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TREASURE O f f * * * 1

g i ^ A,, ,y. w m n n , .^f^^if^aia.Jimt

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The treasury Bep»rtmesa& announced last evening that the teiisier® for two series of
Treasury bills, one aeries to be an additional 1 M M #f the bills dated October 8, 1 9 $
and the other serias to be dated Mmmry 7, VM09tihlsliwere offered mm Beeejiber 30, 1959, were egwatf si the federal ieserva Banks on Jtonargr 4. Testers were invited ffcr;
tl,2OOf0O0,OOO, or l l M M n « « e % « f ll«ety bills aad for 1400,000,000, or thereabouts, of
182-day M i l s , The details of the %m series are m tmXXmst
\
RAISE <V AC€l?fE©
91-iay Treasury H E i
lOt-etqr treasury M H s

eoMivmivB ixsBt
High
Lew

Sft.06*
4.692*

10.8U4
98*137

k«m$xf

•JMtt , ftiB"Hl.^f.
97*448
$*04«a/
97-400
f.lfc*
97*422

5*011*1/

*/ Excepting t k m tenors .totalis te_i0t000
5 pmmmt of mm a m i * mi 91-day M i l * M i Jfcr at mm Im p?i*ie
31 pereesit of the auraa* of 182«*_j Milt* bid fur •* the 1ms fries
TOTAL TtiOBS Am2» FOR 4MB ACCBFOD If USUAL MttSm lUttfUCTfli
BistFiet

*i»Usd y@g

mm mm

'• 93,246,000
1,474,735,000
111,348,000

ffeUadelpfeia
Cleveland
Atlanta
it. Lowis
Wimmmpolim
mmmm City
Bellas
San Ff*a»lse*

4#efjjgi

3t,546,ooo
14,676,00©
50,131,000
iff,aio,ooa
30,048,000
11,111,000
42,450,000
11,011,000
H,!»,3!f,000
--jmtOmrmmm

15,ttt,0Q0

m$m9mm
14,548,000
3t*S46,ooo
14,616,000

-.5»,m»ooo
H}915O9OQO

Annlled For
I 3,701,000
S76f®fe0fOO0
12,212,000
14,341,000
2,itd,ooo
5*177,000
70,164,000
4,705,000

I 3,711,000
261,140,000
7,111,000
24,342,000
2,828,00c1
5*177*000
41,664,000
4,705*000
3,0U»08O
8,112,000
4,917,00©
§400,011,000

50,040,000
39m$9om
12.,ttl,000
8,212,000
42,450,000
4,117,000
21,011,000 1/ 1744,511,000
TOTALS
#X*tO0,Sr46,O0©
, itti?>9t9W
. 69,086,000
W Inelmdas #239,374,000 aMMqptltlv* twrftni •etayfUO at the average, price of 18.1
XtelnOt* #57*613*000 mmm^mtttlm
tenders aeesptftd at the average prise of 97*41
* Average rate om a eei^n lata* tqplmlAgfc yield basis is 4* 71* for the 91-day bill
and 5.32$ for the lftt«*ar Mils* Interest rates en bills are quoted en the has!
•f basic diaeau*, with their length in mtm&X wsmhor of days related to a 140year. In eastosat, yields on certificates, antes, and heads are eestp&ed on
basis @f laUreafc m the laveataeiis, villi the nyaber of days resaaia^g in a
animal interest palest period related to the actual number of days in the
with safeiaaosal aoagftttadlag if mora than one eoapon period is involved*

*hmm

TREASURY DEPARTMENT
WASHINGTON, D.C
A-721

RELEASE A. M« NEWSPAPERS, Tuesday, January 5» I960.

The Treasury Department announced last evening that the tenders for two series of
Treasury bills, one series to be an additional issue of the bills dated October 8, 1959,
and the other series to be dated January 7, I960, which were offered on December 30,
1959, were opened at the Federal Reserve Banks on January 4. Tenders were invited for
$1,200,000,000, 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 followst
RANGE OF ACCEPTED
COMPETITIVE BIDS;

High
Low
Average

91-day Treasury bills
maturing April 7, I960
Spprox. Equiv,
Price
Annual Rate
98.862
98.814
98.837

4.502$
4.692$
4.602$ 1/

182-day Treasury bills
maturing July 7. I960
ipprbz. Equiv.
Price
Annual Rate
97.448 a/
97.400 "
97.422

5.048$
5.143$
5.099$ 1/

a/ Excepting three tenders totaling $250,000
J percent of the amount of 91-day bills bid for at the low price was accepted
31 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

$
23,248,000
1,474,715,000
24,348,000
32,546,000
14,676,000
30,931,000
175,130,000
30,048,000
12,119,000
42,450,000
21,099,000
69,086,000

s $ 3,789,000
s
576,040,000
12,292,000
t
%
24,342,000
:
2,828,000
t
5,977,000
2
70,164,000
s
4,705,000
:
3,015,000
8,212,000
s
t
4,917,000
:
28,230,000

$ 3,789,000
261,140,000
7,292,000
24,342,000
2,828,000
5,977,000
45,664,000
4,705,000
3,015,000
8,112,000
4,917,000
28,230,000

$1,950,396,000

$1,200,246,000 b/ $744,511,000

TOTALS

13,248,000
786,565,000
14,348,000
32,546,000
14,676,000
30,931,000
133,130,000
30,048,000
12,119,000
42,450,000
21,099,000
69,086,000

$400,011,000 of

b/ Includes $239,374,000 noncompetitive tenders accepted at the average price of 98
c/ Includes $57,613,000 noncompetitive tenders accepted at the average price of 97.422
if Average rate on a coupon issue equivalent yield basis is 4.73$ for the 91-day bills
and 5.32$ for the 182-day bills. Interest rates on bills are quoted on the basis
of bank discount, with their length in actual number of days related to a 360-day
year. In contrast, yields on certificates, notes, and bonds are computed on the
basis of interest on the investment, with the number of days remaining in a semiannual interest payment period related to the actual number of days in the period,
and with semiannual compounding if more than one coupon period is involved.

t
RELEASE A. M. MEWSPAHMS, Hednesday, January 6, I960.

k'I n

The Treasury Department announced last evening that tenders for an additional
f2,0G0,000,00G, or thereabouts, of the Tax Anticipation Series Treasury bills dated
October 21, 1959, to mature June 22, I960, were opened at the Federal Reserve Banks on
January 5. The additional amount of bills, which were offered on December 30, 1959,
will be issued on January 8 (166 days to maturity date).
The details of the additional issue are as followst
••__^- Total applied tor - 14,068,751,000
Total accepted
- 2,000,137,000
(includes $352,987,000 entered on a
noncompetitive basis and accepted in
full at the average prise shown below)
Range of accepted competitive bldst <teepfciag one tender of $626,000)
High - 97.865 loMvaleni rate of discount approx. 4.630$ per annua
Low
- 97.810
•
«
«
*
"
4.749$ "

•

Average - 97.821 • e • * * 4.726$ » » J
(8 percent of the amount bid for at the low prise was accepted)
Federal Reserve fetal Total
District
Boston
Sew York
ffeiladelphia
Cleveland
Richmond
Atlanta
Chicago
St. Louis
Minneapolis
laneas City
Dallas
ian Francisco

Applied tor
I 221,178,000
1,547,001,000
206,873,000
428,967,000
157,404,000
168,960,000
524,303,000
123,188,000
125,970,000
118,471,000
142,005,000
304,424,000

114,678,000
719,239,00©
108,699,000
186,607,000
79,206,000
92,852,000
305,297,000
51,561,000
66,757,000
53,592,000
U5,7O5,OO0
105,944,000

TOTAL 44,066,751,000 18,000,157,000

Average rate on a coupon issue equivalent yield basis is 4*91$ for these bills
Interest rates on bills are quoted ©n the basis of bank discount, with their
length in actual number of days related t© a 360-day year, la contrast, yields
on certificates, notes, and bonds are computed on the basis of Interest on the
investment, with the number of days remaining in a semiannual interest payment
pmriod related to the actual number of days in the period, and with semiannual
compounding if more than one coupon period is involved.

TREASURY DEPARTMENT
WASHINGTON, D.C
RELEASE A . M . NEWSPAPERS, Wednesday, January 6, I960.

A-722

The Treasury Department announced last evening that tenders for an additional
$2,000,000,000, or thereabouts, of the Tax Anticipation Series Treasury bills dated
October 21, 1959, to mature June 22, I960, were opened at the Federal Reserve Banks on
January 5. The additional amount of bills, which were offered on December 30, 1959,
will be issued on January 8 (166 days to maturity date).
The details of the additional issue are as follows:
Total applied for - $4,068,751*000
Total accepted
- 2,000,137,000

(includes $352,987,000 entered on a
noncompetitive basis and accepted in
full at the average price shown below)

Range of accepted competitive bids: (Excepting one tender of $626,000)
High
Low

- 97-865 Equivalent rate of discount approx. 4.630$ per annum
- 97.810
'»
«
«
*
"
4.749$ ff w

Average

- 97.821

4.726$ *

(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

$ 221,178,000
1,547,008,000
206,873,000
428,967,000
157,404,000
168,960,000
524,303,000
123,188,000
125,970,000
118,471,000
142,005,000
304,424,000

$4,068,751,000

$2,000,137,000

TOTAL

114,678,000
719,239,000
108,699,000
186,607,000
79,206,000
92,852,000
305,297,000

5i,56i,ooo
66,757,000
53,592,000
115,705,000
105,944,000

Xf Average rate on a coupon issue equivalent yield basis is 4.91$ for these bills.
Interest rates on bills are quoted on the basis of bank discount, with thoir
length in actual number of days related to a 360-day year. In contrast, yields
on certificates, notes, and bonds are computed on the basis of interest on the
investment, with the number of days remaining in a semiannual interest payment
period related to the actual number of days in the period, and with semiannual
compounding if more than one coupon period is involved.

Treasury bills are originally sold by the United States is considered to be in-

terest. 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 considere

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 in

clude in his income tax return only the difference between the price paid for su

bills, whether on original issue or on subsequent purchase, and the amount actua
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 hills and govern the conditions of their issue. Copies of
the circular may he obtained from any Federal Reserve Bank or Branch.

- 2-

5
AT, ~PTTfl

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 anyImmediately after the closing hour, tenders will be opened at the Federal Re-

serve Banks and Branches, following which public announcement will be made by the

Treasury Department of the amount and price range of accepted bids. Those submit-

ting tenders will be advised of the acceptance or rejection thereof. The Secretar
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 witho

stated price from any one bidder will be accepted in full at the average price (i
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
January 15, 1960 , in cash or other immediately available funds or in a like
face amount of Treasury bills maturing January 15, 1960 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 subjec

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 interes
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
,

^agreements with respect to the purchase or sale or other disposition of any bills of
this issue, until aiter one-thirty o'clock p.m., Eastern Standard time, Tuesday,
January 12, 1960.

mmmixi
TREASURY DEPARTMENT
Washington

_- _

--^

RELEASE A. M. NEWSPAPERS, /^
Wednesday, January 6, I960
.
The Treasury Department, by this public notice, invites tenders for
$ 1,500,000,000 , or thereabouts, of 566 -day Treasury bills, for cash and in
exchange for Treasury bills maturing January 15, 1960 , in the amount of
$2,006,171,000

, to be issued on a discount basis under competitive and noncom-

petitive bidding as hereinafter provided. The bills of this series will be dated
January 15, 1960 , and will mature January 15, 1961 , 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 $1,000,00
(maturity value).
Tenders will be received at Federal Reserve Banks and Branches up to the clos-

ing hour, one-thirty o'clock p.m., Eastern Standard time, Tuesday, January 12, 19
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 th

price offered must be expressed on the basis of 100, with not more than three dec
(Notwithstanding the fact that these bills will run for 366,
iraals, 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 supplie
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 investme

securities. Tenders from others must be accompanied by payment of 2 percent of th

<Jdays, the discount rate will be computed on a bank discount basis of 360 days,
as is currently the practice on all issues of Treasury bills 0

TREASURY DEPARTMENT
WASHINGTON, D.C
RELEASE A.M. NEWSPAPERS,
Wednesday, January 6, i960.

A-723

The Treasury Department, by this public notice, invites tenders for
$1,500,000,000, or thereabouts, of 366-day Treasury bills, for cash and
in exchange for Treasury bills maturing January 15, i960, in the amount
of $2,006,171,000, to be issued on a discount basis under competitive.
and noncompetitive bidding as hereinafter provided. The bills of this
series will be dated January 15, i960, and will mature January 15, 196l,
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,
Tuesday, January 12, i960. 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. (Notwithstanding the fact that these
bills will run for 366 days, the discount rate will be computed on a
bank discount basis of 360 days, as is currently the practice on all
issues of Treasury bills.) 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.
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, Tuesday, January 12, i960.
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 from
his action
inbidder
any such
respect
shall
be
Subject
to
these
stated
reservations,
price
any
noncompetitive
one
will
tenders
be accepted
for
$400,000
In final.
full
orat
less
thewithout
average

- 2 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 January 15, i960, in cash or other
immediately available funds or in a like face amount of Treasury bills
maturing January 15, i960. 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 0
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 the conditions of
their issue. Copies of the circular may be obtained from any Federal
0O0
Reserve Bank or Branch.

Sa3SDgCgHK_a__D

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 subjec

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 interes
thereof by any State, or any of the possessions of the Uhited 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 inter

Under Sections 454 (b) and 1221 (5) of the Internal Revenue Code of 1954 the amou
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
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, whet

on original issue or on subsequent purchase, and the amount actually received eit
upon sale or redemption at maturity during the taxable year for which the return
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.

- 2BOTQS0_KSXS_<K1CX

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 Breaches on application therefor.
Others than banking institutions will not be permitted to submit tenders ex-

cept for their own account. Tenders will be received without deposit from incorpo-

rated banks and trust companies and from responsible and recognized dealers in inv

ment securities. Tenders from others must be accompanied by payment of 2 percent o
the face amount of Treasury bills applied for, unless the tenders are accompanied
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 submit-

ting 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 tender

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 additiona

£_K^x
bills dated

October 15, 1959
, ( 91 days remaining until maturity date on
_P&_&C
&_£&c
April 14, 1960
) and noncompetitive tenders for $ 100,000 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 resp
tive issues. Settlement for accepted tenders in accordance with the bids must be
made or completed at the Federal Reserve Bank on January 14, 1960 , in cash or

other immediately available funds or in a like face amount of Treasury bills matur
ing January 14, 1960 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

iu
TREASURY DEPARK-IEuT
Washington

-"7"2--

(
'

RELEASE A. M. NEWSPAPERS,
Thursday, January
7, 1960
mary 7,
The Treasury Department, by this public notice, invites tenders for two series

of Treasury bills to the aggregate amount of $1,600,000,000 , Qr thereabo
cash and in exchange for Treasury bills maturing

January 14, 1960 > in the amount

w
of $ 1,601,924,000 , as follows:

S3
91 -day bills (to maturity date) to be issued January 14- 19fi0 t

"W*

in the amount of $ 1,200,000,000 , or thereabouts, representand to amount
mature of
April
14, 1960
, originally
ing an additional
bills
dated October
15, issued
1959 ,in the

m
amount
of $ 400,516,000
, the additional and original bills
to
be freely
interchangeable.
182 -day bills, for $ 400,000.000 , or thereabouts, to be dated
January 14, 1960 , and to mature July 14, 1960 •

£S

The bills of both series will be issued on a discount basis under competit

and noncompetitive bidding as hereinafter provided, and at maturity their

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

denominations of $1,000, $5,000, $10,000, $100,000, $500,000 and $1,000,00
value).
Tenders will be received at Federal Reserve Banks and Branches up to the

hour, one-thirty o'clock p.m., Eastern Standard time, Monday, January 11,

5_lj~

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 te

price offered must be expressed on the basis of 100, with not more than th

RELEASE A. M. NEWSPAPERS,
Thursday, January 7, i960.

A-724

The Treasury Department, by this public notice, invites tenders
for two series of Treasury bills to the aggregate amount of
$L,600,000,000, or thereabouts, for cash and in exchange for
Treasury bills maturing January 14, i960, in the amount of
$1,601,924,000, as follows:
91-day bills (to maturity date) to be issued January 14, i960,
In the amount of $1,200,000,000, or thereabouts, representing an
additional amount of bills dated October 15,1959, and to
mature April 14, i960, originally issued in the amount of
$400,316,000, the additional and original bills to be freely
interchangeable.
182-day bills, for $400,000,000, or thereabouts, to be dated
January 14,1960, and to mature July 14, i960.
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 11, i960 . 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.

- 2 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 Departmment 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 additional bills dated
October 15,1959, (91 days remaining until maturity date on
April 14, i960)
and noncompetitive tenders for $100,000
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 14, i960,
In cash or other immediately available funds or in a like face
amount of Treasury bills maturing January 14, i960. Cash and
exchange tenders will receive equal treatment. Cash adjustments
w?ll 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
0O0
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.

TREASURY DEPARTMENT
OFFICE OF ASSISTANT TO THE SECRETARY
FOR LAW ENFORCEMENT
WASHINGTON 25, D. C.

December 24, 1959

My dear Mr. Sacratary:
For personal reasons of which you are aware,
I horoby regretfully taadar my resignation
•ffactive January 10, 1999.
The two and a half yaara of aarvica la tha
Traaaury under your laadarahip have baan a
wonderful exparienca which I aha11 never forgot.
It la difficult to laawa the Federal Service after
alsjoat els yaara la thla adalnlatratlon and aot
foal aoaa prlda in having taJcan part la aoaa of
ita amny accoapllahaante. I laawa aora convincad
than awar that the aggragate Traaaury enforcement
agenclee conatltuta tha flnaat anforcawjaat organlaatlon extant. Tha dedication to duty of aganta
of our warloua aarvlcaa in puraulag their difficult,
dangerous and largely uarawardad taaka, haa baan
aa laaplratloa to aa. Thla dedication haa producad
raaarkabla raaulta aad augura wall for tha continuing
problea of coping with international organiaad crlaa
which ao vitally affacta tha welfare of our country.
You uay be aura that I will alwaya ba awallabia
for auch aaalatanca aa la nacaaaary and approprlata.
Slncaraly,
Hylaa J. Aabr&aa
Aaalatant to tha Sacratary
for Law Inforcaaant
Honorable Robert B. Andaraon
Sacratary of tha Traaaury

December 30, 1959

Dear Myles:
I am sure you realize with what sincere regret we see you
leave the Treasury Department. You have performed an
exceedingly valuable service under difficult circumstances
and have rendered a real contribution to the Treasury
enforcement agencies and to your country. I share your
conviction that these agencies are the finest enforcement
organization in our country. My admiration and respect
for all of those engaged in this difficult task increase
daily.
I hope that you will be happy in your new work; but that
you will always consider yourself a part of our Treasury
family and will return to visit with us whenever possible.
With warmest regards and best wishes, I am
Sincerely yours,

/ s / Robert B. Anderson
Secretary of the Treasury

Mr. Myles J. Ambrose
Assistant to the Secretary
for Law Enforcement
U. S. Treasury Department
Washington 25, D. C.

14
BpEASE A^HEWSPAEERS
^arsd&Tr Jaaaarv 7. IQfo

A-725

Treasury Secretary Anderson today announced "with sincere
regret" the resignation of Myles J. Ambrose, Assistant to the
Secretary for Law Enforcement, to be effective January 10.
Mr. Ambrose has been named Executive Director of the
Waterfront Commission of New York Harbor.
Secretary Anderson, in announcing Mr. Ambrose's decision
to leave the Treasury, said "You...have rendered a real contribution to the Treasury enforcement agencies and to your country."
As Assistant to the Secretary, Mr. Ambrose's primary responsibility was to recommend basic program and policies for the
Treasury Department's national and international law enforcement
responsibilities and to coordinate the program and policies.
Mr. Ambrose recently headed an international conference
of delegates of the United States and Mexico to explore means
of intensifying the campaign against narcotics by the two countrie!
Mr. Ambrose, a native of New York City, is a graduate of
New York Law School.

Prior to coming to the Treasury in August,

1957., he held administrative and management positions in private
industry, and served on the staff of the U. S. Attorney for
the Southern District of New York.
Attached are copies of the exchange of letters between
Secretary Anderson and Mr. Ambrose.

TREASURY DEPARTMENT
WASHINGTON, D.C
RELEASE A.M. NEWSPAPERS
Thursday. January 7. l%0

A-725

Treasury Secretary Anderson today announced "with sincere
regret" the resignation of Myles J. Ambrose, Assistant to the
Secretary for Law Enforcement, to be effective January 10.
Mr. Ambrose has been named Executive Director of the
Waterfront Commission of New York Harbor.
Secretary Anderson, in announcing Mr. Ambrose's decision
to leave the Treasury, said "You...have rendered a real contribution to the Treasury enforcement agencies and to your country."
As Assistant to the Secretary, Mr. Ambrose's primary responsibility was to recommend basic program and policies for the
Treasury Department's national and international law enforcement
responsibilities and to coordinate the program and policies.
Mr. Ambrose recently headed an international conference
of delegates of the United States and Mexico to explore means
of intensifying the campaign against narcotics by the,two countries.
Mr. Ambrose, a native of New York City, is a graduate of
New York Law School.

Prior to coming to the Treasury in August,

1957* h e held administrative and management positions in private
industry, and served on the staff of the U. S. Attorney for
the Southern District of New York.
Attached are copies of the exchange of letters between
Secretary Anderson and Mr. Ambrose.

16
December 30, 1959

/ s / Robert B. Anderson
Secretary of the Treasury

Mr. Myles J. Ambrose
Assistant to the Secretary
for Lav; Enforcement
U. S. Treasury Department
Washington 25, D. C.

17
December 24, 1959

My dear Mr. Secretary:
For personal reasons of which you are aware,
I hereby regretfully tender my resignation
effective January 10, 1959.
The two and a half years of service in the
Treasury under your leadership have been a
wonderful experience which I shall never forget.
It is difficult to leave the Federal Service after
almost six years in this administration and not
feel some pride in having taken part in some of
its many accomplishments. I leave more convinced
than ever that the aggregate Treasury enforcement
agencies constitute the finest enforcement organization extant. The dedication to duty of agents
of our various services in pursuing their difficult,
dangerous and largely unrewarded tasks, has been
an inspiration to me. This dedication has produced
remarkable results and augurs well for the continuing
problem of coping with international organized crime
which so vitally affects the welfare of our country.
You may be sure that I will always be available
for such assistance as is necessary and appropriate.
Sincerely,
/S/ Myles J. Ambrose
Myles J. Ambrose
Assistant to the Secretary
for Law Enforcement
Honorable Robert B. Anderson
Secretary of the Treasury

REIMSS A. _f, WiiBPAmm,

Tuesday, JSnaary 12, I960.

The Treasury Department announced lest evening that the tenders for two series oi
Treasury bills, one series to be an additional issue of the bills dated October 1$,
1959, and the ether series to be dated January lit, I960, which were offered on January 7, were opened at the Federal Reserve Banks on Jaaaary XX. Tenders were invited
for $1,200,000,000, or thereabouts, of 91-day bills and far $1*00,000,000, or there*
abouts, of 182-day bills. The details of the tiro series are aa followsj
BatBE OF ACCEPT©
GOtfFETITIfi BXES*

91-day Treasury bills
Maturing April li^, i960
hppTOM. !<g$iv.
Prise
Annual gate

182-day Treasury bills
Maturing July lit, I960
Af^MPOJt. EquIrT
Price
Annual Bete
mmmmmmmmmmammmmmmmmmmm

98.850
mf
k.$k9%
98.835
98.81*0

High
Low

k.$G9%

k&MXf

97M17
97.47S

4.977*
k999l&

k.nny

mf Excepting one tender of |U,000
__ percent
,
__ 91-day
o%
ef the amount of
91-ds_ bills bid tor at the low priee was aeeepted
77 percent of the amount of 182-day bills bid for at the lev price was accepted
TOTAL TENUIS APPLIED fOl Am AOOlPTiD BI FSDESaL HSIirtB DISTRICTSs
District

Applied For
mmibi^mMmmmmmwmmmmmmmmmmmmmm-

Boston
Mew lork
Philadelphia
Cleveland
Richmond
Atlanta
Chicago
St. Louis
Minneapolis
Kansas City
Dallas
San Francisco
TOTALS

• 37 ,01*6,00©
1,1*79 293,000
29 ,216,000
kS ,601,000
22 ,959,000
33 ,219,000
226 A6i,000
31 ,903,000
16 ,039,000
39 ,6ia,ooo
25 ,213,000
92 ,889,000
#2,079,1*80,000

Accepted

Applied For

Accepted

I 7,172,000
773,»92,000
10,196 ,000
,u98,000
,506 000
7^06 ,000
Bk 162,000
8 3»9,000
3 735,000
865 ,000
5 963,000
62 539,000

I 3,458
297,957
2 ^S
19
2 9S8
5 70k
29 293
7 849
3 272
10 675
5 963
12,269

aMaMMMMUMM

27,0^6,000
729i
121, 000
000
9
000
20,953 000
26
000
152,1*31* 000
26, 9393 000
13, 181 000
35 963, 000
2ii1,202,000

kk nx

3l,2Q0,l$li,00Cb/: $1,007,935,000

000
000
000
000
000
000
000
000
000
000
000

&0l,22li,000c/

b/ Includes #286,325,000 noncompetitive tenders aeeepted at the average priee of
mf Includes 189,111,000 noneea_>etitive tenders accepted at the average price of 97JaTl
1/ Average rate on a coupon issue equivalent yield basis Is i*.72$ for the 91-day billl
and 5«20£ for the 182-day bills. Interest rates on bills are quoted on the basil
of bank discount, with their length in actual auaber of daye related to a 360-417
year. In contrast, yields on certificates, notes, and bonds are computed on tat
basis of interest on the investment, with the number of daye reaaining In a seel"
annual interest payment period related to the actual lumber of days In the peri*1
and with semiannual compounding if more than one coupon period is involved.

TREASURY DEPARTMENT
1IUMI1U., .LII.I j^w

w w w Ljuu'^r^wu'«v«mwMi-. • !.',:,•;,••.' JIJ.„I'__B

-n-ww-mi

W A S H I N G T O N . D.C
RELEASE A, M» NEWSPAPERS, Tuesday, January 12, I960.

A-726

The Treasury Department announced last evening that the tenders for te?o series of
Treasury bills, one series to be an additional issue of the bills dated October 15,
1959, ©ssd the other series to be dated January ll*, I960, which were offered on January 7, were opened at the Federal Reserve Banlss on Jaimary 11. Tenders were invited
for $1,200,000,000, or thereabouts, of 91«day bills and for £1*00,000,000, or thereabouts, of 182-day bills• The details of the teo series are as follows:
RAK&E OF ACCEPTED
COMPETITIVE BIDS:

l82~day Treasury bills
icaturlBg July Xk9 I960
Appros. Equiv.
Price
Anrdizl E_to

bills
aataring April 3i*, I960

Annual Bate
High
Low
Average

98.850 a/
98.835
98.81*0

97.i*81*
97.1*77
97.1*78

k.5k%
k.609%
k.590% If

1*.977#
kP991%
k.985% If

a/ Excepting one tender of £1*,000
c6 percent of the amount of 91-day bills bid for at the low price was accepted
77 percent of the amount of 182-day bills bid for at the low price was accepted
TOTAL TEKDEES APPLIED FOR AND ACCEPTED BY FEDERAL RESERVE DISTRICTS:
District

Applied For

Accepted

i Applied For

Accepted

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

$
37,01*6,000
1,1*79,2-93,000
29,216,000
1*5,601,000
22,959,000
33,219,000
226,1*61,000
31,903,000
16,039,000
39,61*1*000
25,213,000
92*889,000

27,01*6,000
729,81*3,000
li*,121,000
l*J*,983,OCO
20,959,000
26,21*5,000
l52,l*3ll,000
26,238,000
13,939,000
35,181,000
2i*,963,000
81**202,000

j1 $ 7,172,000
::
773,1*92,000
:
10,198,000
28,1*98,000
•:
;i
3,506,000
j1
7,1*06,000
jt
81*,162,000
1
8,3U9,00O
:i
3,735,000
J
12,865,000
j1
5,963,000
s1
62,589,000

$2,079,1*80,000

H,20O,l51*,O0Ob/j] $1,007,935,000

* 3,1*58,000
297,957,000
2,398,000
19,398,000
2,938,000
5,70l*,CCO
29^293^000
7,81*9*000
3,272,000
10,675,000
5,963,000
12,269,000
&i*01,22l*,000e/

b/ Includes $286,325,000 noncompetitive tenders accepted at the average price of 98.81*0
of Includes $89,111,000 noncompetitive tenders accepted at tha average price of 97.1*78
if Average rate on a coupon issue equivalent yield basis is 1*.72$ for the 91-day bills
and 5.2C# for the 182-day bills. Interest rates on bills are quoted on the basis
of bank discount, with their length in actual number of days related to a 360-day
year. In contrast, yields on certificates, notes, and bonds are confuted on the
basis of interest on the investment, with the number of days remaining in a semiannual interest payment period related to the actual number of days in the period,
and with semiannual compounding if more than one coupon period is involved.

yi 1

RELEASE A. M. NEWSPAPERS, Wednesday, January 13. I960.
The Treasury Department announced last evening that the tenders for tl,500,000,QQ|
or thereabouts, of 366-day Treasury bills to be dated January 15, I960, and to mature
January 15, 19ol, which were offered on January 6, were opened at the Federal Reserve
Banks on January 12.
The details of this issue are as follows;
Total applied for - 12,301,076,000
Total accepted
* 1,500,076,000

(includes $31*7,716,000 entered on a
noncompetitive basis and accepted in
full at the average price shown below)

Range of accepted competitive bids: (Excepting k tenders totaling $380,000}
High - 91*.927 Equivalent rate of discount approx. 1*.990$ per annus
Low
- 9l*.76i*
»
e
•
•
*
5.150$
Average - 9i*.81*9 " * » » « 5.067$

•

(71 percent of the amount bid for at the low priee was accepted)
Federal Reserve Total Total
District
»,

Applied for

Accepted

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

f
63,139,000
1,628,91*9,000
1*7,002,000
81,371,000
12,562,000
«3,98i*,000
231t,962,O0O
22,806,000
6,131,000
1*2,21*2,000
10,335,000
107,593.000

1
30,723,OO0/
1,011,162,000
2li,932,000
68,821,000
10,559,000
22,1*88,000
172,321,000
17,7l*l*,00O
i*,331,Q00
29,336,000
10,306,000
97.353.000

TOTAL 12,301,076,000 $1,500,076,000

1/ Average rate on a coupon issue equivalent yield basis is 5•36$ for these bills.
~
Interest rates on bills are quoted on the basis of bank discount, with their
length in actual number of days related to a 360-day year. In contrast, yields
on certificates, notes, and bonds are computed on the basis of interest on the
investment, with the number of days remaining in a semiannual interest payment
^
period related to the actual number of days in the period, and with semiannual
compounding if more than one coupon period Is involved.

TREASURY DEPARTMENT
WASHINGTON, D.C

RELEASE A. M. NEWSPAPERS, Wednesday, January 13, I960.

A-727

The Treasury Department announced last evening that the tenders for $1,500,000,000,
>r thereabouts, of 366-day Treasury bills to be dated January 15, I960, and to mature
January 15, l°6l, which were offered on January 6, were opened at the Federal Reserve
Banks on January 12.
The details of this issue are as follows:
Total applied for - $2,301,076,000
Total accepted
- 1,500,076,000

Range of accepted competitive bids:

(includes $31*7,716,000 entered on a
noncompetitive basis and accepted in
full at the average price shown below)
(Excepting 1* tenders totaling $380,000)

High
Low

- 9k.927 Equivalent rate of discount approx. i*.990$ per annum
tt
- 9l*.761*
»
n
n
n
5#l5o$ »
»

Average

- 9l**81*9

5.067$

(71 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

$
63,139,000
1,628,91*9,000
1*7,002,000
81,371,000
12,562,000
i*3,981*,000
23l*,962,000
22,806,000
6,131,000
1*2,21*2,000
10,335,000
107,593,000

$
30,723,000
1,011,162,000
2i*,932,000
68,821,000
10,559,000
22,1*88,000
172,321,000
17,7i*i*,000
1*, 331,000
29,336,000
10,306,000
97,353*000

$2,301,076,000

$1,500,076,000

TOTAL

/ Average rate on a coupon issue equivalent yield basis is 5.36$ for these bills.
Interest rates on bills are quoted on the basis of bank discount, with their
length in actual number of days related to a 360-day year. In contrast, yields
on certificates, notes, and bonds are computed on the basis of interest on the
investment, with the number of days remaining in a semiannual interest payment
period related to the actual number of days in the period, and with semiannual
compounding if more than one coupon period is involved.

STATUTORY DEBT LIMITATION

AS O F _ _ _ _ _ _ _ _ _ _ _ _ ? »

_ t.
Washington,

Jan.

12,1960
. — • •-

(Act of June 30, 1959; U.S.C., title 31. sec. 757b), outstanding at any one time. For purposes o^this ^ ^ j J V t h T h o L W
demption value of any obligation issued on a discount basis which is redeemable prior to maturity at * e opaon of the holder
shall be considered is its face amount." The Act of June 30, 1959 (P.L. 36-74 »6th Congress) provides A a t t a n ^ t h e .per led
beginning on July 1, 1959 and ending June 30, I960, the above limitation ($285,000,000,000) shall be temporarily increased by

$10,000,000,000.
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
$^OtUUU,UUU,UUU
Outstanding Obligations issued under Second Liberty Bond Act, as amended
Interest-bearing:
Treasury bills ....... $39,643,427,000
Certificates of indebtedness.
—
19,669,293,000
Treasury notes
_.._
44.152,117.000

$103,^64,837,000

BondsTreasury
_..__
* Savings (current r e d e m p . v a l u e )
Depositary.-..
„
Investment series .

«_
._

1 8 4 ,4-94 , 5 0 0
7.590.078.000

Special FundsCertificates of indebtedness
Treasury notes
Treasury bonds
Total interest-bearing

84,75^,198,350
48,153,7^9,530

8 , 270 ,8?! , 000
.„......„„.
~

Matured, interest-ceased —
Bearing no interest:
United States Savings Stamps...

15,178,474,000
2 0 , 0 5 7 , H O ,000

„-..„..„

51,^16,012
820,683

.«.

4 3 . 506.455.000
287 , 653, 8 1 2 1 3 8 0

...

E x c e s s profits tax refund b o n d s ...
Special notes of the United States:
Internafl Monetary F u n d series
-.
Total

140,682,520,380

2,065,250,000
—

-..

OlH', (yy ^Jjl

2.117.486.695

-».

290,386,098,626

Guaranteed obligations (not held by Treasury):
Interest-bearing:
Debentures: F.H.A
126,551,800
Matured, interest-ceased
59^,200
Grand total outstanding
„
„.
Balance face amount of obligations issuable under above authority

127.146.000
2 9 0 . 5 1 ^ T 244.626
*+,*rOO, (Jj%jn!

„

•i • _ _ < .k D ki: r^.k. December 31, 1959
R e c o n c i l e m e n t with Statement of the Public D e b t

.„...I..~..:....r.
(Date)

(Daily Statement of the United States Treasury

J^.9&^r^lXmJ^5yL

(Date)

OutstandingTotal gross public debt.
...„.
_„
„
Guaranteed obligations not owned by the Treasury.
.
Total gross public debt and guaranteed obligations
„.
D e d u c t - other outstanding public debt obligations not subject to debt limitation

A-728

„
„.

„

290,797,771,717
1 2 7 ,146.00Q
290,924,917,711
411.673.091
290,513,244,626

23
STATUTOltY DEBT LIMITATION

AsoF__l^fflER_31__1959

tM—toTl2^96T

Washington,.
_____ '
Section 21 of Second JJherty Bond Act, as amended, provides that the face amount of obligations issued under authority
of that Act, and the face am <ut 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 June 30, 1959; 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 optionof the holder
shall be considered as its face amount." The Act of June 30, 1959 (P.L. 86-74 86ch Congress) provides that during the period
beginning on July 1, 1959 and ending June 30, I960, the above limitation ($285,000,000,000) shall be temporarily increased by
$10,000,000,000.
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
4> 2 9 5 , 0 0 0 , 0 0 0 , 0 0 0
OutstandingObligations issued under Second Liberty Bond Act, as amended
Interest-bearing:
Treasury bills $39,643,427,000
Certificates of indebtedness

19,669,293 , 000

Treasury notes
Bonds-

44.152.117.000

Treasury
* Savings (current redemp. value)
Depositary.
Investment series
Special FundsCertificates of indebtedness
Treasury notes
Treasury bonds
Total interest-bearing

84,754,198,350
48,153,749,530
184,494,500
7.590.078.000

1 5 ,1?8,474,000
20 , 0 5 7 , H O ,000

4 3 . 506.455.000
287,653,812,380
6l4, 799,551

51»4l6,012

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

1 4 0 , 6 8 2 , 5 2 0 ,380

8,270,871,000

Matured, interest-ceased
Bearing no interest:
United States Savings Stamps...

$103,464,837,000

820,683
2,065,250,000
-

2.117.486.695
290,386,098,626

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

126,551,800

Matured, interest-ceased
59^, 200
Grand total outstanding
Balance face amount of obligations issuable under above authority
n _•• n _, December 31 1959
Reconcilement with Statement of the Public Debt

127.146. 000
2 9 0 « 5 1 3 . 244-. 6 2 6
^'t^OO, 7531 3 / ^

•1 • _ o < _

X...J.

:......

(Date)

(Daily Statement of the United States Treasury,
,.

Q$9£!$?$r..3lA..1.9.!f.9..

)

(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

290 , 797 , 771, 717
127,1^6.000
290,924,917,717
411,673,091
290,513,244,626

A-728

TREASURY DEPARTMENT
Washington
FOR RELEASE A. M. NEWSPAPERS
Friday, January 15, i960

24
A-729

The Treasury Department today made public procedures
governing the exchange of Series E and J savings bonds, and
Series F savings bonds with issue dates of January 1, 19^6,
and thereafter, at current redemption values on a tax deferred
basis, for Series H savings bonds.
The exchange offer is being made to permit holders of these
bonds having a current redemption value of $500 or more to receive
income on a current rather than an accumulated basis. It is
pointed out, however, that owners of Series E, F and J bonds,
unless they have a real need to convert them, should carefully
consider making the exchange immediately since they may find,
in some cases, that their interest earnings would be slightly
less than if they waited until their bonds mature to make the
exchange.
The exchange will be made at the current redemption value
of the Series E, F and J bonds at even multiples of $500. In
the event the redemption value does not equal the even multiple,
the owner has the option of furnishing cash to obtain Series H
bonds in the next higher $500 multiple or may receive payment
for the difference.
Under the exchange offering owners may defer reporting for
income tax purposes the increase in the redemption values of the
Series E, F and J bonds over the amount paid for them (to the
extent not previously included in gross income) until the taxable
year in which the Series H bonds for which they are exchanged
are finally redeemed or disposed of, or at final maturity,
whichever is earlier.
A statement by the Secretary of the Treasury "To Owners of
Series E, F and J Savings Bonds" outlining pertinent factors
involved in the exchange, and a copy of a communication being
sent to about 22,000 "Banking and Other Institutions Qualified
to Pay Series A-E Savings Bonds," requesting their assistance
in connection with this exchange offering, are attached.
Treasury Department Circular No. IO36, dated December 31*
1959* which is the official offering circular in connection with
the exchange, may be obtained at most commercial banks or from
the Federal Reserve Banks or Branches, or the Treasury Department
in Washington.

LtfW

TREASURY DEPARTMENT
WASHINGTON, D.C. N^V-r^/
FOR RELEASE A. M. NEWSPAPERS
Friday, January 15, i960

A-729

The Treasury Department today made public procedures
governing the exchange of Series E and J savings bonds, and
Series F savings bonds with issue dates of January 1, 19^8,
and thereafter, at current redemption values on a tax deferred
basis, for Series H savings bonds.
The exchange offer is being made to permit holders of these
bonds having a current redemption value of $500 or more to receive
income on a current rather than an accumulated basis. It is
pointed out, however, that owners of Series E, F and J bonds,
unless they have a real need to convert them, should carefully
consider making the exchange immediately since they may find,
in some cases, that their interest earnings would be slightly
less than if they waited until their bonds mature to make the
exchange.
The exchange will be made at the current redemption value
of the Series E, F and J bonds at even multiples of $500. In
the event the redemption value does not equal the even multiple,
the owner has the option of furnishing cash to obtain Series H
bonds in the next higher $500 multiple or may receive payment
for the difference.
Under the exchange offering owners may defer reporting for
income tax purposes the increase in the redemption values of the
Series E, F and J bonds over the amount paid for them (to the
extent not previously included in gross income) until the taxable
year in which the Series H bonds for which they are exchanged
are finally redeemed or disposed of, or at final maturity,
whichever is earlier.
A statement by the Secretary of the Treasury "To Owners of
Series E, F and J Savings Bonds" outlining pertinent factors
involved in the exchange, and a copy of a communication being
sent to about 22,000 "Banking and Other Institutions Qualified
to Pay Series A-E Savings Bonds," requesting their assistance
in connection with this exchange offering, are attached.
Treasury Department Circular No. IO36, dated December 31,
1959* which is the official offering circular in connection with
the exchange, may be obtained at most commercial banks or from
the Federal Reserve Banks or Branches, or the Treasury Department
in Washington.

26
THE SECRETARY OF THE TREASURY
WASHINGTON

January 15 9 i960
TO OWNERS OF SERIES E, F AND J SAVINGS BONDS
The Treasury Department has announced that, effective January 1, i960,
owners of Series E and Series J savings bonds, and Series F savings bonds
vith issue dates of January 1, 1948, and thereafter, may, if they wish, exchange them at current redemption values on a tax-deferred basis, for
Series H bonds. The exchanges may be made without regard to the annual
limitation of $10,000 of Series H bonds which may be purchased under current
regulations. The bonds submitted for exchange must have a current redemption
value of $500 or more to be eligible for this privilege. Circulars, application forms and instructions may be obtained at most commercial banks or
from Federal Reserve Banks or Branches or the Treasury Department in
Washington.
This exchange offering is being made to meet the wishes of numerous
holders of Series E, F and J savings bonds who have purchased such bonds
during their active working life, and who have now retired or for other
reasons desire to receive current income from their savings bonds. Interest
earned on Series E, F and J bonds accrues semiannually and is added to Increase the current redemption values of these bonds. The interest can be
collected only by redeeming the bonds. Interest is paid on Series H bonds
each six months by checks to the owners.
Unless bondowners have a real need to convert their holdings of Series
E, F and J bonds to Series H bonds for current income, they should carefully
consider the matter before making the exchange immediately since they may
find that their Interest earnings would be slightly less than before. For
example, Series E bonds Issued from May 1, 194l, to April 1, 19^2, yield
more than 3-5/4^ on their present redemption values from now to the end of
their first extended maturity period (20 years from issue date) and it may
be more advantageous to wait until their bonds mature to make the exchange.
Also, Series E bonds issued after January 1, 1950, and through May 1,.1959*
and which have not reached their first maturity date also earn more than
3-3/4$ on their present redemption values from now to maturity and there
would be some advantage in holding them until such bonds mature.
Many owners have elected to permit the interest accruals on Series E,
F and J bonds to accumulate without including them as income for Federal
income tax purpo.es. This is permissible under the income tax regulations,
and the accumulated increment is thus subject to income taxes when the bonds
reach final maturity, or are redeemed prior to maturity.
Prior to January 1, i960, the only way amounts invested in Series E, F
or J bonds could be transferred to a Series H bond to obtain current income
was by redeeming such bonds and reinvesting the proceeds by purchasing new
Series H bonds. Upon redemption of the Series E, F or J bonds the entire
unreported interest became subject to Federal income taxes for the year in
which the transaction occurred. This deterred many owners, who had not previously reported their interest for Federal income tax purposes, from making
the transfer.

- 2 Under the current exchange privilege, however, owners can now make
such a transfer without incurring liability for the payment of income taxes
at the time of transfer. The unreported accumulated interest on Series E,
F or J bonds is deferred for Federal income tax purposes until the Series H
bonds acquired in the exchange mature, or are redeemed or otherwise disposed
of prior to maturity. This will permit owners to reinvest in Series H bonds
the entire amount of increment accrued on the Series E, F and J bonds exchanged, including the amount that would, under present regulations, be
paid as income taxes. However, any amount paid to the owner as a cash adjustment must be treated as income for Federal income tax purposes for the
year in which it is received up to an amount not In excess of the total
interest on the bonds exchanged, unless such interest has been previously
reported in his Federal income tax return.
There will be a legend placed on each Series H bond issued in the exchange which will show the amount of its issue price representing previously
accumulated increment on Series E, F or J bonds. This amount will be required
to be reported for Federal income tax purposes when the Series H bonds
mature, or are redeemed or disposed of prior to maturity. This income will
be subject to whatever income taxes, and at such tax rates, as the bondowner may be subject to at such time.
Series H bonds are issued in denominations of $500, $1,000, $5,000
and $10,000. They mature ten years from date of issue. Interest is paid
at a rate equal to 3-3/^J per year if the bonds are held until maturity.
Interest is paid by check in favor of the owner. For each $500 face amount
of Series H bonds, interest is paid amounting to $11.25 for the first year,
$18.00 for the second year, and $20.00 for each year thereafter until maturity. This is equivalent to a rate of return of 2-1/2$ for the first
year and a half and kfi for the remaining period to maturity.
Series H bonds may not be redeemed at commercial banks in the same
way as Series E bonds. A Series H bond will be redeemed at par, in whole
or in part (in the amount of an authorized denomination or multiple thereof), at the option of the owner, at any time after six months from the
issue date, but only on the first day of a calendar month and upon one full
calendar month's notice in writing of desire to redeem by the owner. The
request for payment of the bond must be executed and certified in accordance
with the provisions of the applicable regulations. The presentation of the
bond (with the request for payment duly executed) will be accepted as notice.
Payment will be made when due following presentation of the bond to (1) a
Federal Reserve Bank or Branch, (2) the Bureau of the Public Debt, Division
of Loans and Currency Branch, 536 South Clark Street, Chicago 5, Illinois,
or (3) the Treasurer of the United States, Washington 25, D. C. Formal
notice to be effective must be timely received by one of the above agencies
and the bond must be presented to the same agency not less than twenty days
before the redemption date fixed by the notice.

Secretary of the Treasury

27
T H E S E C R E T A R Y OF T H E T R E A S U R Y
WASHINGTON

January 15, i960
TO BANKING AND OTHER INSTITUTIONS QUALIFIED TO PAY SERIES A-E SAVINGS BONDS
The Treasury Department has announced that, effective January 1, i960,
the holders of Series E and J savings bonds and certain Series F bonds would
be able to exchange them at current redemption values on a tax-deferred basis,
for Series H savings bonds. The bonds which may be exchanged include all
Series E and J bonds and all bonds of Series F with issue dates of January 1,
19^-8, and thereafter, provided those F bonds are presented for exchange no
later than six months after the month in which they mature. The exchanges
may be made without regard to the annual limitation of $10,000 of Series H
bonds which may be purchased under current regulations.
Under this exchange, owners who elect to do so will have the privilege
of treating the increase in redemption value (to the extent not previously
included in gross income) in excess of the amount paid for the E, F and J
bonds, includable in gross income in the taxable year in which the H bonds
are redeemed or disposed of or in the taxable year of final maturity, whichever is earlier.
Department regulations relating to the exchange offering, the subscription form and related information are being furnished to you by the
Federal Reserve Bank of your district.
The Treasury Department is making this exchange offering available in
response to a considerable number of inquiries from the public, particularly
the holders of E bonds, and in accordance with authority contained in Public
Law 86-3^6, approved September 22, 1959* Many of the holders have reached
the point where they must give serious consideration to redeeming their
savings bonds, in order to supplement their current income, but they are reluctant to take that action because to do so would involve the payment of
Federal income tax. on a substantial amount of accumulated income. The
special notice to bondowners, which accompanies the application form, calls
attention to matters that they should consider carefully before making an
exchange.
Treasury regulations governing the payment of savings bonds by banks
and other financial institutions have been amended to permit qualified
paying agents to accept subscriptions from bondholders wishing to participate in this exchange offering. Under procedures being worked out between
the Treasury and the Federal Reserve Banks, paying agents willing to render
such assistance will (l) receive such subscriptions from individual bondholders; (2) see that the prescribed subscription form only is used and
properly completed; (3) make payment of the E, F or J bonds, stamp them
"paid" and send the bonds of each series to the Federal Reserve Bank under
separate transmittal letters in the same manner as paid Series A-E savings
bonds; (*+) settle with the bondholder for any odd amounts of cash involved
in the transaction; and (5) send to the Federal Reserve Bank the subscription
form and a remittance for the amount of the Series H bonds subscribed for.

- 2 -

Only the Federal Reserve Banks and the Treasurer of the United States will
issue the Series H bonds.
Any paying agent having a Treasury Tax and Loan Account will be permitted to credit that account with the face amount of all Series H bonds
to be issued on subscriptions accepted and processed by the agent.
Agents will be reimbursed for their services in paying the Series E,
F and J bonds tendered in exchange at the same rates per bond for which
payment is now made to them for paying Series A-E savings bonds. The
amount payable to an agent will be determined by aggregating the number
of A-E bonds paid as regular redemptions and the number of E, F and J
bonds paid as exchange redemptions during each quarterly period. One check
covering the fee due for the full range of services will be sent to the
agent in the usual manner.
It will not be necessary to have any special agreements signed by the
paying agents in order for them to process the exchange subscriptions and
to be reimbursed for paying the Series E, F and J bonds exchanged. The
fact that they send to the Federal Reserve Banks transmittal letters with
E, F and J bonds paid in connection with the exchange will be notice that
such agents have accepted the Treasury's offer to them to pay such bonds
on a reimbursable basis.
The Treasury Department will greatly appreciate the assistance of
all qualified paying agents in connection with this exchange offering.

Secretary of the Treasury

28
- 3 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 subje

to estate, inheritance, gift or other excise taxes, whether Federal or State, bu

are exempt from all taxation now or hereafter imposed on the principal or intere
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 inte

Under Sections 454 (b) and 1221 (5) of the Internal Revenue Code of 1954 the amo

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
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, whe

on original issue or on subsequent purchase, and the amount actually received ei

upon sale or redemption at maturity during the taxable year for which the return
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.

2 -

decimals, e. g., 99.925. Fractions may not be used.

It is urged that tenders be

cept for their own account. Tenders will be received without deposit from incorpo

rated banks and trust companies and from responsible and recognized dealers in i
ment securities. Tenders from others must be accompanied by payment of 2 percent

the face amount of Treasury bills applied for, unless the tenders are accompanied
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 the

Treasury Department of the amount and price range of accepted bids. Those submit-

ting tenders will be advised of the acceptance or rejection thereof. The Secretar

of the Treasury expressly reserves the right to accept or reject any or all tende

in whole or in part, and his action in any such respect shall be final. Subject t

these reservations, noncompetitive tenders for $ 200,000 or less for the addition
bills dated

October 22, 1959

px?

, ( 91

days remaining until maturity date on

£__*£

April 21, 1960
) and noncompetitive tenders for $ 100,000 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 re

tive issues. Settlement for accepted tenders in accordance with the bids must be
made or completed at the Federal Reserve Bank on January 21, 1960 , in cash or

other immediately available funds or in a like face amount of Treasury bills mat
ing January 21, 1960 • Cash and exchange tenders will receive equal treatment.

Sir
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 los

TREASURY DEPARK-iEiiT
Washington
RELEASE A. M. NEWSPAPERS,
Thursday, January 14, I960

fr-7jo

•

The Treasury Department, by this public notice, invites tenders for two series
of Treasury bills to the aggregate amount of $ 1,400.000.000 >

thereabouts, fo

cash and in exchange for Treasury bills maturing January 21. I960 > in the amoun

x35T

of $ 1,400,400,000 , as follows:

"""

91 -day bills (to maturity date) to be issued January 21, 1960 ,
in the amount of $1,000,000,000 , or thereabouts, representing an additional amount of bills dated October 22, 1959

and to mature April 21, 1960 , originally issued in the
amount of $400,125,000 , the additional and original bills

2pb_$E
to be freely interchangeable.
182 -day bills, for $400,000,000 , or thereabouts, to be dated
January 21, 1960 , and to mature July 21, 1960 .

_fc___$T

:£&&&

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

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

denominations of $1,000, $5,000, $10,000, $100,000, $500,000 and $1,000,000 (mat
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 18, 1960

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 t
price offered must be expressed on the basis of 100, with not more than three

TREASURY DEPARTMENT
IJI.I 11 mil.....1.1 .JUI..j.ji.juw.wii ii:..y.».i _ M M A m i w . j f i M q a j j m a

WASHINGTON. D . C
RELEASE A. M. NEWSPAPERS,
Thursday, January 14, i960.

X^t_J^

A-730

The Treasury Department, by this public notice, invites tenders
for two series of Treasury bills to the aggregate amount of
$1,400,000,000, or thereabouts, for cash and in exchange for
Treasury bills maturing January 21, i960, in the amount of
$1,400,400,000, as follows;
91-day bills (to maturity date) tp \>& issued January 21, i960,
in the amount of $ 1,000,OQQ,OQO, or thereabouts, representing an
additional amount of bills dated October 22, 1959. and to
mature April 21, i960,
originally issued in the amount of
$400,123,000,
the additional and original bills to be freely
interchangeable.
182 -day bills, for $400,000,000, or thereabouts, to be dated
January 21, i960, and to mature July 21, i960.
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 o.rn., Eastern
{Standard time, Monday, January 18,1960 . Tenders will not1be
received at the Treasury Department, Washington, Each tender must
8be 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 ^ranches 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 bill3 applied for, unless the tenders are
accompanied by an express guaranty of payment by an Incorporated bank
or trust company.

- 2 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 Departmment 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 additional bills dated
October 22,1959, (91 days remaining until maturity date on
April 21, i960)
and noncompetitive tenders for $ 100,000
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 21, i960,
in cash or other immediately available funds or in a like face
amount of Treasury bills maturing January 21, i960. 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 during0O0
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.

- 2 -

Unit
" of
Quantity

Commodity

Imports
as of
Dec. 31. 19gj

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

12 mos. from
August 1, 1959

1,709,000

Pound

liSMH

Bye, rye flour, and rye meal...... Sept. 1, 1959 June 30, I960
Canada
7'5,85l,7Ul
Other Countries 1,547,995

Pound
Pound

50,636,211

Butter substitutes, including
butter oil, containing k5% or
more butterfat.................#.

Calendar Year

1,200,000

Pound

Quota Fi

Jan. 31, I960
Argentina
Paraguay
Other Countries

5,525,000
71*1,000
234,000

Pound
Pound
Pound

3,31*2,221
Quota FilleJ
Quota Fillef

Tung Oil • Nov. 1, 1959 -

•Imports through January 12, i960

i y

TREASURY DEPARTMENT
Washington, D. C.

IMMEDIATE RELEASE
FRIDAY, JANUARY 15,1960.

A-731

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 December 31, 1959, inclusive, as follows:

Commodity

—cranr*
Period

and

Quantity

of
Quantity

Imports
as of
P e c 31t 19j

Tariff-Rate Quotas?
Cream, fresh or sour,........

Calendar Tear

Whole milk, fresh or sour....

Calendar Tear 3,000,000

Gallon

216

Oct. 1, 1959 December 31, 1959

120,000

Head

14,382

12 mos. from
April 1, 1959

200,000

Head

31,219

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

Calendar Tear

36,919,874

Tuna fish....................

Calendar Tear 52,372,574

Pound Quota Filled

White or Irish potatoes:
Certified seed....••...•..••
Other.

12 mos. from
Sept. 15, 1959

114,000,000
36,000,000

Pound
Pound

35,129,1*75
1,758,363

Walnuts.........

Calendar Tear

5,000,000

Pound

3,335,1*22

Peanut oil.•• o.

12 mos. from
July 1, 1959

80,000,000

Pound

Cattle, 700 lbs. or more each
(other than dairy cows).»..#
Cattle, less than 200 lbs. each

Woolen fabrics...............
Woolen fabrics Pres. Proc. 3285 and 3317
(T. Ds. 54845 and 54955)....
Stainless steel table flatware
(table knives, table forks,
table spoons)...............

1,500,000

Gallon

Pound

422

Quota Filled

Calendar Tear 13,500,000

Pound Quota Filled

May 19 - Dec.
31, 1959

Pound

Nov. l. 1959 Oct. 31, i960

350,000

69,000,000

Pieces

311,423

l^.i^6-W

34
TREASURT DEPARTMENT
Washington, D. C.
MEDIATE RELEASE
RIDAY, JANUARY 15,I960.

A-731

The Bureau of Customs announced today preliminary figures showing the imports for
isumption of the commodities listed below within quota limitations from the beginning
,the quota periods to December 31, 1959, inclusive, as follows:

Commodity

Period

and

Quantity

1
:
:

Unit
of
Quantity

Imports
as of
Dec. 31, 1959

riff-Rate Quotas:
jam, fresh or sour.........

Calendar Tear

>le milk, fresh or sour...,

Calendar Tear 3,000,000

;tle, 700 lbs. or more each
>ther than dairy cows).....
/tie, less than 200 lbs. each

1,500,000

Gallon

422

Gallon

216

Oct. 1, 1959 December 31, 1959

120,000

Head

14,382

12 mos. from
April 1, 1959

200,000

Head

31,219

'?h, fresh or frozen, filleted,
J C , cod, haddock, hake, pol>ck, cusk, and rosefish..*.

Calendar Tear

la fish •••••••••••.

Calendar Tear 52,372,574

Pound Quota Filled

12 mos. from
114,000,000
Sept. 15, 1959 36,000,000

Pound
Pound

35,129,475
1,758,363

. nut s.. • • • •••

Calendar Tear

5,000,000

Pound

3,335,422

\nut oil. ••••

12 m o s . from
July 1, 1959

80,000,000

Pcund

Lte or Irish potatoes:
srtified seed....
i^her

•

len fabrics.•• •••••
H
»len fabrics •es. Proc. 3285 and 3317
:• D s . 54845 and 5 4 9 5 5 ) . . . .
lAinless steel table flatware
.able knives, table forks,
ble spoons)

36,919,874

Pound

Quota Filled

Calendar Tear 13,500,000

Pound Quota Filled

May 19 - Dec.
31, 1959

Pound

Nov. 1, 1959 Oct. 3I, i960

350,000

69,000,000

Pieces

311,423

15,136,392

(over]

• 2 -

Commodity

Period

and Quantity

:
s
:

Unit
Imports
of
as of
Quantity Dec. 31* 19$j

Absolute Quotas:
Peanuts, 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 45$ or
more butterfat
••••••»•••••••
1 ting OH.......a.............***.

#Iiiports through January 12, i960

12 mos. from
August 1, 1959

1,709,000

Pound

4 5 4 , liO!

Sept. 1, 1959 June 30, I960
Canada
75,851,741
Other Countries 1,547,995

Pound
Pound

50,636,21|

Calendar Tear

1,200,000

Pound

Quota Filli

Nov. 1, 1959 Jan. 31, I960
Argentina
Paraguay
Other Countries

5,525,000
741,000
234,000

Pound
Pound
Pound

3,342,223]
Quota Filled
Quota Fillet}

TREASURY DEPARTMENT
Washington, 0. G.
IMMEDIATE RELEASE

FRIDAY, JANUARY 15. i960.

A-732

PRELIMINAR. DATA ON IMPORT3 FOR CONSUMPTION OP ONMANU.ACT.H__ LEAD AND ZINC CHARGEABLE TO THEftUOTASESTABLISH©
BY PRESIDENTIAL PROCLAMATION NO. 3257 OP SEPTEMBER 22, 1$5#
QDARTERL7 QUOTA PERIOD • October I, 1959 - December 31, 1959
IMPORTS - October I, 1959 - December 31, 1959
ITEM 391

Country
of
Production

Australia

ITEM 392
ITEM 393
ITEM 394
i Lead bullion or base bullion,
i lead in pigs and bars, lead
j
j
Lead-bearing ores, flue dust,: dross, reclaimed lead, scrap
j Zino-baaring ores of all kinds,: Zlno ia blocks, pigs, or slabs}
and aattes
«. lead, antiaonial lead, antl: except pyrites containing not : old and worn-out zinc, fit
: aonlal scrap lead, V p s aatal, s
over % of zino
t only to be reaanufactured, zinc
f all alloys or combinations of s
dross, and zino skismlngs
*
lead, n.s.p-.f.i
j
Quarterly Quota
:Quarterly Quota
: Quarterly __ota
Quarterly Quota
t Dutiable- Lead
Imports : Dutiable Lead
Iaporta i Dutiable Zinc
Inport.
By ¥el_ht
Deports
(Pounds!
"(Pounds7
(Pounds)
(Pounds)
10,080,000 10,680,000
23,630,000 23,680,000

Belgian Congo

5,440,000

Belgium and
Luxemburg (total)
Bolivia,
Canada

5,040,000
13,440,000

7,520,000

39I,I6»»

37*840,000

37,8*»o,ooo

3,600,000

5,0*»Q,000
13,^0,000

15*920,000

•5,920,000

66,480,000

Italy
Mexico
Peru

I6,i6o#ooo

16,160,000

Oh. So. Afrioa

14,880,000

m,880,000

Yugoslovia.
All other forei&i
countries (total)

6,560,000

PHSPABSO XN THE BURSA. 0_ CUSTOMS

5,M»0,000

3,1»89,l»26

36,880,000

70,480,000

70,^80,000

6,320,000

930,100

12,880,000

35,120,000

35»120,000

3,760,000

17,840,000

«7,8»t0,000

15,760,000

6,080,000

y J

TREASURY DEPARTMENT
Washington, D« C.
IMMEDIATE RELEASE

A-732

FRIDAY, JANUARY 15. I960.

PRELIMINAR. DATA ON IMPORTS FOR CONSUMPTION 0? UHM.&JTOFACTUH3D LEAD AND ZINC CHARGEABLE TO THE QUOTAS ESTABLISHED
BY PRESIDENTIAL PROCLAMATION NO. 3257 OP SEPTEMBER 22, 195S
QUARTERLY QUOTA PERIOD • October I, 1959 - December 31. 1959
IMPORTS • October I, 1959 - December 31» 1959
ITEM 392
t Lead bullion or base bullion,
i lead in pigs and bars, lead
Lead-bearing ores, H u e dust,! dross, reolaiaad load, sera?
and nattes
: lead, antiaonlal lead, antit aonial scrap load, typs sstal,
t all alloys or combinations of
ITEM 391

Country
of
Production

Qiarterly Gaota
Iaports
t Dutiable. Lead
(Pounds)
Australia

10,030,000 10,080,000

:C&artarIy Quota
: Dutiable Lsad
^PcundsX

Irs?ort3

$
*
: Zinc-baaring ores of all kinds,: Zino la blocks, pigs, or slabs;
: except pyrites containing not : old and wra-out zino, jTit
: only to be reaanufactured, zinc
i
cvar 3 ^ ©f zln©
" '"" *" *"
«•--*dross, and zinc skinxaings
:
t
:Quarterly Quota
: Quarts rly feiota
Imports
By height
Imports
: Dutiable Zinc
(Pounds)
"""
(Pounds)

23,680,000 23,680,000
5,440,000

Belgian Congo
Belgium and
Luxemburg (total)
Bolivia

5,040,000

5,01(0,000

Canada

13,440,000

13,1(1(0,000

15,920,000

66,480,000

66,U80,000

Italy
Mexico
Peru

16,160,000

On. So. Africa

14,880,000

IM,880,000

Tugosloria
All other foreign
countries (total)

ITEM 394

ITEM 393

6,560,000

PH2PAK2D IN THZ BUaSATJ 0? CUSTOMS

3,l»89,l(26

5,»»i(0,ooo

7,520,000

39I,I6M

37,840,000

37,81(0,000

3,600,000

36,880,000

70,480,000

70,»(80,000

6,320,000

930,100

12,880,000

35,120,000

35*i20,000

3,760,000

15,760,000

6,080,000

17,840,000

17,81(0,000

6,080,000

3?
TREASURY DEPARTMENT
WASHINGTON

IMMEDIATE RELEASE
FRIDAY, JANUARY 13,I960.

A-733

The Bureau of Customs announced today the following preliminary
figures showing the imports for consumption from January 1, 1959* to
December 31, 1°£9, inclusive, of commodities for which quotas were
established pursuant to the Philippine Trade Agreement Revision Act
of 1955:

Commodity

Buttons*•..........

Imports
as of
December 31. 1959

Established Annual
Quota Quantity

765,000

Gross

323,572

Cigars.............

180,000,000

Number

I*,9i*7,l89

Coconut Oil.••.....

1*03,200,000

Pound

155,582,1*1*9

Cordage

6,000,000

Pound

1*, 920,21*3

(Refined
Sugars
(Unrefined...

l,90li,000,000

Pound

Tobacco

5,850,000

63,1*01*, 000*
1,81*0,596,000*
Pound

•^Information furnished by Department of Agriculture

5,830,861*

38
TREASURY DEPARTMENT
WASHINGTON

IMMEDIATE RELEASE
FRIDAY, JANUARY 15.1Q60.

A-733

The Bureau of Customs announced today the following preliminary
figures showing the imports for consumption from January 1, 1959, to
December 31, 1959, inclusive, of commodities for which quotas were
established pursuant to the Philippine Trade Agreement Revision Act
of 1955:

Commodity

Buttons**..

Established Annual
Quota Quantity

765,000

Imports
as of
December 31» 1959
Gross

323,572

Cigars

130,000,000

Number

k, 91*7,189

Coconut Oil *

1*03,200,000

Pound

155,532,1*1*9

Cordage

6,000,000

Pound

1*, 920,21*3

(Refined.....
Sugars
(Unrefined.•.

l,90l*,000,000

Pound

Tobacco

5,85o,ooo

63,l*0l*,O00*
1,81*0,596,000-*
Pound

^Information furnished by Department of Agriculture

5,330,861*

TREASURY DEPARTMENT
Washington, D . 0.
IMMEDIATE RELEASE

FRIDAY, JANUARY 15. I960.

A-734

PRELIMINARY DATA ON IMPORTS FOR CONSUMPTION OF UNMANUFACTURED LEAD AND ZINC CHARGEABLE TO THE QUOTAS ESTABLISHED
BY PRESIDENTIAL PROCLAMATION NO. 3257 OF SEPTEMBER 22, 1958
QUARTERLY QUOTA PERIOD - January I, I960 - March 31, i960
IMPORTS • january \f \%Q _. January I3„ I960
ITEM ??1

Country
of
Produotlon

ITEM 392
"t Lead''bullion'or base bullion,
i lead in pigs and bare, lead
Lead-boaringjorea,
and mattes flue duet,i dross, reolaimad lead, aorap
—*••-* lead, antimonial lead, antlt menial sorap lead, type metal,
t all alloys or combinations of
Quarterly Quota
tQuarterly Quota
lead n.s.p.f.
Dutiable. Lead
Imports x Dutiable Lead
Imports

fpoundV)

Australia

10,080,000 10,080,000

23,680,000

ITEM 394
I ™ 3??
T
t
t
t
; Zino-bearing orea of all kinds, i Zino in blooks, pigs, or slabs;
: exoept pyrites oontaining not i old and worn-out zino, fit
t
over 3 # of zino
x only to be reinanufaotured, zino
i
t
dross, and zino akinmings
x
xQuarterly Quota
ttQuarterly Quota
i Dutiable Zinc
Imports
Imports i By ffel/jht
(Pounds)
(Pounds)

»I,I5>I,030

Belgian Congo

5,440,000

Belgium and
Luxemburg (total)
Bolivia
Canada

7,520,000
5,040,000
13,440,000

13,^0,000

15,920,000

98»»,557

66,480,000

*t>4,210,101*

Italy

37,840,000
3,600,000

Mexico
Peru

16,160,000

3,156,709

On. So. Afrioa

14,880,000

8,9»»9,»K>»»

Yugoslovia
All other foreign
oountrles (total)

6,560,000

VRilPA-RJin IN T H X BVSUCMX O.

OOSTOU3

663,007

•,698,322

718,972

36,880,000
12,880,000

»»,085,I76

70,480,000

I0,59»»,027

6,320,000

l,527,M9»»

35,120,000

»»,7I3,08I

3,760,000

17,840,000

17,8^0,000

15,760,000

707,185

6,080,000

6,35M92
3,00»»,969
107,526
601,376

»»,652,393

TREASURY DEPARTMENT
Washington, D . C.

O&SDIATE RELEASE

k-73k

FRIDAY, JANUARY 15. I960.

PRELIMINARY DATA ON IMPORTS FOR CONSUMPTION 0? UHMANO?ACTUIBD LEAD AND ZINC CHARGEABLE TO THE QUOTAS ESTABLISHED
BY PRESIDENTIAL PROCLAMATION NO. 3257 07 SEPTEMBER 22, 1958
QUARTERLY QUOTA PERIOD • January I, I960 - March' 3N »960
IMPORTS • January I, I960 - January I3» '960
ITEM 392
t Lead bullion or base b u l l i o n , T

ITEM 391
Country
of
Produotion

and aattes

Quarterly Quota
t Dutiable. Lead
(Pounds)
Australia

10,080,000

ITEM 394

ITEM 393
t

: lead, antisonlal load, anti: except pyrites containing not
over 3 ^ of zino
: aonial scrap load, type aatal, :
: all alloys or ooabinationa of t
i
lsad n.s.p.f.
t
_____-_»—
:__artarly Quota
: Quartsrly Quota
Inoorts
Iaports : Dutiable Laad
lEoorta : Dutiable 2ins
(Pounds")"
~f Pounds)

10,080,000

: old and *oro-out zino, fit
I only to be reaanufactured, zino
:
dross, and zino skinning*
tQuarterly Quota
i By Weight
Isports
(Pounds)

23,680,000 M5M30
5,440,000

I,05*

Belgian Congo
Belgium and
Luxemburg (total)
Bolivia

5,040,000

1,698,322

Canada

13,440,000

I3,V»0,000

15,920,000

98»»,557

66,480,000

M4,2I0,I0»»

7,520,000

663,007

37,840,000

6,35M92

3,600,000

3,00»»,969
107,526

Italy
Mexico
Peru

16,160,000

Un. So. Afrioa

14,880,000

3,156,709

Yugoslovia
All other foreign
oountries (total)

6,560,000

718,972

36,880,000

»»,085,I76

70,480,000

io,59M27

6,320,000

12,830,000

l,527,1*9>»

35,120,000

«»,7I3,08I

3,760,000

15,760,000

707,185

6,080,000

17,840,000

17,8^0,000

6,080,000

601,376

H,652,393

~z-

COTTON WASTES
(In pounds)
COTTON CARD STRIPS made from 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 OTH^rfE*
. ADVANCED IN VALUE. Provided, hoiewr, that not more than W / 3 + p e r c e n t 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 e . . « <
Germany . • • <
Italy . . . .

Established
TOTAL QUOTA

Total Imports
: Established s
Imports
if
Sept. 20, 1959, to : 33-1/3% of : Sept. 20, 1959
Total Quota ; to January 12* I960
Jmuipy 12.1960

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

1,7©9,419
239,69©
53,620

5,482,509

2,052,848

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

22,216

25,443
ft,?6Q

1,441,152 1,441,152
75,807 53,620
22,747
14,796
12,853

22,216

25,443
7,088

25,443
2,260

1,599,886

1,544,891

TREASURY DEPARTMENT
Washington, D. C.

IMMEDIATE RELEASE
FRIDAY, JANUARY 15, I960.

A-735

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, 19 qg , JtM1fl^T I2 f I960
Country of Origin Established Quota Imports Country of Origin Established Quota
Egypt and the Anglo- Honduras . ......... 752
Egyptian Sudan
783,816
_
Peru
•
247,952
_.
British India
2,003,483
_
c hina
,
1,370,791
_.
Mexico
8,883,259
8.8$3_259
Brazil
618,723
618,000
Union of Soviet
Socialist Republics ...
475,124
_
Argentina
5,203
Haitl
2
37
Ecuador...
9,333
_

Paraguay
Colombia
•
iraq
British East Africa*'..'!
Netherlands E. Indies . Barbados
l/other British W. Indies.
Nigeria
2/0ther British'w!'Africa
^/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 1-1/8" or more
Imports August 1, I9sQ - J__n___-v 12, I960
Established Quota (Global) - 45,656,420 Lbs.
Staple Length Allocation Imports

^Ivfo»ormore

„

I-5/32 or more and under
1
"/_^8" ^ Tan ^uis)
1-1/8 or more and -under
1 3/8
"

39,590,778

39,59©,778

1,500,000

.^,565,642

4,565,642

- 871
124
2$5
2,240
71,388
21,321
5 377
l6'oo4
689

TREASURY DEPARTMENT
Washington, D. C.
IMMEDIATE RELEASE
FRIDAY. JANUARY 15, I960.

A-735

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, 1969 - Jzmitsry 12 f I960
Country of Origin
Egypt and the AngloEgyptian Sudan ....
Peru
British India
China
Mexico
Brazil
Union of Soviet
Socialist Republics
Argentina
,
Haiti
,
Ecuador
,

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
618,000

Established Quota

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

752
871
124
195
2,240
71,388
21,321
5,377
16,004
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, 19<>9- Jgaaiwnr 12 f I960
Established Quota (Global) - 45,656,420 Lbs.
Staple Length Allocation Imports
I-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"
4,565,642

39,590,778
1,500,000
4,565,642

-2CQTTON WASTES
(In pounds)
COTTON CARD STRIPS made-from cotton having a. staple-of less than 1-3/16 inches ^le^* COHBER
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 countries? United Kingdom, France, Netherlands,
Switzerland^ Belgium, Germany, and Italys
Established
TOTAL QUOTA

Country of Origin
United Kingdom. .
uanacia . . . . .
France . . . . .
British India „ .
Netherlands. • . .
Switzerland . . .
Belgium
Japan . . . . • . . . . .
China • -. . . . . .

Egypt

......

Cuba e • . a

. .

Germany . • • . •
Italy . . . .

Total Imports
• Sept. 20, 1959, to
j_ January 12» I960

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

1,709.419
239,690
53*820

5,482,509

2,052,848

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

22.216

25,443
„2»26CL-

Established s I m p o r t s T J
33-1/3* of s Sept, 20, 1959
Total Quota s to Jfgaifgy 12» I960
1,441,152 1*441,152
75,807 53,820
22,747
14,796
12,853

22,216

25,443
7,088

25,443
_J2^2fiQ.

1,599,886

1,544,891

.................................*•****
9..»...*..».m....*».#**

.........m.m. *-....*-.

^$Mii

TREASURY DEPARTMENT
WASHINGTON, D.C.

A
IMMEDIATE RELEASE,
Tuooday, _\eoenfrer yT
15»
iq<€o t 1959*

--A-TW"

^_>'- - '-'Vff*'v

During «Me*eariaer 1959^ market transactions
in direct and guaranteed securities of the
government for Treasury investment and other
accounts resulted in net.purchases by the

JT/ZJ^ 10 9,0*0
Treasury Department of ^pfepfip^feyeeo.

oOo

7JJ:

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

IMMEDIATE RELEASE
Friday, January 13, i960.

A-736

During December 1959, 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 $113,103,000.

0O0

- k-

In prosperous periods, on the other hand, tax receipts automatically
rise and certain types of spending contract. If our fiscal affairs
are in order this should produce a surplus. Over the period of a
complete business cycle, a net surplus for debt retirement should be
achieved. Conditions may well arise when Intentional variations in
spending or tax rates for cyclical purposes may be desirable. But
I believe that experience in recent years has shown us that we should
move very cautiously in undertaking such variations, the full impact
of which is apt to occur during the succeeding phase of the business
cycle.
We have before us the greatest opportunity in history. Our
economy is vigorous and growing, our expansion many sided. Our
friends and allies among the industrial nations stand with us in
their desire and determination to maintain their own strength and
help others advance in freedom. With prudent management of our
affairs, both public and private, and in the absence of any major
change in the international outlook, the decade we are entering
should be one of the most prosperous and fruitful in our experience.

0O0

*r y

- 3Only with a sound economy and sound money can the necessary and
desirable programs of the government — be they military security,
general services to the public, or mutual assistance to our allies —
long be sustained for the enduring benefit of all Americans.
Strength in the economic sphere means that our major policy goal
must be sustainable economic growth — not spurts of activity under
forced draft, followed by wasteful declines.
For sustained growth, a policy of fiscal responsibility is a
primary requirement. It is the basis of a dollar which commands
confidence both at home and abroad. Economic growth in the future
depends heavily on a high rate of saving and capital formation today.
Our rate of growth will be small indeed if fear of inflation is
allowed to impair the will to save in traditional fixed dollar forms.
Inflation, either creeping or rapid, is the enemy of growth.
The program for 196l, incorporating a budget surplus of $4.2
billion, rests on a policy of fiscal responsibility. To maintain
full confidence in the ability of the Government to manage its affairs
wisely, the surplus must be used to the fullest extent possible in
reducing outstanding debt. As the President has said, we cannot
properly speak of a surplus as long as the Nation is in debt. Debt
repayments must be established as normal practices in prosperous
periods before we can profitably make improvements in our tax structure
of the type which would truly reduce the heavy burdens of taxation.
Financial responsibility also requires efficiency in management
of our $290 billion public debt. Until the artificial 4-1/4 percent
ceiling on new long-term bond issues is removed by Congress, the
Treasury will be unable to manage the debt in the least inflationary
manner. The President has emphasized in his first special message of
this year that removal of the ceiling has high priority in his
legislative program.
On this same occasion last year I commented on the rapidly changing
public attitudes toward Government intervention in the economic
process. An exaggerated view of the ups and downs in our economy had
been reflected during the previous 18 months or so in exaggerated
demands for Government action — first to restrain expenditures, and
then to promote recovery. Still later public attention shifted to
the possibilities of hedging against a future inflation. I believe
we have sufficient evidence now to recognize more clearly than a year
ago that intentional variations in tax rates or spending programs for
cyclical purposes must be kept to a minimum.
Our particular system of revenues is already quite responsive to
changes in the level of business activity. During a recession,
revenues go down but expenditures do not, and some tend to rise. From
these so-called built-in stabilizers a moderate deficit may result.

49
- 2 During the first half of i960 we expect that the growth of the
economy will be augmented by additional production which had been
postponed because of shortages during the steel strike. For the
remaining months underlying this budget, we anticipate gains in
incomes consistent with a sustainable rate of growth in the economy.
We are now estimating receipts in the current fiscal year at
$78.6 billion. This is an increase of $10.3 billion over actual
receipts in fiscal year 1959- This unusually large increase reflects
the sharp recovery in 1959 incomes, particularly in corporate
profits, from the recession levels of 1958.
Typically profits rise sharply in the early part of a recovery
period and more moderately thereafter. It now appears that corporate
profits will be $48 billion in calendar year 1959, $11 billion above
1958. We anticipate a moderate rise to $51 billion in the calendar
year i960.
Receipts in fiscal 1961 are estimated to rise $5.4 billion,
totaling $84.0 billion for the year. This is a substantial rise but
only about half as much as in i960, principally because of the marked
difference in the rate of increases in corporate profits.
The revenue estimate for fiscal 1961 is based on a continuance
of the present tax rates on corporation profits and certain excise
taxes for another year beyond their present expiration date of
June 30, i960. Failure to do this would result in revenue losses of
$2.7 billion for the fiscal year 1961 and over $4 billion annually
thereafter.
On the matter of the budget in general, I would like particularly
to emphasize the Presidents statement that achievement of our plans
will, in the last analysis, depend on the people themselves. We are
living in a rapidly changing world. Our decisions as a free people
must be adapted to current realities.
What are these current realities?
Let me make one of these realities crystal clear. A government
can do none of the things which are necessary and desirable for a
sustained period unless it is supported by a sound economy based on
sound money. Governments and individuals are alike in this. Neither
should undertake what may look like exceedingly desirable actions
if by so doing the soundness of the nation!s economic health, or the
individual's financial health is undermined.

TREASURY DEPARTMENT
Washington
FOR RELEASE AT 12 NOON, EST,
MONDAY, JANUARY 18, i960.

A-737

STATEMENT BY TREASURY SECRETARY ANDERSON AT BUDGET PRESS CONFERENCE,
ROOM 4121, MAIN TREASURY, 11:00 A.M., SATURDAY, JANUARY l6, i960.
Since the Director of the Budget has discussed the expenditures
side of the budget with you, I shall devote my remarks very largely
to the revenue estimates.
For the current fiscal year, i960, net budget receipts are
estimated to amount to $78.6 billion. This is $10.3 billion greater
than actual revenues of the preceding year and substantially higher
than the amount realized in any past year. A further rise of $5.4billion to $84.0 billion is estimated for the fiscal year 1961.
These revenue estimates reflect our belief that our economy will
continue to move forward with strength and that substantial gains in
employment and incomes will be achieved.
In preparing the revenue estimates, it is necessary to make
specific assumptions for the economic outlook for the next year and
a half. These assumptions, in terms of the most important economic
aggregates, are:
Calendar year
1959
1350
(In billions of dollars)
Gross national product... . 480 510
Personal income
Corporate profits

380
48

402
51

These assumptions express our best judgment and we believe they
represent a realistic appraisal of the current outlook.
In the last 18 months we have seen a marked recovery from the
1957-58 recession levels. Substantial gains were made in production
and Incomes in the second half of the calendar year 1958 and in the
first half of 1959, to some extent amplified by expansion in
anticipation of the steel strike. This progress was interrupted by
the prolonged strike in the second half of the year.

51
TREASURY DEPARTMENT
Washington
FOR RELEASE AT 12 NOON, EST,
MONDAY, JANUARY 18, i960.

A-737

STATEMENT BY TREASURY SECRETARY ANDERSON AT BUDGET PRESS CONFERENCE,
ROOM 4121, MAIN TREASURY, 11:00 A.M., SATURDAY, JANUARY 16, i960.
Since the Director of the Budget has discussed the expenditures
side of the budget with you, I shall devote my remarks very largely
to the revenue estimates.
For the current fiscal year, i960, net budget receipts are
estimated to amount to $78.6 billion. This is $10.3 billion greater
than actual revenues of the preceding year and substantially higher
than the amount realized in any past year. A further rise of $5-^
billion to $84.0 billion is estimated for the fiscal year 1961.
These revenue estimates reflect our belief that our economy will
continue to move forward with strength and that substantial gains in
employment and incomes will be achieved.
In preparing the revenue estimates, it is necessary to make
specific assumptions for the economic outlook for the next year and
a half. These assumptions, in terms of the most important economic
aggregate s, are:
Calendar year
1959
19bO
(In billions of dollars)
Gross national product 480 510
Personal income
Corporate profits

380
48

402
51

These assumptions express our best judgment and we believe they
represent a realistic appraisal of the current outlook.
In the last 18 months we have seen a marked recovery from the
1957-53 recession levels. Substantial gains were made in production
and incomes in the second half of the calendar year 1958 and in the
first half of 1959, to some extent amplified by expansion in
anticipation of the steel strike. This progress was interrupted by
the prolonged strike in the second half of the year.

52
- 2 During the first half of i960 we expect that the growth of the
economy will be augmented by additional production which had been
postponed because of shortages during the steel strike. For the
remaining months underlying this budget, we anticipate gains in
incomes consistent with a sustainable rate of growth in the economy.
We are now estimating receipts in the current fiscal year at
$78.6 billion. This is an increase of $10.3 billion over actual
receipts in fiscal year 1959. This unusually large increase reflects
the sharp recovery in 1959 incomes, particularly in corporate
profits, from the recession levels of 1958.
Typically profits rise sharply in the early part of a recovery
period and more moderately thereafter. It now appears that corporate
profits will be $48 billion in calendar year 1959, $11 billion above
1958. We anticipate a moderate rise to $51 billion in the calendar
year i960.
Receipts in fiscal 1961 are estimated to rise $5.4 billion,
totaling $84.0 billion for the year. This is a substantial rise but
only about half as much as in i960, principally because of the marked
difference in the rate of increases in corporate profits.
The revenue estimate for fiscal 1961 is based on a continuance
of the present tax rates on corporation profits and certain excise
taxes for another year beyond their present expiration date of
June 30, i960. Failure to do this would result in revenue losses of
$2.7 billion for the fiscal year 1961 and over $4 billion annually
thereafter.
On the matter of the budget in general, I would like particularly
to emphasize the President's statement that achievement of our plans
will, in the last analysis, depend on the people themselves. We are
living in a rapidly changing world. Our decisions as a free people
must be adapted to current realities.
What are these current realities?
Let me make one of these realities crystal clear. A government
can do none of the things which are necessary and desirable for a
sustained period unless it is supported by a sound economy based on
sound money. Governments and individuals are alike in this. Neither
should undertake what may look like exceedingly desirable actions
if by so doing the soundness of the nation's economic health, or the
individual's financial health is undermined.

- 3-

Only with a sound economy and sound money can the necessary and
desirable programs of the government — be they military security,
general services to the public, or mutual assistance to our allies —
long be sustained for the enduring benefit of all Americans.
Strength in the economic sphere means that our major policy goal
must be sustainable economic growth — not spurts of activity under
forced draft, followed by wasteful declines.
For sustained growth, a policy of fiscal responsibility Is a
primary requirement. It is the basis of a dollar which commands
confidence both at home and abroad. Economic growth in the future
depends heavily on a high rate of saving and capital formation today.
Our rate of growth will be small indeed if fear of inflation is
allowed to impair the will to save in traditional fixed dollar forms.
Inflation, either creeping or rapid, is the enemy of growth.
The program for 196l, incorporating a budget surplus of $4.2
billion, rests on a policy of fiscal responsibility. To maintain
full confidence in the ability of the Government to manage its affairs
wisely, the surplus must be used to the fullest extent possible in
reducing outstanding debt. As the President has said, we cannot
properly speak of a surplus as long as the Nation is in debt. Debt
repayments must be established as normal practices in prosperous
periods before we can profitably make improvements in our tax structure
of the type which would truly reduce the heavy burdens of taxation.
Financial responsibility also requires efficiency in management
of our $290 billion public debt. Until the artificial 4-1/4 percent
ceiling on new long-term bond issues is removed by Congress, the
Treasury will be unable to manage the debt in the least inflationary
manner. The President has emphasized in his first special message of
this year that removal of the ceiling has high priority in his
legislative program.
On this same occasion last year I commented on the rapidly changing
public attitudes toward Government intervention in the economic
process. An exaggerated view of the ups and downs in our economy had
been reflected during the previous 18 months or so in exaggerated
demands for Government action — first to restrain expenditures, and
then to promote recovery. Still later public attention shifted to
the possibilities of hedging against a future inflation. I believe
we have sufficient evidence now to recognize more clearly than a year
ago that intentional variations in tax rates or spending programs for
cyclical purposes must be kept to a minimum.
Our particular system of revenues is already quite responsive to
changes in the level of business activity. During a recession,
revenues go down but expenditures do not, and some tend to rise. From
these so-called built-in stabilizers a moderate deficit may result.

54
- 4In prosperous periods, on the other hand, tax receipts automatically
rise and certain types of spending contract. If our fiscal affairs
are in order this should produce a surplus. Over the period of a
complete business cycle, a net surplus for debt retirement should be
achieved. Conditions may well arise when intentional variations in
spending or tax rates for cyclical purposes may be desirable. But
I believe that experience in recent years has shown us that we should
move very cautiously in undertaking such variations, the full impact
of which is apt to occur during the succeeding phase of the business
cycle.
We have before us the greatest opportunity in history. Our
economy is vigorous and growing, our expansion many sided. Our
friends and allies among the industrial nations stand with us in
their desire and determination to maintain their own strength and
help others advance in freedom. With prudent management of our
affairs, both public and private, and in the absence of any major
change in the international outlook, the decade we are entering
should be one of the most prosperous and fruitful in our experience.

0O0

TREASURY DEPARTMENT
Washington

REMARKS BY FRED C. SCRTBNER, JR., UNDER
SECRETARY OF THE TREASURY, BEFORE THE
NATIONAL ASSOCIATION OF HOME BUILDERS,
CONRAD-HILTON HOTEL, CHICAGO, ILLINOIS,
TUESDAY, JANUARY 19, I960, 10:00 A.M., CST.
It Is a privilege to speak to your organization, which has as Its
primary purpose the promotion of healthy growth in an industry so
essential to our American standard of living. I know of nothing more
important in our lives than the satisfactions we derive from our homes
and all that is associated with them.
Your organization has played a significant role in making America
a nation of home owners. You have been instrumental in bringing
improved methods of construction and merchandising to the attention of
builders generally, and have worked steadily to give the buyer a
better and more efficient home for his money.
Yet your industry has had to operate at times under most
difficult conditions. Activity in residential construction has been
subject to unusually wide cyclical swings, and it has been strongly
affected by variations in the supply of investment funds.
We in the Treasury Department, concerned with the broad field of
the national economy, likewise have a primary interest in promoting
strong and healthy economic growth. Like you, we have had our problems.
When the nation this month entered the new year it also entered
an important new decade — one that is widely expected to be a decade
of phenomenal national growth.
In this decade the residential construction industry may be
expected to play a part close to the center of the stage, since an
unusually rapid growth in new family formation as well as in total
population, is the main premise on which the high hopes of the
"golden sixties" are founded.
Census Bureau projections of our population by age groups
indicate a dramatic upsurge of new families — and consequently in the
prospective demand for new homes.
The extent to which we will be able to convert into reality the
opportunities offered in this decade may well depend on our economio
discipline over these next few years.

A-738

- 2-

To meet fully the opportunities that will be offered by this
decade, we must first be sure that the economy is maintained on a
sound and firm foundation. In addition, we must be prepared to
meet the new financial requirements which that period will bring.
Of primary importance will be the need for a large supply of
investment funds. New capital will be urgently needed for investment
in new plants and equipment to make jobs for the rapidly growing labor
force, and to provide an enlarged supply of consumer goods for our
expanding markets. It will be needed by cities and states to
provide facilities for their growing populations. It will be needed
to provide mortgage funds for what is expected to be the greatest
residential construction boom we have ever known.
On January 8th the Federal debt was $292.6 billion, the heaviest
in history. This sum is more than one-fifth of all the money spent
by the Federal Government since this country came into existence in
1789. For the fiscal year which ended last June, the Federal
Government operated with a deficit of $12-1/2 billion — the
largest peacetime deficit in any single year. The Interest cost of
the Federal debt for the current fiscal year is estimated at
$9-1/^ billion. These are chilling figures.
Of even greater significance, in my opinion, is the growth, at
an ever-increasing rate, of the indebtedness of state and local
governments. Combined budgets of these governments have risen
billions of dollars in each of the last several years. So have
their deficits — from $2-1/2 billion in 1957 to $4-1/2 billion in
1958, and an estimated $5 billion in the fiscal year which ended
last June. Both in dollars and percentagewise, the indebtedness of
state and local governments has increased much more in the last decade
than the Federal debt. The state and local governmental debt outstanding at the end of fiscal 19^9 was $21 billion. At the end of
fiscal 1959 — just ten years later — it was $62 billion. It has
nearly tripled In ten years. In the same period of time the Federal
debt increased $32 billion — a significant sum but substantially
less than the total increase in state and local governmental
indebtedness.
The tax load in this country, already at an all-time high, is
shooting up at a record peacetime rate. The total tax bill —
Federal, State and local governments — for the year started last
July 1st will probably go up more than $13 billion, to a total of
around $113 billion. And these totals do not include Federal gasoline
and payroll taxes trusteed to pay for the Federal Highway and the
Social Security programs.
This year's increase in the combined tax take of Federal, State,
and local governments will average about $70 per capita — a 10
percent Increase over last year. The tax bill paid by the American
people has doubled In the last decade. During the same period, the
national
bill
aboutper
$337
income.
head,
to $630.
counting
Taxes
every
nowman,
amount
woman
to and
about
child,
26 percent
has gone
of from
the total

- 3-

I am sure that none of us minimizes the grave significance of
these debt and tax figures. We cannot too frequently call them to
the attention of the American people. At every level of government
we have been living beyond our income. How much further must we
plunge into debt before we read correctly the warning signals which
fly today?
However, I do not participate in this program with a sense of
discouragement. The outlook for the economy of the United States is
good. The strong inflationary pressures of last year have been
checked. The purchasing power of the dollar has declined during the
past year, but the decline has been slight. World markets are
expanding and give an opportunity for increased export trade.
Although it was said that it couldn't be done, the President
submitted to the Congress a balanced budget for the fiscal year
i960. He led such a vigorous fight for its adoption that the
President could report in the State of the Union message that
the i960 budget, In spite of the steel strike, is still in balance.
Far more important, the President disclosed that the 1961 budget
will not only be in balance, but will contain a surplus of
$4.2 billion, the largest surplus of his Administration.
The case for a balanced budget was taken directly to the people of
this country. I believe they are now coming to realize that the
United States cannot continue indefinitely to live beyond its income
and still have the internal strengths necessary to fight effectively
the external challenges which we face on both military and economic
fronts.
Weakening our economy will play into the hands of those who
threaten our way of life just as surely as weakening our military
position.
I am sure you will agree that the spending record of the first
session of the 06th Congress has been quite different from that which
was predicted when the Congress convened in January of last year. The
record has been different because,more and more, the people of this
country have responded to sound fiscal leadership which believes that
there Is nothing more important to work for and stand for and fight
for than fiscal soundness.
Let me make it very clear that there has been no striving for a
balanced budget simply for the sake of achieving balance. A balanced
budget is an important and an understandable symbol of sound fiscal
policy and of good government. Its primary purpose is to safeguard
the savings and the purchasing power of the dollars of every American.
A balanced budget works for a growing economy. It works against
Inflation. It inspires confidence. It Is one thing we can strive for
to assure economic growth and expansion.
If we are to continue to carry for an Indefinite time the heavy
burdens on the military and civilian fronts which the cold war makes

- 4-

5Q
O

essential, we must have an economy which will grow, which will be
dynamic. We need informed businessmen, workers, savers, and investors
who know how best to contribute to economic growth. We need people who
understand that there is no substitute for hard work, careful planning
and true saving. We will grow as a country only if we produce more
than we consume and use our surplus to provide new sources of production. With assurance that the value of their dollars will be
protected, people will be willing to work harder, save more, and
invest more. Our economy will grow only if we have the savings needed
for investment capital.
New capital can come from only one source: from actual saving —
from the funds which we as a people set aside out of our earnings
and refrain from spending. There is no other acceptable source for
new capital.
Saving is not easy. It requires that people deliberately put
aside some of their earnings. It requires that corporations follow
a deliberate policy of setting aside earnings for capital account.
The large saving effort that will be called for to meet the new
capital requirements of this decade needs the assistance of an
environment conducive to saving. This means that the threat of
inflation must be removed, so that people may have full confidence
that a sound dollar will be maintained.
A balanced budget Is only the beginning. The public debt must
be reduced. If in bad times we allow ourselves to run a deficit
in order to stimulate recovery, we must pay off that debt in good
times. Otherwise, we shall engage in periodic increases in the
public debt without offsetting reductions.
If we are realistic we know that we will not achieve debt
reduction unless we can find support for a program calling for the
reduction of expenditures on the Federal level. Here each of you
can make a contribution. It is easy indeed to suggest that public
expenditures dear to someone else's heart should be reduced or
eliminated. We need far more than that. Every one of us must be
prepared to accept and even to request limitation of those expenditures
in which he has an individual special interest. Holding down Government
expenditures means to hold down everybody's expenditures. When
everybody accepts that principle for a fact, then we will have
established fiscal discipline and the budget will be under control.
From the point of view of the Treasury Department, the most
important piece of business which Congress left unfinished upon
adjournment was granting to the Treasury the additional statutory
authority necessary to manage, without adding to inflationary pressures,
our record Federal debt.
In order effectively to do its job in handling the public debt,
and that means not only providing the funds to pay the government's
bills when they
due but manner,
also securing
the money
a noninflationary
and are
economical
the President
inin
June
of last

year asked Congress to remove the 4-1/4 percent interest rate ceiling
on new issues of all Treasury bonds running more than 5 years to
maturity. The Congress debated the matter but did not act, despite
renewal of the President's request in August. On the 12th of this
month the President, for a third time, asked Congress for removal
of the archaic interest ceiling, passed in 1918, which is restricting
flexible debt management.
We are fully aware that a great many members of the home building
industry are opposed to removing the 4-1/4 percent ceiling because
they have the impression that it would hurt the mortgage market.
I believe that just the opposite is true.
Time after time during the last few months leaders in the field
of home financing — in mutual savings banks, commercial banks and
savings and loan associations — have come to us with conclusive
evidence that more harm is being done to the mortgage market today
by large scale Treasury security offerings in the 4 to 5-year area
than by selling long-term bonds.
Mortgage funds come primarily from savings and loan associations
and from banks — in fact, over 60 percent last year came from these
two sources. These institutions secure their money mostly from
Individuals as they save from current income.
Individuals earn no more than 3 percent on their savings accounts
in commercial banks, since that is maximum permitted by Federal
regulation. They earn about 3-1/2 percent on their mutual savings
bank accounts. They earn a little more on savings and loan shares,
but still less than 4 percent on the average, even with recent increases.
Therefore, when the ceiling forces the Treasury to pay 5 percent
to sell a 4 to 5-year note, as it has recently, this interest rate on
a Government security becomes a "magic" rate that captures the buying
interest of thousands of individuals who usually never think of such
Investments.
People raise the money to buy these high-yield securities by
drawing savings out of the banks and savings and loan associations.
The net result is an injury to the mortgage market substantially
greater than the actual withdrawal of savings, since no institution
will make future commitments to buy mortgages in excess of its
expected cash flow.
If the Treasury, on the other hand, had not been obliged to do
all of its financing within the 5-year straightJacket, some of the
pressure could have been taken off the short-term market by doing
a modest amount of cash borrowing and by refunding Immediate maturities
in the area beyond 5 years. This could have been done, I believe,
at undoubtedly less than 5 percent, and the buyers largely would not
have been individuals who drew money out of savings institutions
at the expense of the mortgage market. The issue would more likely
have been placed with pension funds and other long-term savers who
are not major sources of mortgage funds.

- 6-

c «w>

In the second place the Treasury probably would have tried to
accomplish most of its debt extension through advance refunding,
so the volume of long-term issues for cash or immediate refunding
would probably be small. The current flow of savings is not
touched by advance refunding, since an investor already holding
a Government bond merely exchanges it for a new and longer one.
It seems rather obvious to me, therefore, that the home
building industry has much to gain from active support of the
President's request for removal of the 4-1/4 percent interest rate
ceiling. Your industry is heavily dependent on the lifeblood of
credit. I submit that you will find more mortgage credit available
with the ceiling off than with it on.
Today the current pressure for funds by businesses, state and
municipal governments, home builders, and other borrowers makes
heavy demands on a relatively modest volume of savings and has
pushed up interest rates. The Treasury, because of the 4-1/4
percent ceiling, cannot sell new bonds of more than five years'
maturity. The Treasury must, therefore, borrow wholly on shortterm securities. Much of this borrowing is inflationary; under
current market conditions it is costly; it hurts consumers and
small businesses; and it creates even greater debt management
problems for the future.
Crowding all Treasury borrowing into the short-term market adds
to inflationary pressures for two reasons. In the first place, a
long-term bond is a true investment Instrument, but a short-term
Treasury security is only a few steps away from being money. It
can be sold easily in the market, at or about its redemption price,
to obtain funds to spend for goods and services, or the holder can
simply wait a few days or weeks until it matures, demand cash from
the Treasury, and spend the proceeds.
Secondly, commercial banks make up a much larger part of the
market for short-term Treasury securities than they do for longterm issues. When banks buy securities they create in the process
new deposits, and this adds to the money supply. An expanding
money supply, during a period when pressures on economic resources
are intensifying, adds momentum to inflationary forces.
The handling of our $290 billion debt in an inflationary manner
is bad enough, but that's not all. Sole reliance on short-term
borrowing Is costly today, because interest rates on most securities
of less than 5 years' maturity are higher than those on longer-term
issues.

- 7 It is only common sense that the confinement of all borrowing
to one segment of the market tends to drive up interest rates in
that part of the market. The fact is that the short-term market
is already overcrowded, reflecting the impact of record credit
demands on the part of consumers, small businesses, and other
short-terra borrowers. This overcrowding means that somebody is
going to get pinched, so long as the Treasury has to borrow
exclusively on short-term issues. The proof of this statement Is
evident in today's market for Government securities. On 3-month
Treasury bills Interest rates are about 4-1/2 percent. The rates
on 6-month bills, 1-year bills and 5-year notes are all about
5 percent. At the same time it probably would have been possible
to borrow cheaper in the long-term area.
In addition to being inflationary, costly, and unfair to private
short-term borrowers such as consumers and small businesses, Treasury
financing wholly in the short-terra range can only add to future
problems of debt management. Currently almost three-fourths of the
marketable public debt matures within five years, and that total is
growing. As more debt is piled into this area, the short-term
debt will grow, and future refundlngs of maturing issues will have
to be undertaken more frequently and In greater amounts. The
situation is comparable to one that might be faced by an Individual
with a mortgage on his home that matured every two or three years —
he would be forced to refinance that mortgage, if he could, each
time it came due, and under whatever conditions might be prevailing
at that time. This, to say the least, would not be a desirable
arrangement. The Congress has in effect put the Treasury in this
same sort of position.
It has been alleged that the removal of the 4-1/4 percent
celling would raise interest rates. We do not believe that this
would be the case. The inflationary aspects of debt management
policy under the present ceiling could raise increasing apprehension
both here and abroad as to the future value of the dollar. Nothing
contributes so strongly to forcing interest rates upward as fear
of inflation. Those investors who want to invest in fixed-dollar
obligations — rather than in stocks — will demand higher interest
rates to compensate for their expectation of a shrinking purchasing
power of the future repayments of principal and Interest.
The refusal of Congress to act In this area — despite the
clearcut and pressing need for action — is in effect a renewal
of the old conflict between the advocates of soft money and pegged
interest rates versus those who stand solidly for sound money and
flexible interest rates. The Treasury Is dedicated to the
proposition
that sound moneyprogram
is the must
firm be
foundation
effective anti-inflationary
based. on which an

62
- 8The softest kind of money is, of course, printing press money such as the Continental currency of the Revolutionary War days and
the "greenbacks" of the Civil War. No one today is an outright
advocate of printing press money. But there are many who advocate
what is in essence the same thing. These people believe that the
Federal Reserve System should return to the discredited and highly
inflationary practice of supporting the prices of Government bonds to keep interest rates down — in the same way that was done during
and after World War II. Every dollar that the Federal Reserve puts
out in this way is a high-powered dollar, providing the basis for
a $6 growth in the money supply. Such action would spawn the very
inflation that ultimately shoots interest rates through the ceiling.
Fear of inflation discourages investors from buying bonds; it
encourages borrowers to seek credit. Thus, the demand for money
rises and the supply subsides. Interest rates go up.
Consequently, removal of the 4-1/4 percent ceiling on new
issues of long-term Treasury bonds, by permitting the Treasury
to manage the debt in the least Inflationary way, would actually
work for lower — .not higher — interest rates.
Today, the American people must make a decision. They can
choose artifieally low interest rates created by soft money, and
accept the inflation that results. The other choice, which I trust
they will adopt, is to support flexible interest rates, and thus
fight inflation. The latter course will lead to healthy, longlasting, and rewarding growth.

oOo

m E * S I A. P. ggwsrinsm, Tuegday, Jawwry 19, lg60,

A -73;

Ihe Treasury Department aitnounesd last evening that the tenders for two seritt of
Treasury bills, one serine to be ar? additional lsst_s of the bills datsd October 22,
1?59, and tb© other series to be datud January 21, 1^60, wiiiefe wsrs affarsd on January i4, wars opened at the Federal Mommrwm Basks on January 1$. Tenders ssrs Invited i
for fl,OOQ,O00,0OO, or thereabouts, of 91-dfiy bills and for #400,000,000, or there*^
of 182-day bills, Tbs stalls ot tkm two ssriss are as follows t
HANBE OF ACCSFKD

£l-day f rsasury bills

CGumxrxvs BH»:

Approx7l|iiT.
Frica
Annual gate

High

k.tm$
k.hSU
k.m$xf

98*886

Avsrags

182-day Treasury bills
satnrinfi

Trim

k.m*
rt.«o*/
9i.m*
9i*m

^ H ^ L f f
Anraal Sals

k.m$
k.m$i/

txcsptisi o m totnimr ot f2h9000
percent of the a^otmt of $X«day bills bid for at the low pries
$U psrcent of tlis amount of l82-d&y bills bid for at ths low price was accepted

TOT At

TEstaos kfftim

FOR

ACCSRSD B I

Matriefc

agpll*! for

Boston
law fork
ffelladslphis
ClsfiFsland
Ristasond
Atlanta
Chicago
St. tails
Minneapolis
Kansas City
Dallas
San Fraiseiseo

I 33,763,00G
l,363,ro,Gtt
32,712,000
43,073,000
15,080,000
22,701,000
182,51*7,000
30,372,000
it ,195,000
50,328,000
22,337,000

tOTatS

#1,871,^4,000

immAt wmimn msmittB.
Accgptsd

20,833,00©
64l,536,OO0
17,162,000
28,583,000
13,617,000
19,335,000
105,434,Q0O
2i*,570,000
9,772,000
36,578,000
21,437,000
61,830,000
11,000,687,90(3^/

I 4,711,000
704,552,090
7,394,000
18,5^6,000
6,088,000
5,765,000
68,348,0OO
15,166,000
4,333,000
8,710,000
7,402,000
36,482,000

I 4,606,OO0
285,126,000
2,394,000
H,996#008
5,038,000
4,516,000
32,944,000
10,156,0»
2,832,000
8,143,000
6,858,000

1887,499,000

ftiOO, 141,080^

b/ Inelnds* 1186,022,000 mmoppstitivs tsndsrs ascsptsd at tha swags jariss mt 9&M
of Iseludss 180,622,000 ©©mo®petitiva tasdsrs accepted at th« avsraga pries af ®7.©4l
* krmrmto rats on a mompon issus cqaisalsst yiald basis is 4*56$ for tas 91-day bill!
and 4*86$ for thm 182-day bills. Interest ratss on bills are quoted on tha b**ii
of bank diseottiii, with thsir Issftb is actual mmhmr of days rslated t® a 360-daj
ysar. In contract, yields on asvtlfisatss, astss, and bonce ars oosjputsd on th*
basis of iisfcarsst on the investment, with the mmbmr of days regaining in a sssi*
animal interest parent period related to tfes actual mmhmr of days in tfes ps*i**i
and with sssdarssial eostpoandlng if mors tban one ©©upon period is iavolvad*

*ph U)XU-

TREASURY DEPARTMENT
WASHINGTON. D.C
RELEASE A. M. NEWSPAPERS, Tuesday, January 19, I960.

A-739

The Treasury Department announced last evening that the tenders for two series of
Treasury bills, one series to be an additional issue of the bills dated October 22,
1959, and the other series to be dated January 21, I960, which were offered on January 14, were opened at the Federal Reserve Banks on January 18. Tenders were invited
for 11,000,000,000, 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?

High
Low
Average

91-day Treasury bills
maturing April 21, I960
Approx. Equiv.
Price
Annual Rate

182-day Treasury bills
maturing July 21, I960
Approx. Equiv.
Price
Annual Rate

98.886
98.875
98.879

97.650a/
4.6482
97.636"^
97.641

4*4072
4.4512
4.436^ Xf

4.676*
4.6652 Xf

a/ Excepting one tender of $24,000
?9 percent of the amount of 91-day bills bid for at the low price was accepted
54 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 t
District

Applied For

Accepted

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

$ 33,763,000
1,363,199,000
32,712,000
43,073,000
15,080,000
22,701,000
182,547,000
30,372,000
12,195,000
50,328,000
22,337,000
70,097,000
$1,878,404,000

20,833,000
641,536,000
17,162,000
28,583,000
13,617,000
19,335,000
io5,43i4,ooo
24,570,000
9,772,000
36,578,000
21,li37,000
61,830.000
$1,000,687,000b/

TOTALS

t Applied For
$ 4,711,000
704,552,000
7,394,000
18,548,000
6,088,000
5,765,000
68,348,000
15,166,000
4,333,000
8,710,000
7,402,000
36,482,000
$887,499,000

Accepted
$ 4,606,000
285,126,000
2,394,000
11,996,000
5,038,000
4,516,000
32,944,000
10,156,000
2,832,000
8,lli3,000
6,858,000
25,532,000
$li00,l4l,000c/

hf Includes $286,022,000 noncompetitive tenders accepted at the average price of 98
g/ Includes $80,622,000 noncompetitive tenders accepted at the average price of 97.641
if Average rate on a coupon issue equivalent yield basis is 4*562 for the 91-day bills
and 4.862 tor the 182-day bills. Interest rates on bills are quoted on the basis
of bank discount, with their length in actual number of days related to a 360-day
year. In contrast, yields on certificates, notes, and bonds are computed on the
basis of interest on the investment, with the number of days remaining in a semiannual interest payment period related to the actual number of days in the period,
and with semiannual compounding if more than one coupon period is involved.

6 c.
- 9 We are indeed fortunate, as Americans, to live In a Nation rieh
with natural resources, a highly efficient labor force and production
system, and managerial talent and initiative. We also live in a
community of free nations that, working together, can move forward
in the drive to improve living standards for all freedom-loving
people. The 1950fs were years of prosperity and progress, and the
decade of the 1960fs can be an even more rewarding period. But only
if we clearly identify the problems that confront us — individually,
as a Nation, and as a community of nations — and only if we meet
those problems squarely and responsibly, relying upon our native
common sense and the hard lessons that experience both here and
abroad has taugtet us. That is the ehallsnge to all of us.

oOo

- 8 -

and other money market instruments is likely to be especially severe,
not to mention the inflationary implications of piling up very
short-term securities which are the next thing to money. On the
other hand, to the extent we reach out to the 4- to 5-year range, we
run the danger of an indirect but nevertheless very strong impact
on capital markets, and particularly on the mortgage market. Clearly,
the present ceiling, by the distortions it creates, operates to make
interest rates higher than they need t© be generally across the
maturity spectrum.
That is the dilemma. The answer lies, of course, with the
Congress, and you can be assured that the Administration will continue
to press for removal of the interest-rate ceiling with all the vigor
and energy that it can command.
Given the tools, by removal of the ceiling, we in the Treasury
believe the situation is manageable. There will always be problems
but they are not of the magnitude that many envisage. The debt
maturing within one year, $80 billion, is not too far out of line
with the needs of the economy for liquidity instruments. If the
debt up to 1 year were reduced $5 to $10 billion, we would feel more
comfortable. However, the debt under 1 year surely should not be
permitted to increase.
Our real problem is in the 1- to 5-year area where $62 billion
are outstanding. If, chiefly by the device of advance refunding, we
could offset each year the erosion of maturity caused by the lapse of
time, and over a period of several years, lift something of the
magnitude of $20 billion out of the 1- to 5-year area and spread that
out over the rest of the maturity spectrum, we would be reasonably
content with the resulting maturity configuration.
The E and H savings bond picture looked pretty grim last summer whej
Congress was debating whether to lift the old interest rate ceiling of
Z-l/k<f>. Sales decreased and redemptions increased with the result
that total outstanding declined about $300 million from March to
October. Beginning in November there was a turn for the better* as you
know, and at the year-end net investment in E and H bonds was only
$30 million below the figure a year earlier. Small denominations and
payroll savings are going quite well but the sales and redemptions of
larger denominations have been affected by the competition of the
Magic 5!s and other high-yielding investments.
The increased interest of your customers in marketables, the
exchange of P's and G's for 4-3A# notes, and the newly-offered
privilege given the holders of Series E, P and J to exchange for
H bonds, have combined to put a considerable burden of work on the
banks In reeent months. We regret this but we feel that we cannot
discharge our responsibility in a trying period and do otherwise.

- 7 -

Q-r

For example, the evidence is strong that the necessarily heavy
reliance on short-term borrowing has contributed significantly to
pushing short-term interest rates to the highest levels since the
1920fs. This has had an almost immediate and substantial impact on
the cost of carrying the public debt, since $80 billion of our
securities mature within one year and must be refinanced at the
higher short-term rates. Moreover, heavy Treasury short-term borrowing
is bound to reduce the availability and increase the cost of credit to
other short-term borrowers, such as consumers and businesses, large
and small.
Some of those who opposed removal of the ceiling last summer
erroneously argued that any resultant Treasury borrowing on long-term
bonds would tend to reduce the availability of credit for home
building and also contribute to higher rates on real estate mortgages
We told these people that, if and when the ceiling is removed, we
would have no intention of flooding the market with long-term
securities. Our new issues for eash would be relatively modest in
amount and most of our debt lengthening would be effected by refunding
outstanding bonds — which were originally long-term and are still
held by long-term investors — a number of years in advance of their
final maturity. This technique, of "advance refunding," would avoid
the impact on capital markets that arises from Treasury sales of
long-term securities for cash or in exchange for maturing issues, in
which ease the character of ownership necessarily must be shifted.
Paradoxically, the very result feared by these people may come to
pass unless the ceiling is removed — 4i fact, an important part of it
has already happened. It is obvious that the Treasury cannot confine
all of its financing to very short-term issues in the one year area;
the least that we can do is to place some securities in the 4- to
5-year maturity range, thus achieving a modest amount of debt
lengthening and also helping to avoid the inflationary pressures
generated by large-scale reliance on very short-term securities. But
experience with the 5$ note issued in October — the so-called
"Magic 5 T s M — demonstrates clearly that individual investors will
respond eagerly to such Issues at the rates which we are forced to
pay; a large portion of the funds they use to buy these securities
would represent withdrawals from savings accounts in banks and savings
and loan associations. As a consequence, the impact on the mortgage
market of such withdrawals is much more severe than if the 4-l/*$
ceiling were removed and the Treasury were able to pursue advanee
refunding and a moderate amount of long-term financing for cash. Such
issues of longer term tend to find lodgement with private and public
pension funds, foundations, and similar institutions which typically
are not purchasers of mortgages.
Thus the Treasury, so long as the ceiling remains, is confronted
with
perplexingsecurities,
dilemma. the
If weimpact
confine
ofon
our
borrowing
to
very a
short-term
on all
rates
Treasury
bills

What will the achievement of a $4.2 billion budget surplus mean
to the Nation's financial markets? The better tone in the Government
securities market following the President's announcement of the
surplus provides important evidence that the impact is beneficial.
First of all, the achievement of the surplus helps convince
investors at home and abroad that this Nation is determined to handle
its financial affairs prudently and responsibly, and this in turn
strengthens the desire to Invest in Government securities and other
fixed-dollar obligations.
Secondly, the more appropriate anti-inflationary posture of budget
policy, as reflected in the surplus, helps reduce the burden carried
by monetary policy in promoting growth without inflation.
In the third place, the use of the surplus for debt retirement
increases the flow of genuine savings into financial markets, thus
helping to relieve pressures forcing up interest rates and to increase
the availability of credit in the private sector of the economy.
If my story could end at this point, all of us would no doubt
agree that the Government's financial affairs, certainly far from being
in perfect shape, are at least in better condition than they have been
for a number of years. Unfortunately, however, there is more to the
story. I refer to the fact that a wholly artificial and archaic
restriction is preventing Treasury debt management from providing
appropriate support to anti-inflationary budget and monetary policies.
As you know, this restriction consists of a 4-1/^ percent interest rate
ceiling on new issues of Treasury securities of more than five years'
maturity. In view of the levels of long-term interest rates that have
prevailed since the spring of 1959, the practical effect of this
limitation is to force the Treasury to do all of its borrowing by
issuing securities of five years1 maturity or less, on which no
ceiling applies.
I will not repeat today all of the arguments that we presented to
the Congress last summer in our unsuccessful effort to get the ceiling
removed — arguments which we believe are even more valid now. You
will recall that we especially emphasized the inflationary implications
of flooding the market with very short-term Government securities,
which are only a step away from being money. We also argued that the
ceiling completely prevents the Treasury from achieving any significant
amount of debt extension, which is especially important in view of
the fact that 75 percent of the marketable debt matures within five
years. I would like to emphasize, however, that more than six months
experience in operating under the ceiling — during which time the
Treasury borrowed $47-1/2 billion through cash and refunding
operations — has demonstrated clearly that the ceiling Is militating
against efficient achievement of sound economic objectives.

- 5This Administration — backed by an aroused citizenry — has
succeeded In what appeared a year ago to be an almost impossible task:
the budget for this fiscal year will be balanced and, in fact, a small
surplus of about $200 million now appears likely. But of even greater
importance in the fight against inflation is the $4.2 billion surplus
of revenues over expenditures in the President's budget for fiscal
year 1961.
It is obvious that a budget presented in January i960 for a period
ending some 18 months in the future necessarily involves some broad
Judgments. The actual realization of the $4.2 billion surplus depends
primarily on two things: the continued upward trend of the economy
during the next year and one-half, and Congressional actions with
respect to both expenditures and tax rates. It must be recognized
that some types of expenditure — notably farm priee supports — are
heavily Influenced by nature and by legislative commitments over
which the Administration has little control.
Assuming that current levels of taxation prevail, the budget's
revenue estimates are, in my judgment, on very solid ground. The
President stated in his press conference last week that a basic
assumption underlying the revenue estimates is a gross national
product of about $510 billion for this calendar year. As you know,
a number of forecasters believe that GNP will move even higher.
The projected $4.2 billion surplus will undoubtedly generate
substantial pressures for a reduction in taxes and/or an increase in
expenditures. It is crucially important that these pressures be
withstood. Basic reform in the tax structure is certainly a desirable
objective, but such changes require a broad, carefully considered
approach, rather than the kind of piecemeal corrections. The House
Ways and Means Committee on a bi-partisan basis initiated a careful
study of the income tax structure last year and expects to recommend
legislation next year. The announced objectives are a broadening ©f
the base and a lowering of rates. The Treasury is cooperating
actively with the Committee in this searching reappraisal.
The President's statements in his State of the Union, Budget, and
Economic messages leave no doubt that the Administration is dedicated
to the protection of the $4.2 billion surplus for debt reduction; it
will vigorously oppose any attempts to reduce the surplus, either in
the form of premature tax reductions or increases in appropriations.
But, again, this is not a battle that can be confined to Capitol Hill
and the White House; strong grass roots support — such as the
vigorous expression of public opinion that was so important in
supporting the Administration in the battle of the Budget last year —
is absolutely essential.

- 4rebuild their economies through the Marshall Plan and other measures.
The "dollar gap" has long since been eliminated and we must adjust our
thinking to the changed conditions, when some industrial countries are
accumulating surpluses in the form of gold and dollars.
Whether we like it or not we have become the world's leading
banker — like the typical banker we have lent long and borrowed short.
Short-term claims on us held by foreign countries, largely deposits
in banks and Treasury bills, have built up from under $7 billion
at the end of the war to $17 billion at present. Dollars supplement
gold as the basic international reserves for most of the currencies
of the free world.
This means that foreigners now have an important stake in how we
manage our affairs just as depositors have a stake in how a bank is
operated.
The Administration is taking appropriate steps to try to reduce the
size of the payments deficits, but these steps will continue to be
consistent with our objective of promoting an expanding volume of
world trade. But it should be readily apparent that a basic factor is
the cost-price structure in this country. Our ability to expand our
exports will be impaired if this structure is not competitive.
In a complex economy, producing goods and services at a rate close
to a half-trillion dollars a year, the causes of inflation are bound to
be complex; thus there is no simple cure to the inflation problem.
Moreover, the task of controlling inflation does not start and stop on
the banks of the Potomac; individuals in every walk of life, institution!
of all kinds, labor, management — each and every one of us must handle
his economic and financial affairs on the basis of enlightened selfinterest.
In the last analysis, public opinion will tip the scales. It
seems to me that we see evidence of some progress in this respect.
Surely there is a growing realization that wages cannot, on the
average, increase faster than the overall increase in productivity
without prices following suit, and vice versa. Some of the public
However,
In attempting
tofprotect
the purchasing
power
opinion
polls indicate
this lesson
is beginning
to sink
in. ©f the
dollar, of one thing we*%an be certain: The battle against inflation
will surely be lost if we fail to maintain financial responsibility in
Federal Government activities. By financial responsibility I mean tnrf
things: a surplus in the Federal budget during periods of prope»©us
business activity; monetary discipline, so that excessive expansion m
credit and the money supply is not allowed to tip the scales toward
inflation; and debt management actions that support anti-Inflationary
budget and monetary policies.

71
- 3 The record of the 1950!s was good on two other counts. Except for
the impact of two short-lived recessions — in 1953-5^ and in 1957-58,
employment of the labor force was at a high and rising level.
Moreover, our free enterprise economy snapped back strongly from
recession in 1954 and again in 1958, without the artificial stimulant
of massive Government spending or emergency tax cuts.
The performance of the American economy in the 1950 's was good,
therefore, with respect to growth, maintenance of employment
opportunities, and minimizing recessionary tendencies. But our
performance in the vital task of protecting the value of the dollar of avoiding inflation — cannot be judged as adequate. When the
decade began, the purchasing power of the consumer's dollar was about
59 cents, if figured on the basis of a 1939 dollar of 100 cents. As
i960 begins, the purchasing power of the consumer dollar is estimated
to have fallen almost to 47 cents. This 12-eent cut in the dollar's
value represents an increase of about 24 percent in the consumer price
level over the decade. Nearly two-thirds of this increase in prices
was associated with the Korean episode; a little over one-third has
occurred since 1955.
The lessons of the 1950's seem to me to be very clear, and these
lessons point to the primary challenge of the 1960's. Stated simply:
Inflation is our primary economic danger as we turn the corner into
the new decade. If we do not markedly strengthen our efforts to
protect the value of the dollar, much that we have worked so hard for
in our domestic economy, as well as internationally, may be lost to us.
As President Eisenhower said in his State of the Union Message:
"We must fight inflation as we would a fire that
imperils our home. Only by so doing can we
prevent it from destroying our salaries, savings,
pensions, and insurance, and from gnawing away the
very roots of a free, healthy economy and the
nation's security."
The President also pointed out that, "Inflation's ravages do not
end at the water's edge." He was referring to our international
balance of payments position, whieh has been in deficit in each year
since 19^9, with the exception of 1957. Recently the deficits have
risen to a high level — about $3-1/2 billion in 1958 and approaching
$4 billion in 1959. Large deficits cannot be sustained safely for a
long period of time if we are to have a satisfactory pattern of our
balance of payments and if the dollar is to function properly as the
world's major reserve currency.
This heavy and continuing deficit in our balance of payments
situation is a relatively new phenomenon to us. For many decades
until this last one, we have enjoyed a generally favorable balance of
International payments. Then, largely as a result of wars, it
became
and financial
for a time
reserves
extremely
led: us
favorable
properly— tothe
help
shortages
Industrial
of both
nations
goods

»c
- 2 kind of growth, but growth in the production of goods and services
that people need, want, and are able to buy; nor can we accept growth
that Is frequently interrupted by sharp cyclical movements. Instead
we seek economic progress relatively free from unsustainable upsurges
and long recessionary periods. This is the only kind of growth that
is acceptable in a society in which the basic economic decisions are
made by millions of free individuals rather than by a government
that professes to have the answers to all questions.
Real gross national product — eliminating the effect of price
changes — increased at an annual rate of about 3-1/2 percent during
the 1950's — somewhat higher than our long-term, historical average.
This progress is even more striking when it is realized that during
the 1950's we devoted a relatively large portion of our resources
to national security and also experienced substantial growth in
consumer expenditures for goods and services. Moreover, the labor
force, reflecting the low birth rates of the 1930's, grew at only a
modest rate during the past decade. This also impeded economic
growth and, incidentally, Is one of the reasons for the strong upward
pressures on wage rates during the period.
The 3-1/2 percent rate of growth in real gross national product,
significant as it is, does not by any means tell the whole story of
economic progress during the 1950's. From our point of view,
industrial production provides a much more meaningful measure of
growth, partly because it excludes the low productivity service
Industries which have grown so rapidly in recent years. In this
respect, the significance of a recent major revision of the Federal
Reserve Index of industrial production has been generally overlooked.
The revision indicates that industrial output increased at an average
annual rate of about 5-1/3 percent during the 1950 's, a rate that, if
continued, will double industrial production in 13-1/2 years.
This evidence indicates clearly that we have nothing to be ashamed
of with respect to the rate at which our economy has been growing. We
can and should do better in the 1960's, but we must not allow our
perspective to be blurred by the apparently very high rates of growth
in certain foreign countries.
In judging the significance of the reportedly high rate of growth
in Soviet Russia, for example, we must recognize that, at best, their
statistics may be questionable. We must also recognize that their
postwar growth rate is computed from a much smaller base than in this
country and that they can reap the benefits of past technological
progress in free enterprise countries. Furthermore — and perhaps of
primary importance — we must not forget that their backwardness in
agricultural output provides great scope for increases in percentage
output as labor is released from the farms and moves to the factories.

73
TREASURY DEPARTMENT
Washington
HOLD FOR RELEASE ON DELIVERY
REMARKS BY JULIAN B. BAIRD, UNDER SECRETARY OF
THE TREASURY, AT THE NATIONAL CREDIT CONFERENCE
OF THE AMERICAN BANKERS ASSOCIATION, LASALLE
HOTEL, CHICAGO, ILLINOIS, FRIDAY, JANUARY 22,
I960, at 2:00 P.M., CST.
FINANCING YOUR GOVERNMENT
The 1960's have dawned on a note of strong optimism. I have no
intention of adding another business forecast to the multitude that
have already seen the light of day — one more forecast miglit be the
marginal straw to break the camel's back; but I do endorse the general
view that i960 promises to be a very prosperous year.
We still live in a world of international tensions. We can hope
that the somewhat better atmosphere of the past several months marks
a genuine improvement in international relations, but we can ill
afford to relax our defensive posture so long as the enemies of
freedom fail to support their promises with concrete actions'. The
cold war, in one form or another, may be with us for a long time.
But it is not my intention today to dwell at length on international political matters, except to emphasize that the maintenance
of national security, as an adjunct to our efforts to achieve a
genuine and lasting peace, is our first major task. Instead, I shall
discuss some of the problems that confront us on the economic front.
Actually, our objectives of attaining a lasting peace and of maintaining
a healthy, growing domestic economy are inseparably related; we
cannot continue to serve effectively as a leader in the free world
unless our domestic economy is strong.
Our economic problems center around the necessity for maintaining
a high and sustained rate of economic growth; fostering conditions that
will provide maximum employment opportunities for those willing, able,
and seeking to work; and maintaining reasonable stability in the price
level.
A brief survey of the decade just ended should provide us with
important clues as to the shape of the problems we may face in the
1960's. I submit that our record in the 1950's with respect to two of
our important goals — growth and employment — was quite satisfactory;
in fact, much more so than is generally appreciated. In assessing the
record with respect to economic growth, we must realize that our goal
A-740
is expansion at a sustainable pace. We do not believe in just any

74
TREASURY DEPARTMENT
Washington
HOLD FOR RELEASE ON DELIVER?
REMARKS BY JULIAN B. BAIRD, UNDER SECRETARY OF
THE TREASURY, AT THE NATIONAL CREDIT CONFERENCE
OF THE AMERICAN BANKERS ASSOCIATION, LASALLE
HOTEL, CHICAGO, ILLINOIS, FRIDAY, JANUARY 22,
I960, at 2:00 P.M., CST.
FINANCING YOUR GOVERNMENT
The 1960's have dawned on a note of strong optimism. I have no
intention of adding another business forecast to the multitude that
have already seen the light of day — one more forecast might be the
marginal straw to break the camel's back; but I do endorse the general
view that i960 promises to be a very prosperous year.
We still live in a world of international tensions. We can hope
that the somewhat better atmosphere of the past several months marks
a genuine Improvement in international relations, but we can ill
afford to relax our defensive posture so long as the enemies of
freedom fail to support their promises with concrete actions. The
cold war, in one form or another, may be with us for a long time.
But It Is not my intention today to dwell at length on international political matters, except to emphasize that the maintenance
of national security, as an adjunct to our efforts to achieve a
genuine and lasting peace, is our first major task. Instead, I shall
discuss some of the problems that confront us on the economic front.
Actually, our objectives of attaining a lasting peace and of maintaining
a healthy, growing domestic economy are inseparably related; we
cannot continue to serve effectively as a leader in the free world
unless our domestic economy is strong.
Our economic problems center around the necessity for maintaining
a high and sustained rate of economic growth; fostering conditions that
will provide maximum employment opportunities for those willing, able,
and seeking to work; and maintaining reasonable stability in the price
level.
A brief survey of the decade just ended should provide us with
Important clues as to the shape of the problems we may face In the
1960's. I submit that our record in the 1950's with respect to two of
our Important goals — growth and employment — was quite satisfactory;
in fact, much more so than is generally appreciated. In assessing the
record with respect to economic growth, we must realize that our goal
A-7^0
is expansion at a sustainable pace. We do not believe In just any

- 2 kind of growth, but growth in the production of goods and services
that people need, want, and are able to buy; nor can we accept growth
that is frequently interrupted by sharp cyclical movements. Instead
we seek economic progress relatively free from unsustainable upsurges
and long recessionary periods. This is the only kind of growth that
Is acceptable in a society in which the basic economic decisions are
made by millions of free individuals rather than by a government
that professes to have the answers to all questions.
Real gross national product — eliminating the effect of price
changes — increased at an annual rate of about 3-1/2 percent during
the 1950's — somewhat higher than our long-term, historical average.
This progress Is even more striking when it is realized that during
the 1950's we devoted a relatively large portion of our resources
to national security and also experienced substantial growth in
consumer expenditures for goods and services. Moreover, the labor
force, reflecting the low birth rates of the 1930's, grew at only a
modest rate during the past decade. This also impeded economic
growth and, incidentally, Is one of the reasons for the strong upward
pressures on wage rates during the period.
The 3-1/2 percent rate of growth in real gross national product,
significant as it is, does not by any means tell the whole story of
economic progress during the 1950fs. From our point of view,
industrial production provides a much more meaningful measure of
growth, partly because it excludes the low productivity service
industries which have grown so rapidly in recent years. In this
respect, the significance of a recent major revision of the Federal
Reserve Index of industrial production has been generally overlooked.
The revision indicates that industrial output increased at an average
annual rate of about 5-1/3 percent during the 1950's, a rate that, if
continued, will double industrial production in 13-1/2 years.
This evidence indicates clearly that we have nothing to be ashamed
of with respect to the rate at which our economy has been growing. We
can and should do better In the 196o*s, but we must not allow our
perspective to be blurred by the apparently very high rates of growth
in certain foreign countries.
In judging the significance of the reportedly high rate of growth
in Soviet Russia, for example, we must recognize that, at best, their
statistics may be questionable. We must also recognize that their
postwar growth rate is computed from a much smaller base than In this
country and that they can reap the benefits of past technological
progress in free enterprise countries. Furthermore — and perhaps of
primary importance — we must not forget that their backwardness in
agricultural output provides great scope for increases in percentage
output as labor is released from the farms and moves to the factories.

- 3 The record of the 1950fs was good on two other counts. Except for
the Impact of two short-lived recessions — in 1953-5^ and in 1957-58,
employment of the labor force was at a high and rising level.
Moreover, our free enterprise economy snapped back strongly from
recession in 195^ and again in 1958, without the artificial stimulant
of massive Government spending or emergency tax cuts.
The performance of the American economy in the 1950's was good,
therefore, with respect to growth, maintenance of employment
opportunities, and minimizing recessionary tendencies. But our
performance in the vital task of protecting the value of the dollar —
of avoiding inflation — cannot be judged as adequate. When the
decade began, the purchasing power of the consumer's dollar was about
59 cents, if figured on the basis of a 1939 dollar of 100 cents. As
i960 begins, the purchasing power of the consumer dollar is estimated
to have fallen almost to 47 cents. This 12-cent cut in the dollar's
value represents an increase of about 24 percent in the consumer price
level over the decade. Nearly two-thirds of this increase in prices
was associated with the Korean episode; a little over one-third has
occurred since 1955.
The lessons of the 1950's seem to me to be very clear, and these
lessons point to the primary challenge of the 1960's. Stated simply:
Inflation is our primary economic danger as we turn the corner into
the new decade. If we do not markedly strengthen our efforts to
protect the value of the dollar, much that we have worked so hard for
in our domestic economy, as well as internationally, may be lost to us.
As President Eisenhower said in his State of the Union Message:
"We must fight inflation as we would a fire that
imperils our home. Only by so doing can we
prevent it from destroying our salaries, savings,
pensions, and insurance, and from gnawing away the
very roots of a free, healthy economy and the
nation's security."
The President also pointed out that, "Inflation's ravages do not
end at the water's edge." He was referring to our international
balance of payments position, which has been in deficit in each year
since 1949, with the exception of 1957. Recently the deficits have
risen to a high level —> about $3-1/2 billion in 1958 and approaching
$4 billion in 1959. Large deficits cannot be sustained safely for a
long period of time if we are to have a satisfactory pattern of our
balance of payments and if the dollar is to function properly as the
world's major reserve currency.
This heavy and continuing deficit in our balance of payments
situation is a relatively new phenomenon to us. For many decades
until this last one, we have enjoyed a generally favorable balance of
International payments. Then, largely as a result of wars, it
became
and financial
for a time
reserves
extremely
led us
favorable
properly— tothe
help
shortages
industrial
of both
nations
goods

- 4rebuild their economies through the Marshall Plan and other measures.
The "dollar gap" has long since been eliminated and we must adjust our
thinking to the changed conditions, when some industrial countries are
accumulating surpluses in the form of gold and dollars.
Whether we like it or not we have become the world's leading
banker — like the typical banker we have lent long and borrowed short,
Short-term claims on us held by foreign countries, largely deposits
in banks and Treasury bills, have built up from under $7 billion
at the end of the war to $17 billion at present. Dollars supplement
gold as the basic international reserves for most of the currencies
of the free world.
This means that foreigners now have an important stake in how we
manage our affairs just as depositors have a stake in how a bank is
operated.
The Administration is taking appropriate steps to try to reduce thi
size of the payments deficits, but these steps will continue to be
consistent with our objective of promoting an expanding volume of
world trade. But it should be readily apparent that a basic factor is
the cost-price structure in this country. Our ability to expand our
exports will be impaired if this structure is not competitive.
In a complex economy, producing goods and services at a rate close
to a half-trillion dollars a year, the causes of inflation are bound to
be complex; thus there is no simple cure to the inflation problem.
Moreover, the task of controlling inflation does not start and stop on
the banks of the Potomac; individuals in every walk of life, institution
of all kinds, labor, management — each and every one of us must handle
his economic and financial affairs on the basis of enlightened selfinterest.
In the last analysis, public opinion will tip the scales. It
seems to me that we see evidence of some progress In this respect.
Surely there is a growing realization that wages cannot, on the
average, increase faster than the overall Increase In productivity
without prices following suit, and vice versa. Some of the public
opinion polls indicate this lesson is beginning to sink in.
However, in attempting to protect the purchasing power of the
dollar*of one thing we can be certain: The battle against inflation
will surely be lost If we fall to maintain financial responsibility in
Federal Government activities. By financial responsibility I mean threi
things: a surplus in the Federal budget during periods of properous
business activity; monetary discipline, so that excessive expansion in
credit and the money supply is not allowed to tip the scales toward
inflation; and debt management actions that support anti-inflationary
budget and monetary policies.

- 5-

7P
• y

This Administration — backed by an aroused citizenry — has
succeeded In what appeared a year ago to be an almost impossible task:
the budget for this fiscal year will be balanced and, in fact, a small
surplus of about $200 million now appears likely. But of even greater
importance in the fight against inflation is the $4.2 billion surplus
of revenues over expenditures in the President's budget for fiscal
year 1961.
It Is obvious that a budget presented in January i960 for a period
ending some 18 months in the future necessarily involves some broad
judgments. The actual realization of the $4.2 billion surplus depends
primarily on two things: the continued upward trend of the economy
during the next year and one-half, and Congressional actions with
respect to both expenditures and tax rates. It must be recognized
that some types of expenditure — notably farm price supports «— are
heavily Influenced by nature and by legislative commitments over
which the Administration has little control.
Assuming that current levels of taxation prevail, the budget's
revenue estimates are, in my judgment, on very solid ground. The
President stated in his press conference last week that a basic
assumption underlying the revenue estimates is a gross national
product of about $510 billion for this calendar year. As you know,
a number of forecasters believe that GNP will move even higher.
The projected $4.2 billion surplus will undoubtedly generate
substantial pressures for a reduction in taxes and/or an increase in
expenditures. It is crucially important that these pressures be
withstood. Basic reform in the tax structure Is certainly a desirable
objective, but such changes require a broad, carefully considered
approach, rather than the kind of piecemeal corrections. The House
Ways and Means Committee on a bi-partisan basis initiated a careful
study of the income tax structure last year and expects to recommend
legislation next year. The announced objectives are a broadening of
the base and a lowering of rates. The Treasury is cooperating
actively with the Committee in this searching reappraisal.
The President's statements In his State of the Union, Budget, and
Economic messages leave no doubt that the Administration Is dedicated
to the protection of the $4.2 billion surplus for debt reduction; It
will vigorously oppose any attempts to reduce the surplus, either in
the form of premature tax reductions or increases in appropriations.
But, again, this is not a battle that can be confined to Capitol Hill
and the White House; strong grass roots support — such as the
vigorous expression of public opinion that was so Important in
supporting the Administration in the battle of the Budget last year —
is absolutely essential.

- 6What will the achievement of a $4.2 billion budget surplus mean
to the Nation's financial markets? The better tone in the Government
securities market following the President's announcement of the
surplus provides important evidence that the impact is beneficial.
First of all, the achievement of the surplus helps convince
investors at home and abroad that this Nation is determined to handle
Its financial affairs prudently and responsibly, and this in turn
strengthens the desire to Invest in Government securities and other
fixed-dollar obligations.
Secondly, the more appropriate antI-inflationary posture of budget
policy, as reflected in the surplus, helps reduce the burden carried
by monetary policy in promoting growth without Inflation.
In the third place, the use of the surplus for debt retirement
increases the flow of genuine savings into financial markets, thus
helping to relieve pressures forcing up interest rates and to increase
the availability of credit in the private sector of the economy.
If my story could end at this point, all of us would no doubt
agree that the Government's financial affairs, certainly far from being
in perfect shape, are at least in better condition than they have been
for a number of years. Unfortunately, however, there is more to the
story. I refer to the fact that a wholly artificial and archaic
restriction is preventing Treasury debt management from providing
appropriate support to anti-inflationary budget and monetary policies.
As you know, this restriction consists of a 4-1/4 percent interest rate
ceiling on new issues of Treasury securities of more than five years'
maturity. In view of the levels of long-term interest rates that have
prevailed since the spring of 1959, the practical effect of this
limitation is to force the Treasury to do all of its borrowing by
issuing securities of five years' maturity or less, on which no
ceiling applies.
I will not repeat today all of the arguments that we presented to
the Congress last summer in our unsuccessful effort to get the ceiling
removed — arguments which we believe are even more valid now. You
will recall that we especially emphasized the inflationary Implications
of flooding the market with very short-term Government securities,
which are only a step away from being money. We also argued that the
celling completely prevents the Treasury from achieving any significant
amount of debt extension, which is especially important in view of
the fact that 75 percent of the marketable debt matures within five
years. I would like to emphasize, however, that more than six months'
experience In operating under the celling — during which time the
Treasury borrowed $47-1/2 billion through cash and refunding
operations — has demonstrated clearly that the celling is militating
against efficient achievement of sound economic objectives.

77
- 7 For example, the evidence is strong that the necessarily heavy
reliance on short-term borrowing has contributed significantly to
pushing short-term interest rates to the highest levels since the
1920's. This has had an almost immediate and substantial impact on
the cost of carrying the public debt, since $80 billion of our
securities mature within one year and must be refinanced at the
higher short-term rates. Moreover, heavy Treasury short-term borrowing
is bound to reduce the availability and increase the cost of credit to
other short-term borrowers, such as consumers and businesses, large
and small.
Some of those who opposed removal of the ceiling last summer
erroneously argued that any resultant Treasury borrowing on long-term
bonds would tend to reduce the availability of credit for home
building and also contribute to higher rates on real estate mortgages
We told these people that, if and when the ceiling is removed, we
would have no intention of flooding the market with long-term
securities. Our new issues for cash would be relatively modest in
amount and most of our debt lengthening would be effected by refunding
outstanding bonds — which were originally long-term and are still
held by long-term Investors — a number of years in advance of their
final maturity. This technique, of "advance refunding," would avoid
the impact on capital markets that arises from Treasury sales of
long-term securities for cash or in exchange for maturing issues, in
which case the character of ownership necessarily must be shifted.
Paradoxically, the very result feared by these people may come to
pass unless the ceiling is removed — ±i fact, an important part of it
has already happened. It is obvious that the Treasury cannot confine
all of its financing to very short-term issues in the one year area;
the least that we can do is to place some securities in the 4- to
5-year maturity range, thus achieving a modest amount of debt
lengthening and also helping to avoid the inflationary pressures
generated by large-scale reliance on very short-term securities. But
experience with the 5% note issued in October — the so-called
"Magic 5 f s" — demonstrates clearly that individual investors will
respond eargerly to such issues at the rates which we are forced to
pay; a large portion of the funds they use to buy these securities
would represent withdrawals from savings accounts In banks and savings
and loan associations. As a consequence, the impact on the mortgage
market of such withdrawals is much more severe than If the 4-1/4$
ceiling were removed and the Treasury were able to pursue advance
refunding and a moderate amount of long-term financing for cash. Such
issues of longer term tend to find lodgement with private and public
pension funds, foundations, and similar Institutions which typically
are not purchasers of mortgages.
Thus the Treasury, so long as the ceiling remains, is confronted
with
very a
short-term
perplexingsecurities,
dilemma. the
If we
Impact
confine
on all
rates
ofon
our
Treasury
borrowing
bills
to

- 8 and other money market Instruments is likely to be especially severe,
not to mention the inflationary implications of piling up very
short-term securities which are the next thing to money. On the
other hand, to the extent we reach out to the 4- to 5-year range, we
run the danger of an indirect but nevertheless very strong impact
on capital markets, and particularly on the mortgage market. Clearly,
the present ceiling, by the distortions it creates, operates to make
Interest rates higher than they need to be generally across the
maturity spectrum.
That is the dilemma. The answer lies, of course, with the
Congress, and you can be assured that the Administration will continue
to press for removal of the interest-rate ceiling with all the vigor
and energy that it can command.
Given the tools, by removal of the celling, we in the Treasury
believe the situation is manageable. There will always be problems
but they are not of the magnitude that many envisage. The debt
maturing within one year, $80 billion, is not too far out of line
with the needs of the economy for liquidity instruments. If the
debt up to 1 year were reduced $5 to $10 billion, we would feel more
comfortable. However, the debt under 1 year surely should not be
permitted to increase.
Our real problem is in the 1- to 5-year area where $62 billion
are outstanding. If, chiefly by the device of advance refunding, we
could offset each year the erosion of maturity caused by the lapse of
time, and over a period of several years, lift something of the
magnitude of $20 billion out of the 1- to 5-year area and spread that
out over the rest of the maturity spectrum, we would be reasonably
content with the resulting maturity configuration.
The E and H savings bond picture looked pretty grim last summer wh
Congress was debating whether to lift the old Interest rate celling of
3-1/4$. Sales decreased and redemptions Increased with the result
that total outstanding declined about $300 million from March to
October. Beginning in November there was a turn for the better* as you
know, and at the year-end net investment in E and H bonds was only
$30 million below the figure a year earlier. Small denominations and
payroll savings are going quite well but the sales and redemptions of
larger denominations have been affected by the competition of the
Magic 5's and other high-yielding investments.
The increased Interest of your customers in marketables, the
exchange of F's and G's for 4-3/4$ notes, and the newly-offered
privilege given the holders of Series E, F and J to exchange for
H bonds, have combined to put a considerable burden of work on the
banks In recent months. We regret this but we feel that we cannot
discharge our responsibility In a trying period and do otherwise.

7ft
. y

- 9 We are indeed fortunate, as Americans, to live in a Nation rich
with natural resources, a highly efficient labor force and production
system, and managerial talent and initiative. We also live in a
community of free nations that, working together, can move forward
in the drive to improve living standards for all freedom-loving
people. The 1950's were years of prosperity and progress, and the
decade of the 1960's can be an even more rewarding period. But only
if we clearly identify the problems that confront us — individually,
as a Nation, and as a community of nations — and only if we meet
those problems squarely and responsibly, relying upon our native
common sense and the hard lessons that experience both here and
abroad has taught us. That is the challenge to all of us.

oOo

m^m^ujmmm.