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Dallas, Texas, November 20, 1942

To All Banking Institutions, and Others Concerned,
in the Eleventh Federal Reserve District:
There is reproduced herein the text of a statement made
today by Secretary of the Treasury Morgenthau, giving in­
formation with respect to December Government financing.
Copies of the official circulars governing the new issues
referred to in this statement will be mailed to you within the
next few days.
Yours very truly,




This publication was digitized and made available by the Federal Reserve Bank of Dallas' Historical Library (

For Release, Morning Papers,
Friday, November 20,1942
Secretary Morgenthau today made the following statement:
In order to finance the war effort, which now is moving into final stride, the United States
Treasury will borrow during December the unprecedented sum of approximately $9,000,000,000
from all sources. This sum will be raised partly through the continuing sale of savings bonds and
tax savings notes, and partly through offerings of a number of new Treasury issues designed for
every class and type of investor. Thus every American will have an opportunity to back the armed
forces with bonds.
The Victory Fund Committees will launch an intensive sales campaign on November 30 on three
series of offerings of new securities. These well organized and expanding groups of 44,000 volunteer
workers, drawn largely from the securities and banking fields, will solicit subscriptions from indi­
vidual investors, corporations, savings and commercial banks, insurance companies, institutions,
trusts and estates. The president of the Federal Reserve bank in each of the twelve districts is
chairman of the Victory Fund Committee in his district.
At the same time the War Savings Staff, with its 300,000 volunteers in every community, will
intensify its drive to add at least 7,000,000 more income-earners to the ranks of those already invest­
ing regularly in Series E War Savings Bonds through the payroll savings plan.
Almost every citizen has funds in the form of currency or bank deposits which can be enlisted
in the war effort in one way or another through the purchase of government securities.
The special offerings to be sold under the direction of the Victory Fund Committees will
consist o f:
1. Twenty-six year 2V2 per cent bonds due December 15,1968, callable December 15, 1963,
to be issued in coupon or registered form at the option of the buyers. Commercial banks, which
are defined for this purpose as banks accepting demand deposits, will not be permitted to hold
these bonds until ten years after the date of issue. There will be no limit to the amount of this
issue, and no restrictions upon issuance excepting the temporary exclusion of commercial banks
from ownership for their own account. Subscription books will be open November 30, and will
remain open several weeks. The bonds will be sold in denominations from $500 to $100,000.
2. Two series intended for banks as well as other investors: (a) 1% per cent bonds due
June 15, 1948, and (b) % per cent certificates of indebtedness due one year after issuance.
These securities will be open for subscription by banks, and also by all other classes of investors,
whether private, corporate or institutional. Sales to commercial banks will be limited to
$2,000,000,000 or thereabouts of each series. Applications from commercial banks in amounts
up to $100,000 will be allotted in full, and larger subscriptions on an equal percentage basis.
All applications from others than commercial banks will be allotted in full. The total of
these securities to be issued thus will be the $4,000,000,000 from commercial banks, plus the
full amount subscribed by others.
For all classes of subscribers other than commercial banks, subscription books will be
opened November 30 for both series, and will remain open for several weeks. For commercial
banks subscription books will be opened November 30 on the 1% per cent bonds and will remain
open until the close of business December 2, while books will be opened December 16 on the
% per cent certificates and will remain open until the close of business December 18. In the
case of such bank subscriptions, payment for the bonds must be made on December 11, and
for the certificates on December 28.
The 1% per cent bonds will be issued in coupon or registered forms, at the option of the
buyers. The % per cent certificates will be issued in coupon form only. The bonds will be sold
in denominations from $500 to $100,000, and the certificates from $1,000 to $100,000.

The 2 1/2 per cent bonds, 1% per cent bonds and % per cent certificates of indebtedness will
be dated December 1, 1942, and will bear interest from that date. Accrued interest will be charged
on all subscriptions for which payment at a Federal Reserve bank or at an authorized depositary
is received later than December 1.
Any bank or trust company qualified to hold war loan deposits will be permitted to make pay­
ment by credit for securities subscribed for its own account or that of its customers up to any
amount for which it shall be qualified in excess of existing deposits.
All elements of the banking and securities business will conduct a vigorous campaign to assure
the widest possible public purchases of all issues of these securities. In conjunction with weekly
sales of discount bills, these arrangements will make approximately half the $9,000,000,000 of
Treasury borrowing in December available from non-banking investors, while the other half will
be made available by commercial banks. The widest possible public participation is essential in the
interest of sound financing out of current income and savings.
After completion of this borrowing the Treasury does not expect to do further major financing
until February. For its new money needs in January the Treasury will rely upon further sales of
tax savings notes, savings bonds, and Treasury bills.

Federal Reserve Bank of St. Louis, One Federal Reserve Bank Plaza, St. Louis, MO 63102