
4 15
4 15
4 15
4 15
4 15
4 15
4 15
(3) On current redemption value
from beginning of each
half-year
period to second extended
maturity
Percent
2 4 15
2 4 15
2 4 15
2 4 15
2 4 15
4 25
4.26
4.26
4 28
4 29
4 30
4 32
4 34
4 37
4 40
4 46
4. 52
4. 65
4.91
5.65
422. 56 1, 056. 40
«Month, day, and year on which issues of December 1,1945, enter each period. For subsequent issue months add thc appropriate number of months.
2 Yield from beginning of each half-year period to second extended malurity at second
seco extended maturity value prior to the June 1,1968, revision.
' 30 years from issue date. Second extended maturity value improved by thc revision
revisio of Juno 1,1968.
* Yield on purchase price from issue dale to second extended maturity date is 3.48 p
168
19 68 REPORT OF T H E SECRETARY OF T H E TREASURY
TABLE 14
BONDS BEARING ISSUE DATES FROM JUNE 1 THROUGH NOVEMBER :
Denomination
_
$7.50 $18.75
25.00
10.00
$37. 50
50.00
$75. 00 $150. 00
100. 00 200. 00
$375.00
500. 00
$750. 00
1, 000. 00
(1) Redemption values during each half-year period
(values increase on first day of period sliown)
Period after first extended
jiiaturity (beginning 20
years after issue date)
(2) On the
redemption
value at start
of the second
extended maturity period
to the beginning of each
half-year
period thereafter
SECOND EXTENDED M-\TUR1TY PERIOD
First Hyear
..'(6/1/66) $13. 97 $ 3 4 92
14 26 35. 64
'/2 to 1 year
(12/1/66)
14 55 36. 38
1 to IH years.
(6/1/67)
14 86 37. 14
I H t o 2 years
(12/1/67)
15. 16 3 7 . 9 1
2 to 2H years
(6/1/68)
38.70
2 H t o 3 years
(12/1/68), 15.48
39.50
15.80
3 to 3H3'-ears
.(6/1/69)
16. 13 4 0 . 3 2
3H to 4 years
(12/1/69)
16. 46 41. 16
4 to 4H years
(6/1/70)
16.80 42. 01
4H to' 5 years
(12/1/70)
5 to 5^2 years
(6/1/71)^ 17. 15 42. 88
17. 51 43. 77
5/2 to 6 years
(12/1/71)
17. 87 44. 68
6 to 6H years
(6/1/72)
6H to 7 years
(12/1/72)' IS. 24 45. 61
18. 62 46. 55
7 to 7H years
(6/1/73)
19.01 47. 52
7 H t o Syears
(12/1/73)
19. 40 48. 50
8 to SH years
(6/1/74)
49.51
19.80
,8Hto9years
(12/1/7'1)
50. 54
20.22
9 to 9H years
(6/1/76)
51.59
20. 64
9 H t o 10 years
(12/1/75)
SECOND EXTENDED
MATURITY
VALUE (20 years
from original ma53.08
21.23
turity date)3... (6/1/76)
$69. 84 $139. 68 $279. 36 $698. 40 $1, 396. 80
1, 425. 60
712. 80
285. 12
1'12. 56
71. 28
1, 455. 20
727. 60
145. 52
72.76
29 L 04
742. 80
297. 12
148. 56
1, 485. 60
7 4 28
1, 516. 40
303. 28
15L 64
75. 82
758. 20
1, 548. 00
7 7 4 00
309. 60
1 5 4 80
77.40
1, 580. 00
790. 00
316. 00
158. 00
79.00
1, 612. SO
806. 40
322. 56
16L 2 8
80. 64
1, 646. 40
329. 28
164 64
82. 32
823. 20
1, 680. 40
168. 04
84. 02
336. 08
840. 20
857. 60
343. 04
17 L 52
85. 76
1,715.20
S7. 54
1, 750. 80
875. 40
350. 16
175. OS
357. 44
1, 787. 20
893. 60
178. 72
89. 36
182. 44
91.22
912. 20
3 6 4 88
1, 8 2 4 40
1, 862. 00
93 L 00
372. 40
186. 20
93. 10
1, 900. 80
950. 40
380. 16
190. 08
95. 04
970. 00
1 9 4 00
97.00
1, O'lO. 00
388. 00
198. 04
99.02
1, 980. 40
990. 20
396. 08
404. 32 1, 010. 80
IOL 08 202. 10
2, 02L 60
412. 72 1, 03L SO
2, 063. 60
103. 18 206. 36
106.16
212. 32
424. 64
1,061.60
yi eld
2, 123. 20
(3) On current redemption value
from beginning of each
half-year
period to second extended
maturity
Percent
2 4 15
2 4 15
2 4 15
2 4 15
4 25
4 26
4 27
4 28
4 28
4 30
4 31
4 33
4 35
4 38
4 42
4 48
4 56
4 70
4 96
5.78
Percent
0.00
4. 12
4 14
4 15
4 15
4. 15
4 15
4 15
4 15
4 15
4 15
4 15
4 15
4 15
4 15
4 15
4 15
4 15
4 15
4 15
M.23
' Month, day, and year on which issues of June 1,1946, enter each period. For subsequent issue nionths add thc appropriate number of months.
2 Yield from beginning of each half-year period to second extended maturity at second extended inaturity value prior to thc June 1, 1968, revision.
5 30 years from issue date. Second extended maturity value improved by thc revision of Juno 1, 1968.
* Yield on purchase price from issue date to second extended maturity date is 3.50 percent.
TABLE 15
BONDS BEARING ISSUE DATES FROM DECEMBER :
Issue price
$7.50
10.00
$18.75
25.00
$37. 50
50.00
$75. 00 $150.00
100. 00 200. 00
1946,
THROUGH MAY 1, 1947
$375. 00
500.00
$750. 00
1,000.00
(1) r edemption values duri lg each half- year period
(V lues incrcc SC on first lay of perio d shown)
Period after first extended
maturity (beginning 20
years aftw issue date)
SEC OND EX'PENDED ^ IAT U RIT \' PERIOD
First H year
'(12/1/66) $ 1 4 03 $35. 08 $70. 16 $140. 32 $280. 64 $701. 60 $1,403.20
1 4 32 35. 81 71.62
H t o 1 year..
(6/1/67)
143. 24
286. 48
716. 20
1. 432. 40
1 4 62 36. 55 73. 10
1 to IH years
(12/1/67)
146. 20 292. 40
731. 00
1.462.00
1 4 92 37.31
IH to 2 years
.(6/1/68)
74 62
149. 24 298. 48
746. 20
1,492. 40
15.
23
2 to 2H years
(12/1/68)
38.08
76. 16
152. 32 304 64
761. 60
1, 523. 20
15.55
2H to 3 years
(6/1/69)
38.87
77.74
155. 48 310. 96
777. 40
1. 554 80
15.87
3 to 3H years
(12/1/69)
39.68
79.36
158. 72 317. 44
793. 60
1, 587. 20
16.20
3H to 4 years
(6/1/70)
40.50
SLOO
162. 00 324 00
810. 00
1, 620. 00
16.54
4 to 4H years
(12/1/70)
41. 34 82.68
165. 36 330. 72
826. 80
1,653.60
16.88
4H to 5 years
(6/1/71)
42. 20 84 40
168. 80 337. 60
844 00
1, 688. 00
17. 23
5 to 5H years
(12/1/71)
43.08
86. 16
172. 32 344 64
861. 60
1, 723. 20
17.59
5H to 6 years
(6/1/72)
43. 97
87.94
175. 88 351.76
879. 40
1, 758. 80
17.95
6 to 6H years
(12/1/72)
44 88 89.76
179. 52 359. 04
897. 60
1, 795. 20
18.33
6H to 7 years
(6/1/73)
45. 82 91. 64
183. 28 366. 56
916. 40
1, 832. 80
18.71
7 to 7H years
(12/1/73)
46.77
93. 54
187. OS 374 16
935. 40
1, 870. 80
19. 10
7H to 8 years
(6/l/7'l)
47. 74 95. 48
190. 96 381. 92
954 80
1, 909. 60
19. 49
S to SH years
(12/1/74)
48. 73 97.46
194 92 389. 84
974 60
1,949. 20
19.90
S H t o 9 years
(6/1/75)
49.74
99.48
198. 96 397. 92
994 80
1. 989. 60
20.31
9 to 9H years
(12/1/75)
50.77 101. 54 203. 08 406. 16 1,015. 40
2. 030. 80
20.73
9H to 10 years
(6/1/76)
51. 82 103. 64 207. 28 414 56 1, 036. 40 2, 072. 80
SECOND EXTENDED
MATURITY VALUE
(20 years from original
maturity
date)3
(12/1/76)
21.34
53.35 106.70
213.40
426. 80 1, 067. 00
2,134.00
yi Id
(2) On thc
redemption
value al start
of the second
extended maturitv period
to the beginning of each
half-year
period thereafter
Percent
0.00
4. 16
4. 15
4. 15
4. 15
4. 15
4 15
4. 15
4. 15
4.15
4. 15
4. 15
4 15
4 15
4.15
4 15
4. 15
4. 15
4. 15
4.15
(3) On current redemption value
from beginning of each
half-year
period to second extended
maturity
Percent
2 4.15
2 4 15
2 4 . 15
4 25
4.26
4.27
4 27
4 28
4 30
4 31
4 32
4 34
4 37
4 39
4.44
4.49
4 58
4 73
5.02
5.91
M.24
1 Month, day, and year on which issues of December 1,1946, enter each period. For subsequent issue months add the appropriate number of months.
2 Yield from beginning of each half-year period to second extended maturity at second extended maturity value prior to the June 1, 1968, revision.
330 years from issue date. Second extended maturity value iinproved by the revision of June 1, 1968.
< Yield ou purchase price from issue date lo second extended maturity date is 3.52 percent.
169
EXHIBITS
TABLE 16
B O N D S B E A R I N G I S S U E D A T E S F R O M J U N E 1 T H R O U G H N O V E M B E R 1. 1947
I s s u e price
Denomination..
j $7. 50 $ 1 8 . 7 5
10.00 25.00
Period after first extended
maturity (beginning 20
years after issue dale)
First H y e a r
'(6/1/67)
H to 1 v e a r
(12/1/67)
1 to IH years
(6/1/68)
I H to 2 y e a r s
(12/1/6S)
2 to 2H y e a r s
(6/1/69)
2H t o 3 v e a r s
(12/1/69)
3 to 3H y e a r s
(6/ /70)
3H t o 4 y e a r s
(12/1/70)
4 t o 4H y e a r s
(6/1/71)
4H to 5 y e a r s
(12/1/71)
5 to 5H y e a r s
(6/1/72)
oH to 6 v e a r s
(12/1/72)
6 to 6H y e a r s
(6/1/73)
6H to 7 y e a r s
(12/1/73)
7 t o 7H y e a r s
(6/1/74)
7H to S y e a r s
(12/1/74)
S to SH y e a r s
(6/1/75)
SH t o 9 y e a r s
(12/1/7.5)
9 to 9H y e a r s
(6/1/76)
9H t o 10 y e a r s
(12/1/76)
SECOND EXTENDED
M A T U R I T Y VALUE
( 2 0 y e a r s from original
m a t u r i t y d a t e ) 3.(6/1/77)
$75.00
100.00
$37.50
50.00
$1.50.00
200.00
$375. 00
500. 00
$750.00
1, 000. 00
(2) On the
redemption
value at start
of the second
extended maturity period
to the beginning of each
lialf-year
period Hiereafter
SECOND EXTENDED MATURITY PERIOD
14
14
14
14
09 $35. 23 $70. 46 $140. 92 $281. 84
38 35. 96 71. 92 1143. 84 287. 68
68 36. 71 73. 42 146. 84 293. 68
99 37. 47 7 4 94 1'19. SS 299. 76
1.5.30
1.5. 62
15. 94
16. 27
1(). 61
16.95
17.30
17.66
18. 03
IS. 40
18. 79
19. IS
19. 5S
19. 98
20. 40
20.82
38.
39.
39.
40.
41.
42.
43.
21.44
53.61 107.22
25
04
85
68
52
38
26
44 16
45.08
46.
46.
47.
48.
49.
50.
52.
01
97
94
94
95
99
05
76. 50
78. OS
79. 70
Sl. 36
S3. 04
8 4 76
86. 52
88. 32
90. 16
92. 32
93. 94
95. SS
97. SS
99. 90
101.08
104 10
153.
156.
159.
162.
166.
169.
173.
176.
180.
184
187.
191.
19.5.
199.
203.
208.
00
16
40
72
08
52
04
64
32
04
SS
76
76
SO
96
20
$704
719.
734
749.
306. 00
765.
312. 32
780.
318. 80
797.
32,5. 44
813.
332. 16
830.
339. 04
S47.
346. OS
86.5.
353. 28
883.
360. 64
901.
368. OS
920.
375. 76
939.
383. 52
958.
391. 52
978.
399. 60
999.
407. 92 1, 019.
416. 40 1,041.
1, 072. 20
409. 20
438. 40
468. 40
498. SO
530. 00
561. 60
594 00
627. 20
660. 80
695. 20
730. 40
766. 40
803. 20
840. 40
878. SO
917. 60
957. 60
998. 00
039. 00
0S2. 00
(3) On current redemption value
from beginning of f'ach
half-year
period to second extended
malurity
4 14
4 16
4. 15
4
4
4
4
4
4
4
4
4
4
4
4
4
4
15
15
15
15
15
15
15
15
15
15
15
15
15
15
2 4 15
2 4 15
4 25
4. 26
4 26
4 27
4 2S
4 29
4. 31
4 32
4 34
4 36
4. 38
4 42
4 46
4 52
4 61
4 77
5.07
5.99
2,144.40 I
' Month, day, and year on which issues of June 1,1947, enter each period. Forsubsequent issue months add the appropriate number of months.
2 Yield from beginning ofcach half-year period to second extended maturity at second extended maturity value prior to the June 1,1908, revision.
3 30 years from issue date. Second extended maturity value improved by the revision of June 1, 1968.
* Yield on purchase price from issue date to second extended maturity date is 3.53 percent.
TABLE 17
B O N D S B E A R I N G I S S U E D A T E S F R O M D E C E M B E R 1, 1947, T H R O U G H M A Y 1, 1948
Issueprice
Denomination
$7.50
10.00
$ 1 8 . 7 5 $37. 50
25.00
50.00
$75.00
100.00
$150.00
200.00
$375. 00
500. 00
$750.00
1,000.00
Appro:
Period after fust extciulod
malurity (beginning 20
years after issue date)
SECOND EXTENDED MATURITY PERIOD
First H vear .
H to 1 y e a r . .
1 to 1H' y e a r s
. . ' ( 1 2 / 1 / 6 7 ) $14 16 $35. 39 $70. 78
...((i/l/OS)
14. 45 36. 12- 72. 24
-.(12/1/08)
M. 75 36. 87 73. 74
...(6/1/69)
1.5. 06 37. 64 7.5. 28
..(12/1/69)
2 to 2H y e a r s
15. 37 38. 42 76. 84
. . . (6/1/70)
2H to 3 y e a r s
15. 69 39. 22 78. 44
..(12/1/70)
3 io Sy> y e a r s
16. 01 40. 03 80. )6
---(6/1/71)
3 ' / to 4 y e a r s
16. 34 40. 86 81. 72
--(12/1/71)
4 lo 4'/< y e a r s
16. 68 41. 71 83. 42
---(6/1/72)
4H to 5 y e a r s
17. 03 42. 58 85. 16
..(12/1/72)
5 to aVi y e a r s
17.38 43. 46 86.92
.
(
6
/
1
/
7
3
)
5H to 6 y e a r s
17. 74 44. 36 88. 72
..(12/1/73)
6 to 61-2 y e a r s
18. 11 45. 28 90. 56
---(6/1/74)
a y to 7 y e a r s
18. 49 4(i. 22 92. 44
. .,w ./.• V....O
(12/1/74)
18.87 47. IS 94. 36
7H to S Vears
(6/1/75)
19.26 48. 10 96. 32
8 to SH years
(12/1/75)
19. 66 49. 16 98. 32
SH to 9 Vears
(0/1/70)
20. 07 50. 18 100. 36
9 to 9'/{. years
(12/1/76)
20. 49 51.22 102. 44
9'-{. to i d y e a r s
(6/1/77) . 20. 91 52. 28 104 56
SECOND EXTENDED
M A T U R I T Y VALUE
(20 y e a r s from original
malurity
date)3
(12/1/77)
21.55 53.87 107.74
ning of each
half-year
period iheio-
$141. 56 $283. 12 $707. 80 ;$1, 415. 60
722. 40 1 , 4 4 4 80
144 48 288. 96
737. 40 1, 474. 80
147. 48 294 96
752. 80 1, 505. 60
150. 56 301. 12
768. 40 1, 536. 80
153. 68 307. 36
784. 40 1, 568. 80
156. 88 31.3. 76
800. 60
160.12 320. 24
l,{i01. 20
817.20
163. 44 326. 88
1, 6 3 4 40
834. 20 1,668. 40
166. 84 333. 6S
851. 60 1,703. 20
170. 32 340. 64
869. 20 1, 738. '10
173. 84 347. 68
887. 20 1 , 7 7 4 40
177. 44 354 88
905. 60 1,811. 20
181. 12 362. 24
924 40
184 88 369. 76
1, 848. SO
943. 60 1,887. 20
188. 72 377. 44
963. 20 1, 926. 40
192. 64 385. 28
983. 20 1, 966. 40
196. 64 393. 28
200. 72 401. 44 1,003. 60 2, 007. 20
204. 88 409. 76 1,024 40 2, 048. 80
209. 12 418. 24 1,045. 60 2, 091. 20
PcTci.nl
0.00
4. 13
2 4. 15
4
4
4
4
4
4
4
4
4
4. 29
14
15
15
15
15
15
15
15
15
4 25
4 26
4.26
4 27
4 28
4 30
4 31
4. 32
4. 15
4 34
4 36
4. 39
4 42
4 47
4 53
4 63
4 79
4 15
4 15
5. 11
6.08
4. 15
4 15
4. 15
4 15
4. 15
4 15
2,154.80
' Month, day, and year on whicii issues of Tipccmber 1, 1947, enter each period. For sub.sequcnt issue monlhs add tho appropriate number of nionths.
2 Yield from beginning ofcach half-year period to second exiended malurity at second exiended inaturity value prior lo the June 1, 1968, revision.
3 30 years from issue date. Second exiended maturity value improved by the revision of June 1, 1968.
« Yield on purchase price from issue date to second extended inaturity date is 3.55 percent.
170
19 68 REPORT OF T H E SECRETARY OF T H E
TREASURY
TABLE 18
BONDS BEARING ISSUE DATES F R O M JUNE 1 T H R O U G H
I s s u e price
Denomination
..
$7. 50 $18. 75 $37. 50
10.00
25.00. 50.00
$75. 00 $150. 00
200. 00
100.00
$375.00
500. 00
N O V E M B E E 1, 1948
$750. 00
1,000.00
1 (2) On the re(3) On curdemption
value at start rent redemption value
of each
extended ma- from beginturity pci iod ning of each
to the beginhalf-year
ning of each period (a) to
flrst extended
half-year
maturity
period
thereafter
(1) Redemption values during each half-year period
values increase on first day of period shown)
Period after original maturity
(beginning 10 years after issue date)
FIRST EXTENDED MATURITY PERIOD
First H year
. . ' ( 6 / 1 / 5 8 ) $10. 00 $2.5. 00 $50. 00 $100. 00 $200. 00
H t o 1 year
(12/1/58)
2.5. 37
10. 15
50. 75
203. 00
101. 50
1 t o IH y e a r s
(6/1/59)
10. iO
206. 00
51. 50
25.75
103. 00
I H t o 2 years
(12/1/59)
10. 46
209. 12
1 0 4 56
26. 14 52. 28
2 t o 2H y e a r s
(6/1/60)
26. 52
10. 61
53.04
106. 08 212. 16
10.77
2H to 3 y e a r s
(12/1/60)
26. 93 5 3 . 8 6
107. 72 215. 44
5 4 72
3 t o 3H y e a r s . (6/1/61): 1 0 . 9 4
109. 44 218. 88
27.36
11. 12
3H to 4 years
(12/1/61)
222. 40
27.80
55. 60
111.20
4 t o 4H y e a r s
(6/1/62)
11.30
225. 92
2S. 24 56. 48
112.96
4H t o 5 y e a r s
(12/1/62)
229. 52
11. 48 2 8 . 6 9
1 1 4 76
57.38
5 t o 5H y e a r s
(6/1/63)
29. 21 58. 42
233. 68
11.68
116.84
5 H to 6 y e a r s
(12/1/63)
237. 84
118.92
11.89
59.46
29.73
60.52
12. 10 3 0 . 2 6
6 t o 6H y e a r s
(6/1/64)
242. 08
121.04
61.62
12.32
6H t o 7 y e a r s
(12/1/64)
123. 24 246. 48
30.81
62. 74
12. 55 31. 37
7 to 7 H y e a r s
(6/1/65)
125. 48 250. 96
12.77
7H to 8 years
(12/1/65)
127. 72 255. 44
31. 93 63. 86
32.52
S t o S H years
(6/1/66)
65.04
13. 01
130. 08 260. 16
8 H to 9 y e a r s
(12/1/66)
132. 80
13. 28 33. 20 6 6 . 4 0
265. 60
9 t o 9H y e a r s
(6/1/67)
13.57
271. 44
135. 72
67.86
33.93
9 H t o 10 y e a r s . . . . (12/1/67)
277. 60
3 4 70 6 9 . 4 0
13.88
138. 80
FIRST EXTENDED MAT U R I T Y VALUE (10
y e a r s from original m a 14.22
turity d a t e ) ' . . . ( 6 / 1 / 6 8 )
142. 20 284. 40
71.10
35.55
Period after first extended maturity
(beginning 20 years after issue date)
$500.
507.
515.
522.
530.
538.
547.
556.
564
573.
584
594
605.
616.
627.
638.
650.
664
678.
694
Approximate Investment
y eld
00 $1, 000. 00
1, 015. 00
50
1, 030. 00
00
80
1, 045. 60
1, 060. 80
40
1, 077. 20
60
1, 0 9 4 40
20
1,112.00
00
1, 129. 60
80
1, 147. 60
SO
1, 168. 40
20
1, 189. 20
60
1, 210. 40
20
1, 232. 40
20
1, 2 5 4 SO
40
1, 277. 20
60
1, 300. SO
40
1, 328. 00
00
1, 357. 20
60
1. 388. 00
00
Percent
0.00
3.00
2.98
2.99
2.97
3.00
3.03
3.06
3.07
3. OS
3. 14
3.18
.3.21
3.24
3.27
3.29
3.31
3.37
3.42
3.48
1, 422. 00
6 3.55
711.00
(b) to second
extended
maturity
SEC OND EX'FENDED I IATURIT1{ PERIOD
First H y e a r
(6/1/6S)' $ 1 4 22 $35. 55 $ 7 1 . 1 0 $142. 20 $ 2 8 4 40 $711. 00 $1, 422. 00
H t o 1 year
..(12/1/68)
1,451.60
725. SO
14.5. 16 290. 32
1 4 52 36. 29
72.58
1 4 82 3 7 . 0 4
1 to I H y e a r s
(6/1/69)
740. SO
296. 32
1,481.60
7 4 OS
14S. 16
1, 512. 40
756. 20
I H t o 2 years
(12/1/69)
151. 24 302. 48
75. 62
15. 12 3 7 . 8 1
2 t o 2H y e a r s
(6/1/70)' 15. 44
1, 543. 60
1 5 4 36 308. 72
77. 18
771.80
3S. 59
787. SO
1, 575. 60
2 H to 3 y e a r s
(12/1/70): 15. 76
315. 12
157. 56
78. 78
39. 39
3 t o 3H y e a r s
.(6/1/71)
1, 608. 40
8 0 4 20
321. 68
40. 21 SO. 42
160.84
16.08
1, 642. 00
821. 00
16.42
3Hto4ye.ars
(12/1/71)
1 6 4 20 328. 40
41. 05 82. 10
4 t o 4H y e a r s
(6/1/72)
1, 676. 00
838. 00
167. 60 335. 20
41. 90 8 3 . 8 0
16.76
1,710.80
4H to 5 years
(12/1/72)
855. 40
342. 16
17. 11 4 2 . 7 7
85. 54
171.08
5 to 5H y e a r s .
(6/1/73)
873. 00
349. 20
1 7 4 60
17. 46
1,746. 00
43. 65 87. 30
1, 782. 40
891. 20
17. 82
5H to 6 y e a r s
(12/1/73)
4 4 56 89. 12
178. 24 356. 48
909. SO
6 to 6H y e a r s
(6/1/74)
1, 819. 60
181. 96 363. 92
90. 98
45. 49
18. 20
1,857. 20
6H to 7 y e a r s
(12/1/74)
928. 60
185. 72 371. 44
46. 43 9 2 . 8 6
18. 57
947. 80
7 to 7H years
(6/1/75)
1, 895. 60
189. 56 379. 12
IS. 96 4 7 . 3 9
9 4 78
1,935.20
967. 60
96. 76
7H to 8 y e a r s
(12/1/75)
193. 52 3S7. 04
19. 35 48. 3S
987. 60
197. 52 395. )4
8 to SH y e a r s
(6/1/76)
1, 975. 20
98. 76
49. 38
19. 75
20. 16 50. 40 100. SO 201. 60
S H t o 9 years
(12/1/76)
403. 20 1, OOS. 00 2, 016. 00
9 to 9H y e a r s
(6/1/77)
411. 60 1, 029. 00 2, 058. 00
20. 58 51. 45 102. JO 205. 80
9 H to 10 y e a r s . . . . (12/1/77)
21. 01 52. 52 105. 04 210. 08 420. 16 1, 050. 40 2, 100. 80
SECOND EXTENDED
M A T U R I T Y VALUE
(20 y e a r s from origina!
maturity d a t e ) ^ ( 6 / l / 7 8 ) 21.65
5 4 . 1 3 108. 26 216. 52 4 3 3 . 04 1, 082. 60 2 , 1 6 5 . 2 0
Percent
23.00
23.00
33.50
33.53
33.57
3 3. 60
3 3.63
33.66
33.70
33.75
3 3.76
33.79
33. 81
33.84
3 3.87
* 4 34
•4.50
M . 61
* 4 72
* 4 90
0.00
4 16
4 15
4 15
4 15
4 15
4 15
4 15
4 15
4 15
4 15
4 15
4 15
4 15
4 15
4 15
4. 15
4 15
4 15
4 15
6 4. 25
' Month, day, and year on whicii issues of June 1, 1948, enter each period. For subsequent issue montlis add the appropriate number of nionths.
5 Yield from beginning of each half-year period lo first extended maturity at fust exiended
ity value prior lo the June 1, 1959, revision,
3 Yield from beginning ofcach half-year jieriod to first extended maturity at first extended ilurily value prior to the December 1, 1965, revision,
< Yield from beginning of eacli half-year period to lirst extended malurity at first extended iiluriiy value prior lo the June 1, 1908, revision.
5 20 years from issue date.
0 Yield on purchase price from issue date to first extended maturity date is 3.22 percent; second exiended maturity date is 3.57 percent
' 30 years from issue date. Second extended maturity value improved by thc revision of June 1,1968.
4 25
4.25
4 26
4. 27
4 27
4 28
4 29
4. 30
4 31
4 33
4 35
4. 37
4 39
4. 43
4 4S
4. 54
4 65
4 82
5. 14
6. 13
171
EXHIBITS
TABLE 19
BONDS BEARING ISSUE DATES FROM DECEMBER 1. 1948. THROUGH MAY 1,
Issueprice
Denomination
I $7.50 $18.75 i$37. 50
10.00 I 25.00 50.00
$75.00 $150.00
100.00 200.00
$375. 00
500. 00
$750. 00
1,000.00
(1) Redemption values during each half-year period
(values increase on first day of period sliown)
Period after original maturity
(beginning 10 years after issue date)
FIRST EXTENDED MATURITY PERIOD
First Hyear
'(12/1/58) $10. 00 $2.5. 00 $50. 00 '$100. 00 $200. 00 $500. 00
H to 1 year
(6/1/.59) 10. 15 • 25. 37 50. 75 101. 50 • 203. 00 507. 50
1 to IH years
(12/1/59) 10. 30 25. 76 51. 52 103. 04 206. OS 515. 20
IH to 2 years
(6/1/60) 10. 46 26. 14 52. 28 104 56 209. 12 522. SO
2 to 2H years
(12/1/60) 10. 61 26. 53 53. 06 106. 12 212. 24 530. 60
2H to 3 years
(6/1/61) 10. 78 26. 96 53. 92 107. 84 215. 68 539. 20
3 to 3H years
(12/1/61) 10.96 27. 39 54 78 109. .56 219. 12 547. SO
3H to 4 years
(6/1/62) 11. 13 27. 83 55. 66 111. 32 222. 64 556. 60
4 to 4H years
(12/1/62) 11. 31 28.28 56. 56 113. 12 226. 24 565. 60
4H to Syears
(6/1/63) 11. 50 28. 74 57. 48 114 96 229. 92 574 SO
585. 20
5 to 5H years
(12/1/63) 11. 70 29. 26 58. 52 117.04 234 OS
5H to 6 years
(6/1/64) 11.92 29. 79 59. 58 119. 16 238. 32 595. SO
6 to 6H years
(12/1/64) 12. 13 30.33 60. 66 121. 32 242. 64 606. 60
6H to 7 years
(6/1/65) 12. 35 30. 87 61. 74 123. 48 246. 96 617.40
7 to 7H years
(12/1/65) 12. 57 31. 43 62. 86 12.5. 72 251. 44 628. 60
7H to Syears
(6/1/66) 12. SO 32.01 64 02 128. 04 256. OS 640. 20
8 to SH years
(12/1/66) 13. 05 32. 63 65. 26 130. 52 261. 04 652. 60
SH to 9 vears
.(6/1/67) 13. 33 33.33 66. 66 133.32 266. 64 666. 60
9 to 9H years
(12/1/67) 13. 63 3 4 07 68. 14 136. 28 272. 56 681.40
9H to 10 years
(6/1/68) 13.94 3 4 85 69. 70 139. 40 278. SO 697. 00
FIRST EXTENDED
MATURITY VALUE
(10 years from
original maturity
date)5
(12/1/68) 14.29 I 35.72 I 71.44 | 142.
285.76 I 714.40
$1, 000. 00
1,015.00
1,030.40
1,045.60
1,061.20
1, 078. 40
1,095.60
1, 113. 20
1, 131. 20
1,149.60
1, 170.40
1, 191.60
1,213.20
1,234 80
1, 257. 20
1, 280. 40
1, 305. 20
1, 333. 20
1, 362. 80
1, 394 00
Approximate investment
yield
(2) On the redemption
value at start
of each
extended maturity period
to thc beginning of each
half-year
period
thereafter
(3) On current redemption valuo
from beginning of each.
half-year
period (a) to
first extended
maturity
Percent
Percent
0.00
3.00
3.02
2.99
2.99
3.04
3.07
3.09
3. 11
3. 12
3. 17
3. 21
3.25
3.27
3.30
3.32
3.36
3.41
3.47
3.53
1. 428. 80
(b) to second
extended
maturity
SECOND E.XTENDED MATURITY PERIOD'
First Hyear
(12/1/6S) $14 29 $35.72 $71.44 $142.88
Hto lyear
(6/1/69) 14.58 36.46 72.92 14.5.84
1 to IH years
(12/1/69) 14 89 37. 22 74 44 148. SS
I H t o 2 years
(6/1/70) 1.5.20 37.99 75.98 151.96
2 to 2H years
(12/1/70) 15.51 38.78 77.56 155. 12
2H to 3 years
(6/1/71) ' 15.83 39.58 79.16 158.32
3 to 3H vears
(12/1/71) 16. 16 40. 40 80. 80 161. 60
3H to 4 years
(6/1/72) 16.50 | 41.24 ! 82.48 ! 164 96
4 to 4H years
(12/1/72) 16.84 I 42. 10 j 84 20 ! 168.40
4H to 5 years
(6/1/73) 17.19 42.97 85.94 171.88
5 to 5H years
(12/1/73) 17.54 43.86 87.72 175.44
5H to 6 years
(6/1/74) 17. 91 44 77 89. .54 179. 08
6 to 6H years
(12/1/74) IS. 28 45. 70 91. 40 1S2. SO
6H to 7 years
(0/1/75) 18. 66 46. 65 93. 30 ISO. 60
7 to 7H years
(12/1/75) 19.05 47.62 95.24 190.48
7H to S years
(6/1/76) 19. 44 48. 61 97. 22 194 44
S t o S H years
(12/1/76) 19.85 49.62 99.24 198.48
SH to 9 years
(6/1/77) 20. 26 50. 65 101. 30 202. 60
9 to 9H years
(12/1/77) 20. OS 51. 70 103. 40 206. 80
9H to 10 years
(6/1/7S) 21. 11 52. 77 105. 54 211. OS
SECOND EXTENDED
MATURITY VALUE
(20 years from origini
maturity
date)s...
(12/1/78) I 21.76 I 54.39 I 108.781 217.56
23.00
33.50
33.53
3 3.56
33.59
33.62
3 3.65
33.68
33.72
3 3.76
3 3.78
33.79
33.82
33.85
•4.29
•4.41
• 4. 55
• 4 63
•4.73
4.99
$285.76 $714 40 $1,428.80
I 291.68
729.20 1,458.40
297. 76
744 40 1, 488. 80
303.92
7.59. SO 1,519.60
310.24
775.60 1,551.20
316.64
791.60 1,583.20
323. 20
SOS. 00 1, 616. 00
! 329.92
824 80 1,649.60
| 336.80
842.00 1,684 00
343.76
859.40 1,718.80
350.88
877.20 1,754 40
358. 16
895. 40 1, 790. 80
365. 60
914 00 1,828. 00
i 373. 20
933. 00 1, 866. 00
\ 380.96
952.40 | 1,904 80
j 3SS. SS
972. 20 1 1, 944 40
396.96
992.40 1,984 80
405. 20 1, 013. 00 2, 026. 00
413.60 1,034 00 2,068.00
422. 16 1, 055. 40 2, 110. 80
I 435.12 |I, 087. 80 I 2,175.60 I
0.00
4. 14
4 16
4 15
4 15
4. 15
4. 15
4. 15
4. 15
4 15
4 15
4 15
4.15
4. 15
4. 15
4 15
4. 15
4 15
4 15
4.15
4.25
4.25
4.26
4:27
4.27
4.28
4.29
4.30
4.31
4.33
4.35
4.37
4.40
4.43
4.48
4.54
4.64
4.81
5.14
6.14
° 4. 25
' Month, day, and year on which issues of December 1, 1948, enter each period. For subsequent issue months add thc appropriate number of months.
2 Yield from beginning ot eacli half-year period lo first extended maturity al first extended malurity value prior to thc June 1, 1959, revision.
' Yield from beginning of each half-year period to first extended maturity al first extended maturity value prior to the Deceraber 1,1965, revision.
« Yield from beginning ot each half-year period to first extended malurity at first extended maturity value prior to thc June 1,1968, revision.
5 20 years from issue dale. First extended maturity value improved by thc revision of June 1, 1068.
• Yield on purchase price from issue dale to first extended maturity dale is 3.25 percent; lo second extended malurity date is 3.58 percent.
' Kcdcmplion values during second extended malnrily period raised lo refiect improvement at first extended maturity. Second extended maturity valUO
iraproved to provide an investnient yield of appioximalcly 4.25 percent from first extended malurity.
8 30 years from issue date.
172
19 68 REPORT OF T H E SECRETARY OF T H E TREASURY
TABLE 20
BONDS BEARING ISSUE DATES FROM JUNE 1 THROUGH NOVEMBER 1, 1949
$7.50 $18.75
10.00
25.00
Issue price
Denomination.
$37. 50
50.00
$75. 00 $150.00
100. 00 200.00
375. 00
500. 00
$750. 00
1, 000. 00
(2) On thc
redemption
,'aluc al slarl redemption
lof the extended I value from
maturity
beginning of
period to the each half-year
beginning of
period to
each half-yea
exiended
period therematurity
after
EXTENDED MATURITY PERIOD
First H year
' (6/1/59) ;io. 00 $2.5. 00
H t o 1 year
(12/1/.59)
10. 18 25. 44
1 to IH years
(6/1/60)
10. 36 25. 89
2Yi to 2 years
(12/1/60)
10. 54 26.35
2 to 2H years
(6/1/61)
10. 73 26. 83
2H to 3 years
(12/1/61). 10. 92 27. 31
3 to 3H years
(6/1/62)
11. 12 27. 81
3H to 4 years
(12/1/62)
11.33 28.32
11. 54 28.84
4 to 4H years
(6/1/63)
4H to 5 years
(12/1/63)
11. 75 29.38
11.97 29. 93
5 to 5H years
(6/1/64)
12.20 30.49
5H to 6 vears
(12/1/64)
6 to 6H years
(6/1/6.5)
12. 43 31.07
6H to 7 years
(12/1/65)
12. 66 31. 66
7 to 7H years
(6/1/66)
12. 91 32.27
7H to S years
(12/1/66)
13. 17 32.93
8 to SH years
(6/1/67)
13. 45 33. 62
SH to 9 years
(12/1/67)
13. 74 34 34
9 to 9H years
(6/1/68), 14 04 3.5. 10
14 36 35.91
!)H to 10 years
(12/1/6S)
EXTENDED MATURITY
VALUE (10 years from
original maturity
36.80
date)^
(6/1/69)
$100. 00 $200. 00 '$500. 00 $1,000. 00
$50. 00 •
50. 88 ' 101. 76 203. 52 508. 80 ' 1,017. 60
51. 78 103. 56 207. 12 517. 80 1, 035. 60
52. 70 105. 40 210. SO 527. 00 1, 054 00
53. )6 107. 32 214 64 536. 60 1,07.3.20
109. 24 218.48 546. 20 1, 092. 40
5 4 62
55. )2 111. 24 222. 48 556. 20 1, 112. 40
56. 54 113. 28 226. 56 566. 40 1, 132.80
57. 68 115. 36 230. 72 •576. 80 1, 153. 60
58. 76 117. 52 235. 04 587. 60 1, 175. 20
59. 86 119. 72 239. 44 598. 60 1, 197. 20
121.96 243. 92 609. 80 1,219. 60
60.98
62. [4 124 28 248. 56 621. 40 1, 242. SO
63. 32 126. 64 253. 28 633. 20 1, 266. 40
1,290.80
6 4 54 129. 08 2,58. 16 645. 40
65. 86 131. 72 263. 44 658. 60 1, 317. 20
67. 24 134 48 268. 96 672. 40 1, 344 80
68. 68 137. 36 274 72 686. 80 1, 373. 60
70. 20 J 40. 40 280. SO 702. 00 1, 404 00
143. 64 287. 28 718. 20 1,436.40
71.82
73.60
Percent
0. 00
3. 52
3. 53
3.54
3. 56
3. 57
3. 58
3.59
3.60
3. 62
3.63
3.64
3.66
3. 67
3.68
3.71
3. 74
3.77
3.81
3.85
Percent
23. 75
2 3. 76
2 3. 77
2 3. 79
2 3.80
2 3. 81
2 3. 82
2 3. S3
2 3. 85
2 3. 86
2 3.87
23.88
2 3. 89
3 4 31
3 4 39
3 4 45
3 4 51
3 4. 59
4 79
4 96
1, 472. 00
' Month, day, and year on which issues of June 1,1949, enter each period. For subsequent issue months add thc appropriate number of monlhs.
- Yield from begiiming of each half-year period lo extended maturity at extended maturity value prior to the December 1, 1965, revision.
3 Yield from bogiiiniiig of each half-year period lo extended niaturity at extended maturity value prior lo the June 1, 1908, revision.
•• 20 years from issue dale. Extended inaturity value improved by the revision of June 1, 1968.
' Yield on purchase price from issue date to extended maturity date is 3.40 percent.
TABLE 21
BONDS BEARING ISSUE DATES FROM DECEMBER 1, 1949, THROUGH MAY 1, 1950
Issue price
Denomination
..
$7. 50 $18.75 $37.50
50.00
10. 00 25.00
$75. 00 $150. 00 $375.00
200. 00 500. 00
100.00
$750. 00
1, 000. 00
EXTKNDKD MATURITY PERIOD
irst Hyear
"(12/1/59) $10.03 $25. OS '$50. 16 $100. 32 $200. 64 l$501. 60 |$1,003. 20
: to 1 year
(6/1/60)
10. 21 2.5. )2 51. 04 102.08 204 16 510. 40 1,020. SO
to IH vears
(12/1/60)
10. 39 2.5. )7 51. 94 103. SS 207. 76 519. 40 1, 038. SO
\<i to 2 vears
(6/1/61)
10. 38 26. 44 52. 88 105. 76 211. 52 528. SO 1,057. 00
to 2H years
(12/1/6!)
10. 76 26. 11 53. 82 107. 64 215. 28 538. 20 1,076. 40
109. 60 219. 20 54S. 00 1, 096. 00
'A to 3 years
(6/1/62)
10. .)6 27. 10 54 SO
to 3H vears
(12/1/62)
11. 16 27. 10 5.5. SO 111. 60 223. 20 558. 00 1, 116. 00
'/. to 4 vears
(6/1/63)
11. 36 2S. 41 5(1 S2 113. 64 227. 28 56S. 20 1, 136. 40
to 4H years
.(12/1/63)
11. 57 2S. )3 57. 86 11.5. 72 23K 44 578. 60 1, 157. 20
^.:; to 5 years
(6/1/64)
11. 79 20. 47 5S. 94 117. SS 235. 76 589. 40 1, 178. SO
to 5H years
(12/1/64)
12. 01 30. 02 60. 04 120. OS 240. 16 600. 40 1, 200. SO
12. 24 30. 59 61. 18 122. 36 244 72 611. 80 1, 223. 60
y to 6 years
(6/1/65)
to 6H years
.(12/1/65)
12. 46 31. 6 62. 32 124 64 249. 28 623. 20 1, 246. 40
1,270. 80
12. 71 31. 77 63. 54 127. OS 254 16 635. 40
y to 7 years
(6/1/66)
to 7H years
(12/1/66)
12. 96 32. 40 64. SO 129. 60 259. 20 648. 00 1, 296. 00
H to Syears
(6/1/67)
13. 22 33. )6 66. 12 132. 24 264. 4S 661. 20 1,322. 40
13. 50 33. 76 67. 52 135. 04 270. OS 675. 20 1, 350. 40
to SH vears
(12/1/67)
H to 9 years
(6/1 /6S)
13. SO 34. 50 69. 00 138. 00 276. 00 690. 00 1,380. 00
14. 11 35. 27 70. 54 141. 08 282. 16 705. 40 1,410. 80
to 9H years
(12/1/68)
14 44 36. 10 72. 20 144 40 288. SO 722. 00 1,444 00
H to 10 years
(6/1/69)
XTENDED MATURITY
VALUE (10 years from
original maturity
date)^
...(12/1/69) 14.80 37.00
(2) On the
redem plioii (.'!) On current
.'alue al start redemption
ofthe extended
maturity
beginning of
period
each half-year
period io
begin gof
each half-year
extended
period tliereafter
Percent
0. 00
3. 51
3. 52
3. 55
3. 55
3. 57
3. 58
3. 59
3.60
3. 62
3. 63
3. 64
3. 65
3. 67
3. 69
3. 72
3.75
3.79
3.82
3.87
Percent
2 3. 75
2 3. 76
2 3. 77
2 3. 78
2 3. SO
2 3. Sl
2 3 ,S2
2 3. S3
2 3. S5
2 3. 86
2 3. 87
2 3. 88
3 4. 30
3 4 35
3 4 42
3 4. 49
3 4 55
4. 72
4. 85
4 99
' Month, day, and year on which issues of December 1, 1949, enter each period. Kor subsequent issue inonths add the appropriate number of months.
: Yield from beginning of each hiilf-ycar period lo exiended maturity at extended malurity value prior lo the December 1, 1965, revision.
3 Yield from beginning ofcach half-year period to rxleiidc.d malurity al extended maturity value prior to the June 1, 1968, revision.
* 20 years from issue date. Exiended iiialuriiy value improved by Un; revision of June 1, 1968.
5 Yield on purchase price from issue dale to extended malurity dale is 3.43 percent.
173
EXHIBITS
TABLE 22
BONDS BEARING ISSUE DATES FROM JUNE 1 THROUGH NOVEMBER 1, 1950
Issue price
Denomination.
$18.75
25.00
$37. 50
50.00
$75. 00 $150.00 $375. 00
500. 00
100. 00 200.00
$750. 00
1, 000. 00
(2) On the re- (3) On current
demption
redemption
value at start | valuo from
[of the extended beginning of
maturity pc- ,each half-year
riod to the beperiod to
ginning of each
extended
half-year pematurityriod thereafter
Period after original malurity (beginning
10 years after issue date)
EXTENDED MATURITY PERIOD
First H year
' (6/1 /GO)
H to 1 y e a r . . .
(12/1/60)
1 to IH years
(6/1/61)
IH to 2 years
(12/1/61)
2 to 2H year.s
(6/1/62)
2H to 3 years
(12/1/62)
3 to 3H years
...(6/1/63)
3H to 4 years
(12/1/63)
4 to 4H years
(6/1/64)
4H to 5 years
(12/1/64)
5 to 5H years.(6/1/65)
5H to 6 vears
(12/1/65)
6 to 6H vears
(0/1/66)
OH to 7 years
.(12/1/66)
7 to 7H years
(6/1/67)
7H to S years
(12/1/67)
S to SH years
(6/1/6S)
SH to 9 years
(12/1/68)
9 to 9H years
(6/1/69)
9H to 10 years
(12/1/69)
EXTENDED MATURITY VALUE
(10 years from ori inal maturity
date)^
(6/1/70)
$2,5. 15
25. 59
26. 05
26. 51
26. 99
27. 48
27. 98
28. 49
29. 01
29. 55
30. 10
30. 67
31. 26
31.88
32. 53
33. 20
33. 92
3 4 67
35. 44
36. 26
Percent
0.00
3.50
3. 55
3. 54
3. 56
3.58
3. 59
3.59
3.60
3.62
3.63
3.64
3. 66
3.68
3.71
3.74
3.77
3.81
3. 85
3.89
$50. 30 $100. 60 |$201. 20 |$503. 00 |$1, 006. 00
1, 023. 60
102. 36 204 72 511.80
51. 18
104 20 208. 40 521. 00 1, 042. 00
52. 10
53. 02 106. 04 212. OS 530. 20 1, 060. 40
1, 079. 60
539.
SO
215.92
53. 98 107. 90
109. 92 219. 84 549. 60 1, 099. 20
54 96
.5.5. 96 111. 92 22.3. S4 559. 60 1, 119. 20
1, 139. 60
56. 9S 113. 96 227. 92 569. SO
58. 02 116.04 232'. OS 580. 20 1, 160. 40
59. 10 118. 20 236. 40 .591. 60 1, 182. 00
60. 20 120. 40 240. SO 602. 00 1, 204 00
61. 34 122. OS 24.5. 36 613. 40 1, 226. SO
62. 52 12.5. 04 250. OS 62.5. 20 1, 250. 40
6.3. 76 127. 52 255. 04 637. 60 1,27.5.20
65. 06 130. 12 260. 24 650. 60 1, 301. 20
66. 40 132. 80 265. 60 664 00 1, 328. 00
67.84 13.5. 68 271. 36 678. 40 1, 356. 80
69. 34 138. 68 277. 36 693. 40 1, 386. 80
1, 417. 60
141. 76 283. 52 70S. SO
70.88
72. 52 14.5. 04 290. OS 725. 20 1, 450. 40
2 3. 75
2 3. 76
2 3.77
2 3.79
2 3. 80
2 3.81
23.82
2 3. 84
2 3. 85
2 3. 86
2 3.88
3 4.29
3 4 34
3 4. 40
3 4 45
3 4 51
4 67
4 75
4 91
5. 18
1, 488. 00
' Month, day, and year on which issues of June 1, 1950, enter each period. For subsequent issue months add the appropriate number of n
' VkUi from beginning of eacli half-year period lo exiended malurity at exiended inaturity value prior to the December 1, 1965, n
3 Vickl from Ijegiiining ofcach half-year period to cxteiuled maturity al extended maturity value prior lo the June 1, 1908, revisio
* 20 years from issue date. Extended maturity value imiiroved by the revision of June I, 1908.
' Yield on purchase price from issue date to extended maturity date is 3.46 percent.
TABLE 23
BONDS BEARING ISSUE DATES FROM DECEMBER 1, 1950, THROUGH MAY 1, 1951
Issue price
Denomination.
$18.75
25.00
$37.50
50.00
$75.00 $150.00
100.00
200.00
$375.00
500.00
$750.00
1, 000. 00
(2) On thc re- (3) On current
redemption
domption
value at start value from
|oftlicexlended; beginning of
maturity pe- each half-year
riod lo the beperiod lo
ginning ofcach extended
maturity
half-year period thereafter
EXTENDED MATURITY PERIOD
First Hyear
'(12/1/60)
H to 1 year
(6/1/61)
1 to IH years
(12/1/61)
IH to 2 years
(6/1/62)
2 to 2H vears
(12/1/62)
2H to 3 years
(6/1/63)
3 to 3H years
(12/1/63)
3H to 4 years
(6/1/64)
4 to 4H years
(12/1/64)
4H to 5 years
(6/1/6.5)
5 to 5H years
.(12/1/65)
5H to 6 years
(6/1/66)
6 to 6H years
(12/1/66)
6H to 7 years
..(6/1/67)
7 to 7H years
(12/1/67)
7H to 8 years
(6/1/68)
8 to SH years
(12/1/68)
8H to 9 years
(6/1/69)
9 to 9H years
(12/1/69)
9H to 10 years
(6/1/70)
E X T E N D E D MATURITY VALUE
(10 years from original
maturity date)<
(12/1/70)
$25. 22
25. 66
26. 12
26. 58
27. 06
27. 55
28. 05
28. 57
29. 09
29. 03
30. 19
30.77
31. 37
32. 00
32. 65
33. 35
34. 06
3 4 82
35. 61
36.43
$50. 44 $100. 88 $201. 76
51. 32 102. 64 205. 28
52. 24 104 48 208. 96
53. 16 106. 32 212. 64
5 4 12 108. 24 216.48
110. 20 220. 40
55. 10
56. 10 112. 20 224 40
114 28 228. 56
57. 14
58. 18 116. 36 232. 72
59. 26 118. .52 237. 04
60. 38 120. 76 241. 52
61. 54 123. OS 246. 16
62. 74 125. 48 250. 96
128. 00 256. 00
6 4 00
65. 30 130. GO 261. 20
66. 70 133. 40 266. SO
68. 12 136. 24 272. 48
69. 64 139. 28 278. 56
71. 22 142. 44 284 88
145. 72 291. 44
72.86
Approximate investment
yield
;504 40 $1, OOS. SO
513. 20 1, 026. 40
522. 40 1, 044 SO
531. 60 1, 063. 20
541. 20 1,082. 40
551. 00 1, 102. 00
561. 00
1, 122. 00
571. 40 1, 142. SO
.581.80 1, 16.3. 60
592. 60 1, 18.5. 20
603. SO
1, 207. 60
615. 40 1, 230. 80
627. 40 1, 254 80
640. 00 1, 280. 00
653. 00 1, 306. 00
667. 00 1, 334 00
681. 20 1, 362. 40
696. 40 1, 392. 80
712. 20 1, 424 40
728. 60 1, 457. 20
Percent
0. 00
3. 49
3. 54
3. 53
3. 55
3. 57
3. 58
3. 60
3. 60
3. 61
3.63
3. 65
3. 67
3. 70
3.72
3.76
3.79
3.83
3.87
3.91
Percent
2 3. 75
2 3.76
2 3.77
2 3. 79
23. SO
23. 81
2 3.83
2 3.83
2 .3. 85
23.86
3 4 27
3432
3438
3 4 43
3 4 49
4. 64
4 73
4.82
4.97
5.33
1, 496. 00
' Month, day, and year on which issues of December 1, 1950, enter each period. For subsequent issue months add the appropriate number of nionths.
- Yield from beginning ofcach half-year period to extended malurity at extended inaturity value prior lo the December 1, 1905, revision.
' Yield from beginning ofcach half-year period lo extended maturity at extended maturity value prior to the June 1, 1908, revisiort.
* 20 years from issue date. Extended maturity value improved by the revision of June 1,1908.
»
* Yield on purchase price from issue date to extended maturity date is 3.48 percent.
174
19 68 REPORT OF T H E SECRETARY OF T H E
TREASURY
TABLE 24
BONDS BEARING ISSUE DATES FROM JUNE 1 THROUGH NOVEMBER 1, 1951
Issue price
Denomination
$18.75
25. 00
$37. 50
50.00
$75.00 $150.00 !$.375.00 i $750.00
100.00 I 200.00 I 500.00 | 1,000.00
(1) Redemption values during each half-year period
(values increase on first day of period shown)
(2) On the r (3) On current
demption
redemplion
value al sta
value from
'ofthe extended I beginning ot
maturity
each half-year
riod to the
period to
ginning of each I extended
half-year pematurity
riod thereafter
EXTENDED MATURITY PERIOD
First Hyear
'(6/1/61) $25. 30 S50. GO $101. 20 $202. 40 $506. 00 $1, 012. 00
1,030. 00
25. 75
H to 1 year
.(12/1/61)
51. 5 0 103. 00 I 206. 00 515. 00
1,04S. 00
26. 20 52. 40 104
1 to IH vears
...(6/1/62)
209. 60 524. 00
1, 066. 80
213. 36 533. 40
26. 67 53. 34 106.
IH to 2 years
(12/1/62)
1, OS 6. 00
217. 20 543. 00
27. 15 54 30 108.
2 to 2H years
(6/1/63)
110.
221. 12 552. SO 1, 105. 60
i>d. 28
27. 64
2H to 3 years
(12/1/63)
225. 12 502. SO 1, 12,5. 60
28. 14 56. 28 1 12.
3 to 3H years
(6/1/64)
229. 28 573. 20 1, 146. 40
3H to 4 years
(12/1/64)
28. 66 57. 32 114
1, 167. 60
233. 52 553. 80
58. 3S IKJ.
29. 19
4 to 4H years
(6/1/65)
1, 189. 20
237. 84 594 60
4H to 5 years
(12/1/65)' 29. 73 59. 46 lis.
1, 211. 60
242. 32 60.5. 80
30. 29 60. 58 121.
5 to 5H years
(6/1/66)
1, 234 SO
246. 96 617. 40
30. 87 61. 74 123.
5H to 6 vears
(12/i/GG)
1, 259. 60
251. 92 629. SO
6 to 6H years
...(6/1/67)
31. 49 62. OS 12,5.
1, 285. 20
257. 04 642. 60
32. 13 64. 26 128.
6H to 7 years
(12/1/67)
1,312. 00
262. 40 656. 00
32. 80 65. 60 131.
7 to 7H years
(6/1/6S)
1, 340. 00
268. 00 670. 00
33. 50 67. 00 134,
7H to S years
(12/1/68)
1, 369. 20
273. 84 6S4. 60
6S. 46
34. 23
S to SH vears
(6/1/69)
136.
1, 399. 60
279. 92 099. SO
69. 98
34. 99
SH to 9 years....
(12/1/69)
139.
,431. 60
2S6. 32 715. SO
9 to 9H years
(6/1/70)
35. 79 71. .58 143.
292. 96 732. 40 1, 464 SO
30. 62 73. 24 146.
9H to 10 vears
(12/1/70)
EXTENDED MATURITY VALUE
(10 years from original mar
turity date)^
(6/1/71)
1,504.00
0. 00
3. 56
3.53
3. 55
3. 56
3. 57
3. 58
3. 59
3. 61
3. 62
.3. 63
3. 65
. 3. 68
3. 71
3. 74
3.78
3. 81
3. 85
3. 89
3.93
Percent
2 3. 75
2 3. 76
2 3. 77
2 3. 78
2 3. SO
2 3. 81
2 3. 82
2 3. S3
2 3. 84
3 4 26
3 4 31
3 4 36
3 4. 40
3 4. 45
4. 60
4. 67
4. 75
4 85
4. 99
5. 35
.•hicli issues of J
1, 1951, enter each period. For subse(iucnt issue monlhs add tlie ai)propriatc number of months,
ell half-vcar per
icriod lo extended maturity at exiended malurity value prior to thc December 1, 1965, revision,
ch half-year-p.Ti
icriod lo exiended malurity at extended malurity value prior to the June 1, 1968, revision,
,'ears from issui
iriiy viiluc iniproved by the revision of June 1. 1908.
ikl on purchase price from issue d; to exiended maturity date is 3.51 percent.
' Month, (
TABLE 25
BONDS BEARING ISSUE DATES FROM DECEMBER 1, 1951, THROUGH APRIL 1, 1952
Issueprice
Denomination
$18. 75
25. 00
$37. 50
50.00
$75.00 '$150.00 '$375.00
100. 00 I 200. 00 I 500. 00
$750. 00
1, 000. 00
Period after original maturity (beginning
JO years after issue date)
E-XTENDED MATURITY PERIOD
First H year
'(12/1/61) $25. 37 $50. 74 $101. 48 $202. 96 $567. 40 $1, 014 80
51.64 103. 28 • 206. 56 516. 40 1, 032. SO
25.82
H to 1 year
-(6/1/62)
52. 54 105. 08 210. 16 525. 40 1, 050. 80
26.27
1 to IH years
.(12/1/62)
26. 74 53.48 106. 96 213. 92 534 80 1, 069. 60
I H t o 2 years
(6/1/63)
27. 22 54 44 108. 88 217. 76 544 40 1, 088. 80
2 to 2H years
_
(12/1/63)
55.44 110.88 221. 76 554 40 1, 108. 80
27.72
2H to 3 years
(6/1/64)
56.44 112.88 225. 76 564 40 1, 128. SO
28. 22
3 to 3H years...
(12/1/64)
28. 74 57.48 114 96 229. 92 574 80 1, 149. 60
3Hto4year.s
(6/1/65)
234 16 585. 40 1, 170. SO
58. 54 117.08
29.27
4 to 4H years—
(12/1/65)
29. 82
59. 64 119.28 238. 56 596. 40 1, 192. 80
4H to 5 years....
(6/1/66)
30.39
60.78 121. 56 243. 12 607. 80 1, 215. 60
5 to 5H years
(12/1/66)
30.99
61.98 123. 96 247. 92 619. SO 1, 239. 60
5H to 6 years
(6/1/67)
31.60
63. 20 126. 40 252. SO 632. 00 1, 264 00
6 to 6H years
(12/1/67)
32. 26
64 52 129. 04 258. 08 645. 20 1, 290. 40
6H to 7 years
(6/1/68)
32. 94
65.88 131. 76 263. 52 658. 80 1, 317. 60
7 to 7H years
(12/1/68)
67.28 134 56 269. 12 672. 80 1, 345. 60
33. 64
7H to 8 years
-(6/1/69)
68. 76 137. 52 275. 04 687. 60 1, 375. 20
34 38
S t o S H years
..(12/1/69)
35. 16 70.32 140. 64 281. 28 703. 20 1, 406. 40
SH to 9 years
(6/1/70)
71. 92 143. 84 287. 68 719. 20 1, 438. 40
35.96
9 to 9H years
(12/1/70)
73.60 147. 20 294 40 736. 00 1, 472. 00
36.80
•9H to 10 years
(6/1/71)
EXTENDED MATURITY VALUE
(10 years from original
maturity date)<
(12/1/71)
1, 512. 00
(2) On the re- (3) On current
demption ] redemption
value at start I value from
|of the extended beginning of
maturity pe each half-year
riod to the beperiod to
ginning of each
extended
half-year pematurity
riod thereafter
Percent
0.00
3.55
3.52
3.54
3. 55
3. 58
3.58
3.60
3.61
3.62
3.64
3.67
3.69
3.73
3.77
3.80
. 3.84
3.88
3.91
3.95
Percent
23.75
23.76
2 3.78
23. 79
23. 80
23. 81
23.82
2 3.84
3425
3429
34.34
3439
34.44
4.58
4 64
4.72
4.80
4.89
5.05
5.43
I'Monlh, day, and year on which issues of December 1, 1951, enter each period. For subsequent issue months add thc appropriate number of months.
2 Yield from beginning of eacli half-year period lo extended maturity al exiended maturity value prior to tho December 1, 1965, revision.
=> Yield from beginning ofcach lialf-ycar period lo extended maturity at extended niaturity value prior to thc Juue 1,1968, revision,
* 20 years from issue dale. Extended niaturity value improved by the revision of June 1,1968.
' Yield on purchase price from issue date to extended maturity dale is 3.54 percent.
175
EXHIBITS
TABLE 26
BONDS BEARING ISSUE DATE OF MAY I, 1952
I s s u e price
Denomination
__
$18. 75 $37. 50
25.00
50.00
$75. 00 $ 1 5 0 . 0 0 $375. 00
100. 00 200. 00 500. 00
$750. 00
1, 000. 00
$7, 500
10, 000
(2) On the
redemption
valuo at start
of tho extended
maturity
period lo the
beginning of
each half-year
period
thereafter
(1) Redemption values during each half-year period
(values increase on first day of period shown)
Period after original m aturity fbcginning 9 years 8 months after issue
EXTENDED MATURITY PERIOD
-'(1/1/62)
First H year
Hto lyear..
-(7/1/62)
-(1/1/63)
1 to I H years
I H to 2 years
-(7/1/63)
-(1/1/64)
2 t o 2H y e a r s
2H to 3 years
-(7/1/64)
3 to 3H years
-(1/1/65)
-(7/1/65)
3 H to 4 y e a r s
-(1/1/66)
4 to 4 H y e a r s
-(7/1/66)
4H to 5 years
-(1/1/67)
5 t o 5H y e a r s
5H t o O y e a r s
-(7/1/67)
-(1/1/68)
6 to 6H years
-(7/1/68)
6 H to 7 y e a r s
-(1/1/69)
7 to 7H years
7 H to 8 years
-(7/1/69)
-(1/1/70)
S to SH y e a r s
-(7/1/70)
8 H to 9 y e a r s
9 to 9H y e a r s
-(1/1/71)
9 H t o 10 y e a r s
-(7/1/71)
EXTENDED
M A T U R I T Y VALUE
( 1 0 y e a r s from original
maturity
date)*
.(1/1/72)
yi .Id
$25. 27 $50. 5 4 $101. 08 $202. 16 $505. 40 $ 1 , 010. 80 $10, 108
25.71
10, 284
102. 8 4 205. 68 5 1 4 20
51.42
1, 028. 40
1, 046. SO
523. 40
26. 17 52. 34
10, 468
1 0 4 68 209. 36
1, 065. 60 10, 656
106. 56 213. 12 532. 80
26.64
53.28
27. 12 5 4 24
10, 848
1, 0 8 4 80
216. 96 542. 40
108. 48
1, 1 0 4 40
55.22
11,044
110. 44 220. 88 552. 20
27.61
11,244
1, 1 2 4 40
112. 44 2 2 4 88 502. 20
28. 11 5 6 . 2 2
572. 40
28.62
11,448
1, 1 4 4 SO
57. 24
1 1 4 48 228. 96
11,660
1, 166. 00
116.60
58.30
29.15
583. 00
233. 20
11,880
237. 60 5 9 4 00
59. 40
29.70
1, 188. 00
118.80
12, 108
30.27
1, 210. 80
242. 16 60.5. 40
121. 08
60.54
1, 2 3 4 SO 12, 348
30.87
123. 48 246. 96 617. 40
61.74
12, 592
1, 259. 20
125. 92 251. 8 4 629. 60
62.96
31.48
1, 285. 20 12, 852
32. 13 6 4 26
128. 52 257. 04 642. 60
13, 124
1,312.40
656. 20
262. 48
131.24
65. 62
32.81
67.02
13, 404
1, 340. 40
33.51
1 3 4 0 4 268. 08 670. 20
1, 370. 00 13, 700
2 7 4 00 685. 00
137. 00
3 4 25 6 8 . 5 0
35.02
1, 400. SO 14, 008
70. 0 4 140. 0 8 280. 16 700. 40
1, 432. SO 14, 32S
35.82
286. 56 716. 40
143. 28
71.64
1, 466. 00 14, 660
73.30
36.65
146. 60 293. 20 733. 00
Percent
0.00
3.48
3.53
3.55
3.56
3.57
3. .58
3.59
3.60
3.62
3.64
3.67
3.70
3.73
3.77
3.80
3.84
3.88
3.91
3.95
15, 060
8 4. 03
37.65
150. 60
75.30
301.20
7 5 3 . 00
1, 506. 00
(3) On current
redemption
value from
beginning of
each halfyear period
to extended
maturity
Percent
23.75
2 3.76
23.77
23.79
2 3. 80
2 3 . 81
23.82
2 3.84
3 4 25
3430
3434
3 4 38
34.44
4.58
4.64
4 71
4.79
4 89
5.05
5.46
« Month, day, and year on which issues of May 1, 1952, enter each period.
s Yield from beginning ofcach half-year period to extended maturity at extended maturity value prior to thc December 1,1965, revision.
' Yield from beginning ofcach half-year period to extended maturity at extended maturity value prior to thc June 1,1968, revisioa,
* 19 years and 8 months from issue date. Exiended maturity value improved by the revision of June 1,1968.
• Yield on purchase price from issue date to extended maturity date is 3.58 percent.
TABLE 27
BONDS BEAHTNG ISStJE DATES FROM JUNE 1 THROUGH SEPTEMBER 1, 1952
Denomination
$18. 75 $37. 50
25.00
50.00
$ 7 5 . 00 $150. 00 $375. 0 0
1 0 0 . 00 2 0 0 . 00 5 0 0 . 00
$750.00
1, 0 0 0 . 00
$7, 500
10, 000
(1) Redemption values durin g aach half-y ear period
values increa se on first da y of periods tiown)
Period after origina' maturity (beginning 9 years 8 montlis after issue
date)
(
EXTEND 3D MATU UTY PEB COD
_ . . t (2/1/62) $25. 33 $50. 66 $ 1 0 1 . 3 2 $202. 6 4 $506. 60 $ 1 , 0 1 3 . 2 0 $ 1 0 , 1 3 2
First H y e a r
— (8/1/62)
J^ t o 1 y e a r
1, 031. 20 10, 312
25.78
51.56
103. 12 206. 2 4 515. 60
10, 492
1,049.20
26.23
1 t o I H y e a r s . . - — (2/1/63)
52. 46
1 0 4 92 209. 84 5 2 4 60
IH to 2 y e a r s . - . -..(8/1/63)
26.70
5 3 4 00
53.40
1, 068. 00 10, 680
106. 80 213. 60
2 to 2H y e a r s . . . . . . ( 2 / 1 / 6 4 )
1, 087. 20 10, 872
27.18
5 4 36
108. 72 217. 44 543. 60
2Y2 t o 3 y e a r s . . . . . . (8/1/64)
27.67
1, 106. 80
221. 36
11,068
55. 34
110.68
553. 40
3 t o 3H y e a r s . . . . - . ( 2 / 1 / 6 5 )
112.72
1, 127. 20 1 1 , 2 7 2
28. 18 5 6 . 3 6
225. 44 563. 60
3H t o 4 y e a r s . . . — (8/1/65)
28.69
1, 147. 60 1 1 , 4 7 6
229. 52 573. SO
1 1 4 76
57.38
29.22
4 t o 4H y e a r s . . . — (2/1/66)
1, 168. SO 1 1 , 6 8 8
116.88
233. 76 5 8 4 40
58. 44
--(8/1/66)
4H to 5 years
29.77
1, 190. 80
11,908
595. 40
59.54
119. 08 238. 16
12,136
--.(2/1/67)
5 to 5H years
30.34
121. 36 242. 72 606. 80
1, 213. 60
60.68
30.94
1, 237. 60 12, 376
5 H to 6 y e a r s . - . — (8/1/67)
247. 52 618. 80
123. 76
61.88
6 to 6 H y e a r s . . - — (2/1/68)
1, 262. 40 12, 624
31.56
63. 12
126. 24 252. 48 63L 20
32. 20 6 4 40
1, 288. 00 12, 880
6H t o 7 y e a r s . . . — (8/1/68)
257. 60
6 4 4 00
128. 80
657. 80
1, 315. 60 13, 156
7 to 7H y e a r s . . . . . . ( 2 / 1 / 6 9 )
32.89
131.50
263. 12
65.78
33.59
1, 343. 60 13, 436
7 H to 8 y e . a r s . . . - . ( 8 / 1 / 6 9 )
67. 18
1 3 4 36 268. 72 671. 80
S t o SH y e a r s . . . — (2/1/70)
2 7 4 64 686. 60
1, 373. 20 13, 732
3 4 33 6 8 . 6 6
137. 32
1, 4 0 4 00 1 4 040
280. SO 702. 00
SH t o 9 y e a r s . . . — (8/1/70)
35. 10
70.20
140. 40
1, 436. 00 1 4 360
287. 20
35.90
71.80
718. 00
9 to 9 H y e a r s . . . — (2/1/71)
143. 60
9 H t o 10 y e a r s . - - - ( 8 / 1 / 7 1 )
1, 469. 60 14, 696
140. 96 293. 92 7 3 4 80
36.74
73. 48
EXTENDED MATURITY
V A L U E ( 1 0 y e a r s from
original m a t u r i t y
date)<
—(2/1/72)
37.74
301.92
754. 80
1, 509. 60
15, 0 9 6
150.96
75.48
yl Id
(2) Onthe
redemption.
value at start
of the extended
maturity
period to the
beginning of
each half-year
period
thereafter
(3) On current;
rcdemptlba
•value from
beginning ot
each halfyear period
to extended
maturUy
Percent
0.00
3.55
3.52
3.54
3.56
3.57
3.59
3.59
3.60
3.62
3.64
3.67
3.70
3.73
3.77
3.80
.3.84
3.87
3.91
3.95
M.03
' Month, day, and year on which issues of June 1, 19.52, enter each period. For subsequent issue months add the appropriate number of moatbs.
• Yield from beginning ofcach half-year period to extended maturity at extended maturity value prior to the December 1,1965, revisioa.
5 Yield from beginning of each half-year period to extended maturity at extended maturity value prior to the June 1,1968, revision,
* 19 years and 8 monlhs from issue dale. Extended maturity value improved by thc revision of June 1,1968.
A Yield on purchase price from issue date to extended maturity date is 3.59 percent.
Percent
23.Y5
2 3.76
2 3.78
23.79
2 3. 80
2 3.81
23.82
2 3.84
54.25
'4.30
34.34
34.39
34.43
4.59
4-64
4:71
4.79
4.89
5.06
5.44
176
19 68 REPORT OF T H E SECRETARY OF T H E
TREASURY
TABLE 28
B O N D S B E A R I N G I S S U E D A T E S F R O M O C T O B E R 1 T H R O U G H N O V E M B E R 1, 1952
I s s u e price
Denomination..
$18.75
25.00
$37.50
50.00
Period after original malurity (beginning 9 years 8 months after issue
dato)
$75. 00 $ 1 5 0 . 0 0 $ 3 7 5 . 0 0
100. 00
200.00 I 500.00
$750.00
1, 000. 00
$7, 500
10, 000
(2) On the
redemption '(3) On current
value at start ; redemption
|of the extended, value from
beginning ol
malurity
each halfperiod to the
year period
beginning of
each half-year to extended
maturity
period
thereafter
EXTENDED MATURITY PERIOD
Percent
First H year
'(6/1/62)
H to 1 year
(12/1/62)
1 to I H years
(6/l/63)<
I H to 2 years
(12/1/63)'
2 to 2H y e a r s
(6/1/64),
2 H t o Syears
(12/1/64)
3 to 3H years
(6/1/65)
3H to 4 years
(12/1/65)
4 t o 4H y e a r s
(6/1/66)
4 H to 5 y e a r s
(12/1/66)
5 to 5 H y e a r s
(6/1/67)
5H t o 6 y e a r s
(12/1/67)
6 to 6H y e a r s
.(6/1/68)
6 H to 7 y e a r s
(12/1/68)
7 t o 7H y e a r s
(6/1/69)
7H to 8 years
(12/1/69),
S t o S H years
(6/1/70)
SH t o 9 y e a r s
(12/1/70),
O t o 9H y e a r s
(6/1/71)
9 H t o 10 y e a r s
(12/1/71):
EXTENDED MATURITY
V A L U E ( 1 0 y e a r s from
original m a t u r i t y
date)*
(6/1/72)
0.00
3. 55
3. 52
3. 54
3. 56
3.57
3. 59
3.59
3.61
3.63
3.66
3.69
3. 72
3.75
3.79
3.82
3.86
3.90
3.93
3.97
25. 33 $50. 66 $101. 32 $202. 64 $506 60 $ 1 , 0 1 3 . 20 $10,132
10, 312
1, 031. 20
25. 78 51. 56 103. 12 206. 24 515 60
10, 492
26. 23 52. 46 104 92 209. 84 524 60 1, 049. 20
10, 680
26. 70 53. 40 106.80 213. 60 534 00 1 , 0 6 8 . 0 0
10, 872
27 IS 54 36
108 72 217. 44 543 60 1, 087. 20
11,068
27 67 55. 34 110 68 221. 36 553 40 1, 106. 80
11,272
28. 18 56. 36 112 72 22.5. 44 563 60 1, 127. 20
1, 147. 60
11, 476
28.69
57. 38 114 76 229. 52 573 SO
11,692
29. 23 58. 46 116 92 233. 84 584 60 1, 169. 20
1, 19L 20
11,912
29. 78 59. 56 119 12 238. 24 595 GO
12, 144
30.36 60. 72 121. 44 242. 88 607 20 1, 2 1 4 40
30. 97 61. 94 123. SS 247. 76 619 40 1, 238. SO 12, 388
12, 640
31. 60 63. 20 126. 40 252. SO 632 00 1, 2 6 4 00
12, 900
32. 25 64. 50 129. 00 258. 00 645 00 1, 290. 00
1,317.60
13, 176
32.94 65.88
131. 76 263. 52 658 SO
13, 460
33. 65 67. 30 134 60 269. 20 073 00 1, 346. 00
1,
375.
60
137. 56 275. 12 687 SO
1.3,756
3 4 39 68.78
14, 064
140. 64 2S1. 28 703 20 1, 406. 40
35. 16 70.32
14 388
35. 97 71.94 143. 88 287. 76 719 40 1, 438. 80
1,
472.
40
73.62 147. 24 294 48 736 20
14, 724
36.81
37.83
75.66
151.32
302. 64
756. 60
1,513.20
Percent
2 3. 75
2 3.76
2 3.78
2 3. 79
2 3.80
2 3.81
2 3.82
3 4. 24
3 4.28
3 4 32
3 4 37
3 4 41
4 55
4 61
4 67
4 74
4 82
4 94
5. 11
5. 54
15,132
* Month, day, and year on which issues of Octobcr l. 1952, enter each period. For subsequent issue months add tho appropriate number of months.
- Y'icld from beginning ofcach half-year period to extended maturity at extended maturity value prior to the Decembor 1, 1965, revision.
3 Y'ield from beginning ofcach half-year period lo exiended maturity at extended maturity valuo prior to llie June 1, 1968, revision.
* 19 years and 8 months from issue date. Extended malurity value iinproved by the revision of June 1, 1968.
« Yield on purchase price from issue date to extended maturity date is 3.60 percent.
TABLE 29
B O N D S B E A R I N G I S S U E D A T E S F R O M D E C E M B E R 1, 1952, T H R O U G H
I s s u e price
Denomination.
period after original maturity (beginning 9 years 8 montlis after issue
date)
$18.75
25.00
$37. 50
50.00
$75. 00 $150. 00 $37.5.00
100. 00
200. 00
500. 00
$750. 00
1, 000. 00
MARCH
$7, 500
10, 000
EXTENDED MATURITY PERIOD
First H year
'(S/1/62) $25. 39 $50. 78 $101. 56 $203. 12 $507 80 !$1, 015. 60 SIO, 156
y^to l y e a r
(2/1/03)
10, 336
25. 84 51. 68 103. 36 206. 72 516 SO
1, 033. 60
10, 516
I t o IH years
(8/1/63)
26.29 52. 58 105. 16 210. 32 525 80 1, 051. 60
10, 704
I H to 2 years
(2/1/64)
107. 04 214 08
26. 76 53.52
535 20 1, 070. 40
2 t o 2H y e a r s
(8/1/64)
27.24 54 48 108. 96 217. 92 544 80 1, 089. 60
10, 896
1, 109. 60
27.74 55.48 110. 96 221. 92 554 80
2 H t o 3 years
(2/1/65)
11, 096
S t o 3H y e a r s
(8/1/65)
28. 24 56. 48 112. 96 225. 92 564. 80 1, 129. 60
11,296
3H to 4 years
(2/1/66)
28.76 57.52
11,504
115. 04 23C. OS 575 20 1, 150. 40
1, 172. 00
4 t o 4H y e a r s
(8/1/66)
29. 30 58.60
117.20 234. 40 586 00
11, 720
4Y, t o 5 y e a r s
(2/1/67)
11,940
29. 85 59.70
119. 40 238. 80 597 00 1, 1 9 4 00
5 t o 5H y e a r s
(8/1/67)
12, 172
30.43 60. 86 121. 72 243. 44 608 60 1, 217. 20
12, 416
S H t o 6 years
(2/1/68)
31. 04 62. 08 124 16 248 32 62C. 80 1, 241. 60
12, 668
6 t o 6H y e a r s
(8/1/68)
31. 67 63. 34 126 68 253. 36 633 40 1, 266. 80
1,
293.
20
32. 33 64 66 129. 32 258. 64 646 60
12, 932
6 H t o 7 years
(2/1/69)
33.02 66. 04 132. 08 264 16 660 40 1, 320. 80
7 t o 7H y e a r s
(S/1/69)
13, 208
134. 92 269. 84 674 60 1, 349. 20
7H to 8 y e a r s .
(2/1/70)
33.73 67.46
13, 492
3 4 47 68. 94 137. 88 275. 76 689 40 1, 378. 80
8 t o SH y e a r s
(8/1/70)
13, 788
S H t o 9 years
(2/1/71)
35. 24 70.48
140. 96 28L 92 704 80 1, 409. 60 • 14, 096
36.06 72. 12 144 24 288. 48 721 20 1, 442. 40
14, 424
9 t o 9H y e a r s
(8/1/71)
1,
476.
00
14, 760
9 H t o i d years
(2/1/72)
36.90 73. 80 147. 60 295. 20 738 00
EXTENDED MATURITY
V A L U E (10 y e a r s from
original m a t u r i t y
date)<
( 8 / 1 / 7 2 ) 37. 91 75.82 151.64 303. 28 758.20
1,516.40
15,164
(2) On the
redemption (3) On current
value at start redemption
[of the extended I value from
beginning of
malurity
each halfperiod lo the
year period
beginning of
3ach half-year to extended
maturity
period
thereafter
Percent
0. 00
3. 54
3. 51
3.53
3.55
3. 57
3.
3.
3. 61
3. 63
3. 65
3. 69
3. 72
3. 75
3.79
.3. 82
3.86
3. 89
3.94
3.97
Percent
2 3.
2 3.
2 3.
2 3.
2 3.
2 3.
2 3.
3 4 23
3 4 27
3 4. 32
3 4. 36
3 4 40
4 55
4. 60
4. 66
4. 73
4 81
4 93
5. 07
. 5. 4:7
> Month, day, and year on which issues of December 1,.1952, enter each period. For subseciuent issue months add tho appropriate number of months.
2 Yield from beginning of each half-year period lo extended maturity at extended maturity value prior to the December 1,1965, revision.
3 Yield from beginning of each half-year period to extended maturity at extended maturity value prior to thc June 1,1968, revision.
•» 19 years and 8 months from issue dale. Extended malurity value improved by thc revision of June 1,1968.
* Yield on puiebase price Irom issue date lo extended maturity dale is 3.61 percent.
75
76
77
79
80
81
82
177
EXHIBITS
TABLE 30
BONDS BEARING ISSUE DATES FROM APRIL 1 THROUGH MAY 1, 1953
$18.75 $37. 50
25. 00 50.00
Issue price
Denomination..
Period after original maturity (beginning 9 years 8 months after issue
date)
$75. 00 $150.00 .$37.5.00
100. 00 200. 00 500.00
$750. 00
1, 000. 00
$7, 500
10,000
(2) On thc
redemption (3) On current
(•alue al start redemplion
ofthe extended value from
beginning of
malurity
each halfperiod to the
year period
beginning of
each halt-year to extended
period
maturity
Ihereafler
EXTENDED MATURITY' PERIOD
First Hyear
• (12/1/62) $25. 39 $50. 78 $101.56 $203. 12
25. 84 51.68 103. 36 206. 72
H to 1 year
(6/1/63)
1 to IH years
(12/1/63) 26.29 52. 58 10.5. 10 210. 32
26.76 53. 52 107. 04 214 08
IH to 2 years
(6/1/64)
27. 24 5 4 48
108. 96 217. 92
2 to 2H years
(12/1/64)
27.74 55. 48 110. 96 221. 92
2H to 3 years
(6/1/65)
28. 24 56. 48 112. 96 225. 92
3 to 3H years
(12/1/65)
28.77 57. 54 11.5. OS 230. 16
3H to 4 years
(6/1/66)
29. 31 58. 62 117. 24 234. 48
4 to 4H years- —.-(12/1/66)
4H to 5 years
(6/1/67)
29. 87 59.74 119.48 238. 96
121. 84 243. 68
30. 46 60.92
5 to 5H years
(12/1/67)
31. 07 62. 14 124 28 248. 56
!jy to 6 years
(6/1/68)
31. 71 63. 42 126. 84 253. 68
6 to 6H years
(12/1/68)
129. 52 259. 04
32.38 6 4 76
6H to 7 years
(6/1/69)
33. 07 66. 14 132. 2S 264 56
7 to 7H years
(12/1/69)
33. 79 67. 58 135. 16 270. 32
7H to 8 vears
(6/1/70)
34 54 69.08 138. 16 276. 32
8 to SH years
(12/1/70)
70. 62 141. 24 282. 48
35.31
SH to 9 years
(6/1/71)
36. 13 72. 26 144 52 289. 04
9 to 9H years
(12/1/71)
36. 97 73. 94 147. 88 295. 76
9^^ to 10 years
(6/1/72)
EXTENDED iM AT URITY
VALUE (10 years from
original maturity
date)*
.(12/1/72) 38.01 76.02
$507. SO $1,015.60 $10, 156
516. 80 1, 033. 60 10, 336
525. 80 1, 051. 60 10, 516
535. 20 1, 070. 40 10, 704
544 80
1, 089. 60 10, 896
554 80 1, 109. 60 11,096
564 SO
1, 129. 60 11, 296
575. 40 1, 150. SO 11, 508
586. 20 1, 172. 40 11,724
597. 40 1, 194 SO 11,948
609. 20 1, 218. 40 12, 184
621.40
1, 242. 80 12,428
634 20
1, 268. 40 12, 684
647. 60 1, 295. 20 12, 952
661. 40 1, 322. SO 13, 228
67.5. SO 1,351. 60 13, 516
690. SO 1, .381.60 13,816
706. 20 1,412. 4,0 14 124
722. 60 1, 44.5. 20 U , 452
739. 40 1, 478. 80 14, 788
1,520.40
Percent
0.00
3. 54
3.51
3. 53
3. 55
3. 57
3. 58
3. 60
3. 62
3. 64
3. 67
3.70
3. 74
3.78
3.81
3. 85
3.88
3. 92
3.96
3.99
Percent
2 3. 75
2 3. 76
23.77
23.79
2 3. SO
2.3. SL
3 4 22
3 4; 26
3 4 30
3 4. 35
3 4. 39
4 53
4 58
4 63
4 70
4 70
4 84
4.97
.5. 14
5. 63
15, 204
' Month, day, and year on which issues of April 1, 1953, enter each period. For subseriuent issue months add thc appropriate number of months.
- Yield from beginning of eacli half-year period lo extended maturity at extended maturity value prior to the December 1, 1965, revision.
3 Yield from beginning of eacli half-year period to extended maturity at extended malurity value prior to the June 1,1968, revision.
* 19 years and 8 monlhs from issue date. Exiended malurity value improved by the revision of June 1, 1968.
' Yield on purchase price from issue dale to extended malurity dale is 3.63 percent.
TABLE 31
BONDS BEARING ISSUE DATES FROM JUNE 1 THROUGH SEPTEMBER 1. 1953
Issue price
Denomination.
$18.75 $37. 50
50.00
25.00
Period after original maturity (heginning 9 years 8 monlhs after issue
date)
$75.00 $150.00
100. 00 200.00
$375. 00
500. 00
$750. 00
1, 000. 00
$7, 500
10, 000
(1) Redemption values during each half-year period
(values increase on first day of period shown)
EXTENDED MATURITY PEHIOD
First H year
..'(2/1/63) $2.5. 45 $50. 90
H to 1 year
(S/1/63)
25.90 51.80
1 to V/> years
(2/1/64)
26.36 52. 72
IH to 2 years
(8/1/64)
26.83
53. 66
2 to 2H years
(2/1/6.5)
27. 31 5 4 62
2 H t o 3 years
(8/1/65)
27.80 5.5. 60
3 to 3H years
(2/1/66)
28. 31 56.62
3H to 4 years
(8/1/66)
2S. 84 57.68
4 to 4Hye.ars
(2/1/67)
29. 38 58. 76
4H to 5 years
(S/1/67)
29.94 59. 88
5 to 5H years
(2/1/68)
30.53 61. 06
5H to 6 years
(8/1/68)
31. 15 62. 30
6 to 6H years
(2/1/69)
31.78 63. 56
6H to 7 years
(S/1/69)
32. 46 6 4 92
7 to 7H years
(2/1/70)
33. 14 66. 28
7H to 8 vears
(8/1/70)
33. 87 67. 74
3 4 62 69.24
8 to SH years
(2/1/71)
SH to Oyears
(8/1/71)
35. 40 70.80
9 to 9H years
(2/1/72)
30. 21 72. 42
9H to 10 years
(S/1/72)
37.05 74.10
EXTENDED MATURITY
VALUE (10 years from
original maturity
date)'
(2/1/73)
38.10 76.20
$101. so
103. 60
10.5. 44
107.32
109. 24
111. 20
113.24
115. 36
117. 52
119. 76
122 12
124 60
127. 12
129. 84
132. 56
13.5. 48
13S. 48
141. 60
144 84
148. 20
$203. 60
207. 20
210. 88
214 64
218. 48
222. 40
226. 4,8
230. 72
235. 04
239. 52
244 24
249. 20
254 24
259. 68
265. 12
270. 96
276. 96
283. 20
289. 68
296. 40
$509. 00 $1, 018. 00 $10,180
518. 00 1, 036. 00 10, 360
527. 20 1, 054 40 10,544
.536. 60 1, 073. 20 10, 732
546. 20 1, 092. 40 10, 924
556. 00 1, 112.00 11,120
.566. 20 1, 132. 40 11,324
.576. 80 1, 1.53. 60 11,536
587. 60 1, 175. 20 11,752
598. 80 1, 197. 60 11,976
610. 60 1, 221. 20 12, 212
623. 00 1, 246. 00 12, 460
635. 60 1,271. 20 12,712
649. 20 1, 298. 40 12, 984
662. SO 1, 32,5. 60 13, 256
677. 40 1, 354 SO 13, 548
692. 40 1, 384 80 13, 848
708. 00 1, 416. 00 14, 160
724 20 1, 448. 40 14, 484
741. 00 1, 482. 00 14, 820
(2) On tho
redemption (3) On current
value at start redemplion
of the extended value from
beginning of
maturity
each lialfperiod lo the
ycar period
beginning of
each half-year lo extended
malurity
period
thereafter
Percent
0.00
3.54
,3.54
3. 55
3. i
3.56
3. 58
3.60
3.62
3.64
3.67
3.71
3.74
3.78
.3.81
S.i
3. i
3.92
3.C
3.99
Percent
2 3. 75
23.76
2 .3. 77
2 3. 78
23. SO
23. 81
3 4 22
3 4 26
3 4 30
3 4 35
3 4 39
4.53
4.59
4.63
4 70
4 76
4.85
4.96
5. 15
5.67
1,524.00
1 Month, day, and year on which Lssiics of June 1, 1953, enter each period. For subsequent issue months add thc appropriate nuniber of months.
= Yield from beginning of each half-year period to extended maturity at extended maturity value prior to the December 1, 1965, revision.
3 Yield from beginning of each half-year period lo extended maturity at extended malurity value prior to the June 1, 1968, revision.
* 19 years and 8 monlhs from issue date. Extended maturity value improved by the revision of June 1, 1968.
* Yield on purchase price from issue date to extended maturity date is 3.64 percent.
178
19 68 REPORT OF T H E
SECRETARY OF T H E
TREASURY
TABLE 32
BONDS BEARING ISSUE DATES FROM OCTOBER 1 THROUGH NOVEMBER 1, 1953
Issue price
Denomination
_
$18.75
25.00
$37. 50
50.00
$75. 00 $ 1 5 0 . 0 0 $ 3 7 5 . 0 0
100.00
200. 00 500. 00
$750.00
1, 0 0 0 . 0 0
$7, 500
10,000
(2) On the
redemption (3) On cunent
value at start redemption
oftheextended value from
beginning of
maturity
period to tho
each halfbeginning of year period
each half-year lo extended
maturity
period
thereafter
(1) Redemption values during each half-year period
(values increase on first day of period shown)
Period after original maturity (beginning 9 years 8 jmonllis after Issue
date)
First Hyear
Mto l y e a r
EXTENDED MATURITY PERIOD
10, 544
ID, 732
10, 924
1 ., 120
1 , 328
1 ,540
i : , 760
1 ,984
12, 224
12, 476
12, 732
13, 004
13, 276
13, 572
i;,872
1^:, 188
14,512
1^:,852
Percent
0. 00
3.54
3.54
3.55
3.56
3.56
3.59
3.61
3.64
3.66
3.69
3.73
3.76
3.80
3.83
3.87
3.91
3.94
3.98
4.02
15,276
M.IO
'(6/1/63) $25. 45 $50. 9 0 $101. 80 $203. 60 $509. 00 $ 1 , 0 1 8 . 0 0 $10, 180
(12/1/63) 2 5 . 9 0 5 1 . 8 0 1(13.60 207. 20 5; 8. 00 1, o:i6.00 10, 360
26.36
1 to IH years
(6/1/64)
I H to 2 years
(12/1/64)
26.83
2 t o 2H y e a r s
(6/1/65)
27.31
2H to 3 years
(12/1/65)
27.80
28.32
3 to 3H y e a r s
-(6/1/66)
3H to 4 years
(12/1/66)
28.85
4 to 4H years
(6/1/67)
29.40
4H to 5 years
(12/1/67) , 2 9 . 9 6
30.56
5 to 5H years
(6/1/68)
31.19
5H t o 6 y e a r s
(12/1/68)
31.83
6 t o 6H y e a r s
(6/1/69)
32.51
6H to 7 years
(12/1/69)
33. 19
7 t o 7H y e a r s
(6/1/70)
33.93
7H to 8 years
(12/1/70)
3 4 68
S t o S H years
(6/1/71)
c>5. 47
S H t o 9 years
(12/1/71)
c;6. 28
9 to 9H years
(6/1/72)
o7. 13
9 H t o 10 y e a r s
(12/1/72)
EXTENDED MATURITY
V A L U E (10 y e a r s : r o m
original m a t u r i t y
date)^-.(6/1/73) 38.19
52.72
53.66
5 4 62
55.60
56. 64
57.70
58.80
59.92
61. 12
62.38
63.66
65.02
66.38
67.86
69. 36
70.94
72.56
7 4 26
105. 44
107. 32
109. 24
1 1 . 20
1 3.28
1 5.40
1 7. 60
1 9 . 84
122. 24
1 2 4 76
127. 32
130. 04
132. 76
lcl5. 72
138. 72
1^ 1. 88
145. 12
1' 8. 52
210.
214
218.
222.
226.
230.
235.
239.
244
249.
254
260.
265.
271.
277.
283.
290.
297.
76.38
152. 76
305. 52
88
64
48
40
56
80
20
68
48
52
64
08
52
44
44
76
24
04
527.
536.
546.
556.
566.
577.
588.
599.
6 .1.
623.
636.
650.
61)3.
678.
6( 3.
7i i9.
725.
7^:2.
20
60
20
00
40
00
00
20
20
80
60
20
80
60
60
40
60
60
763. 80
1,
1,
1,
1,
1,
1,
1,
1,
1,
1,
1,
1,
1,
1,
1,
1,
1,
1,
054
073.
092.
1 2.
132.
154
176.
198.
222.
247.
273.
300.
327.
357.
387.
4 8.
451.
485.
yi« id
40
20
40
00
SO
00
00
40
40
60
20
40
60
20
20
80
20
20
1, 527. 6 0
Percent
23.75
2 3.76
23.77
« 3 . 78
2 3.80
3 4 21
34.24
34.28
3 4 32
3437
4.51
4 55
4 61
4.65
4. 73
4 79
4 88
4.99
5.20
5.71
• Month, day, and year on which Issues of October 1,1953, enter each period. For subsequent issue months add the appropriate number of months.
= Yield from beginning ofcach half-year period to extended malurity at extended maturity value prior to thc December 1,1965, revision.
3 Yield from beginning of each half-year period to extended maturity at extended maturity value prior to thc June 1,1968, revision.
* 19 years and 8 nionths from issue date. Extended maturity value improved by the revision of June 1,1968.
^ Y'ield on purchase price from issue date to extended maturity date is 3.65 percent.
TABLE 33
BONDS BEARING ISSUE DATES FROM DECEMBER 1, 1953, THROUGH MARCH 1, 1954
Issue price.
Denomination
$ 1 8 . 7 5 $37. 50
; 25. 00 5 0 . 0 0
$75. 00 $ 1 5 0 . 0 0 $375. 00
500. 00
100. 00
200. 00
$750. 00
1, 000. 00
$7, 500
10, 000
(1) Redemption values during each half-year period
(values increase on first day of period shown)
Period after original maturity (beginning 9 years 8 months after issue
date)
EXTENDED MATURITY PERIOD
First H y e a r
'(S/1/63) $2.5. 52 $51. 04 $102. 08 $ 2 0 4 16 $510. 40 $1, 020. SO $ 1 0 , 2 0 s
Hto lyear
(2/1/64)
103. 88 207. 76 519. 40
2.5. 97 5 1 . 9 4
1, 038. SO 10, 388
105. 72
I t o IH years
(S/1/64)
26. 43 52. 86
1,057.20
211. 44 528. 60
10, 572
107. 60 21.5. 20 538. 00
1,076.00
26. 90 53. SO
10, 760
I H t o 2 years
(2/1/65)
109. 52 219. 04 547. 60
1, 09.5. 20
27. 38 5 4 76
2 t o 2H y e a r s
(8/1/65)
10, 952
111. 52
557. 60
1, 115. 20
223. 04
2H to 3 y e a r s
(2/1/66) ; 27. SS 55. 76
11, 152
113.60
568. 00
1, 136. 00
227. 20
3 to 3H vears
(S/1/66)
28. 40
11,360
56. SO
11.5.72
1, 157. 20
231. 44 578. 60
3H t o 4 y e a r s
(2/1/67)
11.572
28. 93 57. 86
117.92
1, 179. 20
235. 84 589. 60
4 t o 4H y e a r s
(8/1/67)
11,792
29. 48 5 8 . 9 6
120. 20
601. 00
1, 202. 00
240. 40
30. 05
60. 10
4H t o 5 y e a r s
(2/1/6S)
12, 020
122. 60
613. 00
1, 226. 00
24.5. 20
5 t o 5H y e a r s
(8/1/68)
30. 65 6 1 . 3 0
12, 260
125. 08 250. 16 625. 40
1, 250. 80 12, 508
62. 54
5H to 6 y e a r s
(2/1/69)
31.27
127.
68
638.
40
1,
276.
SO
25.5.
36
6 to 6H y e a r s
(8/1/69)
31. 92
63. 84
12, 768
130. 40 260. 80
652. 00
1, 3 0 4 00 13, 040
6H t o 7 y e a r s
(2/1/70)
32.60
65. 20
133. 20
666. 00
1, 332. 00
266. 40
7 to 7H y e a r s
(8/1/70) : 33. 30 66. 60
13, 320
136. OS 272. 16 680. 40
1, 360. SO 13, 608
7H to S y e a r s
(2/1/71)
3 4 02 68. 04
139. 08 278. 16 695. 40
1, 390. 80
8 to SH y e a r s
(8/1/71)
3 4 77
69. 54
13, 908
142. 24 2 8 4 48 711. 20
1, 422. 40
SH to 9 y e a r s
(2/1/72)
35. 56 71. 12
14, 224
145. 52 2 9 1 . 0 4
727. 60
1, 455. 20 14, 552
9 t o 9H y e a r s
(8/1/72)
36. 38 72. 76
148. 92 297. 84 7 4 4 60
1, 489. 20
9 H t o 10 y e a r s
(2/1/73) : 37. 23 7 4 46
14, 892
EXTENDED MATURITY
V A L U E (10 y e a r s
from original m a t u r i t y
date)*
-(8/1/73)
38. 30 7 6 . 6 0
153. 20
1, 532. 00
306. 40 7 6 6 . 00
15, 320
Approximate investment
yield
(2) On the
redemption (3) On current
value at start
oftheextended value from
beginning of
maturity
each halfperiod to the
beginning of
year period
each half-year to extended
maturity
period
thereafter
Percent
0.00
3.53
3. 53
3.54
3. .55
3.57
3.60
3.62
3.64
3. 66
3. 70
3. 73
3.76
3.80
3.84
3.87
3.90
3.94
3.98
4 02
Percent
2 3. 75
2 3.76
23.77
23.79
2 3 . SO
3 4 21
3 4 25
3 4 29
3433
3 4 37
4. 51
4 56
4 61
4 66
4 72
4 80
4.89
5.01
5.21
5.75
M.IO
• Month, day, and year on which issues of December l, 1953, enter each period. For subsequent Issue months add the appropriate number ot inonths.
s Yield trom beginning of each half-year period lo extended maturity at extended maturity value prior to tho December 1, 1965, revision.
a Yield from beginning of each half-year period lo extended maturity at extended maturity value prior to the June 1,1963, revision,
• 19 years and 8 months from issue date. Extended maturity value improved by the revisioa of June 1,1968.
« Y'ield on purchase price from issue date to extended maturity date Is 3.06 percent. "°
179
EXHIBITS
TABLE 34
BONDS BEARING ISSUE DATES FROM APRIL 1 THROUGH MAY 1
I s s u e price .
Denomination
$18.75
25.00
$37. 50
50.00
$7.5. 00 $150. 00 $375. 00
100. 00
200. 00
500. 00
$750. 00
1,000.00
$7, 500
10, 000
(2) On tho
redemption (3) On current
value at start
oftheextended value from
beginning of
maturity
each halfperiod to the
beginning of
year period
each half-year to extended
maturity
period
thereafter
(1) Redemption values during each half-year period
(values increase on first day of period shown)
Period after original maturity (beginning 9 years 8 months after issue
date)
Approximate investment
yield
EXTENDED MATURITY PERIOD
Pirsfc H y e a r
' ( 1 2 / 1 / 6 3 ) $25. 52 $51. 04 $102. 08 $ 2 0 4 16 $510. 40 $ 1 , 0 2 0 . 8 0 $10, 208
Hto lyear
...(6/1/64)
10, 388
1, 038. SO
103. 88 207. 76 519. 40
51.94
25.97
10, 572
1, 057. 20
105. 72 211. 44 528. 60
52.86
1 to I H years
(12/1/64)
26.43
10, 760
1, 076. 00
215. 20 538. 00
107. 60
53.80
26.90
I H t o 2 years
(6/1/6.5)
1, 095. 20
219. 04 547. 60
109. 52
27. 38 5 4 76
10, 952
2 to 2H years
(12/1/65)
1, 115. 60
223. 12 557. 80
111.56
55.78
27.89
2H t o 3 y e a r s
(6/1/66)
11, 156
1, 136. 40
113. 64 227. 28 56S. 20
56.82
28.41
11,364
3 t o 3H years
(12/1/66)
1, 157. 60
231. 52
115.76
57.88
578. SO
28.94
11,576
3H t o 4 y e a r s .
(6/1/67)
1, 180. 00
236. 00
118. 00
59.00
590. 00
29.50
11,800
4 to 4H years
(12/1/67)
1, 203. 20 12, 032
30.08
4H t o 5 years
.(6/1/68)
60. 16 120. 32 240. 64 601. 60
1, 227. 60
122. 76 245. 52
613. SO
12, 276
61. 38
5 to 5H years
(12/1/68)
30. 69
1, 252. 40
250. 4S
125. 24
626. 20
12, 524
5 H t o 6 years.
(6/1/69)
31. 3 1 62. 62
1, 278. 40
255. 68 639. 20
127. 84
12, 784
63.92
31.96
6 t o 6H y e a r s
(12/1/69)
1, 306. 00
261. 20
130. 60
653. 00
65.30
13, 060
32.65
6H t o 7 y e a r s
(6/1/70)
1, 3 3 4 00
266. 80
133. 40
667. 00
66.70
13, 340
33.35
7 t o 7H y e a r s
(12/1/70)
1, 363. 20
136. 32 272. 64
681. 60
13, 632
3 4 08 68. 16
7H to 8 years
.(6/1/71)
1, 393. 60 13, 936
139. 36 278. 72
696. 80
3 4 84 6 9 . 6 8
S t o S H years
(12/1/71)
1, 425. 20
285. 04 712. 60
142. 52
35. 63 7 1 . 2 6
H , 252
8H to 9 years
(6/1/72)
1, 458. 00
145. SO 2 9 1 . 60 729. 00
72.90
36.45
U , 580
9 to 9H years
(12/1/72)
1, 492. 00
298. 40
149. 20
746. 00
7 4 60
37.30
14, 920
9H t o 10 y e a r s
(6/1/73)
EXTENDED MATURITY
V A L U E ( 1 0 y e a r s from
original m a t u r i t y
datey
(12/1/73)
1, 535. 60
767. 80
153. 56 3 0 7 . 1 2
76.78
38.39
15,356
Percent
0.00
3.53
3.53
3.54
3.55
3.58
3.61
3.63
3.66
3.69
3.72
3.75
3.79
3.83
3.86
3.89
3.93
3.96
4.00
4.04
Percent
23.75
' 3. 76
23.77
23.79
34.20
3 4 23
3 4 27
3 4 31
3435
4 4S
4 53
4 58
4 64
4 68
4.75
4 82
4.91
5.04
5.25
5.84
5 4.13
' Month, day, and year on which issues of April 1, 1954, enter each period. For subseauent issue months add thc appropriate number of months.
• Yield from beginning ofcach half-year period to extended maturity at extended maturity value prior to the December 1, 1965, revision.
3 Yield from beginning ofcach half-year period to extended maturity at extended maturity value prior to the Juno 1, 1968, revision.
• 19 years and 8 monlhs from issue date. Extended malurity value improved by the revision of June 1,1968.
* Yield on purchase price from issue dato to extended maturity date is 3.68 percent.
TABLE 35
BONDS BEARING ISSUE DATES FROM JUNE 1 THROUGH SEPTEMBER 1, 1954
Issue p r i c e . .
Denomination
$18. 75 $37. 50
25.00 50.00
Period after original maturity (beginning 9 years 8 months after issue
date)
First Hyear
'(2/1/64)
H t o lyear
..(8/1/64)
1 to IH years
(2/1/65)
IH to 2 years
(8/1/65)
2 to 2H years
(2/1/66)
2 H t o 3 years
(8/1/66)
3 to 3H years
(2/1/67)
3H to 4 years
(8/1/67)
4 to 4H years
(2/1/68)
4 H t o 5 years
(8/1/68)
5 to 5H years
(2/1/69)
5H to 6 years
(8/1/69)
6 to 6H years
(2/1/70)
6H to 7 years
(8/1/70)
7 to 7H years
(2/1/71)
7 H t o Syears
(8/1/71)
S t o SH years
(2/1/72)
8H to 9 years
.(8/1/72)
9 to 9H years
(2/1/73)
9 H t o 10 years
(8/1/73)
EXTENDED MATURITY
VALUE (10 years from
original maturity
date)<
(2/1/74)
$75. 00 $150. 00 $375. 00
100.00
200. 00
500. 00
$750. 00
1, 000. 00
$7, 500
10, 000
(2) On tho
redemplion (3) On current
value at start redemption
oftheextended value from
beginning of
maturity
each halfperiod to the
year period
beginning of
each half-year to extended
maturity
period
thereafter
EXTENDED MATURITY PERIOD
$25. 58 $51. 16 $102. 32 $ 2 0 4 64 $511. 60 $1, 023. 20 $10, 232
10, 412
208. 24
520. 60 1, 041. 20
26. 03 52. 06 1 0 4 12
10, 596
1, 059. 60
52. 98
105. 96 2 1 1 . 9 2
529. 80
26.49
10, 784
1, 078. 40
53.92
107. 84 215. 68 539. 20
26.96
1, 098. 00
10, 980
5 4 90
109. 80
219. 60 549. 00
27. 45
1, 118. 00
11, 180
27.95
55.90
111.80
223. 60
559. 00
1, 138. 80
11,388
28.47
56. 94
113. 88 227. 76 569. 40
1, 160. 40
11, 604
580. 20
116. 04 232. 08
29. 01 5 8 . 0 2
1, 182. 80
11,828
59. 14 1 1 8 . 2 8
236. 56 591. 4 0
29. 57
241. 20
12, 060
603. 00 1, 206. 00
120. 60
30. 15 60. 30
1, 230. 40
12, 304
30.76
61. 52
123. 04 246. 08 61.5. 20
1, 255. 60
12, 556
627. 80
31.39
62.78
125. 56 251. 12
1, 281. 60
12, 816
32.04
6 4 08
128. 16 256. 32
640. 80
1, 308. 80
32.72
6 5 4 40
13, 088
65.44
130. 88 261. 76
1, 336. 80
13, 368
33.42
66.84
133. 68 267. 36
668. 40
1,
366.
40
13, 664
3 4 16 6 8 . 3 2
136. 64 273. 28 683. 20
1, 396. 80
3 4 92
69.84
13, 968
139. 68 279. 36 698. 40
1, 428. 40
71.42
142. 8 4 285. 68 7 1 4 20
35.71
14, 284
1, 461. 20
14, 612
146. 12 292. 24 730. 60
36. 53 7 3 . 0 6
1, 495. 60
14, 956
37.39
74.78
149. 56 299. 12 747. 80
38.49
76.98
153.96
307. 92
769. 80
Percent
0. 00
3. 52
3.53
3.53
3. 56
3. 58
3. 60
3. 63
3. 66
3. 69
3.72
3.76
3.79
3.82
3. 86
3. 89
3.93
3.96
4 00
4.04
Percent
23.75
2 3.76
23. 77
23.79
3420
3424
3427
34.31
3 4 35
4.49
4. 53
4.58
4. 64
4.69
4 76
4 83
4.93
5.06
5. 30
5.88
15, 396
t Month, day, and year on which issues of June 1,1954, enter each period. For subsequent Issue months add the appropriate number of months.
2 Yield from beginning ofcach half-year period to exiended maturity at extended maturity value prior to thc December 1,1965, revision,
s Yield from beginning of each half-year period lo extended maturity at extended maturity value prior to the June 1,1968, revision.
* 19 years and 8 months from issue date. Extended maturity value improved by thc revision of June J, 1968.
J> Yield on purchase price from issue date to extended maturity date is 3.69 percent.
180
19 6 8 REPORT OF T H E SECRETARY OF T H E TREASURY
TABLE ze
BONDS BEARING ISSUE DATES FROM OCTOBER 1 THROUGH NOVEMBER 1, 1954
Issue price
Denomination..
$18.75
25.00
$37.50
50.00
Period after original malurity (beginning 9 years 8 months after issue
date)
$75. 00 $150. 00 $375.00
100. 00 200. 00 500. 00
$750. 00
1, 000. 00
$7, 500
10, 000
(2) On the
redemption (3) On current
/aluo at start
redemption
jof the extended value from
beginning of
maturity
oach halfperiod to i lo
year period
beginning of
nach half-year to extended
period
maturity
thereafter
EXTEN13ED MATURITY' PERIOD
First Hyear
'(6/1/64) $25. 58 $51. 16 $102. 32 i$204.
104 12 208.
H to 1 year
(12/1/64)
26. 03 52. 06
105. 96 211.
52. 9 8
1 to iH vears
(6/1/65) 2 6 . 4 9
107. 84 215.
53.92
26. 96
IH to 2 years
(12/1/05)
109. 84 219.
27. 4 6 5 4 92
2 to 2H years
(6/1/66)
111. S4 223.
27. 96
55. 92
2K. to 3 years
(12/1/66)
113.92 227.
56. 96
3 to 3H voars
(6/1/67)
28. 48
116. 12 232.
29. 03 58. 06
3H to 4 y-ears
(12/1/67)
118.40 236.
29. 60 59. 20
4 to 4H years
(6/1/68)
4H to 5 years
(12/1/68)
30. 19 60. 38 120. 76 241.
123. 20 246.
61. 00
30.80
5 to 5H vears
(6/1/69)
125. 72 251.
31. 4 3 62. 86
oYi to 6 years
(12/1/69)
32. 09
6 4 18 128. 36 250.
6 to 6H years
(6/1/70)
131. 08 262.
32. 77
65. 54
6H to 7 vears
(12/1/70)
133. 92 267.
66. 96
33.48
7 to 7H vears
(6/1/71)
136. SS 273.
68.44
3 4 22
7H to 8 years
(12/1/71)
139. 92 279.
69. 96
8 to SH years
(6/1/72)
34 98
143. 12 286.
71. 56
35. 78
SH to 9 vears
(12/1/72)
146. 40 292.
36. 60 73. 20
9 to 9H years
(6/1/73)
149. 88 299.
37. 47
7 4 94
9H to 10 years
(12/1/73)
EXTENDED MATURITY
VALUE (10 years from
original maturity
77. 16
date)'
...(6/1/74) 3 8 . 5 8
64
24
92
68
68
68
84
24
80
52
40
44
72
16
84
76
84
24
80
76
$511. 60 $1, 023. 20 $10, 232
520. 60 1, 041. 20 10,412
529. SO 1, 059. 60 10, 596
539. 20 1, 078. 40 10, 784
549. 20 1, 098. 40 10, 984
559. 20 1, 118. 40 11, 184
569. 60 1, 139. 20 11,392
580. 60 1, 161. 20 11, 612
592. 00 1, 184 00 11, 840
603. SO 1, 207. 00 12, 076
616. 00 1, 232. 00 12, 320
628. 60 1, 257. 20 12, 572
641. 80 1, 283. 60 12, 836
655. 40 1, 310. 80 13, 108
669. 60 1, 339. 20 13, 392
684 40 1, 368. SO 13, 688
699. 60 1, 399. 20 13, 992
71.5. 60 1, 431. 20 14, 312
732. 00 1, 464 00 14, 640
749. 40 1, 498. 80 14, 988
1,543.20
Approximate investment;
Percent
2 3. 75
2 3. 76
23. 77
3 4. 19
3 4 22
3 4 26
3 4 30
3 4 33
4 47
4 51
4 56
4 61
4 66
4 72
4 78
4 85
4 96
5. 09
5. 34
5.92
Percent
0. 00
3. 52
3. 53
3. 53
3. 58
3. 59
3. 61
3. 65
3. 68
3. 72
3.75
3.78
3. 81
3. 85
3. 88
3.92
3. 95
3.99
4 02
4 06
15,432
' Month, day, and year on which issnes of Ocloljcr 1, 1951, enter each period. For subsciiuent issue monlhs add thc appropriate number of monlhs.
• Yield from begiiming ofcach half-year period lo exiended maturity al extended maturity value prior to the December 1, 1965, revision.
3 Yield from beginning ofcach half-year period to cxlendctl maturity at extended malurity value prior to the Juno 1, 1968, revision.
« 19 yearsand 8 months from issue dale. Extended maturity value improveil by thc revision of June 1, 1968.
5 Yield on purchase price from issue date to extended malurity date is 3.70 percent.
TABLE 37
BONDS REARING ISSUE DATES FROM DECEMBER 1, 1954, THROUGH MARCH 1, 1955
$18.75
25.00
$37. 50
50.00
$ 7 5 . 0 0 $150. 00 $ 3 7 5 . 0 0
100. 00 200. 00 500. 00
$750.00
1, 000. 00
$7, 500
10, 000
(1) Redemption values durin g each half-> ear period
1values increase on first d y of period hown)
(2) On the
reclemption
value at start
oftheextended
malurity
period lo the
beginning of
each half-year
period
thereafter
Period after original maturity (boginning 9 years 8 months after issue
EXTENDED MATU UTY PEE LOD
First H y e a r
'(S/1/64)
H to 1 year
(2/1/65)
1 to I H years
(8/1/6.5)
I H t o 2 years
(2/1/66)
2 t o 2H y e a r s
(S/1/66)
2H to 3 y e a r s
(2/1/67)
3 t o 3H y e a r s .
(8/1/67)
3H to 4 y e a r s
(2/1/68)
4 t o 4H y e a r s
(S/1/6S)
4H to 5 y e a r s
(2/1/69)
5 t o 5H y e a r s
(8/1/69)
5H t o 6 y e a r s
(2/1/70)
6 t o 6H v e a r s .
(S/1/70)
6H t o 7 y e a r s
(2/1/71)
7 to 7H years
(8/1/71)
7H t o 8 y e a r s
(2/1/72)
8 t o SH y e a r s
(8/1/72)
SH t o 9 y e a r s
(2/1/73)
9 t o 9H v e a r s
(8/1/73)
9H t o 10 y e a r s
(2/1/74)
EXTENDED MATURITY
VALUE ( 1 0 y e a r s from
original m a t u r i t y
date)«
(8/1/74)
$25. 64 $51. 28 $102. 56 $205. 12 $512. 80 $1, 02.5. 60 $ [0, 256
1 0 4 36 208. 72 521. SO
[0,436
26.09
52. I S
1, 043. 60
1, 062. 00
106. 20 212. 40 531. 00
LO, 620
26. 55 53. 10
216. 24 540. 60
[0, 812
i 27. 03 5 4 06 .108. 12
1,081. 20
; 27. 52 55. 04
110. OS
220. 10 550. 40 1, 100. SO 1 1 , 0 0 8
112. 12 224. 24 560. 60
11,212
1, 121. 20
; 28. 03 56. 06
11,420
•i 28. 55 57. 10
1 1 4 20 228. 40 571. 00
1, 1 4 2 . 0 0
232. 72 581. SO
' 29. 09 58. 18
116. 36
1, 163. 60
:. 1,630
1 29. 67 59. 34
118. 68 237. 36 593. 40
1, ISO. SO : 1,868
121. 04 242. OS
1, 210. 40
12, 104
005. 20
: 30. 26 60. 52
61. 7 4
30. 87
123. 48
246. 96 617. 40
1 , 2 3 4 SO
i2, 34S
63. 02
126. 04 252. 08 630. 20
1, 260. 40
2,604
31. 51
1, 286. 40
32. 16 6 4 32
128. 64 257. 28 643. 20
L2, 864
32. 85 65. 70
131. 40 262. 80 657. 00
1, 3 1 4 00
i3, 140
1 3 4 24 268. 48 671. 20
1, 342. 40
13,424
33. 56 67. 12
137. 20 2 7 4 40 686. 00
1, 372. 00
3 4 30 68. 60
.3, 720
1,402. 40
35. 06 70. 12 140. 24 280. 48 701. 20
4 024
35.87
71.74
1 , 4 3 4 80
143; 48 286. 96 717. 40
,4, 348
146. 76
293. 52 733. SO
1,467. (iO
36. 69
14, 676
73. 38
37. 55 75. 10
150. 20
300. 40
1, 502. 00
751. 00
[5,020
38.67
77.34
154.68
309. 36
7 7 3 . 40
1,546.80
yic Id
15, 468
Percent
0.00
3. 51
3.52
3. .55
3.57
3. 60
3. 62
3.64
3. 68
3. 72
3.75
3.78
3.81
3.85
3.88
.3. 92
3. 95
3. 99
4 02
4 06
(3) On current
value from
beginning of
each halfyear period
to extended
maturity
Percent
23.75
2 3. 76
2 3. 78
3 4 19
3 4 22
3426
3429
3 4 33
4 46
4 51
4 56
4 60
4. 66
4 72
4.78
4.85
4 96
5. 07
5. 33
5.97
5 4.15
' Month, day, and year on which issnes of Deccml)cr 1, 1954, enter each period. For subsequent issue months add thc appropriate number of months.
- Yield from beginning ofcach half-year period lo extended maturity al extended maturity value prior lo the December 1, 1965, revision.
3 Yield from beginning ofcach half-year period lo cxlciuled malnrily al extended maturity value prior to the June 1, 1908, revision.
* 19 years and 8 monlhs from issue date. Extended maturity value improved by thc revision of June 1, 1968.
« Yield on purchase price from issue date to extended niaturity date is 3.71 percent.
181
EXHIBITS
TABLE 38
BONDS BEARING ISSUE DATES FROM APRIL 1 THROUGH MAY 1, 1955
$18. 75 $37. 50
25.00
50.00
Issue price
Denomination
$75.00
100.00
$ 1 5 0 . 0 0 $375. 00
200. 00
500. 00
$750. 00
1, 000. 00
$7, 500
10, 000
(2) On the
redemption (3) On current
value at start redemption
oftheextended value from
beginning of
maturity
each halfperiod lo the
begii ning of
year period
eacn half-year to extended
maturity
period
thereaftor
(1) Redemption values during each half-\ ear period
(values increase on first d ly of period shown)
Period after origii a maturity (bcginning 9 years 8 nonlhs after issue
date.)
First H year.. ...'(12/1/64)
(6/1/6.5)
Yi to 1 y e a r . . .
1 to IH years. ....(12/1/65)
(6/1/66)
IH to 2 vears.
2 to 2H years- ...-(12/1/66)
(6/1/67)
2H to 3 years3 to 3H years- ....(12/1/67)
(6/1/68)
3H to 4 vears4 to 4H years. ....(12/1/68)
(6/1/69)
4H to 5 years5 to 5H years. ....(12/1/69)
(6/1/70)
5H to 6 years.
6 to 6H years. ....(12/1/70)
(6/1/71)
6H to 7 years.
(12/1/71)
7 to 7H years.
(6/1/72)
7H to 8 years8 to SH years. ....(12/1/72)
(6/1/7.3)
SH to 9 years9 to 9H years. ....(12/1/73)
(6/1/74)
9H to 10 vears
EXTENDED MATURITY
VALUE (1 0 years from
original maturity
date)^... ...(12/1/74)
EXTENDED MATURITY PERIOD
$25. 64 $51. 28 $102. 56 $20.5. 12 $512. 80 $1, 025. 60 $ 1 0 , 2 5 6
10, 436
1, 043. 60
.521. 80
52. 18
208. 72
1D4 36
26. 09
10, 620
1, 062. 00
212. 40
531. 00
106. 20
26. 55 53. 10
10, 816
l . O S l . 60
540. 80
27. 04
IOS. 16 216. 32
5 4 08
550. 60 1, 101. 20
220. 24
110. 12
27. 53
11, 012
55. 06
11,216
1, 121. 60
112; 16 224. 32 560. SO
28. 04 56. OS
11,428
1,
142.
80
571. 40
228. 56
114 28
57. 14
28. 57
1, 164 80
11, 648
232. 96 582. 40
58. 24
116. 48
29. 12
11,880
1, ISS. 00
118. .SO 237. 60 5 9 4 00
59. 40
29. 70
12, 116
1,211. 60
242. 32
121. 16
605. SO
60. 58
30.29
12, 364
1, 236. 40
6IS. 20
247. 28
123. 64
61. 82
30.91
12, 620
1, 262. 00
252. 40
631. 00
126. 20
63. 10
31. 55
12, 884
1, 288. 40
64. 42
128. 84 2.57. 68 6 4 4 20
32.21
13, 164
1, 316. 40
658. 20
263. 28
131. 64
32. 91 65. 82
1, 3 1 4 SO
13, 448
208. 96 672. 40
1 3 4 48
67. 24
33. 62
13, 744
1, 3 7 4 40
687. 20
2 7 4 SS
137. 44
68.72
34 36
14, 0.52
1, 405. 20
702. 60
281. 04
140. 52
35. 13 7 0 . 2 6
14, 376
1, 437. 60
718. 80
2S7. 52
143. 76
71. SS
35. 94
14, 704
1, 470. 40
294. OS 735. 20
36. 76 73. 52 147. 04
1, 5 0 4 SO
15, 048
150. 48
300. 96 752. 40
37. 02 75. 24
38.77
77.54
155. 08
310.16
775. 40
1, 550. 80
yie Id
15, 508
Percent
0. 00
3. 51
3. 52
3. 58
3. 59
.3. 61
3. 64
3.67
3. 71
.3.74
3.77
3. 81
3. 84
3. 88
3.91
3.94
3. 98
4 01
4 04
4 08
Percent
2 3. 7 5
2 3. 76
3 4 18
3 4 21
3 4 24
3 4 28
3 4 31
4. 45
4. 49
4 54
4 58
4 63
4. 69
4 74
4 81
4. 89
4 99
.5. 12
5. 40
6. 11
4.18
' Month, day, and year on which issues of April I, 19.55, enter each period. For subseciuent issue monlhs add the appropriate number of inonths.
- Yield from beginning of each half-year period lo extended malurity al extended inaturity value prior to the l>occinbcr 1, 1965, revision.
' Yield from beginning of each half-year period lo extended malnrily at extended maturity value prior to Ihc June 1, 1968, revision.
* 19 years and 8 months from issue date. Extended maturity value iinproved by thc revision of June 1, 1908.
» Yield on purchase price from issue date to extended malurity date is 3.73 percent.
TABLE 39
BONDS BEARING ISSUE DATES FROM JUNE 1 THROUGH SEPTEMBER 1, 1955
Issue price
Denomination..
$18.75 '$37.50
25.00 i 50.00
Period after original maturity (beginning 9 years 8 monlhs after issue
dale)
$75.00 $150.00 '$375.00
100.00 200.00 j 500.00
$750. 00 $7, 500
1, 000. 00 10, 000
EXTENDED MATURITY PERIOD
First Hyear
'(2/1/65) $25. 71 $51. 42 $102. 84 $205. 68 $514 20 $1, 028. 40 $10, 284
104 64
Hto lyear
(8/1/65)
209. 28 523. 20 1, 046. 40 10,464
26. 16
52. 32
106. 52
213. 04 532. 60 1, 065. 20 10, 652
1 to IH years
(2/1/66) 26.63
53. 26
108. 44
210. 88 542. 20 1, 084 40 10,844
I H t o 2 years
(8/1/66)
27. 11
54 22
110. 44 220. SS 552. 20 1, 104 40 11,044
2 to 2H vears
(2/1/67)
27. 61 5.5. 22
112. 4S
224. 96 562. 40 1, 124 SO 11, 248
2H to 3 years
(S/1/67)
28. 12
56. 24
114 60
229. 20 573. 00 1, 146. 00 11, 460
3 to 3H years
(2/1/68)
28. 65
57. 30
116.80
1, 168. 00 11,680
233. 60 584 00
3H to 4 vears.
(S/1/6S)
29. 20
J8. 40
119. 12
238. 24 595. 60 1, 191. 20 11,912
4 to 4H years
(2/1/69)
29. 78
59. 56
121. 48 242. 96 607. 40 1, 214 SO 12, 148
4H to 5 years
(S/1/69)
30. 37
60. 74
123. 96 247. 92 619. 80 1,239. 60 12, 396
5 to 5H vears
(2/1/70)
•iO. 99 61. 98
126. 52 253. 04 632. 60 1, 26,5. 20 12, 652
5H to 6 years
(8/1/70)
31.63
63. 26
129. 20
258. 40 646. 00 1, 292. 00 12, 920
6 to 6H vears
(2/1/71) 1 32.30
)4. 60
132. 00
264. 00 660. 00 1, 320. 00 13, 200
6H to 7 years
(8/1/71)
iS. 00 66. 00
134 84
269. 68 674 20 1, 348. 40 13, 484
7 to 7H years
(2/1/72)
33. 71 67. 42
137. 84
275. 68 689. 20 1, 378. 40 13, 784
7H to Syears
(S/1/72)
34 46
38. 92
140. 92 281. 84 704. 60 1, 409. 20 14, 092
8 to SH vears
(2/1/73)
35. 23 70.46
144 12
288. 24 720. 60 1, 441. 20 14412
S H t o 9 years
(8/1/73)
36. 03
72. 06
147. 44 294 88 737. 20 1,474 40 14, 744
9 to 9H years
(2/1/74)
36. 86 73. 72
150. 88 301. 76 754. 40 1, 508. 80 15, 088
9H to 10 y e a r s . . - . . (S/1/74)
37. 72
75. 44
EXTENDED MATURITY
VALUE (10 years from
original maturity
date)^
(2/1/75)
38.87
77.74
1,554.80 15,548
(2) On the
redemplion [(3) On current
.'alue al start redemption
|ofthcextended value from
beginning of
maturity
each halfperiod to the
year period
beginning of
each half-year lo extended
malurity
period
thereafter
Percent
0.00
3.50
3. 55
3. 57
3.60
3. 62
3. 64
3.67
3. 71
3.74
3.77
3.80
3.84
3.88
3. 91
3. 94
3. 98
4. 01
4 04
4 08
Percent
2 .3. 75
2 3. 76
3 4 . 17
3 4 21
3 4 24
3 4 28
3 4 31
4. 45
4. 49
4. 54
4. 58
4. 63
4 68
4 73
4 SO
4. SS
4 98
5. 12
.5. 3 8
6. 10
' Month, day, and year on which issues of June 1, 19,55, enter each period. For subsequent issue monlhs add the appropriate miinlicr of months.
• Yield from beginning ofcach half-year period to c.vtendcd maturity al extended matuiity value prior to the r:)ecember 1. 1905, revision.
' Yield from beginning of each half-year to extended maturity al extended malurity value prior lo the Juno I, 1968, revision.
* 19 years and 8'monllis from issue date. Extended niaturity value improved by the revision of June 1, 1908.
' Yield on purchase price from issue date to extended maturity dale is 3.74 percent.
318-223—69-
-14
182
19 6 8 REPORT OF T H E SECRETARY OF T H E TREASURY
TABLE 40
BONDS BEARING ISSUE DATES FROM OCTOBER 1 THROUGH NOVEMBER 1, 1955
Issue price
Denomination
$18. 75 $37. 50
_ 25.00
50.00
Period after original maturity (beginning 9 years 8 months after Issue
date)
$75. 00 $150.00 I $375. 00 $750. 00 $7, 500
100. 00 200. 00 I 500. 00 1, 000. 00 10, 000
(2) On the
redemption (3) On current
value at start redemption
oftheextended valuo from
beginning of
maturity
each halfperiod tothe
year period
beginning of
each half-year to extended
period
maturity
thereafter
EXTENDED MATURITY PERIOD
First H y e a r
'(6/1/65) $25. 71 $51. 4 2 $ 1 0 2 . 8 4 $205. 6 8 $ 5 1 4 20 $1, 028. 40 $10, 284
10, 464
1, 046. 40
209. 2S 523. 20
H to 1 year
(12/1/65)
1 0 4 64
26. 16 5 2 . 3 2
10, 656
1, 065. 60
213. 12 532. 80
1 to IH years
(6/1/66) 26. 64
106. 56
53. 28
10, 848
1, 084 80
542. 40
27. 12 5 4 24
IH to 2 years
(12/1/66)
108. 48 216. 96
11,048
1, 104 SO
110. 48 220. 96 552. 40
27. 62 55. 24
2 to 2H years
.(6/1/67)
11,256
1, 125. 60
225. 12 562. SO
112. 56
2H to 3 years
(12/1/67)
28. 14 56. 28
11,472
1, 147. 20
1 1 4 72 229. 44 573. 60
57. 36
3 to 3H years
(6/1/68)
28. 68
11,692
1, 169. 20
233. 84 5 8 4 60
116. 92
3H to 4 years
(12/1/6S)
29. 23 5 8 . 4 6
11,924
1, 192. 40
119. 24 238. 48 596. 20
59. 62
4 to 4H years
(6/1/69)
29.81
1, 216. 40 12, 164
121. 64 24.3. 28 608. 20
60.82
30.41
4H to 5 years
(12/1/69)
12,412
1, 241. 20
1 2 4 12 248. 24 620. 60
6 to 5H years
(6/1/70)
62.06
31.03
12, 672
1, 267. 20
126. 72 253. 44 633. 60
5H to 6 years
(12/1/70)
31. 68 63. 36
1, 294 40
12, 944
6 4 72
6 to 6H years
(6/1/71)
129. 44 258. 8 8 647. 20
32.36
1, 322. 00
13, 220
6H to 7 years
(12/1/71)
66. 10 132. 20 2 6 4 40 661. 00
33.05
1, 350. SO
7 to 7H years
(6/1/72)
67.54
13, 508
135. 08 270. 16 675. 40
33. 77
1, 380. 80
3 4 52 69. 04
7H to 8 years
(12/1/72)
13,808
276. 16 690. 40
138. 08
1, 412. 00
14, 120
141. 20 282. 40 706. 00
70.60
35.30
8 to 8H years
.(6/1/73)
1,
444
00
14, 440
8H to 9 years
(12/1/73)
1 4 4 4 0 288. 8 0 722. 00
36. 10 72. 20
1, 477. 20
14, 772
9 to 9H y e a r s . . . . . . (6/1/74)
147. 72 295. 44 738. 60
73.86
36.93
1, 512. 00
9 H t o 10 years
(12/1/74)
302. 40 756. 00
151.20
75.60
37.80
15, 120
EXTENDED MATURITY
VALUE (10 years
from original maturity
date)«
(6/1/75) 3 8 . 9 7
77.94
155. 88 3 1 1 . 7 6
1, 558. 80
7 7 9 . 40
Percent
0.00
3.50
3. 59
3.59
3.62
3.65
3.68
3.70
3. 73
3.77
3.80
3.83
3.87
3.90
3.93
3.97
4 00
4 03
4.06
4 10
Percent.
23.75
3 4 16
3 4 19
3423
3426
3429
4 43
4.47
4.52
4 56
4.61
4.66
4.70
4.76
4.83
4.91
5. 0 1
5. 17
5.45
6.19
• Month, day, and year on which issuesof October 1, 1955, enter each period. For subscQuent Lssue months add the appropriate number of months.
2 Yield from beginning ofcach half-year period to extended malurity at extended maturity value prior to the December 1, 1905, revision.
' Yield from beginning of each half-year period to extended maturity at extended inaturity value prior to the June 1,1968, revision.
* 19 years and 8 inonths from issue date. Extended inaturity value improved by thc revision of Juno 1, 1968.
» Yield ou purchase price from issue dale to extended inaturity date is 3.75 percent.
TABLE 41
BONDS BEARING ISSUE DATES FROM DECEMBER 1, 1955, THROUGH MARCH 1, 1956
I s s u e price
Denomination
$ 1 8 . 7 5 $37. 50
25. 00 5 0 . 0 0
$75. 00 $150. 00 $375. 00
100. 00 200. 00 500. 00
$750. 0 0
1, 000. 00
$7, 500
10, 000
(1) Redemption values durlr g each half-j ear period
1 values Incre so onfirstday of period shown)
Period after original maturity (beginning 9 years 8 months after issue
date)
EXTEND ED MATU RITY PER IOD
First H y e a r
'(8/1/65) $25. 77 $ 5 1 . 5 4 $103. OS $206. 16 $515. 40 $1, 030. 80 $10, 308
Hto 1 year...
(2/1/66)
26.22
1 0 4 88 209. 76 5 2 4 4 0
52. 44
1, 048. 80 10, 4 8 8
26.70
106. 80 213. 60 5 3 4 00
1 to I H years
(8/1/66)
53. 40
1, 068. 00 10, 6 8 0
IH to 2 years
(2/1/67)
27. 18 5 4 36
108. 7 2 217. 44 54.3. 60
1, 087. 20
10, 872
110. 72 221. 44 553. 60
1, 107. 20
11,072
2 t o 2H y e a r s
(8/1/67)
27.68
55. 36
28.20
112.80
11,280
2H t o 3 y e a r s
(2/1/68)
225. 60 5 6 4 00
56. 40
1, 128. 00
28.74
3 t o 3H y e a r s
(S/1/68)
5 7 4 80
1 1 4 96 229. 92
57. 48
1, 149. 60
11,496
1, 172. 00
11,720
3H t o 4 y e a r s
(2/1/69) ; 29. 30 5 8 . 6 0
117. 20 2 3 4 40 586. 00
119.52
239. 04 597. 60
1, 1 9 5 . 2 0
11,9.52
4 to 4H v e a r s
(8/1/69)
29. SS 5 9 . 7 6
121. 92 243. 84 609. 60
4H t o 5 y e a r s
(2/1/70)
60.96
1,219. 20
12, 192
30.48
1, 2 4 4 4 0 12, 4 4 4
5 t o 5H y e a r s .
(8/1/70)
1 2 4 44 248. 8 8 622. 20
3 1 . 11 6 2 . 2 2
63.52
5H t o 6 y e a r s
(2/1/71)
127. 04
1, 270. 40
31.76
2 5 4 08 635. 20
12, 704
6 t o 6H y e a r s
(8/1/71)
32.43
129. 72 259. 44 648. 60
1, 297. 20
12, 972
6 4 86
6H to 7 y e a r s
(2/1/72) ;33. 12 66. 24
132. 48 2 6 4 96
662. 40
1, 3 2 4 80
13, 248
7 to 7H y e a r s
(S/1/72)
33. 85 6 7 . 7 0
135. 40 270. 80 077. 00
1, 3 5 4 00
13, 540
1 , 3 8 4 00
7H to S y e a r s
(2/1/73)
3 4 60 69. 20
138. 40 276. SO 692. 00
13, 840
S t o S H years
(8/1/73)
141. 52
35. 38 7 0 . 7 6
283. 04 707. 60
1,415. 20
14, 152
S H t o 9 years
(2/1/74)
30. 18 7 2 . 3 6
1 4 4 72
289. 44 723. 60
1, 447. 20
14, 472
9 t o 9H y e a r s
. ( 8 / 1 / 7 4 ) ; 37. 02 7 4 04
296. 16 740. 40
1, 480. 80 14, SOS
148. 08
1,515.60
9H t o 10 y e a r s
(2/1/7.5)
75.78
37.89
151. 56 30.3. 12 757. 80
15, 156
EXTENDED MATURITY
VALUE ( 1 0 y e a r s
from original m a t u r i t y
date)*
. . . ( 8 / 1 / 7 5 ) 39. 06 7 8 . 1 2
156. 24 3 1 2 . 4 8
1, 562. 40
781.20
15, 624
yi Id
(2) On the
redemption (3) On current
value at start
oftheextended value from
maturity
beginning of
each halfperiod to the
year period
beginning of
each half-year to extended
period
maturity
thereaftei
Percent
0.00
3.49
.3.58
3.58
3.61
3. 64
3.67
3.70
3.73
3.77
3.80
3.84
3. 87
3. 90
3.93
.3. 97
4 00
4.03
4 07
4. 10
Percent
2 3.75
3 4 . 17
3 4 19
3423
3 4 26
3430
4 43
4 47
4 52
4 56
4 60
4 65
4 70
4. 77
4 83
4 91
5. 01
5. 17
5.44
6. 18
34.20
' Month, day, and year on which i.ssues of December 1,1955, enter each period. For subseciuent issue months .add thc appropriate number of months.
= Yield from beginning of each half-year period lo extended maturity at extended malurity value prior tothe December 1,1965, revision.
' Yield from l.icginning ofcach half-year period to extended maturity al extended malnrily value prior to the June 1,1968, revision.
* 19 years and 8 months from issue date. Extended maturity value improved by the revision of Juno 1, 1968.
* Yield on purchase price from issue dale to extended malurity date is 3.77 percent.
183
EXHIBITS
TABLE 42
BONDS BEARING ISSUE DATES FROM APRIL 1 THROUGH MAY 1, 1956
$75. 00 $ 1 5 0 . 0 0 $ 3 7 5 . 0 0
500. 00
100. 00 200. 00
$18. 75 $37. 50
50.00
25.00
Issue price
Denomination
$750.00
1,000.00
$7, 500
10,000
(2) On the
redemption (3) On current
value at start redmption
oftheextended value from
maturity
beginning of
perioc tothe
each halfbeginning of year period
each half-year to extended
period
maturity
thereafter
(1) Redemption values during each half-y car period
values Increase on first day of period showMi)
(
Period after original maturity (beginning 9 years 8 months after issue
dato)
Approximat
yie Id
EXTENDED MATURITY PERIOD
First H y e a r .
'(12/1/65) $25. 77 $51. 54 $103. 08 $2C6. 16 $ 5 1 5 . 4 0 $ 1 , 030. 80 SIO, 308
10,520
1, 052. 00
526. 00
210. 40
10.5. 20
26. 30 5 2 . 6 0
H t o 1 year
(6/1/66)
1 , 0 7 4 00
537. 00
107. 40
10,740
2 1 4 80
1 to IH years
(12/1/66) 26. 85 53. 70
10, 964
5^8.20
219. 28
109. 64
1, 096. 40
27. 41 5 4 82
I H t o 2 years
(6/1/67)
11, 192
111.92
1, 1 1 9 . 2 0
559. 60
223. 84
55. 96
27.98
2 to 2H years
(12/1/67)
11,424
1, 142. 40
114. 24
228. 48 571. 20
28. 56 57. 12
2Y2 to. 3 vears
(6/1/68)
11,660
1, 106. 00
233. 20
116. 60
583. 00
29. 15 5 8 . 3 0
3 to 3H years
(12/1/68)
11,900
1, 190. 00
595. 00
59. 50
119. CO 23S. 00
29.75
3H to 4 years
(6/1/69)
1, 2 1 4 SO 12, 148
121. 4S 242. 96 607. 40
60. 74
30.37
4 to 4H years
(12/1/69)
12, 400
1, 240. 00
620. 00
62.00
248. 00
1 2 4 00
31.00
4H to 5 years
(6/1/70)
1, 266. 00 12, 660
253. 20
633. 00
126. 60
31. 65 63. 30
5 to 5H years
(12/1/70)
12, 920
1, 292. 00
646. 00
258. 40
129. 20
6 4 60
32.30
5H to 6 years
(6/1/71)
1,318. SO
659. 40
131. 88 263. 76
13, 188
65. 94
32.97
6 to 6H years
(12/1/71)
1, 346. 40 13, 464
1 3 4 64 269. 28 673. 20
33. 66 67. 32
6H to 7 years
(6/1/72)
687. 00
137. 40 2 7 4 80
13, 740
1, 3 7 4 00
68.70
34 35
7 to 7H years
(12/1/72)
1, 402. 80
280. 56 701. 40
1 4 028
70. 14 140. 28
35. 07
7H to 8 years
(6/1/73)
1, 432. 00
14,320
2S6. 40 7 1 6 . 0 0
143. 20
71.60
35.80
8 to SH years
(12/1/73)
730. SO
292. 32
146. 16
1 4 616
1,461. 60
73. OS
36.54
SHto 9 years
(6/1/74)
1, 492. 00 1 4 920
746. 00
7 4 60
298. 40
149. 20
37.30
9 to 9H years
(12/1/74)
1, 522. 8 0 15, 228
76. 14 152. 28 3 0 4 56 761. 40
38.07
9H to 10 years
(6/1/75)
EXTENDED MATURITY
VALUE (10 years
from original maturity
7 8 3 . 00 1 , 5 6 6 . 0 0
313.20
156. 60
78.30
15,660
39.15
date)3
.(12/1/75)
Percent
0.00
4 11
4 15
4 16
4. 16
4 15
4 15
4 15
4. 15
4 15
4 15
4. 15
4 15
4 15
4.15
4 15
4 15
4. 15
4.15
4.15
Percent
24.15
2 4 15
2 4 15
2415
2 4 . 15
4 25
4 26
4.27
4 28
4.29
4.30
4.32
4 34
4.36
4.41
4.45
4.52
4 65
4.90
5.67
*4.23
' Month, day, and year on which issnes of .\pril 1,1956, enter each period. For subsequent issue raonths add the appropriate number ol moaths.
' Yield from beginning of each half-year period to extended maturity at extended maturity value prior to the June 1,1968, revision.
319 years and 8 monlhs from issue date. Extended maturity value irnproved by thc revision of Juno 1,1968.
«Yield on purchase price from issue date lo extended maturity date is 3.73 percent.
TABLE 43
BONDS BEARING ISSUE DATES FROM JUNE 1 THROUGH NOVEMBER 1, 1956
Issue price
Denomination. _
$18.75
25.00
$37. 50
50.00
$75. 00 $ 1 5 0 . 0 0 $ 3 7 5 . 0 0
100.00
200. 00 500. 00
$750.00
1,000.00
$7, 500
10,000
(1) Redemption values durin g each half-i ear period
values incre ise on first d iy of period shown)
Period after original maturity (beginning 9 years 8 inonths after issue
date)
EXTEND ED MATU ^ITX PEI] [OD
First H y e a r . .
'(2/[/66) $ 2 5 . 8 3 $ 5 1 . 6 6 $ 1 0 3 . 3 2 $ 2 ( 6 . 6 4 $ 5 1 6 . 6 0 $1,033.20 $10,332
26.37
52.74
105. 48 210. 96 527. 40
1, 054 SO 10, 548
H to 1 year
(8/1/66)
53. 82
5CS. 20
26. 91
107. 64 2 1 5 . 2 8
1 to IH years
(2/1/67)
1, 076. 40
1(,764
27.47
.'•4 94
219.76
109.88
5^ 9. 40
1, 098. SO
IH to 2 years
(8/1/67)
10, 988
112. 16 2 2 4 32 560. 80
28. 0 4 56. 08
1,121.60
2 to 2H years
(2/1/6S)
11,216
1 1 4 48 228. 96 572. 40
28. 62
57.24
1,144 80
2H to 3 years
(8/1/68)
11,448
'?9 02 58. 44
233. 76 5 8 4 40
116. SS
3 to 3H years
(2/1/69)
1, 168. SO
11,688
29. S2 59. 64
119. 28 238. 56 590. 40
1, 192. SO
3H to 4 years
.(S/1/69)
11,928
243. 52 608. SO
121.76
60. 88
30. 44
1, 217. 60
4 to 4H years
(2/1/70)
12, 176
31.07
62. 14 1 2 4 28 •248. 56
621. 40
1,242.80
4 H t o 5 years
(S/1/70)
12, 42S
31.72
63. 44
126. 88 253. 76 6 3 4 40
5 to 5H years
(2/1/71)
1, 268. 80
12, 688
129. .52 259. 04 647. 60
32.38
6 4 76
1, 295. 20
5H to 6 years
(8/1/71)
12,952
132. 20
2 6 4 40 661. 00
33. 05 66. 10
1, 322. 00
6 to 6H vears
(2/1/72)
K,220
1 3 4 92 209. 84 674. 60
67. 46
33.73
1, 349. 20 13,492
6H to 7 years
(8/1/72)
137. 72 275. 44 088. 60
3 4 43 68. 86
7 to 7H years
(2/1/73)
1, 377. 20
1^,772
35. 15 70. 30
140. 60 2S1. 20 7C3. 00
1,4C6. 00
7H to S years
(8/1/73)
1-1,060
287. 04 717. 60
143. 52
71.76
35.88
1,45 5.20
S t o S H years
(2/1/74)
1^,352
36. 62
146. 48 292. 96 732. 40
73. 24
1, 464 SO
SH to 9 years
(8/1/74)
1^,648
149. 52 299. 04 747. 60 1,4c 5. 20
7 4 76
37.38
9 to 9H years
(2/1/75)
1^,952
76.32
38. 16
152. 64 305. 28 763. 2 0
9H to 10 years
(8/1/75)
1, 526. 40
15, 264
EXTENDED MATURITY
VALUE (10 years from
original maturity
date)3...
(2/1/76) 39.24
78.48
156. 9 6 313. 92 784. 80 1, 569. 60 15,696
yi Id
(2) On the
redemption (3) On current
value at start redemption
oftheextended value from
beginning of
maturity
each halfperiod to the
beginning of
year period
each half-year to extended
period
maturity
thereafter
Percent
0.00
4.18
4 14
4.15
4 15
4.15
4.15
4 15
4 15
4 15
4.15
4.15
4. 15
4.15
4.15
4.15
4.15
4. 15
4.15
4.15
Percent
24.15
2 4 15
24.15
24.15
2 4 15
4.25
4.26
4.27
4.28
4.29
4.30
4.32
4.34
4.37
4.41
4.45
4.53
4.66
4.92
5.66
M.23
' Month, day, and year on which issues of June 1, 1956, enter each period. For subsequent issue months add the appropriate number o(Qjonths.
• Yield from beginning ofcach half-year period lo extended maturity at extended maturity value prior to thc Juno 1,1968, revision.
319 years and 8 montlis from issue date. Extended maturity value improved by the revision of June 1,1908.
* Yield on purchase price from issue date lo extended maturity date is 3.79 percent.
184
19 68 REPORT OF T H E
SECRETARY OF T H E
TREASURY
TABLE 44
BONDS BEARING ISSUE DATES F R O M DECEMBER
I s s u e price
Denomination..
$18.75
25.00
$37. .50
50.00
$75. 00 $ 1 5 0 . 0 0
100. 00
200. 00
1, 1956, T H R O U G H J A N U A R Y 1. 1957
$375. 00
500. 00
$7, 500
10, 000
$750. 00
1, 000. 00
(2) On the
redemption (.3) On curren
'alue at start 1 edemption
oftheextended value from
beginning of
maturity
each halfperiod to the
year period
beginning of
each half-year to exiended
raaturity
period
thereafter
Period after original maturity (beginning 9 years 8 months after issue
date)
EXTENDED MATURITY PERIOD
First H vear
"(S/1/66) $25. 97 $51. 94 $103.88 $207. 76 $519. 40 $1,038.80 $10, 388
H to 1 y e a r
(2/1/67)
26. 51 53. 02 106. 04 212. OS 530. 20 1, 060. 40 10, 604
1 to i H vears
(S/i/67)
108. 24 216. 48 541. 20 1, 0S2. 40 10, 824
27. 06 5 4 12
27. 62 55. 24 110. 48 220. 96 552. 40 1, 104 SO 11, 048
I H to 2 y e a r
(2/1/6S)
2 to 2H y e a r s . . . . . (8/1/6S)
28. 19 56. 38 112. 76 225. 52 563. SO 1, 127. 60 11, 276
2H to .3 y e a r s . . . - . ( 2 / 1 / 6 9 )
28. 78 57. 56 115. 12 230. 24 575. 60 1, 151. 20 11, 512
29. 38 58. 76 117. 52 235. 04 587. 60 1, 175. 20 11, 7.52
3 to 3H y e a r s . . . . . ( S / 1 / 6 9 )
29. 99 59. 98 119. 96 239. 92 599. SO 1, 199. 00 11 996
3H to 4 y e a r s , . . . - ( 2 / 1 / 7 0 )
4 to 4J.'^ y e a r s , . . . - ( S / 1 / 7 0 )
30. 61 61. 22 122. 44 244 88 612. 20 1, 224 40 12, 244
(2/1/71)
4H to 5 y e a r s . .
31. 24 62. 48 124 96 249. 92 624 80 1, 249. 60 12, 496
(S/1/71)
5 to 5H y e a r s . .
31. 89 63. 78 127. 56 255. 12 637. SO 1, 275. 60 12, 756
(2/1/72)
5H to 6 y e a r s . .
32. 55 6.5. 10 130. 20 200. 40 651. 00 1, 302. 00 13, 020
1, 329. 20 13, 292
(S/1/72)
6 to 6H y e a r s . .
33. 23 66. 46 132. 92 265. 84 664 60
(2/1/73)
6H to 7 y e a r s . .
33. 92 67. 84 135. OS 271. 36 678. 40 1, 356. SO 13, 568
(8/1/73)
34 62 69. 24 138.48 276. 96 692. 40 1, 384. 80 13,848
7 to 7H y e a r s . .
(2/1/74)
7H to 8 y e a r s . .
35. 34 70. 68 141. 36 282. 72 706. SO 1, 413. 60 14 136
(8/1/74)
36. 07 72. 14 144 28 2SS. 56 721. 40 1, 442. 80 14,428
8 to SH " v e a r s . .
....(2/1/75)
36. 82 73. 64 147. 28 294. 50 730. 40 1, 472. SO 14,728
SH to 9 yc;i
1, 503. 60 15, 036
(8/1/75)
37. 59 7,5. IS 150. 36 300. 72 751.80
9 to 9H y e a r s
15, 348
38. 37 76. 74 153. 48 306. 96 767. 40 1,534 80
9H to 10 y e a r s
(2/1/76)
EXTENDED MATURITY
VALUE (10 y e a r s
from original m a t u r i t y
date)3
(8/1/70)
1,578.80 1 5 , 7 8 8
Percent
0. 00
4'16
4 15
4 15
4 14
4 15
4 15
4 15
4 15
4 15
4 15
4 15
4 15
2
2
2
2
4
4
4
4
4.
4.
4.
4.
4.
4.
15
15
15
15
25
26
26
27
28
30
4 31
4. 33
4. 35
4. 38
4 42
4 47
4. 56
4 15
4 15
4. ()9
4. 94
5. 73
' Month, day, and year on whicii issues of December 1, 1950, enter each pcrioil. For subsequent issue months add the appropriate number of months.
- Yield from beginning of each half-year pcriotl lo extended maturity at extended malurity value prior to thc June 1, 1968, revision.
3 19 years and 8 moriths from issue dale. Exieiulcd maturity values improved by the revision of June 1, 1968.
* Yield on purchase price from issue date lo extended maturity date is 3.82 percent.
TABLE 45
B O N D S BEARING ISSUE DATES F R O M FEBRUARY 1 T H R O U G H
I s s u e price
Denomination
$18.75 $37.50
25. 00
50. 00
Period after original mat
giimihgS years 11 month.'
date)
First H vear
• (1 / I / 6 6 )
H to 1 vear
(7/1 /66)
1 to 1H yea rs
(1/1/67)
1H to 2 y e a r s
(7/1 /67)
2 to 2 H y ea rs
(1/1 /6S)
2H to 3 vears
(7/1/68)
3 to 3 y yea rs
(1/1/69)
3H to 4 y e a r s .
(7/1/69)
4 to 4H y e a r s
(1/1/70)
4H to 5 y e a r s .
(7/1/70)
5 to 5H vears
.(1/1/71)
5H' to 6 years
(7/1/71)
6 to 6H y e a r s
(1/1/72)
OH to 7 ' y e a r s
(7/1/72)
7 to 7H vears
(1/1/73)
7H to 8 years
(7/1/73)
8 to SH y e a r s
(1/1/74)
SH to 9 y e a r s
(7/1/74)
9 to 9H y e a r s
.. (I /1/7 )
9H to 10 vears
(7/1/75)
EXTENDED MATURITY
VALUE (10 y e a r s from
original m a t u r i t y
date)3
(1/1/76)
$ 1 5 0 . 0 0 $375. 00
200. 00
500. 00
$750.00
1,000.00
$7, 500
10, 000
(2) On thc
redemption (3) On current
value at slarl redemption
of the
beginning of
extended
each halfperiod lo the year period
to exiended
beginning of
inaturity
each halfyear ijcriod
Ihereafler
EXTENI^ED MATURITY PEltlOD
$25. SO $51. 60 $103. 20 $206. 40 $516. 00 ;i, 032. 00 $10, 320
20. 34
52. 6S 105. 36 210. 72 526. SO 1, 053. 00 10, 536
107. 52 215. 04 537. 60 1, 075. 20 10, 752
26. 88
54. SS 109. 76 219. 52 548. SO 1, 097. 60 10, 976
27. 44
2S. 01
56 02 112. 04 224. OS 560. 20 1, 120. 40 11, 204
28.
57 IS 114 36 228. 72 571.80 1, 143. 60 11, 436
29. 18 58. 30 116. 72 233. 44 583. 60 1, 167. 20 11,672
29. 79
59. 58 119. 16 238. 32 595. SO 1, 191. 60 11, 916
30. 41
60. S2 121. 64 243. 28 608. 20 1, 216. 40 12, 164
31. 04
62. OS 124 16 248. 32 620. SO 1, 241. 60 12,416
31. 08 63. 36 126. 72 253. 44 633. 60 1, 267. 20 12, 672
32. 34
64 68 129. 36 258. 72 646. SO 1, 293. 60 12, 936
33. 01
66 02 132. 04 264 08 660. 20 1, 320. 40 13, 204
.33. 70
67. 40 134 SO 209. 60 674 00 1, 348. 00 13, 480
34. 39 68. 7S 137. 56 275. 12 687. SO 1, 37.5. 60 13,756
140. 44 280. SS 702. 20 1, 404. 40 14 044
3.5. 11
70
3.5. 84 71. 08 143. 36 2S6. 72 716. SO 1, 433. 60 14 336
36. 58 73. 16 146. 32 292. 64 731. 60 1, 463. 20 14 632
37. 34 74 68 149. 36 298. 72 746. SO 1,493,60 14, 936
3S. 11 76 22 152. 44 304. SS 702. 20 1, 524 40 15, 244
•>•)
4. 15
4
4
4
4
4
4
4
4
4
4
4
4
4
4
Percent
2 4.
= 4.
2 4.
2 4.
24 15
4. 25
4 26
4 27
4. 28
4 29
4 31
4. 32
4 34
4 37
4 41
4. 46
4. 53
4 67
4. 15
4. 92
5. 72
4 15
months add the appropriate number of months.
n of June 1, 1968.
15
15
15
15
15
15
15
15
15
15
15
15
15
15
15
15
15
15
78 40
' Month, day, and year on which issues of February 1, H!
2 Yield from beginning ofcach half-year period to extend
' IS years and 11 montlis from issue date. Kxtendeil main
* Yield on purchase price from issue date to extended ma
$75.00
100. 00
MAY
185
EXHIBITS
TABLE 46
BONDS BEARING ISSUE DATES FROM JUNE 1 THROUGH NOVEMBER 1, 1957
I s s u e price
Denomination
$18. 75 $37. 50
25.00
.50. 00
$75. 00 $ 1 5 0 . 0 0 $37.5. 00
500. 00
100.00
200. 00
,$750. 00
1, 000. 00
$7 500
10 000
(1) Redemption values during each half-year period (values increase on first day of
period shown)
Period after original inaturity (beginning 8 years 11 months after issue
date)
EXTEN'DED MATURITY PERIOD
First H y e a r
'(5/l/6(>) $25. 91 $51. S2 $103. 64 $207. 28 $5IS. 20 $1, 033.
H to 1 y e a r
(11/1/6(3)
1,05S.
529. 00
211. 60
105. s o
52. 90
2(K 45
216. 00
27. 00
1 to IH vears
(5/1/67)
1, 0 8 1
5 4 ) . 00
IOS. 00
5 1. 00
I H t o 2 years
(11/1/67)
27. 50
1, 102.
1 1 ). 24 220. 48 551. 20
55. 12
2 to 2H vears
(5/ /68)
562. 60
1, 12.5.
28. 13 5 >. 26 11 2. 52 22.5. 04
2H to 3 yeans
( 1 1 / /68)
1 1 4 84
57. 42
1, 148.
229. 68 574. 20
28. 71
1, 172.
3 to 3H y e a r s
(5/1/69)
117. 24 234. 48 5S6. 20
5S. 62
29.31
1, 196.
29. 92
3H to 4 y e a r s
(11/1/09)
59S. 40
11 ). GS 239. 36
5 ) . S4
1, 221.
4 to 4H years
(5/ /70)
610. SO
122. 16 244. 32
30. 54
61. OS
4H to 5 y e a r s
( 1 1 / /7())
1 2 4 68 249. 36 623. 40
62. 34
1, 246.
31. 17
5 t o 5H y e a r s
(5/ /71)
1, 272.
030. 40
127. 28 2 5 4 56
63. 64
31. 82
1, 299.
32. 4S
5H to 0 y e a r s
(11/1/71)
649. 60
259. 84
129. 92
61. 96
6 to 6H y e a r s
(5/1/72)
1, 326.
132. 60 265. 20
66. 30
663. 00
33. 15
076. 80
6H to 7 y e a r s
(ll/:/72)
1, 353.
67. 68
33. 84
135. 36 270. 72
7 to 7H y e a r s
(5/1/73)
3 4 54
1, 381.
690. SO
69. OS
138. 16 276. 32
1, 410.
141. 04 282. 08 70.5. 20
7H t o S y e a r s
( 1 1 / /73)
35. 26 70. 52
8 to SH y e a r s
(5/:/74)
1, 439.
71. 98
143. 96 287. 92 719. 80
35. 99
36. 74
SH to 9 y e a r s
( 1 1 / /74)
1, 469.
146. 96 293. 92 7 3 4 SO
73. 48
1, 500.
750. 00
37.50
9 to 9H y e a r s
(5/1/75)
150. 00 300. 00
7.5. 00
9H to 10 vears
(11/1/75)
1, 531.
306. 24
153. 12
76. 56
38.28
765. 60
EXTENDED MATURITY
VALUE (10 y e a r s from
original m a t u r i t y
1, 575.
787. 60
157. 52 3 1 5 . 0 4
78.76
39.38
date)3
(5/1/76)
Approximate investment
yi Id
(2) 0 1 llic
redemption (3) On current
value at start redemplion
of thc
value from
beginning of
extended
each halfmaturity
period lo the year period
to extended
begim ing of
maturity
each halfyear period
thereafter
40 $10 364
10 580
00
10 SOO
00
11 024
40
11 2.52
20
11 484
40
11 724
40
11 968
80
12 216
60
SO 12 468
12 728
80
12 992
20
13 260
00
13 536
60
13 816
60
14 104
40
14 396
60
60 14 696
15 000
00
15 312
20
Percent
). 00
1. 17
4 16
4. 16
4 15
4 15
4 15
4 15
4 15
4 15
4 15
4 15
4 15
4 15
4 15
. 4 15
4 15
4 15
4 15
4 15
15,752
M.23
20
• Percent
2 4 15
2 4. 15
2 4 15
2 4 15
4 25
4 26
4 26
4. 27
4 28
4 30
4 31
4 33
4 35
4 38
4 42
4 47
4 55
4.68
4 95
5.75
' .Month, day, and year on which i.ssues of June 1, 1957, enter each perioci. For subsoaucnt issue monlhs add thc appropriate number of months.
• Yield from beginning of each half-year perioil to extended maturity at extended maturity value prior lo thc June 1, 1968, revision.
3 18 yearsand 11 months from issue tialc. Exiended malurity value improved by the revision of Juno 1, 196S.
* Yield on purchase price from issue date to extended maturity date is 3.96 percent.
TABLE 47
BONDS BEARING ISSUE DATES FROM DECEMBER 1, 1957, THROUGH MAY 1, 1958
Issue price.
Denomination
$18.75
25.00
$37.50
50.00
$75. 00 $150. 00 $375. 00
500. 00
100. 00
200. 00
$750.00
1, 000. 00
$7 500
10 000
(1) RcdL mption va ues during c ich half-year period (valu es increase on fi rst day of
period sho vn)
Period after original maturity (beginning 8 years 11 months after issue
date)
EXTEND iD MATU ^ITY PER OD
First H y e a r
' ( H / /66) $26. 03 $52. 06 $ 1 0 4 12 $208. 24 $520. 60 $1, 041. 20 $10 412
1,062. SO
H t o 1 year
(-5/1/67)
10 628
26.57
5.3. 14
106. 28 212. 56 5 3 1 . 4 0
27. 12 5 4 24
1 , 0 8 4 SO
10, 848
1 to i H years
(11/1/67)
108. 48 213. 96 542. 40
110.72
221. 44
1, 107. 20
11,072
v y to 2 y e a r s
(5/1/68)
55. 36
553. 60
27.68
11,304
56. 52
1, 1 3 1 40
2 f.O 2H y e a r s
(11/1/68)
28.26
113. 04
226. OS 565. 20
1
1,540
57.
70
2H to 3 y e a r s .
(5/1/69)
115. 40 230. SO 577. 00
1, 1 5 4 00
28. 85
233. 52
117. 76
1, 1 7 7 . 6 0
11,776
3 to 3H y e a r s
(11/1/69)
29. 44
58. SS
588. SO
1,202. 00
12,020
3H to 4 y e a r s
(5/1/70)
30. 05 60. 10
120. 20
240. 40 601. 00
122. 72 245. 44 613. 60 1, 227. 20
12,272
4 to 4H y e a r s
(11/1/70)
30. 6S 61. 36
12,524
1, 252. 40
31. 31 62. 62
125. 24
4H (.0 5 y e a r s
(5/1/71)
250. 48 626. 20
5 to 5H y e a r s
(11/1/71)
63. 92
127. 84
12, 784
25.5. 6S 639. 20
1, 278. 40
31. 96
32. 63 65. 26
652. 60
r>y to O y e a r s
(5/1/72)
130. 52 2 6 1 . 0 4
1, 305. 20 13, 052
6 to 6H y e a r s
(11/1/72)
1, 332. 00 1 3 , 3 2 0
33. 30
133. 20 266. 40
666. 00
66. 60
34. 00
272. 00
136. 00
6H to 7 y e a r s
(5/1/73)
680. 00
OS. 00
1, 360. 00 13, 600
7 to 7H y e a r s
(11/1/73)
34. 70 69. 40
13, 880
138. SO 277. 60 6 9 4 00
1,388. 00
35. 42
70. 84
141. 68 283. 36
1,416. SO
1 4 168
7H to S y e a r s
(5/1/74)
70S. 40
72. 32
8 to SH y e a r s
(M/1/74)
144. 64
36. 16
1,446. 40
14, 464
289. 28 723. 20
147. 64
73. 82
14, 764
SH to O y e a r s
(5/1/75)
36. 91
1,476.40
29,5. 28 738. 20
37. 67
9 to 9H y e a r s
(11/1/7.5)
7.5. 34
753. 40
1,506.80
15,068
1.50. 6S 3 0 1 . 3 6
9H to 10 y e a r s
(5/1/76)
38.45
76. 90
153. 80 307. 60
769. 00
1,538.00
15, 380
EXTENDED MATURITY
VALUE (10 y e a r s from
original m a t u r i t y
date)3
(11/1/76) 39.58
79.16
158. 32 3 1 6 . 6 4
791.60
1,583.20
15, 832
yic Id
(2) 0 1 the
redemption (3) On current
value al start redemption
of the
value from
extended
beginning of
maturity
each halfperiod to the year period
beginning of
to extended
each halfraaturity
year period
thereafter
Percent
). 00
4. 15
4. 14
4 14
4 15
4 16
4. 15
4 15
4 15
4 15
4 15
4 15
4 15
4 15
4 15
4 15
4 15
4. 15
4 15
4 15
Percent
2 4 15
2 4 15
2 4 15
4.25
4 26
4.26
4 27
4 28
4 29
4 31
4. 32
4. o i
4 37
4 39
4. 43
4. 49
4 57
4 71
5.01
5.88
M.23
' Month, day, and year on whicii issues of December 1, 1957, enter each period. For subsequent issue months add the appropriate number of months,
• Yield from beginning ofcach half-year period lo extended maturity at extended maturity valuo prior lo the June 1, 1968, revision.
' IS years and 11 months from issue date. Extended maturiiy value improved by llie revision of June 1, 1968,
* Yield on purchase i)ricc from issue date lo extended malurity date is 3.99 perccnl.
186
19 68 REPORT OF THE SECRETARY OF T H E
TREASURY
TABLE 48
BONDS BEARING ISSUE DATES FROM JUNE 1 THROUGH NOVEMBER 1, 1958
I s s u e price
Denomination
$18.75
25.00
$75. 00 $ 1 5 0 . 0 0 $375. 00
500. 00
100. 00 200. 00
$37. 50
50.00
$750. 00
1, 000. 00
$7, 500
10, 000
(1) Redemption values during each half-year period (values increase on first day of
period shown)
Period after original maturity (beginning 8 years 11 months after issue
EXTENDED MATURITY PERIOD
First H y e a r
' ( 5 / 1 / 6 7 ) $26. 14 $52. 28 $ 1 0 4 56 $209. 12 $522. 80 $1, 045. 60 $10, 450
1, 067. 20 10, 672
H to l y e a r
(11/1/67)
533. 60
213. 44
106. 72
53. 36
26. 6S
10, 896
217. 92
27.24
1, 089. 60
5 4 4 80
108. 96
5 4 48
1 to IH years
(5/1/68)
11, 120
1, 112. 00
222. 40
556. 00
111. 20
27. SO 5 5 . 6 0
I H to 2 years
(11/1/68)
11,352
1, 135. 20
567. 60
227. 04
113. 52
28.38
2 to 2H y e a r s
(5/1/69)
56.76
579. 40
1, 158. SO 1 1 , 5 8 8 '
231. 76
115.88
57. 94
28.97
2H to 3 y e a r s
(11/1/69)
1, 182. SO 1 1 , 8 2 8
591. 40
236. 56
118.28
59. 14
3 to 3H y e a r s
(5/1/70)
29. 57
12, 072
1, 207. 20
603. 60
241.44
120. 72
30. 18 60. 36
3H t o 4 y e a r s
(11/1/70)
12, 324
1, 232. 40
61.62
4 t o 4H y e a r s
(5/1/71
123. 24 246. 48 616. 20
30. s:
12, 580
1, 258. 00
12.5. SO 251. 60 629. 00
62.90
31.45
4H t o 5 y e a r s
(11/1/71
12, 840
32. 10 6 4 20
1, 2 8 4 00
5 t o 5H y e a r s
(5/1/72)
256. 80 642. 00
128. 40
1,310. 80
13, 108
655. 40
32.77
5H t o 6 y e a r s
(11/1/72)
65.54
131. 08 262. 16
13, 380
1, 338. 00
133. SO 267. 60 669. 00
66.90
6 t o 6H y e a r s
(5/1/73
33.45
273. 12 682. 80
1, 365. 60 13, 656
3 4 14
6H t o 7 y e a r s
(11/1/73)
136. 56
68.28
13, 940
1, 3 9 4 00
139. 40
7 t o 7H y e a r s
.(5/1/74)
278. 80 697. 00
3 4 85 69. 70
1, 422. 80 14, 228
711.40
142. 28 2 8 4 56
71. 14
35. 57
7H t o S y e a r s
(11/1/74)
14, 524
72.62
1, 452. 40
145. 24 290. 48 726. 20
36. 3:
8 t o SH v e a r s
.(5/1/75)
1, 482. 40 14, 824
7 4 12
S H t o 9 years
(11/1/75)
148. 2 4 296. 4 8 741. 20
37.06
15, 132
302. 64 756. 60
151.32
1, 513. 20
9 t o 9H y e a r s
(5/1/76)
37.83
75.66
772. 40
38.62
15, 448
1, 5 4 4 80
77.24
9H t o 10 y e a r s
(11/1/76)
308. 96
154.48
EXTENDED MATURITY
V A L U E ( 1 0 y e a r s from
original m a t u r i t y
39.77
date)'
(5/1/77
15,908
1, 590. 80
7 9 5 . 40
159. 08 3 1 8 . 1 6
79.54
'
'
'
•
yi Id
(2) On the
redemplior (3) On current
value al start redemption
ofthe
value from
beginning of
extended
each halfraaturity
year period
period to the
beginning of
to extended
raaturity
each halfyear period
thereafter
Percent
0.00
4 13
4 16
4 15
4 15
4 15
4 15
4 15
4 15
4 15
4 15
4 15
4 15
4 15
4 15
4 15
4 15
4 15
4. 15
4. 15
Percent
2 4 15
2 4 15
4 25
4 26
4 26
4 27
4 28
4 29
4 30
4 31
4 33
4 35
4 37
4 41
4 45
4 51
4.60
4.76
5.06
5.96
M.24
Month,.day, and year on which issues of June 1, 1958, enter each period. For subsequent issue months add thc appropriate number of months.
Yield from beginning of each half-year period to extended maturity at extended maturity value prior to thc June 1, 1968, revision.
18 years and 11 inonths from issue dale. Extended inaturity value improved by the revision of June 1,1968.
Yield on purchase price from issue date to extended maturity date is 4.01 percent.
TABLE 49
BONDS BEARING ISSUE DATES
I s s u e price
Denomination
$18.75
25.00
$37. 50
50.00
F R O M D E C E M B E R 1, 1 958, T H R O U G H M A Y 1, 1959
$75. 00 $150. 00 $375. 00
100. 00
200. 00
500. 00
$750, 00
1, 000. 00
$7, 500
10, 000
(1) Redemption values durii g each half-y ear period
values incre ise on first d ay of period shown)
Period after original maturity (beginning 8 years 11 monlhs after Issue
date)
EXTEND ED MATU RITY PER IOD
First H year
' ( 1 1 / 1 / 6 7 $26. 26 $52. 52 $10.5. 0': $210. 08 ,$52,5. 20 $1, 050. 40 $10, 50^:
H t o 1 year
(.5/1/68)
10, 720
107. 20
26. SO 53. 00
1, 072. 00
2 1 4 40
536. 0(1
27. 30
5 4 72
1 to I H y e a r s
(11/1/6S)
1, 0 9 4 40
10, 9 4 109.4218. SS 547.211
I H t o 23-ears
(5/1/69)
27. 93 5.5. 86
11, 172
111.72
223. 4 - 5.58. 61) 1, 1 1 7 . 2 0
57. 02
2 to 2H vears
(11/1/69)
1, 140. 40
11,40':
114 0 28. 5
228. 08 570. 20
2H to 3 vears
(5/1/70'
29. 10
11, 64(1
58. 20
1, 1 6 4 OCi
232. 811 582. 00
116. 40
29. 7(1 59. 40
3 to 3H years
(11/1/70
1, 188. 0(1 11,8811
118. 80
237. 6(1 .594 00
3H to 4 y e a r s
(5/1/71
60. 0 12, 128
30. 32
121. 28 242. 56 606. 41
1, 212. S(
4 to 4H y e a r s
(11/1/71
30. 95
61.90
12,380
1, 238. 00
123. SO 247. 60
619. 0(
4H to 5 y e a r s
.(.5/1/72;
12, 636
252. 72
126. 36
31. .59
1, 263. 6(
0.3. 18
631. SO
32. 2 5 to 5H y e a r s
(11/1/72)
12, 90(
64. 50
1, 290. 0(
129. 0(
258. 00
645. 0(
32. 92
5H to 6 vears
(5/1/73)
6.5. S'.
263. 36
131. 68
658. 4(
1, 316. S(
13, 168
6 f,o OH y e a r s
(11/1/73)
67. 20
33. 60
1, 344. 00 1 3 , 4 4 0
1 3 4 40 268. SO 672. 0(
6H to 7 y e a r s
(5/i/74;
34. 3(
137. 2(
1, 372. 0(
13, 72(
68. 00
2 7 4 4(
686. 0(
35. 01
14, 00^
70. 02
7 to 7H y e a r s
(11/1/74
140. 0^
280. OS 700. 2(
1, 400. 4(
142. 92 2S.5. 8'
7H to S y e a r s
(5/1/75)
7 1 4 6(
14, 292
3.5. 73 •71. 46
1, 429. 2(
8 to SH v e a r s
(11/1/75)
36. 48
72. 96
1 4 592
145. 92
1, 459. 2(
729. 60
291. 8^
SH to 9 vears
(5/1/76;
37. 23 7 4 46
14, 892
1, 489. 2(
148. 92 297. 8': 7 4 4 6('
9 to 9H y e a r s
(11/1/76)
76. 02
152. 0'
38. 0]
1, 520. 4(
15, 20^
304. 08 760. 2(
9H to 10 years
(.5/1/77)
38. 7{
310. 32
77.58
155. 10
15,516
775. 8('
1, 551. 6(
EXTENDED MATURITY
VALUE (10 y e a r s from
original m a t u r i t y
date)3
(11/1/77
159.92
39.98
79.96
319.84
7 9 9 . 60
1, 599. 20
15, 992
Approximat
yi id
(2) On the
redemption (3) On current
value al start redemption
oftheextended value from
maturiiy
beginning of
period lo the
each halfbeginning of
year period
each half-year to extended
maturity
period
thereafter
Percent
0.0)
4. 1 .
4 15
4 15
4 15
4 15
4 15
4 15
4 lo
4 15
4. 15
4 15
4 15
4 15
4 15
4 15
4 15
4.15
4 15
4. 15
Percent
2 4 . 15
4 25
4 26
4 26
4.27
4 28
4 29
4.30
4 31
4.33
4.34
4 36
4 39
4.43
4. 47
4.-55
4.63
4. S l
5.12
6.14
M.25
' Month, day, and year on which i.ssues of December 1, 1958, enter each period. For subsequent issue months add the appropriate number of mouths.
"• Vield from beginning of each half-year period to extended maturity at extended maturity value prior to the June 1, 1968, revision.
3 IS years and 11 monlhs from issue date. Extended niaturity value improved by the revisioa ol June 1,1968.
* Yield on purchase price from issue date to extended maturity dale is 4.04 percent.
187
EXHIBITS
TABLE 50
BONDS BEARING ISSUE DATES FROiM JUNE 1 THROUGH NOVEMBER 1, 1959
Issue price..-.
Denomination
$18. 75 $37. 50
25.00 50.00
$75. 00 $150.00 $375. 00
100.00 200. 00 500. 00
$750. 00
1, 000. 00
$7, 500
10, 000
(1) Redemption values during each half-year period
(values increase on first day of period shown)
Period after original maturity (beginning 7 years 9 jnonths after issue
date)
EXTENDED MATURITY PERIOD
First H y e a r .
'(3/1/67)
H to 1 year
.(9/1/67)
1 to IH years
(3/1/68)
I H t o 2 years
(9/1/6S)
2 to 2H y e a r s
(3/1/69)
2H t o 3 y e a r s
(9/1/69)
3 t o 3H y e a r s
(3/1/70)
3H t o 4 y e a r s
(9/1/70)
4 to 4H y e a r s
(3/1/71)
4H t o 5 y e a r s
(9/1/71)
5 to 5H y e a r s
(3/1/72)
5H t o 6 y e a r s
(9/1/72)
6 t o 6H y e a r s
(3/1/7,3)
6H to 7 y e a r s
.(9/1/73)
7 t o 7H y e a r s
(3/1/74)
7H t o 8 y e a r s
(9/1/74)
S t o S H years
.(3/1/7,5)
S H t o 9 years
(9/1/7,5)
9 t o 9H y e a r s
(3/1/76)
9 H t o 10 y e a r s
(9/1/76)
EXTENDED MATURITY
V A L U E (10 y e a r s from
original m a t u r i t y
date)3
(3/1/77)
,$2,5. 13
25. 65
26. IS
26. 73
27. 28
27. 85
28. 43
29. 02
29. 02'
30.23
30. SO
31. 50
32. 15
32. 82
3.3. 50
34 20
34 91
35. 63
36. 37
37. 12
38.23
$50. 26 $100. .52
51.30 102. 60
52. 36 104 72
53. 46 106. 92
54 56 109. 12
5,5. 70 111. 40
56.86 113.72
5S. 04 116. OS
59. 24 118.48
00.46 120. 92
61. 72 123. 44
63.00 126. 00
64. 30 128. 60
65. 64 131.28
67. 00 134 00
68. 40 136. 80
69.82 139. 64
71.26 142. 52
72. 74 145. 48
74 24 148. 48
76.46
152. 92
$201. 04 $502. 60 $1, 00,5. 20 $10, 052
20.5. 20 513. 00 1, 026. 00 10, 260
209. 44 523. 60 1, 047. 20 10, 472
213. S4 534 60 1, 069. 20 10, 692
218. 24 54.5. 60 1,091. 20 10,912
222. 80 557. 00 1, 114 00 11, 140
227. 44 568. 60 1, 137. 20 11,372
232. 16 580. 40 I, 160. 80 11,608
236. 96 592. 40 1, 184 80 11,848
241. 84 604 60 1, 209. 20 12, 092
246. 88 617. 20 1, 234 40 12, 344
252. 00 630. 00 1, 260. 00 12, 600
257. 20 643. 00 1, 286. 00 12, 860
262. 56 056. 40 1, 312. 80 13, 128
268. 00 670. 00 1, 340. 00 13, 400
273. 60 684 00 1, 368. 00 13, 680
279. 28 698. 20 1, 396. 40 13, 964
28,5. 04 712. 60 1, 42,5. 20 14, 252
290. 90 727. 40 1, 454 SO 14, 548
296. 96 742. 40 1, 484 80 14, 848
305. 84
764. 60
1, 529. 20
15, 292
Approximate investment
yield
(2) On the
redemption
value al start
of tho extended
maturiiy
period to the
bcginniuK of
each half-year
period
thereafter
(3) On current
redemption
value from
beginning of
each halfyear period
to extended
maturity
Percent
Percent
0.00
4 14
4. 14
4. 16
4 15
4 15
4 16
4 15
4.15
4 15
4 15
4 15
4 15
4 15
4. 15
4. 15
4 15
4 15
4 15
4. 15
2 4 15
«4. 15
4.25
4.25
4.26
4.27
4 28
4.29
4.30
4.31
4.33
4.35
4.38
4.41
4.45
4 51
4.59
4 75
5.05
5.98
M.24
'Month, day, and year on which issues of June 1, 1959, enter each period. For subsequent issue months add the appropriate number of months.
5 Yield from beginning ofcach half-year period to extended malurity at extended maturity value prior lo tiie June 1, 1968, revision.
3 17 years and 9 months from issue date. Extended niaturity value iinproved by the revision of June 1, 19(i8.
* Yield on purchase price frora issue date to extended inaturity date is 4.05 percent.
TABLE 51
BONDS BEARING ISSUE DATES FROM DECEMBER 1, 1959, THROUGH MAY 1, 1960
I s s u e price
Denomination
$18.75
25.00
$37. 50
50.00
$75. 00 $ 1 5 0 . 0 0 $375. 00
100. 00 200. 00 500.00
$750.00
1, 000. 00
$7, 500
10, 000
(2) On the
redemption (3) On current
value at start redemption
oftheextended value from
maturity
beginning of
period to thc
each halfbeginning of year period
each half-year to extended
period
maturity
thereafter
(1) Redemption values durin g each half-i ear period
values incre se on first d ly of period s hown)
period after original maturity (beginning 7 years 9 montlis after issue
date)
yi Bid
EXTEND ED MATU RITY PER IOD
Percent
First H vear
. ' ( 0 / 1 / 6 7 ) $2,5. 18
H to 1 year
(3/1/68)
2.5. 70
26. 24
1 to IH years
(9/1/68)
I H t o 2 years
.(3/1/69)
26. 78
27. 34
2 to 2H y e a r s .
(9/1/69)
2H to 3 years
.(3/1/70)
27.90
3 t o 3H y e a r s
(9/1/70)
28. 4S
3H to 4 years
(-3/1/71)
29. 07
4 t o 4H y e a r s
-(9/1/71)
29. 68
30. 29
4H to 5 years
(3/1/72)
30.92
5 t o 5H y e a r s
(9/1/72)
5Hto Oyears.
(3/1/73)
31.56
32. 22
6 t o 6H y e a r s
(9/1/73)
32. 89
6H to 7 y e a r s
(3/1/74)
7 t o 7H y e a r s
(9/1/74)
33. 57
34. 26
7H t o 8 y e a r s
.(3/1/75)
S t o S H years
(9/1/7.5)
3 4 98
S H t o 9 years
(3/1/76)
3,5. 70
36. 4 4
9 t o 9H y e a r s
(9/1/76)
9 H t o 10 y e a r s
(3/1/77)
37.20
EXTENDED MATUR I T Y V A L U E (10
y e a r s from original
maturity
date)3
(9/1/77)
38.33
$50. 36 $100. 72 $201. 44 $503. 60 $1, 007. 20 SIO, 072
51. 40 102. SO 205. 60 514 00 1, 02s. 00 10, 280
52. 48 1 0 4 96 209. 92 524 80 1, 049. 60 10, 496
53. 56 107. 12 214 24 53.5. 60 1 , 0 7 1 . 2 0 1 0 , 7 1 2
54 68 109. 36 218. 72 546. 80 1, 093. 60 10, 936
5.5. 80 1 1 1 . 6 0 223. 20 558. 00 1, 1 1 6 . 0 0 11, 160
56. 96 1 1 3 . 9 2 227. 84 569. 60 1, 139. 20 11, 392
58. 14 1 1 6 . 2 8 232. 56 ,581. 40 1, 162. SO 1 1 , 6 2 8
59. 36 1 1 8 . 7 2 237. 44 593. 60 1, 187. 20 1 1 , 8 7 2
60. 58 121. 16 242. 32 605. 80 1 , 2 1 1 . 6 0 12, 116
61.84 123. 68 247. 36 618. 40 1, 236. SO 12, 368
63. 12 126. 24 252. 48 631. 20 1, 262. 40 12, 624
64 44 128. 88 257. 76 044 40 1, 288. 80 12, 888
6,5. 78 1 3 1 . 5 6 263. 12 657. SO 1, 315. 60 13, 156
67. 14 1 3 4 28 268. 56 671. 40 1, 342. SO 13, 428
68. 52 137. 04 274 08 685. 20 1, 370. 40 13, 704
69. 96 139. 92 279. 84 699. 60 1, 399. 20 13, 992
71. 40 142. 80 28.5. 60 714 00 1, 428. 00 14, 280
72.88 145. 76 291. ,52 728. 80 1, 457. 60 14, 576
74 40 148. 80 297. 60 744 00 1, 488. 00 14, 880
76.66
153. 32
306. 64
766. 60
1, 5 3 3 . 20
15. 332
0.00
4. 13
4 17
4 15
4 16
4 15
4 15
4 15
4 15
4 15
4 15
4 15
4 15
4 15
4 15
4. 15
4 15
4 15
4 15
4. 15
Percent
M. 15
4.25
4. 26
4.26
4 27
4.28
4 29
4 30
4 31
4 33
4 34
4.37
4.39
4.42
4 47
4 54
4 63
4 80
5. 12
6.08
M.25
issuesof
en each period.
.
,.
'• Month, day, and year on which issues
of Deceinber 1,1959, enter
For subsequent
Issue months add thc appropriate number of months.
29 Yield
beginning
period
extended maturiiy
-v.<„i J frora
r
.„-:..„: ofrfirst
r..„.half-year
i„w
:-j to. —..,.,,i.,^j
maturityatatextended
exiendedraaturity
raaturityvalu
value prior to the Juno l, 1968, revision.
317 years and 9 months from issue dale. Exiended maturity value improved by tho revision 0
rity value
improved
by tho revision of June 1,19G8.
* Yield on purchase price from issue date to extended maturity
dale
is 4.07 percent.
188
19 68 REPORT OF T H E SECRETARY OF T H E
TREAStJRY
TABLE 52
BONDS BEARING ISSUE DATES FROM JUNE 1 THROUGH NOVEMBER 1. 1960
Issue price..
Denomination
Period after issue dato
___ $ 1 8 . 7 5
25.00
$37. 50
50.00
$750. 00
1, 000. 00
$7, 500
10, 000
Approximat c investment
yi eld
(2) On tho
redemption
value at start
of each maturity or
exiended malurity period
to beginning
of each halfyear
period
thereafter
(1) Redemption ?alucs during each half-year period
values increase on first day of period shown)
First H y e a r
2(6/1/60) $18. 75 $37. 50
H to 1 v e a r
(12/1/60)
18. 91 37. 82
1 to IH years
(6/1/61)
38. 38
19. 19
IH to 2 years
(12/1/61)19. 51 39. 02
2 t o 2H y e a r s
(6/1/62)
39.80
19.90
2H to 3 y e a r s
(12/1/62)
40. 50
20.28
41.32
3 t o 3H y e a r s
(6/1/6.3)
20.66
42. 14
21. 07
3H to 4 y e a r s
(12/1/63)
4 t o 4H y e a r s
(6/1/64)! 21. 50
43. 00
43.90
4H t o 5 y e a r s
(12/1/64)
21.95
4 4 80
5 t o 5H y e a r s
(6/l/65)< 2 2 . 4 0
45.72
22.86
S H t o 6 years
(12/1/6,5)
6 t o 6H y e a r s
(6/1/66)
2,3. 33 4 6 . 6 6
6H t o 7 y e a r s
(12/1/66)
23. 83 4 7 . 6 6
7 t o 7H y e a r s
(6/1/67)
48.74
2 4 37
7H years to 7 years a n d 9
months.
(12/l/67> 2 4 93 4 9 . 8 6
M A T U R I T Y VALUE (7
years and 9 months
from i s s u e
25.23
date)
(3/1/68)
50.46
Period after maturity dato
$75. 00 $ 1 5 0 . 0 0 $375. 00
200. 00
500. 00
100. 00
$75. 00 $150. 00 $37.5. 00
378. 20
151. 28
7,5. 04
383. 80
153. 52
76.76
78.04
150. OS 390. 20
398. 00
1,59. 20
79. 60
162. 24
405. 60
81. 12
82.64
165. 28 413. 20
421. 40
168. 56
8 4 28
430. 00
172. 00
86. 00
87.80
175. 60 439. 00
44S. 00
89.60
179. 20
457. 20
182. 88
91.44
93.32
186. 64 466. 60
470. 60
190. 64
95. 32
487. 40
97. 48
1 9 1 96
$750. 00
756. 40
767. 60
780. 4.0
796. 00
811.20
826. 40
S42. SO
860. 00
878. 00
896. 00
9 1 4 40
933. 20
953. 20
9 7 4 80
$7, 500
7, 564
7,676
7,804
7,960
8, 112
8,264
8, 428
8, 600
S 780
S 960
9 144
9 332
9 532
9 748
• Percent
0.00
L71
2.33
2. 67
3.00
3. 16
3. 26
,3. 36
3. 45
3.53
3.59
3.64
3.68
3.72
3.78
99.72
199. 44
498. 60
997. 20
9 972
3.83
100.92
201.84
504. 60
1, 009. 20
10 092
3.87
Percent
33.75
3 3. 89
3 3. 96
3401
3401
3 4 03
3 4 05
3 4 06
3 4 06
3 4 04
3 4. 03
* 4 43
* 4 52
' 4 62
M . 68
M.84
(b) to extended
maturity
EXTEND ED MATU RITY PER IOD
First H y e a r
(3/1/68): $2.5. 2 3 $50. 46 $100. 92 $201. 84 $ 5 0 4 60 $1, 009. 20 $10 092
Hto 1 year...
(9/1/68), 2,5. 75 SL 50
10 300
1, 030. 00
515. 00
206. 00
103. 00
1, 051. CO 10 516
1 to IH years
(3/1/69)
10,5. 16 210. 32 525. 80
52.58
26.29
10 732
107. 32 2 1 4 64 536. 60
I H t o 2 years
.(9/1/69)
1,073. 20
53. 66
26.83
2 t o 2H y e a r s
(3/1/70): 2 7 . 3 9
1, 093. 60
109. 56 219. 12 547. SO
5 4 78
10 956
1, 1 1 8 . 4 0
55.92
11 184
111. 84 223. 68 559. 20
2H t o 3 y e a r s
(9/1/70)
27.96
1, 141. 60
1 1 4 16 22S. ,32 570. 80
28.54
3 t o 3H y e a r s
(3/1/71)
11 416
57.08
11 652
1, 165. 20
116. 52 23 B. 04 582. 60
3H t o 4 y e a r s
(9/1/71). 29. 13 58. 26
237. 92 5 9 4 80
4 t o 4H y e a r s
(3/1/72)
11 896
1, 189. 60
118. 96
29. 74 5 9 . 4 8
1, 2 1 4 00
607. 00
242. SO
121. 40
60.70
4H t o 5 y e a r s
(9/1/72)
12, 140
30.35
247. 84
12, 392
123. 92
61.96
5 to 5H y e a r s
(3/1/73): 3 0 . 9 8
1, 239. 20
619. 60
632. 40
31.62
1, 2 6 4 80
63. 24
S H t o 6 years.
(9/l/73>
12, 648
126. 48 252. 96
12, 912
129. 12
32. 28 6 4 56
6 to 6H y e a r s
(3/1/74)
1, 291. 20
645. 60
258. 24
32. 95 6.5. 90
6H t o 7 y e a r s
(9/1/74)
1, 31S. 00 13, ISO
659. 00
263. 60
13 . 80
672. 60
1 3 4 52
1, 343. 20 13, 452
269. 04
33. 63 6 7 . 2 6
7 to 7H y e a r s :
(3/1/75)
1, 373. 20
2 7 4 64 686. 60
137. 32
68.66
7H t o 8 y e a r s
(9/l/7.5> 3 4 33
13, 732
1 4 020
1, 402. 00
701. 00
280. 40
S t o S H years
(3/1/76): 35. 05 70. 10
140. 20
Vii. OS
71. 54
1, 430. SO 14, 308
286. 16 715. 40
S H t o 9 years
(9/1/76). 3.5. 77
14, 604
1, 460. 40
146. 04 292. 08 730. 20
30. 51 7 3 . 0 2
9 t o 9H y e a r s
(3/1/77)
9 H t o 10 y e a r s
(9/1/77)
1, 490. 80
7 4 54
37. 27
1 4 908
298. 16 745. 40
149. 08
EXTENDED MATURITY
V A L U E ( 1 0 y e a r s from
original m a t u r i t y
76.84
date)5
(3/1/78) 38.42
153. 68 307. 36 7 6 8 . 40
15, 368
1, 536. 80
<-w*w/ . . . . . . _ . _ - . . yv^
/ •v.'/
(3) On current redemption
value
from boginning of
each halfyear
period' (a)
to maturity
0.00
4 12
4 16
4 14
4 15
4 15
4 15
4 15
4 15
4 15
4 15
4 15
4 15
4 15
4 15
4 15
4 15
4. 15
4 15
1. 15
6 4.25
• 3-month period in the case of the TA-ycar to 7-year and 9-monlh period.
2 Month, day, and year on which issnes of June 1, 1960, enter each period. For subsequent issue months add the appropriate number of monlhs.
3 Yield from beginning of each period to maturity at maturity value prior to the December 1, 1965, revision.
* Yield from beginning of each period to maturiiy at maturiiy value prior to the Juno 1, 1968, revision.
s 17 years and 9 months from issue date. Extended maturiiy value iniproved by the revision of June 1, 1908.
0 Yield on purchase price from issue date to extended maturity date is 4.08 percent.
4
4
4
4
4
4
4
4
4
4
4
4
4.
4
4
4
4.
4
,5.
6.
25
26
26
27
28
28
29
30
31
33
35
38
40
44
49
55
64
82
16
17
189
EXHIBITS
TABLE 53
BONDS BEARING ISSUE DATES FROM DECEMBER 1,1960, THROUGH MAY 1,1961
I s s u e price
Denomination
$18.75
25.00
Period after issue date
$37. 50
50.00
$750. 00
1, 000. 00
$7, .500
10, 000
$75
75
76
78
79
81
82
84
86
87
89
91
93
95
97
00 $150 00 $375 00
378 20
64
151 28
383 SO
153 52
76
390 20
156 08
04
398 00
1.59 20
60
405 60
102 24
12
64
165 28 413 20
168 56 421 40
28
430 00
172 00
00
439 00
SO
175 60
60
179 20 448 00
182 96 457 40
48
407 00
186 80
40
190 96 477 40
48
64
195 28 488 20
99 88
199 70
499 40
101 12
202 24
505 60
Approximate invnslmont
yi Id
(2) On the
redemption
value at start
of each maturity or
extended maturity period
to beginning
ofcach lalfyear
period
thereafter
(1) Redemption ^ alucs durinp each half-yc ar period '
(values increase on lirst day of period shown)
First H year
2(12/1/60) $18 75 $37 ,50
H t o 1 year
_ . . (6/1/61)
18 91 37 82
1 to I H y e a r s
(12/1/61)
19 19
38 38
j y to 2 y e a r s
(6/1/62)
19 51 39 02
2 to 2H y e a r s
(12/1/62)
19 90 39 SO
2H to 3 y e a r s
(6/1/63)
20 28 40 56
3 to 3H y e a r s
(12/1/63)
20 66 41 32
3H to 4 y e a r s
(6/1/64)
21 07 42 14
4 to 4H y e a r s
(12/1/64)
21 50 43 00
4H to 5 y e a r s
.(6/1/65)
21 95 43 90
5 to 5H years
(12/1/6,5)
22 40
44 80
22 87 45 74
5H t o 6 y e a r s
(6/1/66)
6 to 6H y e a r s
(12/1/66)
23 35 46 70
6H to 7 y e a r s .
(6/1/67)
47 74
23 S7
7 to 7H y e a r s
(12/1/67)
24 41 48 82
7H v e a r s to 7 y e a r s a n d 9
months
(6/1/68)
49 94
24 97
M A T U R I T Y VALUE (7
years and 9 months
from i s s u e
date)...
( 9 / 1 / 6 8 ) 25 28
50 56
Period after maturity dato
$75. 00 $150. 00 $375. 00
200.00
500. 00
100. 00
00
40
60
40
00
20
40
SO
00
00
00
SO
00
SO
40
$7, ,500
7, 564
7,676
7, S04
7, 900
8, 112
.S, 264
S, 42S
8, 600
S, 7S0
8, 960
9, 148
9, 340
9, 548
9, 764
Percent
0 00
1 71
2 33
2 67
3 00
3 16
3 26
3 36
3 45
3 53
3 59
3 64
3 69
3 75
3 80
998 SO
9,988
3 86
10,112
3 89
$750
756
707
7S0
790
811
826
842
860
878
896
914
934
954
976
1,011
20
from beginning of
each halfyear
period ' (a)
to malurity
Percent
3 3. 75
3 3. 89
3 3.96
3 4 01
3401
3 4 03
3 4 05
3 4. 00
3 4. 06
3404
* 4. 45
* 4 50
M . 59
* 4. 64
*4. 72
* 5 . 00
(b) to extended
maturity
EXTEND ED MATU RITY PER IOD
First H year
(9/1/6S) $25 28 $50 50 $101 12 $202 24 $50.5. 60 $ 1 , 0 1 1 20 $ 1 0 , 1 1 2
1, 032 00
206 40
H t o 1 vear
-.(3/1/69)
10, 320
516. 00
103 20
25 SO 51 60
1, 053 60 10, 536
1 to IH years
(9/1/69) 20 34 52 68
105 36 210 72 526. SO
I H t o 2 years
(3/1/70)
537. 80
107 56
10, 756
1, 075 60
215 12
26 89
53 78
1, 097. 60 1 0 , 9 7 6
2 to 2H y e a r s
(9/1/70)
27 44
109 76 219 52 548. SO
54 88
112 04
2H to 3 y e a r s
.(-3/1/71)
11,204
1, 120 40
560. 20
224 OS
28 01 56 02
11,440
3 t o 3H y e a r s
(9/1/71)
1, 1 4 4 00
114 40 228 SO 572. 00
28 60 57 20
11, 676
58.3. SO 1, 167. 60
116 76
3H to 4 y e a r s
(3/1/72)
233 52
29 19
58 38
4 to 4H y e a r s
(9/1/72)
11, 916
59.5. SO 1, 191 60
238 32
119 16
29 79 59 58
12, 164
1, 216 40
121. 64
30. 41 GO. 82
608. 20
243. 2S
4H to 5 y e a r s
(3/1/73)
1, 241 60 12, 416
620. 80
1 2 4 16 248. 32
62. OS
31. 04
5 to 5H y e a r s
(9/1/73)
1, 267 60 12, 676
03,3. 80
126. 76 253. 52
5H t o 0 v e a r s
(3/1/74)
63. 38
31. 69
12, 940
1, 294 00
647 00
129. 40
32. 35 6 4 70
6 to 6H y e a r s
(9/1/74)
2.58 80
132. 08 264 16 660 40
13, 208
1,320 SO
33. 02 66. 04
6H to 7 y e a r s
(3/1/75)
674 00
134 SO 269 60
67. 40
7 to 7H y e a r s
(9/1/7,5)
1, 348 00 13, 480
33 70
1, 376 00
137 60
34 40
7H to 8 y e a r s
(3/1/76)
13, 760
688 00
68 80
275 20
702. 20
1, 404 40
280 88
140 44
70 22
35 11
8 to SH vears
(9/1/76)
1 4 044
716. 80
35 84
SH to 9 y e a r s
(3/1/77)
1, 433 60 1 4 336
143 30 280. 72
71 68
1, 463 60 M, 636
146 36 292. 72
36 59
9 to 9H y e a r s
.(9/1/77)
731. 80
73 18
14, 940
1, 4 9 4 00
747. 00
9H t o 10 y e a r s
(3/1/78)
298. SO
149 40
37 35 74 70
EXTENDED MATURITY
VALUE ( 1 0 y e a r s from
original m a t u r i t y
307 92 769 80
date)5.
(9/1/78)
15,396
1, 539. 60
153 96
38 49 76 98
(3) On current redemption
0
4
4
4
4
4
4
4
4
4
4
4
4
4
4
4
4
4
4
4
M
00
11
15
16
14
14
16
15
15
15
15
15
15
15
15
1,5
15
15
15
15
4 25
4 26
4 26
4. 26
4 28
4 28
4 29
4. 30
4 32
4 33
4 35
4 37
4 39
4.43
4. 48
4. 54
4. 65
4 Sl
5. 13
6. 10
25
• 3-nionth period in the case of the 7!-^-ycar to 7-ycar and 9-month period.
• Month, day, and year on which issues of December 1, 1900, enter each period. For subscrinent issue months add the appropriate number of months.
3 Yield from beginning ofcach pcrioii to maturity al maturity value prior lo the December 1, \%^. revision.
< •^'ield from beginning ofcach perioil lo maturity al malnrily value prior to the June I, 1968, revision.
i 17 years and 9 months from issue dale. Extended malurity value improved by tlic revision of June 1, 190S.
' Yield on purchase price from issue date to extended maturity dale is 4.09 peicent.
190
19 68 REPORT OF T H E SECRETARY OF T H E TREASTJRY
TABLE 54
BONDS BEARING ISSUE DATES FROM JUNE 1 THROUGH NOVEMBER 1, 1961
Issue price
Denomination
Period after issue date
$f8. 75 $37. 50
25.00
50.00
$75. 00 $ 1 5 0 . 0 0 $375. 00
500. 00
100. 00 200. 00
$7.^0. 00
1, 000. 00
$7,500
10. 000
lU
(2) On pur- (3) On current
redemption
chase price
from issue value from bedate to begin- ginning of
ning of each each half-year
period' to
half-year
maturity
period '
(1) Redemption values during each half-year period •
(values increase on first day of period shown)
First H y e a r .
^(6/1/61) $18. 75 $37. 5(1
37. 82
IS. 9;
H t o 1 year
(12/1/61)
38. 38
19. 19
1 to IH.years
(6/1/62)
19. 51 39. 02
IH to 2 years
(12/1/62)
39. 80
19. 90
l; to 2H years
(6/1/63)
20. 28 40. 56
2H to 3 years
(12/1/63)
41. 32
20. 66
3 to 3H years
(6/1/64)
42. M
3H to 4 years
(12/1/64) ,21.07
43. 00
21.50
4 to 4H years
(6/1/65)
21. 95 43. 90
4H to 5 years
(12/1/6.5)
44. 82
22. 4
5 to 5H years
(6/1/66)
45. 78
22. 89
5H to 6 years
(12/1/66)
23. 38 46. 76
6 to 6H years
(6/1/67)
47. 82
6H to 7 years
(12/1/67) '23.9
48. 92
24 46
7 to 7H years
(6/1/68
7H years to 7 years and
50. 04
25.02
9 months
(12/1/68'
MATURITY VALUE
(7 years and 9 months
from issue
50.68
25.34
date)5.
(3/1/69)
Approximate investment
$7,5. 0( $150. 00 $37.5. 00
378. 20
151. 28
7,5. 6':
383. 80
76.76
153. 52
78. Ov
390. 20
156. OS
398. 0(1
159. 20
79. 60
162. 2-. 405. 6(1
81. 12
82. 6':
16.5. 28 413. 20
8 4 28
168. 51) 421. 40
172. 00 430. 00
86.00
17,5. 60
87. SO
439. 00
448. 20
179. 28
89. 6'
183. 12 457. 80
91. 50
407. 60
187. 0 93. 52
478. 20
95. 6':
191.28
97. 8':
195. 68 489. 20
$750. 00
756. 40
767. 60
780. 40
796. 0('
811.20
826. 40
842. S(i
860. 00
S7,S. 00
896. 40
915. 60
935. 20
956. 40
978. 4(1
$7, 500
7,567,676
7,804
7,960
8, 112
8, 264
8,428
8,600
8,780
8, 9 6 9, 15(3
9,352
9, 5 6 9, 78^:
Percent
0.00
1. 7:
2. 3o
2.67
,3.00
3. 16
3. 26
3.36
3.45
3.53
3.60
3. 66
3.7
3.78
3. So
100. 08
200. 1(5
500. 40
1,000. SO
10, 008
3.88
101.36
202. 72
506. 80
1,013.60
10,136
3.92
Percent
3 3.75
3 3.89
3 3.96
3 4 01
3 4 01
3 4 03
3 4. 05
3 4. 00
3 4 06
M . 44
* 4. 49
* 4 53
M . 61
* 4 64
4.77
5.15
» 3-month period in thc case of thc 71^-year to 7-year and 9-month period.
5 Month, day, and year on which issues of Jnne 1, 1901, enter each period. For subseriuent issue months add the appropriate number of months.
' Yield from beginning ol each period to maturity al maturity value prior to the December 1,1905, revision.
< Yield from beginning of each period lo maturity at malurity value prior to the June 1,1908, revision.
«Malurity value iinproved by the revision of June 1, 1968.
TABLE 55
BONDS BEARING ISSUE DATES FROM DECEMBER 1, 1961, THROUGH MAY 1, 1962
Issue price . .
Denomination
$18.75 $37. .50
25.00
50.00
(1)]
Period after issue date
First Hyear
2(12/1/61) $18. 75 $37. 50
37. S2
Hto lyear
.(6/1/62
18. 91
19. 10 38. 3S
1 to IH years
(12/1/62
39. 02
IH to 2 years
.(6/1/63
19. 5
2 to 2H years
(12/1/63)
19. 90 39. SO
2H to 3 years
(6/1/64)
20. 28 40. 56
3 to 3H years
(12/1/64)
20. 66 41. 32
42. l^t
3H to 4 years
(6/1/6.5)
21. 07
43. 00
4 to 4H years
(12/1/6.5)
21. 50
43. 92
4H to 5 years
(6/1/66)
21.96
5 to.5H years
(12/1/66)
22. 42 44. 84
5H to 6 years
(6/1/67)
22. 91 45. 82
6 to 6H years
(12/1/67)
23. 42 46. 84
47.90
6H to 7 years
(6/1/68)
23.95
7 to 7H years
(12/1/68)
24 50 49. 00
7H years to 7 years and 9
50. 14
months
(6/1/69)
25.07
MATURITY VALUE (7 years
and 9 months from
50.82
issue date)5...(9/1/69)
25.41
$75. 00 $150. 00 $375. 00
200. 00
500.00
100.00
$750. 00
1, 000. 00
$7, 500
10, 000
(2) On pur- (3) On current.
redeinption
chase price
from issue value from bedale to begin- ginning of
ning of each each half-year
period ' to
half-year ,
maturity
period >
edemption 'alucs durinp each holf-yc ar period
[values increase on first day of period shown)
$7.5. 00 $150. 0(1 $37.5. 00
7.5. 6 - 151. 28 378. 20
153. 52 383. SO
76. 76
78. O^t
156. 08 390. 20
79. 60
159. 2(i
398. 00
162. 2 40.5. 60
81. 12
S2. 64
165. 2S 4 1 3 . 2 0
16S. 50
421. 40
8 4 2S
86. 00 • 172. 00 430. 00
87. 84
175. 68 439. 20
89. 68
179. 36 448. 4091.64
183. 28 458. 20
187. 313 468. 40
93. 68
95. SO
191.60
479. 00
196. 00
490. 00
98. 00
yic Id
$750. 00
756. 40
767. 60
780. 40
796. 00
811.20
826. 40
842. SO
860. 00
878. 40
896. SO
916. 40
936. 80
95S. 00
980. 00
$7, 500
7,567,676
7,807, 96(i
8, 112
8, 264
8, 428
8, 600
8, 784
8, 968
9, 164
9,368
9, 580
9,800
Percent
0.00
1.7:
2. 33
2.67
3.00
3. 16
.3.26
3.36
3. 45
3.54
3. 6 .
3.68
3.74
3.80
3.86
100. 28
200. 50
501. 40
1,002.8(1
10, 028
3.9
101.64
2 0 3 . 28
508. 20
1,016.40
10,164
3.96
Percent
3 3. 75
3 3.89
3 3 . 96
3401
3 4 01
3403
34.05
3 4 06
M . 46
* 4. 49
* 4 55
M . 58
M . 62
4 79
4 92
5.46
1 3-month period in the case of the 7J.^-year lo 7-year and 9-montli period.
2 Month, day, and year on which i.ssues of December 1, 19P1, enter each period. For subsequent issue months add the appropriate number of months.
5 Yield from beginning ofcach period to maturity at maturity value prior to thc December 1, 19C5, revision.
* Yield from beginning ofcach period'to maturity at maturity value prior to the June 1, 1968, revision.
«Maturity value improved by thc revision of June 1,1908.
191
EXHIBITS
TABLE 56
BONDS BEARING ISSUE DATES FROM JUNE 1 THROUGH NOVEMBER 1, 1902
I s s u e price
Denomination
$18. 75 $.37. 50
50.00
25.00
$75. 00 $ 1 5 0 . 0 0
200.00
100. 00
$375. 00
500. 00
$750. 00
1,000.00
$7, 500
10, 000
(2) On pur- (3) On current
redemption
chase price
value from befrom issue
ginning of
dale to begii ning of each each half-year
period ' to
half-year
maturity
period '
(1) Redemption values during each half-year period '
(values Increase on first day of period shown)
Period after issue date
First H y e a r . .
=(6/1/62) $18. 75 $37. 5C
H t o 1 year
(12/1/62)
18. 91 3 7 . 8 2
19. 19
1 to I H vears
-(6/1/63)
38. 38
I H t o 2 years
(12/1/63)
39. 02
19. 51
19. 90
2 to 2H y e a r s .
(6/1/64)
39. SO
40. 56
20. 28
2H to 3 vears
(12/1/64)
41.32
20.66
3 to 3H y e a r s .
(6/1/65)
42. 14
21. 07
3H to 4 y e a r s
(12/1/65)
21. 51 43. 02
4 to 4H vears
(6/1/66)
21. 97
43. 94
4H to 5 y e a r s
(12/1/66)
22. 45 44. 90
5 to 5H .years
((V 1/(37)
22. 95 4.5. 90
5H to 6 vears
(12/1/67)
40. 92
23. 46
6 to 6H years
(6/1/68)
47. 98
2.3. 99
6H to 7 yuars
(12/1/68)
2 4 55 49. 10
7 to 7H vears
.(6/1/69)
7H' years to 7 years a n d
25. 12 50. 24
9 months
(12/1/69)
M A T U R I T Y VALUE
(7 y e a r s a n d 9
m o n t h s from i s s u e
date)5
(3/1/70)
50.94
25.47
yieId
$75. OC $150. 00 $37,5. 00
378. 20
7.5. 64
151.28
383. 80
15.3. 52
76.76
156. 08 390. 20
78. 04
79.60
398. 00
159. 20
162. 24
405. 60
81. 12
82.64
16,5. 28 413. 20
16,S. 56 421. 40
8 4 28
172. 08 430. 20
86. 04
.87. 88
439. 40
17.5. 76
179. 60
89. SO
449. 00
183. 60
91. SO
459. 00
187. 68 469. 20
93. 84
191. 92 479. SO
9,5. 96
491. 00
196. 40
98. 20
$750. 00
756. 40
767. 60
780. 40
796. 00
811.20
826. 40
842. 80
860. 40
878. SO
898. 00
918. 00
938. 40
959. 60
982. 00
$7, 500
7,564
7, 676
7, 804
7,960
8, 112
8,264
8, 428
8,604
8, 788
8,980
9, 180
9,384
9, 596
9,820
Percent
0.00
1.71
2. 33
2. 67
3. 00
3. 16
3. 26
.3.36
3. 46
3.55
3. 63
3.71
3. 77
.3.83
3. 89
Percent
3 3. 75
3 3.89
3 3.96
3 4 01
3 4 01
3 4 03
3 4 05
M . 47
* 4 50
M . 54
* 4. 57
M . 60
4 75
4 85
4 97
.5. 61
100. 48
200. 96
502. 40
1, 0 0 4 80
10, 048
3.94
101.88
203. 76
509. 40
1,018.80
10, 188
3.99
' 3-inonth period in the case of the 7J/|-year to 7-year and 9-month period.
• Month, day, and year on which issues of June 1, 1962, enter each period. For subseciuent issue months add the appropriate number of months.
3 Yield from beginning of each period to maturiiy at maturity value prior to thc December 1, 1905, revision.
* Yield from beginning ofcach period lo maturity at malurity value prior to thc June 1, 19GS, revision.
* .Maturity value improved by the revision of Juno 1, 19C8.
TABLE 57
BONDS BEARING ISSUE DATES FROM DECEMBER
I s s u e price
Denomination
$18.75
25.00
Period after issue date
$37. 50
50.00
$75. 00 $ 1 5 0 . 0 0 $ 3 7 5 . 0 0
200. 00 500. 00
100. 00
1962, THROUGH MAY 1, 1963
$750. 00
1, 000. 00
$7, 500
10,000
(2) On purchase price
from issue
date to beginning of eac I
half-year
period •
(1) r edemption values during each half-yc ar period '
(values incre aso on first d ay of period hown)
First H year.
2(12/1/62) $18. 75 $37. 50
H t o 1 year
(6/1/63)
37. 82
18.91
1 to IH years
(12/1/63)
19. 19
38.38
1H to 2 y e a r s
(6/1 /64)
39.02
19. 51
2 t o 2H y e a r s
(12/1/64)
19.90
39. SO
2H to 3 y e a r s
(6/1/65)
20. 28 40. 50
41.32
3 to 3H y e a r s
(12/1/65)
20.06
3 H to 4 y e a r s
(6/1/66)
42. 16
21.08
21. .52
4 to 4H y e a r s
(12/1/66)
43.04
4H t o 5 y e a r s
(6/1/67)
21.99
43.98
5 t o 5H y e a r s
(12/1/67)
22. 48
4 4 96
22. 98
45. 96
5H t o 6 y e a r s
(6/1/68)
47. 00
6 to 6H y e a r s . . . . - - ( 1 2 / 1 / 6 8 )
23.50
6Hto7ye.ars
(6/1/69)
2 4 04
48. OS
7 to 7H y e a r s
(12/1/69)
2 4 60
49. 20
7H y e a r s t o 7 y e a r s a n d 9
months
...(6/1/70)
25. 17
50. 34
M A T U R I T Y VALUE (7
years and 9 months
from i s s u e
date)5
(9/1/70)
25.53
51.06
$75. 00 $150. 00 $375. 00
75.64
151. 28 378. 20
1.53. 52 383. SO
76.76
78.04
156. OS 390. 20
79.60
159. 20 398. 00
162. 24
81. 12
405. 60
82.64
413. 20
165. 28
8 4 32
168. 64 421. 60
172. 16
430. 40
86.08
0 87. 96 175. 92 439. SO
89. 92
179. 84 449. 60
91. 92
183. 84 459. 60
9 4 00
470. 00
188. 00
192. 32
480. SO
96. 16
98.40
196. SO 492. 00
yie Id
(3) On current
redemption
value from
beginning of
each half-year
period ' to
maturity
$750. 00
756. 40
767. 60
780. 40
796. OC
811.20
820. 40
843. 2C
860. 80
879. GO
899. 2C
919. 20
940. 00
961. 60
9 8 4 00
$7, 50C
7,56^
7,676
7,804
7,96C
8,112
8,264
8, 432
8,608
8,796
8,992
9,192
9,400
9,616
9,840
Percent
0.00
1.71
2. 33
2.67
3.0c
3. 16
3.26
3. 37
3.47
3.57
3.66
3.73
3.80
3.86
3.92
Percent
3 3 . 75
3 3.89
3.3. 96
3 4. 01
3 4. 01
3 4 03
M . 46
M . 50
* 4. 5 4
M . 57
M . 59
4 73
4 79
4 87
5.01
5. 76
100. 68
201. 36
503. 40
1, 006. 80
10, 068
3.96
102.12
204. 24
510.60
1,021.20
10,212
4.02
» 3-month period in thc case of the 71/^-ycar to 7-year and 9-month.period.
2 Month, day, and year on which issues of December 1, 1902, enter each period. For subsequent issue months add the appropriate nuinber of months.
5 Yield from tieginning of each period lo maturity at maturity valuo prior lo the Deceinber 1, 1965, revision.
* Yield from beginning of each period to maturiiy al maturity value prior to the June 1, 1UC8, revision.
« Maturiiy valuo improved by the revision of June 1, 1908.
192
19 68 REPORT OF T H E SECRETARY OF T H E TREASTJRY
TABLE 58
BOND.S BEARING ISSUE DATES FROiM JUNE 1 THROUGH NOVEMBER 1, 1963
Issue price
Denomination.
$18.75 $37. ,50
25.00 50. 00
$75. 00 $150.00 $.375. 00 $750. 00 $7, 500
1, 000. 00 10, 000
100.00 200. 00 500.00
(2) On purchase price
from issue
date to begin
ning ofcach
half-year
period '
Period after issue date
First H vear
^ (6/1/6.3)
H to 1 year
(12/1/63)
1 to IH vears
(6/1/64)
IH to 2 yoars
(12/1/04)
2 to 2H vears
(0/1 /65)
2H to 3 years
(12/1 /65)
3 to 3H vears
(6/1/66)
3H to 4 years
(12/1/66)
4 to 4H years
(6/1/67)
4H to 5 vears
(12/1/67)
5 to 5H years
(6/1/6S)
SH to 6 years
(12/1/68)
6 to 6H years
(6/1/09)
6H to 7 j-ears
(12/1/69)
7 to 7H years
(0/1/70)
7H years to 7 years and 9
months
(12/1/70)
MATURITY VALUE
(7 years and 9 months
from issue
date)"!
(3/1/71)
...
91
19
51
90
28
67
09
54
02
51
02
54
CS
64
$37.
37.
38.
39.
39.
40.
41.
42.
4,3.
44.
4.5.
4(3.
47.
48.
49.
5)
Sl
3S
02
S )
56
34
18
OS
01
02
04
OS
1 )
2S
22
50. 4 I
59
5 1 . 18
$7.5. 00 $150.
75. 04 151.
76. 70 153.
7S. 04 156.
79. 60 159.
81. 12 162.
82. OS 16.5.
84. 30 lO.S.
SO. 16 172.
176.
S.S. OS
90. 04 ISO.
92. OS 184
94. 10 18.S.
96. 32 192.
95. 56 197.
100. SS
00 j$37.5.
28 378.
52 383.
OS 390.
20 398.
24 405.
36 413.
72 421.
32 430.
16 440.
08 450.
10 460.
32 470.
64 481.
12 492.
201. 76
00
20
SO
20
00
60
40
80
80
40
20
40
SO
60
SO
504 40
$750.
756.
767.
780.
790.
Sil.
826.
843.
861.
880.
900.
920.
941.
963.
985.
Percent
0. 00
1. 71
2. 33
2. 67
3. 00
3. 10
3. 28
3. 39
3. 50
3. 60
3. 69
3. 77
3. S3
3.89
3. 94
00
40
60
40
00
20
80
60
60
SO
40
SO
60
20
60
1, OOS. SO
(3) On current
redemption
value from
beginning of
each half-year
period ' to
maturity
10, OSS
Percent
3 3.
33.
33.
3 4.
34.
* 4.
.59
. 72
.76
.83
.93
. 11
3.99
1 3-nionlh period in thc case of the 7i^-ycar to 7-year and 0-montli period.
2 Month, day, and year on whicli issues of Jnne 1, l'.i03, enter each period. For subscfinnnt issue months add the appropriate number of months.
3 Yield from beginning of each period to maturity at maturiiy value prior to llie December 1, 1905, revision.
* Yield from beginning ofcach period lo malnrily al maturity value prior lo the June 1, 1908, revision.
' Maturity value improved by the revision of June 1, I'JOS.
TABLE 59
BONDS BEARING ISSUE DATES FROM DECEMBER 1, 1963, THROUGH MAY 1, 1964
I s s u e price
Denomination
Period after i.ssue date
$18. 75 $ 3 7 . 5 0 $ 5 6 . 2 5
25.00
50. 00
75.00
$75.00
100.00
$150.00 $375.00
200. 00
500.00
$750. 00
1, 000. 00
$7, 500
10, 000
(2) On
(3) On
purchase current reprice from demplion
issue dale value from
to begi 1- beginning
of each halfning 0
each ha f- year period i
year period' to malurity
1) Redemi )lion value during each half-year pe riod
(values increase 01 lirst day of period .sliowi
)
F i r s t H year
2 (12/1/63) $18. 75 $37. 50 $56. 25 $7.5. 00 $ 1 5 0 . 0 0 $37.5. 00 $750. 00
H t o l.ycar
(0/1/64)
7.5. 64
37. 82
151. 28
750. 40
378. 20
IS. 91.
5(3. 73
1 t o I H venrs
(12/1/04)
19. 19
38. 3S
70. 70
153. 52 3 8 3 . 8 1
707. 6 3
57. 57
19. 51
39. 02 SS. 53 7,8. 04
I H to 2 vcar.s
(0/1/6.5)
390. 20
150. OS
780. 40
2to2Hyears....(12/l/().5)
79. GO 159. 20 398. OJ
796. 00
19. ',)0
3'.). SO 59. 70
162. 32 405. SO
20. 2.)
2H t o :•; y e a r s
(0/1/60)
40. SS
S l . 16
00. 87
811. 60
3 t o 3H' ve.nrs
(12/1/00)
82. 72
827. 20
20. GS
62. 04
41. 30
10.5. 44
413. 03
21. 10 42. 20
84. 40
844. 00
3H t o 4 v e a r s
(0/1/07)
168. SO 422. 03
63. 30
4 t o 4H y e a r s . . . . (12/1/07)
04. GS
80. 24
802. 40
21. 5:3
43. 12
172. 48
431. 20
882. 00
22. 05 4 4 10 0(3. 15 SS. 20
4H to 5 vears
(6/1/6S)
176. 40 -441. 0 3
22. 54
5 t o 5H y e a r s . . . . (12/1/OS)
901. GO
450. 80
45. 08 07. 62 90. 16 ISO. 32
S H t o 6 years
(6/1/61)
23. 05
922. 00
184 40
461.03
46. 10 69. 15 92. 20
9 4 32
47. 10 70. 74
6 t o 6H vears
(12/1/69)
23. 58
471. 60
188. 64
943. 20
72. 39
90. 52
482. 60
6H t o 7 v e a r s
((5/1/70)
193. 04
9G5. 20
2 4 1 .-i 48. 20
197. 52 493. 80
987. 60
49. 38
7 t o 7H vears
(12/1/70)
7 4 07
2 4 69
98. 76
7H y e a r s t o 7 y e a r s
202. 16 50.5. 4 3 1, 010. 80
.and 9 m o n t l i s . . (6/1/71)
25. 27
SO. 54 7 5 . 8 1 1 0 1 . 0 8
M A T U R I T Y VALUE
(7 y e a r s a n d 9
m o n t h s from i s s u e
51.32
25.66
205.28
date)^
(9/1/71)
7 6 . 9 8 102. 64
513.20 1,026.40
Approximate investment yicia
$7, 500
7,504
7,076
7,804
7,960
8, 116
S, 272
8,440
8, 624
8,820
9,016
9, 220
9, 432
9, 652
9,876
Percen
0.03
1.71
2.33
2.67
3.03
3. 18
3. 29
3. 40
3. .52
3.64
3.72
3.79
3.86
3. 92
3.97
10, 108
4.02
10, 264
4.09
Percent
33.75
3 3.89
3 3. 96
3401
* 4. 41
* 4. 45
* 4. 52
M . 57
M . GO
4 72
4 77
4 82
4 89
4 98
5. 20
' ,'5-moiilli period in the case of the 7!,^-year lo 7-vcar and 9-) lonth period.
2 Month, day, and year on whicii issues of Deceinber 1, 1963 enter each period. For snlisefiuciit issue inonths add thc appropriate number of months.
3 ^•i^•Ul from l.)('.gimiing ofcach period to malnrily al malm-: Ly value prior lo the December 1, 1905,
• Yield from beginning ofcach period lo malurity al maliiri [y value prior lo the June 1, 190S, revisit
» Maturity value improved by the revision of June l, 1968.
6. 22
193
EXHIBITS
TABLE 60
BONDS BEARING ISSUE DATES FROM JUNE 1 THROUGH NOVEMBER 1. 1964
I s s u e price
$18.75
25.00
$37.50
50.00
$56 25 $75. 00 $ 1 5 0 . 0 0 $375. 00
$750.00
200. 00
7 5 . 0 0 100. 00
500. 00 1, 000. 00
$7, 500
10, 000
(2) On
(3) On
purchase current reprice from demption
issue date value from
lo begin- beginning
ning of of each halfeach half- year period'
year period' to maturity
1) Redemption values during each half-year period '
(values increase oi first day of period shown)
Period after issue dato
Approxim Uc iiivcstment yield
Percent
First H y e a r
••^(6/1/64) $18. 75 $37. 50 $56. 25 $7,5. 00 $150. 00 $37.5. 00
0. 00
$7, 500
$750. 00
H to 1 year
(12/1/64)
1.71
7, 564
750. 40
56. 73
IS. 91 37.'82
37S. 20
151. 2S
75. 64
1 t o 1>^ y e a r s
(6/1/65)
767. 60
153. 52 383. SO
57. 57
19. 19
2. 33
7, 676
3S. 38
76. 76
19. 51 39. 02
2. 67
I H to 2 years
(12/1/6.5)
7,804
780. 40
ISO. OS 390. 20
78. 04
58. 53
3.02
7, 964
2 to 2H y e a r s
(6/1/66)
790. 40
59. 73
19. 91 39. 82
398. 20
159. 28
79. 64
2H t o 3 y e a r s . . . . (12/1/66)
20. 30
812. 00
102. 40
60. 90
40. 60
8, 120
406. 00
81. 20
3. 20
62. 07
3 t o 3H y e a r s
(6/1/67)
827. 60
16.5. 52 413. 80
41. 38
3. 31
8, 276
82. 76
20.69
21. 12 42. 24
3H t o 4 y e a r s
(12/1/67)
844. 80
422. 40
3. 43
63. 36 84. 48
8, 448
168. 96
172. 72 4 3 1 . 8 0
21. 59
863. 60
4 to 4H y e a r s
(6/1/68)
3. 56
8, 636
86. 36
6 4 77
43. 18
22. OS 4 4 l e
3.67
8, .S32
441. 60
4H t o 5 y e a r s
(12/1,/6S)
883. 20
176. 64
66. 24
88. 32
9, 032
22. 58 4,5. 16
5 to SH y e a r s
(6/1/69)
903. 20
67. 74
3. 75
451. 60
180. G4
90. 32
3. 82
923. 60
23. 09
r>Y. t o 6 y e a r s
(12/1/69)
9, 236
1 8 4 72 461. SO
92. 36
46. 18 69. 27
23. 62 47. 24
3. 89
9 4 4 SO
472. 40
6 t o 6H y e a r s
(6/1/70)
9, 448
70. SG 94. 48
188. 96
3.94
72. 51 96. 68
48.34
2 4 17
()H t o 7 y e . a r s . . . . (12/1/70)
9, 668
966. SO
193. 36 48.3. 40
7 t o 7H y e a r s
(6/1/71)
989. 60
197. 92 4 9 4 SO
4 00
9,896
2 4 74 49. 48
7 4 22 98. 96
7H y e a r s t o 7 y e a r s a n d 9
4 05
50e. 40 1, 012. SO 10, 128
202. 56
50.64
25.32
nionths
(12/1/71)
7 5 . 9 6 101. 28
M A T U R I T Y VALUE
(7 y e a r s a n d 9
m o n t h s from i s s u e
4.12
10, 288
5 1 4 . 4 0 1, 028. 80
51.44
25.72
date)'
(3/1/72)
205.76
7 7 . 1 6 102. 88
' 3-inonth period in tlie case of the 7K'-ycar to 7-year and 9-montli [icriod.
: .Month, day, and year on which issuesof June 1,1964, cuter each period. For subseciuent issue months add the appropriate nuniber oi
3 Yield from beginning of each period lo maturity at maturity value prior to thc December 1, 1905, revision.
< Yield from beginning of each period to maturity at maturiiy value prior to the June 1, 1908, revision.
5 Maturity value improved by thc revision of June 1, 1908.
Percent
3 3. 75
3 3. 89
3 3. 96
4 4 41
* 4. 43
' 4. 48
* 4. 55
M . 60
4 72
4 75
4 79
4 85
4 93
,5.03
5.25
6. 37
TABLE 61
BONDS BEARING ISSUE DATES FROM DECEMBER 1, 1964, THROUGH MAY 1,
I s s u e price
$750. 00
$18. 75 $37. 50 $56. 25 $ 7 5 . 0 0 $150. 00 $ 3 7 5 . 0 0
200. 00
500. 00 1, 000. 00
25.00
50.00
7 5 . 0 0 100. 00
Period after issue date
$7, 500
10,000
(2) On
purchase
price from
issue date
to beginning of
each halfyear period'
1) Rcdcmi lion value during each half-year pc •iod'
first day of icriod showi
(values
)
F i r s t H y e a r — . 2 ( 1 2 / 1 / 6 4 ) $18. 75 $37. 50 $56. 25 $7.5. 00 $150. 00 $37,3. 00 $750. 00
756. 40
37. S2
75.64
I S L 28 378. 20
56. 73
18.91
H to 1 y e a r
(6/1/6,5)
767. 60
153. 52
57. 57
383. SO
76.76
1 t o I H y e a r s . . . . (12/1/6.5)
38. 3S
19. 19
780. 80
78.08
156. 16 390. 40
39.04
19. 52
58. 56
I H to 2 y e a r s
((3/1/66)
19.92
796. 80
398. 40
.59. 76
39. 84
2 to 2H y e a r s . . . - ( 1 2 / 1 / 6 6 )
79. GS
1,59. 36
812. 40
60. 93 8 1 . 2 4
162. 4S 4(36. 20
2H to 3 year.s
(6/1/67)
20. 31 40. 62
4 1 4 20
828. 40
62. 13 8 2 . 8 4
20. 71 41. 42
3 to 3H y e a n s . . . . (12/1/67)
165. 68
42.3. 00
846. 00
169. 20
63. 45 8 4 GO
2 L 15 4 2 . 3 0
3H to 4 y e a r s
(6/1/68)
432. 20
864. 40
172. 88
43. 22 6 4 S3 8 6 . 4 4
21.61
4 to 4H y e a r s
(12/1/68)
442. 20
8 8 4 40
88.44
17(3. 88
22. 11 4 4 22
66.33
4H to 5 y e a r s
(6/1/69)
452. 20
9 0 4 40
90.44
180. 88
22. 61
45. 22
67.83
5 to SH y e a r s
(12/1/69)
92.52
925. 20
40. 2G
18,5. 04 462. .bo
69.39
23. 13
SH to 6 y e a r s
((3/1/70)
946. 80
189. 36 473./40
47. 34 71. 01 9 4 68
6 to 6 H y e a r s . _ . _ (12/1/70)
23. 67
4 8 4 40
968. 80
72. 66
96.88
193. 76
2 4 22
48. 44
GH to 7 y e a r s
(6/1/71)
991. 60
7 4 37
198. 32 495. 80
7 t o 7H y e a r s . . . . (12/1/71)
99. 16
2 4 79
49.58
7H y e a r s t o 7 y e a r s a n d
507. 40 1, 0 1 4 SO
202. 96
76. 11 101. 4S
50. 74
25.37
9 months
(6/1/72)
M A T U R I T Y VALUE
(7 years and 9
m o n t h s from i s s u e
date)5
(9/1/72)
51.5. 60 1 , 0 3 1 . 2 0
77. 34 lOo. 12
206. 24
2,5. 78
51. ,56
' 3-inonlh period in the case of thc 7JC.-ycar lo 7-ycar and 9-nionlh period.
2 Month, day, and year on which issues of December 1, 1904, enter each period. For subsequent issue n
3 Yield from beginning ofcach period to maturity at maturity value prior to the December 1, 1905, rev
* Yield from beginning of each period lo maturity at maturity value prior to thc June 1, 1908, revision,
»Maturiiy valuo iinproved by the revision of June 1, 1908.
ment yield
$7, 500
7, 504
7,676
7, ,S08
7, 968
8, 124
8, 284
8,460
8, 644
8, 844
9,044
9, 252
9,468
9, 688
9,916
Percent
0.00
1.71
2. 33
2. 70
3.05
3. 22
3.34
3.47
3. 58
3. 70
3. 78
3.85
,3.92
3.98
4 03
10, 148
4 07
10, 312
4 15
(3) On
current redemption
value from
beginning
ofcach halfyear period'
lo maturity
Percent
3 3. 75
3 3.89
* 4 36
* 4. 43
M . 46
M . 51
M . 57
4 71
4 76
4 78
4 83
4 88
4 94
5.06
5.29
6.52
194
19 6'8 REPORT OF T H E SECRETARY OF T H E
TREASURY
TABLE 62
BONDS BEARING ISSUE DATES FROM JUNE 1 THROUGH NOVEMBER 1. 1965
Issue price
Denomination.
$18. 75 $37. 50 $56. 25 $75. 00 $150.00 $375. 00 $750.00
25.00 50.00 75.00 100.00 200. 00 500.00 [, 000. 00
$7, 500
10, 000
(2) On
(3) On
purchase current reprice from demption
issue date value from
to begin- beginning
of each halfyear period'
to malurity
Period after issue date
First H ye.ar
2(6/1/6,5)
H to 1 year
(12/1/65)
1 to IH years
(6/1/66)
IH2 to 2 years
(12/1/66)
2 to 2H vears
(6/1/67)
2H to 3 vears
(12/1/67)
3 to 3H years
(6/1/6.8)
3H to 4 y e a r s . . . . (12/1/6S)
4 to 4H2 years
(6/1/69)
4H to 5 y e a r s . . . . (12/1/69)
5 to SH years
(6/1/70)
SH to 6 vears
(12/1/70)
6 to 6H2 years
(6/1/71)
f3H to 7 vears
(12/1/71)
7 to 7H years
(6/1/72)
7H years to 7 years and
9 months
(12/1/72)
MATURITY VALUE
(7 years and 9
months from issue
date)'^
(3/1/73)
Approximate investment yield
1 8 . 7 5 $37. 50
1,8. 91 37. 82
19. 20
38. 40
19. 53 39. )G
39. SG
19. 93
20. 32
40. 54
20. 73 41. - 6
42. 34
21. 17
21. 35
43. ,'10
22. .4
4 4 28
22. 55
45. 30
46. :;6
2.3. 8
47. 42
23. 71
48. 52
24. 26
49.68
24. 84
25.42
50.84
25.84
51.68
$50. 25 $7.5. 00 $150. (30 i$375. 00 $750. 00 $7, 500
.5G. 73 7.5. 04 151. 28 378. 20 756. 40 7, 5G4
7,680
768. 00
57. GO 76. SO 153.00 384 00
7,812
781. 20
58. 59 7S. 12 1,50. 24 390. GO
7,972
797. 20
79. 72 159. 44 398. GO
59. 79
812.80
162. 56 406. 40
GO. 90 81.28
8, 128
829. 20
S, 292
02. 19 82. 92 165. S4 414 60
03. 51 84. GS 169. 36 423. 40 S4G. SO 8,468
04. 95 SG. 60 17,3. 20 433. 00 SGG. 00 8,660
GG. 42 SS. 56 177. 12 442. 80 885. GO 8, 856
07. 95 90. 60 181.20 453. 00 906. 00 9,060
927. 20
9, 272
09. 54 92. 72 18.5. 44 403. GO
948. 40
189. 68 474 20
9, 484
71. 13 94 84
72. 78 97. 04 194 08 485. 20 970. 40 9, 704
993. 60
9,936
74 52 99. 30 19S. 72 496. SO
76.26 101. GS 203. 36
508. 40 1,010.80
1, 033. 60
10, 168
Percent
.0. 00
1.71
2.39
2.74
3.08
3. 24
3. 37
3.50
3.63
3. 73
3. S2
3.89
3.95
4 00
4. 06
Percent
3 3 . 75
< 4 29
M . 38
< 4 45
• 4 49
M . 54
4 09
4 75
4 77
4 81
4 85
4 89
4 98
5. 11
5.33
4 10
6.66
10, 336
' 3-monlh period in the case of thc 7 J.'j-year to 7-year and 9-monlli period.
• Month, day, and year on which issues of June I, 1905, enter each period. For subseciuent issuo months add thc appropriate number of months.
' Yield from beginning of each period lo maturiiy at maturity value prior to the December 1, 1965, revision.
< Vield from beginning of each jjcriod lo maturity at maturity value prior to the June 1,1908, revision.
5 Maturiiy valueimproved by ihcrcvisionof June 1,1908.
TABLE 63
BONDS BEARING ISSUE DATES FROM DECEMBER
Issueprice
Denomination.
1965. THROUGH MAY 1, 1966
$18.75 $37.50 $56.25 $75.00 $150.00 $375.00 $750.00
25.00 50.00 75.00 100.00 200.00 500.00 1,000.00
$7, 500
10, 000
Approximate invcstment yield
(2) On
purchase
price from
issue date
to beginning of
each halfyear period
Period after issue dato
1
First H vear
'(12/1/6,5) ,18. 75 $37. SO $56. 25 $7,5. 00 5150. 00
H to 1 year
(6/1/6(3) 1$. 96 37. 92 56. SS 7.5. S4 151.68
1 to IH years
(12/1/6(3) 19. 32 38. 64 57. 96 77. 28 154. 56
IH to 2 3-ears
(6/1/67) 19. 70 39. 40 59. 10 78. SO 157. 60
2 to 2H vears
(12/1/67) 20. 10 40. 20 60. 30 SO. '.0 160. SO
2H to 3 years
(6/1/6S) 20. 52 41. 04 61. 50 82. OS 1G4 10
3 to 3H years
(12/1/(38) 20. 96 41. 92 62. 88 83. 84 167. 68
3H to 4 years
(6/1/G9) 21. 42 42. 84 64. 26 8.5. '58 171. 36
4 to 4H years
(12/1/69) 21. 89 43. 78 6.5. 137 87. 56 17.5. 12
4H to 5 vears
(6/1/70) 22. 37 44. 74 67. 11 89. 48 178. 96
5 to SH years
(12/1/70) 22. 86 4.5. 72 6S. 58 9 1 . 4 4 182. SS
5H to Oyears
(6/1/71) 23. 36 40. 72 70. OS 93. ' A 186. 88
6 to 6H years
(12/1/71) 23. SS 47. 76 71. 134 95. 52 191. 04
6H to 7 years
(6/1/72) 24. 42 48. 84 73. 26 97. 6S 195. 36
MATURITY VALUE (7
years from issue
date)3
(12/1/72) 2 5 . 1 2 50. 24 7 5 . 3 6 100. 48
Percent
$375. 00
379. 20
380. 40
394 00
402. 00
410. 40
419. 20
428. 40
437. SO
447. 40
457. 20
467. 20
477. GO
488. 40
$750. 00
758. 40
772. SO
788. 00
804. 00
820. 80
838. 40
856. 80
S75. 60
894 SO
914 40
934 40
955. 20
976. SO
1,004.80
$7, 500
7, .584
7, 728
7, 880
8,040
8, 208
8, 384
8, 568
8,756
8, 948
9, 144
9,344
9, 552
9,768
0.00
2.24
3. 02
3.32
3. 51
.3. 64
3.75
3.84
3.91
3. 96
4 00
4 04
4 07
(3) On
current redemption
value from
beginning
of each halfyear period
to malurity
Percent
2 4. 15
2 4 30
2 4. 3 4
2 4 38
2 4 41
4. 11
10, 048
' Month, day, and year on whicii issues of December 1,1905, enter each period. For subseciuent issue months add the appropriate nuinber of months.
• Yield from beginning ofcach period to malurity al maturity value prior to the June 1, 1908, revision.
> Maturity value improved by the revision of June 1,1908.
4.55
4.58
4.60
4 64.
4 69
4 77
4.90
5. 13
5.73
195
EXHIBITS
TABLE 64
BONDS BEARING ISSUE DATES FROM JUNE 1 THROUGH NOVEMBER 1, 1966
Issue price
Denomination..
$18.75 '$37.50 '$56.25 '$75.00 '$150.00 '$375.00 | $750.00
25.00
50.00 j 75.00 -IOO. 00 j 200.00 I 500.00 ,1,000.00
$7, 500
10,000
Period after Issue d.it.e
1 —
First H vear
'(6/1/66) $18. 75 337. 50 $56. 25 $75. 00 $1.50. 00 .$37,5. 00 $750. 00 $7, 500
7,584
H t o 1 year
(12/1/66)
758. 40
151. OS 379. 20
37.92 56. 88 7.5. 84
IS 96
7, 728
772. 80
19. 32
1 to IH years
(6/1/67)
77. 28 154 56 386. 40
38. 64 57. 96
7,880
788. 00
157. 60 394. 00
19. 70
IH to 2 v e a r s . . . . (12/1/67)
39. 40 59. 10 78. SO
IGO. 80 I 402. 00 804 00
8, 040
SO. 40
2 to 2H years
(6/1/68)
40. 20 60. 30
20 10
820. SO
164 16 410. 40
8,208
82. OS
41. 04 61. ,50
20 52
2H to 3 y e a r s . . . . (12/1/68)
838. 40
167. 68 419. 20
S, 384
20. 96
41. 92 62. 88 S3. 84
3 to 3H years
(6/1/69)
856. 80
171. 36 428. 40
8, 568
21. 42
42. 84 64. 26 S.5. 68
3H to 4 v e a r s . . - . (12/1/69)
875. 60
175. 12 437. SO
8,756
21. Si)
4 to 4H years
(6/1/70)
87. 56
43. 78 6-5. 67
894. SO
178. 96 447. 40
22. 37
8, 948
4H to 5 y e a r s . . . . (12/1/70)
44 74 67. 11 89. 48
914 40
182. SS 457. 20
9, 144
22. 86
i)l. 44
5 to 5Y2 years
(6/1/71)
45. 72 6 8 . 5 8
934 40
186. 88 467. 20
9, 344
93. 44
23. 36
5H to 6 y e a r s . - . . (12/J/7I)
46. 72 7 0 . 0 8
95.5. 20
9, 552
9.3. 52 191. 04 477. 60
47. 76 7 1 . 6 4
23. SS
6 to 6H years
(6/1/72)
976. SO
195. 30 488. 40
9,768
48.84 73. 26
24. 42
97. 68
GH to 7 vears
(12/1/72)
MATURITY VALUE (7
years from issue
502.60 1,005.20
75.39 100.52
(iate)3
(6/1/73)
25. 13
(2) On
purchase
price from
issue date
to beginninc of
each halfyear period
(3) On
current reI demption
; value from
! beginning
of each halfperiod
to maturiiy
I
Percent
0. 00
2. 24
3! 02
3.32
3. 51
3. 64
3. 75
3.84
3. 91
3. 96
4. 00
4 04
4. 07
4 11
Percent
2 4 15
2 4. 30
2 4 34
2 4 38
4 52
4. 55
4. 59
4 62
4 65
4 71
4 79
4 93
5. 17
5.81
' Month, day, and year on which issuesof June 1,1900, enter each period. For sub.sequenl issue monlhs add thc appropriate numbor of months.
= Yield from begiiming of each period to maturity al maturity value prior lo the Jc-ie 1, 190S, revision.
3 Maturiiy value improved by the revision of June 1, 1908.
TABLE 65
BONDS BEARING ISSUE DATES FROM DECEMBER
I s s u e price
Denomination
$18.75
25.00
$37. 50 $56. 25 $ 7 5 . 0 0
75.00 100.00
50.00
THROUGH MAY 1, 1967
$ 1 5 0 . 0 0 .$375. 00 $750. 00
500. 00 1 , 0 0 0 . 0 0
200. 00
$7, 500
10, 000
$18. 75 $37. 50 $56. 25 $7,5. 00 $150. 00 $37,5. 00
37. 92 56. SS 7,5. 84
18.96
151. es 379. 20
1 5 4 56 386. 40
57. 96
77. 28
19. 32 3 8 . 6 4
157. GO 394. 00
19. 70 39. 40 59. 10 7S. 80
60. 30 SO. 40 160. SO 402. 00
20. 10 40. 20
41(3. 40
1G4 16
61. 56 82. OS
20. 52 41. 04
419. 20
41.92
167. GS
83. 84
62.88
20.96
21. 42
428. 40
171. 36
42. 84
6 4 26 85. GS
175. 12 437. SO
65. 67 87. 50
21.89
43.78
447. 40
44. 74
67. 11 8 9 . 4 8
22. 37
178. 96
457. 20
182. SS
22. 86
45. 72 68. SS 91. 44
467. 20
2.3. 36 40. 72 70. OS
93. 44
186.88
477. 60
191. 04
95. 52
47.76
71. 64
23. 88
2 4 42
4SS. 40
195. 36
73.26
97.68
48.84
25.14
50.28
75.42
100. 56
201.12
$750. 00
7,58. 40
772. SO
788. 00
S04. 00
820. 80
838. 40
850. 80
875. GO
8 9 4 SO
9 1 4 40
9 3 4 40
955. 20
970. SO
502. 80 1 , 0 0 5 . 6 0
Approximate investment yield
(2) On
purchase
price from
issue dale
to beginning of
each halfyear period
1) Redemption values during each lialf-ycar period
(values increase on first day of i eriod shown)
Period after issue dato
F i r s t H y e a r . . . .•(12/1/66)
H to 1 year
...(6/1/67)
1 t o I H y e a r s . .. . ( 1 2 / 1 / 6 7 )
iH to 2 y e a r s . . . . . ( 6 / 1 / 6 8 )
2 to 2H y e a r s . . ..(12/1/68)
2H t o 3 y e a r s . - - . - ( 6 / 1 / 6 9 )
3 t o 3H y e a r s . . . . ( 1 2 / 1 / 6 9 )
3H t o 4 y e a r s . . - . - ( 6 / 1 / 7 0 )
4 t o 4H y e a r s . . . . ( 1 2 / 1 / 7 0 )
4H to 5 y e a r s . . - - ( 6 / 1 / 7 1 )
5 to SH y e a r s . . .-(12/.1/71)
SH t o 6 y e a r s . . - . - ( 6 / 1 / 7 2 )
6 t o 6H y e a r s . . . . ( 1 2 / 1 / 7 2 ?
6H t o 7 y e a r s . - . - . ( 6 / 1 / 7 3 )
M A T U R I T Y VALUE ( 7
y e a r s from i s s u e
date)3
-(12/1/73)
1966,
$7, 500
7,584
7,728
7, SSO
8, 040
S, 208
8, 3S4
8, SGS
8, 750
S, 948
9, 144
9, 344
9, 552
9, 7GS
Percent
0. 00
. 2. 24
3. 02
,3. 32
3.51
3. 64
3. 75
3. 84
3. C^
3. 90
4 00
4. 04
4 07
4 11
10,056
4.23
(3) On
current redemplion
value from
beginnmg
ofcach halfvcar period
to malurity
Percent
2 4 15
2 4 30
2 4 34
4. 48
• 4.53
4. SG
4. 60
4. 63
4. 67
4. 72
4 81
4 96
5.21
5.90
' Month, day, and year on which issues of Dtccmber 1, 1900, enter each period. For subseriuent issue months add tha appropriate nuinber of months.
- Yield from beginning of each period to maturi'y at maturity value prior to the June 1, 1968, revision.
5 Malurity values iinproved by the revision of June 1, 1908.
196
19 6'8 REPORT OF T H E SECRETARY OF T H E TREASURY
TABLE 66
BONDS BEARING ISSUE DATES FROM JUNE 1 THROUGH NOVEMBER 1, 1967
I s s u e price
Denomination.
$18.75
25.00
$750.00
$37. 50 '$56. 25 $ 7 5 . 0 0 $1.50. 00 $ 3 7 5 . 0 0
5 0 . 0 0 1 7 5 . 0 0 100. 00
200. 00
500. 00 1, 000. 00
(1) Redemption values during each half-year period
(values increase on first day of period shown)
Period after issue date
-•(C/1/67)
F i r s t H yeni'
.(12/1/67)
H t o 1 year
1 t o I H y e a r s . . -- - ( 6 / 1 / 6 S )
I H t o 2 v e a r s . . . -(12/1/68)
2 t o 2H y e a r s . . . . - ( 6 / 1 / 6 9 )
2H t o 3 y e a r s . . . - ( 1 2 / 1 / 6 9 )
3 t o 3H y e a r s . . . - - - ( 6 / 1 / 7 0 )
3H t o 4 y e a r s . . . -(12/1/70)
4 t o 4H vears.-- -.(6/1/71)
4H t o 5 y e a r s . . . -(12/1/71)
5 t o SH y e a r s . . . - - ( 6 / 1 / 7 2 )
5H t o 6 y e a r s . . . - ( 1 2 / 7 7 2 )
6 to 6H y e a r s . . . --(0/1/73)
6H t o 7 v e a r s . . . -(12/1/73)
M A T U R I T Y VALUE ( 7
y e a r s from i s s u e
date)3
--(6/1/74)
$7, 500
10, 000
50.30
75.45
100.60
2 0 1 . 20
(2) On
purchase
price from
issue dale
to l)cginnilg of
eaci halfyear period
(3) On
current redemption
value from
beginmng
ofcach halfyear period
lo maturity
Percent
2 4 15
2 4 30
4 44
4 49
4 53
4 57
4 61
4 64
4 68
4 74
4 83
4 98
5. 25
5. 98
$750. 00
758. 40
772. SO
788. 00
8 0 4 00
820. 80
838. 40
856. 80
875. 60
8 9 4 80
9 1 4 40
9 3 4 40
955. 20
97G. SO
$7 500
7 ,584
7 728
7 880
8 040
8 208
S, 384
8 SGS
8, 750
8, 948
9, 144
9, 344
9 552
9 768
Percent
0.00
2. 24
3.02
3. 32
3. 51
3. 64
3.75
,3.84
.3.91
3. 96
4 00
4 04
4 07
4 11
5 0 3 . 00 1, 006. 00
10, 060
4.24
$1S. 75 .$37. 50 $56. 25 .$75. 00 $150. 00 $375. 00
379. 20
151. GS
7,5. 84
IS. 96 N37. 92
56. 88
57. 96
386. 40
1.54 50
77. 28
19. 32 38. 64
3 9 4 00
157. 60
19. 70 3i). 40 59. 10 7 8 . 8 0
20. 10 40. 20 GO. 30 SO. 40 IGO. 80 402. 00
410. 40
1 6 4 16
20. 52 41. 04 Gl. 56
82. OS
167. 68
419. 20
41. 92 62. 88 S3. 84
20. 90
171. .36 428. 40
21.42
42. 84 64. 26
S.5. 08
175. 12 437. SO
87. 56
21. 89
43. 78 65. 67
447. 40
67. 11 89. 48
22. 37
4 4 74
178. 96
182. 88 457. 20
22. 86 4,5. 72 68. 58 91. 44
467. 20
93. 44
186. SS
70. OS
23. 36 46. 72
191. 04 477. 60
9.5. 52
71. G4
23. 88
47.76
488. 40
2 4 42 4 8 . 8 4
195. 3G
73. 26 97. 68
25.15
Approximate invest-
• Month, day, and year on whicii issues of June 1, 1907, enter each period. For subsequent issue months add the appropriate number of months.
- Yield from beginning of each period to malnrily al maturity value prior to the June 1, 1908, revision.
3 Matur.ly value improved by the revision of June 1, 1908.
TABLE 67
BONDS BEARING ISSUE DATES FROM DECEMBER 1, 1967, THROUCH MAY 1, 1968
Issue price
Denomination.
$18.75 $37. 50 $56.25
25.00
50. 00 75.00
$750. 00
$75.00 $150. 00 $375. 00
100.00
200.00
500.00 1,000.00
$7, 500
10,000
Period after issue date
First Hye.ar
'(12/1/67) $18. 75 $37. 50 $56. 25 .$75. 00 $150. 00 $375. 00
37. 92
379. 20
H to 1 year
(6/1/68)
18. 96
56. SS 75. 84
151.68
19. 32
1 to IH years
(12/1/68)
57.96
77. 28 1 5 4 56 380. 40
38. 04
157. 60 391. 00
39. 40 59. 10 78. SO
19. 70
IH to 2 years
(6/1/69)
160. SO 402. 00
2 to 2H years...-(12/1/69) ,20. 10 40. 20 6(3. 30 8(3. 40
20. 52
2H to Syears
(6/1/70)
1 0 4 16
41. 04 61. 56 8 2 . 0 8
410.40
2 3. 90 41. 92
3 to 3H y e a r s . . . . (12/1/70)
02. 88
S3. 84
413.20
167.68
21. 42
171. 36
42. S4 64. 26 8 5 . 6 8
3H to 4 years
(6/1/71)
428. 40
21. 89
437. 80
4 to 4H years
(12/1/71)
43. 78 65. 67
87. ,56 175. 12
22. 37
447. 40
4H to 5 years
(6/1/72)
178.90
4 4 74 67. 11 8 3.48
5 to SH years...-(12/1/72)
22. 86 4 5 . 7 2
182. 88 457. 20
68. SS 9 1 . 44
SH to 6 years
(6/1/73)
2 3.30
4 3. 72 70. OS
IS 3. 88 467. 20
93. 44
71. 04 9-.. 52
47. 76
477. 60
23. SS
191.04
6 to6H years
(12/1/73)
2 4 42 48. 84 73. 26
6H to 7 years
(6/1/74)
195. 30
97. 68
488. 40
MATURITY VALUE
(7 years from issue
date)3
(12/1/74) 25.16
75.48 100.64
201.28
50.32
5 0 3 . 20
$750.
7,58.
772.
788.
804
820.
838.
856.
87,5.
894
914
934
955.
976.
00
40
SO
00
00
SO
40'
SO
GO
80
40
40
20
80
(2) On
purchase
price from
issue date
lo beginning of
each halfyear period
(3) On
current redemption
value from
beginning
jof each halfyear period
[to maturiiy
Percent
0.00
2. 24
3.02
3. 32
3. 51
3.64
3.75
3.84
3. 91
3.96
4 00
4 04
4 07
4 11
Percent
2 4 15
4 40
4 45
4 50
4 54
4 58
4 62
4 65
4 70
4 76
4 85
5.01
5.29
6.06
10, 064
> Month, day, and year on which issues of December 1, 1967, enter each period. For subsequent issue months add the appropriate n nber of monlhs.
2 Yield from beginning of each period to maturity at maturity value prior lo the June 1,1908, revision.
3 Malurity value improved by the revision of June 1,1908.
EXHIBITS
197
Exhibit 6.—Amendment, September 5, 1967, of Department Circular No. 750,
regulations governing payments by banks and other financial institutions in
connection with the redemption of United States savings bonds
TREASURY DEPARTMENT,
Washington, September 5,1967.
Section 321.2 of Departnient Circular No. 750, Revised, as amended, is further
amended by revision as follows:
Section 321.2. Procedure for qualifying as a paying agent.
(a) Application for qualification.—An eligible institution possessing ade(iuate
authority under its charter and desiring to qualify to make payments in connection with the redemption of United States Savings Bonds and the redemptionexchange of such bonds under the provisions of Department Circular No. 1036, as
amended (31 CFR Part 339), shall obtain from and file with the Federal Reserve bank of the district in which it is located ^ an application-agreemenit form ^
designed for that purpose. Through use of the form, the institution agrees to
be bound by and comply with these regulations, including all supplements and
amendments hereof and instructions issued hereunder. In addition, the terms
of any application-agreement filed hereafter and by reason of this paragraph,
include the provisions prescribed in section 202 of Executive Order No. 11246,
entitled "Equal Employment Opportunity" (3 CFR 167, 1965 Supplement). An
institution qualified prior hereto, whether under the revision or the original
circular, making payments in connection with the redemption or redemptionexchange of UJS. Savings Bonds, Avhich on or after November 30, 1966, entered
into a contract of deposit with the Treasury Department in accordance with
Treasury Department Circular No. 92 (Revised) or No. 176 (Revised) (31 CFR
Parts 203 or 202), need take no action with respect to its qualification hereunder.
Any other institution qualified prior hereto which desires to make payments
in connection with the redemption or redemption-exchange of U.S. Savings Bonds
on or after December 1, 1967, must signify its intent in writing to be bound
by and comply with the provisions of section 202 of the Order.
(b) Notice of qualification.—^Until such time as a notice of qualification is
issued by the Federal Reserve Bank, an institution shall not make any effort
to or perform any act as a paying agent of savings bonds, or advertise in any
manner that it is authorized to perform such acts, or that it has applied for
such qualification. Upon approval of the application-agreement, the Federal Reserve Bank will issue <a notice of qualification to the institution, whereupon
it will be authorized to redeem U.S. Savings Bonds as provided herein and it
will become subject to the provisions of Part II of Executive Order No. 11246.
The Federal Reserve Bank will notify the institution if the application-agreement
is not approved.
JOHN K . CARLOCK,
Fisoal Assistant Secretary.
^ Institutions in Puerto Rico, the Virgin Islands, and the Canal Zone sliall be considered
to be in tbe Second Federal Reserve District and shall make application to the Federal
Reserve Bank of New York. Institutions in Guam shall be considered to be in the Twelfth
Federal Reserve District and shall make application to the Federal Reserve Bank of
San Francisco.
2 Exhibit A of Department Circular 750, Rev. (31 CFR Part 321).
818-223—69
198
19 68 REPORT OF THE SECRETARY OF THE TREASURY
Exhibit 7.—^Third amendment, June 19, 1968, to Department Circular No. 905,
Fourth Revision, offering of United States savings bonds. Series H
TREASURY DEPARTMENT,
Washington, June 19,1968.
Treasury Department Circular No. 905, Fourth Revision, dated April 7, 1966,
as revised and amended (31 CFR Part 332), is hereby further amended and
revised as follows:
Sec. 332.1. Offering of bonds.—The Secretary of the Treasury hereby offers
for sale to the people of the United States, United States Savings Bonds of
Series H, hereinafter generally referred to as "Series H bonds" or "bonds." This
offering, which shall be effective June 1, 1968, will continue until terminated by
the Secretary of the Treasury.
Sec. 332.2. Description of bonds. * * *
(e) Interest (investment yield).—The interest on a Series H bond will be
paid semiannually by check drawn to the order of the registered owner or coowners, beginning iSix months from issue date. Interest payments will be on a
graduated scale, fixed to produce an investment yield of approximately 4.25
percent per annum compounded semiannually, if the bond is held to maturity; ^
but the yield will be less if the bond is redeemed prior to maturity. See table 1.
Interest will cease at maturity or, in the case of redemption before maturity,
at the end of the interest period next preceding the date of redemption, except
that if the date of redemption falls on an interest payment date, interest will
cease on that date.
(f) Stock for bonds issued on and after June 1, 1968.—Series H bond stock
in use prior to June 1, 1968, will be used for issue of bonds hereunder until such
time as new stock is printed and supplied to issuing agents. THE NEiW INTEREST RATE SHALL APPLY TO SUCH BONDS AS FULLY AS I F EXPRESSLY SET FORTH IN THE TEXT. The Treasury Department will issue interest checks for the bonds in the appropriate amounts as set forth in table 1.
Accordingly, it is hot necesisary for owners to exchange bonds on old stock
when the new stock becomes available but they may do so if they wish by presenting bonds issued on and after June 1, 196'8, on old stock to any Federal
Reserve Bank or Branch, or to the Treasurer of the United States, Securities,
Division, Washington, D.C. 20220.
Sec. 332.8. Extended term cmd improved yields on outstanding bonds. * * *
(b) Improved yields.^—The investment yield on outstanding bonds with issue dates of June 1, 1952, through May 1, 1968, is increased by 1/10 of 1 percent
per annum compounded semiannually, but only if the bonds are held to the
next maturity date. The increase for the remaining time to next maturity will
be computed from the beginning of the first interest period starting on or after
June 1, 1968. The investment yield for any presently authorized subsequent
extension period will 'be 4.25 percent per annum compounded semiannually if the
bonds are held to the maturity date for that period. Interim^ interest payments
remain unchanged. All increases will be reflected in the final interest check
for the particular maturity period involved.
JOHN K . CARLOCK,
Fiscal Assistant Secretary of the Treasury.
1 Under authority of Section 25, 73 S t a t 621 (81 U.S.C. 757c-l), the President of the
United States on May 31, 1968, concluded that with respect to Series H bonds It was
necessary in the national interest to exceed the maximum interest rate and investment
yield prescribed by Section 22 of the Second Liberty Bond Act, as amended (81 U.S.C. 757c).
2 See Sec. 332.8(b) and footnote 5 of Department Circular No. 905, Fourth Revision, as
amended (31 CFR Part 382), for earlier yields.
199
EXHIBITS
TABLES OF CHECKS ISSUED AND INVESTMENT YIELDS FOR UNITED STATES SAVINGS BONDS OF
SERIES H
Each table shows: (1) The amounts of interest check payments during the current maturity period and during any
authorized subsequent maturity period, on bonds bearing issue dates covered by the table; (2) for each maturity period
shown, the approximate investment yield on the face value from the beginning of such maturity period to each subsequent interest payment date; and (3) the approximate investment yield on the face value from each interest payment
date to next maturity. Yields are expressed in terms of rate percent per annum, compounded semiannually.
TABLE 1
BONDS BEARING ISSUE DATES BEGINNING JUNE 1, 1968
f Maturity value
Face value] Redemption value
[issue price
Period of lime bond is hold after issue dato
y year
1 year
VYz years
2 years
2Y2 years
3 years
SYz years
4 years
iYz years
5 years
5Y2 years
6 years
aYz years
7 years
7Yz years...
S years
SYz years
9 years
9Y2 years
10 years (maturity)
$500
500
500
$1, 000
1,000
1,000
$5, 000
5,000
5,000
$10,000
10,000
10, 000
(1) Amounts of interest choclis for each denomination
$5. 50
9.70
10.75
10.75
10.75
10.75
10.75
10.75
10. 75
10.75
10. 75
10.75
10.75
10.75
10.75
10.75
10.75
10.75
10.75
17.03
$11. 00
19. 4.0
21.50
21. 50
21.50
21. 50
21.50
21. 50
21. 50
21. 50
21.50
21. 50
21.50
21.50
21. 50
21.50
21.50
21.50
21.50
34.06
$55. 00
97.00
107. 50
107. 50
107. 50
107. 50
107. 50
107. 50
107. 50
107. 50
107. 50
107. 50
107. 50
107. 50
107. 50
107. 50
107. 50
107. 50
107. 50
170.30
$110.00
194. 00
215. 00
215. 00
215. 00
215. 00
215. 00
215. 00
215. 00
215. 00
215. 00
215. 00
215. 00
215. 00
215. 00
215. 00
215. 00
215. 00
215. 00
340. 60
(3) From each
(2) From issuo
interest payment
date to each
date to
interest payment
maturity
date
Percent
2.20
3.03
3.45
3.65
3.78
3.86
3.92
3.96
4.00
4.03
4.05
4.07
4.08
4. 10
4. 11
4 12
4. 13
4. 13
4. 14
4.25
4.38
4.42
4. 42
4.43
4.44
4.45
4.47
4 48
4.50
4.53
4.55
4.59
4.63
4.69
4 78
4 91
5. 12
5.54
6.81
1 At all times, except that bond Is not redeemable during first 6 months.
TABLE 2
BONDS BEARING ISSUE DATES FROM JUNE 1 THROUGH SEPTEMBER 1, 1952
1^
I /Issue price.
*ace vaiucjjjgjjg^pjjjjj^ ^^^^^j maturity value
$500
500
$1,000
1,000
$5, 000
5,000
$10, 000
10, 000
(1) Amounts of interest checks for each denomination
Period of time bond is held after inaturity date
>^ vear.
.J(8/l/62)
1 year
-(2/1/63)
1/2 years
(8/1/63)
2 years..
(2/1/64)
2>^ years..-.
(8/1/64)
3 years
(2/1/65)
3/2 years..
...(8/1/65)
4 years.
(2/1/66)
4>4 years
(8/1/66)
Syears
...(2/1/67)
5Yz years
(8/1/67)
6 years
(2/1/68)
6>^ years
-(8/1/68)
7 years.
(2/1/69)
7>^ years
(8/1/69)
Syears
...(2/1/70)
8/2 years
(8/1/70)
Oyears...
(2/1/71)
9/2 years
....(8/1/71)
10 years (extended maturity)*
(2/1/72)
EXTENDED MATURITY PERIOD
$9.37
9.37
9.37
9.37
9.37
9.37
9.37
9.37
9.55
9.55
9.55
10. 15
10.15
10. 15
10.60
10. 60
10.60
11.40
11.40
13.28
$18. 75
18.75
18.75
18.75
18.75
18.75
18.75
18.75
19.10
19.10
19. 10
20.30
20.30
20.30
21.20
21.20
21.20
22. 80
22.80
26.56
$93. 75
93.75
93.75
93.75
93.75
93.75
93.75
93.75
95.50
95.50
95. 50
101. 50
101. 50
101. 50
106. 00
106. 00
106. 00
114 00
114 00
132. 80
$187. 50
187. 50
187. 50
187. 50
187. 50
187. 50
187. 50
187. 50
191. 00
191. 00
191. 00
203. 00
203. 00
203. 00
212. 00
212. 00
212. 00
228. 00
228. 00
265. 60
(2) From begin- (3) From each
ning of extended interest payment
maturity period date to extended
to each interest
maturity
payment date
Percent
3.75
3.75
3.75
3.75
3.75
3.75
3.75
3.75
3.76
3.76
3.77
3.79
3.81
3.82
3.85
3.87
3.89
3.92
3.95
M.OO
Percent
23.75
23.75
23.75
23.75
23.75
23.75
2 3.75
3 4 15
3 4 19
3423
3 4 28
3431
4 44
4 51
4 57
4 66
4 80
4 93
5.31
• Montli, day, and year on which interest check is payable on i.ssues of June 1,1952. For subsequent issue months add the appropriate number of months.
' Yield on face valuo from each interest payment date to extended maturity based on the original schedule of interest checks prior to thc December 1, 1965
revision.
3 Yield on face value from each interest payment date to extended maturity based on thc schedule of interest checks prior to thc June 1, 1968 revision.
* 19 years and 8 months after issue date. Final check at extended maturiiy improved by revision of June 1,1968.
» Yield on purcliase price from issue date to extended maturity is 3.49 percent.
200
19 6 8 REPORT OF T H E SECRETARY OF T H E
TREASURY
TABLE 3
BONDS BEARING ISSUE DATES FROM OCTOBER
,-,_
J /Issueprice
I'ace valuejj^gj^j^p^j^i^ ,^^^ maturity value.
$500
500
$1, 000
1,000
1952 THROUGH MARCH 1, 1953
$5, 000
5, 000
$10, 000
10, 000
(2) From begin- (3) From each
ning of extended interest payment
malurity period dale lo extended
to each interest
maturity
payment date
(1) Amounts of interest checks for each denomination
Period of time bond is held after maturity dato
Yyenv
1 year
.
n^ years
2 years
2Yz vears
3 years
.
3}^ years
.
4 years
4>^ years
.
5 years
5>^ years
6 years
6/2 vears
7 years
.
7^^ years
8ye.ars
8H years.
Oyears
9/2 years
10 years (extended maturity)''
'(12/1/62)
(G/1/G.3)
(12/J/63)
(6/1/64)
(12/1/64)
(6/1/65)
(12/1/65)
(6/1/66)
(12/1/66)
(6/1/67)
(12/1/67)
(6/1/68)
(12/1/68)
(6/1/69)
(12/1/69)
(6/1/70)
(12/1/70)
(6/1/71)
(12/1/71)
(6/1/72)
EXTENDED MATURITY PERIOD
Percent
23.
2 3.
2 3. 75
2 3 . 75
2 3 . 75
2 3. 75
3 4. 15
3 4. IS
Percent
$9.37
9. 37
9. i7
9. 37
9. 37
9. 37
9.37
9. 55
9. 55
9. 55
10.05
10. )5
10. 05
10. 60
10. 60
10. 60
10. 60
11. 45
11. 45
13.62
$18. 75
18. 75
18. 75
18. 75
IS. 75
IS. 75
IS. 75
19. 10
19. 10
19. 10
20. 10
20. 10
20. 10
21.20
21.20
21. 20
21.20
22.90
22.90
27.24
$9,3. 75
93. 75
93. 75
93. 75
93.75
93.75
93. 75
9.5. 50
95. 50
95. 50
100. 50
100. 50
100. 50
106. 00
108. 00
106. 00
106. 00
114 50
114 50
136. 20
$187.
187.
187.
187.
187.
187.
187.
191.
191.
191.
201.
201.
201.
212.
212.
212.
212.
229.
229.
272.
50
50
50
50
50
50
50
00
00
00
00
00
00
00
00
00
00
00
00
40
3.75
3.75
3.75
3. 75
,3.75
3.75
3.75
3.76
3.76
3.77
3.79
3.81
3.82
3.85
3.87
3.89
3.91
3.94
3.97
5 4.03
22
.26
.29
.43
:. 50
:. 54
.61
.70
:. 86
.01
i. 45
•>
' Yield on face value from each intcre.<;l payment dale to exiended maturiiy based on the schedule of interest checks prior to the June 1, 1968 revision.
* 19 years and 8 months after issue date. Final chock at extended malurity improved by revision of June 1, 1968.
5 Yield from issuo date lo extended malurity dato on bonds dated: October 1 and November 1,1952 is 3.50 percent; December 1,1952 through March 1,1953
is 3.52 perccnl.
TABLE 4
BONDS BEARING ISSUE DATES FROM APRIL 1 THROUGH SEPTEMBER 1, 1953
Face vaiuef'^^"^ P*"'*^®
IRedemption and maturity value.
$500
500
$1,000
1,000
$5,000
5,000
$10,000
10,000
(1) Amounts of interest checks for each denomination
Period of time bond is held after maturity dale
EXTENDED MATURITY PERIOD
^^year
1 year
1/2 years
2 years
2/2 years
3 years
3>^ years
4 years
i y years
5 years...
5y years
6 years
aYz years
7 years
7K2 vears
S years
s y years
1
9 years
9)^2 years
.
10 years (extended maturity)^
'(6/1/63)
(12/1/63)
(6/1/64)
(12/1/64)
(6/1/65)
(12/1/65)
(6/1/66)
(12/1/66)
(6/1/67)
(12/1/67)
(6/1 /6S)
(12/1/68)
(6/1/69)
..(12/1/69)
(6/1/70)
(12/1/70)
(6/1/71)
(12/1/71)
(6/1/72)
(12/1/72)
(2) From beginning of extended
maturity period
to each interest
payment da
Percent
$9. 37
9. 37
9. 37
9. 37
9.37
9. 37
9. 55
9. 55
9. 55
10. 00
10.00
10.00
10. 50
10.50
10. 50
10. 50
11. 35
11. 35
11. 35
13.82
$18. 75
18.75
18. 75
IS. 75
18. 75
IS. 75
19. 10
19. 10
19. 10
20. 00
20. 00
20. 00
21.00
21.00
21.00
21. 00
22. 70
22. 70
22. 70
27.64
$93. 75
93. 75
93. 75
93.75
93.75
93.75
95.50
95.50
95.50
100. 00
100. 00
100. 00
105. 00
105. 00
105. 00
105. 00
113. 50
113. 50
113. 50
138.20
$187. 50
1S7. 50
187. 50
187. 50
1S7. 50
187. 50
191. 00
191. 00
191. 00
200. 00
200. 00
200. 00
210. 00
210. 00
210. 00
210. 00
227. 00
227. 00
227. 00
276.40
3. 75
3. 75
3. 75
3.75
.3. 75
3. 75
3.76
3.77
3.77
3. 79
,3.81
3.82
3.85
3.87
3. 89
3. 91
3.94
3.97
3.99
M . 05
| (3) From each
interest payment
dale to exiended
maturiiy
|
Percent
2 3. 75
23.75
2 3. 75
2 3. 75
2 3. 7 5
3 4 15
3 4 IS
3421
3 4 26
3 4 28
4 42
4 48
4 52
4 58
4 66
4 78
4 86
5.03
5.53
3 Yield on face value from each inlerest paymenl date lo extended niaturity based on the .schedule of interest checks prior to the June 1, 1968 revision.
' 19 years and 8 months after issue dale. Final chock at extended maturity improved by revision of Juno 1, 1968.
» Yield from issue dato lo exiended maturity date on bonds dated: April 1 and May 1, 1953 is 3.53 percent; June 1 through September 1,1953 is 3.54 percent.
201
EXHIBITS
TABLE 5
BONDS BEARING ISSUE DATES FROM OCTOBER
V i c P v q h i p / ^ ^ ^ " ^ P"^®
r a t e ^diue^i^jjgjgj^pjjQj^ ^^^^j maturity value.
$500
500
$1,000
1,000
1953 THROUGH MARCH 1, 1954
$.5, 000
5,000
$10, 000
10, 000
(1) Amounts of interest checks for each denomination
Period of time bond is held after maturity date
EXTENDED MATURITY PERIOD
>^year
1 year
IH years
2 years
2/2 years
3 years-.
.3^2 years
4 years
4'/2 years
Syears
5/2 years
6 years
6>^ years
7 years
7>^ years
Syears
8/2 years
9 years
9>^ years.
10 years (extended maturity)^
'(12/1/63)
(6/1/64)
(12/1/64)
(6/1/65)
(12/1/65)
(6/1/66)
(12/1/66)
(6/1/67)
(12/1/67)
(6/1/68)
(12/1/6S)
(6/1/69)
(12/1/69)
(6/1/70)
(12/1/70)
(6/1/71)
(12/1/71)
(6/1/72)
(12/1/72)
(6/1/73)
$9. 37
9. 37
9. 37
9. 37
9. 37
9. 55
9. 55
9. 55
9.95
9.95
9. 95
10. 45
10. 45
10.45
10. 45
10. 45
11. 45
11. 45
11. 45
14.23
$18. 75
18. 75
18. 75
18.75
18. 75
19. 10
19. 10
19. 10
19.90
19.90
19.90
20.90
20. 90
20. 90
20.90
20.90
22. 90
22.90
22. 90
28.46
$93. 75
93. 75
93. 75
93. 75
93. 75
9,5. 50
95. 50
95. 50
99. 50
99. 50
99. 50
104 50
104 50
104 50
104 50
104 50
114 50
114 50
114 50
142.30
$187. 50
187. 50
187. 50
187. 50
187. 50
191. 00
191.00
191. 00
199. 00
199. 00
199. 00
209. 00
209. 00
209. 00
209. 00
209. 00
229. 00
229. 00
229. 00
284.60
(2) From begin- (3) From each
ning of extended interest payment
malurity period date to extended
to each iiiterest
maturity
payment date
Percent
3. 75
3. 75
3. 7 5
,3. 7 5
3.75
3. 76
3. 77
3. 78
3. 80
3. 81
3. 8 3
3. 85
3. 88
3. 89
3.91
3.93
3.96
3.99
4 01
5 4.08
Percent
2 3. 75
2 3. 75
2 3. 75
2 3.
3 4. 15
3 4. 18
3 4. 21
3 4. 25
3 4 . 27
4. 41
46
50
. 55
. 62
. 71
. 85
.94
I. 1 3
' Month, day, and year on which interest check is payable on issues of October 1,1953. For subseriuent issue months add the appropriate number of months.
2 Yield on face value from oach interest paymenl date lo extended malurity based on the original schedule of interest checks prior lo the December 1, 1965
revision.
' Yield on face value from oach interest payment date lo extended maturiiy based on the schedule of interest checks prior to tho Juno 1, 1968 revision.
* 19 years and 8 monlhs after issue dato. Final check at extended maturity improved by revision of Juno 1, 1968.
» Yield from issue dale lo extended maturity date on bonds dated: October 1 and November 1,1953 is 3.55 percent; December 1,1953 through March 1,1954
is 3.57 percent.
TABLE 6
BONDS BEARING ISSUE DATES FROM APRIL 1 THROUGH SEPTEMBER :
F a c e v a l u p / ^ ^ ^ " ^ P"^®
'^ '^IRedemption and maturity value.
$500
500
$1, 000
1,000
$5, 000
5,000 I
$10, 000
10, 000
(1) Amounts of interest checks for each denominalion
Period of time bond is held after maturity d
y2year
lyear
1>^2 years
2 years
2y years
3 years
3/2 years
4 years
4/2 years
5 years
5K years
6 years
6K2 years
7 years..
7/2 years
Syears
8K2 years.
9 years
9/2 years
10 years (extended maturity)^
'(6/1/64)
(12/1/64)
(6/1/65)
(12/1/65)
(6/1/66)
(12/1/66)
(6/1/67)
(12/1/67)
(6/1/68)
(12/1/68)
(6/1/69)
(12/1/69)
(6/1/70)
(12/1/70)
(6/1/71)
(12/1/71)
(6/1/72)
(12/1/72)
(6/1/7.3)
(12/1/73)
EXTENDED MATURITY PERIOD
$9. 37
9. 37
9. 37
9. 37
9.55
9. 55
9. 55
9. 55
10. 15
10. 15
10. 15
10. 15
10. 60
10. 60
10.60
10. 60
11. 45
11.45
11. 45
14.54
$18. 75
18.75
18.75
18.75
19. 10
19. 10
19. 10
19. 10
20. 30
20. 30
20. 30
20. 30
21.20
21. 20
21. 20
21. 20
22.90
22.90
22. 90
29.08
$9,3. 75
93. 75
93. 75
93. 75
95. 50
9,5. 50
95. 50
95. 50
101. 50
101. 50
101. 50
101. 50
106. 00
106. 00
106. 00
106. 00
114 50
114 50
114 50
145.40
$187. 50
187. 50
187. 50
187. 50'
191. 00
191. 00
191. 00
191. 00
20,3. 00
203. 00
203. 00
203. 00
212. 00
212. 00
212. 00
212. 00
229. 00
229. 00
229. 00
290.80
(2) From begin- (3) From each
ning of extended interest payment
malurity period date to extended
lo each inlerest
malurity
payment date
Percent
3.75
3. 75
3. 75
3. 75
3. 76
3. 77
3.78
3.78
3. Sl
3. S3
,3. 85
3.87
3.89
3.92
3.93
3.95
3.98
4 01
4 03
54.11
Percent
2 3. 75
2 3 . 75
23.75
3 4 15
3 4 18
3 4 20
3 4 24
3428
4. 40
4 44
4.49
4 54
4 59
4 66
4 74
4 88
4 98
5. 19
5.82
' Month, day, and year on which interest check is payable on issues of April 1, 1954. For subsequent issue monlhs add the appropriate number of months.
' Yield on face^value from each interest payment date to extended maturity based on the original schedule of interest checks prior lo tho December 1,1955
revision.
3 Yield on face value from each interest payment date to extended maturiiy based on the schedule of interest checks prior to the June 1, 1968 revision.
* 19 years and 8 monlhs after issue dale. Final check al extended maturity improved by revision of June 1, 1968.
5 Yield from issue dale to exiended maturity date on bonds dated: April 1 and May 1, 1954 is 3.58 percent; Juno 1 through September 1,1954 is 3.59 percent.
202
19 68 REPORT OF T H E SECRETARY OF T H E TREASURY
TABLE 7
BONDS BEARING ISSUE DATES FROM OCTOBER 1, 1954 THROUGH MARCH 1, 1955
T7o^« „„i„-/Issue price.
-L
l a c e vaiue^j^g^gj^pjjjj^ ^^^^j maturity value.
$500
500
$1, 000
1,000
$5, 000
5,000
$10, 000
10, 000
(2) From begin- (3) From each
ning of extended interest payment
maturity period date to extended
to each interest
maturity
payment date
(1) Amounts of interest checks for each denomination
Period of time bond is held after maturity date
EXTENDED MATURITY PERIOD
Hyear..
.........'(12/1/64)
1 year
(6/1/65)
l'/2 years
(12/1/65)
2 years
i
(6/1/66)
2/2 y e a r s . .
(12/1/66)
3 years
(6/1/67)
3/2 y e a r s . .
L . . . . (12/1/67)
4 years.
(6/1/68)
4>^ y e a r s . .
.....(12/1/68)
5 years
(6/1/69)
5>^ years
(12/1/69)
6 years.
..(6/1/70)
6/2 years.
(12/1/70)
7 years....
(6/1/71)
7 ^ years
.....(12/1/71)
Syears..
(6/1/72)
8>^ years
(12/1/72)
Oyears..
(6/1/73)
9>^ years
(12/1/73)
10 years (extended maturity)^
(6/1/74)
$9.37
9.37
9.37
9.55
9.55
9.55
9.55
10. 10
10. 10
10. 10
10. 10
10. 55
10. 55'
10.55
10.55
10.55
11. 55
11.55
11.53'
14.96
$18. 75
18.75
18.75
19. 10
19. 10
19. 10
19. 10
20.20
20.20
20.20
20.20
21. 10
21. 10
21. 10
21. 10
21. 10
23. 10
23. 10
23. 10
29.92
$93. 75
93.75
93.75
95.50
95.50
95.50
95.50
101. 00
101. 00
101. 00
101. 00
105. 50
105. 50
105. 50
105. 50
105. 50
115.50
115. 50
115. 50
149.60
$187. 50
187. 50
187. 50
191. 00
191. 00
191. 00
191. 00
202. 00
202. 00
202. 00
202. 00
211. 00
211. 00
211. 00
211. 00
211. 00
231. 00
231. 00
231. 00
299. 20
Percent
3.75
3.75
3.75
3.77
3.78
3.78
3.79
3.82
3.84
3.86
3.87
3.90
3.92
3.94
3.96
3.97
4 00
4 03
4 06
6 4.14
Percent
2 3.75
23.75
3 4 15
3 4 17
3420
3423
3 4 27
4 39
4 43
4 47
4 53
4 57
4 62
4 69
4 80
4 95
5.06
5. 29
5.98
> Month, day, and year on which inlerest check is payable on issues of October 1,1954. For subsequent issue months add the appropriate number of months.
2 Yield on face value from each interest payment date to extended maturity based on tho original schedule of interest checks prior to the December 1,1965
revision.
3 Yield on face value from each interest payment date to extended malurity based on the schedule of inlerest checks prior to thc June 1,1968 revision.
< 19 years and 8 months after issue date. Final check al extended maturity improved by revision of Juue 1, 1968.
» Yield from issue date to extended maturiiy date on bonds dated: October 1 and November 1,1954 is 3.60 percent; December 1,1954 through March 1,1955
Is 3.62 percent.
TABLE 8
BONDS BEARING ISSUE DATES FROM APRIL 1 THROUGH SEPTEMBER 1, 1955
Faro vahip/^^S"^ P""'*^*^
"
maturity value.
i-ace valuejjjgjg^^p^j^j^ ^ ^ ^
$500
500
$1,000
1,000
$5, 000
5,000
$10,000
10, 000
(1) Amounts of interest checks for each denomination
Period of time bond is held after maturity date
EXTENDED MATURITY PERIOD
>^year
...:
1 year
1>^ years
.
2 years
.
2Yz years...
3 years
3/2 years
4 years
4Y2 years
5 years
5Yz years
Oyears
.
6M2 years
7 years
7/2 years
.
8 years
8/2 years
9 vears
9Yz years
10 years (extended maturity)*
'(6/1/65)
(12/1/65)
(6/1/66)
(12/1/66)
..(6/1/67)
(12/1/67)
(6/1/68)
(12/1/68)
(6/1/09)
(12/1/69)
(6/1/70)
(12/1/70)
(6/1/71)
(12/1/71)
(6/1/72)
(12/1V72)
...(6/1/73)
(12/1/73)
(6/1/74)
(12/1/74)
$9.37
9.37
9.55
9.55
9.55
9. 55
10. 05
10. 05
10.05
10.05
10. 05
10. 70
10. 70
10. 70
10.70
10.70
11.55
11..55
11.55
15.28
$18. 75
18. 75
19. 10
19. 10
19. 10
19. 10
20. 10
20. 10
20. 10
20. 10
20. 10
21. 40
21. 40
21.40
21.40
21.40
23. 10
23. 10
23. 10
30.56
$93. 75
93. 75
95. 50
95. 50
95. 50
95. 50
100. 50
100. 50
100. 50
100. 50
100. 50
107. 00
107. 00
107. 00
107. 00
107. 00
115. 50
115. 50
115. 50
152,80
$187.
187.
191.
191.
191.
191.
201.
201.
201.
201.
201.
214
214
214
214
214
231.
231.
231.
305.
50
50
00
00
00
00
00
00
00
00
00
00
00
00
00
00
00
00
00
60
(2) From begin- (3) From each
ning of extended inlerest payment
maturity period date to extended
to each interest
maturity
paymenl dale
Percent
3.75
3.76
3.77
3.78
3. 79
3.80
3.83
3.85
3.87
3.88
3.89
3. 92
3.95
3.97
3.98
4 00
4 03
4 06
4 08
54.16
Percent
2 3. 75
3 4 15
3 4 18
3 4 20
3 4 23
3 4 27
4 39
4 42
4 46
4 51
4 57
4 61
4 67
4 74
4 83
4 98
5. 10
5.36
6. 11
' Month, day, and year on which interest check is payable on issues of April l, 1955. For subsequent i.ssue months add the appropriate number of months.
2 Yield on face value from each interest payment date to extended maturity based on the original schedule of interest checks prior lo the December 1, 1965
3 Yield on face value from each inlerest payment date to extended malurity based on the schedule of interest checks prior to the June 1, 1968 revision.
< 19 years and 8 months after issue date. Final check at extended maturity improved by revision of June 1, 1968.
s Yield from issue date to exiended maturity date on bonds dated: April 1 and May 1, 1955 is 3.63 percent; June 1 through September 1, 1955 is 3.64 percent.
203
EXHIBITS
TABLE 9
BONDS BEARING ISSUE DATES FROM OCTOBER 1, 1955 THROUGH MARCH 1, 1956
Faceva>„e{'Sj;j;9e
on and maturity value.
$500
500
$1,000
1,000
$5, 000
5,000
$10,000
10, 000
(1) Amounts of interest checks for each denomination
Period of time bond is held after maturity date
EXTENDED MATURITY PERIOD
Kyear
"(12/1/65)
1 year
..(6/1/66)
vy years
(12/1/66)
2 years
..(6/1/67)
2/2 years
...(12/1/67)
3 years
..(6/1/68)
SYz years-.
(12/1/68)
4 years
(6/1/69)
4>^ years
(12/1/69)
5 years..
(6/1/70)
5M years
(12/1/70)
Oyears
...J
(6/1/71)
6'/2 years
(12/1/71)
7 years
(6/1/72)
7/2 years
(12/1/72)
Syears......^
(6/1/73)
S/2 years.
(12/1/73)
Oyears
(6/1/74)
9>^ years
..(12/1/74)
10 years (extended maturity)3
(6/1/75)
(2) From begin- (3) From each
ning of extended interest payment
maturity period date to extended
to each interest
maturity
payment date
Percent
$9. 37
9. 55
9.55
9. 55
9. 55
10. 00
10. 00
10. 00
10.00
10.00
10.65
10.65
10. 65
10. 65
10. 65
11.45
11.45
11. 45
11. 45
15.52
$18. 75
19. 10
19. 10
19. 10
19. 10
20.00
20.00
20.00
20.00
20.00
21.30
21.30
21.30
21.30
21.30
22. 90
22.90
22. 90
22. 90
31.04
$93. 75
95. 50
95. 50
95. 50
95.50
100. 00
100. 00
100. 00
100. 00
100. 00
106. 50
106. 50
106. 50
106. 50
106. 50
114 50
114 50
114 50
114 50
155.20
$187. 50
191. 00
191. 00
191. 00
191.00
200. 00
200. 00
200. 00
200. 00
200. 00
213. 00
213. 00
213. 00
213. 00
213. 00
229. 00
229. 00
229. 00
229. 00
310.40
3.75
3.78
3.80
3.80
3.81
3.84
3.86
3.87
3.89
3.90
3.93
3.95
3.97
3.99
4 01
4 04
4 06
4 09
4 11
«4.19
Percent
2 4 15
2 4 17
2 4 20
2423
2 4 26
4 38
4.42
4 45
4 50
4 56
4 59
4 64
4 70
4 78
4 89
4 97
5. 11
5.38
6.21
' Month, day, and year on which interest check is payable on issues of Octobor 1,1955. For subsequent issue monlhs add the appropriate number of monlhs.
2 Yield on face value from each interest payment dale to extended malurity based on the schedule of interest checks prior to the Juno 1, 1968 revision.
319 years and 8 monlhs after issuo dale. Final check at extended maturity improved by revision of June 1, 1968.
* Yield from issue date to extended maturity dale on bonds dated: October 1 and November 1,1955 is 3.66 percent; December 1,1955 through March 1,1958
Is 3.67 percent.
TABLE 10
BONDS BEARING ISSUE DATES FROM APRIL 1 THROUGH MAY 1, 1956
^
1 /Issue price
1 ace >a'"e|jjgjjgj^pjjjjj^ ^^^ maturity value.
$500
500
$1, 000
1,000
$5, 000
5,000
$10, 000
10, 000
(1) Amounts of interest checks for each denomination
Period of time bond is held after maturity date
Y2 year
1 year
1>^ years...
2 years
2>^ years
3 years
3>^ years
4 years
iYz years
5 years
bYz years
6 years
6/2 years
7 years
7/2 years
Syears
S/2 years
9 years
9>^ years
10 years (extended maturity)3
'(6/1/66)
(12/1/66)
(6/1/67)
(12/1/67)
..(6/1/68)
(12/1/68)
-(6/1/69)
(12/1/69)
(6/1/70)
(12/1/70)
(6/1/71)
(12/1/71)
(6/1/72)
(12/1/72)
(6/1/73)
(12/1/73)
(6/1/74)
(12/1/74)
(6/1/75)
(12/1/75)
EXTENDED MATURITY PERIOD
$10. 37
10.37
10. 37
10.37
10.37
10.37
10.37
10. 37
10. 37
10. 38
10.38
10.38
10.38
10.38
10.38
10.38
10.38
10.38
10.38
14.74
$20. 75
20.75
20.75
20.75
20.75
20. 75
20.75
20.75
20.75
20.75
20. 75
20.75
20. 75
20.75
20.75
20.75
20.75
20.75
20.75
29.48
$103. 75
103. 75
103. 75
103. 75
103. 75
103. 75
103. 75
103. 75
103. 75
103. 75
103. 75
103. 75
103. 75
103. 75
103. 75
103. 75
103. 75
103. 75
103. 75
147.40
$207. 50
207. 50
207. 50
207. 50
207. 50
207. 50
207. 50
207. 50
207. 50
207. 50
207. 50
207. 50
207. 50
207. 50
207. 50
207. 50
207. 50
207. 50
207. 50
294. 80
(2) From begin- (3) From each
ning of extended Interest payment
maturity period date to extended
maturity
to each interest
payment dale
Percent
4. 15
4. 15
4. 15
15
15
4 15
4 15
4 15
4 15
4 15
4 15
4 15
4 15
4 15
4 15
4 15
4 15
4 15
4 15
< 4.22
Percent
2 4 15
2 4 15
2 4 15
2 4 15
4 25
4 26
4.27
4 28
4 29
4 31
4 33
4 35
4 38
4 43
4 48
4 57
4 72
5.01
5.90
1 Month, day, and year on which interest check is payable on issues of April 1, 1956. For issues of May 1, 1056 add one month.
s Yield on face value from oach interest payment dale to exiended maturity based on the schedule of interest checks prior lo the June 1, 1968 revision.
319 years and 8 monlhs after issue dale. Final check at extended maturity improved by revision of June 1, 1968.
* Yield on purchase price from issue date to extended malurity is 3.68 perccnl.
204
19 68 REPORT OF T H E SECRETARY OF T H E
TREASURY
TABLE 11
BONDS BEARING ISSUE DATES FROM JUNE 1 THROUGH SEPTEMBER 1, 1956
i-ace vaiue|jj^jgj^p^jjjj^ ^^^^j ^^^turity value..
$500
500
$1,000
1,000
$5, 000
5, 000
$10, 000
10,000
(1) Amounts of interest checks for each denomination
Period of time bond is held after ma turity date
EXTENDED MATURITY PERIOD
face value
(2) From begin- (3) From oach
ning of extended interest payment
maturity period date to extended
maturity
lo each interest
payment date
Percent
...'(8/1/66)
.--(2/1/67)
- - - -..(8/1/67)
-..(2/1/68)
2Y2 years
. - - - ..-(8/1/68)
3 years
--- -..(2/1/69)
...(8/1/69)
3 >^ years
4 years
- - - ---(2/1/70)
-..(8/1/70)
iYz years
---(2/1/71)
5 years
...(8/1/71)
5>^ years
6 years
--- ---(2/1/72)
aYz years
. . . ---(S/1/72)
---(2/1/73)
7 years
7Yz years
. . . ...(8/1/73)
...(2/1/74)
8 years
---(S/1/74)
SYz years
...(2/1/75)
9 years
9Y2 years
. . . ---(S/1/75)
10 years (extended maturity)3.. ---(2/1/76)
H year
1 year
vy years
$10. 37
10.37
10. 37
10.37
10.37
1C.37
IC. 37
10.37
10. 37
IC. 38
1C.38
10. 38
10.38
1C.38
10.38
1C.3S
1C.38
1C.3S
1C.38
14.74
$20. 75
20. 75
20. 75
20.75
20. 75
2C.75
2C.75
20. 75
20. 75
20.75
20.75
20.75
20. 75
2C. 75
2C. 75
20. 75
2C.75
2C.75
20. 75
29.48
$102. 75
103. 75
102. 75
103. 75
103. 75
102.75
102.75
102. 75
103. 75
103. 75
103. 75
103. 75
103. 75
10,3. 75
103. 75
103. 75
103. 75
103. 75
103. 75
147. 40
$207. 50
207. 50
207. 50
207. 50
207. 50
207. 50
207. 50
207 50
207 50
207. 50
207. 50
207. 50
207. 50
207. 50
207. 50
207. 50
207. 50
207. 50
207. 50
294. 80
4. 15
4 15
4 15
4 15
4 15
4 15
4. 15
4 15
4 15
4 15
4 15
4 15
4 15
4 15
4 15
4 15
4 15
4 15
4 15
< 4.22
Percent
2 4 15
2 4 15
2 4 15
2 4 15
4 25
4 26
4 27
4 28
4 29
4 31
4 33
4 35
4 38
4 43
4 48
4 57
4 72
5.01
5. 90
' Month, day, and year on which interest check is payable on issues of June 1, 1956. For subsequent issue monlhs add the appropriate number of months.
2 Yield on face value from each interest payment dale to extended maturity based on the schedule of intcresi chocks prior lo the June 1, 1968 revision.
3 li) years and 8 monlhs after issue dale. Final chock at extended maturity improved by revision of June 1, 1968.
* Yield on purchase price from issue dale to extended maturity is 3.70 percent.
TABLE 12
BONDS BEARING ISSUE DATES FROM OCTOBER
Face valuc/'^®"® P"*^*^
rucc "'•'"^IRedemption and maturity value.
$500
500
$1,000
1,000
THROUGH NOVEMBER 1, 1956
$5, 000
5,000
$10,000
10, 000
(1) Amounts of interest checks for each denomination
Period of lime bond is held after maturity date
y2year
'(12/1/66)
1 year
.....(6/1/67)
1/2 years
....(12/1/67)
2 years.
(6/1/68)
2>^ years
(12/1/68)
3 years
-(6/1/69)
3/. years
....(12/1/69)
4 years
.
(6/1/70)
4/2 yeans
....(12/1/70)
5 years
(6/1/71)
5>^ years
.
(12/1/71)
6 years
(6/1/72)
6K2 years
(12/1/72)
7 years
.
(6/1/73)
7>^ years...
..(12/1/73)
Syears
(6/1/74)
8>^ years
(12/1/74)
Oyears
(6/1/75)
9K years....(12/1/75)
10 years (extended maturity)3
(6/1/76)
EXTENDED MATURITY PERIOD
$10. 37
10.37
10. 37
10. 37
10.37
10.37
10. 37
10.37
10.37
10. 38
10.38
10.38
10. 38
10.38
10.38
10.38
10.38
10. 38
10.38
15.09
$20. 75
20. 75
20.75
20.75
20. 75
20.75
20.75
20.75
20. 75
20. 75
20.75
20.75
20. 75
20.75
20. 75
20. 75
20.75
20. 75
20. 75
30.17
$103. 75
103. 75
103. 75
103. 75
103. 75
103. 75
103. 75
103. 75
103. 75
103. 75
103. 75
103. 75
103. 75
103. 75
103. 75
103. 75
103. 75
103. 75
103. 75
150.90
$207. 50
207. 50
207. 50
207. 50
207. 50
207. 50
207. 50
207. 50
207. 50
207. 50
207. 50
207. 50
207. 50
207. 50
207. 50
207. 50
207. 50
207. 50
207. 50
301.70
naturity period
lo each interest
payment date
Percent
4. 15
4 15
4 15
4 15
4 15
4 15
4 15
4 15
4 15
4 15
4 15
4 15
4 15
4 15
4 15
4 15
4 15
4 15
4 15
^ 4.23
' Month, day, and year on which interest check is payable on issues of October 1,1956. For issues of November 1, 1956 add one inonth.
= Yield on face value from each interest payment dale lo extended maturity based on thc schedule of interest checks prior lo the June 1,1
319 years and 8 monlhs after issue date. Final check al extended maturity improved by revision of June 1,1968.
* Yield on purchase price from issue date to extended maturiiy is 3.70 perccnl.
Percent
2 4 15
2 4 15
2 4 15
4 25
4 26
4 27
4 28
4 29
4 30
4 32
4 34
4 37
4. 40
4 45
4 51
4 61
4 76
5.08
6.03
205
EXHIBITS
TABLE 13
BONDS BEARING ISSUE DATES FROM DECEMBER 1, 1956 THROUGH JANUARY 1, 1957
Face valucl^-^^"^ P"^*^
(Redemption and maturity value.
$500
500
$1,000
1,000
$5,000
5,000
$10,000
10,000
(1) Amounts of interest checks for each denominalion
Period of time bond is held after maturity date
EXTENDED MATURITY PERIOD
/2year
1 year
1^2 y e a r s
2 years
2/2 y e a r s .
3 years
3/2 y e a r s
4 vears
4}^ y e a r s
5 ye.ars
5K2 y e a r s
6 years
6/2 y e a r s
7 years
7^2 y e a r s
S years
8/2 y e a r s
9 vears
..
9H y e a r s
10 years (extended maturity)3
'(2/1/67)
(S/1/67)
-(2/1/68)
(S/1/6S)
(2/1/69)
(8/1/69)
(2/1/70)
(8/1/70)
(2/1/71)
(S/1/71)
(2/1/72)
(8/1/72)
(2/1/73)
(8/1/73)
(2/1/74)
(8/1/74)
(2/1/75)
(S/1/75)
(2/1/76)
(8/1/76)
$10. 37
10. 37
10. 37
10. 37
10. 37
10. 37
10. 37
10. 37
10. 37
10.38
10. 38
10. 38
10. 38
10.38
10. 38
10.38
10.38
10. 38
10.38
15.09
$20. 75
20. 75
20.75
20. 75
20.75
20.75
20.75
20. 75
20.75
20.75
20. 75,
20.75
20. 75
20.75
20. 75
20.75
20.75
20. 75
20. 75
30.17
$103.
103.
103.
103.
103.
103.
103.
103.
103.
103.
103.
103.
103.
103.
103.
103.
103.
103.
103.
150.
75
75
75
75
75
75
75
75
75
75
75
75
75
75
75
75
75
75
75
90
$207. 50
207. 50
207. 50
207. 50
207. 50
207. 50
207. 50
207. 50
207. 50
207. 50
207. 50
207. 50
207. 50
207. 50
207. 50
207. 50
207. 50
207. 50
207. 50
301.70
(2) From beginning of extended
maturiiy period
to each interest
payment date
j (3) From each
inlerest payment
i date to extended
|
maturiiy
Percent
4 15
4 15
4 15
4 15
4 15
4 15
4 15
4 15
4 15
4 15
4 15
4 15
4 15
4 15
4 15
4 15
4 15
4 15
4 15
* 4.23
Percent
2 4 15
2 4 15
2 4 15
4 25
4 26
4 27
4 28
4 29
4 30
4 32
4 34
4 37
4 40
4 45
4 51
4 61
4 76
5.08
6.03
' Month, (lay, and year on which interest check is payable on issues of December 1, 1956. For issues of January 1, 1957 add ono month.
2 Vield on face valuo from each interest paymenl date to extended maturity based on the .schedule of inlerest checks prior to the Juno 1, 1968
3 19 yoars and 8 months after issue date. Final check al extended inaturity improved by revision of June 1, 1968.
< Yield on purchase price from issue date to extended malurity is 3.73 percent.
TABLE 14
BONDS BEARING ISSUE DATES FROM FEBRUARY
„
1 /Issueprice
l<ace valuejjjg^jgj^pjj^j^ ^ ^ ^ maturity value.
$500
500
$1,000
1,000
THROUGH MAY 1, 1957
$5, 000
5,000
$10,000
10,000
(1) Amounts of interest checks for each denomination
Period of time bond is held after maturity date
Hyear
1 year
i H yeans
2 years
2}^ y e a r s
3 years
3>^ y e a r s
4 years
4 ^ years
5 years
.5/2 y e a r s
6 years
6^"^ y e a r s
7 years
7/2 y e a r s
S years
SH y e a r s
9 vears
9H y e a r s
10 y e a r s ( e x t e n d e d m a t u r i t y ) 3
'(8/1/67)
(2/1/68)
(S/1./68)
(2/1/69)
(S/1/69)
(2/1/70)
(8/1/70)
(2/1/71)
(8/1/71)
(2/1/72)
(S/1/72)
(2/1/73)
(8/1/73)
(2/1/74)
(S/1/74)
(2/1/75)
(8/1/75)
(2/1/76)
(S/1/76)
(2/1/77)
E X T E N D E D M A T U R I T Y PERIOD
$10. 37
10.37
10. 37
10.37
10.37
10.37
10.37
10. 37
10.37
10. 38
10. 38
10.38
10. cS
10. 38
10.2 s
10.38
10.38
10.2 s
10. 38
15.44
$20. 75
20. 75
20.75
20. 75
20.75
20.75
20.75
20.75
20.75
20.75
20. 75
20. 75
20.75
20. 75
20. 75
20.75
20.75
20.75
20. 75
30.87
$103. 75
103. 75
103. 75
103. 75
103. 75
103. 75
103. 75
103. 75
103. 75
103. 75
103. 75
103. 75
103. 75
103. 75
103. 75
103. 75
103. 75
103. 75
103. 75
154.40
$207.
207.
207.
207.
207.
207.
207.
207.
207.
207.
207.
207.
207.
207.
207.
207.
207.
207.
207.
308.
(2) From begin- (3) From each
ning of extended interest payment
malurity period date lo extended
maturiiy
to each interest
payment dale
Percent
4. 15
4 15
4 15
4 15
4 15
4 15
4 15
4 15
4 15
4 15
4 15
4 15
4 15
4 15
4 15
4 15
4 15
4 15
4 15
* 4.23
2 4
4. 25
4. 26
4. 27
28
29
30
.31
.33
.30
.38
:. 4 2
:. 47
:. 5 4
.64
:. 81
. 15
. 17
I Month, day, and year on which interest check is payable on issues of February 1,1957. For subsequent issue monlhs add the appropriate number of monlhs.
• Yield on face value from each interest paymenl dale to extended maturiiy based on the schedule of interest checks prior to tlie June 1, 1968 revision.
3 20 years after issuo dale. Final check al extended maturity improved by revision of June 1, 1908.
• yield on purchase price from issue date to extended maturiiy is 3.88 percent.
206
19 68 REPORT OF THE SECRETARY OF T H E
TREASURY
TABLE 15
BONDS BEARING ISSUE DATES FROM JUNE 1 THROUGH NOVEMBER 1, 1957
Face value 1'^^"® p r i c e . . .
IRedemption and maturity value.
$500
500
$1,000
1,000
$5,000
5,000
$10, 000
10, 000
(1) Amounts of interest checks for each denomination
Period of time bond is held after maturity date
Hyear
lyear
vy years
.
2 years
2H years
3 years
3H years
4 years
4H years
Syears
5H y e a r s . . .
6 years..
6H years
7 years
7H years
.
Syears
SH years
Oyears
9H years
.
10 years (extended maturity)3
'(12/1/67)
(6/1/68)
(12/1/68)
(6/1/69)
(12/1/69)
(6/1/70)
(12/1/70)
..(6/1/71)
(12/1/71)
(6/1/72)
.(12/1/72)
(6/1/73)
(12/1/73)
(6/1/74)
(12/1/74)
(6/1/75)
(12/1/75)
..(6/1/76)
(12/1/76)
(6/1/77)
EXTENDED MATURITY PERIOD
$10. 37
10.37
10.37
10.37
10.37
10.37
10.37
10.37
10.37
10.38
10.38
10.38
10. 38
10.38
10.38
10.38
10.38
10.38
10.38
15.79
$20. 75
20.75
20.75
20.75
20.75
20.75
20.75
20.75
20.75
20.75
20.75
20.75
20.75
20.75
20.75
20.75
20.75
20.75
20.75
31.58
$103. 75
103. 75
103. 75
103. 75
103. 75
103. 75
103. 75
103. 75
103. 75
103. 75
103. 75
103. 75
103. 75
103. 75
103. 75
103. 75
103. 75
103. 75
103. 75
157.90
$207. 50
207. 50
207. 50
207. 50
207. 50
207. 50
207. 50
207. 50
207. 50
207. 50
207. 50
207. 50
207. 50
207. 50
207. 50
207. 50
207. 50
207. 50
207. 50
315.80
(2) From begin- (3) From each
ning of extended interest payment
maturity period date lo extended
to each interest
maturity
payment date
Percent
4 15
4 15
4 15
4 15
4 15
4 15
4 15
4 15
4 15
4 15
4 15
4 15
4 15
4 15
M.24
Percent
2 4 15
4 25
4 26
4 27
4 27
4 28
4 30
4 31
4 33
4 35
4 37
4 40
4 44
4 49
4 56
4 67
4 85
5.22
6.32
' Month, day, and year on which intcresi check is payable on issuesof June 1,1957. Forsubsequent issue months add the appropriate number of months,
s Yield ou face value from each interest payment date to extended maturity based on the schedule of interest checks prior to the June 1, 1968 revision.
3 20 years after issue date. Final check at extended maturity improved by revision of June 1,1968.
« Yield on purcliase price from issue date to extended maturity is 3.91 percent.
TABLE 16
BONDS BEARING ISSUE DATES FROM DECEMBER 1, 1957 THROUGH MAY 1, 1958
Face value (Redemption an'd'maturity value.
$500
500
$1,000
1,000
$5, 000
5,000
$10,000
10, 000
(1) Amounts of interest checks for each denomination
Period of time bond is held after maturity dato
Hyear
lyear.
IH years
2 years
2H years
Syears
3H years
4 years
4H years
5 years
5H years
6 years
6H years
7 years..
7H years
Syears
8H years
Oyears
9H years
10 years (extended maturity)2
'(6/1/68)
(12/1/68)
(6/1/69)
(12/1/69)
(6/1/70)
(12/1/70)
..(6/1/71)
(12/1/71)
(6/1/72)
(12/1/72)
.(6/1/73)
(12/1/73)
(6/1/74)
(12/1/74)
(6/1/75)
(12/1/75)
(6/1/76)
..(12/1/76)
(6/1/77)
(12/1/77)
E X T E N D E D M A T U R I T Y PERIOD
$10. 37
10.37
10.37
10.37
10. 37
10.37
10. 37
10.37
10.37
10. 38
10.38
10.38
10.38
10. 38
10. 38
10.38
10.38
10. 38
10.38
16.16
.$20. 75
20.75
20.75
20.75
20.75
20.75
20.75
20.75
20.75
20.75
20.75
20.75
20.75
20.75
20. 75
20.75
20.75
20.75
20.75
32.31
$103. 75
103. 75
103. 75
103. 75
103. 75
103. 75
103. 75
103. 75
103. 75
103. 75
103. 75
103. 75
103. 75
103. 75
103. 75
103. 75
103. 75
103. 75
103. 75
161.60
$207. 50
207. 50
207. 50
207. 50
207. 50
207. 50
207. 50
207. 50
207. 50
207. 50
207. 50
207. 50
207. 50
207. 50
207. 50
207. 50
207. 50
207. 50
207. 50
323.10
(2) From begin- (3) From each
ning of extended interest payment
maturiiy period date to exiended
to each interest
maturity
payment date
Percent
4 15
4 15
4 15
4 15
4 15
4 15
4 15
4 15
4 15
4 15
. 15
. 15
. 15
4 15
4 15
4 15
4 15
4 15
4 15
3 4.24
Percent
4 25
4 26
4 26
4 27
4 28
4 29
4 31
4 32
4. 34
4 36
4 39
4 42
4 46
4 51
4 59
4 71
4 90
5.29
6.46
' Month, day, and year on which intcresi check is payable on issues of December 1,1957. For subsequent issue ii iiiths add the appropriate number of
months.
3 20 years after issue date. Final check at extended maturiiy improved by revision of June 1,1968.
o
3 Yield on purchase price from issue date to extended maturity is 3.94 percent.
207
EXHIBITS
TABLE 17
BONDS BEARING ISSUE DATES FROM JUNE 1 THROUGH NOVEMBER 1, 1958
Facevaluete^i-,
Redemption ' and maturity value.
Period of time bond is held after issue dale
Hyear...
1 year
IH years
2 years
2H years
3 years
3H years
4 years
4H years
5 years
5H years
Oyears
6H years
7 years...
7H years.
Syears
SH years
Oyears
9H years
10 years (maturity)
2(12/1/58)
(6/1/59)
(12/1/59)
-(6/1/60)
(12/1/60)
(6/1/61)
(12/1/61)
(6/1/62)
(12/1/62)
(6/1/63)
(12/1/63)
(6/1/64)
...(12/1/64)
.(6/1/65)
...(12/1/65)
(6/1/66)
(12/1/66)
(6/1/67)
.(12/1/67)
..(6/1/68)
Period of time bond is held after maturity dale
Hyear
(12/1/68)
1 year
(6/1/69)
IH years
(12/1/69)
2 years
(6/1/70)
2H years.
(12/1/70)
3 years...
(6/1/71)
3H years
.(12/1/71)
4 years
(6/1/72)
4H years
-...(12/1/72)
5 years
(6/1/73)
5H years
(12/1/73)
6 years
(6/1/74)
6H years
(12/1/74)
7 years
(6/1/75)
7H years
(12/1/75)
Syears
(6/1/76)
SH years
(12/1/76)
Oyears..
(6/1/77)
9H years..
(12/1/77)
10 years (extended maturity)^
(6/1/78)
$500
500
$1,000
1,000
$5, 000
5,000
$10, 000
10, 000
(1) Amounts of inlerest checks for each denomination
(3) From each
(2) From issue
date or maturity
interest paydate to each
ment date (a) to
interest paymaturity
ment date
thereafter
Percent
$ 4 00
7.25
8.70
8.70
8.70
8.70
8.70
9. 55
9. 55
9. 55
9. 55
9. 55
10. 30
10. 30
10. 30
10. 55
10. 55
12. 65
12. 65
12.65
$8.00
14 50
17.40
17.40
17.40
17.40
17.40
19. 10
19. 10
19. 10
19. 10
19. 10
20. 60
20. 60
20. 60
21. 10
21. 10
25. 30
25. 30
25.30
$40. 00
72. 50
87.00
87.00
87.00
87.00
87.00
95.50
95. 50
95. 50
95. 50
95. 50
103. 00
103. 00
103. 00
105. 50
105. 50
126. 50
126. 50
126.50
$80. 00
145. 00
174. 00
174 00
174.00
174 00
174 00
191. 00
191. 00
191.00
191. 00
191. 00
206. 00
206. 00
206. 00
211. 00
211.00
253. 00
253. 00
253.00
1.60
2.25
2.65
2.85
2.!
3.06
3. 11
3.20
3.26
3.31
3. 35
3. 39
3.44
3.^
3. 52
3. 56
3.59
3. 66
3.72
3.78
Percent
33.35
<3. 88
*3. 91
*3. 94
«3. 97
* 4 01
* 4 06
* 4 08
* 4 11
* 4 14
« 4 18
* 4 23
< 4 25
* 4 27
5471
5 4 84
«5. 06
85. 06
55. 06
EXTENDED MATURITY PERIOD
10. 37
10. 37
10. 37
10. 37
10. 37
10. 37
10. 37
10. 37
10. 37
10. 38
10. 38
10. 38
10. 38
10. 38
10. 38
10. 38
10. 38
10. 38
10. 38
16.53
20.75
20.75
20.75
20.75
20.75
20. 75
20. 75
20. 75
20. 75
20. 75
20.75
20. 75
20. 75
20. 75
20.75
20. 75
20.75
20.75
20.75
33. 05
103. 75
103. 75
103. 75
103. 75
103. 75
103. 75
103. 75
103. 75
103. 75
103. 75
103. 75
103. 75
103. 75
103. 75
103. 75
103. 75
103. 75
103. 75
103. 75
165. 30
207. 50
207. 50
207. 50
207. 50
207. 50
207. 50
207. 50
207. 50
207. 50
207. 50
207. 50
207. 50
207. 50
207. 50
207. 50
207. 50
207. 50
207. 50
207. 50
330. 50
4 15
4 15
4 15
4 15
4 15
4 15
4 15
4 15
4 15
4 15
4 15
4 15"
4 15
4 15
4 15
4 15
4 15
4 15
4 15
M.25
4 26
4 26
4 27
4 28
4 29
4 30
4 32
4 33
4 35
4 37
4 40
4 43
4 48
4 54
4 62
4 74
4 95
5. 36
• At all times, except that bond was not redeemable during lirst 6 months.
i Month, day, and year on which interest check is payable on issues of June 1, 1958. For subsequent issue months add tho appropriate number of months.
3 Yield on face value from each inlerest payment date to maturity based on tho original schedule of interest checks prior to the June 1,1959 revision.
* Yield on face value from each interest payment date to malurity based on the schedule of Interest checks prior to the December 1, 1965 revision.
' » Yield on face value from each interest payment date to maturity based on the schedule of inlerest checks prior to the June 1, 1968 revision.
« 20 years after issue dale. Final check al extended maturity improved by revision of Juno 1, 1968.
.' Yield on purchase price from issue date to extended maturity is 3.97 percent.
208
19 6 8 REPORT OF T H E SECRETARY OF T H E
TREASURY
TABLE 18
BONDS BEARING ISSUE DATES FROM DECEMBER 1, 1958 THROUGH MAY 1, 1959
p „ - - vaiuo/'ssue price
race vaiue-^jj^^gj^p^j^j^, ^^^ maturity value.
Period of time bond is held after issue date
Hyear
lyear
IH years
2 years
2H years
3 years
3H years
4 years
4H years
5 years
5H years
6 years
6H years
7 years..7H years
Syears
SH years
Oyears
9H years
10 years (maturity)...
.
•
.
.
.
2(6/1/59)
(12/1/59)
(6/1/60)
(12/1/60)
(6/1/61)
(12/1/61)
(6/1/62)
(12/1/62)
(6/1/63)
(12/1/63)
(6/1/64)
(12/1/64)
(6/1/65)
(12/1/65)
(6/1/66)
(12/1/66)
(6/1/67)
(12/1/67)
(6/1/68)
(12/1/68)
Period of time bond is held after malurity date
Hyear
(6/1/69)
lyear
(12/1/69)
IH years
(6/1/70)
2 years
(12/1/70)
2H years
.
(6/1/71)
Syears
.
(12/1/71)
3H years
(6/1/72)
4 years
.
(12/1/72)
4H years
.
(6/1/73)
Syears
(12/1/73)
5H vears
(6/1/74)
6 years
(12/1/74)
6H years
(6/1/75)
7 years
.
(12/1/75)
7H years
(6/1/76)
Syears
1
(12/1/76)
SH years
.
(6/1/77)
Oyears
(12/1/77)
9H years
(6/1/78)
10 years (extended maturity)^ ...(12/1/78)
$500
500
$1,000
1,000
$5, 000
5,000
$10, 000
10, 000
(3) From each
(2) From issue
date or maturity
interest paydale to each
ment dato (a) to
interest paymaturity
ment date
thereafter
(1) Amounts of interest checks for each denomination
$4 00
7.50
8. 70
8.70
8. 70
8.70
9.45
9.45
9. 45
9.45
9. 45
10. 25
10. 25
10. 25
10. 50
10. 50
10. 50
13. 10
13. 10
13.35
$8. 00
15.00
17. 40
17. 40
17. 40
17. 40
18.90
18.90
18.90
18.90
18.90
20. 50
20.50
20. 50
21. 00
21. 00
21.00
26.20
26. 20
26.70
$40. 00
75. 00
S7. 00
87. 00
87.00
87.00
94. 50
94 50
94 50
94 50
94 50
102. 50
102. 50
102. 50
105. 00
105. 00
105. 00
131. 00
131. 00
133.50
$80. 00
150.00
174 00
174 00
174 00
174 00
189. 00
189 00
189 00
189. 00
189.00
205. 00
205. 00
205. 00
210. 00
210. 00
210. 00
262. 00
262. 00
267.00
Percent
1.60
2.30
2.68
2.88
3.00
3.07
3. 17
3. 24
3.30
3.34
3.38
3.43
3.48
3.52
3. 56
3.59
3.62
3.70
3.76
3.83
Percent
3 3.85
33.91
33.94
33.97
3401
3405
3 4 08
3 4 10
3 4 14
3 4 18
3423
3424
3 4 26
* 4 70
M. 81
<4 97
<5. 24
*5. 24
5.34
EXTENDED MATURITY PERIOD
10.37
10. 37
10.37
10.37
10.37
10.37
10.37
10.37
10.37
10.38
10.38
10.38
10.38
10.38
10.38
10.38
10.38
10.38
10.38
16.53
20.75
20.75
20. 75
20.75
20.75
20.75
20.75
20.75
20.75
20.75
20.75
20.75
20.75
20.75
20.75
20.75
20.75
20.75
20.75
33.05
103. 75
103. 75
103. 75
103. 75
103. 75
103. 75
103. 75
103. 75
103. 75
103. 75
103. 75
103. 75
103. 75
103. 75
103. 75
103. 75
103. 75
103. 75
103. 75
165.30
207.
207.
207.
207.
207.
207.
207.
207.
207.
207.
207.
207.
207.
207.
207.
207.
207.
207.
207.
330.
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
4 15
4 15
4 15
4 15
4 15
4 15
4 15
4 15
4 15
4 15
4 15
4 15
4 15
4 15
4 15
4 15
4 15
4 15
4 15
"4.25
4 26
4 26
4 27
4 28
4 29
4 30
4 32
4 33
4 35
4 37
4 40
4 43
4 48
4 54
4 62
4 74
4 95
5.36
6.61
> At all times, except that bond was not redeemable during first 6 monlhs.
2 Month, day, and year on whicii intcresi check is payable on issues of December 1,1958. Forsubsequent issuo months add tho appropriate number of months.
3 Yield on face value from each Ihlcrcst payment date to maturiiy based on the schedule of interest chocks prior lo the December 1,1965 n '
* Yield on face value from each interest payment dale lo maturity based on the schedule of interest chccksjjrior to thc June 1,1068 revisiov
5 20 years after issuo dale. Final checks at original and extended malurity improved by revision of June 1,1968.
• Yield on purchase price from issue date lo extended maturiiy is 4.00 percent.
209
EXHIBITS
TABLE 19
BONDS BEARING ISSUE DATES FROM JUNE 1 THROUGH NOVEMBER 1, 1959
Face valup/^^^"*^ P""'*^^
1 ace vaiuc|j^^jgj^^pjj^j^, j^j^j maturity value.
Period of time bond is hold after issue date
H year...
1 3'ear
IH years
2 years
2H years
3 years
3H years
4 3.-ears
4H years
Syears
SH years
6 vears.
6H years.
7 years
7H years.
8 vears
SH years
9 vears
9H years
10 years (maturity)5..-
2(12/1/59)
(6/1/60)
(12/1/60)
(6/1/61)
(12/1/61)
(6/1/62)
(12/1/62)
(6/1/63)
(12/1/63)
-(6/1/64)
...(12/1/64)
(6/1/65)
(12/1/65)
(6/1/66)
(12/1/66)
(6/1/67)
(12/1/67)
(6/1/68)
(12/1/68)
(6/1/69)
$500
500
$1, 000
1,000
$5, 000
5,000
$10, 000
10, 000
(1) Amounts of interest checks for each denomination
$4 00
7. 25
8.00
10.00
10.00
10.00
10.00
10. 00
10.00
10.00
10.00
10.00
10.00
10. 20
10.20
10. 90
10.90
11.70
11.70
12.21
$8.00
14 50
16.00
20.00
20. 00
20.00
20.00
20.00
20. 00
20.00
20.00
20.00
20.00
20.40
20.40
21.80
21.80
23.40
23.40
24.42
$40. 00
72. 50
80.00
100. 00
100. 00
100. 00
100. 00
100. 00
100. 00
100. 00
100. 00
100. 00
100. 00
102. 00
102. 00
109. 00
109. 00
117.00
117.00
122.10
$80. 00
145. 00
160. 00
200. 00
200. 00
200. 00
200. 00
200. 00
200. 00
200. 00
200. 00
200. 00
200. 00
204 00
204 00
218. 00
218. 00
234 00
234 00
244. 20
(2) From issue
date to each
interest payment dale
(3) From each
inlerest paymenl dale lo
maturity
Percent
1.60
2.25
2.56
2.91
3. 12
3.26
3.36
3.44
3.49
3.54
3. 58
3.61
3.64
3.66
3. 69
3.72
3.76
3.80
3.84
3.88
Percent
33. SS
3 3. 95
3 4.00
3 4 00
3400
3400
3400
3 4 00
3400
3 4 00
3400
3400
* i . 41
<4 47
' 4 55
*i.ao
M. 68
4 78
4 88
1 At all times, except that bond was nol redeemable during first 0 monlhs.
3 Month, day, and year on which interest check is payable on issuesof June 1,1959. Forsubsequent issue months add the appropriate number of months.
3 Yield on face value from each interest payment date lo malurity based on the schedule of interest chocks prior lo tho December 1, 1965 revision.
< Yield on face value from each interest payment dale to malurity based on the schedule of interest checks prior lo the June 1, 1968 revision.
' Final check at maturity improved by revision of June 1,1968.
TABLE 20
BONDS BEARING ISSUE DATES FROM DECEMBER 1, 1959 THROUGH MAY 1, 1960
F a c e v a l u e |Redemption'
' - " X ; ? „ ° „ r and maturity value
Period of time bond Is held after issue d
Hyear
lyear
IH years
2 years
2H years
Syears.
SH years
4 years
4H years
Syears.
SH years
6 years
OH years
7 years
7H years
Syears
SH years
Oyears
9H years..
10 years (maturity)s
2(6/1/60)
(12/1/60)
(6/1/61)
(12/1/61)
(6/1/62)
(12/1/62)
(6/1/63)
(12/1/63)
(6/1/64)
(12/1/64)
(6/1/65)
(12/1/65)
(6/1/66)
(12/1/66)
(6/1/67)
(12/1/67)
(6/1/68)
(12/1/68)
(6/1/69)
(12/1/69)
$500
.500
$1,000
1,000
$5, 000
5,000
$10,000
10, 000
(1) Amounts of interest checks for each denomination
$4 00
7. 25
8.00
10.00
10.00
10.00
10.00
10.00
10.00
10.00
10.00
10.00
10.20
10.20
10.80
10.80
10.80
11.85
11.85
12.62
$8.00
14 50
16.00
20.00
20.00
20.00
20.00
20.00
20.00
20.00
20. 00
20; 00
20.40
20.40
21.60
21.60
21. 60
23.70
23.70
25.24
$40. 00
72.50
80.00
100. 00
100. 00
100. 00
100. 00
100. 00
100. 00
100. 00
100. 00
100. 00
102. 00
102. 00
108. 00
108. 00
108. 00
118. 50
118.50
126. 20
$80. 00
145. 00
160. 00
200. 00
200. 00
200. 00
200. 00
200. 00
200. 00
200. 00
200. 00
200. 00
204 00
204 00
216. 00
216. 00
216. 00
237. 00
237. 00
252. 40
(2) From issue
date lo each
interest paymenl dale
Percent
1.60
2.25
2. 56
2.91
3. 12
3.26
3.36
3. 44
3.49
3. 54
3.58
3.61
3.64
3.67
3. 71
3.74
3.77
3.81
3.85
3.90
(3) From each
interest payment date to
maturiiy
Percent
33. 88
3 3. 95
3 4 00
3 4 00
3 4 00
3 4 00
3 4 00
3 4 00
3 4 00
3400
34 00
^ 4 41
^ 4 46
* 4. 52
*4. 57
4 4 63
4 S4
4 89
5. OS
' At all times, except that bond was not redoemable during first 6 monlhs.
2 Month, day, and yeai" on which interest check is payable on issues of December 1, 1959. For subsequent issue months add the appropriate
numberof monlhs.
3 Yield on face value from each interest payment dato lo maturiiy based on the schedule of interest checks prior to the December 1, 1965 revision.
* Yield on face value from each inlerest payment dato lo maturiiy based on the schedule of interest checks prior to the June 1, 1968 revision.
«Final check at maturity improved by revision of June 1,1968.
210
19 6 8 REPORT OF T H E SECRETARY OF T H E
TREASURY
TABLE 21
B O N D S B E A R I N G I S S U E D A T E S F R O M J U N E 1 T H R O U G H N O V E M B E R 1, 1960
F a c e valuc/^^^"® price
( R e d e m p t i o n ' a n d m a t u r i t y value.
Period of lime bond is held after issue date
Hyear
1 year
i H years
2 years
2H y e a r s
Syears
SH y e a r s
4 years
4H y e a r s
5 years
SH y e a r s
6 years
6H y e a r s
7 years
7H y e a r s
Syears
SH y e a r s . . .
9 years
9H y e a r s
10 y e a r s (maturity)^
.
.
.
.
.
.
.
....2(12/1/60)
..(6/1/61)
(12/1/61)
...(6/1/62)
(12/1/62)
(6/1/63)
(12/1/63)
(6/1/64)
(12/1/64)
(6/1/65)
(12/1/65)
(6/1/66)
(12/1/66)
(6/1/67)
(12/1/67)
(6/1/68)
(12/1/68)
(6/1/69)
(12/1/69)
(6/1/70)
$500
500
$1,000
1,000
$5, 000
5,000
$10, 000
10, 000
(1) Amounts of interest checks for each denomination
$ 4 00 I
7.25 I
8. 00
10.00
10.00
10. 00
10. 00
10. 00
10. 00
10. 00
10.00
10. 20
10. 20
10. 70
10. 70
10. 70
10.70
12. 05
12. 05
13.09
$S. 00
1 4 50
16. 00
20.00
20.00
20. 00
20.00
20. 00
20. 00
20. 00
20. 00
20.40
20. 40
21.40
21.40
21. 40
21. 40
2 4 10
2 4 10
26.18
$40.
72.
80.
100.
100.
100.
100.
100.
100.
100.
100.
102.
102.
107.
107.
107.
107.
120.
120.
130.
00
50
00
00
00
00
00
00
00
00
00
00
00
00
00
00
00
50
50
90
$S0. 00
145. 00
160.00
200. 00
200. 00
200. 00
200. 00
200. 00
200. 00
200. 00
200. 00
2 0 4 00
2 0 4 00
2 1 4 00
2 1 4 00
2 1 4 00
2 1 4 00
241. 00
241. 00
2 6 1 . 80
(2) From issue
date to each
interest payment date
Percent
1.60
2. 25
2.56
• 2. 91
3. 12
3.26
3.36
3.44
3.49
3. 54
3.58
3.62
3.65
3.69
3.72
3.75
3.78
3.83
3.87
3.93
(3) From each
interest payment date to
maturity
Percent
3 3.88
33.95
3400
3 4 00
3400
3 4 00
3 4 00
3 4 00
3400
3 4 00
^ 4 40
< 4 44
*4. 50
M . 54
M. 60
4 78
4 96
5.03
5.24
• At all times, except that bond was nol redeemable din-ing first 6 months.
' Month, day, and year on whicii inlerest check is payable on issues of Juno 1, 1960. For subsequent issue monlhs add the appropriate nuniber of n
3 Yield on face value from each interest payment dale lo malnrily based ou the sclicdiile of inlerest chocks prior to thc Deceniber 1, 1965 revision.
* Yield on face value from each iiitoresl paymenl dale to maturity based on Ihc sclicUulc of interest checks prior to the Juue 1, 1908 revision.
» Final check at malurity iinproved by revision of Juue 1, 1968.
TABLE 22
B O N D S B E A R I N G I S S U E D A T E S F R O M D E C E M B E R 1,1960 T H R O U G H
Face value/Issue price. . . . . . .
\ R e d e m p t i o n ' a n d m a t u r i t y value
Period of time bond is held after issue d
Hyear
lyear..
IH years
2 years
2H y e a r s
Syears
3H y e a r s
4 years
4H y e a r s
Syears
SH y e a r s
6 years
6H y e a r s
7 years
7H y e a r s
Syears
SH y e a r s
9 years
9H y e a r s
10 y e a r s (maturity)^
..
''(6/1/61)
(12/1/61)
(6/1/62)
(12/1/62)
(6/1/63)
(12/1/63)
.(6/1/64)
(12/1/64)
.....(6/1/65)
(12/1/65)
(6/1/66)
(12/1/66)
(6/1/67)
....(12/1/67)
(6/1/68)
(12/1/68)
(6/1/69)
(12/1/69)
(6/1/70)
....(12/1/70)
$500
500
$ 1 , 000
1,000
$5, 000
5,000
$8.00
14 50
16. 00
20. 00
20. 00
20. 00
20. 00
20.00
20. 00
20.00
20.40
20. 40
20.40
22.00
22.00
22. 00
22. 00
23.90
23.90
26.54
$40. 00
72. 50
80.00
100. 00
100. 00
100. 00
100. 00
100. 00
100. 00
100. 00
102. 00
102. 00
102. 00
110. 00
110. 00
110. 00
110. 00
119.50
119. SO
132. 70
,1961
$10, 000
10,000
(1) Araounts of interest checks for each denomination
$ 4 00
7. 25
8. 00
10. 00
10. 00
10. 00
10. 00
10. 00
10. 00
10. 00
10.20
10. 20
10. 20
11. 00
11. 00
11.00
11. 00
11. 95
11.95
13.27
MAY
$80. 00
145. 00
160. 00
200. 00
200. 00
200. 00
200. 00
200. 00
200. 00
200. 00
204 00
204 00
204 00
220. 00
220. 00
220. 00
220. 00
239. 00
239. 00
265. 40
(2) From issue
date to each
interest payment date
Percent
1.60
2.25
2.56
2.91
3. 12
3.26
3.36
3.44
3.49
3.54
3.58
3.62
3.65
3.70
3.74
3.78
3.81
S;85
3.89
3.95
(3) From each,
interest payment date to
maturity
Percent
33.88
33.95
3400
3 4 00
3400
3400
3400
3400
3400
* 4 40
* 4 44
* 4 49
M.56
M.58
4 72
4 81
4 95
5.04
5.31
• At all limes, except that bond was nol redeemable during first 6 monlhs.
2 Month, day, and year on which interest check is payable on issues of December 1,1960. For subsequent issue monlhs add the appropriate number of months.
3 Yield on face value from each inlerest payment dale lo maturity based on the schedule of interest checks prior to the December 1,1965 revision.
* Yield on face value from each interest payment dale to maturity based on the schedule of inlerest checks prior to the Juno 1,1968 revision.
« Final check at maturiiy improved by revision of June 1,1968.
211
EXE^BITS
TABLE 23
BONDS BEARING ISSUE DATES FROM JUNE 1 THROUGH NOVEMBER 1, 1961
VncP vahiPpss"® p r i c e . . .
jrace vame'j^jjgjjgj^pjj^jj^, ^^^^j maturity value.
Period of time bond is held after issue dale
Hyear
1 year
IH years
2 years
2H years
3 years..
3H years
4 years
4H years
5 years..
5H3-ears.
6 years
6H years
7 years
7H years
Syears..
8H years
9 years
9H years
10 years (maturity)*
2(12/1/51)
-(6/1/62)
.(12/1/62)
(6/1/63)
(12/1/63)
(6/1/64)
(12/1/64)
(6/1/65)
(12/1/65)
(6/1/66)
(12/1/66)
(6/1/67)
(12/1/67)
(6/1/68)
(12/1/68)
(6/1/69)
(12/1/69)
(6/1/70)
(12/1/70)
...(6/1/71)
.
$500
500
$1, 000
1,000
$5, 000
5,000
$10, 000
10, 000
(1) Amounts of interest checks for each denomination
$4. 00
7. 25
8.00
10.00
10.00
10. 00
10. 00
10. 00
10. 00
10. 20
10. 20
10. 20
10. 85
10. 85
10. 85
11.35
11.35
11. 35
12. 15
13.75
$8.00
14 50
16.00
20.00
20.00
20.00
20.00
20.00
20.00
20.40
20.40
20. 40
21. 70
21.70
21. 70
22. 70
22. 70
22. 70
24 30
27.50
$40. 00
72. 50
. 80. 00
100. 00
100. 00
100. 00
100. 00
100. 00
100. 00
102. 00
102. 00
102. 00
108. 50
108. SO
108. SO
113.50
113. SO
113. SO
121. 50
137. 50
$80. 00
145. 00
160. 00
200. 00
200.00
200. 00
200. 00
200. 00
200. 00
204 00
204 00
204 00
217. 00
217. 00
217. 00
227. 00
227. 00
227. 00
243. 00
275. 00
(2) From Issue
dale to each
interest payment dato
(3) From oach
Interest payment date to
matm-ity
Percent
Percent
33.88
83.95
3400
3400
3400
3400
3400
3 4 00
< 4 40
M . 44
M.48
M . 54
M . 57
4 71
4 79
4 85
4 96
5.18
5.50
1.60
2.25
2.56
2.91
3. 12
3.26
3.36
3.44
3.49
3.55
3.59
S. 63
3.68
3.72
3.75
3.80
3.83
3.87
3.91
3.97
' At all times, except that bond was not redeemable during first 6 months.
2 Month, day, and year on which interest check is payable on issues of June 1, 1961. For subsequent issue months add the appropriate number of months.
3 Yield on face value from each interest payment date lo maturity based on the schedule of interest checks prior to tho December 1, 1965 revision.
* Yield on face value from each interest paynient dale to maturity based on the schedule of inlerest checks prior to the June 1, 1968 revision.
» Final check at maturiiy improved by revision of June 1,1968.
TABLE 24
BONDS BEARING ISSUE DATES FROM DECEMBER 1, 1961 THROUGH MAY 1, 1962
p.
I Tissue price
i'ace valuejjjg^jgj^^pjjjjj^, ^^^ maturity value.
Period of time bond is held after issuo date
Hvear
1 year
IH years
2 years
2H years
Syears
3H years-.-4 years.
4H years...
5 years.
SH years
6 j'ears.
6H years
7'3-ears.
7H years...
Syears.
8H years.
Oyears
9'/z years
10 years (maturity)*.
-
^
2(6/1/62)
(12/1/62)
-(6/1/63)
(12/1/63)
-(6/1/64)
(12/1/64)
(6/1/65)
(12/1/65)
(6/1/66)
(12/1/66)
(6/1/67)
(12/1/67)
(6/1/68)
...(12/1/68)
-(6/1/69)
(12/1/69)
(6/1/70)
(12/1/70)
(6/1/71)
..(12/1/71)
$500
500
$1,000
1,000
$5, 000
5,000
$10, 000
10, 000
(1) Amounts of interest checks for each denomination
$4. 00
7.25
8.00
10.00
10.00
10.00
10.00
10.00
10. 20
10.20
10. 20
10. 75
10. 75
10.75
11.25
11.25
11.25
12.00
12.00
13.89
$8.00
14 50
16.00
20.00
20.00
20.00
20.00
20.00
20.40
20.40
20.40
21.50
21.50
21.50
22.50
22.50
22.50
24 00
24 00
27.78
$40. 00
72.50
80.00
100. 00
100. 00
100. 00
100. 00
100. 00
102. 00
102. 00
102. 00
107. SO
107. SO
107. SO
112. 50
112. 50
112. 50
120. 00
120. 00
138. 90
$80. 00
145. 00
160. 00
200. 00
200. 00
200. 00
200. 00
200. 00
204 00
204 00
204 00
215. 00
215. 00
215. 00
225. 00
225. 00
225. 00
240. 00
240. 00
277. 80
(2) From issue
dale to each
interest payment date
(3) From each
interest payment date to
maturity
Percent
Percent
1.60
2.25
2.56
2.91
3. 12
3.26
3.36
3. 44
3.50
3.56
3.60
3.65
3.69
3.73
3.78
3.82
3.85
3.89
3.93
4.00
33.88
33.95
3 4 00
3 4 00
3400
3 4. 00
3400
* 4 40
*4 43
<4 47
* 4 52
M . 55
4 69
4 76
4 82
4 90
5.05
5. 17
5.56
• At all times, except that bond was not redeemable during first 6 months.
' Month, day, and year on which interest check Is payable on issues of December 1, 1961. For subsequent issue months add the appropriate number ol
months.
3 Yield on face value from each interest payment date to maturity based on thc schedule of interest checks prior to the December 1,1965 revision.
* Yield on face value from each interest payment date to maturity based on thc schedule of interest checks prior to the June 1,1968 revision.
i Final check at maturity improved by revision of June 1,1968.
212
19 68 REPORT OF T H E
SECRETARY OF T H E
TREASURY
TABLE 25
BONDS BEARING ISSUE DATES FROM JUNE 1 THROUGH NOVEMBER 1, 1962
Face valuel^'^^"^ P"*^^
"
rttc ^'»'"^\i{edemption ' and maturity value.
Period of lime bond is hold after issue date
H vear
1 year
IH years
2 years
2H years.3 years
3H years
4 years
4H.3-ears
5 years
5H.years
6 vears
6H years
7 years
7H years
Syears
SH years
9 years-.
9H.years
10 years (maturity)^
2(12/1/62)
(6/1/03)
(12/1/63)
(6/1/64)
(12/1/64)
(6/1/65)
. . . . . . (12/1/65)
(6/1/66)
(12/1/66)
(6/1/67)
(12/1/67)
(0/1/68)
.
(12/1/68)
(6/1/69)
(12/1/69)
(6/1/70)
.
(12/1/70)
(6/1/71)
(12/1/71)
.
(6/1/72)
$500
500
$1,000
1,000
$5, 000
5,000
$10, 000
10,000
(1) Amounts of inlerest checks for each denomination
$4. 00
7. 25
8.00
10. 00
10.00
10.00
10. 00
10. 20
10. 20
10. 20
10. 65
10. 65
10. 65
11. 25
11. 25
11. 25
11.25
12.05
12.05
14,23
$8.00
14 50
16.00
20.00
20.00
20.00
20.00
20.40
20.40
20.40
21.30
21.30
21.30
22. 50
22.50
22. SO
22.50
2 4 10
24 10
28.46
$40. 00
72.50
80.00
100. 00
100. 00
100. 00
100. 00
102. 00
102. 00
102. 00
106. SO
106. 50
106. 50
112. 50
112. SO
112.50
112. 50
120. SO
120. SO
142. 30
$80. 00
145. 00
160. 00
200. 00
200. 00
200. 00
200. 00
204 00
204 00
204 00
213. 00
213. 00
213. 00
225. 00
225. 00
225. 00
225. 00
241. 00
241. 00
2 8 4 60
(2) From issuo
date to each
interest payment dato
(3) From each
interest payment dato to
maturity
Percent
Percent
1.60
2.25
2.56
2.91
3. 12
.3.26
3.36
3.45
3.51
3. 56
3.62
3. 67
3. 71
3.76
3.80
3.84
3.87
3.91
3.95
4 02
33. 88
33.95
3 4 00
3400
3 4 00
3 4 00
V4 40
< 4 43
< 4 47
* 4 51
M.54
4 68
4 75
4 79
4 85
4 95
S. 10
5.25
5.69
' Al all times, except that bond was nol redeemable duringfirst6 months.
2 Month, day, and year on which interest check is payable on issues of June 1, 1962. For subsequent issue months add thc appropriate number of months.
3 Yield on face value from each interest payment date to maturity based on the schedule of inlerest checks prior lo the December 1, 1965 revision.
< Yield on face value from each inlerest paymenl date lo maturity based on the schedule of interest checks prior to the June 1,1968 revision.
5 Final check at maturity improved by revision of June 1, 1968.
TABLE 26
BONDS BEARING ISSUE DATES FROM DECEMBER 1, 1962 THROUGH MAY 1, 1963
„
, ^Tissue price
mption' and maturity value.
Face valuc|j^^^^^pti^
Period of time bond is held after issue dale
Hyear
1 year
IH years.
2 years
2/2 3.-ears
3 years
3H years
4 years
4-;^ years
5 years
SH years
6 years.'
6H years..
7 years
7H years
Syears
SH years
-...,
Oyears
9H years
10 years (maturity)^
.
.--.2(6/1/63)
(12/1/63)
(6/1/64)
(12/1/64)
(6/1/65)
....(12/1/65)
(6/1/66)
(12/1/66)
(6/1/67)
(12/1/67)
(6/1/68)
(12/1/68)
(6/1/69)
(12/1/69)
(6/1/70)
(12/1/70)
(6/1/71)
(12/1/71)
(6/1/72)
(12/1/V2)
$500
500
$1,000
1,000
$5, 000
5,000
$10,000
10,000
(1) Amounts of interest checks for each denomination
$4 00
7.25
S.OO
10.00
10.00
10.00
10. 20
10. 20
10.20
10. 60
10. 60
10.60
11. 15
11. 15
11. 15
11. 15
11.95
11.95
11.95
14 43
$8.00
14 50
16.00
20.00
20.00
20.00
20.40
20.40
20.40
21. 20
21.20
21. 20
22. 30
22.30
22.30
22.30
23.90
23. 90
23.90
28.86
$40. 00
72.50
80.00
100. 00
100. 00
100. 00
102. 00
102. 00
102. 00
106. 00
106. 00
106. 00
111.50
111. SO
111. SO
111. SO
119. SO
119. 50
119. SO
144 30
$80. 00
145. 00
160. 00
200. 00
200. 00
200. 00
204 00
204 00
204 00
212. 00
212. 00
212. 00
223. 00
223. 00
223. 00
223. 00
239. 00
239. 00
239. 00
288. 60
(2) From issue
date to oach
interest paymenl date
Percent
1.60
2.25
2. 56
2.91
3. 12
3.26
3.37
3.45
3.52
3. 58
S. 64
3.68
3.74
3.78
3.82
3.85
3.90
3.94
3.98
4 05
(3) From each
interest payment date to
maturity
Percent
33.88
33.95
3400
3400
3400
M. 40
M. 43
* 4 46
* 4 50
M. S3
4 67
4 73
4 77
4 82
4 90
5.02
5. 10
5.27
5.77
' At all limes, except that i3oncl was not redeemable during first 6 monlhs.
- Month, day, and year on whicii interest check is payable on i.ssues of Deceniber 1,1962. For subsequent Lssuc monlhs add thc appropriate number of monlhs.
3 Yield (in face value from each intcresi payment date lo malurity based on the schedule of interest checks prior to thc December 1, 1965 revision.
< Yield on face value from each interest paymenl dale lo maturiiy based on the schedule of interest checks prior to the June 1, 1968 revision.
* Final check al malurity iinproved by revision of Juno 1, 1968.
213
EXHIBITS
TABLE 27
B O N D S B E A R I N G I S S U E D A T E S F R O M J U N E 1 T H R O U G H N O V E M B E R 1, 1963
F a c e valuel^^^"*^ P"*^^
IRedemption' and maturity value.
Period of lime bond is held after issue date
Hyear
1 year
I H years
2 years
2H y e a r s
3 years
3H y e a r s
4 years..
4H years
5 vears
sH years
Oyears
6H y e a r s
7 years
7H y e a r s
Syears..
8H years
Oyears
9H y e a r s
10 y e a r s (maturity)^
2(12/1/63)
(6/1/64)
(12/1/64)
(6/1/65)
(12/1/05)
(6/1/66)
(12/1/66)
(6/1/67)
(12/1/67)
(6/1/68)
(12/1/68)
(6/1/69)
(12/1/69)
(6/1/70)
(12/1/70)
(6/1/71)
(12/1/71)
(6/1/72)
(12/1/72)
(6/1/73)
$500
500
$1,000
1,000
$5, 000
5,000
$10, 000
10, 000
(1) Amounts of interest checks for each denomination
$4. 00
7. 25
8. 00
10.00
10.00
10. 20
10. 20
10. 20
10. 55
10. 55
10. 55
11. 10
11. 10
11. 10
11. 10
11. 10
12. OS
12.05
12.05
1 4 84
$8.00
1 4 50
16. 00
20. 00
20.00
20.40
20. 40
20. 40
21. 10
21. 10
21. 10
22. 20
22. 20
22. 20
22. 20
22. 20
2 4 10
2 4 10
2 4 10
29.68
$40. 00
72. 50
SO. 00
100. 00
100. 00
102. 00
102. 00
102. 00
105. 50
105. 50
105. 50
111. 00
111.00
111.00
111.00
111. 00
120. SO
120. SO
120. 50
148.40
$80. 00
145. 00
160. 00
200. 00
200. 00
2 0 4 00
2 0 4 00
2 0 4 00
211.00
211.00
211.00
222. 00
222. 00
222. 00
222. 00
222. 00
241. 00
241. 00
241. 00
296. 80
(2) From issue
date lo each
interest paymenl dato
(3) From each
interest paymenl dale to
maturity
Percent
1.60
2.25
2. 56
2.91
3. 12
3. 27
3.38
3.46
3.54
3.60
3.65
3. 71
3. 76
3.80
3.84
3.87
3.92
3.96
4 00
4.08
Percent
3 3 . 88
33.95
3400
3400
* 4 40
* 4 43
M . 46
< 4 49
M . 52
4 66
4 71
4.75
4 80
4 86
4 95
5.09
5.18
S. 3 7
5.94
1 At all times, except that bond was not redeemable during first 6 months.
s Month, day, and year on which inlerest check is payable on issues of June 1,1963. For subsequent issue months add tho appropriate number of months.
3 Yield on face value from each interest payment date to maturiiy based on the schedule of inlerest checks prior to thc December 1,1965 revision.
* Yield on face value from each interest paymenl dale to malurity based on the schedule of inlerest checks prior lo thc June 1, 1968 revision.
» Final check at. maturity Improved by revision of June 1, 1968.
TABLE 28
B O N D S B E A R I N G I S S U E D A T E S F R O M D E C E M B E R 1, 1963 T H R O U G H M A Y 1, 1964
F a c o v a l u o {R>e- d" e«m
j ;p' ;t ?i o- n, -' a n d m a t u r i t y v a l u e .
Period of lime bond is held after issue date
H year
1 year
IH years..
2 years
2H y e a r s
3 years
SH y e a r s
4 years
4H vears
5 years
5H y e a r s
6 years
6H y e a r s
7 years
7H years
Syears
SH y e a r s
9 years
9H y e a r s
10 y e a r s (maturity)^
H6/1/64)
(12/1/64)
(6/1/6.5)
(12/1/65)
(6/1/66)
(12/1/66)
(6/1/67)
(12/1/67)
(6/1/6S)
(12/1/68)
(6/1/69)
(12/1/69)
(6/1/70)
(12/1/70)
(6/1/71)
(12/1/71)
(6/1/72)
(12/1/72)
(6/1/7.3)
(12/1/73)
.
' At all limes, except thai bond was not redceiiial
= Month,day,and yearoii whicii iiilcreslcheck isi)
3 Yield on face value from each inlen'sl paynieiilc
* Yield on face value from each interest paymenl (
» Final check al maturity imiiroved by revision ol
318-223—69-
-16
$.500
500
$1,000
1,000
$.5, 000
5,000
$10, 000
10, 000
(1) Amounts of interest checks for each denomination
$ 4 00
7.25
8.00
10. 00
10. 20
10. 20
10. 20
10. 20
10. 75
10. 75
10. 75
10. 75
11. 25
11. 25
11. 25
11. 25
12. 10
12. 10
12. 10
1.5. 21
$8.00
1 4 .50
16.00
20.00
20. 40
20. 40
20. 40
20. 40
21..50
21. 50
21. .50
21. 50
22. 50
22. 50
22. 50
22. 50
2 4 20
2 4 20
2 4 20
30.42
$40. 00
72. ,50
80.00
100. 00
102. 00
102. 00
102. 00
102.00
107. 50
107. .50
107. 50
107. .50
112.50
112. 50
112. 50
112. 50
121. 00
121. 00
121.00
152.10
$80. 00
14.5. 00
160. 00
200. 00
2 0 4 00
2 0 4 00
2 0 4 00
2 0 4 00
21.5. 00
21.5. 00
215. 00
21.5.00
225. 00
225. 00
22.5. 00
225. 00
242. 00
242. 00
242. 00
304. 20
(2) From issue
date to each
inlerest paymenl dato
Percent
1.60
2.25
2.56
2. 91
3. 14
3.29
3.39
3.47
3.56
3.63
3.68
3.73
3.78
3.83
3.86
3.90
3.94
3.99
4 02
4.11
(3) From each
interest paymenl date to
maturiiy
Percent
3 3.88
3 3.95
3 4 00
* 4 40
* 4 43
* 4 46
M.49
* 4 53
4 65
4 69
4 74
4 80
4 85
4 92
5.01
o. 14
.5.24
5.45
6.08
iriiig first 6 months.
Icon issuesof December 1,1063. For subsequent issue monllisadd the appropriate number of months.
lo malurity ha.sed on llie schedule of inlerest checks prior lo the December 1, 1'.I65 revision.
lo malurity based on the schedule of interest cliecks prior to the Juno 1, 1968 revision.
e I, 1%8.
214
19 68 REPORT OF T H E SECRETARY OF T H E
TREASURY
TABLE 29
BONDS BEARING ISSUE DATES FROM JUNE 1 THROUGH NOVEMBER 1, 1964
F a c e v a . „ e { ' S „ ^ j ; ? - ; and maturity value.
Period of time bond is held after issue dato
K year...
lyear
IH years....
2 years
2H years
Syears.-.
SH years.
4 years
4H years
5 years
SH years
6 years
6H years
7 years
7H years
Syears
SH years
9 years
9H years
10 years (maturity)*
2(12/1/64)
......(6/1/65)
(12/1/65)
...(6/1/66)
....(12/1/66)
(6/1/67)
(12/1/67)
(6/1/68)
(12/1/68)
...(6/1/69)
(12/1/69)
....(6/1/70)
.(12/1/70)
....(6/1/71)
(12/1/71)
...(6/1/72)
..(12/1/72)
.....(6/1/73)
...(12/1/73)
(6/1/74)
$500
500
$ 1 , 000
1, 000
$5, 000
5,000
$10, 000
10, 000
(1) Amounts of interest checks for each denomination
$4 00
7.25
8.00
10.20
10.20
10.20
10.20
10.70
10.70
10.70
10.70
11.20
11.20
11.20
11.20
11.20
12. 15
12. 15
12. 15
15.58
$8.00
14 50
16.00
20.40
20.40
20.40
20.40
21.40
21. 40
21.40
21.40
22.40
22.40
22.40
22.40
22.40
24 30
24 30
24 30
31.16
$40. 00
72.50
80.00
102. 00
102. 00
102. 00
102. 00
107. 00
107. 00
107. 00
107. 00
112. 00
112. 00
112. 00
112.00
112. 00
121. 50
121. 50
121. 50
155.80
$80. 00
14.5. 00
160. 00
204 00
204 00
204 00
204 00
214 00
214 00
214 00
214 00
224 00
224 00
224 00
224 00
224 00
243. 00
243. 00
243. 00
311.60
(2) From issue
date lo each
interest payment dale
Percent
1.60
2.25
2. 56
2.93
3. 15
3.30
3.41
3.51
3.59
3.65
3.70
3.76
3.81
3.85
3.89
3.92
3.96
4 01.
4 04
4.13
(3) From each
interest payment date to
maturity
Percent
3 3 . 88
33.95
M. 40
• 4 42
' 4. 45
M. 48
M.52
4 64
4.68
4 72
4 78
4 82
4 87
4 94
5.04
S. 19
5.31
5.54
6.23
> At all times, except that bond was not redoemable during first 6 monlhs.
3 Month, day, and year on which interest check is payable on issues of June 1, 1964. For subsequent issue months add the appropriate number of months.
3 Yield on face value from each interest paymenl date to maturiiy based on the schedule of interest checks prior to the December I, 1965 revision.
* Yield on face value from each interest payment dale to maturity based on the schedule of interest checks prior to the June 1,1968 revision.
« Final check at maturity improved by revision of Juno 1,1968.
215
EXHIBITS
TABLE 30
B O N D S B E A R I N G I S S U E D A T E S F R O M D E C E M B E R 1, 19G4 T H R O U G H M A Y
F a c e value/^^^"® P*"'*^®
IRedemption ' a n d maturity value.
Period of lime bond is held after issue date
Hyear
1 year
IH years
2 years.
2H y e a r s
3 years
3H years
4 years
4H years
5 yeai-s
SH y e a r s
6 years-.
6H years
7 years
7H years
Syears
SH years
9 years
9H years
10 y e a r s (maturity)*
..2(6/1/6.5)
(12/1/65)
(6/1/66)
(12/1/66)
(6/1/67)
(12/1/67)
(6/1/6S)
...(12/1/68)
(6/1/69)
(12/1/69)
(6/1/70)
(12/1/70)
(6/1/71)
(12/1/71)
(6/1/72)
(12/1/72)
(6/1/73)
(12/1/73)
(6/1/74)
(12/1/74)
$.'-100
500
$1,000
1,000
;.5,000
5,000
$10,000
10, 000
(1) Amounts of interest checks for each denomination
$4. 00
7.25
S. 20
10. 20
10. 20
10. 20
10. 65
10. 65
10. 65
10. 65
10. 65
11. 35
11. 35
11. 35
11. 35
11. 35
12. 15
12. 15
12. 15
15.91
$S. 00
14 50
16. 40
20. 40
20. 40
20. 40
21. 30
21. 30
21. 30
21. 30
21. 30
22. 70
22. 70
22. 70
22. 70
22. 70
2 4 30
24. 30
2 4 30
31.82
$40. 00
72. 50
82. 00
102. 00
102.00
102. 00
106. 50
106. 50
106. 50
106. 50
106. .50
113. .50
113. 50
113. 50
113. 50
113.50
121. .50
121. 50
121. 50
159.10
$80. 00
14,5. 00
164. 00
204. 00
204 00
204 00
213. 00
213. 00
213.00
21.3. 00
213.00
227. 00
227. 00
227. 00
227. 00
227. 00
243. 00
243. 00
243. 00
318.20
(2) From issue
date lo each
interest payment dato
Percent
1. 60
2. 25
2. 59
2. 95
3. 17
3.31
3. 44
3. 54
3. 61
3. 67
3.72
.3.78
3.83
3.88
3.91
3.95
.3.99
4 03
4 07
4.16
(3) From each
interest payment date to
maturity
Percent
3 .3. 88
* 4 35
< 4 42
M . 45
< 4 48
*4S1
4 63
4.67
4 71
4 76
4 83
4 86
4 92
4 98
5.08
5. 22
S.SS
5.60
6.36
• At all times, except that bond was not redeemable during li
3 Month, day, and year on whicii interest check is payable o
s of December 1, 1964. For subsoquc it issue months add the appropriate number of
months.
3 Yield on face value from each inlerest payment dale lo maturity based on llie schedule of interest checks prior to the December 1, 1965 ision.
* Yield on face value from each interest payment dato to maturity based on the schedule of interest checks prior to the June 1, 1968 revisii
« Final check at maturity improved by revision of June 1, 1968.
TABLE 31
BONDS BEARING ISSUE DATES FROM JUNE
Facaval„efc"^P';^-,Redemption' and maturity value.
Period of time bond is held after issue dato
H year..
1 year
IH years.
2 years..
2H years
3 years
SH years.
4 years
4H years
Syears
SH years
6 years
6H y e a r s . - . .
7 years
7H y e a r s . . . .
Syears
SH years
9 years
9H y e a r s . . . .
10 years (maturity)*
2(12/1/65)
(6/1/66)
(12/1/66)
(6/1/67)
(12/1/67)
(6/1/68)
(12/1/68)
(6/1/69)
(12/1/69)
(6/1/70)
(12/1/70)
(6/1/71)
(12/1/71)
(6/1/72)
(12/1/72)
-(6/1/73)
...(12/1/73)
(6/1/74)
(12/1/74)
(6/1/75)
$500
500
$1,000
1,000
THROUGH NOVEMBER 1, 1965
$5, 000
5,000
$10, 000
10, 000
(1) Amounts of interest checks for each denomination
$4 00
7.45
S. 20
10. 20
10. 20
10. 60
10.60
10.60
10. 60
10.60
11.30
11.30
11.30
11.30
11. 30
12.05
12. OS
12. 05
12.05
16.15
$8.00
14 90
16. 40
20.40
20.40
21. 20
21. 20
21. 20
21. 20
21. 20
22. 60
22. 60
22.60
22. 60
22. 60
24 10
24 10
24 10
24 10
32.30
$40. 00
74 50
82.00
102. 00
102. 00
106. 00
106. 00
106. 00
106. 00
106. 00
113. 00
113. 00
113. 00
113.00
113.00
120. 50
120. 50
120. SO
120. 50
161.50
$80. 00
149. 00
164 00
204 00
204 00
212. 00
212. 00
212. 00
212. 00
212. 00
226. 00
226. 00
226. 00
226. 00
226. 00
241. 00
241. 00
241. 00
241. 00
323.00
(2) From issue
date to each
interest payment date
Percent
1.60
2. 29
2.61
2.97
3. 18
3.35
3.47
.3.56
3.63
3.69
3.76
3.81
3.86
3.90
3.94
3.98
4.02
4 06
4 09
419
(3) From each
interest payment date to
maturity
Percent
3 4 28
3 4 37
3445
3447
3451
4 63
4 66
4 70
4 75
4 81
4 84
4 89
4 95
5.02
5. 13
5.21
5.35
5.63
6.46
' At all times, except that bond was not redeemable during first 6 months.
' Month, day, and year on which inlerest check is payable on issues of June 1,1965. For subsequent issue months add the appropriate number of months.
3 Yield on face value from each interest payment date lo maturity based on the schedule of interest checks prior to the June 1,1968 revision.
* Final check at maturiiy Improved by revision of June l, 1968.
216
19 6>8 REPORT OF T H E
SECRETARY OF T H E
TREASURY
TABLE 32
BONDS BEARING ISSUE DATES FROM DECEMBER 1, 1965 THROUGH MAY
p
viliip/^^^"^ price
ace vaiue|j^g^jgj^jjjJQj^ i ^^^ maturity value.
Period of time bond is held after issuo dato
J^year
1 year
IH years
2 years
2H years
.
3 years
3H years
4 years
4H years
5 years
5H years
6 years
6H years
7 years
7H years
Syears
SH years
9 years.9H years
10 years (maturity)^
2(6/1/66)
(12/1/66)
(6/1/67)
.
(12/1/67)
(6/1/6S)
....(12/1/68)
(6/1/69)
(12/1/69)
(6/1/70)
(12/1/70)
(6/1/71)
(12/1/71)
(6/1/72)
(12/1/72)
(6/1/73)
(12/1/73)
(6/1/74)
2 . . . (12/1/74)
..
(6/1/75)
(12/1/75)
$500
500
$1,000
1,000
$5,000
5,000
$10, 000
10, 000
(3) From each
(2) From issue
d te lo eaeh in- interest payment
terest payment date to maturity
dato
(1) Amounts of interest checks for each denomination
$5.50
9.70
10.75
10.75
10. 75
10.75
10.75
10.75
10. 75
10. 75
10.75
10. 75
10.75
10.75
10.75
10.75
10. 75
10.75
10.75
15.14
$11.00
19.40
21. SO
21.50
21. 50
21.50
21.50
21. 50
21. 50
21.50
21.50
21.50
21. 50
21. 50
21.50
21.50
21.50
21. 50
21.50
30.28
$55. 00
97.00
107. SO
107. 50
107. 50
107. 50
107. SO
107. 50
107. 50
107. 50
107. SO
107. 50
107. SO
107. 50
107. 50
107. 50
107. SO
107. 50
107. 50
151.40
PerceiU
$110.00
194 00
215. 00
215. 00
215. 00
215. 00
215. 00
215. 00
215. 00
215. 00
215. 00
215. 00
215. 00
215. 00
215. 00
215. 00
215. 00
215. 00
215. 00
302. 80
2.20
3.03
3. 45
3. 65
3.78
3.86
3.92
3.96
4 00
4 03
4.05
4 07
4 08
4 10
4 11
4 12
4 13
4 13
4 14
4.22
Percent
3 4 27
3430
3430
3430
4 40
4 41
4 42
4 43
4.44
4 46
4 48
4 50
4 53
4 58
4 64
4 72
4 87
5. 17
6.06
I
' At all limes, except lliut bond was nol redeemable during first 6 months.
2 Month, day, and year on which interest chock is payable on issues of llJocernber 1,1965. For subsequent issue months add the appropriate number of months.
3 Yield on face value from each inlcrosl payment date to matuiity based ou the schedule of inlerest checks prior to the June 1,1968 revision.
* Final check al maturity iniproved by revisio.1 of June 1, 1968.
TABLE 33
BONDS BEARING ISSUE DATES FROM JUNE 1 THROUGH NOVEMBER 1, 1966
X ace valueij^gjjgj^^pji^j^, ^^^^ maturity valu>
Period of time bond is held after issue dale
y2year
lyear
IH years
2 vears
2H years
Syears
SH years
4 years
4H years...
Syears
5H vears
6 years
6'/2 years
7 years
7H years
5 vears
SHye^^rs
9 vears
9H years
10 years (maturity)*
2(12/1/66)
....(6/1/67)
.-.(12/1/67)
(6/1/68)
...(12/1/68)
(6/1/69)
-..(12/1/69)
(6/1/70)
(12/1/70)
-(6/1/71)
(12/1/71)
(6/1/72)
(12/1/72)
(6/1/73)
...(12/1/73)
(6/1/74)
(12/1/74)
....(6/1/75)
(12/1/75)
....(6/1/76)
$500
500 I
$1,000
1,000 I
$5,000
5,000
$10,000
10,000
(1) Amounts of interest checks for each denomination
$5. 50
9.70
10.75
10.75
10.75
10. 75
10. 75
10.75
10. 75
10. 75
10. 75
10. 75
10.75
10. 75
10. 75
10.75
10. 75
10. 75
10. 75
15.49
$11.00
19.40
21. 50
21. 50
21. SO
21. 50
21. 50
21. 50
21. 50
21. 50
21. 50
21. 50
21. 50
21. 50
21. 50
21. 50
21. 50
21. 50
21. 50
30.98
$55. 00
97. 00
107. 50
107. SO
107. 50
107. 50
107. 50
107. 50
107. 50
107. SO
107. 50
107. 50
107. 50
107. 50
107. 50
107. SO
107. 50
107. 50
107. 50
154.90
$110. 00
194 00
215. 00
215. 00
215. 00
215. 00
215. 00
215. 00
215. 00
215. 00
215. 00
215. 00
215. 00
215. 00
215. 00
215. 00
215. 00
215. 00
215. 00
309. 80
(2) From issuo
dale to each
inlerest payment date
(3) From each
interest paymenl dale lo
maturiiy
Percent
Percent
2.20
3. 03
3.45
3. 65
3.78
3. 86
3.92
3.96
4 00
4 03
4 05
4 07
4 08
4 10
4 11
4 12
4 13
4 13
4 14
4.23
3427
3 4 30
3 4 30
4 40
4 41
4 42
4 43
4 44
4 45
4. 47
4 49
4 52
4 55
4 60
4 66
4 76
4 92
5.24
6.20
' At all tinies, except that bond was nol redeemable during first 6 months.
2 Month, day, and year on which inlerest check is payable on issues of Juno 1,1966. For subsequent issue months add the appropriate number of months.
3 Yield on face value from each interest paymenl date to maturity based on the schedule of interest checks prior lo the June 1,1968 revision.
* Final check al malurity iniproved by revision of June 1, 1968.
217
EXHIBITS
TABLE 34
BONDS BEARING ISSUE DATES FROM DECEMBER 1, 1966 THROUGH MAY 1, 1967
Fare valuo/^^^"^ P"'^*^
(Redemption' and maturity value.
Period of lime bond is held after issue date
H year
1 3-ear
IH years
2 years
2H.years
3 years
3H years
4 years
4H years
5 vears
5H vears
6 vears
a y years
7 years
7'/2 3-ears
8 years.
8H years
Oyears
OH years
10 years (maturity)^
2(6/i/67)
(12/1/67)
(6/1/68)
(12/1/68)
..(6/1/69)
(12/1/69)
(6/1/70)
(12/1/70)
(6/1/71)
(12/1/71)
(6/1/72)
(12/1/72)
(6/1/73)
(12/1/73)
(6/1/74)
..(12/1/74)
(6/1/75)
(12/1/75)
(6/1/76)
(12/1/76)
$500 I
500 I
$1,000 ;
1,000 i
$5,000
5,000
I
$10,000
10, 000
(1) Amounts of interest checks for eacli denominalion
$5. 50
9.70
10. 75
10. 75
10. 75
10. 75
10.75
10. 75
10.75
10.75
10.75
10. 75
10. 75
10. 75
10.75
10.75
10. 75
10. 75
10. 75
15.84
$11.00
19.40
21. 50
21.50
21. 50
21. 50
21.50
21.50
21.50
21.50
21. 50
21.50
21.50
21.50
21.50
21.50
21.50
21. 50
21.50
31.68
$55. 00
97.00
107. 50
107. 50
107. 50
107. 50
107. 50
107. 50
107. 50
107. 50
107. 50
107. SO
107. 50
107. 50
107. 50
107. 50
107. 50
107. 50
107. 50
158. 40
$110.00
194 00
215. 00
215. 00
215.00
215. 00
215. 00
215. 00
215. 00
215. 00
215. 00
215. 00
215. 00
215. 00
215. 00
215. 00
215. 00
215. 00
215. 00
316.80
(2) From issuo
date to each
interest payment date
(3) From each
intcresi payment dale lo
malurity
Percent
Percent
2.20
3.03
3.45
3.65
3.78
3.86
3.92
3.96
4 00
4 03
4 05
4 07
4 08
4 10
4 11
4 12
4 13
4 13
4 14
4 23
3 4 27
3 4. 30
4.40
4 41
4 42
4. 43
4.44
4 45
4. 47
4. 48
4 51
4.53
4 57
4 62
4 69
4 79
4 96
5.30
6.34
' At all tiines, except that bond was not redeemable during first 6 months.
• Month, day, and year on whicii interest check is payable on issues of December 1, 1966. For subsequent issue months add tho appropriate number of
months.
3 Yield on face value from each interest payment date to maturity based on the schedule of interest checks prior to the Juno 1,1968 revision.
< Final clicck at maturity improved by revision of June 1,1968.
TABLE 35
B O N D S ' B E A R I N G ISSUE DATES FROM JUNE 1 THROUGH NOVEMBER 1, 1967
Fare vahie/^^^"*^ P"*^^
'^^'^^'^^'"^ IRedemption'and maturity value.
Period of time bond is held after is
H year
1 year
IH years
2 years
2H years
3 years
3H vears
4 years
4H years
Syears
5H years
6 years
6H years
7 vears
7H y e a r s . . .
8 years
SH years
9 years
9H years.
10 years (maturity)^
2(12/1/67)
(6/1/68)
(12/1/68)
(6/1/69)
(12/1/69)
(6/1/70)
(12/1/70)
(6/1/71)
(12/1/71)
(6/1/72)
...(12/1/72)
(6/1/73)
(12/1/73)
(6/1/74)
(12/1/74)
(6/1/75)
(12/1/75)
(6/1/76)
(12/1/76)
(6/1/77)
$500
500
$1,000
1,000
$5,000
5,000
$10,000
10, 000
(1) Amounts of interest checks for each denomination
$5. 50
9. 70
10. 75
10.75
10. 75
10. 75
10. 75
10. 75
10. 75
10.75
10. 75
10. 75
10.75
10. 75
10. 75
10. 75
10. 75
10. 75
10. 75
16. 20
$11. 00
19. 40
21. 50
21. 50
21. 50
21. 50
21. 50
21.50
21. .50
21. 50
21. 50
21. 50
21.50
21. 50
21. 50
21. 50
21. 50
21. 50
21. 50
32.40
$55. 00
97.00
107. 50
107. 50
107. 50
107. 50
107. 50
107. 50
107. 50
107. 50
107. .50
107. 50
107. 50
107. 50
107. 50
107. 50
107. 50
107. 50
107. 50
162.00
$110. 00
194 00
215. 00
215. 00
215. 00
215. 00
215. 00
215. 00
215. 00
215. 00
215. 00
215. 00
215. 00
215. 00
215. 00
215. 00
215. 00
215. 00
215. 00
324. 00
(2) From issue
dale lo each
interest paymenl date
Percent
2. 20
.3. 03
3.45
3. 65
3. 78
3.86
3.92
3.96
4 00
4 03
4 05
4 07
4 08
4 10
4 11
4 12
4 13
4 13
4 14
4.24
(3) From each
interest payment date to
malurity
Percent
3 4 27
4. 40
4 41
4 42
4 42
4 43
4 45
4 46
4 48
4 50
4 52
4 55
4 59
4 64
4 72
4 83
5.01
5.38
6.48
' At all times, except that bond was not redeemable during flrst 6 monlhs.
- Montli, day, and year on which intcresi clicck is.payable on issues of June 1, 1967. For subsequent issuo months add the appropriate number of months.
3 Y'ield on face value from each interest paynient dale to malurity based on the schedule of intcresi checks prior to the June 1, 1968 revision.
* Final check al malurity improved by revision of June 1, 1968.
218
19 68 REPORT OF THE SECRETARY OF THE TREASURY
TABLE 36
BONDS BEARING ISSUE DATES FROM DECEMBER 1, 1967 THROUGH MAY 1, 1968
Face value/^^^"® P"*^*'
\Redemption' and maturity value.
Period of time bond is held after issue date
Hyear...
1 year
IH years
2 years.
2H years
Syears
SH years
4 years
4H years
5 years
SH years
6 years
6H years...
7 years
7H years
8 years
SH years
Oyears...
9H years
10 years (maturity) 3
2(6/1/68)
(12/1/68)
(6/1/69)
(12/1/69)
(6/1/70)
..(12/1/70)
(6/1/71)
(12/1/71)
(6/1/72)
(12/1/72)
(6/1/73)
.
(12/1/73)
(6/1/74)
.•
(12/1/74)
(6/1/75)
.
(12/1/75)
(6/1/76)
I...(12/1/76)
(6/1/77)
(12/1/77)
$500
500
$1, 000
1,000
$5, 000
5,000
$10, 000
10, 000
(1) Amounts of interest checks for each denomination
$5. SO
9. 7Ci
10. 75
10. 75
10.75
10.75
10. 75
10.75
10. 75
10. 75
10. 75
10. 75
10.75
10. 75
10.75
10.75
10.75
10.75
10.75
16.57
$ 1 1 . 00
19.40
21. SC'
21. SCi
21. SC'
2 1 . 5Ci
21. 50
21.50
21.50
21. 50
21. SCI
21. 50
21. SO
21. SO
21. SO
21. 50
21. 50
21. 50
21.50
33.14
$55. 00
97.00
107. 5(
107. SC
107. 5(
107. SC
107. SO
107. SO
107. 5C
107. SC107. SC'
107. SC'
107. SC'
107. 5C'
107. 5(1
107. SCi
107. SCI
107. SO
107. SO
165. 7 0
$110. 00
194 00
215. 00
215. 00
215. 00
215. 00
21.5. 00
215. 00
215. 00
215. 00
215. 00
215. 00
215. 00
215. 00
215. 00
215. 00
215. 00
215. 00
215. 00
331. 40
(2) From issue
date lo each
interest payment date
(3) From each
interest payment date to
maturity
Percent
Percent
2.20
3.03
3.45
3.65
3.78
3.86
3.92
3.96
4 00
4 03
4 05
4 07
4 OS
4 10
411
4 12
4 13
4 13
4 14
4 24
4 37
4 41
4 41
4 42
4 43
4 44
4 46
4 47
4 49
4 51
4 54
4 57
4 61
4 67
4 74
4 86
5.06
5.45
6.63
' At all times, except that bond was not redeemable during first 6 months.
3 Month, day, and year on which interest check is payable on issues of December 1,1967. For subsequent Issue months add the appropriate number of months.
5 Final check at malurity improved by revision of June 1, 1968.
Exhibit 8.—Department Circular, Public Debt Series No. 3-67, Revised, June 19,
1968, offering of United States savings notes
TREASURY
DEPARTMENT,
Washington, June 19,1968.
Treasury Department Circular, Public Debt Series No. 3-67, dated Feibruary
22, 1967, including the table incorporated therein (31 CFR 342), is hereby
amended and reissued as Treasury Department Circular, Public Debt Series No.
3-67, Revised.
AUTHORITY : Sees. 342.0 through 342.9 and the tables incorporated in the circular are issued under authority of Sections 18 and 20 of the Second Liberty
Bond Act, as amended (40 Stat. 1304, 48 Stat. 343, both as amended; 31 U.S.C.
753,754b).
Sec. 342.0. Offering of notes.—The Secretary of the Treasury hereby offers for
sale to the people of the United States, United States Savings Notes (also known
as "Freedom Shares" and generally referred to herein as "savirigs notes" or
"notes"). The notes may be purchased only in combination with United States
Savings Bonds of Series E of equal or greater face amounts. This offering,
which shall be effective June 1, 1968, will continue until terminated by the
Secretary of the Treasury.
Sec. 342.1. Definitions of words and terms as used in this offer.— (a) "Payroll
savings plan" refers to a voluntary program maintained by an employer whereby
its participating officers and employees authorize regular withholdings from
their salaries or wages for the purchase of Series E bonds.
(b) "Quarter" refers to a 3-month period of a year, as follows: JanuaryFebruary-March, April-May-June, July-August-September, or OctoberNovember-December.
Sec. 342.2. Description of notes.— (a) General.—Savings notes are issued
only in registered form and are nontransferable.
(b) Term.—A savings note will be dated as of the first day of the month in
which payment of the purchase price is received by an issuing agent.^ This
date is the issue date and the note will mature and be payable at its maturity
value 4 years and 6 months from such issue date. The note may not be called for
redemption by the Secretary of the Treasury prior to maturity, and is not
redeemable during the first year from issue date. Thereafter, the note may be
redeemed at fixed redemption values at the option and request of the owner.
^ Generally, Incorporated banks, trust companies and other agencies as have been duly
qualified as Issuing agents of Series B bonds.
EXHIBITS
219
(c) Denominations—prices—investment yield (interest).—Savings notes are
issued on a discount basis. The denominations and purchase prices are:
Purchase
Denomination
(dollara)
$25
_
20.25
$50
40. 50
$75
:
60. 75
$100
81.00
Interest will be paid as a part of the redemption value. A note will increase
in value one year after issue date and at the beginning of each half-year period
thereafter until maturity, at which time interest will cease. Interest on a
note redeemed before maturity will cease at the end of the interest period next
preceding the redemption date, except that if redeemed on a date on which the
redemption value increases, interest will cease on that date.
(1) Notes with issue dates June 1, 1968, or thereafter.—The investment yield
on a savings note with issue date of June 1, 1968, or thereafter, will be approximately 5 percent per annum compounded semiannually, if the note is held to
maturity, but the yield will be less if the note is redeemed prior to maturity
(see Table 1).
(2) Notes with issue dates May 1,1967, through May 1,1968.—^The investment
yield on savings notes with issue dates of May 1, 1967, through May 1, 1968, if
held to maturity, will be 4.74 percent per annum compounded semiannually, but
the yield will be less if the notes are redeemed earlier (see Table 2).
(d) Inscription and issue.—At the time of issue the authorized issuing agent
will (1) inscribe on the face of each note the name and address of the owner
and the name of the beneficiary, if any, or the names of the coowners and the
address of the first-named coowner,* (2) enter the issue date in the right-hand
portion of the note in the space provided for that purpose, and (3) imprint
thereunder, by use of the agent's validating stamp for the issue of United States
Savings Bonds, the date the note is actually inscribed. A note shall be valid only
if an authorized issuing agent receives payment therefor and duly inscribes, dates,
stamps, and delivers it.
(e) Stock for notes issued on and after June 1, 1968.—Savings note stock in
use prior to June 1, 1968, will be used for notes issued hereunder until such time
as new stock is printed and supplied to issuing agents. THE NEW INVESTMENT
YIELD AND REDEMPTION VALUES SHALL APPLY TO SUCH NOTES AS
FULLY AS IF EXPRESSLY SET FORTH IN THE TEXT. They will be redeemed
by all paying agents at the redemption values in Table 1. Accordingly, it is not
necessary for owners to exchange notes on old istock when the new stock is
available, but they may do so if they wish by presenting notes issued on and
after June 1, 1968, on old stock to any Federal Reserve Bank or Branch, or to
the Treasurer of the United States, Securities Division, Washington, D.C. 20220.
Sec. 342.3. Purchase—registration.— (a) Purchase.—Savings notes, in combination with Series E bonds, may be obtained from any authorized issuing agent,
or a Federal Reserve Bank or Branch, or the Office of the Treasurer of the United
States, Securities Division, Washington, D.C. 20220. Payments for the notes may
be made in the same manner as payments for United States Savings Bonds.
Issuing agents will deliver the notes at the time of purchase, or by mail at the
i:isk and expense of the United States, but only within the United States, its
territories and possessions, the Commonwealth of Puerto Rico and the Canal
Zone. No mail deliveries elsewhere will be made.
(b) Registration.—On original issue a savings note (1) is limited to registration in the name of a natural person (whether adult or minor), alone or with
another natural person as coowner or beneficiary, and (2) must be identical in
registration to the Series E bond purchased in combination therewith.
Sec. 342.4. Limitations.— (a) Purchases.— (1) Payroll savings plans.—^Under
a payroll savings plan, withholdings for notes shall not exceed the ratio of $1.08
for the notes to $1.00 for the Series E bonds and shall not exceed $20.25 per
weekly pay period, or $40.50 per biweekly or semimonthly pay period, or $81.00
per monthly pay period.
*When placing a taxpayer identifying number (an individual's social security account
number) on a note, the issuing agent should place the number on the note In the same
position as on the companion Series E bond.
220
19 68 REPORT OF THE SECRETARY OF THE TREASURY
(2) Others.—In combination purchases of notes and Series E bonds, other than
under a payroll savings plan, purchases of notes shall not exceed $350 (face
amount) a quarter, and in no event shall the annual limitation of $1,350
(face amount) be exceeded.
(b) Holdings.—Savings notes originally issued to any one person during any
one calendar year that may be held by that person at any one time is limited
to $1,350 (face amount).
Sec. 342;5. Taxation.— (a) General.—For the purpose of determining taxes
and tax exemptions, the increment in value represented by 'the difference between
the purchase price and the redemption value received for a savings note will be
considered as interest. The interest is subject to all taxes imposed under the
Internal Revenue Code of 1954. The notes are subject to estate, inheritance, gift,
or other excise taxes, whether Federal or State, but are exempt from all taxation
now or hereafter imposed on the principal or interest thereof by any State, or
any of the possessions of the United States, or by any local taxing authority.
(b) Federal income tax on notes.—An owner of savings notes who is a cash
basis taxpayer may use either of two methods for reporting the increase in the
redemption value of the notes for Federal income tax purposes, as follows:
(1) Defer reporting of the increase until the year of maturity, actual
redemption, or other disposition, whichever is earlier, or
(2) Elect to report the increase for the year in which it accrues, in which
case the election will apply also to all Series E bonds then owned by him and
those thereafter acquired, as well as to any other similar obligations sold
on a discount basis.
If method (1) is used, the taxpayer may change to method (2) without obtaining
permission from the Internal Revenue Service. However, once the election to
use method (2) is made, the taxpayer may not change the method of reporting,
unless he obtains permission to do so from the Internal Revenue Service. Inquiries
requesting further information on Federal taxes should be addressed to the
District Director, Internal Revenue Service, of the taxpayer's district, or the
Internal Revenue Service, Washington, D.C. 20224.
Sec. 342.6. Payment or redemption.— (a) General.—At any time one year or
more after the issue date, a savings note may be redeemed upon presentation and
surrender of the note with a duly executed request for payment to any Federal
Reserve Bank or Branch, or the Office of the Treasurer of the United States,
Securities Division, Washington, D.C. 20220, or to any financial institution which
has been designated as paying agent by the Secretary of the Treasury.
(b) Judgment creditors.—Payment of a savings note to the purchaser at a
sale under a levy or to the officer authorized to levy upon the property of the
owner under appropriate process to satisfy a money judgment will not be made
until one year after the issue date of the note.
Sec. 342.7. Governing regulations.—Savings notes are subject to the regulations
of the Treasury Department, now or hereafter prescribed, governing United
States Savings Bonds, contained in Department Circular No. 530, current revision
(31 CFR Part 315),^ except as otherwise specifically provided herein.
Sec. 342.8. Fiscal agents.—Federal Reserve Banks and Branches, as fiscal
agents of the United States, are authorized to perform such services as may be
requested of them by the Secretary of the Treasury in connection with the issue,,
delivery, redemption, and payment of savings notes. ^
Sec. 342.9. Reservations.— (a) Issue of notes.—The Secretary of the Treasury
reserves the right to reject any application for purchase of savings notes, in
whole or in part, and to refuse to issue or permit to be issued hereunder any
such notes in any case or any class or classes of cases if he deems such action
to be in the public interest, and his action in any such respect shall be final.
(b) Terms of offer.—The Secretary of the Treasury may at any time or fromi
time to time supplement or amend the terms of this offering of notes, or of any
amendments or supplements thereto.
JOHN K . CARLOCK,
Fiscal Assistant Secretary of the Treasury.
^ Copies may be obtained from any Federal Reserve Bank or Branch, or the Bureau of the
Public Debt, Division of Loans and Currency Branch, 536 South Clark Street, Chicago, 111.
60605.
221
EXHIBITS
TABLES OF REDEMPTION VALUES AND INVESTMENT YIELDS FOR UNITED STATES
SAVINGS NOTES
35ach table shows: (1) redemption values, by denomination, during each successive half-year term of
holding after first year i following the date of issue; (2) the approximate investment yield on the purchase
price from issue date to the beginmng of each half-year period; 2 and (3) the approximate investment jdeld
on the cm'rent redemption value from the beginning of each half-year period 2 to maturity. Yields are
expressed in terms of rate percent per annum compounded semiannually.
TABLE 1
NOTES BEARING ISSUE DATES BEGINNING JUNE 1, 1968
$25.00 $50.00 $75.00 $100.00
81.00
20.25 40.50 60.75
Denomination _
Issue price
Approximate investment yield
(1) Eedemption values during (2) On purchase
(3) On current
each half-year period after price from issue redemption value
the first year (values indate to beginfrom beginning
crease on first day of period
ning of each
of each half-year
shown) 1
half-year period 2
period to maturity 2
Period after issue date
Percent
ItolHyears
lHto2years_
2 to 2H years
21^ to 3 years. _.
3 to 33^ years
33/f; to 4 years
4 to 4H years.
MATURITY VALUE
(4H years from issue date)
$21.07 $42.14 $63.21
21.53 43.06 64.59
22.03 44.06 66.09
22.56 45.12 67.68
23.14 46.28 69.42
23.74 47.48 71.22
24.36 48.72 73.08
25.29
50.58
75.87
Percent
$84.28
86.12
88.12
90.24
92.56
94.96
97.44
4.01
4.13
4.26
4.37
4.50
4.60
4.67
101.16
5.00
6.28
5.44
5.60
5.79
6.01
6.43
7.64
< Savings notes are not redeemable before 1 year from issue date.
^ Except the fii'st half-year.
TABLE 2
NOTES BEARING ISSUE DATES FROM MAY 1, 1967 THROUGH MAY 1, 1968
$25.00 $50.00 $75.00 $100.00
81.00
20.25 40.50 60.75
Denomination _
Issue price
(1) Redemption values during (2) On purchase
(3) On current
each half-year period after price from issue redemption value
from beginning
the first year (values indate to beginof each half-year
crease on first day of period
ning of each
shown) 1
half-year period 2
period to maturity 2
Period after issue date
ItoD^years
1 ^ to 2 years
2 to 23^ years
23^ to 3 years3 to 33^ years
33^ to 4 years
4 to 43^ years
Approximate investment yield
MATURITY VALUE
(43^ years from issue date)
25.00
Percent
43.06
44.06
45.12
46.28
47.48
48.72
64.59 86.12
66.09 88.12
67.68
90.24
69.42
92.56
71.22 94.96
73.08
97.44
4.01
4.13
4.26
4.37
4.50
4.60
4.67
50.00
75.00
4.74
$21.07 $42.14 $63.21
.... 21.53
22.03
22.56
23.14
23.74
24.36
$84.28
100.00
Percent
4.95
5.04
5.12
5.20
5.22
5.24
5.25
i Savings notes are not redeemable before 1 year from issue date.
2 Except the first half-year.
Exhibit 9.—Amendment, September 5, 1967, of Department Circular Public Debt
Series No. 4-67, regulations governing agencies for the issue of United States
savings bonds of Series E and United States savings notes
TREASURY
DEPARTMENT,
Washington, September 5,1967.
Section 317.2, paragraph (a), and Section 317.3 of Department Circular, Public
Debt Series No. 4-67 (31 CFR, Part 317), are amended by revision as follows:
Sec. 317.2. Procedure for qualifying as an issuing agent.
(a) General.—An organization desiring to qualify as an issuing agent shall
obtain from and file with the Federal Reserve Bank an appropriate application
222
19 68 REPORT OF THE SECRETARY OF THE TREASURY
agreement form. If the organization desires to qualify as an issuing agent for
bonds only, it shall, before submission, amend the form furnished so that it refers
only to bonds. Through use of the appropriate form, the person authorized to act
on behalf of the organization will certify that it is authorized by its governing
body, or other body authorized to act in the premises, or by its charter, constitution or bylaws, to apply for and act as an issuing agent under the terms of the
agreement, these regulations and the circulars offering the bonds and notes for
sale, or, if appropriate, bonds only, and that applicable Federal or State law
permits or does not prohibit the organization from so acting. In addition, the
terms of any application-agreement filed hereafter and by reason of this paragraph include the provisions prescribed by Section 202 of Executive Order No.
11246, entitled "Equal Employment Opportunity" (3 CFR 167, 1965 Supplement).
An issuing agent qualified prior hereto, whether under the provisions of this
circular or Treasury Department Circular No. 657, as amended (rescinded effective February 24, 1967), requisitioning stock on any of the bases provided for
in paragraph (b) of this section, and which on or after November 30, 1966,
entered into a contract of deposit with the Treasury Department in accordance
with Treasury Department Circulars No. 92 (Revised) or No. 176 (Revised)
(31 CFR Parts 203 or 202), need take no action with respect to its qualification
hereunder. Any other issuing agent qualified prior hereto which desires to requisition stock on or after December 1, 1967, must signify its intent in writing to be
bound by and comply with the provisions of section 202 of the Order.
Sec. 317.3. Certificate of qualification.—Until such time as a certificate of
qualification is issued by the Federal Reserve Bank, an organization shall not
make any effort to or perform any acts as an issuing agent, or advertise in any
manner that it is authorized to perform such acts, or that it has applied for
qualification as an issuing agent. Upon approval of the application-agreement,
the Federal Reserve Bank will issue a notice of qualification to the organization,
whereupon it will be authorized to issue bonds and notes, or bonds only, as herein
provided, and become subject to the provisions of Part II of Executive Order
No. 11246. The Federal Reserve Bank will notify the organization if the application-agreement is not approved, or after qualification, at any such time as the
certificate of qualification is modified or terminated.
JOHN K . CARLOCK,
Fiscal Assistant Secretary.
Exhibit 10.—Department Circular, Public Debt Series No. 3-68, March 18, 1968,
regulations governing United States mortgage guaranty insurance company
tax and loss bonds
TREASURY DEPARTMENT,
Washington, March 18, 1968.
§ 343.0 Offering of bonds.—The Secretary of the Treasury, under the authority of the Second Liberty Bond Act, as amended, and pursuant to § 832(e) of the
Internal Revenue Code of 1954, offers for sale to, and only to, companies organized and engaged in the business of writing mortgage guaranty insurance within
the United States, bonds of the United States designated as mortgage guaranty
insurance company tax and loss bonds, hereinafter referred to as "tax and loss
bonds." This offering will continue until terminated by the Secretary of the
Treasury.
§ 343.1 Description of bonds.
(a) General.—Tax and loss bonds will be issued in registered form only and
in the exact amount paid by the purchaser. The bonds will not earn interest and
may not be transferred by sale, exchange, assignment, pledge or otherwise. They
may be reissued as provided in § 343.5.
(b) Term.—Tax and loss bonds will mature 10 years from their issue date
and will not be subject to call for redemption prior to maturity.
(c) Dating.—Tax and loss bonds will be issued as of the date of receipt of an
application for issue and remittance by the Office of the Treasurer of the United
States or a Federal Reserve Bank or Branch, except that all bonds purchased
during the month of March 1968 will be dated March 15, 1968. An application
received from a commercial bank for a customer will be treated as though
received on the date shown on its postmark, if the purchase price is transmitted
by credit to its Treasury Tax and Loan Account and the Certificate of Advice
is dated on or prior to that date.
EXHIBITS
223
§343.2 Purchase.—Tax and loss-bonds may be purchased over the counter
or by mail from the Office of the Treasurer of the United States, Securities Division, Washington, D.C. 20220, or the Federal Reserve Banks and Branches, which
will furnish application forms for the purchase of such bonds upon request. An
application properly completed and accompanied by a remittance for the full
amount of the bond applied for must be received by the Office of the Treasurer or a
Federal Reserve Bank or Branch before a bond will be issued. Any form of
exchange will be accepted subject to collection.
Banking institutions, generally, may submit applications for customers, but
only the Federal Reserve Banks and Branches and the Office of the Treasurer
are authorized to act as official agencies. Remittance of the purchase price may
be made through credit to Treasury tax and loan accounts.
§ 343.3 Redemption.—Tax and loss bonds may not be called for redemption
by the Secretary of the Treasury prior to maturity, but may be redeemed in
whole or in part at the owner's option at any time after three months from issue
date. To obtain redemption, a bond with the assignment for redemption properly
completed and executed must be presented to the Bureau of the Public Debt,
Division of Loans and Currency, Washington, D.C. 20226. Payment will be made
in accordance with the instruction in the assigment for redemption. The District
Director of the Internal Revenue District in which the owner's principal place
of business is located will be fumished a copy of the redemption advice. Upon
partial redemption of a bond, the remainder will be reissued as of the original
issue date.
§ 343.4 Taxation.—Tax and loiss bonds will be exempt from all taxation now
or hereafter imposed on the principal by any State or any possession of the
United States or of any local taxing authority.
§ 343.5 Reissue.
(a) General.—Reissue of a bond may be made only under the conditions specified in these regulations. A request for reissue must be made by an officer of the
owner authorized to assign the bond for redemption. An appropriate form may
be obtained from the Bureau of the Public Debt, Division of Loans and Currency,
Washington, D.C. 20226. A reissued bond, upon reissue, will bear the same issue
date as the original bond.
(b) Correction of error.—The reissue of a bond may be made to correct an
error in the original issue upon appropriate request supported by satisfactory
pi'oof of error.i
(c) Change of name.—An owner whose name is changed in any legal manner
after the issue of the bond 'Should ;submit the bond with a request for reissue, to
substitute the new name for the name inscribed on the bond. The signature on the
request for reissue should show the new name, the manner in which the change
was made and the former name, and must be supported by satisfactory proof
of the change of name.
(d) Legal succession.—A bond registered in the name of a company which
has been isucceeded by another company as the result of a merger, consolidation, incorporation, reincorporation, conversion, or reorganization, or which has
been lawfully succeeded in any manner whereby the business or activities of the
original organization are continued without substantial change will be paid to or
reissued in the name of the successor upon appropriate request on its behalf,
supported by satisfactory evidence of isuccessorship.
§ 343.6 General provisions.
(a) Regulations.—All tax and loss bonds shall be subject to the general regulations prescribed by the Secretary of the Treasury with respect to United States
securities which are set forth in the Treasury Department Circular No. 300,
current revision, to the extent applicable. Copies of the general regulations may
be obtained upon request from the Bureau of the Public Debt, Division of Loans
and Currency, Washington, D.C. 20226.
(b) Fiscal Agents.—Federal Reserve banks and branches, as fiscal agents of
the United States, may be authorized to perform such services as may be requested of them by the Secretary of the Treasury in connection with the issue,
delivery, redemption, reissue, and payment of tax and loss bonds.
(c) Reservations.—The Secretary of the Treasury may at any time, or from
time to time, supplement or amend the terms of this circular or any amendments
or supplements thereto.
HENRY H . FOWLER,
Secretary of the Treasury.
224
19 68 REPORT OF THE SECRETARY OF THE TREASURY
Legislation
Exhibit 11.—An act to amend section 14(b) of the Federal Reserve Act, as
amended, to extend for two years the authority of Federal Reserve banks to
purchase United States obligations directly from the Treasury
[ P u b h c Law 90-300, 90th Congress, H.R. 15344, May 4, 1968]
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assemUed, That section
14(b) of the Federal Reserve Act, as amended (12 U.iS.C. 355), is
amended by (Striking out "July 1, 1968" and inserting in lieu thereof "July 1, 1970" and by striking out "June 30, 1968" and inserting
in lieu thereof "June 30,1970".
Approved May 4, 1968.
Federal
^elfdment
80 Stat. 235.
Financial Policy
Exhibit 12.—Statement by Secretary Fowler, January 30, 1968, before the Senate
Banking and Currency Committee, on legislation to remove the gold cover
I am grateful to you for the opportunity to appear before you promptly in
support of the President's recommendation for removal of the gold cover.
The legislation before you would eliminate the 25 percent gold reserve requirement from Federal Reserve notes and the $156 million reserve held against U.S.
notes and Treasury notes of 1890.
The Administration believes that prompt action to remove the cover requirement is necessary for three principal reasons:
—Prospective normal increases in currency holdings—Federal Reserve notes—
by the public will "lock up" more and more of our "free" gold and soon reach a
point inhibiting further expansion of our pocket cash, one portion of our domestic
money isupply. Obviously we cannot tolerate such a situation.
—^There should be no doubt whatsoever that our total gold stock is available
to insure the free international convertibility between the dollar and gold at the
fixed price of $35 an ounce.
—The world knows as a fact that the strength of the dollar depends upon the
strength of the U.S. economy rather than upon a legal 25 percent reserve requirement against Federal Reserve notes, and it is clearly appropriate for this
fact now to be recognized in legislation.
Despite these facts, the gold reserve requirement against Federal Reserve notes,
instituted at a time when gold circulated freely in the domestic economy, is still
part of our law. It should be removed.
The need for prompt removal is apparent from a look at the simple arithmetic
of the problem.
The U.S. gold stock is now at $12 billion—the cover requirement is approximately $10.7 billion—the balance remaining is $1.3 billion.
The normal increase in notes will absorb over $500 million annually and a
further $150 million or more will be absorbed each year for domestic artistic
and industrial purposes. These two factors taken together mean that about $700
million a year of our free gold will be absorbed for domestic reasons. There is
thus but 2 years grace at most even if one assumes that no gold at all will be
needed for international purposes. Clearly we cannot proceed on such an
assumption.
Since the passage of the Federal Reserve Act more than a half century ago,
the function of gold in our monetary system has undergone a fundamental transformation. Gold no longer circulates freely as domestic currency in any major
country in the world. We Americans have not used gold as domestic currency
since 1934. Gold belongs in a nation's international reserves. The dollar serves
as a reserve currency to the world; the U.S. gold supply is available to convert
dollars held by national monetary authorities at a fixed price. As such, it is one
cornerstone—and a very main cornerstone—of our international monetary system.
Today, the strength of the dollar is not a function of this legal tie to gold—
a tie which is only applicable to one portion of our total money supply, Federal
EXHIBITS
225
Reserve notes. The value of the dollar—whether it be in the form of a bank
balance, a coin, or "folding money"—is dependent on the quantity and quality
of goods and services which it can purchase. It is the strength and soundness
of the American economy which stands behind the dollar. Balanced growth at
home and a strong competitive position internationally give the dollar we use
as everyday pocket money its strength.
An expanding U.S. economy needs an expanding supply of currency. Our main
form of currency is Federal Reserve notes. In the years ahead, we can expect
increases in Federal Reserve note circulation of about $2 billion a year. This
growth is a normal response to the public's demand for cash in a growing economy. It is basically a trend development, refiecting a growing population, a growing economy, and a growing number of transactions.
Not to move on the cover requirement at this time would only mean puttiJtrig
off the inevitable. We cannot afford to permit an outmoded provision of our law
to impinge on the nation's supply of pocket money.
Removal of this requirement is also of key importance from the viewpoint of
the role of the dollar and of gold in the international monetary system.
I know most members of this committee are well versed in the functions of
gold and the dollar in the international monetary system. Rather than take up
your time with a description at this point, I would refer you to a Treasury
report which was issued 2 weeks ago, entitled "Maintaining the Strength of the
United States Dollar in a Strong Free World Economy." ^
If this system, which has served the entire free world so admirably in the
past 20 years, is to continue to facilitate the growth of world trade and prosperity, we must assure that confidence in the system and in the strength of the dollar
is maintained. This requires action on four fronts:
—We must continue the long-standing U.S. policy of maintaining the golddollar relationship at $35 per ounce. This must not be open to question, and the
best way to make continuation of that policy crystal clear is to free our entire
gold stock for that purpose.
—We must assure that the U.S. economy grows in an environment of cost and
price stability through enactment of the anti-inflation tax and through expenditure controls and appropriate monetary policy.
—We must achieve sustained equilibrium in our balance of payments.
—We and the rest of the free world must put into place the plan for the creation of a new reserve asset agreed upon in Rio last September.
Our policy of maintaining the fixed relationship between gold and the dollar
at $35 an ounce for legitimate monetary purposes is one of the reasons why virtually all countries hold dollars in their reserves and why many of them hold
very large amounts of dollars. In addition, of course, countries hold dollars because, unlike gold, they can invest them in interest earning assets.
The monetary authorities of most of the major industrialized countries understand full well that the link between gold and domestic currencies is no longer
a pertinent and relevant fact and that gold is an international asset. Only three
other countries in the Group of Ten plus Switzerland, the major industrialized
countries, still maintain some link between their. domestic currencies and gold.
While foreign authorities are aware of the fact that the Federal Reserve can
suspend the cover requirement, they find it difficult to understand why the United
States, the worid's major reserve currency country, still maintains this legal
impediment to the free international use of gold.
Thus, legislative action on the cover requirement, by making it clear to the
world that the Congress as well as the Executive Branch are committing our
total gold stock to international use, is necessary to maintain confidence in the
dollar.
Removal of the gold cover will not solve the U.S. balance of payments problem
nor is it a substitute for the solution of that problem.
The need to achieve sustained equilibrium in our international payments position is essential to confidence in the dollar and the future stability of the international monetary system. The series of measures announced by the President
on January 1, with which you are all familiar, are designed to bring us to, or
close to, equilibrium this year. It is vital that they be successful. I ask, Mr.
Chairman, that the President's message be made a part of the record of these
hearings.
1 See exhibit 58.
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19 68 REPORT OF THE SECRETARY OF THE TREASURY
Conclusion
I urge the committee to consider and act promptly on the gold cover legislation
before you in order that, domestically, we can continue to be assured that the
Federal Reserve will be able to supply appropriate amounts of currency to meet
the needs of our growing economy for cash, and in order that our policy of maintaining the gold-dollar relationship—one of the major elements of confidence in
the dollar and the international monetary system—will not be open to question.
THE PRESIDENT'S MESSAGE TO THE NATION ON THE BALANCE OF
PAYMENTS, JANUARY 1, 1968
Where we stand today
I want to discuss with the American people a subject of vital concern to the
economic health and well-being of this Nation and the Free World.
It is our international balance of payments position.
The strength of pur dollar depends on the strength of that position.
The soundness of the free world monetary system, which rests largely on the
dollar, also depends on the strength of that position.
To the average citizen, the balance of payments, and the strength of the dollar
and of the international monetary system, are meaningless phrases. They seem
to have little relevance to our daily lives. Yet their consequences touch us all—
consumer and captain of industry, worker, farmer, and financier.
More than ever before, the economy of each nation is today deeply intertwined
with that of every other. A vast network of world trade and financial transactions
ties us all together. The prosperity of every economy rests on that of every other.
More than ever before, this is one world—in economic affairs as in every
other way.
Your job, the prosperity of your farm or business, depends directly or indirectly
on what happens in Europe, Asia, Latin America, or Africa.
The health of the international economic system rests on a sound international
money in the same way as the health of our domestic economy rests on a sound
domestic money. Today, our domestic money—the U.S. dollar—is also the money
most used in intemational transactions. That money can be sound at home—
as it surely is—yet can be in trouble abroad—as it now threatens to become.
In the final analysis its strength abroad depends on our earning abroad about
as many dollars as we send abroad.
U.S. dollars flow from these shores for many reasons—to pay for imports and
travel, to finance loans and investments, and to maintain our lines of defense
around the world.
When that outflow is greater than our earnings and credits from foreign
nations, a deficit results in our international accounts.
For 17 of the last 18 years we have had such deficits. For a time those deficits
were needed to help the world recover from the ravages of World War II. They
could be tolerated by the United States and welcomed by the rest of the world.
They distributed more equitably the world's monetary gold reserves and supplemented them with dollars.
Once recovery was assured, however, large deficits were no longer needed and
indeed began to threaten the strength of the dollar. Since 1961 your Government
has worked to reduce that deficit.
By the middle of the decade, we could see signs of success. Our annual deficit
had been reduced two-thirds—from $3.9 billion in 1960 to $1.3 billion in 1965.
In 1966, because of our increased responsibility to arm and supply our men
in Southeast Asia, progress was interrupted, with the deficit remaining at the
same level as 1965—about $1.3 billion.
In 1967, progress was reversed for a number of reasons:
—Our costs for Vietnam increased further.
—Private loans and investments abroad increased.
—Our trade surplus, although larger than 1966, did not rise as much as we
had expected.
—Americans spent more on travel abroad.
Added to these factors was the uncertainty and unrest surrounding the devaluation of the British pound. This event strained the international monetary system.
It sharply increased our balance of payments deficit and our gold sales in the last
quarter of 1967.
EXHIBITS
227
The problem
Preliminary reports indicate that these conditions may result in a 1967 balance
of payments deficit in the area of $3.5 billion to $4 billion—the highest since 1960.
Although some factors affecting our deficit will be more favorable in 1968, my
advisors and I are convinced that we must act to bring about a decisive
improvement.
We cannot tolerate a deficit that could threaten the stability of the international
monetary system—of which the U.S. dollar is the bulwark.
We cannot tolerate a deficit that could endanger the strength of the entire Free
World economy, and thereby threaten our unprecedented prosperity at home.
A time for action
The time has now come for decisive action designed to bring our balance of
payments to—or close to—equilibrium in the year ahead.
The need for -action is a national and international responsibility of the highest
priority.
I am proposing a program which will meet this critical need, and at the same
time satisfy four essential conditions:
—Sustain the growth, strength and prosperity of our own economy.
—^^Allow us to continue to meet our international Tesponsibilities in defense of
freedom, in promoting world trade, and in encouraging economic growth in the
developing countries.
—Engage the cooperation of other free nations, whose stake in a sound international monetary system is no less compelling than our own.
—Recognize the special obligation of those nations with balance of payments
surpluses, to bring their payments into equilibrium.
The first order of business
The first line of defense of the dollar is the strength of the American economy.
No business before the returning Congress will be more urgent than this: To
enact the anti-inflation tax which I have sought for almost a year. Coupled with
our expenditure controls and appropriate monetary policy, this will help to stem
the inflationary pressures which now threaten our economic prosperity and our
trade surplus.
No challenge before business and labor is more urgent than this: To exercise the
utmost responsibility in their wage-price decisions, which affect so directly our
competitive position at home and in world markets.
/ have directed the Secretaries of Commerce and Labor, and the Chairm<in of
the Council of Economic Advisers to work with leaders of business and labor
to make more effective our voluntary program of wage-price restraint.
1 have also instructed the Secretaries of Commerce and Labor to work with
unions and companies to prevent our exports from being reduced or our imports increased by crippling work stoppages in the year ahead.
A sure way to instill confidence in our dollar—both here and abroad—is through
these actions.
The new program
But we must go beyond this, and take action to deal directly with the balance of
payments deficit.
Some of the elements in the program I propose will have a temporary but
immediate effect. Others will be of longer range.
All are necessary to assure confidence in the American dollar.
1. Direct investment.—Over the past 3 years, American business has cooperated
with the Government in a voluntary program to moderate the flow of U.S.
dollars into foreign investments. Business leaders who have participated so
wholeheartedly deserve the appreciation of their country.
But the savings now required in foreign investment outlays are clearly beyond
the reach of any voluntary program. This is the unanimous view of all my
economic and financial advisers and the Chairman of the Federal Reserve
Board.
To reduce our balance of payments deficit by at least $1 billion in 1968 from the
estimated 1967 level, I am irwoking my authority under the Banking Laws to
establish a mandatory program that will restrain direct investment abroad.
This program will be effective immediately. It will insure success and guarantee
fairness among American business firms with overseas investments.
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19 68 REPORT OF THE SECRETARY OF THE TREASURY
The program will be administered by the Department of Commerce, and will
operate as follows:
—As in the voluntary program, overall and individual company targets will be
set. Authorizations to exceed these targets will be issued only in exceptional
circumstances.
—New direct investment outflows to countries in continental western Europe
and other developed nations not heavily dependent on our capital will be stopped
in 1968. Problems arising from work already in process or commitments under
binding contracts will receive special consideration.
—New net investments in other developed countries will be limited to 65 percent
of the 1965-66 average.
—New net investments in the developing countries will be limited to 110
percent of the 1965-^66 average.
This program also requires businesses to continue to bring back foreign earnings to the United States in line with their own 1964-66 practices.
In addition, I have directed the Secretary of the Treasury to explore with the
Chairmen of the House Ways and Means Committee and Senate Finance Committee legislative proposals to induce or encourage the repatriation of accumulated
earnings by U.S.-owned foreign businesses.
2. Lending by financial institutions.—To reduce the balance of paynients deficit
by at least another $500 million, I have requested and authorized the Federal
Reserve Board to tighten its program restraining foreign lending by banks and
other financial institutions.
Chairman Martin has asured me that this reduction can be achieved:
—without harming the financing of our exports;
—primarily out of credits to developed countries without jeopardizing the
availability of funds to the rest of the world.
Chairman Martin believes that this objective can be met through continued
cooperation by the financial community. At the request of the Chairman, however,
I have given the Federal Reserve Board standby authority to invoke mandatory
controls, should such controls become desirable or necessary.
3. Travel abroad.—Our travel deficit this year will exceed $2 billion. To reduce
this deficit by $500 million:
—I am asking the American people to defer for the next 2 years all nonessential
travel outside the Western Hemisphere.
—/ am asking the Secretary of the Treasury to explore with the appropriate
congressional committees legislation to help achieve this objective.
4. Government expenditures overseas.—We cannot forego our essential commitments abroad, on which America's security and survival depend.
Nevertheless, we must take every step to reduce their impact on our balance of
payments without endangering our security.
Recently, we have reached important agreements with some of our NATO partners to lessen the balance of payments cost of deploying American forces on the
Continent—troops necessarily stationed there for the common defense of all.
Over the past three years, a stringent program has saved billions of dollars in
foreign exchange.
I am convinced that much more can be done. I believe we should set as our
target avoiding a drain of another $500 million on our balance of payments.
To this end, I am taking three steps.
First, 1 have directed the Secretary of State to initiate prompt neg:otiations with
our NATO allies to minimize the foreign exchange costs of keeping our troops in
Europe. Our allies can help in a number of ways, including:
—The purchase in the U.S. of more of their defense needs.
—Investments in long-term United States securities.
I have also directed the Secretaries of State, Treasury and Defense to find
similar ways of dealing with this problem in other parts of the world.
Second, I have Instructed the Director of the Budget to find ways of reducing
the numbers of American civilians working overseas.
Third, 1 have instructed the Secretary of Defense to find ways to reduce further
the foreign exchange impact of personal spending by U.S. forces and their dependents in Europe.
Long-term measures
5. Export increases.—American exports provide an important source of earnings for our businessmen and jobs for our workers.
They are the cornerstone of our balance of payments position.
EXHIBITS
229
Last year we sold abroad $30 billion worth of American goods.
What we now need is a long-range systematic program to stimulate the fiow of
the products of our factories and farms into overseas markets.
We must begin now.
Some of the steps require legislation :
/ shall ask the Congress to support an intensified five year, $200 million Commerce Department program to promote the sale of American goods overseas.
I shall also ask the Congress to earm^ark $500 million of the Export-Import Bank
authorization to:
—Provide better export insurance.
—Expand guarantees for export financing.
—Broaden the scope of Govei-nment financing of our exports.
Other measures require no legislation.
I have today directed the Secretary of Commerce to begin a Joint Export Association program. Through these Associations, we will provide direct financial
support to American corporations joining together to sell abroad.
And finally, the Export-Import Bank—through a more liberal rediscount
system—will encourage banks across the Nation to help firms increase their
exports.
6. Nontariff barriers.—In the Kennedy Round, we climaxed three decades of
intensive effort to achieve the greatest reduction in tariff barriers in all the history of trade negotiations. Trade liberalization remains the basic policy of the
United States.
We must now look beyond the great success of the Kennedy Round to the prohlems of nontariff barriers that pose a continued threat to the growth of world
trade and to our competitive position.
American commerce is at a disadvantage because of the tax systems of some of
our trading partners. Some nations give across-the-board tax rebates on exports
which leave their ports and impose special border tax charges on our goods entering their country.
International rules govern these special taxes under the General Agreement
on Tariffs and Trade. These rules must be adjusted to expand international trade
further.
In keeping with the principles of cooperation and consultation on common problems, I have initiated discussions at a high level with our friends abroad on these
critical matters—^particularly those nations with balance of payments surpluses.
These discussions will examine proposals for prompt cooperative action among
all parties to minimize the disadvantages to our trade which arise from differences among national tax systems.
We are also preparing legislative measures in this area whose scope and nature
will depend upon the outcome of these consultations.
Through these means we are determined to achieve a substantial improvement
in our trade surplus over the coming years. In the year immediately ahead, we
expect to realize an improvement of $500 million.
7. Foreign investinent and travel in the United States.—We can encourage
the flow iof foreign funds to our shores in two other ways :
—First, by an intensified program to attract greater foreign investment in
U.S. corporate securities, carrying out the principles of the Foreign Investors Tax
Act of 1966.
—Second, by a program to attract more visitors to this land. A Special Task
Force headed by Robert McKinney of Santa Fe, N. Mex., is already at work on
measures to accomplish this. I have directed the Task Force to report within 45
days on the immediate measures that can be taken, and to make its long-term
recommendations within 90 days.
Meeting the world's reserve needs
Our movement toward balance will curb the fiow of dollars into international
reserves. It will therefore be vital to speed up plans for the creation of new reserves—the Special Drawing Rights—in the International Monetary Fund. These
new reserves will be a welcome companion to gold and dollars, and will strengthen
the gold exchange standard. The dollar will remain convertible into gold at $35
an ounce, and our full gold stock will back that commitment.
A time for responsibility
The program I have outlined is a program of action.
It is a program which will preserve con'fidence in the dollar, both at home
and abroad.
318-223—69
17
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19 68 REPORT OF THE SECRETARY OF THE TREASURY
T h e U.S. dollar has wrought the greatest economic miracles of modern times.
I t stimulated the resurgence of a war-ruined Europe.
I t h a s helped to bring new strength a n d life to the developing world.
I t h a s u n d e r w r i t t e n unprecedented prosperity for the American people, who are
now in the 83d month of sustained economic growth.
A strong dollar protects and preserves the prosperity of businessman and
banker, worker and farmer—here and overseas.
The action program I have outlined in t h i s message will keep the dollar strong.
I t will fulfill o u r responsibilities to the American people a n d to the free world.
I appeal to all of our citizens to join me in t h i s very necessary and laudable
effort to preserve our country's financial strength.
Exhibit 13.—Statement by Secretary Fowler, F e b r u a r y 15, 1968, before t h e Joint
Economic Committee, on economic and financial policies and p r o g r a m s
I t is a pleasure to be with you again this morning. These a n n u a l hearings
on the President's Economic Report are always an important occasion. They
provide us with a valuable opportunity to review the performance of the
economy and to chart a course for the future.
In my view this is a year in which economic a n d financial policy should be
directed toward reversing decisively the trend in 1967 to increasing deficits in
our internal budget and our international balance of payments. We should move
back toward balance in our budget and our international payments—and thereby
assure a balanced economy, properly poised to discharge our national and international responsibilities—in w a r or peace—at home or abroad. With the nation
engaged in a costly confiict abroad, we must act a t home so as to m a i n t a i n the
stability of the economy and the strength of the dollar.
We meet after a year in which the domestic economy moved ahead, slowly a t
first, then at a faster pace—in fact, too fast a pace to be sustained. Meanwhile,
the balance of payments, which h a d shown s h a r p improvement in 1965, and
held its own in 1966 in face of the mounting foreign exchange costs resulting from
the conflict in Southeast Asia, took a s h a r p t u r n for the worse in 1967. Prompt
measures a r e needed—and are being taken—^to cut t h e payments deficit. But,
there is an equally pressing need to cut the Federal budget deficit and bring our
domestic finances into better order.
I n the domestic economy, real growth resumed a t a rapid r a t e in the last two
q u a r t e r s of 1967 after an anticipated inventory adjustment in the first half
of the year, but it h a s been accompanied by far too strong a rise in costs and
prices.
Moderation of the u p w a r d pressures on our costs and prices must be a continuing objective in the period ahead. We m u s t reverse the trend t o w a r d a
spiralling inflation. An economic climate conducive to a r e t u r n to stable costs and
prices—in the p a t t e r n of 1961-65—would protect our t r a d e balance against a
short-term floodtide of imports and a long-term deterioration in competitive position. I t would also; avoid the risk of an excessive a n d unsustainable r a t e of
growth t h a t could terminate not in an inventory adjustment like early 1967
but a recession like those of other years.
•Since mid-1965, the economy h a s absorbed nearly a $25 billion increase in
national defense spending levels without resort to w a r t i m e controls and without
lasting interruption to the economy's advance. This h a s been a remarkable
achievement. But, it h a s not all been smooth sailing. We have seen how a surge of
demand in an economy near full employment can distort financial flows, boost
interest r a t e s , lead to excessive inventory buildup, disrupt cost-price stability,
and touch off a sharp rise in imports. W i t h total public and private spending
now rising strongly, t h a t same unwelcome p a t t e r n could begin to unfold once
again.
As the President stated in his J a n u a r y 1 Message to the Nation on the Balance
of P a y m e n t s : "No business before the returning Congress will be more urgent
t h a n t h i s : To enact the anti-inflation t a x which I have sought for almost a year.
Coupled with our expenditure controls and appropriate monetary policy, this
will help to stem the inflationary pressures which now t h r e a t e n our economic
prosperity and our t r a d e surplus."
P r o m p t application of a degree of flscal r e s t r a i n t is, indeed, essential for the
health of the economy and the soundness of our financial position—at home and
EXHIBITS
231
abroad. We dare not allow a highly stimulative fiscal policy to conjoin with increasing demand in most areas of the private sector. Whether fiscal restraint
will be applied or whether we will depend exclusively on monetary restraint
with its imbalancing impact is, and has been for some time now, the overriding
domestic economic policy issue. Fiscal restraint is also the key to the success
of our overall balance of payments program and the maintenance of confidence in
the dollar and the international monetary system.
The domestic economy in 1967
With the President's Economic Report before you, there is no need for me to
comment on .last year's domestic economic developments in any detail. I will
concentrate on a few features of last year's experience that are most important
for an understanding of our present situation.
As we find it now, the economy is rapidly gaining momentum, while a year
ago that was far from the case. A year ago, it was clear that some adjustment
of a temporarily excessive inventory position would have to take place in
1967. It was important to insure that this adjustment occurred within the
context of a generally prosperous private economy. Therefore, it was decided
to complement the relaxation of monetary stringency that was already in
progress with a degree of fiscal support during the first half of 1967.
Between the end of 1966 and the middle of 1967, the Federal sector of the national income accounts moved from a deficit position of about $3 billion annual
rate to a deficit approaching $15 billion annual rate. During the same period,
monetary policy also moved to a significantly easier position. For example, the
level of "free reserves" which averaged more than a minus $150 million in late
1966 rose near a plus $300 million by mid-1967.
Contrary to the fears of ithose who saw recession lurking around every corner,
final sales increased istrongly in the first half of the year while the inventory
adjustment ran its course. This was made possible, in large part, by fiscal and
monetary action which had been accurately timed to the needs of the economy.
During the second half of last year, the economy moved ahead briskly, with
production interrupted only temporarily by work stoppages and growth in final
sales tempered only by a personal saving rate rising to unusual levels. Because
the first half of 1967 was relatively weak, the full extent of the economy's resurgence tends to be concealed in statistics for the full year. For example, gross
national product in current prices rose at about a 6 percent annual rate between the end of 1966 and 1967. But this is the result of an annual rate rise of
a little less than 3^/^ percent in the first half of 1967 and 8^2 percent in the second half. Real output grew a t little more than a 1 percent annual rate in the first
half of 1967 but at about 4:% percent in each of the last two quarters of the
year.
This rebound has left only a narrow margin of unutilized efficient resources
readily available which can be drawn upon to boo^t this year's rate of growth in
output. It may appear that there is still some margin of spare manufacturing
capacity with operating rates in the 85 percent range—about 6 points below the
peak 1966 levels. But much of this unused capacity is likely to be the high cost
and less efficient capacity. In any event, the utilization rate by itself is a very
unreliable indication of slack because of the shortage of skilled and semiskilled
labor. The overall unemployment rate has fallen to 3% percent—the lowest in
14 years. The rate for adult males is 2.3 percent also as low as at any time since
the early 1950's.
Despite the slow first half of 1967, the resumption of strong growth in the
economy during the second half set off a sharp advance in prices. The comprehensive GNP price deflator which had increased at an annual rate of about 2%
percent in the flrst half of the year advanced at nearly a 4-percent rate in the
second half. This second-half advance was the largest in more than a decade
despite the fact that farm product prices were falling during much of 1967.
The economy is in grave danger of excessive overheating. Restraint or the
risk of spiralling inflation are the alternatives. If we move decisively to apply
restraint, we can reduce inflationary pressures and expect a year of stable
growth. The economy enters the 8th year of its record breaking expansion in
better balance than a year ago. Then there was an inventory overhang and the
housing industry was depressed. Now, the rate of inventory accumulation is in
better relation to sales and housing has made a strong recovery. But there is
still a serious imbalance domestically that must be removed. That imbalance is
in the Federal sector. The Federal budget is in heavy deficit at a time when there
is a need, not for steady stimulus, but for a sharp and decisive movement toward
fiscal restraint.
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19 68 REPORT OF THE SECRETARY OF THE TREASURY
Budgetary policy: The need for restraint
In the period from late 1965 to the middle of last year, the Federal fiscal position operated in a consistently stabilizing direction. Opinions may differ as to
whether or not fiscal actions were always large enough or precise in their timing.
But, the general profile of the Federal fiscal position was appropriately geared to
the isltate of the economy. In the third quarter of 1965, with the Vietnam buildup
barely underway the Federal deficit on national income accounts basis was running in excess of $3 billion annual rate. By the end of the year, rising revenues
had pulled the NIA budget to a position of near balance. In early 1966, the rise
in payroll taxes for social security and the Tax Adjustment Act, along with the
revenues generated by the faster pace of activity, swung the NIA budget into a
surplus of $3 billion annual rate by mid-1966.
By the third quarter of 1966, the NIA budget had moved back to a position of
near neutrality. And, by the final quarter, with signs of a possible inventory
adjustment appearing, that budget moved further in the direction of stimulus
to a $3.3 billion rate of deficit. As the economy slowed further early in 1967, the
budget moved to an even more stimulative position with an NIA deficit which
approached a $15 billion annual rate by the middle of the year.
But the large Federal deficits have overstayed their time. The rate of deficit
in the exuberant last half of 1967 narrowed slightly but still averaged in the
$12 billion range—clearly inappropriate in a high employment economy with
private demand strong and rising. Increasingly, the effects of that deficit are
being registered in rising prices and a deteriorating trade balance.
As a consequence of the President's proposed fiscal actions, initially proposed
last August 3 in his Tax Message and renewed this January, the Federal NIA
deficit would be reduced from the $12.5 billion rate of 1967 to an estimated $5
billion for calendar il968. In terms of fiscal years, the reduction would be from
$10 billion in 1968 to $2.5 billion in 1969.
Without fiscal action, the NIA deficit would remain near its present levels
and would be an excessively stimulative influence on our high employment
economy. Continuation of deficits on such a scale would greatly increase the
risk of more inflation and further short-run deterioration in our trade balance.
Also, with monetary policy now pointed in the direction of restraint, an excessively large budget deficit with a corresponding need for continuing heavy
Federal borrowing would tip the odds toward a return to tight money conditions. Interest rates are already at extremely high levels in terms of our historical experience and a move to even higher rates and reduced availability of
credit for housing. State and local needs, and small business would be a very
unhappy prospect.
The President's fiscal program includes expenditure restraint as well as the
proposed tax increase. The expenditure cuts in specific programs totaling $4.3
billion achieved by joint congressional and Executive action late last year were
in the spirit of the recommendations made by your committee in its last annual
report.
The current budget also proposed program reductions and reforms, totaling
.$2.9 billion in fiscal 1969, with the expenditure savings spread over several
years. As a result, outlays in relatively controllable civilian programs will be
virtually stable bet^^een fiscal 1968 and 1969. The net rise of $0.5 billion is made
up of decreases in controllable civilian outlays of $2.5 billion and increases of
$3.0 billion. About two-thirds of the $3 billion increase is for payments on prior
contracts and commitments.
The total expenditure increase for fiscal 1969, on the unified budget basis, of
$10.4 billion is almost entirely accounted for by rising outlays for defense and
for relatively fixed charges under present laws.
While there may be considerable differences of opinion about the choice of
priorities, there has been a definite application of priorities. The prompt enactment of the proposed tax program is the only realistic way of assuring the timely
reduction in the fiscal 1969 deficit of $13 billion or any sum approaching that
magnitude. And every day that passes without a tax increase adds $33 million
to the fiscal 1968 deficit. Already delay has cost $4.5 billion in revenues.
Over the years, the activities of this committee have done a great deal to
elevate the level of public discussion of economic issues and have contributed to
much more informed attitudes on public policy. With your help we have gone
beyond an earlier, and misleading, orthodoxy which did not assign fiscal policy
any role in stabilizing the economy. There is a need now to demonstrate that
fiscal policy can appropriately be used to restrain as well as to stimulate. Your
EXHIBITS
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support of the President's fiscal recommendations—on the basis of their economic logic—^would be an effective and infiuential endorsement of the practice,
as well as the theory, of stabilizing fiscal policy.
Financial policies and debt management
In the financial area, we look back on a year of strong demand pressures in
our money and capital markets. Because of these strong demands, interest rates
moved higher despite a larger flow of savings and monetary ease during most
of ,the year. Money market rates did decline in the first half of the year but then
moved up rather steadily. Longer-term interest rates dipped only temporarily
in early 1967 and rose during the balance of the year.
The financial demands of the private sector were strong even while the economy
was moving more slowly in early 1967. Partly in reaction to the credit squeeze
of 1966, efforts were made to rebuild liquidity and provide for possible future
credit needs. As the year progressed, an upturn in planned business plant and
equipment expenditures and a rise in inventory investment were adding to
corporate financial requirements. Long-term corporate security offerings and
placements (including refundings) reached $24 billion in 1967, about 36 percent
above the sizeable 1966 total. State and local issues in 1967 are estimated at
$141/2 billion, about 27 percent above 1966. Net additions to mortgage debt at
$22 billion were only slightly above the 1966 total, but were rising throughout
the year as savings inflows to mortgage lenders continued in large volume.
With private demands strong all year, the major change was in the Federal
fiscal position which swung from debt repayment to heavy net borrowing. In terms
of the new budget concept of the Federal sector's net financing demand on the
economy, which includes the Federal Reserve System with the private sector,
there was a net repayment of $5% billion in the January-June 1967 period.
Adding the financing activities of the Federal home loan banks and the Federal
land banks and subtracting security purchases of the Federal Reserve, there
was a net repayment of $11 billion to the private sectors. In contrast, repayments
to the private sectors were only $2 billion in January-June 1966 and $4^/^ billion
in January-June 1965.
In the second half of last year, the Federal sector made net credit demands
on the private sector of about $18 billion. This was sharply above the net credit
demands of roughly $5 billion each in the July-December periods of 1964, 1965,
and 1966. The combination of strong private and Government demands for credit
exerted strong upward pressure on interest rates during the second half of 1967.
Fortunately, though, there was no large scale diversion of funds away from the
mortgage market last year as there had been in 1966. However, saving inflows
at thrift institutions have been slowing down and there is no room for complacency. Prompt tax action is still the best insurance of a continued recovery
in housing.
For the current half-year, even with prompt action on the tax bill, the Federal
sector, including the home loan banks and the land banks, may make a contraseasonal net credit demand of $5 billion or more on the rest of the economy,
including the Federal Reserve.
Borrowing requirements in fiscal 1969 will, of course, depend very much on
the outcome of the President's fiscal proposals. In the absence of tax action,
the fiscal 1969 deficit on the new unified budget basis would exceed $20 billion
and require roughly that amount of borrowing. To this would be added home
loan banks and land bank requirements and the amount of FNMA borrowing
for secondary market operations in its proposed new private ownership status.
The impact of such a volume of Federal borrowing may be judged from the
following comparison. In the period fiscal 1961 through fiscal 1967, Federal
borrowing averaged less than $5 billion annually.
Large scale deficit financing in overstrained financial markets diverts credit
fiows and drives up interest rates. It is not a question of whether or not the
Government will get its money—of course it will. But, in.the process, the cost
of all credit is driven up and many private borrowers are knocked entirely out
of the market. At the present time, most interest rates are below their end of
1967 levels but they have begun rising again.
Recently the Treasury has undertaken sizeable refunding, prerefunding, and
cash financing operations, all of which have been successful. But the new securities had to carry historically high rates of interest in order to attract investors.
Thus, prompt and favorable action is needed on the President's tax proposals
to raise $16 billion in fiscal 1968 and 1969. This would shrink the budget deficits
and hold Federal borrowing to manageable levels.
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19 68 REPORT OF THE SECRETARY OF THE TREASURY
The need for a return to cost-price stability
Our overall price record since the current expansion began in early 1961
remains a good one. During this period the average percentage rise in U.S. consumer prices has been less than in any otlier major country. Even since mid-1965
our record is better than that of most major indusitrial comitries. But there are
clear warning sig-ns that this good record is in danger.
One of last year's more disturbing developments was the much faster advance
of prices after midyear. The gain in gross national product in the second half
of 1967 was impressive—a rise of $32 billion despite a sizable loss because of
the auto strike. But nearly half of the $32 billion rise was eaten up in the form
of higher prices. By way of contrast, in the period from early 1961 to mid-1965 less
than one-quarter of the gain in GNP reflected higher prices. And even from
mid-1965 to mid-1967, the proportion of GNP gain attributable to rising prices was
less than it has been recently.
Since niid-1965, there have been three fairly distinct periods as far as price
changes are concerned. From mid-1965 through September 1966, both consumer
and industrial prices rose strongly. The rise was triggered by the burst of demand
which quickly carried the economy to near-capacity levels of operation. This set
off a process in which wage advances and price increases began to interact. From
about September 1966 through the middle of last year, there was some relief from
the rapid rate of price advance as the pace of economic advance slowed temporarily, but costs continued to move up. Finally, in the second half of last year,
as demand strengthened, the rate of price advance accelerated once more.
We are now at the point where so-called demand-pull and cost-push factors are
threatening to interact with one another in a dangerous manner. Once an inflationary process is well established, any distinction between demand-pull and costpush breaks down entirely. Rises in costs are reflected in higher prices and
money incomes which contribute to increased spending, which drives up costs
and prices, and so on. Fiscal and monetary restraint can slow this upward spiral
by cutting back demand, but the measures may have to be very severe if the
inflationary process is allowed to gain momentum. This we must avoid.
The real risk of recession does not lie in the prospect of too much flscal restraint from the President's program. Rather it lies in the threat that flscal inaction and too much demand will aggravate the inflationary pressures that are
already all too apparent. The prompt application of fiscal restraint is our best insurance against further inflation and the risk of an eventual return to "boom
and bust."
Balance of payments
As you know, the immediate background of the action program to bring our
payments to or close to equilibrium this year which the President announced
in his New Year's Day Message included:
—the devaluation of the British pound with its disturbing impact on the international monetary system and the value of currencies ;
—a sharp increase in our gold sales during the final quarter of 1967, reflecting
the uncertainty and unrest on international foreign exchange markets associated
with the devaluation of the British pound; plus
—indications of a very sharp deterioration also, during the fourth quarter,
in our payments deficit, following some decline in the second and third quarters
from the levels of 1965 and 1966.
The preliminary figures on our fourth quarter and full-year 1967 payments
deficit appear in the regular quarterly Departnient of Commerce press release
being issued today. They show :
—A deficit for the year, on the liquidity basis, of $3,572 million—which is near
the lower end of the $3.5 billioii-$4.0 billion range anticipated in the President's
Message but, nevertheless a deterioration of $2.2 billion compared with the 1966
results. The deficit for the year, on the official settlements basis, was $3.4 billion.
—A seasonally adjusted liquidity deficit for the fourth quarter alone of $1,832
million. This represents—a rate of deficit more than three times as large as the
$580 million seasonally adjusted average for the first three quarters of the year;
and the worst deficit we have experienced in any single quarter, at least since
the third quarter of 1950 following the outbreak of the Korean War.
—A sharp deterioration in our merchandise trade account during the final
quarter—resulting in a trade surplus for the full-year 1967 virtually identical
with that of 1966 in place of the moderate improvement which we had expected
on the basis of the experience of the first three quarters.
EXHIBITS
235
The details of this increase in our fourth quarter payments deficit will not be
available for several weeks. But it is clear that the most worrisome element
in the picture was the drop in our trade surplus. Imports rose over $500 million
while exports dropped nearly $200 million from the January-September averages. Our trade picture thus accounted for more than half of the increase in
our liquidity deficit above the levels of the first three quarters.
—A second major development in the fourth quarters was the liquidation by the
U.K. Government of the $570 million remaining balance from its long-term
investments in U.S. securities. This action, of course, was taken in connection
with the devaluation crisis.
—Unfortunately, as noted earlier, the detail necessary to evaluate other factors
simply is not yet available. Such other categories of our international payments
for whicii preliminary figures are now available show generally rather small—
and largely offsetting—changes as compared with the first three quarters of the
year.
Last month I released a Treasury Department report entitled "Maintaining
the Strength of the United States Dollar in a Strong Free World Economy."
This document details the background and reasons for the Action Program announced by the President. It describes what we have done to date, and what we
propose to do, both over the short- and long-term. Copies of this report are
available to each member of the committee.
The President's Action Program underlines the urgent need for a tight lid on
expenditures, appropriate monetary policy and a more effective voluntary program of wagie-price restraint. As the President's Economic Report points out:
"The avoidance of excessive demand in our economy is crucial to the strength
of the dollar as well as to our domestic prosperity.
"If we place too much pressure on our resources, U.S. buyers will turn abroad
for supplies and our imports will soar. And if our prices rise, we will weaken our
export competitiveness and attract even more imports—not just immediately,
but for years to come."
I shall not review in detail the various selective measures through which we
seek an improvement of $3 billion in our balance of payments during the year
1968. They are set forth clearly in the Presidential statement which appears at
the beginning of the Treasury report on the Action Program.
The United States recognizes its responsibility for adjusting its own balance
of payments, and it does not intend to shirk this responsibility. At the same time,
it must be recognized that the U.S. balance of payments is part of a world pattern of payments. The counterparts of the deficits of some countries are the
surpluses of other countries. Because of the concentration of payments surpluses
in Continental Western Europe, it is primarily to this group of countries
that we must look for cooperative actions facilitating the progress toward international equilibrium that the U.S. program would make possible. The relationship
of the U.S. deficit and the persistent surplus of these countries is examined in
Chapter IX of the Treasury report.
We have undertaken both bilateral and multilateral consultations with other
countries regarding our action program. Broadly speaking, the response of the
Continental European countries has been gratifying. They recognize and accept
the fact that their surpluses must fall along with the correction of the U.S.
deficit. There is some concern regarding the more favorable treatment of nonContinental countries in several phases of our program but there is appreciation
that a nondifferentiated program would have created painful adjustment problems for countries least able to make these adjustments. There are encouraging
indications of a general readiness on the part of individual countries to adjust
their fiscal and monetary policies to the new situation created by the U.S.
program.
The European nations strongly emphasize that the full objectives of the program will not be achieved without the primary and essential component of
restraint on the U.S. economy through fiscal and monetary policy, supplemented
by intelligent and responsible actions by management and labor to limit the
rise in unit costs to a noninflationary level. In particular, action on the tax
increase has become a critical and symbolic test, in European eyes, of our ability
to control domestic inflationary pressures. It is the acid test of fiscal responsibility and confidence in the future of the dollar in financial circles here and
abroad.
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19 6-8 REPORT OF THE SECRETARY OF THE TREASURY
International finance
One of the difficulties faced in discussion of our balance of paynients problem
is that it is hard toput in terms that are analogous to the familiar financial problems of doing business in the United States. The United States can be likened
to a large trader and investor, as set forth on pages 12 and 13 of the President's
Economic Report. It also is the most important international banking center.
About half of our liquid liabilities of $33 billion are holdings of foreign monetary
authorities, the United States acting as a bank. The official dollar holdings of
foreign countries are part, and in many cases a large part, of the ultimate
national reserves that foreign nations hold to meet unforeseen contingencies.
Thus we have the responsibility that falls upon a bank to maintain at all times
the unquestioned confidence of the depositors in its liquidity as well as its
solvency.
We need to have reserves that will assure that our depositors can spend their
dollars in all the major countries of the world. Some of these countries, notably
in Continental Europe, will expect the United States as a bank to pay them, in
effect, not in dollars but in gold or in claims on the International Monetary Fund
as they acquire dollars beyond their customary official holdings of dollars. They
have the alternative of reinvesting some or all of these dollar receipts in private
markets—and this alternative can be particularly helpful when borrowing
demands in the European capital markets are heavy—but there is likely at times
to be some cashing of dollars into gold.
Although the world has come a long way toward accepting dollars as a regular
and normal proportion of world reserves, it is still true that gold comprises about
$40 billion of the total world reserves of something over $70 billion. The gold
ratio is substantially higher for some countries, particularly in Europe. And
our depositors, in some cases, feel the need of assurance that their reserves in
the form of dollars are adequately protected by large and available reserves of
gold (or the equivalent in claims on the IMF).
The importance of the factor of confidence in a major currency was demonstrated by the recent experience of sterling. The international monetary system
was put to a severe test by the devaluation of sterling and its aftermath. This
challenge was met, and the results demonstrated the resilience and the resistance
of the system to a difficult series of political and financial events. The private
markets for gold had shown nervousness since the Mid-East crisis in the spring,
and the devaluation of sterling triggered a heavy run on gold.
A statenient by the gold pool contributors made in Frankfurt^ the weekend
after devaluation served to calm the market substantially. But later, rumors
again fiooded the market—the size of the pool's losses, the possible withdrawal
of support of the pool and the possibility of limitations of some sort being placed
on the market.
A further statement by me as Secretary of the Treasury and by the Chairman
of the Federal Reserve Board, made with the support of the other gold pool members, again restored comparative calm. But the factor that brought more enduring strength to the gold market was the announcement on January 1 by the
President of a forceful U.S. balance of payments program. With only a few
exceptional days the; market has been much better balanced in 1968.
The events of 1967 accentuated the need for prompt implementation of the
International Monetary Fund plan for multilateral creation of supplementary
reserve assets. The strenuous efforts being made by the United Kingdom and the
United States to eliminate their deficits should have the effect of markedly
reducing additions to dollar and sterling reserves held by other countries. At
the same time the unreliability of new gold supplies as significant additions to
the world's monetary reserves has been amply demonstrated. The world's monetary gold stocks may actually have declined by as much as $1 billion in 1967.
The restoration of a calmer atmosphere in the gold niarket could ultimately
lead to some additions of gold to monetary reserves. But, the world now faces
the prospect of a limited rate of growth in reserves. The Subcommittee on International Exchange and Payments of this committee has taken a leading part in
drawing attention to this situation.
The problem of inadequate growth of reserves can be met by creating Special
Drawing Rights in the International Monetary Fund, under a plan unanimously
approved by the Fund Governors last September. Under the plan, all the participating members would obtain the newly created assets in proportion to their
1 See exhibit 34.
EXHIBITS
237
quotas in the Fund. The amount of drawing rights to be created would be determined from time to time, normally for intervals of 5 years in advance, in such
a way as to assure an adequate but not excessive rate of growth in global
reserves. There is ample safeguard against excessive use of this authority in
the provision that the Managing Director will make a proposal for creation of
the new drawing rights only after extensive consultation, and proposals will
require the approval of 85 percent of the weighted votes of participating countries.
In order to make sure that the Special Drawing Rights will serve effectively
as supplementary reserve assets, countries undertake obligations to accept them
up to an amount that will always equal three times the amount of Special
Drawing Rights that may be created for them. It is these obligations to accept
the new instrument that give it its assured backing; countries may also accept
larger amounts voluntarily and will probably do so as the instrument becomes
more familiar in the years to come.
I will not go into further detail here on the Special Drawing Rights, but will
be glad to submit for the record the outline plan that was approved in September
at Rio de Janeiro, and a statement I made before the Subcommittee on International Exchange and Payments of this commitee on September 14.
I am pleased to report that the process of drafting amendments to bring the
plan into effect is going forward in the Fund. After their completion by the
Executive Board, scheduled for March 31, 1968, by the Resolution at Rio, the
amendments will be submitted to the Governors of the Fund to approve, by a
simple weighted majority, submission to governments for acceptance. If all
goes as scheduled, it will be possible to present the amendments to the Congress
for its consideration in the spring of this year.
The plan will become eff'ective in the constitutional sense when the amendments have been accepted by three-fifths of the members of the Fund having
80 percent of the weighted votes. At this stage, which might take place in late
1968 or early 1969, the Managing Director and the members can make a determination that initial activation should take place. This will require the approval
of 85 percent of the weighted vote of the participating members.
I should also mention that the Executive Directors will prepare a second
report dealing with a number of proposals for amendments directly related to
the Special Drawing Rights plan, put forward for study primarily by the members of the European Economic Community. There are several controversial
proposals, and all are under active discussion in the Executive Board of the
Fund. A report must be made to the Governors by March 31, 1968, and we do not
yet know to what extent some questions may require further consideration after
that date. We would strongly hope that the controversial issues in these proposals, if not settled promptly, would not delay ratification of the Special Drawing
Rights plan.
Conclusion
The need for fiscal restraint is the dominant feature of our economic situation,
combined with less inflationary wage-price decisions and direct balance of payments measures, some short term and some long term. In the present setting,
there is no conflict between the policy prescription for both the domestic economy
and the balance of payments. Each would be improved by a prompt transition to a
less inflationary environment. Both our budget and our balance of payments
deficits are far too large and both must be reduced. The action program to shrink
the balance of payments deficit by $3 billion is already in motion. Corresponding
action is urgently required on the President's tax program, which would cut our
budget deficits in fiscal 1968 and 1969 by $16 billion over the next year and a half.
Exhibit 14.—Remarks by Under Secretary Barr, October 4, 1967, before the
Boston Economic Club, on economic and financial policy
One of the oldest litanies in the Christian Church is one that I believe dates
back to around 400 A.D. The priest chants the theme, and the congregation
responds with "Good Lord Preserve Us." The priest chants, "In times of bereavement * * * " and the congregation responds, "* * * Good Lord Preserve Us,"
or "In times of plague * * *" and the response, "* * * Good Lord Preserve Us."
One section of the litany has always intrigued me. It goes, "In times of prosperity * *'= *" "Good Lord Preserve Us."
I am sure that this ancient bit of human wisdom is repeated in most other
religions in one form or another. My friends who are better acquainted than I
238
19 68 REPORT OF THE SECRETARY OF THE TREASURY
am with theology have explained to me that the chant refers to the theological
belief that men tend to become morally flabby in times when life is easy.
I have often thought, however, that the ancient litany has a different and
special significance for Secretaries of the Treasury of the United States. A
distinguished resident of this community. Professor Paul Samuelson, has said
on occasion that "The job of Secretary of the Treasury can't be an easy one;
it's to suffer." I will argue today that their suffering is compounded in times of
prosperity, and most particularly in times of excessive prosperity.
Today, a Secretary of the Treasury who fought long and hard for tax reduction as the keystone of long-run national economic policy is pressing the
case for a tax increase. And, throughout Governnient, the public purse strings
must be pulled tighter. For these are the times when the lessons of the "new"
economics merge with those of the "old." Economy takes on its traditional meaning and a measure of fiscal restraint is essential to the national interest.
I now would like to take just a few moments to place my theme and our current
dilemma in a historic perspective.
The economic debate in this country over the past quarter-century has in large
measure revolved \around the question of how to maintain prosperity through
the full utilization of our labor, our plant, and our savings. In 1940, when our
GNP was running at a rate then estimated at some $97 billion, I can remember
my distinguished professors at Harvard exhorting everyone in sight to use
all possible ingenuity to get rates well beyond $100 billion per year. With unemployment still far too high in 1940, there was ample cause for concern.
It has often been pointed out that the great depression left my generation
oriented toward material considerations. I believe that this is probably correct.
AVe were—and perhaps are—rather materialistic in our outlook.
Perhaps it is time someone said a few words in defense of materialism. As
is so often the case, I find that someone has already said them. Not Professor
Samuelson this time, although they do appear as a preface to a chapter in his
textbook, where Francis Plackett is quoted to good effect:
"I believe in materialism =' * =
' I believe in all the proceeds of a healthy
materialism—good, cooking, dry houses, dry feet, sewers, drainpipes, hot water,
baths, electric lights, automobiles, good roads, bright streets, long vacations
away from the village pump, new ideas, fast horses, swift conversation, theatres,
operas, orchestras, bands * * * I believe in them all, for everybody. The man who
dies without knowing these things may be as exquisite as a saint, and as rich
as a poet; but it is in spite, not because, of his deprivation."
A materialistic ojutlook in this better sense possibly accounts in some measure :
for the emphasis we have seen in this past quarter-century on science and technology, on sophisticated techniques of business management, and on conscious
use of national economic policy to promote economic expansion.
Our success in all these areas has been little short of spectacular. As a result,
the vast majority of the people in this nation have reached a level of affluence few
would have dreamed possible in 1940. The interaction of our success in the
areas of science and technology, business management, and our use of national
economic policy has changed this country mightily.
On the whole, I believe that the change has been to the good. I believe that
the American economy running at full employment is a mighty engine of social
progress and reform. I believe that it has brought the opportunity for a useful
and productive life to millions of American men and women whose usefulness
might well have been lost—as it was, for a time, in the depression decade. I
believe that our success has enabled us to export a measure of hope to a large
portion of the world where in much of recorded history hope had been nonexistent.
Having said all this, I must also say that no human situation is perfect, and
even prosperity—as the ancient divine so clearly recognized—has its problems.
The problems are clearly visible from the United States Treasury. Let me cite just
a few of the problems that have developed in the wake of the prosperity that has
characterized this last quarter-century.
—Twenty-five years ago the problems of pollution, decay in our cities, and
the gap between haves and have-nots in our country were present, but not in
the magnitude nor with the urgency that they afflict us today.
—The pressures on our systems of transportation and our higher educational
complex were simply not present 25 years ago.
—The intensity of present demands on our capital markets and our savings
was not dreamed of during an era in which 3-month Treasury bill rates had
remained below 1 percent for 15 years (between 1932 and 1947).
EXHIBITS
239
—The perils of inflation were usually shrugged off' as pure theory or applicable only to situations in which "printing press" money was used.
—The danger implicit in a balance of payments deficit was a subject so
esoteric that it was rarely alluded to in academic circles.
The real measure of a nation, in my opinion, is its willingness to recognize
and acknowledge new problems as they arise. I personally take great pride in
the fact that we in this nation do recognize and are fighting for answers in the
areas of pollution, urban decay, transportation, education, poverty, financial
imbalances, homebuilding, inflation, and the balance of payments. Solving many
of these problenis will not be easy—perhaps not as easy as resolving the question
of how best to promote overall econoniic growth. But we are attacking these
areas ; we are responding to the challenge.
These problems^—the ones associated with normal, healthy economic growth—
have been under attack for several years. They must be attacked head-on, for
they cannot be avoided. We cannot and should not accept stagnation as an
escape from the difficulties that come with healthy and desirable growth. At
the moment, however, the country is preparing to attack a new issue—the
questioii of how to head off the perils of an unhealthy and excessive rate of
expansion resulting from a resurgent demand from the private sector and a
continuing heavy demand from the Federal Government. These new perils can
and must be avoided.
You may well ask at this point, "Why all the fuss?" "What is so different
in this current situation?" "Just what are the perils of an unhealthy and excessive
rate of expansion?" Let's try to answer the second question first and examine
some of the differences between the current situation and those of, say, a few
years ago. It seems to me that the main differences are:
1. The economy is operating in the full employment range.—In contrast to
the situation of a few years ago, there is no longer any sizable margin of
unutilized resources upon which the economy can draw, and skilled labor is
scarce. To be sure, the slowdown in the early part of this year caused the average
industrial operating rate to fall back somewhat, but unemployment remains below
4 percent. Relatively full utilization of resources places a fairly definite limit
on the rate at which national output can safely expand.
It is estimated that at full employment the overall productive capacity of the
economy now grows by about 4 percent annually. Over the next year or so, real
output could probably grow at a little more than 4 percent, perhaps 4^/^ percent
or even 5 percent, while plant utilization rates are rising. Allowing for a 2i/^
percent rise in prices—as measured by the so-called GNP deflator^—GNP in
current prices might safely rise by 7 percent or so in the next year. As a steady
diet, this would be a shade too much since price rises of 2% percent to 3 percent
annually are too large. But, if the rise of GNP in current prices were held to 7
percent or so in the next year, we would bp on a path leading to a less inflationary environment.
We no longer are in a situation where strong rises in demand will yield
sizable gains in output and employment. Instead, if the total of public and
private spending were allowed to rise at an excessive rate, the consequences
would be sharply higher prices. Therefore, with the economy nearing unsafe
speed, we cannot keep a heavy foot on the accelerator. We must throttle back
to a safer cruising speed.
2. Price and cost pressures are readily apparent.—The upsurge in demand in
late 1965 and early 1966, associated with the early impact of the Vietnam buildup,
was checked by monetary and fiscal restraint. But, one unwelcome consequence
of that burst of spending was the disruption of a previous pattern of cost-price
stability. For example, the wholesale price index rose by 3% percent between
mid-1965 and mid-1967 in contrast to a total increase of less than 3 percent during the previous four years. Similarly, the wholesale prices of industrial commodities rose by about 31/2 percent between mid-1965 and early 1967 in contrast
to a total increase of less than 2 percent during the previous 4% years. The
consumer price index rose by 5y2 percent between mid-1965 and mid-1967, only
slightly less than its total rise in the previous 4 years.
In delayed reaction to the burst of demand in 1965 and 1966, cost pressures
have intensified. By the middle of 1966, labor costs per unit of output in manufacturing had risen about 2i/4 percent over mid-1965', but were still below the
level of early 1961. But, by the middle of this year, they had risen a further
614 percent. With strong "cost-push" factors already present in the economy,
a renewed burst of demand could start wages and prices on an upward spiral.
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19 68 REPORT OF THE SECRETARY OF THE TREASURY
3. Interest rates are already at or near last year's levels.—Another crucial
difference between the present situation and that of several years ago, is the
height of interest rates and the degree of credit availability. Let me say that
after last year's "credit crunch," I have no desire whatsoever to see a repeat
performance—^and I don't think anyone else does either. But, wishing will not
make it so. If we are determined to avoid a repetition of last year's difficulties,
we must avoid undue reliance on monetary policy to achieve restraint.
Last year the cpmbination of strong credit demands and monetary restraint
pushed interest rktes to peak levels. By late summer and early fall, not only
was credit expensive, its availalbility was severely limited.
Prompt action was necessary last fall to relieve the overall pressure on financial markets and calm the feverish competition for savings. That action was
forthcoming. It included temporary suspension of the investment credit, interest-rate ceilings oh consumer-type time deposits, and a temporary slowdown on
agency financings and sales of participation certificates. The improvement in
financial markets was dramatic. Now, a year later, the situation is substantially
different.
Savings flows tb thrift institutions have been at record levels this year.
Mortgage comimithients have been rising strongly. The recovery in residential
building has carried the seasonally adjusted annual rate of housing starts back
to nearly 1.4 million units in contrast to an August 1966 low of about 850
thousand. Commercial bank credit has risen at a 13 percent annual rate in the
first 8 months of this year as the Federal Reserve has pursued a course of relative monetary ease.
In short, credit is much more readily available now than it was a year ago.
But, there is a disturbing similarity between the two periods. Interest rates,
especially long-term rates, are back at very high levels despite a continuing policy
of monetary ease since last fall. Basically, this is because private demands for
credit have been extremely heavy this year, partly in reaction to last year's
squeeze. Also, the private demands for credit are probably reflecting the faster
pace of economic activity since late spring.
Net Federal credit demands have been relatively modest although the picture
is changing now. Net Federal demands on the private credit markets can be
measured by the change in private holdings of Federal credit instruments, including Federal agency securities and participation certiflcates along with
Treasury issues, by excluding the change in holdings of the Government investment accounts and the Federal Reserve. On this basis. Federal credit demands
were only about $3 billion during calendar 1966 in a total credit flow of some
$70 billion. In the flscal year ending this past June 30, the net contribution of
the Federal sector to total credit demands was actually negative, or near neutrality after allowance for an nnusually low Treasury cash balance at the end of
the fiscal year. But, in the current fiscal year, even with tax and expenditure action, net Federal demands on the credit markets will rise to the $10 to $12 billion
range. In the absence of tax action, that figure would soar to the $20 billion
range. This would be beyond the capacity of the markets to handle at anything
like the current level of interest rates.
Frankly, even current levels of interest rates are higher than we like to see
them. And, without tax and expenditure action, there would be only one way for
interest rates to go—up from their present high levels. In contrast to the situation of several years ago, interest rates are already high and the financial system is wound up pretty tightly. Liquidity is at a premium. We have to operate
cautiously in such an environment. Therefore, we need—and need very badly in
my opinion—an extra degree of fiscal restraint.
4. Too rapid expansion can hurt our trade balance.—Recent experience also
highlights the importance from a balance of payments standpoint of holding
the domestic expansion within prudent limits. During the years 1961 through
1964, GNP in current prices rose by an average of about 6 percent per year—
more in some years, less in others. During that period, our trade surplus rose
by nearly $2 billion. It was $4.8 billion in 1960 and $6.7. billion in 1964, when
there were special favorable factors. Not all of the improvement is directly
attributable to the relatively moderate rate of domestic expansion. Our exports
depend upon the pace of business activity abroad and there are other complicating factors.
In striking contrast, during 1965 and 1966 when GNP in current prices rose
at rates betw^een 8 percent and 9 percent, there was an extremely sharp rise in
our imports. Even though exports continued to rise, the trade surplus narrowed
to $4.8 billion in 1965 and to $3.7 billion in 1066. Indeed, by the last quarter of
EXHIBITS
241
1966, the trade surplus had shrunk to a $2.9 billion annual rate. With a slower
rate of expansion this year, the trade surplus recovered to a $4.0 billion rate in
the first quarter and improved further to a $4.5 billion rate in the second quarter.
An overly rapid rate of domestic expansion can hit our trade balance from
both sides. As recent experience clearly shows, ithe rise in imports is abrupt
when the economy presses hard against capacity. Too rapid domestic expansion
can also undercut our ability to export. In the interest of payments equilibrium,
we must keep our exports competitive. There can be little doubt that a sustained
upward drift in our costs and prices relative to those abroad would soon begin
to affect 'our competitive position adversely.
'5. We are fighting a costly war.—Extra expenditures for Vietnam are runing at a rate in excess of $22 billion per year. While those expenditures do not
bear as heavily on the economy as defense expenditures did at the time of Korea,
tbeir impact most certainly is felt. Without Vietnam, Federal administrative
budget expenditures would amount to only some 14 percent of gross national
product in fiscal 1968; with Vietnam included, Federal expenditures may rise to
17 percent or a bit more. This would be about the level of 1955 and 1959 and
well below the 21 percent reached at the time of Korea. Bnt, it would amount
to an appreciaible rise over the 14.8 percent ratio in fiscal '1965.
These are the crucial differences in the economic picture at the moment and
the picture as it appeared in 1904. Now, what about those perils of an unhealthy
and excessive rate of expansion? I would list them as follows:
—We are in grave danger of losing control of a relatively stable price
structure.
—Sharply higher prices throw wage-price relations out of kilter and set the
stage for a cost-push inflation.
—^Cost-push pressures tend to narrow proflt margins and encourage efforts to
raise prices.
—^Sharply higher prices put the nation at a severe disadvantage in our competitive relationships internationally.
—At home, the burden of higher prices falls cruelly on those least able to protect themselves.
—And, of course, a strong resurgence of private demand, unchecked by tax and
spending actions, can create some very had days ahead for the Treasury debt
managers and for everyone who borrows money.
If our experience since 1960 is any guide, it would seem that we as individuals,
as corporations, and as a nation prosper most when our rate of growth is held
within the bounds of our productive capacity. Perhaps in this town of investment advisors you believe that you can protect yourselves against inflation. Perhaps you can protect a small minority of our people for some period of time.
But Inevitably the well-being of your clients can not be divorced from the wellbeing of the nation as a whole. Parenthetically I niight add that I d'o not envy
those of you who are keeping your clients ahead of the game as "in and outers"
in stocks that I can only rarely identify.
In conclusion, I would argue that the risks and perils that confront us are
formidable but avoidable. The prudent course for this nation to follow is clearly
set forth in the President's recommendations. I can only hope that next year
as I join the litany "In Times of Prosperity * * * Good Lord Preserve Us," I
will be referring to our moral fibre and not our national economic well-being.
Exhibit 15.—Remarks by Under Secretary Barr, June 25, 1968, before the Town
Hall of California, Los Angeles, California, on potential claims on the Federal
budget
The Battle for Resources—Diplomacy versus Domesticity
On April 26, Dr. Otto Eckstein, Professor of Economics at Harvard University,
made a statement before the American Statistical Association that intrigued me
enormously. Dr. Eckstein was attempting to analyze the potential claims on
the Federal budget over the next 2 years under various sets of economic assumptions. With his permission, I will today try to add a political dimension to his
remarks.
For years I have bemoaned the demise of "political econoniy." I have argued
that political scientists and economists have suffered from the dichotomy that
developed early in this century. So by adding a political dimension to Otto's
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19 68 REPORT OF THE SECRETARY OF THE TREASURY
remarks, I will be practicing what I have preached, and hopefully will be
contributing to an analysis of an issue that can well be the subject of furious
debate in this nation in the immediate future.
Now just what did Dr. Eckstein say? He introduced his theme with this
^tfltement *
"Recent'studies have assumed that the crisis in the Federal budget will
come to a quick end once the Vietnam war is over. The war is costing close
to $30 billion. If $20 billion of budget resources could be released, there should
be ample room for substantial increases in social spending, as well as tax reductions for increased private consumption and investment. With a normal Federal revenue growth of over $10 billion a year, one would hope that the Federal
budget would be in much less of a squeeze than today.
"This cheerful prospect could easily dim over the next several years."
He then made these points.
1. It will be extremely difficult to get defense spending down in the near
future.
2. Traditional civilian Government progranis will cost more as population
grows and the demand for services increases.
3. Much of the revenue growth that we can expect in a growing economy
must be used to reduce our current budget deficits.
I agree with the conclusions that Dr. Eckstein has reached and I would like
to comment briefiy on each of the three points.
If the Defense Departnient is to maintain its current mission in the world—
a mission that is defined by our diplomatic objectives—I would seriously doubt
that any sizable reduction can be made in the defense budget in the foreseeable
future. Our experience in Korea indicates that the cessation of hostilities does
not mean that we can pull our troops back home and forget about the area.
Our position in Southeast Asia can be even more difficult than the situation
we faced in Korea. There is no heavily reinforced 17th parallel behind whicii
we can retire with comparative security.
We have been fighting this war on a very, very lean budget. There is no
evidence that we have piled up surplus stocks in ordnance, ammunition, aircraft, or naval vessels. On the contrary, I would estimate that a cessation of hostilities would result in great pressures to rebuild stocks in military supplies
and equipment to a more acceptable level. Similar pressures might be expected
to increase defense expenditures for research and development and to improve
our readiness posture and strategic capability. These kinds of expenditures are
already beginning to move up again after being cut back earlier.
One way of looking at the situation is as follows. In fiscal year 1965 our spending for defense and intemational affairs was running at a rate of about $54
billion a year. By fiscal 1970 inflation will have added about 15 percent-20 percent
to those basic costs, or about $9^/^ billion. Thus a 1965 effort would cost about
$63 billion in fiscal 1970. We are currently spending at the rate of roughly $28
billion a year in Southeast Asia in activities directly related to the Vietnamese
engagement. While it is not completely accurate to add this total cost to the $63
billion base I referred to, it at least gives us the basis of comparison. It indicates
that in fiscal 1970 we would be spending about $91 billion a year if Vietnam expenditures continued at their present level and we maintained the same force
readiness, strategic capability, r & d expenditures, and international affairs expenditures that prevailed in 1965. Or, to work around another way, the figures
would indicate that the Defense Department this fiscal year is spending, in terms
of real resources, 10 percent-15 percent less on all requirements, except Vietnam,
than it was spending in 1965—roughly the equivalent of $461/^ billion against
a $49% billion level prevailing at that time, while expenditures on international
affairs and finance are also, in the same terms, down by one-quarter billion
dollars to one-half billion dollars.
I can only conclude that if the State Departnient maintains its current diplomatic objectives and if the Department of Defense defines its mission relative
to these objectives as it did in 1965, then there is not much opportunity for substantial budget cutting in this area in the foreseeable future.
The second point that Dr. Eckstein makes is also unquestionably true. The
traditional operations qf this Government must almost of necessity grow as the
country grows. The volume of mail to be delivered grows at the rate of three
billion pieces a year; the number of inconie tax returns to be processed rises at
the rate of three million a year; the number of visits to our parks and our national
forests increases at the rate of 20 million or more a year. I do not believe that there
EXHIBITS
243
is any disagreement that the traditional services of the Government must grow
in a growing country. Back in 1961 Mr. Maurice Stans estimated that a rate of
growth of $2% billion to $3 billion a year in the Federal budget was probably
necessary to keep up with the growth of the country.
Dr. Eckstein pointed out that the normal growth in our revenues which we can
expect in a growing economy would be needed in the immediate future to reduce
the Federal deficits we have been running. This statement is surely incontrovertible. Demands for capital in this nation and in the world are enormous and I
cannot see how we can contemplate orderly capital markets or price stability if
the Federal Government is forced to borrow to meet deficits in excess of $20
billion a year.
Dr. Eckstein uses this line of reasoning to support his argument for a tax
increase and rigid controls over military and old-line civilian Government expenditures. In my opinion his analysis points up an even more pervasive issue—
the coming struggle over the budget—or as I have put it, diplomacy versus
domesticity. Let me say at this point that in the coming struggle I will be an
interested bystander. My 10 years of public service will end on January 20. Therefore, as I now attempt to add a political factor to the economic calculus that Dr.
Eckstein has described, it can be assumed that I will be reasonably impartial.
I foresee an intense struggle between those advocating diplomatic objectives
and those arguing for domestic requirements for the next 4 years. A tax increase will help to make that struggle less acrimonious. Tough-minded expenditure
control will help to produce the same result. But I can only conclude that neither
will be sufficient to head off a conflict.
As we move from economics into the area of politics, I would like to comment
briefly first on the diplomatic arguments. I see no reason to apoligize for the
diplomatic objectives of the United States for the past 23 years. In fact, I would
venture to predict that many of us will look back on these years as a time of
shining idealism—our golden years. Under the shield of our defense establishment, the free world has achieved a huge growth in world trade, a free flow of
funds between nations, an unparalleled expansion of tourism, and truly remarkable achievements in the development of areas which had known only poverty,
ignorance, and disease throughout recorded history. I am not going to throw
any rocks today at the Department of State or the Department of Defense.
In his analysis, however, it seems to me that Dr. Eckstein has left out some
very potent changes that have occurred in this nation in the past 4 years which
lend credence to my contention that a fierce battle for budget resources will be
waged. These changes were initiated by the extraordinary man who helped
start my public career and whom I have served with affection for almost 5
years—Lyndon Baines Johnson. In 1965 the Congress enacted a landmark bill
to provide Federal assistance to elementary and secondary education. In that
year it also passed the legislation establishing medicare and medical aid. In
those two pieces of legislation the country established enormous potential claims
on its revenues, claims that were backed up by a knowledgeable and forceful
political clientele. Almost for the first time in the history of the Republic we
created a strong political challenge to the allocations of resources for the defense
of the nation.
Let me illustrate my point. There are 22 thousand school districts in the
United States. Almost without exception every district would spend more if
their budgets would allow. I need not remind you of the political muscle that
millions of parents, teachers, and school administrators can swing in this nation.
The passion for education has characterized our national history. For the first
time elementary and secondary education now has a claim on our Federal
revenues, and I would estimate that the claimants will be after us with the
ferocity of a tiger. These programs are probably seriously under-funded at
the moment, and given any letup in Vietnam, the demands will be clamorous
and insistent—no matter which political party is in power.
This nation has been one of the last of the great industrial nations to move
to a system of health insurance. There is no need for me to elaborate on the
costs—present and potential. There is no need for me to dwell on the history of
other nations and the response to these demands for medical care. Suffice it to
say that here again we have opened the doors of the Federal Treasury to huge
demands.
I would estimate that no political party, and no President, can reverse or
even slow down appreciably the demands that will come from the country in the
areas of education and health. While education and health will, in my opinion,
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19 68 REPORT OF THE SECRETARY OF THE TREASURY
prove to be the most politically potent claims on our resources in the years
immediately ahead, let me list a few other claims with enormous political
muscle.
The problems of our cities have unquestionably grown to almost intolerable
proportions—pollution, transportation, adequate housing—and the whole gamut
of problems associated with the ghettos. The costs associated with these projects
are staggering. In one area alone—housing—to move from the current level of
about 1,400,000 starts a year to a 2,600,000 rate which is widely advocated at
the moment, would place at least an additional $20 billion strain on our credit
markets annually, and unquestionably an additional strain on our Federal
budgetary resources. The other issues which I have mentioned—pollution, urban
transportation, and the problems of the ghetto—fall roughly into the same
category as hO'UsingL Financing these programs will be a great additional burden
on our capital markets and on State and local government tax revenues. In addition, unless I am sadly mistaken, they are going to produce a sizable claim on our
Federal tax revenues.
The programs I liave just mentioned will not lack In political appeal and can
also prove to be an effective challenge to the claims on our resources generated
by Defense and State. None of us relishes the prospect of a China armed with
ballistic missiles aimed at this city without an effective deterrent—even if the
cost is huge. But, on the other hand, none of us relishes the idea of resting
securely behind an antiballistic missile system if we are slowly choking to
death in a polluted atmosphere. None of us looks forward to a world in which
adventurers can prey with some degree of impunity on weaker nations. But I
think that most of us would like to get to work without spending our days in
endless traffic jams. The possibility of Communist probing and troublemaking
in Europe resulting from a draw down of our NATO forces is not pleasant to contemplate but, on the other hand, the civil disturbances we have had in the past
year in our cities are very real and very close indeed.
As if the battle for tlie allocation of domestic resources were not serious
enough, our diplomacy faces a severe challenge in its claims on the foreign exchange which this nation can earn. There is not sufficient time today to deal with
the history of the U.S. balance of payments for the past 17 years. In addition, I
am certain that the news stories which have run since last November 18—the date
of the British devaluation^—have brought home to all of you the severity of the
problem that the nation faces.
Over the past 17 years three factors have enabled this nation to pursue its
diplomatic and inilitary objectives with certain immunity from balance of payments consequences. From about 1950 on we had enormous reserves which we
were perfectly willing to run down—at least until about 1960. We had a very
large trade surplus. And finally, there was a willingness—even an eagerness—
in the first part of the period for other nations to hold additional amounts of
dollars in their reserves. The next President of the United States will probably
not have these three factors working for him.
He will probably be forced to conserve our reserves and fight to maintain or
improve our trade balance as well as face a world increasingly reluctant to hold
additional dollars.
Today the foreign exchange cost of keeping our troops deployed around the
world is running in excess of $3 billion a year. It has become increasingly evident
that our diplomatic aims must compete with the thousands of American travelers
who use foreign exchange, not dollars, in their wanderings, with American corporations that need foreign exchange for foreign investment programs and American banks and other lending institutions anxious to hold on to their share of the
international markets. I can ruefully tell you from personal experience that the
American traveler is a formidable political opponent—rising up in outrage when
anyone makes a modest attempt to hold down his spending outside the United
States. While not so numerous and possibly not so vocal, I can assure you that
the restraints placed on foreign investment and foreign lending are distasteful
to the American business and financial comniunity. Thus I can only conclude that
diplomacy is facing three powerful antagonists who will try to get their share of
the foreign exchange earnings of this nation.
In 1960, as he was preparing to leave office. President Eisenhower had this to
say about the military-industrial complex and its potential threat to the United
States.
"In the councils of governnient, we must guard against the acquisition of unwarranted infiuence, whether sought or unsought, by the military-industrial
EXHIBITS
245
complex. The potential for the disastrous rise of misplaced power exists and will
persist."
At the time President Eisenhower made that statement, I was a freshman
C/Ongressman, but it made eminently good sense to me. Even a freshman Congressman could see that there was no effective challenge to defense and diplomacy'
in the allocation of our national resources. Agriculture and public works at that
period of time constituted a minor challenge but their potential for expansion
was severely limited. Today I would guess that President Eisenhower takes some
comfort in the fact that the military-industrial complex does not go unchallenged
in this nation.
If one accepts my thesis that a battle for the allocation of resources is shaping
up in this nation, then it is logical to ask, "Are our institutions of Government
sufficiently viable to assess the hard fiscal choices that lie ahead and to arrive
at rational conclusions?"
There has been abroad in the land in recent months a tendency towards despair.
Some have argued that there is no way to reverse or even to blunt the power of
the military-industrial complex. Others have argued that a polarization of our
society—between the affluent and the indigent and between white and black—is
inevitable. Still others have argued that the plight of our cities is hopeless—that
we are slowly sinking beneath traffic jams, pollution, and violence.
When one analyzes many of the causes for despair, it is amazing to discover
how frequently the despair occurs because of a conviction that the necessary
resources will not be forthcoming. Educators are convinced that a truly massive
infusion of funds can correct the dreadful imbalance between schools in the
ghettos and schools in suburbia. Sociologists are convinced that some plan such
as the negative income tax can halt the flood of disadvantaged Negroes from the
south to the northern cities—at a cost of from $11 billion up. City planners are
convinced that the scandalous housing of the ghettos is needless—if we will pay
the cost. Transportation experts say that traffic jams can be eliminated—just
give them the resources for adequate mass transit systems. Police officers contend
that violence can be contained and order restored—^if they have the funds for an
adequate force. But nearly without exception all these elements of society despair
of convincing the country that these demands should be met with adequately
funded programs.
If there is any justiflcation for all this despair, then perhaps there is some
logical reason for the revolutionary desire to tear down our institutions, to flout
our Government and its laws, and in the final analysis to resort to violence.
I personally see no reason to despair.
In the past 90 days the nation has faced and acted on two issues that were
in my opinion almost the ultimate test of representative govemment—the Fair
Housing Act and the Tax Bill. Both issues were stark—reasonable men could not
dispute the validity of the arguments. But both issues required the absolute
maximum in political courage. A nation that has the sheer guts to face down
these two explosive issues at this moment in time would seem to be prepared to
take on the dreadful array of issues which still confront ns.
Mr. Sam Rayburn used to say, "It takes a very smart man working very hard
to hurt this great country very much." This is a comforting philosophy, but as I
looked back over 10 years of wrestling with issues, I became increasingly concerned that in the struggle the essential fabric of the nation was being torn—
perhaps we were hurting the country. I was haunted by the fears expressed by
many in 1964 that tax reduction might be good for the country at that time, but
that we would not have the courage to raise taxes if we got into trouble.
However, a nation that can say to the black man, "Your dollar is as good as the
white man's," and a nation that can discipline itself financially, certainly has the
moral fibre, the intelligence, and the institutions to take on the impending "Battle
for Resources" and come up with rational answers.
Exhibit 16.—Other Treasury testimony published in hearings before congressional committees, July 1,1967-June 30,1968
Secretary Fowler
Statement on "The Budget for 1969," published in hearings before the Committee on Appropriations:
1. House of Representatives, 90th Congress, 2d session, February 8, 1968,
pages 3-39.
2. Senate, 90th Congress, 2d session, February 14, 1968, pages 1-29.
318-223—69
18
246
19 68 REPORT OF THE SECRETARY OF THE TREASURY
Under Secretary Barr
Statement on H.R;. 11601, the "Consumer Credit Protection Act," published in
hearings before the Subcommittee on Consumer Affairs of the Committee on
Banking and Currency, House of Representatives, 90th Congress, 1st session,
August 7, 1967, pages 74-89.
Statement in support of proposed amendments to iniprove guaranteed student
loan program enacted in the Higher Education Act of 1965, published in hearings before the Special Subcommittee on Education of the Committee on Education and Labor, House of Representatives, 90th Congress, 1st session, August 16,
1967, pages 398-404.
Statement on H.R.; 16092, a bill to extend the authority for more flexible regulation of maximum rates of interest or dividends payable on savings accounts,
published in hearings before the Committee on Banking and Currency, E[ouse of
Representatives, 90th Congress, 2d session, June 27, 1968, pages 82-84.
Under Secretary for Monetary Affairs Deming
Statement on S. 3133, a bill to extend for 2 years the flexible authority under
which the appropriate flnancial agencies can regulate maximum rates of interest
or dividends payable on savings accounts, published in hearings before the Subcommittee on Financial Institutions of the Committee on Banking and Currency,
Senate, 90th Congress, 2d session, April 3, 1968, pages 10-13.
Assistant Secretary Wallace
Statement on H.R, 12754, a bill to extend for 2 years the authority for more
flexible regulation of niaximum rates of interest or dividends, published in hearings before the Committee on Banking and Currency, House of Representatives,
90th Congress, 1st. session, September 14, 1967, pages 5-7.
Deputy Under Secretary for Monetary Affairs Sternlight
Statement on the means of financing certain of the programs involved in the
proposed housing legislation for 1967, published in hearings before the Subcommittee on Housing and Urban Affairs of the Committee on Banking and Currency,
Senate, 90th Congress, 1st session, July 18, 1967, pages 137-142.
Public Debt and Financial Management
Exhibit 17.—Remarks by Under Secretary for Monetary Affairs Deming,
October 19,1967, at the Mid-Continent East Regional Meeting of the American
Association of Collegiate Schools of Business, Minneapolis, Minn., on fiscal
and financial policy
It is always a pleasure to return to Minneapolis—and the opportunity to
meet and exchange ideas with this distinguished group makes the occasion still
more satisfying.
One of the great strengths of the American system, I believe, is the interchange of ideas and people between business and Government, Government and
the academic community, and business and academic life. If not an eternal
triangle, it is, at least, a long-lasting and fruitful one—with solid ties and
tensions in each of those interconnections. Each of the three components benefits
from the relations with the other two.
This productive partnership shows up particularly in the development of new
frontiers of economic knowledge and institutions. A striking example of this,
which I have seen at first hand, is the effort of the past several years to create
new international liquidity. There is not time today to discuss this subject at
length or in substantive fashion. I want to spend most of my time on domestic
matters. But a brief historical and procedural comment is in order.
Much of the original thinking in this area came through the interchange of
ideas and people in Government and the academic community. A succession
of ideas was fostered in Government circles here and abroad. In that process,
the business and financial world was drawn in, too, at first with some healthy
skepticism and then with increasing conviction that this was an appropriate,
desirable and necessary path to follow.
The international liquidity exercise has gone through several phases of study
and negotiation with most of the frontline work being done by representatives
of Treasuries and Central Banks. Government positions, of course, have reflected widespread intra-Government study and consultation. In the United
EXHIBITS
247
States, both the executive and legislative branches contributed to this work.
And, in the United States, an important role has been played by the Advisory
Committee on International Monetary Arrangements^—a group that illustrates
my point very well.
The Committee is composed of nine men from business, financial, and academic life—many of whom have served in important Government positions.
From the financial and business world are its Chairman—^Douglas Dillon (former
Secretary of the Treasury), Robert Roosa of Brown Brothers Harriman (former
Under Secretary of the Treasury), Andre Meyer of Lazard Freres, David Rockefeller of The Chase Bank, and Frazar Wilde of the Connecticut General Life
Insurance Company and the Committee for Economic Development. From the
academic community are Walter Heller of Minnesota (former Chairman of
the Council of Econoniic Advisers), and Kermit Gordon of Brookings (former
Director of the Bureau of the Budget). Charles Kindleberger of MIT served
as a member for a year; and Francis Bator of Harvard, who has just returned
to academic life after 4 years in Government—most recently as a White House
Adviser—has become a member. Edward Bernstein, who has been in academic
life, the Treasury and the IMF and is now a consulting economist, completes
the Comniittee.
This Committee is a working group which has met some 25 times in all-day
working sessions with the Secretary of the Treasury and other Government
officials concerned with the international liquidity exercise. It has given advice
and counsel on both points of substance and negotiating strategy.
The steps taken, and the agreements reached in the past two months—in
London among the 10 major nations in world trade and finance, and in Rio
by all 106 members of the International Monetary Fund—are important, historic
moves in the process of creating new international liquidity. But the process
does not stop with these steps—nor does the interchange cease among business.
Government, and the academic community as we proceed to flesh out the framework now agreed upon.
Let me switch now to another area of extremely valuable interchange among
these same three groups—and one that is also very timely at this moment. I refer
now to the area of flscal policy—Government spending and lending, and taxing
and borrowing—to serve broad national purposes. Here, I want to comment
at some length and substance.
The role of the academic community in educating Govemment and business
to the merits of flexible fiscal policy needs no elaboration here. The success
of the 1964 tax reduction was most impressive, not only in stimulating a robust
and healthy economic expansion—now in its 80th month—^but also in bringing
revenues from a prosperous economy up to a level that produced a surplus in
the national income account budget in calendar years 1965 and 1966.
But there is another chapter in the book of "new economics" which sets
out circumstances in which tax increases rather than cuts are the right medicine, and when tax increases are the appropriate way to bring in more revenue—even though under other conditions a reduction in tax rates had the
effect of augumenting revenues along with stimulating business activity.
The difference, of course, lies in taking account of what the rest of the
economy is doing. The Federal sector does not operate in a vacuum, but in an
economy which may be booming, sagging, or operating somewhere in between—
perhaps en route from one of these stages to another. In the early 1960's, the
economy was not exactly sagging, but it was also far from booming. Unemployment hovered around 5% percent—better than the 7 percent recession level
touched in 1961, but still distant from the desired 4 percent level and not clearly
headed either up or down. In this case, an economic stimulus was appropriate,
and it could be provided by an expansionary fiscal policy that would operate
alongside an expansionary monetary policy—without requiring monetary policy
to provide so much of the push that it produced distorted financial flows within
this country and capital outflows from this country.
Compare that set of conditions with our current economic position. Unemployment has held steady at around 4 percent of the labor force. Consumer and
Government demands have been rising briskly. An inventory adjustment apparently has been weathered without producing general weakening in the economy,
and renewed inventory demand is now ready to take its place as a source of
added aggregate demand. In the meantime, there are strong credit market demands from virtually all types of borrowers.
1 See exhibit 70.
248
19 68 REPORT OF THE SECRETARY OF THE TREASURY
Granted, the economy is not, at this moment, in the grip of clearly excessive
demand. There have been times when unemployment was lower, capacity utilization higher, and the pull of excess demand more clearly evident. Those were
times such as in the Korean War period, when demand inflation was gaining
an upper hand and clearly needed strong restraint. But, just as clearly, that
is the kind of economic structure we may well be heading into in a matter
of months—given a continuation of present trends in consumer and government demand.
That we have not felt the hot breath of demand inflation more strongly in
recent months is a result of an inventory adjustment of considerable proportions—which, had it arrived under different circumstances, without the offset
of strongly rising Anal demands, would have caused a general softening in
economic activity and called for consciously stimulative fiscal policy. With inventories now about in line, and the adjustment pretty well completed, the fiscal
stimulus that had been appropriate earlier is less and less desirable with each
passing month—^and, in fact, it is now becoming positively harmful.
The role of inventories is most clearly seen in looking behind the quarterly
changes in the annual rate of gross national product—to see how much was due
to inventory building and how much to final demands from Government, consumers, and business. In the first quarter of this year, the annual rate of
GNP was up a scant $4.2 billion: and, in fact, not up at all in real terms, after
correcting for price changes. But final demands in that quarter were up more
than $15 billion while the rate of inventory accumulation fell about $11 billion.
A $15 billion quarterly gain, or about 2 percent, is about as much as we should
want to see; and, in fact, it's a bit faster than we can tolerate for long without
getting too much price pressure. Of course, in the first quarter of this year, we
did not get that excessive pressure because the big rise in final demand was
offset by a large drop in production for inventories.
The picture began to change a little in the second quarter of this year. Final
demands were up another $15 billion, and the rate of inventory accumiulation
declined again, but not as much as in the first quarter so that total GNP
increased by nearly $9 billion. That was enough to provide a little real growth
but still not a satisfactory total increase, so it was appropriate that a fiscal
stimulus continue to be provided through a budget deficit on the national income
accounting basis.
For the third quarter, it is estimated that final demand continued to push
up—^this time by about $14 billion—while the rate of inventory building increased slightly from the second quarter's pace. In real terms, GNP increased
at a slightly better than 4 percent annual rate. With that performance, the
continuation of substantial fiscal stimulus is already becoming questionable;
and, when one looks ahead, the continuation of that stimulus becomes positively objectionable.
In the current quarter, statistics may be distorted by the automobile strike—
but the trend is clear in pointing to a steadily rising head of steam. Every
major work stoppage in recent years has had the effect, once it is settled, of
imparting further stimulus to the economy as it seeks to make up for lost
production. I would not argue that the current auto strike is an additional
reason for going ahead with the President's tax proposals—but we should not
let ourselves be persuaded that the strike is a reason for delaying that needed
fiscal action.
Participants in the credit markets seem to have had few doubts about the
basic trend of economic activity through the past year of irregular growth.
Particularly outstanding has been the heavy demand for capital by corporations—reaching record proportions, even though capital needs for financing
inventories were lessening and needs to finance current fixed investment outlays
held about steady. How does one account for the fact that corporations borrowed
$17.9 billion in the capital niarkets through the first nine months of this
year—an amount somewhat exceeding the total of such borrowing during all of
1966, and 27 percent ahead of the amount borrowed in the first 9 months of
that year? And 1966 was not a slack year—^^it was the record year to date.
Underlying this enormous demand was a combination of conviction and fear—
conviction that liquidity positions run down during 1966 should be restored
and dependence on short-term borrowing from banks reduced, and fear that
a failure to tie up some available funds when they are available niight mean
an inability to get funds at all when they really are needed later on.
A special source of concern for the corporate treasurer has been the possibility of an oversized Federal Government deficit. The recollection of tight
EXHIBITS
249
money markets in the summer of 1966 is still quite vivid. Yet, tight as the markets
were at that time, the Federal sector's demands on the credit markets were quite
modest through that period. The contemplation of a period of heavy private
sector credit demands augmented by an overgrown Federal deficit raises the
possibility—or spectre, if you will—of an even tighter set of credit conditions
in the future. Corporate borrowers have realized this and sought to make
preparation for it.
Credit demands from State and local governments have not been laggard,
either. These governments, in the first 9 months of the year, have borrowed
$10.7 billion, or 25 percent more than in the comparable months of 1966. Part
of this reflected borrowings postponed from the very tight money period of a
year ago, which was marked not only by high interest rates but also an
unavailability of funds to some prospective borrowers. Part of it, too, simply
reflects greater current needs by these governmental units, to provide increases
in things and services more quickly than current tax revenues rise. Some of
it, also, is due to the rising volume of tax-exempt industrial revenue bonds—
borrowing by a local government unit to build industrial facilities which are
then leased to corporations. This, incidentally, should be a source of growing
concern to the State and local governments themselves, as it is making their
own borrowings for schools, roads, and other traditional State and local needs
significantly more costly.
Looking at the Federal sector's credit demands for 1967 thus far would tend
to give a somewhat distorted picture because of the very heavy debt repayments that occurred from January to June 1967. That was partly seasonal,
but the seasonal factor was accentuated because of accelerated corporate tax
payments, unusually heavy repayments by savings and loan associations to the
Federal Home Loan Banks, and an unusual absence of the seasonal buildup
in the Treasury's cash balance that typically occurs in the first half of the
calendar year.
Because of these factors, net Federal demands on the private credit markets
from January to June 1967, as measured by the increase in outstanding Treasury
issues, agency issues, and participation certificates, less the increase in holdings
of these obligations by the Government Investment Accounts and the Federal
Reserve, was actually negative by $11 billion. That is, the Federal sector was
supplying that amount of credit to the rest of the economy, rather than making
a net demand on it. And so great was the net paydown in that half-year period,
that even taking the whole of fiscal year 1967, to wash out purely seasonal forces,
there was a net paydown by the Federal sector of some $6 billion. Even after
adjusting for the $5 billion decline over the year in the Treasury's cash
balance, the result still stands for that period—the year ended June 30, 1967—
that the Federal sector, in effect, made no net credit demands on the private
market.
The picture in this current fiscal year stands in some considerable contrast
to last year, however, for there will be a signiflcant net Federal credit demand,
and it is already being exerted on the markets. How big that net demand will
be depends on several factors, prominently including the President's tax proposals which are now before the Congress.
Essentially, it comes down to a question of whether the net Federal credit
demand, with the benefit of a tax increase and firm restraint on expenditures,
will be large but still of manageable proportions, or whether it wili assume
oiitsized proportions with hard-to-determine consequences for the credit niarket
at large, for interest rates, and for the general economy.
, We have estimated that with the President's tax program, as recommended
on August 3, and with Federal spending held to the lower end of the band
that would produce an administrative budget deficit in the $14 billion-$18
billion range, net Federal credit demands on the financial markets—that is,
including Treasury issues, agency issues, and participation certificates—in the
sense defined above, would come out somewhere in a $10 billion-$12 billion
range in the current fiscal year. That would still be a sizable demand, coming
after a year of no net Federal credit demand in that sense^—^but it could
probably be managed within the context of financial niarkets that handle flows
in the range of some $70 billion or so a year, provided there was a good-sized
increase in bank credit.
Without prompt tax action and expenditure restraint, however, that net
credit demand from the Federal sector could bulge to $20 billion or more, and
there would be a real question about whether that sort of demand would be
"manageable," in the sense of preserving reasonably orderly markets. One
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19 68 REPORT OF THE SECRETARY OF THE TREASURY
cannot, for example, simply expect a sufficient expansion in bank credit to
accommodate whatever demands emerged from the Federal sector—any more
than this sort of accommodation could be expected on behalf of any other
borrowing sector in the economy. The monetary authorities would want to
appraise the total demands carefully and accommodate, only with increasing
reluctance, the larger volume of aggregate demands.
The process through which the niarket would allocate a limited supply of
credit among an excess of would-be borrowers oan be described, ahead of time,
only in qualitative terms and generalities. The particulars might work out
dift'erently under slight variations in circmiistahces. In general, though, it
may be predicted that the Federal Government's credit needs would be met,
one way or another, as would also the credit needs of larger business flrms.
The cost might be high—even in comparison to the high rates prevailing
today—but the supply probably would be there because some other borrowers
would be "pushed oft' the end of the bench" and unable to find money, except
perhaps at rates that were considered exorbitantly and prohibitively high.
Consumers niight fare unevenly in the scramble for available credit. Funds
for installment purchases, and other short-term credit, would probably be
available—but nioney for home mortgages would quite likely be a major victim.
As, in fact, it was the major victim in the tight money period of 1966 and in
similar past episodes. Business might also fare unevenly, with large firms, as
noted, getting their needs filled, and sniall ones having to make do with less^—
drawing on every last ounce of spare liquidity in the system, leaning on trade
credit, and cutting corners wherever possible in cash management. State and
local governnients would also feel the pinch, especially if bank credit expansion
potential was under some restraint. In the summer months of 1966, this was
one of the areas where we seemed closest to the stark possibility of nonfunctioning credit markets in which funds were unavailable at virtually any
price.
This is not a prediction, but an outline of possibilities that would conceivably
develop in the absence of responsible fiscal policy action on both taxes and
expenditure restraint. We had a taste of this in 1966, and that did not particularly whet our appetite for more of the same.
As to where we are now, at this point in the fiscal year, in accomplishing our
needed borrowing, we have done a good bit of the job already—but much of this
represents the seasonal portion of the job. Without timely tax action, some additional borrowing will remain to be done at the time of the year when we are
normally making substantial seasonal repayments.
With respect to cash needs for the July-December period, we are now in the
home stretch. In late July, we estimated that Treasury needs for market borrowing in the July-December period would be about $15 billion. That assumed timely
action to bring in some revenues from a tax increase before yearend; it assumed
participation sales of about $2 billion in this 6-month period, so that the total
financing need, in that sense, was $17 billion ; and it assumed that spending would
be near the lower end of the range outlined in the President's tax message of
August 3.
If the spending and tax assumptions do not stand up, that total need of about
$17 billion for this 6-month period could turn out to be higher—perhaps $1 billion
to $2 billion more. But, as noted, the major change could be reflected in borrowings over the following six months. Thus far, we have already either borrowed,
or announced the specific plan to borrow, close to $14 billion in Treasury securities, including $8.5 billion in tax anticipation bills, nearly $3 billion in regular
weekly or monthly bills, and $2i/4 billion in coupon-bearing securities. We have
not yet sold participation certificates in Federal agency loan portfolios in this
fiscal year, but we still expect to do some in the current half-year, and, thus,
avoid bunching up too great a volume of these sales in the January-June half
of the fiscal year.
It is fair to ask, in view of the many comments made on the need for a tax
rise to hold down Treasury borrowing and avoid excessive monetary strains,
"Plow is it that the Treasury has been able to borrow as much as it has without
greater disturbance tothe market?" The answer, I think, is twofold. First, there
has been a large expansion in bank credit that has greatly facilitated the amount
of borrowing we have had to do thus far. From January through September 1967,
seasonally adjusted commercial bank credit increased $29 billion, and bank
holdings of Treasury securities increased by $8 billion. Second, the receptivity
of the market has been conditioned by an expectation that responsible fiscal action
EXHIBITS
251
will be forthcoming—forthcoming in time to make a considerable difference in
borrowing needs during the months ahead.
Even with these expectations, though, interest rates are now high. Long-term
rates on Treasury and corporate securities are above the very high levels reached
in August and September 1966—mainly pushed aloft by the extremely heavy pace
of corporate borrowing earlier this year. Long-term, tax-exempt issues have
also risen in rate during recent months ; and, in just the last few days, these yields
have pushed above last year's peaks to the highest levels since the early 1930's.
Commercial banks have continued to invest in tax-exempt issues; but they have
tended recently to shy away from longer term issues.
Mortgage rates, typically sluggish, did not begin to decline until several months
after more sensitive rates turned down a year ago. But mortgage rates, too, have
been rising steadily in recent months. They remain below the late 1966 highs, in
part because of the continuing good inflow of funds to the traditional mortgage
lenders—notably, the thrift institutions. Those flows are vulnerable, however, if
rates on short-term marketable debt instruments rise to levels that begin to
attract funds that might have gone into the savings institutions, or that succeed
in pulling funds out of the thrift institutions, as occurred last year.
The big difference between interest rates now and a year ago is in the shortterm area. Even though these short rates have risen since last spring, they are
still well under the levels of a year ago—especially in the maturities of one year
or less. Rates on somewhat longer maturities—ithose of a few years, say—are
not so very far from the rates of a year ago, however, and this is an area of
some concern with respect to competition for funds going to the thrift institutions. When rates available on Treasury and Federal agency securities push significantly above the i^tes offered on various types of savings accounts, the possibility of "disintermediation" or divergence of funds from these thrift accounts,
and, hence, from the mortgage market, must be reckoned with.
Let me turn now to a little different area—or, rather, a different focus. Instead of the matter of current tax policy and its possible effects on the economy
and the credit markets, I want to consider certain points relating to credit programs that are carried out, guided or encouraged by the Federal Government.
In referring to this as a change of focus, rather than a wholly new topic, I have
in mind that both Federal fiscal policy (taxing and spending) and Federal credit
policy (lending, or loan guarantees and borrowing) are concerned with the use
of resources, the degree and kind of Governmental influence over that use, and
the method or methods of flnancing. This is an area of inquiry and endeavor
that is admirably suited to injections of new ideas and interpretations from the
academic community, or wherever else these ideas might be generated. It is,
indeed, a financial frontier, in need of exploration and development.
The subject is scarcely new, but some of the developments and applications
are new—and we continually find, in returning to this area, that there are many
facets remaining to be analyzed and organized. The first broad look at this, area
in recent years was taken by the privately sponsored Commission on Money and
Credit, which produced its Report in 1961. One of the members of that distinguished Commission was our present Secretary of the Treasury, Henry Fowler.
This Commission's study was followed by a Federal Government study by a
Committee on Federal Credit Programs, chaired by then Secretary of the
Treasury, Douglas Dillon. The Committee reported on its study in 1963. A major
study of Federal credit programs was also sponsored by the House Banking
and Currency Committee, and published in 1964. More recently, just about a year
ago, the Treasury made a study on certain aspects of Federal credit programs,^
as provided in the Participation Sales Act of 1966. The particular focus of that
study was an evaluation of the advantages and disadvantages of direct Federal
loan programs, as compared with guaranteed or insured loans.
One may well ask whether, with all those studies of the past several years, any
questions could possibly remain unanswered. The answer is assuredly in the
affirmative. That this was so has shown up clearly in still another related study—
that of the Budget Concepts Commission, which has wrestled at some length with
the question of how to treat loans, loan repayments, and loan participations in
the Federal budget. The Commission said this was one of the most difficult questions it faced. This has a significance that goes well beyond the mere accounting
technique—for a different budgetary treatment may tend to encourage or discourage particular types of loans and particular methods of financing them.
There can be significant differences, also, in the way that subsidies are accounted
1 See 1967 annual report, pages 229-47.
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19 68 REPORT OF THE SECRETARY OF THE TREASURY
for under various lending programs—whether they are to be buried as deeply as
possible, or exposed with explicit disclosure and, perhaps, with a need for specific congressional appropriations to cover a subsidy element.
Other things equal, most of us would have a predilection for keeping credit
programs a part of the private sector as far as possible—bringing in the Federal
influence only where needed to fill gaps that the private sector does not cover
adequately and that social policy demands be filled. But the United States is a
big economy with many credit needs, and there is no reason to believe that the
place of Federal credit programs, in the aggregate, will be diminished—more
probably it will grow.
For example, one area of national effort that clearly needs greater attention
is that of urban redevelopment—rebuilding the living quarters and employment
opportunities in our central cities, avoiding economic and racial concentrations
that become breeding grounds for progressive deterioration, and permitting our
society to be enriched by the full potential of its human resources. This cannot be
a task for Government alone, and certainly not for the Federal Government
alone. Much of the drive, much of the resources, and much of managerial talent
must come from the private sector. But, in partnership with various levels of
Government, through constructive and imaginative credit-support programs
among other aspects, there is a real potential for worthwhile achievement in
this area. This cannot mean, in the present context, large commitments of additional Federal funds from an already overstrained Federal budget. Nor should
it mean searching fbr budgetary accounting devices so that Federal expenditures
can be hidden away. But there is room, and need, for Government stimulus and
support for programs that have up to now been insufficiently attractive to draw
forth adequate private effort.
This brings me back to two points about Federal credit programs—their financing and the kinds of control or guidance that should apply to them. Should the
funds used for loan disbursements be recouped by selling off the loans, or by
selling participations in the loans? Should there be direct access to the Treasury
by the Federal lending agencies so that their financing comes in the form of
direct Treasury issues? Should there be more consolidation of the borrowing—not
the lending—functions of the Federal agencies and have financing done with
issues of a combined institution designed for this purpose? And what kind of
control or guidance^ should be exercised by the Federal Government? A form
of "debt limit" that puts a ceiling on overall loan volume outstanding or on
particular kinds—or limits on new loan volume in a particular period—or merely
the setting of standards and, perhaps, a regulation of interest rate ceilings on
such loans?
At the extreme, one might say that the Federal Government's role should
stop with the mere provision of a guarantee or partial guarantee of a loan that
remains in the private sector. Then, the volume of such loans can be regulated
by market forces, just as would any privately arranged loans. But if the Federal
Government's aegis is there, it is hard to say that no limit or restraining force
should be placed on the underlying credits. For, otherwise, there is a Federal
Government involvement—and potential for loss—in a wholly open-ended volume
of credit, which might or might not promote expansion along lines consistent
with overall econoniic objectives. The balancing of prudent public responsibility,
with as full rein as possible to private initiative, is a neat trick indeed—but one
that is well worth the prize, if it can be achieved.
I think it obvious from these few comments that, despite the study and work
devoted to the broad question of Federal credit programs, there is much more
work to be done. Here is an area—in applied finance—where the business schools
might well make a contribution. I commend it to you.
Finally, turning back again to our more immediate problems of economic
and financial management, the number one fact is the clear and present need
for a responsible Federal fiscal policy—a moderate tax increase, as proposed
by the President, and a firm restraint on spending. This is a prerequisite to the
successful resolution of deeper seated economic and social problems, for without a reasonably balanced general economic condition there is slim prospect
of being able to employ resources as needed to meet the problems we can all
identify around us. We need imaginative financing and new techniques to help
mobilize private capital and initiative effectively. But, even with the most
ingenious techniqueSj it is hard to see how the economy and the financial markets
could function properly with an outsized Federal budget deficit that provided
excessive spending stimulus and excess credit-market drag.
EXHIBITS
253
Exhibit 18.—Remarks by Under Secretary for Monetary Affairs Deming, February 27, 1968, at the Greater Los Angeles Metropohtan Area 1968 Industrial
Payroll Savings Campaign Meeting, Los Angeles, California, on fiscal and
financial policies
I am pleased to play a part in this occasion, which looks ahead to another
period of great achievement for our Savings Bonds Program—and which sets
its sights on greater payroll savings accomplishments in 1968.
During the past year—largely due to the efforts of your fellow Californian,
Chairman Dan Haughton of the 1967 Industrial Payroll Savings Committee—
your nationwide accomplishment surpassed the announced goal. More than 2 ^
million employees were signed up.
Of those new 1967 bond savers: 2,410,000 are from industry; 388,539 are from
the civilian rolls of Government, signed up in the Federal employees' campaign
headed by Postmaster General O'Brien.
Now we are well into a new campaign year. Our 1968 program is fortunate
to enjoy the leadership of Bill Gwinn--the 1968 National Chairman of the Payroll Savings Committee.
Total sales of savings bonds and freedom shares, during 1967, came to nearly
$5 billion—a rise of 2 percent over the previous year, and our best year in the
past eleven. Gross redemptions, including interest, were down by one percent
over the preceding year.
The net result^—the point that means most to us, as far as financing our
deficit and adding to the savings of individuals are concerned—was that the
volume of savings bonds outstanding increased by over $1.1 billion during 1967,
passing the $51 billion mark in August and closing the year at nearly $52 billion.
I believe that those good results are a tribute to the payroll savings promotion
that volunteer leaders like yourselves stimulate so effectively. I believe that they
ar^ also a tribute to the nationwide effort that has brought about the telling
of the savings bonds story in thousands of plants and places of business; in
union meetings and over the counters of banks; in newspapers and magazines;
in radio and TV broadcasts; and in motion picture theatres.
Since the inception of the Savings Bonds Program, in 1941, it has enjoyed
a remarkable blending of professional and volunteer effort and service. This is
nowhere better illustraited than by the presence and by the performance of the
niembers of this audience.
FISCAL AND FINANCIAL BALANCE
The Savings Bonds Program is an important element in our goal of fiscal
and financial balance. The $52 billion of savings bonds and freedom shares outstanding—held by tens of millions of Americans—^represents 24 percent of the
publicly held portion of our national debt. We need the Savings Bonds Program to
help finance the deficit. We need even more to reduce the deficit that needs to
be financed.
Yesterday, at a similar meeting in San Francisco, I spoke of the need to bring
our international payments position into substainable equilibrium—to eliminate
or sharply reduce our balance of payments deficit. Today, I want to speak of the
vital need to reduce our Federal budget deficit. We must move strongly on both
points if we are to achieve sustainable economic growth at home and expand
our trade and financial relationships with the rest of the world.
Fiscal stimulus and the economic outlook
Let me begin by noting the relationship of the Federal budget to general business activity. There is wide agreement today that the budget should be used as
an effective stabilizing force in the economy. For stabilization purposes, the
liudget should move in the direction of surplus when employment is high, demand
is growing rapidly, and inflation threatens. When business is sluggish, a budget
moving in the other direction, with the Govemment spending more thian it takes
in, tends to provide needed support to private demand and may prevent a recession. During most of the current expansion, the Federal budgetary position has,
in fact, been a stabilizing force.
In talking about the Federal budget today, I shall use two different measurements of it: one, the national income accounts budget; the other, the new unified
budget—used for the first time in the President's budget message this January.
The first provides the better picture of the economic impact of the Government's
fiscal program; the second, a better picture of the Government's financial needs—
the amount of the deficit that needs financing.
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19 68 REPORT OF THE SECRETARY OF THE TREASURY
Over time, t h e NIA budget tracks the changing course of the Government's
fiscal impact—^which both influences, and is influenced by, t h e pace of private
spending and taxable income. On the expenditure side, t h i s budget includes
Federal Government purchases of goods and services, and other Federal expenditures such as welfare paynients a n d grants-in-aid t o State and local governments.
In this respect, it closely parallels the expenditure account in t h e new unifled
budget.
'
At mid-1965, the NIA budget w a s running a moderate deficit—about $3 billion
a t a n a n n u a l rate. As t h e economy expanded rapidly, the budget moved into
balance by the end of 1965. Special fiscal measures taken early in 1966, and
incorporated in the T a x Adjustment Act of 1966, reinforced an already scheduled
$6 billion rise in payroll t a x e s for social insurance. Thus, despite a large rise
in defense spending, t h e NIA budget swung into surplus a t better than a $3
billion a n n u a l r a t e by mid-1966 a n d helped t o restrain the economy. Additional
r e s t r a i n t was needed, however, and monetary policy supplied it. In retrospect,
the t o t a l of flscal-mOnetary r e s t r a i n t was about r i g h t ; but, also in retrospect,
the share carried by monetary policy w a s larger t h a n it should have been.
The NIA budget moved to a position of near n e u t r a l i t y in the t h i r d q u a r t e r of
1966. Special measures were talven in the early fall to relieve the P'ressure in
financial m a r k e t s and to reduce inflationary pressures. By the end of 1966, with
an inventory adjustment in process, t h e NIA budget w a s appropriately moving
in the direction of fiscal stimulus. I n the first half of 1967, the effects of a massive
inventory adjustment were cushioned by a Federal deficit on national income
accounts of more t h a n $13 billion at an a n n u a l rate. In combination with monetary
ease, the added degree of fiscal support kept the inventory adjustment from
cumulating into anything worse.
I believe it fair to say that, from t h e middle of 1965 t o about the middle of last
year, t h e national inconie accounts budget w a s closely geared to the s t a t e of
the economy. In varying degrees, t h i s reflected both the automatic stabilizers
t h a t are built into our flscal system, and discretionary actions on both t h e t a x
and expenditure side. I do not contend t h a t the discretionary fiscal actions were
always pertectly timed, or precisely regulated. Those critics who are blessed
witli 20/20 hindsight have no difficulty in pointing to cases where a little more
or less, a little sooner or later, would have been better. But, if the recent fiscal
record falls short of perfection, the budget did, in general, exert a stabilizing
influence on the economy.
Since mid-1967, however, the budget position has threatened to become a
destabilizing influence on the econoniy and credit markets. I n J a n u a r y 1967,
the Adniinistration recommended a t a x increase to be effective a t mid-1967;
it h a s been pressing vigorously for it since last August. In the absence of action
on the proposed inconie t a x surcharge, the NIA budget is still in heavy deficit
a t a time when employment is high and private demand is rising. The fiscal
stimulus which w a s needed in the first half of last year w a s definitely not needed
in t h e second half, and is even less needed now.
P r o m p t action on the t a x increase proposals is needed. Large budget deficits
in periods of prosperity and rising prices a r e not called for by either the "new"
or the "old" economies. W i t h the economy expected to move ahead very rapidly
this year, a measure of fiscal r e s t r a i n t is clearly required.
W i t h the President's t a x prograni, the NIA budget deficit will fall to an estimated $5 billion average for the calendar year 1968 and remove much of the
expansionary t h r u s t from the Federal sector. In the absence of t a x r a t e increases, the deficit would probably stay near the $12% billion r a t e averaged
in calendar year 1967. A deficit of this size would ffive the economy too strong
a push from the fiscal side a—^push t h a t might very well throw it badly off
balance.
Even with fiscal restraint, the economy will move ahead briskly—perhaps too
briskly. Business fixed investment, is on the rise again. Inventory investment
h a s been picking up. If the availaJbility of mortgage money holds up, residential
construction expenditures will rise significantly. State and local governments
will be spending appreciably more. And Federal spending will also be up some—
despite close budgetary control.
All things considered, the balance of risk is t h a t the economy will begin
to exceed safe speed limits if fiscal r e s t r a i n t is not promptly applied. And,
if the pace of the econoray does begin to accelerate—with all t h a t it implies
in ternis of a more rapid rise in prices" and a deteriorating t r a d e balance—
there will have to be r e s t r a i n t of some sort. If it all h a s to come from nionetary
policy, the result could be a r e t u r n to tight money, drastically reduced availability of credit, and imbalanced financial markets.
EXHIBITS
255
Financial prospects
Currently, the cost of borrowed funds to home buyers. State and local governments and businesses, is generally at or above the peaks reached at the height
of the financial crunch in the late summer and early fall of 1966. In that period,
the Federal Government's credit demands were contributing very little to the
stringency in the money and credit markets. Since mid-1967, however, the story
is different.
Most observers of the financial scene feel that a major factor in the rise
in interest rates in 1967 was the Federal Government's fiscal situation. There
was an immediate impact on the financial markets due to exceptionally large
Federal borrowing. And participants in the financial markets also look to the
future. In the absence of congressional action on the tax increase, the future
looked like "more of the same"—continued heavy Federal borrowing, more inflation, and renewed monetary restraint.
The levels to which interest rates have risen have already forced postponement of some flnancial plans. As in any period of lessening credit availability,
home flnancing faces particularly difficult problems. With the rise in yields
available on market securities attracting more of the funds of individual savers,
the flow of savings to financial institutions has begun to diminish—particularly
inflows of funds to thrift institutions specializing in the financing of home construction and home purchases.
With the growth in their net savings flows declining, and with the yearend
dividend and interest-crediting period approaching, fears of savings institutions mounted late last year of a repetition of the large withdrawal of funds
that had occurred in niid-1966. Fortunately, the thrift institutions survived the
critical yearend period without suffering massive disintermediation. But the
relationship between the interest rate return these institutions can ofGer,
and the yields available on market securities, is at a point where very much of
a. rise in market rates could trigger significant withdrawals of savings funds
from these institutions.
Whenever there is serious concern about future inflows of funds, mortgage
lenders are understandably reluctant to increase the volume of new commitments
they are making for future mortgage lending. So far, loan commitments seem
to have held up pretty well on a national basis, and lending institutions are in
a relatively strong position. But this could change. In my opinion, prompt flscal
action to shrink the Federal deficit is still the best insurance of a continued advance in home financing and construction.
As for the general outlook for the credit niarkets over the months to come,
given the projected GNP rise of $60 billion or so, demands for funds by private
borrowers, and State and local governments, are likely to be quite large. Just how
large these demands will be will depend, of course, on a variety of factors, including the expectational and psychological climate in the economy and the
financial markets. And how much of these demands can be satisfied will depend
upon the demands of the Federal Govemment.
Why should an increase in private credit demands create such a stir in a
growing economy? First, this would be an increase on top of a very hefty total
last year. Second, monetary policy was relatively easy last year and is now pointed
in the direction of restraint. Third, the Federal sector is making increasingly
heavy demands in the credit markets and will continue to do so in the absence of
fiscal restraint. It is the combination of heavy private and Federal demands for
credit that threatens to strain niarket capacity and push interest rates still
higher.
Let me sketch the dimensions of the Federal demands. Here, I am using the
new unified budget. In the first half of calendar 1967, there was actually a large
net repayment of debt from the Federal Government—resulting in a $11 billion
reduction in private holdings of Government obligations (counting in participation certificates and the securities of Federal agencies, including the Federal
home loan banks and the Federal land banks). The comparable volmne of repayments was only $2 billion in January-June 1966, and $4% billion in JanuaryJune 1965. But, in the second half of last year, the Federal sector made net credit
demands on the private sector of some $18 billion. This was much above the net
credit demands of, roughly, $5 billion each in the July-December periods of
1964, 1965, and 1966. For the current half year, even with prompt action on the
tax bill, there will be a contraseasonal net credit demand of $5 billion or more.
Prospects for minimizing potential strain on money and credit markets in 1968
depend crucially on the enactment of the tax proposed by the Administration.
256
19 68 REPORT OF THE SECRETARY OF THE TREASURY
The tax program would mean an additional $16 billion in revenues during the
remainder of fiscal 1968 and in fiscal 1969. Given the outlook for Federal spending, as spelled out in the recent Budget Document, and with enactment of the
tax proposal, the 1968 deficit would be about $20 billion and, in 1969, it would
fall to about $8 billion in terms of the new Unified Budget.
Needed Federal borrowing to finance this fiscal 1969 deficit—including direct
Treasury debt, sales of participation certificates in Government-held loans, and
borrowing by Federal agencies—would approximate the amount of the deficit.
(It should be noted that under the new Budget concept this total excludes the
borrowing needs of the home loan banks and Federal land banks, as well as the
funds supplied by the security purchases of the Federal Reserve System. It also
excludes the financihg needs to support the secondary market operation of FNMA
after their assumed transfer to private ownership.)
Direct Treasury borrowing for the current half year—^that is, the last half of
fiscal 1968—is now largely completed with the recent one-two punch of a $4
billion combined refunding and prerefunding of publicly held maturing February, August, and November debt with a 4% percent 7-year note, and a cash
offering of a like amount of $4 billion through issuance of a 5% percent 15month note. Assuming the tax increase, the remainder of the Treasury's direct
first half financing needs can probably be met mainly through the additions to
our weekly bill sales announced last week.
But, there is other Federal borrowing aside from direct Treasury finance. Thus,
there will be some sales of both Export-Import Bank and FNMA participation
certificates. The Budget calls for additional participation certificate sales of
about $2.75 billion during the remainder of the current flscal year—of which
probably about $2 billion would go to the public. In addition, there will also be
some new money borrowings by several Federal agencies.
Still, the remaining Federal financing in the markets for fiscal 1968 is not
large and should put little additional pressure on the credit markets.
But, as we look beyond the next few months and into fiscal 1969, the tax
surcharge becomes the single most important factor in the Federal financing
equation.
Without the proposed tax program, budget deficits would continue to be excessive from the point of view of both economic stabilization and credit markets.
In terms of the new unified budget concept, the deficit for the current fiscal
year would be about $23 billion without tax action. In fiscal year 1969, without
tax action, the deficit might decline only slightly to about $21 billion. Fiscal
responsibility is simply incompatible with back-to-back budget deficits in fiscal
1968 and 1969 exceeding $20 billion.
Price behavior and inadequate fiscal restraint
I have pointed out that a large Federal deficit is inappropriate at a time of
high employment and rising demand. Our recent experience with prices has
shown how important it will be to keep demand within bounds this year. In 1967,
we had an appreciable amount of price inflation. Moreover, the general picture
was one of a much faster rate of price increase in the second half of the year,
when demand strengthened more than in the first half.
Without a tax increase, there seems little question that demand would grow
at an unsustainably rapid rate this year. Labor shortages would become more
acute. Cost increases would more readily be passed on in an atmosphere of
buoyant demand. The outlook would probably be for continuing price rises
this year, but for some acceleration of the rate of advance as the year progressed.
This would bode ill for the maintenance of steady and sustainable economic
growth next year and after.
Even with a tax increase, the price rise will not be stopped in its tracks.
Price behavior, for a good part of this year, will still be heavily influenced by
past developments. But, the tax increase would make a crucial difference by
slowing the upward rise in prices and, with fiscal restraint, we should be well
on our way to a less infiationary environment by the end of the year.
Conclusion
Now, I conclude by coming back to savings bonds. Whatever the Federal
deficit will be, we need to finance as much of it as possible out of savings^—and
savings bonds help greatly in this effort. Thus, it seenis to me that our assignment—here, today, and in the months to come—is to build on success. That is,
to follow through on the momentum built up in the banner year just ended—in
EXHIBITS
257
all phases of our program—^but particularly in the area of payroll savings, which
is the reason for our meeting together.
We have a message of great personal importance to get across to those millions of Americans who are not now signed up for systematic savings plans.
That message combines the common prudence of planning for the financing of
family requirements, along with the patriotic opportunity to lend a helping hand
to the achievement of the affairs of the Nation.
We are most fortunate to be American citizens. The gift of citizenship endows
our lives with privileges that are priceless. But good citizens don't just sit
down and hug themselves over how lucky they are to be Americans. They know
that it takes a lot of working; sometimes a lot of fighting.
The materiel of modern warfare comes high by the price tag. That's part of
the penalty of protecting freedom. That's one of the costs of citizenship.
Let's remember that behind the fighting line and the supply line, there's the
dotted line—where we sign up to buy savings bonds and freedom shares to help
support the valor of our servicemen in Vietnam.
As a great public program, our joint venture in U.S. savings bonds has become
the envy of the world. Nowhere else is there anything quite like the companionship of banking, husiness, education, Governnient, industry, and labor that blesses
our endeavor together.
As a great nation, we've come a long way together, and together we can meet
and master any challenge to our integrity, our prosperity, and our security.
Exhibit 19.—Statement by Under Secretary for Monetary Affairs Deming,
April 3, 1968, before the Senate Banking and Currency Committee, on S. 2923,
a bill to extend existing authority of the Federal Reserve banks to purchase
public debt obligations directly from the Treasury
I am very happy to appear before you this morning in support of S. 2923, which
would extend until June 30, 1970, the present authority of the Federal Reserve
banks to purchase public debt obligations directly from the Treasury up to a
limit of $5 billion outstanding at any one time.
My statement is quite brief, since I do not believe that provision of the necessary
means for the efficient management of the public finances is or ought to be
controversial.
This authority, which would otherwise expire on June 30 of this year, was first
granted in its present form in 1942 for a temporary period. It has been renewed on
13 separate occasions since that time. While used only very sparingly during these
past 26 years, I strongly share the conviction of my predecessors that maintenance
of this authority is essential to the proper and economical management of the
finances of the Government.
As shown in the table attached to my statement, the direct purchase authority
was used on four occasions since it was last extended by the Congress two years
ago. The authority was used only for a few days at a time, and the maximum
amount outstanding at any one time was $169 million. These borrowings occurred
just prior to tax payment dates thus permitting the Treasury to operate with
lower cash balances than would otherwise be required.
The figures in the table show clearly that the authority has not been abused. I
firmly believe that our borrowings should meet the test of the market and that
the direct purchase authority is not intended to allow the Treasury to circumvent
the authority and responsibility of the Federal Reserve System in its Open Market
Account operations. Any use of the authority, moreover, is clearly subject to the
discretion of the Federal Reserve System and, thus, it can serve as an added
instrument of Federal Reserve monetary policy. I might also add that these
borrowings, like any other Treasury borrowings, are subject to the statutory debt
limit.
Continuance of the direct purchase authority is essential for three reasons.
First, it permits us to allow our cash balance to decline to unusually low levels
during times when our revenues are seasonally low. We are, thus, enabled to keep
the public debt to a minimum and to save on the interest costs of the Government.
Without the potential ability to borrrow directly from the Federal Reserve, these
low balances could not prudently be maintained even for very brief periods. Rather
we would be compelled to enlarge our cash balances by borrowing additional
amounts in the market even though these amounts might be needed only for
a short while.
258
19 68 REPORT OF THE SECRETARY OF THE TREASURY
Second, there is always the possibility that temporarily unfavorable conditions
in the money and credit markets may make it desirable, both from our own point
of view and that of the Federal Reserve System, to postpone for a short time a
planned Treasury market borrowing. The possibility of direct access to the Federal
Reserve provides the flexibility required in such a situation.
Finally, I need not stress that the direct purchase authority is a key element
in our financial planning for a national emergency, such as might result from
a nuclear attack on tlie United States. In such circumstances our financial markets
could be seriously disrupted at a time when large amounts of cash were necessary
to meet emergency requirements. It is for this reason that an authority as large
as $5 billion is required although such a large amount has never been used.
I might add that it would be advantageous in this uncertain world, if the
temporary authority were to be made pernianent. We are not, however, proposing
that this be done although this committee might wish to discuss the question.
Direct borrowing from Federal Reserve Banks 19^2 to April 3, 1968
Calendar year
1942
1943
1944
1945
1946
1947
1948
1949
1950
1951
1952
1953
1954
1955
1956
1957
1958-1959
1960
.
1961.
1962
1963
1964
1965
1966
1967
1968 to date
.
-
-
'
J.
.
..
Maximum
amount at
any time
(millions)
Days
used
19
48
none
9
none
none
none
2
2
4
30
29
15
none
none
none
2
none
none
none
none
none
none
none
3
7
none
.
Number of Maximum
separate
number of
times used days used at
any one time
$422
1,302
.
.
.
220
108
320
811
.,172
.
.
.
.
.
.
.
.
.
.
.
424
6
28
1
2
2
4
2
2
2
1
3
9
20
13
169
153
Taxation Developments
Exhibit 20.—Statement by Secretary Fowler, August 14, 1967, before the House
Ways and Means Committee, on the President's fiscal program
Thank .you for this opportunity to appear before you in support of the fiscal
program recently announced in the President's Message. This prograin includes
both tax measures to increase our revenues and action by the Congress and the
Executive Branch to restrain, cut, and control expenditures so as to reduce the
prospective deficit in fiscal 1968 and thereafter to manageable levels.
I appeared before this committee in May to ask for borrowing authority needed
to finance a war. In order to keep the use of that borrowing authority to proportions compatible with our national economic and financial health, I appear today
to ask for taxing authority for the same purpose and to plead through this
committee to the Congress that it join with the President in making every possible
expenditure reduction—civilian and military—short of jeopardizing the nation's
security and well being.
EXHIBITS
259
We are engaged in a costly conflict in Southeast Asia with no clear prospect
of any early ending. But it is a temporary cost and surely one day will terminate
when the enemies of freedom conclude that the price of aggression is too high.
This unusual and temporary cost must be flnanced in a manner consistent with
preserving sound, balanced economic growth without inflation at home.
Fiscal responsibility means differing things in differing circumstances. In a
wartime context it must include the courage and willingness to raise the money
that is as necessary as the guns, planes, and materiel needs of our forces in
Southeast Asia.
In current circumstances fiscal responsibility means that in financing the
special and temporary costs of Vietnam we should obtain as much from temporary
tax revenues as economic conditions permit. However, it does not mean, under
present circumstances, that we should try to eliminate the entire deficit by a tax
increase—by a surcharge not of ten percent, but by one of nearly 50 percent.
Fiscal responsibility also means that we should hold down and restrain
expenditures that can be cancelled or postponed without damage to our national
interest. It does not mean attempting the impossible—the elimination of the
deficit solely by reducing expenditures.
The course of fiscal responsibility is the program outlined by the Presiderit,
namely, reducing the deficit "by rigidly controlling expenditures, raising as much
nioney as possible through increased taxes, and then borrowing the difference."
After an intensive examination of all the facts available to us, my colleagues
here and others in the Cabinet have advised and recommended to the President
that the prompt teniporary imposition of a ten percent surcharge on both corporate and individual income taxes, except for individuals in the lower income
brackets, is a necessary and equitable financial measure. We have concluded that
this proposal, supplemented by a speedup of corporate tax collections and a
teniporary deferral of scheduled excise tax reductions, is not only consistent with
the objectives of sustained growth, high employment and price stability, but
necessary if these objectives are to be successfully pursued.
Let me now set forth the basic overall reasoning that led us to the conviction
that the President's prograni represents the best choice of fiscal nieasures that the
present circumstances permit. The Director of the Budget, Mr. Schultze, will
cover the budgetary and expenditure aspects of the President's program in depth,
and the Chairman of the Council of Economic Advisers, Mr. Ackley, will deal
in some detail with the economic aspects of the program. I will also discuss some
of the financial reasons for the program and explain how the tax measures would
be implemented and how they would affect taxpayers.
I want to emphasize that we have arrived at these views on the basis of what
the President termed "the hard and inescapable facts." What are these hard
facts?
First, our special Vietnam costs are now being incurred at a rate in excess
of $22 billion per year. These costs are at levels that call for more financing
from current tax revenues—by a temporary surcharge of as much as economic
conditions permit.
Second, without this temporary surcharge, our budget deficit in the current
fiscal year would increase to unacceptable levels. This statement is based on the
original January budgetary levels of revenues and the expenditures for Vietnam
and all the other defense and civilian programs, and on the developments outlined
in the President's Message which make it necessary and realistic to revise the
expenditure estimates upward and the revenue estimates downward.
Third, despite the Federal Reserve System's continued application of a policy
of monetary ease, resulting in a substantial expansion of the nation's money
supply and credit, we are witnessing a return of long-term interest rates to levels
near their peaks of late last summer. Recently, short-term rates which had
moved steadily downward since last fall, have reversed their direction and have
begun to move back up. This temporary surcharge is therefore necessary to avoid
the risk of excessively high interest rates and limited credit in particular sectors, such as housing.
To the extent that the Federal Government must finance its growing deficit
by borrowings on the credit markets rather than pay for its additional expenditures by additional revenues raised through the surcharge. Government borrowing will increase the pressure on these markets and contribute to high interest
rates and the risk of inequitable and damaging imbalances in credit availability
—even assuming a continuation of the recent high rates of growth of money
supply and bank reserves.
260
19 68 REPORT OF THE SECRETARY OF THE TREASURY
The imposition of the tax surcharge is prompted by these hard facts of the
current cost levels of the hostilities in Vietnam, the current level of the budgetary
deficit that is being incurred, and the current levels of interest rates and credit
conditions in both the long and short-term areas. This conclusion does not involve
guesswork. Given these facts, the only valid reason for failing to impose this
temporary surcharge would be a solid conviction that it would be inconsistent
with preserving sound, balanced economic growth.
Although a temporary surcharge was included in the fiscal 1968 budget program to be effective July 1, it is wise for both the President and the Congress
to take this final decision when the course of economic developments accompanying the inventory readjustment in progress indicated that the impact of a
tax increase would be beneficial rather than harmful.
We are now of the unanimous view, and that view is confirmed by the overwhelming preponderance of economic fact and opinion, that any real danger of
an economic downturn is past. Indeed, the outlook given the scale of Federal,
State, and local public expenditures and private demand, is for a substantial
rate of growth in the period ahead—with the debate being confined to exactly
how rapid the growth will be.
This provides the fourth and final reason for a temporary surcharge. We view
the surcharge as a measure of insurance against ithe risk that, without this program of combining a temporary tax increase with expenditure restraint, the
levels of growth would give rise to unacceptable inflationary pressures. This development would take a toll of our economic balance and stability or be curbed
by excessively high interest rates and tight money that would provide an unhealthy, unbalanced economy, ill adapted to a smooth transition to peace with
prosperity.
I. WE NEED THE TAX INCREASE
1. To meet the special costs of Vietnam
I am sure that so long as hostilities are continuing in Vietnam no Member of
the committee would want or has wanted to deny the flnances necessary to
permit our fighting men to do an effective job. In the fiscal year 1966, the special
Vietnam outlays that followed upon our national decision of late July 1965
added $6.1 billion to our administrative budget expenditures. However, due
mainly to the accelerated growth of our economy, revenues climbed by $11.6
billion, so that we were able to close out the fiscal year 1966 with an administrative budget deficit of only $2.3 billion, which was $3 billion below the $5.3 billion
forecast in the original submission of the budget in January, 1965.
The original estimate for special Vietnam costs in fiscal 1967 as submitted
in the January 1966 budget, was $10.5 billion, more than a $4 billion increase
over fiscal 1966 costs. Accordingly, the Tax Adjustment Actxof 1966 was recommended and shortly enacted. It provided an additional $1.2 billion of revenues
in fiscal 1966 and an additional $4.6 billion in fiscal 1967, by accelerating collections and deferring scheduled excise tax reductions. That act did not involve
any increase in individual or corporate liabilities.
In the latter part of the calendar year 1966 it was apparent that the special
costs of Vietnam in fiscal 1967 would be nearly double those originally estimated
in the January budget. This reflected the rapidly increasing scale of hostilities
and the fact that, with these hostilities likely to continue, it had become necessary
to plan and budget for the continued conduct of hostilities on a substantially
increased scale through fiscal 1968.
A special supplemental appropriation for defense in the amount of $12.9 billion
was, therefore, requested in last January's budget message. A surcharge of 6
percent on both corporate and individual income taxes to last for 2 years, or
for so long as the unusual expenditures associated with our efforts in Vietnam
require higher revenues, was recommended to become effective at the beginning
of fiscal year 1968.
Immediate imposition last January of this surcharge was not requested because
of the temporary period of slack in the economy resulting from fiscal and
monetary restraints previously imposed and the inventory readjustment. Now,
however, inventories have been substantially readjusted, and the course of the
economy is heading upward.
I thus come to the hard, inescapable fact that the special costs of Vietnam
are now being incurred at a rate—in excess of $22 billion—that calls for a
temporary increase in the tax liabilities of individuals and corporations to meet
a portion of those costs.
EXHIBITS
261
2. To hold down the deficit
We could, of course, turn away from the course of responsible actions and
attempt to meet our financial obligations without resort to a tax increase.
Consider for a moment what this would mean in terms of the size of the deficit
that would result.
The budget for fiscal 1968 submitted la^t January estimated expenditures at
$135 billion—$75.5 billion for the Defense Department and Atomic Energy Commission, and $59.5 billion for civilian programs. As the Director of the Budget
will detail, these estimates may be exceeded by as much as $8.5 billion—$2.5
billion for civilian programs, $2 billion for a possible denial by Congress of the
authority to sell participation certificates in the amount included in the January
budget, and $4 billion for defense. In addition, with no tax increase and with
expenditures at the higher end of these contingencies, outlays for interest on the
public debt would also rise, by up to perhaps as much as $700 million.
The President has pledged to take every proper action to avoid an increase of
this magnitude. But as he pointed out in his message to Congress, action by the
Executive Branch alone is not sufficient. The outcome will also depend on congressional action with respect to appropriations and mandatory spending
requirements.
Turning to the receipts side, since last January revenue estimates have been
revised downward by approximately $7 billion:
—$800 million as the result of congressional action in restoring the investment
credit and accelerated depreciation earlier than the budget had assumed.
—$1.3 billion because of lower corporate profits and $300 million because of
lower personal income than projected 6 months ago.
—$3 billion because of a decrease in estimated yield from existing income tax
rates and $200 million because of a decrease in the estimated yield of gift and
estate taxes and customs.
—$600 million because of a reduced estimate of miscellaneous receipts such as
stockpile sales ($450 million) and offshore oil revenues ($80 million).
—$800 million because of a later effective date for the surcharge on personal
income taxes than recommended last January.
The budgetary consequences of these revised estimates of revenues and the
expenditure contingencies outlined would imply a deficit of $23.6 billion. In the
event no tax increase were enacted, and in the absence of tight expenditure
control, the deficit could rise to $29 billion (including $700 million for the higher
interest cost on the public debt that such a deficit would involve). On the other
hand, with tight expenditure control and with the tax increase programs, the
deficit can be kept within a range of $14 billion-$18 billion.
Chairman Ackley will develop in detail the broad economic consequences that
are presented by a choice between these two alternative courses of action.
3. To avoid excessively high interest rates and tight money
I cannot stress too strongly my deep concern about the pressures that would be
exerted on the money and credit markets by the borrowing requirements associated with a deficit in excess of a $14 billion-$18 billion range. The credit markets
can accommodate a Federal deficit of considerable size. But given present private
demands for credit, an outsized Federal deficit, such as would result without the
proposed tax rise and expenditure restraints, cannot be accommodated without
severe disruption to the credit markets, sending interest rates sky-high and
shutting off the fiow of credit to sectors such as the home mortgage market
and small business.
Some people may ask why we have to raise taxes and hold back spending. Why
can't we borrow more? Isn't the U.S. Government's credit good? These questions
come naturally because none of us likes to raise taxes or reduce or deny funds
for many worthwhile programs. The fact is that we must choose among alternatives: one is to raise taxes and reduce expenditures to the maximum extent
feasible, and then borrow the rest; the other is to go much deeper into debt
through very heavy borrowing. It is my particular assignment today to explain
why unlimited recourse to borrowing would be risky and unfortunate in the
present financial situation.
Some may also ask: "What about World War II, wasn't there very heavy recourse to borrowing then?" The answer is that there was such recourse then,
but it was undertaken only in conjunction with widespread direct controls (complete allocation of materials and facilities; price, wage and salary controls; direct
credit controls) that limited activities not directly related to the war effort. Even
318-223—69
19
262
19 68 REPORT OF THE SECRETARY OF THE TREASURY
with these measures there was a substantial infiationary cost. In the current
situation we have avoided those rigid controls, and also avoided the milder controls of the Korean period. We propose in tlie present situation to follow general
fiscal and monetary ijolicies that continue to make it possible to avoid rigid direct
controls.
Now let us consider our financial markets and the demands on those niarkets.
To see how the pieces fit together, we need to look at the whole range of demand
and supply factors. Concentration on just one part of the whole picture will not
do. This run-down may be a bit elementary and even tedious, but I think it is so
important to keep the whole credit market picture in mind that it is worth
going over this with some care.
On the demand side, the major components are the business sector, the consumer sector, and Government.
Businesses borrow to expand their facilities and for working capital, such as
to finance inventories.
Consuniers borrow chiefly to finance home purchases and for an increasing
variety of consumer goods and services—such as cars, vacations, college expenses.
Governments borroAv to finance their cash deficits, which arise when the net
outpayments from spending and lending programs are not covered by tax and
other revenues.
On the supply side, the main sources of credit are the banking system, other
financial institutioris, and savings generated in the business and consumer sectors.
Two of these sources deserve special mention because of their strategic
importance.
The banking sector, including the central bank, is a kind of balance wheel
which can be perriiitted or encouraged to supply increasing amounts of credit,
or discouraged from so doing by the availability of reserves provided through
the central bank.
The other highly strategic sector is the direct supply of credit from individuals.
It is strategic because its variations up or down are closely related to net pressures on the markets and on interest rates. Normally, the volume of credit supplied directly by individuals is small. Most individuals place their savings with
thrift institutions which in turn lend these funds to borrowers. This is known
as financial intermediation. When this individual sector is called on to supply a
substantial amount of credit directly, rather than through savings institutions or
other intermediaries, it is usually a sign of market pressure. This normally occurs
when demand is rising very strongly and borrowers are more interested in getting
their money than ih the rates they have to pay for it.
That is what happened in 1966. With credit demands rnnning strong, and
supplies limited, interest rates on open inarket paper kept rising until willing
investors could be found—which in many cases involved the withdrawal of funds
from thrift institutions and direct investment by individuals in high-rate market
paper. The halt in bank credit growth thrust further demands on individuals.
Credit demands had no place else to go, once the banks and other financial intermediaries could not handle any more. Either the demands could be met by tlie
residual sector—individuals—or they could go unmeit. In the process of sorting
out the demands that would be met and those that would not be met, interest
rates last summer reached the highest levels in several decades.
Starting a little less than a year ago, there was a dramatic turn for the better
in the credit markets, reversing some of the forces that had produced earlier
strains, but leaving some scars and vivid recollections. The factors making for a
change included the temporary suspension of the investment tax credit, a reduction and rearrangement of Federal demands on the credit markets, holdbacks in
Federal spending programs, legislation and administrative action to restrain the
fierce competition for consumer savings, and a Federal Reserve move toward
easier reserve availability. By early 1967, credit market pressures relaxed further,
as econoniic growth abated, monetary policy eased some more, and the President's
fiscal program announced in January proposed a tax surcharge to begin in fiscal
year 1968.
Easier credit was evident in terms of both availability and cost. The nation's
money supply expanded at a 6 percent annual rate in the first half of this year,
while total bank credit has grown at an annual rate of about 11 percent. The
discount rate was reduced from 4 ^ percent to 4 percent, and the prime bank lending rate from 6 percent to 5^/^ percent.
Yet, in the face of this expansionary monetary policy, long-term interest rates,
which had turned down from their peaks of last August and September to sub
EXHIBITS
263
stantially lower levels through March, have more recently moved back up and
reached levels micomfortably close to last summer's peaks. Indeed, for some types
of Government and corporate bonds, current r a t e s are as high a s those of a year
ago.
The decline in short-term rates from last year's peak levels proceeded into June,
and extended to more t h a n two full percentage points on some types of securities.
I n recent weeks those r a t e s have also bottomed out, however, and moved back up
as much as a percentage point—although they reniain well below last year's
peaks.
A major cause of the rise in long-term rates sinee Marcli is the huge volume of
borrowing by corporations and by State and local governments. New capital issues
by corporations in the first 7 months of 1967 were a record $13.5 billion, u p 23
percent from the similar period in 1966—which had been a record-breaking year.
If one excludes private placements by corporations and looks j u s t at public offerings, whicii have a greater immediate m a r k e t impact, t h e volume of new issues
was $7.2 billion in the first half of t h i s year, against $8 billion in all of 1966 and
$5.6 billion for all of 1965.
To a considerable extent, this heavy pace of offerings h a s reflected a desire of
corporations to take advantage of greater credit availability to rebuild their
liquidity a n d reduce t h e i r dependence on the banking system. Last summer, even
some of t h e largest corporations found their access to bank credit limited, and
this experience is still quite memorable to corporate treasurers.
States and municipalities have also borrowed very heavily, and for somewhat
similar reasons—making up for some postponements of borrowings last year and
seeking to obtain some money needed now or in the future while it is currently
available. New tax-exempt issues by State a n d local authorities came to $8.8 billion in the first 7 months of t h i s year, up about 28 percent from a year earlier.
T h e r e is an additional m a r k e t factor t h a t seems to be impelling this headlong
rush to borrow, even a t current high rates. Many of these corporations and governmental authorities a r e said to be pushing t h e i r borrowings because they fear
t h a t a greatly increased Federal Government deficit will produce still higher
interest rates and tighter conditions of credit availability in the months ahead.
And they a r e apparently concerned t h a t big Federal Government demands might
coincide with an increasing buildup in private demands t h a t would revive inflationary
pressures, in t u r n boosting spending and - income and eventually
stimulating still greater credit demands.
The fact t h a t this can happen against a background of expansionary nionetary
policy h a s been demonstrated clearly in recent weeks and nionths. So it is no
answer for those who inveigh against high interest rates to call for easy money
unless they a r e ready to see higher taxes or unless they a r e willing to t a k e the
risk of a serious inflation.
A special reason for prompt action to cut the prospective Federal deficit is
the desirability of encouraging the current uptrend in homebuilding and the
increased availability of money in t h e mortgage market. Last year t h e mortgage
niarket w a s starved for funds and homebuilding went through the wringer—
particularly as thrift institutions lost funds to higher paying open m a r k e t paper
and b a n k deposits. This year, traditional mortgage lenders have experienced
record inflows of funds. Some of this inflow has been used to rebuild depleted
liquidity, but the availability of mortgage funds has also improved greatly. Yet
there can be no complacency about this improvement, for since this spring, rising interest rates on corporate securities have tended to a t t r a c t some funds from
thrift institutions into these securities r a t h e r than into mortgages. The recent
rise in short-term rates, if it goes much further, could pull savings funds directly
out of t h e thrift institutions. These developments raise the possibility of a new
stringency in housing credit.
We do not present the proposed t a x surcharge as something t h a t will cut
interest r a t e s immediately and sharply, or eliminate all t h e problems t h a t have
faced the financial markets, the mortgage niarket, or homebuilding in the past 2
years since the Vietnam escalation began. Even with a t a x increase, there will be
a sizable Federal deficit, and sizable competing demands from the private sector.
B u t a tax. surcharge will reduce the size of the Federal deficit and the size of
Federal borrowing needs. I t will help assure a continuation of expansionary
monetary policy, and it will reassure borrowers and lenders t h a t there is no need
for a renewed scramble for funds or run-up of interest rates. I t could well t u r n
the tide in t h e credit markets, calm down the precautionary borrowing and
produce freer flows of funds at more reasonable rates of interest.
264
19 68 REPORT OF THE SECRETARY OF THE TREASURY
We have discussed the recent role of certain key private sector demands on
the credit markets, but it is particularly important, in weighing the need for
fiscal action, to look at Federal Government demands. Consider these facts relative to Federal credit demands on the private sector in the fiscal year ended
June 30, 1967:
—The total outstanding volume of Treasury securities. Federal agency
securities, and participation certificates increased h j slightly under $10 billion.
—But Grovernment investment accounts increased their holdings of these issues
by $11.6 billion, and the Federal Reserve added $4.5 billion to its holdings.
—^Thus instead of exerting a net credit demand on the private sector, Federal
credit market operations actually supplied over $6 billion to the private credit
markets through net repayment of debt,
—Even after making an adjustment for the $5 billion decline in the Treasury's
cash balance over the fiscal year, there was still a net repayment of credit from
the Federal sector to the private sector.
The picture in this current fiscal year will be different. It will not be a question
of net repayment of credit by the Federal Government to the private market, but
of how large a net demand might be made on those markets.
Illustrative of the possible Federal credit demands, suppose that the administrative budget deficit in fiscal year 1,968, with the proposed tax measures enacted,
is $14 billion.
—Adding together the increases in Treasury debt, Federal agency debt, and
participation certificates, there would be an increase in outstanding obligations
of some $20 billion-$21 billion. Making rough allowance for purchases by the
Government investment accounts and Federal Reserve, the net demand on the
private sector might be around $10 billion-$12 billion. (This $10 biilion-$12 billion net demand for the full fiscal year should not be confused with the estimates
recently reported for prospective Treasury borrowing in the July-December
1967 period; the latter estimates, which anticipated market borrowing of $15
billion in Treasury issues and possibly $2 billion in participation sales, include a
seasonal component which would be reversed later in the fiscal year when a
seasonal surplus of revenues over expenditures is anticipated.)
—Without the proposed tax measures, the Federal sector's net demands on the
private credit market in fiscal year 1968 would be $7.4 billion greater. Moreover,
added financial requirements could arise, as they did in 1966, from further
demands on Federal credit agencies, because of tightened credit conditions in
the private sector.
—The total of Federal credit demands on the private sector, without. tax
action, could thus reach $20 billion, or exceed it if expenditures ran to the
higher side of the range of contingencies now contemplated.
Moreover, the difference between net Federal credit demands on the private
sector on the order of $10 billion-$12 billion,' or on the order of $20 billion or
somewhat more, depending mainly on the presence or absence of tax action,
does not tell the full story. For along with swollen Federal credit demands,
the failure to hold down the budget deficit would create an inflationary environment in which private credit demand could soar, and in which it would be more
difficult to continue an expansionary monetary policy, and that would cut down
on total available supplies of credit.
Thus private credit demands, in the absence of a tax surcharge, would be
hit in three ways—by the enlargement of Federal credit demands, by a swelling
of the private demands themselves, and by the curtailment of total credit supplies.
The net result would be a vastly different set of credit market conditions, imposing a very substantially heavier net demand for funds that could not be met by institutional lenders, and that could be met only in part by the residual sector
made up mainly of individuals.
One can only conjecture about the precise pattern and sequence of events
through which tightened credit conditions would envelop the market in the
absence of a tax increase, but last year's experience might provide some guidance.
One could expect, fbr example, that as the Treasury and Federal agencies came
to market in greater and greater volume, higher rates would have to be paid
to draw in additional investors. Increasingly, the funds might be drawn from
the thrift institutions that are the mainstay of the mortgage market.
In the meantime, corporate borrowers would bid rates up, and attract investment from institutional lenders that have the flexibility to shift among Government securities, corporate issues, and mortgages. Banks might well face insistent
business demands to draw on credit lines, while lessened reserve availability
EXHIBITS
265
kept a tighter lid on the banks' total portfolio, so that less could be put into
Federal Government securities or tax-exempt issues even at steeply higher
interest rates.
Along with the mortgage market, and State and local government borrowers,
other borrowers with relatively limited bargaining power and limited flexibility
of alternative credit resources would also be likely to suffer disproportionately
at the hands of tightened credit conditions—including small business and farmers.
It would be a case of "pay up or do without," and perhaps a case of "doing
without" even for those willing to "pay up" to a considerable extent.
It would be sheer hypothesis to guess what heights interest rates might have
to scale in the grim process of sorting out the credit demands that would be
met, and those that would not be met, but the pressures would clearly be there,
in the absence of tax action and tight expenditures control action, to push rates
substantially higher than they are now. One need only look around the world,
even at highly industrialized countries, to see Government bond yields of 7
percent or more—and indeed of more than 8 percent during much of last year
in Germany. Rates on prime industrial bonds in the United Kingdom have ranged
as high as 8 percent as recently as a year ago, and these yields touched 9 percent
in Germany.
These, I submit, are not tolerable conditions for the United States.
I have dwelt at some length on the importance of
@FedFRASER