Full text of Press Releases of the United States Department of the Treasury : Volume 128

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JUN 1 ? 1972
TREASURY DEPARTMENT

-3-

1

sssm

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

terest. Under Sections 454 (b) and 1221 (5) of the Internal Revenue Code of 195

the amount of discount at which bills issued hereunder are sold is not consider

to accrue until such bills are sold, redeemed or otherwise disposed of, and suc

bills are excluded from consideration as capital assets. Accordingly, the owner

of Treasury bills (other than life insurance companies) issued hereunder need i

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

bills, whether on original issue or on subsequent purchase, and the amount actu

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.

- 2-

2

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

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 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 wit
stated price from any one bidder will be accepted in full at the average price

three decimals) of accepted competitive bids. Settlement for accepted tenders in
accordance with the bids must be made or completed at the Federal Reserve Bank
October 16. 1961 ;

in

cash or other immediately available funds or in a like

face amount of Treasury bills maturing October 16, 1961 Cash and exchange

tenders will receive equal treatment. Cash adjustments will be made for differ-

ences between the par value of maturing bills accepted in exchange and the issu
price of the new bills.
The income derived from Treasury bills, whether interest or gain from the sale

or other disposition of the bills, does not have any exemption, as such, and los
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 DEPARTMENT
Washington

FOR
—.

"7

aaamgg RELEASE A-n.Ar&w**r4
October^ 1961

:i'.jftvM:t:t:i:

v

7
'
'
TREASURY INCREASES ONE-YEAR BILLS
The Treasury Department, by this public notice, invites tenders for

$2,000,000,000 , or thereabouts, of 564 -day Treasury bills, for cash and in

5&?c

pEjT"

exchange for Treasury bills maturing

October 16, 1961

y in the amount of

^

$1,502,165,000 , to be issued on a discount basis under competitive and noncom

~

m—

petitive bidding as hereinafter provided. The bills of this series will be dated
October 16, 1961 , and will mature October 15, 1962 , when the face
amount will be payable without interest. They will be issued in bearer form on

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

Tenders will be received at Federal Reserve Banks and Branches up to the clostwo
Daylight Saving
ing hour, /cxisxxhdxxxkx o'clock p.m., Eastern/gfc3od2ax& time, Tuesday, October 10. 196

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
(Notwithstanding the fact that these I
iraals, e. g., 99.925. Fractions may not be used./ It is urged that tenders be mad<

on the printed forms and forwarded in the special envelopes which will be supp
by Federal Reserve Banks or Branches on application therefor.

Others than banking institutions will not be permitted to submit tenders exce]

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

banks and trust companies and from responsible and recognized dealers in inve

securities. Tenders from others must be accompanied by payment of 2 percent of
Iwill run for 364 days, the discount rate will be computed on a bank discount
of 360 days, as is currently the practice on all Issues of Treasury bills.)
U

TREASURY DEPARTMENT
WASHINGTON, D.C.
October 2, 1961
RELEASE A.M. NEWSPAPERS,
Tuesday, October 3, 196l
TREASURY INCREASES ONE-YEAR BILLS
The Treasury Department, by this public notice, invites tenders
for $2,000,000,000, or thereabouts, of 364-day Treasury bills, for
cash and in exchange for Treasury bills maturing October 16, 196l, in
the amount of $1,502,165,000, to be issued on a discount basis under'
competitive and noncompetitive bidding as hereinafter provided. The
bills of this series will be dated October 16, 1961, and will mature
October 15, 1962, when the face amount will be payable without
interest. They will be issued in bearer form only, and In
denominations of $1,000, $5*000, $10,000, $100,000, $500,000, and
$1,000,000 (maturity value).
Tenders will be received at Federal Reserve Banks and Branches up
to the closing hour, two o'clock p.m., Eastern Daylight Saving time,
Tuesday, October 10, 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. (Notwithstanding
the fact that these bills will run for 364 days, the discount rate will
be computed on a bank discount basis of 360 days, as is currently the
practice on all issues of Treasury bills.) It Is urged that tenders
be made on the printed forms and forwarded in the special envelopes
which will be supplied by Federal Reserve Banks or Branches on
application therefor.
Others than banking institutions will not be permitted to submit
tenders except for their own account. Tenders will be received without
deposit from incorporated banks and trust companies and from
responsible and recognized dealers In Investment securities. Tenders
from others must be accompanied by payment of 2 percent of the face
amount of Treasury bills applied for, unless the tenders are accompanied
by an express guaranty of payment by an incorporated bank or trust
company.
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
D-248
the acceptance or rejection thereof. The Secretary of the Treasury
expressly
in whole or
reserves
in part,
the
and
right
his action
to accept
in any
or reject
such respect
any or shall
all tenders,
be final.

- 2 Subject to these reservations, noncompetitive tenders for $400,000 or
less without stated price from any one bidder will be accepted in ful:
at the average price (in three decimals) of accepted competitive
bias. Settlement for accepted tenders in accordance with the bids
^Sl* D e m a d © or completed at the Federal Reserve Bank on October 16,
19ol, In cash or other immediately available funds or in a like face
amount of Treasury bills maturing October 16, 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 return is made, as ordinary gain or
loss.
Treasury Department Circular No. 4l8, Revised, and this notice,
prescribe the terms of the Treasury bills and govern the conditions
of their issue. Copies of the circular may be obtained from any
Federal Reserve Bank or Branch. 0O0

5
October 2, 1961

FOB BBtlASg A, 8. fJBSSFAFIllg,
fsssday. Set#b*r 3. 1961.

isr $400,000 oi
accepted in fu]
tpetltive
w
H the bids
October 16,

wm?m OF TMkmm'$ um&l BILL OFFEBISG l^@exchang
the Treasury Department announced last evening that the tenders for tvo »eria*:o
trmmrr bills, one series to bo an additional imvm of the bills dated ^ely 6* I96xf
the other series to be dated October 3, 1961, which were offered on September 27, imn
opened at the Federal Reserve Bangs on October 2, Tenors *ere invited for f 1,100,(30
or thereabouts, of 91-da? bills and for w » »
, or thereabouts, of l&2-day M l *
The details of the two series are as follows;
have any
•sitIon of
91-day Treasury bills
l82*day treasory billot1
CGtfFITTfXft BXB8t
maturing Jaggery h, 1962
jr.

Prise* 'so on Annual tste
Fries
Sign
ton
99.1*0d
Average
99-id8

Animal Rata

OH?
2.3k2%
2.302% \f

9o\60j/

9S.6fel~ . tup f.686]6
9S.6I3 H i s are fM3% 1/
•. est * unuei*
"*

a/ !»eptin<? one tender of 100,000
** 2ode of 1951*
I pereent of the aaosiit of 91-isjr bills old for at the low price wasr«*eep£eifl &°\
h2 percent of the asomet of H S M i y bills bid for at the leer farie© #a# se^if^st^
fdtai* tsic£s$ Arams FCS km Ace&fra st nm*s. *ES~SV* B i s m o l" .on as capiliu
'-ban life
rir>
h
Is
District
Applied For^
Aooepted
Applied For
^Accepted
Boston
# 2t,t«,G0d t il,?69,oc*
1,233,921,000
721,111,000
1,070,
tfS,0OQ Pl k7l,33>,OQQ
fisv lork
6,050,000
Philadelphia
21,050,000
12,895,009^ 3,#8,QQG
20,552,000
20,552,000
Cleveland
18,732,000
13,732,000
9,936,000
9,936,000
Richmond
1,73^,000
l,56k,Q0Q
Atlanta
ii4,kia,ooo
Ht,iaa,ouo
44,?86#OOOtril 2,256*000
l$k,l&6§QQQ
Chicago
i6o,ao6faoo
iiit?3?,ooo co 7ii,u* # aob
22,12>,GG0
St. Lonia
19,125 ,00a
b,tt*^X*>f»r „ 3,1*63,000
24,230,000
26,230,000
Mltmeepolia
ltfla69oao"
l,9l6,aoo
31,712,000
31,712,000
Kansas City
15,610,000
15,610,000
Bellas
12,166,000
«,572,0QQ
h7,l6k,QQO
l*6.77li,000
San Francisco
8,778,000
3,576,000

11,665,373,000

i*9, 023.000
17,1*66,000
11,100,093,000 h/ 11,3011,91*1,000 1600,21*6,000 f/

b/ Includes £176,921,000 noncoiepetitiv© tenders accepted at the average price of 99M
c/ lucluces *IjO,£73,000 noneoaipetitive tenders accepted at the average price of ?$.6&j
On a coupon issue of the same length and for the ease amount Invested, the return <
these bills would provide yields of 2.35$, for the 91-day bills, and 2.76*, for 1
182-day bills. Interest rates on hills are quoted in terse of bank discount vttl
the return related to the face anonnt of the hills payable at maturity rather tin
the awount Invested and their length in actual number of days related to a 360HU
year. In oostrast, yields on certificate*, notes, and bonds are computed in tefl
of interest on the amount invested, and relate the number of days regaining in «t
interest payment period to the actual number of days in the period, with sesiaasi
compounding if *sore than one coupon period la involved.

TREASURY DEPARTMENT
W A S H I N G T O N , D.C,
OR RELEASE A . M . NEWSPAPERS,
uesday, October 3, 196l*

October 2, 1961

RESULTS OF TREASURY'S WEEKLY BILL OFFERING
The Treasury Department announced last evening that the tenders for two series of
reasury bills, one series to be an additional issue of the bills dated July 6, 1961, and
le other series to be dated October 5, 196l, which were offered on September 27, were
pened at the Federal Reserve Banks on October 2. Tenders were invited for $1,100,000,00C
p thereabouts, of 91-day bills and for $600,000,000, or thereabouts, of 182-day bills.
tie details of the two series are as followst
kNGE OF ACCEPTED
QMPETITIVE BIDS?

High
Low
Average

91-day Treasury bills
maturing January 4, 1962
Approx. Equiv.
Price
Annual Rate
"99HI35
"
2.235%
99.408
2.342*
99.418
2.302* 1/

182-day Treasury bills
maturing April 5, 1962
Approx. Equiv.
Price
Annual Rate
98.650 a/
2.670*
98.641 "
2.688*
98.643
2.683* 1/

a/ Excepting one tender of $100,000
T percent of the amount of 91-day bills bid for at the low price was accepted
42 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
Applied For
Accepted
Applied For
Accepted
27,769,000
$
27,769,000
$
6,507,000 \> 2,507,000
Boston
721,111,000
471,335,000
1,233,921,000
1,070,195,000
New York
6,050,000
3,698,000
21,050,000
12,898,000
Philadelphia
20,552,000
13,732,000
20,552,000
18,732,000
Cleveland
9,936,000
9,936,000
1,738,000
Richmond
i,564,ooo
14,418,000
14,418,000
4,286,000
Atlanta
2,256,000
160,806,000
194,786,000
111,739,000
Chicago
74,159,000
19,125,000
22,125,000
4,463,000
St. Louis
3,463,000
26,230,000
26,230,000
4,416,000
Minneapolis
1,916,000
31,712,000
31,712,000
12,166,000
Kansas City
4,572,000
15,610,000
15,610,000
8,778,000
Dallas
3,578,000
46,774,000
47,764,000
49,023,000
San Francisco
$1,100,093,000
b
/
$1,304,941,000
$600,246,000
17,466,000
c/
$1,665,873,000
TOTALS
I. Includes $176,921,000 noncompetitive tenders accepted at the average price of
^ Includes $40,473,000 noncompetitive tenders accepted at the average price of 98.643
^ On a coupon issue of the same length and for the same amount invested, the return on
these bills would provide yields of 2.35*, for the 91-day bills, and 2.76*, 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.
.0),o

IN ANSWER;:T^IHgUJBIES- —~«0 TOBMKrBTBTEMENT:

Finance Minister Felix Dias Bandaranaike, of Ceylon, today
was the guest of Secretary Douglas Dillon at luncheon in the
Treasury. Mr. BandaraqilaSJee is attending the United Nations
General Assembly in New York, and has been visiting Washington
over the past weekend. The luncheon guests also included the
Ambassador of Ceylon, William Gopallawa, Secretary of Commerce
Luther Hodges and Assistant Secretaries of State Edwin M. Martin

and Philip H. Talbot, ^^<^^«>A TJuJ^Z!^'
Foreign Minister Thanat Khoman of Thailand this afternoon
y^ in
met with Treasury Secretary Douglas Dillon/the Secretary's office.
Their discussions included a review of jthe^eeonomic positions of
the two countries. Minister Khoman's visit to Washington includes
/

meetings with Secretary of State Rusk and Agriculture Secretary
Freeman.

(Letterhead)

October 2, 1961

IMMEDIATE RELEASE
CEYLON FINANCE MINISTER GUEST OF SECRETARY DILION

ifll

IN ANSWER TO INQUIRIES —

p c pf*

fwA

NO FORMAL STATEMENT:

Finance Minister Felix Dias Bandaranaike, of Ceylon,
today ffie^wjptti Secretary Douglas Dillon at luncheon in the
Treasury.

Mr. Bandaraniake is attending the United

Nations General Assembly in New York, and has been visiting
Washington over the past week end,
^jSb.

•X *> °

V

9
TREASURY DEPARTMENT
WASHINGTON, D.C.
October 2, 1961

IMMEDIATE RELEASE
CEYLON FINANCE MINISTER GUEST OF SECRETARY DILLON
Finance Minister Felix DIas Bandaranaike, of Ceylon,
today was the guest of Secretary Douglas Dillon at luncheon
in the Treasury.

Mr. Bandaranaike Is attending the United

Nations General Assembly in New York, and has been visiting
Washington over the past week end. The luncheon guests
also included the Ambassador of Ceylon, William Gopallawa,
Secretary of Commerce Luther Hodges, Assistant
Secretaries of State Edwin M. Martin and Philip H. Talbot,
Administrator designate, Fowler Hamilton, of the Agency for
International Development and Acting Chairman of the Federal
Reserve Board, C. Canby Balderston.

0O0

D-250

(Letterhead)

October 2, 1961
IMMEDIATE RELEASE
THAILAND FOREIGN MINISTER MEETS WITH SECRETARY DILLON

Foreign Minister Thanat Khomanof Thailand this afternoon met with Treasury Secretary Douglas Dillon in the
Secretary's office. Their discussions includedpt review
aLj£bB*&Bmwmm&BM^ of the economic
positions of the two countries. Minister Khoman1s visit
to Washington includes meetings with Secretary of State Rusk
and Agriculture Secretary Freeman.

TREASURY DEPARTMENT
WASHINGTON, D.C.

«

October 2, 196l

FOR IMMEDIATE RELEASE
THAILAND FOREIGN MINISTER MEETS WITH SECRETARY DILLON
Foreign Minister Thanat Khoman of Thailand this
afternoon met with Treasury Secretary Douglas Dillon In
the Secretary's office. Their discussions included a
review of the economic positions of the two countries.
Minister Khomanfs visit to Washington includes meetings
with Secretary of State Rusk and Agriculture Secretary
Freeman.

0O0

D-251

- 3 -

ill

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 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, whe

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-

1 '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 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 i

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

the face amount of Treasury bills applied for, unless the tenders are 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 July 13, 1961 , ( 90 days remaining until maturity date on

TO HPBr
January 11, 1962

PS?
181

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

pxjc

-day bills without stated price from any one bidder will be accepted in full

poq[

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 13, 1961 , in cash or

jsaqc
other immediately available funds or in a like face amount of Treasury bills maturing October 13, 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 €3££afiptiQ*w as such, and

Mga&racxTOaMx
TREASURY DEPARTMENT
Washington

IMMEDIATE RELEASE M C R m X K S

October U, 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 $ 1,70Q»000,000 , or thereabouts)

cash and in exchange for Treasury bills maturing Octobeft 13» 1961 , In the amo
of

$1>701»3$7,0Q0 , as follows:
90 -day bills (to maturity date) to be issued

October 13, 1961

,

in the amount of $ lt10Q»000.000 , or thereabouts, representing an additional amount of bills dated July 13. 1961 t
and to mature January 11 • 1962 y originally issued in the
amount of $ j?QO#178,QQO , the additional and original bills

0sn5
to be freely interchangeable.
181 -day bills, for $ 600.000.000 y or thereabouts, to be dated

CM)
October 13* 1961

y and to mature

April 12, 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 (mat
value)•

Tenders will be received at Federal Reserve Banks and Branches up to the closii
two
Daylight Saving
hour,/^SBCmxSX o'clock p.m., Eastern/atefe* time, Mnnrisvf October 9f 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 t

price offered must be expressed on +-*« **«•*« n-p TOO. with not more than three

•O- 3<TD_

TREASURY DEPARTMENT
WASHINGTON, D.C.
October 4, 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 October 13, 1961, in the amount of
$1,701,357,000, as follows?
90-day bills (to maturity date) to be issued October 13, 196l,
in the amount of $1,100,000,000, or thereabouts, representing an
additional amount of bills dated July 13, 196l,
and to
mature January 11, 1962, originally issued in the amount of
$500,178,000, the additional and original bills to be freely
interchangeable.
l8l-day bills, for $ 600,000,000, or thereabouts, §0 be dated
October 13, 19&1, and to mature April 12, 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).
TeMers^ill be™received at Federal Reserve^Bffiks~ahdTBranches
up to the closing hour two o'clock p.m., Eastern Daylight
Saving time, Monday, October 9, 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-252
or trust company.

- 2 4-v^ - 1 ™ e d }ately after the closing hour, tenders will be opened at
trie 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 13, 1961,
(90- days remaining until maturity date on
January 11, 1962) and noncompetitive tenders for $100,000
or less for the 181 -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 13, 1961*
in cash or other immediately available funds or in a like face
amount of Treasury bills maturing October 13, 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,
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

^

16
0 K O M R O M M 3 VOBilD S*Y1IfSJy« 16 e&tfe3R

Ttmm&g? iwmnamL 4\1-* *o t^f^io^s^a^ *> %«oJtIXte 0C0*S$ la iffi-wtto
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to wtftf&i <££$ 4oli«fBff *tf# o# fe^^oXfc *ovc*» «f* cu mUlhhM
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«tf XJCinr aosl *s© 0QOt3£I$ <sol aaa&te^fefofc •0GQiO0X$ Is a®@s«s JJ£
^oss I/£ttoXI» *f X1JV 000^001$ oaiif 5?*€fj& %o* amr-ter^*^ «Il0t ill
mm& oollil* Ke*?# *uo*i Xn#@* iswl^XroadiA* .0GQtCC# saHi1
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oO#

J^-253

f X:

16

FOR T&mmATE

RELEASE

I05SULTS OF imASlMY'S CWWEHT CASH OFffftX&l
Public subscriptions total about $5,68* Million for the additional
offering of $2,000 Million, or thereabouts, of 3~l/% peroeirt Treasury
Hotes of Series 8*1963, due May 15, 1965, which are to bt issued for
payment on October 11, 1961. Total public subseriptioas accepted aaount
to about $2,176 million.
In addition to the aaount allotted to the public, $100 million of
these notes will be allotted to Goveraaent investment accounts.
the Treasury announced a 37 percent allotment on all subscriptions

in excess of $100,000. Subscriptions for $100,000 or lees will be allotte
is full. Subscriptions for sore than $0100,000 will be allotted not less
than $100,000. Subscriptions total about $5*5*1 Million Iron eojsaereial
beaks for their own account and $3*5 sdllioa frea all others.
Details by federal Reserve Districts as to subscriptions and allot*
seats will be announced next week.

0O0

TREASURY DEPARTMENT
WASHINGTON, D.C.
October 5, 1961
FOR IMMEDIATE RELEASE
RESULTS OF TREASURY'S CURRENT CASH OFFERING
Public subscriptions total about $5,68*4- million for the additional
offering of $2,000 million, or thereabouts, of ?>-l/k percent TreasuryNotes of Series D-I965, due May 15, 1963, which are to be issued for
payment on October 11, I96I. Total public subscriptions accepted amount
to about $2,176 million.
In addition to the amount allotted to the public, $100 million of
these notes will be allotted to Government investment accounts.
The Treasury announced a 57 percent allotment on all subscriptions

in excess of $100,000. Subscriptions for $100,000 or less will be allotted
in full. Subscriptions for more than $100,000 will be allotted not less
than $100,000. Subscriptions total about $5,3^1 million from commercial
banks for their own account and $3^+3 million from all others.
Details by Federal Reserve Districts as to subscriptions and allotments will be announced next week.

0O0

D-253

18

- 2 now

'V****4Hx*%*L*r£mu*^^

met,hnris.±J^,^^^^4^^^^

-'-studies-tl(mm^ma^mmutrt
United Stat^s*-paaH:s

f»f ontcy-anri riftparJairg.
The new system permits baggage to remain in the airlines^
possession without inspection so long as the passengers do not
require access to it. Transfers may be made to a domestic
airline for transit through the United States to a port of
departure for a foreign country. An in-transit baggage tag
designed by Customs will be attached to each piece of baggage
by the airline, either in the foreign country or after arrival
in the United States. Portions of this tag will be turned over
to Customs at the ports of entry and departure.
Thevairlines will have the responsibility of printingKthe
in-transit tag ItKxonformance with Custom»**^specifications, its
attachment to each piece c^^Mggage and delivery of the specified portions ojKne tag to the Custolfrssoffice at the points of

and departure.

Both the incoming carrier^lw^the domestic
™ fi8 **Wtt»»!»'i i -r-wiwi*

1Q
~&&kTT

^tr-^-^Wift-

IMMEDIATE RELEASE

October 6, 1961

CUSTOMS PROCEDURES FOR TRANSITING
AIR PASSENGERS SIMPLIFIED

Treasury Secretary Douglas Dillon announced today that the
Bureau of Customs has developed new simplified procedures for

>HWVilV6 ^oW A6&AQ AtJl
"JL; r^* handling the baggage of commercial airline passengers transiting
Ttfe $€ce£-~r%#Y WZLCGMB$> THIS £7£p /rs p/\ttr op «rW
the United States enroute to another country^ fThe new procedures will permit the

?

transit through the United States of

. OR
these passengers baggage without Customs inspection ^ e x a m i n a tion and with a minimum of Customs control. Theft will be put
B
*A

into effect within the next two weeks at all United States airports with international air traffic.
Under previous procedures, passengers entering the United
States on one aircraft and departing for a foreign country at

another port were required to submit their baggage for inspecti

or arrange for it to be forwarded under bond. ffl^~ptiirn of tl
•

»%&#*4^&m&&&*^

2u
TREASURY DEPARTMENT
WASHINGTON, D.C.

IMMEDIATE RELEASE

October 6, 1961

CUSTOMS PROCEDURES FOR TRANSITING
AIR PASSENGERS SIMPLIFIED
Treasury Secretary Douglas Dillon announced today that the
Bureau of Customs has developed new simplified procedures for
handling the baggage of commercial airline passengers arriving
from abroad and transiting the United States enroute to another
country. The Secretary welcomed this step as part of the program
to encourage foreign tourism in the United States and thereby
strengthen the United States balance of payments position.
The new procedures will permit the transit through the United
States of these passengers' baggage without Customs inspection or
examination and with a minimum of Customs control. The new system
will be put into effect within the next two weeks at all United
States airports with international air traffic.
Under previous procedures, passengers entering the United
States on one aircraft and departing for a foreign country at
another port were required to submit their baggage for inspection
or arrange for it to be forwarded under bond.
The new system permits baggage to remain in the airlines1
possession without inspection so long as the passengers do not
require access to it. Transfers may be made to a domestic airline for transit through the United States to a port of departure
for a foreign country. An in-transit baggage tag designed by
Customs will be attached to each piece of baggage by the airline,
either In the foreign country or after arrival in the United
States. Portions of this tag will be turned over to Customs at
the ports of entry and departure.
0O0

D-254

PARTICIPANTS IN THE OCTOBER k and 5 TREASURY CONSULTANTS' MEETING

Professor Roy Blough
Columbia University
New York, New York

Professor Richard A. Musgrave
Johns Hopkins University
Baltimore, Maryland

Professor E. Cary Brown
Massachusetts Institute
of Technology
Cambridge, Massachusetts

Dr. Joseph A. Pechman
The Brookings Institution
Washington, D. C.

Dr. Gerhard Colm
National Planning Association
Washington, D. C.

Dr. Walter S. Salant
The Brookings Institution
Washington, D. C.

Professor James S. Duesenberry
Harvard University
Cambridge, Massachusetts
Professor Otto Eckstein
Harvard University
Cambridge, Massachusetts
Professor Alvin H. Hansen
Yale University
New Haven, Connecticut
Professor John H. Kareken
University of Minnesota
Minneapolis, Minnesota
Mr. Hal B. Lary
National Bureau of Economic
Research, Inc.
New York, New York

Professor Paul A. Samuelson
Massachusetts Institute
of Technology
Cambridge, Massachusetts
Professor Charles Sehultze
University of Maryland
College Park, Maryland
Professor Eli Shapiro
Massachusetts Institute
of Technology
Cambridge, Massachusetts
Professor Carl S. Shoup
Columbia University
New York, New York
Professor Warren L. Smith
The University of Michigan
Ann Arbor, Michigan

Professor Isador Lubin
Rutgers University
New Brunswick, New Jersey

Professor Arthur Smithies
Harvard University
Cambridge, Massachusetts

Dr. Geoffrey H. Moore
National Bureau of Economic
Research, Inc.
New York, New York

Professor Daniel B. Suits
The University of Michigan
Ann Arbor, Michigan

- 2 -

22
on the prospects for the coming year.

A continued improvement

in 1962 was expected. There was agreement that there existed
little danger of any serious price pressures in 1961; but

f

flfcaT 1962, inflationary pressures should be watched.
^

The expected rise of GNP in 1962 was related to some
further increase in expenditures for plant and£quipment,
residential construction and the Government contribution as
well as increasing consumer purchases. It was felt that the
outlook for continued availability of credit on reasonable
and appropriate terms should lend strength to these trends.
The net export balance was likely to deteriorate to a small
extent, in the view of the experts.
Dr. Seymour E. Harris of Harvard University as Senior
Consultant coordinates the activities of the group. Tn vrrkU^Agn
to<-h£nr;—tn"e~~consultants attending the sessions yesterday and
jfeottay wereT

_ 2 -

22
on the prospects for the coming year.

A continued

improvement

in 1962 was expected. There was agreement that there existed

little danger of any serious price pressures in 1961; but t&a& £
;

1<£
*fctf 1962, inflationary pressures should be watched.

A
The expected rise of GNP in 1962 was related to some

further increase in expenditures for plant andequipment,

residential construction and the Government contribution as
well as increasing consumer purchases. It was felt that the
outlook for continued availability of credit on reasonable
and appropriate terms should lend strength to these trends.
The net export balance was likely to deteriorate to a small
extent, in the view of the experts.

Dr. Seymour E. Harris of Harvard University as Senior
Consultant coordinates the activities of the group. I;

to«4dbm7--th^^onsultants attending the sessions yesterday and
jfeoday wer
There is attached a list of the twenty
consultants who attended the meeting, in additi
V

to Dr. Harris,

-©RATT"*

10/5/61

TREASURY CONSULTANTS CONCLUDE
TWO-DAY MEETING

The second two-day meeting of the Treasury's economic
consultants with Secretary Douglas Dillon and other officials of
the Department was concluded this afternoon.
The members of the President's Council of Economic Advisors
and the Director of the Budget, as well as representatives from

other Federal departments, attended the meeting with 20 economist
from various universities and research institutions.
The agenda included an examination of methods of forecasting gross national product and revenues, appraisals of the
^2xiciu^4. ve - «*»o^>«»-t^^««fe^d^e*t^tts"
economic outlook/and an examination of various means of increasing the response of tax receipts to changing economic conditions.
There was general agreement that the recovery had been very
satisfactory, with the exception of the failure of unemployment
to decline more. There was a substantial measure of agreement

TREASURY DEPARTMENT 24
WASHINGTON, D.C.
October 5, 1961
FOR IMMEDIATE RELEASE
TREASURY CONSULTANTS CONCLUDE
TWO-DAY METING

The second two-day meeting of the Treasury!s economic consulta
with Secretary Douglas Dillon and other officials of the Department
was concluded this afternoon.
The members of the Presidents Council of Economic Advisors and
the Director of the Budget, as well as representatives from other
Federal departments, attended the meeting with 20 economists from
various universities and research institutions.
The agenda included an examination of methods of forecasting
gross national product and revenues, appraisals of the economic
outlook and an examination of various means of increasing the respons
of tax receipts to changing economic conditions.
There was general agreement that the recovery had been very
satisfactory, with the exception of the failure of unemployment to
decline more. There was a substantial measure of agreement on the
l™2t®*S
21 t h e e o m l E g year - A continued improvement in 1962 was
expected. There was agreement that there existed little danger of
any serious price pressures in 1961; but during the course of 1962,
inflationary pressures should be watched.
w™!«! ®^eeted r£s@ <* *» in 1962 was related to some further
c o n S r u c t i o / ^ r t ^ T " f°T Pl*nt 2 n d e <^P^nt, residential
construction and the Government contribution as well as increasing
^ M ^ i r i ? r C h f e % < P W a S f e l t t h a t t h e outlook for c o S u e l §
Knd ltre^th°L e t^^ 11 reasonable and appropriate terms should
1 Harvard
t ex
Dr. Seymour
E. Harris
as Senior
dlterior^f
to o tttii
^ f of
^ ' 4 T h ? u n eUniversity
P°rt balance
was Consultant
likely to
coordinates
the
activities
of
the
group.
There
is
attached
deteriorate to a small extent, in the view of the experts. a list of
the twenty consultants who attended the meeting, in addition to
Dr. Harris.
D-255

TREASURY DEPARTMENT
afljWifflfjatwaMwwwifflMjtwiji'iHWiiniiuu

WASHINGTON, D.C.
October 5, 19^1
FOR IMMEDIATE RELEASE
TREASURY CONSULTANTS CONCLUDE
TWO-DAY MEETING
The second two-day meeting of the Treasury's economic consultants
with Secretary Douglas Dillon and other officials of the Department
was concluded this afternoon.
The members of the President's Council of Economic Advisors and
the Director of the Budget, as well as representatives from other
Federal departments, attended the meeting with 20 economists from
various universities and research institutions.
The agenda included an examination of methods of forecasting
gross national product and revenues, appraisals of the economic
outlook and an examination of various means of increasing the response
of tax receipts to changing economic conditions.
There was general agreement that the recovery had been very
satisfactory, with the exception of the failure of unemployment to
decline more. There was a substantial measure of agreement on the
prospects for the coming year. A continued improvement in 1962 was
expected. There was agreement that there existed little danger of
any serious price pressures in 196l; but during the course of 1962,
inflationary pressures should be watched.
The expected rise of GNP in 1962 was related to some further
increase in expenditures for plant and equipment, residential
construction and the Government contribution as well as increasing
consumer purchases. It was felt that the outlook for continued
availability of credit on reasonable and appropriate terms should
lend strength to these trends. The net export balance was likely to
deteriorate to a small extent, in the view of the experts.
Dr. Seymour E. Harris of Harvard University as Senior Consultant
coordinates the activities of the group. There is attached a list of
the twenty consultants who attended the meeting, in addition to
Dr. Harris.
D-255

PARTICIPANTS IN THE OCTOBER k and 5 TREASURY CONSULTANTS' MEETING

Professor Roy Blough
Columbia University
New York, New York

Professor Richard A. Musgrave
Johns Hopkins University
Baltimore, Maryland

Professor E. Gary Brown
Massachusetts Institute
of Technology
Cambridge, Massachusetts

Dr. Joseph A. Pechraan
The Brookings Institution
Washington, D. C.

Dr. Gerhard Colm
National Planning Association
Washington, D. C.

Dr. Walter S. Salant
The Brookings Institution
Washington, D. C

Professor James S. Duesenberry
Harvard University
Cambridge, Massachusetts

Professor Paul A. Samuelson
Massachusetts Institute
of Technology
Cambridge, Massachusetts

Professor Otto Eckstein
Harvard University
Cambridge, Massachusetts
Professor Alvin H. Hansen
Yale University
New Haven, Connecticut
Professor John H. Kareken
University of Minnesota
Minneapolis, Minnesota
Mr. Hal B. Lary
National Bureau of Economic
Research, Inc.
New York, New York

Professor Charles Schultze
University of Maryland
College Park, Maryland
Professor Eli Shapiro
Massachusetts Institute
of Technology
Cambridge, Massachusetts
Professor Carl S. Shoup
Columbia University
New York, New York
Professor Warren L. Smith
The University of Michigan
Ann Arbor, Michigan

Professor Isador Lubin
Rutgers University
New Brunswick, New Jersey

Professor Arthur Smithies
Harvard University
Cambridge, Massachusetts

Dr. Geoffrey H. Moore
National Bureau of Economic
Research, Inc.
New York, New York

Professor Daniel B. Suits
fflae University of Michigan
Aim Arbor, Michigan

27
October 9, I f H

m^mrn A* K,I »M&igitei,«», w>, MM*
. __
^.^^ ^ mwmm„ ^,^«. tiMitfcaataaaait) Jtar tut iNjartUNi af
1*0*
ffamaaiy UM»$
0a»\artaa uTmm m a i t t M L i«na dt torn teUIa atom* <fa*y U * 1$®L$ m
"" 4*
' ta ba iatai Softer jj t iffd, u t o h i»it affaraa «a Ortrtajrli* warm opsa
•ft
Uterul mmrm mmm m Mt&mr % mwmm mm tm%%m
latitat tm
tm m*^§****$*M®
11,100,000,000, or
mm %m
%m mmmi

taatajtfNmta, ®$ fiMaar MMM mi tm mm#*m$m®$
dvi&iU oT tm two mrim

aiasi a? mmram
a w m n n ixstt

ar* m
mimrn
IMijr T*aaav*r Mils

iBBa/ '^^tM^ ""
at tm*

17

m

m m®wtimmto*$ #f m.~*m allla

mm

*****

n*kn

t*m$* y

" 1UW

tatauai m»$mm$
y mmpnm
* • tenders totaling
## K M t r M U i l i O s * *t taa Ian artaa vaa I

m$Q&

fOf&L fftfflNNa AJFfUSD fO* M B J I K S m B if m t t u . M a W * AgafggGIti

1

W^

T5a>3IJ»W

1,671*000 1,871*000
u»ua§**
Atlanta

tO»tJltOQO
lft9#29«000
17j*9a#O0Q

vork

us,m,ooo SM3M0i 2$§%n,®m
St* L-ouiS
S»1|S2,00Q
zk9k9k*m>
3*»ioofooo
IMJMQO
T0TA1*
|i^01^70
#000

MfJSi

*? A07,0»,000

66k,klH,OOQ

i>3k39ooQ

1,52,703,000

n§mim

t*»7l*vm
lii.l^^OOv
$1*580,1*9®
&,l(Kti66,0QO j/

MdtMHt

i^elndey m3t%^t^0 i^««^«^Mwi UrtM *««^t^i *t th» mwt*m m** «f ft.!«
I ^ ^ N N I $$i$iM9m®
mmmtfmUUm
tm^mm acc«pt*d «% u *ftf^pig*prlo« ©f H # ift
m » « m N M 1 M N » ®f U » s«® l«t|tli «rt JT«r U » a m t to»s«^ l^wstft4, tte tmUm
m
%kmm WOM HTO14 pemUm $k*lM «r l.Ub^ fir ite JRMiy ^ B « t «ni 1«TM 9 fm m
da/ billsB Ir>t*r*st raUa on blUa are qyot*c to t*rms of bank diaco^t «ith %to
w t a m tiiUtoi «• %a» f«it « « « * «f ta» fcUl* fii«U« «t » f « H * y ratter than ths
mmm* iamrUMl audi ttsair Umfl* i* m&wO. mmtim* *f ia^i raUtai to m X>0^*y /atr
Is a^gtttMit,, alalia on aartlflaataa* n&tasf itM ootids art. computed i» tarna at
tetat-aat am toa «»wifc imfaaiadt *aa rmlmta taa swail^jp af ®*m rwmlx&m in an
Imtaraat pays^rt .-^rlod t# tHa act«*l mmtimr af iaja la ^i« period, with
if a@r« thaa aaa «<e^@a |>ariai la lm«»iv»4« \ ,
/

i 6 <f i^v

TREASURY DEPARTMENT
WASHINGTON, D.C.
October 9, 1961
a RELEASE A. M. NEWSPAPERS, Tuesday, October 10, 1961.
BESULTS OF TREASURY'S WEEKLY 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 July 13, 1961, and
e other series to be dated October 13, 1961, which were offered on October 1*, were opened
the Federal Reserve Banks on October 9. Tenders were invited for $1,100,000,000, or
ereabouts, of 90-day bills and for |600,000,000, or thereabouts, of 181-day bills. The
tails of the two series are as followss
NGE OF ACCEPTED 90-day Treasury bills t 181-day Treasury bills
MFETITIVE BIDS?
maturing January 11, 1962
t
maturing April 12, 1962
Approx, Equiv. t
Approx. Equiv,
Price
Annual Rate
s
Price
Annual Rate
High
99.1*10 a/
2.360$
s
98.660 b/
2.665$
I*w
99.1*01 ~
2.396$
s
98.61*6
2.693$
Average
99.1*03
2.389$ l/
*
98.651
2.681*$ l/

a/ Excepting two tenders totaling $1*28,000 j b/ Excepting two tenders totaling $85
33 percent of the amount of 90-day biHs bid for at the low price was accepted
27 percent of the amount of l8l-day bills bid for at the low price was accepted
TAL TENDERS APPLIED FOR AND ACCEPTED BY FEDERAL RESERVE DISTRICTS!
District
Boston
New York
Philadelphia
Cleveland
Richmond
Atlanta
Chicago
St. Louis
Minneapolis
Kansas City
Dallas
5an Francisco
TOTALS

Applied For
$
39,101,000
1,572,833,000
27,11*2,000
26,176,000
11,121,000
22,173,000
207,1*31,000
29,7UO,000
2i*,l*9l*,000
36,100,000
11*, 031,000
96,71*9,000
$2,107,091,000

Accepted
$
16,200,000 s
756,333,000 s
11,969,000 s
20,231,000 «
10,920,000 s
17,698,000 ' g
11*2,751,000 1
21*, 71*0,000 t
11*,15U,000 t
21,500,000 t
ll*,031,000 I
1*9*739,000 t
$1,100,266,000 c/

Applied For
1
3,877,000
861*,1*1*2,000
7,31*3,000
23,292,000
1,871,000
7,1*10,000
115,771,000
6,961*,000
5,1*82,000
7,570,000
5,266,000
t\ 51,982,000
Hp.01^70,000

Accepted
$
3,1*85,000
1*52,703,000
2,31*3,000
ll*,292,000
1,871,000
1*,772,000
8l*,131,000
5,9l!*,000
2,882,000
6,397,000
5,066,000
16,379,000
$ 600,235,000 d/

Includes $213,1*91,000 noncompetitive tenders accepted at the average price of 99.1*03
Includes $52,1*62,000 noncompetitive tenders accepted at the average price of 98.651
On a coupon issue of the same length and for the same amount invested, the return on
these bills would provide yields of 2.1*1*$, for the 90-day bills, and 2.76$, 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 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.

29

m fattaatas
$mmwmm%

itimm mm aaia la

Faaalaiaaa ...............

*

i<j ,••] t..'.:l

•• •'••'

O

• •*• - —

I- !'

'I3&,127,150.00

••••'-• ' i - i i i

[•J

-^

,..

3 K|
•• l- '..' ,j L X I U n

OLHCE OS-.

TREASURY DEPARTMENT
WASHINGTON, D.C.
- Septemb&g--4-3? 19^1

IMMEDIATE RELEASE
TREASURY MARKET TRANSACTIONS IN
•

During

/

f

.

*

Iw'l96l, market transactions

in direct and guaranteed securities of the
government for Treasury investment and other
accounts resulted In net purchases by the
Treasury Department oT $17j3"19r5^Q--r

0O0

D-226

TREASURY DEPARTMENT
WASHINGTON, D.C.
October 11, 1961

IMMEDIATE RELEASE
TREASURY MARKET TRANSACTIONS IN SEPTEMBER

During September 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 $25,114,650.

0O0

D-257

32

nm mtum A. W. mm&m,

oataaar 10, it*i

jh*aaadajrt Oatmbar 11., Ifal.

msram or fttastmY «s oiE-mi BILL omtia*
tarn fraaawy Apartment amramnced laat evamimm that tarn temdara tor 12,000,000,
a? tmarm&atmta* of Jami-dagr Treasury bills to am dated Oataaar 16, 1961, mad ta mate
October 15, 1962, which were offered en October 3, warm opened at tarn fadarml Seaetf
Banks on October 30.
Tba details ot this iasma ara aa follows:

y

fatal applied tm - tl,?5Mt?#©©©
(includes f138,931,000 entered aa a
fatal accepted
- 2,000,863,<
aaassafatiti*a basis ami accepts* im
fall at the average priea shown bale*}
Bang* of accepted
(r-xeeptisg ©me taodar of $100,000)
- f?.037 Equivalent rata of discount approx. 2.?30?> par
Lam
a
a
a
*
2.986$ •
• f*.«92 *
ikveraga
(9S pataattl of the *to\mt bid for at tha lam prima was accepted)
Federal Samara*
fatal
fatal
District
Accepted
M«W«WW«MMMnplW
I
a^e** 9 0Qt
10fe,0ftif000
lam York
l,37l*,290,000
2,fe67,O**f00O
Philadelphia
13,567,000
190 ,747,060
$92000
Cleveland
58,292,000
31*
19,U9,000
Atlanta
25 US2000
11,952,000
000
31
St. Samia
301,257,000
000
31 108 000
Minneapolis
20,569,000
hi 073 000
Kansas City
8,308,000
Dallam
2^,963,000
000
tiMftaoo
Sam Francisco
2*,«3?f000
fatal 13,756,227,000
$2,000,863,000
On * coupon issue af tha ease length mad for the sa*a aaeamt inveeted, the retail1
these billa would provida a yield of 3.09*. Interest rates am bills arm quota*
t a m e of haute discount with tha return related to tha taea mount of tarn billa f
able at mmtmrlty rather than the amount inveeted and their length la actual am*
of days related tm a 360-day year, la contrast, yields on cartif icatea, matat, >
boiwfs arm computed in tarma of interest on the amount invested, sad relate the 1
mar af daya reemining im aa interest payaemt pmriM to taa actual mwber af dafl
with aamiaaamal compounding if norm than one coupon period is involt

s"

2SY

TREASURY DEPARTMENT
WASHINGTON. D.C.
^OR RELEASE A. M. NEWSPAPERS, October 10, 196l
Wednesday, October 11, 196l.
RESULTS OF TREASURY'S ONE-YEAR BILL OFFERING
The Treasury Department announced last evening that the tenders for $2,000,000,000f
>r thereabouts, of 36ii-day Treasury bills to be dated October 16, l°6l, and to mature
3ctober 15, 1962, which were offered on October 3, were opened at the Federal Reserve
Uanks on October 10.
The details of this issue are as follows:
Total applied for - $3,756,227,000
Total accepted
- 2,000,863,000 (includes $138,931,000 entered on a
noncompetitive basis and accepted in
full at the average price shown below)
Range of accepted competitive bidss (Excepting one tender of $100,000)
High
- 97.037 Equivalent rate of discount approx. 2.930$ per annum
w
Low
- 96.979
a
«
it
u
2.988$ « - «
w
Average
- 96.992
w
w
w
w
2.91$% w
" 1/
(95 percent of the amount bid for at the low price was accepted)
Total
Total
Applied For
Accepted
$ 10U,07J*,000
$ ia,i*2i*,ooo
2,l*67,0!U*,000
1,37k,290,000
1|6,767,000
13,567,000
190,592,000
58,292,000
3li,l*li9,000
19,1*1*9,000
23,!i52,000
11,952,000
14*6,607,000
301,257,000
31,569,000
20,569,000
31,308,000
8,308,000
iil,073,000
2i|,963,000
ii9,U37,000
12,1*37,000
289,855,000
iil*,355,ooo
$3,756,227,000
$2,000,863,000
Total
l/ On a coupon issue of the same length and for the same amount invested, the return on
these bills would provide a yield of 3.09$. 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.
Federal Reserve
District
Boston
New York
Philadelphia
Cleveland
Richmond
Atlanta
Chicago
St. Louis
Minneapolis
Kansas City
Dallas
San Francisco

D-258

34
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 -

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 __ July 20, 1961 , ( 91 days remaining until maturity date on

plEF
January 18, 1962

£x&*

) 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
£03x)c
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 October 19, 1961 , in cash or

other immediately available funds or in a like face amount of Treasury bills mat
ing October 19, 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 asv exersotimw^ as such, and lo

3Q

TREASURY DEPARTMENT
Washington
FOR IMMEDIATE RELEASE SSBBXSOa^

October 11, 1961

TREASURY'S WEEKLY BILL OFFERING
The Treasury Department, by this public notice, invites tenders for two seri<
of Treasury bills to the aggregate amount of $ 1,700,000.000 y or thereabouts, fo]

m
cash and in exchange for Treasury bills maturing
of $ 1,600,599,000 , as follows:

October 19. 1961 > Im the amour

SpEjx
91 -day bills (to maturity date) to be issued

October 19. 1961

>

m

1ST

in the amount of $ 1,100,000.000 > or thereabouts, representing an additional amount of bills dated July 20, 1961
,

m
and to mature

January 18, 1962

, original 1 y issued in the

m
182

amount of $ 499,904,000 , the additional and original bills
to be freely interchangeable.
-day bills, for $ 600,000,000 , or thereabouts, to be dated
October 19, 1961 , and to mature
April 19, 1962
.

5^5

x5fe$

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 amo
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 clos
two
Daylight Saving
hour, ;»nBsMxtafcy o'clock p.m., Eastern /&S89SP& time, Monday, October 16, 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

3

WASHINGTON. D.C.
October 11, 1961
?0R 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 19, 196l, in the amount of
$1,600,399*000, as follows?
91-day bills (to maturity date) to be issued October 19, 196l,
in. the amount of $1,100,000,000, or thereabouts, representing an
additional amount of bills dated J u l y 20> 1961,
anci to
mature January 18,1962, originally issued in the amount of
$499,904,000, the additional and original bills to be freely
interchangeable.
182-day bills, for $600,000,000, or thereabouts, to be dated
October 19, 1961, and to-mature April 19, 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 16, 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 D-259
trust company.

- 2 4-u _Iinmeciiately after the closing hour, tenders will be opened at
trie Federal Reserve Banks and Branches, following which public
announcement will be made by the Treasury Departmment of the amoun
and price range of accepted bids. Those submitting tenders will b
advised of the acceptance or rejection thereof. The Secretary of
the Treasury expressly reserves the right to accept or reject any <
all tenders, in whole or in part, and his action in any such respe<
shall be final. Subject to these reservations, noncompetitive
tenders for $ 200,000or less for the additional bills dated
July 20, 196l,
(91-days remaining until maturity date on
January 18, 1962) 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 October 19, 196l,
in cash or other immediately available funds or in a like face
amount of Treasury bills maturing October 19, 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 b^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 exclude
from consideration as capital assets. Accordingly, the owner of
Treasury bills (other than life insurance companies) issued hereund
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 th
return is made, as ordinary gain or 0O0
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

TREASURY DEPARTMENT
WASHINGTON, D.C.

FOR IMMEDIATE RELEASE

October 11, 1961

SUBSCRIPTION AND ALLOTMENT FIGURES FOR TREASURY'S CURRENT CASH OFFERING

The Treasury Department today announced the subscription and allotment
figures with respect to the current offering of the additional amount of
$2,000* million, or thereabouts, of 3-l/4$ Treasury Notes of Series D-1963,
due May 15, 1963.
Public subscriptions were allotted 37 percent with subscriptions for
$100,000 or le'ss being allotted in full and those for more than $100,000
being allotted not less than $100,000.
Subscriptions and allotments were divided among the several Federal Reserve Districts and the Treasury as follows:
Federal Reserve
District

Total Subscriptions Received

Total
Allotments

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

$ 283,511,000
1,764,932,000
215,169,000
518,598,000
209,607,000
233,582,000
912,149,000
216,286,000
159,462,000
184,124,000
230,018,000
759,184,000
5,000
100,000,000

$ 107,261,000
657,617,000
84,228,000
199,366,000
83,263,000
92,570,000
356,086,000
90,145,000
69,821,000
80,105,000
89,743,000
284,319,000
5,000
100,000,000

$5,786,627,000

$2,294,529,000

Total

D-260

TREASURY DEPARTMENT
sashington, 0. C.
&&3DIATE BSLEASE

D-261

FRIDAY, OCTOBER 13, 196l

GO
PRELIMINARY DATA ON IMPORTS FOR CONSUMPTION 07 UNMANUFACTURED LEAD AND ZINC CHABGSABLS TO THE QUOTAS ESTABLISHED
BT PRESIDENTIAL PROCLAMATION NO* 3257 07 SEPTEMBER 22, 1?5*
QUARTERLY QUOTA PERIOD • October lf 1961 - Deosstber 31, I96I
IMPORTS • October I, 196! * Oetob«r 6, 1961 (or as noted)
ITEM 3^1

Country
of
Produotioa

ITEM
1 Load bullion or base bullion,
t load In pigs and bars, load
Lead*bearing ores, fluo dust,1 dross, roolaimad lead, scrap
and mattes
x lead, antl&onlal lead, antlt aoolal scrap lead, type natal,
t all alloys or oomblnatlons of
ttQuarterly Quota
lead n.s.p.f.
Quarterly Quota
x Putlabia Load
Imports x Dutiable Load
report a
(Pounds)
(Pounds}
23,680,000

1
*

: Zinc-bearing ores of all kinds, J Zlno In blocks, pigs, or slabs;
j except pyrites containing- not s old and worn-out zlno, fit
t
over yfr of lino
x only to bs reaanufaetursd, zlno
t
t
dross, and zlno skimmings
1
t
:Quartarly Quota
:Quartorly Quota
t Dutiable Zlns
Imports ; By Weight
Imports
(Pounds)
(Pounds)

10,080,000

6,017,191*

Belgian Congo

-

-

ej»

Belgium and
Luxemburg (total)

-

„

-

Bolivia

5,040,000

3,53«,s»56*

Canada

13,440,000

13,4*10,000

Italy

-

-

Mexico

-

-.

Australia

Peru

16,160,000

On. So. Africa

14,880,000

Yugoslavia
All other foreign
countries (total)

6,560,000

»5!,9!7

15,920,000

ITEM 334

ITEM 393
t
1

19,488

4,082,799

36,880,000 1,955,730
12,880,000 *»9#3I6

5,440,000

•

7,520,000

I,H 5,56**

66,480,000

3,502,408

37,840,000

-

-

3,600,000

70,480,000

1,558,883

6,320,000

102,731

3,496,181

-

35,120,000

3,946,644

3,760,000

101,095

17,840,000

17,840,000

6,080,000

6,080,000

14,880,000

6,560,000

15,760,000 l,853,5«0*
6,080,000 5,154,237*

4u

TRg&SUHY BEPASTMEST
Saafelfigten, S. &»
IMMEDIATE RELEASE

FRIDAY, OCTOBER 13, 196l
raanmuw

IU

D-261

w m n m n n c r w w r n m n a m » jua> anc auaemg M

BB

onutf «

ABUSBB

ST iassZDS»IAL PROCLAMATION NO. 3257 07 SEPTEMBER 22, 1958
QUARTERLY 800T& PERIOD « October I, !$6t •-Daewbor Jl, 196.1
IMPOSTS • @et©fe«r {, 196J « 8«t©feer 6, IfSl (or as wotod)
ITEM 391

Country
of
Production

Australia

ITEM ?92
ITEtt, p%
•
w w buillon'
««**ieB «r
DUAAlon, t
™«
s Load
or c&3e
EaMl>aIXion7
I . ..
,
„
* *e*d i» pigs and bars, load
%
s
« ^ ^ b o a r iand
n g omattes
r e s , fluo dust,, dross, « j U l » d lead, scrap
, Zino-b*aring oros of all kinds, t Zlno In blocks, pig,, «* slab,!
8 aonlal scrap lead, typo matal, j
ever % of zin«
i only to be reaanufaetursd, sins
s all alloys or combinations of 1
s
dross, and zlno skimmings
*
lead n.s«p«f.
%
sQuarterly Quota
^SS^tSrlFGlota"
%
: Quarts rly Quota
t Dutlabla Lead
Imports x Dutlabls Lsad
£Quartorly Quota
P=?orta s Dutiable Zinc
(Pounds)
(Pounds!"
freight
(Pounds)
(Pounds
10,080,000
6,017,191*
23,680,000
99,483

Belgian Congo
§0440,000
Belgium and
Luxemburg (total)
Bolivia

5,040,000

3,531,456*

Canada

13,440,000

13,440,000

15,120,000

4,882,799

66,480,000

3,302,408

7,520,000

1,115,564*

37*840,000

5,496,18!

Italy
39600,000
Mexico
PORJ

16,160,000

*5!,*»7

On, So* Africa

14,680,000

14,880,000

Yugoslovla.
All other foreign
oouatrlos (total)

*lap«rta as of October 9

6,560,000

6,560,000

36,880,000

8,935,730

70,430,000

1,558,885

6,320,000

12,830,000

49,516

35,120,000

3,946,644

3,760,000

802,731
101,095

cs»

15*7&>,0O0

3,853,3I0»

6,080,000

5,134,257*

17,840,000

17,840,000

6,080,009

6,080,000

TREASURY DEPARTMENT
l&shington, D. C.
IMMEDIATE B5LEASE

FRIDAY, OCTOBER 13, 196l

D-262

41

PRELIMINARY DATA OM IMPOMSFOR CONSUMPTION OF UNMANUFACTURED LEAD AND ZINC CHARGEABLS TO THE QUOTAS ESTABLISHED
BY PRESIDENTIAL PBOCLAMATION NO. 3257 OF SEPTEMBER 22, lj^l
ESTABLISHED
OUARTERLT QUOTA PERIOD •July I, 1961 - September 30, 1961
IMPORTS - ju|y

r> l96,

„• September 30, 1961

ITEM 391

Country
of
Production

Australia

ITEM pz
ITEM 39^,
IT2M 394
x Lead bullion or base bullion, T
. . . .
* !•** in pigs and bars, lead ' :
.
Load^boaring ores, fluo dust,t dross, roolaimad lead, scrap , Zino-bsaring ores of all kinds,: Zlno in blooks, pigs, or slabs! l : ^ ! ^ ^ ^ 1 9 ^ ! •Btl-, J •»•«* P ^ " 9 S oontalnlng- not x S S and w o ^ i / z S , Til '
menial
scraporlead,
typo matal,
over & of zlno
, only to bo romanufaSursd, zlno
tz all
alloys
oombinations
of t,
dross, and zinc skimmings
*
load
n.s.p.f.
%
:Quarterly Quota
sSartsrly Quota
: Quarts rly Quota
: Quarterly Quota
x Dutiabla Load
Imports x Dutlabls Load
iQDorts 1 By Weight
Dsporta
x
Dutiable Zlns
Import*
XPounds)
(Pounds)
""*"
(Pounds)
(Pounds)
10,080,000
10,080,000
23,680,000 23,680,000

Belgian Congo

5,440,000

Belgium and
Luxemburg (total)
Bolivia

5,040,000

5,040,000

Canada

13,440,000

13,440,000

7*520,000

6,591,240

37,840,000
3*600,000

37,083,338
661,380

15,920,000

15,920,000

36,880,000

36,880,000

70,480,000

70,292,589

6,320,000

6,320,000

12,880,000

12,876,796

35,120,000

29,799,162

3,760,000

3,758,225

15,7*0,000

15,758,732

6,080,000

6,080,000

17*840,000

17,840,000

66,480,000

52,075,521

ItaJy
Mexico
Peru

16,160,000

16,160,000

Un. So. Africa

14,880,000

14,880,000

Yugoslovia
All other foreign
countries (total)

6,560,000

6,560,000

5,438,968

6,080,000

6,080,000

TREASURY DEPARTMESf
laaaington, D. C«

IMMEDIATE RELEASE

FRIDAY, OCTOBER 13, 1961

D-262

42

raSLDONARI DATA ON ^ | ^ £ ™ ? * f « ° » " « ^ * J » » LSAB ** m G SHARSABLS f0 THE QUOTAS" ESTABLISHES
BT PRESIDENTIAL PROCLAMATION NO. 3257 OF SEPTEMBER 22, 135«
OUABTBRLT QUOTA PERIOD • July I, 196} - 8*pte*ber 30, 196J
B©ORTS •

dy|y

,^-

!56|.

ITEM 391
Country
of
Production

Australia

„ a*pt««b*r 30, 19SJ
ITEM 392
ITEM 394
J2SLJ21
1 Load bullion or base bullion^ T
t load in pigs and bars, lead
1
« « • * * * ! J 2 " » "Ji*iff J " * «JJ?
« Zinc-Baring ores of all kinds, s Zlno in blocks, pigs, or slab,;

t *~"'"^J™£

! ^scrap
^ * lead,
* S typo
/ 2aatal,
I, j! »*C«P* "over
? " 3^
" !«***»•
™* * *? « " — M ,
IX* *
*1
aonlal
of zlno
$ only to bo raaanufacturtd, sine
* all alloys or combinations of t
dross, and zlno skimmings
*
***** P«3«?»f.
1
:Quarterly Quota
tQuarterly Quota
: Quarterly Quota
Quarterly Quota
» Dutiabla Load
Inserts
Hsporta
x
Dutiabla
Zinc
(Pounds)' Import* x Dutlabls Laad
By laijght
Import*
(Pounds)
(Pounds)
(Pounds)
10,080,000
10,080,000
23*680,000 23,680,000
and matte*

Belgian Congo
Belgium and
Luxemburg (total)
Bolivia

5,040,000

5,040,000

Canada

13,440,000

13,440,000

5,440,000

5,438,968

7*520,000

6,591,240

37,840,000
3*600,000

57,083,338
661,380

15*920,000

15,920,000

36,880,000

36,880,000

70,480,000

70,292,589

6,320,000

6,320,000

12,880,000

12,876,796

35,120,000

29,709,162

3*760,000

5,758,225

15*7*0*000

15,758,732

6,080,000

6,080,000

17*840,000

17,840,000

6*080,000

6,080,000

66,480,000

52,075,521

Italy
Mexico
Peru

16,160,000

16,160,000

Un. So. Afrioa

14,880,000

14,880,000

Yugoslovia

m

All other foreign
oouatries (total)

6,560,000

PHZPARSD IN THE BUREAU OF CUSTOMS

6,560,000

43

~£COTTON WASTES
(In pounds)

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

Country of Origin

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

y

Total Imports
I Established s
Imports
Sept. 20, 1961, to s 33-l/3£ of s Sept. 20, 1961,
Total Quota : to Oct. 9f 1961
Oct. 9. 1961

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

1,023,573
239,690
21,544
29,525
22,747
42,019

34,462

25,443
7.088

23,484

5,482,509

1,533,560

1,599,886

1,103,853

.

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

-

1,441,152

1,023,573

-

-

75,807

21,544

-

-

22,747
14,796
12,853

22,747
12,505
•

120,000

~l]

TREASURY DEPARTMENT
Washington, D. C.
IMMEDIATE RELEASE

D-263

FRIDAY, OCTOBER 13, 19^1

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, 1961 - October 9, 1961
Country of Origin
^Cypt and the AngloEgyptian Sudan ....
Peril
British India
China
Mexico
Brazil
Union of Soviet
Socialist Republics
Argentina
,
Haiti
,
Ecuador
,

Established Quota

Imports

Country of Origin

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

8,883,259
618,723

Established Quota
752

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

1/ Other than Barbados, Bermuda, Jamaica, Trinidad, and Tobago
2/ Other than Gold Coast and Nigeria.
3/ Other than Algeria, Tunisia, and Madagascar.
Cotton 1-1/8" or more
Imports August 1, 1961 - October 9. 1961
Established Quota (Global) - 45,6^6,420 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. uxicLer

39,590,778
1,500,000

Imports
39,590,778
461,020

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

Imports

45

TREASURY DEPARTMENT
Washington, D. C.
IMMEDIATE RELEASE
FRIDAY, OCTOBER 13, 196l

D-263

Preliminary data on imports for consumption of cotton and cotton waste chargeable to the quotas
ii&ft t established by the President's Proclamation of September 5, 193^, 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, 196I - October 9. 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

Imports

Country of Origin

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

8,883,259
618,723

Established Quota
752

Paraguay
Colombia
Iraq
„
British East Africa ...
Netherlands E. Indies .
Barbados
l/Other British W. Indies
Nigeria
-2/Other British W. Africa
^/other French Africa ...
Algeria and Tunisia ...

1/ Other than Barbados, Bermuda, Jamaica, Trinidad, and Tobago.
2/ Other than Gold Coast and Nigeria.
3/ Other than Algeria, Tunisia, and Madagascar.
' Cotton 1-1/8" or more
Imports August 1, 1961 - October 9. 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

4,565,642

4,565,6^2

T^t^-Mus^i

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

Inroorts

-3~
COTTtbN WASTES

tin pounds)
COTTON CARD STRIPS made from cotton having -a staple of less than 1-3/16 inches in length, COMBES
WASTE, LAP WASTE, SLIVER BASTE, 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 b7 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

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

y

Established
TOTAL QUOTA

Total Imports
: Established s
^^.^
Imports"™
Sept. 20, 1961, to J 33-l/3£ of : Sept. 20, 1961,
Oct. 9. 1961
; Total Quota : to Oct. 9t 1961

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

1,023,573
239,690
21,544
29,525
22,747
42,019

34,462

25,443
7.088

23,484

5,482,509

l»533,560

1,599,886

1,103,853

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

1,441,152

1,023,573

ms>

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

21,544
22,747
12,505

120,000

T/

46

~£COTTON WASTES
(In pounds)

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

Country of Origin

United Kingdom
Canada
*
France
.
British India .
Netherlands
Switzerland . . . . . . .
Belgium
Japan .
China
Egypt
Cuba .
Germany . . . . . . . . .
JL waxy . . . .

. . . . . .

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

1,913,672
239,690
75,807
58,512
21,442

Included in total imports, column 2<

Prepared in the Bureau of Customs. -.

1,441,152

1,441,152

—

«•

75,807

75,807

—

-

22,747
14,796
12,853

21,442

50,646

25,443
7.088

9,937

2,362,837

1,599,886

1,551,406

-

3,068

<cX 9 2.oj

5,482,509
y

Total Imports
I Established s
Imports
1/
Sept. 20, I960, to s 33-l/3£ of s Sept. 20, I960,
Sept 19, 1961
; Total Quota ; to Sept. 19. 1961

-

3,068

47

TREASURY DEPARTMENT
Washington, D. C.
IMMEDIATE RELEASE

^.

FRIDAY, OCTOBER 13, 196l

D-2b4

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/^"
Imports September 20, I96Q - September 19, 1961
Country of Origin Established Quota Imports Country of Origin Established Quota
Egypt and the Anglo- Honduras 752
Egyptian Sudan
783,816
Peru
247,952
British India
2,003,483
China
1,370,791
Mexico
8,883,259
Brazil
618,723
Union of Soviet
Socialist Republics ...
475,124
Argentina
5,203
Haiti
237
Ecuador
9,333

•
50,569
519,653
.
8,883,259
618,721
.
.
.
-

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

l/ Other than Barbados, Bermuda, Jamaica, Trinidad, and Tobago.
2] Other than Gold Coast and Nigeria.
3/ Other than Algeria, Tunisia, and Madagascar.
Cotton 1-1/8" or more
Imports August 1, 1961 - September 11, 1961
Established Quota (Global) - 45,656,420 Lbs.
Staple Length Allocation Imports
I-3/8" or more
1-5/32" or more and under
1-3/8" (Tanguis)

39,590,778

39,590,778

1,500,000

461,020

l-l/8" or more and under
1-3/8"

^,565,<Sij-2

A.*SG5a.G4.2

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

681

TREASURY DEPARTMENT
Washington, D. C.

W
o

IMMEDIATE RELEASE
FRIDAY, OCTOBER 13, 196l

D-264

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/^"
Imports September 20, 19&Q - September 19, 19bL
"~~"
Country of Origin
Egypt and the AngloEgyptian Sudan ....
Peru
British India .......
China
Mexico
Brazil
Union of Soviet
Socialist Republics
Argentina
,
Haiti
,
Ecuador
,

Established Quota

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

Imports

<B

50,569
519,653
«3>

8,883,259
618,721
O

237

«
«

9,333

m>

Country of Origin

dished Quota

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

l/ Other than Barbados, Bermuda, Jamaica, Trinidad, and Tobago,
2/ Other than Gold Coast and Nigeria.
3/ Other than Algeria, Tunisia, and Madagascar.
Cotton 1-1/8" or more
Imports August 1, 1961 * September 11, 1961
Established Quota (Global) - 45,656,420 Lbs.
Staple Length Allocation Imports .
1-3/8" or more
39,590,778'
i-5/32" or more and under
1-3/8" (Tanguis)
1,500,000
1-1/8" or more and under
1-3/8"

39,590,778
461,020

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

Imports

681

m>

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

Country of Origin

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

y

Established
TOTAL QUOTA

1
Total Imports
i Established %
Imports
~l]
% Sept. 20, I960, to : 33-1/3* of : Sept. 20, I960,
; Sept 19, 1961
; Total Quota t to Sept. 19. 1961

4,323,457
239,690
227,420
69,627
68,240
44,333
38,559
341,535
17,322
8,135
6,544
76,329
. 21.263

1,913,672
239,690
75,807
58,512
21,442

50,646

25,443
7,088

9,937

5,482,509

2,362,837

1,599,886

1,551,406

Included in total imports,-column 2.

Prepared in the Bureau of Customs.

3,068

1,441,152

1,441,152

75,807

75,807

22,747
14,796
12,853

21,442
m>

3,068
\

49

TREASURY DEPARTMENT
Washington

IMMEDIATE RELEASE

D-265

FRIDAY, OCTOBER 13, 196l

The Bureau of Customs announced today the following preliminary
figures showing the Imports for consumption from January 1, 1961, to
September 30, 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
Sept. 30. 1961
170,279

Cigars

180,000,000

Number

Coconut oil..,

403,200,000

Pound

99,697,554

Cordage ,

6,000,000

Pound

3,739,889

Tobacco

5,850,000

Pound

5,958,105

4,744,565

TREASURY DEPARTMENT
Washington

IMMEDIATE RELEASE

D-265

FRIDAY, OCTOBER 13, 196l

The Bureau of Customs announced today the following preliminary
figures showing the imports for consumption from January 1, 1961, to
September 30, 1961, inclusive, of commodities for which quotas were
established pursuant to the Philippine Trade Agreement Revision Act
of 1955:

Commodity

£>UCLOSES 9 « « e * « « « 0 9 « « e

Established Annual
Quota Quantity
765,000

Unit
:
Imports
of
1
as of
Quantity : Sept. 30. 1961
Gross

170,279
4,744,565

'ulgall 8 •«e*e»«»»e*e«o

180,000,000

Number

Coconut oil

403,200,000

Pound

99,697,554

Cordage. »•.. •

6,000,000

Pound

3,739,889

5,850,000

Pound

5,958,105

-2-

Imports

As of
Sept. 30. 191
Absolute Quotas:
Peanuts, shelled, unshelled,
blanched, salted, prepared or
preserved (incl. roasted peanuts but not peanut butter)..,

12 mos. from
Aug. 1, 1961

1,709,000

Pound

367,732

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

Calendar Year

1,200,000

Pound

Quota Filled

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

Pound
Pound
Pound

17,298,511
Quota Filled
551,150

Tung Oil,

*Imports through October 9, 1961.

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

TREASURY DEPARTMENT
Washington
IMMEDIATE RELEASE

D-266

FRIDAY, OCTOBER 13, 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 September 30, 1961, inclusive, as follows:

Commodity

Period and Quantity

: Unit
Imports
: of
as of
: Quantity:Sept. 30. 196:

Tariff-Rate Quotas:
Cream, fresh^or sour Calendar Year 1,500,000 Gallon
Whole milk, fresh or sour Calendar Year 3,000,000 Gallon 97
Cattle, 700 lbs. or more each July 1, 1961(other than dairy cows)
Sept. 30, 1961

120,000

Head

62,442

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

200,000

Head

30,533

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

32,600,645

Pound

1/
Quota Filled

Tuna fish Calendar Year 57,114,714 Pound 40,664,702
White or Irish potatoes: ,
Certified seed
Other
Certified seed
Other

12 mos. from
Sept. 15, 1960
12 mos. from
Sept. 15, 1961

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

Pound
Pound
Pound
Pound

64,444,705 s',
8,964,887 1/
6,175

Walnuts 5,000,000 Pound Quota Filled
Stainless steel table flatware
(table knives, table forks,
table spoons)

Nov. 1, 1960Oct. 31, 1961

69,000,000

Pieces Quota Filled

1/ Imports for consumption at the quota rate are limited to 24,450,483 pounds during
the first nine months of the calendar year.
2/ Imports through September 14, 1961.

51

TREASURY DEPARTMENT
Washington
IMMEDIATE RELEASE

D-266

FRIDAY, OCTOBER 13, 19^1

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 30, 1961, inclusive, as follows:

:

Commodity

Period and Quantity

: Unit
Imports
: of
as of
:Quantity Sept. 30. 1961

Tariff-Rate Quotas:
Cream, freshoor sour «...

Calendar Year

1,500,000

Gallon

268

Whole milk, fresh or sour

Calendar Year

3,000,000

Gallon

97

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

120,000

Head

62,442

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

200,000

Head

30,533

fishjfresh or frozen, filleted,
ate, cod, haddock, hake, pollock, cusk, and rosefish.........

1/
Calendar Year

32,600,645

Pound

Quota, Filled

Calendar Year 57,114,714 Pound 40,664,702
Jhite or Irish potatoes:
Certified seed
,
,...«
VJUil6lT* • • » * • • • • • » • • * • « « • • » » • « • • • «

Other

« • • » • * • * * ©

12 mos. from
Sept. 15, 1960
12 mos. from
Sept. 15, 1961

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

Pound
Pound
Pound
Pound

64,444,705 %!
8,964,887 V
6,175

5,000,000 Pound Quota Filled
Stainless steel table flatware
(table knives, table forks,
table spoons). *
•.

Nov. I, 19600cte 31, 1961

69,000,000 Pieces Quota Filled

1/ Imports for consumption at the quota rate are limited to 24,450„483 pounds during
'the first nine months of the calendar year.
2/ Imports through September 14, 1961.

2-

Commodity

Period and Quantity

: Unit
Imports
As of
:
of
: Quantity Sept. 30. 1961

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

12 mos. from
Aug. 1, 1961

1,709,000

Pound

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

Calendar Year

1,200,000

Pound

Quota Filled

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

Pound
Pound
Pound

17,298,511*
Quota Filled
551,150*

367,732*

Tung Oil Feb. 1, 1961Oct. 31, 1961
Argentina
Paraguay
Other Countries

*Imports through October 9, 1961.

54

„ /; ^^v^%.^i^ ,- ;'. ••'_- •— ~5£,

• £*-&**••*-• •*-—--•-*-•

/;/-

•

Import*

healthy economic growth^ , But aixiiiw iadicated in tmeHa of
beginning, this is bat one step la a long program of
comprehensive tax revision. Tim©, It Is one which deserves
a high priority of treatment, which it is receiving.
However, there are many other areas for constructive refora
to keep our tax system up to date aad Maintain Its equity.
tt the aatloa Is to safes progress la these areas la the
years ahead, It sill require the increasing concern of
the average American that tax policy conform to the
aatloaal interest rather than special interest.

o o

0

o o

recovered over a shorter period of time Is aa uaderstaadafcl
inducement to commit funds to the investment, the shorter
the term, the greater the coafldeaee la payout. Faster
depreciation also facilitates financing of new capital
outlays since funds arising through depreciation may he
used to repay debt incurred to purchase a capital asset.
It also increases the opportunity for capital investment
by shifting taxes to later years.
CONCLUSION i &*&*With this two-pronged approach toward a tax policy
for increasing investment la productive machinery aad
equipment, the investment tax credit aad an adjustment
of the lives of capital assets for depreciation purposes
to conform to existing conditions and technological
obsolescence — there will be a real beginning towards
attuaiag tax policy to ^ne of our major national objectives

- 42 for legislative proposals la this area which would be a
part of the President's comprehensive program for tax
revision aad reform. - -teyoat. >w-To the degree that this course of action results in a
reduction In the average tax lives of capital goods and,
hence, the increase la rates of depredation mow la use,
there will be considerable economic significance.
Depreciation provides increased funds to replace capital
equipment, particularly where rapid obsolescence Is a
major factor. The faster the depreciation deductions
the greater the flow of internal funds from business et
operations aad the greater the prospects of securing •
modern plants. Thus, la a practical sease faster depreciatio
Is likely to set the stage for faster replacement. The
fast that fall depreciation can be taken aad the investment

57
- 41 The Treasury Department ham also obtained material
em the depreciation systems of various foreign countries
la order that comparisons can be made with the Salted States
with respect to methods of depreciation permitted, typical
depreciation rates, accelerated depreciation provisions,
investment^ incentives, aad the treatment of galas or
losses on the disposition of depreciable assets.
Questions as to the rate of change of capital product!?!
aad labor productivity, the rate of technological
obsolescence, aad the effect of chaages la the prise level
are belag considered.
The results of these studlss aad aaalyses will be
made available to the appropriate committees of Congress
during the next session either la coaaeotloa with
administrative action of a corrective nature or as a basis

Defease Services Administration in the Commerce Department
Is also assisting the Treasury in a statistical study of
the rate at which machinery and equipment loses its economic
usefulness as a basis for determining realistic patterns
for spreading the cost of aa asset over Its estimated
service life.
In connection with the study of the administration
of the depreciation provisions, information has been
obtalaed concerning changes made in salvage value aad life
of depreciable assets upon examination of corporate returns
by the Internal Revenue Service. This study will permit
an analysis of the classes aad length of life of assets
for which the estimated useful lives and salvage values
have been materially altered, as well as the reasons
for such adjustments.

5?
• 39 the same industry and among various industries. For the t
first time, detailed data on the use of the aew depreciation
methods will be provided. The questionnaire port lea of
the Treasury Depreciation Survey will reveal the general
opinions of taxpayers as to whether present depreciation
allowances are reasonably satisfactory, the major reasons
for aay inadequacy in depreciation, as well as opinions
concerning various proposals for changing the tax treatment
of depreciation. ivage value *
The National Income Division of the Departmeat of
Commerce is preparing a detailed breakdown of corporation
purchases of plant and equipment year by year from 1914
to 1959. Comparison of this material with the data obtained
from corporate tax returns is expected to permit calculation
of the average actual lives of assets, which can be
compared with tax depreciable lives. The Business and

6U
-safe? about 2,000 of the large corporations aad 1,300 of
the smaller firms.
Another study also begun in 1960 involves a tabulation
of the detailed depreciation information submitted oa
1959 corporation tax returns. This study, based oa a
representative statistical sample* will provide more -.&m®
detailed information by asset type, year of acquisition,
aad depreciation method than that obtained from the/
Treasury Depreciation Survey. Aa analysis of the data
obtained from these studies Is being made by the Treasury
staff aad by consultants.
Data provided by these studies will enable a general
comparison to be made between the depreciable lives used
by some taxpayers aad the lives listed la Bulletin F.
Information will be available concerning the variation la
depreciation rates used on similar assets among firms within

61
- S7 la July 19@0, the Treasury Department requested
approximately 2,700 large corporations to furnish information oa the amount of their depreciable assets, reserves
for depreciation, depreciation deductions, aad fully
depreciated property, the service lives of different types
of depreciable property, and the extent to which the aew
methods of depreciation provided by the Internal Revenue
Code of 1954 had been adopted. In addition, a questionnaire was sent to these corporations requesting infonaatioi
on depreciation practices, experience under the present
law, aad opinions oa various alternative proposals for
revision of the depreciation system. In cooperation with
the Small Business Administration, the questionnaire
portion of the survey material warn also mailed to about
7,600 small businesses. Completed material was furnished
.. ,„>,.•„ • amm#t» *""• .. tltwm wltfci

62

bears directly upon the fundamental question of what the
taxpayer properly fowes. ' aafSmwsmAccordingly, adjustments la depreciation rates because
of changes in permissible lives of assets should not be
confused with the investment tax credit or other measures
designed primarily to provide incentives for modernization
and expansion of capital equipment. However, where they
become applicable, liberalised depreciation allowances
will incidentally facilitate aad encourage modernization* *
aad expansion of Investment in machinery and equipmentt
and other capital facilities*
The nature of the depreciation studies being carried
forward as a part of the long-range tax reform program of
the Treasury Department may be of general interest la view
of the recent actloa oa textile machinery and the prospects
la other areas.

63

all industries, the study of depreciation schedules for
the textile industry having been accelerated because of
the Presidential priority given to it oa lay 2 of this year,
Whether or not adjustments downward in the estimated
lives of assets in other industries is suggested will
depend upon the results of the studies by the Treasury
Department of other industries. It is expected that
adjustments will be suggested wherever recent aad
prospective technological developments can be shown to
be opening the gap between existing practices aad the
requirements imposed by such developments. The main
objectives of the studies under way are to make aa appraisal
of the realism of asset lives aad salvage values currently
la use for computing depreciation. The accuracy of present
allowances la measuring net Income under present conditions

64
mm 34 **

Pursuant to a review of the increasing rate of
obsolescence in this area, the old administrative standards
for estimated depreciable lives of textile machinery' are
being adjusted. Specifically, the estimated useful lives
suggested by the Internal Revenue*Service for most
textile machinery aad equipment have been reduced from
twenty-five years or longer to fifteea years, aad la some
cases twelve years. The resulting speeding up of
depreciation deductions to reflect current technological
conditions, will be of significant help to the industry
la enabling it to modernise, meet foreign competition,

and provide^jobs. • *'••--**?•%•* *ts$*-v .re--to sg*ke a« a^p
'x- But the significance of this announcement goes far ^f
beyond the textile industry, important as that may be.
x}

- As the announcement indicates, the* Treasury's study

of depreciation allowances Is proceeding with respect to

65
- 33 aew Investment regardless of its relationship to current
depreciation allowances, it is believed that much of the
original opposition has evaporated.
One other source of concern and oppositioa was the
fear of some that the adoption of the investment credit
would foreclose progress oa the redeterminations of the
proper leagth of life of plant aad equipment. This fear
should aow be dissipated la the light of aew aad clear
evidence to the contrary. Those who opposed the credit
because they viewed it as aa alternative to depreciation
reform should be reassured by the White louse statement
yesterday (October 11) In connection with the modification
by the Treasury Department of administrative guidelines
governing depreciation allowaaces for tax purposes is
the textile industry.

66
- 32*-demand and help reduce existing over-capacity, thereby •$
making Industry more receptive to favorable decisions
oa expaasioa and modernization projects.
It should have beneficial short-term aad longer-term
employment effects, providing jobs forithe workers la the
process of providing new machinery aad equipment aad the
additional investment to back up many productive jobs.
Obviously, it will increase the rate of capital formation.
Such of the early opposition to the Investment credit
proposal came from those who felt that in its original

m

form It was too complicated and discriminatory, because
of the high premium given to those who expeaded a'sum
in excess of current depreciation allowaaces. With the
Administration's willingness to accept the preference of
many members of the Ways aad Means Committee for a credit
against Income tax equal to eight percent of the cost of

— 31"**—
is of great significance In our effort to*malataia the
international strength of the dollar.
The widespread benefits of the investment credit
will be both immediate aad long-range; it will make
definite contributions to increasing employment, capital *
formation, aad the national output. Estimates of the actual
effect of the credit la inducing additional Investment
are based on calculation of investment response to CD
higher after-tax profitability aad, (2) Increased cash
flow available for investment. Response will also1vary
with economic conditions, being substantially greater in
recovery phases of the economy. In addition to addlag to
gross aatloaal product through investment, the investment
credit should have a multiplier effect due to spreading
of the incomes generated la the purchase aad construction
of new facilities. This, in turn, should expand aggregate

- 30 this respect the credit Is superior to a corresponding
reduction in the rate of the corporate income tax or to
a corresponding allowance for accelerated depreciation.
In view of the nation's heavy domestic aad international
commitments, tax relief to stimulate investment mast provide
the maximum effect per dollar of revenue lost.
The Investment credit has other advantages."tr It is
a tax offset, not a deduction from gross receipts made
la the computation of net income. .The,credit will not be
recorded on company books as a cost of operation. The
credit will therefore be less likely to distort the costs
of business firms aad thus influence business decisions
aad stock market appraisals.P In particular, the credit
is aot likely to become the basis'for increased prices.
This advantage of the"credit over accelerated depreciation

69
-29 The measures under active consideration include,a withholding on Interest aad dividends, repeal of the dividend
credit and exclusion, a legislative tightening of the
provision oa expease accounts, the withdrawal of capital
galas treatment oa the disposition of depreciable property
to the extent the depreciation has been deducted from
such property by the seller la previous years, the
equitable taxation of cooperatives, mutual casualty
companies, mutual savings institutions, aad the removal
of some special privileges allowed oa foreign income,
particularly in the abuse of so-called "tax havens."
Sao of a tax credit is not the only method available
to encourage a higher rate of investment. This method was
selected, however, as the method which gives the greatest
inducement to investment per dollar of revenue loss. la

/i i
i w

— 3s© —

tax equal to eight percent of the cost of new investment.
The credit would be allowed for qualified investments ^
where the property purchased has a useful life of at
least six years. The credit is, la general, limited to
tangible personal property used la manufacturing, P*apa*wfextraction, transportation, or communica%lemw# ****
It is estimated that the revenue loss from the
investment credit proposal la Its present form would be
approximately $1.1 billion annually. * It is proposed
by the Treasury — and the President insists — that the
enactment of the investment tax credit be accompanied by
the correction of some of the serious defects in the
income tax structure which will provide revenue galas •**
sufficient to offset the cost of the credit and keep the
revenue-producing potential of our tax structure intact.

71
- 27 Here is a brief status report oa both aspects of m.
the proposed program.lic^ * *v&mtma®.tm
cV? Extensive hearings have been held la the Ways aad Means
Committee of the Bouse of Representatives which has released
a tentative draft of legislation for "discussion" purposes
that includes the tax credit investment incentive feature.
Chairman Kills has promised that a tax revision measure
Including this feature will be the Committee's first be
order of business in January. liy, ? * i,--^k--^4
The Committee's discussion draftIdoes not contain
the incentive credit in exactly the«form the President
recommended in April, but the Treasury Department believes
the meed for aa Investment stimulus is so urgent that the
modified proposal should receive our full support•. The *
discussion draft provides for a credit against income jt•»

72
- 26 The President's program of tax revision delivered
to the Congress last April 20 contemplated this two-proaged
attack. A major aspect of that program provides for a aev
incentive to Investment by allowing a tax credit to those
who Invest in more modern machinery aad equipment. This
proposal represents a major innovation la American tax lav.
At the same time, the President noted that the proper
determination of the length of an asset's 11 fs and proper
methods of depreciation have a normal aad important function
in determining taxable Income, wholly apart from any
considerations of incentive. Be stated that "A review of
these rules and methods is under way in the Treasury
Department as a part of its over-all tax reform study to
determine whether changes are appropriate aad, If so,
what form they should take. Adoption of the proposed
incentive credit would in no way foreclose later action
on these aspects of depreciation."

- 25 costs, total depreciation la excess of one hundred
percent of cost regardless of price changes,
initial allowances in the year of acquisition which
make possible a very rapid recovery of an investment
in machinery though they do not give total allowances
in excess of cost, and special additional allowances
above cost."
These other countries typically give shorter life
estimates for depreciation than those contained In the
'Bulletin F" of the Internal Revenue Service, last revised
in 1942, and many of the countries also give additional
tax allowances or Incentives in the year of acquisition.
The competitive disadvantage of 0. S. maaWnSfturers in
both categories is important to note. This Administration
intends to move to diminish this disadvantage in both
facets to effect an over-all depreciation reform. In so
• •••-•? t •*'

doing it seeks a tax policy for growth and productivity.

74

The depreciation allowances authorised for Federal
income tax deductions in this country are probably among
the most limited ia the world. As one highly qualified
student (Professor Daa Throop Smith) puts it la a recent
analysis:
"Other countries, la order to minimize tax
barriers to economic growth, have established
depreciation rates for machinery aad equipment
which are based on life estimates probably
appreciably shorter than the average lives in
actual use, though they are aot unrealistic at/
a time of great technological change. Ia addition
to shorter life estimates, many countries allow
one or more of the following: revaluations aad
special allowaaces to offset higher replacement

7^
- 23 Flowed agalast the background of a declining or
lagging rate of investment la this vital sector as compared
to other industrialized societies, frieadly aad less
friendly alike, we ask ourselves what do they have that
we haven't.
Mow, perhaps there are many facets to a full aaswer
to this question. But tax experts, businessmen, economists,
responsible public officials In the Executive establishment
in this Administration and the last one, as well as
experienced observers in the responsible committees la
Congress, all generally agree that one of the Important
contributory factors to America's lag la this vital field
in recent years is the difference in tax policy for
machinery and equipment in our country and that followed
by other Industrialized countries. ia#x mplmm®

- 22 but in price as well* We don't have to be the
cheapest, but we can't afford to be prised out of
the market at home or abroad*
That is why every effort must be made to avoid
out of line increases ia prloes or wages; but that
la itself won't be enough. It won't be enough
because our competitors in Western Europe and Japan
have been modernizing their equipment faster than
American manufacturers aad are cutting unit costs
and improving quality in the process to add to the
advantage they have in relatively lower wage scales.
So, wholly apart from the question of expansion
of capacity to meet growth aeeds, there is a great
stake in the modernization of our manufacturing
souloment.

77
• 31 rate of $6 billion. eTfcat mmplm$ft^t^^^t^g%m^
recession conditions at home early this, yearling
a time of

will rism aad eat
into that surplus, am we
it without all-out effort. 4
feswt

The Administration has stepped up

, But a real effort As h*
on the part of busiasss to continue to
improve its share of fereiga markets with the ****«.
spirit comparable to the mrivo that .*.*
vast domestic markets. ^Mmitmkm
II this drive is to be successful
only
f
onnot
must
be

ia ^uwlfity,

78
- 20 buys —

at least $5 billies more. This places a nts

high premium upon the competitive position of *U. S.
based producUon in relaUoa tm foreign maaufacturiag.
The simple truth is that the U. S., to a large extent,
im depeadlag em the aggressive, eompetitive drive of

ws^mwmj^Bjngwnmji wjpamm* a^^mrS*mwmwajp^e? wm*4g> gs^smjj^s/awmmmwsmjfsm wmmw/^fc^p»mw'^s ww# ^mm* we*w/w v

Deficits im our International balance of payments
totalled about $11 billion Am the three years 195S-60.
fcately, however, as a result of many actions taken
by the government, there has seem some faptm/rsmoat la
ear balance of payments situation.

But the heart of

the problem is our merchandise trade account —

that is

where we make or break. XarUer this year oar
sjsrehaadise trade surplus was runalag at am aaaaal

• 19 lead to higher output. As investment la plant a
modernization and expansion contributes to a4 larger
export trade few car nation, as it pate people to
work ia the capital goods iadustries, as it pre*
serves and expands caw domestic market through
competitive efficiency, it contributes to the m»
economy*s leag—term gi'owth.
Third, Increasing investment la the modernization
of machinery nam equipment is vital tm a long-term
solution of our newest economic problem bound up
la the phrase "balance of payments.9' If the nation
is tm finance the maiateaaace of our military forces
overseas, as well as finance our investment abroad,
and that minor portion of our foreign aid which is ia
dollars, it must sell more merchandise abroad than it

bo
• IS m
forecasters are warning that the rising economy may
level off in mid-1962 or early 1963, and that there
is a real danger of aaother slump. The projection
of a healthy increase im investment levels tmt $*
machinery aad equipment, whether for modernisation
or exsanmion. would be »«*<WMi inmuraace that the
^^»

WJBWiejWWemPWJnw«mWBMW#W

W«WP"*U»«B)Re»

m^P?

9mj^mntmmm*^m> • • • S H W W ^jmwmm^m

^^mmm

^

^^^»"w

current recovery would reverse the tread to ever
shorter up-ewings aad give promise for a healthy and
t •

more enduring ^ne. w

/ r-

wt$al -tm

*^*term

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machinery and equipment would do double duty im
increasing our rate of economic growth* fme figures
previously cited suggesting a relationship between

if

equipment investment and economic growth .merely s ia
reflect the proposition that expanding the productive
base, or improving its efficiency, or both, should

First, increasing investment levels In machinery
and equipment in the years ahead will help make our
present economic recovery a vigorous aad long
lasting one. Additional expenditures on machinery
aad equipment and the plants and facilities necessary
to house it will create more jobs in the capital
goods industries. There is a startling association
between vigorous and lengthy!up-swings In the economic
cycle aad a healthy Increase ia the levels of capital
goods expenditures. Our last three recoveries have
lasted forty-five months, thirty-five months aad
twenty-five months, respectively, ia that order.
Since World War II approximately fourteen quarterly
periods, or twenty-three percent of the total, have
been periods of recession. Already ^some economic

82
- 16 of the Communist Party im February 1959, Khrushchev y
summarized his assessmeat of the situation im these
words: * ^snsms %**& .1^.*^
"The economic might of the Soviet
Union is based on the priority growth of
heavy industry; this should lasure Soviet
victory la peaceful economic competitloa »i<m
with the capitalistic countries; develop- awmcatic
meat of the Soviet economic might we*! "
give communism a decisive edge ia the '.* .v*s
international balance of power.*? . .uv*
es^m^sm«a^amaw' a# w^msjgs>-sjF mm^mmm mfwmmmds> mwwmmw^msen^e»^s*^nomnm) mt^mmf asmw ws^Bmnswmdb as^sf m>

productive machinery and equipment affects the three
vital national economic objectives mentioned earlier.

Oar gross fixed capital expenditures (other
than housing) have declined from 12.5 percent of GNP
ia 1948 to 9.5 percent la I960. By comparison, the
investment ratio la Western European countries rose
from an average of 13.3 percent of GNP la 1951-55 to
15.1 percent of G&P ia 1959-40. %&#& . .gm$,&%
Even greater percentages of GNP are maid to be
devoted to new machinery and equipment in Japan*

their friendly rivals in the W^tm World to get a
larger share of export markets and to Keen) imports
from getting a larger share of our domestic markets,
with our machinery aad equipment being replaced at
a much slower rate than theirs. ^m% ^ , $&$$» tsn*m

friendly? In his 10-hour speech to the 21st Congress

84
- 14 example is the most spectacular — their proportion
of capital equipment aad plant under five years of p
age grew from one-sixth of the total Im IMS to fin
two-fifths la 1957.
>• Another indication of a slowdown im U. S. . ,,,
capital formation is the levelling-off la business
expenditures on plant and equipment. Bcceat
estimates indicated businessmen planned to spend
$34.6 billion in new plant aad equipment in 1961,
a decline of three percent from 1990 asm of mix
and one-half percent from 1957. ?j| tm j>. - ^:;v^ ,,
This pattern is even more disturbing when ,
measured against the performance of investment levels
in productive machinery and equipment in other
industrialized societies, friendly and less

85
- 13 9. S. economy. Fifty perceat of our present productive
capacity was installed before or durimg World War II.
more than sixty-five perceat was installed before the
Korean War* Thus, of all business plant aad equipment
less than one-third is modern im the sease of being
new since 1950*
Estimates shoe that there has been a startling
rise la recent years im the preportloa of our national

It now averages more than nine years, aad from 1954
to 1959 the stock of equlpmeat over ten years old rose
by fifty perceat. Ia a dynamic economy that average
omewmnywsjwevws* mwww . •»we^^mes,s»>smgssr wmmw emwm*mv wowswmim>awmmmmHBm WF •Sjmw mwwmmy ^mvsmvwmr wmmmmm^^mo -

smwmmwjfismw#sm*s> mmwm e, er sjammjwm) ws^mp^mem ve <s»mmwm> ases>w we* sewjp^smmj wmmtrm*^mm evm^

the average age of their fixed capital. The German

- 12 •/e
*-... la his first Message to the Congress, which was

devoted to a program to restore momentum to the
American economy, President Kennedy set eat title

A

**

mm

aatienal objective: -* ' "d *
". . vt realistic aims for 1991 are to
verse the downtrend ia our economy, to narrow
the gap of unused potential, to abate the
waste aad misery of unemployment, and at •'.'*»aai
the same time to maintain reasonable stability
of the price level. For 1962 sad 1963" our
pregrams must aim at expanding Americaa &-tfi *r^w$.
productive capacity at a rate that shews
the world the vigor and vitality of a free ^
eeememy."
Certain fundamental facts disclose the reasons fei
this emphasis on renewed vigor aad vitality for the

8?

-udeveloped countries in their efforts for economic ws
progress.44 A rapid rate of economic growth will
permit our^meeting all of these aeeds more easily
while minimising the strain imposed on the civiliaa
private sector of our economy.
Yet, instead of an increasing rate of economic
growth to meet these Increasing challenges, the
nation has been confronted by a lagging rate of
growth. From a historic growth rate of three percent
pm annum in gross national product (1909*1959 in
constant prices) we have fallen to two perceat ia
the latter part of the 1950's. in the last five years
Western Europe has grown at double or triple ear
recent rate, and Japan has grown even faster. C.I.A.
estimates that the annual rate growth of the Soviet
economy was seven perceat during the v50fs. *wr w.

• la growth is suggested by the fact that manufacturing
establishments now have available about 10 horsepower
per wage earner, as compared with 1.25 horsepower In
I -

1879.

.',*•••;•

Net investment in structures, equipment and

inventories is now equal to about nine thousand
dollars for each employee in manufacturing.
Even though these past accomplishments represent
a record of which we can all be proud, we are today
facing immense new challenges both at home and abroad.
We have large unmet needs oa the domestic scene. In
addition, I need not remind you of our continuing
needs in the area of national security —

intensified

in recent weeks by the uncertain situation ia Berlin and
at other vital points — needs that require a tremendous
e?

quantity of our resources.
•••-, 1 1

•••'•*

•-

• •-"'•

We are also heavily
*

&•*""

committed to assisting the peoples in the lesser

89
- 9 give attention to policies favoring completely new ventures which involve a
high degree of risk and growth potential."
What are some of the underlying factors which bear
upon the importance ef increasing investment levels in
productive machinery and equipment?
!me growth of the American economy has been one of
the marvels of economic history.
In the economic sphere this growth has been marked
by a continued advance in technology,*new inventions,
new processes, new materials and new machinery. And a
notable element in the historical pattern has been the
ever Increasing use of machines to increase output per
man hour.
The great role of this factor in the panorama of

Su
—8—
enterprise and the avoidance of marked inflation."
The Commission recognized that:
"Such growth Is essential to move toward
our goal of full employment, to provide jobs
for the approximate 13*1/2 million net new
additions to the work force during the next
ten years| to improve the standard of living;
and to assure the 0. S« competitive strength."
In Its prescription for efficient economic growth,
the Commission singled out tax policy, saying:
"Public policies, particularly an overhaul of the tax system, including depreciation
allowances, should seek to Improve the
climate for new Investment and the balancing
of investment with consumption. We should

Q1

*f *

°-s-

First, it encourages the long-term growth of our **
economy. Second, it improves our international
balance of payments positioa by lacreasiag competitive
efficiency. Aad, third, it contributes te^maklag
our present economic recovery a vigorous and long
lasting one. One of the best ways to Increase
investment levels ia productive machinery aad #tggi
equipment is through tax treatment of this Investment.
That Is why this Administration has *fiiv#offtafrom greew,
aj^ssssjs'e* ^r"'SflBjpmm mjpis^m^smge WS'SWMP'OJ w^snjpim»sm*^js<sfr^mBsei e)v,wjs^o*ws*mpnwae (^^m"&' Jf-.>-is§j%^

la the Report of the President's Commission oa
National Goals in November 1960 a group of distinguished
Americans of varied political faiths appointed by
President Elsenhower described as one of ear major
goals that. "The economy should grow at the maximum
rate consistent with primary dependence upon free

Today I will discuss erne particular aspect of
tax policy — one so important that President Kennedy
singled it out for urgent treatment on a priority
basis in his first Tax Message. 1 refer to the
development of a tax policy which will promote
economic growth and productivity by encouraging the

equipment.
While the comprehensive national review aad
revision of tax policy proceeds, this "first and
urgent step" should be taken promptly la Use with
the President's schedule of priorities.
Increasing the investment levels in productive
machinery aad equipment contributes significantly
to three of our vital national economic objectives.

5 m

-

o ;

reform while assuring the adequacy of revenues for
national defense aad other essential needs.
%,

It is contemplated that the recommendations will
be presented to the Congress sometime la the 1962
session after there has been a suitable period for
further Congressional consideration of the specific
tax proposals which were the subject of extensive
hearings before the Bouse Ways and means Committee
from early ia last May until late In August of this
yoar.

:frfe

- ^

Hence, the schedule calls for aa intensive national
examination of tax policy ia 1962 and 1963. let us
hope that this will result in decisions recognizing
the changing requirements of our economic aad later*
national position and the need for constructive reforms
to keep our tax system up to date and maintain its equity.

34
• 4 law aad a balanced structure which contributes mere
effectively to our economic goals of stability at
high levels of employment aad to a more rapid rate
of growth. There is widespread recognition, as
indicated in the earlier Congressional studies, that
these objectives would be served by providing a
broader aad more uniform Income tax base aad aa
adjustment of the rates of tax.
The general objectives can be attained only by
specific steps. The Treasury's studies are for the
purpose of determining whether and to what extent it
may be appropriate to revise particular provisions of
the existing law at the same time that suitable aad

,<cr»
structure. It Is expected that these studies will
result in recommendations for broad aad constructive

QC:

m 3 -

his Tax message of April 20, 1961, the Treasury
Department has undertaken a review of the tax system
in preparation for a comprehensive tax reform program,
IMs review will make use of recent tax studies of
the Congress, particularly those of the Committee
on Ways and Means and the Joint Economic Committee.
Also research projects are being conducted oa" various
features of the tax laws, including in the income tax
area the exclusions, deductions, and credits, some
of which now provide forms of special tax treatment.
These investigations will provide information on the
operation and effects of various present provisions
and provide a basis for legislative recmwmtendatlons
for improvement.

** m

w

ass; ~tw—

**w
ass

The objectives of reform are to provide a more
equitable distribution of tax burdens, a simpler tax

So I want to talk to you about tax policy ~

act

as retailers representing a great organiaatlon of
retailers — act about some particular iaterest you

M%

have la tax policy as retailers — but as American
citizens sharing a national interest la the increasing
growth and productive efficiency ef the 0. S. economy
and the role tax policy can play to that cad. van©**
gm It will be incumbent for all Americans to consider
tax policy and the national interest ia the years just
ahead. For President Kennedy aad his Administration
will cut forward, not only the specific "first step"
proposals submitted in the last session of Congress
because they are so urgently needed, but alee a longrange aad thorough-going program of tax revision aad
reform*
Ia accordance with the President's directive la

9 7 / C&^WOJI** /»

REMARKS OF HENRI E. FOWLER, UNDER SECRETARY
OF THE TREASURY, AT THE 1961 FAU. CONFERENCE
m THE AMERICAN EKTAIL FEDERATION, WARWICK
HOTEL, NEW YORK Q*2$> NEW YORK, /THURSDAY,
^
OCTOBER IS, 1961, 12.£0 PmUm £Pl

m t

A Tax Policy for Growth and Productivity
Everybody's Business

Someone has said that taxes are everybodyv s business,

That should be so in vice of the vital role a strong and
sound Federal tax system will play ia America's future.
But it is not necessarily the case. It is altogether

possible for special Interests to supersede the national
interest in tax policy formulation. To achieve a tax

policy la the national interest, there must be a nationa
Interest In tax policy. Otherwise, tax policy tends to

become the special preserve of those enjoying or seeking
privileged sanctuaries, no matter how conscientiously
the Executive Branch and the responsible committees of
Congress seek to improve the system.

<€-^l

TREASURY DEPARTMENT
Washington
October 12, 1961
FOR RELEASE UPON DELIVERY
REMARKS OP THE HONORABLE HENRY H. FOWLER,
UNDER SECRETARY OF THE TREASURY, AT THE
1961 FALL CONFERENCE OF THE AMERICAN RETAIL
FEDERATION, WARWICK HOTEL, NEW YORK, NEW YORK,
THURSDAY, OCTOBER 12, 196l, 12:30 P.M., EDT,
A Tax Policy for Growth and Productivity

—

Everybody's Business
Someone has said that taxes are everybody's business. That
should be so in view of the vital role a strong and sound Federal
bax system will play in America's future.
But it is not necessarily the case9 It Is altogether possible
for special interests to supersede the national interest In tax
policy formulation. To achieve a tax policy in the national Interest,
there must be a national interest in tax policy. Otherwise, tax
policy tends to become the special preserve of those enjoying or
seeking privileged sanctuaries, no matter how conscientiously the
Executive Branch and the responsible committees of Congress seek to
Improve the system.
So I want to talk to you about tax policy — not as retailers
representing a great organization of retailers — not about some
particular Interest you have in tax policy as retailers — but as
American citizens sharing a national Interest in the increasing
growth and productive efficiency of the U, S, economy and the role
tax policy can play to that end.
It will be incumbent for all Americans to consider tax policy and
the national interest in the years just ahead. For President Kennedy
and his Administration will put forward, not only the specific
"first step" proposals submitted In the last session of Congress
because they are so urgently needed, but also a long-range and
thorough-going program of tax revision and reform.
In accordance with the President's directive in his Tax Message
of April 20, 1961, the Treasury Department has undertaken a review
of the tax system im preparation for a comprehensive tax reform
program
This review will make use of recent tax studies of the
Congress, particularly those of the Committee on Ways and Means and
D-267

- 2 the Joint Economic Committee. Also research projects are^being
conducted on various features of the tax laws, including in the Income
tax area the exclusions, deductions, and credits, some of which now
provide forms of special tax treatment. These investigations will
provide information on the operation and effects of various present
provisions and provide a basis for legislative recommendations for
improvement.
The objectives of reform are to provide a more equitable
distribution of tax burdens, a simpler tax law and a balanced
structure which contributes more effectively to our economic goals
of stability at high levels of employment and to a more rapid rate
of growth. There is widespread recognition, as indicated in the
earlier Congressional studies, that these objectives would be served
by providing a broader and more uniform income tax base and an
adjustment of the rates of tax.
The general objectives can be attained only by specific steps.
Phe Treasury's studies are for the purpose of determining whether
and to what extent it may be appropriate to revise particular
provisions of the existing law at the same time that suitable and
somplementary adjustments are made in the rate structure. It is
expected that these studies will result in recommendations for broad
md constructive reform while assuring the adequacy of revenues for
lational defense and other essential needs.
It is contemplated that the recommendations will be presented to
;he Congress sometime in the 1962 session after there has been a
mitable period for further Congressional consideration of the specific
;ax proposals which were the subject of extensive hearings before the
louse Ways and Means Committee from early in last May until late in
tugust of this year.
Hence, the schedule calls for an intensive national examination
f tax policy in 1962 and 1963. L e t u s hope that this will result
n decisions recognizing the changing requirements of our economic
nd international position and the need for constructive reforms to
:eep our tax system up-to-date and maintain Its equity.
Today I will discuss one particular aspect of tax policy — one
0 important that President Kennedy singled it out for urgent treatent on a priority basis in his first Tax Message. I refer to the
evelopment of a tax policy which will promote economic growth and
roductlvity by encouraging the modernization and expansion of
achinery and equipment.
While the comprehensive national review and revision of tax
alley proceeds, this "first and urgent step" should be taken promptly
n line with the President's schedule of priorities.
Increasing the investment levels In productive machinery and
luipment contributes significantly to three of our vital national
sonomic objectives. First, it encourages the long-term growth of

- 3our economy. Second, it improves our international balance of payments
position by increasing competitive efficiency. And, third, it
contributes to making our present economic recovery a vigorous and
long lasting one. One of the best ways to increase investment levels
in productive machinery and equipment is through tax treatment of
this investment. That is why this Administration has undertaken
thorough-going depreciation reform.
In the Report of the President's Commission on National Goals
in November I960 a group of distinguished Americans of varied
political faiths appointed by President Eisenhower described as one
of our major goals that: "The economy should grow at the maximum
rate consistent with primary dependence upon free enterprise and
the avoidance of, marked inflation."
The Commission recognized that:
"Such growth is essential to move toward our goal of
full employment, to provide jobs for the approximate
13-1/2 million net new additions to the work force during
the next ten years; to improve the standard of living;
and to assure the U. S. competitive strength."
In its prescription for efficient economic growth, the Commission
singled out tax policy, saying;
"Public policies, particularly an overhaul of the tax
system, including depreciation allowances, should seek to
improve the climate for new investment and the balancing
of investment with consumption. We should give attention
to policies favoring completely new ventures which involve
a high degree of risk and growth potential."
What are some of the underlying factors which bear upon the
importance of increasing investment levels in productive machinery
and equipment?
The growth of the American economy has been one of the marvels
of economic history.
In the economic sphere this growth has been marked by a
continued advance in technology, new Inventions, new processes, new
materials and new machinery. And a notable element in the historical
pattern has been the ever Increasing use of machines to increase
output per man hour.
The great role of this factor in the panorama of growth is
suggested by the fact that manufacturing establishments now have
available about 10 horsepower per wage earner, as compared with

L.25 horsepower in 1&79. Net investment in structures, equipment and
Inventories is now equal to about nine thousand dollars for each
employee in manufacturing.
Even though these past accomplishments represent a record of
rhich we can all be proud, we are today facing immense new challenges
ooth at home and abroad. We have large unmet needs on the domestic
3cene. In addition, I need not remind you of our continuing needs
Ln the area of national security — intensified in recent weeks by
bhe uncertain situation in Berlin and at other vital points — needs
bhat require a tremendous quantity of our resources. We are also
heavily committed to assisting the peoples in the lesser developed
countries in their efforts for economic progress. A rapid rate of
economic growth will permit our meeting all of these needs more
easily while minimizing the strain imposed on the civilian private
sector of our economy.
Yet, Instead of an increasing rate of economic growth to meet
these increasing challenges, the nation has been confronted by a
lagging rate of growth. From a historic growth rate of three percent
per annum in gross national product (1909-1956 in constant prices) we
have fallen to two percent in the latter part of the 1950's. In the
last five years Western Europe has grown at double or triple our "
recent rate, and Japan has grown even faster. C.I.A. estimates that
the annual rate growth of the Soviet economy was seven percent during
the »50's.
In his first Message to the Congress, which was devoted to a
program to restore momentum to the American economy, President
Kennedy set out this national objectives
"... realistic aims for 1961 are to reverse the
downtrend in our economy, to narrow the gap of unused
potential, to abate the waste and misery of unemployment,
and at the same time to maintain reasonable stability of
the price level. For 1962 and 1963 our programs must aim
at expanding American productive capacity at a rate that
shows the world the vigor and vitality of a free economy."
Certain fundamental facts disclose the reasons for this emphasis
on renewed vigor and vitality for the U. S. economy. Fifty percent
of our present productive capacity was installed before or during
World War II. More than sixty-five percent was installed before the
Korean War. Thus, of all business plant and equipment less than
one-third is modern in the sense of being new since 1950.
Estimates show that there has been a startling rise in recent
years in the proportion of our national machinery and equipment which
is over ten years old. It now averages more than nine years, and
from 1954 to 1959 the stock of equipment over ten years old rose by
fifty percent. In a dynamic economy that average should be falling
as new equipment is put Into place.

- 5 -

ino
JL O i_

Meanwhile, other countries have been lowering the average age of
their fixed capital. The German example Is the most spectacular —
their proportion of capital equipment and plant under five years of
age grew from one-sixth of the total in 1948 to two-fifths in 1957.
Another indication of a slowdown in U. S. capital formation Is
the levelling-off in business expenditures on plant and equipment.
Recent estimates indicated businessmen planned to spend $34.6 billion
in new plant and equipment in 196l, a decline of three percent from
i960 and of six and one-half percent from 1957.
This pattern is even more disturbing when measured against the
performance of investment levels in productive machinery and equipment
in other industrialized societies, friendly and less friendly.
Our gross fixed capital expenditures (other than housing) have
declined from 12.5 percent of GNP in 1948 to 9.5 percent in i960.
By comparison, the investment ratio In Western European countries
rose from an average of 13.3 percent of GNP in 1951-55 to 15.1
percent of GNP in 1956-60.
Even greater percentages of GNP are said to be devoted to new
machinery and equipment in Japan. This means our manufacturers must
compete against their friendly rivals In the Free World to get a
larger share of export markets and to keep imports from getting a
larger share of our domestic markets, with our machinery and equipment
being replaced at a much slower rate than theirs.
And what about competitors who are not so friendly? In his
10-hour speech to the 21st Congress of the Communist Party in
February 1959* Khrushchev summarized his assessment of the situation
in these words:
"The economic might of the Soviet Union is based on
the priority growth of heavy industry; this should Insure
Soviet victory in peaceful economic competition with the
capitalistic countries; development of the Soviet economic
might will give communism a decisive edge In the International
balance of power."
Against this factual background let us consider how tax policy
for increasing investment levels In productive machinery and
equipment affects the three vital national economic objectives
mentioned earlier.
First, increasing investment levels in machinery and equipment
in the years ahead will help make our present economic recovery a
vigorous and long lasting one. Additional expenditures on
machinery and equipment and the plants and facilities necessary to
house It will create more jobs in the capital goods Industries.
There is a startling association between vigorous and lengthy

JL KJ -W-

- 6-

.p-swings In the economic cycle and a healthy increase in the levels
if capital goods expenditures. Our last three recoveries have
.asted forty-five months, thirty-five months and twenty-five months,
•espectively, in that order. Since World War II approximately
ourteen quarterly periods, or twenty-three percent of the total, have
teen periods of recession. Already some economic forecasters are
rarning that the rising economy may level off in mid-1962 or early
.963, and that there Is a real danger of another slump. The
irojectlon of a healthy increase in Investment levels for machinery
ind equipment, whether for modernization or expansion, would be
idded insurance that the current recovery would reverse the trend to
iver shorter up-swings and give promise for a healthy and more
enduring recovery.
Second, increasing investment levels In machinery and equipment
rould do double duty in increasing our rate of economic growth.
!he figures previously cited suggesting a relationship between
equipment investment and economic growth merely reflect the
>roposltlon that expanding the productive base, or Improving Its
efficiency, or both, should lead to higher output. As investment In
>lant modernization and expansion contributes to a larger export
;rade for our nation, as It puts people to work in the capital goods
.ndustries, as It preserves and expands our domestic market through
sompetitlve efficiency, it contributes to the economy's long-term
;rowth.
Third, Increasing Investment In the modernization of machinery
md equipment Is vital to a long-term solution of our newest economic
>roblem bound up in the phrase "balance of payments." If the nation
.a to finance the maintenance of our military forces overseas, as
rell aB finance our investment abroad, and that minor portion of our
'orelgn aid which Is In dollars, it must sell more merchandise
ibroad than it buys — at least $6 billion more. This places a high
>remlum upon the competitive position of U. S. based production In
•elation to foreign manufacturing. The simple truth is that the
K S., to a large extent, is depending on the aggressive, competitive
Irive of American business to meet the underlying problem behind our
>alance of payments deficits without diminishing our national
lecurity and world position.
Deficits in our International balance of payments totalled about
>11 billion In the three years 1958-60.
Lately, however, as a result of many actions taken by the
;overament, there has been some Improvement In our balance of payments
dtuation. But the heart of the problem Is our merchandise trade
tccount — that is where we make or break. Earlier this year our
lerchandise trade surplus was running at an annual rate of $6
)illion. That surplus, however, reflects recession conditions at
lome early this year during a time of boom abroad — a temporary

- 7-

1U!-'

situation which holds imports down and increases exports. As our
recovery progresses our imports will rise and cut into that surplus,
so we cannot expect continued improvement without all-out effort.
The Administration has stepped up services to exporters and we
are putting together a comprehensive export insurance program. But
a real effort is needed on the part of business to continue to
improve its share of foreign markets with the competitive spirit
comparable to the drive that created our vast domestic markets.
If this drive is to be successful American production must be
competitive, not only in quality, but in price as well. We don't
have to be the cheapest, but we can't afford to be priced out of the
market at home or abroad.
That is why every effort must be made to avoid out of line
Increases in prices or wages; but that in itself won't be enough.
It won't be enough because our competitors in Western Europe and
Japan have been modernizing their equipment faster than American
manufacturers and are cutting unit costs and improving quality in the
process to add to the advantage they have in relatively lower wage
scales.
So, wholly apart from the question of expansion of capacity to
meet growth needs, there is a great stake in the modernization of
our manufacturing equipment.
Viewed against the background of a declining or lagging rate of
Investment in this vital sector as compared to other industrialized
societies, friendly and less friendly alike, we ask ourselves what
do they have that we haven't.
Now, perhaps there are many facets to a full answer to this
question. But tax experts, businessmen, economists, responsible
public officials in the Executive establishment in this
Administration and the last one, as well as experienced observers
in the responsible committees in Congress, all generally agree
that one of the important contributory factors to America's lag in
this vital field in recent years is the difference in tax policy for
machinery and equipment in our country and that followed by other
Industrialized countries.
The depreciation allowances authorized for Federal income tax
deductions in this country are probably among the most limited in
the world. As one highly qualified student (Professor Dan Throop
Smith) puts it in a recent analysis:
"Other countries, in order to minimize tax barriers
to economic growth, have established depreciation rates
for machinery and equipment which are based on life
estimates probably appreciably shorter than the average
lives in actual use, though they are not unrealistic at

- 8a time of great technological change. In addition to
shorter life estimates, many countries allow one or
more of the following: revaluations and special
allowances to offset higher replacement costs, total
depreciation in excess of one hundred percent of cost
regardless of price changes, initial allowances in the
year of acquisition which make possible a very rapid
recovery of an investment in machinery though they do not
give total allowances in excess of cost, and special
additional allowances above cost."
These other countries typically give shorter life estimates for
depreciation than those contained in the "Bulletin F" of the Internal
Revenue Service, last revised in 1942, and many of the countries
also give additional tax allowances or Incentives in the year of
acquisition. The competitive disadvantage of U. S. manufacturers In
both categories is important to note. This Administration intends
to move to diminish this disadvantage in both facets to effect an
over-all depreciation reform. In so doing it seeks a tax policy for
growth and productivity.
The President's program of tax revision delivered to the Congress
last April 20 contemplated this two-pronged attack. A major aspect
of that program provides for a new incentive to investment by allowing a tax credit to those who invest in more modern machinery and
equipment. This proposal represents a major innovation in American
tax law.
At the same time, the President noted that the proper
determination of the length of an asset's life and proper methods of
depreciation have a normal and important function in determining
baxable income, wholly apart from any considerations of incentive.
ffe stated that "A review of these rules and methods Is under way in
bhe Treasury Department as a part of Its over-all tax reform study
bo determine whether changes are appropriate and, if so, what form
ihey should take. Adoption of the proposed incentive credit would
Ln no way foreclose later action on these aspects of depreciation."
Here Is a brief status report on both aspects of the proposed
>rogram#
Extensive hearings have been held in the Ways and Means Committee
»f the House of Representatives which has released a tentative draft
»f legislation for "discussion" purposes that includes the tax credit
nvestment Incentive feature. Chairman Mills has promised that a tax
evlsion measure Including this feature will be the Committee's first
rder of business in January.
The Committee's discussion draft does not contain the Incentive
redit in exactly the form the President recommended in April, but
he Treasury Department believes the need for an Investment stimulus
s so urgent that the modified proposal should receive our full

i nc
wtfk, \m?

^:'

- 9upport. The discussion draft provides for a credit against income
ax equal to eight percent of the cost of new investment. The
redit would be allowed for qualified Investments where the property
urchased has a useful life of at least six years. The credit is,
a general, limited to tangible personal property used In manufacturing,
xtraction, transportation, or communications.
It is estimated that the revenue loss from the investment credit
roposal in its present form would be approximately $1,1 billion
anually. It is proposed by the Treasury — and the President
nsists — that the enactment of the investment tax credit be
ccompanied by the correction of some of the serious defects in the
ncome tax structure which will provide revenue gains sufficient to
ffset the cost of the credit and keep the revenue-producing
otential of our tax structure intact. The measures under active
onsideration include a withholding on interest and dividends, repeal
f the dividend credit and exclusion, a legislative tightening of the
rovision on expense accounts, the withdrawal of capital gains
reatment on the disposition of depreciable property to the extent
he depreciation has been deducted from such property by the seller
ti previous years, the equitable taxation of cooperatives, mutual
asualty companies, mutual savings institutions, and the removal
T some special privileges allowed on foreign income, particularly
a the abuse of so-called "tax havens."
Use of a tax credit is not the only method available to
icourage a higher rate of investment. This method was selected,
Dwever, as the method which gives the greatest inducement to investsnt per dollar of revenue loss. In this respect the credit is
aperior to a corresponding reduction in the rate of the corporate
icome tax or to a corresponding allowance for accelerated
spreciation. In view of the nation's heavy domestic and inter•ttional commitments, tax relief to stimulate investment must provide
le maximum effect per dollar of revenue lost.
The investment credit has other advantages. It Is a tax off5t, not a deduction from gross receipts made In the computation
* net income. The credit will not be recorded on company books as
cost of operation. The credit will therefore be less likely to
Lstort the costs of business firms and thus influence business
jcisions and stock market appraisals. In particular, the credit
s not likely to become the basis for Increased prices. This
Ivantage of the credit over accelerated depreciation is of great
.gnificance in our effort to maintain the International strength
* the dollar.
The widespread benefits of the investment credit will be both
imediate and long-range; it will make definite contributions to
icreasing employment, capital formation, and the national output,
itimates
the
actual
of the
in Inducing
additional
ivestmentof
are
based
on effect
calculation
ofcredit
Investment
response
to

i 07
- 10 (l) higher after-tax profitability and, (2) increased cash flow
available for investment. Response will also vary with economic
conditions, being substantially greater in recovery phases of the
economy. In addition to adding to gross national product through
investment, the investment credit should have a multiplier effect
due to spreading of the incomes generated in the purchase and
construction of new facilities. This, in turn, should expand
aggregate demand and help reduce existing over-capacity, thereby
making industry more receptive to favorable decisions on expansion
and modernization projects.
It should have beneficial short-term and longer-term employment
effects, providing jobs for the workers in the process of providing
new machinery and equipment and the additional investment to back
up many productive jobs. Obviously, It will increase the rate of
capital formation.
Much of the early opposition to the investment credit proposal
came from those who felt that in its original form it was too
complicated and discriminatory, because of the high premium given
to those who expended a sum in excess of current depreciation
allowances. With the Administration's willingness to accept the
preference of many members of the Ways and Means Committee for a
credit against income tax equal to eight percent of the cost of
new investment regardless of its relationship to current depreciation
allowances, It is believed that much of the original opposition has
evaporated.
One other source of concern and opposition was the fear of some
that the adoption of the investment credit would foreclose progress
on the redeterminations of the proper length of life of plant and
equipment. This fear should now be dissipated in the light of new
and clear evidence to the contrary. Those who opposed the credit
because they viewed it as an alternative to depreciation reform
should be reassured by the White House statement yesterday
(October 11) in connection with the modification by the Treasury
Department of administrative guidelines governing depreciation
allowances for tax purposes in the textile Industry.
Pursuant to a review of the increasing rate of obsolescence In
this area, the old administrative standards for estimated depreciable
lives of textile machinery are being adjusted. Specifically, the
estimated useful lives suggested by the Internal Revenue Service for
most textile machinery and equipment have been reduced from
twenty-five years or longer to fifteen years, and in some cases
twelve years. The resulting speeding up of depreciation deductions
to reflect current technological conditions, will be of significant
help to the industry in enabling it to modernize, meet foreign
competition, and provide jobs.
But
the industry,
significance
of this
announcement
goes far beyond the
textile
Important
as that
may be

JL U ._•

- 11 As the announcement indicates, the Treasury's study of
depreciation allowances is proceeding with respect to all industries,
the study of depreciation schedules for the textile industry having
been accelerated because of the Presidential priority given to It on
May 2 of this year.
Whether or not adjustments downward in the estimated lives of
assets in other industries is suggested will depend upon the
results of the studies by the Treasury Department of other industries„
It is expected that adjustments will be suggested wherever recent
and prospective technological developments can be shown to be opening
the gap between existing practices and the requirements imposed by
such developments. The main objectives of the studies under way are
to make an appraisal of the realism of asset lives and salvage
values currently in use for computing depreciation. The accuracy
of present allowances in measuring net income under present conditions
bears directly upon the fundamental question of what the taxpayer
properly owes.
Accordingly, adjustments in depreciation rates because of changes
in permissible lives of assets should not be confused with the
investment tax credit or other measures designed primarily to
provide incentives for modernization and expansion of capital equipment.
However, where they become applicable, liberalized depreciation
allowances will incidentally facilitate and encourage modernization
and expansion of investment in machinery and equipment and other
capital facilities.
The nature of the depreciation studies being carried forward
as a part of the long-range tax reform program of the Treasury
Department may be of general interest in view of the recent action
on textile machinery and the prospects in other areas.
In July i960, the Treasury Department requested approximately
2,700 large corporations to furnish information on the amount of
their depreciable assets, reserves for depreciation, depreciation
deductions, and fully depreciated property, the service lives of
different types of depreciable property, and the extent to which the
new methods of depreciation provided by the Internal Revenue Code
of 1954 had been adopted. In addition, a questionnaire was sent to
these corporations requesting Information on depreciation practices,
experience under the present law, and opinions on various alternative
proposals for revision of the depreciation system. In cooperation
with the Small Business Administration, the questionnaire portion
of the survey material was also mailed to about 7,600 small
businesses. Completed material was furnished by about 2,000 of the
large corporations and 1,300 of the smaller firms.
Another study also begun in i960 involves a tabulation of the
detailed depreciation Information submitted on 1959 corporation tax
returns. This study, based on a representative statistical sample,
will provide more detailed information by asset type, year of
acquisition, and depreciation method than that obtained from the

- 12 -

ipq
="» W v«f

Treasury Depreciation Survey. An analysis of the data obtained from
these studies is being made by the Treasury staff and by consultants.
Data provided by these studies will enable a general comparison
to be made between the depreciable lives used by some taxpayers and
the lives listed in Bulletin F. Information will be available
concerning the variation in depreciation rates used on similar
assets among firms within the same industry and among various
industries. For the first time, detailed data on the use of the new
depreciation methods will be provided. The questionnaire portion of
the Treasury Depreciation Survey will reveal the general opinions
of taxpayers as to whether present depreciation allowances are
reasonably satisfactory, the major reasons for any inadequacy in
depreciation, as well as opinions concerning various proposals for
changing the tax treatment of depreciation.
The National Income Division of the Department of Commerce Is
preparing a detailed breakdown of corporation purchases of plant
and equipment year by year from 1914 to 1959. Comparison of this
material with the data obtained from corporate tax returns is
expected to permit calculation of the average actual lives of assets,
which can be compared with tax depreciable lives. The Business and
Defense Services Administration in the Commerce Department is also
assisting the Treasury in a statistical study of the rate at which
machinery and equipment loses its economic usefulness as a basis
for determining realistic patterns for spreading the cost of an
asset over Its estimated service life.
In connection with the study of the administration of the
depreciation provisions, information has been obtained concerning
changes made in salvage value and life of depreciable assets upon
examination of corporate returns by the Internal Revenue Service.
This study will permit an analysis of the classes and length of life
Df assets for which the estimated useful lives and salvage values
have been materially altered, as well as the reasons for such
adjustments.
The Treasury Department has also obtained material on the
tepreciation systems of various foreign countries in order that
;omparisons can be made with the United States with respect to
lethods of depreciation permitted, typical depreciation rates,
iccelerated depreciatidn provisions, investment incentives, and the
treatment of gains or losses on the disposition of depreciable
issets.
Questions as to the rate of change of capital productivity and
abor productivity, the rate of technological obsolescence, and the
ffect of changes in-the price level are being considered^
The results of these studies and analyses will be made available
o the appropriate committees of Congress during the next session
ither or
ature
in connection
as a basis with
for legislative
administrative
proposals
action in
ofthis
a corrective
area which

- 13 rould be a part of the President's comprehensive program for tax
•evision and reform.
To the degree that this course of action results in a reduction
.n the average tax lives of capital goods and, hence, the increase
.n rates of depreciation now in use, there will be considerable
iconomic significance. Depreciation provides increased funds to
•eplace capital equipment, particularly where rapid obsolescence is
i major factor. The faster the depreciation deductions the
;reater the flow of internal funds from business operations and the
;reater the prospects of securing modern plants. Thus; in a
tractleal sense faster depreciation is likely to set the stage for
aster replacement. The fact that full depreciation can be taken
,nd the investment recovered over a shorter period of time is an
.nderstandable inducement to commit funds to the investment. The
horter the term, the greater the confidence in payout. Faster
epreciation also facilitates financing of new capital outlays since
unds arising through depreciation may be used to repay debt
.ncurred to purchase a capital asset. It also increases the
pportunity for capital investment by shifting taxes to later years.
CONCLUSION
With this two-pronged approach toward a tax policy for Increasing
nvestment in productive machinery and equipment, the investment tax
redit and an adjustment of the lives of capital assets for
epreciation purposes to conform to existing conditions and
echnological obsolescence — there will be a real beginning towards
ttuning tax policy to two of our major national objectives —
ealthy economic growth and increasing competitive efficiency. But
s was indicated in the beginning, this is but one step in a long
rogram of comprehensive tax revision. True, It is one which
eserves a high priority of treatment, which it is receiving.
bwever, there are many other areas for constructive reform to keep
ur tax system up-to-date and maintain its equity. If the nation
s to make progress in these areas in the years ahead, it will require
0O0
he increasing concern of the average
American that tax policy conform
o the national interest rather than special interest.

1i

S T A T U T O R Y D E B T LIMITATION
As of September 30, 1961
c

••

,,

r

.

Vashinyrnn, O c t J O ,

1961

of that Artand the f ^ l J ^ T 7 * 8 ^ A " ' a S a m e n ^ d Provides that the face amount of obligations issued under authotitv
anteed obuVaMnnc A
amount of obligations guaranteed as to principal and interest by the United States (except such S -

(Act of junf30 1Q?9 muys C tkleYl^ ^ S K °f the T J M U ^ ) ' "sha11 ?otexceed « the a ^ r e 8 a t e $285,00o!o00,000
demntion v«1n«J 9* ui?' C:' •e 31J sec ' ^ 7 b ) ' oufstanding at any one time. For purposes of this section the current reshafi £ Y
•!. J y °. bh r tlon l s s u e d o n a d i s c o u n t basis which is redeemable prior to maturity at the option of the holder
T h e Act
oeriod e ^ n 8 ! " e d TS/tSi ^^T-",° f J une 30> ^ 6 1 (P- L. 87-69 87th Congress) provides that during the
3
Sreased b y H 3 J 0 O OOO^OO.
*^
° ' 19 ' * " ^ ^ l i m i t a t i ° n «285,000,000,000) shall be temporarily in„„A VL? f?.11(?win8 tabl e shows the face amount of obligations outstanding and the face amount which can still be issued
unaer tnis limitation :
A^.^.^ ^«
,
$298,000,000»OOC
Tnf , ,
L
Total face amount that may be outstanding at any one time
* U
Outstanding Obligations issued under Second Liberty Bond Act, as amended
Interest-bearing :
Treasury bills $41,938,824,000
Certificates of indebtedness
5,509,218,000
Treasury notes
.
6 5 ,187 . 9 0 2 . 0 0 0
$112,635,944,000
Bonds Treasury
.
79,289,062,150
•Savings (current redemp. value)
4 7 , 670, 040,498
Depositary
149 , 283 , 500
R. E. A. series
20 , 935 , 000
Cggstment f$**±
,
3
Special Funds ? x e j -S n ° e r i e S
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

5i?SOi7ffiOOO
6 , 9^3 ,909, 000
7 *8451126 , 000
30,217,837.000

132,680,076,148
450,000,000

45.006,872 .000
290,772,892, 148
372,152,698

50,4-28,265
7^7,136
2,054,000,000
57,652,200

Guaranteed obligations (not held by Treasury):
Interest-bearing:
Debentures : F. H. A. & DC Stad. Bds._
270,095,950
Matured, interest-ceased
532,075
Grand total outstanding
Balance face amount of obligations issuable under above authority

2,162,827 ,601
293,307,872,447

270,628.025
2 9 3 . ^ 7 8 . 500, WL
4,421,499,528

Reconcilement with Statement of the Public Debt September 30» 1961
(Date)
(Daily Statement of the United States Treasury,
September 2 9 , 1961 )
^

,.

(Date)

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

^
2 7 0 6?8 025
r
-—
» Qa'rtfit
"*" f^*u» ?»
' o ^ n'JiT?

293 ,578,500 ,^f*

D-268

STATUTORY DEBT LIMITATION
AS»f September 30„ 1961

~L ~
A

„

Washinpfnn, O c t . J Q . 1 9 6 1
t .k-?ef?i°n«3 Sf S f c o n d 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 ot 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.
* » , • • /
v
i
The following table shows the face amount of obligations outstanding and the face amount which can still be issued
under this limitation:
<fr/-»no />«•> ^n^ « ~ ~
„, ,,
.
„
$298,000,000,000
Total face amount that may be outstanding at any one time
Outstanding Obligations Issued under Second Liberty Bond Act, as amended
Interest-bearing ;
Treasury bills $41,938,824,000
Certificates of indebtedness
5,509,218,000
Treasury notes
65,187,902.000
$112,635,944,000
Bonds Treasury
79,289,062,150
•Savings (current redemp. value)
4 7 , 670, 040,498
Depositary
,
149 ,283 » 500
R. E. A. series
20,935,000

Ofira^ttfoken Serxes
Special Funds Certificates of indebtedness
Treasury notes
Treasury bonds
Total interest-bearing
Matured, interest-ceased

5,5?O,7S?,00O
••••••••.•••••••••«
6,943,909 > 000
7 * 845 »126 , 000
30,217,837,000

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

.

132,680,0?6,lW
*fpO, 000,000

45.006.872.000
290,772 , 892,148
372,152,698

50,428,265
747,13.6

2,054,000,000
5 7 ,652,200

Guaranteed obligations (not held by Treasury);
Interest-bearing:
Debentures : F. H. A. & DC Stad. Bds._
270,095»950
Matured, interest-ceased
532.075
Grand total outstanding
Balance face amount of obligations issuable under above authority

2 ,162,827 ,601
293,307,872,447

270,628.025
'.

Reconcilement with Statement of the Public Debt September ^0, 196l
(Date)
(Daily Statement of the United States Treasury,
September 2 9 , 196l )
-.
,.
(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 —
_

293,578,500,472
4,421,499,528

293,7^9,860,978
.—2/1^^0,02,2
29***, 0 2 0 , 4 b 9 » 0 0 J
7^-1 n9°0|;>J1

293,578,500,472
-. D-268

Western Europe and Japan, he noted, have recently had a
significantly higher level of investment in productive equipment than our own, and this undoubtedly contributed to their
rapid growth.
As for the reason behind lagging American rate of
investment in productive equipment, he noted there is general
agreement "that one of the important contributory factors to
America's lag in this vital field in recent years is the
difference in tax policy for machinery and equipment in our
country and that followed by other industrialized countries.
In both areas of tax policy affe/cting investment in
oductive equipment, he added, American manufacturers are! at
a disadvantage compared to thew^foreign competitors.
"This Administration," he said, "intends to move to diminish
thr'.s disadvantage in both facets to effect an over-all
deoreciation reform. In so doing, it seeks a tax policy for
growth and productivity."
0O0

11

Second, they contribute to improving the United States
balance of payments position, by making our exporto more
competitive ?m&=£^£2iii^^ MStmm&s-* The United
/\

States, he said, is depending to a large extent "on the
aggressive, competitive drive of American business to meet the
underlying problem behind our balance of payments deficits" by
improving sales in world markets abroad ^nd *ss±xrat foreign
goods at home.
Third, they contribute to increasing the long-term growth
rate of our economy. He noted that our national output, which
grew at a rate of three per cent from 1909 to 1956, *W, off
during the «g*b few years to about two per cent. "In the last

five years Western Europe has grown at double or triple out our
recent rate, and Japan has grown even faster." He added that
the U. S. Central Intelligence Agency has estimated the growth
rate of the Soviet Union during the 1950'B at seven per cent.

Progress in these two areasu&~ investment ^credit and

-j~

•6ep^e^4^%4^m-Pe#eM — marks a real start toward a tax policy
which will promote healthy economic growth and increase the
U. S. competitive efficiency in world markets, he told the
retailers.
Such changes in tax policy to increase the level of investment in productive equipment, Under Secretary Fowler said,
promote three national economic objectives of vital importance:
First, they contribute to the strength of our present
economic recovery. Noting that recent recoveries have been
getting shorter, he said that increased levels of investment ^n
^,v-^-i will not only create jobs in the capital goods
industriesy--btst--wili «givc momcntnn tn frlm prnrnnt rooevery
.ej^^andlng-^H^Hmodernisins our facilit4*ft-and--JJicre^^
*eTf

1 1 c:
j- J- •--

The success of suchjjreforml which the Administration will
begin sending to Congress some time next year, he said, "will
require the increasing concern of the average American that tax
policy conform to the national interest rather than special
interest."
"To achieve a tax policy in the public interest, there
must be a national interest in tax policy," he said.
He voiced Treasury support for the eight per cent investment credit contained in tentative draft legislation which the
chairman and a majority of House Ways and Means Committee have
announced will receive early action next year. Opposition to
this proposed legislation on the ground that it might be a

substitute for frfre-arPP!ftraftftfr depreciation.favored by many

A
manufacturers "should now be dissipated in the light of new and
clear evidence to the contrary," he said, referring to the
textile industry decision.

For use in PM papers of Thursday, Octobei/ll

Under Secretary Henry H. E

New York, Oct. 1

resses Retail Federation

Henry H. Fowler, Under Secretary of

the Treasury, said Thursday the Administration has launched a (U\

•brT.o attac: 1 the problem of increasing productive investment
to spur U. S. economic growth. He cited the proposed change in
A
,.Vv'

T

JT

A2 tax credit for modernizing
tax policy to give- businessmen at

productive equipment and machinery, as well as Treasury ettidi
i-j ,_ ._, 4-

CV^M, ^ocol^wato^ tax depreciation B?Iov)flK^s, which

'

^\TX'^o ^> N^ "VA. * V wvfc-<*<7t_ \Lir\

*•#the ?*s« textile industry pol jinyi annmirffrftri
Wednesday by the White House.
In an address to the 1961 Fall Conference of the American
Retail Federationfr-T~fehe said such a "two-pronged approach
«^v.

toward a tax policy for increasing investment in productive
machinery and equipment" is merely the beginning of a long-range;
comprehensive program of tax revision and reform.

A
TREASURY DEPARTMENT

H8

Washington, D. C.
«/« „WT. October 12, 1961
FOR RELEASE PM PAPERS QP THURSDAY, OCTOBER ll;
UNDER SECFgypflPv ^Iff^ FOWLER ADDRESSES RETAIL FEDERATION
Henry H, Fowler, Under Secretary of the Treasury, sjild
Thursday the Administration has launched a broad attack on the
problem of increasing productive investment to sp>*r U. S.
economic growth. He cited the proposed change/in tax policy to
give businessmen a tax credit for modernizing productive equipment and machinery, as well as Treasury/studies looking toward
/

accelerated tax depreciation allowances, which have already

developed the new textile industry policy announced Wednesday by
/

the White House. /
/

He called the governments
iment' policy a "two-pronged approach
toward a tax policy for/increasing investment in productive
/

machinery and equipment" is merely the beginning of a long-range,
/ //

comprehensive/program of tax revision and reform.
/

Undersecretary Fowler spoke at a luncheon during the 1961
'

/

/ / "^

Fall Con/erjence^f the American Retail Federation held in New

t^—

XL <t

TREASURY DEPARTMENT

119

WASHINGTON, D.C.
October 12, 1951
FOR RELEASE 12:30 P.M., EDT
THURSDAY, OCTOBER 12, 196l

UNDER SECRETARY FOWLER ADDRESSES RETAIL FEDERATION
Henry H. Fowler, Under Secretary of the Treasury, said Thursday
the Administration has launched a dual attack on the problem of
increasing productive investment to spur U. S. economic growth and
competitive efficiency. He cited the proposed change in tax policy
to give businessmen an investment tax credit for modernizing productive equipment and machinery, as well as Treasury action involving the downward adjustment in the lives of capital assets for
tax depreciation purposes, which was announced for the textile
industry Wednesday by the White House,
In an address to the 1961 Fall Conference of the American
Retail Federation In New York he said such a "two-pronged approach
toward a tax policy for increasing investment in productive machinery
and equipment" is merely the beginning of a long-range, comprehensive
program of tax revision and reform.
The success of such a reform program, which the Administration
will begin sending to Congress some time next year, he said, "will
require the increasing concern of the average American that tax
policy conform to the national interest rather than special Interest.
"To achieve a tax policy In the national interest, there must
be a national Interest in tax policy," he said.
He voiced Treasury support for the eight per cent investment
credit contained in tentative draft legislation which the Chairman
and a majority of the House Ways and Means Committee have announced
will receive early action next year. Opposition to this proposed
legislation on the ground that it might be a substitute for
depreciation reform favored by many manufacturers "should now be
dissipated in the light of new and clear evidence to the contrary,"
he said, referring to the textile Industry decision.
Progress in these two areas of broad depreciation reform —
investment tax credit and the downward adjustment in the lives of
capital assets to reflect existing practices and technological
obsolescence -- marks a real start toward a tax policy which will
D-269

- 2 promote healthy economic growth and Increase U. S. competitive
efficiency in world markets, he told the retailers.
Such changes in tax policy to increase the level of investment
in productive equipment, Under Secretary Fowler said, promote three
national economic objectives of vital importance;
First, they contribute to the strength of our present economic
recovery. Noting that recent recoveries have been getting shorter,
he said that increased levels of investment in production
facilities for either modernization or expansion will create jobs
in the capital goods industries and contribute to a more healthy
and enduring recovery.
Second, they contribute to improving the United States balance
of payments position, by making our position more competitive in
comparison to other industrialized countries. The United States,
he said, is depending to a large extent "on the aggressive,
competitive drive of American business to meet the underlying
problem behind our balance of payments deficits" by improving sales
in world markets abroad and in meeting the competition of foreign
goods at home.
Third, they contribute to increasing the long-term growth rate
of our economy. He noted that our national output, which grew at a
rate of three per cent from 1909 to 1956", has fallen off during the
last few years to about two per cent. "In the last five years
Western Europe has grown at double or triple our recent rate,
and Japan has grown even faster." He added that the U. S. Central
Intelligence Agency has estimated the growth rate of the Soviet
Union during the 1950fs at seven per cent. Western Europe and
Japan, he said, have recently had a significantly higher level of
investment in productive equipment than our own, and this undoubtedly
contributed to their rapid growth.
As for the reason behind lagging American rate of investment
in productive equipment, he noted there is general agreement "that
one of the important contributory factors to America's lag in this
vital field in recent years is the difference in tax policy for
machinery and equipment in our country and that followed by other
industrialized countries,"
"This Administration," he said, "intends to move to diminish
this disadvantage in both facets to effect an over-all depreciation
reform. In so doing, it seeks a tax policy for growth and
productivity."
0O0

121
wm mtMM
RESULTS OF

4. n. wmnms.

rnu^r

is, mi

wasoif «i w&ttxi im armun

T&o Troaainry Ikpartaont am*otfnced loot ovantug that the tenders for two aeries of
trmmmrf M l l a , on© aariaa to bo as additional imm of too till® dated «WLf 20, ifft
aad tfeo « U M T oorlo* to bo 4al«<t detobor 1.9, ljtil, vbioli wort off#r#d m 0©t@b«r U ,
waro opemd at too Fo4orol Sooarvo Bastes on Ootobor 16* Toiaiora waro iarlt«4 for '
£l,ld0,OQO,OQOt or tlwroo*mt« y of n-dojr bllla « M K for 1600,000,000, or tt»raobotft
of l$?-day bllla* ?ho stalls of tho two oorloo aro aa follows

nuns OF 4cesff&
coftmnn BIDSS

162-d&y frmmrr

ft-do? Trooaiiry bilia

bills

kpprox,
are*. Ipltr.
Prica

HI**

&*ormg«

n*3m

t.H2s y

»AI 2.71**
98.610
2.71MJ/

1 taadora toUllac t$60,Q©0
« parodist of tho aoomtt of tt-do? bills bid for at tbe low price was
81 percent of tho si»oimi, of lot-4ojr bill® bid for at tho low pried was accepted
TOTAL remits *mm fm km uxsarm IT mmmi wmm $EKtic»f
4ppli«d For
Applied For
Biairiot
lottoa
Philadelphia
Clovolaat

1,64$,*53,000
3l,57*,ooo
&,oo»»000
w$$mtm&
is,ft&,ooo

1,015,000
11,355,000
tt,otft,ooo

r

r *,*•,** z,m*m

2$9t%m
Sff,?23,000
10,320,000
i§m9m
7,433,000
Atlanta
35
«*$,ooo
f
Chicago
30flMfooe
$i9m9m
l*2,10t,QOO
St. Loaio
lftf190#000
T,75i,W
7,239,00®
31,109,000
Mlaitoapolio
51*731,000
$,139,000
3»37?#M
ift,9tt,o<x>
lanaaa City
*S,*t*,ooo
$*,3®?,GQ0
k9m9m'
36,0*9,000
Ball**
o5,tf6,000
1,339,000
Soa Frontlooo
15,130,000
15,130,000
t,t*9,000
U».3«S»000
accepted
at Urn average price of 9JJJJ
b/ ipotitivo
Zmlw&m toikfora
mk\9hm9om
l5,8lS,000
!2 f 2»noncompetitive
11,100,033,000
^ tl,Ht,Q7f
,000 price of 98.611
9 0tt f OOO
Inclcdes 160,200,00©
tenders accepted
atfefcaaverage
MOIWOIK!

M§t222
On a coup©** la«m« of tH® mmm lemrth arid for th« ant®
amount Imraatai, tia retort ej
these billa woidd p r w M a ylalda of 2.1*31, for tha 91-4*9 till*, aai t.Slf,ftfI
ld2«d*y bill®* lufttraat rataa an bills ara qiwiad ia t « » « of 'basic I I M N M * fi^:
tlM r«t«um ral«t€«S to Uio faoo mmmt of ill® till® paya^la at jtafcariiy ***&#* ^fj
tha amount iiswatad and tiioir longih in aotoal aaator of 4ay» relaiad to a 3®0*w
jiiar* In eontra»t, jrlali»> oa eortlflaatao, not**, a** bomla aro oon|m%4Nl la ***»
of iaUroot on too amount iafraotodf ar«S rolato tao ambor of 4m$* rm*mm
^J*
intar#at pa^piast poriod to tfeo actual awa'fear of d«|« ia tkm porloi, wlUi a^i**181
coxpattntfiiiK if »or® than, oua ©oypora period ia im®l**4»

'i

^//•//,

/, '7 //

*) ^a.no

TREASURY DEPARTMENT
WASHINGTON, D.C
)R RELEASE A, M. NEWSPAPERS,
tesday, October 17, 196l.

October 16, 1961

RESULTS OF TREASURY'S WEEKLY BILL OFFERING

The Treasury Department announced last evening that the tenders for two series of
reasury bills, one series to be an additional issue of the bills dated July 20, 196l,
id the other series to be dated October 19, 196l, which were offered on October 11,
jre opened at the Federal Reserve Banks on October 16. Tenders were invited for
L,100,000,000, or thereabouts, of 91-day bills and for $600,000,000, or thereabouts,
f 182-day bills. The details of the two series are as followss
INGE OF ACCEPTED
3MPETITIVE BIDS?

91-day Treasury bills
182-day Treasury bills
maturing January 18, 1962
maturing April 19, 1962
Approx. Equiv<
Approx. Equiv.
Price
Price
Annual Rate
Annual Rate
High
96.6214 a/
99.U05
2.722%
T353$
Low
99.395
98.613
2.7WW
2.393%
Average
99.398
98.618
2.731$ 1/
2.382$ 1/
a/ Excepting 3 tenders totaling $960,000
uk percent of the amount of 91-day bills bid for at the low price was accepted
8JU percent of the amount of 182-day bills bid for at the low price was accepted

)TAL 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
$. 33,Ui»9,000
1,61*5,1*53,000
31,575,000
29,1*1*6,000
10,620,000
18,855,000
192,390,000
52,731,000
25,92l*,Q00
1*5,896,000
15,130,000
119,395,000
$2,220,861*,000

Accepted
i Applied For
Accepted
15,697,000 t ft 3,7W*,000 $ 3,20U,000
7lli,Ol5,000 s
899,723,000
1*57,613,000
11,355,000 2
7,633,000
2,533,000
26,022,000 :
30,li8U,000
25,23l*,000
10,320,000 *
7,758,000
7,758,000
i5,li85,ooo :•
5,739,000
It, 939,000
122,108,000 j
9li,307,000
57,207,000
31,189,000 1
8,239,000
7,239,000
ll*,9l*l*,Q°0 s
6,229,000
3,379,000
36,01*9,000 J
15,818,000
6,928,000
15,130,000 :
1*, 81*0,000
1*, 81*0,000
87,719,000
27,558,000
19,1*83,000
$1,100,033,000 b/ $1,112,072,000
$600,357,000 G/

Includes $21*1,1*00,000 noncompetitive tenders accepted at the average price of 99.398
Includes $60,200,000 noncompetitive tenders accepted at the average price of 98.618
On a coupon issue of the same length and for the same amount invested, the return on
these bills would provide yields of 2.1*3$,. for the 91-day bills, and 2.81$, for tho
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 •

1 OQ

- as ^ — M o r e tests lie ahead, aad ©or eeoa*»*i« atwiigtl* **** *>*** *
major role la determining © w capacity to respond, fto Federal
Government Is fully aware of Ita responsibility to aaiataia and to
Increase that streagth.

We latomi to bull* it by *«tiwly iwesetiai

a growiag eeoaoay, ettilo ewldia* the waate of aatioaal resource*
that coaes froa excessive spending.

Ia this eay, |OYerament aad

private initiative, working together, eon assure aa ever stress^
Hatioa la the critical aoaths aad years that lie? ahead.

0O0

124
- 37 i* as ay rervent hope — aad that of the President — that both

iadustry and labor will seep the national interest uppermost ia the

einds. The automobile aakers who are maintaining their price levaU,
as sell as tee steel iadustry, which appears to be relying upon a

rise ia its production rate to cover a reseat wage iaerease, are bo
making important contributions to our aatieaal sell belag.
This is a very critical time — a time to forego unnecessary
wage or price increases aad, by so doing, to perform a very real

public service. The outlook for our economy is good, ire are enteri
a period of promising growth, which will provide benefits for all
segments of our Nation — for labor, for management, aad for too

consumer. But excessive increases in prices or wages eould endanger

through strong effort aad self-restraint oa the part of the private
as well as public sectors of the economy.
Ia recent months we have seen the will aad the capability of
this Nation challenged — in the Jungles of South East Asia — in
the city of Berlin — aad ia the dark dominion of outer space.i

125^

price spiral, im which prices aad wages ©hase omen #ther ever highe
As I poiated out earlier, tho current deficit feme m* mm^m^MtU.
tle&ary danger of tho classic type. But we must be particularly
wary at this time of the second type of inflation: The wage-price
spiral.
Wage increases in excess of productivity gains — when met throng

price rises — present a rami danger to our continued economic grown

So do unnecessary price lacrosses. Either earn cause us to prise ou

selves out of world siarkets, with truly catastrophic results for a
us here at home. This fact was clearly ia the minds of the central

beakers aad finance ministers with whom I talked last month ia Vien

at the meetlags of the International Beak mad Fund, ihile none ol t
thought that our current budgetary situation signalled a danger of
inflationary developments in the Halted States, they iavariably —

aad unanimously ~~ expressed deep concern over whether we could hol
our price levels la the face of, steady pressures for wage-price
inflation.

•12S

Personal Income la August rose to aa annual rate
hundred ml

billion three

record, if we i

million do!3a*s

the special dividend paid oa National Service
the July figure. The August rate la
million dollars higher thaa that of
x

Sy contrast with these sharp

, the cost of living inde;

has advaaced only about one perceat ever the past year

almost

entirely to the increased cost of services, with commodity aad other
prlees shewing remarkable stability*

la

, the bus!

outlook is healthy, aad durable goods,

steel sad automobile production/preseat excellent Indications for
the year ahead.(
But what about the possibility of/issxlls^which could easily
rob us of the benefits of these advances?
Basically, as all of you know, there are two kinds of inflation.
which

occur separately or la combination:

the classic type, *»

which excess demand and short supply d>ive|l prloee up, aad the wag**

1.0 7
mm %4i —

Thanks to the basic strength of our private economy -- supported by the vigorous actions of the Federal Government — the
•60-'61 recession proved to be mild and short-lived* Recent reports
show that the gross national product, at aa annual rate, was five
hundred twenty-seven billion/in t£eSthird quarter of this year,
compared to five hundred one billion dollars la the first quarter,
And we can look forward to a level of close to five hundred forty
billion dollars in the current quarter. This upward trend should
continue at a relatively rapid pace during the first half of 1962,
and at a somewhat more modest rate thereafter.
The strong advance of the economy should bring unemployment under
six percent sometime this Winter* -Mr the late Spriag of 1962, wo

can expect it to drop iffuoioaerj to around five percent, and can ho
for still further improvement next Fall*
Corporate profits have also shown strong gains, reaching an
annual rate of forty-five billion two hundred million dollars in
the second quartor/of this year — a sharp rl«« **on *&• first
quarter low of thirty-nine billion six hundrod **ll±f* hilars. <2$h
/Z-IM^^C

*<*/S«^

.

> m+L.^> M

A /

7#"- ^'-- €- < &4°$M

i. <C w

- as My third point is to underscore the massive of foot on our
budget of the increased national security expenditures required to
match the heightened Soviet challenges — challenges that could
endanger the very existence of our nation* I emphasise this be*
cause I have of late frequently heard it alleged that our deficit
is due, not to national security spending, but g sm ornery to enlarged
expenditures for civilian welfare* It Is true, of course, that
civilian expenditures have been enlarged. However, the additional
appropriations which President Kennedy^ had to request to meet urges!
defense needs have amounted to six billion dollars, we must also
remember that a substantial portion of the civilian increases wort
directly tied in with human suffering brought on by the recession.
I have la mind such items as extended payments to those of our
unemployed who had used up their normal benefits, and aid for tho
dependent children of unemployed families*

l

^ •"'

Sow, a word about the economic outlook for 1062, which will,
of course, determine our budgetary revenues for fiscal I9l.;ji

129
- 22 this time* This is mainly because today we have substantial unused
capacity, both in our plants and in our labor force — capacity
that can easily absorb the Increases ia demand.
wholesale prices are showing no tendency to rise* Indeed, the
Bureah of Labor Statistics .wholesale prices index has fallen free
d^jxJi^j
f/,,4 yum
tii^_jL^^^-riry.
120 in February to / / )f V " i -"" ' is^men^semeer* This is a better
record than in previous recoveries. And it has oecured even though
the fiscal stimulation of the prospective budgetary/deficit is now
largely behind us. For, from aid-December on. Government revenues
should roughly equal expenditures.
gone of this means that inflationary pressures can be blithely
disregarded. Such pressures, even when dormant, must always be
kept in mind and sealously guarded against* It does mean, however,
that with the President's decision to present a balance^budget

for fiscal 1963, the danger now lies far more la cost-push or wageprice pressures than in the Federal budget*

I3u

developments. In other words, the revenues in sight for the -fewelW
months ending next June — that is, for fiscal 19&36 — will be
based primarily on earnings for the /^L months ending this
December SI. As you all know only too well, this period includes
the very bottom of the recession* That is what accounts for the
seeming paradox of low revenues in a period of sharply rising
economic activity.
My second point is that the prospective deficit should not of
itself lead to inflationary pressures* Even though a deficit of
more than six and three-quarter billion dollars is uncomfortably
large, we should keep in mind that it still amounts to barely more

than half of the twelves* and one-half billion dollar deficit we in
curred in fiscal 1959 — and the fiscal 19S9 deficit, large as It

was, did not lead to inflationary price rises* The 1959 deficit was

however9 accompanied by monetary tightening to a degree that no one
wishes to see recur. I am confident that both inflationary prion

rises and a recurrent of the 1959 monetary stringency can be avoids

*» 20 unfortunately brought with it sharp increases in our outlays for
farm price supports.
Parallel with these sdverse budgetary developments, the Preaidi
Increased his pressure on the Federal executive departments to

practice the strictest economy, and to defer expenditures wherever
possible. Compliance with this directive has produced substantial

savings, both for this fiscal year and for succeeding year^ Had it

not been for the President's forthright action, the deficit wo now
face would have been considerably larger.
There are three points I should like to make about our
prospective deficit:
First, the negative role played by the reduced, recession-

level revenues [w#twe*tj we must look forward to ia the current fi
year. Some may ask why I talk of recess ion-Induced revenues ia a
period of growing prosperity. The answer, of course, is that our

all-Important income tax collections9 which fluctuate sharply with

the state of the economy, always lag some six months behind eurrss

1 90
JL W .;_

contain a revised estimate of revenues and expenditures, including
detailed breakdowns* while it is not possible to give exact
figures at this time, it is apparent that the mid-year review will
not make happy reading. Preliminary indications are that it will
show a prospective deficit of somewhat more than six and threequarter billion dollars*
Two developments are primarily responsible for the increase ovei
the July estimate, which,.you will recall, was five billion three
hundred million, dollars.
First, there was the lamentable failure of the Congress to
increase postal rates to match the ever growing postal deficit.
This added a wholly unnecessary three-quarters of a billion dollars
to our over-all deficit.
Second — an those of you from the great Mid-lost are well
aware — this summer brought ideal growing weather, the best we hove
had in the past decade* The result was an agricultural outpouring
that has set many all-time records* This blessing of abundance has

•i- w O

*** 1^ *•*
I have already sited the goal of our international fiscal
policy: the achievement of equilibrium in our balance of payments.
The goal of our domestic fiscal policy is equally clear:
the achievement of steady, healthy economic growth, with price
stability and full employment.
To achieve these goals we must make full aad proper use of
fiscal or budgetary tools. In years of relative prosperity* after

tax revenues have recovered from recession, the budget should be is
balance, with surpluses during times of full employment to offset

the deficits that must be expected ia times of recession* Translate
into today's situation, this means a balanced budget for fiscal
1963 — and this is exactly what the President intends to submit
to the Congress next January*
With the effect of Congressional action in the last somaioa BOW
clear, It is possible to get an over-all picture of our budgetary

position for the current year* The Bureau of the Budget will shortl
complete and publish its mid-year review, which, as usual, will

*** JL * **

payments position*
Consequently, In our debt msngement program we have so far
concentrated our new cash financings in short-term issues^
while using refunding operations to add to longer term holdings*

Although through short-term issues we have already raised the groa
bulk of the aew money required to meet the 1992 cash deficit, in-

been able to lengthen slightly the average maturity of the debt.
Jgpem htin ~otr out, our new cash offerlags will be for^
e^f refunding and meeting seasonal needs./ Thus, we have been able
to satisfy our important Hhonsemeepinn^eedm and, nt the same tiae,
avoid either diverting long-term eapitnl from productive private
uses, or cresting an interest incentive to short-tern flows of
capital to other countries.
Closely related to debt management is the Government's perlorsance la terms of the budget: Government expenditures in relation
to receipts.

i 9S
JL W w

— 19 —

associations should also be Improved. They are, undeniably, import
suppliers of funds for home mortgages

9

aad this most certainly ho

taken into account* However, it should be possible to recognize

the importance of stimulating home building and, at the same tine,

provide a fnlr method of taxing mutunl savings banks and savings s
loan associations so that they can begin to carry their equitable
share of the national tax burden.
Returning to fiscal policies, I should first like to touch oa
our debt management program:
Among our various objectives — and they are not always easily
reconcilable — we have recognised a factor common to nil debt

management, of any kind, anywhere! namely, that we must be prudent
housekeepers and spread our debts out over the whole potential
maturity range. This means taking advantage of every opportunity

to lengthen the debt that does not seriously compromise earn other

objectives* em? borrowing at the lowest coat, am wnilfcjae in such
as to contribute to orderly growth. We must also keep constantly
in mind the impact of our borrowing operations on our balance of

1 QC
Jw *-/•-

- w millions of transactions. Despite the Ham cooperation of tho
finnnclal community, educational efforts have not resulted is-substent lal improvement in the voluntary reporting of interest and
dividends. It is the Treasury's conclusion, therefore, that with*
ittt *w
holding —

which has proven so successful in the wage ares —

is the

only practicable way to eliminate the problem.
I urge you to support interest and dividend withholding because
they are vital to the nation's interest. I recognise that there would
be some additional expense to payers of interest and dividends, and m
inconvenience for honest and conscientious taxpayers. But mush lo
at stake. Taxpayer morality is a great American asset. It should be
cherished and protected* Our common concern, therefore, should focus
on technical implementation of a withholding procedure that keeps
the administrative burden to a minimum* Your assistance in this task
would betneartily welcomed ey the Treasury. y ..
The tax treatment of mutual savings hanks and savings and loan

- 14 So much for our international position* Before turning to
domestic fiscal policies, 2 should like to any n few words about
two tax matters of particular Interest to you: withholding on
Interest and dividends, and the taxation of thrift institutions.
withholding of income tax on interest and dividends should not
be an lssue| between the commercial banking community and the
Treasury* Tour association has taken n strong position in favor
of tax uniformity in the treatment of commercial banks and

thrift institutions* This is a concise way of saying that everyone
should carry his fair share of the tax burden* All of us want tho
burdens of taxation shared equitably* All of us abhor the tax
>

evader.

And/ all of us recognise thnt if tax morality is

jeopardised, then the basic democratic institutions of our nation
are endangered*
Audit enforcement has proved ineffective In uncovering unreper
interest and dividends because the problem is massive, involving

13 Q
"**

8.S. circles.

JL*5

—

JF--

g> $ggi- »

We acted promf^ly to dispell any mnos*w» on this

score* Our own view is,,todaytm* as it has been all along —^that 1
/;

/

current problems of disequilibrium in international payments cannot
be solved by any general Increase In international liquidity, but
should be met by making the existing payments system work. This re
quires that all countries — surplus countries as well as deficit
counties — recognise their responsibilities to work toward equill
It also requires a strengthening of the Fund — such as was agreed
upon at Vienna — in order to meet sudden and unusual strains that
could threaten the stability of the present payments mechanism.
To sum up: Our payments situation is improved but still requii

close attention* We must work on our own and • 1 n eeepeost ioa -wi
our allies to decrease or offset the dollar cost of our military
forces overseas. We must continue our new and close cooperation
with foreign central banks and financial officials la guarding
against unhealthy flows of short-term capital* And above all, we
must energetically seek to Increase our exports.

1"Q
- 12 < ^ ~ I should like to emphasise thnt we foresee no breakdown in th<

present wmsld l.ibiyfcouU system* But we do see n need — now fully
recognised by nil the leading industrial countries — for standby

facilities in the Fund to cope with developments that might strain

the functioning of that system. An agreement la prim^nple among th

leading industrial countries to provide just such standpy faeiilti

was reached at the recent Fund meeting in Vienna. This was the get
of the United States delegation, and I want to make it clear that
we fully achieved it*
There has been some public misunderstanding in the United
States of the strong opinions aired at the Vienna meeting. These

opinions were not -^- as some in this oountry^ have- srronee^usly^

sumecfc ***** critical of the United States. Rather, they were cri
of the view/held by oomojthat the major problem of international
monetary policy had become one of adding to general international

liquidity by n grandiose new scheme or "panacea" — to use the word
employed by certain of my Western European colleagues. There was/

it is truer some fear that such a view had received support in off*

• ii,-

140

^^r— This 20-nation group, consisting of the 18 European members
of the former Organisation for European Economic Cooperation,
plus &tea<f& and theT United States, hslps to coordinate the
aid and development activities of the free world. Among
its many and varied activities in the economic field, the
QICD provides a forum for the continuing, delicate.and
private discussions that are an integral part of
international financial cooperation. In addition, the
Federal Reserve now takes a full and sotlve part ia the
monthly meetings of central bankers at Basle, Switzerland.
the central bank cooperation that flows from these meeting!

can be most important. Its efficacy was recently highlighted by ta

success of last Spring*s so-call "basis accords** in support of the

British pound sterling* /More recently, we hove taken an active ro

is efforts to strengthen the resources of the International Moneta

Fund and its capacity to deal with destabllsing movements that mlf
impair the world payments system*

- 10 of our foreign aid programs and of maintaining onr troops
abased*
In cooperation with certain of our European allies we are
also developing mutually advantageouo ways of offsetting the drain
on balance of payments olyiwjSeK
In the field of short-term capital movements, we have begun —
for the first time is nearly twenty-five years — to take an active
role in the foreign exchange markets of the world. In so doing wo
are following in the footsteps of an outstanding banker, Bussell
XiSf f Ingwellt who, as Assistant Secretary of the Treasury during
J
World War I ~« initiated similar transactions. These operations
are adding another dimension to our program for protecting tho
international position of the dollar. «*•***•* sme^i^rt #1 i&
We are also moving forward In the field of consultation and
cooperation. The United States played a leading role is creating
the new Organisation for seemomle Cooperation and Development.

*t~

142

that has been successfully utilized la a nnmber of Suropean
countries. As a result of information developed in hearings before
the House Ways and Means Committee, it is now conceded that this
credit should be in the form of a flat across-the-board allowance
of seven or eight percent* A majority of the Ways and Means
Committee has publicly favored this proposal, and promised early
action in the next session of the Congress.
With our depreciation procedures improved by these two basic
reforms, American business should be In a position to maintain
the most modern Industrial plant Is the world* Ibis, in turn,
should be of great help In avoiding price increases, and thus, ia
retaining our competitive position in world markets. I shall have

more to say mbout price Increases later, when I consider the danger
of inflation, but we must never overlook their speelal Importance
to our merchandise trade surplus.
Tho Government is also taking action in other areas which

affect our balance of payments position. By emphasising procureneat
in the United States, we are reducing the balance of payments cost

143: .
-•- -42

<

/

£/tM»
range of business experience with all types of equipment* -One f
study was started h$ the treasury more than n year .ago, and we#f#^
are pushing it to completion,this Winter* At the President's

direction, the textile industry last May was given special priority
and, Just this past week, new "lives" for textile equipment,
representing a general reduction of forty percent over previous
levels, were announced. I cite thin as an example of what can bo
expected from our over-ail examination, while the textile iaessiry
may be an extreme ease — and our investigation may not
justify equally large reductions in the depreciable "lii
equipment used ia other industries ~- I am confident that many
reductions of a significant nature will be *«etl£isev ,, Second, since a change ia depreciable "lives* will not ia
itself be enough to satoh the incentives given by their

to many of 4tue European manmfaeturers with whom our industries coss
further action is mmw4m^. That is why the Treasury supports a tax
credit for ail new investment in plant equipment — mm incentive

- 7 Over the past decade, every Western European nation hae
steadily increased the share of its OMP going Into new
equipment* But the trend in the United States has been in the
opposite direction: the mereeatage of our GHP devoted to new "
equipment purchases has been deellnjpng, and is new well under tho
rate of the early Fifties* It strikes me that there Is a clear
relationship between this fall-off and the difficulties we face
In competing with *&£? European friends — as well as betweenit
aad our relatively slow rate of economic growth duraag the past
decade.

- * t ?>ie • ** la •

Plant modernisation can best be stimulated through
depreciation reform, which, to be adequate, must have two distinct
facets: *'-' <*-^?9Q.* mi^mt
First, aa updating of the Internal Revenne Serviee tnv

calculations of the depreeiable "lives** of equipment, so that they

will accurately reflect conditions In this age of rapid teenneiegl*

change, 4memwr:Jftn adjustment calls for a detailed study of the wh

145
- 0 As part of that effort, the Government has overhauled and

expanded its services to exporters, and is is tho process of Croati
a comprehensive export insurance program which should In in full
v/

operation by the end of the year*

The Administration has also

supported depreciation reform to stimulate the modernisation of oar
national Industrial plant.
More rapid equipment modernisation by industry is vital to the
success of our efforts to remain competitive in world markets aad
to achieve the rate of growth needed to assure us prosperity and
reasonably full employment. I think it highly significant that all
the industrial countries of Western Europe — except anJar Belgiua
and the United Kingdom —

are now devoting twice as much of their

f&rosa Motional product to purchases of industrial equipment as em*
•JL' •- *" "*

a#e in tho United States*

And Belgium and the United Kingdom* tho

two European countries whose economic growth has lagged in coapari
with the rest of Western Europe7 are devoting half a sain as much
of their (HIP as are we* to the purchase of equipment

- 5 -

this surplus during the first half of the^yenr iVn» at ela adjusted
annual lev^wffcilimi four billion dollars —

a rs,tc about one

8» s? Y *•

billion dollars higher than 1990, and in marked contrast with a
deficit of about half a billion dollars ia 1959. ^n / /u^-/*-\. &
/

/

Unfortunately, the rlss in our commercial trade surplus during
the early months of this year was due more to a recession-induced
decrease in imports than to an increase in exports* As our ecoaosy
picks up steam, Imports are certain to recover and out into our
trading surplus.
Thus, through the normal operation of tfre business cycles we

face the probability of a reduction In our commercial trade surplus
over the coming year* To attempt to reverse this trend by cutting
back on imports would be senseless, since sush action on our part
would inevitably generate counter action against our exports.

What we must do instead is redouble our efforts to increase exports

so that we can maintain a trading surplus at the" satisfactory leve
reached during the first half of this year

- *

-

Our basic position was in exact balance during the first
self of 1991 — compared with a deficit of one billion
nine _ j J l'^"'-- four •-••*
^hundred million for I960, sad one of /billion three hundred
million for 1959* Hence, nearly the entire improvement in the
first six months took plsee is our basic position, with the
short-tors outflow continuing at very close to the 1990 rate.
This year, however, the short-term outflow has been almost
entirely commercial; for example, more than half of it has Imm
commercial bank lending to Japan to finance her growing imports*
It has not been generated %f speculation against the dollar, as
was the ease last Pall tx*& Winter* The continued absence of that

... i&^^/u:^,
type of speculation^* a clear sign of renewed international
t ..'••*..'•'• " .-^ .......

confidence in the dollar*

This gives us time to work toward

the over-all balance we must achieve*
The imost important single facte*- *» oevsiming xms oaianee
Is our commercial trade surplus — by which I mean the excess of
commercial exports over Imports, not counting semes of surplus
agricultural products or shipments under our foreign aid program*

- 3 -

4 Ail

Let me briefly review our present payments position.

In so

doing, I shall not take into account certain special d&fc £ prepayme
made to us last Spring, chiefly by Germany. $hile these
prepayments were most helpful, their effect wass temporary, and
they should not be included in any measurement of progress toward^
i

solution of the underlying problem.
Our over-all deficit for the first half of this year ran at

a seasonally adjusted annual rate of 6uS billion seven hundred milli
dollars — a significant improvement over the deficits of nearly

four billion dollars for each of the two preceding years. We new hav
good reason to hope that we can hold our over-all deficit for the

entire year to not much more than two billion dollars — exclusive of

the special debt prepayments, which should reduce it to something li
&ne mi I lion five-hundred pillion dollars.
our record in the first half of this year is even better
when wo examine our "basic** position — that is, the total of our
recorded transactions, with the exception of short-terra capital
movements and special debt prepayments.

1 AO

five billion d n ^ n e s was met by payment in gold* This/trend
dol^g, w. 4_ .. .*»rtain --:' •• .1 ddfc -..-* »

culminated in a crisis of confidence during the four months from

last October through January, when we lost one and one quarter $LU
*»u*« i* «*id. ""f ^*-: t^orary- »*»
tssy shoui.f* *v * ,

v

,

:%

, ^* V ...... 5;r,y.^,!/

ski this
President Kennedy fully recognized the dangers/in

situation.

Be made it clear immediately after hie

inauguration that the dollar would not be devalued, nor would its
standing be jeopardised by resort to exchange controls. One of his

V " ' *> ' **." **>
J ^ ,,
"l" ^ l * 5 ^ / ^ '**c:*ing years*
to stem the flow of dollars out of this country.
f* ..$ . j?e - ; i nold :r o? i - •.;:.. d •* g« •> . ie
Our payments position this year is markedly Improved.

^# as*, aav

But

C^fi**+-?t*>§\Jrs •••• ii-^re *aa *4 ^ • •-•„*•..• i^e of
ue-te relax. Indeed, In today's world of
**<* ' c;- i-i:«^Jir^vats, watch shou • » . , ,w - 'tlng-lik'
currency convertibility, we can never relax, not even when we
achieve our immediate goal of equilibrium in our international
'•r r- _•- . tfer flr«t u£,.i? -r •». - *

accounts*

We must bs constantly alert to the impact upon our

-a o* v rba? i :n F itioa — >* * 1« \ «• •; »
balance of payments of all of our financial and economic actions —
li^s^ \i*a the «jtcaction of. short-term capital
both public and private.

j'j£<..-t^^.

/ W

Jl-t4.t>-4.£*i;4A*l.*

1

"''i

" ~ * ^ ^ A D D R E S S BY THE HONORABLE DOUGIAS DILLON
SECRETARY OF THE TREASURY, AT THE ANNUAL
MEETING QF THE AMERICAN BANKERS ASSOCIATION,
CIVIC AUDITORIUM, SAN FRANCISCO, CALIF.^—
K
TUESDAY, OCTOBER it, 1961, 111 00 A.M., Pel* &J*0fi
As Secretary of the Treasury, the state of our economy —
both at home and abroad — is my principle concern. Since this
concern is shared by all of you here today, I should like to
discuss the Government*s foreign and domestic financial policies
and how they affect the Nation's economic strength and potential.
The Government's major preoccupation in foreign financial
affairs is with our balance of international payments, which has

a profound Influence upon the standing of the dollar in the world'
money markets* The achi^ement of a reasonable balance is of
utmost importance — not only to us, but.nil free men, everywhere*

Wor the dollar, as the world's basic reserve currency, is the very
foundation of international trade and commerce.
We have been running deficits in our International payments
for an uncomfortably long time* During the past three years aloni

these deficits have totalled about eleven billion dollars, of whic

7 '_— 2 1 ,

1 Ci
JL *J -4s

TREASURY DEPARTMENT
Washington
October 16, 1961
RELEASE PM NEWSPAPERS,
Tuesday, October 17> 196l

ADDRESS OF THE HONORABLE DOUGLAS DILLON
SECRETARY OF THE TREASURY
AT THE
ANNUAL MEETING OF THE AMERICAN BANKERS ASSOCIATION,
CIVIC AUDITORIUM, SAN FRANCISCO, CALIFORNIA
TUESDAY, OCTOBER 17, 196l, 11:00 A.M., PST. (3:00 P.M.,EDT)
As Secretary of the Treasury, the state of our economy — both
at home and abroad — is my principal concern. Since this concern
is shared by all of you here today, I should like to discuss the
Government's foreign and domestic financial policies and how they
affect the Nation's economic strength and potential.
The Government's major preoccupation in foreign financial
affairs is with our balance of international payments, which has a
profound influence upon the standing of the dollar in the world's
money markets. The achievement of a reasonable balance is of utmost
importance — not only to us, but to all free men, everywhere. For
the dollar, as the world's basic reserve currency, is the very
foundation of international trade and commerce.
We have been running deficits in our International payments for
an uncomfortably long time. During the past three years alone, these
deficits have totalled about eleven billion dollars, of which five
billion was met by payment In gold. This trend culminated in a crisis
of confidence during the four months from last October through
January, when we lost one and one quarter billion dollars In gold.
President Kennedy fully recognized the dangers in this situation.
He made it clear immediately after his Inauguration that the dollar
would not be devalued, nor would Its standing be jeopardized by
resort to exchange controls. One of his very first official acts
was to call for a coordinated national effort to stem, the flow of
dollars out of this country.
Our payments position this year is markedly Improved. But we
cannot relax. Indeed, in today's world of currency convertibility,
we can never relax, not even when we achieve our Immediate goal of
equilibrium In our international accounts. We must be constantly
alert to the impact upon our balance of payments of all of our
D-271
financial and economic actions — both public and private.

— d. —

--j r~ o
JU U fL

Let me briefly review our present payments position. In so
doing, I shall not take Into account certain special debt prepayments
made to us last Spring, chiefly by Germany. While these prepayments
were most helpful, their effect was temporary, and they should not be
included In any measurement of progress toward solution of the
underlying problem.
Our over-all deficit for the first half of this year ran at
a seasonally adjusted annual rate of one billion seven hundred million
dollars — a significant improvement over the deficits of nearly
four billion dollars for each of the two preceding years. We have
good reason to hope that we can hold our over-all deficit for the
entire year to not much more than two billion dollars — exclusive of
the special debt prepayments, which should reduce it to something like
one and a half billion dollars.
Our record in the first half of this year is even better when
we examine our "basic" position — that is, the total of our
recorded transactions, with the exception of short-term capital
movements and special debt prepayments.
Our basic position was in exact balance during the first half
of 196l — compared with a deficit of one billion nine hundred
million for i960, and one of four billion three hundred million for
1959. Hence, nearly the entire improvement in the first six months
took place in our basic position, with the short-term outflow
continuing at very close to the i960 rate. This year, however, the
short-term outflow has been almost entirely commercial: for example,
more than half of it has been commercial bank lending to Japan to
finance her growing imports. It has not been generated by
speculation against the dollar, as was the case last Fall and Winter.
The continued absence of that type of speculation has been a clear
sign of renewed international confidence In the dollar. This gives
us time to work toward the over-all balance we must achieve.
The most important single factor in obtaining this balance is
our commercial trade surplus — by which I mean the excess of
commercial exports over Imports, not counting sales of surplus
agricultural products or shipments under our foreign aid program.
This surplus during the first half of the year ran at an adjusted
annual level of some four billion dollars •— a rate about one billion
dollars higher than i960, and in marked contrast with a deficit of
about half a billion dollars in 1959.
Unfortunately, the rise in our commercial trade surplus during
the early months of this year was due more to a recession-induced
decrease in Imports than to an increase in exports. As our economy
picks up steam, imports are certain to recover and cut Into our
trading surplus.

- 3Thus, through the normal operation of the business cycle, we
race the probability of a reduction in our commercial trade surplus
:>ver the coming year. To attempt to reverse this trend by cutting
sack on imports would be senseless, since such action on our part
ffould inevitably generate counter action against our exports. What
tie must do Instead is redouble our efforts to increase exports
so that we can maintain a trading surplus at the satisfactory level
reached during the first half of this year.
As part of that effort, the Government has overhauled and
sxpanded Its services to exporters, and is in the process of creating
a comprehensive export insurance program which should be in full
operation by the end of the year. The Administration has also
strongly supported depreciation reform to stimulate the modernization
of our national industrial plant.
More rapid equipment modernization by industry is vital to the
success of our efforts to remain competitive in world markets and
to achieve the rate of growth needed to assure us prosperity and
reasonably full employment. I think it highly significant that all
the industrial countries of Western Europe — except Belgium and
the United Kingdom — are now devoting twice as much of their gross
national product to purchases of Industrial equipment as are we in
the United States. And Belgium and the United Kingdom — the two
European countries whose economic growth has lagged in comparison
with the rest of Western Europe — are devoting half again as much
of their GNP to the purchase of equipment as are we.
Over the past decade, every Western European Nation has steadily
increased the share of its GNP going into new equipment. But the
trend in the United States has been in the opposite direction: the
percentage of our Gross National Product devoted to new equipment
purchases has been declining, and Is now well under the rate of the
early Fifties. It strikes me that there Is a clear relationship
between this fall-off and the difficulties we face in competing
with our European friends •— as well as between it and our relatively
slow rate of economic growth during the past decade.
Plant modernization can best be stimulated through depreciation
reform, which, to be adequate, must have two distinct facets:
First, an updating of the Internal Revenue Service calculations
of the depreciable "lives" of equipment, so that they will accurately
reflect conditions in this age of rapid technological change. This
adjustment calls for a detailed study of the whole range of business
experience with all types of equipment. Such a study was started by
the Treasury more than a year ago, and we are pushing it to completion
this Winter. At the President's direction, the textile industry last
May was given special* priority and, just this past week, new "lives"
for textile equipment, representing a general reduction of forty
percent
the
example
textile
over
of what
Industry
previous
can be
may
levels,
expected
be anwere
extreme
from
announced.
our
case
over-all
-- I
and
cite
examination.
ourthis
investigation
as anWhile

- 4nay not justify equally large reductions in the depreciable "lives" of
equipment used in other industries — I am confident that many
reductions of a significant nature will be possible.
Second, since a change in depreciable "lives" will not in itself
be enough to match the Incentives given by their governments to many
of the European manufacturers with whom our industries compete,
further action is needed. That is why the Treasury supports a tax
credit for all new investment in plant equipment — an Incentive
that has been successfully utilized In a number of European countries.
As a result of'information developed in hearings before the House
Ways and Means Committee, It is now conceded that this credit should
be in the form of a flat acrosss-the-board allowance of seven or
eight percent. A majority of the Ways and Means Committee has
publicly favored this proposal, and promised early action In the
next session of the Congress.
With our depreciation procedures improved by these two basic
reforms, American business should be in a position to maintain
the most modern Industrial plant in the world. This, in turn,
should be of great help in avoiding price Increases, and thus, in
retaining our competitive position in world markets. I shall have
more to say about price increases later, when I consider the danger
of inflation, but we must never overlook their special Importance
to our merchandise trade surplus.
The Government is also taking action in other areas which affect
our balance of payments position. By emphasizing procurement in the
United States, we are reducing the balance of payments cost of our
foreign aid programs and of maintaining our troops overseas. In
cooperation with certain of our European allies we are also
developing mutually advantageous ways of offsetting the drain on our
balance of payments of sustaining our military forces abroad.
In the field of short-term capital movements, we have begun —
for the first time in nearly twenty-five years — to take an active
role in the foreign exchange markets of the world. In so doing we
are following in the footsteps of an outstanding banker, Russell
Leffingwell who, as Assistant Secretary of the Treasury during
World War I, initiated similar transactions. These operations are
adding another dimension to our program for protecting the
international position of the dollar.
We are also moving forward in the field of consultation and
cooperation. The United States played a leading role in creating
the new Organization for Economic Cooperation and Development.
This 20-nation group, consisting of the 18 European members of the
former Organization for European Economic Cooperation, plus Canada
and the United States, helps to coordinate the aid and development
delicate,
international
activities
in the economic
and
of private
financial
the
field,
freediscussions
world.
the
cooperation.
OECDAmong
provides
that
its
In
are
many
addition,
a forum
an and
integral
for
varied
the
the
part
Federal
continuing,
activities
of Reserve

ow takes a full and active part in the monthly meetings of central
ankers at Basle, Switzerland. The central bank cooperation that
lows from these meetings can be most important. Its efficacy
as recently highlighted by the success of last Spring's so-called
Basle accords" in support of the British pound sterling.
More recently, we have taken an active role in efforts to
trengthen the resources of the International Monetary Fund and its
apacity to deal with destabilizing movements that might impair
;he world payments system. I should like to emphasize that we
oresee no breakdown in the present system. But we do see a need —
LOW fully recognized by all the leading industrial countries — for
itandby facilities in the Fund to cope with developments that might
itrain the functioning of that system. An agreement in principle
imong the leading industrial countries to provide just such standby
'acilities was reached at the recent Fund meeting in Vienna. This
ras the goal of the United States delegation, and I want to make it
slear that we fully achieved it.
There has been some public misunderstanding in the United States
>f the strong opinions aired at the Vienna meeting. These opinions
rere not critical of the United States. Rather, they were critical
>f the view that the major problem of international monetary policy
lad become one of adding to general international liquidity by a
grandiose new scheme or "panacea" — to use the word employed by
certain of my Western European colleagues. There was some concern that
mch a view had received support in official U. S. circles. We acted
)romptly to dispel any doubts on this score. Our own view is —
;oday, as it has been all along -that the current problems of
lisequilibrium in international payments cannot be solved by any
general increase in international liquidity, but should be met by
naking the existing payments system work. This requires that all
countries -- surplus countries as well as deficit countries —
recognize their responsibilities to work toward equilibrium. It
ilso requires a strengthening of the Fund — such as was agreed upon
it Vienna — in order to meet sudden and unusual strains that could
threaten the stability of the present payments mechanism.
To sum up: Our payments situation is improved but still requires
Jlose attention. We must work on our own and with our allies to
lecrease or offset the dollar cost of our .military forces overseas.
fe must continue our new and close cooperation with foreign central
aanks and financial officials in guarding against unhealthy flows
>f short-term capital. And above all, we must energetically seek to
Lnc.rease our exports.
So much for our international position. Before turning to
lomestic fiscal policies, I should like to say a few words about
:wo
tax matters
of particular
interest
toof
you:
withholding
on
Lnterest
and dividends,
and the
taxation
thrift
Institutions.

- 6 -

~^'-

Withholding of income tax on interest and dividends should not
e an issue between the commercial banking community and the Treasury.
our Association has taken a strong position in favor of tax
niformity in the treatment of commercial banks and thrift
nstitutions. This is a concise way of saying that everyone should
arry his fair share of the tax burden. All of us want the burdens
f taxation shared equitably. All of us abhor the tax evader. And
11 of us recognize that if tax morality is jeopardized, then the
asic democratic institutions of our Nation are endangered.
Audit enforcement has proved ineffective in uncovering unreported
nterest and dividends because the problem is massive, involving
illlohsof transactions. Despite the fine cooperation of the
inancial community, educational efforts have not resulted in
ubstantial improvement in the voluntary reporting of Interest and
ividends. It is the Treasury's conclusion, therefore, that witholding — which has been so successful in the wage area — is the
nly practicable way to eliminate the problem.
I urge you to support interest and dividend withholding because
hey are vital to the Nation's Interest. ' I recognize that there would
e some additional expense to payers of interest and dividends, and
ome inconvenience for honest and conscientious taxpayers. But much
,s at stake. Taxpayer morality is a great American asset. It should
»e cherished and protected. Our common concern, therefore, should
ocus on technical implementation of a withholding procedure that
:eeps the administrative burden to a minimum. Your assistance in
his task would be most heartily welcomed by the Treasury.
The tax treatment of mutual savings banks and savings and loan
issociations should also be improved. They are, undeniably, important
suppliers of funds for home mortgages, and this must certainly be
;aken into account. However, it should be possible to recognize
;he importance of stimulating home building and, at the same time, to
irovide a fair method of taxing mutual savings banks and savings and
.oan associations so that they can begin to carry their equitable
(hare of the national tax burden.
Returning to fiscal policies, I should first like to touch on
>ur debt management program:
Among our various objectives — and they are not always easily
reconcilable — we have recognized a factor common to all debt
lanagement, of any kind, anywhere: namely, that we must be prudent
lousekeepers and spread our debts out over the whole potential
laturity range. This means taking advantage of every opportunity
;o lengthen the debt that does not seriously compromise two other
>bjectives: borrowing at the lowest cost, and in such a way as to
contribute to orderly growth. We must also keep constantly In mind
;he
impact of our borrowing operations on our balance of payments
>ositIon.

- 7 -

1^7

Consequently, in our debt management program we have so far
concentrated our new cash financings in short-term issues, while
using refunding operations to add to longer term holdings.
Although through short-term issues we have already raised the great
bulk of the new money required to meet the 1962 cash deficit,
including the operations of the trust funds, we have still been able
to lengthen slightly the average maturity of the debt. Thus, we
have been able to satisfy our important "housekeeping" needs and, at
the same time, avoid either diverting long-term capital from
productive private uses, or creating an interest incentive to shortterm flows of capital to other countries.
Closely related to debt management Is the Government's performance
in terms of the budget: Government expenditures In relation to
receipts.
I have already cited the goal of our international fiscal policy:
the achievement of equilibrium in our balance of payments. The goal
of our domestic fiscal policy is equally clear: the achievement of
steady, healthy, economic growth, with' price stability and full
employment.
To achieve these goals we must make full and proper use of
fiscal or budgetary tools. In years of relative prosperity, after
tax revenues have recovered from recession, the budget should be in
balance, with surpluses during times of full employment to offset
the deficits that must be expected in times of recession. Translated
into today's situation, this means a balanced budget for fiscal
1963 — and this is exactly what the President intends to submit
to the Congress next January.
With the effect of Congressional action in the last session now
clear, it is possible to get an over-all picture of our budgetary
position for the current year. The Bureau of the Budget will shortly
complete and publish its mid-year review, which, as usual, will
contain a revised estimate of revenues and expenditures, including
detailed breakdowns. While it is not possible to give exact figures
at this time, it is apparent that the mid-year review will not make
happy reading. Preliminary indications are that It will show a
prospective deficit of somewhat more than six and three-quarter
billion dollars.
Two developments are primarily responsible for the increase over
the July estimate, which, as you will recall, was five billion three
hundred million dollars.
First, there was the lamentable failure of the Congress to
increase postal rates to match the ever growing postal deficit.
This added a wholly unnecessary three-quarters of a billion dollars
to our over-all deficit.

Second — as those of you from the great Mid-West are well
aware — this summer brought ideal growing weather, the best we have
had in the past decade. The result was an agricultural outpouring
that has set many all-time records. This blessing of abundance has
unfortunately brought with it sharp increases in our outlays for
farm price supports.
Parallel with these adverse budgetary developments, the
President increased his pressure on the Federal executive departments
to practice the strictest economy, and to defer expenditures wherever
possible. Compliance with this directive has produced substantial
savings, both for this fiscal year and for succeeding years. Had it
not been for the President's forthright action, the deficit we now
face would have been considerably larger.
There are three points I should like to make about our
prospective deficit:
First, the: negative role played by the reduced, recessionlevel revenues we must look forward to in the current fiscal year.
Some may ask why I talk of recession-induced revenues in a period
of growing prosperity. The answer, of course, is that our allimportant income tax collections, which fluctuate sharply with the
state of the economy, always lag some six months behind current
developments. In other words, the revenues in sight for the
12 months ending next June — that is, for fiscal 1962 — will be
based primarily on earnings for the 12 months ending this
December 31. As you all know only too well, this period included
the very bottom of the recession. That is what accounts for the
seeming paradox of low revenues in a period of sharply rising economic
activity.
My second point is that the prospective deficit should not of
itself lead to inflationary pressures. Even though a deficit of
more than six and three-quarter billion dollars is uncomfortably
large, we should keep in mind that it still amounts to barely more
than half of the twelve and one-half billion dollar deficit we
incurred in fiscal 1959 — and the fiscal 1959 deficit, large as it
was, did not lead to inflationary price rises. The 1959 deficit was,
however, accompanied by monetary tightening to a degree that no one
wishes to see recur. I am confident that both inflationary price rises
and a recurrence of the 1959 type of monetary stringency can be avoided
this time. This is mainly because today we have substantial unused
capacity, both in our plants and in our labor force — capacity that
can easily absorb the increases in demand.
Wholesale prices are showing no tendency to rise. Indeed, the
Bureau of Labor Statistics8 general Index of wholesale prices has
fallen from 120 in February to 118-1/2 earlier this month. This is
even
a better
though
record
the fiscal
than instimulation
previous recoveries.
of the prospective
And it has
budgetary
occurred

1 CQ
L w *-•*

- 9Leficit

is now largely behind us. For, from mid-December on,
Government revenues should roughly equal expenditures.
None of this means that inflationary pressures can be blithely
lisregarded. Such pressures, even when dormant, must always be
cejfc in mind and zealously guarded against. It does mean, however,
;hat with the President's decision to present a balanced budget
'or fiscal 19^3> the danger now lies far more in cost-push or wageDrice pressures than in the Federal budget.
My third point is to underscore the massive effect on our
Dudget of the increased national security expenditures required to
natch the heightened Soviet challenges — challenges that could
endanger the very existence of our Nation. I emphasize this
because I have of late frequently heard it alleged that our deficit
is due, not to national security spending, but to enlarged
axpenditures for civilian welfare. It is true, of course, that
sivilian expenditures have been enlarged. However, the additional
appropriations which President Kennedy has had to request to meet
argent defense needs have amounted to six billion dollars. We must
also remember that a substantial portion of the civilian increases
were directly tied in with human suffering brought on by the
recession. I have in mind such Items as extended payments to those
of our unemployed who had used up their normal benefits, and aid for
the dependent children of unemployed families.
Now, a word about the economic outlook for 1962, which will,
of course, determine our budgetary revenues for fiscal 19^3:
Thanks to the basic strength of our private economy -supported by the vigorous actions of the Federal Government -~
the '60-'6l recession proved to be mild and short-lived. The
gross national product, at an annual rate, was five hundred
twenty-six billion dollars In the third quarter of this year,
compared to five hundred one billion dollars in the first quarter.
And we can look forward to a level of close to five hundred
forty billion dollars In the current quarter. This upward trend
should continue at a relatively rapid pace during the first half
of 1962, and at a somewhat more modest rate thereafter.
The strong advance of the economy should bring unemployment under
six percent sometime this Winter. By the late Spring of 1962, we
can expect It to drop to around five percent, and can hope for still
further improvement next Fall.
Corporate profits have also shown strong gains, reaching an
annual rate of forty-five billion two hundred million dollars In
the second quarter of this year — a sharp rise from the first
quarter low of thirty-nine billion six hundred million dollars. And
advance Indications show that this trend is continuing.

- 10 By contrast with these sharp increases, the cost of living index
has advanced only about one percent over the past year — and this
has been due almost entirely to the increased cost of services, with
commodity and other prices showing remarkable stability.
In short, the business outlook is healthy, and durable goods,
stee.1, and automobile production present excellent indications for
the year ahead.
But what about the possibility of inflation which could easily
rob us of the benefits of these advances?
Basically, as all of you know, there are two kinds of inflation,
which can occur separately or in combination: the classic type, In
which excess demand and short supply drive prices up, and the wageprice spiral, in which prices and wages chase each other ever higher.
As I pointed out earlier, the current deficit is not creating
inflationary danger of the classic type. But we must be particularly
wary at this time of the second type of inflation: The wage-price
spiral.
Wage increases in excess of productivity gains — when met
through price rises — present a real danger to our continued
economic growth. So do unnecessary price increases. Either can
cause us to price ourselves out of world markets, with truly
catastrophic results for all of us here at home. This fact was
clearly in the minds of the central bankers and finance ministers
with whom I talked last month in Vienna at the meetings of the
International Bank and Fund. While none of them thought that our
current budgetary situation signalled a danger of inflationary
developments in the United States, they invariably — and unanimously •
expressed deep concern over whether we could hold our price levels in
the face of the steady pressures for wage-price inflation.
It is my fervent hope — and that of the President — that both
Industry and labor will keep the national Interest uppermost in their
minds. The automobile makers who are maintaining their price levels,
as well as the steel Industry, which appears to be relying upon a
rise in its production rate to cover a.recent wage increase, are both
making important contributions to our national well-being.
This is a very critical time — a time to forego unnecessary
wage or price increases and, by so doing, to perform a very real
public service. The outlook for our economy is good. We are entering
a period of promising growth, which will provide benefits for all
segments of our Nation — for labor, for management, and for the
consumer. But excessive increases in prices or wages could endanger,
or even destroy, those benefits. We can realize them, but only
through strong effort and self-restraint on the part of the private
as well as public sector of the economy.

X v^ ^

- 11 In recent months we have seen the will and the capability of
this Nation challenged — In the jungles of South East Asia — in
the city of Berlin — and in the dark dominion of outer space.
More tests lie ahead, and our economic strength will play a major
role in determining our capacity to respond. The Federal Government
is fully aware of its responsibility to maintain and to increase
that strength. We intend to build it by actively promoting a
growing economy, while avoiding the waste of national resources
that comes from excessive spending. In this way, Government and
private initiative, working together, can assure an ever stronger
Nation in'the critical months and years that lie ahead.

0O0

TREASURY DEPARTMENT

162

WASHINGTON, D.C.
W October 17, 196l

FOR IMMEDIATE RELEASE
TREASURY DECISION ON GRANULATED CAKE SUGAR
UNDER THE ANTIDUMPING ACT

The Treasury Department has determined that refined cane granulated sugar from Canada 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.
The investigation revealed that there were some sales at a
dumping price. The amount involved, however, was insignificant,
and the sales have been discontinued. There is no indication that
they will be resumed.
The dollar value of imports of the involved merchandise received during i960 was approximately $215,000.

1C3

TREASURY DEPARTMENT
WASHINGTON, D.C.
October 17, 1961

FOR IMMEDIATE RELEASE
TREASURY DECISION ON GRANULATED CANE SUGAR
UNDER THE ANTIDUMPING ACT

The Treasury Department has determined that refined cane granulated sugar from Canada 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.
The investigation revealed that there were some sales at a
dumping price. The amount involved, however, was insignificant,
and the sales have been discontinued. There is no indication that
they will be resumed.
The dollar value of imports of the involved merchandise received during i960 was approximately $215,000.

- 3 -

1 CA
-u y t

BmxxxMmmax
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 -

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

It is urged^t'hat 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 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 July 27, 1961 , ( 91 days remaining until maturity date on

px?
January 25, 1962

P^

£±&£

) 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 r

tive issues. Settlement for accepted tenders in accordance with the bids must b
made or completed at the Federal Reserve Bank on October 26, 1961 , in cash or

other immediately available funds or in a like face amount of Treasury bills ma
ing October 26, 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 aav exessstiim^ as. such, and

TREASURY DEPARTMENT
Washington
FOR IMMEDIATE RELEASE?&3Q[BgXKXMX%: October 18, 1961
XKxyaoaaQ^yxyYyYyyYyYyYYyYyyyyyxxx?c
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, 26, 1961 , in the amoun
Of $T,600A05f000 y *S follows:
91 -day bills (to maturity date) to be issued October 26, 1961 ,
in the amount of $1,100,000,000 , or thereabouts, representing an additional amount of bills dated July 27, 1961 ,
and to mature January 25, 1962 , originally issued in the
amount of $500,080,000 , the additional and original bills
to be freely interchangeable.
182 -day bills, for $ 600,000,000 , or thereabouts, to be dated
""p-kJT
2$aK2c)
October 26, 1961
,' and to mature April 26, 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 (matu
value).
Tenders will be received at Federal Reserve Banks and Branches up to the closin
two
Daylight Saving
hour, 3DOfia<bhdaRbgKo'clock p.m., Eastern k&GSS®®&& time, Monday, October 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 th
price offered must be expressed on the basis of 100, with not more than three

i' __ J J 1

is?

TREASURY DEPARTMENT
WASHINGTON, D.C.
October 18, 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 October 26, 1961, in the amount of
$ 1,600,105,000, as followss
91-day bills (to maturity date) to be issued October 26, 1961,
in the amount of $1,100,000,000, or thereabouts, representing an
additional amount of bills dated July 27, 1961,
and to
mature January 25, 1962, originally issued in the amount of
$500,080,000,
the additional and original bills to be freely
interchangeable.
182-day bills, for $600,000,000, or thereabouts, to be dated
October 26, 1961, and to mature April 26, 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 23, I961.
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-272
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 amounl
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 c
all tenders, in whole or In part, and his action in any such respec
shall be final. Subject to these reservations, noncompetitive
tenders for $200,000 or less for the additional bills dated
July 27, 196l, , (91-days remaining until maturity date on
January 25, 1962) 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 October 26, 1961,
in cash or other immediately available funds or in a like face
amount of Treasury bills maturing October 26, 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 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 k^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 excludec
from consideration as capital assets. Accordingly, the owner of
Treasury bills (other than life insurance companies) issued hereunde
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
bills
and
thefrom
conditions
Federal
of theirReserve
Issue.
Bank
Copies
orthe
Branch.
of Treasury
the circular
may
begovern
obtained
any

TREASURY DEPARTMENT
Washington

lbs

October 20, 1961
FOR RELEASE AT 6:30 P.M., EST,

REMARKS OF THE HONORABLE DOUGLAS DILLON
SECRETARY OF THE TREASURY
TO THE
BUSINESS COUNCIL, THE HOMESTEAD
HOT SPRINGS, VIRGINIA
FRIDAY, OCTOBER 20, 196l, 6:30 P.M.,EST
Our growth and progress as a nation are rooted in the vigor and
initiative of our citizens as individuals and, as individuals, we have
traditionally been wary of giving Government too strong a role. Yet
the growth of our Nation has brought with it complex new problems that
inevitably increase the role and responsibility of Government.
Nevertheless, our society continues to rely upon the creative drive of
our private economy to carry It forward. This calls for close
cooperation between Government and the business community. Government
must also have the cooperation of other important elements in our
national life: labor, the farm community, the professions, and the arts.
But if we are to achieve the goals that are well within our capacity,
this cooperation must be founded on understanding and mutual
respect -- particularly between Government and the business community.
In today's world, such cooperation is absolutely essential if we
are to meet the challenges that confront our Nation. If we do not
respond adequately to today's challenges, we jeopardize the future
of freedom on this earth. But I have no doubt of our ability to overcome any threat — any difficulty — any obstruction -~ if we stand
together.
Let us take a look at some of the areas in which Government and
the business community share responsibility for our future:
One of the most critical is our international balance of payments.
In the past three years, our payments deficits have totalled eleven
billion dollars,of which five billion dollars was paid out in gold.
This year, our payments position shows considerable improvement.
We have reason to hope that we can hold the over-all deficit to little
more than two billion dollars — or about half the size of the
deficits of the past two years. This estimate does not take into
account 650 million dollars in special loan prepayments we received
earlier this year. While they improved our position, they were
D-273
essentially one-shot operations, hence had only a temporary effect.
A major factor in the Improvement of our payments position was
President Kennedy's forthright stand against devaluation which ended

1 QQ
he near-crisis of confidence in the dollar of last Fall and Winter.
enewed confidence in the dollar has been been reflected in a sharp
rop in the loss of gold, which, since the first of February, has
mounted to only $138 million, compared with one and one-quarter
illion dollars in the four preceding months.
Thus, we have earned time to work toward a solution of this
roblem — a solution which must come largely from the private
ector of the economy by outselling foreign competitors, both in
xport markets abroad and in our markets here at home.
Unquestionably, a successful solution will require the development
nd maintenance of an adequate commercial merchandise trade surplus.
y this I mean the surplus of straight commercial exports over
mports, excluding sales of surplus agricultural products for local
urrencies, and shipments under our foreign aid program.
For the first half of this year, our commercial trade surplus —
t a seasonally adjusted annual rate — was about four billion dollars:
bout one billion dollars better than i960 and nearly five billion
ollars greater than 1959, when our commercial trade account ran at
deficit. Unhappily, we cannot expect this favorable trend to
ontinue indefinitely. For it reflects a combination of recession
t home and boom abroad, which lowered imports and raised exports.
s our economic recovery progresses, our imports can be expected to
ise and thereby shrink our merchandise trade surplus, unless we take
ggressive action to Improve our competitive position.
Government is laying the groundwork for such action. We expect
0 announce very shortly a comprehensive new insurance program for
xporters. This program, operating through private channels,
ill offer our exporters insurance and guarantee facilities that will,
or the first time, be fully comparable to those that have been
vailable to our foreign competitors. Both the State and Commerce
epartments have already expanded their services to exporters, and
fforts to circulate Information on market opportunities abroad are
aing increased. We are also making strong efforts to help U. S.
usiness meet foreign competition by reforming and modernizing the
ax treatment of depreciation of equipment.
But our ultimate success or failure in expanding our export
arkets will depend upon our business community. Government can
ily do so much. It can help, but business alone can supply the
Sgressive enterprise that is needed to keep us competitive. Only
7 maintaining a trade surplus can be count on sufficient foreign
^change to finance the cost of the overseas forces essential to
ir security, that portion of our foreign aid which goes out In
hilars, plus our growing private investment In foreign lands.
The need to improve our international competitive position Is
najor reason behind the Administration's repeated warnings of

1 'V i i

- 3the danger of inflation that can come from unjustified prioe or wage
increases. If we are to compete successfully in world markets, wage
increases should not, as a general rule, exceed productivity gains.
If we are to outsell our efficient foreign competitors, we must
forego all but the absolute minimum of price increases. Our goods
have always been respected for their high quality, but quality will
mean nothing if we price them out of the market. If we can maintain
stable prices, our expanding share of export markets can contribute
significantly to our over-all economic growth, which will bring us
increasing prosperity. If we cannot, the result will be serious
indeed. Failure could dangerously diminish our economic potential
and hence, our capacity to defend ourselves and our allies.
There are, of course, some aspects of our national economic
position that are exclusively the responsibility of Government.
One of them is fiscal policy, as expressed in terms of the budget.
As you know, we are running a deficit this year. Until the Bureau
of the Budget publishes its annual mid-year review a- few days
from now, it is not possible to go into detail, but we can expect
a deficit of more than six and three-quarter billion dollars.
The deficit would certainly have been larger If the Administration
had not acted to hold down expenditures, I can assure you that
the vigorous action undertaken in this area at the President's
direction has resulted in substantial savings.
There are basically two reasons why the deficit will be larger
than we anticipated at the time of our last official estimate in
July.
First, Congressional failure to heed the President's request
for Increased postal rates added an entirely unnecessary threequarters of a billion dollars to the deficit.
Second, exceptionally good growing weather in the mid-West
produced bumper crops, significantly raising the cost of our
continuing price support programs.
These two factors combined with recession-level revenues to
enlarge the deficit. Let me explain: Our revenue for the budget
year ending next June 30th is fundamentally based on earnings and
profits for this calendar year, which, as you know, Included the
bottom of the recession. As a result, even though the entire
fiscal year is expected to be one of mounting prosperity, our
revenues will reflect last Winter's recession levels, A similar
lag in revenues was also a basic cause of the $12.4 billion
deficit we incurred in fiscal 1959 at a parallel point in the business
cycle.
At this point, I would like to say a word about the common
allegation that our prospective *62 deficit is due largely to
uncontrolled increases in civilian welfare expenditures. Let's look

-k.

2.71

at the facts: Our total expenditures In fiscal '62 are expected
to increase about 7-1/2 billion dollars over the '6l level.
Leaving aside national security and space expenditures, as well as
the cost of farm price supports which have been with us for many years,
we find that expenditures on all other programs are due to increase
by about one and three-quarter billion dollars and, of this amount,
only about one billion dollars represents expenditures that were
not included in President Eisenhower's fiscal '62 budget submission.
In other words, leaving agriculture aside, less than 15$ of the
increase in '62 expenditures over '6l can be attributed to domestic
programs recommended or accepted by President Kennedy. On the other
hand, well over Sofo of the increase is directly attributable to
national security and space programs.
So much for fiscal 1962, let us look ahead to 1963,
Since our recovery Is progressing rapidly, the President
intends to submit a balanced budget to the Congress next year. Our
revenue system relies heavily upon income tax yields, which
fluctuate sharply with the state of the economy, making deficits
more or less inevitable whenever tax yields are sharply reduced by
recession. However, budgets should be balanced during years when
our revenues reflect reasonably prosperous conditions — as we
expect to be the case for fiscal 1963, and we should aim for
surpluses in times of full employment.
Although the recovery shows signs of moving ahead at a fairly
steady clip, there is, as yet, no sign that inflation is becoming
a serious threat. Unused plant capacity, plus more workers than
jobs, ensure our ability to meet foreseeable increases in demand.
For the first time in our several economic recoveries since
World War II, the index of wholesale industrial prices has actually
moved downward during the first seven months of recovery. In
addition, the stimulating effect of the current deficit is virtually
past, for Government income and outgo will come into approximate
balance by mid-Dec ember.
But while there is no serious danger of Inflation at present,
price increases could change the picture radically. They could
be just as hazardous to the continued growth of our domestic
economy as to our International position. Thus, while fiscal
policy is the responsibility of Government, the ultimate aim of
fiscal policy —• the promotion of sound economic growth with full
employment and stable prices — cannot be achieved without the
active cooperation of both business and labor.
Another important area where there is an urgent need for
cooperation between government and the private sector is in the
field of foreign aid — or to put it more accurately, In development
aid.

1 70
- 5Earlier this month, Eugene Black, President of the World Bank,
speaking from his broad experience in foreign development, said
that the financial and business leaders of the United States
have a greater role to play in making foreign aid effective than
either business or government fully appreciates. In his words,
"foreign aid is the concern of Wall Street as much as it Is the
concern of Washington." I agree entirely, and I would include
Detroit, Akron, Chicago, Pittsburgh and all our other Industrial
centers along with Wall Street,
Mr. Black stated in clear, simple terms the aim of international development: greater production. To increase production,
you must have investment, either from within or without the
developing country. In order to attract investment, and to ensure
that capital is not wasted once it becomes available, facilities must
be prepared and developed for its proper utilization. That Is
the function of foreign aid. And a great deal more than capital
is required for proper development. Techniques, skills, training
and ideas are also needed. So in a sense of what is at stake.
Quite apart from the cold war, it devolves upon us to supply aid
if we are to contribute to a healthy, stable and free world of the
future. The fact that there is a siren song from the Communists,
urging rapid-fire development under forced-draft state control and
offering techniques of political, ideological and even military
subversion as the first steps to a "new order", merely lends
urgency to an obligation that already exists.
Participation by the private sector In foreign aid requires
an entrepreneur's willingness to take risks — so long as they are
not foolish — and a driving will to help the developing countries
help themselves. Development aid offers to business no certain
assurances. It Is a new field, a new frontier for the entire world,
and the skills and resources of American business — which has pushed
back geographical and technological frontiers in the past — are
badly needed if the developing lands are to grow In an atmosphere
of freedom and enterprise.
Government is actively working to help develop these countries.
Our various foreign aid programs are intended to create a social
and economic basis for sound growth. In Latin America, for example,
a major aim of the Alliance for Progress program is the establishment
of such financial facilities as credit unions and stock exchanges.
The Alliance also is pledged to evolve modern and equitable tax
systems. The goal of such efforts is to attract foreign capital
by effectively mobilizing internal capital. In order to promote
investment in the developing countries by our own firms, we have,
in addition to the export guarantees of the Export-Import Bank, an
investment guaranty program which provides protection against war
risks,services
expropriation,
and
problems.
The
Department
Private
their
enterprise
of Commerce
to make
venturing
government
andcurrency
other
overseas.
Federal
aconvertibility
more And,
agencies
helpful
in some
partner
have
major
expanded
toprojects
American

abroad, public U. S. capital In the form of government loans or
credits has teamed with private U. S. capital to complete financing
plans involving a consortium of business firms.
There is a popular misconception that Government aid programs
and private business investment are alternative and antagonistic
ways of helping to solve the problems of developing countries.
In fact, neither Government assistance nor private investment can
possibly do the job alone. If we are to have a reasonable chance
of success in this formidable task, it must be based on a close
partnership between private business and government. Government
must bear the main burden of creating the infra-structure for
progress in such areas as transportation and power networks. It
must help establish the educational systems that are an essential
pre-condition to industrial growth. But if our private enterprise
system does not support these efforts by helping to create the
manufacturing and distributing base that is the true foundation of
growth and progress in freedom, Government programs to help the
developing lands will, in the long run, bear little fruit.
The relative importance of government programs and private
enterprise will, of course, vary from country to country. As
economic growth proceeds, developing societies will evolve from
almost total dependence upon government help to a stage where
government aid is no longer needed and private enterprise can -and must -- carry the whole load.
For this reason', I feel that those who pose the problem of
foreign aid in terms of sharp alternatives between the public and
private sector are unwittingly complicating an already difficult
undertaking. If our national goals are to be served, we must work
unceasingly to find ways In which government and private business
can cooperate most effectively In achieving a free and prosperous
world where all nations desiring freedom can maintain their
independence upon a base of stable economies and free institutions.
I can assure you that our Government is anxious for such cooperation.
As in any new and great
endeavor there will be some failures,
frustrations, and losses, but the challenge is clear. If we
disregard it, we will be isolating ourselves from a developing world.
We will be pulling the boundaries of freedom backward — instead
of expanding them to those who have a right to expect help from a
Nation such as ours.
I have said that Government must depend in large measure
upon business leadership to improve our international balance of
payments, our merchandise trade surplus, our foreign aid and
international development programs, and our long-term economic
growth. The question naturally arises: just what is Government doing
to help business discharge its responsibilities?

As you well know, those who manage business are limited
in the risks they can take with capital entrusted to their care.
Such restrictions can at times act as a brake on their natural
desire to maintain their plants at peak efficiency by continuously
adapting the very latest technological advances to their operations.
The Administration is trying to meet that problem by revising our
tax policy to increase industry's competitive efficiency. That
is our goal, and a tax policy to Increase the level of investment
devoted to modernizing productive equipment is our means.
We are moving on two fronts to achieve this objective, which
is considered by the President to be an urgent first step in overall tax revision and reform:
First, we are studying ways of making the Internal Revenue
Service schedules for depreciation more realistic, particularly In
industries where equipment quickly becomes obsolete. Our study of
depreciation methods, which has been under way for more than a year,
is continuing on an urgent basis, and has already borne fruit in
the new "lives" for textile equipment, representing a general
reduction of forty percent over previous levels, which was announced
last week.
Second, since realistic depreciable "lives" will not by themselves be enough to match the depreciation benefits allowed by most
Western European countries, the Administration has given its full
support to the flat, across-the-board investment credit contained
in tentative draft legislation now before the House Ways and Means
Committee. Chairman Wilbur Mills and a majority of the Committee
have promised that this modification of an earlier Administration
proposal will be a first order of business in the next session of
Congress. Incidentally, the tax credit in its present form is
almost identical with incentives built into the tax system of a
number of European countries.
This double-barrelled attack on lagging investment Is urgently
needed for a number of reasons:
The rapid economic growth of our Nation has always been one
of the economic marvels of the world, but lately other industrialized
countries have been outpacing us. All through the Fifties our average
real annual growth rate was less than three and a half percent,
compared with between four and six percent for most of the countries
of Western Europe, six to seven percent for the Soviet Union, more
than seven percent for West Germany and, for the last half of the
decade, more than nine percent for Japan. Recent fixed capital
expenditures (other than for housing) follow the same pattern:
for the United States, a drop from 12-1/2 percent of Gross
National Product in 19^8 to 9-1/2 percent In i960. For Western
Europe, an increase from 13.3 percent In 1951-55 to 15.1 percent
in the period 1956-60. Certainly these figures suggest a close
relationship
between
Investment
and
growth,
which is not
efficiency,
surprising, or
since
both,
expanding
should the
leadproductive
to economic
higher output.
base,
or improving
its

- 81 7s
As you might guess from the rates of domestic investment I have
just cited, Western European and Japanese manufacturers have been
modernizing more rapidly than have we. We must increase our
modernization programs if we are to maintain competitive efficiency.
More modern machinery, of course, means lower unit cost, or better
quality, or higher productivity, or better packaging -- and often a
combination of these things. It all adds up to tougher competition,
and that's what the changes we plan in tax policy are Intended to
meet. With more rapid modernization of machinery, we should be
able to expand our export markets in the manner required to achieve
a balance in our international payments, and meet Increasing
competition without resorting to trade restrictions that would
inevitably generate counter action against U. S. products.
Increasing investment in productive equipment will also aid the
growth of our domestic economy. The last recession was the mildest
of four since the war, and the recovery has so far been both rapid
and broadly-based. However, unemployment, following the pattern of
recent recoveries, has persisted long into the recovery stage, and
is still intolerably high. We expect a drop very soon -- unemployment
should fall to about five percent by next summer, but it is likely
that It will still be a problem a year hence.
Here is where a new tax policy could have an important effect.
By encouraging investment and equipment modernization, it would help
provide jobs for those in the machinery and allied industries. By
sxpanding export markets, it would help create other jobs. The effect
would not, perhaps, be either immediate or startling, but we would be
moving in the right direction — and this Is a direction In which we
nust move.
As Secretary Hodges noted recently, almost a million jobs in
nanufacturing have disappeared in the last year. We cannot hope to
avoid or to sidestep automation. We can, however, make it work for
as. More efficient machinery will bring about increasing productivity
Der worker, which has traditionally contributed to American growth.
fe can use it to expand our markets at home and abroad and to create
lew jobs. With 13.5 million new workers entering the labor force
)ver the next ten years, we cannot afford to have our economy operating
it less than full speed. Today, when the economy is advancing, Is the
;ime to take the kind of broad action to maintain the recovery
^presented by the depreciation reforms advocated by the Administration.
ft is, In many ways, an investment for the future. It merits your
careful attention and strong support,

oOo

compliance by reassuring our people that our tax laws are operating
fairly and iiapartially ami that *U section* of our society are
paying their proper share.
Let me now tuns the meeting back to thoae latera&al Rev«as«
Service officials who are vcraed in the intricacies of data processing ao you can get on with the day's busineas. Before leaving, I

la Che futtire of mm tax system gives ma a4de4 confidence Is the

hemispheric development called for by President Kennedy — the
Alliance for Progress. Tax reform ia one of the xaajor self-help
retirements for the success ef that effort, aad I encountered
great interest among Latin American leaders im United States methods
of tax administration. Since then, we have endeavored to provide
information and advice to our fellow members of the Alliance ia
this field. Commissioner of Internal Revenue Mortimer Gaplln and
other Treasury officials have, in fact, just returned from a conference OB tax administration im Buenos Aires. A gratifying start
MS made at that meeting toward inter-American tax cooperation.
Latin American leader* are wall aware that improving their natieaal
tax system helps to make their countries more self-sufficient aad
leas dependent upon aid from outside sources.
I em quite pleaaed with the innovation we mrm discussing ts*
day. For such an improvement la our tax system increases volnatsry

1 7Q
* I *
Conversion to a system of automatic data processing ia part
of a long-range plan developed by the Internal Revenue Service to
improve its operations by streamlimg tax administration. It is an
important atep toward making our tax system more efficient and mm
equitable. This is a highly desirable objective. Winety-nine par

Service. These funds make it possible for us to meet our obligation

meed tm our own security m& that of the entire free world. Th#r%faref a major improvement in revenue collection, such aa that
offered by automatic data processing, ia em important development.
I have attended many international economic conferences and 1
have always found that our self-assessment system of taxation is
held in high esteem abroad, Hat long ago, I was in Punta ami Sate,
Uruguay, helping to launch the ten-year cooperative program of

^

llfOEI & E ^ 5 S W I ^ ^

6

M*JJ$3,,f<
SBitvI§E coKrauwar*'

to help launch a major advance in tax administration.

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This blending of

brings together three of the major

of civilisation •-

which are well
system itself ia a

amw*mfcwp

mt^m^Kmm-^F e-

of
craft of public

istration, which has

the levying and eollectittg of taxes

ireafttPn* epem'w^F *#w<a*ePj(p <

And you in

ancient art of £ft
of maa'i

, *' f*<7v V/. **i

J-Z1<f

1 H i I
„L v> *«»'

TREASURY DEPARTMENT
Washington

October 23, 19^1
FOR RELEASE ON DELIVERY
REMARKS BY THE HONORABLE DOUGLAS DILLON
SECRETARY OP THE TREASURY
BEFORE THE
INTERNAL REVENUE SERVICE CONFERENCE
ON AUTOMATIC DATA PROCESSING
DEPARTMENT OF STATE, NEW AUDITORIUM,
MONDAY, OCTOBER 23, 19^1, 9:30 A.M., EDT
I am both pleased and proud to be here with you this morning
to help launch a major advance in tax administration.
This blending of mathematics, material research, and electronic
artistry that we prosaically term a "data processing system,"
brings together three of the major forces of civilization — science,
Government and commerce — which are well represented here today.
The system itself Is a product of centuries of creative scientific
research. Many of us represent the ancient craft of public
administration, which has counted the levying and collecting of taxes
among its duties since the concept of government came into being.
And you in the audience represent the equally ancient art of
commerce, which has provided the economic impetus for much of man's
progress.
Conversion to a system of automatic data processing is part
of a long-range plan developed by the Internal Revenue Service to
improve its operations by streamlining tax administration.

It is

an important step toward making our tax system more efficient and
more equitable. This is a highly desirable objective. Ninety-nine
per cent of our Federal revenues are collected by the Internal
D-274

-3-

182

I am quite pleased with the innovation we are discussing
today. For such an improvement in our tax system Increases voluntary
compliance by reassuring our people that our tax laws are operating
fairly and impartially and that all sections of our society are
paying their proper share.
Let me now turn the meeting back to those Internal Revenue
Service officials who are versed in the Intricacies of data
processing so you can get on with the day's business. Before
leaving, I want to thank each of you for coming here today. Your
interest in the future of our tax system gives me added confidence
In the future cooperation between government and commerce.

0O0

B o m in Chicago, Illinoisfwesterfield received his early education
in Washington, D. C. where he graduated from Dunbar High School. He was

the recipient of an Anson Phelps Stokes Scholarship and of fellowships f
the Rosenwald Foundation and the Social Science Research Council in the
years from 1940 to 1944. >^• fovtAP

Westerfield is married to Helene Bryant. They have |*g>ildren,
1
vi
Samuel III, 14, and Sheila Helene, 9.

- 2 Born in Chicago, Illinois, November 15, 1919, Dr. Westerfield
received his early education in Washington, D # C. where he graduated
from Dunbar High School. He was the recipient of an Anson Phelps
Stokes Scholarship and of fellowships from the Rosenwald Foundation
and the Social Science Research Council in the years from 1940 to
1944.
Dr. Westerfield was married to Helene Bryant in 1946. They have
two children, Samuel III, aged 14, and Sheila Helene, 9.

0O0

1 D ft
1C ••-'•

TREASURY DEPARTMENT
W A S H I N G T O N . D.C
April 4, 19(
FOR RELEASE A.M. NEWSPAPERS,
THURSDAY, APRIL 6, 1961.
DR. SAMUEL WESTERFIELD, ATLANTA UNIVERSITY DEAN,
NAMED TO KEY POST IN TREASURY DEPARTMENT
Treasury Secretary Douglas Dillon today/announced that
Dr. Samuel Z. Westerfield, Jr., Dean of the/School of Business
(Administration at Atlanta University, will/join the Treasury staff on
lalysis Staff in the Offise
ljune 1 as Associate Director of the Debt
lof the Secretary.
Until he takes over his new post at the close of the current
icademic year, Dr. Westerfield will ac£ as a consultant to the
Secretary on domestic and international monetary affairs.
Mr. Dillon said: "The Treasury
ent In announcing the appoint
rv/ces
of Dr. Westerfield. As one
s fortunate in obtaining the
Dr. Westerfield will be extremely
df the Nation's leading economist
domestic
and international finanei
helpful in the formulation 0/ bo
policy."
ean of the School of Business
Dr. Westerfield has
Economics at Atlanta University,
i\hministration and Profes
ved his Ph.D. from Harvard
Atlanta, Georgia, since l£52/ He re
asterj.^cfegree a year earlier from the
niversity in 1950 and h
ie w
awarded an A.B., Magna Cum Laude
ame University. In 193
ington, D. C
rom Howard University I
Dr. Westerfield has been an instructor of economics at Howard
University, and a professor of economics at West Virginia State ColK
Lincoln University, and Atlanta University, as well as guest Lecture]
at University College, Addis Ababa, Ethiopia, and University College;
Ibadan, Nigeria. In 1959-1960 he was visiting professor at the
Graduate School of Business Administration of Harvard University.
N
as an economist during summer
r===tfeirfceTrf ±Hi^r"Tlal^^
with
the
Bureau
of
Labor
Statistics
of the U.S. Department;
recesses,
o Labor^ the TVA, and the War J^abor Board. He is a member of tl~
Btard of Directors of the Atla/Cta/urban League, Chairman of the
search Committee of the Na^o#al Business League, and former
reasurer of the All-CitizeXs/flegis£ratdon Committee.

D-67

1 Q^

l

*Dr. Westerfield's

economic background will be extremely

valuable to the Office of International Final cc,i
where he will r>lay an important role in helping to develop policies vital
to the free world f u said Secretary Dillon.
T)r. Westerfield. 3>iK3TOI%}(Mi*&£UOQlQilQflaQCgjQ

received his A.B. degree Magna Cum Laude from Howard University in 1939,
University
He (SB* received his I.HIMiynr Master1 s °£mmm&
degree from Harvard in

A
1949 and his Ph.D, also from Harvard, a year later.

•J~ V^l

W

Oct. 20, 1961

Fur Re lease™

5'

FOR RELEASE AT *"P.M. EST FRIDAY, OCT. 20
DR. SAMUEL WESTERFIELD ADVANCED TO NEW POST

Treasury Secretary Douglas Dillon today named Dr. Samuel Z.

Westerfield Jr. Senior Adviser to the Director of the Treasury 'Department

A
Office of International Finance.
Br. Westerfield. a former Dean of the School of Business
Administration at Atlanta University, joined the Treasury last June as
•\

Associate Director of the Debt Analysis Staff.

-&&?**•

Dfi

Secretary Dillon, in announcing Dr. Westerfield*s advancement to the

new

post

said it will allow him "to devote his full talents to foreign

economic policies."

1 Q7

TREASURY DEPARTMENT
WASHINGTON, D.C.

^ V V /

October 20, 1961
FOR IMMEDIATE RELEASE
DR. SAMUEL WESTERFIELD ADVANCED TO NEW POST

Treasury Secretary Douglas Dillon today named Dr. Samuel Z.
Westerfield, Jr. to the post of Senior Adviser to the Director
of the Treasury Departments Office of International Finance.
Dr. Westerfield is a former Dean of the School of Business
Administration at Atlanta University, Atlanta, Georgia. He joined
the Treasury last June as Associate Director of the Debt Analysis
Staff. Secretary Dillon, in announcing Dr. Westerfield1s advancement to the new post, said it will allow him "to devote his full
talents to foreign economic policies."
"Dr. Westerfield's economic background will be extremely
valuable to the Office of International Finance, where he will play
an important role in helping to develop policies vital to the free
world," said Secretary Dillon.
Dr. Westerfield received his A.B. degree Magna Cum Laude
from Howard University in 1939. He received his Master's degree
from Harvard University in 1949 and his Ph.D.,also from Harvard,
a year later.
Dr. Westerfield has been an instructor of economics at Howard
University, and a professor of economics at West Virginia State
College, Lincoln University; and Atlanta University, as well as
guest Lecturer at University College, Addis Ababa, Ethiopia, and
University College, Ibadan, Nigeria. In 1959-1960 he was visiting
professor at the Graduate School of Business Administration of
Harvard University.
Born in Chicago, Illinois, Dr. Westerfield received his early
education in Washington, D. C., where he graduated from Dunbar High
School. He was the recipient of an Anson Phelps Stokes Scholarship
and of fellowships from the Rosenwald Foundation and the Social
Science Research Council in the years from 1940 to 1944.
Dr. Westerfield is married to the former Helene Bryant. They
have two children, Samuel III, l4, and Sheila Helene, 9.
0O0

D-275

TREASURY DEPARTMENT

18Q
"^/

WASHINGTON, D.C.

N^j^X

October 20, 1961
FOR IMMEDIATE RELEASE
DR. SAMUEL WESTERFIELD ADVANCED TO NEW POST
Treasury Secretary Douglas Dillon today named Dr. Samuel Z.
Westerfield, Jr. to the post of Senior Adviser to the Director
of the Treasury Department's Office of International Finance.
Dr. Westerfield is a former Dean of the School of Business
Administration at Atlanta University, Atlanta, Georgia. He joined
the Treasury last June as Associate Director of the Debt Analysis
Staff. Secretary Dillon, in announcing Dr. Westerfield's advancement to the new post, said it will allow him "to devote his full
talents to foreign economic policies."
"Dr. Westerfield's.economic background will be extremely
valuable to the Office of International Finance, where he will play
an important role in helping to develop policies vital to the free
world," said Secretary Dillon.
Dr. Westerfield received his A.BC degree Magna Cum Laude
from Howard University in 1939. He received his Master's degree
from Harvard University in 1949 and his Ph.D.,also from Harvard,
a year later.
Dr. Westerfield has been an Instructor of economics at Howard
University, and a professor of economics at West Virginia State
College, Lincoln University", and Atlanta University, as well as
guest Lecturer at University College, Addis Ababa, Ethiopia, and
University College, Ibadan, Nigeria. In 1959-1960 he was visiting
professor at the Graduate School of Business Administration of
Harvard University.
Born in Chicago, Illinois, Dr. Westerfield received his early
education in Washington, D. C., where he graduated from Dunbar High
School. He was the recipient of an Anson Phelps Stokes Scholarship
and of fellowships from the Rosenwald Foundation and the Social
Science Research Council in the years from 1940 to 1944.
Dr. Westerfield is married to the former Helene Bryant. They
have two children, Samuel III, 14, and Sheila Helene, 9.
0O0

D-275

189
totobcr 23, 1961

rot tsmsB A. n. w m r i a s ,
^5gaii^i£^r fto ttfar
1S&LXS DT THlMVKY'ti tfRBKU »IU. GWidtfWG
la* t w t w f f Ba|N«%»aat aaaaaaftad laat awaiag that tha tundra for two merits oi
franmiry billa* aaa aarian to ba «a additional iaaaa of tha billa datad &Xj 27, ifal,
and t;-a atbar ®mim
to IMP daAad ©atabar $&, 1?&1, aa!** war* affarad ©o October IS,
wara ®p®m$ at tlia Fadaral Raaarta Baafca 0® Oatebar 23. fsadara wara invited for
#l,l®0 9 C$0 9 ®©0 t or tfearaaawta, af n n l a j W H a « * tmt M0O f O0e l COO 9 ©r ttiaraafeauts,
of 152-riay M i l ® . ffe# dataila af th© tare •aria* ara aa fallavat
COHWfltlVE Bll» I

Hit*
£©*f
&wr®§#

B

fl«day trmmwf
bill*
i^tarlaft foaaarr 9$9y. .ffijft ,.
JUJinmJ
" lff;l,"lrtT'r';lppt>oiVi'liiB,Sr."
Aaaaal Rat*
frriaa
If.lilO

f.13W6
t.3t» 3/

IfflMay fraaamry bills
maturing kpril 36, 1962
Ipproi. BaalY."
Friaa
a*aaal tat©

9'M%
fi.6ji

2,73£*
2.70S$3/

pmrmwfc af the amount of ?l*iay bill® bid far at the lav prica was accepted
fxsrroasit of ttia aaeotani af lS$~diy billa bid far at taa law priaa waa accepted

tOTAl I' ,i©i» A m i S D *0R J W ACCSPtfi® ST IKt&Rfcl, RESftRVS DISTRICTSt

far

Biatrlot

I »

• •

Haw fart
!%ila<ieiphia
Clawlaad
If iCIBSOIIS

Atlanta
Chicago
St. taaia
Klaaaapalla
faaaas City
Dallas
5*aa fraaaiae*

TORI*

r1 9 AMT7*00*
ir;ns;»
f79uo9ooo
ihta^rvooo
30,110,000

a,736,w
2$gf3?3f«?©0
fl 9 3$l 9 0OO
21,010,000

»T,aA*9ooo
1390tf9M>

•?•»!«»

fRfoir9iof9ooo

Aaaaaiad

appXAad Fay

?3$»#f6?9©®©
109JOff(MM>
3£,Iif69«l
10,820,000
l# 9 ®36 f «»
117,^3,UOO

f76f5tifo®a
8,51*9,000
k99l\ktOOO
5,759,000
6,265,t,XJO

m97*°9ooo
ttffiitooo
693f8,0©0
7,091,000
$1,601,00®
.,,3^,900
i39m9w®
«?.y*i«»
Ilt101flf3,000 a/ H t t5a 9 lM # 000

Accepted
f'UJIMaf'

us # 236 9 m
39ltM*
3Q,6f7,0@©
*,95*,00Q
79665,G©0
a» 9 tfl 9 0«
S f 3»l 9 <*
6flSa*OQ0

39nk,m

ffffMB

Tncludee f21197ltff000 nonaonpatltiva bandara accapted at the average prlca
of 9fMI
1^00, QRJfffl
Xnaludaa IS®f35fc9000 aanaa»fatitiva tai^ara aaaaptad at tto avaraga ^riaa af ° M 3 *
On a eonpaa laana af tfea aana langth aad for tba *m* mwm% invest ad, tha ratura ei
thoaa bill® wauld prmMm
yialda af 2.37$, far ttea 91~<§ay biXla, and 2.1U9 f w J1
I89«day billa. Intaraat ratea on billa are qaotad in tarma af bank diaamiafc »»»
tha r a t w m ralatad ta tba faaa anaaiii af the billa payabla at aatarity v^mmtVm
tha amount invested and their laattfe in aataai masbar 9t day* ralatad to a 3©tMg
yaar. tm oo^raat, yialda oa aariifiaataa. notes, aad baada ara eompatad ia.**Jf
of interest oa tha amount iawatad 9 aad raiata tha number of daya raaaialai ia «
interest payment pariod to tha actual aawbar af dara la tha pariod, with
compounding if mor© than om aoapoa pariod ia involvad.
;/

[•

TREASURY DEPARTMENT
rvmiH'UM.Mii.^'.!.MmiiKKimrm

WASHINGTON, D.C.
October 23, 196l
'OR RELEASE A . M . NEWSPAPERS,
'uesday, October 24, 196l.
RESULTS OF TREASURY'S WEEKLY BILL OFFERING
The Treasury Department announced last evening that the tenders for two series of
reasury bills, one series to be an additional issue of the bills dated July 27, 196l,
nd the other series to be dated October 26, 1961, which were offered on October 18,
ere opened at the Federal Reserve Banks on October 23. Tenders were invited for
1,100,000,000, or thereabouts, of 91-day bills and for $600,000,000, or thereabouts,
f 182-day bills. The details of the two series are as follows;
ANGE OF ACCEPTED
OMPETITIVE BIDSs
High
Low
Average

91-day Treasury bills
maturing January 25, 1962
Approx. Equiv,
Price
Annual Rate
2.306$
99.417
2.334$
99.410
2.325$ 1/
99.412

182-day Treasury bills
maturing April 26, 1962
Approx. Equiv,
Price
Annual Rate
98.638
2.694$
98.629
2.712$
98.631
2.708$ 1/

58 percent of the amount of 91-day bills bid for at the low price was accepted
kO 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?
Accepted
Applied For
Accepted
District
Applied For
$ 14,724,000
?—14,8^4,006
J
26,212,000
I
33,548,000
Boston
428,236,000
976,521,000
739,969,000
1,512,477,000
New York
3,184,000
8,549,000
10,302,000
27,170,000
Philadelphia
30,697,000
42,114,000
32,426,000
34,627,000
Cleveland
2,959,000
5,759,000
10,820,000
10,820,000
Richmond
7,665,000
8,265,000
19,036,000
21,736,000
Atlanta
62,168,000
121,729,000
117,808,000
202,393,000
Chicago
5,398,000
6,398,000
22,961,000
28,381,000
St. Louis
4,931,000
7,091,000
16,590,000
21,010,000
Minneapolis
8,154,000
10,414,000
28,681,000
47,094,000
Kansas City
3,924,000
4,324,000
13,017,000
13,017,000
Dallas
28,053,000
118,178,000
63,301,000
85,529,000
San Francisco
$2,037,802,000
$1,101,123,000 a/ $1,254,166,000
$600,093,000 b/
TOTALS
/ Includes $211,749,000 noncompetitive tenders accepted at the average price of 99.412
/ Includes $59,354,000 noncompetitive tenders accepted at the average price of 98.631
/ On a coupon issue of the same length and for the same amount invested, the return on
these bills would provide yields of 2.37$, for the 91-day bills, and 2.78$, 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.
J-276

- 8 In his Inaugural address, President Kennedy said:
"We shall pay any price, bear any burden, meet any hardship,
support any friend, oppose any foe, to assure the survival of
liberty.11
Today I have tried to tell you something about the price the
President cited. Buying Savings Bonds is a small part of the

price. Using self-restraint to prevent inflation is another part.
And in the months and years ahead there will be sacrifices as
well. But self-restraint and sacrifice are the price of freedom.
I am confident that none of us thinks the price is too high.

0O0

1Q0
- 7 to serve the state. In the days ahead, our ability to meet
aggression in the world — in no matter what form it is mounted —

will depend to a large extent upon the power of our economy. Buy-

ing bonds is a way in which every American can contribute directl
to his Nation's economic strength. For those who ask what they
can do to help their country, here is a beginning step — an
important step. They can buy more bonds. The person who buys a
bond is both thrifty and patriotic. He is making a contribution
to his own security and to that of his country. It goes without
saying that the people who sell him the bond are performing a
considerable service as well — not only to him -- not only to

their Co^cgriniant — but vta their ETatiott and; to the entire fr

world. It may seem like a small service in an individual case, but
I assure you that in the aggregate, the sale of bonds makes a
major contribution to our national strength.

tX&ta "***$ V /

- 6 Today, tens of millions of Americans own more than $44 billion
worth of series E and H bonds. This record holding amounts to
15 per cent of the total Federal debt. I do not have to tell you

how important it is to sound government finance to have widespread
ownership of the debt in the hands of genuine savers. In this

connection, the average dollar investment in Savings Bonds remains
outstanding for seven years — thus Savings Bonds make a real contribution to the maturity structure of our debt. This means that
people who buy bonds buy them to save. They buy them as a longterm investment. That speaks well for the people who sell the
bonds and the way they are sold.
These are grave times. We and our allies in the free world

are challenged today as no nation or group of nations has ever bee
challenged before. We face a threat and a denial of our belief

that Government exists to serve the citizen, rather than the citiz

-5doesn't mean merely better goojis or more goods.

It means more

opportunity for the average American and for his children in terms

of education, housing,/and greater security in a dangerous world.

So you see that' on both the international and on domestic

economic scenes we are making progress that holds out great promise

for the future.

Unfortunately, our pattern of recovery is marred by a level of

unemployment that is far too high. The advance of the economy is

expected to bring unemployment from its present level of just under

seven percent to about five percent around mid-1962. Meanwhile,

this is a problem to which the Administration is giving serious and

continuing attention, with deep and sympathetic concern for the human

factors involved in the unemployment problem.

You who sell U.S. Savings Bonds are performing a public service ot
a high order. You are contributing to our national strength by i*1"

proving our system of debt management and thus helping to prevent
inflati*

1 QR

-4-

production is rising at an encouraging rate. This year our output —

at a seasonally adjusted annual rate — climbed from a recession low

of $501 billion in the first quarter to $516 billion infthe second qua

and $526 billion in the third quarter. In the final quarter, we anti

cipate a rate Ja? $540 billion. Next year, we expect output to contim

to rise, although somewhat less rapidly in the second half of the yeai

Fortunately, there are no present signs of inflation. However,

just as unnecessary wage and price increases could bring us into

serious trouble abroad, they could have the same effect at home. The

wage-price creep, if it began in earnest, could swallow the gains

we have already made and, by touching off an inflationary spiral

throughout the economy, might negate the gains we hope to make in the

future. But, if we use self -restrain^ our growing economy gives

every promise of supplying all of us -- labor, management and the

consumer -- with a steadily improving standard of living. This

1 Q£
-3At present, we face a very real danger to the international stai

of the dollar. That danger comes, not from abroad, but from sources

here at home. It is the danger of inflation through wage-price press

Unnecessary price increases now could seriously harm our internationa

trade position by pricing our goods out of foreign markets. As a

result the dollar, the major reserve currency of the free world, coul

become a target for speculative pressure. This development would be

serious, not only for us, but for all free nations, for it is in thei:

best interest that the dollar remain strong. It will remain strong

if both management and labor alike look beyond their individual and

immediate needs to the state of our nation. If we are to continue

to grow as a major economic power, we must use self-restraint to

4Na% keep wage-price inflationary pressures to a minimum.

So much for our international position. Now let's consider

the state of our domestic economy: its outstanding aspect at present

is a strong, healthy rate of recovery from recession. Our national

I 'Ml /

-2-

problem solved until we have reached reasonable equilibrium on our

international balance sheet. This will take time, because the long-

range solution to our international payments problem requires that w

significantly expand our merchandise exports. The Administration is

making every effort to help American manufacturers increase merchand:

exports. We are doing so by increasing Government services to

exporters, by intensifying our efforts to provide exporters with

up-to-date market information, by developing a comprehensive export

insurance program, and by advocating reforms in our tax policy on

depreciation of manufacturing equipment which will give industry

fresh incentives to modernize and, hence, to retain our competitive

position in world markets. In time, I am confident that aggressive

American know-how, combined with intelligent Government assistance,

will lead to a significant expansion of our export markets and will

help our firms to meet foreign competition at home.

"ffiZSFl* DFUKity

OCTOBER 10, im,

REMARKS BY THE HONORABLE DOUGLAS DILLON,'
SECRETARY OF THE TREASURY^
BEFORE THE U. S^ SAVINGS BONDS NATIONAL SALES CONFERENCEd
Sla+iBc-fifW, ^ ^ 7 T 8 c t 0 f e f e 7 2 5 , 1961, 12:30 PMLmi£PTn
I am happy to have the opportunity to meet with you today beeai
I believe wholeheartedly that the work you are doing is very imports
to our national welfare. Before I discuss that work, let me tell yo
something about the economic problems presently facing our Nation an
what we are doing to help solve them.
On the international scene, as you know, our chief concern is 01
balance of payments. Last Fall and Winter a number of world conditii
combined to bring on a near-crisis of confidence in the dollar. Thai
to the prompt action of President Kennedy in making it clear that tn<
would be no devaluation of the dollar, that crisis is now past. We
cannot, however, think of the problem as behind us. To be sure, thei
has been considerableWprovement and our international payments
deficit this year will only be about half the size of the deficits
in each of the past two years. We should not, however, consider the

1 QQ

TREASURY DEPARTMENT
Washington
October 25, 196l
RELEASE ON DELIVERY
REMARKS BY THE HONORABLE DOUGLAS DILLON
SECRETARY OF THE TREASURY
BEFORE THE
U. S. SAVINGS BONDS NATIONAL SALES CONFERENCE
STATLER-HILTON HOTEL, WASHINGTON, D. C.
WEDNESDAY, OCTOBER 25, 196l, 12:30 P. M., EDT
I am happy to have the opportunity to meet with you today because
I believe wholeheartedly that the work you are doing Is very important
to our national welfare. Before I discuss that work, let me tell you
something about the economic problems presently facing our Nation and
what we are doing to help solve them.
On the international scene, as you know, our chief concern is our
balance of payments. Last Fall and Winter a number of world conditions
combined to bring on a near-crisis of confidence in the dollar. Thanks
to the prompt action of President Kennedy in making it clear that there
would be no devaluation of the dollar, that crisis is now past. We
cannot, however, think of the problem as behind us. To be sure, there
has been considerable improvement and our international payments
deficit this year will only be about half the size of the deficits in
each of the past two years. We should not, however, consider the
problem solved until we have reached reasonable equilibrium on our
international balance sheet. This will take time, because the longrange solution to our international payments problem requires that we
significantly expand our merchandise exports. The Administration is
making every effort to help American manufacturers increase merchandise
exports. We are doing so by increasing Government services to
exporters, by intensifying our efforts to provide exporters with
up-to-date market information, by developing a comprehensive export
insurance program, and by advocating reforms in our tax policy on
depreciation of manufacturing equipment which will give Industry fresh
incentives to modernize and, hence, to retain our competitive position
in world markets. In time, I am confident that aggressive American
know-how, combined with intelligent Government assistance, will lead
to a significant expansion of our export markets and will help our
firms to meet foreign competition at home.
At present, we face a very real danger to the international
standing
-277
of the dollar. That danger comes, not from abroad, but from
sources here at home. It Is the danger of Inflation through wageprice pressures. Unnecessary price increases now could seriously

- 2 harm our international trade position by pricing our goods out of
foreign markets. As a result the dollar, the major reserve currency
of the free world, could become a target for speculative pressure.
This development would be serious, not only for us, but for all free
nations, for it is in their best interest that the dollar remain
strong. It will remain strong if both management and labor alike
look beyond their individual and immediate needs to the state of our
nation. If we are to continue to grow as a major economic power, we
must use self-restraint to keep wage-price inflationary pressures to
a minimum.
So much for our international position. Now letfs consider the
state of our domestic economy: its outstanding aspect at present
is a strong, healthy rate of recovery from recession. Our national
production is rising at an encouraging rate. This year our output —
at a seasonally adjusted annual rate — climbed from a recession low
of $501 billion in the first quarter to $516 billion in the second
quarter, and $526 billion in the third quarter. In the final quarter,
we anticipate a rate approaching $5^0 billion. Next year, we expect
output to continue to rise, although somewhat less rapidly in the
second half of the year.
Fortunately, there are no present signs of inflation. However,
just as unnecessary wage and price increases could bring us into
serious trouble abroad, they could have the same effect at home. The
wage-price creep, if it began in earnest, could swallow the gains we
have already made and, by touching off an inflationary spiral throughout the economy, might negate the gains we hope to make in the future.
But, if we use self-restraint, our growing economy gives every promise
of supplying all of us — labor, management and the consumer — with
a steadily improving standard of living. This doesn't mean merely
better goods or more goods. It means more opportunity for the average
American and for his children in terms of education, housing, and
greater security in a dangerous world.
So you see that while we face serious problems on both the international and on the domestic economic scene, we are nevertheless
making progress that holds out great promise for the future.
Unfortunately, our pattern of recovery is marred by a level of
unemployment that is far too high. The advance of the economy Is
expected to bring unemployment from its present level of just under
seven percent to about five percent around mid-1962. Meanwhile,
this is a problem to which the Administration is giving serious and
continuing attention, with deep and sympathetic concern for the human
factors involved in the unemployment problem.
You who sell U. S. Savings Bonds are performing a public service
of a high order. You are contributing to our national strength by
improving our system of debt management and thus helping to prevent
inflation.

- 3Today, tens of millions of Americans own more than $44 billion
worth of Series E and H Bonds. This record holding amounts to
15 per cent of the total Federal debt. I do not have to tell you how
important it is to sound government finance to have widespread
ownership of the debt in the hands of genuine savers. In this
connection, the average dollar investment in Savings Bonds remains
outstanding for seven years — thus Savings Bonds make a real
contribution to the maturity structure of our debt. This means that
people who buy bonds buy them to save. They buy them as a longterm investment. That speaks well for the people who sell the bonds
and the way they are sold.
These are grave times. We and our allies in the free world
are challenged today as no nation or group of nations has ever been
challenged before. We face a threat and a denial of our belief that
Government exists to serve the citizen, rather than the citizen
to serve the state. In the days ahead, our ability to meet
aggression in the world — in no matter what form it is mounted —
will depend to a large extent upon the power of our economy. Buying
bonds is a way in which every American can contribute directly to
his Nation's economic strength. For those who ask what they can do
to help their country, here is a beginning step — an important step.
They can buy more bonds. The person who buys a bond is both thrifty
and patriotic. He is making a contribution to his own security and
to that of his country. It goes without saying that the people who
sell him the bond are performing a considerable service as well —
not only to him — not only to their Nation — but also to the entire
free world. It may seem like a small service in an individual case,
but I assure you that in the aggregate, the sale of bonds makes a
major contribution to our national strength.
In his Inaugural address, President Kennedy said:
"We shall pay any price, bear any burden, meet any
hardship, support any friend, oppose any foe, to assure
the survival of liberty."
Today I have tried to tell you something about the price the
President cited. Buying Savings Bonds is a small part of the price.
Using self-restraint to prevent inflation is another part. And in
the months and years ahead there will be sacrifices as well. But
self-restraint and sacrifice are the price of freedom. I am
confident that none of us thinksoOOo
the price is too high.

D (~S Q
<C vj ^_

- 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 sub

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 Treasur

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, w
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 o
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 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 additi

pi)
bills dated

August 3, 1961

, (

?1

days remaining until maturity date on

TO pK)

February 1, 1962
) and noncompetitive tenders for $ 100,000 or less for the
182 -day bills without stated price from any one bidder will be accepted in ful

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 h
made or completed at the Federal Reserve Bank on November 2> 1961 , in cash or

other immediately available funds or in a like face amount of Treasury bills ma
ing November 2. 1961 Cash and exchange tenders will receive equal treatment.

fa}
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 asv gxe&otiGSL* as such, and l

wmmmmm
TREASURY DEPARTMENT
Washington
FOR IMMEDIATE RELEASE, ^XSCKEOK^ October 2$, 1961
XXXXXXXXXXJ

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

of Treasury bills to the aggregate amount of $ 1, 700^000*000 y or thereabout

cash and in exchange for Treasury bills maturing November 2, 1961 , in the am
of $1,701,619,000 , as follows:
91 -day bills (to maturity date) to be issued November 2, 1961 ,
in the amount of $ 1,100,000,000 , or thereabouts, representing an additional amount of bills dated

August 3. 1961

,

and to mature February 1, 1962 , originally issued in the

W
amount of $ 600,319,000
, the additional and original bills
(TO
to be freely interchangeable.
182 -day bills, for $ 600,000,000 , or thereabouts, to be dated
CEBO
November 2, 1961 y and to mature May 3. 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 fa

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

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

Tenders will be received at Federal Reserve Banks and Branches up to the clos

hour, one-thirty o'clock p.m., Eastern Standard time, Monday, October 3Qr 196

(SEP

7

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 tender

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

- -I 7 %

f*i r\ •-

TREASURY DEPARTMENT
WASHINGTON, D.C.
October 25, 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 November 2, 1961, in the amount of
$1,701,619,000, as follows:
91-day bills (to maturity date) to be issued November 2, 1961,
in the amount of $1,100,000,000, or thereabouts, representing an
additional amount of bills dated August 3, 1961, and to
mature February 1,1962, originally issued in the amount of
$600,319,000,
the additional and original bills to be freely
interchangeable.
182-day bills, for $600,000,000, or thereabouts, to be dated
November 2, 1961 and to mature May 3, 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 Standard
time, Monday, October 30, 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 D-278
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
August 3, 1961 fel-days remaining until maturity date on
February 1, 1962) 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 November 2, 1961,
In cash or other immediately available funds or in a like face
amount of Treasury bills maturing November 2, 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 k^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
0O0
return is made, as ordinary gain or loss.
Treasury Department Circular No. 4l8, Revised, and this notice,.
prescribe the terms of the Treasury bills and govern the conditions
of their issue. Copies of the circular may be obtained from any
Federal Reserve Bank or Branch.

IMMEDIATE RELEASE
BRAZIL DRAWS $30 MILLION UNDER EXCHANGE AGREEMENT
WITH UNITED STATES
<^ch-'' ->-:\i "

Secretary of the Treasury Douglas Dillon announced
today the drawing *f $t« Brazilian Gmmttmmt

of aa
i p <-

additional $30 million pursuant to the $70 million
i. orop*

agreement concluded in Hay If61 between the Brazilian
,e
Gmmtmmnt aad the Treaewy Essehtege Stabilisation Fu»4#
The $70 million agreement was fart of a larger package of
assistance, eoapvitiag $33&-*dUl0* ia nm 0. S.
Xik

GknrersBient ©redits to addition to mm credits fro© other
governments and international financial Institutions
as nail as varUwa agraameats for tha rescheduling of
p&ymmts due on previous loan obligations. f e r ctha agreements o«^iii<ia4 :>•**«» tha Governments ;\;
of Braail and the United States in May 1961, vara eaters*!
-

•"• -

•

ax

1

iato to aecordatioa; with president Earned* * desire to
asaist the B r a & i l i j & r ^

ill its program: to ptomU

tha economic gto^Bh aad prograss of Straaii under coadit&W
•••••••'

.,ne .

!

of monetary stability. Under thaaa agreements, wftieh
i

•>...•

are no** baitig ityl<p*9tad, total drawings oa the new
U.S. Goirarwant laredit© aloiia have amounted, since
September ? s 1961, to $128 million.

r -

<7

.

. •.

•

TREASURY DEPARTMENT
WASHINGTON, D.C.
October 27, 196l
IMMEDIATE RELEASE
BRAZIL DRAWS $30 MILLION UNDER EXCHANGE AGREEMENT
WITH UNITED STATES
Secretary of the Treasury Douglas Dillon announced today the
drawing by the Brazilian Government of an additional $30 million
pursuant to the $70 million agreement concluded in May 1961
between the Brazilian Government and the Treasury Exchange
Stabilization Fund.

The $70 million agreement was part of a

larger package of assistance, comprising $338 million in new
U. S. Government credits in addition to new credits from other
governments and international financial institutions as well as
various agreements for the rescheduling of payments due on previous
loan obligations.
The agreements concluded between the Governments of Brazil
and the United States in May 196l, were entered into in accordance
with President Kennedy's desire to assist the Brazilian Government
in its program to promote the economic growth and progress of
Brazil under conditions of monetary stability.

Under these

agreements, which are now being implemented, total drawings on
the new U. S. Government credits alone have amounted, since
September 7, 19&1, to $128 million.

D-279

J ^ y f- 2 g, /m/

A native af loader, Kavada, Miss Adae.

served aa Administrative Assistant to three Mevada Seaatora, aad
has been Administrative Assistant to Senator Alan Bible since
1954.
Her career includes teaching at tha University of Setae*, froa
which she was graduated, later becoaiag Assistant Deaa of Womea.
She holds a Master's degree ia English fro* Columbia University,
aad a Master's degree ia Law froa George Washington University.

She ia a member of the Bar of Nevada aad the District of Columbia,

and was admitted to practice before the Supreme Court of the Unite
States ia 1954.
As a Nevada member of the American Bar Associatlea,/ilss Adtas

was appointed last year to the Resolutions Comaittee of the A.B.A.

She is aa active ae&her of the Federal Bar Aasociatioa, the foeea1
Bar Association, as well as the Federal Coamunications Bar, the

American Judicature Society, and the Aaerican Academy of Political
aad Social Science.

oOo

c w ^

October 30, 1061
as?* j

IMMEDIATE RELEASE
EVA B. ADAMS TAKES OATH AS DIRECTOR OF THX UtWt

Miss Eva B. Adams of Nevada was today sworn ia aa Director of

the Miat. The oath of office was administered by Associate Justict
of the United States Supreme Court To* C. Clark.
Treasury Secretary Douglas 9111am welcomed Miss Adaas to her
« w post at tt» c w r a . o n ^ ^ i c h j ^ a t t w ^ d fe

Treasury officials.aad numerous frieads.
Secretary Dillon told the aew Mint Director;
"You are taking charge of the Mint at a time waea tha largest
number of II. S. colas la our history Is beiag made — about three
aad a quarter blllioa this fiscal year< 'lamvammsm** This, of

course, reljfjeets our growing ecoaoay ^therefore9 I can confideat
predict that your business will continue on the upgrade."
Miss Adams was nominated Director of the Mint by Preaideat
Kennedy oa September 2Z, 1961, aad confirmed by the Seaate oa

aG-Zn

TREASURY DEPARTMENT
WASHINGTON, D.C.
October 30, 1961
IMMEDIATE RELEASE
EVA B. ADAMS TAKES OATH AS DIRECTOR OF THE MINT
Miss Eva B. Adams of Nevada was today sworn in as Director
of the Mint. The oath of office was administered by Associate
Justice of the United States Supreme Court Tom C. Clark.
Treasury Secretary Douglas Dillon welcomed Miss Adams to
her new post at the ceremony in the Treasury building which was
attended by
Senator Alan Bible of Nevada and other Congressional
and Treasury officials, and numerous friends.
Secretary Dillon told the new Mint Director:
"You are taking charge of~theMint^at aTtime when the
largest number of U. S. coins in our history is being made —
about three and a quarter billion this fiscal year. This, of
course, reflects our growing economy. Therefore, I can confidently predict that your business will continue on the upgrade."
•-• --- ^ I P — -

— mm— -

Miss Adams was nominated Director of the Mint by President
Kennedy on September 21, 1961, and confirmed by the Senate on
September 23, 1961. A native of Wonder, Nevada, Miss Adams
served as Administrative Assistant to three Nevada Senators, and
has been Administrative Assistant to Senator Alan Bible since 195^
Her career includes teaching at the University of Nevada,
from which she was graduated, later becoming Assistant Dean of
Women. She holds a Master's degree in English from Columbia
University, and a Master's degree In Law from George Washington
University. She is a member of the Bar of Nevada and the
District of Columbia, and was admitted to practice before the
Supreme Court of the United States in 1954.
As a Nevada member of the American Bar Association, Miss Adam*
was appointed last year to the Resolutions Committee of the A.B.A.
She Is an active member of the Federal Bar Association, the Women's
Bar Association, as well as the Federal Communications Bar, the
American Judicature Society, and the American Academy of Political
0O0
and Social Science.
D-280

TREASURY DEPARTMENT
WASHINGTON, D.C.
October 30, 196l
IMMEDIATE RELEASE
EVA B. ADAMS TAKES OATH AS DIRECTOR OF THE MINT
Miss Eva B. Adams of Nevada was today sworn in as Director
of the Mint. The oath of office was administered by Associate
Justice of the United States Supreme Court Tom C. Clark.
Treasury Secretary Douglas Dillon welcomed Miss Adams to
her new post at the ceremony in the Treasury building which was
attended by
Senator Alan Bible of Nevada and other Congressional
and Treasury officials, and numerous friends.
Secretary Dillon told the new Mint Director;
"You are taking charge of the Mint at a time when the
largest number of U. S. coins in our history is being made —
about three and a quarter billion this fiscal year. This, of
course, reflects our growing economy. Therefore, I can confidently predict that your business will continue on the upgrade."
Miss Adams was nominated Director of the Mint by President
Kennedy on September 21, 1961, and confirmed by the Senate on
September 23, 196l. A native of Wonder, Nevada, Miss Adams
served as Administrative Assistant to three Nevada Senators, and
has been Administrative Assistant to Senator Alan Bible since 1954.
Her career includes teaching at the University of Nevada,
from which she was graduated, later becoming Assistant Dean of
Women. She holds a Master's degree in English from Columbia
University, and a Master's degree In Law from George Washington
University. She is a member of the Bar of Nevada and the
District of Columbia, and was admitted to practice before the
Supreme Court of the United States in 1954.
As a Nevada member of the American Bar Association, Miss Adams
was appointed last year to the Resolutions Committee of the A.B.A.
She is an active member of the Federal Bar Association, the Women1s
Bar Association, as well as the Federal Communications Bar, the
American Judicature Society, and the American Academy of Political
and Social Science.
0O0

D-280

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TREASURY DEPARTMENT

^

WASHINGTON, D.C.
October 30, 1961
)R RELEASE A. M. NEWSPAPERS, Tuesday, October 31, 196l.
RESULTS OF TREASURY1S WEEKLY BILL OFFERING
The Treasury Department announced last evening that the tenders for two series of
reasury bills, one series to be an additional issue of the bills dated August 3, 15*61,
nd the other series to be dated November 2, 1961, which were offered on October 25, were
pened at the Federal Reserve Barics on October 30. Tenders were invited for $1,100,000,000,
r 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:
ANGE OF ACCEPTED
OMPETITIVE BIDS:
High
Low
Average

91-day Treasury bills
maturing February 1, 1962
Approx. Equiv*
Price
Annual Rate
99.1*28
2.263%
99.U21
2.291#
99.1*21*
2.280# 1/

182-day Treasury bills
maturing May 3% 1962
Approx. Equiv.
Price
Annual Rate
98,686
2^99?
98.677
2.617#
98.679
2.6l3# l /

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

TAL TENDERS APPLIED FOR AND ACCEPTED BY FEDERAL RESERVE DISTRICTS:
District
Boston
Hew York
Philadelphia
Cleveland
Richmond
Atlanta
Chicago
St. Louis
Minneapolis
Kansas City
'Dallas
'ten Francisco
TOTALS

Applied For
I29,151,000
1,603,327,000
2U,528,000
33,702,000
10,632,000
20,192,000
232,523,000
29,313,000
22,383,000
38,501,000
16,350,000
96,21*0,000
$2,156,81*2,000

Applied For
Accepted
Accepted
$
1,338,000 $ 1,313,000
1
12,61*7,000
1*82,827,000
1,275,338,000
707,U9li,000
1,796,000
8,9H*,000
9,378,000
7,085,000
22,505,000
27,552,000
2,590,000
8,81*8,000
10,392,000
U,315,000
1*,729,000
1^,967,000
60,1*61*,000
126,189,000
15U,639,000
5,779,000
9,879,000
19,033,000
3,915,000
6,500,000
16,163,000
13,961,000
20,858,000
26,501,000
4,1*37,000
1*,1*37,000
16,150,000
11,801,000
1*0,321,000
85,320,000
$1,100,236,000 £ / $1,529,856,000 $600,283,000 b/

Includes $215,258,000 noncompetitive tenders accepted at the average price of 99.1*21*
Includes $56,198,000 noncompetitive tenders accepted at the average price of 98.679
On a coupon issue of the same length and for the same amount invested, the return on
these bills would provide yields of 2.32&for the 91-day bills,and 2.68#, 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,
!8l

214

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 sub

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

eluded from consideration as capital assets. Accordingly, the owner of Treasur

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, w
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 o
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
xo&acbc
bills dated August 10, 1961
91 days remaining until maturity date on
f (

^a3$c

USST

February 8, 1962 ) and noncompetitive tenders for $100,000 or less for the
182 -day bills without stated price from any one bidder will be accepted in full

at the average price (in three decimals) of accepted competitive bids for the re

tive issues. Settlement for accepted tenders in accordance with the bids must be
made or completed at the Federal Reserve Bank on November 9, 1961 , in cash or

other immediately available funds or in a like face amount of Treasury bills mat
ing November 9, 1961 Cash and exchange tenders will receive equal treatment.

pEcJE
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 arsv exemiptlQa- as such, and l

wwMffiiMto&j*fflAi

TREASURY DEPARTMENT
Washington
FOR IMMEDIATE RELEASE $ffl&WMX£ November 1, 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

cash and in exchange for Treasury bills maturing November 9, 1961 y in the am
of $1,700,694,000 , as follows:
x^Jc
91 -day bills (to maturity date) to be issued November 9, 1961 »
in the amount of $ 1,200,000,000 y or thereabouts, representing an additional amount of bills dated August 10. 1961 y
aSSc
and to mature February 8, 1962 y originally issued in the
amount of $ 600,155,000

y the additional and original bills

135
to be freely interchangeable.
182 -day bills, for $ 500.000.000 y or thereabouts, to be dated

"~033T

mk
November 9. 1961 y and to mature

3®T

May 10. 1962

•

3315

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

hour, one-thirty o'clock p.m., Eastern Standard time, Monday, November 6, 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

eO-3-frl

November 1, 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 November 9>196l, in the amount of
$ 1,700,694,000, as follows:
91-day bills (to maturity date) to be issued November 9, 1961,
in the amount of $ 1,200,000,000, or thereabouts, representing an
additional amount of bills dated August 10, 1961, and to
mature February 8, 1962, originally issued in the amount of
$600,153,000, the additional and original bills to be freely
interchangeable.
182-day bills, for $ 500,000,000, or thereabouts, to be dated
November 9, 196l, and to mature May 10, 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 Standard
time, Monday, November 6, 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 fa^p
amount of Treasury bills applied for, unless the tenders are
accompanied by an express guaranty of payment by an incorporated bank
D-282
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
August 10.1961, (91-days remaining until maturity date on
February o, 1962) 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 November 9> 196%
in cash or other immediately available funds or in a like face
amount of Treasury bills maturing November 9, 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 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 he
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 hereunde
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 noticef
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

1Q

REMARKS BY STANLEY S. SURREY
ASSISTANT SECRETARY OF THE TREASURY
BEFORE THE ANNUAL MEETING
OF THE
AMERICAN INSTITUTE OF
CERTIFIED PUBLIC ACCOUNTANTS
CHICAGO, ILLINOIS
NOVEMBER l,196l
My assignment on this panel is to discuss the tax picture from
the standpoint of the Treasury Department's legislative program.
As you know, the President recommended a number of changes in the
Internal Revenue Code in his April 1961 Tax Message. Congressman
Keogh has recounted the history of the Congressional consideration
of those changes in the 1961 Session. The present status is that
a bill is pending in the House Ways and Means Committee, and is
scheduled to be its first order of business in the 1962 Session.
In the meantime, the Committee has released a Discussion Draft
embodying Its tentative decisions, and a Staff General Explanation
of that Draft.v I urge your study of the Draft and the Explanation.
The Treasury Department intends to urge before the Congress in
1962 the objectives set forth in the President's Tax Message. It
believes those objectives are as important in 1962 as In 1961 — in
some aspects even more important. The Department recognizes, of
course, that the Ways and Means Committee's extensive and painstaking
consideration of the Treasury Department's detailed proposals to
implement that Message have produced many improvements. It would
be surprising if they did not, for the whole purpose of lengthy
public hearings and Committee executive sessions is to permit
critical examination before the mirrors of many views and situations.
One must be careful to draw distinctions between improvements in
the details of proposals and differences in policy viewpoints.
Further, even as to policy viewpoints, one must distinguish between
minor variations in policy where the die could well be cast either
way and in which the Treasury Department would willingly accept the
Committee's preferences, and those policy differences which are
basic to the particular issue Involved. The Treasury Department,
in its comparison of the Discussion Draft with its original proposals, must make distinctions of this nature in preparing its
position for the further consideration of the bill. It may therefore
be appropriate to say a few words on the various items covered by
the Discussion Draft.

- 2 First, as to the investment credit. The Democratic members
of the Committee have publicly emphasized the importance of the
investment credit, and I believe this view is shared by many of the
Republican members. The Draft embodies an 8 percent credit against
tax for investment in tangible personal property. It thus adopts a
uniform approach as compared with the President's graduated credit
turning on a comparison of current investment with prior investment.
There is much that can be said either way on this question of credit
structure. I might observe that the Canadians, in adopting an
incentive for investment in their 196l tax changes, chose the
Administration's form for the same reasons that prompted its
suggestion by the President — it provides the maximum incentive
at the least revenue cost. The Committee preferred a simpler form
which made the same amount of credit available to all businesses.
The Treasury Department places primary stress on the principle of
the credit, and finds the Committee's formulation well within the
range of acceptable alternatives as to the structure of the credit.
Most of the other structural details accord with the Treasury's
views — the coverage of tangible personal property (broadly defined
to cover real property other than buildings, if used in manufacturing,
production, transportation and communication)) the extension to used
assets up to $50,000 (though the $100,000 limit where a joint
return is used seems too generous); the non-application to public
utilities.
The Treasury Department has, as you know, continued to make
the progress toward depreciation revision that the President and
the Secretary stressed last April would be made. Thus, the
Department is engaged in an extensive re-examination of depreciable
lives, and is currently tabulating the large amount of data
resulting from two surveys. The President's announcement on
October 11 of new depreciable lives for the textile industry is a
firm indication that this study is in earnest. Our endeavor is to
provide a schedule of realistic lives in the light of both current
and expected technology so as to permit the proper measurement of
taxable income, which is the function of the depreciation deduction.
This is one of the most significant tax steps that has been taken in
many years. In addition, we are studying ways In which the
application of the depreciation deduction may be simplified and
produce less controversy in Individual situations. Thus, the pending
bill makes an important contribution in its relaxation of the rules
as to salvage value. If estimated salvage value is less than
10 percent of cost, then the salvage value may be disregarded. We
are hopeful that our depreciation studies will disclose other avenues
of simplification and improvement.
Depreciation revision, with its more realistic lives and
greater ease in administration, will contribute greatly to increased
investment in machinery and equipment, and thus in the modernization
of our industries. But this is not enough. If our recovery from the

-3-

recession Is to be strong and sustained, if our basic rate of growth
is to increase, if we are to maintain and improve our competitive
position in the world, then we must achieve a greater degree of
investment in our productive goods. The incentive of the investment
credit — and it is an incentive — is designed for this purpose.
The Treasury believes that its twin program of depreciation reform —
depreciation revision and investment credit — are vital to our
economic well-being.
As to the other aspects of the Draft, I might next mention,the
section 1231 change. Here the Draft contains the recommendation
that section 1231 be changed to provide ordinary income treatment
for so much of the gain as is not in excess of prior depreciation.
Indeed, this provision is an essential comparison to depreciation
revision and the credit. The Draft looks only at depreciation
taken after December 31* i960, which while generous is an acceptable
approach. But the Draft is confined to personal property and thus
leaves real property still with capital gain treatment. This
continuation of the section 1231 rules as to real property leaves
the real property problems unsolved, and we Will press for some
solution In this area, either in continued consideration of this
aspect of section 1231 or other approaches. Indeed, the area of
"real estate shelters" requires that some action be taken to end
abuses — and I think that many in the real estate area share this
view.
As to withholding on dividends and interest, we still have to
face the unyielding fact that there is $4 billion of unreported
dividends and interest (about 9 percent of all dividends and
35 percent of all interest), involving about $900 million of taxable
dividends and $2 billion of taxable interest — and a revenue loss of
about $900 million. The Treasury Department believes that only
withholding will end this almost fantastic state of affairs.
Educational measures, helpful as they may be in preventing further
deterioration, will not turn the tide. ADP and account numbers,
now or in the future, are not the answer. ADP is only as good as
the information it receives, and information returns on all payments
of interest and dividends would be an expensive process to both
payors and the Service even if practicable. Also ADP does not by
itself collect taxes. But an automatic method that prevents noncompliance — such as withholding — does collect taxes. The
Discussion Draft contains some refinements in the withholding
technique which were suggested by the Treasury after the Committee
indicated it preferred to stress reduction of any possible hardships
on payees as contrasted with more simplified steps at the payor
level. These refinements Involve exemption certificates for savings
accounts, savings bonds and dividends, and also a system of quarterly
refunds
takes
account
of
over-withholding
dueTreasury,
tofurther
personal
ments
withholding
exemptions
consultation
compatible
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- h -

001

As to expense accounts, here also the main outlines of the
problem seem clear. The entertainment and traveling expense area
is a difficult one under an Income tax — in the United States or
elsewhere. It is a borderline area where items capable of having
some association with business or the other earning of income
mingle with items Involving or capable of involving personal
pleasure and activity. These latter items would be clearly nondeductible without the business association. It is thus a sensitive
area where a net income concept based on the deduction of "all
business expenses" simply can not stand the strain. The sensitivity
of the area and the inadequacy of present rules are generally
recognized by nearly all. "Expense account society" and "expense
account abuses" are common terms.
Yet what is the solution? Unfortunately few discussions get
much beyond this question. For a crucial question is just what
need be preserved as an area of deductibility where entertainment
is involved, taking into account — and this is important — the
obvious abuses that exist.
The President found no real area to be preserved except that of
the "quiet business meal" and recommended disallowance of
entertainment expenses. The Committee so far has had difficulties
with this rigorous attitude. But since the Committee is also
worried about the abuses it has searched for a middle ground. The
Discussion Draft permits entertainment expenses to be deductible
"if directly related to production of income and not merely for
good will". This phrasing Is intended to be restrictive as compared
with present law because of the "not merely for good will" rule.
There may be problems with this phrasing,, and test, and it is not
the Treasury's preference. The Treasury still stands on Its
recommendation and in effect feels that the burden is on those who
stress the "cure the abuse" approach to see if a better solution can
be found than that recommendation. After all, just how should the
yachting weekend, the round up of a few business associates to fly
off for a weekend, the reciprocal parties at the country club, be
treated? They are presently deductible. If we don't want it this
way, what should be the rule? Is there really any solution other
than disallowance?
When we turn to traveling expense, here also we can see the
problem — that of expenses which appear in many cases to be geared
in their amounts to personal comforts rather than business ends,
plus pleasure travel which has a thin veneer of business, as the
Florida trip with a convenient business appointment or the
international convention. The President recommended an upper limit
of twice the Government per diem (now $l6 for domestic travel) and
an allocation where the trip was a combined business and pleasure
trip.
The
again
so
far
hassubstantiation
had
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inall
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- 5entertainment and travel expenses, in order to overrule the Cohan
case.
When we turn to the foreign income area, the Discussion Draft
and events connected with it are working in the direction of the
President's recommendations. The foreign income proposals of the
President are based on some basic changes in the world of today —
the fact that the United States must constantly watch its balance
of payments position, that the development of Western Europe with
its new mass market is making economic conditions there similar
in significant respects to those in the United States, and that the
jet age has changed living patterns for many people. All of this
leads to the viewpoint that tax rules adopted many years ago are
in need of re-examination.
In response, the Draft places a ceiling on the previous
unlimited exemption for residence abroad. It also ends the rate
reduction now involved in the foreign tax credit formula when a
credit is given to the parent for its foreign subsidiary's tax.
Incidentally, the critics of this proposal who stress the
separateness of parent and subsidiary and say that present law is
appropriate since it yields a 52 percent rate on the actual
dividend should ask themselves why, if their argument is correct,
there should be a credit granted at all for the subsidiary's tax.
The Draft, in addition, strengthens the information requirements
of the Code.
Finally, the Committee requested the Treasury to make public
its draft of legislative language designed to implement the
President's recommendation that tax deferral be ended for tax haven
corporations. The Treasury welcomes suggestions respecting this
draft, for it recognizes the definitional and other technical points
involved in the proposal. But as we see It, the proposal is needed
both to end abuses in this area and also to end the tax preferences
for investment abroad as against investment in the United States
that are inherent in much of tax haven operations. At a time when
we are vitally concerned with a strong and modern United States
industrial machine we cannot be granting tax inducements that may
lure investment to Western Europe and other developed areas that
would otherwise stay at home.
As for other aspects of the foreign income the Committee
did not have time to consider the matters of foreign trusts,
Canadian investment companies, or the estate tax exemption for
foreign real estate, and we regard these as still on the agenda.
The rest of the Draft concerns itself with the tax treatment
of certain types of business organizations that now are treated
more lightly than the general run of corporate activity. The present
Draft covers cooperatives and mutual casualty insurance companies,

and the Committee is also considering the treatment of savings banks
and savings and loan associations. These subjects very obviously
involve the clash of opposing business groups. The Treasury thus
finds itself in the role of a referee in the ring, subject to
being outvoted by the Congressional judges at the ringside. We
believe that in all of these situations the present balance should
shift considerably closer to general tax treatment, and the Draft
also moves in that direction.
One recommendation of the President is not touched on at all by
the Draft, and that is the elimination of the 4 percent dividend
credit and $50 exclusion. The Treasury still regards the
recommendation as an important one. It must be remembered that the
President intends to submit a balanced budget for fiscal 1963, so
that the cast of the revenue balance in the pending bill is an
important consideration.
Looking further ahead, the Treasury is preparing a program of
basic tax reform. Our efforts center around a broadening of the
income tax base, an elimination of preferences, and a consequent
re-examination of the rate structure. Our goals are a more
equitable application of the tax, a tax structure that is more
conducive to economic growth, and a tax structure that is free from
hampering complexities wherever possible. We believe that the
urgent and deeply felt desire for tax reform shares these goals
with us as the "image" of the tax reform that is sought. The
pending bill is thus only a first step along the road.

0O0

-2-

c24

Our economy must support heavy expenditures to meet our urgent
national needs -- both at home and abroad — and to sustain the
defensive forces that guard our own security and that of the entire
free world. These necessary expenditures are reflected in our prese*
tax burden. More than half of our tax dollar is devoted to defense
alone, and substantial additional portions go to other programs of
vital importance to our national security. Therefore, every
additional dollar of revenue derived from the improved collection
techniques made possible by electronic equipment is a direct
contribution to the advancement of our national interest.
_.

'**>.

The facility we dedicate today is the heart of the total ADP
system. Within this building, magnetic tapes will eventually
store the entire record of every taxpayer in the United States.
These master tapes will transcribe information electronically from
data supplied by nine regional service centers to be established
throughout the country. Five or six years from now, when the system
is fully developed, some 78 million accounts — 72 million individual
and 6 million business — will be maintained here on some 400 miles
of tape. From this data, the Internal Revenue Service will be able
to determine the tax status of any taxpayer, at any time.
With automatic data processing equipment, the Service will be
able to keep a systematic check on failure of taxpayers to file
returns, to determine quickly whether taxes are owed for previous
years,
and
toadvantages
instantly detect
such things
duplicate
claimst«£
for *
But
the
o^ ADP will
not be as
limited
to improve
refunds. It The
willInternal
also enable
the Service to
a better
job ofpaying
collection.
Revenue
is do
also
chargeo^with
determining
returns
should
be selected for
audit
purposes.
out refunds which
under our
system
of withholding.
Last
year,
some 36
million refund checks were mailed. Every year, some five hundred
thousand of these checks fail to reach their destination, usually
because the taxpayer has moved without leaving-any forwarding ^address,,
With the hel#-$of ADP, the Internal Revenue Service will* be able to,!
cure this situation and refunds will be faster and more certain. %
The new technique will not dehumanize our tax administration.
It will not be man against machine -- the individual taxpayer versus
a giant, impersonal monster that thrives only on numbers. The
Internal Revenue Service will continue to offer all the assistance
and other services now provided to taxpayers with questions or
problems. In fact, the new system should permit the Service
to devote more time to direct, personal contacts. .The over-all
effect will be improved and rrtbre rapid service to taxpayers in" all
their dealings wHth the Government.
I am pleased that you could join us on this important occasion.
As the ADP system becomes fully operative in the years ahead, Iaj
confident that we will look back on this occasion as a major turning0O0
point in public tax administration.
,.r^s^

•aiffttg^Kfr^*"

TREASURY DEPARTMENT
Washington
November 3* 196l
FOR RELEASE P.M. NEWSPAPERS
MONDAY, NOVEMBER 6, I96I.
EEMARKS OF THE HONORABLE DOUGLAS DILLON
SECRETARY OF THE TREASURY
AT THE DEDICATION OF THE INTERNAL REVENUE SERVICE
NATIONAL COMPUTER CENTER, MARTINSBURG, WEST VIRGINIA,
MONDAY, NOVEMBER 6, 1961, 11:30 A.M., EST
We are here today, not merely to dedicate one more Government
building, but to launch a new era in public tax administration.
By employing electronic equipment to process an enormous mass of
data far more rapidly and far more accurately than can be done by
manual methods, we are taking a giant stride toward improving the
operation of our tax system. We are also demonstrating that
Government is a dynamic organism, capable of self-improvement through
the adoption of modern tools and techniques. The British statesman,
Edmund Burke, once said: "Government is a contrivance of human
wisdom to provide for human wants. Men have a right that these wants
should be provided for by this wisdom."
One of the continuing wants of the American people is ever more
efficient and more effective public administration. By meshing an
automatic data processing system into the operations of the Internal
Revenue Service, we are moving closer to fulfilling that want.
The ADP system we are initiating here today is a major advance
that brings an entirely new dimension to tax administration.
A very important element in this advance is the fact that
adoption of automatic data processing equipment will increase our
total revenues by helping to ensure that all of our citizens are
bearing their full and fair share of the national tax burden. It shoul
also give comforting reassurance to our honest, tax-paying citizens —
and they are in the vast majority — that life will be made far more
difficult for the foolish few who are tempted to cheat or to evade.
And, by enhancing the certainty and fairness of our tax administration*
it will strengthen the Nation to face the tasks that lie ahead.
We are locked in a struggle with a powerful and resourceful
adversary. There Is no end in sight to that contest. We are
confident that we shall emerge victorious — no matter what form the
contest may take. But, to prevail, we must have an economy that
flourishes and grows stronger every year.
D-283

O >~Y f*\

TREASURY DEPARTMENT
Washington
November 3, 196l
FOR RELEASE P.M. NEWSPAPERS
MONDAY, NOVEMBER 6, I96I.
REMARKS OF THE HONORABLE DOUGLAS DILLON
SECRETARY OF THE TREASURY
AT THE DEDICATION OF THE INTERNAL REVENUE SERVICE
NATIONAL COMPUTER CENTER, MARTINSBURG, WEST VIRGINIA,
MONDAY, NOVEMBER 6, 1961, 11:30 A.M., EST
We are here today, not merely to dedicate one more Government
building, but to launch a new era in public tax administration.
By employing electronic equipment to process an enormous mass of
lata far more rapidly and far more accurately than can be done by
nanual methods, we are taking a giant stride toward improving the
operation of our tax system. We are also demonstrating that
jovernment is a dynamic organism, capable of self-improvement through
the adoption of modern tools and techniques. The British statesman,
Sdmund Burke, once said: "Government is a contrivance of human
ifisdom to provide for human wants. Men have a right that these wants
3hould be provided for by this wisdom."
One of the continuing wants of the American people is ever more
efficient and more effective public administration. By meshing an
automatic data processing system into the operations of the Internal
Revenue Service, we are moving closer to fulfilling that want.
The ADP system we are Initiating here today is a major advance
bhat brings an entirely new dimension to tax administration.
A very important element in this advance is the fact that
adoption of automatic data processing equipment will Increase our
total revenues by helping to ensure that all of our citizens are
tearing their full and fair share of the national tax burden. It should
also give comforting reassurance to our honest, tax-paying citizens —
and they are In the vast majority — that life will be made far more
iifficult for the foolish few who are tempted to cheat or to evade.
tad, by enhancing the certainty and fairness of our tax administration,
Lt will strengthen the Nation to face the tasks that lie ahead.
We are locked in a struggle with a powerful and resourceful
adversary. There is no end In sight to that contest. We are
confident that we shall emerge victorious — no matter what form the
contest may take. But, to prevail, we must have an economy that
flourishes and grows stronger every year.
D-283

- 2 Our economy must support heavy expenditures to meet our urgent
national needs — both at home and abroad — and to sustain the
defensive forces that guard our own security and that of the entire
free world. These necessary expenditures are reflected in our present
tax burden. More than half of our tax dollar is devoted to defense
alone, and substantial additional portions go to other programs of
vital importance to our national security. Therefore, every
additional dollar of revenue derived from the improved collection
techniques made possible by electronic equipment is a direct
contribution to the advancement of our national interest.
The facility we dedicate today is the heart of the total ADP
system. Within this building, magnetic tapes will eventually
store the entire record of every taxpayer in the United States.
These master tapes will transcribe information electronically from
data supplied by nine regional service centers to be established
throughout the country. Five or six years from now, when the system
is fully developed, some 78 million accounts — 72 million individual
and 6 million business — will be maintained here on some 400 miles
of tape. From this data, the Internal Revenue Service will be able
to determine the tax status of any taxpayer, at any time.
With automatic data processing equipment, the Service will be
able to keep a systematic check on failure of taxpayers to file
returns, to determine quickly whether taxes are owed for previous
years, and to instantly detect such things as duplicate claims for
refunds. It will also enable the Service to do a better job of
determining which returns should be selected for audit purposes.
But the advantages of ADP will not be limited to improve tax
collection. The Internal Revenue Service is also charged with paying
out refunds under our system of withholding. Last year, some 36
million refund checks were mailed. Every year, some five hundred
thousand of these checks fail to reach their destination, usually
because the taxpayer has moved without leaving any forwarding address.
With the help of ADP, the Internal Revenue Service will be able to
cure this situation and refunds will be faster and more certain.
The new technique will not dehumanize our tax administration.
It will not be man against machine — the individual taxpayer versus
a giant, impersonal monster that thrives only on numbers. The
Internal Revenue Service will continue to offer all the assistance
and other services now provided to taxpayers with questions or
problems. In fact, the new system should permit the Service
to devote more time to direct, personal contacts. The over-all
effect will be improved and more rapid service to taxpayers in all
their dealings with the Government.
I am pleased that you could join us on this important occasion.
0O0
&s thein
ADP
system
becomes
fully
in the years
ahead,turningI am
confident
point
public
that
we
tax
will
administration.
look
backoperative
on this occasion
as a major

O rs

/O

(Nov V

v *1 U I

FOR IMMEDIATE RELEASE
TREASURY DECISION ON AMMONIUM SULFATE
UNDER THE ANTIDUMPING ACT

The Treasury Department has determined that ammonium
sulfate from West Germany 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.
The dollar value of imports of the involved merchandise received during the first six months of 1961 was
approximately $2^8,000.

£

S „ l _ '^J

fVo v

"i-

^ H i

FOR IMMEDIATE RELEASE
TREASURY DECISION ON AMMONIUM SULFATE
UNDER THE ANTIDUMPING ACT

The Treasury Department has determined that ammonium
sulfate from Belgium is not being, nor likely to be,
n
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 the first 6 months of 1961 was;

TREASURY DEPARTMENT
WASHINGTON, D.C.
November 2, 1961
FOR IMMEDIATE RELEASE

TREASURY DECISION ON AMMONIUM SULFATE
UNDER THE ANTIDUMPING ACT

The Treasury Department has determined that ammonium
sulfate from Belgium and West Germany, 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.
The dollar value of imports of the involved merchandise
received during the first 6 months of 1961 w/as.:
Belgium

Apprxoimately $127,000

West Germany

Approximately $258,000

0O0

TREASURY DEPARTMENT

231

WASHINGTON, D.C.
November 2, 196l

FOR IMMEDIATE RELEASE

The United States Tariff Commission has determined that
an industry in the United States is being injured by reason
of the importation of portland gray cement from Portugal.
Accordingly, the Treasury Department is issuing a finding of
dumping with respect to this merchandise imported from
Portugal. Treasury Decision 55501 to this effect is being
published in the Federal Register and in a weekly issue of
Treasury Decisions.
There were no importations of portland gray cement
received from Portugal during the first six months of 1961.

£l <w' t—

TREASURY DEPARTMENT
WASHINGTON, D.C.
November 2, 1961

FOR IMMEDIATE RELEASE

The United States Tariff Commission has determined that
an industry in the United States is being injured by reason
of the importation of portland gray cement from Portugal.
Accordingly, the Treasury Department is issuing a finding of
dumping with respect to this merchandise imported from
Portugal. Treasury Decision 55501 to this effect is being
published in the Federal Register and in a weekly issue of
Treasury Decisions.
There were no importations of portland gray cement
received from Portugal during the first six months of I96I.

TREASURY DEPARTMENT
WASHINGTON. D.C.

November 2, 1961
IMMEDIATE RELEASE
TREASURY TO REFUND $7 BILLION OF 2-1/2$ TREASURY BONDS
MATURING NOVEMBER 15, 1961, AND TO RAISE $800 MILLION
IN CASH
The Treasury is offering holders of $6,963 million of 2-l/2$ Treasury
Bonds of 1961, which mature November 15, 196l, and which were originally
issued on February 15, 1954, the right to exchange them for any of the
following securities:
A 3-1/4$ note dated November 15, 1961, due February 15,
1963, at par, or
An additional amount of 3-3/4$ Treasury Bonds of 1966,
originally issued November 15, I960, maturing May 15,
1966, in the amount of $1,213 million, at 99*75, with
interest from November 15, 1961, to yield about 3«8l$, or
An additional amount of 3-7/8$ Bonds of 1974, originally
issued on December 2. 1957, maturing November 15, 1974,
in the amount of $65^ million, at 99*00, with interest
from November 15, 1961, to yield about 3.97$»
Cash subscriptions for the securities listed above will not be
received.
The subscription books will be open only on November 6 through
November 9 for the receipt of subscriptions. Subscriptions for any issue
addressed to a Federal Reserve Bank or Branch, or to the Office of the
Treasurer of the United States, and placed in the mail before midnight
November 9, will be considered as timely. The securities will be delivered
November 15, 196l and will be made available in registered form, as well
as bearer form.
Interest on the new 3-1/4$ 15-month Treasury note will be paid on
February 15 and August 15, 1962, and February 15, 1963* Interest on the
3-3/4$ Treasury Bonds of 1966, and the 3-7/8$ Treasury Bonds of 1974 is
payable semiannually on May 15 and November 15*
Exchanges of the 2-1/2$ Treasury Bonds maturing November 15, 1961 may
be made for a like face amount of the securities included in this exchange
offering. Coupons dated November 15, 1961 on the maturing 2-1/2$ Treasury
Bonds exchanged for the new issues should be detached by holders and cashed
when due. Interest on the securities issued in exchange will be payable
from November 15, 1961.
D-284

- 2 Holders of the 2-1/2$ Treasury Bonds maturing November 15, 1961, who
exchange them for the 3-3/4$ Treasury Bonds of 1966 will be paid the amount
of $2.50 per $1,000, representing the discount on the new securities, and
holders of the 2-1/2$ Bonds who exchange them for the 3-7/8$ Bonds of
1974 will be paid $10 per thousand, representing the discount on such bonds.
TREASURY BILLS — In addition to the exchange privilege open to the
holders of the maturing 2-1/2$ Treasury Bonds of 1961, the Treasury will
also receive tenders on Thursday, November 9, for approximately $800 million
of a "strip** of additional amounts of eight series of outstanding Treasury
bills maturing weekly from December 7, 1961 to January 25, 1962, inclusive.
The additional amount of each weekly series will be $100 million. These
additional Treasury bills will be issued on November 15, 196l and payment
for them must be made in cash or other immediately available funds on that
date* Payment for such bills by credit in Treasury Tax and Loan Accounts
w i H not be permitted.
Full details concerning these Treasury bills are contained in the
Treasury's announcement inviting tenders for such bills which is being
released today.
0 -

Estimated Ownership of November 15, 1961 Bond*
(in millions of dollars)
Commercial banks

$3,425

Mutual savings banks ••••••••••• •••. 113
Insurance companies
Life
Fire, casualty and marine..•

•

56
245

Total, insurance companies** •••••• •••(»••••• 301
Corporate pension funds «••••••••• 75
Corporations •••• * 1,375
Savings & loan associations * 100
State and local funds.••••• •*••«••••• 290
All other private investors * •••••••• 1,215
Total, privately held 6,894
Federal Reserve banks and
Government Investment Accounts

••«•••••

69

Total outstanding.••••••••••• • $6,963
Office of the Secretary of the Treasury November 2, 1961

* All privately held data is based on the September 30,
196l Treasury Survey of Ownership. Federal Reserve
banks and Government Investment Accounts holdings are
as of October 31, I96I.

TREASURY DEPARTMENT
WASHINGTON, D.C.
November 2, 1961
FOR IMMEDIATE RELEASE
TREASURY OFFERS $800,000,000 STRIP OF WEEKLY BTT.T.q
The Treasury Department, by this public notice, invites tenders for additional amounts of eight series of Treasury bills to an aggregate amount of
$800,000,000, or thereabouts, for cash. The additional bills will be issued
November 15, 1961, will be in the amounts, and will be in addition to the bills
originally issued and maturing, as follows:
Amount
Amount of
Original
Days from
Outstanding
Additional
Issue Dates
Maturity
Nov, 15, 1961
(in millions)
Issue
1961
Dates
Nov. 2, 1961
to Maturity
$100,000,000
June 8
December 7, 1961
22
$1,609
June 15
100,000,000
December 14, 1961
29
1,601
100,000,000
June 23
December 21, 1961
36
1,601
June 29
100,000,000
December 28, 1961
43
1,600
100,000,000
July 6
January 4, 1962
50
1,600
100,000,000
July 13
January 11, 1962
1,601
57
100,000,000
July 20
January 18, 1962
1,600
64
100,000,000
July 27
January 25, 1962
1,601
71
$800,000,000
The additional and original bills will be freely interchangeable.
Each tender submitted must be in the amount of $8,000, or an. even multiple
thereof, and the amount tendered will be applied to each of the above series of
bills on the basis of the ratio of each series to the total of all series. (For
example, an accepted tender for $40,000 will be applied $5,000 to the issue with
original date of June 8, 1961, and $5,000 to each of the additional weekly issues
through the issue with original date of July 27, 1961.)
The bills offered hereunder will be issued on a discount basis under competitive and noncompetitive bidding as hereinafter provided, and at maturity
their face amount will be payable without interest. They will be issued in bearer
form only, and in denominations of $1,000, $5,000, $10,000, $100,000, $500,000
and $1,000,000 (maturity value).
Tenders will be received at Federal Reserve Banks and Branches up to the
closing hour, one-thirty o'clock p.m., Eastern Standard time, November 9, 1961.
Tenders will not be received at the Treasury Department, Washington. 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.
A single price must be submitted for each unit of $8,000, or even multiple thereof.
A unit represents $1,000 face amount of each issue of bills offered hereunder, as
previously described. 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
and Branches on application therefor.

D-28S

- 2 -

Others than banking institutions will not be permitted to submit tenders
except for their own account. Tenders will be received without deposit from incorporated banks and trust companies and from responsible and recognized dealers
in investment securities. Tenders from others must be accompanied by payment of
2 percent of the face amount of Treasury bills applied for, unless the tenders
are accompanied by an express guaranty of payment by an incorporated bank or
trust company.
Immediately after the closing hour, tenders will be opened at the Federal
Reserve Banks and Branches, following which public announcement will be made by
the Treasury Department of the amount and price range of accepted bids. Those
submitting tenders will be advised of the acceptance or rejection thereof. The
Secretary of the Treasury expressly reserves the right to accept or reject any
or all tenders, in whole or in part, and his action in any such respect shall be
final. Noncompetitive tenders for $80,000 or less (in even multiples of $8,000)
without stated price from any one bidder will be accepted in full at the average
price (in three decimals) of accepted competitive bids, provided, however, that
if the total of noncompetitive tenders exceeds $400,000,000, the Secretary of th<
Treasury reserves the right to allot less than the amount applied for on a
straight percentage basis with adjustments where necessary to the next higher
multiple of $8,000. Settlement for accepted tenders in accordance with the bids
must be made or completed at the Federal Reserve Bank in cash or other immediate]
available funds on November 15, 1961.
The income derived from Treasury bills, whether interest or gain from the
sale or other disposition of the bills, does not have any exemption, as such,
and loss from the sale or other disposition of Treasury bills does not have any
special treatment, as such, under the Internal Revenue Code of 1954. The bills
are subject to estate, inheritance, gift or other excise taxes, whether Federal
or State, but are exempt from all taxation now or hereafter imposed on the
principal or interest thereof by any State, or any of the possessions of the
United States, or by any local taxing authority. For purposes of taxation the
amount of discount at which Treasury bills are originally sold by the United
States is considered to be interest. Under Sections 454 (b) and 1221 (5) of the
Internal Revenue Code of 1954 the amount of discount at which bills issued hereunder are sold is not considered to accrue until such bills are sold, redeemed
or otherwise disposed of, and such bills are excluded from consideration as
capital assets. Accordingly, the owner of Treasury bills (other than life insurance companies) issued hereunder need include in his income tax return only
the difference between the price paid for such bills, whether on original issue
or on subsequent purchase, and the amount actually received either upon sale or
redemption at maturity during the taxable year for which the return is made, as
ordinary gain or loss.
Treasury Department Circular No. 418, Revised, and this notice, prescribe
the terms of the Treasury bills and govern the conditions of their issue. Copies
of the circular may be obtained from any Federal Reserve Bank or Branch.

0 -

~ 2 and the affection of those he regulates* this Is a rich measure of
both personal and professional aeceapXisliiaent.tt
Hr* didney is the eighteenth treasury official to receive th®
Aieaiander Hamilton ftsdal, wfcieh is of gold and bears a bas-relief
portrait of Hamilton, the first Secretary of the treasury* on one
side and the treasury seal on the other. A certificate signed by
the Secretary of the Treasury accompanies the award.
Mr* Sidney's resignation as Controller of the Currency is
effective November 15th.

oOo

B-

9QQ
SL "w v->

DRAFT ~~ 11-2-61 November 3* 19ol
FOE IIMDIATE IUBASB
RAT M. OXDNI?,

coiopTfiQii&H! at TM mwmm,
HEOTOTS Mmummn

mmmm m$m

Controller of the Currency Bay Ho aidnay today received ills
Alexander Hamilton Hsdal« the Treasury's highest award. This Asraitf
Is given for outstanding and distinguished leadership in the
treasury department*
Secretary Dillon made the presentation at a ceremony in the
Treasury building, fhose attending included dovemraent officials,
banking associates, and friends of Hr. Oldney.
Secretary 0111on said in making the presentations
n

I consider it an honor and a privilege to confer upon

Bay Gldney the Treasuryfs highest award — the Alexander Hamilton
Gold Hsdal.
*my Oldney's service has been marked by great ability and by
a strong devotion to his responsibilities. His knowledge of banklBS

is profound, and he is held In hlgtr"esteem by the banking cosBaunity*
As a regulatory official, Ray Gldney has earned both the respect

TREASURY DEPARTMENT
WASHINGTON, D.C.
November 3> 19^1
FOR IMMEDIATE RELEASE
RAY M. GIDNEY, COMPTROLLER OF THE CURRENCY,
RECEIVES ALEXANDER HAMILTON AWARD
Comptroller of the Currency Ray M. Gidney today received the
Alexander Hamilton Medal, the Treasury1s highest award. This
Award is given for outstanding and distinguished leadership in the
Treasury Department.
Secretary Dillon made the presentation at a ceremony in the
Treasury building. Those attending included Government officials,
banking associates, and friends of Mr. Gidney.
Secretary Dillon said in making the presentation:
"I consider it an honor and a privilege to confer upon
Ray Gidney the Treasury's highest award — the Alexander Hamilton
Gold Medal.
"Ray Gidney's service has been marked by great ability and
by a strong devotion to his responsibilities. His knowledge of
banking is profound, and he is held in the highest esteem by the
banking community. As a regulatory official, Ray Gidney has
earned both the respect and the affection of those he regulates.
This is. a rich measure of both personal and professional
accomplishment."
Mr. Gidney is the eighteenth Treasury official to receive
the Alexander Hamilton Medal, which is of gold and bears a
bas-relief portrait of Hamilton, the first Secretary of the
Treasury, on one side and the Treasury seal on the other. A
certificate signed by the Secretary of the Treasury accompanies
the award.
Mr. Gidney's resignation as Comptroller of the Currency is
effective November 15th.

oOo
D-286

TREASURY DEPARTMENT
WASHINGTON, D.C.
November 3> 19^1
FOR IMMEDIATE RELEASE
»>

RAY M. GIDNEY, COMPTROLLER OF THE CURRENCY,
RECEIVES ALEXANDER HAMILTON AWARD
Comptroller of the Currency Ray M. Gidney today received the
Alexander Hamilton Medal, the Treasury's highest award. This
Award is given for outstanding and distinguished leadership in the
Treasury Department.
Secretary Dillon made the presentation at a ceremony in the
Treasury building. Those attending included Government officials,
banking associates, and friends of Mr. Gidney.
Secretary Dillon said in making the presentation:
"I consider it an honor and a privilege to confer upon
Ray Gidney the Treasury's highest award — the Alexander Hamilton
Gold Medal.
"Ray Gidney's service has been marked by great ability and
by a strong devotion to his responsibilities. His knowledge of
banking is profound, and he is held in the highest esteem by the
banking community. As a regulatory official, Ray Gidney has
earned both the respect and the affection of those he regulates.
This is a rich measure of both personal and professional
accomplishment."
Mr. Gidney is the eighteenth Treasury official to receive
the Alexander Hamilton Medal, which is of gold and bears a
bas-relief portrait of Hamilton, the first Secretary of the
Treasury, on one side and the Treasury seal on the other. A
certificate signed by the Secretary of the Treasury accompanies
the award.
Mr. Gidney!s resignation as Comptroller of the Currency is
effective November 15th,

0O0

D-286

241
&9xm

ft* SUJUUB A* If. KIWllMBtt,

*s*aut8 OF misotrs m i BELL omna»
the Tsraatwy Department annotsnced last evening that the tenders far two aerlea of
Treasury M H a f one strifes to i:.9 aa additional iaana of the billa dated Auguet 10f Iff
aad the other series to be dat«d lovaabar 9, 1961, which n*f« offered oa November 1,
mm
opened at tha Federal iaawva Banks on iovefflbar 6. fender* were invited far
*<
• M O M O Q j M l , or thereabouts* of m«day b i H a asd tap $500,000,000, or
iSt-day bUla. The details of the tvo aeries are aa follows:
iSf"day Traaaary billa
fl*4ay traaanry billa
Mui m mmnm

ccammflt BIDS?

ApBT©x. Sqisiv.

mgn
BOOS*

Low

^T^T

Tffi.T06
HH

t*m$y

18.7®*
¥ | peraaai of tha

of i^009s&&
of 9I~da/ billa bid for at the low price
ant af JJtHtaqr bills bid for at tiie lo* price i m
DISiaiGTS:
Affiffli#4 Fer

St
P'hiladelphie
Ole^land

n9m9m®
13»J0tfO0O
I'tJ&fOQO

Obioago
St. teH®
fli3$a$ap©lia
K a a m City
Dallas

ai f *32»cm
£6 f #ia,w
26,ft*?f#§0
3*,TO»«K>
13*ft3fO0O

)t,f& f 00O

i3#J0T9eoo
If ,122,000

l$M33»ooo

I^iu»9<)to
ma9,lSt
t 03f^oe
W
f

22^01,000
Z9t$39<m
MB0,0Q0
100,991,000
9,199,000
6,00?,000
22,811,000

Aesepted

I i,gta,W
3ffc»*M*
3,#7f909

i9m9m
$,370,000

m9m9m

22,iiS2,000
049M*
2a,fl*7,O00
3*911 fl*
3$,m»400
7,aoa,ooo
9
13,$93«O0O
tmm
«L,971fliSlif«X» H,tQO,3f5,000 y
&,l£l,3LSa,0@0
tfOOftMfMj/
6,10U,000
y Xadtadaa |22.y,2S3,O00
iceepted at the average price
af fMOf
itP*if§g
' Includes %$kt%n»Q00 aoaooispetiil**.
accepted at the average price af 9®*?®9i
Oa a coupon issue of the
„
..—' ib® aaae aaouat invested, tin retars <rf
*
ilia wmm pfovida yields of tUtf, far the 91*day billa, aad tJM9 tot $
lS2~day bills. Interest rates on bin© are quoted ia t e n s of bank discount with
the return related to tha face amount af the billa payable at maturity rather %bm
tft» amount iaveated andfcbairlaagtfe ia actual number of days related to a 3M*t
jmr* la aonlniii, yields oa eartifieatea. aotaa, aad bonda are computed is t « «
of interest oa tm mmmb
invested, and relate the number of days remainiag ia «a
l a t a m t ptawwl ^riod to the aetiial aaabar of daya in the period, nita
than one coupon period la involved.

n m*m

kn[

"}£ O

TREASURY DEPARTMENT
W A S H I N G T O N , D.C.
November 6, 1961
'OR RELEASE A. M. NEWSPAPERS,
?uesday, November 7, 196l.
RESULTS OF TREASURY'S WEEKLY BILL OFFERING

The Treasury Department announced last evening that the tenders for two series of
Preasury bills, one series to be an additional issue of the bills dated August 10, 1961,
ind the other series to be dated November 9, 196l, which were offered on November 1,
rare opened at the Federal Reserve Banks on November 6. Tenders were invited for
^1,200,000,000, or thereabouts, of 91-day bills and for $500,000,000, or thereabouts, of
L82-day bills. The details of the two series are as follows:
JANGE OF ACCEPTED
3GMFETITIVE BIDS*
High
Low
Average

91-day Treasury bills
maturing February 8, 1962
Approx. Equiv,
Price
Annual Rate
27322%
99.10.3 a/
2.366$
99.1*02 "
2.31*9$ 1/
99.1*06

182-day Treasury bills
maturing May 10, 1962
Approx. Equiv,
Price
Annual Rate
98.718
* 2.536$
98.706
2.560$
98.709
2.551*$ 1/

1/ Excepting one tender of $100,000
ft percent of the amount of 91-day bills bid for at the low price was accepted
!o percent of the amount of 182-day bills bid for at the low price was accepted
POTAL TENDERS APPLIED FOR AND ACCEPTED BY FEDERAL RESERVE DISTRICTS s

District
Applied For
Accepted
Accepted
s Applied For
$
20,156,000
Boston
i
2,526,000
:
# 32,1*16,660
?~S7?26,000
1,1*28,860,000
757,130,000 .:
New York
911*,039,000
39U,981*,000
33,1*1*5,000
18,1*1*5,000 §
Philadelphia
9,187,000
3,387,000
32,255,000
32,255,000
Cleveland
22,1*01,000
7,351,000
13,307,000
13,307,000
Richmond
2,253,000
1,919,000
19,552,000
19,122,000
Atlanta
U,580,000
1*,370,000
211,1*32,000
159,833,000
Chicago
100,991,000
1*8,385,000
26,612,000
22,1*82,000 s
St. Louis
9,199,000
8,199,000
26,91*7,000
21*, 91*7,000 3
Minneapolis
6,007,000
3,507,000
39,773,000
35,993,000 t
Kansas City
22,811,000
11,250,000
13,593,000
13,593,000 3
Dallas
7,00l*,000
6,10l*,000
93,262,000
83,132,000
s
San Francisco
50,152,000
8,270,000
$1,971,1*514,000 $1,200,395,000 b/ $1,151,150,000
$500,252,000 c/
TOTALS
/ Includes $229,283,000 noncompetitive tenders accepted at the average price of 99
/ Includes $51**879,000 noncompetitive tenders accepted at the average price of 98.709
/ On a coupon issue of the same length and for the same amount invested, the return on
these bills would provide yields of 2.1?0$, for the 91-day bills, and 2.62$, 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^
D-287

243

m long m wmzm than halt ®£ our mo$t talented hi^h school student a
do not go cm to college, arid so long m per-pupil expenditures Im the
states that sp&n& Zlm most for education ar« double those of the *tat«
that spend the lM*t.
% mset tasss n«a4s w» *mat marshal our efforts and our resource!
be th©y private, eeMNMtqr, still, or federal, m wmst stop <juarrelli
over ^sthods sad find solutionis that will give us £h« ©ducaticmal
system — s^coi3d to mem®— e±tat wn must have If we are to mmm&4 ia
the great tasks that £g@$ our Mfttlea, if we are to fulfill America's
shiaing promise, if we ar@ to be worthy #£ tha high ideals that
leapirad Alberc Gallatin throughout Ills lifstitee of service £0
rJ£$$€&loi3 <$nil 4iWR?ftifftgy,

244

compete and famyor in tfe* tmitaft n©rti #£ www.
1 ^ra^fe @dmliii kai?a imigbfc vi'ctowt paying trivet t© Albert
•aU*tl»va *tiia* tfttwast in tftiMtlMu ffcia lacmrwt was fiirgt

nianifested la 1/90 utafi he tough i: im the Pennsylvania legislature t

iiaprove the schools of Ait jpaat Cvj^iaiaoawealth. It culminated in hi

giv«m m much to the amaMity asd to the Nation.
(toast again - as in Gallatui's tirae «•*• we are engaged in a great
S&Mtfl* m Improve our adticetxonal system, I mmi not mil you of
the social icaporamce of aristst****. But I would like to stress ttf
mmmmM impmmmm* We mm atriiri*i§ tar increaaiiag productivity Ito
^^toil^i«l «MbWMHW. As «MlHMlttar ftfOJWMMft, we will nasi fc®
Sjiei^aas tft* w^ o£ « *ki3JUMl wrtars, aa wll aa $mt* 4m&m* •
akiU. Ii8i»r@w<I atasatl« will lead to lac raaa*^ productivity thxovfr
t*«tfcsir t^^l^iy, tet««r systaaw mi production, and more affiaiaa*
distribution. We cannot hop* co achieve our aaxinun potential growth

•24

problem that immi our Msttaa im Gallatin's ara U with us again

With the emergence of tfet European Coawion Market, im which Great
feitatm has aa* requested rcea&erahip, we face the probability of a new
and united trading &&*c of some 300 ffiillioa paopla. If we are to
prosper, if we are to earn the foreign exchange we must hava to j*ircha
wmmrdmM

nzetivd by our industry, we must sell our industrial

product* in Eoaropa. )Thi»)wMMi» that we aattt torn • £iz» l»sl* for

(

negotiating wicb stir 9m&»mm friend* to remove ilil ••minium I *pda*

ir
our products. .Tliat will involve authority tar the Prasidant to negott
with the coffiEion market for reclprocil, across-the-board reductions Im
industrial tariffs, with their eventual elimination as our goal. Is
will also have to devise usw techniques to preserve our agricultural
markets, aad to see tso it that our talsnis im tha developing stwWfisi
obtain markets tar ctei* mm mtmvimU and il$tfc fjMtetriat* Is
• :: •
•
.
;
r
-

••• •'•'•'• •'

* ... :

we most revolutionise our reciprocal trade lasialatiom so that wa

i'» "t w

•15and cancel out those we hope to make in the future.

-&*** Our economy la doing mil. We feel that we have the tools and c
knowladge to minimize — and perhaps to eliminate -- tha danger af
tic downturns. Govsrnment policy ia orientad to tha stimilation
recovery and to tha promotion of long-tana growth, tat tha

major stisailua ssuat ®mm» not from Govariaaant* but from tha priva

of our aaoaoray. Profits based on inflationary nrice and waga increa
that exceed productivity serve neither the public nor the priwta

interest. This is a matter jfio:'patriotism -- a aiattar for salf-s

a matter for putting as Ida iraned^ate but fliaiifoa gains in favor
long tana gM«Nii««ai--sl^lU9«\^^)lllso * **ttftr

of

««&»*»* f®^

feill However, even with stable firiooa, kigh ^rodwetivity, and am
aim campaign to promote exports, we will not succeed if wo do not
maintain w aeaaas to tha thriving markets of Suropa. teas, the ***f

24 7
-14-

dasire of our citizens for a better Ufa --as wall aa the crying net

of less pei*ila§od pmplm in developing areas of tits world who laek
the means to help themselves, and who look to us for Sid. We have
tremendous economic potential im this country. We cannot afford to

rum our economy at slow speed -- to have four to five million worke
unemployed -- and to have the human misery and economic waste that
high unesaployment represents.
Our goal ia rapid economic growth

s

accotspanied by full eiaployatat

and a stable price level. A laaj'or atumbling block in our way is t

threat of inflation posed by the wage-price spiral, that is why the
Administration holds -- and why 1 repeat bora tonight — that it la
utmost iiaportance for both management and labor to exercise self-

restraint ia price and wage increases. Impetuous action im die hops

of short-term gains could a tall our recovery at home, price our go

out of forsigi* markets, destroy the economic gains we have alrssdy
and cancel «»*

2^ Q ,
•Up—

A number of free world countries are growing faster — and in their
case, economic growth is in far better halaaee. la WWtl total
output — GNP — for the years 1953-1960, here are so*e free world
growth rates: Mexico, <6.5 percent); Austria, f{©.7>; Japan, (7.0>;
Wast Germany, (7.1); and Venezuela, (7.3). AU of thea surpaas ths
Soviet rata of 6 to 6-1/2 perceat.

•,:«... m

In terms of induatrial output* the choaen field of Soviet rulers,
the same pariod saw at least half a dosen free world eouatries exceed
the estissated 8-8.5 percent annual increase of the Soviet ©alon. fasti
ware West Germany and fosses, with 3,7 percent; Italy, with 8*9 peseta*
Brazil and Venezuela with eleven percent, and Japan with 15.3 pereent.
Both the Soviet growth rata aad the even more rmpid growth af otff
friends and allies should make us conscioua of our own rats of aaeaja^
growth and the need to increase it. That need would, exist even if t&*
Soviet union did not. It is s need that grows out of the expaadiag
desire of oar

249
-itFor example, while Soviet gains la steel production have been impress
steel utilization in the Sovist laloa is, fcy oar standards, extreaely
wasteful, this uneconomical use of steel has to be taken fjtto account
la any true comparison of steel production figures, for the Soviets
require far ©ore steel tftan we do to achieve the same and results.
Then there Is tha matter of automobiles: la 1960, we sold to oar
consumers as many cars ia an average week aa the Soviets produced ia
the entire year.
All this does not mean that the Soviet Salem is not making progr*
ia the economic field. Sat it does mean that all la far from perfect
la the Soviet economic system. Hot oaly does Sovist growth spring

+ k*>. HIP
from a bass less' thar&aalf oar own, bat it remains focused oa heavy
industry which milks the economy at the expense of Sovist agriculture
aad the Sovist consumer.
Moreover, ths Sovist 0nion has ao monopoly oa economic growth.

//

2 so

ftaa> whleh bagaa oaly two
; fultta mwnfem 1? spseeh, ar» fchruahchav hiasaelf adaitt*!
that Ms pteaats Hoi uaderasti^at^d the growth of the
tJUa fey at laost fifMI«$lti#a pmmml'"'tasftsa'-tfcta leereaaad sets'
tali ah^rt of eve*i ti*s*origi**a.l goal ay
five poreaai to the first sli

-«t ^its y^r. io mm4m ~- a* Mr.

S^W^^^WM^]MM

it* H

IPwv*VIS( ^p^^p-ss^R"Iffw^Spap^^p- ^S^^r ^Isis^S1 -w^^BPIftaffW^PHiaky wway^aWWBp ^swHSt* •' Oft *^~la spSOP. M%mmwmm*9

m* Wmm0m^m$m boast la 1MB Mat tho ioviat
wffnxm* mm&mw#w!^mi^m' W'lp^w ^BHBW- SwffiaPiE .JJPMIPW ^pM§8p4§iiw*slft 9^l^wlEiWPw%fripy49nwv w# IHNpsPwt- "wPjr • •J^s^sN* OBIPSF aiwra*

tkird *f one «M. Is wcHwter It i» a©
Soviet clsim !• totvy iafattacy •*•» wwptt* eaewfei. aaslytU.

|6

pc;i

.0.
industrial countries *£ Western Europe, and, for tha lost half of ths
mors than alas percent im Japan.
Meanwhile, the economy of tho Sovist Paion haa boon growing at a
rata of 6 to ##5 percent, While there ia ao comfort la the foot that
the Sovist growth rats during the fast decade has been almost doable
oar own, wo should not permit it to delude or to overawe as.
He are ail familiar with the constant and repetitions Soviet
boasts of "overtaking and smqsosslag* as, whxch ware recently reseated
ia ovaa mora grandiose terms }rf Chainaan Khrushchev to tits 22nd Communis t party Congress ia Moscow. I would Ilka to oommoat briefly
oa those claim?
Soviet economic planning ass bat oao overall objective: to incrs*
tha oowsr m®& prestige of the Sovist stats* Ibis slm takes complete
precedence ovor the aspirations of the Sovist people for a bsttsr M**
Take oas

9CQ
ft- W

J—

.9*
depreciation reform will also contribute to our domestic economy.
Equipment modernisation aad greater investment will add momentum to ouj
current recovery by stimulating the machine tool and allied industries
aad by providing mors jobs, And it will increase oar long-range growth
potential hy broadening oar industrial bass and hy increasing

A few fttfttos illustrate tho iinportance of domestic investaent tsj
long-term growth: the level ot\ Monies tic investment/during the 1950's
***** ^*^lP******
r

*f P ^ s a aat&oaal orodteet la the united Statei

I 3 ii Pev^coit it/ hfollfihdj *Vt//& ^vo|

S^f^y**.,

to

« / i
«.mmm,0mom mmmmm* «***

^rosjat in other major iatastrlal Wostora European countries w sad
^to#anty-oi^t/poro«mt ia Japan.
Srowtm satas — in terms of Gross national Protest — followed ths
same pattern: loss than 3.5 percent for the 6aTt^sl*eeeJ*»re't&tt
•evea percent for West Seamy, fw to six percent for jehejotiier asj«

-2^
form of am

aoaoss-t^s*feos»i toss ssosllt for iavostmaat ia asw

industrial equipsient that wo hope the Congress will approve next year,
to modernize the!
e<fuipment will put th&m once again oa am

1 basis with

industry, which has b&iisfited for

from liberal tax

aa a atimaiaa to atodaraisatiom.

will

Modern

mora competitive with goods
costs*

fbia la important

tor

abroad %

lowering oar unit

years * oar export prices

* ia

rising with a conaeauetst worsening la

oar coaspetitive poaltion. For e^eaaapie

export pricesyjroae

4/mfJ^t

1953 aad 1959, while prices of exports by.oar major
m
sat lesson —

the success of

dropped.

Aad — a most import'

, Italy\ France, aad wast

atsbiliaiJig safstt'aviso* wa® mot the rssalt of a slows* tats af wsgt
iaoroass, bat ratttsr, of a fastor rlsa la ar^bstivl^r;

25d
-7deva luatIon*
Another mows .that sboaM bslf to *9*aa ®^ anpurts if am tmaorfa

change ia INK jolisift wspmsistloa rsform. mis safon* consists of t
steps;
First* s realistic and saodemised set of depreciation schedules
for productive equipment, taking into account recent technological

m^'Um^ifmm^mmffm^m^ * ^^^ss^fe Sjp w^mnmmm'^mMw JPBMWR imfF**mmtfjm\ m&kmmmt&^m* mspwa w ^p* W*aiwst-^m^n^^mw- •^^^s^m^mm'^m.w^^mmm^ mpwm ma* «>*>*•'#* ^^Jr

percent reduction from twenty-five to fifteen years la the Internal

Revenue Serviced guidelines for the depreciation "lives*1 of equipm
utilised In the textile industry. We anticipate that these studies

will justify substantial changes for other industries when they are
completed this Winter or next Marina *

,,• mat reform, helpful timtfi It will ba, will aot of Itsslf|bs^J

sufficient;to pit American producers oa an equal footing with their
European oomaotitors. therefore* wo ara propoaiag a second step ia

OSS

the ostabllaament of a aew lias of export credit insurance, aad a
substantial improvement la the Export-Import Bank9a system of guaranti
commercial bank loans to exporter*.
Both of thase actions enlisted the support of oar banks aad insur
companies> which will make the loans aad handle the insurance through
their loaal off toss, fas Export-Import Bank will, la turn, folly
guarantee these private insurers aad lenders agaiaat the poiltieal
risks of doing business abroad. At the outset, the Export-Import Bank
will also share wi th the casualty companies the business credit risk
covered by fi&lr insurance policies. But, aa they gain experience la
this new field, It is oar asms that the insurance companies will
gradually toko over the entire business risk of individual export
credits ~- leaving to Government only the risks they cannot cover
themselves, such aa war, revolution, currency inconvertibility, or
devaluation.

S~ v.

itoa ffowytk of,o«r toroifm trade* »»*•** ^v^^r * iasvro-va, *rt a
Today — aad gals reflects our return full cycle from the long
period of oar isolated development, when ws turned inward as a nation
sad foreign a flairs were of comparatively little concern —today /
foreign trade la oass soala-of crucial imoortaaco to tao Treaaarv, for
it la the key to our international balance -of payments. u.t %'ily
mmmtimmmir jp ^w^sw^fc o mmm&& _l^B^Bwe*4s*r^pt4P(^pgi aw* w*wsi: /^s^sm;ej<waai^^(S^a' ^pp-ei* M^mm^f^f^^m^m^m^m ^w?^*-e3nav as*^ej ^^*^am

OS *m&aa^psa^pao^afc,^y a#^oas)ap apaa^ssaa 0*00 ~'afra^as*s^' osaooa jSfc.sw^osa^ a av^a»a> awsaowiw aPOaHw^psai<oa oaosaa soossaaoi* ^oas

complacent. .For we simply cannot afford continuing payments deficits.
wa mast brlaa our international balance aheet into e*ailibs*ia*. the
surest sad bast way of aoeomallablaa taia ia bv j^yM«^> our merehfts

ia oaaaot expand them ualees ws giva oar exporters equality wlta tasi*
foreign oompatitora»
two aabstaatisl moves ia this dlraotloa wars taken vo^r xsosstlyj

to retire

jp~iliirSs of tte total, ©r $7 ,!§§»§§#» was

third, or #S t S#0 f m

pay interest: oa the public debt,
was divided m

follows:

$1,420,000 for the Army, $1,100,000 for the

Sovy - and a mors $900,000 for all other
-;*•£•

Todays with Federal

8,000 times larger than la

dallatin's tine, the role of the 'Treasury has been vastly
it is once

la foreign affairs

la Gallatin's 4my% our young republic's major
largely with Europe, was the lifeblood of oar growing nation. ®m quarrels with England aad France
of the ssaa threatened oar very exiatence, aad ealalai
in war with England in 1812. As Secretary of the Treasury, Gallatin
keenly interested ia oar export lifeline and, upon leaving Washing
to serve la Paris and, later, ia London, he devoted tbs major aort sf;
of bis time sad offort to negotiating treaties that would permit taa

25 Q
calling for a ^tsaajttto* to safoirte^sadr tte fooorat oaawt^oa of
-ifta«aaa*. lis rasolatloa passed, sad he became one of tba# first asab
of vast la mow the standing Committee on Ways aad Means of the House,
one of the most powerful arms of the Congress. Finally, in 1800,
Gallatin's concept prevailed aad a law was adopted requiring the
Secretary of the Treasury to lay before Congress a detailed est lot te
of raoaipta and expenditures at the beginning of each session.
Gallatin conceived of Ms role as Secretary of the Treasury in
las broadsst terms. To him fiscal policy aad national policy wars
Inseparable. Becauae of this belief aad hia formidable talents,
Gallatin became oaa of Jefferson's closest advisors, and, with Jamas
Madison, played a major rola in formulating national policy dariag
Jefferson's Administration.
Ia this day of big budgets it i» refraahiag to road #*llatls*s
first rsfort. ^tew«iafwa^^ As for saasaaltarsa

the abuse heaped upon him by his opponents. Ha moved with unswerving
conviction through the dissension that rocked a Hatioa still la tha
throes of consolidating its independence. He was unquestionably act
oaly a groat statesman, bat a great patriot.
It ia largely to Sal latin that wa ows oar present syatsa of ap-

propriations, whereby Congress holds the Executive Broach closely ac

countable for expenditures, when GallatinJ first took national of fl
briefly, as a Senator la 1793 — there was wideepread preference for

the English system of authorising broad grants of funds, rather than

detailed appropriations. At Gallatin's initiative, tho Senate called

upon the then Secretary of the Treasury, Alexander Hamilton, to far
a detailed accounting of tho domestic aad foreign debt, aawell aa a

summary of all diabursements aad receipts since tho Treasury's ince
Although Hamilton chose to ignore this request, Gallatin persists

Two years later, aa a member of tho House, bo Introduced a resolutio
callin* for a

*

A:

foftt^^^tJ^J^
REMARKS ©F THE HONORABLE DOUGLAS DILLON,
SECRETARf OF THE TREASURY,
BEFORE THE ALBERT GALLATIN ASSOCIATES
OF MEW TORE OTIVBWIIW
%
HOTEL FIERRE, HEW TORE CITY
wEBSESBiAY, S O m i m S, 19Slt ^:30 F.M.

st^:

It is a groat pleasure to be here toaisMu

to receive.the

Gallatin Award — aad particularly this year, whoa wo eolebrate Alb
Gallatiafa tOOth Anniversary --means a vary great deal to me. Far
have been privileged to follow in Gallatin1 s foots tape, both as

to France aad as Secretary of the Treasury. He also happen to shar
a common birthplace: Geneva, mmm ^m M&mpxmsk& * ?^mm tar

, ^ These similarities, however, are merely iacidaatal to ay profo
interest in Gallatin as a truly exceptional man whoso taleata and
groat Influence oa lbs devalopmont of our young republic have not
fully appreciated.
Gallatin*s financial ability waa extraordinary. He posseaead
dedication, energy, aad uaeoamoa tenacity. He endured the frustrate

DID
of public life ia bis tumultuoua time, aad ddd his bast to ignore
' / ^ <*- d 0 Mth§ sbass

TREASURY DEPARTMENT
Washington
November 8, 1961
FOR RELEASE ON DELIVERY
REMARKS OP THE HONORABLE DOUGLAS DILLON
SECRETARY OP THE TREASURY
BEFORE THE ALBERT GALLATIN ASSOCIATES
OP NEW YORK UNIVERSITY
HOTEL PIERRE, NEW YORK CITY
WEDNESDAY, NOVEMBER 8, 1961, 6:30 P.M.
It is a great pleasure to be here tonight* To receive the
Gallatin Award — and particularly this year, when we celebrate Albert
Gallatin!s 200th Anniversary — means a very great deal to me. For I
have been privileged to follow In Gallatin's footsteps, both as envoy
to Prance and as Secretary of the Treasury. We also happen to share
a common birthplace: Geneva.
These similarities, however, are merely incidental to my profound
interest In Gallatin as a truly exceptional man whose talents and
great influence on the development of our young republic have not been
fully appreciated.
Gallatin's financial ability was extraordinary. He possessed
dedication, energy, and uncommon tenacity. He endured the frustrations
of public life in his tumultuous time, and did his best to ignore
the abuse heaped upon him by his opponents. He moved with unswerving
conviction through the dissension that rocked a Nation still in the
throes of consolidating its independence. He was unquestionably not
only a great statesman, but a great patriot.
It is largely to Gallatin that we owe our present system of
appropriations, whereby Congress holds the Executive Branch closely
accountable for expenditures. When Gallatin first took national
office — briefly, as a Senator in 1793 •— there was widespread
preference for the English system of authorizing broad grants of funds,
rather than detailed appropriations. At Gallatin's initiative, the
Senate called upon the then Secretary of the Treasury, Alexander
Hamilton, to furnish a detailed accounting of the domestic and foreign
debt, as well as a summary of all disbursements and receipts since
the Treasury's Inception.
Although Hamilton chose to Ignore this request, Gallatin persisted.
Two years later, as a member of the House, he introduced a resolution
calling for a "committee to superintend the general operation of
finance". His resolution passed, and he became one of the first
members of what Is now the standing Committee on Ways and Means of
the House, one of the most powerful arms of the Congress. Finally, in
n-pftft
of
Secretary
loOO,
receipts
Gallatin's
ofand
theexpenditures
Treasury
concept prevailed
to at
laythe
before
and
beginning
aCongress
law was
of each
adopted
a detailed
session.
requiring
estimate
the

- 2-

iw. Sa/ L .

Gallatin conceived of his role as Secretary of the Treasury in
the broadest terms. To him fiscal policy and national policy were
inseparable. Because of this belief and his formidable talents,
Gallatin became one of Jefferson's closest advisors, and, with
James Madison, played a major role In formulating national policy
during Jefferson's Administration.
In this day of big budgets it is refreshing to read Gallatin's
first report. His revenue estimate for 1802 was $10,600,000. As for
expenditures, one-third, or $3*500,000, was divided as follows:
|1,420,000 for the Army, $1,100,000 for the Navy — and a mere
$980,000 for all other government expenditures! Two-thirds of the
total, or $7*100,000, was earmarked to retire and pay interest on the
public debt.
Today, with Federal revenues some 8,000 times larger than in
Gallatin's time, the role of the Treasury has been vastly expanded,
and it is once more inextricably involved in foreign affairs.
In Gallatin's day, our young republic's major problems centered
around foreign trade. For trade, largely with Europe, was the lifeblood of our growing nation. Our quarrels with England and France
over the freedom of the seas threatened our very existence, and
culminated in war with England in 1812. As Secretary of the Treasury,
Gallatin was keenly interested in our export lifeline and, upon
leaving Washington to serve in Paris and, later, in London, he
devoted the major part of his time and effort to negotiating treaties
that would permit the free growth of our foreign trade.
Today — and this reflects our return full cycle from the long
period of our isolated development, when we turned Inward as a nation
and foreign affairs were of comparatively little concern — foreign
trade is once again of crucial Importance to the Treasury, for it is
the key to our international balance of payments.
This year, the deficit in our balance of payments will be
considerably less than in 1959 and i960. But this should not make us
complacent. For we simply cannot afford continuing payments deficits.
We must bring our international balance sheet Into equilibrium. The
surest and best way of accomplishing this is by increasing our
merchandise trade surplus — in other words, by expanding our commercial
exports. We cannot expand them unless we give our exporters equality
with their foreign competitors.
Two substantial moves in this direction were taken very recently:
the establishment of a new line of export credit insurance, and a
substantial improvement in the Export-Import Bank's system of
guaranteeing commercial bank loans to exporters.
Both of these actions enlisted the support of our banks and
insurance companies, which will make the loans and handle the insurance
through their local offices. The Export-Import Bank will, in turn,

- 3-

L. K~> w

fully guarantee these private insurers and lenders against the political
risks of doing business abroad. At the outset, the Export-Import Bank
will also share with the casualty companies the business credit risk
covered by their Insurance policies. But, as they gain experience in
this new field, it is our hope that the insurance companies will
gradually take over the entire business risk of individual export
credits — leaving to Government only the risks they cannot cover
themselves, such as war, revolution, currency inconvertibility, or
devaluation.
Another move that should help to expand our exports is an
important change in tax policy: depreciation reform. This reform
consists of two steps:
First, a realistic and modernized set of depreciation schedules
for productive equipment, taking into account recent technological
advances. Our studies in this area have already resulted In a forty
percent reduction from twenty-five to fifteen years In the Internal
Revenue Service's guidelines for the depreciation "lives" of equipment
utilized in the textile industry. We anticipate that these studies
will justify substantial changes for other industries when they are
completed this Winter or next Spring.
That reform, helpful though it will be, will not of itself
put American producers on an equal footing with their European
competitors. Therefore, we are proposing a second step In the form
of an across-the-board tax credit for investment in new industrial
equipment that we hope the Congress will approve next year.
This double incentive for American manufacturers to modernize
their equipment will put them once again on an equal basis with
European Industry, which has benefited for some time from liberal '
tax treatment as a stimulus to modernization. Modern machinery
will make our goods more competitive with goods manufactured abroad
by lowering our unit costs. This is Important because, in recent
years, our export prices for manufactured goods have been rising with
a consequent worsening in our competitive position. For example, our
export prices for manufactured products rose sixteen percent between
1953 and 1959* while prices of exports by most of our major foreign
competitors remained the same or dropped. And -- a most important
lesson — the success of Japan, Italy, France, and West Germany in
stabilizing export prices was not the result of a slower rate of wage
increase, but rather, of a faster rise in productivity.
Depreciation reform will also contribute to our domestic economy.
Equipment modernization and greater investment will add momentum to
our current recovery by stimulating the machine tool and allied
industries and by providing more jobs. And it will increase our
long-range growth potential by broadening our industrial base and by
increasing our export markets.
A few figures illustrate the importance of domestic investment to
during
long-term
thegrowth:
1950's was
theabout
levelsix
of percent
investment
of gross
In machinery
national
and
product
equipment

'? ^ A
~> «*> .' 1

- 4 in the United States, 13 percent in West Germany, 11 percent in
Holland, 9 percent in Italy, 8 percent in France, and 13 percent in
Japan.
Growth rates — in terms of Gross National Product — followed
the same pattern: less than 3.5 percent for the United States, more
than 7 percent for West Germany, 4 to 6 percent for most, other.
major industrial countries in Western Europe, and, for the last
half of the decade, more than 9 percent for Japan.
Meanwhile, the economy of the Soviet Union has been growing at
a rate of 6 to 6.5 percent# While there is no comfort in the fact
that the Soviet growth rate during the past decade has been almost
double our own, we should not permit it to delude or to overawe us.
We are all familiar with the constant and repetitious Soviet
boasts of "overtaking and surpassing" us, which were recently restated
in even more grandiose terms by Chairman Khrushchev to the 22nd
Communist party Congress in Moscow. I would like to comment briefly
on those claims:
Soviet economic planning has but one over-all objective: to
increase the power and prestige of the Soviet state. This aim takes
complete precedence over the aspirations of the Soviet people for a
better life.
Take one important example — housing — and see how it has
developed during the current Seven-Year Plan, which began only two
years ago: In his October 17 speech, Mr. Khrushchev himself admitted
that his planners had underestimated the growth of the urban
population by at least fifteen million persons. Despite this
increased need,however-, housing construction fell short of even the
original goal by eighteen percent last year, and by twenty-five
percent in the first nine months of this year. No wonder — as
Mr. Khrushchev said in the same speech — "the housing problem remains
very acute."
Soviet agriculture also has regularly fallen short of Its goals.
Mr. Khrushchev's boast in 1957 that the Soviet Union would surpass
the United States in the per capita production of meat by 1961 has not
been fulfilled, and Soviet meat production is still only one-third
of our own. No wonder it is no longer mentioned In Moscow.
Soviet claims in heavy industry also require careful analysis.
For example, while Soviet gains in steel production have been
impressive, steel utilization in the Soviet Union is, by our standards,
extremely wasteful. This uneconomical use of steel has to be taken
Into account in any true comparison of steel production figures, for
the Soviets require far more steel than we do to achieve the same
end results.

r* rs r™

Then there is the matter of automobiles: In I960, we sold to our
consumers as many cars in an average week as the Soviets produced in
the entire year.
All this does not mean that the Soviet Union is not making progress
in the economic field. But It does mean that all Is far from perfect
in the Soviet economic system. Not only does Soviet growth spring
from a base less than half our own, but it remains focused on heavy
industry, which milks the economy at the expense of Soviet agriculture
and the Soviet consumer.
Moreover, the Soviet Union has no monopoly on economic growth.
A number of free world countries are growing faster — and In their
case, economic growth is in far better balance. In terms of total
output — GNP -*- for the years 1953-1960, here are some free world
growth rates; Mexico, 6.5 percent; Austria, 6.7; Japan, 7.0;
West Germany, 7.1; and Venezuela, 7.3. All of them surpass the
Soviet rate of 6 to 6-1/2 percent.
In terms of industrial output, the chosen field of Soviet rulers,
the same period saw at least half a dozen free world countries exceed
the estimated 8-8.5 percent annual increase of the Soviet Union.
These were West Germany and Greece, with 8.7 percent; Italy, with
8.9 percent; Brazil and Venezuela with 11 percent, and Japan with
15.3 percent.
Both the Soviet growth rate and the even more rapid growth of our
friends and allies should make us conscious of our own rate of
economic growth and the need to increase It. That need would exist
even if the Soviet Union did not. It is a need that grows out of the
expanding desire of our citizens for a better life — as well as the
crying needs of less privileged peoples in developing areas of the
world who lack the means to help themselves, and who look to us for
aid. We have tremendous economic potential in this country. We
cannot afford to run our economy at slow speed -».- to have four to
five million workers unemployed «— and to have the human misery and
economic waste that such high unemployment represents.
Our goal is rapid economic growth, accompanied by full employment
and a stable price level. A major stumbling block in our way is the
threat of Inflation posed by the wage^-price spiral. That is why the
Administration holds — and why I repeat here tonight •-- that It is
of utmost Importance for both management and labor to exercise selfrestraint in price and wage increases. Impetuous action in the hope
of short-term gains could stall our recovery at home, price our goods
out of foreign markets; destroy the economic gains we have already
made, and cancel out those we hope to make In the future.
Our economy is doing well. We feel that we have the tools and
the knowledge to minimize -- and perhaps to eliminate — the danger
of drastic downturns. Government policy is oriented to the
But
stimulation
the major
of stimulus
sound recovery
must come,
and not
to the
from
promotion
Government,
of long-term
but from the
growth.

-6-

:^SC

private sector of our economy. Profits based on inflationary price
and wage increases that exceed productivity serve neither the public
nor the private interest. This is a matter of patriotism — a
matter of self-sacrifice — and also a matter of eminent good sense.
It calls for putting aside immediate but phantom gains in favor of
solid long term growth and stability.
However, even with stable prices, high productivity, and an
aggressive campaign to promote exports, we will not succeed if we
do not maintain our access to the thriving markets of Europe. Thus,
the very same problem that faced our Nation in Gallatin's era is
with us again today.
With the emergence of the European Common Market, in which
Great Britain has now requested membership, we face the probability
of a new and united trading unit of some 300 million people. If we
are to prosper, if we are to earn the foreign exchange we must have
to purchase raw materials needed by our industry, we must sell our
industrial products in Europe. That means that we must have a firm
basis for negotiating with our European friends to remove tariff
barriers against our products. It will involve authority for the
President to negotiate with the Common Market for reciprocal, across-the
board reductions In industrial tariffs, with their eventual elimination
as our goal. We will also have to devise new techniques to preserve
our agricultural markets, and to see to it that our friends in the
developing countries obtain markets for their raw materials and
light industries. In essence, we must revolutionize our reciprocal
trade legislation so that we can compete and prosper in the trading
world of tomorrow.
I cannot conclude here tonight without paying tribute to
Albert Gallatin's abiding interest in education. This interest was
first manifested in 1790 when he fought in the Pennsylvania
legislature to improve the schools of that great Commonwealth. It
culminated in his great contribution to the founding of New York
University, which has given so much to the community and to the Nation.
Once again — as in Gallatin's time —• we are engaged in a great
struggle to Improve our educational system. I need not tell you of
the social importance of education. But I would like to stress its
economic importance. We are striving for increasing productivity
through technological advances. As technology progresses, we will
need to increase the number of our skilled workers, as well as their
degrees of skill. Improved education will lead to increased
productivity through better technology, better systems of production,
and more efficient distribution. We cannot hope to achieve our
maximum potential growth so long as more than half of our most
talented high school students do not go on to college, and so long as
per-pupil expenditures in the states that spend the most for education
are double those of the states that spend the least.

To meet these needs we must marshal our efforts and our
resources — be they private, community, state, or federal. We must
stop quarrelling over methods and find solutions that will give us
the educational system — second to none — that we must have if we
are to succeed in the great tasks that face our Nation, if we are to
fulfill America's shining promise, if we are to be worthy of the
high ideals that inspired Albert Gallatin throughout his lifetime of
service to freedom and democracy.

0O0

QQQ
- 3 BEm3DMBXmBX
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 t§x 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.

- 29C0
ggWKtia^fitaiMs^at

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 August 17, 1961 , ( 91 days remaining until maturity date on
February 15, 1962 ) 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 r

tive issues. Settlement for accepted tenders in accordance with the bids must be
made or completed at the Federal Reserve Bank on November 16, 1961 , in cash or

other immediately available funds or in a like face amount of Treasury bills mat
ing November 16, 1961 Cash and exchange tenders will receive equal treatment.
$030
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 aaar exemption,* as such, and

/i i

«m$imttmm3&Mm
TREASURY DEPARTMENT
Washington
FOR IMMEDIATE RELEASE

November 8, 1961

aaaSXKXBDQC

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>
cash and in exchange for Treasury bills maturing
of

November 16, 1961, in the amount

$ 1.701,665.000 y as follows:
91 -day bills (to maturity date) to be issued

TScF

November 16, 1961

>

iS5

in the amount of $ 1,100,000,000 , or thereabouts, representing an additional amount of bills dated August 17. 1961 y
and to mature

February 15. 1962

y originally issued in the

amount of $ 600.027.000 y the additional and original bills
to be freely interchangeable.
82 -day bills, for $ 600,000.000 , or thereabouts, to be dated
November 16, 1961 , and to mature

px5c

May 17, 1962

.

pijr

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

hour, one-thirty o'clock p.m., Eastern Standard time, Monday, November 15, 196

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.
November 8, 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 November 16, 196l,in the amount of
$1,701,665,000, as follows:
91-day bills (to maturity date) to be issued November 16, 1961,
in the amount of $1,100,000,000, or thereabouts, representing an
additional amount of bills dated August 17, 196l, and to
mature February 15, 1962originally issued in the amount of
$600,027,000, the additional and original bills to be freely
interchangeable.
182-day bills, for $ 600,000,000, 0r thereabouts, to be dated
November lo, 196l,and to mature May 17, 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 Standard
time, Monday, November 13, 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
D-289
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
i tenders for $ 200,000 or less for the additional bills dated
August 17,196l,
(91-days remaining until maturity date on
February 15, 1962) 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 November 16, 1961,
in cash or other immediately available funds or in a like face
amount of Treasury bills maturing November 16,1961.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,r as such, and loss from the sale or other disposition
of Treasury bills does not have any special treatment, as such,
under the Internal Revenue Code of 1954. The bills are subject to
estate, inheritance, gift or other excise taxes, whether Federal or
State, but are exempt from all taxation now or hereafter imposed on
the principal or interest thereof by any State, or any of the
possessions of the United States, or by any local taxing authority.
For purposes of taxation the amount of discount at which Treasury
bills are originally sold by the United States is considered to be
interest. Under Sections 454 (b) and 1221 (5) of the Internal
Revenue Code of 1954 the amount of discount at which bills issued
hereunder are sold is not considered to accrue until such bills are
sold, redeemed or otherwise disposed of, and such bills are excluded
from consideration as capital assets. Accordingly, the owner of
Treasury bills (other than life insurance companies) issued hereunder
need include in his income tax return only the difference between
the price paid for such bills, whether on original issue or on
subsequent purchase, and the amount actually received either upon
sale or redemption at maturity during the taxable year for which the
return is made, as ordinary gain or loss.
Treasury Department Circular No. 4l8, Revised, and this notice,
prescribe the terms of the Treasury bills and govern the conditions
0O0 may be obtained from any
of their issue. Copies of the circular
Federal Reserve Bank or Branch.

-2-

?79
COTTON WASTES
(In pounds)
1
COTTON CARD STRIPS made from cotton having A staple of less than 1-3/16 inches in
f^^»J^}BEiR
WASTE, LAP WASTE, SLIVER WASTE, AND ROVING WASTE, WHETHER OR NOT MANUFACTURED OR OTHERWISE
ADVANCED IN VALUE: Provided, however, that not more than 33-1/3 percent of the quotas shall
be filled by cotton wastes other than comber wastes made from cottons of 1-3/16 inches or more
in staple- length in the- case of the following countries; United Kingdom, France, Netherlands,
Switzerland* Belgium, Germany, and Italya

Country of Origin

Established
TOTAL QUOTA

Total Imports
Sept. 20, 1961, to
Nov. 6, 1961

1,441,152

1,307,960

75,807

75,807

22,747
14,796
12,853

22,747
12,505

34,462

25,443
7.088

23,484

2,007,252

1,599,886

1,442,503

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
EgTPt
• • •
f A35.
Cuba
6,544
Germany . . . . • • • • •
76,329
Italy
•
21,26?

1,372,900
239,690
75,807
69,627
22,747
42,019

5,482,509
y

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

Established s
Imports
33-l/3£ of 5 Sept. 20, 1961,
Total Quota t to Nov. 6. 1961

150,000

V

TREASURY DEPARTMENT
Washington, D. C.
IMMEDIATE RELEASE

D-290

THURSDAY, NOVEIVrBER 9, 196l

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, 1961 - November 6, 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"J5,12k
5,203

237
9,333

Imports

779,456
_
.
-

8,883,259
618,723
«.
-

Established Quota

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

l/ Other than Barbados, Bermuda, Jamaica, Trinidad, and Tobago,
2/ Other than Gold Coast and Nigeria.
3/ Other than Algeria, Tunisia, and Madagascar.
Cotton 1-1/8" or more
Imports August 1, 1961 - November 6. 1961
Established Quota (Global) - 45,656,420 Lbs.
Staple Length Allocation Imports
1-3/8" or more
39,590,778
1-5/32" or more and under
1-3/8" (Tanguis)
1,500,000
1-1/8" or more and voider
1-3/8"
4,565,642

39,590,778
461,020
4,565,642

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

Imports
-

-

-

TREASURY DEPARTMENT
Washington, D. C.

n 7 .3
&- i .

IMMEDIATE RELEASE

D-290

THURSDAY, NOVEMBER 9, 19&1

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, 1951 - November 6, 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

Honduras
779,456

8,883,259
618,723

475,124
5,203
237
9,333

Country of Origin

Established Quota

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 - November 6. 1961
Established Quota (Global) - 4^,656,420 Lbs.
Staple Length
1-3/8" or more
1-5/32" or more and under
1-3/8" (Tanguis)
-l-l/8" or more and under

Allocation
39,590,778

Imports
39,590,778

1,500,000

461,020

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

Imports

-

-

-

COffQH WAStES
"(S» pounds)
eOHOH CAHD STRIPS made r from, cotton hairing -a staple-of less than 1-3/16 inches ia length, COMBER
WASTE, LAP WASTE, SLIVER WASTE, AND ROVING 7^ASTE, WHETHER OR NOT MANUFACTURED OR OTHERWISE
ADVANCED IN VALUEs Provided, however, that not more than 33-1/3 percent of the quotas shall
be filled by cotton wastes other than comber wastes made from cottons of 1-3/16 inches or more
in staple- length in the- ease of the following countries! United Kingdom, France, Netherlands,
Switzerland, Belgium, Germany, and Italyt

Country of Origin

Established
TOTAL QUOTA

r
Total Imports s Established s
: Sept. 20, 1961, to i 33-1/36 of s
s Nov. 6S 1961
• Total Quota t
1,441,152

1,307,960

75,807

75,807

22,747
14,796
12,853

22,747
12,505

34,462

25,443
7.088

23,484

2,007,252

1,599,886

1,442,503

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*26X

1,372,900
239,690
75,807
69,627
22,7'47
42,019

5,482,509
y

Included In total imports, column 2,

Prepared in the Bureau of Customs. •

Imports
Sept, 20, 1961,
to Nov. 6, 1961

150,000

V

7

-2-

Period and Quantity

Commodity

5—

: Unit
Imports
: of
as of
• Quantity:Oct. 28. 1%

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

12 mos. from
Aug. 1, 1961

1,709,000

Pound

Butter substitutes, including
butter oil, containing 45%
or more butterfat.

Calendar Year

1,200,000

Pound

Quota Filled

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

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

Pound
Pound
Pound

18,578,240*
Quota Filled
551,150*

Nov. 1, 1961Jan. 31, 1962
Argentina
Paraguay
Other Countries

5,525,000
741,000
234,000

Pound
Pound
Pound

630*

Tung Oil,

* Imports through November 6, 1961.
**Imports through October 31, 1961.

476,455*

TREASURY DEPARTMENT
Washington

?7b

IMMEDIATE RELEASE

THURSDAY, NOVEMBER 9, 1961

D-291

The Bureau of Customs announced today preliminary figures showing the imports
for consumption of the commodities listed below within quota limitations from the
beginning of the quota periods to October 28, 1961, inclusive, as follows:

Commodity

Period and Quantity

: Unit
Imports
: of
as of
;Quantity:Oct. 28. 1961

Tariff-Rate Quotas:
Cream, fresh or sour ,

Calendar Year

1,500,000

Whole milk, fresh or sour,

Calendar Year

3,000,000 Gallon 128

Oct. 1, 1961Dec. 31, 1961

120,000 Head 13,758

12 mos. from
April 1, 1961

200,000 Head 30,799

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

Gallon

271

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

Calendar Year

Tuna fish.

Calendar Year 57,114,714 Pound 45,545,956

White or Irish potatoes:
Certified seed
Other

12 mos. from
Sept. 15, 1961

Walnuts,

Calendar Year 5,000,000 Pound Quota Filled

Stainless steel table flatware
(table knives, table forks,
table spoons)

Nov. 1, 1960Oct. 31, 1961

32,600,645

114,000,000
36,000,000

69,000,000

Pound

Pound
Pound

Quota Filled

450
228,098

Pieces Quota Filled

r>.Tf

TREASURY DEPARTMENT
Washington

IMMEDIATE RELEASE

THURSDAY, NOVEMBER 9, 1961

D-291

The Bureau of Customs announced today preliminary figures showing the import!
for consumption of the commodities listed below within quota limitations from the
beginning of the quota periods to October 28, 1961, inclusive, as follows:

Commodity

Period and Quantity

: Unit
; Imports
: of
;
as of
: Quantity:Oct. 28. 1961

Tariff-Rate Quotas:
Cream, fresh or sour Calendar Year 1,500,000 Gallon 271
Whole milk, fresh or sour Calendar Year 3,000,000 Gallon 128
Cattle, 700 lbs. or more each
(other than dairy cows)

Oct. 1, 1961Dec. 31, 1961

120,000

Head

13,758

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

200,000

Head

30,799

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

Calendar Year

32,600,645

Pound

Quota Filled

114,000,000
36,000,000

Pound
Pound

450
228,098

Tuna fish Calendar Year 57,114,714 Pound 45,545,956
White or Irish potatoes:
Certified seed
Other

12 mos. from
Sept. 15, 1961

Walnuts Calendar Year 5,000,000 Pound Quota Filled
Stainless steel table flatware
(table knives, table forks,
table spoons)

Nov. 1, 1960Oct. 31, 1961

69,000,000

Pieces Quota Filled

-2-

Period and Quantity

Comraodity

: Unit
Imports
: of
as of
: Quantity:Oct. 28, loj

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

12 mos. from
Aug. 1, 1961

1,709,000

Pound

Butter substitutes, including
butter o i l , containing 4 5 %
or more butterfat.

Calendar Year

1,200,000

Pound

Quota Filled

Feb. 1, 1961Oct. 3 1 , 1961
Argentina
Paraguay
Other Countries

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

Pound
Pound
Pound

18,578,240*
Quota Filled
551,150*

Nov. 1, 1961Jan. 3 1 , 1962
Argentina
Paraguay
Other Countries

5,525,000
741,000
234,000

Pound
Pound
Pound

630*

Tung Oil,

* Imports through November 6, 1961.
**Imports through October 3 1 , 1961.

476,455*

97o

TREASURY DEPARTMENT
Washington

IMMEDIATE RELEASE

THURSDAY, NOVEMBER 9, 196l

D-292

The Bureau of Customs announced today the following preliminary
figures showing the imports for consumption from January 1, 1961, to
October 28, 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
:
Imports
of
:
as of
Quantity :Oct. 28. 1961
Gross

196,202

Cigars.....,

180,000,000

Number

Coconut oil,

403,200,000

Pound

120,024,777

Cordage....,

6,000,000

Pound

4,015,562

Tobacco....,

5,850,000

Pound

5,958,105

5,782,260

n ~y n

TREASURY DEPARTMENT
Washington

IMMEDIATE RELEASE

THURSDAY, NOVEMBER 9, 1961

D-292

The Bureau of Customs announced today the following preliminary
figures showing the imports for consumption from January 1, 1961, to
October 28, 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
:
Imports
of
:
as of
Quantity :Oct. 28. 1961

Gross

196,202

Cigars

180,000,000

Number

5,782,260

Coconut oil

403,200,000

Pound

120,024,777

Cordage

6,000,000

Pound

4,015,562

looacco.............

5,850,000

Pound

5,958,105

T m O T R T DEPARTMENT
l&shington, 0. C
B&EDIATE RELEASE

D-293

THURSDAY, NOVEMBER 9, 196l
PRELIMINART DATA ON IMPORTS fOR CONSUMPTION OF UNMANUFACTUI&D LEAD AND ZINC CHARtSABLE TO THE OBOTAS ESTABLISHED
B7 PRESIDENTIAL PROCLAMATION NO. 3257 G? SEPTEMBER 22, 195*
QDARTERLT QUOTA PERIOD • October 1, 19&L - December 31, 19&
IMPORTS • Ootober 1, l?6l - November 3, 1961 (or as noted)
ITEM 392
t Lead bullion or b&ss bullion,
*s
x lead in pigs and bare, lead
x Lead-bearing ores, flue dust, t dross, reolaiaed lead, scrap
i
aad oattes
s lead, antiaoaial lead, anti%
t social scrap lead, type metal,
i
x all alloys or combinations of
•Quarterly
Quota
sQuarterly
Quota.
j
t
lead n.s.p.f.
: Dutiabla Lead
Imports x Dutiable Lead
Isporta
(Pounds)
(Pounds)

Country
of
Produotion

Australia

10,080,000

7,218,087*

23,680,000

ITEM 394

ITEM 393,

ITEM 391

t
t

t
*

• Zine-bearing ores of all kinds,s Zlno in blooks, pigs, or slabs;
* except pyrites eontaining- not : old and norn-out zlno, fit
:
oyer yfc of zlno
x only to be reaaaufaetursd, zlno
I
:
dross, and zlno skianinga
tQuarterly
Quota
: Quarterly Quota
Imports s By Weight
Imports
t Dutiable Zinc
(Pounds)'"
(Pounds)

5,881,6?3:

Belgian Congo

5,440,000

Belgium aad
Luxsaburg (total)

7,520,000 5,235,2M8*

Bolivia
Canada

5,040,000

3,531,456*

13,440,000 13,1016,000 15,920,000

66,480,000

1(W8,^5*

21,328,420

37,840,000
18,951,379
3,600,000

Italy
36,880,000

Mexiao
Peru

16,160,000

On. So. Afrioa

14,880,000 14,880,000

8,050,067

17,081,883

12,880,000 2,849,666

70,480,000

26^3Ml48

35,120,000 17,417,147

6,320,000
3,760,000

1,401,816
101,095

15,760,000 3,506,449*

Tugosloria
All other foreign
countries (total)

1,322,78!**

6,5^0,000 6,560,000

•^Imports as of N o v e m b e r 6

6,080,000 5,254,693*

17,840,000

17,84o,ooo

6,080,000

6,080,000

r\

Q

TREASURY DEPARTMENT
lashiagten, 0. 6*
XMUEDIATS BSLEASS

D-293

THQRSDAY, NOVEMBER 9, 19.6l
PRSLZMZNARY DATA OK IMPORTS FOR CONSUMPTION 0? UNMANUFACTURED LEAD AND ZINC CBARGSABLS TO THE QUOTAS ESTABLISHED
BY PRESIDENTIAL PROCLAMATION NO. 3257 07 SEPTEMBER 22, 1358
0DA8TIRLY SBOTA PERIOD « October 1, 1961 - Deoember %y 19&
•• Ootober 1, I96I •» Noreraber 3, 1961' (or as noted)

Country
of
Production

Australia

ITEM 391
ITEM 392
*
V Lead bullion or base bullion,
»
t lead in pigs and bars, lead
t Lead~bearing ores, flue dust, s dross, reclaimed lead, scrap
t
aad sattes
1 lead, anttaonlal lead, antl*
t aooial scrap lead, type aatal,
x
t all allays or eombinatlons of
:Quarterly
Quota
:Quarterly
Quota
*
*
lead n.s.p.f.
Icoorts
x Dutiabla Lead
Imports x Dutiable Lead
(Pounds)
_
(Pounds)
10,080,000

7,218,087*

23,680,000

t
t

"EM

SJ21

394

:
1

s Zine-bearing ores of all kinds,: Zlno ia blocks, pigs, or slabs;
i except pyrites containing not s old sad worn-out zlno, fit
:
ever yfc of zino
% only to be reaanufactured, sine
dross, and zino sklanlngs
t
s
:Quarterly Quota
Quarterly Quota
Inoorts
B y Weljgfct
Imports
1 Dutiable Zinc
(Pounds)
(PoundaX

5,981,693

Belgian Congo

5,440,000 • 1,322,784*

Belgium aad
Luxsaburg (total)

7,520,000 5,235,246*

Bolivia

5,040,000

Canada

13,440,000

3,531,456*
13>44o,000

15,920,000

lQf?9df^

.66,480,000

21,328,420

3,600,000

Mexieo

36,880,000

Peru

16,160,000

Oh. So. Africa

14,880,000 14,880,000

8,050,067

Tugoslorla
All other foreign
osuntries (total)

37,840,000
18,951,379

Italy
17,081,383

12,880,000 2,849,666

T0'480'000

26,334,o48

6,320,000

35,120,000

17,417,147

3,760,000

17,84O,OGO

6,080,000

l,Moi,8l6
101,095

15,76>#OOO 3,506,449*

6,50*0,000 6,560,000

•Imports as of November

6

6,080,000 5,254,693*

17,840,000

6,080,000

282
FOE mm$B
A. M* WBHtt&9
Friday, MoTrember 10, 15ft.

mmmhrnr 99 Ifft

ramrs or Qwmim or #800,000,000 STUP OF rasasorr BIH£

f be Treasury Bepartaieat aanowieed last evening that tenders for addition
of eight series of Treasury bills to aa aggregate aaonat of $800,000,000, or tfeereabo
to be Ummd Hweaber 1$, 1P61, wbleb were offered on Mormber 2$ were opened at tl»
Federal Bs*enr* Bai^s cm Movember 9* The amoiint of aceepted tenders will be equally <
vided a^cng the eigfet regular weeldy issues of outstanding freaasry billa saturiag D*
ber 7, 19ft, t© January 25, 1962, inclusive, the details ©Jf tbe offering **•* as folli
total applied for - $19$199I$M00
total accepted
8O0#l|6t0OO (inelndes |8,£81i,000 entered oa a noncoapetitiTO I
aad accepted in full at the average price shown 1

M$m OF ACCEPTED
oonrntinM BBB:
m.gh
Low

Ifrlce
99*119
99.im

approximate equivalent annual rate of discount based <
Ji6«5 days (arerage mi&ber of days to jaaturlty)
-•-•- "
2.17S%
2,323£

2.2m y
Average
99.1Q&
19 percent of tfee auosrnt bid for at tfe® low pries was accepted
TOWL f IMEBS APPLIED F0ft All ACCSFfEP BI FIME&L H8SESTK BISflECfSj
Applied For
District,..
A
Boston
603,6ii8,000
l9ttl,M»f000
lev fork
11,080,000
11,080,000
PMladelpbia
13,?llk,000
H*,S8I*#000
Cleveland
1,168,000
1,168,000
Atlanta
3,792,000
$93n,QQQ
Chicago
108,384,000
2lk*m
tm
9
St. Louis
2,18^,000
2,352,000
Minneapolis
5,680,000
11,880,000
Kansas City
2,38ii,0O0
2,384,000
Dallas
9kk9OO0
^,000
San Francisco
^,160,000
72,000,000
TOTAL
1800,136*000
®.9$l99m9WQ
coupon issue
.™.™,,J»V lAvSWwvQ.,

—MXT . www.*. w*» W S W H W W

v*MW

WVU^U. JliWTAWV tt JfMMiW «P* GaJ4.fi*

*MWW«-

rates on bills are quoted In terms of bank discount witM the retnrn related to ti»
face ataotmt of tbe bills payable at naturlty rather than the amount invested aad
tbeir length in acttial mmber of days related to a 360-day year. Ia contrast, yi*
vested,
and relate
tin nuaber
of days
interms
an Interest
psrawnt
period to t
on certificates,
notes,
aad bonds
are ranalalng
eoapnted in
of interest
on the
c o ^ S ^ S !£ & & ? * * P * ri * d ' " " * « « i « » ~ l ooavw^taiW -ore ««a «-

7 U , to ,T, U

TREASURY DEPARTMENT

'2s3

WASHINGTON, D.C.
?0R RELEASE A. M. NEWSPAPERS, November 9, 196l
Friday, November 10, 1961.
RESULTS OF OFFERING OF $800,000,000 STRIP OF TREASURY BILLS
i The Treasury Department announced last evening that tenders for additional amounts
of eight series of Treasury bills to an aggregate amount of $800,000,000, or thereabouts,
to be issued November 1$, 196l, which were offered on November 2, were opened at the
federal Reserve Banks on November 9. The amount of accepted tenders will be equally diarided among the eight regular weekly issues of outstanding Treasury bills maturing December 7, 1961, to January 2$, 1962, inclusive. The details of the offering are as follows:
{(total applied for - $l,£L9,u2U,000
{Total accepted
800,136,000 (includes $8,981|,Q00 entered on a noncompetitive basis
and accepted in full at the average price shown below
RANGE OF ACCEPTED Approximate equivalent annual rate of discount based on
COMPETITIVE BIDS?
Price
k6,$ days (average number of days to maturity)
High
99.719
2.175$
Low
99.700
2.323$
Average
99.706
2.277$ 1/
79 percent of the amount bid for at the low price was accepted
TOTAL TENDERS APPLIED FOR AND ACCEPTED BY FEDERAL RESERVE DISTRICTS..
District
Applied For
Accepted
Boston
"
$
2U,6l40,OOO
$ 7,968,000
New York
1,098,UU8,000
603,61*8,000
Philadelphia
11,080,000
11,080,000
Cleveland
lU,£8U,00Q
13,7Ui*,000
Richmond
1,168,000
1,168,000
Atlanta
2,392,000
3,792,000
Chicago
27U,552,000
108,38li,000
St. Louis
2,3*2,000
2,l8i*,000
Minneapolis
11,880,000
2,680,000
Kansas City
2,38U,000
2,38U,000
Dallas
91^,000
9UU,000
San Francisco
72,000,000
39,160,000
TOTAL
$1,£L9,U2U,000
$800,136,000
On a coupon issue of the same length as the average for the bills and for the same
amount invested, the return on these bills would provide a yield of 2.31$. 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 aJf more than one
-29Ucoupon period is involved.

TREASURY DEPARTMENT
WASHINGTON, D.C.

November 13, 196I

FOR IMMEDIATE RELEASE
PRELIMINARY RESULTS OF TREASURY'S CURRENT EXCHANGE OFFERING

Preliminary figures show that about $6,1*47 million of the
$6,963 million Treasury bonds maturing November 15 have been exchanged for the three issues included in the current exchange offering. Exchanges include about $3,589 million for the new 15-month
3-1/4 percent noteB, $2,345 million for the 3-3/4 percent bonds of
1966 (additional issue) and $513 million for the 3-7/8 percent bonds
of 1974 (additional issue). About $516 million of the bonds maturing
November 15 have not been reported as exchanged, and except for any
additional subscriptions in transit as of the close of business,
November 10, will be presented for cash redemption.
Subscriptions reported above include $4 million by Government investment accounts to the 3-3/4$ Bonds of I966, and $136 million to the
3-7/8$ Bonds of 1974.
Details by Federal Reserve Districts as to subscriptions will be
announced later this week*

D-292

par;
m* g»M.4,.M,. mmum* . I M — • m a y % Mtt^
ncaaus of Tmum*'s v n u s m e m i u m

Y-be tMMMtr ftuortHM* i w w t l last «wriag «•** -^ Umm+r* tm tn© series of
taw*
W » * ** mtim %®1mm mMMmml
l a m *r Urn bill* mm4 Smm*% 1V» ^
tad tim «*k«r mmum m Mm M®€ itemta* U§ 3961, M L * I « M *»f$*f*Ni m mm*m& @, i
«r %tamfc«ft«» *f »Ntojr »!!• «ai ftr $to%«% Wf tr tftmriM** «r aas»iiy
a »totalis«r tto tao m i m ; «rt MI M t t m t
iun or AMPI»

9f*Jft
9f*J*
bills bid for •:

tlNI

*

•r n§*tof M H - 3 '^Iwi for

torn, w a n s

JMISS

tot km umms) m wmmt

i n m nrnniast
Am>lied for

2Mr

SAjS
$%# x*jui*

at*?

tr,f*>0Q
tSf§&?#@00
MfftSf0O0

SffiS
JttJBftW

torn*
IftstMtae $fff 9 $tt*00O nom^^ttti<<ra
«

Acoented

8#i8a,000
?,3r?s,o00
t*0,£90t«0
J,^5 t 000
8,290,(XX5
^6,750,000
8,005,000
6,7t*3#000
nBuiJMiiSBat t&e

2,3?3t00&
$,290,000

%&S
2&. 100.000

9t&M

length ftf far tfea
•r «*»
tig*®® bills v^uld pmMtt jftdtto of t*$W* for the «?l~&ay Mils, and
ItlMtSf bills, I^ter^rk rat** «i MUyff mm qnoted in t m of bonk «
U
* i
f M IUnifik
i » m i to
mi «rtM&
tlte M Ummttmfii
a payable at mature
tit
n ii lmm^ N&tto*
Inmtad in
miti»
tfat&r
of liitMM* « tfet s«€^ iwesied, mA mm* Urn mmtom *t 4mm m
iii^t»®tMp^««t p^ted %• mm M M * wwN^r of did« in « » perlot, with
Ms^«nrtliif if ? « # IINHI os» o#^»« ptftoi is imrolred*

r\ fs

TREASURY DEPARTMENT
WASHINGTON, D.C.
November 13, 1961
JELEASE A. M. NEWSPAPERS, Tuesday, November ll*, 1961.
RESULTS OF TREASURY'S WEEKLY BILL OFFERING
The Treasury Department announced last evening that the tenders for two series of
tsury bills, one series to be an additional issue of the bills dated August 17, 1961,
the other series to be dated November 16, 1961, which were offered on November 8, were
led at the Federal Reserve Banks on November 13• Tenders were invited for $1,100,000,000
hereabouts, of 91-day bills and for $600,000,000, or thereabouts, of 182-day bills.
details of the two series are as follows:
E OF ACCEPTED
'ETITIVE BIDS.
High
Low
Average

91-day Treasury bills
maturing February 1$, 1962
Approx. Equiv,
Price
Annual Rate
99.372 a/
2.1*81*%
2.528$
99.361
2.5l6$ 1/
99.361;

182-day Treasury bills
maturing May 17. 1962
Approx. Equiv,
Price
Annual Rate
98.638 b/
2.691$
98.6HJ,
2.71*2$
98.62U
2.721$ y

a/ Excepting three tenders totaling $350,000j b/ Excepting two tenders totaling $200,000
6*3 percent of the amount of 91-day bills bid for at the low price was accepted
2 percent of the amount of 182-day bills bid for at the low price was accepted
LL TENDERS APPLIED FOR AND ACCEPTED BY FEDERAL RESERVE DISTRICTS:
.strict
>ston
iw York
dladelphia
.eveland
.chmond .
lanta
ticago
>• Louis
•nneapolis
insas City
Has
» Francisco
TOTALS

Applied For
Accepted
: Applied For
Accepted
$
1*7,1*53,000 I
16,981,000 : $
8,027,000 $ 7,927,000
1,571,915,000
753,1*37,000 :
869,851*, 000 1*1*0,231*, 000
29,159,000
13,852,000 s
7,373,000
2,373,000
6^,013,000
1*5,700,000 s
1*0,590,000
36,590,000
30,070,000
15,961,000 s
2,5U3,000
2,51*3,000
2l*, 701*, 000
21,75U,000 :
8,290,000
8,290,000
96,750,000
233,756,000
100,11*2,000 s
1*1*, 810,000
8,005,000
7,005,000
27,56U,000
19,96k,000 s
:
6,71*3,000
1*,
11*3, 000
28,867,000
17,997,000
:
llt,l*13,000
lit,
315,
ooo
1*7,078,000
26,71*3,000
:
5,1*75,000
5,1*75,000
22,725,000
20,022,000
26^716^000
26,300,000
96,617,000
1*7,599,000 :
$2,223,921,000
$1,100,152,000 0/ $1,096,779,000
$600,005,000 d/

ncludes $257,511,000 noncompetitive tenders accepted at the average price of 99.361*
ncludes $60,978,000 noncompetitive tenders accepted at the average price of 98.621*
J a coupon issue of the same length and for the same amount invested, the return on
these bills would provide yields of 2.57$, for the 91-day bills, and 2.80$, for the
102-day bills. Interest rates on bills are quoted in terms of bank discount with
£ne return related to the face amount of the bills payable at maturity rather than
wie 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
01 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.
!96

««= w w

- 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 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 in

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 -

00 Q
4L. 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

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 additio
bills dated August 24, 1961 , ( 91 days remaining until maturity date on
February 25, 1962 ) and noncompetitive tenders for $ 100,000 or less for the

181 -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 November 24, 1961 , in cash or

other immediately available funds or in a like face amount of Treasury bills mat
ing November 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 anv exeaaxtloik* as such, and l

TREASURY DEPARTMENT
Washington
?OR IMMEDIATE RELE^E^SOOOS^Bg November 15, 1961
W

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 November 24, 1961 , in the amount
of $1,701,049,000 , as follows:
91 -day bills (to maturity date) to be issued November ?AS 1961 y
in the amount of $1,100,000,000 , or thereabouts, representing an additional amount of bills dated August 24, 1961 ,
and to mature February 25, 1962 , originally issued in the
amount of $600,092,000

, the additional and original bills

to be freely interchangeable.
181 -day bills, for $ 600,000,000 , or thereabouts, to be dated
November 24, 1961 , and to mature May 24, 1962 •

par

nss

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 dosin
hour, one-thirty o'clock p.m., Eastern Standard time, Monday, November 20

7

1-

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

,:D - 3 f 7

November 15, 196l
FOR IMMEDIATE RELEASE
TREASURY'S WEEKLY BILL OFFERING
1

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 November 24, 1961, in the amount of
$ 1,701,049,000, as follows:
91-day bills (to maturity date) to be issued November 24, 1961,
in the amount of $1,100,000,000, or thereabouts, representing an
additional amount of bills dated August 24, 1961, and to
mature February 23, 1962, originally issued in the amount of
$ 600,092,000, the additional and original bills to be freely
int e re hange able.
l8l-day bills, for $600,000,000, or thereabouts, to be dated
November 24, 196l^.nd to mature May 24, 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 Standard
time, Monday, November 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
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-297
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
August 24, 196l, (91-days remaining until maturity date on
February 23, 1952) and noncompetitive tenders for $100,000
or less for the lbl-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 November 24, 1961,
in cash or other immediately available funds or in a like face
amount of Treasury bills maturing November 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,
prescribe
the terms
oforthe
Treasury
bills
and
thefrom
conditions
Federal
of theirReserveIssue.
Bank
Copies
of
Branch.
the circular
may
begovern
obtained
any

OFFICE OF "

1951 NQy 8

B-1

2 I?

HEMQRiiffiOH TO MR, MARTIN L. MOORE:
The following transactions were made in direct end guaranteed securities
of the government for Treasury Investaent and other accounts during the aonth
of October;
Purchases •••••..••.•••.. $50,633,000.00
Sales . 13.836.000,00
Set Purchases ......

36,797,000.00

TREASURY DEPARTMENT
WASHINGTON. D.C.
October 11, 1961

IMMEDIATE RELEASE

oartectc
TREASURY MARKET TRANSACTIONS IN gEEW8E©ETt
During -Se^&mter 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

^Q^^k^^O.

J'36,79.
0O0

<o-z?z

TREASURY DEPARTMENT
WASHINGTON, D.C.

November 15, 1961

IMMEDIATE RELEASE

TREASURY MARKET TRANSACTIONS IN OCTOBER

During October 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 $36,797,000

0O0

D-298

7Q£
Bove8$>er IS, 1061

FCB XMMEBZASB m S U B E

stxBSCBnrxan FXCOT® FOE CURHEMJ? »CM§GE <mwxm
She Xnamy SeparteBBt aftaawic«& today the insults of the current exchange
5-l/4$ notes dated Hoveiaber 15, 1961, maturing February 15, 1965,
S-3/# b o M s (addU Umm) dated love^er 35, 1360, maturing May 15, 1966, and
3~?/8^ feeds of 1074 £s$dfl is***) feted Deceaijer 2, 1957, maturing libveafcer 25, IS

open to holders of #6,965 million of 2~l/2$ bonds of 1961, mtnring Hove^ber 15, 1
fotalfltitoortpttoftsamount to $6,542 Dillon, leaving $421 Million of tbe satariag bonds
for cash redemption, laonnts exchanged mere divided among the Federal Beserve Districts
and the fee^sury as follows:
federal Heserve
Ststelct

3-i/# Botes
Series B-1965.

3-3/# Bonds
Of 1966

3*7/8^ Bonds
of 1974

Boston
fnll&ielphia
Cleveland
Mchmond
Atlanta
Chicago
St. Louis
Minneapolis
Kansas City
Dallas
San Francisco
tfreasury

$ 114,577,000
1,737,675,000
79,881,000
132,057,000
43,050,000
139,734,000
477,894,000
171,855,000
56,484,000
115,106,000
95,339,000
459,939,000
35.647,000

$ 1$4,5J2,#00
1,048,661,500
52,664,000
116,858,000
58,555,000
45,566,000
582,834,500
80,486,000
84,117,500
102,058,500
74,122,000
226,851,500
5,752,500

$ 4,454,000
430,844,500
4,840,500
3,955,000
3,162,500
1,803,000
31,574,500
5,766,500
1,976,500
8,960,000
2,531,500
16,625,500
1,076,000

Total

$3,641,676,000

$2,382,979,000

$517,368,000

Sifeaer&tiaiw reported shove inelafo $4 million by CkKvermaent SMmstmmfc accounts
to the 3-3/4$ Bonds of 1366, and $156 stltton to the 3*7/8$ Bonds of 1974.

•K.

TREASURY DEPARTMENT

295

WASHINGTON, D.C.
November 15, 1961
FOR IMMEDIATE RELEASE
SUBSCRIPTION FIGURES FOR CURRENT EXCHANGE OFFERING
The Treasury Department announced today the results of the current exchange
offering of
3-l/4$ notes dated November 15, 1961, maturing February 15, 1963,
3-3/4$ bonds (add'l issue) dated November 15, 1960, maturing May 15, 1966, and
3-7/8$ bonds of 1974 (add'l issue) dated December 2, 1957, maturing November 15, 1974,

open to holders of $6,963 million of 2-l/2$ bonds of 1961, maturing November 15, 19
Total subscriptions amount to $6,542 million, leaving $421 million of the maturing bonds
for cash redemption. Amounts exchanged -were divided among the Federal Reserve.Districts
and the Treasury as follows:
Federal Reserve 3-l/4$ Notes 3-3/4$ Bonds 3-7/8$ Bonds
District
Series E-1965
of 1966
Boston $ 114,577,000 $ 124,512,000 $ 4,454,000
New York
1,737,673,000
1,048,661,500
Philadelphia
79,881,000
52,664,000
Cleveland
132,037,000
116,858,000
Richmond
48,050,000
38,535,000
Atlanta
139,734,000
45,566,000
Chicago
477,894,000
382,834,500
3t. Louis
171,255,000
80,486,000
Minneapolis
56,484,000
84,117,500
Kansas City
113,106,000
102,038,500
Da
llas
95,339,000
74,122,000
3an Francisco
459,999,000
226,831,500
rreasury
15,647,000
5,752,500

of 1974

430,644,500
4,840,500
3,955,000
3,162,500
1,803,000
31,574,500
5,766,500
1,976,500
8,960,000
2,531,500
16,623,500
1,076,000

Total $3,641,676,000 $2,382,979,000 $517,368,000

Subscriptions reported above include $4 million by Government investment accounts
to the 3-3/4$ Bonds of 1966, and $136 million to the 3-7/8$ Bonds of 1974.

D-299

fc. w v

FOR RELEASE ON DELIVERY
REMARKS BY STANLEY S. SURREY
ASSISTANT SECRETARY OF THE TREASURY
AT THE WHITE HOUSE REGIONAL CONFERENCE
CLEVELAND, OHIO, 2:00 PM EST, WEDNESDAY,
NOVEMBER 15, 1961
Our Need for Economic Growth
Today our economy is moving strongly ahead on a broad
front. Newspaper headlines tell of new gains in personal
income, retail sales, corporate profits and employment.
Equally important, there is firm evidence that this economic
advance will continue. Business is planning increased
outlays for new production equipment. New orders reaching
manufacturers are at near record rates and still rising.
Our total output is constantly hitting new highs, and there
is every indication of increasing advance ahead.
Why then, am I here to talk to you about recovery and
economic growth? The answer is simple. I am here to tell
you what went into achieving our recovery, and what remains
to be done to assure that our economic growth continues.
And continue it must, if our nation is to meet the staggering responsibilities that it faces --at home and abroad.
Let us look first at our recent progress.

At the beginning of this year we were in the midst
of our fourth recession since the end of World War II.
Unemployment was higher than it had been in almost 20 years.
Our basic steel industry was operating at only about half
its capacity, and short work-weeks and layoffs reflected
idle plants and sagging markets in almost every other
industry.
Government acted promptly to reinforce the natural
recovery powers of our economy. The results were almost
immediately apparent. Our gross national product -- the
measure of our total national output -- rose dramatically.
From a first quarter annual rate of $501 billion it climbed
steadily to $526 billion in the third quarter and a fourth
quarter in the neighborhood of $540 billion is in sight.
Despite this excellent recovery, unemployment has
remained at unacceptably high levels. Employment last month
was the highest for any October, and unemployment dropped to
its lowest figure this year. But there are still almost
four million unemployed -- 725,000 of them out of work for
more than six months.

— W v_/

- 3When we make allowances for seasonal changes, that
leaves unemployment not far under Severn percent of our
labor force -- much too high to be tolerated. This reflects
a distressing trend which has developed during the postwar
period -- the persistence of ever higher levels of unemployment into the recovery period. Our present unemployment
level of 6.8 percent has stubbornly refused to budge for
eleven months now. We expect it to drop very soon, but
throughout this year our economy has operated with four to
five million people unemployed.
That's why we are here to talk to you today. The plain
fact is that there is only one antidote for the human hardship and economic waste reflected in the unemployment
figures -- and increase in our long-term rate of economic
growth.
That is the crux of our present problem. While our
rate of recovery has so far been excellent, we cannot
expect such a rapid pace to continue indefinitely. What is
important over the long haul, both in terms of developing
our economic strength to meet domestic and foreign obligations and in reducing unemployment, is our long-term growth
rate.

9QQ
ii~. W

w;

- 4 Despite this crucial need, we must openly face the
fact that our long-term growth rate has been lagging.
During the last part of the 1950s, for instance, it fell
well below three percent.
President Kennedy has said that a growth rate of 4-1/2
percent is well within our capability. This is what we
should aim at. It is certainly a realistic goal. Consider,
for instance, our growth compared to that of other countries.
During the fifties, when we were growing at an annual rate
of less than 3-1/2 percent, most industrial countries of
Western Europe were growing at between 4 and 6 percent, the
Soviet Union was growing at better than six percent, West
Germany better than 7 percent, and Japan, for the last half
of the decade, was doing better than 9 percent.
The cost of our lagging rate of growth is a tremendous
one in terms of the human misery represented by our high
rate of unemployment. It is also exacting a heavy cost in
terms of lost profits, dividends, sales, wages and purchasing
power. Early this year the President's Council of Economic
Advisers estimated our economy was running $50 billion below
what it is readily capable of producing.

1 f! i"l
K^ w

V

- 5 There is no question, then, that we need to increase
our growth rate, and that we are capable of doing so. The
question is, how are we going to do it?
There are a number of ways to increase our long-term
growth. We contribute to long-term growth when we provide
facilities to retrain our unemployed so they can find
productive work, when we improve the education of our
children so they are equipped to contribute more to our
society, when we improve health facilities, when we increase
the pace and scope of research, and when we accelerate the
development of our natural resources. Monetary and fiscal
policies are also important, to avoid the danger of inflation.
All these and many more factors will contribute to our
long-term growth, but one opportunity deserves special
attention -- the need to increase our productive efficiency
by modernizing our industrial machinery and equipment. Our
tax policy is intended to do just that.
Through this policy of using modernization to expand
growth we hope to make advancing technology a blessing
instead of a curse. One of our critical needs today is to
expand our exports, to eliminate the international balance

On ••»

- 6of payments deficit which yearly drains billions of dollars
from this country and depletes our gold stocks. To permit
our industry to compete more efficiently against foreign
producers, who have been modernizing more rapidly than we
have, our tax policy is designed to encourage modernization
of our productive facilities. This policy -- which we call
depreciation reform -- includes both a tax credit for investment in new equipment and revised depreciation rules to
conform with advanced in technology. As our industry
modernizes, quality will improve, unit cost will drop, and
our manufacturers will gain a larger share of export markets.
These new export markets will put idle plant capacity -- and
more important, idle workers -- back into action. At the
same time, this investment will strengthen the recovery and
contribute to our long-term growth. Certainly there is room
for expansion. As Secretary Hodges pointed out recently, at
present there are only 12,000 American firms actively engaged
in exporting, and the United States, as the World's major
industrial power, exports the lowest percentage of its
output of any industrial nation.

•^ w

&-.

- 7But there is another side to modern technology.

While

it offers the possibility of increased productivity, it
also threatens dislocations in our economic structure which
can create more unemployment and distress. Automation
eliminated nearly a million jobs last year. At the very
time automation is eliminating jobs, our labor force is
growing rapidly. We expect an increase of 26 million
workers over the next 10 years. Our problem is to take
action to see that as we advance technologically, there are
no pockets of stagnation left behind. We must cope with the
problem of structural unemployment — where workers are
idle because there is no longer demand for their skills -by creating a re-training program to teach new skills. We
must improve our educational level as a nation, to increase
the ability of new workers to adjust to future changes in
the labor market, as well as to take advantage of opportunities to better themselves and become more productive members
of society. Improved education will lead to improved research,
to better technology, to more efficient production and distribution, and to a higher national output. Minority
discrimination in the labor market is another area we must not

'?H 1
<— W

Vw»

- 8 neglect as we advance. Discrimination creates personal
misery for those who have to suffer it. It wastes skills
and potential in our labor force, and its elimination will
advance our national interest economically as well as
morally. Finally, there is the problem of our young
people. Next year a million more will drop out of school.
By 1971 more than seven million young workers will have
entered the labor market without completing high school,
and 2-1/2 million of those will not have completed grade
school. In either human or economic terms, these are not
happy figures. More rapid economic growth is a necessity
if we are to prevent the American dream of opportunity from
turning into a nightmare of despair for these young people.
These problems will be discussed in the panel on Manpower
and Automation.
In discussing recovery and growth, we must constantly
remember that the problems we face are not merely economic,
they are human problems. To emphasize this another panel
will consider Safeguards Against Human Distress. Let us
consider some of the gains made in recent months which help

o n4
^ w '"-:

- 9 to alleviate human distress, which help to ensure that
recovery and growth mean benefits for all of us:
-- temporary unemployment benefits were extended to
cover those who had exhausted their existing benefits.
-- aid was extended to cover dependent children of the
unemployed.
-- the minimum wage was increased and coverage extended
to an additional three and a half million workers.
-- new laws were passed as steps toward coping with
the problems of the migrant worker.
--a new government order bans any racial or religious
discrimination in hiring, not only in government, but also
in firms working on government contracts.
-- the Area Redevelopment Act was passed to stimulate
economic activities in distressed areas -- more than 800 of
them -- and train and retrain workers in such areas.
-- new social security legislation was passed, increasing benefits for more than 4 million persons.
-- the Housing Act of 1961 was passed, providing for
more slum clearance and urban renewal, more public housing
and more FHA mortgage insurance.

- 10 -- the Juvenile Delinquency Act of 1961 was passed,
providing $30 million over three years to prevent youth
crime and help youngsters heading for trouble to become
useful citizens.
— the Interstate Commerce Commission issued new rules
to end discrimination in bus terminals throughout the South.
Certainly there is more to be done. No one suggests
that all these problems have been solved. Certainly there
is need for greater aid to education, for a plan to help
pay for medical care fpr the aged, for permanent legislation
improving unemployment compensation, for better job opportunities for our youth, for further legislation to improve
the pathetic lot of the migrant worker. All these steps
will contribute not only to the alleviation of hardship and
distress, but also to a healthier, more productive economy,
where our human resources are utilized instead of wasted.
Another panel will deal with mobilizing local initiative,
to avoid regional unemployment and to promote growth in all
parts of our nation. While the Federal government has its
responsibilities for economic growth and development, the
fulfillment of our goals depends on what individual citizens,

O O <***'

- 11 industries, and local governments do to promote growth and
development on the community level. All the agencies of
government -- State, Federal and local -- are involved,
but the most important partner is the community itself.
The principal initiative must develop there, and government
can be of real help only to those communities which are
actively working to help themselves. The Federal Government
can merely provide "seed money" to give impetus to a broad
program in which the total of private investment is many
times the amount of the government portion. All communities both those in need of redevelopment and those with presently
sound economies -- have a large stake in planning for the
future.
Our fourth panel involves a broad survey of the economic
issues involved in recovery and growth. This panel will
consider the effect of fiscal policy on growth, the role of
tax policy, and the relation of credit and monetary policy
to domestic and international problems. Our balance of
payments problems, our economic outlook for the future, and
the possibility of inflation will also be discussed.

0 D "7

- 12 In summary, then, we are here to consider the key
issue of growth. This year we have come from recession
into strong recovery. We expect unemployment to begin
dropping very soon, and to continue to drop as that recovery
advances. We have come far, but much remains to be done if
we are to achieve our goals of full employment and more
rapid economic growth. Government cannot do the job alone.
Real progress must involve the efforts of the people themselves.
That is why we are here today -- to examine where we
have been, where we are, and to consider what still remains
undone. We have come to hear your views, to answer your
questions, and to discuss with you what steps we must take
as a nation if we are to go forward in the future and reach
the goals we have set for ourselves.

roooipHs" !»# individual^x s^P9e^9tste0P9^x is being Hall owed
d8ZK0*zmBZKa*z£x*a in an a effort to assure that all
individual holders zseszxe are aware of the exchange offerin
The 3 7/8's Treasury Bonds will constitute an
additional amount of the $2,137 million of these bonds, first
offered in June, 1960.
In tshe similar exchange offer made to holders of
Savings
maturing ^

and

G/Bonds late in 1959, 46 per cent of the F and

G Bond iMHteJd/e lee ted to make the exchange.

In 1960, 20 per cent

made the exchange.
There was a relatively higher proportion of institutic
s*1 aa

There are substantial instituational holdings of the F and G
Bonds maturing in 1962, vfa ich were originally issued in 1950, and
on which^ subscriptions of up to $1 million per holder were
accepted,,

O W *-•>

Holders of some $970 million of Series A

F and

G Savings Bonds which mature in 1962 will be offered an opportuni
to exchange them, on favorable terms, for a marketable 3 7/8 %
Treasury Bond maturing in 1968.
The exchange, third of its kind which has been
offered by the Treasury since it discontinued issuance of
new F and G bonds in /rf* ^

9

is designed to give investors

in these bonds an attractive oppprtunity to continues holding
government securities.
The 3 7/8 % Treasury Bond is expected to meet the
requirements of many F and G;Bond investors for an intermediate
term security with relatively little market risk.
The 36MX F and G Bonds will be exchanged for like aad
3 7/8!s Treasury Bond,
amounts of the aX2J^XaKaxz»2)«2^ with certain interest and other
adjustments, which will make the effective yield on the
marketable bond approximately 3.96 %m
The exchange will be made effective December 15.
Subscription books v/ill be open for all holders of the maturing
F and G Bonds from November 20 through November 24. 2K2H^
D-300A

Individual holders, however, may submit their bonds for
exchange through November 30. The addition,!

timex for

TREASURY DEPARTMENT
WASHINGTON, D.C.
November 17, 196l
FOR IMMEDIATE RELEASE
EXCHANGE OFFERING TO HOLDERS OF SERIES P AND G
SAVINGS BONDS MATURING IN 1962
Holders of some $970 million of Series F and G Savings Bonds
which mature in 1962 will be offered an opportunity to exchange
them, on favorable terms, for a marketable 3-7/8$ Treasury Bond
maturing in 1968.
The exchange, third of its kind which has been offered by the
Treasury since it discontinued issuance of new F and G bonds in
1952, is designed to give investors in these bonds an attractive
opportunity to continue holding government securities.
The 3-7/8$ Treasury Bond is expected to meet the requirements
of many F and GvBond Investors for an intermediate term security with
relatively little market risk.
The F and G Bonds will be exchanged for like amounts of the
3-7/8$: Treasury Bond, with certain interest and other adjustments,
which will make the effective yield on the marketable bond approximately 3.
The exchange will be made effective December 15. Subscription
books will be open for all holders of the maturing F and G Bonds
from November 20 through November 24. Individual holders, however,
may submit their bonds for exchange through November 30. The
additional time for individuals to make the exchange is being allowed
in an effort to assure that all individual holders are aware of the
exchange offering. The delivery date for the 3-7/8$ Bonds will be
J^aaember-2Q. 1961. „
__ _
The 3-7/8$ Treasury Bonds will constitute an additional amount >
the $2,137 million of these bonds, first offered in June, i960.
In a similar exchange offer made to holders of maturing F and G
Savings Bonds late in 1959, 46 per cent of the F and G Bond holders
elected to make the exchange. In i960, 20 per cent made the exchange
There was a relatively higher proportion of institutional holder
of the F and G Bonds maturing in i960, compared with those which
matured in 1961. There are substantial instituational holdings of th
F and G Bonds maturing in 1962, which were originally issued in 1950,
and on which subscriptions of up to $1 million per holder were accept
0O0

D-300A

TREASURY DEPARTMENT
WASHINGTON, D.C.
November 17, 196l
FOR IMMEDIATE RELEASE
EXCHANGE OFFERING TO HOLDERS OF SERIES F AND G
SAVINGS BONDS MATURING IN 1962
Holders of some $970 million of Series F and G Savings Bonds
which mature in 1962 will be offered an opportunity to exchange
them, on favorable terms, for a marketable 3-7/8$ Treasury Bond
maturing in 1968.
The exchange, third of its kind which has been offered by the
Treasury since it discontinued issuance of new F and G bonds in
1952, is designed to give investors in these bonds an attractive
opportunity to continue holding government securities.
The 3-7/8$ Treasury Bond is expected to meet the requirements
of many F and G Bond investors for an intermediate term security with
relatively little market risk.
TYM F and G Bonds will be exchanged for like amounts of the
3-7/8$ Treasury Bond, with certain interest and other adjustments,
which will make the effective yield on the marketable bond approximately 3.96$.
The exchange will be made effective December 15. Subscription
books will be open for all holders of the maturing F and G Bonds
from November 20 through November 24. Individual holders, however,
may submit their bonds for exchange through November 30. The
additional time for individuals to make the exchange is being allowed
in an effort to assure that all individual holders are aware of the
exchange offering. The delivery date for the 3-7/8$ Bonds will be
December 20, 196l.
The 3-7/8$ Treasury Bonds will constitute an additional amount of
the $2,137 million of these bonds, first offered in June, i960.
In a similar exchange offer made to holders of maturing F and G
Savings Bonds late in 1959, 46 per cent of the F and G Bond holders
elected to make the exchange. In i960, 20 per cent made the exchange.
There was a relatively higher proportion of institutional holders
of the F and G Bonds maturing in i960, compared with those which
matured in 1961. There are substantial instituational holdings of the
P and G Bonds maturing in 1962, which were originally issued in 1950,
and on which subscriptions of up to $1 million per holder were accepted.
0O0

D-300A

TREASURY DEPARTMENT
WASHINGTON, D.C.
DCMEDIATE RELEASE, Friday, November 17, 1961.
The Treasury is offering to the holders of approximately $970 million of Series F
and G Savings Bonds ISSUED in 1950, WHICH MATURE IN 1962, an opportunity to exchange
them at their face amount, with certain interest and other adjustments as of December 15,
1961, for 3-7/8$ Treasury Bonds of 1968, dated June 23, 1960, maturing May 15, 1968, to
be issued at 99.50. These 3-7/&fo Treasury Bonds will constitute an additional amount to
the $2,137 million of such bonds now outstanding. Interest is payable on the bonds on
May 15 and November 15.
The Series F and G bonds will be accepted in the exchange at amounts set forth in
the offering circular for their respective months of maturity. THESE EXCHANGE VALUES
&EE HIGHER THAN PRESENT REDEMPTION VALUES. THEY HAVE BEEN SET SO THAT HOLDERS OF SERIES
F AND G BONDS M O ELECT TO ACCEPT THIS EXCHANGE OFFER WILL RECEIVE, IN EFFECT, AN INVESTMENT YIELD OF APPROXIMATELY 1$ PER ANNUM MORE THAN WOULD OTHERWISE ACCRUE FROM DECEMBER 15;
1961, TO THE MATURITY DATES OF THEIR BONDS, AND WILL RECEIVE AN INVESTMENT YIELD OF
APPROXIMATELY 3.96$ ON THE 3-7/8$ MARKETABLE BONDS RECEIVED IN EXCHANGE FOR THE PERIOD
FROM MATURITY DATES OF THEIR SERIES F AND G BONDS TO MAY 15, 1968.
THE SUBSCRIPTION BOOKS FOR EXCHANGES OF THE SERIES F AND G SAVINGS BONDS MATURING
IN 1962 WILL BE OPEN FOR THE RECEIPT OF SUBSCRIPTIONS FROM ALL CLASSES OF SUBSCRIBERS
DURING THE PERIOD FROM NOVEMBER 20 THROUGH NOVEMBER 24, 1961, AND IN ADDITION, SUBSCRIPTIONS MAY BE SUBMITTED BY INDIVIDUALS THROUGH NOVEMBER 30, 1961. For this purpose,
individuals are defined as natural persons in their own right. Any subscription addressed
to a Federal Reserve Bank or Branch, or to the Treasurer of the United States, and placed
in the mail before midnight of the respective closing dates, accompanied by the Series F
and G bonds maturing from January 1 through. December 1, 1962, to be exchanged, together
with any cash difference necessary to make up the next higher $500 multiple (the lowest
denomination of the new bonds), will be considered timely.
The delivery date for the 3-7/8$ Treasury Bonds of 1968 will be December 20, 1961.
Hie bonds will be available in registered form, as well as bearer form. The Treasury
bonds may be registered jointly in the names of two individuals, but not in the beneficiary form as in the case of savings bonds. However, unlike savings bonds, Treasury bonds
registered jointly in two names require the signature of each owner to effect transfer or
sale.

Exchanges of Series F and G Savings Bonds maturing in 1962, will be made on the bas
of equal face amounts and will be allotted in full. Since holders of the Series F and G
bonds will receive interest on the 3-7/8$ Bonds of 1968 at the rate of 3-7/8$ from
November 15, 1961, interest adjustments will be made as follows: All subscribers will
be charged accrued interest on the 3-7/8$ Treasury Bonds from November 15, 1961, to
December 15, 1961 ($0.32 per $100), and will be credited with the discount on the issue
price of the bonds ($0.50 per $100).
The lowest denomination of the 3-7/8$ Treasury Bonds of 1968 is $500. Holders of
smaller denominations of Series F and G bonds may exchange them for the next higher
multiple of $500 upon payment of any cash difference*

D-300

"j -^ /-}

- 2The marketable 3-7/8$ Treasury Bonds of 1968 are subject to fluctuations in prices
at which they may be sold. Holders of Series F and Grbonds, except bonds registered in
the names of commercial banks in their own right (as distinguished from a representative
or fiduciary capacity) desiring a security not.subject to market fluctuations may exchange them at maturity for Series E or H bonds with interest at 3-3/4$ if held to
maturity.
Full details of this offering to holders of Series F and G bonds appear in the
official circular being released at this time, and which will be available at banking
institutions on November 20, 1961, or shortly thereafter. Holders may consult their
local banks for further information after that time.

- 0 -

UNITED STATES OF AMERICA
3-7/8 PERCENT TREASURY BONDS OF 1968
Dated June 23, 1960, with interest from December 15, 1961 Due May 15, 1968
Interest payable May 15 and November 15
ADDITIONAL ISSUE
1961 TREASURY DEPARTMENT,
Department Circular No. 1072

Office of the Secretary,
Washington, November 17, 1961.

Fiscal Service
Bureau of the Public Debt
I. OFFERING OF BONDS
1. The Secretary of the Treasury, pursuant to the authority of the Second

Liberty Bond Act, as amended, invites subscriptions, at 99.50 percent of their fa

value and accrued interest, for bonds of the United States, designated 3-7/8 perc

Treasury Bonds of 1968, in exchange for a like face amount of United States Savin

Bonds of Series F and G maturing in the calendar year 1962, which will be accepte

at exchange values as. provided in Section IV hereof. Holders of Series F and G b

aggregating less than an even multiple of $500 maturity value (the lowest denomin
i

tion of new bonds available) may exchange such bonds with payment of the difference
in cash to make up the next higher $500 multiple. Interest on the bonds will be

adjusted as of December 15, 1961, and an adjustment in favor of subscribers repre
ing the discount from the face value of the bonds will be made as provided in

Section IV hereof. The amount of the offering under this circular will be limited

to the amount of securities, together with cash adjustments, tendered in exchange

and accepted. The books will be open for the receipt of subscriptions for this is

from all classes of subscribers from November 20 through November 24, 1961, and i

addition, subscriptions may be submitted by individuals through November 50, 1961
For this purpose individuals are defined as natural persons in their own right.
Delivery of the new bonds will be made on December 20, 1961.

-2II.

DESCRIPTION OF BONDS

1. The bonds now offered will be an addition to and will form a part of the

3-7/8 percent Treasury Bonds of 1968 issued pursuant to Department Circulars No
1044, 1049 and 1064, dated June 8, 1960, August 1, 1960, and July 17, 1961,

respectively, will be freely interchangeable therewith, and are identical in al

respects therewith except that interest on the bonds to be issued under this ci

will accrue from December 15, 1961. Subject to the provision for the accrual of

interest from December 15, 1961, on the bonds now offered, the bonds are descri
in the following quotation from Department Circular No. 1044:
"1. The bonds will be dated June 23, 1960, and will bear interest
from that date at the rate of 3-7/8 percent per annum, payable on a
semiannual basis on November 15, 1960, and thereafter on May 15 and
November 15 in each year until the principal amount becomes payable.
They will mature May 15, 1968, and will not be subject to call for redemption prior to maturity.
"2. The income derived from the bonds is subject to all taxes
imposed under the Internal Revenue Code of 1954. The bonds are subject
to estate, inheritance, gift or other excise taxes, whether Federal or
State, but are exempt from all taxation now or hereafter imposed on the
principal or interest thereof by any State, or any of the possessions
of the United States, or by any local taxing authority.
"3. The bonds will be acceptable to secure deposits of public
moneys. They will not be acceptable in payment of taxes.
"4. Bearer bonds with interest coupons attached, and bonds registered as to principal and interest, will be issued in denominations of
$500, $1,000, $5,000, $10,000, $100,000 and $1,000,000. Provision will
be made for the interchange of bonds of different denominations and of
coupon and registered bonds, and for the transfer of registered bonds,
under rules and regulations prescribed by the Secretary of the Treasury.
"5. The bonds will be subject to the general regulations of the
Treasury Department, now or hereafter prescribed, govening united States
bonds•"
III. SUBSCRIPTION AND ALLOTMENT
1. Subscriptions will be received at the Federal Reserve Banks and Branches

and at the Office of the Treasurer of the United States, Washington, D. C Banfc

-3-

institutions generally, and paying agents eligible to process bonds under Treasur

Department Circular No. 888, Revised, may submit exchange subscriptions for accou
of customers, but only the Federal Reserve Banks and the Treasury Department are
authorized to act as official agencies.
2. The Secretary of the Treasury reserves the right to reject or reduce any
subscription, and to allot less than the amount of bonds applied for; and any

action he may take in these respects shall be final. Subject to these reservations
all subscriptions will be allotted in full. Allotment notices will be sent out
promptly upon allotment.
IV. PAYMENT
1. Payment for the face amount of bonds allotted'hereunder must be made on

or before December 20, 1961, or on later allotment, and may be made only in a lik

face amount of United States Savings Bonds of Series F and Series G maturing from
January 1 to December 1, 1962, inclusive, and any cash difference necessary to

malse up an even $500 multiple, which bonds and cash should accompany the subscri

tion, together with the net amount, if any, to be collected from the subscriber as

set forth in Tables 1 and 2 at the end of this circular. The Series F and G bonds

will be accepted in the exchange at amounts set forth thereunder for their respec

months of maturity. These exchange values are higher than present redemption valu

They have been set so that holders of Series F and G bonds who elect to accept th

exchange offer will receive, in effect, an investment yield approximately one percent per annum more than would otherwise accrue from December 15, 1961, to the

maturity dates of their bonds, and will receive an investment yield of approximat
3.96 percent on the 3-7/8 percent marketable bonds received in exchange for the

period from the maturity dates of their Series F and G bonds to May 15, 1968. All

scribers will he charged the interest from November 15, 1961, to December 15, 196

_. ($0.32 per $100) on the honds allotted. Other adjustments with respect to bond

-4accepted in exchange will be made as set forth in Tables 1 and 2, which also show

the net amounts to be collected from or paid to subscribers for each $100 (face
amount) of bonds accepted in exchange.
(a) Series F bonds.--The exchange values of Series F bonds, the differences
between such values and the offering price of the 3-7/8 percent bonds, the in-

terest which will accrue on the new bonds and the total amounts to be collected

from or paid to holders of Series F bonds per $100 (face amount) are as set for
in Table 1.
(b) Series G bonds.--The exchange values of Series G bonds, the differences

between such values and the offering price of the 3-7/8 percent bonds, the accr

interest to be credited on the Series G bonds, the interest which will accrue o
the new bonds and the total amounts to be collected from or paid to holders of
Series G bonds per $100 (face amount) are as set forth in Table 2.
2. Any qualified depositary will be permitted to make payment by credit in
its Treasury Tax and Loan Account for any cash payments authorized or required

be made under this circular for bonds allotted to it for itself and its custome

up to any amount for which it shall be qualified in excess of existing deposits
when so notified by the Federal Reserve Bank of its District.
3. Series F and G bonds tendered in exchange must bear appropriate requests

for payment in accordance with the provisions of Treasury Department Circular N
530, Eighth Revision, as amended, or the special endorsement provided for in
Treasury Department Circular No. 888, Revised. In any case in which bonds in

bearer form, or registered bonds in another name, are desired, requests for pay

must be supplemented by specific instructions signed by the owner who signed th

request for payment. An owner's instructions for bearer or registered bonds may

be recorded on the surrendered bonds by typing or otherwise recording on the ba

thereof, or by changing the existing request for payment form to conform to one

w JL

-5-

the two following forms:
(a) I am the owner of this bond and hereby request exchange for
3-7/8$ Treasury Bonds of 1968 in bearer form to be delivered to
(insert name and address of person to whom delivery is to be
made).
(b) I am the owner of this bond and hereby request exchange for
3-7/8$ Treasury Bonds of 1968 registered in the name of (insert
exact registration desired - see Section V hereof).
V. REGISTRATION OF BONDS
1. Treasury bonds may be registered only as authorized in Treasury Department

Circular No. 300, Revised, as supplemented. Registration in the name of one person
payable on death to another is not authorized. Registered Treasury bonds may be
transferred to a purchaser only upon proper assignment. Treasury bonds registered
in the form "A or B" may be transferred only upon assignment by or on behalf of

both, except that if one of them is deceased, an assignment by or on behalf of the

survivor will be accepted. Since Treasury bonds are not redeemable before maturity
at the option of the owners, the effects of registering them in the names of two
or more persons are important. Information concerning the effects of various

forms of registration may be obtained from any Federal Reserve Bank or Branch, the
Office of the Treasurer of the United States, Washington, D. C, or from banking
institutions generally.
VI - GENERAL PROVISIONS
1. As fiscal agents of the United States, Federal Reserve Banks are authorized and requested to receive subscriptions, to make allotments on the basis and

up to the amounts indicated by the Secretary of the Treasury to the Federal Reserv
Banks of the respective Districts, to issue allotment notices, to receive payment

-6for bonds allotted, to make delivery of bonds on full-paid subscriptions allotted
and they may issue interim receipts pending delivery of the definitive bonds.
2. The Secretary of the Treasury may at any time, or from time to time, pre-

scribe supplemental or amendatory rules and regulations governing the offering,
which will be communicated promptly to the Federal Reserve Banks.

ROBERT V. ROOSA,
Acting Secretary of the Treasury

TABLE 1
Charge or credit
F bonds
maturing
in 1962
on the
first day
of -

Exchange
values
of F
bonds
per $100
(face
amt.)

COL. 1
January
February
March
April

May
June
July
August
September
October
November
December

$99.88
99.64
99.40
99.16
98.92
98.64
98.40
98.16
97.92
97.68
97.44
97.20

for
differences
between $99.50
(offering price
per $100 of new
bonds) and
exchange values
of F bonds
Charge : Credit
COL. 2
—

-

$0.10
0.34
0.58
0.86
1.10
1.34
1.58
1.82
2.06
2.30

- For Series F Bonds

interest
Nov. 15 to
Dec. 15, 1961
to be
charged on
new bonds per
$100 (face
amt.) of
F bonds

1/ Total amounts per $100
(face amt•) of F bonds
accepted
TO
BE
PAID : TO BE COL3/
LECTED
TO SUB: FROM SUBSCRIBERS
SCRIBERS
(COL. 3
minus 4) : (COL. 2
: plus 4
:
minus 3)

COL. 3

COL. 4

COL. 6

$0.38
0.14

$0.32
0.32
0.32
0.32
0.32
0.32
0.32
0.32
0.32
0.32
0.32
0.32

$0.06

—

-

COL. 6
.

$0.18
0.42
0.66
0.90
1.18
1.42
1.66
1.90
2.14
2.38
2.62

2/ Interest
accruing
per $100
on new bonds
from Nov. 15,
1961 to
maturity
dates of
F bonds
in 1962
COL. 7
$0.50
0.83
1.13
1.47
1.79
2.12
2.43
2.76
3.09
3.40
3.73
4.05

I
I

'

1/
""

In addition, for each $100, or multiple or fraction thereof, between the face amount of Series F bonds
submitted and the face amount of bonds subscribed (to next higher multiple of $500) the subscriber must
pay $99.82 ($99.50 issue price plus $0.32 accrued interest).

<o

2/ Including $0.32 per $100 paid by subscriber as accrued interest from November 15, 1963, to December 15,
"~ 1961 (COL. 4). This data is included for information only.
3/ The net amount to be paid to subscribers will be paid following acceptance of the bonds by the agency
"~ through which the exchange is made.

TABLE 2 - For Series G Bonds

G bonds
aturing
n 1962
on the
irst day
of -

Exchange
values
of G
bonds
per $100
(face
amt.)

COL. 1

Credit for
differences
between $99.50
(offering price
per $100 of new
bonds) and
exchange values
of G bonds

COL. 2

Interest
to be
credited

on
G bonds
per $100
(face
amt.)

COL. 3

Interest
Nov. 15 to
Dec. 15, 1961
to be
charged on
new bonds per
$100 (face
amt.) of
G bonds

COL. 4

1/ Total amounts per $100
(face amt.) of G bonds
accepted
8/ TO BE PAID • TO BE C0Li
LECTED
TO SUBSCRIBERS
: FROM SUB: SCRIBERS
(COLS. 2
: (COLS. 4
plus 3
minus 4)
:
minus
i
2 and 3)
COL. 5

COL. 6

.

January
February
March
April
tfay
June
July
August
September
October
November
December
1/

$99.98
99.94
99.90
99.86
99.82
99.79
99.76
99.71
99.68
99.64
99.60
99.56

$0.48
0.44
0.40
0.36
0.32
0.29
0.26
0.21
0.18
0.14
0.10
0.06

2/ Interest
accruing
per $100
on new bonds
from Nov. 15,
1961 to
maturity
dates of
G bonds
in 1962
COL. 7

$1.15
0.94
0.73
0.52
0.31
0.10

1/

0.94
0.73
0.52
0.31
0.10

$0.32
0.32
0.32
0.32
0.32
0.32
0.32
0.32
0.32
0.32
0.32
0.32

$1.31
1.06
0.81
0.56
0.31
0.07
0.83
0.59
0.34
0.09
-

.
.
_
.
$0.16
<•

0.16

$0.50
0.83
1.13
1.47
1.79
2.12
2.43
2.76
3.09
3.40
3.73
4.05

<

In addition, for each $100, or multiple thereof, between the face amount of Series G bonds submitted and the face
amount of bonds subscribed (to next higher multiple of $500) the subscriber must pay $99.82 ($99.50 issue price
plus $0.32 accrued interest).
'

2/ Including $0.32 per $100 paid by subscriber as accrued interest from November 15, 1961, to December 15, 1961 (COL.4).
This data is included for information only.
3/ The net amount to be paid to subscribers will be paid following acceptance of the bonds by the agency through which
the exchange is made.
4/ Interest will be paid to January 1, 1962, on bonds maturing July 1, 1962, in regular course on January 1, 1962, by
checks mailed by the Treasury Department. As these checks will include unearned interest for the period from
December 15, 1961, to January 1, 1962, each subscriber who tenders these bonds will be required to make an interest
refund of $0.10 per $100 (face amount). The above amount of $0.16 in COL. 6 includes such refund.

FOR RELEASE ON DELIVERY

Ql Q

REMARKS BY ROBERT A WALLACE
SPECIAL ASSISTANT TO THE SECRETARY OF THE TREASURY
BEFORE THE LEGISLATIVE COMMITTEE LUNCHEON,
U. S. SAVINGS AND LOAN LEAGUE - CHICAGO, ILL.
NOVEMBER 18, 1961

I want to talk to you today about the Administration's
tax policy, not just the part which affects you directly —
although I will get to that, too — but about our entire tax
program.
That program has two broad objectives: first, to make
our tax laws fairer; and second, to make the tax system
contribute more strongly and more consistently to our national
objective of greater economic growth.
Fairness is an indispensable quality of a tax system in a
democracy. The dangerous world in which we live makes inevitable a heavy tax burden for each of us. But, as taxpayers,
we will more willingly face that burden if we believe that
everyone else is paying his fair share, too.
In recent years, however, the American people have started
wondering about their neighbors' tax bills — as our tax law
has become more and more laden down with preferential devices
and special treatments for certain types of income.
There were good reasons for enactment of many of the
special privileges in our tax law — at the time they were
first passed. But the moment has come now to take a fresh look —
to see whether exceptions and exemptions can still be justified
in today's economy and today's world. In light of our growing
revenue needs the time has also come to make sure we are collecting
every dollar of every tax which is on the books. This is just
what the Kennedy Administration is doing.
One of the prime examples of unfair treatment of different
types of income is our failure to date to apply the withholding
tax to dividends and interest just as it is applied to wages
and salaries. I know that withholding on interest income will
involve headaches for the Savings and Loan industry but I'm sure
you all recognize the fairness of it.

< V i I

w c v^

- 2 -

In addition to fairness, however, we have another objective
of tax policy: growth. The tax law, as it stands now provides
too large incentives for certain kinds of business activity and
too small ones for some others. Free-wheeling expense account
deductions have unquestionably contributed to growth in the
number of restaurants where it is possible to pay more than
$100 for dinner for four. But is this the kind of growth we
want?
The very complexities of our tax laws — something this
Administration also plans to change — have produced enormous
growth in the number of man-hours spent by highly trained
lawyers and accountants in figuring out legal tax avoidance
devices. Is this the best use of their skills?
It is not, and we all know it. Instead, our tax laws
should be providing greater inducement for the kinds of undertakings which will mean production of real wealth for our
people and real security for our nation. Primary among these
are inducements for business to invest in new plants and modern
production equipment. The Administration's tax program encompasses just such inducements — through the proposed investment
credit and administrative reform of depreciation schedules which
is now under way.
We fully recognize, of course, the contribution the Savings
and Loan industry is making, in ever-increasing volume toward
achievement of one of our fundamental national goals — good
housing for every family. And good housing, like good education
and expanded research, contributes to growth both in measurable
terms in the short run and in incalcuable terms over the long run.
But would this contribution of your industry to desirable
social and economic objectives really be seriously impaired if
you were to pay higher taxes? Tax free operations were certainly
appropriate when you were young — and still unsteady on your
feet. But must they continue?
Do your shareholders need the extra protection afforded by
your 12 per cent tax free bad debt reserve? Your investments
are sound and your accounts are insured.
The very fact that only an inconsequential number of Savings
and Loan Associations have actually accumulated a 12 per cent
reserve has caused some people to suggest that either the 12
per cent figure is unnecessarily high or else, since your reserves
fall short of this figure, that you are guilty of irresponsibly
poor management. It is the former, of course, in my opinion.

- 3 The Treasury has proposed that Congress re-examine the
special tax exemption accorded the Savings and Loan industry
with an eye toward achieving a closer relationship among the
taxes borne by the various financial institutions. At the same
time, however, it has asked Congress to view with particular
care any possible adverse effects on the flow of funds into the
housing market. Perhaps a solution to this problem would be to
apply any new tax gradually.
I want to come back again, now, to the Administration's
broad tax program. We are thinking not only of the tax proposals
presently before Congress but also of those to come next spring
when we will submit our comprehensive tax reform package —
which will include reductions in tax rates and closing of tax
loopholes as inseparable opposite sides of the same coin.
Unless Congress will agree to eliminate many of the inequities in the present law there can be no rate reduction.
In tax law, of course, what looks like an unjustified
special treatment to one man or business always looks like a
vital necessity to some other man or business.
But some of the special privileges must be eliminated.
And taxes now due the government under existing law must be
collected in full.
A start must be made if our tax structure is ever to become
fair and if it is ever to become the instrument for producing
growth which a tax system in a free country must be.
That is what the pending tax bill is — a start. If the
scandalous entertainment expense deductions are not limited, if
the enormous gap jln mireported interest and dividend income is
not closed, if no start at all is made this year — then truly
comprehensive tax reform and rate reduction may never come to
pass,
I want to conclude with a special word of appreciation to
the Savings and Loan industry and to the U. S. League for the
straight-forward manner in which you have conducted your campaign
against the tax proposals which directly affect you. The debate
has sometimes been warm. But you have at all times confined your
arguments to the substantive issues — and that is the kind of
opposition we welcome.

*•' c t_

- 4 You in the Savings and Loan industry and I at the Treasury
have been forced to agree to disagree on taxes. But I look
forward to the day when we can once again — as we have so
many times in years past — be making common cause.

oo O oo

3

Q

^c w
WWashington,
ashin_Jov. 2 0 ^ 6 1

STATUTORY DEBT LIMITATION
As of October 3 1. 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
$298,000,000,00
Outstanding Obligations issued under Second Liberty Bond Act, as amended
:

'Tr™;S

$42,640,527,000

Certificates of indebtedness
5»509»218 ,000
Treasury notes
67.807.306.000
$115,957,051,000
Bonds Treasury
79,276,870,650
•Savings (current redemption value)
47 , 743 »055»292
Depositary
156,798,500
R. E. A. series
21,633 » 000
Investment series
5,166.933,000
132,365,290,442
Certificates of Indebtedness Foreign series
450,000 ,000
Foreign Currency series
46,285,000
496,285,000
Special Funds Certificates of indebtedness
6,134,564,000
Treasury notes
7 ,538,084,000
Treasury bonds
30,217,837.000
43,890,485,000
Total interest-bearing
292 ,709 ,111,442
Matured, interest-ceased
317 »856,418
Bearing no interest:
United States Savings Stamps
50,338 ,430
Excess profits tax refund bonds
745,983
Special notes of the United States :
Internat'l Monetary Fund series
2 , 060,000,000
Internat'l Develop. Ass'n. series
57,652,200
Inter-American Develop. Bank series
25,000,000
2,193,736,613
Total
295,220,704,473
Guaranteed obligations (not held by Treasury):
Interest-bearing :
Debentures : F. H. A. & D C Stad. Bds
298 ,362, 650
Matured, interest-ceased
501,500
298,864,150
Grand total outstanding
Balance face amount of obligations issuable under above authority.
Reconcilement with Statement of the Public Debt

er

-*•*-» ^ol
0ctobei< D 5_>, 1 9 6 1

(Daily Statement of the United States Treasury,
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

n-301

295, 51?t ^68.62,
2,480,431,37j

)
.
,

295,660,371,96'
298 T 864«l5i
295,959,236,11'
43Q . 6 6 7 ^ ^
295,519,568,62:

S T A T U T O R Y D E B T LIMITATION

A s „

f

_ t _ _ _ _ 6 1 _

Nov.2oV:_96l

Washington,
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
$^2 , 640 ,527 , 000
Certificates of indebtedness
5 , 509 ,218,000
Treasury notes
__7._BD2_.3Q6.. QOQ $115 . 957 ,0 51,000
Bonds Treasury
79,276,870,650
•Savings (current redemption value)
4 7 ,743 ,055,292
Depositary
.
156,798,500
R. E. A. series
21,633,000
Investment series
___________
132,365,290,442
Certificates of Indebtedness Foreign series
450,000 ,000
Foreign Currency series
46,285,000
496,285 ,000
Special Funds Certificates of indebtedness
6,134,564,000
Treasury notes
7,538,084,000
Treasury bonds
'.
. 30,217,837,000
43,890.485.000
Total interest-bearing
292 , 709 , 111 ,442
Matured, interest-ceased
317,856,418
Bearing no interest:
United States Savings Stamps
50,338,430
Excess profits tax refund bonds
/45,983
Special notes of the United States :
Internat'l Monetary Fund series
2 , 060 ,000 ,000
Internat'l Develop. Ass'n. series
57,652,200
Inter-American Develop. Bank series
25,000,000
2 ,193 ,736f 613
Total
295,220,704,473
Guaranteed obligations (not held by Treasury):
Interest-bearing ;
Debentures: F. H. A. & D C Stad. Bds.
298,362,650
Matured, interest-ceased
501,500
298,864,150
Grand total outstanding
2 9 5 , 519 , 568 ,623
Balance face amount of obligations issuable under above authority
2,480,431,377
Reconcilement with Statement of the Public Debt ' ' <"•*•
0ctobe_( D 5t>, 1 9 6 1
(Daily Statement of the United States Treasury,
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

.

295 ,660 ,37'1, 965
298,864,150
295,959,236,115
439 ,667 ,492

295,519,568,623
D-301

"The appointment of Mr. Daane as Deputy and the assumption of
many of his previous duties by Mr. Morris will aid materially in
discharging the expanded responsibilities — both domestic and
international — of the office of the Under Secretary for Monetary
Affairs," Under Secretary Roosa said.

0O0

- 2 Mr. Daane joined the Treasury on leave from the Federal Reserve
Bank of Minneapolis, where he held the position of Vice President

and Economic Advisor. He has resigned from that position, effective
November 20. He was previously associated with the Federal Reserve
Bank of Richmond, Virginia.
_::^v AJ»* *4AW A^^^^^-^fJ ?+*** '
^Morris, appointed September 25 as deputy to Mr. Daane,

1
it
will continue to aid in the coordination of plans
and policies for debt management, including the work of the
Office of Debt Analysis. He will also continue to assist in the

organization of the newly established Office of Financial Analysis
until the Director of that office is appointed. Under Secretary
Roosa said that he expected a director to be announced by the end
of this year.
Mr. Morris, until his appointment last September, directed
research activities for the Investment Bankers Association, with
offices in Washington, D. C.

3

A3S>.^7A/uT.

^

__ i

DRAFT - 11-17-61

November 17. 19^1

FOR RELEASE AM NEWSPAPERS
MONDAY, NOVEMBER 20, 1961
DAANE NAMED DEPUTY UNDER SECRETARY FOR MONETARY AFFAIRS;
MORRIS BECOMES ASSISTANT TO THE SECRETARY (DEBT MANAGEMENT)
J. Dewey Daane has been appointed Deputy Under Secretary of the
Treasury for Monetary Affairs,%Robert V. Roosa,
•Maaafcaiif*

Acting]Treasury Secretary ^/announced today.

In his new capacity,"Mr. Daane will act as a general deputy

to the Under Secretary for Monetary Affairs, iH*MM4i_rt'T(igfte&i, par
the Office of Financial Analysis and &» the Office of
Domestic Gold and Silver Operations.
Mr. Daane has served as Assistant to the Secretary since
\ X. -»>

July

18, i960.

\

laasaifeHae^^^

^ ,y

<**""

fc^v^&ane^e principal duties have been as advisor to the Under
|

Secretary for Monetary Affairs, in all aspects of the latter
\ official's responsibilities.

"4_
D

7

CJ (J A

*$• % }

/ ~Tnt.

fi(

a ^

^
0**

V

/• (x

/_

ift t\m M

TREASURY DEPARTMENT
WASHINGTON, D.C.
November 17, 1961
FOR RELEASE AM NEWSPAPERS
MONDAY, NOVEMBER 20, 1961
DAANE NAMED DEPUTY UNDER SECRETARY FOR MONETARY/AFFAIRS;
MORRIS BECOMES ASSISTANT TO THE SECRETARY (DEBT MANAGEMENT)
J. Dewey Daane has been appointed Deputy Under Secretary of the
Treasury for Monetary Affairs, Acting Secretary of the Treasury,
Robert V. Roosa, announced today.
Mr. Roosa also announced the appointment of Frank E. Morris to
succeed Mr. Daane as Assistant to the Secretary (Debt Management).
In his new capacity, Mr. Daane will act as a general deputy to
the Under Secretary for Monetary Affairs, with particular emphasis on
the Office of Financial Analysis and the Office of Domestic Gold and
Silver Operations.
Mr. Daane has served as Assistant to the Secretary since July 18,
i960. His principal duties have been as advisor to the Under Secretary
for Monetary Affairs, in all aspects of the latter official's
responsibilities.
Mr. Daane joined the Treasury on leave from the Federal Reserve
Bank of Minneapolis, where he held the position of Vice President and
Economic Advisor. He has resigned from that position, effective
November 20. He was previously associated with the Federal Reserve
Bank of Richmond, Virginia.
In his new assignment, Mr. Morris, appointed September 25 as
deputy to Mr. Daane, will continue to aid in the coordination of plans
and policies for debt management, including the work of the Office of
Debt Analysis. He will also continue to assist in the organization of
the newly established Office of Financial Analysis, until the Director
of that office is appointed. Under Secretary Roosa said that he
expected a Director to be announced by the end of this year.
Mr. Morris, until his appointment last September, directed
research activities for the Investment Bankers Association, with office
in Washington, D. C.
"The appointment of Mr. Daane as Deputy and the assumption of many
of his previous duties by Mr. Morris will aid materially in discharging
the expanded responsibilities — both domestic and international — of
the office of the Under Secretary for Monetary Affairs," Under
Secretary
Roosa said.
D-302
0O0

TREASURY DEPARTMENT
WASHINGTON. D.C.
November 17. 196l
FOR RELEASE AM NEWSPAPERS
MONDAY, NOVEMBER 20, 1961
DAANE NAMED DEPUTY UNDER SECRETARY FOR MONETARY. AFFAIRS;
MORRIS BECOMES ASSISTANT TO THE SECRETARY (DEBT MANAGEMENT)
J. Dewey Daane has been appointed Deputy Under Secretary of the
Treasury for Monetary Affairs, Acting Secretary of the Treasury,
Robert V. Roosa, announced today.
Mr. Roosa also announced the appointment of Frank E. Morris to
succeed Mr. Daane as Assistant to the Secretary (Debt Management).
In his new capacity, Mr. Daane will act as a general deputy to
the Under Secretary for Monetary Affairs, with particular emphasis on
the Office of Financial Analysis and the Office of Domestic Gold and
Silver Operations.
Mr. Daane has served as Assistant to the Secretary since July 18,
i960. His principal duties have been as advisor to the Under Secretary
for Monetary Affairs, in all aspects of the latter official's
responsibilities.
Mr. Daane joined the Treasury on leave from the Federal Reserve
Bank of Minneapolis, where he held the position of Vice President and
Economic Advisor. He has resigned from that position, effective
November 20. He was previously associated with the Federal Reserve
Bank of Richmond, Virginia.
In his new assignment, Mr. Morris, appointed September 25 as
deputy to Mr. Daane, will continue to aid in the coordination of plans
and policies for debt management, Including the work of the Office of
Debt Analysis. He will also continue to assist in the organization of
the newly established Office of Financial Analysis, until the Director
of that office is appointed. Under Secretary Roosa said that he
expected a Director to be announced by the end of this year.
Mr. Morris, until his appointment last September, directed
research activities for the Investment Bankers Association, with offices
in Washington, D. C e
"The appointment of Mr. Daane as Deputy and the assumption of many
of his previous duties by Mr. Morris will aid materially In discharging
the expanded responsibilities — both domestic and International — of
the office of the Under Secretary for Monetary Affairs," Under
Secretary Roosa said.
D-302
0O0

-.10—

Q 0d
w w *_*

We are here to discuss that course with you today. We have come
to answer your questions, to hear your views, and to consider
together what steps we must take to reach our goals. We are not here
to lecture, but to learn. We want to know what you're thinking, and
how you feel. We want every single good idea we can get hold of.
This is indeed a time of decision. We hold the shape of the
future in our hands. The responsibility is ours — yours and mine —
and I am sure we will meet it boldly.
Let us resolve now, that this will go down in history as the
outset of a decade of decision, and not the beginning of a decade of
default.

0O0

international balance of payments, which have been depleting our gold
stocks, without withdrawing our military outposts in various bases
in the Free World and abandoning aid to the less developed countries,
leaving them to unhindered economic penetration and subversion by
the Communist bloc.
Depreciation reform will also contribute to cur domestic economy,
by giving added strength to expansion, and by increasing our potential
for long-term growth.

It will contribute to expansion as new invest-

ment stimulates the machinery and allied industries and provides more
jobs. There is a startling association between a healthy increase
in the levels of such investment and vigorous and lengthy upswings
in our economy.

Increased investment in plant and equipment will

also broaden our industrial base and help to expand our domestic
markets.

It is significant —

in considering the effect of such

investment on long-term growth — to note that Japan and West Germany,
two nations which, as I mentioned, grew at more than twice our rate
during the last decade, both spent more than twice as great a
proportion of their output on investment in machinery and equipment
during that time as did the United States.
To sum up, our recovery is healthy and strong. That gives us
the time we need to take action to assure that the recovery
continues, and that we move ahead into a period of more rapid
economic expansion, in which we can realize our true potential.
Our task is to see that in this critical time we act with
firmness and with wisdom.

- 8 -

Q

^

This tax policy for increasing productivity and growth by
depreciation reform has two aspects of great importance not only to
business but to all of us.
The first is a realistic, up-to-date revision of depreciation
rules for productive equipment, making allowance for recent advances
in technology.

Already there has been a 40 per cent reduction in

Internal Revenue Service guidelines for depreciation of equipment
in the textile industry.

Other studies under way are expected to

lead to substantial changes for other industries next year.
Second, to help put American manufacturers on an equal footing
with foreign competitors, who have been modernizing more rapidly,
and to encourage expansion where needed, we are proposing an acrossthe-board tax credit for investment in new industrial equipment — a
proposal we hope the Congress will pass into law in the next session.
This double incentive for American manufacturers to modernize
or expand is designed to put them once again on an equal basis in
that particular with European and Japanese industry, which has long
benefited from liberal tax treatment on new plant and equipment as
a stimulus to modernization.

More modern machinery will cut costs

and enable us to hold our own better against imports without
restrictive trade practices that would invite retaliation and close
off our access to some of our best markets. Moreover, it will
enable us to gain a larger share of export markets.
This is important, first because our competitive position in
those markets has been worsening recently with rises in prices of
our export goods.

Secondly, expanding our export trade is the

best hope we have of eliminating our recent large deficits in our

- 7 -

Op4
v_ \_J >_/

But in recent years, at the very time when the United States has
most needed to marshal its economic resources, our growth rate has
been lagging. During the decade of the fifties, while we were
growing at less than 3-1/2 per cent a year in terms of national
output, Free Continental Europe was growing at nearly five per cent,
the Soviet Union at better than six per cent, and West Germany and
Japan at better than seven per cent.
And during the latter part of the fifties, our growth rate fell
below three per cent. President Kennedy has said that a growth rate
of 4-1/2 per cent is well within our capability.

Given the increases

in our labor force, and the expanded productivity we have a right to
expect from our rich technology and better trained work force, it is
certainly a realistic goal.
The programs I have mentioned, as they utilize the wasted
resources of our economy, will help. There are, of course, many
other ways in which Government policy may encourage growth. Fiscal
and monetary policies, including our management of the public debt,
have been conducted in such a fashion as to encourage low interest
rates for long-term investment and to prevent excessively low
short-term interest rates, which encourage capital flow to foreign
countries with higher rates. This novel and somewhat difficult
policy was designed to encourage long-term growth while improving
our international balance of payments position.
Another area also deserves attention. This is our tax policy —
particularly as it is being directed toward increasing productive
efficiency by encouraging modernization of machinery and equipment.

not find productive work for these young people, all of us can be
sure to pay a high price, not only in economic waste, but in
squandered individual and national potential, in crime, in misery,
in frustration and in despair.
Many of these programs, particularly those in education and
training, contribute directly to economic growth.

All of them are

necessary in a society which protects the human dignity of its
citizens.
But new programs — however necessary — cost money, and this
is one reason why economic growth is so important.

It will provide

increasing income out of current or lower tax rates for our
continued progress in providing constructive and necessary services
on a sound fiscal and budgetary basis.
Economic growth will enable the nation to meet its
responsibilities for national security and needed Federal services
with balanced budgets or surpluses rather than incur repeated
deficits or sacrifice vital national interests.
So, a basic problem to be considered is how to achieve and
maintain an adequate rate of growth.
ahead.

Our recovery is moving solidly

It is expected to continue to advance next year. What must

be done now is to take steps to promote our long-term growth in the
years ahead. This growth is needed to meet our defense needs, our
space needs, our foreign obligations, our employment needs and the
educational, health, and community programs demanded by our citizens.
This growth is needed for security and progress today.
be needed for survival tomorrow.

It may well

Our problem of growth, then, is not merely an economic problem -,
it is a profoundly human problem.

This will be emphasized in today's

fourth panel dealing with "Safeguards Against Human Distress." A
number of Government actions I mentioned earlier alleviate human
distress, such as extension of unemployment compensation, increasing
minimum wage protection, improved housing, area redevelopment,
extension of social security, and slum clearance. There have been
others as well, such as new laws to improve the lot of the migrant
worker, new Government orders banning racial or religious
discrimination in hiring in government or In private firms under
government contract, and the Juvenile Delinquency Act of 1961.
Much remains to be done. For example, the nation needs greater
aid to education, worker re-training, a plan to help pay for medical
care for the aged, permanent legislation improving our unemployment
compensation laws, and legislation to improve job opportunities for
our youth.
All of these were the subject of Administration proposals in the
last Congress, and the need for them still exists. Only last week,
for instance, President Kennedy appointed a committee to help young
people find jobs, expressing once again his concern.

Right now

there are some 800,000 young people between 16 and 21 who are
neither earning nor learning, and it is no surprise to learn that
this is the group with the highest youth crime rate. Next year a
million more will drop out of school.

Some 26 million new workers

will enter the labor market in the next 10 years, and seven million
of these will not have completed high school. If our economy does

-4-

and it is up to the people in the community — with the help of local
and state Government and other interested groups — to marshal the
private investment and initiative needed to complete the job.
A second type of unemployment, just as important as regional
unemployment, can occur anywhere. This is "structural unemployment" .
'people out of work because there is no longer any demand for their
skills.

It has been estimated that automation —

a major factor in

structural unemployment — eliminated jobs of nearly a million
persons last year, many of them in middle age or beyond for whom
learning a new trade or moving to a new area of opportunity is
difficult. This problem will be discussed in the panel on
"Adjusting to Automation."

This concerns workers who may have

spent ye^rs learning their jobs, when suddenly, because of
technological advance, plant relocation or some other factor, their
jobs are eliminated. We cannot ignore these jobless people, who
represent a valuable economic resource. They have a right to
expect society to give them a chance to use their energy and ability
in productive employment. The Area Redevelopment Program provides
facilities to re-train some of these workers, but it was not
designed — and cannot hope to meet — the whole problem of
structural unemployment which can occur anywhere at any time.
What is needed is a broad re-training program, such as the
Manpower Development and Training Act submitted to the last session
of Congress. This program is a must, not only for

those presently

unemployed, but to those who are likely to lose their jobs to
machines as our technology continues to advance. The nation cannot
afford the tremendous waste involved in chronic unemployment.

This is a fine recovery, but it shares an unhappy aspect of
recent recoveries — the increasing persistence of high levels of
unemployment beyond the recession period.
Last month our seasonally adjusted unemployment rate was 6.8
per cent of our labor force, where it has been hovering for some
eleven months. Even though last month more people were employed
than in any other October on record, nevertheless, the latest figures
show 3,900,000 people out of work — 725,000 of them for more than
six months.
Many of these people suffer from what might be called "regional
unemployment" — they are out of work because they live in an area
of economic distress. While our economy has advanced greatly in
over-all terms during the past few months, some areas have advanced
faster than others which have lagged behind badly.

It was to help

these areas of lagging growth that the Area Redevelopment Act was
passed. Already some 800 such areas have, at their request, been
officially designated for federal assistance. This will be discussed
in the panel on "Mobilizing Local Initiative." For while this act
is designed to assure that our economic growth does not skip over
certain areas of our nation, leaving pockets of economic stagnation
in its wake, this is not a job which can or should be done by the
Federal Government alone. The bulk of the responsibility, and the
real potential for action, lies in the community itself, and the
people who live there. The Federal Government can provide "seed
capital," but this amount will necessarily be small in relation to
the amount needed.

It is intended to stimulate local investment,

- 2 Previously planned defense construction and procurement were
speeded up, as well as payments of income tax refunds, highway
payments to states, and veterans' life insurance dividends.
Unemployment compensation was extended temporarily to cover workers
who had exhausted their benefits, and aid was expanded to cover
dependent children of the unemployed.

The minimum wage was raised,

its coverage was expanded to millions more workers, and Social
Security benefits were increased for millions of other people. The
Housing Act of 1961 was passed, providing for more slum clearance
and urban renewal, more FHA mortgage insurance, and more public
housing. The Area Redevelopment Act was also passed, to train and
re-train jobless workers and to stimulate economic activity in
distressed areas.
Those and other Government actions, directly or indirectly,
had the effect of increasing purchasing power, stimulating the
growth of our economy, and providing more jobs.

The response was

prompt. Within a few months the economy was moving forward again.
The response of our domestic economy has continued to be
gratifying.

Between the first and third quarters of this year our

total national output has risen from an annual rate of $501 billion
of gross national product to $526 billion. This means our economy
has surged ahead by about five per cent in only half a year — an
excellent record.

Moreover, this has taken place in an atmosphere

of relative price stability — without inflation. For the immediate
future, the experts forecast an annual rate of GNP In the last
quarter of this year in the neighborhood of $540 billion.

REMARKS BY THE HONORABLE HENRY H. FOWLER
UNDER SECRETARY OF THE TREASURY
AT THE WHITE HOUSE REGIONAL CONFERENCE
ON FULL EMPLOYMENT AND ECONOMIC GROWTH
LOS ANGELES, CALIFORNIA,
TUESDAY, NOVEMBER 21, 196l
RECOVERY, FULL EMPLOYMENT, AND LONG-TERM GROWTH

It's always a pleasure to come to Southern California, and
particularly when my topic is something you know well at first hand economic growth. If our nation was growing as fast as California,
many of our national problems would be solved. What we are here
today to discuss, however, is not merely the situation in
California, but the problem of achieving full employment and a
rapid, healthy rate of growth for our entire nation.
One of today's panels will consider recovery and growth.
Let's t&ke a look first at our present strong recovery, and the
events that preceded it. When President Kennedy took office last
January we were in the depths of a recession that was then seven
months old, with unemployment at its highest peak in almost 20 years.
The immediate task was to reverse the trend and get the economy
moving forward again.

Our economy is essentially a healthy one, and

possesses strong natural recovery forces. The problem was how best
to stimulate and augment those forces.
Government moved promptly and effectively to do this.

A number

of actions, both legislative and executive, were taken which gave
renewed confidence to the private sectors of our economy and had
the effect of promoting recovery along a broad front. Here are
some of those actions:

CH j
REMARKS BY THE HONORABLE HENRY H. POWLER
UNDER SECRETARY OP THE TREASURY
AT THE WHITE HOUSE REGIONAL CONFERENCE
ON FULL EMPLOYMENT AND ECONOMIC GROWTH
LOS ANGELES, CALIFORNIA,
TUESDAY, NOVEMBER 21, 1961
RECOVERY, FULL EMPLOYMENT, AND LONG-TERM GROWTH

It's always a pleasure to come to Southern California, and
particularly when my topic is something you know well at first hand —
economic growth.

If our nation was growing as fast as California,

many of our national problems would be solved. What we are here
today to discuss, however, is not merely the situation in
California, but the problem of achieving full employment and a
rapid, healthy rate of growth for our entire nation.
One of today's panels will consider recovery and growth.
Let's take a look first at our present strong recovery, and the
events that preceded it. When President Kennedy took office last
January we were in the depths of a recession that was then seven
months old, with unemployment at its highest peak in almost 20 years.
The immediate task was to reverse the trend and get the" economy
moving forward again.

Our economy is essentially a healthy one, and

possesses strong natural recovery forces. The problem was how best
to stimulate and augment those forces.
Government moved promptly and effectively to do this.

A number

of actions, both legislative and executive, were taken which gave
renewed confidence to the private sectors of our economy and had
the effect of promoting recovery along a broad front.
some of those actions:

Here are

•w t a.

- 2Previously planned defense construction and procurement were
speeded up, as well as payments of income tax refunds, highway
payments to states, and veterans' life insurance dividends.
Unemployment compensation was extended temporarily to cover workers
who had exhausted their benefits, and aid was expanded to cover
dependent children of the unemployed.

The minimum wage was raised,

its coverage was expanded to millions more workers, and Social
Security benefits were increased for millions of other people.- The
Housing Act of 1961 was passed, providing for more slum clearance
and urban renewal, more FHA mortgage insurance, and more public
housing. The Area Redevelopment Act was also passed, to train and
re-train jobless workers and to stimulate economic activity in
distressed areas.
Those and other Government actions, directly or indirectly,
had the effect of increasing purchasing power, stimulating the
growth of our economy, and providing more jobs. The response was
prompt. Within a few months the economy was moving forward again.
The response of our domestic economy has continued to be
gratifying. Between the first and third quarters of this year our
total national output has risen from an annual rate of $501 billion
of gross national product to $526 billion. This means our economy
has surged ahead by about five per cent in only half a year — an
excellent record.

Moreover, this has taken place In an atmosphere

of relative price stability — without inflation. For the immediate
future, the experts forecast an annual rate of GNP in the last
quarter of this year in the neighborhood of $540 billion.

This is a fine recovery, but it shares an unhappy aspect of
recent recoveries — the increasing persistence of high levels of
unemployment beyond the recession period.
Last month our seasonally adjusted unemployment rate was 6.8
per cent of our labor force, where it has been hovering for some
eleven months. Even though last month more people were employed
than in any other October on record, nevertheless, the latest figures
show 3,900,000 people out of work — 725,000 of them for more than
six months.
Many of these people suffer from what might be called "regional
unemployment" — they are out of work because they live in an area
of economic distress. While our economy has advanced greatly in
over-all terms during the past few months, some areas have advanced
faster than others which have lagged behind badly.

It was to help

these areas of lagging growth that the Area Redevelopment Act was
passed. Already some 800 such areas have, at their request, been
officially designated for federal assistance. This will be discussed
in the panel on "Mobilizing Local Initiative." For while this act
is designed to assure that our economic growth does not skip over
certain areas of our nation, leaving pockets of economic stagnation
in its wake, this Is not a job which can or should be done by the
Federal Government alone. The bulk of the responsibility, and the
real potential for action, lies in the community itself, and the
people who live there. The Federal Government can provide "seed
capital," but this amount will necessarily be small in relation to
the amount needed.

It is intended to stimulate local investment,

343
and it is up to the people in the community -- with the help of local
and state Government and other interested groups —

to marshal the

private investment and initiative needed to complete the job.
A second type of unemployment, just as important as regional •
unemployment, can occur anywhere. This is "structural unemployment" people out of work because there is no longer any demand for their
skills. It has been estimated that automation — a major factor in
structural unemployment —• eliminated jobs of nearly a million
persons last year, many of them in middle age or beyond for whom
learning a new trade or moving to a new area of opportunity is
difficult. This problem will be discussed in the panel on
"Adjusting to Automation."

This concerns workers who may have

spent years learning their jobs, when suddenly, because of
technological advance, plant relocation or some other factor, their
jobs are eliminated.

We cannot Ignore these jobless people, who

represent a valuable economic resource. They have a right to
expect society to give them a chance to use their energy and ability
in productive employment. The Area Redevelopment Program provides
facilities to re-train some of these workers, but it was not
designed — and cannot hope to meet -- the whole problem of
structural unemployment which can occur anywhere at any time.
What is needed is a broad re-training program, such as the
Manpower Development and Training Act submitted to the last session
of Congress. This program is a must, not only for

those presently

unemployed, but to those who are likely to lose their jobs to
machines as our technology continues to advance. The nation cannot
afford the tremendous waste involved in chronic unemployment.

Our problem of growth, then, is not merely an economic problem it is a profoundly human problem.

This will be emphasized in today's

fourth panel dealing with "Safeguards Against Human Distress." A
number of Government actions I mentioned earlier alleviate human
distress, such as extension of unemployment compensation, increasing
minimum wage protection, Improved housing, area redevelopment,
extension of social security, and slum clearance. There have been
others as well, such as new laws to improve the lot of the migrant
worker,, new Government orders banning racial or religious
discrimination in hiring in government or in private firms under
government contract, and the Juvenile Delinquency Act of 1961.
Much remains to be done. For example, the nation needs greater
aid to education, worker re-training, a plan to help pay for medical
care for the aged, permanent legislation improving our unemployment
compensation laws, and legislation to improve job opportunities for
our youth.
All of these were the subject of Administration proposals in the
last Congress, and the need for them still exists. Only last week,
for instance, President Kennedy appointed a committee to help young
people find jobs, expressing once again his concern.

Right now

there are some 800,000 young people between 16 and 21 who are
neither earning nor learning, and It is no surprise to learn that
this is the group with the highest youth crime rate. Next year a
million more will drop out of school.

Some 26 million new workers

will enter the labor market in the next 10 years, and seven million
of these will not have completed high school.

If our economy does

not find productive work for these young people, all of us can be
sure to pay a high price, not only in economic waste, but in
squandered individual and national potential, in crime, in misery,
in frustration and in despair.
Many of these programs, particularly those in education and
training, contribute directly to economic growth.

All of them are

necessary in a society which protects the human dignity of its
citizens.
But new programs — however necessary — cost money, and this
is one reason why economic growth is so important.

It will provide

increasing income out of current or lower tax rates for our
continued progress in providing constructive and necessary services
on a sound fiscal and budgetary basis.
Economic growth will enable the nation to meet its
responsibilities for national security and needed Federal services
with balanced budgets or surpluses rather than incur repeated
deficits or sacrifice vital national interests.
So, a basic problem to be considered is how to achieve and
maintain an adequate rate of growth.

Our recovery is moving solidly

ahead. It is expected to continue to advance next year. What must
be done now is to take steps to promote our long-term growth in the
years ahead. This growth is needed to meet our defense needs, our
space needs, our foreign obligations, our employment needs and the
educational, health, and community programs demanded by our citizens.
This growth is needed for security and progress today.
be needed for survival tomorrow.

It may well

- 7But in recent years, at the very time when the United States has
most needed to marshal its economic resources, our growth rate has
been lagging. During the decade of the fifties, while we were
growing at less than 3-1/2 per cent a year in terms of national
output, Free Continental Europe was growing at nearly five per cent,
the Soviet Union at better than six per cent, and West Germany and
Japan at better than seven per cent.
And during the latter part of the fifties, our growth rate fell
below three per cent. President Kennedy has said that a growth rate
of 4-1/2 per cent is well within our capability.

Given the increases

in our labor force, and the expanded productivity we have a right to
expect from our rich technology and better trained work force, it is
certainly a realistic goal.
The programs I have mentioned, as they utilize the wasted
resources of our economy, will help. There are, of course, many
other ways in which Government policy may encourage growth. Fiscal
and monetary policies, including our management of the public debt,
have been conducted in such a fashion as to encourage low interest
rates for long-term Investment and to prevent excessively low
short-term Interest rates, which encourage capital flow to foreign
countries with higher rates. This novel and somewhat difficult
policy was designed to encourage long-term growth while improving
our international balance of payments position.
Another area also deserves attention. This is our tax policy
particularly as it is being directed toward increasing productive
efficiency by encouraging modernization of machinery and equipment.

—

- 8This tax policy for increasing productivity and growth by
depreciation reform has two aspects of great importance not only to
business but to all of us.
The first is a realistic, up-to-date revision of depreciation
rules for productive equipment, making allowance for recent advances
in technology.

Already there has been a 40 per cent reduction in

Internal Revenue Service guidelines for depreciation of equipment
in the textile industry.

Other studies under way are expected to

lead to substantial changes for other industries next year.
Second, to help put American manufacturers on an equal footing
with foreign competitors, who have been modernizing more rapidly,
and to encourage expansion where needed, we are proposing an acrossthe-board tax credit for investment in new industrial equipment — a
proposal we hope the Congress will pass into law in the next session.
This double Incentive for American manufacturers to modernize
or expand Is designed to put them once again on an equal basis in
that particular with European and Japanese industry, which has long
benefited from liberal tax treatment on new plant and equipment as
a stimulus to modernization.

More modern machinery will cut costs

and enable us to hold our own better against imports without
restrictive trade practices that would Invite retaliation and close
off our access to some of our best markets. Moreover, it will
enable us to gain a larger share of export markets.
This is Important, first because our competitive position in
those markets has been worsening recently with rises in prices of
our export goods.

Secondly, expanding our export trade is the

best hope we have of eliminating our recent large deficits in our

- 9international balance of payments, which have been depleting our gold
stocks, without withdrawing our military outposts in various bases
in the Free World and abandoning aid to the less developed countries,
leaving them to unhindered economic penetration and subversion by
the Communist bloc.
Depreciation reform will also contribute to cur domestic economy,
by giving added strength to expansion, and by increasing our potential
for long-term growth.

It will contribute to expansion as new invest-

ment stimulates the machinery and allied Industries and provides more
jobs. There is a startling association between a healthy increase
in the levels of such investment and vigorous and lengthy upswings
in our economy.

Increased investment in plant and equipment will

also broaden our industrial base and help to expand our domestic
markets. It is significant —

in considering the effect of such

investment on long-term growth --to note that Japan and West Germany,
two nations which, as I mentioned, grew at more than twice our rate
during the last decade, both spent more than twice as great a
proportion of their output on investment in machinery and equipment
during that time as did the United States„
To sum up, our recovery is healthy and strong. That gives us
the time we need to take action to assure that the recovery
continues, and that we move ahead into a period of more rapid
economic expansion, in which we can realize our true potential.
Our task Is to see that in this critical time we act with
firmness and with wisdom.

- 10 We are here to discuss that course with you today.

We have come

to answer your questions, to hear your views, and to consider
together what steps we must take to reach our goals.
to lecture, but to learn.
how you feel.

We are not here

We want to know what you're thinking, and

We want every single good idea we can get hold of.

This is indeed a time of decision.
future in our hands.

We hold the shape of the

The responsibility is ours —

yours and mine

—

and I am sure we will meet it boldly.
Let us resolve now, that this will go down in history as the
outset of a decade of decision, and not the beginning of a decade of
default.

oOo

fi

$m mtmm

A. *.

0 •••-..

}(

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flfcowms,

*0f««D** toff i M i

itsuaa or tttuaoK**

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Tb* Traawiry Saparfeaaiit amoajuwd ! » % aoaaiag that t*»toadter*for ta» *ariaa *f
tfMuntfy bills, O M wrias to is® a* add&tiojart lasus of tte feiHa dttod d a p * ! % lift
a M th* othar ttrtw to h# datod *ewa*»sr 2fc, 1981, *&i«a «@r» affarad on lkwiaja«r IS,'
mm opaaad at th* Fadaral M«*«r»1 Santos * Mo**absr 20« Tandsrs wtrt imritad for
iX,100,TO,000f #r thaswfcamto, «f I M a y hills and ftr | 6 0 0 , O O O , O O Q , m i k m b t l i , 0;
lSl~d»y Mlla« tas date!!* #f tto t » twriM i n «• f o U o w i
lMl*4mj fwmmmf hills
&<*dsy riMMurar/ bill®
.« l»^mv«

lev
Avaiwga

•v;ttrox<

mmw

*Mto3
9b.6?6

2*7

V sxaactiaa oaa totutor of 1300,000
P psfsaiit of tha amount of 91~injf bill* bid far at th* low prisa w&a aooaotad
73 paroaat of ti» » m i o f l8l«4sy sills bid for at ths low prist was mooaptad
t01Ai» fSlBKIS AJVU30 FOR All) ACOOTiB SI FSOfiftAL WktiMIS MSfmOt^t

ts&

mm finrtc
miatfalpiiU

maaoad
Atlanta
Chisago
;-;t. basis

Appliad
d for

Aao&atad

i,*38,701,000
27,237,000
38,757,000
i$,8*>,ooo
23,1*30,000
219,031,000
214,711,000
29,123,000
22,537,000

70$ ,#§§,§00
3§,7I7,000
15,110,000
ll f 330 # «0
11^,279,000
80,788,009

MB

l f 0&t # f6k«0QO-

ifistfooo
2k,aiotooo

i^j^UfOOO
2,232,0^

io,i^S,o^

3,270,000
3»295f00O
3,990,000
1^,090,000
^2,473,000
92,378,000
6,122,000
Ml2»t#&p®li§
8,022,000
t2,oxi
«s§
t
aaasas City
Mn*oo»
6,771,000
tMt3,ooo
Dallas
21,$99,O0O
lA f $l7#000
3 * D Fraaslseo
§
$,868,000
OT4I3
W»9m»m^
«ltlCOfl3f#000^/
- ftiltftgffi #oo,|#,wc/
y Imlwim
8226,7ii5,000 aoiwo«j[«Utivo toadters aeoopto*
«t tto a v « » « ^ prio* of 9?»3
8aL»23^*129,000
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9*^® ®$ ^ » ° *
Ois a c-vapott l a w of t'i» aawa laj^th m4 for tte aaao anoiwi lwroatod, tlsa retain]
U W M b U l i «o«ld orovid* ylofcta-** 2«$9J, Uor ito n - d a y b i U a , and 2 4 H , ftf
lil-day bill*, iatoraat rata* om l»illi art qm%®4 %M Unm of fc»ak diae^wl ^
too rtttum rtlatod to the Urn mmm%- of tht M i l ® pa/abla at u&aturlty r*t^®r **
tha aaoiott tataatadi aad thair laactfa ia a«taal niwbar of daya w l a t a d to a 360-4
yaar. ia ooiitimat, jlalda on eartlflaatva, sot#a, and i w d a ar® ea«spat*d ia t«r
of Mttaraat on tha a»o«at Iwr^atad, aad ralota tha mmSmr of daya raaaialat i«a
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$ mm

TREASURY DEPARTMENT
W A S H I N G T O N , D.C.
)R RELEASE A. M. NEWSPAPERS, November 20, 196l
gsday, November 21, 1961.
RESULTS OF TREASURY'S WEEKLY BILL OFFERING
The Treasury Department announced last evening that the tenders for two series of
reasury bills, one series to be an additional issue of the bills dated August 21*, 1961,
ad the other series to be dated November 21*, 1961, which were offered on November 15,
ere opened at the Federal Reserve Banks on November 20. Tenders were invited for
1,100,000,000, or thereabouts, of 91-day bills and for $600,000,000, or thereabouts, of
81-day bills. The details of the two series are as followss
ANGE OF ACCEPTED
OMPETITIVE BIDS!
High
Low
Average

91-day Treasury bills
maturing February 23, 1962
Approx. Equiv.
Annual Rate
Price
~2320<r~
99*363 af
2.556$
99.351*
2.537$ 1/
99.359

181-day Treasury bills
maturing May 21;, 1962
Approx. Equiv,
Price
Annual Rate
" 2.725$ "~
"9030"
2.739$
98.623
2.73U$ 1/
98.626

a/ Excepting one tender of $300,000
56 percent of the amount of 91-day bills bid for at the low price was accepted
73 percent of the amount of 181-day bills bid for at the low price was accepted
OTAL 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
$
38J2367000
1,1*38,702,000
27,237,000
38,757,000
15,890,000
23,U30,000
219,038,000
21^,738,000
2l*,781*,O00
29,823,000
22,537,000
1*2,61*6,000
$1,91*5,868,000

mmjmmJkm*iamK••••<••»•

i ••"» m

—

*

•

—

Accepted
: Applied For
$
36723670OO 1 $
13,U95,OO0
708,602,000 «
1,026,28U,000
12,237,000 .
8,182,000
38,757,000 s
2l*,830,000
15,890,000 s
3,295,000
21,330,000 s
1*,090,000
11*2,279,000 s
92,378,000
20,788,000
8,022,000
22,011*,000 ;
6,771,000
29,823,000 i
21,599,000
18,537,000 ;
5,868,000
33,61*6,000 :
2l*,3l5,OOQ
$1,100,139,000 b/ $1,239,129,000

Accepted
$ 2,995,OOCT
1*61*,111,000
2,232,000
10,1*65,000
3,270,000
3,990,000
62,1*73,000
6,122,000
1*,171,000
20,01*9,000
5,368,000
15,350,000
$600,596,000 c/

b/ Includes $226,71*5,000 noncompetitive tenders accepted at the average price of 99*3^9
c/ Includes $55,351i,00Q noncompetitive tenders accepted at the average price of 98.626
1/ On a coupon issue of the same length and for the same amount invested, the return on
these bills would provide yields of 2*59$, for the 91-day bills, and 2»8l$, for the
181-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
c?mnnimS-iR« y ?? n LSf r ^^ t 9« the actual number of days in the period, with semiannual
compounding if more than one coupon period is involvedT
303

s\ r~ '~>

J K .-"
v> v.- i—

~ 16 improvements rather than complete construction or complete
rebuilding. But even the reforms of improvement are not
accomplished overnight. They require patient exploration
of detail and full public discussion of the issues. Our
ultimate goal is the possession of a tax system that
constantly and truly works in the national interest.

S„/ **> '^

- 15 simplicity, contribution to economic growth. The main thrust
centers on the income tax. It does not call for any marked
alteration in the composition of the Federal tax structure -there is no additional tax to be added -- no startling new
tax to sweep across the horizon. There are, of course, other
facets that one could spell out. The estate and gift tax
demands attention. And we will probably find the economists
doing some hard thinking in the exploration of the proposal
of the Commission on Money and Credit for flexibility in
the cyclical application of the income tax through temporary
increases or decreases in rates. I say hard thinking,
because all the possible courses of governmental action and
the formulation of the standards to govern that action have
to be fully and realistically analyzed. And operational
flexibility in the counter-cyclical adjustment of tax rates
can certainly come no faster than flexibility in thinking
about tax policy in relation to cyclical changes in the
economy.
But in the end, the task of tax reform centers on the
Federal income tax. We Americans are fortunate that our tax
system is fundamentally sound and the task is one of constant

v«/ \J "r

-

14 -

elimination of undue emphasis on salvage values by disregard
of any salvage value below 10 percent of cost. We are hopeful
that our present studies will disclose other measures. Certainly, an item so important to the measurement of taxable
income as is depreciation should be kept as realistic and as
simple of application as is possible, consistent with that
task of measurement. I might add that in our studies we are
taking careful recognition of the new pathways which you in
Canada have been charting in this area of depreciation.
The investment credit is, in the form pending in Congress
a credit against tax -- that is, a reduction in tax -- equal
to 8 percent of the amount spent on investment in machinery
and equipment. The entire cost of the asset may still be
depreciated in the regular way. The purpose of this provision is to encourage an increase in investment, yet not distur
the depreciation deduction as a measure of income. Moreover,
this form of incentive achieves a greater impact on investment
than would devices turning on an acceleration of depreciation.
In fact, the 8 percent credit is equivalent in general as an
incentive to a 40 percent initial write-off.
These are the major factors that stimulate the varied
voices calling for tax reform in the United States: fairness,

- 13 embody the view that the tax structure can contribute in a
positive fashion to economic growth? The Kennedy Administration believes that the tax structure can contribute in
an affirmative way to economic growth through promoting
increased investment by business in machinery and equipment.
We believe that the resulting modernization and expansion of
our productive capacity will help us achieve a more vigorous
economy.
The Presidentfs program has two major means to this end:
depreciation reform and the investment credit. The first
involves adjustment of the existing standards suggested by

the Internal Revenue Service for depreciable lives of property
to take into account the increasing obsolescence and need for
more rapid replacement of machinery created by rapidly changing technology. The President's recent announcement of a
40 percent reduction in the guidelines for depreciable lives
of textile machinery is the first step. We are currently
re-examining depreciation rates in all industries.
We are also considering how far and in what ways we can
achieve greater simplification in the application of the
depreciation deduction. One pending measure involves the

*") r- r~.
••>

""\ f'x

\^ \J '>>

- 12 sales taxes as revenue sources for State and local governments. Hence, the Federal income tax must itself be broadly
based, must be capable of supporting the expenditures
required of Government, and -- in setting a progressive
rate structure that establishes vertical equity, or fairness as among income levels -- must recognize the redistributive effects achieved through those very benefits that come
from government expenditures.
The President has directed that these intertwined facets
of equity and growth, these problems of special preferences
and rates, be re-examined as an integral part of basic tax
reform. The task is far from easy. Collective agreement on
the ultimate goals of tax reform does not guarantee collective
agreement on the details of the changes charted to reach those
goals. The pressures of history, the complex range of the
income tax, the pulls and tugs of competing claims, the
confusion between debating points and real issues, the inevitable limitations upon present information and future forecast
all these play their part.
Does the relationship between the tax structure and growt
end with the removal of obstacles? Or does the true tax refor

~" K /

- 11 and discriminatory. They influence individual business
decisions, with the result that the tax system distorts the
workings of our free enterprise economy and produces a misallocation of resources. Our present system places a premium
.on tax planning and tax avoidance. The work of many talented
lawyers and accountants is disproportionately diverted to
this purpose, with a resultant loss to the community.
The equity and growth aspects of tax reform thus join
together and reinforce each other. Their conjunction also
emphasizes that action to accomplish only one of these facets
of tax reform would not achieve our full purpose. Improved
equity and the elimination of preferences require a reexamination of the rates of tax, especially in the middle and
upper brackets. A reduction in tax rates without the elimination of preferences would leave the income tax still burdened
with inequity and the resentment that comes with unfairness.

The broader tax base that would come with greater equity would
also make possible a re-examination of the rate structure.
Any such re-examination must, of course, be conducted within
the constraints imposed upon our Federal government, which
cannot levy a property tax and which now leaves broad-based

V- W v_-

- 10 increased public expenditures required for better public
services, together with national security demands, can
fully and readily be met if we can achieve our full potential
in economic growth.
In a country that places great stress on economic growtht
all institutions and policies will be under the closest
scrutiny in relation to that objective.

In the United States,

therefore, we are asking whether our tax system contributes to
growth --or whether it places obstacles in the path of growth,
Are the dollars it transfers from private hands to meet public
needs obtained in a manner that places as few obstacles as
possible in the way of private initiative -- which holds the
real key to growth?
It can be contended that the structure of our income tax •
a tax base narrowed by exceptions, exclusions, and special
preferences which make it necessary to impose a rate structure
that begins at a high level and rises steeply — produces tax
rates that have adverse effects on growth. Moreover, apart
from their effect on the steepness of the rates, the special
provisions can also impede our growth in other ways.

They

differentiate among taxpayers in ways that are often arbitrary

V^

*~>

^

. 9-

There is another aspect of tax reform in the United
States that is directly related to our over-all economic
strength and the well-being of our people: There is acute
dissatisfaction in the United States with our present rate
of economic growth. When we compare present performance -either with periods in our past or with the current achievements of other countries --we see that our economy is
operating considerably below its potential for real growth.
We know that economic growth requires a greater investment
in education and in health, in transportation and urban
redevelopment, and in the public services that are necessary
to the enjoyment of higher levels of consumption. We know
that quantity and quality are both important in meeting these
needs for public investment. We know that business expenditures on plant and equipment are too low in relation to our
economic goals, and that the rate of modernization of our
industrial machine must be increased if we are to compete
successfully with foreign producers both at home and abroad.
We know that the rate of capital formation must be increased
if we are to obtain the needed increases in productivity that
lie at the heart of economic growth. We also know that the

- 8masters of our paperwork and information, so that we can
make resourceful use of vast quantities of data. In this
connection, we have benefitted greatly from many helpful
talks with your administrators who are also bringing the
miracle of electronics to tax administration. The second,
better audit methods, will enable us to concentrate our audit
efforts on the types of cases which demand careful examination. Over the next decade, imaginative use of these new
tools can bring about a revolutionary change in tax administration and compliance.
Simplicity is also a part of tax reform. It is related
to the objective of fairness since inequities and preferences
usually mean complexities. The borderlines of the preference
must be delineated and all too often this border marking will
involve complex rule upon rule. The requirement of simplicity
also operates as a gloss upon fairness, warning us that each
variation in status or make up of income and expense cannot

demand special recognition in the measurement of taxable incor
and the tax. This is especially so as respects matters that
will enter into the computations of the average person and
thus will appear on the tax form used by most people.

_ 7Alongside the unfairness of substantive inequities is
the unfairness that results from noncompliance. While the
vast majority of Americans pay their taxes in full, there is
still more noncompliance than we can tolerate in a democratic
society. This is serious for, if through ignorance, carelessness, or downright dishonesty, some people avoid their
share of the tax, that share must be picked up by others.
A case in point is lack of full compliance with the tax on
dividends and interest, with a consequent loss of an estimated
one billion a year in revenue. President Kennedy's recommendation for withholding on dividends and interest is aimed at
correcting this situation. Parenthetically, I should make

it quite clear that withholding is neither designed to increase

the existing tax on dividends and interest, nor to impose a tax
on them for the first time.
While withholding at the source is a highly effective way
of collecting taxes on items as wages, salaries, dividends and

interest, different methods are needed in other areas to ensure
compliance. Our Internal Revenue Service is proceeding on two

broad fronts -- automatic data processing and quality auditing.
The first, automatic data processing, will enable us to remain

- 6creature of the tax system, and the time has come
when our tax laws should cease their encouragement
of luxury spending as a charge on the Federal
Treasury. The slogan — 'It's deductible* -- should
pass from our scene."
Growing concern with equity in the United States is not
limited to the average taxpayer living on a wage or salary
who reads about expense accounts, or who has a hazy, but
correct, impression that there are a lot of others reducing
their taxes through preferential provisions. The professional
man in the United States is disturbed by his inescapable tax
burden when he compares himself with the executive favored
by stock options, generous pensions, and other fringe benefits.
The business man or executive in turn is always wondering
whether his tax advisors have obtained for him the latest
thing in capital gain deals,or real estate shelters, or life
insurance tax packages, or foreign tax havens. Proper tax

planning in our complicated society is sensible and necessary but proper planning is far removed from the frantic chase for
the latest and hottest tax deal and gimmick. I can state that
our responsible tax bar in the United States — lawyers and
accountants alike — fully shares this view.

1Q1
- 5 is, in the end, really an issue of tax morality. The average
taxpayer will take a hard and resentful look at his tax bill
if he knows that some individuals are able to charge off
personal pleasures -- a yachting or hunting weekend, a night
club party, a trip to Florida -- through the device of the
deductible entertainment expense.

I doubt — and I believe

many businessmen will agree with me -- whether anything does
more damage to the public's image of business than expense
account living.

The President put it in these words':

"In recent years widespread abuses have developed
through the use of the expense account.

Too many firms

and individuals have devised means of deducting too
many personal living expenses as business expenses,
thereby charging a large part of their cost to the
Federal Government.

Indeed, expense account living

has become a byword in the American scene.
fr

This is a matter of national concern, affecting

not only our public revenues, our sense of fairness,
and our respect for the tax system, but our moral and
business practices as well.

This widespread distortion

of our business and social structure is largely a

1CJ
'w W UT

- 4 -

this is not the case, is there nevertheless a real and compelling national interest to be served by departing from our test
of fairness and deliberately treating the same incomes differently?
President Kennedy's new tax program reflects our concern
with equity and fairness. In his Message to Congress on
Taxation, soon after taking office, he recommended changes in
the treatment of entertainment expenses, dividend income, sales
of depreciable property, certain foreign tax haven operations,
and the taxation of mutual organizations now taxed less heavily
than regular business corporations. In each of these cases the
President said that the existing treatment is inequitable and
cannot be justified.
The stress placed on equity in the President's tax program
reflects a basic concern over our peoples' attitude toward the
income tax. It is a recognition that a matter of basic moralit)
is involved. In democracies such as ours, the people will willingly pay a tax bill they may regard as heavy if they believe
that everyone else is paying his fair share. But the feeling
is growing that some do escape their fair share, and the
experts know that this feeling is justified. This is why a
matter such as the unlimited deduction of entertainment expenses

- 3the incomes the same if one individual has expenses, such as
medical bills, or a casualty loss, or charitable contributions
that are not borne by another? Are the incomes to be taxed
the same if one is married and the other single --if one is
elderly and the other young — if one has more children --if
one is living abroad and the other is not? The cynical may
conclude that there is no sameness, but only infinite variation -- hence, the test of equity is meaningless. But I
submit that such a view would commit us to income tax anarchy.
The standard of equity or fairness must, of course, be applied
in the light of infinite variations. But the standard of
fairness is real and compelling. It must be continuously
borne in mind as a standard against which a tax policymaker,
legislative or executive, must judge the validity of a claim
for a structural change involving the differential treatment
of a particular type of income or expense. Essentially, he
must recognize that a difference in status is being claimed,
and he must put the claimant to proof of two sorts: First,
is the item one that should properly be recognized as an
essential in measuring what we call income when we say that
the same incomes should be taxed the same amount? Second, if

woc
- 2 -

principal source of State and local revenue; it is the
income tax which is the mainstay of the Federal Government.
Further, it is the income tax which directly affects so many
of our people. We receive 60 million individual income tax
returns covering about 100 million adults, out of an adult
population of 108 million.
Under these circumstances, a first goal of United States
tax policy must be that of maintaining the income tax in good
working condition. But here many feel that there are signs
of strains and weakness in the tax. One significant aspect
relates to the equity of the tax under its present operation.
Most individuals, I believe, feel instinctively that if two
persons have the same income they should pay the same tax.
If one pays less, then isn't the tax unfair and lacking in
equity -- lacking in horizontal equity since we are talking
of individuals at the same income level? The sophisticated
may quickly point out that this simple and plausible standard
of fairness masks many points of ambiguity and, hence, difficulties of application. For example: Are the incomes the
same if the sources are different, and one individual has
income from capital, including capital gains, another from
employment, or natural resources, or a risky business? Are

TitHtADUltX DJEirHXlliVUCilNi

Washington
FOR RELEASE ON DEUVERY

^py
^° *

rylWjfc/ J 9 C

REMARKS BY STANLEY S. SURREY,
ASSISTANT SECRETARY OF THE TREASURY,
BEFORE THE CANADIAN TAX FOUNDATION,
MONTREAL, CANADA,
^NOVEMBER 21, 1961, 8
ml&T)
ASPECTS OF TAX POLICY IN THE UNITED STATES
You are very kind to invite me to discuss some aspects
of United States tax policy. If you read the financial or
editorial pages of our newspapers, you will come across
constant references to the need for tax reform. Now, I know
that many regard we Americans as compulsive reformers. Be
that as it may, this interest in tax reform in the United
States compels attention. At the very least, it invites the
inquiry: What is desired in the way of tax reform?
In our search for the answer to this question, a few
statistics about the United States may be helpful: Under
our system, 80 percent of our Federal tax dollars are raised

by income tax. If we examine current Federal receipts (Fiscal

year 1962), we find that $45 billion is obtained from individ
uals and $22 billion from corporations — a total of $67
billion from the income tax. The Federal Government has no
property tax and its excise taxes are limited -- alcohol,
tobacco, and gasoline account for about 60 percent of the
excise taxes. The property tax and excise taxes are the

M- ~3 V w /

TREASURY DEPARTMENT
Washington

OQQ

FOR RELEASE ON DELIVERY
November 21, 196l
REMARKS BY STANLEY S. SURREY
ASSISTANT SECRETARY OF THE TREASURY
BEFORE THE CANADIAN TAX FOUNDATION
MONTREAL, CANADA
TUESDAY, NOVEMBER 21, I96I
8:00 P. M., EST.
ASPECTS OF TAX POLICY IN THE UNITED STATES
You are very kind to invite me to discuss some aspects of United
States tax policy. If you read the financial or editorial pages of
our newspapers, you will come across constant references to the need
for tax reform. Now, I know that many regard we Americans as
compulsive reformers. Be that as it may, this interest in tax reform
in the United States compels attention. At the very least, it invites
the inquiry: What is desired in the way of tax reform?
In our search for the answer to this question, a few statistics
about the United States may be helpful: Under our system, 80 percent
of our Federal tax dollars are raised by income tax. If we examine
current Federal receipts (Fiscal year 1962), we find that $45 billion
is obtained from individuals and $22 billion from corporations — a
total of $67 billion from the income tax. The Federal Government has
no property tax and its excise taxes are limited — alcohol, tobacco,
and gasoline account for about 60 percent of the excise taxes. The
property tax and excise taxes are the principal source of State and
local revenue; it Is the income tax which is the mainstay of the
Federal Government. Further, it is the income tax which directly
affects so many of our people. We receive 60 million individual
income tax returns covering about 100 million adults, out of an adult
population of 108 million.
Under these circumstances, a first goal of United States tax
policy must be that of maintaining the income tax in good working
condition. But here many feel that there are signs of strains and
weakness in the tax. One significant aspect relates to the equity of
the tax under its present operation. Most individuals, I believe,
feel instinctively that if two persons have the same income they
should pay the same tax. If one pays less, then isn't the tax unfair
and lacking in equity — lacking in horizontal equity since we are
talking of individuals at the same income level? The sophisticated
may quickly point out that this simple and plausible standard of
D-304
fairness masks many points of ambiguity and, hence, difficulties of
capital
are
application.
different,
gains,For
another
andexample:
one from
Individual
Are
employment,
the
has
incomes
income
or natural
the
from
same
capital,
resources,
if the including
sources
or a

- 2 -

1QQ
W >U w

risky business? Are the Incomes the same if one Individual has
expenses, such as medical bills, or a casualty loss, or charitable
contributions they are not borne by another? Are the incomes to be
taxed the same if one is married and the other single — if one is
elderly and the other young —• if one has more children — if one is
living abroad and the other Is not? The cynical may conclude that
there Is no sameness, but only infinite variation -- hence, the test
of equity is meaningless. But I submit that such a view would
commit us to income tax anarchy. The standard of equity or fairness
must, of course, be applied in the light of infinite variations. But
the standard of fairness is real and compelling. It must be
continuously borne in mind as a standard against which a tax policymaker, legislative or executive, must judge the validity of a claim
for a structural change Involving the differential treatment of a
particular type of income or expense. Essentially, he must recognize
that a difference in status is being claimed, and he must put the
claimant to proof of two sorts: First, is the item one that should
properly be recognized as an essential in measuring what we call income
when we say that the same incomes should be taxed the same amount?
Second, if this is not the case, is there nevertheless a real and
compelling national interest to be served by departing from our test
of fairness and deliberately treating the same incomes differently?
President Kennedy's new tax program reflects our concern with
equity and fairness. In his Message to Congress on Taxation, soon
after taking office, he recommended changes in the treatment of
entertainment expenses, dividend income, sales of depreciable property,
certain foreign tax haven operations, and the taxation of mutual
organizations now taxed less heavily than regular business corporations,
In each of these cases the President said that the existing treatment
is inequitable and cannot be justified.
The stress placed on equity in the President's tax program
reflects a basic concern over our peoples' attitude toward the income
tax. It is a recognition that a matter of basic morality is
involved. In democracies such as ours, the people will willingly
pay a tax bill they may regard as heavy if they believe that everyone
else is paying his fair share. But the feeling is growing that some
do escape their fair share, and the experts know that this feeling is
justified. This is why a matter such as the unlimited deduction of
entertainment expenses is, in the end, really an issue of tax
morality. The average taxpayer will take a hard and resentful look
at his tax bill if he knows that some Individuals are able to charge
off personal pleasures — a yachting or hunting weekend, a night
club party, a trip to Florida — through the device of the deductible
entertainment expense. I doubt — and I believe many businessmen will
agree with me — whether anything does more damage to the public's
image
of words:
business
than
expense
account
living.
TheToo
President
put it
"In
in these
recent
firms
through
too
years
many
and
the
widespread
personal
individuals
use
ofliving
the
abuses
have
expense
expenses
devised
have
account.
developed
as
means
business
of
deducting
many
expenses,

- 3thereby charging a large part of their cost to the
Federal Government. Indeed, expense account living
has become a byword in the American scene.
"This is a matter of national concern, affecting
not only our public revenues, our sense of fairness,
and our respect for the tax system, but our moral and
business practices as well. This widespread distortion.
of our business and social structure is largely a
creature of the tax system, and the time has come
when our tax laws should cease their encouragement
of luxury spending as a charge on the Federal
Treasury. The slogan — 'It's deductible' — should
pass from our scene."
Growing concern with equity in the United States is not limited
to the average taxpayer living on a wage or salary who reads about
expense accounts, or who has a hazy, but correct, impression that
there are a lot of others reducing their taxes through preferential
provisions. The professional man in the United States is disturbed
by his inescapable tax burden when he compares himself with the
executive favored by stock options, generous pensions, and other
fringe benefits. The business man or executive in turn is always
wondering whether his tax advisors have obtained for him the latest
thing in capital gain deals, or real estate shelters, or life
insurance tax packages, or foreign tax havens. Proper tax planning
in our complicated society is sensible and necessary — but proper
planning is far removed from the frantic chase for the latest and
hottest tax deal and gimmick. I can state that our responsible tax
bar in the United States -- lawyers and accountants alike —• fully
shares this view.
Alongside the unfairness of substantive inequities is the
unfairness that results from noncompliance. While the vast majority
of Americans pay their taxes in full, there is still more noncompliance than we can tolerate in a democratic society. This is
serious for, if through ignorance, carelessness, or downright dishonesty, some people avoid their share of the tax, that share must
be picked up by others. A case in point is lack of full compliance
with the tax on dividends and Interest, with a consequent loss of an
estimated one billion a year in revenue. President Kennedy's
recommendation for withholding on dividends and interest is aimed at
correcting this situation. Parenthetically, I should make it quite
clear that withholding Is neither designed to increase the existing
tax on dividends and Interest, nor to impose a tax on them for the
first time.
While withholding at the source is a highly effective way
of collecting taxes on items as wages, salaries, dividends and
compliance.
interest, different
Our Internal
methods
Revenue
are needed
Service
in other
is proceeding
areas toon
ensure
two broad

/~1 ~J I

v*. ! a.

-Affronts — automatic data processing and quality auditing. The first,
automatic data processing, will enable us to remain masters of our
paperwork and Information, so that we can make resourceful use of
vast quantities of data. In this connection, we have benefitted
greatly from many helpful talks with your administrators who are also
bringing the miracle of electronics to tax administration. The
second, better audit methods, will enable us to concentrate our audit
efforts on the types of cases which demand careful examination. Over
the next decade, imaginative use of these new tools can bring about
a revolutionary change in tax administration and compliance.
Simplicity is also a part of tax reform. It is related to the
objective of fairness since inequities and preferences usually mean
complexities. The borderlines of the preference must be delineated
and all too often this border marking will involve complex rule upon
rule. The requirement of simplicity also operates as a gloss upon
fairness, warning us that each variation in status or make up of
income and expense cannot demand special recognition in the measurement
of taxable income and the tax. This is especially so as respects
matters that will enter into the computations of the average person
and thus will appear on the tax form used by most people.
There is another aspect of tax reform in the United States that
is directly related to our over-all economic strength and the wellbeing of our people: There is acute dissatisfaction In the United
States with our present rate of economic growth. When we compare
present performance — either with periods in our past or with the
current achievements of other countries -- we see that our economy
is operating considerably below its potential for real growth. We
know that economic growth requires a greater investment in education
and in health, in transportation and urban redevelopment, and in the
public services that are necessary to the enjoyment of higher levels
of consumption. We know that quantity and quality are both important
in meeting these needs for public investment. We know that business
expenditures on plant and equipment are too low in relation to our
economic goals, and that the rate of modernization of our industrial
machine must be increased if we are to compete successfully with
foreign producers both at home and abroad. We know that the rate of
capital formation must be Increased If we are to obtain the needed
increases in productivity that lie at the heart of economic growth.
We also know that the Increased public expenditures required for
better public services, together with national security demands, can
fully and readily be met If we can achieve our full potential in
economic growth.
In a country that places great stress on economic growth, all
institutions and policies will be under the closest scrutiny In
relation to that objective. In the United States, therefore, we are
asking
whether
our
tax
system
contributes
to growth
— manner
orit
whether
from
places
private
obstacles
hands
into
the
meet
path
public
of
growth.
needs obtained
Are
the dollars
in a
transfers
that It

;

;i$

- 5-

--• i

J

places as few obstacles as possible in the way of private Initiative
which holds the real key to growth?

—

It can be contended that the structure of our income tax —
a tax base narrowed by exceptions, exclusions, and special preferences
which make it necessary to impose a rate structure that begins at a
high level and rises steeply — produces tax rates that have adverse
effects on growth. Moreover, apart from their effect on the steepness
of the rates, the special provisions can also impede our growth in
other ways. They differentiate among taxpayers in ways that are often
arbitrary and discriminatory. They influence individual business
decisions, with the result that the tax system distorts the workings
of our free enterprise economy and produces a misallocation of
resources. Our present system places a premium on tax planning and
tax avoidance. The work of many talented lawyers and accountants is
disproportionately diverted to this purpose, with a resultant loss
to the community.
The equity and growth aspects of tax reform .thus join together
and reinforce each other. Their conjunction also emphasizes that
action to accomplish only one of these facets of tax reform would not
achieve our full purpose. Improved equity and the elimination of
preferences require a re-examination of the rates of tax, especially
in the middle and upper brackets. A reduction in tax rates without
the elimination of preferences would leave the income tax still
burdened with inequity and the resentment that comes with unfairness.
The broader tax base that would come with greater equity would also
make possible a re-examination of the rate structure. Any such reexamination must, of course, be conducted within the constraints
imposed upon our Federal government, which cannot levy a property
tax and which now leaves broad-based sales taxes as revenue sources
for State and local governments. Hence, the Federal income tax must
itself be broadly based., must be capable of supporting the expenditures
required of Government, and — in setting a progressive rate structure
that establishes vertical equity, or fairness as among income levels —
must recognize the redistributive effects achieved through those very
benefits that come from government expenditures.
The President has directed that these intertwined facets of
equity and growth, these problems of special preferences and rates,
be re-examined as an integral part of basic tax reform. The task is
far from easy. Collective agreement on the ultimate goals of tax
reform does not guarantee collective agreement on the details of the
changes charted to reach those goals. The pressures of history, the
complex range of the income tax, the pulls and tugs of competing
claims, the confusion between debating points and real Issues, the
inevitable limitations upon present information and future forecasts —
all these play their part.
Does
embody
end with
the
the
the
relationship
view
removal
that the
of obstacles?
between
tax structure
the Or
tax
does
canstructure
contribute
the trueand
tax
in growth
reform
a positive

- 6fashion to economic growth? The Kennedy Administration believes that
the tax structure can contribute in an affirmative way to economic
growth through promoting increased investment by business in machinery
and equipment. We believe that the resulting modernization and
expansion of our productive capacity will help us achieve a more
vigorous economy.
The President's program has two major means to this end:
depreciation reform and the investment credit. The first involves
adjustment of the existing standards suggested by the Internal
Revenue Service for depreciable lives of property to take Into
account the increasing obsolescence and need for more rapid replacement
of machinery created by rapidly changing technology. The President's
recent announcement of a 40 percent reduction in the guidelines for
depreciable lives of textile machinery is the first step. We are
currently re-examining depreciation rates in all industries.
We are also considering how far and in what ways we can achieve
greater simplification in the application of the depreciation
deduction. One pending measure involves the elimination of undue
emphasis on salvage values by disregard of any salvage value below
10 percent of cost. We are hopeful that our present studies will
disclose other measures. Certainly, an item so important to the
measurement of taxable income as is depreciation should be kept as
realistic and as simple of application as is possible, consistent
with that task of measurement. I might add that in our studies we
are taking careful recognition of the new pathways which you in
Canada have been charting in this area of depreciation.
The investment credit is, in the form pending in Congress, a
credit against tax — that is, a reduction In tax — equal to 8 percent
of the amount spent on investment in machinery and equipment. The
entire cost of the asset may still be depreciated in the regular way.
The purpose of this provision Is to encourage an increase in investment, yet not disturb the depreciation deduction as a measure of
income. Moreover, this form of incentive achieves a greater impact
on investment than would devices turning on an acceleration of
depreciation. In fact, the 8 percent credit Is equivalent In general
as an incentive to a 40 percent initial write-off.
These are the major factors that stimulate the varied voices
calling for tax reform in the United States: fairness, simplicity,
contribution to economic growth. The main thrust centers on the
income tax. It does not call for any marked alteration in the
composition of the Federal tax structure -- there is no additional
tax to be added -- no startling new tax to sweep across the horizon.
There are, of course, other facets that one could spell out. The
estate and gift tax demands attention. And we will probably find
the economists doing some hard thinking in the exploration of the
proposal of the Commission on Money and Credit for flexibility in

?74

- 7-

the cyclical application of the income tax through temporary increas
or decreases in rates. I say hard thinking, because all the possible
courses of governmental action and the formulation of the standards
to govern that action have to be fully and realistically analyzed.
And operational flexibility in the counter-cyclical adjustment of tax
rates can certainly come no faster than flexibility in thinking
about tax policy in relation to cyclical changes in the economy.
But in the end, the task of tax reform centers on the Federal
income tax. We Americans are fortunate that our tax system is
fundamentally sound and the task is one of constant improvement,
rather than complete construction or complete rebuilding. But even
the reforms of improvement are not accomplished overnight. They
require patient exploration of detail and full public discussion of
the issues. Our ultimate goal is the possession of a tax system that
constantly and truly works in the national interest.

oOo

^"> "7 f~

L*.

the third quarter of 1961, there was a net sale of

monetary gold by the( U.Jp^

amounting to $138*4- X p K million*

The first quarter shoved a net sale of $366.0, while <4M&x in the second

quarter there was a net purchase of monetary gold by this country of
$178*8 million*
e Treasury's quarterly report* made public today*

summarizes monetary gold transactions with foreign governments* central
banks and international institutions for the third quarter of 1961*

•,wW.^5^:>£)(Vi - ' - ^ V r - y ^ T . - - ^ - ^ . .

«T-e-.-sr.:-jg8gP?s838»>i»

hese transactions brought to 1325.6 million the net sale of monetary
J
gold in the first nine months of

this year.

\
-

yyP"*®
.gs^flsn***"

"a88S!!^*3i^^

frjrtS^^

$6

(table on revdrse side)

*

*

*

"

*

•

UNITED STATES NET MONETARY GOLD TRANSACTIONS WITH
FOREIGN COUNTRIES AND INTERNATIONAL INSTITUTIONS
January 1, 1961 - September 30, 1961
(in millions of dollars at $35 per fine troy ounce)
Negative fi gures represent net sales by the
States;; positive fiqures, net purchases

u nited
Country

First
Quarter
1961

Argentina
Belgium
BIS

-90.0

Chile
Costa Rica
Denmark

- 6.6

El Salvador
Germany (West)
International
Monetary Fund
Italy
Kuwa i t
Laos

—

-63.0

- 2.3
-35.0
+ 6.4

- 5.0

-22.5
+150.0

+100.0
- 9.8

—
- 1.9

- 5.0

Saudi Arabia
Spain
Switzerland

-10.0
-58.2
-54.9

Total

Third
Quarter
1961

-23.0

Lebanon
Netherlands
Peru

Turkey
United Kingdom
All Other

Second
Quarter
1961

---

-21.0
-24.9

-25.0
-20.0

-12.5
-58.0
-44.8

-150.0
- 1.0

- 2.5
+224.6
- 2.8

-54.6
- 2.3

-366.0

+ 178.8

-138.4

0 7r»

TREASURY DEPARTMENT

°

WASHINGTON, D.C.
November 21, 1961

FOR IMMEDIATE RELEASE

UNITED STAfES FOREIGN GOLD TRANSACTIONS
FOR THIRD QUARTER OF 1961
During the third quarter of 1961, there was a
net sale of monetary gold by the United States amounting to $138.4 million. The first quarter showed a net
sale of $366.0 million, while in the second quarter
there was a net purchase of monetary gold by this
country of $178.8 million.
These transactions brought to $325.6 million the
net sale of monetary gold in the first nine months of
this year.
The Treasury's quarterly report, made public today,
summarizes monetary gold transactions with foreign governments, central banks and international institutions for
the third quarter of 1961. (table on reverse side)

0O0

D-305

TREASURY DEPARTMENT
WASHINGTON, D.C.
November 21, 1961

FOR IMMEDIATE RELEASE

UNITED STATES FOREIGN GOLD TRANSACTIONS
FOR THIRD QUARTER OF 1961
During the third quarter of 1961, there was a
net sale of monetary gold by the United States amounting to $138.4 million. The first quarter showed a net
sale of $366.0 million, while In the second quarter
there was a net purchase of monetary gold by this
country of $178.8 million.
These transactions brought to $325.6 million the
net sale of monetary gold in the first nine months of
this year.
The Treasury's quarterly report, made public today,
summarizes monetary gold transactions with foreign governments, central banks and international institutions for
the third quarter of 1961. (table on reverse side)

0O0

D-305

UNITED STATES NET MONETARY GOLD TRANSACTIONS WITH
FOREIGN COUNTRIES AND INTERNATIONAL INSTITUTIONS
January 1, 1961 - September 30, 1961
(in millions of dollars at $35 per fine troy ounce)
Negative fi gures represent net sales by the
Uinited States ; positive figures, net purchases
Country

Fi rst
Quarter
1961

Argentina
Belgium
BIS

-90.0

Chile
Costa Rica
Denmark

- 6.6

El Salvador
Germany (West)
International
Monetary Fund
Italy
Kuwa i t
Laos

—

-63.0

--- 2.3

-35.0
+ 6.4

- 5.0

-22.5
+150.0

+100.0
- 9.8

—
- 1.9

- 5.0

Saudi Arabia
Spain
Switzerland

-10.0
-58.2
-54.9

Total

Third
Quarter
1961

-23.0

Lebanon
Netherlands
Peru

Turkey
United Kingdom
All Other

Second
Quarter
1961

---

-21.0
-24.9

-25.0
-20.0

-12.5
-58.0
-44.8

-150.0
- 1.0

- 2.5
+224.6
- 2.8

-54.6
- 2.3

-366.0

+ 178.8

-138.4

<£+*-<**-

'4C*JL^

~ e^u>

* ^ f^+~+**

RELEASE A.M. NEWSPAPERS
Friday^ November 24? 1961
TT»TV

iimmAT TTMTT RESTORED ON SERIES H
TWENTT THO0SAM) ^ ^ % £ * £ g Z

BONDS

The Treasury today announced that after January 1, 1962,

up to $20,000 in Series H Savings Bonds may be purchased
annually by any one buyer. jic*-«ie-^ast-^caui~and^aJja^

^cfcasshr-the limit has been $ 1 0 , 0 0 0 ^ /

</

iAA^ w

^ £>U.

reduced from $20,000 to $10,000 on May 1, 1957, after

| ^ ^ ^

having been set at the higher figure in 1952. The new
ruling will not change the present limit of $10,000 on

E Bonds, face value.
Acting Secretary Robert V« Roosa said the current restoration
of the $20,000 purchase limitation on H bonds comes as a result of
the TreasuryTs four and a half yearsT experience with the lower
amount, and a growing demand by smaller institutional investors f<
a higher limit* Such investors - partnerships, corporations, pension funds, and others- have been eligible buyers of these secu-

L

rities only since 1958#

^ Records show that about 8 per cent of H bond cash sales are
made to investors other than individuals, while the figure is les,
than 2 per cent for E bonds* Thus, the demand for a higher purcha
limit primarily involved H bonds*

TREASURY DEPARTMENT
WASHINGTON, D.C.
November 22, 1961
RELEASE A.M. NEWSPAPERS
FRIDAY, NOVEMBER 24, 1961
TWENTY THOUSAND DOLLAR ANNUAL LIMIT RESTORED ON SERIES H
UNITED STATES SAVINGS BONDS
The Treasury today announced that after January 1, 1962, up
to $20,000 in Series H Savings Bonds may be purchased annually by
any one buyer. Since 1957* the limit has been $10,000.
The annual limit on both E and H Savings Bonds was reduced
from $20,000 to $10,000 on May 1, 1957. after having been set at
the higher figure in 1952. The new ruling will not change the
present limit of $10,000 on E Bonds, face value.
Acting Secretary Robert V. Roosa said the current restoration
of the $20,000 purchase limitation on H bonds comes as a result of
the Treasury's four and a half years' experience with the lower
amount, and a growing demand by smaller institutional investors
for a higher limit. Such investors — partnerships, corporations,
pension funds, and others — have been eligible buyers of these
securities only since 1958.
Interest is payable on these bonds semi-annually by check,
and amounts to an investment yield of 3-3/*$ if held for the
full 10-years until maturity.
Records show that about 8 per cent of H bond cash sales are
made to investors other than individuals, while the figure is
less than 2 per cent for E bonds. Thus, the demand for a higher
purchase limit primarily involved H bonds.
Purchases of Series H bonds are up by 14 per cent this year.
Cash sales for the first 10 months of 1961 were $703 million, as
compared with $616 million for the same period of i960.
0O0
>-306

the applicant banks in order that they m a y have opportunity to prepare
answer. The answers made by the applicant banks to the advisory
opinions will be made available to the three agencies as promptly as
possible in order to allow them to make reply. All of these documents
will be entered in the record of the public hearing and will thus be
available to the public at that time.
The Comptroller stated that the competitive factor is one of the
seven factors (six being banking factors) which he is required by the
so-called Bank Merger Act to consider in determining whether or not
the proposed merger meets the public interest test of that statute. Thus,
the Comptroller stated, under the statute no single factor is conclusive
or controlling in determining whether a proposed merger is in the public
interest.
The Comptroller expressed reg^ret that this hearing has been
scheduled at a relatively early date, but he stated that this proposed
merger has been pending in his office since May 15, 1961. Further pro-

tracted delay in the disposition of this matter is deemed not to be warrante
and not in the public interest, the Comptroller said.

* 1. The financial history and condition of each of the banks involved,
2. The adequacy of its capital structure,
3. Its future earnings prospects,
4, The general character of its management,
5. The convenience and needs of the community to be served,
6. Whether or not its corporate powers are consistent with the
purposes of the Act.

QP9
w w «-,

TREASURY DEPARTMENT
WASHINGTON, D.C.
November 21, 1961
FOR IMMEDIATE RELEASE
COMPTROLLER OP THE CURRENCY TO HOLD PUBLIC HEARING
ON PROPOSED MERGER OP FIRST NATIONAL CITY BANK OF
NEW YORK AND THE NATIONAL BANK OF WESTCHESTER, NEW YORK
The Comptroller of the Currency announced today that he had

ordered a public hearing on the application for approval of the propose

merger of the First National City Bank of New York and the National Ban
of Westchester, White Plains, New York. The hearing is scheduled for
10 a.m. Monday, December 4, at the United States Treasury, Washington,

D. C. The hearing will be on an informal basis and will be conducted by
the Comptroller.
The Board of Governors of the Federal Reserve System, The Federal

Deposit Insurance Corporation, and the Department of Justice, have been

advised of this action and invited to appear or to observe this procee
as each may be disposed. However, the Comptroller expressed the hope

that each of these agencies will feel free to participate in the proce

All other persons are invited to submit their views either by letter or
orally on the subject matter of the hearing.
The Comptroller stated that as a matter of fair play the advisory
opinions on the competitive aspect of the proposed merger required by
the Bank Merger Act to be submitted by the Board of Governors of the
Federal Reserve System, The Federal Deposit Insurance Corporation,
and the Department of Justice, will be made available immediately to

/-> o o

TREASURY DEPARTMENT °C
WASHINGTON, D.C.
November 21, 1961
FOR IMMEDIATE RELEASE
COMPTROLLER OP THE CURRENCY TO HOLD PUBLIC HEARING
ON PROPOSED MERGER OP FIRST NATIONAL CITY BANK OF
NEW YORK AND THE NATIONAL BANK OF WESTCHESTER, NEW YORK
The Comptroller of the Currency announced today that he had

ordered a public hearing on the application for approval of the propose

merger of the First National City Bank of New York and the National Ban
of Westchester, White Plains, New York. ' The hearing is scheduled for
10 a»m, Monday, December 4, at the United States Treasury, Washington,
D.C. The hearing will be on an informal basis and will be conducted by
the Comptroller.
The Board of Governors of the Federal Reserve System, The Federal

Deposit Insurance Corporation, and the Department of Justice, have been

advised of this action and invited to appear or to observe this proceed
as each may be disposed. However, the Comptroller expressed the hope

that each of these agencies will feel free to participate in the procee

All other persons are invited to submit their views either by letter or
orally on the subject matter of the hearing.
The Comptroller stated that as a matter of fair play the advisory
opinions on the competitive aspect of the proposed merger required by
the Bank Merger Act to be submitted by the Board of Governors of the
Federal Reserve System, The Federal Deposit Insurance Corporation,
and the Department of Justice, will be made available immediately to

the applicant banks in order that they m a y have opportunity to prepare
answer. The answers made by the applicant banks to the advisory
opinions will be made available to the three agencies as promptly as
possible in order to allow them to make reply. All of these documents
will be entered in the record of the public hearing and will thus be
available to the public at that time.
The Comptroller stated that the competitive factor is one of the
seven factors (six being banking factors) which he is required by the
so-called Bank Merger Act to consider in determining whether or not
the proposed merger meets the public interest test of that statute. Thus,
the Comptroller stated, under the statute no single factor is conclusive
or controlling in determining whether a proposed merger is in the public
interest.
The Comptroller expressed regret that this hearing has been
scheduled at a relatively early date, but he stated that this proposed
merger has been pending in his office since May 15, 1961. Further pro-

tracted delay in the disposition of this matter is deemed not to be warrante
and not in the public interest, the Comptroller said.

* 1. The financial history and condition of each of the banks involved,
2. The adequacy of its capital structure,
3, Its future earnings prospects,
4. The general character of its management,
5. The convenience and needs of the community to be served,
6. Whether or not its corporate powers are consistent with the
purposes of the Act.

H H

- 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 sub

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 Treasur

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

- 2-

smmwrnmsB 386'

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

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

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 additi
bills dated August 51, 1961 , ( 91 days remaining until maturity date on
March 1, 1962 _) and noncompetitive tenders for $ 100,000 or less for the
xxb&$t
"
3£28$x
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 r

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

made or completed at the Federal Reserve Bank on November 50, 1961 y in cash or

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

ing November 50, 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 exeaa&loxk* as such, and l

TREASURY DEPARTMENT
Washington
FOR IMMEDIATE RELEASE E£g&XI8H3q£ November 22, 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

November 50, 1961 , in the amount

xpEjc
of $1,700,688,000

, as follows:

m
91 -day bills (to maturity date) to be issued November 50, 1961 ,
in the amount of $ 1,100,000,000 , or thereabouts, represent-

xp£
ing an additional amount of bills dated

August 51, 1961

,

and to mature March 1, 1962 , originally issued in the
amount of $ 600,586,000 , the additional and original bills
to be freely interchangeable.
182 -day bills, for $ 600,000,000 , or thereabouts, to be dated
November 50, 1961 y and to mature May 51. 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 fa

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

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 clos

hour, one-thirty o'clock p.m., Eastern Standard time, Monday. November ?7. i?

Six

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 tender

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

TREASURY DEPARTMENT

389

WASHINGTON, D.C.
November 22, 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 November 30,1961, in the amount of
$1,700,688,000, as follows:
91-day bills (to maturity date) to be issued November 30, 1961
in the amount of $1,100,000,000, or thereabouts, representing an
additional amount of bills dated August 31,1961, and to
mature March 1, 1962,
originally issued in the amount of
$600,386,000,
the additional and original bills to be freely
interchangeable.
182-day bills, for $ 600,000,000, or thereabouts, to be dated
November 30, 196l,and to mature May 31, 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 Standard
time, Monday, November 27, 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-308

- 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
August 31, 1961
(91-days remaining until maturity date on
March 1, 1962)
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 November 30, 1961,
in cash or other immediately available funds or in a like face
amount of Treasury bills maturing November 30, 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^h (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
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.

TREASURY DEPARTMENT

389

WASHINGTON, D.C.
November 22, 1961
IMMEDIATE RELEASE
SPECIAL NOTICE TO TRUSTEES AND INSTITUTIONAL HOLDERS OF SERIES F & G SAVINGS
BONDS MATURING IN 1962 DESIRING TO EXCHANGE THEIR HOLDINGS FOR
3-7/8$ TREASURY BONDS OF 1968

The Treasury Department announced today that it has received information from
banking institutions and other sources that due to the holiday this week many holders
of the Series F and G savings bonds which mature in 1962 and which may be exchanged
for 3-7/8°/> Treasury Bonds of 1968 will not be able to complete all the detail requirements necessary to enable them to file their subscriptions by November 24, 1961,
the closing date for the receipt of subscriptions from all classes of subscribers
other than individuals. (The closing date for the receipt of subscriptions from
individuals is November 30, 1961.) In many cases it is necessary for holders of
Series F and G bonds to obtain signatures of trustees or other officials, or to
await meetings of trustees or committees before the exchange can be consummated.
In view of this situation, the Treasury -will permit these holders of Series F
and G savings bonds who are unavoidably delayed in completing their subscriptions,
to file with Federal Reserve Banks and Branches or the Treasurer of the United States,
or place in the mail before midnight November 24, 1961, a letter of intent stating
that they propose to enter an exchange subscription and giving the reasons which
account for their inability to complete their subscription and delivery of the Series
F and G savings bonds to be exchanged by that date. In such cases the subscribers
will have until the close of business November 30, 1961, to complete their
subscriptions.
The Treasury announced on November 17, 1961, that holders of Series F and G
savings bonds which mature in 1962 may exchange them at their face amount, with
certain interest and other adjustments, as of December 15, 1961, for the 3-7/8$
Treasury Bonds dated June 23, 1960, maturing May 15, 1968, to be issued at a price
of 99.50$, and that the subscription books would be open for the receipt of subscriptions from all classes of subscribers from November 20 through November 24,
1961, and in addition, subscriptions could be submitted by Individuals through
November 30, 1961.

0O0

D-309

TREASURY DEPARTMENT
W A S H I N G T O N . D.C.
November 22*, 1961

FOR IMMEDIA3E RELEASE
TREASURY. DECISION ON MOLASSES
UNDER THE ANTIDUMPING ACT

The Treasury Departiaent has determined that molasses from
Cuba 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 molasses from Cuba without regard to any
question of dumping. Appraising officers, however, are being
instructed to report future importations to the Bureau of
Customs and if any appear to be at less than fair value the
case will be reopened.
The dollar value of imports of molasses from Cuba received
during the first 7 months of 1961 was approximately $1,700,000.

November 2k9 1961

FOR IMMEDIATE RELEASE
TREASURY DECISION ON MOLASSES
UNDER THE ANTIDUMPING ACT

The Treasury Department has determined that molasses from
Cuba 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 molasses from Cuba without regard to any
question of dumping. Appraising officers, however, are being
instructed to report future importations to the Bureau of
Customs and if any appear to be at less than fair value the
case will be reopened.
The dollar value of imports of molasses from Cuba received
during the first 7 months of 1961 was approximately $1,700,000,

t?» IfttL
rf ioi^i^r 38 f 1 ^ 1 . ,

nt&auts m twmmtm

mmu

mu* camaam

ft* Treasury Bapartaeat ft^o^need laat e*asi&| tbat the tefldere for two seriee g
ftaaawr @ i H a f mm series to ®# an a^liittosal iaa®e of %m bills dated *agi»*t H # 1*
t M tb« oilier series to be dated §§®V$SI&$F 30, 1*>1, which «*?e offered on Moraaatf Ut
mm
epeoad at * ] * Feoerai aaa@r*a Baisa* on member 27. tenders vera invito fey
U,l^) 5 0^,aOCJ, or thereabouts, of 91*dfev bills an£ for 1600,000,000, or
!S2-d»y bills. faa details of tlia tvo aeriea are as followt
91-day Ttaaatar/ bill*
MUBA m AGGERO
elUa
cmmsmzw BIBS*
*atag*fig - y #f im
Af^fojr* ISa^El.'**

a.

Urn

*f.Uf

£.606% 1/

2«S2£I
2.S06* 3/

of tJ* assort of »-4ajr kill* bid for at the low price mm
of the m u l of 10g~4ay b U l s bid for at the low prie* was

%s
torn msnis

i;
fo%5?$
?6,5S1

APFUSD

?oa ANB Aoaraai n nsami, nssa?t Bisffsxsfs*
Applied For

lew lark
iork
Clewelaail
Hiohieorsd
Atlanta
Chisago
St. Louia
l^t fifMHtftOllg

£a&eae Cit/
S«$ fra&eieoo
f^TALS

*

11,532.185.000
*S32#1«»^
13ff?3»00©
23,622,C^0O
212^01^000
2i4,308,»JO
28,980,000
13,S72,O00

322,000
lhk.1
8*371*000
2£t7£3#000
li*9?3«Q0&
19,922,000

ajMTMoo
Iff3ca»0@@
18,780,000
26,000,000
13,572,000
$l,lOO,fQ62

i*52,»e,o»
6,83?,O00
l6,&0,000
2,995*000
6,??5,Q90
100,087,000
5,002,000
6,(S9,0O0
7^*76,000
1»,7©?,OOQ

1,839,000
16,5^0,000
2,£?5#90i
6,7t5#000

kloo2,«e

ass

Includes §21i|.30?f 000 soflcoapetitive tenders acoepWd at the average priffi* of f?4j
Includes i2tf#*i§,OO0 mMHJO«petitIv* t^naor* accepted at tHe averse price of 9l«fl
0aftmm®m
lease of the ease length and for tae sane mwmt
invited, the rttara t
tteae t>Ui* would provide yields of 2.66%, for the 91^iay teUle, an* 2.d^, «9f «
l i t - ^ T bills. InUrest r*t«a on btllt are qm%wi im terse of oft&k dieco«ot with
return related to tr.e fec« a a o m t of the bills peyebl© at naturit/ rether thsa th«
amount iaTeeted and their length ia aetual umber of daja related to a 360-day **
in contraet, jrlsid* or, certirioatee, ootee, a«d tonde are ctwpHted ia tarat ef i*
on tbe aao^at inv**t#d, 4.nd relate t^e awibflr of da^s reamlaiag la m intereat PJJ
period to tfee aet«6l matim? of daya l» the period, *lth • — * — « - i i ea^eaaaiaa u
than one coupon period la ifffolwd.

\/kA

U) <T/ W

TREASURY DEPARTMENT

oQg

WASHINGTON, D.C
3R BELEASE A, M, NEWSPAPERS,
aesday, November 28, 1961,

November 27, 196l

RESULTS OF TREASURY'S WEEKLY BILL OFFERING
The Treasury Department announced last evening that the tenders for two series of
reasury bills, one series to be an additional issue of the bills dated August 31, 1961,
nd the other series to be dated November 30, 1961, which were offered on November 22,
ere opened at the Federal Reserve Banks on November 27, Tenders were invited for
1,100,000,000, or thereabouts, of 91-day bills and for $600,000,000, or thereabouts, of
82-day bills. The details of the two series are as follows!
ANGE OF ACCEPTED
OMPETITIVE BIDS j
High
Low
Average

182-day Treasury bills
maturing May 31, 1962
Approx. Equiv,
Price
Annual Rate
27779?
9Q.595
2.829*
98.570
2.806* 1/

91-day Treasury bills
maturing March 1, 1962
Approx, Equiv.
Price
Annual Rate
99.3*46
2.587*
99,339
2.615*
99.31*1
2.606* 1/

98.581

57 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:
• Applied For
Accepted
Applied For
District
• $
Boston
7,085,000
$
25,322,000
t
$
29,322,000
•
7UU,159,000
832,028,000
1,532,185,000
New York
Philadelphia
6,839,000
23,371,000
8,371,000
Cleveland
29,793,000
39,093,000
16,51*0,000
Richmond
12,973,000
2,995,000
:
13,973,000
•
Atlanta
19,922,000
6,775,000
23,622,000
•
Chicago
100,087,000
212,101,000
131,671,000
a
«
St. Louis
5,002,000
19,308,000
2U,308,000
«
Minneapolis
6,029,000
18,780,000
22,925,000
Kansas City
7,1*78,000
28,080,000
28,080,000
J
Dallas
13,572,000
:
hi 709,000
13,572,000
San Francisco
98>971*000
1*8,111,000
%
l*o,i51*,ooo
$1,100,062,000 i
$1,035,721,000
#2,061,523,000
TOTALS

*J

Accepted

$ S,^5,b6o
1*52,028,000
1,839,000

i6,5Uo,ooo
2,995,000
6,775,000
69,387,000
U,002,000
6,029,000
6,628,000
U,709,000
23,90ij.,000
4600,071,000 b/

l Includes $2l!*.309,000 noncompetitive tenders accepted at the average price of 99,31*1
/ Includes $1*9,488,000 noncompetitive tenders accepted at the average price of 98.581
/ On a coupon issue of the same length and for the same amount invested, the return on
these bills would provide yields of 2.66*, for the 91-day bills, and 2.89*, 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 interes
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.
-310

-3 applications of the type referred to herein. Notice, public participation,
and deferred effective date are not required for statement of procedures,
and therefore were not provided in connection with the adoption of these
amendments.

Dated: November 28, 1961 (signed) James J. Saxon
James J. Saxon
Comptroller of the Currency

/JmLj

- 2 material offered by any person shall be received, and all other procedural
matters arising during the course of, or otherwise in connection with,
any hearing.
(c) No person shall be deemed to have become a party to any matter
pending before the Comptroller solely because of being permitted to appear
or to submit testimony, evidence, data or other material at a hearing held
pursuant to this section.
(d) Hearings ordered by the Comptroller pursuant to this section
are not required by statute and shall not be subject to the provisions of
the Administrative Procedure Act. Nothing in this section shall be deemed
to require the holding of a hearing on any matter subject to the jurisdiction of the Comptroller, nor shall the validity of the Comptroller's
decision on any such matter be affected because a hearing was not held,
whether or not such a hearing was requested by any person, nor by the
procedures adopted at any such hearing.
(e) Decisions of the Comptroller on all matters committed by law to
his discretion shall be made on the basis of information developed by him

through investigation, hearings, or otherwise, and in the light of national
aims and policy. All such decisions of the Comptroller shall be final and
binding on all persons.
(f) All decisions of the Comptroller on applications subject to the
provisions of this section shall be published weekly in a Bulletin issued
by the Comptroller of the Currency."
2. The purpose of this amendment is to inform the public with respect
to procedures followed by the Comptroller of the Currency with respect to

TITLE 12 - BANKS AND BANKING
CHAPTER I - BUREAU OF THE COMPTROLLER OF THE CURRENCY
DEPARTMENT OF THE TREASURY

PART IV - PROCEDURES
1. Effective December 1, 196l, Part IV is amended by adding a new
section 4.8, renumbering existing section 4.8 to 4.9> and renumbering all
subsequent paragraphs in Part IV accordingly. Section 4.8 shall read as
follows:
"§ 4.8 Procedures applicable to applications received by the
Comptroller of the Currency.
(a) This section shall apply to applications for approval by the
Comptroller of the Currency of new charters, branches, mergers, consolidations, purchases of assets, assumptions of liabilities, change of name or
location, and conversions from state to national banks. Notice of all such
applications received shall be published weekly in a Bulletin issued by the
Comptroller of the Currency.
(b) With respect to any such application or any aspect thereof, the
Comptroller of the Currency, in his sole discretion, either upon request
of any interested person or otherwise, may order a public hearing. Public
hearings ordered by the Comptroller shall be held at the time and place
fixed by him, and shall be conducted by the Comptroller, a Deputy
Comptroller, or such other person as the Comptroller may designate. At any

such hearing, any interested person may be permitted to submit any testimony
evidence, data or other material pertinent to the pending application. The
officer conducting the hearing shall have authority to determine who may
appear, the order of appearance, what testimony, evidence, data, or other

TREASURY DEPARTMENT
IMMEDIATE RELEASE

(~j "9

^ ^ J P ^ f "

November 29, 19ol
COMPTROLLER OP THE CURRENCY ANNOUNCES NEW PROCEDURES FOR HOLDING
HEARINGS ON APPLICATIONS FOR BANK MERGERS, CHARTERS AND BRANCHES
Comptroller of the Currency James J. Saxon today announced new
procedures under which his office for the first time will hold public
hearings on applications subject to its jurisdiction. The Comptroller

of the Currency Bureau headed by Mr, Saxon supervises the national banking
system, and is the oldest regulatory agency in the Federal Government

having been first established in 1863. During the century of its existence
it has not heretofore held public hearings or observed other public procedures •
Prior to taking office as Comptroller on November 16, 1961,
Mr. Saxon had stated publicly on several occasions that in the interests
of fair play and better supervision he would institute procedures of
public notice and hearings. The new procedures will be applicable to
bank mergers, the chartering of new national banks, and the establishment
of branches, as well as other miscellaneous matters,
Mr. Saxon has already ordered the first public hearing to be held
under the new procedures. Within a few days after taking office Mr. Saxon
ordered a public hearing on the merger application of the First National
City Bank of New York and the National Bank of Westchester, White Plains,
New York. This hearing will be held on December 4 at the Treasury.
Under the new procedures announced today the Comptroller stated
that in most cases the hearings will be held by the Comptroller, or a

Deputy Comptroller. Mr. Saxon stated that they will be conducted informall

and will not be subject to the Administrative Procedure Act. Notice of all

applications received and decisions made by the Comptroller will be publis
in his weekly Bulletin.

D-3H V^-V ( J ^

TREASURY DEPARTMENT

wf

IMMEDIATE RELEASE WASHINGTON, D.C.
"
November 29, 196l
COMPTROLLER OF THE CURRENCY ANNOUNCES NEW PROCEDURES FOR HOLDING
HEARINGS ON APPLICATIONS FOR BANK MERGERS, CHARTERS AND BRANCHES
Comptroller of the Currency James J, Saxon today announced new
procedures under which his office for the first time will hold public
hearings on applications subject to.its jurisdiction. The Comptroller
of the Currency Bureau headed by Mr. Saxon supervises the national banking
system, and is the oldest regulatory agency in the Federal Government
having been first established in 1863, During the century of its existence
it has not heretofore held public hearings or observed other public procedures •
Prior to taking office as Comptroller on November 16, 1961,
Mr. Saxon had stated publicly on several occasions that in the interests
of fair play and better supervision he would institute procedures of
public notice and hearings. The new procedures will be applicable to
bank mergers, the chartering of new national banks, and the establishment
of branches, as well as other miscellaneous matters.
Mr, Saxon has already ordered the first public hearing to be held
under the new procedures. Within a few days after taking office Mr, Saxon
ordered a public hearing on the merger application of the First National
City Bank of New York and the National Bank of Westchester, White Plains,
New York. This hearing will be held on December 4 at the Treasury,
• Under the new procedures announced today the Comptroller stated
that in most cases the hearings will be held by the Comptroller, or a
Deputy Comptroller. Mr, Saxon stated that they will be conducted informally
and will not be subject to the Administrative Procedure Act, Notice of all
applications received and decisions made by the Comptroller will be published
in his weekly Bulletin.
D-311

TITLE 12 - BANKS AND BANKING
CHAPTER I - BUREAU OF THE COMPTROLLER OF THE CURRENCY
DEPARTMENT OF THE TREASURY

PART IV - PROCEDURES
1, Effective December 1, 196l, Part IV is amended by adding a new
section 4.8, renumbering existing section 4.8 to 4.9, and renumbering all
subsequent paragraphs in Part IV accordingly. Section 4.8 shall read as
follows:
"§ 4.8 Procedures applicable to applications received by the
Comptroller of the Currency.
(a) This section shall apply to applications for approval by the
Comptroller of the Currency of new charters, branches, mergers, consolidations, purchases of assets, assumptions of liabilities, change of name or
location, and conversions from state to national banks. Notice of all such
applications received shall be published weekly in a Bulletin issued by the
Comptroller of the Currency.
(b) With resjpect to any such application or any aspect thereof, the
Comptroller of the Currency, in his sole discretion, either upqn request
of any interested person or otherwise, may order a public hearing. Public
hearings ordered by the Comptroller shall be held at the time and place
fixed by him, and shall be conducted by the Comptroller, a Deputy
Comptroller, or such other person as the Comptroller may designate. At any

such hearing, any interested person may be permitted to submit any testimony
evidence, data or other material pertinent to the pending application. The
officer conducting the hearing shall have authority to determine who may
appear, the order of appearance, what testimony, evidence, data, or other

- 2 -

"- -

material offered by any person shall be received, and all other procedural
matters arising during the course of, or otherwise in connection with,
any hearing,
(c) No person shall be deemed to have become a party to any matter
pending before the Comptroller solely because of being permitted to appear
or to submit testimony, evidence, data or other material at a hearing held
pursuant to this section.
(d) Hearings ordered by the Comptroller pursuant to this section
are not required by statute and shall not be subject to the provisions of
the Administrative Procedure Act. Nothing in this section shall be deemed
to require the holding of a hearing on any matter subject to the jurisdiction of the Comptroller, nor shall the validity of the Comptroller's
decision on any such matter be affected because a hearing was not held,
whether or not such a hearing was requested by any person, nor by the
procedures adopted at any such hearing.
(e) Decisions of the Comptroller on all matters committed by law to
his discretion shall be made on the basis of information developed by him
through investigation, hearings, or otherwise, and in the light of national
aims and policy. All such decisions of the Comptroller shall be final and
binding on all persons.
(f) All decisions of the Comptroller on applications subject to the
provisions of this section shall be published weekly in a Bulletin issued
by the Comptroller of the Currency."
2. The purpose of this amendment is to inform the public with respect
to procedures followed by the Comptroller of the Currency with respect to

applications of the type referred to herein. Notice, public participation,
and deferred effective date are not required for statement of procedures,
and therefore were not provided"in connection with the adoption of these
amendments.

Dated: November 2b1, 19bl I signed; James J. Saxon
James J. Saxon
Comptroller of the Currency

a*H>ZJ

- 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 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 Banking institutions generally ma^fl^bmit tenders fo;
account of customers provided the names of the customers
are set forth in such tenders.
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 addit

£x8$
bills dated

September 7, 1961

5®T

, ( 91

days remaining until maturity date on

"HiF

March 8, 1962
_) and noncompetitive tenders for $ IQQ Q 0 0 or less for the
182 -day bills without stated price from any one bidder will be accepted in fu
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 December 7, 1961 y in

casn or

isst
other immediately available funds or in a like face amount of Treasury bills maturing December 7. 1961 Cash and exchange tenders will receive equal treatment.

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 anv e^ejasAioja^ as such, and

HKEmMHmKK
TREASURY DEPARTMENT
Washington
FOR IMMEDIATE RELEASE $ffl&mMty November 29, 1961
t*££&8&&M&&te&&^^

TREASURYfS WEEKLY BILL OFFERING
The Treasury Department, by this public notice, invites tenders for two seriei

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

3p3k
cash and in exchange for Treasury bills maturing

December 7, 1961

9

in the amounl

of $ 1,709,466,000 , as follows:

m—
91 -day bills (to maturity date) to be issued December 7, 1961 y
in the amount of $1,100,000,000 , or thereabouts, represent-

w

and
March
8. 1962
, originally
issued
they
ing to
an mature
additional
amount
of bills dated
September
7. in
1961
amount of $ 595,255.000 , the additional and original bil
to be freely interchangeable.
182 -day bills, for $ 600,000.000 , or thereabouts, to be dated
December 7, 1961 y and to mature June 7. 1962 •

iP&F

Bdkx

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

and noncompetitive bidding as hereinafter provided, and at maturity th

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

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

Tenders will be received at Federal Reserve Banks and Branches up to t

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

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

must be for an even multiple of $1,000, and in the case of competitive

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

TREASURY DEPARTMENT
WASHINGTON. D.C.
November 29, 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 December 7,196l, in the amount of
$1,709,466,000, as follows*
91-day bills (to maturity date) to be issued December 7, 196l,
in the amount of $1,100,000,000, or thereabouts, representing an
additional amount of bills dated September 7, 196l,and to
mature March 8, 1962,
originally issued in the amount of
$595,235,000,
the additional and original bills to be freely
int e re hange ab le.
182-day bills, for $600,000,000, or thereabouts, to be dated
December 7, 196l, and to mature June 7, 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 Standard
time, Monday, December 4, 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.
Banking institutions generally may submit tenders for account of
customers provided the names of the customers are set forth in such
tenders. Others than banking Institutions will not be permitted to
submit tenders except for their own account. Tenders will be received
without deposit from incorporated banks and trust companies and from
responsible and recognized dealers in investment securities. Tenders
from others must be accompanied by payment of 2 percent of the face
amount of Treasury bills applied for, unless the tenders are
accompanied by an express guaranty of payment by an incorporated bank
or
trust company.
n.^io

- 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 Departmraent 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
September 7, 196l,(91-days remaining until maturity date on
March 8, 1962)
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. December 7, 196l,
in cash or other immediately available funds or in a like face
amount of Treasury bills maturing December 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 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
Federal
of theirReserve
Issue, Bank
Copies
or Branch.
of the circular may be obtained from any

and other cambers of the Alliance are planning them.
We are all mmxm ttofe *mm hamia&imm laadam mm *lm*# working

hard to mmm^lttik these liaprovements, m% mlf i» la®«§ a**6 *m p&iiijr,
but ia other very important areas as mil, such as education and public
administration.
We te- !&© fcifcaii %mtm am #©!»$ aur isart;, ami wist* ^a a«>mfal

a£ the £fagigirass *** tfe* ^B«^to« fttplft, w® will ©amtiaiia ts* aa i
B*tfc MOT friaiKls ia ma Mmmwmm. mmt also aet. we am connceni: raw*
thay will.
0O0

-*•

407

AB4 finally, the $a**l ntlt *mm m% highly ueaful eouree a£
ia£**ma*iatt itft gfci<Saaea to laimi Stat** Govermamt etflelals m#
@Hm iwolved In providing aM ehaa*»Ha*. external capital, it aiU

f«ro4uc* greater e$n*fi<&K*c« m&m fwrc or private invesrors, uy aaewia
th«» of an iaf«ne£ judsasmt an tha project itself

t

and will aUo give

the© etmfictene* that they are isvaatiag In cmaotriss tritfe A future,
ahara $ewgi and expatiaton cmh* mpmt&S. Public eapitat suppliers
vill al*^ haw graatar eeaf!im that thsir reaotireee will fee neei §m
&mbin*tlj& with other funds to previa* aaxiisasa overall effect.
Bnt we Mat meea&er that ail af the** things, public capital, ftfci

laves tmeatt, «a£ sotmd plaiasisg, will have little affect without the

essential immmmmmmm $m a<fesiei«tratii>R, tax ays tea*, mi tami atilii
tien¥ tfeet am tfc* m*F backbone #f the Alliance.
Haese ehaagee am naiemiy Is ewe UMm kmmtUmm contrite

t

-4*

4^o

and socially.
The panel, a»d the experts who serve with lt» will provide aa inctn
tive to plan aa that private, government tmd external resources are

in aueh a sinner m to make a maximm contriatttioa to advene lag dem

thtm ia particularly iaportant since external capital can only fee s

nentary to local capital, and ia neat effective when used In combina
with national enhlie and private resources.
the panel will also serve to increase the earn with which project

priorities am worked out withiti a national development plan. That i

significant aspect of development planning. It ia sometimes difficu
fee instance, to decide between schooling and irrigation, and often

choices must he made. Priority planning helps to insure that such ch
arc faced tie to, that decisions am made, &&& ia a manner that will
the greatest benefit to the greatest number of people.

mm

potential

ami %® t w l i m their cflserlwUy tm growth in freed®*,

Zn mm words of ttia pmmtolm to the historic Charter of facta
del Satei
*tt ia our mmmp*faU

tacit to . •... dcjw^tatote to

the s*o#r and foraatet of onr ceantnoc, and of all lands,
that the o m a t i w powers of free m o hold the key to their
f » g m a e cod to tte p m g m e e of future geiiaafati«fie,i.
me mcllMftion of Ifco uyirfttieao of tto peoplo ®% £&* hesdspiiers

dmpendg an tint practic^i pi&mtiimg end fj^lcMontfttlon that la naecacery
to tcenefet* nnr gaale into cancn^t^ aad lasting ocfeiemiDeate* that is
wiiy this mmmtmg md&f to mlmz Hie panel mi m&m experts who will,

tea of tie noet f*end*i«§ oocceto of ttio AllUnco 1» the onphaelo It
places en ce^try-vlde pXennia§»

§«eh viewing should serve to assure *fc

indlwidiiai projeeta are well imtegmted into patterns of national develef
«entf end that they mmtxMmm to c.telcaood growth, 00th eceoenicallr

•410

These iwrovoneato are needed to give Am great bulk of the cecaii
of latin assorlea the state In

OOBICI

and ©ecnoaiic demleweiit tfimt is

meeeaacry if they mm titea^eivoe to provide the needed efforts Hey
are ale® hmt® in. mat actual effort no provide a fraacwerfe for process
in which ftmo» private inetltutiono ©am grow and flonrlofc.
fto mm MUcwoc ouch reform will ho eeay. may go to the very
root ai^d tradition of ways a* life that have ewivad through centurits.
them is no doubt that making ttseco mfocao involves hard eheieco and
difficult daeieiegie. The course of isf#$s la- not a eaee#i oncr end it
ia aeldasi a fCfnter one. But these decisions mist be node.
for it is the agreed position cf all of m that the loans would go

to the nation® which help theiasalves, and it ia fitting that thU shoal*
ha die case. This Alliance mm not f#%w*ed to waste its resources.
It woe foewed* and ita purpose wee stated In unmistakable tem§, «•
-r
benefit thoae people of the hemisphere who nood help to achieve theft

can be betrayed, if we aceusje that Hie \llianee for Progress la no cert
than a loan program It ia, and will ho, far sore. Loans there will
certainly he. But we tern no Intention — now or later — of asking leas
for other than sound reasons of davolepaent or wmd* at Fnstta del Ssts,
we agreed that this was to ho a genuine Alliance, with fell eeeperatiea
and matched effort, mmi thsfc the other republics would make their ewa

entry into the decade, of 4evalopsent. He will' ho a partner la hssdsphe
progress* hut we do not intend, and in fact we samet, carry the whole
load, fully SO percent of the resoureea needed to move the hemisphere
Into the twentieth century oust ea« fro® Latin Jisiarica itself.
tot that ia not all. Hie aoct iapertaat part of the entire effort

ia the overall administrative progress, including both lamd and tax re C
that our follow fsaabers of the Alliance ssnst ache for thesas elves.

4to

related purposes; $150 edUlo* Mm technical assistance, devele^aent
loans md grants under the Agency for international 9evelopment; $78

million for heaping, eaaasjnity domlopssaftt, rural credit and other prej

w&4m: the Social Progress Trust fcn*% adtelaietomd hy the later**aeti«aii

Bevelopr^nt tet.k and #f4 million Is 9, S, Agricultural Ceessedittee audi
the feed For fence program.
So we are wall cm the way toward aching ^oi our eee^itacitr ie# !h§
year, He know that over th«a If-year af#n of tee Alliance, Latin Aseritf
mil need at least $10 Milton In external resources to foster growth
and deaaloeacac* This figure mzlntitta prlvmt*, ae well a* public tsveei
mti while we enpeot to preside the major part of it, substantial amount
will also he expected from ether industrialiaed nations and Area inter**
actional landing lactltuclea*«
Brat dollcw don*t mmm development. At the very euteoe, ear eppii
tunity for owcooco can he wiped out, and the tope of the heaiephem

TREASURY DEPARTMENT
Washington

.
413
November 30, 1961

FOR RELEASE ON DELIVERY

Bimiim m mi mmmmw mwus mum
SlCEltAlf Of 3 0 TtSallKY
4f M l JUmfertNOttCa* EGOHOH1C jyg§ SOCLiL CC^UMCIL
» THE M w M P U n a * 01? A M I G A * STATES

Af TO IAI A£<mi€AM wi§i t tfiunnmi, 0. c.
WKKUntX* sWNUEt 30, tf#It 10:45 A.M.EST
It ia a gr&at £ t m m m

to he p^socnt at this first aeoting of the

mi foetal Qmm&il to take ferseal steps

This ia not an eeenoleo fov vlvitl ftenoniij»eaeato«

It ic a wettiing*

siting. In that sciiae# it im truly representative of the entire
spirit af the eUliopaa, §m eueeeao la our cfforte will
moolmtlen cad our willimj^ness te work to aehieve it.
me ttclfeei States ia doing Its pajrt. He have
MU*0* dollars of gowr^nfcal aeaiatenee for the first year mi ths
Alliens which code March 13, end we town already
$300 allllon of that mmmt* ttat f§§§ ailllea includes, la
ktcs #!#§ aUUca to sh^MTI^XagNHrt Bank

D-

41
TREASURE DEPARTMENT
Washington
November 30, 196l
FOR RELEASE ON DELIVERY

REMARKS BY THE HONORABLE DOUGLAS DILLON
SECRETARY OP THE TREASURY
AT THE INTER-AMERICAN ECONOMIC AND SOCIAL COUNCIL
OP THE ORGANIZATION OP AMERICAN STATES
AT THE PAN AMERICAN UNION, WASHINGTON, D. C,
THURSDAY, NOVEMBER 30, 196l, 10:45 A.M., EST
It is a great pleasure to be present at this first meeting of the
Inter-American Economic and Social Council to take formal steps toward
implementing the Alliance for Progress.
This is not an occasion for vivid pronouncements. It is a working
level meeting. In that sense, it is truly representative of the
entire spirit of the Alliance, for success in our efforts will depend
upon our resolution and our willingness to work to achieve it.
The United States is doing its part. We have promised more than
a billion dollars of governmental assistance for the first year of the
Alliance which ends March 13, and we have already committed more than
$800 million of that amount. That $800 million includes, in approximate amounts: $390 million in Export-Import Bank loans for development
and related purposes; $250 million for technical assistance, development loans and grants under the Agency for International Development;
$78 million for housing, community development, rural credit and
other projects under the Social Progress Trust Pund, administered by
the Inter-American Development Bank, and $9^ million in U. S.
agricultural commodities under the Pood For Peace program.
So we are well on the way toward making good our commitment for
the year. We know that over the 10-year span of the Alliance,
Latin America will need at least $20 billion in external resources to
foster growth and development. This figure includes private, as well
as public Investment, and while we expect to provide the major part
of it, substantial amounts will also be expected from other
industrialized nations and from international lending institutions.
But dollars don't mean development. At the very outset, our
opportunity for success can be wiped out, and the hope of the
hemisphere can be betrayed, if we assume that the Alliance for
Progress is no more than a loan program. It is, and will be, far
more. Loans there will certainly be. But we have no intention —
now or later — of making loans for other than sound reasons of
D-313

- 2 -

£

development or need. At Punta del Este, we agreed that this was to
be a genuine Alliance, with full cooperation and matched effort, and
that the other republics would make their own entry into the decade
of development. We will be a partner in hemispheric progress, but
we do not intend, and in fact we cannot, carry the whole load. Fully
80 percent of the resources needed to move the hemisphere into the
twentieth century must come from Latin America itself.
But that is not all. The most important part of the entire
effort is the over-all administrative progress, including both land
and tax reforms, that our fellow members of the Alliance must make
for themselves.
These improvements are needed to give the great bulk of the
people of Latin America the stake in social and economic development
that is necessary if they are themselves to provide the needed effort.
They are also basic in our mutual effort to provide a framework for
progress in which free, private institutions can grow and flourish.
No one believes such reforms will be easy. They go to the very
root and tradition of ways of life that have evolved through
centuries. There is no doubt that making these reforms involves
hard choices and difficult decisions. The course of reform is not
a smooth one, and it is seldom a popular one. But these decisions
must be made.
For it is the agreed position of all of us that the loans would
go to the nations which help themselves, and it is fitting that this
should be the case. This Alliance was not formed to waste its
resources.
It was formed, and its purpose was stated in unmistakable terms,
to benefit those people of the hemisphere who need help to achieve
their own potential, and to realize their opportunity for growth in
freedom.
In the words of the preamble to the historic Charter of Punta
del Este:
"It is our inescapable task 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".
The realization of the aspirations of the people of the
hemisphere depends on the practical planning and implementation that
is necessary to transform our goals into concrete and lasting
achievements. That is why this meeting today to select the panel of
nine experts who will, with appropriate assistance, review development
plans and programs, is of particular importance.

- 3One of the most promising aspects of the Alliance is the emphasis
it places on country-wide planning. Such planning should serve to
assure that individual projects are well integrated into patterns of
national development, and that they contribute to a balanced growth,
both economically and socially.
The panel, and the experts who serve with it, will provide an
incentive to plan so that private, government and external resources
are used in such a manner as to make a maximum contribution to
advancing development. This is particularly important since external
capital can only be supplementary to local capital, and is most
effective when used in combination with national public and private
resources.
The panel will also serve to increase the care with which project
priorities are worked out within a national development plan. That
is a significant aspect of development planning. It is sometimes
difficult, for instance, to decide between schooling and irrigation,
and often hard choices must be made. Priority planning helps to
insure that such choices are faced up to, that decisions are made,
and in a manner that will bring the greatest benefit to the greatest
number of people.
And finally, the panel will serve as a highly useful source of
information and guidance to United States Government officials and
others involved in providing and channeling external capital. It
will produce greater confidence on the part of private investors, by
assuring them of an informed judgment on the project itself, and
will also give them confidence that they are investing in countries
with a future, where growth and expansion can be expected. Public
capital suppliers will also have greater confidence that their
resources will be used in combination with other funds to provide
maximum over-all effect.
But we must remember that all of these things, public capital,
private investment, and sound planning, will have little effect without
the essential improvements in administration, tax systems, and land
utilization, that are the very backbone of the Alliance.
These changes are underway in some Latin American countries,
and other members of the Alliance are planning them.
We are all aware that some hemisphere leaders are already working
hard to accomplish these improvements, not only in land and tax policy,
but in other very important areas as well, such as education and
public administration.
We in the United States are doing our part, and with the approval
of the Congress and the American people, we will continue to do it.
But our friends in the Americas must
0O0 also act. We are confident
that they will.

^ 1 i
TREASURY DEPARTMENT
Washington

REMARKS OF JOSEPH W. BARR, ASSISTANT TO THE SECRETARY OF THE
TREASURY, BEFORE THE ARKANSAS COUNTY TREASURERS* ASSOCIATION
CONVENTION, AT THE MARION HOTEL IN LITTLE ROCK, ARKANSAS, AT
7:00 P.M., ON FRIDAY, DECEMBER 1, I96I
The State of Arkansas has sent to the Congress of the United States
two men on whom we in the Treasury rely heavily for advice and help in
managing the finances of the United States. I am referring to
Senator William Fulbright and Congressman Wilbur Mills. Since Arkansas
has been kind enough to send to us in the Federal Government men of the
caliber of Bill Fulbright and Wilbur Mills, it is surely only fitting
and proper that the Secretary of the Treasury should send me back to
your State to discuss with you County Treasurers some of our mutual
problems. I fear that you gentlemen are getting the short end of the
exchange, but I do hope that you will give us credit for an attempt at
reciprocity.
Senator William Fulbright shares with us in considerable measure
the burden of the balance of payments problem which now confronts this
nation. This is a relatively new problem for the United States. We
have not had to concern ourselves about this financial discipline since
the early 1930fis. Today, however, the balance of payments and our gold
reserves are closely tied in with our ability to deploy troops around
the world, to support our foreign aid program, and to permit the free
flow of American private capital into world-wide investment opportunities. In other words, the balance of payments and our gold reserves

418
- 2 -

are inextricably tied up with our expressed national determination to
meet the thrust of the Soviet Communist challenge. Senator Fulbright1s
reputation in the field of foreign policy is quite well-known. However,
I believe that not too many people in the country are aware that he is
also an outstanding authority in the field of international finance —
a man whose judgment and advice in this area is immensely helpful to us
in the Treasury. When Senator Fulbright peers closely at you over those
half-rimmed glasses that he wears and commences a lecture on the international financial problems of the United States, it pays to listen
closely.
Wilbur Mills, Chairman of the Ways and Means Committee, is one of
the great tax authorities in this Nation. Wilbur and his committee
share with Treasury the responsibility of keeping our system of voluntary
taxation in working order. He brings to this responsibility not only
his expertise on tax matters but his years of experience in the service
of the United States. Wilbur is a cautious and a prudent man. There
have been times when we in the Treasury have become a trifle impatient
with Wilbur's minute examination of our proposals. Sometimes we ruefully
admit that Wilbur has examined our programs to death. In all fairness,
however, we must admit that the revenues of the United States are so
vitally important to our strength as a nation that we can understand and
sympathize with his cautious and careful appraisals of our proposals.

- 3I served with both Bill Fulbright and Wilbur Mills in the Congress.
I know the enormous amount of work involved in representing a State or
a district. I am only grateful that both of these men find the time to
be so helpful to the United States Treasury.
The Secretary of the Treasury, Douglas Dillon, has the heaviest
responsibilities of any financial officer in the world today. He is
charged with the responsibility of administering the finances of a
nation of 180 million people, producing goods and services at a current
annual rate of about $5^0 billion a year. These responsibilities range
through tax revenues, currently running at about $82 billion a year,
expenditures of about $89 billion a year, a national debt of almost
$297 billion, and gold reserves in QXQQOO m£ $17 billion. On the other
hand, I would suppose that you gentlemen, in your capacity as County
Treasurers, represent the basic areas of government finance in the
country. In spite of the fact that the Secretary of the Treasury deals
in enormous sums and you deal in much smaller sums, we share an area of
mutual problems. This will be the subject of my discussion tonight.
Most people assume that the Secretary of the Treasury in discharging
his duties is guided by purely Federal responsibilities. Our areas of
Federal responsibility are centered in taxation, debt management, and
international finance. The Secretary shares with the Congress the
responsibility of providing an equitable system of taxation and revenue
that will enable the country to meet its national obligations. He must

420
- hprovide orderly management of the national debt so as to minimize interest charges, provide for a debt of reasonable structure and avoid undue
interference in the capital markets of the country. And lastly, he
must manage our international financial affairs so that the Nation can
meet its military and diplomatic commitments, while preserving the value
of the dollar as a bulwark to the financial security of the free world.
These are the Federal objectives which we in the Treasury must always
keep before us. But not withstanding these purely Federal objectives,
we all realize that we must also take into account the problems of the
State and local finance authorities. We must take into account the
problems that you people encounter in discharging your duties as County
Treasurers here in Arkansas.
The position of Secretary of Treasury today is certainly no bed of
roses. The ability of this Nation to meet the challenges at home and
abroad rests in large measure on our financial strength. Consequently,
in these troubled times the Secretary of the Treasury carries a staggering responsibility. On the other hand, he can sympathize deeply with
your problems as County Treasurers. A look at the statistics reveals
the cause for his sympathy. The Federal Government has been able to
reduce the level of its tax rates twice since World War II. In spite of
these reductions our revenues have increased from $40 billion in 19^6 to
a level of about $82 billion for fiscal year 1962. On the other hand,
I am quite certain that the county governments in Arkansas, in line with

421
- 5the rest of the country, have been forced to raise their tax rates. Our
total national debt increased from $260 billion in 19*4-6 to about $297
billion today, or an increase of about Ik percent. But over the Nation,
State and local debt has jumped from a total of $16 billion in 19^6 to
over $72 billion today — an increase in excess of 350 percent. This is
a sobering comparison.
While our national needs, especially in the area of defense, are
enormous and constantly pressing, we realize that the demands on your
local resources are probably equally as pressing. We realize and understand the pressures on you for schools, roads, hospitals — all the local
services which your people need. Realizing the urgency of your local
needs and keeping in mind the comparative trend in Federal tax rates and
debt in relation to the trends in local government, it is clearly our
responsibility to manage our Federal financial affairs in such a manner
as to leave you the utmost freedom of action.
As a starting point, let's take a look at the field of Federal
revenues. All of us hear many complaints that the Federal Government
drains off an increasingly larger percentage of the Nation's resources
with the result that too little is left over for State and local governments. This argument is simply not true. Since the Korean War, Federal
budget expenditures as a percent of gross national product have steadily
declined — from a level of about 20 percent at the end of the Korean War
to about 16 percent today. In other words, at the end of the Korean War

- 6-

422

the Federal budget accounted for about 20 percent of our GNP. Today,
it constitutes l6 percent of our GIMP. Barring unforeseen demands for
military expenditures, the President has indicated that he will submit
to the Congress in January a budget which will probably amount to about
15 percent of the gross national product of the country. This should
leave sufficient room for you local and State officials to raise the
revenues you need without increasing the total burden on the American
taxpayer. Thus, in the overall level of our national revenues we will
attempt to provide for our national needs and still leave State and
• local governments elbow room to meet their financial requirements — more
room than you have had in the past decade.
The field of taxation is another area where you as local officials
and we as federal officers share a mutual responsibility. In this
century as the country has pulled closer together through transportation
and communication advances, it has become apparent that certain types of
taxes can be collected most efficiently by State and local governments
and certain other types can best be collected by our national government.
As a result, you local officials tend to rely principally on property and
sales taxes, while we in the Federal Government get about 8l cents of our
total tax dollar from the corporate and individual income tax. B&re
again all of us hear the argument that the Federal income tax should be
abolished — for some reason it is supposed to be un-American. The argument then usually goes ahead (if finished) to the conclusion that the

-7 -

'3

Federal Government should rely on sales taxes for its revenues. I am
not going into the arguments pro and con on sales taxes; I merely want
to point out that this is a tax which local and State governments can
collect with relative ease. It is doubtful whether you could collect
a net income tax on all incomes — corporate as well as individual —
with equal facility. Business and incomes today flow across local
boundaries and make it much more difficult to collect a net income tax
except on a national basis. I might add that because of the international
movements' of American income, we in the Federal Government are having our
difficulties collecting taxes due in this relatively new dimension.
It seems clear to me that if we are to discharge our Federal
obligations without causing you local officials undue trouble and hard-

ship, then we should rely on an income tax which we can collect efficiently,
and leave the sales and property taxes to you. To those people who argue
for a national retail sales tax, you might mention these figures. If we
stripped the Federal Government to the bone and provided by a sales tax
only the amounts budgeted for defense, space, and international affairs,
the interest on our debt, and our contractual obligations to veterans
(a total of almost $70 billion), throwing out agriculture, public works,
housing, research, etc., we would still have to levy a national retail
sales tax of about 30 percent. I can think of no more drastic interference in your local financial problems. We do not propose to cause you
this added difficulty.

124
- 8Debt management is another area of mutual problems. Our debt
today stands at about $297 billion. This is a lot of money, but
looked at in the perspective of our ability to pay, the picture becomes
much more encouraging. At the end of World War II our debt was 116 percent of our gross national product. We owed more than we produced in
one year. Today the debt is about 55 percent of the current annual rate
of our gross national product (about $5^0 billion). In other words, the
debt is a bit more than half of our annual production. I cannot say
that the same picture is reflected in the figures on State and local
indebtedness. Your debt has climbed ^.5 times (about 350 percent) while
our debt was increasing about X*+ percent. The result is that many local
government units have just about exhausted their ability to borrow more
money. Clearly we should not make your financing chores more difficult.
Recently there has been some uneasiness expressed in the country
that we were preparing to strike down the tax-exempt status of municipal
bonds. This uneasiness stemmed from two developments: one involving
banks and the other insurance companies. In the past few months, local
agents of Internal Revenue disallowed certain tax-exempt income claimed
by banks. These agents were doing their duty under the law and ruled as
they saw the facts. A review of these actions in our national office
this week overturned these local decisions and supported the position of
the banks.

- 9-

425

Secondly, various insurance companies have insisted that an
Internal Revenue ruling made under the previous administration tends
to cloud the tax-exempt status of municipal bonds. They are urging us
to change the ruling. So far we have not agreed. Wilbur Mills and his
committee labored mightily to write into the tax laws provisions which
would insure that insurance companies carry a fairer portion of the tax
burden. These regulations were issued to implement that 1959 law. The
statute says clearly that we cannot impose a tax on tax-exempt bonds.
We believe that the regulations carry out the intent of the Congress to
collect taxes — not to impair the tax-exempt status of municipal bonds.
All of us in government today face difficult problems. I am not
certain that our Federal problems are more difficult than your local
problems. I detect no inclination in this Administration to ignore local
and State problems. On the other hand, there is an overriding hope that
you can discharge your local duties efficiently and well.
This is a Federal Government with divided responsibilities on all
levels. We recognize this fact. But we also recognize that we share
mutual problems. I can assure you that in Treasury we will try to make
the discharge of your duties as simple as possible. If we get in your
road, come tell us about it.

0O0O0O0

4^t

-

2 -

Mr. Wallace/received his A.B. Degree from the University of
Washington, and his Ph.D. Degree from the University of Chicago.
He is 40 years of age, and is married to the former Luna Agnes
Campbell. Mr. and Mrs. Wallace and their three children reside
at 2913 Argyle Drive, Alexandria, Virginia.

oOo

DRAFT PRESS RELEASE
Treasury Secretary Douglas Dillon today named his Special
Assistant Robert A. Wallace of Park Forest, Illinois, to the
post of Assistant to the Secretary of the Treasury.
In his new position, Mr. Wallace will represent the Secretary
in interagency discussions in a number of important areas
involving the work of the Treasury Department. As part of this
task, he will be concerned with the application of economic
analysis to the Treasury's responsibilities for fiscal planning.
Secretary Dillon has also directed that the Director of the
Bureau of the Mint and the Chief of the United States Secret
Service shall in the future report to him through Mr. Wallace.
These two bureaus have been reporting to Secretary Dillon through
Assistant Secretary A. Gilmore Flues, who retains general
supervisory responsibility for four other operating bureaus of

the Treasury. Mr. Wallace will continue to serve as the Department
Employment Policy Officer.
During 1959 and 1960, Mr. Wallace was a consultant to
Senator Kennedy, and during the presidential campaign he was
responsible for research on economic policies. From 1955 to 1959,
he served as Staff Director of the Senate Committee on Banking
and Currency. From 1949 to 1954, he was research associate to
Senator Paul H. Douglas, of Illinois.

42Q
TREASURY DEPARTMENT
WASHINGTON, D.C.
December 1, 1961
FOR IMMEDIATE RELEASE
WALLACE NAMED NEW ASSISTANT
TO THE SECRETARY
Treasury Secretary Douglas Dillon today named his Special
Assistant Robert A. Wallace of Park Forest, Illinois, to the post
of Assistant to the Secretary of the Treasury.
In his new position, Mr. Wallace will represent the Secretary
in interagency discussions in a number of important areas involving
the work of the Treasury Department. As part of this task, he will
be concerned with the application of economic analysis to the
Treasury's responsibilities for fiscal planning.
Secretary Dillon has also directed that the Director of the
Bureau of the Mint and the Chief of the United States Secret Service
shall in the future report to him through Mr. Wallace. These two
bureaus have been reporting to Secretary Dillon through Assistant
Secretary A. Gilmore Flues, who retains general supervisory
responsibility for four other operating bureaus of the Treasury.
Mr. Wallace will continue to serve as the Department's Employment
Policy Officer.
During 1959 and i960, Mr. Wallace was a consultant to
Senator Kennedy, and during the presidential campaign he was
responsible for research on economic policies. From 1955 to 1959*
he served as Staff Director of the Senate Committee on Banking and
Currency. From 1949 to 1954, he was research associate to
Senator Paul H. Douglas, of Illinois.
Born in Oklahoma, Mr, Wallace studied at Oklahoma State
University. He received his A.Be Degree from the University of
Washington, and his Ph.D. Degree from the University of Chicago,
He is 40 years of age, and is married to the former Luna Agnes
Campbell. Mr. and Mrs. Wallace and their three children reside at
2913 Argyle Drive. Alexandria, Virginia*
0O0

D-314

TREASURY DEPARTMENT
WASHINGTON, D.C.
December 1, 1961
FOR IMMEDIATE RELEASE
ARNOLD E. LARSEN NAMED ADMINISTRATIVE ASSISTANT
TO THE COMPTROLLER OF THE CURRENCY

Comptroller of the Currency James J. Saxon today announced
the creation of an Administrative Office within his Bureau. Mr.
Arnold E. Larsen, formerly a national bank examiner in the Pacific
Morthwest and an Assistant Chief National Bank Examiner in the Washington office since May, 1957 has been designated to serve as Administrative Assistant to the Comptroller of the Currency and will head
the newly created office. His duties will embrace important administrative procedures in the Washington office and also in the field.

0O0

D-315

TREASURY DEPARTMENT
WASHINGTON, D.C.
December 1, 1961
FOR IMMEDIATE RELEASE
ARNOLD E. LARSEN NAMED ADMINISTRATIVE OFFICER TO
THE COMPTROLLER OF THE CURRENCY
Comptroller of the Currency James J. Saxon today announced
the creation of an Administrative Office within his Bureau.
Mr. Arnold E, Larsen, formerly a national bank examiner in the
Pacific Northwest and an Assistant Chief National Bank Examiner
in the Washington office since May, 1957 has been designated to
serve as Administrative Assistant to the Comptroller of the
Currency and will head the newly created office. His duties
will embrace important administrative procedures in the
Washington office and also in the field.

0O0

D-315

sv.

-^AF? Ho. 2 • ?.VR -11/30/fo

The "ederal Reserve action on regulation Q wakes it possible for

co;f..^3rcial banks to pay somewhat higher rates of interest to people who
2.-J3, and to foreigners who hold dollars here for a considerable period

of time. In talcing this action, the Federal Reserve Soard is accomplishing
ir part, and oy a different method, an objective sought by the Adsdnistration

at the last seasion of Congress. That vaa to reduce strains on our balance
of payments by removing altogether the Federal Heserve'a ceiling on interest

ratas payable on the tlsie deposits held in American banks by foreign
jiovarnraents and central banks• The effect of the action Just taken should

be, on balance, to help in attracting and retaining foreign funds, as well
as encouraging savings« «*^

W.

TREASURY DEPARTMENT
WASHINGTON. D.C. \ ^
December 1, 1961
FOR IMMEDIATE RELEASE

STATEMENT BY U. S. TREASURY REGARDING ACTION
BY THE FEDERAL RESERVE ON REGULATION Q

The Federal Reserve action on Regulation Q makes it possible
for commercial banks to pay somewhat higher rates of interest to
people who save, and to foreigners who hold dollars here for
a considerable period of time.

In taking this action, the

Federal Reserve Board is accomplishing in part, and by a
different method, an objective sought by the Administration
at the last session of Congress. That was to reduce strains
on our balance of payments by removing altogether the Federal
Reserve's ceiling on interest rates payable on the time deposits
held in American banks by foreign governments and central banks.
The effect of the action just taken should be, on balance, to
help in attracting and retaining foreign funds, as well as
encouraging savings.

0O0

D-316

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laolado* ISl,6li$,O0O M M N p p o U t l v o t#nd«ars «»oopto< At tte awrag« pn.=e« of. $ ^
Cte # eo^pojj W r a of the s » ® loagth a»d for tl» sa»e amowt Invested, ibo roti^B &
thMW bill© would p w l d ® yields of 2.68*, for the »*d«y bill®, and 2«l$#, for UM
182-day bill®. isWroot mtm on bill® o n quoted 1®. terms of bonis disromt otto 1
«®^ n«wrto4 «ad their longth in ootwl noobor*of day® toloWC W « 36CMHf IPOOI
In eooivoot.
-v, j*m**m
yi«i& ^u
0a cer«aLX2.oai«8,
eortifleoWo, »nates,
w ? s , awa
and feond®
&ona® oro
nr# oooimtod
oooimsoa ia
in tonui of
01 w.too onouttt IstooWd, «sd r«Aato
too m»b«r of ,Hoy» re^iiiiof ia on iatotji
pojoioiit period
days
;rtod
to
ti»o
ootval
soobor
of
4mj&
if aere toon oao m^m
period.
iB¥®lV#d, %M tho porlod, «ttn oeniofflaml «o»poa«

y

7 -Tl^K IJOJM-

TREASURY DEPARTMENT

**V W

w

Kaasaw^aaaa

W A S H I N G T O N , D.C.
OR RELEASE A. M. NEWSPAPERS,
uesday, December 5* 1961.

December k, 1961

RESULTS OF TREASURY'S WEEKLY BILL OFFERING

The Treasury Department announced last evening that the tenders for two series of
reasury bills, one series to be an additional issue of the bills dated September 7, 1961,
ad the other series to be dated December 7, 1961, which were offered on November 29,
fere opened at the Federal Reserve Banks on December 1*. Tenders were invited fox
1,100,000,000, or thereabouts, of 91-day bills and for $600,000,000, or thereabouts, of
.82-day bills. The details of the two series are as follows:
91-day Treasury bills
OF ACCEPTED
182-day Treasury bills
maturing March 8, 1962
JOMFETITIVE BIDSi
maturing June 7J 1962
Approx. Equiv.
Approx. Equiv.
Price
Price
Annual Rate
Annual Rate
High
99.31*6 aj
98.561* b/
2.587$
2J
Low
99.335
2.631$
1
98.510*
2.880$
Average
99.337
2.625$ 1/
i
98.551
2.867$ 1/
a/ Excepting one tender of $300,000$ b/ Excepting one tender of $200,000
9k percent of the amount of 91-day bills bid for at the low price was accepted
92 percent of the amount of 182-day bills bid for at the low price was accepted
rOTAL TENDERS APPI1ED FOR AND
Applied For
Distrist
Boston
$
38,578,000
New York
1,671,393,000 .
28,i*0l*,000
Philadelphia
1*0,958,000
Cleveland
17,537,000
Richmond
17,957,000
Atlanta
230,08^,000'
Chicago
26,1*02,000
St. Louis
.
22,992,000
Minneapolis
5l,23U,000
Kansas City
18,721|,000
Dallas
67,257,000
San Francisco
TOTALS
#2,231,520,000

ACCEPTED BY FEDERAL RESERVE DISTRICTS:
Accepted
* Applied For
Accepted
5,797,000 $ 1,797,000
$
31,278,000 • $
•
773,351**000
I*2l*,l51*,000
769,593,000 :
10,625,000
5,625,000
12,819,000 :
21,903,000
16,61*3,000
35,585,ooo •
7,182,000
7,182,000
i5,l*7i,ooo :
7,1*19,000
7,019,000
15,0U7,000 •
99,110,000
l*i*,i*70,000
, 93,731*, 000 «
•
20,081,000
19,081,000
17,672,000 •
7,1*79,000
5,979,000
ll*,872,000 :
33,030,000
30,022,000
i*3,60l*,000 •
7,661*,000
7,61*8,000
18,721*,000 •
32,503^000
1*1,662,000
30,866,000
$1,100,902,000
$1,035,306,000
$600,1*86,000 &

Includes $209,672,000 noncompetitive tenders accepted at the average price of 99
Includes $5l,ol*5,000 noncompetitive tenders accepted at the average price of 98.551
On a coupon issue of the same length and for the same amount invested, the return on
these bills would provide yields of 2.68$, for the 91-day bills, and 2.95$, 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
31if
7 more than one coupon period is involved.

434
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U

TREASURY DEPARTMENT
Washington
FOR RELEASE AFTER 10:00 A.M.,EST
MONDAY, DECEMBER 1*, 1961

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TREASURY DEPARTMENT
Washington
FOR RELEASE AFTER 10:00 A.M., EST
MONDAY, DECEMBER 4, 196l
OPENING REMARKS OP COMPTROLLER OP THE CURRENCY
JAMES J. SAXON AT THE HEARING, DECEMBER 4, 196l
ON THE APPLICATION TO MERGE THE FIRST NATIONAL
CITY BANK OP NEW YORK AND THE NATIONAL BANK OP
WESTCHESTER, WHITE PLAINS, NEW YORK
We regard this as an historic occasion in the near century-long
axistence of the Office of the Comptroller of the Currency.

For the first

time we are embarking upon a program of public procedures and public
ilsclosure. We do this because we believe it to be in keeping with the
iemocratic traditions of this nation.

v

We have no doubt whatever that democratic processes require that both
proponents and opponents of matters pending formally before a Government
agency should be afforded an opportunity by the agency to be heard publicly.
fe are convinced that this can be done in complete fairness to the banks
ffhich we supervise, and with due regard to those aspects of their
business dealings which a supervisory agency has an obligation not to
publicize.
It is our intention to use our best efforts to decide on matters
)efore us with objectivity and fairness to all concerned.

We shall do our

itmost to make our decisions promptly, and we shall state publicly the
reasons for our decisions.
We have before us this morning an application to merge the First
fational City Bank of New York and the National Bank of Westchester,
tolte Plains, New York.

The application before us has been submitted under

;he so-called Bank Merger Act of i960.

The question we must consider is

whether this merger will be in the public interest in the light of the
tatutory factors enumerated in that Act.
D-318

The Comptroller's decision

1

^

i

must be made on the basis of a consideration of all of these factors, with
no single factor being conclusive. The factors to be considered are the
financial history and condition of the banks involved, the adequacy of
their capital structure, the future earnings prospects, the general
character of the management, the convenience and needs of the community to
be served, whether or not the corporate powers are consistent with the
purposes of the Federal Deposit Insurance Act, and the effect of the
transaction on competition, including any tendency toward monopoly.
It is hoped that this hearing will result in a clarification of the
issues involved and effective presentation of material pertinent thereto,
so that the Comptroller will be better enabled to reach a sound decision
in the light of his statutory responsibilities. The hearing will be
conducted informally, and will not be subject to the Administrative
Procedure Act. All persons desiring to be heard will be afforded an
opportunity to testify. Any person desiring to do so may file a statement
for the record.

It is hoped that the witnesses will confine their oral

presentation strictly to the issues involved in the proposal before us,
and will be as brief as possible. Where possible, and particularly where
a witness has a lengthy prepared statement, it is desirable that he
summarize his statement orally as much as he deems appropriate rather than
reading the statement in its entirety.

The full statement will, of course,

go into the record, and will be considered by the Comptroller.

All

testimony and evidence accepted will be considered and will be accorded
the weight to which in the judgment of the Comptroller it Is entitled.
The Comptroller of the Currency reserves the right to excluse any testimony
not deemed pertinent to this application. The Comptroller also reserves
the right for himself and members of his staff to point out unsubstantiated
statements and to question any witness with respect to his testimony.

- 3 .

^-

After the conclusion of this hearing the public file will be available
»or inspection by any interested person in Room 4120 of this Building.

We

jannot undertake to furnish copies of this file or any portion thereof to
anyone. The transcript of these proceedings will subsequently be available
from the reporter.

The record will remain open until the close of

business on December 11 for the receipt of additional documents.

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 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.

/ ;. Banking institutions generally may submit tenders far m^emmt of eus^u-iers
jprovided the names of the customers are set forth in such tenders.
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 addit
bills dated September 14, 1961 , ( 91 days remaining until maturity date on

W®
March 15, 1962

^^

tsat-

) and noncompetitive tenders for $ 100.QQQ or less for the

ma

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 December 14, 1961 , in cash o

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

ing December 14, 1961 . Cash and exchange tenders will receive equal treatment

XS3)
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 exeasstioa^ as such, and

TREASURY DEPARTMENT
Washington
FOR

IMMEDIATE RELEASE, ]£SQ8££0&3K

December 6 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
cash and in exchange for Treasury bills maturing December 14. 1961 y ia the
of $ 1,701,376,000, as follows:

m
91 .day bills (to maturity date) to be issued December 14, 1961

,

So
in the amount of $1,100,000,000 , or thereabouts, representing an additional amount of bills dated September 14. 1961 y
and to mature March 15, 1962 , original 1 y issued in the

m
amount of $ 600,608,000
to be freely interchangeable.

, the additional and original bills

182 -day bills, for $ 600,000,000 y or thereabouts, to be dated
December 14, 1961 y and to mature

tTtrne 14.

1qRP

.

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

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

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

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

Tenders will be received at Federal Reserve Banks and Branches up to the clo

hour, one-thirty o'clock p.m., Eastern Standard time, Monday, December 11. 1

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

must be for an even multiple of $1,000, and in the case of competitive tende

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

442
TREASURY DEPARTMENT
WASHINGTON, D.C.
December 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 December l4,196l, in the amount of
$1,701,376,000, as follows:
91-day bills (to maturity date) to be issued December 14, 196l,
in the amount of $1,100,000,000, or thereabouts, representing an
additional amount of bills dated September l4,196l,and to
mature March 15, 1962, originally issued in the amount of
$ 600,608,000, the additional and original bills to be freely
interchangeable.
182-day bills, for $600,000,000, or thereabouts, to be dated
December l4,196l, and to mature June 14, 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 Standard
time, Monday, December 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.
Banking institutions generally may submit tenders for account of
customers provided the names of the customers are set forth in such
tenders. Others than banking institutions will not be permitted to
submit tenders except for their own account. Tenders will be received
without deposit from incorporated banks and trust companies and from
responsible and recognized dealers in investment securities. Tenders
from others must be accompanied by payment of 2 percent of the face
amount of Treasury bills applied for, unless the tenders are
accompanied
by an express guaranty of payment by an incorporated bank
or D-319
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
September l4,196lj[91-days remaining until maturity date on
March 15, 19o2j
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 December 14, 196l,
in cash or other immediately available funds or in a like face
amount of Treasury bills maturing December 14, 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.

TREASURY DEPARTMENT
SVi J

WASHINGTON.. D.
tteesi-roer G, 1361

IMMEDIATE RELEA32

*<•**:

M:Wm

ho
sa
Tre

on
of su

?$ U&dmmim

Tre
holder

ii*-i

wi tl^grtjgfttg njgfcsub s crif^i- qg§|^
clasffftsfflf |flto£--*lPi

1961.

JQMX
IJ-wa^Mtolt^af «s*df

later this month*

D-320

Deees&er 6, 1061

mmzMmm mmm OF TREASUKI'Q cvmm? mommm a&mm
«

TO H O i m S m SERIES F AiD G SAVXHK BONDS MATURING Hi 1962

The Treasury announced today that on xo© oasas or prmuTiinary rsjxprts
holders of $516 million of the $970 million of outstanding Series F and G be
savins bonds maturiag in 1962 Imve exchanged tbeir bonda foy tb* 3*7/0^
Treasury Bonds of 1968, dated June 23, 1960, maturing my 35* 19e8» 2fce
bonds exchanged include $46 rnillion ©f Series F ami $268 3*U*0*<G£3tei<;& G.
Tiis 5-7/^ b o m ^ constitute m euiditional asoiurtfcfrtfae *B,i$7 million
of such bonds (including $376 million held by Federal Mum**

m&mm&

treasury Investment accounts) B O W outstanding. The bands vere offerad to ;o
holders of Series f and 0 bonds maturing 1 B 1962 at a *ttc* of M i S S i ^ e d on
^itii certain interest and other ad^wfesients aw of ISfeceafcer IS, 1961. 131*ty.
^bscjlptioa boo&s m e ©pin for the -twaaly* ©f^ii^Biepfcptioni ffcartU^

be

classes of subscribers from November 20 through Koves&fcy S4, 1961,. and ill
addition, Ejubscrlptions n^re received from individuals through Iteveaber 50,
1961*
A final report of exchangestyrFederal temrm districtB isdll W 1*6*
later this zaonth.
0O0

445
~ 3 ~
IRS is communicating with the coiqp&ni#s and associations whose
assistance will be asked.

0O0

•* 2 **
These studies will, tner@f®3?&# provide a broad range of Infov*
matlon on actual and prospective technological change and *ate* of
obsolescence of capital equipment of industry In general, This Information will be ueei by the Treasury to supplement Its own statistical
studies of current depreciation practices.
Ttm Department expects to announce revised depreciation schedules
for major assets for all industries by the spring of 1962. Ho change
will be mad® in depi

guidelines for any specific industry

prior to that date*
Additional engineering studies covering other industries will b«
started as soon as possible^ & In cases where they are not completed prior to announce

iSC^^tbij
nent of the revisions, the information developed

"will "Us coiapleted^'priar^le^antiot

•%^e,Kii^^TiBeii''i^8|n^^ la'tlew"

be ueed to make adjustments in the new depreciation
schedule*^ *mmmmm*

where the studies show justification for such ehang*

| Studies of this nature will be a continuous part of the process of keeping the
iepreciation schedules as realistic as possible in the light of technological changeSo

fhe six-industry study is scheduled for coi^pletbn by the latter
A4 a^J^-A
part of January* 196a, Secretary Dillon - tgpsadr e\ieh of tne approxiaft^
50 companies and associations involved to cooperate with the IBS
engineers as&lgned to the study so that the deadline will be met

fJL<* U
r^it '' ~*

***^

6
Deeesiber $, 19fil

FOR IMMEDIATE RELEASE
TREASURY 1 ^ 6

DEPRECIATION STUDY OF SIX MAJOR INDUSTRIES

'treasury Secretary Douglas Dillon announced today tfcat t!»
Internal Revenue Service will undertake special engineering studies
of six major industries as part of the Department's review of
depreciation schedules for all industries,
IRS engineers will examine the "useful lives" of aajor types
of ?sachirjery and e^aipasnt Is the following industries 2 aircraft
and parts nanufacturers; automobile manufacturers; electrical
asachinery and equipment maasufacturersj sets! working millinery and
machine toolsj railroads; and steel fl&ils.
The six were selected because they are large, basic
industries and because, saong thea, they represent mjor types of
#. S, business aetiTitr. THey also differ widely In their level
of automation and their recent experience with technological
change.

L. 2 -

December 6, 1961
FOR IMMEDIATE RELEASE
TREASURY ANNOUNCES INTERNAL REVENUE DEPRECIATION STUDY
OP SIX MAJOR INDUSTRIES
Treasury Secretary Douglas Dillon announced today that the
Internal Revenue Service will undertake special engineering studies
of six major industries as part of the Department's review of
depreciation schedules for all industries.
IRS engineers will examine the "useful lives" of major types of
machinery and equipment in the following Industries: aircraft and
parts manufacturers; automobile manufacturers; electrical machinery
and equipment manufacturers; metal working machinery and machine tools;
railroads; and steel mills.
The six were selected because they are large, basic Industries
and because, among them, they represent major types of U. S. business
activity. They also differ widely in their level of automation and
their recent experience with technological change.
These studies will, therefore, provide a broad range of information on actual and prospective technological change and rates of
obsolescence of capital equipment of industry in general. This information will be used by the Treasury to supplement its own statistical
studies of current depreciation practices.
The Department expects to announce revised depreciation schedules
for major assets for all industries by the spring of 1962. No change
will be made In depreciation guidelines for any specific industry
prior to that date.
Additional engineering studies covering other industries will be
started as soon as possible. In cases where they are not completed
prior to announcement of the revisions, the information developed will
be used to make adjustments in the new depreciation schedules, where
the studies show justification for such changes.
Studies of this nature will be a continuous part of the process of
keeping the depreciation schedules as realistic as possible In the light
of technological changes.
The six-industry study is scheduled for completion by the latter
part of January, 1962. Secretary Dillon is asking each of the
approximately 50 companies and associations Involved to cooperate with
the IRS engineers assigned to the study so that the deadline will be
met.IRS is communicating with the companies and associations whose
assistance will be asked.
0O0

- 2-

4 4?

from the Harlem Evening High School. Mrs. Jones was awarded Bachel
and Master degrees in Business Administration by the City College
New York in 1943 and 1957. She has recently been working toward a
Ph.D. in Economics at the Graduate School of Business at New York
University. She is a member 4tHM of the American Economic
Association and the American Association of University Women.
Mrs. Jones is the wife of J. Raymond Jones of New York City.

oOo

ta

V o 'KJ

MRS. RUTH H. JONES NAMED COLLECTOR OF CUSTOMS FOR VIRGIN ISLANDS
Treasury Secretary Douglas Dillon today announced the appointmei

of Mrs. Ruth Holloway Jones of New York City, as Collector of Cust
at St. Thomas, Virgin Islands, effective December 11, 1961.
Mrs. Jones has been employed by the Internal Revenue Service in
New York for more than 25 years. She entered the Service as a
typist and comptometer operator in the 3rd Collection District of
New York City in August 1935. At the time of her appointment as
Collector of Customs she was an Internal Revenue Agent, Reviewer
and Instructor in the Office of the Director of Internal Revenue,
- 'r t
j§0pK? Manhattan/ Included among the various positions Mrs. Jones

has held with the Service are Assistant Head of the Correspondence
Unit, Tax Accountant and Auditor and Group Supervisor of Office
J

Auditors. She has been awarded certificates by the Revenue Service
for Instructor Training Workshop and Audit Specialist Instructor
Training.
Born in New York City on June 27, 1908, Mrs. Jones received her

early education in public schools there, and in 1035 was graduated

TREASURY DEPARTMENT
WASHINGTON, D.C.
December 7, 1961
FOR IMMEDIATE RELEASE
MRS. RUTH Ha JONES NAMED COLLECTOR
OF CUSTOMS FOR VIRGIN ISLANDS
Treasury Secretary Douglas Dillon today announced the appointment
of Mrs. Ruth Holloway Jones of New York City, as Collector of Customs
at St. Thomas, Virgin Islands, effective December 11, 1961.
Mrs. Jones has been employed by the Internal Revenue Service in
New York for more than 25 years. She entered the Service as a
typist and comptometer operator in the 3rd Collection District of
New York City in August 1935. At the time of her appointment as
Collector of Customs she was an Internal Revenue Agent, Reviewer and
Instructor in the Office of the Director of Internal Revenue,
Manhattan District. Included among the various positions Mrs. Jones
has held with the Service are Assistant Head of the Correspondence
Unit, Tax Accountant, and Auditor and Group Supervisor of Office
Auditors. She has been awarded certificates by the Revenue Service
for Instructor Training Workshop and Audit Specialist instructor
Training.
Born in New York City on June 27, 1908, Mrs. Jones received her
early education in public schools there, and in 1935 was graduated
from the Harlem Evening High School. Mrs. Jones was awarded
Bachelor and Master degrees In Business Administration by the City
College of New York in 19^3 and 1957. She has recently been working
toward a Ph.D., in Economics at the Graduate School of Business at
New York University. She is a member of the American Economic
Association and the American Association of University Women.
Mrs. Jones Is the wife of J. Raymond Jones of New York City.
0O0

D-322

-3-

"2

4 S3
friendship for which we are all in his
^\j

debt.
Upon completion of his tour in
•tuiMliiiilflTTr, he took on hi B present duties
as Chairman of one of dritains great
commercial banking
dank.

institutions -- Lloyds

And now we hear that once again

he is goingJ?ack to his first love education - this time as Provost of
Worcester College, at Oxford.
So yoy see in Oliver franks a man
who in less than fifty years reached the
peak in three separate and distinct caree
education, government service and private
business.

Ituly a remarkable record.

It is typical of Oliver Franks that
he also found the time to maintain his

at the outbreak of-war.

454?
There he n rendere

outstanding service to the allied cause.
At the end of hostilities he became
Permanent Secretary of the Ministry, one
of the highest pos i t i ons l open to a aritis!
civil servant.

But he could^not"lono

resist his original call ing.' )n 1946 found
him back at Oxford, thi? time a8 Provost
of wueen's College from which he had
graduated some ?0 years*earlier.
An exceptional academic life opened
up before him, but this was not to'be as
two years^later he was once again drafted
by, his government -- this time to s e H e
as Ambassador to the United StatesC a Durii
his four year?? in Washington he made t a" x
memorable contribution to Anglo-American

TREASURY DEPARTMENT
Washington
^•mn»n^c
FOR RELEASE AM NEWSPAPERS
^RI^Y. DECEMBER 8, 1961

*.
^ £%.

December 7. 1961
"

KtMARKS T T T H t HONORABLE D0U6LAS DILLON
SECRETARY OF THE TREASURY
AT THE ivitQlCAL PROSREiS 0 INNER* OF THE
Uta YORK hOSPITAL-COKWELL wi£0lC«L CENTER,
H E W YORK COLISEUM, NEW YOhK CITY,
THURSDAY, OECEuiBtH 7, 1961, 6 :30 P. wit EST
It 1s a great Pleasure for me to
meet once again with my old friends^of
the New York Hospital a n d n C o r n e l l Judical
School after a nine year interlude.

I am

oarticularly happy to be here tonight
when this great new effort for Medical
Progress is being launched.

ArHV

• feel

it a oreat honor to have the orivilege
of introducing your next speaker? ^Oliver
Franks has had a great career and can f v
look forward to many further

triumphs. y f

Starting life as an educator, he was
called to the British Ministry of Supply

TREASURY DEPARTMENT
Washington

AC;Q
^w
December 7, 1961

FOR RELEASE AM NEWSPAPERS
FRIDAY, DECEMBER 8, 196l

REMARKS BY THE HONORABLE DOUGLAS DILLON
SECRETARY OF THE TREASURY
AT THE
MEDICAL PROGRESS DINNER OF THE NEW YORK
HOSPITAL-CORNELL MEDICAL CENTER,
NEW YORK COLISEUM, NEW YORK CITY
THURSDAY, DECEMBER 7, 196l, 6:30 P.M., EST
It is a great pleasure for me to meet once again with my old
friends of the New York Hospital and Cornell Medical School after a
nine year interlude. I am particularly happy to be here tonight
when this great new effort for Medical Progress is being launched.
And, I feel it a great honor to have the privilege of Introducing
your next speaker.

Oliver Franks has had a great career and can look

forward to many further triumphs.
Starting life as an educator, he was called to the British
Ministry of Supply at the outbreak of war. There he rendered outstanding service to the allied cause. At the end of hostilities he
became Permanent Secretary of the Ministry, one of the highest
positions open to a British civil servant. But he could not long
resist his original calling.

19*1-6 found him back at Oxford, this

time as Provost of Queen's College from which he had graduated some
20 years earlier.
An exceptional academic life opened up before him, but this was
not to be as two years later he was once again drafted by, his
government —

this time to serve as Ambassador to the United States.

45
- 2 During his four years in Washington he made a memorable contribution
to Anglo-American friendship for which we are all in his debt.
Upon completion of his tour in bur Capital, he took on his present
duties as Chairman of one of Britains great commercial banking
Institutions — Lloyds Bank.

And now we hear that once again he is

going back to his first love — education — this time as Provost of
Worcester College, at Oxford.
So you see in Oliver Franks a man who in less than fifty years
reached the peak in three separate and distinct careers; education,
government service and private business. Truly a remarkable record.
It is typical of Oliver Franks that he also found the time to
maintain his keen interest in medical progress * Since 1958, he has
been Chairman of the Board of Governors of the United Oxford
Hospitals.

His interests are catholic. His deep feeling for his

fellow human beings, combined with his expert knowledge of economics
and finance, have made of him one of the world's leading authorities
on what may well prove to be our most crucial problem — economic
development. To all of this he adds a grace

and charm of manner

which make of him one of the free world's first citizens. We are
grateful to him for coming here tonight to talk to us. I give you
the Right Honorable Sir Oliver Franks,

oOo

458
* 46 of ail of our national objectives at home or abroad.
¥ou have an interest ia seeing to it that your goveraateat
is amply equipped and thoroughly geared to take prompt
action whoa it is required.
Progress ia forging better policies in these tea
directions will not solve all our problems. But X have
every confidence that advances can and will be made,
with government and industry, as they have always done,
rising together to meet a common challenge to the
country for which both share a never-ceasing responsibility.

o o 0 o o

46u
- 44 -

attentions ^f**^<*fr^

*'

^» math^ %\X our efforts to support our role ia
Free World security and development and livs^in the
trading area of the mfaa^s&mm&B&Js& rather than
separate from it, will be fruitless if we igaore one
danger of paramount importance — the need to stay
competitive in price and quality. That means government
and industry taust cope effectively with the threat of
inflation.
fills requires price and wage restraint by industry
and labor, and responsible budget policies by government.
A key element la mooting the era of change and challenge
is the ability of labor and industry to work together to
Increase productivity, to maximize the benefits and reduce
the hardships of automation, to expand our

461

**** #a the international front aew

?

trite bargains

£•*. m^mf *^*^ -^€":^ it
between the United States and Western Europe should
also take into some account burden-sharing ia Free1
World security and the economic development and *&•> '
trade of the less developed countries.

Reciprocal

action in the removal of trad© and investment restrictions
of a aomtariff character is also important, as well as
the association of prm^mia tra^Twitk - tto achieve*-^
neat of better wages* '"wmHOmtt- coadifioas and other •*
social objectives where Substandard conditions prevail.
Ms©, the need for Improved allied coordination 1* »**/
trade wi%a the Siao-Soviet Bio® saoaid'ii considered *ste
lest politically wtlvated^«lii^aiea H e Western' s * ^
Alliance.

Likewise, the role of t*& private aeo*sng>

"

ia^ business and industry in t*e^#^e«BS©e'foreign *jU *•***•
aa^o^velop^at of tlse less developedafScountrlesli«R%r ^

462
- 42 The transition and consequent adjustment to
aew trade and competitive conditions will be facilitated
if Omymmm&&&*. conducted la aa atmosphere of healthy
economic growth aad full employment. Care must be taken
to maintain a stroag industrial base. X do aot believe

that the jg*gj£33& adjustment necessary under the President'
new policy will cause the elimination of industries or
viable economic communities. Rather, that policy will
assure opportunities for a stronger W. 8, industrial
economy — with a place in markets at home aad abroad
grounded primarily oa ©\ JB. based production rather than
bifaa^hplaa^s,abroad. The process of adjustment to
increased trade competition must be a movement for less
interference by government in the marketplace rather
than merely a substitution of peraaaeat subsidies for
trade restriction.

*f 63
— 41 «•*

The combined output of purchasing power of the
United States aad Western Europe is more than twice
as great as that of the entire Siae-Soviet Bloc.
Though we have oaly half as much population, far
less than half as much territory, our coordinated
economic strength will represent a powerful force
for the maintenance aad growth of freedom*
While sharp disagreements on method and degree
are certain, let us hope that the debate will be
conducted oa the high plane of adapting our trade
policies to the requirements of free World security.
Eighth, Ifhe new programs of trade aad trade
regulation which will follow upon aay trade aad
t -

tariff bargains struck with Western Europe will have
to be integrated carefully iato both the fabric of
aatloaal policy aad coordinated Free World policy*

46*
— 40 **

More than purely tradiag considerations arefee
involved. If American industry caanot laerease its
sales through aa enlarged common market, aad laerease
this nation's surplus of exports over Imports, our
international payments position and our commitments
for the defease of freedom will be endangered • roe
Ho, the issue that will be laid before the
Congress is not the traditional one of free-trader
or protection for American industries; As President
Kennedy put it yesterday to the HAM, "If the nations
of the West caa weld together oa these problems a
common program of actios as extraordinary in economic
history as NATO was unprecedented ia military history,
the long-range communistic aim of dividing and %$m»
encircling us all is doomed to failure*" abrie of

American manufacturers to increase their ability^
to compete with foreign producers, both at heme
and abroad,
e>wPwv eF^9r*e> ^asByp j "^eis^jp &^mt ^pwm*&-^m^v*m w* wNmm3mmr*m*mmp^m^m' en* mpw ^m^m^m4ummwMMmt%0

initiative to enable the U. S. is keep pace with the
revolutionary changes la the trading wor 14 described
earlier* He called for a new aad bold instrument
of American trade ©#*fcyr He pointed* out that 3® percent of the Free World's industrial production may soon
foe concentrated la two locations «• the V.m S. and an

Vith the accession of the United Kingdom aad a few
other European aatioasf the common market will have
almost twice as many people mAm^Om — aad covers.
nations whose economies have been growing twice as

•urn

3v

""

Fortunately, the world has entered iato aa
entirely new trading era which holds but considerable
promise for our exporters. Ia Europe aad other parts
of the world, thousands of American products are
still eatirely uakaowa. American business is Just
beginning to probe huge potential markets for these
products. Success la selling them will require
bold enterprise aad skillful competition.

46?
- 35 as to sustain the U.S. role la Free World security
aad development aad the soundness of the dollar as
a reserve currency^has already been emphasized.
Here, if ever, there is a aeed for joist effort.
This is where American industry faces up to a great
new challenge. Despite everything government can
do, expanding our exports aad maintaining our
position with regard to imports ia competition with
foreign producers withem*raising new trade barriers
will not be easy. I don't have to tell you that
our friends ia Europe aad Japan are alert and
resourceful competitors. We will need up to date
machinery, expert merchandising aad topflight
sophisticated salesmanship, aad we will have to
employ the latest competitive techniques to do the
job.

- 34 -

470

While at the aatioaal level this lavolvee
primarily the Treasury, the Federal Reserve System,
private banks aad financial institutions, it is also
of direct concern to those who have the responsibility
for meeting the financing needs in business and
industry. On the international level the aewly
organized Organization for Economic Cooperation
aad Development, The International Monetary Fund,
The later-American Bank, the aew AID Agency, aad the
World Bank, are of direct concern to those who trade
abroad or look to increasing market opportunities
ia the less developed countries. These agencies
aad programs deserve the strong support of
responsible leaders in business aad industry.
Seventh, government aad industry should foster
the expansion of our merchandise trade surplus so

471
- 33 -

retraining aad work opportunities for theaeXyouag
people is a common task aad responsibility for all
of us. The price of failure will be high act only
ia economic waste but ia squandered individual
aad aatioaal potential.

•S>jfci

Many of these programs, particularly those ia
education aad training, contribute directly to
economic growth. All of them are necessary la a
society which protects the human dignity of its
citizens. _...
--<-- t . * w * - -;-

Sixth, there should be a continuing coordination
of monetary and fiscal policy at the aatioaal aad
international level to provide adequate credit
on reasonable terms aad assure the smooth
functioning of the international trade aad payments
system.

x

473
- si Fifth, they should iateasify a program foraa
iacreasiag productivity through more efficient use
of maapewer; The first aad basic step is, of
course, to minimize unemployment. Also important
£* improved education and manpower development, the
upgrading of the work force, training and retraining,
the elimination of discrimination fjajr rofrttTmruTf
color, age and sex, and a persistent drive against
both management-aad labor featherbedding.
A basic component of any program for accelerated
growth must be investment la an extension of knowledge
the general education of the population. Business
aad industry, as well as government, have a very
real responsibility ia both education and.worker
re-trainiag. The Presldoat's program for aid to

- 30 President announced last April his intention to do
his part ia this effort as soon as his specific
"first step" proposals clear the Coogress. Nothing
has occurred to change that plan.

- as -

4?5

type of investment to long-term growth: the level
of investment in machinery aad equipment during the
1950*s was about ©£* percent of gross aatioaal product
ia the United States, 11 percent in West Germany,
11 percent in Holland, 9 percent in Italy. 3 percent
in France, and 13 percent ia Japan.
Growth rates — in terms of gross national product
*"% followed the same pattera^ J&, yu^t^eJ al^^^^^f^
*f^c/ds £6*i£d£> jJtk&eS.
Fourth, they should follow depreciation reform
next year with all-out effort to revise aad reform the
basic structure of the personal and corporate income
tax,to re-examine the rates, eliminate the inequities,
close unwarranted loopholes, and provide a broader and
more uniform tax base. Only ia this fashion can the
long-sought tax policy for growth be achieved. The

- 23 major foreiga competitors remained the same or
dropped. Aad — a most important lesson — the
success of Japan, Italy, France, aad West Germany
in stabilising export prices was not the result of
a slower rate of wage increase, but rather, of a
faster rise in productivity.
Depreciation reform will also contribute to our
domestic economy. Equipment modernization aad
greater investment will add momentum to our current
recovery by stimulating the machine tool aad allied
industries aad by providing more jobs. And it will
increase our loag-raage growth potential by broadening
our industrial base and by increasing our export^
markets.
A few figures illustrate the importance of this

- 27 with their European competitors. Therefore, we are
proposing a second step ia the form cf aa across-theboard tax credit for iavestiaeat ia new industrial
equipment that we hope the Congress will approve
next year*
this double incentive for American manufacturers
to modernize their equipment will put them once again
on a comparable basis with European industry, which
has benefited for some time from liberal tax treatment
as a stimulus to modernization. Modern machinery will
make our goods more competitive with goods manufactured
abroad by lowering our unit costs. This is important
because, in recent years, our export prices for
manufactured products rose sixteen percent between
1953 and 1959, while prices of exports by most of our

478
- 26 of machinery aad equipment. To this ead the #
Treasury Department, supported by the President, Nils pursuing a depreciation reform program consisting
of two steps*

A

Finises a realistic aad modernized

set of depreciation schedules for productive equipment,
taking into account recent technological advances.
Our studies ia this area have already resulted la in
a forty percent reduction from twenty-five to fifteen
years in the Internal Revenue Service's guidelines
for the depreciation "lives" of equipment utilized ill
in the textile industry. We anticipate that theme
studies will justify substantial changes for other
industries when they are completed this winter or
next spring*
^5 That reform, helpful though |.t wil^ba, will act
of itself put American producers on a fair footing

479 , 7 ,
- 25 that aa economy at a full employment level with its
consequent maximization of consumer demand will take
up some of the existing slack, paving the way for
capacity expansion.
Second, they should seek to expand research aad
development aad laerease the private incentives aad
capital formation which is needed to translate
technological advances into aew products and services.
A renewed emphasis on individual income incentives and
increasing corporate profits and cash flows is basic
to the devotion of a much higher proportion of total
output to business fixed investment —

a necessity for

healthy growth aad increasing productivity.

Tax and

budget policy are the tools necessary to this emphasis.
laird, they should give a first priority to
Increasing investment for modernization and/or expansion

- 24 These four primary fasters ^
the evolving role of If* S, iadustry
as a aatioaal security base, the need for aa
increased rate of economic growth, the expansion
of market areas and competition, aad the achievement
of a reasonable balance of international paymeats —
create new aatioaal policy imperatives for both
iadustry aad government^.^^^ <4**f4& *W^^ ^^^f^^f
These policies should not be isolated strands,^Vj
spinning off la all directions. Rather, they should
be tied together into a single program.
What are some of the policies% that iadustry aad
government should fashion together?
First, they should work together to complete,,the
economic recovery, which is now well under way, so

r ^ i i-

481
our international payments. Long-term measures
are required to achieve the eveatual elimination
of this basic deficit. **

f

"m

m

There is a related facet of the problem —
preventing or neutralising sudden disruptive 'movements
of short-term capital — so-called "hot money" flows —
caused by such temporary factors as^ disparities in
interest rates between countries and speculation
against the dollar. We save gone far toward solving
this part of the problem. But the elimination of the
basic deficit is still to be accomplished.
Eliminating the basic deficit will ultimately
depead oa our ability to expaad oaf trade surplus by
increasing our exports. Expansion of ourrsales abroad
has become an urgent aatioaal need.^ **» *w**Fs ^

482
- 22 surplus to counterbalance our essential expenditures
abroad? These expenditures include the cost of our
military forces oversoasi that portion of our foreiga
aid which is not spent for American products or
services, aad private American long-term investment
overseas. -mmm^^ f..
Our trade surplus — the excess of commercial
exports over imports of goods and services — is large.
It was $4.3 billion last year. But that surplus was
still $2 billion short of the amount needed to offset
the balance of payments Impact of our vital overseas
programs.
This shortfall betweea our commercial surplus
with other countries aad our major nontrade payments
to other countries constitutes the basic deficit la

••.3' 4 3 3
- 21 which has been ruaaiag in deficit. This is% ^uw*
relatively new problem for us — oae'that we
*,

^

jpj.

acutely conscious of 1'naWWfr in the three-year span
from 1953 through 1030 when our payments deficits
totaled $11 billion aad led to the loss of $5 billion
from our gold supply.
Today, it has become necessary that we conduct
both our public aad private international financial *e
transactions with our balance of payments in mind.
We must concern ourselves not only with how to -mm
our overseas expenditures, but also with finding"ways
to eliminate the impact of those expenditures on our
balance of payments. i>**w*-- w v^rwolai *<A <*
the heart of our international payments problem
is this; how can we generate a large enough traded

48^
- 20 possibly nothing less than the continued existence
of individual liberty.
__. ~u
psTHiiiwr^—t our responsibilities^ unluu^ we s*ruuC
make the most of our economic aad financial resources.
t oys-aofertQviag an adequate growth r 11 n _ nTlnnaCI IJI
A

avert**^ inflation*ase^sy eliminating excessive

unemployment, ^tt is equally important that we
maintain the soundness of the dollar as the key
reserve currency in the Free World trade aad payments
system and attain reasonable equilibrium ia our
international balance of payments.
2fte fourth primary factor of change aad challenge
affecting U. s. Government aad iadustry is our balance
of payments — the accounting that reflects all of our
trade aad financial relatioas with the outside world —

-*84

. is - 485
Confronted by the threat of economic aad political
penetration of the less developed areas aad the threat
of political or military intimidation of the
industrialised societies of Western Europe aad Japaa
by the U.S.S.R., the United States has had to accept
and must continue to discharge its enormous
responsibilities for the security aad development
of the Free World.
To fulfill these responsibilities our Nation ''^
must maintain the military power to deter aggression,
including our bases overseas and forces deployed ia
many parts of the world. We must also sustain

a

*'"":

effective programs of economic assistance to 'the
newly developing nations that will help them to grow
in freedom. The cost is high, but so are the stakes —

486
• 13 While the SinoHSoviet Bloc is largely closed
as a market, it is beginning to penetrate some
markets in competition with U . S . industry aad our
allies.
Dramatic as has been the expaasioa of market
opportunities and the growth of competition abroad
during the last decade, the future will witness
evea greater expaasioa.

nm
mt

,x.,48?
- 17 aad competition between products aad iadustries
hejswmade aew markets aad aew competitioa the normal
pattern for industry in the United States. *

J

our

Today, this factor has taken on aa interaatioaal
importance. i#xm&&%j&\ of ^ '^'1 The emergence aad success" of the European Common
Market aad the European Wree Trade Association, aad
the rapid development of markets aad competitioa
ia other industrialized areas such as Canada aad
Japaa, are well recognized, l>r Mni >,l|Liul,mJ littlallUj.
The launching of the Alliance for Progress with
Latin America, aad the emergence of new markets aad
competitioa ia the less developed countries — from
populous India to some of the smaller states of Africa
present another type of challenge and opportunity.

- 16 " ^f^he postwar period has brought to America*/
X /
iadustry -\particularly the great caemieaj/ industry
of which you are\a P*** ~"

new

^kets aad aew

competitioa. Intensified research aad developmeaiii^l
have opened new markets and expanded existing ones.
It has been estimated that ydar owa industry has ^
spent more money for research,^c\ sales teller,
than aay other. It has also been estimated that
more thaa 50 perceat of the protects now >oid by
the iadustry were aot ia commercial production —•,:**
aad, indeed, many were aot known — ia 1939.#&ia\^
addition to the changing/pattern of market aad
competitioa resulting frem)jjosoarca and development,
diversification, area development aad redevelopmeat^a —

489
- ii During the latter part of the Fifties, our growth
rate fell below 3 perceat.

President Kennedy has

said that a growth rate of 4-1/2 perceat is well
within our capability. Given the increases ia our
labor force that are ahead, aad the expanded productivity we have a right to expect from our advanced
technology aad skilled work force, it is certainly
a realistic goal if —

a most important if —

there

are the increasing investment levels in plant,
machinery, equipment aad facilities of which American
industry is capable aad the market demand for the outpu
A third basic factor of change aad challenge is
the expanding area of markets aad competitioa
involving new patterns of trade.

/-:>•%%

49c
— 14 —
atmosphere of freedom for the uncounted billions
of human beings who will be bora ia the decades
ahead la Asia, Afrioa aad Latin America. Without
help they face poverty, illiteracy aad misery.
We also seed this increased rate of economic
growth to provide employment opportunities for
the twenty-six million young people who will
enter the labor force betweea now aad 1970.
Yet, in recent years, the very time whea the
United States has most needed to marshal Its economic
resources, our growth rate has been lagging. During
the Fifties, while the 0. S. was growing at less than
3-1/2 percent a year ia terms of gross aatioaal product,
Free Coatlaeatal Europe was growing at nearly 5 perceat,
the Soviet Union at better than 6 perceat, aad West
Germaay and Japan at between 7 and 9 percent.

- 13 the attainment aad utilization of superior
power. Military power is derived from economic
strength and foreign policy is based oa both. Hie
greater our economic strength aad rate of growth
aad that of our allies, the more effective is our
defease against aggression, no matter what form it
may take.4?In addition to various military measures,
this economic strength permits the carrylag out of
a positive foreign
our alii

policy which will preserve

and increase the development of freedom

la the uncommitted world

« * $ * . •

to help
ia creating an economic and political future la aa

£32
- 12 "The economic might of the Soviet tmmin
Union is based on the priority growth of
heavy industry; this should insure Soviet
victory ia peaceful economic competitioa
with the capitalistic countries; development of the Soviet economic might will
give communism a decisive edge ia the
international balance of power.
This statement against a contemporary background
points up the need for aa increased rate of economic
growth based on aa expansion of industrial output,
capacity and productivity.
This is needed to provide the basic strength that
will Ump the Nation ahead of potential enemies who
seek to "bury" us either by Outright aggressloa or

- 11 c. the economic growth of the Sino-Soviet
Bloc and its pattern of allocation of
increasing resources to military
strength aad heavy industrial
development.
d. the implications of the growth of
Siao-Soviet economic power to affect
the course of development of the uncommitted or less developed peoples.
To illustrate the second basic factor of chaage
aad challenge affecting 0, S. Industry aad government
we need em^y=*o call^oae witness, in his tea-hour
speech to the 21st Congress of the Communist Party
ia February 1959, Khrushchev summarised his assessment
of the situation ia these words:

4q - 10 - ^

Today it is aot enough for our ladustrial power
to stand reapleadent ia its superior potential —
given a two-year atom-free all-out mobilization.
Our industrial economy-must be used every day in
many ways to maintain aad protect our national
security. Some specific economic considerations
of vital concern to U. S. iadustry suggest themselves,
aamelys - mi o>¥*:^o»est of the una. non-war uses of economic strength
for national security overseas*,r of eaaage
b. the economics of maintalaiag or ex* mmmt
panning our current rate of national JUT
security expenditures ia the framework ty
of our other aatioaal seals* MM •**«*««^

mm

5j|

mm

security are outmoded la I9$4r l$*

is

t

appropriate

> to recall this quotation from Arnold Toyabee/s
\ X'x

x

/

|"A Study of History:"\

\

/

v

} * \ /

\ "Each liak has been a cycle/of invention,

\ A
\
\

/

\

precedents thus set by three thousand years of\
military history, from Goliath's encounter with
x

7

,_

.^

\

David to the piercing of a Magiaot line and a

\

West Wall by the thrust 6^ mechanical cataphracts
and the pin-point marksmanship of archers on winged
steeds, we may expect fresh illustrations of our
theme to be provided with monotonous consistency
as long as mankind is so perverse as to go ok
/ "N

/cultivating the art of war."

43s
- 8 Meanwhile, weapons aad delivery systems of
cataclysmic power have been developed• These are
aa now inescapable part of our current eavironment.
4^0ar national security policy must utilize the
economic aad industrial power of the United States
in eves new ways as well as eld„%n nullum flint we .<*u**r
never fall behind ia the awful race of weaponry,
bote,technologically or la terms of a force ia
being. We can no longer rest comfortably behind a
shield of thousands of miles of water aad space,
coafideat that time aad opportunity to summon our
full industrial power will ultimately tip the scales.
The fact is that some of the 1945 concepts of the
relationship of Industrial supremacy to natioaal

Now, in the 1960's, our Nation is confronted by
a danger which clearly calls for a xevaluation aad
revitalization of the role of U. S. industry in
national security.
Our Nation is threatened by the rulers of onethird of mankind, for whom the State is everything,
aad who seek the permanent subordination of individual
liberty. Supporting this aim Is the Soviet Union's
great and swiftly growing economic strength, its
marked industrial and military advance, and a similar
potential in Red China. This force is supplemented
by a considerable capacity fox political organization
and propaganda which wees/the desire of the underdeveloped
nations to escape from poverty as a means to spread the
communist doctrine.

*9a
. 6 ;he capacit^pf U. S. Industryvto respond to a
A. Xx ^A.
challenge. As oaeAwho worked for man
.private lifexwith many
including the U. SAcnemical industry, I can testi:
to the ability of American industry to meet new
competitioa aad seize aew opportunities. ^Chere
\

A'

\

\

never was ^ time when so\many
factors comb
\
d this response.
The first of these factors is the changing role
of U. S. industry in our national security at a time
whea we are confronted by the challenge of the
Siao-Sovlet Bloc.
The power aad capacity of U. S. iadustry to
protect our aatioaal security has been proved ia the
crucible of two World Wars.

499 •''
«. 5 —
a decisive role in developing aad defending the Free
/

World. Industry also shares with labor rteFteSibiUties
ia setting prices aad wages that have a direct bearing
on the magnitude of these trade surpluses* N*tl£y
The health, welfare and profit-making character of
U. S* iadustry is aot oaly important to the domestic
economy* It is also the best hope for freedom aad
the best example for progress abroad.

- 4 -

~UU

American industry aad commerce create the wealth
aad jobs that provide the great bulk of the revenue
for our system of public finance. ^Bttconducts aad
finances much of the Nation's research aad development,
which create new products, aew processes, aew jobs,
aew consumption of goods and services, and, most
important, aew instruments for keeping the peace. It
furnishes much of the self-generated capital in
profits, depreciation reserves aad personal savings
with which new facilities are procured for the
increase in capacity and productivity that make
possible our economic growth.
American industry produces the goods aad services
to maintain our vital export lifeline and create the
trade surpluses which enable the United States to play

^01
- 3 president, it is coordinating a program to eliminate
the deficits ia our balance of paymeats whioK since
1957 have strained the dollar, the irey/reaerve
X.

currency is the Free World trade/and payments system.
It seeks to avoid alternative periods of inflation
aad recession — or the unprecedented concurrence
of both in recent years, in what thex economists
\

term "cost-push" ox "market power inflatxon".
Either inflation or recession would frustrateN&e
Department's objective of avoiding deficits in
budgets or balances of paymeats. vitv

become a mutual pursuit.
The Treasury Department is particularly concerned
with farthering cooperation and understanding between
fovernment aad iadustry.

Ia these times, the Treasury

can discharge its responsibilities for the sound
financial management of the Nation's affairs to best
advantage If there is a relationship between government
and Industry which breeds teamwork la the aatioaal
interest while tolerating honest differences of opinion
shares industry's desire to promote
onoa\lc growth with full employment
which, among other things, \wiSLlAracllitate the
fiaaaclag on a sound budgetary basis
public expenditures for national security aad
ixtloaalservices.
public seiAt the direction of
public

TREASURY DEPARTMENT
Washington
FOR RELEASE AM NWSPAPERS
December 7, 3£6l
Friday, December 8, 1961.
REMARKS OF THE HONORABLE HENRY H. FOWLER,
c
UNDER SECRETARY OF THE TREASURY, AT TEE
0{J3
ANNUAL DINNER OF THE SYNTHETIC ORGANIC
CHEMICAL MANUFACTURERS ASSOCIATION, HOTEL
ROOSEVELT, NEW YORE, NEW YORE, THURSDAY,
DECEMBER 7, 1961, 7:00 P.M., EST

This is a time of daager, of change, of challenge,
of new competition, aad of opportunity — a time when
free men aad free nations hear enormous responsibilities.
As Americans, we bear them proudly, fe must meet
them together aad we must meet them wisely.
For that reason, this Administration welcomes
such opportunities as this to share views with
business and iadustry oa how to meet these responsibilities.
Common purpose aad coordinated action will follow.
In a hot war, government and industry are drawn
naturally together by the national peril. In the
cold war with communism, the coordination of private
business interest with the national interest should

"TREASURY DEPARTMENT
Washington
December 7, 196l
FOR RELEASE AM NEWSPAPERS
Friday, December 8, 1961
REMARKS OP THE HONORABLE HENRY H. FOWLER,
UNDER SECRETARY OF THE TREASURY, AT THE
ANNUAL DINNER OF THE SYNTHETIC ORGANIC
CHEMICAL MANUFACTURERS ASSOCIATION,
HOTEL ROOSEVELT, NEW YORK, NEW YORK,
THURSDAY, DECEMBER J, 196l, 7:00 P.M.,EST
This is a time of danger, of change, of challenge, of new
competition, and of opportunity — a time when free men and free
nations bear enormous responsibilities. As Americans, we bear them
proudly. We must meet them together and we must meet them wisely.
For that reason, this Administration welcomes such opportunities
as this to share views with business and industry on how to meet these
responsibilities. Common purpose and coordinated action will follow.
In a hot war, government and Industry are drawn naturally
.together by the national peril. In the cold war with communism, the
coordination of private business interest with the national interest
should become a mutual pursuit.
The Treasury Department is particularly concerned with furthering
cooperation and understanding between government and industry. In
these times, the Treasury, can discharge its responsibilities for the
sound financial management of the Nation's affairs to best advantage
if there is a relationship between government and industry which
breeds teamwork in the national interest while tolerating honest
differences of opinion.
American Industry and commerce create the wealth and jobs that
provide the great bulk of the revenue for our system of public
finance. Industry conducts and finances much of the Nation's research
and development, which create new products, new processes, new Jobs,
new consumption of goods and services, and, most important, new
instruments for keeping the peace. It furnishes much of the selfgenerated capital in profits, depreciation reserves and personal
savings with which new facilities are procured for the increase in
capacity and productivity that make possible our economic growth.
American Industry produces the goods and services to maintain
our vital export lifeline and create the trade surpluses which
enable the United States to play a decisive role in developing and
defending the Free World. Industry also shares with labor
responsibilities in setting prices and wages that have a direct bearini
n-^o^
on the magnitude of these trade surpluses.

- 2-

505

The health, welfare and profit-making character of U. S.
industry is not only important to the domestic economy. It is also
the best hope for freedom and the best example for progress abroad.
Let us consider some of the new factors facing American industry
and government — as well as some of the new imperatives and directions
of national policy.
The first of these factors is the changing role of U. S. industry
in our national security at a time when we are confronted by the
challenge of the Sino-Soviet Bloc.
The power and capacity of U. S. industry to protect our national
security has been proved in the crucible of two World Wars. '
Now, in the 1960!s, our Nation is confronted by a danger which
clearly calls for a re-evaluation and revltalization of the role of
U. S. industry In national security.
Our Nation Is threatened by the rulers of one-third of mankind,
for whom the State is everything, and who seek the permanent
subordination of Individual liberty. Supporting this aim is the
Soviet Union's great and swiftly growing economic strength, its marked
industrial and military advance, and a similar potential in Red China.
This force is supplemented by a considerable capacity for economic
penetration, political organization and propaganda which is using the
desire of the underdeveloped nations to escape from proverty as a
means to spread the communist doctrine.
Meanwhile, weapons and delivery systems of cataclysmic power have
been developed. These are a now inescapable part of our current
environment.
Our national security policy must utilize the economic and
industrial power of the United States In ever new ways as well as old.
We must never fall behind in the awful race of weaponry, either
technologically or in terms of a force In being. We can no longer rest
comfortably behind a shield of thousands of miles of water and space,
confident that time and opportunity to summon our full industrial power
will ultimately tip the scales. The fact is that some of the 1945
concepts of the relationship of industrial supremacy to national
security are outmoded in 196l.
Today It is not enough for our Industrial power to stand
resplendent in its superior potential — given a two-year atom-free
all-out mobilization. Our industrial economy must be used every day
in many ways to maintain and protect our national security. Some
specific economic considerations of vital concern to U. S. industry
suggest themselves, namely:
a. non-war uses of economic strength for national
security overseas.

-3b.

5Qs

the economics of maintaining or expanding our
current rate of national security expenditures
in the framework of our other national goals.
c. the economic growth of the Sino-Soviet Bloc
and its pattern of allocation of increasing
resources to military strength and heavy
industrial development.
d. the implications of the growth of Sino-Soviet
economic power to affect the course of
development of the uncommitted or less developed
peoples.
To illustrate the second basic factor of change and Challenge
affecting U. S. industry and government we need call only one witness.
In his ten-hour speech to the 21st Congress of the Communist Party in
February 1959* Khrushchev summarized his assessment of the situation
in these words:
"The economic might of the Soviet Unio& is
based on the priority growth of heavy industry; this
should insure Soviet victory in peaceful economic
competition with the capitalistic countries; development of the Soviet economic might will give communism
a decisive edge in the international balance of power."
This statement against a contemporary background points up the
need for an increased rate of economic growth based on an expansion
of industrial output, capacity and productivity.
This is needed to provide the basic strength that will keep the
Nation ahead of potential enemies who seek to "bury" us either by
outright aggression or the attainment and utilization of superior
economic power. Military power is derived from economic strength
and foreign policy Is based on both. The greater our economic
strength and rate of growth and that of our allies, the more effective
is our defense against aggression, no matter what form it may take.
In addition to various military measures, this economic strength
permits the carrying out of a positive foreign economic policy which
will preserve our alliances and increase the development of freedom
in the uncommitted world.
For example, It Is needed to help in creating an economic and
political future In an atmosphere of freedom for the uncounted
billions of human beings who will be born In the decades ahead in
Asia, Africa and Latin America. Without help they face poverty,
illiteracy and misery.

507
- k We also need this Increased rate of economic growth to provide
employment opportunities for the twenty-six million young people who
will enter the labor force between now and 1970.
Yet, in recent years, the very time when the United States has
most needed to marshal its economic resources, our growth rate has
been lagging. During the Fifties, while the U. S. was growing at
less than 3-1/2 percent a year in terms of gross national product,
Free Continental Europe was growing at nearly 5 percent, the
Soviet Union at better than 6 percent, and West Germany and Japan
at between 7 and 9 percent.
During the latter part of the Fifties, our growth rate fell
below 3 percent. President Kennedy has said that a growth rate of
4-1/2 percent is well within our capability. Given the increases in
our labor force that are ahead, and the expanded productivity we
have a right to expect from our advanced technology and skilled work
force, it is certainly a realistic goal if — a most important if —
there are the increasing Investment levels in plant, machinery,
equipment and facilities of which American industry is capable and
the market demand for the output.
A third basic factor of change and challenge is the expanding
area of markets and competition involving new patterns of trade.
Research and development, diversification, area development and
redevelopment, and competition between products and industries have
made new markets and new competition the normal pattern for industry
in the United States.
Today, this factor has taken on an international Importance.
The emergence and success of the European Common Market and the
European Free Trade Association, and the rapid development of markets
and competition in other industrialized areas such as Canada and
Japan, are well recognized.
The launching of the Alliance for Progress with Latin America,
and the emergence of new markets and competition in the less
developed countries — from populous India to some of the smaller
states of Africa — present another type of challenge and opportunity.
While the Sino-Soviet Bloc Is largely closed as a market, it is
beginning to penetrate some markets in competition with U. S. industry
and our allies.
Dramatic as has been the expansion of market opportunities and
the growth of competition abroad during the last decade, the future
will witness even greater expansion.
Confronted by the threat of economic and political penetration of
the less developed areas and the threat of political or military
intimidation of the industrialized societies of Western Europe and

- 5Japan by the U.S.S.R., the United States has had to accept and must
continue to discharge its enormous responsibilities for the security
and development of the Free World.
To fulfill these responsibilities our Nation must maintain the
military power to deter aggression, including our bases overseas
and forces deployed in many parts of the world. We must also
sustain effective programs of economic assistance to the newly
developing nations that will help them to grow in freedom. The cost
is high, but so are the stakes — possibly nothing less than the
continued existence of Individual liberty.
To meet our responsibilities, we must make the most of our
economic and financial resources. We must achieve an adequate growth
rate. We must avert inflation. We must eliminate excessive
unemployment. And, it is equally important that we maintain the
soundness of the dollar as the key reserve currency in the Free World
trade and payments system and attain reasonable equilibrium in our
international balance of payments.
The fourth primary factor of change and challenge affecting
U. S. Government and industry is our balance of payments — the
accounting that reflects all of our trade and financial relations with
the outside world — which has been running in deficit, ^his is a
relatively new problem for us — one that we became acutely conscious
of in the three-year span from 1958 through i960 when our payments
deficits totaled $11 billion and led to the loss of $5 billion from
our gold supply.
Today, it has become necessary that we conduct both our public
and private International financial transactions with our balance of
payments in mind. We must concern ourselves not only with how to budgel
our overseas expenditures, but also with finding ways to eliminate
the impact of those expenditures on our balance of payments.
The heart of our international payments problem is this: how
can we generate a large enough trade surplus to counterbalance our
essential expenditures abroad? These expenditures include the cost
of our military forces overseas; that portion of our foreign aid
which Is not spent for American products or services, and private
American long-term investment overseas.
Our trade surplus — the excess of commercial exports over
imports of goods and services — is large. It was $4.8 billion last
year. But that surplus was still $2 billion short of the amount
needed to offset the balance of payments impact of our vital
overseas programs.
This shortfall between our commercial surplus with other countries
and our major nontrade payments to other countries constitutes the
basic deficit in our international payments. Long-term measures are
required to achieve the eventual elimination of this basic deficit.

- 6-

vJ ij VJ-

There is a related facet of the problem — preventing or
neutralizing sudden disruptive movements of short-term capital —
so-called "hot money" flows — caused by such temporary factors as
disparities in interest rates between countries and speculation
against the dollar. We have gone far toward solving this part of
the problem. But the elimination of the basic deficit is still to be
accomplished.
Eliminating the basic deficit will ultimately depend on our
ability to expand our trade surplus by increasing our exports.
Expansion of our sales abroad has become an urgent national need.
These four primary factors — the evolving role of U. S. industry
as a national security base, the need for an increased rate of
economic growth, the expansion of market areas and competition, and
the achievement of a reasonable balance of international payments —
create new national policy imperatives for both industry and
government to meet the danger and the challenge of this changing time.
These policies should not be isolated strands, spinning off in
all directions. Rather, they should be tied together into a single
program.
What are some of the policies that industry and government should
fashion together?
First, they should work together to complete the economic
recovery, which is now well under way, so that an economy at a full
employment level with its consequent maximization of consumer demand
will take up some of the existing slack, paving the way for capacity
expansion.
Second, they should seek to expand research and development and
increase the private incentives and capital formation which is needed
to translate technological advances into new products and services.
A renewed emphasis on individual income Incentives and increasing
corporate profits and cash flows is basic to the devotion of a much
higher proportion of total output to business fixed investment — a
necessity for healthy growth and Increasing productivity. Tax and
budget policy are the tools necessary to this emphasis.
Third, they should give a first priority to increasing investment
for modernization and/or expansion of machinery and equipment. To
this end the Treasury Department, supported by the President, is
pursuing a depreciation reform program consisting of two steps.
The first is a realistic and modernized set of depreciation schedules
for productive equipment, taking Into account recent technological
advances. Our studies in this area have already resulted in a
forty percent reduction from twenty-five to fifteen years in the
Internal Revenue Service's guidelines for the depreciation "lives"

- 7-

3lw

of equipment utilized in the textile industry. We anticipate that
these studies will justify substantial changes for other industries
when they are completed this winter or next spring.
That reform, helpful though it will be, will not of Itself put
American producers on a fair footing with their European competitors.
Therefore, we are proposing a second step in the form of an
across-the-board tax credit for investment in new industrial equipment
that we hope the Congress will approve next year.
This double incentive for American manufacturers to modernize
their equipment will put them once again on a comparable basis with
European industry, which has benefited for some time from liberal
tax treatment as a stimulus to modernization. Modern machinery will
make bur goods more competitive with goods manufactured abroad by
lowering our unit costs. This is important because, in recent years,
our export prices for manufactured products rose sixteen percent
between 1953 and 1959* while prices of exports by most of our major
foreign competitors remained the same or dropped. And — a most
important lesson —' the success of Japan, Italy, France, and
West Germany In stabilizing export prices was not the result of a
slower rate of wage increase, but rather, of a faster rise in
productivity.
Depreciation reform will also contribute to our domestic economy.
Equipment modernization and greater investment will add momentum to
our current recovery by stimulating the machine tool and allied
industries and by providing more jobs. And it will Increase our
long-range growth potential by broadening our Industrial base and
by Increasing our export markets.
A few figures illustrate the Importance of this type of Investment
to long-term growth: the level of investment in machinery and equipment
during the 1950's was about 6 percent of gross national product in
the United States, 11 percent in West Germany, 11 percent in Holland,
9 percent in Italy, 8 percent in France, and 13 percent in Japan.
Growth rates — In terms of gross national product — not
unexpectedly followed the same pattern, to the relative disadvantage
of the United States.
Fourth, they should follow depreciation reform next year with
all-out effort to revise and reform the basic structure of the
personal and corporate income tax. We need to re-examine the rates,
eliminate the inequities, close unwarranted loopholes, and provide a
broader and more uniform tax base. Only in this fashion can the
long-sought tax policy for growth be achieved. The President
announced last April his Intention to do his part in this effort as
soon as his specific "first step" proposals clear the Congress.
Nothing has occurred to change that plan.

8-

0 1 i.

Fifth, they should intensify a program for increasing productivity through more efficient use of manpower. The first and basic
step is, of course, to minimize unemployment. Also important are
improved education and manpower development, the upgrading of the
work force, training and retraining, the elimination of discrimination
based on color, age or sex, and a persistent drive against both
management and labor featherbedding.
A basic component of any program for accelerated growth must be
investment in an extension of knowledge, the general education of the
population. Business and industry, as well as government, have a
very real responsibility in both education and worker retraining.
The President's program for aid to education, the provision of
facilities to retrain workers in the Area Redevelopment Program, and
the enactment of the broad retraining program included In the
Manpower Development and Training Act submitted to the last session
of Congress are key programs. Some of them represent items of unfinished business.
Many of these programs, particularly those in education and
training, contribute directly to economic growth. All of them are
necessary In a society which protects the human dignity of its
citizens.
Sixth, there should be a continuing coordination of monetary and
fiscal policy at the national and international level to provide
adequate credit on reasonable terms and assure the smooth functioning
of the international trade and payments system.
While at the national level this involves primarily the Treasury,
the B'ederal Reserve System, private banks and financial institutions,
it Is also of direct concern to those who have the responsibility
for meeting the financing needs in business and Industry. On the
International level the newly organized Organization for Economic
Cooperation and Development, The International Monetary Fund,
The Inter-American Bank, the new AID Agency, and the World Bank, are
of direct concern to those who trade abroad or look to Increasing
market opportunities in the less developed countries. These agencies
and programs deserve the strong support of responsible leaders In
business and industry.
Seventh, government and industry should foster the expansion of
our merchandise trade surplus so as to sustain the U. S. role in
Free World security and development and the soundness of the dollar
as a reserve currency as has already been emphasized.
Here, if ever, there is a need for joint effort. This Is where
American industry faces up to a great new challenge. Despite everything government can do, expanding our exports and maintaining our
position with regard to imports in competition with foreign
producers without raising new trade barriers will not be easy. I
don't have to tell you that our friends in Europe and Japan are alert
and resourceful competitors. We will need up-to-date machinery,
expert merchandising and topflight sophisticated salesmanship, and we
will have to employ the latest competitive techniques to do the job.

- 9-

:U

Fortunately, the world has entered into an entirely new trading
era which holds out considerable promise for our exporters. In
Europe and other parts of the world, thousands of American products
are still entirely unknown. American business is just beginning to
probe huge potential markets for these products. Success in selling
them will require bold enterprise and skillful competition.
Here Is what the government has been doing in this area: the
State and Commerce Departments have greatly increased their services
to exporters. As a result, there Is now much more information available about foreign markets, as well as much more activity to seek
out domestic firms which are capable of entering or expanding their
export trade. Also, we have just taken a second step to reduce
unnecessary risks to U. S. exporters by improving the Export-Import
Bank's system of guaranteeing commercial bank loans to exporters by
creating a broad new program of export credit insurance, utilizing
the facilities of our private insurance companies.
I have already referred to the depreciation reform program
launched to encourage modernization of U. S. productive machinery and
equipment to better enable American manufacturers to increase their
ability to compete with foreign producers, both at home and abroad.
Yesterday, the President announced a new economic initiative to
enable the U. S. to keep pace with the revolutionary changes in the
trading world described earlier. He called for a new and bold
instrument of American trade policy. He pointed out that 90 percent
of the Free World's industrial production may soon be concentrated
in two locations — the U. S. and an expanded European common market.
With the accession of the United Kingdom and a few other European
nations, the common market will have almost twice as many people as
the United States — and cover nations whose economies have been
growing twice as fast as ours -- and will some day represent an area
with purchasing power to rival our own. He noted that it could be our
biggest, our most reliable, our most profitable customer.
But he observed realistically, as we all must, that he does not
have the means to persuade this market area to reduce its external
tariffs to a level which will permit our goods to enter on a truly
competitive basis. He stated his intention of seeking from the
Congress and using in negotiations sufficient bargaining power to
lower common market restrictions against our goods.
More than purely trading considerations are involved. If
American industry cannot increase its sales through an enlarged
common market, and increase this nation's surplus of exports over
imports, our international payments position and our commitments for
the defense of freedom will be endangered.

No, the issue that will be laid before the Congress is not the
traditional one of free trade or protection for American industries.
As President Kennedy put it yesterday to the NAM, "If the nations
of the West can weld together on these problems a common program
of action as extraordinary in economic history as NATO was
unprecedented in military history, the long-range communistic aim of
dividing and encircling us all is doomed to failure."
The combined output of purchasing power of the United States
and Western Europe is more than twice as great as that of the entire
Sino-Soviet Bloc. Though we have only half as much population, far
less than half as much territory, our coordinated economic strength
will represent a powerful force for the maintenance and growth of
freedom.
While sharp disagreements on method and degree are certain,
let us hope that the debate will be conducted on the high plane of
adapting our trade policies to the requirements of Free World
security.
Eighth, the new programs of trade and trade regulation which
will follow upon any trade and tariff bargains struck with Western
Europe will have to be integrated carefully Into both the fabric of
national policy and coordinated Free World policy.
The transition and consequent adjustment to new trade and
competitive conditions will be facilitated If conducted In an
atmosphere of healthy economic growth and full employment. Care must
be taken to maintain a strong industrial base. I do not believe that
the adjustment necessary under the President's new policy will cause
the elimination of industries or viable economic communities.
Rather, that policy will assure opportunities for a stronger U. S.
Industrial economy — with a place in markets at home and abroad
grounded primarily on U. S. based production rather than subsidiary
plants located abroad primarily to get behind tariff walls. The
process of adjustment to increased trade competition should be a
movement for less interference by government in the marketplace rather
than merely a substitution of permanent subsidies for trade restrictioi
On the international front new trade bargains between the
United States and Western Europe should also take into some account
burden-sharing in Free World security and the economic development and
trade of the less developed countries. Reciprocal action in the
removal of trade and Investment restrictions of a nontariff character
is also Important, as well as the association of progress in trade
with the achievements of better wages, working conditions and other
social objectives where substandard conditions prevail. Also, the
need for improved Allied coordination in trade with the Sino-Soviet
Bloc should be considered lest politically motivated state trading
techniques be used to weaken the Western Alliance. Likewise, the role
of
private
business
and industry
in foreign
and
the development
supplement
less developed
to government-to-government
countries
deserves
increased
loansaid
and
attention
grants.
as a growing

- 11 -

^

Ninth, all our efforts to support our role in Free World security
and development and live successfully in the trading area of the
Free World, rather than separate from it, will be fruitless if we
Ignore one danger of paramount importance -- the need to stay
competitive in price and quality. That means government and industry
must cope effectively with the threat of inflation.
This requires price and wage restraint by Industry and labor,
and responsible budget policies by government. A key element in
meeting the era of change and challenge is the ability of labor and
industry to work together to increase productivity, to maximize the
benefits and reduce the hardships of automation, to expand our
export trade and to share equally the responsibility to maintain
price stability. I'his will not be easy but the times demand no less.
For its part, the government has a responsibility to conduct its
affairs so that inflation can be avoided. The President recognized
in his address yesterday that the efforts of business and labor will
be governed in part by the kind of atmosphere the government can help
to create. He said:
"That Is why we need to submit a balanced
budget."
Tenth, and last, it should be the firm purpose of government
and industry to search out more adequate tools to achieve the prompt
action that may be necessary to avoid needless recessions or to minimiz
periods of decline. These can defeat or endanger the achievement of
all of our national objectives at home or abroad. You have an
interest in seeing to it that your government is amply equipped and
thoroughly geared to take prompt action when it is required.
Progress In forging better policies in these ten directions
will not solve all our problems. But I have every confidence that
advances can and will be made, with government and industry, as they
have always done, rising together to meet a common challenge to the
country for which both share a never-ceasing responsibility.

0O0

w ,„. W

STATUTORY DEBT LIMITATION
. November 30, 1961
Washington, i J e C l l . 1 9 6 1 _
Section 21 of Second Liberty Bond Act, as amended, provides that the face amount of obligations issued under authorit
of that Act, and the face amount of obligations guaranteed as to principal and interest by the United States (except such gua
-' ' •• '
,000,000
current reprior 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
$ 2 9 8 , 0 0 0 , 000, C
Outstanding Obligations issued under Second Liberty Bond Act, as amended
Interest-bearing:
Treasury bills
$43,441,902,000
Certificates of indebtedness
5»509 »218,000
Treasury notes
71.487.517.000
$120,438,637,000
Bonds Treasury
75.204,149,650
•Savings (current redemption value)
4 7 > 824,398,527
Depositary
lj?3»306,500
R. E. A. series
21,980 , 000
Investment series
5,122.821.000
128 ,326 , 655 , ^>77
Certificates of Indebtedness Foreign series
575,000,000
Foreign Currency series
46,285,000
621,285,000
Special Funds - Certificates of indebtedness
6,6ll,460,000
Treasury notes
7 ,387 , 853 » 000
Treasury bonds
30.217.837.000
44,217,150.000
Total interest-bearing
293,603,727,677
Matured, interest-ceased
407 ,440 ,272
Bearing no interest:
United States Savings Stamps
51,334,054
Excess profits tax refund bonds
7391916
Special notes of the United States :
Internat'l Monetary Fund series
2,368,000,000
Internat'l Develop. Ass'n. series
115,304,400
Inter-American Develop. Bank series
25,000,000
2,560.378,370

Total

296,571,546,319

Guaranteed obligations (not held by Treasury):
Interest-bearing :
Debentures: F. H. A. & D C Stad. Bds.
314,023,700
Matured, interest-ceased
.
496,175
Grand total outstanding
Balance face amount of obligations issuable under above authority

^14,^19,875
29o t 0OOt^00juH
1,1-LJ, yjj >

Reconcilement with Statement of the Public Debt November 30 > 1961

November^, 1961

(Daily Statement of the United States Treasury,
ff)a
eJ
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

N

—

.
297,010,508,3 J
V.-^t'-^-^M
2 9 {, J2.J , \JCQ t
'r.^o, VD^t •*!

296,886,066,19

D-324

STATUTORY DEBT LIMITATION
, November 30, 1961
A S OI _

,

-i r /'-i

Washington, ^ecj.1

.I9ol

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 guarpnor to maturity at the optit
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, 196I 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, 0 0 0, 0 0 0 ,000
Outstanding Obligations issued under Second Liberty Bond Act, as amended
Interest-bearing :
Treasury bills
$43,441,902,000
Certificates of indebtedness
5,509,218,000
Treasury notes
Bonds -

,

71,48? , 517 , 000

Treasury

75.204,149,650

•Savings (current redemption value)
Depositary
:

47,824,398,527
153,306,500

R. E. A. series

21,980,000

Investment series
Certificates of Indebtedness -

5,122.821,000

Foreign series
Foreign Currency series
Special Funds -

128 , 326 , 655 , 677

575,000,000
46,285,000

Certificates of indebtedness
Treasury notes

621,285,000

6 , 6 1 1 , 4 6 0 ,000
7 ,387 , & 5 3 , 0 0 0

Treasury bonds
Total interest-bearing
Matured, interest-ceased
Bearing no interest:
United States Savings Stamps

30,217,837.000

44,217,150,000
2 9 3 ,603 ,72? , 6 ? ?
40?,440,272

51,334,054

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

739,916
2,368,000,000

Internat'l Develop. Ass'n. series
Inter-American Develop. Bank series

115,304,400
25,000,000

Total
Guaranteed obligations (not held by Treasury):
Interest-bearing :
Debentures: F. H. A. 81 D C Stad. Bds
Matured, interest-ceased
Grand total outstanding

$120,438,637,000

2 ,560 , 3 ? 8 , 3 7 0
296,571.546,319

3l4,023,?00
.

496,175

314,519,875
2 9 6 , 8 8 6 . 066 ,194

Balance face amount of obligations issuable under above authority

-L, -113 J )jJ ,806

Reconcilement with Statement of the Public Debt November 30, 1961

KoveaibeP-'Jo, I96I
(Daily Statement of the United States Treasury,
Outstanding Total gross public debt
Guaranteed obligations not owned by the Treasury

v

(Date)

2 9 ? , 0 1 0 , 5 0 8 ,349
.

Total gross public debt and guaranteed obligations
Deduct - other outstanding public debt obligations not subject to debt limitation

3,14, 5 1 9 y875
.

2 9 ? , 3 2 5 , '^28 , 2 2 4
438., V 6 2 .030

296,886.066,194"

D-324

517

a m u r s or Tin&$t«*s t m u r mm ormiiMZ
%o h® m additional immm of the bill*
1%, 3 M f niitsfe
of 182-^ay hiUa t

of m«4m bllXn and for $600,000,000, m
Tm

details of ih* tvo

Mils
IH^t7 b

MUiQi » A^IIWi

Treasury bill*
LylfFffiiiuaJu

High

8.58?*

,
98.3,7

2!87W1/

If $g0OfO00
of 91-dn:/ bills bi fmt st the l w price way
>f 182-day M 3 l i bid for at th« 1 w pri« urns
19!ft2» TIBSttS ktW&to 901 AMD 4CGEFfED If 9SUBKLflESSIVIJHStRlCTS*

K

of th*

leu lode

i.bflfL&OL

^§i?,0O0

&,rtt,0tN>
1%9S69000
Ghiosgo
St. UmU

m%

??>.t09O9OOQ
28 9 90t 9 0OO
2& V T?8*090
3?968'£90QO
16*968*090

tftim#o9o
129,0111,000
?3.996T900Q
13*178*009
f$96$£9099
l£9668,Q0O

$x9im$m$moy
f/ Includes $57,597,C^O TK*rco*p*ative tenders ,
J/ in. a ©Ottfx»> &§m» of thm sunt® laisgih and for th«

ifio7^S,ooo
fjugmtm
3,376,000
?#$1?*00O
124tf2S^,000
ftiSMOO
8*159,000
$1,37^,901,000

ii6o,7Ue,ooo
1,697,000
19*2^000
2#978,000
>7Jt f 0Q0
%6?9,000
6,339,000
j£$££f0O0
6*098,000
3,608,009
MM 11 Jf NT.ITIIMS

the rafcm rclsUd to th» fso* wevat »f tlw bills p*r«bl» at mrtarlty
i« amunt inv**t«<l, and r*lat» tv« mmber of <
f*Ho«i to ife» actual rmmber of dayc in the mrl*&» *itfe
thui

_jf cP S

,

$600,6?1,000 |/
at th« average price of 9?*ft&
at till* mmmm
m%m of 93.3*7

TREASURY DEPARTMENT
WASHINGTON, D.C.
December 11, 1961
R RELEASE A. M. NEWSPAPERS, Tuesday, December 12, 1961,
RESULTS OF TREASURY'S WEEKLY BILL OFFERING

The Treasury Department announced last evening that the tenders for two series of
lasury bills, one series to be an additional issue of the bills dated September 11;, 1961,
I the other series to be dated December lU, 1961, which were offered on December 6, were
med at the Federal Reserve Banks.; on December 11. Tenders were invited for $1,100,000,00<
thereabouts, of 91-day bills and for $600,000,000, or thereabouts, of 182-day bills.
j details of the two series are as follows:
m OF ACCEF:!~D
ffiETITIVE BIDS:
High
Low
Average

91-day Treasury bills
maturing March 15, 1962
Approx. Equiv.
Price
Annual Rate
99.352 a/
2.561$
99.3U6
2.$67$
99.3U8
2.579$ 1/

182-day Treasury bills
maturing June lit, 1962
Approx. Equiv,
Price
Annual Rate
2.858$
98.555
2.880$
98.51^
2.874$ 1/
98.5U7

a/ Excepting one tender of $200,000
84. percent of the amount of 91-day bills bid for at the low price was accepted
3 percent of the amount of 182-day bills bid for at the low price was accepted
TAL TENDERS APPLIED FOR AND ACCEPTED BY FEDERAL RESERVE DISTRICTS:
iDistrict
I Boston
(New York
(Philadelphia
(Cleveland
I Richmond
(Atlanta
(Chicago
|St. Louis
(Minneapolis
(Kansas City
Dallas
i£an Francisco
TOTALS

Applied For
$
31,35U,000
1,1*08,840,000
29,116,000
59,170,000
13,986,000
30,216,000
234,090,000
28,991,000
21,778,000
37,682,000
16,968,000
161.909,000
$2,07lj.,100,000

Applied For
Accepted
$
18,092,000
$
2U,oU5,ooo
1,107,3*5,000
656,887,000
9,105,000
13,290,000
25,U63,000
38,095,000
3,378,000
13,636,000
7,517,000
22,101,000
12U,299,000
129,07k,000
7,339,000
23,967,000
7,152,000
13,178,000
8,159,000
25,682,000
3,608,000
16,668,000
53,21^,000
123,9U9.000
$1,100,572,000 b/ $1,37U,901,000

Accepted
$ 16,972,000
U60,748,000
2,697,000
19,261,000
2,978,000
5,732,000
6^,679,000
6,339,000
3,892,000
6,098,000
3,608,000
7,687,000
$600,691,000 c/

Includes $238,21*6,000 noncompetitive tenders accepted at the average price of 9
Includes $57,597,000 noncompetitive tenders accepted at the average price of 98.5U7
On a coupon issue of the same length and for the same amount invested, the return on
these bills would provide yields of 2.63$, for the 91-day bills, and 2.96$ for the
lo2-day bills. In-oerest 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.
•325

si Q

TREASURY DEPARTMENT
WASHINGTON, D.C
December 11, 1961
FOR IMMEDIATE RELEASE

WEEKLY BULLETIN OF THE COMPTROLLER OF THE CUREENCY

In accordance with the announcement made November 29, I96I, the
Off ice of the Comptroller of the Currency commence^ with the attached
~[fiAc

IA4JU4>****C-

rf

bulletin a continuous weekly announcement of the receipt of, <*"* action
taken upon, all applications for new charters, branches, mergers,
consolidations, purchase of assets, assumption of liabilities, change of
name or location of Head offices or branches, and conversions from state
to national banks.

JAMES J.CSAXON
Comptroller of the Currency

D- ^

December 11, 196l
FOR IMMEDIATE RELEASE
WEEKLY BULLETIN OF THE COMPTROLLER OF THE CURRENCY
In accordance with the announcement made November 29,
1961, the Office of the Comptroller of the Currency will
commence this week the issuance of a continuous weekly
announcement of the receipt of, and action taken upon,
all applications for new charters, branches, mergers,
consolidations, purchase of assets, assumption of liabilities,
change of name or location of Head offices or branches, and
conversions from state to national banks.

0O0

D-326

TREASURY DEPARTMENT
COMPTROLLER OF THE CURRENCY
WASHINGTON 25
December 11, 1961

BULLETIN NO. 3561-1
INFORMATION PERTAINING TO APPLICATIONS
BRANCHES
Date
12/1/61

12/1/61

Bank

Location

Activity

The United States National
Bank of San Diego, California

N/E Corner Willow and
Foothill, Rialto, San
Bernardino County,
California

The United States National Bank
of San Diego, California

Downtown business district
Pomona, Los Angeles
Filed
County, California

Withdrawn

12/1/61 City National Bank of Baton
Rouge, Louisiana

Intersection of Jefferson
Highway & Old Hammond
Filed
Highway, Baton Rouge,
Louisiana

12/1/61

W. Monroe & 6th Streets, Filed
Wytheville, Virginia

The First National Farmers
Bank of Wytheville, Virginia

12/1/61 First National Bank of
Jacksonville, North Carolina

Mount Olive, Wayne County, Filed
North Carolina

12/2/61 The First National Bank of
Odon, Indiana

Montgomery, Daviess Filed
County, Indiana

12/U/61 Crocker-Anglo National Bank,
San Francisco, California

In or near Brisbane, San Filed
Mateo County, California

12/^/61 Bank of America National Trust
and Savings Association, San
Francisco, California

Vicinity of intersection
of Temple Street & Grand
Avenue in Civic Center
Section of Los Angeles,
Los Angeles County,
California

12/5/61

Mile Road, Wells, York
County, Maine

The Ocean National B an k of
Kennebunk, Maine

Filed

Filed

$2z
-2Date

Bank

Location

Activity

Seattle-First National Bank
Seattle, Washington

Vicinity Eastlake Avenue
E&E.Garfield Street,
Seattle, Washington

12/5/61

Hackley Union National Bank
and Trust Company of
Muskegon, Michigan

N/fa Corner U.S. 31 and M-20
N. Muskegon, Muskegon
Approved
County, Michigan

12/5/61

Security Bank,
Washington, District of
Columbia

Either N. or S. Plaza
Building Elevated 10th
Street Plaza, between D&E
Streets, S.W. Washington,
District of Columbia

12/5/61

Carolina National Bank of
Easley, South Carolina

Greenville Road at Forest
Acres Shopping Center, outside
city limits of Easley,
Approved
Pickens County, South
Carolina

12/5/61

First National Bank of
Arlington, Virginia

801 North Glebe Road,
Arlington, Virginia

12/5/61

The Commercial National Bank,
Camden, South Carolina

!i05 De Kalb Street, Camden,Approved
South Carolina

12/5/61

The Commercial National Bank of 120-122 West Second Street, Approved
Little Rock, Arkansas
Little Rock, Arkansas

12/5/61

Western Pennsylvania National
Bank, McKeesport, Pennsylvania

West Hills Shopping Center,
Broadhead & Beaver Grade
Approved
Road at Beers School and
Narrows Run Road, Moon
Township, Allegheny County,
Pennsylvania

12/5/61

Valley National Bank of Long
Island, Valley Stream,
New York

N/E Corner Merrick Road and
Spruce Street, Wantagh,
Disapproved
Nassau County, New York

12/5/61

The Planters National Bank and 301 Fairview Road, Rocky
Mount,vNorth Carolina
Trust Company of Rocky Mount,
North Carolina

12/5/61

The First National City Bank
of New York, New York

12/5/61

Vicinity of Avenue D and
Rockaway Avenue, Borough
of Brooklyn, Kings County,
New York

Filed

Filed

Approved

Approved

Approved

-3jate

Bank

Location

Activity

L2/5/61

Second National Bank of
Saginaw, Michigan

6081 Dixie Highway, Bridgeport
Township, Saginaw County,
Approved
Michigan

L2/5/61

Sterling National Bank and
Trust Company of New York,
New York

101-25-27 Queens Boulevard
at 67th Drive, Forest Hills,
Borough of Queens, New York
City, New York

The Franklin National Bank of
Long Island, Mineola,
New York

200 Feet South of S/£ Corner
of Smith Street and Broad
Hollow Road E. Farmingdale,
Town of Babylon, Suffolk
County, New York

12/5/61

The Citizens National Bank in
Hammond, Louisiana

1900 W. Church Street, Approved
Hammond, Louisiana

12/5/61

The National Bank of Commerce
in Jefferson Parish,
Louisiana

Intersection of Veterans
Highway and Focis Street,
Metairie, Jefferson
Parish, Louisiana

The Waterbury National Bank,
Waterbury, Connecticut

Junction of Cherry Street
Meadow Street and Rubber
Avenue, Naugatuck, New
Haven County, Connecticut

12/5/61

The National Bank of
McKeesport, Pennsylvania

E. Fifth -Avenue, Plaza, Inc.
E. Fifth Avenue (State Route
11*8) between Westinghouse
Approved
Avenue and Washington Road,
North Versailles Township,
Allegheny County, Pennsylvania

12/6/61

Manufacturers National Bank of
Detroit, Michigan

Vicinity of Fiteeen Mile Road
and Gratiot Avenue, Clinton
Township, Macomb County,
Michigan

12/6/61

First National Bank of
Minoa, New York

Route 290, Fremont Heights,
Town of Manlius, New York

12/6/61

First National Bank of Hawaii,
Honolulu, Hawaii

Area adjacent to the Honolulu
International Airport,
Honolulu, Hawaii

12/5/61

12/5/61

Approved

Approved

Approved

Approved

Disapproved

Withdrawn

Filed

S2A

-hDate

Bank

Location

Activity

BRANCH RELOCATIONS
12/1/61

12/6/61

The First National Bank of
San Jose, California

First National Bank of Oregon,
Portland, Oregon

Los Altos Office from 173
Main Street to 2h0 Third
Street, Los Altos,
California

Filed

S.W. Sixth and Lincoln Branch
2110 S.W. Sixth Avenue to west
half of block bounded by S.
West Fourth & Fifth Avenues
Filed
and S. West College & Hall
Streets, Portland, Oregon

BRANCH PERMITS
12/1/61

The Connecticut National Bank,
Bridgeport, Connecticut

710 Wolcott Road, Wolcott,
62l*7A
New Haven County, Connecticut

12/1/61

The Franklin National Bank of
Long Island, Mineola, New York

2085 Merrick Road, Merrick, 62l|8A
Nassau County, New York

12/1/61

North Carolina National Bank,
Charlotte, North Carolina

1823 Banking Street,
Greenboro, Guilford County,
North Carolina

12A/61

Security First National Bank,
Los Angeles, California

2733 East Main Street, Ventura
Ventura County, California
6250A

12A/61

Bank of America National Trust 608 North Escondido
and Savings Association, San
Boulevard, Escondido, San
Francisco, California
Diego County, California

12A/61

62U9A

6251A

First National Bank of Niles,
Niles, Michigan

Eastgate Shopping Center,
1937 Oak Street, Niles
Township, Berrien County,
Michigan (P. 0. Niles)

12/5/61

The First National City Bank
of New York, New York, New
York

29U0-U2 Hempstead Turnpike,
Levittown, Nassau County,
6253A
New York

12/5/61

The Falmouth National Bank,
Falmouth, Massachusetts

Falmouth Plaza, Junction of
East Main Street, Falmouth
Heights Road and State
625UA
Highway (Route 28) Falmouth,
Massachusetts

6252A

a €L <

-53ate

Location

Bank

Activity

L2/5/61 Society National Bank of
Cleveland, Cleveland, Ohio

17U00 Lorain Avenue
Cleveland, Ohio

L2/5/61 The National Bank & Trust
Company of Fairfield County,
Stamford, Connecticut

Berkshire Shopping Center 57-61
Newton Road, Danbury, Fairfield
County, Connecticut

6256A

12/5/61 The Citizens National Bank of
Glasgow, Kentucky

Southeast Corner of Green and
Washington Streets, Glasgow,
Kentucky

6257A

12/6/61

Citizens National Bank, Los
Angeles, California

15722 Gale Avenue, Los Angeles
County. California (P.O. La
Puente)

6258A

The Citizens National Bank of
Havre De Grace, Maryland

313 North Union Avenue, Havre
De Grace, Maryland

12/7/61

6255A

NEW BANKS
Date

Activity

Location

12A/61

Indian Harbor Beach Area,
Brevard County, Florida

Filed

12/6/61

Riverside, California

Disapproved
CONVERSION

Date
12/5/61

Activity

Bank
The Savings Deposit B a nk & Trust Company,
Elyria, Ohio
TO
First National Bank of Elyria
CHARTER ISSUED

Date
12/1/61

Location
Seneca National Bank of Wichita, Wichita,

Sedgwick County, Kansas
Capital - $300,000
Surplus - $150,000

Approved

6259A

52b
-6TITLE CHANGES
Date

Bank

Activity

12/6/61

The Ashuelot-Citizens National Bank of
Keene, Keene, New Hampshire
TO
Ashuelot National Bank of Keene

Approved

12/6/61

Oklahoma National Bank of Chickasha,
Oklahoma
TO
Oklahoma National Bank & Trust
Company of Chickasha

Approved

HEAD OFFICE RELOCATIONS
Date
12/7/61

Bank
Central National Bank and Trust
Company of Enid, Oklahoma
101 North Grand Street
TO
32U West Broadway, Enid

Activity
Approved

12/7/61 Moultrie National Bank, Moultrie, Georgia Approved
k First Avenue, S. E.
TO
S/E Corner Intersection of First Street,
S. E. and Second Avenue, S. E., Moultrie
12/8/61 Gulf Coast National Bank of Alameda, Texas Filed
ll;008 Alameda Road
TO
Westbury Square Shopping Area, Chimney Rock
Road West Belfort Avenue
12/8/61 The First National Bank in Big Spring, Filed
Texas
201 Main Street
TO
U00 Main Street, Big Spring
APPLICATIONS TO CONSOLIDATE, MERGE, AND PURCHASE ASSETS AND
ASSUME LIABILITIES RECEIVED BY THE COMPTROLLER OF THE CURRENCY
December 5
The Pennsylvania National Bank and Trust Company of Pottsville, Pennsylvania
(Charter No. 1663) to merge with The First National Bank and Trust Company
of Orwigsburg, Pennsylvania (Charter No. U;08) under charter of The Pennsylvania
National Bank and Trust Company of Pottsville.

-7fhe Juniata Valley National Bank of Mifflintown, Pennsylvania (Charter No. 5lU7)
;o consolidate with The First National Bank of Millers town, Pennsylvania
(Charter No. 7156) under charter of The Juniata Valley National Bank of
ftf flint own.
CERTIFICATES ISSUED APPROVING APPLICATIONS TO CONSOLIDATE AND MERGE
Milan State Bank, Milan, Michigan into National Bank and Trust Company of
tan Arbor, Michigan, effective as of the close of business December 2, 1961.
Merger effected under the charter and title of National Bank and Trust
Company of Ann Arbor. Capital stock of merged bank $1,350,000 divided
into 67,500 shares of common stock, $20 par value. In connection with this
merger certificate issued to receiving association authorizing establishment
of branch at 9 Wabash Street, Milan, Washtenaw County, Michigan (main office
location of Milan State Bank) Certificate No. 62U6A.
COMMON CAPITAL STOCK INCREASED
Date

Bank

From

To

Aggregate

12/1/61

The First National Bank
of Bethany, Oklahoma

$100., 000

$200,000

$100,000

sale

12A/61

The First National Bank of
Holly Hill, South Carolina

$125,000

$150,000

$ 55,ooo

sale

12A/61

Bank of America National
Trust and Savings
Association, San Francisco,
California

12/5/61

Peoples National Bank & Trust
Company of Bay City, Michigan

$160,000,000

$168,000,000

stock
dividend

$2,200,000

$2,61*0,000

stock
dividend

12/6/61

$1,250,000
The First National Bank of
Somerset County, Bound Brook,
N. J., Bound Brook, New Jersey

$1,562,500

$822,952

sale

12/6/61

First National Bank of
Eau Gallie, Florida

$325,000

$U87,500

$U55,ooo

sale

12/6/61

The First National Bank of
Yarmouth, Yarmouth Port,
Massachusetts

$150,000

$180,000 $ 60,000 sale

Submitted by:

JAMES J. SAXON
Comptroller of the Currency

»-> C. w

TREASURY DEPARTMENT
WASHINGTON, D.C
December U , 1961

FOR IMMEDIATE RELEASE

COMPTROLLER OF THE CURRENCY INFORMS ALL NATIONAL AND DISTRICT OF COLUMBIA
BANKS OF THE FINANCIAL STATUS OF HIS OFFICE, THE CONDITION
OF THE EXAMINATION WORK, AND A NEW SCHEDULE OF FEES.

In accordance with his policy of full disclosure, Comptroller
of the Currency James J. Saxon today announced that a letter has
been addressed to all national and District of Columbia banks under
date of December 8, 1961 informing them of the financial status of
the Comptroller's office, the condition of the examination work, and
a new schedule of examination and other fees which has been adopted.
A copy of that letter is attached.

D-327

//
James J. ^axron
Gromptroller of the Currency

2°
TREASURY DEPARTMENT
WASHINGTON, D.C
December 11, 196l

FOR IMMEDIATE RELEASE
COMPTROLLER OF THE CURRENCY INFORMS ALL NATIONAL AND DISTRICT OF COLUMBIA
BANKS OF THE FINANCIAL STATUS OF HIS OFFICE, THE CONDITION
OF THE EXAMINATION WORK, AND A NEW SCHEDULE OF FEES.

In accordance with his policy of full disclosure, Comptroller
of the Currency James J. Saxon today announced that a letter has
been addressed to all national and District of Columbia banks under
date of December 8, I96I informing them of the financial status of
the Comptroller's office, the condition of the examination work, and
a new schedule of examination and other fees which has been adopted.
A copy of that letter is attached.

D-327

r- >-

S ^ii
»-» \J \,_t

TREASURY DEPARTMENT
COMPTROLLER OF THE CURRENCY
WASHINGTON 25
ADDRESS REPLY T O
'COMPTROLLER OF T H E C U R R E N C Y "

December 8, 1961

Copy of letter sent to the presidents of all
national and District banks.

The Office of the Comptroller of the Currency does not operate
on Federally appropriated funds, its income being derived from assessments paid by national and District of Columbia banks. This income
maintains the Office. The capacity and efficiency with which the Office
can discharge its m a n y statutory and other responsibilities is dependent
upon the adequacy of this income. Similarly, it has an important impact upon the quality, character and extent of the essential legal, administrative and legislative services of the Office.
Beginning with this letter, I shall undertake to keep you informed
in detail, at least once annually, of our financial status. To this end I
a m enclosing for your information a detailed statement showing our comparative income and expense for the years 1957 through 1961. This
statement discloses the excess of total costs over total income and our
resulting unexpended funds at each year end. These costs have materially exceeded total income for each of these years. The total excess of
expense over income for the five year period ending December 31, 1961,
will be $2,802,873, including $586,652 estimated excess of expense over
income for the year 1961.
As shown by the enclosed statement, during the period beginning
with the year 1957 and ending with the year 1961, the semiannual assessment rates have ranged from 3£ to 3-l/2£ per $1,000 of assets in excess
of $25,000 as shown in each bank's Reports of Condition on the assessment collection dates. During this period the m i n i m u m semiannual
charge of $75 for the first $25,000 of assets has not changed. These
assessment rates have not been adequate in relation to the increasing
volume of work occasioned by the substantial growth of banks and the
increased number of banking units. The result has been that our unexpended funds have during this five year period decreased from $5,304,083,

-2 -

JOi-

the balance on hand at the beginning of the period, to $2,501,210, the
estimated balance on December 31, 1961. In effect, expenses of about
$2,803,000 incurred during this five year period have been met from
the income of prior years.
The unexpended funds of $2,501,210 are actually encumbered to
the extent of approximately $1,500,000, representing accrued liabilities
on account of accumulated annual leave for which our employees must
be compensated upon separation from this Office, and other accrued
expenses. However, I believe it would be in accordance with sound
accounting principles to make a reasonable annual appropriation out of
current income in order thereby to provide, over a period of years an
adequate segregated reserve for these liabilities. If full provision for
such a reserve were now to be made, our unencumbered funds at the
current year end would amount to approximately $1,000,000, or the
equivalent of operating expenses for about one month.
In my opinion, our unencumbered funds should be gradually increased as conditions permit from income to an amount sufficient to
provide a general reserve fund which will at all times be sufficient to
cover the cost of operating the Office. That fund, to the extent feasible,
will be invested in United States Treasury obligations so that w e m a y
receive the m a x i m u m safe income possible in accordance with past
practice.
This Office must fully meet its express and specific obligations
prescribed by law. Specifically, I must by law insure that the statutory
m i n i m u m number of examinations are made each year. This has not
been possible in recent years, largely because of limitations and restrictions imposed on the number of personnel the Office has been permitted to employ. It is presently estimated that as of December 31,
1961, there will be 581 banks located in ten of the twelve Federal
Reserve Districts, having aggregate resources of $27,196,000,000,
which will not have been examined three times during the two year
period 1960-1961, the m i n i m u m statutory requirement.
A statement is enclosed showing more detailed information concerning national banks located in each of the twelve Federal Reserve
Districts, the aggregate resources, the number of such banks by Federal Reserve District, and the aggregate resources which will not
have been examined three times during the two year period ending
December 31, 1961. Although a reduction in the present statutory mini m u m examination requirement has been suggested as a possible remedy,
I do not believe that under existing circumstances it would be in the

- 3-

interest of the national banking system to recommend or support such a
proposal.
In view of the foregoing facts and circumstances, I find it necessary to increase the present semiannual assessment rate of 3-l/2£ per
$1,000 of assets exceeding $25,000 to a semiannual rate of 4£ per $1,000
of total assets. The existing m i n i m u m assessment of $75 for the first
$25,000 of assets will be increased to a semiannual m i n i m u m assessment of $100. The existing deduction of $25,000 will be eliminated.
Such increases will apply for at least the calendar year 1962. These
assessment changes will be effective on and after the next assessment
date.
In order to provide for the assessment of fees which will more
nearly cover the costs incurred in performing special services for banks
effective with such services undertaken on and after the date of this
letter, the following changes in the rates presently charged are hereby
prescribed for the services indicated:
Present New
Per Day Rate
Asst. Asst.
Type of Investigation
New Branch and Change
of Branch Location

Examiner

Examiner

$82.00

$44.00

Per Day Rate

Examiner

$100.00

Examiner

$50.00

New Bank 64.00 34.00 100.00 50.00
Miscellaneous 64.00 34.00 100.00 50.00
Type of Examination
Affiliate 64.00 34.00 100.00 50.00
Extra 64.00 34.00 100.00 50.00
Trust 64.00 34.00 100.00 50.00
Effective November 28, 1961, a filing fee of $500 is being assessed
with respect to each application for approval of a merger, consolidation,
or purchase of assets and assumption of liabilities. N o such fee has been
imposed in the past.

533
-4 -

I am hopeful that the revised semiannual assessment rate, the
above-mentioned increased rates of charges for special services and
the new filing fee, will produce sufficient additional income to offset the
deficit for 1961 and the additional expense anticipated during 1962. I
a m unable to furnish you with a reliable estimate of expenses because
of the contemplated changes in the policies and procedures of the Office,
particularly with respect to the sorely needed expansion of our examining force pointed out in this letter.
This Office historically has set a high national standard with respect to the quality and effectiveness of bank examinations. This is the
most serious responsibility with which it is charged by law. I intend
to make sure that the quality and effectiveness of national bank examinations shall be of the highest order. However, if the Office is to be able
to discharge its duties and maintain and improve existing standards, it
is apparent that our examining force must be expanded. This expansion
must be accomplished during a period of rising salary costs and while
some states are admirably striving for higher examination standards
and enhancing their competitive capacity to attract available, competent
and interested individuals by offering increasingly attractive compensation and other benefits.
I believe that the time has come for exploration of a means of
allocating an equitable portion of the examination expense of this Office
to the Federal Deposit Insurance Corporation and the Board of Governors
of the Federal Reserve System. You know that the national banks of the
country carry disproportionate costs for examinations in relation to cost
to state banks which enjoy the benefit of joint Federal and State examinations. Furthermore, this Office makes available to the aforementioned
Federal agencies, copies of examination reports, and other materials relating thereto, at a cost to the Federal Reserve Banks of $10.00 per examination report and at no cost to the Federal Deposit Insurance Corporation. This disproportionate burden carried by the national banking
system should be mitigated.
All of us are conscious of the rising cost of bank operations. I
know that each national and District of Columbia bank will, in the light
of its own current experience, m a k e a realistic appraisal and judgment
of the facts and circumstances set forth in this letter.
Sincerely, ^>p>

-~— Q^s^^L^—¥^^

a_

James J. Saxon
Enclosures

Comptroller of the Currency

SI A
COMPTROLLER OF THE CURRENCY
EXAMINING DIVISION
COMPARATIVE ASSESSMENT & OTHER INCOME BY
CALENDAR YEARS 1957 THRU DECEMBER 31. 1961. INCLUSIVE

Assessment Source

Commercial Examinations
Branch Examinations
Sub-total

; 7,93^,256
196.225
8,130,481

Trust Examinations
Affiliate Examinations
Extra Examinations
Branch and/or Removal
Investigations
Miscellaneous
Sub-total

Copies Reports Sold
Investment Income and
Miscellaneous
Closed Receivership
Trust Funds
Sub-total
Less - Refunds of
Assessments
TOTAL

1958

1252

I960

1252

TOTAL
1957 - 1961

19611/

$ 8,010,667 $ 9,018,037
215.400
234.280
8,226,067
9,252,317

$ 9,964,447
254.675
10,219,122

$ 10,403,785
282,350
10,686,135

$ 45,331,192
1,182,920
46,514,122

413,831
2,194
4,997

435,896
2,038
8,124

470,215
3,606
9,416

508,007
2,354
2,375

525,503
2,290
3,402

2,353,452
12,482
28,314

60,765
30.663
8,642,931

63,162
32,038
8,767,325

86,153
25,469
9,847,176

98,183
31,800
10,861,841

96,822
37.592
11,351,744

405,085
157,562
49,471,017

92,554

90,642

91,410

83,865

89,570

448,041

99,771

130,228

72,077

133,774

93,745

529,595

23,545
,
8,868,801

98,365
9,086,560

61,450
10,072,113

122,997
11,202,477

110.866
11,645,925

427.223
50,875,876

1,835

J22

5.628

-510

9,2io

$ 9,084,725 $ 10,071,516

$ 11,196,849

$ 11,645,415

$ 50,866,566

740
$ 8,868,061

COMPARATIVE COSTS OF OPERATION BY CALENDAR
YEARS 1957, THRU DECEMBER 31, 1961,INCLUSIVE

1252

Cost Classifications

1251

$ 6,524,143
Salaries (Gross)
1,406,691
Per Diem Allowances
532,248
Travel Expenses
141,408
Rent
Employer's Retirement,
Insurance and F.I.C.A.
Contributions
214,233
227,768

$ 7,459,909
1,544,781
549,037
146,757

$ 9,046,491

$10,399,020

TOTAL

Semi-Annual Assessment
Rates per $1,000 of
Assets
Net Excess of Total
Costs over Total
Income
Total Unexpended Funds
as of December 31st,
(exclusive of nonrecurring acquisition
in 1957 of $209,452
of non-income operating funds)

3\$
34
$

1959

i960

$ 7,526,584 $ 8,104,046
1,618,450
1,651,370
582,444
579,933
160,958
152,633

TOTAL
1957 - 1961

12^
$ 8,643,027
1,857,191
636,726
166,189

$ 38,257,709
8,078,483
-2,880,388
767,945

648,670
280,264

2,449,105
1.235.809

$ 10,622,060 $ 11,369,801 $ 12,232,067

$ 53,669,439

503,160
195.376

507,407
234,542

3(

3#
3#

y&
550,5^ $

575,635
297.859

3i*
jy
172,952

178,430

$ 1,314,295

$

$ 5,125,653

$ 3,811,358

$ 3,260,814 $ 3,087,862

ft
3h
$

586,652

$

$ 2,501,210

\J
Including estimated figures, November thru December 1961.
(Note) Total Unexpended Funds as of December 31, 1956, $5,304,083 - Semi-Annual Assessment Rates
for 1956, 3i£ and 31/

2,802,873

Examination
National Banks

ederal
eserve
istrict

Number
of Banks
4-12-61

Aggregate
Resources
4-12-61
(Millions)

Number of Banks (Commercial departments)
which will not be
examined three times
in i960 -1961

Aggregate
Resources
(Millions)
3,278
1,033

1

231

2 (A)

331
425
381
312
349
587
319
347
620
513
108

6,495
16,844
6,178
11,357
6,71^
10,504
22,313
4,982
4,680
8,101
10,711
27,217

52
37
19
115
20
71
88
37
9
0 (D
133
0 (2)

5,^25
7,243

4,523

136,100

581 (3)

27,196

3
4
5
6
7

(B)
(B)
(A)
(B)

8
9 (B)

10
11 (A)

12

968
4,18.9

712
989
187
0
3,172

0

(A) These districts received help from other districts in i960
(B) These districts gave help to other districts in i960
(1) Will complete statutory examinations and have 360 man weeks
available for other work
(2) Will complete statutory examinations and have 35^ nian weeks
available for other work
(3) Includes:
Number
of banks

Size Groups

Aggregate
Resources

2
2
15
38
524

Over $1,000,000,000 $ 3,955,000,000
$500,000,000 - $1,000,000,000
1,378,000,000
$250,000,000 - $ 500,000,000
5,661,000,000
$100,000,000 - $ 250,000,000
5,593,000,000
under $100,000,000
10,609,000,000

581

$27,196,000,000

- 3f — s*\ 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,

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 int

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 ar

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 e

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.

Banking institutions generally may submit tenders for- H^rwm-r. m- ^^T.rW---

r"

~z~

'(provided the names of the customers are set forth in such tenders.
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.

V

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 addit
bills dated September 21, 1961 , ( 91 days remaining until maturity date on
March 22, 1962 ) and noncompetitive tenders for $ 100,000 or less for the

182 -day bills without stated price from any one bidder will be accepted in fu
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 December 21, 1961 y in cash o

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

ing December 21, 1961 . Cash and exchange tenders will receive equal treatment

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 arssr exemBtioa- as such, and

TREASURY DEPARTMENT
Washington
FOR IMMEDIATE RELEASE, MW%3%B£% December 13, 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,
cash and in exchange for Treasury bills maturing December,21, 1961 , in the amount
of $ 1,700,556,000, as follows:
%£%
91 -day bills (to maturity date) to be issued December 21, 1961 ,
in the amount of $ 1,100,000,000 , or thereabouts, representing an additional amount of bills dated September 21, 1961,
and to mature

March 22, 1962

, originally issued in the

amount of $ 600,215,000 , the additional and original bills
to be freely interchangeable.
182 -day bills, for $ 600,000,000 , or thereabouts, to be dated
December 21, 1961 , and to mature

June 21, 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 fa

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

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

Tenders will be received at Federal Reserve Banks and Branches up to the clos

hour, one-thirty o'clock p.m., Eastern Standard time, Monday, December 18, 19

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

must be for an even multiple of $1,000, and in the case of competitive tender

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

r ~ /"•> f™\

TREASURY DEPARTMENT
WASHINGTON, D.C.
December 13* 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 December 21,1961, in the amount of
$ 1,700,536,000, as follows:
91-day bills (to maturity date) to be issued December 21, 196l,
in the amount of $1,100,000,000, or thereabouts, representing an
additional amount of bills dated September 21,196l,and to
mature March 22, 1962, originally issued in the amount of
$600,213,000,
the additional and original bills to be freely
interchangeable.
182-day bills, for $600,000,000, or thereabouts, to be dated
December 21,1961, and to mature June 21, 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 Standard
time, Monday, December 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.
Banking institutions generally may submit tenders for account of
customers provided the names of the customers are set forth in such
tenders* Others than banking institutions will not be permitted to
submit tenders except for their own account. Tenders will be received
without deposit from incorporated banks and trust companies and from
responsible and recognized dealers in investment securities. Tenders
from others must be accompanied by payment of 2 percent of the face
amount of Treasury bills applied for, unless the tenders are
D-328
or
accompanied
trust company.
by an express guaranty of payment by an incorporated bank

- 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
September 21,1961/91-days remaining until maturity date on
March 22, 1962)
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 December 21, 1961,
in cash or other immediately available funds or in a like face
amount of Treasury bills maturing December 21,196l. 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 b^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 during the taxable year for which the
return is made, as ordinary gain or loss.
Treasury Department Circular No. 4l8, Revised, and this notice,
prescribe the terms of the Treasury bills and govern the conditions
0O0 may be obtained from any
of their issue. Copies of the circular
Federal Reserve Bank or Branch.

-••:i*

v)
COTTON WASTES
tin pounds)
COTTON CARD STRIPS made from cotton having * staple of leas than 1-3/16 inches in length, COMBER
WASTE, LAP WASTE, SLIVER WASTE, AND ROVING 7JASTE, 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 Italys
: Established
j TOTAL QUOTA

Country of Origin
•

•-

:

United Kingdom 4,323,457
Canada
*
France
.
British India
Netherlands
.
Switzerland .
Belgium
Japan
China
Egypt
Cuba .
Germany
Italy
.

__

239,690
227,420
69,627 v
68,240 *
44,388 *
38,559
341,535 n
17,322
8,135
6,544
76,329
21.263
5,482,509

Total Imports
Sept. 20, 1961, to
Dec. 11. 1961
1,535,670
239,690
75,807
69,627
22,747
42,019

Established
33-1/3* of
Total Quota

Imports
Sept, 20, 1961
to Dec. 11. 1961

1,441,152

1,441,152

75,807

75,807

22,747
14,796
12,853

22,747
12,505

34,462

25,443
7.088

23,484

2,355,022

1,599,886

1,575,695

335,000

J/ Included in total imports, column 2.
Prepared in the Bureau of Customs.
The country designations listed in this press release are those
specified in Presidential Proclamation No. 2351 of September 5, 1939,
Since that date the names of certain countries have been changed.

V

TREASURY DEPARTMENT
Washington, D. C.
IMMEDIATE RELEASE
THURSDAY, DECEMBER 14, 1961.
D-329
r
Preliminary data on imports for consumption of cotton and cotton waste chargeable to the quotas
established by the President's Proclamation of September 5, 1939, as amended
COTTON (other than linters) (in pounds)
Cotton under 1-1/8 inches other than rough or harsh under 3/4"
Imports September 20, 19$1. t o pec. 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
475,124
5,203
237
9,333

Imports

Country of Origin

Established Quota

Honduras
Paraguay
Colombia
Iraq
British East Africa ...
8,883,259
Netherlands E. Indies .
618,723
Barbados
1/Other British W. Indies
114,908
Nigeria
2/0ther British W. Africa
3/Other French Africa ...
Algeria and Tunisia ...
779,456

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

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, 196! - p ^ . 11 , i % 1
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

548,588

**-, 565,6k2

TREASURY DEPARTMENT
Washington, D. C.

(. ,v

IMMEDIATE RELEASE

D-329

THURSDAY^ DECEMBER 14, 196l.

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, 1961. to Dec. 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

Imports

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

779,456

475,124
5,203
237
9,333

8,883,259
618,723
114,908

Country of Origin

Established Quota

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 ...

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

l/ Other than Barbados, Bermuda, Jamaica, Trinidad, and Tobago.
2/ Other than Gold Coast and Nigeria.
3/ Other than Algeria, Tunisia, and Madagascar.
Cotton 1-1/8" or more
Imports August 1, 1961 - Dec. 11. 10*1
Established Quota (Global) - 45,656,420 Lbs.
Staple Length
1-3/8" or more
1-5/32" or more and under
1-3/8" CTanguis)
-1-1/8" or more and under
1-^/8"

Allocation
39,590,778
1,500,000
4.56S.624-2

Imports
39,590,778
548,588

i«2—'

COTTON WASTES
(In pounds)
COTTON CARD STRIPS made-from cotton having * staple of less than 1-3/16 inches in length, COMBER
WASTE, LAP WASTE, SLIVER WASTE, AND ROVING 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*
Established
TOTAL QUOTA

Country of Origin

United Kingdom
Canada
France
British India
Netherlands
Switzerland ,
Belgium
Japan
ChinaEgypt
Cuba
Germany
Italy

Total Imports
Sept. 20, 1961, to
Dec. 11, 1961

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

1,535,670
239,690
75,807
69,627
22,747
42,019

5,482,509

.

Established s
Imports
33-1/3$ of : Sept. 20, 1961
Total Quota : to Dec. 11. 1961
1,441,152

1,441,152

75,807

75,807

22,747
14,796
12,853

22,747
12,505

34,462

25,443
7.088

23,484

2,355,022

1,599,886

1,575,695

335,000

\J Included in total imports, column 2,
Prepared in the Bureau of Customs.
The country designations listed in this press release are those
specified in Presidential Proclamation No. 2"351 of September 5, 1939,
Since that date the names of certain countries have been changed. .

V

-2-

Period and Quantity

Commodity

: Unit
Imports
: of
: as of
:Quantity;Dec. 2. 1Q6

Absolute Quotas:
Butter substitutes, including
butter oil, containing 45%
or more butter fat

Calendar Year

Cotton products, except cotton
wastes, produced in any stage
preceding the spinning into
yarn

12 mos. from
Sept. 11, 1961

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

1,200,000

Pound

Quota Filled

1,000

Pound

Quota Filled

12 mos. from
Aug. 1, 1961

1,709,000

Pound

654,814*

Jan. 31, 1962
Argentina
Paraguay
Other Countries

5,525,000
741,000
234,000

Pound
Pound
Pound

1,750,785*
630*

Tung Oil Nov. 1, 1961-

* Imports through December 11, 1961.

TREASURY DEPARTMENT
Washington
tr .-1 q

IMMEDIATE RELEASE

THURSDAY, DECEMBER 14, 1961

D-330

The Bureau of Customs announced today preliminary figures showing the imports
for consumption of the commodities listed below within quota limitations from the
beginning of the quota periods to December 2, 1961, inclusive, as follows:

Commodity

Period and Quantity

: Unit
Imports
: of
:
as of
;Quantity:Dec. 2, 1961

Tariff-Rate Quotas:
Cream, fresh or sour Calendar Year 1,500,000 Gallon 282
Whole Milk, fresh or sour........ Calendar Year 3,000,000 Gallon 206
Cattle, 700 lbs. or more each
(other than dairy cows)

Oct. 1, 1961Dec. 31, 1961

Cattle less than 200 lbs. each... 12 mos. from
April 1, 1961
Fish, fresh or frozen, filleted,
etc.5 cod, haddock, hake, pollock, cusk, and rosefish....
Calendar Year

120,000 Head

32,499

200,000

31,149

32,600,645

Head

Pound

Quota Filled

Pound
Pound

3,473,450
1,721,276

Pieces

41,644,977*

Tuna Fish Calendar Year 57,114,714 Pound 52,024,510
White or Irish potatoes:
Certified seed
Other

12 mos. from
114,000,000
Sept. 15, 1961 36,000,000

Walnuts Calendar Year 5,000,000 Pound Quota Filled
Stainless steel table flatware
(table knives, table forks,
table spoons)

*Imports through December 8, 1961

Nov. 1, 1961Oct. 31, 1962

69,000,000

^ A ~,

TREASURY DEPARTMENT
Washington

IMMEDIATE RELEASE

THURSDAY, DECEMBER l4, 1961

D-330

The Bureau of Customs announced today preliminary figures showing the imports
for consumption of the commodities listed below within quota limitations from the
beginning of the quota periods to December 2, 1961, inclusive, as follows:

Commodity

Period and Quantity

: Unit
: Imports
: of
:
as of
Quantity: Dec. 2, 1961

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

Calendar Year

Whole Milk, fresh or sour

Calendar Year 3,000,000 Gallon

206

Oct. 1, 1961Dec. 31, 1961

120,000

32,499

12 mos. from
April 1, 1961

200,000 Head

Cattle, 700 lbs. or more each
(other than dairy cows)
Cattle less than 200 lbs. each...
Fish, fresh or frozen, filleted
etc.5 cod, haddock, hake, pollock, cusk, and rosefish
,

Calendar Year

1,500,000

32,600,645

Gallon

Head

Pound

282

31,149

Quota Filled

Year 57,114,714 Pound 52,024,510
iuna iistii, t • • ( • 11 > • 1 > M •«• 1 > •Calendar
11 >
White or Irish potatoes:
Certified seed

Walnuts,

•

• • • • • # • • • • * •

Stainless steel table flatware
(table knives, table forks,
table spoons )

*Imports through December 8 , 1961

12 m o s . from
114,000,000
Sept. 1 5 , 1961 36,000,000

Pound
Pound

Calendar Year 5,000,000 Pound

Nov. 1, 1961O c t . 3 1 , 1962 69,000,000

3,473,450
1,721,276
Quota Filled

Pieces

41,644,977*

-2-

Period and Quantity

Coramodity

: Unit
Imports
: of
as of
Quantity Dec. 2. lQfii

Absolute Quotas:
Butter substitutes, including
butter oil, containing 45%
or more butter fat

Calendar Year

Cotton products, except cotton
wastes, produced in any stage
preceding the spinning into
yarn

12 mos. from
Sept. 11, 1961

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

o « • •

, 1,200,000

Pound

Quota Filled

1,000

Pound

Quota Filled

12 mos. from
Aug. 1, 1961

1,709,000

Pound

654,814*

Nov. 1, 1961Jan. 31, 1962
Argentina
Paraguay
Other Countries

5,525,000
741,000
234,000

Pound
Pound
Pound

1,750,785*
630*

* Imports through December 11, 1961.

TREASURY DEPARTMENT
Washington

IMMEDIATE RELEASE

D-331

THURSDAY, DECEMBER l4, 196l

The Bureau of Customs announced today the following preliminary
figures showing the imports for consumption from January 1, 1961, to
December 2, 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
Dec. 2. 1961
242,977

Cigars

180,000,000

Number

6,638,247

Coconut oil

403,200,000

Pound

150,467,930

Cordage....

6,000,000

Pound

4,665,189

Tobacco....

5,850,000

Pound

5,958,105

04 ?
TREASURY DEPARTMENT
Washington

IMMEDIATE RELEASE

THURSDAY, DECEMBER 14, 196l

D-331

The Bureau of Customs announced today the following preliminary
figures showing the imports for consumption from January 1, 1961, to
December 2, 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
Imports
of
as of
Quantity :Dec. 2; 1961
Gross

242,977

180,000,000

Number

403,200,000

Pound

150,467,930

Cordage.«•••...•••..

6,000,000

Pound

4,665,189

xoDacco..«...«...o*«

5,850,000

Pound

5,958,105

Coconut oil

6,638,247

TREASURY DEPARTMENT
laahington, 0« C.
D&EDIATE BSLEASS

D-332

THURSDAY, DECEMBER l4, 196l

PRELIMINART DATA ON IMPORTS FOR CONSUMPTION 0? UNMANUFACTURED LEAD AND ZINC CHARGEABLE TO THE OUOTAS ESTABLISHED
BT PRESIDENTIAL PROCLAMATION NO. 3257 07 SEPTEMBER 22, i?5«
QUARTERLY QUOTA PERIOD •October I* DeAetat'fcr *l» !%'•
IMPORTS •October I.. December II, 1961
ITEM 394
ITEM 393
ITEM 392
t
t Lead bullion or base bullion, :
t
i
t lead In pigs and bars, lead
Lead-obearing ore a, flue duet, i dross, reclaimed lead, scrap { Zinc-bearing ores of all kinds, x Zlno la blocks, pigs, or slabs;
t ezoept pyrites containing not t old and worn-out zlno, fit
and mattes
t lead, antlaonlal lead, antlover yfc of lino
t only to be reaanufactured, zlno
t aonlal scrap lead, type metal, t
t
t
dross, and slno skinning*
i all alloys or oombinatlons of
j
i
*
lead n.s.p.f.
:Quarterly Quota
t:Quarterly
Dutiable. Lead
Iaporte t
Dutiable Lead
Iaporta : Quarterly Quota
Quota
: Quarterly
Quota
i Dutiable 21ns
Iaporte : By
ffeljftt
Imports
(Pounds)
(Pounds)
(Pounds)
(Pounds)
20,531,96M
10,030,000
10,080,000
23,680,000
ITEM 391

Country
of
Production

Australia
Belgian Congo

5,440,000

Belgium and
Luxemburg (total)

7,520,000 7,520,000

Bolivia

5,040,000

Canada

13,440,000

5,040,000
13,440,000 15,920,000 13,977,466

66,480,000

45,899,297

37»MO,000

31,956,701

3,600,000

Italy
Mcxloo
Peru

16", 160,000

8,789,173

Un. So* Afrioa

14,680,000

14,880,000

Tugoslorla

«s>

All other foreign
oouatrles (total)

5,528,615

6,560,000

6,560,000

36,880,000

28,547,926

70,480,000 65,656,361

6,320,000

2,805,176

12,880,000

7,728,997

35,120,000 30,947,247

3,760,000

400,004

I5,76)f«)0

H,289,235

6,080,000

5,266,899

17,840,000

The above country designations are those specified in Presidential Proclamation No. 5257
of September 22, 1958. 8ince that date the names of certain countries have been changed.

17,840,000

6,080,000

6,080,000

TREASURY DEPARTMEH?
fasalngton, D« 0*
H&SDIATE RELEASE

D-332

THURSDAY, DECEMBER 14, 1961

PRELIMINARY DATA ON IMPORTS ?QR CONSUMPTION 0? UNMANUFACTUISD LEAD AND ZINC CHARC3ABLS TO THE OSOTAS ESTABLISHED
BY PRESIDENTIAL PROCLAMATION NO. 3257 0? SEPTEMBER 22, 195$
QUARTERLY QBOTA PERIOD •--October.!* OeaeMMr 5U '*961
IMPORTS •October I .. December 11, 1961
ITEM

Country
of
Produotlon

Australia

391

ITEM 392
V Lead bullion or base bullion,
t lead in pigs and bars, lead
z Lead-p-beariag ores, fltte dust, t dross, reclaimed lead, scrap
1
and nattee
,
s lead, antiaonlal lead, antl*
J aonlal scrap lead, type natal,
*
t all alloys or combinations of
*
*•
lead n.s.p.f.
:Quarterly
Quota,
tQuarterly
Quota
t Dutiable. Lead
Iaporte 1 Dutiable Lead
Isporta
" (Pounds)
(pounds]
*
*
10,080,000

10,080,000

23,680,000

J33UBL

t
t

ITEM 394
1
9

: Zinc-bearing ores of all kinds,$ Zlno ia blocks, pigs, or slabs;
1 ezeept pyrites containing not : old and -worn-out zlno, fit
:
ore r 3 ^ of ziao
1 only to be reaanufactured, sine
x
t
dross, and sine skixsalngs
i
i
;Quarterly Quota
:Qcarterly Quota
1 Dutiable Zinc
Xaports ; By Weight
Isporta
^Pounds)"""
'" "'
"
(Pflunda)'",l

20,53«,964

Belgian Congo

5,440,000

Belgium and
Luxemburg (total)

7,520,000 7,520,000

Bolivia
Canada

5,040,000
13,440,000

5,040,000
15,440,000 15,920,000 13,977,466

66,480,000

45,899,297

37*840,000

3!,956,70!

3,600,000

Italy
Mexico
Peru

16,160,000

8,789,173

Un. So* Africa

14,880,000

14,880,000

Tugoslorla
All other foreign
eouatries (total)

5,328,615

6,560,000

6,560,000

36,880,000

28,547,926

70,480,000

65,656,561

6,320,000

2,805,176

12,880,000

7,728,997

35,120,000

50,947,24?

3,760,000

400,004

15,760,000

11,289,235

6,080,000

5,266,899

17,840,000

17,840,000

The above country designations are those specified in Presidential Proclamation No. 5257
of September 22, 1958. Since that date the names of certain countries have been changed.

PP-SPOH23 TH T H Z BUJRZAtT OT C8STOUS

6,080,000

6,080,000

k
Comparison of principal items of assets and liabilities of active national banks - Continued
(In thousands of dollars)
:Increase or decrease tIncrease or decrease
Oct. 3»
Sept. 27 t June 30*
.since June 30. 1961 tsince Oct. 3. I960 .„_
I960
1961
1961
: Amount
: Percent: Amount
: Percent
LIABILITIES
Deposits of individuals, partnerships,
^3^??!! 60.131,865 59,212,875 59,025.5*7 918,990 1.55
Deposits of U. S. Government *,835,726 3.7*8,898 *,087,800 1.086,828 28.99
Postal savings deposits
7,969
8,07*
8,297
Deposits of States and political sub.
divisions
9.164.153
9.762,861
8,473,965
Deposits of banks
8,252,977
7,8*8,020
8,885,686
Other deposits (certified and officers*

1,106,318
5,^06,55^
7^7.926
-105 -1.30
-328
, .., 690,188
Q
a
-598.708 -6.13
-632,709
*0*,957 5.16
„
^.
7»20S,377

1.87
15.03
18.30
-3.95

72,5^0
-ta^iaa:::::::::::::::::::::: .A51S ^-O JiBM
JSS ^
Rediscounts and other liabilities for
borrowed money

1,085,863

355,*66

oth"™£biutieS::::

3:247.223

3.019.53s

1,013,323

,Q
730,397 205.48

7.273.762

3.254.378—WJ&—7^*.

^Stallccounts:.:??^ I*.-**-** 125.859.9*2 122.230.834 3.6**.7Q* 2.90
CAPITAL ACCOUNTS
^Caion!?!: 3.506.951 3,*77,080 3,306.5*7 29,871 .86
Preferred
3.268
1.323
l.g?0
1.9*3 147.01
Total..
^KVl?
?.y8.*0?
?.«77
?1.816
^K
Surplus
5655738
5,620,169
5.250,859
35.569
W
Undivided profits
2,237.*32
2,071,321
2.201.^9
166.111 8.02
Reserves...
275.228
269.160
2*9 J88
6,0,68 2 j 2 1
Total surplus, profits and reserves!^.....!
8.168.398
7.960.650
7.701.376
207,7^8 2,6],
Total capital accounts
11.678:617 11^39.053 l O b 9 A 5 3
239.56'+ 2.09
RATIOS:
U.S.Gov't
Loans
Caoitai
Total
accounts
& discounts
accounts
securities
liabilities
to
tototal
to
total
and
total
deposits
capital
assets
.assets.... 141.183.263
Percent
25.31
^6.13
9.33
137.298.995
Percent
&b.k>2
^.21
?•?* 133.2*0.337
Percent
^7.39
22.97
y.-?J>
3.884.268 2^81

200, W *

1*Z2§.

202.1^2
^04,879
36,303
25.8^0 10.3*
^67.022
669.16**
7.9^2.926
5.9<
t

c:

3
Statement showing comparison of principal items of assets and liabilities of active national banks
as of Sept. 27, 1961, June 30, 1961 and Oct. 3. I960
(In thousands of dollars)
June 30,
Oct. 3»
1961
I960
Number of banks
4,523
ASSETS
Commercial and industrial loans... 23,787,422
Loans on real estate
,....
16,205,767
Loans to financial institutions...
4,977,590
All other loans
21.511.864
Total gross loans
66,462,643
Less valuation reserves....
1.355.944
Net loans
65,126,699
U. S. Government securities:
Direct obligations.
35,613,945
Obligations fully guaranteed...
124.167
Total U. S. securities
35,738,112
Obligations of States and political
subdivisions
10,630,990
Other bonds, notes and debentures.. 1,590,467
Corporate stocks, including stocks
of Federal Reserve banks
M*5Z2
Total securities
48.300.141
Total loans and securities.... 113.426,840
Currency and coin
2,024,877
Reserve with Federal Reserve banks. 10,036,033
Balances with other banks.
12.428.725
Total cash, balances with
other banks, and cash items in
OtherTotal
process
asset assets
of collection
141.183.263
24.489.635
3:266.788

:Increase or decrease :Increase or decrease
.since June 30, 1961 .since Oct. 3, i960
• Amount
. Percent t Amount
. Percent

4,524

4,535

-1

-12

23,665,552
15,837,818
3,738,144
21.546.754
64,788,268
1.348.416
63,439,852

23,414,546
15,416,351
4,911,095
20.629.765
64,371,757
1.234.579
63,137,178

121,870
367,949
1,239,446
-34.890
1.694,375
7.528
1,636,847

.51
2.32
33.16
-16
2.62
.56
2.66

372,876
789,416
66,495
882.099
2,110,886
121.365
1,989,521

I.59
5.12
1.35
4.28
3.28
9.83
3.15

33,397,413
124.680
33,522,093

30,507,592
91.209
30,598,801

2,216,532
-513
2,216,019

6.64
-.41
0T0I

5,106,353
32.958
5,139,311

16.74
36.13
16^80

10,123,742
1,419,736

9,123,621
1,245,349

507,248
170,731

5.01
12.03

1,507,369
345,118

16.52
27.71

337.241
45.402.812
108.842.664
1,491,071
10,341,259
13.441.910

316.748
41.284.519
104,421.697
1,546,553
10,833,62?
13.466.182

3.331
.99
23.824
2.897.329
6.38 7.015.622
4.584,176
4.21 9.005.143
533,806 3 5 ^ 0
478,324
-305,226 -2.95
-797.594
~1.013.185 -7.54 -1.037.457
•—**—* Li^z
* '(w<

7.52
16.99
8ToT
yolW
-7 36
-7.70
"-^-

137.298.995
25.274.240
Slltelwi

133.240.337
25.846.362
ZJmAik

3.884.268
-784.605
84?697 -3.10
2.83
2.06 JLJV&sm
7.942,926
%!(]S

.5.25
«L<ti
f%

- 2 -

Loans to brokers and dealers in securities and to others for the purpose of pur-

chasing or carrying stocks, bonds, and other securities of $1,922,000,000 incre

$49,000,000. Other loans, including loans to farmers and other loans to individ

(repair and modernization and installment cash loans, and single-payment loans)

amounted to $12,964,000,000. The percentage of net loans and discounts (after d

duction of valuation reserves of $1,355,944,000) to total assets on September 2
1961 was 46.13 in comparison with 47.39 on October 3, I960.
Total investments of the banks in bonds, stocks, and other securities aggre-

gated $48,300,000,000. Included in the investments were obligations of the Unit

States Government of $35,738,000,000 ($124,167,000 of which were guaranteed obl

tions). These investments, representing 25.31 percent of total assets, showed a

increase of $5,139,000,000 since October 3, I960. Other bonds, stocks, and secu

ties of $12,562,000,000, including $10,631,000,000 of obligations of States and
political subdivisions, showed an increase of $1,876,000,000.

Cash of $2,025,000,000, reserves with Federal Reserve banks of $10,036,000,000,

and balances with other banks (including cash items in process of collection) o

$12,429,000,000, a total of $24,490,000,000, showed a decrease of $1,357,000,00
Rediscounts and other liabilities for borrowed money of $1,086,000,000 showed
an increase of $72,540,000 in the year.

Total capital funds of the banks on September 2?, 1961 of $11,679,000,000, ex|t

to 9.33 percent of total deposits, were $669,000,000 more than in October I960,

cluded in the capital funds were capital stock of $3,510,000,000, of which $3,2

was preferred stock; surplus of $5,656,000,000; undivided profits of $2,238,000
and capital reserves of $275,000,000.

TREASURY DEPARTMENT
Comptroller of the Currency
Washington
RELEASE A.M. NEWSPAE$RS,
MONDAY, DECEMBER 18, 106l

December 15, 1963^

COMPTROLLER OF THE CURRENCY REPORTS TOTAL ASSETS AND LIABILITIES
OF ACTIVE NATIONAL BANKS ON SEPTEMBER 27, 1961

The total assets of the 4,523 active national banks in the United States and

possessions on September 27, 1961 amounted to $141,200,000,000, it was announced
today by Comptroller of the Currency James J. Saxon. The total assets showed an

increase of $7,900,000,000 over the amount reported by the 4,535 banks on Octobe
I960.
The deposits of the banks on September 27, 1961 were $125,200,000,000, an in-

crease of $7,200,000,000 in the year. Included in the deposit figures were deman

deposits of individuals, partnerships, and corporations of $60,000,000,000, an i

crease of $1,100,000,000, and time and savings deposits of individuals, partner
and corporations of $41,000,000,000, an increase of $5,400,000,000. Deposits of
United States Government of $4,836,000,000 increased $748,000,000; deposits of

and political subdivisions of nearly $9,200,000,000 increased $690,000,000; and

posits of banks of $8,253,000,000 showed a decrease of $633,000,000. Postal savi

deposits were $7,969,000 and certified and officers1 checks, etc. were $1,400,00

Gross loans and discounts on September 27, 1961 of $66,500,000,000 showed an increase of $2,111,000,000 over October 3» I960. Commercial and industrial loans

amounted to $23,787,000,000 and increased $373,000,000 during the year, while lo

on real estate of $16,206,000,000 increased $789,000,000. Loans to financial ins

tutions amounted to $4,978,000,000, an increase of $66,000,000. Retail automobil

installment loans of $4,975,000,000 showed a decrease of $32,000,000. Other type

of retail installment loans of $1,650,000,000 showed an increase of $43,000,000.

D-333

'-A

K

•-* \~>

TREASURY DEPARTMENT
Comptroller of the Currency
Washington
RELEASE A.M. NEWSPAE&RS,
MONDAY, DECEMBER 18, 196l

December 15, 1961

COMPTROLLER OF THE CURRENCY REPORTS TOTAL ASSETS AND LIABILITIES
OF ACTIVE NATIONAL BANKS ON SEPTEMBER 27, l°6l

The total assets of the 4,523 active national banks in the United States and

possessions on September 27, 1961 amounted to $141,200,000,000, it was announced
today by Comptroller of the Currency James J, Saxon. The total assets showed an

increase of $7,900,000^000 over the amount reported by the 4,535 banks on Octobe
I960.
The deposits of the banks on September 27, 1961 were $125,200,000,000, an in-

crease of $7,200,000,000 in the year. Included in the deposit figures were deman

deposits of individuals, partnerships, and corporations of $60,000,000,000, an i

crease of $1,100,000,000, and time and savings deposits of individuals, partners
and corporations of $41,000,000,000, an increase of $5,400,000,000. Deposits of

United States Government of $4,836,000,000 increased $748,000,000; deposits of S
and political subdivisions of nearly $9,200,000,000 increased $690,000,000; and

posits of banks of $8,253,000,000 showed a decrease of $633,000,000. Postal savi

deposits were $7,969,000 and certified and officers* checks, etc. were $1,400,00

Gross loans and discounts on September 27, 1961 of $66,500,000,000 showed an increase of $2,111,000,000 over October 3» I960. Commercial and industrial loans
amounted to $23,787,000,000 and increased $373,000,000 during the year.', while

on real estate of $16,206,000,000 increased $789,000,000. Loans to financial ins

tutions amounted to $4,978,000,000, an increase of $66,000,000. Retail automobil

installment loans of $4,975,000,000 showed a decrease of $32,000,000. Other type

of retail installment loans of $1,650,000,000 showed an increase of $43,000,000.

D-333

- 2 -

Loans to brokers and dealers in securities and to others for the purpose of pur-

chasing or carrying stocks, bonds, and other securities of $1,922,000,000 incre

$49,000,000. Other loans, including loans to farmers and other loans to individ

(repair and modernization and installment cash loans, and single-payment loans)

amounted to $12,964,000,000. The percentage of net loans and discounts (after d

duction of valuation reserves of $1,355,944,000) to total assets on September 2
1961 was 46.13 in comparison with 47.39 on October 3, I960.
Total investments of the banks in bonds, stocks, and other securities aggre-

gated $48,300,000,000. Included in the investments were obligations of the Unit

States Government of $35,738,000,000 ($124,167,000 of which were guaranteed ob

tions). These investments, representing 25.31 percent of total assets, showed a

increase of $5,139,000,000 since October 3, I960. Other bonds, stocks, and secu

ties of $12,562,000,000, including $10,631,000,000 of obligations of States an
political subdivisions, showed an increase of $1,876,000,000.

Cash of $2,025,000,000, reserves with Federal Reserve banks of $10,036,000,000,

and balances with other banks (including cash items in process of collection) o

$12,429,000,000, a total of $24,490,000,000, showed a decrease of $1,357,000,00
Rediscounts and other liabilities for borrowed money of $1,086,000,000 showed
an increase of $72,540*000 in the year.

Total capital funds of the banks on September 27, I96I of $11,679,000,000, equa

to 9.33 percent of total deposits, were $669,000,000 more than in October I960,

cluded in the capital funds were capital stock of $3,510,000,000, of which $3,

was preferred stock; surplus of $5,656,000,000; undivided profits of $2,238,00
and capital reserves of $275,000,000.

Statement showing comparison of principal items of assets and liabilities of active national banks
as of Sept. 27, 1961, June 30, 1961 and Oct. 3» I960
(In thousands of dollars)
Sept. 27,
1961
Number of banks.
4,523
ASSETS
Commercial and industrial loans... 23,787,422
Loans on real estate
16,205,767
Loans to financial institutions...
4,977,590
All other loans.....
21.511.864Total gross loans......
66,482,643
Less valuation reserves....
1.355.944
Net loans
65,126,699
U. S. Government securities:
Direct obligations...
35,613,945
Obligations fully guaranteed...
124.167
Total U. S. securities
35,738,112
Obligations of States and political
subdivisions
10,630,990
Other bonds, notes and debentures..
1,590,467
Corporate stocks, including stocks
of Federal Reserve banks..........
340.572
Total securities
48,300*141
Total loans and securities.... 113,426,840
Currency and coin
2,024,877
Reserve with Federal Reserve banks. 10,036,033
Balances with other banks.......... 12.428,725
Total cash, balances with
other banks, and cash items in
process of collection...
24.489,635
Other assets
•
3.266,788
Total assets
141,183,263

June 30,
1961
4,524

~ . «
• -*•
I960

:Increase or decrease :Increase or decrease
>since June 30, 1961 .since Oct. 3, I960
. Amount
. Percent • Amount
. Percent

4,535

.12

-1

64,788,268
1.348.416
63,439,852

23,414,546
15,416,351
4,911,095
20.629,76?
64,371,757
1,234.579
63,137,178

1,694,375
7.528
1,6$6,847

33,397,413
124.680
33,522,093

30,507,592
•Jl^Oj.
30,598,801

2,216,532
-513
2,216,019

6.64
-.41

10,123,742
1,419,736

9,123,621
1,245,349

507,248
170,731

5.01
12.03

23,665,552
15,837,818
3,738,144

121,870
367,949
1,239,446

.51
2.32
33.16
-16
2.62
.56
2.66

372,876
789,416
66,495
882,099
2,110,886
121,365
1,989,521

1.59
5.12
1.35
4.28
3.28
9.83
3.15

16.74
?6.1?
5,139,31116.80
5,106,353

1,507,369
345,118

16.52
27.71
7.52
16.99

337t2*H
45,402,812
108,842,664"
1,491,071
10,341,259

316,748
41,284,519
104,421,697
1,546,553
10,833,62?
13.466^182

23.824
L2L
6.38
7,015,622
2,897.329
X584,176
4.21
9,005,143
533,806
35.80
478,324
-305,226
-2.95
-797,594
.1,013.185 -7.54- -1,037.457

30.93
-7.36
-7.70

25,274,240
3.182.091
137,298,995

25.846,362
2.972.278
133,240,337

-784,605 -3.10 -1.356.727
84,697
2,66
294T510
3,884,268
2.83
7,942,926

9.91
5.96

TLoT

Comparison of* principal items of assets and liabilities of active national banks - Continued

(In thousands of dollars)
OH- ?
Sept. 27, June 30,
i960
1961
1961
LIABILITIES
Deposits of individuals, partnerships,
and corporations:
Demand
Time and savings
Deposits of U. S. Government
Postal savings deposits
Deposits of States and political subdivisions
Deposits of banks
Other deposits (certified and officers1
checks, etc.)
Total deposits
Rediscounts and other liabilities for
borrowed money
Other liabilities
Total liabilities, excluding
capital accounts
CAPITAL ACCOUNTS
Capital stock:
Common
Preferred
Total
Surplus
Undivided profits
Reserves..!
Total surplus, profits and reserves.........
Total capital accounts
Total
liabilities and capital
RATIOS:
Capital
Loans
U.S.Gov
accounts
&1taccounts
discounts
securities
to
tototal
to
total
total
deposits
assets
assets....
,

60,131,865
41,379,308
4,835,726
7,969

59,212,875
40,338,073
3,748,898
8,074

9,164,153
8,252,977

9,762,861
7,848,020

1.399.562
1.566.137
125,171,560 122,484,938
1,085,863
3.247.223

355,466
3.019.533

:Increase or decrease :Increase or decrease
tsince June 30. 1961 tsince Oct. 3. I960
: Amount
: Percent: Amount
: Percent

1,106,318
59,025,547
918,990 1.55
5,406,554
35,972,754 1,041,235 2.58
747,926
4,087,800 1,086,828 28.99
-328
8,297
-105 -1.30
690,188
-632,709
8,473,965 -598,708 -6.13
8,885,686
404,957 5.16
-!Q9ig72
7,208,377
1.509.134 -166,575 -10.64
72,540
117,963,183 2,686,622 2 ^ 9
-7.155
1,013,323
3.254.378

730,397 205.48
227,68g
Z^

129,504,646 125,850.942 122.230.884 3.644.704 2 ^ 0 .
, ,
n.
3,506,951
3,^77,030
3,306,547
29,871
.86
3,268
1.323
1.530
1.945 147.01
^^^21Q_^n47%40^
^MxgZ?
31.816
-91
5,^557733
5,620,169
5&&fi59
35,569
.63
2,237,432
2,071,321
2,201,129
166,111 8.02
i^2_23_
269,160
242*288
^Q
^
8.168.398 JL^MA^
Z«Z21*32S
^^MJi3—J3L^9,Q53 ii«022i452

20^48
££^64

1 ^ 1Percent
^46.13
25.31
.9.33
^ 1 - 1 2 ^ 9Percent
3^6.21
24.42
,9.34
9 ? ? 13?,2^,??7
Percent
9.33
47.39
22,97
?,881,268

1.8
15.018.3
-3.95
8.14
-7.12
-7.26
6.11
7.16
-.22

7.273.762

5.95

200,404
1»7?8
202,142
404,879
36,303
25»840
467.022
669,164

6.06
13-2-S3
6.11
7.71
1.65
10.36
6.06
"6T08

2,61
2.09
2,83 7,?^,?Z6

5.96

LtC 71961

1fc» f«lis*i8g tr*nt<tlo»f mr% m4* l» dir*©t M i gmr*siUm& t*esarlU«t
of tit g$van*s*st f@r T^tam? Xwftiwmi pal etlar mmsmfat te$a$ tfee metfe

lit Pmrmmmm ........ : t^a^Ogg&OG

55

TREASURY DEPARTMENT
WASHINGTON. D.C.
November i°§3 196l

IMMEDIATE RELEASE

TREASURY MARKET TRANSACTIONS IN <OCT0RBft

During'^Qe&e-ke.as. 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 $36,797,000 >

0O0

TREASURY DEPARTMENT
WASHINGTON, D.C.
December 15, 1961

IMMEDIATE RELEASE
TREASURY MARKET TRANSACTIONS IN NOVEMBER

During November 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 $57,279,000.

0O0

D-331*

TREASURY DEPARTMENT
WASHINGTON, D.C.
,-,-n

December 15, 196l

FOR IMMEDIATE RELEASE
TREASURY DECISION ON RED CEDAR SHINGLES
AND SHAKES UNDER THE ANTIDUMPING ACT

** The O^reasury Department has determined that red cedar shingles
and shakes from Canada 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 1961 was approximately $13,300,000.

TREASURY DEPARTMENT
W A S H I N G T O N , D.C.
December 15, 196l

FOR IMMEDIATE RELEASE
TREASURY DECISION ON RED CEDAR SHINGLES
AND SHAKES UNDER THE ANTIDUMPING ACT

The Treasury Department has determined that red cedar shingles
and shakes from Canada 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.
Hie dollar value of imports of the involved merchandise received during 196l was approximately $13,300,000.

- 3 -

wv>

-

^&^.vivt:t:*:^:» < M K < » ^ ^ 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, b

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.

^^ .
w
"

- 2 -

Banking institutions generally may submit
tenders for account of customers provide
the names of the customers are set forth
in such tenders.

decimals, e. g., 99.925. Fractions may not be used. It is urged that tenders b

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 in

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 September 2Q, 1961 , ( 91 days remaining until maturity date on
March 29, 1962 ) and noncompetitive tenders for $ 100,OOP or less for the

182 -day bills without stated price from any one bidder will be accepted in fu

npaqF
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

made or completed at the Federal Reserve Bank on December 28, 1961 y iu cash o

HE*

other immediately available funds or in a like face amount of Treasury bills maturing December 28, 1961 . Cash and exchange tenders will receive equal treatment

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 exeaapstioa^ as such, and

wmxxmmmffl-

sc Vjf I,

TREASURY DEPARTMENT
Washington
FOR IMMEDIATE RELEASE *x@fc&xBxMx, December 15, 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,

cash and in exchange for Treasury bills maturing December 28, 1961 , in the a
of $ 1,700.447,000 , as follows:
91 -day bills (to maturity date) to be issued December 28, 1961 ,
x&5$
:$a&
in the amount of $1,100,000,000 , or thereabouts, representing an additional amount of bills dated September 28, 1961,
and to mature March 29, 1962 , originally issued in the
amount of $ 600,070,000 , the additional and original bills
xpeEJc
to be freely interchangeable.
182 -day bills, for $ 600,000,000 , or thereabouts, to be dated
HpdqF
xp&JT
December 28, 1961 , and to mature
June 28, 1962
xpScJc
:$&$$£

.

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

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

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

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 clos

hour, one-thirty o'clock p.m., Eastern Standard time, Friday, December 22? 196
2$&x)t

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 tender

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

V 33$

564

December 15, 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 December 28, 196l,in the amount of
$1,700,447,000, as follows:
91-day bills (to maturity date) to be issued December 28, 1961,
in the amount of $1,100,000,000, or thereabouts, representing an
additional amount of bills dated September 28,196l,and to
mature March 29, 19&2,
originally issued in the amount of
$600,070,000,
the additional and original bills to be freely
interchangeable.
l82-»day bills, for $600,000,000, or thereabouts, to be dated
December 28, 1961, and to mature June 28, 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 Standard
time, Friday, December 22, 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.
Banking institutions generally may submit tenders for account of
customers provided the names of the customers are set forth in such
tenders. Others than banking institutions will not be permitted to
submit tenders except for their own account. Tenders will be receive
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
or
accompanied
n-^S
trust company.
by an express guaranty of payment by an incorporated bank

- 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
September 28,1961,(91-days remaining until maturity date on
March 29,1962)
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 December 28, 1961,
in cash or other immediately available funds or in a,like face
amount of Treasury bills maturing December 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 hereunde:
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
Federal
of, theirReserve
issue. Bank
Copies
or Branch.
of the circular may be obtained from any

SRC
Oscmitoir IS- 1 9 &
t 1 ';..

*ms& A» *,« iimi%FE&».&.

lzi,il§k
asuiffs ^ f'ltfwr's t mv* BUJU awwmiGj

the f rsasiiry i^p-artisa^t «sifiW0t*i last ®w*siiag tfemt Om
billsj, m® sarins toto*an ackiltional l & # w of H®§ fcill*
and tt» other mrtm
t» ** 4 * * * M e m b e r 21 f 196&, which **r* offered :m
open** «t Om &*£•««& Mmmm
Banks an D»oa»b*r 19* Tmmm
mm
Lmttetl
or %b®wm$smt®$ &£ sa-4aj M U * aari for $6£» t G00 f 0G®» or
d«st.ailj3 a£ %ha %-m series m as follows
X 2 * ^ 3?r«w r y ^ U #

"•a?

^£L£^JfflU§a Sift—
r^riot A<rmal r&&e
Siivh

•?.TEF~"
99 • »
2«67C*i 1/

2 tenders tstaling #530* W f V "xoeptiajR 1 taadir o£ $gi,032,0d0
p » e # ^ offete«Knnt xf /Wlf^ Mils b M for *^ tl» Xov {glat «i%»
7U pmtam.% *f tt» « o w t of l8&-d«j- billsfei4for At %m W p r l e a
w
r jiv-ir iTJiisr^ A??Lic.B roa m® A C C S R S D m mm*L
.A°m^m
&

Boatoa
ftrv Tatfc
ftiili«1aJj>lii*
Slimilsijist
Atlanta
ChdUMgo
3t. Louis
Kmmm Oity

muss

l*f^9f? f aoQ
32,*M^m
3fif6t3#o»
39,120, 00Q
30ȣ36fooo
207,273/000
60^96^000
3o,&7,«*
$2,323,313*000

755,633,000
io,8So,ooo
3?*U7»ooo
16,789*000
23 f ^tl # 0©0
S^»63BfO0O
27*0011,000
10,690,000
30*890*000
27,527,000
$1,101,333,000 3 /

9»,<U»»009
J

a&s&att

' t&i#5S3»aoo
3,ala,ooo
Atft&vttO.
7«0Lt*0tt>

<s%,9oo,aoo
,
6§mwQ90
* I»,k7$,0®0
ii*>($S2fo©o J»9fl|ftfl00
7,32b, 000
n.Ui.7Au(M

.'neiudMi JStjlfttttft ''joncjssr.tiiUwi i»»a«r® w » p t « d «i tHa « f i m ptlri* «f ^ * 5 ^
Qm a ooupoa IssMe at Om mm l<?nrtth and for tfa» I W M w o u n t iTW®st©df th® m t u m «•
theae M l l # vo-^ild pmvid* yitfUfai of 2.73^f ter tt* 9 1 H S « ^ billp, and 3,00^, for ®m
18a«dflar M l l « * lni«»8t ratae on M i l s ar# Qn<rt#d in %®m® •*§ bw&t di#d«3^fe *ltt
t»» r » « m r^lat#i to tF« f « » a-jntnt of tl» M U * -avaM® A % .wattsHty t ^ H i r t o ®
th» a m n t ijonrwrtadt «nd tt#ir Un^h in P ei«»l nw"»b*r «f days ml*U4
V*
m:^4m
fmt*
& eonlravif j M i i oa «a*iilifi»t#af m%m®$ «nA band® ar® ® « ^ t » d ia law*
1
M iat«re«t .->n Urn m o u n t lav««tsdy awl. r a U t » tin -^,^u?r «f A f P 3P««iti!^JM In •»
issfcartet pmj»Bt ptrlod to Om aofual ni^bsr pf i®y# in |^» :«rlod, with
oowpowndiiiar if nor» tJiim or» e « p « p«riod 1« iawl^^l*

O)li/iv

{

U) *1\

TREASURY DEPARTMENT
WASHINGTON, D.C.
December 18, 1961
I.RELEASE A. M. NEWSPAPERS, Tuesday, December 19, 1961,
RESULTS OF TREASURY*S WEEKLY BILL OFFERING

The Treasury Department announced last evening that the tenders for two series of
jasury bills, one series to be an additional issue of the bills dated September 21, 1961,
i the other series to be dated December 21, 1961, which were offered on December 13, were
sned at the Federal Reserve Banks on December 18. Tenders were invited for $1,100,000,00'
thereabouts, of 91-day bills and for $600,000,000, or thereabouts, of 182-day bills. Thi
tails of the two series are as follows?
m OF ACCEPTED
UPETITIVE BIDS*

High
Low
Average

91-day Treasury bills
maturing March 22, 1962
Approx. Equiv.
Price
Annual Rate
99.331 a/
2.647%
99.322
2.682$
99.325
2.670$ 1/

:
t

182-day Treasury bills
maturing June 21, 1962
Approx. Equiv.
Price
Annual Rate
2.888$
98.540 b/
98.520
2.927$
98.526
2.9l£$ 1/

a/ Excepting 2 tenders totaling $530,000; b/ Excepting 1 tender of $4,032,000
49 percent of the amount of 91-day bills bid for at the low price was accepted
74 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:
Istrict
oston
ew York
hiladelphia
leveland
ichmond
tlanta
hicago
t. Louis
inneapolis
aasas City
fellas
an Francisco
TOTALS

Applied For
$
35,130,000
1,760,937,000
32,260,000
38,623,000
19,120,000
30,636,000
207,573,000
35,088,000
19,990,000
60,898,000
30,527,000
52,531,000
$2,323,313,000

Accepted
Applied For
$
27,540,000
$
19,741,000
755,833,000
934,644,000
10,850,000
8,141,000
37,417,000
25,953,000
16,789,000
2,881,000
23,981,000
8,816,000
95,838,000
94,900,000
27,088,000
6,502,000
10,690,000
6,478,000
31,890,000
14,582,000
27,527,000
7,324,000
35,890,000
34*812,000
$1,101,333,000 c/ $1,164,774,000

Accepted
$ 17,691,000
441,523,000
3,141,000
24,121,000
2,831,000
7,016,000
56,196,000
4,870,000
2,758,000
10,222,000
3,924,000
25,901.000
$600,194,000 d/

Includes $239,466,000 noncompetitive tenders accepted at the average price of 99.325
Includes $52,163,000 noncompetitive tenders accepted at the average price of 98.526
to a coupon issue of the same length and for the same amount invested, the return on
these bills would provide yields of 2.73$, for the 91-day bills, and 3.00$, 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.
•336

TREASURY DEPARTMENT
WASHINGTON, D.C.

December 18, 1961
FOR IMMEDIATE RELEASE

COMPTROLLER OF THE CURRENCY TO HOLD PUBLIC HEARING ON PROPOSH)
MERGER OF NATIONAL BANK OF DETROIT AND BANK OF LIVONIA
The Comptroller of the Currency announced today that he had
at the request of the National Bank of Detroit, Detroit, Michigan,
ordered a public hearing on the application for approval of the
proposed merger of Bank of Livonia, Livonia, Michigan, and the
National Bank of Detroit, Detroit, Michigan. The hearing is
scheduled for 9:30 a. m. Friday, January 5, 1962, in room 4121
of the Main Treasury Building, Washington, D. C. The hearing
will be on an informal basis, and will be conducted by the
Comptroller.
All interested parties are invited to submit their views
either by letter or orally on the subject matter of the hearing.
oO©
D-337

TREASURY DEPARTMENT
WASHINGTON, D.C.
December 18, 196l
FOR IMMEDIATE RELEASE

COMPTROLLER OF THE CURRENCY TO HOLD PUBLIC HEARING ON PROPOSED
MERGER OF NATIONAL BANK OF DETROIT AND BANK OF LIVONIA
The Comptroller of the Currency announced today that he had
at the request of the National Bank of Detroit, Detroit, Michigan,
ordered a public hearing on the application for approval of the
proposed merger of Bank of Livonia, Livonia, Michigan, and the
National Bank of Detroit, Detroit, Michigan. The hearing is
scheduled for 9:30 a. m. Friday, January 5, 1962, in room 4121
of the Main Treasury Building, Washington, D. C. The hearing
will be on an informal basis, and will be conducted by the
Comptroller.
All interested parties are invited to submit their views
either by letter or orally on the subject matter of the hearing.
0O0

D-337

TREASURY DEPARTMENT
•w v >

—

WASHINGTON. D.C
"'-eerabe-r 1 3 , 1 9 6 1

V-

V*r .wf

18, 1961
XKMQSDIAXB HBXJSASI*
SlIBSCBXI'fSB F I O J M F(B TEMSORX CCTEEUKI
o m TO HoiDffis (w smxm t AH) G S A V U G S BOH26 m T O E H G XH 19®%
The Treasury Department today announced the results of the current exchange offering of 3*7/8 percent Treasury Bonds ®f 1966, iated June 23, 1980,
OBittiliig H ^ 15, 1368, at a price of 99,50$, «£th certain interest and GOmr
adjustments as of December IS, 1961, open to holders of $070 million of out*
standing Series F and 0 savings bonds maturing ia 1362,
/counts exchanged were divided ammg the Federal Beserve Districts and
the Treasury as follows:
Cash

Federal Eeserve
District

Series F bonds
Exchanged

Series O boa&s
KxcfoMlgffifl

£&S&S5£S

Boston
Bwr T@rk
IMlMelphia
Cleveland
Bicimond
Atlanta
Chicago
St. I0K10
KUmeapolis
Kansas City
BaH&©
San Francisco
Tre&sory

$ 1,425,000
5,560,960
2,965,500
2,821,200
1,351,025
2,374,175
17,451,125
5,917,125
5,245,350
4,159,650
1,017,050
846,550
230,600

$ 23,104,100
45,422,900
19,989,500
21,558,400
10,500,200
11,395,100
48,445,200
19,728,100
15,538,100
23,412,000
8,935,800
19,021,900
2,019,600

$ 10,900
48,650
39,500
25,400
15,275
10,225
74,175
24,275
13,750
16,850
8,650
15,550
5,800

$ 24,538,000
48,832,500
22,992,500
24,405,000
17,664,500
15,779,500
65,968,500
25,669,500
18,797,000
27,588,500
9,941,500
19,884,000
2,256,000

#49,181,100

$270,828,900

$305,000

$320,315,000

TOEALS

®0o

Total
Allotments

TREASURY DEPARTMENT
WASHINGTON, D.C.
December 18, 1961
IMMEDIATE RELEASE
SUBSCRIPTION FIGURES FOR TREASURY OFFERING
OPEN TO HOLDERS OF SERIES F AND G SAVINGS BONDS MATURING IN 1962
The/Treasury Department today announced the results of the current exchange offering of 3-7/8 percent Treasury Bonds of 1968, dated June 23, 1960,
maturing May 15, 1968, at a price.of 99.50$, with certain interest and other
adjustments as of December 15, 1961, open to holders of $970 million of outstanding Series F and G savings bonds maturing in 1962.
Amounts exchanged -were divided among the Federal Reserve Districts and
the Treasury as follows:
Federal Reserve
District

Series F bonds
Exchanged

Total
Series G bonds Cash
Exchanged
Adjustments Allotments

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

$ 1,423,000
5,360,950
2,983,500
2,821,200
1,351,025
2,374,175
17,451,125
3,917,125
5,245,150
4,159,650
1,017,050
846,550
230,600

$ 23,104,100
43,422,900
19,969,500
21,558,400
16,300,200
11,395,100
48,443,200
19,728,100
',13,538,100
'23,412,000
\8,915,800
19,021,900
2,019,600

$ 10,900
48,650
39,500
23,400
13,275
10,225
74,175
24,275
13,750
16,850
8,650
15,550
5,800

$ 24,538,000
48,832,500
22,992,500
24,403,000
17,664,500
13,779,500
65,968,500
23,669,500
18,797,000
27,588,500
9,941,500
19,884,000
2,256,000

TOTALS

$49,181,100

$270,828,900

$305,000

$320,315,000

oOo

D-338

The Secretary of Warn treasury takes great pleasure in presenting
The Alexander Hamilton Medal to

A. QIMOM WUMB

msim&m MGmrim o# THE £m*s®f?r
for servloes as set forth in the following
SfBClH, 01TATI0M:
^tor outstanding leadership la the Treasury Bepartment whlcli
has brought substantial benefit to the people of our Hat ion. lis
devotion to duty as Assistant Secretary of the Treasury from
Seoember 20, 1957* to the present time, has resulted in laoreas*
ing the efficiency of inaportant bureaus of the ©apartment at a
time i*hen their contribution t© the safety and well~belng of the
nation has been of particular valued
"teens tlie fruits of the leadership provided by Assistant
Secretary Flues have been: fhe speeding aril aii^illfleatlon of
custom formalities, more effective eontrol of international
narcotics traffic; teproved tariff classification, antidumping legislation and regulation, m&

administration of

laws against unfair trade practices,* more efficient and
effective operation of the TJ&ited States Coast auard and a
higher aeholastie performance at its Academy; and preoption of
greater International cooperative efforts to suppress
eounterfelting."

December 19, 196l
FOR IMMEDIATE RELEASE
ASSISTANT SECRETARY FLUES RECEIVES THE
ALEXANDER HAMILTON MEDAL
Treasury Secretary Douglas Dillon today presented to outgoing Assistant Secretary A. Gilmore Flues the Alexander Hamilton
Medal, the Treasury's highest award. This award is given for
outstanding and distinguished leadership in the Treasury
Department.
Mr. Flues' resignation as Assistant Secretary becomes
effective today.
Secretary Dillon read the following special citation at a
ceremony in the Treasury Building at noon:
"For outstanding leadership in the Treasury Department which
has brought substantial benefit to the people of our Nation. His
devotion to duty as Assistant Secretary of the Treasury from
December 20, 1957* to .the, present time, has..resulted;. In increasing

The Secretary of the Treasury take® great pleasure in presenting
The Alexander Hamilton Sfedal to
A. GILMORH FLUES

ASSISTANT

smmthm m

THE

Tfmmm

for services as set forth in the following
fflOIAX, OITATIOH:
w

For outstanding leadership in the Treasury Department which

has brought substantial benefit to the p®&pl* of our Mat ion. lis
devotion to duty as Assistant Secretary of the Treasury from
Beoember m, 19S?, to the present time, has resulted In Increasing the efficiency of important bureaus of the Department at a
time when their contribution to the safety and well-being of the
Matlon has bmn of particular valuer
**teong the fruits of the leadership provided ^ As&lltant

December 19, 1961
FOR IMMEDIATE RELEASE
ASSISTANT SECRETARY- FLUES RECEIVES THE
ALEXANDER HAMILTON BOffl MEDAL
Treasury Secretary Douglas Dillon today presented to outgoing
Assistant Secretary A. Gilmore Flues the Alexander Hamilton Medal,
the Treasury's highest award. This award is given for outstanding
and distinguished leadership in the Treasury Department*
Mr* Flues' resignation as Assistant Secretary become effective
today.
Secretary Dillon read the following special citation at a ceremony
in the Treasury Building at noon:

December 19, 196l
FOR IMMEDIATE RELEASE
ASSISTANT SECRETARY FLUES RECEIVES THE
ALEXANDER HAMILTON MEDAL
Treasury Secretary Douglas Dillon today presented to outgoing Assistant Secretary A. Gilmore Flues the Alexander Hamilton
Medal, the Treasury's highest award. This award is given for
outstanding and distinguished leadership in the TreasuryDepartment .
Mr. Flues' resignation as Assistant Secretary becomes
effective today.
Secretary Dillon read the following special citation at a
ceremony In the Treasury Building at noon:
"For outstanding leadership In the Treasury Department which
has brought substantial benefit to the people of our Nation. His
devotion to duty as Assistant Secretary of the Treasury from
December 20, 1957* to the present time, has resulted in increasing
the efficiency of important bureaus of the Department at a time
when their contribution to the safety and well-being of the
Nation has been of particular value.
"Among the fruits of the leadership provided by Assistant
Secretary Flues have been: The speeding and simplification of
customs formalities, more effective control of International
narcotics traffic; improved tariff classification, anti-dumping
legislation and regulation, and administration of laws against
unfair trade practices; more efficient and effective operation of
the United States Coast Guard and a higher scholastic performance
at its Academy; and promotion of greater international cooperative
efforts to suppress counterfeiting."
The Alexander Hamilton Medal Is of gold and bears a bas-relief
portrait of Hamilton, the first Secretary of the Treasury, on one
side and the Treasury seal on the other. A certificate signed by
the Secretary of the Treasury oOo
accompanies the award.
D-339

TREASURY DEPARTMENT
WASHINGTON, D.C.
December 19, 1961
FOR IMMEDIATE RELEASE
COMPTROLLER OF THE CURRENCY DENIES APPLICATION TO MERGE
THE FIRST NATIONAL CITY BANK OF NEW YORK AND THE NATIONAL
BANK OF WESTCHESTER, WHITE PLAINS, NEW YORK

Comptroller of the Currency James J. Saxon announced today
that he had denied the application to merge The First National City
Bank of New York and National Bank of Westchester, White Plains,
New York. Mr. Saxon stated that he had denied the application on
the basis of a consideration of thee convenience and needs of the
community and the unbalanced nature of the banking structure which
in the judgment of the Comptroller would result in Westchester
County from approval of this merger.

A copy of the decision is attached.

0O0

TREASURY DEPARTMENT
WASHINGTON. D.C.
December 19, 1961
FOR IMMEDIATE RELEASE
COMPTROLLER OF THE CURRENCY DENIES APPLICATION TO MERGE
THE FIRST NATIONAL CITY BANK OF NEWT YORK AND THE NATIONAL
BANK OF WESTCHESTER, WHITE PLAINS, NEW YORK

Comptroller of the Currency James J. Saxon announced today
that he had denied the application to merge The First National City
Bank of New York and National Bank of Westchester, White Plains,
New York. Mr. Saxon stated that he had denied the application on
the basis of a consideration of the convenience and needs of the
community and the unbalanced nature of the banking structure which
in the judgment of the Comptroller would result in Westchester
County from approval of this merger.

A copy or the decision Is attached•

0O0

DECISION OF COMPTROLLER OF THE CURRENCY JAMES J. SAXON ON THE
APPLICATION TO MERGE NATIONAL BANK OF WESTCHESTER, WHITE PLAINS,
NEW YORK, AND THE FIRST NATIONAL CITY BANK OF NEW YORK, NEW YORK

STATEMENT
Application has been filed with the Comptroller of the Currency to merge

National Bank of Westchester, White Plains, New York, and The First National Ci
Bank of New York, New York.
The First National City Bank, one of the nation's outstanding institutions,

is the second largest bank in New York, and the third largest in the nation. It

had on September 27, 19^1, total resources of $7,952,198,366.49. It operates 8
branches in New York City, and three in Nassau County, as well as 79 foreign
branches. It has received approval to establish two branches in Westchester
County, one in Eastchester, and one in Harrison. Neither of these is open or
expected to be open for some time. Thus it presently has no branches operating
in Westchester County,
National Bank of Westchester, White Plains, is the second largest bank in
Westchester County. It had on September 27, 1961, total resources of
$271,214,235.91. Its main office is in White Plains, 29.3 miles from New York

City. It operates no branches in New York City. The largest bank in Westcheste
County is County Trust Company, with total resources on September 27, I96I, of
$5^1,351,126.k9* It has kl branches, all of them in Westchester County. In

addition to these two, there are 7 other commercial banks with main offices in

Westchester County of which the smallest is First National Bank of North Tarry

with total resources of $1^,973,388.39. It operates only in North Tarrytown an
has no branches. In Westchester County there also is a branch of Bank of
Commerce of New York in Yonkers, and a branch of Chemical Bank New York Trust
Company in Eastchester. Approval has been granted for the establishment of a
branch of Chase Manhattan Bank in Hartsdale, but this branch is not yet open.
New York is, of course, the largest metropolitan area in the nation, with
a population in excess of 10.5 million. The City itself has a population of

%J

7,781,984.

It has a number bf very large banks vigorously competing for local

business as well as for national and international business. It is perhaps
the most intensely competitive banking market in the nation.
Westchester County is immediately north of and contiguous to New York
City. According to official census publications it is a part of the New York
metropolitan area. It has an area of ^35 square miles, with a population of
808,891. It has a density of population of 1,859.5 persons per square mile,
but a large proportion of the population is concentrated in a number of cities
in the southern portion of the county adjacent to New York City. These include

Yonkers, with a population of 190,63^, New Rochelle with a population of 76,812,
and Mount Vernon with a population of 76,010.
If this merger should be approved, and if there should be approved the

establishment and operation by The First National City Bank of New York of branc

at the sites of the main office of the National Bank of Westchester, and of each
of its branches, The First National City Bank would thereby acquire 26 offices
in Westchester County, out of a total of 110 commercial bank offices therein.
The commercial banks in Westchester County with their total resources and
number of branches are:

-2-

;•}

TITLE AND LOCATION

TOTAL RESOURCES

"The Gramatan National Bank and Trust Company $ 19,365,205.69 1
of Bronxville", Bronxville, New York
"Northern Westchester National Bank, Chappaqua", 19,194,324.46 4
Chappaqua, New York
"The First National Bank of Mount Vernon", 52,453,485.63 3
Mount Vernon, New York
"First Westchester National Bank 86,390,033.13 13
of New Rochelle", New Rochelle, New York
"The First National Bank of North Tarrytown", 14,973,388.39 0
North Tarrytown, New York
"Scarsdale National Bank and Trust Company", 37,687,642.78 3
Scars dale, New York
"National Bank of Westchester, White Plains", 271,214,235.91 25
White Plains, New York
"First National Bank in Yonkers", 84,971,401.93 9
Yonkers, New York
"County Trust Company", 541,351,126.49 4l
White Plains, New York

* As of 9-27-61

-3-

BRANCHES

We find ourselves with^ heavy responsibilities in reaching our decision in
.this case. We must decide whether this merger is in the public interest, and
that decision must be made under the provisions of Section 18(c) of the Federal
Deposit Insurance Act (12 UCS.C. 1828(c)), in the light of six significant
1
statutory factors. These factors are the financial history and condition of each

of the banks involved, the adequacy of its capital structure, its future earning

prospects, the general character of its management, the convenience and needs of
the community to be served, and the effect of the transaction on competition
(including any tendency toward monopoly). We regard it as our duty to give the

broadest possible significance to each of these factors in order that our decisi
may truly be in the public interest.
Of critical significance in this case are the convenience and needs of the
communities involved and the effect of the merger upon competition (including
any tendency toward monopoly).
Convenience and Needs of the Community
In connection with this factor we must take into consideration the convenience
and needs of each community involved. These include: Westchester County, New
2
York City, the New York Banking District as defined in the application, New York
State, the national banking market, and the international banking market. First
and foremost, however, is the convenience and needs of the United States. We
are charged with responsibility for insuring that our national banking system
at all times has the capacity to perform and does perform its vital functions

1 The seventh statutory factor, whether corporate powers are consistent with
the purposes of the Federal Deposit Insurance Act has no significance in the
case of national banks whose corporate powers are in every case consistent.
p

This includes the counties of New York, Bronx, Westchester, Nassau, Queens, Kings
and Richmond.

-4-

OQ '*

of contributing to the free flow of money, the financing of government, national,

state and local, the financing of trade and commerce, national and international,

the financing of business and industry, the financing of home purchases, the fina
of consumer purchases, and where necessary, the financing of war.
The national banking system must play a vital role in contributing to economic

growth. Economic growth is a vital goal of our national economic policy. Achievement of the full potentials for our economic growth requires the most effective

functioning of our commercial banking system. It is our judgment that the banking
system has not performed in the fashion which is required if this goal is to be
attained. We must re-examine, reconsider, and if necessary, revamp our national
banking system to insure its adequacy to perform this vital role.
The vital role of banking in our economy is a prime reason for a NATIONAL
banking system. Nearly 100 years ago, after two earlier experiments with single

banks, the nation concluded that there was needed, and there was provided, a nati

banking system. Since that day in 1863 when the National Bank Act was first enact
the Executive, the Congress, and the Courts have jealously protected that system

against encroachment from any source. The courts have stated that, "National bank
3
are national favorites," and have recognized that national banks are federal
4
instrumentalities, created for public and national purposes. The Congress has often

legislated in the interests of the national banking system and to prevent it from
being at any competitive disadvantage with respect to state banks, e.g., in the

matter of branches. We represent the Executive as our predecessors in office have

over nearly 100 years. It is our responsibility, and our responsibility alone, ac

within the statutory policies prescribed by the Congress, to preserve and to prot
^ Tiffany v. Bank of Missouri, 18 Wall. 409, 4l3 (l874).
^ Osborn v. The Bank of the United States, 9 Wheat. 738, 860 (l824); Van Reed v.
Peoples National Bank, 19b1 U. S. 554 (1905); Franklin National Bank v. New York,

-5-

the national banking system, to insure that it has the capacity to and does
perform its vital governmental functions, and here specifically to consider
whether proposed mergers of national banks are in the public interest, and to

5
decide whether they should or should not be permitted.

And so, it is in the

light of this heavy responsibility that we must examine the proposal before us.
We must do so with great care.
The effect of this proposal would be to substitute in Westchester County
for the National Bank of Westchester, The First National City Bank of New York.

As has been stated, by this merger the latter bank would acquire at once 26 branc
in Westchester County. This would be in addition to one other branch for which

6
it has received approval, but which is not yet in operation.
Thus, should this merger be approved, the banking structure in Westchester

County would consist of County Trust Company with 4l branches, The First National
City Bank with 27 branches, 7 much smaller commercial banks with a total of 33
branches, and three branches of other New York City banks. Of the five largest
New York City competitors of The First National City Bank, two would have one
branch each in Westchester, with the other three having none. Such an unbalanced
banking structure is our major cause for concern in connection with this merger.
It Is desirable and in the public interest that New York City banks be

permitted to branch in the suburban portions of the metropolitan area. Banks like

other businesses should be permitted to follow their customers to the suburbs. As

society changes so must every business desiring to maintain Its position and achi
its growth potential change also* One of the serious problems in banking today

arises from legal restrictions, many of which were designed for an earlier age, w

' The National Bank Act is "A complete system for the establishment and governmen
of national banks/' Cook County National Bank y. United States, 107 U.S. 445, 448
(I883); Deitrick v. Greaney, 309 U.S. 190, 194 (1940).
"
" It has received approval to establish two branches in Westchester, but if the merger
should be approved, one of these would be consolidated with a close-at-hand branch
of National Bank of Westchester,

-6-

have hampered the proper accommodation by banks to the changing nature of our
society, and have inhibited not only their growth, but their ability to serve
efficiently our growing economy. Removal of the restrictions on New York City
banks branching in Westchester and Nassau Counties shows recognition of these
problems at the State level.
The most immediate advantage of this legislation to the public in Westchester

and Nassau Counties is the price competition which will result and which to som

extent has already resulted from the entry and prospective entry of the New Yor
City banks. On personal loans The First National City Bank charges 4 3/4$

discount, including insurance, whereas until very recently the Nassau and West-

chester banks charged Gjo discount, plus insurance, as most still do. The Natio

Bank of Westchester now charges k^f> discount, plus insurance, on new automobil

loans, &jo on personal loans. The Franklin National Bank of Long Island now cha
4j$ on new automobile loans, and on personal loans is stated to be competitive
with New York City banks. It is not unreasonable to suppose that the entry and
prospective entry of the New York City banks were a factor in the decisions of
the other banks to reduce their rates. Price competition resulting in lowered

rates to the public is a matter of public entitlement and is not without substa

national economic significance, but is consistent with national aims and policy
relating to production, employment, and growth.
There are other advantages. The larger banks have experts in very nearly

every important line of industry. The presence of these experts not only enable
the larger banks better to evaluate credit in specialized fields, but their
knowledge and services are of inestimable benefit to the borrowers. The larger

banks are thus enabled to give specialized services of a type not available fro
smaller banks. This also is to the public advantage.

-7-

C Q -1
"-> O "i-

It is likely also that the needs of small business in Westchester County

would be better served as a result of this merger. There is aggressive competiti

among the larger banks of the country to service the needs of small business, an
they do it well. The First National City Bank has pioneered and has been par-

ticularly outstanding in meeting the credit needs of and in aiding small busines

It remains one of the nation's leaders in this respect. We are aware of criticis
to the effect that only local banks can serve local needs, and that the small
businessman is more welcome at the smaller banks than at the larger ones. As
a general proposition we are satisfied that this is not true. As was stated at
the hearings on this merger, large banks do actually service the needs of small

7
business. Information submitted by the First National City Bank after the hearings

and included in the record, concerning its activities in lending to small busine

serves to confirm our view that small business in Westchester County would benef
from the entry therein of that bank.
Another considerable advantage which will flow from the entry of New York
City banks is the mere productive utilization of savings through improvement in
mobility of funds from areas of excess to places where they may be employed to

better advantage. This is a point in favor of the merger rather than against it.
The First National City Bank quite naturally desires to acquire surplus funds
available in Westchester County for use throughout the scope of its operations.

We believe there is general awareness of the need to remove impediments which ma
slow or obstruct the movement of capital to the uses which will contribute most

8
effectively to the nation's economic growth. Capital should not be artifically
condemned to inferior uses.

7—
Transcript of Hearing, statement of the Comptroller of the Currency, pp. 197-199

Transcript of Hearing, Colloquy between Mr. Arthur Roth and the Comptroller of t
Currency, pp. 153-155
-8-

Since we are satisfied that substantial benefits will be derived from

the entry of the New York City banks into Westchester County, the crucial questio
relates to the method by which, and the rapidity with which, access should be
permitted. The response to this question depends in turn upon the comparative

benefits to be derived from the entry of the New York City banks into Westchester
County through gradual entry, as contrasted with the more precipitate method
proposed here. It depends, finally, upon the effect of large-scale entry by
merger on the banking structure of Westchester County.
It is our view that these substantial benefits will more desirably be made
available in Westchester County through the establishment of de novo branches.
We believe that large scale entry by this merger would cause an unreasonable
distortion and dislocation in the present and future banking structure of

Westchester County not consistent with the public interest according to the stand

set forth in the Federal banking laws, particularly the so-called Bank Merger Act
There is no doubt that the larger New York City banks are today actively seeking
out acceptable branch sites in Westchester and Nassau Counties. Gradually, as

the population shifts to what are now the lesser populated sections of the county

acceptable branch sites will be located, supervisory approval secured, and branch
established. Already two of the larger New York banks have one branch each in
Westchester, and The First National City Bank has secured approval for two. It
seems likely that these branches, together with other branches which will be
approved and established, will supply the competitive pressures necessary to
bring the interest rates charged in Westchester more closely in line with those

now charged in the intensely competitive New York City area. There Is some eviden
that this is already transpiring. As stated above, both National Bank of Westchester and County Trust Company in Westchester, and Franklin National Bank in
Nassau, have to some extent lowered their interest rates. It may be assumed that

-9-

these reductions were the result of developing competitive pressures, actual

9
or anticipated.
Since it appears that the competitive capacity of New York City banks is
already making its influence felt on the loan-rate structure of Westchester, it
may be concluded that the convenience and needs of that area in these terms
will be served effectively through de novo branches, and without the merger.
There is no substantial evidence before us of failure to meet adequately
the convenience and needs of the public of Westchester County in respect to
matters other than interest rates on loans. It is generally agreed that there
exists no lack of lending capacity there; it is indeed a funds-exporting area.

There was testimony at the Hearing that all commercial banks in Westchester were
paying the maximum rate of interest on savings deposits permissible under
Regulation Q of the Board of Governors of the Federal Reserve System. No price

competition, of course, is allowed for demand deposits. The improved and enlarge

services which might be expected from the merger will come to Westchester County
through the branches of the New York City banks which may now be anticipated.

It appears, therefore, that approval of this merger is not warranted or required
by a consideration of the critical question of the convenience and needs of
Westchester County.
We attach serious implications to the prospective dislocations in the banking

structure which we believe would result from this merger. There are two principa
considerations: elimination of the National Bank of Westchester as a separate
entity; and the markedly superior position which The First National City Bank
would acquire over the other New York City banks in securing banking business

° There are presently pending before the Board of Governors of the Federal Reser
System two mergers involving proposed acquisitions by large New York City banks of
banks in Nassau each with a number of branches.
-10-

in Westchester County.
The National Bank of Westchester is a large, well-managed bank with its branch

offices strategically located at various points in the County. If it now eliminat

it will forever cease to exist. We are convinced that from a longer-range viewpoi
the elimination of this bank will have harmful effects, in terms of the public
interest. It now has total resources in excess of $250 million. Located, as it
is, in a rapidly growing portion of the largest metropolitan area in the nation,

and with other factors favorable to its growth, its continued success seems assur

It is therefore our view that the continued existence in Westchester County of th

bank outweighs any immediate benefits to be gained through this merger. Should th
merger be approved, there would remain in Westchester County, aside from the New
York City banks, County Trust Company with assets of more than $500 million, and
number of smaller commercial banks none as large as $100 million in size. Of the

New York City banks, one would have 27 branches in Westchester County, while none

of the others would have more than one branch. This would leave County Trust Comp

as the only really effective competitor of the New York City banks in Westchester
In contrast, should this merger be disapproved, there would continue to be two

large banks serving Westchester County, both well able to service the convenience
and needs of the County, and there would be preserved a reasonable equality-of-

opportunity for entry into Westchester County of all New York City banks. Clearly

this offers the more hopeful prospect of developing and maintaining there a viabl
and balanced banking structure under the banking laws.
These considerations appear to us to be of paramount importance, and indicate
that the merger should be disapproved. It is thus our judgment that entry of
few York City banks into Westchester County should be by branches, now permitted

The smaller banks could, of course, and no doubt would, continue to grow; they
could also provide effective competition, but only to the limits of their resources.
-11-

^c,
under New York Banking Law, and not through the proposed merger. We reach this

judgment because of our- concern that the proposed merger would produce serious
distortions and dislocations, and so that the evolut Ion of banking facilities
in that area may be observed and controlled in the best interests of the
communities involved and of the banking system.
The smaller banks in Westchester County, to the extent that they are able
properly to service the needs of their respective communities, should be given
the opportunity to grow and to prosper. It is our view that a balanced banking
system consisting both of small banks and of larger banks is more desirable
than one consisting solely or primarily of large banks or of smaller banks
artifically protected from vigorous competition. While small banks can and do

grow in competition with larger institutions, with unique benefit to the commer
banking system as such, approval of this merger could well beget an unbalanced
banking structure depending primarily on larger banks, just as denial of sub-

stantial - if gradual - entry of the New York City banks could beget an unbalan
structure where large segments of the population would have to rely on smaller
enjoying economically unjustifiable protection merely because of size.
If, as a matter of sound banking policy, the New York City banks are allowed
to compete equitably for acceptable branch sites in Westchester County, this
policy will itself lead to vigorous competition, with no one bank having an

excessive advantage over the others. As the New York City banks enter that Coun
even though on a gradual basis, the banks now there, including County Trust

Company and National Bank of Westchester, will find themselves under a constrai
to meet the new competition. This competition will insure to the public the

substantial benefits of one of the fruits of our system. There is no doubt that
both of these latter-named banks are well able to compete domestically on a

substantially equal basis with the largest New York City banks. The outcome wil
be in the public interest.
-12-

If entry is to be limited to the more gradual establishment of branches,
as will be required under this decision, the banking authorities will be better

to observe and determine whether the desired effects in terms of price competiti
and in other material respects are being achieved. We shall maintain our
interest in seeing that the banking needs of Westchester County are adequately
and properly served, and that the banking public has the benefits which are
expected of vigorous competition.
At the present time, rates in Westchester County and in Nassau County are
substantially higher than those charged for comparable loans by the larger New
York City banks. This results in some degree from the fact the banks in these
counties have in the past been protected by State law from competition. Some of
the banks in these Counties will continue to be protected by the Home Office
11
Protection Law of the State. We shall observe closely the situation in the cities
where this rule applies.
If it should develop that the public interest does require entry on a

substantial scale of branches of New York City banks, such entry will be authori
where legally permissible. Similarly, adequate and competitive servicing of the

banking needs of the County by existing banks will determine our policy in grant
new bank charters.

11
Section 105 of the New York Banking Law,

-13-

0 ;; I

Effect of the Transaction on .Competition (including any Tendency toward Monopoly
This is an issue charged with emotionalism and characterized at the present

time by an almost complete lack of clarity and objectivity, brought about in part

an indiscriminate use of conceptual terms. There has to our knowledge been no ade
study of bank competition or the standards by which the effects upon competition

bank mergers should be measured. The nature of commercial banking and the regulat

framework under which it operates distinguish banking from the type of industrial

enterprise to which the general antitrust laws were designed to apply, and render

highly questionable for judging bank mergers the concepts developed in the applic

of those laws to industrial corporations. For example, there are geographical lim

tions upon the expansion of banks which place ultimate limits upon their possible

growth. There Is also to some extent federal regulation of the supply of money wh

is the raw material of the commercial banking business. This is a factor in limit

the growth of banks since a bank which prospers cannot, as an industrial corporat
might do, purchase additional raw materials and increase productive capacity in

order to grow, A bank can acquire more loanable funds only by generating addition
deposits, a considerably more difficult undertaking than merely purchasing more

and producing more goods, and one which is subject to influences other than manag

decision. We believe it to be incumbent upon the bank supervisory agencies to ins

studies aimed at developing proper standards to Insure adequate competition in b

It is the banking agencies alone that have the facilities, the background knowled

the constant concern with the adequacy of banking to serve the financial needs of

government and of industry, as well as the understanding of the monetary and fisc
12
policies and problems of the nation necessary to adequate consideration of this matter.
We have stated publicly that we shall institute such studies both internally and
through the appointment of an advisory committee„

1?''Both managers and examiners of financial institutions should always bear in m
the role of our financial institutions in promoting economic growth." The Report
of the Commission on Money and Credit, p. 175,
-14-

*— \J ^_

Moreover, under the so-called Bank Merger Act of i960, (Section 18(c) of the

Federal Deposit Insurance Act), the banking agencies have the ultimate responsi

for the determination of the effect upon competition of bank mergers, and for th

preservation of effective but sound competition in banking. Their determinations

however, must, as the Congress wisely recognized in enacting the statute, be bas
on much broader considerations than competition alone.
We are unimpressed with the arguments presented to us that this proposed merger

will have such an adverse effect upon competition as to require our disapproval.

have been no serious arguments presented to us that this merger would substantia

lessen competition, and there is no evidence before us to support a conclusion t
13
it would. Such competition as the evidence indicates there may be between the

applicant banks is not significant when considered in the light of the total co

existing in the areas in which the banks operate. We find that there would be no
substantial lessening of competition resulting from this proposed merger.
It is urged upon us that this merger will result in a tendency toward monopoly.

In order to find a tendency toward monopoly we must find that by this merger The

First National City Bank would have moved measurably closer to~ the monopoly pow
14
being able to control prices or to exclude competition. First, however, there must

* The Federal Reserve report states that there is a "significant" amount of competitio:
between the two banks, which would be eliminated. Neither the Department of Justice
nor the Federal Deposit Insurance Corporation in its report to us on competition stat
that there would be a substantial lessening of competition. In a supplemental letter
addressed to us in response to our request for clarification of some aspects of its
original report, the Department of Justice in support of its contention that Westches
County is the relevant market area for this merger, urged that the Westchester banks
are not in competition in an important way with New York banks.

Ik
Transamerica Corp. v. Board of Governors, (C.A. 3, 1953) 206 F. 2d 163, cert. den.
M U.S. 901.
~

-15-

^Q0
*-* W 1-

be determined "the area or areas of existing effective competition in which monop
15
power might be exercised."
The area chosen must constitute "a single area of
effective competition among commercial banks."
No one has suggested or could seriously suggest that this merger would create

a tendency toward monopoly in the New York metropolitan area. On the contrary, it

is urged that the effects of this merger must be measured in Westchester County a

We agree that whatever competitive impact this merger would have would be in West

County, and that there would be no impact to any significant degree elsewhere. It
seems to us doubtful that a single portion of a large metropolitan area could
realistically be regarded as constituting a single area of effective competition
among commercial banks either from the viewpoint of enforcing the antitrust laws

considering the effect upon competition under the Bank Merger Act, particularly w

the large metropolitan banks are permitted to establish branches within the area.

It is unnecessary for us to decide this question, however, for it is clear that t
merger would create no tendency toward monopoly in Westchester County.
In the first place, we have considerable doubt that there can exist effective

monopoly power in commercial banking as it operates in this country today. Here a

is illustrated the difficulty of attempting to apply to banking antitrust concept

developed in connection with industrial enterprises. There are few other industri
subject to governmental regulation and control to the same extent as commercial
banking, and in the case of those that are it is usual that they are exempt from
IT
antitrust laws in matters subject to regulation.
In the case of banks there are
limitations on geographical expansion, there are limitations on the rates of

; Ibid., p. 169
Ibid.
' A good discussion of the interweaving of the antitrust laws and regulatory laws
in connection with regulated industries may be found in California v. Federal Power
Commission, No. I5687 (C.A.D.C., March 30, 1961), cert, granted, Oct. 9, 196I,
30 L.W. 3102.
-16-

L; Q

•-';?

interest which they may pay^on time and savings deposits, they are prohibited from
paying interest on demand deposits, they are limited by the usury laws in the
18
interest which they may charge on loans; the supply of loanable funds, which is
their stock in trade is limited (1) by the amount of deposits they are able to
generate, (2) by the reserves which they are required to keep with the Federal
Reserve System, (3) by the amount of the total money supply at any given time,
and in many other respects. The Board of Governors of the Federal Reserve System

National banking associations are probably subjected to as many regulations as any
type of institution in this country. For example, the Comptroller's approval is required for:
their chartering, the establishment of branches, mergers, consolidations,
purchases of assets, assumption of liabilities, conversion from state into national
banks, increases in capital, decreases in capital, stock dividends, dividends exceeding net profits for three years, certain types of borrowing, investment in bank premises in excess of the amount of capital, change of location, change of name, etc. They
are subject to regulations of the Comptroller of the Currency regarding investment
securities, real estate loans, engaging in the Insurance business, acting as real
estate broker, making loans on leaseholds, etc. They are subject to regulations of
the Board of Governors of the Federal Reserve System with respect to: Reserves required to be maintained against deposits, amount of interest which may be paid on time
and savings deposits, interlocking directorates, loans to executive officers, exercise of trust powers, collection of non-cash items, check clearing and collection,
the establishment of foreign branches and foreign subsidiaries, affiliate relationships, relationships with dealers in securities, loans secured by registered stocks,
etc. They are subject to regulations of the Federal Deposit Insurance Corporation
with respect to advertising. They are prohibited by law from: establishing additional offices outside their own states, and in many cases within their own states,
engaging in the securities business, underwriting and dealing in special revenue or
corporate securities, lending more than a specified percentage of capital and surplus
to any one borrower, making loans on real estate except in accordance with statutory
requirements, owning real estate other than that necessary to their accommodation
in their business, engaging in the banking business with less than a specified amount
of capital, purchasing their own shares of stock or making loans on their own shares
of stock, borrowing in excess of the amount of their capital, paying interest on demand
deposits, charging interest in excess of that permitted by the usury laws, dealing
with affiliates except in specified ways, accepting drafts in excess of specified
amounts, acting as insurance agent or real estate brokers in towns of more than 5,000,
acting as agent for nonmember banks in receiving discounts from Federal Reserve banks,
acting as agent of any nonbanking person in making loans on the security of stocks to
brokers or dealers, engaging in business transactions with their directors, except on
specified terms, etc. Every national bank is required by law to be a member of the
Federal Deposit Insurance Corporation and the Federal Reserve System; it must furnish
periodic reports to the Comptroller of the Currency and the Federal Deposit Insurance
Corporation upon calls submitted by them; it must submit to semiannual examinations
by the Comptroller of the Currency; and its shareholders are subject to assessment
for impairment of capital.

-17-

has several methods including the setting of reserve requirements and discount
rates, and open market operations, which it can and does use to influence the
money supply. It is not within the power of banks, as is true of industrial
corporations, to increase freely their productive capacity. A bank which
attempted to use lower interest rates on loans as a means of driving out
competition would very soon find itself without loanable funds.
Whatever the risks may be that monopoly power could be attained in banking,
we are satisfied that it could not be achieved in an area such as Westchester

County, which is immediately adjacent to the most intensely competitive bankin
institutions in the nation, and which is open to branching by a significant
number of those large and aggressive banks.
In Westchester County there is at the present time County Trust Company,

a commercial bank with 4l offices and total resources of more than $500 millio
This bank is and can continue to be an able and effective competitor. There
is no doubt that a bank of this size and efficiency can compete and compete
well with banks of the largest size, including The First National City Bank.
In addition to County Trust, there are other commercial banks ranging in size

from the First Westchester National Bank of New Rochelle, with total resources
of $86 million, to The First National Bank of North Tarrytown, with total

resources of $15 million. Each of these banks is protected from the establish-

ment of branches of The First National City Bank in the city in which its main
office is located, by the provisions of Section 105 of the New York Banking

-18-

19
Law. We have no fear that these banks will be unable to compete effectively
even when faced with increased competitive pressures. There are also located
in Westchester County at the present time, two branches of New York City
banks, a branch in Yonkers of the Bank of Commerce and a branch in Eastchester
of The Chemical Bank New York Trust Company. Under New York and Federal law,

New York state and national banks, respectively, can be authorized to establish
additional branches in Westchester.
The First National City Bank's present policy of charging the same rates
at all its offices, if continued, would restrict its capacity to use its
20
admittedly great financial resources to achieve a monopoly position. Any
change in this policy,if there was any evidence that it was designed for the
purpose either of achieving or exercising monopoly power, would bring the most
intensive supervisory scrutiny.
We find that there is no foreseeable possibility of The First National
City Bank acquiring monopoly power in Westchester County, and hence that there
would be no tendency toward monopoly resulting from this merger.
Neither do we find that this merger would result in any undue concentration
of banking resources in Westchester County. The First National City Bank of
New York now has no offices, and hence no resources in Westchester County.

The effect of this merger would be to substitute that bank in Westchester Count

the National Bank of Westchester. This would result in no change in the concent

By this merger The First National City Bank would acquire branches in New Rochelle
and in White Plains where are located the main offices respectively of First Westchester National Bank of New Rochelle and County Trust Company. It would be able
to acquire no additional branches in either place because of the home office
protection law.
•° Transcript of Hearings, Testimony of Mr. George Moore, p. 93.

-19-

of resources in the County, It does not seem to us realistic to take account of

all of the resources of The First National City Bank, acquired through its dep

in all of its other offices, in measuring the concentration of banking resourc

Westchester County. Moreover, since Bank of Commerce and Chemical Bank New Yor

Trust Company each have an office in Westchester, and The Chase Manhattan Bank

soon will, that approach would require including also the total resources of a
of those banks, thus obviously giving a greatly distorted view of the banking
structure in Westchester County. Any increase in concentration resulting from

this merger would have to be appraised in terms of the entire areas in which b

banks operate. Viewed in this light, there would be no undue increase in conce
tion.
Objection has been made to this merger on the ground that the smaller banks

in Westchester would find It difficult to compete with the lower rates and bet

services offered by The First National City Bank, As we have stated earlier, w
have no fear that the smaller banks in Westchester County would be unable to
compete effectively if this merger were approved, particularly in view of the
21
office protection which their main offices enjoy. Even if we thought otherwise,

however, we do not believe that this would be a proper basis upon which we cou

disapprove this merger. The purpose of assuring competition is to bring to the

public the best and broadest services at the lowest cost. Only keen competitio

will insure this result. It seems to us to amount to a perversion of this conc

to undertake the protection of small competitors from fair competition by larg
competitors, if thereby the public is wholly or partly denied the benefits of

petition to which it is entitled. By fair competition we mean competition in t

It is perhaps significant that while each was invited to do so, no commercial
bank operating in Westchester County appeared at the hearing in opposition to
merger, and only one commercial bank furnished for the record a statement in
opposition,
-20-

f— --•*, -•&

absence of monopoly power, and without predatory purpose. We have concluded

above that The First National City Bank could not foreseeably achieve monopoly

power in Westchester County, and if the rates charged and services rendered in
Westchester County were identical with those offered in New York City, that
22
would be ample evidence that they were not fixed with a predatory purpose.
We have been unable to find any authority, and none has been cited to
us, to support a conclusion that there is any national policy to prevent fair
competition which may adversely affect some rival firms, and we reject this
argument. In response to a specific question from us, the Department of

Justice has advised us that "Nothing in our national policy of free competitio

protects competitors of any size from the kind of competitive advantages First
National City would enjoy in Westchester when such advantages are achieved
through normal growth and efficiency," but that "Congress has chosen to close
the path to the achievement of such advantages through combinations, mergers
or acquisitions where the effect of such combinations may be to substantially
lessen competition or tend to create a monopoly or unreasonably restrain
trade," Since we are satisfied that the effect of this merger would not be

to substantially lessen competition or tend to create a monopoly or unreasona
restrain trade, we are satisfied that considerations of the protection of
smaller competitors would not be pertinent to our conclusion with regard
to the effect upon competition.

22
See footnote 20.
-21-

As bank supervisors, we would, of course, be concerned with competition
which might lead to insolvency, lack of reasonable earnings, or unsound
practices on the part of any bank. This is one of the prime reasons for
bank supervision and for requirements of supervisory approval of new charters,
branches, mergers, etc. We must not confuse our consideration of banking
factors, however, with our consideration of competitive factors. Part of
the existing confusion concerning bank competiton stems from a failure properly
to distinguish banking factors from competitive factors.
One other consideration needs mentioning. This proposed merger was
for legitimate business purposes, and no part of the purpose was to eliminate
a competitor nor to attempt to monopolize. Having been prohibited by law for
more than a century from expanding into Westchester and Nassau Counties,
The First National City Bank, as well as other large New York City banks,
quite naturally are anxious to acquire a share of the banking business in
those large, expanding areas. Like other business, banks desire to
follow their customers to the suburbs. More important considerations, how-

ever, are the natural and laudable desires on the part of The First National Cit

-22-

'•-. ''C- 1

23
to slow the proportionate decline in the volume of its business, to secure

additional deposits so the funds can be used in its national and international
business, and thus to facilitate the free flow of funds from areas of surplus

to areas of need. The fastest and most efficient way to accomplish these purpo

would, of course, be to merge with another bank having a volume of deposits an
a number of offices.

It has been suggested that the desirable results to be achieved by this merger
could be achieved also through correspondent relationships. This shows a lack
understanding of the nature of those relationships as well as the basis upon

which they exist. Such relationships exist primarily to breach artificial barr
and they result in services to the smaller banks in the nature of tax advice,

investment advice, etc., which the small banks cannot easily provide for themselves. These services are compensated for, of course, by deposits maintained
with the larger bank. Correspondent relationships are in no sense an adequate
substitute for the establishment of branches.
Some of what we have considered under the convenience and needs factor might
be pertinent also to the competitive factor. However, our primary concern has

been with the balance of the banking system in Westchester County, the structu

of the system, how best the banking needs of the community can be served, what

sizes and types of banks there should be, the mnnber of banks, etc. In our vie

these are clearly relevant to the banking factors and for determination by the
Comptroller of the Currency in the exercise of his supervisory authority over

national banking system, rather than to the competitive factor, of the Bank Me

law, where the primary concern is with lessening of competition or tendency to
monopoly.
See comparison of growth in gross national product with growth in commercial
bank assets in the merger application, p. 88; and the comparison of growth in gross
national product with growth in total assets of the First National City Bank of
New York submitted by the bank after the hearing for inclusion in the Record.
-23-

We are satisfied that the effect of this merger upon competition alone
would not be such as to require its disapproval. If the benefits to be derived
in Westchester County from the entry therein of the larger New York City banks

could be secured only through this merger, we would have no hesitancy in approvi
it. We may say that it is our view that there has been a considerable overemphasis placed upon an alleged lack of competition in banking, and an alleged
concentration in banking. To the contrary, banking is highly competitive. It
is diffuse rather than concentrated, and the smaller institutions by and large
are growing at a faster rate than are the largest banks. We find no reason for
concern over the future of competition in banking.
Other Factors
We have considered the financial history and condition of the banks involved,
the adequacy of their capital structures, their future earnings prospects, the

general character of their management, and whether their corporate powers are co

sistent with the purposes of the Federal Deposit Insurance Act. In our considera
of these factors we have found nothing to change our views as expressed above.
Our action with respect to this merger should in no wise be regarded as any
unfavorable reflection whatsoever on The First National City Bank of New York,
nor Its purposes in submitting this application. This bank is in the very first
rank of American financial institutions, and is outstanding in every way.
Conclusion
In view of our conclusions with respect to the convenience and needs of
•the community involved, we have concluded that this merger should be, and it
hereby is, disapproved.

James J. Saxon
Comptroller of the Currency
December 19, 196l
-24-

TREASURY DEPARTMENT
'o J _

WASHINGTON, D.C.

December 19* 1961

FOR IMMEDIATE RELEASE
CONTROLLER CF THE CURRENCY DECLARES THE FIRST
NATIONAL BAtK OF MAUD, MAUD, OKLAHOMA, INSOLVENT
Comptroller of the Currency James J. Saxon
today declared The First National Bank of Maud, Maud,
Oklahoma, insolvent and appointed the Federal Deposit
Insurance Corporation as Receiver.

This action was

taken due to the disclosure, during an examination,
of apparent irregularities in sufficient amount to
render the institution insolvent.

The deposits of

the bank are insured by the Federal Deposit Insurance
Corporation to a maximum of $10,000 for each depositor.

o0©

QHQ
t

v V. £_

TREASURY DEPARTMENT
WASHINGTON. D.C.

December 19, 1961

FOR IMMEDIATE RELEASE
COMPTROLLER OF THE CURRENCY DECLARES THE FIRST
| NATIONAL BANK OF MAUD, MAUD, OKLAHOMA, INSOLVENT
Comptroller of the Currency James J. Saxon
today declared The First National Bank of Maud, Maud,
Oklahoma, insolvent and appointed the Federal Deposit
Insurance Corporation as Receiver. This action was
taken due to the disclosure, during an examination,
of apparent irregularities in sufficient amount to
render the institution insolvent. The deposits of
the bank are insured by the Federal Deposit Insurance
Corporation to a maximum of $10,000 for each depositor.

oOo

- 2engaged in anti-trust problems. Before that, he practiced law
in New York City, Massachusetts, and New Hampshire. In addition
to his law practice, he has served as executive officer and
director of several corporations.
Assistant Secretary Reed served in motor torpedo boat
squadrons in the South Pacific with the U. S. Navy during World
War II. He is a graduate of the Harvard Law School, Amherst
College and Deerfield Academy. He also studied at the Harvard
School of Business Administration. He was born in Pittsfield,
Massachusetts, in 1919. He is married to the former Julia Read
of Holyoke, Massachusetts. They have four children, three
girls and a boy.

o0o

Press Release

QfM

December 20, 1961
JAMES A. REED SWORN IN AjJ ASSISTANT SECRETARY
OF THE TREASURY
Secretary Dillon today swore in Mr. James A. Reed of
Massachusetts as Assistant Secretary of the Treasury.
Mr. Reed's appointment was announced by President Kennedy
on December 6.
In welcoming Mr. Reed to the Treasury, Secretary Dillon
said: MIn these critical times, the work of the Treasury and
its operating bureaus is assuming ever greater importance to
our nation and to the Free World. You can be proud to be part
of this Department. We are proud to have you."
Succeeding A. Gilmore Flues, whose resignation became
effective yesterday, Assistant Secretary Reed's appointment will
JT4/
come before the Senate when it reconvenes fex£\ January. His
duties will include jurisdiction over the Bureau of Customs,
Bureau of Engraving and Printing, Bureau of Narcotics, Office
of Law Enforcement Coordination, and the U^S/Coast Guard.
At the time of his appointment, the new Assistant Secretary

was Special Assistant to the Attorney General of the United State

TREASURY DEPARTMENT

- -

WASHINGTON. D.C.
December 20, 196l
FOR IMMEDIATE RELEASE
JAMES A, REED SWORN IN AS ASSISTANT SECRETARY
OF THE TREASURY
Secretary Dillon today swore in Mr. James A. Reed of
Massachusetts as Assistant Secretary of the Treasury. Mr. Reed»s
appointment was announced by President Kennedy on December 6.
In welcoming Mr. Reed to the Treasury, Secretary Dillon
said: "In these critical times, the work of the Treasury and
its operating bureaus is assuming ever greater Importance to our
Nation and to the Free World. You can be proud to be part of
this Department. We are proud to have you."
Succeeding A. Gilmore Flues, whose resignation became
effective yesterday, Assistant Secretary Reed's appointment will
come before the Senate when it reconvenes in January. His duties
will include jurisdiction over the Bureau-of Customs, Bureau of
Engraving and Printing, Bureau of Narcotics, Office of Law
Enforcement Coordination, and the United States Coast Guard.
At the time of his appointment, the new Assistant Secretary
was Special Assistant to the Attorney General of the United
States, engaged in anti-trust problems. Before that, he practiced
law in New York City, Massachusetts, and New Hampshire. In
addition to his law practice, he has served as executive officer
and director of several corporations.
Assistant Secretary Reed served in motor torpedo boat squadrons
in the South Pacific with the U. S. Navy during World War II. He
is a graduate of the Harvard Law School, Amherst College and
Deerfield Academy. He also studied at the Harvard School of
Business Administration. He was born in Pittsfield, Massachusetts,
in 1919. He Is married to the former Julia Read of Holyoke,
Massachusetts. They have four children, three girls and a boy.
0O0

D-3^0

TREASURY DEPARTMENT
WASHINGTON, D.C.
December 20, 196l

FOR IMMEDIATE RELEASE
TREASURY DECISION ON ACOUSTICAL TILE
UNDER THE ANTIDUMPING ACT

BOB

FOR IMMEDIATE RELEASE
TREASURY DECISION ON ACOUSTICAL TILE
UNDER THE ANTIDUMPING ACT

Ehe Treasury Department has,determined that acoustical
tile from Canada 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 Canada without regard to any question of dumping.
The dollar value of imports of the involved merchandise
received during the first 8 months of 1961 was approximately
$100,000.

TREASURY DEPARTMENT
WASHINGTON, D.C.
December 20, 196l

FOR IMMEDIATE RELEASE
TREASURY DECISION ON ACOUSTICAL TILE
UNDER THE ANT-IDUMPING ACT

The Treasury Department has determined that acoustical
tile from Canada 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 Canada without regard to any question of dumping.
»

The dollar value of imports of the involved merchandise
received during the first 8 months of 1961 was approximately
$100,000.

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 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.

x>u.iiis~LLi^ JLJUSUX u u u i u u s &ci.iex-a,j-j.,y m a y SUDE

- 2rvon

tenders for account of customers provic
the names of the customers are set fori
in such tenders.

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 i

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 pant, 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 Octobers. 19R1 > ( 91 days remaining until maturity date on
Auril 5. 1962
182

_) a n d 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 January 4, 1962 , in cash or

other immediately available funds or in a like face amount of Treasury bills ma
ing January 4, 1962 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 exaRBtlox.* as such, and l

TREASURY DEPARTMENT
Washington
IMMEDIATE RELEASEmm3BS«se December 21, 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) f

m
cash and in exchange for Treasury bills maturing

January 4, 1962

, in the amount

S$£)
of $1,700,208,000

, as follows:

xpSF
91 -day bills (to maturity date) to be issued January 4. 1962 y
in the amount of $1,100,000,000 , or thereabouts, representing an additional amount of bills dated

October 5, 1961

•

and to mature April 5, 1962 , originally issued in the
amount of $600,246,000

, the additional and original bills

to be freely interchangeable.
182 -day bills, for $600,000,000 , or thereabouts, to be dated
January 4. 1962

, and to mature

July 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
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 (mat
value).

Tenders will be received at Federal Reserve Banks and Branches up to the closin

hour, one-thirty o'clock p.m., Eastern Standard time, Friday. Ttece^rSQ, 1963 •

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

TREASURY DEPARTMENT
WASHINGTON, D.C.
December 21, 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 January 4, 1962, in the amount of
$1,700,208,000, as follows:
91-day bills (to maturity date) to be issued January 4, 1962,
in the amount of $1,100,000,000, or thereabouts, representing an
additional amount of bills dated October 5, 196l, and to
mature April 5, 1962,
originally issued in the amount of
$600,246,000,
the additional and original bills to be freely
interchangeable.
182-day bills, for $600,000,000, or thereabouts, to be dated
January 4, 1962, and to mature July 5s 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 Standard
time, Friday, December 29, 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.
Banking institutions generally may submit-tenders for account of
customers provided the names of the customers are set forth in such
tenders. Others than banking institutions will not be permitted to
S
^ i t ^ t 5 n d e r L e ; c e p t f o r t h e i r o w n 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-^l
^ °.^u. uau«

- 2 Immediately after the closing hour, tenders will be opened at
the Federal Reserve Banks and Branches, following which public
announcement will be made by the Treasury Departmment of the amount
and price range of accepted bids. Those submitting tenders will be
advised of the acceptance or rejection thereof. The Secretary of
the Treasury expressly reserves the right to accept or reject any or
all tenders, in whole or in part, and his action in any such respect
shall be final. Subject to these reservations, noncompetitive
tenders for $200,000 or less for the additional bills dated
October 5, 1961, (91-days remaining until maturity date on
April 5, 1962)
and noncompetitive tenders for $ 100,000
or less for the 182-day bills without stated price from any one
bidder will be accepted in full at the average price (in three
decimals) of accepted competitive bids for the respective Issues.
Settlement for accepted tenders in accordance with the bids must be
made or completed at the Federal Reserve Bank on January 4, 1962,
in cash or other immediately available funds or in a like face
amount of Treasury bills maturing January 4, 1962. 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 t© 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.
i

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

TREASURY DEPARTMENT SIS
WASHINGTON, D.C.
December 26, 1961
FOR IMMEDIATE RELEASE
1962 SAVINGS BONDS CONFERENCE
Secretary Douglas Dillon today announced that he has
Invited 900 executives to attend a conference with top
Government officials in Washington on January 19, 1962. The
conference is being sponsored by the Savings Bonds Division
of the Treasury Department.
The conference has two main purposes. The first is to
launch the 1962 Savings Bonds Program, which makes a major
contribution to government financing and national thrift. The
second is to give leading executives in business, labor,
banking, communications and other fields a report on national
and international problems and the fiscal, monetary, defense and
foreign policies adopted to meet them.
In addition to Secretary Dillon, other officials scheduled
to speak at the conference include: Dean Rusk, Secretary of
State; William McChesney Martin, Jr., Chairman of the Board of
Governors of the Federal Reserve System; James E. Webb,
Administrator of the National Aeronautics and Space
Administration; Roswell L. Gilpatrlc, Deputy Secretary of
Defense; Henry H. Fowler, Under Secretary of the Treasury, and
William H. Neal, National Director, Savings Bonds Division.
President Kennedy has been invited to give the closing address.
0O0

D-342

TREASURY D :PARTMENT
WASHINGTON, D.C.
December 26, 1961
FOR IMMEDIATE RELEASE
1962 SAVINGS BONDS CONFERENCE
Secretary Douglas Dillon today announced that he has
invited 900 executives to attend a conference with top
Government officials in Washington on January 19, 1962. The
conference is being sponsored by the Savings Bonds Division
of the Treasury Department.
The conference has two main purposes. The first is to
launch the 1962 Savings Bonds Program, which makes a major
contribution to government financing and national thrift. The
second is to give leading executives in business, labor,
banking, communications and other fields a report on national
and international problems and the fiscal, monetary, defense and
foreign policies adopted to meet them.
In addition to Secretary Dillon, other officials scheduled
to speak at the conference include: Dean Rusk, Secretary of
State; William McChesney Martin, Jr., Chairman of the Board of
Governors of the Federal Reserve System; James E. Webb,
Administrator of the National Aeronautics and Space
Administration; Roswell L. Gilpatric, Deputy Secretary of
Defense; Henry H. Fowler, Under Secretary of the Treasury, and
William H. Neal, National Director, Savings Bonds Division.
President Kennedy has been invited to give the closing address.
0O0

D-342

si*
G#e«sboi? 22, X961

m^mtkhx-jL

iumjts of m*m&itiv& wttuu mi* cmmtm

fhs twmmmy B€*parij«iifc n.«noimc»d last a*o*tat that tte tottdars for tuo aorta* of
Tvaojravy btXXs, out suria® to ba an additional laaua of tha milt datad 3ept®i8t*©r 28,
1961, « u too otter sorloa to bis datod Ifeaaabor 28, 1961, waiah l e w off©rod @» Deoaa*
aar 35, w w w oponod at tha F@d@raX fl©®#3nr# Saute® on Baeoa&ar 22* fonder* w » » Imrltad
for flfXO0,OOO,0OO, or tfaaraabovta, of 91~stay W X U and for #00,000,000, or tteroafeoat*
of 182-day bill** fb* detail© of the two sarias ar® m foXXovat
lla*dajr Traastu* bill®
91«4a/ Troasary biXX*
BAHNS of ACG^PTSD
a»t*r*ag 3mm 2&, 1962
>rox* Equiv*

frim

Aattoal .Ifcato

8Lgh
Avorogo

99.338
99*3Wi

1.619*

z.sna |/

Hi—

AppfOK, Iquiv,
Annual Bate

"3E3TF

o*»—

9S.SfO
98,562

2.8681

2.m$y

6 poroest of Om astouat of 93Htogr bills bid tm at tb* low prioo was accepted
39 poraoat of Om ajftoant of I82~day bill® bid for mi tto low prioo was aoooptod

TOTAL

rmmm Af?urs FCII A*O kcc*ma M rm$dkt &•*>:&?, nuxaors?

Blatrlat
Boston
«ew Xorie
PfeiladaXpfeia
CXavalaiid
Stateend
Atlanta
Shloago
3t, Louia
MitJ»apoli&
gaaaaa City
OaXlaa
3*» Franalsoo
T02AX3

I

Applied for

x,393,i*i7,QQ0
2?,2XXfOOO
1*6,963,000
l»,**l,000
17*77^000
X99,76§,00®
26fl§66f0OO
18,006,000
28,51*2,000
62,91*0,00®

Aec@pi«d

Appliod For

Aoe«pt«d

I »;ii¥;ssj

rTftass fUTTOw

1,965,000
U#9X6fO0O
9X0,560,000 li67,i*80,OOO
l6
tX9X,000
1,6,1*65,000
6,970,000
3,SS7,O0O
21,191,000
lJt,5n»000
6,126,000
3,5S7,000
Xfe,ftb»000
1*8,363,000
6,526,000
X33,8iS,000
©,267*000
102,763,000
20,1*92,000
k,93®,O0O
6,828,000
X$,Q06,000
X2,657,000
$,JOO,ooo
2S,5i*2,ooo
a,O69,000
13,667,000
X8,2|0,OO0
|X,9XO,S65fOOO $1,100,000,000 a/ iX,X6O,289,OO0
5a»o69fO0O t6OO,XX3,OO0 y
J3tftiu«
16,012,000
Iaolada* $189,963,000 i»a©«potitlTO tondara aooaptad ot.tte «wsro«» prim of ff*M
Xjael^on 1^6,762,000 noEo«potitiv« toisdor® «M»ptod at tlw a w m g o frioo of 98.1^
to a mwom imm of tins osno Xougtfe md for the s « o «aio»Bt lnvootod, tbo rstof* ©a
thmM bill® mv&& prmU& jltldt of t.ojft, for tbt 9X-d«y bills, *ni t.93f, f«jfAJ>»
X82-ds/ bill®, XflEtovoBt m t o o on biXXo trs oju»tod in tow® of bonk dXooomt wm
tho r®lu» r@lat@4 to tbo f*o© sjmnt of tba M i l ® pfty»bXo »t aotwlty &***$***
Ow wmm% iirrtotod ond tbtir Xonfth ia ootuaX ansibor of 4m* roXotod to • j m ~ m
/oor* U ooolffftot, -mU& m eoniflomtoB. aotos, and, b o m ^ oro oo^ntod is tow*
of iator#«t on ti» mmmm iiwostod, »nd rolrtt tbt. mntor of dajo r«almisg^i» ^
iat©r®«t p«p^at ptriod to tht actnaX nmber of daj* la tho poriod, olth
nmmomMm
if w>r@ tban on* oottpon w r i o ^ In lnvolf*d«

Azauaag

JH

Ul

TREASURY DEPARTMENT
WASHINGTON, D.C.
December 22, 196l
FOR RELEASE A. M, NEWSPAPERS, Saturday, December 23, 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 September 28,
l?6l, and the other series to be dated December 28, 196l, which were offered on December 15, were opened at the Federal Reserve Banks on December 22, Tenders were invited
for $1,100,000,000, or thereabouts, of 91-day bills and for $600,000,000, or thereabout
of 182-day bills. The details of the two series are as follows?
RANGE OF ACCEPTED
COMPETITIVE BIDS:
HLgh
Low
Average

91-day Treasury bills
maturing March 29, 1962
Approx. Equiv,
Price
Annual Rate
"997550
2.571%
99.338
2.619$
99.3*44
2.594% 1/

182-day Treasury bills
maturing June 28, 1962
Approx. Equiv,
Price
Annual Rate
98.572
2.625%
98. # 0
2.868%
98.562
2.845% 1/

6 percent of the amount of 91-day bills bid for at the low price was accepted
39 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:
Accepted
District
Applied For
Applied For
Accepted
$
36,404,000
|
30,216,000
3F" 13,714,000 $ 13,714,000
Boston
1,393,147,000
732,447,000
910,560,000
467,480,000
New York
6,970,000
1,965,000
27,211,000
11,918,000
Philadelphia
21,191,000
16,191,000
46,965,000
46,465,000
Cleveland
3,557,000
3,557,000
14,591,000
14,591,000
Richmond
6,528,000
6,128,000
17,774,000
14,524,000
Atlanta
102,763,000
48,363,000
199,765,000
133,825,000
Chicago
6,828,000
6,267,000
26,466,000
20,492,000
St. Louis
5,430,000
4,930,000
18,006,000
15,006,000
Minneapolis
12,667,000
12,657,000
28,542,000
28,542,000
Kansas City
54,069,000
4,069,0(D0
62,940,000
,18,240,000
Dallas
16,012,000
14,792,000
38,754,000
33*814,000
San Francisco
#1,910,565,000
#1,100,080,000 a/ $1,160,289,000
,113,000 b/
TOTALS
a/ Includes $189,963,000 noncompetitive tenders accepted at the average price of 99.3W
\l Includes $46,762,000 noncompetitive tenders accepted at the average price of 98.562
V On a coupon issue of the same length and for the same amount invested, the return OJ
these bills would provide yields of 2.65%, for the 91-day bills, and 2.93%, for t:
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 tha
the amount invested and their length in actual number of days related to a 360-da;
year. In contrast, yields on certificates, notes, and bonds are computed in term
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 semiannu
compounding if more than one coupon period is involved.

D-3^3

TREASURY DEPARTMENT
Washington

FOR RELEASE ON DELIVERY

816

December 27, 1961

REMARKS OF THE HONORABLE ROBERT V. ROOSA,
UNDER SECRETARY OF THE TREASURY FOR MONETARY AFFAIRS,
AT THE JOINT LUNCHEON OF THE AMERICAN ECONOMIC
ASSOCIATION AND THE AMERICAN FINANCE ASSOCIATION,
HOTEL COMMODORE, N W YORK, NEW YORK, THURSDAY,
DECEMBER 28, 1961, 12:30 P.M., EST

RECONCILING INTERNAL AND EXTERNAL FINANCIAL POLICIES

When a former teacher who has long since strayed from the class room
finds himself appearing before such a group of professional economists as
these meetings bring together, there is only one thing he ought to do: ask
questions. What I have to say today is, in fact, just one long series of
questions. But since I have never been able to stay in good voice on a
succession of rising inflections, I am going to say a number of things in
a positive, perhaps provocative, manner, hopeful that you will understand
that a spirit of flexible inquiry, and not a hardened Government policy,
lies behind them.
My own particular concern is with the financial side of things —
fiscal policy, debt management, monetary policy, foreign exchange. Though
my questions, in reviewing the possibilities for reconciling internal and
external policies, may not stay wholly within the bounds of the financial
area, I will hope to be excused from the obligation, which anyone approach- •
ing this subject should accept, of describing in some detail the over-riding
importance of wage and price policy, the great significance of trade and
commercial policy, and the real relevance, too, of public and private
influences upon the competitive structure of business organization* The
President restated the Government's position on these crucial aspects of
our economic performance, both domestic and foreign, in addresses earlier
this month. He is now preparing a series of Messages, reviewing the start
that has been made, and the specific measures to be proposed or taken next
year, not only to cope with the problems now upon us^but also to provide a
sturdier base for our longer-run internal and external requirements. My
attempt today will consequently, and I think you will agree, appropriately,
center on some financial aspects of our central economic problem — the
aspects with which I have been more intimately involved.
I
My starting point, in that spirit, is then to assert several propositions:

D-344

617
- 2 The United States economy cannot, for as far ahead as anyone
can usefully plan, be insulated from the consequences, the
"discipline" if you will, of its balance of payments.
Moreover, the United States must continue, for as far ahead as
anyone can see, to provide the principal reserve currency for
the monetary system of the world ~ a duty which involves special
responsibilities as well as conveying special opportunities.
At the same time, the United States, as the prototype of democratic
capitalism, intends to pursue policies, both Governmentally and
throughout the private sector, which promote the functioning of
a market economy, in which flexible prices (reflecting the forces
of supply and demand) guide the composition of output, the allocation of capital, and the distribution of employment opportunities —
within a framework of reasonable price stability over-all.
And the United States is also determined to grow at a rate large
enough to assure steadily rising per capita real income and
maximum employment, while also supporting the military structure
and the economic aid commitments appropriate to the leading member
of the Western alliance.
My own thesis is that all of these commitments can be met; that they
need not, as some would have it, be mutually contradictory; but that with
determined effort they can become instead, in the current position of the
United States, mutually reinforcing. To be sure, balance of payments
disciplines can be interpreted to mean — and in some circumstances may
appropriately mean — severe restraint upon, or outright constriction of,
the pace of national economic activity. They often mean just that, for
example, when demand inflation is running strong, when price increases must
be halted if exports are to be sold, and when internal demand must be reduced if imports are to be brought in line with the real export, potential.
In those conditions, a temporary interruption of internal expansion may be
unavoidable if external equilibrium is to be restored.
There are also times when a balance of payments discipline calls for
scaling back, or limiting, the external commitments of Government. As the
President and others have explained, that is being done to the limit permitted by national security; and a number of ways are being found to offset
or avoid a balance of payments impact from military outlays and economic
aid.
But what most needs stressing, it seems to me, is that the disciplines
do not always call for the same prescription. Deficits are fever signals which

818
- 3may arise from temporary distress, or chronic disorder, or something in
between. It is always necessary, at the least, to distinguish between
shorter-run factors influencing the total balance of payments deficit, and
the underlying factors influencing what some of us call the "basic deficit" —
a deficit in the trade, services, and long-term capital items. Much of the
most purely financial part of the total deficit is in short-term capital
movements, not included in the more fundamental factors of the "basic"
balance of payments. I will have more to say on short-term capital movements shortly. I want to begin, though, by focusing on an entirely different
meaning of the balance of payments disciplines, a meaning which seems to me
to fit the present conditions of the United States, and leading into the
heart of our basic deficit problem.
In short, and without the qualifying phrases that should be inserted
if this were a scholarly formulation, the underlying balance of payments
problem that has been confronting the United States is mainly, for lack of
a better word, environmental. The implications for us of any balance of
payments disciplines point mainly toward needed adaptation to a changed
and changing environment. We have emerged during these past three or four
years into a new world of comparative freedom for the movement of goods, in
which most of the leading industrial countries have built up reasonably
adequate monetary reserves, and have made their own currencies freely convertible into dollars on current account, at fixed rates of exchange. But
the momentum generated, both here and abroad, during the long drive back
toward sustainable equilibrium for the others, has helped to bring about a
new kind of imbalance.
The United States has found itself marginally dependent upon a steady
absorption of dollars by a world whose marginal needs have shifted to other
things. Many of the other industrial countries, having long restrained
consumption for the sake of rebuilding and improving their productive
capacity, are continuing to invest at rates which are closing, and in some
cases reversing, the gap of comparative advantage that the United States
formerly enjoyed in most manufactured products. The United States meanwhile has allowed its own rate of domestic investment in productive capacity
to decline, despite its still considerable volume of savings. These are
the environmental changes which have been brought into clearer focus by the
magnitude and behavior of our balance of payments deficits since 1958.
Where, against this background, do the disciplines point now? So far
as the domestic policies of the other industrial countries are concerned,
a pull is already apparent toward greater consumption. On their side, the
demand needed to help restore international equilibrium by drawing in more
of our exports is already strong and likely to grow. It will be promoted
further if the Common Market prospers through lessening its own protectionism
(not only with respect to imports but also as to the export of capital).

r^i Q
mm Ll m

v- •*-

It will be further advanced if the expansion plans of the underdeveloped
parts of the world are supported by all of the developed world* On our
side the question is large. Can we, in world markets that should become
increasingly free, compete effectively in quality, price, and merchandising
skill? So far as the monetary arrangements which link together the domestic
monetary systems of the individual countries are concerned, the question
is whether the nations friendly to us can, as a group, and barring military
and political considerations, join in multilateralizing some of the responsibilities that have up to now been carried by the two reserve •currencies
alone — the dollar and the pound sterling. It should be important to all
countries to continue developing the innovations of the past two years in
international financial relations, in order to adapt modern monetary
arrangements so that they can suitably nourish trade, minimize disruptive
speculation, assist the orderly flow of productive capital, and still
provide for effective control over monetary developments within each
country in keeping with the economic objectives of each.
II
The most striking aspect, to me, of the needs for restructuring the
American economy that are revealed by our continuing balance of payments
deficit is that they are, in present circumstances, so nearly identical
with the needs that we would be trying to meet if we had a completely
closed economy. In terms of the fundamentals, as I see them in the current
context, there is no irreconcilable conflict between the restoration of a
sustainable equilibrium in our basic balance of payments and the promotion
of greater and more lasting growth in the domestic economy© The one sure
way to reestablish strength in the balance of payments is to increase
this country^ ability to compete, and this can best be done by spurring
additional investment - in efficient productive capacity. That is the same
objective which can best assure an upward shift in our growth trend.
The primary need, for both external balance and internal growth, is
an upward shift in the rate of investment — the investment that can raise
productivity, lower costs, develop new products, and more generally give
a new thrust to the competitive potential of American business. That is
the way to make possible an increase in the share of American goods in
foreign markets, particularly those of the other industrialized (and now
mainly "surplus") countries. It is also the most nearly certain way to
increase the rate of growth at home, and thereby support in real terms our
aims for expanding employment and raising incomes0
The intensified private investment will also, in time, have the same
(or a greater) multiplied effect upon total spending in the economy,

82u
- 5and thus upon further inducements toward additional investment, as might
have been claimed for Government deficits. The difference is that the
initial expenditure will have been upon productive capacity more directly
related to the joint needs of improving this country's competitive position abroad while promoting a higher growth rate at home.
There are, of course, many conditions required to bring about the
sort of change in the parameters of the investment function to which I am
referring here. No doubt new structural problems would be created if the
change came about abruptly. But however the change is brought about,
there are certain to be significant roles for fiscal policy, for monetary
policy, for debt management, and for the inter-relations among all three.
Some of these have begun to emerge during the past year and have been
translated into policy.
Perhaps the first and clearest implication relates to the use which
can be made of the great latent influence inherent in the sheer size and
diversity of the present Federal tax structure. If, within the complex
of tax burdens, a way can be found to encourage new productive investment
as such — and the proposed investment tax credit would indeed be one such
way — that should offer great promise as an effective primer, to help
generate the greater push out into new investment frontiers. Depreciation
reform of other kinds, such as the updating of equipment schedules, is, of
course, another important part of any Governmental share in this effort.
In addition to its potential as a priming influence, fiscal policy
can also help, as I have just mentioned, in making available the funds
needed to finance the needed investment. For the significance of deficits,
or balance, or surpluses in the Federal Government's accounts is that the
available supply of savings and credit will either be partly absorbed by
Government, left entirely for the use of an expanding private sector, or
augmented by the funds released through a repayment of Government debt.
Just which of these phases of fiscal policy is appropriate at a given time
depends on the stage of the business cycle. But when recovery is broadly
accomplished and the economy is expanding at a reasonable rate, it would
seem necessary that the Federal budget should be at least in balance if the
aim of public policy is to give primary emphasis to promoting creative,
constructive new investment. Any losses of revenue from the investment
credit, for example, would have to be made up from other sources. Otherwise,
a continuing Federal deficit would drain away from the capital markets a
part of the supply of available savings that could, and should in present
circumstances, be flowing into expanding investment in the private sector.
That is what the President was underlining when he said, in speaking before
the National Association of Manufacturers here in New York earlier this
month:

- 6"I recognize that your efforts will be governed in part by the
kind of atmosphere the Government can help to create. That is
why we intend to submit our balanced budget. The Government
must not be demanding more from the savings of the country, nor
draining more from the available supplies of credit, when the
national interest demands a priority for productive, creative
investment — not only to spur our growth at home but to make
sure that we can sell, and sell effectively, in markets abroad."
The maintenance of that kind of fiscal control carries with it implications for monetary policy as well, if it is to fill a coordinate role.
And one of the profound lessons of the 1959-60 recovery experience, underlined by the accompanying outward drains of gold and dollars, is that
monetary and fiscal policy must jointly share responsibility toward the
capital markets, if an over-all influence appropriate to the needs of
internal stability is to be achieved. During that episode — although
concern over a steel strike, wage-cost increases, creeping inflation, and
other factors were also of great importance — the fiscal position was one
of very large deficit. It was almost twice as large as that of the current
fiscal year and it carried over for some time into the recovery period.
The heavy Federal borrowings were competing in the capital markets with
expanding private borrowing that had reached record proportions. When the
Federal deficit position was corrected, the change came quite abruptly, swinging over to a moderate surplus within a few months. Meanwhile, the efforts
of monetary policy, aiming to offset the inflationary consequences of the
earlier deficit, actually carried over from that phase into the later
phase of fiscal restraint. Interest rates rose sharplyi complications
developed for debt management; and a chain reaction of troublesome consequences spread through the savings and investment process.
Attempting to learn from that experience, we have tried during the
past year — admittedly through a rather loose fit of successive approximations — to find a new balance between monetary and fiscal policy. By
adapting fiscal policy somewhat more closely to the timing and intensity
of the recession, it has been possible to reduce the burden that public
policy on other occasions has placed on monetary action. Accordingly,
this has been the first recovery since flexible monetary policy was restored
in which bank credit has continued readily available well into the expansion
period. In consequence, longer-term interest rates this time have shown
little tendency to rise, and the conventional expectation that credit must
tighten whenever business recovery gains momentum has been confounded. And
it may not be a mere coincidence that the volume of new market flotations,
municipal and corporate, has been strikingly greater than through the
comparable months of the three preceding recoveries.

S22
7 This experience suggests that a change in the balance of emphasis
between fiscal and monetary policy may work to lessen the amplitude of
cyclical swings in interest rates, downward and upward, that have been
associated with the contracyclical policies of Government in the past.
With inflationary expectations less prevalent and the financial markets
better attuned to relatively small changes in rates, it is possible that
the desired range of financial responses can be evoked, to help moderate
the cycle, without the unsettling effects on institutional savings arrangements that the sharp uprush of interest rates in 1959-60 had begun to produce.
But what about the shorter-run balance of payments effects? Granting
that the mix of fiscal and monetary policy can be improved, in order to
further the expansion of domestic investment, to help in moderating some
of the factors that aggravate cyclical fluctuations, and to limit the
disruptive aspects of unduly abrupt or large interest rate changes —. and
that all of this will be helpful eventually in restoring and maintaining
balance of payments equilibrium — what happens to capital movements in
the meantime? May not outward flows be intensified, thereby adding to the
balance of payments deficit, with the result that apparent deterioration
will precipitate further outflows?
That is, to be sure, an area of considerable risk, or potential danger.
Yet there is much here that can be done, too. We reject out of hand any
resort to exchange controls. To take a step of that kind would be to confess, and assure, the failure of our aims for growth, trade, and a stable
currency system based on the certainty of dollar convertibility at the
present fixed price.
So far as movements of long-term capital are concerned, there are
important differences, as all of you are well aware, between portfolio and
direct investment. The net outflow of portfolio investment has never been
decisively large, in relation to our balance, partly because American purchases of foreign securities have not greatly exceeded foreign purchases of
securities here. The possibility of substantial net movements by American
investors into foreign fixed-interest obligations or equities will continue
important, however, as long as surplus countries maintain controls on the outwarc
flow o^ funds from their own capital markets. When the surplus countries in
Europe become more flexibly adapted to their role as creditors, the flow of
portfolio funds toward an expanding, vigorous American economy should over-ride
anv minor or temporary differentials in long term rates of interest, and largely
counterbalance the outflow of American funds for investments of a similar nature,
Meanwhile, should a substantial net outflow develop from the United States,
there are offsets available. Other Governments can be encouraged to pre-pay
lone-term debts owed to us. Where appropriate, we can place some of our own
Government debt with them. Significant moves of both kinds have occurred
during the past year.

- 8-

S23

As for direct investment, provision of a tax credit for investment
in the United States would help to offset any inducement to invest abroad
the funds obtained by borrowing relatively cheaply in the United States.
There is much to be said, too, for removing any special tax advantages
which induce investment abroad rather than at home and which defer the
repatriation of income earned by subsidiaries located in the developed
countries. In addition, the so-called "tax haven" abuses also permit other
artificial, truly noncompetitive inducements to direct investment abroad.
To eliminate these abuses and the special tax advantages, so far as practicable, would still leave in effect the present tax stimulus to direct
investment in the underdeveloped countries. That, one would think, should
be encouraged, for its effect can be, and should be, to introduce these
countries (more effectively than Governmental economic aid is able to do)
to the performance of productive capitalism.
While changes along these lines may be slow in coming, or in exerting
their effects, there is relatively little likelihood of any short-run
acceleration of direct investment on a scale large enough to have a material
additional influence on our balance of payments deficit. Of course, if
wages here were to advance sharply, and outrun productivity gains, or if
the efforts to accomplish depreciation reform should be frustrated, or if
the projected trade program should fail and a real wall of duties were to
rise up around Europe; or if the combination of measures geared to eliminating our present deficit over the next two years should not be pursued with
effective determination —
the climate could change completely. I do not
want to imply any basis for complacency on other fronts. But the part of
the problem I am particularly addressing today is the critical area of shortterm capital movements.
There are broadly three categories of influences that could give rise
to outflows of short-term capital of serious magnitude: (1) a foreign loss
of confidence in our capacity to fulfill our economic objectives and to
maintain the free convertibility of the dollar into gold at our fixed price;
(2) marked interest rate differentials, giving rise to increased foreign
commercial borrowing here, and to interest "arbitrage" and "hot money"
flows; and (3) unsettling international events, causing a flight from the
dollar, or from several major currencies simultaneously.
As for the first, that is in our hands. The trend of foreign confidence has been upward since early in the year. If we perform on the commitments which have given us this initial "vote of confidence," there should
be no problem on this score. As for the second, a rise in commercial
borrowing has indeed been a factor of considerable importance through most
of the past year, and exporter credits (at least to American firms) are
•likely to go on rising. But these are the kinds of swings in external

- 9-

624

financial requirements for which the use of our monetary reserves is intended; once they level off, or decline, the outflow will return with the
repayments. These, then, once recognized, need give no cause for deep
concern. As for the flow of funds into short-term instruments in other
markets, several possibilities for reconciling our internal operations
with our external requirements have emerged during the past year. It is
to these, and to the third — the effects of international political incidents, or waves of doubt concerning the values of other currencies — that
I want to devote the remainder of my time here today.
Ill
What about the balance of payments deficit we have now — a deficit
that has, while much reduced from the three preceding years, been steadily
rising again (after deducting the helpful but nonsustaining effect of
debt prepayments) with each successive quarterly report through 1961?
Does this not merely exemplify the fact that, however successful our longrun approach, we will always be living in a succession of short-runs, in
which there will be a conflict between what is right at home and what is
needed for our external position? That our exposed position as banker for
the world leaves us continually vulnerable?
To the extent that we succeed in reaching and maintaining the "basic"
balance to which I referred earlier, there is no question that we will be
able to deal from strength in meeting these strains. I cannot emphasize
too strongly, though, that there is much yet to be done — and much that,
I trust, will be done — to reach that result. We need more competitive
exports, more use of the new export financing facilities, greater access
to foreign markets, closer relating of economic aid to our own production,
greater offsetting purchases here by the countries in which our military
disbursements are large, and a vast variety of other measures already under
way, inside and outside Government, in order to cope with these current
pressures. In current terms, though with clear signs of improvement
showing through, the figures for the total balance of payments deficit
should be expected to become somewhat larger before the underlying surge
of improvement makes them solidly better.
But others have outlined, and will again, that range of needs and
prospects more fully than I can attempt here. I want to turn now to
several financial measures (some domestic, others international) which,
while relevant to the present problems, are even more important for their
possible role in averting or offsetting monetary strains through the
succession of short-runs that will, of course, be our lot in the years
ahead.

- 10 -

O O r~

o^5

One of the most conspicuous of the Governmental efforts to reconcile
the shorter-run needs of external improvement with the basic need to promote domestic recovery and expansion, during the year just completed, lay
in the area of monetary and fiscal policy which we were discussing a moment
ago. Perhaps more precisely, this effort lay in the zone of inter-relations
between monetary policy and debt management. It was rather widely characterized as "Operation Nudge" or an attempt to "raise short rates and lower
long rates." That was at best a cryptic, shorthand label for a very complex process. There was never any thought that interest rates, either
short or long, could or should be predetermined, or established in any
other way than through the action of market forces. But there was a forthright recognition that what the fiscal and monetary authorities do, and
expectations in the market concerning their needs and intentions, must
necessarily be significant elements inside the market process. Consequently,
to the extent feasible, indications were given as to the direction in which
the influence of official actions would be working — though where they
might come out, after interaction with all other factors of supply and demand,
would still be a market-determined result.
Once the approximate shape of the Treasury's borrowing requirements
became clear, every opportunity was taken for ensuring the consistency of
the independent actions of monetary policy and of debt management. A balance
of payments criterion was kept continually in view. For the "short rate long rate" slogan, if it served any purpose at all, did indeed seem to help
popularize recognition of the need (toward which Federal Reserve policy had
already been directed through much of I960) to avert the previous pattern
of recession-induced plummeting of short-term market rates — while also
keeping credit at least as amply available for domestic needs as in tijrnes
past. The aim was to use Governmental influence, where practicable, to
keep money market rates within an indifference range, in relation to the rates
obtainable abroad, after taking account of the costs of forward cover.
An important role was also played in this effort by the readiness of
foreign monetary authorities to take into account, in determining their own
policies, the desirability of closing any gap between their interest rates
and ours. At times it proved feasible, as well as desirable in their own
domestic circumstances, for them to exert downward pressure on their own
short-term rates. There was general recognition, too, that sensitive "hot
money" is not a comfortable holding in the monetary reserves of any country.
Partly for that reason, it also proved practicable at times for the United
States and foreign authorities to cany out coordinated operations in the
spot or forward exchange markets for the purpose of restraining speculative
flows. Such operations, although often only of a pilot character, were
gratifyingly effective. The opportunities for working out these cooperative

QDQ.
U C <w

- 11 -

arrangements arose through the regular consultative facilities provided
by the monthly meetings of the Bank for International Settlements and tfce
frequent meetings held within the newly-established Organization for
Economic Cooperation and Development.
The end result of these various efforts, so far as our own domestic
money market was concerned, was the unprecedented continuation of a ready
availability of money throughout the recession and recovery period, with
ample additions flowing into bank reserves, while the 91-day Treasury bill
rate (to take an example) edged gradually upward on a zig-zag path between
2-1/4 and 2-3/4 per cent. The declines of short-money rates to and below
1 per cent — which had occurred in the previous recessions, and had contributed in 1958 to the early stimulation of speculative attention to the
possibilities of interest arbitrage — were this time completely avoided.
Debt operations were of some aid, as well, in this attempt to deter
outflows while stimulating new flows within the economy. Over the course
of 1961, the Treasury's debt operations resulted in a net increase of
about $4 billion in outstanding Treasury bills and about $10 billion in
total debt maturing under one year — rises which ranged during the year
between 10 and 15 per cent of the outstanding amounts in these shorterterm areas. At the same time, other outstanding debt was so redistributed
that the average maturity of the total marketable debt was almost identical
at the end of 1961 with that at the beginning of the year. The other side,
from the debt management point of view, was the desirability of accomplishing the appropriate debt lengthening — both to offset the increase in
under-one-year issues and to overcome the inexorable influence of the
calendar in shortening the life of the over-one-year debt by one full year
every year — without complicating the effort to help assure an ample
availability of funds for all forms and all maturities of private investment
requirements. The answer, at least for the conditions then prevailing, was
found largely through reliance upon the technique of advance refunding which
had been successfully introduced in i960, both in the middle market (in the
so-called "junior" form) and in the longer market (the "senior" advance
refunding).
There will be continuing need for experimental development of the
mixture between fiscal, monetary, and debt management policies and methods,
to find ways in the future to limit any interest rate stimulus to outward
capital flows. The recent Federal Reserve action permitting commercial
banks to pay higher interest rates to their depositors is another step of
the same exploratory nature. It should also be of help in holding or
attracting foreign time deposits.

<&<
«• 12 •*

Even though I feel confident that effective solutions, appropriate to
the changes in market conditions and in economic activity, will be found in.
the months and years ahead, I do want to stress, most resoundingly, that
neither steps such as these, nor other forms of international cooperation to
which I shall refer shortly, can ever offset the force of a serious run on
the dollar created by a loss of foreign confidence in our economic strength
or our banking capabilities. Nor can such measures shore up indefinitely
the consequences of a continuing deficit in the "basic " elements of our
balance of payments.
So long as our performance at home is impressive, however, in the way
that we ourselves would want it to be, then an outer defense of various
financial arrangements should be capable of providing, from short run to
short run, the necessary protective framework within which we can continue
to perform the role of the principal reserve currency — so important to the
world at large, and so crucial to the fulfillment of our own objectives of
libertarian economic expansion©
One essential part of these outer perimeter defenses consists of
understandings among the central banks, primarily at the start among the
leading industrial countries, but also gradually no doubt among various
congeries of some of them and some of the less developed countrieso The
essence of any such arrangements is flexibility, informality, a spirit of
mutual cooperation, and the establishment of trust in financial leadership.
There are no formulas. Progress comes with patience, time, familiarity,
and experience. The pastforoyears, and particularly the last, have
produced more tangible gains of this kind than had been possible at any
time since the general convertibility of currencies disappeared in the 1930' s,
Perhaps the most notable case was the initial cushioning provided early
in the year by a number of the central banks whose Governors meet each month
at the Bank for International Settlements in Basle© When funds began to
move out of the United Kingdom after the currency appreciations of Germany
and the Netherlands in March, the various central banks receiving the outflow
arranged, quite informally, to lend back to the British the bulk of the funds
which they were losing, thereby avoiding the possible threat of a currency
crisis.
What happened thereafter illustrated the need for another part of the
network of defenses. For the central banks could not finance these cushioning
operations indefinitely out of their own resources. More lasting multilateral
arrangements were needed, standing behind the central banks, and capable
among other things of taking over most of these credits after the initial
episode had subsided. Such a shifting of credits would make it possible to
provide for the further orderly resolution of any remaining, and possibly
deeper, strains. In the case in question, the United Kingdom in August
arranged with the International Monetary Fund for a $2 billion credit (of
which $Lj billion was drawn immediately, in nine currencies, with the United

S2S
•* 13 *•
States share just under one-third). The United Kingdom Government was thus
able to strengthen its own reserves and the Bank of England enabled to pay
off the cushioning credits. When a new potential currency crisis was in
the making, on the outbreak of the Berlin disturbances later in August,
further repercussions on the pound sterling were scarcely noticeable.
Actually, British reserves began to mount rapidly and by the year-end
more than one-quarter of the drawing had already been repaid to the International Monetary Fund.
Meanwhile, the various currency shifts over the past year — many
of them taking the form of dollars, the preferred reserve currency — had
begun to build up in the banks of some countries larger holdings of dollars
than they could ordinarily carry. In these circumstances, various means
were found to help regularize the holdings through actions taken in the
foreign exchange markets. One type of operation consisted of increasing
the facilities for forward cover. In some cases, the other Government or
central bank undertook a major part of the transactions for its own account;
in others, the foreign central banks acted as agents for the United States
Treasury. (All operations were carried out, of course, in behalf of the
Treasury by its fiscal agent, the Federal Reserve Bank of New York.) Needed
supplies of foreign currencies were obtained as a by-product of intergovernmental debt prepayments, through outright purchases in some special
circumstances, and through sale to certain foreign central banks or governments of United States Government debt denominated in foreign currencies.
Moreover, arrangements were made to place the entire proceeds of the United
Kingdom drawing of dollars from the International Monetary Fund, as well
as some other accruals, in special nonmarketable dollar obligations.
Through these, and other transactions in the spot and forward currency
markets, a number of ways were developed for enlarging the network of
financial defenses capable of providing short run assistance not only to
the dollar, but to the functioning of the world's monetary system.
Few of these innovations could have been carried through, however,
were it not for the almost continuous consultation on problems of mutual
concern that the jet age has made possible. Through frequent visits to
New York and Washington by the leading financial officials of most other
countries, large and small; through the continuing exchanges of views
and Information made possible through the work of the International
Monetary Fund and other international financial organizations; through
the monthly journeys now regularly made by our central bankers to
the meetings of the Bank for International Settlements; and through
the equally frequent travel by Government delegations to those
meetings within the new Organization for Economic Cooperation and

- m-

829

Development that are devoted mainly to potential problems and disturbances
in the balance of payments of the leading industrial countries among its
membership — a new kind of international financial cooperation has emerged.
This, to me, is much more promising for the future than any of the grandiose
proposals for a new super-sovereignty in international monetary management —
proposals that have attracted so much attention in the public prints,
paradoxically, at the same time that these solid, if unspectacular, developments in real cooperation among sovereign governments were quietly taking
place.
The experience of the past year, both in observing the behavior of
the financial markets and in the negotiation of many new kinds of arrangements with the financial officials*of many countries, has convinced me that
the road of steady progress is that toward a growing multilateralization
of the responsibility for the conduct of the world's monetary system. However important the dollar may be, the time is passing when other leading
countries can, consciously or unconsciously, treat their dependence upon
it as all privilege and no responsibility. The recognition of that underlying pattern of development probably accounts, more than anything else,
for the ready interest shown by these same leading industrial countries
over this past year in working out the arrangements for a massive increase
in the resources available to the IMF, on a standby basis. Preliminary
announcement of these arrangements was made after a meeting of finance
ministers and other leading financial officials in Paris two weeks ago.
Additional details will be made public shortly.
It was the apparent conclusion of the ministers that the presently
visible need is not for more international liquidity, but for smoother
arrangements to assure the ready shiftability of existing liquidity among
the monetary reserves of the various countries of the free world. This,
they recognize and accept, involves a greater use of other currencies, alongside the dollar, in coping with any potential strains affecting the performance of the monetary system as a whole.
* - * * * * *

In working toward the fundamental correction of the United States'
own balance of payments, and in building a stronger financial buttress for
the world monetary system which centers on the dollar, this has been'an
eventful year,, Great issues have been advanced. To pare down the basic
deficit in our balance of payments, a host of measures, some lasting, some

B3U
-15 temporary, have been introduced. Substantial improvement, year to year,
has already been accomplished, while the economy was enjoying a rapid and
broadly-based recovery with general price stability.
To proceed further, at a vigorous rate of economic expansion, while
cutting away entirely the basic deficit in the balance of payments, depends,
among other things, on a change in the pattern of investment behavior. In
this, Government's role is to provide the stimulus, through depreciation
reform, and to do all it can to create an environment within which the
needed financing requirements will be met. That is why, in today's conditions, a balanced Federal budget is necessary. From there on, in keeping
with the nature of our kind of economic system, the rest is up to labor,
to management, and the spirit of creative enterprise.
In serving as the world's banker, the most important progress, too,
will flow from the achievement of equilibrium in the basic balance of
payments accounts. Much has been done, even more can be done, toward
broadening and strengthening the entire monetary system which centers on
the dollar.
My own judgment is that avenues have now been opened for a productive
marriage between our internal and external financial policies. There is
not, or need not be, an irreconcilable conflict between them.

83i
December 27, 1961
FOR IMMEDIATE RELEASE
PADS, A. VOLCEBR NAMED HEAD OF FINANCIAL ANALYSIS OFFICE
Acting Secretary of the Treasury, Henry H. Fowler, today
announced the appointment of Paul A. Volcker as Director of the
Office of Financial Analysis. Mr. Volcker will assume his
duties January 8, 1962.
Mr. Volcker Is now associated with the Chase Manhattan
Bank of New York, where he directs research on domestic financial markets, and banking, sad financial institutions. The new
of flee he will head will give the Treasury valuable additional
analytical capabilities to bring to bear oa both aatioaal aad
international financial problems.
Prior to his work with Chase Manhattan, where he has bees
employed since October 1957, Mr. Volcker held a number of
positions with the Federal Reserve Bank of New York, joining
its domestic Research Division on a permanent basis ia 195*5Jjj& 195*7hm became a special assistant ia the Securities Depart*;
jf menV«B^froa 1955 to 1957 his principal responsibilities
—
I included analyses of the Government securities market, execution
f of Opes Market Committee transactions, and the preparation ef
various reports to the Committee and ef memoranda en Treasury
Mr. Volcker was bora ia 1927 in Cape May, Mew Jersey. Be
financi]
was graduated from Princeton in 1949, studied at Harvard
University, obtaining his masters degree ia Political Economy
and Government in June, 1951. While at graduate school, ia
addition to working with the Federal Reserve Bank ef Mew York,
he was employed by the Treasury Department as a Junior Management Assistant* He obtained leave of absence to study at the
London School of Economies. Daring his service with the Federal
Reserve Bank in Hew York, Mr. Volcker taught Money and Banking at
the Hew York Institute of Finaneesiand classes at the new school
for Social Research.;
*~
He participated in staff work on the Commission on Money and
Credit while that group was in operation, beiag primarily eont cerned with Questions of Federal Reserve pelic^, debt management,
and the organization of financial institution*.

tr~

D-34^

December 28, 1961
FOR IMMEDIATE RELEASE
PAUL A. VOLCKER NAMED HEAD OF FINANCIAL ANALYSIS OFFICE
Acting Secretary of the Treasury, Henry H. Fowler, today
announced the appointment of Paul A. Volcker as Director of the
Office of Financial Analysis. Mr. Volcker will assume his
duties January 8, 1962.
Mr. Volcker is now associated with the Chase Manhattan Bank
of New York, where he directs research on domestic financial
markets, and banking, and financial institutions. The new office
he will head will give the Treasury valuable additional analytical capabilities to bring to bear on both national and international financial problems.
Prior to his work with Chase Manhattan, where he has been
employed since October, 1957, Mr. Volcker held a number of
positions with the Federal Reserve Bank of New York, joining its
Domestic Research"Division on a permanent basis in 1952. From
1955 to 1957 his principal responsibilities included analyses
of the Government securities market, execution of Open Market
Committee transactions, and the preparation of various reports
to the Committee and of memoranda on Treasury financing; in
1957 he became a special assistant in the Securities Department.
Mr. Volcker was born in 1927 in Cape May, New Jersey. He
was graduated from Princeton in 19^9, studied at Harvard University, obtaining his masters degree in Political Economy and
Government in June, 1951. While at graduate school, in addition
to working with the Federal Reserve Bank of New York, he was
employed by the Treasury Department as a Junior Management
Assistant. He obtained leave of absence to study at the London
School of Economics. During his service with the Federal
Reserve Bank,.in New York, Mr. Volcker taught Money and Banking
at the New York Institute of Finances.
0O0

D-3^5

TREASURY DEPARTMENT
WASHINGTON, D.C.
December 28, 1961
FOR MEDIATE RELEASE
UNITED STATES AND ARGENTINA SIGN ONE-YEAR EXTENSION
OF $50,000,000 EXCHANGE AGREEMENT

Henry i. Fowler, Acting ietrwtery ef the TreiiMfyt

• » « » !

del Cfcrrft* M m M f l t o r •# Afffawtlnsj *##*? signs* * wnw^mar extension of

., ,..": -

^ *, " u

ttfci I f f , ! * , * * Exchar^ $®mmm
kmmm
the tofts* states Tr*a#ery a** ;
the sevefssent eni Centre! imfe of Argentine, which had been In feres tiffing

mi*
fhe &$r®mmt

is eeufgftesf to a**fat Argentina in its continuing efforts

t* promote e*5©wesi*s stability and fretries is Iti t*eie mi exchange system,
Uchamje mm*atlom

m the pert of the Afgefttffts authorities *f II ha for the

p$ti|Mi§* ef mainiatfitiig an orderly foreign exchange system.
the Treasury Exchange Agr assent, Argentine say request the United
>taM ligation Furrd to purchase Argent In© sets*. Asy esses
ilrei by tlm United States Treasury would subsequently be refwrehasesi by
Argentine with sellers*
mth Om twtpmm ef ettistfftg the Argentine Government §» continuing ft§
Sieslfiiatiew efforts,feyproviding etsmaefet that may be usee* for the
of en orderly exchange mrlmik* the Internet tens! Jfeaetery r«eml en
i, lfff* wmmmmi
ef $100 mil Hon.

m *Aa*esy arre^pment with Argentine In

TREASURY DEPARTMENT
WASHINGTON, D.C.
December 28, 1961

FOR IMMEDIATE RELEASE
UNITED STATES AND ARGENTINA SIGN ONE-YEAR EXTENSION
OF $50,000,000 EXCHANGE AGREEMENT
Henry H. Fowler, Acting Secretary of the Treasury, and
Emilio Donato del Carril, Ambassador of Argentina, today
signed a oneryear extension of the $50,000,000 Exchange
Agreement between the United States Treasury and the Government and Central Bank of Argentina, which had been in force
during 1961.
The agreement is designed to assist Argentina in its
continuing efforts to promote economic stability and freedom in its trade and exchange system. Exchange operations
on the part of the Argentine authorities will be for the
purpose of maintaining an orderly foreign exchange system.
Under the Treasury Exchange Agreement, Argentina may
request the United States Exchange Stabilization Fund to
purchase Argentine pesos. Any pesos acquired by the United
States Treasury would subsequently be repurchased by
Argentina with dollars.
With the purpose of assisting the Argentine Government
in continuing its stabilization efforts, by providing
currencies that may be used for the maintenance of an
orderly exchange market, the International Monetary Fund
on December 8, 1961, announced a standby arrangement with
Argentina in the amount of $100 million.

0O0

D-3^6

S35

ram

SSXEASE I.H.

WB&nvm,

mmmm m timswmm *mu

m®mimr m» 1961
WILL

wtmm

Ths trmmary itep&r%$mn% aano^maad lust a*aaiag. that tha tenders far two series of
Trasaury M i l s , oaa series to be- m additional imm of tie bills dated Oatafcar 5, M l ,
and the other series to be dated Jami*r:y h, 1962, ablea mire ofibrcid on ^se^ber 21,
i#ar® o^aned at tha Federal ftaaarra Bank* oa Baoamhor 29. fondant vara Imttm for
11,100,000,000, or tharoabofcta, of 91*4*y bills end tor #00,000,000, or thereabouts, of
18t**day bills* taa datails of taa two series »m m follows*
182-day treasury hills
91-»dny trasawy M i l s
AsJttS OF ICCSratt
QQNHEtXtXVl BXBSs
itEring gay 5, im
Approx.lata
Kgslir*
Aaansl
nigh

Low
Average

w&hr
99*31$
99.317

42

^#

$*7£2$
2.7031.]/

9§*i*99
98*513

4t.9atfj/
^>

f/ Saaaatlng 3 tondsrs totaling 860O900O| b/ Excepting % tsndar of #550,000
9 aaroant of taa aatraat ef 91~<iay bills bid for at ihs lav prtoa vat aoaootad
8 para&iit of ifa® aaoia&t of X82~«Jay nilla hid for at tat low ariaa vas -aaasptsd

tOftlL tUIKtt kmum
Mav lork
Philadelphia
Olavslaad

fQt lav lOCSmD if P&mftlL ISESfifl DtfttnZCISi

MB

1,896,790,000
562,620,00©
87l*,673,000
ii87»673,000
22,110,000
7,110,000
18,355,000
7,l55fO00
59,256,000
1*9,256,000
16,91*1,000
6,9tll#000
ll,05a,000
11,05«,QOO
2,311,000
2,111,000
Atlanta
20*237,000
18,537,000
3,153,000
tf9*9»0Q0
OMeago
1*02,180,000
326,970,000
92,1*56,000
J*7*ii5&,0O0
St* jLotaij
2t,a#,ooo
a,25»,ooo
7,208,000
6,208,000
Mtamaapolis
19,072,000
111,872,000
4,082,000
3,622,000
City
32,071,000
8fc,86l,O0O
U,iil*3,000
a,a*3,oo8
San fraaoiso®
10,678,000
10,678,000
2,8*13,000
22*113.000
10UX*
62,059*000
,01*9,958,000
|6oo,ii,oi.i
81,988,«O«,000
$1,100,589,000 $/
H
Xaalndaa 8170^561,000 noncompetitive tandara accepted si the average prioa of 99.317
Includes $36,831/>00 aoaaQaaatitlva tandara accepted at tha average pries of 96.513
On a coupon iaana of tat ®m® laagta m& for tha sane amount invested, the rttiira ®&
tha## bills would proviso yUldt of 2*761, for tha 91~day hills, and 3.031, for ths
lSt-aay M i l s . Interest r«t®# on bills are avatad in ton** of hank Um&m%
vita
taa ratura ml&Ud
to ths Urn momt
of tha bills psyshla at Maturity rathar ths*
tha amount iinraatad a M tbair length %n aetaml utaihar of days ralatad to a 3®0*iijr
jaar. In o^ntrmst, yialdt on oartifioatos, not®a, aad bonds ara acaputad i© tonus
of lntaraat on tha aaovnt iavaatad, and ralata tha naahar of da»s raaaiaing %M m
iataraat aayvstat 'parlod to the attaal nmtmr &t days in tha aarlad, vith aoatianiwisl
eoMpowidiag if asora than out aoia^pon parlod ia inmtoN

TREASURY DEPARTMENT
WASHINGTON, D.C.
FOR RELEASE A.M. NEWSPAPERS, . December 29, 196l
Saturday, December 30, 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 October 5. 1961,
and the other series to be dated January 1*, 1962, which were offered on December 21,
were opened at the Federal Reserve Banks on December 29. Tenders were invited for
$1,100,000,000, or thereabouts, of 91-day bills and for $600,000,000, or thereabouts, of
182-day bills. The details of the two series are as followsj
RANGE OF ACCEPTED 91-day Treasury bills 8 182-day Treasury bills
COMPETITIVE BIDSs
maturing April 5, 1962
.
maturing July 5* 1962
Approx. Equiv. :
Approx. Equiv.
Price
Annual Rate
s
Price
Annual Rate
High
"~993i5~a7~
2*670$
8
98.528 b/
2.912$
Low
99*312 "
2.722$
s
98.1*99 ~
2.969$
Average
99.317
2.703$ 3/
*
98.513
2.91*1*3/
a/ Excepting 3 tenders totaling $600,000$ b/ Excepting 1 tender of 8550,000
79. percent of the amount of 91-day bills bid for at the low price was accepted
• 8 percent of the amount of 182-day bills bid for at the low price was accepted
TOTAL TENDERS APPLIED FOR AND ACCEPTED BY FEDERAL. RESERVE DISTRICTS:
District
Boston
New York
Philadelphia
Cleveland
Richmond
Atlanta
Chicago
St. Louis
Minneapolis
Kansas City
Dallas
San Francisco
TOTALS

Applied For
$^ 23781*1,000
1,296,790,000
22,110,000
59,256,000

n,o5l*,ooo

20,237,000
1*02,180,000
28,256,000
19,87-2,000
32,071,000
10,678,000
62,059,000
tL,988,l*0l*,000

Accepted
2 Applied For
|
11,81*1,000
$
6,780,000
562,620,000 «
87U,673,000
«
7,110,000 •
12,155,000
1*9,256,000 s
16,91*1,000
11,051*,000 *
2,111,000
18,537,000 s
3,153,000
326,970,000
92,1*56,000
21,256,000
7,208,000
ll*,872,000
1*,082,000
21*, 861,000 :
l*,l*i*3,000
10,678,000
2,81*3,000
l*l,53l*,000 3
23,113,000
$1,100,589,000 2/ $1,01*9,958,000

Accepted
4 6,780,000
1*87,673,000
7,155,000
6,91*1,000
2,111,000
2,969,000
1*7,1*56,000
6,208,000
3,622,000
1*,1*1*3,000
2,81*3,000
22,113,000
|600,31i*,000 d,

c/ Includes $170,561,000 noncompetitive tenders accepted at the average price of 99.317
3/ Includes $36,831,000 noncompetitive tenders accepted at the average price of 98.513
3/ On a coupon issue of the same length and for the same amount invested, the return on
these bills would provide yields of 2.?6$, for the 91-day bills, and 3*03$, 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.
D-3l*7

TREASURY DEPARTMENT
WASHINGTON, D.C.
December 29, 1961
FOR IMMEDIATE RELEASE

COMPTROLLER OF THE CURRENCY INVESTIGATING CHARGES OF ALLEGED
PRICE FIXING OF SERVICE CHARGES BY W O NATIONAL BANKS

Comptroller of the Currency James J. Saxon announced
today that he was investigating charges of alleged price fixing
of service charges on the part of two national banks in Clinton,
New Jersey, The Clinton National Bank, and The First National Bank
of Clinton. Mr. Saxon stated that this is a serious charge which
warrants careful investigation by his office.
As the supervisory authority over national banks, the
Comptroller of the Currency has responsibility for all of the
banking activities of those institutions. Mir. Saxon stated that
he intended to carry out his responsibilities, that his examiners
are being instructed to review the methods by which service and
other charges are fixed by national banks, and that any price fixing
by national banks of any charges will be appropriately dealt with
by his office.

0O0

6
TREASURY DEPARTMENT
WASHINGTON. D.C.
December 29, 1961
FOR IMMEDIATE RELEASE

COMPTROLLER OF THE CURRENCY INVESTIGATING CHARGES OF ALLEGED
PRICE FIXING OF SERVICE CHARGES BY W O NATIONAL BANKS

Comptroller of the Currency James J. Saxon announced
today that he was investigating charges of alleged price fixing
of service charges on the part of two national banks in Clinton,
New Jersey, The Clinton National Bank, and The First National Bank
of Clinton. Mr. Saxon stated that this is a serious charge which
warrants careful investigation by his office.
As the supervisory authority over national banks, the
Comptroller of the Currency has responsibility for all of the
banking activities of those institutions. Mr. Saxon stated that
he intended to carry out his responsibilities, that his examiners
are being instructed to review the methods by which service and
other charges are fixed by national banks, and that any price fixing
by national banks of any charges will be appropriately dealt with
by his office.

oOo

Treas.
HJ
10
.A13P4
v.128

U.S. Treasury Dept.
Press Releases
_____
___— — —

Treas•
10 „

s

'TITLE

v.128

Treasury3P^