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•

ROOM 5030
JUN 1 * W 2
TREASURY D E P A R T ! ^

493029

- 3 -

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
be interest. Under Sections h54 (b) and 1221 (5) of the Internal Revenue Code
195h 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

and such bills are excluded from consideration as capital assets. Accordingly,

the owner of Treasury bills (other than life insurance companies) issued here

need include in his income tax return only the difference between the price pa
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. 4l8, Revised, and this notice, prescribe

the terms of the Treasury bills and govern the conditions of their issue. Copi
of the circular may be obtained from any Federal Reserve Bank or Branch.

- 2 -

1
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 sub-

mitting 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 $200,000 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.

Settlement for accepted

tenders in accordance with the bids must be made or completed at the Federal Reserve Bank on

October 9, 1958

, in cash or other immediately available funds

or in a like face amount of Treasury bills maturing

October 9, 1958

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.
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,

IT.THft

TREASURY DEPARTMENT
Washington

A. M.
U K RELEASE^ OTHXHK NEWSPAPERS,
Thursday, October 2, 1958
•

The Treasury Department, by this public notice, invites tenders for
$ 1,800,000,000 , or thereabouts, of

-day Treasury bills, for cash and

TIB

in exchange for Treasury bills maturing

October 9, 1958

, in the amount of

$ 1,700,110,000 , to be issued on a discount basis under competitive and non-

—w
competitive bidding as hereinafter provided.
dated
October 9, 1958
, and will mature

The bills of this series will be
January 8, 1959
, when the face

Bar

amount will be payable without interest. They will be issued in bearer form only,
and in denominations of $1,000, $5,000, $10,000, $100,000, $500,000 and $1,000,000
(maturity value).
Tenders will be received at Federal Reserve Banks and Branches up to the
Daylight Saving
closing hour, two o'clock p.m., Eastern/JBkH.nmlMrri time, Monday, October 6, 1958
Tenders will not be received at the Treasury Department, Washington.

Each tender

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.
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

RELEASE A.M. NEWSPAPERS,
Thursday, October 2, 1956.

A-335

The Treasury Department, by this public notice, invites tenders
for $1,800,000,000, or thereabouts, of 91-day Treasury bills, for
cash and In exchange for Treasury bills maturing October 9, 1958,
in the amount of $1,700,110,000, to be issued on a discount basis
under competitive and non-competitive bidding as hereinafter
provided. The bills of this series will be dated October 9, 1958,
and will mature January 8, 1959,
when the face amount will be
payable without interest. They will be Issued in bearer form only,
and in denomination of $1,000, $5,000, $10,000, $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, two o'clock p.m., Eastern Daylight
Saving time, Monday, October 6, 1958.
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.
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 such respect shall be
final. Subject to these reservations, non-competitive tenders for
$200 000 in
or full
less without
stated price from
any one
bidder will
be
accepted
at the average
(in three
decimals)
of accepted

- 2 competitive bids. Settlement for accepted tenders in accordance
with the bids must be made or completed at the Federal Reserve lianK
on October 9, 1958, in cash or other immediately available funds
or in a like-face amount of Treasury bills maturing October 9, iyj>o*
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.
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 195^* *Bie 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 actuallyreceived 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. 4l8, Revised, 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.

oOo

-1

BfflEDIATE REIEASB
Wednesday, October 1, 1958.

A-336

The Bureau of Customs announced today that the absolute quota
of 8,883,259 pounds on Mexican cotton of less than l-l/8 inches in
staple length (other than harsh or rough cotton of less than 3/4
inch in staple length, and other than linters) was filled at the
opening moment of the quota year on September 22, 1958, the first
business day of the quota period. Of the total amount of such
cotton presented for entry, 5.8891 per centum was authorized
release, which amount filled the quota.
The quota of 618,723 pounds on Brazilian short staple cotton
was also filled at the opening of the quota, as was the quota of
239,690 pounds on Canadian cotton waste, and a total of 88,573
pounds of cotton waste was charged to the United Kingdom cotton
card strip quota of l,4Ul,l52 pounds.

5
TREASURY DEPARTMENT
W A S H I N G T O N . D.C.

IMMEDIATE RELEASE
Wednesday, October 1, 1958.

A-336

The Bureau of Customs announced today that the absolute quota
of 8,883,259 pounds on Mexican cotton of less than 1-1/8 inches in
staple length (other than harsh or rough cotton of less than 3/4
inch in staple length, and other than linters) was filled at the
opening moment of the quota year on September 22, 1958, the first
business day of the quota period. Of the total amount of such
cotton presented for entry, 5.8891 per centum was authorized
release, which amount filled the quota.
The quota of 618,723 pounds on Brazilian short staple cotton
was also filled at the opening of the quota, as was the quota of
239,690 pounds on Canadian cotton waste, and a total of 88,573
pounds of cotton waste was charged to the United Kingdom cotton
card strip quota of l,44l,l52 pounds.

6
0'J

Bif^IATS 3BL&AS8,

?h* Tvooftury today aaaom*** & IS percent ollotoflnt on mvbmri$m
tions in excess of $SO«000 for th* owrrmt omh ofimring ot $1 biXULam
of 5~l/£ percent fitouury KotM of Smim

$»19£9*

O B th* oMpwion off^riag of §f*4/l billta* ttfr**? framrjr b U l »
priced to yl*M to th* imr@hms#r *£ftmdN&*ly 8.SS pw?om%9 the
Treasury iai©o\m#«i a 44 p*re*ni mXlatoamtit on m&mlptlott* in «x****
©f 1100,000.
Subscription* for ISO, (XX) ©r 1*** for th* m%m

and for 1100,000

or l@®s for th* bill* will b« olioitftd In full, and inscription for
worm than the otalauR allotment for *lth*r i»*u* willfeeallotted not
less than the miMmm

figtam. Xn *4diUoit to th* ootnt, all©tt*«l to

th® p * U c 1100 million of th* not** will bo allotted to O o m n m n t
Imrestnent Account®,
Aoport* receive thus far from the federal R#®#rve B&ak* show
that subscriptions total about §£,§§© Million tor th* not**, of wbi«n
$lt088 million, or SB p«reeiit* mm

x***lv*6 from oil*** thin

mmmr*

*1*X bank®. Subscription totaling |ft790 atlltoa w*r# rooolvid for
the bills, of vineh $mz million, or X? pmromts mro received from
others than eo»sreiml bank*.
Details m to ff*Mlptlon» mtA allotment* will b# mmmmmi
final reports are received from th* Federal few**** Bank*.

wkmn

TREASURY DEPARTMENT
WASHINGTON, D.C.
BMEDIATE RELEASE,
Thursday, October 2, 1958.

A-337

The'Treasury today announced a 35 percent allotment on subscriptions in excess of $50,000 for the current cash offering of $1 billion
of 3-1/2 percent Treasury Notes of Series B-1959.
On the companion offering of $2-1/2 billion 219-day Treasury bills
priced to yield to the purchaser approximately 3.25 percent, the
Treasury announced a 44 percent allotment on subscriptions in excess
of $100,000.
Subscriptions for $50,000 or less for the notes and for $100,000
or less for the bills will be allotted in full, and subscriptions for
more than the minimum allotment for either issue will be allotted not
less than the minimum figure. In addition to .the amount allotted to
the public $100 million of the notes will be allotted to Government
Investment Accounts.
Reports received thus far from the Federal Reserve Banks show
that subscriptions total about $2,690 million for the notes, of which
$1,038 million, or 39 percent, were received from others than commercial banks. Subscriptions totaling $5,790 million were received for
the bills, of which $982 million, or 17 percent, were received from
others than commercial banks.
Details as to subscriptions and allotments will be announced when
final reports are received from the Federal Reserve Banks.

y?>

BMLUSE A. H. mmpiimm,
Tuesday, Oeteber 7, 19ffi,

The Treasury Beparti&eiit anaouiieed last evetiiag that th* tenders for H,SOO»OOO»O0|

or thereabout*, @f 91-day treasury bills to be dated Oetober 9, X90$ **& to matu

January 8, 1959, which were offered on Oetober %9 were ©pes*** at the Federal mm
Bank* on October 6.
The details ot this issue are a* fellows*
total applied for - #1*331,6614,000
Total aceepted
- 1,806,119*000 (iael^** #io1i,6^*900 enter** ©a a aosoo^etitiT* basis and aeeepted in f u U
at the average price shown below)
Range of accepted competitive bidet
High
•&ow

~ 99.d$0 IfSiimieat rate of 4is#omt approx. t.$3*l% pmr annus
- 99*306
»
•
e
«
»
t.tk$% •
»

Average

- 99.326

•

%.tm$ •

(51 percent of the amount bid for at the low price was accepted) .
Federal Reserve
District

Total
Applied tor

Total
Ae**^

Boston
Mew York
Philadelphia
Cleveland
Richmond
Atlanta
Chicago
St* Louis
Minneapolis
Kansas City
Dallas
San Francisco

|
33,l6f,©eo
l,73j,98ii,O00

37,201,000
909m*0OO

28,162,000
l,17$,l6J*t000
1S,072,000
k?,l§6,000
20,527,000
37,132,000
fi*M3!l,00©
2U,6U2,000
U9lkO900O
g©,fl$,000
37,202,000
£O.H3.OO0

$2,361,66^,000

H,S00,119,000

3M7t*ooo

10,186,-000
20,127,000
37,332,000
i#3,t&,800
2k,$k2,000

xi9m$$9m®
H,u$,ooo

„
fOfAI*

TREASURY DEPARTMENT

WASHINGTON, D.C.
R*L!7A£3 A. M. Sir.~3R4PERS,
Tucsdiy, October 1, 1958,

A-336

The Treasury Department announced last evening that the tenders for $1,800,000,000

or thereabouts, of 91-day Treasury bills to be dated October 9, 1958, and to natu

January 8, 1959, which were offered on October 2, were opened at the Federal Rese
Banks on October 6.
The details of this issue are as follows:
Total applied for - $2,38l,66U,000
Total accepted
- 1,800,119,000 (includes $261^,656,000 entered on a noncompetitive ba^is and accepted in full
at the average price shown below)
Range of accepted competitive bids:
High
Low

- 99.360 Equivalent rate of discount approx. 2.532$ per annum
n
- 99.306
«
»
»
»
it
2.1k$% n

Average

- 99.326

2.668$ «

(51 percent of the amount bid for at the low price was accepted)
Federal Reserve
District
Boston
New York
Philadelphia
Cleveland
Richmond
Atlanta
Chicago
St. Louis
Minneapolis
Kansas City
Dallas
San Francisco

Total
Applied for

Total
Accepted

$ 38,162,000
l,7l5,98ii,000
36,072,000
1*9,186,000
20,527,000
37,332,000
263,23^,000
21*, 81*2,000
17,065,000
5l,lU5,000
37,202,000
90,913,000

$
28,162,000
1,178,161;, 000
18,072,000
1*9,186,000
20,527,000
37,132,000
21*8,231*, 000
2li,81*2,000
16,71*0,000
50,91*5,000
37,202,000
90,913,000

TOTAL $2,38l,66U,0O0

Cl,800,119,CC0

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 h$k (b) and 1221 (5) of the Internal Revenue Code of
1951* 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. 1*18, Revised, 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.

- 2-

f >

serve Banks and Branches, following which public announcement will be made by t
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
all tenders, in whole or in part, and his action in any such respect shall be

final. Subject to these reservations, noncompetitive tenders for $200,000 or le
without stated price from any one bidder will be accepted in full at the average
price (in three decimals) of accepted competitive bids.

Settlement for accepted

tenders in accordance with the bids must be made or completed at the Federal Reserve Bank on October 16. 1958 , in cash or other immediately available funds
or in a like face amount of Treasury bills maturing

October 16. 1958

Cash

special treatment, as such, under the Internal Revenue Code of 1951*. 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 prin
or interest thereof by any State, or any of the possessions of the United States,

ft££HftX

TREASURY. DEPARTMENT
Washington

A. M.
WL RELEASE/ jmLWmll NEWSPAPERS,
Tuesday. October 7, 1958
•
The Treasury Department, by this public notice, invites tenders for
$1 800 000,000 , or thereabouts, of 91 -day Treasury bills, for cash and

-*—m

~^s

in exchange for Treasury bills maturing
rvrhnhfti* jfi, msfl
* i n t n e amount of
$1 699 154 000 * to be issued on a discount basis under competitive and non-

—w—
competitive bidding as hereinafter provided. The bills of this series will be
dated October 16, 1958 , and will mature January 15, 1959 , when the 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, $100,000, $500,000 and $1,000,000
(maturity value).
Tenders will be received at Federal Reserve Banks and Branches up to the
Daylight Saving
closing hour, two o'clock p.m., Eastern/XXESSSEfl time, Friday, October 10, 1958
Tenders will not be received at the Treasury Department, Washington.

Each tender

must be for an even multiple of $1,000, and in the case of competitive tenders
the price offered must be expressed on the basis of 100, with not more than three
decimals, e. g., 99*92$. 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.
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

RELEASE A.M. NEWSPAPERS,
Tuesday, October 7, 1958.

A-339

The Treasury Department, by this public notice, invites tenders
for $1,800,000,000, or thereabouts, of 91-day Treasury bills, for
cash and in exchange for Treasury bills maturing October 16, 1958,
in the amount of $ 1,699,154,000, to be issued on a discount basis
under competitive and non-competitive bidding as hereinafter
provided. The bills of this series will be dated October 16, 1958,
and will mature January 15, 1959,
when the face amount will be
payable without interest. They will be Issued In bearer form only,
and in denomination of $1,000, .$5,000, $10,000, $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, two o'clock p.m., Eastern Daylight
Saving time, Friday, October 10, 1958.
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.
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 such respect shall be
final. Subject to these reservations, non-competitive tenders for
$200,000 or less without stated price from any one bidder will be
accepted in full at the average price (in three decimals) of accepted

- 2 competitive bids. Settlement for accepted tenders in accordance
with the bids must be made or completed at the Federal Reserve Bank
on October 16, 1958, in cash or other Immediately available funds
or In a like" face amount of Treasury bills maturing October 16, 1958.
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.
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 actuallyreceived 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. 4l8, Revised, 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.

oOo

14
mmvm

KBLEASE,

-2-

A^io
(\

Tuesday, October 7, 19^0«
„o,^-r tenders ir accordance
fhe Treasury ffeparbmeat today sm^uaert tfcs;rtbawrtJtt«»-e^e^UfltoKifc' —
figures with respect to the current cash offtofcla&of $1 fcilMoa ocf 3*£/2 peroe«i
Treasury notes and ffrd/l billion of 2Xi-»dar ape%i»^ »^e»«ry bili»^prioo4 to 58.
yield 3-25 percent, the notes will b® dated Oetofcer'&0^£3S&j ami fall mature
Sbveuiber 15. 193$, The bills will be dated October 8, 19S8, ana iriU nature
May 15, 1953. la addition, |100 millios of the aotea were.ppllotttf:ta # © V W B *
aaent Investment Accounts.
Subeoriptiona and allotments were 4I*16M mmm the t*wtrf& EOS***! Reserve
Districts ant the Treaeiiry ae follows:
Series B>IS;>9 Hotes - 219-gay freaaary Bills
federal Reserve •* $©tal Suib*erlp~
Dietriet « x^r *> tiong t-leceivejjt',

fotal Subeeri^a 4 1 o m allotted^

fotal Pabaorii>*
tioaa Received

Total gubscrtf
tlong Allotti

mi-,'- ~3 :

• He* fork
Foiladelphift
>« Cleveland
- notaond's "*s
• Atlanta;*. ^
Chicago
'0i.-1«tile
Minneapolis
Raaeas C&ty
Bellas "»*
' San I*ranoieoo Shpeeeury
•-- OoT.Inv.Aeets.

m,w&,oo®
127,770,000
127,770,000. 80,113,000
336,633,000
©92,810,00©
38,303,000
.
93j®©8,000
;9$j0G0,0Q0
98,430,000
141,182,000
ss,4sa,ooo
141,182,000
53,409,000
151,407,000
53,409,000
131,417,000
110,357,000
4©,tSS,0©0
110357,000
4©,tas,o©o
4S9,6XS,000
i$7,o?s,ooo
4S9,6XS,000
i$7,o?s,ooo
iga,
401/XJO
70,034,000
iga, 401/XJO
70,034,000
39,111,000
73,591,000
73,591,000
39,111,000
66,@S7,000
U
6 ,14©
,000
116
,14© ,000
66,@S7,000
52,i74,0DO
128,118,000
52,i74,0DO
?10
819,453,000
?00 ff lW,000
«W,OO0
448,000
448,000
1,820,000
100,000,000

WS&L

$2,686,136,000

Beaton'.?

$1,184,006,000

310,SM,000

7i3,asa,oo©
270,503,000
S3O,63$,OG0
231,910,00©
3a3,91t,000
9$i,S3f,ooo
SO9;34a,000
167,790,000
844,073,000
313,394,000
410,407,000
200,000

$3,804,631,000

1^,075,09
760,087,0$
129,572,0*
343/364,00

xm,m,w
ISO,419,001
460,442,0(1
109,387 ,0$
92,964,0$
132,279,00:
149,253,00!
124,306,00;
100,0$

$2,735,393,00;

TREASURY DEPARTMENT
WASHINGTON, D.C.
IMMEDIATE RELEASE,
Tuesday, October 7, 1958.

A-3^0

The Treasury Department today announced the subscription and allotment
figures with respect to the current cash offering of $1 billion of 3-1/2 percent
Treasury notes and $2-l/2 billion of 219-day special Treasury bills priced to
yield 3.25 percent. The notes will be dated October 10, 1958, and will mature
November 15, 1959. The bills will be dated October 8, 1958, and will mature
May 15, 1959. In addition, $100 million of the notes were allotted to Government Investment Accounts.
Subscriptions and allotments were divided among the several Federal Reserve
Districts and the Treasury as follows:
219-Day Treasury Bills

Series B-1959 Notes
Federal Reserve
District

Total Subscriptions Received

Boston
New York
Philadelphia
Cleveland
Richmond
Atlanta
Chicago
St. Louis
Minneapolis
Kansas City
Dallas
San Francisco
Treasury
Gov.Inv.Accts.

TOTAL

127 ,770;,000
892 ,810;,000
93 ,968.,000
141 ,182,,000
131 ,497;,000
110 ,357.,000
469 ,618.,000
158 ,401;,000
75 9f 0 « 7 J L,000
136 ,145 ,000
128 ,116 ,000
219 ,453,,000
1 ,228 j,000
t

- -

$2,686,136,000

Total Subscriptions Allotted
%

50 ,253.,000
326 ,633.,000
38 ,503 ,000
58 ,432.,000
53 ,409.,000
49 ,839 ,000
197 ,075.,000
70,034 ,000
39 ,111.,000
66 ,867.,000
52 ,474.,000
80 ,928 ,000
448 ,000
,000.
,000
100

$1,184,006,000

Total Subscriptions Received

310 ,894;,000
1 ,715.,968;,000
278 ,503,,000
530 ,659.,000
251 ,910,,000
323 ,939.,000
961 ,539 ,000
209 ,346;,000
167 ,799,,000
244 ,873.,000
313 ,594 ,000
495 ,407.,000

200.,000
- -

$5,804,631,000

Total Subscriptions Allotted
$

143 ,075;,000
769 ,087;,000
129 ,572;,000
243 ,964;,000
122,,345;,000
158 ,419;,000
460 ,442;,000
109 ,387.,000
92 ,964.,000
132 ,279.,000
149 ,255.,000
224,506.,000

100.,000
- -

$2,735,395,000

185 U

STATUTORY DEBT LIMITATION
AS OF SEPTEMBER 30» 1958

C
« J

TREASURY DEPARTMENT
Fiscal Service

Washington,

Oct. 9, 1958
w w v

* -^-^

period beginning on February 26,
increased by $5,000,000,000.
, ..
..i L_ jfl_,„.j under
The following table shows the face amount of obligations outstanding and the face amount which can still be issued
this limitation :
$288,000,000,000
Total face amount that may be outstanding at any one time
OutstandingObligations issued under Second Liberty Bond Act, as amended
Interest-bearing :
Treasury bills $22,699,09*.000
Certificates of indebtedness
Treasury notes
BondsTreasury
* Savings (current redemp. value)
Depositary.
Investment series
Special FundsCertificates of indebtedness
Treasury notes.
Treasury bonds
Total interest-bearing

3 8 , 4 8 6 , 5 © 3 »000
20,7*91071,000

0 „ 0 r t ™
$81,934,728,000

85,743.190,250
5 1 f 792,10**,09*+
244,375.500
9.243.769.000

1*7.023• 4 3 8 , 8 4 *

23»265»356,000
15,793.626,000
6.937.500.000

608,109.399

Matured, interest-ceased
Bearing no interest:
United States Savings Stamps
Excess profits tax refund bonds
Special notes of the United States:
Internat'l Monetary Fund series
Total

4*7,996,482,000
27*.95*.6*8 ,844

48,906,139
878,626
626,000,000

675.784.765
276,238,543.008

Guaranteed obligations (not held by Treasury)
Interest-bearing:
117,190,450
Debentures: F.H.A
649.075
Matured, interest-ceased
__
Grand total outstanding ,,.
Balance face amount of obligations issuable under above authority
Reconcilement with Statement of the Public Debt

117.839.525
276,3?6>382>532
11.643.617.467

September 30, 1958
(Date")

(Daily Statement of the United States Treasury

September 30, 1958
.^ff..T.7±„.T.„...^.„l..±?.^....)
(Date)

..
OutstandingTotal gross public debt
Guaranteed obligations not owned by the Treasury.
,
Total gross public debt and guaranteed obligations.
Deduct - other outstanding public debt obligations not subject to debt limitation

A-341

„

276,665.905.960
117.839.525
276,783.745,485
427.362.952
276,356,382,533

STATUTORY DEBT LIMITATION
A S O F SEPTEMBER 30. 1958

"TREASURY D E P A R T M E N T
Flacal Service
Washington, < * * . 9 , 1 9 5 8

Section 21 of Second Liberty Bond Act, as amended, provides that the face amount of obligations Issued under authority
I

A — m.

m. mm. A

. mm. mm. Cm* — ~

m. _- £

« L | i «.— »*/%»*£•

A I */* » J* M * A A A

#> /\ t**l f« /« IftA I A ft S*l

lAtAPAC*-

K«f . H A

I Iff*. i~ mm\ tA

C f A #>A »

9 m\ \P **• m\ 9~.*F A • !/* V» f»t1

er
- the
iporarily

Increased by $5,000,000,000
The following table shows the face amount of obligations outstanding and the face amount which can still be issued under
[his limitation:
$288,000,000,000
Total face amount that may be outstanding at any one time
OutstandingObligations issued under Second Liberty Bond Act, as amended
Interest-bearings
Treasury bills $22,699,094,000
Certificates of indebtedness
Treasury notes
BondsTreasury
* Savings (current redemp. value)
Depositary.
Investment series
Special FundsCertificates of indebtedness
Treasury notes
Treasury bonds
Total interest-bearing
Matured, interest-ceased
Bearing no interest:
United States Savings Stamps
Excess profits tax refund bonds ....
Special notes of the United States:
Internat'l Monetary Fund series
Total

38,486,563.000
20.749.071.000

$81,934,728,000

85,743.190,250
51.792,104,094
244,375,500
9.243.769.000

147,023,438,844

23,265,356,000
15,793.626,000
6.937.500,000

45.996.482,000
274,95*»6*8 ,844
608,109,399

48,906,139
878,626
626,000,000

Guaranteed obligations (not held by Treasury):
Interest-bearing:
117,190,450
Debentures: F.H.A
»
...
649,075
Matured, interest-ceased
Grand total outstanding ,,.
>nce face amount of obligations issuable under above authority
Reconcilement with Statement of the Public Debt

675.784.765
276,238,543,008

117.839.525
276.356.382,533
11.643.617.467

September 30, 1958
"(Date)

(Daily Statement of the United States Treasury,
t\..

••

?.®P^?.S!???.?r...?.9.!....i?.?.?

(Date)

OutstandingTotal gross public debt
Guaruntccd obligations not owned by the Treasury.
Total gross public debt and guaranteed obligations.
Deduct - other outstanding public debt obligations not subject to debt limitation

A-3*l

276,665,905,960
117.839.525
276,783.745.485
427.362.952
276,356,382,533

lit MMgrtliv tto mtmSfeitttgr to yrattto ««!•*» •*»****# tto
(lowmnMsfc «i«o «*«*«» MprntMOttar to toto **»*•** tut ***«*
nf %*» «au«r a» M 4M«e*«ata«Ntftoftt«C » • « * * •»* *«***•
I a§ m*e ei*t n@ «t«u to •!&« to #«»^ « totfe jrtw
wmmtmmmg
of mm pmmmm mmi your tMlfftoM* In ao&vfai ttoa*

Wmm. to m mmy tototim to w

ftoi»U^.P^*^e«* .*»

etotototoncto ift^^. tototolM. ttto to^# toto **^» ** f
tito* mm Wm

* **•*

will mmzmm to to iritli to £ w to ftototoflto

w ton # w . m m&y

wptot to #c»tisito to tol? i*ltoto«ttjr «m

tSM~to»tottotiistomm m w*mm% owe M c m l t l M to * Itot «oaair
wmwm%n

But m t h it toto to 3 » p * to < w * -~ pmr*Am®lm?%# *m*m

lt*s gg-oiteg — it %m totototol tt*t ** tototoa w

fNia^ptotiir©

to tote i « toto we to* tot pitolJig up top wptli toll*
opportunity fox* l?sproving tte debt structure.
Vlttoto a tolns orgattitotito* m wmt rely heavily on life
insurance cosspsmisa aad the other a&vings institution.

You are

alre&ely @€palpp®$ and ficJ&MI to -tto Job ef Nutdlfiigf the a&viags
of the towtoto people, $n§ y w toto* ifith 133 tit* responsibility
for ton miritenanee of the parcfeMtog pc^ex* of the dollar if our
national

toramtot

~ m mil mm private IzKiuatrj ~* to to to

•atoOjr flimneM.
I *top#8rt ttet to to* aanto* to y w n itotototoiy Biimd.
mm tettto to tototoift m mommt euxwney iaay prove to to tto
emxHPtotos tottotto torn*. Mtti iHWtii* and resolution we A S
afefctoao n wdl mAXX mim ttet totftl*.
toflrtlwtoato fagotto!* — it is .not southing »htoli to
•o*t mmmwt wi*M *w£etttto« mm tort of mar my @£ Uftu

It to

w - « i t « « to* to to»HMntooUf*« O u ? ^ H to 'fta* iatat ham
tost to oatttoel it tfttomt rmm&Xm

methods ttot tortvtet

•tort? itotototol itottetito and freedom of «teto*.

20
- 15 *
Usstitottotoi ^to^^to* to %m*wm
*mm®m

mm to© litoto mlAM^y

%Mm emtm to tometmitod m

fitototoi «*t Mffim* ttoto
of ttolrto*B«totomm&immtm*

$xiXi&ibm&<i mmM"$*mmmm**

Itow to* toto toittoton mi to* «totoury'« tott imtototoii
•ftorto <§wtog to* 9tot ftor ©» tto ^pm^to ttot to *tesl# totospt
to m*m. omly stoi?t~toM mmim^Um

im»ini m vmmmmAmm. m to*

•11 Itototo^ wito to* ttmv toUtot toto *rtttotos* mstoiitototo
the tt^mmm® tocmlg toll to«*tom tonto totf tortog tow ptotoi*
tfmm to* mmmmm tolto? to mm mi iN^ttfctat. tot if m

Uto Son*

« U $f mm £toto*toc *to*« aai* Iff? to to* l~r«r toto isstoto of
s ©lling ^r#r #i$ MAlSto n# toto* toi toni* itsming tt*m % to 3?
y«to»tototority,to*totote*leagth of to* %*mm*wf toftottoto
debt would ato to oaly afeout # yeers mm against to* present 5
ys&rs. Tills further sh^tealng of the 4#^% ^ou!4 have stototol?

4ebt expAagiou* 1 particularly w©loos&® yeto t&ouigftta on to
top^ttont p^tolto of y5jpto#t]Bg 0ov©2*ne^tit s^aiarit^toltfiiitoto
tte S^p^-toto tots to .toto*lsto©iist&a&^ctoilttotolbo£Tt*riog
froej to* cc^orciml togto* Within tto fli^twisl ccaasamit? tot
itotototo* of toto objective to well ustofsto^L

It to ^ t o

iwmmm? tost all of m give careful thought to f ia&Usg new sgf*
of rtoltoi^ our gcals. mttotoetosurpossibilities to to
explored ai>a w# believetotofctomom inteswive progress sf jsigt
st^Sy ant comultatias toto@*a the fxtotofy « £ toftoto gro\g>s
to a«d mat of Cfoverss&smt whioh to nan w^tmmmkf can to v«ry
helpful.

21
. .- 1% ~
So®* of tiito saontonis ftoomtog ton to. &®m ttetof^

immmk%m%»^

oofpos&ttosio to ttay toUU* to **** *«» »soy*to* But «toh « * it
rtoto a^tooly w to* lto»to-*to*i iwoototo* fUto •*•«* ftotow
oftorto to lm§mm®$m tottwtoto* towtoto ooatfftttow fto«£i*
to «to to^* to tow a* tototwltoni to too a*o*fiN
of toe fteto*» to «to»t mm mmtm^mm*

mm to ioto to

on* m r ototo oomftrtoo* 1* toly tolitofcr « tewto wtootoitteff m a * * U * oonrtoo if too ftotoolftJi ooitoiiity • It to ttoototof
U t o terms to n U lift

tamn

oteito • p W t o

to^^toito^

out **;p^iag too imyoir to toto oil tot toUttttoo*
atoUtotiy, to* tototovy to ftoeofttoo oisouMtottopoot-to---oitotot iwootoito m its toon®* ^oopt ca too basis of realistic
pviotas toito m i l ^ w ^ a tooolf to to* mmmtt jnngoaitt o£ too
tefootor* ¥«§ .OP* priptoly omttototo of your ftototosey
vototlotofeto to toooo toe* yo* o#r*fo* Of ems»o* ycs» will ptypoue
no oowoo of action «bot is not consistent with toooo ofcllpitians.
Itwoiror# iitito to o«wt Jtogotui wito ywpoto to tto toolJtoiiiiy
of m gtotloolto # w p « o t o iooii# &av *ofc to soon* jo^gtoto otto
i*n$p§*t to ©0401* aove>rr^^nt ftooiiotog* llzl& Am tot too onXy
m&tmpAm

of oiwuitot#*tog»t poltoy.

«bo **»©«* or to&tovo of toto totmitotot offooto itoootoy

. ••

or toiirtolOy oil towing* lastitoticsn® o*i o w w f one of too t H i
of millions of ftodltoo tony *«w# bee a use ®f to® issportance to
toto of a i m i o o « a ^ teM on o otoHto teUto* In oter*» toto
*mm to to to to to a r m it$i#rt «* obtoM too& ot to* tonot o*si .,
not j w t to tlit «ro*o ttot impptm to to to too

» •*.

* If * -,
- mm w&^moi tolatotoiiig mm mmm$m
toototomm

to*

twmwt^m,

mttoiio oftootototootoilw@id^|j^#to'*^^^#

of OOtoto* «lto O t o - o M w i M*t* pto0«** to o^ttoOt ifito too
tools**** MMtopp totoH I mm

Jtottotodto-ttototo. ototo

otottoo ** mm mmmm %wmm0 mmm

i o * ito**to*nm.m,

M IIMto M # i < - t o y # M t t l ^

StoOtoto^ 4S6rVk. » U U M

oftoosort** 1tonto*o* mmfttotoromt of too totol mmm^m
aniontoototogtotointo: too

toto*m§mmmmtfitoltonioto«r.to*toa§*i
are ptovtefao« i«rto******oMtoto-totoi»i «l^

Ho wo^^itotoolo
..Jfc

•-— --*--•*- •*-•*

—•

t„ •„,, ifei.fi«i wi in am

ifelfeds. tfT.i.i ia'ia •»« imariit

Mstt^l

ill. iti*31fiiiftm^f»3L£llt: Ifcliia§$l®i?i H H B 1aZIPlillJB»IWr — "

.fe^dfe

ftoto*to&tootttotto**M to tof to top i m p * Otototo off
taH*M*ito* ototopic

U A 4 4

A W > »

saw H U B M S H

*&m*y

so * .po»&*ito**too.foototofN*. *o«*y

mm sa totoy* tnis ooapotittot to to*toMtoto§ to
fulfill o ^ m$mmmm$MMm

tm mwmmm

monetiz&tlan of

too M>% ®w otototag m
not *tto*otoi into wmm opfttoto.*
m tottor too agr*5^s©ive our efforts, however, it Is ototo
ttot saving tonio tost otopy only part oftoototoof a
calling 'to* increased holdings outside of th© ec&s^rci&l
o?oto»* too "toot to*t to §®mfcyooiltog oootoitiw toto* mm
attractive to otoor Mritoto investors mitaide thetoting*bond

--• ^XA

23
1 fully rooopniso toot too life toramoo otoptolw toto
t r ^ ^ s d o ^ ooatrttatloua to too m^ offoet tortwgh too ptHNsiitoo
of QcmwoMttt oootoittoo. *t too tosodtotoon of tho tor fimtieitsg,
la fast, mjTfi of too ooooto of H f o imwmm®

oo*ptolto mr® in
% m

Ptooammit toUprtlena» St w o mtutol and pvopto « * *

&®

holdings should dtolto* oowMtot during ®&® ptot-tow poitoi wton
Xifo inawaaoo otoptoitto w r o tolptog to fluaneo the
«toPtoion of tomloto itowtvp*

mmmm9

trmmMom

today h®idiogg of

foownaettt aooontto* ^F lift litaunmoo owpototo o*oi»t to loo*
ttoo 7$ of aaaota* to via* of too ftoi ttot toto Itowtrtol
capacity mud housing iio^o aa* passed tto boom phase of postwar
m*A%\\m%m%<m9 and in too- llgto of too iapwovod teto*o*t f&toa mm
*toiltol** toa**t 'too ttot avrtood for mom pewomblo
rathor toon dooyoaoo to §mmmm®%

AmmmB®

ooo*rl*y'tolitopot

Im oomtototop toto towttoi** w aon start off ffn^s th®
foot ttot t^o tortus* lnatltaifctoM on* too itolrtduala wteta ttoy
oorto torn o tywontow otototo"itomtotof to ooopy poootolo
mmm

m furttor totortovottoft to too w t o o of too dollar*

Individuals will pgotoMy to atotog ototo |90 l U U o n to t&o asgraoatt
during the next if months* On too tools of our oxportoBOO during
too i w t 10 yoovo*tootftowo ro*ig* owtolvto to wpootoap ttot
of titto would go into CfcwomMto ooowltltof 1
vp*tottoolly mm
tolals no*,ffli*p r i o n s of ppooorrtiig too vaiuo of too dollar lo
tli© tooo of a tospo dofiolt or* oo owloua ttot n® iadlvtouol —
and. ovon tot o«ptetio*ily* no mmimm totoituttoa — <?to off©rd
to take loo® mmm an aottoo port la tins Treasury's off&rto to
lnorwao loo*~tom invwtor intor^ot to OoooroMiit aoourltloa.

24
ysm$m tivmt at tto |*i billion of imwtoeato in -aoouritioa
and a*rtgag*a, w® find ttot #17'billion of tola total w t

into

ooapawto tttooka and tonda* tootoar |11 billion vent into state
and loon* ®mwrtttm

and -#ta M X U o n into toto amtpafto-

""' mm mmh of it w n t into pf. 9. doMmaant aoourittoa?

0»o

billion dollae* — H # u n i o n in •€ and I a****** bonds* loaa #9
lillks of isojajdatton of otoor aartapa boaaln *m anofcetablo
aooraritto*. to* "froaawy* tosroftoo^ in 0 paviad of 10 jo****
mm to@» aneejaajaful to ^ p t » ^ ^ anly about d p w ^ ^ of the wmmf
flowing dirootly fto* iaaUrtduala into too aaourity norteota*
Naaantotlo* -mm yo* ieoo** tto saviafs laatito&ioaa were
liajaSdatina; siibst-sntial portiona of their Sovermjent holdings in
®r4®r to b*y a w ooapootoo and n»i«ipii aooavitiaa and nort&ja^os.
Storing tto^ taaNpaar piriiid* ttoo liajaddtoio* eaanavtod to $10
allltoau tow, too -toto* of individual aartngn floors** oftoor
ttvnatly ortoiirtotiy-into 0* B. mm$mmm%

aoonritlm ao^lng

too loot €mm&m la a adma* ajanntsitf — apooifiwilf• * tot
ISajatdafc&e* of If billion*
If tto p t o U o deto tod toon daollntog oi^toaitially dssrin*
ttooo ya*aat tola ni#*t not to n oataa® of oonaom.

atonmr* tto

dobt mm not fUllag* toctodi** dobt hold by fevoanjanent
laawtoant fteooonto, ft utafod vltbt* a rototiwly torroir z*ng*

I tow onf&tnoi tor yon jtot ntow tola Adiilmlatration
stands on toano aarttoa*. I » 6 0 t a c » toltetog of nbot- otbar
groopa adoto do — tot j w t about p m and otakt yonr ©o«|toio® can
do.

-m *

to ton toto Mdtotoatton in tte Heat toot Iiiiirtdwla mmfe mmtmm,
laatitofciona toiEotter* iaeiudlaE Sjiawanoo ocsopeaaioo* muzvrnl

fanda^.dnd atoto aM looni fonaion toato* aoootast tor #W billion
of our iodotol dett of mm

WI5 Mttto*.

:papratoi¥o to this* -roooisi is, 1 I M A to tmm to looic <^.it
today to ana* of a ote*Aton§* toto to a atopy of anoooto, otooo *
dooado ago ttooo aa«o immtmm told approedbatoetty $106 ^illioa
of too natioiml doit, ttofti too » I * M @ otooptto* of to* 1 tod 1
tortus* ^nda ptopto* too tmmmm

too

olwrly not boo*

onooatoftt to the y^t**to ^eric4 in emoum&±m tops~toi» ia&oatoto
to told os to toed* £cw;TOmt ooo«rttito# on*** loan to onpand
tooto neartfollM*
At a,fetoo***** to® Fedemi d*M to rtatos * P ^ * as a roomit
oftoill&mmt
te«uUfta.

deficit, to iH»t~*to ttato«?# o little ©o«X-searching
ir t,, T ^ u , , 1. to . a c e ^ ,, } . ^ U l e n l ^ ^ e

dobt a^d to ftoensi^ii OJ^F ototolo p-0rtio.11 ej? too forthcoming
toftoit outline of tto^twfepj, At must roly boprtiy on too longer
w^^sr***

frfjawcv™ ^sp^p' 'WrWKO* a p o

drw*]aw,aip

jnmiiB"WB' «fti wBSww^^aP

ipwii^^

^HNn«Mn'>^^

^ w n P s F a d w ^*issipii»Tw

*g^ii^P*BBiPaaaaa^wHpapaag <

or' --,

©v«r too feet tooaio ooto op tto osititoto oaf too j^blto®§
torta^a of iniirtdmto a vaxi&su for tat^toet to mwwmm mcootmts,
Snowtooo* ptnaton toaia# otoo^tlto to mortgage dnrtng tto past
dooado aggr^tod e^^mtoitoif #168 Ulltoeu

Of toto *m

million, fia? M l l i « mm plm®d to H f o i^aowfjtoo cc^anies and
other sav^iass IwtitotiMa^ inciting pension tonto« tto other
111fciU.i-nmm immtmil airectly la securities to aort^a^s.

26
«? J

too oiao of onr flanwi** wm&m

— toto yoftodlng and aon

towcaMiis — taiioriioorto toa inportonoo of dolus to Xmm
of oar ffeaatoUai ®o pomtola otttoido -tottmmmmM
mm%m>

» tort

ban&lng

It sa not atooaatop to o^lain to tola andifmto ttot

""todgtofmm intoiaiaod m^m^%m

oftoaf*4*t«l dobt U t o the

ooiaaorolnl baling oyatoi immmmm too toiioy aupply* tod ton**/
1?too psrofatotoi

INS»«

or tto p*Uto»

» • » a m * * oupplf *********

ftotor ton* too ppoditotion of *ood* tod aorvtoto* ttora Am upaard
proooisro o* tto prim XmmX and too natoa oftoadollar peaa domt
tatoeavton*ro oajnaUy to*r# ttot aofnioition of too dobt by
tnto aamra, or to ltol&t***to*a abtofc totoor too p*ep3Lo*a tortag*#
do** no* b**a ttot lasmttoepry off tot» too petoXm ftoto* tto
fpejarary to not Jnat to find 'too- a*o€*ae»>y ftoda to* nnttar to
prooure toto fro* tto -atoto aourow*
0y pg^ton to oeja*U*ated by too foot ttot tto aaoaajaea***
tmat ftoda — whoso increasing rs-eervee mad* it pstolblo for
toon to add #fi bili ion to tonir toldtnpe of mmwmmmM

ooourltiea

during too poat 10 y*0» - are currently C u e i n g their bold!***
of deojafwnant oblSpatto** inatoad of adding to toon* Wo are alto
i

facing a continuing caa-t d » i n on too BPOtoory resulting Itea too
rotoeptlo* of atotorto* Parian .F and 0 aartma bonda«
At a ttee -nban o » fii******* roonl^on^to aro no largo* toes®
atfdltin**! difttonltito n#S#i noro tonally toon ttoy. otoowlao
would* W®% tto pt«oblona of iooroaaiag otmarafelp I* «»• nonbantc
aroa ar-s not i^ur^&imt&bla,.
•WW* w w

vw* mr .ww

«*m.*» *mm ^Ww-^Hpp wmMmW*m9m 9

m 8 -

Our tooting* wito your CMetttoo tow *X**r* ^ ^

totranoly

imrttatoUo to wo fooo toot* ocaeeo* piroblato top*to*t%
X ahoald lilco to torn now fro© a eonaidomtion of our row***
and ojoaonAitnra problo** to too tbltd nran of §mmmmmt

f inane®

arith nbiob wo a*** to oonoowpli aaaa&y* too natogoiatot and
dtotoltotion of too ptaVtlo dobt.
to yon mm all m i l s * r n a §rtot doal to involved in dobt
managreseitfc in addition to too oarryiogtorotifj*of a snooto
flaMnlap opototlon wito do* oowidowtion to aqulty aai p m f t *
for too boldoa*-*f *mmiUm.
mm

U t o n-Padaasi dobt aa Itogo a*

la *e*, too laftaanao of dobt eauaitoeeto oporatioaa

IHeMtmtoa into owoyp area of too oto*c*ay,
we mmmfcm titot oeeto»1tfU**-our spNNiti^m in tto atooaphos**
of a fr#o wmmf anurtot aonotimo© giro* rioo to special problems.
WtiiXo fluatuntloaa in •attot paiow and yiolda l e w an laportaat
fanotio* to onr-.p*to*te otttoaprlao oocatony* «e#aslir© cpeculativs
natirtty %*&Mm no oontritotlon to tto broadto* daptb or roalllauoy
of tto mi-.ev., *o aajat all give continued thought to too nay* in
which wo can avoid a recurrence of excesses such aa those which
ooourred loot ounnop*
Mmmm®.. mm? financing will oon&luno to to dono in a too*
e*moy naaltot. too* tbavo toll bo tin®® wtoa Fodornl Rooor^o
monetary rtoti*ito saw **** to ®*m our finanolng Job socaewhat
more difficult, tot It to only ttoousb an independent Federal
paaarvo ttot wo can ^sspoot to achieve the smxiumm »ollto*o on
amatory poliny aa a paforfiil a*Ltl-d*n*tlon*ry imtvunant. fto
Wm&mea Poaoroo and toe fr^aiswy, wito opart totor»lnati©n# aro
wording, in taaraioiiy tonjtrd tto ooaaaon goal of presormtion of tto
Durenasiner Dower of m r

nurrencyw

28
»7 *
In addition* wtooo of *pe**tt** a^tftorftotto** by tto fytoldont*
plus Adattttofcwtito iwooitlom tad ogp»£tis» to »«**toslbotoof
Oongrosa of toto p*rtia* to otoor ®mthiwr%m%%®m ttot ptoaod at
l o w t O M ton® oftoo£c**pM**# rtonltod to tto nroldaooo of
bndgot atatoorltotloJaB totoUag t w o toon #5-l/B billion. Itot
of toto •oatay teoalld toto toto oppat to too ftoo*l yo*r 1999 if
tto fen* tod paaaod*tito*-*ddS*gtortlearto tto pwto*otlto •
dnfteto*
dltt****. tto fT9 Mttlo* e*aaoja*|dtor* flguro for «*£* fiaool
yoar nattolly rapp«ea*to a otollor proportion of our national
patoatolo* toto in i§52# 19S3 or 199%* to do .not *K*»*rwtla*to
tto oftoot of a bmdgot of ttsto alao on our ootmony, nor tto
offoot oftooa^pNiolabto addition to our public dobt which it
.rotpiro** toto ^^iniotmtl^a to raoolirod to do all nitoin its
ponor to oontoiti and radi*** jNantoal opondSag* Wm oon restore .
toto nopoot of ftoaai s-m^wm&i

$m$mm$

only if wo oon enlist

widespread pcsptlar ai^psrt ttot Hill ****** p?#ooui»o m too,.
OoagFOM to mmmiM®

Urn i^ooaary rtotto&a&y

' '' m toe* ttot tto lifo liaaiiw*** co®$®nim of America,; cwpport
no,,too*r mmml

goala* It to itoaanrtni to imom ttot y e w

*o*|ej*to* **** doto aaae* a P t o Job ttoeaapi ttoto woont
o4tatotto**l mmkmm

.to-pfe** too toot* or inflation hmfmm tto

torlcan pooplo*. to hope ttot pvaajpna* « U 1 bo omttotod and
onfergod*
i*;,|*:..yaaiapiartagf. e^*a^:-.tor ***** of n* to too to****** to
roaiito ttot to mm mm to your Eoonotaio foUoy Coaaaittoo fog*
tint to tin* for -your adrtoo and oosai*oi#

* 6 But if onvront tarn roo@ipto voro up-to to* iotol of th* to*
liabilities now sooroing ~':tto paynonta no will raootoo mmt
$mr

mm turntofioltwould b# atpHfioantly a*d*eod.
tfife business m # w l ^

thar* to no ejatotlo* ttot additional

Tratoanp bcmeajtng in tto a*ounta whlott wo mm tmmmm

mm to

supports by too oocaaaaB/ without ondansortiig prioo stability*
Vhottor tola objotoiro mil

in toot to atod*«*d# bottowr, dope*!*

on our romrtvtio* to aatitetol* a atrong fi*o*l poaition

m i ^ w

auo^oas In ooealaatSaej a gaaaa* da*t toai^otoot $m$imm.
Ton will voo*U too proaatoN- nhieli dwolopod loot m^m

for i
i

a atootantial to* o*t mm m aid to w o c w f f * to* throat to o w
proooai flaoal poaition *^d ttoa*fto* to w

©wronoy would hair*

boon aorioto if tto Aebtatotntolon and tto Ooogrooa tod given la
to ttot taneaawo toftoo it booano ototo'ttot mmmXm

rnvmimmmt

totorvontlo* mm not mm&A

Tax rofof*

to revorao too downtom,

and leajmiatoaMt is a eons taut object ire-.. But 1 hop* wo have ioaaaej
ttot wo oanaot afford htoty tod ill-eonsldorod ton roduotion
*e*a**to oneb tint thoro in a teajpo**ry dip in our rata of ooonotda
grottttt*
Wmm too -point of rl«* of a » o « ^ ftoeeft progra* it s*
oEtronoly iaportottt* of ootu*o»- that oipondituroa b© leapt undor
oontroi* m m amttor of rooot€f totol aafttarlaatlem for torero
fodoral spending gttotod by tto Congi>o*a during tto roeont soaelsa
only part of vtooh* of ocaar*** afftoto fiaoal 1959 -~*too*dod
M*tniat«*tlo* toooaata to 1%-1/a billion.

3U
** y

tot wboloaalo priao Uadto tor-to *a*altlo* eoaaaoditioo, w U o h ia
usually oulek to rofteot inflationary pmm&wm9

asenaiaa oloao to

th® Iowa raaofcad last toll*
too -tto** of prtoo® to too roeont p*at is ~reeatoeartag* ooniog
at it mm

aftor a paviod of ootoldorablo pad** stability.

toriiag too the** yoaw 1953~I959» y«* * ! » mmrnll* prtoo* obangoi
w r y llttlap and ttay Hair* adaanaead only *eata»*tolr aiaoo that
ttea. tot daaplto- thaao toots, and toopito- tto toeejN»totoo****te
*T our sup!* petoatotlro rtoo«rao*v *• aaaa* rooogniao ttot too
of now iaftoMooary pmmmmMm

*ro pr**«to. toay ©an and

to dtotaoyod tmimm t*e*r mdoi^etno »

fS*aaeial soundtsoaa,

too adetotottottaa ia proparod to- to** this toano ®mm??*Xy
mm

to a*** an all-out flphfe against inflation mm§

*to at eons©

totwro tot®.
m%y

&~mm$m tootor o*ertrdfrt»tl** to tons* with veajpoot to too

future m l * * of tto dollar ia tto ourrimt widisaproad dioooufogoaoOl'
aa' to too eapootod m&m

of too Pedat*l tofiolt* tor* la a

problo* wfctob wm ton ftoaaaly t*ooo|pia# matt oioariy define?
i-r^V toora to mm toato tor Mmmmmgmmmt.

!o do indeed haw* a

largo budgbt doflolt in proopoot — onror $12 Milton during tola
fiscal year alone, m apitokialag toto toot* howoiror* too
Saportonoo of too las totooa* business ohangoa and evaporation

#oooipt© to ofton feet aight of. too rooolpta onwratly flowing
into tto froaaury worn a part of «aftato** during a roooaalon yoer*
lams*** .**** low — too twkt atoaro waa rototlwoly aaall — and the.
result to a largo doflolt toto year*

1'i
. t •
too trtoftadoua inoroaso in btoin*** pton* tod oMaadpeatot during
th© past &mmM*$ to pornittiag to* one**** roeowry'to aispaiid
without proofing on avaliabla prodaotion rtooarooa*
Naroorara this oapaaalo* to ****** ptoto- to a highly
oeflpotitlto onrtroniaont* with too moult ttot offloionoy to
Snore****** and nany ooata (ana mmmtmm

pyatoa) art being &®l&

agtoroly in ofcook. itoatotod p*ejba**to* oopnoity atooeat* it toy
alaoternnoted* to aiding to tto for*** tolstos for a highly
ooaajaotltlro situation bar* at bono*
Hinao ara too *M*ao*to M e t * , 'and toay a m a oetoidovablo
dtotoaeo awajr toota ao«o of tto Satoatoobatiom w U O h aro ©urrent
la too financial aaurtoto. tooao **rieat totorpratotloa* **y bo
attotakiits* tot too big toot to ttot ttoy *r* feet** toto. It to
significant in toto eowootiom toto tail* whioh wo haro had
latoiy with buainwa Xm4®m

ladioat* that too toUHclng of too

btotoaa* ocajanntltp to oloaoly in lina with too toots. ' y**f
Sjin*tio***py foam mwm bodng *apeto**d. ia woaal* or d**to. on the
mmtmm*

buaiaaaa *en appoar to to acese****** taainly with way® of

aaaotS** otopatltlo* tmaoooofully in m %at*d *all" aaurtot.
too oaatoev too*** to *» liaffetloaairy prioo rtoo — and.
bnainaaa appraaiation of toto — mm H^ortant roaaona why prizm
mm
boon mfetiroly otablo*
«0Mu**r priooo.- imv® a********* vmvy little ainoo loot spring,
and Mtoally dooli**d feat ****** too e&lHkajeaodlty wholooato
ppgo* tote of tto taraau of &gbor *t*tto*lo*» ooaaaadag a o w a # O0O
eaaaaodities* has actually boon anting aotowhat ainoo too peak of
feat Parch.

• 3 •
Ho deflationary spiral developed.
industrial production mm

Xm only four aontoa total

rooovorad ®&m

than oM~h*lf of it*

entire doollao. to* production of nondurable aaiiuftottirod gooda
in August exceeded all previous moovda. Although tto nm^BT of
unmaployod oontiaiftoa to to of groat oostooya* total

mmvmm*

iacono and apondtog baro hardly atoetoBod at all — ladloatiag
a wt?lX«a§alntain@d ooofldenoo to too ooenostlo ©mtiooie.
I mm ouro you will agroo with %m that aaintonanoo of this
confidence is ono of too noot iaportant aleweato* if not too
aost laportaat* in a atotoSaad rocovery. Consequently, too
reeont inoraaao in aonttoomt that inflation oaaaot bo avoided to
of gmm

eoneorn to all of us, feftotionary payohology* ** you

know, too boa* partiooferty atancod in tto atoeic «artat# wtioro it
to apparent ttot many pocplo imwm boa* buying Industrial coaason
atoeMa hoartly as a hodgo c*aiaat a oontinuod prlo* rise.
How Jaatlfiad.s* tol* wldoapmad eoneem about inflatlonf
first of all, lot m
gooa in wmm&m
too mmm mmltlm

rmmbm

ttot inflationary psyohoiogy

Our *adia of mm® ooaaaaiii**Uoaa« together with
ohannolo whloh tmaatot inroator appraisal*

to too mmm% and ooeuritio® wm*imt®$ mmtm ttot a ehango in
@#nti»ont eon aaally got out of lino with too actual ootsrao of
ovonta.
k aobor appraisal of too ortdonoo brtoga to light the toot
that our mmmmmy to® atrong ooaator forces whioh can act mm) t?
powortol totovranto to inflationary prieo advances. Plrat on tot
liat to mm more than ample production oapaoity.

fortoiiatoly* wo oto-eppaaaaah tor oc*a*a* problaa* today to an
atotoptioro: of busings ^topotoroaaato. tola toot to mi

p^mm

iaportaaoo to all of ** = e*e*iaHaa*d with too iniroatasoat tomato*
2apa?*rii*g boalnoto will aoatoin tto H o w of aartaga — • oaaonttol
to your ^ r a t i o n s , and ..to mm.

It will — with aoto togy—

rowamo r*pm dooiiao in *«* roooipto* ttoa ©aiflag to iaportaat
aoajtodltoito to JUapawSag tto ooirof»eat*a ftooam poaltloa.
y

too

tofetiwiy

rapid mooirory of our a*c**w--rme rooo**ion

to in foot .*nah mm omotolatopjly iaportoat da^iotooto that 1
toUom

*e aood to atop-to*-* mmmtm to dotomtan* if wo. ©an,

jisat wtot tootot* toonajib it «too«t«
tootoortoanpoopto torn tatoa aa**r *tope- <**» ***** yaato to
•ta*ea*toto-**d Sepaajto.-tto fitonatol «nd- oeaeaaeto stwotnro and
to aeoiiro .-* wido .dtotadft*atlto-.«r too bonoftto* to hasro writto*
into mm law* a pea*ay*& ro*o*aji*lo* of too- towra*oat«o
itopeatoftttltrto-p*«toto-aaaatoaa* aaployaont, produotion and
purchsa-isg power. ftowtly Oo^a^aaont action ami -tto. built-in
atablliaora to our mmml®

aya.to» war* important factors in

otoonragias tooowory too* tho recent recession, to too aano tine,
tho Administration onoooootoliy roatotod. a abator of proposal* for
vmanitro O o m f m e a t intervention in aroaa already wall aorvod by
private- f inaaoiag ~~ prapoaaia which would haro lmA\ unfortunate
moult* toto on our budget ontloo* and on inflationary proaamoe*
:

1 boHowo it to oloariy orttont mat that tto torooe tanking

tor &n *&rly upturn and sustained activity atoaaaod largely fro*
tto .grtoato tootor of tto eoonony* too roooaaion in too dtntola
good* iadnatrioe did not spread markedly to other*.

m*zm a. mim mmm n* nnmoxAL morion
m TM mWmtcA® um im^^itm9AT ^m
SDCBHATSR MAOM tmm*$ ammm* timmmm
mmm, o&mm xo* i^ef ttQd „g»*# CdPO,...;.^
mBAsoiry wmmoim ms SCOKCMXC mmm
I am doiightod to to h a m today with reproaoatatiwto of
mi indtotry which is tto ooatodiaa of * o m than #100 billion
of aarlnga of too American pooplo* to**roaponaibllitloe to
too lit aliSion Aa&rtooaa who own lit* insurance poUoloo a m
greet,

i appmototo turn eaapootoeattf' to dtoone* with y«m mm*

aspect of too*# rtapoaaibllitto* which wo in tho Treasury atom
with yon — too preservation of tto toloo of tho dollar.
too fmaatoy# to yon tenon* baa too**** to tor tho largest
borrower Am tto investment market. In addition to too $ff billion
toraowar'of regular fmaaufy bill® #mf«y $ nontoa? too froaanry
toto fiaoal ymmr enaat handlo ataaat $5f billion of m t n r l a * toaoaa,
Ptotiior aarfcot flaaaototg growing out of hndgot deficit* for fiscal
1959 and, presumably, ftooal i960, will paah toto total np even
toHftbor,

lador these oimonatonooa* tto froe#wry*a operations two of
^xceptlors&l Snportanoo in too economy.

The otoiooo wo aaato

influence your own inrootneat dootolona •*** ana through too* a
large proportion of onr population,

in torn, yoar aotloltlea

mM too** of otoor savings institutions hotp to oattoliah too
llnite within w M o b tho f m a a w y mm% opomto,

fogothor, wo h a m

a tremendous etako in protesting too value of tto poopl*«a saving*

IK
y •._•

TREASURY DEPARTMENT
Washington
FOR RELEASE ON DELIVERY

REMARKS BY UNDER SECRETARY OP THE TREASURY
FOR MONETARY AFFAIRS JULIAN B. BAIRD
BEFORE THE FINANCIAL SECTION OF THE AMERICAN
LIFE CONVENTION, AT THE EDGEWATER BEACH
HOTEL, CHICAGO, ILLINOIS, FRIDAY, OCTOBER 10,
1958, 2:00 P'.M. (CDT)
TREASURY FINANCING AND ECONOMIC GROWTH
I am delighted to be here today with respresentatives of
an industry which is the custodian of more than $100 billion
of savings of the American people. Your responsibilities to
the 110 million Americans who own life insurance policies are
great. I appreciate this opportunity to discuss with you one
aspect of these responsibilities which we in the Treasury share
with you — the preservation of the value of the dollar.
The Treasury, as you know, has become by far the largest
borrower in the investment market. In addition to the
$23 billion turnover of regular Treasury bills every 3 months, the
Treasury this fiscal year must handle almost $52 billion of
maturing issues. Further market financing growing out of budget
deficits for fiscal 1959 and, presumably, fiscal i960, will push
this total up even further.
Under these circumstances, the Treasury's operations are of
exceptional importance in the economy. The choices we make
influence your own investment decisions — and through them a
large proportion of our population. In turn, your activities
and those of other savings institutions help to establish the
limits within which the Treasury must operate. Together, we have
a tremendous stake in protecting the value of the people's savings.
Fortunately, we can approach our common problems today in an
atmosphere of business improvement. This fact is of primary
importance to all of us concerned with the investment markets.
Improving business will sustain the flow of savings — essential
to your operations, and to ours. It will — with some lag —
reverse the decline in tax receipts, thus making an important
contribution to improving the Government's fiscal position.
A-3^2

- 2-

The relatively rapid recovery of our economy from recession
is in fact such an overwhelmingly important development that I
believe we need to stop for a moment to determine, if we can,
just what,factors brought it about.
The American people have taken many steps over the years to
strengthen and improve the financial and economic structure and
to assure a wide distribution of its benefits. We have written
into our laws a general recognition of the Government's
responsibility to promote maximum employment, production and
purchasing power. Timely Government action and the build-in
stabilizers in our economic system were important factors in
encouraging recovery from the recent recession. At the same
time, the Administration successfully resisted a number of
proposals for massive Government intervention in areas already
well served by private financing — proposals which would have
had unfortunate results both on our budget outlook and on
inflationary pressures.
I believe it is clearly evident now that the forces making
for an early upturn and sustained activity stemmed largely from
the private sector of the economy. The recession in the durable
goods industries did not spread markedly to others. No
deflationary spiral developed. In only four months total
industrial production has recovered more than one-half of its
entire decline. The production of nondurable manufactured
goods in August exceeded all previous records. Although the
number of unemployed continues to be of great concern, total
consumer income and spending have hardly slackened at all —
indicating a we11-maintained confidence in the economic outlook.
I am sure you will agree with me that maintenance of this
confidence is one of the most important elements, if not the
most important, in a sustained recovery. Consequently, the
recent increase in sentiment that inflation cannot be avoided
is of grave concern to all of us. Inflationary psychology, as
you know, has been particularly marked in the stock market,
where it is apparent that many people have been buying industrial
common stocks heavily as a hedge against a continued price rise.
How justified is this widespread concern about inflation?
First of all, let us remember that inflationary psychology
goes in waves. Our media of mass communication, together with
the many sensitive channels which transmit investor appraisals
to the money and securities markets, mean that a change in
sentiment can easily get out of line with the actual course of
events.
A sober appraisal of the evidence brings to light the fact
that our economy has strong counter forces which can act as

powerful deterrents to inflationary price advances. First on
the list is our more than ample production capacity. The
tremendous increase in business plant and equipment during
the past decade is permitting the current recovery to expand
without pressing on available production resources.
Moreover, this expansion is taking place in a highly
competitive environment, with the result that efficiency is
increasing and many costs (and therefore prices) are being held
severely in check. Increased productive capacity abroad, it may
also be noted, is adding to the forces making for a highly
competitive situation here at home.
These are the economic facts, and they are a considerable
distance away from some of the interpretations which are current
in the financial markets. These markets interpretations may be
mistaken, but the big fact is that they are being made. It is
significant in this connection that talks which we have had
lately with business leaders indicate that the thinking of the
business community is closely in line with the facts. Few
inflationary fears are being expressed in words or deeds. On
the contrary, business men appear to be concerned mainly with
ways of meeting competition successfully in a "hard sell" market.
The counter forces to an inflationary price rise — and
business appreciation of them — are important reasons why
prices have been relatively stable.
Consumer prices have advanced very little since last spring,
and actually declined last month. The all-commodity wholesale
price index of the Bureau of Labor Statistics, covering some
2,000 commodities, has actually been sagging somewhat since the
peak of last March. The wholesale price index for 22 sensitive
commodities, which is usually quick to reflect inflationary
pressures, remains close to the lows reached last fall.
The trend of prices in the recent past is reassuring, coming
as it does after a period of considerable price stability.
During the three years 1953-1955, you will recall, prices changed
very little, and they have advanced only moderately since that
time. Yet despite these facts, and despite the tempering effects
of our ample productive resources, we must recognize that the
seeds of new inflationary pressures are present. They can and
must be destroyed before they undermine our financial soundness.
The Administration is prepared to meet this issue squarely
and to make an all-out fight against inflation now, not at some
future date.
A major factor contributing to fears with respect to the
future value of the dollar is the current widespread discouragement
problem
as to the
which
expected
we can
size
frankly
of the
recognize
Federal deficit.
and clearly
Here
define.
is a

- 4 ^

^?Q
y

There is no basis for discouragement. We do indeed have a
large budget deficit in prospect -- over $12 billion during this
fiscal year alone. In appraising this fact, however, the
importance of the lag betweenTusiness changes and corporation tax
receipts is often lost sight of. The receipts currently flowing
into the Treasury were a part of earnings during a recession year.
Earnings were low — the tax share was relatively small — and the
result is -a large deficit this year. But if current tax
receipts were up to the level of the tax liabilities now
accruing — the payments we will receive next year — the
deficit would be significantly reduced.
With business recovering, there is no question that
additional Treasury borrowing in the amounts which we now foresee
can be supported by the economy without endangering price stability.
Whether this objective will in fact be achieved, however, depends
on our resolution to maintain a strong fiscal position and on
our success in conducting a sound debt management program.
You will recall the pressure which developed last spring for
a substantial tax cut as an aid to recovery. The threat to our
present fiscal position and therefore to our currency would have
been serious if the Administration and the Congresss had given in
to that pressure before it became clear that massive Government
intervention was not needed to reverse the downturn. Tax reform
and improvement is a constant objective. But I hope we have
learned that we cannot afford hasty and ill-considered tax
reduction measures each time there is a temporary dip in our rate
of economic growth.
From the point of view of a sound fiscal program it is
extremely important, of course, that expenditures be kept under
control. As a matter of record, total authorizations for future
Federal spending granted by the Congress during the recent
session — only part of which, of course, affects fiscal 1959 —
exceeded Administration requests by $4-1/2 billion. In
addition, vetoes of spending authorizations by the President,
plus Administration opposition and opposition by some members of
Congress of both parties to other authorizations that passed at
least one house of the Congress, resulted in the avoidance of
budget authorizations totaling more than $5-1/2 billion. Part
of this money would have been spent in the fiscal year 1959 if
the laws had passed, thus adding further to the prospective
deficit.
Although the $79 billion expenditure figure for this fiscal
year actually represents a smaller proportion of our national
production than in 1952, 1953 or 195^, we do not underestimate
the effect of a budget of this size on our economy, nor the
effect of the appreciable addition to our public debt which it
widespread
power
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requires.
aspect
to contain
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This
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spending.
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We know that the life insurance companies of America support
us in our fiscal goals. It is reassuring to know that your
companies have done such a fine job through their recent
educational campaign to place the facts of inflation before the
American people. We hope that program will be continued and
enlarged.
It is reassuring, also, for those of us in the Treasury to
realize that we can turn to your Economic Policy Committee from
time to time for your advice and counsel. Our meetings with
your Committee have always been extremely worthwhile as we
face thse common problems together.
I should like to turn now from a consideration of our revenue
and expenditure problems to the third area of Government finance
with which we must be concerned; namely, the management and
distribution of the public debt.
As you are all well aware, a great deal is involved in debt
management in addition to the carrying through of a smooth
financing operation with due consideration to equity and profit
for the holders of securities. With a Federal debt as large as
ours is now, the influence of debt management operations
penetrates into every area of the economy.
We recognize that conducting our operations in the atmosphere
of a free money market sometimes gives rise to special problems.
While fluctuations in market prices and yields serve as important
function in our private enterprise economy, excessive speculative
activity makes no contribution to the breadth, depth or resiliency
of the market. We must all give continued thought to the ways in
which we can avoid a recurrence of excesses such as those which
occurred last summer.
However, our financing will continue to be done in a free
money market. Thus there will be times when Federal Reserve
monetary restraint may seem to make our financing job somewhat
more difficult, but it is only through an independent Federal
Reserve that we can expect to achieve the maximum reliance on
monetary policy as a powerful anti-inflationary instrument. The
Federal Reserve and the Treasury, with equal determination, are
working in harmony toward the common goal of preservation of the
purchasing power of our currency.
The size of our financing program — both refunding and new
borrowing — underscores the importance of doing as large a part
of our financing as possible outside the commercial banking
system. It is not necessary to explain to this audience that
lodging an increased proportion of the Federal debt with the
commercial banking system increases the money supply, and hence

40
- 6the purchasing power of the public. When money supply increases
faster than the production of goods and services, there is upward
pressure on the price level and the value of the dollar goes down
further. You are equally aware that acquisition of the debt by
true savers, or by institutions which gather the people's savings,
does not have that inflationary effect. The problem facing the
Treasury is not just to find the necessary funds but rather to
procure them from the right sources.
Our problem is complicated by the fact that the Government
trust funds — whose increasing reserves made it possible for
them to add $21 billion to their holdings of Government securities
during the past 10 years — are currently reducing their holdings
of Government obligations instead of adding to them. We are also
facing a continuing cash drain on the Treasury resulting from the
redemption of maturing Series F and G savings bonds.
At a time when our financing requirements are so large, these
additional difficulties weigh more heavily than they otherwise
would. But the problems of increasing ownership in the nonbank
area are not insurmountable. We can take satisfaction in the
fact that individuals and savings institutions together, including
insurance companies, mutual savings banks, savings and loan
associations, corporate pension funds, and state and local pension
funds, account for $97 billion of our Federal debt of over
$275 billion.
Impressive as this record is, I think we have to look on it
today as more of a challenge than as a story of success, since a
decade ago these same investors held approximately $106 billion
of the national debt. With the notable exception of the E and H
savings bonds program, the Treasury has clearly not been successful
in the post-war period in encouraging long-term investors to
hold on to their Government securities, much less to expand their
portfolios.
At a time when the Federal debt is rising again as a result
of the largest deficit in post-war history, a little soul-searching
is called for. If the Treasury is to succeed in lengthening the
debt and in financing any sizable portion of the forthcoming
deficit outside of the banks, it must rely heavily on the longer
term investors. That includes the life insurance companies.
A sober analysis of the flow of savings in the aggregate
over the last decade sets up the outlines of the problem.
Savings of individuals available for investment in savings accounts,
insurance, pension funds, securities or mortgages during the past
decade aggregated approximately $168 billion. Of this $168
billion $127 billion was placed in life insurance companies and
other savings institutions, including pension funds. The other
$4l billion was invested directly in securities or mortgages.

T" J.

- 7Looking first at the $4l billion of investments in securities
and mortgages, we find that $17 billion of this total went into
corporate stocks and bonds. Another $11 billion went into state
and local securities and $12 billion went into mortgages.
How much of it went into U. S, Government securities? One
billion dollars — $10 billion in E and H savings bonds, less
$9 billion of liquidation of other savings bonds and marketable
securities. The Treasury, therefore, in a period of 10 years,
has been successful in capturing only about 2 percent of the
money flowing directly from individuals into the security markets.
Meanwhile, as you know, the savings institutions were
liquidating substantial portions of their Government holdings
in order to buy new corporate and municipal securities and
mortgages. During the ten-year period, this liquidation amounted
to $10 billion. Thus, the share of individual savings flowing
either directly or indirectly into U. S. Government securities
during the last decade is a minus quantity — specifically, a
net liquidation of $9 billion.
If the public debt had been declining substantially during
these years, this might not be a cause of concern. However,
the debt was not falling. Excluding debt held by Government
investment accounts, it stayed within a relatively narrow
range during the decade.
I have outlined for you just where this Administration
stands on these matters. I am not now talking of what other
groups might do — but just about you and what your companies
can do.
I fully recognize that the life insurance companies made
tremendous contributions to the war effort through the purchase
of Government securities. At the termination of the war financing,
in fact, 47$ of the assets of life insurance companies were In
Government obligations. It was natural and proper that these
holdings should decline somewhat during the post-war period when
life insurance companies were helping to finance the tremendous
expansion of American industry. However, today holdings of
Government securities by life insurance companies amount to
less than 7$ of assets. In view of the fact that both industrial
capacity and housing have now passed the boom phase of post-war
expansion, and in the light of the improved interest rates now
available, hasn't the time arrived for some reasonable increase
rather than decrease in Government security holdings?

- 8-

4°
r s_

In considering this question, we can start off from the
fact that the savings institutions and the individuals whom they
serve have.a tremendous stake in preventing by every possible
means a further deterioration in the value of the dollar.
Individuals will probably be saving about $20 billion in the
aggregate during the next 12 months. On the basis of our
experience during the last 10 years, should we resign ourselves
to expecting that practically none of this would go into Government
securities? I think not. The problems of preserving the value
of the dollar in the face of a large deficit are so serious that
no individual — and even more emphatically, no savings
institution — can afford to take less than an active part
in the Treasury's efforts to increase long-term investor interest
in Government securities.
The problem of maintaining and enlarging the proportion of
the debt held outside of the commercial banking system starts,
of course, with our savings bonds program. In contrast with
the declining holdings which I have just noted in certain other
sectors of the nonbank market, Series E and H bonds are now at
an all-time high of over $42 billion. Moreover, $16-1/2 billion
of the Series E bonds, or about 40 per cent of the total outstanding,
represents matured issues which are being held into the extension
period.
Last spring we successfully resisted considerable pressure
to slow down the savings bonds program during the recession. We
had confidence in the importance of E and H bonds over the longer
run. Thus we are starting our redoubled efforts this fall with
a strong base.
We recognize that a more aggressive savings bonds program
means increased competition between the Treasury and the Nation's
financial institutions as we try to tap larger amounts of
individuals' savings. In a period when the Treasury's money
requirements are so heavy, this competition is unavoidable; we
cannot fulfill our responsibilities for avoiding monetization
of the debt by standing on the sidelines and merely accepting
savings not attracted into other outlets.
No matter how aggressive our efforts, however, it is clear
that savings bonds can carry only part of the load of a program
calling for increased holdings outside of the commercial banking
system. The rest must be done by selling securities which are
attractive to other nonbank investors outside the savings bond
area. Some of this nonbank financing can be done through
nonfinancial corporations as they build up their tax reserves.

43
- 9But much of it rests squarely on the longer-term investors.
This means further efforts at lengthening maturities whenever
conditions permit.
As you know, we have no underwriters in the accepted meaning
of the phrase. We don't pay commissions, as is done in Canada
and many other countries. We rely entirely on broad underwriting
as a public service by the financial community. It is something
like trying to sell life insurance by making a public announcement
and expecting the buyer to take all the initiative.
Manifestly, the Treasury in peacetime should not expect
to attract investment in its issues except on the basis of
realistic pricing which will commend itself to the sound
judgment of the investor. You are properly conscious of your
fiduciary relationship to those whom you serve. Of course,
you will pursue no course of action that is not consistent
with those obligations.
However, what is sound judgment with respect to the
desirability of a particular corporate issue may not be sound
judgment with respect to major Government financing. Yield
is not the only criterion of sound investment policy.
The success or failure of debt management affects directly
or indirectly all savings institutions and every one of the tens
of millions of families they serve because of the importance
to them of a sound economy based on a stable dollar. In short,
this seems to me to be an area where we should look at the
forest and not just at the trees that happen to be in the
foreground. Institutional response to Treasury financing
must reflect their concern over the basic validity of their
long-terra contracts. This could be characterized as enlightened
self-interest.
There has been criticism of the Treasury's debt extension
efforts during the past year on the grounds that we should
attempt to sell only short-term securities during a recession.
We are all familiar with the theory behind this criticism,
which is that the Treasury should sell long-term bonds only
during boom periods when the monetary policy is one of restraint.
But if we had done all of our financing since June 1957 In the
1-year area instead of selling over $2o billion of notes and
bonds running from 4 to 32 years to maturity, the average length
of the Treasury marketable debt would now be only about 4 years
as against the present 5 years. This further shortening of the
debt would have seriously increased the problems which we face
as we enter a period of debt expansion. I particularly welcome

your thoughts on the important problem of expanding Government
security holdings in the longer-term area as we seek to minimize
additional borrowing from the commercial banks. Within the
financial .community the importance of this objective is well
understood. It is urgent, however, that all of us give careful
thought to finding new ways of realizing our goals. There are
many possibilities to be explored and we believe that the more
intensive program of joint study and consultation between the
Treasury and various groups in and out of Government which is
now underway can be very helpful.
There is no easy solution to our financing problems.
The circumstances which determine them have been with us for
a long time, and they will continue to be with us for as far
ahead as we can see. We fully expect to continue to rely
principally on time-tested methods as we market our securities
in a free money market. But with a debt as large as ours —
particularly when it's growing — it is essential that we
broaden our perspective to make sure that we are not passing
up any worthwhile opportunities for improving the debt structure.
Without a sales organization, we must rely heavily on
life insurance companies and the other savings institutions.
You are already equipped and skilled in the job of handling the
savings of the American people, and you share with us the
responsibility for the maintenance of the purchasing power
of the dollar if our national Government — as well as private
industry — is to be soundly financed.
I suspect that in the months or years immediately ahead,
the battle to maintain a sound currency may prove to be the
over-riding domestic issue. With courage and resolution we
as a Nation can and will win that battle.
Inflation is not inevitable — it is not something which
we must accept with resignation as part of our way of life.
It is man-made and can be man-controlled. Our job is to find
out how best to control it without resorting to methods that
restrict unduly individual initiative and freedom of choice.
In accepting the responsibility to promote maximum activity, the
Government also accepts responsibility to help maintain the value
of the dollar as an essential ingredient of a sound and growing
economy.
I am sure that we shall be able to count on both your
understanding of our problems and your assistance in solving
them.
0O0

A^ /i

BiOiSE A. n. rarsmpfis,
Satimi&y, October 11, X9$$*

The Treasury Separtaant annoanaad loot otoalag that th® iaadara for $.,800,000,000,
or thereabouts, of yi-day taoaaaiy Mil® to be dated October 16, 1958, and to mature
January 1$, 19S9, ahich were effored on October 7, wara opened mt th® Federal Beserve
Bank® on October 10,
Th® data&a of this issue are m foliowei
total applied for - 13,086,1*38,000
fetal aecefited
- 1,801,066,000 (iaaioOea 1258,885,000 entered on a
aoxKMaapatitiva basis and momptod in
fall at too average price shown bel©sr)
tang® of accepted competitive bioat (Excepting four tendere totaling H, 728,00a)
High

- oy.ao^TlSoaiaalant-rata of discount epprex. 2,900$ per anmsH
- 99.2$?"'
* ;
«
«
»
«
2,9300; »
«

Average

- 99.260

2.927$ •

(48 pereeat of the m o u n t bid for at -fee low price was accepted)
Federal KeeefT©
District
—iniuunimhi.—11miu

total
Applied for

Total
Aeeepted

04,57**000
2,30O,8Oi,OOO
Wi,967fOO©
80,31*2,000
16,253,000
31,930,000
21*6,037,000
28,011*,000
18,91*7,000
$1,397,000
22,651,000
Hi*,313s000

1
31,1*33,000
1,1*09,889,000
17,182,000
68,162,000
12,950,000
27,550,000
107,973,000
20,9ll*,OOQ
16,21*3,000
2ii,llj6,000
16,551,000
1*8,073,000

*3aO86,ii38,00O

11,801,066,000

'*»

Boston
lew Tork
Philadelphia
Cleveland
IticlSiteisd
Atlanta
0fciestgo
St. £0*3 ia
Minneapolis
ganeee City
Balla©
San Fremiseo

font

3.17 3.

i'^LC^SE A. M. NEWSPAPERS,
Saturday, October 11, 1958»
The Treasury Department announced last evening that the tenders for $1,800,000,000,
or thereabouts, of 91-day Treasury bills to be dated October 16, 1953, and to mature
January 15, 1959, which were offered on October 7, were opened at the Federal Reserve
Banks on October 10•
The details of this issue are as followst
Total applied for - $3,086,1*38,000
Total accepted
- 1,801,066,000 (includes $258,885,000 entered on a
noncompetitive basis and accepted in
full at the average price shown below)
Range of accepted competitive bidsj (Excepting four tenders totaling $1,728,000)
High - 99.267 Equivalent rate of discount approx. 2.900$ per annum
Low
- 99.257
«
" »
"
«
Average - 99,260

" " "

2,921%

2.939$

w M

(1*8 percent of the amount bid for at the low price was accepted)
Federal Reserve
District

Total
Applied for

Total
Accepted

Boston
New York
Philadelphia
Cleveland
Richmond
Atlanta
Chicago
St, Louis
Minneapolis
Kansas City
Dallas
San Francisco

$ 31,1*33,000
1,1*09,889,000
17,182,000
68,162,000
12,950,000
27,550,000
107,973,000
20,9ll*,000
16,21*3,000
21*, 11*6,000
16,551,000
1*8,073,000

TOTAL

1*1*,579,000
2,380,808,000
l4l*,967,0OO
80,31*2,000
16,253,000
31,930,000
21*6,037,000
28,Oll*,000
18,91*7,000
57,397,000
22,851,000
111*, 313,000

$3,086,1*38,000

$1,801,066,000

-nwith many sectors of the financial community, including a Committee on
Government Securities and the Public Debt of your National Association
of Mutual Savings Banks. Several members of your own group have served
well on this Committee, providing leadership and direction in its work.
We sincerely appreciate the time, thought, and effort expended in our
behalf, and the sound advice and wise counsel that we receive as a result
of it. „lhe Secretary recently has urged such groups in and out of Government to put special emphasis on a program of joint study and consultation
on all phases of debt management.
Within the financial community it is well understood that there is no
easy solution to our de£t management problems. The broad circumstances
sJUjifi ty^uy fix *Jy PM**
which (&^^^^Ja^om)have
been with us for a long time. We fully expect
to continue to market our securities in a free money market and without
resort to radical departures in technique. But with a debt as large as
ours — particularly when it is growing «— it is advisable, I might even
say essential, that we broaden our perspective.
You are already well equipped and eminently skilled in the job of
handling the savings of the American peoplef*and you share with us the
responsibility for the maintenance of the purchasing power of the dollar.
I am sure that you share also our belief that if debt management is to
make its maximum contribution to sound economic growth and stability, our
national Government as well as private industry must be soundly financed.
I am confident not only of your full understanding of our problem
but also of the help that you will give us in resolving it.

-H-rc-H-******-*

- 10 iM.il.uide "of' the basks*
Manifeatly, the Treasury in peactime should not expect to attract investment in its issues except on the basis of realistic pricing which will
commend itself to the sound judgment of the investor. You are properly
conscious of your fiduciary relationship to those whom you serve. Of course,
you will pursue no course of action that is not consistent with thoseobligations.
However, what is sound judgment with respect to the desirability of a
particular corporate issue may not be sound judgment with respect to major

not those who urge that the hard-headed view is the one which

is limited to short—term considerations.
So we come out at this inescapable point: The Treasury must rely
to a larger extent on the institutional market if it is to achieve a
better debt structure and to finance a sizable portion of the forthcoming
deficits outside of the banks.

do
'

- 9 securities. Individuals increased their holdings ofjSeries E and H savings
bonds by over $6 billion and their holdings of marketable U. S. obligations
by $2-1/2 billion during the period.

On the other hand, there was a $7

billion liquidation of other savings bonds held by individuals (including,
of course, large amounts of the maturing Series F and Gy). The Treasury
therefore, in a period of 5 years, has been successful in capturing only
/.about 7'|fap<»eMwof the money flowing directly from individuals into the
security markets.
^KmU. of the $84 billion of individuals' savings which flowed iito savings
institutions during this 5-year period, as you know, went into new corporate
and municipal securities and mortgages. In addition, as I have already noted,
the savings institutions as a group liquidated about $2 billion of their
Government holdings —

more than cancelling out the $1-1/2 billion increase

in Government security ownership on the part of individuals. Thus, the share
of individual savings flowing either directly or indirectly into U. S. Government securities during the past 5 years comes outiat less than zero.

only limited success in attracting individuals* savings directly and
even less success with respect to the funds which savings institutions
have gathered. Nevertheless, sound financing of the Government's
needs is of vital import to all of us. You and every family served by
your institutions have a tremendous stake in keeping our currency stable.
The realists, it seems to me, are those who recognize this compelling
fact -

not those who urge that the hard-headed view is the one which

is limited to short-term considerations.
So we come out at this inescapable point:

The Treasury must rely

to a larger extent on the institutional market if it is to achieve

better debt structure and to finance a sizable portion of the forthcoming
deficits outside of the banks.

- 8 -

in the holdings of savings and loan associations and the $2 billion increase

in pension accounts. Even taking account of the slower rates of growth being
experienced by the mutuals and the life insurance companies, this presents
irfi

I y

a(rath|y aorryypicture from a Treasury standpoint.
Moreover, when we look at Government holdings as a percentage of assets,
the prospect is no brighter — less so, in fact. Mutual savings banks had
well over a third — actually, almost two-fifths — of their assets invested

in Governments in December 1952; five years later the percentage had decline

to not much over one-fifth. Life insurance companies were down from 14 perce
to 7 percent — just about matching the current position of the savings and
loan group, which has 7 percent of assets invested in Government securities

now as compared with 8 percent in 1952. Likewise, the corporate pension fund

ratio between Governments aid total assets dropped from 26 percent to 13 per
in the five years, and the ratio for state and local pension funds slipped
almos^as^badly, from 54 percent to 38 percent.
An analysis of the flow of savings in the aggregate during recent years
revefals the outlines of the problem even more clearly.
Individual savings available for investment during the 5 years 1952-1957

amounted to approximately $112 billion. Of this $112 billion, $84 billion wa
placed in savings institutions and pension funds. The other $28 billion was
invested directly in securities and mortgages.
Looking first at the $28 billion invested by individuals directly, we
find that $11 billion went into corporate stocks and bonds, $8 billion went

into mortgages, and $7-1/2 billion went into state and local government obli
tions. The remaining $1-1/2 billion went into United States Government

CI
*y JL

- 7 The necessity for financing the deficit is, of course, the largest
single problem with which we must contend in our efforts to lengthen the
debt. Aside from that, however, a major obstacle to furtheijprogress at

the present time is the fact that the Government trust fiinds are current

reducing their holdings of Government obligations instead of adding to th
Increasing reserves made it possible for these funds to increase their
holdings of Government securities during the past 5 years by $9 billion.
This year, however, benefits and other payments are exceeding receipts,
with the result that a major outlet for Governments in the nonbank area
is closed off, at least for the present.
If our total debt were going down instead of up, a temporary diffi

-cssbfey of this nature would b6 of miner-significance. But as it is, the
trust fund situation increases the urgency of finding new outlets in the
long-term area, outside of savings bonds.
The market here, as you know, is largely an institutional one, and

I should like to take a few moment siat this point to review what has bee
happening in that market in recent years.
Looking at the four main groups of savings institutions — mutual savings

banks, life insurance companies, savings and loan associations, and pensi

funds (both corporate and state and local) — we find that these instituti

together held $27-1/2 billion of Government securities at the end of Dece

1952. Five years later, the dollar total had shrunk to about $25-1/2 bill

a net liquidation of $2 billion, or nomofrhing 1lftr $400 million a year.

Mutuals had gone down by almost $2 billion and life insurance companies b

about $3-1/2 billion — more than cancelling out the $1-1/2 billion increa

CO
f

*y i_

- 6 over $26 billion of notes and bonds running from 4 to 32 years to maturit
(and not without considerable criticism from many quarters) — the fact

f
remains that the average length of the debt as of today is/4 years and
/

-H month^, as compared with 5 years and 3 months at the end of 1952.
Thus it is apparent that a slackening of our efforts to float intermediate and long-term issues during recessions would lead to periodic

massive movements of debt into the short-term area. These wouldfneed to b

followed later by similar movements out, just at the time when debt lengt

ing would be most difficult, if not impossible. The disturbing effects on
the market of such large alterations in the debt structure must clearly

modify the possilSe theoretical conclusion that the Treasury should follo

a strictly contra-cyclical debt management policy. Instead, it seemaj clo

indieeifeed that the Treasury should tend toward the issuance of longer r

than shorter maturities in all phases of the business cycle, just because
the "passage of time*1 problem.
In addition to stretching out the debt, the Treasury has been working
toward its objectives in another direction during the past year — the

grouping of its maturities, except for seasonal borrowing, in the 4 month

of February, May, August and November. This not only reduces the number o

times we are in the market but it also eliminates the pressure of Treasur
financing during important tax months, thus adding significantly to the

effectiveness with which the Federal Reserve can influence credit. By the
end of this calendar year, assuming our remaining financing also matures
these quarterly dates, ^^emsfo^^^mfot our marketable debt due in the
/I
A
next 10 years will fall due in those four months.

CQ
y y

- 5and by refpaaiag and improving our financing techniques. Our third broad
objective is to conduct our operations in such a way as to avoid interference with Federal Reserve monetary policy. As you will recognize,
these three objectives are closely linked; success in one is a necessary
ingredient of success in each of the others.
How can we best accomplish these objectives? Most of you, I am sure,
are familiar with the theory of contra-cyclical debt management. Very
briefly, the theory holds that during a boom the Treasury should seek to
issue long-term obligations in order to assist in reducing the liquidity
it (A ty&*^tj

of the economy. In this way its actions will be in harmony with the efforts
of the monetary authorities to decrease the availability of credit at a time
when resources are already fully utilized. During a recession, on the other
hand, it is held that the Treasury should contribute to liquidity and to the
greater availability of credit (at lower rates) by confining its financing
to the short-term area, which is largely dominated by the commercial banks.
In theory, these principles may be sound. If pursued very far, however,
such policies might become very costly to the Treasury by causing it to lose

opportunities for funding at lower (recession) rates, and by placing its main
funding effort in boom periods of high rates.
Another practical consideration is the difficulty of managing a debt
that automatically moves closer to maturity with the passage of tiie. It
requires almost constant effort to prevent the average maturity of the debt
from shortening and to avoid excessive bunching in the short-term area. For

example, ^M despite the present Administration's policy of lengthening the d

at every favorable opportunity «- mthin ^he-past-12-^n^t^s-^l^H^ we have *«=

-4rising Federal expenditures and new Federal borrowing, inflationary sentiment
will inevitably be strengthened.
How, then, can we be certain of safeguarding our fiscal position over
the long term?

A, t

ae can realize this objective only if we meet(-tasee! conditions.
MKS£,

iter revenue sources must be protected so that improving business

can mate its full contribution to closing the gap between revenues and
expenditures in future years.
Second, there must be a continuing program —
by the public —

understood and supported

of holding Government expenditures down to the minimum

consistent with national security and sound administration.
And finally, Government financing must be done in such a way as to
attract genuine savings and thus avoid to the maximum degree possible the
aonetization of the debt through the commercial hanking system.
It is this lastfobjeetivnwith teiielj}! am most intimately concerned izT
the Treasury and itiich I should like to discuss with you in some detail this
morning.
I am sure that I do not need to expand on the broad objectives which we
seek in our debt management operations. Roughly they are three. The first —
which I have just touched upon —

is to obtain our funds as far as possible

from genuine savers and thus limit the creation of bank credit resulting from
Treasury financing. The second objective —

a corollary to the first — is

to reduce the impact of the Treasury debt operations on the functioning of
the security marketstytyboth the Government and private sectors; #** by moving
gradually toward further improvement of the maturity structure ©f the debt

- 3of us of preventing an inflationary psychology from gaining dominance in
the American economy. Put bluntly, such a development, if it continued,
would seriously impair the flow of savings on which the economic growth
of the country is built.
Americans can and will work together to maintain an environment in
which thrift is rewarded and savings are encouraged. But to be successful —
and we will be successful — we must recognize the problem, recognize our
personal share of the responsibilities it entails, and act with enlightened
self-interest to meet those responsibilities.
t

un-'._.> h&tf--**

Mo muBt-recogni %P-that/a major factor contributing to fears as to the

future value of the dollar is, widespread discouragement as to the size of t
Federal budget and the prospective deficit.
There is no basis for discouragement. We do indeed have a large
budget deficit in prospect — over $12 billion during this fiscal
year alone. In appraising this fact, however, the importance of the
lag between business changes and corporation tax receipts is often
lost sight of. The receipts currently flowing into the Treasury were
a part of earnings during a recession year. Earnings were low the
tax share was relatively small — and the result is a large deficit
this year. But if current tax receipts were up to the level of the tax
liabilities now accruing — the payments we will receive next year —
the deficit would be significantly reduced.

•- 3 -

of us of preventing an inflationary psychology from gaining dominance in
the American economy. Put bluntly, such a development, if it continued,
would seriously impair the flow of savings on which the economic growth
of the country is built.
Americans can and will work together to maintain an environment in
which thrift is rewarded and savings are encouraged. But to be successful —
and we w i H be successful — we must recognize the problem, recognize our
personal share of the responsibilities it entails, and act with enlightened
self-interest to meet those responsibilities.
«We-must~3>eeogni 7.fi^»that /a major factor contributing to fears as to the
future value of the dollar is ^widespread discouragement as to the size of the
Federal budget and the prospective deficit.
There is no basis fer discouragement. We d© indeed have a large
budget deficit in prospect —

over $12 billion during this fiscal

year alone. In appraising this fact, however, the importance of the
lag between business changes and corporation tax receipts is often
lost sight of. The receipts currently flowing into the Treasury were
a part of earnings during a recession year. Earnings were low — the
tax share was relatively small -

and the result is a large deficit

this year. But if current tax receipts were up to the level of the tax
liabilities nmr aeerning ,«_th«i na M . w <- n ,.„» ^ n

Fir^e^aili! we can recognize that the $79 billion expenditure figure
for the current year, large though it is, represents a smaller proportion
of the Nation's output of goods and services than in 1952, 1953, or 1954«
Oar growing economy is capable of supporting additional borrowing in the
amounts which we now foresee ars-seeeesasy during this year and next.
We cannot continue to meet our financing requirements safely, however,
if Americans sit back and let events run their course. If we as investors,

- 2 recent weeks —

and there are a number of sectors in the economy which

have not yet made a full return to previous high rates of activity.

only 4 months, however, /'total industrial production has recovered more
than %f~% of its entire decline for the recession period. Personal income,
and hence aggregate consumer spending, have held up well throughout the
recession. The sharp decline in the durable goods area did not spread
markedly to others; no deflationary spiral developed. Most important of
all, people generally have retained a confidence in the economic outlook.
Timely Government action helped support this confidence, but it clearly
stemmed from a fundamental belief in the strength and resilience of the
private enterprise system which we have built in this country.
In fact, I believe it is not too much to say that the maintenance
of confidence in the economic future of the country is the most significant business fact of the past year. For that very reason, every responsible
citizen and particularly every investor group must look with the gravest
concern on any developments which might constitute a threat to confidence.
We have recently been witnessingfthe~-d«velepffient off such a threat —
the growth of an inflationary psychology in the financial markets. So
far, inflationary sentiment has not spread much beyond this area. The
existence of excess productive capacity has kept business in a highly
competitive situation. Prices have been relatively stable during recent
months, and there has been no evidence of undue speculative activity in
the commodity markets, £^-ueua^-a-™sensit±ve^

future outlook^?

While these facts £xo-¥o&m®L*§^ as to our current situation, we must
recognize that the elements of new inflationary pressures are present. It
is not possible, I believe, to overemphasize the importance to every one

DRAFT
10/9/58
Remarks by Charles J. Gable, Jr.
Assistant to the Secretary of the
Treasury, before The Savings Banks
Association of Connecticut, Mountain
View House, Whitefield, New Hampshire,
11:15 a.m., Tuesday, October 14, 1958.
TREASURY FINANCING AND DEBT MANAGEMENT

I am happy to have this opportunity of discussing with you some of
the problems with which we are all so deeply concerned •*- those having
to do with the management of our Federal debt. Our public debt* now
amounts to over $275 billion, and the financing operations which it
entails have made the Treasury the largest single borrower in the Nation.
This year we are having to handle almost $52 billion of maturing issues in
addition to the $23 billion turnover of regular Treasury bills every three
months and further market financing growing out of the budget deficit.
Under these circumstances — and they have prevailed continuously since
World War II — debt management operations have an influence which is felt

not only throughout the investment markets but in every area of the economy.
The size of the debt, the direction in which it is moving, and the

state of the economy — these make up the environment (and a rapidly changing
environment it is) in which our debt management decisions must be made.
At the present time, very fortunately, we are able to approach our
problems in an atmosphere of business improvement. I believe there is no
doubt now but that the corner has been turned. Unemployment is still a
matter of concern to all of us — although it has dropped off markedly in

TREASURY DEPARTMENT
Washington

CQ
y

REMARKS BY CHARLES J. GABLE, JR., ASSISTANT
TO THE SECRETARY OP THE TREASURY, BEFORE THE
SAVINGS BANKS ASSOCIATION OF CONNECTICUT,
MOUNTAIN VIEW HOUSE, WHITEFIELD. NEW HAMPSHIRE,
11:15 A. M., TUESDAY, OCTOBER 14, 1958.
TREASURY FINANCING AND DEBT MANAGEMENT
I am happy to have this opportunity of discussing with you
some of the problems with which we are all so deeply concerned —
those having to do with the management of our Federal debt. Our
public debt now amounts to o^sr $275 billion, and the financing
operations which it entails have made the Treasury the largest
single borrower in the Nation. This year we are having to handle
almost $52 billion of maturing issues in addition to the $23
billion turnover of regular Treasury bills every three months
and further market financing growing out of the budget deficit.
Under these circumstances — and they have prevailed continuously
since World War II — debt management operations have an influence
which is felt not only throughout the investment markets but in
every area of the economy.
The size of the debt, the direction in which it is moving,
and the state of the economy — these make up the environment
(and a rapidly changing environment it is) in which our debt
management decisions must be made.
At the present time, very fortunately, we are able to
approach our problems in an atmosphere of business improvement.
I believe there is no doubt now but that the corner has been
turned. Unemployment is still a matter of concern to all of us —
although it has dropped off markedly in recent weeks — and there
are a number of sectors in the economy which have not yet made
a full return to previous high rates of activity. In only
k months, however, total industrial production has recovered
more than one-half of its entire decline for the recession period.
Personal income, and hence aggregate consumer spending, have held
up well throughout the recession. The sharp decline in the
durable goods area did not spread markedly to others; no
A-344
deflationary spiral developed. Most important of all, people

5^
y

- 2 generally have retained a confidence in the economic outlook.
Timely Government action helped support this confidence, but
it clearly stemmed from a fundamental belief in the strength
and resilience of the private enterprise system which we have
built in this country.
In fact, I believe it is not too much to say that the
maintenance of confidence in the economic future of the country
is the most significant business fact of the past year. For
that very reason, every responsible citizen and particularly
every investor group must look with the gravest concern on any
developments which might constitute a threat to confidence.
We have recently been witnessing such a threat — the
growth of an inflationary psychology in the financial markets.
So far, inflationary sentiment has not spread much beyond this
area. The existence of excess productive capacity has kept
business in a highly competitive situation. Prices have been
relatively stable during recent months, and there has been no
evidence of undue speculative activity in the commodity markets.
While these facts provide some reassurance as to our
current situation, we must recognize that the elements of
new inflationary pressures are present. It is not possible,
I believe, to overemphasize the importance to every one of us
of preventing an inflationary psychology from gaining dominance
in the American economy. Put bluntly, such a development, if
it continued, would seriously impair the flow of savings on
which the economic growth of the country is built.
Americans can and will work together to maintain an
environment in which thrift is rewarded and savings are
encouraged. But to be successful •— and we will be successful —
we must recognize the problem, recognize our personal share of
the responsibilities it entails, and act with enlightened
self-interest to meet those responsibilities.
A major factor contributing to fears with respect to the
future value of the dollar is the current widespread discouragement as to the size of the Federal budget and the prospective
deficit.
There is no basis for discouragement. We do indeed have
a large budget deficit in prospect — over $12 billion during
this fiscal year alone. In appraising this fact, however, the
importance of the lag between business changes and corporation
tax receipts is often lost sight of. The receipts currently
flowing into the Treasury were a part of earnings during a
recession year. Earnings were low — the tax share was
relatively small — and the result is a large deficit this year.

y v

- 3But if current tax receipts were up to the level of the tax
liabilities now accruing — the payments we will receive next
year — the deficit would be significantly reduced.
Moreover, we can recognize that the $79 billion expenditure
figure for the current year, large though it is, represents a
smaller proportion of the Nation's output of goods and services
than in 1952, 1953* or 1954. Our growing economy is capable
of supporting additional borrowing in the amounts which we now
foresee during this year and next.
We cannot continue to meet our financing requirements
safely, however, if Americans sit back and let events run
their course. If we as investors, as businessmen, as individuals,
adopt an attitude of complacency toward rising Federal
expenditures and new Federal borrowing, inflationary sentiment
will inevitably be strengthened.
How, then, can we be certain of safeguarding our fiscal
position over the long term?
We can realize this objective only if we meet certain
conditions•
Our revenue sources must be protected so that improving
business can make its full contribution to closing the gap
between revenues and expenditures in future years.
Furthermore, there must be a continuing program —
understood and supported by the public — of holding Government
expenditures down to the minimum consistent with national
security and sound administration.
And finally, Government financing must be done in such a
way as to attract genuine savings and thus avoid to the maximum
degree possible the monetization of the debt through the commercial
banking system.
It is with this last area that I am most intimately concerned
at the Treasury and which I should like to discuss with you in
some detail this morning.
I am sure that I do not need to expand on the broad
objectives which we seek in our debt management operations.
Roughly they are three. The first — which I have just touched
upon — is to obtain our funds as far as possible from genuine
savers and thus limit the creation of bank credit resulting
from Treasury financing. The second objective — a corollary
to the first — is to reduce the impact of the Treasury debt

PI
y u_

- 4 operations on the functioning of the security markets (both
the Government and private sectors) by moving gradually toward
further improvement of the maturity structure of the debt and
by refining and improving our financing techniques. Our third
broad objective is to conduct our operations in such a way as
to avoid interference with Federal Reserve monetary policy.
As you will recognize, these three objectives are closely
linked; success in one is a necessary ingredient of success
in each of the others.
How can we best accomplish these objectives? Most of
you, I am sure, are familiar with the theory of contra-cyclical
debt management. Very briefly, the theory holds that during
a boom the Treasury should seek to issue long-term obligations
in order to assist in reducing the liquidity of the economy.
In this way, it is said, its actions will be in harmony with
the efforts of the monetary authorities to decrease the
availability of credit at a time when resources are already
being fully utilized. During a recession, on the other hand,
it is held that the Treasury should contribute to liquidity
and to the greater availability of credit (at lower rates) by
confining its financing to the short-term area, which is largely
dominated by the commercial banks.
In theory, these principles may be sound. If pursued
very far, however, such policies might become very costly to
the Treasury by causing it to lose opportunities for funding
at lower (recession) rates, and by placing its main funding
effort in boom periods of high rates.
Another practical consideration is the difficulty of
managing a debt that automatically moves closer to maturity
with the passage of time. It requires almost constant effort
to prevent the average maturity of the debt from shortening and
to avoid excessive bunching in the short-term area. For example,
despite the present Administration's policy of lengthening the
debt at every favorable opportunity — since July 1, 1957* we
have issued over $26 billion of notes and bonds running from
4 to 32 years to maturity (and not without considerable
criticism from many quarters) — the fact remains that the
average length of the debt as of today is 5 years and 1 month,
as compared with 5 years and 3 months at the end of 1952.
Thus it is apparent that a slackening of our efforts to
float intermediate and long-term issues during recessions would
lead to periodic massive movements of debt into the short-term
area. These would need to be followed later by similar movements
out, Just at the time when debt lengthening would be most

- s y

£Q
y' t—

difficult, if not impossible. The disturbing effects on the market
of such large alterations in the debt structure must clearly modify
the possible theoretical conclusion that the Treasury should follow
a strictly contra-cyclical debt management policy. Instead, it
would seera that the Treasury should tend toward the issuance of
longer rather than shorter maturities in all phases of the business
cycle, just because of the "passage of time" problem.
In addition to stretching out the debt, the Treasury has been
working toward its objectives in another direction during the past
year — the grouping of its maturities, except for seasonal borrowing, in the 4 months of February, May, August and November. This
not only reduces the number of times we are in the market but it
also eliminates the pressure of Treasury financing during important
tax months, thus adding significantly to the effectiveness with
which the Federal Reserve can influence credit. By the end of
this calendar year, assuming our remaining financing also matures
on these quarterly dates, over three quarters of our marketable
debt (excluding regular bills) due in the next 10 years will fall
due in those four months.
The necessity for financing the deficit is, of course, the
largest single problem with which we must contend in our efforts
to lengthen the debt. Aside from that, however, a major obstacle
to further progress at the present time is the fact that the
Government trust funds are currently reducing their holdings of
Government obligations instead of adding to them. Increasing
reserves made it possible for these funds to increase their holdings
of Government securities during the past 5 years by $9 billion.
This year, however, benefits and other payments are exceeding
receipts, with the result that a major outlet for Governments in
the nonbank area is closed off, at least for the present.
If our total debt were going down Instead of up, a temporary
circumstance of this nature would give us little difficulty. But
as it is, the trust fund situation increases the urgency of finding
new outlets in the long-term area, outside of savings bonds.
The market here, as you know, is largely an institutional one,
and I should like to take a few moments at this point to review
what has been happening in that market in recent years.
Looking at the four main groups of savings institutions — mutual
savings banks, life insurance companies, savings and loan associations,
and pension funds (both corporate and state and local) — we find
that these institutions together held $27-1/2 billion of Government
securities at the end of December 1952. Five years later, the dollar
total had shrunk to about $25-1/2 billion — a net liquidation of
$2 billion, or an average of $400 million a year. Mutuals had gone
down by almost $2 billion and life insurance companies by about
$3-1/2 billion — more than cancelling out the $1-1/2 billion increase
in the holdings of savings and loan associations and the $2 billion
a
rates
insurance
increase
Treasury
of growth
in
companies,
standpoint.
pension
being
accounts.
this
experienced
presents
Even
by
a taking
disappointing
the mutuals
account
and
picture
ofthe
thelife
slower
from

y y

-6 Moreover, when we look at Government holdings as a
percentage of assets, the prospect is no brighter — less so, in
fact. Mutual savings banks had well over a third — actually,
almost two-fifths — of their assets invested in Governments
in December 1952; five years later the percentage had declined
to not much over one-fifth. Life insurance companies were down
from 14 percent to 7 percent — just about matching the current
position of the savings and loan group, which has 7 percent of
assets invested in Government securities now as compared with
8 percent in 1952. Likewise, the corporate pension fund ratio
between Governments and total assets dropped from 26 percent to
13 percent in the five years, and the ratio for state and local
pension funds slipped almost as much in relative terms, from
54 percent to 38 percent.
An analysis of the flow of savings in the aggregate during
recent years sets forth the elements of the problem even more
clearly.
Individual savings available for investment during the 5
years 1952-1957 amounted to approximately $112 billion. Of
this $112 billion, $84 billion was placed in savings
institutions and pension funds. The other $28 billion was
invested directly in securities and mortgages.
Looking first at the $28 billion invested by individuals
directly, we find that $11 billion went into corporate stocks and
bonds, $8 billion went into mortgages, and $7-1/^ billion went
into state and local government obligations. The remaining
$1-1/2 billion went into United States Government securities.
Individuals increased their holdings of Series E and H savings
bonds by over $6 billion and their holdings of marketable
U. S. obligations by $2-1/2 billion during the period. On the
other hand, there was a $7 billion liquidation of other savings
bonds held by individuals (including, of course, large amounts of
the maturing Series F and G savings bonds). The Treasury therefore, in a period of 5 years, has been successful in capturing
only a meager amount of the money flowing directly from
individuals into the security markets.
Virtually all of the $84 billion of individuals1 savings
which flowed into savings institutions during this 5-year period,
as you know, went into new corporate and municipal securities
and mortgages. In addition, as I have already noted, the
savings institutions as a group liquidated about $2 billion of
their Government holdings -- more than cancelling out the
$1-1/2 billion increase in Government security ownership on the
part
of either
individuals.
Thus,
the
share
of
individual
flowing
securities
during
directly
the past
or 5
indirectly
years
comes
into
out
U.S.
at Government
lesssavings
than zero.

-7 -

What is the import of these figures? They clearly indicate
that the savings institutions have successfully marshalled the
bulk of the savings of the American people. They further attest
to the well known fact that the savings institutions have played
a very important part in financing home building and business
growth throughout the postwar period. But they also point up
the fact that the Treasury has had only limited success in
attracting individuals' savings directly and even less success
with respect to the funds which savings institutions have
gathered. Nevertheless, sound financing of the Government's
needs is of vital import to all of us. You and every family
served by your institutions have a tremendous stake in keeping
our currency stable. The realists, it seems to me, are those
who recognize this compelling fact — not those who urge that
the hard-headed view is the one which is limited to short-term
considerations.
So we come out at this inescapable point: The Treasury
must rely to a larger extent on the institutional market if it
is to achieve a better debt structure and to finance a sizable
portion of the forthcoming deficits outside of the banks.
Manifestly, the Treasury in peacetime should not expect to
attract investment in its issues except on the basis of
realistic pricing which will commend itself to the sound judgment
of the investor. You are properly conscious of your fiduciary
relationship to those whom you serve. Of course, you will
pursue no course of action that is not consistent with those
obligations.
However, what is sound judgment with respect to the
desirability of a particular corporate issue may not be sound
judgment with respect to major Government financing. Yield
is not the only criterion of sound investment policy.
Our emphasis on the institutional market of which you are
a part does not in any way imply, of course, that our savings
bonds program will be neglected. Savings bonds lie at the very
heart of successful debt management in a democracy such as ours.
We have taken a number of steps this year to broaden our
program, including opening up Series E and H bonds for the
investment of maturing Series F and G. Other measures are
under consideration. The facts which I have just been reviewing,
however, make it clear that the crucial area of debt management
in the deficit financing period which we are entering is that of
the institutional market. What plan can we work out together
to increase — substantially increase — the Treasury's share of
that market?

-8 -

As you know, we have no underwriters in the usual sense of the
term. No commissions are paid for the placement of our issues, as
is common practice in some other countries. Instead, we rely on
the financial community at large for the necessary underwriting
functions.and advice. We consult frequently with many sectors
of the financial community, including a Committee on Government
Securities and the Public Debt of your National Association of
Mutual Savings Banks. Several members of your own group have
served well on this Committee, providing leadership and
direction in its work. We sincerely appreciate the time, thought,
and effort expended in our behalf, and the sound advice and wise
counsel that we receive as a result of it. The Secretary
recently has urged such groups in and out of Government to put
special emphasis on a program of joint study and consultation
on all phases of debt management.
Within the financial community it is well understood that
there is no easy solution to our debt management problems. The
broad circumstances which shape our problems have been with us
for a long time. We fully expect to continue to market our
securities in a free money market and without resort to radical
departures in technique. But with a debt as large as ours —
particularly when it is growing — it is advisable, I might even
say essential, that we broaden our perspective.
You are already well equipped and eminently skilled in the
job of handling the savings of the American people, and you
share with us the responsibility for the maintenance of the
purchasing power of the dollar. I am sure that you share
also our belief that if debt management is to make its maximum
contribution to sound economic growth and stability, our
national Government as well as private industry must be soundly
financed.
I am confident not only of your full understanding of our
problem but also of the help that you will give us in resolving
it.
0O0

-3-

C£
y

or by any local taxing authority. For purposes of taxation the amount of disc

at which Treasury bills are originally sold by the United States is considere

be interest. Under Sections h$k (b) and 1221 ($) of the Internal Revenue Code
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 dispose

and such bills are excluded from consideration as capital assets. Accordingly,

the owner of Treasury bills (other than life insurance companies) issued here

need include in his income tax return only the difference between the price p
for such bills, whether on original issue or on subsequent purchase, and the

amount actually received either upon sale or redemption at maturity during th
taxable year for which the return is made, as ordinary gain or loss.
Treasury Department Circular No. 4l8, Revised, and this notice, prescribe

the terms of the Treasury bills and govern the conditions of their issue. Copi
of the circular may be obtained from any Federal Reserve Bank or Branch.

- 2 -

mm
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 sub-

mitting 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 $200,000 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.

Settlement for accepted

tenders in accordance with the bids must be made or completed at the Federal Reserve Bank on

October 23, 1958

, In cash or other immediately available funds

a$
or in a like face amount of Treasury bills maturing October 25, 1958
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.
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,

8x¥JK33KX
TREASURY DEPARTMENT
Washington

/ A"

Jj /

A. M.
Hm RELEASE/ HHXHZMK NEWSPAPERS,
Thursday, October 16, 1958
The Treasury Department, by this public notice, invites tenders for
$ 1,800,000,000 , or thereabouts, of 91 -day Treasury bills, for cash and
in exchange for Treasury bills maturing October 23, 1958 , in the amount of
$ 1,700,411,000 , to be issued on a discount basis under competitive and non-

C59i
competitive bidding as hereinafter provided.

The bills of this series will be

dated October 23, 1958 , and will mature January 22, 1959 , when the face

^ E

i*Jc

amount will be payable without interest. They will be issued in bearer form only,

and in denominations of $1,000, $5,000, $10,000, $100,000, $500,000 and $1,000,
(maturity value).
Tenders will be received at Federal Reserve Banks and Branches up to the
Daylight Saving
closing hour, two o*clock p.m., Eastern/gfcafflflrtrtfl time, Monday, October 20, 1958 .
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 thr
decimals, e. g., 99.92$. Fractions may not be used. It is urged that tenders
be made on the printed forms and forwarded in the special envelopes which will
supplied by Federal Reserve Banks or Branches on application therefor.
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 dea

in investment securities. Tenders from others must be accompanied by payment of

TREASURY DEPARTMENT
WASHINGTON, D.C.
RELEASE A.M. NEWSPAPERS,
Thursday, October 16, 1958.

A-345

The Treasury Department, by this public notice, invites tenders
for $ 1,800,000,000, or thereabouts, of 91-day Treasury bills, for
cash and in exchange for Treasury bills maturing October 23, 1958,
in the amount of $1,700,411,000, to be issued on a discount basis
under competitive and non-competitive bidding as hereinafter
provided. The bills of this series will be dated October 23, 1958,
and will mature January 22, 1959,
when the face amount will be
payable without interest. They will be issued in bearer form only,
and in denomination of $1,000, $5,000, $10,000, $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, two o'clock p.m., Eastern Daylight
Saving time, Monday, October 20, 1958.
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.
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 such respect shall be
final. Subject to these reservations, non-competitive tenders for
$200,000 or less without stated price from any one bidder will be
accepted In full at the average price (in three decimals) of accepted

- 2 competitive bids. Settlement for accepted tenders in accordance
with the bids must be made or completed at the Federal Reserve Bank
on October 23, 1958, in cash or other Immediately available funds
or In a like face amount of Treasury bills maturing October 23, 1958,
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.
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 actuallyreceived 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, 4l8, Revised, 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.

oOo

0
October 2, 1958

MEMORANDUM TO MR,. MARTIN L. MOOl^g
The following transactions were made in direct and guaranteed securities
of the Government for Treasury investments and other accounts during the month
of September, 1958?
Purchases $10,766,000.00
Sales 152,100.66'
Net Purchases $10,613,900.00

C. £• Morses
<y*^%£r~mf Chief, Investments Branch
Division of Deposits It investments

TREASURY DEPARTMENT

71
I .A

WASHINGTON, D.C.

A
IMMEDIATE RELEASE,
~3te*&a$s .September 1.5J 1-958

During ^^fcfet 1958, market transactions in direct
and guaranteed securities of the government for
Treasury investment and other accounts resulted in
<fp/0/ 6>/J>,f*0.c0
net purchases by the Treasury Department of •frl9,lG7j900-r—-

oOo

TREASURY DEPARTMENT
W A S H I N G T O N , D.C

IMMEDIATE RELEASE,
Wednesday, October 15, 1958.

A-346

During September 1958, market
transactions in direct and guaranteed
securities of the government for Treasury
investment and other accounts resulted in
net purchases by the Treasury Department
of $10,613,900.00.

0O0

COTTON WASTES
(In pounds)

7?
-J

COTTON CARD STRIPS made from cotton having a staple of less than 1-3/16 inches in length, COMBER
WASTE, LAP WASTE, SLIVER WASTE, AND ROVING WASTE, WHETHER OR NOT MANUFACTURED OR OTHERWISE
ADVANCED IN VALUE % Provided, however, that not more than 33-1/3 percent of the quotas shall
be filled by cotton wastes other than comber wastes made from cottons of 1-3/16 inches or more
in staple length in the case- of the following countries? United Kingdom, France, Netherlands,
Switzerland, Belgium, Germany, and Italy g
Country of Origin
United Kingdom .
Canada
France
.....
British India .
Netherlands
Switzerland
Belgium . .
Japan • . .
China . . .
Egypt . • ,
Cuba o 0 . c
Germany . •
Italy . . «,

Established
TOTAL QUOTA
4,323,457
239,690
227,420
69,627
68,240
44,388
38,559
341,535
17,322
8,135
6,544
76,329
21?263
5,482,509

1/ Included in total imports, column 2.
Prepared in the Bureau of Customs.

1 T o t a l Imports "1 Established :
Imports
Tf
i Sept. 20, 1958, to s 33-1/3$ of 1 Sept. 20, 1958
t October 13/1958
s Total Quota ? to October 13. 1958
553,270
1,441,152
553,270
239,690
75,807
22,747
14,796
12,853

6,580

25,443
7,088

6t580

799,540

1,599,886

559,850

TREASURY DEPARTMENT
Washington, D. C.

IMMEDIATE RELEASE

A-347

Friday, October 17, 1958.

Preliminary data on imports for consumption of cotton and cotton waste chargeable to the quotas
established "by the President's Proclamation of September 5, 1939, as amended
COTTON (other than linters) (in pounds)
Cotton under l-l/8 inches other than rough or harsh under 3/4"
Imports September 20, 195b* - October 13, 195b1
Country of Origin
Egypt and the AngloEgyptian Sudan ...
Peru
British India
China
Mexico
Brazil
Union of Soviet
Socialist Republics
Argentina
Haiti
Ecuador

Established Quota

Imports

Established Quota

Country of Origin

752

Honduras
783,816
247,952
2,003,483
1,370,791
8,883,259
618,723
475,124
5,203
237
9,333

8,883,259
618,723

Paraguay
Colombia
Iraq
British East Africa ...
Netherlands E. Indies .
Barbados
l/Other British W. Indies
Nigeria
2/0ther British W. Africa
3/Other French Africa ...
Algeria and Tunisia ...

871
124
195
2,240
71,388
21,321
5,377
16,oo4
689

l/ Other than Barbados, Bermuda, Jamaica, Trinidad, and Tobago,
2/ Other than Gold Coast and Nigeria.
3/ Other than Algeria, Tunisia, and Madagascar.
Cotton 1-1/8" or more
Imports August 1, 1958 - October 13, 1958
Established Quota (Global) - 45,656,420 Lbs.
Staple Length
1-3/8" or more
1-5/32" or more and under
1-3/8" (Tanguis)
1-1/8" or more and under
1-3/8"

Allocation
39,590,778

Imports
39,590,778

1,500,000

957,778

h,565,6U-2 h,565,6U2

Imports

TREASURY DEPARTMENT
Washington, D. C.

i -y

IMMEDIATE RELEASE

A-34.7

Friday, October 17, 1958.

Established Quota

783,816
247,952
2,003,483
1,370,791
8,883,259
618,723
475,124
5,203

237
9,333

Imports

8,883,259
618,723
-

Country of Origin

Established Quota

Honduras
Paraguay
Colombia
Iraq
British East Africa ...
Netherlands E. Indies .
Barbados
1/Other British W. Indies
Nigeria
2/Other British W. Africa
3/Other French Africa ...
Algeria and Tunisia ...

1/ Other than Barbados, Bermuda, Jamaica, Trinidad, and Tobago.
2/ Other than Gold Coast and Nigeria.
\i Other than Algeria, Tunisia, and Madagascar.
Cotton 1-1/8" or more
Imports August 1, 1958 - October 13, 1958
Established Quota (Global) - 45,656,420 Lbs.
Staple Length
1-3/8" or more
1-5/32" or more and under
1-3/8" (Tanguis)
1-1/8" or more and under
1-^/8" _ ___

Allocation

Imports

39,590,778

1,500,000

957,778

752
871
124
195
2,240
71,388
21,321
5,377
16,004

689

Imports

••

—

COTTON WASTES
"(In pounds)
COTTON CARD STRIPS made from cotton having a staple of less than 1-3/16 inches in length, COMBER
WASTE, LAP WASTE, SLIVER WASTE, AND ROVING WASTE, WHETHER OR NOT MANUFACTURED OR OTHERWISE
ADVANCED IN VALUEs Provided, however, that not more than 33-1/3 percent of the quotas shall
be filled by cotton wastes other than comber wastes made from cottons of 1-3/16 Inches or more
in staple length in the case of the following countriess United Kingdom, France, Netherlands,
Switzerland, Belgium, Germany, and Italyg

Country of Origin

United Kingdom . . . . .
Canada
...
France
.
British India
Netherlands . . . . . . .
Switzerland . . . . . . .
Belgium
Japan
China
Egypt
Cuba . . . .
......
Germany
Italy

Established
TOTAL QUOTA
4,323,457
239,690
227,420
69,627
68,240
44,388
38,559
341,535
17,322
8,135
6,544
76,329
21.263

5,482,509
\f Included in total imports, column 2.
Prepared in the Bureau of Customs.

i
Total Imports
: Established s
Imports
TJ
: Sept. 20, 1958, to s 33-1/356 of i Sept. 20, 1958
; October 13. 1958
5 Total Quota ; to October 13. 1958
553,270
239,690

1,441,152

553,270

75,807
22,747
14,796
12,853

SiftQ

25,443
7.088

6,580

799,5*1-0

1,599,686

559,850

7P
TREASURY DEPARTMENT
Washington, D. C.

IMMEDIATE RELEASE
Friday, October 17, 1958.

i y

A -348

The Bureau of Customs announced today the following preliminary
figures showing the imports for consumption from Janaury 1, 1958, to
October 4, 1958, inclusive, of commodities for which quotas were established pursuant to the Philippine Trade Agreement Revision Act of 1955:

Commodity

Established Annual : Unit of
Quota Quantity
: Quantity

Buttons

807,500

Gross

Imports as of
October 4, 1958

321,437

Cigars 190,000,000

Number

Coconut oil 425,600,000

Pound

155,787,753

Cordage 6,000,000

Pound

3,570,406

(Refined
Sugars
(Unrefined

Pound

Tobacco 6,175,000

2,914,273

28,321,870
1,904,000,000

1,673,548,277
Pound

3,955,132

TREASURY DEPARTMENT
Washington, D. C.

IMMEDIATE RELEASE

Friday, October 17, 1958.

A-348

Commodity

Established Annual : Unit of
Quota Quantity
: Quantity

Buttons

807,500

Gross

Imports as of
October 4, 1958

321,437

Cigars 190,000,000 Number

2,914,273

Coconut oil 425,600,000 Pound

155,787,753

Cordage 6,000,000 Pound

3,570,406

(Refined
Sugars
(Unrefined

28,321,870
1,904,000,000

Tobacco 6,175,000 Pound

Pound
1,673,548,277
3,955,132

-'-3'
CO

P
•y

- 2-

Unit :
of
: Imports as of
Quantity: October 4, 1958

Commodity
Absolute Quotas;
Peanuts, shelled, unshelled,
blanched, salted, prepared, or
preserved (incl. roasted peanuts 12 mos. from
August 1, 1958
but not peanut butter)

1,709,000

Pound

1,400,234*

Rye, rye flour, and rye meal ....
12 mos. from
July 1, 1958
182,280,000
Canada
3,720,000
Other Countries

Pound
Pound

182,178,516*

Butter substitutes, including
butter oil, containing 45$
or more butterfat

1,200,000

Pound

Feb. 1 - Oct. 31, 1958
Argentina
18,475,901
Paraguay
2,437,128
Other Countries
739,366

Pound
Pound
Pound

Tung oil

Calendar Year

* - Imports through October 13, 1958.

1,199,991

Quota Filled
Quota Filled
Quota Filled

TREASURY DEPARTMENT
Washington, D. C.

-?Q

IMMEDIATE RELEASE

Friday,

October 17. 1958.

A-349

The Bureau of Customs announced today preliminary figures showing the imports for
consumption of the commodities listed below within quota limitations from the beginning
of the quota periods to October 4, 1958, inclusive, as follows:

Unit :
of
: Imports as of
Quantity:October 4, 1958

Commodity
Tariff-Rate Quotas:
Cream, fresh or sour

Calendar Year

1,500,000

Gallon

199

Whole milk, fresh or sour

Calendar Year

3,000,000

Gallon

253

Cattle, 700 Lbs. or more each
(other than dairy cows)

July 1, 1958 -f .
Sept. 30, I 9 5 8 W

120,000

Head

79,259(1)

Cattle, less than 200 Lbs. each.

12 mos. from
April 1, 1958

200,000

Head

15,311

Fish, fresh or frozen, filleted,
etc., cod, haddock, hake,
pollock, cusk, and rosefish ... Calendar Year

35,892,221

Pound

%iota Filled

Tuna fish

Calendar Year 44,693,874 Pound 38,069,410

White or Irish potatoes:
Certified seed
Other

12 mos. from
Sept. 15, 1958

Walnuts

Calendar Year

5,000,000

Pound

2,572,956

Almonds, shelled, blanched,
roasted, or otherwise prepared
or preserved

October 23, 1957Sept. 30, 1958

5,000,000

Pound

4,938,496^

12 mos. from
July 1, 1958

3,000,000

Pound

2,362,361

12 mos. from
July 1, 1958

80,000,000 Pound

1,908,592

Calendar Year

14,200,000 Pound

Quota Filled

Alsike clover seed

Peanut oil

Woolen fabrics

114,000,000 Pound
36,000,000 Pound

100,000
74,705

(l) Imports through September 30, 1958.

(continued)

<~' \y

TREASURY DEPARTMENT
Washington, D. C.

DIATE RELEASE
lay,
October 17. 1058.

A-349

The Bureau of Customs announced today preliminary figures showing the imports for
umption of the commodities listed below within quota limitations from the beginning
he quota periods to October 4, 1958, inclusive, as follows:

Commodity

Period

and

Quantity

: Unit :
:
of
: linports as of
: Quantity:October 4, 1958

ff-Rate Quotas:

le, 700 Lbs. or more each

Calendar Year

1,500,000

Gallon

199

Calendar Year

3,000,000

Gallon

253

July 1, 1958 -,
Sept, 30, 1 9 5 8 u )

120,000 Head

12 mos. from
April 1, 1958

200,000

, fresh or frozen, filleted,
., cod, haddock, hake,
lock, cusk, and rosefish ... Calendar Year

35,892,221

Pound

Quota Filled

Calendar Year

44,693,874

Pound

38,069,410

12 mos. from
Sept. 15, 1958

114,000,000
36,000,000

Pound
Pound

100,000

le, less than 200 Lbs. each.

fish

Head

79,259 (l)

15,311

e or Irish potatoes:

74,705

uts

Calendar Year

5,000,000 Pound

2,572,956

nds, shelled, blanched,
sted, or otherwise prepared
preserved

October 23, 1957Sept. 30, 1958

5,000,000 Pound

4,938,496^)

12 mos. from
July 1, 1958

3,000,000 Pound

2,362,361

12 mos. from
July 1, 1958

80,000,000 Pound

1,908,592

Calendar Year

14,200,000 Pound

Quota Filled

ke clover seed

at oil

sn fabrics

Imports through September 30, 1958.

(continued)

Commodity

Period

and

Quantity

: Unit :
of
: Imports as oj
Quantity:October 4, 195

Absolute Quotas:
Peanuts, shelled, unshelled,
blanched, salted, prepared, or
preserved (incl. roasted peanuts
but not peanut butter)

12 mos. from
August 1, 1958

1,709,000

Pound

1,400,234*

Rye, rye flour, and rye meal ....12 mos. from
July 1, 1958
Canada
182,280,000
Other Countries
3,720,000

Pound
Pound

182,178,516*

Butter substitutes, including
butter oil, containing 45$
or more butterfat

1,200,000

Pound

Feb. 1 - Oct. 31, 1958
Argentina
18,475,901
Paraguay
2,437,128
Other Countries
739,366

Pound
Pound
Pound

Tung oil ..

Calendar Year

* - Imports through October 13, 1958.

1,199,991
Quota Filled
Quota Filled
Quota Filled

CJ
C-J

COTTON WASTES
(In pounds)

COTTON CARD STRIPS made from cotton having a staple of less than 1-3/16 inches in length, COlfflER
WASTE, LAP WASTE, SLIVER WASTE, AND ROVING WASTE, WHETHER OR NOT MANUFACTURED OR OTHERWISE
ADVANCED IN VALUEi Provided, however, that not more than 33-1/3 percent of the quotas shall
be filled by cotton wastes other than comber wastes made from cottons of 1-3/16 inches or more
in staple length in the- case of the following countries? United Kingdom, France, Netherlands,
Switzerland, Belgium, Germany, and Italys

Country of Origin

United Kingdom .
Canada . . . . .
France . . . . . .
British India .
Netherlands . .
Switzerland _. • . ,
Belgium . . . . ,
Japan • . . . » ,
China . . . . . .
Egypt .
Cuba . . . .
.,
Germany .- • • . ,
Italy . . . .
.

Established
TOTAL QUOTA

:
Total Imports
: Sept. 20, 1957, to
: Sent. 19. 1958

4,323,457
239,690
227>420
69,627
68,240
44,388
38,559

1,435,431
239,690

Established
33-1/35* of
Total Quota
1,441,152

Imports
Sept. 20, 1957
to Sept. 19. 1958

1,435,431

75,807

66,265
21,964

22,747
14,796
12,853

21,964

3 U , 535
17,322
8,135
6,544
76,329
21,263

2^54
6,915

25,443
7,088

24,854
6,915

5,482,509

1,795,119

1,599,886

1,489,164

1/ Included in total imports, column 2.
Prepared in the Bureau of Customs.

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GOTTON WASTES
(In pounds)
COTTON CARD STRIPS made from cotton having-* staple of less than 1-3/16 inches in length, COlffiER
WASTE, LAP WASTE, SLIVER WASTE, AND ROVING 7^ASTE, 'WHETHER OR NOT MANUFACTURED OR OTHERWISE
ADVANCED IN VALUEs Provided, however, that not..more than 33-1/3 percent of the quotas shall
be filled by cotton wastes other.than comber wastes made from cottons of 1-3/16 inches or more
in staple length In the case- of the following-countries* United Kingdom, France, Netherlands,
Switzerland, Belgium, Germany, and Italys

Country of Origin
United Kingdom
Canada . . . .
France . . . .
British India ,
Netherlands . «
Switzerland . «
Belgium . . . ,
Japan • • . . ,
China • . . • ,
Egypt
Cuba
Germany • • . .
Italy . . . .

Established
TOTAL QUOTA

i
Total Imports
: Sept. 20, 1957, to
: Sept. 19. 1958

4,323,457
239,690
227,420
69,627
68,240
44,388
38,559
341,535
17,322
8,135
6,544
76,329
21.263

1,435,431
239,690

5,482,509
if Included in total imports, column 2.
Prepared in the Bureau of Customs.

Established s
Imports
33-1/3* of : Sept. 20, 1957
Total Quota ; to Sept. 19. 1958
1,441,152

1,435,431

75,807
66,265
21,964

22,747
14,796
12,853

21,964

2^854
6,915

25,443
7,088

24,854
6,915

1,795,119

1,599,886

1,489,164

W [7 Z! iCi

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££;

fSLlASI A. H. IvSWSPAFHB,
Tuesday. Oetober 21, 1958*

The Treasury Department announced last evening that the tender* for 11,800,000,011,
or thereabouts, of 91-day Trmmsury bills to be dated October 23, 1958, and t© nature
January 22, 1959, which were offered on Oetober 16, were opened at the Federal Reserve
Banks on Oetober 20.
The details of this issue are as follows;
fetal applied for - $2,987,173,000
Total accepted
- 1,800,112,000

Range of accepted competitive bids;

(includes $3$k,$$k900Q entered oa a
noncompetitive basis and accepted ia
foil at the average price shown below)
(Excepting four tenders totaling fl,Sl5,000)

High
lm

- 99.300 Equivalent rate of discount approx. 2.169% pmr earn
- 99.289
"
•
•
•
•
2.813* •
"

Average

- 99.291

•

2.8CW

•

(31 percent of the ssonnt bid for at the lew price was accepted)
Federal Reserve
Distrlet

Total
Applied for

Total
Accepted

Boston
lew Torfc
Philadelphia
Cleveland
Richmond
Atlanta
Chicago
St. Louis
Minneapolis
Kansas City
Bellas
San Francisco

1
53,0^3,000
2,l67,55li,000
1*6,273,000
75,2k7,000
30,537,000
32,1^06,000
295,10)6,000
1*8,062,000
22,52li,000
59,967,000
30,55fe,ooo
125,570,000

1
Ul,851,000
1,181,157,000
25,173,000
6*1,706,000
26,157,000
25,966,000
20it,383,000
*3,l6ft,000
17,73M00
li5,767,000
2Oy2iA,000
103.600.000

12,987,173,000

$1,800,112,000

TOTAL

TREASURY DEPARTMENT
WASHINGTON, D
RELEASE A. M. NEWSPAPERS,
Tuesday, October 21, 1958.

A-352

The Treasury Department announced last evening that the tenders for $1,800,000,OC

or thereabouts, of 91-day Treasury bills to be dated October 23, 1958, and to matur

January 22, 1959, which were offered on October 16, were opened at the Federal Rese
Banks on October 20.
The details of this issue are as followst
Total applied for - $2,987,173,000
Total accepted
- 1,800,112,000

(includes £351i,851*,000 entered on a
noncompetitive basis and accepted in
full at the average price shown below)

Range of accepted competitive bids: (Excepting four tenders totaling £l,5l5,OOC
High
Low

- 99.300 Equivalent rate of discount approx. 2.769$ per annum
- 99.289
"
«
it
«
R
2.813$ B
"

Average

- 99.291

2.B0k%

(31 percent of the amount bid for at the low price was accepted)
Federal Reserve
District

Total
Applied for

Total
Accepted

Boston
New York
Philadelphia
Cleveland
Richmond
Atlanta
Chicago
St. Louis
Minneapolis
Kansas City
Dallas
San Francisco

$
53,063,000
2,167,551*,000
U6,273,GOO
75,2li7,000
30,537,000
32,1^06,000
295, kl6,000
U8,062,000
22,52!i,000
59,967,000
30,551,000
125,570,000

$
la,85l,000
1,181,157,000
25,173,000
61;,706,000
26,157,000
25,966,000
20^,383,000
1*3,1614,000
17,73l*,000
15,767,000
20,kSk,000
103,600,000

S2,987,173,000

$1,800,112,000

TOTAL

•

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 h$h (b) and 1221 (5) of the Internal Revenue Code of

1951 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. 1*18, Revised, 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.

2 percent of the face amount of Treasury bills applied for, unless the tenders
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 sub-

Settlement for accepted

tenders in accordance with the bids must be made or completed at the Federal Reserve Bank on

October 50, 1958

, in cash or other immediately available funds

SxT
or in a like face amount of Treasury bills maturing October 50, 1958
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.
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 195U. 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,

TREASURY DEPARTMENT
Washington
A. M.
SDK RELEASE/ HHSBUSK NEWSPAPERS,
Thursday, October 25, 1958
The Treasury Department, by this public notice, invites tenders for
$1,800,000,000 , or thereabouts, of 91 -day Treasury bills, for cash and

m—

in exchange for Treasury bills maturing
October 50, 1958
, in the amount of
$1,700,297,000 , to be issued on a discount basis under competitive and non-

W
competitive bidding as hereinafter provided. The bills of this series will be
dated October 50, 1958 , and will mature January 29, 1959 , when the face

x?Z5

amount will be payable without interest. They will be issued in bearer form only,
and in denominations of $1,000, $5,000, $10,000, $100,000, $500,000 and $1,00
(maturity value).
Tenders will be received at Federal Reserve Banks and Branches up to the
one-thirty
closing hour, /&& o'clock p.m., Eastern Standard time, Monday, October 27, 1958 •

Tenders will not be received at the Treasury Department, Washington. Each te

must be for an even multiple of $1,000, and in the case of competitive tende
the price offered must be expressed on the basis of 100, with not more than

decimals, e. g., 99.92$. Fractions may not be used. It is urged that tenders

be made on the printed forms and forwarded in the special envelopes which wi
supplied by Federal Reserve Banks or Branches on application therefor.
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 d

in investment securities. Tenders from others must be accompanied by payment

RELEASE A.M. NEWSPAPERS,
Thursday, October 23, 1958.

A-353

The Treasury Department, by this public notice, Invites tenders
for $1,800,000,000, or thereabouts, of 91-day Treasury bills, for
cash and in exchange for Treasury bills maturing October 30, 1958,
in the amount of $1,700,297*000, to be issued on a discount basis
under competitive and non-competitive bidding as hereinafter
provided. -The bills of this series will be dated October 30, 1958,
and will mature January 29, 1959, when the 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, $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, one-thirty o1clock p.m., Eastern Standard time,
Monday, October 27, 1958.
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.
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 such respect shall be
final. Subject to these reservations, non-competitive tenders for
$200,000 or less without stated price from any one bidder will be
accepted in full at the average price (in three decimals) of accepted

- 2 competitive bids. Settlement for accepted tenders in accordance
with the bids must be made or completed at the Federal Reserve Bank
on October 30, 1958, in cash or other immediately available funds
or in a like face amount of Treasury bills maturing October 30, 1958.
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.
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 actuallyreceived 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. 4l8, Revised, 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.

oOo

RELEASE A. M. NEWSPAPERS,
Tuesday. October 28, 1958.

.je
. Bank
the treasury Department announced last evemfcig that the tenders for fl,8(K5,000,^00,
or thereabouts, of 91~day Treasury bills to be dated October 30, 1958, and to mature
• - -'---I.

•

-*-

———M—iClMI9—999>99»9M99>W

,__

January 29, 1959, whieh were offered on October 23, were opened at the Federal leeem
Banks on Oetober 27. ~ 3t or
The details of this issue are as follows?

>~" not have
-imposition
""•tich

total applied for - $2,870,381,000
t 19C*
total accepted
- 1,801,299,000 (includes $299,407,000 entered on a x
noncompetitive basis and accepted in
full at the average price shown below)
^ authority.
Range of accepted eospetitive bidst
mieii Treasury
wig*! - 99.335 Iquivalent rate of discount
apprex. 2.631JG?#nti.:
per annua
.iai
n
Average
-99.331
•
•
«
^
., «^ ^J_.647^
£ew
-99.328
•
« »
" .i^c.
i i i ^ S S M*. •
(7 percent of the amount bid for at the low prise was accepted)
return only the:
Federal Reserve total ^Q. „ Total. ly
Acce
District
Applied for
PW
y- dur
I 1.0,676,000 "'* * I "23,776,000
Boston
Hav York
2,036,062,000
I,l8i),78l»,000
Philadelphia
U.,956,000 j a n d thi %>%}'?%
Cl«T.land
81,,979.000 ,a n d g o v e 38,S0j.,00O
Richmond
19,9lS,000 a r ^ b e oi?»**,00U
Atlanta 35,851,000 * „S'?2'S2
Chicago
320,069,000
NS'^'SS
St. Ionia
38,197,000
2?'S?!»22
Minneapolis
211.988,000
E'B,3'™
Kansas City
5l»,176,000
37,351,000
Dallas
21,1.15,000
* i ' % X
San Francisco
11,9.097.000
126.562.000
TOTAL fi,870,381,000 #1,801,299,000

> K |L.T.It-

TREASURY DEPARTMENT
WASHINGTON, D.C.
JELEASE A. M. NEWSPAPERS,
[uesday, October 28, 1958.

A-354

The Treasury Department announced last evening that the tenders for $1,800,000,000,

>r thereabouts, of 91-day Treasury bills to be dated October 30, 1958, and to matur

January 29, 1959, which were offered on October 23, were opened at the Federal Rese
Banks on October 27.
The details of this issue are as follows;
Total applied for - $2,870,381,000
Total accepted
- 1,801,299,000

(includes $299,407,000 entered on a
noncompetitive basis and accepted in
full at the average price shown below)

Range of accepted competitive bids:
High
low

- 99.33$ Equivalent rate of discount approx. 2.6315S per annum
w
w
n
- 99.328
"
*
m
2.65856 w

Average

- 99.331

2.6kl%

(7 percent of the amount bid for at the low price was accepted)

Federal Reserve
District

Total
Applied for

Total
Accepted

Boston
New York
Philadelphia
Cleveland
Richmond
Atlanta
Chicago
St. Louis
Minneapolis
Kansas City
Dallas
San Francisco

1*0,676,000
2,036,062,000
Ui,956,000
81i,979,000
19,915,000
35,851,000
320,069,000
38,197,000
2l»,988,000
5U,176,000
21,105,000
1149,097,000

#
23,776,000
I,l81i,78l4,000
16,501,000
38,50li,000
19,63lt,000
21,288,000
253,189,000
37,232,000
21,713,000
37,351,000
20,1^65,000
126,562,000

$2,870,381,000

$1,601,299,000

TOTAL

- 3 -

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 h$k (b) and 1221 ($) of the Internal Revenue Code of
195U 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. !*!8, Revised, 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.

- 2 -

JHjc
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.
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 19$k. 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,

TREASURY DEPARTMENT
Washington
KSR RELEASE/ l O T E M NEWSPAPERS,
Thursday, October 50, 1958
•

<" -Z> - ^

The Treasury Department, by this public notice, invites tenders for
$1,800,000,000

, or thereabouts, of

— ^ —

-day Treasury bills, for cash and

in exchange for Treasury bills maturing
November 6, 1958
, in the amount of
$1.700,012.000 , to be issued on a discount basis under competitive and noncompetitive bidding as hereinafter provided.
dated

November 6. 1958

, and will mature

amount will be payable without interest.

The bills of this series will be
February5f 1959

, when the face

They will be issued in bearer form only,

and in denominations of $1,000, $5,000, $10,000, $100,000, $500,000 and $1,000,000
(maturity value).
Tenders will be received at Federal Reserve Banks and Branches up to the
one-thirtyclosing hour,/*88 o'clock p.m., Eastern Standard time, Monday, November 5, 1958 .
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

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

TREASURY DEPARTMENT
WASHINGTON. D.C.

RELEASE A.M. NEWSPAPERS,
Thursday, October 30, 1958.
The Treasury Department, by this public notice, invites tenders
for $l,800,QO0,000, or thereabouts, of 91-day Treasury bills, for
cash and in exchange for Treasury bills maturing November 6, 1958,
in the amount of $1,700,012,000, to be issued on a discount basis
under competitive and non-competitive bidding as hereinafter
provided. ^The bills of this series will be dated November 6, 1958,
and will mature February 5, 1959, when the 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, $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, one-thirty o*clock p.m., Eastern Standard time,
Monday, November 3, 1958.
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.
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 such respect shall be
final. Subject to these reservations, non-competitive tenders for
accepted
$200,000 in
or full
less without
at the average
stated price from
(in three
any one
decimals)
bidder will
of accepted
be

- 2 competitive bids. Settlement for accepted tenders in accordance
with the bids must be made or completed at the Federal Reserve Bank
on November 6. 1958, in cash or other immediately available funds
or in a like face amount of Treasury bills maturing November 6, 1958.
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.
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 195^. 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 actuallyreceived 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. 4l8, Revised, 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.
0O0

fm «*gaata*tioiis wmh ms fmarm working to*
tmdsrataadiiig ay att eitiaoas of the pr&lmm of
government, insisting cm kasiaoaa-liko aetaoea la
governmental oaosatioaa meA cteaaadiag tax savings
wherever possible.

services no longer demanded by tho taxpayer•

While

tho goal la now one for tho future, we still must
strive for balanced budgets. Our Federal debt,
already of vast proportions, must ultimately he
reduced and that goal must he kept la sight.
I have mot painted an encouraging picture for
you who have for so long worked so eagerly for
reduction Is government*! spending and tax outs*
We must, however, recognise clearly the problems
which we confront. We roust he prepared, I believe,
to spend whatever funds loay he necessary for an
adequate defense, for proper research both for
military and peaceful purposes, for space exploration,
aad to meet dislocations caused by business conditions.
Having said thist however, I hasten to add that for
the longer range, there has never been greater need

BO greater contribution can he made to tho
strength of America than to turn bach to local
geveraaental units tho maxtaua nuaber of functions
which can he appropriately handled at a level closer
to tho people. Government is hoot effective, healthy
and representative whoa it Is carried oa under the
close scrutiny of Its eltiseas. I recoaaead the
work of the Joint Federal~State Action Coanittee to
your careful attention and support* le appreciate
the help which we have received and know,, will -.
continue to receive f roa the Coaaittoe of the
National tax Association in this area.
we do aeed to marshal all of oar forces ia
this country to sake sure that the funds are
available oa various goverwaoiital levels to do the
Job which governments aast do. we must be eoually
vigorous, however, to fight waste, unduly enlarged

- 33 -

iDl

Coanitt*. receaaaendatioa, when the mm system go«s
into- effect, %wmmmt grants for feoatieml fducatiea
and taste Treatment projects ami the related Federal
operating responsibility will cease.

are shifted. A comprehensive examination of the
Federal estate tax is also being undertaken
by a aaaaittee of experts to consider simplification t\.,-i
and possible increases In state credits.

~ 32 Internal Eeveaue Code to prwlde a tax credit for
a 5~year period against the local telephone service
tax for taxpayers ia states which enact a 3 percent
local telephone tax not otherwise on their statutes
prior to the adoption of this credit device. The
aaount of the credit would he 30 percent of the
Federal tax. This amounts to %% percentage points of
the present 10 percent tax. During tho 3<*year credit
period, a fund equal to 10 percent of the pimsat
Federal tax would he available for Federal grants to
certain states to achieve a greater measure of
equalization. At the end of the 5-year period the
Federal tax credit provision would expire and the
Federal tax on local telephone service would he
reduced froa 10 to 6 percent — a reduction of
m ©ereeat of the total Federal tax. Under the

1 O4
mm.y y

SI ~
turned bach to the statesto alios then to finance
t, be turned

aay, by
over to them.

a^id--#cti2^X~s^e^^

On the fiscal aide* tho Coraiaittee has already
arrived at full

on the prlaolptae «jat devils

of one significant proposal under which tho federal
t will mMm

awallalOs to the states a propertiea

of the Federal local tslspbeae tax in return for the
assuaption by the states of the Federal share of
financial responsibility for Vocational Education and
Waste Treatment Construction programs.
last aaata the

President and to the ^engross an

At its meeting
to the
to the

• w-

104

leal leadership is now

always with security

being provided ia- this important area by the Joint
i^derai-State Action Committee.

of tm® have

participated in the worh and activities of this
this Committee was established as a result of a
by President Eisenhower to the Governors
of all of our states at their conf

in Swm of

1S§?«
ts&a-gabtost, iacl
-or^Haro-^Treasury1'
1 officials, the
Committee has

real progress is its

seeking out governmental functions now being
in Washington which can better be performed by the
states*
now

At the

time it is

tax

by thm Federal government which can be

tar second guideline is that ia all areas* but
©articularly in non-defense and ia aw*4rw**aw**v areas,
we must etattaus tt-strive for ecomoar. We must
constantly insist that wherever possible the
individual be left the opportunity and respossibility
to do for himself those things which he can better
do than government. When it is concluded that
governmental assistance or activity ASS required, it
should, to the maximum extent feasible, be on the
municipal or state level.
1 sincerely believe that the greatest possibility
of securing major economy la governmental standing
in the next few years lies In controlling the else of
the Federal establlshaontf and limiting the functions
of our ever expanding Federal bureaucracy, consistent

- 28 ~
Instead of giving up, X believe that, with
as intelligent understanding of our probleas, tho
striving for economy and tax savings is acre
essential than ever.
We have some guide-lines at the Treasury.
We have aade it clear to those la this government
who are charged with the ultimate responsibility
for defease, research and scientific activities,
that no program which they believe, after study,
to be essential for the protection, security and
advancement cf the United States, should be
postponed, delayed or reduced because of
financial considerations. Once the American
people are satisfied that these programs are
necessary, that they have been properly researched
and analyzed, they will find the money needed
for such programs.

Jo?
•<<y f

learmiag more sad more about the uaiverae ia «Mch
we live* these expeaditeres for science and
research is the field of space travel and space
exploration, which cam only be carried out by
the Federal government, will require billions
of dollars in the decade ahead.
Quite clearly* those who appreciate, as you
do that every dollar spent by the Federal government
must be collected from the citizens of this country,
either ia this generation or la generations to COM,
are gravely concerned with the effects tremendous
demands for Federal spending have oa our private
enterprise system sad on the economy of America.
ateuld you now relax, recognize that unlimited
Federal spending may be inevitable, aad give up the
constant striving for economy sad tax savings?

Is^wUiitle*, ifhe budget for 1959 includes
increases of $2-1/2 billion for 1959 over 1958,
to be applied principally to accelerate tho missile
•i>rriniiT|flMm<nnJL niM^cfmajii^ £*£!& fi£l^@laa¥i£j&iftl& QUI? IMlCtXflAJr
XjpsnRpe^ajXjg^BBBjBjgiai ajr

uswnmsajuil

ajras

aw-ans "wssaa> sf»siw#raa

*w*mm* m\wtm*w*w,mw**mmm^

retaliatory power aad to advance military research

Xa the general field of research aad
development, it is significant that nearly one-half
of the nation's total expenditures for research and
development for both peaceful and military ends is
spent by the Federal government. Federal expenditures
directly appropriated for the conduct of research
aad development are estimated to be $3.4 billion
ia 1959.
We are, indeed, at the beginning of the apace
age, aad la the years ahead this country will continue
ia its place of leadership la exploring space aad

r.Q
w y

- at elements of
have been aad will continue to take far
one-half of every tax dollar*

this

constantly kept ia mind
undertaken

Federal level which followed
le field*
materially,

oa
as part of such

ly ia

the Administration
for fiscal 1958 of $X.3
billion ia
of Def (

;ding

authority fok the

The

aad appropriated the funds withNonly
tting vote*

- 24 before the military services actually achieve
operational capabilities with these weapons.
In fact, the cost of developing ballistic missiles
to an operational state will probably be a good
deal more than double the cost of developing
the first atomic bomb.

Ill

- as m the NXKS-AJAX.
«1» Je* aad rochet age has also imposed vastly

programs* Supersonic aircraft and rockets entail
complex problems of control and Instrumentation
which have multiplied the cost of experiaeatatioii.
High speeds require resosrcb on high temperature
materials and structures, greater .propulsive
power* high-speed centre! and guidance systems,
etc. Advanced aircraft require special weapons,
''WS.'B&f•Sfe"' ^H^w^wy^y^tf^WNS- ^^^WMwftwSpRw^Bfr !'wrtSfl|sj^SWraBFii*iit-^Kim*>-ty&rj^ •£ *^»™Pt** T*^ WWIIP'W'^PW pfcW'*'

count ermsj asures.
Wmy billions of dollars will have been
invested in the development of ballistic missiles
— the ATLAS, T1TAM, n»v JlfPIWt and P0LABX8 ~

-^ -

112

$4.7 million; during the Korean War, a coaveatioaai
type submarine cost about $22 million; the nuclear
submarines being built today cost twice as much,
about $45 million apiece, aad the first tares
Fleet Ballistic Missile (POLARIS) submarines,
will cost twice as much. The cost tread for
destroyers aad aircraft carriers has followed
the same general pattera.
The Amy, too, has not been immune from these
great increases ia the cost of new weapons, sa>
anti-aircraft battalion, equipped with the 91KS-AJA&,
costs about three times as such as a battalion
equipped with 90 mm or 120 am anti-aircraft guns
which they have now replaced. The NIKS-HBBCULES,
which is now replacing the KXKE-AJAX, is four tlaes
as big aad willlcost four times as much per missile

- 21 The complexity of high performance combat aircraft
may be measured by their coat pmr pound compared
with the cost of silver Jfhich is less thaa $15 p*r
pound.
The relation of performance, complexity aad
cost becomes more evident when specific aircraft
models of the same types are compared. The heavy
bomber at the sad of World War IX was the B-29
which cost about $690,000 each* This was replaced
in the early 1950*$ by the B-36 which cost about
$4 million each. This aircraft, ia turn, has beea
replaced by the all iet B~52 intercontinental
bomber, costing about $8 mi11ion each.
These startling increases ia unit costs of
weapons are not confined to aircraft. During
..or id War XI, the cost of a submarine was about

afloat. Both of those ships coaM be placed side by
side oa the flight deck of a Forrestai class carrier.
Y The aew weapons aad equipment, the products of
scieatific aad technologies! progress, are much more
powerful aad have much greater combat capability
than the items they are replacing but they also cost
a great dee! more.
This trend is clearly Illustrated by the cost
of aircraft, which still take about half the dollars
spent for major items of equipment.
During World War IX, for example, the cost of
aircraft averaged about $10 a pound. Baring the
Korean War the cost per pound averaged about $25.
The high performance airplanes now being delivered
cost $50 par pound. For the very high performance
aircraft to be delivered two or three years from
now, the cost pmr pound will probmbly run over $100.

lib'
- it ~
Tn tifftw-r wyHfr, fy-M.m«i dollars fa-le tl bliliua
wjP^ft-iartH M g h J « tn tha wvshiwwtsm Monument,

are spemdlag for our direct military buoget aloae more
than $1,000 every second la every day.
Here are a few facts which give some measure of
the magnitude of our problems
A B-17 was an important part of our fighting
machine in World War IX. Thousands af them were built.
However, if you took all of the eagiaeeriag man-hours
that mr® spent oa ail the B-17's aver built you still
would not. have enough eagiaeeriag man-hours to build
one of today's B~S3fs*
0o you realise the tremendous size at a Forrestal
class carrier? The S. S. Halted States aad the ». S.
America are the two largest American merchant ships

- IB Expenditures from 1954 through fiscal
of aircraft,

for

other major items of military equipment
$75 billion.

over

Our spending ia the two fiscal years

1957 and 1958 for all major national security
the dollar expenditures for such
programs during 1945, the year in tor Id War XX ia
which over half of all United States production
devoted to gaining victory.
These are tremendous sums; they are difficult to
^1 IrMMfrft <«.
q? $l-bJcMLloa»

, liere

measure.

tnaujjuai ±n fx9mm mils mm pis
#" high.
$1-^*44**11 in fi^n

Mum

A p - i ^ ^ th#m in m pi In,

117
- 17 Just a few short mouths ago there was
widespread concern created by the 1958 budget which,
as submitted, called for shading ia excess of
$7© billion.

Economy became popular.

3Bvea those

who a short time previously were supporting large
new Federal projects aad stepped-up speadiag for
defease- reversed their stands. Congressional .
committees were hard at work probing for areas in
which cuts could bo made. Pressures were being
built for tax cuts*

Some cJ=£he cuts made la

defease programs and defease expenditures for
fiscal 1958 were set at less than 1957.
However, even after all the economy efforts,
budget expenditures in fiscal year 195© for national
security were approximately $44 billion, or about
m

cents out of every dollar of revenue.

Il«
m 16 -

aoMstr as they treat other partners.

regulations don't wo*H, the Service sill
alternative but to move promptly to the
striageat positioa, which was represeated by
liae #~A which appeared oa the 1057 tax wtura m
which we all hope has been peraaaeatly put aside
fcr the new

rnrn^mm J4U>
l would: enjoy
discussing with you.

I give higher

preference however,^wrtua!ty which your meeting
gives, to discuss with you, as leaders la your
various coaauaities, the fiscal problems which we
mow face as a Nation, and which we will continue to
face in the months ahead.

113
- it ~
employee expense allowances. This ia aad of Itself
has caused dlssatisfactioa with American business
practices and with our' tax system. We all know
what is meant by the term f*expease account economyn.
When a few employers aad employees aggravate
an already difficult situation by obvious tax
dodges about which they are frequently so prmmd
that they make known their mew avenue of untaxable
benefits to others la their community, we have a
situation which is mot only unhappy for the Revenue
mrwi®®, but is also unfortunate for the moral fibre
of the people of this country.
In the expense account field we are trying an
approach which we believe is fairrand will.accuratelydo the Job. It will do it if employers aad employees
alike treat Uncle Sam with the same fairness aad

*m 14 ~
report lag, has beea Am- the revision aad sliapiiticatxon
of the reporting of expease account items. The
regulation receatly issued la final font contains,
X believe, clear cut directions telling mwm^f taxpayer
having an expense account what his record keeping
requirements are. The Service ia this area has taken
major steps to ease tho burden of. record .keeping aad.
reports for htandreds of thousands of taxpayers who
are. reimbursed, for their expeases by their employers.
In the .past, most of such taxpayers have fully aad
accurately reported their expeases aad have act
attempted to evade or avoid taac liability. However,
because of our extremoly high tax rates, pnifrUularly
Sa^he--u^er-4^aeigots> it has become standard practice
for corporate employers to be most liberal in

~ 13 observed that "We are so hmy -ia aopplag up that
nobody stops to turn off the faucet.**
We trust that you aad taxpayers throughout the
country will approve and, yes, be excited by two
major steps recently taken to simplify tax reporting.
Form 1040-A, which formerly could bo used only
for incomes under $5,000, has now been revised aad
may be used by employees with less thaa $10,000 of
SfcjS? mAwmmwS&w *m*wmi*&^m9WmW8Si!mft*w iw**m\miuwmiw WBss3wwfcs^aj>wai *jym%^&m&m*mw%mm*j*mw a, awaea^pav^vsaaavwitiiavaaia^

expansion in the use of this simplified card form.
Such result will not only make tax reporting easier
for the taxpayer, but will simplify aad make less
expeasive the handling of tax returns./
The other major contribution of the last few
months, having as its purpose the easing of tax

122
- 12 morale of our people has substaatially increased
aad our organisation has become more vigorous aad,
at the same time, more rospoasive to the things which
it can do effectively to carry out its responsibility
act as tax policy makers, but as tax collectors.
Fcr me there is excitement ia the fact that since
July 1st of this year, the-hard working people charged'
wr^rtiss^pis^^ ia the- Oervlcsand—w* the department have completed aad published
30 additional Treasury regulations, we are striving
hard to finish the lew remaining regulations under
the 1954 Code, such as natural resources, the election
of certain partnerships to be taxed as corporations,
and adjustments required by changes in methods of
accounting. I can describe to you as quite apt a
comment made by one person ia the Service who recently

1 •; v
«A, £, y

- xo recruiting these people and emphasising the value
of such service to people now engaged la private
practice,
aaay exciting things have been happening in the
Internal Eeveaue Service. Wader the able leadership
tm former Commissioner Harrington, the spirit and

<lext page is m*

12)

- t ~
Certified Public Accountant© to become active ia the
tax field and to undertake as a public service the
representation of small as well as large taxpayers*
We have a rather wistful hope, too, that there
can be some reciprocity ia the movement of men out
of the Internal Revenue Service late private practice.
We do regret losing excellent mmm. Offsetting our
regret is the fact that as more and more good mencgo'
from the Eeveaue Service into general practice, the
spirit of mutual cooperation aad understaadiag between
the tax collector aad the taxpayer increases to the
benefit of both croups.
However, we do tmmd more mem and women experienced
la private practice willing to give some of their
taieats to Federal service, even if for only a limited
period of time. We hope that you will help us ia

123
m m **
and. expense if the person who prepared his
return amy appear before the exaaiaiag officer or
revenue agent ia the Audit Division ia an office of
the District Director to represomt the taxpayer.
Cases involving relatively little tax or
relatively simple facts comprise the bulk of the
cases presented for disposition at the revenue
agent or examining officer level. It Am Am the
interests of the government and the taxpayer -alike
that every effort be made to complete reasonable
settlement of these tax controversies at the lowest
possible level and in the shortest possible time.
These two progressive steps should help. However, the aid aad assistance of lawyers aad Certified
Public Accountants will he ia as much demand as ever.
We hope that you will encourage' more lawyers and more

are closed at the revenue agent or examining officer
level aad less than a percent go oa to administrative
hearings. Thousands of persons — experienced public
accountants and others — today reader valuable service
to the government and to the public (even though not
enrolled to practice before the Treasury Department)
bif assisting taxpayers in the preparation of their
returns, ia many cases the taxpayer desires the
assistance of such a person in supplying factual
information or la explaining the return to an agent.
In many instances — for example, is the case of
wage earners who cannot take time off fro® their work
without losing wages, or the small businessman who
cannot leave his place of business without closing up
shop ~~ the taxpayer will be relieved of inconvenience

l<7
99 6 m

The second step will be to perait aay person who
prepares/a return for a taxpayer tt appear as the
taxpayers representative, with or without tat tax*
payer*s presence, before revenue agents aad examining
officers in the field audit or office audit braaches
in the offices of District Directors with respect to
the tax liability of the taxpayer, for the taxable year
or period covered by that return. All such persons
will be subject to rules regarding ethical practice,
the extent of their authority, and other matters. - They
will be permitted, within those limits, aad whoa
authorised by the taxpayer, to represent the taxpayer
without enrollment.
These proposed changes are expected to strengthen
materially the taxpayer assistance program of the
Internal levenue Service. Over §§ percent of all cases

• t for earellaent as lawyers, Certified Publie
Accountants, or former Internal Revenue Service
officers and employees* The examinations will be
prepared by the Service and will be given
simultaneously in all District Director's offices,
and will be graded 1sf the National Office.
In certain respects the new examinations will
not be as difficult as those presently given. %%my
will, however, be designed to test adequately the
technical competency of candidates to represent tax*
payers at all levels of the Service* Those who pass
these saw examinations will be enrolled as agents and
will receive a card permitting unlimited practice.
The first of such examinations will be given ia June
of next year.

i'2 q
«

•*••

IMs problem of representation is becoaiag
Increasiagly complicated. In the tea years from
1940 to 1956 the answer of Iiiceae tax returns
filed increased 100 peroeat, while the aumber of enrollees
holding Treasury Card® lacreased only 4 peroeat. During
these years the tax laws have continued to become
more and more complicated.
1 am pleased to be able to tell you tonight of
an announcement which will be made public tomorrow
moralag outlining two steps we propose to take ia
the Internal Revenue Service which we believe will
aid this situation. Vmdm the first change, the
examinations for admission to practice before the
Treasury Department are to be taken over by the
Revenue Service. The Service will give examinations
to properly qualified applicants who are not eligible

130
•

Although the making out of tax returns it not
considered by the treasury Department as practice
before the Depariaiemt, it is slgmifieaat that at a
time when over 61 aitlles Income tax returns are
filed by individuals,' corporations and other®, there
are only approxiiiatety ti,06t holders of Treasury
Cards. Over m percent of these earollees are
lawyers, and many lawyers enroll to handle a
particular' tax case and thereafter engage in little,
if any, tax practice. About 30,00® holders of cards
are Certified public Accountants, but most of these

Interested, by and large, in handling the personal
tax returns of the taxpayer with a limited income aad
a small tax.

\3i
m

% *m

Participation ia this program also enables me
to express to you the appreciation of the persoaael
of the Treasury Department aad of the Interna! Eeveaue
Service for the contribution which this national Tax

Association and other associations and groups Interest

in this field make toward a imrm effective and equitab
administration of the country's tax laws, state and
Federal, and to Improvements aad refinements in these
laws.
We are constantly heartened in Washington by the

support which we receive from your Association aad fro

the individual members thereof. This help should not be

minimized. In particular we solicit your continued hel

in the field of taxpayer education, and taxpayer assist
Today, many taxpayers^ unable to secure competent
assistance, accept advice and aid from those who are
not, in fact, skilled and qualified ia the field.

Remarks by Fred C. Scrlbaer, Jr*, Under
Secretary of the Treasury, at theaist
Annual Cooferoace on Taxation, sponsorea
by the National Tax Association, at the
Sheraton Hotel, Philadelphia, Paaasylwaala,
on October CO., last, 7:30 P. a.
<

I am grateful to you for feme thouglitful iavitatioa
to participate ia your Slst Annual Coafereace on
Taxation. I have often wondered how auch those of
. -.via •••••••

•

•.

us who come out from Washington can contribute to the
deliberations of a group of experts such as this. I
can assure you, however, that those of us who have the
present responsibility la Washington benefit ia very
great measure from an opportunity to meet with and
learn from those who, day to day in the tax aad
spending fields, are making the decisions which, in
total, have so much to do in determining the direction
in which this country and its individual states are
moving.

- 12 I have not painted an encouraging picture for you who
have for so long worked so eagerly for reduction in
governmental spending and tax cuts. We must, however,
recognize clearly the problems which we confront. We
must be prepared, I believe, to spend whatever funds may
be necessary for an adequate defense, for proper research
both for military and peaceful purposes, for space exploration,
and to meet dislocations caused by business conditions.
Having said this, however, I hasten to a$d that for the
longer range, there has never been greater need for
organizations such as yours working for understanding
by all citizens of the problems of government, insisting
on business-like methods in governmental operations and
demanding tax savings wherever possible.

oOo

- 11 -

-: '.M
.<m <y "':

its meeting last month the Committee agreed to recommend to
the President and to the Congress an amendment to the
Internal Revenue Code to provide a tax credit for a 5-year
period against the local telephone service tax for taxpayers
in states which enact a 3 percent local telephone tax not
otherwise on their statutes prior to the adoption of this
credit device. The amount of the credit would be 30 percent
of the Federal tax. This amounts to 3 percentage points
of the present 10 percent tax. During the 5-year credit
period, a fund equal to 10 percent of the present Federal
tax would be available for Federal grants to certain states
to achieve a greater measure of equalization. At the end
of the 5-year period the Federal tax credit provision would
expire and the Federal tax on local telephone service would
be reduced from 10 to 6 percent — a reduction of 40 percent
of the total Federal tax. Under the Committee recommendation,
when the new system goes into effect, present grants for
Vocational Education and Waste Treatment projects and the
related Federal operating responsibility will cease.
Other miscellaneous excise taxes will be considered
for relinquishment, as additional functions are shifted. A
comprehensive examination of the Federal estate tax is also
being undertaken by a committee of experts to consider
simplification and possible increases in state credits.
No greater contribution can be made to the strength
of America than to turn back to local governmental units
the maximum number of functions which can be appropriately
handled at a level closer to the people. Government is kept
effective, healthy and representative when it is carried on
under the close scrutiny of its citizens. I recommend the
work of the Joint Federal-State Action Committee to your
careful attention and support. We appreciate the help
which we have received and know we will continue to receive
from the Committee of the National Tax Association in this
area.
We do need to marshal all of our forces in this country
to make sure that the funds are available on various
governmental levels to do the job which governments must
do. We must be equally vigorous, however, to fight waste,
unduly enlarged payrolls and tendencies to continue
governmental services no longer demanded by the taxpayer.
While the goal is now one for the future, we still must
strive for balanced budgets. Our Federal debt, already
of vast proportions, must ultimately be reduced and that
goal must be kept in sight.

nr. y *m*

- 10 after study, to be essential for the protection, security
and advancement of the United States, should be postponed,
delayed or reduced because of financial considerations.
Once the American people are satisfied that these programs
are necessary, that they have been properly researched and
analyzed, they will find the money needed for such programs.
Our second guideline is that in all areas, but
particularly in non-defense and in non-research areas, we
must continue to strive for economy. We must constantly
insist that wherever possible the individual be left the
opportunity and responsibility to do for himself those
things which he can better do than government. When it is
concluded that governmental assistance or activity is
required, it should, to the maximum extent feasible, be
on the municipal or state level.
I sincerely believe that the greatest possibility of
securing major economy in governmental spending in the next
few years lies in controlling the size of the Federal
establishment, and limiting the functions of our ever
expanding Federal bureaucracy, consistent always with
security needs. Real leadership is now being provided in
this important area by the Joint Federal-State Action
Committee. Some of you have participated in the work and
activities of this group.
This Committee was established as a result of a proposal
made by President Eisenhower to the Governors of all of our
states at their conference in June of 1957. The Committee
has made real progress in its work of seeking out' governmental
functions now being performed in Washington which can better
be performed by the states. At the same time it is seeking
tax sources now pre-empted by the Federal government which
can be turned back to the states to allow them to finance
such Federal programs as may, by agreement, be turned over
to them.
On the fiscal side, the Committee has already arrived
at full agreement on the principles and details of one
significant proposal under which the Federal government will
make available to the states a proportion of the Federal local
telephone tax in return for the assumption by the states of
the Federal share of financial responsibility for Vocational
Education and Waste Treatment Construction programs. At

- 9Expenditures for various elements of defense have been
and will continue to take far more than one-half of every
tax dollar. This must be constantly kept in mind when
discussions are undertaken concerning a reduction of Federal
expenditures.
The budget for 1959 includes increases of $2-1/2 billion
for 1959 over 1958, to be applied principally to accelerate
the missile procurement program, to strengthen our nuclear
retaliatory power and to advance military research and
development programs.
In the general field of research and development, it is
significant that nearly one-half of the nation's total
expenditures for research and development for both peaceful
and military ends is spent by the Federal government. Federal
expenditures directly appropriated for the conduct of research
and development are estimated to be $3.4 billion in 1959.
We are, indeed, at the beginning of the space age, and
in the years ahead this country will continue in its place
of leadership in exploring space and learning more and more
about the universe in which we live. These expenditures
for science and research in the field of spaee travel and
space exploration, which can only be carried out by the
Federal government, will require billions of dollars in the
decade ahead.
Quite clearly, those who appreciate, as you do, that
every dollar spent by the Federal government must be collected
from the citizens of this country, either in this generation
or in generations to come, are gravely concerned with the
effects tremendous demands for Federal spending have on our
private enterprise system and on the economy of America.
Should you now relax, recognize that unlimited Federal
spending may be inevitable, and give up the constant striving
for economy and tax savings?
Instead of giving up, I believe that, with an intelligent
understanding of our problems, the striving for economy and
tax savings is more essential than ever.
We have some guidelines at the Treasury. We have made
it clear to those in this government who are charged with
the ultimate responsibility for defense, research and
scientific activities, that no program which they believe,

- 9-

The budget for 1959 includes increases of $2-1/2 billion
for 1959 over 1958, to be applied principally to accelerate
the missile procurement program, to strengthen our nuclear
retaliatory power and to advance military research and
development programs.
In the general field of research and development, it is
significant that nearly one-half of the nation's total
expenditures for research and development for both peaceful
and military ends is spent by the Federal government. Federal
expenditures directly appropriated for the conduct of research
and development are estimated to be $3.4 billion in 1959.
We are, indeed, at the beginning of the space age, and
in the years ahead this country will continue in its place
of leadership in exploring space and learning more and more
about the universe in which we live. These expenditures
for science and research in the field of space travel and
space exploration, which can only be carried out by the
Federal government, will require billions of dollars in the
decade ahead.
Quite clearly, those who appreciate, as you do, that
every dollar spent by the Federal government must be collected
from the citizens of this country, either in this generation
or in generations to come, are gravely concerned with the
effects tremendous demands for Federal spending have on our
private enterprise system and on the economy of America.
Should you now relax, recognize that unlimited Federal
spending may be inevitable, and give up the constant striving
for economy and tax savings?
Instead of giving up, I believe that, with an intelligent
understanding of our problems, the striving for economy and
tax savings is more essential than ever.
We have some guidelines at the Treasury. We have made
it clear to those in this government who are charged with
the ultimate responsibility for defense, research and
scientific activities, that no program which they believe,

JL y ;

- 8The Army, too, has not been immune from these
great increases in the cost of new weapons. An
anti-aircraft battalion, equipped with the NIKE-AJAX,
costs about three times as much as a battalion
equipped with 90 mm or 120 mm anti-aircraft guns
which they have now replaced. The NIKE-HERCULES,
which is now replacing the NIKE-AJAX, is four times
as big and will cost four times as much per missile
as the NIKE-AJAX.
The jet and rocket age has also imposed vastly
increased demands upon our research and development
programs. Supersonic aircraft and rockets entail
complex problems of control and instrumentation
which have multiplied the cost of experimentation.
High speeds require research on high temperature
materials and structures, greater propulsive power,
high-speed control and guidance systems, etc .
Advanced aircraft require special weapons, allweather combat capability, more accurate bombing
and fire control, and electronic countemeasures.
Many billions of dollars will have been
invested In the development of ballistic missiles —
the ATLAS, TITAN, THOR, JUPITER AND POLARIS —
before the military services actually achieve
operational capabilities with these weapons.
In fact, the cost of developing ballistic missiles
to an operational state will probably be a good
deal more than double the cost of developing the
first atomic bomb.
Expenditures for various elements of defense
have been and will continue to take far more than
one-half of every tax dollar. This must be constantly
kept m mind when discussions are undertaken concerning a reduction of Federal expenditures

- 7The new weapons and equipment, the products of
scientific and technological progress, are much more
powerful and have much greater combat capability than tti
Items they are replacing but they also cost a great
deal more.
This trend is clearly illustrated by the cost
of aircraft, which still take about half the dollars
spent for major items of equipment.
During World War II, for example, the cost of
aircraft averaged about $10 a pound. During the Korean
War the cost per pound averaged about $25. The
high performance airplanes now being delivered cost
$50 per pound. For the very high performance aircraft to be delivered two or three years from now,
the cost per pound will probably run over $100.
The complexity of high performance combat aircraft may
be measured by their cost per pound compared with the
cost of silver which is less than $15 per pound.
The relation of performance, complexity and
cost becomes more evident when specific aircraft models
of the same types are compared. The heavy bomber
at the end of World War II was the B-29 which cost
about $600,000 each. This was replaced in the early
1950's by the B-36 which cost about $4 million each.
This aircraft, in turn, has been replaced by the all jet
B-§2 intercontinental bomber, costing about $8 million
each.
These startling increases in unit costs of
weapons are not confined to aircraft. During World
War II, the cost of a submarine was about $4.7
million; during the Korean War, a conventional type
submarine cost about $22 million; the nuclear submarines
being built today cost twice as much, about $45 million
apiece, and the first three Fleet Ballistic Missile
(POLARIS) submarines, will cost twice as much. The cost
trend for destroyers and aircraft carriers has followed
the same general pattern.

- 6 -

•"""

Just a few short months ago there was widespread
concern created by the 1958 budget which, as submitted,
called for spending in excess of $70 billion. Economy
became popular. Even those who a short time previously
were supporting large new Federal projects and stepped-up
spending for defense reversed their stands. Congressional
committees were hard at work probing for areas in which
cuts could be made. Pressures were being built for tax cuts.
Some cuts were made in defense programs and defense
expenditures for fiscal 1958 were set at less than 1957.
However, even after all the economy efforts, budget
expenditures in fiscal year 1958 for national security
were approximately $44 billion, or about 60 cents out of
every dollar of revenue.
Expenditures from 1954 through fiscal 1958 for
procurement of aircraft, missiles, ships and other major
items of military equipment were over $75 billion. Our
spending in the two fiscal years 1957 and 1958 for all
major national security programs exceeded the dollar
expenditures for such programs during 1945* the year in
World War II in which over half of all United States
production was devoted to gaining victory.
These are tremendous sums; they are difficult to
comprehend. Here is one measure. We are spending for
our direct military budget alone more than $1,000 every
second in every day.
Here are a few facts which give some measure of the
magnitude of our problem:
A B-17 was an important part of our fighting machine
in World War II. Thousands of them were built. However,
if you took all of the engineering man-hours that were
spent on all the B-17's ever built you still would not
have enough engineering man-hours to build one of today's
B-52's.
Do you realize the tremendous size of a Forrestal class
carrier? The S. S. United States and the S. S. America are
the two largest American merchant ships afloat. Both of
these ships could be placed side by side on the flight deck
of a Forrestal class carrier.

- 5The other major contribution of the last few months,
having as its purpose the easing of tax reporting, has
been in the revision and simplification of the reporting
of expense account items. The regulation recently issued
in final form contains, I believe, clear cut directions
telling every taxpayer having an expense account what his
record keeping requirements are. The Service in this
area has taken major steps to ease the burden of record
keeping and reports for hundreds of thousands of taxpayers who are reimbursed for their expenses by their
employers. In the past, most of such taxpayers have
fully and accurately reported their expenses and have not
attempted to evade or avoid tax liability. However,
because of our extremely high tax rates, it has become
standard practice for corporate employers to be most
liberal in employee expense allowances. This in and of
itself has caused dissatisfaction with American business
practices and with our tax system. We all know what
is meant by the term "expense account economy".
When a few employers and employees aggravate an
already difficult situation by obvious tax dodges
about which they are frequently so proud that they make
known their new avenue of untaxable benefits to others
in their community, we have a situation which is not
only unhappy for the Revenue Service, but is also
unfortunate for the moral fibre of the people of this
country.
In the expense account field we are trying an
approach which we believe is fair and will do the job.
It will do it if employers and employees alike treat
Uncle Sam with the same fairness and honesty as they treat
other partners. If the new regulations don't work, the
Service will have no alternative but to move promptly to
the much more stringent position, which was represented
by line 6-A which appeared on the 1957 tax return and
which we all hope has been permanently put aside for the
new approach.
There are many other developments in the tax field
which I would enjoy discussing with you. I give higher
preference however, to the opportunity which your meeting
gives, to discuss with you, as leaders in your various
communities, the fiscal problems which we now face as
a Nation, and which we will continue to face in the months
ahead.

- 4-

**.

We do regret losing excellent men. Offsetting our regret
Is the fact that as more and more good men go from the
Revenue Service into general practice, the spirit of
mutual cooperation and understanding between the tax
collector and the taxpayer increases to the benefit of
both groups.
However, we do need more men and women experienced
in private practice willing to give some of their
talents to Federal service, even if for only a limited
period of time. We hope that you will help us in
recruiting these people and emphasizing the value of
such service to people now engaged in private practice.
Many exciting things have been happening in the
Internal Revenue Service. Under the able leadership
of former Commissioner Harrington, the spirit and morale
of our people has substantially increased and our
organization has become more vigorous and, at the same
time, more responsive to the things which it can do
effectively to carry out its responsibility not as tax
policy makers, but as tax collectors.
For me there is excitement in the fact that since
July 1st of this year, the Department has completed and
published 30 additional Treasury regulations. We are
striving hard to finish the few remaining regulations
under the 1954 Code, such as natural resources, the election
of certain partnerships to be taxed as corporations,
and adjustments required by changes In methods of
accounting. I can describe to you as quite apt a comment
made by one person in the Service who recently observed
that "We are so busy in mopping up that nobody stops
to turn off the faucet."
We trust that you and taxpayers throughout the
country will approve and, yes, be excited by two major
steps recently taken to simplify tax reporting.
Form 1040-A, which formerly could be used only
for incomes under $5,000, has now been revised and may
be used by employees with less than $10,000 of gross
income. This should produce a substantial expansion in
the use of this simplified card form. Such result will
not only make tax reporting easier for the taxpayer, but
will simplify and make less expensive the handling of tax
returns.

- 3regarding ethical practice, the extent of their authority,
and other matters. They will be permitted, within those
limits, and when authorized by the taxpayer, to represent
the taxpayer without enrollment.
These proposed changes are expected to strengthen
materially the taxpayer assistance program of the
Internal Revenue Service. Over 98 percent of all cases
are closed at the revenue agent or examining officer
level and less than 2 percent go on to administrative
hearings. Thousands of persons -- experienced public
accountants and others — today render valuable service
to the Government and to the public (even though not
enrolled to practice before the Treasury Department)
by assisting taxpayers in the preparation of their
returns. In many cases the taxpayer desires the
assistance of such a person in supplying factual information or in explaining the return to an agent.
In many instances — for example, in the case of
wage earners who cannot take time off from their work
without losing wages, or the small businessman who
cannot leave his place of business without closing up
shop — the taxpayer will be relieved of inconvenience
and expense if the person who prepared his return may
appear before the examining officer or revenue agent in
the Audit Division in an office of the District Director
to represent the taxpayer.
Cases involving relatively little tax or relatively
simple facts comprise the bulk of the cases presented
for disposition at the revenue agent or examining officer
level. It is in the interests of the government and the
taxpayer alike that every effort be made to complete
reasonable settlement of these tax controversies at the
lowest possible level and in the shortest possible time.
These two progressive steps should help. However,
the aid and assistance of lawyers and Certified Public
Accountants will be in as much demand as ever. We hope
that you will encourage more lawyers and more Certified
Public Accountants to become active in the tax field and
to undertake as a public service the representation of
small as well as large taxpayers.
We have a rather wistful hope, too, that there can
be some reciprocity in the movement of men out of the
Internal Revenue Service into private practice.

-v

/->,

- 2 corporations and others, there are only approximately
81,000 holders of Treasury Cards. Over 60 percent of
these enrollees are lawyers, and many lawyers enroll to
handle a particular tax case and thereafter engage in
little, if any, tax practice. About 30,000 holders of
cards are Certified Public Accountants, but most of these
have much more work than they can handle and are not
interested, by and large, in handling the personal tax
returns of the taxpayer with a limited income and a
small tax.
This problem of representation is becoming increasingly
complicated. In the ten years from 1946 to 1956 the number
of income tax returns filed increased 100 percent, while
the number of enrollees holding Treasury Cards increased
only 4 percent. During these years the tax laws have
continued to become more and more complicated.
I am pleased to be able to tell you tonight of
an announcement which will be made public tomorrow morning
outlining two steps we propose to take in the Internal
Revenue Service which we believe will aid this situation.
Under the first change, the examinations for admission to
practice before the Treasury Department are to be taken
over by the Revenue Service. The Service will give
examinations to properly qualified applicants who are not
eligible for enrollment as lawyers, Certified Public
Accountants, or former Internal Revenue Service officers
and employees. The examinations will be prepared by the
Service and will be given simultaneously in all District
Director's offices, and will be graded by the National
Office.
In certain respects the new examinations will not
be as difficult as those presently given. They will,
however, be designed to test adequately the technical
competency of candidates to represent taxpayers at all
levels of the Service. Those who pass these new
examinations will be enrolled as agents and will receive
a card permitting unlimited practice. The first of such
examinations will be given in June of next year.
The second step will be to permit any person who
prepares a return for a taxpayer to appear as the
taxpayer's representative, with or without the taxpayer's
presence, before revenue agents and examining officers
in the field audit or office audit branches in the offices
of
respect
the
taxcovered
liability
theDistrict
that
taxpayer,
return.Directors
All
for the
suchwith
taxable
persons
year
willto
or
beperiod
subject
to rules
by of

TREASURY DEPARTMENT
Washington

144

REMARKS BY FRED C. SCRIBNER, JR.,
UNDER SECRETARY OF THE TREASURY, AT THE
51ST ANNUAL CONFERENCE ON TAXATION,
SPONSORED BY THE NATIONAL TAX ASSOCIATION,
AT THE SHERATON HOTEL, PHILADELPHIA,
PENNSYLVANIA, ON OCTOBER 30, 1958,
7:30 P.M.
I am grateful to you for your thoughtful invitation
to participate in your 51st Annual Conference on Taxation.
I have often wondered how much those of us who come out
from Washington can contribute to the deliberations of a
group of experts such as this. I can assure you, however, that those of us who have the present responsibility
in Washington benefit in very great measure from an
opportunity to meet with and learn from those who, day to
day in the tax and spending fields, are making the
decisions which, in total, have so much to do in
determining the direction in which this country and its
individual states are moving.
Participation in this program also enables me
to express to you the appreciation of the personnel of the
Treasury Department and of the Internal Revenue Service
for the contribution which this National Tax Association
and other associations and groups interested in this
field make toward a more effective and equitable
administration of the country's tax laws, state and Federal,
and to improvements and refinements in these laws.
We are constantly heartened in Washington by the
support which we receive from your Association and from
the Individual members thereof. This help should not be
minimized. In particular we solicit your continued help
in the field of taxpayer education, and taxpayer assistance.
Today, many taxpayers, unable to secure competent
assistance, accept advice and aid from those who are
not, in fact, skilled and qualified in the field.
Although the making out of tax returns is not
considered by the Treasury Department as practice before
the Department, it is significant that at a time when
A-356
over 6l million income tax returns are filed by individuals,

14$
TREASURY DEPARTMENT
Washington
REMARKS BY FRED C. SCRIBNER, JR.,
UNDER SECRETARY OF THE TREASURY, AT THE
51ST ANNUAL CONFERENCE ON TAXATION,
SPONSORED BY THE NATIONAL TAX ASSOCIATION,
AT THE SHERATON HOTEL, PHILADELPHIA,
PENNSYLVANIA,ON OCTOBER 30, 1958,
7:30 P.M.
I am grateful to you for your thoughtful invitation
to participate in your 51st Annual Conference on Taxation.
I have often wondered how much those of us who come out
from Washington can contribute to the deliberations of a
group of experts such as this. I can assure you, however, that those of us who have the present responsibility
in Washington benefit in very great measure from an
opportunity to meet with and learn from those who, day to
day in the tax and spending fields, are making the
decisions which, in total, have so much to do in
determining the direction in which this country and its
individual states are moving.
Participation in this program also enables me
to express to you the appreciation of the personnel of the
Treasury Department and of the Internal Revenue Service.
for the contribution which this National Tax Association
and other associations and groups Interested in this
field make toward a more effective and equitable
administration of the country's tax laws, state and Federal,
and to improvements and refinements in these laws.
We are constantly heartened in Washington by the
support which we receive from your Association and from
the Individual members thereof. This help should not be
minimized. In particular we solicit your continued help
in the field of taxpayer education, and taxpayer assistance.
Today, many taxpayers, unable to secure competent
assistance, accept advice and aid from those who are
not, in fact, skilled and qualified in the field.
Although the making out of tax returns is not
considered by the Treasury Department as practice before
the Department, it is significant that at a time when
A-356
over 6l million Income tax returns are filed by individuals,

- 2 corporations and others, there are only approximately
81,000 holders of Treasury Cards. Over 60 percent of
these enrollees are lawyers, and many lawyers enroll to
handle a particular tax case and thereafter engage in
little, if any, tax practice. About 30,000 holders of
cards are Certified Public Accountants, but most of these
have much more work than they can handle and are not
interested, by and large, in handling the personal tax
returns of the taxpayer with a limited income and a
small tax.
This problem of representation is becoming increasingly
complicated. In the ten years from 1946 to 1956 the number
of income tax returns filed increased 100 percent, while
the number of enrollees holding Treasury Cards increased
only 4 percent. During these years the tax laws have
continued to become more and more complicated.
I am pleased to be able to tell you tonight of
an announcement which will be made public tomorrow morning
outlining two steps we propose to take in the Internal
Revenue Service which we believe will aid this situation.
Under the first change, the examinations for admission to
practice before the Treasury Department are to be taken
over by the Revenue Service. The Service will give
examinations to properly qualified applicants who are not
eligible for enrollment as lawyers, Certified Public
Accountants, or former Internal Revenue Service officers
and employees. The examinations will be prepared by the
Service and will be given simultaneously in all District
Director's offices, and will be graded by the National
Office.
In certain respects the new examinations will not
be as difficult as those presently given. They will,
however, be designed to test adequately the technical
competency of candidates to represent taxpayers at all
levels of the Service. Those who pass these new
examinations will be enrolled as agents and will receive
a card permitting unlimited practice. The first of such
examinations will be given In June of next year.
The second step will be to permit any person who
prepares a return for a taxpayer to appear as the
taxpayer's representative, with or without the taxpayer's
presence, before revenue agents and examining officers
in the field audit or office audit branches In the offices
of District
the
that
taxpayer,
return.Directors
All
for the
suchwith
taxable
persons
respect
year
willor
to
beperiod
the
subject
taxcovered
liability
to rules
by of

A*m

147
- 3regarding ethical practice, the extent of their authority,
and other matters. They will be permitted, within those
limits, and when authorized by the taxpayer, to represent
the taxpayer without enrollment.
These proposed changes are expected to strengthen
materially the taxpayer assistance program of the
Internal Revenue Service. Over 98 percent of all cases
are closed at the revenue agent or examining officer
level and less than 2 percent go on to administrative
hearings. Thousands of persons — experienced public
accountants and others — today render valuable service
to the Government and to the public (even though not
enrolled to practice before the Treasury Department)
by assisting taxpayers in the preparation of their
returns. In many cases the taxpayer desires the
assistance of such a person in supplying factual information or in explaining the return to an agent.
In many instances -- for example, in the case of
wage earners who cannot take time off from their work
without losing wages, or the small businessman who
cannot leave his place of business without closing up
shop — the taxpayer will be relieved of inconvenience
and expense if the person who prepared his return may
appear before the examining officer or revenue agent in
the Audit Division in an office of the District Director
to represent the taxpayer.
Cases involving relatively little tax or relatively
simple facts comprise the bulk of the cases presented
for disposition at the revenue agent or examining officer
level. It is in the interests of the government and the
taxpayer alike that every effort be made to complete
reasonable settlement of these tax controversies at the
lowest possible level and in the shortest possible time.
These two progressive steps should help. However,
the aid and assistance of lawyers and Certified Public
Accountants will be in as much demand as ever. We hope
that you will encourage more lawyers and more Certified
Public Accountants to become active in the tax field and
to undertake as a public service the representation of
small as well as large taxpayers.
We have a rather wistful hope, too, that there can
be some reciprocity in the movement of men out of the
Internal Revenue Service into private practice.

- 4-

143

We do regret losing excellent men. Offsetting our regret
is the fact that as more and more good men go from the
Revenue Service into general practice, the spirit of
mutual cooperation and understanding between the tax
collector and the taxpayer increases to the benefit of
both groups.
However, we do need more men and women experienced
in private practice willing to give some of their
talents to Federal service, even if for only a limited
period of time. We hope that you will help us in
recruiting these people and emphasizing the value of
such service to people now engaged in private practice.
Many exciting things have been happening in the
Internal Revenue Service. Under the able leadership
for former Commissioner Harrington, the spirit and morale
of our people has substantially increased and our
organization has become more vigorous and, at the same
time, more responsive to the things which it can do
effectively to carry out its responsibility not as tax
policy makers, but as tax collectors.
For me there is excitement in the fact that since
July 1st of this year, the Department has completed and
published 30 additional Treasury regulations. We are
striving hard to finish the few remaining regulations
under the 1954 Code, such as natural resources, the election
of certain partnerships to be taxed as corporations,
and adjustments required by changes In methods of
accounting. I can describe to you as quite apt a comment
made by one person in the Service who recently observed
that "We are so busy in mopping up that nobody stops
to turn off the faucet."
We trust that you and taxpayers throughout the
country will approve and, yes, be excited by two major
steps recently taken to simplify tax reporting.
Form 1040-A, which formerly could be used only
for incomes under $5,000, has now been revised and may
be used by employees with less than $10,000 of gross
income. This should produce a substantial expansion in
the use of this simplified card form. Such result will
not only make tax reporting easier for the taxpayer, but
will simplify and make less expensive the handling of tax
returns.

5 -

143

The other major contribution of the last few months,
having as its purpose the easing of tax reporting, has
been in the revision and simplification of the reporting
of expense account items. The regulation recently issued
in final form contains, I believe, clear cut directions
telling every taxpayer having an expense account what his
record keeping requirements are. The Service in this
area has taken major steps to ease the burden of record
keeping and reports for hundreds of thousands of taxpayers who are reimbursed for their expenses by their
employers. In the past, most of such taxpayers have
fully and accurately reported their expenses and have not
attempted to evade or avoid tax liability. However,
because of our extremely high tax rates, it has become
standard practice for corporate employers to be most
liberal in employee expense allowances. This in and of
itself has caused dissatisfaction with American business
practices and with our tax system. We all know what
is meant by the term "expense account economy".
When a few employers and employees aggravate an
already difficult situation by obvious tax dodges
about which they are frequently so proud that they make
known their new avenue of untaxable benefits to others
in their community, we have a situation which is not
only unhappy for the Revenue Service, but is also
unfortunate for the moral fibre of the people of this
country.
In the expense account field we are trying an
approach which we believe is fajr and will do the job.
It will do it if employers and employees alike treat
Uncle Sam with the same fairness and honesty as they treat
other partners. If the new regulations don't work, the
Service will have no alternative but to move promptly to
the much more stringent position, which was represented
by line 6-A which appeared on the 1957 tax return and
which we all hope has been permanently put aside for the
new approach.
There are many other developments in the tax field
which I would enjoy discussing with you. I give higher
preference however, to the opportunity which your meeting
gives, to discuss with you, as leaders in your various
communities, the fiscal problems which we now face as
a Nation, and which we will continue to face in the months
ahead.

Just a few short months ago there was widespread
concern created by the 1958 budget which, as submitted,
called for spending in excess of $70 billion. Economy
became popular. Even those who a short time previously
were supporting large new Federal projects and stepped-up
spending for defense reversed their stands. Congressional
committees were hard at work probing for areas in which
cuts could be made. Pressures were being built for tax
cuts. Some cuts made in defense programs and defense
expenditures for fiscal 1958 were set at less than 1957.
However, even after all the economy efforts, budget
expenditures in fiscal year 1958 for national security
were approximately $44 billion, or about 60 cents out of
every dollar of revenue.
Expenditures from 1954 through fiscal 1958 for
procurement of aircraft, missiles, ships and other major
items of military equipment were over $75 billion. Our
spending in the two fiscal years 1957 and 1958 for all
major national security programs exceeded the dollar
expenditures for such programs during 1945, the year in
World War II in which over half of all United States
production was devoted to gaining victory.
These are tremendous sums; they are difficult to
comprehend. Here is one measure. We are spending for
our direct military budget alone more than $1,000 every
second in every day.
Here are a few facts which give some measure of the
magnitude of our problem:
A B-17 was an important part of our fighting machine
in World War II. Thousands of them were built. However,
if you took all of the engineering man-hours that were
spent on all the B-17's ever built you still would not
have enough engineering man-hours to build one of today's
B-52's.
Do you realize the tremendous size of a Forrestal class
carrier? The S. S. United States and the S. S. America are
the two largest American merchant ships afloat. Both of
these ships could be placed side by side on the flight deck
of a Forrestal class carrier.

- 7-

1^1

The new weapons and equipment, the products of
scientific and technological progress, are much more
powerful and have much greater combat capability than the
items they are replacing but they also cost a great
deal more.
This trend is clearly illustrated by the cost
of aircraft, which still take about half the dollars
spent for major items of equipment.
During World War II, for example, the cost of
aircraft averaged about $10 a pound. During the Korean
War the cost per pound averaged about $25. The
high performance airplanes now being delivered cost
$50 per pound. For the very high performance aircraft to be delivered two or three years from now,
the cost per pound will probably run over $100.
The complexity of high performance combat aircraft may
be measured by their cost per pound compared with the
cost of silver which is less than $15 per pound.
The relation of performance, complexity and
cost becomes more evident when specific aircraft models
of the same types are compared. The heavy bomber
at the end of World War II was the B-29 which cost
about $600,000 each. This was replaced in the early
1950»s by the- B-36 which cost about $4 million each.
This aircraft, in turn, has been replaced by the all jet
B-52 intercontinental bomber, costing about $8 million
each.
These startling increases in unit costs of
weapons are not confined to aircraft. During World
War II, the cost of a submarine was about $4.7
million; during the Korean War, a conventional type
submarine cost about $22 million; the nuclear submarines
being built today cost twice as much, about $45 million
apiece, and the first three Fleet Ballistic Missile
(POLARIS) submarines, will cost twice as much. The cost
trend for destroyers and aircraft carriers has followed
the same general pattern.

-c2
- 8-

The Army, too, has not been immune from these
great increases in the cost of new weapons. An
anti-aircraft battalion, equipped with the NIKE-AJAX,
costs about three times as much as a battalion
equipped with 90 mm or 120 mm anti-aircraft guns
which they have now replaced. The NIKE-HERCULES,
which is now replacing the NIKE-AJAX, is four times
as big and will cost four times as much per missile
as the NIKE-AJAX.
The jet and rocket age has also imposed vastly
increased demands upon our research and development
programs. Supersonic aircraft and rockets entail
complex problems of control and instrumentation
which have multiplied the cost of experimentation.
High speeds require research on high temperature
materials and structures, greater propulsive power,
high-speed control and guidance systems, etc.
Advanced aircraft require special weapons, allweather combat capability, more accurate bombing
and fire control, and electronic countemeasures.
Many billions of dollars will have been
invested In the development of ballistic missiles -the ATLAS, TITAN, THOR, JUPITER AND POLARIS -before the military services actually achieve
operational capabilities with these weapons.
In fact, the cost of developing ballistic missiles
to an operational state will probably be a good
deal more than double the cost of developing the
first atomic bomb.
Expenditures for various elements of defense
have been and will continue to take far more than
one-half of every tax dollar. This must be constantly
kept in mind when discussions are undertaken concerning a reduction of Federal expenditures.

-*• «^ y

- 9-

The budget for 1959 includes increases of $2-1/2 billion
for 1959 over 1958, to be applied principally to accelerate
the missile procurement program, to strengthen our nuclear
retaliatory power and to advance military research and
development programs.
In the general field of research and development, It is
significant that nearly one-half of the nation's total
expenditures for research and development for both peaceful
and military ends is spent by the Federal government. Federal
expenditures directly appropriated for the conduct of research
and development are estimated to be $3.4 billion in 1959.
We are, indeed, at the beginning of the space age, and
in the years ahead this country will continue in its place
of leadership in exploring space and learning more and more
about the universe in which we live. These expenditures
for science and research in the field of space travel and
space exploration, which can only be carried out by the
Federal government, will require billions of dollars in the
decade ahead.
Quite clearly, those who appreciate, as you do, that
every dollar spent by the Federal government must be collected
from the citizens of this country, either in this generation
or in generations to come, are gravely concerned with the
effects tremendous demands for Federal spending have on our
private enterprise system and on the economy of America.
Should you now relax, recognize that unlimited Federal
spending may be inevitable, and give up the constant striving
for economy and tax savings?
Instead of giving up, I believe that, with an intelligent
understanding of our problems, the striving for economy and
tax savings is more essential than ever.
We have some guidelines at the Treasury. We have made
it clear to those In this government who are charged with
the ultimate responsibility for defense, research and
scientific activities, that no program which they believe,

- 10 after study, to be essential for the protection, security
and advancement of the United States, should be postponed,
delayed or reduced because of financial considerations.
Once the American people are satisfied that these programs
are necessary, that they have been properly researched and
analyzed, they will find the money needed for such programs.
Our second guideline is that in all areas, but
particularly in non-defense and in non-research areas, we
must continue to strive for economy. We must constantly
insist that wherever possible the individual be left the
opportunity and responsibility to do for himself those
things which he can better do than government. When it is
concluded that governmental assistance or activity is
required, it should, to the maximum extent feasible, be
on the municipal or state level.
I sincerely believe that the greatest possibility of
securing major economy in governmental spending in the next
few years lies in controlling the size of the Federal
establishment, and limiting the functions of our ever
expanding Federal bureaucracy, consistent always with
security needs. Real leadership is now being provided in
this important area by the Joint Federal-State Action
Committee. Some of you have participated in the work and
activities of this group.
This Committee was established as a result of a proposal
made by President Eisenhower to the Governors of all of our
states at their conference in June of 1957. The Committee
has made real progress in its work of seeking out governmental
functions now being performed in Washington which can better
be performed by the states. At the same time it is seeking
tax sources now pre-empted by the Federal government which
can be turned back to the states to allow them to finance
such Federal programs as may, by agreement, be turned over
to them.
On the fiscal side, the Committee has already arrived
at full agreement on the principles and details of one
significant proposal under which the Federal government will
make available to the states a proportion of the Federal local
telephone tax in return for the assumption by the states of
the Federal share of financial responsibility for Vocational
Education and Waste Treatment Construction programs. At

-lilts meeting last month the Committee agreed to recommend to
the President and to the Congress an amendment to the
Internal Revenue Code to provide a tax credit for a 5-year
period against the local telephone service tax for taxpayers
in states which enact a 3 percent local telephone tax not
otherwise on their statutes prior to the adoption of this
credit device. The amount of the credit would be 30 percent
of the Federal tax. This amounts to 3 percentage points
of the present 10 percent tax. During the 5-year credit
period, a fund equal to 10 percent of the present Federal
tax would be available for Federal grants to certain states
to achieve a greater measure of equalization. At the end
of the 5-year period the Federal tax credit provision would
expire and the Federal tax on local telephone service would
be reduced from 10 to 6 percent — a reduction of 40 percent
of the total Federal tax. Under the Committee recommendation,
when the new system goes into effect, present grants for
Vocational Education and Waste Treatment projects and the
related Federal operating responsibility will cease.
Other miscellaneous excise taxes will be considered
for relinquishment, as additional functions are shifted. A
comprehensive examination of the Federal estate tax is also
being undertaken by a committee of experts to consider
simplification and possible increases in state credits.
No greater contribution can be made to the strength
of America than to turn back to local governmental units
the maximum number of functions which can be appropriately
handled at a level closer to the people. Government is kept
effective, healthy and representative when it Is carried on
under the close scrutiny of its citizens. I recommend the
work of the Joint Federal-State Action Committee to your
careful attention and support. We appreciate the help
which we have received and know vie will continue to receive
from the Committee of the National Tax Association in this
area.
We do need to marshal all of our forces in this country
to make sure that the funds are available on various
governmental levels to do the job which governments must
do. We must be equally vigorous, however, to fight waste,
unduly enlarged payrolls and tendencies to continue
governmental services no longer demanded by the taxpayer.
While the goal Is now one for the future, we still must
goal
of
strive
vast
must
for
proportions,
be
balanced
kept inbudgets.
must
sight.
ultimately
Our Federal
be reduced
debt, already
and that

156
- 12 I have not painted an encouraging picture for you who
have for so long worked so eagerly for reduction in
governmental spending and tax cuts. We must, however
recognize clearly the problems which we confront
We'
must be prepared, I believe, to spend whatever funds mav
be necessary for an adequate defense, for proper research
both for military and peaceful purposes/ f o r ^ p L r i x ^ l o L t m «
and to meet dislocations causedVhuefnesTconditions^° rati ° n '
Having said this, however, I hasten to add that for the
longer range, there has never been greater need for
organizations such as yours working for understanding
by all citizens of the problems of government, insisting
on business-like methods in governmental operations and
demanding tax savings wherever possible.

0O0

-4 -

i5 i

change, persons who prepare returns (whether enrolled or not) are permitted

to represent taxpayers before the revenue agent or examining officer with
respect to returns prepared by them.

'-' Q

- 3-

The proposed changes are expected to strengthen materially the taxpayer

assistance program of the Internal Revenue Service. Over 9$$ of all cases ar

closed at the revenue agent or examining officer level and less than 2$ go o
to administrative hearings. Thousands of persons — experienced public accountants and others — today render valuable service to the Government and
to the public (even though not enrolled to practice before the Treasury
Department) by assisting taxpayers in the preparation of their returns. In

many cases the taxpayer desires the assistance of such a person in supplying
factual information or in explaining the return to an agent.
In many instances — for example, in the case of wage earners who cannot

take time off from their work without losing wages, or the small businessman

who cannot leave his place of business without closing up shop — the taxpaye

will be relieved of inconvenience and expense if the person who prepared his

return may appear before the examining officer or revenue agent in the Audit
Division in an office of District Director to represent the taxpayer.
Cases involving relatively little tax or relatively simple facts comprise
the bulk of the cases presented for disposition at the revenue agent or ex-

amining officer level. It is in the interests of the Government and the taxpayer alike that every effort be made to complete reasonable settlement of
these tax controversies at the lowest possible level and in the shortest
possible time.
Officials of the Department and the Revenue Service are convinced that
many cases can be handled at that level if, as contemplated by the proposed

- 2 -

be designed to test adequately the technical competency of candidates to
represent taxpayers at all levels of the Service.
In surveying applicants to determine their qualifications the Service will
require satisfactory evidence of education and/or experience. Those with

satisfactory qualifications who pass the examination will be specially enrol
as agents and will be given, as in the past, a card permitting unlimited

practice before all levels of the Internal Revenue Service. They will be subj
to Treasury Department Circular No. 230.
The first such examination will be given in June next year.
The Treasury Department, in discussing the second step, said that it is

proposed to revise the policy stated in I. R. Mimeograph No. 58 (C. B. 1952-2
page 297) so as to permit any person who prepares a return for a taxpayer to

appear as the taxpayer's representative, with or without the taxpayer's prese

before revenue agents and examining officers in the field audit or office aud

branches in the offices of District Directors with respect to the tax liabili

of the taxpayer, for the taxable year or period covered by that return. Under
the proposal, all such persons will be subject to rules regarding ethical
practice, the extent of their authority, and other matters. They will be
permitted, within those limits, to represent the taxpayer without enrollment
when properly authorized by the taxpayer.
The Treasury Department pointed out that Circular No. 230 would have to
be amended to accomplish the second change. A notice of proposed rule making
to this effect is being published today in the Federal Register.

~ "FHESS RELEASE

FOR RELEASE A.M. NEWSPAPERS
Friday, ^October 31, 1958
Proposed changes in Treasury procedures designed to assist taxpayers in

their dealings with the Internal Revenue Service were announced today by Actin
Secretary of the Treasury Fred C. Scribner, Jr.
One proposed change will enable greater numbers of qualified and experi-

enced persons to be specially enrolled to practice before the Internal Revenue

Service through a simplified examination procedure. The second proposed change
will enable non-enrolled persons who prepare returns to represent taxpayers

before revenue agents and examining officers in the District Directors offices
with respect to returns prepared by them.
The proposed changes were decided upon in view of the tremendous increase
in the number of tax returns filed since the present Treasury provisions

governing these matters were put into effect and the correspondingly increased

need for competent assistance to taxpayers. The Subcommittee on Internal Reve

Taxation headed by Congressman Wilbur D. Mills of Arkansas has been interested
in this subject, and commented on it in its last report.
In explaining the first step, the Treasury Department said that the Internal
Revenue Service will give examinations to properly qualified applicants who
are not eligible for enrollment as lawyers, certified public accountants, or
former Internal Revenue Service officers and employees. The examination will
be prepared by the Service, held simultaneously in all District Directors1

offices and graded by the National office. In certain respects, the new exami-

nations will not be as difficult as those presently given. They will, however,

TREASURY DEPARTMENT
WASHINGTON, D.C.

FOR RELEASE A. M. NEWSPAPERS
Friday, October 31, 1958

A-357

Proposed changes in Treasury procedures designed to
assist taxpayers in their dealings with the Internal Revenue
Service were announced today by Acting Secretary of the
Treasury Fred C. Scribner, Jr.
One proposed change will enable greater numbers of
qualified and experienced persons to be specially enrolled
to practice before the Internal Revenue Service through a
simplified examination procedure. The second proposed
change will enable non-enrolled persons who prepare returns
to represent taxpayers before revenue agents and examining
officers in the District Directors1 offices with respect to
returns prepared by them.
The proposed changes were decided upon in view of the
tremendous Increase in the number of tax returns filed since
the present Treasury provisions governing these matters were
put into effect and the correspondingly increased need for
competent assistance to taxpayers. The Subcommittee on
Internal Revenue Taxation headed by Congressman Wilbur D.
Mills of Arkansas has been interested in this subject, and
commented on it in its last report.
In explaining the first step, the Treasury Department
said that the Internal Revenue Service will give examinations
to properly qualified applicants who are not eligible for
enrollment as lawyers, certified public accountants, or
former Internal Revenue Service officers and employees. The
examination will be prepared by the Service, held simultaneously
in all District Directors1 offices and graded by the National
office. In certain respects, the new examinations will not
be as difficult as those presently given. They will, however,
be designed to test adequately the technical competency of
candidates to represent taxpayers at all levels of the Service.

16?
•*- <J 8^

- 2 In surveying applicants to determine their qualifications
the Service will require satisfactory evidence of education
and/or experience. Those with satisfactory qualifications who
pass the examination will be specially enrolled as agents and
will be given, as in the past, a card permitting unlimited
practice before all levels of the Internal Revenue Service.
They will be subject to Treasury Department Circular No. 230.
The first such examination will be given in June next
year.
The Treasury Department, in discussing the second step,
said that it is proposed to revise the policy stated in
I. R. Mimeograph No. 58 (C. B. 1952-2, page 297) so as to
permit any person who prepares a return for a taxpayer to
appear as the taxpayer's representative, with or without
the taxpayer's presence, before revenue agents and examining
officers in the field audit or office audit branches in the
offices of District Directors with respect to the tax liability
of the taxpayer, for the taxable year or period covered by that
return. Under the proposal, all such persons will be subject
to rules regarding ethical practice, the extent of their
authority, and other matters. They will be permitted, within
those limits, to represent the taxpayer without enrollment
when properly authorized by the taxpayer.
The Treasury Department pointed out that Circular No. 230
would have to be amended to accomplish the second change.
A notice of proposed rule making to this effect is being
published today in the Federal Register.
The proposed changes are expected to strengthen materially
the taxpayer assistance program of the Internal Revenue Service.
Over 98$ of all cases are closed at the revenue agent or
examining officer level and less than 2% go on to administrative
hearings. Thousands of persons — experienced public accountants
and others — today render valuable service to the Government
and to the public (even though not enrolled to practice before
the Treasury Department) by assisting taxpayers in the
preparation of their returns. In many cases the taxpayer
desires the assistance of such a person in supplying factual
information or in explaining the return to an agent.
In many instances — for example, in the case of wage
earners who cannot take time off from their work without
losing wages, or the small businessman who cannot leave his
place of business without closing up shop — the taxpayer
will be relieved of inconvenience and expense if the person

j_y

- 3 who prepared his return may appear before the examining
officer or revenue agent in the Audit Division in an office
of District Director to represent the taxpayer.
Cases involving relatively little tax or relatively
simple facts comprise the bulk of the cases presented for
disposition at the revenue agent or examining officer level.
It is in the interests of the Government and the taxpayer
alike that every effort be made to complete reasonable
settlement of these tax controversies at the lowest possible
level and in the shortest possible time.
Officials of the Department and the Revenue Service
are convinced that many cases can be handled at that level
if, as contemplated by the proposed change, persons who
prepare returns (whether enrolled or not) are permitted
to represent taxpayers before the revenue agent or examining
officer with respect to returns prepared by them.

0O0

- 8The Administration has tried to steer a wise course
in its expenditure programs; but the Congress at this last
session was in a spending mood. With the deficit we are
facing and the recovery well under way, let us hope that
our citizens will make it known to their representatives in
the next session of Congress that they want to see sound
fiscal policies pursued.
There are those who state that we should not place budget
considerations above what they assert are human values. I
have yet to find an example around the world where the lot
of the average man has not suffered when unsound fiscal
policies have been pursued over any considerable period
of time.
As mortgage bankers you are entrusted with the investment
of a significant portion of the savings of the American people.
Savings have built our economy — savings made on the assurance
that the value of the dollar would be maintained. Without
this assurance, healthy and sustained growth in the American
economy would be impossible.
I am sure that in the future, as in the past, you will
give full support to the sound policies and programs necessary
to our continued success in preserving the integrity of our
currency.

0O0

the Nation's savings when necessary — not just a residual
claimant. It means, for the private sectors of the economy,
what I might call "aggressive cooperation" — even when this
may appear to involve some sacrifice of immediate advantage.
We3n the Treasury recognize in turn that conducting our
operations in the atmosphere of a free money market sometimes
gives rise to speeial problems for us. While fluctuations
in market prices and yields serve an important function in
our private enterprise economy, excessive speculative activity,
such as we witnessed earlier this year, makes no contribution
to the breadth, depth, or resiliency of the market. We are
giving thought to the ways in which we can in the future
avoid a recurrence of such speculative excesses.
Our financing will continue to be done in a free money
market. Thus there will be times when Federal Reserve monetary
restraint may seem to make our financing job more difficult.
But it is only through an independent and courageous Federal
Reserve that monetary policy can play its proper role as a
powerful anti-inflationary instrument. The Federal Reserve
and the Treasury, with equal determination, are working in
harmony toward the common goal of preservation of the
purchasing power of our currency.
The size of our financing program — both refunding and
new borrowing — underscores the importance of doing as large
a part of our financing as possible outside the commercial
banking system. It Is not necessary to explain to this
audience that lodging an increased proportion of the Federal
debt with the commercial banking system increases the money
supply and hence the purchasing power of the public. The
problem facing the Treasury is not just to find the necessary
funds but rather to procure them from the right sources.
Thus it becomes clear that the Government's financial
resources are not unlimited — if we are firm in our
determination to maintain the value of the dollar. Every
program requiring Federal expenditures should meet the test
of whether it serves a useful and necessary purpose in the
light of what we can afford. Unfortunately, it seems to be
true that expenditure programs once entered into tend to
perpetuate themselves.

*m, y

- 6These difficulties, of course, simply emphasize the
fact that we should enter into Government programs providing
assistance or stimulation to particular sectors of private
industry with the greatest caution. Moreover, they must be
reviewed continually as to their suitability (and cost) under
changing conditions. Our FHA and VA mortgage guarantee and
insurance programs, for example, have made it possible for
millions of American families to live more confortably. But
we should make a greater effort to see that these programs
compete fairly with other demands for funds in the market.
We have had it proven time and again, for example, that
artificially low interest rates established by law under the
VA program — and resulting discounts — serve no legitimate
purpose and, in fact, tend to inflate the price of new houses.
Surely it should be possible, by legislative action, to
establish a greater flexibility in loan terms and bring about
a closer responsiveness of the programs to changes in business
and money-market conditions.
The need for improvement is just as great in our direct
loan programs as it Is in the guarantee and insurance area.
In addition, our continuing heavy defense requirements would
seem to make it clear that we cannot afford to permit direct
Federal loan programs and the purchase of mortgages — subsidy
programs if you will — to indefinitely expand. Just as an
example, a substantial share of the more than $10 billion being
spent by the Government this year for commerce, housing, and
agriculture is in the nature of subsidy loans or grants.
Other programs are involved as well and each has its special
pleaders.
I can well understand that some of you in the mortgage
Industry may feel at times that you are asked to bear undue
hardships as a result of varying demand for funds elsewhere
In the economy. During a recession you are encouraged to
increase your forward commitments. But when recovery gains
momentum and the demands for funds are heavy (including the
raising of Government funds to finance FNMA mortgage purchases)
the increased competition and resulting higher interest rates
may be felt keenly in your sector of the investment markets.
In this connection, let me urge again that it is in the
interest of all of us that the Government meet its obligations
by means of a sound debt management program. This means, for
the Treasury, being an aggressive competitor for a share of

1 py

- 5 to the same careful scrutiny as those of other borrowers —
in fact, more so, since the public's money is involved.
And when we make such a scrutiny — looking into the actual
sources of heavy Government demand for funds at the present
time — one of the first things that emerges is the large
amount of financing required in connection with Federal
subsidies, including those in the housing field.
It is to be expected that some Government measures to
stimulate housing will be given priority in an anti-recessionary
program such as that of the past year. As you know, the
Emergency Housing Act of 1958 which became effective last
April, together with legislation enacted during the preceding
year, considerably increased the attractiveness of Governmentinsured mortgages to borrowers and thus greatly expanded the
Federal National Mortgage Association's special assistance
program of purchasing mortgages on low-cost housing.
The program enacted this year has raised estimated budget
expenditures for the Housing and Home Finance Agency $1.0 billion
above the estimates made in January. Direct housing loans by
the Veterans Administration and for the farm housing program
have added another $200 million. FNMA has now made commitments
to purchase the full billion dollars of mortgages under the
Emergency Housing Act authority — not surprising in view of
the fact that the Act unwisely provided that mortgages be
purchased at prices which reflect interest rates well below
going market rates.
There Is a place for soundly conceived government measures
which will help reverse a cyclical downturn. Yet we must not
lose sight of the fact that heavy Government commitments, such
as those in the housing area, bring with them a number of
special problems. We must remember that the lending activity
of the Government does not bring a net addition of funds to
the market, as the Government must compete in the market to
get the funds. Furthermore, Government programs involving
forward commitments may get into full swing — financially
and otherwise — only after cyclical improvement has set in.
We saw this happen in 1954. We are seeing it happen
again today. It Is a situation, of course, which is particularly
characteristic of an industry such as construction, with a
fairly long cycle from planning to completion.

m*m y

y^)

- 2 -

That is the question of how we are going to maintain the
integrity of our currency in the years ahead in the face of
unprecedented peacetime demands on our financial resources
from both the Government and our rapidly growing economy.
The Treasury and the mortgage bankers of America are
both deeply concerned in finding an answer to this problem.
Your association has recognized this fact in the strong
support which it has given on many occasions to sound fiscal
and monetary policies. Today I want to speak frankly to you
on some of the significant aspects of our number one objective
in the financial area at the present time — preserving the
value of the American dollar.
In my discussion of this matter, I should like to
emphasize two points at the outset. The first is this:
The problem of inflation which I want to put before you is
not confined to the question of short-term price changes. I
am speaking of inflation as a long-run trend which, if allowed
to persist, would do untold damage to the American economy and
even threaten our economic and political freedom.
My second point is a corollary of the first. While the
problem of inflation is long-term, it nevertheless requires
our immediate and most serious attention. This is not a situati<
where we can easily retrace our steps; we simply cannot risk
waiting until the ravages of inflation are all too evident
before starting to do something about it.
We in the Treasury believe that much of the recent concern
about inflation — particularly evident in the financial
markets — reflects a misguided notion that continually
rising prices are inevitable. Nothing could be farther from
the truth. Inflation is man-made and can be man-controlled.
Our job is to find how best to control it without unduly
restricting individual initiative and freedom of choice.
This is not only a basic responsibility of a free society;
it is one which by implication has been written into our laws.
The Congress has specified that the Government has a responsibility to promote maximum employment and purchasing power in
the economy. To fulfill this mandate it is evident that the
Government must also accept responsibility to conduct monetary
and fiscal policy in such a manner as to help maintain the
value of the dollar and thus help to provide one of the
essential ingredients of a sound and growing economy.

TREASURY DEPARTMENT
Washington
REMARKS BY JULIAN B. BAIRD, UNDER SECRETARY
OF THE TREASURY, BEFORE THE 45TH ANNUAL
CONVENTION OF THE MORTGAGE BANKERS ASSOCIATION,
IN THE GRAND BALLROOM, CONRAD HILTON HOTEL,
CHICAGO, ILLINOIS, ON MONDAY, NOVEMBER 3,
1958, AT 11:00 A. M. CST.
DEBT MANAGEMENT AND A SOUND DOLLAR
It is a great pleasure for me to be here today. I am
delighted to meet with a group of men who have been so intimately
concerned with providing better living for many millions of
American families. As you know, financing has been provided
for Ik million new homes in America since World War II, and
untold millions of older homes have been refinanced. Nonfarm
mortgage debt outstanding today exceeds $150 billion, five
times as much as right after the war.
As I have considered these figures, I have often thought
that there has been far too little public recognition of the
tremendous job of mass distribution performed by the mortgage
banking industry in recent years. Not so long ago, the oldfashioned single payment mortgage coming up for renewal on
certain dates was about the only type of financing available
to most home buyers. The result was, of course, that the
housing market was largely restricted to the relatively small
group of families who already had substantial cash accumulations.
What a revolution has occurred since that time — and how
seldom have we thought to give credit t© the financial community
for bringing it about] Through your own efforts and through
legislation which you have been instrumental in shaping, home
ownership has been made a practical possibility for almost
every job-holding American.
In your own field and elsewhere, industry and finance
have worked together to solve many complex problems of production
and distribution. But one of the most significant and far-reaching
questions having to do with money continues to be with us.

A-358

"... fevMM**!**-****-*--

DEBT MANAGEMENT AND A SOUND DOLLAR
It is a great pleasure for me to be here today. I am
delighted to meet with a group of men who have been so intimately
concerned with providing better living for many millions of
American families. As you know, financing has been provided
for 14 million new homes in America since World War II, and
untold millions of older homes have been refinanced. Nonfarm
mortgage debt outstanding today exceeds $150 billion, five
times as much as right after the war.
As I have considered these figures, I have often thought
that there has been far too little public recognition of the
tremendous job of mass distribution performed by the mortgage
banking industry in recent years. Not so long ago, the oldfashioned single payment mortgage coming up for renewal on
certain dates was about the only type of financing available
to most home buyers. The result was, of course, that the
housing market was largely restricted to the relatively small
group of families who already had substantial cash accumulations.
What a revolution has occurred since that time — and how
seldom have we thought to give credit to the financial community
for bringing it about I Through your own efforts and through
legislation which you have been instrumental in shaping, home
ownership has been made a practical possibility for almost
every job-holding American.
In your own field and elsewhere, industry and finance
have worked together to solve many complex problems of production
and distribution. But one of the most significant and far-reaching
questions having to do with money continues to be with us.

A-358

TREASURY DEPARTMENT
Washington
FOR RELEASE ON DELIVERY
REMARKS BY JULIAN B. BAIRD, UNDER SECRETARY
OF THE TREASURY FOR MONETARY A £ £ ^ > ^ f ™ R E
THE 45TH ANNUAL CONVENTION OF THE MORTGAGE
BANKERS ASSOCIATION, IN THE GRAND BALLROOM,
CONRAD HILTON HOTEL, CHICAGO, ILLINOIS, ON
MONDAY, NOVEMBER 3, 1958, AT 11:00 A.M. CST.
DEBT MANAGEMENT AND A SOUND DOLLAR
It is a great pleasure for me to be here today. I am
delighted to meet with a group of men who have been so intimately
concerned with providing better living for many millions of
American families. As you know, financing has been provided
for 14 million new homes in America since World War II, and
untold millions of older homes have been refinanced. Nonfarm
mortgage debt outstanding today exceeds $150 billion, five
times as much as right after the war.
As I have considered these figures, I have often thought
that there has been far too little public recognition of the
tremendous job of mass distribution performed by the mortgage
banking industry in recent years. Not so long ago, the oldfashioned single payment mortgage coming up for renewal on
certain dates was about the only type of financing available
to most home buyers. The result was, of course, that the
housing market was largely restricted to the relatively small
group of families who already had substantial cash accumulations.
What a revolution has occurred since that time — and how
seldom have we thought to give credit to the financial community
for bringing it about! Through your own efforts and through
legislation which you have been instrumental in shaping, home
ownership has been made a practical possibility for almost
every job-holding American.
In your own field and elsewhere, industry and finance
have worked together to solve many complex problems of production
and distribution. But one of the most significant and far-reaching
questions having to do with money continues to be with us.

A-3S8

J '• '
mm, i

«-. -»~

TREASURY DEPARTMENT
Washington

RELEASE ON DELIVERY
REMARKS BY JULIAN B. BAIRD, UNDER SECRETARY
OF THE TREASURY FOR MONETARY AFFAIRS, BEFORE
THE 45TH ANNUAL CONVENTION OF THE MORTGAGE
BANKERS ASSOCIATION, IN THE GRAND BALLROOM,
CONRAD HILTON HOTEL, CHICAGO, ILLINOIS, ON
MONDAY, NOVEMBER 3, 1958, AT 11:00 A.M. CST.
DEBT MANAGEMENT AND A SOUND DOLLAR
It is a great pleasure for me to be here today. I am
delighted to meet with a group of men who have been so intimately
concerned with providing better living for many millions of
American families. As you know, financing has been provided
for 14 million new homes in America since World War II, and
untold millions of older homes have been refinanced. Nonfarm
mortgage debt outstanding today exceeds $150 billion, five
times as much as right after the war.
As I have considered these figures, I have often thought
that there has been far too little public recognition of the
tremendous job of mass distribution performed by the mortgage
banking industry in recent years. Not so long ago, the oldfashioned single payment mortgage coming up for renewal on
certain dates was about the only type of financing available
to most home buyers. The result was, of course, that the
housing market was largely restricted to the relatively small
group of families who already had substantial cash accumulations.
What a revolution has occurred since that time — and how
seldom have we thought to give credit to the financial community
for bringing it about! Through your own efforts and through
legislation which you have been instrumental in shaping, home
ownership has been made a practical possibility for almost
every job-holding American.
In your own field and elsewhere, industry and finance
have worked together to solve many complex problems of production
and distribution. But one of the most significant and far-reaching
questions having to do with money continues to be with us.

A-358

171
- 2 That is the question of how we are going to maintain the
integrity of our currency in the years ahead in the face of
unprecedented peacetime demands on our financial resources
from both the Government and our rapidly growing economy.
The Treasury and the mortgage bankers of America are
both deeply concerned in finding an answer to this problem.
Your association has recognized this fact in the strong
support which it has given on many occasions to sound fiscal
and monetary policies. Today I want to speak frankly to you
on some of the significant aspects of our number one objective
in the financial area at the present time — preserving the
value of the American dollar.
In my discussion of this matter, I should like to
emphasize two points at the outset. The first is this:
The problem of inflation which I want to put before you is
not confined to the question of short-term price changes. I
am speaking of Inflation as a long-run trend which, if allowed
to persist, would do untold damage to the American economy and
even threaten our economic and political freedom.
My second point is a corollary of the first. While the
problem of inflation is long-term, it nevertheless requires
our immediate and most serious attention. This is not a situation
where we can easily retrace our steps; we simply cannot risk
waiting until the ravages of inflation are all too evident
before starting to do something about it.
We in the Treasury believe that much of the recent concern
about inflation — particularly evident in the financial
markets — reflects a misguided notion that continually
rising prices are inevitable. Nothing could be farther from
the truth. Inflation is man-made and can be man-controlled.
Our job is to find how best to control it without unduly
restricting individual initiative and freedom of choice.
This is not only a basic responsibility of a free society;
it is one which by implication has been written into our laws.
The Congress has specified that the Government has a responsibility to promote maximum employment and purchasing power in
the economy. To fulfill this mandate it is evident that the
Government must also accept responsibility to conduct monetary
and fiscal policy in such a manner as to help maintain the
value of the dollar and thus help to provide one of the
essential ingredients of a sound and growing economy.

170

- 3You will note that I said help maintain a stable dollar.
Monetary and fiscal policy cannot do the job alone. There is
also the question of the wage-price spiral which has to be
solved. A Nation such as ours should realize that marking
up wages in excess of the increased productivity of our
economy and marking up prices beyond what is justified by
increases in costs does not produce more goods and services.
Experience teaches, on the contrary, that the result in the
end may be to produce less.
While our main attention needs to be centered on the
long-term threat of continuing inflationary pressures, I
believe it is important to note that positive signs of
inflation in the immediate future are fortunately few and
far between. Wholesale commodity prices have been relatively
stable in recent months and so have consumer prices generally.
Industrial capacity is high and some of it is still idle.
Plentiful crops are putting ample supplies of food on the
market.
These are not factors which suggest that prices will
start \n> again soon. In fact all the signs point to relative
price stability in the months immediately ahead. This should
not make us complacent. But it should help to keep us from
falling into the trap of defeatism and a belief that all
future business and investment decisions must be made in the
environment of a depreciating dollar. We can and must prevent
such an environment from developing; and the place to start
is with a clear analysis of the inflationary forces with which
we must contend.
Many of these forces are currently evident in the money
markets, where there is strong competition for funds at the
present time. This competition is coming from a number of
different sources.
Domestically, our people are demanding and getting the
goods and services — both public and private — which enter
into a steadily rising standard of living. Supplying these
things requires continued heavy expenditures for new plant
and equipment.
Internationally, our defense and mutual security needs
and the necessity for large expenditures in the scientific
field are primary factors keeping the Governments financing
requirements at a very high level. As you know, current budget

.4-

173

receipts are not covering current expenditures; not only
must the Treasury refund the large volume of maturing debt,
but it must enter the market frequently to borrow new money
to cover the cash deficit. In consequence, the Federal
Government is a strong competitor with private borrowers
for available investment funds.
In a situation like the present, when there is a heavy
general demand for funds, one frequently hears the belief
expressed that the Federal Government is the marginal borrower
and therefore bears the sole responsibility for whatever amount
of excessive bank credit extension may be occurring. This,
of course, is a serious misconception. Both national interest
and sound financial policy require the proper financing of the
national government and the needs which the people, acting
through Congress, have asked it to meet, as well as proper
financing of the private economy and of State and local
governments.
When we look at what has been happening in these competing
areas of loan activity in the period since World War II, we
find that other forms of credit have been increasing very
much more rapidly during the postwar period than has the
Federal debt. It may surprise you to hear that for every
dollar of debt expansion by the Federal Government since the
end of 1946 — including, mind you, the financing of our
present deficit — there has been an expansion of about $2
in State and local debt, $6 in mortgage debt, and $9 in the
other debt of individuals and corporations. In consequence,
the Federal debt now accounts for only about one-third of all
debt outstanding as against well over one-half in 1946. To
use an even more meaningful comparison, the Federal debt
actually exceeded the amount of our gross national product
12 years ago, whereas it represents less than two-thirds of
the total output of our economy at the present time.
The purpose of enlightened monetary policy is not, of
course, to stop credit from expanding. Long-term economic
growth requires an increase in the money supply and therefore
in bank credit as well as in other forms of credit — a growth
that should be commensurate with gains in our gross national
product. It is the expansion over and above these growth
requirements, including the necessary requirements of
Government, which must be avoided.
Here, I believe, we must frankly recognize that, while
the Government can by no means be relegated to the position of
marginal borrower, its demands for loan funds must be subjected

- 5-

17 d

to the same careful scrutiny as those of other borrowers —
in fact, more so, since the public's money is involved.
And when we make such a scrutiny — looking into the actual
sources of heavy Government demand for funds at the present
time — one of the first things that emerges is the large
amount of financing required in connection with Federal
subsidies, including those in the housing field.
It is to be expected that some Government measures to
stimulate housing will be given priority in an anti-recessionary
program such as that of the past year. As you know, the
Emergency Housing Act of 195o which became effective last
April, together with legislation enacted during the preceding
year, considerably increased the attractiveness of Governmentinsured mortgages to borrowers and thus greatly expanded the
Federal National Mortgage Association's special assistance
program of purchasing mortgages on low-cost housing.
The program enacted this year has raised estimated budget
expenditures for the Housing and Home Finance Agency $1.0 billion
above the estimates made in January. Direct housing loans by
the Veterans Administration and for the farm housing program
have added another $200 million. FNMA has now made commitments
to purchase the full billion dollars of mortgages under the
Emergency Housing Act authority — not surprising in view of
the fact that the Act unwisely provided that mortgages be
purchased at prices which reflect interest rates well below
going market rates.
There is a place for soundly conceived government measures
which will help reverse a cyclical downturn. Yet we must not
lose sight of the fact that heavy Government commitments, such
as those in the housing area, bring with them a number of
special problems. We must remember that the lending activity
of the Government does not bring a net addition of funds to
the market, as the Government must compete in the market to
get the funds. Furthermore, Government programs involving
forward commitments may get into full swing — financially
and otherwise — only after cyclical improvement has set in.
We saw this happen in 1954, We are seeing it happen
again today. It is a situation, of course, which is particularly
characteristic of an industry such as construction, with a
fairly long cycle from planning to completion.

175
- 6These difficulties, of course, simply emphasize the
fact that we should enter into Government programs providing
assistance or stimulation to particular sectors of private
industry with the greatest caution. Moreover, they must be
reviewed continually as to their suitability (and cost) under
changing conditions. Our FHA and VA mortgage guarantee and
insurance programs, for example, have made it possible for
millions of American families to live more confortably. But
we should make a greater effort to see that these programs
compete fairly with other demands for funds in the market.
We have had it proven time and again, for example, that
artificially low interest rates established by law under the
VA program — and resulting discounts — serve no legitimate
purpose and, in fact, tend to inflate the price of new houses.
Surely it should be possible, by legislative action, to
establish a greater flexibility in loan terms and bring about
a closer responsiveness of the programs to changes in business
and money-market conditions.
The need for improvement is just as great in our direct
loan programs as it is in the guarantee and insurance area.
In addition, our continuing heavy defense requirements would
seem to make it clear that we cannot afford to permit direct
Federal loan programs and the purchase of mortgages — subsidy
programs if you will — to indefinitely expand. Just as an
example, a substantial share of the more than $10 billion being
spent by the Government this year for commerce, housing, and
agriculture is in the nature of subsidy loans or grants.
Other programs are involved as well and each has its special
pleaders.
I can well understand that some of you in the mortgage
industry may feel at times that you are asked to bear undue
hardships as a result of varying demand for funds elsewhere
in the economy. During a recession you are encouraged to
increase your forward commitments. But when recovery gains
momentum and the demands for funds are heavy (including the
raising of Government funds to finance FNMA mortgage purchases)
the increased competition and resulting higher interest rates
may be felt keenly in your sector of the investment markets.
In this connection, let me urge again that it is in the
interest of all of us that the Government meet its obligations
by means of a sound debt management program. This means, for
the Treasury, being an aggressive competitor for a share of

the Nation's savings when necessary — not just a residual
claimant. It means, for the private sectors of the economy,
what I might call "aggressive cooperation" — even when this
may appear to involve some sacrifice of immediate advantage.
We in the Treasury recognize in turn that conducting our
operations in the atmosphere of a free money market sometimes
gives rise to special problems for us. While fluctuations
in market prices and yields serve an important function in
our private enterprise economy, excessive speculative activity,
such as we witnessed earlier this year, makes no contribution
to the breadth, depth, or resiliency of the market. We are
giving thought to the ways in which we can in the future
avoid a recurrence of such speculative excesses.
Our financing will continue to be done in a free money
market. Thus there will be times when Federal Reserve monetary
restraint may seem to make our financing job more difficult.
But it is only through an independent and courageous Federal
Reserve that monetary policy can play its proper role as a
powerful anti-inflationary instrument. The Federal Reserve
and the Treasury, with equal determination, are working in
harmony toward the common goal of preservation of the
purchasing power of our currency.
The size of our financing program — both refunding and
new borrowing — underscores the importance of doing as large
a part of our financing as possible outside the commercial
banking system. It is not necessary to explain to this
audience that lodging an increased proportion of the Federal
debt with the commercial banking system Increases the money
supply and hence the purchasing power of the public. The
problem facing the Treasury is not just to find the necessary
funds but rather to procure them from the right sources.
Thus it becomes clear that the Government's financial
resources are not unlimited — if we are firm in our
determination to maintain the value of the dollar. Every
program requiring Federal expenditures should meet the test
of whether it serves a useful and necessary purpose in the
light of what we can afford. Unfortunately, it seems to be
true that expenditure programs once entered into tend to
perpetuate themselves.

- 8-

177

The Administration has tried to steer a wise course
in its expenditure programs; but the Congress at this last
session was in a spending mood. With the deficit we are
facing and the recovery well under way, let us hope that
our citizens will make it known to their representatives in
the next session of Congress that they want to see sound
fiscal policies pursued.
There are those who state that we should not place budget
considerations above what tftey assert are human values. I
have yet to find an example around the world where the lot
of the average man has not suffered when unsound fiscal
policies have been pursued over any considerable period
of time.
As mortgage bankers you are entrusted with the investment
of a significant portion of the savings of the American people.
Savings have built our economy — savings made on the assurance
that th& value of the dollar would be maintained. Without
this assurance, healthy and sustained growth in the American
economy would be impossible.
I am sure that in the future, as in the past, you will
give full support to the sound policies and programs necessary
to our continued success in preserving the integrity of our
currency.

0O0

173
M. H.

3!f1
Monday, November 3, 1958

195&, mm 2*1*11©$© of m$&Lyim %** ^mommA* of Bmrimm F «a& €
&* or sftcr fas&irity, to tfae #sreiaiys* of a»ri*a I ax I \xmd& vti
1m V~m pwraml llaltatior* of $£0,000 (aatasrity v&Lae} for each s*rt*« will It

all

F »a£ §

:h0vlO/i/§i

A-359
RELEASE A.M. NEWSPAPERS
Manday, November $, 1958
The Secretary of the Treasury today announced that effective December 1,
1958, the privilege of applying the proceeds of Series F and G savings bonds,
at or after maturity, to the purchase of Series E or H bonds without regard
to the annual limitation of $10,000 (maturity value) for each series will be
extended to all holders of outstanding Series F and G bonds, except commercial.
banks.
Under this privilege all holders of Series F and G bonds, except commercial banks, can purchase Series E or H bonds or a combination of both up
to such denominational amounts as the proceeds of their matured bonds will
fully cover, until further notice. This can be accomplished by presenting
the Series F and G bonds to any Federal Reserve Bank or Branch.
Series E or H bonds so purchased will be
the month in which the matured Series F or G
In order to preserve the continuity of their
maturing bonds are urged to present them for
during the month in which they mature.

dated as of the first day of
bonds are presented for payment.
investment, holders of the
reinvestment of the proceeds

This reinvestment privilege has been afforded since September 1, 1958,
only to individuals and personal trust estates and has applied only to
Series F and G bonds maturing on and after that date. The new extension
applies to all matured Series F and G bonds not previously presented for
redemption, and extends the privilege to a larger group of investors, including,
among others, all trust estates (including pension and retirement trusts),
guardianship and similar estates, partnerships, public and private corporations,
and unincorporated associations.
This further change in the savings bond program has been made so that
all long-time owners of Series F and G bonds can keep their savings bond
holdings intact through reinvestment, and add to them through new purchases
under the current annual limitation.

0O0

lou
/ \
faaaaay, Wmmhmr

Wm* frmmry

k* X9$$<

Ba$*aFta>aiit ajunoiineati Xm% awmisg %b*t Ah* taniara tor ^IfdOOfOOOpflOo,

or titonoafcovlo, @f fl*4my trmmmry bill* to mm ofcto* ltovojfror 6, 1?5B» and t© mature
fooroA*? S9 19$99 wkiefe wara off«nMl om Oatobor 30, wara apaiia4 at mm fodorol Basarvt
Banks em temg»%«r 3.
fha Natalia of thia laaaa ara ag tollmm*T®tai ajpfftto* for * ft,Hfcf757»O0O
total m o p t a *
* l,S@t,3§k,000

Cisainftaa #300,910,000 aafearai an a
nan®@g®pati%ttra baaia end aaaaptai la
full at the average price shown below)

\mvmm* of aaaaptad oa»potlU*a Mstat (lsg©*ftljgg oa» %®mm*r of %km9Om)
81*

- ft.315 l«pi*ala*it rate of &immm%

mp$mm.

2,631% pmr

law

- 99.3m

•

t.W5$

Aaotofo

- 99.330

•

i.ittfi •

*
•

(9h paveont @f tfea a*@«nt hM tor at tha law priom waa aaaaptai)
Fadaval Saaarva
Ciatriat
limwimmw

fatal
Applied for

iiiMiimi; mininman MIIBm m»in»

§@#t©»
Raw Tavlc
ftUaMgiila
ftiefcooiid
Atlanta
St. Loula
fttnnaapolia
mmm
City
Oftllaa
Sats franeiaeo

i $$9m9ooo
X9m9lk9900Q
k39km9om

m9m9om
19,9101,000
3l,17M00
3£6,ot*9,ooo
39,931,000
23,856,000
£2,921,000
2 It, 106, 000
^fWiOOO
tOWL tf,8H*,?5?,00©

Total
A

3Mtf#0Q0
1,170,168,000
21,1*30,000
J*2,a§7,00@
1S,©13,000
21,325*000
313*S32,0@@
32,201,000
1»,6A,Q00
3S,5Sx,ooo
21,506,000

ihmm
ll9aotf3SafOOO

TREASURY DEPARTMENT

WASHINGTON, D . C
RELEASE A. M. NEWSPAPERS,
Tuesday, November k, 1958.

A-360

The Treasury Department announced last evening that the tenders for $1,800,000,000,
or thereabouts, of 91^day Treasury bills to be dated November 6, 1958, and to mature
February 5, 1959, which were offered on October 30, were opened at the Federal Reserve
Banks on November 3.
The details of this issue are as follows:
Total applied for • $2,811;,757,000
Total accepted
- 1,802,351,000

(includes $300,91*0,000 entered on a
noncompetitive basis and accepted in
full at the average price shown below)

Range of accepted competitive bids: (Excepting one tender of $1*00,000)
High
Low

- 99.335 Equivalent rate of discount approx. 2.631/6 per annum
M
n
- 99.329
"
"
"
"
2.655# n

Average

- 99.330

2.61*9* "

(9k percent of the amount bid for at the low price was accepted)

Federal Reserve
District

Total
Applied for

Total
Accepted

Boston
New York
Philadelphia
Cleveland
Richmond
Atlanta
Chicago
St. Louis
Minneapolis
Kansas City
Dallas
San Francisco

TOTAL

55,1*60,000
1,91*8,71*9,000
1*3,1*09,000
65,1(12,000
19,9Wi,000
31,176,000
366,01*9,000
39,931,000
23,856,000
52,921,000
2l*,106,000
lU3,7Wi,000

$2,81^,757,000

35,835,000
1,170,168,000
21,1*30,000
1*2,1*87,000
16,613,000
21,325,000
313,832,000
32,208,000
19,63l*,000
38,581,000
21,506,000
68,735,000

$l,802,35l*,000

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 1*51* (b) and 1221 (5) of the Internal Revenue Code of
1951* 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. klB, Revised, 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,

- 2-

P ""'
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 such respect shall be
final. Subject to these reservations, noncompetitive tenders for $200,000 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. Settlement for accepted
tenders in accordance with the bids must be made or completed at the Federal Reserve Bank on November 13, 1958 , in cash or other immediately available funds

HI
or in a like face amount of Treasury bills maturing November 13, 1958
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.
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 1951*. 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,

184

TREASURY DEPARTMENT
Washington
A. M.
Wt RELEASE^ HBKKXHK NEWSPAPERS,
Thursday, November 6, 1958
.

A
—, /
/!
_._
\.
"~~^
v

BE
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.
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

mm.'mJ

TREASURY DEPARTMENT
I I B i T ||ll^'^J^-l^^J-l•^l^^jW'J^^^•^-^^l'-'^•^'-|!B-«^•'^^'••'^^

-rTV».iW-w-rgTr-^^B^^

ill m

nil nun

WASHINGTON, D.C.

RELEASE A.M. NEWSPAPERS,
Thursday, November 6, 1958.

A-361

The Treasury Department, by this public notice, invites tenders
for $ 1,800,000,000,or thereabouts, of 92-day Treasury bills, for
cash and in exchange for Treasury bills maturing November 13, 1958,
in the amount of $1,699,217,000, to be issued on a discount basis
under competitive and non-competitive bidding as hereinafter
provided. -The bills of this series will be dated November 13, 1958,
and will mature February 13, 1959> when the 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, $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, one-thirty o'clock p.m., Eastern Standard time,
Monday, November 10, 1958.
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.
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 such respect shall be
final. Subject to these reservations, non-competitive tenders for
$200,000 or less without stated price from any one bidder will be
accepted in full at the average price (in three decimals) of accepted

- 2 competitive bids. Settlement for accepted tenders in accordance
with the bids must be made or completed at the Federal Reserve Bank
on November 13, 1958, in cash or other immediately available funds
or in a like face amount of Treasury bills maturing November 13, 1958.
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.
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 actuallyreceived 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. 4l8, Revised, 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.
0O0

DANA LATHAM
Commissioner of Internal Revenue
PLACE AND DATE OF BIRTH:

i8B

Galesburg, Illinois, July 7, 1898.

FATHER: Harry S. Latham. MOTHER: Margaret Dobyns.
EDUCATION: Ohio Wesleyan University (A.B. 1920)
Harvard (LL.B. 1922)
MARRIED: Olive Eames DATE: June 16, 1923.
CHILDREN: Jeanne (Mrs. Richard Alden); Corinne (Mrs. Kenneth W.
Cooper); Polly (Mrs. Robert A. Barley).
BRIEF CAREER SUMMARY:
1922 admitted to Illinois bar.
1922-26 associate in the law firm of Hopkins, Starr and
Hopkins (now Hopkins, Sutter, Halls, DeWolfe & Owen),
Chicago and Washington.
1926-27 special attorney, Bureau of Internal Revenue,
Washington and San Francisco.
1927-29 Member of law firm of Miller, Chevalier and Latham.
1929-34 Vice President and Director of Pacific Finance
Corporation, Los Angeles.
1934-58 partner in firm of Latham and Watkins, Los Angeles.
October 9, 1958 Appointed by President Eisenhower to be
Commissioner of Internal Revenue
November J, 1958 Took oath of office
PRINCIPAL PROFESSIONAL OR BUSINESS ACTIVITIES:
1955 special advisor to the Under Secretary of State.
Trustee-Occidental College, Ohio Wesleyan University,
and John Tracy Clinic.
Member - American, International, California and Los Angeles
Bar Associations, (president 1950-51) and the
American Law Institute; Los Angeles Traffic
Association (past president); Harvard Law School
Association of Southern California (past president).
MEMBERSHIPS:
California Club, Los Angeles Country Club.
November 5, 1958

0O0

1 Q7

FOR RELEASE AT NOON
Wednesday, November 5, 1958

A-362

Treasury Secretary Anderson today administered the oath
of office to Dana Latham, a tax attorney of Los Angeles,as
Commissioner of Internal Revenue.
As Commissioner, Mr. Latham will begin his second tour
of duty with the Internal Revenue Service. His first tour
was served in 1926 and 1927 when he was a special attorney
in the Washington and San Francisco offices of the then
Bureau of Internal Revenue.
On assuming office, Mr. Latham issued the following
statement:
"I am deeply honored by the President's
appointment of me as Commissioner of Internal
Revenue. I am especially privileged to return
to an agency in which I did serve briefly 30 years
ago. I can only say now that I will do all within
my power and ability to administer it fairly, honestly
and competently in accordance with the laws of Congress
and long tradition of equitable service to all citizens.
I have known for years of the high caliber and devotion
of Internal Revenue Service employees and I am proud
to be associated with them again in this challenging
assignment.M
Friends and associates of Mr. Latham and officials of Internal
Revenue and Treasury were present at the swearing-in ceremony at
noon in the Treasury.
Mr. Latham was appointed October 9, 1958, by President
Eisenhower to succeed Russell C. Harrington who resigned
September 30, 1958, to return to private business.
A biography of Mr. Latham is attached.

oOo

183

TREASURY DEPARTMENT
WASHINGTON. D.C.
FOR RELEASE AT NOON
Wednesday, November 5, 1958

A-362

Treasury Secretary Anderson today administered the oath
of office to Dana Latham, a tax attorney of Los Angeles,as
Commissioner of Internal Revenue.
As Commissioner, Mr. Latham will begin his second tour
of duty with the Internal Revenue Service. His first tour
was served in 1926 and 1927 when he was a special attorney
in the Washington and San Francisco offices of the then
Bureau of Internal Revenue.
On assuming office, Mr. Latham issued the following
statement:
"I am deeply honored by the President's
appointment of me as Commissioner of Internal
Revenue. I am especially privileged to return
to an agency in which I did serve briefly 30 years
ago. I can only say now that I will do all within
my power and ability to administer it fairly, honestly
and competently in accordance with the laws of Congress
and long tradition of equitable service to all citizens.
I have known for years of the high caliber and devotion
of Internal Revenue Service employees and I am proud
to be associated with them again in this challenging
assignment."
Friends and associates of Mr. Latham and officials of Internal
Revenue and Treasury were present at the swearing-in ceremony at
noon in the Treasury.
Mr. Latham was appointed October 9, 1958, by President
Eisenhower to succeed Russell C. Harrington who resigned
September
30, 1958,
to return
business.
A biography
of Mr,
Lathamto
isprivate
attached.

DANA LATHAM
Commissioner of Internal Revenue
PLACE AND DATE OF BIRTH:

Galesburg, Illinois, July 7, I898.

FATHER: Harry S. Latham. MOTHER: Margaret Dobyns.
EDUCATION: Ohio Wesleyan University (A.B. 1920)
Harvard (LL.B, 1922)
MARRIED: Olive Eames DATE: June 16, 1923.
CHILDREN: Jeanne (Mrs. Richard Alden); Corinne (Mrs. Kenneth W.
Cooper); Polly (Mrs. Robert A. Barley).
BRIEF CAREER SUMMARY:
1922 admitted to Illinois bar.
1922-26 associate in the law firm of Hopkins, Starr and
Hopkins (now Hopkins, Sutter, Halls, DeWolfe & Owen),
Chicago and Washington.
1926-27 special attorney, Bureau of Internal Revenue,
Washington and San Francisco.
1927-29 Member of law firm of Miller, Chevalier and Latham.
1929-34 Vice President and Director of Pacific Finance
Corporation, Los Angeles.
1934-58 partner in firm of Latham and Watkins, Los Angeles.
October 9, 1958 Appointed by President Eisenhower to be
Commissioner of Internal Revenue
November 5, 1958 Took oath of office
PRINCIPAL PROFESSIONAL OR BUSINESS ACTIVITIES:
1955 special advisor to the Under Secretary of State,
Trustee-Occidental College, Ohio Wesleyan University,
and John Tracy Clinic.
Member - American, International, California and Los Angeles
Bar Associations, (president 1950-51) and the
American Law Institute; Los Angeles Traffic
Association (past president); Harvard Law School
Association of Southern California (past president).
MEMBERSHIPS:
California Club, Los Angeles Country Club.
November 5, 1958

0O0

i or,
mLy

IMMEDIATE RELEASE
FRIDAY, NOVEMBER 7, 1958.

A-3&3

The Treasury Department will invite tenders for
$3 billion, or thereabouts, of 214-day Treasury tax
anticipation bills to raise cash for current requirements.
The full terms of the offering will be contained in a
statement to be released Monday morning, November 10.
Tenders will be opened at 1:30 p.m., Eastern Standard
Time, on Friday, November 14.
The new bills will be dated November 20, 1958, and
will mature June 22, 1959. They will be Tax Anticipation
bills, acceptable at face value in payment of income and
profits taxes due June 15, 1959. They may be paid for by
credit in Treasury Tax and Loan Accounts.
All bidders are required to agree to refrain from
any dealings in these bills until after the time set for
the opening of tenders - 1:30 p.m., Eastern Standard Time,
Friday, November 14, 1958.

19i
TREASURY DEPARTMENT
WASHINGTON. D.C
IMMEDIATE RELEASE
FRIDAY, NOVEMBER 7, 1958.

A-363

TREASURY DEPARTMENT

WASHINGTON, D.C.
RELEASE A.li. NEWSPAPERS,
Monday, November 10, 1958.

A-364

The Treasury Department, by this public notice, invites tenders for
$3,000,000,000, or thereabouts, of 214-day Treasury bills, to be issued on a discount basis under competitive and noncompetitive bidding as hereinafter provided.
The bills of this series will be designated Tax Anticipation Series, they will be
dated November 20, 1958, and they will mature June 22, 1959. They will be accepted
at face value in payment of income and profits taxes due on June 15, 1959, and to
the extent they are not 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, 1959, income and profits taxes have the privilege
of surrendering them to any Federal Reserve Bank or Branch or to the Office of
the Treasurer of the United States, Washington, not more than fifteen days before June 15, 1959, and receiving receipts therefor showing the face amount of
the bills so surrendered. These receipts may be submitted in lieu of the bills
on or before June 15, 1959, to the District Director of Internal Revenue for the
District in which such taxes are payable. The bills will be issued in bearer
form only, and in denominations of $1,000, $5,000, $10,000, $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, one-thirty o'clock p.m., Eastern Standard time, Friday, November 14,
1958, 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

•*• o o
will be supplied by Federal Reserve Banks or Branches on application therefor.
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.
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 of this issue, until after one-thirty o'clock p.m., Eastern Standard time,
Friday, November 14, 1958.
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 November 20, 1958, 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.

.3-

194

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, Revised, 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.

195
'4

—"^|

.$H A. M.

Tuesday, Hoveittoer 11. 195>8.
mmmmmi.

Ti fr

.iiiimiifii

nT> i. i i

Hie treasury Department mimovmmd

last evening that the tenders for $1,800,000,00$

or thereabouts, of 92-day Treasury feiHs to tee dat@«l Sovejsber 13* 1958* &ad to mature
February 13, 1959, which were offered on November 6, were opened at the Federal Resero
Banks on November 10.
The details of this issue are as followsj
fotal applied tor *• $2,856,703,000
total accepted
- 1,800,766,000

(Includes #33k,81tf,O00 entered oa a
noncompetitive basis and accepted in
full at the average price shown below)

Saage of aooepted eospeiitive bids; (ixeeptiHg *»o tenders totaling $2,200,
- 99*330 Equivalent rate of discount approx. 2*622$ per annua
- 99*288
*
» »
»
*
2*786*g »
«
- 99.291 * n n m N 2*771$ • •
(80 psretat of the amount bid for at the low prioe vas accepted)
fotal
Applied for

>istriet
Boston
Mm fork
Philadelphia
Cleveland
Richmond
Atlanta
St. Louis

$ 1*5,926,000
2,0O2,i»lil,0OQ
1*1,661,000
80,777,000
30,876,000
1*0,191,000
32O,U9li*OO0
32,069,000
27,81*0,000
57,719,000
26,285,000
150,1*01**000
VOfAl $2,856,703,000

Kansas City
Dallas
Sam Francisco

ffabffM.
y

total
$

35,926,000
1,082,62U,000
17,81*7,000
75,777,000
26,876,000
38,391,000
272,388,000
32,089,000
25,21*0,000
i*l*,119,000
25,585,000
123,90^000

m r i r i mi »..« i»Hf IVI 11 i m i >

n i »n i

$1,800,766,000

TREASURY DEPARTMENT

WASHINGTON, D.
RELEASE A. M. NEWSPAPERS,
Tuesday, November 11, 1958*

A-365

The Treasury Department announced last evening that the tenders for $1,800,000,000,
or thereabouts, of 92-day Treasury bills to be dated November 13, 1958, and to mature
February 13, 1959, which were offered on November 6, were opened at the Federal Reserve
Banks on November 10.
The details of this issue are as follows:
Total applied for - $2,856,703,000
Total accepted
- 1,800,766,000

(includes $33l*,81*7,000 entered on a
noncompetitive basis and accepted in
full at the average price shown below)

Range of accepted competitive bids: (Excepting two tenders totaling $2,200,000)
High
Low

- 99*330 Equivalent rate of discount approx. 2»622# per annum
n
- 99*288
"
"
"
"
2.786$ »
»

Average

- 99*291

2.77l$

(80 percent of the amount bid for at the low price was accepted)

Federal Reserve
District

Total
Applied for

Total
Accepted

Boston
New York
Philadelphia
Cleveland
Richmond
Atlanta
Chicago
St. Louis
Minneapolis
Kansas City
Dallas
San Francisco

1*5,926,000
2,002,1|1*1,000
1*1,661,000
80,777,000
30,876,000
1*0,191,000
320,l*9l*,000
32,089,000
27*81*0,000
57,719,000
26,285,000

TOTAL

35,926,000

l,082,62l*,000
17,81*7,000

i5o,l*ol*,ooo

75,777,000
26,876,000
38,391,000
272,388,000
32,089,000
25,21*0,000
1*1*,119,000
25,585,000
123,901*, 000

$2,856,703,000

$1,800,766,000

mi. y

STATUTORY DEBT LIMITATION
A S O F October 31 # 1958
A S

—

Washington,

„
,^ Ioco
N O V * 1 2 , 1958

period
increased by $5,000,000,000.
The following table shows the face amount of obligations outstanding and the face amount which can still be issued under
this limitation:
$288,000,000,000
Total face amount that may be outstanding at any one time
Outstanding*
Obligations issued under Second Liberty Bond Act, as amended
Interest-bearing:
Treasury bills $25, 9^1, 57** . 000
Certificates of indebtedness.
Treasury notes

21.938.390.000

BondsTreasury
* Savings (current redemp. value)

86,366,527.000

85.736,559,050
51.715.012.^05

Depositary.
Investment series .-

216,586,500
9.109.078.000

Special FundsCertificates of indebtedness
Treasury notes
Treasury bonds
Total interest-bearing
Matured, interest-ceased

3 8 , **86 » 5 6 3 » 0 0 0

146,777.235,955

22,733.986,000

15.695.9^7.000
6.937.5Q0.000
-

Bearing no interest:
United States Savings Stamps

**8,899.098

Excess profits tax refund bonds
Special notes of the United States:
Internat'l Monetary Fund series
Totai ....

^.367.^33.000
2 7 8 , 5 H » 1 9 5 »955
537.395»o02

875.^5^'
687,000,000
-

736.77^.552
279,785,ySS,509

Guaranteed obligations (not held by Treasury):
Interest-bearing:
Debentures: F.H.A
Matured, interest-ceased

Ill,307.600
636.Q5Q

Grand total outstanding
„
Balance face amount of obligations issuable under above authority

111.9^3.650
„
m

„

Reconcilement with Statement of the Public Debt .....9?J*?!*?£..31j!..J!§5§
(Date)
(Daily Statement of the United States Treasury,
.9.?.^9^.^...3*.»...-}:?58
(Date)
OutstandingTotal gross public debt
Guaranteed obligations not owned by the Treasury.
..
Total gross public debt and guaranteed obligations.
„
Deduct - other outstanding public debt obligations not subject to debt limitation

2 7 9 « 8 9 7 1ffi^•959
8,102,690.0^*

„

280,211,k$6,?00
1 ' 3-. 7 * y f 03^280,323. ^"00 »^*
**2O|Q90t^"

279.897.309,959

A-366

1
STATUTORY DEBT LIMITATION
AS OF October 31, 1958

99
_0tQ

Washington, N O V 1 2 , lyPO
Section 21 of Second Liberty Bond Act, as amended, provides that the face amount of obligations issued under authority
of that Actf and the face amount of obligations guaranteed as to principal and interest by the United States (except such guaranteed obligations as may be held by the Secretary of the Treasury), "shall not exceed in the aggregate $283,000,000,000
(Act of September 2, 1958; U.S.C.^ title 31. sec. 757b), outstanding at any one time. For purposes of this section the current
redemption value of any obligation issued on a discount basis which is redeemable prior to maturity at the option of the holder
shall be considered as its face amount." The Act of February 26, 1958, (P.L. 85-336 85th Congress) provides that during the
period beginning on February 26, 1958 and ending June 30, 1959, the above limitation ($283,000,000,000) shall be Temporarily
increased by $5,000,000,000.
The following table shows the face amount of obligations outstanding and the face amount which can still be issued under
this limitation :
Total face amount that may be outstanding at any one time
$288,000,000,000
OutstandingObligations issued under Second Liberty Bond Act, as amended
Interest-bearing:
Treasury bills $25,941,574,000
Certificates of indebtedness
38,486,563,000
Treasury notes .„
21.938.390.000 $ 86,366,527.000
BondsTreasury
85 .736,559 , 050
* Savings (current redemp. value)
51,715,012,405
Depositary.
216,586,500
Investment series
9.109.078,000
146,777.235,955
Special FundsCertificates of indebtedness
22,733,986,000
Treasury notes
15,695,947,000
Treasury bonds
6.937.500.000
45.367.433.000
Total interest-bearing
278,511,195,955
Matured, interest-ceased
537.395,802
Bearing no interest:
United States Savings Stamps....,
Excess profits tax refund bonds
Special notes of the United States:
Internat'l Monetary Fund series
T

48,899.098
875.454
687,000,000

tal

736.774.552
279,785,566,309

Guaranteed obligations (not held by Treasury):
Interest-bearing:
Debentures: F.H.A
111,307.600
Matured, interest-ceased
636.050
Grand total outstanding .<
Balance face amount of obligations issuable under above authority

111.943.650
279.897.309.959
8,102,690,041

Reconcilement with Statement of the Public Debt ....£?*9^.?*..3?:.!....i?5?.
(Date)

(Daily Statement of the United States Treasury,
o

92&9l&£..3i&.™$$&

<Date>

OutstandingTotal gross public debt
,
Guarunteed obligations not owned by the Treasury,
Total gross public debt and guaranteed obligationa
Deduct - other outstanding public debt obligations not subject to debt limitation

280,211,456,768
I l l . 9 * 0 »650
280,323,400,418
426,090.459

279.897.309.959

A-366

- 3 y y

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 \&k (b) and 1221 (5>) of the Internal Revenue Code of
195U 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. Itl8, Revised, 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.

- c

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 Heserve 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 f200,000 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. Settlement for accepted
tenders in accordance with the bids must be made or completed at the Federal Reserve Bank on Sovember 20, 1958 , in cash or other irrrediately available fanes
or in a like face amount of Treasury bills maturing Kovember 20, 1958 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.
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 195b. 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 principa
or interest thereof by any State, or any of the possessions of the United States,

ASGKKUL

TREASURY DEPARTMENT
Washington

A. M.
KSBt RELEASE/ MSKKXKK NEWSPAPERS,
Thursday, November 15, 1958

Pr -

"?/ '/
J

The bills of this series will be

dated November 20, 1958 , and will mature February 19, 1959 , when the face
amount will be payable without interest. They will be issued in bearer form only,
and in denominations of $1,000, $2,000, $10,000, $100,000, $500,000 and $1,000,000
(maturity value).
Tenders will be received at Federal Reserve Banks and Branches up to the
one-thirty
closing hour, ydSaoc o'clock p.m., Eastern Standard time, Monday, November 17, 1958 ,»
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.
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

RELEASE A.M. NEWSPAPERS,
Thursday, November 13* 1958.

A-367

The Treasury Department, by this public notice, invites tenders
for $1,800,000,000, or thereabouts, of 91-day Treasury bills, for
cash and in exchange for Treasury bills maturing November 20, 1958
in the amount of $1*799,824,000, to be issued on a discount basis
under competitive and non-competitive bidding as hereinafter
provided. The bills of this series will be dated November 20, 1958,
and will mature February 19, 1959, when the 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, $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, one-thirty o'clock p.m., Eastern Standard time,
Monday, November 17, 1958.
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.
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 such respect shall be
final. Subject to these reservations, non-competitive tenders for
$200,000 in
or full
less without
stated price
price from
any one
bidder of
will
be
accepted
at the average
(in three
decimals)
accepted

- 2 competitive bids. Settlement for accepted tenders in accordance
with the bids must be made or completed at the Federal Reserve Bank
on November 20, 1958, in cash or other immediately available funds
or in a like face amount of Treasury bills maturing November 20, 1958
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.
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 195^* 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 actuallyreceived 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. 4l8, Revised, 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.
0O0

1 -y

RELEASE A. M. NEWSPAPERS,
Saturday, lovember 15, 1958.
mmmmmmmjbmmm-mm ,M

•

n.i u.i imir

fhe Treatury Department announced last evening that the ten&ers for I3,OOO,0OO,OOC

or thereabouts, of fax Anticipation Series 214-day treasury bills to bo dated Novemb

195$, and to mature Oune 22, 1959, which were offered on November 10, were opened at
Federal Reserve Banks on November Ik*
fhe details of this issue are as follows? oave
Total applied for - 15,953,872,000
fotal accepted
- 3,000,224,000

(includes #747,885,000 entered on a
noncompetitive basis and accepted in
full at the average prioe shown below)

t&nge of accepted ©ompetitive bids? (Excepting three tenders totaling f5,050,000)
High - 98.276 Equivalent rate of discount approx* 2.900$ per annum
low
-98.193
"
»
«
f
. s
3.040£ •»
Average - 98f2l8 * « « « » 2.997^ *

(58 percent of the amount bid for at the low price was accepted)
Federal Beserve
District

fetal
Applied for

Total
Accepted

Boston
Hew York
ffeiladelphia
Cleveland
Jtlehmond
Atlanta
Chicago
St. Louis
Minneapolis
Kansas City
Dallas
San Francisco

I 261,292,000
2,526,716,000
207,763,000
339,883,000
177,517,000
. 201,61*3,000
945,577,000
160,478,000
11*9,556,000
172,322,000
275,136,000
535,989,000

TOTAL

15,953,872,000

124,402,000
857,530,000
90,263,000
172,363,000
134,763>000
146,218,000
583,556,000
91,558,000
126,086,000
132,960,000
252,336,000
288,189,000

13,000,224,000

TREASURY DEPARTMENT
W A S H I N G T O N , D.C.
RELEASE A. M. NEWSPAPERS,
Saturday, November 15, 1958

A-36b

The Treasury Department announced last evening that the tenders for $3,000,000,000,

tor thereabouts, of Tax Anticipation Series 2l4-day Treasury bills to be dated

1958, and to mature June 22, 1959, which were offered on November 10, were ope
Federal Reserve Banks on November 14.
The details of this issue are as follows:
Total applied for - $5,953,872,000
Total accepted
- 3,000,224,000

(includes $747,885,000 entered on a
noncompetitive basis and accepted in
full at the average price shown below)
Range of accepted competitive bids: (Excepting three tenders totaling $5,050,00
High
Low

- 98.276 Equivalent rate of discount approx. 2.900$ per annum
M
w
- 98.193
n
it
it
tt
3.040$ M

Average

- 98,218

2.997$

(58 percent of the amount bid for at the low price was accepted)
Federal Reserve
District

Total
Applied for

Total
Accepted

Boston
New York
Philadelphia
Cleveland
Richmond
Atlanta
Chicago
St. Louis
Minneapolis
Kansas City
Dallas
San Francisco

$ 261,292,000
2,526,716,000
207,763,000
339,883,000
177,517,000
201,643,000
945,577,000
160,478,000
149,556,000
172,322,000
275,136,000
535,989,000

TOTAL

15,953,872,000

124,402,000
857,530,000
90,263,000
172,363,000
134,763,000
146,218,000
583,556,000
91,558,000
126,086,000
132,960,000
252,336,000
288,189,000

$3,000,224,000

CO
C\J

a.. U ^

TREASURY DEPARTMENT
Washington, D« C.
IMUSDIATE RELEASE

Monday, November 17, 1958.

A-369

PRELIMINARY DATA ON IMPORTS FOR CONSUMPTION 07 UNMANUFACTURED LEAD AND ZINC CHARGEABLE TO THE QUOTAS ESTABLISHES
B? PRESIDENTIAL PROCLAMATION NO. 3257 OF SEPTEMBER 22, 195*
QUARTERLY QUOTA PERIOD • Ootober 1, 1958 - Deotmber 31, 1958
IMPORTS • Ootobsr 1, 1958 - November 12, 1958
ITEM 392
V Lead "bullion or base bullion,
t lead in pigs and bars, lead
Lead-bearing ores, flue dust,s dross, reclaimed lead, sera?
and matte*
: lead, anti&onlal lead, antI: aonial scrap lead, type aatal,
j all alloys or combinations of
...... i
.. .
lead n.s.p.f.
Quarterly Quota
:Quarterly
Quota
1 Dutiable. Lead
Imports : Dutiable Lead
Iaporta
(Pounds)
""(PoundsJ """"*"
ITEM 391

Country
of
Production

Australia

10,080,000

Belgian Congo

Belgium and
Luxemburg (total)

Bolivia

5,040,000

Canada,

13,440,000

Italy

Mexico

1,826,657

4,663,881 15,920,000

6,008,581

On. So. Afrloa

14,880,000

9,289,010

BoyoinCT

6,5^0,000

T V •rvrz mrae.TT n » fiXtsTCiMfC

j
:
: Zino-bearing ores of all kinds,: Zlno la blocks, pigs, or slabs}
: except pyrites containing not : old end irora-out zlno, fit
t
over 3$ of lino
x only to be reaanufactured, zino
:
: '' dross, and zino skiiimings
1
:
.
:Quarterly
Quota
tQuarterly Quota
: Dutiable Zinc
Iaporta ; By Weight
Imports
""
(Pounds)
(Pounds)

800,000
2,976,284

7,520,000

31,236,084 37,840,000

19,732,355

3,600,000

3,306,914

2,726,074

16,160,000

All other foreign
eountries (total)

5,440,000

Peru

Yugoslovia

23,680,000

ITEM 394

ITEM 393

1,665,140

7,763,984

66,480,000

36,880,000

15,874,413 70,480,000

27,232,486 6,320,000

3,117,962

12,880,000

2,472,499 35*120,000

8,424,423 3,760,000

1,386,311

15,760,000

285,129

6,080,000

6,080,000 17,840,000

4,790,789

6,080,000

5,235,628

TREASURY DEPARTMENT
lashington, D* C.

IMMEDIATE RELEASE

Monday, November 17, 1958,

A-369

PRELIMINARY DATA ON IMPORTS FOR CONSUMPTION OF USKANOFACTUISD LEAD AND ZINC CHARGSABLS TO THE QUOTAS ESTABLISHED
B? PRESIDENTIAL PROCLAMATION NO. 3257 OF SEPTEMBER 22, 1958
QUARTERLY QUOTA PERIOD - Ootober 1, 1958 - December 31, 1958
IMPORTS » Ootober 1, 1958 * November 12, 1958

Country
of
Production

Australia

ITEM 394
ITEM 391
ITEM 393
ITEM 392
i
"t Lead bullion or base bullion, :
»
i
t lead in pigs and bars, lead
s
:
t Lead-bearing ores, flue dust,» dross, reolaised load, esrap
: Zinc-bearing ores of all kinds,: Zino ia blocks, pigs, or slabs;
j
and asattes
: lead, anti-aonial lead, antii except pyrites containing not : old end Trorn-out zino, fit
t
aonial
scrap
load, type aatal,
:
over yfa of zino
i only
to be
}%•all
alloys
or combinations
of
dross,
andreaanufactured,
zino ski.inlngs zino
»
laad n.s«p»f.
s
:Quartarly Quota
:Guarterly Quota
:Quarterly Quota
Quarterly Quota
t Dutiable. Lead
Iaporta : Dutiable Lead
Isoart3 i Dutiable Zinc
Iaporta
By »ei;ght
Import*
"'
(Pounds}
~" (PoundsJ"
"
~~~"
(Pounds)
—————
(pounds)
10,080,000

Belgian Congo

Belgium and
Luxemburg (total)

Bolivia

5,040,000

Canada

13,440,000

Italy

Mexico

1,826,657

4,663,881 15,920,000

6,008,581

On. So. Africa

14,880,000

9,289,010

6,560,000

2,976,284

7,520,000

31,236,084 37,840,000

19,732,355

3,600,000

3,306,914

2,726,074

16,160,-300

All other foreign
countries (total)

800,000
5,440,000

Peru

Yugoslovia

23,680,000

1,665,140

7,763,984

66,480,000

36,880,000

15,874,413 70,480,000

27,232,486 6,320,000

3,H7,962

12,880,000

2,*72,499 35,120,000

8,424,423 3#760,000

1,386,311

15,760,000

285,129

6,080,000

6,080,000 17,840,000

4,790,789

6,080,000

5,235,628

20
- 2-

Commodity

Period

and

Quantity

: Unit :
^ ^
of
: Imports as of
Quantity: October 31, 1958

Absolute Quotas:
Peanuts, shelled, unshelled,
blanched, salted, prepared, or
preserved (incl. roasted peanuts 12 mos. from
but not peanut butter) ......••• August 1, 1958
Ry e , rye flour, and rye meal ...

Butter substitutes, including
butter oil, containing 45$
or more butterfat
Tung oil

* - Imports through November 12.

12 mos. from
July 1, 1958
Canada
Other Countries

1,709,000 Pound

182,280,000
3,720,000

Pound
Pound

Calendar Year

1,200,000 Pound

Nov. 1, 1958 Jan. 31, 1959
Argentina
Paraguay
Other Countries

5,525,000
741,000
234,000

Pound
Pound
Pound

1,^31,194*

182,178,516*

1,199,991

1,187,360*
Quota filled
Quota filled

ad
ro

TREASURY DEPARTMENT
Washington, D. C.
IMMEDIATE RELEASE

A-37Q

Monday, November 17, 1958.

Commodity

Period

and

Quantity

Unit :
of
: Imports as of
: Quantity: October 31, 19

Tariff-Rate Quotas:
Cream, fresh or sour Calendar Year
Whole milk, fresh or sour • Calendar Year
Cattle, 700 lbs. or more each
(other than dairy cows) •
Cattle, less than 200 lbs. each
Fishj fresh or frozen, filleted,
etc., cod, haddock, hake,
pollock, cusk, and rosefish ....

Gallon

206

3,000,000 Gallon 260

Oct. 1, 1958 Dec. 31, 1958

120,000 Head 29,^21

12 mos. from
April 1, 1958

200,000 Head 15,525

Calendar Year

35,892,221 Pound Quota filled

Tuna fish Calendar Year
White or Irish potatoes:
Certified seed
Other

1,500,000

^,693,87^ Pound 1+2,3^9,036
12 mos. from
Sept^ 15, 1958

Walnuts Calendar Year

11^,000,000
36,000,000

Pound
Pound

1,051,300
;^30,0^3

5,000,000 Pound 2,651,930

ALsike clover seed 12 mos.' from
July 1, 1958

3,000,000

Pound

2,558,191

Peanut oil 12 mos. from
July 1, 1958
Woolen fabrics Calendar Year

80,000,000 Pound 1,952,131
1^,300,000 Pound Quota filled

TREASURY DEPARTMENT
Washington, D. C.

209

IMMEDIATE RELEASE

A-370

Monday, November 17, 1958.

Commodity

Period

and

Quantity

: Unit :
:
of
: Imports as of
:Quantity:October 31, 1958

Tariff-Rate Quotas:
Cream, fresh or sour

Calendar Year

Whole milk, fresh or sour

Calendar Year

3,000,000 Gallon 260

Oct. 1, I958 Dec. 31, 1958

120,000 Head 29,421

12 mos. from
April 1, 1958

200,000 Head 15,525

Calendar Year

35,892,221 Pound Quota filled

Calendar Year

44,693,874 Pound 42,349,036

Cattle, 700 lbs. or more each
(other than dairy cows)
Cattle, less than 200 lbs. each
Fish, fresh or frozen, filleted,
etc., cod, haddock, hake,
pollock, cusk, and rosefish ....

1,500,000

Gallon

206

White or Irish potatoes:
Certified seed
Other

12 mos. from
Sept. 15, 1958

114,000,000
36,000,000

Walnuts

Calendar Year

5,000,000 Pound 2,651,930

Alsike clover seed

12 mos. from
July 1, 1958

Peanut oil

9 « e o o « « 9 « e « o o « t « e o o e «

Woolen fabrics I

* 9 9) o o o

3,000,000

Pound
Pound

Pound

1,051,300
430,043

2,558,191

12 mos. from
July 1, 1958

80,000,000 Pound 1,952,131

Calendar Year

14,200,000 Pound Quota filled

(continued)

- 2 -

Commodity

Period

and

Quantity

: Unit :
of
: Imports as of
Quantity: October 31, 19s

Absolute Quotas:
Peanuts, shelled, unshelled,
blanched, salted, prepared, or
preserved (incl. roasted peanuts 12 mos. from
but not peanut butter)
August 1, 1958
Rye, rye flour, and rye meal .

Butter substitutes, including
butter oil, containing 45$
or more butterfat
Tung oil

* - Imports through November 12.

12 mos. from
July 1, 1958
Canada
Other Countries

1,709,000 Pound

182,280,000
3,720,000

Pound
Pound

1,431,194*

182,178,516*

Calendar Year

1,200,000 Pound

1,199,991

Nov. 1, 1958 Jan. 31, 1959
Argentina
Paraguay
Other Countries

5,525,000 Pound
741,000 Pound
234,000 Pound

1,187,360*
Quota filled
Quota filled

00
CO
LQ
CM

TREASURY DEPARTMENT
Washington, D. C.

21 G
IMMEDIATE RELEASE

A-371

Monday, November 17, 1958,

The Bureau of Customs announced today preliminary figures showing the
quantities of wheat and wheat flour authorized to be entered, or withdrawn
from warehouse, for consumption under the import quotas established in the
President's proclamation of May 28, 194l, as modified by the President's
proclamation of April 13, 1942, for the 12 months commencing May 29, 1958,
as follows:

Country
of
Origin

Wheat flour, semolina,
crushed or cracked
wheat, and similar
wheat products
Established :
Imports
Established : Imports
Quota
:May 29, 19 58,
Quota
:May 29, 1958,
:to Oct. 31, 193
: to Oct. U . 1958:
(Bushels)
(Bushels)
(Pounds)
(PoundsJ

Canada
795,000
China
Hungary
Hong Kong
Japan
United Kingdom
100
Australia
Germany
100
Syria
100
New Zealand
Chile
Netherlands
100
Argentina
2,000
Italy
100
Cuba
France
1,000
Greece
Mexico
100
Panama
Uruguay
Poland and Danzig
Sweden
Yugoslavia
Norway
Canary Islands
1,000
Rumania
Guatemala
100
Brazil
100
Union of Soviet
Socialist Republics
100
Belgium
100
800,000

795,000

3,815,000
24,000
13,000
13,000
8,000
75,000
1,000
5,000
5,000
1,000
1,000
1,000
14,000
2,000
12,000 ,
1,000
1,000
1,000
1,000
1,000
1,000
1,000
1,000
1,000
1,000

4,000,000

'3,815,000
.
-

661
.
-

800
_

220
-

3,816,681

TREASURY DEPARTMENT
Washington, D. C.

211

IMMEDIATE RELEASE

Monday, November 17* 1358,

A-371

The Bureau of Customs announced today preliminary figures showing the
quantities of wheat and wheat flour authorized to be entered, or withdrawn
from warehouse, for consumption under the import quotas established in the
President's proclamation of May 28, 194l, as modified by the President's
proclamation of April 13, 19^2, for the 12 months commencing May 29, 1958,
as follows:

Country
of
Origin

Wheat flour, semolina,
crushed or cracked
wheat, and similar
wheat products
Established : Imports
Established :
Imports
Quota
:May 29, 1958,
Quota
:May 29, 19 58,
:to Oct. 31. 1958
:to Oct. 31. 1958:
(Pounds)
(Bushels)
(Bushels)
(Pounds J

Canada
795,000
China
Hungary
Hong Kong
Japan
United Kingdom
100
Australia
Germany
100
Syria
100
New Zealand
Chile
Netherlands
100
2,000
Argentina
Italy
100
Cuba
1,000
France
Greece
Mexico
100
Panama
Uruguay
Poland and Danzig
Sweden
Yugoslavia
Norway
Canary Islands
1,000
Rumania
Guatemala
100
100
Brazil
Union of Soviet
Socialist Republics
100
Belgium
100

300,000

795,000

3,815,000
24,000
13,000
13,000
8,000
75,000
1,000
5,000
5,000
1,000
1,000
1,000
14,000
2,000
12,000
1,000
1,000
1,000
1,000
1,000
1,000
1,000
1,000
1,000
1,000

'3,815,000

4,000,000

3,816,081

661
m.
m.

800
-

220
~
..
_
-

o
C\J

L. l tm.

TREASURY DEPARTMENT
Washington, D. C.

IMMEDIATE RELEASE

A-372

MONDAY, NOVEMBER 17, 1958.

The Bureau of Customs announced today the following preliminary
figures showing the imports for consumption from January 1, 1958, to
October 31, 1958, inclusive, of commodities for which quotas were established pursuant to the Philippine Trade Agreement Revision Act
of 1955:

Commodity
Buttons ........„.*..

Established Annual
Quota Quantity
807,500

: Unit of
: Quantity
Gross

Imports as of
October 31, 1958
356,464

Cigars

190,000,000

Number

3,362,348

Coconut oil

425,600,000

Pound

173,1^3,3^6

Cordage

6,000,000

Pound

4,069,689

(Refined
Sugars
(Unrefined

1,904,000,000

Pound

Tobacco

6,175,000

29,371,870
1,753,398,5^0
Pound

5,209,901

213
TREASURY DEPARTMENT
//ashinrtcn. D. C.

IMMEDIATE RELEASE

A-372

MONDAY, NOVEMBER 17, 1958,

Commodity

Established Annual
Quota Quantity

Buttons
Cigars

807,500
190,000,000

: Unit of
: Quantity
Gross

Imports as of
October 31, 1958
356,464

Number

3,362,348

Coconut oil ........

425,600,000

Pound

173,163,346

Cordage

6,000,000

Pound

4,069,689

(Refined ........
Sugars
(Unrefined ••••..

1,904,000,000

Pound

XODaCCO ...*>««. e.a.

6,175,000

29,371,870
1,753,398,540
Pound

5,209,901

r-i
LO

COTTON WASTES
(In pounds)
COTTON CARD STRIPS made-from cotton having-a staple of less than 1-3/16 inches in length, COMBER
WASTE, LAP WASTE, SLIVER WASTE, AND ROVING WASTE, WHETHER OR NOT MANUFACTURED OR OTHERWISE
ADVANCED IN VALUEs Provided, however, that not more than 33-1/3 percent of the quotas shall
be filled by cotton wastes other than comber wastes made from cottons of 1-3/16 inches or more
in staple length in the case- of the following countries2 United Kingdom, France, Netherlands,
Switzerland, Belgium, Germany, and Italys

Country of Origin

Established
TOTAL QUOTA

United Kingdom
Canada . • « « © Q
France e • . •- e e «
British India • .
Netherlands • . .
Switzerland . . .
Belgium
Japan. . . . • » . . .
China • « • • • . . e
Egypt
• » . e•
e •
Cuba . . . .
Germany . . . . . 9 9
Italy .

4,323,457
239,690
227,420
69,627
68,240
44,388
38,559
341,535
17,322
8,135.
6,544
76,329
21,263

1,441,152
239,690

6,580

25,443
7,088

6,580

5,482,509

1,687,422

1,599,886

1,447,732

1/ Included in total imports, column 2,
Prepared in the Bureau of Customs.

:
Total Imports
% Established .
Importsl/
• Sept. 20, 1958, to s 33-1/3$ of : Sept. 20, 1958
Nov*
195^
-• ' 12,
-~ -"
•". Total Quota s to Nov^ 12. 1958
1,441,152

1,441,152

75,807
22,747
14,796
12,853

TREASURY DEPARTMENT
Washington, D. C.

""^

IMMEDIATE RELEASE

Monday. November 17« 1QJ58-

A-373

Preliminary data on imports for consumption of cotton and cotton waste chargeable to the quotas
established by the President's Proclamation of September 5, 1939, as amended
COTTON (other than linters) (in pounds)
Cotton under 1-1/8 inches other than rough or harsh under 3/4"
Imports September 20, 1955 - November 12 r 1958
Country of Origin Established Quota Imports^ Country of Origin Established Quota
Egypt and the Anglo- Honduras 752
Egyptian Sudan
783,816
Paraguay
e
2
; ™ •:•;•::•••
^,952
Colombia...
•
British India
2,003,483
Iraq
China
••••
1,370,791
British East Africa ...
hexico
••••
8,883,259
8,883,259
Netherlands E.- Indies .
Brazil
618,723
618,723
Barbados
Union of Soviet
l/other British W. Indies
Socialist Republics ...
475,124
"Nigeria
^ntina
5,203
2/0ther British W. Africa
2
£ a , " • •37
3/0ther French Africa ...
Ecuador
•••
9,333
Algeria and Tunisia ...
1/ Other than Barbados, Bermuda, Jamaica, Trinidad, and Tobago.
2/ Other than Gold Coast and Nigeria.
3/ Other than Algeria, Tunisia, and Madagascar.
Cotton 1-1/8" or more
Imports August 1, 1958 - November 12, 1958
Established Quota (Global) - 45,656,420 Lbs.
Staple Length Allocation Imports
^i^o,°r m°re
1-5/32 or more and under
1-3/8" (Tanguis)
-1-1/8" or more and Tinder
1-3/8" __

39,590,778

1,500,000

967,713

4,565,642

Imports
-871
124
195
2 240
71388
„
21 321
5T77
1^004
689
1

215

TREASURY DEPARTMENT
Washington, D. C.
IMMEDIATE RELEASE

A-373

Monday. November 17« 1958>

Established Quota

Imports'"

Established Quota

Country of Origin

Honduras
783,816
247,952
2,003,483
1,370,791
8,883,259
618,723
475,124
5,203
237
9,333

8,883,259
618,723

Paraguay
Colombia
Iraq
British East Africa ...
Netherlands E. Indies .
Barbados
l/0ther British W. Indies
Nigeria
2/Other British W. Africa
3/Other French Africa ...
Algeria and Tunisia ...

1/ Other than Barbados, Bermuda, Jamaica, Trinidad, and Tobago,
2/ Other than Gold Coast and Nigeria.
,
3/ Other than Algeria, Tunisia, and Madagascar.
Cotton 1-l/8" or more
Imports August 1, l^1?® - November 12, 1958
Established Quota./(Global) - 45,656,420 Lbs.
Staple Length
1-3/8" or more
1-5/32" or more and under
1-3/8" (Tanguis)
1-1/8" or more and under

Allocation
39,590,778

Imports
39,590,778

1,500,000

967,713

c^tz

/Z).

-zTf-

^-|.~

752
871
124
195
2,240
71,388
21,321
5,377
16,004
689

Imports
-

_
-

-aCOTTON WASTES
(In pounds)
COTTON CARD STRIPS made from cotton havings staple of less than 1-3/16 inches in length, COMBER
WASTE, LAP WASTE, SLIVER WASTE, AND ROVING WASTE, 'WHETHER OR NOT MANUFACTURED OR OTHERWISE
ADVANCED IN VALUEs Provided, however, that not more than 33-1/3 percent of the quotas shall
be filled by cotton wastes other than comber wastes made from cottons of 1-3/16 inches or more
in staple length in the case of the following countriess United Kingdom, France, Netherlands,
Switzerland, Belgium, Germany, and Italy*
: Established
Country of Origin
% TOTAL QUOTA
- i
United Kingdom
Canada
France . . .
British India . . . . . .
Netherlands
Switzerland
Belgium
Japan
China
Egypt
Cuba
Germany
Italy

:
Total Imports
s Established :
Imports
Tf
s Sept. 20, 19 58, to s 33-l/3# of : Sept. 20, 1958
; Nov* 12, 1958
1 Total Quota s to Nov. 12. 1958

4,323,457
239,690
227,420
69,627
68,240
44,388
38,559
341,535
17,322
8,135
6,544
76,329
21.263

1,441,152
239,690
.
„
_
_
.
_
.
„
.
6.580

25,443
7.088

6t580

5,482,509

1,687,422

1,599,886

1,447,732

1/ Included in total imports, column 2.
Prepared in the Bureau of Customs.

1,441,152

75,807
22,747
14,796
12,853

d.1 (
TREASURY DEPARTMENT
Washington

STATEMENT BY FRED C. SCRIBNER, JR.,
UNDER SECRETARY OF THE TREASURY, BEFORE
THE SUBCOMMITTEE ON INTERNAL REVENUE
TAXATION OF THE HOUSE COMMITTEE ON WAYS
AND MEANS, RELATING TO THE TAXATION OF
LIFE INSURANCE COMPANIES, 10:00 A'.M".,
NOVEMBER 17, 1958

MR. CHAIRMAN AND MEMBERS OF THE SUBCOMMITTEE:
The Treasury Department welcomes this opportunity
to participate in this hearing called to consider all
aspeets of the subject of taxation of life insurance
companies and to develop information to serve as a
basis for the drafting of permanent legislation on
the subject. We earnestly share the hope which you
have expressed, Mr. Chairman, that these hearings
will provide a full and penetrating discussion of the
problems and issues involved in the taxation of life
insurance companies.
We likewise hope that these hearings will give
this Subcommittee adequate information to enable it
to evaluate the merits of the net operating gain
approach which the Treasury Department has submitted.
As you know, the problem of developing an
equitable tax formula for the proper assessment of
life insurance companies has been under consideration
and discussion for many years. In 19^7 the then
applicable law, adopted in 1942, resulted in no
federal income tax on the life insurance business.
The sequence of events of the last ten years makes
the legislative history of this particular topic one
of the most complex in the field of income taxation.
In 19^9 a subcommittee of the Ways and Means
Committee, after hearings, recommended deferment
of the adoption of permanent legislation and the
A-374

CI'-*
- 2 passage of stop-gap legislation. This recommendation
resulted in the adoption of the 1950 formula which was
effective for the years 1949 and 1950.
New stop-gap legislation was enacted in 1951
converting the reserve and other policy liability
deduction under the 1950 formula into a reduced
rate of tax on net investment income without
deduction for required interest. The 1951 formula
was extended from year to year through the year 195*1.
A subcommittee of the Ways and Means Committee
conducted extensive hearings in 195^, and the members
and staff of this Committee spent many long and
productive hours in a study of this problem.
These hearings, focused as they were on the
excellent and objective report prepared by the
Subcommittee's Staff, provide a wealth of information relating to the nature and scope of the
life insurance business, its long-range character,
the components of its assets and its income, the
different conditions faced by mutual and stock
companies, companies large and small, new and old,
rapidly or less rapidly growing, strong or less
strongly reserved, and on many similar matters.
The result of these hearings and studies was
the adoption of a new law made applicable by its
terms to the 1955 income of insurance companies.
This formula provided reserve and other policy
liability deductions of 87-1/2 percent on the first
million dollars of net investment income and
85 percent on net investment income in excess of a
million dollars. The 1955 law also provided for a
broadening of the net investment income base and
a more adequate treatment of the health and accident
business of life insurance companies.
As the members of this Committee will recall,
the 1955 formula was made applicable to 1955 income
only, subject to the provision that the 19^2 formula
would be automatically effective covering the
income of any year for which an extension was not
enacted. The 1955 formula was made applicable by
legislation to the year 1956.
During 1956 and 1957 the Treasury Department
worked cooperatively with the members of the
Congressional tax staffs, and for a considerable
period
of that by
time
inlife
consultation
with
ahad
group
made
of distinguished
available
actuaries
the
whose
insurance
services
industry
with
been

- 3-

219

the distinct understanding that they would serve as
technicians with no policy forming responsibility
or liability, to develop an equitable permanent
method of taxation which would apply to the 1957
earnings of life insurance companies.
The Department constantly emphasized its belief
that it was desirable that a permanent method of
taxation of life insurance companies be worked out,
if possible, by the industry and the representatives
of the government. Last December, however, it was
apparent that there would not be time for
recommendations to be made and fully considered
and for permanent legislation to be adopted prior
to March 15, 1958.
Under these circumstances, and because a
solution had resisted those wrestling with the
problem for a number of years, attesting to the
complexity of the subject, the Secretary of the
Treasury in identical letters to your Committee and
to the Senate Finance Committee indicated that it
appeared reasonable to extend the 1955 stop-gap
formula and make it applicable to 1957 income. While
the Treasury went along with an extension of the
1955 legislation making it applicable to 1957 income,
it was made abundantly clear by the Secretary and
other Treasury representatives that recommendations
for permanent legislation would be submitted in the
near future and that the Treasury would oppose a
further extension of the 1955 stop-gap legislation.
On April 10th the Secretary submitted suggestions
for the permanent taxation of life insurance companies.
These proposals have been the focal point of very
helpful discussions within the life insurance industry.
The life insurance industry has the confidence of
the American people, a trust which we in the Treasury
Department believe is justified and of which this
great industry may be justly proud. We have received
the most excellent cooperation from all representatives
of the insurance industry. In considering the Treasury
proposals, the industry has proceeded on the basis
that the time has arrived for the adoption of an
equitable permanent formula for the taxation of life
insurance companies. The industry has been most
ready to make available every bit of information about

- 4the industry which the Treasury Department requested,
and to make the time of their able officers, actuaries
and staff people available both to the representatives
of Congressional committees and to the Department.
We do believe that a sound tax formula can and
should correct the inadequacies of the present
treatment in a manner which will permit the life
insurance industry and all segments of it to move
forward on a sound and healthy basis. We fully
realize that in this area we are dealing with
institutions which are the custodians of the life
insurance protection and savings of millions of
American families. A proper tax structure for these
important institutions will insure the continued
performance of their essential functions in the
American economy without tax advantages for either
one group or another in the industry.
In my opinion it is fair to say that the life
insurance industry recognizes its obligation to
bear its fair share of the Federal tax burden levied
on the citizens and corporations of this country by
the Congress to produce the funds necessary for the
defense of our country and to perform essential
governmental operations necessary for the welfare
of our people.
There is disagreement as to how much of the
heavy Federal tax load this industry should bear.
I do not believe there is disagreement on the point
that the profits and earnings of this industry should
carry some share of the obligation of financing
governmental operations of the United States.
The legislative situation which we confront
today is that if no legislation is adopted by the
next session of the Congress with respect to the
calendar year 1958, life insurance companies will
be taxed under the provisions of the 19^2 formula,
including the improvements embodied therein by the
Life Insurance Company Tax Act of 1955. Under the
19^2 formula, it is estimated that their tax
liability will total approximately $500 million.
The Treasury Department is aware of the deeply
rooted feeling within many sectors of the life
insurance industry that the best permanent tax
formula is that based on a portion of net investment

- 5 income. Most now agree that any permanent formula
should contain provisions which would reach companies
that have large underwriting profits but little if any
investment income. There is also opinion within the
industry which regards the investment income basis and
the 85 percent deduction permitted by the 1955 stopgap formula as synonymous. We do not share that
opinion. In the area of investment income, a realistic
formula would take into account the actual difference
between interest required for policy contracts and the
amount the companies in fact earn on investments.
There are a number of other investment income
formulas whieh would provide margins of taxable
income more in accord with current conditions in
the life insurance industry. The industry data
reflected in the deduction ratios provided by the
1942 formula and the 1950 formula, for example,
make it evident that the 85 percent deduction under
the 1955-57 stop-gap is substantially out of proportion
to the actual reserve and other policy interest
requirements of the companies under conditions now
prevailing. The 1950 formula, which measures with
considerable accuracy the proportion of investment
earnings required to fulfill interest obligations
to policyholders, would currently permit a deduction
of about 68-1/2 percent based on conditions prevailing in 1957. Prevailing trends indicate this
deduction figure would be lower on the basis of
1958 experience. In 1958, the 1950 formula would
result in about $613 million revenue.
It is true that formulas adopted for the
taxation of life insurance companies since 1921
have taken investment income as a measurement of the
tax base. However, at the time the 1921 law was
enacted, the life insurance business was much more
homogeneous than it is today. Such business as
group insurance, credit insurance, and accident
and health insurance were not major income producers
for life insurance companies. While there were even
then shortcomings in the investment income approach,
it could be justified under those conditions. Now
large and increased amounts of insurance are being
sold with substantial underwriting profits, which,
however, produce relatively little investment income.
While
major
reliance
may
still
be
placed
on
the
We
existing
conditions
representations
traditional
suchhave
should
as
not
gain
given
law
be
and
investment
from
life
ignored.
trends,
most
which
underwriting
insurance
careful
have
other
income
been
companies
attention
sources
base,
and
made
capital
under
that
of
are
to
income,
under
present
overtaxed.
gains

The records of life insurance operations do not support
these contentions. The tax formulas applicable to the
companies' income have in the past and should in the
future continue to exempt interest earnings dedicated
to meeting reserve interest needs and other contractual
commitments to policyholders. Moreover, interest on
savings in the form of life insurance policy
reserves are virtually exempt from personal income tax.
At the end of calendar year 1957, the life insurance
Industry had total assets of approximately $101-1/2
billion. The industry in the year 1957 had net
investment income of $3-1/2 billion and had a net
operating gain after payment of all policy dividends
and refunds to policyholders of approximately $1.1
billion. The total Federal income tax liability of
life insurance companies as a group for calendar year
1957, including their substantial accident and health
insurance departments, was about $293 million, or
roughly 26 percent of their net operating gain. Had
they been taxed on the usual basis for business
corporations, they would have paid a tax at the rate
of 52 percent, which would have brought in about
twice the dollar collection which was actually received.
The growth of equity values in life insurance
companies is an impressive fact, and statements have
been made that this is at least partly due to the
effective rate of tax on the industry. Certainly there
is little or no pragmatic evidence that suggests that
the life insurance industry, comparatively speaking, is
adversely affected by its share of the country's tax
burden.
We are fully aware that within the insurance
industry we are dealing with mutual companies and
with stock companies. We are dealing, too, with
some companies which possess vast assets and some
only beginning business life. Within the framework
of the industry companies may be found which comprise
every combination of various types of insurance
business. Any formula adopted must be one which
will not discriminate against any particular type of
company and one which will give fair treatment to
the oldest company and to the newest entrant into
the industry.

- 7-

<2j

What is needed is a formula which will reasonably
reflect each company's capacity to pay. We have had
many helpful suggestions and much sound advice from
individuals and associations in the life insurance
industry since the Secretary's letter was written
last April. We are most desirous of having the
benefit of all the testimony which will be produced
at this hearing. We believe such testimony will
do much to clarify the issues and to furnish a
basis for the determination by the Committee of an
approach which will fairly measure the tax burden
which the various companies in the industry should
bear.
We respectfully suggest that this Committee
give its first consideration to a method of taxation
for life insurance companies which will bring the
conception of what is taxable income for such
companies into closer conformity with the facts.
Such a conception should reflect, to the fullest
extent practicable, the full net earnings of life
insurance companies. It should, of course, provide
comprehensive deductions for all expenses, interest
and reserve requirements and amounts paid or made
available to policyholders. The starting point
for measuring net earnings should, we suggest, be the
figure for "net gain from operations after dividends
to policyholders", which figure is included by each
life insurance company in its annual statement to
State insurance departments. In conformance with
general rules for computing taxable income adjustments such as those for tax exempt interest, Federal
income taxes paid, and depreciation on the insurance
business property account would be required.
The resulting tax base would include the margin
of investment income above amounts needed on policy
reserves, gain from better than assumed mortality
experience, and profits arising from the difference
between the expense "loading" portion of premiums
and actual expenses. Deductions would be allowed for
dividends paid to policyholders and amounts added to
policy reserves.
Recognizing the long-range character of life
insurance business, consideration perhaps should be
given to the adoption of a longer loss-carry-back
provision
type
corporations.
smallof
and
special
new
for companies.
life
There
allowance
insurance
also may
or companies
relief
well be
feature
need
thanfor
foraother

It may appear advisable to provide for a gradual
transition to the new method over a three to five-year
period. During this transition, the tax would be
computed as a weighted average of the tax under the
new method and the tax under the present stop-gap
method, with gradually increasing weight to the new
method.
The tax base discussed above would exclude amounts
paid to, or set aside irrevocably for the benefit of
any policyholder or group of policyholders. It would
exempt additions to policy reserves including interest
thereon; all cash insurance benefits made available to
policyholders or their beneficiaries; and policy
dividends or similar rebates paid or refunded to
policyholders.
In our studies and discussions with the consultants
made available by the life insurance industry, we have
given attention to possible adjustments in policy
reserves and related items for tax purposes. The
objective of such adjustments would be to take account
of the effect of different methods of reserve valuation,
varying reserve interest assumptions, past and future
reserve strengthening operations, differences between
mutual and stock companies, and certain otner factors.
We believe also that there is substantial merit
in an adjustment for companies with reserves based
on a preliminary term method of valuation.
Another adjustment which appears to deserve
favorable consideration is one which would take account
of deficiency reserves in existence on the effective
date of the suggested plan. These particular
reserves may be considered equivalent to an allocation
of previously accumulated surplus, and in this light
their recovery back into surplus would not constitute
current earnings which should be subject to tax,
A group of mutual life insurance companies is
sponsoring H.R. 13707. This legislation is specifically
limited in its application to mutual life insurance
companies. It incorporates a series of special
deductions from net operating gain which do not appear
to have clear business justification. The cumulative
effect of these allowances make the bill unacceptable
to the Treasury in its present form. However, we

- 9believe that by amendment which would result in
eliminating the objectionable deductions, the bill
might be made a starting point for the developing
of a satisfactory formula based on the net operating
gain approach.
While we have considered in detail the many
objections which have been made to the net operating
gain approach, it is our belief that a formula along
the lines which we have outlined is workable and would
produce an equitable result.
We recognize, however, that the Committee after
hearing the testimony of the insurance industry may
desire to consider legislation more in line with the
present method of taxation of life insurance
companies. If legislation of this nature is
considered, we respectfully renew the suggestion made
in the Secretary's submission of last April that the
portion of investment income subject to tax accord
with the prevailing margin of investment income above
required interest for policyholders, which margin is
now more than 30 percent for the industry as a whole.
This revised investment income base should be
supplemented with appropriate recognition of underwriting gain elements now disregarded. A new formula
of this type should assure a more appropriate tax on
those companies with relatively small amounts of
investment income and substantial income from insurance
and underwriting, now entirely exempt from taxation.
Whatever tax formula is applied to the ordinary
income of life insurance companies, their capital
gains and losses should no longer be disregarded for
tax purposes.
We look forward to the discussions which will
take place during these hearings and anticipate that
very real assistance will be given by the industry in
the resolution of the problems which we have pointed
out. The Treasury wishes to re-emphasize the fact
that while it has presented here two possible methods
of reaching a satisfactory formula, we have approached
these hearings without reaching a fixed position and
are prepared and desire to weigh carefully all the
material which the insurance industry will present.
The staff of the Treasury Department is ready and
desirous of assisting youroOo
Committee in your further
work on all aspects of the long range tax basis for
life insurance companies.

226

mrmbor 4# i*Si

mami* P MU, PWff V Wife
tt* foil©*! if transition® mm »«S© in direct and guaranteed securities
of the government for Treasury lsveetneafc* mM other accounts during the Boatfe
©f October, 1953a
fturehMWft #17,648,000.00
Sales
Net Purchases

(Sgd) Cfearle* I, Areaum

Chief, Inr««fMMt* Branch
MTlsion of Deposits & ^nveetaeate

TREASURY DEPARTMENT
WASHINGTON. D.C

IMMEDIATE RELEASE,

%/*r*
During SmmmmmimeT 1958, market
transactions in direct and guaranteed
securities of the government for Treasury
investment and other accounts resulted in
net purchases by the Treasury Department
of A-~ *"

0O0

TREASURY DEPARTMENT
WASHINGTON, D.C.

IMMEDIATE RELEASE,
Monday, November 17, 1958*

A-375

During October 1958, market
transactions in direct and guaranteed
securities of the government for Treasury
investment and other accounts resulted in
net purchases by the Treasury Department
of $17,3^7,000.

/ ya>
HI&E&SE A. n. HEWSPAHRS,
Tuesday, November 18, 1958 <

The Treasury Department announced last evening that the tenders for H , 800,000,000,
or thereabouts, of 91-day Treasury bills t© be dated November 20, 1956* &»d t© mature

February 19, 1959, which were offered on November 13, were opened at the Federal ieser
Banks on November 17 •
The details of this issue are as followss
Total applied for - $Z.99B,07k,OCX)
Total accepted
- 1,802,871,000

(includes 1301,272,000 entered on a
noncompetitive basis and accepted in
full at the average price shown below)

Range of accepted competitive bids?
High
low

• 99.300 Equivalent rate of discount approx. 2.769% per annum
- 99.272
*
n
m
n
2«880# pmr annum
- 99.273

« « » approx. 2.876$ pmr mwm

(76 percent of the amount bid for at the loir prism was accepted)
Federal Reserve
District

fotal
Applied for

Boston
New York
Philadelphia
Cleveland
Richmond
Atlanta
Chicago
St. Louis
Minneapolis
Kansas City
Dallas
San Francisco

•

$
16,087,000
1,165,596,000
19,055,000
31,538,000
20,755,000
27,923,000
326,095f000
21,301,000
16,853,000
3fe,93G,000
23,81*6,000
9M92,000

^2,998,07lt,,000

$1,802,871,000

3h9Mt,000
2,105,307,,000
5i*,890,,000
59,797,,000
36,555,,000
32,025,,000
382,625,,000
25,031*,,000
21,817,,000
6*1,390,,000
214,796,,000
156.1*96,,000

TOTAL

jJ\V

Total
Accepted

TREASURY DEPARTMENT
WASHINGTON, D.C.
RELEASE A. M: NEWSPAPERS,
Tnesday, November 18, 1958.

The Treasury Department announced last evening that the tenders for $1,800,000,000,
or thereabouts, of 91-day Treasury bills to be dated November 20, 1958, and to mature
February 19, 1959, which were offered on November 13, were opened at the Federal Reserve
Banks on November 17 •
The details of this issue are as follows s
Total applied for - $2,998,07*4,000
Total accepted
- 1,802,871,000

(includes $301,272,000 entered on a
noncompetitive basis and accepted in
full at the average price shown below)

Range of accepted competitive bids*
High - 99.300 Equivalent rate of discount approx, 2.169% per annum
Low
- 99.272
»
n
«
tt
2*880^ per annum
Average - 99.213

w IT w approx. 2.876$ per annum

(76 percent of the amount bid for at the low price was accepted)
Federal Reserve
District

Total
Applied for

Total
Accepted

Boston
New York
Philadelphia
Cleveland
Richmond
Atlanta
Chicago
St. Louis
Minneapolis
Kansas City
Dallas
San Francisco

TOTAL

3*4,3*42,000
2,105,307,000
5*4,890,000
59,797,000
36,555,000
32,025,000
382,625,000
25,03*4,000
21,817,000
6*4,390,000
2*4,796,000
156,*J96,000

16,087,000
1,165,596,000
19,055,000
31,538,000
20,755,000
27,923,000
326,095,000
21,301,000
16,853,000
3*4,930,000
23,8*46,000
98,892,000

$2,998,07*4,000

$1,802,871,000

- 3-

231

Safe the mm >5/3* certificate aodttomv >J^i* not* will be

will be payable on tfa* new eertlfieat*
my A$ mm* Kove^bar *$ # iftp* Interest oa tfce ac
a m*mm*Lmmm*X basis on May 15 and aoveaber 15, in
will %• aai* mm of Steeper 1, *§?§» aad in the e m of the

*> *\W9**$ -*mwimMm WB liPg5gigggp.| ^s^Wi *»*m

Juae U, im» to Seeeata* 1, 1^3, viU be paid tollovim
fessis* 4 fepaeM of $»f@ per #1,008
$1.25 per i%9m0 mm

v*lm #£ m

will bs paid t# iaoliers
books will be open Soveaber 19

i& the mil b**bre mMmM*m m**®* *mm$mt §*, mm %m

- 2•

232
Another important debt management objective, from the standpoint of
marketing technisjuaa, In to place on a routine basis, so far e^ jracticable,
the r s a & * e w ot 18m Trmmmwy debt ssfeiriag witbla one year, ffee amount
outstaying at m $iven tiae will tend to vary considerably, depending on the
liquidity meeds of the e e e m y and on the ability of the Oreasury ts extend the

the ajaount of market disturbance occasioned by refinancing, and also affects
Treasury borrowing ccste•
A* the second step in its program to achieve a better composition of the
short-tern debt, the Treasury also announced that it plans & re-arrangement of
the structure of its weekly bill aaturitiee. Accordia^ly, on Iteceafcer 11, X$$&$
the Treasury will inaugurate a prograa to move gradually over the next 6 months
from the present cycle of X$*m*mk bills (|g$J* bilUon total) to a aev cycle
v&teh v i U iaelae^ both IJ-week and 26-week bills (^26.0 bilUon total).
Full details of the program viil be rjmouneed durin* the veex preceding the

The shift of pert of the volume of Treasury bilOjs outstanding to a
i6*week eyele will enable certain corporations and other Jjaveetore t© aeet
their requiresKsrts for a regular bill which is longer than the present l > w a k
maturity. In the ccaaree of the transition to the new cycle of Treasury bills,
a total of $2.6 billion of new money will be raised during the next three
mamm,

thus aeeting isore than half ©f the f£reaeury'« anticipated cash borrowing

needs of $fc - $k~i/2 Mellon through March 1959.

Increases in the amount of

outstanding bills under this program, together with continuing efforts-to extend
the debt, ehmXA permit a reduction in ^ e a s w y certificates ©f indebtedness
outstanding over the period ahead, so that the over-all volume of short-tens
debt would not be increased.

23J
mmm w.m.

mmWBmMmm^m^

&~J / j
Mm its

» » first of these steps is %mm m m m

*» SmMmm

of « M » eiUioB

#f >>•/*# se***f*e*t*s #f iadewtedaesa staring lee***** * «J*V *** tt*
holders of |if ^feS atiUioa of i~i/«# Treasury bond* maturing Deceefcer 15, 1953,
the tmmimm

*» «a**gi tHee* &oldia*e to either of two mm issues;

isrise of J9.jp* ®f face value, to yield.-.**£»- ar »J4^I**•** f~V*
note due May Ife.tfti*** "*» £•«•* *M %,**%** 4*fJM0sf t* §mm
yield ^6o£.

its financing will

tie federal %m*wm of its swnetery policy. la

offering also works in tbe direction of a mmm mm* dlstribntiom
of tin

236
TREASURY DEPARTMENT
W A S H I N G T O N . D.C.
RELEASE P.M. NEWSPAPERS
TUESDAY, NOVEMBER 18, 1958

The Treasury Department announced today two further steps in its program
to achieve a more orderly scheduling of its short-term debt maturities.
The first of these steps is the offering to holders of $9,833 million
of 3-3A$ certificates of indebtedness maturing December 1, I958, and the
holders of $2,368 million of 2-1/2$ treasury bonds maturing December 15, 1953,
the opportunity to exchange these holdings for either of two new issues:
A 3-3/8$ 11-1/2 month certificate due November 15, 1959, to be issued at a
price of 99.95$ of face value, to yield 3.43$, or a 3-5/8$ 2-year 5-1/2 month
note due May 15, I96I, to be issued at a price of 99-7/8$ of face value, to
yield 3.68$.
With the completion of this financing, over 80$ of outstanding Treasury
marketable securities maturing within the next ten years (excluding regular
Treasury bills and tax anticipation securities) will fall due in February,
May, August, or November.
For some time, the Treasury has been working toward scheduling its
maturities on these quarterly dates to reduce the number of times each year
its financing will interfere with other borrowers such as corporations, states,
municipalities, etc.; to minimize the "churning" in the money markets on the
major quarterly corporate income tax dates; and to facilitate the effective
execution by the Federal Reserve of its monetary policy. In addition, the
present offering also works in the direction of a more even distribution of
the amounts of certificates maturing on each of the four quarterly dates.

235
Another important debt management objective, from the standpoint of
marketing techniques, is to place on a routine basis, so far as practicable,
the roll-over of the Treasury debt maturing within one year. The amount
outstanding at a given time will tend to vary considerably, depending on the
liquidity needs of the economy and on the ability of the Treasury to extend the
debt. The composition of the short-term debt, however, influences to a degree
the amount of market disturbance occasioned by refinancing, and also affects
Treasury borrowing costs.
As the second step in its program to achieve a better composition of the
short-term debt, the Treasury also announced that it plans a re-arrangement of
the structure of its weekly bill maturities. Accordingly, on December 11, 195$/
the Treasury will inaugurate a program to move gradually over the next 6 months
from the present cycle of 13-week bills ($23.^ billion total) to a new cycle
which will include both 13-week and 26-week bills ($26.0 billion total).
Full details of the program will be announced during the week preceding the
offering.
The shift of part of the volume of Treasury bills outstanding to a
26-week cycle will enable certain corporations and other investors to meet
their requirements for a regular bill which is longer than the present 13-week
maturity. In the course of the transition to the new cycle of Treasury bills,
a total of $2.6 billion of new money will be raised during the next three
months, thus meeting more than half of the Treasury's anticipated cash borrowing
needs of $4 - $4-l/2 billion through March 1959-

Increases in the amount of

outstanding bills under this program, together with continuing efforts to extend
the debt, should permit a reduction in Treasury certificates of indebtedness
outstanding over the period ahead, so that the over-all volume of short-term
debt would not be increased.

- 3-

23%

Both the new 3-3/3$ certificate and the new 3-5/8$ note will be dated
December 1, 1958.
Interest will be payable on the new certificates on a semiannual basis
on May 15 and November 15, 1959.

Interest on the new notes will be payable

on a semiannual basis on May 15 and November 15, in each year.
Exchanges will be made as of December 1, 1958, and in the case of the
maturing bonds with an adjustment of interest as of that date. Coupons
dated December 1, 1953, should be detached from the maturing certificates and
cashed when due.

In the case of the bonds, coupons dated December 15, 1958,

must be attached to the bonds when surrendered and accrued interest from
June 15, 1958, to December 1, 1953, will be paid following acceptance of the
bonds. A payment of $.50 per $1,000 face value of the new certificates, and
$1.25 per $1,000 face value of the new notes representing the discount from
the face values will be paid to holders upon issuance of the new securities.
The subscription books will be open November 19 through November 21
for this exchange offering. Any subscription for either issue addressed
to a Federal Reserve Bank or branch, or to the Treasurer of the United
States, and placed in the mail before midnight Friday, November 21, will be
considered as timely.

- 3 -

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 i&k (b) and 1221 (5) of the Internal Revenue Code of
195*4 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. 1*18, Revised, 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.

238

2 percent of the face amount of Treasury bills applied for, unless the tenders a
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 Re-

serve Banks and Branches, following which public announcement will be made by th
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 o
all tenders, in whole or in part, and his action in any such respect shall be

final. Subject to these reservations, noncompetitive tenders for $200,000 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. Settlement for accepted

tenders in accordance with the bids must be made or completed at the Federal Reserve Bank on November 28, 1958 , in cash or other immediately available funds
or in a like face amount of Treasury bills maturing November 28, 1958 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.
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 195*4. 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 princ

or interest thereof by any State, or any of the possessions of the United States,

239

TREASURY DEPARTMENT
Washington
A. M.
R8& RELEASE/ 1181083*8 NEWSPAPERS,
Thursday, November 20, 1958 .
m

y
A- _

O-, ^ ) fi
-^J
y fi

/
V

$ 1,799,958,000 , to be issued on a discount basis under competitive and n
competitive bidding as hereinafter provided. The bills of this series will be

dated November 28, 1958 , and will mature February 26, 1959 , when the fac
_
^z
_
mm
^ T ^ ~
amount will be payable without interest. They will be issued in bearer form only,

and in denominations of $1,000, $5,000, $10,000, $100,000, $500,000 and $1
(maturity value).
Tenders will be received at Federal Reserve Banks and Branches up to the
one-thirty
closing hour,/toBf o'clock p.m., Eastern Standard time, Monday, November 24, 1958 ..

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 ten

the price offered must be expressed on the basis of 100, with not more th

decimals, e. g., 99*92$. Fractions may not be used. It is urged that tende

be made on the printed forms and forwarded in the special envelopes which
supplied by Federal Reserve Banks or Branches on application therefor.
Others than banking institutions will not be permitted to submit tenders

except for their own account. Tenders will be received without deposit fro

incorporated banks and trust companies and from responsible and recognize

in investment securities. Tenders from others must be accompanied by paym

TREASURY DEPART
mww.M,rixBBTnrrsrrws.v?.^

mafmMmmgmmvam^^vj^'^wra^WmU.Lii..

W A S H I N G T O N , D.C.

RELEASE A.M. NEWSPAPERS,
Thursday, November 20, 1958.

A-378

The Treasury Department, by this public notice, invites tenders
for $ l,o00,000,000,or thereabouts, of 90-day Treasury bills, for
cash and in exchange for Treasury bills maturing November 28, 1958,
in the amount of $1,799,938,000, to be issued on a discount basis
under competitive and non-competitive bidding as hereinafter
provided. -The bills of this series will be dated November 28, 1958,
and will mature February 26, 1959, when the 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, $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, one-thirty o'clock p.m., Eastern Standard time,
Monday, November 24, 1958.
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.
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 such respect shall be
final. Subject to these reservations, non-competitive tenders for
$200,000 or less without stated price from any one bidder will be
accepted in full at the average price (in three decimals) of accepted

9QQ
C\J y

KSSLWL
TREASURY DEPARTMENT

Washington

^L.
"A " " /)

A. M.
RSR RELEASE/ M»RK£»8 NEWSPAPERS,
Thursday, November 20, 1958
The Treasury Department, by this public notice, invites tenders for
$1,800,000,000 , or thereabouts, of 90 -day Treasury bills, for cash and
in exchange for Treasury bills maturing November 28, 1958 , in the amount of
$ 1,799.958,000 , to be issued on a discount basis under competitive and noncompetitive bidding as hereinafter provided.

The bills of this series will be

dated November 28, 1958 , and will mature February 26, 1959 , when the face

?sr

amount will be payable without interest. They will be issued in bearer form only,
and in denominations of $1,000, $5,000, $10,000, $100,000, $500,000 and $1,000,000
(maturity value).
Tenders will be received at Federal Reserve Banks and Branches up to the
one-thirty
closing hour,ftsas. o*clock p.m., Eastern Standard time, Monday, November 24, 1958 •
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.
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

TREASURY DEPART
W A S H I N G T O N , D.C

RELEASE A.M. NEWSPAPERS,
Thursday, November 20, 1958.

A-378

The Treasury Department, by this public notice, invites tenders
for $ 1,800,000,000,or thereabouts, of 90-day Treasury bills, for
cash and in exchange for Treasury bills maturing November 28, 1958,
in. the amount of $1,799,938,000, to be issued on a discount basis
under competitive and non-competitive bidding as hereinafter
provided. -The bills of this series will be dated November 28, 1958,
and will mature February 26, 1959, when the 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, $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, one-thirty o'clock p.m., Eastern Standard time,
Monday, November 24, 1958.
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.
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 such respect shall be
final. Subject to these reservations, non-competitive tenders for
$200,000 or less without stated price from any one bidder will be
accepted in full at the average price (in three decimals) of accepted

- 2 competitive bids. Settlement for accepted tenders in accordance
with the bids must be made or completed at the Federal Reserve Bank
on November 28, 1958, in cash or other immediately available funds
or in a like face amount of Treasury bills maturing November 28, 1958
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.
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 actuallyreceived 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. 4l8, Revised, 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.
0O0

•'-

yi
-

- -, ,
-l/y

HKLBJUSE A. If. NarSPAPERS,
Ummfays<nmmbmr
25> 1953&
•" *l>h,J*' •!
——«—*-*

tenders in accordance
federal Reserve Bank
th@
d.i**-- "";" available funds
w4hft.Tvmu*p Department announced last evening tfeat th* tender* for ^1,800,000,000,
"asn a: e ., I. m - jenaers WIJ.1 C .*•
Anient
«agiii
or theraabiHits^ of 90-day Treasury billa.to be dated mrmhmr 28, 1956, ****** mature
manuring bil'g acceo - *d Ir * .
• price tt the new
February 26, 1959, which were offered ©n lovember 20, were opmm& at th® Federal Reserv<

Bank® on Mrmb@r,2k.
,za.,: ,-« . >*
aThe details of,this lasua are as follows?
n

*' » S L S « •*?"»•

„.- i : • ,? .-«••

ir total-applied for - #2,831,068,000
tcTotal accepted
-=L*lJ8Q3i322.000

(include® 1285,360,000 entered en a- ^ r s ; ^
mmmpm%ltlvm
bails and accepted in > s ^
full at the avaraga price shown below)

" Rang* o€vaeeep4ed competitive bidsi.4
Ji.-.ls are riglr***
•
be High
t- »J * - 99.326 B^uivalent rate of discount 2.696$ per annus* ••f.e'Lav . Code sf •- 99.317 **o-.wv«, o.>. « ^ « fnt « t 2.132% '«: le it opu^d
hereunder ar$ -.! i* «*? considered w^ a c e a I __.L such bills
A w a g e rc^--<-^ - 99.319 ' n '"'*-'•'-' * • « s « -,l* *
-appro*. 2.?23$ per annum
erciua^d froa- or* *«: ration as capital »^aet- .
jrd' tt-: .:'
owner (58 **•*****£ the amount-bid for "at"8 the 1M priee irae aeeeptedf ^ v
Issued liei'eund
difference bet
FederalTHe0*rve
fotal3
District eltne
Applied for _ -"j
Accepted*" -x*

»,••-.

*loaton
lew fork
Philadelphia. - L
Cleveland
, Richmond ..
* Atlanta
Chicago
St.
Minneapolis
KfefiMS-City
Dallas
San Francisco

toils

TOTAL 4|2,831,068,000 $1,803,322,000

fuA

•
39,033,000
2,056,342,000
42,182,000
5£,?49»QO©
18,192,000
30^530,000
309,108,000
27,511,000
18,667,000
66,624,000
27,553,000
142,277,000

- ••

25,233,000
1,304,667,000
1?,342,Q00
W,5$f#000
>* 17,366,000
28,574,000
180,983,000
27,311,000
14,257,000
48,206,000
21,532,000
67,262,000

TREASURY DEPARTMENT
242
W A S H I N G T O N , D.C.
RELEASE A, M. NEWSPAPERS,
Tuesday, November 25, 1958 •

A-379

The Treasury Department announced last evening that the tenders for $1,800,000,000,
or thereabouts, of 90-day Treasury bills to be dated November 28, 1958, and to mature
February 26, 1959, which were offered on November 20, were opened at the Federal Reserve
Banks on November 24*
The details of this issue are as follows:
Total applied for - $2,831,068,000
Total accepted
- 1,803,322,000

(includes $283,360,000 entered on a
noncompetitive basis and accepted in
full at the average price shown below)

Range of accepted competitive bids:
High
Low

- 99,326 Equivalent rate of discount 2.696% per annum
w
- 99.317
n
u
n
2.132% »«
"

Average

- 99.319

approx. 2.123% per annum

(58 percent of the amount bid for at the low price was accepted)
Federal Reserve
District

Total
Applied for

Total
Accepted

Boston
New York
Philadelphia
Cleveland
Richmond
Atlanta
Chicago
St. Louie
Minneapolis
Kansas City
Dallas
San Francisco

$
39,033,000
2,056,342,000
42,182,000
52,749,000
18,492,000
30,530,000
309,108,000
27,511,000
18,667,000
66,624,000
27,553,000
142,277,000

$2,831,068,000

$1,803,322,000

TOTAL

25,233,000
1,304,667,000
17,342,000
50,589,000
17,366,000
28,574,000
180,983,000
27,311,000
14,257,000
48,206,000
21,532,000
67,262,000

Comparison of principal items of assets and liabilities of active national banks - Continued

— (In thousands of dollars)
Sept. 24,
1958

June 23,
1958

Oct. 11,
; 1957

Increase or decrease
since June 23. 1958
Amount
:Percent

Increase or decrease
since Oct. 11, 1957
Amount
: Percent

LIABILITIES
Deposits of individuals, partnerships, and corporations:
Demand
..56,580,477
55,115.495 56,410,493
1,464,982
2.66
169,984
.30
T:Lme
_
32,215,034
31,329,692 28,737,084
885,342
2.83
3,477,950
12.10
Deposits of U. 3. Government
2.559,100
4,984,492
2,394,655
-2,425,392
-48.66
164,445
6.87
Postal savings deposits
9,906
10,308
11,284
-402
-3.90
-1,378
-12.21
Deposits of States and political
subdivisions
8,042,579
8,611,982
7,176,372
-569,403
-6.61
866,207
12.07
Deposits of banks
8,959,581
8,685,161
8,403,799
274,420
3.16
555,782
6.61
Other deposits (certified and
cashiers * checks, etc.)
1,430,623
1,669,619
1,274,991
-238,996
-14.31
155,632
12.21
Total deposits
109,797,300 110,4o6,749 104,408,678
" -609,44-9 " -.55
5,388,622
5.16
Bills payable, rediscounts, and
other liabilities for borrowed
money
998,291
491,502
1,020,221
506,789
103.11
-21,930
-2.15
Other liabilities
2.038.444
2.094.910
1.996.776
-56.k66
-2.70
41,668
2.09
Total liabilities, excluding
capital accounts
_ 112 ,_834,035 112,993,161 107,425,675
-159.126
-.14
5,408,360
5.03
CAPITAL ACCOUNTS
Capital stock:
Common...
2,926,967
2,865,116
2,768,755
61,851
2.16
158,212
5.71
Preferred
..
3.492
2,743
3.775
749
27.31
-283
-7.50
Total
2.18
157,929
"5.70
J ___2 1 33£42T._ 2,867,859 _.2,_77J,53l__"^^76gI""
Surplus
4,558,635
4,514,485
4,320,927
44,150
.98
237,708
5.50
Undivided prof its
1,862,819
1,839,600
1,730,206
23,219
1.26
132,613
7.66
Reserves
268.871
253.710
238.524
15.161
5.98
30.347
12.72
Total surplus, profits and
reserves
6,690.325
6.607.795
6.289.657
82,530
1.25
400.668
6.37
Total capital accounts
9.620.784
9.475.654
9.062.187
145,130
1.53
558.597
6.16
Total liabilities and
capital accounts
122,454_L8_lj_ 122,468,815__ll6,487,862
^L29_6
-^Ol
5,966,957
5.12
RATIOS:
Percent
Percent
Percent
U.S.Gov't securities to total assets
28.81
28.25
26.53
Loans & discounts to total assets
41.37
41.56
42.83
NOTE: Minus sign denotes decrease.
Capital accounts to total deposits
8.76
8.58
8.68

statement showing comparison of principal items of assets and liabilities of active national oamcs

as of September 24, I958, June 23, 1958 and October 11, 1957
(In thousands of dollars)

3±.

OJ
Number of banks

Sept. 24,
1958

June 23,
1958

4,599

4,606

Oct. 11,
1957
4,641™

ASSETS
;Commercial and industrial loans.... 21,385,093 21,426,872
12,759,900
Loans on real estate.
13,205,572
All other loans, including over17,713,632
drafts
17,092,949
Total gross loans
51,683,614 51,900,404
Less valuation reserves...... 1,018,842
997,971
Net loans
50,664,772 50,902,433
U. S. Government securities:
Direct obligations
35,281,644 34,599,192
Obligations fully guaranteed
3,430
2,813
Total U. S. securities
35.285,074 34.602.005
Obligations of States and politi8,364,896
cal subdivisions
8,688,802
2,045,247
Other bonds, notes and debentures..
1,948,482
Corporate stocks, including stocks
274,438
of Federal Reserve banks...
277,829 45,286,586
Total securities
46,200,187
Total loans and securities.... 96,864,959 96.189,019
Currency and coin
1,636,997
1,565,247
Reserve with Federal Reserve banks. 11,109,796
11,261,086
Balances with other banks
10,614,775
11 ,.206,101
Total cash, balances with
other banks, including reserve balances and cash
items in process of collection
_21^6Li68_Jiu022^^
OtherTotal
assets
^
assets
122,454,819 122.468,815

Increase or decrease
since June 23, 1958
Amount
:Percent
-7

Increase or decrease
since Oct. 11. 1957
Amount
Percent
-42
-490,580
898,231

-2.24
7.30

-3.50
-.42
2.09
.47

477,798

2.88

682,452
617
683,069

1.97
21.93
1.97

4.377,375
899
4,378,274

14.16
35.52
14.17

7,452,643
1,631,550

323,906
-96t765

3.87
-4.73

1,236,159
316,932

16.59
19.43

251,494
40,242,487
90,138.063
1,307,011
11,851,510
11,049,877

3,391
913,601
675,940
71,750
-151,290
-591,328

1.24
2.02
.70
4.58
-1.34
-5.28

26,335
5,957,700
6,726,896
329,986
-741,714
-435,102

10.47
14.80
7.46
25.25
-6.26
-3^94

-670,868
-19,068

-2.79
"" -.85

-846,830
"86,891
5,966,957

-3.50

21,875,673
12,307,341

-41,779
4^5,672

-.19
3.49

16,615,151
50.798,165
902,589
49,895.576

-620,683
-216,790
20,871
-237,661

30,904,269
2,531
30,906,800

Z^MjiOl
116,487,862

-13,996

-.01

885,^9
116,253
769,196

1.74
12.88
1.54

47ocT
5.12

^» r y

modernization and installment cash loans, and single-payment loans) of $10,600,000,0
increased about 1.6 percent since June. The percentage of net loans and discounts
(after deduction of valuation reserves) to total assets on September 24, 1958 was
41,37 in comparison with 41.56 in June and 42.83 in October 1957.
Total investments of the banks in bonds, stocks, and other securities aggregated $46,200,000,000, an increase of $913,000,000 since June. Included in the investments were obligations of the United States Government of $35,300,000,000
($3,430,000 of which were guaranteed obligations). These investments, representing
28.81 percent of total assets, were increased by $683,000,000 during the period.
Other bonds, stocks, and other securities of $10,900,000,000, including
$8,700,000,000 of obligations of States and other political subdivisions, showed an
increase of $230,000,000 since June.
Cash of $1,637,000,000, reserves with Federal Reserve banks of $11,110,000,000,
and balances with other banks (including cash items in process of collection) of
$10,615,000,000, a total of $23,362,000,000, showed a decrease of $670,000,000.
Bills payable and other liabilities for borrowed money of $998,000,000 showed
an increase of $507,000,000 since June.
Total capital funds of the banks on September 24 of $9,621,000,000, equal to
8.76 percent of total deposits, were $145,000,000 more than in June when they were
8.58 percent of total deposits. Included in the capital funds were capital stock

of $2,930,000,000, of which $3,500,000 was preferred stock; surplus of $4,559,000,OO
undivided profits of $1,863,000,000, and capital reserves of $269,000,000.

O
r—
CM

TREASURY DEPARTMENT
Comptroller of the Currency
Washington

^
2 4*3

RELEASE A. M. NEWSPAPERS,

Wednesday, November &&9 1958.

A-380

The total assets reported by the 4,599 active national banks in the United
States and possessions on September 24, I958 amounted to nearly $122,500,000,000,
it was announced today by Comptroller of the Currency Ray M. Gidney. The assets
were $14,000,000 below the amount reported by the 4,606 active national banks on
June 23, 1958, the date of the previous call.
The deposits of the banks on September 24 were $109,800,000,000, a decrease
of $609,000,000 since June. Included in the recent deposit figures were demand
deposits of individuals, partnerships, and corporations of $56,600,000,000, an
increase of $1,500,000,000, and time deposits of individuals, partnerships, and
corporations of $32,200,000,000, an increase of $900,000,000. Deposits of the
United States Government of nearly $2,600,000,000 decreased $2,400,000,000 in the
period; deposits of States and political subdivisions of $8,000,000,000 decreased
$600,000,000, and deposits of banks of $9,000,000,000 showed an increase of
$275,000,000. Postal savings deposits were $9,900,000 and certified and cashiers'
checks, etc., were $1,400,000,000.
Gross loans and discounts on September 24, I958 of $51,700,000,000 showed a
decrease of $217,000,000 since June. Commercial and industrial loans of

$21,400,000,000 decreased $42,000,000, while loans on real estate of $ 13,200,000,
increased $446,000,000. Retail automobile installment loans of $3,800,000,000,
showed a decrease of $16,000,000. Other types of retail installment loans of
$1,300,000,000 showed a decrease of $48,000,000. Loans to brokers and dealers in

securities, and others for the purpose of purchasing or carrying stocks, bonds, and
other securities of $1,438,000,000 decreased $728,000,000. Other loans, including
loans to farmers, loans to banks, and other loans to individuals (repair and

TREASURY DEPARTMENT
Comptroller of the Currency
Washington

o A 7
*" '

RELEASE A. M, NEWSPAPERS,

Wednesday, November 26. 1958.

A-380

The total assets reported by the 4,599 active national banks in the United
States and possessions on September 24, 1958 amounted to nearly $122,500,000,000,
it was announced today by Comptroller of the Currency Ray H. Gidney. The assets
were $14,000,000 below the amount reported by the 4,6o6 active national banks on
June 23, I958, the date of the previous call.
The deposits of the banks on September 24 were $109,800,000,000, a decrease
of $609,000,000 since June. Included in the recent deposit figures were demand
deposits of individuals, partnerships, and corporations of $56,600,000,000, an
increase of $1,500,000,000, and time deposits of individuals, partnerships, and
corporations of $32,200,000,000, an increase of $900,000,000. Deposits of the
United States Government of nearly $2,600,000,000 decreased $2,400,000,000 in the
period; deposits of States and political subdivisions of $8,000,000,000 decreased
$600,000,000, and deposits of banks of $9,000,000,000 showed an increase of
$275,000,000. Postal savings deposits were $9,900,000 and certified and cashiers1
checks, etc., were $1,400,000,000.
Gross loans and discounts on September 24, I958 of $51,700,000,000 showed a
decrease of $217,000,000 since June. Commercial and industrial loans of

$21,400,000,000 decreased $42,000,000, while loans on real estate of $13,200,000,000
increased $446,000,000. Retail automobile installment loans of $3,800,000,000,
showed a decrease of $16,000,000. Other types of retail installment loans of
$1,300,000,000 showed a decrease of $48,000,000. Loans to brokers and dealers in
securities, and others for the purpose of purchasing or carrying stocks, bonds, and
other securities of $1,438,000,000 decreased $728,000,000. 0tht*r loans, including
loans to fanners, loans to banks, and oth^r loans to individuals (re«vqir and

ZWE
-

modernization and installment cash loans, and single-payment loans) of $10,600,000,0
increased about 1.6 percent since June. The percentage of net loans and discounts
(after deduction of valuation reserves) to total assets on September 24, 1958 was
41.37 in comparison with 41.56 in June and 42.83 in October 1957.
Total investments of the banks in bonds, stocks, and other securities aggregated $46,200,000,000, an increase of $913,000,000 since June. Included in the investments were obligations of the United States Government of $35,300,000,000
($3,430,000 of which were guaranteed obligations). These investments, representing
28.81 percent of total assets, were increased by $683,000,000 during the period.
Other bonds, stocks, and other securities of $10,900,000,000, including
$8,700,000,000 of obligations of States and other political subdivisions, showed an
increase of $230,000,000 since June.
Cash of $1,637,000,000, reserves with Federal Reserve banks of $11,110,000,000,
and balances with other banks (including cash items in process of collection) of
$10,615,000,000, a total of $23,362,000,000, showed a decrease of $670,000,000.
Bills payable and other liabilities for borrowed money of $998,000,000 showed
an increase of $507,000,000 since June.
Total capital funds of the banks on September 24 of $9,621,000,000, equal to
8.76 percent of total deposits, were $145,000,000 more than in June when they were
8.58 percent of total deposits. Included in the capital funds were capital stock

of $2,930,000,000, of which $3,500,000 was preferred stock; surplus of $4,559,000,00
undivided profits of $1,863,000,000, and capital reserves of $269,000,000.

Stateirient showing comparison of principal items or assets and liabilities of active national banks
as of September 24, I958, June 23, I958 and October 11, 1957
(In thousands of dollars)

dumber of banks
ASSETS
"ommercial and industrial loans....
Loans on real estate
A H other loans, including overdrafts
Total gross loans...,.
Less valuation reserves
I\iet loans
U. S. Government securities:
Direct obligations
Obligations fully guaranteed.....
Total U. S. securities........
Obligations of States and political subdivisions.................
Other bonds, notes and debentures..
Corporate stocks, including stocks
of Federal Reserve banks.........
iotal securities
Total loans and securities....
uurrer cy and coin
Reserve with Federal Reserve banks.
Balances with other banks
Total cash, balances with
other banks, including reserve balances and cash
iters in process of collection
Ct,r.«r assets
Total assets

Sept. 24,
1958

June 23,
1958

Oct. 11,
1957

4,599

4,606

4,641

Increase or decrease
since June 23, 1958
Amount
: Percent

Increase or decrease
since Oct. 11, 1957
Amount
: Percent

-42

-7

21,385,093
13,205,572

21,426,872
12,759,900

21,875,673
12,307,341

-41,779
44-5,672

3*k9

17,092,949
51,683,614
1,018,842
50,664,772

17,713,632

16,615,151

-620,683

-3.50

51,900,404
997,971
50,902,433

50,798,165
902,589
49,895,576

-216,790
20,871
-237,661

-.42
2.09
-.47

385,^449
116,253
769,196

f.~74
12.88
1.54

30,904,269
2,531
30,906,800

682,452
617
683,069

1.97
21.93
1.97

^.377,375

14.16

35,285,074

34,599,192
2,813
34,602,005

^,378,274

14.17

8,688,802
1,948,482

8,364,896
2,045,247

7,452,643
1.631,550

323,906
-96,765

3.87
-k*?3

1,236,159
316,932

16.59
19.43

277,829
46,200,187
96,864,959
1,636,997
11,109,796
10,614,775

274,438
45,286,586
96,189,019
1,565,247
11,261,086
11,206,103

251,494
40,242,487
90,138,063
1,307,011
11,851,510
11,049,877

3,391
913,601
675,940
71,750
-151,290
-591,328

1.24
2.02

IO.47
14.80

4.58
-1.34
-5.28

26,335
5,957,700
6,726,896
329,986
-741,714
-435,102

23,361,568
2,228,292
122,454,819

24,032,436
2,247,360
122,468,815

24,208,398
2,141,401
116,487,862

-670,868
-19,068
-13,996

-2.79
-.85
-.01

35,281,644
3,430

-.19

.70

-490,580
898,231

-2.24
7.30

477,798

_2.88_

899

J^L*220_
86,891
5,966,957

J? .46
"25". 25"
-6.26

-3.94

-3.50C
4.06
5.12

Comparison of principal items of assets and liabilities of active national banks — Continued
. (In thousands of dollars)
Increase or decrease
Increase or decrease
Sept. 24, June 23,
Oct. 11,
since June 23. 1958
since Oct. 11, 1957
1958
1958
1957
Amount
Percent
Amount
:Percent
INABILITIES
Deposits of individuals, partnerships, and corporations:
Demand
56,580:477 55,115,495 56,410,493
1,464,982
2.66
169,984
.30
Time
32,215,034 31,329,692 28,737,084
885,3^2
2.83
3,477,950
12.10
Deposits of U. S. Government....... 2,559,100
2,39^.655
-2,425,392
4,984,492
•48,66
164,445
6a87
Postal savings deposits............
9,906
11,284
-402
10,308
-3.90
-1,378
-12.21
Deposits of States and political
8,611,982 7.176.372
8,042,579
-6.61
-569,403
866,207
12.07
subdivisions
8,685,161
«....<«..«.. 8,959,581
8,403,799
3.16
274,420
555,782
6.61
Deposits of banks
Other deposits (certified and
1^430,623
1,669,619 1.274.991
-238,996
-14.31
155,632
12.21
cashiers' checks, etc.)..
, 109,797,300 110,406,749 104,408,678
.609,449
-*55
5,388,622
5.16
Total deposits...............
Bills payable, rediscounts, and
998,291
491,502
1,020,221
506,789
103.11
-21,930
other liabilities for borrowed
-2.15
2,038,444
^094,910
1.996.776
-56
k66
-2.70
41,668
t
money
,
Other liabilities
112^34,035 112,993,161 107.425.675
-15QT126
-.14
5.408.360
_$_._(£,
Total liabilities, excluding
capital accounts
CAPITAL ACCOUNTS
2,926,967
2,865,116
2,768,755
61,851
2.16
158,212
5.71
Capital stock:
2,422.
2*221
JZ42
27.31
.=281
J=2^O
Total
2,930.459
Corraon
2 A 86Z I 85£_2 1 2Z2 I 520
62,600
2.18
i£k£2£.
-51Z0
Surplus
4,558,635
4,514,48£
4,320,927
Preferred,
,
44,150
.98
237,708
5.50
Undivided profits
1,862,819
1,839,600 1,730,206
23,219
1.26
132,613
7.66
Reserves
268.871
253.710
238.524
15,1,61
3Q.347
-LSI
12.72
Total surplus, profits and
6^607,795 6,289.657
82^0.
400,668
1*21
reserves
6,690,325
6.37
Total
capital accounts
9.620.784
9,4757654 9.062.187
145.130"
i!v5
6&1£
558,597,
Total liabilities and
capital accounts
122.454,819 122.468.815 116.487.862
-,01
-i3.,SSi
5,966,95_Z
5Wz
Percent
ir-. TI Oo:
Percent Percent
28.25
26.53
U.S.Gov't securities to total assets
23.81
41.56
NOTE: Minus sign denotes decrease.
42.83
Loans <5c discounts to total assets
41.37
8.58
8.68
Capital accounts to total deposits
8.76

TREASURY DEPARTMENT
WASHINGTON, D.C.
IMMEDIATE RELEASE,
Monday, November 24, 1958.

A-38l

Preliminary figures show that about $11,666 million, or about
96 percent, of the $9,833 million certificates maturing December 1
and the $2,368 million bonds maturing December 15 have been exchanged
for the new 3-3/8 percent certificates maturing November 15, 1959,
and the 3-5/8 percent Treasury notes maturing May 15, 1961. About
$7,627 million of the securities were exchanged for the new certificates and $4,039 million for the new notes, leaving for cash redemption about $136 million of the certificates maturing December 1
and $399 million of the bonds maturing December 15.
The Federal Reserve Banks held $7,858 million of the certificates
maturing December 1, of which $5,000 million were exchanged for the
new certificates and $2,858 million for the new notes.
Further details regarding the exchange will be announced later
after final reports are received from the Federal Reserve Banks.

-*-

^°

ti>rm
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 k$h (b) and 1221 ($) of the Internal Revenue Code of
195U 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. iil8, Revised, 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.

- 2 HBE&

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 such respect shall be
final. Subject to these reservations, noncompetitive tenders for $200,000 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. Settlement for accepted
tenders in accordance with the bids must be made or completed at the Federal Reserve Bank on December k, 1958 , in cash or other immediately available funds
or in a like face amount of Treasury bills maturing December h, 1958 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.
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 195u. 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 principa
or interest thereof by any State, or any of the possessions of the United States,

TREASURY DEPARTMENT
Washington

f^
/

~ ~ , <rT j
Uj v
^

A.M.
X8K RELEASE/ HKRKXM NEWSPAPERS,
Wednesday, November 26. 1958

tit
The Treasury Department, by this public notice, invites tenders for
$1,800,000,000 , or thereabouts, of 91 -day Treasury bills, for cash and

m m.
in exchange for Treasury bills maturing
December 4. 1958
, In the amount of
$1,800,317*000 , to be issued on a discount basis under competitive and noncompetitive bidding as hereinafter provided. The bills of this series will be
dated December U, 1958 , and will mature March $. 1959 , when the 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, $100,000, $500,000 and $1,000,000
(maturity value).
Tenders will be received at Federal Reserve Banks and Branches up to the
one-thirty
closing hour, tat/o'clock p.m., Eastern Standard time, Monday, December 1, 1958

•"

3pg| *—

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.
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

RELEASE A.M. NEWSPAPERS,
Wednesday, November 26, 1958.

A-382

The Treasury Department, by this public notice, invites tenders
for $1,800,000,000, or thereabouts, of 91-day Treasury bills, for
cash and in exchange for Treasury bills maturing December k, 1958,
in the amount of $1,800,317,000, to be issued on a discount basis
under competitive and non-competitive bidding as hereinafter
provided. The bills of this series will be dated December 4, 1958,
and will mature March 5, 1959*
when the 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, $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, one-thirty o'clock p.m., Eastern Standard time,
Monday, December 1, 1958.
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.
Others than banking institutions will not be permitted to submit
tenders except for their own account. Tenders will be received
without deposit from iacorporated 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
s. 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 such respect shall be
final. Subject to these reservations, non-competitive tenders ior
$200,000 or less without stated price from any one bidder will be
accepted in full at the average price (in three decimals) of accepted

- 2 competitive bids. Settlement for accepted tenders in accordance
with the bids must be made or completed at the Federal Reserve Bank
on December k, 1958, in cash or other immediately available funds
or in a like face amount of Treasury bills maturing December 4, 1958.
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.
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 actuallyreceived 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. 4l8, Revised, 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.

oOo

'256
>*-• *"""*}

Friday,ffoveafcer28, 1958.

y /

The Treasury Departaaeafe today announced the results of tfce owea* **???£
offering of 3-3/1 *eree»ttfreasuryCerfcifleates of Xttm^X^mMmmm ofiSeries $«J#f9,
to be a*feed Deeeafcer 1, U S 8 , toe Hoveatoer 15, 1859, and 3»5/t W****& Trm**VLvy
Botes of aeries B-1961, 1^ be dated December 1, 19SS, das M*y *5# 3##^, open to
holders of ^,832,719,000 of 3»$/4 pescesfc !Proa«ufy 0©r*i£ioafe*a of I&$ebtednesi
of Series ©*1958, BAturiBg IMMstmEil, 1958, east #Ef368,3a3*f0§^f aW§-PfflWrt
freaawy Bond* of 195S, maturing geeea&er IS* 1058.fiabaerii^tefietor $mm urn*
issues saaounted to $11,787,286,000, living $415,798,500 of the watoorim iaaues
for cash red>efflpUoa. Of this anosiist $101,315,000 are the eertiHeates and
$312,483,500 are the bonds.
Aiaounts exchanged were divide^ between the two new issues and among the
several Federal Reserve Districts and the Treasury as follows:
3-5/8£ TREASURY CERTIFICATE OF HiDSBTBDNBSS OF SERIES £*1959
Bonds of 1958 ex.
Total exchanges
Federal Reserve
D*1958 Ctfs* ex.
for new 0tf$.
district
for new Ctfs.
f69,926,000
34,186,000
$
35;,742,000
Hev fork
6,681,277,000
715
,321,000
,056,000
5,966
J&iiaaelpiiia
75,283,S§0
23
,078,000
52;,207,000
Cleveland
153,338,000
,011,000
57;,177,000
19 ,222,000
28,061,000
,$30,000
Atlanta
23,
28,540,000
52,363,000
,823,000
141;,055,000
156 ,§46,000
397,603,000
tt. Louis
36 776,000
47 ,535,000
84,311,000
Minneapolis
20.,914,000
56,740,000
35,826,000
Kansas Gity
t969,000
77,631,000
* ^ > 36,662,000
40,1
Pallas
,375,000
37,870*000
on 14,495,000 pur
23,:
San Francisco
68,219,000
103,0*5,000
»n 34,876 ,000 sdemp
4,401,000
7,895,000
TOTAL $4,4^,^J,Wo
5~5/8* TftgsJOlff 10TE8 OF SSRI8S B»1961
Federal Beserve
D-1958 Ctfs. ex.
Bonds of 1958 esc.
District
for new Botes
tot aev Botes
~f
5,820,000
• 14,42^,000
lesion
3,176,104,000
264,151,000
lev tork
2,479,000
12,578,000
Philadelphia
12,735,000
46,120,000
Cleveland
1,401,000
17,355,000
Bichisond
6,362,000
23,517,000
Atlanta
47,780,000
161,344,000
Chicago
6,135,000
33,892,000
St* Louis
15,618,000
43,161,000
Minneapolis
5,806,000
55,553,000
Kansas City
6,375,000
35,686,000
San Francisco
11,417,000
59,196,000
Treasury
l»0g*000
7,942,000
TOTAL
$3,299,1^5,000

. this
^ove"^'
Total exchanges
tor Ifotes
#
20,245,00^)
3,440,255,000
15,057,000
58,855,000
18,756,000
29,879,000
209,104,000
40,087,000
63,779,000
61,3®,000
42,061,000
70,613,000
8.995.000
l
&9Q &imf9m

TREASURY DEPARTMENT
IMMEDIATE RELEASE,
Friday, November 28, 1958.

257

WASHINGTON. D.C.
A-383

The Treasury Department today announced the results of the current exchange
offering of 3-3/8 percent Treasury Certificates of Indebtedness of Series E-1959,
to be dated December 1, 1958, due November 15, 1959, and 3-5/8 percent Treasury
Notes of Series B-1961, to be dated December 1, 1958, due May 15, 1961, open to
holders of $9,832,719,000 of 3-3/4 percent Treasury Certificates of Indebtedness
of Series D-1958, maturing December 1, 1958, and $2,368,365,500 of 2-1/2 percent
Treasury Bonds of 1958, maturing December 15, 1958. Subscriptions for the new
issues-amounted.to $11,787,286,000, leaving $413,798,500 of the maturing issues
for cash redemption. Of this amount $101,315,000 are the certificates and
$312,483,500 are the bonds.
Amounts exchanged were divided between the two new issues and among the
several Federal Reserve Districts and the Treasury as follows:
5-5/8$ TREASURY CERTIFICATES OF INDEBTEDNESS OF SERIES E-1959
Federal Reserve
D-1958 Ctfs. ex.
Bonds of 1958 ex.
Total exchanges
District
for new Ctfs.
for new Ctfs.
for Certificates
Boston
~$
35,742,000
$
34,186,000
$
69,928,000
New York
5,966,221,000
715,056,000
6,681,277,000
Philadelphia
52,207,000
23,076,000
75,283,000
Cleveland
57,177,000
79,011,000
136,188,000
Richmond
8,839,000
19,222,000
28,061,000
Atlanta
23,823,000
28,540,000
52,363,000
Chicago
141,055,000
156,548,000
297,603,000
St. Louis
36,776,000
47,535,000
84,311,000
Minneapolis
20,914,000
35,826,000
56,740,000
Kansas City
36,662,000
40,969,000
77,631,000
Dallas
14,495,000
23,375,000
37,870,000
San Francisco
34,876,000
68,219,000
103,095,000
Treasury
3,492,000
4,401,000
7,893,000
TOTAL
$6,432,279,000
$1,275,964,000
$7,708,243,000
-5/8$ TREASURY NOTES OF SERIES B-1961
Federal Reserve
D-1958 Ctfs. ex.
Bonds of 1958 ex.
District
for new Notes
for new Notes
Boston
""$
5,820,000
$ 14,423,000
New York
3,176,104,000
264,151,000
Philadelphia
2,479,000
12,578,000
Cleveland
12,735,000
46,120,000
Richmond
1,401,000
17,355,000
Atlanta
6,362,000
23,517,000
Chicago
47,760,000
151,344,000
St. Louis
6,195,000
33,892,000
Minneapolis
15,618,000
48,161,000
Kansas City
5,806,000
55,553,000
Dallas
6,375,000
35,686,000
San Francisco
11,417,000
59,196,000
Treasury
1,055,000
7,942,000
TOTAL $3,299,125,000
$779,918,000

Total exchanges
for Notes
""$ 20,243,000
3,440,255,000
15,057,000
58,855,000
18,756,000
29,879,000
209,104,000
40,087,000
63,779,000
61,559,000
42,061,000
70,613,000
8,995,000
$4,079,043,000

7 S«
tLmmJy

ISEIMSS A, M. tms?Amm9
fuesday, Deceaber 2, 1958*

The Treasury Department announced last evening that the tenders for $1,800,000,001'
or thereabouts, of 91-day Treasury bills to be dated December 4, 19$$, and to nature
Hareh 5, 1959, which were offered on November 26, were opened at the Federal Reserve
Banks on Beeesaber 1.
The details of this issue are as follows;
fotal applied for - $2,795,051,000
Total accepted
- 1,800,20?,000 (iaeludes $280,288,000 entered on a noacompetitive basis and accepted in fall at
the average price shown below)
Range of accepted competitive bids.* (Excepting one tender totaling $800,000)
High
Low

* 99.29? ^ttivaleat rate of discount approx. 2.781$ per annum
- $9,288
a
»
»
«
2.81711 »
»
n

Average

- 99*291

" 2 .

(9k percent of the amount bid for at the low price was accepted)
Federal Beserve
pistriot
Boston
lew fork
Philadelphia
Cleveland
Richmond
Atlanta
Chicago ~v
St* Louis
Minneapolis
Kansas CityDallas
San Francisco

fatal
Applied for

# 30,g£o,ooo
^087,513,000
1*1,371,000
$9,ik$9om
16,083,000
33,391*000
285,872*00©
25,673,000
16,781,000
53,71*5,000
29,859,000
Ua,768,OQO
T01AL #2,795,051,000

(ifir

total
Accepted
#
19,21*7,000
1,265,804,000
18,51;6,000
$6,1*15,000
15,171,000
20,899,000
22U,991,000
21,473,000
14,251,000
35,798,000
tk ,471,000
83,108*000
#1,800,207,000

25Q

TREASURY DEPARTMENT

WASHINGTON. D.C.
RELEASE A, M. NEWSPAPERS,
fluesday, December 2, 1958,

A-381*

The Treasury Department announced last evening that the tenders for $1,800,000,000,
or thereabouts, of 91-day Treasury bills to be dated December I*, 1958, and to mature
March 5, 1959, which were offered on November 26, were opened at the Federal Reserve
Banks on December 1,
The details of this issue are as follows:
Total applied for - $2,795,051,000
Total accepted
- 1,800,207,000 (includes $280,288,000 entered on a noncompetitive basis and accepted in full at
the average price shown below)
Range of accepted competitive bids; (Excepting one tender totaling $800,000)
High
Low

- 99.297 Equivalent rate of discount approx* 2.781$ per annum
- 99.288
»
»
•»
»
"
2.817$ "
••

Average

- 99.291

2.806$

(9k percent of the amount bid for at the low price was accepted)
Federal Reserve
District

Total
Applied for

Total
Accepted

Boston
New York
Philadelphia
Cleveland
Richmond
Atlanta
Chicago
St. Louis
Minneapolis
Kansas City
Dallas
San Francisco

$
30,250,000
2,087,513,000
111, 371,000
59,71*5,000
16,083,000
33,391,000
285,872,000
25,673,000
16,781,000
53,71*5,000
29,859,000
11)4,768,000

$
19,21*7,000
1,265,80)4,000
18,51*6,000
56,W*5,000
15,171,000
20,899,000
22li,994,000
21,1*73,000
lk3251,000
35,798,000
24,1*71,000
83,108,000

$2,795,051,000

$1,800,207,000

TOTAL

TREASURY DEPARTMENT
Tfashington

2 ^,
bU

Statement by Dan Throop Smith, Deputy to the Secretary of the Treasury
before the Subcommittee on Foreign Trade Policy
of the Committee on Ways and Means, House of Representatives,
December 1, 1953

MR. CHAIRMAN AND MEMBERS OF THE COMMITTEE:

I am glad to be here today on behalf of the Treasury Department to
discuss with you some of the tax aspects of the very important problem
that your Subcommittee is considering. We look forward to the testimony
that will be presented before your Subcommittee. We believe that out of
it will emerge a significant contribution toward facilitating the flow
of private capital especially to the less developed countries and will
help to establish an increasingly firm bond between free institutions
here and free institutions in the other countries.
A free flow of capital funds is important for economic development.
The general investment climate is by far the most important influence
on the flow of funds. Inherently unattractive situations cannot be made
attractive by artificial stimulants. But at the same time, barriers and
impediments to the flow of funds should be kept to a minimum and private
capital should be encouraged to fulfill its proper rule in economic
development.
The Administration is giving intensive study to various proposals
designed to promote our foreign economic policy. At this time, however,
while the budget and general legislative recommendations are still being
developed, it is not possible to make specific recommendations in this
area. We believe that these hearings will be most helpful in the formulation
of any recommendations that may be made.
As this Subcommittee, perhaps more than any other, is aware, on
almost every occasion that something in the public interest is to be
achieved through private business activity, proposals are made for tax
incentives to encourage the desired action. This is true in connection
with the present issue. It seems appropriate therefore to review
briefly the present method of taxing income from abroad, and to show
the factors in the law today that encourage interenational trade and
investment.
The existing tax treatment of foreign income rests on the basic
tenet that all income, irrespective of source, shall be taxed equally.
This is achieved by the inclusion of foreign income in the tax base and
by the allowance of a credit against the U.S. tax for the taxes imposed
by foreign countries on income derived within their borders. Without a
foreign tax credit, income from foreign sources would bear an aggregate
tax load substantially above that imposed on domestic income. The foreign
tax credit provision reflects the view that each country has a primary

A-385

<£ D j.

right to tax income originating within its b o r d e r s . One effect of the
provision is to eliminate U . S . tax completely in many cases, for where
a foreign country's taxes are equal to or exceed those of the United
States, no additional tax on income derived within its borders is
collected by the United S t a t e s . In other cases, the United States
collects only small amounts of tax--the difference between the foreign
rate and our own.
It may be of interest to note that this treatment of foreign taxes
is considerably more favorable than the treatment accorded taxes imposed
by the State governments. A foreign income tax (whether national or
local) is treated as if it had been paid to the United States, but State
income taxes are considered a cost of doing business, deductible from
gross income rather than from the tax itself. It may be noted in
passing that, for reasons that are largely accidental, the method of
computing the credit for foreign taxes is such that income derived abroad
through the medium of foreign subsidiaries is frequently taxed at a
combined foreign and domestic rate which falls short of the tax rate
that applies to income derived from domestic business operations.
The treatment of income derived abroad by American companies operating through foreign subsidiaries merits attention. A corporation which
is created under the laws of a foreign country and derives its income
abroad does not fall within the scope of our tax system, irrespective of
the fact that ownership rests in the United States and its management
and control is also located in the United States. This has been a basic
feature of our income tax structure since its enactment, but it is not
a universal rule for the tax treatment of companies. In some countries,
a corporation that is managed and controlled by residents of the country
is considered to b e a legal entity of that country and subject to its tax
laws. This is true not only in the United Kingdom and countries influenced
b y British law but in a number of the continental countries as w e l l . One
result of our approach is that a substantial proportion of the income each
year from investments made abroad by U . S . firms does not fall within the
scope of our tax system. Consequently investments through foreign
subsidiaries benefit from whatever advantages foreign countries are
prepared to offer by way of tax rate concessions, development allowances,
accelerated depreciation, and the like.
Despite the underlying philosophy of uniformity in our tax system
there is in our tax structure a rate differential for certain investments
abroad. The principal provision is the Western Hemisphere trade corporation deduction which provides a rate reduction of 1** percentage points.
A corporation that qualifies is taxed at a rate of 33 percent instead of
the 52 percent imposed on corporate income generally. The application of
this differential rate has spilled over into other activities somewhat
removed from the type of enterprise for which the provision was originally
intended. The combination of the reduced rate and the credit for foreign
taxes means that income from the Western Hemisphere, even more so than

- 3mC L
from other parts of the world, produces little revenue for the United
States Government.
The basic provisions of the tax law applicable to income from
foreign sources are supplemented by a network of 21 income tax treaties
which help eliminate tax barriers to the international movement of
trade and investment. Their principal purpose is to set forth agreed
rules of source, either explicitly or implicitly through reciprocal tax^
rate reductions and exemptions, which reduce the cases in which two
countries impose tax on the same income without either one giving
recognition to the tax imposed by the other. Let me illustrate the
problem. While we allow a credit for the tax imposed by Country X on
income derived in that country, our concepts of source may differ from
those accepted in the foreign country. As a result there may be a flow
of income to an American firm which ±F considered under U.S. law to be
income from sources within the United States, but which under the laws
of the foreign country may be considered income from sources within its
borders. Both countries would impose a tax on that income, but we
would not allow a credit for the foreign tax, since the income does not
have its origin in that country so far as the U.S. lav is concerned.
With tax rates as they are, tie combined tax burden in such a case might
well exceed the total income involved.' This problem arises, in greater
or lesser degree, in connection with various types of international
transactions, including trading activities, the rendition of personal
services, licensing arrangements and the like.
•
Of late we have undertaken anothe ' step in connection with the tax'
treaty program which holds considerable promise of facilitating the
international movement of investment. I refer to the credit for "tax
incentives" or "tax sparing" which some less developed countries have
chosen to use as part of their programs to attract capital and know-how
from abroad and to encourage reinvestment of profits. The tax credit
mechanism designed to achieve equality of tax burdens operates so as to
offset, to some extent, tax incentives grantee! by a foreign country.
For as the tax imposed in a foreign country is reduced, whatever the
reason may b e , the amount of the tax credit allowed against U.S. tax is
also reduced. When the tax credit declines, the amount of U.S. tax payable tends to increase and thus to negate the tax reduction offered by
the foreign country. This has been a source of irritation among some
foreign countries. Though it may not be desirable from the point of view
of an ideal tax system, uniformly administered, to give a credit for an
amount of tax which has not been collected by a foreign government, it
is our view that.in the interest of foreign economic policy we should
recognize, rather than nullify, the revenue sacrifices made by a foreign
government under certain conditions. This question is developed more
fully at a later point.
From this brief sketch, it is evident that our tax system offers
several inducements to foreign investment as compared with domestic
investment. Nevertheless various proposals have been made in recent

- k-

263

years to modify further the U.S. tax treatment of income from foreign
sources. Doubtless new ones will emerge in the hearings before your
Committee. By way of introduction some of the main proposals that have
been made may be listed and some of their features discussed.
The suggestion that has probably evoked most interest in recent
months is that there be created a special class of domestic corporation
for tax purposes which would be permitted to conduct business operations
abroad or otherwise derive income from foreign sources without incurring
any liability for tax in the United States unless and until its income
is repatriated to the United States. So-called "base companies" can now
be created under the laws of certain other countries, and can, through
subsidiaries or directly, carry on business outside the country of
incorporation under favorable tax conditions. Indeed, a number of other
countries are making a determined effort to attract the formation of such
corporations within their jurisdiction. The proposal to create a special
class of foreign business domestic corporations is to make possible the
creation of a so-called base company under United States law.
Your Committee will recall that the Administration's tax recommendations in 195^-1- included the deferral of tax on income derived abroad
through a branch of a domestic corporation. Of course a domestic corporation that was engaged exclusively in business abroad would have
qualified for deferral just as under the proposals currently under
discussion. The major argument for such a domestic base company, or
foreign business corporation, or overseas trading corporation, is that it
would give some impetus to foreign investment without appearing to make
any serious incursion into the principle that equal amounts of income
should bear equal tax burdens. A supplementary argument is that American
firms are now in a position to create such a company abroad and no sound
public purpose is served by requiring American firms to subject themselves to foreign jurisdictions. It is argued that they should be able
to organize such companies under U.S. law. This would at the same time
bring under the scrutiny of our own tax authorities transactions that
might otherwise go unnoticed. Whatever the merits of the proposal, it
should be borne in mind that as a practical matter tax deferment is tax
exemption to the extent that the income of a base company is not
distributed. Given the reinvestment policies of American firms, therefore, a substantial portion of profits would in fact be exempt for an
indefinite period from U.S. tax. Attention may also be called in passing
to the many questions which must be answered if a foreign business
corporation law were adopted. What kind of operations could such a
company engage in? Would it have to be engaged in business operations
directly in foreign countries, or could it own stock in other companies
which are engaged in business? If the latter, must it have a substantial
equity interest in the foreign operating company or could it have a
small portfolio interest? Should the company be alloA^ed to transfer
its profits freely from one company to another or from one country to
another, or should it be required to restrict its investments in certain
channels? In other words, should it be possible for a company deriving
profits fromrainingin a high-risk country to invest excess funds in
portfolio investment in a low-risk country. At what stage would its
profits become subject to U.S. tax? When dividends are declared to a

- 5-

Lt-<±
U.S. shareholder, or when it transfers assets to a bank account in the
United States or invests them in the United States in some other way?
If the company is to engage in operating activities, should these
activities be restricted In any way? Should a firm which exports goods
from the United States qualify? And if such an enterprise can qualify,
should a company which manufactures for export also qualify? If passive
portfolio investment is to be encouraged, should other income flows be
similarly treated—such as interest or royalties from patents and copyrights? These are some of the questions that would have to be resolved
in connection with the enactment of any legislation along this line.
A more fundamental question is whether enactment of this legislation
would in fact promote the kind of investment flows to the regions of
the world where U.S. investment could do the greatest good.
This Question of how much additional foreign investment will be
generated by a particular course of action applies equally to other
proposals besides tax deferral. A second frequently proposed, suggestion
is to reduce the tax rate on income derived from foreign sources. In
its most extreme form, this proposal involves complete tax exemption for
income derived abroad. In its more common form, the suggestion is that
the rate on foreign income be reduced by Ik percentage points, just as
in the case of .Western Hemisphere trade corporations. While it is often
referred to as.an extension of the Western Hemisphere provisions to a
world-wide basis, the Treasury proposal of 195^ on this subject contained
certain important restrictions. One was that the corporation eligible
for the reduced rate could not also take a percentage depletion deduction.
It was also our recommendation that the reduced rate should apply only
where a taxpayer was engaged in an active business role abroad through
the firm commitment of tangible resources. Passive portfolio investment
did hot appear to merit special treatment'any more than portfolio investment in domestic enterprises. To be sure, the risks associated with
portfolio investment in some foreign countries are greater than the risks
in the United States. But this is not uniformly true in foreign countries
and there is also great differentiation in risk among domestic investments. In addition, foreign income eligible for the preferential rate
was so defined as to exclude profits derived from the export of domestic
goods. This was deemed essential to avoid giving a tax subsidy to
exports and unfairly undermining the position of other countries in
international markets.
These considerations apart, it should be noted that while a general
tax rate reduction for foreign income may arouse new interest in foreign
investment, it may not have the incentive effect that first appears. A
reduction in the U.S. tax rate of lU percentage points on foreign income
may produce an incentive effect of only 7 percentage points in a country
which has a 1*5 percent tax rate. In a country with a tax rate of 50 percent, it may have the incentive effect of only a 2-point reduction. It
is ironic to'note in this connection that some of the countries most in
need of capital both from foreign and from domestic sources impose taxes
at rates that are higher than those in the United States. A tax reduction

- 6-

*- v>

would have no impact on investments in such countries over the longhaul, and if a generally applicable rate reduction were adopted with
these countries in mind, it would merely provide windfalls for .investors
in other countries where new investment may need no special stimulus.
In appraising a Ik percent rate reduction, it is necessary to keep
in mind that it would apply uniformly across the board to income from
both old investment and new and to all countries unless made specially
selective. Tax rate reduction may have an effect quite opposite to that
intended by its proponents so far as concerns the reinvestment abroad
of income derived in foreign countries. If the U.S.- tax rate on dividends
from a foreign subsidiary is to be 33 percent, the incentive to repatriate
profits rather than to plow them back in the business venture abroad
will be greater than is the case today when a 52 percent rate may apply
to such income. Thus a rate reduction, instead of promoting investment
abroad, may have a contrary result.
It should not be inferred from these comments that a general
Ik percent tax rate reduction might not have a beneficial effect on
investment flows abroad. The foregoing comments are intended to bring
out certain aspects of the problem which are often overlooked.
Another proposal which has received some attention in the past is
to scrap completely the present method of taxing foreign income, including the credit for foreign income tax, and to levy a special corporate
tax at the rate of, say, 5 o r 10 percent on such business income,
whether in the form of dividends from a foreign corporation, profits from
the active conduct of a trade or business, interest, royalties, and so on.
The tax base would be foreign income after the deduction of foreign taxes.
Depending upon the rate imposed, such a tax could either produce the
same amount of revenue that we now get from taxes on foreign income or
it might even provide for a modest increase.
The simplicity of this proposal has much to commend it. Such a low
flat rate tax would leave considerable scope for whatever tax inducements
might be offered by a foreign country to new investment. Any dollar of
foreign tax saved would be subject to the U.S. tax but in view of the low
rate the major portion of any foreign tax rate reduction would accrue to
the benefit of the investor. All foreign income would pay some tax to
the United States, including income which is now exempt because of the
effect of the foreign tax credit. But this advantage also reveals the
principal disadvantage of this plan. Since all foreign income would be
subject to tax, profits derived abroad which are already subject to a
tax of 52 percent or 33 percent or even 60 percent would bear an
additional tax.
The arithmetic may be clarified by an illustration. Suppose that
Country X imx^osed a tax of 30 percent on income derived within its borders.
One hundred dollars of income derived in that country would leave .v-70
available to the American Investor, and this ^70 would be subject to the

26S
flat rate tax of, say, 10 percent, or a liability of $7. The total
foreign and U.S. tax on the $100 of profits would, come to ,$37. Suppose
the foreign tax rate were 10 percent, then the combined tax on such
$100 of profit would be $10 abroad and $9 in the United States, or a
total of $19. If the foreign tax rate were 60 percent, then the
combined tax liability would be $60 to the foreign country and $i* to
the United States. This type of tax on foreign income would doubtless
involve a tax reduction in some cases, but in other instances it would
mean an increase in the aggregate taxes row imposed. In general, it
may be said that if the U.S. tax were fixed at 10 percent this approach
would involve a tax reduction where the foreign tax rate is M-6.7 percent
or lower, and would involve a net addition to tax where the foreign rate
is above that figure. In the. Western Hemisphere, the comparable breakeven point is 31-1 percent. Whether the benefits to be derived from
this approach are significant enough to justify its adoption Is a matter
to which your Subcommittee will want to give careful consideration.
One objective of the tax proposals under review is to make it
possible for American firms Investing abroad to benefit from the tax
inducements offered by foreign governments to attract new capital. As
previously noted, such inducements can now be taken advantage of by a
foreign subsidiary engaged, in business abroad and seeking to plow back its
earnings. However, if a business is conducted abroad through a branch,
or if the opportunity and desire to reinvest are lacking, than the tax
incentives offered by a foreign country is offset by operation of our
tax system. This problem has already been mentioned, but the declaration
of policy which the Administration has made in connection with the tax
treaty program may be repeated at this point. It has announced that we
are prepared to consider the inclusion in tax treaties with less developed
countries of a provision, by which recognition would be given to tax
incentive schemes under so-called pioneer industries legislation or laws
for the development of new and necessary industries. Briefly, what we are
proposing is this: If a country believes that by giving up tax revenues
in certain cases, it will be serving the cause of economic development,
we will forego the opportunity to increase our tax revenues by nullifying
their concessions. However, we would be prepared to forego this only
under certain conditions. First, there should, be a firm commitment to
eliminate unnecessary and inequitable tax barriers to the flow of private
investment in accordance with sound rules of taxation such as are generally
embodied in our income tax treaties. This includes agreement not to
discriminate against American business enterprises. Second, its tax
incentive laws should be of general application, thus assuring maximum
benefit to the economy from such legislation. Third, the conditions and
terms under which the tax incentives are available should be those provided
in an existing law with full disclosure of the conditions under which
they are granted, and with procedures for granting or withholding tax
incentives which involve a minimum of administrative discretion. Fourth,
the tax incentive should be for a limited duration of time, and preferably limited in amount. Finally, the tax from which exemption is granted

- 3-

26 •<
1

must be a genuine part of the country s tax structure and not a
spurious levy created for the occasion. Whatever one may think about a
credit for "taxes spared" as an element in an ideal tax system, and
there ar~ some who have misgivings, it is our view that this is a
sensible way to approach an issue that is of considerable Importance
to foreign countries and that has the seeds of substantial growth in
promoting private investment abroad at a minimum cost.
It may be said of the tax treaty program that a credit for taxes
spared permits foreign governments to determine the tax burden imposed
on American firms and to vary that tax burden among American firms in
different ways. In a broad sense, this is quite correct. However, it
is a charge that is equally true of any method of taxing foreign income
which in any way removes income from the scope of the U.S. tax. It is
true in large measure today of income derived abroad through foreign
subsidiaries.
Another suggestion which appears to merit careful attention would
extend the principle of the loss treatment found in the Small Business
Tax Revision Act of 1953 to certain foreign corporations. Under the
1953 legislation, losses incurred by an individual or partnership on
stock issued to the shareholder by a small business corporation may be
treated as an ordinary loss within certain, limits. However, Only a
domestic corporation can qualify as a small business corporation. You
may wish to consider whether this limitation should be. removed so that
business ventures abroad conducted through foreign corporations could
also qualify. Or conditions other than those applicable under the Small
Business Tax Act might be made to apply where a foreign corporation was
involved. This would mean that losses incurred in connection with
business venture abroad would be deductible from ordinary income but
gains would be treated as a capital gain. The loss of revenue is kept
to a minimum by the self interest of the investor, while the opportunity
of offsetting losses against other income might represent a significant
step in promoting foreign investment.
You will recall that in the case of certain regulated investment
companies which devpte more than pO percent of their assets to investments In foreign corporations, a so-called "pass-through" of the foreign
tax credit to shareholders is permitted which the corporation would
itself be entitled to take if it were a taxed entity. The suggestion
has been made that this pass-through of the foreign tax credit should be
expanded to include companies which have a smaller proportion of their
assets in foreign securities. This might stimulate some interest in
foreign investment by regulated investment companies which row place
their funds largely, if not exclusively, in domestic investment outlets.
On the other hand, the complaint has been made that the amount of tax credit
passed through to a shareholder in a regulated investment company which
qualifies under existing law is so small in view of the complexity
involved that it is not much of an incentive to the ordinary sharohcldp-*.

-9 -

2es
The tax credit that would be available in the case of a regulated
investment company with more diversified investments may involve an
even smaller credit and be correspondingly less attractive to its
shareholders.
Another proposal, incorporated in a bill introduced by the Chairman
of this Subcommittee, would permit a domestic corporation to transfer
assets without any tax consequences to a foreign corporation if such
assets are connected with business activities conducted abroad. Such a
step would introduce greater uniformity of treatment as between companies
that are engaged in business abroad through domestic subsidiaries or
branches and companies engaged in business abroad through foreign
subsidiaries which are controlled by a foreign holding company. If
legislation authorizing a foreign business corporation of the type
previously discussed were to be adopted, consideration would have to be
given as to whether to permit the transfer of property to a foreign
business corporation as if it were a tax-free reorganization. If it
adopts such an approach then transfers to foreign corporations would
presumably not need to be encouraged. But if the Subcommittee does not
adopt the foreign business corporation device, then the tax-free transfer
of assets to foreign corporations will continue to be of interest to many
firms. In our view the issue is not very different from that which
involves tax-free reorganizations of domestic corporations. However, to
prevent such reorganizations from becoming avenues of tax avoidance
through the transfer of appreciated property to a foreign corporation and
the subsequent liquidation of the foreign corporation either tax-free or
at capital gain rates, your Subcommittee would want to consider whether
the gain on liquidation or otherwise should be taxed at ordinary rates.
In 1950, when the Ways and Means Committee was considering legislation
relating to the liquidation of foreign subsidiaries, the Treasury then
recommended such ordinary income treatment.
Finally, I would draw your attention to the proposal that an election
be permitted taxpayers to choose between the per country limitation in
computing the foreign tax credit and the over-all limitation. The per
country limitation gives companies operating at a loss in some countries
the right to continue to take tax credits for the taxes paid in countries
where they operate profitably without having to offset for losses in the
other countries. The over-all limitation would give companies operating
in countries with tax rates above the United States rates the right to
offset those higher taxes against income tax in other countries where the
tax rates are lower than the United States rates. Prior to 195^, both
limitations applied. In that year, the over-all limitation was removed
to eliminate the tax barrier which discouraged companies from going into
ventures in new countries where they might be expected to have a loss in
the first few years. This was a sound change in the law. It is questionable whether, it would be reasonable to permit higher taxes than those
imposed in the United States to be offset, indirectly, against United
States taxes, as would be possible if the over-all limitation were now
established as an alternative to the per country limitation.

C.y

- 10 -

The theoretical justification for the over-all limitation appears
to be that taxpayer income can. be separated into two baskets, one of
which includes domestic income only and the other of which includes
foreign income only. One may doubt whether this type of separation is
indeed a valid one. There would seem to be little in common between
income derived in Canada or the United Kingdom and income derived in
Iran. In any event, if such a dichotomy were to be adopted, consistency
would require the elimination of the per country limitation and, indeed,
of the deduction of foreign losses from domestic income. Moreover, the
need for making the choice involved in this proposal seems largely to
have disappeared as a result of the recent legislation allowing the
carryover of foreign tax credits.
This list of tax proposals to promote private foreign investment
is likely to be expanded by subsequent witnesses before your Subcommittee.
As you may know,- there are several groups in the Executive Branch of
the Government giving intensive study to various proposals. It is our
hope that these hearings will assist in this purpose. The Treasury
Department will be glad to cooperate with the Subcommittee in whatever
way it can in the further work in this area.

^aahington, 0» C.

mmiMm immm* y.m P.M. ( W )

\9 L

Monday, Deeeasbar 1, 1956
A* 0 ^ ^
The "trm&wty BispartBient an®*»iiiiN&& today Ifcrtaar &#taila of its program
to more gradually ®w® tma jrtMBt ayela of l > w # : Trmmwry bill® aggragating #23.** M l M o a , to a new ©yeOo *ntal* titll iml&M

mm®. X3^m*% and

26-¥#®^ oillm aaoun^Jig to $i6.0 billion.
Ontoiradagr,fce^sea&er**, 195B, tna W « s 4 w y will i»*i%* « « i

for

•1.6" billion, ©r thereabouts, of 91*day Traaaury bills, and $,fc billion, or
tomribotto, of 102*&ay treasury bills, to bo i®«*se& on a itsaomt baaia iinaar
competitive and mmm^mUttrm

M&aiiig. fenders for botn seriaa T»ilX mm r«-

omtvoA on Jteday, Beeesifeei? 0, 195S# tlia M i l s of bota aarias wiXl he dated
December 11, 1958, and ^ i U matura Mnr«h 12, 1959* ®®& ®am XX9 1959,
reapeatlvea^,
ftoe Treasury axpects 1© iaaite both IJHNMk and &6~i?isak SEraaaary b i H a
each week, although both the aggregate amount of bills and the relative pro*
portion of l^vaalc and a6*«*ak bill© may be variad Sro® week to w«a&.

It is

presently e^tasag&afced that by the and of tbo ftrot 13 wea&a under t&a nmr
program the aggregate amount of Treasury bills outstanding will be Increased
by $2.6 billion. After this additional cash la raised, the aggregate amount
of the tm mm$LX& issues of bills to be offered is axpeetad to be
$1.6 billion.

TREASURY DEPARTMENT

WASHINGTON, D.C. X ^ Z ^
IMMEDIATE RELEASE,
Monday, December 1, 1958

A-386

The Treasury Department announced today further details of its program
to move gradually from the present cycle of 13-week Treasury bills aggregating $23.k billion, to a new cycle which will include both 13-week and
26-week bills amounting to $26.0 billion.
On Thursday, December k, 1958, the Treasury will invite tenders for
$1.6 billion, or thereabouts, of 91-day Treasury bills, and §.k billion, or
thereabouts, of 182-day Treasury bills, to be issued on a discount basis under
competitive and noncompetitive bidding. Tenders for both series will be received on Monday, December 8, 1958- The bills of both series will be dated
December 11, 1958> and will mature March 12, 1959, and June 11, 1959,
respectively.
The Treasury expects to issue both 13-week and 26-week Treasury bills
each week, although both the aggregate amount of bills and the relative proportion of 13-week and 26-week bills may be varied from week to week. It is
presently contemplated that by the end of the first 13 weeks under the new
program the aggregate amount of Treasury bills outstanding will be increased
by $2.6 billion. After this additional cash is raised, the aggregate amount
of the two weekly issues of bills to be offered is expected to be
$1.6 billion.

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

oh 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, Revised, 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.

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.
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 such respect shall be
final. Subject to these reservations, noncompetitive tenders for $200,000 or less
for the 91-day bills and noncompetitive tenders for $50,000 or less for the 182-day
bills 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

December 11, 1958* in cash or other

imr2—
immediately available funds or in a like face amount of Treasury bills maturing
December 11, 1958 » 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.
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

274
woamaz
TREASURY DEPARTMENT
Washington

3<F

RELEASE A.M. NEWSPAPERS,
Thursday, December 4, 1958
The Treasury Department, by this public notice, invites tenders for two series
of Treasury bills to the aggregate amount of $2,000,000,000 , or thereabouts, for
cash and in exchange for Treasury bills maturing December 11, 1958 , in the amount
of $ 1,800,067,000 , as follows:
91 -day bills, for "$1,600,.000.000

> o r thereabouts, to be

dated December 11, 1958 , and to mature March 12. 1959

31*

333

182 -day bills, for $400,000,000 , or thereabouts, to be
dated December 11, 1958 , and to mature June 11. 1959
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, $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, one-thirty o'clock p.m., Eastern Standard time, Monday, December 8, 1958
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

RELEASE A.M. NEWSPAPERS,
Thursday, December 4, 1958.

A-387

The Treasury Department, by this public notice, invites
tenders for two series of Treasury bills to the aggregate amount
of $2,000,000,000, or thereabouts, for cash and in exchange for
Treasury bills maturing December 11, 1958, In the amount of
$1,800,067,000, as follows:
91-day bills, for $1,600,000,000, or thereabouts, to be
dated December 11, 1958,
and to mature March 12, 1959.
182-day bills, for $ 400,000,000,
or thereabouts, to be
dated December 11, 1958, and to mature June 11, 1959.
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, $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, one-thirty o'clock p.m., Eastern
Standard time, Monday, December 8, 1958.
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.
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

- 2 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 $200,000 or less
for the 91-day bills and noncompetitive tenders for $50,000 or
less for the 182-day bills 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 December 11, 1958, in cash or other Immediately available
funds or in a like face amount of Treasury bills maturing
December 11, 1958. 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.
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
oOoor loss.
return is made, as ordinary gain
Treasury Department Circular No. 4l8, Revised, 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.

RELEASE A. K. NSHSPAFSB8,
Tuesday, December 9* 1958»
The treasury ©spartiseat annonncad last evening that the tendsrs far two aeries of
treasury bills to be dated 0eee»bar 11, 1958, waiea wars offared on Deeembar 4, were
opened at the Federal Beserve Banks on December 8. t-tendara were invited for e
#1,600,000,000, or thereabouts, of 91-day bills and for 1400,000,000, ©^thereabouts,
of 182-day bills. The details of the two aeries are as follows? a c t i v e
aace with
.. d#tta
mmm OF ACCEPTED
91~day treasury bills
CQKPSTIflvl BIBS?
lis mature
maturing March
12, 1959
Approx.
Equiv.
will
Approx. Equiv.
Price
Annual Rate
Price
Annual Rata
accep
ia
96.450a/
Bigs
99.305
2.749H
3.<
liOW
98.437"*
99.287
2.021$
3.092$
;u,1Wfi
98.442
99.291
lis
ner
inte
h^$
t*m$
on of the bills, does
a/ Excepting two tenders totaling #350,000
fc
rom
sa±e
o
78 pereant of the amount af 91-day bills bid for at the loV
price was
accepted.
89 percent of the amount of 182-day bills bid for at the low price was accepted.

TOTAL fllDEHS AFFLBB FOE AMD ACCEFTO BI FKBIBAL RESIRW BISTSICTS* •> is of the
g autnori
For
Expose
District
Applied For
c.usider^d *"
Boston
• 36,594,000
I 23,189 000
4 {S$*W><m
t 4,718,000
Mew York
1*667*074,000
1,007,064
int « # W t M I P - b i 296,770,000
Philadelphia
37,251,000
20,591 000
>red
!8#33i»9Sfe uat 3,186,000
Cleveland
50,457,000
46,157 000
" ^ * * » 3 » 8 » o f , it*522,000
Richmond
23,076,000
22,944 000
f»3W|«tt. a s s M O M o o
Atlanta
54,664,000
46,449 000 :
&,399%m life4,439,000
Chisago
258,316,000
178,456 000 *
77,373,0q&
hi 22,291,000
St. Louis
33,760,000
28,1*28 000 J . 7,878,g|0tce -6,828,000
:
000
Minneapolis
22,293,000
21,439 000
Dallaaifji
* ., or Jfig&Mfeguei. 3,491,000
133,884,000
53,443,000
hO,357
San Francisco
^ e d e l W W r * I W b n a 15,929,000
29,808,000
29,612
TOTALS
yeal»£07,0«hicn
12,408,178,000 11,600,570,000b/J* $1,072,722,000
l5i4,OGQg/
n f4QOi3,307,000
i4i,442,ooo
*
30,165,000
.
m
L'reisu
b35,600,000
is and govern
gg!
b/ Includes 1337,266,000 nonaompetitive tenders accepted at the average price of 99.291
of Includes 146,170,000 nQneompstitive tenders aecepted at the average priae of 98.442

((

TREASURY DEPARTMENT
——"•"Win

-OTtgr^nriTWf"'*'"'""''** 88 ?^^

l^MMf»!-lg,»!n.w.tirigraMg»»;

WASHINGTON, D.C.
^RELEASE A. M. NEWSPAPERS,
^Tuesday, December 9. 1958.

A-388

d
The Treasury Department announced last evening that the tenders for two series of
'Treasury bills to be dated December 11, 1958, which were offered on December 4, were
opened at the Federal Reserve Banks on December 8. Tenders were invited for
$1,600,000,000, or thereabouts, of 91-day bills and for $400,000,000, or thereabouts,
!of 182-day bills. The details of the two series are as follows:
RANGE OF ACCEPTED
COMPETITIVE BIDS:

91-day Treasury bills
maturing March 12, 1959
Price

High
Low
Average

99.305
99.287
99.291

182-day Treasury bills
maturing June 11, 1959

Approx. Equiv.
Annual Rate

Price

98.450a/
98.437~
98.442

2.7492
2.821#
2.8052

Approx. Equiv.
Annual Rate

3.0662
3.0922
3.0822

a/ Excepting two tenders totaling $350,000
78 percent of the amount of 91-day bills bid for at the low price was accepted.
8? percent of the amount of 182-day bills bid for at the low price was accepted.

TOTAL TENDERS APPLIED FOR AND ACCEPTED BY FEDERAL RESERVE DISTRICTS:
District

Applied For

Accepted

: Applied For

Accepted

Boston
New York
Philadelphia
Cleveland
Richmond
Atlanta
Chicago
St. Louis
Minneapolis
Kansas City
Dallas
San Francisco

#
36,594,000
1,667,074,000
37,251,000
50,457,000
23,076,000
54,664,000
258,316,000
33,760,000
22,293,000
53,443,000
29,808,000

$
23,189,000
1,007,064,000
20,591,000
48,157,000
22,944,000
46,449,000
178,456,000
28,428,000
21,439,000
40,357,000
29,612,000
133,884,000

: $
:
J
s
:
:
s
t
t
:
*
1

$ 4,718,000
296,770,000
3,186,000
4,522,000
4,508,000
4,439,000
22,291,000
6,828,000
3,491,000
15,929,000
3,307,000
30,165,000

TOTALS

i4i,442,ooo
#2,408,178,000

$l,600,570,OOOb/:

6,783,000
885,253,000
10,336,000
11,342,000
6,388,000
6,399,000
77,373,000
7,878,000
5,216,000
16,647,000
3,507,000
35,600,000

$1,072,722,000

$4oo,154,000c/

b/ Includes $337,266,000 noncompetitive tenders accepted at the average price of 99.291
c/ Includes $46,170,000 noncompetitive tenders accepted at the average price of 98.442

TREASURY DEPARTMENT

278

WASHINGTON, D.C.

RELEASE A.M. NEWSPAPERS,
Tuesday, December 9, 1958.

The Treasury Department today made public
a report of monetary gold transactions with
foreign governments, central banks, and international institutions for the third quarter
of 1958. In this period, net sales of gold by
the United States amounted to $488«5 million.
These transactions brought to $1,947«1 million
the net outflow of monetary gold from the
United States in the first nine months of this
yoar,
A table showing net transactions, fcy
country, for the first three quarters of 1958
is attached.

A-389

UNITED STATES NET MONETARY GOLD TRANSACTIONS T/JITH
FOREIGN COUNTRIES
January 1, 1958 - September 30, 1958

O70
' -

(In millions of dollars at $3$ per fine troy ounce)
Negative figures represent net sales by the
United States: positive figures, net purchases
f

•

' ' '

•.i.nii..mo

•[

First
Quarter
19^8

Country
^
Argentina c ........... 0 —* — $12o0
Austria
6
.
—
Bank for International Settlements .
*4l5ol
Belgium . . • o -14*2 -143*6 -113*4
Denmark ..^...........
—
International Monetary Fund • . . .
—
Iran . . • — — -203
Italy
"
—
Netherlands
,
-4l«9
Portugal , —. -20*0
Switzerland
-5*0
United Kingdom . . . , . • • „ • . .
-300.0
Vatican City — -1*5 -2*0
All Other
-1,2
Total

~377o4

Second
Quarter
1?58

Third
Quarter1
l$g8

—
-I74<»4

-25<?9
-60»7

-17*0
-7*1

—

-168,8
-62*9

-123 „ 8
-46*4

-135ol
~450c0

-75*1
-50,0

-.8
-l,08l32

-1.1
4*8805

>u.j

?—

:~-

p £

SMX_C=
r

5°t.1

£~r

£.?'

y.iu^

£i_

**cr,

ri U.<Jj^

ro
^w1

'"'OK
"K

o r^ <;
';

C'j
J™~

r~-' <

—,

i:.i

:.o -:^.
«

!~1

O
u./
<o ,co

GC
~~3
OO

S T A T U T O R Y D E B T LIMITATION

1 3 ,j

NOVEMBER 3 0 , 1958
" m
j^e.
10,1958
—
Washington,
Section 21 of Second Liberty Bond Act, as amended, provides that the face jamount o^obhgjt
^^
ce
8ucfa
of that Act, and the face amount of obligations guaranteed as to principa 1 andI jntewarby tne ^u
„ e g a t e $283,000,000,000
anteed obligations as may be held by the Secretary of the Treasury), "shall n o • « « ? « ^ e s o T t S i s section the current
A g n g
no
r

^ t ^ n ^ o n F e ^ ^ r ^ S - a n d ^ X g f £ l ^ Z t o ^ * & * Z <S283,00<f,000,000) shall be temporarily
increased by $5,000,000,000.
...
.....
. j
The following table shows the face amount of obligations outstanding and the face amount which can still be issued under
this limitation :
Total face amount that may be outstanding at any one time
$288,000,000,000
Outstanding Obligations issued under Second Liberty Bond Act, as amended
Interest-bearing:
Treasury bills $29,147,665,000
Certificates of indebtedness
Treasury notes
BondsTreasury
* Savings (current redemp. value)
Depositary.
Investment series
Special FundsCertificates of indebtedness
Treasury notes
Treasury bonds
Total interest-bearing
Matured, interest-ceased
Bearing no interest:
United States Savings Stamps
Excess profits tax refund bonds
Special notes of the United States:
Internat'l Monetary Fund series
Total

38*486,563,000
21.948.496.000

$ 89,582,724,000

85,731,137,850
51,659,576,231
206, 561,500
9.082.861.000

146,680,136,581

22,527,542,000
15,647,191,000
6,937,500,000

45.112,233.000
281,375 ,093 ,581
521,159,055

50,213,935
872,710
687.000.000

Guaranteed obligations (not held by Treasury):
Interest-bearing:
Debentures: F.H.A
106,470,700
Matured, interest-ceased
634.975
Grand total outstanding ,A
Balance face amount of obligations issuable under above authority

738.086.645
282,634,339,281

107.105.675
282»7^*1. l ¥W »7jO
5,258,555,044

Reconcilement with Statement of the Public Debt ...?.^eBlber 3° » ^5&
(Date)

(Daily Statement of the United States Treasury,

$.OVember .2&x..l$5&

)

(Date)

OutstandingTotal gross public debt
Guaranteed obligations not owned by the Treasury.
Total gross public debt and guaranteed obligations.
Deduct - other outstanding public debt obligations not subject to debt limitation

A-390

283,059,927,768
107.105.675
283,167,033,443
425.588.487
282,741,444,956

0Q1
•

S T A T U T O R Y D E B T LIMITATION
A S O P

NOVEMBER 3 0 , 1958

Washington. D e c «
10,1958
Section 21 of Second Liberty Bond Act, as amended, provides that the face amount of obligations issued under authority
of that Act, and the face amount of obligations guaranteed as to principal and interest by the United States (except such guaranteed obligations as m a y be held by the Secretary of the Treasury), "shall not exceed in the aggregate $283,000,000,000
(Act of September 2, 1958; U.S.C., title 31» sec. 757b), outstanding at any one time. For purposes of this section the current
redemption value of any obligation issued on a discount basis which is redeemable prior to maturity at the option of the holder
shall be considered as its face amount." T h e Act of February 26, 1958, (P.L. 85-336 85th Congress) provides that during the
period beginning on February 26, 1958 and ending June 30, 1959, the above limitation ($283,000,000,000) shall be temporarily
increased by $5,000,000,000.
The following table shows the face amount of obligations outstanding and the face amount which can still be Issued under
this limitation :
Total face amount that m a y be outstanding at any one time
<fc9ftfi O O O O O O O O O
OutstandingObligations issued under Second Liberty Bond Act, as amended
Interest-bearing:
Treasury bills $29 , Xk? , 665 » 000
Certificates of indebtedness
Treasury notes
BondsTreasury
* Savings (current redemp. value)
Depositary.
Investment series
Special FundsCertificates of indebtedness
Treasury notes
Treasury bonds
Total interest-bearing
Matured, interest-ceased
Bearing no interest:
United States Savings Stamps
Excess profits tax refund bonds
Special notes of the United States:
Internat'l Monetary Fund series
Total

38,486,563,000
21,948.496.000
85,731,137,850
51,659,576,231
206,561,500
9,082,861,000
22,527,542,000
1 5 , 64"? , 1 9 1 , 0 0 0
6,937,500,000

$ 89,582,724,000

146,680,136,581

45.112,233.000
281,375 ,093 ,581
521,159,055

50,213,935
872,710
68? 1000 * 000

Guaranteed obligations (not held by Treasury):
Interest-bearing:
Debentures: F.H.A
106,470,700
Matured, interest-ceased
634,975
Grand total outstanding
Balance face amount of obligations issuable under above authority

738.086,645
282,634,339,281

107.105.675
282 ,741t4*W,95Q
5,258,555,044

Reconcilement with Statement of the Public Debt ..^0lG^.fI....^...i?:5?.
(Date)

(Daily Statement of the United States Treasury,
N o v e m b e r ..£§J...1&§8
UutstandingTotal gross public debt
Guaranteed obligations not owned by the Treasury.
Total gross public debt and guaranteed obligations.
Deduct - other outstanding public debt obligations not subject to debt limitation

A-390

)
283,059,927,768
1 0 7 .1051 C>75
283 ,167 , 033 ,4^3
425 .588 ,487
282,741,444,956

"8^
- o ~

y *J

Treasury bills are originally sold by the United States is considered to be interes

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 bill's are sold, redeemed or otherwise disposed of, and such bills are e
cluded 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, whethe

on original issue or on subsequent purchase, and the amount actually received eithe

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, Revised, 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.

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.
Others than banking institutions will not be permitted to submit tenders except for their own account.

Tenders will be received without deposit from incor-

porated banks and trust companies and from responsible and recognized dealers in
investment securities.

Tenders from others must be accompanied by payment of 2 per-

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 $200,000 or less

for the 91-day bills and noncompetitive tenders for $50,000 or less for the 182-day
bills 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 December 18, 1958. in cash or other

——m-2—
immediately available funds or in a like face amount of Treasury bills maturing
December 18, 1958
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*
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

384
TREASURY DEPARTMENT
Washington

RELEASE A.M. NEWSPAPERS,
Thursday. December 11, 1958
The Treasury Department, by this public notice, invites tenders for two series
of Treasury bills to the aggregate amount of $2,000,000,000 , or thereabouts, for
cash and in exchange for Treasury bills maturing December 18, 1958 , in the amount

~Ay&
of $ 1,800,120,000 , as follows:

3*:
91 -day bills, for $1,600,000,000 , or thereabouts, to be
pjEpi
' $EXk
dated December 18, 1958 , and to mature March 19, 1959
182 -day bills, for $400,000,000 , or thereabouts, to be

pEJ

xpsjc
dated

December 18, 1958 , and to mature

xpEJE

June 18, 1959

5pfc2§

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, $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, one-thirty o'clock p.m., Eastern Standard time, Monday, December 15 1958
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

TREASURY DEPARTMENT
m%mmmmmmm.Umnmmmi^HfvmirM>--i>"'>">r§m!M^

WASHINGTON, D.C

RELEASE A.M. NEWSPAPERS,
Thursday, December 11, 1958#

A-391

The Treasury Department, by this public notice, invites
tenders for two series of Treasury bills to the aggregate amount
of $2,000,000,000, or thereabouts, for cash and in exchange for
Treasury bills maturing December 18, 1958, in the amount of
$1,800,120,000, as follows:
91-day bills, for $1,600,000,000, or thereabouts, to be
dated December 18, 1958,
and to mature March 19, 1959.
182-day bills, for $400,000,000,
or thereabouts, to be
dated December 18, 1958, and to mature June 18, 1959.
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, $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, one-thirty o'clock p.m., Eastern
Standard time, Monday, December 15, 1958.
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.
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

- 2 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 $200,000 or less
for the 91-day bills and noncompetitive tenders for $50,000 or
less for the 182-day bills 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 December 18, 1958, in cash or other immediately available
funds or in a like face amount of Treasury bills maturing
December 18, 1958. 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.
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
oOo
return is made, as ordinary gain or loss.
Treasury Department Circular No. 4l8, Revised, 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.
T

0-OAS-0C

o
CO

TREASURY DEPARTMENT
Washington, D. C.
IMMEDIATE RELEASE,
Thursday, December 11, 195>8.

A-392

Technical discussions will take place in the near future
between representatives of the governments of Canada and the
United States with a view to the conclusion of modifications of
the existing death duty convention between the two countries,
in order to take account of pending changes in the Canadian
estate tax law.
When agreement is reached, drafts of a proposed agreement
will be prepared and submitted to the respective governments
for approval.
Interested persons in the United States who desire to
submit suggestions for possible inclusion in a supplementary
convention should forward them to Mr. Dan Throop Smith, Deputy
to the Secretary of the Treasury, Treasury Department,
Washington 25, D. C.

0O0

38:
DEPARTMENT
Washington, D. C.

imrniMm mamm,.
-irate ^^7<i»/fr£ir

A ,~— 3 J? ~2—~
/••-•••

technical ai&cusatais will take place i© tlie aaar future
between refreaeatatives of ffc« goversaaeists of Canada and $3ie
United States with a view to the conclusion of aodif ieations of
the existing death duty convention between tii© two eoiK^ries,
in order to take aeccamt of peadiiig change® in tl*e Canadian
estate tax lav.
«hea agreement is reached, m\tm£%* of a p*G$oa«d agreement
will be prepared and s^Ssa&tted to the respective gov^raseitts
for approval.
Interested persons in the ttolted States ^m

desire to

submit suggestions for possible inclusion in a supplementary
convention should forward t&s© to Mr. Bam $far©@p Staith, Pepity
to the Seeretary of the Treasury, Treaswy Department,
Washington 25, B# 0.

IMMEDIATE RELEASE,
Thursday, December 11, 1958.

A-392

oOo

TREASURY DEPARTMENT
Washington, D. G.
D&SDIATE RELEASE

Friday, December 12, 1958.

A-393

PRELIMINARY DATA ON IMPORTS FOR CONSUMPTION OF UNMANUFACTURED LEAD AND H N S CHARGEABLE TO THE QUOTAS ESTABLISHED
BY PRESIDENTIAL PROCLAMATION NO. 3257 OF SEPTEMBER 22, 195»
O
QUARTERLY QUOTA PERIOD • Ootober 1, 1958 - December 31, 1958

IMPORTS • Ootober 1, 1958 - December 9, I958
ITEM 391

Country
of
Production

Australia

ITEM 392 .
ITEM 393
ITEM 394
a Lead bullion or base bullion,
t
t lead in pigs and bars, lead
j
$
Lead-bearing
ore3,
flue
dust,»
dross,
reol&isaad
lead,
eorap
j
Zina-baaring
ors3
©f
all
kinds,:
Zino ia blooks, pigs, or slabs;
and asattes
,
lead,
not : old and worn-out zino, fit
l e a i j antiaionial
:fflooial
scrap lead,
typeantisetal, ::except pyrites containing
of sino
1 only to be reaanufaotured, zino
: all alloys or combinations of :
dross, and zino skimmings
i
lead n.s.p.f.
j
:Quarterly Quota
:Quarterly Quota
:Quarterly Quota
sQuarterly Quota.
: Dutiable Lead
Imparts ; By Weight
Iaporta : Dutiable Lead
Iaporta 1 Dutiable Zins
Imports
(PoundsT"
(Pounds)
(Pounds)
(Pounds)
10,080,000

1,826,657

23,680,000

7,010,310

Belgian Congo

5,440,000

Belgium and
Luxemburg (total)
Bolivia

5,040,000

3,428,980

Canada

13,440,000

7,938,286

15,920,000

Italy

Mexico

36,880,000

Peru

16,160,000

tin. So. Africa

14,880,000

12,507,188

Yugoslavia
All other foreign
countries (total)

6,560,000

PHSPARSD IN THS BURSAU OF CUSTOMS

1,821,175

15,920,000

66,480,000

52,622,805

5,440,000

7,520,000

37,840,000

29,217,857

3,600,000

25,520,078

70,480,000

47,370,300

6,320,000

5,726,756

12,880,000

10,329,523

35,120,000

34,375,863

3,760,000

1,828,804

15,760,000

5*557,350

6,080,000

17,840,000

5,553,570

6,080,000

TREASURY DEPARTMENT
Washington, D. C.
IMMEDIATE RSLEASS

A-393

Friday, December 12, 1958.

o
<*h
PRELIMINARY DATA ON IMPORTS FOR CONSUMPTION OF DinaNUFACTUffiD LEAD AND ZINC CHARG2ABLS TO THE QUOTAS ESTABLISHED
OO
BY PRESIDENTIAL PROCLAMATION NO. 3257 0? SEPTEMBER 22, 195*
QUARTERLY QUOTA PERIOD - Ootober 1, 1958 - Deoember 31, 1958
IMPORTS - Ootober 1, 1958 - December 9, 1958
ITEM 394
ITEM 393
ITEM 392
a Lead bullion or base bullion,
t lead in pigs and bars, lead
:
*
,
_i»v_.
Lead-bearing ores, flue dust,: dross, raclai^d load, scrap : Zinc-Baring ores of all kinds,: Zinc in blecss,pigs, or slabs,
and aattes
: lead, aatUBonial load, anti- : except pyritsa containing not : old and *om-cut zinc,.fit
and m.W9
,
^
^
^ of ^
,enly ^ b , r e ^ f a c t u r e d , zinc
f
: all alloys or combinations of : | ***««> ^i 2in0 ski^ings
:
Quarterly Quota
:aa.rtarly Quota
j:Guart3rly Quota
load "n.s.p.f.
_j
_
'••
5
: Dutiable Lead
Iaport* : PatUble Lead
Isporta : Dutiable
Zinc
•
jQuarterly Quota.
(pounds)
(Pounds)
Iaporta : By height
Isports
7,010,310
1,826,657
23,680,000
10,080,000
(Pounds)
"
(Pounds)
5,440,000
5,440,000
ITEM 391

Country
of
Produotion

Australia
Belgian Congo
Belgium and
Luxaaburg (total)
Bolivia.
Canada.

5,040,000

15,920,000

13,440,000 7,938,286 15,920,000

Mexico
Peru

l6,l6op-soo

16,160,000

On. So. Africa

14,880,000

12,507,188

Yugoslavia
6,560,000

7,520,000

37,840,000

29,217,857

3,600,000

3,600,000
5,726,756

3,428,980
66,480,000

52,622,805

Italy

All other foreign
oountries (total)

7,520,000

1,821,175

36,880,000

25,520,078 70,480,000

47,370,300

6,320,000

12,830,000

10,329,523 35,120,000

34,375,863

3,760,000

15,760,000

5,557,350

6,080,000

6,080,000 17,840,000

5,553,570

6,080,000

1,828,804

6,080,000

3Q>
*»> mj

- 2 -

Unit
: Imports
of
: as of
Quantity:Nov. 29, 1

Commodity
Absolute Quotas:
Peanets, shelled, unshelled,
blanched, salted, prepared, or
preserved (incl. roasted peanuts
but not peanut butter)...
Rye, rye flour, and rye meal

Butter substitutes, including
butter oil, containing 4-5$
or more butterfat
Tung oil

* - Imports through December 9.

12 mos. from
August 1, 1958

1,709,000

Pound

1,1*34,07!

12 mos. from
July 1, 1958
Canada
182,280,000
Other Courntries
3,720,000

Pound
Pound

182,178,561

Calendar Year

1,200,000

Pound

1,199,99:

Kbv. 1, 1958 Jan. 31, 1959
Argentina
Paraguay
Other Countries

5,525,000
7^1,000
23^,000

Pound
Pound
Pound

1,9^2,671
Quota Fill*
Quota Fill*

- 2 -

Unit
: Imports
of
: as of
Quantity:Nov. 29, 195

Commodity
Absolute Quotas;
Peanuts,., shelled, unshelled,
blanched, salted, prepared, or
preserved (incl. roasted peanuts
but not peanut butter)......

12 mos. from
August 1, 1958

1,709,000

Pound

1,434,074*

Rye, rye flour, and rye meal 12 mos. from
July 1, 1958
Canada
182,280,000
Other Courntries
3,720,000

Pound
Pound

182,178,566*

Butter substitutes, including
butter oil, containing 45$
or more butterfat

Calendar Year "

1,200,000

Pound

Jan. 31, 1959
Argentina
Paraguay
Other Countries

5,525,000
741,000
234,000

Pound
Pound
Pound

1,199,991

Tung oil Nov. 1, 1958 -

* - Imports through December 9.

1,942,672*
Quota Filled
Quota Filled

394
TREASURY DEPARTMENT
Washington, D. C.

IMMEDIATE RELEASE
Friday, December 12. 1958.

A-395

The Bureau of Customs announced today the following preliminary
figures showing the imports for consumption from January 1, 1958, to
November 29, 1958, inclusive, of commodities for which quotas were
established pursuant to the Philippine Trade Agreement Revision Act
of 1955:
• • •

Commodity

: Established Annual : Unit of : Imports as of
: Quota Quantity
: Quantity : November 29, 1958
•

•

Buttons 807,500 Gross 396,649
Cigars 190,000,000 Number 3,719,^98
Coconut oil 425,600,000 Pound 191,279,300
Cordage 6,000,000 Pound k,k35,90'J
(Refined 37,107,150
Sugars
(Unrefined

1,904,000,000

Tobacco 6,175,000 Pound 5,792,453

Pound
1,815,652,370

3Qy \y w

TREASURY DEPARTMENT
Washington, D. C.

IMMEDIATE RELEASE
Friday, December 12. 1Q58.

A-395

Commodity

: Established Annual
: Quota Quantity

Unit of : Imports as of
Quantity : November 29, 1958

*
»

Buttons 807,500

Gross

Cigars 190,000,000

Number

Coconut oil 425,600,000

Pound

191,279,300

Cordage 6,000,000

Pound

M35,907

(Refined
Sugars
(Unrefined
Tobacco 6,175,000

396,649
3,719^98

37,107,150
1,904,000,000

Pound
1,815,652,370
Pound

5,792,453

o
oc

COTTON WASTES
(In pounds)
C

^L C ^J£!H2 ma(le:froni cotton having-* staple of less than 1-3/16 inches in length, COMBER
WASTE, LAP WASTE, SLIVER WASTE, AND ROVING WASTE, WHETHER OR NOT MANUFACTURED OR OTHERWISE
ADVANCED M VALUEs Provided, however, that not more than 33-1/3 percent of the quotas shall
be filled by cotton wastes other than comber wastes made from cottons of 1-3/16 inches or more
in staple length in the case- of the following countriess United Kingdom, France, Netherlands,
Switzerland, Belgium, Germany, and Italy*
Established
.
Total Imports
Established
Imports
17
Country of Origin
TOTAL QUOTA 8 Sept. 20, 1958, to
33-1/32 of
Sept. 20, 1958
: Dec. 9. 1958
Total Quota
to Dec. 9. 1Q58
United Kingdom . . . . .
4,323,457
1,441,152
1,441,152
1,441,152
Canada
.
239,690
239,690
75,807
France
227>420
British India
69,627
22,747
Netherlands . . . . . . .
68,240
14,796
Switzerland . . . . . * . .
44,388
12,853
Belgium
38,559
Japan
341,535
China ,
17,322
Egypt
8,135
25,443
Cuba
6,544
6,580
7,088
6,580
Germany
76,329
5,482,509
1,599,886
1,687,422
1,447,732
Italy . . . . . . . . .
21.263
1/ Included in total imports, column 2,
Prepared in the Bureau of Customs.

TREASURY DEPARTMENT
Washington, D. C.
IMMEDIATE RELEASE
Friday. December IP. IQRft.

A-396

Established Quota
783,816
247,952
2,003,483
1,370,791
8,883,259
618,723
475,124
5,203
237
9,333

Imports

8,883,259
618,723

Country of Origin

Established Quota

Honduras ..............
Paraguay
Colombia ..............
Iraq
British East Africa ...
Netherlands E. Indies .
Barbados
1/Other British W. Indies
Nigeria
2/0ther British W. Africa
3/0ther French Africa ...
Algeria and Tunisia ...

1/ 0£her than Barbados, Bermuda, Jamaica, Trinidad, and Tobago.
2/ Other than Gold Coast and Nigeria.
3/ Other than Algeria, Tunisia, and Madagascar
Cotton 1-1/8" or more
Imports August I7~19 58 - December 9, 1958
Established Quota (Global) - 45,656,420 Lbs.
Staple length Allocation Imports
i^/^'or more
39,590,778
1-5/32 or more and under
1-3/8" (Tanguls)
1,500,000
1-1/8" or more and under
1-3/8"
4,565,642

39,590,778
967,713
4,565,642

752
- 871
124
. 195
2,240
71,388
21,321

5,377
16,004

689

TREASURY DEPARTMENT
Washington, D. C.
IMMEDIATE RELEASE
Friday. Danember IP, 1QR8

A-396

Established Quota

Imports

Established Quota

Country of Origin

752

Honduras
783,816
247,952
2,003,483
1,370,791
8,883,259
618,723
475,124
'
5,203
237
9,333

8,883,259
618,723

Paraguay
Colombia
Iraq
British East Africa ...
Netherlands E. Indies .
Barbados
l/0ther British W. Indies
Nigeria
2/Other British W. Africa
3/Other French Africa ...
Algeria and Tunisia ...

871
124
195
2,240
71,388
21,321
5,377
16,004

l/ Other than Barbados, Bermuda, Jamaica, Trinidad, and Tobago.
2/ Other than Gold Coast and Nigeria.
3/ Other than Algeria, Tunisia, and Madagascar,
Cotton 1-1/8" or more
Imports August 1, 19 58 - December 9, 1958
Established Quota (Global) - 45,656,420 Lbs.
Staple Length Allocation Imports
1-3/8" or more
39,590,778
1-5/32" or more and under
1-3/8" (Tanguis)
1,500,000
1-1/8" or more and under
1-3/8"
h.565.642

39,590,778
967,713
4.565.642

689

-••"&£—

COTTON WASTES
(In pounds)
COTTON CARD STRIPS made:from cotton having-a staple of less than 1-3/16 inches in length, COMBER
WASTE, LAP WASTE, SLIVER WASTE, AND ROVING WASTE, WHETHER OR NOT MANUFACTURED OR OTHERWISE
ADVANCED IN VALUES Provided, however, that not more than 33-1/3 percent of the quotas shall
be filled by cotton wastes other than comber wastes made from cottons of 1-3/16 inches or more
in staple- length in the- case- of the following countriesi United Kingdom, France, Netherlands,
Switzerland, Belgium, Germany, and Italys

Country of Origin
United Kingdom
Canada . . . .
France . . . .
British India .
Netherlands . .
Switzerland . .
Belgium . . . .
Japan • • • • •
China • . • • •
Egypt
Cuba
Germany •- • • •
Italy . . . .

Established
TOTAL QUOTA

Total Imports
j Established s ~"
Imports
~\f
Sept. 20, 1958, to s 33-1/3$ of s Sept. 20, 1958
Dec. 9, 1958
; Total Quota % to Dec. 9, 1958

4,323,457
239,690
227,420
69,627
68,240
44,388
38,559
341,535
17,322
8,135
6,544
76,329
21,263

1,441,152
239,690

5,482,509

1,687,422

1/ Included in total imports, column 2.
Prepared in the Bureau of Customs. .

1,441,152

75,807
22,747
14,796
12,853

£*5&L

25,443
7,088

£+5&L

1,599,886

1,447,732

RELEASE A.M. NSWSPAPEBS,
fuesday, December 16, 1958.

The Treasury Department announced last evening that the tenders for two series of
Treasury bills to be dated December 10, 1958, which were offered on December 11, were
opened at the Federal leserve Banks on December 15. fenders vers invited for
$1,600,000,000, or thereabouts, of 91-day bills and for Hi00fO00,0©0, or thereabouts,
of 182-day bills. The details of the two series are as followst
RA8GI OF ACCEPTED
CCKFETITIfE BIDS?

Lew
Average

91-day treasury bills
maturing March 19, 1959

182-day treasury bills
maturing JOBS 18, 1959

Approx. Equiv.
Price
Annual gate

Price

99.295 2.789*
99.263
99*266

2.916|
2.904*

9S.450*/
98.427
98.435

Approx. Equiv,
Animal Bate
3.066$
3.11136
3.095$

Excepting one tender of 1150,000
{£
percent of the aaount of 91-day bills bid for at the low price was accepted.
7 percent of the amount of 132-day bills bid for at the low price was accepted.
tOTAL fSMDERS AFFLHB FOE AMD ACCEPTED Bf FEDERAL MSEBfl BX*JmWLtf$l
District

Applied For

Boston
Sew Tork
Philadelphia
Cleveland
Richmond
Atlanta
Chicago
St. Louis
Minneapolis
Kansas City
Dallas
San Francisco

f
39,248,000
1,712,178,000
la,908,000
55,610,000
17,701,000
42,849,000
268,552,000
48,873,000
21,234,000
56,860,000
31,182,000
139,140,000

TOTALS

12,475,335,000

Accepted
\ 28,248,000
1,000,088,000
20,506,000
51,100,000
17,586,000
37,849,000
177,352,000
1*8,573,000
18,934,000
42,060,000
31,182,000
126,340,000
11,600,128,0001/:

Applied For

Accepted

t 5,345,000
545,384,000

I 5,345,000
236,124,000
5,W*3,ooo
^20,939,000
% 3,123,000
£ 3,690,00)
c57,577,000
\, 5,661,000
° 4,350,000
§i5,3l*3,ooo
t 4,i46,ooo
"38,360,000

1764,283,000

Hi0O,lOl,OOCte/

b/ Includes 1315,110,000 noncompetitive tenders accepted at the average price of 99
of Includes 138,734,000 noncompetitive tenders accepted at the Average price of 98.435

TREASURY DEPARTMENT
WASHINGTON, D.C.
RELEASE A. M. NEWSPAPERS,
Tuesday, December 16, 1958.

A-397

The Treasury Department announced last evening that the tenders for two series of
Treasury bills to be dated December 18, 1958, which were offered on December 11, were
opened at the Federal Reserve Banks on December 15. Tenders were invited for
$1,600,000,000, or thereabouts, of 91-day bills and for f 1*00,000,000, or thereabouts,
of 182-day bills. The details of the two series are as follows:
RANGE OF ACCEPTED
COMPETITIVE BIDS:

91-day Treasury bills
maturing March 19, 1959
Price

High
Low
Average

99.295
99.263
99.266

182-day Treasury bills
maturing June 18, 1959

Approx. Equiv.
Annual Rate

Price

2.789*
2.916*
2.904*

98.450a/
98.427
98.435

Approx. Equiv.
Annual Rate
3.066*
3.111*
3.095*

a/ Excepting one tender of $150,000
40 percent of the amount of 91-day bills bid for at the low price was accepted.
7 percent of the amount of 182-day bills bid for at the low price was accepted.
TOTAL TENDERS APPLIED FOR AND ACCEPTED BY FEDERAL RESERVE DISTRICTS:
District

Applied For

Accepted

: Applied For

Accepted

Boston
New York
Philadelphia
Cleveland
Richmond
Atlanta
Chicago
St. Louis
Minneapolis
Kansas City
Dallas
San Francisco

$
39,248,000
1,712,178,000
41,908,000
55,610,000
17,701,000
42,849,000
268,552,000
48,873,000
21,234,000
56,860,000
31,182,000
139,140,000

$
28,248,000
1,000,088,000
20,506,000
51,1*10,000
17,586,000
37,849,000
177,352,000
1*8,573,000
18,934,000
42,060,000
31,182,000
126,340,000

$
:
:
:
:
:
:
:
:
:
:
:

$ 5,345,000
51*5,384,000
10,443,000
20,939,000
3,123,000
4,590,000
102,877,000
5,661,000
1*,350,000
16,310,000
4,146,000
41,115,000

$ 5,345,000
236,124,000
5,443,000
20,939,000
3,123,000
3,690,000
57,577,000
5,661,000
4,350,000
15,343,000
4,146,000
38,360,000

^2,475,335,000

$1,600,128,000b/:

1764,283,000

$400,101,000c/

TOTALS

b/ Includes $315,110,000 noncompetitive tenders accepted at the average price of 99.26*
c/ Includes $38,734,000 noncompetitive tenders accepted at the average price of 98.435

December 3, 195@

mmmmmi TO m. MABTII L. MDQRII
^mmmmmmmmmtlllmmm

, i

—

'MPrm

' UMIIM

The following transactions were made in direet and guaranteed securities
of the Government for Treasury investments and other accounts during the month
of Nove&ber, 195^5
Purchases $60,717,500.00
Sales ^74,000.00
Net Purchases

|55,U3,500.00

(Sgd) (Varies I. BraiuMtn
Chief, Investments Branch
Division of Deposits k Investments

TREASURY DEPARTMENT
WASHINGTON, D.C

IMMEDIATE RELEASE,
Monday., Novontbe r" IfT-'irggB.

A^l^

During de*ete**r1958, market
transactions in direct and guaranteed
securities of the government for Treasury
investment and other accounts resulted in
net purchases by the Treasury Department

of 4*Jfr3ftW>oo /^C

¥3, J***

TREASURY DEPARTMENT

*03

WASHINGTON. D.C.

IMMEDIATE RELEASE,
Tuesday, December 16, 1958.

A-398

During November 1958, market
transactions in direct and guaranteed
securities of the government for Treasury
investment and other accounts resulted in
net purchases by the Treasury Department
of $55,143,500.

oOo

THOMAS GRAYDON UPTON
Assistant Secretary of the Treasury

A-

PLACE AND DATE OF BIRTH: Salem, Massachusetts, March 26, 1908.
FATHER: George Upton — MOTHER: Loma Graydon Upton.
EDUCATION: Milton Academy, Milton, Massachusetts. .
Harvard College (English Major — A.B. cum laude - 1931J
Harvard Business School (1932)
MARRIED: Ann Nash, Savannah, Georgia, 1942.
CHILDREN: Ann A., Joseph Cheshire, Bryan Graydon, George.
BRIEF CAREER SUMMARY:
1932-1933 - Foreign Banking Trainee, M.M. Warburg & Co., Hamburg,
Germany, (now Brinckmann Wirtz & Co.);
Muenchmeyer & Co., Hamburg; Guaranty Trust Co., London.
1934-1935 - Credit-Foreign Department, Bank of the Manhattan Co., N.l
1936-1940 - European representative, Bank of the Manhattan Co., with
offices in London.
1941-1946 - Entered military service as enlisted man and served
fifteen months with the 207th Coast Artillery A'.A'.
Received commission in Finance at Officers Candidate
School, Indianapolis, July, 1942. Taught finance
classes at Officers School at Duke University. Served
in London with O.S'.S'. and with Budget Office of the
War Department, Wash.,D.C. Discharged in 1946 as
Lt. Colonel.
1946-1948 - Associated with W.H. Sehubartin investment management woi
and corporate financing activities. Director of severs
small commodity and export-import companies.
1949-1950
Trainer
& Associates,
Investment
Counselors, N.Y',
Dec.
11, 1958--Partner,
Appointed
by President
Eisenhower
to be Assistant
June, 1950 - ViceSecretary
President,
Foreign
Department
of
The
Philadelphia
®f the Treasury (Recess Appointment)
Dec. 1958
National
and U.S.Bank.
Executive Director of the International Bank
for Reconstruction & Development.
Dee. 17, 1958 - Took oaths of office.
Principal Professional and Business Activities (prior to appointment as
Asst. Secretary of the Treasury):
Chairman - Philadelphia Port Bureau; Mayors Committee
on Port Promotion.
Director - Philadelphia Commercial Exchange (Grain) and
Chairman of its Finance Committee; World. Affairs'
Council of Philadelphia; Rosemont-V*i llano va Civic
Association; and director and past president of Bankei
Association for Foreign Trade.
Member - Advisory Committee of Export-Import Bank of Washington, D. C.
MEMBERSHIPS: Clubs - Merlon Cricket, Haverford, Pennsylvania;
Rittenhouse, Philadelphia; Harvard, New York Cit
HOME: 1215 Montgomery Avenue, Rosemont, Pennsylvania.
December, 1958.

405

IMMEDIATE RELEASE,
Wednesday, December 17, 1958.

A-399

Secretary Anderson today administered the oaths of
office to T. Graydon Upton of Philadelphia, as an
Assistant Secretary of the Treasury, and as United States
Executive Director of the International Bank for
Reconstruction and Development.
Mr. Upton succeeds Tom B. Coughran of California, who
resigned from these positions on December 15.
An interim appointment of Mr. Upton as Assistant
Secretary and as the U. S. Executive Director of the
International Bank was made by President Eisenhower on
December 11. As Assistant Secretary Mr. Upton will
supervise the Treasury's international finance operations.
Friends and Treasury associates of Mr. Upton were
present at the swearing-in ceremony.
Mr. Upton is a resident of Rosemont, Pennsylvania,
and served as Vice President of The Philadelphia National
Bank and head of its foreign department.
(Biographical sketch attached)

DRAFT

IMMEDIATE RELEASE
Wednesday, December 17, 1958

-yi

Secretary Anderson today administered the oath^of office to

T. Graydon Upton ofCfieaaa^yani-a as^an Assistant Secretary of the
Treasury, and as United States Executive Director of the International
Bank for Reconstruction and Development^^!' a- tenr-of Lwu years^J
^2^0^m^^^^^Lm^ . , . , «.
l^tn4ygLm*

Mir. Upton g g H . gupoi^sEri^h'g'"'TT^a^^
^eperarfcionsT-a-'rB^pTOSCTility formerly exercised byj Tom B. Coughran^ who

4y^hiJ -Mu*^ a .-^:f,^ --: *
resigned ]as Assis%iafrb-^gtrreiyaT^/On December 15*
as Assistant

An interim appointment of Mr. Upton

Secretary and,, the U. S. Executive Director £ of the International Bank was
•££^Zy ^*^^^e^^,^^

)d^lL^ft^^-^^>m4

made by-Ess.President Eisenhower on December 11. % , , 2t$t*£%9x*> K-&faJL&^

Friends and Treasury associates of Mr. Upton were present at the
swearing-in ceremony. .
^C^LA
/Q4*jL*m*6#f 4>ZmS
Mr. Upton Is a resident of Rosemont, Pennsylvania, whare he was
Vice President of The Philadelphia National Bank and head of its foreign
department.

(Biographical sketch attached.)
y / ^^tf^'''*'^^
<?

•>t^
!>

't-<.

TREASURY DEPARTMENT
WASHINGTON, D.C

IMMEDIATE RELEASE,
Wednesday, December 17, 1958.

A-399

THOMAS GRAYDON UPTON
Assistant Secretary of the Treasury

PUCE AND DATE OP BIRTH: Salem, Massachusetts, March 26, 1908.
FATHER: George Upton — MOTHER: Lorna Graydon Upton.
EDUCATION: Milton Academy, Milton, Massachusetts.
Harvard College (English Major — A".B. cum laude - 1931)
Harvard Business School (1932)
MARRIED: Ann Nash, Savannah, Georgia, 1942.
CHILDREN: Ann A., Joseph Cheshire, Bryan Graydon, George.
BRIEF CAREER SUMMARY:
1932-1933 - Foreign Banking Trainee, M.M. Warburg & Co., Hamburg,
Germany. (now Brinckmann Wirtz & Co.);
Muenchmeyer 8c Co., Hamburg; Guaranty Trust Co., London.
1934-1935 - Credit-Foreign Department, Bank of the Manhattan Co., N.Y.
193O-1940 - European representative, Bank of the Manhattan Co., with
offices in London.
1941-1946 - Entered military service as enlisted man and served
fifteen months with the 207th Coast Artillery A'.A'.
Received commission in Finance at Officers Candidate
School, Indianapolis, July, 1942. Taught finance
classes at Officers School at Duke University. Served
in London with O.S.S'. and with Budget Office of the
War Department, Wash.,D.C. Discharged in 1946 as
Lt. Colonel.
1946-1948 - Associated with W.H. Schubart in investment management work
and corporate financing activities. Director of several
small commodity and export-import companies.
1949-1950 - Partner, Trainer & Associates, Investment Counselors,N.Y'.
June,1950 - Vice President, Foreign Department of The Philadelphia
Dec. 1958
National Bank.
Dec. 11, 1958 - Appointed by President Eisenhower to be Assistant
Secretary of the Treasury (Recess Appointment)
and U.S. Executive Director of the International Bank
for Reconstruction & Development.
Dec. 17, 1958 - Took oaths of office.
Principal Professional and Business Activities (prior to appointment as
Asst. Secretary of the Treasury):
Chairman - Philadelphia Port Bureau; Mayors Committee
on Port Promotion.
Director - Philadelphia Commercial Exchange (Grain) and
Chairman of Its Finance Committee; World Affairs'
Council of Philadelphia; Rosemont-Villanova Civic
Association; and director and past president of Bankers
Association for Foreign Trade.
December.
195$.
Member - Advisory Committee of Export-Import Bank of Washington, D. C. i
MEMBERSHIPS:
HOME:
1215 Montgomery
Clubs - Merlon
Avenue,
Rittenhouse,
Cricket,
Rosemont,
Philadelphia;
Haverford,
Pennsylvania.
Harvard,
Pennsylvania;
New York City

03
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

until such bill's are sold, redeemed or otherwise disposed of, and such bills are ex
cluded 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

decimals, e. g., 99*92$. 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.
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 such respect shall be
final*

Subject to these reservations, noncompetitive tenders for $200,000 or less
90
181
for the &-day bills and noncompetitive tenders for $50,000 or less for the X&2~day
bills 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 December 26, 1958 > in cash or other
immediately available funds or in a like face amount of Treasury bills maturing
December_ 26, 1958

. 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.
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

:• i i

mL <y

TREASURY DEPARTMENT
Washington

RELEASE A.M. NEWSPAPERS,
Thursday, December 18, 1958
The Treasury Department, by this public notice, invites tenders for two series
of Treasury bills to the aggregate amount of $2T000.000.000 >

thereabouts, for

85*
cash and in exchange for Treasury bills maturing

December 26. 1958 J

i n t h e amoun fc

of $ 1,799,811,000 , as follows:

tm 90 -day bills, for $ 1,600.000,000 , or thereabouts, to be

~-~~

'm.
dated December 26, 1958

181

-day bills, for $ 400,000,000

"W"

, and to mature

March 26. 1959

, or thereabouts, to be

Til
dated December 26, 1958

, a n d to mature

June 25, 1959

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, $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, one-thirty o'clock p.m., Eastern Standard time, Monday, December 22, 1958
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

RELEASE A.M. NEWSPAPERS,
Thursday, December 18, 1958.

A-400

The Treasury Department, by this public notice, invites
tenders for two series of Treasury bills to the aggregate amount
of $ 2,000,000,000, or thereabouts, for cash and in exchange for
Treasury bills maturing December 26, 1958, in the amount of
$1,799,811,000, as follows:
90-day bills, for $1,600,000,000, or thereabouts, to be
dated December 26, 1958, and to mature March 26, 1959.
l8l-day bills, for $400,000,000,
or thereabouts, to be
dated December 26, 1958, and to mature June 25, 1959.
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, $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, one-thirty o'clock p.m., Eastern
Standard time, Monday, December 22, 1958.
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.
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

- 2 the amount and price range of accepted bids. Those submitting
tenders will be advised of the acceptance or rejection thereot.
The Secretary of the Treasury expressly reserves the rigkt to
accept or reject any or all tenders, in whole or in part, ana
his action in any such respect shall be final. Subject to
these reservations, noncompetitive tenders for $200,000 or -Less
for the 90-day bills and noncompetitive tenders for $50,000 or
less for the l8l«day bills 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 December 26,1958, in cash or other immediately available
funds or in a like face amount of Treasury bills maturing
December 26, 1958. 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.
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 195**.
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 k5k (b) and 1221 (5) of the Internal
Revenue Code of 195** 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
0O0 taxable year for which the
return is made, as ordinary gain or loss.
Treasury Department Circular No. 4l8, Revised, 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.
TO-OAS-DC

41 a
T&L5ASE A.M. BMSMPI1S,

Tte Treasury Gtf»rta»i* ar.nou««fe lant evening that t*o t w e » ;or ^
•***• *
Treasu^r Lilla to be ^ated 'ie«bir :6, }?>% which « r * offers ^D . ace^ber 18, were
opened at the s*d«nl Reserve «wnlw -n " acerfcor 22. ienters v ®f e M ; w 7 fA ! ^ ! L M ^ & * «
n,60Q,000,000, or ttamtbovtt/of 90-.ay bills <md for 1,00,000,000, or « » ? « * * * ,
of m - > a > uill*. rh«"tf*fc*il» of turn t*o"series *r« a* i*ilowBt r Q M .n ' ^ e
1, 90^day
Treasury bills
HAV:*
0* A^C^-TV
V
maturing Harch 26,. 19g9
CJ -T.'uVn, 3 1 Si
t i
?-rice p

99.3m
ff.313
99*315

High,Urn ;iy
Armr***

•*««

«Mfr

^pproic. Lqulv. a 1 l!
i m m s l ~jate
J
.id

fcatttrlt^cfrrtA'25,_1959
Price

L3r

* Annual 1st©

•2;sw

98.Jb9a/r

3»023*
3.017*'

2*?39J>

&/ j>c_^tiiig o«a t@B«l#r of £150,000
« •>
. - Af *»
IS pmrm**% n» rtho amount of 90-day bills bid for a t t%* Irtrprieo if*® accepted.
35 porwaat of tii® anouBt of l8l-r«ay M I X ® bM tor * t tbo low .price V M accepted.
"
* "** a of 1Q54TOTAL T'*^'t*r".h.5 .- F: I A L fOfc A!i. ACG£*Tbi< 3¥ F U ^ L fi^lfl 1'ISrnICT'i
0 ther*
Accepted
• 1 strict ; g
Apgliad fo*__ » , Aecoytoa
'* Applied t For
:

Boston4
ftatr jar*

16,689,000 -:1 ri- 5^25,000 , I ^,750,CXK)
-•
35,237,000n |
1,057,156,000 s A C 6°?*ISI,OOO ft4- 2$li,22$,000
1,650,922,000 „
j
^
*
16,1*29,000 i 0 , 6,766,000
3k,319,m®
t oe 1,61*8,000
%na^l|Ma > .
*- 57,012,000 f i 37,358,000
lrisHi,108,ooo
C l S T t l a M -b- ,. . 1 6 o , 727,000
l4. 1,733,0(X) b i n
amo'Ht'f 1*75,000 •t.
;r4-, .17,260,000
if^3*a»
RicHiond. -%
Atlaufcuvi her-ui 30,825,000 La L B 26,375,000 1
3,39O,0OO16 unt*2»358,000
Chlommpi Vila
263,UiU,000i~cti3
•-:n 187,393,000
21,729,000. 8- llli,133,000 p ^ Sif211,000
c
t . Loci* M i l *
x 26,963,000
i*,a&6,oa> 1 I*;,:jii,2M,000
. n > 6.323,000
li 16,771,000,, ?.'>
f6l8,000
^ i m « a p 0 l i * ar.lyj 21,^76,000
9,052,000
8,657,000
ia
33,2147,000
f
Kansas City ^J €
4li,3^7,000
f,i373,000
: 3,533,000 • *
21,299,000
y
v
.
Tmll&a o m e t*x re 23,1>0,000
.38,72^,000 ^>-iys,is6aooo
iec
San IVanclaco bl 161,621 yOQO - fl,#0' 703,000!/?
16 ;Ve m$k,%l6,QQQ ^i:f
:
/
.
Ilr00,666,00^/
p u sc iase,
»«
, -» >y !•' '*V * »r
t
Osa,
;
TOTALS
r
o
a
£2,393^51,050
b / lix;lud®s #303,229,000 noaavKpotitlvo tenders accepted at tho av@rag# prlc© @f 99.33
ivtaiu is •
KS «,->; c-,....j
of ImXmidmmM^^mgOOQ-^mm^^
&%.tkm-mmrmm -orteo of 98.1i63

viOO

0A»

TREASURY DEPARTMENT
EaESSHaSESEi

WASHINGTON. D.C.
RELEASE A. M. NEWSPAPERS,
Tuesday, December 23, 1958.

A-&01

The Treasury Department announced last evening that the tenders for two series of
Treasury bills to be dated December 26, 1958, which were offered on December 18, were
opened at the Federal Reserve Banks on December 22. Tenders were invited for
$1,600,000,000, or thereabouts, of 90-day bills and for $2*00,000,000, or thereabouts,
of l8l-day bills. The details of the two series are as follows:
RANGE OF ACCEPTED
COMPETITIVE BIDS;

90-day Treasury bills
maturing March 26, 1959
Price

High
Low
Average

99.320
99.313
99.315

Approx. Equiv. j
Annual Rate
:
2.720$
2.71*8$
2.139%

s
i
!

181-day Treasury bills
maturing June 25, 1959
Price

Approx. Equiv.
Annual Rate

98.li92a/
98.1i80~
98.1*83

2.999$
3.023$
3.017$

a/ Excepting one tender of $150,000
B percent of the amount of 90-day bills bid for at the low price was accepted.
35 percent of the amount of 181-day bills bid for at the low price was accepted.
TOTAL TENDERS APPLIED FOR AND ACCEPTED BY FEDERAL RESERVE DISTRICTS:
District
Boston
New Tork
Philadelphia
Cleveland
Richmond
Atlanta
Chicago
St. Louis
Minneapolis
.Kansas' City
Dallas
San Francisco
TOTALS

Applied For

Accepted

\ 35,237,000
1,650,922,000
3k,379,000
60, 727,000
17, 260,000
30, 825,000
283,!lOi,000
26, 963,000
21, 876,000
hk,31*7,000
23, 150,000
161*,621,000

* 16,689,000
1,057,156,000
16,1*29,000
57,012,000

$2,393,1*51,000

11*,l*75,ooo
26, 375,000
187,393,000
21, 729,000
16,771,000
33,21*7,000
21, 299,000
132,128,000
$1,600,703,000b/

Applied For

Accepted

fr 5,825,000
603,151,000
6,768,000
37,358,000
1,733,000
3,390,000
lll*,133,000
6,323,000
1*,886,000
9,052,000
3,533,000
38,72l*,OOQ

1*, 750,000
251*,228,000
1,61*8,000
3l*,108,000
1,273,000
2,358,000
58,211,000
3,618,000
1*, 286,000
8,657,000
2,373,000
25,156,000

$83l*,876,000

$1*00,666,000c/

b/ Includes $303,229,000 noncompetitive tenders accepted at the average price of 99.315
c/ Includes $33,250,000 noncompetitive tenders accepted at the average price of 98.1*83

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, Revised, 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

d1 D

T-.T-t.r~, 9

JSXK
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.
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 per-

cent of the face amount of Treasury bills applied for, unless the tenders are accom
panied 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 such respect shall be

final. Subject to these reservations, noncompetitive tenders for $200,000 or less
90
181
for the/jBX-day bills and noncompetitive tenders for $50,000 or less for the/Wf-day
bills 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 January 2, 1959 , in cash or other
immediately available funds or in a like face amount of Treasury bills maturing
J<mmi

Lllr1959 °aSh

and exchange tenders

will receive equal treatment.

416
TREASURY DEPARTIMT
Washington

RELEASE A.M. NEWSPAPERS, /V~" -*"""""""" f'
Wednesday, December 24. 1958 •
sick

The Treasury Department, by this public notice, invites tenders for two series

of Treasury bills to the aggregate amount of '!> 2.000.000,000 , °r thereabouts, for
cash and in exchange for Treasury bills maturing January 2, 1959 ,

the amount

—jSF~

, o r thereabouts, to be

W
dated

January 2, 1959
j

, a n d "to mature A|>ril 2, 1959

r^.
mmmmmmym.

5585
^ •"/

181 -day bills, for $ 400,000,000 , or thereabouts, to be
p^C
(XUO0C
dated January 2, 1959
, and to mature July 2, 1959
x^d>cx)c
3£fcB$JC

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, $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, one-thirty o'clock p.m., Eastern Standard time, Monday,
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

TREASURY DEPARTMENT

imfflrm7ttLS3mBBta?=ww»-'™'^

WASHINGTON. D.C.

RELEASE A.M. NEWSPAPERS,
Wednesday, December 2k. 1958.

A-402

The Treasury Department, by this public notice, invites
2*o r nn£°£j; wo s e r i e s o f Treasury bills to the aggregate amount
of $^,000,000,000, or thereabouts, for cash and in exchange for
?? e D£V r ?J^ii 8 m a t u r i n S January 2, 1959,
in the amount of
$1,801,327,000, as follows:
90-day bills, for $1,600,000,000, or thereabouts, to be
dated January 2, 1959,
and to mature April 2, 1959.
lol-day bills, for $400,000,000,
or thereabouts, to be
dated January 2, 1959.
and to mature July 2, 1959.
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, $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, one-thirty o'clock p.m., Eastern
Standard time, Monday, December 29, 1958.
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.
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

- 2 the amount and price range of accepted bids. Those submitting
tenders will be advised of the acceptance or rejection ^rf01
•
The Secretary of the Treasury expressly reserves the r i g ^ ™
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 $200,000 or less
for the 90-day bills and noncompetitive tenders for $50,000 or
less for the l8l-day bills 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 January 2, 1959,
in cash or other immediately available
funds or in a like face amount of Treasury bills maturing
January 2, 1959.
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.
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
oOo
return is made, as ordinary gain or loss.
Treasury Department Circular No. 4l8, Revised, and this
notice, prescribe the terms of the Treasury bills and govern
°-OAS-OC
the conditions of their issue. Copies of the circular may be
obtained from any Federal Reserve Bank or Branch.
T

9T*

. :,;: y.
Thm£® y$\&b^Wt ijig
- rejection thereof.
BELSASS A. it, mtsmmrn,
ves' the right to
Tuesday, Peotubor 30, 1958
or * part " nd
The Treasury Department announced last evening that the tenders'for Wo series ot
Treasury bills tofeedated #amiary 2, 1959, which were offered ** ®^hJf/«>
"eTe
opened at the^Federal Keserve Banks onftftftfenr29. fevers * * » J £ r i * s * fo* *' +m
11,600,000,000/or thereabout®, of 90-day bills and for #400,000,000, or thereabouts,
of l8l-day bills, the details of the two series are a® follows
-+ive
iSl-day treasury kills
90~day treasury bills
MAm% OF•MtttffVSB'
maturing
MXj 2. 1959
igaturlng April t, 1959
Approx. 8$4Y.
Price
Annual late
99.335
99.324
99.327

Ii#i
I»0W

Average

Price
98.542 Ts
98.528
98.532

2.660JS
2.704$
2.$90%

Approx. Iqmiv.
Annual Rate
aG6@

P 2.900$
2.928^
, . 2.920^

*» int'2i\. ^

40 percent of tbe amount of 90-day bills bid for at the low price was accepted.
74 percent of the amount of 181-day Mils bid for at the low price was- accepted.
195* treat ...ant,
The bills
other
from
TOTAL mSm
APHJDKD w a AM ACCEPTED m ntefefti ummm Biatucfs*
% Applied For

District

Applied For

Accepted

Boston
lew fork
Philadelphia
Cleveland
Richmond
Atlanta
Chicago
St. Louis
Minneapolis
Kansas City
Dallas
San francisco

I
50,959,000
1,762,688,000
21,847,000
54,932,000
7,631,000
28,290,000
355,392,000
18,911,000
15,817,000
50,284,000
15,237,000
89,895*000
12,478,883,000

i
35,699,000
1,006,896,000
13,547,000
,54,882,000
- 8 7,581,000
23,790,000
309,242,000
18,561,000
15,317,000
40,284,000
15,237,000
-r, ,59,349,000
$l,600,285,000a/t

Accepted

:| 1,245,000
I 2,295,00)
^278,063,000
567,463,000
7,837,000 \f, 2,837,000
20,101,000 D 1 18,101,000
^ - 598,000
1,498,000
** 1,743,000
2,928,000
61,059,000
108,174,000
"~ 3,197,000
3,215,000
4,953, mo 2^4,953,000
8
^8,878,000
9,3%1,0®0
1,362,000
1,762,000
18,073,000
25,299,000
$754,906,000
1400,109,000^

a/ Incites #220,789,000 noncompetitive tenders accepted at the average price of 99.32
S/ Includes 119,192,000 noncompetitive tenders accepted at the average price of 98.532

HA.OtfT'V-

& * '-

TREASURY DEPARTMENT

w»?y

W A S H I N G T O N , D.C.
RELEASE A. M. NEWSPAPERS,
Tuesday, December 30, 1958.

A-403

The Treasury Department announced last evening that the tenders for two series of
Treasury bills to be dated January 2, 1959, which were offered on December 24, were
opened at the Federal Reserve Banks on December 29. Tenders were invited for
$1,600,000,000, or thereabouts, of 90-day bills and for $400,000,000, or thereabouts,
of 181-day bills. The details of the two series are as follows:
RANGE OF ACCEPTED
COMPETITIVE BIDS:

High
Lew
Average

90-day Treasury bills
maturing April 2, 1959

l8l-day Treasury bills
maturing July 2, 1959

Price

Approx. Equiv,
Annual Rate

Price

Approx. Equiv,
Annual Rate

99.335
99*324
99.327

2.660*
2.704*
2.690* •

98.542
98.528
98.532

2.900*
2.928*
2.920*

40 percent of the amount of 90-day bills bid for at the low price was accepted.
74 percent of the amount of l8l-<iay bills bid for at the low price was accepted.

TOTAL TENDERS APPLIED FOR AND ACCEPTED BY FEDERAL RESERVE DISTRICTS:
District

Applied For

Boston
New York
Philadelphia
Cleveland
Richmond
Atlanta.
Chicago
St. Louis
Minneapolis
Kansas City
Dallas
San Francisco

\ 50,959,000
1,762,688,000
28,847,000
54,932,000
631,000
7,
290,000
28,
392,000
355,
911,000
18,
817,000
15,
284,000
50,
237,000
15,
895,000
$2,478,883,000

Accepted
\ 35,699,000
1,006,896,000
13,547,000
54,882,000
7,581,000
23,790,000
309,242,000
18,561,000
15,217,000
40,234,000
15,237,000
59,349,000

Applied For

Accepted

$ 2,295,000
567,463,000
7,837,000
20,101,000
1,498,000
2,928,000
108,174,000
3,215,000
4,953,000
9,381,000
1,762,000
25,299,000

$ 1,245,000
278,063,000
2,837,000
18,101,000
598,000
1,743,000
61,059,000
3,197,000
4,953,000
8,878,000
1,362,000
18,073,000

$l,600,285,OOOa/: $754,906,000

$400,109,000b/

a/ Includes $220,789,000 noncompetitive tenders accepted at the average price of 99
a Includes $19,192,000 noncompetitive tenders accepted at the average price of 98,532
%f

oc'U

income tax return only the difference between the price paid for such bills, whether

521

decimals, e. g., 99*92$. 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.
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 such respect shall be
final. Subject to these reservations, noncompetitive tenders for $200,000 or less
for the 91-day bills and noncompetitive tenders for $50,000 or less for the 182-day
bills 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 _januarv8, 1959 . in cash or other
immediately available funds or in a like face amount of Treasury bills maturing
'

fTa

™'jg^' ^

' **** W l d

exchan

S e tenctora will receive equal treatment.

w c i_

TREASURY DEPARTMENT
Washington

RELEASE A.M. NEWSPAPERS,
Wednesday, December 51, 1958 •
The Treasury Department, by this public notice, invites tenders for two series
of Treasury bills to the aggregate amount of $ 2T000.000,000 >

thereabouts, for

cash and in exchange for Treasury bills maturing January 8. 1959 >
of

the amount

$1*800,06?.000 , as follows:
91 -day bills, for $1,600,000,000

fcgjt m

> or thereabouts, to be

""
dated

January 8. 1959

, a n d to mature

April 9. 1959

182 -^a-y bills, for $ 400.000.000 , °r thereabouts, to be

TpBff
dated

January 8. 1959

and to mature

July 9. 1959

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, $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, one-thirty o'clock p.m., Eastern Standard time, Monday, January 5. 1959
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

TREASURY DEPARTMENT
WASHINGTON, D.C.

RELEASE A.M. NEWSPAPERS,
Wednesday, December 31, 1958

A-404

The Treasury Department, by this public notice, invites
tenders for two series of Treasury bills to the aggregate amount
of $ 2,000,000,000, or thereabouts, for cash and in exchange for
Treasury bills maturing January 8, 1959, in the amount of
$ 1,800,069,000, as follows?
91 -day bills, for $ 1,600,000,000, or thereabouts, to be
dated January 8, 1959,
and to mature April 9, 1959.
182 -day bills, for $ 400,000,000, or thereabouts, to be
dated January 8, 1959
and to mature July 9, 1959.
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, $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, one-thirty o'clock p.m., Eastern
Standard time, Monday, January 5, 1959.
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.
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

- 2 the amount and price range of accepted bids. Those submitting
tenders will be advised of the acceptance or rejection thereoi.
The Secretary of the Treasury expressly reserves the right to
accept or reject any or all tenders, In whole or in part, ana
his action in any such respect shall be final. Subject to
these reservations, noncompetitive tenders for $200,000 or less
for the 91-day bills and noncompetitive tenders for $50,000 or
less for the 182-day bills 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 January 8, 1959, in cash or other immediately available
funds or In a like face amount of Treasury bills maturing
January 8, 1959.
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.
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. 4l8, Revised, and this
notice, prescribe the terms of the Treasury bills and govern
TO OASOC
the conditions of their issue. Copies of the circular may be
oOo
obtained from any Federal Reserve Bank or Branch.

/ Treas.
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v.115

Treas.
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U.S. Treasury Dept
Press Releases

U.S. Treasury Dept.
Press Releases

BORROWER'S NAME

U.S. TREASURY LIBRARY

1 0031487

Full text of Press Releases of the United States Department of the Treasury : Volume 115

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