Full text of Press Releases of the United States Department of the Treasury : Volume 127

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Releases

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JUN 1 51972
TREASURY DEPARTMENT

i
August 1, 1961
FOR IMMEDIATE RELEASE
The Treasury today made public^ the following memoTfrom
Treasury Secretary Douglas Dillon to the Chairman of the
Board of Governors of the Federal Reserve System, the
Chairman of the Federal Deposit Insurance Corporation, ana
the Comptroller of the Currency:

THE SECRETARY OF THE TREASURY
WASHINGTON

_«e__ft__OT_ W :

Chairman, Board- of Governors of the Federal
Reserve System
Chairman, Federal Deposit Insurance tCorporation
^The Comptroller of the Currency *

The present international situation reemphasizes the need for
accelerated emergency planning by American business and"* industry.
Because of the vital importance of the banking system to the -whole
economy of our country, this places a heavy responsibility upon our
financial community to provide for operational continuity of our
banking system in the event of an enemy attack upon the United States.
At the very least, a financial institution must be able to reconstruct its records if the original records are destroyed or unavailable.
It is, therefore, imperative that our banks establish an independent
means of reconstructing their assets and liabilities and their account
relationship with customers, in order to furnish surviving or successor
management with sufficient information to continue operations.
In 1958, the Advisory Committee on Commercial Bank Preparedness
and'the Banking Committee on Emergency Operations distributed to all
commercial banks a comprehensive and practical plan for their guidance.
Since that time, some banks have established definite programs to meet
this urgent national need but many have not taken such action.
It should be obvious that unless positive measures are taken by all
members of the banking commimity to assure adequate records protection,
the entire governmental program for the operational continuity of the
Nation's banking system in the event of attack would be in jeopardy.
Participation by individual banks in the operational continuity
program is, of course, purely voluntary. I believe that the members of
the banking community will meet their responsibility to establish adequate
systems of records protection if they fully understand the need for such
protection.
I therefore recommend that all bank supervisory authorities take
appropriate and prompt actions to ensure that all banks and bank examiners
are fully aware of the importance of adequate preparations.

TREASURY DEPARTMENT
WASHINGTON. D.C.
August 1, 196l
FOR IMMEDIATE RELEASE
The Treasury today made public the following memorandum
from Treasury Secretary Douglas Dillon to the Chairman of the Board
of Governors of the Federal Reserve System, the Chairman of the
Federal Deposit Insurance Corporation, and the Comptroller of the
Currency:
"The present international situation reemphasizes the
need for accelerated emergency planning by American
business and industry. Because of the vital importance
of the banking system to the whole economy of our country,
this places a heavy responsibility upon our financial
community to provide for operational continuity of our
banking system in the event of an enemy attack upon the
United States.
"At the very least, a financial institution must be
able to reconstruct its records if the original records
are destroyed or unavailable. It is, therefore,
imperative that our banks establish an independent means
of reconstructing their assets and liabilities and their
account relationship with customers, in order to furnish
surviving or successor management with sufficient information to continue operations,
"in 1958, the Advisory Committee on Commercial Bank
Preparedness and the Banking Committee on Emergency
Operations distributed to all commercial banks a
comprehensive and practical plan for their guidance.
Since that time, some banks have established definite
programs to meet this urgent national need but many have
not taken such action.
"it should be obvious that unless positive measures
are taken by all members of the banking community to
assure adequate records protection, the entire governmental
program,for the operational continuity of the Nation's
banking system in the event of attack would be in jeopardy.
"Participation by individual banks in the operational
continuity program is, of course, purely voluntary. I
believe that the members of the banking community will meet
their responsibility to establish adequate systems of
records protection if they fully understand the need for
such protection.
"I therefore recommend that all bank supervisory
authorities
appropriate
and prompt
actions
toof
ensure
-. n^n
D-19that
importance^of
-—"" all banks
^ take
adequate
and
bankpreparations."
examiners
0O0
are fully
aware
the

- 3 ^B__fc__2__E__^B>
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 subj

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 inter
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 whic

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

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

of discount at which bills issued hereunder are sold is not considered to accru

until such bills are sold, redeemed or otherwise disposed of, and such bills ar

cluded from consideration as capital assets. Accordingly, the owner of Treasury

bills (other than life insurance companies) issued hereunder need include in hi

income tax return only the difference between the price paid for such bills, wh

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

upon sale or redemption at maturity during the taxable year for which the retur
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-

3_3___S______&

4
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 invest
ment securities. Tenders from others must be accompanied by payment of 2 percent of
the face amount of Treasury bills applied for, unless the tenders are accompanied by
an express guaranty of payment by an incorporated bank or trust company.
Immediately after the closing hour, tenders will be opened at the Federal 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 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 May 11, 1961 , ( 91 days remaining until maturity date on

5BEJ
November 9, 1961

-55T

) and noncompetitive tenders for $ 100,000 or less for the

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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

August 10. 1961

, in cash or

other immediately available funds or in a like face amount of Treasury bills mat
ing

August 10, 1961

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
other disposition of the bills, does not have any e___apt__3_k-, as such, and loss

TREASURY DEPARTMENT
Washington
t IMMEDIATE RELEASE

3__«_mK_Q_

August 2, 1961

TREASURY'S WEEKLY BILL OFFERING
The Treasury Department, by this public notice, invites tenders for two series
of Treasury bills to the aggregate amount of $ 1,700,000,000 , or thereabouts, for
cash and in exchange for Treasury bills maturing

August 10, 1961

, in the amount

m
of $ 1,700,867,000 , as follows:
&
91 -day bills (to maturity date) to be issued August 10, 1961
,
in the amount of $ 1,100,000,000 , or thereabouts, represent-

m—
ing an additional amount of bills dated

May 11, 1961

,

am
and to mature

November 9, 1961 , originally issued in the
^
(including $100,104,000 issued June 14, 196
amount of $ 600,476,000 /, the additional and original bills

~_*£
to be freely interchangeable.
182 -day bills, for $ 600,000,000 , or thereabouts, to be dated

$a_*

$a_*
August 10, 1961

$__$_

, and to mature

February 8, 1962

.

>p_5c

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 amounl
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 (maturit;
value)•
Tenders will be received at Federal Reserve Banks and Branches up to the closini
Daylight Saving
hour, one-thirty o'clock p.m., Eastern/adacdat—k time, Monday, August 7, 1961
m
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

. •' __ / <f 'L-

TREASURY )EPARTMENT
WASHINGTON, D.C.
August 2,196l
FOR IMMEDIATE RELEASE
TREASURY»S WEEKLY BILL OFFERING
The Treasury Department, by this public notice, invites tenders
for two series of Treasury bills to the aggregate amount of
$1,700,000,000, or thereabouts, for cash and in exchange for
Treasury bills maturing August 10, 196l, in the amount of
$1,700,867,000, as follows:
91-day bills (to maturity date) to be issued August 10, 1961, in
the amount of $1,100,000,000, or thereabouts, representing an
additional amount of bills dated May 11, 1961, and to mature
November 9, 1961, originally issued in the amount of $600,476,000
(including $100,104,000 issued June 14, 196l), the additional and
original bills to be freely interchangeable.
182-day bills, for $600,000,000, or thereabouts, to be dated
August 10, 1961, and to mature February 8, 1962.
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 Daylight
Saving time, Monday, August 7, 19ol.
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
D-192
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
May 11, 1961,
(91-days remaining until maturity date on
November 9, 1961) 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 August 10, 196l,
in cash or other immediately available funds or in a like face
amount of Treasury bills maturing August 10, 196l. Cash and
exchange tenders will receive equal treatment. Cash adjustments
will be made for differences between the par value of maturing
bills accepted in exchange and the issue price of the new bills.
The income derived from Treasury bills, whether interest or
gain from the sale or other disposition of the bills, does not have
any exemption, as such, and loss from the sale or other disposition
of Treasury bills does not have any special treatment, as such,
under the Internal Revenue Code of 1954. The bills are subject to
estate, inheritance, gift or other excise taxes, whether Federal or
State, but are exempt from all taxation now or hereafter imposed on
the principal or interest thereof by any State, or any of the
possessions of the United States, or by any local taxing authority.
For purposes of taxation the amount of discount at which Treasury
bills are originally sold by the United States is considered to be
interest. Under Sections 454 (b) and 1221 (5) of the Internal
Revenue Code of 1954 the amount of discount at which bills issued
hereunder are sold is not considered to accrue until such bills are
sold, redeemed or otherwise disposed of, and such bills are excluded
from consideration as capital assets. Accordingly, the owner of
Treasury bills (other than life insurance companies) issued hereunder
need include in his income tax return only the difference between
the price paid for such bills, whether on original issue or on
subsequent purchase, and the amount actually received either upon
sale or redemption at maturity during the taxable year for which the
0O0
return is made, as ordinary gain or loss.
Treasury Department Circular No. 4l8, Revised, and this notice,
prescribe
the terms
of
bills
and
thefrom
conditions
Federal
of theirReserve
issue.
Bank
Copies
orthe
Branch.
of Treasury
the circular
may
begovern
obtained
any

THE SECRETARY OF THE TREASURY
WASHINGTON

August 2, 1961
Dear Wilbur:
In light of the President's Address of July 25 to
the Nation on the critical international situation, the
steps to be taken to taaet it, and their budgetary impact9
I feel it is appropriate for me to give you my views on
the tax legislation pending before your Committee under
existing and presently foreseeable circumstances*
Since suggestions have been made that the new situation arising from additional defense preparations might
affect the need for or feasibility of considering
incentive measures, I wish to give you as realistic an
evaluation as I can of the budgetary framework and the
continuing need for the tax changes recommended. We have
carefully reviewed the current and prospective budget
situation as altered by the requirements outlined by the
President for additional defense spending. This review
shows that, in the absence of a further worsening of the
international situation such as to require substantial
additions to our defense expenditures, the budget can be
balanced for the fiscal year 1963 without any increase in
taxes • In view of the recovery and general economic outlook, our current estimates indicate that revenue from
existing taxes should be adequate to fulfill all our present
cox__?dtments •
As you know, the investment credit was recommended
primarily as a vitally needed measure to increase our
economic growth and productivity and to strengthen our
competitive position in world markets, botli immediately
and in the future. An important aspect of its- potential
benefits for our international position is its reinforcement of the recent Improvement in the balance of payments•
The investment credit is not recommended as a means of
tax reduction for its own sake but as a much needed incentive
and aid to the modernisation of our industrial equipment>

-

4_

-

thereby serving the broad interests of the Nation. The
great majority of the witnesses at the Hearings of your
Committee testified to the importance of speeding up the
aodernissation of our industrial equipment. The effectiveness
of investment incentives in fostering capital formation has
been recognised by many of the leading industrial nations
of tha free world whose experience demonstrates that a substantial contribution may be made in this way to tha healthy
growth of the economy.
The need for an investment credit to increase our
•fficiency and productivity is as great if not greater now
than when it was originally recommended earlier this year.
The importance of vigorous growth of our producing capacity
has been enhanced hy tha additional demands imposed by the
world situation. I have noted with concern recent reports
that domestic tool orders by American industry are lagging
in part because of uncertainty^regarding the timing of the
enactment of tha investment credit. Indeed, the press reports
that while orders by foreign producers for machine tools in
this country are rising, domestic demand has leveled off and
seems to be static. This is an additional compelling
argument for enactment of this legislation during the present
session of the Congress.
For all these reasons I strongly urge your Committee
to proceed as promptly as possible with the final consideration and adoption of the tax bill, including tha investment
incentive provisions already tentatively approved.
Tha President's tax program as presented to Congress in
May involved a balance between tha revenue cost of tha invest*
aaant credit and offsetting revenue increases from aseasures
that would improve and strengthen the tax system. The
changes since that time in the international situation and
tha consequent budget adjustments make it even asore important
that tha set of tax proposals now being considered by your
Committee be balanced with respect to revenue consequences.
Tha tentative decisions on these proposals recently announced
fey your Committee would involve a net revenue reduction of
about $500 s&llion. I would urge that your final consideration
of this legislation provide an approximate balance in over-all

- 3 revenue effect, preferably through the addition of further
revenue raising measures implementing the President's
recamondations on closing loopholes including a possible
revision of tha special tax provisions relating to mutual
savings b£_jtt3 and savings and loan associations, or if need
be through a small reduction in the 8 percent level of tha
investment credit, or perhaps through sotaa combination of
both.
The President has authorised ma to say that enactment
&€ tlds session of tax legislation on the investment credit,
offset by corresponding revenue gains from the closing of
loopholes in our tax structure, is essential in the
strengthening of our nation to meet the tasks that lie
With beat wishes,
Sincerely,
signed
Douglas TV 1 i •;:_!

Douglas Dillon

Tha Honorable Wilbur D. Mills
Chairman, Ca.o_alttee on Ways and Keans
U. 5* House of Representatives
Washington 25, D. C.

measure!
t_-^rfe_r^ wi\ ey'cl>aT^^

;

There

will also be intensive discussions of the problems o ^integration
and commodity price stablization which are of interest to all the
nations represented at the conference.
We are hopeful that we can create at this conference the
inter-American machinery necessary to carry the ''Alliance for
Progress'5 forward on a basis of dedicated and imaginative cooperative effort. If we succeed, we shall have crossed a major
frontier

and can look forward to a

new

J&ra of giqaiik economic and spiritual growth for the Americas.

0O0

11
_ __

- 2 energies and resources to their own social and economic development. They will find in us a warm, sympathetic, and ready response
to their problems, coupled with a firm determination to work
closely and continuously with them in accelerating economic progress and extending social justice throughout the Americas.
The basic and overriding aim of the meeting at Punta del
Este is to begin the massive planning effort which will be at
the heart of President Kennedy's "Alliance for Progress". It will
not be the purpose of this meeting to allocate funds or to accept
or to reject development projects proposed by any country. Our
purpose will be to start the planning process so indispensable to

growth and progress.
We hope that we can agree in Punta del Este on broad, guiding
economic and social principles, including sf&p^f self-help

DRAFT

August

2, 1961

STATEMENT OF THE HONORABLE DOUGLAS DILLON
SECRETARY OF THE TREASURY
UPON DEPARTURE FROM WASHINGTON ON
THURSDAY, AUGUST 3, 1961
FOR THE MINISTERIAL MEETING OF THE INTER-AMERICAN
ECONOMIC AND SOCIAL COUNCIL AT PUNTA DEL ESTE, URUGUAY

In his final instructions to the United States delegation at
the White House yesterday, President Kennedy told us that the hopes
of millions of peoples throughout the Americas rest to a very large
('

extent on the success of our efforts at the meeting of the InterAmerican Economic and Social Council.
As we leave for Punta del Este, we are very conscious of our
heavy responsibility. We are confident that the Delegations from
the other American republics are equally conscious of their
responsibilities to their own peoples.
at
We believe that we shall find/Punta del Este a firm determi
nation among the other delegations to attack the basic causes of
social injustice in their countries, and to apply intensified
i

TREASURY DEPARTMENT
Washington

1Q
__ _/

STATEMENT OF THE HONORABLE DOUGLAS DILLON
SECRETARY OF THE TREASURY
UPON DEPARTURE FROM WASHINGTON ON
THURSDAY, AUGUST 3, 196l
FOR THE MINISTERIAL MEETING OF THE INTER-AMERICAN
ECONOMIC AND SOCIAL COUNCIL AT PUNTA DEL ESTE, URUGUAY
In his final instructions to the United States delegation at
the White House yesterday, President Kennedy told us that the hopes
of millions of peoples throughout the Americas rest to a very large
extent on the success of our efforts at the meeting of the
Inter-American Economic and Social Council.
As we leave for Punta del Este, we are very conscious of our
heavy responsibility. We are confident that the Delegations from the
other American republics are equally conscious of their responsibilities
to their own peoples.
We believe that we shall find at Punta del Este a firm determination among the other delegations to attack the basic causes of
social injustice in their countries, and to apply intensified energies
and resources to their own social and economic development. They
will find in us a warm, sympathetic, and ready response to their
problems, coupled with a firm determination to work closely and
continuously with them in accelerating economic progress and extending
social justice throughout the Americas.
The basic and overriding aim of the meeting at Punta del Este
is to begin the massive planning effort which will be at the heart
of President Kennedy's "Alliance for Progress". It will not be the
purpose of this meeting to allocate funds or to accept or to reject
development projects proposed by any country. Our purpose will be
to start the planning process so indispensable to growth and progress9
We hope that we can agree in Punta del Este on broad, guiding
economic and social principles, including the self-help measures
which are necessary for any successful development plan. There will
also be intensive discussions of the problems of economic integration
and commodity price stabilization which are of interest to all the
nations represented at the conference.
We are hopeful that we can create at this conference the interAmerican machinery necessary to carry the "Alliance for Progress"
forward on a basis of dedicated and imaginative cooperative effort.
If we succeed, we shall have crossed a major frontier and can look
0O0
forward to a new era of economic and spiritual growth for the Americas,
D-193

— —

REMARKS BY STANLEY S. SURREY,
ASSISTANT SECRETARY OF THE TREASURY
BEFORE THE SECTION OF TAXATION
AMERICAN BAR ASSOCIATION
ST. LOUIS, MISSOURI
AUGUST 6, 1961 - 12:00 NOON

14

I welcome this opportunity to appear before old friends
and associates and to discuss matters of mutual interest in
the field of taxation. As a member of the Section for many
years, and as a recent member of your Council, I am fully
aware of both your deep concern respecting tax issues and
your significant competence in tax matters. We do not always
agree with each other -- Committee Chairmen will disagree with
the Council and the Section will disagree with both. But the
record shows a steady striving for ability and objectivity in
the handling of the problems that come before the Section.
The record also shows a steadily developing change in the
character of the problems themselves --a change away from
narrow questions involving particular taxpayers or groups of
taxpayers to issues of broader scope that go to the improvement of our technical tax structure in the interest of the
Nation as a whole. These are important developments, for it
would be a serious loss to waste the resources of this organization, on minor matters and a folly to devote them to special

2 pleading.

We all know that the task of improving our'tax

system can well use the skills and talents of this Section.
We are once again entering a period of change in the
Federal tax system. In recent history the most significant
period was that of World War II when our mass coverage, highrate income tax system took shape. The Korean War period
solidified the shape of that system, giving us in the main
the rate structure we have today. The 1954 Code revision was
essentially confined to the technical level. Its few significant policy changes included a more rapid write-off of
depreciation allowances on new assets, the introduction of
the dividend credit and exclusion, reduced taxes on persons
over 65 receiving pensions and unearned income, and more
liberal personal deductions. But basically the Federal tax
system had settled into the Korean War - 1954 plateau and the
years from 1954 produced hardly any changes. For the most
part, this plateau was marked by a decline of activity in the
tax field by the Treasury Department and an almost complete
absence of governmental research and study in that field.
These factors in turn led to a reduction of contacts between
the universities and the Treasury, with the result being a

-

3

-

--•:•

distinct lessening of tax research in the universities. This
inactivity occurred at a time when there was increasing concern in the business and academic worlds and in Congress that
the structure of the Federal income tax required considerable
reshaping. Hearings held in the Congress in 1955 and again
in 1959, based both times on a compendium of papers specially
addressed to these problems, emphasized this concern.
The interest in tax revision gradually came to focus on
three key aspects. The first relates to the equity of the
tax system -- the lack of essential fairness that results
when so many special preferences and treatments are woven into

the system while the tax rates , particularly those on individuals , remain at very high levels. Our strong reliance on the
income tax reflects in large part the general recognition

that a graduated tax on net income is the fairest way to collec
needed revenues that our society has yet devised. A tax so

chosen because of its inherent equity can hardly tolerate being
riddled with inequities in its actual application. The second
aspect relates to the effect of the tax structure on the rate
of economic growth. Some economists feel that the structure
may well be too powerful in relation to expenditures -- by

- 4 -

17

restricting demand in this way, it prevents the economy from
achieving its full potential. The fact that the tax system
would produce a surplus when the economy is considerably
short of high employment lends support to this view. Other
economists believe that the level of investment would not be
high enough even at full employment to permit the economy to
achieve needed increases in its rate of growth, and urge the
adoption of tax incentives to encourage the allocation of a
larger share of our national output to investment. There are
also misgivings about the "narrow base - high rate structure"
contours of the income tax because of the adverse economic
effects that flow both from the consequent high marginal rates
and from the misallocation of resources caused by special
preferences. The third aspect -- and one closer to the tax
practitioner -- is the complexity of the tax system and the
distortions it creates in the conduct of our business and
family affairs. Any tax system will necessarily have its
effect on our business and social structure in the large.
But the present tax system, again because of its many preferences and consequent complexities, seems to have an undue and
inappropriate effect in shaping our society in many of its
daily routines.

_. 5 -

*= ---

I think these concerns are both genuine and justified.
And it is because of them that I believe we are entering on
a period of significant change in the Federal tax structure.
We can start with the short run. In 1961, as part of the
concern over special preferences and inequities, the Congress
has been asked to grapple with issues that we all know existed
but with understandable reluctance we kept from facing head on.
Here I refer to expense accounts, the non-compliance in dividend and interest reporting, the many escapes from taxation
in the foreign income area, the allowance of capital gain
treatment on sales of depreciable property, and the undertaxation of business organizations operated on a mutual basis,
such as cooperatives, savings institutions and casualty insurance companies. As respects the need for greater emphasis on
incentives to investment, the Congress has been asked to consider an investment credit at the corporate and proprietorship
level and to discard an expensive and ineffective effort at
incentive at the shareholder level -- and one that is also
inequitable as well -- the dividend credit and exclusion. We
need not spend time on how this will end -- the constant outpouring of news letters and stories from Washington keeps you

1 Q

far more informed and confused than I can achieve in this
short talk. Indeed, it is always interesting for me to start
the day's work by reading what Secretary Dillon is thinking
or what I am thinking. All that one needs do then is to add
up the conflicting pros and cons and find the best bet for
the thought of the day.
The President and Secretary Dillon have stated that 1961
is only a first step in a continued effort to reform the tax
system. The broad outlines of the program will center on a
reconsideration of the income tax base with the viewpoint of
determining the extent to which it can appropriately be
broadened, and a re-examination of all brackets of the rate
structure to see whether the rates can be lowered as a concomitant readjustment. This tax reform program thus has as
its central goal the shaping of a basic tax structure that
is both appropriate and conducive to a growing economy. If
a basically sound tax structure -- considered from the earlier

aspects of fairness, economic growth, and lessened complexity -can be achieved, then it can be more readily adapted than our
present structure to the short run needs that may occur, be
they by way of tax increase or decrease because of swings in
the domestic economy or pressures from without.

- 7Oil
__ v^

But the years immediately ahead will not mark the end
of tax changes. A complex society such as ours, ever growing and changing, must necessarily expect and demand that
its tax system also keep pace. The changes now under consideration merely mark the insights of today, based on the
research of the past. Those insights tell us only what we
need today and parenthetically tell us that the needs are
overdue. But what of the tax system of the years ahead?
The scientist, the architect, the business man each thinks
and speaks in his field of the world of 1970, of 1975, and on.
What do the tax practitioner and tax economist say when they
speak of the future? What can they say -- can they speak at
all? Is the crystal ball far more cloudier in the field of
taxation? Is there even a crystal ball of taxation at all,
or must we be content in taxation to forget the future and
only try to make sure that we recognize when the present is
becoming outmoded?
It is here, I think, that we come to some considerations
respecting the process of change and development in taxation
that should be of concern to all of us, and especially to
this group. Change in our tax system means essentially

_ i

- 8legislative change. Legislative change in turn means knowledge
about the tax system that is communicated to and understood by
at least the business and professional groups in our society,
and as far as possible by the public at large. For the Congress

in the end must depend upon the existence of that general under-

standing if a change is to have the degree of acceptability that
will enable it to be made at the legislative level. It is here,
however, that the Congress, and the Executive Branch as well,
must look to the tax expert to play his part. For tax knowledge
starts with the tax expert, be he a legal or accounting practitioner, a research consultant in the business world, or an
economist or law professor in the universities. How well do
we fulfill the role that only we can play? Or, rather than to
seek our present rating, it is preferable to ask the question
whether we can do better than we are doing today.
In pursuing this question, let us divide the inquiry into
two parts -- that of achieving a better understanding as respects current proposals and that of obtaining more knowledge as
to the needs of the future. Any tax bill is likely to provoke
considerable debate. But the difficulty is that it usually
produces no more than mere debate. Much of the material

- 17 U ii

technically complex and may even grow more so. The
issue is not, therefore, complexity versus simplicity.
Rather, the problem has become one of the management of
tax complexity. What devices and procedures can we
utilize that will enable us to manage this inevitable
complexity in a fashion that is more satisfactory than
our present situation? I hope to be able in a subsequent paper to discuss this problem at great length, for
it is certainly a major question for the tax practitioner.
Costs to Society of Tax Administration.--A study of
the costs to society, in time, brains, and money, involved
in the over-all administration of our tax system and an
appraisal of the appropriateness of those costs. Do
measurement procedures exist which can tell us something
useful about the magnitude of the social effort involved
in administering our tax system? Is the total cost large
or small in relation to the revenue-raising task that
must be accomplished? How much of the total cost stems
from the many refinements, special treatments, and elections that permeate the system?

- 18 Sanctions and Tax Compliance.--A study of the
factors that work for and against compliance on the
part of taxpayers generally, and of the sanctions and
procedures that would be appropriate in the light of
those factors. Certainly with a system that appears
to involve some $25 billion of unreported income, we
must proceed more energetically than we have to seek
solutions for this non-compliance.
The above are large topics, difficult to grapple with,
yet not beyond the talents and research resources of today.
When we turn to the "Federal Income Tax" itself, we find a
host of issues, to mention only a few:
Place of the Corporation in our Federal Tax System.-A study of the appropriate tax treatment of the corporation, including corporate distributions to shareholders,
under the Federal income tax.
Tax Treatment of Capital Gains and Losses.--A study
of the appropriate tax treatment of capital gains and
losses including, if a differential treatment is called
for, the formulation of capital gain and loss definitions
consistent with the policy premises underlying that treatment.

Role of the Family Trust Under the Income Tax.--The
increasing use of trusts to hold the property of upper
income families and to accumulate income under the direction of a trustee with power to control its distribution
makes the trust decree a significant means of reducing
the impact of the income tax on a family group. It also
leads to institutionalization of investment management
and may involve serious social distortions. Our present
tax rules need re-examination to see if they are appropriate under modern estate planning practices.
Tax Averaging and Related Devices.--A study of the
need for tax averaging and of the appropriate method of
averaging. The shift to automatic data processing may
well force a concerete consideration of this issue since
it would seem to offer governmental aid if the computation and data factors involved in averaging are too
complex for taxpayer handling.
Flexible Counter-Cyclical Use of the Tax System.-A study of the operative technique by which a flexible,
counter-cyclical use of the tax system may be exercised.
The recent report of the Commission on Money and Credit

- 20 -

<- }

has spurred consideration of this matter. For long it
has been a goal of the economists, yet it does not
appear that real consideration has been given to the
operational problems and the legal framework.
Employee Fringe Benefits, Including Pension Plans.-A study of the income tax treatment (and in some cases
estate and gift tax treatment) of employee fringe benefits , including pension plans.
And so the list goes. No special significance should be
attached to the topics listed above, or to their order. They
merely represent some thoughts as to the knowledge and data
we should have available in future years to be able to deal
competently with tax policy issues that may arise. Many more
technical topics can of course be added -- the treatment of
charitable foundations, the treatment of legal expenses
incurred by individuals, the treatment of debt under the Code,
loss carryovers, multiple corporations, and so on.
It is clear that the task of list making is one we can
meet. But what is to be done with these elegant lists? Certainly a great deal of the work must be carried on in the
universities and in the Treasury Department. The universities

oh

- 21 must be stimulated to greater activity, and law professors
will have to join with economists and other social scientists
if the tasks are to be adequately performed. The Treasury
Department will also have to play a large role, both in supplying basic data and in providing analyses that can only be
done under Government auspices.
Can the organized bar play a role? The research on
Judicial Tax Procedure, to be conducted under the auspices of

the American Bar Foundation with the cooperation of the Section

of Taxation, indicates that procedures can be developed whereby
the Section can stimulate research and participate in that

research. But it also indicates that new methods and procedures
must be devised, for the usual procedures of the Section are

not conducive to providing sustained major research. But surely

ways can be found -- witness the work of the Association of the
Bar of the City of New York. On narrower technical topics we
can see beginning in the current Committee Reports. The Report
of the Committee on Withholding shows how a special committee

and a hard working chairman can go beyond the customary committ
action, though even here a few critical issues remain open. And
one can read with interest and profit the extended discussions

*_/ --^J

- 22 on Charities Which Make Grants Abroad in the Report of the
Committee on Exempt Organizations, and the Report on Subchapters R and S by the Special Committee. Further, the
many informative reports of the various committees clearly
perform a useful service in placing the year's developments
in perspective.
All of this indicates that our Section is groping towards
ways in which it can make its undoubted resources and skills
more useful to the study of tax problems. There is every
indication, especially in the report of the Survey and Planning Committee, that the Section realizes it must free itself
from the minutiae in which it has so long been trapped. We
are all aware of the organizational and other difficulties
involved. But the task is important, for so much is at stake.
There is much to be done to improve our tax system and there
is much that this Section can contribute. This being so, we
must work together to see that as an organization and as a

profession we meet our share of the responsibility for progress
in the field of taxation.

^c

Attest f, Iffe
Wm BIUASE 4. V. wnmfiHs t
____»fds_r» Al^ffflft6; 1961.
sa&xxfsi or ituimntt'S ^ K E I L I a i u S

F M I K

1fcs traastnry $spftrt«tat Mrawnad last sawalar that the taodars for two «ri€* @|
t m m u r y b U l s , oaa s a r & M tofcsan additional ln«wa of tt® b U l a iisU4 l*ay U 9 30ft,
ami tba otbisr sarias to b# dated 4ifM«t 10, XSN&I, wtiSob vara oifto«t O B August a, war.
opaaod at mm tmmrmX Sssarva Bmm m awgast ?. f a w t e s wax* tevtted tor
$l,im9m$m
or thsraafecrate, of Fl^cHiy bills and far ~6uC9uGCf0(X>9 or tfcsmbsitts, of 10f~day H I M T
tha dataila of tha tore sarins i n a® follow®t
ft48HE OF ICtttFTU)
carr^ififi: B I « *

ttHia/

blUt
Appro*. £qa£r7
Attaaal &*ta

4pp*&c_ mmydm*

-fir
4varaf*

$9»S9M

m*km

trnml mm

t*3§ff

9S.&T3

2Mi% y

$«M$ y

a/ Incept itsf oaa taodar at 1*/., j jh >
T ? *rcent of tba aaaast at *l-rfay bills bid for at %hm low prlea w a s aesaptad
1*6 percent of tba mmmmBM mt llt«4ay bills bid for at tba low prist w&sa aocaptad
rc-TAt ?S?DfR$ &r%lW

FOP AMIS &€€Sf»B _W ~T_*»4l W S ? F f , M M B I C T S t

District
,gj^|,„™,M,™«»,«__,
Mm tmrk

4ppllod for

&,?33 9 0OO
IS t 3lA 9 000
aofiii#ooo

JfelljMitlgfeia
Clavalaad
fticteorid
Chios-to
St. fcauis
feinaaapolla
fajsaas City
SaUas
Saa Iraaeltsa
tOT4XA

y

23*5*7,000
251,123,000
22 9 *73 9 000
2? 9 006 9 ODO

X09?il,CXX)

n9Msti$Qw

m9m$9om

68$96369ooo
8MSl9Q00
1,156,000
59a709ax>
U396969G00
li 9 Qll 9 <m
2Q,hQh90m
32,428,4100

rife®
kn,*3M9m
1,1,10,000

2l»9aA|ial
l925siMI

k$m>m
6l9O949O00

W99n9om
3,011,008
10
tl0
QQQ
3,So0 9 W
9
9
m9m9om
2
m%m_M_4.
0QO
9
9
23$2B29mO
1-600,153,000
j
ld,*6*
0U»
f
,, ItfiitgS
inclu-*aa f?£?9J*87,0G0
nonecwpatitlva tamlara a o o a f t ^ at tfea avaraga prica of 99M
|/
9i$39ax>
laaludaa » ^ , 5 ^ 9 tt
0 0 0003
i^aea^atitlva
tandara
aooaptai
at tha avaraga priea o f 9%M
ftlM»0 ti9ioo
9

.

6Mlf68ffmo
t,?339GG0
ao,36afooo

9

Da a vovzm l«5_m# -»'f m # hmm langth airf for tlia ®^m mmmfo lnvastad # fcfea ratufae«
«bat-£ ©ilia woia^ proiriil® jrialds of 2.411, for tta fl^^ay bill®, mi* *•(&$. tm*m
lS2-day b U X s . l«*#r©#t f«.tas om bill® mrm ®<m%®A $M %mmm of bmm dlacoaat wit^
tba w i n n s ralsta* to tha faea anoi»nt of tba bills pmymhlm at Mtaurlty rathar 1 W
tha ahoi nt Iwostad and thair lanrth In astnal twibar of days ralata# to a 360-da|
yaar# In eontraat, ylalda o» eartifioatastj, uoto®, and bonds mt® ooispistad in t«wi
of i_st^raat o® tfea iteoaist itwast€«ls and ralata tfea ©ussbor
ofp«i
days i^ssaljaiisf la m
_ the
interest pajfwrat pariod to tba aatoal mw'bar of any® la tba parlod, with sa*iu»tfl
€<mpowss0,$i^ it mm than out coupon pariod is lufolvod.

V - /W

TREASURY DEPARTMENT
W A S H I N G T O N , D.C.
FOR RELEASE A, M. NEWSPAPERS,
Tuesday, August 8, 196l.

August 7, 1961

RESULTS OF TREASURY'S WEEKLY BILL OFFERING

\ The Treasury Department announced last evening that the tenders for two series of
tTreasury bills, one series to be an additional issue of the bills dated May 11, 196l,
iand the other series to be dated August 10, 196l, which were offered on August 2, were
Opened at the Federal Reserve Banks on August 7. Tenders were invited for $1,100,000,000,
tar thereabouts, of 91-day bills and for $600,000,000, or thereabouts, of 182-day bills.
The details of the two series are as follows:
llRANGE OF ACCEPTED
lfcOMPETITIVE BIDS:
High
Low
Average

91-day Treasury bills
maturing November_ 9Jm 196lm
Approx. Equiv.
Price
Annual Rate
2.330$
99.1*11
2.382$
99.398
2.366$ 1/
99.1*02

182-day Treasury bills
maturing February 8, 1962
Approx. Equiv.
Price
Annual Rate
98.686 a/
2.599$
98.673
2.625$
98.677
2.617$ y

y Excepting one tender of $100,000
1 percent of the amount of 91-day bills bid for at the low price was accepted
.48 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
Boston
New York
Philadelphia
Cleveland
Richmond
Atlanta
Chicago
St. Louis
Minneapolis
Kansas City
Dallas
San Francisco
TOTALS

Applied For
%
29,2514,000
1,150,122,000
214,733,000
25,318,000
10,781,000
23,527,000
251,723,000
22,973,000
22,006,000
1|6,82_»,,QQ0
23,282,000
72,671,000
$2,003,2114,000

Accepted
1
15,2514,000
69lt,682,000
9,733,000
20,368,000
10,781,000
22,827,000
187,833,000
18,973,000
18,810,000
30,89i»,000
18,282,000
51,756,000
$1,100,193,000 y

Applied For
Accepted
%
3712070OO $ 3,120,000
885,836,000
1471,236,000
6,_il0,000
l,lilO,000
2l»,851,000
2ii,85l,000
1,156,000
1,156,000
5,070,000
li,670,000
113,696,000
61,096,000
14,011,000
3,011,000
5,060,000
3,560,000
20, [{Oil, 000
lU,20li,000
12,628,000
2,628,000
11,236,000
_!__£____ 000
$1,093,1478,000
$600,153,000 c/

/ Includes $222,1*87,000 noncompetitive tenders accepted at the average price of 9
/ Includes $39,5^0,000 noncompetitive tenders accepted at the average price of 98.677
/ On a coupon issue of the same length and for the same amount invested, the return on
these bills would provide yields of 2.1*1$, for the 91-day bills, and 2.69$, for the
182-day bills. Interest rates on bills are quoted in terms of bank discount with
the return related to the face amount of the bills payable at maturity rather than
the amount invested and their length in actual number of days related to a 360-day
year. In contrast, yields on certificates, notes, and bonds are computed in terms
of interest on the amount invested, and relate the number of days remaining in an
interest payment period to the actual number of days in the period, with semiannual
compounding if more than one coupon period is involved.
-191*

TREASURY DEPARTMENT
Washington
FOR RELEASE:

?Q

V- _,

4:00 P.M., EDT
MONDAY, AUGUST 7, 1961

Following is the text of the speech delivered today by the Honorable
Douglas Dillon, Secretary of the Treasury and Chairman of the United
States Delegation to the Special Meeting of the Inter-American Economic
and Social Council, Punta del Este, Uruguay:
It was a great American -•- Jose Marti -- who reminded us that "We
Americans are one in origin, in hope and in danger".
We meet today in fulfillment of that concept — brought together by
our common origin, fired by our common hopes, determined to conquer our
common dangers.
We assemble here at Punta del Este to chart the future course of our
Hemisphere. Upon our deliberations and decisions rest the hopes of
Americans yet to come. What we are able to accomplish here may well <
determine whether the most cherished values of our civilization — the
freedom and the dignity of man — are to be strengthened and expanded.
This is a revolutionary task. But we are no strangers to
revolution. From the shores of the Americas almost 200 years ago, went
forth the call to freedom and national independence which today guides
men's actions in all the turbulent; continents of the world.
It was our Hemisphere which first proved that men could rule themselves, that colonial shackles could be cast off, and that governments
could be the instruments of man's liberty.
This was the spirit of our revolution and of the revolutions it has
inspired
It is the spirit which has shaped our Hemisphere. IT; is the
spirit of'our continuing struggle against the despotism which is as
ancient as the Pharaohs — no matter what new form it may assume and It
is that spirit — the legacy of Artigas and San Martin, of Bolivar and
Washington, of O'Higgins and Jose Bonifacto — which guides our actions
here today.
But the fruits of the American revolution have not yet been extended
to all our people. Throughout the Hemisphere millions still live with
hunger, poverty and despair. They have been denied access to the benefits
of modern knowledge and technology. And they now demand those benefits
for themselves and for their children.
We cannot rest content until these Just demands are met. And it is
our profound conviction that they can be met only be free men working
within a framework of free institutions.
That is what the Alliance for Progress is about. It is a bold and
massive effort to bring meaning and dignity Into the lives of all our
people to demonstrate to the world that freedom and progress walk hand in
hand.
To accomplish this, we must dedicate ourselves to the proposition
that the decade o_,\ the sixties will be a decade of democratic progress —
a Deriod which will witness great forward strides in the development of
Latin America — a period in which all our nations will greatly advance
the
.nc o
standard
vw
of living of their peoples.
Underlying

~2~
Underlying the effort we must make are certain basic principles:
First, no developing nation can progress unless it makes heroic efforts to summon its people to the taok of development, unless it dedl~
cates a larger proportion of domestic resources to the common effort, and
unless it calls upon all groups in the society to make fresh and larger
contributions to the cause of national progress.
Second, developing countries need national programs of economic and
social development -- programs which set forth goals and priorities and
ensure that available resources are used in the moBt effective manner.
Long-term development plans can greatly speed the process of growth.
Third, national development programs must recognize the right of
all the people to share fully in the fruits of progress. For there ia
no place in our democratic life for institutions which benefit the few
while denying the needs of the many.
We welcome the revolution of rising expectations among our peoples!
and we intend to transform it into a revolution of rising satisfactions,
To carry out these principles will often require difficult and farreaching changes. It will require a strengthening of tax systems so
that would-be evaders will know they face strict penalties, and so that
taxes are assessed in accordance with ability to pay. It will require
land reform so that under-utilized soil is put to full use and so that
farmers can own their own land. It will require lower interest rates on
loans to small farmers and' small business.
It will require greatly increased programs of education, housing and health. And for the United
States it will require a clear acceptance of further responsibilities to
aid our sister republics.
«».- We can press forward v/ith industrialization to help modernize
our economies and provide employment for our rapidly growing urban populations.
— We can establish a society in which no man wants for food, and
all have access to education.
— We can clear away city slums and wipe out disease by making
full use of the wonders of modern medicine.
— We can eliminate the poverty which burdens our farmers, and make
it possible for every man to own the land he works.
— We can do away with the social and economic injustice which
undermines free political institutions.
All this and more is within our power if we dedicate the creative
energies of free men to the cause of progress.
This is what President Kennedy meant by his call for an Alliance
for Progress.
Mr. Chairman: Here at Punta del Este there lies before us the
opportunity to create a solid framework of Inter-American cooperation to
carry forward the Alliance for Progress. To build that framework we
must, here and now, chart the course we are determined to follow in the
decade of the sixties.
-- Let us

-- Let us establish the economic and social goals we shall pursue
in the next ten years.
— Let us determine to prepare, as rapidly as possible, comprehensive, long-term national development programs, meanwhile going ahead at
full speed with urgent development projects and measures that are ready
for consideration.
— Let us greatly strengthen our inter-American machinery for
economic and social progress, harnessing our best talents in the service
of developments.
i

— Let us concert our policies to expand world markets for our
exports and to bring greater stability to our foreign exchange earnings.
— Let us move ahead with economic integration in Latin America,
releasing the powerful stimulus which this movement can give to the
development process.
— Let us also build a great common market of intellectual, cultural
and scientific interchange. For this will forge indissoluble ties among
our peoples to their mutual enrichment.
My delegation is prepared to discuss in detail these essentials
of the Alliance for Progress. Meanwhile, I wish to make certain
Observations on some of the more important of them:
It has been suggested by the group of experts that a major goal of
national development programming should be the achievement of a substantial and sustained increase in per capital growth rates, the
target for any Latin American country to be set at not less than 2 1/2
per cent per year, which moans an average overall growth rate of better
than 5 per cent.
My government is in agreement with this concept. Moreover, we
believe that this goal is attainable. Growth rates have not been
adequate in the pastj we can and must do better.
But this requires the will to devote adequate internal resources
to development and to do so wisely in accordance with well conceived
plans and programs. If this is done the vital supplement of external
resources will be available.
In his message to this conference on Saturday, President Kennedy
pledged the full support of the United States and pointed out that
public assistance from United States to Latin America has already been
increased to an annual rate of more than one billion dollars — three
times last year's amount.
This is a measure of our continuing devotion to the concepts of the
Alliance for Progress. Furthermore, it is our intention that future
development loans made by our new aid agency will be on a long-term
basis running where appropriate up to fifty years. We also intend
to make the bulk of these loans at very low or zero rates of interests.
Looking to the years ahead, and to all sources of external
financing — from international institutions, from Europe and Japan as
well as from North America, from new private investment as well as from
publio funds — Latin America, if it takes the necessary internal
measures,

-it-

measures, can reasonably expect its own efforts to be matched by an
inflow of capital during the next decade amounting to at least twenty
billion dollars. And mo3t of this will come from public sources.
The problem, I am convinced, will no longer lie in shortages of external
capital, but in organizing effective development programs so that both
domestic and foreign capital can be pxit to work rapidly, wisely, and well.
In these programs education must receive a high priority. Our
goal must be to insure that a decade from now every Latin American
youngster who reaches the age of 12 is able to read, write and do
simple arithmetic. These tools will give him access to the great
storehouse of human knowledge and will open the road to self-Improvement.
It therefore behooves all nations in the hemisphere — even, and
perhaps especially, the poorest - to enlarge th<_ share of national
income devoted to education.
Along with greater financial support, our educational institutions
require far-reaching reforms — and I include those of my own country.
Curriculums must be brought up to date, and techniques of teaching and
learning must likewise be modernized.
A task force on education should be created immediately. Such a
task force can be the needed catalyst to rapid progress on the education
front. It can clarify the educational needs of each country including
manpower requirements. It can establish priorities for meeting these
needs.
In addition to education, our agenda, in item I (__), looks toward
the formulation of detailed policies and recommendations in a number
of other specialized fields, including investment programming,
industrialization, agricultural improvement, and public health. I
hope that this conference will call upon the Secretary-General of the
OAS fco promptly establish task forces to consider these problems.
I believe it is especially urgent to set up a task force on land
reform. Such a task force could recommend the measures required to
bring about the great increase in agricultural productivity which we
must have — while at the same time assuring that the benefits of this .
productivity are available to all who work the land. This may often
mean not only the settlement of public lands but also the redistribution
of under-used latifundla. It will also mean a whole host of new
techniques, including expanded credit facilities, the promotion of
cooperatives, and provision of effective extension services.
The United States is prepared to finance inter-American task forces
in these various fields to elaborate the specific and concerted actions
which countries need to consider in drawing up their programs.
In the vitally important fields of tax administration and tax
structure, two conferences have already been arranged for this fall
and next spring under the auspices of the OAS and ECLA. We believe
that this meeting should endorse the purposes of these conferences.
Their results could prove to be of enormous help in mobilizing the
resources required for economic and social progress.
Low cost

-5Low cost housing is another vital ingredient of the Alliance for
Progress. We congratulate the Inter-American Development Bank for its
prompt action in utilizing funds from the social progress trust fund
to finance housing projects in Panama and Venezuela, as well as for
the loan Ju3t announced to help small farmers in El Salvador. The
United States believes that an immediate and large-scale program —
perhaps as much as 100 million dollars — for aided self-help housing
would be a wise investment of the funds provided to the IDB by the
United States under the social progress trust agreement.
, Enlarged expenditures for economic and social progress call for
the reduction of needless or luxurious expenditures for other purposes.
It is time we brought these considerations to bear on military expenditures in considering the competing demands of development and interAmerican defense. As ministers of finance,or economy we need to
encourage those responsible for our common fdefense to engage in
the critical review required to avoid imbalances between military and
other expenditures. The Inter-American Defense Board can give invaluable
assistance in identifying essential requirements for defense against
both direct and indirect aggression.
One Important element in the proposed new structure of interAmerican, cooperation is the Committee on Development Plans first suggested
by the expert group on topic I of our agenda. A special committee of
highly qualified and experienced experts could review national development programs in close consultation with the governments concerned and
provide independent evaluations which would be helpful in enlisting the
support of other governments and international institutions.
Such a committee would not interfere with the responsibility of each
national government to formulate its own targets, priorities, and measures
for national development. But it would be an instrument of great value
in facilitating the systematic and sustained provision of outside
assistance for soundly conceived progress. The details of its membership, staffing, location, relations with the Inter-American Development
Bank, and other such matters, are all matters for our working committees
to settle.
If a body of highly qualified and impartial experts Is established,
my own government would expect its recommendations to be of great
importance in determining the allocation of our own resources to Latin
America for development purposes. We would also expect other friendly
governments which are potential suppliers of capital, together with
the international institutions in which we participate, to accept
these expert recommendations as a major factor in their decisions on
aid for Latin America.
Continued and steady economic growth demands a solid basis in
expanding trade. The development of measures to stabilize, strengthen
and enlarge the markets for J«atin American exports must therefore be
The most
an integral part of the Alliance for Progress. The United
States is
ready to cooperate in seeking workable solutions for commodity problems
and to give
bodies
in this
itsfield.
support to the activities of the various international

-6The most urgent and important commodity problem confronting the
countries of Latin America is that of coffee. A solution to this problem
must be found. The current coffee situation results in a needless drain
on resources and is a threat to the economic well-being and stability of
14 nations of the Hemisphere.
The weakness of the existing coffee agreement is twofold:
Its membership has been limited to exporters only.
And it has not been possible to make its export quotas fully effective.
We believe that an entirely new agreement is needed. For if export
earnings of the coffee producing countries are to be safeguarded, quotas
must be geared to actual consumption and must be enforceable. The United
States is prepared to join a workable coffee agreement, to use its good
offices to urge the participation of other consuming countries, and to
help in the enforcement of export quotas through the use of import controls. We all know that any lasting stabilization of prices will also
require courageous programs to deal effectively with overproduction.
When the coffee study group meets in September, the United States
will propose that a new agreement be drafted to achieve these ends.
Tin is another commodity of importance to this Hemisphere. In
order to strengthen and support the international tin agreement we plan
to discuss with the Tin Council, at an early date, the terms of possible
United States accession to the agreement.
We also believe that the proposal in the report of the group of experts for an export receipts stabilization fund is worthy of careful
study. It offers promising possibilities even though there are many
technical and policy issues regarding the scope, functions and financing
of the suggested fund which must be carefully weighed. In the third
committee my delegation will propose the appointment of a task force to
meet promptly after this conference to explore the plan in detail and
make appropriate recommendations.
I turn now to the economic integration of Latin America. Four
countries of Central America have agreed upon a full customs union with
Internal free trade for substantially all their production. Their bold
and decisive action commands our admiration. We are confident that it
will open the way to their accelerated development.
The ratification of the Montevideo Treaty establishing the Latin
American Free Trade Association is another significant milestone along
the road to a Latin American common market. It is our hope that its
members will find it possible to expand rapidly the list of products
which are to be traded freely so that the full benefits of integration
can be realized.
The United States is deeply conscious of the concern in many Latin
American countries for the future of their export markets in the
European Economic Community. That Community has committed itself to a
liberal commercial policy. All of us in the Western Hemisphere have the
right to expect that this commitment will be honored. In addition to
protecting our own commercial interests, the United States will continue

-7to urge upon the Community the importance of fair treatment for
exports of speoial interest to Latin /erica and other developing areas.
I think this conference should know that in recent weeks the United
States has proposed to the community the adoption of a program to
eliminate the tariff preferences on tropical products now accorded the
Associated Overseas Territories. Furthermore, we have informed the
Community that we are prepared to give financial support to such a
program. We will continue to press this proposal.
Mr. President, we are met here at an eastern outpost of a great
and rich continent. Across that continent live millions of people
struggling to break the bonds which Chain them to lives of endless
toil,of disease, and hunger and hopeless poverty. We are here to
help them break those bonds — to build the foundations on which will
rise a new hemisphere — a hemisphere where human freedom flourishes
in lands of hope and progress.
We approach this task with full knowledge of its vast dimensions —
of the enormity of the struggle which lies ahead. But we also approach
it with sure confidence in the unconquerable powers of free men — and
with faith in the God who has guided us so surely through the dangers
of the past.
Working together — with His help — I am confident we will succeed.
# # #

-6The most urgent and important commodity problem confronting the
countries of Latin America is that of coffee. A solution to this problem
must be found. The current coffee situation results in a needless drain
on resources and is a threat to the economic well-being and stability of
14 nations of the Hemisphere.
The weakness of the existing coffee agreement is twofold:
Its membership has been limited to exporters only.
And it has not been possible to make its export quotas fully effective.
'
We believe that an entirely new agreement is needed. For if export
earnings of the coffee producing countries are to be safeguarded, quotas
must be geared to actual consumption and must be enforceable. The United
States is prepared to join a workable coffee agreement, to use its good
offices to urge the participation of other consuming countries, and to
help in the enforcement of export quotas through the use of import controls. We all know that any lasting stabilization of prices will also
require courageous programs to deal effectively with overproduction.
When the coffee study group meets in September, the United States
will propose that a new agreement be drafted to achieve these ends.
Tin is another commodity of importance to this Hemisphere. In
order to strengthen and support the international tin agreement we plan
to discuss with the Tin Council, at an early date, the terms of possible
United States accession to the agreement.
We also believe that the proposal in the report of the group of experts for an export receipts stabilization fund is worthy of careful
study. It offers promising possibilities even though there are many
technical and policy issues regarding the scope, functions and financing
of the suggested fund which must be carefully weighed. In the third
committee my delegation will propose the appointment of a task force to
meet promptly after this conference to explore the plan in detail and
make appropriate recommendations.
I turn now to the economic integration of Latin America. Four
countries of Central America have agreed upon a full customs union with
Internal free trade for substantially all their production. Their bold
and decisive action commands our admiration. We are confident that it
will open the way to their accelerated development.
The ratification of the Montevideo Treaty establishing the Latin
American Free Trade Association is another significant milestone along
the road to a Latin American common market. It is our hope that its
members will find it possible to expand rapidly the list of products
which are to be traded freely so that the full benefits of integration
can be realized.
The United States is deeply conscious of the concern in many Latin
American countries for the future of their export markets in the
European Economic Community. That Community has committed itself to a
liberal commercial policy. All of us in the Western Hemisphere have the
right to expect that this commitment will be honored. In addition to
protecting our own commercial interests, the United States will continue

-7to urge upon the Community the importance of fair treatment for
ft_AAB
exports of speoial interest to Latin /erica and other developing are»o.
I think this conference should know that in recent weeks the United
States has proposed to the community the adoption of a program to
eliminate the tariff preferences on tropical products now acooraea wie
Associated Overseas Territories. Furthermore, we have informed the
Community that we are prepared to give financial support to such a
program. We will continue to press this proposal.
Mr. President, we are met here at an eastern outpost of a great
and rioh continent. Across that continent live millions of people
struggling to break the bonds which Chain them to lives of endless
toil,of disease, and hunger and hopeless poverty. We are here to
help them break those bonds — to build the foundations on which will
rise a new hemisphere — a hemisphere where human freedom flourishes
in lands of hope and progress.
We approach this task with full knowledge of its vast dimensions -of the enormity of the struggle which lies ahead. But we also approach
it with sure confidence in the unconquerable powers of free men — and
with faith in the God who has guided us so surely through the dangers
of the past.
Working together — with His help — I am confident we will succeed.
# * #

CO

oo
00

42
TREASURY DEPARTMENT
WASHINGTON, D.C.

August 8, 1961

FOR IMMEDIATE RELEASE
TREASURY DECISION ON BAYQM STAPLE FIBER
UfDER THE «?_)UMlWG ACT

The Treasury Department has determined that rayon staple
fiber from Spain is not being, nor likely to be, sold in the
United States at less than fair value within the meaning of
the Antidumping Act. Notice of the determination will be published in the Federal Register.
There have been no importations of rayon staple fiber
from Spain since June i960.

TREASURY DEPARTMENT
WASHINGTON, D.C.
August 8, 1961
FOR IMMEDIATE RELEASE
TREASURY DECISION ON RAYON STAPLE FIBER
UNDER THE ANTIDUMPING ACT

The Treasury Department has determined that rayon staple
fiber from Spain is not being, nor likely to be, sold in the
United States at less than fair value within the meaning of
the Antidumping Act. Notice of the determination will be pub^
lished in the Federal Register.
There have been no importations of rayon staple fiber
from Spain since June i960.

- 3_!____i;t.Wiii'M>>;i:.:f:*:

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

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 ex-

cept for their own account. Tenders will be received without deposit from incorp
rated banks and trust companies and from responsible and recognized dealers in

raent securities. Tenders from others must be accompanied by payment of 2 percen

the face amount of Treasury bills applied for, unless the tenders are accompanie
an express guaranty of payment by an incorporated bank or trust company.
Immediately after the closing hour, tenders will be opened at the Federal Re-

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

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

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

of the Treasury expressly reserves the right to accept or reject any or all tend
in whole or in part, and his action in any such respect shall be final. Subject

these reservations, noncompetitive tenders for $200,000 or less for the addition
bills dated May 18, 1961 , ( 91 days remaining until maturity date on

fixy
November 1&, 1961

—

w)

1__r

) and noncompetitive tenders for $100,000 or less for the

m)

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 August 17, 196l , in cash or

other immediately available funds or in a like face amount of Treasury bills mat
ing August 17. 1961 Cash and exchange tenders will receive equal treatment.

(ffj
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 e_€s_apt_Q_w as such, and l

TREASURY DEPARTMENT
Washington
FOR IMMEDIATE RELEASE, MTMM.W , August 9, 196l
iX]-IX__0-}_XX-^]{XItiC
TREASURY* S WEEKLY BILL OFFERING
The Treasury Department, by this public notice, invites tenders for two series

of Treasury bills to the aggregate amount of $ 1,700.000.000 y or thereabouts> fo
cash and in exchange for Treasury bills maturing August 17, 1961 , in the amount
of $ 1,700,558,000 , as follows:

9 1 - d a y bills (to maturity date) to be issued August 17. 196l

y

X_2$
in the amount of $ 1,100,000»OOP , or thereabouts, representing an additional amount of bills dated May 18 _ 196l y
and to mature

November 16, 196l, originally issued in the
S n c l u d i n g $100,10^,000 i£_med June lit, 196l)
, the additional and original bills

to be freely interchangeable.
182 -day bills, for $ 600^000.000 > or thereabouts, to be dated

~"TT

—natf—
August 17s 1961

, and to mature

February lgf 1962

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 am
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 (matur
value).
Tenders will be received at Federal Reserve Banks and Branches up to the closing
Daylight Saving
hour, one-thirty o'clock p.m., Eastern ]G_S_fl_fi_Xtime, Monday, August lU_ 1961
Tenders will not be received at the Treasury Department, Washington. Each tender

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

TREASURY DEPARTMENT
WASHINGTON, D.C.
August 9. 1961
FOR IMMEDIATE RELEASE
TREASURY'S WEEKLY BILL OFFERING
The Treasury Department, by this public notice, invites tenders
for two series of Treasury bills to the aggregate amount of
$1,700,000,000, or thereabouts, for cash and in exchange for
Treasury bills maturing August 17, 196l, in the amount of
$1,700,558,000, as follows?
91-day bills (to maturity date) to be issued August 17. 196l,
in the amount of $1,100,000,000, or thereabouts, representing an
additional amount of bills dated May 18, 1961, and to mature
November 16, 1961, originally issued in the amount of $600,632,000
(including $100,104,000 issued June 14, 196l), the additional and
original bills to be freely interchangeable.
182-day bills, for $600,000,000, or thereabouts, to be dated
August 17, 1961, and to mature February 15, 1962.
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 Daylight
Saving time, Monday, August 14, 1961.
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
n-iQ6 company.
or trust

- 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
May 18, 1961,
£l- days remaining until maturity date on
November 16, 1961) and noncompetitive tenders for $100,000
or lese 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 August 17, 196l,
in cash or other immediately available funds or in a like face
amount of Treasury bills maturing August 17, 196l. 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 Gode 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
Federal
of theirReserve
issue. Bank
Copies
or Branch.
of the circular may be obtained from any

CO

o
CD

43
TREASURY DEPARTMENT
Washington
IMMEDIATE RELEASE

WEDNESDAY, AUGUST 9, 196l

D-197

The Bureau of Customs announced today the following preliminary
figures showing the imports for consumption from January 1, 1961, to
July 29, 1961, 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

Unit
of
Quantity
Gross

Imports
as of
July 29, 1961
205,258

Cigars ,

180,000,000

Number

Coconut oil,

403,200,000

Pound

72,937,530

Cordage.

6,000,000

Pound

2,882,547

Tobacco

5,850,000

Pound

5,958,105

3,352,930

/ Q
TREASURY DEPARTMENT
Washington
IMMEDIATE RELEASE

WEDNESDAY, AUGUST 9, 196l

D-197

The Bureau of Customs announced today the following preliminary
figures showing the imports for consumption from January 1, 1961, to
July 29, 1961, inclusive, of commodities for which quotas were established pursuant to the Philippine Trade Agreement Revision Act of 1955;

Commodity

Established Annual
:
Quota Quantity

Buttons.

765,000

: Unit
:
of
: Quantity
Gross

Imports
as of
July 29, 1961
205,258

Cigars, . „

180,000,000

Number

Coconut oi1..........

403,200,000

Pound

72,937,530

Cordage

6,000,000

Pound

2,882,547

Tobacco..............

5,850,000

Pound

5,958,105

3,352,930

TREASURY D_3»ARTM__IT
Yashington, 0* C*

D-198

X____DXA.K BSLEASB

WEDNESDAY ,T AUGUST 9. 196l
ISELDONART DATA OM IMPORTS FOR CONSUMPTION OP ON_ANUPACTDlffiD LEADJ^Wl*
CHAHgABLI TO THB OUOTAS ESTABLISHED
«M_.i_u__ v
^ PRESIDENTIAL PROCLAMATION NO. 3257 OP SEPTEMBER 22, 195«
QDAKTERLT QDOTA PERIOD - J««r '» '96' ~ Septe«b.r 30, 1961
IMPORTS • July I. 1^61- - August 7, 1961
ITEM 392
t Lead bullion or basa bullion, t

ITEM 391
Country
of
Production

•4-n

t

—*- :____tsrsi{%,2J*,•1-^ss,s5_?M- ;«*«- — s__r
:Quarterly Quota
t Dutiable. Lead
(Pounds)

Australia

ITEM 394

ITEM 393

10,080,000

t all alloy* or oombination* of t
: Quarterly (_ota
tlead n.s.p.f..
*
p-porta x Dutiable Zing
Import* tQuarterly
x Dutiable Quota
Lead
(Pounds)
(Pounds)

8,225,725

Import.

*
«-••. «:Quarterly Quota
*
-_-_—-——
Import*
; By ffel&ht
(Pound*)

23,680,000 I0,I7M»»0
5,440,000

M78,58>«

Belgian Congo
Belgium and
Luxemburg (total)
Bolivia

5,040,000

5,040,000

Canada

13,440,000

i5,i(MO,ooo

15,920,000

6,H33,983

66,480,000

21,930,886

Italy
36,880,000

MOxioo
Poru

16,160,000

10,975,093

On. So. Afrio*

14,880,000

14,880,000

Tugosloria
All othor foreign
oouatrie* (total)

6,560,000

VPC2.V XS_C_l 1«» T H — B_s_CAXt o r

cosTouat

6,560,000

22,^37,996

12,880,000

15,760,000

10,352,592

6,080,000

6,080,000

7,520,000

655,318

37,840,000

10,100,533

3,600,000

661,380

70,480,000

25,9^5,563

6,320,000

1,799,368

35,120,000

7,5H6,72M

3,760,000

277,965

17,840,000

17,840,000

6,080,000

6,080,000

TRE&S0R7 DEPARWEaT
faabiagtoo, S. C.

c

B_2DIATE BSLSASI

WEDNESDAY, AUGUST 9, 196l

D-198

!_-_L___NART DATA OH IMPORTS POR CONSUMPTION OP u_tAN0?ACTTJf_3> LEAD AND ZINC CHARGUBLS f0 TBS QUOTAS ESTABLISHES
BY PRZSXDSHTIAL PBOCUMATION NO. 3257 OP SSPTEMBEa 22, 135*
QDAST-HLT QDOTA PERIOD -July »* 1961 - September 30, 1961
IMPORTS • July |, 1961 -- August 7, 1961

Country
of
Prodtuotioa

Australia

ZTZa 394
ITEM 392
ITEIi 391
.
- t_ Lead
iteaa bullion
oaixion or
ox* base
oase bullion,
otu.__..n, s
*
t
I lead in pigs and bars, lead
t
*
t Lead-bearing ores, fins dust,. dro33, re.laiaed lead, s.rap
s Zino-b.aring ores of all kinds,! Zino ia blooks, pigs, or slabs;
t
and mattes
$ lead,
lead,
pyrites
containingnot %s only
old and
zino, fit sine
to iror_i--ut
be re-__ufaetured,
3 ^ ©f
«—w
.
aonlalantiflonial
scrap lead,
typeantlmetal, t% except orer
dross, and zino ski—sings
. all alloys or combinations of i
*
lead n.s.p.f.
I
: Quarterly Quota
Quarterly Quota
:Quarterly Quota
iQuarterly Quota
Inoort.
By
fraljfot
Import*
lEE-orta x Dutiable Zlns
x Dutiabla Lead
Import* i Dutiable Lead
(Pounds)
(Pounds)
[Pounds")""
(Pounds) _"
10,080,000

8,225,725

23,680,000 10,1711,9*0
5,440,000

Belgian Conge
Belgium and
Luxemburg (total)
Bolivia

5,040,000

5,040,000

Canada

13,440,000

13,440,000

15,920,000

Italj

_>

Mexioo

36,880,000

Peru

16,160,000

10,975,093

On. So. Africa

14,880,000

14,880,000

Yugoslorla

__>

All other foreign
09_—tries (total)

6,560,000

rc__?__3 IM THQE B~—IXf Of COSTOUS

6,560,000

6,H33,983

66,480,000

21,950,886

•£>

22,»»5?.996

12,880,000

15,760,000

10,352,592

6,080,000

6,080,000

M78,58»*

7,526,000

655,318

37,849,000

66,100,533

3,600,000

661,380

70,480,000

25,9*5,565

6,320,000

8,799,368

35,120,000

7,51«6,72«*

3,760,000

277,965

17,840,000

17,81*0,000

6,080,009

6,080,000

CD

TBCWT

988*66£<T

Vro'_zz*3

BSO'L

9^9 '0$

Z&Z1
96Z/T.
ISlL'ZZ
LOS'SL

890 '£

L£6%

890'£
Z+ft'TZ

zzi'zn

zsz'iri'-i
—1961 "L f^'W °i

•e%ono ~no,L
jo 2£/l-££

60£'Z8VS

S-S • •:::: w/rsi
: :::
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2T_'8£
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TZ^'OTS'T
"'1961 l^ '+oiwiiy
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vxoao TCLOI

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;eaWunoo SUT^TIOJ ^ jo mmmo ma* «IH^T *£•£ uj.

C^

(sptmod xil)
S31SYW NOttOO
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en

TREASURY DEPARTMENT
Washington, D. C.
V_*

_•

D-199

IMMEDIATE RELEASE

WEDNESDAY, AUGUST 9, 1961
Preliminary data on imports for consumption of cotton and < f j ^ ^ % ^ ^ ^ ^
established by the President's Proclamation of September 5, 1939, as amenaea
COTTON
(other than
linters) (in pounds)
UU_._AJ.LN I, _>---_:_
_!___ _._.-*—--, v —
_-.
_ / ) , IT
Cotton under l-l/8 inches other than rough or harsh under _ _ _ „
Imports September 20, I960 - August 7. 1961
.
— . -_
Established Quota
Country of Origin
Imports
Established Quota

Country of Origin
Egypt and the AngloEgyptian Sudan
Peru
•
British India
<
China

•

Mexico
•
Brazil
Union of Soviet
Socialist Republics
Argentina
Haiti
Ecuador

783,816
247,952
2,003,^83
1,370,791
8,883,259
618,723
14-75,124
5,203

237
9,333

-

50,569
—
—

8,883,259
618,721
—
—
—

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 ...

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, 1961 - August 7, 1961
Established Quota (Global) - 45,656,4^0 Lbs.
Staple Length
1-3/8" or more ~~
I-5/32" or more and under
I-3/8" (Tanguis)
1-1/8" or more and under

39,590,77b1

Imports
39,590,778

1,500,000

461,020

Allocation

4,565,642

1-3/8"
.^•r » / t

~~

752
871
124
195
2,2^0
71,388
21,321
5,377
16,004
689

*****

rA
TREASURY DEPARTMENT
Washington, D. C.

D-199

IMMEDIATE RELEASE

WEDNESDAY, AUGUST 9. 19ol
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/V
"imports September 20, I960 - August 7. 1961
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
k*15,12k
5,203

237
9,333

Country of Origin

Imports

-

50,569
-

8,883,259
618,721
_.
-

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

1/ Other than Barbados, Bermuda, Jamaica, Trinidad, and Tobago.
2/ Other than Gold Coast and Nigeria.
3/ Other than Algeria, Tunisia, and Madagascar.
Cotton 1-1/8" or more
Imports August 1, 1961 - August 7. 1961
Established Quota (Global) - 45,656,420 Lbs.
Staple Length
1-3/8" or more
I-5/32" or more and under

I-3/8" (Tanguis)
l-l/8"f?^~^or.' more
.and under
Q 6 S '

Allocation
39,590,778

Imports
39,590,778

, 1,500,000 461,020
xJJcpSrSsFl

_ 9 / £ - - c
_>-c <a:-<3 -^-S

Established Quota

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

.Imraorts
-

681

-

-_-

COTTON WASTES
(In pounds)
COTTON CARD STRIPS made-from cotton having -a staple-of less than 1-3/16 inches in length, COHBEE
WASTE, LAP WASTE, SLIVER WASTE, AND ROVING HASTE, WHETHER OR NOT MANUFACTURED OR OTHERVfISS
ADVANCED IN VALUE: Provided, however, that not more than 33-1/3 percent of the quotas shall
be filled by cotton wastes other than comber wastes made from cottons of 1-3/16 inches or more
in staple length in the- case- of the- following countries; United Kingdom. France, Netherlands,
Switzerland, Belgium, Germany, and Italy.
Established
Country of Origin
. TOTAL QUOTA
,
-"8

: T o t a l Imports
: Established s
Imports
Tf
: Sept. 20, 19 , to : 33-1/355 of : Sept. 20, 19
; August 7. 1961
; Total Quota : to Auiust 7. 1961

United Kingdom
4,323,457
Canada
. .
239,690
France . . . . . . .
..
227,420 British India
69,627
Netherlands
. .
68,240
Switzerland . . . . . . .
44,388
Belgium. . . . . . . . .
38,559
Japan- . . . . . . . . . . .
341,535
China .
17,322
Egypt . . » • • • • • • •
8,135 ~
Cuba • • • •
..••••
6,544
Germany
76,329
Italy . . . . . . . . . . .
21.263
5,482,509
1/ Included in total imports, -column 2,
Prepared in the Bureau of Customs. -.

1,810,874
.239,690
42,782
58,512
21*442
_.
3,068
_.
_.
_.
50,646

1,441,152

1,441,152

75,807

42,782

22,747
14,796
12,853
_"
«
~
25,443
7.Q88

21,442

2,227,014

1,599,886

3,068
_
_
9 9^7
1,518,381

9I2;!
if

w> _-

-2-

Commodity

Period and Quantity

: Unit
Imports
: of
as of
: Quantity:_M__J_L_i__

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

Butter substitutes, including
butter o i l , containing 4 5 % or
m o r e butterfat
,
Tung Oil

*

Imports through August 8, 1961.

12 m o s .
Aug. 1,
12 m o s .
Aug. 1,

from
1960
from
1961

Calendar Year
Feb. 1, 1961O c t . 3 1 , 1961
Argentina
Paraguay
Other Countries

1,709,000

Pound

1,709,000 Pound

623,1
1,400

1,200,000

Pound

Quota Filled

18,770,577
2,230,313
711,188

Pound
Pound
Pound

12,702,66*
Quota Filled
551,1501

912

TREASURY DEPARTMENT
Washington, D. C.

IMMEDIATE RELEASE

D-200

WEDNESDAY, AUGUST 9, 196l

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 July 29, 1961, inclusive, as follows:

Commodity

:

Period and Quantity

: Unit
:
Imports
: of
:
as of
:Quantity: July 29, 1961

Tariff-Rate Quotas:
Cream, fresh or sour... Calendar Year
Whole milk, fresh or sour........ Calendar Year

1,500,000

Gallon

3,000,000 Gallon

255
50
I

Cattle, 700 lbs. or more each July 1, 1961(other than dairy cows)
Sept. 30, 1961

120,000 Head

14,989 j

Cattle less than 200 lbs. each... 12 mos. from
April 1, 1961

200,000 Head

29,372 1

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

32,600,645 Pound

23,OO7,240ij

57,114,714 Pound

27,898,898

I
Calendar Year

Tuna fish. Calendar Year

1.

White or Irish potatoes:
Certified seed
Other

12 mos. from
Sept. 15, 1960

Walnuts Calendar Year
Stainless steel table flatware
(table knives, table forks,
table spoons)

114,000,000
36,000,000

Pound
Pound

Quota Filled

5,000,000 Pound

Nov. 1, 1960Oct. 31, 1961

69,000,000

64,444,705^
8,831,212

Pieces

Quota Filled

__J
_/ Imports for consumption at the quota rate are limited to 24,450,483 pounds during
the first nine months of the calendar year.

(over)

en
TREASURY DEPARTMENT
Washington, D. C.

(MEDIATE RELEASE

D-200

WEDNESDAY, AUGUST 9, 196l

k
The Bureau of Customs announced today preliminary figures showing the imports for
onsumption of the commodities listed below within quota limitations from the beginning
£ the quota periods to July 29, 1961, inclusive, as follows:
Imports
: Unit
:
: of
:
as of
:Quantity: July 29, 1961

ISC

4

Commodity

:

Period and Quantity

ariff-Rate Quotas:
ream, fresh or sour......

Calendar Year

1,500,000

Gallon

255

lole milk, fresh or sour,

Calendar Year

3,000,000

Gallon

50

ittle, 700 lbs. or more each
[other than dairy cows)
,

July 1, 1961Sept. 30, 1961

120,000

Head

14,989

200,000

Head

29,372

ittle less than 200 lbs. each... 12 mos. from
April 1, 1961
Lsh, fresh or frozen, filleted,
jf.c., cod, haddock, hake, pol>ck, cusk, and rosefish

Calendar Year

32,600,645

Pound

23,007,2401/

Calendar Year 57,114,714 Pound

27,898,898

^iite or Irish potatoes
Certified seed
,
''ther

12 mos. from
Sept. 15, 1960

114,000,000
36,000,000

64,444,705
8,831,212

ota
Inuts

Calendar Year

5,000,000 Pound

ina fish,

ainless steel table flatware
(table knives, table forks,
table spoons)
«

Nov. 1, 1960Oct. 31, 1961

69,000,000

Pound
Pound

Quota Filled

Pieces

Quota Filled

Imports for consumption at the quota rate are limited to 24,450,483 pounds during
e first nine months of the calendar year.

(over)

Commodity

Period and Quantity

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

Butter substitutes, including
butter oil, containing 45% or
more butterfat...„
« • * a O *
Tung Oil.

*

o . o e . Q O . * «

Imports through August 8, 1961.

12 mos.
Aug. 1,
12 mos.
Aug 0 1,

from
I960
from
1961

Calendar Year
Feb. 1, 1961Oct. 31, 1961
Argentina
Paraguay
Other Countries

1,709,000

Pound

1,709,000 Pound

623,{
8,4001

1,200,000

Pound

Quota Filled

.8,770,577
2,230,313
711,188

Pound
Pound
Pound

12,702,664s
Quota Filled
551,151

unroea states Savings Bonds Issued and Redeemed Through July 31, 1961
(Dollar amounts in millions - rounded and will not necessarily add to totals)

..RED
eries A-193S - D-19_il _,
eries F & G-19_il - 1948

Amount
Issued y

% Outstanding
Amount
Amount
Redeemed 1/ Outstanding 2/ of Amount Issued

$

$

5,003
24,364

4,985
24,148

$

18
216

.36
.89

19.37
I8.4O
17.76
18.53
20.47
25.20
29.29
31.81
33.93
36.75
39.62
40.84
42.4S
44.11
45.35
45.61
48.88
53.44
56.95
65.84
86.22

MATURED

.ries E: IV
19U1 ..«
19k2 .•,
19h2 ..«
19hh ...
19hS ...
19^6 ..,
19U7 ...
19U8 ..,
19U9 ...
1950 ..,
19*1 ...
1952 ..<
1953 ...
195a* ...

19# ...
195(6 ..,
19*7 ...
19*8 ...
1959 ...
I960 ..,
1961 ..,
Jnclass if ied «.••••.•<
;iTotal Series E ...••«
'ries H-19^2 - 1961 ;.
Total Series E and H
ries F and Gs
19U9 _••_•••-•••••••••••••
1950 _«•.«._.##•••••••••••
1951
1952 _._...
nclassified .•_«••••••.«•«••«••«
Total Series F and G *••_ »

1,802
7,960
12,822
14,936
11,683
5,235
4,917
5,061
4,966
4,318
3,733
3,881
4,393
4,448
4,613
4,433
4,149
3,997
3,726
3,697
1,604

1,453
6,494
10,545
12,170
9,292
3,916
3,478
3,452
3,281
2,731
2,254
2,296
2,527
2,486
2,521
2,410
2,121
1,861
1,604
1,263
"221

349
1,465
2,277
2,767
2,391
1,319
1,440
1,610
1,685
1,587
1,479
1,585
1,866
1,962
2,092
2,022
2,028
2,136
2,122
2,434
1,383

275

401

-127

116,647

78,777

37,871

32.47

7,470

1,418

6,052

81.02

124,117

80,195

43,922

35.39

1,718
2,422
790
211

1,389
1,441
394
97
67
3,390

h/

329
981
396
114
-67
1,751

19.15
40.50
50.13
54.03

1,765

1,901

51.85

34.06

ries J and K-1952 - 19^7

5,141
3,666

Total Series F, G, J and K ••«.

8,807

5,155

3,632

41.47

29,367
132,924
162,291

29,133
85,350
114,483

234
47.574
47,i

.80
35,79
29.46

(Total matured «,.»•«.
Series ,r Total unmatured ..••
I Grand total •••••••»

Includes accrued discount.
OFFICE OF FISCAL ASSISTANT SECRETARY
Current redemption value.
It option of owner bonds may be held and will earn interest for additional periods
after original maturity dates*
(
"ncludes matured bonds which have not been presented for redemption.

CO
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r—»

STATUTORY D E B T LIMITATION
July 31, 1961
Awwf

i^Lgust 1 0 , 196l 1

( K Section 21 of Second Liberty Bond Act, as amended, provides that the face amount of obligations issued un
ot that Act, and the face amount of obligations guaranteed as to principal and interest by the United States (except such guaranteed obligations as may be held by the Secretary of the Treasury), "shall not exceed in the aggregate $285,000,000,000
(Act of June 30, 1959; U. S. C , title 31, sec. 757b), outstanding at any one time. For purposes of this section the current re_ m ^ > t l ° n va^u.e °^ a n v obligation issued on a discount basis which is redeemable prior to maturity at the option of the holder
shall be considered as its face amount." The Act of June 30, 1961 (P. L. 87-69 87th Congress) provides that during the ?f
period beginning on July 1, I96I and ending June 30, 1962, the above limitation ($285,000,000,000) shall be temporarily increased by $13,000,000,000.
I
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
$298,000,000,000
Outstanding Obligations issued under Second Liberty Bond Act, as amended
Interest-bearing :
Treasury bills $40,827,905,000
Certificates of indebtedness
Treasury notes
Bonds Treasury
•Savings (current redemp. value)
Depositary
R. E. A. series
Investment series
Special Funds Certificates of indebtedness
Tre a sury note s
Treasury bonds __

13*337,993,000
56,294.980.000

110,460,8?8 ,000

80,814,324,150
^7»57^*§232,06/
138*149,500
19,943,000
5.792,335.000

134,338,983,71?

5,852,028,000
8 ,128 , 1 1 1 ,000
30,217,837,000

Total interest-bearing
Matured, interest-ceased

44,197.976,000
2 8 8 , 9 9 7 ,837 ,717
311,244, 044

Bearing no interest:
United States Savings Stamps
Excess profits tax refund bonds
Special notes of the United States :
Internat'l Monetary Fund series
Internafl Develop. Ass'n

. 51*517,768
749, 6lo
2 , 5^1* 000 , 000
57 , 6 5 2 , 2 0 0

Total

2,650,919.584
. 291,960,0$L,345-

Guaranteed obligations (not held by Treasury):
Interest-bearing:
Debentures: F. H. A. & D C Stad. Bds._

237*405,200

Matured, interest-ceased
1*223,275
Grand total outstanding
Balance face amount of obligations issuable under above authority

238,628,475
2 9 2 , 1^8 , 629,j
5,801,370,5

Reconcilement with Statement of the Public Debt dU-Ly -^» -*-96July 3f,atei96l
(Daily Statement of the United States Treasury,
..

)

(Date)

Outstanding
Total gross public debt

.

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

2 9 2 , 404,093,29*

__

2 3 ° to20f^ll

_

2 9 2 ,642 ,721, (°*
444j09li9__

—

292,198,629,82(1
D-201

STATUTORY DEBT LIMITATION
As of. Ju__Z 31_ __/&

August 10, 196l

Section 21 of Second Liberty Bond Act, as amended, provides that the face amount of obligations issued under authority
by the United States (except such guarof that Act, and the face amount of obligations guaranteed as to principal and interest
int
re-

_.. ._

,

r

holder

shall be considered as its face amount." The Act of June 30, 1961 (P. L. 87-69 87th Congress) provides that during the
period beginning on July 1, I96I and ending June 30, 1962, the above limitation ($285,000,000,000) shall be temporarily increased by $13,000,000,000.
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
$298,000,000,000
Outstanding Obligations issued under Second Liberty Bond Act, as amended
Interest-bearing :
Treasury bills .$40,827,905,000
Certificates of indebtedness
Treasury notes
Bonds Treasury
•Savings (current redemp. value)
Depositary
R. E. A. series
Investment series
Special Funds Certificates of indebtedness
Treasury notes
Treasury bonds _.
Total interest-bearing
Matured, interest-ceased
Bearing no interest:
United States Savings Stamps
Excess profits tax refund bonds
Special notes of the United States ;
Internat'l Monetary Fund series
Internat'l Develop. Ass'n
Total

13*337,993,000
56,294.980,000

110,460,878,000

80,814,324,150
4r , 5 / ^ , 2 3 2 , 0 6 7
138 ,149 , 500
19 ,943 ,000
5.792,335,000
5»852,028,000
8,128, 111, 000
30,217,837,000

134,338,983,717

44,197,976,000
288,997 ,837,717
311,244,044

. 51,517,768
749,616
2 , .541, 000 ,000
51 , 652, 200

Guaranteed obligations (not held by Treasury):
Interest-bearing :
Debentures : F. H- A. & D C Stad. Bds._
237 » 405 , 200
Matured, interest-ceased
1,223,275
Grand total outstanding
Balance face amount of obligations issuable under above authority

2,6^0,919,584
291,960,0(^1,345.

238,628,475
__________
,
,

292,198 1 6 2 9 , 8 2 0
5,801,370,180

Reconcilement with Statement of the Public Debt -^Y" J>-*-» -LyO- <
(Daily Statement of the United States Treasury, July 31, 1961 )
(Date)
Outstanding Total 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

D-201

.
^_

292,4o4,093,291
238,628,475
292 ,642 ,721,76o
444tQQltQ46
292,198,629,820

i-S -4

yii^J^ y£^»*U
TH^^L
Ik, 1961

MMWI

or «_&«*_••_ vmu

BUL

arnaiua

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i a v i W f** *l,100t00ft
at the Mtes*i mmmrm Beak* mm *mmm% tk* tmm*mi
or txw**fc^u, mt 9l~*mj Mil* mm* tor *&3Q,000,000, or
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£_m a cotspois "iesne of 'ting* iiss laagih &M for the ease* aae^&i iav»ete4t t&e r*t*2_ ••
tk**# Utile mtiM f***i» jitl* «f M H » tmt tm 9l*4my mmm9 mmM 2.Ski, Ifc* **
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w«p. Is «enl«M_t# ylriUb <MS fH^ifUftt«it ««**»t «*4 ^adhi «r» «oa^i_t»il im tiiMI
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mm^mmm*im —-it
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v>"
8 3 -mm
-

CO

TREASURY DEPARTMENT
WASHINGTON, D.C.
August lk> 1961
)R RELEASE A. M. NEWSPAPERS, Tuesday, August 15, 1961,
RESULTS OF TREASURY*S WEEKLY BILL OFFERING

j The Treasury Department announced last evening that the tenders for two series of
^easury bills, one series to be an additional issue of the bills dated May 18, 1961,
yd the other series to be dated August 17, 1961, which were offered on August 9, were
ened at the Federal Reserve Banks on August llw Tenders were invited for $1,100,000,000,
U1 thereabouts, of 91-day bills and for $600,000,000, or thereabouts, of 182-day bills.
e details of the two series are as follows:

F

' MP-E OF ACCEPTED
ETITIVE BIDS.
High
Low
Average
y
b/
5U
83

91-day Treasury bills
maturing November 16, 1961
Approx. Equiv.
Price
Annual Rate
2.496ir~"'
99.369 y
2.532*
99.360
2.519* 1/
99.363

182-day Treasury bills
maturing February 15, 1962
Approx. Equiv*
Annual Rate
Price
98.616 b/
2.738*
2.781*
98.59U
2.765.2/
98.602

Excepting 3 tenders totaling $lt01,00Q
Excepting one tender of $100,000
percent of the amount of 91-day bills bid for at the low price was accepted
percent of the amount of 182-day bills bid for at the low price was accepted

:AL TENDERS APPLIED FOR AND ACCEPTED BY FEDERAL RESERVE DISTRICTS!
Accepted
Applied For _ Accepted
)lied For
%
l4762i,00O $ 4,614,000
' 36,079,000 |
20,683,000
80U,358,000
U52,788,000
1,507,170,000
683,976 ,000
ll,13i|,000
6,13U,000
39,236,000
1U,236 ,000
33,1^3,000
27,803,000
70,1*26,000
43,126 ,000
2,U90,000
2,1*90,000
13,785,000
13,785 ,000
5,08U,000
14,884,000
2ji,627,000
23,927 ,000
87,957,000
51,957,000
200,085,000
115,625,000
7,515,000
7,015,000
21,892,000
17,892 ,000
6,207,000
U,622,000
22,042,000
15,612 ,000
11,589,000
6,589,000
52,690,000
42,690,000
8,029,000
5,029,000
19,923,000
14,923 ,000
27,387,000
26,302,000
113,599,000
___ 94,079 ,000
$2,i2i,55U,ooo
$1,100,754,000 c/ $1,009,507,000 $600,227,000 d/
^Includes $21*6,291,000 noncompetitive tenders accepted at the average price of 99.363
jfwicludes $U5,911,000 noncompetitive tenders accepted at the average price of 98.602
j<tri}n a coupon issue of the same length and for the same amount invested, the return on
%i these bills would provide yields of 2.57$, for the 91-day bills, and 2.8U*, for the
# 182-day bills. Interest rates on bills are quoted in terms of bank discount with
itlr the return related to the face amount of the bills payable at maturity rather than
%f the amount invested and their length in actual number of days related to a 360-day
ji*f year* In contrast, yields on certificates, notes, and bonds are computed in terras
$i of interest on the amount invested, and relate the number of days reiinining in an
00 interest payment period to the actual number of days in the period, with semiannual
compounding if more than one coupon period is involved.
02
strict
"Joston
mm York
Philadelphia
Wlleveland
ftjichmond
Atlanta
UJmcago
P t . Louis
Minneapolis
P a r m s City
Dallas
an Francisco
!
TOTALS

o
—

_)

C9
—

V_ -.

Dr. Brazer is the author of numerous publications in the fields
of taxation and finance, covering both state and federal levels. He
is a member of the American Economic Association, the National
Tax Association, Tax Institute, Royal Economic Society, Canadian
Political Science Association, and the American Association of
University Professors.
Dr. Brazer is married to fad^J-^JL^ C^A^^
They have ^^ildren, /CWrf^ 7?^*^ ^X tOU^*,*

y^A*mJ$7'* &^^^

0O0

- 2 -

He taught economics at Wayne State University in Detroit, Michigan,
from 1950 to 1957. During this same period, Dr. Brazer also
directed and carried out research for tax study committees of the
State governments of Minnesota and Michigan.
Dr. Brazer was an instructor in finance at Lehigh University,
Bethlehem, Pennsylvania, from 1948 to 1950, following one year's
service as an instructor in economics at Rutgers University. In
addition, Dr. Brazer has served as consultant to various non-

partisan and non-profit agencies concerned with tax policy, and has
conducted research in broad areas of public finance.
Born in Montreal, Canada, on October 18, 1922, Dr. Brazer
received his early education at Stratheone Academy, Outremont,
Quebec, Canada. He received a Bachelor of Commerce degree from
McGill University in Canada, in 19^3, and Master of Arts and

Doctor of Philosophy degrees from Columbia University, New York Cit
in 19$© and 19^8, respectively. He served with the Canadian Army
from 1943 to 19^6. He obtained U. S. citizenship ©__A^ /<M7,

T" if, M\
FOR RELEASE:
4
DR. HARVEY E. BRAZER NAMED DIRECTOR OP
TREASURY'S OFFICE OF TAX ANALYSIS
Acting Secretary Henry H. Fowler today announced the appointment of Dr. Harvey E. Brazer, Professor of Economics at the
University of Michigan, as Director of the Treasury's Office of
Tax Analysis.
Dr. Brazer has been a consultant to the Treasury since May 23
of this year. di^xA. ^t/^c^^' ^Ut^u**-***-*-- &tmS jU*Af ^At^c^ 6~*~~J
* As Director of the Office of Tax Analysis, Dr. Brazer will
be the

JIII

m Ii njj-'r Trlrrirm economic advilser on tax policy matters

and will be responsible for the direction of a technical staff
engaged in relating economic data to tax plans and programs. He
will serve under the direction of Assistant Secretary Stanley S.
Surrey.
For the past #£e-e years,Dr. Brazer has been Professor of
Economics and Research Associate at the University of Michigan.

?'^ 3

TREASURY DEPARTMENT
W A S H I N G T O N , D.C.
August 15, 1961
FOR IMMEDIATE RELEASE
DR. HARVEY E. BRAZER NAMED DIRECTOR COF
TREASURY'S OFFICE OF TAX ANALYSIS
Acting Secretary Henry H. Fowler today announced the appointment
of Dr. Harvey E. Brazer, Professor of Economics at the University of
Michigan, as Director of the Treasury's Office of Tax Analysis.
Dr. Brazer has been a consultant to the Treasury since May 23
of this year, and will assume his new duties on September 1.
As Director of the Office of Tax Analysis, Dr. Brazer will be
the Treasury Department's principal economic adviser on tax policy
matters and will be responsible for the direction of a technical staff
engaged in relating economic data to tax plans and programs. He will
serve under the direction of Assistant Secretary Stanley S. Surrey.
For the past four years, Dr. Brazer has been Professor of
Economics and Research Associate at the University of Michigan. He
taught economics at Wayne State University in Detroit, Michigan, from
1950 to 1957. During this same period, Dr. Brazer also directed and
carried out research for tax study committees of the State governments
of Minnesota and Michigan.
Dr. Brazer was an instructor in finance at Lehigh University,
Bethlehem, Pennsylvania, from 19^8 to 1950, following one year's
service as an instructor in economics at Rutgers University. In
addition, Dr. Brazer has served as consultant to various non-partisan
and non-profit agencies concerned with tax policy, and has conducted
research in broad areas of public finance.
Born in Montreal, Canada, on October 18, 1922, Dr. Brazer
received his early education at Strathcona Academy, Outremont, Quebec,
Canada. He received a Bachelor of Commerce degree from McGill
University in Canada, in 19^3* and Master of Arts and Doctor of
Philosophy degrees from Columbia' University, New York City, in 19^7
and 1951, respectively. He served with the Canadian Army from 1943
to 19^6. He obtained U. S. citizenship in 1951.
Dr. Brazer is the author of numerous publications in the fields
of taxation and finance, covering both state and federal levels. He
is a member of the American Economic Association, the National Tax
Association, Tax Institute, Royal Economic Society, Canadian Political
Science Association, and the American Association of University
Professors.
Dr. Brazer is married to Marjorie Cahn. They have three children,
Karen, Mara and David, and will reside at 7704 Chatham Road,
Chevy Chase, Maryland.
D-20-^

£?

jyapS** **»****'•** * * * * *

AUG 4 iS.

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TREASURY DEPARTMENT
WASHINGTON, D.C.
-toly%4, 1961
IMMEDIATE RELEASE

TREASURY MARKET TRANSACTIONS I

Q»6>
During ^une 196l, 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
U

0O0

6,
J-A.0
D-_TT-

TREASURY DEPARTMENT
WASHINGTON, D.C.
August 15, 196l

IMMEDIATE RELEASE
TREASURY MARKET TRANSACTIONS IN JULY

During July 1961, 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
$25,585,900.

0O0

D-204

_K_m]__i(___xKm
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 subj

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 inter
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 whic

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

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

of discount at which bills issued hereunder are sold is not considered to accru

until such bills are sold, redeemed or otherwise disposed of, and such bills ar

cluded from consideration as capital assets. Accordingly, the owner of Treasury

bills (other than life insurance companies) issued hereunder need include in hi

income tax return only the difference between the price paid for such bills, wh

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

upon sale or redemption at maturity during the taxable year for which the retur
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 71
-_M_-X-S_S___3_M__-_
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 investraent securities. Tenders from others must be accompanied by payment of 2 percent of
the face amount of Treasury bills applied for, unless the tenders are accompanied by
an express guaranty of payment by an incorporated bank or trust company.
Immediately after the closing hour, tenders will be opened at the Federal Reserve Banks and Branches, following which public announcement will be made by the
Treasury Department of the amount and price range of accepted bids.

Those 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 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

p_y
bills dated May 25. 1961
, ( 92 days remaining until maturity date on
|0__J_
__p£J__
November 2k» 1961
) and noncompetitive tenders for $100,000 or less for the

P_tJ

?_B_JT~

183 -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 respec
tive issues. Settlement for accepted tenders in accordance with the bids must be
made or completed at the Federal Reserve Bank on

August 2k9 1961

, in cash or

other immediately available funds or in a like face amount of Treasury bills mat
ing August 24, l?6l

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
other disposition of the bills,, does not have a__y e__emx$tior_^ as such, and loss

ia____3_____

TREASURY DEPARTMENT
Washington
FOR IMMEDIATE RELEASE, 0_m__X___3C August 16, 1961
TREASURY'S WEEKLY BILL OFFERING
The Treasury Department, by this public notice, invites tenders for two series

of Treasury bills to the aggregate amount of $ 1,700,000,000 y or thereabouts; for
__J_X£
cash and in exchange for Treasury bills maturing August 2li, 1961
, in the amount
of $ 1,700,601,000 , as follows:
92 -day bills (to maturity date) to be issued August 2k

9

1961

in the amount of $1,100,000,000 , or thereabouts, representing an additional amount of bills dated May 25, 1961 ,

and to mature November 2k, 1961 , originally issued in the
f$L%?including$100,10_t,000 issued June lk9 196
amount of $600,255.000
h the additional and original bills

XpGtJ
to be freely interchangeable.
183 -day bills, for $600^:000,000 , or thereabouts, to be dated

vox

p_a
August 2lu 1961

, and to mature

February 23, 1962

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

and noncompetitive bidding as hereinafter provided, and at maturity their fac

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

denominations of $1,000, $5,000, $10,000, $100,000, $500,000 and $1,000,000 (ma
value).

Tenders will be received at Federal Reserve Banks and Branches up to the closi
Daylight Saving
hour, one-thirty o'clock p.m., Easte_T______a3____g_t time, Monday, August 21, 1961
____

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

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

TREASURY DEPARTMENT
maeunv \unmmmm..,mt - » ' » » » M i i i i i i i » M M W W W ^ i M « _ l « M — • — — — ! • _ _ _ _ _ •

WASHINGTON. D.C.
August 16, 1961
FOR IMMEDIATE RELEASE
TREASURY'S WEEKLY BILL OFFERING
The Treasury Department, by this public notice, invites tenders
for two series of Treasury bills to the aggregate amount of
$1,700,000,000, or thereabouts, for cash and in exchange for
Treasury bills maturing August 24, 1961, in the amount of
$1,700,601,000, as follows:
92-day bills (to maturity date) to be issued August 24, 1961, in
the amount of $1,100,000,000, or thereabouts, representing an
additional amount of bills dated May 25, 1961, and to mature
November 24. 1961, originally issued in the amount of $600,255,000
(including $100,104,000 issued June 14, 1961), the additional and
original bills to be freely interchangeable.
183-day bills, for $600,000,000, or thereabouts, to be dated
August 24, 1961, and to mature February 23, 1962.
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 Daylight
Saving time, Monday, August 21, 1961.
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
orD-205
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
May 25, 1961,
(92-days remaining until maturity date on
November 24, 1961) and noncompetitive tenders for $100,000
or less for the 183-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 August 24, 1961,
in cash or other immediately available funds or in a like face
amount of Treasury bills maturing August 24, 1961. Cash and
exchange tenders will receive equal treatment. Cash adjustments
will be made for differences between the par value of maturing
bills accepted in exchange and the issue price of the new bills.
The income derived from Treasury bills, whether interest or
gain from the sale or other disposition of the bills, does not have
any exemption, as such, and loss from the sale or other disposition
of Treasury bills does not have any special treatment, as such,
under the Internal Revenue Code of 1954. The bills are subject to
estate, inheritance, gift or other excise taxes, whether Federal or
State, but are exempt from all taxation now or hereafter imposed on
the principal or interest thereof by any State, or any of the
possessions of the United States, or by any local taxing authority.
For purposes of taxation the amount of discount at which Treasury
bills are originally sold by the United States is considered to be
interest. Under Sections 454 (b) and 1221 (5) of the Internal
Revenue Code of 1954 the amount of discount at which bills issued
hereunder are sold is not considered to accrue until such bills are
sold, redeemed or otherwise disposed of, and such bills are excluded
from consideration as capital assets. Accordingly, the owner of
Treasury bills (other than life insurance companies) issued hereunder
need include in his income tax return only the difference between
the price paid for such bills, whether on original issue or on
subsequent purchase, and the amount actually received either upon
sale or redemption at maturity during
the taxable year for which the
0O0
return is made, as ordinary gain or loss.
Treasury Department Circular No. 4l8, Revised, and this notice,
Federal
prescribe
of theirReserve
issue.
the terms
Bank
Copies
of
orthe
Branch.
of Treasury
the circular
bills
may
and
begovern
obtained
thefrom
conditions
any

7A

•ueu 2 1 , ISM*

FO_ KKUA

i 1,

_2i_-£U_&_
t8S>'J_TS 0^* fm^sewr*S 4^t\: ? BILL >y !»X«D

>\y <

Ths fr^cvsury nsptrtasiit o;»r.oynesd I.-.i etsslflg ^ a t t~* tenders for tso seri®® ©|
bills, Q M ««rl«f to b s * n tdditlsnsl Issss o f the bill® dat«f **y 2$, 1961,
the otb#r mrim
t o b€ dated August tli, 1963, *»t\lc* w o » n f e r > c ors a%ft^t 16, w i w
«t th@ Federal *_«?<, r*ve tato on August J l . _ sorters were iniri&ed \ _«r " 1,1~- ,,>_=*., UJU,.
s***rec'
of 92.A s o f thsresbeots, of X^J-vMj bills. fl
ills and for ,6
details o f Hi® tare series sra sc follow*?
!.i

FA«_B w

ucmm

Low
Aversgs

92-dsy trsssttiy M i l s
itsturlnr i a ^ » b @ r 2 & r 3g6l
Approx; Btgurv.
Fries
Annual Asts
•99.356""
99*m

2.$2C#
2*SQ3%y

ld3Hisy Trsssorjr bills
.Maturing...February 2g, ^jjJL.
Annuel Eafct
$
t

98,5?898.*»0G

•—rror*
2-797$
2.?93>i/

&/ ^cerrtir^ one teiader of 1300,000
75 p#re#nt of the snooxst of ^ - d & y bills bid £or mt the Ion trice urns aeoepfcod
p> percent of ih® ajuooat of i83«cl*j bills bis for st ths low price was «Msssstsi

TOTAL

fm*R£ Am_>r Fan AMI ACCEPTS, HI vai&rn* %iM&m& IU&TIUCTS.
AriiiRtd **or <___£M_ii_2L«_ Accttg-ted
17,^l6,sj^u
#: ii,o537Coo
31,ol6,OU3

district
Boston
ter Tot*
Fbllsdslphlm
ClevelAnd
Kicbwond
Atlsfft*
Chisago
St.. Louis
Kinssspells
fitnsa* City
Bulla*
San Franeiaco
VCftmM

1,376,130 ,UC-i_
30,_*C<.,J00
3>,131,C-__
£1,756,000
19,729,000
22X,»,0QD
23,810,000
23,2Ctfi,O0O
1*9,925,000
I6,2i96,000
tl#939,27e,OCiO

1_/,.\._„J,«JU0

35,131 , O A >
21,756,000
18,259,000

i52 f oeo t ooo
21,560,000
19,351,000
1IS,91S,00C)

_Otf8b6,000

JJ__liM2e b /
il,-100,«9l,000

l,ll6,2>_&,wvtf
6,l*_i3,Oiw
21,662,000
1,593,uOO
3,olii4,aot»

75,_»_»l*,uoo
li,213,OW>
6,916,000
13,2M,0&y

S,$93,o©a
^^J_:'^_l___^ >

n,^,?Wfjpoo-:

*" 3,2ii3,000;
1,353,000!
11,662,000)
l,593,000i
26,1^,000.1
3,Ubl,000|

ii,lii^,oao!
6,001,000 i
•3,i.63_000i
10.903.000 i

t6oo,iiU2,ooo;

V Isslwlss 1228,961,000 oojassnpstltits tsndsrs scosptsd st t&e svsrsgs -prlss of 99•&
"" * Inel^dss •'"'_j3,09lt,000 ttoncottpstitlrs tenders sccsptsd at ths ovsrags |rle« of 9t*S80
O B a. eoupo& lssus o f ths ssies Isoistb sad f o r tb« « « # taooat iisvostM, ths ret-m en
thsss bills would prorlds ylslds of 2 » » ' ^ for ibs 92n4ay bill®, «uad 2 . 6 7 A , for W»*
!83-<say Mils-* lat®r«st raits on bills s;« <piot«d to tsn^s of bstdi-dlieooiib'vith
the rot^rn related to t h s f&eo snemnt o f tho bills psysbls at maturity rather than
ths a»osi5t i«v@®t«d mud their length in. acus&l uuwuer of ^ & F » r#l««si to a 3^0-eajf
y^ir* la eoetrsst, ylslds m osrtlflsstes, notes, &m 'h&mlm ®ro eosputed in tmtm
is
of Interest on tits a a m m t invested, sod relsts tbs «iwb#r of d^ys rm&i®Xm
*°J
Interest pay»«nt period to th© sstnsl ai«bor o f days i® %bm period, with 9mimmm.t
soBpooodla^ if norm tlmm o a e coupon psriod Is involved.

TREASURY DEPARTMENT
W A S H I N G T O N , D.C.
August 21, 1961
iR RELEASE A.M. NEWSPAPERS,
igsday, August 22, 196l.
RESULTS OF TREASURY'S TrfEEKLY BILL OFFERING
The Treasury Department announced last evening that the tenders for two series of
easury bills, one series to be an additional issue of the bills dated May 25, 1961, and
. other series to be dated August 24, 196l, which were offered on August 16, were opened
the Federal Reserve Banks on August 21. Tenders were invited for $1,100,000,000, or
ereabouts, of 92-day bills and for $600,000,000, or thereabouts, of 183-day bills. The
tails of the two series are as follows:
KGE OF ACCEPTED
MPETITIvE BIDS:

High
Low
Average

92-day Treasury bills
maturing November 24, 1961
Approx. Equiv.
Price
Annual Rate
99.368 a/
27473?
99.356
2.520$
99.360
2.503$ 1/

183-day Treasury bills
maturing February 23, 1962
Approx. Equiv.
Price
Annual Rate
90.596
2.762%
98.578
2.797$
98.580
2.193% y

a/ Excepting one tender of 1300,000
75 percent of the amount of 92-day bills bid for at the low price was accepted
57 percent of the amount of 183-day bills bid for at the low price was accepted
TAL TENDERS APPLIED FOR AND ACCEPTED BY FEDERAL RESERVE DISTRICTS:
Accepted
Applied For
District
Applied For
Boston
$
11,098,000
%
31,816,000 I
1778.5,000
New York
1,116,554,000
1,376,130,000
,000
664,080
Philadelphia
6,453,000
30,404,000
l5,4oU ,000
Cleveland
21,662,000
35,131,000
,000
35,131,000
Richmond
1,593,000
21,756,000
21,756,000
Atlanta
3,044,000
19,739,000
18,259 ,000
Chicago
75,554,000
221,920,000
152,020 ,000
St. Louis
4,213,000
23,810,000
2l,56o
Minneapolis
6,916,000
23,204,000
,000
19,354,000
Kansas City
13,288,000
49,915,000
45,915 ,000
Dallas
8,593,000
16,496,000
14,846 ,000
San Francisco
25,824,000
88,953,000
74,353
TOTALS
$1,939,274,000
$1,100,494,000
b/
$1,294,792,000

Accepted
$ 3,243,000
525,658,000
1,353,000
11,662,000
1,593,000
2,794,000
26,154,000
3,141,000
4,416,000
6,002,000
3,483,000
10,903,000
$600,402,000 c/

Includes $228,961,000 noncompetitive tenders accepted at the average price of 99.360
Includes $43,094,000 noncompetitive tenders accepted at the average price of 98.580
On a coupon issue of the same length and for the same amount invested, the return on
these bills would provide yields of 2.55$, for the 92-day bills, and 2.87$, for the
183-day bills. Interest rates on bills are quoted in terms of bank discount with
the return related to the face amount of the bills payable at maturity rather than
the amount invested and their length in actual number of days related to a 360-day
year. In contrast, yields on certificates, notes, and bonds are computed in terms
1
of interest on the amount invested, and relate the number of days remaining in an
interest payment period to the actual number of days in the period, with semiannual
compounding if more than one coupon period is involved.
•206

-6-

• c

logical assurance of continuity in their programming. En route

home, I also read these same questions in the Latin American press.
It is imperative, therefore, that we of the United States
demonstrate our support for the Charter of Punta del Este -- that

we fulfill our irrevocable commitment to the Alliance for Progress
by helping to accelerate Latin America's sweeping surge toward a
better life in freedom for all of its citizens with adequate,
long-term foreign aid legislation.
As President Kennedy said in welcoming the United States
Delegation home from Punta del Este on Saturday:
"This is a partnership; there is work in it for all of us,
and the United States must surely do its full share."

I now *m£m®$myour questions.

A
0O0

ft+V-y

&

-5-

7"7

LM-

We must recognize that questions abemt the future of the
Alliance for Progress are not our prerogative alone.

They are

also being asked in Latin America about us -- about our intention^
and our capacity to help make/the Alliance for Progress a success
These questions were raisedifat Punta del Este by o
who boasted that only their monolimc form
of statism could produce progress, who

the honest

differences of opinion that characterize «wr democratic govern-

t

mental process, and who predicted thatfour pledges at Punta del
Este
y^ome of our staunchest friends/
told me that latent doubts about our intentions will not be
resolved until we demonstrate our determination to help bring
their impoverished peoples into the Twentieth Century by providing
e financial and technical assistance on a long-term basis

plan their own national efforts with some

_->

OB*** j€m>«

/
-_-

_*$
_*-£J*_t,.~*.-_L...i

*0

>_? „ J

___*.._.

&jg*1*

^ f0.

JS^***-- *'' *«**4_*

determined to bring increasingly more abundant and more meaningful
lives to/ all of their citizens within frameworks of free institutions.Y/The Charter we signed at Punta del Este -- in truth, an
economic Magna Carta for the Americas -- fully attests to their
intentions.
As for the second part of the question, let me say with
complete candor that their capacity to fulfill the spirit of
Punta del Sste depends in Jjjsj§r large measure upon what we do here
in Washington -- and within the next few days.

No matter how

good their intentions, no matter how much national effort is
brought to bear upon their enormous problems, the leaders of
Latin America cannot translate their ambitious plans and the
dreams of their peoples into reality without 'UMMyiiiTfT. financial
and technical assistance from, us --.oo. the long-term basis which

4
is indispensable to sound programming

Since my return from Punta del Este, I have been asked
whether the leaders of Latin America have both the intention and
the capacity to undertake internal reforms and other measures of
self-help which must be pressed forward if the Alliance for
Progress is to succeed. The same question has appeared in our
press.
Recalling the spirit of dedicated drive and cooperation
that prevailed at Punta del Este during the closing days of the
Conference, I can answer the first part of that question with

an unqualified* yes I The representatives of the other __ssfl**e>
American Republics demonstrated at Punta del Este that they are

-2in Latin America - for tax reform and land reform, for self-help
measures in education, health and housing, for the mobilization
of domestic resources with the full participation of private

enterprise.
It also provides for the establishment by the Latin
American countries of comprehensive, long-term programs for
economic and social development, with strong inter-American
machinery to assist in the formulation of these programs,
evaluate their adequacy and follow their progress and execution.
Such programs are essential to the intelligent use of economic
resources in the development process.
The Charter also provides for foreign assistance to Latin
America from the United States, from 0 international financial
institutions, and from other friendly countries.

fo$ fl(~cms£! of*>(^>

P&CIU&&Y

01

STATEMENT OF DOUGLAS DILLON, SECRETARY OF THE TREASURY^
AT JOINT PRESS
!SS CONFERENCE WITH SECRETARY OF STATE
STAT DEAN RUSK.
DEPARTMENT
1ENT OF STATE AUDITORIUM, WASHINGTON, D. C.
TUESDAY, AUGUST 22, 1961, 4:30 P. M.

I can say without reservation that the Conference of Punta
del Este was a complete success. The Charter produced there
establishing an Alliance for Progress marks an important turning
point in the history of our relations with Latin America. We
must now work together with the democratic leaders of Latin
America to ensure that the great purposes of the Charter will be
accomplished, and mmthat its/promise will become reality for
the millions in Latin America who urgently seek a better life.
•qf the Cliaitei' liava1 i_e_ffl -Barte" m*Hg&mb4&-m)m»j*jmmmmm^^
provides in full measure for those principles
of self-help which are essential to economic and social progress

TREASURY DEPARTMENT
Washington

FOR RELEASE:

UPON DELIVERY

STATEMENT OF DOUGLAS DILLON, SECRETARY OF THE TREASURY,
AT JOINT PRESS CONFERENCE WITH SECRETARY OF STATE DEAN RUSK,
DEPARTMENT OF STATE AUDITORIUM, WASHINGTON, D. C.
TUESDAY, AUGUST 22, l$6l, 4:30 P.M.
I can say without reservation that the Conference of Punta del
Este was a complete success. The Charter produced there establishing
an Alliance for Progress marks an important turning point in the
history of our relations with Latin America. We must now work
together with the democratic leaders of Latin America to ensure that
the great purposes of the Charter will be accomplished, and to ensure
that its shining promise will become reality for the millions in
Latin America who urgently, seek a better life.
The Charter provides in full measure for those principles of
self-help which are essential to economic and social progress in
Latin America — for tax reform and land reform, for self-help
measures in education, health and housing, for the mobilization of
domestic resources with the full participation of private enterprise.
It also provides for the establishment by the Latin American
countries of comprehensive, long-term programs for economic and
social development, with strong inter-American machinery to assist
in the formulation of these programs, evaluate their adequacy and
follow their progress and execution. Such programs are essential to
the intelligent use of economic resources in the development process.
The Charter also provides for foreign assistance to Latin America
from the United States, from international financial institutions,
and from other friendly countries.
Since my return from Punta del Este, I have been asked whether
the leaders of Latin America have both the intention and the
capacity to undertake internal reforms and other measures of selfhelp which must be pressed forward if the Alliance for Progress is
to succeed. The same question has appeared in our press.
Recalling the spirit of dedicated drive and cooperation that
prevailed at Punta del Este during the closing days of the Conference,
I can answer the first part of that question with an unqualified:
Yes I The representatives of the other American Republics demonstrated
at Punta del Este that they are determined to bring Increasingly more
abundant and more meaningful lives to all of their citizens within
D-207

- 2•

frameworks of free institutions. They are well aware that to achieve
the goals they have set themselves, at least 80$ of the funds required
must be raised in Latin America. The Charter we signed at Punta del
Este — in truth, an economic Magna Carta for the Americas — fully
attests to their intentions.
As for the second part of the question, let me say with complete
candor that their capacity to fulfill the spirit of Punta del Este
depends in large measure upon what we do here In Washington — and
within the next few days. No matter how good their intentions, no
matter how much national effort is brought to bear upon their enormous
problems, the leaders of Latin America cannot translate their
ambitious plans and the dreams of their peoples into reality without
financial and technical assistance from us — and on the long-term
basis which is indispensable to sound programming.
We must recognize that questions about the future of the
Alliance for Progress are not our prerogative alone. They are also '
being asked in Latin America about us_ — about our intentions and
our capacity to help make the Alliance for Progress a success.
These questions were raised in open meeting at Punta del Este by
the representative of the Castro regime, who boasted that only their
monolithic form of statism could produce progress, who derided the
honest differences of opinion that characterize the democratic
governmental process, and who predicted that because of our
democratic form of government, our pledges at Punta del Este could
not be relied upon. Some of our staunchest Latin American friends
also told me that latent doubts about our intentions will not be
resolved until we demonstrate our determination to help bring their
improverished peoples into the Twentieth Century by providing
financial and technical assistance on a long-term basis so that they
may plan their own national efforts with some logical assurance of
continuity in their programming. En route home, I also read these
same questions in the Latin American press.
It Is imperative, therefore, that we of the United States
demonstrate our support for the Charter of Punta del Este — that
we fulfill our irrevocable commitment to the Alliance for Progress —
by helping to accelerate Latin America's sweeping surge toward a
better life in freedom for all of its citizens with adequate, longterm foreign aid legislation.
As President Kennedy said In welcoming the United States
Delegation home from Punta del Este on Saturday:
"This is a partnership; there is work in it for all of us,
and the United States must surely do its full share."
0O0

-It -

84

In closing, Mr. Chairman, I wish to add a word about

ths effect of these eoiaaaitments ©n our balanee*o£-payments.
I am satisfied that our payments situation will he amply
protected and will not be worsened. The major part of
the funds to he provided by the United States is already
being extended by methods which assure their expenditure
in the United States, as is the case with Export-Import
lank loans sad P.L. 400, mnd with a substantial part of
the funds under the new aid legislation* Due to the
nature of expenditures under the Social Progress fund,
a somewhat larger part of the over-all aid total may he
spent for local costs in Latin America than is the case
with other aid programs, hut in any event these expend!*
tures will enhance the ability of Latin America to buy
goods and services from their normal United States
suppliers.

1170

-w -

85

envisaged in this Chapter. Such assistance will he
allocated to both social and economic development,
and, where appropriate, will take the fens of grants
or loans on flexible terms and conditions, fhe
participating countries will request the assistance
of other capital-exporting countries m4 international
institutions so that they may provide assistance for
the attainment of these objectives.SI
this provision is am over-all promise by the tnited
States that if the Latin American countries do.their part,
and if our friends and allies in other industrialized
countries will also participate, we the United States
stand ready to ^m our part also. This mutual dedication
to our common goals is the heart of the Alliance for Progrei*

1170

8S
- IT the third provision in the Charter relating to H. S.
financial assistance is baaed upon President Kennedy's
address of March 13, 1961. It states in paragraph 2 of
Chapter IV, that:
"2. The United States will assist those
participating countries whose Development Programs
establish self-help measures, economic policies and
programs consistent with the goals and principles
of this Charter, to supplement the domestic efforts
of such countries, the United States is prepared to
allocate resources which, along with those anticipated from other external sources, will be of a
scope and magnitude adequate to realize the goals

1170

- 15 -

.£>>

States stands m&4y to take prompt action on applications for such assistance. Applications relating
to existing situations should he submitted within the
next 60 days.
}!

3. the United States will assist in the

realization ©f these short-term measures with a view
to achieving concrete results from the Alliance for
Progress at the earliest possible moment. In connection with the measures set forth above, and in accordance with the statement of President Kennedy,
the United States will provide assistance under the
Alliance, including assistance for the financing of
short-term measures, totaling more than *•* billion
timUmm in the year ending Mareh lift."

1170

88

-uthe reference t© 0. S. fnhiic assistant© of more
than mmm billion <k*Um& during the yssr ending March
19S2 was hasad upon Resident HmmmMf* s message to the
conference and my opening speech. It includes C. S.
assistance in all forms for the 12 months ending next
March ~ increased i^orf*lmport lank loans* ®&%iMi®am*
eispeaditures from the Social Progress fund already appro*
priated hy the &mg_?*ss, F.L. 48§t and both developiaent
lending and contingency assistance provided for in the
foreign aid bill now before the Congress, this, again,
is a minimum estimate of the funds which should he obligated by the II. S. for Latin America if the Alliance for
Progress is to get off to a good start.

1170

- 14 -

8Q

The second provision of the Charter relating to
asternal assistance, title It, Chapter III. deals with
emergency sad short-term measures, including the completion of development projects already under way, measures
to assist distressed areas and relieve unemployment and
the beginning steps which must be taken now to formulate
long-term development programs within a reasonable time.
Paragraphs 1 and 3 of this Chapter, dealing with waited
States assistance read as follows:
"1. Recognizing that a number of Latin American
countries, despite their hast efforts, may require
emergency financial assistance, the United States
will provide assistance from the funds which are or
may be established for such purposes. The United

1170

'~U

-13-

to &*££» -«_*»i_ta _ver wm mm*. 1ft- fmWtB m®m *•*• •

it public m4 prto^i,

teMHhW

*•

tttfttttttti**-** @-~**« i»diistriall»ed
as well us the U. S# A# ia «Vfrom mm *immp®im #f !*•*» iMriMS •«*•*• «•* *

ti« «HMI *»* ** «*»*** •* *** mm*j
outside world to supply it. .«Mi

m®ml£ m$M mmm that WHlor mm mt ****for development in Latin

f*y the tetia A)n<nrU<mfr mmmmtem**

Ihis tfcqpjfpUjF ^jmrntim

to undertake the

«fl*m..«fc«* wm> b* involved*

4

p*]***** •&>• ^i^

1170

-11-

While at Punta del Sste t followed closely the reports
on the Conference which mptfmmtmM In the American press.
_*: «

Some of these reports, having been filed &mtn$

the un-

certainties mnM confusions which inevitably surround the
progress of an important international conference, were

ut

erroneous with respect to 8. S. commitments for foreign
assistance. I would like therefore to clarify this matter
for the Information of the Committee..
There are three sections of the Charter which relate
to tha provision of external capital to Latin America to
<*-m

support Latin America's own development efforts.
the first of these three section* appears in title tt$
Chapter I of the Charter setting forth tha basic requirements for development. Paragraph 4 of this Chapter states
that, in order to achieve development goals, it will he

1170

_> ^

As you know, I have just returned item Punta del
Este, Uruguay, where X lad the Delegation of the United
States to the Special Meeting at Ministerial Level of the
Inter-Amerieaa Economic and Social Council.
At this meeting, agreement was reached on the Charter
of Punta del lata, establishing en Alliance for Progress
smong the American Republics. :.^,^,;. .,
the Charter of Punta del Bate will become a landmark
in the history of the Western Hemisphere. It provides in
full measure for those principles of self-help which are
essential to economic mad social progress in Latin America
for tax reform and land reform, for self-help measurss in
education, health and housing, for tha mobilisation of
domestic resources with the foil participation of private
enterprise.

1170

35
•8It is not in every case practicable or even desirable
to require that foreign assistance funds be limited
exclusively to the procurement of United States goods and
Services. In some cases, particular commodities financed
by aid dollars are not available in the United States, or
may not be available here in the time required. Also,
there axm certain situations that sometimes require the
transfer of aid through cash grants, a part of which is
ultimately spent for the goods of other countries.
Nevertheless, through our procurement policy we will held
to a minimum any adverse effect of aid spending on
our balance of payments situation. I am satisfied
that the present directives are adequate to assure
this result.

117,0

*7~

3S

States, guch expenditures — which are accompanied by lilt
American exports — have no adverse impact on our balance
of payments, tha foot that foreign assistance has been
largely accompanied by mm outflow of American exports
is not wail understood hy those who seek to cure our balance of payments deficit by curtailing foreign economic
assistance. ^>®®#- ^** mmmtimm.m^< ^e ths
For as long as our international payments situation
requires, la administering the Act for International Development, insofar as the procurement of goods and services is
involved, our objective will he to reserve between seventy*
five and eighty percent of tha available funds for procurement of United States goods and services. Because of earlier
commitments, this goal cannot he achieved immediately, hut
our efforts in this direction will have an increasingly
favorable effect on our balance of payments position.

1170

•»0«"

are expected to Increase substantially and we anticipate that
a balanced budget cam be achieved without a tax increase.
Now, you may wall ask, what is ths relationship of
the foreign economic assistance program to our balance of
payments? this is a matter that especially interests me
as Secretary of ths treasury, the program proposed is
consistent with our efforts to achieve and sustain over-all
balance in our international payments. I wish to emphasias
that it is the form in which aid is extended ~ rather than
the amount to he provided -- that is most relevant to this
question. Under the new program — as at present — we will
continue to place primary emphasis on the purchase of United
States foods mm* services by aid recipients, tha preponderaat
bulk of foreign aid expenditures will be made in the United

11-70 -

*5~

3S
ensuing years will, of course, he taken into account In
the presentation of the budgets for those years.
On the revenue side of our budget, income in the current
fiscal year will still substantially reflect the recession
level earnings of the first half of calendar 1961. Principally
because of increased defense expenditures and reduced races*
sion revenues, m

excess of expenditures over receipts

amounting to over §km billion dBfr-lani has been estimated
for fiscal 1961* Parenthetically, I might say that this is
not at all unusual in the year immediately following a period
of recession. Moreover, our unused plant capacity and our
• _ • - lt*4

excessive unemployment will prevent the budget deficit we
face in the currant fiscal year from having inflationary
results. Looking forward to Fiscal tear 1963, our

1170

.4-

so

t am only too well aware that there mem some wii© single
out this program and seek to attribute to it alone the
prospective excess of expenditures over receipts in the
over-all budget for Fiscal tear 1962• this, of course, is
trim
not the case.
•

*&mW

For as this Committee knows, only a fraction of the

Fiscal Year 1942* Estimated expenditures under this and
previous foreign economic aid programs in 1961 are
million doMaws, Together
with military aid expenditures this mmtsm a total of
million cMbtars -- approximately
the same as the estimate contained in the budget presented
to the Congress by President Eisenhower. Expenditures in

1170

, excluding funds carried over from previous years 1
appropriations*

t h e total cost o f the program amounted to

less than one percent of our gross national product — a
• ••: mmu .„* , , * „.
figure well within the capacity o f o u r economy.
I mmm?&
the Senate has voted to reduce the authorisation for
the Act for International Development by slightly more than
<awf^»-'lim^hpg<Hgtfty million de-4*ma, mm* also to curtail
military assistance by thgiie huedsed thirty*#ive million
d^t_-a_m. the total authorised by the Senate hill for the
fiscal year 1962 is four billion seventy-six
, nearly mmmmwt^tommMmmyM "mdbtrlxon dollars below
the amount requested by the President,

*mmthis substantially

reduced amount is even more clearly within the capacity of

our economy •

1170

101
-2that X hope my belief that an adequate and soundly conceived
foreign economic assistance program merits high priority
as one of our most pressing national needs will carry some
weight with this Committee, the program which forms the
basis of tha appropriations request is soundly conceived.
It is responsive to our national nmmd for an adequate foreign
aid program. It is essential to our own security and wellbeing and that of the entire Free World."i
Moreover, it is a program the united States can afford.

the President requested a total of two hi. 1 feaa-aight hundred
mnrnnlrjr iiflht million dolAart in Fiscal 1962 for the Act
for International development. In addition, the military
assistance request for 1962 amounted to mm hllMmi €t#t
hundred eighty * five million dollar a. this made up an over*

4 Vy 7 -> 3
all program of fa4*_^^ilUna seven hundred- sixty • three millls*.

1170

<0o
Statement of the Honorable Douglas Dillon,
Secretary of the Treasury,
Before the
Committee on Appropriations,
United States Senate,
in Support of the President's Foreign Aid Program
Wednesday, August 23, 1961
10s30 a.m., IDT
It is a privilege to appear before this Committee in
behalf of the appropriations requested by the President
under the foreign aid legislation submitted by him to the
Congress. I wish to report on the recent Alliance for
Progress meeting at Punta del Este, but first I would like
to comment on the major financial aspects of the economic
aid program, which are my responsibility as Secretary of
the Treasury and Chairman of the National Advisory Council
on International Monetary and Financial Problems. As
Secretary of the Treasury, I have the responsibility for
financing approved Government programs*
It is precisely because of this heavy responsibility

Jo

TREASURY DEPARTMENT
Washington

109

August 23, 196l
FOR RELEASE: UPON DELIVERY
STATEMENT OP THE HONORABLE DOUGLAS DILLON,
SECRETARY OP THE TREASURY,
BEFORE THE
COMMITTEE ON APPROPRIATIONS,
UNITED STATES SENATE,
IN SUPPORT OP THE PRESIDENT'S FOREIGN AID PROGRAM
WEDNESDAY, AUGUST 23, 196l
10:30 A.M., EDT
It is a privilege to appear before this Committee in behalf of
the appropriations requested by the President under the foreign aid
legislation submitted by him to the Congress. I wish to report on
the recent Alliance for Progress meeting at Punta del Este, but
first I would like to comment on the major financial aspects of the
economic aid program, which are my responsibility as Secretary of
the Treasury and Chairman of the National Advisory Council on
International Monetary and Financial Problems. As Secretary of the
Treasury, I have the responsibility for financing approved Government
programs.
It is precisely because of this heavy responsibility that I hope
my belief that an adequate and soundly conceived foreign economic
assistance program merits high priority as one of our most pressing
national needs will carry some weight with this Committee. The
program which forms the basis of the appropriations request is
soundly conceived. It Is responsive to our national need for an
adequate foreign aid program. It is essential to our own security
and well-being and that of the entire Free World.
Moreover, it Is a program the United States can afford. The
President requested a total of $2,878 million in Fiscal 1962 for the
Act for International Development. In addition, the military
assistance request for 1962 amounted to $1,885 million. This made up
an over-all program of $^763 million, excluding funds carried over
from previous years' appropriations. The total cost of the program
amounted to less than one percent of our gross national product •— a
figure well within the capacity of our economy.
The Senate has voted to reduce the authorization for the Act
for International Development by slightly more than $350 million,
and also to curtail military assistance by $335 million. The total
'authorized by the Senate bill for the fiscal year 1962 is
$4,076,500,000, nearly $700 million below the amount requested by the
D-208
within
President.
the capacity
This substantially
of our economy.
reduced amount is even more clearly

i n -i
- 2 I am only too well aware that there are some who single out this
program and seek to attribute to it alone the prospective excess of
expenditures over receipts in the over-all budget for Fiscal Year
1962. This, of course, is not the case.
For as this Committee knows, only a fraction of the new request
for funds will result in expenditures during Fiscal Year 1962.
Estimated expenditures under this and previous foreign economic aid
programs in 1962 are $1,950 million. Together with military aid
expenditures this means a total of $3,650 million — approximately
the same as the estimate contained in the budget presented to the
Congress by President Eisenhower. Expenditures in ensuing years
will, of course, be taken into account in the presentation of the
budgets for those years.
On the revenue side of our budget, income in the current fiscal
year will still substantially reflect the recession level earnings
of the first half of calendar 1961. Principally because of increased
defense expenditures and reduced recession revenues, an excess of
expenditures over receipts amounting to over $5 billion has been
estimated for Fiscal 1962. Parenthetically, I might say that this is
not at all unusual in the year immediately following a period of
recession. Moreover, our unused plant capacity and our excessive
unemployment will prevent the budget deficit we face in the current
fiscal year from having inflationary results. Looking forward to
Fiscal Year 1963, o u r revenues are expected to increase substantially
and we anticipate that a balanced budget can be achieved without a tax
increase.
Now, you may well ask, what Is the relationship of the foreign
economic assistance program to our balance of payments? This is a
matter that especially interests me as Secretary of the Treasury.
The program proposed is consistent with our efforts to achieve and
sustain over-all balance in our international payments. I wish to
emphasize that it is the form in which aid is extended — rather than
the amount to be provided — that is most relevant to this question.
Under the new program — as at present — we will continue to place
primary emphasis on the purchase of United States goods and services
by aid recipients. The preponderant bulk of foreign aid expenditures
will be made in the United States. Such expenditures — which are
accompanied by American exports — have no adverse impact on our
balance of payments. The fact that foreign assistance has been
largely accompanied by an outflow of American exports is not well
understood by those who seek to cure our balance of payments deficit
by curtailing foreign economic assistance.
For as long as our international payments situation requires,
in administering the Act for International Development, Insofar as
the procurement of goods and services is involved, our objective
will be to reserve between 75 and 80 percent of the available funds

- 3 -

1P,H

for procurement of United States goods and services. Because of
earlier commitments, this goal cannot be achieved immediately, but
our efforts in this direction will have an increasingly favorable
effect on our balance of payments position.
It is not in every case practicable or even desirable to require
that foreign assistance funds be limited exclusively to the procurement of United States goods and services. In some cases, particular
commodities financed by aid dollars are not available in the
United States, or may not be available here in the time required.
Also, there are certain situations that sometimes require the
transfer of aid through cash grants, a part of which is ultimately
spent for the goods of other countries. Nevertheless, through our
procurement policy we will hold to a minimum any adverse effect of
aid spending on our balance of payments situation. I am satisfied
that the present directives are adequate to assure this result.
As you know, I have just returned from Punta del Este, Uruguay,
where I led the Delegation of the United States to the Special
Meeting at Ministerial Level of the Inter-American Economic and
Social Council.
At this meeting, agreement was reached on the Charter of Punta
del Este, establishing an Alliance for Progress among the American
Republics.
The Charter of Punta del Este will become a landmark in the
history of the Western Hemisphere. It provides in full measure for
those principles of self-help which are essential to economic and
social progress in Latin America — for tax reform and land reform,
for self-help measures in education, health and housing, for the
mobilization of domestic resources with the full participation of
private enterprise.
It also provides for the establishment by the Latin American
countries of comprehensive, long-term programs for economic and
social development, with strong inter-American machinery to assist
in the formulation of these programs, evaluate their adequacy and
follow their progress and execution. Such programs are essential to
the intelligent use of economic resources in the development process.
The Charter also makes provision for foreign assistance to
Latin America from the United States, from the international
financial Institutions and from other friendly countries,
Copies of the Charter and the related Declaration have been made
available to members of the Committee for their examination.
While at Punta del Este I followed closely the reports on the
•Conference which appeared In the American press. Some of these
reports, having been filed during the uncertainties and confusions
which inevitably surround the progress of an important international
conference, were erroneous with respect to U. S. commitments for

. 4 -

^U"

foreign assistance. I would like therefore to clarify this matter
for the information of the Committee.
There are three sections of the Charter which relate to the
provision of external capital to Latin America to support Latin
America's own development efforts.
The first of these three sections appears in Title II,
Chapter I of the Charter setting forth the basic requirements for
development. Paragraph 4 of this Chapter states that, in order to
achieve development goals, it will be necessary:
"That the Latin American countries obtain sufficient
external financial assistance, a substantial portion of
which should be extended on flexible conditions with
respect to periods and terms of repayment and forms of
utilization, in order to supplement domestic capital
formation and reinforce their import capacity,* and that,
in support of well-conceived programs, including the
necessary structural reforms and measures for the
mobilization of internal resources, a supply of capital
from all external sources during the coming ten years of
at least $20 billion be made available to the Latin
American countries, with priority to the relatively less
developed countries. The greater part of this sum should
be in public funds."
The estimate of $20 billion in capital assistance to Latin America
over the next 10 years from all external sources, public and private,
including the international institutions and other industrialized
countries as well as the U. S. is in my judgment a minimum estimate
from the viewpoint of Latin American needs and a conservative
estimate from the viewpoint of the ability of the outside world to
supply it. Given adequate self-help measures a supply of outside
capital of about $2 billion a year would still mean that 80$
or more of total resources for development in Latin America must be
provided by the Latin Americans themselves. This they fully realize
and they are prepared to undertake the necessary self-help efforts
that will be involved.
The second provision of the Charter relating to external
assistance, Title II, Chapter III, deals with emergency and short-term
measures, Including the completion of development projects already
under way, measures to assist distressed areas and relieve unemployment
and the beginning steps which must be taken now to formulate longterm development programs within a reasonable time. Paragraphs 1 and
3 of this Chapter, dealing with United States assistance reads as
follows:
"1. Recognizing that a number of Latin American
countries, despite their best efforts, may require
provide
established
emergencyassistance
financial
for such
from
assistance,
purposes.
the funds
The
the
which
United
areStates
or maywill
stands
be

1n
- 5 -.
ready to take prompt action on applications for such
assistance. Applications relating to existing situations
should be submitted within the next 60 days.
"3. The United States will assist in the realization
of these short-term measures with a view to achieving
concrete results from the Alliance for Progress at the
earliest possible moment. In connection with the measures
set forth above, and in accordance with the statement of
President Kennedy, the United States will provide assistance
under the Alliance, including assistance for the financing
of short-term measures, totaling more than $1 billion in
the year ending March 1962."
The reference to U. S. public assistance of more than $1 billion
during the year ending March 1962 was based upon President Kennedy's
message to the conference and my opening speech. It includes U. S.
assistance in all forms for the 12 months ending next March —
increased Export-Import Bank loans, anticipated expenditures from
the Social Progress fund already appropriated by the Congress,
P.L. 480, and both development lending and contingency assistance
provided for in the foreign aid bill now before the Congress. This,
again, is a minimum estimate of the funds which should be obligated
by the U. S. for Latin America if the Alliance for Progress is to
get off to a good start.
The third provision in the Charter relating to U. S. financial
assistance is based upon President Kennedy's address of March 13,
196l. It states in paragraph 2 of Chapter IV, that:
"2. The United States will assist those participating
countries whose Development Programs establish self-help
measures, economic policies and programs consistent with
the goals and principles of this Charter, To supplement
the domestic efforts of such countries, the United States
is prepared to allocate resources which, along with those
anticipated from other external sources, will be of a
scope and magnitude adequate to realize the goals envisaged
in this Chapter, Such assistance will be allocated to both
social and economic development, and, where appropriate, will
take the form of grants or loans on flexible terms and
conditions. The participating countries will request the
assistance of other capital-exporting countries and
international institutions so that they may provide
assistance for the attainment of these objectives."
This provision is an over-all promise by the United States that
if the Latin American countries do their part, and if our friends
and allies in other industrialized countries will also participate,
we the United States stand ready to do our part also. This mutual
dedication
Progress. to our common goals is the heart of the Alliance for

i no
- 6In closing, Mr. Chairman, I wish to add a word about the effect
of these commitments on our balance-of-payments. I am satisfied that
our payments situation will be amply protected and will not be
worsened. The major part of the funds to be provided by the United
States is already being extended by methods which assure their
expenditure in the United States, as is the case with Export-Import
Bank loans and P.L. 480, and with a substantial part of the funds
under the new aid legislation. Due to the nature of expenditures
under the Social Progress Fund, a somewhat larger part of the overall aid total may be spent for local costs in Latin America than is
the case with other aid programs, but in any event these expenditures
will enhance the ability of Latin America to buy goods and services
from their normal United States suppliers.

0O0

- 3 -

*""

___§_X____^_I^
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 subj

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 inter
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 whic

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

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

of discount at which bills issued hereunder are sold is not considered to accru

until such bills are sold, redeemed or otherwise disposed of, and such bills ar

cluded from consideration as capital assets. Accordingly, the owner of Treasury

bills (other than life insurance companies) issued hereunder need include in hi

income tax return only the difference between the price paid for such bills, wh

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

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

- 2Till
J. — *w

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 ex-

cept for their own account. Tenders will be received without deposit from incorp
rated banks and trust companies and from responsible and recognized dealers in

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 accompanie
an express guaranty of payment by an incorporated bank or trust company.
Immediately after the closing hour, tenders will be opened at the Federal Re-

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

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

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

of the Treasury expressly reserves the right to accept or reject any or all tend
in whole or in part, and his action in any such respect shall be final. Subject

these reservations, noncompetitive tenders for $ 200,000 or less for the additio
bills dated Jane 1, 1961 , ( 91 days remaining until maturity date on

?B_J

tm

November 50, 1961 ) 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 respec-

tive issues. Settlement for accepted tenders in accordance with the bids must be
made or completed at the Federal Reserve Bank on August 31. 1961 y *n

castl or

other immediately available funds or in a like face amount of Treasury bills mat
ing August 31. 1961 Cash and exchange tenders will receive equal treatment.

X2&_ic
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 a_y exej^stioik- as such, and l

X_C3SDEC_X_5Q.
;«.».>'>,••.>,.,'i»'«>«A»'^*._>'(»

TREASURY DEPARTMENT
Washington
FOR IMMEDIATE RELEASE 5C€XKK_X_K^X August 23, 1961

TREASURY'S WEEKLY BILL OFFER2UG
The Treasury Department, by this public notice, invites tenders for two series

of Treasury bills to the aggregate amount of $ 1,700,000,000 y or thereabouts,

cash and in exchange for Treasury bills maturing August 51. 1961 , in the amou
of $ 1,601,174.000 , as follows:
91 -day bills (to maturity date) to be issued

August 51. 1961

"*S$"

y

_&k
in the amount of $1,100,000.000 , or thereabouts, representing an additional amount of bills dated

June 1. 1961

and to mature November 50, 1961 y originally issued in the
_ $ & (including $100,104,000 issued June 14, 196:
amount of $600,372,000 /y the additional and original bills
to be freely interchangeable.
182 -day bills, for $ 600.000.000 y

or

thereabouts, to be dated

August 51. 1961 y and to mature March 1, 1362
The bills of both series will be issued on a discount basis under competitive

and noncompetitive bidding as hereinafter provided, and at maturity their fac

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

denominations of $1,000, $5,000, $10,000, $100,000, $500,000 and $1,000,000 (m
value).

Tenders will be received at Federal Reserve Banks and Branches up to the closi
Daylight Saving
j
hour, one-thirty o'clock p.m., Eastern/ktentask time, Monday, August 28, 1961
'
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
price offered must be expressed on the basis of 100, with not more than three

- 2o f

TREASURY DEPARTMENT
WASHINGTON. D.C.
August 23, 1961
FOR IMMEDIATE RELEASE
TREASURYfS WEEKLY BILL OFFERING
The Treasury Department, by this public notice, invites tenders
for two series of Treasury bills to the aggregate amount of
$1,700,000,000, or thereabouts, for cash and in exchange for
Treasury bills maturing August 31, 1961, in the amount of
$1,601,17^,000, as follows:
91-day bills (to maturity date) to be issued August 31.-1961. in
the amount of $1,100,000,000, or thereabouts, representing an
additional amount of bills dated June 1, 1961, and to mature
November 30, 1961, originally issued in the amount of $600,372,000
(including $100,104,000 issued June 14, 1961), the additional and
original bills to be freely interchangeable.
182-day bills, for $600,000,000, or thereabouts, to be dated
August 31. 1961, and to mature March 1, 1962.
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 Daylight
Saving time, Monday, August 28, 1961.
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
D-209
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 $ 200,000or less for the additional bills dated
June 1, 196l,
(91-days remaining until maturity date on
November 30, 196l)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 August 31, 1961,
in cash or other immediately available funds or in a like face
amount of Treasury bills maturing August 31, 1961. 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 k^k (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,
Federal
prescribe
of theirReserve
issue.
the terms
Bank
Copies
of
orthe
Branch.
of Treasury
the circular
bills
may
and
begovern
obtained
thefrom
conditions
any

^3CD

TREASURY DEPARTMENT
WASHINGTON, D.C.
August 23, 1961

FOR IMMEDIATE RELEASE
WITHHOLDING OF APPRAISEMENT ON
RATON GARMENT LABELS

The Treasury Department is instructing customs field officers
to withhold appraisement of rayon garment labels from Japan pending
a determination as to whether this merchandise is being sold in the
United States at less than fair value. Notice to this effect is
being published in the Federal Register.
Under the Antidumping Act, determination of sales in the United
States at less than fair value would require reference of the case
to the Tariff Commission, which would consider whether American
industry was being injured. Both dumping price and injury must
be shown to justify a finding of dumping under the law.
The complaint by Artex Woven Label Co., Inc., was received on
January 17, 1961. While exact figures as to imports of rayon garment
labels from Japan are not available, it is believed that the annual
dollar value is between 30 and ko million dollars.

TREASURY DEPARTMENT
WASHINGTON. D.C.
August 23, 1961

FOR IMMEDIATE RELEASE
WITHHOLDING OF APPRAISEMENT ON
RAYON GARMENT LABELS

The Treasury Department is instructing customs field officers
to withhold appraisement of rayon garment labels from Japan pending
a determination as to whether this merchandise is being sold in the
United States at less than fair value. Notice to this effect is
being published in the Federal Register.
Under the Antidumping Act, determination of sales in the United
States at less than fair value would require reference of the case
to the Tariff Commission, which would consider whether American
industry was being injured. Both dumping price and injury must
be shown to justify a finding of dumping under the law.
The complaint by Artex Woven Label Co., Inc., was received on
January 17, 1961. While exact figures as to imports of rayon garment
labels from Japan are not available, it is believed that the annual
dollar value is between 30 and ko million dollars.

CO

TREASURY DEPARTMENT

--5

WASHINGTON, D.C.
August 23, 1961
FOR IMMEDIATE RELEASE ^

TREASURY DECISION ON RAYON STAPLE FIBER
UNDER THE ANTIDUMPING ACT

The Treasury Department has determined that rayon staple
fiber from Yugoslavia is not being, nor likely to be, sold in
the United States at less than fair value within the meaning
of the Antidumping Act. Notice of the determination will be
published in the Federal Register.
There have been no importations of rayon staple fiber
from Yugoslavia since June i960.

TREASURY DEPARTMENT
1

u

-

ii

WASHINGTON, D.C.
August 23, 1961
FOR IMMEDIATE RELEASE

TREASURY DECISION ON RAYON STAPLE FIBER
UNDER THE ANTIDUMPING ACT

The Treasury Department has determined that rayon staple
fiber from Yugoslavia is not being, nor likely to be, sold in
the United States at less than fair value within the meaning
of the Antidumping Act. Notice of the determination will be
published in the Federal Register.
There have been no importations of rayon staple fiber
from Yugoslavia since June i960.

- 8-

on any such estimate might prove extremely hazardous.
The difficulties in arriving at reliable tax revenue estimates
and in forecasting the impact of divestiture under present law led
the Treasury Department to take a neutral position with regard to
the desirability of the Mason bill. However, if the Committee feels
that the relief proposed is necessary or desirable under all the
circumstances and if it can be established to the satisfaction of
this Committee that the du Font contentions are substantially correct
as to market impact and as to the similarity of revenue return to
the United States under either present law or the Mason bill, the
Secretary of the Treasury has authorized me to say that he would
have no objection to the passage of the Mason bill, amended along
the lines we have suggested. In so stating, we are aware that the
Mason bill is designed not as a private relief bill but to apply to
divestitures generally. In this connection, the discretion left to
the court under the terms of the bill would seem to us to provide
a safeguard against windfalls to future taxpayers affected by antitrust divestitures. If in the future a situation should arise which
would belie this assumption, we assume that the Congress will take
appropriate legislative action to protect the interest of the United
States in the light of the facts pertaining in such case, and, indeed,
we shall so recommend.

-7-

itf

from the du Pont Company to the shareholders who acquired their
shares prior to 19^9 when du Pont stock last sold at a price below
the current market price of the General Motors shares to be distributed. Despite these considerations, however, it must be conceded
that if the du Pont assumptions may be taken as factual, the revenue
payable to the United States as a practical matter will be approximately the same whichever tax lav is made applicable to the divestiture. If the Committee is satisfied that this practical result will
in fact obtain, this would remove a principal concern which the
Secretary of the Treasury had at the time our report was rendered
to this Committee.
Also, at the time of rendering our report, we had no independently-derived source of information which would tend to support
the du Font contentions with regard to the impact on the market of
divestiture under present law. Since that time we have received
advice from the Securities and Exchange Commission which would lend
some support to the claim that divestiture under existing Internal
Revenue laws could have an adverse impact on the market. However,
the Securities and Exchange Commission was careful to point out that
there were many factors bearing upon this question which cannot be
presently evaluated, such as the general trend of the market over
the period of divestiture, the opportunities open to du Pont to
minimize the Impact, etc. Accordingly, they cautioned that reliance

-6 of normal cash dividends. They have estimated that such a distribution under the Mason bill would result in the payment of Federal
taxes in the amount of roughly $350 million of additional revenue
resulting from the divestiture. This sum would be payable over a
period of three rather than ten years if the Treasury suggestion
with regard to the period of divestiture is adopted. Such a distribution of General Motors stock in addition to normal cash dividends
would under present law result in the payment of Federal income
taxes in an amount roughly in the neighborhood of $1 billion as
described in the Treasury Department's reports of July 18 and August 1
to this Committee. Thus, according to the representations made by
the du Pont representatives to the Treasury Department, the effect of
the Mason bill would be to change the pattern of distribution, to
Increase the control or choice of action of the shareholders with
V y

respect to the assets in question,

and to shift the tax burden

This figure presumably Ignores possible actions which shareholders
can take to minimize their tax burdens. It also seems to ignore
potential losses of revenue that could arise from the ability of
low basis du Pont shareholders to sell General Motors stock, currently represented by low basis du Pont stock, at market prices
without gain.
E.g., du Pont shareholders will be able to obtain at reduced capital
gains rates full control of the General Motors shares and may thereafter obtain tax free the proceeds of any sales of such stock.
Following the du Pont plan under present law would leave the proceeds
after taxes from such a sale in the du Pont Company, and if distributed, such proceeds would be subject to ordinary income taxes on
the shareholders.

- 5 in lieu of cash dividends; and, lastly, (d) a sale of the General
Motors shares remaining after the foregoing transactions had taken
place. The du Pont Company has estimated that the Federal income
taxes payable under the plan would amount roughly to slightly less
than $330 million of additional revenue resulting from the divestiture, and such revenue would flow only from the sale by the Company
of the 37 million shares of General Motors stock. Taking as fact
the assumptions which the Company has presented to us, we have no
particular quarrel with their estimates. Under this plan, the
$330 million of additional revenue payable under the present tax law
would be paid to the United States over a period of 10 years on the
assumption that the court in the du Pont antitrust case would permit
divestiture to take place over that period.
The du Pont officials have indicated that if the Mason bill is
passed, du Pont would in all probability abandon the ^-part plan
and would distribute the bulk of its 63 million shares of General
Motors stock to its stockholders, in addition to rather than in lieu

We are advised that this figure assumes reinvestment by du Pont
of the cash proceeds of the sale of General Motors stock in a
diversified portfolio of securities in lieu of distribution of
such proceeds to shareholders.
**No Internal Revenue ruling was either requested by or given to
the du Pont representatives, nor has du Pont furnished or been
asked for any undertaking that the plan or the assumptions supporting it will become fact under any given circumstances. The revenue
figure presumably ignores any revenue losses which du Pont contends
would flow from the adverse impact on the market caused by such a
plan of divestiture.

4
As the pending du Pont antitrust divestiture case would be
immediately affected by the Mason bill, we included in our report
rough estimates as to the differences in tax consequences that flow
from the application of the present law and from application of the
Mason bill.
However, the figures contained in the report were based on the
assumption that du Pont would distribute its General Motors shares
while continuing to pay its normal cash dividends. In other words,
we assumed that du Pont did not intend to substitute General Motors
6hares for any portion of its normal cash dividends to shareholders.
This assumption was based upon an earlier statement of du Pont Company
representatives on the basis of a plan then before the Chicago court.
Since rendering our report, du Pont representatives have informally
presented to the Treasury Department tentative plans which would
considerably change the estimates contained in our report. Briefly,
they presented a l^-part plan which they indicate du Pont would
follow to comply with a divestiture order under prevailing tax law.
The plan provides for (a) an offer to exchange General Motors shares
for du Pont common at a ratio which would provide a premium to the
exchanging stockholders; (b) a separate offer to exchange General
Motors shares for du Pont preferred at a ratio in which the market
value of General Motors stock would equal the call price of the preferred; (c) a distribution of a portion of the General Motors shares

- 3the period for distribution pursuant to a divestiture order. This
appears to us to be possible without adversely affecting the objectives that we believe the proponents of the bill seek to achieve.
It might be accomplished by specifying in the bill that, to qualify
for the relief, the divestiture must take place within three years.
On the other hand, you may find it wiser to leave the period of
divestiture up to the court which, under the terms of the bill, must
find that granting the relief is required to afford an equitable antitrust order. If the latter alternative is chosen, the bill might be
amended to direct the court to condition its finding of need for
relief upon the acceptance by the defendants of the shortest divestiture period found to be feasible by the court.
The other major amendment we suggested in our report is an
improvement in the intercorporate dividend tax. H. R. 8190, the new
Mason bill, in substance incorporates our intercorporate dividend
suggestion. Briefly, this amendment requires the assessment of the
Intercorporate dividend tax against the fair market value of intercorporate distributions rather than the cost basis to distributors
as is now the case. We believe certain minor technical refinements
in the present proposal are desirable, and I understand that our
technical people are working with your staff and Mr. Stam's staff in
arriving at the best possible provision from a technical standpoint
along these lines.

- 2-

and profits of the distributing corporation shall not be diminished
by reason of any distribution of divested stock which is treated as
a return of capital.
Additionally, H. R. 8190 would amend Section 301 of the Code
relating to taxation of intercorporate dividends. Other provisions
of the bill relate generally to criteria and procedures for applying
the relief provisions of the bill in particular cases.
The Treasury Department on July 18 advised you of its views on
this subject in a report on an earlier version of H. R. 8190 (i.e.,
H. R. 73*4-9) * This report was supplemented by an additional report
dated August 1 following upon the introduction of H. R. 8190. In
brief, the reports point out that we believe that the principal factors
involved in determining whether relief should be granted are matters
beyond the purview of our own responsibilities, and as a consequence
we have expressed neither support nor objection to the bill.
The factors we mentioned are: Any impact on the market resulting
from taxing divestiture distributions under the present tax lavs;
equity to shareholders in such cases; and the effect on enforcement
of the antitrust laws.
We also reported that if this Committee should decide to approve
the bill, we hoped that you would incorporate certain amendments.
One of the principal amendments we have suggested would be to shorten

¥\
TREASURY DEPARTMENT
WASHINGTON
FOR RELEASE: UPON DELIVERY AUGUST 2k, I96I
STATEMENT OF ROBERT H. KNIGHT, GENERAL COUNSEL
OF THE TREASURY, BEFORE THE COMMITTEE ON WAYS AND MEANS
OF THE HOUSE OF REPRESENTATIVES, ON H. R. 8190,
THURSDAY, AUGUST 2k, I96I, 10:00 A.M., EDT
Mr. Chairman, I am delighted to accept your invitation today
to discuss H. R. 8190, introduced by Congressman Mason, which would
provide tax relief to individual stockholders receiving distributions
of stock as a result of antitrust divestiture orders.
H. R. 8190 would add a new section 1111 to the Internal Revenue
Code which would provide special tax treatment for individual shareholders vho_receive divested stock pursuant to an antitrust order.
Proposed/ section 1111 would treat a distribution of divested stock
\_ y

to such shareholders as a return of capital which would be received
tax free except to the extent that the fair market value of the
divested stock exceeds the shareholders1 cost basis for the underlying stock with respect to which the distribution is made. The
fair market value of the divested stock would be applied against and
reduce the adjusted cost basis of the underlying stock and any excess
of fair market value over such cost basis would be treated as a taxable capital gain from the sale or exchange of property.
The tax treatment which would be accorded by the bill is similar
to the tax treatment now provided by section 301 of the Code to a
corporate distribution which is in excess of the corporation's earnings and profits. The proposed section 1111 provides that the earnings

' 1
i

/

125
TREASURY DEPARTMENT
Washington
August 24, 1961
FOR RELEASE: UPON DELIVERY
STATEMENT BY ROBERT H. KNIGHT, GENERAL COUNSEL
OF THE TREASURY, BEFORE THE COMMITTEE ON WAYS AND MEANS
OF THE HOUSE OF REPRESENTATIVES, ON H. R. 8190,
THURSDAY, AUGUST 24, 1961, 10:00 A.M., EDT
Mr. Chairman, I am delighted to accept your invitation today
to discuss H. R. 8190, introduced by Congressman Mason, which would
provide tax relief to individual stockholders receiving distributions
of stock as a result of antitrust divestiture orders.
H. R. 8190 would add a new section 1111 to the Internal Revenue
Code which would provide special tax treatment for individual shareholders who receive divested stock pursuant to an antitrust order.
Proposed section 1111 would treat a distribution of divested stock
to such shareholders as a return of capital which would be received
tax free except to the extent that the fair market value of the
divested stock exceeds the shareholders1 cost basis for the underlying stock with respect to which the distribution Is made. The
fair market value of the divested stock would be applied against and
reduce the adjusted cost basis of the underlying stock and any excess
of fair market value over such cost basis would be treated as a
taxable capital gain from the sale or exchange of property.
The tax treatment which would be accorded by the bill is similar
to the tax treatment now provided by section 301 of the Code to a
corporate distribution which is in excess of the corporation's earnings and profits. The proposed section 1111 provides that the earnings.
and profits of the distributing corporation shall not be diminished
by reason of any distribution of divested stock which is treated as
a return of capital.
Additionally, H. R. 8190 would amend Section 301 of the Code
relating to taxation of intercorporate dividends. Other provisions
of the bill relate generally to criteria and procedures for applying
the relief provisions of the bill in particular cases.
The Treasury Department on July 18 advised you of its views on
this subject In a report on an earlier version of H. R. 8190 (i.e.,
H. R. 7349). This report was supplemented by an additional report
dated August 1 following upon the introduction of H. R. 8190. In
brief, the reports point out that we believe that the principal
factors involved In determining whether relief should be granted are
matters beyond the purview of our own responsibilities, and as a
D-210
consequence we have expressed neither support nor objection to the
bill.

- 2 The factors we mentioned are: Any impact on the market resulting
from taxing divestiture distributions under the present tax laws; .g
equity to shareholders In such cases; and the effect on enforcement l
of the antitrust laws.
We also reported that if this Committee should decide to approve
the bill, we hoped that you would incorporate certain amendments.
One of the principal amendments we have suggested would be to shorten
the period for distribution pursuant to a divestiture order. This
appears to us to be possible without adversely affecting the objectives that we believe the proponents of the bill seek to achieve.
It might be accomplished by specifying in the bill that, to qualify
for the relief, the divestiture must take place within three years.
On the other hand, you may find it wiser to leave the period of
divestiture up to the court which, under the terms of the bill, must
find that granting the relief is required to afford an equitable
antitrust order. If the latter alternative is chosen the bill might
be amended to direct the court to condition its finding of need for
relief upon the acceptance by the defendants of the shortest divestiture period found to be feasible by the court.
The other major amendment we suggested in our report is an
improvement in the intercorporate dividend tax. H. R. 8190, the new
Mason bill, in substance incorporate our intercorporate dividend
suggestion. Briefly, this amendment requires the assessment of the
intercorporate dividend tax against the fair market value of intercorporate distributions rather than the cost basis to distributors
as is now the case. We believe certain minor technical refinements
in the present proposal are desirable, and I understand that our
technical people are working with your staff and Mr. Stam's staff in
arriving at the best possible provision from a technical standpoint
along these lines.
As the pending du Pont antitrust divestiture case would be
immediately affected by the Mason bill, we included in our report
rough estimates as to the differences in tax consequences that flow
from the application of the present law and from application of the
Mason bill.
However, the figures contained In the report were based on the
assumption that du Pont would distribute its General Motors shares
while continuing to pay its normal cash dividends. In other words,
we assumed that du Pont did not intend to substitute General Motors
shares for any portion of its normal cash dividends to shareholders.
This assumption was based upon an earlier statement of du Pont Compan
representatives on the basis of a plan then before the Chicago court.
Since rendering our report, du Pont representatives have informally
presented to the Treasury Department tentative plans which would
considerably
change
the
estimates
in our
Briefiy>
follow
they presented
to comply
a with
5-part
a plan
divestiture
whichcontained
they
order
indicate
under
prevailing
dureport.
Pont would
tax
law.

- 3-

The plan provides for (a) an offer to exchange General Motors shares
for du Pont common at a ratio which would provide a premium to the
exchanging stockholders; (b) a separate offer to exchange General
Motors shares for du Pont preferred at a ratio in which the market
value of General Motors stock would equal the call price of the
preferred; (c) a distribution of a portion of the General Motors shares
in lieu of cash dividends; and, lastly, (d) a sale of the General
Motors shares remaining after the foregoing transactions had taken
place. The du Pont Company has estimated that the Federal income
taxes payable und|r the plan would amount roughly to slightly less
than $330 million of additional revenue resulting from the divestiture, and such revenue would flow only from the sale by the Company
of the 37 million shares of General Motors stock. Taking as fact
the assumptions which the Company has presented to us, we have no
particular quarrel with their estimates.** Under this plan, the
$330 million of additional revenue payable under the present tax law
would be paid to the United States over a period of 10 years on the
assumption that the court in the du Pont antitrust case would permit
divestiture to take place over that period.
The du Pont officials have indicated that if the Mason bill is
passed, du Pont would in all probability abandon the 4-part plan
and would distribute the bulk of its 63 million shares of General
Motors stock to its stockholders, in addition to rather than in lieu
of normal cash dividends. They have estimated that such a distribution
under the Mason bill would result in the payment of Federal taxes in
the amount of roughly $350 million^^of additional revenue resulting
from
would
be payable
over a period
of
* Wethe
aredivestiture.
advised that This
this sum
figure
assumes
reinvestment
by du Pont
three
rather
than
ten years
if the
suggestion
with regard
to
of the
cash
proceeds
of the
saleTreasury
of General
Motors stock
in a
thediversified
period of divestiture
adopted. Such
a distribution
of of
portfolio ofissecurities
in lieu
of distribution
such proceeds to shareholders.
** No Internal Revenue ruling was either requested by or given to
the du Pont representatives, nor has du Pont furnished or been
asked for any undertaking that the plan or the assumptions supporting it will become fact under any given circumstances. The revenue
figure presumably ignores any revenue losses which du Pont contends
would flow from the adverse Impact on the market caused by such a
plan of divestiture.
** This figure presumably Ignores possible actions which shareholder
can take to minimize their tax burdens. It also seems to Ignore
! potential losses of revenue that could arise from the ability of
I low basis du Pont shareholders to sell General Motors stock,
currently represented by low basis du Pont stock, at market prices
; without gain.

- 4General Motors stock in addition to normal cash dividends would under
present law result in the payment of Federal income taxes in an
amount roughly in the neighborhood of $1 billion as described in
the Treasury Department's reports of July 18 and August 1 to this
Committee. Thus, according to the representations made by the
du Pont representatives to the Treasury Department, the effect of
the Mason bill would be to change the pattern of distribution, to
increase the control or choice of action of the shareholders with
respect to the assets in question, * and to shift the tax burden
from the du Pont Company to the shareholders who acquired their
shares prior to 1949 when du Point stock last sold at a price below
the current market price of the General Motors shares to be distributed. Despite these considerations, however, it must be conceded
that if the du Pont assumptions may be taken as factual, the revenue
payable to the United States as a practical matter will be approximately the same whichever tax law is made applicable to the divestiture. If the Committee is satisfied that this practical result will
in fact obtain, this would remove a principal concern which the
Secretary of the Treasury had at the time our report was rendered
to this Committee.
Also, at the time of rendering our report, we had no indepentlyderived source of information which would tend to support the du Pont
contentions with regard to the impact on the market of divestiture
under present law. Since that time we have received advice from
the Securitje s and Exchange Commission which would lend some
support to the claim that divestiture under existing Internal
Revenue laws could have an adverse impact on the market. However,
the Securities and Exchange Commission was careful to point out that
there were many factors bearing upon this question which cannot be
presently evaluated, such as the general trend of the market over
the period of divestiture, the opportunities open to du Pont to
minimize the impact, etc. Accordingly, they cautioned that reliance
on any such estimate might prove extremely hazardous.
The difficulties in arriving at reliable tax revenue estimates
and in forecasting the impact of divestiture under present law led
the Treasury Department to take a neutral position with regard to
the desirability of the Mason bill. However, if the Committee feels
that the relief proposed Is necessary or desirable under all the
circumstances and if it can be established to the satisfaction of
* E.g., du Pont shareholders will be able to obtain at reduced capital
this Committee that the du Pont contentions are substantially correct
gaXns rates full control of the General Motors shares and may thereas to market impact and as to the similarity of revenue return to
after obtain tax free the proceeds of any sales of such stock.
the United States under either present law or the Mason bill, the
Followine, the du Pont plan under present law would leave the proceedSecretary of the Treasury has authorized me to say that he would
after taxes from such a sale In the du Pont Company, and if distributed, such proceeds would be subject to ordinary income taxes on
the shareholders.

- 07

- 5have no objection to the passage of the Mason bill, amended along
the lines we have suggested. In so stating, we are aware that the
Mason bill is designed not as a private relief bill but to apply to
divestitures generally. In this connection, the discretion left to
the court under the terms of the bill would seem to us to provide
a safeguard against windfalls to future taxpayers affected by
antitrust divestitures. If in the future a situation should arise
which would belie this assumption, we assume that the Congress will
take appropriate legislative action to protect the interest of the
United States in the light of the facts pertaining in such case,
and, indeed, we shall so recommend.

0O0

1224

SERIES H SAVINGS BONDS OUTSTANDING:

JUNE 1952 THROUGH MAY 1961

ISSUED FROM JUNE 1952 THROUGH JANUARY 1957:
1952 $119.5
1953 -------1954
1955
1956
1957

315.6
603.4
826.5
675.7
51.0

$ 2, 591.7

These bonds have maturity length of 9 years and 8 months.
Interest is paid by check each six months and at maturity. Bonds
originally yielded 3 percent on a graduated scale if held to
maturity. Effective June 1, 1959, interest was increased so as
to bring final yields to maturity up to rates ranging from 3.12
percent to 3.36 percent.
ISSUED FROM FEBRUARY 1957 THROUGH MAY 1959:
1957 $479.6
1958
1959

— —

764.9
327.8

$ 1,572.3

These bonds have maturity length of ten years. Interest is
paid by check each six months and at maturity. Bonds originally
yielded 3.25 percent on a graduated scale if held to maturity.
Effective June 1, 1959, interest was increased so as to bring
final yields to maturity up to rates ranging from 3.61 percent
to 3.72 percent.
ISSUED FROM JUNE 1959 THROUGH MAY 1961:
1959 $343.1
1960
1961

989.0
401.0

$ 1,733.1

These bonds, as well as bonds currently sold, have a maturity
length of ten years. Interest is payable semi-annually on a
graduated scale so as to yield 3.75 percent if held to maturity.
Unclassified • 29.0
Total

$ 5,926.1

_ 4

-

1 9Q
~

fluctuations and would possess the same safety features
and guaranteed interest rate as the popular Series E Bond.
There are now close to one and one-half million H bond
accounts with an investment of some six billion dollars.
Nearly 160,000 new accounts are opened yearly.

Annual

H Bond sales are close to the billion dollar mark and /x/n_T
increasing rapidly.

V.I

j_ w _/

- 3 Series H Savings Bonds issued from June, 1952 through
January, 1957 have a maturity period of nine years and eight
months. Their interest rate was originally three percent if
held to maturity. Effective June 1, 1959, the rate was
increased so as to bring the final yields to maturity up
to a range of 3.12 percent to 3.36 percent.
The bonds being extended will mature from February,
1962, through September, 1966. Other outstanding Series H
Bonds issued since February, 1957, will begin maturing in
February, 1967. Regulations affecting possible extension
of these bonds will be announced prior to October, 1966,
at which time consideration will be given to the terms and
conditions, including interest rates, of any extension that
might be warranted at that time.
The Series H Bond, when introduced in June, 1952, was
custom-made to satisfy the needs of Americans who wanted a
current-income bond which would be free from market

- 2-

1?1

dollars currently outstanding in Series H Savings Bonds

will be affected by this action.
Secretary Dillon said: "This new extension option for
Serires H Bonds is a well-dese/ed reward for those citizens
who have held these securities for their full term. The
purchase of U. S. Savings Bonds by every family is important
to the economic strength of our nation, and is thus a
contribution to the cause of peace and freedom around the
world. I hope that the new extension terms and rates,
which are equal to the recently approved rate of a straight
three and three-fourths percent interest for the second
extension of Series E Bonds, will encourage increased
savings on the part of millions of Americans."

August 24, 1961

For Inquiries:
Mr. Reese - WO 4-5775
FOR RELEASE: Sunday Newspapers, August 2 7, 1961
TREASURY ANNOUNCES 10-YEAR EXTENSION
OF MATURING SERIES H SAVINGS BONDS
Treasury Secretary Douglas Dillon today announced new
regulations that will benefit more than ^^half-million
Americans who own Series H Savings Bonds issued from June,
1952 through January, 1957. This is the first time in Treasury
financing that a current-income bond has been given an extension
privilege.
Under the new regulations, these bonds -- the first
of which will mature in February, 1962 -- may now be held
for an additional ten years and earn a full 3 3/4 percent
interest a year, payable semi-annually by Treasury check.
Over two and one-haIf billion of the more than six billion

'f~

o

fk /—'O-

TREASURY DEPARTMENT
WASHINGTON, D.C.
August 24, 1961
For Inquiries:
Mr. Reese - WO 4-5775
FOR RELEASE: Sunday Newspapers, August 27. 196l
TREASURY ANNOUNCES 10-YEAR EXTENSION
OF MATURING SERIES H SAVINGS BONDS
Treasury Secretary Douglas Dillon today announced new
regulations that will benefit more than a half-million Americans
who own Series H Savings Bonds issued from June, 1952 through
January, 1957. This is the first time in Treasury financing that
a current-income bond has been given an extension privilege.
Under the new regulations, these bonds — the first of which
will mature in February, 1962 — may now be held for an additional
ten years and earn a full 3-3/4 percent interest a year, payable
semi-annually by Treasury check. Over two and one-half billion
of the more than six billion dollars currently outstanding in
Series H Savings Bonds will be affected by this action.
Secretary Dillon said: "This new extension option for
Series H Bonds is a well-deserved reward for those citizens who
have held these securities for their full term. The purchase of
U. S, Savings Bonds by every family is important to the economic
strength of our nation, and is thus a contribution to the cause
of peace and freedom around the world. I hope that the new
extension terms and rates, which are equal to the recently
approved rate of a straight three and three-fourths percent
interest for the second extension of Series E Bonds, will encourageincreased savings on the part of millions of Americans."
Series H Savings Bonds issued from June, 1952 through January,
1957 have a maturity period of nine years and eight months. Their
interest rate was originally three percent if held to maturity.
Effective June 1, 1959. the rate was increased so as to bring the
final yields to maturity up to a range of 3.12 percent to 3.36
percent.
The bonds being extended will mature from February, 1962,
through September, 1966. Other outstanding Series H Bonds issued
since February, 1957* will begin maturing in February, 1967.
Regulations affecting possible extension of these bonds will be
D-211
announced prior to October, 1966, at which time consideration will

- 2 be given to the terms and conditions, Including interest rates, of
any extension that might be warranted at that time.
The Series H Bond, when introduced in June, 1952, was
custom-made to satisfy the needs of Americans who wanted a currentincome bond which would be free from market fluctuations and would
possess the same safety features and guaranteed interest rate as
the popular Series E Bond. There are now close to one and one-half
million H bond accounts with an investment of some six billion
dollars. Nearly 160,000 new accounts are opened yearly. Annual
H Bond sales are close to the billion dollar mark and are increasing
rapidly.

Attachment:

Sales of Series H Savings Bonds,
June 1952 through May 1961.

_! r\ ™
•; «' K
v_* •_-

X

SERIES H SAVINGS BONDS OUTSTANDING: JUNE 1952 THROUGH MAY 1961
ISSUED FROM JUNE 1952 THROUGH JANUARY 1957:
1952 $119.5
1953
1954
1955
1956
1957

3J.5.6
603.4
826.5
675.7
51.0

$ 2, 591.7

These bonds have maturity length of 9 years and 8 months.
Interest is paid by check each six months and at maturity. Bonds
originally yielded 3 percent on a graduated scale if held to
maturity. Effective June 1, 1959, interest was increased so as
to bring final yields to maturity up to rates ranging from 3.12
percent to 3.36 percent,
ISSUED FROM FEBRUARY 1957 THROUGH MAY 1959:
1957 $479.6
1958 — —
1959

—

-

764.9
327.8

$ 1,572.3

These bonds have maturity length of ten years. Interest is
paid by check each six months and at maturity. Bonds originally
yielded 3.25 percent on a graduated scale' if held to maturity.
Effective June 1, 1959, interest was increased so as to bring
final yields to maturity up to rates ranging from 3.61 percent
to 3.72 percent.
ISSUED FROM JUNE 1959 THROUGH MAY 1961:
1959 $343.1
1960
1961

989.0
401.0

$ 1,733.1

These bonds, as well as bonds currently sold, have a maturity
length of ten years. Interest is payable semi-annually on a *
graduated scale so as to yield 3.75 percent if held to maturity.
Unclassified 29.0
Total

$ 5,926.1

TREASURY D E P A R T M E N T
Washington
FOR RELEASE: UPON DELIVERY
REMARKS OF JOSEPH W. BARR, ASSISTANT TO
T H E S E C R E T A R Y O F T H E TREASURY, TO T H E
A M E R I C A N S O Y B E A N ASSOCIATION M E E T I N G
C L A Y P O O L H O T E L , INDIANAPOLIS, INDIANA
M O N D A Y A F T E R N O O N , A U G U S T 28, 1961

SOYBEANS AND THEIR IMPORTANCE TO OUR
INTERNATIONAL B A L A N C E O F P A Y M E N T S

The paper which I have just distributed is not marked "confidential"
or "top secret" but it is a state paper of vital importance to the
President and to the Government of the United States. Most of the state

papers which carry these ominous classification warnings at the top of the
page contain information which relates to our ability to maintain our
military and diplomatic posture in these rather turbulent times.
This fairly innocent-looking piece of paper provides strong clues
to our ability to deploy U. S. troops around the world, and to assist the
underdeveloped nations struggle up to a level of economic decency. In
short, this paper entitled "United States Balance of Payments" gives a
running history of our economic ability to meet the threat of the communist challenge in the world today. There are few, if any, more important

documents in the United $tates, no matter what their security classificati
At the risk of explaining to you something that you already know, I
believe that it would be useful to run through this document and make sure
that we all understand it thoroughly.

i Q7
i. ^ <•

- 2 Lines 2 through 7 detail U. S. payments to the rest of the world.
Line 2 shows the amounts we pay for the goods we buy abroad.
Line 3, the amount we pay out for services (shipping and U. S.
tourists traveling abroad are heavy components in this item).
Line 4 shows the amount we pay to maintain our troops around
the world.
Line 5 details the amounts that U. S. business invests in the rest
of the world.
Line 6 shows the amounts we are paying out in our various aid
programs.
Line 7 shows the amounts we pay out to pensioners living abroad and

the amounts sent from this country to relatives and others living in foreign
countries.
The totals of these 6 lines add up to our basic payments to the rest
of the world and, as you can see from Line 1, totaled $27. 4 billion in
1958, $29. 7 billion in 1959, and $30. 1 billion in I960. For the first

quarter of this year, the total of our basic payments came to $7. 2 billion.
Lines 9 through 14 set forth the receipts we get from the rest of
the world.
Line 9 indicates our receipts from the goods sold to the rest of the
world.

-3 -

-' •«a

Line 10 shows the return on U. S. investments in the world, and
the rather confusing word "Other" in Line 11 is made up mostly of the
amounts we receive from shipping, bank fees, insurance premiums,
and foreign tourists visiting the United States.
Line 12 shows our sales of military equipment.
Line 13 sets forth foreign investment in the United States.
Line 14 shows repayments to our government of loans made under
various programs.
Line 8, showing our total basic receipts, indicates that they totaled

$23. 9 billion in 1958, $25. 3 billion in 1959, $28. 2 billion in I960, and
$7. 3 billion in the first quarter of this year. The difference between
Lines 1 and 8 shows our basic deficit or surplus position which is
indicated in Line 15.
You can see that we ran a basic deficit of $3. 6 billion in 1958, $4. 3
billion in 1959, and $1.9 billion in I960, and a surplus of $200 million
for the first quarter of 1961.
In addition to these basic components we get into the so-callea "hot
money" question in Lines 16 and 17.
Line 16 shows the short-term movement of money into and out of
the country.

X ^ •-'
- 4Line 17, entitled "unrecorded inflow or outflow, " is the statistical
remainder which we think is mostly the flow of short-term capital.
On this assumption, you can see that we had a net inflow of shortterm money into the country in 1958 in the amount of $100 million, an
inflow of $400 million in 1959, a net outflow in I960 of $1. 9 billion, and
a net outflow of $400 million in the first quarter of 1961.
When you combine the basic components (Lines 1 through 15) with
the short-term capital movements in Lines 16 and 17, you come up with
the over-all balance figure on Line 18, which indicates an over-all deficit
of $3. 5 billion in 1958, $3. 9 billion in 1959, $3. 8 billion in I960, and
$300 million in the first quarter of this year.
These deficits can be financed in one of two ways. Foreigners can
increase their bank deposits or holdings of U. S. obligations in this
country or these debts can be channeled into central banks or governments,
and these organizations can ask that their claims be paid off in gold.
If we run a surplus in our accounts, we can reverse the above
procedure and either increase our foreign holdings or ask to be paid off
in gold.
This is a rough outline of the rules of the game as it is currently
being played. Probably the best title for this system is the "gold-exchange
standard". It is a system under which gold plus the dollar and sterling,

plus other currencies to a limited amount, are used as the reserves
of the Free World and as a means of settling accounts. In other
words, the U. S. dollar and gold are the principal underpinnings of
the financial systems of the Free World.
Until very recently no one in this country had much reason to
be concerned about the question of balance of payments. We had
enormous gold reserves and our competitive position in the world
markets was almost unchallenged. But, starting in 1958, we were
jarred awake to the fact that we were now living in a fiercely competitive world and that the claims against our gold reserves had grown
uncomfortably large and were increasing.
We lost $2. 3 billion in gold in 1958, $700 million in 1959, and
$1.7 billion in I960. In the first three weeks of 1961 we were losing
gold at a rate of about $4 billion a year.
President Kennedy was advised by President Eisenhower that this
was a problem of absolutely top priority. It involved the financial
stability of the Free World and the ability of this Nation to stand up to
and meet the pressure of world-wide communist forces.
It is apparent from the document I have given you that the problem
breaks down into two parts. To meet the problem of the basic deficit
we had to step up our efforts to capture world markets. But the flow of

- 6short-term funds involved other approaches. In the fall of I960 and
the early weeks of 1961, it was this "hot money" problem that was the
most acute and required immediate attention. Concern about the
international situation, rumors about changes in the price of gold, and
speculation created an atmosphere in which about $2 billion of U. S.
dollars was drawn out of the United States by foreigners and U. S.
citizens mainly during the second half of I960. The outflow continued
strong in the early weeks of 1961.
Obviously, this hemorrhage in our reserves could not be allowed
to continue. President Kennedy stated flatly that we did not intend to
devalue our dollar. We then entered into various cooperative moves
with our Allies in the Free World and by early March had halted the
gold outflow, and since that time have reversed the picture and have had
a net inflow of gold amounting to $214 million.
At the moment, we are on top of the problem of the flows of shortterm capital, but we are not claiming by any means that it is solved.
We are increasing our efforts to contain "hot money"movements
through international financial cooperation supplemented by the resources
of the International Monetary Fund. But in these times of tension, we
will need strong nerves to carry us through periodic crises.

;'•>

' " >

- 7 We are now turning our attention to means of strengthening our
position in the basic sector of the balance-of-payments accounts -namely, we are stepping up our efforts to sell more to the rest of the
world. This is where soybeans come into the picture! Perhaps it is
difficult for you to think of the humble soybean as a major international
weapon of this country. But this is just what it is becoming.
This year we will sell into the world market for dollars soybeans
to the amount of about $500 million. If you want to look at it another
way, consider these facts: It costs this Nation about $250 million in tax
money and somewhere near the same amount in international exchange
to maintain one division of troops in Germany for a year. One can then
argue that soybean exports are providing the needed exchange to support
two divisions in Germany. Looked at in this light, you can understand
my statement that the soybean is a mighty international weapon of this
Nation.
As we struggle to increase the exports of the United States in an
attempt to close out the balance-of-payments deficit that has plagued us

for three years, it is only natural for us to look closely at soybean export
prospects. In merchandising parlance: "soybeans are one of our hottest
sales items. "
The trend in the exports of soybeans and derivatives is astounding.
From 1950 to 1953, exports averaged $134 million a year. By 1957, the

- 8export market jumped to $344 million, slumped a bit to $343 million
in 1958, moved up to $424 million in 1959, to $481 million in I960,
and preliminary estimates show that we will sell a total of $535 million
in world trade in 196l. This is an increase of 400 percent in 10 years.
Tentative figures indicate that in the next 5 years, by 1966, the export
of soybeans can jump another 80 percent and push the total value
exported up near the billion dollar mark.
This soaring trend line is amazing and is not apparent in our other
agricultural exports. We exported wheat to the value of $986 million in
1951, and $1, 026 million in I960. The figures for cotton are $1, 138
million in 1951 and $980 million in I960. For tobacco, the figures are
$326 million in 1951 and $378 million for I960.
Last year soybeans (plus derived products) nudged tobacco out of
third place in the scale of our agricultural exports. And if the present
trends continue, soybeans will be pushing wheat and cotton for first
place by 1966.
When we look at the total export picture - not just agriculture, we
find that our sales in world trade come from the following industries
which I am listing in order of importance: agriculture, machinery,
chemicals, automobiles, nonferrous ores, iron and steel mill products,
petroleum, textiles, metal manufactures, pulp and paper products,

rubber and manufactures, coal, and iron-and-steel-making raw
materials.
As one looks down this list, it can be seen that we face fierce
world-wide competition in nearly every one of these areas. The booming industrial nations of Western Europe and Japan will give us a good
"run for our money, " in machinery, chemicals, automobiles, iron and
steel products, textiles, and metal manufactures. There seems to be
a world-wide over supply of petroleum and metals, and there is no
visible shortage of pulp or paper products.
Reasonable men could probably agree that it will take all our
production ingenuity and sales ability to increase our export markets
in these areas. I do not believe that any of these fields can realistically
hope to match the potential 80-percent growth of soybean exports in the
next five years. This is the reason why we in Treasury look with
especial attention at soybeans, probably our "hottest national sales item."
I know that you gentlemen will pardon me for taking a bit of special
pride in the fact that my State -- Indiana — will produce about 80 million
bushels this year and will rank third after Illinois and Iowa.
When I asked the Department of Agriculture how this export record
in soybeans had been achieved, they told me that it was the result of a
huge world-wide demand, an improvement in the ability of foreign nations

_,; Li

- 10 to buy, and a very intelligent world sales effort sponsored jointly by
the American Soybean Association and the U. S. Department of
Agriculture.
There is not m u c h doubt about the demand. For the hundreds of
millions of people living in the underdeveloped areas of the world, the
oil and protein that soybeans can furnish to their diet m e a n the
difference between a healthy life and slow starvation, on a diet mainly
limited to carbohydrates. As these nations gradually gain some ability
to pay, they literally spend their first money on edible oil.
The joint marketing and sales promotion efforts of the Soybean
Association and the Department of Agriculture have already resulted
in working relationships with 52 nations. When these nations work
themselves into a position where they can afford to buy, they find that
this sales and educational effort has already established soybeans as a
cheap and efficient source of oil and protein.
The Department of C o m m e r c e today is engaged in a vigorous
attempt to m a k e American business export-oriented. In Treasury, we
wish them every success because this is the proper way to cure the
basic deficit in our balance-of-payments accounts. In your efforts we
have available a working model of export promotion. I will infringe on
the domain of C o m m e r c e just a bit to recommend a study of your export
success to the rest of American business.

- 11 There are other ways that we can cure our balance-of-payments
problem. We can pull back our troops from around the world; we can
give up our attempts to help underdeveloped nations; and we can
abandon the world to the push of communism. We could then raise
our tariff walls higher and higher and forget about world competition.
It would not be necessary for us to earn foreign exchange to support
our commitments to the Free World.
I know of no national leader who suggests that we abandon our
efforts to help free men. However, next year in the Congress a serious
drive will be made to strike down the Reciprocal Trade Act and to
tighten up our tariff protection. From the viewpoint of President Kennedy,
Secretary of the Treasury Dillon and the entire Administration, this is
the wrong approach. The logical approach is to compete -- just the way
you people compete in the markets of the world.
I should also warn you that if the Reciprocal Trade Act is not
extended next year, then the rest of the world will not be able to earn
the dollars they need to buy your soybeans. They must sell to us to be
able to buy our products.
You have done a magnificent job in pushing soybean exports up to a
position where your success is a matter of deep national concern -- to a
point where your exports are a truly significant item in our arsenal of

international weapons. W e in Treasury wish you every success in the
future. And I leave with you a request: Come to Washington next

year to join with us in extending the reasonable trade policies laid
down in the Reciprocal Trade Act.

SPECIAL MEETING OF THE INTER-AMERICAN
ECONOMIC AND SOCIAL COUNCIL AT THE
MINISTERIAL LEVEL
Uruguay, August, 1961

148

DECLARATION TO THE PEOPLES OF AMERICA
Assembled in Punta del Este, inspired by the principles
consecrated in the Charter of the Organization of American
States, in Operation Pan America and in the Act of Bogota,
the representatives of the American Republics hereby agree to
establish an Alliance for Progress: a vast effort to bring a
better life to all the peoples of the Continent.
This Alliance is established on the basic principle that
free men working through the institution of representative
democracy can best satisfy man's aspirations, including those
for work, home and land, health and schools. No system can
guarantee true progress unless it affirms the dignity of the
individual which is the foundation of our civilization.
Therefore the countries signing this declaration in the
exercise of their sovereignty have agreed to work toward the
following goals during the coming years:
To improve and strengthen democratic institutions through
application of the principle of self-determination by the people.
To accelerate economic and social development, thus
rapidly bringing about a substantial and steady increase in
the average income in order to narrow the gap between the
PROVISIONAL ENGLISH TEXT

-

2 -

standard of living in Latin American countries and that enjoyed in the industrialized countries.
To carry out urban and rural housing programs to provide
decent homes for all our people.
To encourage, in accordance with the characteristics of
each country, programs of comprehensive agrarian reform, leading to the effective transformation, where required, of unjust
structures and systems of land tenure and use; with a view to
replacing latifundia and dwarf holdings by an equitable system
of property so that, supplemented by timely and adequate credit,
technical assistance and improved marketing arrangements, the
land will become for the man who works it the basis of his
economic stability, the foundation of his increasing welfare,
and the guarantee of his freedom and dignity.
To wipe out illiteracy; to extend, as quickly as possible,
the benefits of primary education to all Latin Americans; and
to provide broader facilities, on a vast scale, for secondary
and technical training and for higher education.
To press forward with programs of health and sanitation
in order to prevent sickness, combat contagious disease, and
strengthen our human potential.
To assure fair wages and satisfactory working conditions
to all our workers; to establish effective systems of labor-

-

3 -

management relations and procedures for consultation and
cooperation among government authorities, employers1 associations, and trade unions in the interests of social
and economic development.
To reform tax laws, demanding more from those who have
most, to punish tax evasion severely, and to redistribute
the national income in order to benefit those who are most
in need, while, at the same time, promoting savings and investment and reinvestment of capital.
To maintain monetary and fiscal policies which, while
avoiding the disastrous effects of inflation or deflation,
will protect the purchasing power of the many, guarantee the
greatest possible price stability, and form an adequate basis
for economic development.
To stimulate private enterprise in order to encourage
the development of Latin American countries at a rate which
will help them to provide jobs for their growing populations,
to eliminate unemployment, and to take their place among the
modern industrialized nations of the world.
To find a quick and lasting solution to the grave problem
created by excessive price fluctuations in the basic exports
of Latin American countries on which their prosperity so
heavily depends.

1 rxi

. 4 .
To accelerate the integration of Latin America so as
to stimulate the economic and social development of the
Continent. This process has already begun through the
General Treaty of Economic Integration of Central America
and, in other countries, through the Latin American Free
Trade Association.
This declaration expresses the conviction of the nations
of Latin America that these profound economic, social, and
cultural changes can come about only through the self-help
efforts of each country. Nonetheless, in order to achieve
the goals which have been established with the necessary
speed, domestic efforts must be reinforced by essential contributions of external assistance.
The United States, for its part, pledges its efforts to
supply financial and technical cooperation in order to achieve
the aims of the Alliance for Progress. To this end, the United
States will provide a major part of the minimum of 20 billion
dollars, principally in public funds, which Latin America will
require over the next 10 years from all external sources in
order to supplement its own efforts.
The United States will provide from public funds, as an
immediate contribution'to the economic and social progress of
Latin America, more than one billion dollars during the twelve

months which began on March 13, 1961, when the Alliance for
Progress was announced.
The United States intends to furnish development loans
on a long-term basis, where appropriate running up to fifty
years and at very low or zero rates of interest.
For their part, the countries of Latin America agree to
devote a steadily increasing share of their own resources to
economic and social development, and to make the reforms
necessary to assure that all share fully in the fruits of the
Alliance for Progress.
Further, in carrying forward the Alliance for Progress,
each of the countries of Latin America will formulate comprehensive and well-conceived national programs for the development of their own economies.
Independent and highly qualified experts will be made
available to Latin American countries in order to assist in
formulating and examining national development plans.
Conscious of the overriding importance of this declaration,
the signatory countries declare that the inter-American community is now beginning a new era when it will supplement
its institutional, legal, cultural and social accomplishments
with immediate and concrete actions to secure a better life,
under freedom, for the present and future generations.

-i r~

9

Special Meeting of the
Inter-American Economic and Social Council
at the Ministerial Level
Uruguay, August, 1961

CHARTER OF PUNTA DEL ESTE
Establishing the Alliance for Progress
Within the Framework of
Operation Pan America
CONTENTS

PAGE

PREAMBLE

6

TITLE I

Objectives of the Alliance for Progress 8

TITLE II

Economic and Social Development 13

CHAPTER I.

Basic Requirements for Development 13

CHAPTER II.

National Development Programs 14

CHAPTER III

Immediate and Short-Term Action Measures 16

CHAPTER IV.

External Assistance in Support of
Development Programs

CHAPTER V.

Organization and Procedures 19

APPENDIX

Elements of National Development
Programs

TITLE III.

Economic Integration of Latin America 24

TITLE IV.

Basic Export Commodities 28

CHAPTER I.

National Measures 28

CHAPTER II.

International Cooperation Measures 30

Provisional English Text

17

23

- 6-

7 Sj

THE CHARTER OF FUNTA DEL ESTE
ESTABLISHING
THE ALLIANCE FOR PROGRESS
WITHIN THE FRAMEWORK OF
OPERATION PAN AMERICA

Preamble
We, the American Republics, hereby proclaim our decision to unite
in a common effort to bring our people accelerated economic progress
and broader social justice within the framework of personal dignity
and political liberty.
Almost two hundred years ago we began in this Hemisphere the
long struggle for freedom which now inspires people in all parts
of the world. Today, in ancient lands, men moved to hope by the
revolutions of our young nations search for liberty. Now we must
give a new meaning to that revolutionary heritage. For America
stands at a turning point in history. The men and women of our
Hemisphere are reaching for the better life which today's skills
have placed within their grasp. They are determined for themselves
and their children to have decent and ever more abundant lives,
to gain access to knowledge and equal opportunity for all, to end
those conditions which benefit the few at the expense of the needs
and dignity of the many. It is our inescapable task to fulfill
these just desires — to demonstrate to the poor and forsaken of
our countries, and of all lands, that the creative powers of free
men hold the key to their progress and to the progress of future
generations. And our certainty of ultimate success rests not alone

on our faith in ourselves and in our nations but on the indomitable
spirit of free man which has been the heritage of American
civilization.
Inspired by these principles, and by the principles of Operation
Pan America and the Act of Bogota, the American Republics hereby
resolve to adopt the following program of action to establish and
carry forward an Alliance for Progress.

- 8 TITLE I
OBJECTIVES OF THE ALLIANCE FOR PROGRESS

It is the purpose of the Alliance for Progress to enlist the
full energies of the peoples and governments of the American
republics in a great cooperative effort to accelerate the economic
and social development of the participating countries of Latin
America, so that they may achieve maximum levels of well-being,
with equal opportunities for all, in democratic societies adapted
to their own needs and desires.
The American republics agree to work toward the achievement
of the following fundamental goals in the present decade:
1. To achieve in the participating Latin American countries a
substantial and sustained growth of per capita incomes at a rate
designed to attain, at the earliest possible date, levels of
income capable of assuring self-sustaining development, and
sufficient to make Latin American income levels constantly larger
in relation to the levels of the more industrialized nations. In
this way the gap between the living standards of Latin America and
those of the more developed countries can be narrowed. Similarly
presently existing differences in income levels among the Latin
American countries will be reduced by accelerating the development
of the relatively less developed countries and granting them
maximum priority in the distribution of resources and in international
cooperation in general. . In evaluating the degree cf relative
development, account will be taken not only of average levels of real

_. 9 -

income aid gross product per capita, but also of indices of infant
mortality, illiteracy, and per capita d&ily caloric intake.
It is recognized that, in order to reach these objectives within
a reasonable time, the rate of economic growth in any country of
Latin America should be not less than 2.5 per cent per capita per
year, and that each participating country should determine its own
growth target in the light of its stage of social and economic
evolution, resource endowment, and ability to mobilize national
efforts for development.
2* To make the benefits of economic progress available to all
citizens of all economic and social groups through a more equitable
distribution of national income, raising more rapidly the income
and standard of living of the needier sectors of the population,
at the same time that a higher proportion of the national product is
o„i<nvn4i»ifl to investment.
3. To achieve balanced diversification in national economic structures, both regional and functional, making them increasingly free from
dependence on the export of a limited .number of primary products and
the importation of capital goods while seeking to attain stability in
the prices of exports or in income derived from exports.
4. To accelerate the process of rational industrialization so
as to increase the productivity of the''economy as a whole, taking
full advantage of the talents and energies of both the private and
.public sectors, utilizing the natural resources of the country and

• - 10 -

-*,

EQ
providing productive and remunerative employment for unemployed or ^ "
part-time workers. Within this process of industrialization,
special attention should be given to the establishment and development
of capital-gocds industries.
5. To raise greatly the level of agricultural productivity and
output and to improve related storage, transportation, and marketing
services.
6. To encourage, in accordance with the characteristics of each
country, programs of comprehensive agrarian reform leading to the
effective transformation, where required, of unjust structures and
systems of land tenure and use, with a view to replacing latifundia
and dwarf-holdings by an equitable system of land tenure so that,
with the help of timely and adequate credit, technical assistance and
facilities for the marketing and distribution of products, the land
will become for the man who works it the basis of his economic
stability, the foundation of his increasing welfare, and the guarantee
of his freedom and dignity.
7. To eliminate adult illiteracy and by 1970 to assure, as a
minimum, access to six years of primary education for each school-age
child in Latin America; to modernize and expand vocational, secondary
and higher educational and training facilities, to strengthen the
capacity for basic and applied research, and to provide the competent
personnel required in rapidly-growing societies.
8. To increase life expectancy at birth by a minimum of five
years, and to increase the ability to learn and produce, by improving
individual and public health. To attain this goal it ull be necessary,

among other measures, to provide adequate potable water supply and
drainage to not less than 70 per cent of the urban and 5 0 per cent
of the rural population; to reduce the mortality rate of children
less than five years of age to at least one-half of the present rate;
to control ihe more serious transmissible diseases, according to..
their importance as a cause of sickness and death; to eradicate
those illnesses, especially malaria, for which effective cures are
known; to improve nutrition; to train medical and health personnel
to meet at least minimum standards of competence; to improve basic health
services at national and local levels; to intensify scientific research
and apply its results more fully and effectively to the prevention ani
cure of illness.
9» To increase the construction of low-cost houses for lowincome families in order to replace inadequate arid deficient housing
and to reduce housing shortages; and to provide necessary public
services to both urban and rural centers of population.
10. To maintain stable price levels, avoiding inflation or
deflation and the consequent social hardships aid maldistribution
of resources, bearing always in mind the necessity of maintaining an
adequate rate of economic growth.
11. To strengthen existing agreements on economic integration,
with a view to the ultimate fulfillment of aspirations for a Latin
American common market that will expand and diversify trade among
the Latin American countries and thus contribute to the economic
growth of the region.

- 12 -

12. To develop cooperative programs designed to prevent the
harmful effects of excessive fluctuations in the foreign exchange
earnings derived from exports of primary products, which are of
vital importance to economic and social development; and to adopt
the measures necessary to facilitate the access of Latin American
exports to international markets*

: "» '
,.,._ _V __

- 13 -

TITLE II

ECONOMIC AND SOCIAL D3VEL0?L__NT

Chapter I. Basic Requirements for Economic and Social Development
The American republics recognize that to achieve the foregoing
goals it will be necessary:
1. That comprehensive and well-conceived national programs of
economic and social development, aimed at the achievement of selfsustaining growth, be carried out in accordance with democratic
principles.
2. That national programs of economic and social development be
based on the principle of self-help — as established in the Act of Bogota —
and the maximum use of domestic resources, taking into account the special
conditions of each country.
3- That in the preparation and execution of plans for economic
and social development, women should be placed on an equal footing with
men.
4. That the Latin American countries obtain sufficient external
financial assistance, a substantial portion of which should be extended
on flexible conditions with respect to periods and terms of repayment and
forms of utilization, in order to supplement domestic capital formation
and reinforce their import capacity; and that, in support of wellconceived programs, including the necessary structural reforms and measures
for the mobilization of internal resources, a supply of capital from all
external sources during the coming ten years of at least 20 billion dollars

-H-

iQO

be made available to the Latin .jnerican countries, with priority to the
relatively less developed countries. The greater part of this sum should
be in public funds.
5.

That institutions in both the public and private sectors, in-

cluding labor, cooperative, commercial, industrial, and financial institutions,
be strengthened and improved for increasingly effective use of domestic
resources, and that the necessary social reforms be effected to permit a
fair distribution of the fruits of economic and social progress.
Chapter II. National Development Programs
1.

Participating Latin American countries agree to introduce

or strengthen systems for the preparation, execution and periodic revision
of national programs for economic and social development consistent with
the principles, objectives and requirements contained in this document.
Participating Latin American countries should formulate, if possible within
the next eighteen months, long-term development programs. Such programs
should embrace, according to the characteristics of each country, the
elements outlined in the Appendix.
2.

National development programs should incorporate self-help

efforts directed to:
a.

The improvement of human resources and widening of opportunities
through raising general standards of education and health;
improving and extending technical education and the training of
professionals, with emphasis on science and technology; providing
adequate remuneration for work performed; encouraging managerial,
entrepreneurial, and salaried talent; providing more productive
employment for underemployed manpower; establishing elective

- 15 -

CQ

systems of labor relations, and procedures for consultation and
collaboration among public authorities, employer associations, and
labor organizations; promoting local institutions for basic and
applied research; and improving the standards of public
administration.
The wider development and more efficient use of natural resources,
I
especially those which are now idle or underutilized, including
measures for the processing of raw materials.
The strengthening of the agricultural base, progressively extending the benefits of the land to those who work it, and
ensuring in countries with Indian populations the integration
of these populations into the economic, social, and cultural
processes of modern life. To carry out these aims, measures
should be adopted, among ^others, ta establish ..or. improve, as the
case may be, the following services: extension, credit, technical
assistance, agricultural research and mechanization; health
and education; storage and distribution; cooperatives and farmers'
associations; and community development.
The more effective, rational and equitable mobilization and
use of financial resources through the reform of tax structures,
including fair and adequate taxation of large incomes and real
estate, and the strict application of measures to improve fiscal
administration. Development programs should include the adaptation of budget expenditures to development needs, measures
for the maintenance of price stability, the creation of essential
credit facilities at reasonable rates of interest, and the
encouragement of private savings.

- 16 e. The promotion through appropriate measures, including the signing
of agreements for the purpose of reducing or eliminating double
taxation, of conditions that will encourage the flow of foreign
investments and help to increase the capital resources of
participating countries in need of capital.
f. The improvement of systems of distribution and sales in order
to make markets more competitive and prevent monopolistic
practices.
Chapter III. Immediate and 8hort-Terrn Action Measures
1. Recognizing that a number of Latin American countries, despite
their best efforts, may require emergency financial assistance, the
United States will provide assistance from the funds which are or may be
established for such purposes. The United States stands ready to take
prompt action on applications for such assistance. Applications relating
to existing situations should be submitted within the next 60 days.
2. Participating Latin American countries should immediately increase their efforts to accelerate their development, giving special
emphasis (in addition to the creation or strengthening of machinery for
long-term development programming) to the following objectives:
a. The completion of projects already under way and the initiation
of projects for which the basic studies have been^ made in order
to accelerate their financing and execution.
b. The implementation of new projects which are designed:
i. To meet the most pressing social needs and benefit
directly the greatest number of people;

- 17 „•,'. ^ -

ii.

To concentrate efforts within each country in the less

developed or more depressed areas in which particularly
serious social problems exist;
iii. To utilize idle capacity or resources, particularly underemployed manpower;
iv. To survey and assess natural resources.
c. The facilitation of the preparation and execution of longterm
programs through measures designed:
i. To train teachers, technicians, and specialists;
ii. To provide accelerated training to workers and farmers;
iii. To improve basic statistics;
iv. To establish needed credit and marketing facilities;
v. To improve services and administration.
3. The United States will assist in the realization of these shortterm measures with a view to achieving concrete results from the Alliance
for Progress at the earliest possible moment. In connection with the
measures set forth above, and in accordance with the statement of
President Kennedy, the United States will provide assistance under the
Alliance, including assistance for the financing of short-term measures,
totalling more than one billion dollars in the year ending March 1962.
Chapter IV. External Assistance in Support of
National Development Programs
1. The economic and social development of Latin America will require
large public and private financial assistance on the part of capitalexporting countries, including the members of the Development

- 18 -

Assistance Group and international lending agencies. The measures provided for
•in the Act of Bogota" and the new measures provided for in this Charter, are
designed to create a framework within which such additional assistance can be
provided and effectively utilized.
2. The United States will assist those participating countries whose
Development Programs establish self-help measures, economic policies and

programs consistent with the goals and principles of this Charter. To supplement
the domestic efforts of such countries, the United States is prepared to
allocate resources which, along with those anticipated from other external
sources, will be of a scope and magnitude adequate to realize the goals
envisaged in this Charter. Such assistance will be allocated to both social
and economic development, and, where appropriate, will take the form of grants
or loans on flexible terras and conditions. The participating countries will
request the assistance of other capital-exporting countries and international
institutions so that they may provide assistance for the attainment of these
objectives.
3. The United States will assist in the financing of technical assistance
projects proposed by a participating country or by the Secretariat of the
Organization of American States for the purpose of; a) contracting, in
agreement with governments, for experts to assist the governments, including
the preparation of specific investment projects and the strengthening of
national mechanisms for preparing projects, using specialized engineering
firms where appropriate; b) carrying out, pursuant to cooperative agreements
existing among the Secretariat of the Organization of American States, the
Economic Commission for Latin America, and the Inter-American Development
Bank, field investigations and studies, including those relating to development

- 19 • - p. -^

problems, the organization of-national planning agencies and the preparation of

development programs, agrarian reform and rural development, health, cooperative

housing, education and professional training, and taxation and tax administrati
and c) convening;; meetings of experts and officials on development and related
problems.
The governments or above-mentioned organizations should, when appropriate,
seek the cooperation of the United Nations and its Specialized Agencies in
the execution of these activities.
4. The participating Latin American countries recognize that each has
in varying degree a capacity to assist fellow republics by providing external
technical and financial assistance. They recognize that this capacity will
increase as their economies grow. They ,affirm (therefor^ their intention to
assist fellow republics increasingly as their individual circumstances permit.
Chapter V. Organization and Procedures
1. In order to provide technical assistance for the formulation of
development programs, as may be requested by participating nations, the
Organization of American States, the Economic Commission for Latin America,
and the Inter-American Development Bank will continue and strengthen their
agreements for coordination in this field, in order to have available a group

of programming experts whose service can be used to facilitate the implementati
of this Charter. The participating countries will also seek an intensification
of technical assistance from the Specialized Agencies of the United Nations
for the same purpose.
2. The Inter-American Economic and Social Council, on the joint nomination
of the Secretary General of the Organization of American States, the President

of the Inter-American Development Bank, and the Executive Secretary of the
United Nations Economic Commission for Latin America, will appoint a panel
of nine high-level experts, exclusively on the basis of their experience,
technical ability, and competence in the various aspects of economic and
social development. The experts may be of any nationality, though if of
Latin American origin an appropriate geographical distribution will be^pught.
They will be attached to the Inter-American Economic and Social Council, but
will nevertheless enjoy complete autonomy in the performance of their duties.
They may not hold any other remunerative position. The appointment of these
experts will be for a period of three years, and may be renewed.
3. Each government, if it so wishes, may present its program foreconomic and social development for consideration by an ad hoc committee,

composed of no more than three members drawn from the panel of experts referred
to in the preceding paragraph together with an equal number of experts not on
the panel. The experts who compose the ad hoc Committee will be appointed
by the Secretary General of the Organization of American States at the request
of the interested government and with its consent.
4.. The Committee will study the development program, exchange opinions
with the interested government as to possible modifications and, with the
consent of the government, report its conclusions to the Inter-American
Development Bank and to other governments and institutions that may be
prepared to extend external financial and technical assistance in connection
with the execution of the program.
5. In considering a development program presented to it, the ad hoc
Committee will examine the consistency of the program with the principles of

•'• Q

Q

- 21 -

the Act of Bogota and of this Charter, taking into account the elements in the
Appendix.
6. The General Secretariat of the Organization of American States will
provide the personnel needed by the experts referred to in paragraphs 2 and 3
of this Chapter in order to fulfill their tasks. Such personnel may be employed
specifically for this purpose or may be made available from the permanent
staffs of the Organization of American States, the Economic Commission for
Latin America, and the Inter-American Development Bank, in accordance with
the present liaison arrangements between the three organizations. The General
Secretariat of the Organization of American States may seek arrangements with
the United Nations Secretariat, its Specialized Agencies and the Inter-American
Specialized Organizations, for the temporary assignment of necessary personnel.
7. A government whose development program has been the object of recommenda-

tions made by the ad hoc Committee with respect to external financing requiremen
may submit the program to the Inter-American Development Bank so that the Bank
may undertake the negotiations required to obtain such financing, including
the organization of a consortium of credit institutions and governments
disposed to contribute to the continuing and systematic financing, on
appropriate terms, of the development program. However, the government will
have full freedom to resort through any other channels to all sources of
financing, for the purpose of obtaining, in full or in part, the required
resources.
The ad hoc Committee shall not interfere with the right of each government
to formulate its own goals, priorities, and reforms in its national development
programs.

- 22 -

The recommendations of the ad hoc Committee will be of great importance
,in determining the distribution of public funds under the Alliance for Progress
which contribute to the external financing of such programs.

These recommenda-

tions shall give special consideration to Title I. 1.
The participating governments will also use their good; offices to the
end that these recommendations may be accepted as a factor of great importance
in the decisions taken, for the same purpose, by inter-American credit
institutions, other international credit agencies, and other friendly
governments which may be potential sources of capital.
8.

The Inter-American Economic and Social Council will review annually

the progress achieved in the formulation, national implementation, and
international financing of development programs; and will submit to the
Council of the Organization of American States such recommendations as it
deems pertinent.

- 23 -

APPENDIX
Elements of National Development Programs

1. The establishment of mutually consistent targets to be sought over
the program period in expanding productive capacity in industry, agriculture,
mining, transport, power and communications, and in improving conditions of
urban and rural life, including better housing, education and health.
2. The assignment of priorities and the description of methods to
achieve the targets, including specific measures and major projects. Specific
development projects should be justified in terms of their relative costs and
benefits, including their contribution to social productivity.
3. The measures which will be adopted to direct the operations of the
public sector and to encourage private action in support of the development
program.
4. The estimated cost, in national and foreign currency, of major projects

and of the development program as a whole, year by year over the program period.
5. The internal resources, public and private, estimated to become
available for the execution of the program.
6. The direct and indirect effects of the program on the balance of

payments, and the external financing, public and private, estimated to be requir
for the execution of the program.
7. The basic fiscal and monetary policies to be followed in order to permit
implementation of the program within a framework of price stability.
8. The machinery of public administration—including relationships with
local governments, decentralized agencies and non-governmental organizations,

such as labor organizations, cooperatives, business and industrial organizations
to be used in carrying out the program, adapting it to changing circumstances
and evaluating the Drosrress made.

- 24 -

1 79

TITLE III
ECONOMIC INTEGRATION OF LATIN AMERICA
The American republics consider that the broadening of
present national markets in Latin America is essential to
accelerate the process of economic development in the Hemisphere.
It is also an appropriate means for obtaining greater productivity through specialized and complementary industrial
production which will, in turn, facilitate the attainment of
greater social benefits for the inhabitants of the various
regions of Latin America. The broadening of markets will also
make possible the better use of resources under the Alliance
for Progress. Consequently, the American Republics recognize
that:
1. The Montevideo Treaty (because of its flexibility and
because adherence to it is available to all of the Latin
American nations) and the Central American Treaty on Economic
Integration are appropriate instruments for the attainment of
these objectives, as was recognized in Resolution No. 11 (III)
of the Ninth Session of the Economic Commission for Latin
America.
2. The integration process can be intensified and
accelerated not only by the specialization resulting from the
broadening of markets through the liberalization of trade but
also through the use of such instruments as the agreements for
complementary production within economic sectors provided for
in the Montevideo Treaty.
3. In order to insure the balanced and complementary
economic expansion of all of the countries involved, the integration process should take into account, on a flexible basis,
the condition of countries at a relatively less advanced stage
of economic development, permitting them to be granted special,
fair, and equitable treatment.
4. In order to facilitate economic integration in Latin
America, it is advisable to establish effective relationships

- 25 •?7^
between the Latin American Free Trade Association and the group
of countries adhering to the Central American Economic Integration Treaty, as well as between either of these groups and
other Latin American countries. These arrangements should be
established within the limits determined by these instruments.
5. The Latin American countries should coordinate their
actions to meet the unfavorable treatment accorded to their
foreign trade in world markets, particularly that resulting
from certain restrictive and discriminatory policies of extracontinental countries and economic groups.
6. In the application of resources under the Alliance
for Progress, special attention should be given not only to
investments for multinational projects that will contribute
to strengthening the integration process in all its aspects,
but also to the indispensable financing of industrial production, and to the growing expansion of trade in industrial
products within Latin America.
7. In order to facilitate the participation of countries
at a relatively lower stage of economic development in multinational Latin American economic cooperation programs, and in
order to promote the balanced and harmonious development of
the Latin American integration process, special attention should
be given to the needs of these countries in the administration
of financial resources provided under the Alliance for Progress,
particularly in connection with infrastructure programs and
the promotion of new lines of production.
8. The economic integration process implies a need for
additional investment in various fields of economic activity
and funds provided under the Alliance for Progress should
cover these needs as well as those required for the financing
of national development programs,
9. When groups of Latin American countries have their
own institutions for financing economic integration, the
financing referred to in the preceding paragraph should

~< 7/1

- 26 -

'y

preferably be channeled through these institutions. With
respect to regional financing designed to further the
purposes of existing regional integration instruments, the
cooperation of the Inter-American Development Bank should
be sought in channeling extra-regional contributions which
may be granted for these purposes.
10. One of the possible means for making effective a
policy for the financing of Latin American integration would
be to approach the International Monetary Fund and other
financial sources with a view to providing a means for solving
temporary balance-of-payments problems that may occur in
countries participating in economic integration arrangements.
11. The promotion and coordination of transportation and
communications systems is an effective way to accelerate the
integration process. In order to counteract abusive practices
in relation to freight rates and tariffs, it is advisable to
encourage the establishment of multinational transport and
communication enterprises in the Latin American countries, or
to find other appropriate solutions.
12. In working toward economic integration and complementary economies, efforts should be made to achieve an appropriate
coordination of national plans, or to engage in joint planning
for various economies through the existing regional integration organizations. Efforts should also be made to promote an
investment policy directed to the progressive elimination of
unequal growth rates in the different geographic areas, particularly in the case of countries which are relatively less
developed.
13. It is necessary to promote the development of national
Latin American enterprises, in order that they may compete on
an equal footing with foreign enterprises.
14. The active participation of the private sector is
essential to economic integration and development, and except

in those countries in which free enterprise does not exist,
development planning by the pertinent national public agencies,
far frgm hindering such participation, can facilitate and guide
it, thus opening new perspectives for the benefit of the
community.
15. As the countries of the Hemisphere still under
colonial domination achieve their independence, they should be
invited to participate in Latin American economic integration
programs.

- 28 TITLE IV
BASIC EXPORT COMMODITIES
The American Republics recognize that the economic
development of Latin America requires expansion of its trade,
a simultaneous and corresponding increase in foreign exchange
incomes received from exports, a lessening of cyclical or
seasonal fluctuations in the incomes of those countries that
still depend heavily on the export of raw materials, and the
correction of the secular deterioration in their terms of trade.
They therefore agree that the following measures should
be taken:
'
I. National Measures
>>

» • • «

'

' " •

•"

i'

National measures affecting commerce in primary
products should be directed and applied in order to:
1. Avoid undue obstacles to the expansion of trade in
these products;
2. Avoid market instability;
3. Improve the efficiency of international plans and
mechanisms for stabilization;
4. Increase their present markets and expand their area
of trade at a rate'compatible with rapid development.
Therefore:
A, Importing member countries should reduce and if
possible eliminate, as soon as feasible, all restrictions and discriminatory practices affecting the
consumption and importation of primary products,
including those with the highest possible degree of
processing In the country of origin, except when these
restrictions are imposed temporarily for purposes of
economic diversification, to hasten the economic

- 29 1 77
development of less developed nations, or to
establish basic national reserves. Importing
countries should also be ready to support, by
adequate regulations, stabilization programs for
primary products that may be agreed upon with
producing countries.
B. Industrialized countries should give special attention
to the need for hastening economic development of
less developed countries. Therefore, they should
make maximum efforts to create conditions, compatible
with their international obligations, through which
they may extend advantages to less developed countries
so as to permit the rapid expansion of their markets.
In view of the great need for this rapid development,
industrialized countries should also study ways in
which to modify, wherever possible, international
commitments which prevent the achievement of this
objective.
C. Producing member countries should formulate their
plans for production and export, taking account of
their effect on world markets and of the necessity
of supporting and improving the effectiveness of
international stabilization programs and mechanisms.
Similarly they should try to avoid increasing the
uneconomic production of goods which can be obtained
under better conditions in the less developed countries
of the Continent and which are an important source
of employment.
D. Member countries should adopt all necessary measures
to direct technological studies toward finding new
uses and by-products of those primary commodities that
are most important to their economies.
E. Member countries should try to reduce, and, if possible,
eliminate within a reasonable time export subsidies
and other measures which cause instability in the
markets for basic commodities and excessive fluctuations in prices and income.

- 30 1 7Q
International Cooperation Measures
1. Member countries should make coordinated, and
if possible, joint, efforts designed:
a. To eliminate as soon as possible undue protection of the production of primary products;
b. To eliminate internal taxes and reduce
excessive domestic prices which discourage
the consumption of imported primary products;
c. To seek to end preferential agreements and
other measures which limit world consumption
of Latin American primary products and their
access to international markets, especially
the markets of Western European countries
in process of economic Integration, and of
countries with centrally planned economies.
d. To adopt the necessary consultation mechanisms
so that their marketing policies will not have
damaging effects on the stability of the
markets of basic commodities.
2. Industrialized countries should give maximum
cooperation to less developed countries so that
their raw material exports will have the greatest
degree of processing that is economic.
3. Through their representation in international
financial organizations, member countries should
suggest that these organizations, when considering
loans for the promotion of production for export,
take into account the effect of such loans on
products which are in surplus in world markets.
4. Member countries should support the efforts being
made by international commodity study groups and

1

i

••--'

- 31 by the Commission on International Commodity
Trade of the United Nations. In this connection, it should be considered that producing and
consuming nations bear a joint responsibility
for taking national and international steps to
reduce market instability.
The Secretary General of the Organization of
American States shall convene a group of experts
appointed by their respective Governments to meet
before November 30, 1961 and to report, not later
than March 31, 1962 on measures to provide an
adequate and effective means of offsetting the
effects of fluctuations in the'volume and prices
of exports of basic products. The Government
experts shall:
V

a.

Consider the questions regarding compensatory
financing raised during the present meeting;

b. Analyze the proposal for establishing an
international fund for the stabilization of
export receipts submitted in the Report of
the Group of Experts to the Special Meeting
of the IA-ECOSOC as well as any other alternative proposals;
c. Prepare a draft plan for the creation of
mechanisms for compensatory financing. This
draft plan should be circulated among the
member Governments and their opinions obtained
well in advance of the next meeting of the
Commission on International Commodity Trade.
Member countries should support the efforts under
way to improve and strengthen international
commodity agreements and should be prepared to
cooperate in the solution of specific commodity
problems. Furthermore, they should endeavor to

- 32 adopt adequate solutions for the short-and
long-term problems affecting markets for primary
products so that the economic interests of
producers and consumers are equally safeguarded.
7. Member countries should request the cooperation
of other producer and consumer countries in
stabilization programs, bearing in mind that
the raw materials of the Western Hemisphere are
also produced and consumed in other parts of the
world.
8. Member countries recognize that the disposal of
accumulated reserves and surpluses can be a
source for achieving the goals outlined in the
first part of this Title, so that, together with
the generation of local resources, the consumption of essential products in the receiving
countries may be simultaneously increased. The
disposal of surpluses and reserves should be
carried out in an orderly manner, in order to:
a. Avoid disturbing existing commercial markets
in member countries, and
b. Expand the sale of their products to other
markets.
However, It is recognized that:
a. The disposal of surpluses should not displace
commercial sales of identical products traditionally carried out by other countries; and
b. Such sales should not substitute for large
scale financial and technical assistance
programs.

- 33 1 Pi
__ w__

IN WITNESS WHEREOF this Charter is signed,
in Punta del Este, Uruguay, on the seventeenth
day of August, ninteen hundred sixty-one.
The original texts shall be deposited in
the archives of the Pan American Union, through
the Secretary General of the Special Meeting,
in order that certified copies may be sent to
the Governments of the Member States of the
Organization of American States.
The records of the Conference include a
statement that the only authoritative text
of agreements reached during the Conference
is contained in the Charter of Punta del Este
and in the specific resolutions passed by the
Conference.

1 £9

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TREASURY DEPARTMENT

1 p 1
_v 0 -J

WASHINGTON, D.C.
August 28, 1961
)R RELEASE A . M . NEWSPAPERS,
jgsday, August 29, 1961.
|,

RESULTS OF TREASURY'S WEEKLY BILL OFFERING

t| 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 June 1, 1961, and
tye other series to be dated August 31, 1961, which were offered on August 23, were opened
11; the Federal Reserve Banks on August 28. Tenders were invited for $1,100,000,000, or
lereabouts, of 91-day bills and for $600,000,000, or thereabouts, of 182-day bills. The
stalls of the two series are as follows?
|NSE OF ACCEPTED
MPETITIVE BIDS:

High
Low
Average

91-day Treasury bills
maturing November 3C, 196l
Approx. Equiv.
Price
Annual Rate
27275?"
99.1*25
2.31*6$
99.1*07
2.321$ 1/
99.1*13

182-day Treasury bills
maturing March 1, 1962
Approx. Equiv.
Price
Annual Rate
98.691
2.539$
98.663
2.61*5$
98.677
2.617$ 1/

90 percent of the amount of 91-day bills bid for at the low price was accepted
80 percent of the amount of 182-day bills bid for at the low price was accepted

JTAL TENDERS APPLIED FOR AND ACCEPTED BY FEDERAL RESERVE DISTRICTS?
(District
(Boston
j'lNew York
Philadelphia
JjCleveland
.'jRichmond
{Atlanta
^Chicago
'tfSt. Louis
iinneapolis
"'Kansas City
illas
San Francisco
TOTALS

Applied For
$
28,211*, 000
1,322,200,000
2l*,23i*,000
21,1*1*0,000
9,1*99,000
2l*,580,000
236,i*7l*,000
2i*,802,000
23,556,000
33,591,000
23,1*85,000

U8,530,ooo
$1,820,605,000

Accepted
$
15,81_*,OOQ
718,700,000
9,23l*,000
21,1*1*0,000
9,1*99,000
22,375,000
177,67l*,000
20,702,000
23,556,000
23,091,000
16,085,000
1*2,030,000

Applied F o r
$ 5,7^3,000
750,688,000
7,828,000
17,627,000
1,039,000
3,62i*,000
92,928,000
l*,ll*6,000
7,1*66,000
5,250,000
9,218,000
27,859,000

Accepted
$ 5,763,000
1*60,688,000
2,828,000
17,627,000
1,039,000
3,l*2i*,000
57,028,000
3,896,000
7,1*66,000
5,250,000
7,118,000
27,859,000

$1,100,200,000 a /

$933,1*56,000

$600,006,000 b /

J Includes $199,281*,000 noncompetitive tenders accepted at the average price of 99.1*13
"! Includes $li3,721,000 noncompetitive tenders accepted at t h e average price of 98.677
'J On a coupon issue o f the same length and for the same amount invested, the return o n
'-these bills would provide yields of 2.37$, for the 91-day b i l l s , and 2.69$, for the
182-day bills. Interest rates o n bills are quoted in terms o f bank discount with
Ijithe return related to the face amount of the bills payable at maturity rather than
fthe amount invested and their length in actual number of days related to a 360~day
II year. In contrast, yields o n certificates, notes, and bonds are computed in terms
! ° f interest o n t h e amount invested, and relate the number of days remaining i n a n
9 interest payment period to the actual number of days in the period, w i t h semiannual
mounding if more than one coupon period is involved.

BETA - MODIFIED
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

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 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 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.

'

-21 PC
"v"w ~

BETA - MODIFIED

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 incorpo-

rated banks and trust companies and from responsible and recognized dealers in invest
ment securities. Tenders from others must be accompanied by payment of 2 percent of
the face amount of Treasury bills applied for, unless the tenders are accompanied by
an express guaranty of payment by an incorporated bank or trust company.
Immediately after the closing hour, tenders will be opened at the Federal Reserve Banks and Branches, following which public announcement will be made by the
Treasury Department of the amount and price range of accepted bids. Those submitting tenders will be advised of the acceptance or rejection thereof. The Secretary
of the Treasury expressly reserves the right to accept or reject any or all tenders,
in whole or in part, and his action in any such respect shall be final. Subject to
these reservations, noncompetitive tenders for $ 200,000 or less for the additional
bills dated June 8, 1961

1ESE

, ( 91

days remaining until maturity date on

"ipqr

December 7_ 1961
) 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 September 7. 1961 , in cash or
other immediately available funds or in a like face amount of Treasury bills maturing September 7. 1961

Cash and exchange tenders will receive equal treatment.

psfr
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 a__v e__empfeao__~ as such, and loss

m^mmmm.

188
TREASURY DEPARTMENT
Washington

FOR IMMEDIATE RELEASE, JmSXWXffl. August 28, 1961
TREASURY'S WEEKLY BILL OFFERING
The Treasury Department, by this public notice, invites tenders for two series
of Treasury bills to the aggregate amount of $1,700,000^000 , or thereabouts> for

QBJ.
cash and in exchange for Treasury bills maturing September 7, 1961 , in the amount

^r
of $1,701,021,000 , as follows:

w—
91 -day bills (to maturity date) to be issued September 7, 1961 ,

TJBJT

ing an additional amount of bills dated June Q9w1961
,
in the amount of $ 1,100,000,000 , or thereabouts, representand to mature December 7, 1961 , originally issued in the
amount of $500_351*_00Q

y the additional and original bills

pa)
to be freely interchangeable.
182 -day bills, for $600,000,000 , or thereabouts, to be dated

TEXT

nier
September 7. 1961

, and to mature

March 8, 1962

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

denominations of $1,000, $5,000, $10,000, $100,000, $500,000 and $1,000,000 (ma
value).

Tenders will be received at Federal Reserve Banks and Branches up to the closin
Daylight Saving
hour, one-thirty o'clock p.m., Easteni/s__M_{__M time, Friday, September 1. 1961 __•

Tenders will not be received at the Treasury Department, Washington. Each tende
must be for an even multiple of $1,000, and in the case of competitive tenders
price offered must be expressed on the basis of 100, with not more than three

/3

TREASURY DEPARTMENT
•WMI_M'^-Bm-_-Ml;..1iM_MB«^

WASHINGTON, D.C.
August 28, 19
FOR IMMEDIATE RELEASE
TREASURY'S WEEKLY BILL OFFERING '
The Treasury Department, by this public notice, invites tenders
for two series of Treasury bills to the aggregate amount of
$ 1,700,000,000,or thereabouts, for cash and in exchange for
Treasury bills maturing September 73 196l*in the amount of
$1,701,021,000, as follows:
91-day bills (to maturity date) to be issued September 7, 196l,
in the amount of $1,100,000,000, or thereabouts, representing an
additional amount of bills dated June 8, 1961,
and to
mature December 7, 1961, originally issued in the amount of
$500,35^,000,
the additional and original bills to be freely
interchangeable.
182-day bills, for $600,000,000, or thereabouts, to be dated
September 7, 196^,and to mature March 8, 1962.
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 Daylight
Saving time, Friday, September 1, 196l . 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.
D-213

- 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
June 8, 196l,
01- days remaining until maturity date on
December 7, 19^1) 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 September 7, 196l,
in cash or other immediately available funds or in a like face
amount of Treasury bills maturing September 7, 196l.Cash and
exchange tenders will receive equal treatment. Cash adjustments
will be made for differences between the par value of maturing
bills accepted in exchange and the issue price of the new bills.
The income derived from Treasury bills, whether interest or
gain from the sale or other disposition of the bills, does not have
any exemption, as such, and loss from the sale or other disposition
of Treasury bills does not have any special treatment, as such,
under the Internal Revenue Code of 195^. The bills are subject to
estate, inheritance, gift or other excise taxes, whether Federal or
State, but are exempt from all taxation now or hereafter imposed on
the principal or interest thereof by any State, or any of the
possessions of the United States, or by any local taxing authority.
For purposes of taxation the amount of discount at which Treasury
bills are originally sold by the United States is considered to be
interest. Under Sections h^k (b) and 1221 (5) of the Internal
Revenue Code of 195^ the amount of discount at which bills issued
hereunder are sold is not considered to accrue until such bills are
sold, redeemed or otherwise disposed of, and such bills are excluded
from consideration as capital assets. Accordingly, the owner of
Treasury bills (other than life Insurance companies) issued hereunder
need include in his income tax return only the difference between
the price paid for such bills, whether on original issue or on
subsequent purchase, and the amount actually received either upon
sale or redemption at maturity during the taxable year for which the
return is made, as ordinary gain or 0O0
loss.
Treasury Department Circular No. klQ, Revised, and this notice,
prescribe the terms of the Treasury bills and govern the conditions
of theirReserve
issue. Bank
Copies
of the circular may be obtained from any
Federal
or Branch.

TREASURY DEPARTMENT

Us

WASHINGTON, D.C.
August 31,

FOR IMMEDIATE RELEASE
TREASURE DECISION ON PIG IRON
UNDER ANTIDUMPING ACT
The Treasury Department has determined that pig iron
from West Germany is not being, nor likely to be, sold in
the United States at less than fair value witihin the meaning of the Antidumping Act. Notice of the determination
will be published in the Federal Register.
Appraising officers are being instructed to proceed
with appraisement of this merchandise from West Germany
without regard to any question of dumping.
The dollar value of imports of pig iron from West
Germany received during i960 was approximately $19,000.

TREASURY DEPARTMENT
WASHINGTON, D.C.

August 31* 196l

FOR IMMEDIATE RELEASE

TREASURY DECISION ON PIG IRON
UNDER ANTIDUMPING ACT
The Treasury Department has determined that pig iron
from West Germany is not being, nor likely to;' be, sold in
1

the United States at less than fair value within the meaning of the Antidumping Act. Notice of the determination
will be published in the Federal Register.
Appraising officers are being instructed to proceed
with appraisement of this merchandise from West Germany
without regard to any question of dumping.
The dollar value of imports of pig iron from West
Germany received during i960 was approximately $19,000.

1375

__ v_ v_»

TREASURY DEPARTMENT
WASHINGTON, D.C
August 31, 1961

' FOR IMMEDIATE RELEASE

TREASURY DECISION ON HARDBOARD
UNDER THE ANTIDUMPING ACT
The Treasury Department has determined that hardboard
from Brazil is not being, nor likely to be, sold in the
United States at less than fair value within the meaning
of the Antidumping Act. Notice of the determination will
be published in the Federal Register.
Appraising officers are being instructed to proceed
with the appraisement of this merchandise from Brazil
without regard to any question of dumping.
The dollar value of imports of hardboard from Brazil
received during i960 was approxijnately $200,000.

TREASURY DEPARTMENT
19 •
^WASHINGTON, D.C
August 31, 196l
FOR IMMEDIATE RELEASE

TREASURY DECISION ON HARDBOARD
UNDER THE ANTIDUMPING ACT
The Ofreasury Department has determined that hardboard
from Brazil is not being, nor likely to be, sold in the
United States at less than fair value within the meaning
of the Antidumping Act. Notice of the determination will
be published in the Federal Register.
Appraising officers are being instructed to proceed
with the appraisement of this merchandise from Brazil
without regard to any question of dumping.
The dollar value of imports of hardboard from Brazil
received during i960 was approximately $200,000.

ISO

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TREASURY DEPARTMENT
WASHINGTON, D.C.
September 1, 1961 S1
FOR RELEASE A. M. NEWSPAPERS, Saturday, September 2. 196l.
RESULTS OF TREASURY'S WEEKLY BILL OFFERING
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 June 8. 1961, and
the other series to be dated September 7, 1961, which were offered on August 28, were
opened at the Federal Reserve Banks on September 1. Tenders were invited for
$1,100,000,000, or thereabouts, of 91-day bills and for $600,000,000, or thereabouts, of
182-day bills. The details of the two series are as followst
RANGE OF ACCEPTED 91-day Treasury bills . 182-day Treasury bills
COMPETITIVE BIDS J
maturing December 7_ 1961
:
maturing March 8, 1962
Approx. Equiv. :
Approx* Equiv.
Price
Annual Rate
8
Price
Annual Ratt
High
99.U02 a/
§73^?
s
98.650
2.670%
Low
99.393 "
2.UOL*
*
98.633
2.70W
Average
99.39*
2.392% 1/ s
98.639
2.692* 1/
a/ Excepting one tender of $300,000
65 percent of the amount of 91-day bills bid for at the low price was accepted
91 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 s Applied For Accepted
Boston
% 21*, 71*5,000 |
20,71*5,000 s % 10,550,000 $ 10,550,000
New York
1,668,890,000
7l*5,3U0,000 %
915,006,000
1*73,683,000
Philadelphia
2l*,7U9,000
9,5lU,000 %
7,81*1,000
2,609,000
Cleveland
30,71*2,000
28,525,000 j
27,061*,000
26,961*,000
Richmond
16,305,000
13,955,000 :
2,052,000
2,052,000
Atlanta
17,1*32,000
15,160,000 j
3,062,000
2,862,000
Chicago
253,528,000
11*8,028,000 %
73,97l*,000
32,l*2i*,000
St. Louis
19,7i*U,00Q
1U,391*,000 i
l*,275,000
3,275,000
Minneapolis
2O,l|l48,0O0
!i*,598,000 «
7,1°3,000
2,693,000
Kansas City
35,601,000
2l*,60i,Q0Q j
10,91*3,000
10,71*3,000
Dallas
16,387,000
12,037,000 t
7,11*6,000
1*,056,000
, San Francisco
85,29l*_OOQ
gl*,170,00Q t
38,261,000
28,261,000
j
TOTALS
W M ^ m
WMMWt>
y ftl,i67,#7,0O0 ^00,17^,000 •/
|b/ Includes $186,967,000 noncompetitive tenders accepted at the average price of 99.395
jc/ Includes $37,861,000 noneomp&titiw tenders aocepted at the average price of 98.639
1/ On a coupon issue of the- g&ttie length and for the same amount invested, the return on
these bills would provide yields of 2*liW, for the 91-day bills, and 2.11%, for the
182-day bills. Interest rates on bills are quoted in terms of bank discount with
the return related to the face amount of the bills payable at maturity rather than
the amount invested and their length in actual number of days related to a 360-day
year. In contrast, yields on certificates, notes, and bonds are computed in terms
of interest on the amount invested, and relate the number of days remaining in an
interest period to the actual number of days in the period, with semiannual
D-231*
compounding if more
- than one coupon period is involved.

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1 Q1

TREASURY DEPARTMENT

1 O "V

WASHINGTON, D.C.

N^>V^

September 7, 1961
FOR IMMEDIATE RELEASE
UNITED STATES AND COSTA RICA SIGN
EXCHANGE AGREEMENT
The United States and Costa Rica today concluded a
six million dollar Exchange Agreement designed to assist
Costa Rica's efforts to simplify its foreign exchange rate
structure and to achieve an exchange system free of
restrictions.
The agreement was signed by U. S. Treasury Secretary
Douglas Dillon, Manuel Escalante, Ambassador of. Costa Rica,
and Dr. Alvaro Vargas, Assistant Manager of the Central Bank
of Costa Rica.
The Exchange agreement with the U. S. Treasury will be
in effect for one year.

It supplements a $15 million

stand-by arrangement with the International Monetary Fund,
which was announced yesterday..

0O0

D-215

^

TREASURY DEPARTMENT
WASHINGTON, D.C. N ^ V V ;
September 6, 1961
FOR IMMEDIATE RELEASE
UNITED STATES AND COSTA RICA SIGN
EXCHANGE AGREEMENT
The United States and Costa Rica today concluded a
six million dollar Exchange Agreement designed to assist
Costa Rica's efforts to simplify its foreign exchange rate
structure and to achieve an exchange system free of
restrictions.
The agreement was signed by U. S. Treasury Secretary
Douglas Dillon, Manuel Escalante, Ambassador of Costa Rica,
and Dr. Alvaro Vargas, Assistant Manager of the Central Bank
of Costa Rica.
The Exchange agreement with the U. S. Treasury will be
in effect for one year.

It supplements a $15 million

stand-by arrangement with the International Monetary Fund,
which was also announced today.

0O0

D-215

1 QC
„ _ *-> - ^

____-_ax_QC--CB3_------y
from the sale or other disposition of Treasury bills does not have any special
treatment, as such, under the Internal Revenue Code of 1954. The bills are subject
to estate, inheritance, gift or other excise taxes, whether Federal or State, but
are exempt from all taxation now or hereafter imposed on the principal or interest
thereof by any State, or any of the possessions of the United States, or by any
local taxing authority. For purposes of taxation the amount of discount at which
Treasury bills are originally sold by the United States is considered to be interest,
Under Sections 454 (b) and 1221 (5) of the Internal Revenue Code of 1954 the amount
of discount at which bills issued hereunder are sold is not considered to accrue
until such bills are sold, redeemed or otherwise disposed of, and such bills are excluded from consideration as capital assets. Accordingly, the owner of Treasury
bills (other than life insurance companies) issued hereunder need include in his
income tax return only the difference between the price paid for such bills, whether
on original issue or on subsequent purchase, and the amount actually received either
upon sale or redemption at maturity during the taxable year for which the return is
made, as ordinary gain or loss.
Treasury Department Circular No. 418, Revised, and this notice, prescribe the
terms of the Treasury bills and govern the conditions of their issue. Copies of
the circular may be obtained from any Federal Reserve Bank or Branch.

yM&D3uMB£W^
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 ex-

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

rated banks and trust companies and from responsible and recognized dealers i

ment securities. Tenders from others must be accompanied by payment of 2 perce

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

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

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

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

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

these reservations, noncompetitive tenders for $200,000 or less for the additi
_$____)_

bills dated

June 15, 1961
. ( 91
days remaining until maturity date on
p__5
_$__x)
December 14, 1961 ) and noncompetitive tenders for $100,000 or less for the
j
aJBtf
_$ae#
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
tive issues. Settlement for accepted tenders in accordance with the bids must
made or completed at the Federal Reserve Bank on September 14, 1961 , in cash
$i__5c
other immediately available funds or in a like face amount of Treasury bills matur-

ing September 14, 1961 . Cash and exchange tenders will receive equal treatmen

Cash adjustments will be made for differences between the par value of maturin
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 €xemT3t_i____* as such, a

__m_so_xxxx
id>;^>»:*t*/»M>.*>ii>'Vii.>.<

TREASURY DEPARTMENT
Washington
FOR IMMEDIATE RELEASBpcs^^ September 6, 1961
*^ TREASURY'S WEEKLY BILL OFFERED
The Treasury Department, by this public notice, invites tenders for two series
of Treasury bills to the aggregate amount of $1.700.000.000 y or thereabouts> for
cash and in exchange for Treasury bills maturing September 14r 1961 y in the amount
of $ 1,700,712,000 , as follows:

91 -day bills (to maturity date) to be issued September U, iggj ,
in the amount of $1,100,000.000 , or thereabouts, representing an additional amount of bills dated June 15. 1961 y
and to mature December 14, 1961 y originally issued in the
amount of $ 500,368,000
, the additional and original bills
_pJ3C_5
to be freely interchangeable.
182 -day bills, for $ 600,000,000 , or thereabouts, to be dated
September 14, 1961 , and to mature March 15, 1962 .

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 (maturity1
value). j
Tenders will be received at Federal Reserve Banks and Branches up to the closing
Daylight Saving
hour, one-thirty o'clock p.m., Easte_Ty__j_a_______^ time, Monday, September 11. 1961 _
Tenders will not be received at the Treasury Department, Washington. Each tender
must be for an even multiple of $1,000, and in the case of competitive tenders the
price offered must be expressed on the basis of 100, with not more than three

TREASURY DEPARTMENT

18

~

WASHINGTON, D.C.
September 6, 1961
FOR IMMEDIATE RELEASE
TREASURY'S WEEKLY BILL OFFERING
The Treasury Department, by this public notice, invites tenders
for two series of Treasury bills to the aggregate amount of
$1,700,000,000, or thereabouts, for cash and in exchange for
Treasury bills maturing September l4,196l,in the amount of
$1,700,712,000, as follows:
91-day bills (to maturity date) to be issued September 14, 1961,
in the amount of $1,100,000,000, or thereabouts, representing an
additional amount of bills dated June 15, 19&1,
and to
mature December 14, 196l,originally issued in the amount of
$500,3^8,000, the additional and original bills to be freely
interchangeable.
182-day bills, for $600,000,000, or thereabouts, to be dated
September l4,196l,and to mature March 15. 1962.
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 Daylight
Saving time, Monday, September 11, 1961. 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.
D-216

- 2 Immediately after the closing hour, tenders will be opened at
the Federal Reserve Banks and Branches, following which public
announcement will be madev 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
June 15, 196l,
(91-days remaining until maturity date on
December 14, 1961) 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 September 14, 1961,
in cash or other immediately available funds or in a like face
amount of Treasury bills maturing September l4,196l.Cash and
exchange tenders will receive equal treatment. Cash adjustments
will be made for differences between the par value of maturing
bills accepted in exchange and the Issue price of the new bills.
The income derived from Treasury bills, whether interest or
gain from the sale or other disposition of the bills, does not have
any exemption, as such, and loss from the sale or other disposition
of Treasury bills does not have any special treatment, as such,
under the Internal Revenue Code of 1954. The bills are subject to
estate, inheritance, gift or other excise taxes, whether Federal or
State, but are exempt from all taxation now or hereafter imposed on
the principal or interest thereof by any State, or any of the
possessions of the United States, or by any local taxing authority.
For purposes of taxation the amount of discount at which Treasury
bills are originally sold by the United States is considered to be
interest. Under Sections 454 (b) and 1221 (5) of the Internal
Revenue Code of 1954 the amount of discount at which bills issued
hereunder are sold is not considered to accrue until such bills are
sold, redeemed or otherwise disposed of, and such bills are excluded
from consideration as capital assets. Accordingly, the owner of
Treasury bills (other than life insurance companies) issued hereunder
need Include in his income tax return only the difference between
the price paid for such bills, whether on original issue or on
subsequent purchase, and the amount actually received either upon
sale or redemption at maturity during the taxable year for which the
0O0
return is made, as ordinary gain or loss.
Treasury Department Circular No. 4l8, Revised, and this notice,
Federal
prescribe
of theirReserve
issue.
the terms
Bank
Copies
of
orthe
Branch.
of Treasury
the circular
bills
may
and
begovern
obtained
thefrom
conditions
any

TREASURY DEPARTMENT
Washington
September 8, 1961
FOR RELEASE: UPON DELIVERY
ADDRESS OF THE HONORABLE DOUGLAS DILLON,
SECRETARY OF THE TREASURY,
BEFORE THE COMMONWEALTH CLUB OF CALIFORNIA,
HOTEL SHERATON-PALACE, SAN FRANCISCO,
SEPTEMBER 8, 1961, 12:30 PM, EDT, (3:30 PM, EDT)
"OUR INSEPARABLE DOMESTIC AND FOREIGN ECONOMIC POLICIES"

Although the world's attention is focussed on Berlin, I want
to talk to you today about two inseparable problems that may be
less dramatic than Berlin, but are no less important:
The state of our economy and its relative strength as reflected
in our international balance of payments.
Make no mistake about the importance of these problems. Unless
we achieve steady and rapid economic growth with price stability
and full employment — unless we attain reasonable equilibrium in
our balance of payments — we shall not have the capacity to cope
effectively with other Berlins or to meet our urgent national needs'
here at home. The strength of our economy has a profound effect
upon our future. Our place in the world of tomorrow depends upon
the efforts we make today.
Letfs take a look at some of our recent efforts and where we
stand now:
Last January, we were in a recession, unemployment was high, and
production was falling off.
Our first duty as a new Administration was to use the
powers of government to stem the decline, encourage the natural
forces of recovery and re-establish the basic vitality of our
economy.
This we did. The Administration acted promptly in a number of
areas:
As in 1958, temporary unemployment benefits were extended to
those out of work more than six months — thereby putting half a
billion dollars into the hands of purchasers who needed it most.
D-217

- 2 Defense construction and procurement programs were accelerated.
Special dividends were paid in advance on government life insurance.
Highway payments to the states were made earlier than scheduled.
These and many similar actions helped to bring the Nation promptly
out of recession and into a strong recovery. They stimulated the
basic forces of our private economy which took hold and carried the
Gross National Product from a first quarter low of $501 billion to
a rate of $5l6 billion in the second quarter.
The recovery has been widespread and rapid — in fact, the
fastest on record. We achieved a new all time high in industrial
production last July, just five months after the recession low of
February. Personal income also reached a record high of $4l9
billion in July — a four percent rise from February's low. Most
Important, the improvement has covered a broad spectrum of our
economy and has not been accompanied by price increases or other
signs of inflation.
The steady advance of our economy, unaccompanied by speculative
buying, is evidence of its underlying strength. It should give us
confidence for the future. Manufacturers' new orders for durable
goods are up. Inventories are in good shape. Personal savings
are at a high level. In short the business outlook is decidedly
promising.
Because of this we can now look forward to a Gross National
Product of about $540 billion in the coming quarter, Increasing
to around $565 billion in the second quarter of next year. And
for the year 1961 as a whole, we now expect our Gross National
Product to exceed $520 billion — a three and a half percent increase
over i960.
Despite our recovery, unemployment has remained just under
7 percent — an intolerably high level. Indications are, however,
that gradual Improvement is about to begin, and we expect it to be
reflected in September's employment figures. If the anticipated
rate of growth materializes, unemployment should fall to 6 percent
•or less by Christmas and possibly to 5 percent by the middle of 1962.
A year from now, if all goes well, unemployment should be gradually
approaching four and a half percent .... on Its way to the 4 percent
level presently considered to be reasonably full employment.
But even this heartening prospect is not good enough. We
simply cannot continue to rely on increasing levels of production
to provide adequate employment for all who are ready and willing to
work. Rapidly advancing technology has brought with it a real
need to train and retrain workers in the skills demanded by new
techniques.

- 3It was to meet this problem that President Kennedy last spring
requested a stepped-up training program to help those who lose their
jobs because of changes in industrial methods. This problem has also
been recognized by a group of Republican Congressmen who have been
closely studying unemployment and who recently called for better
retraining facilities. I hope this means that the program requested
by the President, which has already been approved by the Senate, will
soon become law.
Inevitably, the improvement in our economy has had its cost.
There was a deficit of $3.9 billion in the year ending this past
June, and a still larger deficit is in prospect for the current fiscal
year. No one, of course, likes deficits — and least of all, those
of us in the Treasury, who must find the money to meet them. But
the fact is that we would still have had a sizable deficit last
June even if we had done absolutely nothing to stimulate the economy
and had callously ignored the more than a million unemployed who had
exhausted their benefits.
For our tax revenues reflecting the impact of the recession
fell by a billion and a half dollars from the estimate made by
President Eisenhower in January while continuing normal expenditures,
chiefly in the defense area, ran upwards of half a billion dollars
above the same estimate, thus converting an estimated $77 million
surplus into a deficit of something over $2 billion. It is true
that additional expenditures under President Kennedy's programs
further increased the deficit to the $3.9 billion figure which I
have mentioned but we should not forget that without the stimulus of
these measures, our economy would certainly not be where it is today.
For the current fiscal year ending June 30, 1962, we face
another sizable deficit. There are three basic reasons for this
prospect:
First, our revenues for this fiscal year will be based
mainly upon income and profits for the calendar year 196l, which
includes the very bottom of the recession* Accordingly, our
receipts will be reduced since they will to a large extent reflect
recession-level earnings.
Second, our expenditures will be unavoidably increased by
the Berlin crisis, which this year will add about two-and-threequarter billion dollars to our defense bill. The additional
defense burden has been heavy. Indeed, more than 60 percent of
the increase in fiscal 1962 expenditures is due to defense needs.
Despite this, our over-all federal expenditures will not be
historically high in comparison to Gross National Product.
Quite the contrary. They are expected to amount to some 16 percent
of our GNP — a proportion that has been exceeded in eight of the
past ten fiscal years.

_. 4 Finally, It now appears that the Congress may once more
fail to enact the long overdue increase in postal rates requested
by both Presidents Eisenhower and Kennedy to meet the mounting
costs of delivering the mail. Should the Congress again fail to
accept these Executive recommendations an undesirable and wholly
unnecessary three-quarters of a billion dollars would be added to
this year's deficit. Thus, instead of the $5.3 billion estimated
in July, the deficit would be in the $6 billion range. I cannot
be more specific at this time. However, in a few weeks, after the
Congress has completed its work, the Budget Bureau will publish its
regular mid-year review containing new and complete estimates
taking into account all Congressional actions. Meanwhile, I can
state categorically that any exaggerated speculation you may have
heard about a considerably larger deficit is simply not in
accordance with the facts.
There has been talk that our current deficit will contribute
to inflation. I disagree. In view of our high rate of unemployment
and the unused plant capacity in nearly every Industry, I see no
present danger of inflation in the classic pattern of too many
dollars chasing too few goods. Naturally, I do not maintain that
large or continuing deficits would not be inflationary. Of course
they would be. But In our present economic situation, a deficit
of the size envisaged for this year should not be inflationary.
If this year's deficit were to be followed by another substantial
deficit In fiscal 1963. then there would certainly be cause for concern.
But there is no reason to expect a deficit in 1963. The President
has made it emphatically clear that he intends to submit a balanced
* budget for fiscal 1963 to Congress next January. If the international
situation should further deteriorate, necessitating still larger
defense outlays, the President will not hesitate to ask for tax
increases should they be needed to balance the budget. New taxes,
however, will not be needed to cover our present programs. For
revenues for fiscal 1963 — the year that begins next July — will
be based upon the earnings of calendar year 1962, which we have
every reason to believe will be a very good one.
1962 will also be the first full year following a recession.
The last such year — 1959 — saw sharply increased earnings,
reflecting the return of prosperity, which led to a $10 billion
rise in revenues for fiscal i960. There is no reason why fiscal
1963 should not repeat this pattern which would mean receipts of
over $90 billion.
There is another kind of Inflation,however, over which government has little or no control. This is so-called "cost-push"
inflation, resulting from unjustified price increases or from wage
settlements that exceed productivity gains. These patterns
must
be avoided
if we
are
to prevent
anconsumer,
inflation
that
would
management
Nation.
not only
management
The
and
exercise
labor
and
is
of
a
labor,
self-restraint
public
but
service
the
at
ofthis
the first
time
our
economy,
by
order.
both harm
and our

So much for our domestic economy. The outlook for accelerating
prosperity is good, and substantial improvement is now in sight for
the two most persistent reminders of the recession: the budgetary
deficit and unemployment.
Let me turn now to the complex subject of our international
balance of payments. Only in recent years has our general public
become aware of this problem. Yet it is a highly important aspect
of our over-all economic situation — and it will continue to be.
Our balance of payments position first became acute in 1958.
During that year and the two following, $11 billion more flowed out
of the United States than came in. Last fall, speculation, always
present in limited amounts, suddenly became a major factor in
the international market. Fed by international unrest, unfounded
rumors of a gold price change, and by the lure of higher interest
rates in money centers abroad, a total of $2.0 billion in shortterm capital was drawn out of the United States. This outflow
of short-term assets led to the loss of $1.6 billion in gold
during the last part of i960. The peak rate of the gold outflow
was reached in late i960 and early 1961. Had that rate been
permitted to continue, it would have drained nearly $4 billion
worth of gold from the United States during the current year —
approximately one quarter of our gold supply.
Immediately after his inauguration, the President met the
situation with a flat assurance that there would be no devaluation
of the dollar, and no change in the price of gold. This removed the
basis for speculation. Other nations cooperated to limit inducements
to the flow of short-term capital. The gold outflow was halted.
Since February, our gold stocks have actually Increased. But
the improvement in our gold situation does not mean that our
balance of payments problems have blown away with the wind. Far
from it. We have, however, gained time to set our house in order.
This we must do, and ways to do so are a constant and major preoccupation of the Treasury. Fundamental to success In this effort
is a Federal budget in reasonable balance throughout the business
cycle. This is one of the major reasons why the Administration is
determined to achieve a balance In the budget to be presented
next January.

- 6The Administration also intends to press forward with other
steps that have been taken since last January to ease the balance
of payments problem. We shall continue to restrict overseas purchases
with defense and foreign aid dollars, emphasizing the purchase of
our own products; to reduce spending by United States military
dependents abroad; to ship more goods in American vessels; to encourage
foreign tourists to visit the United States; and to limit the amount
of goods our own tourists may bring home duty-free. We are also
continuing to work closely with other member nations of the
International Monetary Fund in order to increase its capacity to
moderate short-term capital flows.
Most important, we will intensify our efforts to increase
United States exports. In addition to Important improvements in
the servicing of our exporters by the Departments of Commerce and
State, the Export-Import Bank has been developing a program to give
our exporters for the first time insurance facilities equal to those
available in other industrialized countries. This new program
should be in full operation before the end of the year and should
do much to stimulate our exports.
But no matter what facilities we provide our exporters, and no
matter how hard they work to increase sales, our export drive will
not succeed unless the broad gamut of our export goods are
competitive in price. I don't mean that our goods have to be the
cheapest. I do mean that when quality is taken into account, their
price must be competitive.
The achievement and maintenance of a truly competitive position
will demand constant effort. It will require the most rapid
>. possible acquisition by industry of new equipment and the employment
of cost-cutting production methods. The record shows that over the
past decade we have not been modernizing our capital equipment as
rapidly as our competitors in Europe and Japan. It was to increase
our rate of modernization that the President proposed a tax incentive
for the purchase of new equipment by business.
I am pleased that a solid majority of the House Committee on
Ways and Means, which has been holding hearings on the President's
tax proposals, has now publicly supported the incentive idea and
stated that it will bring a bill containing the tax incentive to
the floor of the House early In February. Thus the prospects are
good for this vitally needed continuing stimulus to our productivity.
In addition to rapid technological improvement In our
industrial plants, it is Important that pricing decisions and
wage settlements take full account of our national need to maintain
the lowest possible prices for our goods in world markets.

- 7-

preserving and Increasing them _ ™ ^ ^

y

* _ ? emusfc

work

at

world requires that ^ torn _«._.««„1an?1?!?l,t of the $b_w£e"
Sents Wfin,°Ut weakeni«S ou? _.£„__"._ Sf__it_n_Te8 °versea^ ™
J£™!' n d e v e r y Possible way to ~ d l . *£_ 3 f? s o n o u r °ommi.tforces on our balance of payments -! _ 1 * ? ! d £, l l a r d r a l n o f these
billion last year. This w»rm?,__
_ d r a i n w n i o h c ame to $3
our part for savings in dollar l___Sd,? n l y a * " * * « * « * search on
cooperation of our allies a. w e l l ! e n d l t u r e s a b r o a d, but the f u n
of payment. Secau^fwe^now'^aufr/^ ^20nMcWo° w"« °«* balance
b u l k of
expenditures be made here in the U n i t ^ $?,great
*l*
e s e ald
are not being spent abroad wherl thev wo.n* f?' P
dollar
y would
claim upon our cold ,tn»v« Vru
give foreigners a
bought L this fountS ^fdevllopi__ _ „ £ " " ^ T a n ^ u i ^ e n t
payments effect. I hope that fh_ ^ a n d s ' t h e r e i s n ° balance of
as it prepares to take fina? J £ i ° ° n S r ? „ s w 1 1 1 bear this in mind
an adequate foreign a!d appropri^Ln" ^ / " " " j n f B reques? for
security as ^l^S-^^^^^^^^J-JS. -^
can lS^oSJ_r_atoU,°%2LPSSn*» P.roW"» are still with us, we
cannot relax until t h J . e f i c i ^ H i ^ d f f 2 C i t fchls y e a r - But we
deficit m the balance o f parents i ^ a t e d ' / o r a o h r ° n *°
chronic deficit in the N a t E _ Budg.t?
^ fcolerable than a

pwosihtia0_!eady

price level

-d

a

'i^b__u__l_s^sysn^-i'»A

We must achieve t-Me. O-^«T 4*
^ will .urely face in theSfuturf ™
We must achieve it-'i-p tr__ _.
imperialism that threaten us? " * t 0

" " *0 m e e t

fche

C O n t a l n t h e for

responsibilities

°«s of aggressive

We must achieve it if we si*, i-^ m=„4- _u >
our own citizens for better ho___n« f o f w ? lncr ?asing needs of
from unnecessary hardship, and lor bet?L £ £ V C h 2 ? 1 8 ' f o r freedom
r oetter
children.
opportunities for their

'-• n 7

- 8 We must achieve it because we have an obligation and an
opportunity to help the third of the world's peoples who now live
in desperate want to achieve the better life they seek in freedom.
We dare not forfeit this opportunity to the Communists, who see in
misery the road to empire. In particular we must vigorously carry
forward the great concept of partnership with our friends in
Latin America that is the Alliance for Progress.
Our goal of a steadily expanding economy must not be just a
dream. For the world of today — and even more, for the world of
tomorrow — we must make of it a reality.

0O0

TREASURY DEPARTMENT
WASHINGTON, D.C.
September 7, 1961
FOR IMMEDIATE RELEASE
TREASURY ANNOUNCES ADVANCE REFUNDING AND CASH BORROWING PLANS
The Treasury announced today Its first public debt offering
designed especially to enlist long-term investors in the Government's
current financing program. At the same time, it outlined plans to
borrow $5 billion In new cash later in September and during October.
Holders of $7.6 billion of two issues of World War II Treasury
bonds will be given an opportunity to exchange them for additional
amounts of other outstanding bonds, all bearing coupons of 3-1/2
percent, which mature in 1980, 1990, and 1998.
This advance refunding offer is available to all holders of the
2-1/2 percent bonds of March 1965-70 and March 1966-71. Holdings of
these particular bonds are concentrated largely in insurance companies,
savings banks, and private individuals (many of them original World War
II subscribers).
The Treasury is making it possible for investors to gain
additional income by extending the maturity of their holdings, as they
choose, for additional periods of roughly 10 to 29 years. In order to
equal the terms of this offering, holders of the 1965-70 and 1966-71
bonds would otherwise have to reinvest the proceeds of their bonds on
maturity in comparable securities at Interest rates ranging from
4.28 percent to 4.36 percent.
To the extent that investors choose to extend the maturity of
their existing holdings, the Treasury will have accomplished some
needed restructuring of its outstanding debt, without diverting from
productive purposes in other sectors of economy the new savings
currently flowing Into the long-term capital markets. Books will be
open for subscriptions beginning Monday, September 11, and will remain
open through September 15. In addition, individuals will be allowed
to subscribe for a further period through September 20.
The Treasury will meet Its estimated cash needs of roughly
$5 billion over the next two months in three steps. On September 20
it will offer at auction $2-1/2 billion of Tax Anticipation Bills due
June 22, 1962, for payment on September 27. Commercial banks may pay
for such bills through their Tax and Loan accounts. Near the end of
September the Treasury plans to announce the terms for an early
October offering of approximately $2 billion in a Treasury note
maturing in the spring of 1963. On October 10. the Treasury will
auction, without Tax and Loan account credit, $2 billion of one-year
Treasury bills, to replace $1-1/2 billion of outstanding one-year
-218
bills which mature on October 16.

Recent increases in projected Defense programs have not
necessitated any revision in the Treasury's cash requirements for the
months immediately ahead. Added expenditures will affect the seasonal
cash surplus that normally occurs toward the end of the fiscal year.
For that reason, the Treasury has reduced the extent of its reliance
on a June Tax Anticipation Bill, in comparison with the uses made
of similar instruments in recent years. The Treasury is scheduling
the maturity of part of its borrowings for the spring of 1963,when
the return to a balanced budget for the fiscal year will again assure
a seasonal cash surplus of substantial size.

0O0

TREASURY DEPARTMENT
WASHINGTON, D.C.
September 7> 1961
FOR IMMEDIATE RELEASE
ADVANCE REFUNDING OFFER
The Treasury is offering holders of $iu7 billion 2-l/_# Bonds of
March 15, 1965-1970, and $2.9 billion 2-l/2# Bonds of March 15, 1966-1971,
which were issued during the war-loan drives in 19l*U, the right to exchange
them for any of the following outstanding bonds:
3-l/2# Bonds due November 15, 1980$
3-l/2# Bonds due February 15, 1990$
3-l/2# Bonds due November 15, 1998.
The exchanges will be made on the basis of par for par, as of September 15,
1961, with payments by the holders to the Treasury (or by the Treasury to the
holders) and with accrued interest to September 15, 1961, on the 3-l/_# Bonds,
to be paid by the investors, as indicated in paragraph No. 3, hereunder.
The offering provides an immediate increase in interest to investors who
accept a security of longer maturity. By making this conversion, holders will
obtain somewhat higher yields than could be obtained by purchasing any of the
affected issues in the market at current prices. Holders of the 1965-70 and
1966-71 bonds would otherwise have to reinvest their proceeds on maturity in
Treasury Bonds of equal maturity at rates of U»28 to U.36 percent, to equal
the terms of this offering. The exchange of old for new securities will not
be treated as a sale and purchase for tax purposes, thereby avoiding immediate
recording of book gains or losses on the securities being accepted by the
Treasury in exchange for the new issues.

D-219

- 2 -

Terms and Conditions of the Advance Refunding Offer

, To all holders owning $500, or more, of the following outstanding Treasury bonds

e.cription of bonds

Issue date

Final
maturity date

Remaining term
to final maturity
(Yrs. - Mos.)

!-l/2# bonds 1965-70 Feb. 1, 19^ March 15, 1970
!-l/2# bonds 1966-71
Dec 1, 1 9 ^
March 15, 1971
I. New bonds to be issued:

Amount
outstanding
(in billions)

2.9

(additional amounts of outstanding issues)

Description of bonds

Issue date

KL/2# bonds of Nov. 15, 1980 Oct. 3, I960
KL/2# bonds of Feb. 15, 1990 Feb. Ik, 1958
)-l/2# bonds of Nov. 15, 1998 Oct. 3, I960

Amount
outstanding
(in billions) Interest starts__/
$ .6
2.7
2.3

Sept. 15, 1961
Sept. 15, 1961
Sept. 15, 1961

Interest
payable

May 15 & Nov.l!
Feb.15 & Aug.r
May 15 & Nov.l!

J Interest on the bonds surrendered stops on September 15, 1961.
i. Terms of the exchange:

Ixchanges will be made on the basis of par for par, with payments by and to the Tr

ind with adjustments of accrued interest to September 15, 1961, on the 3-l/2# bon
.ssued, (per $100 face amount) as indicated below:

Bonds
to be
exchanged

Bonds
to be
issued

>U 1965-70 3H 1980
3ft. 1990
3§# !998
!_# 1966-71 3H 1980
-M 1990
3h 1998

Amount of purchase
price of 3^6 bonds
To be
To be
paid
collected
to
from
subscriber subscriber
$2.25
$1.00
2.00
3.50
.25
1.00

Accrued
interest
to be
paid by
subscriber

Net amount
To be
To be
collected
paid
from
to
subsubscriber
scriber

$1,170
0.295
1.170

$3.1*20

10-8
19 - 11
28 - 8

U.670
0.5U5

9 - 8
18 - 11
27-8

1.170
0.295
1.170

$0,705
O.83O

0.170

Extension
of
maturity
Yrs.-Mos.

Coupons dated September 15, 1961, on the 2^# bonds in bearer form should be detache
>y holders and cashed when due. Interest on the bonds in registered form will be paid by
toeck on September 15, 1961, by the Treasury in regular course to holders of record on
wgust 15, 196I.

- 3k* Limitation on amount of bonds to be issued:
The amount of the 3-l/2$ bonds to be issued under this offering will
be limited to the amount of the eligible 2-l/2$ bonds tendered in
exchange and accepted.
5. Books open for subscriptions for the 3-l/2$ bonds:
The books will be open for the receipt of subscriptions from AHj
classes of subscribers from Monday, September 11, through Friday,
September 15. In addition, the books will also be open for the receipt of subscriptions from individuals through Wednesday, September 20.
For this purpose, individuals are defined as natural persons in their
own right. Subscriptions placed in the mail by midnight of the respective closing dates, addressed to the Treasurer, U.S., Washington 25,D.C,
or any Federal Reserve Bank or Branch, will be considered as timely. The
use of registered mail is recommended for bondholders1 protection in submitting bonds to be exchanged. The new bonds will be delivered to subscribers on September 29, 1961.
6. Requirements applicable to subscriptions:
Subscriptions will be received at Federal Reserve Banks and Branches
and at the Office of the Treasurer of the United States, Washington 259
D. C. Banking institutions generally may submit subscriptions for
account of customers, provided the names of the customers are set forth
in such subscriptions.
7. Denominations and other characteristics of the 3-l/2$ bonds:
$500, $1,000, $5,000, $10,000, $100,000, and $1,000,000 in coupon and
registered forms. They will be acceptable to secure deposits of public
moneys •
8. Nonrecognition of gain or loss for Federal income tax purposes:
(a) Where the exchange is solely of the 2-1/2$ Bonds for the 3-1/2$
Bonds — the Secretary of the Treasury has declared pursuant to section 1037(a) of the Internal Revenue Code that no gain or loss shall
be recognized for Federal income tax purposes; however, section 1031(b)
of the Code requires recognition of any gain realized on the exchange
to the extent that money (other than interest) is received by the
bondholder in connection with the exchange as indicated in (b).
(b) Where the ft-l/2$ Bonds are offered by the Treasury with a payment
to the~investor — if the fair market value V of the 3-1/2$ Bonds
plus the amount paid to the investor (discount) exceeds the cost basis
of the 2-l/2$ Bonds to the investor, such gain (but not to exceed the
amount of the payment) must be recognized and accounted for as gain for
the taxable year of exchange. He will carry the 3-l/2$ Bonds on his

The mean of the bid and asked quotations on date subscriptions are
submitted.

books at the same amount as he is now carrying the 2-l/2$ Bonds
except that he will reduce the cost basis by the amount of the
payment and increase it by the amount of the gain recognized. If
the fair market value of the 3«l/2$ Bonds plus the amount of the
payment does not exceed the cost basis of the 2-1/2$ Bonds, the
basis in the 3-1/2$ Bonds will be the cost basis in the 2«l/2$
Bonds reduced by the amount of the payment.
(c) Where premium is paid by the subscriber — if a premium is
paid by the subscriber no gain or loss will be recognized; but his
tax basis in the 3-l/2$ Bonds will be his cost basis in the 2-1/2$
Bonds increased by the amount of the premium.
(d) Gain to the extent not recognized under (b) (or loss), if any,
upon the 2-l/2$ Bonds surrendered in exchange will be taken into
account upon the disposition or redemption of the 3~l/2$ Bonds.
9» Federal estate tax option on the 3-l/2$ Bonds — the 3-l/2$
Treasury Bonds of 19^0, 1990, and 1995 will be redeemable at par and
accrued interest prior to maturity for the purpose of using the proceeds in payment of Federal estate taxes but only if they are owned
by the decedent at the time of his death and thereupon constitute
part of his estate. Accordingly, estates of decedents to which the
similar option in the 2-1/2$ Treasury Bonds of 1965-70 and 1966-71
has accrued at the date of exchange cannot make the exchange, with
the expectation of using the proceeds of redemption of the 3~l/2$
Bonds prior to maturity in payment of estate taxes because such
3-1/2$ Bonds were not owned by the decedent at the time of his death.
10* Book value of new bonds to banking institutions — the Comptroller
of the Currency, Board of Governors of the Federal Reserve System, and
the Federal Deposit Insurance Corporation have indicated to the Treasury
that banks under their supervision may place the new bonds received in
exchange on their books
(a) at an amount not greater than the amount at which
the eligible bonds surrendered by them are carried on
their books plus the amount of premium, if any^ paid on
the new bonds; or
(b) at the amount at which the eligible bonds surrendered
are carried on their books, reduced by the amount of discount, if any, received by the subscriber and increased by
the amount of gain, if any, which will be recognized as indicated in paragraph 8 (b).
They will so advise their examiners.
11. Computation of reinvestment rate for the extension of maturity —
a holder of the outstanding eligible 2-1/2$ Bonds has the option of
accepting the Treasury's exchange offer or of holding the bonds to
. maturity* Consequently, he can compare the interest he will receive

-5 resulting from exchanging now with the interest that he might obtain
by reinvesting the proceeds of the 2-l/2$ Bonds at maturity.
The interest income before tax for making the extension now through
exchange will be the coupon rate on the new issue. If a holder of
the eligible 2-l/2$ Bonds does not make the exchange, he would receive
only the 2-l/2$ rate to their maturity and would have to reinvest at
that time at a rate equal to that indicated in section 12 below for
the remaining term of the issue now offered, in order to equal the
interest he would receive by accepting the exchange offer. For example,
if the 2-1/2$ Bonds of 1965-70 are exchanged for the 3-l/2$ Bonds of
1990, the rate for the entire twenty-eight years and five months will
be 3-1/2$. If the exchange is not made, a 2-l/2$ rate will be received
until March 15, 1970, requiring reinvestment of the proceeds of the
2-l/2»s at that time at a rate of at least ^.36$ for the remaining
nineteen years and eleven months, all at compound interest, to average
out to a 3-l/2$ rate for twenty-eight years and five months. This
minimum reinvestment rate for the extension period is shown in the
table under section 12. The minimum reinvestment rates for the other
issues included in the exchange are also shown in the table under
section 12.
12. Investment rates on the 3-1/2$ bonds offered in exchange, to holders;
of the eligible 2-1/2$ bonds:

2-1/2$ March 15, 1965-70

Eligible bonds

2-1/2$ March 15, 1966-71

3-1/2$
3-1/2$
3-1/2$
3-1/2$
Nov. 15, Feb. 15, Nov. 15, Nov. 15,
1990
1998
1980
1980

3-1/2$ 3-1/2$
Feb. 15, Nov. 15,
1998
1990

Payments on account of
$100 issue price:
$3.50

$2.25
$1.00

$0.25

$2.00

$1.00

Approximate investment yield
from exchange date (9/I5/6I)
to.maturity of 3-1/2$ bonds
based on priced of eligible
2-l/P^ hnnrt 1/ -

_.__,_-

-

1*.16*

il.23*

!w!9#

1;.15#

U.21#

U.19*

U.31

U.36

H.28

U.30

U.36

U.30

Approximate inlnimum reinvestment rate for the extension
Tierlnrl 2/
—

—

• ••' ••

_,
"

•

______________

1

_/ Yield to nontaxable holder or before tax. Based on mean of bid and ask prices
(adjusted for payments on account of issue price) at noon September 6, 1961.
_/ Rate for nontaxable holder or before tax. For explanation see paragraph 11 above.

*****

215

They zanders tend President Kennedy when lis says* "tiki* la #
partnership; there la work la it for all 0! us, and the United
States must surely do its full share."
The promise of Punta del Este is bright. The whole
Hemisphere stands on the threshold of a mm era of hope. Let us

r_s&eE_bexr that hope and promise fjtfi4 nos^here wnl### the rggpony
they engender is properly and honorably assumed ~» and by all

I ^_{&^^^^^u_i_______»fts/

u-~" - -_.J
oOo

21?

-15-

task forces on education, health,

m

^ W »

%r*jiS*^^W6

B^P"«fc«h»

" • M P * *

6m£*
efforts to support the Alliance

'7
to

wmmA^mm

the United States Congress authorised

&J

Ions-term

t^__ d^.lop.ent

and credits. Without such authority, we could not have
provided financial aid on the
democratic leaders of Latin

if they are to] plan taeir

national efforts with some logical assurance e£ eontiizuity in their

{£sf)i4 are well launched on our Alliance, mod already good

Our friends in Latin America are
the highest priority to the

that we have now givea
of our own

-14*
_~ _. .

that applications for emergency financial assistsace — especially
froa smaller coyntries -- are given full attention and ae*eeVi_p_m

Ma have informed the Inter-iaasfiean Bank that we will strongly
support ^m^Ltk^mmmmm^m9l self-help housing program[wfe**h the Bank's
s taff^yfM_BSSMBS0B_Efii^^^^ with as _«seh
l^«nwltilef i« st^mc. ready to render any assistance we can to
\

the Secretary-General of the Organisation of American States* the
- *s*
X

•

• ^

-'••

President of the Inter-Aiaerican Developetent Bank, and the Executive
Secretary of the United Nation's Economic Coomission for Latin
Axaarica in composing a list of experts to help participating
countries in evaluating and waking recciwendations on their long\
J*-

.

•

«

term development programs •
We also stand ready to work with the Secretary-General of the
Organisation of Americanfifurirfl[In reaching 4n ovuiaTT ~tfj^rtinrar»//

^ 7 *

these loans went to finance a steal. mill, electric
facilities, roads, land settlement, airport construction, housing,
farm credit, water supply systems, oil well equipment, trucks

.tractors,
a«4 i* an^ iron ore plant, television equipment, bottling
equipment, street sweepers, water purification equipment, locomotivai
and other tools of
Since our return from Punta del Iste, we have mmm* "
I jmrnm energetically to ensure test the Alliance will not lose
la are seeking additional personnel of the highest possible
qualifications to direct our participation in the Alliance.
He are instructing our missions in Latin America to work close!
with the governments to which they are accredited, .. f§gjt|j^i^
particularly in meeting emergency and short-term needs.
j
/

He ^ia5^eat»|liatea4 an inter-agency group in Washington to
•«ow_(».'_assw_iw__»'ti<wr-ii_.-..-. „*

•_____-.e©f>tlnulng high level attention to to. Alli-oa*.

the past six months, nearly every country in Latin America lias
undertaken programs to iraprove housing. Several are establishing
savings and loan associations or housing banks with the aid of
government funds.

UJ
the Alliance ^ x ^ then, moving forward in Latin America.
fcere, it is already a living thing.
X can assure you that we In Washington have likewise not been
idle. Between President Kennedy^ announcement of the Alliance cm
March 13 and the end of last month, the United States loaned sere
than seven hundred million dollars to Latin America. This is
exclusive of grants and technical assistance, and dees not include
credits to Brazil for more than five hundred million dollars from
t^a^sNp lxp©rt<_*f«irt Bank to refinance purchases made in the
United States. There were eighty-two separata loans to sixteen of
our nineteen fallow members of the Alliance.
These loans

22
coming decade.
But we cannot: do the job alone, the leaders of the hemisphere ag
fully aware of this. They know that wall over eighty percent of the
total resources for development must cone from within Latin America
Itself. |_ad they recognize that the heart of the Alliance is the
concept of help for self-help.
Even before the Charter was signed, self •help measures were well
under way. Reforms in tax and land laws — the most urgent areas for
Improvement — are moving dkM&& in a doaen countries. [^arttcnlarlysignificant progress In solving one or both of

^m^mw^^mrWa^^^^^9 Braail
Improved tax enforcement, which has
jLn^Argeotinay will he given furtheryimpetus at an Inter-American
conference on taxation next month in Buenos Aires.
Great progress is also being made in low cost housing. Within

-ii*

221
So our public mmmOJmmm^ to Latin Araerica before Punta del
P/Sm-Ssta* even with the very low Uweiopment Loan fund mwmm&i total* i
nine hundred and fifty millio__ dollars a year
When you add to this .
^ three hundred million dollars a year
in private investments by our citisens -- a conservative projection
of preaant trends ** yon already account for more than, sixty percent
of rTiffifx_li3«i^i MifWt ^Hh^^^mf1^^ >^its»*#e capital. IWk
"<!^_Sa,

paroiittyJ-y-the--way, is higher
contribute./ Xhe^aj-mmiag. i?oarty f«*ce__t in/ outside capital weuid
L^made up. by/ international financial agencies such as the World
r*m\Ji "Mt v < / ^ x -S--mt. -.4i' *.^< / £ . ^ ^
Bank, mmi^mm^both
puhiia loans and prlvsata. immmmz
/f

i

x$r

hi-

Western Europe and Japan.
Thus, it is clear that we as a J^ationsrfcan easily meat tha
pledge to supply "a major part11 of the tsiataxa of tmmty filiioa
dollars of outside assistance required by Latin America over the

Worn hundred million dollars a year from the Export-Import Bank.
•4:

This is a conservative estimate, substantially less than the Bank
loaned this year.
Two hundred and fifty million dollars m our annual contribution
to a long-range program of social development agreed to last

._*»**_. __. Imjl^mmm***
j*t*xg^ / / ^

_____ for t*. fir.* two

^A£yt^%«> y

One hundred and fifty million dollars from our Food for Peace
f
Frogram;, which has recently beesl^ccelerated.
five million dollars from the Development Loan Fund —
a very modest figure iiiiifWi^

"low'priority

'A
tout text* /America. this amount can be expected to increase sharply
from its present level ~- which is a mere fifteen percent of total
Development Loan Wmt4 lending.

prograa*^

223
technical assi3tance,/]OUtaide Latin

, but internal reforxs

as well — reforms that in many cases will involve profound
in attitudes and ways of life that are centuries old.
of the Alliance have promised to make

The Latin

reforms. We, it* turn, have promised support for their efforts.:;l?r:

At Punta del Este, we agreed
next tan years, mmqaiam at least

Latin America will, over Hie
billion dollars im both

public m& private help from outside sources if the goals of the
attare of these funds is expected

^

j U / / j ( ^ ^ £Xfc;-«^.' Xik^p^ ^<-'ft £A-*.fc
!
we will have difficulty in meeting this
/>:

We are already providing alxostra
billion dollars a

im aid to Latin America -- m reflection of the

high priority we are now giving to hemisphere
Here la a breakdown of aid that can be expected, baaed upon
our

•7*

2*4

control of inflation, a Consmon Market, and commodity stabilization
to prevent extreme price fluetniation/^ basic exports on which so

Second, to reform tax system which weigft too heavily on low and
middle income wage earners, while billions of dollars in revenue are
loat through tax evasion.
Third, to create a mora equitable distribution of land mek4 to
increase its productivity. At present, five pmc^mit of Latin American
seventy percent of all arable land, hut only a quarter
of it is under cultivation.
Fourth, to improve public health, housing and education, eon*
trolling disease and increasing life expentancy, developing low- cost
housing, eliminating adult illiteracy and assuring each child a
minimum of six years of schooling^ 10707] -'
to afchieve these goals will require not only
and technical

children. At Punta del Este, we welcomed the revolution of rising
expectations and we pledged to work with the democratic leaders of

the Hemisphere to transform it into a revolution of H_i__ag aatiafsat
That is what the Alliance for Progrees is all about. Its purpea

are /set jf orth [clearly in the Charter of Punta del Este, which lis
these major goals for a ten-year program of social and economic
progress:
First, to foster economic growth^ at a minimua annual rate/we
each oount-Ey/of two ma4 a half percent par parson. Allowing for
population expansion, this will require an overall growth rata of
at least five percent^in eaen-a^antry. During the last tan years,
enly three nations — Brazil, Mexico and Venesuela — have attained
this miniB_um goal. Achieving this objective throughout Latin
America will involve industrialisation with the aid of both public
r''_a|* 5 x

and private resources, diversification of ox-e^oseaedlty economies,
control

-5-

«?<?0

IMtL /Wt/_
In Latin America, the average annual individual

\M$mm-

year -- dropping to as low as #4#ty

&

/va«V^

in
-lv»-»-"VtJU

In Latin America, nearly half the adult population cannot read
or write.
In latin 4mmtimm9lbxm%mx and. disease are conancr*.' ^hronic hunger
imperils the health &®& shortens the
aa, Maa&tmmmimmmmimm^
e_jusae_iOoxw. ^^^mm^m^^Attmmty

percent of the children die before

they reach the age of four.
72 0
Such conditions! have bred apathy and despair for mm
me long
long in
Latin Aaarica. But today, the Latin peoples are ©aught up in the
revolution of rising expectations. They are demanding the fruits
of modern knowledge md

technology for themselves and for their
children

22?
to satisfy the basic needs of the American people far homes, work
and land, health and schools."

*V**SJ&.«A IO J*

tfl* at <*jfc^

The conference. last month at Fmtta del Este, Uruguay, where 1
had the privilege of heading the United States Malagation, was
called to 4#ffn# the #lify of the Alliance and to begin the tremendous
task of achieving them in the years ahead. *;." - ir, . *fcv-« >
my initiating and helping to forge the Alliance, the United
States tea become a full partner in a grant enterprise} # a relentless
war on poverty, disease, ignorance, and despair. « C\\&

- * uia '= ***

In this war, the only war we seek, all the American governments save one —.declared themselves allies against the common foes of
economic underdevelopment and social injustice. * e*vight • ;
ftaa* ewe problems are both formidable ami widespread. Although
many of you are familiar with latin America, let me recall a few
facta to emphasize the enormity of the task ahead:

eHiMrx*
In Latin America,

228
-3j >**
S'l->J'- /t**t I •?••**&! Af * •'<-*'ye*<y
Nevertheless,/we failed to make the extra effort required to meetj}

/i^the crying needs of our 200 million Latin American neighbors/ -j^a,
t$r>j\ "sA*>f& ; /
Ameri can policy began to change after the Buenos Aires Economic
Conference.of 1957, which clearly reflected rising discontent

J

the Latin American peoples. That year, the United States brokeNits

supported the formation of a Latin American producers 1 group to
mmd** &•$*> (U,^ **^&.*.t.M.. /e>t^ae^*»
bolster the world market price of coffee. In 1958 we announced our

7

willingness to join in establishing the Inter-American Development \
Bank, which begun operations^ October Jfi®mw* lM*®% ytxw7Jit Bogota,
we agreed to establish a $i^ bxm&CGd million deeper Fund for Social *
Progress through self-help measures, to be administered in large past
by the newly-established Inter-American Bank. Finally, with the announcement by President Kennedy on March 13 of the Alliance for
Progress, we invited Latin American participation in a "vast cooperative effort, unparalleled in magnitude and nobility of purpose ,
to satisfy

229

•a*
Thus, in the Preas&Ie to tit* historic Charter of funta del
lata, the United States and 19 of the 20 other American states sat
forth the goals of the Alliance for Progress.
Haat Alliance opens a new era in our relations with Latin
Since World tar IX, we 1mm been preoccupied with the
problems of other areas — first Europe, then Asia^* then Africa. We
ware deaf to Latin Americana when they asked for help with their
*_» ^^

serious commodity problems, when they wanted us to join with than
in creating 9m inter-American Bank^when they sought adequate public
rt.

capital for needed housing, education, sanitation, and
m> '• '•:•-••: •-.

reform. We warn 9mmmm4 mi neglecting Latin
m problems in other parte of the world*

>/£

This

tion, unfortunately, was justified. The urgent nmmd to help reconstruct Europe after the war could not^be ignored. Heither could
the needs of the newly-emerging nations of Asia and Africa.

*#* MC^JU

:

Af4ou dU64«~p
ADDRESS OF THE HONORABLE DO0GLA3 DII_LC«
SECRETARY OF THE TREASURY
BEFORI Til U)S AilGELES WORLD AFFAIRS COUKCIL
BILTMO^S HOTEL, LOS AKCELES, CALIFORNIA
U f 1961, 12:30 p«N,

I will begin by reading from a revoluti«_axy document. It is
. , . . • •

*ftv

a statement of hope^a statement of determination^ and it
•-.••-•

& U

to m a challenge without parallel is our history. 1 quote:
• #yp

t

«_u

for the
batter liila which today* s ekiiie have placed within their grasp
are determined far themselves and their children to
siore abundant lives, tc
far all, to end those conditions which benefit the few
-

•

iisM,

.

-

tank to fulfill these just desires — to demonstrate
to the poor ami forsaken of our countries, and of all lands,
the creative powers of free men hold the key to their progress and
to the progress of future generations."

6- 43-0

*— <-

TREASURY DEPARTMENT
Washington

^-L

September ll,196l
FOR RELEASE: UPON DELIVERY
ADDRESS OP THE HONORABLE DOUGLAS DILLON
SECRETARY OP THE TREASURY
BEFORE THE LOS ANGELES WORLD AFFAIRS COUNCIL
BILTMORE HOTEL, LOS ANGELES, CALIFORNIA
SEPTEMBER 11, 196l, 12:30 PM, PDT, (3:30 PM, EDT)

I will begin by reading from a revolutionary document. It is
a statement of hope — a statement of determination — and It presents
to us a challenge without parallel in our history. I quote:
"The men and women of our Hemisphere are reaching for the
better life which today*s skills have placed within their grasp.
They are determined for themselves and their children to have decent
and ever more abundant lives, to gain access to knowledge and equal
opportunity for all, to end those conditions which benefit the few
at the expense of the needs and dignity of the many. It is our
inescapable task to fulfill these just desires — to demonstrate to
the poor and forsaken of our countries, and of all lands, that the
creative powers of free men hold the key to their progress and to
the progress of future generations."
Thus, in the Preamble to the historic Charter of Punta del Este,
the United States and 19 of the 20 other American states set forth
the goals of the Alliance for Progress.
That Alliance marks a new era in our relations with Latin
America. Since World War II, we have been preoccupied with the
problems of other areas — first Europe — then Asia — then Africa.
We were deaf to Latin Americans when they asked for help with their
serious commodity problems — when they wanted us to join with them
in creating an Inter-American Bank — when they sought adequate
public capital for needed housing, education, sanitation, and
agricultural reform. We were accused of neglecting Latin America
because we were concentrating on problems in other parts of the
world. This accusation, unfortunately, was justified. The urgent need
to help reconstruct Europe after the war could not have been ignored.
Neither could the needs of the newly-emerging nations of Asia and
Africa. Nevertheless, until recent years, our response to the
crying needs of our 200 million Latin American neighbors was clearly
D-220
inadequate.

- 2 Our policy began to change shortley after the Buenos Aires Economic
.nference in the summer of 1957* which clearly reflected the rising
iscontent of the Latin American peoples. Later that year, the United
bates broke its strong tradition of antagonism to international
ommodity agreements and supported the formation of a Latin American
roducers1 group to bolster the world market price of coffee. In
95% once again reversing our previous policy, we announced our
illingness to join in establishing the Inter-American Development
ank, which began operations last October. Just a year ago at Bogota,
e agreed to establish a five hundred million dollar Fund for Social
rogress through self-help measures, to be administered in large part
y the newly-established Inter-American Bank. Finally, with the
nnouncement by President Kennedy on March 13 of the Alliance for
rogress, we invited Latin American participation in a "vast
ooperative effort, unparalleled in magnitude and nobility of purpose
o satisfy the basic needs of the American people for homes, work and
and, health and schools."
The conference last month at Punta del Este, Uruguay, where I
lad the privilege of heading the United States Delegation, was
ailed to define the aims of the Alliance and to begin the tremendous
ask of achieving them in the years ahead.
By initiating and helping to forge the Alliance, the United
States has become a full partner in a great enterprise: a relentless
far on poverty, disease, ignorance, and despair.
In this war, the only war we seek, all the American governments,
lave one — the Soviet Satellite Regime of Fidel Castro — have
eclared themselves allies against the common foes of economic
inderdevelopment
and social
These twin problems
are injustice,.
both formidable and widespread. Although
lany of you are familiar with Latin America, let me recall a few
acts to emphasize the enormity of the task ahead:
In Latin America, the average annual individual income is well
mder three hundred dollars a year — dropping to as low as fifty in
tome areas.
In Latin America, nearly half the adult population cannot read
•r write.
In Latin America, there are areas where chronic hunger Imperils
;
he health and shortens the lives of millions, and as many as twenty
Went of the children die before they reach the age of four.
Such conditions have bred apathy and despair for too long in
at in America. But today, the Latin peoples are caught up in the
evolution of rising expectations. They are demanding the fruits
£ modern knowledge and technology for themselves and for their
Wldren, At Punta del Este, we welcomed the revolution of rising
xpectations and we pledged to work with the democratic leaders of
he Hemisphere to transform it into a revolution of rising satisfactions.

2^o
_. ^ _.

^*

That is what the Alliance for Progress is all about. Its purposes
are clearly set forth in the Charter of Punta del Este, which lists
these major goals for a ten-year program of social and economic
progress:
First, to foster economic growth In each country at a minimum.
annual rate of two and a half percent per person. Allowing for
population expansion, this will require an over-all growth rate of
at least five percent. During the last ten years, only
three nations — Brazil, Mexico and Venezuela — have attained
this minimum goal. Achieving this objective throughout Latin
America will involve industrialization with the aid of both public
and private resources, diversification of one-commodity economies,
control of inflation, a Common Market, and commodity stabilization
to prevent extreme price fluctuations of the basic exports on which
so many Latin American countries depend.
Second, to reform tax systems which weigh too heavily on low and
middle income wage earners, while billions of dollars in revenue are
lost through tax evasion.
Third, to create a more equitable distribution of land and to
increase its productivity. At present, five percent of Latin American
landowners hold seventy percent of all arable land, but only a quarter
of it is under cultivation.
Fourth, to improve public health, housing and education,
controlling disease and increasing life expectancy, developing low cost
housing, eliminating adult illiteracy__and_ assuring each child a
minimum of six years of schooling.
To achieve these goals will require not only money and technical
assistance from outside Latin America, but internal reforms as
well — reforms that in many cases will involve profound changes
in attitudes and ways of life that are centuries old.
The Latin American members of the Alliance have promised to make
needed reforms. We, in turn, have promised support for their efforts.
At Punta del Este, we agreed that Latin America will, over the
next ten years, require at least twenty billion dollars in both
public and private help from outside sources if the goals of the
Alliance are to be achieved. A major share of these funds is expected
to come from the United States.
Some of our fellow citizens have said that we will have difficulty
in meeting this commitment. They are mistaken for we are already
providing from public funds almost a billion dollars a year in aid to
Latin America — a reflection of the high priority we are now giving to
hemisphere development.
Here is a breakdown of aid that can be expected, based upon
our present pattern:

_. Ii _>

0^ *
£„ \j "V

Four hundred million dollars a year from the Export-Import Bank.
This is a conservative estimate, substantially less than the Bank
loaned this year.
Two hundred and fifty million dollars as our annual contribution
to a long-range program of social development agreed to last summer at
Bogota. The Congress last spring appropriated funds for the first two
years of this program.
One hundred and fifty million dollars from our Food for Peace
Program, which has recently been accelerated.
Seventy five million dollars from our technical assistance
program.
Another seventy-five million dollars from the Development Loan
Fund — a very modest figure which still reflects our former policy
of low priority for Latin America. This amount can be expected
to increase sharply from its present level — which is a mere fifteen
percent of total Development Loan Fund lending.
So our public commitment to Latin America before Punta del Este,
even with the very low Development Loan Fund figure, totalled
nine hundred and fifty million dollars a year.
When you add to this, three hundred million dollars a year
in private investments by our citizens — a conservative projection
of present trends — you already account for more than sixty percent
of the minimal Latin American need for foreign capital. The
rest of the needed outside capital will come from international
financing agencies such as the World Bank, and the Inter-American
Bank, and from both public loans and private investment by
Western Europe and Japan.
Thus, it is clear that we as a Nation can easily meet the
pledge to supply "a major part" of the minimum of twenty billion
dollars of outside assistance required by Latin America over the
coming decade.
But we cannot do the job alone. The leaders of the
are fully aware of this. They know that well over
the total resources for development must come from
America itself. And they recognize that the heart
is the concept of help for self-help.

Hemisphere
eighty percent of
within Latin
of the Alliance

Even before the Charter was signed, self-help measures were well
under way. Reforms in tax and land laws — the most urgent areas
for improvement — are moving ahead in a dozen countries.

-5Improved tax enforcement, which has recently helped Argentina to
double its tax receipts, will be given further impetus at an InterAmerican conference on taxation next month in Buenos Aires. .
Great progress is also being made in low cost housing. Within
the past six months, nearly every country in Latin America has
undertaken programs to improve housing. Several are establishing
savings and loan associations or housing banks with the aid of
government funds.
The Alliance, then is moving forward in Latin America. There,
it is already a living thing.
I can assure you that we in Washington have likewise not been
idle. Between President Kennedy's announcement of the Alliance on
March 13 and the end of last month, the United States loaned more
than seven hundred million dollars to Latin America. This is
exclusive of grants and technical assistance, and does not include
credits to Brazil for more than five hundred million dollars from
the Export-Import Bank to refinance purchases made In the
United States. There were eighty-two separate loans to sixteen
of our nineteen fellow members of the Alliance.
These loans went to finance a steel mill, electric power
facilities, roads, land settlement, airport construction, housing,
farm credit, water supply systems, oil well equipment, trucks,
tractors, an iron ore plant, television equipment, bottling
equipment, street sweepers, water purification equipment, locomotives,
and other tools of development.
Since our return from Punta del Este, we have been moving
energetically to ensure that the Alliance will not lose momentum:
We are seeking additional personnel of the highest possible
qualifications to direct our participation in the Alliance.
We are instructing our missions in Latin America to work closely
with the governments to which they are accredited, particularly in
meeting emergency and short-term needs.
We have informed the Inter-American Bank that we will strongly
support the hundred million dollar self-help housing program
now being considered by the Bank's staff.
Meanwhile, we are working with the Secretary-General of the
Organization of American States on the financing of task forces
on education, health, land reform, and other self-help measures
essential to the success of the Alliance.

- 6Our efforts to support the Alliance were recently given
sreat impetus when the United States Congress authorized
President Kennedy to make long-term commitments for development
Loans and credits. Without such authority, we could not have
provided financial aid'on the long-term basis needed by
iemocratic leaders of Latin America so that they may plan their own
national efforts with some logical assurance of continuity in
bheir programming.
We we are well launched on our Alliance, and already good
progress has been made.
Our friends in Latin America are aware that we have now given
the highest priority to the development of our own Hemisphere.
They understand President Kennedy when he says, "this is a
partnership; there is work in it for all of us, and the United
States must surely do its full share."
The promise of Punta del Este is bright. The whole Hemisphere
stands on the threshold of a new era of hope. Let us remember that
hope and promise lead nowhere unless the responsibility they
engender Is properly and honorably assumed — and by all concerned.

0O0

9/1/61

U.S.-PORTUGAL INCOME TAX CONVENTION
TO BE DISCUSSED

/ Representatives of the Treasury Department and the State
Department expect to hold discussions later in the year with
representatives of the Government of Portugal to consider
an income tax convention for the elimination of double taxation.
_&-£•»•» a-rticlpa%e-H-_iet phe convention witt-be similar in scope
to that of most of the other twenty-one U.S. income tax conventions
now in effect.
/ Interested persons in the united States who desire to
submit comments or suggestions with respect to such a tax
treaty are invited to submit their views. Communications
should be addressed to the Assistant Secretary of the Treasury,
Mr. Stanley S. Surrey, Treasury Department, Washington 25, D. C.
/ To Bcaciltc ^O^pmxm^^mmm^mt^^^com^nts and suggestions
*•

• _!__-i_m«_i______sy-

Wft___8t£_J_g__i_«i!«2>

should be submitted as promptly as possible but not later
than October 15, 196l.

TREASURY DEPARTMENT
__________

________

fc_

??o
\J w

WASHINGTON, D.C.
September 11, 1961
FOR IMMEDIATE RELEASE
U.S.-PORTUGAL INCOME TAX CONVENTION
TO BE DISCUSSED
Representatives of the Treasury Department and the State
Department expect to hold discussions later in the year with
representatives of the Government of Portugal to consider an
income tax convention for the elimination of double taxation.
The convention is expected to be similar In scope to
that of most of the other twenty-one U.S. income tax
conventions now in effect.
Interested persons in the United States who desire to
submit comments or suggestions with respect to such a tax
treaty are invited to submit their views.

Communications

should be addressed to the Assistant Secretary of the Treasury,
Mr. Stanley S. Surrey, Treasury Department, Washington 25, D.C.
Comments and suggestions should be submitted as promptly
as possible but not later than October 15. 196l.

0O0

D-221

<3Q

r-eptsaber 11, 1961
tm mmkm

a. »• m * m ? K ? s }

Tuesday p .Seeteatber 1?, 3561.
tt&:l_TS Of TKE-88ftr«S WBULY B U I OFriSl^
the Treasuryft_pertaenianra_uaeed last evening that the traders for two series of
Treasury bills, om series to be an additional issue of the bills dated Jens 15, l?6l,
and the ©the? series to be dated fepteaber lli, 1961, wfeich were offered on fepteaber 4,
were opened at the Federal Be§*_*vs Banks en ftepteaber 11. tensers were invited for
%XG0,G00,0G0, or thereabouts, of ?l«d«v bills and for f6oof000,000, or thereabouts,
of IBS-any bills. Hie details of the two series are as follows?
102-day Treasury bills
i M l Of ACCST-Ti;;
91-day Treasury bills
maturing ?ece»ber .lit, 1961
•staring f*arefa 15, 1_;62
hp^rox* Lquiv*
Approx. Iqtii?,
Annual Rste
Price
Animal
Eate
l
Fries
!ifh
lei
Average

99.kn y
95.W
5_».U*'

2.302$
2,31*2$
2.328£ 1/

*e.&_a

fS.636
Q8.6I4J

—j__66«T
2.698$
2.63SJI

*/ Excepting one tender of i75,uOG
38 percent of tfee asioant of 9i«day bills bid for at the lew price was accepted
8f p#re#nt of the ascent of lej£~c*y bills bid for at the low prise was accepted

TOTAL fiit'ERS APPLIEf FOB ASf ACCEPT., r BT m-E.BAl R£i_F\"is CISTEICrs?
Applied For
Accepted
district
Applied For
Accepted
Tr
2,871^,000
I
i,au,ooo
Boston '
1,553,773,000
?H4,8o3,000
•X5,701,000 S&$,i*59,000
Hew York
38,7^6,000
lli,S8l,0Q0
2,580,000
7,971,000
f»hU*del$*.la
18,6LI8,00Q
3S,?£6f0Q0
28,323,000
13,809,000
Cleveland
3,757,000
l6,S*lt,#000
iiit5iiifooo
3,757,000
ftlehteeud
3,Wi6»000
2lif8QOtO00
19,201,000
14,186,000
3a,y**,00G
Atlanta
teM32,000
170,317,000
78,^99,000
3,©n,ooo
Chicago
25,21*0,000
16,102,000
*i,7i*6,000
3,126,000
ft, Louis
2lj,5l7,OQO
1^,517,000
5,6^6,000
6,??3,O00
hi$6kQ$om
Minneapolis
314,310,000
6,876,000
31,^81,000
3,261,000
25,899,000
tt
13,083,000
12,783,000 ,
Kansas City
3,361,000
11,100,^,000
y
9.571,000
ti.MRWjttd
WA
9&r9&y
Bellas
._«JMZM§£
._:J!-0 $31,000 soiseospetitiv* tenders accepted at the average price of °f .lilt
bf 2en
Includes
Francisco
?2,136,051,00Q
St,
"%0Q0 noncompetitive
3/ iblades 11*9,l__,
.—.,_.__.,-.,_ tenders
—_.___ accepted
„_- the
_M_ average
_.__.__„,,_• pries
_, ,of
__, 98.61*3
Jr_,_, at
On a coupon ifsme of the same length and for -the am* amount invested, the return on
these M i l © vould provide yields of 2.37S&, for the 1-day bills, and 2.76$, for the
l62«day bills. Interest rates on bills are quoted in terns of baa* discount witthe return related to the face ftftmsnt of the billg ;:-ayaDie at statu rlty rather than
tli®ftflt^untinvested and their length in actual rnsiber of days related to a 360-day
year. In contrast, yields on certificates, antes, and bonds are cor.^uted in tarsi
of interest on the asmunt iBtestec, and relate the mtnber of days re-aining in an
Interest pajment period to the actual nueber of days in the period, with sesiasnutl
costpeuadin? if pore than on© coupon period is involved.
I I

TREASURY DEPARTMENT

^u

WASHINGTON, D.C.
September 11, 1961
FOR RELEASE A . M . NEWSPAPERS,
Tuesday, September 12, 196l.
RESULTS OF TREASURY'S WEEKLY BILL OFFERING
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 June 15, 1961,
and the other series to be dated September li*, 196l, which were offered on September 6,
were opened at the Federal Reserve Banks on September 11. Tenders were invited for
$1,100,000,000, or thereabouts, of 91-day bills and for $600,000,000, or thereabouts,
of 182-day bills. The details of the two series are as follows:
RANGE OF ACCEPTED 91-day Treasury bills t 182-day Treasury bills
COMPETITIVE BIDS?
maturing December lit, 196l
maturing March 15, 1962
Approx. Equiv
Approx. Equiv.
Price
Annual Rate
Price
Annual Rate
High
99.U.8 a/
" 2.302*.
9B.65U
—tt6T%
Low
99.1*08 "
2.31*2*.
t
98.636
2.698*
Average
99.1*12
2.328* l/
t
98.61*3
2.685*
a/ Excepting one tender of $75,000
38 percent of the amount of 91-day bills bid for at the low price was accepted
89 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 s Applied For Accepted
Boston
$
32,579,000
$
22,701;, 000
s $
2,8714,000 $ 1,811,000
New York
1,553,773,000
7li*,893,000
.
909,701,000
505,1*59,000
Philadelphia
38,71*6,000
ll*,581,000
.
7,971,000
2,580,000
Cleveland
35,996,000
28,323,000
:
18,809,000
l8,6U8,000
Richmond
l6,5ll*,0°0
lit,5lii,000
s
3,757,000
3,757,000
Atlanta
2^,800,000
19,iai,000
:
1,186,000
3,1*1*6,000
Chicago
2l*i*,i*32,000
170,317,000
s
78,599,000
38,1419,000
St. Louis
25,21*0,000
18,102,000
.
k,71*6,000
3,691,000
Minneapolis
2l*,5l7,000
19,517,000
t
5,626,000
3,126,000
Kansas City
1*7,61*0,000
3l*,310,000
s
6,878,000
6,723,000
Dallas
13,083,000
12,783,000
t
3,361,000
3,261,000
San Francisco
78,771,000
31,1*81,000
t
28,899,000
9,571,000
$2,136,091,000
$1,100,936,000 b/
$1,075,1*07,000 $600,522,000 c/
b/ Includes $21*8,531,000 noncompetitive tenders accepted at the average price of
c/ Includes $1*9,808,000 noncompetitive tenders accepted at the average price of 98.61*3
1/ On a coupon issue of the same length and for the same amount invested, the return on
these bills would provide yields of 2.37*, for the 91-day bills, and 2.76*, for the
182-day bills. Interest rates on bills are quoted in terms of bank discount wi\h
the return related to the face amount of the bills payable at maturity rather than
the amount invested and their length in actual number of days related to a 360-day
year. In contrast, yields on certificates, notes, and bonds are computed in terms
of interest on the amount invested, and relate the number of days remaining in an

__$^_3S3_y_oK1^^
D-222

the period with semia ua

™ i

-B3_€l-SQBaDBg
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,

loss from the sale or other disposition of Treasury bills does not have any sp

treatment, as such, under the Internal Revenue Code of 1954. The bills are sub
to estate, inheritance, gift or other excise taxes, whether Federal or State,

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

thereof by any State, or any of the possessions of the United States, or by an

local taxing authority. For purposes of taxation the amount of discount at whi

Treasury bills are originally sold "by the United States is considered to be i

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

of discount at which hills issued hereunder are sold is not considered to accr

such bills are sold, redeemed or otherwise disposed of, and such bills are exc

from consideration as capital assets. Accordingly, the owner of Treasury bills

(other than life insurance companies) issued hereunder need include in his inc
tax return only the difference between the price paid for such bills, whether

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 retu
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 o
the circular may be obtained from any Federal Reserve Bank or Branch.

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 investme

securities. Tenders from others must be accompanied by payment of 2 percent of th
face amount of Treasury bills applied for, unless the tenders are accompanied by
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
Daylight Saving
of this issue, until after one-thirty o'clock p.m., Easterr/S5^__^£M time, Wednesday
September 20, 1961
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 $1*00,000 or less without stated

page
price from any one bidder will be accepted in full at the average price (in three

decimals) of accepted competitive bids. Payment of accepted tenders at the prices

offered must be made or completed at the Federal Reserve Bank in cash or other im
diately available funds on September 27, 1961 , provided, however, any qualified
(HH)_
depositary will be permitted to make payment by credit in its Treasury tax and loan
account for Treasury bills allotted to it for itself and its customers up to any

amount for which it shall be qualified in excess of existing deposits when so not
fied by the Federal Reserve Bank of its District.

243

KKSWXU3M.
TREASURY DEPARTMENT
Washington
FOR IMMEDIATE RELEASE

September 12, 1961

x_Hmm__a____g^^
TREASURY ANNOUNCES AUCTION OF TAX ANTICIPATION BILLS
The Treasury Department, by this public notice, invites tenders for
$2,500,000,000 , or thereabouts, of

m_—

268 -day Treasury bills, to be issued on a

"W

discount basis under competitive and noncompetitive bidding as hereinafter provided,
The bills of this series will be designated Tax Anticipation Series, they will be
dated

September 27. 1961 , and they will mature

June 22. 1962

They will

be accepted at face value in payment of income and profits taxes due on

June 15. '•¥

—M
1962
, and to the extent they are not presented for this purpose the face
amount of these bills will be payable without interest at maturity. Taxpayers desiring to apply these bills in payment of
June 15, 1962
, income and profits

dr
taxes have the privilege of surrendering them to any Federal Reserve Bank or Branch
or to the Office of the Treasurer of the United States, Washington, not more than
fifteen days before

June 15. 1962

, and receiving receipts therefor showing

P_j_
the face amount of the bills so surrendered.
lieu of the bills on or before

These receipts may be submitted in

June lgf 1962

, to the District Director of

Internal Revenue for the District in which such taxes are payable. The bills will
be issued in bearer form only, and in denominations of $1,000, $5,000, $10,000,
$100,000, $500,000 and $1,000,000 (maturity value).
Tenders will be received at Federal Reserve Banks and Branches up to the closini
Daylight Saving
hour, one-thirty o'clock p.m., Eastern/SXM5_SXI time, Wednesday, Sftpt«mher 20. 1961
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. _., 99.925. Fractions may not be used.

It is urged that tenders be made

TREASURY DEPARTMENT
-»•-'- '..r.' .;•,•>••_' ._:„_-.;" 11..» u ••• _--!.> .i-jn U » - M - I U « W I U I W » ' " "••" iii»~i"H'i.Mim—aw M I MI

•___•__.

WASHINGTON. D.C.
September 12, 1961
FOR IMMEDIATE RELEASE
TREASURY ANNOUNCES AUCTION OP TAX ANTICIPATION BILLS

The Treasury Department, by this public notice, invites tenders
for $2,500,000,000, or thereabouts, of 268-day Treasury bills, to be
issued on a discount basis under competitive and noncompetitive
bidding as hereinafter provided* The bills of this series will be
designated Tax Anticipation Series, they will be dated
September 27.19^1, and they will mature June 22, 1962.
They will be accepted at face value in payment of income and
profits taxes due on June 15, 1962,
and to the extent they
are not presented for this purpose the face amount of these bills
will be payable without interest at maturity. Taxpayers desiring
to apply these bills in payment of June 15. 1962,
income
and profits taxes have the privilege of surrendering them to any
Federal Reserve Bank or Branch or to the Office of the Treasurer
of the United States, Washington, not more than fifteen days before
June 15, 1962,
and receiving receipts therefor showing the
face amount of the bills so surrendered. These receipts may be
submitted in lieu of the bills on or before June 15, 1962,
to the District Director of Internal Revenue for the District in
which such taxes are payable. The bills will be issued in bearer
form only, and in denominations of $1,000, $5,000, $10,000,
$100,000, $500,000 and $1,000,000 (maturity value).
Tenders will be received at Federal Reserve Banks and Branches
up to the closing hour, one-thirty o'clock p.m., Eastern Daylight Saving
time, Wednesday, September 20, 1961.
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
D-223
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

- 2 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 Daylight Saving time, Wednesday, September 20,1961
Immediately after the closing hour, tenders will be opened at
the Federal Reserve Banks and Branches, following which public
announcement will be made by the Treasury Department of the amount and
price range of accepted bids. Those submitting tenders will be advised
of the acceptance or rejection thereof. The Secretary of the Treasury
expressly reserves the right to accept or reject any or all tenders,
in whole or In part, and his action in any such respect shall be
final. Subject to these reservations, noncompetitive tenders for
$400,000 or less without stated price from any one bidder will be
accepted in full at the average price (in three decimals) of accepted
competitive bids. Payment of accepted tenders at the prices offered
must be made or completed at the Federal Reserve Bank in cash or
other immediately available funds on September 27, 1961, provided,
however, any qualified depositary will be permitted to make
payment by credit in its Treasury tax and loan account for Treasury
bills allotted to it for itself and its customers up to to any
amount for which It shall be qualified in excess of existing deposits
when so notified by the Federal Reserve Bank of its District.
The income derived from Treasury bills, whether interest or gain
from the sale or other disposition of the bills, does not have any
exemption, as such, and loss from the sale or other disposition of
Treasury bills does not have any special treatment, as such, under the
Internal Revenue Code of 1954. The bills are subject to estate,
inheritance, gift or other excise taxes, whether Federal or State,
but are exempt from all taxation now or hereafter imposed on the
principal or interest thereof by any State, or any of the possessions
of the United States, or by any local taxing authority. For
purposes of taxation the amount of discount at which Treasury bills
are originally sold by the United States is considered to be interest.
Under Sections 454 (b) and 1221 (5) of the Internal Revenue Code of
1954 the amount of discount at which bills issued hereunder are sold
Is not considered to accrue until such bills are sold, redeemed or
otherwise disposed of, and such bills are excluded from consideration
as capital assets. Accordingly, the owner of Treasury bills (other
than life insurance companies) issued hereunder need include in his
Income tax return only the difference between the price paid for such
bills, whether on original Issue or on subsequent purchase, and the
amount actually received either upon sale or redemption at maturity
during the taxable year for which the return is made, as ordinary
Treasury
prescribe
of
gain
Reserve
their
or Bank
loss.
Department
issue.
theor
terms
Branch.
Copies
of
Circular
the
of Treasury
the No.
circular
4l8,
bills
may
Revised,
and
be"obtained
govern
and the
this
from
conditions
notice,
any Veaoi

O) A f~

-6 the desirability of the Boggs bill. However, if the Committee feels
that the relief proposed is necessary or desirable under all the
circumstances and if it can be established to the satisfaction of
this Committee that the du Pont contentions axe substantially correct
as to market impact and as to the similarity of revenue return to
the United States under either present law or the Boggs bill, the
Secretary of the Treasury has authorized me to say that he would have
no objection to its passage. In so stating, we are aware that the
Boggs bill is designed not as a private relief bill but to apply to
divestitures generally. In this connection, the discretion left to
the court under the terms of the bill would seem to us to provide a
safeguard against windfalls to future taxpayers affected by antitrust
divestitures* If in the future a situation should arise which would
belie this assumption, we assume that the Congress will take appropriate legislative action to protect the interest of the United States
in the light of the facts pertaining in such case, and, indeed, we
shall so recommend.

assets in question,* and to shift the tax burden from the du Pont
Company to the shareholders who acquired their shares prior to 19^9
when du Pont stock last sold at a price below the current market
price of the General Motors shares to be distributed. In this connection, I should point out that du Pont very recently filed in the
antitrust suit in the Chicago Court, a proposed final judgment which
would permit du Pont to divest itself of General Motors stock "by
distribution to its stockholders or by such other means as it may
select...•••" If du Pont prevails, Christiana would not be legally
bound to redistribute any General Motors stock it receives and its
failure to do so would reduce the taxes payable by roughly $136 million.
Despite these considerations, however, it must be conceded that if the
du Pont assumptions may be taken as factual, the revenue payable to
the United States as a practical matter will be approximately the same
whichever tax law is made applicable to the divestiture. If the Committee is satisfied that this practical result will in fact obtain,
this would remove a principal concern which the Secretary of the
Treasury had at the time our report was prepared.
Also, at the time of preparing our report, we had no independently-derived source of information which would tend to support the
du Pont contentions with regard to the impact on the market of
divestiture under present law. Since that time we have received
advice from the Securities and Exchange Cc__mission which would lend
some support to the claim that divestiture under existing Internal
Revenue laws could have an adverse impact on the market. However,
the Securities and Exchange Commission was careful to point out that
there were many factors bearing upon this question which cannot be
presently evaluated, such as the general trend of the market over
the period of divestiture, the opportunities open to du Pont to minimize the impact, etc. Accordingly, they cautioned that reliance on
any such estimate might prove extremely hazardous.
The difficulties in arriving at reliable tax revenue estimates
and in forecasting the impact of divestiture under present law led
the Treasury Department to take a neutral position with regard to
*

E.g., du Pont shareholders will be able to obtain at reduced
capital gains rates full control of the General Motors shares and
may thereafter obtain tax free the proceeds of any sales of such
stock. Following the du Bont plan under present law would leave
the proceeds after taxes from such a sale in the du Pont Company,
and if distributed, such proceeds would be subject to ordinary
income taxes on the shareholders.

0 4"»

-4 Taking as fact the assumptions which the Company has presented
to us, we have no particular quarrel with their estimates.* Under
these plans, the additional revenue payable under the present tax
law would be paid to the United States over a period of 10 years on
the assumption that the court in the du Pont antitrust case would
permit divestiture to take place over that period.
The du Pont officials have indicated that if the Boggs bill is
passed, du Pont would in all probability abandon the 4-part plan and
would distribute the bulk of its 63 million shares of General Motors
stock to its stockholders, in addition to rather than in lieu of
normal cash dividends. They have estimated that such a distribution
under the Boggs bill would result in the payment of Federal taxes in
the amount of roughly $350 million** of additional revenue resulting
from the divestiture. This sum would be payable over a shorter
period of time if the court adheres to the admonition contained in
section 1 of the bill with regard to limiting the period of divestiture. Indeed, Assistant Attorney General Oberdorfer has testified
that the Department of Justice feels that if the bill is passed the
divestiture could be appropriately completed in two years. It should
be pointed out, however, that du PontS plan for distribution under
the Boggs bill would, if made under present law, result in the payment
of Federal income taxes in an amount roughly in the neighborhood of
$1 billion as described in the Treasury Departments report to this
Committee. Thus, according to the representations made by the du Bent
representatives to the Treasury Department, the effect of the Boggs
bill would be to change the pattern of distribution, to increase the
control or choice of action of the shareholders with respect to the
*

No Internal Revenue ruling was either requested by or given to the
du Pont representatives, nor has du Pont furnished or been asked
for any undertaking that the plan or the assumptions supporting it
will become fact under any given circumstances. The revenue figure
presumably ignores any revenue losses which du Pont contends would
flow from the adverse impact on the market caused by such a plan
of divestiture.

** This figure presumably ignores possible actions which shareholders
can take to minimize their tax burdens. It also seems to ignore
potential losses of revenue that could arise from the ability of
low basis du Pont shareholders to sell General Motors stock, currently represented by low basis du Pont stock, at market prices
without gain. The figure assumes that Christiana will in turn
distribute the stock it receives to its shareholders.

- 3 As the pending du Pont antitrust divestiture case would be
___mediately affected by the Boggs bill, ve included in our report
rough estimates as to the differences in tax consequences that flow
from the application of the present lav and from application of the
Boggs bill.
However, the figures contained in the report were based on the
assumption that du Pont would distribute its General Motors shares
while continuing to pay its normal cash dividends. In other words,
we assumed that du Pont did not intend to substitute General Motors
shares for any portion of its normal cash dividends to shareholders.
This assumption was based upon an earlier statement of du Pont Company representatives on the basis of a plan then before the Chicago
court. After preparing our report, du Pont representatives inforaally
presented to the Treasury Department tentative plans -which could
considerably change the estimates contained in our report. Briefly,
they presented a 4-part plan vhich they indicate du Pont would follow
to coaply with a divestiture order under prevailing tax lav. The
plan provides for (a) an offer to exchange General Motors shares for
du Pont common at a ratio which would provide a premium to the
exchanging stockholders; (b) a separate offer to exchange General
Motors shares for du Pont preferred at a ratio in vhich the market
value of General Motors stock would equal the call price of the preferred; (e) a distribution of a portion of the General Motors shares
in lieu of cash dividends; and, lastly, (d) a sale of the General
Motors shares remaining after the foregoing transactions had taken
place. The du Pont Company has estimated that the Federal income
taxes payable under the plan would amount roughly to slightly less
than $330 million of additional revenue resulting from the divestiture, and such revenue would flow primarily from the sale by the Company
of the 37 million shares of General Motors stock. Indeed, under an
alternative plan submitted by du Pout representatives at a later date,
the resulting revenue would, if the plan were successfully executed,
amount to only $133 million.

*

We are advised that this figure assumes reinvestment by du Pont
of the cash proceeds of the sale of General Motors stock in a
diversified portfolio of securities in lieu of distribution of
such proceeds to shareholders.

OAQ
- 2 -

entire appreciation in value of the property escapes the intercorporate- dividend tax. The new rule, contained in section 2 of the
bill, provides that the amount of dividend income resulting from the
receipt of antitrust stock, and the amount of the dividends-received
deduction, will be measured by the fair market value of the stock
distributed. However, the basis of the stock in the hands of the
recipient corporation will be partially stepped-up in recognition
of the fact that a portion of the appreciation in value has been
taxed to the recipient corporation at the ordinary corporate rate
after application of the intercorporate-dividends-received deduction.
Section 3 of H. R. 8847 would add to the Code various technical
amendments required by the new rule relating to intercorporate dividends. One of the amendments provides for a special adjustment to
earnings and profits when a corporation disposes of antitrust stock.
The other amendments all involve various sections in Subchapter G
of the 1954 Code, relating to corporations used to avoid income tax
on shareholders. These amendments are in general designed to avoid
an undue adverse impact upon the shareholders of personal holding
companies receiving divested stock.
The Treasury Department has advised you of its views on this
subject in a report on an earlier version of H. R. 8847 introduced
by Senator Williams of Delaware (i.e., S. 2266). In brief, the
report points out that we believe that the principal factors involved
in determining whether relief should be granted are matters beyond
the purview of our own responsibilities, and as a consequence we
expressed neither support nor objection to the bill.
The factors we mentioned are: Any impact on the market resulting
from taxing divestiture distributions under the present tax laws;
equity to shareholders in such cases; and the effect on enforcement
of the antitrust laws.
We also reported that if this Committee should decide to approve
the bill, we hoped that you would incorporate certain amendments.
The amendments which we suggested have been substantially incorporated
in H. R. 8847, except that we urged that our proposed amendment to the
intercorporate tax provisions be applied generally as a needed reform
rather than confined to antitrust divestiture cases. However, we did
indicate to the House Ways and Means Committee that we would not
object to the limited amendment incorporated in H. R. 8847 as reported.
If the bill in its present form should be passed by Congress, we
strongly recommend that the Congress consider applying the intercorporate-dividend amendment generally in the near future.

TREASURY DEPARTMENT
WASHINGTON
FOR RELEASE: UPON DELIVERY

SEPTEMBER 13, 196l

STA_0__MENT OF ROBERT H. KNIGHT, GENERAL COUNSEL
OF THE TREASURY, BEFORE THE SENATE FINANCE CCMtETTEE
ON H_ R. 8847, WEDNESDAY, SEPTEMBER 13, 1961, 10:00 A.M., EDT
Mr. Chairman, I am delighted to accept your invitation today to
discuss H. R. 8847, introduced*by Congressman Boggs, and reported
favorably by the House Ways and Means Committee on September 7, 1961.
The bill would provide tax relief to individual stockholders receiving distributions of stock as a result of antitrust divestiture orders.
Section 1 of H. R. 8847 would add a new section 1111 to the
Internal Revenue Code which would provide special tax treatment for
individual shareholders who receive divested stock pursuant to an
antitrust order. Proposed section 1111 would treat a distribution
of divested stock to such shareholders as a return of capital which
would be received tax free except to the extent that the fair market
value of the divested stock exceeds the shareholders' cost basis for
the underlying stock with respect to which the distribution is made.
The fair market value of the divested stock would be applied against
and reduce the adjusted cost basis of the underlying stock, and any
excess of fair market value over such cost basis would be treated
as a taxable capital gain from the sale or exchange of property.
The tax treatment which would be accorded by the bill is similar
to the tax treatment now provided by section 301 of the Code to a corporate distribution which is in excess of the corporation*s earnings
and profits. The proposed section 1111 provides that the earnings
and profits of the distributing corporation shall not be diminished
by reason of any distribution of divested stock which is treated as
a return of capital.
Section 2 of H. R. 8847 would amend section 301 of the Code,
relating to the taxation of intercorporate dividends, to provide a
new tax treatment to corporate shareholders receiving antitrust stock
which has appreciated in value in the hands of the distributor. Under
existing law, a corporate recipient of a dividend of appreciated
property includes in gross income only an amount equal to the cost
basis of such property in the hands of the distributor, and then
generally is entitled to an 85 per cent dividends-received deduction
to reduce the amount subject to tax. Thus, under existing law the
D-221^

TREASURY DEPARTMENT
WASHINGTON
FOR RELEASE: UPON DELIVERY

SEPTEMBER 13, I96I

STATEMENT OF ROBERT H. KNIGHT, GENERAL COUNSEL
OF THE TREASURY, BEFORE THE SENATE FINANCE COMMITTEE
ON H. R. 8847, WEDNESDAY, SEPTEMBER 13, I96I, 10:00 A.M., EDT
Mr. Chairman, I am delighted to accept your invitation today to
discuss H. R. 8847, introduced*by Congressman Boggs, and reported
favorably by the House Ways and Means Committee on September 7, 1961.
The bill would provide tax relief to individual stockholders receiving distributions of stock as a result of antitrust divestiture orders.
Section 1 of H. R. 8847 would add a new section 1111 to the
Internal Revenue Code which would provide special tax treatment for
individual shareholders who receive divested stock pursuant to an
antitrust order. Proposed section 1111 would treat a distribution
of divested stock to such shareholders as a return of capital which
would be received tax free except to the extent that the fair market
value of the divested stock exceeds the shareholders* cost basis for
the underlying stock with respect to which the distribution is made.
The fair market value of the divested stock would be applied against
and reduce the adjusted cost basis of the underlying stock, and any
excess of fair market value over such cost basis would be treated
as a taxable capital gain from the sale or exchange of property.
The tax treatment which would be accorded by the bill is similar
to the tax treatment now provided by section 301 of the Code to a corporate distribution which is in excess of the corporation's earnings
and profits. The proposed section 1111 provides that the earnings
and profits of the distributing corporation shall not be diminished
by reason of any distribution of divested stock which is treated as
a return of capital.
Section 2 of H. R. 8847 would amend section 301 of the Code,
relating to the taxation of intercorporate dividends, to provide a
new tax treatment to corporate shareholders receiving antitrust stock
which has appreciated in value in the hands of the distributor. Under
existing law, a corporate recipient of a dividend of appreciated
property includes in gross income only an amount equal to the cost
basis of such property in the hands of the distributor, and then
generally is entitled to an 85 per cent dividends-received deduction
to reduce the amount subject to tax. Thus, under existing law the
D-22i|.

- 2 -

entire appreciation in value of the property escapes the intercorporate- dividend tax. The new rule, contained in section 2 of the
bill, provides that the amount of dividend income resulting from the
receipt of antitrust stock, and the amount of the dividends-received
deduction, will be measured by the fair market value of the stock
distributed. However, the basis of the stock in the hands of the
recipient corporation will be partially stepped-up in recognition
of the fact that a portion of the appreciation in value has been
taxed to the recipient corporation at the ordinary corporate rate
after application of the intercorporate-dividends-received deduction.
Section 3 of H. R. 8847 would add to the Code various technical
amendments required by the new rule relating to intercorporate dividends. One of the amendments provides for a special adjustment to
earnings and profits when a corporation disposes of antitrust stock.
The other amendments all involve various sections in Subchapter G
of the 1954 Code, relating to corporations used to avoid income tax
on shareholders. These amendments are in general designed to avoid
an undue adverse impact upon the shareholders of personal holding
companies receiving divested stock.
The Treasury Department has advised you of its views on this
subject in a report on an earlier version of H. R. 88Vf introduced
by Senator Williams of Delaware (i.e., S. 2266). In brief, the
report points out that we believe that the principal factors involved
in determining whether relief should be granted are matters beyond
the purview of our own responsibilities, and as a consequence we
expressed neither support nor objection to the bill.
The factors we mentioned are: Any impact on the market resulting
from taxing divestiture distributions under the present tax laws;
equity to shareholders in such cases; and the effect on enforcement
of the antitrust laws.
We also reported that if this Committee should decide to approve
the bill, we hoped that you would incorporate certain amendments.
The amendments which we suggested have been substantially incorporated
in H. R. 8847, except that we urged that our proposed amendment to the
intercorporate tax provisions be applied generally as a needed reform
rather than confined to antitrust divestiture cases. However, we did
indicate to the House Ways and Means Committee that we would not
object to the limited amendment incorporated in H. R. 8847 as reported.
If the bill in its present form should be passed by Congress, we
strongly recommend that the Congress consider applying the intercorporate-dividend amendment generally in the near future.

- 3 As the pending du Pont antitrust divestiture case would be
immediately affected by the Boggs bill, ve included in our report
rough estimates as to the differences in tax consequences that flov
from the application of the present lav and from application of the
Boggs bill.
Hovever, the figures contained in the report were based on the
assumption that du Pont vould distribute its General Motors shares
vhile continuing to pay its normal cash dividends. In other words,
ve assumed that du Pont did not intend to substitute General Motors
shares for any portion of its noiraal cash dividends to shareholders.
This assumption vas based upon an earlier statement of du Pont Company representatives on the basis of a plan then before the Chicago
court. After preparing our report, du Pont representatives informally
presented to the Treasury Department tentative plans vhich could
considerably change the estimates contained in our report* Briefly,
they presented a 4-part plan vhich they indicate du Pont would follov
to comply vith a divestiture order under prevailing tax lav. The
plan provides for (a) an offer to exchange General Motors shares for
du Pont common at a ratio vhich would provide a premium to the
exchanging stockholders; (b) a separate offer to exchange General
Motors shares for du Pont preferred at a ratio in which the market
value of General Motors stock would equal the call price of the preferred; (c) a distribution of a portion of the General Motors shares
in lieu of cash dividends; and, lastly, (d) a sale of the General
Motors shares remaining after the foregoing transactions had taken
place. The du Pont Company has estimated that the Federal income
taxes payable under the plan would amount roughly to slightly less
than $330 million of additional revenue resulting from the divestiture, and such revenue would flow primarily from the sale by the Company
of the _»7 million shares of General Motors stock. Indeed, under an
alternative plan submitted by du Pont representatives at a later date,
the resulting revenue would, If the plan were successfully executed,
amount to only $133 million.

*

We are advised that this figure assumes reinvestment by du Pont
of the cash proceeds of the sale of General Motors stock in a
diversified portfolio of securities In lieu of distribution of
such proceeds to shareholders.

- 4Taking as fact the assumptions which the Company has presented
to us, we have no particular quarrel with their estimates.* Under
these plans, the additional revenue payable under the present tax
law would be paid to the United States over a period of 10 years on
the assumption that the court in the du Pont antitrust case would
permit divestiture to take place over that period.
The du Pont officials have indicated that if the Boggs bill is
passed, du Pont would in all probability abandon the 4-part plan and
would distribute the bulk of its 63 million shares of General Motors
stock to its stockholders, in addition to rather than in lieu of
normal cash dividends. They have estimated that such a distribution
under the Boggs bill would result in the payment of Federal taxes in
the amount of roughly $350 million** of additional revenue resulting
from the divestiture. This sum would be payable over a shorter
period of time if the court adheres to the admonition contained in
section 1 of the bill with regard to limiting the period of divestiture. Indeed, Assistant Attorney General Oberdorfer has testified
that the Department of Justice feels that if the bill is passed the
divestiture could be appropriately completed in two years. It should
be pointed out, however, that du Pont's plan for distribution under
the Boggs bill would, if made under present law, result in the payment
of Federal income taxes in an amount roughly in the neighborhood of
$1 billion as described in the Treasury Department's report to this
Committee. Thus, according to the representations made by the du Pont
representatives to the Treasury Department, the effect of the Boggs
bill would be to change the pattern of distribution, to increase the
control or choice of action of the shareholders with respect to the
*

No Internal Revenue ruling was either requested by or given to the
du Pont representatives, nor has du Pont furnished or been asked
for any undertaking that the plan or the assumptions supporting it
will become fact under any given circumstances. The revenue figure
presumably ignores any revenue losses which du Pont contends would
flow from the adverse impact on the market caused by such a plan
of divestiture.

** This figure presumably ignores possible actions which shareholders
can take to minimize their tax burdens. It also seems to ignore
potential losses of revenue that could arise from the ability of
low basis du Pont shareholders to sell General Motors stock, currently represented by low basis du Pont stock, at market prices
without gain. The figure assumes that Christiana will in turn
distribute the stock it receives to its shareholders.

- 5assets in question,* and to shift the tax burden from the du Pont
Company to the shareholders who acquired their shares prior to 1949
when du Pont stock last sold at a price below the current market
price of the General Motors shares to be distributed. In this connection, I should point out that du Pont very recently filed in the
antitrust suit in the Chicago Court, a proposed final judgment which
would permit du Pont to divest itself of General Motors stock "by
distribution to its stockholders or by such other means as it may
select......" If du Pont prevails, Christiana would not be legally
bound to redistribute any General Motors stock it receives and its
failure to do so would reduce the taxes payable by roughly $136 million.
Despite these considerations, however, it must be conceded that if the
du Pont assumptions may be taken as factual, the revenue payable to
the United States as a practical matter will be approximately the same
whichever tax law is made applicable to the divestiture. If the Committee is satisfied that this practical result will in fact obtain,
this would remove a principal concern which the Secretary of the
Treasury had at the time our report was prepared.
Also, at the time of preparing our report, we had no independently-derived source of information which would tend to support the
du Pont contentions with regard to the impact on the market of
divestiture under present law. Since that time we have received
advice from the Securities and Exchange Commission which would lend
some support to the claim that divestiture under existing Internal
Revenue laws could have an adverse impact on the market. However,
the Securities and Exchange Commission was careful to point out that
there were many factors bearing upon this question which cannot be
presently evaluated, such as the general trend of the market over
the period of divestiture, the opportunities open to du Pont to minimize the impact, etc. Accordingly, they cautioned that reliance on
any such estimate might prove extremely hazardous.
The difficulties in arriving at reliable tax revenue estimates
and in forecasting the impact of divestiture under present law led
the Treasury Department to take a neutral position with regard to
*

E.g., du Pont shareholders will be able to obtain at reduced
capital gains rates full control of the General Motors shares and
may thereafter obtain tax free the proceeds of any sales of such
stock. Following the du Pont plan under present law would leave
the proceeds after taxes from such a sale in the du Pont Company,
and if distributed, such proceeds would be subject to ordinary
income taxes on the shareholders.

-6 the desirability of the Boggs bill. However, if the Committee feels
that the relief proposed is necessary or desirable under all the
circumstances and if it can be established to the satisfaction of
this Committee that the du Pont contentions are substantially correct
as to market impact and as to the similarity of revenue return to
the United States under either present law or the Boggs bill, the
Secretary of the Treasury has authorized me to say that he would have
no objection to its passage. In so stating, we are aware that the
Boggs bill is designed not as a private relief bill but to apply to
divestitures generally. In this connection, the discretion left to
the court under the terms of the bill would seem to us to provide a
safeguard against windfalls to future taxpayers affected by antitrust
divestitures. If in the future a situation should arise which would
belie this assumption, we assume that the Congress will take appropriate legislative action to protect the interest of the United States
in the light of the facts pertaining in such case, and, indeed, we
shall so recommend.

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 su

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

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

thereof by any State, or any of the possessions of the United States, or by a

local taxing authority. For purposes of taxation the amount of discount at wh

Treasury bills are originally sold by the United States is considered to be i
Under Sections 454 (b) and 1231 (5) of the Internal Revenue Code of 1954 the

of discount at which bills issued hereunder are sold is not considered to acc
until such bills are sold, redeemed or otherwise disposed of, and such bills

cluded from consideration as capital assets. Accordingly, the owner of Treasu
bills (other than life insurance companies) issued hereunder need include in
income tax return only the difference between the price paid for such bills,

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

upon sale or redemption at maturity during the taxable year for which the ret
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
the circular may be obtained from any Federal Reserve Bank or Branch.

- 2.,_'<v_rA'_'A'a'«,'...'4_k_i'..'

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 vhich will be
supplied by Federal Reserve Banks or Branches on application therefor.
Others than banking institutions will not be permitted to submit tenders ex-

cept for their own account. Tenders vill be received without deposit from incor
rated banks and trust companies and from responsible and recognized dealers in

ment securities. Tenders from others must be accompanied by payment of 2 percen

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

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

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

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

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

these reservations, noncompetitive tenders for $200.000 or less for the additio
bills dated

June 25, 1961

P&J
December 21, 1961
182

, ( 91

days remaining until maturity date on

xfck__*

) and noncompetitive tenders for $100,000 or less for the

-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 r

tive issues. Settlement for accepted tenders in accordance with the bids must b

made or completed at the Federal Reserve Bank on September 21, 1961 y in cash o

other immediately available funds or in a like face amount of Treasury bills ma
ing September 21, 1961 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 b&ve any exemption- as such, and lo

_Ed___fc__&_2X}_
M«--V»:o:«.»:«>«/(»:*ii*:*!

TREASURY DEPARTMENT
Washington
FOR IMMEDIATE R-__-_ASExx_-_i-_bd-_-k-_x

September 13, 1961

•_xxxxxxxi_y->-XX>->-xxx^
The Treasury Department, by this public notice, invites tenders for two series
of Treasury bills to the aggregate amount of $ 1.700.OOP.OOP y or thereabouts; for
cash and in exchange for Treasury bills maturing
of $ 1,701,237,PPP

91

September 21, 1961, in the amount

, as follows:

-day bills (to maturity date) to be issued

September 21, 1961

,

in the amount of $ 1,100,000,000 , or thereabouts, representing an additional amount of bills dated

June 23, 1961

,

&
and to mature

December 21, 1961

amount of $ 500,767,000

, originally issued in the

, the additional and original bills

to be freely interchangeable.
182 -day bills, for $ 600,000,000

"_5_s_xT

y or thereabouts, to be dated

3$£5~
September 21, 1961 and to mature

_5_S_i5

March 22. 1962

•

35fci5

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

,

Ii
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).

I

Tenders will be received at Federal Reserve Banks and Branches up to the closing
Daylight Saving
,
hour, one-thirty o'clock p.m., EasteiV S*a«£_a8xx time, Monday, September 18, 1961
j
Tenders will not be received at the Treasury Department, Washington.

Each tender

^
Id

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

-;2S

0 r "T

TREASURY DEPARTMENT _
WASHINGTON, D.C.
September 13,1961
FOR IMMEDIATE RELEASE
TREASURY'S WEEKLY BILL OFFERING

The Treasury Department, by this public notice, invites tenders
for two series of Treasury bills to the aggregate amount of
$1,700,000,000, or thereabouts, for cash and in exchange for
Treasury bills maturing September 21.1961,in the amount of
$1,701,237,000, as follows:
91-day bills (to maturity date) to be issued September 21, 196l,
in the amount of $1,100,000,000, or thereabouts, representing an
additional amount of bills dated June 23, 196l,
and to
mature December 21,196l, originally issued in the amount of
$500,767,000,
the additional and original bills to be freely
interchangeable.
182-day bills, for $600,000,000, or thereabouts, to be dated
September 21,196l,and to mature March 22, 1962.
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 Daylight
Saving time, Monday, September 18, 1961. 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
D-225company.
or trust

- 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
June 23, 1961,
(91-days remaining until maturity date on
December 21,196l) a n d 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 September 21, 1961,
in cash or other immediately available funds or in a like face
amount of Treasury bills maturing September 21,1961.Cash and
exchange tenders will receive equal treatment. Cash adjustments
will be made for differences between the par value of maturing
bills accepted in exchange and the issue price of the new bills.
The income derived from Treasury bills, whether interest or
gain from the sale or other disposition of the bills, does not have
any exemption, as such, and loss from the sale or other disposition
of Treasury bills does not have any special treatment, as such,
under the Internal Revenue Code of 1954. The bills are subject to
estate, inheritance, gift or other excise taxes, whether Federal or
State, but are exempt from all taxation now or hereafter imposed on
the principal or interest thereof by any State, or any of the
possessions of the United States, or by any local taxing authority.
For purposes of taxation the amount of discount at which Treasury
bills are originally sold by the United States is considered to be
interest. Under Sections 454 (b) and 1221 (5) of the Internal
Revenue Code of 1954 the amount of discount at which bills issued
hereunder are sold is not considered to accrue until such bills are
sold, redeemed or otherwise disposed of, and such bills are excluded
from consideration as capital assets. Accordingly, the owner of
Treasury bills (other than life insurance companies) issued hereunder
need include in his income tax return only the difference between
the price paid for such bills, whether on original issue or on
subsequent purchase, and the amount actually received either upon
sale or redemption at maturity during the taxable year for which the
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 theirReserve
issue. Bank
Copies
of the circular may be obtained from any
Federal
or Branch.

258

SEP 6 1961

Urn ts&kmm ^msmmmmm mm mm. 4» ttmrt mm* m^^mw* mmm&%m
mt tfc* &m&nsxtmt tor tmmmrf mmmm^mmml mtfk Offimt- mmmm ?&mlm
mt *e&K9%*

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TREASURY DEPARTMENT

9^Q
__ \j

\J

am_amMi^wi?__>w__i

WASHINGTON. D.C.
g4s%-4§r 196l

IMMEDIATE RELEASE
TREASURY MARKET TRANSACTIONS IN
U't../A ,4/.* *- *

During # u # ^ 196l, 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

y__J. & 0 o 9

0O0

D-&Q4**
^

-

^

^

TREASURY DEPARTMENT
WASHINGTON, D.C.
September 13, 196l

IMMEDIATE RELEASE
TREASURY MARKET TRANSACTIONS IN AUGUST
During August 1961, market transactions
in direct and guaranteed securities of the
government for Treasury investment and other
accounts resulted in net purchases by the
Treasury Department Of $17,319,500.

0O0

D-226

-3-

<?
Advisers Conf t.
Charles Coombs
Vice Fresident
Federal Reserve Bank of New York
Dixon Donnelley
Assistant to the Secretary of the Treasury
Theodore Eliot, Jr.
Special Assistant to the Secretary of the Treasury
E. Jay Finkel,
Office of International Finance, Treasury Department
Isaiah Frank
Director
Office of International Financial and Development Affairs,
Department of State
Mortimer D. Goldstein
Office of International Financial and Development Affairs,
Department of State
Fred B. Smith
Assistant General Counsel, Treasury Department
George S. Springsteen
Special Assistant to the Under Secretary of State
for Economic Affairs
James Tobin
Member, Council of Economic Advisers
George H. Willis
Director, Office of International Finance, Treasury
Department
John S. Hooker
faS Alternate Executive Director
International Monetary Fund
fe^trm* Pre* cot 4 G<M i*. I ft*p^je*fc) »'* 4tky fU*Al

-2-

2e2
Delegates Con't.
Frank A. Southard, Jr.
Special Assistant to the Secretary of the Treasury, and
AJL<&Executive Director of the International Monetary Fund

Advisers;
Abraham J. Multer
Member, Committee on Banking and Currency
U. S. House of Representatives
Clarence Kilburn
Member, Committee on Banking and Currency
U. S. House of Representatives
William McC. Martin, Jr.
Chairman, Board of Governors, Federal Reserve System
Harold F. Linder
President, Export-Import Bank of Washington
Walter Heller
Chairman, Council of Economic Advisers
Rowland Burnstan
Assistant Secretary for International Affairs
Department of Commerce
Alfred Hayes
President, Federal Reserve Bank of New York
Dwight J. Porter
Charge d1Affaires, American Embassy, Vienna
__H__HxSxxM______e__
Joseph W. Barr
Assistant to the Secretary of the Treasury
Henry J. Bittermann
Sr. Financial Adviser
Office of International Finance, Treasury Department
Eirle Cocke, Jr. .. _. ,
(I <fAlternate Executive Director
'international Bank for Reconstruction and Development

OQ'l
&— _/ w

IIT

$#*.

FOR RELEASE:

& " "

THURSDAY AM'S

DILLON HEADING UNITED STATES DELEGATION TO
WORLD BANK AND FUND MEETING IN VIENNA
A United States delegation headed by Secretary of the
Treasury Douglas Dillon will leave for Vienna, Austria, mm
<~fe>morrow at 9:00 A. M. from Andrews Air Force* to attend the
Annual Meetingsof the Boards of Governors of the International
Bank and its affiliates, and of the International Monetary Fund.
The meetingsopen^ on Monday, September 18, and m
gbf p£C&6A~~7s°AS CtZ(Jljj.h«/^nfo
^jjgfg|g§p^g||P end^September 22. The ^^^y- io due back in Washingtoi
on September 24, at 4:45 p.m..
Other members of the U. S. delegation include:
Delegates:
George W. Ball
Under Secretary of State for Economic Affairs
Robert V. Roosa
Under Secretary of the Treasury for Monetary Affairs
John M. Leddy
Assistant Secretary of the Treasury

}

-^7

TREASURY DEPARTMENT

°CA

__ w" r

WASHINGTON, D.C.
September 13, 196l
FOR RELEASE: THURSDAY AM'S
September 14, 1961
DILLON HEADING UNITED STATES DELEGATION TO
WORLD BANK AND FUND MEETING IN VIENNA
A United States delegation headed by Secretary of the Treasury
Douglas Dillon will leave for Vienna, Austria, tomorrow at 9:00 A.M.
from Andrews Air Force Base to attend the Annual Meetings of the
Boards of Governors of the International Bank and its affiliates,
and of the International Monetary Fund.
The meetings open on Monday, September 18, and end September 22.
The delegation will return to Washington on September 24, at 4:45 P.M.
Other members of the U.S. delegation include:
Delegates:
George W. Ball
Under Secretary of State for Economic Affairs
Robert V. Roosa
Under Secretary of the Treasury for Monetary Affairs
John M. Leddy
Assistant Secretary of the Treasury
Frank A. Southard, Jr.
Special Assistant to the Secretary of the Treasury, and U. S,
Executive Director of the International Monetary Fund
Advisers:
Abraham J. Multer
Member, Committee on Banking and Currency
U. S. House of Representatives
Clarence Kilburn
Member, Committee on Banking and Currency
U. S. House of Representatives
William McC. Martin, Jr.
Chairman, Board of Governors, Federal Reserve System

D-227

- 2 Advisers Continued
Harold F. Linder
President, Export-Import Bank of Washington
Walter Heller
Chairman, Council of Economic Advisers
Rowland Burnstan
Assistant Secretary for International Affairs
Department of Commerce
Alfred Hayes
President, Federal Reserve Bank of New York
Dwight J. Porter
Charge d1Affaires, American Embassy, Vienna
Joseph W. Barr
Assistant to the Secretary of the Treasury
Henry J. Bittermann
Sr. Financial Adviser
Office of International Finance, Treasury
Erie Cocke, Jr.
U. S. Alternate Executive Director
International Bank for Reconstruction and Development
Charles Coombs
Vice President
Federal Reserve Bank of New York
Dixon Donnelley
Assistant to the Secretary of the Treasury
Theodore Eliot, Jr.
Special Assistant to the Secretary of the Treasury
E. Jay Finkel
Office of International Finance, Treasury Department
Isaiah Frank
Director
Office of International Financial and Development Affairs,
Department of State
Mortimer D. Goldstein
Office of International Financial and Development Affairs,
Department of State
John S. Hooker
U. S. Alternate Executive Director
International Monetary Fund

Advisers Continued

- 3 -

Fred B. Smith
Assistant General Counsel, Treasury Department
George S. Springsteen
Special Assistant to the Under Secretary of State
for Economic Affairs
James Tobin
Member, Council of Economic Advisers
George H. Willis
Director, Office of International Finance, Treasury
Department
Senator Prescott Bush and Representative Henry S. Reuss are
accompanying the group as observers.

0O0

OQ

TRSAST3HT DSPARTMEST
lashington, D . _•

__ w

D&2DIATB BSLEASE

D-228

THURSDAY, SEPTEMBER 14, 1961
Pmil__NAB_r DATA OM IMPORTS FOR CONSUMPTION 0? ONMANUFACTin®D LEAD AND 2IKC CHARGSABLS TO THE QUOTAS ISTABUSHEB
B7 PRZSIDSNTIAL PROCLAMATION NO. 3257 07 SEPTEMBER 22, _?5_
OOAHTERLT CEDOTA PERIOD • July I, 1961 - September 30, 1961
IMPORTS- July I, 1961 - September II, 1961
ITEM

pi

ITEM 392
ITE-I 393,
ITEM 394
uoau bullion
ut____.a or
or base
w__. bullion,
uu___on,
:
I
V* Lead
*
i lead in pigs and bars, lead
x
t
t Lead^bearing ores, flu* dust, t dross, reclaimed lead, scrap
« Zinc-bearing ores of all kinds,: Zlno ia blooks, pigs, or slabs:
t
and eattei
: lead, antisocial lead, antij except pyrites containing not s old and -orn-out _ino, fit
t only. to
*
t aonial scrap lead, type aatal, x
over % of tino
. .be reoanufaetured, zino
s
dross,
and sino skianlngs
*
s all alloys or combinations of t
:
*
•
>
load n.s.p.f.
i
:Quarterly Quota
itQuarterly
Dutiable Lead
Imports x:Quarterly
Dutiable Lead
Quota
Quota""
Quota
Iffiport- x:Quarterly
Dutiable Zinc
Import. 8 EOT Weight
Imports
(Pounds)
(Pounds)
(Pounds)
(Pounds)
*

Country
of
Produotlon

Australia

10,080,000 10,080,000

23.680,000 IM^,?^

Belgian Congo

5,440,000

Belgium and
Lux9aburg (total)
Bolivia
Canada

5,040,000
13,440,000

13,^0,000

Mexico
Peru

16*, 160, 000

10,975,093

On. So. Africa

14,880,000

IH,880,000

TugosloTia
6,560,000

3,272,279

37,840,000

25,887,587

3,600,000

661,380

5,0«40,000
15,920,000

J 5,555,«89

36,880,000

36,880,000

70,480,000

63,8^,215

6,320,000

•*,803,37>»

12,880,000

2,«»2I,I89

35*120,000

15,783,552

3,760,000

578,l»<6

15,760,000

15,658,870

6,080,000

6,080,000

17,840,000

17,81+0,000

6,080,000

6,080,000

66,480,000

39,829,8»tf

Italy

All other foreign
countries (total)

7*520,000

6,560,000

TBE-LSunT -OSPAS-lfl-B?
Tfawfatngtca, 9. C_

J^ u
i_ w •_•

B&SDIATE BSLEASS

D-228

THURSDAY, SEPTEMBER 14, 1961
PBELDC-KARr DATA ON IMPORTS TOR CONSUMPTION 07 UNilANUFACTTOSD LEAD AKD ZINC CHARGSABLS TO THE QUOTAS ESTABLISHED
BY PHZSIDSNTIAL PROCLAMATION NO. 3257 OF SEPTEMBER 22, 1958
fiDABTSBLT QUOTA PERIOD • July I, I96I - September 30, 196!
IMPOSTS • July I, 1961 - Sept-nber II, 1961

Country
°?
Produotion

Australia

rrz-t 391
I T E M 392
:
*
"t Lead bullion or base bullion,
*
x lead in pigs and bars, lead
t Lead-bearing ores, flu. dust, i dross, reclaimed lead, scrap
*
and aattes
: lead, antiaonlal lead, arvtit
. aonial scrap lead, type asetal,
*
I all alloys or combinations of
:Quarterly Quota
:Quarterly Quota
1
t
lead n.s.p.f.
x Dutiabla Lead
Imports x Dutiable Lead
leport.
(Pounds)
(Pounds)
10,080,000
10,080,000
23,680,000
IM«43,7»»5

ITE-I 393
:

ITEM 394
1

x
i
: Zino-bearing ores of all kinds,: Zino la blooks, pigs, or slabs;
: except pyrites containing not s old and worn-out zino, fit
t
orer 3^ of zino
. only to be reaanufactured, zino
t
.
dross, and zino skianlngs
:Quarterly
Quota
:Quarterly
Quota
I
t
x Dutiable Zinc
Iaport. : By Weight
Icports
(Pounds)
(Pounds)

Belgian Congo

5,440,000

Belgiua and
Luz9ab__»g (total)

7,520,000

Bolivia

5,040,000

Canada

13,440,000

5,ouo,ooo

Italy

66,480,000

39,829,8»»3

_»

Peru

16,160,000

10,975,093

Dn. So. Africa

14,880,000

1^,880,000

Tugosloria

_»

All other foreign
countries (total)

6,560,000

6,560,000

3,272,279

<a»

I3,»»»i0,000 15,920,000 15,555,189

Mexico

*,57»*,7»»9

36,880,000

36,880,000

12,880,000

2,421,189

15,750,000

13,658,870

6,080,000

6,080,000

37,840,000

25,887,587

3,600,000

661,380
M03,37>»

70,480,000

63,8^,215

6,320,000

35,120,000

15,783,552

3,760,000

17,840,000

!7,840,000

6,080,000

578,IH6

6,080,000

1G71

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

Country of Origin

Established
TOTAL QUOTA

Total Imports
% Established %
Imports
TJ
Sept. 20, I960, to . 33-1/3% of ; Sept. 20, I960,
Sept. 11,1961
s Total Quota : to Sept. 11. 1961

United Kingdom
4,323,457
Canada
.
239,690
France
227,420
British India
69,627
Netherlands
68,240
Switzerland
44,388
Belgium
38,559
Japan
341,535
China
17,322
Egypt
8,135
Cuba • •
6,544
Germany
76,329
Italy . . . .
......
21,263

1,310,874
239,690
• 75,807
58,512
21,442

5,482,509
y

Included in total imports,-column 2«

Prepared in the Bureau of Customs.

1,441,152

1,441,152

-

-

75,807

75,307

-

-

22,747
14,796
12,853

21,442

50,646

25,443
7.088

9,937

2,260,039

1,599,886

1,551,406

—•

3,068

-

3,063

1 c 71

TREASURY DEPARTMENT
Washington, D. C.
M E D I A T E RELEASE

THURSDAY, SEPTEMBER 14, 1961

D-229

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, i960 - September 11, 1961
~~™
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

Imports

50,569
80,821
8,383,259
618,721

475,124
5,203
237
9,333

Country of Origin
Honduras
Paraguay
Colombia
Iraq
British East Africa ...
Netherlands E. Indies .
Barbados
l/0ther British W. Indies
Nigeria
2/Other British W. Africa
3/0ther 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 T7 1961 - September 11, 1961
Established Quota (Global) - 45,656,420 Lbs.
Staple Length
Allocation
1-3/8" or more
1-5/32" or more and under
1-3/8" (Tanguis)
1-1/8" or* more and under
1-3/8"

39,590,778

Imports
39,590,778

1,500,000

461,020

*«-. 5&5 , 642

4,565. 6-42

Established Quota
752
871
124
195
2,240
71,388
21,321
5,377
l6,oo4
689

071
TREASURY DEPARTMENT
Washington, D. C.
MEDIATE RELEASE
THURSDAY, SEPTEMBER 14, 1961

D-229

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, I960 - September 11, 1961
Country of Origin
E._ypt 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

Imports

Country of Origin
Honduras
Paraguay
Colombia
Iraq
British East Africa ...
Netherlands E. Indies .
Barbados
l/0ther British W. Indies
_ Nigeria
2/0ther British W. Africa
3/other French Africa ...
Algeria and Tunisia ...

50,569
80,321
3,883,259
613,721

475,124
5,203
237
9,333

1 ^ Other than Barbados, Bermuda, Jamaica, Trinidad, and Tobago.
: »f Other than Gold Coast and Nigeria.
Other than Algeria, Tunisia, and Madagascar.
Cotton 1-1/8" or more
Imports August 1, 1961 - September 11, 1961
Established Quota (Global) - 45,656,420 Lbs.
Staple Length
1-3/8" or more
1-5/3-" or more and under

Allocation
39,590,778

1-3/8" (Tanguis)
1-1/8" or more and under

1,500,000

1-3/8"
t C-TT

0 ^ ' 7 " 55*SS>

Imports
39,590,778
461,020

LL CL/ZCZ. £LU<>
C -r-"T^T:r_» >

* _*_ c_>ir_t_>

v> e_.T_x in ~r ~C <~V»c* -_v _3 z> \

TI. .-» TAJ--* I » \r

Established Quota

Inroorts

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

631

•fi-

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

Country of Origin

Established
TOTAL QUOTA

Total Imports
:Established :
imports
~T7
Sept. 20, I960, to :
33-1/3% of : Sept. 20, I960,
Sept. 11, 1961
: Total Quota g to Sept. 11, 1961

United Kingdom
4,323,457
Canada
239,690
France
227,420
British India
69,627
Netherlands
.
68,240
Switzerland . . . . . . . .
44,388
Belgium
38,559
Japan .
341,535
China
17,322
Egypt
8,135
Cub
*
6,544
Germany
76,329
Italy . . . . . . . . . . . .
21.263

1,810,874
239,690
75,307
53,512
21,442

50,646

25,443
7.088

5,482,509

2,260,039

1,599,886

y

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

3,068

1,441,152

1,441,152

75,807

75,307

22,747
14,796
12,853

21,442 .
3,063

9,937
1,551,406

~

7 .->,

72
- 2 -

Unit : Imports
of
: as of
Quantity:Sept. 2. 19_1

Commodity

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

Butter substitutes, including
butter oil, containing h$%
or more butterf at
Tung Oil

12 mos.
Aug. 1,
12 mos.
Aug. 1,

from
I960
from
1961

Calendar Year
Feb. 1, 1961Oct. 31, 1961
Argentina
Paraguay
Other Countries

* Imports through July 31, l$)6l.
** Iaports through September 11, 196l,

1,709,000 Pound

925,360

1,709,000 Pound 35%,900**

1,200,000 Pound Quota Pilled

18,770,577 Pound
2,230,313 Pound
711,188 Pound

16,214,058**
Quota Filled
551,150**

1 '?n

71
TREASURE DEPARTMENT
Washington

H_MEDIATE RELEASE
THURSDAY, SEPTEMBER l 4 , 1961
D-230
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 September 2, 196l, inclusive, as follows:

Unit : Imports
of
:
as of
Quantity: Sept. 2, 196l

Commodity

Tariff-Rate Quotas:
1,500,000

Gallon

268

raliole milk, fresh or sour .... Calendar Tear3,000,000

Gallon

68

Cattle, 700 lbs. or more each July 1, 196l(other than dairy cows) .... Sept. 30, 196l

120,000

Head

47,016

Cattle less than 200 lbs. each 12 mos. from
April 1, 1961

200,000

Head

30,1*3

Cream, fresh or sour Calendar Tear

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

32,600,645

Pound

Quota Filled

Tuna fish Calendar Year

57,114,711*

Pound

35,537,369

114,000,000
36,000,000

Pound
Pound

64,ltUl4,705
8,919,862

5,000,000

Pound

Quota Filled

Pieces

Quota Filled

white or Irish potatoes:
Certified seed ............. 12 mos. from
Other
Sept. 15, I960
Walnuts Calendar Tear
Stainless steel table flatware
(table knives, table forks, Nov. 1, 1960table spoons) ............. Oct. 31, 196l

69,000,000

y

1/ Iinports for consumption at the quota rate are limited to 24,1*50,483 pounds during
the first nine months of the calendar year.

(over)

TREASURY DEPARTMENT
Washington

IMMEDIATE RELEASE
THURSDAY, SEPTEMBER 14, 196l
D-230
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 September 2, 196l, inclusive, as follows:

Commodity

Period and Quantity

: Unit s Imports
s
of
*
as of
:Quantity: Sept. 2, 196l

Tariff-Rate Quotas:

1,500,000

Gallon

268

Whole milk, fresh or sour .... Calendar Tear 3,000,000

Gallon

68

Cattle, 700 lbs. or more each July 1, 196l(other than dairy cows) .... Sept. 30, 196l

120,000

Head

1*7,016

Cattle less than 200 lbs. each 12 mos. from
April 1, 1961

200,000

Head

30,153

Cream, fresh or sour Calendar Tear

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

32,600,645

Pound

Quota Filled

Tuna fish Calendar Tear

57,111*, 711*

Pound

35,537,369

lll*,000,000
36,000,000

Pound
Pound

61*, 1*1*1*, 705
8,919,862

5,000,000

Pound

Quota Filled

69,000,000

Pieces

Quota Filled

Hhite or Irish potatoes:
Certified seed
...... 12 mos. from
Other «...•....•••.•••••.».• Sept. 15, I960
Walnuts Calendar Tear
Stainless steel table flatware
(table knives, table forks, Nov. 1, 1960table spoons) ............. Oct, 31, 1961

1/

1/ Imports for consumption at the quota rate are limited to 24,1*50,1*83 pounds during
the first nine months of the calendar year.

(over)

2

Commodity

Period and Quantity

t Unit s "Sports '
s
of
% as of
:Quantity;Sept. 2, 19.1

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

Butter substitutes, including
butter oil, containing h$%
or more butterfat ..•••••.•.
Tung Oil

12 SBOS.
Aug. 1,
12 mos.
Aug. 1,

from
I960
from
1961

Calendar Tear
Feb. 1, 1961Oct. 31, 1961
Argentina
Paraguay
Other Countries

* Iiaports through July 31, 196l.
mm Imports through September 11, X96l,

1,709,000

Pound

1,709,000 Pound

1,200,000

925,360*
351*,900**

Pound

Quota Filled

18,770,577 Pound
2,230,313 Pound
711,188 Pound

16,214,058**
Quota Filled
551,150**

_L t

TRESSURY DEPARTMENT
Washington

TREASURT DEPARTMENT
Washington
IMMEDIATE RELEASE
THURSDAY, SEPTEMBER l4, 1961

D-231

The Bureau of Customs announced today the following preliminary
figures showing the imports for consumption from January 1, 196l, to
September 2, 196l, inclusive, of commodities for which quotas were
established pursuant to the Philippine Trade Agreement Revision Act
of 1955:

Commodity

Imports
as of
Sept. 2, 1961

Established Annual
Quota Quantity

Buttons

765,000

Gross

168,564

Cigars 180,000,000

Number

4,236,51i0

Coconut oil 403,200,000

Pound

88,259,11*2

Cordage 6,000,000

Pound

3,1*32,925

Tobacco 5,850,000

Pound

5,958,105

TREASURY DEPARTMENT
Washington

TREASURT DEPARTMENT
Washington
IMMEDIATE RELEASE
THURSDAY, SEPTEMBER 14, 1961

D-231

The Bureau of Customs announced today the following preliminary
figures showing the imports for consumption from January 1, 196l, to
September 2, 196l, inclusive, of commodities for which quotas were
established pursuant to the Philippine Trade Agreement Revision Act
of 1955:

Commodity

Established Annual
Quota Quantity

Buttons

765,000

Unit
:
Imports
of
:
as of
Quantity : Sept. 2, 196l
Gross

168,564

Cigars 180,000,000

Number

Coconut oil 403,200,000

Pound

88,259,11*2

Cordage 6,000,000

Pound

3,1*32,925

Tobacco 5,850,000

Pound

5,958,105

1*, 236,51*0

-2-

21~?

upon ^|T Tcaad should there be_fuxther large scale movements of
s_uu_l>term capital •

3M.a Is partietilaxly true in the rnrrr #f thtn Fimdii .rfnoTirron
major currencies other than the dollaF~and the wmni mtmrhteig.

•jit-V Such lines of credit would be an important supplement to th
Fund's existing resources. They would give the Fund access to
substantial amounts of the #ajor currencies so it would he in a
better position to handle any major balance of payments problems
that might arise.

lie do not expect !f__£] final decisions on this subject at Vienna.

the negotiation of such an arrangement is complex and would take s
time. However, the meeting at Vienna will give us the opportunity

for consultations at the Ministerial level which should be helpful
in moving the plan forward.

• 278 .
for Isamediate Release

September 14, 1961

STATEMENT OF TREASURY SECRETARY DOUGLAS DILLON
ON THE EVE OF KI3 DEPASTURE FOR VIENNA, AUSTRIA,
TO ATTEND THE ANNUAL MEETINGS OF THE BOARDS OF
GOVERNORS OF THE INTERNATIONAL BANK AND ITS AFFILIATES
M B 0F THE INTERNATIONAL MONETARY FUND
The meetings to which we are going in Vienna will offer an

Important opportunity for the members of the international financia
community to exchange views on current problems.
Me will review the operations of the International Bank and
the International Monetary Fund during the past year, and devote

considerable attention to the course of financial developments over
the last twelve months.
Our most important discussion will center on the international
payments situation. It will include consideration of establishing

arrangements for special stand-by credits to the Fund by the princ
\

industrial countries Xlifc Is now clear that tfti""YVSi£*^^
oi.tihmmSmA-mmmmm-lmmWmX adequate to deal with all peasibli d^inll

a

27.9

TREASURY DEPARTMENT
WASHINGTON, D.C.
September 14, 1961
FOR IMMEDIATE RELEASE
STATEMENT OF TREASURY SECRETARY DOUGLAS DILLON
ON THE EVE OF HIS DEPARTURE FOR VIENNA, AUSTRIA,
TO ATTEND THE ANNUAL MEETINGS OF THE BOARDS OF
GOVERNORS OF THE INTERNATIONAL BANK AND ITS
AFFILIATES AND OF THE INTERNATIONAL MONETARY FUND

The meetings to which we are going in Vienna will offer an
important opportunity for the members of the international
financial community to exchange views on current problems.
We will review the operations of the International Bank and
the International Monetary Fund during the past year, and devote
considerable attention to the course of financial developments over
the last twelve months.
Our most important discussion will center on the international
payments situation. It will include consideration of establishing
arrangements for special stand-by credits to the Fund by the
principal industrial countries. Such lines of credit would be an
important supplement to the Fund's existing resources. They would
give the Fund access to substantial amounts of the major currencies
so it would be in a better position to handle any major balance of
payments problems that might arise.
We do not expect final decisions on this subject at Vienna.
The negotiation of such an arrangement is complex and would take some
time. However, the meeting at Vienna will give us the opportunity
for consultations at the Ministerial level which should be helpful
in moving the plan forward.

0O0

D-232

TREASURY DEPARTMENT

™
FOR IMMEDIATE RELEASE

f-fe

m
WASHINGTON, D.C. \ s ^
September 15, 196l

TREASURY DECISION ON CLOTHESPINS
UNDER THE ANTIDUMPINGJ.CT
The Treasury Department has determined*that standard
f

(round) wooden clothespins from West Germany are not being,
nor likely to be, sold in the United States at less than
fair value within the meaning of the Antidumping Act.
Notice of the determination will be published in the
Federal Register.
The dollar value of imports of the involved merchandise received during i960 was approximately $83,000.

TREASURY DEPARTMENT
__ O.W A S H I N G T O N , D.C.
September 15, 1961

FOR IMMEDIATE RELEASE
TREASURY DECISION ON CLOTHESPINS
UNDER THE ANTIDUMPING ACT
The Treasury Department has determined that standard
(round) wooden clothespins from West Germany are not being,
nor likely to be, sold in the United States at less than
fair value within the meaning of the Antidumping Act.
Notice of the determination will be published in the
Federal Register.
The dollar value of imports of the involved merchandise received during i960 was approximately $83,000.

CD

TREASURY DEPARTMENT "82
WASHINGTON, D.C. \ ^ > V
September 18, 1961
FOR IMMEDIATE RELEASE
TREASURY DECISION ON CHRISTMAS TREE ORNAMENTS
UNDER THE ANTIDUMPING ACT
The Treasury Department has^determined that Christmas
tree ornaments from Poland are not being, nor likely to be,
sold in the United States at less than fair value within
the meaning of the Antidumping Act. Notice of the determination will be published in the Federal Register.
Appraising officers are being instructed to proceed
with the appraisement of this merchandise from Poland without regard to any question of dumping.
The dollar value of imports of the involved merchandise
received during i960 was approximately $500,000.

TREASURY DEPARTMENT
WASHINGTON, D.C. N^>_^
September 18, 1961
FOR IMMEDIATE RELEASE
TREASURY DECISION ON CHRISTMAS TREE ORNAMENTS
UNDER THE ANTIDUMPING ACT
The Treasury Department has determined that Christmas
tree ornaments from Poland are not being, nor likely to be,
sold in the United States at less than fair value within
the meaning of the Antidumping Act. Notice of the determination will be published in the Federal Register.
Appraising officers are being instructed to proceed
with the appraisement of this merchandise from Poland without regard to any question of dumping.
The dollar value of imports of the involved merchandise
received during i960 was approximately $500,000.

r—
CO

JOINT STATE-TREASURY RELEASE

v Q A•L.'<J'-'•{•

September 18, 1961
FOR IMMEDIATE RELEASE
MONDAY, SEPTEMBER l8, 1961
STATE-TREASURY PERSONNEL EXCHANGE PROGRAM

The" State , and ^Treasury Departments to$ay announced a pei^jsonnelmA
exchange program designed to increas$f undent andinil. of -the* _M__ation*_pS
ship between foreign and financial policies^'
The program was recommended in February of this year by the
Subcommittee on National Policy Machinery of the Senate Committee on
Government Operations. The recommendation was welcomed by the
Secretary of State and the Secretary of the Treasury.
The first assignment of personnel between the two Departments
begins today.
Robert S. Watson, of the Treasury's Office of International
Finance, is assigned to the Economic Development Division of the
State Department's Office of International Financial and Development
Affairs. He will be concerned with the State Department's foreign
policy guidance to the Export-Import Bank. He will also help
coordinate the Department's position in the National Advisory Council
in the area of loans, investments, surveys and certain other
activities.
Edwin C. Rendall of the Bureau of Economic Affairs of the Departmei
of State will be assigned to the Latin American Division of the
Office of International Finance of the Treasury. He will have
'
responsibility for financial analyses of the economies of a selected
group of Latin American countries. This will require the application
of basic Treasury policy to foreign financial matters.
Project assignments and training have been planned to provide
maximum knowledge and understanding in areas where foreign and
\
financial policies coincide. Particular emphasis will be given to
the continued development of the exchange personnel and their potential;
contribution to the purpose of the program following return to their j
parent organizations.
;
Further assignments of personnel to the State-Treasury exchange
program will be made later this year.
\
Assignments will be for one year.
0O0

285
JOINT STATE-TREASURY RELEASE
September 18, 1961
FOR IMMEDIATE RELEASE
MONDAY, SEPTEMBER l8, I96I
STATE-TREASURY PERSONNEL EXCHANGE PROGRAM

The State and Treasury Departments today announced a personnel
exchange program designed to increase understanding of the relationship between foreign and financial policies.
The program was recommended in February of this year by the
Subcommittee on National Policy Machinery of the Senate Committee on
Government Operations. The recommendation was welcomed by the
Secretary of State and the Secretary of the Treasury.
The first assignment of personnel between the two Departments
begins today.
Robert S. Watson, of the Treasury's Office of International
Finance, is assigned to the Economic Development Division of the
State Department's Office of International Financial and Development
Affairs. He will be concerned with the State Department's foreign
policy guidance to the Export-Import Bank. He will also help
coordinate the Department's position in the National Advisory Council
in the area of loans, investments, surveys and certain other
activities.
Edwin C. Rendall of the Bureau of Economic Affairs of the Department
of State will be assigned to the Latin American Division of the
Office of International Finance of the Treasury. He will have
responsibility for financial analyses of the economies of a selected
group of Latin American countries. This will require the application
of basic Treasury policy to foreign financial matters.
Project assignments and training have been planned to provide
maximum knowledge and understanding in areas where foreign and
financial policies coincide. Particular emphasis will be given to
the continued development of the exchange personnel and their potential
contribution to the purpose of the program following return to their
parent organizations.
Further assignments of personnel to the State-Treasury exchange
program will be made later this year.
Assignments will be for one year.
0O0

September 16, 1961
T u — d a y ^ §a%>ts»feer 19, 1961.

mmwst'P

waucti n u omari:

Hit Treasury Fejssyteest enrsofcrtcad last svsiiiiig that the tenders for two series of
treasury bills, one series to be en additional issue of the bills dated tffeas 23, 1961,
and the other aeries to be dated eptesber 11, 1961, whie* were offared on fepteeber 13
vara mpmrnmi at the federal Reserve Hanks ©a t%ptss-b*_» 18. Teasers vara invited for
^1,100,000,000, or ihera&b^ta. of 91-day bills and for 3600,000,000, or ths*sahettt*f
of 182-day bill*. i%o details of the two series ere «a follows*
182-day treasury b l U s
asttariag ffareh 22 _ _96f
Approx. se^iv.
Prise
Annual Hats
2.666$
fM#t/
£•6*0$
98.636
2.60111/

91-day Traaaury billa
aatarlag tseeabe r gl» 1961

*a*0B Or ACCtfTBT

»•»•»••»<•>*»••—__»_-_--I-I-I-I

^riee
99.1*32
99.kr5
99.1*2©*

lew
Avarafa

i _ — _ _ —

Armeal Rata
2.2*7*
2.275*
2.262%

93.6U

a/ excepting one tender of $100,000
lli pareent of the saooat of 91-day billa bid for at ttie low pries was accepted
$1 percent of the amount of 182-day bills bid for at tea low pries w&a assented

wtit nsnas kmim ra km
District
HOStee
"** fork
Fhllsdelphia
Cleveland
fficbrw__a_
Atlanta
Oiicage
Zt. Leols
^Isnsapolis
Sansae City
"alias
San ratieisoo

ACCEPTED SI FEOSJUL

Applied For

I

}l9tet9Qto

numu

Ace*____•*

57f

rismcn?
Applied For

8,9*9.000
93§f051 000
000
7.9T6 000
t3,5©9 000
3,763 000
000
7,376 000
65,6*6 000
5*0*9 000
6,963
65,?oi,ooo
tf,O99,_iO3,00O
y
* a l17,015
U3»;«*
3,919
§259*359,000 uonconpotitiva tenders accepted at tha average prica of 99«lfl
J5.36l.000
§52,*6l,00O nonce* p«t it ive tenders assented at tha
average prica of H.esl
1,179,89^,000
?6,1,53,000
k2,806,00O
15,662,000
23,720,000
295.633,000
26,Slt9,0OO
2i*,290,000
J*3,8s3,000
18,13^,000

io

670 5*5 GOO
13 *o*
1*2 606 OQO
IS 272 000
20 160 000
178 903 000
000
21
570
16
ooo
31 067
15 73l» 000
56.530 000
fl,100,$lf ooo

I

Accaptad
$ 3,9*9,000
163,181,000
2,97§,0O0
23,509,000
3,5lS,000
7,176,060
{.1,716,<X)0
*,5*9,00©
3,«63,000
10,096,000
3,919,000
32.116.000

b / Includes
o / laslsdes
V 0?) a couron tagu* of the s$»e length ©nd for Ilia earns awoont invested, tha return on
*
these bills would provide yields of 2.31S, for the 91-day bills, and 2.76]., for tha
l$2-day bills, interest ratee sn bills are quoted in tares of bank diss not vita
tha return related to tha face moxmt of tha billa payable at maturity rather the*
tha amount invested and their length la astral nuabs? of days related to a 360*dsy
year. In contrast, yields on certificates, notes, and bond* are eeapstsd in tsrat
of interest on tha amount invested, and relate the number of days ref§ainis*j is *»
intsrtst payaeat teriod to the astral isuabsr of days in tha period, with
co-pour Jin<? if mor* titan om coupon period is inrolvsd.
* •,

TREASURY DEPARTMENT
WASHINGTON, D.C.
September 18, 1961 ?Q
FOR RELEASE A. M. NEWSPAPERS,
Tuesday, September 19, 1961.
RESULTS OF TREASURY'S 'WEEKLY BILL OFFERING
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 June 23, 1961,
and the other series to be dated September 21, 1961, which were offered on September 13,
were opened at the Federal Reserve Banks on September 18. Tenders were invited for
$1,100,000,000, or thereabouts, of 91-day bills and for $600,000,000, or thereabouts,
of 182-day bills. The details of the two series are as follows;
OF ACCEPTED
COMPETITIVE BIDS;

RANJE

High
Low
Average

91-day Treasury bills
maturing December 21, 196l
Approx. Equiv.
Annual Rate
________
2.21*7$
99.1*32
2.275$
99.12$
2.262$
99.428

182-day Treasury bills
maturing March 22, 1962
Approx. Equiv.
Price
Annual Rate
98.652 a/
2M5%
98.636 ""
2.698$
98.61*1*
2.681$ 1/

a/ excepting one tender of $100,000
o"l* percent of the amount of 91-day bills bid for at the low price was accepted
5l 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
Boston
New York
Philadelphia
Cleveland
Richmond
Atlanta
Chicago
St. Louis
Minneapolis
Kansas City
Dallas
San Francisco

Applied For
¥
34,892,000
1,1*79,895,000
28,2*58,000
h2,806,000
15,682,000
23,720,000
295,633,000
26,81*9,000
21*, 290,000
1*3,81*3,000
18,131*, 000
65,201,000
$2,099,1*03,000

Accepted
18,072, 000
670,51*5,000
13,1*01,000
1*2,606,000
15,272,000
20,160,000
178,903,000
21,61*9,000
16,570, 000
31,067,000
15,731*,000
56,530, 000
$1,100,512,000 b /

Applied For
Accepted
1
8,91*9,000 $ 3,91*9,000
938,051,000
1*63,181,000
7,978,000
2,978,000
23,509,000
23,509,000
3,763,000
3.518,000
7,376,000
7,176, 000
85,61*6,000
1*1,71*6,000
5,01*9,000
1*,51*9,000
6,963,000
3,1*63,000
17,015,000
10,096,000
3,919,000
3,919, 000
35,361,000
32,116,000
$1,11*3,579,000
",200,W6

c/

y Includes $259,359,000 noncompetitive tenders accepted at the average price of 99»1*28
c/ Includes $52,1*61,000 noncompetitive tenders accepted at the average price of 98.61*1*
y On a coupon issue of the same length and for the same amount invested, the return on
these bills would provide yields of 2.31$, for the 91-day bills, and 2.76$, for the
182-day bills. Interest rates on bills are quoted in tenns of bank discount with
the return related to the face amount of the bills payable at maturity rather than
the amount invested and their length in actual number of days related to a 360-day
year. In contrast, yields on certificates, notes, and bonds are computed in terms
of interest on the amount invested, and relate the number of days remaining in an
interest payment period to the actual number of days in the period, with semiannual
compounding if more than one coupon period is involved.
D-233

288
- 2 in 1945 and 1946. Mr. Lubick Is a member of the Erie County Bar
Association, The New York Bar Association, and the New York State
Bar Association.
Mr. Lubick who makes his home at 6l Chatham
is married and has one son.

0O0

Avenue in Buffalo,

OPQ

DRAFT 9-15-61

FOR IMMEDIATE RELEASE
^_e^/TREASURYfS TAX LEGISLATIVE COUNSEL/^
DONALD C. LUBICK NAMED/DIRECTOR OF THE TREAOUKiTtQ

Acting Secretary of the Treasury Henry H. Fowler today announced
the appointment of Donald C. Lubick, of Buffalo, New York, as the
-a** Treasury's Tax Legislative Counsel^
Jt. _^ag__>fen-nr>ffche-'-^fmi7nTy^""frf^t>n
Mr. Lubick, an attorney who specializes in tax matters, will
^ ^ _ ^ > v / ^ ^ ^ U A ^ J(*-H&t*y fi<
serve as a legal adviser^on tax legislation and g&sist in cooitoinating
the Department's tax legislative program.

He will assume his new

duties on September 25 «_e_seV-_tewe-4____e*^^
At the time of lis Treasury appointment, Mr. Lubick was a tax
specialist and partner in the Buffalo law firm of Hodgson, Russ,
Andrews, Woods and Goodyear, which he joined in 1950 after a year as
a teaching fellow at the Harvard Law School. Since 1950 he has also
a
been/part-time member of the faculty of the University of Buffalo
Law School teaching in a variety of fields including Federal income
taxation.

In 1959 he was Chairman of the Tax Revision Committee of

the City of Buffalo, and has participated in the work of various
bar associations, including the New York State Bar Association
Section on Taxation.
Mr. Lubick, 35, was born in Buffalo.

He received a B.A. degree,

summa cum laude, in 19^5 from the University of Buffalo, and his
LL.B. degree, magna cum laude, from Harvard Law School in 19^9, where
he was elected a member of the Harvard Law Review and President of
the Harvard Legal Aid Bureau.

He served with the U.S. Array Air Force

TREASURY DEPARTMENT

,/Ti^U

WASHINGTON, D.C. N^V_i^
September 18, 1961
FOR IMMEDIATE RELEASE
DONALD C. LUBICK NAMED TREASURY'S TAX LEGISLATIVE COUNSEL
Acting Secretary of the Treasury Henry H. Fowler today announced
the appointment of Donald C. Lubick, of Buffalo, New York, as the
Treasury's Tax Legislative Counsel.
Mr. Lubick, an attorney who specializes in tax matters, will
serve as a legal adviser to Assistant Secretary Stanley S. Surrey
on tax legislation and assist in coordinating the Department's tax
legislative program. He will assume his new duties on September 25.
At the time of his Treasury appointment, Mr. Lubick was a tax
specialist and partner in the Buffalo law firm of Hodgson, Russ,
Andrews, Woods and Goodyear, which he joined in 1950 after a year as
a teaching fellow at the Harvard Law School. Since 1950 he has also
been a part-time member of the faculty of the University of Buffalo
Law School teaching in a variety of fields including Federal income
taxation. In 1959 he was Chairman of the Tax Revision Committee of
the City of Buffalo, and has participated in the work of various
bar associations, including the New York State Bar Association
Section on Taxation.
Mr. Lubick, 35, was born in Buffalo. He received a B.A. degree,
summa cum laude, in 1945 from the University of Buffalo, and his
LL.B. degree, magna cum laude, from Harvard Law School in 1949, where
he was elected a member of the Harvard Law Review and President of
the Harvard Legal Aid Bureau. He served with the U.S. Army Air Force
in 1945 and 1946. Mr. Lubick is a member of the Erie County Bar
Association, The New York Bar Association, and the New York State
Bar Association.
Mr. Lubick who makes his home at 61 Chatham Avenue in Buffalo,
is married and has one son.
0O0

D-234

1750.

umrw

STATIS NIT MONETARY

fmtmn

COUNTRIES

m®

ooio TRANSACTIONS

WITH

79 (

INTCRNATIONAL INSTITUTIONS

January \, 196! - June 3©, 1961
._Xi__j^
negative figures represent net sales by the

Ml Tirst
Country

Quarter

Argentina
Belgium
ifS
Burma
Cambodia

•90.0

Chile
Colombia
Oenraark
II Salvador
rinleikl

- 6.6

France
Germany (tfest)
Shane
Greece
Indonesia
International
Monetary Fund
Iraq
Italy
Japan
Kuwait
Laos
Mexico
Morocco
Netherlands
•eru
Saudi Arabia
Spain
Surinam
Switzerland
Turkey
United Kln§4om
Uruguay
Vatican City
Yugoslavia
All Other

Total

S e i s m d r i s e e l Year l'SJSl
July 1, 196© - June 30, 1961
Quarter

-23.0

_.•»»

-35.0
mm-

•6,4

mmm

mmm

-173*0
- 56.3
• 5.6
- 47.0
- 2KB

-22.5
_,«•
-N__.

mmm
mmm

+100*0
mmm

- 9.8
mmm

-U9

mmm

—„

- 5.0
-10.0
-53.2

•25*0

*.•»«_

*S4.S

•20*0
- 2.5

-150.0

+224*6

•>•_.
*,-»«.
_.-»«

__iJL_ja
-366.0

-14®. 0
* 90.1
- 59*0
- 3.8
- 12»0
• 8.6
- 6.3
• 50*0
• 6.4
«_ 3#0

•300.0
* 29.8
•100.0
- 15.2
- 9.8
- 1.9
- 20.0
- 21.0
-214.4
• 20*0
- 35.0
•171*5
- 2.5
*399.1
- 8,6
-475.4
- 3.8
- 7*0
- 15*9

mJLjbA
+178.8

•1#7I0.4

29^

Ifet purchase of monetary gold by the United

States during the second quarter of 1961 amounted to 0178.8 million.
In the
first xmsmwrn quarter of the year,___lei
there was a net sale of gold of
$366.0 million,

The Treasury's quarterly re port,made public today,
surmaarizes monetary gold transactions with foreign governments,

central banks and international institutions for the second quarter
of 1961.

TREASURY DEPARTMENT

232?

WASHINGTON, D.C.
September 18, 1961
FOR IMMEDIATE RELEASE

UNITED STATES FOREIGN GOLD TRANSACTIONS
FOR SECOND QUARTER OF 196l
The net purchase of monetary gold by the United
States during the second quarter of 1961 amounted to
$178.8 million.

In the first quarter of the year, there

was a net sale of gold of $366.0 million.
The Treasury's quarterly report, made public today,
summarizes monetary gold transactions with foreign
governments, central banks and international institutions
for the second quarter of 1961.

0O0

D-235

UNITED STATES NET MONETARY GOLD TRANSACTIONS WITH
FOREIGN COUNTRIES AND INTERNATIONAL INSTITUTIONS
January \, 19^1 - June 30, 1961

Country

(in millions of dollars at $?S per fine troy ounce)
Negative fi gures represent net sates by the
Uiii ted States •.positive figures, net purchases
Fiscal Year 1961
Second
First
July 1, I960 - June 30, 1961
Quarter
Quarter
1961
,1$6t ,, ,,

Argentina
Belgium

BIS
Burma
Cambodia
Chile
Colombia
Denmark
El Salvador
Finland
France
Germany (West)
Ghana
Greece
Indonesia
International
Monetary Fund
Iraq
Italy
Japan
Kuwait
Laos
Mexico
Morocco
Netherlands
Peru
Saudi Arabia
Spain
Surinam
Switzerland
Turkey
United Kingdom
Uruguay
Vatican City
Yugoslavia
All Other
Total

-90.0
-.._.
-23.0

i
mmm

*
-.«.•

—
- 6.6
...
-35.0
......
—mm-

-22.5
—-

—

- 8.6
- 6.3
- 50.0
+ 6.4
- 3.0

m m m

_._.mmm

+6.'»»
——
._..

-173,0
- 56*3
- 5.6
- 47.0
- 24.9

—
...
-—

—
im mum

—

*»«»«_•

«•«_>••

+100.0
_>_>•-

- 9.8
mmm

—
mmmmmm
mummm

-1.9

mmm
mmm

mmm

mmm

«...

- 5.0
-10.0
-58.2
mmm

-5^.9
mmm

-150.0

-25.0
_»«._1

mmm

-20.0
- 2.5
+224.6

mmm

mmm

mmm

—

mmm

-LP.
-366.0

—2.0
•i-l 78.8

-140.0
- 90.1
- 59.0
- 3.8
- 12.0

.-VSJ

4*300*0
- 29.8
+100*0
- 15.2
- 9.8
- 1.9
- 20.0
- 21.0
-214.4
- 20.0
- 35.0
-171.5
- 2.5
-399J
- 8.6
-475.
*•
- 3.8
- 7.0
- 15.9
- 6.3
-1,730.4

- 3 -

• ,y-j

1MXBTO-XI
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 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, whet

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-

£$.*
_a_i__X-__________ri____£

t

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 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 in
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 additiona
bills dated

June 29. 1961

p__j
December 28, 1961

PP

, ( 91

days remaining until maturity date on

np_qr

) and noncompetitive tenders for $100-000 or less for the

•

pm

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 September 28. 1961 , in cash or

other immediately available funds or in a like face amount of Treasury bills matu
ing September28, 1961 . Cash and exchange tenders will receive equal treatment.

_p__5$
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 a__v exe__gt±Q___ as such, and

TREASURY DEPARTMENT
Washington
FOR IMMEDIATE RELEASE, WOIZMMJQL September 20, 196l

The Treasury Department, by this public notice, invites tenders for two series

of Treasury bills to the aggregate amount of $ 1,700,000,000 , or thereabouts*

_fipr
cash and in exchange for Treasury bills maturing September 28, 1961 , in the amount
of $1,700.237.000 , as follows:
91 -day bills (to maturity date) to be issued

—

September 28, 1961 ,

ijgyr

in the amount of $ 1,100,000,000 , or thereabouts, representing an additional amount of bills dated June 29. 1961 ,
and to mature

December 28* 1961

f

originally issued in the

amount of $ 500.230*000 , the additional and original bills
to be freely interchangeable.
182 -day bills, for $ 600^,000.000 , or thereabouts, to be dated
$3___X
September 28* 1961 y and to mature
March 29* 196%
The bills of both series will be issued on a discount basis under competitive

and noncompetitive bidding as hereinafter provided, and at maturity their fac

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

denominations of $1,000, $5,000, $10,000, $100,000, $500,000 and $1,000,000 (ma
value)•

Tenders will be received at Federal Reserve Banks and Branches up to the closi
two
Daylight Saving
hour, SSMSfflWg. o'clock p.m., Eastern __ffl_Ifi___0_I^ime, Monday* September 2$. 1961
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
price offered must be expressed on the basis of 100, with not more than three

9QC

TREASURY DEPARTMENT
WASHINGTON, D.C.

FOR IMMEDIATE RELEASE

September 20, 196l

TREASURY'S WEEKLY BILL OFFERING
The Treasury Department, by this public notice, invites tenders
for two series of Treasury bills to the aggregate amount of
$1,700,000,000 or thereabouts, for cash and in exchange for
Treasury bills maturing September 28,196l,.in the amount of
$1,700,237,000 as follows?
91-day bills (to maturity date) to be issued September 28, 1961,
in the amount of $1,100,000,000 or thereabouts, representing an
additional amount of bills dated June 29, 1961
and to
mature December 28,1961, originally issued in the amount of
$500,230,000
the additional and original bills to be freely
interchangeable.
182-day bills, for $ 600.000,000 or thereabouts, to be dated
September 28,1961,and to mature March 29, 1962.
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.
Thsy 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, two o'clock p.m., Eastern Daylight
Saving time, Monday, September 25,1961 . 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
D-236
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
June 29, 1961
( 91days remaining until maturity date on
December 28, 1961 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 September 28, 1961,
In cash or other immediately available funds or in a like face
amount of Treasury bills maturing September 28,196l.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 theirReserve
Issue. Bank
Copies
of the circular may be obtained from any
Federal
or Branch.

- 2-

OQ7
X,„ V / i

4

..fc* _._,o»li_g hour, cendei H will be opened at
/- --d i.^ inches, following which public
^ 4 &y th* Treaeu rt y Depareminent of the amount
$0* ifiltenders will be
•ed
f.*.t -*•«!'*» ».'«. _WP.,*P#'MWS#
" cv rejector, r _re . _. » Secretary of
iimttrttaj* Si&Mibir 2 1 A l*6l«
**"•/<••* the rig-t ^ accept or reject a^v or
•—ff*"^* ^ , v
u-^,.
motion ./> any such re&i.eot
:rt p H r w ^ a n d ^
*'* tW^-Ut 6 * Y*M«>t. >._•.*- | K l £ **n._I** IT-IW4T * M MrXClP^TDQI IfU. *feWKf»i
' Tt» trmmamy r.- -r. *,-a amc^aceif !MtVl_k-ie«<ttrt-t1*'^
or umtmmlmmm9 m£ to x^ttm^prnVLmm *Mrt»a mB^g>tmmmmy
M i l * *a b*M&t©d Sftpteaiiwr
19ft*'mm* te _*U_f*bJ_na atj,4ll*a» «Kl*h.itf** efffttM m mUtfmr
VI, mmm mpmm4 at H
a*i Sef)%t^sei» 20« *.e aw r
av** *°ge prica (in t< ,t;
3: -."»,!'*.* - w*'*\ _.vve L'IIP for th^ respective issues*
tfee €e%ali® of*tiAe immmm %m m tmlXmmt raortfa" * with the bids _.,.„>t >>*
> c>
_
-eft a.
J*'.*-'* jcur-iic on r*~f --i'oer 28, 196l,
* «**•& applied urn ~ I M l M t r t O O O '*- ^ ^ A d ^ s % r i5 ) a lik-' J a c e
T o ^ l ^ ^ ^ t ^ * - *,*0ft,$5M» "UatflMa* ^ _ » f W f l i ^ e i « * W ^ a
*"*
*- *•*«*»' - »i:-_*_M*a*e*tUi» aaair tut «tfftifrt«ttl3
M<
:
' '• '**'•**•* *-! ' M l a$ tit •**_«*• itrtet atiim$__few4
- U.
» * •-."
^JX'J-AI *
* * ,*
.i,a ;?a-:t cu ». „
v.»%. new 11? i.
steoge at aeatptt* aaapatlUva tatte. (JUseeptiJ^ u%m teaiera teiaUa* aif600t000)
fcftgft — •- * - stt.otit BteiaeUtt* fata ef *l_iae*^ "t?ea_Mi_ ?»6J0f f^er mmm
" la* "»^-ft- .

m '97.075

-a e '"••

*»

» *: ^?*^* ' •*" ^2.13^1 «*t.»

•, »i i a r.f*
» - 9M66
*"
•.>• ^
a_-*tlis
»- are29si
n§% n t to• J/
.* ©erwi»% ef ti» _Mo«Bt b_4 fe# at %l«#lW^ilee nae'aeeeptiNt)
1 or
r
o%* • " '4**re. * _*
ed on
%
v
e
f^t4tl a^.-y Stattf, or taial^ ^
ar.y loial ^aaeaa»ti» t h o r i t y*
' I K isr*^1'
.o._-s'_ *t % r ^ ^ ;

• A m m

3- M_ialaj^ia
dff»#ift^
4U«ta ^- "'^ !

n•». J h r. .1. L _., ^ ^ U f f t ^ a j i o rig * r 31 5 5 ,tu**
T
^ 4 iiin
4 1t
l€ r r
%£__(__!___ the

'• * i'j!aB___M_____se "

^

y mm mmm: teaae er-tui IN* MiWa#rt^.i^i_ajy'a^
* PttM^^ftiUa «awXd- p w j * iy^m^m^^^mmm
§m%®m w oillm «ti- qw«*a i»
:
^ie»a af aatfk «a^e«tta «dfb;^'iNfiaMi-%mm* m %m't$m mmmi ^f tb»mi9 ml
* mmm ai m\mi%j rimm *mx ite mzmit •%mmm%m4 « M tteir leaftlt in aetaal aaal
of 4afi iralate^ te a ^0*4a^ $®mr* In ®mtrm%9
_4.*li» oa eartlfleatee, w>taa*
bomia era cossput^ in t a m a ol iBt®rtsi #n %m mom% %Mf%m*m&§ ani relate the
ber 01 sJa/i ;s%iaainln:g lr4 aa imtafeat pa>me^ -e* io:,i to tha aelml at^oer of 6ej
trie period, «itri aaolaa»sal mmpom&fokg it mm ilsam on^ mmmm mr\o4 U

:P~ X

TREASURY DEPARTMENT
WASHINGTON, D.C.
September 20, 1961
FOR RELEASE A. M. NEWSPAPERS,
Thursday, September 21, 1961,
RESULT OF TREASURY'S $2-l/2 BILLION 268-DAY TAX ANTICIPATION BILL OFFERING

I The Treasury Department announced last evening that the tenders for $2,500,000,000
kor thereabouts, of Tax Anticipation Series 268-day Treasury bills to be dated September 27j
W l , and to mature June 22, 1962, which were offered on September 12, were opened at the
Federal Reserve Banks on September 20.
The details of this issue are as follows.
Total applied for - $5,120,887,000
Total accepted
- 2,500,550,000

(includes $510,598,000 entered on a
noncompetitive basis and accepted in
full at the average price shown below)

Range of accepted competitive bids.
High
Low
Average

(Excepting nine tenders totaling $1,600,000)

98.042 Equivalent rate of discount approx. 2.630$ per annum
M
97.975
n
n
®
®
2.720$ tt "
u
97.986
«
»
•»
«
«
2.705$ "
1/

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

Total
Applied for
1 258,105,000
2,065,126,000
216.000.000
459,895,000
118,500,000
.. 218,658,000
591,779,000
134,854,000
181,265,000
119,200,000
364,070,000
393.435,000
$5,120,887,OOa

Total
Accepted
$ 138,385,000
737,395,000
131,124,000
205,875,000
70,574,000
135,238,000
432,350,000
70,579,000
118,155,000
93,954,000

265,54i,ooo
122,380,000

$2,5oo,55o,ooo

i a coupon issue of the same length and for the same amount invested, the return on
these bills would provide a yield of 2.79$. Interest rates on bills are quoted in
,», terms of bank discount with the return related to the face amount of the bills payable at maturity rather than the amount invested and their length in actual number
iW
9
of days related to a 360-day year. In contrast, yields on certificates, notes, and
bonds are computed in terms of interest on the amount invested, and relate the number of days remaining in an interest payment period to the actual number of days in
the period, with semiannual expounding if more than one coupon period is involved*
237

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__ \j

STATUTORY DEBT LIMITATION
A «„ f August 31, 1961

September 21, 1961

Section 21 of Second Liberty Bond Act, as amended, provides that the face amount of obligations issued under authority
of that Act, and the face amount of obligations guaranteed as to principal and interest by the United States (except such guaranteed obligations as may be held by the Secretary of the Treasury), "shall not exceed in the aggregate $285,000,000,000
(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 option of the holder
shall be considered as its face amount." The Act of June 30, 1961 (P. L. 87-69 87th Congress) provides that during the
period beginning on July 1, 1961 and ending June 30, 1962, the above limitation ($285,000,000,000) shall be temporarily increased by $13,000,000,000.
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
$298,000,000,000
Outstanding Obligations issued under Second Liberty Bond Act, as amended
Interest-bearing :
Treasury bills
Certificates of indebtedness
Treasury notes

.$40,927,962,000
. 5,509 ,,218,000
- 65.048.146.000 $111,485,326,000

Bonds Treasury
•Savings (current redemp. value).

- 79,653,001,250
. 47,640,4?0,800
Depositary
136,129,500
R. E. A. series
20,402,000
• i n y ^ y y y ^ , _ ^ _,
5,700'. 668 \ 000
Cert, of Incfebted.-For.Ser. ..............
Special Funds Certificates of indebtedness
Treasury notes
Treasury bonds
Total interest-bearing
Matured, interest-ceased
Bearing no interest:
United States Savings Stamps
Excess profits tax refund bonds
Special notes of the United States
Internat'l Monetary Fund series —
Internat'l Develop- Ass'n.
Total

7,391,454,000
7 , 9 6 3 ,346 , 0 0 0
30,217*837,000

133,150,671,™
450,000.000

45,572,637iooo
290,658,634,550
433,245,843

• 50,729,953
747,884
2,071t000,000
57,652,200

2,180,130,037
293,272,010,430

Guaranteed obligations (not held by Treasury):
Interest-bearing:
Debentures : F. H. A. & D C Stad. Bds._

248,424,000

Matured, interest-ceased
o0*+,950
Grand total outstanding
Balance face amount of obligations issuable under above authority
Reconcilement with Statement of the Public Debt

249,228,950

August 31*
(Date)

(Daily Statement of the United States Treasury,
Outstanding Total gross public debt
Guaranteed obligations not owned by the Treasury _

1961
.

AllgUSt 3 1 , 1 9 6 1

^

(Date)

Total gross public debt and guaranteed obligations
Deduct - other outstanding public debt obligations not subject to debt limitation

D-238

2Q3.52l.239>38(t
4,478,760,620

293,714,454,^S!
?.frQt228.9__to
293,963,683,345l
44_..443._*-h
293,521,239,38<4

STATUTORY DEBT LIMITATION
,.., Aireu-t31. 1961

^Uii
September 21, 1961

of thatAr>0n ^i °if Sfcond Liberty Bond Act, as amended, provides that the face amount of obligations issued under
a c e am
A ur a >
°unt 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 $285,000,000,000
(Act or June 30, 1959; U. S. C , title 31, sec. 757b), outstanding at any one time. For purposes of this section the current rek ti k° n v . e ,°* a n y obligation issued on a discount basis which is redeemable prior to maturity at the option of the holder
shall be considered as its face amount." The Act of June 30, 1961 (P. L. 87-69 87th Congress) provides that during the
period beginning on July 1, I96I and ending June 30, 1962, the above limitation ($285,000,000,000) shall be temporarily increased by $13,000,000,000.
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
$ 2 9 8 ,000 ,000, 0 0 0
Outstanding Obligations issued under Second Liberty Bond Act, as amended
Interest-bearing:
Treasury bills $40,927 f 962 , 000
Certificates of indebtedness
Treasury notes
;
Bonds Treasury __
•Savings (current redemp. value)
Depositary
R. E. A. series .

5,509 ,,218, 000
65,048,146,000

$111,485,326,000

79,653,001,250
47,640,470,800
136,129,500
20,402,000

Certificates of indebtedness 7,391,45^,000
Treasury notes
7 ,963,346,000
Treasury bonds
30,217.837,000
Total interest-bearing
|
;
Matured, interest-ceased
___

45.572,637,000
290,658,634,550
k$3 9 2 4 5 , 8 4 3

Bearing no interest:
United States Savings Stamps
Excess profits tax refund bonds
Special notes of the United States :
Internat'l Monetary Fund series
Internat'l Develop. Ass'n
Total

2,180,130.0^7
293,272,010,430

.

50,729,953
7^7,88*+

2,071|000,000
57,652 , 200

Guaranteed obligations (not held by Treasury):
Interest-bearing:
Debentures: F. H. A. & DC Stad. Bds._
248,424,000
Matured, interest-ceased
804,950
Grand total outstanding
Balance face amount of obligations issuable under above authority.

249.228,950
293 , 521,239 . 380
4,^78,760,620

Reconcilement with Statement of the Public Debt AUffUSt 31» lyOl
(Date)

(Daily Statement of the United States Treasury,
^

,.

)

(Date)

Outstanding Total 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

D-238

-

A u g u s t _)_., l ^ O l

293,714,45^,^15
249,228.950
293 ,963 ,683 ,365
442,4^4-3 t 9 8 5
293,521,239,380

TREASURY DEPARTMENT
WASHINGTON, D.C.
September 21, 1961
FOR IMMEDIATE RELEASE
TREASURY'S LATEST REFUNDING A SUCCESS
Acting Secretary gf the Treasury Henry H. Fowler today announced that holders
of one-half of the outstanding publicly held 2-1/2$ bonds included in the Department's latest advance refunding operation have exchanged their holdings for 3-1/2$
bonds. Subscription books for the offering were open from September 11 to 15, but
subscriptions from individuals were also accepted through September 20.
"The Treasury is very pleased with the success of the advance refunding,"
Acting Secretary Fowler said. "It represents the accomplishment of a significant
amount of debt extension, without disturbance in the market for outstanding issues
and thus achieves substantial improvement in the maturity structure of the public
debt."

&,\ Preliminary reports from the Federal Reserve Banks last night show that su
scriptions of about $3,691 million have been received to the three issues of outstanding 3-1/2$ long-term Treasury bonds included in the current offering to holde:
of the two issues of 2-1/2$ Treasury Bonds of March 15, 1965-70, and March 15,
1966-71- These subscriptions, which include $2,761 million from public holders
and $930 million from Government Investment Accounts, will be allotted in full.
Delivery of the new bonds will be made on September 29, 1961.
Subscriptions are as follows (in millions of dollars):
3-1/2 $ Bonds Maturing in
1980
1990
1998

2-1/2$ Bonds
Exchanged
1965-70
Public holders
Govt. Inv. Accts.—
Total 1965-70 —
1966-71
Public holders
Govt. Inv. Accts.—
Total 1966-71 —

567
445
1,012

$ 60k
100
704

213
35

Total

448
25
473

$1,619
570
2,189

503
61

426
264

248

564

690

1,1U2
36O
1,502

$1,260

$1,268

$1,163

$^.691

$

$

Details by Federal Reserve Banks as to subscriptions will be announced when
final reports are received.
0O0

D-239

TREASURY DEPARTMENT

o__

WASHINGTON, D.C.
September 21, 1961
FOR IMMEDIATE RELEASE
TREASURY'S LATEST REFUNDING A SUCCESS
Acting Secretary of the Treasury Henry H. Fowler today announced that holders
of one-half of the outstanding publicly held 2-1/2$ bonds included in the Department's latest advance refunding operation have exchanged their holdings for 3-l/2$
bonds. Subscription books for the offering were open from September 11 to 15, but
subscriptions from individuals were also accepted through September 20.
"The Treasury is very pleased with the success of the advance refunding,"
Acting Secretary Fowler said. "It represents the accomplishment of a significant
amount of debt extension, without disturbance in the market for outstanding issues,
and thus achieves substantial improvement in the maturity structure of the public
debt."
Preliminary reports from the Federal Reserve Banks last night show that subscriptions of about $3,691 million have been received to the three issues of outstanding 3-1/2$ long-term Treasury bonds included in the current offering to holders
of the two issues of 2-1/2$ Treasury Bonds of March 15, 1965-70, and March 15,
1966-71. These subscriptions, which include $2,76l million from public holders
and $930 million from Government Investment Accounts, will be allotted in full.
Delivery of the new bonds will be made on September 29, 1961.
Subscriptions are as follows (in millions of dollars);
3-1/:2$ Bonds Maturing in
1998
1980
1990

2-1/2$ Bonds
Exchanged
1965-70
Public holders
Govt. Inv. Accts.-Total 1965-70 —
1966-71
Public holders
Govt. Inv. Accts.—
Total 1966-71 —

604
100
704

$ kk&
473

$1,619
570
2,189

213
35
248

503
61
564

k26
264
690

1,142
36O
1,502

$1,260

$1,268

$1.16^5

$^.691

$

567
445
1,012

$

Total

Details by Federal Reserve Banks as to subscriptions will be announced when
final reports are received.
0O0

D-239

CO

TREASURY DEPARTMENT
WASHINGTON, D.C.

\ ^ 7

September 21, 1961
FOR IMMEDIATE RELEASE
WITHHOLDING OP APPRAISEMENT ON
PORTLAND CEMENT

The Treasury Department is instructing customs field officers
to withhold appraisement of?'Portland cement, other than*white,
nonstaining Portland cement, from Yugoslavia, pending a determination as to whether this merchandise is being sold in the United
States at less than fair value. Notice to this effect is being
published in the Federal Register.
Under the Antidumping Act, determination of sales in the
United States at less than fair value would require reference of
the case to the Tariff Commission, which would consider whether
American industry was being injured. Both dumping price and injury must be shown to justify a finding of dumping under the law.
The complaint in this case was received on August 31, 1961,
and was filed by the law firm of Covington and Burling on behalf
of domestic producers whose names are listed in the notice to the
Federal Register.
The dollar value of imports received during i960 was
approximately $200,000.

TREASURY DEPARTMENT

iO-1

WASHINGTON, D.C. \ J s ^ ^ /
September 21, 1961
F(OR IMMEDIATE RELEASE
WITHHOLDING OP APPRAISEMENT ON
PORTLAND CEMENT

The Treasury Department is instructing customs field officers
to withhold appraisement on Portland cement, other ttp_. white,
nonstaining Portland cement, from Yugoslavia, pending a determination as to whether this merchandise is being sold in the United
States at less than fair value. Notice to this effect is being
published in the Federal Register.
Under the Antidumping Act, determination of sales in the
United States at less than fair value would require reference of
the case to the Tariff Commission, which would consider whether
American industry was being injured. Both dumping price and injury must be shown to justify a finding of dumping under the law.
The complaint in this case was received on August 31, 1961
and was filed by the law firm of Covington and Burling on behalf
of domestic producers whose names are listed in the notice to the
Federal Register.
The dollar value of imports received during i960 was
approximately $200,000.

YEAR tm%€
BILLION mmm
m Tie $ic®m Q U A R T E R - * » I U R E A C N
A P I * O K I * A T E L Y 4 » * O BXLLXON i » « N ^ BIAINC T H I F O U R T H Q U M T C H .
H I E C O U R S E or out ECQNQHXC RECOVERY m$ mm
mmcuuxLY
INCOURACINC S I N C E PRICES HAVE XEHAXNED S T A B L E , J W C E , A L N O S T TIC
ENTIRE U S E in OUR CROSS NATIONAL PBOBUCT m$ K E N R E A L .
JMIEOVER, out INCREASE© E C O N O M I C A C T I V I T Y m
N O T M E N ACCONPANIEI

3r

-ffc-frFE CBUTXVC BUYING OS ABNORMAL BUILD-UP OF
INVENTORIES*
F L L J R I N C T I C PAST YEAR T H E MONETARY A W

FISCAL POLICIES OF TIC

IftijSTATEs HAVE BEEN BIRECTEi AT LXftXTXNC TIC EXTENT OF TIC
CLXNE~IN ECONOHXC ACTIVITY Ail AT STRENGTHENING THE FORCES OF
RECOVERY, flkONTT RECOGNITION BY 00i NOKCTABY AUTHORITIES OF THE
XHFCNDXN6 fOVNTURN IROUCKT A WXCX SHIFT OF FOLXCY FRON MONETARY
RESTRAINT TO EASE. M EARLY As JIM OF LAST TEAR, THE XE9ERAL
USEiVE BIUXEO CifffIT BEsTRICTXllRI BY REBUCXJiC DlSCOdEt RATE«I
*KB LOVER INC 1M RESERVE RSBOtRENENTS OF CONNEBCXAL UMm* KBXRAL
f VERVE PURCHASES W COVERNMENT SECURXTtEV WIOVIBEB ADOITXCffcL
NIC RESERVES TO COMBAT RECESSION AN0 FINANCE EEMN5X0N*
BEFLECTINS T«Xf EEHftAL BftlRVE POLICY* TOTAL LOANS Ait XNVESTHENTS
TV CONNEBCXAL BAfFfeB HAVE-EXPANSES IY SffiNFFEiCENT, 0R#_*
iILLXO^WW**>§>f OURINC THE PAST 12 MONTHS. JNXS LARCE INCREASE
fROVXHEfe A NAJOR FORCE iWICI! SOFTENE1 TME STffAXNS CF RECESSION
ANBSTXKULATEB PEtOVEFY.
m T M FISCAL SXBE| INCREASE! UNENPLOYHENT BENEFITS AND OTSCR
VOVDOiNENT OUTLAWS ASSOCIATED VITN TIC RECESSION** IN CONJUNCTION VXTB
XEBUCEB INCONE TAX COLLECTIONS** NAVE OKftATED AS IN PREVIOUS
RECESSION TO FROVXBE AN AUTOMATIC SUPPORTING INFLUENCE. LABCELY
AS A RESULT OF THESE *BUILT*XM STABXLXKIB*
*
THE TOTAL VALUE OF ALL mm%
AN© sEificEs P R O M C E O
mmm
TIE ECONOMIC BOVNTURN NEVER FELL APPRECIABLY SELOi THE CORRfSPONBXNC W A I T E R m rw mtmms
TEAR#
MM LNOTIi EABLXEBi VE ARE IfffCXAtLY EHCOURACED THAT OUR
RECOVEfr ANB OUR ATTAINMENT OF RECORD iff LEVELS OF PRODUCTION
mm BEEN ACCOMPANIED BY PRICE SYAglLITY* p
XNOEl ,0F tmLEsALE
fftldS NAS REMUttr* FOR THREE mm$ AT VXRTOALLY THE'SAME LEVEL,
r A I L CMfODXTY PRICES MM mm STABLE VNILE TIC OVERALL INBEX
CONSUMER

PRICES m$

XNCBEASEB BY LESS THAN

ON§/PERCENT

SINCE LAST tfTOBCR*
M E BU$X«S$ OUTLOOK FOR TRE PXTEB STATES iURINC TRE CONINC WAR
U ^ERY PRONXsXNC* EXCESSIVE STOCKS N A # SEEN LIQUXUATEB. IS A
RESULT OF f IS INC ftfflBUCTXCN AOT SAUs* INVENTORIES HAVE 0N?E f^OlE
BECINI TO INCREASE NOiEiATELY iUT Tf€Y ARE NOT NXCN IN RELATION TO
ET?HO PflXsENT OR PROSPECTIVE NEtflS. CWfUMERS HAVE REDUCE©
THEIK DENT AMD fUXLT U^ THEXB SAVXNCS* THUS STBENCTNENINC T W
CUT LOOK FOR RETAIL TBABE* JttT FINANCIAL SAVINCS OF INDIVIDUALS
ROSE »Y*r.t V X U X O N mmmt
mINT II-»«O»
E FIRST KALF OF it«i ON T O P '
INTEREST
INITIAL
or A % 0 RECOVERY
tiLLiON
lATii mm*mm
mPEftXOB*
mmirn^
RISE Mmmmmr
I N CONSTANT
CONTRAST ©URINC
T O it5i*5f
tm

DRAWING TOTALLING MORlf THAN**00 MILLION WitilBf • MERE ABE ALSO
SO STANB*tY ARRANGEMENTS IN EFFECT, V I M UNliSEB BRAVING RIGHTS
TOTALLING^!.t BILLION B#l^*§#»
-X«l»~A$«-XSTA»€a_-X^
HE-= -F*ST- YEAR--HAS
STRICTURE
OF CURRENCY T
CONVERTIBILITY
IN -4WW-ST»li0tflI3Ki*
THE INDUSTRIALISED ME-

208

COUNTRIES ANB HELPED MANY OF THE DEVELOPING COUNTRIES TO ADOPT
CR MAINTAIN PIOCtAMi OF FINANCIAL ANB MONETARY STABILISATION. T K
JUNB HAS CONE TO OCCUPY A CENTRAL POSITION IN INTER NAT ION A L *
^MONETARY AFFAIRS— A ROLE I A N CONFIDENT VILL w> OF EVER*
d*
INCREASING IMPORTANCE TO ALL OUR MEMBER COUNTRIES IN THE. YEARS
AHEAD*
A FEW YEARS AGO. ALMOST ALL DRAWINGS FROM THE £UMB VERE IN
DOLLARS. SINCE TME ADVENT OF CURRENCY CONVERT IBXLTTY IN MSTERN
PROPE, N6NEVEB, M E EUNB M S NAM GREAT ftOCBESS IN USlfS A
Thmm ummn of THE CURRENCIES A T HOLDS• THUS INCREASING T I C
KtCENTAGE OF BRAVXNGS IN CURRENCIESJJTJgjJEEiM INITfB ^ A T E f
DOLLARS. DURING THE PAST TEAR, e^VrT'llFFEiENT CURRENCIES VERE
DRAIN m m

T K

B I N D , AND T Y O * M X * D S OF T W

TOTAL DRAWINGS

VERE IN CURRENCIES OTHER THAN T K DOLLAR* THIS IS AN ENCOURACIHG
DEVELOPMENT. LT HAS NABE A REALITY OF T K CSJRIGINAL CONCEPT
OT THE EUND AT & RESERVE POOL OF HA NY CURRENCIES FOR TME SHE
® MEMBERS*
|#ST YEAR THE JUNB'S ADVISORY ACTIVITIES CONTXNUEB ON A BROAD
SCAOE. MKIEVE* fCMVCR COUNTRIES WAVE SOUGHT TO DEAL EFFECTIVELY
VITM FINANCIAL INSTABILITY*- BY STRENCtKNXNG TKXB FISCAL
RESOURCES, IY CONTROLLING MONEY ANB CREDIT, OR BY OTHERVlSE
IMPROVING TKIR FINANCIAL INSTITUTIONS— THEY NAVE iEEN ABLE TO
RELY OH TIC STAFF OF THE p N i FOR EXPERT ANB OBJECTIVE ABVICE.
X K STABILISATION PROGRAMS MANY MEMBERS OF THE £U$B HAVE WORKB
OJT~AND PUT INTO OPERATION*- USUALLY VXTH J.UNB ABVICE** NAVE AT TIMES
t£EN CRXTX2CX2EB ON THE GROUND THAT T K Y tiTVE SUPPOSEDLY
IMPOSED A CHOICE BCTVEEN STAGNATION AND ECONONIC GROVTH* I DO NOT
IttLIEVE THAT THIS IS A CORRECT AfPRAIfAL OF THE ROLE PLAY& BY
FINANCIAL STABILISATION IN ECONONIC DEVELOPMENT. L AGREE V I M TIC
OPINION EXPRESSED BY £R, JACOISSON IN HIS BRILLIANT OPENING
STATEMENT. THAT T K tkW W A VELL-BESlGNEB STABILISATION PROGRAM
IS TO ELIMINATE INFLATION, NOT ONLY AS A SOURCE OF BALANCE OF
fiYKNTS BXSHEQUILIBRXUN, BUT ALSO AS AN OBSTACLE TO ECONOMIC
GROWTH* FINANCIAL STABILITY CAN THUS ASSIST ECONOMIC GROVTH
WHICH. TOGETHER VITM SOCIAL PROGRESSy NUST K T K MAJOR OBJECTIVE
OT DEVELOPMENT POLICY.
IF COURSE, FINANCIAL STABILITY CANNOT OF ITSELF CURE ALL T K
ftOILEMS OF ECONOMIC GROVTH THAT BE«;.ET THE DEVELOPING
COUNTRIES. EFFECTIVE BEVELOPNCNT PLANNING, BASIC INTERNAL RE*
FORMS* ANB 1BEOUATE CAPITAL FROM BOTH EXTERNAL AND INTERNAL
SOURCES— ALL ARE NECESSARY* M I S IS VELL RECOGNISED BY THE JUNB,
VHICH
IS. fUARTER
AS IT SHOULD
K , WAR*
TIC mRTNER
OF ECONOMIC
DE^LOfHENT
'
TW.
FIRST
OF THIS
IN T W SECOND
QUARTER.
MAJOR
INSTITUTIONS!
NATIONAL
AND NINTERNATIONAL,
IN NATIONAL
COORDINATED
ECONOMIC
INDICATORS
IEC0RBEB
NClTNlGlfS* GROSS
PRODUCT,
IFFORTS TO
INCREASE
FLOV OF
EXTERNAL ASSISTANCE
ANDALL
TO HELP
JtflSONAL
INCOME,
AND TME
KRSOMAL
CONSUIfFTI'OS
EXPENDITURES
THE
DEVELOPING
COUNT!
XXS
MAKE
THE
BEST
USE
OF
TIC
It
OWN
REACHED FRESH dm
IN T K £?fIL-iUNE PERIOD. TOTAL INDUSTRIAL
DOMESTIC
RESOURCES*
IROBUCTION RECORDED A NE¥ BTXIS N IN "JULY AND AGATN IN AUG^T. ME
JL TURNTHAT
NOM m(m
TO T WNATIONAL
ECONOMY ^ODUfT—
OF TIC JMTED
JlTATES
T K ANSTATUS
ESTIMATE
VHICH
JUMPEDAND
FROM
tNN
OT lit
FAHiRrs.
RATE
OF INTERNATIONAL
JUST 0v^.-o — BALANCE
BILLION OF
BQte&Ss
AT T K- KGtNNINfi «r%ur
I
K
RECOVERY
OF
T
K
piTEB
SJATES»
ECONOMY,
TK
STRONGLY*
KUBEST OFMOUR
E LOV
P03T*VAXirECESStONS
POINT IN ECONOMIC IS
ACTIVITY
VELL
UNDER
M SFOLLOWING
VAY
REACHED
AND MOVING
IN

1 K B A EUF/RTT »/2<yit tl U O AM

307
KREiXTH EUROPEAN VXRELESS FILE NO 230 FBI SEPT 20» 1 M I
EUF $3
BUDGET C20>
IN SIGHTS
TEXT I DILLON SPEECH AT V O R U BANK, IMF MEETING (MOO*
FORD COLUtfl C«HO) ITEM

%

$/iwm m
m i4 —
TEXTL DILLON SPEECH AT VCNLB BANE, IMF MEETING CM00)
PREPARED
- _-

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fiSf!^^

ONCELAST
AGAIN
IN T
GRACIOUS
HENNA*
JINCf
MY
VISIT
A KLITTLE
MOREAND
THANSTORIED
A YEAR CITY
AGO,OF
I 11
VE SECT
FRESH
EVIDENCE OF C10VTM AND CHANCE** CHANCE THAT RfHiCTS THE INDUSTRY,
T K IMAGINATION* AND T K INITIATIVE OF T K _«BT1IAN PEOPLE*
T K STABILITY OF T K IVNT1XAN £RVE*NHEtlT XN~1NttTVAR
VEABS** T K EXTENT OFHIJSTRIA'S' REMA1XA1LE ECONOMIC RESURGENCE**
T K UNSVERVXNG BEV0T1OI OF T K AlfMXAN KOPLE TO DEMOCRATIC
ffXNCIPLES— ALL ARE FEATURES OF MODERN PSTRIA THAT COMMAND ®M
RESPECT* M I S SHALL NATION** THIS REVERED CRADLE OF THOUGHT AND
CULTURE— THIS COURAGEOUS OUTPOST ON T K FRONTIERS If FREEDOMHAS AROUSED T K ADMIRATION OF FREE MEN EVEtYVKRE* ON BEHALF OF
MY GOVERNMENT— ON BEHALF OF T K fRESlBEMT OF T K plTEB STATES,
VHO RECALLS WITH PLEASURE T K VAIN HOSPITALITY K ffccEIVEI K R E
lAST 4NNE«*> I VISH TO SAY THAT ft CONSIDER HENNA TO BE A
MOST AUSPICIOUS SETTING FAN TIE IMPORTANT V®SSC UPON WHICH VE ARE
EMIARKED.
DURING T K PAST YEAR T K INTERNATIONAL MONETARY JUNO, UNDER
YK-BISTXNCUISKB LEADERSHIP OF MEN JACOBSfON* MAS M A I N
DEMONSTRATED ITS VITAL IMPORTANCrTO^ORLi MONETARY STABILITY AND
ECONOMIC GROVTH.
T K ROLE OF T K JiNi Is KING FtHTKR ENHANCED AT TNXf MEETING
VHEWE VE HAVE T K PRIVILEGE OF VEUOMXNC TO OUR DELIBERATIONS
TEN NEV COUNTRIES** T K LARGEST INCREASE IN A SINGLE TEAM'S
OPERATIONS
SINCE
K gUNB.
FUND'S
INCEPTION*
IT THAT
ISMUX
A HAS
PARTICULAR
—BRAVING
FOR
mm
SJMCT
ME
DRAVN
TO
VE
BYVELCOHE
MET
MFROM
l A~YEAI
tiMTTfH
TTKTO
OUR
AGO
mmsttw.
MIDST
IN
IMA!!!
KASNXNOTOIUU*
OUR
W T PART
CO0i~FRIEMBS
n OTKR
OF
MEMBER
ON
FROM
DatilftRl
COUNTRIES
THEC YRECENT
W SPLEASURE
, HAS
MAtir

*> *#fc VELL AVARS THAT T K POSITION OF T K DOLLAR AS A STRONG
RESUVE CURRENCY DEPENDS UPON OUR. SUCCESS IN *A-*M*I!! C *,.._-,,
REASONABLE EBtflLXMIUM OVER T K YEARS IN OUR GLANCE OF PAYMENTS*
S I S VE ARE DETERMINED TO DO* AS IE SUCCEED, THE JWfOT
END IN THE ACCUMULATION OF fill AND DOLLARS BY W K R COttlTRXES
TAKEN TOGETHRER VILL NECESSARILY BE SLOVED* ^ E L I M I N A T I O N
® CURRENT PAYMENTS IMBALANCES CAN, OF GOUNSEt * SUBTLY
FACIUTATED BY T K COOPERATION OF SURPLUS C g N W I f S JN W W W N C
LIBERAL TRADE POLICIES. IN INCREASING L§NC*YERM BEVEUPWENT
ASSISTANCE, AND IN SHARING EXPENDITURES FOR T K
COMMON DEFENSE IN ACCORDANCE V I M T K I R CA ABILITIES.
ipiiG T K PAST W A R . AS tt* 4AC0WS0N HAS W«!S*f5JHLL»__».f
TEER MAS K E N ACTIVE BXSCtftsl'ON"ANN EXAMINATION IN C O K i M W W A L
CIRCUS, AMONG ECONOMISTS j AND IN T K FINANCIAL RBESStOF T K
ADEQUACY OF EXISTING INTERNATIONAL MONETARY ARiANGEMENTS* 1 W I
DISCUSSIONS HAVE K E N VENT HELPFUL* BR* 4.COBSSON fig NOV l»OPOSED
THAT EACH OF T K HINCIPAL ENBttSTRXAE COUNTRIES COMMIT IpELF
TO LEND ITS CURRENCY TO T K FUND l^f TO A STATED AMOUNT* 1
STRONGLY AGREE THAT Ai ARRANGEMENT OF M I S SORT BBOBU BE
VORXEB OUT TO ENSURE T K fUNB ACCESS TO T K ADDITIONAL.AMOUNTS
THAT WOULD K NEEDED StitUEB BALANCE OF PAYMENTS 1 ^ 0 « • *
INVOLVING TNESE COUNTRIES EVER IMPAIR OR THREATEN TO IMPAIR
T K SMOOTH FUNCTIONING OF T K VOILB PAYMENTS SYSTEM*
AT T K SAME TIME, FOR ITS REGULAR REiUIREMENTSt THE { W B CAN,
AMD "SHOULD BE EXKCTED TO BONBON FROM ONE OR ANOTKf O F ^ K
mBTXCIMATING OOIMTBIES UNDER ARTICLE BJLiKNEVER ITS SUPPLY
OF ANY OF MSESE PARTICULAR CURRENCIES D R O M E S LOV. J T VOULD
ALSO APPEAR SEASONABLE TO CONSIDER T K POSSIBILITY •*
m_
THAT SUCH LOAMS VE CREDITED AGAINST ANY COMMITMENT VHICH T K
IENBXNG COUNTRY MAY HAVE UNDERTAKEN AS ITS PART OF T K MULTI*
IATEBAL ARRANGEMENT* I K S E SPECIAL BILATERAL BORROWINGS VOULD
mm REPLENISH M E P§B*S SUPPLY OF PARTICULAR CURRENCIES IN
STRONG DEMAND AND, IN THIS WAY, VOULD K L P TO AVOID UNDUE
BRAINS ON ITS GOLD RESERVE*
" X N A V E NO FIXES OPINIONS ON T K DETAILS OF T K MULTILATERAL
HRtNn*XN_HAMAl^
-ME- < •ENCOURAGING VIEWS L HAVT MEABB EXPRESSED IN T K PAST FEV BAYS—
THAT PRACTICAL NEANI CAN RE FOUND TO GIVE EFFECT Tt T K AGREEMENT
IN RNXNCIfU VHICH SO EVIDENTLY EXISTS* J K R E ARE FOUR
IMPORTANT ASPECTS NIXCHX DO VtSH TO EM1»M_ISE*
FIRST, T K AGGREGATE AMOUNT T K PARTICIPATING COUNTRIES
SlfflLB LOOM FORVARD TO COMMITTING TO T K PROJECT SHOULD BE URGE
XMOU6M TO ADD DECISIVELY TO T K JEtMB'S CAPACITY TO H A Y ITS
HtSENTIAL ROLE.
SECOND, TO BE EFFECTIVE, T K ADDITIONAL RESOURCES MUST BE
PROMPTLY AVAILABLE XN CASE OF NEED.
M I R D , SAFEGUARDS WILL HE BEQUXREB TO ENSURE THAT T K R E VILL
M EFFECTIVE' CONSULTATION BCTVEEN TNE J I M AND T K LENDERS, AND
THAT T K ENNB VILL ONLY ACTUALLY BORROW UMBER T K COMMITMENT
ARRANGEMENTS AFTER TAXING FULL ACCOUNT OF T K CURRENT RESERVE
fOSXTION OF T K LENDING COUNTRY. IN ADDITION, EACH COUNTRY
VHICH ACTUALLY LENDS TO T K FUND SMOULD, IN CASE T K NEED
DEVELOPS, BE AB_C AUTOMATICALLY TO OBTAIN REPAYMENT FROM T K FUND.
EONRTfL I CONCUR IN tfU i|COBl$ON#S JUDGEMENT THAT T K R E MUST
K M VfEAlAlNO or T K -POLICIES T H A T HAVE G U I D E D T K E U N D IN
T
K JMXS
USE
OF
ITS
RESOURCESf
NOR
SH#OULD
T
NIV
ARRANGEMENT
T
BEOkBBS
COURSE
TNE
BILL
THE
HAVING
WNTS
JNNBi
CARRY
MAT
CURRENCIES.
COI^TRIES
XN
IN
KJ.PEAXING
ITS
ANY
ULTIMATE
NEV
tmt
OBTAIN
TIEN
EARLY
TBOTH
A
OF
CURRENT
VAY
KTHE
VORLD
If
BISECT
VORLB
FREE
CLEAM.Y
IN
PROJECT
FOR
TNE
T
AN
AS
VORX
NEXT
KOUTCOME
mmn
IBBANEBs
UMJMT
WORLD
MY
VILL
NECESSARY
EXISTING
CONSULTATIONS
PAND
CONVERTIBLE
YEAR.
IN
COUNTBT
TO
BE
THAT
VHICH
IMPORTANT
KGROWTH
WCOMPLETION
XN
PROJECT*
OF
JHTH
fUlfTANTIALLY
OUR
TRIGHTS
AUEOlSUTlVE
CURRENCIES
KVE
IPOSITION
DELIBERATIONS
THIS
AND
EXECUTIVE
VANT
ARE
CURRENCIES.
VfTH
T
BEARING
AND
K$0
PROGRESS.
ENGAGED
DONE,
TO
THE
EUii
M
DUTIES
TO
AND
ASTRENGTKNED*
SAY
AUTHORITY
TUPON
BOARD
PROSKCTIVE
MEET
$Mim
TKT
AS
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KKI
OF
KCAUSE
RT
MONETARY
IBOVXBERS
E
MAY
THAVE
PARTICIPATING
KKMfERS
KT
IN
PUSH
FOTURE
FROM
KCHANCING
JflNNA
CONFIDENCE
UNITED
JLMAVE
LENDING
JOB
AHEAD
SYSTEM
TOF
OF
K ITRAf
TKSTATES
NEEDS
CONFIDENCE
PROMPTLY
KCHANGE
COUNTRIES
PARLIA*
OF
FUNB
IN &*.
, ^>

AT A SEASONALLY ADJUSTED ANNUAL RATE OF4*! BILLION
1HESE DEVELOPMENTS ARE BEFLECTED B O M IN OUR "BASIC • POSITION
COMfllsIIiSC ALL OF OUR RECORDED TRANSACTIONS EXCLUSIVE OF
S I T E D STATES PRIVATE SHORT-TERM CAPITAL OUTFLOV AND IN OUR OKR<
L P A W N T S POSITION. IN If SO T K BASIC DEFICIT AMOUNTEB TO
? U B BiaiON BOUA*»# COMPARED VXTW<€*3 BILUON MMM®
IN If ft
3C
7
AND#3.i BILLION DOLLARS IN it5S* IH T K FIRST HALF OF if it T K
BASIC POSITION CONTINUED T K SUBSTANTIAL IMPROVEMENT SNOVN IN
IB€0 AND, WITHOUT COUNTINO SKCIAL PREPAYMENTS O F ^ 0 O MILLION
BiifeNBS ON-NNXTEB STATES GOVERNMENT LOAMS* VAN ALMOST EXACTLY
IN BALANCE m i B OVERALL DEFICIT. VHICH Ii MEASURED BY DECREASES
IN M I T E S flTftSS HOLDINGS OF COLD AND CONVERTIBLE CURRENCIES
l U r i N O H U l S S IN FOREIGN U M I B JMSINNS OF PITID STATES DOLLARSVHXCH YOCETKR AMOUNTED TO AIOiT# BILLION BOSLAiS ft" BOTB I Off
AND if*©-* WAS BBNNXNS AT A SEASONALLY ADJUSTED ANNUAL RATE SOME*
VHAT I M N E R 4 M BILUON DOLLARS IN T K FIRST HALF OF IBit* £ K
FIGURE OFA.f BILUON BftftMS ALSO DOES NOT COUNT AS A RECEIPT
T K SPECIAL DEBT PRE^PAYNENTS OMOSO MILLION Bi'LfcABlfr*. JglLE THIS
TK"taITEi
fTATES CAN RELAX
ITS EFFORTSSHORT-TERM
TO ACHIEVE
A SATISFACTORY
INDICATES CONTINUATION
OP SUISTANTIAL
CAPITAL
OUTFL0VS*
AND
fSBUUBU~SftU!L!SBItm
IN
IIS
BALANCE
OF
PAYMENTS*
«
MIST
HAVE
T K S E MOVEMENT HAVE REPRESENTED, FOR T K MOST PART, A SUBSTANTIAL
A LARGE
AND GROfING
EXPORT SURPLUS
OF GOODS
AND
SERVICES
PAY
?m
MILITARY-EXPENDITURES-ABROAD.
VilCHWf
F ^ TSTATES
K "it
DEFENSE
OF T K
ENLARGEMENT
OF T K FINANCING
OF VORLD
TRADE INCUR
BY UNITED
BANSXNC
FttE
VORLD* IE
VELL<ft£rPOi IN
BOTH
THAT PORTION OF OUR
INSTITUTIONS
ANDMUST
HAVEHAVE
NOT ITWWAS SKCULATIVE
CftBACTSt*
FOREIGN
THAT DEVELOPMENTS*
Is NOT COVERED BSE
BY TPROCUREMENT
INESE AID
ARETfcOCRAM
ENCOURAGING
K Y DO NOT KINA NT KM A T
flflD STATES AND FOR OUR CONTINUING LARGE ONTFLON OF L§NC*TERM
IVATE'DEVELOPMENT CAPITAL*
I K IMPROVEMENT IN OUR TRADE SURPLUS SO FAR THIS YEAR CANNOT
BE ff KCTEB TO CONTINUE IN T K MONTHI A K A D , SINCE IT HAS
ACCOMPLISKB^OIE THROUGH A DECREASE IN IMPORTS M A M THROUGH AN
_ AND NOV AS T K ISfXTEB STATES * ECONOMY MOVES TOVARD
•BLT FULL EMPLOYMENT OF REsOUiflit VE^UST LOOK TO A
INC EXPANSION OF OUR IMPORTS* INDIE©* T K Y t»VE ALREADY
rARTEB? TO GROV. 1MXLE THIS TENDS TO SHA?PE M OUR PAYMENTS
tOiLEM IT ALSO LflDS TO LARGER WORLD TRADE AND GREATER PROS FERITY
rOR OUR TRADING PARTNERS*
ACCORDINGLY, VI MUST CONTINUE TO M A K INTENSIVE EFFORTS TO
KffftB OUR EXPORTS. IRIS MEANS TOR US* AS IT DOES FOR ANY NATION,
/THAT VI MUST CONSTANTLY IMPROVE T K PRODUCTIVITY IN
VHICH T K ABILITY OF OUR FROBUCEBS TO COMPETE IN VOiLD MARKTS
IS RISEN* P ALSO REOUXRSS THAT VE PREVENT INCREASES IN MONEY COSTS
mm CANCELLING OUT IMPROVEMENTS IN PRODUCTIVITY* JT T K SAME TIME,
OUR UtOBUCERS MUST SEARCH OUT EXPORT OPPORTUNITIES"VITH E K R C Y
AND IMAGINATION* TNE DOMESTIC MARKET OF T K J.NXTEB STATES IS
A VERY LARGE ONE JOT MANY OF OUB PRODUCERS NEBS TBATXTIONALLT
THOUGHT ALMOST EXCLUSIVELY IN TERMS OF THAT MARKET, RATKR M A M OF
OPPORTUNITIES OVERSEAS*
J£ BELIEVE THIS ORIENTATION CAN AND MUST K SHIFTED, FOR T K R E
SEERTSURELY
BRANN FROM
T K F OF
P U *OUR
I MAJOR
PART OF THAT IAS TIE SICINT
XBE
THOUSANDS
PRODUCERS
VHO CAN BE MORE SUCCESSFUL IN T K EXPORT FIELD THAN T K Y
RAVE
BEEN
TATTENTION
K FAST.
XT
ISOUR
FORTO
THIS
REASON
M---A T OUR
GOVERNMENT
ABROAD
IS . •DEVOTING
*»
*f»**
TO -"-'
TINKCONSIDERABLE
"
OF
'EFFORT
~ ""•BUSINESS
— * ^BRINGING
- "
COMMUNITY*
- ••MARKET
OPPORTUNITIES

IMPS W%4KS& W£^MM n^^mWS^^

B O W IN OUR. ECONOMY FOR FURTKR EX PINS ION SHOULD AVERT ANY
INFLATIONARY PRESSURES THAT MIGHT OTKRVISE DEVELOP. FOB VE
HAVE NO SHORTAGE Of PRODUCTIVE RESOURCES, NEARLY ALL W OUR
INDUSTRIES ARE OPERATING VILL KLOV CAPACITY AND T K LABOR SUPPLY
IS AMPLE* j*0»YIMiJEB RISES XN OUTPUT SHOULD MATERIALLY ASSIST US IN S<
T K PERSISTING PROBLEM OF RELATIVELY HIGH UNEMPLOYMENT* J.VER*
TMELESS, VI ARE DEVELOPING VORKR RETRAINING PROGRAMS *DESIGNED TO ATTACH THIS PRO BEEN DIRECTLY.
EIBERAL BUDGET EXPENDITURES REMAIN VELL VITHIN OUR. CAPACITY*
IN FlGTi T K DEFICIT FOR FISCAL YEAR If SI AND T K PROJECTED
KFICIY FOR IRS2 ARE TOGETHER MUCH SMALLER THAN T K DEFICITS
DURING T K LAST COMPARABLE RECESSION AND RECOVERY IN ifff
tfft. AFTER TAXING INTO ACCENT ALL PRESENTLY SCMEBNLEB EX BEN*
BITUREf, INCLUDING T K SBSSTAKTXALLT INCREASED OUTLAYS FOR
BEFENSE BEBUESTEB BY fffSlBEtiT KNNEBY IN JULY,
OUR EBTXNATtt ROXffT Y # I BEPXCirTHXs YEASrortSCAL tf«2) M A T
VILL AMOUNT TO ABOUT HALF T K DEFICIT FOR FISCAL If St. IN
ADDITION, OUR CROSS NATIONAL PRODUCT VILL RUM SOME IT PERCENT
NIC K R TWIN IN FISCAL YEAR I Off* AND OUT? TAX REVENUES VILL
M ABOUT 21 PERCENT GREATER* KNCE* T K ECONOMIC IMPACT OF T K
CURRENT DEFICIT VILL BE CONStBERARLT LESS THAN HALF THAT OF T K
tfSS DEFICIT.
---—--1MH_»I0^
-hZ
KFftCTION OF T K sMNRTHfALL OF REVENUES RESNLTXNS fNOM T K RECENT
RECESSION* M I S IS A CHARACTERISTIC OF OUR TAX SBTEM^JIgCAUSE
IT IS HEAVILY BEICNBENT Ufm DIRECT TAXATION OF
mnmSlrmr
BUSINESS INCOMEt JUNR T K SAME REASON VE MAY EXPECT SHARP
INCREASES IN REVENUES AS liSXKSS XMftOViS AND T K ECONOMY
CROVS. £ K CALENDAR YEAR I f « GIVES EVERY PROMISE
OT KING A VERY GOOD YEAR FOR BttlMESS* AND SINCE OUR REVENUES
ARE BASED UPON EARNINGS OF TK' PREVIOUS YEAR. VE CAN CONFIDENTLY
l§m FOiVAtB TO A SUBSTANTIAL XNOBEASE' IN Oil INCOME DURING T K
F I S C A L YEAR it a * V H I C H BEGINS NEXT _fULY is** U I C A L IS m
LjfXLL BE CICELY COMPARABLE IN T K BUfflMESS twSTTO
FISCAL
UOO* VREN FEDERAL REVENUES J U N K B A o BILUON DOLLARS OVER T K
MlfciDING YEAR* mm%* UNLESS A Mm
ARISES FOR FURYKB
INCREASES IN DEFENSE OUTLAYS, T K BALANCED BUB6ET VHICH RESIDENT
NENNEBT is DETERMINED TO SBRNXT K I T JANUARY CAN BE ACHIEVED
ffMOUT ANY INCREASE IN TAXES. JfOVEVEff SHOULD ADDITIONAL BEFENSE
EXPENDITURES BECOME NECESSARY, T K RMSSXBEMT HAS STATED
CLEARLY AND UNOUIfOCALLY THAT K IS T H E PARED TO REtUEsT
ADDITIONAL TAXES SBOULB T K Y K REOUI1XB TO GLANCE T K SUDTET*
I WOULD L I K TO EMPHASISE T K FIRMNESS OF OUR DECISION TO
BALANCE mm BUDGET IN FISCAL ltd* INDEED* HAD IT NOT K E N FOR T K
INCREASE IN INTERNATIONAL TENSIONS OVER BERLIN, VHICH FORCED
IB TO INCREASE OUI DEFENSE EXPENDITURES fOBSTAMTIALLY ABOVE T K LEVELS
ItEVIOUSLV PLANNED. VE COULD WIVE LOOKS FOBVABB CONFIDENTLY
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311
TREASURY DEPARTMENT
Washington
September 21, 1961
Following is the text of an address of the Honorable Douglas Dillon,
Secretary of the Treasury and United States Governor of the International
Monetary Fund and the International Bank, at the Annual Meetings of the
Boards of Governors, Vienna, _____*_ Austria, Wednesday, September 20, l°6l_

TREASURY DEPARTMENT
Washington

312
September 21, 1961

FOLLOWING IS THE TE}_T OP AN ADDRESS OF THE HONORABLE
DOUGLAS DILLON, SECRETARY OF THE TREASURY AND UNITED
STATES GOVERNOR OF THE INTERNATIONAL MONETARY FUND
AND THE INTERNATIONAL BANK, AT THE ANNUAL MEETINGS OF
THE BOARDS OF GOVERNORS, VIENNA, AUSTRIA, WEDNESDAY,
SEPTEMBER 2 $ 1961
First, let me say how delighted I am to be once again in the
gracious and storied city of Vienna. Since my last visit a little
more than a year ago, I have seen fresh evidence of growth and
change — change that reflects the industry, the imagination and the
initiative of the Austrian people. The stability of the Austrian
Government in postwar years — the extent of Austriafs remarkable
economic resurgence — the unswerving devotion of the Austrian people
to democratic principles — all are features of modern Austria that
command our respect. This small nation — this revered cradle of
thought and culture — this courageous outpost on the frontiers of
freedom — has aroused the admiration of free men everywhere. On
behalf of my government '— on behalf of the President of the United
States, who recalls with pleasure the warm hospitality he received
here last June — I wish to say that we consider Vienna to be a
most auspicious setting for the important work upon which we are
embarked.
During the past year the International Monetary Fund, under the
distinguished leadership of Per Jacobsson, has again demonstrated
its vital importance to world monetary stability and economic growth.
The role of the Fund is being further enhanced at this meeting
where we have the privilege of welcoming to our deliberations ten
new countries -- the largest increase in a single year's operations
since the Fund's inception. It is a particular pleasure for me to
welcome to our midst our good friends from Cyprus, Laos* Liberia,
Nepal, New Zealand, Nigeria, Portugal, Senegal. Sierra Leone and
Togo.
Since we met a year ago in Washington, $2.4 billion has been
drawn from the Fund. A major part of that was the recent drawing by
the United Kingdom, but 21 other member countries made drawings
totalling more than $900 million. There are also 20 stand-by
arrangements in effect, with unused drawing\rights totalling $1.2
billion.
\
Fund assistance in the past year has both strengthened the
structure of currency convertibility in the industrialized countries
and helped many of the developing countries to adopt or maintain
programs
of financial and monetary stabilization. The Fund has come
D-240
to occupy a central position in international monetary affairs —

- 2-

oX^

a role I am confident will be of ever-increasing importance to all our
member countries in the years ahead.
A few years ago, almost all drawings from the Fund were in dollars.
Since the advent of currency convertibility in Western Europe, however,
the Fund has made great progress in using a larger number of the
currencies it holds, thus increasing the percentage of drawings in
currencies other than United States dollars. During the past year, 11
different currencies were drawn from the Fund, and two-thirds of the
total drawings were in currencies other than the dollar. This is an
encouraging development. It has made a reality of the original concept
of the Fund as a reserve pool of many currencies for the use of members.
Last year the Fund's advisory activities continued on a broad
scale. Wherever member countries have sought to deal effectively
with financial instability — by strengthening their fiscal resources,
by controlling money and credit, or by otherwise improving their
financial Institutions — they have been able to rely on the staff
of the Fund for expert and objective advice.
The stabilization programs many members of the Fund have worked
out and put into operation — usually with Fund advice — have at
times been criticized on the ground that they have supposedly imposed
a choice between stagnation and economic growth. I do not believe
that this is a correct appraisal of the role played by financial
stabilization in economic development. I agree with the opinion
expressed by Mr. Jacobsson in his brilliant opening statement: that
the aim of a well-designed stabilization program is to eliminate
inflation, not only as a source of balance of payments disequilibrium, but also as an obstacle to economic growth. Financial
stability can thus assist economic growth which, together with social
progress, must be the major objective of development policy.
Of course, financial stability cannot of itself cure all the
problems of economic growth that beset the developing countries.
Effective development planning, basic internal reforms, and adequate
capital from both external and internal sources — all are necessary.
This is well recognized by the Fund, which is, as it should be, the
partner of economic development institutions, national and international, in coordinated efforts to increase the flow of external
assistance and to help the developing countries make the best use of
their own domestic resources.
I turn now to the economy of the United States and the status
of our international balance of payments.
The recovery of the United States' economy, following the mildest
of our post-war recessions is well under way and moving strongly. The
low point in economic activity was reached in the first quarter of
this year. In the second quarter, major economic indicators
recorded new highs. Gross national product, personal income, and
personal consumption expenditures all reached fresh peaks in the

- 3April-June period. Total industrial production recorded a"-new high
*?. {* y a n d again in August. We estimate that gross national product which jumped from an annual rate of just over $500 billion at the
beginning of the year to $5l6 billion in the second quarter -- will
reach approximately $5^0 billion during the fourth quarter. The
course of our economic recovery has been particularly encouraging
since prices have remained stable. Hence, almost the entire rise in
our gross national product has been real. Moreover, our increased
economic activity has not been accompanied by speculative buying or
abnormal build-up of inventories.
During the past year the monetary and^fiscal policies of the
United States have been directed at limiting the extent of the decline
in economic activity and at strengthening the forces of recovery.
Prompt recognition by our monetary authorities of the impending downturn brought a quick shift of policy from monetary restraint to ease.
As early as June of last year, the Federal Reserve relaxed credit
restrictions by reducing discount rates and lowering the reserve
requirements of commercial banks. Federal Reserve purchases of
government securities provided additional bank reserves to combat
recession and finance expansion. Reflecting this Federal Reserve
policy, total loans and investments of commercial banks have expanded
by 7 percent, or $14 billion, during the past 12 months. This large
increase provided a major force which softened the strains of recession
and stimulated recovery.
On the fiscal side, increased unemployment benefits and other
government outlays associated with the recession — in conjunction
with reduced income tax collections — have operated as in previous
recessions to provide an automatic supporting influence. Largely
as a result of these "built-in stabilizers," the total value of all
goods and services produced during the economic downturn never fell
appreciably below the corresponding quarter of the previous year.
As I noted earlier, we are especially encouraged that our
recovery and our attainment of record new levels of production have
been accompanied by price stability. Our index of wholesale prices
has remained for three years at virtually the same level. Retail
commodity prices have been stable while the over-all index of
consumer prices has increased by less than 1 percent since last
October.
The business outlook for the United States during the coming year
is very promising. Excessive stocks have been liquidated. As a
result of rising production and sales, inventories have once more
begun to increase moderately but they are not high in relation to
either present or prospective needs. Consumers have reduced their
debt and built up their savings, thus strengthening the outlook for
retail trade. Net financial savings of individuals rose by $7.7
billion in the first half of 196l on top of a $10 billion rise in
constant
I960. Induring
contrast
theto
initial
1958-59*
recovery
Interest
period.
rates have remained remarkably

Q1 £
v ^ _- --»•

- 4 We anticipate further vigorous growth. The substantial room in
our economy for further expansion should avert any inflationary
pressures that might otherwise develop. For we have no shortage of
productive resources, nearly all of our industries are operating well
below capacity and the labor supply is ample. Continued rises in
°£ tp T should materially assist us in solving the persisting problem
of relatively high unemployment. Nevertheless, we are developing
worker retraining programs designed to attack this problem directly.
Federal budget expenditures remain well within our capacity. In
facx, the deficit for fiscal year 1961 and the projected deficit for
1962 are together much smaller than the deficits during the last
comparable recession and recovery in 1958-1959. After taking into
account all presently scheduled expenditures, including the
substantially increased outlays for defense requested by President
Kennedy in July, our estimates point to a deficit this year (fiscal 1962)
that will amount to about half the deficit for fiscal 1959. In
addition, our gross national product will run some 17 percent higher
than in fiscal year 1959* and our tax revenues will be about 21
percent greater. Hence, the economic impact of the current deficit
will be considerably less than half that of the 1959 deficit.
The deficits in fiscal 1961 and 1962 are essentially a reflection
of the short-fall of revenues resulting from the recent recession.
This is a characteristic of our tax system because it is heavily
dependent upon direct taxation of personal and business income. For
the same reason we may expect sharp increases in revenues as business
improves and the economy grows. The calendar year 1962 gives every
promise of being a very good year for business, and since our
revenues are based upon earnings of the previous year, we can
confidently look forward to a substantial increase in our income
during the fiscal year 19^3* which beings next July. Fiscal 1963
will be closely comparable in the business cycle to fiscal i960, when
federal revenues jumped $10 billion over the preceding year. Hence,
unless a need arises for further increases in defense outlays, the
balanced budget which President Kennedy is determined to submit next
January can be achieved without any increase in taxes. However,
should additional defense expenditures become necessary, the President
has stated clearly and unquivocally that he is prepared to request
additional taxes should they be required to balance the budget.
I would like to emphasize the firmness of our decision to balance
our budget in fiscal 1963. Indeed, had it not been for the increase
in international tensions over Berlin, which forced us to increase
our defense expenditures substantially above the levels previously
planned, we could have looked forward confidently to a substantial
budgetary surplus in fiscal 1963. We are resolute in our
determination to maintain both a sound and an expanding economy so
that
the United
States
may
play
itsat
full
in
the meet
defense
development
requirements
of
ofthe
an
free
increasing
world
population
and,
thepart
at
same
home.
time,
the and the

QIC

- 5-

\J -L w

I am glad to be able to report that the United States balance of
payments has developed in a much more satisfactory manner this year
than in i960. The marked improvement in our merchandise account
during i960 continued into 1961 and the large speculative outflows of
short-term capital, which swelled the volume of our outpayments
in the second half of i960, have ceased. Our merchandise trade
surplus in i960 amounted to $4.7 billion, whereas in 1959 it has been
less than $1 billion. In the first half of 1961 our trade surplus
was running at a seasonally adjusted annual rate of $6 billion.
These developments are reflected both in our "basic" position
comprising all of our recorded transactions exclusive of United
States private short-term capital outflow and in our over-all
payments position. In i960 the basic deficit amounted to $1.9
billion, compared with $4.3 billion in 1959 and $3.6 billion in 1958.
In the first half of 1961 the basic position continued the substantial
improvement shown in i960 and, without counting special prepayments
of $650 million on United States government loans, was almost exactly
in balance. Our over-all deficit, which is measured by decreases in
United States holdings of gold and convertible currencies plus
increases in foreign liquid holdings of United States dollars —
which together amounted to about $4 billion in both 1959 and i960 —
was running at a seasonally adjusted annual rate somewhat under
$1.7 billion in the first half of 1961. The figure of $1.7 billion
also does not count as a receipt the special debt prepayments
of $650 million. While this indicates continuation of substantial
short-term capital outflows, these movement have represented, for the
most part, a substantial enlargement of the financing of world trade
by United States banking institutions and have not been speculative
in character.
These are encouraging developments but they do not mean that the
United States can relax its efforts to achieve a satisfactory and
durable equilibrium in its balance of payments. We must have a
large and growing export surplus of goods and services to pay for
military expenditures abroad, which we incur for the defense of the
free world. We must have it as well
for both that portion of our
foreign aid program that is not covered by procurement in the United
States and for our continuing large outflow of long-term private
development capital.
The improvement in our trade surplus so far this year cannot be
expected to continue in the months ahead, since it was accomplished
more through a decrease in imports than through an increase in
exports and now as the United States' economy moves toward
reasonably full employment of resources, we must look to a corresponding expansion of our imports. Indeed, they have already started to
grow. While this tends to sharpen our payments problem it also
leads to larger world trade and greater prosperity for our trading
partners.

- 6Accordingly, we must continue to make intensive efforts to
expana our exports. This means for us, as it does for any nation,
tnat we must constantly improve the productivity on which the ability
ol our producers to compete in world markets is based. It also
requires that we prevent increases in money costs from cancelling out
improvements in productivity. At the same time, our producers must
search out export opportunities with energy and imagination. The
domestic market of the United States is a very large one and many of
our producers have traditionally thought almost exclusively in terms
of that market, rather than of opportunities overseas.
We believe this orientation can and must be shifted, for there
are surely thousands of our producers who can be more successful in
the export field than they have been in the past. It is for this
reason that our government is devoting considerable effort to bringing market opportunities abroad to the attention of our business
community.
,
We are well aware that the position of the dollar as a strong
reserve currency depends upon our success in maintaining a reasonable
equilibrium over the years in our balance of payments. This we are
determined to do. As we succeed, the upward trend in the accumulation
of gold and dollars by other countries taken together will necessarily
be slowed. The elimination of current payments imbalances can, of
course, be greatly facilitated by the cooperation of surplus countries
in pursuing liberal trade policies, in increasing long-term development assistance, and in sharing expenditures for the common defense
in accordance with their capacilities.
During the past year, as Mr. Jacobsson has reminded us, there has
been active discussion and examination in governmental circles, among
economists, and in the financial press, of the adequacy of existing
international monetary arrangements. These discussions have been
very helpful. Mr. Jacobsson has now proposed that each of the
principal industrial countries commit itself to lend its currency to
the Fund up to a stated amount. I strongly agree that an arrangement
of this sort should be worked out to ensure the Fund access to the
additional amounts that would be needed should balance of payments
pressures involving these countries ever impair or threaten to impair
the smooth functioning of the world payments system.
At the same time, for its regular requirements, the Fund can,
and should be expected to borrow from one or another of the
participating countries under Article VII whenever its supply of any
of these particular currencies becomes low. It would also appear
reasonable to consider the possibility that such loans be credited
against any commitment which the lending country may have undertaken
as its part of the multilateral arrangement. These special bilateral
borrowings would thus replenish the Fund's supply of particular
currencies in strong demand and, in this way, would help to avoid
undue drains on its gold reserve.

-_•

1Q

- 7 I have no fixed opinions on the details of the multilateral
oorrowing arrangement. I am confident — on the basis of the
encouraging views I have heard expressed in the past few days —
that practical means can be found to give effect to the agreement in
principle which so evidently exists. There are four important
aspects which I do wish to emphasize:
First, the aggregate amount the participating countries should
look forward to committing to the project should be large enough to
add decisively to the Fund's capacity to play its essential role.
Second, to be effective, the additional resources must be
promptly available in case of need.
Third, safeguards will be required to ensure that there will
be effective consultation between the Fund and the lenders, and that
the Fund will only actually borrow under the commitment arrangements
after taking full account of the current reserve position of the
lending country. In addition, each country which actually lends
to the Fund should, in case the need develops, be able automatically
to obtain repayment from the Fund.
Fourth, I concur in Mr. Jacobsson's judgement that there must
be no weakening of the policies that have guided the Fund in the use
of its resources; nor should the new arrangement change in any way
the existing rights and duties of members of the Fund, both as
drawers of currencies and as providers of currencies.
This is an urgent project. The Fund should push ahead promptly
in its current consultations with the prospective lending countries
in order that the executive board may carry the project to completion
so that the participating countries may obtain the necessary legislative authority from their parliaments early next year. With this
done, the monetary system of the free world will be substantially
strengthened. For the Fund will then clearly be in a position to
meet the changing needs of the new world of convertible currencies.
Speaking for my country, I want to say that the United States
regards the work in which we are engaged here in Vienna as having
a direct and important bearing upon the future course of free world
growth and progress. I have confidence in the ultimate outcome of
our deliberations because I have confidence in the vitality of the
free economies upon which the work of the Fund is founded. Our
mutual goal is a world of expanding opportunities for every human
being to pursue his legitimate aspirations in peace and freedom. The
International Monetary Fund is playing
an important role in helping
oOo
us to achieve it.

mM

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. ..j

"l

TREASURY DEPARTM_NT
Washington
/£_• __ **

•_*

fc^e-*-- ^t^aA-t

y_

.»

September 22, 1961

&*+_*,ts

Following is the text of an address of the Honorable Johm M. Leddy,
Assistant Secretary of the Treasury, before the Board of Governors
of the International Finance Corporation at their Annual Meeting in
Vienna, Austria, Thursday, September 21, 1961.

UNCLASS 210»302%FOR IPS C A M S RISK PM VIENNA INFO BRANCH
fOLLOiING It^EXXT OF SPEECH DELIVERER T H u | ^ Y BY JOHN W.LEDiY,
V*S* ASSISTANT SECRETARY OP TREASURY9 RCPORE THE BOARD OF GOVlpORS
OF THE INTERNATIONAL FINANCE CORPORATION AT THEIR ANNUAL MEETING
IN VIENNA*
tyXASE PASS ALSO TO STEVE MANNING IN TREASURY REPT.
TEIT POLLOfSs
IT GIVES m CHEAT PLEASURE TO JOIN IN PAYING TRIBUTE TO JOiEtT
£AiNEJt, Oil RISTINGUUHEB PRESIWMT AND GOOD FRIEND, AS HE APPROACHES
HIS RETIREMENT NEXT MONTHf^FROM THE PRESIDENCY OF TIE INTERNATIONAL
FINANCE CORPORATISM* JOBERT GARNER IS T ^ P I O N E E R OF THE IFC* IT VAS,
Cim^l093CL_

322
TREASURY DEPARTMENT
Washington
September 22, 1961
FOLLOWING IS THE TEXT OF AN ADDRESS OF THE
HONORABLE JOHN M. LEDDY, ASSISTANT SECRETARY
OF THE TREASURY, BEFORE THE BOARD OF GOVERNORS
OF THE INTERNATIONAL FINANCE CORPORATION AT
THEIR ANNUAL MEETING IN VIENNA, AUSTRIA,
THURSDAY, SEPTEMBER 21, 1961.
It gives me great pleasure to Join in paying tribute to
Robert Garner, our distinguished President and good friend, as he
approaches his retirement next month from the Presidency of the
International Finance Corporation. Robert Garner is the pioneer of
the IFC. It was his wise leadership which guided this novel
Institution through its critical early years of experimentation in
an untested field.
We all know how difficult his task has been. From the beginning
the IFC has been handicapped by the limitation in its Articles of
Agreement prohibiting the Corporation from investing in capital stock.
Happily this prohibition has now been removed with the approval last
month of an amendment to the Articles of Agreement. The large
favorable vote on the amendment, reflecting approval by 88 percent
of the Governors and 9^ percent of the total voting power, is due in
no small measure to the unceasing efforts of President Garner to
make the IFC a vital and progressive Institution. We extend to him
our admiration, our warm thanks and every good wish for the future.
To Eugene Black, the new President, and to Martin Rosen, who holds
the newly-created office of Executive Vice President, we offer our
full cooperation and our hopes for every success in steadily
enlarging the role and influence of the IFC in furthering private
enterprise in the developing countries.
Despite the serious restrictions in its Charter, the IFC has
succeeded in making 45 business investments in 18 member countries
for a total of almost $58 million. Of this total over $13 million
represents 5 commitments entered into during this last 3 months,
signifying a sharp increase in activity.
The IFC is the only international financial institution established
solely for the purpose of investing directly in private enterprise
in the developing countries. And for each dollar of IFC money,
several dollars of private money have gone into enterprises in which
the IFC has invested. Thus we estimate that total investment
generated by the IFC has been in the neighborhood of $200 million.

- 2 Since IPC's total authorized capital of $100 million is
relatively small, it is especially important for the IFC to replenish
its funds by selling its investments in completed projects to private
investors. So far the Corporation has been able to make little
progress in this direction, mainly because the prohibition against
investment in capital stock has forced the Corporation to utilize
devices such as convertible debentures, stock options and contingent
interest arrangements which are complicated, little known and not
readily marketable in the developing countries.
Now that the Corporation has been authorized by the new amendment
to invest in capital stock, including common shares, we have every
reason to hope that it will be able to sell its portfolio much more
readily and thus truly revolve the limited capital at its disposal.
The new amendment, while enabling the Corporation to invest in
common stock, does not permit it to participate in the management
of private enterprise except to protect its interests in cases of
default or jeopardy. It is the hope of the United States that the
need for exercising this protective power will be rare. We are
sure that the officers of the Corporation have no desire or intention
that it intervene in operations which are properly within the domain
of private management.
The Corporation now has greater flexibility to take full
advantage of the opportunities open to it for stimulating private
investment and enterprise. We are confident that it will move forward
vigorously in carrying out its important tasks.
In closing, may I extend a warm welcome to our new members —
we look forward to a close association with them in the work of the
Corporation which lies ahead.

oOo

Mr. Desai is in the United States at the invitation of

_^___W^___JJi_iU.XJ

Secretary „2i

Dillon, ^"hey are scheduled to meet in Secretary Dillon1 s office at

10 a«m. Tuesday to exchange views on economic and financial developnents
in the two countries.
Secretary and Mrs.

Dillon will entertain

14£ AW-? *r-**--_-**'_/

the

inance Minister at TTWIIIMW a dinner
Wednesday evening.

During the week, Mr.

Desai will mbm* meet with other U. S. officials and will -visit several
leading ieaerican universities,

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325

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- -

326
TREASURY DEPARTMENT
WASHINGTON, D.C.
September 25, 19^1
MEMORANDUM TO THE PRESS:
VISIT OF INDIAN FINANCE MINISTER
Treasury Secretary Douglas Dillon will greet India's
Minister of Finance Morarji Desai at the National Airport
this afternoon.

Mr. Desai is due to arrive at 6:05 P.M. by

commercial plane from New York.
Mr. Desai is in the United States at the invitation of
Secretary Dillon. They are scheduled to meet in Secretary
Dillon's office at 10:00 A.M. Tuesday to exchange views on
economic and financial developments in the two countries.
Secretary and Mrs. Dillon will entertain the Finance
Minister at a dinner in his honor Wednesday evening. During
the week, Mr. Desai will meet with other U. S. officials a#d
will visit several leading American universities.

oOo

327

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TREASURY DEPARTMENT
WASHINGTON, D
September 2$, 196l
g RELEASE A. M. NEWSPAPERS, Tuesday. September 26, 1961,
RESULTS OF TREASURY'S WEEKLY BILL OFFERING
The Treasury Department announced last evening that the tenders for two series of
Jeasury bills, one series to be an additional issue of the bills dated June 29, 1961* and
Llert+.her
oft
_>_, were
___ _._»_•_,_._,
j on
_._. September
_•___-.__,*.» 20,
o n were
__*•_,
rt Vio
A .>
other fiarHAfl
series +,
to
be ri_f_/1
dated 0_^4-_»_K
September
28,nru_n
1961, __u_
which
offered
fened at the Federal
# Tenders
lenaers were mva/_ea
a Reserve Banks on September o
25#
invited xor
for JB>_,,JLVAI,^
$1,100,000,0
f thereabouts, of 91-day bills and for $600,000,000, or thereabouts, of 182-day bills.
'he details of the two series are as follows t
IANGE OF ACCEPTED
50MPETITIVE BIDS i

91-day Treasury bills
maturing December 28, 1961
Approx. Equiv,
Price
Annual Rate
2.200%
99.U29
2.259#
2.233# 1/
99.U35

High
Low
Average

182-day Treasury bills
maturing March 29 _ 1962
Approx. Equiv*
Price
Annual Rate
"9o\oW
VMH""
2.'
98.631
2.697^ 1/
98.637

27 percent of the amount of 91-day bills bid for at the low price was accepted.
15 percent of the amount of 182-day bills bid for at the low price was accepted,
OTAL TENDERS APPLIED FOR AND ACCEPTED BY FEDERAL RESERVE DISTRICTS!
District
Soston
New York
Philadelphia
Cleveland
Richmond
Atlanta
Chicago
St, Louis
Minneapolis
Kansas City
Dallas
San Francisco
TOTALS

Applied For

$

3?,I#,60d

1,305,980,000
26,1+83,000
28,306,000
13,58U,000
16,560,000
21i*,177,000
19,273,000
llt,367,000
37,Wi5,000
15.81*9,000
U3.77U.OOO
$1,77U,950,000

Accepted
71*0,1*20,000
11,1*83,000
28,306,000
13,581*,000
16,560,000
152,617,000
15*51*3,000
13,637,000

Applied For
Accepted
$
16,079.000 $ 3*029,000

i,o5U,965,ooo
8,59l*,ooo

U5U,ii5,ooo

3,59U,000
16,1*68,000
26,1*68,000
2,171,000
2,171,000
2,81*5,000
3,613,000
69,U52,0OO
86,1*77,000
3,371,000
3,871,000
3,018,000
I*,5l8,0p0
U,6_*3,000
27,UU5,ooo
4*?U3,Opp
3,797,000
12,51*9,000
8,797,000
33,6673000
_t0,27a,000
$1,100,110,000 a/ $1,271,838,000
51,51*2,000 $600,170,000 b/
mmmmWmwJm>mm>mmVmm*mmm9mmmm

/includes $198,892,000 noncompetitive tenders accepted at the average price of 99.
[includes $1*2,672,000 noncompetitive tenders accepted at the average price of 98.637
'On a coupon issue of the same length and for the same amount invested, the return on
these bills would provide yields of 2.28$, for the 91-day bills, and 2.77$, for the
lite-day hills- Int__-_£ rates on bills are quoted in terns of bank discount.wit]__th9_,
return related to the face amount of the bills payable at maturity rather than the
amount invested and their length in actual number of days related to a 360-day year.
§ In contrast, yields on certificates, notes, and bonds are computed in terms of interesl
on the amount invested, an<i relate the number of days remaining in an interest payment
period to the actual number of days in the period, with semiannual compounding if
more than one ooupon period is involved.
'21*1

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BEVELOPMENT A S S O C I A T I O N , T H E INTERNATIONAL mm?ARY

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THE HOPE EXPRESSES BT JfU JACOBS!ON THAT THESE NEeOTXATXONf iBflfc
COHIUTEB SY THE ENi OF THE YEAR CAN BE REALXSB*
THIS BROAB ACREENENT ON THE WAYS ANB MhM

OF tfRENeTHENXNC THE

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IT
22/1217 2

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STATE GRNC

UNCiASS ;*M^0O2 F0i IPS CABLES BESX FN Vtt$J& INTO'BRANCH
'rOUOVING XS.STATEMENT BY THE HON*" loWGLAS BILLON, SECRETARY OF
THE TREASURY ANB GOVERNOR OF THE BANIt AND FUND FOR THE UNITED
STATES, OPENING A PRESS CONFERENCE AT THE ANNUAL BISCUSSXON OF THE
BANK ANB FUNfc^tSO P.M.'', Ft I|4Y, SEPTEMBER It, l»6l
-HH_EAOE-PASS--AUO...T9. STEVE MANN IMC IN TREAOWV-OEPT.
VKT-fOLLOWs

(/Itx ,</?..//

,_// * ' * -

-^* ^ * / '

X A^l VERY SATISFIES WITH THE OUTCOME OF THIS PEEK'S DISCUSSIONS
IN VIENNA.
IN ABBITION TO THE TRA6ITIONAL ANB EXCEESINGLY USEFUL REVIEWS OF
TIC ACTIVITIES DF THE INTEtMAXXO^AL EANJC, THE INTERNATIONAL

331
TREASURY DEPARTMENT
Washington
September 25, 196l
FOLLOWING IS TEXT OP STATEMENT BY THE HONORABLE
DOUGLAS DILLON, SECRETARY OP THE TREASURY AND
GOVERNOR OP THE BANK AND FUND FOR THE UNITED
STATES, OPENING A PRESS CONFERENCE AT THE ANNUAL
DISCUSSION OP THE BANK AND FUND, VIENNA, AUSTRIA,
3:30 P.M., FRIDAY, SEPTEMBER 2.2, 1961
I am very satisfied with the outcome of this week's discussions
in Vienna.
In addition to the traditional and exceedingly useful reviews
of the activities of the International Bank, the International
Development Association, the International Monetary Fund, and the
International Finance Corporation, there was discussion of the need
for strengthening the International Monetary Fund to meet any
possible strains on the world monetary system.
As Mr. Jacobsson pointed out in his closing statement, many
Governors touched on this subject during their remarks, and they
were unanimous in supporting the concept of action to strengthen
the International Monetary Fund through the negotiation of borrowing
arrangements.
It is particularly noteworthy that the prospective lenders to
the Fund clearly demonstrated their over-all support of this concept
and their willingness to negotiate a detailed agreement.
As a.result of my conversations here, I am confident that the
hope expressed by Mr. Jacobsson that these negotiations be completed
by the end of the year can be realized.

- 2 This broad agreement on the ways and means of strengthening the
Fund marks this meeting in Vienna as one of particular significance
and importance.

Once again — this time in the monetary field —

the countries of the Free World have shown their capacity to join
together to find the answers to a common problem.

0O0

d

o3

September Zf, 1961

/ ^

FOR IMMEDIATE RELEASE
FRANK E. MORRIS NAMED DEPUTY ASSISTANT TO THE
SECRETARY OF TREASURY

Treasury Secretary Douglas Dillon today announced the appointment of
Frank E. Morris, Research Director for the Investment Bankers Association,
as Deputy Assistant to the Secretary.
Mr. Morris -will aid the Assistant to the Secretary (for Debt Management)
in the development of plans and policies pertaining to debt management. ~ He

•will also assist in the coofldiriafrieii mt UirorwG_rEPCTBB m^mto+hm-Smmmmmmm

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For the past six years Mr. Morris has been directing research activities
for the Investment Bankers Association, with offices in Washington, D. C_ From
January 195>3 to May 195>S>. he served as an intelligence officer with the Central
Intelligence Agency, following two years service as an economist with the
Office of Price Stabilization.
Mr. Morris taught economics at the University of Michigan from September
19h9 to June 195>1, and served in the European Theatre with the U. S. Army Air
Force during World War II. He is the author of several articles on finance,
and is a member of the American Economic, Finance and Statistical Associations.
Mr. Morris, 37} was born in Detroit, Michigan, where he receivedyfcssfr

M i "IJI inlmi »1 Inn, IILAJI" a B.A. degree from Wayne University. He received M.A. a

Ph.D. degrees from the University of Michigan. Mr. Morris married the former
o fa
Geraldine C^lth^rp of Detroit in 191*1*. They have two daughters, Susan 7, and
Lisa 1 month. Their

*4 2-

?
:

^__g_S_s' is at IklS Nevis Road, Bethesda lU, Maryland.

oOo

September 25, 19^1
FOR IMMEDIATE RELEASE
FRANK E. MORRIS NAMED DEPUTY ASSISTANT TO THE
SECRETARY OF TREASURY
Treasury Secretary Douglas Dillon today announced the appointment of Frank E. Morris, Research Director for the Investment Bankers
Association, as Deputy Assistant to the Secretary.
Mr. Morris will aid the Assistant to the Secretary (for Debt
Management) in the development of plans and policies pertaining to
debt management. He will also assist in the organization and
staffing of a newly established Office of Financial Analysis in the
Treasury Department.
For the past six year Mr. Morris has been directing research
activities for the Investment Bankers Association, with offices in
Washington, D. C. From January 1953 to May 1955*be served as an
intelligence officer with the Central Intelligence Agency, following
two years service as an economist with the Office of Price
Stabilization.
Mr. Morris taught economics at the University of Michigan from
September 19^9 to June 1951. and served in the European Theatre
with the U. S. Army Air Force during World War II. He is the
author of several articles on finance, and is a member of the
American Economic, Finance and Statistical Associations.
Mr. Morris, 37. was born in Detroit, Michigan, where he received
a B.A. degree from Wayne University. He received M.A. and Ph.D.
degrees from the University of Michigan. Mr. Morris married the
former Geraldine Coltharp of Detroit in 19^4, They have two
daughters, Susan 7, and Lisa 1 month. Their home is at 7^15
Nevis Road, Bethesda 14, Maryland.

oOo
D-242

335
September 26, 1961
FOR IMMEDIATE RELEASE
JOINT STATEMENT BY
SECRETARY OF THE TREASURY DOUGLAS DILLON
AND
THE MINISTER OF FINANCE OF INDIA
MORARJI DESAI

I 1 AlSf___H£iLj_i *?. - :r. l *k2_ J,' |£^2-J_S_LK-- 1_F ' *. * __S
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Lk-^-nrrtev 2 6 , 1961

Possible Joint Statement for Ummm*

Fpllowims Minister^^
5* thmJmtfi^m
10tOO A.M., T^g^^JUff^bg,,^. ,1961
Finance Minister Morarji Desai of India and TreasurySecretary Douglas Dillon met today in the Secretary's qffice.
Their discussion included a review of the status of various
aspects of tk® development programs which India is undertaking
with U. S, assistance. The Secretary gave Minister Desai a
brief review of general economic developments in this country.
\

No specific negotiations have been planned during Mr. Desai's ':

visit to Washington, whieh provides him with an opportunity t

meet and exchange views with offieials of the new Administrat

-2^3

336

September 26, 1961
FOR IMMEDIATE RELEASE
JOINT- STATEMENT BY
SECRETARY OF THE TREASURY DOUGLAS DILLON
AND
THE MINISTER OF FINANCE OF INDIA
MORARJI DESAI
Finance Minister Morarjl Desai of India and Treasury
Secretary Douglas Dillon met today in the Secretary's
office.

Their discussion included a review of the status

of various aspects of the development programs which India
is undertaking with U. S. assistance. The Secretary gave
Minister Desai a brief review of general economic developments in this country.

No specific negotiations have been

planned during Mr. Desai1s visit to Washington, which
provides him with an opportunity to meet and exchange
views with officials of the new Administration.

0O0

D-243

QQ7
•Z

_> v_» £

iesjBcgcqgss_^_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 subj

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

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

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 whi

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

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

of discount at which bills issued hereunder are sold is not considered to accr

until such bills are sold, redeemed or otherwise disposed of, and such bills a

cluded from consideration as capital assets. Accordingly, the owner of Treasury

bills (other than life insurance companies) issued hereunder need include in h

income tax return only the difference between the price paid for such bills, wh
on original issue or on subsequent purchase, and the amount actually received

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

-V 4 Q

&a__3dtx%x__

TREASURY DEPARTMENT
Washington
FOR IMMEDIATE RELEASE _2___SK__X_a September 27, 1961
TREASURY1 S WEEKLY BILL OFFERING
The Treasury Department, by this public notice, invites tenders for two series
of Treasury bills to the aggregate amount of $ 1,700,000,000

or thereabout s>

f

m
cash and in exchange for Treasury bills maturing
of $ 1,700,776,000 , as follows:

October 5, 1961

y in the amount

91 -day bills (to maturity date) to be issued October 5. 1961 y
in the amount of $ 1,100.000,000 , or thereabouts, represent-

__$__£
ing an additional amount of bills dated

July 6, 1961

y

m
and to mature January 4, 1962
, originally issued in the
amount of $ 499,944,000 , the additional and original bills
to be freely interchangeable.
182 -day bills, for $ 600,000.000 y or thereabouts, to be dated

tit*

*___*
October 5. 1961

, and to mature

April 5, 1962

.

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

and noncompetitive bidding as hereinafter provided, and at maturity their fac

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

denominations of $1,000, $5,000, $10,000, $100,000, $500,000 and $1,000,000 (m
value)•

Tenders will be received at Federal Reserve Banks and Branches up to the closi
two
Daylight Saving
hour,/isiJBXttdad£y o'clock p.m., Easte_T_/s___________t time, Monday, October 2, 1961

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

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

TREASURY DEPARTMENT
WASHINGTON, D.C.
September 27 _* 196l
FOR IMMEDIATE RELEASE
TREASURY'S WEEKLY BILL OFFERING
The Treasury Department, by this public notice, invites tenders
for two series of Treasury bills to the aggregate amount of
$1,700,000,000, or thereabouts, for cash and in exchange for
Treasury bills maturing October 5, 196l, in the amount 0 f
$ 1,700,776,000,as follows:
91-day bills (to maturity date) to be issued October 5, 196l,
in the amount of $1,100,000,000, or thereabouts, representing an
additional amount of bills dated July 6, 1961,
and to
mature January 4, 1962, originally issued in the amount of
$499,944*000,
the additional and original bills to be freely
interchangeable.
182-day bills, for $600,000,000, or thereabouts, to be dated
October 5, 196l, and to mature April 5, 1962.
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, two o'clock p.m., Eastern Daylight
Saving time, Monday, October 2, 1961.
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
D-244 company.
or trust

- 2 Ijnmediately 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
July 6, 1961,
(91-days remaining until maturity date on
January 4, 1962)
and noncompetitive tenders for $100,000
or less for the l82~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 October 5» 196l,
in cash or other immediately available funds or in a like face
amount of Treasury bills maturing October 5, 1961. 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
Federal
of theirReserve
issue. Bank
Copies
or Branch.
of the circular may be obtained from any

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$30,886*300
30,583,800
53#®?,0©0

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Cleveland

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41,1138,300
S,0S4,30®
S,SS7#0»
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Cities^
St. Louis

d«ar
Dallas
Govt. Ispr* Aswte*
_M83bt

««hfl8MS_
tMH,478,8Q0

3HB«l.
80,338,000
7384&B8.300
8i,t&*,ooo
88,846,000
4,0,220,000
, 7 »S31«S0D
55*A8S,000

is,iii,aoo
5,888,800
S8,$$WfSO0
3g,7S®t000
33,508,500
1,305,000

34,57S,000
845,101,000
12,907,880
38,184,000
5,818,090
f.,483,000
20,235,500
3,IBO,000
1,081,000
34,106,000
85,884,900

18,788^00
__§_S __$»___ .000

*l,m,485,*0O

Ifemw are attached tables &a_3wiag a<Mitional

£?-2^S

$

relatiag t o

TREASURY DEPARTMENT
WASHINGTON. D.C
September 28, 1961

FOR M_E_____ RELEASE

BREAKDOWN OF FINAL REPORTS OF SUBSCRIPTIONS TO SEPTEMBER ADVANCE REETJNDING
The Treasury Department announced today the results of the current advance
refunding offer of additional amounts of:
3-1/2$ Treasury Bonds of 1980, due November 15, 1980,
3-1/2$ Treasury Bonds of 1990, due Pebrua_cy 15, 1990, and
3-1/2$ Treasury Bonds of 1998, due November 15, 1998,
in exchange for:
2-1/2$ Treasury Bonds of 1965-70, and
2-1/2$ Treasury Bonds of 1966-71.
Total subscriptions amount to $3,757.6 million, which includes $2,827.1
million, or 51.1$ of holdings exchanged by public holders, and $930.5 million exchanged by Government Investment Accounts.

FEDERAL RESERVE
DISTRICT
Boston
New York
Philadelphia
Cleveland
Richmond
Atlanta
Chicago
St. Louis
Minneapolis
Kansas City
Dallas
San Francisco
Treasury
Govt. Inv. Accts.
Totals

3-1/2$ BONDS
OF 1980
(Additional
Issue)

3-1/2$ BONDS
OF 1990
(Additional
Issue)

3-1/2$ BONDS
OF 1998
(Additional
Issue)

$ 231,855,000
359,286,500
30,895,500
33,597,000
11,256,000
5,483,000
41,288,500
6,054,500
5,857,000
7,028,000
33,864,500
22,568,000
5,088,500
480,550,000

^ 90,558,000
752,229,500
61,215,000
22,846,000
40,220,000
7,931,500
55,189,000
13,761,500
5,822,500
38,526,500
32,760,000
13,502,500
1,303,000
160,580,500

$ 14,576,000
645,101,000
12,907,500
66,194,000
5,616,000
7,483,000
20,235,500
2,290,000
1,081,000
34,105,000
23,884,500
44,944,500
18,722,500
289,555,000

$1,274,472,000

$1,296,445,500

$1,186,675,500

There are attached tables showing additional data relating to subscriptio

D-245

Attachment to

SUMMARY OF AMOUNTS OUTSTANDING AND EXCHANGED
SEPTEMBER 1961 ADVANCE REFUNDING
AS OF SEPTEMBER 27, 1961

Outstanding
Aug. 31, 1961
(in millions)

Issues

2-1/2$ Bonds of 1965-70
Publicly held
Federal Reserve Banks
and Government
Investment Accounts
Total

2-1/2$ Bonds of 1966-71
Publicly held
Federal Reserve Banks
and Government
Investment Accounts

Amount
Exchanged
(in millions)

$3,351

$1,660

1,557

570

,$M88

$2,250

$2,180

$1,167

747

360

Total

$2,927

$1,527

Grand Total

<|>7,615

$3,757

$ Exchanged

49.5

53.5

Afctachraerr. -to

SUMXIARY OF AMOUNT AND NUMBER OF SUBSCRIPTIONS RECEIVED
SEPTEMBER 1961 ADVANCE REFUNDING
AS OF SEPTEMBER 27, 1961

Individuals 1/

5g$ Bonds of 1980
Amount
No.Sub.

5§$ Bonds of 1990
Amount
No.Sub.

5j$ Bonds of 1998
Amount
No.Sub.

Amount

$

$

$

$

34,017,000

3,691

23,066,500

1,920

27,198,500

1,238

Total
84,282,000

No.Sub.
6,849

Commercial
63,132,500Banks
470
(own account)
All
696,972,500
Others 2/ 1,460

82,923,000 114

49,382,500 72

195,438,000 656

1,029,875,500 984

820,559,500 472

2,547,407,500 2,916

Totals $ 794,122,000 5,621

$1,135,865,000 3,018

$ 897,140,500 1,782

$2,827,127,500 10,421

Govt. Inv. Accts.
Grand Totals

1/

480,350,000
$1,274,472,000

160,580,500

289,555,000

930,465,500

$1,296,445,500

$1,186,675,500

$3,757,593,000

Includes partnerships and personal trust accounts.

;i

2/ Includes insurance companies, mutual savings banks, corporations exclusive of commercial banks, private pensio
and retirement funds, pension, retirement and other funds of State and local governments, and dealers and brokers,

LJO

(^

Comparison of principal items of assets and liabilities of active national banks - Continued
(In thousands of dollars)
June 3°.
1961
LIABILITIES
Deposits of individuals, partnerships, and corporations:
Demand.
59,212,875
Time and savings
40,338,073
Deposits of U. S. Government
3,748,898
Postal savings deposits
,
8,074
Deposits of States and political
9,762,861
subdivisions
7,848,020
Deposits of banks
Other deposits (certified and
1*5}__J_Z
officers' checks, etc.).
2^584,938
Total deposits..
122
Rediscounts and other liabilities
355,^6
for borrowed money.
Other liabilities
Total
liabilities,
capital
account excluding ., 125.859,942
CAPITAL ACCOUNTS
Capital stock:
Common
3t477.080
Preferred...
1.323
Total.....
3.478.403
Surplus
5,620,169
Undivided profits
2,071,321
Reserves
269.160
Total surplus, profits and
reserves
•
7.960.650
Total capital accounts........ 11.439,053
Total liabilities and
capital accounts
137.298.995
RATIOS:
Percent
U.S. Gov*t securities to total assets. 24.42
Loans & discounts to total assets....
46.21
Capital accounts to total deposits...
9.34

Apr. 12,
1961

61,274,612
38,922,341
1,568,138
8,206
9,187,**40
8,611,099
1.492,826
121,064,662"

June 15,
i960

:Increase or decrease :Increase or decrease
; since Apr. 12, I96I : since June 15. i960
:
Amount ' Percent : Amount » Percent

59,649,364 -2,061,737
34,650,471
1,415,732
3.769,645
2,180,760
8,464
-132

-3.36
3.64
139.07
-1.61

-436,489
5,687,602
-20,747
-390

-.73
16.41
-.55
-4.61

8,137,561 575,421
8,409,880 -763,079

6.26
-8.86

1,625,300
-561,860

19.97
-6.68

13.3U
~O~J6O\7ZT

.86
5.43

1.552.826
116,178,211

73,311
17420,276

4.91
1.17

1,490,892

-330,691

-48.19

3.077.909

______£_

__.

124.754.660

120.747,012

1.105,282

.89

3,457,622
1.472
3.459.094
5,572,040
2,047,520
267.531

3,263,652

19.458
-149
*9i?Q9
48,129
23,801

.56
-10.12

686,157

7.887.091

136.100.845
Percent
23.77
46.73
9.37

37265.182
5,164,562
2,019,267
237, Igl
Jfcffio.980
To,686.162
131,433.174
Percent
22.29
47.47
9.20

M2Q

~^5o"

786"
1.16
.61

-1,135,426 -76.16
-1.90
-_?8.37i
5.112.930

4.23

6.54
213,428
-207 __!__213,221
8,82
455.607
2.58
52.054
32.009 _ _ _ _ .

S_i

_Z1___4_L

_1

539>67Q

7.27

92.868

.82

752.891

7.05

1.198,150

.88

5.865.821

4.46

NOTEs

Minus sign denotes decrease.

CM
r/N

Statement showing comparison of principal items of assets and liabilities of active national banks
as of June 30, I96I, April 12, I96I and June 15, I960
(In thousands of dollars)
June 15,
i960
Number of banks
4,524
ASSETS
Commercial and industrial loans.,.. 23,665,552
Loans on real estate.
15,837,818
Loans to financial institutions....
3,738,144
All other loans
21.546,754
Total gross loans
64,788,268
Less valuation reserves....
1,348,416
Net loans
63,439.852
U, S. Government securities:
Direct obligations
33,397,413
Obligations fully guaranteed.,..
124,680
Total U. S. securities
33,522,093
Obligations of States and political subdivisions
.«,......
10,123,742
Other bonds, notes and debentures..
1,419,736
Corporate stocks, including stocks
of Federal Reserve banks
337.241
Total securities.....
45.402.812
Total loans and securities.... 108.842t66"T~
Currency and coin..
1,491,071
Reserve with Federal Reserve banks. 10,341,259
Balances with other banks
13.441,910
Total cash, balances with
other banks, including reserve
balances and cash items in
process of collection
25,274,240
Other assets
3.182.091
Total assets
137,298,995

JLISX

Increase or decrease : Increase or decrease
since Apr. 12, I96I :since June 15.1960
Amount : Percent : Amount
: Percent

-18

4,542

_g__a__ffi. ?o»9foffi

35.740
291,427
-674,738
204.578
-142,993

^64,931,26163,624,081
_ _ _ _ _ _ _ 2 _ 1,226,348

_J_3„32t

23,629,812
15.546,391
4,412,882

S__J2it879

23,355,540
15,277,735
4,934,488

'___22_Z_L

32,228,779
122,019
32,350,798

29,227,240
70.438
29,297,678

-I56T027
1,168,634
2.661
1,171,295

9,927,654
1,325,874

8,984,454
1,318,874

196,088
93,862

333.660
310.63I
Q1
.tkdjMo~
'
~43~.937.986 39.911,637
1.308.799
107.533.865 102,3097370
1,669,619
-364,733
1,855,804
11,116,992
192,533
10,148,726
l___122i__L
6 1 ^
i-,^,^A

25,^40,116

26,379,669

310,012
.15
560,083
1.87
-15.29 -1,196,344
.96 _I_2_i___
1,164,187
" >98
122.068
-.25
1.042,119

~~

-165.876

136,100,845 131,433,174 1,198,150

1.33

3.67
-24.24
7.43
1.83
1767

3.63
2.18
3.62"

4,170,173
54,242
4,224,415

14.27
77.01
14.42

1.98
7.08

1,139,288
100,862

12.68

1.07

26,610
^1|175
6^3'>294.
-1?8,548

8.57

.____

1.22
-19.65
1.90
.0?

7.65

_i3_:
T__SE

-151,1*46

-10.69
-6.98
-1.11

-.65 -1.105.429

-4.19

1^2
.88

-775.733

^7>-L-—^SS
kM

5,865,821

CM

- 2-

34S
$151,000,000. Other loans, including loans to farmers and other loans to indi-

viduals (repair and modernization and installment cash loans, and single-paym

loans) amounted to $12,924,000,000. The percentage of net loans and discounts
(after deduction of valuation reserves of $1,348,416,000) to total assets on
June 30, I96I was 46.21 in comparison with 47.47 in June i960.
Total investments of the banks in bonds, stocks, and other securities aggre-

gated $45,403,000,000. Included in the investments were obligations of the Un
States Ctovernment of $33,522,000,000 ($124,680,000 of which were guaranteed

tions). These investments, representing 24.42 percent of total assets, showed

increase of $4,224,000,000 since June 15, i960. Other bonds, stocks, and secu

of $11,881,000,000, including $10,124,000,000 of obligations of States and ot
political subdivisions, showed an increase of $1,267,000,000.

Cash of $1,491,000,000, reserves with Federal Reserve banks of $10,341,000,00

and balances with other banks (including cash items in process of collection)

$13,442,000,000, a total of $25,274,000,000, showed a decrease of $1,105,000,

Rediscounts and other liabilities for borrowed money of $355,000,000 showed a
decrease of $1,135,000,000 in the year.

Total capital funds of the banks on June 30, 1961 of $11,439,000,000, equal t

9«34 percent of total deposits, were $753,000,000 more than in June i960 when

were 9.20 percent of total deposits. Included in the capital funds were capit

stock of nearly $3,479,000,000, of which $1,323,000 was preferred stock; surp
$5,620,000,000; undivided profits of $2,071,000,000 and capital reserves of
$269,000,000.

CM

t~n
r-i

">, 4 ^
TREASURY DEPARTMENT
Comptroller of the Currency
Washington

"^ ~

September 29, 19&1
RELEASE A. M. NEWSPAPERS
MONDAY, OCTOBER 2, 1961.
CO_€>mOI_!_ER OF THE CURRENCY REPORTS TOTAL ASSETS AND LIABILITIES
OF ACTIVE NATIONAL BANKS ON JUNE 30, 196" 1

The total assets of the 4,524 active national banks in the United States and

possessions on June 30, I96I amounted to $137,300,000,000, it was announced to

by Comptroller of the Currency Ray M. Gidney. The total assets showed an incre

of $5,900,000,000 over the amount reported by the 4,542 banks on June 15, i960
The deposits of the banks on June 30, I96I were $122,500,000,000, an increase

of $6,300,000,000 in the year. Included in the deposit figures were demand de-

posits of individuals, partnerships, and corporations of $59,000,000,000, a de

crease of $436,000,000, and time and savings deposits of individuals, partners

and corporation of $40,000,000,000, an increase of $5,700,000,000. Deposits of

the United States Government of $3,749,000,000 decreased $20,747,000; deposits

States and political subdivisions of nearly $9,800,000,000 increased $1,625,0

and deposits of banks of $7,848,000,000 showed a decrease of $562,000,000. Pos

savings deposits were $8,074,000 and certified and officers' checks, etc. were
$1,566,000,000.

Gross loans and discounts on June 30, I96I of $64,800,000,000 showed an increa

of $1,164,000,000 over June 15, i960. Commercial and industrial loans amounted

$23,665,000,000 and increased $310,000,000 during the year, while loans on rea

estate of $15,838,000,000 increased $560,000,000. Loans to financial instituti

amounted to $3,738,000,000, a decrease of $1,196,000,000. Retail automobile in

stallment loans of $4,971,000,000 showed an increase of $85,000,000. Other typ

of retail installment loans of $1,793*000,000 showed an increase of $199,000,0

Loans to brokers and dealers in securities and to others for tke'purpose of pu

chasing or carrying stocks, bonds, and other securities of $1,859,000,000 incr
D-246

TREASURY DEPARTMENT
Comptroller of the Currency
Washington
RELEASE A. M. NEWSPAPERS
MONDAY, OCTOBER 2, 1961.

350
September 29, 19^1

COMPTROLLER OF THE CURRENCY REPORTS TOTAL ASSETS AND LIABILITIES
OF ACTIVE NATIONAL BANKS ON JUNE 30, I96I
The total assets of the 4,524 active national banks in the United States and

possessions on June 30, I96I amounted to $137,300,000,000, it was announced to

by Comptroller of the Currency Ray M. Gidney. The total assets showed an incre

of $5,900,000,000 over the amount reported by the 4,542 banks on June 15, i960
The deposits of the banks on June 30, I96I were $122,500,000,000, an increase

of $6,300,000,000 in the year. Included in the deposit figures were demand de-

posits of individuals, partnerships, and corporations of $59,000,000,000, a de

crease of $436,000,000, and time and savings deposits of individuals, partners

and corporations of $40,000,000,000, an increase of $5,700,000,000. Deposits o

the United States Government of $3,749,000,000 decreased $20,747,000; deposits

States and political subdivisions of nearly $9,800,000,000 increased $1,625,00

and deposits of banks of $7,848,000,000 showed a decrease of $562,000,000. Pos
savings deposits were $8,074,000 and certified and officers8 checks, etc. were
$1,566,000,000.

Gross loans and discounts on June 30, I96I of $64,800,000,000 showed an increa

of $1,164,000,000 over June 15, I960, Commercial and industrial loans amounted

$23,665,000,000 and increased $310,000,000 during the year, while loans on rea

estate of $15,838,000,000 increased $560,000,000. Loans to financial instituti

amounted to $3,738,000,000, a decrease of $1,196,000,000. Retail automobile in

stallment loans of $4,971,000,000 showed an increase of $85,000,000. Other typ

of retail installment loans of $1,793,000,000 showed an increase of $199,000,0

Loans to brokers and dealers in securities and to others for the purpose of pu

chasing or carrying stocks, bonds, and other securities of $1,859,000,000 incr
n-246

- 2 $151,000,000. Other loans, including loans to farmers and other loans to indi-

viduals (repair and modernization and installment cash loans, and single-payment
loans) amounted to $12,924,000,000. The percentage of net loans and discounts
(after deduction of valuation reserves of $1,348,416,000) to total assets on
June 30, 1961 was 46.21 in comparison with 47.47 in June i960.
Total investments of the banks in bonds, stocks, and other securities aggre-

gated $45,403,000,000. Included in the investments were obligations of the Unite

States Government of $33,522,000,000 ($124,680,000 of which were guaranteed obl

tions). These investments, representing 24.42 percent of total assets, showed an

increase of $4,224,000,000 since June 15, i960. Other bonds, stocks, and securit

of $11,881,000,000, including $10,124,000,000 of obligations of States and other
political subdivisions, showed an increase of $1,267,000,000.
Cash of $1,491,000,000, reserves with Federal Reserve banks of $10,341,000,000,

and balances with other banks (including cash items in process of collection) of

$13,44-2,000,000, a total of $25,274,000,000, showed a decrease of $1,105,000,00
Rediscounts and other liabilities for borrowed money of $355,000,000 showed a
decrease of $1,135,000,000 in the year.
Total capital funds of the banks on June 30, I96I of $11,439,000,000, equal to

9.34 percent of total deposits, were $753,000,000 more than in June i960 when th
were 9.20 percent of total deposits. Included in the capital funds were capital

stock of nearly $3,479,000,000, of which $1,323,000 was preferred stock? surplus
$5,620,000,000; undivided profits of $2,071,000,000 and capital reserves of
$269,000,000.

Statement showing comparison of principal items of assets and liabilities of active national banks
as of June 30, 1961, April 12, I96I and June 15, I960
(In thousands of dollars)
June 30,
I96I
Number of banks
ASSETS
Commercial and industrial loans....
Loans on real estate..
Loans to financial institutions....
All other loans
,.
Total gross loans
I_ess valuation reserves....
Net loans..... . « « « « • * « « •
U. S. Government securities:
Direct obligations... .......
Obligations fully guaranteed....
Total U. S. securities.....
Obligations of States and political subdivisions
Other bonds, notes and debentures.«,
Corporate stocks, deluding stocks
of Federal Reserve banks.........
Total securities
Total loans and securities....
Currency and coin
...««...«
Reserve with Federal Reserve banks.
Balances with other banks
Total cash, balances with
other banks, including reserve
balances and cash items in
. . . a . .
process of collection... .....
assets
OtherTotal
assets

4.524

Apr. 12,
1961

June 15,
i960

J___l

23.665,552
23,629,812
15.837,818
15,546,391
3,738,144
4,412,882
21,546,754
21,342,176
6577887268
64,931,261
_ 1,348,416
1,335,382 _.
Z^^^2^63.395,879^2,397.733

Increase or decrease :Increase or decrease
since Apr. 12, I96I :since June 15,1960
Amount : Percent : Amount
: Percent

-18

4,542
23,355.5^+0
15,277,735
4,934,488
20,056,318
63,624,081
1,22,6,348

35,740
291,427
-674,738
204,578
342/993
13,034
-156~027

,15
310,012
1.87
560,083
.15.29 -1,196,344
.96
1.490.436
- .22
17164/187
.98
122.068

-_1__0?!___J_9L

1.33
3.67
-24.24
7.43
1.83
9.95

TTcgT

33,397,413
124,680
33.522,093

32,228,779
122f019
32,350,798

29,227,240
JZ0_fi8
29,297,678
767*

1,168,634
2.661
1,171,295

3.63
2.18
376*2

4,170,173
__242_
4,224,415

14.27
77.01
14.42

10,123,742
1,419.736

9,927,654
1,325,874

8,984,454
1.318,874

196,088
93,862

1.98
7.08

1,139,288
100,862

12.68
7.65

1.07

26,610
5.^1.175
6,533.294
.178,548
-775.733
-151.148

8.57
13.76

337.241
45,402,812
1087842,664
1,491,071
10,341,259
13,^41.910

333,660
310.631
3.581
337937%98o~39.911.637 l,564782o~
1.308.799
___i__r
"' 102.309.370
1,855/804
1,669,619
-364,733
10,148,726
11,116,992
192,533
13,qff,,586 A3_L_i*__L
_______

25.274,240
25.^40.116 26.379.669
-I65.876
3_, 182^09.1 _
3.126,864
2,744,135
55.22?
137,298,995" 136,100,845 131,433,174 1,198,150

_____

1.22
-19765
1.90
.05

-.65 -1.105.429
1.77
437.956
.885,865,821

__J_3_
-10.69
-6.98
-1.11

-4.19

4745"

\)

Comparison of principal items of assets and liabilities of active national banks - Continued
(In thousands of dollars)
June 3°,
I96I
LIABILITIES
Deposits of individuals, partnerships, and corporations:
Demand....
59,212,875
Time and savings
40,338,073
3,748,898
Deposits of U. S. Government....
8,074
Postal savings deposits.........
Deposits of States and political
9,762,861
subdivisions•••••
7,848,020
Deposits of banks..........
Other deposits (certified and
1.566,137
officers* checks, etc.)...
11^7t§4/938
Total deposits••.•.
........
Rediscounts and other liabilities
for borrowed money...
355,466
Other liabilities
3.019.538
Total liabilities, excluding
125.859.942
capital account.•...•••..••••
CAPITAL ACCOUNTS
Capital stock:
3,477,080
Common»••#««_.«•»»•*•••«•••»•••»
1,323
Preferred
•

Total

<

»

•

-

»

»

•

»

»

«

__4Z?Jj^

Surplus....
5/«20/lo9
Undivided profits....
2,071,321
Reserves._
269.160
Total surplus, profits and
reserves
7.960.650
Total capital accounts
11.439,053
Total
liabilities
and
capital
iccounts.7..
137.298.995
RATIOS:
Percent
U S.'Gov't securities to total assets. 24.42
Loans & discounts to total assets....
46.21
P.OTV* +__1 accounts to total deposits...
9.34

Apr. 12,
1961

June 15,
i960

:Increase or decrease :Increase or decrease
-.since Apr. 12. 1961 tsince June 15. i960
:
Amount ' Percent : Amount » Percent

61,274,612
33,922,341
1,568,138
8,206

59,649,364 -2,061,737
3^,650,471
1,415,732
2,180,760
3.769,645
-132
8,464

9,187,440
8,611,099

8,137,561
8,409,880

575,^21
-763,079

1.492.826
121,064,662

....
JU_5_-§_£
riCl78,211

73,311
1,420,276

-3.36
3.64
139.07
-1.61

-436,489
5,687,602
-20,747
-390

-4.61

6.26
-8.86

1,625,300
-561,860

19.97
-6.68

13.3U
6,306,727

.86
5.43

4.91
1.17
.48.19
.52

•1,135,426 -76.I6
-58.371
-1.90

686,157
3.003.841
124.754.660

1,490,892
3.077.909

•330,691
_______

120.747.012

1.105.282

.89

5.112.930

3,457,622
1.472

3,263,652
1.530

19,^58
-149
______
48,129
23,801

.56
-10.12

213,428
-207
213,221
455,607
52,054
32.009

l^^EIZl^^m
5,572,040
2,047,520
267,531

5.164,562
2,019,267
_37.1 v 1

7.887.091
11.346.185
136.100.845
Percent
23.77
46.73
9.37

Zt^0_980
10,686,162
131.433,174
Percent
22.29
47.47
9.20

1,&Q

J___2
_____
1,198,150 ,

_5£
78o~
1.16
.61

.82

539,670
752.891

.88

5.865.821

_2

-.73
16.41

___.

NOTE: Minus sign denotes decrease.

wm mmum

mass

ampmmtm* m$ imx
WSMRST

wwu mmm $2 itoaoi

Mm a second step in the Treasury •» previously a_mouncea Autu__ 4 M b financing
l*K)grua, it Hill borrow $ft billion, or tiiereataNfte* by mm tal** at 99.o75 and
«jtdenied interest _ra» Ififey 15, .1961, to Oatober 11, 1961, of additional. » m t _ of
the omtat»di__g 3-l/_/ Trmmry jaoie® dated my 159 1961, ¥ M e h ns&tafe t_r 15,
1353. The additloml _©tes w i H be lestied. cm October 11, 1081, iter pa_«ae_tt oaH
faat date. Bwaent tor 75 feroe_t at taese notes say be M d e by ®re41t in Tre&smry
tax mm* loan accounts. *%bmm mm $£j>?5S nillioa of tha 3~l/4$ notes outstanding,
of which a^proxla_:iteJ_y $8S0 nilliasa are l » M by the Inderal Beaerve Banks and
treasury _tveatnBst accounta.
la adftitiex. to the aaouat of notes ta be offered for et&Mrtptloa, tbe
Secretary of tha Treasury reserves tha rlgbfc to allot up 'to $100 .million of tbe
notes to O0WKP5a®8B8t mWm0lmmm% aecoigsts*
'i/

!9w aabecr^loii bool® for thtraotee i-ili-'iji ope& oojjy ®a Wm8m$, -October 2,
1931« l_y subscript ioos for tha notoi s # & w » i to a l^3_n_mX Kaserw Bairn or
Branch, or to the Sfeeasurer of the tBKltad States, end plused ia the w t H befere
»i_il#t October H vlil be esMri£ereift aa tiaely.'
;r
Subscriptions to the 3-l/i> treasury aotaa of my 13, :1$63, fima ooi-mercial
ba__i for their cwm eeceetit will be r®ceiv#& vitLoat _spo&ft,' b**& vlll :^e restrietec
to 90# of tha combined capital, »u_T_aus, stud usiiviaei profit© of tha _R&acrlbing
bei&, aat subscriptions from all others Busttooaeco®s»fiie*l by pa2_ent of 3$ of tha
aaowit of note® allied for, aot subject to withdrawal until after allotMBtf«Ebe >ie_ rotary of the fxwsury reserves the rig&t to'reject or retee mij etas*
scriptten, to allot less than-tha a&oxwtt of note® s&plled for, apt to ss&ke differed
percentage a H o t s m t s ta mriotis cto#@JS of s^scrlaers.
CommmiMX *m$m ana other lenders are xeojAeatad to refrain, fros raking uneeetired loaaa, m Imm cel&fterallsed in whole or in part by the notes subecrlbed
for, to cower t&« dapeeita raajiirad to'_»<j«i)l i*H» «^t|_^_^J«Dji:«ra <teAared, ai_d
;baal«i will be mt$iirm to « k a tha aaaal c©?tifie»feio» to th»t- afflict. '
f
'

•

•

•

•

•

•

.

„.

•

'

:

:

\

All aubaoiiaors to ^ : n o t f a mm i^pired to a«r@^ aot to:; purchaaa or to s@U f
©r to w&k® aay a|pfe«^iat® tiith r«3»p©ei to the pwrehaaa'or ©ale or other -^ispositicua
of «ha m&w*ltim aabacrlMt for i»^®r thla.- oi^riag, vmMiX after midai^t October0
O'OO

TREASURY DEPARTMENT

253

WASHINGTON, D.C.
FOR B4MEDIATE R__LEASE September 28, 1961
TREASURY WILL BORROW $2 BILLION
As a second step in the Treasury's previously announced Autumn cash financing
program, it will borrow $2 billion, or thereabouts, by the sale, at 99.875 and
accrued interest from May 15, 1961, to October 11, 1961, of additional amounts of
the outstanding 3-1/4$ Treasury notes dated May 15, 1961, which mature May 15,
1963. The additional notes will be issued on October 11, 1961, for payment on
that date. Payment for 75 percent of these notes may be made by credit in Treasury
tax and loan accounts. There are $2,753 million of the 3-l/4# notes outstanding,
of which approximately $850 million are held by the Federal Reserve Banks and
Treasury investment accounts.
In addition to the amount of notes to be offered for subscription, the
Secretary of the Treasury reserves the right to allot up to $100 million of the
notes to (government investment accounts.
The subscription books for the notes will be open only on Monday, October 2,
1961. Any subscriptions for the notes addressed to a Federal Reserve Bank or
Branch, or to the Treasurer of the United States, and placed in the mail before
midnight October 2 will be considered as timely.
Subscriptions to the 3-1/4$ Treasury notes of May 15, 1963, from commercial
banks for their own account will be received without deposit, but will be restricted
to 50$ of the combined capital, surplus, and undivided profits of the subscribing
bank, and subscriptions from all others must be accompanied by payment of 2$ of the
amount of notes applied for, not subject to withdrawal until after allotment.
The Secretary of the Treasury reserves the right to reject or reduce any subscription, to allot less than the amount of notes applied for, and to make different
percentage allotments to various classes of subscribers.
Commercial banks and other lenders are requested to refrain from making unsecured loans, or loans collateralized in whole or in part by the notes subscribed
for, to cover the deposits required to be paid when subscriptions are entered, and
banks will be required to make the usual certification to that effect.

All subscribers to the notes 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 the securities subscribed for under this offering, until after midnight October 2.
' oOo

D-247

Treas.
HJ
10
.A13P4
v.127

U.S. Treasury Dept.
Press Releases

_—————_———

fu^imi

. TREASURY LIBRARY