The full text on this page is automatically extracted from the file linked above and may contain errors and inconsistencies.
U.S.
i«
Irejt&Hr-iA
p€./arf.
&6/
^ff
tfeetcwy
661484
GO
CC
r—-1
United States Savings Bonds Issued and Redeemed Through June 30, I9b2
(Dollar amounts in millions - rounded and will not necessarily add to totals)
Amount
Issued 2/
MATURED'
Series A-1935 - D-1941 .•
Series F & G-1941 - 1949
UNMATURED
Series E: 2/
1941
1942
1943
1944
1945
'
1946
1947
1948
1949
1950
1951
1952
1953
1954
1955
1956
1957
1958
1959
1960
1961
1962
Unclassified ...
Total Series E
Series H-1952 - 1962 3/
.
Total Series E and H
Series F and G:
1950
1951
1952
Unclassified
Total Series F and G
Series J and K-1952 - 1957 .,
Total Series F, G, J and K
{Total matured ..
Total unmatured.
Grand Total ....
Amount
Redeemed l/
Amount
Outstanding 2/
% Outstandi
of Amt.IssiK
.32%
.75
$ 5,003
26,082
7$ 4,988
25,886
16
196
1,815
8,012
12,895
15,015
11,755
5,271
4,957
5,105
5,015
4,366
3,781
3,951
4,459
4,511
4,679
4,497
4,216
4,065
3,796
3,767
3,773
1,221
, ?24
121,245
1,506
6,643
10,737
12,401
9,487
4,022
3,593
3,582
3,424
2,882
2,458
2,432
2,630
2,596
2,646
2,541
2,267
2,022
1,797
1,579
1,189
139
411
82,985
309
1,369
2,159
2,614
2,268
1,249
1,364
1,523
1,592
1,484
1,323
1,519
1,828
1,915
2,033
1,956
1,948
2,043
1,998
2,187
2,585
1,081
-87
38,260
31.56
8,353
1,658
6,695
80.15
129,598
84,643
44,955
34.'69
2,428
792
211
2,012
418
104
45
rtj 416
374
108
-45
17.13
47.22
51.18
3,432
2,579
3,681
1,883
1,799
48.87
7,113
4,461
2,652
37.28
31,085
136,711
167,796
30,874
89,104
119,978
211
47,607
47,818
.68
34.82
28.50
853
17.02
17.09
16,74
17.41
19.29
23.70
27.52
29.83
31.74
33.99
34.99
38145
41.00
42.45
43.45
43.50
46.20
50.26
52.63
58.06
68.51
88.53
24.85
1/ Includes accrued discount.
„TO
0FFICE
2/ Current redemption value.
<* FISCAL ASSISTANT SECRETARY
2/ At option of owner bonds may be held and will earn interest for additional periods
after original maturity dates.
tJ Includes matured bonds which have not been presented for redemption.
United States Savings Bonds Issued and Redeemed Through June 30, 1962
(Dollar amounts in millions - rounded and will not necessarily add to totals)
% Outstanding
Amount
Amount
Amount
Issued i/ Redeemed i/ Outstanding 2 / of Amt.Issued
1ATURED'
Series A-1935 - D-1941 .,
Series F & G-1941 - 1949
$ 5,003
26,082
4,988
25,886
16
196
JNMATURED ,
Series E: **
1941 .....•••.....
1942
1943
1944
1945
..,
1946
1947
1948
1949
1950
......
1951
1952
1953
;
1954
1955
1956 .........:..,
1957
195$
1959
1960
1961
„
1962
Unclassified •••..»•••• • • • • » • <
Total Series E ........
1,815
8,012
12,895
15,015
11,755
5,271
4,957
5,105
5,015
4,366
3,781
3,951
4,459
4,511
4,679
4,497
4,216
4,065
3,796
3,767
3,773
1,221
?24
121,245
1,506
6,643
10,737
12,401
9,487
4,022
3,593
3,582
3,424
2,882
2,458
2,432
2,630
.2,596
2,646
2,541
2,267
2,022
1,797
1,579
1,189
139
411
82,985
309
1,369
2,159
2,614
2,268
1,249
1,364
1,523
1,592
1,484
1,323
1,519
1,828
1,915
2,033
1,956
1,948
2,043
1,998
2,187
2,585
1,081
-87
38,260
31.56
8,353
1,658
6,695
80.15
129,598
84,643
44,955
34.'69
2,428
792
211
2,012
418
104
45
.£/ 416
374
108
-45
17.13
47.22
51.18
3,432
2,579
853
24.85
3,681
1,883
1,799
48.87
7,113
4,461
2,652
37.28
Total matured
31,085
["~T<
ill Series P Total unmatured .... 136,711
| Grand Total
167,796
30,874
89,104
119,978
211
47,607
47,818
.68
34.82
28.50
Series H-1952 - 1962 _2/
Total Series E and H
Series F and G:
1950
1951 '
l^yyCt . . . . . . a » . a » 6 . . . . . o . . .
Unclassified
..••••
Total Series F and G
Series J and K-1952 - 1957 .....
Total Series F, G, J and K ...
.32%
.75
17.02
17.09
16,74
17.41
19.29
23.70
27.52
29.83
31.74
33.99
34.99
38145
41.00
42.45
43.45
43.50
46.20
50.26
52.63
58.06
68.51
88.53
/ Includes accrued discount.
OFFICE OF FISCAL ASSISTANT SECRETARY"
|/ Current redemption value.
/ At option of owner bonds may be held and will earn interest for additional periods
after original maturity dates.
/ Includes matured bonds which have not been presented for redemption.
0
my 2* X962
m mmm k* *. \w*nm&*t rmad&y* m? 3. ute*.
wsmM OF na_3i«-«s mmu BILL OFITOIMJ
**_* -*w*****«, n*™**™*n*.flf!-nanefirii»«t evaniw that tha tatidara far twa aatiaa at
Srt^^Ato Sa <iatad M, 5* X9*J* *£ mm attaradm Mi 0•**•*
apaaa® at it* fadaraX M H r n M y ' l ^ t i U v T S ^ t ^ i S ^ S S K v ^ X a . *
orttairaab-uta, at 9X*i*$y biXXa and far $7*10*000*000* or tharaaaaata* ar xa^aay B ^ » «
fHa details af tha tno aariaa am as faXXaaas
XB2*a»y fraaaary biXXa
9X^af Traaaary ^ L X @
mmm m ACCEPT©
GOHPtnTXft BIJBt
PvX&a •BB9P*/'II .1** i m
4Baaj!!t
2.979$
Higjh
9S.U9I*
2*i. .
99.257
3*030*
2.9391
t
96.U79
99.259
3.006$ y
2.93*$X/
a/ Excepting o ^ taadar af $300,000
waslow
aaaaptad
H percent af tha ammmt at 91-de# biXXs t*M far at tfaa
price
h p « m « t of tha asdati af XS2*<i»y M X X a Ud tm at ttw low priaa
»7
ftma TKHKKS JJ>PLI»>ratkm kmmm
l*r*
Ite* York
PhiX«icA»X^ia
St. Laaia
tttanatpolla
Kamrn Otty
Dallas
San frmaiaa®
TOXfttS
I
si i s n u wsewa »tnc?$$
Au&liad far
X,€i$*X5X,000
28*560,00©
8,828,000
Atlanta
-
&!3ft£aoo
tM6Wao
X7*I53*000
3U*9X5*000
2XtQEL2f00O
$2*2XX*liCi,000
i*5W*000
32*1*39*000
6*776*'
Xa*225,00®
X9O*S€4*.00O
23*661**000
9*963,000
23,509*000
11,722,000
$X,300*XX5,O0O y
X2,XOS,Q0O
rffigooo
000 W8fc
538*X97,000
975*997*000
14,2X3*000
27,567*000
2*526*000
2*557,000
iS*X67*000
5*102,000
1**952*000
9*257*000
9*2X3*000
27,567*(»0
2,526,000
2*557*000
32*267,000
2i*liX2*000
U,U52,0O0
9,161,000
6,3*X»000
$700*33X,000 y
t x . 7*Sax*ooo
m*^*
__22___
0.000
000
mj»m, -J nonco^^titiv* tandara accepted at the avarafa priaa af 99.259
Include $ltQ,7$q*000 noncapipetitiT® tandmm accepted at tfoa average priaa of 9§*ti79
On a ampm iamm at tha sma Xangth aa& far th® aam ammmt limatati, tha raimm on
Wmm htUaymM
pfwJUia J*mXd» at 2.99$* tar tha 91-day aiXXa* aaa 3#X0I* far tlia
XS2**lay bills. Hitarast mtaa am M X X s are qmatad in t a m a of aassk di-count t&t&
tha mtmtm raXatad ta tha tarn ammmt at tba bills s&ayat&a at maturity rattiar than
tm mmmt ixmat&d md thatr length in actual wmhar at day© related to a
javr* la e>»tra*t* jialdes on aartlflaataa* aatas* m& bmda mm aaaptta«i in
af inter-st on Urn mount immtad9
and relate tha nwaber af days raaaiai»g In am
intmwaat -immamt pariad to %bm mtml mwtsar at dam in tka partad$ aMh
ampmmdlng if mm ^mm mm cm?w. jpariad la involved.
TREASURY DEPARTMENT
J^
WASHINGTON. D.C.
July 2, 1962
FOR RELEASE A. M. NEWSPAPERS, Tuesday, July 3, 1962.
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 April 5, 1962,
and the other series to be dated July 5, 1962, which were offered on June 27, were
opened at the Federal Reserve Banks on July 2. Tenders were invited for $1,300,000,000,
or thereabouts, of 91-day bills and for $700,000,000, or thereabouts, of 182-day bills.
The details of the two series are as follows:
RANGE OF ACCEPTED
91-day Treasury bills
182-day Treasury bills
COMPETITIVE BIDS:
maturing October 1*, 1962
maturing January 3, 1963
Approx. Equiv.
Approx. Equiv.
Price
Price
Annual Rate
Annual Rate
High
99.269 a/
2.892*
98.1*9i*
2.979*
Low
99.257 ~
2.939*
98.1*61*
3.038*
Average
99.259
2.930* 1/
98.1*79
3.008* y
a/ Excepting one tender of $300,000
81 percent of the amount of 91-day bills bid for at the low price was accepted
k 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
$
31,961*, 000
1,61*5,151,000
28,560,000
38,389,000
8,828,000
23,21*1*, 000
232,386,000
28, 661*, 000
17,153,000
3U,915,000
21,012,000
101,11*2,000
$2,211,1*08,000
Accepted
Applied for
?
22,76U,000
$
12,106,000
883,661,000
975,997,000
8,5U8,000
11*, 213,000
32,1*39,000
27,567,000
8,778,000
2,528,000
16,225,000
2,557,000
190,866,000
88,167,000
23,661*, 000
5,1*12,000
9,963,000
1*, 952,000
23,509,000
9,257,000
11,722,000
7,501,000
67,976,000
52,310,000
$1,300,115,000 b / ^ 2 0 2 , 5 6 7 , 0 0 0
Accepted
$ 12,106,000
538,197,000
9,213,000
27,567,000
2,528,000
2,557,000
32,287,000
l*,l*12,000
l*,l*52,000
9,161,000
6,51*1,000
51,310,000
$700,331,000 c/
W Includes $193,193,000 noncompetitive tenders accepted at the average price of 99.259
c/ Includes $1*0,750,000 noncompetitive tenders accepted at the average price of 98.1*79
1/ On a coupon issue of the same length and for the same amount invested, the return on
these bills would provide yields of 2.99*, for the 91-day bills, and 3.10*, for the
182-day bills. Interest rates on bills are quoted in term3 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
1
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
>j
interest payment period to the actual number of days in the period, with semiannual
compounding if more than one coupon period is involved.
aWiPHkx
9
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 in-
clude in his income tax return only the difference between the price paid for suc
billsj whether on original issue or on subsequent purchase, and the amount actual
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 (current revision) and this notice, pre-
scribe the terras 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-
mm
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 securiti
Tenders from others must be accompanied by payment of 2 percent of the face amount
of Treasury bills applied for, unless the tenders are accompanied by an express
guaranty of payment by an incorporated bank or trust company.
Immediately after the closing hour, tenders will be opened at the Federal Reserve Banks and Branches, following which public announcement will be made by the
Treasury Department of the amount and price range of accepted bids. Those submit-
ting tenders will be advised of the acceptance or rejection thereof. The>Secretary
of the Treasury expressly reserves the right to accept or reject any or all tender
in whole or in part, and his action in any such respect shall be final. Subject
to these reservations, noncompetitive tenders for $ 400,000 or less without
S3
stated price from any one bidder will be accepted in full at the average price (in
three decimals) of accepted competitive bids. Settlement for accepted tenders in
accordance with the bids must be made or completed at the Federal Reserve Bank on
July 16, 1962 , in cash or other immediately available funds or in a like,
face amount of Treasury bills maturing July 15, 1962 . Gash 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 subje
to estate, inheritance, gift or other excise taxes, whether Federal or State, but
0
TREASURY DEPARTMENT
Washington
FOR IMMEDIATE RELEASE July 2, 1962
TREASURY TO REFUND $2 BILLION OF ONE-YEAR BILLS
The Treasury Department, by this public notice, invites tenders for
$2,000,000,000 , or thereabouts, of 565 -day Treasury bills, for cash and
xxpxjc
"""
""xpEjE
in exchange for Treasury bills maturing
July 15, 1962
f in the amount
of $2,005,516,000 , to be issued on a discount basis under competitive and
noncompetitive bidding as hereinafter provided.
The bills of this series will be
dated July 15, 1962 , and will mature July 15, 1965 , when
the face amount will be payable without interest. They will be issued in beare
form only, and in denominations of $1,000, $5,000, $10,000, $50,000, $100,000,
$500,000 and $1,000,000 (maturity value).
Tenders will be received at Federal Reserve. Banks and Branches up to the
Daylight Saving
closing hour, one-thirty p.m., Ea.stern/i8W63®S8& time, Tuesday, July 10, 1962
Tenders will not be received at the Treasury Department, Washington. Each tender
must be for an even multiple of $1,000, and in the case of competitive tenders
price offered must be expressed on the basis of 100, with not more than three
imals, e. g., 99.925. Fractions may not be used. (Notwithstanding the fact tha
/
these bills will run for 565
days, the discount rate will be computed on a bank
x^c
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 Branc
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
TREASURY DEPARTMENT
WASHINGTON, D.C.
July 2, 1962
FOR IMMEDIATE RELEASE
TREASURY TO REFUND $2 BILLION OF ONE-YEAR BILLS
The Treasury Department, by this public notice, invites tenders
for $2,000,000,000, or thereabouts, of 365-day Treasury bills, for
cash and in exchange for Treasury bills maturing July 15, 1962, in
the amount of $2,003,516,000, to be issued on a discount basis under
competitive and noncompetitive bidding as hereinafter provided. The
bills of this series will be dated July 15, 1962, and will mature
July 15, 1963, 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, $50,000, $100,000, $500,000 and $1,000,000
(maturity value).
Tenders will be received at Federal Reserve Banks and Branches
up to the closing houn, one-thirty p.m., Eastern Daylight Saving
time, Tuesday, July 10, 1962. 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 365-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.
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.
Immediately after the closing hour, tenders will be opened at
the Federal Reserve Banks and Branches, following which public
D-53^
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
- 2 the Treasury expressly reserves the right to accept or reject any or
all tenders, in whole or in part, and his action in any such respect
shall be final. Subject to these reservations, noncompetitive
tenders for $400,000 or less without stated price from any one
bidder will be accepted in full at the average price (in three
decimals) of accepted competitive bids. Settlement for accepted
tenders in accordance with the bids must be made or completed at the
Federal Reserve Bank on July 16, 1962, in cash or other immediately
available funds or in a like face amount of Treasury bills maturing
July 15, 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 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 return is made, as ordinary gain or loss.
Treasury Department Circular No. 4l8 (current revision) and
this notice, prescribe the terms of the Treasury bills and govern
the conditions of their issue. Copies
0O0
of the circular may be
obtained from any Federal Reserve Bank or Branch.
TREASURY DEPARTMENT
WASHINGTON, D.C.
July 2, 1962
FOR IMMEDIATE RELEASE
TREASURY DECISION ON ELECTROLYTIC MANGANESE
UNDER THE ANTIDUMPING ACT
The Treasury Department has determined that electrolytic
manganese from Japan 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 I96I was approximately $21*1,000.
g
TREASURY DEPARTMENT
WASHINGTON, D.C.
July 2, 1962
FOR IMMEDIATE RELEASE
TREASURY DECISION ON ELECTROLYTIC MANGANESE
UNDER THE ANTIDUMPING ACT
The Treasury Department has determined that electrolytic
manganese from Japan 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 1961 was approximately $21*1,000.
-3-
7
and exchange tenders will receive equal treatment. Cash adjustments will be made
for differences between the par value of maturing bills accepted in exchange and
the issue price of the new bills.
The income derived from Treasury bills, whether interest or gain from the sale
or other disposition of the bills, does not have any exemption, as such, and loss
from the sale or other disposition of Treasury bills does not have any special
treatment, as such, under the Internal Revenue Code of 1954. The bills are subjec
to estate, inheritance, gift or other excise taxes, whether Federal or State, but
are exempt from all taxation now or hereafter imposed on the principal or intere
thereof by any State, or any of the possessions of the United States, or by any
local taxing authority. For purposes of taxation the amount of discount at which
Treasury bills are originally sold by the United states is considered to be 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 considere
to accrue until such bills are sold, redeemed or otherwise disposed of, and such
bills are excluded from consideration as capital assets. Accordingly, the owner
of Treasury bills (other than life insurance companies) issued hereunder need in
clude in his income tax return only the difference between the price paid for su
bills, whether on original issue or on subsequent purchase, and the amount actual
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 (current revision) and this notice, pre-
scribe 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.
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.
Immediately after the closing hour, tenders will be opened at the Federal
Reserve Banks and Branches, following which public announcement will be made by
the Treasury Department of the amount and price range of accepted bids. Those
submitting tenders will be advised of the acceptance or rejection thereof. The
Secretary of the Treasury expressly reserves the right to accept or reject any
or all tenders, in whole or in part, and his action in any such respect shall be
final. Subject to these reservations, noncompetitive tenders for $ 200,000
or
less for the additional bills dated April 12, 1962 , ( 91 days remaining until maturity date on October 11, 1962 ) and noncompetitive tenders for
xpipc
$1013,000 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 ten-
ders in accordance with the bids must be wsAe or completed at the Federal Reserve
Bojjkg
July 12, 1962 , in cash or other immediately available funds or
—•
ps^
in a like face amount of Treasury bills maturing
July 12, 1962
. Cash
£232
on
3_4-MfcC&£ft
P
KJ
TREASURY DEPARTMENT
Washington
FOR IMMEDIATE RELEASE July 3, 1962
)QDD_<XX}OCSODQD^gmO0a0O00Q00OQgQaOC
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 $ 2,000,000,000 , or thereabouts, fo
cash and in exchange for Treasury bills maturing July 12, 1962 , in the amount
of $ 1,800,212,000 , as follows:
91
-day bills (to maturity date) to be issued
July 12, 1962
,
in the amount of $ 1,500,000,000 , or thereabouts, representing an additional amount of bills dated
and to mature
October 11, 1962
April 12, 1962
, originally issued in the
amount of $ 600,202,000 , the additional and original bills
£_@£
to be freely interchangeable.
182 -day bills, for $700,000,000 , or thereabouts, to be dated
2qp_y~
pIEJ
July 12, 1962
p^£
, and to mature
January 10, 1965
"P3P
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, $50,000, $100,000, $500,000 and
$1,000,000 (maturity value).
Tenders will be received at Federal Reserve Banks and Branches up to the
Daylight Saving
closing hour, one-thirty p.m., Eastern/gtfflnwtofl; time, Monday, July 9, 1962
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
,7-6-3 ->
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
$2,000,000,000, or thereabouts, for cash and in exchange for
Treasury bills maturing July 12, 1962,
in the amount of
$ 1,800,212,000, as follows:
91-day bills (to maturity date) to be issued July 12, 1962,
in the amount of $1,300,000,000, or thereabouts, representing an
additional amount of bills dated April 12, 1962,
and to
mature October 11,1962, originally issued in the amount of
$ 600,202,000, the additional and original bills to be freely
interchangeable.
182-day bills, for $700,000,000, or thereabouts, to be dated
July 12, 1962,
and to mature January. 10, 1963.
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, $50,000, $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 p.m., Eastern Daylight Saving
time, Monday, July 9, 1962.
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-535
accompanied by an express guaranty of payment by an incorporated bank
or trust company.
- 2 Immediately after the closing hour, tenders will be opened at
the Federal Reserve Banks and Branches, following which public
announcement will be made by the Treasury Departmment of the. amount
and price range of accepted bids. Those submitting tenders will be
advised of the acceptance or rejection thereof. The Secretary of
the Treasury expressly reserves the right to accept or reject any or
all tenders, in whole or in part, and his action in any such respect
shall be final. Subject to these reservations, noncompetitive
tenders for $200,000 or less for the additional bills dated
April 12,1962,
(91-days remaining until maturity date on
October 11, 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 Banle on July 12, 1962,
in cash or other immediately available funds or in a like face
amount of Treasury bills maturing July 12, 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 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<3k (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
0O0 the taxable year for which the
return is made, as ordinary gain or loss.
Treasury Department Circular No, 4l8 (current, revision) and this
notice prescribe the terms of the Treasury bills and govern the
conditions of their issue. Copies of the circular may be obtained fro
any Federal Reserve Bank or Branch.
FOR BMEDIAT1 RELBASI
TftSAStlBCf D2§6XSX®1$ (HI l^^KACYGLIHE Tk-EU&ES
mm CAPDIILES mmm THE M®mmiM me
The Treasury I^spartesent has determined that tetracycline tablets
and capsules fro© Italy are not beings nor likely to be ? solid in the
Unites States at 1 M » than fair value within the meaning of the
Antidumping Act.
Notice of the determination will be published in
the Federal ltegist<&r*
Appraising officers are being instructed to proceed with the
'3d
appraisaawmt af this merehais&i®© frost £teOy witfeisut ragard to any
question of dumping,
Warn dollar value at imparts ©f th« involvedffi«r©haa&iser*e*ivei
<*»*»£ X0X
was &m*m$mm&
2cc: Mr. Hendrick
#1,500,000.
TREASURY DEPARTMENT
WASHINGTON. D.C.
July 9, 1962
FOR IMMEDIATE RELEASE
TREASURY DECISION ON TETRACYCLINE TABLETS
AND CAPSULES UNDER THE ANTIDUMPING ACT
The Treasury Department has determined that tetracycline tablets
and capsules from Italy are not being, nor likely to be, sold in the
United States at less than fair value within the meaning of the
Antidumping Act. Notice of the determination will be published in
the Federal Register.
Appraising officers are being instructed to proceed with the
appraisement of this merchandise from Italy without regard to any
question of dumping.
The dollar value of imports of the involved merchandise received
during 1961 was approximately $1,500,000.
1 0
July 9, 2^*e
B77;JLTG OF m m * ' * VBBOUr B1IX OffEiXliS
feUOn, one series to t* ®* «Mttfe*a taw* ©f t&* t & U s aatei Ap*l. 15, 1 S ^ #
trie® tofcedated July U9 M®B* «feiel* w » ©fStosi ©a <l*ily S, «e*e
^ m l Beserve l u t e on July 0. fismtere «©ir©fc*vita&&&>r $1,300,000,009,
of «L«*ar M l * * and $®r 1700,000,000, ar tlie_*afc3sii*f ot 182-dtay *-**«*
details of tfe* ««»
S A U I OF ACCEPTED
bin*
*at*iri^ Jteiary 10, 1*3
bill©
«»i_iag>iiBa» &*»*_&__» U L » 2JM12
$gnta*.-if9aia\
'""itlff
s>i
8.sf)jt
33.248
0?
IB
c f the
^DTAL 1 9 D U R 8 AWMMi
m
M*m*$ y
& H & ^CCBPTIi3) Bf
1,637,165,000
13AO7l000
57,462,000
2S7 ,118$* *000
37,786,000
13,112,00)
46,160,000
2S,27S,000
ISSS^WE ISSTHICTS:
J^01_^tlNI
»,000
M,3C3,000
!3A07l0O0
31,052^000
220,0©2,000
32,785,000
12,5X7,000
43 ? XSO,0OD
1S,S49,0(K)
%J_R-Hfilil ,f__*l
TOTALS
^2,354,706,000
^1,501,065,000 a/
aso#3uys#ooo
0,971,000
f7*3^.,000
38*173,000
? ? 1B0 > O0O
5,065,000
8j3£S,000
10,540,000
61,767,000
$1,126,414,000
$^SS#S4S,000
InclUite ^.,735,000
fin & oogeft issue o f the
ttes@ M i l e %rauM provide yields o f 5 . 0 0 , ft>r the 91-ilay bills,
133-day bills, Xatcrcat rates on bills mra quoted in tenas o f
the return related, to tis» f&ce ssxOTt o f th© bills ya$ah$m at
the ig^ynt imaafo&d and their length in actual masber o f dtays
of iaterest an ma mmmt invested, «ai relate the nusber of 4
tnt&rmt fs^Mist period to the actual m a t e r of aay« in tha
it mam mm ma emgtm parted i»
A
/,
,£
3-115
$.096 |/
bills bid for at ti-_2 low ps*ice D K S
o f 1 ^ - d ^ bill£i bi^S for mt tt* Ion price vaa
^fltffrit tk&t.
5,740*000
98.455
S3
540,616,000
4,971,000
12,121,000
4,209,000
5,740,000
36,173,000
6,180,000
5,065,000
5,540,000
60,767,000
$700,114,000 b/
TREASURY DEPARTMENT
WASHINGTON, D.C.
July 9, 1962
FOR RELEASE A. M. NEWSPAPERS,
Tuesday, July 10, 1962.
RESULTS OP 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 April 12, 1962,
and the other series to be dated July 12, 1962, which were offered on July 3, were
opened at the Federal Reserve Banks on July 9. Tenders were invited for $1,300,000,000,
or thereabouts, of 91-day bills and for $700,000,000, or thereabouts, of 182-day bills.
The details of the two series are as follows:
RANGE OF ACCEPTED
COMPETITIVE BIDS:
High
Low
Average
91-day Treasury bills
maturing October 11, 1962
Approx. Equiv.
Price
Annual Rate
99.258
2.935$
99.245
2.987$
99.248
2.974$ 1/
182-day Treasury bills
maturing,January 10, 1963
Approx. Equiv.
Price
Annual Rate
98.454
3.058
98.425
3.115
98.435
3.096 1/
27 percent of the amount of 91-day bills bid for at the low price was accepted
18 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
|
41,792,000
1,637,165,000
29,869,000
45,534,000
19,107,000
37,462,000
287,582,000
37,785,000
19,112,000
48,160,000
25,279,000
135,861,000
$2,364,708,000
Accepted
Sp
5 5 , oodt,000
752,565,000
14,369 ,000
31,884,000
19,107 ,000
31,832 ,000
220,092 ,000
32,785 ,000
12,517 ,000
43,160 ,000
15,549 ,000
91,371 ,000
$1,301,063,000
Applied for
$T~ 8,204,000
890,116,000
9,971,000
27,121,000
4,209,000
5,740,000
88,173,000
7,180,000
5,065,000
8,328,000
10,540,000
61,767,000
a/ $1,126,414,000
Accepted
$ 8,204,000
540,816 ,000
4,971 ,000
12,121 ,000
4,209,000
5,740,000
38,173 ,000
6,180 ,000
5,065,000
8,328 ,000
5,540,000
60,767 ,000
$700,114,000 b/
a/ Includes $263,543,000 noncompetitive tenders accepted at the average price of 99.2
b/ Includes $51,735,000 noncompetitive tenders accepted at the average price of 98.435
1/ On a coupon issue of the same length and for the same amount invested, the return on
these bills would provide yields of 3.04$, for the 91-day bills, and 3.19$, 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-5
14
s.to* miMm
k. H. ssssn-psas,
mnaadav, tote XX. 1962.
&&
XQ$
i#2
mvm> or mrmmm or #2 IBJJOJJ or QUE-HAII BILLS
the freasiiry Bepartsiont announced laet evening that tha tender* for #2,000,000,00
or U M M M M O V U I , of 365-day troaoary hills to b# doted July 15, 1*62, and to aiatore
«uly IS, IS63, whieh nere offered on ^ l y 2, were opened at the Federal itoeora Banks oa
the details of this issue are as followss
total applied for - #3,719,072,000
total accepted
- 2,000,393,000
4laai« of accepted competitive bidet
iA h
&
Low
Average
(§5 percent of
federal £eeerv»
District
Boston
(include* |221,571i,CKX) entered an a
ooneoapetltive basis and accepted la
fall at tha average pries shotm below)
(laeeptiag fivo tenders totaling #2,675,000)
- 96.730 Sqwivalsnt rata of diseoysfc appro*. 3.22$$ par anmm
- 96.662
«
•
»
»
•
3»273i *
•
. 96.696
•
*
•
»
•
3»257S •
•
tha asaosnt Hid for at tha Xw priaa ma accepted)
total
kimXXad for
total
iWw69ni9ooo
i
65,14-7,000
1*1**3*7*009
2,1*56,1*72,000
Philadelphia
iU,30$fooo
ii3,6o$,ooo
ClevelaiKi
163,236,000
221,736,000
iiicissond
16,010,000
22,610,000
Atlanta
35,310,000
U2,710,000
Chicago
355,636,000
52t*,386,O0O
St. Louis
I6,83i*,000
Minneapolis
22,833,000
5,865,000
Kansas City
JXfMStOOO
34,782,000
Bellas
1*9,782,000
26,518,000
San Francisco
38,668,000
«fqfti<»
TOfaL #3,719,072,000
#2,000,3*3,000
0a a eotjpon iss«e of tha same length and for the soma amount Invested,
the return on
these bills would provide a yield of 3.39*. Interest rataa on feiHs ar# quoted in
tarm of bank discount tilth tha return ralatad to tha faos amount of the bills pajmbli
at maturity rather than tha aiaount invested and their length in aetoal motor at dam
related to a 360-day year. In contrast, yields on certificates, notsa, and bonds art1
computed in tarm at interest on tha amount invested, and relate tha number of days
remaining in an interest pa/mant period to the actual mother of days in tha period,
with g^iaimual compounding if sore than one coupon period is involved.
Um lark
TREASURY DEPARTMENT
«? c
WASHINGTON, D.C.
FOR RELEASE A. M. NEWSPAPERS,
Wednesday, July 11, 1962.
July 10, 1962
RESULTS OF REFUNDING OF #2 BILLION OF ONE-XEAR BILLS
The Treasury Department announced last evening that the tenders for #2,000,000,000
or thereabouts, of 365-day Treasury bills to be dated July 15, 1962, and to mature
I July 15, 1963, which were offered on July 2, were opened at the Federal Reserve Banks on
July 10.
The details of this issue are as follows:
Total applied for - #3,719,072,000
Total accepted
- 2,000,393,000
(includes #221,57^,000 entered on a
noncompetitive basis and accepted in
full at the average price shown below)
Range of accepted competitive bids: (Excepting five tenders totaling #2,675*000)
High - 96.730 Equivalent rata of discount approx. 3»225$ per annum
!t
n
Low
- 96.682
»
*
'»
3.273% "
1
Average
- 96.698
»
»
«
n
n
3.257# »
(85 percent of the amount bid for at the low price was accepted)
Federal Reserve Total Total
District
Boston
New York
Philadelphia
Cleveland
Richmond
Atlanta
Chicago
St. Louis
Minneapolis
Kansas City
Dallas
San Francisco
»
"
1/
Applied for
Accepted
#100,927,000
|
65,U27,000
2,1456,1*72,000
1,198,397,000
10,605,000
lU, 305,000
221,738,000
163,238,000
22,610,000
16,010,000
1*2,710,000
35,310,000
52^,386,000
355,636,000
22,838,000
l6,63U,00O
31,885,000
5,885,000
1*9,782,000
3^,782,000
38,668,000
26,518,000
163,1*51,000
68,051,000
TOTAL
#3,719,072,000
#2,000,393,000
1/ On a coupon issue of the same length and for the same amount invested, the retu
these bills would provide a yield of 3.39$. Interest rates on bills are quoted in
'
terms of bank discount with the return related to the face amount of the bills payabl
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
1
remaining in an interest payment period to the actual number of days in the period,
1
with semiannual compounding if more than one coupon period is involved.
D-537
5^-i
,;. A
:
ns of/comparing] present
•••-ills tic
r
.Jlc V~t^>
u;e,# depreciation a c c o u n t s £ i t f j the new guideline f a s c e s ] f o l l o w s .
It includes consider&
, nsf)
70 FiTva.
tfovV-0'^7?c">'
balance method of ti epreciat i.ofi.
i'
(m0iof
''' ; L'i^
° ^77:1
A ^t u_ <4^
17; •"-ed/ '.fo4-Md of
Cost
iv.i .-.0 A
!
\ r)ei;reo \a 7 on Rate
i-ht 1line
m e X\ ^ rr j^fe*,
•fck,
Straight
deprecint' « n i8aimmv\
n
71 n o n o s'. 7 v-oorr,) Straight line I 7I/-JO \ ^, (/asis less
+
- -, ~
•
Ear hi ne
Total
fV-.O
.5-00
|
500
5.07 J
r,, 7
$900
.•;:.; yoarr 77ubAe '! 07 "! ^ rvl.nH 'y y ^ i Vyj ^basis less
reserve)
balance
I
Vo
\
»
I1 '?2,noo
Of
is 1 / ^ "
•-I.''.' ' 7 0 0
300
1,000
2,700
-< P rV-Tocl-'i.' o n th:-s taxpayer is presently tailing, item by item, equals a
weighted aver ,:o ^:/7-u7 7-^ ,'m of 13 1/3 yenrsl ^ >.0O 1
Surv:\^e tie oriiflo,ine for the class which these four assets conrprise has been X
set at 10 years. The tnto.'l deprv i «t ion lahen at the straight line rate, which is v sea for
purposes of testing and comparison, cannot X therefore exceed $3,600 (the 10$ straight line
depreciation rate times the basis.)
CD
1 53
*jf7
This taxpayer has the following alternatives:
depreciation
He may sub-group the items in the class according to the method of
*SBta_a used and change the lives to achieve a 10-year weighted.average life.
shift mir-ht be as follows:
Machines A & B
Basis less
salvage
$13,000
C & D
Machines UffiB
Basis
$21,000
Life Used
f
7lJ& years
Straight line
depredation rate
_t° 1/fw
Straight line
depreciation
x
^i ^nn -
8 1/3JS
$1,743_
12 years
One such k
J^
Actual depP0^'
taken
•$0,4,36*
Alternatively, this taxpayer may change his item lives'to a Aa 510-year
eve
weighted average life.
'Life Used
10 years
Machine A
One such shift might be as follows:
Actual &e pre CAWK
Straight line' Straight line
depreciation rate depr*-r i F. 11 on taken
$v)00
$900
10JS
Basis less
salvage
$9,000 -
Machine B
4,000
5 years
WhMSMJL
15 years
6 2/3
<*
O /0
Machine C
Basis
6,000
Machine D
15,000
10 years
10%
300
800
400
583
1,500
£'3,60(5
2,600
|T, 383
^-4
- Its**
mm to
1
i«
M JWIUIMI «t « * M U « if tt» *»$*
lift
tttottfttt Hit to
tot wi 11
ito $&t« #£ ^^1 i#H%i<m $£
in®-to it f Oti
rUbhik*^ '/* ™ OLdU^HjA
«K23. it
immmmm
m n «*t to
m
iw*
ill .Hit ft&to*
ttilli tf$$ jptit^ylf:iiftj§,
9
in imtotii
ilii#tofcl*toI M S
to
la moat ©aees, the lift ft* tha guideline claae w l U to
lengthen in ae®erdaa@e with the Table iw Mim^mmt M :_
togwaelatOt Ltmrn* «hieh it part of Bavenua wrmmdvm 6a-tl.
A taacpiyer wheAi® unable to denitmatrate that the faefca and
etoeiaetoaat* ,tf Mi ©aee Justif y (to deniable life to i* utimj
would have the 34ft ief*gthetied to tot fell®**i**g situation:
Nett-to of deviation W"t Minim tolftto
Seat ®f teseta in guideline aXmm #10,0O©
.,.>«,- Mpm&iMtl®n reserve for elaaa 6,500
Xm&m hiijisitiw tttio
6S*
Bate ©f gratoh
Life being tested
*2 3*ars
Appropriate reserve ratio range Cfrto |£ble} 53~6l#
Life t© toith he w©**ld be lengthened (totP^toito) X5 ?*«-*§
2i
f ^ U M i m ttoltslit* cf ttetoaMfttto*wilt* tot
ratios tott toSt. ppmim to «U toim ft' tai*tto_t
kiifeK tott tot t« litot toim «»§ -«iw«^«^ tot*
toraiil of toMMftt MJtota-n& S&**st?X#d
iiigpf# tot tofMNMOtos.^ «2**a*t % tot ^^^ip» pwtoa It' to
ttg^ftoinKIr *** tf Man to! mmm b# jmMmdt "tjir 'tot mmmrnm
WWMB
toed to lar » ttaatof tar' ftoto ttt as^Ha^to**** ^iwto^Ni
•nilt to tt&to* fto* totawto ilPttotaPt to-41 ^w^^fca toteltt toito
•fin %wMn0m to* wmh ^i^ta^S it topptg^toto* i-* ^ ** **et
mm mmwvemSam Itttt to StorifttMtf mpto toe a&artoet totto mm
to jwtlfstt It ail toe faato «aft ttvaiaMflatftett* *ltoalto tttoa
mtif#ii tow Is tot paat torn toti I* an. totoia$$ - • e«w^% $»i
aevatt mm m mmm pttitft tf' tim mil m totpr to topaaa*. Mutt
«sil to Xmmmm mmmlf it
#««N^^
with aetort
•>._»•
' 22
X •• »•* mmmm tttotltar toftwtt to falia* m wfflf& wm^
•wm&Xmmmm$& |t«M*tltt*
5. 1 ito totttpt* tot tatvtoatty ftUwtii «s^^psi»to prBttttaa
t«i$tei a u. tot fttofMitftlw tltoMtMat ittttoniiy ctotott.
^ # n* ^rnmm® $mkm ttotttoUy **to**etot toe ftr tot
>•• ft k mmfem ®£ tot **a*te it* a gud.fttttot mmm :%mm PI
77 toe
^^^
t ^ » ^
^gpnfew^SflP^^^flfc 'v^tapap
W w t w w
1l
w%^!^l^t?tyi*Wt3P?^^.^'
itF^*W*tfr '• W ' * * ^ *
.jpFtRpiR tp*ls-:air "•*£_* 3*3p<fi«
L- -
latorial tf ten» ftitans tot * H m i ^ toto #r nmmmm
mm#®mm
£§*&& to t*rtac Ma ^nac*.^-^ pi^ttaat ito* aaafam&ty mto.tit
tto *ttoro**ttm elatoii* mil ag^if to u^-m mm mmm toit* tot
$&i^nmm m wm m itoto tto m£% to a elate nim to m
toe -0m>^Mmm,
afeito m fpwliei tt ?«tt *f tot mm
r
tts$fe:?we •«&&. 4& tel st®#t tot -ptftittttot fag^te far
i m -r v.v*« thnrtor tow tott* i*tee-*to* to tot 'ttMWttottf
w^rfttoM tf iin^top at >-rt t'**-' tott tott toaa *iwia««lsr» tor
in all iiPta 4mmm%m$m
tv-r ai^itltt-Mt to mtfc aftwto* Slttt
« tot toal* tf til tot MtfenftMft ffteta ««•' ei*euaatonttt.
ntv*»»fc ffttto t i i l i i « ^ : a m ifititot, tot a » n«st limits
/,# s** ^ ^ i ^ » (tf t m t oftfctt• tofttttoft ?**M** ttiiiftr) *«
ttttot tot atM fttittrtoui lift «t Mi^totfttta to^ « t to s»
atotoutr t-w
to*
""
-^jfyM^
fl~
EXAMPLE:
A taxpayer has been using a 16 year class life, and has
been using it for at least 8 years,, he can automatically shift
to a shorter life in the following situation:
•Mgfl MH.B
Method of depreciation Straight line
Cost of assets in the guideline class $10,000
H
Depreciation reserve ~ 4,200
Reserve ratio therefore is 42$
Rate of growth 2%
Life being tested 16 years
Appropriate reserve ratio range 43-55
(from Reserve Ratio Table)
Life to which he may drop (from Adjustment Table)
13.5 years)
i«
ife t$m pm-n^mlf
tttitiietratod feia nftto *t eteh efctertor
lltea* w
t. & fcp£ «©e# thttt live* far at toaat eae»iitl£ af ft rtotoeeagel* 777$ tis# vaatrtft ta&ia fitllt witttJtt. tto aff^^ato ran^«
It 1.& &&eeaea*¥ ttofc linta It in nfe far aaa-tolf a re?laea~
mm c:f-u# before tto'rttty«# rtoto]tott)aftr ^# a»t«* aa atooft-iit
juttifiatt^m far tolaiiN^aitaltot lltta tot-to* Jtoia tott^*^***
raJ-tol* --xUetto *hettor aiaartor lieae tat luatifit* too* ato lift
mm
mm
M I I vtettotty tott tfe?tt<-
I tiPEp^w aha vlttoa to £«# far the f iret tlse to a tola**
gaifttiuat ll,f# «r to re#«# totto aa tltetty tol«*-£tuatiint lift
wl.ll to tUtm* to tt ## |^S^^iUli ^«
I* *# m* mmm® rati© far tot gtvattito toae&i* /«i*r ie tola*
toe Itaar liiait tf tot atto^riete raeefftt rttiq vtnftt# tut
J, <ft If* 7» toto **ei«$ tte lift tola* he maw t&toea to xttaaa
far at a**,* t rtftt~htlf a full m^plm^mmnt e#ele, .and
*, § -Vxm mm life ia Watah He batata te »¥# la **o Itwtr then
to* ill** r-hrah aaa to Jttetif _e£ ay to« u*a tf mm wA9mmXaweb table
\
mm
-m -
-..MKUti iiwtt « I U ttt to totfttot at mmm&m*
mm&tm
livt* toitTi torn tiratotr torn tottolitoto -^ tolto atr ** $*a&
fytat to jtftfeiftoft t» atntalftftft toe toxptiraetft tt&tttot *
itoeiitt& .ttoltttftttt tofttotott -ai-U to,«tttotoad*
. • , 7^.; ^-,,;^du:r^ fiw» «ttl a*t fttafcuto tot #p^iwftt mm af
^iv^.-;;-.... ,. -, itirae tosan a tow-tot toe alwa4? ftNgtatflaMtttft
to ttoltotot*
la ftftHMt^*A tot Itatfctaw atta fwto fttoftftfttftt isatar tola*
**vas
g-tft&el-iw*, tftgr to^MJto t t o U ttortor torn llatt mm^mm^
mim
toa tdte^ii-.^ tf mm mmmmM&m mt^Xtaattnt ^i^M aatfttmiaatiet
* t^^fttoft wto tot i ;v^taMljr ttaft ULttt a t w u ? toto tot
./:.. 7-r*r
toll it t<«muttoft t|il_tMM4to*3te te m^mmm to tot toi«#
*"> >
cr
yea*** to will attorttettaa to a&taaat to taattaae 'to aat a U*t
at leapt ** etiart aa the fttoftellaa ftr ft tlirat-yttr transit-ca
fMtrlat*
9to mm lltoa mm ha Qtotolaatt toessnaine in tot f earth ^ear
easy if tot tae ©f tot f^^i^P*!^ rtftle tott ftheat tott ftto taadaora
ia «*t» in tiatt* autia* toaarft a tatlataaaal faftthiat mmt*mm
w%m WmJU^Uf® w$mh mmmmm %mmi a teatiatoat rtoifaaaat
ma "laalaataaist -ratttaa tott to eamittarta to to daaaattottot if
tot taaato to ftMto tot totgasw** tttaata ratla mmm§& tot
aftaatatftlt 'naaa ia Itaar ****** la aay aaa af t*** toMt $*aettia
yoara* W m toxtayar aftto. m tott* an? eitsiaaitiira rtatsaa Mtta
this tort la tto ftorto year tot dot* aa t*^t tm^u^ M^I yc«r
ttoiajtftor* to a£il to r^trssitttt a rMr.mM af yeare ttoal to toe
^t^nm %%m ••;- rate* tha apate limit af toe a^pitoriai* mmm®
rati* itftgt* Par ex«s*>le, if ft totftartr it ftttoft ft W*§m* fttlft
titw nm§. to tatli to atttartl t
PW*I«N§
toa ffyat year «mier aataaya Itoeaftate
rat it to attoift tot aaaftt.
at It yaara* taatoaiat *ito
%9»MX,
to wtiissa Ma wmmmmm
®*®mmftm i n t
14 i m
? ?/*M
mm
tv-7>---'77;..Jt;fe^^Zi.a§ l^ftMl^^
a d ^ i ^ 7 , a i i W ^ ^ -h*++%** *"*** »****
Use at tot tttifthttaaa^aiii eaatlaat to to atatotoft.ftfha* tot
eat tf tot toatt«ftar toaaaitSaaiL ttatoft aaleaa toaia mm
€lmm
iat'.ea. .ana mmtwm toaaatar'e tafttataaaat $m®umm m m& eeafar
alto tot mw^mtmim ttoiatft mmM art tat #wm ahaNiaic a, totai ia
timt sl/i.^3ativr,,
lte^aapara ate* toto# $n mm ptat# beta toiitatoa ttotoaaaaat
praettata *,-m&x&tmrt mtHi tot to* Uvea p^teiei^ nets! aa* wfce*
esf*ili»- .to, Sailer* pa^iliito eeiatitatoat with tot «eW Umm alaiaad
win mmmmimiiw ata* toa tatptaa tafttt tott* ttoa atti.
toe#e#eM* to tlioaat. te aeafttaat iaftftteivitoiy to tat toa ton 11
at itaat - tfrart an tto piiilto«
7, tatea ^xc«pt,7^l eifNajfttott mmm tot
tetreeia&toa aaatrea it imtJuOlf ahawt toa atott|*Mto ,*«!§» fea
tha #*-.^": i to lift w rim* mmm toto rata* ^ai^ oat firat ttoae
PQ
C^M^*i~j * ^AJ^^ <&***>
4*
ft
^f
rato
fttto
Itoiaaka)
Life neat
i*«to
[£ ptt
s§
ft fStovttft
f^#f«
WMfeia* C |2©,»0
•
it M i *
teuiSft
:
_ ftap-teimtelt Ufa feg* tto~j&3jga7
^ (Wt,tti emirtiai ay f^iSt) SftTit.S
to it
sr#
fcN
^atolatoly
fi_i _ _ k IMMJIT wwifcim M i m a i .11 _> I Ife * itt •$ 4^—wit / i a at * « j^fci^p Afcit
int.
A
tolf t aeigfet to aa
llflUfttft
ft $13,000
ratta
it 1/%K
la »5oo
it i/t *
*i*y$o
tott tf aaeeto im ^Mm^^m
elatt
lift* Ota
5,:
ftatit ttf* ffim a t
i -. t7 af ttoa
fto
**tf 2*1*
WMK*
tawta to i
a*
fftSe^fttol*)
i©
mtlfi 9wn» (Ifem |M»l*) 44-&6f
*;a;<HMftr aha atitoea to nae tto art mi^l^m
liata
<2U
O i lift laaftar toaa tot @^3ftettaea -** may ^ ta initial ijr aa a
aahtor af Pttftt mm altoaaft *pe*t&.fi* ty toe Isitoitol Be^emi^
far a awtta «r totae yawa. to -aftrAfthif% to/att af toa taiaaliat
elaa^aa* u^ ati ftwtoalafta aUpto(aaaatoAah ifeiJtehteei ^tep
ifbiefe i»ftafejar&to af • aataa trill to aiiartor tota tot
at&aa* ftr^t to aty laaavtat* tto toUttoatt Utaa aatft ia tui
item at -i-^v_r tr M a aaattato-Haataft aaeanaito- to
ttortor ttaMJtto vntaltat-
Q1
- T •
t. tto rate af trovt^ af t-h*- ftlfttliat e3.«aa la aatertalae*
hy flrat aaaptfhing toa ratle af aetata ia tto sitae aft tto nlm*
Vaf
tto # b » « t wmr to tto atatto -n tot eiaaa^toaa *haae yeta*
tiiere 'paaa.tbialt an entire jn^lttaaaat ayala aarllar* rat t a x w e r
mm the* s^Ni tile *mi«? ©f §re*it& r?*^ tto tohla $&mtd®d la tto
3. ^ ^ a k t a l t o ^ lifa A ^rtar^»^N^'le thea f e m i
4tfUfA*<V&V»
ft. lto_rfe«arva taftla it toaa taaaaraft atth toa teaewa ratio
i^ange aeieetoi frsai tto mm&m
ftftlft'totla efsleli is tpanpriato
t«? the wtfecg af Sevresiatla© toisg **ee4 fen* tto at^eta la that
alaae* toa fate $f giwto tn ihs tOmmm aag tto tott life fat* ttot
elatt.
In* is an ataaalt af ha* a taxpayer aef ng atrai^to lust
6*t§mmiMMm ^miA aeassite ~» tot fn*3 ttot to aet ~- tto i*eeerre
rat to totftt
totia toa tott to.aata eatofftlly toaittot ttmm tmm iag* toatoj£*st£
A to i*aeata*ab alao aara• Jtoatote. 1% tafcea lata aaaaaait toe
laatitoftlatoprlaehlaaatoaaa ttaarthtaal'atta hy i.^v;.o,«ft a
a&toia vmm tot rteervt aatie toy tary witnout aiftoyyy^ t
taeataa* v,*m- few adjuAt^ns af i» lieaa*
to utyaatoto faatare af ate wwmmw ratte tott ia toe latttote
it attaaB....ftft-tottaft' la ftto totoi«iaa&iea af their fttytaaifthla li
taaattet mm tat* rtoeeatha* etataftaaa. tto taw^a af
eeatoiaa* la tot feaerat retto ttol## a^iia^aaBea rattoef ray*
at aaaii at ta faer aeat elaaar toaa tto to& iifa *teni hut ettiy 10 per
eea* faatar* time tto taeaaaa tatlt^a|0-attl aatt faiefcl? luteal*
^toijt.i:i^«r*a rlftht to Itotor fttftaaiatiaai arlttafft ttoa toa
777,17,5.,., ttoi J.o»r toi iftfte ehaaia to- uee*.
fto i»«» raito tott it eaapatat aa fa<toi
1. tot raaarva itftto ia aeheaatlatft hy ftiatolaa tot fti|a*ttoft*ti
rataraa far a 7»tianlar eftaae tf aetata ay toe eaigiael
other hatftt tf
. $ .
km
% <* at
aay toaaaathy tto
i to
U
St till,
©oiy ilT 'i%i
* he
alto
life
. '-r
"*•«-•
•f am
euum4 m wmimta* «r «u «t*'
fi)
ia
mttmrn ei#tiftoatoly feto tot
^aftWftftii^fii^ **
u
•
3d
* .
mm
»gr jmtu*tm
•|1t«H
atNw*iar,
- .Whtpa^. T^R* ^ ^
-i$£pa
-Hb^w
.*a»
%$m #tii# aail__t_a_l *"»-***• Can-
Mi
tojtahii®a tf iMft&nrtaft a
»# ttt f *Mt*>
will
at?. e##a.ifit irjNai
aatft
-s*
toll
la
11
*-lft
Hatal
*
at to
a i l t ? t « rretoteat - 111 ttoe 11
far lea erem eaae to as
hy lea
gaiftellat elaat for
at 12
«
*
•
*
mm
i ^ ^ w
haaaataftftftetiftUattaiatoly aaft mf
to
la tto rre^aeratlan tf tar tot tatara tat aftor tto ilato af
ptoueaftito* fto at* taMtittte Heat aa« aaa ariaattearatftae
^mm^mm mm tarlittola to all ftayraeiahla ^aaparto* laalatlaa
:ittia^ taaato mm veil mm aaw ataaititf<
fht tVeettare* aWM[i^totoltfltto ftallatia *** pdtollato
farftaaatoitahlallaaa* tote « t etoaaatftt enietinf relet,
ttoattaa atfaagaaeftto er aatohliatoft pr^e^ireii fm tttttaUaS-aa
eee-reeietitft far mm to»$ay«p the aiatoe to taatiaat to %m® toea.
tto mil'* afieiFtor galftrisiir littt apply to aftaat 7S Immd
eiaateall.af aetata* ratoar than to eat&ititly tetailat iteaa at
tepraetafcto in^erty. In mast eaaea, a 'alagftt lnlaetor piitaliae
elate till aaaer all tot fwtwttea atehi n#r? tut etartaaaafc
toalaally aaaft fm mm iT^u^trr* Carta! n aeaete in ftatral wm hy
all laaaatri*** aaah aa aaftatatrllea aat tratht aaal tffltt aaeftlate
ani fiaadtortt are aaaarat fty P&itelSaa elaaaaa toftto'aat-aeraea
foe i^L-Trtt- 'ft,*,
»*MW:'*4
17
Itprefeeiaiti
tto fyoiitoatatal eaaeiaep* aaleylyiaft &** ^^ freeatare la ttot
ntll aat to ftittartot if
m m travail eeaaiatoaay
'mtmm.
A.m*i
to aaee tat hie attoal street A at ia ratlriag ea& re$l*tiag Mm
mn£ 7C!i$iM#i
%3&t a
ft
aill mm
7<r>~A ^ - K ^ ^ n " ' ^
^"<i7'74
^-^Hk
•"^<- ' gulftelima am eatabliahtt^t-. aaalat la th« tetofaltohiaa af
*>*
a^pr^pr.si- #iptitoitole lleaa
etflflj
etjeetia* af tit at* itoeetare it to fftttutato tto
atepttatt - tapraeiaiaie iieaa sw?, ehaator them ttaee eat forth m
&iwter than
ia aifeaiy tola* tat taitti-
l«raw?fcie*h Hft ftoaatatihly eaaaiatoat *itti the tan llaaa elalaet*
o if-
TREASURY DEPARTMENT
WASHINGTON, D.C.
CAUTION: FOR RELEASE AT 6:30 P.M. (E.D.T.) WEDNESDAY, JULY Jl7"T962
The attached documents MUST BE HELD IN STRICT CONFIDENCE
and are not to be circulated in any form, oral or written, until
release time. No portion, synoposis, or intimation of its
contents may be given out, broadcast, or published UNTIL RELEASE
TIME. The same caution applies to all newspapers, magazines,
newsletters, radio and television commentators and broadcasters,
both in the United States and abroad.
DEPRECIATION GUIDELINES AND RULES
The Treasury today made public IRS Revenue Procedure 62-21,
embodying a basic reform in the standards and procedures used for
the determination of depreciation for tax purposes.
The fundamental concept underlying the new Procedure is that
the depreciation claimed by a taxpayer will not be disturbed if
there is an overall consistency between the depreciation schedule
he uses and his actual practice in retiring and replacing his
machinery and equipment. Demonstration of this overall consistency
will be based upon broad classes of assets. Guidelines are established for each of these classes — in all cases shorter than those
previously suggested for the guideline class as a whole — to
assist in the determination of appropriate depreciable lives.
A central objective of the new Procedure is to facilitate the
adoption of depreciable lives even shorter than those set forth in
the new guidelines — and shorter than those currently in use, even
where current usage is already below the guidelines — provided only
that certain standards are met and that subsequent replacement
practices are reasonably consistent with the tax lives claimed.
The Procedure becomes effective immediately and may be used in
the preparation of any tax return due after the date of publication.
The new guideline lives and new administrative procedures are
applicable to all depreciable property, including existing assets
as well as new acquisitions.
The Procedure, while replacing the Bulletin "F" guidelines
for depreciable lives, does not supersede existing rules, outstanding arrangements or established procedures for determining
depreciation for any taxpayer who wishes to continue to use them.
Guideline
Based onguideline
Broad Asset
TheLives
new, shorter
livesClasses
apply to about 75 broad classes
of assets, rather than to explicitly detailed items of depreciable
property. In most cases, a single industry guideline class will
cover all the production machinery and equipment typically used in
the industry. Certain assets in general use by all industries,
Q Q
such as automobiles and trucks and office machines and furniture, are
covered by guideline classes which cut across industry lines. For
most taxpayers, three or four guidelines will encompass all of their
depreciable assets.
The emphasis in this broad class approach is on achieving a
reasonable overall result in measuring depreciation rather than a
needless and labored item-by-item accuracy.
EXAMPLE:
IRS' Bulletin MFM, which the new guidelines supersede as a benchmark for the determination of appropriate depreciable lives, sets forth:
For the Hotel industry -- 18 separate specified lives for equipment used in hotels, ranging from 6 years on blankets and spreads to 20
years for fire alarm and prevention equipment. Hotel equipment is now
encompassed in the guideline class for Service Industries, set at 10
years.
For Ice Cream producers — 111 item lives ranging from 4 years for
ice cream cans to 25 years for cast iron flavoring kettles. Equipment
used by ice cream manufacturers is now covered in the guideline class
for Food Products, at 12 years.
For Soap producers — 201 item lives, ranging from 4 years for fat
acid pumps to 30 years for lathes used in making barrels. Soap manufacturers are now covered by the 11-year guideline for all machinery and
equipment used in the Chemical and allied industries.
The Objective Reserve Ratio Test
In many situations under Revenue Procedure 62-21, the use of an
objective standard for determining the appropriateness of the depreciation taken comes into play. This standard is the reserve ratio, which
is computed by dividing the depreciation reserve for a particular class
of assets by the original cost (or other basis) of these assets.
The reserve ratio test measures the relationship between tax lives
and replacement practice on a comprehensive basis with the objective of
achieving a reasonable overall result.
Its use and its application to broad classes of assets will therefore end preoccupation with determination of specific item lives, which
can burden both taxpayers and the Internal Revenue Service without
necessarily achieving meaningful improvement in the fairness or realism
of depreciation allowances.
The reserve ratio test may be used by the taxpayer as a means of
automatically justifying his right to follow the depreciation practices
he is using. It will, however, be used only in conjunction with establish
ed standards as a basis for imposing longer lives than those the taxpayer
considers appropriate. Where the reserve ratio test is not met, the
taxpayer will always be allowed, as at present, to demonstrate the
reasonableness of the depreciation claimed on the basis of all the
pertinent facts and circumstances.
- 3 The reserve ratio test embodied in Revenue Procedure 62-21 differs
significantly from the rough rules of thumb which have in the past sometimes been used. The appropriate ratios set forth vary according to the
method of depreciation employed, the depreciable lives used and the rate
of growth of a taxpayer's assets.
While the reserve ratio test is more carefully designed than former
tests based on the same general concept, it is, however, also more
flexible. It takes into account the inevitable deviations from a
theoretical norm by providing a range within which the reserve ratio may
vary without signalling a possible need for adjustment of tax lives.
An important feature of the reserve ratio test is the latitude it
allows taxpayers in the determination of their depreciable lives, provided they meet reasonable standards. The margin of tolerance contained
in the Reserve Ratio Table encompasses rates of replacement as much as
20 per cent slower than the tax life used but only 10 per cent faster.
Thus the reserve ratio will more quickly indicate a taxpayer's right to
faster depreciation writeoffs than the possibility that longer tax lives
should be used.
The reserve ratio test is computed as follows:
1. The reserve ratio is determined by dividing the depreciation
reserve for a particular class of assets by the original cost or other
basis of these assets.
2. The rate of growth of the guideline class is ascertained by
first computing the ratio of assets in the class at the close of the
current year to the assets in the class at the close of a "base year" —
where possible, an entire replacement cycle earlier. The taxpayer can
then read his rate of growth from the table provided in the Procedure.
3. The class life to be tested is then found.
4. The taxpayer's reserve ratio is then compared with the reserve
ratio range selected from the Reserve Ratio Table which is appropriate
to the method of depreciation being used for the assets in that class,
the rate of growth in the class and the test life for that class.
EXAMPLE:
Here is an example of how a taxpayer using straight line depreciation and a 10-year class life would compute — and find that he met —
the reserve ratio test:
- 4 Cost of assets in guideline class
$10,,000
Depreciation reserve
5.,200
Reserve ratio therefore is
52%
Assets one replacement cycle earlier
8:,200
Ratio of present assets to base year assets
1. 129
2%
Rate of growth (from Growth Table)
10 years
Test life used
Appropriate reserve ratio range (from Reserve
Ratio Table)
44-56%
New Guidelines Immediately Available to All Taxpayers
Any taxpayer who wishes to use the new guideline lives — or a
life longer than the guidelines — may do so initially as a matter
of right and without question by the Internal Revenue Service for a
period of three years. He may if he wishes, shift to the use of the
guideline classes and lives and depreciate all the assets in each
class at a single rate, which in a majority of cases will be shorter
than the rate he has been using. Or, he may rearrange the individual
lives used in his item accounts or his multiple-asset accounts, to
reach an average equal to the guideline.
EXAMPLE:
A taxpayer with three assets comprising a guideline class is
presently depreciating them at straight line as follows:
Straight Line
Depreciation Rate
Cost
Depreciation
Life Used
(or basis)
(% per year)
Taken
8-1/3%
12 years
$1,000
Machine A $12,000
Machine B
$10,000
8 years
Machine C
$20,000
20 years
Total
$42,000
12-1/2%
5%
$1,250
$1,000
$3,250
The depreciation the taxpayer is presently taking, item by item,
equals a weighted average depreciable life for the three assets
($42,000 divided by $3,250) of 12.8 years.
Suppose the guideline has been set at 10 years.
0
- 5 He may shift to the class approach and the guideline life immediately and without challenge, thus taking an annual depreciation deduction
of $4,200.
Or he may change his item lives to achieve a 10-year weighted average
life. One such shift might be as follows:
12-1/2 %
$1,500
Machine B $10,000 8 years
12-1/2 %
$1,250
Machine C $20,000 14 years
7-7/10 %
$1,428
Machine A
$12,000
8 years
Total $42,000
$4,178
Movement to Guideline Unquestioned for Three Years
Use of the guidelines, automatically allowed to all taxpayers at the
outset, will continue to be accepted after the end of the three-year
transitional period unless there are clear indications that the taxpayer's
replacement practices do not conform with the depreciation claimed and
are not even showing a trend in that direction.
Taxpayers who have, in the past, been following replacement practices
consistent with the tax lives previously used and who continue to follow
practices consistent with the new lives claimed will automatically meet
the reserve ratio test. They will, therefore, be allowed to continue
indefinitely to use the tax lives at least as short as the guidelines.
In those exceptional situations where the taxpayer's depreciation
reserve is initially above the appropriate reserve ratio range for the
guideline life or rises above that range during the first three years,
he will nevertheless be allowed to continue to use a life at least as
short as the guideline for a three-year transition period.
The new lives may be questioned beginning in the fourth year only if
the use of the reserve ratio test shows that the taxpayer is not, in fact,
moving toward a replacement practice consistent with the class life used
for tax purposes. Movement toward a consistent retirement and replacement pattern will be considered to be demonstrated if the amount by which
the taxpayer's reserve ratio exceeds the appropriate range is lower than
in any one of the three preceding years. If a taxpayer with an initially
excessive reserve meets this test in the fourth year and does so continuously each year thereafter, he will be permitted a period of years equal
to the guideline life to reach the upper limit of the appropriate reserve
ratio range. For example, if a taxpayer is using a 12-year guideline
life, he would be allowed a period of 12 years, beginning with the first
year under Revenue Procedure 62-21, to reduce his reserve ratio to within
the range.
- 6 -
AO
Use of Lives Shorter Than Guidelines Permitted
The guideline lives will not be treated as minimums. Shorter
lives which have already been established or which may in the future
be justified as reflecting the taxpayer's existing or intended
replacement practices will be permitted.
Revenue Procedure 62-21 will not disturb the continued use of
below-guideline lives which a taxpayer has already demonstrated to
be realistic.
In addition, the Procedure sets forth standards under which
taxpayers, including those previously using lives below the guidelines, may establish still shorter tax lives concurrent with the
adoption of more progressive replacement and modernization practices.
* *. *
A taxpayer who has previously used lives shorter than the
guidelines will be permitted automatically to continue to use these
shorter lives if:
1. He has previously demonstrated his right to such
shorter lives, or
2. He has used these lives for at least one-half
of a replacement cycle and his reserve ratio falls within
the appropriate range.
It is necessary that lives be in use for one-half a replacement
cycle before the taxpayer's reserve ratio may be used as automatic
justification for below-guideline lives because the reserve ratio
will not reliably indicate whether shorter lives are justified
when the life used has only recently been adopted.
* * *
A taxpayer who wishes to move for the first time to a belowguideline life or to reduce further an already below-guideline
life will be allowed to do so automatically if:
1. His reserve ratio for the preceding taxable
year is below the lower limit of the appropriate reserve
ratio range, and
2. He has been using the life which he now wishes
to reduce for at least one-half a full replacement cycle,
and
- 7 AA
3. The new life to which he wishes to move is no
lower than the life which can be justified by the use of
an adjustment table which is provided as part of the new
Procedure.
EXAMPLE:
A taxpayer has been using a 16-year class life, and has been
using it for at least 8 years. He can automatically shift to a
shorter life in the following situation:
Method of Depreciation
Straight Line
Cost of assets in the guideline class
$10,000
Depreciation reserve
4,200
Reserve ratio therefore is
42%
Rate of growth
2% .
Life being tested
16 years
43-55%
Appropriate reserve ratio range (from Reserve
Ratio Table)
Life to which he may drop (from Adjustment
13.5 years
Table)
Taxpayers who do not meet the prescribed tests for automatic
use of lives shorter than those prescribed in the guidelines,
regardless of whether or not they have used them previously, may in
all cases demonstrate their entitlement to such shorter lives on
the basis of all the relevant facts and circumstances.
Relevant facts and circumstances include, but are not limited
to, demonstration that:
1. The taxpayer (if other than a regulated public
utility) is using the same depreciable life on his books
as the one he is claiming for tax purposes.
2. The taxpayer actually intends to follow a more
rapid replacement practice.
3. The taxpayer has previously followed replacement
practices consistent with the depreciation allowances
previously claimed.
4. The taxpayer makes abnormally intensive use of
his assets.
5. A number of the assets in a guideline class
were not new when acquired by the taxpayer.
6. The guideline class contains, for the particular taxpayer, a disproportionate number of relatively
short-lived assets.
7. Extraordinary obsolescence affects the particular
taxpayer.
The three-year transition rule, which gives the taxpayer an
interval of time following the effective date of Revenue Procedure
62-21 to bring his replacement practices into conformity with his
tax depreciation claimed, will apply to those who move below the
guidelines as well as those who shift to a class life at or above
the guidelines.
Following expiration of the transition rule, the reserve ratio
test will provide to all taxpayers a continual means of demonstrating that the tax lives being used correspond with replacement
practices.
Amount of Upward Adjustment Specified
Where the depreciation claimed by the taxpayer proves to be
significantly out of line and cannot be justified by the reserve
ratio test or by a showing of facts and circumstances, adjustments
will be called for. Revenue Procedure 62-21 provides tables which
will indicate how much adjustment is appropriate, but in no case
will depreciable lives be lengthened beyond the shortest which can
be justified by all the facts and circumstances. "Penalty rates",
which have in the past been used in an attempt to correct past
errors over a short period of time will no longer be imposed. Lives
will be lengthened merely to correspond with actual replacement
practice.
In most cases, the life for the guideline class will be
lengthened in accordance with the Table for Adjustment of Depreciable
Lives, which is part of Revenue Procedure 62-21.
EXAMPLE:
A taxpayer who has been using a 12-year class life and who is
unable to demonstrate that the facts and circumstances of his case
justify use of that life would have the life lengthened in the
following situation:
-9-
46
Method of depreciation Double declining balance
Cost of assets in guideline class - $10,000
Depreciation reserve for class 6,500
Reserve ratio therefore is 65%
Rate of growth 4%
Life being tested 12 years
Appropriate reserve ratio range (from Reserve Ratio Table) 53-61%
Life to which he would be lengthened (from Adjustment Table) 15
years
Any necessary lenthening of depreciable lives will be put into
effect no earlier than the first year in which the reserve ratio test
is not met and the life cannot be justified on the basis of the facts
and circumstances. The lives will not be lengthened for any earlier
taxable year.
Guidelines Not Retroactive *-*
This Procedure will be effective immediately but will not apply
to depreciation allowances for taxable years for which returns were
due to be filed before the date of publication of Revenue Procedure
62-21.
Examination of the depreciation claimed for earlier taxable
years will be made under previously established procedures. The new
guideline lives set forth in the Procedure will not be considered as
evidence that these lives were the appropriate ones in previous years
for a taxpayer who did not follow replacement practices consistent
with the guidelines.
A taxpayer may, however, in certain circumstances resort to the
Reserve Ratio Table in this Procedure to demonstrate that his replacement practice in past years supports the life claimed.
oOo
EXAMPLE
A more complete and realistic example of the means of shifting present item depreciation accounts to the new
guideline lives follows: It includes consideration of salvage value and the use of the double declining balance ^ ^
method of depreciation.
Straight
deprecCost (or
basis)
Life Used
Machine A
$10,000
10 years
Machine B
5,000
8 years
Method of
Depreciation
Salvage
Straight line $1,000
10J& (times basis
less salvage)
Strai#it line 1,000
12-1/2 <f> "
10 ia (times basis
less reserve)
Machine C
6,000
20 years
Reserve
Double declining
balance
Machine D
15,000
15 years
Double declining 2,000
balance
TOtal
$36,000
Depreciation Rate
{ia per year)-
1,626
13-1/3 f>
"
line deprec- iation
iation
taken
*9CO
$900
500
500
300
^37
1,000
1,733
$2,700
$3,570
The depreciation this taxpayer is presently taking, item by item, equals a veigited average class life
of 13-1/3 years ($36,000 divided by $2,700).
Suppose the guideline for the class which these four assets comprise has been set at 10 years. The
total depreciation taken at the straight line rate, which is used for purposes of testing and comparison, cannot
therefore exceed $3,600 (the 100 straight line depreciation rate times the total basis.)
This taxpayer has the following alternatives:
He may sub-group the items in the class according to the method of depreciation used and change the lives
to achieve a 10-year weighted average life. One such shift might be as follows:
Basis less
salvage
Life Used
Straight line
depreciation rate
Straight line
depreciation
Actual depreciation taken
Machines A & B
$13,000
lMff>
$1,820
7-1/7 years
$1,820
Machines C & D
Basis
$21,000
12 years
8-1/3*
$1,7^9
$2,89*4-
$3,569
Total
$k,7lk
Alternatively, this taxpayer may change his item lives to achieve a 10-year weighted average life . One shift
might be as follows:
Basis less
Straight line
Straight line
Actual deprecsalvage
Life Used
depreciation rate
depreciation
iation taken
Machine A
$9,000
10 years
10$
$900
$900
Machine B
k,000
5 years
200
800
800
Machine C
Basis
6,000
15 years
Machine D
15,000
10 years
Total
6 2/30
100
1*00
583
1__00
2,600
$3,600
$M83
CD
TREASURY DEPARTMENT
WASHINGTON, D.C.
CAUTION:
FOR RELEASE AT 6:30 P.M. (E.D.T.)
WEDNESDAY, JULY 11, 1962
^
The attached documents MUST BE HELD IN STRICT CONFIDENCE
and are not to be circulated in any form, oral or written,
until release time.
No portion, synoposis, or intimation of
their contents may be given out, broadcast, or published UNTIL
RELEASE TIME.
The same caution applies to all newspapers,
magazines, newsletters, radio and television commentators and
broadcasters, both in the United States and abroad.
July 10, 1962
Effect of new guideline lives set forth in Part I of Revenue Procedure
62-21 on cash flow and depreciation claimed in major industries
Revenue Procedure 62-21 will stimulate business activity and reduce
the cost and complexity of tax depreciation accounting. Reduction in
depreciable lives achieved by the guidelines in Part I will result in
more realistic recognition of obsolescence and changing market conditions.
The objective test in Part II under which taxpayers can use lives below
the guidelines and the simplification of the administration of depreciation deductions, achieved by Part II will reduce accounting costs
and technical difficulties experienced by businesses in past years.
Schedules of appropriate reserve ratios contained in Part III will
provide an objective measure of the consistency of replacement practices
and depreciable lives used for.tax purposes.
The Tables attached illustrate the immediate benefits which the
business community will obtain from greater recognition of obsolescence in the new guideline lives under Part I of the Revenue Procedure.
No attempt is made to assess the benefits to the business community
and the savings in tax administration which will arise from Parts II
and III of the Procedure. The figures shown indicate a first full •
year effect which pertains to depreciation claimed on tax returns .due
to be filed in the twelve month's after the publication of the
Procedure.
TABLE I. Potential increases in depreciation under new guideline
lives set forth in Part I of Revenue Procedure 62-21 (excluding
:
buildings).
[
— — — —
As shown in Table I, under established procedures for determining
the depreciable lives of property it is estimated that $27.3 billion
of depreciation would be claimed on 1962 tax returns filed by corporate
and non-corporate businesses. Proper recognition of obsolescence
caused by rapidly changing technology, product innovation, increasing
foreign competition, and the. increasing extent to which single pieces
of equipment are functionally tied to systems of production, will increase the amount of -depreciation claimed for tax purposes substantially above the $27.3 billion level. Using new guidelines specified
by Part I of Revenue Procedure 62-21 that recognize such increases in
obsolescence, it is estimated that the depreciation claimed on 1962
tax returns will potentially increase by about $^.7 billion or
approximately 17 percent on depreciable equipment and structures
(excluding buildings). The increase will be somewhat larger for
corporate business than for non-corporate business where less
- 2 -
stringent auditing control already has permitted taxpayers to make" use
of somewhat shorter depreciable lives on depreciable property than is
typical of the corporate business sector.
It should be emphasized that the $4.7 billion represents only a
potential and not the actual increase which may realistically be
expected in tax deductions. Same businesses may feel that the lives
which they use to depreciate property are already adequate. Some
may feel that their earnings position will not absorb the additional
depreciation charges, associated with shorter depreciable lives.
Therefore some businesses will not elect to make use of the shorter
depreciable lives to the full extent permitted by the new guidelines.
For this reason it is estimated that some 15 percent of the available
potential increase in depreciation will not be elected by taxpayers.
Moreover some businesses will not have sufficient taxable income to
fully absorb the increases in depreciation that will be permitted
under the new guidelines. As a consequence an additional 15 percent
of the potential increase in depreciation will not affect tax liabilities during 1962, although carry-forward and carry-back provisions
may affect tax liabilities in other years. Adjustment of the $4.7 billion potential increase in depreciation to take into account these
situations will reduce the amount of additional depreciation claimed
on taxable returns to about $3.k billion. At effective marginal tax
rates this produces a reduction in business tax liabilities (disregarding feedback effects) of about $1.5 billion from the levels that would
apply using existing depreciable life formulae.
Feedback effects produced by the increase in tax depreciation
claimed are the favorable effects on the level of gross national product,
national income, and the revenue base that will be produced by the more
favorable economic and psychological climate for investment. Feedback
effects will result from the decrease in depreciable lives as increased
cash flow, shortening of the pay-out period, and resulting reductions
in investment risk stimulate new investment. Increased investment will
raise the rate of growth, the level of profits, and the associated
revenue yield at a given level of tax rates. Most observers therefore
believe that any temporary tendency towards a revenue loss from realistic depreciation will be offset because of the stimulus to growth.
Moreover, the favorable psychological impact resulting from the more
realistic recognition of obsolescence will assure an especially prompt
and positive effect on businessmen's decisions to invest resulting in
substantial and immediate feedback effects.
It should be noted that the $1.5 billion reduction in current tax
liabilities accorded businesses recognizes a legitimate expense of business. The Revenue Procedure requires each business to Justify its depreciation claims by a consistent replacement of assets in conformity with
the depreciable life by demonstrating through its maintenance of an appropriate depreciation reserve against its investment that its replacement
of equipment corresponds to the depreciable life claimed.
CO
- 3TABLE II. Comparison of standards under Bulletin "F", the new guideline lives set forth in Part I of Revenue Procedure 62-21, and current
practice.
Table II indicates how the new guideline standards compare with
standards set forth in the 19^2 Bulletin "F"; in addition, the table
indicates the extent to which new guidelines will liberalize lives
used to depreciate production machinery and equipment owned by manufacturing corporations surveyed in the Treasury Depreciation Survey.
The new guideline lives set forth in Part I of the Revenue
Procedure 62-21 are generally about one-third shorter than the 19-year
average in Bulletin MF". The new guidelines provide forty percent
or more reduction of lives for Aerospace, Apparel, Chemicals, Fabricated
metal products, Lumber and wood products, Nonferrous metals, Professional
and scientific instruments, Railroad equipment, Stone and clay products,
Ship and boat building, and Textile products industries.
The new guideline lives are about 15 percent shorter than the
average lives now used by larger corporations. More than one-third
of the manufacturing industries shown in Table II will receive new
guideline lives more than 20 percent below the average life presently
used for depreciation purposes.
It is important to note that the shorter guidelines provided by
Part I do not fully reflect the increased flexibility of depreciation
in response to faster modernization and replacement under Parts II
and III of the Procedure. Many taxpayers who have demonstrated their
need for shorter depreciable lives will continue to use lives shorter
than specified by the new guidelines and taxpayers will be permitted
to demonstrate their need for shorter lives in future years both on
the facts and circumstances in each individual case and on the basis
of their reserve ratios. This implies that the new average depreciable
life under future practice will be somewhat below the guideline lives
which are set forth in Part I of Revenue Procedure 62-21.
The average life of production machinery and equipment reported
in the Treasury Depreciation Survey in 1959 was 15*2 years. The effect
of the new guideline lives set forth in Part I of Revenue Procedure 62-21,
will be to reduce the average life for those corporations to approximately
12 years. This average life is somewhat below the average of new guidelines
as some taxpayers have already justified even shorter lives than the new
guidelines and will continue to use those shorter lives. The effective
percentage reduction in lives for Treasury Survey corporations is therefore
21 percent.
- kTABLE III. Estimated reduction in current tax, liabilities (withoutfeedback effects) under the -new guideline lives set forth in Part I
of Revenue Procedure 62-21.
Table III shows the estimated distribution of the total
$1,250 million reduction in tax liabilities of corporate businesses
(without feedback effects) among major users of depreciable property.
Manufacturing industries will receive some $7^0 million in benefits,
reflecting an increase of about 17 percent in the total depreciation
claimed by those industries (including depreciation claimed on
buildings).
TABLE IV. Estimated reduction in current tax liabilities (without
feedback effects) under new guideline lives set forth in Part I of
Revenue Procedure 62-21"!
Table IV parallels Table III and presents a distribution of
the estimated reduction in tax liabilities (without feedback effects)
for all businesses, including both corporate and non-corporate, by
major industry division.
A total reduction in tax liabilities of $750 million will apply
to manufacturing businesses, with further amounts of $190 million
applying to assets in the transportation industry, and $150 million
applying to trade.
The percentage increase in total depreciation claimed (including
depreciation claimed on buildings) is also shown and shows that in
relation to all depreciation claimed by business on equipment and
buildings the $4.7 billion increase will result in an over-all
percentage increase of 13.
Office of the Secretary of the Treasury
Office of Tax Analysis
J4
Table I
Potential increases in depreciation under new guideline lives set
forth in Part I of Revenue Procedure 62-21 (excluding buildings)*
Full year' effect at 1962 levels
(Money amounts in billions of dollars)
: businesses
Depreciation deductions, present law
27-3
19.7
Percentage increase in depreciation
7.6
150 1/
Potential increase in depreciation
under new guidelines
4.7
3.6
1.1
Estimated reduction in current tax
liabilities,which is not equivalent to
reduction in revenues because of feedback effects 2/
1-5
1.2
0.3
Office of the Secretary of the Treasury,
Office of Tax Analysis
July 10, 1962
l/ The new guidelines will result in less increase in depreciation
for noncorporate as compared to corporate business because noncorporate depreciation practices have not been subject to the
auditing control typical of corporate practice.
2/ The shorter depreciable lives will produce a favorable impact on
the level of gross national product, national income, and the
revenue base by creating a more favorable economic and psychological
climate for investment. These feedback effects will result as
increased cash flow, shortening of the payout period, and resulting
reduction in investment risk stimulate new investment. Increased
investment will raise the rate of growth, the level of profits,
and therefore the revenue yield at a given level of tax rates.
Increases in business taxes and increases, in other taxes associated
with higher levels of growth will thus offset the reduction in current tax
liabilities shown in the table. Most observers therefore believe that any
temporary tendency towards a revenue loss from realistic liberalization
of depreciation will be offset because of the stimulus to growth.
Moreover, the favorable psychological impact resulting from the more
realistic recognition of obsolescence will assure an especially prompt and
positive effect on businessmen's decisions to invest, resulting in
substantial and immediate feedback effects.
The reduction in current tax liabilities is also smaller than might be
expected on the basis of the potential increase in depreciation because
some taxpayers will not elect to use guideline lives and some taxpayers
using guideline lives will not have taxable income in 1962.
Table II
Coaparisoo of standards under Bulletin "F", new guideline lives set forth in
Itert I of Revenue Procedure 62-21, and current practice
Production Machinery and equipment
Treasury Survey Corporations
Manufacturing industry
Aerospace
Apparel and fabricated textile products
Chemicals sad allied products
Electrical equipaent
Electrical equipment
Electronic equipment
Fabricated aetal products
Pood and kindred products
Beverages
Dairy products
Grain and mill products
Meat products
Sugar and sugar products
Vegetable oil products
Other food products
Liafcer, wood products, and furniture
Machinery except electrical machinery,
aetal working Machinery and transportation
equipment
Metal working machinery
Motor vehicles and parts
Paper and allied products
Pulp and paper
Paper finishing and converting
Betroleua and natural gas
Drilling, geophysical and field services only
Exploration, drilling and production
tetroleon refining
Marketing
Primary metals
ferrous metals
Hbnferrous metals
Printing and publishing
Professional, scientific and controlling
instruments j photographic and optical
equipsent; watches and clocks
Railroad equipsent
R_>ber, leather and plastics products
leather and leather products
Plastics products
Rubber products
Ship and boat building
Stone, clay and glass products
Cement
Glass products
Stone and clay products except cement
Textile aill products
Knitwear
Spun, woven or process yarns and fabrics
Spinning, weaving and processing
Finishing and dyeing
Tobacco and tobacco products
Other manufacturing
ALL MAHUFACTURIHG
Hew
guidelines
(years)
Bulletin "F"
ccaposite
(years)
Decrease
from aidpoint of
Bulletin "F"
to the nev
guidelines
(percent)
Actual
present
practice
Decrease froa
pare sent
practice
to the nev
guidelines
(percent)
15 1/
15-30 *
15-22
8
9
11
*7
60
1*0
10
15
13
ko
17-20
12
8
12
35)
15
33
4)
k3
16
25
25
29
21
33
38)
28)
26)
*3
13
13
19
15
12f-to
10-25
12
12
17
12
18
18
12
10
10-28
17-20
15-2a_/
12
12
12
37
35
31
15
16
Ik
20
25
1*
17-28
15-22
16
12
291
35)
19
21
5-10*
5-25*
15-30 *
10-33*
6
Ik
16
16
20)
7)
29
26
16
13
19
18
16
11
17-30 *
10-25
18
Ik
11 •
28)
ko)
37
23
22
16
32
17-25
25-28
12
12
*3
55
15
16
20
25
15
U
11
Ik
12
27>
15
13
18)
*7
19
37
11)
7)
1*6)
19
16
15 -ko *
20
Ik
15
15
9
ko
)
)
)
)
17
18
kk6/
~
17
Ik
15
12
1*
4
1*1-28
13-20 2/
lfc-20
18-25
17-20
28-30
25
25
25
4 ,
17_/
20-25
20-25
15
)
15)
12)
15
12
13
25 5/(
)
15-20
(
4
19
Office of the Secretary of the Treasury
Office of Tax Analysis
4
32
15
8 '
8
U
20
17
5*
38
16
4)
Ik
20
•
15**
Ly 10. L9c2
** The average life of production machinery and equipment reported in the Treasury Depreciation Survey in 1959 -^s 15-2 years.
The effect of the new guideline lives set forth in Part I of Revenue Procedure 62-21, will he to reduce the average life for
those corporations to approximately 12 years. This average life is somewhat below the average of new guidelines as some taxpayers have already justified even shorter lives than the new guidelines and will continue to use those shorter lives. The
effective percentage reduction in lives for Treasury Survey corporations is therefore 21 percent.
1/
2/
3/
5/
Except smsll tools ^-5 years.
Kegs, cases, bottles ^-10 years.
Social jigs, dies, patterns 3 - years,
Except the mold account 3 years.
;
o
*
t
Except rayon with a ccnrposite life of 16 ye?rs.
Bulletin T " compared vith an average guideline of Ik years
Iters Hires only.
Ho Bulletin "P" life.
Table III
Estimated reduction in current tax liabilities (without feedback *- ~
effects) under new guideline lives set forth in Part I
of Revenue Procedure 62-21 l/
Pull year effect at 1962 levels
Corporations
~~" : Percentage ;
Industry
: increase in: Reduction in tax
: depreciation:
liability
^deductions 2/. (millions)
Manufacturing: Total
Apparel
Beverages
Chemicals and allied products
Electrical machinery
Fabricated metals products
Food and kindred products
Lumber and wood products
Machinery, except electrical
Metalworking machinery
Motor vehicles
Other manufacturing
Paper and allied products
Petroleum production and refining
Primary metals products
Printing
Professional and scientific equipment
Rubber, leather, and plastics
Stone, clay and glass
Textile mill products
Tobacco products
Transportation equipment except motor vehicles
Nonmanufacturing: Total
Air transportation
Electric and gas utilities
Railroad transportation
All other
Office of the Secretary of the Treasury,
Office of Tax Analysis
* Less than $5 million.
See footnotes next page.
IT 3/
Ik
7
20
16
20
Ik
Ik
9 V
Ik
12
17
27
16
25 .
ik
$jko
*
10
no
30
ko
50
20
20
10
ko
10
60
120
120
20
7
*
12
20
Ik
10
Ik
10
ko
20
19
19
510
20
120
70
300
8
3^
20
•*
10
July 10,1962
Table III
Footnotes
l/ The shorter depreciable.lives will produce a favorable impact on the
level of gross national product, national income, and the revenue
base by creating a more favorable economic and psychological climate
for investment. These feedback effects will result as increased cash
flow, shortening of the payout period, and resulting reduction in
investment risk stimulate new investment. Increased investment will
raise the rate of growth, the level of profits, and therefore the
revenue yield at a given level of tax rates. Increases in business
taxes and increases in other taxes associated with higher levels of
growth will thus offset the reduction in current tax liabilities
shown.in the table. Most observers therefore believe that any
temporary tendency towards a revenue loss from realistic liberalization
of depreciation will be offset because of the stimulus to growth.
Moreover, the favorable psychological impact resulting from the more
realistic recognition of obsolescence will assure an especially prompt
and positive effect on businessmen's decisions to invest, resulting
in substantial and immediate feedback effects.
g/ Percentage increase in total depreciation claimed by the industry
including depreciation on buildings.
3/ The corresponding percentage increase in depreciation for property
other than buildings is 22 percent. The 22 percent figure is comparable
with the 18 percent figure for corporate business in Table I; the
IT percent figure shown in this Table is not comparable.
kj This percentage increase excludes leased equipment owned by
"~ machinery manufacturers for use by other businesses. The percentage increase in depreciation for this industry is somewhat
smaller than in other industries primarily involved in metalworking and assembly because the industry has had an extremely
liberal depreciation policy on small tools, dies, and fixtures
which do not receive any additional recognition of obsolescence
under the proposed guideline.
Table IV
Estimated reduction in current tax liabilities (without
feedback effects) under new guideline lives set forth in
Part I of Revenue Procedure 62-21 l/ Full year effect
Industry 2/
58
Total
:
Corporate
Percentage :
: Percentage :
increase in Reduction: Increase in deduction
depreciation : in tax depreciation : in tax
deductions 3/:liabilitydeductions 3/:liability
(millions)
(millions)
$ 90
Agriculture
13
Construction
11
ko
Electric, gas, and sanitary
120
services
8
Finance, insurance, and real
1*0
estate
5
Manufacturing (including crude
petroleum production)
16
750
Mining (except extraction of
1*0
crude petroleum) k/
29
Services
10
80
2k
190
Transportation
Wholesale and retail trade
12
150
$1,500
Total
13 5/
Office of the Secretary of the Treasury, Office of Tax Analysis
12
10
$ 10
20
8
120
5
30
17
7^0
30-
ko
ko
9
25
11
160
90
$1,250
lk 5/
:
July 10, 1962
l/ The shorter depreciable lives will produce a favorable impact on the level of
~~ gross national product, national income, and the revenue base by creating_a
more favorable economic and psychological climate for investment. These feedback effects will result as increased cash flow, shortening of the payout period,
and resulting reduction in investment risk stimulate new investment. Increased
investment will raise the rate of growth, the level of profits, and therefore
the revenue yield at a given level of tax rates. Increases in business taxes
and increases in other taxes associated with higher levels of growth will thus
offset the reduction in current tax liabilities shown" in the table. Most observers therefore believe that any temporary tendency towards a revenue loss
from realistic liberalization of depreciation will be offset because of the
stimulus to growth. Moreover, the favorable psychological impact resulting
from the more realistic recognition of obsolescence will assure an especially
prompt and positive effect on businessmen's decisions to invest, resulting in
substantial and immediate feedback effects.
2/No estimates are shown for the communications industry. The depreciation guidelines
for telephone and telegraph companies will remain at present levels. Depreciation
guideline lives for the radio and television broadcasting Industry are shorter than
present practice, but the estimated revenue cost is less than $5 million.
3/Percentage increase in total depreciation claimed by the industry, including
depreciation claimed on buildings.
^/Non-corporate mining establishments will obtain some reduction in tax liabilities,
~" but the estimated revenue cost is less than $5 million.
5/The percentage increase in depreciation for property other than buildings that
corresponds to this 13 percent figure is the 17 percent figure for all businesses
shown in Table I. Similarly the 18 percent increase in depreciation on property
other than buildings shown in Table I for corporate business corresponds to the
Ik percent shown in this Table.
Comparison of depreciation deductions, initial and investment
allowances for industrial equipment in leading industrial
countries with similar deductions and allowances in
the United States
This table compares depreciation practice in the United
States with practice in several leading industrial countries.
The table indicates the proportion of the cost of an asset
that may be charged against income in the first, the first two,
and the first five years, considering depreciation deductions
under allowable methods and lives, initial allowances, and
investment allowances or credits. The table indicates that
new depreciation guidelines will provide a sufficient increase
in depreciation charges to reduce the difference between
United States and foreign practice by about a third. With
the passage of the pending investment credit of 7 percent
the deductions permitted under United States practice will
be close to the levels permitted in other countries.
Comparison of* depreciation deductions, initial and Investment allowances1 fop Industrial equipment in leading industrial countries with similar
deductions and allowances in the United States
"depreciation deductions, initial and investment allowances (percentage of cost
of asset)
___
First year First 2 years First 5 years
45.0
Belgium
«
, ..
22.5
92.5
44.0
Canada. . . . . . . . . . •. . • . . .
30.0
71.4
43.8
France
. • • . . . • . • • .
• . . •.
25.0
76.3
36.0
West Germany
. . . . . . • • . • • • . . • . . .
20.0
67.2
50.0
Italy
......."...•...'
25.0
100.0
Japan . . . . . . . . . .............
- . .. . . .
68.2
Netherlands
. . . . . . . . . . . . . . .... .
85.6
Sweden
100.0
30.0
United Kingdom. . . . . . . . . . . . . . .
64.0
39.0
10.5
.9
42.7
United States:
24.*!
13-3
51.1
Without investment credit and lives oft
28.4
2
15.4
56.6
19 years (Bulletin F weighted average). . . . . . .
30.6
16.7
59.8
15 years (present practice under Bulletin P) . . . .
24.5
33.9
56.7
13 years (new guideline average) . . . . . . . . . .
65.1
27.3
12 years {anticipated practice under new guidelines)
70.6
29.4
With 1% investment credit and lives of i
CD
73.8
30.7
19 years (Bulletin F weighted average) . . . . . . .
I_l
15 years
44.6 on the
The 13
deductions
have been computed
years . .and
. . allowances
. . . . . . . for
. . each of the foreign
. . countries
.
assumption
that the
qualifies
special
allowances or deductions permitted.
12 years
. . investment
.....".
. . . . . fully
. . .for
. .any
• •.
•e
The deductions in the United States have hmmn determined under the double-declining balance depreciation method, without regard to the limited first-year allowances for small business.
2pQr purposes of this table, the 7 percent investment credit has been considered as equivalent
to a 14 percent investment allowance. For corporations subject only to the 30 percent normal tax
it is equivalent to an Investment allowance of 23 percent.
Si
8:
8:
m
13
B'Jl maob e&rf aotimttzfctUiGS mxtT .noJiSl&mmjams rc$ld:ro? sot:***"? at
rafifri;. *®ol#t n&l^B'iosvqftb aid* ^ aoi$®imm%^m efetew j?aq
lliw mm^m:}
::
mm eqorf f &.& <83»3gBo3 mdt mi"y soi- jetm aal:r:>«
.iJ_Bfe?3 •sammo??--^! ®m no .ttmk3*m eX^trnM^ mtfm$ *:&*
r* *
-9in meeting foreign competition.
The Administration has done its
part with the completion of this depredation reform* Further
action imist come from the Congress, and I hope that Congress will
soon take favorable action on the investment credit*
0O0
-8so far as tax treatment of investment is concerned.
The percentage of first-year cost recovery on investment in the
United States is now only a little more than thirteen percent.
Because of special tax incentives for new investment granted by our
nine friendly major industrial competitor nations, the average firstyear recovery in those countries is twenty-nine percent -- more than
twice our current figure. With this new revision, our percentage will
rise to 16.7 percent - but still far short of equality. If, however,
we couple the proposed seven percent investment credit with the depre
ciation revision, this picture will change sharply. Our average
percentage first-year cost recovery would then climb to 30.7 percent
higher than the average of the nine other nations and above the actua
cost recovery allowed in all but two, Japan and the United Kingdom.
That is why we recommended the credit — because we believe it
imperative to give American producers every legitimate assistance
in meeting
?1
-7ever-rising cost, while the cash it retained through depreciation
was based on the cost of its outworn assets* The "gap" is obviously
hard to measure* but such important business organizations as the
Machinery and Allied Products Institute have placed it at $5 to $8
billion a year.
Our new depreciation guidelines are not based on any estimate
of the effects of inflation on replacement costs — nor could they
be under existing law, even if we thought such a policy desirable.
i
But the fact is that our depreciation reform standing alone, goes
much of the way toward closing the so-called "depreciation gap".
Coupled with the investment credit, now pending before the Senate
Finance Committee, the reform will close the gap entirely, because
the depreciation equivalent of the credit is $2.9 billion.
This Is not, however, the only reason why enactment of the credit
is essential* Depreciation reform, important as it is, will not put
American business on a comparable footing with Its foreign competitor
-6In contrast, the increased annual depreciation charges resulting from
enactment of accelerated depreciation in 1954 had — after seven
years — reached only $2.3 billion by last year.
The $3.4 billion potential increase in depreciation charges will
mean a reduction in business tax liabilities, in the first year, of
$1*5 billion. But this is a gross figure* A very substantial part,
if not ail, of this sum will be recouped promptly by the government
i
as higher depreciation charges increase the flow of cash to corporation!
and this money finds its way directly into new investment, thus
creating jobs and taxable Income for business and individuals.
The potential $4.7 billion in increased depreciation charges
for business is also interesting when viewed in another light —
namely, the extent to which it closes the so-called "depreciation
gap". This "gap" was caused by the inflation of years past which
meant that business had to replace its machinery and equipment at
ever-rising cost,
7C
-5two-thirds of all the depreciable assets ih manufacturing.
In actual practice, we anticipate that these same companies will
be able to take faster depreciation than that provided in the new
guidelines. As a result, the depreciable lives they will actually
use are expected to be twenty-one percent shorter than those in use
now. /
More rapid depreciation than presently taken will be immediately
allowed under the new guidelines on seventy to eighty percent of th
assets in use by American business today.
For all of our 12,000,000 corporate and non-corporate businesses,
we estimate that the potential increase in annual depreciation char
under the new guidelines will amount to seventeen percent, or a tot
of $4.7 billion, in the first year. Because some businesses operate
at a loss, and others may not choose to make immediate full use of
the new guidelines, we estimate that the additional depreciation
claimed on taxable returns in the first year will be $3.4 billion*
•4that depreciation reform is not something that, once accomplished,
is valid for all time. It reflects an administrative policy dedicate
to a continuing review and up-dating of depreciation standards and
procedures to keep abreast of changing conditions and circumstances.
The experience under the new guideline lives, industry and asset
classifications, and administrative procedures, will be watched
carefully with a view to possible corrections and improvements.
Periodic reexamination and revision will be essential to maintain
tax depreciation treatment which is in keeping with modern industria
practices.
This depreciation revision will bring meaningful and lasting
benefits to all of American business, agriculture, and mining.
The new guideline lives average thirty-two percent shorter than
those established in Bulletin "F". More significantly, they are —
as our Treasury depreciation survey showed •— fifteen percent shorte
than the lives in actual use by 1,100 large corporations which hold
r>>
-3to the welfare of business, but to the welfare of every American
citizen.
Our depreciation practices have not been realistic for a great
many years. Based essentially on taxpayers* past replacement
practices, they have Inadequately reflected the fast-moving pace of
economic and technological change*
The new depreciation guidelines correct this fundamental flaw
and the new rules for application of the guidelines recognize that
economic obsolescence is a continuing factor in business life which
our tax administration must take fully into account. The rate of
depreciation permitted under the rules will not be tied to past
history — it is tied to concurrent adoption of replacement practices
consistent with the lives which are claimed for tax purposes.
The guidelines will not be allowed to become outdated — as was
the case for so long with Bulletin "F", which the new guidelines
replace. Our revision of depreciation guidelines and rules recognize*
that depreciation
QQ
-2The reform we have achieved fully meets — while in no way
exceeding -- the requirement of existing law that reasonable
allowances be given for depreciation.
Depreciation has been a major problem of United States tax
policy for decades* As a deduction used in determining the taxable
income of a business, It directly affects the rate of recovery of
invested capital. For that reason, it plays a vital role in business
investment decisions --a major factor in determining a nation's
rate of economic growth. Faster economic growth is essential if we
are to reduce unemployment and provide jobs for the millions of
workers coming into the labor force. Equally important, the investment level is closely related to productivity^ Hence plays an important part in determining the competitive/position of Dhited States
producers in world markets. We must be competitive if we are to
reduce our balance of payments deficit and stem the drain on our
gold stocks. Depreciation rates are/therefore, important not only
that • ''.»tiOB._i
CQ
STATEMENT *Y THE HONORABLE DOUGLAS DILLON
SECRETARY OF THE TREASURY
ON THE ISSUANCE OF THE NEW
DEPRECIATION GUIDELINES AND RULES,
WEDNESDAY, JULY 11, 1962, 11:00 A*M*
The new guidelines and procedures for determining depreciation
on machinery and equipment used by ail American business constitute
a fundamental reform in the tax treatment of depreciation that will
provide a major stimulus to our continued economic growth.
This reform culminates a year of intensive study and work on
the part of the Treasury with cooperation and assistance every step
of the way by the Internal Revenue Service, substantial help from
other government agencies, and advice from countless businessmen,
their lawyers, engineers and accountants*
Successful completion of the job required us to examine the
depreciation practices, present and prospective rates of economic
obsolescence and the pace of technological change in American industry
and in industry abroad. This enormous task has been completed with
the greatest possible speed.
TREASURY DEPARTMENT
Washington
CAUTION: FOR RELEASE AT 6:30 P.M. (E.D.T*) WEDNESDAY, JULY 11,1962
This statement MUST BE HELD IN STRICT CONFIDENCE and
is not to be circulated in any form, oral or written,
until release time. No portion, synoposis, or intimation
of its contents may be given out, broadcast, or published
UNTIL RELEASE TIME. The same caution applies to all
newspapers, magazines, newsletters, radio and television
commentators and broadcasters, both in the United States
and abroad.
STATEMENT BY THE HONORABLE DOUGLAS DILLON
SECRETARY OF THE TREASURY
ON THE ISSUANCE OF THE NEW
DEPRECIATION GUIDELINES AND RULES,
WEDNESDAY, JULY 11, 1962, 11:00 A.M.
The new guidelines and procedures for determining depreciation
on machinery and equipment used by all American business constitute
a fundamental reform in the tax treatment of depreciation that will
provide a major stimulus to our continued economic growth.
This reform culminates a year of intensive study and work on
the part of the Treasury with cooperation and assistance every step
of the way by the Internal Revenue Service, substantial help from
other government agencies, and advice from countless businessmen,
their lawyers, engineers and accountants.
Successful completion of the job required us to examine the
depreciation practices, present and prospective rates of economic
obsolescence and the pace of technological change in American
industry and in industry abroad. This enormous task has been
completed with the greatest possible speed.
The reform we have achieved fully meets — while in no way
exceeding -- the requirement of existing law that reasonable
allowances be given for depreciation.
Depreciation has been a major problem of United States tax
policy for decades. As a deduction used in determining the taxable
income of a business, it directly affects the rate of recovery of
invested capital. For that reason, it plays a vital role in
business investment decisions -- a major factor in determining a
nation's rate of economic growth. Faster economic growth is
essential if we are to reduce unemployment and provide jobs for
the millions of workers coming into the labor force. Equally
important, the investment level is closely related to productivity,
hence plays an important part in determining the competitive
D-539
7i
- 2 position of United States producers in world markets. We must be
competitive if we are to reduce our balance of payments deficit and
stem the drain on our gold stocks. Depreciation rates are,
therefore, important not only to the welfare of business, but to
the welfare of every American citizen.
Our depreciation practices have not been realistic for a great
many years. Based essentially on taxpayers' past replacement
practices, they have inadequately reflected the fast-moving pace of
economic and technological change.
The new depreciation guidelines correct this fundamental flaw
and the new rules for application of the guidelines recognize that
economic obsolescence is a continuing factor in business life/which
our tax administration must tfake fully into account. The rate of
depreciation permitted under the rules will not be tied to past
history — it is tied to concurrent adoption of replacement
practices consistent with the lives which are claimed for tax
purposes.
The guidelines will not be allowed to become outdated --as was
the case for so long with Bulletin "F", which the new guidelines
replace. Our revision of depreciation guidelines and rules
recognizes that depreciation reform is not something that, once
accomplished, is valid for all time. It reflects an administrative
policy dedicated to a continuing review and up-dating of
depreciation standards and procedures to keep abreast of changing
conditions and circumstances. The experience under the new
guideline lives, industry and asset classifications, and
administrative procedures, will be watched carefully with a view
to possible corrections and improvements. Periodic reexamination
and revision will be essential to* maintain tax depreciation treatment which is in keeping with modern industrial practices.
This depreciation revision will bring meaningful and lasting
benefits to all of American business, agriculture, and mining.
The new guideline lives average thirty-two per cent shorter
than those established in Bulletin "F". More significantly,
they are — as our Treasury depreciation survey showed — fifteen
per cent shorter than the lives in actual use by 1,100 large
corporations which hold two-thirds of all the depreciable assets
in manufacturing.
In actual practice, we anticipate that these same companies
will be able to take faster depreciation than that provided in the
new guidelines. As a result, the depreciable lives they will
actually use are expected to be twenty-one per cent shorter than
those in use now.
- 3More rapid depreciation than presently taken will be immediately
allowed under the new guidelines on seventy to eighty per cent of
the assets in use by American business today.
For all of our 12,000,000 corporate and non-corporate businesses,
we estimate that the potential increase in annual depreciation
charges under the new guidelines will amount to seventeen per cent,
or a total of $4.7 billion, in the first year. Because some
businesses operate at a loss, and others may not choose to make
immediate full use of the new guidelines, we estimate that the
additional depreciation claimed on taxable returns in the first
year will be $3.4 billion. In contrast, the increased annual
depreciation charges resulting from enactment of accelerated
depreciation in 1954 had — after seven years — reached only
$2.5 billion by last year.
The $3.4 billion potential increase in depreciation charges will
mean a reduction in business tax liabilities, in the first year, of
$1.5 billion. But this is a gross figure. A very substantial part,
if not all, of this sum will be recouped, promptly by the government
as higher depreciation charges increase the flow of cash to
corporations and this money finds its way directly into new investment, thus creating jobs and taxable income for business and
individuals.
The potential $4.7 billion in increased depreciation charges
for business is also interesting when viewed in another light —
namely, the extent to which it closes the so-called "depreciation
gap". This "gap" was caused by the inflation of years past which
meant that business had to replace its machinery and equipment at
ever-rising cost, while the cash it retained through depreciation
was based on the cost of its outworn assets. The "gap" is obviously
hard to measure, but such important business organizations as the
Machinery and Allied Products Institute have placed it at $5 to
$8 billion a year.
Our new depreciation guidelines are not based on any estimate
of the effects of inflation on replacement costs — nor could they
be under existing law, even if we thought such a policy desirable.
But the fact is that our depreciation reform standing alone, goes
much of the way toward closing the so-called "depreciation gap".
Coupled with the investment credit, now pending before the Senate
Finance Committee, the reform will close the gap entirely, because
the depreciation equivalent of the credit is $2.9 billion.
This is not, however, the only reason why enactment of the
credit is essential. Depreciation reform, important as it is,
will not put American business on a comparable footing with its
foreign competitors so far as tax treatment of investment is
concerned.
7?
_ 4 The percentage of first-year cost recovery on investment in
the United States is now only a little more than thirteen per cent.
Because of special tax incentives for new investment granted by our
nine friendly major industrial competitor nations, the average
first-year recovery in those countries is twenty-nine per cent —
more than twice our current figure. With this new revision, our
percentage will rise to 16.7 per cent — but still far short of
equality. If, however, we couple the proposed seven per cent
investment credit with the depreciation revision, this picture
will change sharply. Our average percentage first-year cost
recovery would then climb to 30.7 per cent — higher than the
average of the nine other nations and above the actual cost
recovery allowed in all but two, Japan and the United Kingdom.
That is why we recommended the credit — because we believe it
imperative to give American producers every legitimate assistance
in meeting foreign competition. The Administration has done its
part with the completion of this depreciation reform. Further
action must come from the Congress, and I hope that Congress will
soon take favorable action on the investment credit.
oOo
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 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 subje
to estate, inheritance, gift or other excise taxes, whether Federal or State, bu
are exempt from all taxation now or hereafter imposed on the principal or intere
thereof by any State, or any of the possessions of the United States, or by any
local taxing authority. For purposes of taxation the amount of discount at which
Treasury bills are originally sold by the United States is considered to be in-
terest. Under Sections 454 (b) and 1221 (5) of the Internal Revenue Code of 1954
the amount of discount at which bills issued hereunder are sold is not considere
to accrue until such bills are sold, redeemed or otherwise disposed of, and such
bills are excluded from consideration as capital assets. Accordingly, the owner
of Treasury bills (other than life insurance companies) issued hereunder need in
clude in his income tax return only the difference between the price paid for su
bills, whether on original issue or on subsequent purchase, and the amount actua
received either upon sale or redemption at maturity during the taxable year for
which the return is made, as ordinary gain or loss.
Treasury Department Circular No. 418 (current revision) and this notice, pre-
scribe 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.
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.
Immediately after the closing hour, tenders will be opened at the Federal
Reserve Banks and Branches, following which public announcement will be made by
the Treasury Department of the amount and price range of accepted bids. Those
submitting tenders will be advised of the acceptance or rejection thereof. The
Secretary of the Treasury expressly reserves the right to accept or reject any
or all tenders, in whole or in part, and his action in any such respect shall be
final. Subject to these reservations, noncompetitive tenders for $ 200,000 or
JJJLJ
less for the additional bills dated April 19, 1962
, ( 91
days remain——————_—-i—_—_£____•_.•_—_________
ing until maturity date on
October 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 ten-
ders in accordance with the bids must be made or completed at the Federal Reserve
Banks on
July 19, 1962
, in cash or other immediately available funds or
p_5
in a like face amount of Treasury bills maturing
July 19, 1962
. Cash
7£
TREASURY DEPARTMENT
Washington
FOR IMMEDIATE RELEASE,
July 11, 1962
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 $ 2,000,000,000 , or thereabouts, for
$2$
cash and in exchange for Treasury bills maturing
July 19, 1962
, in the amount
of $1,801,436,000 , as follows:
91 -day bills (to maturity date) to be issued
"QHJT
July 19, 1962
m
,
~~
in the amount of $ 1,300,000,000 , or thereabouts, representing an additional amount of bills dated April 19, 1962
,
PJ£
and to mature
~
October 18, 1962 , originally issued in the
——w
amount of $ 600,309,000 , the additional and original bills
to be freely interchangeable.
182 -day bills, for $ 700,000,000 , or thereabouts, to be dated
TTO~
PSJT
July 19, 1962
3p^
, and to mature
January 17, 1963
^~S~j "
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, $50,000, $100,000, $500,000 and
$1,000,000 (maturity value).
Tenders will be received at Federal Reserve Banks and Branches up to the
Daylight Saving
closing hour, one-thirty p.m., Eastern^SDMaMtime,
Monday, July 16, 1962
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 of fered must be expressed on the basis of 100, with not more than three
t
7
C
7 '
TREASURY DEPARTMENT
WASHINGTON, D.C.
July 11, 1962
FOR IMMEDIATE RELEASE
7C
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
$ 2,000,000,000, or thereabouts, for cash and in exchange for
Treasury bills maturing July 19, 1962,
in the amount of
$ 1,801,436,000, as follows:
91-day. bills (to maturity date) to be issued July 19, 1962,
in the amount of $ 1,300,000,000, or thereabouts, representing an
additional amount of bills dated April 19, 1962,
and to
mature October 18, 1962, originally issued in the amount of
$600,309,000, the additional and original bills to be freely
interchangeable,
182-day bills, for $700,000,000, or thereabouts, to be dated
July 19, 19o2,
and to mature January 17, I963.
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. $50,000, $100,000, $500,000 and $1,000,000
(maturity value).
Tenders will be received at Federal Reserve Banks and Branch*8
up to the closing hour, one-thirty p.m., Eastern Daylight Saving
time, Monday, July 16, 1962.
Tenders will not be
received at the Treasury Department, Washington. Each tender must
be for an even multiple of $l,0Cf0, 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 acbompanied 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-540
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
April 19, 1962,
(91-days remaining until maturity date on
October 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 Banl<son July 19, 1962,
in cash or other immediately available funds or in a like face
amount of Treasury bills maturing July 19, 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 hew 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 Oode of 1954 the amount of discount at which bills issued
hereunder are sold is not considered to accrue until suoh 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 aotually received either upon
sale or redemption at maturity during
0O0 the taxable year for which the
return is made, as ordinary gain or loss.
Treasury Department Circular No. 4l8 (current, revision) and this
notice prescribe the terms of the Treasury bills and govern the
conditions
their Bank
issue.
Copies of the circular may be obtained frt
any Federal ofReserve
or Branch.
77
TREASURY DEPARTMENT
Washington
BMEDIATE RELEASE
D-541
FRIDAY, JULY 13, 1962
The Bureau of Customs announced today the following preliminary figures
showing the imports for consumption from January 1, 1962, to June 30, 1962,
inclusive, of commodities for which quotas were established pursuant to the
Philippine Trade Agreement Revision Act of 1955:
Commodity
: Established Annual
'
Quota Quantity
Unit
of
Quantity
Imports
as of
June 30, 1962
Buttons 680,000
Gross
Cigars 160,000,000
Number
5,477,698
Coconut oil 353,400,000
Pound
82,217,785
Cordage 6,000,000
Pound
2,231,360
Tobacco 5,200,000
Pound
4,276,544
115,735
TREASURY DEPARTMENT
Washington
IMMEDIATE RELEASE
D-541
FRIDAY, JULY 13, 1962
The Bureau of Customs announced today the following preliminary figures
showing the imports for consumption from January 1, 1962, to June 30, 1962,
inclusive, of commodities for which quotas were established pursuant to the
Philippine Trade Agreement Revision Act of 1955s
Commodity
' Established Annual
? Quota Quantity
Unit
of
Quantity
Imports
as of
June 30. 1962
Buttons 680,000
Gross
Cigars •• 160,000,000
Number
5,477,698
Coconut' oil..." 358,400,000
Pound
82,217,785
Cordage 6,000,000
Pound
2,231,360
Tobacco 5,200,000
Pound
4,276,544
115,735
cc
E-fiSJIAIS BSLCASS
FRIDAY, JULY 13.1962
D-542
ffiSU-SNAflf DAfA ON BffOR-S FCR CONSUMPTION OF UN_ANO?ACnnSD LEAD AND ZINC CHAttfTSaBLS TO IBS QUOTAS EST-BXiSEO
BY PSXSXDSHTIAJL fSOCU-ATION NO* 3257 <? SSPTSUBEa 22, 1958
(BiSSESL? 600? A PS8XQD •
April I - June 30, 1962
SSflSfS •
ApriI I - June 30, 1962
rfi-t 391
ITCH 392
8 Lead bullion or baa* bullion*
t
t load la pigs and bars, la**
t Lead-boaring eras, flus dast, t dross, reolaiasd lead, sera?
s
and sattas
: lead, antl_o>—lal lead, antlf
8
t aonlal so rap load, 1ype -ataj,
i
s all alloys or combinations of
tOtartarly-aiata
8:Quarterly
. Caota
t
lead n.s.p.f.
D»ort»
t Dutlabla Lead
Imports i Dutiable Lsad
(Pounds)
(pounds)
I
Country
of
Production
Australia,
10,080,000
10,030,000
23,680,000
"
ITEM 394
393
z
8
8
8
i Zino-baaring oras of all kinds, s Zlno In blocks, pigs, or slabs;
x except pyrites containing not s old snd wra-out zlno, fit
t
or* r y% of zlno
t only to bo reaaoufactursd, zino
t
s
dross, and zino ski-aings
i
___
t
:0_urtarly Quota
{{-arterly
Giota.
Bsoorts
% Dutiable Zins
Baports : By Sfelafct
(Pounds)"
(Pounds)
23,680,000
Sslgi&a Congs
5,440,000 5,^38,8i»7
BelgLun and
Luxaaborg (total)
7,520,000 7,520,000
Boll-la
Canada
5,040,000
4,058,996
66,480,000
13,440,000 13,Wo,000 15*920,000 15,920,000
66,^80,000
Italy
Mexioo
Pons
16,160,000
C_* So* -frlea
14,880,000
$,5*0,000
37,8*40,000
3,600,000
1,102,300
36,880,000
36,880,000
70,480,000 70,^80,000
6,320,000
6,3«6,«420
16,160,000
12,880,000
12,879,052
35,120,000 35,120,000
3»76o.ooo
3,759,515
m,880,000
m
Yugoslavia
All other forai&a
oouatrias (total)
37,840,000
6,560,000
15,7fc»«»
15,760,000
6,080,000
285,608
17,840,000
l?,8M0,000
6,080,000
6,030,000
The above country designations are those specified in Presidential Proclamation No*$257 of September 22, 1958. Since that date the names of certain
countries have been changed.--
CO
YSS&SU8X XT5MB3UZSS
fcafa__St$n, 0* Cm
XU-29XAXS m r i - t
FRIDAY, JULY 13,1962
7J
CO
D-542
raXLIMIKAai DATA ON IMPORTS TOR CONSUMPTION 0? CH-ANUFACTUISJ) IXAO AND ZINC CEABtSUBXS TO THE OCOTAS _STABLI__S3
BY fSSSXSSNTIAL FSOCU-AIION NO* 3257 07 S£PT__B2a 22, 1958
OHOTBLY ATOM. PgaiOD • April I -June 30, 1962
IMEOKfS <• April I - June 30, 1962
Country
of
Pro—aotioa
Australia
ITZH 391
rraf 392
*
8 Lead bullion or baas bullion,
>
8 lead in pigs and bars, le^d
i Lead-bearing ores, flus dast,x dross, reolaiaad lead, ssrap
t
and aattes
x lead, antisocial lead, antl^
*
t social sprap lead, t7P« -atal,
1
x all alloys or ooobinatlons of
A
•__
*
lead n.s.p.f.
:—i&rtarly Cuota
rOtartarly cuota.
t Dutlabla Lead
Imports : Dutlabla Lsad
Iaporta
(Pounds)"
"(Pounds)
10,080,000
10,030,000
23,680,000
rrz- 394
ITEM.J??,.
s
t
j
j
t Zlno-baaring eras of all kinds,: Zino ia blooks, pigs, or slabs;
t except pyrites containing not I old snd »orn-out zino, fit
t
orer 3^ of zino
x only to be reaanufactursd, xino
t
x
dross, and zlno akiaiings
i
.
:aiartarly Oiota
tCtarfcerly —iota
t Put Labia Zins
Bsports ; By
fr>ij?ht
Deports
'
(Pounds)
"*
(Pcnrrls)
23,680,000
Belgian Congo
5V«4O,00O
Belglun and
Luxsaburg (total)
7,520,000
Bolivia
5,040,000
Canada
13*440,000
t*,053,996
, |
'3» * io,ooo
Psru
14,160,000
16,160,000
OB* SO* -frlea
14,880,000
14,880,000
Yugoslavia
All etbar foreign
oouatriss (total)
6,5*o,oco
6,560,000
15,920,000
15,920,000
££,480,000
66,480,000
TH_ SQUAB OF CTSTOUS
37*840,000
37,340,000
3,600,000
1,102,300
36,880,000
36,880,000
70,480,000
70,430,000
£,320,000
6,316,420
12,880,000
'2,879,052
35*120,000
35,120,000
3s760sOOO
3,759,515
*5»76°»ooo
15,760,000-
6,080,000
283,608
17,840,000
17,840,000
The above country designation* are those specified in Presidential Proclamation No.'-3257 of September 22, 1953countrite have been changed.-
PSZ?_8Z3 H
7,520,000
4ft
Italy
-<• ZiOO
5,43a,84?
(,080,000
6,030,000
Since that date the names of certain
77
YflEASQBT QpMHtt-0
iMMngtyi* 0* C
X-USOIAYS
81
m > t t f
FRIDAY, JULY.'13, 1962
D-5^3
IBSLZMZMASf DATA, OK IMPORTS K R CONSTJMPTXOH OF UfflttKOPACTURSP LEAP ASP Z W C CHABfiSiBI.- TO TEE QUOTAS ESTABLISHES
BY PaZSrOSOTIAJ. PBOCLA-ATION KO* 3257 OJP SEPTEMBER 22, 1958
MASTERLY COOT- PERIOD • July I - September 30, 1962
IhHa
**** July I - July 6, 1962 (or as noted)
ITEM 392
s Lead bullion or base bullion*
8 load In pigs and bars, le<wl
L*ad«>boaring ores, fluo dast, 8 dross, raolaiasd lead, sosa?
and eattes
x lead, aatlnonlal lead, anti«x -onial sprap lead, type -ataj,
8 all alloys or combinations of
tx Quarts rly Oiota
lead n.s.p.f.
•
(__.rterly Quota
Iaoorta
Imports x Dutiable Lsal
Putlabia Lead
(Pounds)
(Pounds7
ITEM ^91
Country
of
Produotloa
Australia
10,080,000 5,901,165*
23,660,000
If-- 394
ITEM 393
8
t
8
*
t Zino-bsaring orss of all kinds, 8 Zlno la blooxs, pigs, or slt-s;
x except pyrites oontalning not 8
zlno, fit zino
8 old
onlysad
to worn-out
bo reaanufactursd,
x
ever 3 ^ of zino
" "skianlngs
"*
s " dross, and zlno
8
t<_artsrly -iota.
;Q;artarly
Qiota
i
.
Inoorts ; By
ffelgtat
Iatports
i Putlabia Zins
(Pounds)
(Pounds)
I l,H92.
5,440,000
Belgian Congo
Belglun and
Luxsaburg (total)
Bolivia
5,040,000
53,908*
Canada
13,440,000
11,280,282*
15,920,000
4,138,180*
66,480,000
66,480,000*
7,520,000
37»«40,000
4,960,72?
3,600,000
Italy
Mexico
Poru
16,160,000
Oh* So* Afrloa
14,880,000
6,560,000
36,880,000
1,318,750
70,480,000
2,000,459
6,320,000
12,880,000
314,326
35s*».ooo
1,933,605
3,760,000
15,7*0*000
1,560,679*
17,840,000
17,840,000
14,380,000
Yugoslovla
All othor forolpi
ooustrios (total)
7,520,000
6,560,000
6,080,000
•Imports through July 10, 1962.
The above country designition. are those specified in Presidential Proclamation No.'^257 of September 22, 1953.
countries have been changed. -
6,080,000
6,080,000
Since that date the names of certain
awuamamaam^awai^
*~o~ ~ ^ P
XM_—DXAYB Wff-T*fT
FRIDAY, JULYxT13* 1962
D-543
IBSLDfOIASr D4t4 ON O B O R M W R CONSu-PTIOII Ctf" UBniAHOFACTGTO LEAP AMD ZBKJ CHAHIg>lT.g W «HE dDOKMf ESTABLISH©
BY SBSSXDBftlAL JPROOLAlttrZOH NO. 3257 gt 8-PTSUBSa 22, 195»
flOOTA I-UOD • July I - September 30, 1962
* July I - July 6, 1962 (or as noted)
rtE- m —_JSS_-.321
JBL
Country
of
Produotloa
Australia
ITEM; ?92
8
1 liad'S^lon ox* bass bullis!** "1
8 load l a pigs a n d b a r s , lesjl
t
. * * * « . .
w* .
•
»_
Loao>boarl-s oros, fluo dust, 8 dress, rsolalrasd laad, s«s?o?
« Zluo-bsaring oros o f a l l k i n d s , t Zlno l a bloo*a, p i g s , o r slats;
aad satto.
t load, antlaonlal load, awti«8 sxespt pyrites vontaini-g not * old a n d vorn-out zlno, fit
x aooial sprap load, typs _ a t * l , x
orar 35* o f d a o
8 only to bo ronanufaetursd, zino
s a l l alloys o r oa-binatlons o f 8
«
dross, a n d slno aid-sings
t
lsad n.a.p.f.
,.
1
, , , „* ,
,.
.
m
Ml
Imports
Bsport* 7 1o uDutlablu
Zina
paport. 8
B y Selght teota
Oiartsrly
-ad
o t S T — — — Imports
— ~ ~ 7 Q _ _ xr tDutiable
3 ^ y ^ S o Lead
tS:
_ r t s r l y <_iot*
xtfcartsrly
Dutiable CLoad
(Pounds) •-*—--—t~'
XKSTS)
^-*^™-—~
(Pound.)
(Pound.7
10,080,000
5,901,165*
^,680,000
• I **»93
5,440,000
Bolglaa Congo
Bolglua and
Luxsaburg (total)
Bolivia
5,040,000
Canada
13,440,000
7*520,000
37,840,000
4,960,727
53,908*
11,280,282*
15,920,000
4,188,180*
66,480,000
66,480,000*
3,600,000
Italy
Ifsxloo
Poru
16,160,000
Ota* So* Africa
14,880,000
6,560,000
36,880,000
1,318,750
70,480,000
2,000,459
6,320,000
12,880,000
314,326
35,120»ooo
1,933,605
3*760,000
15,760,000
1,560,679*
17,840,000
17,840,000
14,880,000
Yugoslavia
All otter for.l#»
ooustrios (total)
7,520,000
6,560,000
6,080,000
6,080,000
6,080,000
•Imports through July 10, l?62.
Th. ebove country designation, are those spsoifls- i. Presidential Fro.la.atl.. N o . ^ S ? of Septs-ber 22, .958. Since that date the names of c.rt.in
eountries have boon changed. -
COTTON WASTES
(In pounds)
C
°I!2!LCA??J^S5 **<** fro» cotton having* staple of leas than 1-3/16 inches in length, COMBER
™ » 5 / U r ^ W A S T B * SLIVER WASTE, AMD ROVING 7JASTE, WHETHER OR NOT MANUFACTURED OR OTHERWISE
AD7ANCT) Til 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
"-
8
United Kingdom 4,323,457
Canada
. *
France . . . . . . .
..
British India
Netherlands
.
Switzerland . . . . . . .
Belgium .-.'.,
Japan . . . . . . . . . .
China . . . . . . . . . .
SgTPt
Cuba
Germany
Italy . . . . . .
.
239,690
227>420
69,627
68,240
44,388
38,559
341,535
17,322
8,135
6,544
76,329
21.263
5,482,509
y
Total Imports
Established :
Imports
Sept. 20, 1961, to :
33-1/3% of : Sept. 20, 19 61,
July 9, 1962
Total
otal Quota ; to J u l y 9, 1962
1,790,282
239,690
146,069
69,627
44,995
42,019
22,062
341,500
1,441,152
1,441,152
75,807
, 75,807
22,747
14,796
12,853
22,747
12,50*5
76,329
25,443
7.088
25,443
2,772,573
1,599,886
1,577,654
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.
T/
TREASURY DEPARTMENT
Washington, D. C.
M E D I A T E RELEASE
FRIDAY. JULY 1^. 1962.
D-544
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 A "
Imports September 20, 1961, to July 9, 1962
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
779,456
245,483
2,003,483
475,124
5,203
114,908
237
9,333
-
8,883,259
618,723
-
Established Quota
Country of Origin
Imports
Honduras
Paraguay
Colombia
Iraq
;.......
British East Africa ...
Netherlands E. Indies .•
Barbados
l/0ther British W. Indies
Nigeria
2/0ther British W. Africa
3/0ther French Africa ...
Algeria and Tunisia .••
752
- 871
124
195
2,24b
71,388
21,321
5,377
16,004
l/ Other than Barbados, Bermuda, Jamaica, Trinidad, and Tobago,
2/ Other than Gold Coast and Nigeria.
3/ Other than Algeria, Tunisia, and Madagascar. '
Cotton 1-1/8" or more
Imports August 1, 19-61, to July 9. 1962
Established Quota (Global) - 45,656,420 Lbs.
Staple Length
1-3/8" or more
1-5/32" or more and under
1-3/8" (Tanguis)
1-1/8" or more and under
1-3/8"
Allocation
39,590,778
Imports
39,590,778
1,500,000
548,588
h,565,6h2
4,565,642
689
Imoorts
TREASURY DEPARTMENT
Washington, D. C.
PC
IMMEDIATE RELEASE
FRIDAY. JULY 1^. 1962.
D-5^4
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 July 9, 1962
~~
Country of Origin
E&ypt and the AngloEgyptian Sudan
Peru
i
British India
China
.
,
Mexico
Brazil
Union of Soviet
Socialist Republics
Argentina
,
Haiti
Ecuador
.'
,
Establi shed Quota
Imports
783,816
247,952
2,003,483
1,370,791
8,883,259
618,723
779,456
245,483
2,003,483
475,124
5,203
237
9,333
114,908
8,883,259
618,723
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
3/0ther French Africa ...
Algeria and Tunisia ...
752
- 871
124
195
2,24b
71,388
21,321
5,377
16,004
689
l/ Other than Barbados, Bermuda, Jamaica, Trinidad, and Tobago.
2/ Other than Gold Coast and Nigeria.
3/ Other than Algeria, Tunisia, and Madagascar.
Cotton 1-1/8" or more
Imports August 1, 19 61 r to July 9. 1962
Established Quota (Global) - 45,656,420 Lbs.
Staple Length
1-3/8" or more
1-5/32" or more and under
1-3/8" (Tanguis)
1-1/8" or more and under
1-3/8"
Allocation
39,590,778
Imports
39,590,778
1,500,000
548,588
4,565,642
4,565,642
Imnorts
-£COTTON MASSES
"(In pounds)
COTTON CARD STRIPS aade-from cotton having-a staple of less than 1-3/16 inches in length, COMBES
WASTE, LAP WASTE, SLIVER WASTE, AMD ROVING WASTE, WHETHER OR HOT MANUFACTURED OR OTHERWISE
ADVANCED IN VALUE* Provided, however, that not more than 33-1/3 pertesct 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 gAngdom, France, Netherlands,
Switzerland, Belgium, Germany, and Italy*
i Established
Country of Origin
s TOTAL QUOTA
..
7 -- t .
'
United Kingdom 4,323,457
Canada
. . •
Francs
British India
Netherlands .......
Switzerland • • • • • • •
Belgium . . . . . . . . .
Japan • « • • • » « • • •
China .
Egypt
• .
Cuba
Germany « « • • • • • • •
Italy . . . . ..-.•...
239,690
22?, 1*20
69,627
68,240
44,388
38,559
341,535
17,322
8,135
6,544
76,329
21.263
5,482,509
y
Total Imports 5
Sept. 20, 1961, to 2
July 9, 196-2
Established
33-1/32 of
Total Quota
Imports
Sept. 20, 19 61,
July ^, 1962
to
1,790?282
239,690
146*069
69,627
44,995
42,019
22,062
341,500
1,441,152
1,441,152
75,807
75,807
22,747
14,796
12,853
22,747
12,505
76,329
25,443
7.088
25,443
2,772,573
1,599,886
1,577,654
V
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.
-2-
Commodity
Imports
: Unit
as of
: of
: Quantity: June 30. 196?
Period and Quantity
Absolute Quotas:
Butter substitutes, including
butter oil, containing 45%
or more butter fat
Calendar
Year 1962
Cotton products, except cotton
wastes, produced in any stage
preceding the spinning into
yarn
Peanuts, shelled, unshelled,
blanched, salted, prepared or
preserved (incl. roasted peanuts but not peanut butter)
1/ Imports through July 6, 1962.
1,200,000
Pound
Quota Filled
12 mos. from
Sept. 11, 1961
1,000
Pound
Quota Filled
12 mos. from
August 1, 1961
1,709,000
Pound
I
1,165,829"
CT3
TREASURY DEPARTMENT
Washington
87
IMMEDIATE RELEASE
FRIDAY, JULY 13, 1962
D-545
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 June 30, 1962, inclusive, as follows:
Commodity
Imports
as of
June 30. 1962
Period and Quantity
Tariff-Rate Quotas:
Cream, fresh or sour Calendar Year 1,500,000 Gallon
Whole Milk, fresh or sour Calendar Year 3,000,000 Gallon 53
Cattle, 700 lbs. or more each April 1, 1962(other than dairy cows)
June 30, 1962
120,000
Head
25,941
12 mos. from
Cattle less than 200 lbs. each... April 1, 1962
200,000
Head
37,179
Fish, fresh or frozen, filleted,
etc., cod, haddock, hake, pollock, cusk, and rosefish
Calendar Year
28,571,433
Pound
Quota Filled -
Tuna Fish Calendar Year 59,059,014 Pound 27,679,895
White or Irish potatoes:
Certified seed
Other
12 mos. from
Sept. 15, 1961
114,000,000 Pound
36,000,000 Pound
52,160,435
35,565,749
Walnuts Calendar Year 5,000,000 Pound 2,052,948
Stainless steel table flatware
(table knives, table forks,
Nov. 1, 1961table spoons)
Oct. 31, 1962
69,000,000
Pieces
67,466,297
1/ Imports for consumption at the quota rate are limited to 14,285,716 pounds during
the first six months of the calendar year.
TREASURY DEPARTMENT
Washington
D O
IMMEDIATE RELEASE
FRIDAY, JULY 13, 1962
D-5^5
The Bureau of Customs announced today preliminary figures showing the importi
for consumption of the commodities listed below within quota limitations from the
beginning of the quota periods to June 30, 1962, inclusive, as follows:
Commodity
Imports
as of
June 30. 1962
Period and Quantity
Tariff-Rate Quotas:
Cream, fresh or sour.,, Calendar Year 1,500,000 Gallon
Whole Milk, fresh or sour Calendar Year 3,000,000 Gallon 53
Cattle, 700 lbs. or more each April 1, 1962(other than dairy cows)
June 30, 1962
120,000
Head
25,941
12 mos. from
Cattle less than 200 lbs. each... April 1, 1962
200,000
Head
37,179
Fish, fresh or frozen, filleted,
etc., cod, haddock, hake, pollock, cusk, and rosefish
Calendar Year
28,571,433
Pound
Quota Filled
Pound
Pound
52,160,435
35,565,749
Pieces
67,466,297
Tuna Fish.' Calendar Year 59,059,014 Pound 27,679,895
White or Irish potatoes:
Certified seed
Other
12 mos. from
Sept. 15, 1961
114,000,000
36,000,000
Walnuts Calendar Year 5,000,000 Pound 2,052,948
Stainless steel table flatware
(table knives, table forks,
table spoons)
Nov. I, 1961Oct. 31, 1962
69,000,000
1/ Imports for consumption at the quota rate are limited to 14,285,716 pounds during
the first six months of the calendar year.
1/
-2-
Commodity
Period and Quantity
: Unit
Import8
: of
as of
;Quantity: June 30. lQfr
Absolute Quotas:
Butter substitutes, including
butter oil, containing 45%
or more butter fat
Calendar
Year 1962
Cotton products, except cotton
wastes, produced in any stage
preceding the spinning Into
yarn.
Peanuts, shelled, unshelled,
blanched, salted, prepared or
preserved (incl. roasted peanuts but not peanut butter)
1/ Imports through July 6, 1962.
,
1,200,000
Pound
Quota Filled
12 mos. from
Sept. II, 1961
1,000
Pound
Quota Filled
12 mos. from
August I, 1961
1,709,000
Pound
1,165,829"
_,0
Letter from Secretary Dillon to
Minister Giscard d'Estaing
Dear Mr. Minister:
Thank you for your letter informing us of
the intention of your Government to prepay certain
of its debt obligations to the United States. The
Government of the United States is most appreciative of this decision to prepay all of the Marshall
Plan loans and a part of the War Reconstruction
credit extended to France in the early postwar
period. This prepayment is not only evidence of
the continued vitality of the French economy, but
it is also an example of the growing international
financial cooperation which is so important to the
economic strength of the entire free world.
With my very best wishes,
Sincerely,
Douglas Dillon
ZS8
English translation of letter from
Minister Giscard d'Estaing to
Secretary Dillon
Dear Mr. Secretary and Dear Colleague:
I have the honor to inform you that the French Government,
taking advantage of the increase in the foreign exchange reserves
of the country, has decided to make an advance repayment of
$293.4 million to the United States Government.
This repayment includes the total outstanding balance of
the loans granted to France by the Export-Import Bank in 1948,
1950 and 1952 under the Marshall Plan, as well as the last
four semi-annual installments of the loan which that same institution made to us in 1946.
This choice has been inspired by the desire to pay off on
a priority basis the loans included in the generous assistance
of the Marshall Plan, which contributed so effectively to the
reconstruction and development of the French economy.
I am particularly happy to have been entrusted with the
task of informing you of this decision, which appears to me
in conformity with the policy followed by our two countries
in the balance of payments field and which will contribute
to the necessary maintenance of world monetary stability.
Please accept, Mr. Secretary and Dear Colleague, the assurances of my high consideration.
V. Giscard d'Estaing
,8
TREASURY DEPARTMENT
WASHINGTON, D.C.
July 12, 1962
FOR IMMEDIATE RELEASE AT 7:30 A.M., EDT.
THURSDAY. JULY 12. 1962
FRANCE PREPAYS $293.4 MILLION OF ITS
POSTWAR DEBT TO THE UNITED STATES
In view of the continuation of its exceptionally strong balance
of payments position through the first half of 1962, the Government
of France has now decided to regularize the disposition of its accruals of dollars over the period. As a demonstration of its responsibilities as a creditor country, France is prepaying a substantial
portion of the long-term debt contracted during the years of postwar
reconstruction when France's balance of payments was in a continuous
deficit position. On July 12 more than $350 million of debt owed to
the United States and Canada is being paid off in advance of maturity.
In order to realize a more customary relationship between gold and
dollars in French international reserves, the Bank of France is also
purchasing $112.5 million of gold from the United States.
The Government of France prepaid all of the outstanding installments on loans -- originally totalling $225.6 million -- which were
advanced under the Economic Cooperation Administration and the Mutual
Security Administration of the United States. The total prepayment
on these loans of $209.7 million completely discharges France's
indebtedness under the Marshall Plan loans.
In addition to repaying the Marshall Plan loans, France also
prepaid the installments due in 1970 and 1971 under the War Reconstruction credit extended by the Export-Import Bank of Washington
under a loan agreement of July 13, 1946. This credit was for the
purpose of assisting in the financing of the purchase of U.S. equipment, raw materials and services for France and its overseas territories. The installments paid today amounted to $83.7 million.
In reply to a letter from French Finance Minister Giscard d'Estain
informing him of the French intent to make the prepayment, Treasury
Secretary Douglas Dillon wrote: "The Government of the United States
is most appreciative of this decision to prepay all of the Marshall
Plan loans and a part of the War Reconstruction credit extended to
France in the early postwar period. This prepayment is not only evidence of t;he continued vitality of the French economy but it is also
an example of the growing international financial cooperation which
is so important to the economic strength of the entire free world."
The correspondence between Minister Giscard d'Estaing and
Secretary Dillon is attached.
D-546
TREASURY DEPARTMENT
WASHINGTON, D.C.
July 12, 1962
FOR IMMEDIATE RELEASE AT 7:30 A.M., EDT.
THURSDAY. JULY 12. 1962
FRANCE PREPAYS $293.4 MILLION OF ITS
POSTWAR DEBT TO THE UNITED STATES
In view of the continuation of its exceptionally strong balance
of payments position through the first half of 1962, the Government
of France has now decided to regularize the disposition of its accruals of dollars over the period. As a demonstration of its responsibilities as a creditor country, France is prepaying a substantial
portion of the long-term debt contracted during the years of postwar
reconstruction when France's balance of payments was in a continuous
deficit position. On July 12 more than $350 million of debt owed to
the United States and Canada is being paid off in advance of maturity.
In order to realize a more customary relationship between gold and
dollars in French international reserves, the Bank of France is also
purchasing $112.5 million of gold from the United States.
The Government of France prepaid all of the outstanding installments on loans -- originally totalling $225.6 million -- which were
advanced under the Economic Cooperation Administration and the Mutual
Security Administration of the United States. The total prepayment
on these loans of $209.7 million completely discharges France's
indebtedness under the Marshall Plan loans.
In addition to repaying the Marshall Plan loans, France also
prepaid the installments due in 1970 and 1971 under the War Reconstruction credit extended by the Export-Import Bank of Washington
under a loan agreement of July 13, 1946. This credit was for the
purpose of assisting in the financing of the purchase of U.S. equipment, raw materials and services for France and its overseas territories. The installments paid today amounted to $83.7 million.
In reply to a letter from French Finance Minister Giscard d'Estaing
informing him of the French intent to make the prepayment, Treasury
Secretary Douglas Dillon wrote: "The Government of the United States
is most appreciative of this decision to prepay all of the Marshall
Plan loans and a part of the War Reconstruction credit extended to
France in the early postwar period. This prepayment is not only evidence of the continued vitality of the French economy but it is also
an example of the growing international financial cooperation which
is so important to the economic strength of the entire free world."
The correspondence between Minister Giscard d'Estaing and
Secretary
D-5^6 Dillon is attached.
English translation of letter from
Minister Giscard d'Estaing to
Secretary Dillon
Dear Mr. Secretary and Dear Colleague:
I have the honor to inform you that the French Government,
taking advantage of the increase in the foreign exchange reserves
of the country, has decided to make an advance repayment of
$293.4 million to the United States Government.
This repayment includes the total outstanding balance of
the loans granted to France by the Export-Import Bank in 1948,
1950 and 1952 under the Marshall Plan, as well as the last
four semi-annual installments of the loan which that same institution made to us in 1946.
This choice has been inspired by the desire to pay off on
a priority basis the loans included in the generous assistance
of the Marshall Plan, which contributed so effectively to the
reconstruction and development of the French economy.
I am particularly happy to have been entrusted with the
task of informing you of this decision, which appears to me
in conformity with the policy followed by our two countries
in the balance of payments field and which will contribute
to the necessary maintenance of world monetary stability.
Please accept, Mr. Secretary and Dear Colleague, the assurances of my high consideration.
V. Giscard d'Estaing
Letter from Secretary Dillon to
Minister Giscard d'Esta5.ng
Dear Mr. Minister:
Thank you for your letter informing us of
the intention of your Government to prepay certain
of its debt obligations to the United States. The
Government of the United States is most appreciative of this decision to prepay all of the Marshall
Plan loans and a part of the War Reconstruction
credit extended to France in the early postwar
period. This prepayment is not only evidence of
the continued vitality of the French economy, but
it is also an example of the growing international
financial cooperation which is so important to the
economic strength of the entire free world.
With my very best wishes,
Sincerely,
Douglas Dillon
TREASURY DEPARTMENT
Washington
FOR RELEASE AT 6:30 P.M. EDT
o^
"'
J
STATEMENT BY THE HONORABLE DOUGLAS DILLON
SECRETARY OF THE TREASURY
AT THE BRIEFING SESSION ON DEPRECIATION GUIDELINES
- FOR INDUSTRY AND BUSINESS REPRESENTATIVES,
WEDNESDAY, JULY 11, 1962, 5:30 P.M.
The new guidelines and procedures for determining depreciation
on machinery and equipment used by all American business constitute
a fundamental reform in the tax treatment of depreciation that will
provide a major stimulus to business investment and thus to the
basic health and strength of our American economy.
This reform culminates a year of intensive study and work.
Successful completion of the job required us to examine the
depreciation practices, present and prospective rates of economic
obsolescence and the pace of technological change in American
industry and in industry abroad.
It is no exaggeration to state that the reform could not have
been accomplished without the assistance and cooperation we got
from businessmen,, their lawyers, accountants, engineers and
Washington representatives.
Our depreciation practices have not been realistic for a
great many years. Based essentially on taxpayers' past replacement
practices, they have inadequately reflected the fast-moving pace of
economic and technological change.
The standards under which depreciation was examined had far
too little flexibility. This rigidity of procedure was intensified
by the overwhelming complexity of Bulletin F, which listed separate
guideline lives for some 5>0Q0 separate items of business equipment
and machinery.
The result was ever-present uncertainty, debate, controversy
and frustration over the timing of depreciation deductions -deductions which play such an important role in business decisions
concerning modernization and replacement of productive equipment.
Despite the many complaints from taxpayers, and despite
the pressing urgency in the national interest for depreciation
reform, little had been done before last year. To be sure, two
basic studies were begun in the summer of i960, but they were not
even scheduled for completion until the middle of this year, and
they bore only on the depreciable lives of business property.
D-5^7
- 2 On the equally important matter of procedure nothing at all
had been done. This Administration decided more than a year ago
to proceed with a sweeping reform as fast as possible, and the
depreciation revision became a top-priority goal of our economic
policy. The urgency involved, however, did not lead to hasty or
ill-considered action. Every single assumption on which the tax
law had been administered for the past 25 years was intensively
reexamined with a view to eliminating needless cause for
controversy between business and Government. As our studies
progressed, -it became increasingly evident that the basis for
much of this controversy was to be found in the procedures for
examining depreciation allowances. Much could be done, we
discovered, within the framework of the existing statute. This
is exactly what we have accomplished: depreciation reform which
fully meets — while in no way exceeding -- the requirement of
existing law that reasonable allowances be given for depreciation.
The new depreciation guidelines are realistic and the new
rules for application of the guidelines recognize that economic
obsolescence is a continuing factor in business life which our
tax administration must take fully into account. The rate of
depreciation permitted under the rules will not be tied to past
history — it is tied to concurrent adoption of replacement
practices consistent with the lives which are claimed for tax
purposes.
The guidelines will not be allowed to become outdated -as was the case for so long with Bulletin "F", which the new
guidelines replace. Our revision of depreciation guidelines and
rules recognizes that depreciation reform is not something that,
once accomplished, is valid for all time. The experience under
the new guideline lives, industry and asset classifications, and
administrative procedures, will be watched carefully with a view
to possible corrections and improvements. Periodic reexamination
and revision will be essential to maintain tax depreciation
treatment which is in keeping with modern industrial practices.
The new guideline lives average thirty-two per cent shorter
than those established in Bulletin "FM. More significantly,
they are — as our Treasury depreciation survey showed -- fifteen
per cent shorter than the lives in actual use by 1,100 large
corporations which hold two-thirds of all the depreciable assets
in manufacturing.
In actual practice, we anticipate that a number of these same
companies -- whose practices we have studied in detail — will take
faster depreciation than that provided in the new guidelines. As
a result, the depreciable lives actually used are expected to
average twenty-one per cent shorter than those in use now.
Q"7
- 3 All of us at Treasury and Internal Revenue feel a great sense
of accomplishment at having carried to fruition this fundamental
reform in tax administration. We hope — and believe -- that you
will agree that our depreciation revision will bring meaningful
and lasting benefits to all of American business, agriculture and
mining and with it, lasting, benefits to our nation as a whole.
oOo
wm mukm A* *. mmmmm
July 16, 1962
ti j t o f r M . l * * *
-wnups or t m a w •• inDur
B I U OFFEBXIO
Tha Ir-eftsury uspartiaant announced last awamtmg that tfci tfenders for tnn sariaa ai
bills, mm mrUa to be an aMittNua itn» af tto* bills d & W i April 19 f Iftt
and the ottsar aailaa to b* amtmd Mly Xf$ 1962, w7lcb vara ®f£ar®4 <m Jul^ 11, w e r s span
at tha I M m a R u N n m Hanks on m& IA* f#nd»rs « m isritad tar $1,300,000,000* or
there^cuts, of fl~day bills ani for $700fOO0,OO0, ®r thereabouts, of U f * ^ bills.
fli® dat&lla at tha Ham mrirna «*• as tmUmmmt
1AI0K Of AOmPfM0
tit**? Tmaamj
WLXa
XM**dmw fraaantf biXXa
OOPPEfJfBHB SlBSt
ma+mrhm* janmrf
Xl§xm
friea
Jttt
n*mm
t*mmy
High
99<Jbli
i
parmamt at the
tf percent of tha
esst —
law York
Fhiiaa^lphia
Clsval_j$d
St* Louis
aty
Bam Tranmlmmm
TGTAI4I
3*X$X$
%%My
m$mm mtarmcrst
Asslltd For
i
3*xm
of $l«4ar bills His for at the low price
at m%*daw M 3 1 * bid. f@r At tha low prico mm
torAi m a n s AfWXD K M km kmmrm® wz mmmt
6
M&
m&%y
-_-____.
A&f¥U&l ilato
i
f TCac Max$m§m9@m
U.,570,000
3A»7$8*6tt
JJ#®63*00©
287*810,000
li3»O7i.i0©0
110*681,000
31, 99$$000
ADDlied
7i*»iafi*o»
*#tao,ooo
X5ttt98t000
2S#3O?#O00
176ft§0,000
37*i%000
15,376,000
37»681i000
783,1*89,000
,aigf0O0
21,1*80,000
7,986,000
5,767,000
1^,777,000
%$m9om
6,126,000
15,076,000
?#8£g,00O
3,*85,000
21,1*60,000
7,986,000
S*7i7#O90
S8flf7#000
6,82i*,QQG
5,761,000
15,076,000
Mf$«ooo
mMJSff ^SgftS ^«85:Si $^nn
b/ ZMMM 9J0O*085»OQO noncaw^ativ© tt^ders accepted at the average price af «*,&*
' Includes $66,063*000 nonccopetitive tenders aeoaptad at ifca average price of 96J06
Oti a © « p » I M I M I tf toa ®a»t iMiftti mm tm tha amm ammmt ixmmtad* tha rmtxm m
t h e » b U l f mmXd p$mld® jMM
at J.Q5^If tmt tha n**mj M l l » # and 3 # 23^, tar tfct
I82«4sy
""" * bills*
* ""
& M » f M t MKIMI «i bil3L« art cp#t®d is tan* atfeamtdiscount idta
the yvtam ralst#<l to UM» f*@« a a m t «f Ui® bill® payable at maturity rather tfesn
the ammmt immatad and ttiair len ^th in actual mmhar of dap* related to a 360»4a?
fmar* In 0antnuH # yi«l^te m ewrttftatt**, nn*taat awl boisd® mm aampatrnd la taf^
of lnfe««»*t am tha mmmt liiwatai, amd mXmtm tha msmbm at mmja rammdmhig km m
intarmt pmymamt pariad to tha aetmal inter of $ay® in tha pariad* idth
compo-ndlng If mmrm than ma ampm partad ia inw&vad*
TREASURY DEPARTMENT
W A S H I N G T O N , D.C.
*0R RELEASE A. M. NEWSPAPERS July 16, 1962
Tuesday, July 17, 1962*
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 April 19, 1962
and the other series to be dated July 19, 1962, which were offered on July 11, were opened
it the Federal Reserve Banks on July 16. Tenders were invited for $1,300,000,000, or
thereabouts, of 91-day bills and for $700,000,000, or thereabouts, of 182-day bills.
Phe details of the two series are as follows:
182-day Treasury bills
91-day Treasury bills
SANGE OF ACCEPTED
maturing January 17, 1963
maturing October 18, 1962
COMPETITIVE BIDS:
Approx. Equiv,
Approx. Equiv.
Price
Price
Annual Rate
Annual Rate
High
99.260
2.921%
98.U31 a/
3.10$
Low
99.210*
2.991%
98.U07
3.1^1$
Average
99.21*6
2.983$ 1/
98.U16
3.13k% 1/
a/ Excepting two tenders totaling $209,000
37 percent of the amount of 91-day bills bid for at the low price was accepted
27 percent of the amount of 182-day bills b id 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
TOTALS
San Francisco
Applied For
f ia,323,000
1,717,908,000
Ul,938,000
Ul,570,000
18,758,000
30,063,000
287,810,000
U3,078,000
22,191,000
UO,681,000
31,295,000
$2,U53,781+,000
137,169,000
Accepted
Applied For
29,937,
¥
U,357,000
000
M
78ii,l88,000
783,U89,000
19,938,000
8,185,000
3U,280,000
21,1*80,000
15,U98,000
7,986,000
25,309,000
5,787,000
176,850,000
11U,777,000
37,889,000
8,32U,000
15,376,000
6,126,000
37,681,000
15,076,000
19,U05,000
9,895,000
$1,302,165,000
b/
$1,067,538,000
105,8lii,000
82,056,000
Accepted
$ h,351,000
U79,i|89,000
3,185,000
21,U80,000
7,986,000
5,787,000
58,127,000
6,82U,000
5,761,000
15,076,000
9,895,000
82,056,000
$700,023,000 c/
lib/ Includes $300,085,000 noncompetitive tenders accepted at the average price of 99.2U6
iE/ Includes $66,083,000 noncompetitive tenders accepted at the average price of 98.U16
if/ On a coupon issue of the same length and for the same amount invested, the return on
these bills would provide yields of 3.05$, for the 91-day bills, and 3.23$, 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-518
"*• w \J
JUL 11 1962
ME^fUWOM TO OFFICE OF FI3fflr ASSISTANT MMttlBtt.
Tha faUaidag traaaaatHma vara aa4a 1* 6ir*«t and « ^ f ? ^ 8 ! ^ ^
af tha gararmmamt far fraasury lavaataaat and athar aaaomta daring tha aaath
af June:
Purchases
$37,318,000.00
Bet Salas • 8,718,000.00
Lii
o -7
Co u , U:
Co -^ -,,
-„ -XJ •-•
"* O
c;
1n 1
TREASURY DEPARTMENT
WASHINGTON, D.C.
£une 18, 1962
sjO/t/ /6 / / f ^ 2
FOR IMMEDIATE RELEASE
TREASURY MARKET TRANSACTIONS IN «*_%¥•
During -May 1962, market transactions in
direct and guaranteed securities of the government
for Treasury investment and other accounts resulted
in net purchases by the Treasury Department of
-$i§*€»9,400. # (^ . " <
0O0
D-518 N
9
^ "
TREASURY DEPARTMENT
WASHINGTON. D.C.
i .
July 16, 1962
FOR IMMEDIATE RELEASE
TREASURY MARKET TRANSACTIONS IN JUNE
During June 1962, market transactions in
direct and guaranteed securities of the government
for Treasury investment and other accounts resulted
in net sales by the Treasury Department of
$8,718,000.
0O0
D-5^9
oj^//vT~r^ri corw*G-c KFCGK-V
TREASURY D E P A R T M E N T
Washington
^R IMMEDIATE RELEASE
The United States Mint
establistr a new record
/?*
for coinage during the .$__«£ fiscal year, +v>n rr-prn~liTy n u u t l l l M I ^tl l.tnlary.
Eva Adams, Director of the Mint, reported that for the twelve
months, ending June 30J/Vthe coinage Mints at Philadelphia and Denver
turned out,
=_
lo^-r—
"3, 460, 524,142 pieces ejr*aomestic
GO Iff J
MTPTTPC
and
t tA
eon;
^ ^
foreign governments^
214, 200,000 piaaos for
-''iiuiub_i--ul.
T h e value of the domestic coinage w a s $143, 311, 430. 00, the highest
on record.
For the fiscal year ending June 30, 1961, the total of domestic
coinage was 3, 058, 791,188 pieces, with a face value of $91, 361, 800. 00.
Coinage, domestic and foreign, totaled 3,169,191,188 pieces that year.
Over 2, 544 million pieces of the 1962 production were in the
ever-busy one cent denomination. Approximately 43 million half
dollars, 171 million quarter dollars, 369 million ten cent pieces
and 333 million five cent coins were LuuiLd uiit.
T h e d e m a n d for five cent coins f r o m the Philadelphia Mint
has been so extensive that production has been stepped up to mint over
74 million coins of this denomination in the next few months. rU*** ^-*L*x^^t<La^JK
y
Coinage orders were executed for Costa Rica, Korea, Liberia,
and the Philippines.
TREASURY DEPARTMENT
iG
"
WASHINGTON, D.C.
July 17, 1962
FOR IMMEDIATE RELEASE
MINT SETS COINAGE RECORD
The United States Mint established a new record for coinage
during the 1962 fiscal year.
Eva Adams, Director of the Mint, reported that for the
twelve months, ending June 30, 1962, the coinage Mints at
Philadelphia and Denver turned out a total of 3,674,724,142 coins
of which 3,460,524,142 pieces were domestic coins and 214,200,000
coins were for foreign governments.
The value of the domestic coinage was $143,311,430.00, the
highest on record.
For the fiscal year ending June 30, 1961, the total of
domestic coinage was 3,058,791,188 pieces, with a face value of
$91,361,800.00. Coinage, domestic and foreign, totaled
3,169,191>l88 pieces that year.
Over 2,544 million pieces of the 1962 production were in the
ever-busy one cent denomination. Approximately 43 million half
dollars, 171 million quarter dollars, 369 million ten cent pieces
and 333 million five cent coins were minted.
The demand for five cent coins from the Philadelphia Mint
has been so extensive that production has been stepped up to mint
over 74 million coins of this denomination in the next few months,
Miss Adams said.
Coinage orders were executed for Costa Rica, Korea, Liberia,
and the Philippines.
0O0
D-550
- 3 -
-« r*£
a_ W -'
B1_&XXXm%gm?
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 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 subje
to estate, inheritance, gift or other excise taxes, whether Federal or State, bu
are exempt from all taxation now or hereafter imposed on the principal or intere
thereof by any State, or any of the possessions of the United States, or by any-
local taxing authority. For purposes of taxation the amount of discount at which
Treasury bills are originally sold by the United States is considered to be in-
terest. Under Sections 454 (b) and 1221 (5) of the Internal Revenue Code of 1954
the amount of discount at which bills issued hereunder are sold is not considere
to accrue until such bills are sold, redeemed or otherwise disposed of, and such
bills are excluded from consideration as capital assets. Accordingly, the owner
of Treasury bills (other than life insurance companies) issued hereunder need in
clude in his income tax return only the difference between the price paid for su
bills, whether on original issue or on subsequent purchase, and the amount actua
received either upon sale or redemption at maturity during the taxable year for
which the return is made, as ordinary gain or loss.
Treasury Department Circular No. 418 (current revision) and this notice, pre-
scribe the terms of the Treasury bills and govern the conditions of their tissue
Copies of the circular may be obtained from any Federal Reserve Bank or Branch.
- 2 B-aKXKXMEfl_m3%
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 accompanie
by an express guaranty of payment by an incorporated bank or trust company.
Immediately after the closing hour, tenders will be opened at the Federal
Reserve Banks and Branches, following which public announcement will be made by
the Treasury Department of the amount and price range of accepted bids. Those
submitting tenders will be advised of the acceptance or rejection thereof. The
Secretary of the Treasury expressly reserves the right to accept or reject any
or all tenders, in whole or in part, and his action in any such respect shall be
final. Subject to these reservations, noncompetitive tenders for $ 200,000 or
less for the additional bills dated April 26, 1962 , ( 91 days remain-
ipEfp
ing until maturity date on October 25, 1962
:£-&$£
) and noncompetitive tenders for
pqs
$100,000 or less for the 182 *day bills without stated price from any one
xfcgffcjx
4-_t$
bidder will be accepted in full at the average price (in three decimals) of accepted competitive bids for the respective issues. Settlement for accepted ten-
ders in accordance with the bids must be made or completed at the Federal Reserv
Banks on July 26, 1962 , in cash or other immediately available funds or
in a like face amount of Treasury bills maturing July 26, 1962 . Cash
x^fe&Mfcdfeft
W*«;«^^!ffilM*M
TREASURY DEPARTMENT
Washington
FOR IMMEDIATE RELEASE July 18, 1962
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 $ 2,000,000,000 , or thereabouts, fo
cash and in exchange for Treasury bills maturing July 26, 1962 , in the amount
of
$ 1.800.775.000 > as follows:
91 -day bills (to maturity date) to be issued July 26, 1962 ,
______
-----
in the amount of $ 1,500,000,000 , or thereabouts, representing an additional amount of bills dated April 26, 1962 ,
and to mature
October 25, 1962
x£8$x
, originally issued in the
amount of $ 600,408,000 , the additional and original bills
to be freely interchangeable.
182 -day bills, for $ 700,000,000 , or thereabouts, to be dated
"paEjT
pEIEJi
July 26, 1962
, and to mature
January 24, 1965
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, $50,000, $100,000, $500,000 and
$1,000,000 (maturity value).
Tenders will be received at Federal Reserve Banks and Branches up to the
Daylight Saving
closing hour, one-thirty p.m., Eastern/&S*m&%X!& time,
Monday, July 25, 1962
pgEji
*"•
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
. _—•—*
1 ,0 7
TREASURY DEPARTMENT
WASHINGTON. D.C.
July 18, 1962
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
$ 2,000,000,000,or thereabouts, for cash and in exchange for
Treasury bills maturing July 26, 1962,
in the amount of
$ 1,800,773,000, as follows:
91-day bills (to maturity date) to be issued July 26, 1962,
in the amount of $ 1,300,000,000, or thereabouts, representing an
additional amount of bills dated April 26, 1962,
and to
mature October 25,1962, originally issued in the amount of
$ 600,408,000, the additional and original bills to be freely
interchangeable.
182-day bills, for $700,000,000, or thereabouts, to be dated
July 26, 1962,
and to mature January.24, 1963.
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, $50,000, $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 p.m., Eastern Daylight Saving
time, Monday, July 23, 1962.
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 t€mders 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-551
accompanied
by an express guaranty of payment by an Incorporated bank
or
trust company.
- 2 Immediately after the closing hour, tenders will be opened at
the Federal Reserve Banks and Branches, following which public
announcement will be made by the Treasury Departmment of the amount
and price range of accepted bids. Those submitting tenders will be
advised of the acceptance or rejection thereof. The Secretary of
the Treasury expressly reserves the right to accept or reject any or
all tenders, in whole or in part, and his action in any such respect
shall be final. Subject to these reservations, noncompetitive
tenders for $200,000 or less for the additional bills dated
April 26, 1962,
(91-days remaining until maturity date on
October 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 Banks on July 26, 1962,
in cash or other immediately available funds or in a like face
amount of Treasury bills maturing July 26, 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 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
0O0 the taxable year for which the
sale or redemption at maturity during
return is made, as ordinary gain or loss.
Treasury Department Circular No. 4l8 (current, revision) and this
notice prescribe the terms of the Treasury bills and govern the
conditions
any Federalof
Reserve
their Bank
issue.
or Branch.
Copies of the circular may be obtained from
ID®
•A. Iw" ^
- X® Addition of the credit to depreciation reform is
literally essential to thm achievement ot our sajor
national economic goals.
As President Kennedy noted last week, the
Administration mam completed its part of the Job. The
rest is up to Congress, With the help and support of
organizations such as EAPX and of individuals such as
yourselves, the credit mmm now promptly be enacted into
law, with lasting benefits for every American business
and awmwf Asevica-t citlaw&a.
s )< •
1 no
j* •>-- •-•
- is It will mtmwrm our aMlity to kssp A«erican wages
tbe higlissf ia ttis world by assuring that *nr workers
mlatsia their productivity margin over workers
elsewhere — the margin which justifies our sags
standards.
Possibly sost* important of all, IISWSINH?, incrsassd
productive efficiency will enable us to sell American
goods at competitive prices everywhere In tto world.
IMs sill mean expanded export markets and a domestic
market resistant to undue increases ia imports. This,
in turn, sill mean sore jobs for American workers and
a saore vigorous, sore rapidly growing American economy.
Increased export salss also offer fits only complete
solution to our balance of payments problem — short of
the unthinkable alternative of withdrawal from our
world cosimitments.
litr
will also greatly iMmtmmmm tto prsfitaMMtjr mt mam
investment ~~ increase that profitability by some
m t® 4® paw seat, a rise «Ue* w#»M to thm mqutwrnXamt
**f a reduction is the corporate tax rats of aore ttoa
10 percentage points. It km this improvement la tto
profitability of investment «• which tto Mmtehkmmxy and
Allied Products Institute was one of tto first to mmtm —
.•41*. :
•
.
.. :
that will provide business with an incentive to vesture
into tto creation of sew methods of production and
wholly new products — a key to growth and full employment.
The credit coupled with depreciation reform will
encourage tto Modernisation of mm factories and farms,
the development of new technology and its rapid
incorporation Is tto production process. The resulting
gain lu productive efficiency will bring important direst
benefits.
« 13 -
Depreciation refers is, ia a sense, pemissive. mm
•S* m§-: . srSP' —s,s» jpi^ap w^s mw^mmmmmmmmaFawmw seesKSie^ ma^am^mmmmmvmw- ^m^mm^kWmmt ^$mm\ sp^ff^sww*iir am mkam* ^west*a*^^
additional investments is sew plant and equipment, if . ^m^
it chose*. Tto investment credit, on tto other hand,
will have a sere positive, stimulative effect, it will
not merely increase the flow of funds available for
investment and shorten tto period of time ever which
capital is risked, tbereby encouraging business to Affect
sedsnise to take advantage of technological change. It
11 9
• -II «•
tot enough. The investment credit is needed, km
4WJ*SSMM» sNS^PSsS <a$ m\ ^ipMUMa -«#iMflp.«s&s^PsPePeseI WmwaMaw w^r Wamm ammwaamw mm$r mwmar~*wfy$J w mkrmi
tto cost ef investnsnt — thereby commensurately **«.u
shortening tto period of tins over which that investment
is risked — as rapidly as their foreign competitors do,
oi r >u* ... Industr lal*mm4 .'• nmt&om
It is this cost recovery factor which is crucial is
The percentage of first-year cost recovery on
investment is tto United States is sew only a little
more than thirteen par cent. Because of the special
tax incentives for new investaent granted by our nine
friendly major industrial cospetiter nations, tto
average first-year recovery is those countries is
twenty-nine per seat ~~ sore than twice our current
figure* With depreciation revision* our percentage will
rise to 16.7 per eeat — tot still far short of equality.
n?
But as President Kennedy noted only last week,
"In addition to modern and realistic depreciable
&mm
lives, most major industrialised nations provide a
special tax incentive for investsent. The investment
credit contained is the pending tax Mil is needed to **
put American producers on a comparable tax footing
with their foreign competitors, to increase our share
of both foreign and domestic markets, and thus protect
our balance of international payments and gold reserves."
The special investment allowances granted by other
countries place American business at m significant ^
competitive disadvantage. It was to erase this disadvantage that the credit was conceived.
Examination of a few basic statistics will desonstrate
why depreciation reform — important though it is — is'
* 10 profits reported by business is not, however, the ,
only — nor, is fact, ewes tto sajor mm reason why
tto Kennedy Administration has advocated tto crsdit.
.- The objective is sere fundamental. It is to mm%
ISMWHW'V ^mmma^a*m^Smmam amtsmmwrn^mmMrmM^m ., mmwr «WPwWp^wW»*esP Jmmwaw w^B_p mama* p^e Ss^e?
sustain tto health and growth of tto American eeonosy
and America's competitive position is. the world* share
amW^ajjQpVia. ^awaar^a$m$a mf^Wrmmt ma ^ap^tf^j^ymamam^a - spee^nvwese -^MS^pi^s- w^AevPei^'y tamaiafma'^a^mmamaymwt waaw^m$^$j
under way at the time tto investment credit was first '
put forth sore than a year ago, is sot enough to assure
maintenance of our industrial leadership. Our revised
depreciation guidelines, under which our businesses will
new to depreciating their equipment is an average of
12 years, to bring our depreciation practices into jsmxstmta
general conformity with those followed elsewhere in tto
industrial world.
The credit, which is sot a deduction against
income tot a deduction against taxes, works in tto
opposite direction fro* depreciation la its effect os
reported after-tax profits* The credit would result
is increasing after-tax profits of business by nearly
tto same aaount as sere rapid depreciation would «f
s
between $1.1 and $1.3 billion for tto credit.
Enact-
seat of tto credit, therefore, would sean that business
could tales full advantage of our depreciation refers
without showing any significant reduction in reported
profits, thus tto two programs will work together sad
with tto Investment credit, companies will to such more
likely to take full advantage of our depreciation refers.
The effect of tto investment credit on the after-tax
1 •* 7
to have been aware throughout our long sad
intensive labors on depreciation refers that this
factor night liar some companies from depreciating „,
their equipment as rapidly as they sight like and
;
as rapidly as they are,now, autosatically, permitted
to dm. that is a major reason why we estimated that
the increased depreciation charges during tto first
year under our new guidelines would total only $3,4
billion. , **?'...Vi**> ~« $f, ijr«*
this very faster of the effect of increased t.m4.
depreciation on reported profits, however, provides a
further reason for adoption of tto second facet of our
tax program to spur business capital spending — tto ..
iavesttoat credit. . -**m&%> .-». J *tar«*tas
II 7
• 7 •
Judging by the reactions we have seen quoted
la the press is tto few days since announcement of our
depreciation reform, and by the comments which have
come, on a personal basis, to aaay of mm at tto
Treasury, such of tto business community and tto v.,,
accounting and legal professions agree that we have
achieves a truly iuadamental and meaningful refers —
Only one critical note has been voiced at all
widely. this km tto fear, expressed in several quarters,
that aaay businesses will not feel themselves la a
sow to to permitted!, because increasing depreciation
^sMS^MnVMe^' a^(e>^HrSS*i^ esnssw ammm^^ awmmpaw ams^a^aramMm*mm*aLW*Lm\ ^p^ne^-seep* ma aj$fwm m* ~y-asta~h# j» assa • § ^siP'e^p
total profits — both before and after taxes — reported
by a company.
119
- 6 _
only that a business is able to deaonstrate .that it is
continuously soviag toward a replacement pattern
f wy
consistent with tto depreciable lives claiucd for tax
^hss
4_fc jfWmarmwmm Jps»esseE
m/taw
/
even sere rapid than that
/
will need tlse to pat aew
into effect,^ A three-year period
m$w-*aM ^fft*at sa~v~v iw«^4^fcs» a^3am sv^stsit'-w,,—•~w^-is Wy^» WSS^MF<s at maMMkmmr*m*-*m^kms$amtfg9mm* SqMHvwsa e^sea^ae vSjjI* e^eps> j
an entire replacement cycle to bring replacosent practice
into precise conformity witi| tax depreciation claissTl
We anticipate a genuine breakthrough as a result of
/
these new depreciation rules —
a breakthrough into tto
half of the 20th Century la the pace of modernization
/
of Aaerfeaa business equipment.
/
\ ,_.
lWjHWPt^
- § more rapid replacement of Its equipment because the
internal funds it has been able to generate through
depreciation have la so many cases toon rigidly locked
to past — rather than concurrent and prospective —
0mm\ to
replacement practice.
Tto new rules have been desigaed specifically to "
enable American business to break free of old* laggard
replacement patterns.
They include provision of a three-year transitional
period during which any business say automatically begin
depreciating its equipment in accordance with tto new,
shorter guidelines fer depreciable lives. Use of tto
new guidelines will be unchallengeable on any ground
throughout that three year period and thereafter for
the balance of tto entire, new replaeeseat cycle providing
• 4 economic obsolescence is a continuing factor is business
life which our tax administration must take folly into
account. The rate of depreciation persitted under tto
rules will not to tied to past history — it is tisd
to concurrent adoption of replacement practices
consistent with tto lives which are claimed for tax
purposes* -.;f, ing^^u. -,
This is the fundamental concept underlying our
depreciation revision: that tto depreciation claimed
will not to disturbed so long as it is consistent with
It is hard to overestimate tto importance of this
concept. Its adoption will bring effectively to an
end tto probles faced by American business for so many years;
naaely, that it has toes unable to shift to a pattern of %$
121
• $ -
tto statutory requirement that reasonable allowances
to gives for depreciation. -'*• ***-» t*xX* 4sto
Depreciation has bees a major problem of United
States tax policy for decades. As a deduction used
la determining tto taxable Income of a busissss, it
directly affects tto rate of recovery of invested >
capital. For that reason, it plays a vital role la
business investment decisions.
But our depreciation practices save sot bees
realistic for a great many years. Based essentially &
on taxpayers' past replacement practices, they have
Inadequately reflected the fast-seviag pace of economic
and technological change. The new depreciation guidelines correct this fundamental flaw and the aew rules year**
for application of tto guidelines recognise that •« mx
at having carried to fruition our depreciation
revision — a fundamental refers ia tax administration.
We hope, and believe, thatyou will agree that our
depreciation revision will bring meaningful and
lasting benefits to all of American business,
agriculture and mining and with it, lasting benefits
to our nation as a whole.
Our sweeping refers of tto standards and procedures
for tax treatment of depreciation was undertakes and
brought to completion by administrative action under
long-existing law which requires that tto government
permit "reasonable" allowances for depreciation which
take into account wear and tear and tto of foots of
obsolescence. This is tto standard which our new
depreciation rules in no way exceed hut fully meet:
f0£ £&m- "* l*"UKi*\
REMARKS OF THE HOSOHABLE HEHRY B. FOWLER, UNDER
SECRETARY Of TBE TREASURY, BEFORE THE TAX SEMIMAR,
MACHIBIKt^WD mUXW ^ » 0 C t 8 J l W f l W f , « » ™ *
i»T»U,7vWKDHBSDAT, <*WUT 18, 1MI, 10:00 A.U., mVf u.
ft is Inaenl a pleasure and psftvilMO for se to
appear tore today before this tax seminar sponsored
by tto Machinery and Allied Products Institute* All
of us ia tto Treasury have becose very fast liar with
C
MAPI as we have soved forward la our work on various
aspects of our tax program as it relates to investment.
The first phase of the Administration's two-pronged
program to spur investssnt has now been completed. We
at tto Treasury do feel a sseet sense of accomplishment
TREASURY DEPARTMENT
Washington
FOR RELEASE UPON DELIVERY
REMARKS OF THE HONORABLE HENRY H. FOWLER
UNDER SECRETARY OF THE TREASURY
BEFORE THE TAX SEMINAR, MACHINERY AND ALLIED PRODUCTS
INSTITUTE, SHOREHAM HOTEL, WASHINGTON, D.C.,
WEDNESDAY, JULY 18, 1962, 10:00 A.M., EDT
It is a pleasure for me to appear here today before this tax
seminar sponsored by the Machinery and Allied Products Institute.
All of us in the Treasury have become very familiar with MAPI, its
work and its staff, in the past year or so. While we do not
always agree, we have received helpful and constructive advice
from MAPI as we have moved forward in our work on various aspects
of our tax program as it relates to investment.
The first phase of the Administration's two-pronged program
to spur investment has now been completed. We at the Treasury do
feel a sense of accomplishment at having carried to fruition our
depreciation revision — a fundamental reform in tax administration.
We hope, and believe, that you will agree that our depreciation
revision will bring meaningful and lasting benefits to all of
American business, agriculture and mining and with it, lasting
benefits to our nation as a whole.
Our sweeping reform of the standards and procedures for tax
treatment of depreciation was undertaken and brought to completion
by administrative action under long-existing law which requires
that the government permit "reasonable" allowances for depreciation
which take into account wear and tear and the effects of obsolescence.
This is the standard which our new depreciation rules in no way
exceed but fully meet: the statutory requirement that reasonable
allowances be given for depreciation.
Depreciation has been a major problem of United States tax
policy for decades. As a deduction used in determining the taxable
income of a business, it directly affects the rate of recovery of
invested capital. For that reason, it plays a vital role in
business investment decisions.
But our depreciation practices have not been realistic for a
great many years. Based essentially on taxpayers* past replacement
practices, they have inadequately reflected the fast-moving pace of
economic and technological change. The new depreciation guidelines correct this fundamental flaw and the new rules for application
of the guidelines recognize that economic obsolescence is a
continuing factor in business life which our tax administration must
take fully into account. The rate of depreciation permitted under
the rules will not be tied to concurrent adoption of replacement
practices consistent with the lives which are claimed for tax
purposes.
D-552
- 2 -
125
This is the fundamental concept underlying our depreciation
revision: that the depreciation claimed will not be disturbed so
long as it is consistent with the replacement practices concurrently
used.
It is hard to overestimate the importance of this concept.
Its adoption will bring effectively to an end the problem faced by
American business for so many years; namely, that it has been unable
to shift to a pattern of more rapid replacement of its equipment
because the internal funds it has been able to generate through
depreciation have in so many cases been rigidly locked to past —
rather than concurrent and prospective — replacement practice.
The new rules have been designed specifically to enable
American business to break free of old, laggard replacement patterns.
They include provision of a three-year transitional period
during which any business may automatically begin depreciating its
equipment in accordance with the new, shorter guidelines for
depreciable lives. Use of the new guidelines will be unchallengeable on any ground throughout that three-year period and thereafter
for the balance of the entire, new replacement cycle providing only
that a business is able to demonstrate that it is continuously
moving toward a replacement pattern consistent with the depreciable
lives claimed for tax purposes.
We anticipate a genuine breakthrough as a result of these new
depreciation rules — a breakthrough into the second half of the
20th Century in the pace of modernization of American business
equipment.
Judging by the reactions we have seen quoted in the press in
the few days since announcement of our depreciation reform, and by
the comments which have come, on a personal basis, to many of us at
the Treasury, much of the business community and the accounting and
legal professions agree that we have achieved a truly fundamental
and meaningful reform — one that has been overdue for at least a
decade.
Only one critical note has been voiced at all widely. This is
the fear, expressed in several quarters, that many businesses will
not feel themselves in a position to take advantage of the more
rapid depreciation now to be permitted, because increasing depreciation deductions has the paradoxical effect of reducing the total
profits — both before and after taxes — reported by a company.
We have been aware throughout our long and intensive labors on
depreciation reform that this factor might bar some companies from
depreciating their equipment as rapidly as they might like and as
rapidly as they are now, automatically, permitted to do. That is
a major reason why we estimated that the increased depreciation
charges during the first year under our new guidelines would total
only $3.4 billion, instead of the theoretically possible $4.7
billion.
This very factor of the effect of increased depreciation on
reported profits, however, provides a further reason for adoption
of the second facet of our tax program to spur business capital
spending — the investment credit.
The credit, which is not a deduction against income but a
deduction against taxes, works in the opposite direction from
depreciation in its effect on reported after-tax profits. The
credit would result in increasing after-tax profits of business
by nearly the same amount as more rapid depreciation would reduce
them — $1.5 billion for depreciation, somewhere between $1.1 and
$1.3 billion for the credit. Enactment of the credit, therefore,
would mean that business could take full advantage of our depreciation reform without showing any significant reduction in reported
profits. Thus the two programs will work together and with the
investment credit, companies will be much more likely to take full
advantage of our depreciation reform.
The effect of the investment credit on the after-tax profits
reported by business is not, however, the only — nor, in fact,
even the major — reason why the Kennedy Administration has advocated
the credit.
The objective is more fundamental. It is to induce American
business to modernize faster to sustain the health and growth of
the American economy and America's competitive position in the
world.
Depreciation reform, which was already intensively under way
at the time the investment credit was first put forth more than a
year ago, is not enough to assure maintenance of our industrial
leadership. Our revised depreciation guidelines, under which our
businesses will now be depreciating their equipment in an average
of 12 years, do bring our depreciation practices into general
conformity with those followed elsewhere in the industrial world.
1 p'7
- 4 But as President Kennedy noted last week, "In addition to
modern and realistic depreciable lives, most major industrialized
nations provide a special tax incentive for investment. The
investment credit contained in the pending tax bill is needed to
put American producers on a comparable tax footing with their
foreign competitors, to increase our share of both foreign and
domestic markets, and thus protect our balance of international
payments and gold reserves."
The special investment allowances granted by other countries
place American business at a significant competitive disadvantage.
It was to erase this disadvantage that the credit was conceived.
Examination of a few basic statistics will demonstrate why
depreciation reform — important though it is — is not enough.
The investment credit is needed, in addition, if our businesses
are to be able to recover the cost of investment — thereby commensurately shortening the period of time over which that investment
is risked — as rapidly as their foreign competitors do. It is
this cost recovery factor which is crucial in investment decisions.
The percentage of first-year cost recovery on investment in
the United States is now only a little more than thirteen percent.
Because of the special tax incentives for new investment granted by
our nine friendly major industrial competitor nations, the average
first-year recovery in those countries is twenty-nine percent —
more than twice our current figure. With depreciation revision, our
percentage will rise to 16.7 percent — but still far short of
equality. If, however, we couple the proposed seven percent
investment credit with the depreciation revision, this picture will
change sharply. Our average percentage first-year cost recovery
would then climb to 30.7 percent — a parity position to that of
our industrialized competitor nations.
Depreciation reform is, in a sense, permissive. It will give
business additional cash in pocket to make additional investments
in new plant and equipment, if it chooses. The investment credit,
on the other hand, will have a more positive, stimulative effect.
It will not merely increase the flow of funds available for investment and shorten the period of time over which capital is risked,
thereby encouraging business to modernize to take advantage of
technological change. It will also greatly increase the profitability of new investment — increase that profitability by some
35 to 40 percent, a rise which would be the equivalent of a
reduction in the corporate tax rate of more than 10 percentage points.
It is this improvement in the profitability of investment — which
the Machinery and Allied Products Institute was one of the first to
note — that will provide business with an incentive to venture into
the
creation
of new
of production and wholly new products —
a key
to growth
and methods
full employment.
- 5 The credit coupled with depreciation reform will encourage
the modernization of our factories and farms, the development of
new technology and its rapid incorporation in the production process.
The resulting gain in productive efficiency will bring important
direct benefits.
It will ensure our ability to keep American wages the highest
in the world by assuring that our workers maintain their productivity
margin over workers elsewhere — the margin which justifies our wage
standards.
Possibly most important of all, however, increased productive
efficiency will enable us to sell American goods at competitive
prices everywhere in the world. This will mean expanded export
markets and a domestic market resistant to undue increases in imports.
This, in turn, will mean more jobs for American workers and a more
vigorous, more rapidly growing American economy.
Increased export sales also offer the only complete solution
to our balance of payments problem — short of the unthinkable
alternative of withdrawal from our world commitments.
Addition of the credit to depreciation reform is literally
essential to the achievement of our major national economic goals.
As President Kennedy noted last week, the Administration has
completed its part of the job. The rest is up to Congress. With
the help and support of organizations such as MAPI and of individuals
such as yourselves, the credit can now promptly be enacted into law,
with lasting benefits for every American business and every American
citizen.
0O0
TREASURY DEPARTMENT
Washington
1 OQ
The Treasury today announced awards to the following employees
in the Office of the Secretary:
' 1^ Paul fjjfenald receivers Splffal Ser^fc award of <
7- $300.00 in recognition of his outstanding contributions
to the Department in the field of safety. Through his
efforts the Treasury Department received the Presidents
Safety Award for lQ6l, after having been nominated six
out of the seven years the Award has been given.
Arthur V. Sullivan received a Sustained Superior
Work Performance award of $300.
Neva P. Stedraan received an Outstanding Performance
rating with a cash award of $300.
The following employees received Special Act or
Service Awards:
REPRODUCTION BRANCH
Patrick F. Gorman, III Earl A. Turner
Raymond Lundgren
Anna M. Williams
Edna M. Acton
Anthony Perry
Osear Avelin Jackson
Bradley A. Clarke
Lee D. Norman
Elbert Mullen
Evelyn M. Deavers
Steward Henderson
John E. Carver
Harold 0. Johnson
GRAPHICS BRANCH
H. Walton Blume Doris P. Hilton
Temple C. Beall
Beatrice W. Tate
A suggestion submitted by John E. Bailey was
adopted without payment of an award.
TREASURY DEPARTMENT
Washington'
July 19, 1962
The Treasury today announced awards to the following employees
in the Office of the Secretary:
Paul McDonald received a Special Service award of
$300.00 in recognition of his outstanding contributions
to the Department in the field of safety. Through his
efforts the Treasury Department received the President's
Safety Award for 1961, after having been nominated six (
out of the seven years the Award has been given.
Arthur V. Sullivan received a Sustained Superior
Work Performance award of $300.
Neva P. Stedman received an Outstanding Performance
rating with a cash award of $3009
The following employees received Special Act or
Service Awards:
REPRODUCTION BRANCH
Patrick F. Gorman, III Earl A. Turner
Raymond Lundgren
Anna M. Williams
Edna M. Acton
Anthony Perry
Oscar Avelin Jackson
Bradley A. Clarke
Lee D. Norman
Elbert Mullen
Evelyn M. Deavers
Steward Henderson
John E. Carver
Harold 0. Johnson
GRAPHICS BRANCH
H. Walton Blume Doris P. Hilton
Temple C. Beall
Beatrice W. Tate
A suggest ion* submitted by John E, Bailey was
adopted without payment of an award.
131
and repayments of certain loans, proceeds of the sale of property and
products, and various fees, were $334 million lass than expected.
«S5_3
—
Comparison of budget results for 1962 with 1961.
Budget expenditures in fiscal year 1962 were $6.2 billion higher
than in 1061. Of this amount, $4.3 billion or 70 percent was for defease,
international, and space programs, primarily reflecting efforts to strengthen
our military forces and to expand manned space flight and other space
exploration activities. In total, programs designed to achieve our
defense, international, and space objectives accounted for ever three-fifths
of budget expenditures in 1962.
Other substantial increases over 1961 were for agricultural programs;
health, education, and welfare activities; housing; interest payments; and
resource development programs of the Department of the Interior. Sizable
decreases occurred in the Department of Labor, reflecting mainly lower
expenditures than in 1061 for temporary extended unemployment compensation,
and in the Post Office Department.
Budget receipts rose by $3.7 billion between 1961 and 1962. Increases
of $4.5 billion in individual income tax receipts and $659 million in
excise tax collections were partially offset by declines of $469 Billion
in corporation income taxes and $890 million in miscellaneous receipts.
Thafcay^mamaipt^mra unusually large in fiscal 1961 because of aa advance
loan repayment by the Federal Republic of Geraany, amounting to over
$500 million.
July 18, 1962
1 10
JL-,
K^' _j_
Insert on top of page 4.
The reduction from the January estimate of budget
receipts accounts for almost all of the change in receipts
as shown in the consolidated cash statement„ The change in
Federal payments to the public, in addition to the lower
level of budget expenditures, is accounted for chiefly by
(1) a reduction of $1.5 billion in expenditures of trust
funds, mainly the Federal National Mortgage Association
secondary market trust fund and the highway trust fund, and
(2) an increase of $1.4 billion over the estimate for the
non-cash adjustment items (interest accruals, transactions
in non-interest bearing notes with international financial
organizations, and the clearing accounts) which are deducted
Partially
to arrive at total payments to the public.
7~"bffsetting
these reductions was an increase of $0.6 billion in net
expenditures of government sponsored enterprises, almost
entirely the result of the operations of the Federal Home
Loan Banks.
??
o
S
^fvO^ coJTftM,MT^4 ^ j ^ ^
j^J^)
v Saad fata price supyor^/programs; tfce«e-ee*-a3_iJ««ML_$S^^
A- ^
"^^JmHiftry^iis^^^t^wejEe^
J#jj»»«y4^^t1ier_si^Hrf>ie_rj
$2S4 million for the Department ©f Health*
Education, and Welfare, mainly in public assistance grants and health
progress; $20$ Billion for the Housing and Home Finance Agency, mainly
ia activities of the Federal National Mortgage Association; $205 million
in foreign economic and military assistance expenditures; and $168 million
for the Veterans Administration, primarily in housing benefit programs
and pensions. In addition, legislation to permit the purchase of
$100 million of U.N. bonds, assisted in the budget to occur in fiscal
year 1962, has not yet been enacted, thereby reducing anticipated State
Department expenditures. These reductions are partly offset by higher
expenditures for interest on the public 4ebt (up $240 million from
January estimates) and for Export-Import Bank loan operations (up $202
million)•
Although receipts from the individual income tax were $650 rail lion
larger than anticipated in January, this increase was more than offset
by lower corporation income taxes and miscellaneous receipts than had
been expected. Excises, estate and gift taxes, and customs duties were
moderately below estimates. With respect to corporation income taxes,
receipts were $904 million less than estimated, reflecting somewhat
lower profits for the calendar year 1961 than had been estimated in
January. Miscellaneous receipts, including such items as interest
1 ^4
""^
2.
with the estimate of $0,5 billion made last January. This change is
Insert A
(p. 2)
reflects a number of factors, among them unanticipated changes in
the rate of activity in certain programs, and postponement by Congress
of the enactment of certain appropriations from fiscal 1962 to
fiscal 1963* In addition, the reduction in expenditures also reflects
the continuing effort of the heads of the various Government agencies
to carry out the Presidents instructions of last October "to follow
a most careful and frugal policy with respect to cammitments and
expenditures under the 1962 budget as enacted by the Congress."
Among the more sizeable reductions in budget expenditures below
the January estimate were: $506 million
Excess of payments (»)• -2.3 -8.5 -5.7 +2.8
Comparison of budget results with January estimates.
Hie reduction of $1.4 billion in budget expenditures below the January
\ estimate 43-eccpunted •f^gv^o-4t-cc-tsi4_-^hls~-exteiit byjylower outlays tha
* had been anticipated by the Commodity Credit Corporation for special export
34
with the estimate of $0.5 billion made last January.
This change is
almost entirely accounted for by a shortfall in receipts compared with
the January estimate. (These are preliminary estimates and are subject
te change when the official Department of Commerce figures are released.)
The following table shows the results for fiscal year 1962 as
compared with the estimates made last January in the budget document,
the results for 1961# and the changes from the January estimates.
FEDERAL FINANCES
(Fiscal years. In billions)
1962
Description
1961
actual
January
estimate
.MWMim—WW**—<•——*»'
niimn » II'III im m
mi mi. iiiiiinnniini mini •
Administrative budget:
Budget receipts.....
Budget expenditures.......
"
*
$77.7
SI.5
iiiiHiiinni .iiLIL .un
Actual
•**m*<m*mm*+
$82.1
89,1
$81.4
87.7
iiirminirniiiir'n11
ii»iii)|iiiiin'-iiipiiiiii
Change from
January estisu
mtmm***mmtmimmmmm*m**mmt
~$0.7
*1.4
M M P M M I I
maimmt 4eficit (-) »3,9 -7.0 -6.3 +0.7
isssssas^
Consolidated cash statement;
Receipts from the public.
Payments to the public...
*
*
$7.2
99.5
WM*aaMI.*M»
102.6
lU.lj
101.9
107,6
<MM«liMwl
iilimirmwiiinru in
-0.8
-5.6
urn T
nil HIHIII
Excess of payments (-). -2.3 -8.5 -5.7 +2.8
*iW«*_pWttiaMM«-_
.son at budget results with January estimates.
II
in ' M W W I
•mniiiii i m n — i i — — - . m i
in -. i i mi ii- r r m
' iimiin i, i liltn M Urn
ririmntii n»
iiiliiini
The reduction of $1.4 billion in budget expenditures below the January
estimate 4rNi€rcetmteTgHg6_*-to-4^ outlays than
had been anticipated by the Commodity Credit Corporation for special export
135
ADMINISTRATIVELY CONFIPENTIAl
inii»^K>.m»p.^»wiHMii—i><ii>.mii,iin mj-.^irwri,m>.-iri«uwir»wi.i»BM.iiiJ»i»Tiwi.iiil JC.IIH lurniiniiiin-iiijiin
JOIHT STATOBNT OF DQUGU0 BIU*(M$
mamrmi m
TOE TREASURY, AM© M V I B E. BELL,
©IIUCTOE op THE BURSALS OF THE BUDGET
OM ? u P C E 7 RESULTS FOR ?\*CAL tEAlf \<\(,Z
Hie monthly statement of receipts and expenditures for June,
released today, stows that Federal tmWtgft expenditures for the fiscal
year ending June 30, 1962* were $S7.7 billion. Budget receipts were
$81.4 billion, leaving a budget deficit of $6.3 billion,
ioth budget
receipts audi expenditures were less than estimated in January of this
famtj^ receipts by $0.7 billion,and expenditures by $1.4 billion.
§fr~..
m-mammy^ the budget deficits $0.7 billion less than the January
estimate of $7 billion.^
On * mmmlidmad
cash basis! ineluiinf the transections of Federal
trust funds amd Gawmamtw&~spanaawad enterprises^- addition to the
.. administrative bmigefj the excess of payments to the public over receipts
from the public in fiscal year 1962 was $$.7 billion.
Federal payments
to the public in fiscal year 1962 totaled $107.6 billion, or $3.6 billion
less than the January estimate.
Receipts from the public were $101.9
billion, $Q.& billion lower than the January estimates.
In tarma of the national income accounts*-including only transactions
directly affecting current production and incomes, and measuring receipts
and expenditures on an accrual^ rather than a cash basis~*prelimi»ary
estimates indicate expenditures of $/^£>
billion and receipts of $ /? r
billion, for a deficit in fiscal year 1962 of $ X
5 ~5~2>
billion, compared
1 1Q
•A. O 1^
RELEASE A.M. NEWSPAPERS
FRIDAY, JULY 20, 1962
JOINT STATEMENT OP DOUGLAS DILLON, SECRETARY OP THE TREASURY,
AND DAVID E. BELL, DIRECTOR OP THE BUREAU OP THE BUDGET,
ON BUDGET RESULTS FOR FISCAL YEAR 1962
The monthly statement of receipts and expenditures for June,
released today, shows that Federal budget expenditures for the fiscal
year ending June 30, 1962, were $87.7 billion. Budget receipts were
$81.4 billion, leaving a budget deficit of $6.3 billion. Both budget
receipts and expenditures were less than estimated in January of
this year — receipts by $0.7 billion, and expenditures by $1.4
billion. The budget deficit was $0.7 billion less than the January
estimate of $7 billion.
Budget receipts were significantly affected by the recession of
I96O-I961. If the economy had operated at its full potential, the
Federal Government would have realized a substantial surplus in the
fiscal year 1962.
On a consolidated cash basis — including the transactions of
Federal trust _funds__ and^ Government -sponsored enterprises — the
1 1K
«m* \*/ \&i>
ADMINISTRATIVELY CQNPIPiNTIAL
i. .in. mumh«mmimimmmm>mm^*mmmmmmim.in«amm«iiii:i<,m«i
i immmmtrntmimr
JOINT S T A H M N T OF DOUGLAS DILLON,
SECRETARY OF VM 1MASURY, AND DAVID E. BILL,
DJRBCTQR OF Tit! BUREAU OF THE IUDGBT
O W Bu T>ce-y RESULTS TOR Fi$Cf\L VfAf^ 1<\G2
The monthly statement of receipts and expenditures for June,
released today, shows that Federal budget expenditures for the fiscal
year ending Jisie 30, 1962, mara $*7«7 billion. Budget receipts were
$«1.4 billion* leaving a budget deficit of $6.3 billion. Beth budget
receipts and expenditures were less than estimated in January of this
yamtj^ receipts by $0.7 billion^and expenditures by $1.4 billion. §ar~
a-3?es»4t|/ the budget deficitBM $0.7 billion less than the January
£
)"vJiJt.,d"
estimate of $7 billion.
A
A^L-
INSERT —
Budget receipts were significantly affected b v t h e recession of
1960-1961. |^TT~Tinerap4eyment had^eeii only-^4"pe^6ent--^f.^the^.l__io
'budgetreceipts- wourd"have "amounted to about $91 pi^frtm^^n^ the
V tvJh^a%?-fawwtt ~
Federal Government would have\^e*aJiSteUafe»faft^urpj,us or.^auiJp hxll-an^f
in the fiscal year 1962.
*'*
'// _
3 5 .3
*&&•
1 ?Q
«£-
KJ
w
RELEASE A.M. NEWSPAPERS
FRIDAY, JULY 20, 1962
JOINT STATEMENT OF DOUGLAS DILLON, SECRETARY OF THE TREASURY,
AND DAVID E. BELL, DIRECTOR OF THE BUREAU OF THE BUDGET,
ON BUDGET RESULTS FOR FISCAL YEAR 1962
The monthly statement of receipts and expenditures for June,
released today, shows that Federal budget expenditures for the fiscal
year ending June 30, 1962, were $87.7 billion. Budget receipts were
$81.4 billion, leaving a budget deficit of $6.3 billion. Both budget
receipts and expenditures were less than estimated in January of
this year — receipts by $0.7 billion, and expenditures by $1.4
billion. The budget deficit was $0.7 billion less than the January
estimate of $7 billion.
Budget receipts were significantly affected by the recession of
196O-1961. If the economy had operated at its full potential, the
Federal Government would have realized a substantial surplus in the
fiscal year 1962.
On a consolidated cash basis — including the transactions of
Federal trust funds and Government-sponsored enterprises — the
excess of payments to the public over receipts from the public in
fiscal year 1962 was $5.7 billion. Federal payments to the public
in fiscal year 1962 totaled $107.6 billion, or $3.6 billion less
than the January estimate. Receipts from the public were $101.9
billion, $0.8 billion lower than the January estimates.
In terms of the national Income accounts — including only
transactions directly affecting current production and incomes, and
measuring receipts and expenditures on an accrual, rather than a
cash basis — preliminary estimates indicate expenditures of
$106 billion and receipts of $104 billion, for a deficit in fiscal
year 1962 of $2 billion, compared with the estimate of $0.5 billion
made last January. This change is almost entirely accounted for
by a reduction in receipts compared with the January estimate.
(These are preliminary estimates and are subject to change when the
official Department of Commerce figures are released.)
The following table shows the results for fiscal year 1962 as
compared with the estimates made last January in the budget
document, the results fdr 1961, and the changes from the January
estimates.
D-553
- 2 -
1Q 7
FEDERAL FINANCES
(Fiscal years. In billions)
1961
Actual
196;I
January
Actual
Estimate
$77.7
81.5
$82.1
89.1
$81.4
87.7
-$0.7
- 1.4
-3.9
-7.0
-6.3
/ 0.7
Consolidated cash statement:
97.2
Receipts from the public..
99.5
Payments to the public....
Excess of payments (-).
-2.3
102.6
111.1
101.9
107.6
-0.8
-3.6
-8.5
-5.7
/2.8
Description
Administrative budget:
Budget receipts
Budget expenditures
Budget deficit (-)
Change from
January
Estimates
Comparison of budget results with January estimates.
The reduction of $1.4 billion in budget expenditures below the
January estimate reflects a number of factors, among them
unanticipated changes in the rate of activity in certain programs,
and postponement by Congress of the enactment of certain appropriations
from fiscal 1962 to fiscal 1963. In addition, the reduction in
expenditures also reflects the continuing effort of the heads of the
various Government agencies to carry out the Presidents instructions
of last October "to follow a most careful and frugal policy with
respect to commitments and expenditures under the 1962 budget as
enacted by the Congress."
Among the more sizeable reductions in budget expenditures below
the January estimate were: $506 million lower outlays than had been
anticipated by the Commodity Credit Corporation for special export
programs and for the wheat and feed grain programs; $254 million
for the Department of Health, Education, and Welfare, mainly in
public assistance grants and health programs; $205 million for the
Housing and Home Finance Agency, mainly in activities of the
Federal National Mortgage Association; $205 million in foreign
economic and military assistance expenditures; and $168 million for
the Veterans Administration, primarily in housing benefit programs
and pensions. In addition, legislation to permit the purchase of
$100 million of U.N. bonds, assumed in the budget to occur In fiscal
year 1962, has not yet been enacted, thereby reducing anticipated
State Department expenditures. These reductions are partly offset by
higher expenditures for interest on the public debt (up $240 million
from
January
estimates) and for Export-Import Bank loan operations
(up $202
million).
1 o r>
JL w \J>
- 3 Although receipts from the individual income tax were $650
million larger than anticipated in January, this increase was more
than offset by lower corporation income taxes and miscellaneous
receipts than had been expected. Excises, estate and gift taxes,
and customs duties were moderately below estimates. With respect
to corporation income taxes, receipts were $904 million less than
estimated, reflecting somewhat lower profits for the calendar year
1961 than had been estimated in January. Miscellaneous receipts,
including such items as interest and repayments of certain loans,
proceeds of the sale of property and products, and various fees,
were $334 million less than expected.
The reduction from the January estimate of budget receipts
accounts for almost all of the change in receipts as shown in the
consolidated cash statement. The change in Federal payments to the
public, in addition to the lower level of budget expenditures, is
accounted for chiefly by (l) a reduction of $1.5 billion in
expenditures of trust funds, mainly the Federal National Mortgage
Association secondary market trust fund and the highway trust fund,
and (2) an increase of $1.4 billion over the estimate for the
non-cash adjustment items (interest accruals, transactions in
non-interest bearing notes with international financial organizations,
and the clearing accounts) which are deducted to arrive at total
payments to the public. Partially offsetting these reductions was
an increase of $0.6 billion in net expenditures of government
sponsored enterprises, almost entirely the result of the operations
of the Federal Home Loan Banks.
Comparison of budget results for 1962 with 1961
Budget expenditures in fiscal year 1962 were $6.2 billion higher
than in 1961. Of this amount, $4.3 billion or 70 percent was for
defense, international, and space programs, primarily reflecting
efforts to strengthen our military forces and to expand manned space
flight and other space exploration activities. In total, programs
designed to achieve our defense, International, and space objectives
accounted for over three-fifths of budget expenditures In 1962.
Other substantial increases over 1961 were for agricultural
programs; health, education, and welfare activities; housing;
interest payments; and resource development programs of the
Department of the Interior. Sizeable decreases occurred in the
Department of Labor, reflecting mainly lower expenditures than in
1961 for temporary extended unemployment compensation, and in the
Post Office Department.
Budget receipts rose by $3.7 billion between 1961 and 1962.
Increases of $4.5 billion in individual income tax receipts and $659
million in excise tax collections were partially offset by declines of
0O0 taxes and $890 million in
$469 million in corporation income
Germany,
miscellaneous
1961 because
amounting
of
receipts.
an to
advance
over
The
$500
loan
latter
million.
repayment
were unusually
by the Federal
large In
Republic
fiscalof
1 QQ
»lta w
^
Attachment
BUDGET RECEIPTS AND EXPENDITURES
(Fiscal years. In millions)
1962
Description
1961
actual
January
budget
Actual
Change from
January
budget
$50,620
21,296
9,669
3,192
3,205
5,987
+$650
-904
-41
-334
-146
-14
81,993
633
-763
-23
81,360
-74o
46,826
1,357
1,773
-24
-43
Receipts by source
Individual income taxes $46,153 $49,970
Corporation income taxes
21,765
22,200
Excise taxes
9,l4l
9,710
Miscellaneous receipts
4,082
3,526
All other receipts
2,924
3,351
Less: Refunds
5,752 . 6,001
Subtotal 78,313 82,756
Deduct interfund transactions
654
656
Net budget receipts 77,659 82,100
Expenditures by major agency
Military, International, and Space Agencies:
Department of Defense:
Military functions
43,227
Military assistance
l, 449
Foreign assistance - economic
1,805
Export-Import Bank of Washington
37
International financial institutions
and Peace Corps
74
State
258
U.S. Information Agency
121
Atomic Energy Commission
2,713
National Aeronautics and Space Admin. ..
744
Subtotal 50,428
Civilian agencies:
Legislative Branch and The Judiciary ...
Executive Office of the President
Funds Appropriated to the President Other
Agriculture:
CCC, and Special Export Program
Other
46,850
i,4oo
1,935
-101
101
-162
+202
182
453
147
183
299
146
+1
2,830
1,300
2,806
1,257
-1
-24
-43
54,996
54,748
-248
185
69
220
32
210
28
-10
-4
3
54
33
-21
3,407
2,523
4,753
2,424
4,247
2,420
-506
-4
-154
1962
Description
1961
actual
January
budget
Actual
Change from
January
budget
Expenditures by major agency - Cont.
Civilian agencies - Continued:
Commerce
Defense - Civil
Health, Education, and Welfare
Interior
Justice
Labor
Post Office
Treasury:
Interest on the public debt
Other
General Services Administration
Housing and Home Finance Agency
Federal Aviation Agency
Veterans Administration
Other independent agencies
District of Columbia
Subtotal 31,741 34,661 33,553 -1,108
Allowance for contingencies
Total 82,169 89,732 88,301 -1,431
Deduct interfund transactions
$498
972
3,685
801
284
831
914
$650
1,015
4,469
873
298
563
853
$594
999
4,215
908
294
613
787
-&6
-16
-254
+35
-4
+50
-66
8,957
996
387
502
638
5,401
638
50
8,900
1,073
501
940
708
5,560
685
90
9,l40
1,054
444
735
699
5,392
669
72
+240
-19
-57
-205
-9
-168
-16
-18
-
75
-
-75
654
656
633
-23
Total budget expenditures 81,515 89,075 87,668 -1,407
Budget surplus (+) or deficit (-) -3,856 -6,975 -6,308 +667
NOTE:—Figures are rounded to nearest million and will not necessarily add to total
July 19, 1962
141
Attachment
EXPLANATION OF MAJOR DIFFERENCES
BETWEEN ACTUAL 1962 EXPENDITURES
AND JANUARY ESTIMATES
Funds appropriated to the President—Foreign assistance—economic—
$16_ million less than the January estimate, primarily as a result
of a re-examination of projects in an effort to insure maximum
effectiveness of aid efforts in line with new program concepts
introduced last year.
Export-Import Bank—$202 million more than the January estimate, primarily
because portfolio sales and private participation were less than
anticipated.
Department of State—$154 million less than the January estimate, mainly
because legislation authorizing the purchase of United Nations bonds
and a supplemental request covering the U.S. assessment for the
UN operations in the Congo were not enacted for fiscal 1962 as
anticipated. In addition, reimbursements from other agencies for
overseas support provided by the Department were received earlier
than expected.
Department of Agriculture—Commodity Credit Corporation—$506 million
less than the January estimate, due to lower exports under Public
Law 480 and lower net expenditures for wheat and feed grain programs
than anticipated.
Department of Commerce—$56 million less than the January estimate,
reflecting primarily somewhat lower expenditures than anticipated
under the area redevelopment program.
Department of Health, Education, and Welfare—$254 million less than the
January estimate, of which $137 million is in public assistance
grants (reflecting primarily less than anticipated participation
in the program for aid to dependent children and smaller growth
than anticipated in medical assistance for the aged) and $94 million
is in National Institutes of Health and other Public Health Service
programs.
Department of Labor—$50 million more than the January estimate, primarily
because the delay in enacting the 1963 appropriation made necessary
an early advance to the unemployment trust fund to maintain the
current level of State employment security services.
142
2.
Post Office Department—$66 million less than the January estimate,
due to higher revenues than anticipated and increased efficiency
in the operation of local post offices.
Department of the Treasury—Interest on the public debt—$240 million
increase over the January estimate as a result of higher interest
rates than had been assumed.
General Services Administration--$57 million less than the January
estimate, due mainly to difficulties in obtaining favorable bids,
and delays in site selection, for certain construction projects.
Housing and Home Finance Agency—$205 million below the January estimate,
mainly because the Federal National Mortgage Association made lower
urban renewal commitments and greater portfolio sales than had been
estimated.
Veterans Administration—$168 million less than the January estimate,
primarily as a result of a decrease in direct housing and loan
disbursements; non-enactment of a supplemental request for veterans
pensions, in effect deferring payments until fiscal 1963; and
unanticipated sales of previously defaulted mortgages under the
housing loan guarantee program.
United Sutes Treasury Department
Fiscal Service
Bureau of Accounts
S 3
7 ^.
This statement is preliminary and is based on reports from disbursing, collecting, and administrative agencies of the Government
received through July 13, 1962. Final reports of Government disbursing, collecting, and administrative agencies including certain
overseas transactions for the year ended June 30, 1962, which it has not been possible to include in this statement will be incorporated in the final statement to be published at a later date.
Monthly Statement of
Receipts and Expenditures of the United States Governm
for the period from July 1,1961 through June 30,1962
(Cents omitted, therefor* details will not add to totals)
TABLE I--SUMMARY
Budget receipts and expenditures
Year
Gross receipts
Estimated 1963*
$118,581,000,000
Net
expenditures
Net receipts
1
$92,999,879,000
Public debt
a
Budget surplus (+) (end of period)
or deficit (-)
1
$92,536,633,000
Balance in
account of
Treasurer, U.S.
(end of period)
+$463,246,000
$294,920,000,000
$6,000,000,000
82,099,716,000
1
-6,975,753,000
295,370,000,000
6,000,000,000
81,360,367,259
10,430,393,548
Estimated 1962*
104,910,000,000
Actual fiscal year 1962
(twelve months)
103,786,301,777
1
1
-6,307,612,863
298,200,822,720
Actual fiscal year 1961
99,491,341,346
1
1
-3,855,742,548
288,970,938,610
6,694,119,953
1
1
Actual fiscal year 1960
96,962,198,070
+1,224,047,421
286,330,760,848
8,004,740,998
Actual fiscal year 1959
83,904,266,060
2
2
-12,426,986,751
284,705,907,078
5,350,391,763
77,659,424,905
77,763,460,220
67,915,348,624
89,075,469,000
87,667,980,122
81,515,167,453
76,539,412,798
80,342,335,375
TABLE II--BUDGET SUMMARY-FISCAL YEAR 1962
Fiscal year 1962 to date
Classification
Gross
receipts
Applicable
deductions 3
Net 4
receipts
Net budget
estimates
fiscal year 1962*
B U D G E T RECEIPTS
Total
B U D G E T EXPENDITURES
Funds appropriated to the President:
Other
Defense Department:
Health, Education, and Welfare Department
Labor Department
Treasury Department:
Other
B u r i W t eiirnlnc t-i.\ r»f Hofi/^if t-\
$99,423,453,317
1,171,205,973
3,191,642,486
$21,762,460,767
29,293,174
1,225,760
$77,660,992,550
1,141,912,799
3,190,416.725
$78,017,000,000
1,215,000,000
3.524.000.000
103,786,301,777
21,792,979,702
81,993,322,075
82,756,000,000
Gross
expenditures
Applicable receipts
(deduct)
$153,317,938
56,746,726
28,386,016
1,785,588,025
278,069,573
9,899,817,745
603,132,189
46,907,607,903
1,357,189,675
1,113,170,362
4,219,352,319
956,782,383
293,986,326
615,961,550
4,394,185,559
298,815,442
9,140,153,832
1,055,502,755
2,806,373,537
699,223,331
444,545,537
2,795,962,888
1,256,931,427
5,756,599,790
2,547,546,242
72,418,800
99,537,367,882
$12,276,228
62,116,363
3,232,589,518
9,229,586
81,251,946
113,839,075
4,217,981
48,320,175
3,075,275
3,606,726,668
1,876,659
340,854
2,060,834,572
364,609,456
1,635,128,581
11,236,432,943
632,954,816
656,284,000
81,360,367,259
82,099,716,000
Net
expenditures
$153,317,938
56,746,726
28,386,016
$160,718,000
59,008,000
32,162,000
1,773,311,797
215,953,210
6,667,228,226
593,902,603
46,826,355,956
1,357,189,675
999,331,286
4,215,134,338
908,462,208
293,986,326
612,886,274
787,458,890
298,815,442
9,140,153,832
1,053,626,095
2,806,373,537
699,223,331
444,204,682
735,128,316
1,256,931,427
5,391,990,334
912,417,661
72,418,800
88,300,934,938
1,935,000,000
236,035,000
7,176,582,000
649,508,000
46,850,000,000
1,400,000,000
1,014,606,000
4,468,710,000
872,712,000
297,843,000
852,600,000
562,899,000
452,629,000
8,900,000,000
1,073,139,000
2,830,000,000
708,000,000
500,698,000
940,277,000
1,300,000,000
5,559,904,000
733,720,000
90,003,000
75,000,000
89,731,753,000
632,954,816
656,284,000
87,667,980,122
89,075,469,000
-6,307,612,863
-6,975,753,000
TABLE HI-BUDGET RECEIPTS AND EXPENDITURES-JUNE 30, 1962
Classification
RECEIPTS
This month
Internal Revenue:
Individual income taxes:
Withheld 6
Other 6
7
Corresponding
month
last year
$2,994,266,861
7
1,985,480,716
$2,459,082,725
1,937,566,642
Total individual income taxes
4,979,747,578
Corporation income taxes
Excise taxes
5,377,044,053
1,122,839,622
Employment taxes:
Federal Insurance Contributions Act and
Self-Employment Contributions Act 6
Railroad Retirement Tax Act
Federal Unemployment Tax Act
Total employment taxes
Estate and gift taxes
Total internal revenue
Gross budget receipts
Deduct:
Refunds of receipts:8
Applicable to budget accounts:
Internal revenue
Customs
Other
Applicable to trust accounts:
Federal old-age and survivors insurance trust fund.
Federal disability insurance trust fund
Highway trust fund.
Railroad retirement account
Unemployment trust fund
Total refunds of receipts
Transfers to trust accounts:
Federal old-age and survivors insurance trust fund 6..
Federal disability insurance trust fund6
Highway trust fund
Railroad retirement account
,
Unemployment trust fund9
Total transfers to trust accounts
7
Corresponding
period
fiscal year 1961
$36,216,232,096
7
14,403,537,478
$32,977,654,306
13,175,346,485
4,396,649,367
50,619,769,574
46,153,000,791
5,245,769,302
1,062,321,062
21,295,692,054
12,748,591,032
21,764,940,001
12,064,302,041
71,012,979,915
56,550,569
1,474,155
1,126,989,732
44,526,983
1,098,807
'11,697,919,611
569,991,599
457,630,273
11,586,283,169
570,812,008
345,356,082
1,071,004,641
1,172,615,523
12,725,541,485
12,502,451,261
164,378,751
145,459,908
2,033,859,170
1,916,392,301
12,715,014,646
12,022,815,164
99,423,453,317
94,401,086,397
99,725,832
83,668,525
1,171,205,973
1,007,755,214
267,436,728
70,359,367
12,086,551
18,871,252
9,790,041
92,969,478
3,542,794
24,980,899
500,037,113
317,358,312
60,909,398
-4,360,896
48,599,227
55,443,002
107,255,286
4,233,401
32,222,741
621,660,473
867,142,351
743,312,210
375,983,771
154,251,343
72,808,343
651,456,327
57,543,755
269,144,382
3,191,642,486
942,308,256
804,788,935
1,012,277,260
181,631,675
114,176,273
673,066,072
55,378,802
298,872,456
4,082,499,734
13,314,777,592
12,728,144,164
103,786,301,777
99,491,341,346
229,891,111
2,508,346
75,703
238,906,318
2,415,557
171,963
5,956,926,251
29,293,174
1,225,760
5,724,571,444
25,439,531
2,260,572
129,760,000
11,907,500
131,302,902
55,959
4,991,080
6,265,462,628
86,240,000
9,500,000
125,703,141
99,015
2,195,526
5,976,009,230
10,611,713,508
7
944,538,603
2,948,690,128
569,935,640
452,639,192
15,527,517,073
10,537,230,761
953,312,407
2,797,537,780
570,712,993
343,160,556
15,201,954,500
Customs
Miscellaneous receipts:
Interest
Dividends and other earnings
Realization upon loans and investments.
Recoveries and refunds
Royalties
Sales of Government property and products
Seigniorage
Other
Total miscellaneous receipts
Fiscal Year
1962
to date
33,574
550,812
268
323,810
233,059,547
241,817,919
927,534,923
85,444,992
233,200,000
56,516,995
923,342
1,303,620,253
1,025,183,984
101,805,747
238,400,000
44,526,714
774,996
1,410,691,443
Total deductions
1,536,679,801
1,652,509,362
21,792,979,702
21,177,963,731
Subtotal receipts
11,778,097,791
11,075,634,801
81,993,322,075
78,313,377,614
212,215,825
244,911,338
632,954,816
653,952,708
11,565,881,965
10,830,723,463
81,360,367,259
77,659,424,905
Deduct: Certain interfund transactions
x
Net budget receipts
EXPENDITURES
7
7
10
Legislative Branch:
Senate
House of Representatives
Architect of the Capitol
Botanic Garden
Library of Congress
Government Printing Office:
General fund appropriations
Revolving fund (net)
Total—Legislative Branch
The Judiciary:
Supreme Court of the United States
Court of Customs and Patent Appeals
Customs Court
Court of Claims
Courts of appeals, district courts, and other judicial
services
Total—The Judiciary
See footnotes on pages 9 and 13
2,297,154
3,874,184
5,226,762
38,166
2,061,642
1,289,918
-202,421
2,348,861
4,498,739
4,811,425
77,336
1,780,487
1,951,129
-1,091,662
26,899,259
50,322,180
42,265,202
449,931
16,580,877
19,401,027
-2,600,541
26,876,543
47,323,805
31,434,476
833,958
15,360,184
15,850,464
-4,205,220
14,585,407
14,376,316
153,317,938
133,474,212
201,415
29,994
109,915
101,322
201,004
-122,767
94,151
83,426
1,961,569
323,833
887,875
932,896
1,975,021
330,093
851,106
896,592
5,485,108
4,503,701
52,640,552
47,949,910
5,927,756
4,759,516
56,746,726
52,002,724
T A B L E III—BUDGET RECEIPTS A N D EXPENDITURES-JUNE 30, 1962-Contlnued
Classification
This month
EXPENDITURES—Continued
Executive Office of the President:
Compensation of the President
The White House Office
Special projects
Bureau of the Budget
Council of Economic Advisers
National Aeronautics and Space Council
National Security Council
Office of Emergency Planning.
President's Advisory C o m . on Govt. Organization ...
President's Adv. C o m . on Labor-Mgmt. Policy
Miscellaneous.
Total—Executive Office of the President
Funds appropriated to the President:
Disaster relief
Emergency fund for the President
Expansion of defense production (net)
Expenses of management improvement
Peace Corps
International Financial Institutions:
Subscription to the International Development Assn
Investment in Inter-American Development Bank ..
Transitional grants to Alaska
Other
Foreign assistance - economic:
Defense Department
Agency for International Development
Inter-American Cooperation
Public enterprise funds (net):
Development loan funds
Foreign investment guarantee fund
All other agencies
Total--Foreign assistance - economic
Total—Funds appropriated to the President
Agriculture Department:
Agricultural Research Service:
Intragovernmental funds (net)
Other
Extension Service
Farmer Cooperative Service.
Soil Conservation Service:
Conservation operations
Flood prevention, watershed protection and other..
Great Plains conservation program
Economic Research Service
Statistical Reporting Service
Agricultural Marketing Service:
Marketing research and service
Payments to States and possessions
School lunch program
Removal of surplus agricultural commodities
Intragovernmental funds (net)
Other
Total—Agricultural Marketing Service
Foreign Agricultural Service
Commodity Exchange Authority
Agricultural Stabilization and Conservation Service:
Acreage allotments and marketing quotas
Agricultural conservation program
„
Soil bank program
Emergency conservation measures
Sugar act program
Intragovernmental funds (net)
Special export programs
Commodity Credit Corporation:
Public enterprise funds (net):
Price support, supply, and related programs
and special milk 12
Special activities financed by C o m . Credit Corp.-1
Total—Commodity Credit Corporation
Federal Crop Insurance Corporation:
Administrative expenses
Federal Crop Insurance Corporation fund (net)
Rural Electrification Administration:
Loans
Salaries and expenses
See footnotes on page 13
$12,500
171,221
150,442
473,502
65,622
22,757
23,833
946,790
21,332
10,506
Corresponding
month
last year
Fiscal Year
1962
to date
$12,500
163,092
127,652
437,149
38,181
Corresponding
period
fiscal year 1961
6,352
6,413
$150,000
2,453,815
1,403,420
5,303,520
506,450
202,901
502,737
17,772,381
108,051
-17,263
793,665
58,694,281
31,235
6,490
-28,595
1,898,509
5,477,699
28,386,016
69,042,200
2,766,845
5,493
-829,249
30,049
2,217,150
274,719
108,780
-30,313,609
2,609
14,592,345
723,334
11,225,567
153,918
11,106,420
7,455,766
489,654
-12,395,899
232,207
61,655,825
110,000,000
5,944,016
551,781
73,666,700
57,996
4,628,360
$150,000
2,331,628
1,382,484
5,260,490
420,520
33,175
57,141
123,080
145,763
136,032
71,357,487
7,115,554
1,650,764
122,054,921
7,390,787
1,083,641,938
62,295,560
33,512,312
1,320,187,808
54,392,885
-324,100
16,605,215
41,464,980
-184,790
7,754,340
419,778,774
-1,649,612
201,854,349
258,413,699
-1,672,830
194,943,148
149,283,074
172,740,216
1,773,311,797
1,805,384,138
153", 563,680
143,081,559
1,989,265,007
1,881,989,670
-83,983
13,465,758
777,270
83,179
-5 449
13,065^082
767,706
76,292
-116,876
195,303,722
70,254,376
642,146
81,111
185,435,437
67,340,666
636,823
7,259,058
5,865,565
830,349
810,619
707,490
1,677,744
16,648
407,339
15,237,632
16,696
59,237
6,241,532
4,192,016
946,206
86,887,443
50,156,544
8,635,425
2,003,269
12,798
646,772
32,847,376
11,744
57,429
89,014,929
58,988,547
9,041,592
8,179,958
7,690,562
37,882,730
1,325,000
169,112,351
214,867,645
23,057
736,235
45,819,676
1,195,000
154,358,512
203,286,837
55,699
794,602
17,415,299
35,579,392
423,947,019
405,510,327
1,517,141
79,195
2,061,805
77,321
14,595,932
1,006,436
13,530,380
964,436
9,862
11,149,548
-1,993
128,880
2,619,496
7,263,241
220,804,779
216
7,988,687
190,004
40,417
747,356
14,346,665
44,084,315
264,500,924
343,983,198
8,796,551
80,187,839
-9,791,044
1,636,655,784
43,532,446
249,743,910
363,211,940
549,200
72,220,207
-3,237,951
259,193,481
3,889,555
216,303,949
400,184,883
2,536,769,541
73,956,066
1,417,528,868
1,989,080,738
263,083,036
616,488,832
2,610,725,607
3,406,609,607
658,995
-1,129,553
-123,165
-1,221,817
7,897,131
-664,988
6,636,044
-6,800,513
22,128,441
778,337
22,076,143
788,675
293,044,363
9,920,202
291,477,644
9,901,243
48,758
11
6,033,269
1,123,833
-6,607
TABLE lll-BUDGET RECEIPTS A N D EXPENDITURES-JUNE 30, 1962-Continued
Classification
EXPENDITURES—Continued
This month
Agriculture Department—Continued
F a r m e r s H o m e Administration:
Regular loans
Rural housing grants and loans
Public enterprise funds (net):
Direct loan account
E m e r g e n c y credit revolving fund
Agricultural credit insurance fund
Salaries and expenses
Total—Farmers Home Administration
Office of General Counsel
Office of Information
Centennial observance of Agriculture
National Agricultural Library
General administration:
Intragovernmental funds (net)
Other
Forest Service:
Acquisition of lands, Klamath Indians
Intragovernmental funds (net)
Other
Total—Agriculture Department
<
Commerce Department:
General administration:
Public enterprise funds (net)
Other
A r e a Redevelopment Administration:
Public enterprise funds (net)
Other
Business activities:
Salaries and expenses:
Office of Field Services.
Business and Defense Services Administration
Bureau of Foreign C o m m e r c e
Promotion of international travel
Export control
Intragovernmental funds (net).
Office of Business Economics
Bureau of the Census
Coast and Geodetic Survey
Inland Waterways Corporation (net)
Maritime Administration:
Public enterprise funds (net)
Other
Patent Office
Bureau of Public Roads:
Advances to the highway trust fund
Other 1 4
National Bureau of Standards:
Intragovernmental funds (net).
Other
Weather Bureau
Total—Commerce Department
Defense Department:
Military functions:
Military personnel:
Office of Secretary of Defense
Department of the A r m y
Department of the Navy
Department of the Air Force
Total—Military personnel
Operation and maintenance:
Office of Secretary of Defense
Department of the A r m y
Department of the Navy
Department of the Air Force
Subtotal
15
Classification adjustment
Total—Operation and maintenance
Procurement:
Office of Secretary of Defense
Department of the A r m y
Department of the Navy
Department of the Air Force
Subtotal
15
Classification adjustment
Total—Procurement
Corresponding
month
last year
Fiscal Year
1962
to date
Corresponding
period
fiscal year 1961
$3,604,005
$1,716,806
9.991.055
878,066,350
106,214,115
$267,198,988
57,651,287
5,405,386
1,820,032
-3,754,756
2,650,694
38,719
2,857,706
1.722.971
-6,444,911
35,440,582
-7,216,385
34,138,938
1,475,377
-6,143,952
32,641,786
9,725,361
16,327,258
240,198,690
352,823,487
298,205
123,388
3,628
83,027
281,558
91,545
3,409,299
1,574,353
85,848
3,610,838
1,595,131
40,680
1,009,593
-7,116
227,381
-62,875
241,570
-472,548
3,002,887
76,503
3,028,821
-309,906
14,689,319
-922,593
15,365,628
601,637
249,753,081
68,716,691
-560,295
246,385,436
601,053,306
755.780.623
6,667,228,226
5,929,416,188
640
797,300
-700
287,041
-6,982
9,942,159
-7 447
3,738!240
946,120
-1,041
7,312,501
1,830,017
2,604,575
4,601,503
2,995,537
98,316
1,933,807
2,339,436
156,496
4,392
118,638
1,858,229
1,346,960
-163,878
16,657,622
1,964,021
-329,534
12,818,867
1.622.480
3,098,805
4,128,676
4,429,304
1,464,500
3,375,493
440
1,549,468
19,240,719
21,649,723
-853,877
-2,502,731
360,866,394
24,860,648
3,681,083
4,792,351
41,326,495
45,732,706
900,015
2,870,821
5,540,616
662,832
1,792,651
4,638,710
-805,141
30,490,489
64,336,557
-119,151
22,298,828
55,592,399
39,377,508
30,534,477
593,902,603
498,488,731
73,775,848
463,979,533
354,784,348
373,231,063
69,246,115
408,376,819
292,231,697
352,759,610
890,845,403
4,409,734,449
3,459,143,756
4,304,914,633
786,066,838
4,036,564,049
3,252,281,788
4,009,915,015
1,265,770,794
1,122,614,243
13,064,638,242
12,084,827,692
13,567,823
325,107,447
262,963,537
460,015,831
5,208,716
307,075,915
282,155,281
410,552,890
58,265,206
3,861,812,102
3,047,225,223
4,654,140,857
45,517,604
3,411,975,340
2,868,017,827
4,440,473,140
1,061,654,640
1,004,992,803
11,621,443,390
10,765,983,912
-4,096,000
-13,151.000
-44,914,000
-154.521,000
247,850
-72,985
.295,496
343,843
113,482
276,726
208,716
279,615
2,933,487
-1,025
1,482,671
33,624,267
18,059,345
-393
-2,260,494
284,076,858
23,136,821
1,057,558,640
991,841,803
11,576,529,390
10,611,462,912
144,549,864
553,997,198
913,708,924
118,344,750
443,426,053
845,690,109
1,798,472,380
5,232,096,710
8,877,135,616
1,526,180,437
4,724,969,752
8,691,242,645
1,612,255,987
1,407,460,913
15,907,704,707
14,942,392,835
-13,118,000
-1,284,311,000
-213,818,000
1,394,342,913
IA coi ino nnn
-1,235,027,000
377,228,987
" ° 5 574,835
TABLE MI-BUDGET RECEIPTS AND EXPENDITURES-JUNE 30, 1962-Continued
Classification
EXPENDITURES—Continued
Defense Department—Continued
Military functions—Continued
Research, development, test and evaluation:
Total--Research, development, test and evaluation
Military construction:
This month
Corresponding
month
last year
$22,874,065
134,966,943
123,335,154
156,467,565
$181,365,187
1,246,688,247
1,298,431,940
2,174,506,370
$195,575,595
1,081,728,843
1,191,812,953
1,659,463,993
4,128,581,386
514,001,365
437,643,729
4,900,991,746
1,239,123,000
26,269,000
1,329,225,000
368,339,000
1,753,124,365
463,912,729
6,230,216,746
4,496,920,386
1,200,461
12,364,377
17,018,404
85,836,421
4,454,819
30,958,079
28,824,830
79,520,240
54,673,655
205,793,729
189,820,643
895,794,691
38,817,283
275,523,506
276,227,428
1,014,644,590
116,419,663
143,757,969
1,346,082,719
1,605,212,809
90,435,886
1,508,152
4,774,606
28,390,674
38,737,505
-9,759
-9,854
-31,067
-25,344
-130,759
-24,586
-242,672
439,997
46,664
-27,962
68,832
3,027,624
-90,269
-479,785
-136,589
-10,086
-9,678
-118,602
-13,351
-3,754,241
24,710
-544,384
-64,291
-13,811,716
-66,665,854
4,300,607
-32,304,937
-106,516,611
-45,995,818
-20,573,833
9,845,552
-52,081,498
-19,086,152
-132,365,533
58,933,015
-39,864,459
-104,940,737
-201,412,876
-98,396,300
-37,502,028
4,477,336,841
4,064,388,162
46,826,355,956
43,226,932,626
-149,824
2,532,145
169,598,369
39,637,363
67,143,333
190,140
329,519
279,281,047
-2,018,013
14,471,543
138,710,021
33,454,977
117,695,379
803,178
363,976
303,481,063
-14,571,552
39,165,626
609,617,654
181,466,930
531,562,668
2,774,087
7,174,259
1,357,189,675
-17,567,451
141,946,409
643,942,535
168,426,073
501,343,740
4,019,310
6,519,715
1,448,630,334
4,756,617,888
4,367,869,226
48,183,545,632
44,675,562,961
102,996,045
266,305
111,430,875
-815,463
946,157,625
889,662
931,638,631
-5,501,809
2,112,893
1,938,511
23,523,889
22,627,462
5,902,416
2,255,894
Department of the A r m y :
Department of the Navy:
Defense production guarantees
Other.
Department of the Air Force--Defense
Intragovernmental funds:
Office of Secretary of Defense
Department of the Navy
Total—Revolving and management funds........
Military assistance:
Office of Secretary of Defense:
Other.
Department of the Navy.
Department of the Air Force
All other agencies.
Total--Military assistance.
Total--Military
.
Civil functions:
Army:
Corps of Engineers:
Rivers and harbors and flood control.
The P a n a m a Canal:
Canal Zone Government
P a n a m a Canal Company:
Corresponding
period
fiscal year 1961
$21,289,999
139,813,098
128,031,693
224,866,574
13,751,001
Revolving and management funds (net):
Public enterprise funds:
Fiscal Year
1962
to date
-300,066,008
Thatcher Ferry Bridge .....................
3,869,343
475,554
2,803,168
703,166
2,124,602
10,405,093
Total—The P a n a m a Canal.................
6,457,791
5,444,846
36,053,585
30,785,773
1,982,257
2,224
1,341,403
1,930
22,536
16,178,355
29,521
159,801
15,246,265
29,580
111,704,623
117,403,592
999,331,286
972,358,244
45,647,921,206
Other.
Air Force—Wildlife conservation, etc.
Total--Defense Department
Health, Education, and Welfare Department:
Food and Drug Administration
Office of Education:
Assistance for school construction
Defense educational activities
Payments to school districts
c
Other
Office of Vocational Rehabilitation
Public Health Service:
Hospital construction activities
Emergency health activities
National Institutes of Health
Operation of commissaries, narcotic hospitals (net)
Total—Public Health Service
4,868,322,512
4,485,272,818
49,182,876,918
1,787,271
1,615,473
21,485,597
18,737,432
56,490,195
181,358,520
226,418,756
78,478,005
84,712,787
166,034,355
3,311,405
580,659,421
1,867
277,797,735
1,027,804,784
71,041,730
143,138,836
207,748,648
68,844,781
70,488,776
5,122,889
12,046,871
26,103,309
1,703,424
2,004,047
15,220,133
214,859
44,980,285
-6,450
25,211,521
85,620,350
7,463,319
11,009,248
31,623,199
1,394,771
2,343,321
12,592,467
D 4 j \rx*£j 0*71
-9,276
22,504,186
90,029,969
158,184,891
442,447,872
-8,655
255,662,076
856,286,184
TABLE lll-BUDGET RECEIPTS A N D EXPENDITURES-JUNE 30, 1962--Continued
Classification
EXPENDITURES—Continued
Health, Education and Welfare Dept—Continued
Saint Elizabeths Hospital
Social Security Administration:
Grants to States for public assistance
Grants for maternal and child welfare
Operating funds, Bureau of Federal Credit Unions (net)
Other
Special institutions:
A m e r i c a n Printing House for the Blind.
Freedmen's Hospital
Gallaudet College
H o w a r d University
Office of the Secretary:
Intragovernmental funds (net)
Other.
Total—Health, Education, and Welfare Dept
Interior Department:
Public Land Management:
Bureau of Land Management
Bureau of Indian Affairs:
Public enterprise funds (net):
Revolving fund for loans
Other
Other
National Park Service
.Bureau of Outdoor Recreation
Office of Territories:
Public enterprise funds (net)
Other
T h e Alaska Railroad (net)
Mineral Resources:
Geological Survey.
Bureau of Mines:
Public enterprise funds (net)
Other
Office of Coal Research
Office of Minerals Exploration
Office of Oil and G a s
Office of Minerals Mobilization.
Fish and Wildlife Service:
Office of Commissioner of Fish and Wildlife........
Bureau of Commercial Fisheries:
Public enterprise funds (net)
Other
Bureau of Sport Fisheries and Wildlife
Water and Power Development:
Bureau of Reclamation:
Public enterprise funds (net):
Continuing fund for emergency expenses,
Fort Peck project, Montana
Upper Colorado River Basin fund
Other
Total—Bureau of Reclamation
This month
Corresponding
month
last year
Fiscal Year
1962
to date
$7,523,933
Corresponding
period
fiscal year 1961
$679,752
$812,947
190,827,805
1,511,889
22,381
797,029
189,168,280
317,018
28,787
677,349
2,432,140,618
68,250,586
-162,039
7,181,871
2,166,986,232
51,521,846
-139,072
5,818,982
349,088
99,095
680,870
152,467
130,001
573,754
670,000
3,492,627
3,167,195
7,788,839
400,000
3,415,984
1,678,385
6,294,253
156,598
1,215,882
-16,402
722,415
-344,525
8,676,583
33,666
7,192,008
330,728,556
338,045,923
4,215,134,338
3,684,704,724
3,714,515
3,748,652
97,653,603
91,741,102
387,946
-560
13,046,684
7,802,974
16,867
152,446
-260
10,417,493
7,456,723
1,786,564
-2,856
147,878,054
93,590,984
18,814
266,261
689
131,008,808
90,191,068
8,210
105,431
-79.216
-10,784
155,610
18,293
6,234
22,959,568
-1,362,956
-34,485
17,404,235
-109,316
3,865,278
3,000,584
50,838,349
44,332,104
1,067,972
2,475,988
40,997
46,406
39,525
419,862
2,681,785
15,584
24,894
40,600
955,117
33,493,830
372,685
380,362
510,108
941,397
31,827,501
46,677
392,298
504,454
$5,216,047
125
87
342,469
32,832
34,045
353,046
47,810
1,991,256
5,233,120
290,784
1,218,056
5,060,092
952,689
23,604,949
54,522,786
175,475
8,974,843
18,357,319
79,162
7,274,825
19,949,546
-2,486,145
92,252,689
242,194,344
-1,547,065
56,978,620
210,638,868
27,507,638
27,303,534
331,960,888
266,070,423
2,348,052
A 25,544
404,663
398,673
2,985,143
22,167
497,149
302,194
29,590,071
361,593
5,639,994
4,113,561
36,631,922
423,263
5,715,426
3,346,044
Secretarial Offices:
Office of the Solicitor
Office of the Secretary
286,725
393,732
241,390
312,640
3,493,033
3,174,235
3,356,029
2,758,561
Virgin Islands Corporation (net)
131,770
677,840
1,616,892
3,483,750
71,340,845
67,066,613
908,462,208
801,448,153
4,576,564
10,254,372
5,113,347
4,592,714
9,793,900
4,972,200
51,791,233
126,482,636
63,213,360
48,144,223
125,048,090
6i;984,575
-121,921
4,430,924
-600,085
4,117,053
-4,301,571
56,800,667
-2,871,150
51,920,052
24,253,286
22,875,784
293,986,326
284,225,7j0
872,594
452,501
-247,562
319,902
238,647
48,456
406,800
43,386
351,487
8,683,514
5,144,470
215,910
3,824,395
2,973,015
606,077
4,687,329
1,937,673
5,656,110
Bonneville Power Administration
Southeastern Power Administration i
Southwestern P o w e r Administration
Office of Saline Water
Total—Interior Department
Justice Department:
Legal activities and general administration
Federal Bureau of Investigation ... „
Immigration and Naturalization Service
Federal Prison System:
Federal Prison Industries, Inc. (net)
Other
Total—Justice Department
Labor Department:
Office of the Secretary
Bureau of Labor-Management Reports
Bureau of International Labor Affairs
Office of the Solicitor
Bureau of Labor Standards
Bureau of Veterans' R e e m p l o y m e n t Rights
Bureau of Apprenticeship and Training
234,519
190,561
43,275
329,818
1,171,912
15,952,978
53,682,447
2,824,872
2,638,364
638,710
4,309,574
TABLE HI-BUDGET RECEIPTS AND EXPENDITURES-JUNE 30, 1962-Continued
Classification
EXPENDITURES—Continued
Labor Department—Continued
Bureau of Employment Security:
Grants to States for unemployment compensation and
employment service administration
Advances to employment security administration
account, unemployment trust fund (net)
Payment to the Federal extended compensation account.
Unemployment compensation for Federal employees
and ex-servicemen
F a r m labor supply revolving fund (net)
Temporary unemployment compensation
Other
•
Total—Bureau of Employment Security
Bureau of Employees' Compensation
Bureau of Labor Statistics
Women's Bureau
W a g e and Hour Division
This month
Corresponding
month
last year
Fiscal Year
1962
to date
Corresponding
period
fiscal year 1961
$43,289
$2,163,945
$79,500,000
7,614,516
$40,589,611
268,138,622
24,528,517
332,921,543
48,589,611
498,138,622
11,209,773
187,945
171,042,688
-788,218
-399,238
3,123,964
721,871,375
202.832
15,519,114
65,291
-78,682
200.017
98,715,067
324,433,975
129,359,488
-366,095
-177,618
2,613,004
488.922.130
Total—Labor Department
5,347,042
1,234,162
2,240
1.236.399
108,626,255
5,691,485
865,539
43,825
883.786
333,lll,f
67,699,432
14,335,325
576,575
15.218.095
612,886,274
65,585,374
12,298,901
541,079
12.229.991
830,532,028
Post Office Department:
Payment for public services
Public enterprise fund (net)—Postal fund
6,200,000
109.317.209
4,698,000
114,573.735
62,700,000
724,758,890
49,000,000
864,984,797
Total—Post Office Department
115,517,209
119.271.735
787,458,890
913.984.797
-18,242,268
19,656,102
115,864,793
126,201,365
857,841
1,796,446
16,797,079
15,441,922
155,568
205,338
263,638
595.777
204,837
3,933.447
2,540,000
101,183
7,599,505
-17,023,518
22,311,965
136,800,157
151.883.976
328,147
296,267
999,942
7,384,910
146,390
-7,867,861
-1,061
683,373
598,942
2,169,790
202.198
25,965,208
93,820,110
4,044,816
12,501,580
47,475,699
4,173,078
298,815,442
48,270,956
4,398,527
6,939,787
37,336,620
9,086,323
257.916.190
-434,981
-274,566
-7,808
13,828
328,235
98,849
-331,930
-1,380,181
-274,101
-137,626
-77
4,193,517
10,356,843
-3,951,550
398,892
186
1,266,140
1,024,924
43,749
1,358,536
385
2,825,356
43,141,237
67,252
28,146,771
1,247
1,219,234
4,791
2,113,674
-80
15,710,499
10,068,147
1,216,262
28,998,047
86,093
24,115,069
665
47,259,838
10,849
16,737,263
214,834
4,867,365
407,221
4,377,216
62,695,815
58,895,596
5,083,361
1,748,845
36,507,320
348,418
529,707
429,253
18,247
20,853
6,712,917
2,891,152
33,173,322
324,527
488,642
482,417
-473,246
72,300
67,804,128
29,776,857
443,936,179
4,355,934
6,709,258
7,312,066
-20,169
644,393
82,748,629
24,998,475
408,091,669
4,276,084
6,262,501
5,798,537
568,752
123,731
628,717
27.960.494
2,631,786
27.513.185
302,288
283.139.069
51,125
276.154.279
713,989,490
127,839,774
637,904,527
120,460,877
7,878,027,356
1,262,126,476
7,707,133,618
1,250,107,996
841.829.264
758.365.405
9,140.153.832
8.957.241.615
926,010,179
844,401,367
10.193,779,928
9.953.170.896
250.174.160
241,566,132
2.806.373,537
2.713,464,816
65,294,490
55.183.043
699.223.331
638.464.545
State Department:
Administration of foreign affairs:
Salaries and expenses
Acquisition, operation and maintenance of buildings
abroad
Payment to Foreign Service retirement and disability
fund
Intragovernmental funds (net)
Other
Total—Administration of foreign affairs
International organizations and conferences:
Contributions to international organizations
Other
International commissions
Educational exchange
Other
Total—State Department
Treasury Department:
Office of the Secretary:
Public enterprise funds (net):
Reconstruction Finance Corp. liquidation fund ....
Federal F a r m Mortgage Corp. liquidation fund ....
Civil defense program fund
Intragovernmental funds (net)
Other
Bureau of Accounts:
Interest on uninvested funds
Payment to Unemployment trust fund
Claims, judgments and relief acts
Government losses in shipment fund (net)
Salaries and expenses
Other
Bureau of the Public Debt
Office of the Treasurer:
Check forgery insurance fund (net)
Other
Bureau of Customs:
Intragovernmental funds (net).
Other
Internal Revenue Service:
Interest on refunds of taxes
Payments to Puerto Rico for taxes collected
Salaries and expenses
Bureau of Narcotics
United States Secret Service
Bureau of the Mint
Bureau of Engraving and Printing:
Intragovernmental funds (net)
Other
Coast Guard:
Intragovernmental funds (net)
Other
Interest on the public debt:
Public issues 18
Special issues l8
Total—Interest on the public debt
Total—Treasury Department
Atomic Energy Commission
Federal Aviation Agency
3,214,235
"lii'687
287,317
118,802
47,146,219
-137,474
1,273
3,555,412
TABLE MI-BUDGET RECEIPTS AND EXPENDITURES-JUNE 30, 1962—Continued
8
Classification
EXPENDITURES—Continued
General Services Administration:
Real property activities:
Personal property activities:
Defense materials activities:
General activities:
Housing and H o m e Finance Agency:
Office of the Administrator:
Public enterprise funds (net):
This month
Corresponding
month
last year
Fiscal Year
1962
to date
171,336,419
59,012,376
-15,210,581
203,276,291
31,859,991
33,508,864
8,521,341
13,955,353
3,446,223
-85,955
-903
33,629,600
$68,983,369
49,422,017
3,031,387
187,797,001
-4,521,223
31,046,913
1,473,895
13,809,998
2,495,138
3,134,623
16,874,276
3,823,562
17,921,816
5,532,855
6,656,357
1,849,345
158,276
975,416
164,468
220
-2,497
2,571,930
-602
1,338,371
126,860
-502
1,522,572
91,603
-195,275
-353,829
1,504,767
-1,864,417
-309,365
893,352
52,981,293
48,139,700
444,204,682
386,923,619
41,451,242
-191,669
33,356,596
1,484,203
2,178,829
78,279,202
26,206,066
-268,252
14,035,323
1,177,637
1,207,510
42,358,284
227,341,207
-5,650,957
226,948,690
30,484,377
19,485,432
498,608,750
198,175,318
-87,622,468
144,537,576
9,955,039
13,849,656
278,895,123
-20,820,000
-22,118,567
-28,322,438
-9,610,000
-9,485,467
-3,137,769
-185,341,005
55,923,793
-74,447,575
133,686,908
-71,261,006
-22,233,236
-129,417,212
75,239,332
1,761,752
9,159,523
4,085,341
10,422,777
201,106,369
164,830,408
-7,230,305
154,985,748
17,939,472
34,633,167
735,128,316
501,889,899
141,951,495
87,863,166
1,256,931,427
744,308,502
327,996,011
353,913,738
3,897,724,580
4,074,401,692
-5,951,677
-22,911,398
-3,047,884
101,985,275
398,070,327
4,780,229
-4,394,516
95,373,383
-21,262,283
1,195,808,614
449,672,834
92,786,740
143,534,361
14,164,740
1,243,779,911
5,391,990,334
15,627
22,466
200,349
708,879
7,221,472
277,131
4,437
1,742,818
7,485,385
90,795,022
137,706
108,082
2,445,816
19,307,075
85,540,727
44,637,000
46,329,000
2,500,000
1,625,000
23,988,422
£8,046,769
4,061,371
18,683,475
4,027,873
9,370,046
1,944,726
746,092
1,010,081
491,484
119
Federal National Mortgage Association (net):
Subscription to capital stock, secondary market
Total—Federal National Mortgage Association ....
National Aeronautics and Space Administration
Public enterprise funds (net):
Other independent agencies:
Advisory Commission on Intergovernmental Relations .
-653,189
75,026
35,243,715
16,000,000
Veterans Administration:
Other
Corresponding
period
fiscal year 1961
26,446
54,869
390,074
8,011,862
Civil Service Commission:
Payment to Civil Service retirement and disability
152,372,590
5,401,320,614
Government payment for annuitants, employees
1,664,492
1,727,714
2,877,000
13,800,000
24,161,969
1,664,492
1,727,714
85,475,969
74,442,422
6,138
74,194
5,514
76,378
67,937
744,309
60,687
814,981
-6,778,575
1,423,727
101,086,544
37,390,336
1,400,000
1,411
-50,000
-692,966
3,535,000
-11,469,900
-1,736,474
3,910,000
-8,052,400
1,400,000
186,164
-48,588
186,298
-8,627,866
2,453,189
-5,878,874
2,459,150
1,586,164
137,710
-6,174,676
-3,419,723
4,409
1,143,672
4,704
924,188
58,107
13,370,389
54,644
11,948,183
-90,258,371
207,300
-5,796,742
238,412
-246,282,970
-506,393
-35,192,004
92,511
Government contribution, retired employees health
F a r m Credit Administration:
Public enterprise funds (net):
Federal H o m e Loan Bank Board (net):
Federal Savings and Loan Insurance Corp. fund ....
TABLE MI-BUDGET RECEIPTS AND EXPENDITURES-JUNE 30, 1962—Continued
Classification
EXPENDITURES—Continued
Other independent agencies—Continued
Interstate Commission on the Potomac River Basin...
Outdoor Recreation Resources Review Commission...
Railroad Retirement Board—payment to railroad
Saint Lawrence Seaway Development Corporation (net).
Small Business Administration:
Other
Subversive Activities Control Board
United States Information Agency:
District of Columbia:
Federal payment to District of Columbia
Loans to District of Columbia (stadium fund)
This month
$127,451
366,257
706,988
821,880
66,372
3,224,733
8,472
22,578
2,510,501
2,951
40,618
83,237
1,527,217
110,384
19,067,561
32,247
175,317
206,185
918,172
2,946,810
21,625,304
1,574,568
60,771
23,260,643
2,226,414
28,182
201,734
146,496
11,127,104
264,582
55,584
897,480
19,577,739
77,966
6,962,551
3,000,000
5,150,000
415,800
Corresponding
month
last year
$340,714
645,932
622,104
51,278
3,156,109
9,229
16,427
2,441,677
2,996
45,657
26,572
1,383,598
149,786
13,861,900
92,271
5,000,000
221,657
470,832
777,031
3,145,826
24,301,983
1,886,910
134,190
26,323,084
2,493,977
25,703
221,325
133,486
6,274,065
334,914
751,244
11,332,545
190,528
87,452,884
8,000,000
2,450,000
20
8,195,276,746
Deduct: Certain interfund transactions
Budget expenditures
Budget surplus (+) or deficit (-)
Fiscal Year
1962
to date
$1,167,973
4,479,089
8,786,400
9,561,692
611,556
41,028,469
107,210
239,943
36,646,457
5,000
38,549
534,538
825,486
18,622,991
1,813,146
182,688,528
663,941
7,000,000
2,591,432
535,658
211,338,086
10,987,642
6,825,028
35,095,964
343,054
218,506,169
25,501,517
331,220
2,641,310
1,682,809
102,922,760
1,033,290
1,382,711
9,482,250
135,002,020
1,755,915
912,417,661
9
Corresponding
period
fiscal year 1961
$4,146,975
8,003,429
7,853,651
487,641
40,861,159
278,665
200,298
22,139,067
5,000
39,678
135,428
761,828
17,967,141
1,497,749
143,493,347
1,126,716
13,000,000
2,894,756
2,477,496
9,331,158
32,844,673
95,612,553
6,038,629
879,994
102,531,177
21,240,197
299,411
2,541,255
1,627,115
38,691,147
4,487,231
7,217,362
109,450,567
2,634,870
793,997,649
32,753,000
-5,000,000
44,250,000
415,800
30,233,000
8,000,000
12,200,000
88,300,934,938
82,169,120,162
529,262
8,205,511,497
212,215,825
244,911,338
632,954,816
653,952,708
7,983,060,921
7,960,600,158
87,667,980,122
81,515,167,453
+3,582,821,044
+2,870,123,304
-6,307,612,863
-3,855,742,548
FOOTNOTES
*From 1963 Budget Document released January 18, 1962.
Beginning with the Monthly Statement for July I960, and incorporated in the final statement for the fiscal year 1960 (released December 6, I960), totals shown for net budget receipts and budget expenditures exclude certain interfund transactions which are included
in the detail of both budget receipts and budget expenditures. The
transactions deducted consist mainly of interest payments to the Treasury by Government corporations and agencies that borrow from the
Treasury (see Table XIII, page 19 for details). This reporting change
does not affect the budget surplus or deficit. The interfund transactions deducted under this procedure do not include payments to the
Treasury by wholly-owned Government corporations for retirement
of their capital stock and for disposition of earnings. These capital
transfers have been excluded from budget receipts and expenditures
since July 1, 1948.
Figures have been revised to exclude certain interfund transactions. See footnote 1.
For details of deductions from receipts seeTablelll, page 2 and
for details of deductions from expenditures see Table X, page 16.
4
For details see Table III.
5
Transactions cover the period July 1, 1961 through June 30,
1962, and are partially estimated.
a
Includes debt not subject to statutory limitation, which on June
30, 1962 amounted to $433,274,382. The statutory debt limitations in
effect during the period covered by this table and the date when each
became effective are as follows: $290 billion on June 30, 1959; $295
billion on July 1, 1959; $293 billion on July 1, I960. F r o m July 1,
1961 to March 13, 1962, $298 billion; for the remainder of the fiscal
year 1962 the limit is $300 billion.
Footnotes continued on page 13
10
TABLE IV-TRUST AND OTHER RECEIPTS AND EXPENDITURES-JUNE 30, 1962
Classification
RECEIPTS
Legislative Branch:
Payments from general fund
Other
The Judiciary:
Judicial survivors annuity fund:
Contributions
Interest on investments
Funds appropriated to the President
Agriculture Department:
Food stamps issued:
Payments from general fund
Receipts from sales
Other
C o m m e r c e Department:
Highway trust fund:
Transfers from general fund receipts
Less refunds of taxes.
Advances from general fund
Less return of advances to the general fund
Interest on investments
Total—Highway trust fund
Other
Defense Department:
Military functions
Civil functions:
Payments from general fund
Other
Health, Education, and Welfare Department
Interior Department:
Indian tribal funds.
Payments from general fund.
Other
Labor Department:
Transfer from unemployment trust fund
Other
State Department:
Foreign Service retirement and disability fund:
Deductions from salaries and other receipts
Employing agency contributions
Receipts from Civil Service retirement and
disability fund
Interest on investments
Other
Treasury Department--Health, Education, and Welfare
programs:
Federal disability insurance trust fund:
Transfers from general fund receipts:
Appropriated
Unappropriated
Less refunds of taxes
Deposits by States
Payments from railroad retirement account
Interest and profits on investments
Total—Federal disability insurance trust fund ..,
Federal old-age and survivors insurance trust fund:
Transfers from general fund receipts:
Appropriated
Unappropriated
Less refunds of taxes
,
Deposits by States
,
Interest and profits on investments
,
Other
Total—Federal old-age and survivors insurance
trust fund
,
Treasury Department—Labor programs:
Unemployment trust fund:
Employment security administration account:
Transfers (Federal unemployment taxes):
Appropriated
Unappropriated
,
Less refunds of taxes
Advances from general (revolving) fund
Less return of advances to the general fund ..,
State accounts—deposits by States
,
Federal unemployment account—less transfer of
receipts to Labor
,
Railroad unemployment insurance account:
Deposits by Railroad Retirement Board
,
Advances from railroad retirement account.
Advances from general fund
,
Railroad unemployment insurance administration
fund:
Deposits by Railroad Retirement Board
Federal extended compensation account:
Advances from general fund
Interest
and profits
investments
Total--Unemployment
Treasury
National
General
Federal Services
Aviation
Aeronautics
Department—other
Agency
Administration
trust
andon
Space
fundAdministration
This month
Corresponding
month
last year
Fiscal Year
1962
to date
Corresponding
period
fiscal year 1961
$89,264
146,231
$89,262
143,397
$179,326
1,262,696
$179,324
1,452,277
97,260
2,209
50,609,545
81,762
4,652
29,431,160
553,569
59,870
356,258,429
502,559
48,604
229,713,385
1,082,052
1,933,429
3,869,428
381,008
427,390
4,526,143
13,152,663
21,833,151
45,577,669
381,008
427,390
41,382,933
233,200,000
238,400,000
3,079,993,030
-131,302,902
2,923,240,921
-125,703,141
60,000,000
-60,000,000
2,017,718
2,799,555,499
4,228,156
1,865,258
6,772,167
237,428,156
240,265,258
2,955,462,295
847,022
687,154
11,075,603
28,502,687
1,346,125
1,026,047
5,051,539
3,845,360
2,588,009
100,739
3,648,885
8,358
2,848,975
24,388,959
510,958
2,740,336
19,952,794
544,841
4,329,739
4,193
765,156
3,170,522
19,199
669,715
40,198,924
40,430,445
14,410,314
114,130,249
22,636,661
11,904,708
+506
4606
1,471
496
71,634
85;085
240,405
214,014
451,438
5,688,668
2,747,514
3,540,476
2,540,000
258,476
1,368,766
372,093
1,247,307
291,043
32,446
1,267,306
86,901
1,158,394
7,485
87,448,520
-2,003,528
101,805,747
3,974,993
4,556,672
955,449,632
996,471
-11,907,500
77,281,658
"69,"956,"452
962,812,407
-9,500,000
68,689,641
*36,'995,'(J62
*29,'34i,"666
120,415,048
135,703,487
1,091,776,715
1,083,488,862
933,842,964
-6,308,040
1,025,183,984
10,623,470,761
-3,161,080
195,623,715
9,555
42,552,322
205,713,881
5,586
10,714,781,548
26,691,959
-129,760,000
869,137,855
539,048,987
2,275,197
1,120,007,114
1,273,455,775
12,022,175,548
11,823,900,844
2,474,000
-999,844
-550,812
79,500,000
24,658,241
975,000
123,807
-323,810
43,500,000
49,190,650
457,257,583
372,689
-4,991,080
313,400,000
-285,400,000
2,729,719,346
345,979,586
592,758
-2,195,526
301,500,000
-250,000,000
2,398,100,356
-506
147,111,229
101,470,000
7,000,000
152,708,817
132,345,000
13,000,000
-506
31,685,606
30,610,100
*5,'666,'666
61,486,814
""-86,'240,'666
755,444,850
530,226,255
998,976
1,667,556
1,723,519
8,148,065
8,599,227
7,614,516
58,803,993
268,138,622
73,033,944
332,921,543
172,554,614
498,138,622
204,487,839
204,853,258
471,971,327
3,979,563,992
3,803,256,175
1,439,879
1,697,535
15,785,556
15,748,410
3,500
833,065
"""575*666
'"i57,'566
"i,"986,*5i4
TABLE IV-TRUST AND OTHER RECEIPTS AND EXPENDITURES- -JUNE 30, 1962—Continued 11
Classification
RECEIPTS--Continued
This month
Corresponding
month
last year
Fiscal Year
1962
to date
Veterans Administration:
Government life insurance fund:
$1,763,129
12,851
35,204,716
$1,060,549
21,908
36,764,688
$18,757,207
166,114
36,044,092
$19,688,590
179,697
37,829,919
39,806,832
455,642
172,942,233
167,926
42,178,586
987,134
172,058,061
177,652
484,893,622
6,885,153
174,202,471
1,941,751
483,795,509
' 8,448,898
175,394,965
1,719,904
250,353,332
253,248,581
722,890,412
727,057,484
National service life insurance fund:
Other independent agencies:
Civil Service Commission:
Civil Service retirement and disability fund:
73,659,905
86,340,784
851,145,250
843,763,699
73,667,014
86,348,925
1,230,873
277,355,634
1,082,812
242,314,882
851,250,975
44,637,000
12,375,466
315,847,525
843,859,004
46,329,000
11,881,679
280,175,819
425,913,427
416,087,405
2,075,256,217
2,026,009,203
51,771,119
4,745,875
53,597,771
-9,071,057
559,703,967
10,231,672
570,165,005
547,987
78)264,'053
85,346,597
107,412,925
110,920,670
10,951,312
551,126
12,389,796
1,020,481
12,165,000
24,825,000
31,205,000
Payments from other funds:
Railroad Retirement Board:
Railroad retirement account:
Transfers (Railroad Act taxes):
Corresponding
period
fiscal year 1961
250
Interest on advances to railroad unemployment
Repayment of advances to railroad unemployment
Payment from Federal old-age and survivors
and Federal disability insurance trust funds....
371,818,000
336,882,000
371,818,000
336,882,000
517,550,360
479,471,438
1,086,381,362
1,050,741,395
-101,240
292,027
61,442
492,171
12,305,033
12,336,331
220,125,877
206,667,000
3,000,000
8,000,000
30,233,000
8,000,000
5,150,000
1,645,072
2,450,000
757,123
32,753,000
3,000,000
-8,000,000
44,250,000
29,753,110
2,970,187,396
3,341,826,776
24,861,522,297
24,098,217,585
709
-15,993
17,253
-15,085
2,970,188,106
3,341,810,782
24,861,539,551
24,098,202,500
383,837,544
351,859,743
525,188,981
514,738,367
2,586,350,561
2,989,951,038
24,336,350,569
23,583,464,132
115,591
82,006
50,091,251
126,317
30,834
28,583,487
1,348,271
392,107
362,757,800
1,332,834
347,110
192,075,828
2,933,500
36,585
8,198,047
642,648
1,052,499
3,741,801
34,414,334
1,146,051
56,506,983
642,648
27,443
40,758,774
330,631,576
238,489,287
2,784,273,081
2,619,170,183
543,457
330,631,576
238,489,287
2,784,273,081
2,619,713,640
2,294,440
5,286,033
38,275,918
40,098,215
344,388
326,640
4,863,752
4,724,954
-802
3,180,960
19,021
-504
2,360,286
28,187
-3,618
24,230,268
259,355
7,773
17,856,036
309,185
6,730,395
785,121
7,024,702
1,290,301
63,969,847
13,223,313
137,431,157
12,132,395
190,154
-9,310
956,312
4,173
5,437,746
-27,716
2,826,324
8,004
District of Columbia:
Payments from general fund:
Loans for capital outlay
21
12,200,000
23,981,429
EXPENDITURES
Funds appropriated to the President
Agriculture Department:
Commerce Department:
Highway trust fund:
Interest payment on advances from general fund ....
Defense Department:
Civil functions:
Interior Department:
Justice Department (net):
12
TABLE IV-TRUST AND OTHER RECEIPTS AND EXPENDITURES-JUNE 30, 1962-Continued
Classification
EXPENDITURES—Continued
This month
Corresponding
month
last year
Fiscal Year
1962
to date
Corresponding
period
fiscal year 1961
Labor Department:
Other.
State Department:
Treasury Department-Health, Education, and Welfare
programs:
Federal disability insurance trust fund:
Administrative expenses—reimbursement to Federal old-age and survivors insurance trust fund...
Payments to general fund—administrative expenses
Total—Federal disability insurance trust fund ...
121,776
$29,042
$56,945
$506
166,848
685,886
27,435
412,860
27,202
5,524,901
365,234
4,253,250
440,061
299,124
91,170,890
11,030,000
270,684
73,680,197
5,148,000
62,477,257
3,654,157
1,011,375,704
11,030,000
34,052,915
3,122,289
703,995,671
5,148,000
102,500,014
79,098,882
1,088,537,118
746,318,876
24,859,097
22,170,122
263,505,759
223,647,587
3,388,501
360,788,000
1,113,641,855
275,033
3,449,327
331,734,000
985,828,723
316,064
-60,272,599
45,251,593
360,788,000
12,657,836,079
3,077,661
-33,176,322
43,760,039
331,734,000
11,184,531,124
1,779,643
1,502,952,488
1,343,498,237
13,270,186,495
11,752,276,072
764,732
739,075
10,029,114
7,738,718
Federal old-age and survivors insurance trust fund:
Administrative expenses-Bureau of Old-Age and
Reimbursement of administrative expenses from
Federal disability insurance trust fund
Payments to general fund—administrative expenses..
Total—Federal old-age and survivors insurance
Treasury Department-Labor programs:
Unemployment trust fund:
Employment security administration account:
Salaries and expenses, Bureau of Employment
Grants to States for unemployment compensation
Payments to general fund:
Reimbursements for administrative expenses..
121,507,310
38,544,427
467,585,610
374,975,294
54,201
9,972
129,867
5,947
5,067,327
57,482
5,100,863
49,563
2,910,388
3,471,482
2,910,388
16,555,566
201,623,281
251,710,635
Payment of interest on advances from general
Railroad unemployment insurance account:
Benefit payments,,
Temporary extended railroad unemployment
10,639,825
4,571,254
9,287,538
10,017,469
12,165,000
24,825,000
31,205,000
10,951,312
2,084,446
551,126
12,389,796
2,454,882
1,020,481
561,074
690,503
9,261,865
9,738,720
188,456,965
242,446,524
2,856,583,023
3,558,073,949
-1,514,516
-6,104,161
-37,786,101
-6,104,161
3,983,320
1,514,516
264,969,774
6,104,161
303,932,269
37,786,101
481,151,560
6,104,161
339,382,667
584,279,454
3,906,568,676
4,733,692,644
1,337,738
1,395,071
17,904,522
16,724,179
86,513
3,718
135,250
107,918
-33,475
250,448
-9,394
187,550
-40,171
1,720,352
-48,769
773,226
20,820,000
-46,273,203
-12
9,610,000
-3,909,743
-450
322,879,999
-575
-16,000,000
-72,897,544
-453
6,990,023
13,760,837
96,120,629
93,757,337
707,467,380
1,818,052
369,506
Repayment of advances to railroad retirement
Payment of interest on advances from railroad
Railroad unemployment insurance administration
fund:
State accounts:
Reimbursements from Federal extended compensation account
Federal extended compensation account:
Temporary extended unemployment compensation
payments...................................
Total—Unemployment trust fund...............
General Services Administration:
Housing and H o m e Finance Agency:
Federal National Mortgage Association:
Loans for secondary market operations (net)
Other (net).
National Aeronautics and Space Administration
Veterans Administration:
Government life insurance fund-Benefits, refunds
National service life insurance fund-Benefits,
Other independent agencies:
Civil Service Commission:
Civil service retirement and disability fund ,
50,553,751
161,017
69,961,927
168,884
629,237,921
1,714,035
91,743,793
-2,279,871
-23,479,118
1,146,953
82,756,271
-7,957,022
-5,570,648
2,089
1,057,635,390
-10,814,734
-70,282,684
-90,623
67,131,756
69,230,689
976,447,347
951,038,778
-23,263,233
-50,923,903
-1,622,910.
875,228,730
TABLE IV-TRUST AND OTHER RECEIPTS AND EXPENDITURES- -JUNE 30, 1962—Continued 13
Classification
EXPENDITURES—Continued
This month
Corresponding
month
last year
Fiscal Year
1962
to date
Corresponding
period
fiscal year 1961
Other independent agencies--Continued
-$413,921
-$263,906
$114,265
$321,968
870,057
87,664,964
1,296,382
83,604,991
9,038,531
1,023,947,718
9,948,076
981,839,329
101,470,000
4,706
132,345,000
66
Railroad Retirement Board:
Railroad retirement account:
Payment to Federal old-age and survivors and
Advances to railroad unemployment insurance
4,464
88,539,487
84,901,374
1,134,460,956
1,124,132,471
-12,029
-2,907
33,469,048
-12
5,291
25,301,335
-10,572
159,092
333,375,891
7,916
374,983
302,517,657
672,494
138,228
474,801
-576,851
Other:
Other
Deposit fund accounts (net):
Government sponsored enterprises:
Investments in public debt securities, net investment (+) or sales (-)
Sales and redemptions of obligations in market,
Other
Indian tribal funds
Total trust and deposit fund expenditures
-71,124,000
-99,500,000
+37,918,600
+434,189,800
-293,097,000
354,515,668
1,305,420
78,799,289
-218,313,200
314,889,593
-2,839,472
169,568,163
-1,121,188,200
1,069,618,048
3,404,996
-523,752,152
-195,417,200
-223,572,370
1,274,930
175,476,974
2,644,869,306
2,731,575,176
24,643,001,909
23,533,100,928
17
21
Deduct: Certain interfund transactions
Excess of trust and other receipts (+) or expenditures (-) • •
Continued from page 9.
6
2,644,869,306
2,731,575,176
24,643,001,909
23,533,100,946
383,837,544
351,859,743
525,188,981
514,738,367
2,261,031,762
2,379,715,432
24,117,812,927
23,018,362,579
+325,318,799
+610,235,606
+218,537,641
+565,101,553
FOOTNOTES
Distribution between income taxes and employment taxes made in
accordance with provisions of Sec. 201 of the Social Security Act as
amended for transfer to the Federal Old-Age and Survivors Insurance
Trust Fund and the Federal Disability Insurance Trust Fund.
7
"Individual income taxes withheld" have been decreased $89,396,946 to correct estimates for quarter ending September 1961 and
prior and "Individual income taxes other" have been increased $11,688,431 to correct estimates for calendar year I960 and prior. The
total of the above adjustments ($-77,708,515) is shown as a decrease
of employment taxes under "Federal Insurance Contributions Act and
Self-Employment Contributions Act" representing decreases in appropriations of $70,157,036 for the Federal Old-Age and Survivors
Insurance Trust Fund and $7,551,479 for the Federal Disability Insurance Trust Fund.
8
Beginning with the statement for January 1962, amounts representing refunds of principal for overpayment of taxes formerly reported net of reimbursements from trust fund accounts are now shown
on a gross basis. These reimbursements to Internal Revenue Service
for refunds are now included and netted with amounts shown for
transfers to the respective trust fund accounts.
9
Represents appropriations of receipts under the Federal Unemployment Tax Act to the Unemployment Trust Fund as provided under
Sec. 901(b) of the Social Security Act, as amended September 13, I960.
10
Classifications in this statement have been revised to agree with
classifications in the 1963 Budget Document. Where no figures appear
on certain lines there was either no activity reported or comparative
figures are not available on account of changes in classification.
11
Includes $13,152,663 transferred to Agriculture Department,
Food Stamp Program (Sec. 32 of the Act of August 24, 1935, as
amended, 7 USC 612). See page 10.
12
Represents residual of gross receipts and expenditures after reduction for certain costs which are included in amounts shown for
special activities.
13
Includes certain costs transferred from price support operations
for which expenditures m a y have been made in prior years, in addition
to adjustments for prior months' transactions.
The greater part of Bureau of Public Roads expenditures are
made from Highway Trust Fund, page 11.
15
Represents estimated adjustments to reclassify expenditures for
comparability with the latest budget appropriation structure. These
adjustments are made between the major categories of expenditures
and, therefore, do not affect the total expenditures for military functions. Amounts shown for the respective Departments represent the
expenditures as recorded in books of account of the Departments and
do not include any adjustments for comparability.
Represents net cash transactions under provisions of Sec. 2(a)(3)
of Public Law 85-141, approved August 14, 1957.
17
Gives effect to reimbursements collected for administrative support furnished to other
agencies amounting to approximately
$84 726,635.
Continued on page 19.
Expenditures are stated on an accrual basis.
JUNE 30, 1962
14 TABLE V-INVESTMENTS OF GOVERNMENT AGENCIES IN PUBLIC DEBT SECURITIES (NET)
(Including certain guaranteed securities)
Corresponding
month
last year
This month
Classification
Public enterprise funds:
Federal National Mortgage Association:
Public debt securities (management and liquidating
functions)
Guaranteed securities
Federal Housing Administration:
Public debt securities
Guaranteed securities
Federal Savings and Loan Insurance Corporation
Tennessee Valley Authority
Other
Total public enterprise funds
Trust accounts, etc.:
Judicial survivors annuity fund
Highway trust fund
Foreign service retirement and disability fund
Federal disability insurance trust fund
Federal old-age and survivors insurance trust fund .
Unemployment trust fund
Federal National Mortgage Association:
Secondary market operations:
Public debt securities
Guaranteed securities
Veterans life insurance funds:'
Government life insurance fund
National service life insurance fund
Civil Service Commission:
Civil service retirement and disability fund
Employees health benefits fund
Employees life insurance fund
Retired employees health benefits fund
Railroad retirement account
Other
Total trust accounts, etc
Net investments, or sales (-)
Fiscal Year
1962
to date
$344,200
$1,239,700
22
5,375,000
7,560,000
-32,198,000
134,000,000
-34,000,000
3.141.000
4,000,000
-32,000,000
4.367,000
108,860,200
15,000
18,719,000
1,248,000
37,730,900
-341,430,844
-117,954,051
Corresponding
period
fiscal year 1961
$45,145,700
239*666*666
$7,527,650
97,489,000
-29,200,000
-18,319,800
34,000,000
-12,089,000
21,667.000
-14,833,300
204,427,900
148,594,650
44,000
79,139,000
1,140,000
48,155,719
-233,880,410
-124,006,228
215,500
201,901,000
4,530,000
20,562,039
-1,088,851,504
72,131,867
210,000
232,699,000
3,002,000
284,712,842
-225,331,046
-951,991,111
6,247,600
-508,300
34,872,800
252,750
27,217,000
163,831,000
23,393,000
137,782,000
-43,624,000
44,158,000
-35,107,000
-43,718,000
331,413,000
987,000
300,000
-1,129,000
422,805,000
-6,878,950
543,120,655
338,983,000
921,000
19.217
1,059,787,000
12,324,000
47,021,217
668,464,927
1,029,746,000
11,175,000
50,925,000
1,631,000
-62,549,000
-35,992,775
240,830,927
651.980.855
653,631,627
445,258,827
434,923,132
-9,000
4,000,000
-75,130,000
15,000
-2,000,000
5,000,000
-101,000,000
-2,990,000
154,300,000
-113,995,000
2,803,600
-2,200,000
3,027,500
147,521,000
286,990,000
1,486,300
-4,835,000
404,761,000
-7.478.070
'"178*258*666
-19,275,170
286.328.482
23
MEMORANDUM
(Included in Table IV)
Government sponsored enterprises:
Banks for cooperatives
Federal Deposit Insurance Corporation
Federal home loan banks
Federal intermediate credit banks
Federal land banks
-1,500,000
TABLE VI-SALES AND REDEMPTIONS OF OBLIGATIONS OF
GOVERNMENT AGENCIES IN MARKET (NET)
Public enterprise funds:
Guaranteed by the United States:
Federal F a r m Mortgage Corporation in liquidation...
Federal Housing Administration
Not guaranteed by the United States:
Federal National Mortgage Association
$200
-14,151,600
9,925
$1,000
-14,821,250
1,325
$3,800
-204,026,950
19,575
$19,300
-81,077,500
8,625
3,000
21,000
1,450
-95,000,000
797,333,000
75
-50,000,000
150
Tennessee Valley Authority
Trust enterprise funds:
Guaranteed by the United States:
-19,324,000
Not guaranteed by the United States:
Federal National Mortgage Association
MEMORANDUM
8,740,000
-14,207,000
-358,710,000
85,622,000
-5,401,325
-29,022,925
-657,691,125
732,581,500
11,485,000
-231,225,000
-74,420,000
1,063,000
19,920,000
-99,520,000
-62,300,000
-76,413,200
-46,510,000
-750,340,000
-131,995,000
-192,343,200
-51,925,000
200,315,000
-123,695,000
-220,112,200
23
(Included in Table IV)
Government sponsored enterprises:
Not guaranteed by the United States:
See footnotes on page 19
JUNE 30, 1962
TABLE VII-CHANGES IN THE PUBLIC DEBT
15
(Includes exchanges)
This month
Classification
Increase (+) or decrease (-) in the gross public debt:
Public issues:
Special issues
Corresponding
month
last year
Fiscal Year
1962
to date
Corresponding
period
fiscal year 1961
-$2,025,865,257
+406,092,968
^1,733,911,465
+19,792,909
+$9,042,404,429
+204,737,108
+$3,249,385,048
-743,392,168
-1,619,772,288
-1,714,118,555
+9,247,141,537
+2,505,992,879
+647,395,000
-740,149
+539,783,000
-366,676
-104,195,000
+86,937,573
+143,641,000
-9,456,118
-973,117,437
-1,174,702,231
+9,229,884,110
+2,640,177,761
TABLE VIII-EFFECT OF OPERATIONS ON PUBLIC DEBT
Excess of trust and other receipts (-) or expenditures (+)
Excess of investments (+) or sales (-) of Government
Excess of redemptions (+) or sales (-) of obligations
-43,582,821,044
-325,318,799
-42,870,123,304
-610,235,606
+$6,307,612,863
-218,537,641
+$3,855,742,548
-565,101,553
+651,980,855
+653,631,627
+445,258,827
+434,923,132
-657,691,125
+732,581,500
* -533,351,464
-278,833,491
-5,401,325
-29,022,925
-470,257,723
-235,745,831
+512,205,598
+616,799,701
-35,444,036
-6,312,394
-43,355,594
-232,460,728
+185,763,092
-222,200,934
+2,289,850,596
+1,532,454,833
+3,736,273,595
-1,310,621,044
-973,117,437
299,173,940,158
-1,174,702,231
290,145,640,841
+9,229,884,110
288,970,938,610
+2,640,177,761
286,330,760,848
298,200,822,720
288,970,938,610
298,200,822,720
288,970,938,610
444,218,925
240,215,450
444,218,925
240,215,450
298,645,041,645
433,274,382
289,211,154,060
349,291,529
298,645,041,645
433,274,382
289,211,154,060
349,291,529
298,211,767,263
288,861,862,530
298,211,767,263
288,861,862,530
Increase (-) or decrease (+) in checks outstanding and
2
Increase (-) or decrease (+) in public debt interest
Increase (+) or decrease (-) in cash held outside
Increase (+) or decrease (-) in balance of Treasurer's
Increase (+) or decrease (-) in public debt
Gross debt at beginning of period
Guaranteed obligations of Government agencies,
not owned by Treasury
Total debt subject to statutory limitation
TABLE IX-BUDGET EXPENDITURES BY MAJOR FUNCTIONS27
(Figures are rounded in millions of dollars and m a y not add to totals)
Function
National defense
Actual
Fiscal Year 1962
Actual
Fiscal Year 1961
Actual
Fiscal Year 1960
$51,082
$47,494
$45,691
International affairs and finance
2,703
2,500
1,832
Space research and technology
1,257
744
401
Agriculture and agricultural resources
6,041
5,173
4,882
Natural resources
2,133
2,006
1,714
C o m m e r c e and transportation
2,754
2,573
1,963
335
320
122
4,425
4,244
3,690
Housing and community development ..
Health, labor, and welfare
Education
,
1,076
943
866
Veterans benefits and services
,
5,404
5,414
5,266
Interest
9,218
9,050
9,266
General government
1,874
1,709
1,542
88,301
82,169
77,233
633
654
694
87,668
81,515
76,539
Total
Less: Certain interfund transactions.1...
Budget expenditures
16
TABLE X-SUPPLEMENTARY TABLE OF RECEIPTS AND EXPE£*£'T^£w
ENTERPRISE (REVOLVING) FUNDS- JUNE 30, 1962
vi
rwBkiw
(Included In expenditures in Table m on a net basis)
Fiscal year 1962 to date
Classification
Receipts
Funds appropriated to the President:
Expansion of defense production
Foreign assistance-economic:
Development loan funds
Foreign investment guarantee fund
Total—Funds appropriated to the President
Agriculture Department:
Commodity Credit Corporation:
Price support, supply, and related programs, and
special milk 12
Special activities financed by Commodity Credit
Corporation13
Federal Crop Insurance Corporation
Farmers H o m e Administration:
Direct loan account, revolving fund
Emergency credit revolving fund
Agricultural credit insurance fund
Total—Agriculture Department
Commerce Department:
General administration
Area redevelopment
Inland Waterways Corporation
Maritime Administration
Total—Commerce Department.
Defense Department:
Military functions:
Secretary of Defense
Army:
Defense housing.
Defense production guarantees
Navy:
Defense production guarantees
Other
Air Force—Defense production guarantees
Civil defense procurement fund
Total—Military functions
Civil functions:
Army:
Panama Canal Company
Total—Defense Department
Health, Education, and Welfare Department:
Public Health Service—Operation of commissaries,
narcotic hospitals
Social Security Administration—Operating funds,
Bureau of Federal Credit Unions
Total—Health, Education, and Welfare Department..
Interior Department:
Bureau of Indian Affairs:
Revolving fund for loans
Hoonah Housing project liquidation
Office of Territories—Loans to private trading enterprises, Trust Territory of the Pacific Islands
Alaska Railroad revolving fund
°
Bureau of Mines—Development and operation of
helium properties
Fish and Wildlife Service—Bureau of Commercial
Fisheries
•
Bureau of Reclamation:
Ft. Peck project, Montana
Upper Colorado River Basin fund
Virgin Islands Corporation
Total—Interior Department
Labor Department:
Advances to employment security administration
account, unemployment trust fund
Farm labor supply revolving fund
Total—Labor Department
Post Office Department—Postal fund
Treasury Department:
Office of the Secretary:
Reconstruction Finance Corporation liquidation fund
Federal Farm Mortgage Corporation liquidation fund
Civil defense program fund
See footnotes on pages 9 and 13
Expenditures
Net receipts (-)
or expenditures
$62,116,363
873,341,930
811,225,567
9,963,562
2,312,666
429,742,336
663,053
419,778,774
-1,649,612
74,392,591
503,747,320
429,354,729
2,710,192,815
5,246,962,356
2,536,769,541
39,162,324
14,916,202
113,118,391
14,251,214
73,956,066
-664,988
317,695,051
30,505,929
120,117,194
311,250,139
65,946,512
112.900,809
-6,444,911
35,440,582
-7.216,385
3,232,589,518
5,864,429,423
2,631,839,905
548
1,059
854,084
8,373,894
9.229,586
-6,434
18
206
5,871,163
5,864,953
-6,982
-1,041
-853,877
-2.502.731
-3,364,633
66,973,961
95,364,635
28,390,674
229,337
213,789
203,993
83,029
-25,344
-130,759
2,767,308
1,227,176
9,722,580
117,793
81,251,946
5,794,932
1,136,906
5,968,338
142,504
108,694,340
3,027,624
-90,269
-3,754,241
24,710
27,442,393
113,839,075
115.963,677
2,124,602
195,091,022
224,658,017
29,566,995
231,364
233,231
1,867
3,986,617
3,824,577
-162,039
4.217,981
4,057,809
-160.172
2,602,674
5,490
4,389,239
2,633
1,786,564
-2,856
43,748
17,394,056
49,983
16,031,100
6,234
-1,362,956
16,257,664
17,212,782
955,117
2,046,472
2,999,161
952,689
3,428,132
2,018,365
4,523,571
941,986
94,271,054
6.140.464
-2,486,145
92,252,689
1,616,892
48,320,175
142,038,406
93,718,230
3,075,275
24,528,517
2,709,180
24,528,517
-366,095
3,075,275
27,237,698
24,162,422
3,606,726,668
4,331,485,559
724,758,890
1,456,785
76,603
-274,101
19,295
-1,380,181
-274,101
-137,626
"*i56^922
Corresponding
fiscal year 1961
Net receipts (-)
or expenditures
TABLE X-SUPPLEMENTARY TABLE OF RECEIPTS AND EXPENDITURES OF PUBLIC
ENTERPRISE (REVOLVING) FUNDS-JUNE 30,1962-Continued
Fiscal year 1962 to date
Classification
Receipts
Treasury Department—Continued
Bureau of Accounts—Government losses in shipment fd.
Office of the Treasurer—Check forgery insurance fund..
Expenditures
Net receipts (-)
or expenditures
17
Corresponding
fiscal year 1961
Net receipts (-)
or expenditures
$262,952
$67,252
262,871
$67,252
-80
$86,093
10,849
1,876,659
151,921
-1,724,737
-3,992.081
91,282
249,572
5,326
54,296
-85,955
-195,275
340,854
59,623
-281,231
-653,189
-1 864 417
-2.517.607
53,884,880
5,940,618
77,196,873
10,470,732
281,226,088
289,661
304,145,563
40,955,109
227,341,207
-5,650,957
226,948,690
30,484,377
198,175,318
-87,622,468
144,537,576
9,955,039
909,540,000
273,239,742
236,127,036
318,635,498
175.799.189
2,060,834,572
909,540,000
87,898,737
292,050,829
519,741,868
340,629.598
2,776,477,456
-185,341,005
55,923,793
201,106,369
164.830,408
715,642,883
-74,447,575
133,686,908
-7,230,305
154,985,748
488,040,242
182,753,805
104,062,109
77,793,541
275,540,545
247,596,470
91,958,281
92,786,740
143,534,361
14,164,740
-21,262,283
364,609,456
615,095,297
250,485,841
131,110,307
898,726,210
999,812,755
101,086,544
37,390,336
693,564
365,000
11,469,900
12,528,464
598
3,900,000
3,900,598
-692,966
3,535,000
-11,469,900
-8,627,866
-1,736,474
3,910,000
-8,052,400
-5,878,874
248,211,302
12,376,175
3,959,952
178,448,660
276,311,749
4,566,065
1,635,128,581
1,928,331
11,869,782
4,495,611
389,786,747
379,234,510
5,948,776
1,796,977,112
-246,282,970
-506,393
535,658
211,338,086
102,922,760
1,382,711
161,848,531
-35,192,004
92,511
2,477,496
95,612,553
38,691,147
4,487,231
11,236,432,943
16,292,280,600
5,055,847,656
5,404,476,252
General Services Administration:
Housing and H o m e Finance Agency:
Office of the Administrator:
Other
Federal National Mortgage Association:
Subscription to capital stock, secondary market oper.
16,000,000
Veterans Administration:
Loan guaranty revolving fund
Other
Other independent agencies:
F a r m Credit Administration:
Federal F a r m Mortgage Corporation
fund
Short-term credit investment fund 19
Federal H o m e Loan Bank Board:
Federal Savings and Loan Insurance Corporation fund.
Other
Saint Lawrence Seaway Development Corporation
Total—Public enterprise funds
152,372,590
137,680,399
TABLE XI-SUPPLEMENTARY TABLE OF RECEIPTS AND EXPENDITURES OF TRUST
ENTERPRISE (REVOLVING) FUNDS-JUNE 30, 1962
(Included in expenditures in Table IV on a net basis)
Fiscal year 1962 to date
Classification
Receipts
Expenditures
Net receipts (-)
or expenditures
Corresponding
fiscal year 1961
Net receipts (-)
or expenditures
Department of Agriculture:
$9,216,456
$10,362,507
$1,146,051
118,502
114,884
-3,618
7,773
1,646,620
2,351,656
7,084,366
2,323,939
5,437,746
-27,716
2,826,324
8,004
421,777
381,605
-40,171
-48,769
909,540,000
629,728,652
909,540,000
952,608,651
322,879,999
-16,000,000
-72,897,544
342,564,913
190,973,506
26,498,708
6,090,453
253,711
331,750,178
120,690,822
26,408,085
6,204,719
243,138
-10,814,734
-70,282,684
-90,623
114,265
-10,572
-23,263,233
-50,923,903
-1,622,910
321,968
7,916
2,119,404,958
2,367,712,900
248,307,941
-161,556,929
$27,443
Department of Defense - Civil:
Department of Justice:
General Services Administration:
Housing and H o m e Finance Agency:
Federal National Mortgage Association:
Other independent agencies:
Civil Service Commission:
18
TABLE XII-COMPARATIVE STATEMENT OF BUDGET RECEIPTS A N U tAKLNUI I UHLS,
BY MONTHS OF THE FISCAL YEAR 1962
(Figures are roundec in millions of dollars and may not add to totals.)
July
Classification
August
De- Janu- FebSep- Octo- Noru- March April
tem- ber vem- cem- ary
ber
ary
ber
ber
May June
Fiscal Fiscal
Year
Year
1962
1961
B U D G E T RECEIPTS
Internal Revenue:
$1,235 14,654 $2,662 $1,399 $4,767 $2,935
215
123
245
161 2,017
428
408
377 3,322
520
382 3,251
983 1,102 1,123 1,013
975 1,197
884
241 1,266
306 1,821
505
148
142
126
147
158
152
90
105
106
91
98
88
249
198
118
260
242
537
3,779 8,713 10,285 3,811 8,007 8,980
Deduct:
Refunds of receipts:
178
(*)
Transfers to:
Federal old-age and survivors
Federal disability ins. trust fund ..
203
4
162
(*)
760
266 1,589
69
25
147
267
253 ^269
55
14
84
1
1 r(*)
737 2,297 1,337
3,042 6,416
Less: Certain interfund transactions ...
185
(*)
59
49
9
67
(*)
-69
142
695 1,812 1,417 1,094
6
48
(*)
w
232
1
5,752
224
10,612 10,537
953
945
2,949 2,798
571
570
343
453
21,793 21,178
6,425 8,153 5,442 6,744 9,106 5,761 7,029 11,778
81,993 78,313
1
418
40
255
47
7*)
827
186
84
16
2
7
5
212
2,982 6,367 8,945 3,141 6,424 7,967 5,357 6,729 9,104 5,754 7,024 11,566
3,128 6,454 8,981
5,987
278
672 2,012
141 1,489 1,031
928
58
169
131
88
11
85
230
264
207
248
233
233
13
82
81
50
11
57
3
1
379
19
48
1
517 3,029 3,248 2,392 3,629 1,537
212 1,094
27
95
258 r231
1
76
1
1
661 1,582
8,948 3,149
3
10
75
$1,245 $5,124 $2,896 $1,017 $5,287 $2,994 $36,216 $32,978
2,325
786
832 4,330
955 1,985 14,404 13,175
466
400 5,879
445
469 5,377 21,296 21,765
1,009
967 1,140
959 1,157 1,123 12,749 12,064
353 2,080 1,188
745 2,266 1,071 12,726 12,502
192
133
155
313
164
203
2,034 1,916
100
85
104
99
100
104
1,171 1,008
269
198
161
243
500
216
3,192 4,082
5,959 9,773 12,354 8,153 10,658 13,315 103,786 99,491
633
654
81,360 77,659
2,823 6,300 7,643 4,846 6,537 8,524 5,125 6,467 10,831
77,659
BUDGET EXPENDITURES10
Funds appropriated to the President:
12
4
6
16
4
7
10
4
3
13
5
-1
14
4
2
12
5
1
16
5
2
11
4
2
12
5
2
11
6
2
13
4
1
15
6
2
153
57
28
133
52
69
108
14
145
8
155
2
114
110
159
63
165
-5
163
-1
137
2
188
7
183
8
108
3
149
4
1,773
216
1,805
77
306
213
66
79
471
213
43
233
74
175
43
111
246
183
46
124
260
220
43
239
-2
210
45
168
81
176
51
161
175
206
43
137
131
135
63
163
62
124
51
221
263
117
39
1,637
2,611
2,420
594
3,407
2,523
66
122
125
98
96
106
97
93
74
114
105
98
693
947 1,016
913
889
880
965 993
949
990 1,137 1,019
946 1,020
967 1,096 1,163 1,139 1,105 1,040 1,188 1,116 1,186 1,322
1,474 1,698 1,629 1,696 1,689 1,752 1,727 1,654 1,884 1,698 1,935 2,025
6
1
8
5
3
7
5
34
8
14
(*) (*)
3,179 3,756 3,585 3,776 3,927 3,984 3,882 3,769 4,168 3,918 4,406 4,477
1,194
11,390
13,289
20,863
90
46,826
Agriculture Department:
Defense Department:
Military functions:
(*)
543
446
61
Interest on refunds of receipts, etc..
Housing and Home Finance Agency:
Federal National Mortgage Association:
Management and liquidating functions
National Aeronautics and Space A d m ...
122
75
279
112
1,357
999
1,449
369
77
23
-221
87
26
755
9
73
226
54
27
370
72
35
54
141
12
733
4
77
249
68
41
351
61
19
51
45
12
777
3
75
254
52
29
299
69
24
38
74
23
775
5
82
253
56
20
331
71
24
109
116
-8
842
5
79
250
65
53
4,215
908
294
613
787
299
9,140
78
975
2,806
699
444
3,685
32
-14
-2
83
101
454
8
47
12
24
25
11
16
-27
-30
-4
94
140
448
7
6
12
28
-17
12
1«
-25
-8
-12
56
141
437
8
53
29
15
5
10
58
1
-22
13
100
155
433
8
-285
27
11
10
11
_«1
-21
-22
-28
89
142
398
8
-7
19
23
11
21
62
92
62
99
107
93
88
78
162
75
98
64
325
66
23
50
7
80
765
8
74
232
50
24
418
106
25
78
93
25
730
9
91
227
72
40
313
92
29
53
87
20
727
13
73
204
55
43
361
88
22
74
29
39
713
5
115
226
61
36
339
74
22
125
46
18
740
4
61
223
52
32
320
68
25
103
32
20
781
7
74
216
61
47
420
64
24
99
30
31
803
5
102
245
53
51
18
-1
35
56
68
422
7
29
11
-6
5
7
10
20
-19
4
58
89
492
8
61
16
27
12
17
85
-30
-23
4
63
72
421
7
87
14
19
9
11
-36
70
-30
5
85
75
449
7
73
9
13
9
12
28
83
-6
-5
46
97
450
7
61
10
11
12
11
12
-58
-65
-9
42
82
96
503
8
16
14
17
11
12
16
Other independent agencies:
Export-Import Bank of Washington ...
4
53
80
484
7
-40
11
36
10
11
16
(*)
43,227
129
77
52
98
(*)
1,105
10,130
12,214
19,778
170
71
26
64
Health, Education, and Welfare
Treasury Department:
498
-185
56
865
1,257
5,392
91
101
183
219
103
146
171
972
801
284
831
914
258
8,957
93
903
2,713
638
387
16
-74
134
427
744
5,401
86
37
143
103
39
121
265
TABLE XII-COMPARATIVE STATEMENT OF BUDGET RECEIPTS AND EXPENDITURES
BY M O N T H S OF THE FISCAL YEAR 1962—Continued
19
(Figures are rounded in millions of dollars and may not add to totals.)
Classification
July
August
DeFebSep- Octo- NoJanuvem- cemru- March April
tem- ber
ary
ber
ber
ary
ber
May
June
Fiscal
Year
1962
Fiscal
Year
1961
B U D G E T EXPENDITURES—Continued
$20
$3
6,381
7,681
59
49
3
Budget expenditures F .Y. 1962
6,322 7,631
6,771
Comparable totals F. Y . 1961
6,172
1
Deduct: Certain interfund transactions .
$9
$3
$4
$11
$8
•*
9
1
186
7,796 7,485 7,160
84
16
$2
$9
$72
$50
7,296 7,234
8,195
88,301
82,169
5
212
633
654
81,515
$1
6,774 7,805 7,485 7,346 7,480 6,873 $7,751
2
7
7,395 6,858 7,749
7,289 7,229
7,983 87,668
6,803 6,793 6,829 6,773 6,847 6,470 6,236 7,012
6,450 7,169
7,961
^3,340 -1,265 n2,174 -4,655 -1,060
Budget surplus (+) or deficit (-) F. Y. 1962
-3,044
$2
-349 £,188 -4,006
-473
+807 -2.038 -129 +1.356 -1,535
81,515
-205 +3,583 -6,308
-3,856
+796 -1,624 +301 +1,512 -1,325 -702 +2,870 -3,856
•Less than $500,000.
Revised due to reclassification.
r
TABLE XIII-INTERFUND TRANSACTIONS EXCLUDED FROM BOTH NET BUDGET
RECEIPTS AND EXPENDITURES-JUNE 30, 1962
Classification
This month
Corresponding
month
last year
Fiscal Year
1962
to date
Corresponding
period
fiscal year 1961
Interest payments to the Treasury:
Funds appropriated to the President.
Agriculture Department:
Commodity Credit Corporation
Farmers H o m e Administration
Direct loan account
Commerce Department
Defense Department
Health, Education and Welfare Department
Interior Department
Treasury Department
Housing and H o m e Finance Agency:
Office of the Administrator
Federal National Mortgage Association
Public Housing Administration
Veterans Administration
Export-Import Bank of Washington
Saint Lawrence Seaway Development Corporation .
Small Business Administration
United States Information Agency
Total—Interest payments to the Treasury .-.
Reimbursements:
$21,106
173,897,803
332,145
4,823,941
216,927,865
476,380
2,066,680
27,125
1,841,010
19
329,583,958
923,214
8,999,852
9,139
9,364,406
$6,140,587
409,574,897
1,195,868
54,250
8,780,538
-86,133
51
1,032,348
450,696
26,380,989
550,000
21,214,594
500,000
208,933,651
242,061,765
30,547,360
114,095,932
1,127,578
40,049,945
56,757,420
2,165,000
14,248,587
609,592
619,788,844
2,835,273
2,823,420
12,239,472
13,210,548
446,900
26,152
926,500
745,288
212,215,825
244,911,338
632,954,816
653,952,708
Fees and other charges for accounting and auditing
services.
Continued from page 13.
$7,859,808
""-171*363
Defense Department
Grand total—Interfund transactions1.
$710,175
""'3,*427,*752
19,294
3,511,626
25,293
24,525,873
91,915,488
1,102,450
31,990,233
42,876,620
2,000,000
15,238,423
1,064,720
639,996,871
FOOTNOTES
In accordance with Public L a w 87-343, October 3, 1961, the investment funds for Federal intermediate credit banks and Production
credit associations are combined into "Short term credit investment
fund."
Represents expenditure adjustments reported by Regional Disbursing Officers which werenot picked up inreports of other officers.
21
Totals shown for trust receipts and trust expenditures exclude
certain inter-trust fund transactions which are included in the detail
of both trust receipts and trust expenditures. The transactions deducted consist mainly of financial interchange between trust funds
resulting in receipts and expenditures.
Includes investments in amount of $19,767,600 for the Management and Liquidating functions fund and $25,378,100 for the Special
Assistance functions fund.
23
The security transactions of Government-sponsored enterprises
are included in deposit fund accounts (net) and excluded from net
sales or investments of Government agencies in public debt securities
and net sales or redemptions of obligations of Government agencies
in the market.
"Further breakdown of this classification is not available in time
for publication in this statement.
"Beginning with the statement for November 1961 and incorporated
in the final statement for fiscal year 196l,the increase or decrease in
interest checks outstanding, coupons outstanding, and interest payable
with principal, are reported in the preceding line classification.
26
Represents changes in cash on hand, in banks held outside the
Treasurer's account, deposits in transit and cash payments not yet
covered by vouchers processed through accounts.
7
Data only on major classifications is available at the time of
publication of this statement. For sub-functions see the ensuing
issues of (1) Budgetary Appropriations and other Authorizations and
(2) the Treasury Bulletin.
20
TABLE XIV-SUMMARY OF PUBLIC DEBT AND GUARA.. . ^ ^
OUTSTANDING JUNE 30, 1962 AND
COMPARATIVE FIGURES FOR JUNE 30,1961
June 30, 1962
Title
June 30, 1961
Average interest rate 1
A m o u n t outstanding
Average interest rate 1
Percent
2
2.924
2
2.980
3.377
3.680
3.122
$40,234,145,000.00
1,801,986,000.00
13,547,047,000.00
65,463,671,000.00
75,025,280,650.00
Percent
2
2.586
2
2.538
3.073
3.704
2.829
$35,220,290,000.00
1,502,900,000.00
13,337,993,000.00
56,257,146,000.00
80,829,778,750.00
3.285
196,072,129,650.00
3.063
187,148,107,750.00
Public debt:
Interest-bearing debt:
Public issues:
Marketable obligations:
Treasury bills (regular series)
Treasury bills (tax anticipation series)
Certificates of indebtedness (regular series)
Treasury notes
Treasury bonds
Total marketable obligations
A m o u n t outstanding
Non-marketable obligations:
Certificates of indebtedness-Foreign Series
__ . , „
-Foreign Currency Series
United States savings bonds
Depositary bonds
Treasury bonds - R „ E . A „ Series
Treasury bonds, investment series
Total non-marketable obligations
2.488
2.717
3.449
2.000
2.000
2.726
860,000,000.00
* 74,942,500.00
47,606,714,140.09
137,834,500.00
24,691,000.00
4,726,997,000.00
3.408
2.000
2.000
2.730
47,514,265,368.98
116,819,500.00
19,221,000.00
5,830,308,000.00
3.364
53,431,179,140.09
3.330
53,480,613, i
Total public issues
3.302
249,503,308,790.09
3.122
2.810
2.000
2.895
2.206
2.000
2.772
2.000
3.958
3.520
3.250
3.088
2.000
3.000
3.125
3.125
2.891
3.239
11,345,705,000.00
500,200,000.00
2,304,492,000.00
74,000,000.00
68,523,000.00
15,073,637,000.00
181,500,000.00
36, 710,000.00
1,027, 809,000.00
435,935,000.00
5,803,529,000.00
26,000,000.00
3,315,785,000.00
4,656,911,000.00
87,956,000.00
44,938,692,000.00
2.637
2.000
2.826
2.125
2.000
2.700
2.000
3.956
3.519
3.000
3.071
10,381,384,000.00
556,400,000.00
2,298,952,000.00
50,000,000.00
86,163,000.00
16,200,171,000.00
138,000,000.00
32,180,000.00
1,071,433,000.00
234,034,000.00
5,759,371,000.00
"3"566
' "3,"563,'534,'666!fJ6
3.000
2.875
2.803
4,624,985,000.00
106,280,000.00
45,042,887,000.00
3.072
285,671,608,618.98
349,355,209.01
Special issues:
Civil service retirement fund
Federal Deposit Insurance Corporation
Federal disability insurance trust fund
Federal h o m e loan banks
Federal Housing Administration funds
Federal old-age and survivors insurance trust fund
Federal Savings and Loan Insurance Corporation
Foreign service retirement fund
Government life insurance fund
Highway trust fund
National service life insurance fund
Postal savings system
Railroad retirement account
Unemployment trust fund
Veterans special term insurance fund
Total special issues
Total interest-bearing debt
Matured debt on which interest has ceased
Debt bearing no interest:
International Monetary Fund
International Development Association
Inter-American Development Bank
Other
Total gross public debt
Guaranteed obligations not owned by the Treasury:
Interest-bearing debt
Matured debt on which interest has ceased
3.500
294,442,000,790.09
437,627,513.76
240,628,721,618.6
2,667,000,000.00
115,304,400.00
55,000,000.00
483,890,017.02
2,496,000,000.00
57,652,200.00
298,200,822,720.87
288,970,938,610.05
443,688,500.00
530,425.00
396,"322,'582!<J6
3.144
239,694,000.00
521,450.00
444,218,925.00
240,215,450.00
Total gross public debt and guaranteed obligations
Deduct debt not subject to statutory limitation
298,645,041,645.87
433,274,382.65
289,211,154,060.05
349,291,529.83
Total debt subject to limitation3
298,211,767,263.22
288,861,862,530.22
Total guaranteed obligations not owned by the Treasury. . . .
1
Beginning with the statement for D e c e m b e r 31, 1958, the c o m puted average interest rate on the public debt is based upon the rate
of effective yield for issues sold at p r e m i u m s or discounts. Prior
to D e c e m b e r 31, 1958, the computed average rate w a s based upon
the coupon rates of the securities. This rate did not materially
differ from the rate computed on the basis of effective yield. The
Treasury, however, announced on N o v e m b e r 18, 1958, that there
m a y be m o r e frequent issues of securities sold with p r e m i u m s or
discounts whenever appropriate. This "effective-yield" method of
computing the average interest rate on the public debt will m o r e
accurately reflect the interest cost to the Treasury, and is felt to
be in accord with the intent of Congress w h e r e legislation has required the use of such rate for various purposes.
2
Computed on true discount basis.
3
Statutory debt limit, established at $285 billion by the Act approved June 30, 1959, has been temporarily increased as follows:
F r o m July 1, 1960 to June 30, 1961 to $293 billion; from July 1,
1961 to M a r c h 13, 1962 to $298 billion; for the remainder of the
fiscal year 1962 the limit is $300 billion.
4
Dollar equivalent of certificates issued and payable in the
amount of 46, 500, 000,000 Italian lire.
Source: Prepared by the United States Treasury Department on the basis of reports received from disbursing, collecting, and administrative agencies of the Government.
For sale by the Superintendent of Documents, U. S. Government Printing Office, Washington 25, D. C.
Subscription price $6.00 per year (domestic), $11.00 per year additional (foreign mailing), includes all issues of
the daily and monthly Treasury statements; no single copies are sold.
144
- 2 the Treasury Minister of Italy, Roberto Tremelloni, and United
States Treasury Secretary, Douglas Dillon. At that time, in a
letter to Minister Tremelloni, Secretary Dillon stated: "The
spirit with which your Government has entered into these discussion
is most gratifying and is further evidence of the kind of
cooperation which is an essential factor in the strength and
stability of the international financial system. Your ability
to prepay these obligations is a reflection of the sound position
of the Italian economy in which you must take deep satisfaction
and of the strength of your balance of payments position."
145
Gt
Draft Press Release
ITALY PREPAYS MARSHALL PLAN AND PL 480 LOANS
The Treasury Department today announced that the prepayment
by the Government of Italy of $178.1 million of loans from the
United States will be made tomorrow, Friday, July 20. -J^few*y*s
remaining indebtednes's^go^fae*"*®!^^
The total payment Friday will consist of $85.6 million to
completely discharge Italy's indebtedness under three Marshall
Plan loans, and $92.5 million to pay in full three loans to Italy
made from the proceeds of the sale of surplus agricultural
commodities under Public Law 480.
The Marshall Plan loans, originally amounting to $95.6
million, were made to Italy during the period 1949-1952 and were
scheduled for repayment over the period 1956-1987. The PL 480
sales were made in the years 1955-1958 and the loans made from
the proceeds, $92.5 million, were scheduled to be repaid over the
period 1961-199?.
Arrangements for the prepayment were made on May 17 between
TREASURY DEPARTMENT
WASHINGTON, D.C.
July 19, 1962
FOR IMMEDIATE RELEASE
ITALY PREPAYS MARSHALL PLAN
AND PL 480 LOANS
The Treasury Department today announced that the prepayment by the Government of Italy of $178.1 million of
loans plus accrued interest from the United States will be
made tomorrow, Friday, July 20.
The total payment Friday will consist of $85.6 million
to completely discharge Italy!s indebtedness under three
Marshall Plan loans, and $92,5 million to pay in full three
loans to Italy made from the proceeds of the sale of surplus
agricultural commodities under Public Law 480.
The Marshall Plan loans, originally amounting to $95-6
million, were made to Italy during the period 1949-1952 and
were scheduled for repayment over the period 1956-19&7. The
PL 480 sales were made in the years 1955-1958 and the loans
made from the proceeds, $92,5 million, were scheduled to be
repaid over the period 1961-1998.
Arrangements for the prepayment were made on May 17
between the Treasury Minister of Italy, Roberto Tremelloni,
and United States Treasury Secretary, Douglas Dillon. At
that time, in a letter to Minister Tremelloni, Secretary
Dillon stated: "The spirit with which your Government has
entered into these discussions is most gratifying and is
further evidence of the kind of cooperation which is an
essential factor in the strength and stability of the
International financial system. Your ability to prepay
these obligations is a reflection of the sound position of
the Italian economy in which you must take deep satisfaction
and of the strength of your balance of payments position.
0O0
D-554
14 7
Director of External Finance in the French Ministry of Finance;
Mr. Rene^Larre, Financial Counselor of the French Embassy;
Mr. Pierre-Brossolette and Mr. fe Serise, Technical Counselors
to Minister Giscard d'Estaing.
«<V^- ^ " 7
VISIT OF VALERY GISCARD d'ESTAING,
MINISTER OF FINANCE AND ECONOMIC AFFAIRS OF FRANCE
Valery Giscard d'Estaing, Minister of Finance and Economic
Affairs of France, and Secretary of the Treasury, Douglas
Dillon, have held very useful discussions on economic matters
of mutual interest. Minister Giscard dfEstaing visited the
United States upon the invitation of Secretary Dillon, which
was extended to him when he became Minister of Finance in
January of this year.
The talks covered a review of the general economic
situation and balance of payments prospects in France and the
United States, as well as the rest of the world. Minister
Giscard d'Estaing and Secretary Dillon noted with satisfaction
the progress being made in the balance of payments of the United
States.
They also noted the continuing progress in international
financial cooperation in the International Monetary Fund, the
Organization for Economic Cooperation and Development and in
numerous bilateral consultations and agrees that these measures
had substantially strengthened the international monetary
system.
The Minister was accompanied by Mr. Andre de Lattre,
TREASURY DEPARTMENT
WASHINGTON, D.C.
w
July 20, 1962
FOR IMMEDIATE RELEASE
VISIT OF VALERY GISCARD d'ESTAING,
MINISTER OF FINANCE AND ECONOMIC AFFAIRS OF FRANCE
Valery Giscard d'Estaing, Minister of Finance and Economic
Affairs of France, and Secretary of the Treasury, Douglas
Dillon, have held very useful discussions on economic matters
of mutual interest. Minister Giscard d'Estaing visited the
United States upon the invitation of Secretary Dillon, which
was extended to him when he became Minister of Finance in
January of this year.
The talks covered a review of the general economic
situation and balance of payments prospects in France and the
United States, as well as the rest of the world. Minister
Giscard d'Estaing and Secretary Dillon noted with satisfaction
the progress being made in the balance of payments of the ^
United States.
They also noted the continuing progress in international
financial cooperation in the International Monetary Fund, the
Organization for Economic Cooperation and Development and In
numerous bilateral consultations and agreed that these measures
had substantially strengthened the International monetary
system.
The Minister was accompanied by Mr. Andre de Lattre,
Director of External Finance In the French Ministry of Finance;
Mr. Rene Larre, Financial Counselor of the French Embassy;
Mr. C. Pierre-Brossolette and Mr. J. Serise, Technical
Counselors to Minister Giscard d'Estaing.
0O0
D-555
i
&JS3S8I
July M£$ M&&
ng|iJS»
wmmnm'a
to be in ssMittoa&l
& fffi^i t$ar ^ T G 0 # ^ O 0 A O ^ I » <@v
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fr|ft*%ff
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oas v ^ r or
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j$mtikkmd Wmw
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§*9tS>4009
24,411,000
6,665,000
4,977,000
11,61B,000
6,130,0$)
1G,11S,00Q
5,474,000
17,440,000
171,373,000
17,141*000
24,677,000
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| H | @ ( | ig i!HQl,-V*d*
TREASURY DEPARTMENT
FOR RELEASE A. M. NEWSPAPERS,
Tuesday, July 24, 1962.
WASHINGTON, D.C.
July 23, 1962
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 April 26, 1962,
and the other series to be dated July 26, 1962, which were offered on July 18, were
opened at the Federal Reserve Banks on July 23. Tenders were invited for $1,300,000,000,
or thereabouts, of 91-day bills and for $700,000,000, or thereabouts, of 182-day bills.
The details of the two series are as follows:
RANGE OF ACCEPTED
COMPETITIVE BIDS:
High
Low
Average
91-day Treasury bills
maturing October 25, 1962
Approx. Equiv.
Price
Annual Rate
99.273
..2.876$
99.265
2.908$
99.269
2.892$ 1/
182-day Treasury bills
maturing January 24, 1965
Approx. Equiv.
Price
Annual Rate
98.440 a/
3.086$
98.426
3.113$
98.431
3.103$ 1/
a/ Excepting one tender of $100,000
3 percent of the amount of 91-day bills bid for at the low price was accepted
67 percent of the amount of 182-day bills bid for at the low price was accepted
TOTAL TENTERS APPLIED FOR AND ACCEPTED BY FEDERAL RESERVE DISTRICTS:
Applied For
Accepted
District
Applied For
Accepted
I
f
23,834,000
|
18,191,000 $ 13,531,0007
Boston
22,634,000
1,567,310,000
1,033>,204,000
New York
870,630,000
507,806,00^
30,077,000
9,030,000.
Philadelphia
13,768,000
2,8S0>QQ&
39,244,000
30,411,000;
Cleveland
29,682,000
24,411, QO0.
21,217,000
6,763,„Q00
Richmond
18,307,000
6,663,000
23,065,000
5,577,000
Atlanta
17,440,000
4,977,000
235,893,000
141,935,000
Chicago
171,373*000
58,575,000
26,329,000
11,618,000
St. Louis
21,329,000
10,118,000,
17,141,000
6,139,000
Minneapolis
13,641,000
5,474,00Q>
31,072,000
15,128,000
Kansas City
31,072,000
12,478,000
24,577,000
11,662,000
Dallas
16,607,000
5,662,000
89,735,000
69,309,000
San Francisco
73,975,000
47,720,000
$2,129,494,000
$1,300,458,000 b/ $1,358,967,000 $700,245,000 c/
TOTAIS
b/ Includes $237,956,000 noncompetitive tenders accepted at the average price of 99.269
c/ Includes $56,852,000 noncompetitive tenders accepted at the average price of 98*431
1/ On a coupon issue of the same length and for the same amount invested, the return oil
these bills would provide yields of 2.95$, for the 91-day bills, and 3.20$, 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 bonda 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 perioA, with semiannual
compounding if more than one coupon period is involved.
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cO
STATUTORY DEBT LIMITATION
As of
1 C9
June 30, 1963
"~
Washington,
July 24.1962
"
* '*
of that
anteed
(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, I96I and ending June 30, 1962, the above limitation ($285,000,000,000) shall be temporarily increased by $13,000,000,000. The Act of March 13, 1962 (P. L. 87-414 87th Congress) provides for an additional temporary
increase of $2,000,000,000, which raises the limitation to $300,000,000,000 for the period beginning on March 13, 1962 and
ending on June 30, 1962.
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
$ 3 0 0 # 0 0 0 000 000
Outstanding »
»wwy
Obligations issued under Second Liberty Bond Act, as amended
Interest-bearing:
Treasury bills
$4-2,036,131»000
Certificates of indebtedness
13 .5*710*7 »000
Treasury notes
65.463.671.000
$121,046,849,000
Bonds Treasury
75 »©25 ,280 ,650
•Savings (current redemption value)
,47»606,7l4,l4O
Depositary
137 #834,500
R. E. A. series
24, 691,000
Investment series
4.726.997.000
127,521,5171290
Certificates of Indebtedness Foreign series
860,000,00©
Foreign Currency series
74.942.500
934,942,500
Special Funds Certificates of indebtedness
6,591»099»000
Treasury notes
6,844,919,000
Treasury bonds
31.502.674.000
44,938.692.000
Total interest-bearing
294,442,000,790
Matured, interest-ceased
434,912,439
Bearing no interest:
United States Savings Stamps
52.601.520
Excess profits tax refund bonds
729»189
Special notes of the United States :
Internat'l Monetary Fund series
2,667,000,000
Internat'l Develop. Ass'n. series
115»304«4©0
Inter-American Develop. Bank series
55.000.000
2.890.635.109
Total
297,767.548,33s
Guaranteed obligations (not held by Treasury):
Interest-bearing:
Debentures: F. H. A. & D C Stad. Bds
4 4 3 » 6 8 8 ,500
Matured, interest-ceased
^ M i
Grand total outstanding
Balance face amount of obligations issuable under above authority
Reconcilement with Statement of the Public Debt
tfWie
444.218.925
2 9 8 . 9 1 ^ |7"7t^"«?
1,768,232,7<"
^U,
lyOC
(Daily Statement of the United States Treasury, JUH6 29, 1962
(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
298,200,822,72
7?7^'ivf
2 9 8 , 6 4 5 f 0*1 »°7
43jf iffi*'-^;
298,211,767.263
D-557
CQ
STATUTORY DEBT LIMITATION
At'nf
Ju:-3 30. 1962
Washington,,
July 2^19t2
purpos
demption value of any obligation issued on a discount basis which is redeemable prior to maturity at the option of the holder
shall be considered as its face amount." T h e Act of June 30, 1961 (P. L. 87-69 87th Congress) provides that during the
period beginning on July 1, I96I and ending June 30, 1962, the above limitation ($285,000,000,000) shall be temporarily increased by $13,000,000,000. T h e Act of March 13, 1962 (P. L. 87-414 87th Congress) provides for an additional temporary
increase
—_
of
—- v«-i»#«»»»,N»»»WJ\#wr,
$2,000,000 000, which
..-.«—.. .—.^.^^
raises the
»..>. ••...•kuvawu
limitation to
»v» «
$300,000,000,000
^ u u , v u v , v v v , v v v t«»
for mthe
t jjEuuu
period beginning
ucgiuuiiig vu
on 1M a r c h 13, 1 9 6 2 a n d
ending on June 30, 19o2.
T h e following table shows the face amount of obligations outstanding and the face amount which can still be issued
under this limitation;
Total face amount that m a y be outstanding at any one time
$300,000,000,000
Outstanding Obligations issued under Second Liberty Bond Act, as amended
Interest-bearing
Treasury bills
$42,036,131,000
Certificates of indebtedness.
Treasury notes
13,547,047,000
65.463,671.000
$121,046,849,000
75.025,280,650
47,606,714,140
137.834,500
24,691,000
4.726.997.000
127.521.517.290
860,000,000
74.942.500
934,942,500
Bonds Treasury
•Savings (current redemption
value).
Depositary
R. E. A. series
Investment series
Certificates of Indebtedness Foreign series
Foreign Currency series
Special Funds Certificates o-f indebtedness
Treasury notes
Treasury bonds
6,591,099.000
6,844,919,000
31.502.674.000
Total interest-bearing
Matured, interest-ceased
44.938.692.000
294,442,000,790
434,912,439
Bearing no interest:
United States Savings Stamps
52,601,520
729.189
Excess profits tax refund bonds
Special notes of the United States
Internat'l Monetary Fund series
Internat'l Develop. Ass'n. series _
Inter-American Develop. Bank series.
2,667,000,000
115,304,400
55.000.000
Total
Guaranteed obligations (not held by Treasury):
2,890,63^109.
297,767.548,338
Interest-bearing :
Debentures: F. H. A. & D C Stad. Bds
Matured, interest-ceased
443,688,500
530,4^5
J&ft»21B.925.
_^_m_Z-g___v_
Grand total outstanding
Balance face amount of obligations issuable under above authority.
1.788,232,737
Reconcilement with Statement of the Public Debt
June 30, 1962
(Daily Statement of the United States Treasury, _
June ^ e > 1 9 6 2
Outstanding -
I
•/
Total gross public debt
Guaranteed obligations not owned by the Treasury
Total gross public debt and guaranteed obligations
Deduct - other outstanding public debt obligations not subject to debt limitation
D-557
298,200,822,721
444,216.925
4 - M M M M M M ' - m M i l M U ^ . _«».*JL_7_-.irfC»
298,645,041,646
433.274^83
298,211,767,263
-. 3 -
i M.
„„_
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. 418 (current revision) and this notice, prescribe the terms of the Treasury bills and govern the conditions of their tissue.
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.
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.
Immediately after the closing hour, tenders will be opened at the Federal
Reserve Banks and Branches, following which public announcement will be made by
the Treasury Department of the amount and price range of accepted bids. Those
submitting tenders will be advised of the acceptance or rejection thereof. The
Secretary of the Treasury expressly reserves the right to accept or reject any
or all tenders, in whole or in part, and his action in any such respect shall be
final. Subject to these reservations, noncompetitive tenders for $200,000 or
Q__0C
less for the additional bills dated May 5, 1962
, ( 91
days remain-
mz
-gar
ing until maturity date on Hove-feer 1, 1962
) and noncompetitive tenders for
$ 100,000 or less for the 182 -day bills without stated price from any one
™^^EKST*™-*
^r____™""
TEA
-_B_v
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
Banks on
August 2, 1962
, in cash or other immediately available funds or
in a like face amount of Treasury bills maturing
August 2, 1962
OBSK
. Cash
Q#.9&*t*:§x>wsA»;*<»>•€•
TREASURY DEPARTMENT
Washington
*| q C
-^ ^ "
FOR IMMEDIATE RELEASE, &&X 2$, 1962
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 $ 2,000,000,000 , or thereabouts,
TOO
cash and in exchange for Treasury bills maturing Angmst 2, 1962
, in the amount
of $ 1,801,910,000 , as follows:
91
-day bills (to maturity date) to be issued
August 2, 1962
- ^
in the amount of $1,500,000,000
f
—
or thereabouts, represent-
ing an additional amount of bills dated
May 3, 1962
,
and to mature November 1, 1962 , originally issued in the
amount of $ 600,048,00© , the additional and original bills
to be freely Interchangeable.
182 -day bills, for $700,000,000 , or thereabouts, to be dated
August 2, 1962 , and to mature Jaauary 31, 196S
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 onl
and in denominations of $1,000, $5,000, $10,000, $50,000, $100,000, $500,000 an
$1,000,000 (maturity value).
Tenders will be received at Federal Reserve Banks and Branches up to the
Daylight Saving
closing hour, one-thirty p.m., Eastern/___OS__X3Xtime, Monday, July 50, 1962
Tenders will not be received at the Treasury Department, Washington. Each tender
must be for an even multiple of $1,000, and in the case of competitive tenders
price offered must be expressed on the basis of 100, with not more than three
77.
1 Cu
J- ^ -
TREASURY DEPARTMENT
WASHINGTON, D.C.
• July 25, 1962
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
$ 2,000,000,000, or thereabouts, for cash and in exchange for
Treasury bills maturing August 2, 1962,
in the amount of
$1,801,910,000, as follows:
91-day bills (to maturity date) to be issued August 2, 1962,
In the amount of $1,300,000,000, or thereabouts, representing an
additional amount of bills dated May 3, 1962,
and to
mature November 1,1962, originally issued in the amount of
$600,048,000, the additional and original bills to be freely
interchangeable.
182-day bills, for $ 700,000,000, or thereabouts, to be dated
August 2, 1962,
and to mature January .31, 1963.
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, $50,000, $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 p.m., Eastern Daylight Saving
time, Monday, July 30, 1962.
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
D-558of Treasury bills applied for, unless the tenders are
amount
accompanied by an express guaranty of payment by an incorporated bank
or trust company.
- 2 Immediately after the closing hour, tenders will be opened at
the Federal Reserve Banks and Branches, following which public
announcement will be made by the Treasury Departmment of the amount
and price range of accepted bids. Those submitting tenders will be
advised of the acceptance or rejection thereof. The Secretary of
the Treasury expressly reserves the right to accept or reject any or
all tenders, In whole or in part, and his action in any such respect
shall be final. Subject to these reservations, noncompetitive
tenders for $200,000 or less for the additional bills dated
May 3, 19o2,
(91-days remaining until maturity date on
November 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 Banks on August 2, 1962,
in cash or other immediately available funds or in a like face
amount of Treasury bills maturing August 2, 1962. Cash and
exchange tenders will receive equal treatment. Cash adjustments
will be mads 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
0O0 the taxable year for which the
sale or redemption at maturity during
return is made, as ordinary gain or loss.
Treasury Department Circular No. 4l8 (current, revision) and this
notice
prescribe
theBank
terms
the Treasury
bills and
govern
the
conditions
any
Federal
of
Reserve
their
issue.
orof
Branch.
Copies
of the circular
may
be obtained
from
OJ
CD
TREASURY DEPARTMENT
WASHINGTON, D.C.
July 26, 1962
FOR IMMEDIATE RELEASE
TREASURY DECISION ON MACARONI PRODUCTS
UNDER THE ANTIDUMPING ACT
The Treasury Department has determined that macaroni products
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 $131,739*
TREASURY DEPARTMENT
—
WASHINGTON. D.C
July 26, 1962
FOR IMMEDIATE RELEASE
TREASURY DECISION ON MACARONI PRODUCTS
UNDER THE ANTIDUMPING ACT
The Treasury Department has determined that macaroni products
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 $131,739.
63s
- 3 -
IRQ
- ^ ~<
Savings-type investors will be permitted to pay for the 4sfcf> bonds of 1987-92
in installments up to October 15, 1962 (not less than 30$ by August 15; 60$ by
September 15; and full payment by October 15). Amounts allotted to other classes
of subscribers must be paid for in fall on August 15.
Savings-type investors who may subscribe to the 4j-$ bonds on a deferred
payment basis are:
Pension and Retirement Funds - public and private
Endowment Funds
Common Trust Punds under Regulation F of the Board of Governors of
the Federal Reserve System
Insurance Companies
Mutual Savings Banks
Fraternal Benefit Associations and Labor Unions* insurance funds
Savings and Loan Associations
Credit Unions
Other Savings Organizations (not including commercial banks)
States, Political Subdivisions or instrumentalities thereof, and
Public Eunds
Where subscribers in this group (except States, political subdivisions or
instrumentalities thereof, and public pension and retirement and other public
funds) elect to pay for such bonds in installments, delivery of 5$ of the total
par amount allotted will be withheld until payment for the total amount allotted
has been completed.
The _5$ bonds will be redeemable at par prior to maturity in payment of
Federal estate taxes if owned by the decedent at time of death.
In addition to the amounts offered for public subscription, Government Investment Accounts will be allotted up to $100 million of the 4$ bonds and up to
$50 million of the 4ij$ bonds.
636
- 2
Subscriptions will be received subject to allotment. Payment for the new
securities may be made in cash, or in 4$ Treasury Notes of Series B-1962, or in
3^$ Treasury Notes of Series G-1962, which will be accepted at par, in payment
or exchange, in whole or in part, for the new securities subscribed for, to the
extent such subscriptions are allotted by the Treasury.
Subscriptions from commercial banks, for their own account, will be restricted
in the case of the certificates to an amount not exceeding 50$ of the combined
capital, surplus, and undivided profits of the subscribing bank and in the case
of both issues of bonds to an amount not exceeding 10$ of the combined total of
time and savings deposits, including time certificates of deposit, or 25$ of the
combined capital, surplus, and undivided profits of the subscribing bank, whichever is greater.
Subscriptions from commercial and other banks for their own account, Federally.
insured savings and loan associations, States, political subdivisions or instrumentalities thereof, public pension and retirement and other public funds, international organizations in which the United States holds membership, foreign central banks and foreign States, dealers who make primary markets in Government
securities and report daily to the Federal Reserve Bank of New York their positions with respect to Government securities and borrowings thereon, Government
Investment Accounts, and the Federal Reserve Banks will be received without
deposit•
Subscriptions from all others must be accompanied by payment of 2$ (in cash,
or Treasury Notes of Series B-1962, or Treasury Notes of Series G-1962, at par)
in the case of the certificates and 10$ in the case of both issues of bonds, of
the amount of new securities applied for which will not be subject to withdrawal
until after allotment.
The Secretary of the Treasury reserves the right to reject or reduce any
subscription, to allot less than the amount of securities applied for, and to
make different percentage allotments to various classes of subscribers; and any
action he may take in these respects shall be final. Subject to these reservations, all subscriptions for the certificates from States, political subdivisions
or instrumentalities thereof, public pension and retirement and other public funds,
international organizations in which the United States holds membership, foreign
central banks and foreign States, Government Investment Accounts, and the Federal
Reserve Banks, will be allotted in full. The bases of the allotment of all subscriptions will be publicly announced, and allotment notices will be sent out
promptly upon allotment.
All subscribers are required to agree not to purchase or to sell, or to make
any agreements with respect to the purchase or sale or other disposition of any
of the new securities until after midnight July 30, 1962.
Commercial banks in submitting subscriptions will be required to certify
that they have no beneficial interest in any of the subscriptions they enter for
the account of their customers, and that their customers have no beneficial
interest in the banks1 subscriptions for their own account.
63B
1Q
TREASURY DEPARTMENT
WASHINGTON, D.C.
July 26, 1962
FOR IMMEDIATE RELEASE
TREASURY ANNOUNCES NEW FINANCING
The Treasury announced today its first major borrowing operation of the
new fiscal year. It will offer for cash $6.5 billion of one-year 3-1/2$ certificates, at par; $1.5 billion of 6-1/2 year 4$ bonds, at par; and up to
$750 million of 25-30 year 4-l/4$ bonds at a price of 101 to yield 4.19$.
The proceeds will be used to retire approximately $7.5 billion of securities
maturing on August 15, and to provide additional cash sufficient to complete
the Treasury's needs until the end of September.
This offering, by covering the full maturity range, will provide attractive outlets for investors of all types, will maintain a balanced debt structure,
and will help to activate presently accumulating long-term funds.
Books will be open for the cash subscriptions on Monday, July 30, and any
subscriptions postmarked before midnight on that day will be accepted. The
certificate is being offered for subscription without credit to tax and loan
accounts in the commercial banks. Both of the bonds can be paid for through
credit to such accounts. Payment for all of the new securities w i H be due
August 15, 1962; however, payment for the longer bond by savings-type subscribers may be made in installments over a three-month period*
The maturing securities to be redeemed in cash are:
$158 million of 4$ Treasury Notes of Series B-1962, dated
September 26, 1957, maturing August 15, 1962, and
$7,325 million of 3jj$ Treasury Notes of Series G-1962,
dated February 15, 1961, maturing August 15, 1962.
The new cash to be borrowed will be obtained from the issue of:
$6,500 million, or thereabouts, of 3j$ Treasury Certificates
of Indebtedness, to be dated August 15, 1962, and to mature
August 15, 1963,
$1,500 million, or thereabouts, of 4$ Treasury Bonds, to be
dated August 15, 1962, and to mature February 15, 1969, and
Up to $750 million, or thereabouts, of _J$ Treasury Bonds of 1987-92,
to be dated August 15, 1962, and to mature August 15, 1992, callable
at the option of the United States on any interest date on and after
August 15, 1987.
D-559
TREASURY DEPARTMENT
~e2
WASHINGTON, D.C.
July 26, 1962
FOR IMMEDIATE RELEASE
TREASURY ANNOUNCES NEW FINANCING
The Treasury announced today its first major borrowing operation of the
new fiscal year. It will offer for cash $6.5 billion of one-year 3-1/2$ certificates, at par; $1.5 billion of 6-1/2 year 4$ bonds, at par; and up to
$750 million of 25-30 year 4-l/4$ bonds at a price of 101 to yield 4.19$.
The proceeds will be used to retire approximately $7.5 billion of securities
maturing on August 15, and to provide additional cash sufficient to complete
the Treasury's needs until the end of September.
This offering, by covering the full maturity range, will provide attractive outlets for investors of all types, will maintain a balanced debt structure,
and will help to activate presently accumulating long-term funds.
Books will be open for the cash subscriptions on Monday, July 30, and any
subscriptions postmarked before midnight on that day will be accepted. The
certificate is being offered for subscription without credit to tax and loan
accounts in the commercial banks. Both of the bonds can be paid for through
credit to such accounts. Payment for all of the new securities will be due
August 15, 1962; however, payment for the longer bond by savings-type subscribers may be made in installments over a three-month period.
The maturing securities to be redeemed in cash are:
$158 million of 4$ Treasury Notes of Series B-1962, dated
September 26, 1957, maturing August 15, 1962, and
$7,325 million of 3|$ Treasury Notes of Series G-1962,
dated February 15, 1961, maturing August 15, 1962.
The new cash to be borrowed will be obtained from the issue of:
$6,500 million, or thereabouts, of 3|$ Treasury Certificates
of Indebtedness, to be dated August 15, 1962, and to mature
August 15, 1963,
$1,500 million, or thereabouts, of 4$ Treasury Bonds, to be
dated August 15, 1962, and to mature February 15, 1969, and
Up to $750 million, or thereabouts, of 4j$ Treasury Bonds of 1987-92,
to be dated August 15, 1962, and to mature August 15, 1992, callable
at the option of the United States on any Interest date on and after
August 15, 1987.
D-559
A
rO
- 2 Subscriptions will be received subject to allotment. Payment for the new
securities may be made in cash, or in 4$ Treasury Notes of Series B-1962, or in
3j$ Treasury Notes of Series G-1962, which will be accepted at par, In payment
or exchange, in whole or in part, for the new securities subscribed for, to the
extent such subscriptions are allotted by the Treasury.
Subscriptions from commercial banks, for their own account, will be restricted
in the case of the certificates to an amount not exceeding 50$ of the combined
capital, surplus, and undivided profits of the subscribing bank and in the case
of both issues of bonds to an amount not exceeding 10$ of the combined total of
time and savings deposits, including time certificates of deposit, or 25$ of the
combined capital, surplus, and undivided profits of the subscribing bank, whichever is greater.
Subscriptions from commercial and other banks for their own account, Federallyinsured savings and loan associations, States, political subdivisions or instrumentalities thereof, public pension and retirement and other public funds, international organizations in which the United States holds membership, foreign central banks and foreign States, dealers who make primary markets in Government
securities and report daily to the Federal Reserve Bank of New York their positions with respect to Government securities and borrowings thereon, Government
Investment Accounts, and the Federal Reserve Banks will be received without
deposit.
Subscriptions from all others must be accompanied by payment of 2$ (in cash,
or Treasury Notes of Series B-1962, or Treasury Notes of Series G-1962, at par)
in the case of the certificates and 10$ in the case of both issues of bonds, of
the amount of new securities applied for which will not be subject to withdrawal
until after allotment.
The Secretary of the Treasury reserves the right to reject or reduce any
subscription, to allot less than the amount of securities applied for, and to
make different percentage allotments to various classes of subscribers; and any
action he may take in these respects shall be final. Subject to these reservations, all subscriptions for the certificates from States, political subdivisions
or Instrumentalities thereof, public pension and retirement and other public funds,
international organizations in which the United States holds membership, foreign
central banks and foreign States, Government Investment Accounts, and the Federal
Reserve Banks, will be allotted in full. The bases of the allotment of all subscriptions will be publicly announced, and allotment notices will be sent out
promptly upon allotment.
All subscribers are required to agree not to purchase or to sell, or to make
atty agreements with respect to the purchase or sale or other disposition of any
&_• the new securities until after midnight July 30, 1962.
Commercial banks in submitting subscriptions will be required to certify
that they have no beneficial Interest in any of the subscriptions they enter for
the account of their customers, and that their customers have no beneficial
interest in the banks' subscriptions for their own account.
_ ~ _
/ Q.*
° 'f
Savings-type investors will be permitted to pay for the 4j$ bonds of 1987-92
in installments up to October 15, 1962 (not less than 30$ by August 15; 60$ by
September 15; and f u H payment by October 15). Amounts allotted to other classes
of subscribers must be paid for In full on August 15.
Savings-type investors who may subscribe to the 4^$ bonds on a deferred
payment basis are:
Pension and Retirement Funds - public and private
Endowment Funds
Common Trust lunds under Regulation F of the Board of Governors of
the Federal Reserve System
Insurance Companies
Mutual Savings Banks
Fraternal Benefit Associations and Labor Unions' insurance funds
Savings and Loan Associations
Credit Unions
Other Savings Organizations (not including commercial banks)
States, Political Subdivisions or instrumentalities thereof, and
Public iunds
Where subscribers in this group (except States, political subdivisions or
instrumentalities thereof, and public pension and retirement and other public
funds) elect to pay for such bonds in installments, delivery of 5$ of the total
par amount allotted will be withheld until payment for the total amount allotted
has been completed.
The 4j$ bonds will be redeemable at par prior to maturity in payment of
Federal estate taxes if owned by the decedent at time of death.
In addition to the amounts offered for public subscription, Government Investment Accounts will be allotted up to $100 million of the 4$ bonds and up to
$50 million of the 4^$ bonds.
JW K
FOfi HELFASS A*L<
July 30, 15*2
*—*rt *&¥ Hh *****
wmnsB or ff_y_sy«r»s tmax
BILL omara
the Treasury Departsaat aisioaaoed last eveolag that ths tenders tor two aerie* at
Treasury billst oae aariaa to be aa additional issue at tha miXXm dmtmd Kay J* l*4tf and
the other series to aa dated August 2, 1962, which _tr* offarad on July 25* vara opened
iarited for $1*300*300,000* or
at the Federal Reserve Banks on July 30» famdmra
thereabouts, at 91-day bills sad for $700*000*000*
tar 162-dar bills.
tha details at tha two series are as followsi
182-day Treasury
91-amy Treasury bills
hkmv. m k
lt62
CWEfXTXff
M _ H « »
Equii
SculT.
Prima
Price
Biftfc
Annual Bate
99*27*
3*078*
99*m
9ZA&
3.075*1/
99#27k
ft percent af tha
of 91-day
bill*i/
old far at the law priaa
%*mA
80 percent of the
af 182-day bills bid for at tha law price
&*W
*.m—
TOTAL mmm
District
Bostoa
•aw York
r-dladelphia
Cleveland
Atlanta
Cfelaago
St* Louis
APPLIED TOR km ACCSPTSD I T mm®k%
applied for
DISTHICTSI
Applied For
Accepted
*
& * & »
r&,iAg*o^ 59U,9b9*000
891*1*60*000
l»3flb,9i9»000
1,61*0,510,000
Ii*,9o6,000
2*516*000
l99k99OOQ
29*9*6*000
>rr&»ooo
2U,37U*O0O
11,1*87,000
30*620*000
,99t**000
13*2X1*000
1,138,000
6*138,00)
,592*000
12,57*000
208
3*053,000
3*919*000
•793,000
170*3*3*000
Ul*600*000
122,30U,0O0
&; 735*000
a,735,ooo
4,831*000
8,361,000
City
U9 »85S*ooo
*7*jl0*000
3,U51,000
6*511,000
flail all
23 339,000
aJ4,879»000
23,635,000
12*967*000
San Franeisco
,063*000
12,713,000
$2*161,157,000
$l,30O,75U.00O./
$1,575,395,000
8*993*000
3*196*000
TOTALS
61*^,000
$700*06b,000
y
laeludes $225*070*000 itoaeaKpetitlvc tenders accepted at tha average ptUm at 99*27k
Includes 5U»172,000 noncompetitive tenders aooepted at the average price of 98Jba6
O B a coupon kmmmm at tha sans leaftfa and for tha s a m amount inveated, the return aa
these bills would provide yields of 2.9k2* for the ?l-dey billa, and 3.17$, for Urn
162-day bills* Interest rates on bills are ousted la terms of bmmfc discount with
tha return related to the faoe amount of the bills payable at aaturity rather tfasa
tha amount lavested sad their length la actual number of days related to a 360-day
year, la contrast, yields oa certificates* notes* sad beads are computed la teras
of interest oa tha amount lavested, and relate tha number af days ranafnlng la at
interest payment period to tha actual number of days la the period* with aeslaniml
coapo-nding if more than oae coupon period is involved.
t
rM4ift*w
wmmrn
TREASURY DEPARTMENT
W A S H I N G T O N , D.C.
FOR RELEASE A. M. NEWSPAPERS,
Tuesday, July 31, 1962.
July 30, 1962
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 May 3, 1962, and
the other series to be dated August 2, 1962, which were offered on July 25, were opened
at the Federal Reserve Banks on July 30. Tenders were invited for $1,300,000,000, or
thereabouts, of 91-day bills and for $700,000,000, or thereabouts, for 182-day bills.
The details of the two series are as follows:
RANGE OF ACCEPTED
91-day Treasury bills
182-day Treasury bills
COMPETITIVE BIDS:
maturing November 1, 1962
maturing January 31, 1963
Approx. Equiv.
Approx. Equiv,
Price
Annual Rate
Price
Annual Rate
High
98.1*58
2.852$
99.279
3.050^
Low
2.881$
99.271
98.kkh
3.078$
Average
99.21k
2.87W 1/
98.UU6
3.075$ 1/
97 percent of the amount of 91-day bills bid for at the low price was accepted
80 percent of the amount of 182-day bills bid for at the low price was accepted
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
$
26,110,000
1,61*0,510,000
29,9if.6,000
2U,97U,000
15,99U,000
_U,592,ooo
208,793,000
26,735,000
2ii,855,000
k9,3399000
23,063,000
76,2U6,000
$2,161,157,000
Accepted
Applied For
$16,110,000
IT 6,i*U5,000
891,U60,000
1,30U,5U9,000
_U,9U6,000
7,9U9,000
2U,37U,000
30,620,000
13,211,000 :
6,138,000
12,337,000 t
3,919,000
170,3U8,000 t
122,3QU,000
21,735,000
8,381,000
17,310,000
6,511,000
UU,879,000
23,635,000
12,713,000
8,993,000
61,331,000
U5,951,000
$1,300,75U,000 a/ $1,575,395,000
Accepted
$ 5*91*5,000
59U,9U9,000
2,316,000
11,1*87,000
1,138,000
3,053,000
Ul,800,000
U,831,000
3,U5l,000
12,967,000
3,198,000
1U,929,000
$700,06U,000 b/
\/ Includes $225,070,000 noncompetitive tenders accepted at the average price of 9
y Includes 5U, 172,000 noncompetitive tenders accepted at the average price of 98.UU6
/ On a coupon issue of the same length and for the same amount invested, the return on
these bills would provide yields of 2.9k%y for the 91-day bills, and 3.11%, for the
182-day bills. Interest rates on bills are quoted in terms of bank discount with
the return related to the face amount of the bills payable at maturity rather than
the amount invested and their length in actual number of days related to a 360-day
year. In contrast, yields on certificates, notes, and bonds are computed in terms
of interest on the amount invested, and relate the number of days remaining in an
interest payment period to the actual number of days in the period, with semiannual
compounding if more than one coupon period is involved.
D-560
TREASURY DEPARTMENT
l6
WASHINGTON, D.C.
July 31, 1962
FOR IMMEDIATE RELEASE
REVISIONS OP U.S.-GERMAN
INCOME TAX CONVENTION TO BE DISCUSSED
Representatives of the State and Treasury Departments will
meet later this year with representatives of the Federal Republic
of Germany to discuss possible revisions in the existing income
tax convention for the elimination of double taxation between
the United States and Germany.
Among the subjects expected to be discussed are: possible
modification of the withholding tax rate on intercorporate
dividends, which is now generally limited to a maximum of 15
per cent; the question of whether royalties, which are tax-free
under the convention, include payments for "know-how"; the
appropriate tax treatment of gains from the sale by a stockholder
in one country of stock in a corporation located in the other
country when the seller has a "substantial" interest in the
corporation.
The method of applying German turnover taxes to imports
from the United States may also be considered, although the
convention does not apply to turnover taxes. The German tax
on imports is designed to compensate for the fact that no
German turnover taxes have been paid on such goods during the
production process.
Interested persons in the United States who desire to
submit comments on the scope of the discussions or to submit
information pertinent to the subjects mentioned are invited to
send their views to Assistant Secretary Stanley S. Surrey,
Treasury Department, Washington 25, D. C. Deadline for receipt
of such comments is September 10, 1962.
0O0
D-561
TREASURY DEPARTMENT
WASHINGTON, D.C.
July 31, 1962
FOR IMMEDIATE RELEASE
REVISIONS OF U.S.-GERMAN
INCOME TAX CONVENTION TO BE DISCUSSED
Representatives of the State and Treasury Departments will
meet later this year with representatives of the Federal Republic
of Germany to discuss possible revisions in the existing income
tax convention for the elimination of double taxation between
the United States and Germany.
Among the subjects expected to be discussed are: possible
modification of the withholding tax rate on intercorporate
dividends, which is now generally limited to a maximum of 15
per cent; the question of whether royalties, which are tax-free
under the convention, include payments for "know-how"; the
appropriate tax treatment of gains from the sale by a stockholder
in one country of stock in a corporation located in the other
country when the seller has a "substantial" interest In the
corporation.
The method of applying German turnover taxes to imports
from the United States may also be considered, although the
convention does not apply to turnover taxes. The German tax
on imports is designed to compensate for the fact that no
German turnover taxes have been paid on such goods during th©
production process.
Interested persons in the United States who desire to
submit comments on the scope of the discussions or to submit
information pertinent to the subjects mentioned are invited to
send their views to Assistant Secretary Stanley S. Surrey,
Treasury Department, Washington 25, D. C. Deadline for receipt
of such comments is September 10, 1962.
0O0
D-561
co
en
.United States Savings Bonds Issued and Redeemed Through July j±, ±9&^
_ *
(Dollar amounts in millions - rounded and will not necessarily add to totals) -^j
% 0u.tstan_4
Amount
Issued 1/
MATURED
Series A-1935 - D-1941 .«
Series F & G-1941 - 1949
5,003
26,082
UNMATURED
Series E:. _/
1941
1942
1943
1944
1945
1946
1947
1948
1949
1950
1951
1952
1953
1954
1955
1956
1957
1958
1959
1960
1961
1962
1,816
8,018
12,901
15,026
11,761
.5,276
4,962
5,110
5,021
4,372
3,786
3,958
4>466
4,518
4,686
4,504
4,222
4,073
3,803
3,774
3,781
1,477
Unclassified....
Total Series E
$
15
190
4,988
25,892
1,508
6,655
10,749
12,416
9,501
4,029
3,600
3,590
3,432
2,891
2,468
2,447
2,637
2,603
2.654
2,549
2,277
2,035
1,812
1,599
1,234
205
481
366
Amount
Outstanding 2/
• 307
1,363
2,152
2,610
2,260
1,247
1,363
1,520
1,589
1,481
1,318
1,511
1,828
1,915
2,032
1,954
1,945
2,038
1,991
2,175
2,547
1,272
38,302
83,374
8,431
1,684
130.107
85.058
Series F and G:
1950
1951
1952
Unclassified ........
2,429
793
211
2,038
420
104
54
Total Series F and G
3,433
2.616
816
3,683
1,895
1,788
7
4,511
2.604
30,879
89.569
120,448
206
1962 _3/
Total Series E arid H
Series J and K-1952 - 1957
Total Series F, G, J and K ....
All Series <
1/
2/
y
Total matured .,
Total unmatured
| Grand Total
^
31,085
137.222
168,307
of Amt.IssiJ
.30 t
.73
16.91
17.00
16.68
17.37
19.22
23.64
27.47
29.75
31.65
33.87
34.81
38.18
40.93
42.39
43.36
43.38
46.07
50.04
52.35
57.63
67.36
86.12
-115
121,675
Series H-1952 -
y
Amount
Redeemed l /
1_74I
45,049
rL/
391
373
107
-54
31.48
80.03
34.62
16.10'
47.04
50.71
47,6??
47,859
Includes accrued discount.
g ^
SECHETAH*
0FFICE QF FISCAL ^
Current redemption value.
,
At option of owner bonds may be held and will earn interest for additional perioas
after original maturity dates.
Includes matured bonds which have not been presented for redemption.
..
United States Savings Bonds Issued and Redeemed Through July 31
1962
/» i
(Dollar amounts in millions - rounded and will not necessarily add to totals)
Amount
Amount
Amount
% Outstanding
Issued 1/ Redeemed 1/ Outstanding 2/ of Amt.Issued
'[AytJEED
^Series A-1935 - D-1941 ..
^Series F & G-1941 - 1949
5,003
26,082
$
4,988
25,892
%
15
190
.30
.73
16.91
17.00
16.68
17.37
19.22
23.64
27.47
29.75
31.65
33.87
34.81
38.18
40.93
42.39
43.36
43.38
46.07
50.04
52.35
57.63
67.36
86.12
UMATUKEP «/
Series E: -**
1941 .
1942 .
1943 .
1944 ..
1945 .
1946 .
1947 .
1948 .
1949 .
1950 .
1951 .
1952 .
1953 .
1954 .
1955 .
1956 .
1957 .
1958 .
1959 .
1960 .
1961 .
1962 .
Unclassified .........
Total Series E
Series H-1952 - 1962 $/%%
Total Series E and H .
Series F and G:
1950
.1951
1952
Unclassified
Total Series F and G
Series J and K-1952 - 1957 .,
Total Series F, G, J and K
{
Total matured .,
1,816
8,018
12,901
15,026
11,761
.5,276
4,962
5,110
5,021
4,372
3,786
3,958
4,466
4,518
4,686
4,504
4,222
4,073
3,803
3,774
3,781
1,477
366
121,675
1,508
6,655
10,749
12,416
9,501
4,029
3,600
3,590
3,432
2,891
2,468
2,447
2,637
2,603
2.654
2,549
2,277
2,035
1,812
1,599
1,234
205
481
83,374
• 307
1,363
2,152
2,610
2,260
1,247
1,363
1,520
1,589
1,481
1,318
1,511
1,828
1,915
2,032
1,954
1,945
2,038
1,991
2,175
2,547
1,272
-115
38,302
31.48
8,431
1,684
6,747
80t0?
130.107
85.058
2,429
793
211
2,038
420
104
54
--/ 391
373
107
-54
16.10
47.04
50.71
3,433
3,683
2.616
1,895
816
23.77
1,788
48.55
7,116
4.511
2.604
36.59
30,879
89,569
120,448
206
47,6??
47,859
.66
34.7?
28.44
31,085
137 .,22?
168,307
_
^
Total unmatured
Includes accrued
discount.
Grand Total
....
OFFICE OF FISCAL ASSISTANT SECRETARY
Current redemption value.
At option of owner bonds may be held and will earn interest for additional periods
after original maturity dates.
Includes matured bonds which have not been presented for redemption.
- 3 -
-; 7 1
and exchange tenders will receive equal treatment. Cash adjustments will be mad
for differences between the par value of maturing bills accepted in exchange an
the issue price of the new bills.
The income derived from Treasury bills, whether interest or gain from the sale
or other disposition of the bills, does not have any exemption, as such, and los
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 in-
terest. Under Sections 454 (b) and 1221 (5) of the Internal Revenue Code of 1954
the amount of discount at which bills issued hereunder are sold is not 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 actua
received either upon sale or redemption at maturity during the taxable year for
which the return is made, as ordinary gain or loss.
Treasury Department Circular No. 418 (current revision) and this notice, pre-
scribe the terms of the Treasury bills and govern the conditions of their tissue
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.
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 accompani
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 b
final. Subject to these reservations, noncompetitive tenders for $200,000 or
less for the additional bills dated May 10, 1962 , ( 91 days remain-
$&$
T_ST
ing until maturity date on
November 8, 1962
) and noncompetitive tenders for
$100,000 or less for the 182 ^day bills without stated price from any one
^209
$_£$
bidder will be accepted in full at the average price (In three decimals) of ac-
cepted competitive bids for the respective issues. Settlement for accepted ten-
ders in accordance with the bids must be made or completed at the Federal Reser
Banks on August 9, 1962 , in cash or other immediately available funds or
in a like face amount of Treasury bills maturing August 9. 1962 Cash
*_a*x
, /r)
—
wmxM\vvm\*i%\v.%\mY
TREASURY DEPARTMENT
Washington
FOR IMMEDIATE RELEASE* August 1, 1962
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 $ 2,000,000,000 , or thereabouts,
—
J&A
cash and in exchange for Treasury bills maturing August 9. 1962
, in the amount
of $ 1,804,290,000 , as follows:
91
-day bills (to maturity date) to be issued August 9, 1962
,
in the amount of $ 1,500,000,000 , or thereabouts, representing an additional amount of bills dated May 10, 1962 ,
and to mature
November 8, 1962
, originally issued in the
amount of $ 601,659,000 , the additional and original bills
to be freely interchangeable.
182 -day bills, for $ 700,000,000 , or thereabouts, to be dated
August 9, 1962 , and to mature February 7, 1963
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 onl
and in denominations of $1,000, $5,000, $10,000, $50,000, $100,000, $500,000 an
$1,000,000 (maturity value).
Tenders will be received at Federal Reserve Banks and Branches up to the
Daylight Saving
closing hour, one-thirty p.m., East ern/:6rt___affl_^ time, Monday, August 6, 1962
Tenders will not be received at the Treasury Department, Washington. Each tender
must be for an even multiple of $1,000, and in the case of competitive tenders
price offered must be expressed on the basis of 100, with not more than three
TREASURY DEPARTMENT
•J.—4
i. i J » „ . , . ^ . • .,•.,.B. i.l.....»i.u.iv.rfl.il.»,jWll
11 L H H W i w i r n
WASHINGTON, D.C.
August 1, 1962
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
$2,000,000,000, or thereabouts, for cash and in exchange for
Treasury bills maturing August 9, 1962,
in the amount of
$1,804,290,000, as follows:
91-day bills (to maturity date) to be issued August 9> 1962,
in the amount of $1,300,000,000, or thereabouts, representing an
additional amount of bills dated May 10, 1962,
and to
mature November 8, 1962, originally issued in the amount of
% 601,639,000, the additional and original bills to be freely
interchangeable.
182-day bills, for $700,000,000, or thereabouts, to be dated
August 9, 1962,
and to mature February 7, 1963.
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, $50,000, $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 p.m., Eastern Daylight Saving
time, Monday, August 6, 1962.
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
D-562
amount
of Treasury bills applied for, unless the tenders are
accompanied by an express guaranty of payment by an incorporated bank
or trust company.
- 2 Immediately after the closing hour, tenders will be opened at
the Federal Reserve Banks and Branches, following which public
announcement will be made by the Treasury Departmment of the amount
and price range of accepted bids. Those submitting tenders will be
advised of the acceptance or rejection thereof. The Secretary of
the Treasury expressly reserves the right to accept or reject any or
all tenders, in whole or in part, and his action in any such respect
shall be final. Subject to these reservations, noncompetitive
tenders for $200,000 or less for the additional bills dated
May 10, 1962,
(91-days remaining until maturity date on
November 8, 1962) and noncompetitive tenders for $100,000
or less for the ]£2 -day bills without stated price from any one
bidder will be accepted in full at the average price (in three
decimals) of accepted competitive bids for the respective issues.
Settlement for accepted tenders in accordance with the bids must be
made or completed at the Federal Reserve Bante on August 9> 1062,
in cash or other immediately available funds or in a like face
amount of Treasury bills maturing August 9, 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 arid 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
0O0 the taxable year for which the
sale or redemption at maturity during
return is made, as ordinary gain or loss.
Treasury Department Circular No. 4l8 (current, revision) and this
notice prescribe the terms of the Treasury bills and govern the
conditions
any Federalof
Reserve
their Bank
issue.
or Branch,
Copies of the circular may be obtained from
lid
TREASURY DEPARTMENT
WASHINGTON. D.C.
August 2, 1962
FOR IMMEDIATE RELEASE
RESULTS OF TREASURY'S NEW CASH OFFERING
The Treasury Department today announced that preliminary 'figures show subscriptions totaling about $20,157 million for the offering of $6,500 million, or
thereabouts, of 3-1/2 percent Certificates of Indebtedness of Series C-1963, due
August 15, 1963; $6,738 million for the offering of $1,500 million, or thereabouts,
of 4 percent Treasury Bonds of 1969, due February 15, 1969; and $316 million for
the offering of up to $750 million of 4-1/4 percent Treasury Bonds of 1987-92,
due August 15, 1992, callable at the option of the United States on any interest
date on and after August 15, 1987. Total subscriptions accepted amount to about
$6,759 million for the certificates; $1,695 million for the 4 percent bonds,
and $316 million for the 4-1/4 percent bonds.
Allotments are being made as follows?
5-1/2 PERCENT CERTIFICATES Subscriptions from States, political subdivisions or instrumentalities thereof, public pension and retirement and other public funds, international organizations in which the United States holds membership, foreign central banks and
foreign States, Government Investment Accounts, and the Federal Reserve Banks,
totaling about $4,669 million, are being allotted in full, as provided for in
the offering circular.
Subscriptions'from all others in amounts up to $50,000, totaling about
$89,385,000, are being allotted in full. Subscriptions in amounts over $50,000
are being allotted 12-1/2 percent, but not less than $50,000 to any one subscriber.
4 PERCENT BONDS Subscriptions in amounts up to $100,000, totaling about $210,638,000 are
being allotted in full. Subscriptions in amounts over $100,000 are being allotted
22 percent, but not less than $100,000 to any one subscriber. In addition,
$100,000,000 is being allotted to Government Investment Accounts.
4-1/4 PERCENT BONDS All subscriptions received, totaling about $316,024,500, are being allotted
in full. In addition, $50,000,000 is being allotted to Government Investment
Accounts.
Details by Federal Reserve Districts as to subscriptions and allotments will
be announced when final reports are received from the Federal Reserve Banks.
D-563
- 2 been a Foreign Service Officer since 19^8, serving at posts in
Munich, and Belgrade as well as in Washington. He was Consul
and economic officer at the American Embassy in Moscow from
1956 to 1958.
Mr. Killham was born in Chicago, and graduated from
Northwestern University with honors. Subsequently, he obtained
an M.A. degree from Columbia University, an M.P.A. from Harvard
University, and attended the London School of Economics.
Mr. Killham was in the Army during World War II. He has been a
Foreign Service Officer since 1952, serving at posts in London,
Edinburgh, Moscow and Washington, D. C.
Mr. Carswell was bern in Brooklyn, New York. He graduated from
Harvard College, magna cum laude, and holds an LL.B. degree, cum laud
from Harvard Law School. He served in the Navy from 1952 to 1955*
with Naval intelligence duty in Japan, Hong Kong, and the Philippines
Since 1956, Mr. Carswell has been an associate attorney in the firm
of Sherman & Sterling, New York City, performing banking, general
corporate and some tax work.
OoO
fater^*
_ [1/ -
DRAFT - 8-3-62
August 6, 1962
FOR IMMEDIATE RELEASE
STAFF CHANGES IN THE OFFICE OF
THE SECRETARY OF THE TREASURY
Treasury Secretary Douglas Dillon today designated William N,
Turpin as Special Assistant to the Secretary. Mr. Turpin
succeeds Theodore L. Eliot, Jr., who has served in this position
since January 1961. Mr. Eliot, a Foreign Service Officer, has
been assigned to the American Embassy in Tehran, Iran.
Mr. Turpin has been Director of the Treasury's Executive
Secretariat since January, 1962, and will be succeeded in that
position by Edward L. Killham, the Deputy Director, who joined
the Treasury In this capacity in January 1962. Mr. Killham's
place will be taken by Robert Carswell, who has been an attorney
in private practice in New York City.
Born in Macon, Georgia, Mr. Turpin is a summa cum laude
graduate of Dartmouth College and holds an M.A. degree from
Oxford University, where he studied as a Rhodes Scholar. He
served in the Marine Corps during World War II. Mr. Turpin has
August 6, 1962
FOR IMMEDIATE RELEASE
STAFF CHANGES IN THE OFFICE OF
THE SECRETARY OF THE TREASURY
Treasury Secretary Douglas Dillon today designated William N.
Turpin as Special Assistant to the Secretary. Mr. Turpin succeeds
Theodore L. Eliot, Jr., who has served in this position since
January, 1961. Mr. Eliot, a Foreign Service Officer, has been
assigned to the American Embassy in Tehran, Iran.
Mr. Turpin has been Director of the Treasury's Executive
Secretariat since January, 1962, and will be succeeded in that
position by Edward L. Killham, the Deputy Director, who joined
the Treasury in this capacity in January, 1962, Mr. Killham's
place will be taken by Robert Carswell, who has been an attorney
in private practice in New York City.
Born in Macon, Georgia, Mr. Turpin is a summa cum laude
graduate of Dartmouth College and holds an M.~K~. degree from Oxford
University, where he studied as a Rhodes Scholar. He served in
the Marine Corps during World War II. Mr. Turpin has been a
Foreign Service Officer since 1948, serving at posts in Munich,
and Belgrade as well as in Washington. He was Consul and economic
officer at the American Embassy in Moscow from 1956 to 1958.
Mr. Killham was born in Chicago, and graduated from Northwestern University with honors. Subsequently, he obtained an
M.A. degree from Columbia University, an M.P.A. from Harvard
University, and attended the London School of Economics.
Mr. Killham was in the Army during World War II. He has been a
Foreign Service Officer since 1952, serving at posts in London,
Edinburgh, Moscow, and Washington, D. C.
Mr. Carswell was born in Brooklyn, New York. He graduated
from Harvard College, magna cum laude, and holds an LL.B. degree,
cum laude, from Harvard Law School. He served in the Navy from
1952 to 1955, with Naval intelligence duty in Japan, Hong Kong,
and the Philippines. Since 1956, Mr. Carswell has been an associate
attorney in the firm of Sherman & Sterling, New York City, performing banking, general corporate and some tax work.
oOo
D-564
1 7Q
*4JLU
'4J:- < - 0
wii mmm
k. n* mm%m>im9
km&mk 6, 1962
•BOLTS or TttAJoaro «tsn,r ^o. mwmm
fma Ire_*ttry Doport&oiii iuia&ufHmd loot o*of_J|g that the traders for two ootioo of
tramamrj billa, am aartaa to be mm aMXttamaX Uam at tha HUa datm& m y 10, %$&$$
ami the othor series to ha dated &of«*t f, 1?6J, which m r a attara4 am August 1, w»rt
opened a t the fadarmX M m r w a Maka on August 6, Tenders were i c r i U d for *l,3OO,O9O,0i
or tl_MWfee«to, o f 91-J*y bills aad for ^700,000,000, o r thereabouts, o f lSft«ltjr billt.
ft** $ o t & U o of Uie tuo sorloo mra am follow*!
mmm m jkomtfmv
3ft*o*y f ro*o**y blllf
MtfSTXTITS um$
Aosrox. EottLv.
High
ft#iSt
\9fmt
s t a l i n g $565,000
of 91-day m%XXa U d tar am tha km* prima mam
at l§S**ty bill* hid for a t fete low priee m i
tarn
ol the
of tl»
totti r&*?M kffum mm AS© mmm®
m mmm»
-ft«tii Burnetii
81
iH — WMBw
l,U88 f 3a9,000
x$9m$m®
1U,562,000
Atlanta
Chi
St.
A__li«d fo r
907,109,000
li*,253,000
19,595,000
14,562,000
220*586,000
9
City
Z?,38ltf0O0
26,259,000
TOTALS
$l,?71,it_5,GaO
•fiilBtofiiS
sisS
_ _ _ _ _ _
$l,300,i45l,000 3 /
Ao-ootod
7,3?i*,0O0
9,i42ii,000
6,55it,OCK)
5,539,000
5,539.0*
108,237,000
Sa»*67,*0
5,095,wo
5#095*ooo
8,_5O,0W
6,6>0,CO0
S,2lt0,000
?,2i»Q,00Q
]»iriilailiiliSSi? ,
., IBifr^rlK
*1,202,3^,000
MSuS
IW»_1»0_|
to/ include* #216,660,000 nonsoapsUtiv* t$a4o?« *o*o»to<i at the ov«ro*« orioo of fMflf
' laolodoo $U9,8l9,0(X) noneo*petitiv* t«nd*r« accepted at th* OTOtogo prtoo o f 9 3 . W
On a ©©upon iosmo # f it* toao length and for the a m a ammmt i n v e s t s , the roittf* ofl
these oills would provia* yield e o f 2.861, for the ?l-_»y b U l e , and 3*08$, for t *
182-d*/ bills. Interest rates o n bill* ara quoted i a torso of bank discount with
tho rotaim raUtmd to the fooo aawmat of tha b U l o pa/ablt at sat _rity ratter t t e
invested *ed tfcoir loagth l a actual mmmtoar of **yo related to a 360*d*y
I n contrast, yield!- on oorilftoat#« # notes, and bonds a m ammmmtad i a t a n *
of iatorooi on tha aaoiait inrwstod, and rolate the maibor o f days ramairnksu is km
interest ma$mmm% period t o iho aotunl imtbor o f d«J» l a the ported, with
if m r a thou ama aampam oortod ie involv<
I
0 -&
7Q
TREASURY DEPARTMENT
W A S H I N G T O N , D.C
FOR RELEASE A. M. NEWSPAPERS,
Tuesday, August 7, 1962.
August 6, 1962
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 May 10, 1962,
and the other series to be dated August 9, 1962, which were offered on August 1, were
opened at the Federal Reserve Banks on August 6. Tenders were invited for $1,300,000,000,
or thereabouts, of 91-day bills and for $700,000,000, or thereabouts, of 182-day bills.
The details of the two series are as follows!
182-day Treasury bills
91-day Treasury bills
RANGE OF ACCEPTED
maturing February 7, 1963
maturing November 8, 1962
COMPETITIVE BIDS 8
Approx. Equiv.
Approx, Equiv.
Price
Annual Rate
Price
Annual Rate
High
98.1*96 a/
99.301*
2T975I
2.753£
Low
99.282
98.1*71*
2.81*0$
3.018£
Average
99.292
2.8Q2# y
98.1*89
2.990% y
a/ Excepting two tenders totaling $565,000
_1 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
TOTAL TENDERS APPLIED FOR AND ACCEPTED BY FEDERAL RESERVE DISTRICTS;
______________
Boston
"
New York
Philadelphia
Cleveland
Richmond
Atlanta
Chicago
St. Louis
Minneapolis
Kansas City
Dallas
San Francisco
TOTALS
Applied For
$
2U,378,000
1,1*88,389,000
29,253,000
19,909,000
11*, 562,000
20,359,000
220,586,000
29,939,000
20,873,000
29,88!*,000
26,259,000
l*7,03l*,OQO
$1,971,1*25,000
Accepted
I
11*,378,000
907,109,000
ll*,253,000
19,595,000
ll*,562,000
20,359,000
162,586,000
26,01*9,000
20,873,000
29,581*,000
2l*,069,000
l*7,03l*,OOQ
$1,300,1*51,000 b/
Applied For
Accepted
IT
1*,212,000 $ I*,212,000
1,006,801,000
57l*,28l,000
7,391*,000
2,39l*,000
8,l*2l*,000
6,l*2l*,000
6,551*,000
6,551*,ooo
5,539,000
5,539,000
108,237,000
52,267,000
7,1*88,000
6,11*3,000
5,095,000
5,095,000
8,650,000
8,250,000
9,21*0,000
8,21*0,000
21*^712,000
20,712,000
$1,202,31*6,000
$700,111,000 c/
b/ Includes $216,660,000 noncompetitive tenders accepted at the average price of 99.292
lc/ Includes $1*9,819,000 noncompetitive tenders accepted at the average price of 98.1*89
ll/ On a coupon issue of the same length and for the same amount invested, the return on
these bills would provide yields of 2.86$, for the 91-day bills, and 3.08$, 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
confounding if more than one coupon period is involved*
D-565
1 Q.-H
'%-
; //9i
7*^
«4- v > V-*
FOR IMMEDIATE RELEASE
Commissioner of Customs Philip Nichols, Jr., today announced the
appointment of Arthur Settel as Special Assistant to the Commissioner
for Public Information for the Bureau of Customs, Treasury Department.
Mr. Sette3x-fgoj£gR.oflL from 'the Department of Commerce, where he served as
Director of the Publications Staff, Bureau of Foreign Commerce, to accept
the appointment.
Mr. Settel was born in Brooklyn, New York, and educated in the New
York public school system, later graduating from the Columbia University,
Pulitzer School of Journalism. He worked for the United Press in Palestine
during the British Mandate, and in Egypt where he was managing editor of
"The Egyptian Mail," an English-language daily.
During World War II Mr. Settel served as an Intelligence Officer, and
in 1945 was appointed chief of Economic Information, Office of U.S. Military
Government in Germany. He received a promotion in 1949 to Director of
Public Information for the Office of the United States High Commissioner
(John J. McCloy) for Germany, a position he held until 1952 when the
occupation ended.
Mr. Settel has also held a number of __pMHMs positions in private
industry, as a consultant on audience-building to CBS Television, and as
director of Public Relations for KLM Royal Dutch Airlines. He is a member
of the National Press Club, the Society of Magazine Writers, Sigma Delta
Chi, ^a\WaMm^mm^^mmawm
the °verseas Press Club of America.
He has written several books, and contributed to many mass circulation
magazines in the United States and abroad. Mr. and Mrs. Settel have two
sons, Marshal, 11, and Jonathan, 15• They reside at 3313 Ross Place, N.W.
J}^ SC>£* in Washington, D.C.
August 8, 1962
FOR IMMEDIATE RELEASE:
BUREAU OF CUSTOMS APPOINTS
ARTHUR SETTEL INFORMATION CHIEF
Commissioner of Customs Philip Nichols, Jr., today announced
the appointment of Arthur Settel as Special Assistant to the
Commissioner for Public Information for the Bureau of Customs
Treasury Department. Mr. Settel came to the Bureau of Customs
from the Department of Commerce, where he served as Director
of the Publications Staff, Bureau of Foreign Commerce, to accept
the appointment.
Mr. Settel was born in Brooklyn, New York, and educated in
the New York public school system, later graduating from the
Columbia University, Pulitzer School of Journalism. He worked
for the United Press in Palestine during the British Mandate, and
in Egypt where he was managing editor of "The Egyptian Mail " an
English-language daily.
'
During World War II Mr. Settel served as an Intelligence
Officer, and irs 1945 was appointed chief of Economic Information
Office of U. S. Military Government in Germany. He received a '
promotion in 1949 to Director of Public Information for the Office
of the United States High Commissioner (John J. McCloy) for
Germany, a position he held until 1952 when the occupation ended.
Mr. Settel has also held a number of positions in private
industry, as a consultant on audience-building to CBS Television
and as Director of Public Relations for KLM Royal Dutch Airlines'
He is a member of the National Press Club, the Society of
Magazine Writers, Sigma Delta Chi, and the. Overseas Press Club
of America. He has written several books,'and contributed to
many mass circulation magazines in the United States and abroad
Mr. and Mrs. Settel have two sons, Marshal, 11, and Jonathan 15
They reside at 3313 Ross Place, N.W. in Washington D C
'
D-566
- 31 QO
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 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 subje
to estate, inheritance, gift or other excise taxes, whether Federal or State, but
are exempt from all taxation now or hereafter imposed on the principal or intere
thereof by any State, or any of the possessions of the United States, or by any
local taxing authority. For purposes of taxation the amount of discount at which
Treasury bills are originally sold by the United States is considered to be in-
terest. Under Sections 454 (b) and 1221 (5) of the Internal Revenue Code of 1954
the amount of discount at which bills issued hereunder are sold is not considere
to accrue until such bills are sold, redeemed or otherwise disposed of, and such
bills are excluded from consideration as capital assets. Accordingly, the owner
of Treasury bills (other than life insurance companies) issued hereunder need in
clude in his income tax return only the difference between the price paid for su
bills, whether on original issue or on subsequent purchase, and the amount actua
received either upon sale or redemption at maturity during the taxable year for
which the return is made, as ordinary gain or loss.
Treasury Department Circular No. 418 (current revision) and this notice, pre-
scribe the terms of the Treasury bills and govern the conditions of their tissue
Copies of the circular may be obtained from any Federal Reserve Bank or Branch.
- 2 i:w.c:#:#^,*^:v:v:*:^:c:i
decimals, e. g., 99.925. Fractions may not be used.
It is urged that tenders
be made on the printed forms and forwarded in the special envelopes 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.
Immediately after the closing hour, tenders will be opened at the Federal
Reserve Banks and Branches, following which public announcement will be made by
the Treasury Department of the amount and price range of accepted bids. Those
submitting tenders will be advised of the acceptance or rejection thereof. The
Secretary of the Treasury expressly reserves the right to accept or reject any
or all tenders, in whole or in part, and his action in any such respect shall be
final. Subject to these reservations, noncompetitive tenders for $ 200,000 or
less for the additional bills dated
ing until maturity date on
$100,000 or less for the
May 17, 1962
November 15, 1962
182
, ( 91
days remain-
) and noncompetitive tenders for
*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
Banks on
August 16, 1962
, in cash or other immediately available funds or
fm
in a like face amount of Treasury bills maturing
August 16, 1962
pi?
• Cash
1 Q^
X
v-> •-'
TREASURY DEPARTMENT
Washington
FOR IMMEDIATE RELEASE, August 8, 1962
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 $ 2,000,000,000 , or thereabout
cash and in exchange for Treasury bills maturing
August 16, 1962
, in the amount
W
of $ 1,800.826,000 , as follows:
91 -day bills (to maturity date) to be issued
August 16, 1962
,
w m
in the amount of $ 1,500,000,000 , or thereabouts, represent-
m
and to mature
November 15, 1962
, originally issued in the
ing an additional
amount of
bills
dated Mayand
17,original
1962
,
amount
of $600,140,000
, the
additional
bills
to be freely interchangeable.
182 -day bills, for $ 700,000,000 , or thereabouts, to be dated
*5_^f $__£
August 16, 1962 , and to mature February 14, 1965
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
amount will be payable without interest. They will be issued in bearer form
and in denominations of $1,000, $5,000, $10,000, $50,000, $100,000, $500,000
$1,000,000 (maturity value).
Tenders will be received at Federal Reserve Banks and Branches up to the
Daylight Saving
closing hour, one-thirty p.m., Eastera/_W_833Q[time, Monday, August 15, 1962
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 tende
price offered must be expressed on the basis of 100, with not more than thre
TREASURY DEPARTMENT
-• o
WASHINGTON. D.C.
FOR IMMEDIATE RELEASE
August 8, 1962
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
$ 2,000,000,000 or thereabouts, for cash and in exchange for
Treasury bills maturing August 16, 1962, in the amount of
$ 1,800,826,000, as follows:
91-day bills (to maturity date) to be issued August 16, 1962
In the amount of $ 1,300,000,000 or thereabouts, representing an
additional amount of bills dated May 17, 1962,
and to
mature November 15, 1962,prig_nal_y issued in the amount of
$600,140,000, the additional and original bills to be freely
interchangeable.
182-day bills, for $ 700,000,000, or thereabouts, to be dated
August 16, 1962, and to mature February 14, 1963.
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, $50,000, $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 p.m., Eastern Daylight Savin*
time, Monday, August 13, 1962.
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-567
accompanied by an express guaranty of payment by an incorporated bank
or trust company.
- 2 -
Immediately after the closing hour, tenders will be opened at
the Federal Reserve Banks and Branches, following which public
announcement will be made by the Treasury Departmment of the amount
and price range of accepted bids. Those submitting tenders will be
advised of the acceptance or rejection thereof. The Secretary of
the Treasury expressly reserves the right to accept or reject any or
all tenders, in whole or in part, and his action in any such respect
shall be final. Subject to these reservations, noncompetitive
tenders for $200,000 or less for the additional bills dated
May 17, 1962,
( 91 days remaining until maturity date on
November 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 Banks on August 16, 1962
in cash or other immediately available funds or in a like face
amount of Treasury bills maturing August 16, 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 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
oOo the taxable year for which the
sale or redemption at maturity during
return is made, as ordinary gain or loss.
Treasury Department Circular No. 4l8 (current revision) and this
notice
prescribe
theBank
terms
the Treasury
bills and
govern
the
conditions
any
Federal
of
Reserve
their
issue.
orof
Branch.
Copies
of the circular
may
be obtained
fro:
1 PK
-a. V-/ sj
TREASURY DEPARTMENT
Washington
IMMEDIATE RELEASE
Thursday, August 9, 1962 D-568
The Bureau of Customs announced today the following preliminary
figures showing the imports for consumption from January 1, 1962,
to July 28, 1962, inclusive, of commodities for which quotas were
established pursuant to the Philippine Trade Agreement Revision
Act of 1955:
Commodity
:
:
Established Annual
Quota Quantity
Unit
of
Quantity
:
:
:
Imports
as of
July 28, 19
Buttons 680, 000
Gross
139,956
Cigars 160,000,000
Number
Coconut oil.... 358,400,000
Pound
95,686,995
Cordage 6,000,000
Pound
2,554,962
Tobacco 5,200,000
Pound
4,475,376
6,375,698
1 o r>
«_ O .^
TREASURY DEPARTMENT
Washington
IMMEDIATE RELEASE
D-568
Thursday, August 9, 1962
The Bureau of Customs announced today the following preliminary
figures showing the imports for consumption from January 1, 1962,
to July 28, 1962, inclusive, of commodities for which quotas were
established pursuant to the Philippine Trade Agreement Revision
Act of 1955:
Commodity
Buttons. •
Established Annual
Quota Quantity
680,000
Unit
of
Quantity
Gross
Imports
as of
July 28, 1962
139,956
Cigars
160,000,000
Number
6,375,698
Coconut oil....
358,400,000
Pound
95,686,995
Cordage.•••••••
6,000,000
Pound
2,554,962
Tobacco.•••••••
5,200,000
Pound
4,475,376
fBElSOKF QSMBS-SB?
Inshlngtin, 0* ftp
£_<-OX_fS BS-USS
Thursday, August 9, 1962
D-569
f_G__(IN__r DATA ON IMPORTS FOR CONSu-PTXOH 07 uTRttOTPACTITOJ) LEAD AND ZDiC CEARGSABLB TO TEE QUOTAS _SV_BL___9
BY rassaairuL JBOCUMATIOM NO. 3257 J» s_pra__a 22, 195a
_MBRBLT ODD?- F-BXQD •
OO
Jul
>' > ~ September 30, 1962
BffCBtS • July I - August 3, 1962 (or ae noted)
ITSM 394
ITg- 393
ITEM 392
t Lead bullion or boas bullion* s
t load In pigs and bars, lead'
t
{ Zino-baaring ores of all kinds,: Zlno la blocks, pigs, or slabs;
Lsad«bearing ores, flue dust,i dross, raolaiLaad load, sa:*ap
t except pyrites oontainl_£ not : old Mid worn-out zlno, fit
•ad sattes
: lead, antLaonlal lead, anti*
orer 3 # of zino
t only to bo reaanufactured, zino
t aonial sprap lead, type natal* «
t
dross, and zino ski:—tings
t all alloys or combination* of *
i
t
,
*
lead
n.a.p.f.
tC__rterl7 _iota
:C__rtarly —iota
:Q__*tarly Quota
:_iartarly _iota
Iiroorte
iBports : By yeljfct
Imports : Datiabla Laad
Ieporta- 1 Dutiable Zins
t Dutiable Lead
(Pounds )"
(Pounds?
(Pounds}
7 * '
(Pounds)"
n _ H 391
Country
of
Produotloa
Australia
10,080,000 6,025,035*
23,680,000
11,457,612
Belgian Congo
5,440,000
2,314,872*
Belglua and
Luxe-burg (total)
7,520,000
7,520,000
37,840,000
17,127,172
3,600,000
.
23,270,498
6,320,000
804,195
8,521,471
3,7«»ooo
841,201
17,840,000
6,080,000
6,080,000
Bolivia
5,040,000
Gaaada
13,440,000
1,087,181*
13*440,000
15,920,000
9,062,915*
66,480,000
66,480,000
Italy
Merioo
Para
16,160,000
1,504,509
On. So. Afrlea
14,880,000
14,880,000
Yugoslavia
All other fmpalga
09U3trles (total)
6,5^0,000
6,560,000
36,880,000
10,15^,7^8
70,480,000
12,880,000
3,101,822
35,120,000
15,7*>#«»
5,307,418*
6,080,000
17,840,000
*lmporta through August 7, 1962
The above country designations are those specified in Presidential Proclamation No. ^257 of September 22, 1958.
countries have been changed.--
Since that date the naaes of certain
9. 6.
Z-teoZaT- ______
Thursday, August 9, 1962
D-569
I_B__IHABY SAX- ON IMPOSTS TC_ COHSuliPTZO- OF -_O_0FA£T0HC9 LEAD AND ZZKCflfflfflffiEiHL-TO fSS QUOTAS AST_BL____>
BY a-_SDSfria_ J_OCLA_ATIO_ NO. 5257 OF __ a TO___ 22, 1958
amaamvr mmm nam • Juiy i - September 30, 1962
mUHUSa • July I - August 3, 1962 (or as nottcS)
Count ?y
of
Prodilotion
ITZB 391 ITEM 392 ITEtf 393 IT-- 394
t Lead bullion or base bullion * " "
t
t lead la pigs and bars, lea£
t
»
Leadoboarlng ores, fins dust,1 dross, reolaiasd lead, scrap
« Zino-baaring ores of all kinds,g Ziao la bloeks, pigs, or slabs;
and sattes
s lead, ant_sonlal lead, antl»
1 except pyrites oont—iniog not s old sad «era«out zino, fit
t aonial sprap lead, typeffiatal,<
**er 3 ^ of t_so
S only to be reaBaaufaetured, zina
s all alloys or eoabinatloas of s
*
dross, and sine ski—sings
- Oucta ,
t
lead n.s.p.f.
1
s{Quarterly _iota
_larterly
xC__rtarly
C_ota
:Q_urterly
Qiota
Zsoorts
t Outiabla Lead
Icports : By Teljfct
Imports z Dutiable Lead
Itporta
1 Dutiable Zins
-j,'"i •• .•
(Pounds)"
(Pounds)
(Pounds)
(Pounds)
Australia
10,080,000 6,025,033* 23,680,000 11,457,612
Belgian Congo
5p440,000
2,314,872*
BelgLua and
Luxe-burg (total)
7,520,000
7,520,000
37,»4O,00O
I?,«2?,I72
3,600,000
.
6,320,000
804,195
3,7«o,ooo
841,201
6,080,000
6,060,000
Bolivia
5,040,000
Canada
13,440,000
1,087,181*
13,440,000
15,920,000
9,062,915*
«,480,000
^
^
000
Italy
Mezioo
Pol-
16,160,000
1,504,509
ite. So* afrioa
14,880,000
14,880,000
Tugoslovia
All other forolga
ooustrioo (total)
6,560,000
6,560,000
36,880,000
to,154,748
70,480,000
12,880,000
3,101,822
35,120,000
15,7^000
5,307,418*
6,080,000
17,840,000
23,270,498
8t52l,lf7l
17,840,000
•Imports through August 7, 1962
The above country d«.iSn8tiona .re those specified in Presidential Proclamation No."#>57 of Septa.ber 22, 1953. Since that date the na.es of certain
countries have been changed. -
p_z?isza n y_z BO__UT
OF CQSYOUS
-£•
P Q
COTTON WASTES
(In pounds)
COTTON CARD STRIPS made r from cotton having-a staple of less than 1-3/16 inches in length, COMBER
WASTE, LAP WASTE, SLIVER WASTE, AND ROVING 7/ASTS, WHETHER OR NOT MANUFACTURED OR OTHERWISE
ADVANCED IN VALUE: Provided, however, that not more than 33-1/3 percent of the quotas shall
be filled by cotton wastes other than comber wastes made from cottons of 1-3/16 inches or more
in staple length in the- case- of the- following countries: United Kingdom, France, Netherlands,
Switzerland, Belgium, Germany, and Italy:
Country of Origin
Established
TOTAL QUOTA
:
Total Imports
: Established ;
Imports
TJ
: Sept. 20, 1961, to : 33-1/32 of : Sept. 20, 19&1,
: August 6, 1962
; Total Quota : to August 6, 1962
1,441,152
United Kingdom
4,323,457
Canada
. • .
239,690
France
227,420
British India
69,627
Netherlands
.
68,240
Switzerland . . . . . . .
44,388
Belgium
38,559
Japan . . . . . . . . . .
341,535
China .
17,322
Egypt
.
8,135
Cuba . . . . . . . . . .
6,544
Germany
76,329
Italy . . . . . . . . . .
21.263
,821,007
239,690
179,155
69,627
67,447
42,019
22,062
341,500
1,441,152
76,329
25,443
7.088
25,443
5,482,509
2,858,836
1,599,886
1,577,654
y
-
-
75,807
75,807
-
-
22,747
14,796
12,853
22,747
12,505
-_.
-
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.
TREASURY DEPARTMENT
Washington, D. C.
IiMMEDIATE RELEASE
Thursday, August 9. 1962
D-S70
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/k"
Imports September 20, 1961, to August 6, 1962
Country of Origin
Egypt and the AngloEgyptian Sudan ....
Peru
British India
China
Mexico
Brazil
Union of Soviet
Socialist Republics
Argentina
,
Haiti
Ecuador
Established Quota
783,816
247,952
2,003,483
1,370,791
8,883,259
618,723
475,124
5,203
237
9,333
Imports
779,456
245,483
2,003,483
_
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
3/0ther French Africa ...
Algeria and Tunisia ...
Imnorts
752
- 871
124
195
2,24b
71,388
21,321
5,377
16,004
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
Established "Yearly Qudta - 45.656,420 lbs.
Staple Length
Allocation
Imports---fear ended July 31. 1962
1-3/8" or more
39,590,728
39,590,778
1-5/32" or more and under
1,500,000 734,155
1-3/8" (Tanguis)
1-1/8" or more and under
4,565,642 4,565,642
1-3/8"
Imports Aug. 1. 1962 to Aug. 6. 19
39,590,778
122,857
4,565,642
TREASURY DEPARTMENT
Washington, D. C.
-\ Q i
-_-*•_
IMMEDIATE RELEASE
Thursday. August 9» 1962
D-S70
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 August 6, 1962
Country of Origin
Established Quota
Egypt and the AngloEgyptian Sudan
Peru
3ritish India
China
Mexico
Brazil
Union of Soviet
Socialist Republics ••
Argentina
Haiti
Ecuador
Honduras
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
Imnorts
752
779,456
245,483
2,003,483
8,883,259
618,723
114,908
-
Paraguay
Colombia
Iraq
British East Africa ...
Netherlands E. Indies .
Barbados
l/Other British W. Indies
Nigeria
2/0ther British W. Africa
3/0ther French Africa ...
Algeria arid Tunisia ...
- 871
124
195
2,24b
71,388
21,321
5,377
16,004
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
Established~Yearly Qubta - 45.656.420 lbs.
Staple Length
Allocation Imports gear ended July 31. 1962
39,590,778
1-3/8" or more
39,590,728
1-5/32" or more and under
1-3/8" (Tanguis)
1,500,000734,155
1-1/8" or more and under
1-3/8"
4,565,6424,565,642
Imports Aug. 1. 1962 to Aug. 6. 196
39,590,778
122,857
4,565,642
«3COTTON WASTES
(In pounds)
COTTON fcARD STRIPS made-from cotton having a staple of less than 1-3/16 inches in l«ngth> COMBER
WASTE, LAP WASTE, SLIVER WASTE, AND ROVING WASTE, WHETHER OR NOT MANUFACTURED OR OTHERWISE
ADVANCED IN VALUE: Provided, however, that not more than 33-1/3 percent of the quotas shall
be filled by cotton wastes other than comber wastes made from cottons of 1-3/16 Xnchea 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
Total Imports
! Established :
Imports
J/
:
Sept.
20,
1961,
to
:
33-1/3%
of
:
Sept.
20,
1961,
:
August 6, 1962
: Total Quota t to August 6, 1962
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
'• •
Cuba
Germany • • • • • • • • •
Italy . . . . . . . . . .
y
1,821,007
239,690
179,155
69,627
67,447
42,019
22,062
341,500
.1,441,152
1,441,152
75,807
75,807
22,747
14,796
12,853
22,747
12,505
76,329
25,443
7.088
25,443
2,858,836
1,599,886
1,577,654
f'J**
6,544
76,329
^i26?
5,482,509
Included in total inpo'rte, column 2..
prepared in the Bureau of Customs.
The country designations listed in thi s 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.
1 QO
-2: Unit
Commodity
Imports
: of
as of
: Quantity: July 28. 1962
Period and Quantity
Absolute Quotas:
Butter substitutes, including
butter oil, containing 45%
or more butter fat
Calendar
Year 1962
Cotton products, except cotton
wastes, produced in any stage
preceding the spinning into
yarn
Peanuts, shelled, unshelled,
blanched, salted, prepared or
preserved (incl. roasted peanuts but not peanut butter)
1/ Imports through July 31, 1962.
1,200,000
Pound
Quota Filled
12 mos. from
Sept. 11, 1961
1,000
Pound
Quota Filled
12 mos. from
August 1, 1961
1,709,000
Pound
1,170,079
1
TREASURY DEPARTMENT
Washington
_. \J W
IMMEDIATE RELEASE
D-571
Thursday, August 9, 1962
The Bureau of Customs announced today preliminary figures showing the imports
for consumption of the commodities listed below within quota limitations from the
beginning of the quota periods to July 28, 1962, inclusive, as follows:
Commodity
Period and Quantity
: Unit
i
Imports
: of
as of
:Quantity: July 28, 1962
Tariff-Rate Quotas:
Cream, fresh or sour
Calendar Year
1,500,000 Gallon
17
Whole Milk, fresh or sour,
Calendar Year
3 ,000,000 Gallon
122
Cattle, 700 lbs. or more each
(other than dairy cows)
,
July 1, 1962Sept. 30, 1962
120,000
Head
2,493
Cattle less than 200 lbs. each..
12 mos. from
April 1, 1962
200,000
Head
40,663
Fish, fresh or frozen, filleted,
etc., cod, haddock, hake, pollock, cusk, and rosefish
Calendar Year
28,571,433
Tuna Fish.
Calendar Year 59,059,014 Pound 32,594,317
White or Irish potatoes:
Certified seed
Other
12 mos. from
Sept. 15, 1961
Walnuts
Stainless steel table flatware
(table knives, table forks,
table spoons)
Pound
Quota Filled
114,000,000
36,000,000
Pound
Pound
52,233,560
Quota Filled
Calendar Year
5,000,000
Pound
2,189,857
Nov. 1, 1961Oct. 31, 1962
69,000,000
Pieces
67,948,801
1/ Imports for consumption at the quota rate are limited to 21,428,574 pounds during
the first nine months of the calendar year.
1 QA
TREASURY DEPARTMENT
Washington
IMMEDIATE RELEASE
D-571
Thursday, August 9, 1962
The Bureau of Customs announced today preliminary figures showing the imports
for consumption of the commodities listed below within quota limitations from the
beginning of the quota periods to July 28, 1962, inclusive, as follows:
Commodity
Period and Quantity
-UnlT
of
Quantity
Imports
as of
July 28, 1962
Tariff-Rate Quotas:
Cream, fresh or sour Calendar Year 1,500,000 Gallon 17
Whole Milk, fresh or sour Calendar Year 3,000,000 Gallon 122
Cattle, 700 lbs. or more each July 1, 1962(other than dairy cows)
Sept. 30, 1962
12 mos. from
Cattle less than 200 lbs. each... April 1, 1962
Fish, fresh or frozen, filleted,
etc., cod, haddock, hake, pollock, cusk, and rosefish.
Calendar Year
120,000
Head
2,493
200,000
Head
40,663
1/
28,571,433
Pound
Quota Filled
Pound
Pound
52,233,560
Quota Filled
Tuna Fish Calendar Year 59,059,014 Pound 32,594,317
White or Irish potatoes:
Certified seed
Other
12 mos. from
Sept. 15, 1961
114,000,000
36,000,000
Walnuts Calendar Year 5,000,000 Pound 2,189,857
Stainless steel table flatware
(table knives, table forks,
table spoons)
Nov. 1, 1961Oct. 31, 1962
69,000,000
Pieces
67,948,801
1/ Imports for consumption at the quota rate are limited to 21,428,574 pounds during
the first nine months of the calendar year.
-2-
Commodity
:
Period and Quantity
: Unit
:
* Imports
: of
:
as of
.'Quantity: July 28. 1962
Absolute Quotas:
Butter substitutes, including
butter oil, containing 45%
or more butter fat
Calendar
Year 1962
Cotton products, except cotton
wastes, produced in any stage
preceding the spinning into
yam
Peanuts, shelled, unshelied,
blanched, salted, prepared or
preserved (incl. roasted peanuts but not peanut butter)..
1/ Imports through July 31, 1962.
1,200,000
Pound
Quota Filled
12 mos. from
Sept. 11, 1961
1,000
Pound
Quota Filled
12 mos. from
August 1, 1961
1,709,000
Pound
1,170,079
TREASURY DEPARTMENT
Washington, D. C.
1
QK
JL V> >_,"
IMMEDIATE RELEASE
Thursday, August 9, 1962
D-572
The Bureau of Customs announced today preliminary figures showing the
quantities of wheat and wheat flour authorised to be entered, or withdrawn
from warehouse, for consumption under the import quotas established in the
President's proclamation of May 28, 19^1, as modified by the President's
proclamation of April 13, 1942, for the 12 months commencing May 29, 1962,
as follows:
Wheat flour, semolina,
crushed or cracked
wheat, and similar
wheat products
Wheat
Country
of
Origin
Established : Imports
: Established :
Imports
Quota
:May 29, 1962, :
Quota
:May 29, 1962,
:to August 6, 1962
;to August 6, 19
(Bushels)
(Bushels)
(Pounds)
(Pounds)
Canada
795,000
China
Hungary
Hong Kong
Japan
United Kingdom
100
Australia
Germany
100
Syria
100
New Zealand
_
Chile
Netherlands
100
Argentina
2,000
Italy
100
Cuba
France
1,000
Greece
Mexico
100
Panama
Uruguay
Poland and Danzig
Sweden
Yugoslavia
Norway
Canary Islands
Rumania
1,000
Guatemala
100
Brazil
100
Union of Soviet
Socialist Republics
100
Belgium
100
795,000
800,000
795,000
3,815,000
24,000
13,000
13,000
8,000
75,000
1,000
5,000
5,000
1,000
1,000
1,000
14,000
2,000
12,000
1,000
1,000
1,000
1,000
1,000
1,000
1,000
1,000
1,000
1,000
r\r\r\ s\/~\r\
3,815,000
84
,084
1 Q
TREASURY DEPARTMENT
Washington, D. C.
IMMEDIATE RELEASE
Thursday, August 9, 1962
D-572
The Bureau of Customs announced today preliminary figures showing the
quantities of wheat and wheat flour authorized to be entered, or withdrawn
from warehouse, for consumption under the import quotas established in the
President's proclamation of May 28, 194l, as modified by the President/s
proclamation of April 13, 19^2, for the 12 months commencing May 29, IS**2,
as follows:
Country
of
Origin
Wheat flour, semolina,
crushed or cracked
wheat, and similar
wheat products
Imports
Established :
Established :. Imports
:May 29, 1962,
Quota
:May 29, 1962,
Quota
:to August 6, 1962
:to August 6, 1962
(Bushels)
(Pounds)
(Bushels)
(Pounds)
Canada
795,000
China
Hungary
Hong Kong
Japan
United Kingdom
100
Australia
Germany
100
Syria
100
New Zealand
Chile
Netherlands
100
Argentina
2,000
Italy
100
Cuba
France
1,000
Greece
Mexico
100
Panama
Uruguay
Poland and Danzig
Sweden
Yugoslavia
Norway
Canary Islands
Rumania
1,000
Guatemala
100
100
Brazil
Union of Soviet
Socialist Republics
100
Belgium
100
800,000
795,000
795,000
3,815,000
24,000
13,000
13,000
8,000
75,000
1,000
5,000
5,000
1,000
1,000
1,000
14,000
2,000
12,000
1,000
1,000
1,000
1,000
1,000
1,000
1,000
1,000
1,000
1,000
3,815,000
4,000,000
3,815,084
84
/
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TREASURY DEP
W A S H I N G T O N . D.C.
August 13, 1962
FOR RELEASE A. M. NEWSPAPERS,
Tuesday, August 14, 1962.
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 May 17, 1962, and
the other series to be dated August 16, 1Q62J, which were offered on August 8, were opened
at the Federal Reserve Banks on August 13. ganders were invited for $1,300,000,000, or
thereabouts, of 91-day bills and for $700,000,000, or thereabouts, of 182-day bills. The
details of the two series are as follows:
182-day Treasury bills
91-day Treasury biljLw
RANGE OF ACCEPTED
maturing February 14, 1963
maturing November 15, 3-962
COMPETITIVE BIDS:
Approx* Equiv*
Approx. Equiv.
Annual Rate
Price
Annual Rate
Price
High
2.836$'
99.283 a/
3.024$
98.471 b/
Low
2.8841
99.271
3.062$
98.452 -*
Average
2.867$ 1/
99.275
3.060$
98.453
a/ Excepting one tender of $400,000; b/ Excepting four tenders totaling $1,005,000
51 percent of the amount of 91-day bills bid for at the low price was accepted
54 percent of the amount of 182-day billet 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
$
26,209,000
1,512,130,000
34,409,000
28,887,000
16,403,000
32,313,000
221,206,000
30,117,000
21,485,000
39,546,000
28,655,000
86,652,000
$2,078,012,000
Accepted
Applied For
16,209,000
$
8,446,000
850,930,000
1,454,258,000
19,359,000
10,897,000
28,887,000
29,046,000
16,403,000
1,608,000
28,813,000
8,874,000
164,266,000
128,959,000
27,117,000
8,500,000
19,485,000
6,555,000
39,056,000
18,131,000
21,165,000
10,609,000
68,672,000
80,448,000
$1,300,362,000 c/ $1,766,331,000
Accepted
$ 2,446,000
583,676,000
5,897,000
7,136,000
1^578,000
5,474,000
48,349,000
6,500,000
4,179,000
17,839,000
5,605,000
15,5955000
$704,274,000 d/
jjC/ Includes $245,193,000 noncompetitive tenders accepted at the average price of
jd/ Includes $6l,608,000 noncompetitive tenders accepted at the average price of 98.453
jl/ On a coupon issue of the same length and for the same amount invested, the return on
these bills would provide yields of 2.93$, for the 91-day bills, and 3.15$, 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 %s involved.
1
TREASURY DEPARTMENT
WASHINGTON, D.C.
FOR IMMEDIATE RELEASE
August 14, 1962
TREASURY CALLS LAST PARTIALLY TAX-EXEMPT BOND
The Treasury Department today announced the official, notice of call for
redemption on December 15, 1962, of the partially tax-exempt 2-3/4 percent
Treasury Bonds of 1960-65, dated December 15, 1938, due December 15, 1965. There
are now outstanding $1,485,383,100 of these bonds.
The 2-1/2 percent bonds of 1962-67, which are also callable on December 15,
1962, will not be called for redemption on that date.
The text of the formal notice of call is as follows:
TWO AND THREE-QUARTERS PERCENT TREASURY BONDS OF 1960-65
(DATED DECEMBER 15, 1938)
NOTICE OF CALL FOR REDEMPTION
To Holders of 2-3/4 percent Treasury Bonds of 1960-65, and Others Concerned;
1. Public notice is hereby given that all outstanding 2-3/4 percent
Treasury Bonds of 1960-65, dated December 15, 1938, due December 15, 1965, are
hereby called for redemption on December 15, 1962, on which date interest on
such bonds will cease.
2. Holders of these bonds may, in advance of the redemption date, be
offered the privilege of exchanging all or any part of their called bonds for
other interest-bearing obligations of the United States, in which event public
notice will hereafter be given and an official circular governing the exchange
offering will be issued.
3. Full information regarding the presentation and surrender of the bonds
for cash redemption under this call will be found in Department Circular No. 300,
Revised, dated April 30, 1955.
Douglas Dillon,
Secretary of the Treasury.
TREASURY DEPARTMENT,
Washington, August 13, 1962.
D-5714
mm
to tfc*
mmmkm °? #§*$^ Dillon, or
-wi mt S^X/mm ^fs^mmmwf Oar
mt mrtma c*1063, due A^-ust 15,
, $i,SO0 *iiMim$ or
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WIS*P9 W w , IIWIIP
WmkXmmm^bkm
CUmXamd
ase,7ea,o(;D
444,SS1,<>00
1,§00,105,000
428,6^,v7)0
•t. Umt*
A©a. 336*000
4£§,600,000
City
220,062,500
S4S,76&^()00 60,^75,000
10#8Mfc»0QO
isa.oas.ooo
74#soa,ooo
•9,811,000
1,S2S,S4S,000 S_S,§15,300
164,21C,a)0
?4#?^§tO0O
175,130,5^
^,364,000
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111,296,000
4,317,000
%m99oo
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f#H&# #i©,_i&*#i§#ClOQ ^,&:;i>335,000 $£,8^,070,500 |�af«i0#0e0 #36S
as follow:
•tfmJa_8
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5,004,^0,600
H I OHfttl*
„ »A«Bi8g
JM-Jl
ft*t<
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$315,021,500
TREASURY DEPARTMENT
WASHINGTON, D.C.
FOR IMMEDIATE RELEASE
August 14, 1962
SUBSCRIPTION AND ALLOTMENT FIGURES FOR TREASURY'S CURRENT CASH OFFERING
The Treasury Department today announced the subscription and allotment figures with
I respect to the current offering of $6,500 million, or thereabouts, of 3-l/2# Treasury Certificates of Indebtedness of Series C-1963, due August 15, 1963, $1,500 million, or thereabouts, of 4$ Treasury Bonds of 1969, due February 15, 1969, and up to $750 million of
14-1/4^ Treasury Bonds of 1987-92, due August 15, 1992, callable at the option of the United
States on any interest date on and after August 15, 1987.
I Subscriptions and allotments were divided among the several Federal Reserve Districts
and the Treasury as follows:
CERTIFICATES OF INDEBTEDNESS
TREASURY BONDS
SERIES C-1963
of 1969
Total Subscrip- Total
ederal Reserve Total Subscrip- Total
tions Received Allotments
tions Received Allotments
IDistrict
$
576,724,000 $ 117,476,000 $ 417,381,500
102,669,000
ston
11,826,397,000 5,137,611,000
1,835,290,500
£New York
423,906,000
^Philadelphia
349,765,000
60,275,000
226,682,500
61,204,500
856,768,000
158,093,000
494,731,500
aCleveland
125,128,000
444,551,000
111,410,000
272,165,000
^Richmond
74,508,000
jAtlanta
564,254,000
111,295,000
304,168,000
87,516,000
337,977,000
1,223,243,000
1,980,103,000
325,215,500
igChicago
217,464,000
428,688,000
164,210,000
74,709,000
|St. Louis
40,859,000
175,130,500
229,166,000
irttinneapolis
62,864,000
142,515,000
208,033,000
488,938,000
81,800,500
iJKansas City
235,601,500
67,302,000
425,600,000
66,826,500
Spallas
398,653,000
1,133,049,000
1,957,407,000
256,808,500
ijSan Francisco
130,500
4,317,000
26,334,000
130,500
^Treasury
100,000,000
100,000,000
i£ Govt • Inv. Acct s,
Totals $20,154,695,000 $6,851,993,000 $6,843,070,500 $1,843,286,000
f
Subscriptions by investor classes for the bonds were as follows:
4# Bonds of 1969 4-l/4$ Bonds of 1987-92
K75
Savings-type
Commercial Banks
All Others
$ 914,337,000
5,064,360,500
764,573,000
$141,116,000
114,603,000
59,302,500
Total
$6,743,070,500
$315,021,500
Govt.Inv.Accts.
100,000,000
50,000,000
Grand Total
$6,843,070,500
$365,021,500
TREASURY
BONDS
of 1987-92
Subs. Received
and Allotted
$ 20,473,000
160,842,500
4,238,000
4,589,000
17,045,000
14,725,500
42,617,000
5,597,500
7,274,000
7,192,000
7,287,000
22,581,000
560,000
50,000,000
$365,021,500
AUG 81962
20?
m mm x tmmh nmmm aairw
Vm CklhwMl **Mw_*i»» vs. ml* ia dlno* «t_ gm*m*m& swarlU.*
CORRECTED COPY
8/21/62
TREASURY DEPARTMENT
WASHINGTON. D.C.
OO Q
August 15, 1962
FOR IMMEDIATE RELEASE
TREASURY MARKET TRANSACTIONS IN JULY
During July 1962, market transactions in
direct and guaranteed securities of the government
for Treasury investment and other accounts resulted
PURCHASES
in net/tales) by the Treasury Department of
$61,901,000.
oOo
D-576
£
^
- 37 o t.
TgfflX u. ¥ m p m
~w *
and exchange tenders will receive equal treatment. Cash adjustments will
for differences between the par value of maturing bills accepted in excha
the issue price of the new bills.
The income derived from Treasury bills, whether interest or gain from the
or other disposition of the bills, does not have any exemption, as such, a
from the sale or other disposition of Treasury bills does not have any sp
treatment, as such, under the Internal Revenue Code of 1954. The bills ar
to estate, inheritance, gift or other excise taxes, whether Federal or Sta
are exempt from all taxation now or hereafter imposed on the principal or
thereof by any State, or any of the possessions of the United States, or b
local taxing authority. For purposes of taxation the amount of discount a
Treasury bills are originally sold by the United States is considered to
terest. Under Sections 454 (b) and 1221 (5) of the Internal Revenue Code
the amount of discount at which bills issued hereunder are sold is not co
to accrue until such bills are sold, redeemed or otherwise disposed of, a
bills are excluded from consideration as capital assets. Accordingly, the
of Treasury bills (other than life insurance companies) issued hereunder
clude in his income tax return only the difference between the price paid
bills, whether on original issue or on subsequent purchase, and the amoun
received either upon sale or redemption at maturity during the taxable ye
which the return is made, as ordinary gain or loss.
Treasury Department Circular No. 418 (current revision) and this notice, p
scribe the terms of the Treasury bills and govern the conditions of their
Copies of the circular may be obtained from any Federal Reserve Bank or B
_ 2 :,,•:>» O ; C : > ; « M >>:t.»:i;»,o;
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
he 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.
Immediately after the closing hour, tenders will be opened at the Federal
Reserve Banks and Branches, following which public announcement will be made by
the Treasury Department of the amount and price range of accepted bids. Those
submitting tenders will be advised of the acceptance or rejection thereof. The
Secretary of the Treasury expressly reserves the right to accept or reject any
or all tenders, in whole or in part, and his action in any such respect shall be
final. Subject to these reservations, noncompetitive tenders for $200,000
less for the additional bills dated
May 2U, 1962
T_xf
ing until maturity date on
November 23, 1962
^
$ 100»000 or less for the
, ( 92
or
days remain-
ip__F
) and noncompetitive tenders for
t
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
Banks on
August 23, 1962
, in eash or other immediately available funds or
in a like face amount of Treasury bills maturing
August 23, 1962
xpEEJE
Cash
_2______X__2A.
on*;
TREASURY DEPARTMENT
Washington
FOR IMMEDIATE RELEASE, August 15, 1962
*- ^ ~
__-_-a_-Cxmni|g^
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 $2,000,000,000 , or thereabouts, fo
cash and in exchange for Treasury bills maturing August 23, 1962 , in the amount
tsk
of
$1.901.3-9.000 , as follows:
9 2 - d a y bills (to maturity date) to be issued
August 23, 1962
W
,
Pi
in the amount of $1,500,000,000 , or thereabouts, representing an additional amount of bills dated May 2U, 196and to mature November 23, 1962
, originally issued in the
W
amount of $ 600,3l6a000
, the additional and original bills
to be freely interchangeable.
182 -day bills, for $ 700,000,000 , or thereabouts, to be dated
August 23, 1962 , and to mature February 21, 1963 .
p_qt
•£!£}-
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, $50,000, $100,000, $500,000 and
$1,000,000 (maturity value).
Tenders will be received at Federal Reserve Banks and Branches up to the
Daylight Saving
closing hour, one-thirty p.m., Eastern/atan_«aSL time, Monday, August 20 a 1962
Tenders will not be received at the Treasury Department, Washington. Each tender
must be for an even multiple of $1,000, and in the case of competitive tenders t
price offered must be expressed on the basis of 100, with not more than three
-J"7?
r*. O
TREASURY DEPARTMENT
- u i u ' - y i ! ju.t i " j i n j n t w
WASHINGTON. D.C.
August 15, 1962
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
$ 2,000,000,000,or thereabouts, for cash and in exchange for
Treasury bills maturing
August 23, 1962, in the amount of
$ 1,901,349,000, as follows:
92-day bills (to maturity date) to be issued August 23, 1962,
in the amount of $1,300,000,000, or thereabouts, representing an
additional amount of bills dated May 24, 1962,
and to
mature November 23, 1962,originally issued in the amount of
$ 600,316,000, the additional and original bills to be freely
interchangeable.
182-day bills, for $700,000,000, or thereabouts, to be dated
August 23, 1962, and to mature February 21, 1963.
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, $50,000, $100,000, $500,000 and $1,000,.Q00
(maturity value).
Tenders will be received at Federal Reserve Banks and Branches
up to the closing hour, one-thirty p.m., Eastern Daylight Saving
time, Monday, August 20, 1962.
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-577
accompanied
by an express guaranty of payment by an incorporated bank
or
trust company.
- 2 Immediately after the closing hour, tenders will be opened at
the Federal Reserve Banks and Branches, following which public
announcement will be made by the Treasury Departmment of the amount
and price range of accepted bids. Those submitting tenders will be
advised of the acceptance or rejection thereof. The Secretary of
the Treasury expressly reserves the right to accept or reject any or
all tenders, in whole or in part, and his action in any such respect
shall be final. Subject to these reservations, noncompetitive
tenders for $200,000 or less for the additional bills dated
May 24, 1962,
(92-days remaining until maturity date on
November 23, 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 Banks on August 23, 1962,
in cash or other immediately available funds or in a like face
amount of Treasury bills maturing August 23, 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 195*4-. The bills are subject to
estate, inheritance, gift or other excise taxes, whether Federal or
State, but are exempt from all taxation now or hereafter imposed on
the 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
oOo the taxable year for which the
sale or redemption at maturity during
return is made, as ordinary gain or loss.
Treasury Department Circular No. 4l8 (current, revision) and this
notice prescribe the terms of the Treasury bills and govern the
conditions
any Federalof
Reserve
their Bank
issue.
or Branch.
Copies of the circular may be obtained fronj
wisely considered and implemented — do the job alone. They are no
substitute for responsible wage bargaining and pricing practices,
for measures to maintain active competition among producers, for
better educational and research facilities, or for all the other
ingredients of dynamic growth with stable prices. But, it is equally
true that without well considered tax reform, monetary.and debt
management policies flexibly attuned to the facts of our internal
and external position, and intense efforts to restore balance of
payments equilibrium, the prospects for substantial progress toward
a better life for all our citizens in the years ahead would be
seriously impaired.
0O0
209
- 20 been ratified by 7 countries and will become effective as soon as
the United States itself completes the necessary legislative action.
Apart from that agreement, the Treasury and the Federal Reserve,
acting in close cooperation with each other and with responsible
foreign officials, have made steady progress in arranging facilities
for acquiring convertible foreign currencies. These currencies, in
turn, may be flexibly employed to absorb dollars passing into foreig
hands as a result of our payments deficit. While still in a "pilot"
stage, enough has already been learned from this experience to sugge
that these facilities can potentially provide an entirely new
dimension to our defenses against disturbances in the international
monetary system.
Taken together, the financial program and policies I have out-
lined here today will make a major contribution to our economic goal
But/l should also emphasize that these policies cannot -- however
o -4
}
_:."
I - .
- 19 Our export program should soon receive additional impetus as
the result of a number ofmeasures -- including the recent appoint-
ment of an overall Export Coordinator in the Department of Commerce.
This official is charged with the responsibility of reviewing and
expediting our total export drive, working with both industry and
irimTTTPn*n#irraiMi>Mi»ii
Government to assure the best use ofmumsmcmfac ilities and
Meanwhile, our defenses against the potential shocks and strains
that can come from sudden and large-scale shifts of liquid funds -whether arising from speculative or other pressures -- have been
greatly strengthened.
The agreement reached last December by the industrialized
countries to supplement the regular resources of the International
Monetary Fund with additional credit facilities of $6 billion has no
- 18 -
21'
Efforts to lessen the balance of payments impact of our overseas
expenditures and to stimulate our exports, are being stepped up. One
evidence of our determination to reduce Government spending overseas to
the minimum necessary is the recent development under the aegis of the
Bureau of the Budget of a «__w_»p__i*-^6r international transactions.
This requires the quarterly submission by all agencies, whose transactions affect the balance of payments, of a detailed report of past
results, as well as of detailed estimates running one year into the
future. This
for the first time, a regular and orderly procedure for the special review and control of these outlays.
Each item
is being subjected to close scrutiny, and unless aa adequately justified
in terms of over-all priorities, is promptly eliminated.
The
institution of this close control over/spending which affects our
balance of payments should lead to substantial savings in the future.
S?
_i«a target
(_____
of net
»a target
Secretary
McNamarareduction
has
to $1.6 billion
and to $1.0
billion ty^96j./M'ith the full cooperation of our allies, these targets
can be reached without in any way impairing our defense mjaawt^r. .it
6*TL*.
;*•***•*_£. *
- 17 the measures we have taken.
The overall deficit, which averaged $ ^ r /
billion between 1958 and 1960, was reduced to $2.5 billion in 1961 and,
during the first half of this year fell further, to an annual rate of
§1.5 billion. Part of this recent improvement »ay be toe oountii
the temporary Canadian difficulties, but more basic factors have also
contributed^ bis
4I1IL
i-UJiinimuii*
For instance, the net drain from our mutual defense program *&_______i
significantly narrowed — reflecting additional military procurement in
the United States by our allies, as well as our own economies in overseas
spending. Current outlays for economic aid also reflect our efforts to
furnish this assistance in the forci of American goods and services. Perhaps most significant for the longer-run, our exports have climbed toa
new record level — thanks in large part to the virtual stability of
the prices of our manufactured goods since 1958. Although imports have
also risen — an expected response to higher levels of business activity
— our trade surplus has ^^aa^ammmtover the second half of 1951.
~~ %^<*^
213
- 16 -
the appropriate method of financing our current deficit. Nor will it
represent a blunt effort — which I believe would be quite futile —
to crowd out of the long-term market some marginal amount of foreign
borrowing — borrowing that in any event is attracted more by our
unrivaled market facilities than by relatively small immmammmm^mammm^'
The Balance of Payments: Over the longer-run, as I have said,
our ability to maintain equilibrium in our international balance of
payments will reflect our success in achieving more rapid increases
in productivity, a favorable climate for new investment, faster growth,
and stable prices in our domestic economy — precisely the objectives
we are seeking in our tax reform program and in credit policies. But,
for the present, after more than a decade of deficits, we cannot
afford to wait idly by until these longer-run solutions take hold.
Instead, we must intensify our effortsrto restore balance as promptly
as possible.
Our balance of payments accounts^wTShow some of the fruits of
1 A
15 new commitments, banks and other lenders have continued to offer
liberal credit terms and to actively seek out potential borrowers.
The contrast with other recent periods of expansion is striking.
Rates in all sectors of the market are well below the postwar peaks
reached in 1959; 18 months after the recovery began, banks are still
liberally supplied with funds for new loansp1fe__==g=t:, ^lil nud_L»
.TfAs we move ahead in financing our
current deficit, we will naturally be concerned to maintain a
balanced structure of Federal Debt.
That means we must be able to
continue to tap a cross section of the funds becoming available in
the market — from individuals and long-term investment institutions
as well as from banks. But, it is not part of our policy to press
ahead with long-term financing to the extent of jeopardizing the
flow of funds necessary to support an expansion of business investment
a natural
response to *•
activity, and not mawmawmmAmmmmt any rigid preconceptions regarding
_. _.'-'
- 14 The results have been gratifying. Rates for Treasury bills,
which never fell below 2-1/8 percent during the recession monthsCj£~//&/
have risen to the 2-7/8 to 3 percent area. This has been necessary
in order to keep our rates roughly competitive with the rate
structure in foreign markets — after allowing for the fluctuating
cost of forward exchange cover.
At the same time, the interest rates of key importance to domestic
growth and investment — for mortgages, bank loans, corporate bonds,
and state and local government securities — have generally remained
close to, or evenVbelow, their recession lows. Mortgage rates, in
particular, have declined, slowly but almost steadily, for more than
a year, anctniow average a^nl.-.,^. , percent below the PSrEe^al
the trough of the recession a year and a half ago.
Local government
borrowing costs hav« «aloo *mmmMuawk Wthe lowest levels since
1958|f||F.
Moreover, funds are freely available at these
rate levels in all sectors of the market. Far from drawing back on
o-| r>
13 short-term bills, as had been their usual practice in the past. At
the same time, the Treasury increased the volume of its own debt out7
«••••
standing in the under one-year maturitye aarea
ky\f$ If
billion*_fWfcg
With the short-term rate structure supported in this manner, the
Federal Reserve has been able to supply the banks liberally with
reserves throughout the recovery period, and thereby to maintain an
atmosphere of credit ease and ample availability.
At the same time,
the Treasury, through flexible use of advance refundings and other
sales of intermediate and longer term securities during propitious
market periods, has been able to
its over-all debt structure without impeding the flow of funds into
productive long-term investment.
- 12 -
91 7
_ . _. i
supply of funds to finance domestic investment. But we are also
alert to the potential danger of investors shifting their funds
abroad in search of higher returns — thereby increasing our balance
of payments deficit.
Fortunately, rates for top-grade short-term securities — the
part of the rate structure which is the most important in inter'&et+Sktils
national capital flows -- also h_*the least significance from the
standpoint of domestic business conditions. Therefore within the
limitations imposed by a free and fluid domestic market for credit,
we have sought to encourage an active flow of funds into productive
long-term investment, while maintaining a competitive equilibrium wi
-/i&X&
foreign marqjfp in the short-term area. For this reason a large
portion of the funds injected into the market by the Federal Reserve
since February, 1961, have taken the form of purchases of approximate
$___JLJL billionVsecurities maturing in more than one year, rather t
2'1 n
-li-
lts enactment would strengthen our ability to handle future down
turns.
Monetary and Debt Management Policy, which affects the cost
and availability of credit, is another area in which the Federal
Government can exert a powerful influence on economic developments.
The main responsibility for monetary policy lies, of course, with th
Federal Reserve. But the Treasury — largely through its management
of the public debt -- can also significantly influence the cost and
availability of funds.
Difficult and new problems have arisen in this area over the
past 18 months. On the one hand, the Federal Reserve and the Treasur
together — and I want to emphasize the continuous cooperation and
close working relationships that have developed between these agenci
have had a common interest in assuring the availability of an ample
CI
u
- 10 Fear of deficits is deeply rooted in our thinking -- and that
fear has its basis in the fact that deficits have sometimes led to
excess demand and inflation. But in today's economic environment -
far from being a source of dangerous inflationary pressures -- our
deficit reflects our idle plant capacity and our overly large
unemployment roltss. A temporarily larger deficit under these
circumstances is a reasonable price to pay for a program of basic
tax reform and tax reduction designed to spur output a^tm^mtmmmmmamXm
Tgiiiiwil In mmmkmamwd > a program that promises over the years to generate
increased government revenues as a result of increased output.
Finally, even with the enactment of such a program, we will also
need a measure of tax flexibility, in order to strengthen our arse
of tools to combat cyclical down turns. Legislation providing this
flexibility, patterned on <mmm recommendation of the Commission on
Money and Credits been submitted to the Congress by the President.
«"»• 9
*•*
^ ^ "**•"
•*«- C,, ^iv
Part of the solution to this problem can be found in reducing
the total tax load on the economy. Another part can be found by
developing a tax structure that will increase private initiative
and productive investment. The structure of taxes -- as well as
their level — affects incentives to work, to invest, to- cut costs,
and to produce efficiently.
Thus tax reform is just as important as tax reduction. Such a
program necessarily involves a loss of revenue in its first year of
application, but this initial loss of revenue should be soon recoupe
as our economy moves ahead. It should be looked upon as a necessary
r
down payment on economic growth j# more jobs, and 0 higher standards
of living and greater opportunity for all Americans. More rapid
_____•__> ^^^^^^ <!^*W^^K4#«tf
growth will^SolSWunds here that might otherwise be invested abroad,
and rising investment will make our producers more competitive in wo
markets. Both of these effects will serve to improve our balance of
payments.
- 8 appropriate surplus of revenues over expenditures when<
economy is operating at acceptable levels of employment and plant
utilization.
The economy over the past five years has been marked by two
_______
.—•M***"'^
recession!, mamt a persistently excessive level of unemployment J.
That record provides ample evidence of the drag on growth inherent
in our current tax structure.
Today, many of the special expansionary forces that marked the
private economy^p the postwar period are no longer with us. The tax
system that was appropriate during the inflationary postwar epoch is
now too onerous. Too much potential purchasing power is diverted fro
the spending stream as a business recovery develops, dampening econo
activity long before full employment is approached. The end result i
that recovery bogs down at some level of output well below potential
and insttfead of the theoretical large surplus that would be generat
at full employment, we find ourselves with further deficits.
This is clearly indicated by $&mm£mMMm&^
tablejj^You will
note that, even with the TL credit^our^treatment of new invest- ^*-«^
ment will be less generous thaii ahammmmmm&e. of our foreign competi£dLa\
tors.
XXXX
Its early enactment is essential to narrow mmmm gap
and is also of great importance in sustaining and accelerating the
current economic expansion.
The President has announced that a comprehensive program of
tax reform — including a general reduction of both individual and
corporate rates*1- will go to the Congress for action early next
year. In developing this reform program within the Administration,
we are particularly conscious of the need to achieve a tax structure
that will both increase consumer demand and provide new incentives —
both to individuals and to business — while also providing for an
- 6-
^ v /-s
^
These realistic depreciation schedules must be supplemented
and reinforced by other measures, however, if we are to provide
incentives for investment within our tax structure comparable to
those available in the other leading industrialized countries.
These further incentives — and the increased investment they will
generate — are necessary both to spur growth at home and to maintain and improve our competitive position in world markets.
The proposed 7% investment tax credit, incorporated in the
Revenue Act of 1962 already passed by the House of Representatives^^
and approved by the Finance Committee of the Senate^represents the
minimum we must do to keep up with our competition from abroad.
All of our foreign competitors provide special tax inducements
of one sort or another over and above realistic depreciation in order
to promote the modernization and expansion of business investment.
We must do as much if we are to compete on equal terms.
C id :\
- 5 -
One of the major objectives of this Administration has been a
tax environment more conducive to business investment in new equipment,
As a first step toward this objective, the Treasury has overhauled
depreciation guidelines within the framework of existing law. This
reform — the first thoroughgoing review in a generation — recognizes
fully the impact of swiftly changing technology on the wf_-B^life
of equipment, and permits individual businesses to establish schedules
in keeping with objective measures of their own replacement practices.
kwM» *i_ui MIi f Uliirrt^-pimip'fiftufai for manufacturing machinery and
will be V^ep-TBTgBp by an estimated ^/(correct) [percent from existing
practice; the current tax load will be lightened by an estimated
$1.5 billion the first year; and administrative procedures will be
greatly simplified. Although the result, in terms of stimulating
new investment, cannot be gauged precisely, the reaction of the
business community to this long-needed reform has been extremely
favorable.
r\nt
J
- 4-
/
Four distinct problems have urgently called for reform:
1. Our tax structure has placed a heavy burden on the
productive investment so vital to the growth process.
2. The current rate structure siphons off so large a
fraction of the increased income generated by
business recovery that forward momentum is dissipated
before full employment and full utilization of indus-
trial capacity can be reached.
3. Overly high rates of individual income tax interfere
with the economic process.
Energies^, and resources
f^om t-h& Ktic-j]«oc_c._aii hand^jTliniM^ -~——
*. Swr ess *y.t«. toda, ***» ^ w t . ^ ^
**
fj^^j.
rk o£
mA timely *3mtmm*» to Mtt «im, 4mrnUfim9
usilt up M/€ * the
«*««•• to __ «*«sU Uv.i
#f
*««B«tte Mt^^,
-•
^iiex\.rus rate
The financial policy of the Federal Government will be one
of the vital factors in shaping our progress toward these ends over
the years ahead. Within our over-all financial policy, tax policy
can play a particularly important role.
Federal income taxes today absorb fully t£ f® percent of our
total national income. The sheer size of these taxes and the way
they are levied -- the tax rate schedules *«fwl their application to
different sources of income, the maze of special provisions^iWiWP
skmm:immrnm^mm4^^h4^^^^^ml -- all exert a
pervasive influence on economic activity. It is the joint responsi-
bility of Congress and the Executive, while raising needed governmen
revenues, to usejtaxing power constructively to facilitate progress
towards our goals of full employment, rapid growth, and stable price
It has become apparent in recent years that some elements of our
tax structure are impediments in our path to those goals ~- impediments that in many cases can, and should, be removed.
-2-
227
reinforce our program for achieving equilibrium in our international
payments.
There is no basic conflict between these twin goals of rapid
growth at home and balance in our foreign payments. The key to
both is the fuller and more effective use of our unmatched human
and physical resources. We must produce more and better goods and
services with greater efficiency, and we must have markets —
domestic and foreign — adequate to absorb our output.
This requires that our productive plant and machinery be
modernized and expanded.* Domestic demand must also grow to provide
markets for increased productive capacity. J The skills and initiative of our workers must be better channeled into constructive
/
\ effort.. And foreign markets must not be closed to us -- either by
insurmountable tariff barriers, or by increases in our own price
level.
•>9 Q
•AUGUGT 16, 1902
REMARKS OF THE HONORABLE DOUGLAS DILLON
SECRETARY OF THE TREASURY
BEFORE THE JOINT ECONOMIC COMMITTEE
FRIDAY, AUGUST 17, 1962, 10:00 A. M.
The performance of the economy has already been reviewed by
previous witnesses. As you know, there have been substantial gains
)$jp domestic employment and production over the past 18 months, plu
clear progress toward restoring balance in our international
accounts. You are also aware that the margin between our productive
potential and/current rate| of business activity is still far too
wide to permit complacency. Unemployment at 5.3%, although much improved^ is still at an unacceptably high level. And, if we are to
maintain a secure foundation for the dollar and for vigorously ex-
panding trade Im&damm nations, the deficit in our balance of payment
must be eliminated.
Thus, the major task of economic policy is to facilitate a
step-up in the pace of domestic expansion at the same time that we
TREASURY DEPARTMENT
Washington
REMARKS OF THE HONORABLE DOUGLAS
SECRETARY OF
BEFORE THE JOINT
FRIDAY, AUGUST 17,
229
DILLON
THE TREASURY
ECONOMIC COMMITTEE
1962, 10:00 A. M., EDT
The performance of the economy has already been reviewed by
previous witnesses.
As you know, there have been substantial gains
in domestic employment and production over the past 18 months, plus
clear progress toward restoring balance in our international
accounts.
You are also aware that the margin between our productive
potential and the current rate of business activity is still far
too wide to permit complacency.
Unemployment at 5.3 percent,
although much improved, is still at an unacceptably high level.
And, if we are to maintain a secure foundation for the dollar and
for vigorously expanding trade among nations,, the deficit in our
balance of payments must be eliminated.
Thus, the major task of economic policy is to facilitate a
step-up in the pace of domestic expansion at the same time that we
reinforce our program for achieving equilibrium in our international
payments.
There is no basic conflict between these twin goals of rapid
growth at home and balance in our foreign payments.
The key to
both is the fuller and more effective use of our unmatched human
and physical resources.
We must produce more and better goods and
services with greater efficiency, and we must have markets
domestic and foreign —
—
adequate to absorb our output.
This requires that our productive plant and machinery be
modernised and expanded.
D-578
The skills and initiative of our workers
_ 2 must be better channeled into constructive effort.
Domestic demand
must also grow to provide markets for increased productive
capacity.
And foreign markets must not be closed to us —
either
by insurmountable tariff barriers, or by increases in our own price
level.
The financial policy of the Federal Government will be one of
the vital factors in shaping our progress toward these ends over
the years ahead.
Within our over-all financial policy, tax policy
can play a particularly important role.
Federal income taxes today absorb fully 15 percent of our
total national income.
they are levied —
The sheer size of these taxes and the way
the tax rate schedules, their application to
different sources of income, the maze of special provisions
all exert a pervasive influence on economic activity.
—
It is the
joint responsibility of Congress and the Executive, while raising
needed government revenues, to use the taxing power constructively
to facilitate progress towards our goals of full employment, rapid
growth, and stable prices.
It has become apparent in recent years
that some elements of our tax structure are impediments in our
path to those goals —
impediments that in many cases can, and
should, be removed.
Four distinct problems have urgently called for reform:
1.
Our tax structure has placed a heavy burden on the
productive investment so vital to the growth process.
2.
The current rate structure siphons off so large a
o •••'
Q
"— ^ W
fraction of the increased income generated by
business recovery that forward momentum is dissipated before full employment and full utilization
of industrial capacity can be reached.
3.
Overly high rates of individual income tax interfere
with the economic process.
Energies and resources
are diverted from the business at hand and
concentrated on minimizing tax burdens through the
use of a patch work of special deductions and
exclusions, built up over the years to lighten the
burden of our onerous rate structure.
4.
Our tax system today lacks provision for flexible
and timely adjustments to meet swiftly developing
changes in the over-all level of economic activity.
One of the major objectives of this Administration has been a
tax environment more conducive to business investment in new
equipment.
As a first step toward this objective, the Treasury
has overhauled depreciation guidelines within the framework of
existing law.
generation —
This reform
- the first thoroughgoing review in a
recognizes fully the impact of swiftly changing
technology on the economic life of equipment, and permits
individual businesses to establish schedules in keeping with
objective measures of their own replacement practices.
Depreciation
deductions permitted for manufacturing machinery and equipment will
be increased by an estimated 17 percent from existing practice;
- 4 the current tax load will be lightened by an estimated $1.5 billion
the first year; and administrative procedures will be greatly
simplified. Although the result, in terms of stimulating new
investment, cannot be gauged precisely, the reaction of the business
community to this long-needed reform has been extremely favorable.
These realistic depreciation schedules must be supplemented
and reinforced by other measures, however, if we are to provide
incentives for investment within our tax structure comparable to
those available in the other leading industrialized countries.
These further incentives — and the increased investment they will
generate — are necessary both to spur growth at home and to maintain and improve our competitive position in world markets.
The proposed 7 percent investment tax credit, incorporated in
the Revenue Act of 1962 already passed by the House of Representatives and approved by the Finance Committee of the Senate, represents
the minimum we must do to keep up with our competition from abroad.
All of our foreign competitors provide special tax inducements
of one sort or another over and above realistic depreciation in
order to promote the modernization and expansion of business
investment. We must do as much if we are to compete on equal terms.
This is clearly indicated by a table I am submitting for
the record. You will note that, even with the 7 percent credit,
as reported by the Senate Finance Committee, our treatment of new
Investment will be less generous than many of our foreign
- 5 competitors. Its early enactment is essential to narrow the gap and
is also of great importance in sustaining and accelerating the
current economic expansion.
The President has announced that a comprehensive program of
tax reform — including a general reduction of both individual and
corporate rates, effective January 1, 1963 — will go to the Congress
for action early next year. In developing this reform program
within the Administration, we are particularly conscious of the
need to achieve a tax structure that will both increase consumer
demand and provide new incentives — both to individuals and to
business — while also providing for an appropriate surplus of
revenues over expenditures when the economy is operating at
acceptable levels of employment and plant utilization.
The economy over the past five years has been marked by two
recessions, as well as a persistently excessive level of unemployment. That record provides ample evidence of the drag on growth
inherent in our current tax structure.
Today, many of the special expansionary forces that marked
the private economy during the first decade of the postwar period are
no longer with us. The tax system that was appropriate during the
inflationary postwar epoch is now too onerous. Too much potential
purchasing power is diverted from the spending stream1 as a business
recovery develops, dampening economic activity long be*_bre full
employement is approached. The end result is that recovery bogs
- 6 down at some level of output well below potential —
and instead of
the theoretical large surplus that would be generated at full
employment, we find ourselves with further deficits.
Part of the solution to this problem can be found in reducing
the total tax load on the economy. Another part can be found by
developing a tax structure that will increase private initiative
and productive investment. The structure of taxes — as well as
i
their level — affects incentives to work, to invest, to cut costs,
and to produce efficiently.
Thus tax reform is just as Important as tax reduction. Such a
program necessarily involves a loss of revenue in its first year of
application, but this initial loss of revenue should be soon recouped
as our economy moves ahead. It should be looked upon as a necessary
down payment on economic growth, more jobs, and higher standards
of living and greater opportunity for all Americans. More rapid
growth will hold and attract funds here that might otherwise be
invested abroad, and rising investment will make our producers more
competitive in world markets. Both of these effects will serve
i
to improve our balance of payments.
Fear of deficits is deeply rooted in our thinking — and that
i
fear has its basis in the fact that deficits have sometimes led to
excess demand and inflation. But in today's economic environment —
far from being a source of dangerous inflationary pressures — our
; ' i
deficit reflects our idle plant'capacity and our overly large
l
232
- 7 unemployment rolls. A temporarily larger deficit under these
circumstances is a reasonable price to pay for a program of basic
tax reform and tax reduction designed to spur output and promote
full utilization of our human and physical resources, a program
that promises over the years to generate increased government
revenues as a result of increased output.
Finally, even with the enactment of such a program, we will
also need a measure of tax flexibility, in order to strengthen
our arsenal of tools to combat cyclical down turns.
Legislation
providing this flexibility, patterned on a recommendation of the
Commission on Money and Credit, has been submitted to the Congress
by the President.
Its enactment would strengthen our ability to
handle future down turns.
Monetary and Debt Management Policy, which affects the cost
and availability of credit, is another area in which the Federal
Government can exert a powerful influence on economic developments.
The main responsibility for monetary policy lies, of course, with
the Federal Reserve.
But the Treasury —
largely through its
i
management of the public debt —
can also significantly influence
the cost and availability of funds.
Difficult and new problems have arisen in this area over the
past 18 months.
On the one hand, the Federal Reserve and the
Treasury together —
and I want to emphasize the continuous
cooperation and close working relationships that have developed
- 8 between these agencies —
have had a common interest in assuring
the availability of an ample supply of funds to finance domestic
investment.
But we are also alert to the potential danger of
investors shifting their funds abroad in search of higher returns —
thereby increasing our balance of payments deficit.
Fortunately, rates for top-grade short-term securities —
the
part of the rate structure which is the most important in international capital flows —
also have the least significance from
the standpoint of domestic business conditions.
Therefore, within
the limitations imposed by a free and fluid domestic market for
credit, we have sought to encourage an active flow of funds into
productive long-term investment, while maintaining a competitive
equilibrium with foreign markets in the short-term area.
For this
reason a large portion of the funds injected into the market by
the Federal Reserve since February, 1961, have taken the form of
purchases of approximately $3.4 billion of securities maturing
in more than one year, rather than short-term bills, as had been
their usual practice in the past.
At the same time, the Treasury
increased the volume of its own debt outstanding in the under
one-year maturity area by nearly $14 billion.
With the short-term rate structure supported in this manner,
the Federal Reserve has been able to supply the banks liberally
with reserves throughout the recovery period, and thereby to
maintain an atmosphere of credit ease and ample availability.
O
•>> x-,
•*"- ^
w
- 9 At the same time, the Treasury, through flexible use of advance
refundings and other sales of intermediate and longer term
securities during propitious market periods, has been able to
improve its over-all debt structure without impeding the flow of
funds Into productive long-term investment.
The results have been gratifying.
Rates for Treasury bills,
which never fell below 2-1/8 percent during the recession months
of 1961, have risen to the 2-7/8 to 3 percent area.
This has
been necessary in order to keep (pur rates roughly competitive with
the rate structure in foreign majrkets —
after allowing for the
fluctuating cost of forward exchange cover.
At the same time, the interest rates of key importance to
domestic growth and investment -- for mortgages, bank loans,
corporate bonds, and state and local government securities —
have
generally remained close to, or even dropped below, their recession
lows.
Mortgage rates, in particular, have declined, slowly but
almost steadily, for more than a year, and market rates for
government-insured mortgage loans now average more than 1/4 percen t
below the levels prevailing at the trough of the recession a year
and a half ago.
Local government borrowing costs in recent
months have been at the lowest levels since mid-1958.
Moreover,
funds are freely available at these rate levels in all sectors
of the market.
Far from drawing back on new commitments, banks
and other lenders have continued to loffer liberal credit terms and
to actively seek out potential borrowers.
- 10 The contrast with other recent periods of expansion is striking.
Rates in all sectors of the market are well below the postwar peaks
reached in 1959; 18 months after the recovery began, banks are
still liberally supplied with funds for new loans; and there is no
lack of credit availability.
As we move ahead in financing our current deficit, we will
naturally be concerned to maintain a balanced structure of Federal
debt.
That means we must be able to continue to tap a cross
section of the funds becoming available in the market —
from
individuals and long-term investment institutions as well as from
banks.
But, it is not part of our policy to press ahead with
long-term financing to the extent of jeopardizing the flow of
funds necessary to support an expansion of business investment.
Any changes, during the coming year, in the level of long-term
interest rates will reflect a natural response to changing levels
of business activity, and not any rigid preconceptions regarding
the appropriate method of financing our current deficit.
Nor will
i
it represent a blunt effort —
which I believe would be quite
i
futile — to crowd out of the long-term market some marginal
amount of foreign borrowing — borrowing that in any event is
attracted more by our unrivaled market facilities than by relatively
small differences in the total cost of the credit to the borrower.
The Balance of Payments:
Over the longer-run, as I have said,
our ability to maintain equilibrium in our international balance of
payments will reflect our success in achieving more rapid increases
in productivity, a favorable climate for new investment, faster
growth, and stable prices in our domestic economy —
precisely
the objectives we are seeking in our tax reform program and in
credit policies.
But, for the present, after more than a decade
of deficits, we cannot afford to wait idly by until these longer-run
solutions take hold.
Instead, we must intensify our efforts
through other means to restore balance as promptly as possible.
Our balance of payments accounts are beginning to show some
of the fruits of the measures we have taken.
The over-all deficit,
which averaged $3.7 billion between 1958 and 1960, was reduced to
$2.5 billion in 1961 and, during the first half of this year fell
further, to an annual rate of $1.5 billion.
Part of this recent
improvement resulted from the temporary Canadian difficulties, but
more basic factors have also contributed.
For instance, the net drain from our mutual defense program
is being significantly narrowed —
reflecting additional military
procurement in the United States by our allies, as well as our
own economies in overseas spending.
Current outlays for economic
aid also reflect our efforts to furnish this assistance in the
form of American goods and services.
Perhaps most significant
for the longer-run, our exports have climbed to a new record level
—
thanks in large part to the virtual stability of the prices of
our manufactured goods since 1958.
Although imports have also
- 12 risen —
an expected response to higher levels of business activity -_
our trade surplus has improved over the second half of 1961.
Efforts to lessen the balance of payments impact of our overseas
expenditures and to stimulate our exports
are being stepped up.
One evidence of our determination to reduce Government spending
overseas to the minimum necessary is the recent development under
the aegis of the Bureau of the Budget of a government-wide control
system for international transactions.
This requires the quarterly
submission by all agencies, whose transactions affect the balance
of payments, of a detailed report of past results, as well as of
detailed estimates running one year into the future.
This system
provides, for the first time a regular and orderly procedure for the
special review and control of these outlays.
Each item is being
subjected to close scrutiny, and unless adequately justified in
terms of over-all priorities, is promptly eliminated.
The
institution of this close control over the spending which affects
our balance of payments should lead to substantial savings in the
future.
i
Secretary McNamara has established as a target the reduction
of net military spending abroad to $1.6 billion for fiscal 1963,
and to $1.0 billion by fiscal 1966.
$2.6 billion or more.
This compares with a previous
With the full cooperation of our allies,
these targets can be reached without in any way impairing our defense
position.
- 13Our export program should soon receive additional impetus as
the result of a number of measures — including the recent appointment
of an over-all Export Coordinator in the Department of Commerce.
This official is charged with the responsibility of reviewing and
expediting our total export drive, working with both industry and
Government to assure the best use of our recently improved facilities
and assistance programs for exporters.
Meanwhile, our defenses against the potential shocks and strains
that can come from sudden and large-scale shifts of liquid funds —
whether arising from speculative or other pressures — have been
greatly strengthened.
The agreement reached last December by the industrialized
countries to supplement the regular resources of the International
Monetary Fund with additional credit facilities of $6 billion has
now been ratified by 7 countries and will become effective as soon
as the United States itself completes the necessary legislative
action. Apart from that agreement, the Treasury and the Federal
Reserve, acting in close cooperation with each other and with
responsible foreign officials, have made steady progress in
arranging facilities for acquiring convertible foreign currencies.
These currencies, in turn, may be flexibly employed to absorb
dollars passing into foreign hands as a result of our payments
deficit. While still in a "pilot" stage, enough has already been
- 14 learned from this experience to suggest that these facilities can
potentially provide an entirely new dimension to our defenses
against disturbances in the international monetary system.
Taken together, the financial program and policies I have
outlined here today will make a major contribution to our economic
goals. But I should also emphasize that these policies cannot —
however wisely considered and implemented — do the job alone. They
are no substitute for responsible wage bargaining and pricing
practices, for measures to maintain active competition among
producers, for better educational and research facilities, or for
all the other ingredients of dynamic growth with stable prices.
But, it is equally true that without well considered tax reform,
monetary, and debt management policies flexibly attuned to the
facts of our internal and external position, and intense efforts
to restore balance of payments equilibrium, the prospects for
substantial progress toward a better life for all our citizens in
the years ahead would be seriously impaired.
0O0
Comparison of depreciation deductions, initial and investment allowances 1/ for industrial
equipment in leading industrial countries with similar deductions and allowances in the United States
Depreciation deductions, initial and investment
allowances (percentage of cost of asset)
:
-!
:
First year
• First 2 years '. First 5 years
Belgium
Canada
France
West Germany
Italy
Japan
Netherlands
Sweden
United Kingdom
Average, 9 foreign countries
United States:
Practice prior to l/ll/62
With new depreciation guidelines
With new depreciation guidelines and investment
credit 2/
Office of the Secretary of the Treasury
Office of Tax Analysis
Years
8
10
10
10
10
-6
10
5
27
22.5
30.0
25.0
20.0
25.0
1*5.0
kk.o
92.5
71.1*
76.3
67.2
100.0
68.2
85.6
100.0
26.2
30.0
39.0
29.0
1*3.8
36.O
50.0
51.0
1*9.6
51.0
1*6.3
1*6.3
15
12
13.3
16.7
2l*.9
30.6
51.1
59.8
12
29.5
1*2.5
69.6
k3.k
61*. 0
80.6
August 13, 1962
l/ The deductions and allowances for each of the foreign countries have been computed on the assumption that
the investment qualifies fully for any special allowances or deductions permitted. The deductions in the
United States have been determined under the double-declining balance depreciation method,,without regard
to the limited first-year allowances for small business.
2/ For purposes of this table, the J percent investment credit has been considered as equivalent to a
Ik percent investment allowance. For corporation subject only to the 30 percent normal tax, for instance,
it is equivalent to an investment allowance of 23 percent. Allowance has been made in these calculations
for the adjustment to "basis in the amount of the credit as provided in the hill as reported by the •
Senate Finance Committee.
1168
23
HENRY L. GIORDANO
Commissioner of Narcotics
Mr. Giordano was born June 10, 1914, in San Francisco,
California. He attended the University of California School of
Pharmacy, San Francisco, from August 1931 to May 1934, receiving
a Ph. G. degree. In October 1935, he was granted a license as a
pharmacist in San Francisco. From January 1930 to March 1941
Mr. Giordano was employed by Shumate's Pharmacy, San Francisco,
first as a student pharmacist and then as a pharmacist.
Since March 1941, with the exception of the period 1943 to
1946 when he was on active duty in the United States Coast Guard,
Mr. Giordano has been employed by the Bureau of Narcotics,
Treasury Department. He has served in Seattle, Washington;
Kansas City, Missouri; Minneapolis, Minnesota; and Washington,
D. C. He was initially employed as a junior narcotics clerk,
later as a narcotics agent, and in November 1958, following a
period as a District Supervisor, he was appointed Deputy Commissionei
of Na,rcotics
Washington,
D. C.Mr.
_1.I~ZT~
-^ as _7^.
PresidentinKennedy
announced
Giordano's appointment
Commissioner of Narcotics on July 5, 1962, and he took the oath
of office on August 17, 1962.
From October 1955 to April 1956 Mr. Giordano was on laon to
the Committee on Ways and Means of the United States House of
Representatives where he was the chief investigator. Mr. Giordano
served as an advisor to the United States Delegation to the 14th
Session of the Commission on Narcotic Drugs of the United Nations
Economic and Social Council held in Geneva, Switzerland, during
April and May, 1959.
He is married to the former Elaine Watson; they have two
daughters, Anne M. Giordano and Marjorie E. Giordano. The family
lives at 9609 New Hampshire Avenue, Silver Spring, Maryland.
1168
__ W w
- 2 the criminal activity of those engaged in producing and smuggling
narcotics into the United States.
"Mr. Giordano takes on the leadership of the Bureau at a
highly significant time. Organized crime today does not limit its
activities to a single area, it moves into any field where illicit
profits beckon. To help counter this menace, Mr. Giordano has
actively coordinated the Bureau's efforts with those of other
Treasury Bureaus, and has cooperated closely with Federal, states,
and local law enforcement groups. This has contributed significantly to the Attorney General's successful program against
organized crime.
"The new Commissioner has demonstrated his ability to cope
with the criminal world. He is also aware of the need to attack
the narcotics problem on a still broader front through the most
modern treatment and rehabilitation of addicts who are the unfortunate victims of the criminal traffickers. It is in this area
that we can expect increased cooperation between the Bureau and
the Public Health Service, and with State and local health and
welfare services. I look forward to the forthcoming White House
Conference on Narcotics to shed new light on this aspect of our
narcotics problem."
0O0
1168
TREASURY DEPARTMENT
WASHINGTON, D
August 17, 1962
FOR IMMEDIATE RELEASE
HENRY L. GIORDANO TAKES OATH
AS COMMISSIONER OF NARCOTICS
Treasury Secretary Douglas Dillon today administered the oath
of office to Henry L. Giordano as Commissioner of Narcotics.
Mr. Giordano was appointed by President Kennedy to succeed
Harry L. Anslinger, who recently retired after 45 years of Government service. He had been Commissioner since 1930.
The ceremony was attended by Attorney General Robert F. Kennedy,
Congressmen Hale Boggs of Louisiana and Frank M.tKarsten of Missouri,
Treasury officials and representatives of the Departments of State,
Defense, and of Health, Education and Welfare.
Secretary Dillon, in remarks following the administration of
the oath of office, said:
"Over the past 45 years, there has been a significant decrease
in the proportion of narcotic drug addicts to our total population.
"That decrease can be attributed to three major factors:
— The wisdom of the Congress — beginning with
the passage of the Harrison Act in 1914 -- in giving
our law enforcement officers potent weapons against
criminal elements engaged in the illicit importation
and sale of narcotics.
— Increasing cooperation between our Federal
officers and the enforcement agencies of other governments, as well as with our state and local authorities.
-- The vigorous efforts of the Bureau of Narcotics
under its first Commissioner, Harry J. Anslinger...
"As Deputy Commissioner, Henry Giordano has furthered what
may be the most important mission of his Bureau: to stop the
inflow of narcotics by cutting it off at the source. He and his
staff work closely with the police of foreign countries to curb
D-579
24tvJ
TREASURY DEPARTMENT
WASHINGTON, D.C.
August 17, 1962
FOR IMMEDIATE RELEASE
HENRY L. GIORDANO TAKES OATH
AS COMMISSIONER OF NARCOTICS
Treasury Secretary Douglas Dillon today administered the oath
of office to Henry L. Giordano as Commissioner of Narcotics.
Mr. Giordano was appointed by President Kennedy to succeed
Harry L. Anslinger, who recently retired after 45 years of Government service. He had been Commissioner since 1930.
The ceremony was attended by Attorney General Robert F. Kennedy,
Congressmen Hale Boggs of Louisiana and Frank M. Karsten of Missouri,
Treasury officials and representatives of the Departments of State,
Defense, and of Health, Education and Welfare.
Secretary Dillon, in remarks following the administration of
the oath of office, said:
"Over the past 45 years, there has been a significant decrease
in the proportion of narcotic drug addicts to our total population.
"That decrease can be attributed to three major factors:
— The wisdom of the Congress — beginning with
the passage of the Harrison Act in 1914 — in giving
our law enforcement officers potent weapons against
criminal elements engaged in the illicit importation
and sale of narcotics.
— Increasing cooperation between our Federal
officers and the enforcement agencies of other governments, as well as with our state and local authorities.
— The vigorous efforts of the Bureau of Narcotics
under its first Commissioner, Harry J. Anslinger...
"As Deputy Commissioner, Henry Giordano has furthered what
may be the most important mission of his Bureau: to stop the
inflow of narcotics by cutting it off at the source. He and his
staff work closely with the police of foreign countries to curb
D-579
- 2 -
i-T-L
the criminal activity of those engaged in producing and smuggling
narcotics into the United States.
"Mr. Giordano takes on the leadership of the Bureau at a
highly significant time. Organized crime today does not limit its
activities to a single area, it moves into any field where illicit
profits beckon. To help counter this menace, Mr. Giordano has
actively coordinated the Bureau's efforts with those of other
Treasury Bureaus, and has cooperated closely with Federal, state;
and local law enforcement groups. This has contributed significantly to the Attorney General's successful program against
organized crime.
"The new Commissioner has demonstrated his ability to cope
with the criminal world. He is also aware of the need to attack
the narcotics problem on a still |broader front through the most
modern treatment and rehabilitation of addicts who are the unfortunate victims of the criminal traffickers. It is in this area
that we can expect increased cooperation between the Bureau and
the Public Health Service, and with State and local health and
welfare services. I look forward to the forthcoming White House
Conference on Narcotics to shed new light on this aspect of our
narcotics problem."
0O0
242
HENRY L. GIORDANO
Commissioner of Narcotics
Mr. Giordano was born June 10, 1914, in San Francisco,
California. He attended the University of California School of
Pharmacy, San Francisco, from August 1931 to May 1934, receiving
a Ph. G. degree. In October 1935, he was granted a license as a
pharmacist in San Francisco. From January 1930 to March 1S4I
Mr. Giordano was employed by Shumate's Pharmacy, San Francisco,
first as a student pharmacist and then as a pharmacist.
Since March 1941, with the exception of the period 1943 to
1946 when he was on active duty in the United States Coast Guard,
Mr. Giordano has been employed by the Bureau of Narcotics,
Treasury Department. He has served in Seattle, Washington;
Kansas City, Missouri; Minneapolis, Minnesota; and Washington,
D. C. He was initially employed as a junior narcotics clerk,
later as a narcotics agent, and in November 1958, following a
period as a District Supervisor, he was appointed Deputy Commissioner
of Narcotics in Washington, D. C.
President Kennedy announced Mr. Giordano's appointment as
Commissioner of Narcotics on July 5, 1962, and he took the oath
of office on August 17, 1962.
From October 1955 to April 1956 Mr. Giordano was on laon to
the Committee on Ways and Means of the United States House of
Representatives where he was the chief investigator. Mr. Giordano
served as an advisor to the United States Delegation to the 14th
Session of the Commission on Narcotic Drugs of the United Nations
Economic and Social Council held in Geneva, Switzerland, during
April and May, 1959.
He is married to the former Elaine Watson; they have two
daughters, Anne M. Giordano and Marjorie E. Giordano. The family
lives at 9609 New Hampshire Avenue, Silver Spring, Maryland.
243
Statement of Kr. James A. Reed
Assistant Secretary of the Treasury
before the Subcommittee on Coast Guard,
Coast and Geodetic Survey and Navigation
of the House Committee on Merchant Marine
and Fisheries
H.R. 8151
to Require Authorization for Certain Appropriations
Thursday, August 16, 1962—10:00 A.M.
Mr. Chairman and Members of the Committee:
My name is James A. Reed; I am Assistant Secretary of the Treasury.
I appreciate this opportunity to give you the viev/s of the Treasury
Department on H. R. 8151.
I believe that this bill basically concerns a matter of Congressional
procedure and as such it is legislation on which the Treasury Department
should comment with some diffidence. On the other hand, since it relates
to the U. S. Coast Guard, which is one of the branches of the Treasury
Department, it is obvious that we have a real interest in the bill.
At present, as you well know, the Congress gives careful consideration
to the programs on which the Coast Guard will be engaged when it expends
the money which is to be appropriated. This it does in connection with
the consideration of the Coast Guard's annual appropriation bills. It is
my understanding that underlying the proposed legislation is the belief
that it is more desirable that this Committee and its counterpart in the
Senate hear and consider matters relevant to Coast Guard functions rather
than have these matters considered simply as an adjunct to the appropriation
of funds.
244
- 2 The basic view of the Coast Guard and the Treasury Department
is. the same; and v/e know that it is the same position that is held
by your Committee and the Congress as well. It is that the Coast
Guard be maintained in a position in which it can efficiently and
effectively carry out the missions which have been entrusted to it
by lav/. These missions are important. The Coast Guard enforces law
on the high seas. It has important life saving and search and rescue
functions. It maintains aids to navigation not only on our shores
and in our harbors but in isolated posts around the world. It performs
ice-breaking functions. It deals with oceanography. It has a host of
other functions. And, particularly, it stands ready to fulfill its
national defense functions in time of war, with the same courage and
ability which it has so well demonstrated .in the past.
The Coast Guard is an organization in which every one of us in
the Treasury Department takes pride. And I believe that this pride is
shared by the members of your Committee.
I am entirely sympathetic with the intent of the legislation here
proposed. I would be less than frank, however, if I did not say that
legislation of this type could result in delays and difficulties for
the Coast Guard if it were not implemented very effectively each year
by this Committee and its counterpart in the Senate, as v/ell as by the
Appropriations Committees of both Houses, and the Congress generally.
245
There is no surplusage in the Coast Guard.
It is a small organization
and it does not have access to sources which can be tapped to any
significant extent to tide over emergencies.
In other words, if
needed funds should be delayed by inadvertence or even by a legislative problem perhaps entirely unrelated to the Coast Guard,,we would
be in real trouble.
Obviously, the Coast Guard, as an applicant before both your Committee
and the Appropriations Committee, will be faced with tv/o tasks instead of
ona as it asks for the things v/hich it believes it requires. Dual consideration, if it v/ere to deal with the same things before tv/o Committees
in each house, and later twice on the floor of Congress, could obviously
be a factor resulting in delays and possibly other difficulties. This
point alone has been of concern to us.
It is my understanding of the views of this Committee, however,
that it is not your purpose to duplicate the work of the Appropriations
Committee but rather to undertake a broad, general review of problems
of the Coast Guard and of its programs and projects and to grant
authorizations on the basis of such review when you believe that projects
and programs are desirable in the national interest. This position relieves
me of the concern which v/as felt earlier about the possibility of a dual
line-by-line review of each matter which would be the subject of expenditure
by the Coast Guard.
- 4Both the Coast Guard and the officials in the Treasury Department
su'ch as myself who deal with the Coast Guard recognize the propriety
of your Committee concerning itself fully with all significant matters'
relative to the Coast Guard legislation. We know that your interest in
the Coast Guard is an interest dictated by the concern, which we all
share, that the Coast Guard do the best job it can do, that it improve,
and that at all times it operate, effectively and efficiently.
I have confidence that if the Congress enacts the proposed legislation
the Coast Guard will have your sympathetic understanding and support. On
this basis I wish to state on behalf of the Treasury Department that
neither this Department nor the Coast Guard objects to the proposed
legislation. As I commenced by saying, v/e do not believe that v/e
should go further than this, since the legislation's basic purpose is
to effect a change in the procedures of the Congress itself. At this
point I should mention that in sending forward our report to your Committee
the Treasury is suggesting certain technical and other changes in the
proposed legislation. I do not believe that these alterations in any
way change the basic underlying purpose of the bill as introduced. I
believe that they make the bill clearer. Also they limit the need of
reporting in two ways, first by allowing the necessary action to be taken
with a subsequent rather than prior report, and second by requiring reports
annually rather than semiannually.
Thank you for affording me this opportunity to express the views
of the Treasury Department on this matter.
LO
CN
TREASURY DEPARTMENT
24f
WASHINGTON, D.C.
August 16, 1962
FOR IMMEDIATE RELEASE
WITHHOLDING OF APPMISEMENT
ON PEAT MOSS
The Treasury Department is instructing customs field officers
to withhold appraisement of peat moss, horticultural and poultry
grade, from Atkins and Durbrow Ltd., Vancouver, B. C, and Western
Peat Moss, Westminster, B. C. (shipments from Manitoba plant only),
Canada, pending a determination as to whether this merchandise is
being sold in the United States at less than fair value. Notice
to this effect is being published in the Federal Register.
Under the Antidumping Act, determination of sales in the United
States at less than fair value would require reference of the case
to the Tariff Commission, which would consider whether American
industry was being injured. Both dumping price and injury must be
shown to justify a finding of dumping under the law.
The complaint in this case was received on April 6, 1962. The
dollar value of imports received from these two firms during the
first 6 months of I962 was approximately $2,500,000.
0O0
TREASURY DEPARTMENT
oAo
WASHINGTON, D.C.
August 16, 1962
FOR IMMEDIATE RELEASE
WITHHOLDING OF APPRAISEMENT
ON PEAT MOSS
The Treasury Department is instructing customs field officers
to withhold appraisement of peat moss, horticultural and poultry
grade, from Atkins and Durbrow Ltd., Vancouver, B. C, and Western
Peat Moss, Westminster, B. C. (shipments from Manitoba plant only),
Canada, pending a determination as to whether this merchandise is
being sold in the United States at less than fair value. Notice
to this effect is being published in the Federal Register.
Under the Antidumping Act, determination of sales in the United
States at less than fair value would require reference of the case
to the Tariff Commission, which would consider whether American
industry was being injured. Both dumping price and injury must be
shown to justify a finding of dumping under the law.
The complaint in this case was received on April 6, 1962. The
dollar value of imports received from these two firms during the
first 6 months of I962 was approximately $2,500,000.
0O0
-=r
249
TREASURY DEPARTMENT
WASHINGTON, D.C.
August 16, 1962
IMMEDIATE RELEASE
TREASURY DECISION ON PORTLAND CEMENT
UNDER THE ANTIDUMPING ACT
The Treasury Department has determined that portland
cement from Israel 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 Israel without regard to any question of dumping.
The dollar value of imports of the involved merchandise
received during the first 6 months of 1962 was approximately
$330,000.
0O0
TREASURY DEPARTMENT
WASHINGTON, D.C.
August 16, 1962
IMMEDIATE RELEASE
TREASURY DECISION ON PORTLAND CEMENT
UNDER THE ANTIDUMPING ACT
The Treasury Department has determined that portland
cement from Israel 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 Israel without regard to any question of dumping.
The dollar value of imports of the involved merchandise
received during the first 6 months of I962 was approximately
$330,000.
0O0
CM
,—I
CD
3g
i—
GO
CO
STATUTORY D E B T LIMITATION 2 5 J
As of
J»3y 31. 1962
T R E A S U R Y DEPARTMENT
Fiscal Service
Washington, A « g > 2 0 >
1962
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 guar-
tion shall be temporarily increased (1) during the'period beginning on July 1, 1962, and ending on March 31, 1963 to
$308,000,000,000, (2) during the period beginning on April 1, 1963. and ending on June
" $305,000,000,000,
*
fune 24, 1963, to
and
(3) during the period beginning on June 25. 1963, and ending on June 30, 1963, to $300,000,000,000.
The following table shows the face amount of obligations outstanding and the face amount which can still be issued
under this limitation:
Total face amount that m a y be outstanding at any one time
$308,000,000,
Outstanding Obligations issued under Second Liberty Bond Act, as amended
s
Interest-bearing:
.,
„ _ ^ ___
Treasury bills
$42,838,307,000
Certificates of indebtedness
Treasury notes
13.547.047,000
65,477.190.000
$121,862,544,000
Bonds Treasury
"Savings (current redemption value).
Depositary
R. E. A. series
Investment series
Certificates of Indebtedness
Foreign series
Foreign Currency series
Special Funds Certificates of indebtedness
Treasury notes
Treasury bonds
75.007,519,95®
47,653*443,830
116,028,500
24,299.000
»»7l3,?3,?tQOQ
670,000,000
74,?42t goo
5.887.948,000
6,405.130,000
31.502.674.000
Total interest-bearing
Matured, interest-ceased
Bearing no interest:
United States Savings Stamps
Excess profits tax refund bonds
127,514,526,280
7^4,942,500
fr3>7?5i75?tQQQ
293.917,764,78©
340,821,989
51,830,918
725.743
Special notes of the United States
Internat'l Monetary Fund series
Internat'l Develop. Ass'n. series
Inter-American Develop. Bank series.
Total
Guaranteed obligations (not held by Treasury):
Interest-bearing:
2,962,000,000
115,304,400
55,<?oo,ooq
3.184.861.061
297.443,447,830
Debentures : F. H. A. & D C Stad. Bds
445.453.800
Matured, interest-ceased
2.074.900
Grand total outstanding
Balance face amount of obligations issuable under above authority.
447.528.700
CT7iff9i?fyg
10,109,023^
Reconcilement with Statement of the Public Debt
JtOy 31, 1962
(Daily Statement of the United States Treasury, _
July 3T"l962
Outstanding Total gross public debt
Guaranteed obligations not owned by the Treasury
(Date)
Total gross public debt and guaranteed obligations
Deduct - other outstanding public debt obligations not subject to debt limitation
297.876.G50i1!
298,323.578.
297.890.97C
D-S80
S T A T U T O R Y D E B T LIMITATION
0 r , TUBASURY DEPARTMENT
July 31, 1962
~^~Fl.e-l Service
A
t
A. of _ _ ^ _ _ 1 _ _ _ ! «
_a8hin8too A ^ g Q , 1962
Section 21 ©f Second Liberty Bond Act, as amended, provides that the face amount of obligations issued under au
,000
demotion value of any obligation issued on a discount basis which is redeemable prior to maturity at the option of the holder
9h.fi be considered as its face amount." x~e Act &i July 1, 1962 (P.L. 37-512 87th Congress) provides that the above limitation shell be temporarily increased (1) during the period beginning on July 1, 1962, and ending on March 31, 1963, to
$)08,Q0O.OCC,Q0C: (2) during the period beginning OR A|>ril 1, 1963, and ending on June 24, 1963, to $305,000,000,000, end
(3) during the period beginning on June 25, 1963, *«id ending on June 30, 1963, to $300,000,000,000.
The following table shows the face amount of obligations outstaying and the sfoee amount which can still be issued
under this limitation •
Total face amount that may be outstanding at Any one d m @
$308,000,000,000
Outstanding Obligations issued under Second Liberty Bond Act, ae amended
" Interest-bearing j
-.
_
fi
Treasury bills .
__$^i©^,307.OO©
Certificates of indebtedness
:. 13&547.04?,00©
Treasury notes __
.. ^ffjf^ffjfZ^SOmOOQ $121©$62.544,000
Bonds Treasury
_
75.00?,519.95©
'Saving* (current redemption value) __. 47,653.443,830
Depositary _
• ., . .. .
. 126$028,500
R. E. A. e©ri@s. .
34,299.000
Inve.tmeue s e r i e s . _ _ _ _
„ 4.?13.2^.$09
127,5X4.526,280
Certificates of Indebtedness Foreign ~nri».
_.
670,000,000
Foreign Currency series _ _
74|94^gOQ
744,942,500
Special Funds «
Certificates ol indebtedness _____«_». 5.887.948,000
Treasury notes
___
„_-___ 6,405,130.000
Total Interest-bearing ,
293.91?e7©4*780
- «.5Pg.$?»,W
»3.TOS.7f2.000
Matured, interest-ceased
,
.. 340^821.989
Bearing no intseeat t
United States Savings Stamps __^______
5l.830.9lS
Excess profitsfcasrefur&d bonds ___*____.
725.743
Special nofces ol the United States :
Interest1! Monetary Fund aartes
2.962^000.000
Internat'l Develop. Ass'n. series _.
115.304,400
Inter-American Develop. Bank series
,_ _ 3 ^ a000• 0 0 0
Total
,
..
;
;
Guaranteed obligations (not held by Treasury) §
Interest-bearing j
Debentures? F. H. A. & D C Stad. Bds.___
445,453,800
Matured, inte^t-eeased
__
2.074.900
447.528.700
Grand total outstanding
_
3971 W 9 t 97$ 1530
Balance face amount of obligations issuable under above Authority
,
10,109,023,4?0
Reconcilement with Statement of the public Debt Jttly 311 1962
July S C W B
,
(Dally Statement of the United States Treasury,
<D i,)
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 ___,
297.8?6.050»193
HHV, 528*700
298.323.578,893
432.602.363
297.890.976,530
D-580
- 2-
«- «_• w
He began his Federal career in 193^ as a participant in the training program
of the National Institute of Public Affairs.
Born in Worcester, Massachusetts, Mr. Wald has been living in West Orange,
New Jersey, since 1955* He holds an A.B. degree from Clark University and
A.M. and Ph.D. degrees from Harvard University. His academic honors include:
Phi Beta Kappa and Littauer Fellow, Harvard University. Mr. Wald is the
author of a number of books, articles and official reports on taxation,
fiscal policy, and international monetary problems.
Mr. Wald is married and has three children. They "will reside in
Bethesda, Maryland.
oOo
DRAFT
August 20, 1962
FOR IMMEDIATE RELEASE
HASKELL P. WALD NAMED ASSOCIATE DIRECTOR
OF TREASURY'S OFFICE OF TAX ANALYSIS
The Treasury today announced the appointment of Haskell P. Wald, an
economist with the Federal Reserve Bank of New York, as Associate Director
of the Office of Tax Analysis.
Mr. Wald succeeds Mr. Douglas H. Eldridge, who resigned to become °-^
John C. Lincoln Professor of Public Finance at Claremont Men's College,
Claremont, California.
As Associate Director of the Office of Tax Analysis, Mr. Wald will
assist the Deputy Assistant Secretary (Tax Policy), who is also Director
of the Office, in directing the preparation of economic, statistical, and
technical analyses relating to Federal tax policies.
Since 1955 > Mr. Wald has been associated with the Federal Reserve Bank
of New York, for the past 3 years as Chief of- the Balance of Payments Divi
of the Bank's Research Department. During this period he also served j&jffL
as United Nations technical assistance adviser to the Bank of
Greece'and Visiting Professor on the Graduate Faculty of The New School
for Social Research. From 1953 to 1.955, Mr. Wald was rrnnmnir anirinrvr ti
the International Program in Taxation _% Harvard Law School. He also was
a member of the United Nations Economic Consultants Team in Korea in 1953*
Mr. Wald served on the staff of the President's Council of Economic
Advisers from 1950 to 1953- Previously he k«d held positions as an
economist with the National Security Resources Board, the Department of
Commerce, where he was editor of the Survey of Current Business, j-ne
Treasury Department, and the Board of Governors of the Federal Reserve Syst
P-srff
TREASURY DEPARTMENT
WASHINGTON, D.C.
August 20, 1962
FOR IMMEDIATE RELEASE
HASKELL P. WALD NAMED ASSOCIATE DIRECTOR
OF TREASURY'S OFFICE OF TAX ANALYSIS
The Treasury today announced the appointment of Haskell P. Wald,
an economist with the Federal Reserve Bank of New York, as Associate
Director of the Office of Tax Analysis.
Mr. Wald succeeds Mr. Douglas H. Eldridge, who resigned to become a
John C. Lincoln Professor of Public Finance at Claremont Men's College,
Claremont, California.
As Associate Director of the Office of Tax Analysis, Mr. Wald will
assist the Deputy Assistant Secretary (Tax Policy), who is also Director
of the Office, in directing the preparation of economic, statistical,
and technical analyses relating to Federal tax policies.
Since 1955, Mr. Wald has been associated with the Federal Reserve
Bank of New York, for the past 3 years as Chief of the Balance of
Payments Division of the Bank's Research Department. During this period
he also served as United Nations technical assistance adviser to the
Bank of Greece for one year and as Visiting Professor on the Graduate
Faculty of The New School for Social Research. From 1953 to 1955,
Mr. Wald was on the staff of the International Program in Taxation,
Harvard Law School. He also was a member of the United Nations Economic
Consultants Team in Korea in 1953.
Mr. Wald served on the staff of the President's Council of Economic
Advisers from 1950 to 1953. Previously he held positions as an
economist with the National Security Resources Board, the Department of
Commerce, where he was editor of the Survey of Current Business, the
Treasury Department, and the Board of Governors of the Federal Reserve
System. He began his Federal career in 1938 as participant in the
training program of the National Institute of Public Affairs.
Born in Worcester, Massachusetts, Mr. Wald has been living in West
Orange, New Jersey, since 1955. He holds an A.B. degree from Clark
University and A.M. and Ph.D. degrees from Harvard University. His
academic honors include: Phi Beta Kappa and Littauer Fellow, Harvard
University. Mr. Wald is the author of a number of books, articles and
official reports on taxation, fiscal policy, and international
monetary problems.
Mr. Wald is married and has three children. They will reside in
Bethesda, Maryland.
D-581
9 Sc-
roti muitss k. *. MMsnmaB,
Aogust 20, lf62
4K3HLTS
or r$m&mt*§ wmma SILL o m a n o
flit froassty Department mmmmd last evening that the tenders for two series ©f
Treasury -ill*, O M series to he an additional issue of the bill* dated IS*? 21*, 1962, as
the other series to be dated Auguat 23, 1962, which were offered on August 1 5 , w r « opes
at the Federal iieserv* Bank* on August to, fenders were Invited for $1,300,000,000, or
thereeoottte, of 92-day bill a mad for $700,000,000, or thereabouts, of 182-day bin,, ft
detail* of the two series are aa follows1
iAfeGS Of ACS_PTED
92-day Trees%ury bills
182*4$? Treasury Mils
C^KPSIIUVK BIDS J
aeteringftoveaber2 3 - 1
timing February 21, 1963
Appro*. Equlv,
#ffil_ftX
al Sat
UStO
fiLgh
99.2m
hem
2.85J* ,
Average
99.275
2.037*1/
98,1*8
2,991*
Excepting osia tender of $500,000
9S.*91
2,91b* j/
% percent of the aaotsst of 92-day b i U o bid for at the low prise was accepted
16 percent of the aaeistt of Uf«d*y billa bid for at the low price was accepted
ffa
i?Mrt
TOTAL T^DgUS kPHSM
Pistrlat
F0I ASD ACOgPT'D 11 T mtkL
RESiirvVE 0£STEX0fti
^prlted Sal*
ass&isd for
______
Mew lork
Philadelphia
devalaad
&lQhnood
Atlanta
Cfelsage
$t, Lo%d*
Xlnaeapolis
Kansas Qlty
Son Fraaeisoo
TOTALS
1^82,791,000
31,139,000
25,063,000
11,899,000
211,343,000
207,628,000
27,584,000
19,827,000
30,508,000
2U,183,0Q0
$2,002,529,000
*W,ooq
902,591,000
16,039,000
23,063,000
11,608,000
a,307,ooo
165A08#000
22,58U,000
17,207,000
28,268,000
$1,300,270,000
17,9*13,000
1,366,067,000
7,626,000
2h,535,000
2,281,000
7,liiS,000
129,681,000
6,165,000
5,903,ooo
23,938,000
8,377,000
b/ *l,6$l,7i*6,000
_M&i222
555,772,000
2,626,000
U,535,O00
2,281,000
l*,995,O00
U9f2U?,OO0
k,315,000
;J,883,00O
10,i»39,0O0
3,377,000
#700,108,000 5/
J/ Includes #227,817,000 noncompetitive tenders aoooptod at the average pries of 99*20
y Includes $60,884,000 noacoopetiUve tenders aoooptod at the average prioo of 98»fe&
y On a coupon issue of the sasae length and for the sain* aaoiait invested, the reterm at
w
thee- bill* would proride yields of 2,90$, for the 92-day billa, and 3.07*, for tut
182-day hills. Interest rates on hills are quoted la tense of bank discount sith
the return related to the face e«o3&t of the hills payable at maturity rathwr thaa
the asouat invested sad their length in actual number of da/a related to s 360-ds/
year. In contrast, yield* on oortifioatos, note*, sad bonds are eoaputed la tons
of interest on the aaoxmt invested, sad relate the number of days r—sining in s*
interest payaent period to the actual number of days la the period, with seaUaaasl
coapounding if *ere thaa one coupon period is involved.
TREASURY DEPARTMENT
FOR RELEASE A. M. NEWSPAPERS,
Tuesday, August 21,August
1962. 20, 1962
W A S H I N G T O N . D.C.
RESULTS CF TREASURY'S WEEKLY BILL 0FF__:HQ
The Treasury Department announced last evening that the tenders for two series of
Treasury bills, one series to be an additional issue of the b i H s dated May 21*, 1962, and
the other series to be dated August 23, 1962, which were offered on August 15, were opened
at the Federal Reserve Banks on August 20. Tenders were invited for $1,300,000,000, or
thereabouts, of 92-day bills and for $700,000,000, or thereabouts, of 182-day bills. The
details of the two series are as follows:
BANGS OF ACCEPTED
COMPETITIVE BIDS:
High
Low
Average
92-day Treasury bills
maturing November 23, 1962
Approx. Equiv.
Price
Annual Rate
99.278 a/
2.825%
99.271 "
2.853*
99.275
2.837* y
182-day Treasury bills
maturing February 21a 1963
Appro.:. Equiv.
Annual Rate
Price
98.1*88
98.1*91
—Tmjm—
2.991*
2.981** 1/
a/ Excepting one tender of $500,000
(6 percent of the amount of 92-day bills bid for at the low price was accepted
16 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
$
30,729,000
1,1*82,791,000
31,139,000
25,063,000
11,899,000
2l*,3l*3,0OO
207,828,000
27,581i,000
19,827,000
30,508,000
2l*,l83,000
86,635*000
$2,002,529,000
Accepted
Applied For
12*,729,000
$
10,357,000
902,591,000
1,366,067,000
16,039,000
7,626,000
23,063,000
2l*,535,000
11,608,000
2,281,000
21,307,000
7,Hi5,000
165,108,000
129,681,000
22,58U,000
6,165,000
17,207,000
5,903,000
28,268,000
23,933,000
17,91*3,000
8,377,000
59,823,000
59,671,000
$1,300,270,000 b/ $1,651,71*6,000
Accepted
$ 10,023,000
555,772,000
2,626,000
11,535,000
2,281,000
U,995,000
1*9,21*7,000
U, 315,000
3,383,000
10,1*39,000
3,377,000
Ul,925,000
£70O,Ul5,0OO c/
t/ Includes $227,817,000 noncompetitive tenders accepted at the average price of 99.275
c/ Includes $60,881*,000 noncompetitive tenders accepted at the average price of 98.1*91
1/ On a coupon issue of the same length and for the sane amount invested, the return on
these bills would provide yields of 2.90*, for the 92-day bills, and 3.07J, 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 seiniannual
compounding if more than one coupon period is involved.
D-582
258
August 15, 1962
Dear Mr* Secretary:
1 m today sending to the President my letter of
resignation m United States Executive Director of the
International Monetary Fund, effective November 1, 1962,
in order to accept an appointment a* Beauty Managing
Director of the Fund, Since you and I have discussed
this matter a amber of times, I see no point in stating
in this latter the considerations which led to my decision. I do wish you to know how amen. I tows enjoyed ray
association with yon, particularly in this period in
which yo» tore been Seoretary of the treasury*
At the same tins, X must with deep regret resign
the appointment as Special Assistant to the Secretary of
the Treasury which 1 have held since 191*8. -This appointment has given me an even closer association with Mis
Treasury Departments an association which I have valued
highly.
Cordially yours,
(Signs3) Jtastxtfe _•, Staa&tar&i Jy.
Frank A. Southard, Jr.
Honorable Douglas Dillon
Secretary of the Treasury
Washington 25, ®. 0.
259
u,
it§2
It is with * mixture of
thtt Secretary 0! tte
haivs filled «ith disUttction
c-taaeitloft. bat I
* as l^piafey
look fctms-Oi ta 0
Director of the
mi mU
With best
**• ''-* $I£ned •' —-^*ss3
Douglas Dillon
[
MUM
A* Southard, Jr.
U . S . Executive oiractor
cc:
Mr* Roosa
Mr. Leddy
WHf/nse
D R A F T
FOR IMMEDIATE RELEASE " "' ' " *
Treasury Secretary Douglas Dillon today released the following
exchange of correspondence with Frank A. Southard, Jr., who has
resigned as Special Assistant to the Secretary of the Treasury.
Mr. Southard held this post concurrently with that of (J$£.
Executive Director of the International Monetary Fund. President
Kennedy today accepted Mr. Southard's resignation from that
position to accept the position of Deputy Director flfcpr the
International Monetary Fund.
26^
TREASURY DEPARTMENT
WASHINGTON, D.C.
August 21, 1962
FOR IMMEDIATE RELEASE
SOUTHARD RESIGNS FROM TREASURY POST
Treasury Secretary Douglas Dillon today released the following
exchange of correspondence with Frank A. Southard, Jr., who has
resigned as Special Assistant to the Secretary of the Treasury.
Mr. Southard held this post concurrently with that of U. S.
Executive Director of the International Monetary Fund. President
Kennedy today accepted Mr. Southard's resignation from that position
in order to accept the position of Deputy Managing Director of the
International Monetary Fund.
August 15, 1962
Dear Frank:
It is with a mixture of pleasure and regret that I accept your
resignation as Special Assistant to the Secretary of the Treasury,
a position which you have filled with distinction since 1948 in
association with your duties as U. S. Executive Director of the
International Monetary Fund. I shall miss your valuable contribution
in those two capacities, but I congratulate you on your appointment
as Deputy Managing Director of the Fund, and look forward to a continued close association with you.
You take with you to your new duties the warm good wishes of
all your associates in the Treasury.
With best wishes,
Sincerely,
/s/ Douglas Dillon
Douglas Dillon
The Honorable
Frank A. Southard, Jr.
U. S. Executive Director
International Monetary Fund
Washington 25, D. C.
D-583
9Q0
_
^J £__
- 2 August 15, 1962
Dear Mr. Secretary:
I am today sending to the President my letter of resignation as
United States Executive Director of the International Monetary Fund,
effective November 1, 1962, in order to accept an appointment as
Deputy Managing Director of the Fund. Since you and I have discussed
this matter a number of times, I see no point in stating in this
letter the considerations which led to my decision. I do wish you to
know how much I have enjoyed my association with you, particularly
in this period in which you have been Secretary of the Treasury.
At the same time, I must with deep regret resign the appointment
as Special Assistant to the Secretary of the Treasury which I have
held since 1948. This appointment has given me an even closer
association with the Treasury Department, an association which I have
valued highly.
Cordially yours,
/s/ Frank A. Southard, Jr.
Frank A. Southard, Jr.
Honorable Douglas Dillon
Secretary of the Treasury
Washington 25, D. C.
oOo
1
rt.
Peg
TREASURY DEPARTMENT
WASHINGTON, D.C.
August 21, 1962
FOR _J___>IATE RELEASE
TREASURY DECISION ON SHEET GLASS
UNDER THE ANTIDUMPING ACT
The Treasury Department has determined that glass, sheet,
in jalousie louvre sizes, from Czechoslovakia is being, or is
likely to be, sold at less than fair value within the meaning
of the Antidumping Act.
Accordingly, this case is being referred to the United
States Tariff Commission for an injury determination.
Notice of the determination and of the reference of the
case to the Tariff Commission -will be published in the Federal
Register.
The dollar value of imports received during the year 1961
was approximately $3°0,000.
pP4
TREASURY DEPARTMENT
WASHINGTON, D.C.
August"21, 1962
FOR IMMEDIATE RELEASE
TREASURY DECISION ON SHEET GLASS
UNDER THE ANTIDUMPING ACT
The Treasury Department has determined that glass, sheet,
in jalousie louvre sizes, from Czechoslovakia is being, or is
likely to be, sold at less than fair value within the meaning
of the Antidumping Act.
Accordingly, this case is being referred to the United
States Tariff Commission for an injury determination.
Notice of the determination and of the reference of the
case to the Tariff Commission will be published in the Federal
Register.
The dollar value of imports received during the year 1961
was approximately $300,000.
C_=*4J
t^fi/
> A
A,
265
*~~n
^^-
'<$S
FOR^fELEASE H h # r ^ W W _ i # *
COM^Ap^RES
NATIONAL
AWARDS
EIVES
DRIVE
IUCCESS OF SAVI
The National/Lead Company and its president, Joseph A.
./
/
/
/
'"
.;' "
Martino, were cited today by Secretary /bf th$ Treasury Douglas
/
'
/
/
Dillon for tl/e "exoellenyre stilts of pa.t^Qna.1 Lead Company*s
&l<|fn."
1962 SavingsvJkmds
Campari
#s U^UA^^^H A*w*^ d^zyu^*S
The Treasury's Freedom Bond Award .was presented in recognition of the company's 33% gain in employee participation in
the Payroll Savings Plan as a result of the campaign,, Payroll
savers among National Lead employees now number approximately
13,750 — 83$ of company personnel.
In addition to the Freedom Bond Award, a Minute Man statuette was presented as a personal award to Mr. Martino for his
\^ZnQ,r$--$.X.^m^*.wm$LmmBi^mmm^m^^m^^^^ the Savings Bonds' Program.
The presentations, in which William H. Neal, National
Savings Bonds Director, participated, served as a follow-up to
a recent letter to Mr. Martino in which the Secretary said:
"Not only is this record a tribute to the patriotism and good
citizenship of your employees, but it indicates a keen appreciation of our debt management problems by you and the other
public spirited executives of your company."
;X
5*
# #
#
TREASURY DEPARTMENT
WASHINGTON, D.C.
August 22, 1962
FOR IMMEDIATE RELEASE
SECRETARY DILLON PRESENTS SAVINGS
BOND AWARD TO NATIONAL LEAD COMPANY HEAD
Treasury Secretary Dillon today presented awards to the National
Lead Company and its president, Joseph A. Martino, for the company's
successful 1962 United States Savings Bonds sales campaign.
The Treasury's Freedom Bond Award — a handsomely framed
certificate — was presented in recognition of the company's 33 percent
gain in employee participation in the Payroll Savings Plan as a result
of the campaign. Payroll savers among National Lead employees now
number approximately 13,750 — 83 percent of company personnel.
In addition to the Freedom Bond Award, a Minute Man statuette
was presented as a personal award to Mr. Martino for his leadership in
the Savings Bond Program.
The presentations, in which William K. Neal, National Savings
Bonds Director, participated, served as a follow-up to a recent letter
to Mr. Martino in which the Secretary said: "Not only is this record
a tribute to the patriotism and good citizenship of your employees,
but it indicates a keen appreciation of our debt management problems
by you and the other public spirited executives of your company."
oOo
D-584
.3-
267
and exchange tenders will receive equal treatment. Cash adjustments will l?e ma
for differences between the par value of maturing bills accepted in exchange an
the issue price of the new bills.
The income derived from Treasury bills, whether interest or gain from the sale
or other disposition of the bills, does not have any exemption, as such, and los
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 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 actua
received either upon sale or redemption at maturity during the taxable year for
which the return is made, as ordinary gain or loss.
Treasury Department Circular No. 418 (current revision) and this notice, pre-
scribe the terms of the Treasury bills and govern the conditions of their tissu
Copies of the circular may be obtained from any Federal Reserve Bank or Branch.
- 2 :\'.t .*;•&»:« v w :•>' i :# « :H :<>
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 he 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 accompani
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 Itepartment 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 b
final. Subject to these reservations, noncompetitive tenders for $ 200,000 or
less for the additional bills dated
May 51, 1962
ws
ing until maturity date on November 29, 1962
, (
91 -~ days remain-
~wr
) and noncompetitive tenders for
5__3
$100,000
orbe
less
for the
182_-day
bills
without
stated
pricedecimals)
from any one
bidder
will
accepted
in full
at the
average
price
(in three
of ac-
cepted competitive bids for the respective issues. Settlement for accepted ten-
ders in accordance with the bids must be made or completed at the Federal Reser
Banks on August 30,1962 , in cash or other immediately available funds or
in a like face amount of Treasury bills maturing August 30, 1962 . Cash
_co
TREASURY DEPARTMENT
Washington
FOR IMMEDIATE RELEASE, August 22, 1962
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 $2,000,000,000 , or thereabouts, f
cash and in exchange for Treasury bills maturing August 50, 1962 , in the amoun
of $ 1,901,586,000 , as follows:
91 -day bills (to maturity date) to be issued August 50, 1962 ,
in the amount of $1,500,000,000 , or thereabouts, representing an additional amount of bills dated May 51, 1962 ,
and to mature November 29, 1962 , originally issued in the
amount of $ 601,524,000
, the additional and original bills
to be freely interchangeable.
182 -day bills, for $ 700,000,000 , or thereabouts, to be dated
(__?
pSSJ
August 50, 1962
, and to mature
February 28, 1965
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 onl
and in denominations of $1,000, $5,000, $10,000, $50,000, $100,000, $500,000 an
$1,000,000 (maturity value).
Tenders will be received at Federal Reserve Banks and Branches up to the
Daylight saving
closing hour, one-thirty p.m., Eastern^SQ-MfflBfl. time, Monday, August 27, 1962
Tenders will not be received at the Treasury Department, Washington. Each tender
must be for an even multiple of $1,000, and in the case of competitive tenders
price offered must be expressed on the basis of 100, with not more than three
5
TREASURY DEPARTMENT
§••—•———•_ana__BDBB_B_—ani_H_B—RH____Hca_HK_an_—ana—_H—•—^
WASHINGTON. D.C.
August 22, 1962
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
$2,000,000,000, or thereabouts, for cash and in exchange for
Treasury bills maturing August 30, 1962,
in the amount of
$1,901,386,000, as follows:
91-day bills (to maturity date) to be issued August 30, 1962,
in the amount of $1,300,000,000, or thereabouts, representing an
additional amount of bills dated May 31, 1962,
and to
mature November 29, 1962,originally issued in the amount of
$601,324,000,
the additional and original bills to be freely
interchangeable.
182-day bills, for $700,000,000, or thereabouts, to be dated
August 30,1962,
and to mature February 28, 1963.
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, $50,000, $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 p.m., Eastern Daylight Saving
IS time, Monday, August 27, 1962.
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,
,5 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
|B 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
15
accompanied by an express guaranty of payment by an incorporated bank
or
trust company.
D-585
- 2 Immediately after the closing hour, tenders will be opened at
the Federal Reserve Banks and Branches, following which public
announcement will be made by the Treasury Departmment of the amount
and price range of accepted bids. Those submitting tenders will be
advised of the acceptance or rejection thereof. The Secretary of
the Treasury expressly reserves the right to accept or reject any or
all tenders, in whole or in part, and his action in any such respect
shall be final. Subject to these reservations, noncompetitive
tenders for $200,000 or less for the additional bills dated
May 31, 1962,
(91-4ays remaining until maturity date on
November 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 Banks on August 30, 1962,
in cash or other immediately available funds or in a like face
amount of Treasury bills maturing August 30, 1962, Gash 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$k (b) and 1221 (5) of the Internal
Revenue Code of 195^- the amount of discount at which bills issued
hereunder are sold is not considered to accrue until such bills are
sold, redeemed or otherwise disposed of, and such bills are excluded
from consideration as capital assets. Accordingly, the owner of
Treasury bills (other than life insurance companies) issued hereunder
need include in his income tax return only the difference between
the price paid for such bills, whether on original issue or on
subsequent purchase, and the amount actually received either upon
sale or redemption at maturity during
oOo the taxable year for which the
return is made, as ordinary gain or loss.
Treasury Department Circular No. 4l8 (current, revision) and this
notice prescribe the terms of -the Treasury bills and govern the
conditions
any
Federalof
Reserve
their Bank
issue.
or Branch.
Copies of the circular may be obtained from
Anr sermuf «/<M x-^r*
^ ~_AJ_ « .
S
^L ^ A
ft^9
^ BW<tf$ty
FOR IMMEDIATE RELEASE V
D R A FT
"" P W W f « r ^ ^ ^ W < ~ ^ * - - f i ^
sT*V&ttffi€n, ^^CmTOAM^TlcSS
Bureau of Customs has notified
P-MBB
representatives
throughout the country, and the Food and Drug Administration, of a
potentially dangerous toy which may have been shipped ^mmfflmmfWEtead
Stages from Japan for sale here.
The warning went out from Bureauof Customs o^#ices in
Washington yesterday, immediately upon receipt of a report from
William R. fc&ockj the senior U. S. Customs representative in
Frankfurt-AM-Main, Germany.
The toy, labelled "Trick Swiss Cheese"', is intended for use
in practical jokes.
It is a soft slice of simulated "Swiss cheese"
.between two slices of bread. Health authorities in the Federal
Republic of Germany have demonstrated that, w4^L*-4fce>*a*^^ *
|,ffft ^ >-.*>'ifft£f\
gastric juices, the {formerly] pliable plastic becomes hard, and the
sharp edges cut into the intestines of the victim of the practical
joke. / One kaawn fatality has already been reported in Germany.
f linn i mi
-iniimir"
The trade name on the label is printed in English with the price in
United States currency, indicating that it was designed for the
U.S. consumer.
TREASURY DEPARTMENT
Art Settel, WOrth 4-2475
WASHINGTON, D.C.
August 24, 1962
FOR IMMEDIATE RELEASE
CUSTOMS WARNS OF
DANGEROUS IMPORTED TOY
David B.
notified
Food and
may have
Strubinger, Acting Commissioner of Customs, has
customs offices throughout the country, as well as the
Drug Administration, of a potentially dangerous toy which
been shipped from Japan for sale here.
The warning went out from Customs headquarters in Washington
yesterday, immediately upon receipt of a report from William R.
Knoke, the senior U. S. Customs representative in Frankfurt-A-Main,
Germany.
The toy, labelled "Trick Swiss Cheese," is intended for use in
practical jokes. It is a soft slice of simulated "Swiss cheese",
made of plastic, to foe inserted between two slices of bread. Health
authorities in the Federal Republic of Germany have demonstrated
that when in contact with gastric juices, the pliable plastic becomes
hard, and the sharp edges cut into the intestines of the victim of
the practical joke.
One fatality has already been reported in Germany.
The trade name on the label is printed in English with the
price in United States currency, indicating that it was designed
for the U. S. consumer.
oOo
D-586
271
£7, 1982
^MSXjl..lil^iKllliilSAl[iaffBt m,»«
&_t for $700,000,000,
« _ - _ « _ , of 3X«0ay
details of the tvo
billa
t*my
of tlie amount of 91-day
Mils M &
of
48
CTT^iTifTi
1,70S,QS5,OOO
8^,413-0^5
30jff?S|OO0
^,fS4,CrK30
•»»!• I I... M, |>
g«,?09,000
S2 .010*000
S,O7S,Q00
10,108,000
1,167,000
8,087,000
1,167,000
3,775,000
37,04a,000
H*SO&,0QQ
lOstSf^tOOo
ftMSI-tXXI
City
fc*flfl©
10S,^48#000
6,056,000
17,362,000
21,S6*,000
__>__l_Rjfc_E$l!l
*M®M3M®®§/
•«iffiSiiil!aB
$1,259,488,000
5,944,000
$700,143,000 b/
a counoa iaau« of the
of M l f c for tut 9Mtoy M H f |
O B edlU are Rioted ia tenae of
of tbe ffili
tu'l^nO. HHH&er of
* «®^«a#
of 4ay*
of aaya in the
£ft
&*m#t mm
witb
TREASURY DEPARTMENT
FOR RELEASE A. M. NEWSPAPERS,
Tuesday, August 28, 1962.
WASHINGTON, D.C.
August 27, 1962
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 May 31, 1962, and
the other series to be dated August 30, 1962, which were offered on August 22, were opened
at the Federal Reserve Banks on August 27. Tenders were invited for $1,300,000,000, or
thereabouts, of 91-day bills and for $700,000,000, or thereabouts, of 182-day bills. The
details of the two series are as follows:
91-day Treasury bills
182-day Treasury bills
RANGE OF ACCEPTED
maturing November 29, 1962
maturing February 28, 1965
COMPETITIVE BIDS:
Approx. Equiv,
Approx. Equiv.
Annual Rate
Price
Price
Annual Rate
High
2.785$
98.534
2.900$
99.296
Low
2.922$
2.817$
98,523
99.288
Average
2.916$ 1/
2.806$ 1/
98.526
99.291
48 percent of the amount of 91-day bills bid for at the low price was accepted
97 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
$
33,563,000
1,768,655,000
28,415,000
20,506,000
10,572,000
28,734,000
201,462,000
31,393,000
21,934,000
26,709,000
23,709,000
52,010,000
$2,247,662,000
Accepted
Applied For
$
17,563,000
$
6,228,000
1,005,348,000
1,049,980,000
11,505,000
8,644,000
19,934,000
16,102,000
10,572,000
1,167,000
24,761,000
3,923,000
95,726,000
109,948,000
26,393,000
6,052,000
17,362,000
7,444,000
21,584,000
11,564,000
14,189,000
7,859,000
35,902,000
30,577,000
$1,300,839,000 a/ $1,259,488,000
Accepted
$ 6,078,000
606,300,000
1,844,000
8,067,000
1,167,000
3,773,000
37,048,000
4,052,000
5,944,000
6,464,000
2,859,000
16,547,000
$700,143,000 b/
a/ Includes $208,458,000 noncompetitive tenders accepted at the average price of 99.291
b/ Includes $50,373,000 noncompetitive tenders accepted at the average price of 98.526
1/ On a coupon issue of the same length and for the same amount invested, the return on
these bills would provide yields of 2.86$, 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.
fv
- 3 -
counterfeiter is improving his skills and his distribution of bogu
money. This, he said, increases the problems the Service faces, and
pressures his organization to originate and speed up anti-crime
techniques.
Chief Rowley's report concluded:
"The growth of cooperation between all levels of law
enforcement agencies has been the one bright beacon in the otherwi
dark crime picture, and the result of such close cooperation is
reflected in the accomplishments of the Secret Service in its
protective and investigative activities."
A copy of the Secret Service's Annual Report is attached.
h
Chief Rowley's
laconic report on this phase of his work, of
which little can be told
security
was
5 (H PUi 2
"Security arrangements were effected within and outside the
United States during the past fiscal year without significant
incidents."
JTliC1 i.ieaJui~t u.
The brief report which Chief Rowley handed Secretary Dillon on
Friday detailed principally the efforts of the Service against the
crime of counterfeiting.
In a year during which a single raid netted the largest seizure
of counterfeit notes within the country in the history of the
agency, Chief Eowley reported that his men seized spurious money
with a face value of more than 3-1/2 million dollars — before it
could be circulated. Agents arrested 737 people for counterfeiting
offenses, and captured 44 plants where the fake money was being
printed.
FOR RELEASE IN NEWSPAPERS
3UNDAY, AUGUST 26, 1962
COUNTERFEITING AT NEW PEAK,
U. S. SECRET SERVICE CHIEF TELLS DILLON
Criminals are making more money and enjoying it less, according
to James J. Rowley, Chief of the United States Secret Service, in
his annual report to Treasury Secretary Douglas Dillon, on the
activities of the organization. The Secret Service is a part of
the Treasury Department.
"Seven out of every eight counterfeits manufactured were seized
by the Secret Service before they could be passed on to the public,
Chief Rowley said. He reported an increase of nearly 14 percent in
the number of arrests over last year, and a score of 98.3 of
convictions which resulted.
Protecting the nation against the counterfeiting of money and
other securities is the second most important task of the agency,
which was created as an arm of the Treasury in 1865. The protection
of the President of the United States and his family, and of the
Vice President when that official requests it, is the foremost
responsibility of the agency.
A <r:r- a
07 "3
TREASURY DEPARTMENT
WASHINGTON, D.C.
August 24, 1962
FOR RELEASE IN NEWSPAPERS
SUNDAY, AUGUST 26, 1962
COUNTERFEITING AT NEW PEAK,
U. S. SECRET SERVICE CHIEF TELLS DILLON
Criminals are making more money and enjoying it less, according to
James J. Rowley, Chief of the United States Secret Service, in his
annual report to Treasury Secretary Douglas Dillon, on the activities of
the organization. The Secret Service is a part of the Treasury
Department.
"Seven out of every eight counterfeits manufactured were seized by
the Secret Service before they could be passed on to the public," Chief
Rowley said. He reported an increase of nearly 14 percent in the number
of arrests over last year, and a score of 98.3 of convictions which
resulted.
Protecting the nation against the counterfeiting of money and other
securities is the second most important task of the agency, which was
created as an arm of the Treasury in 1865. The protection of the
President of the United States and his family, and of the Vice President
when that official requests it, is the foremost responsibility of the
agency.
Chief Rowley's laconic report on this phase of his work, of which
little can be told for security reasons, was simply: "Security
arrangements were effected within and outside the United States during
the past fiscal year without significant incidents."
The brief report which Chief Rowley handed Secretary Dillon on
Friday detailed principally the efforts of the Service against the
crime of counterfeiting.
In a year during which a single raid netted the largest seizure
of counterfeit notes within the country in the history of the agency,
Chief Rowley reported that his men seized spurious money with a face
value of more than 3-1/2 million dollars — before it could be circulated. Agents arrested 737 people for counterfeiting offenses, and
captured 44 plants where the fake money was being printed.
Chief Rowley warned that the counterfeiter is improving his skills
and his distribution of bogus money. This, he said, increases the problems the Service faces, and pressures his organization to originate and
speed up anti-crime techniques.
D-588
- 2 Chief Rowley's report concluded:
"The growth of cooperation between all levels of law
enforcement agencies has been the one bright beacon in the otherwise
dark crime picture, and the result of such close cooperation is
reflected in the accomplishments of the Secret Service in its protective and investigative activities."
A copy of the Secret Service's Annual Report is attached.
TREASURY DEPARTMENT
UNITED STATES SECRET SERVICE
WASHINGTON 25, D.C.
OFFICE OF T H E CHIEF
August 23, 1962
MEMORANDUM TO THE SECRETARY
Attentions Mr. Robert A. Wallace
Assistant to the Secretary
From % James J. Rowley
Chief, U. S. Secret Service
Subject %. Secret Service Annual Report
It is my pleasure and honor to submit for
your review the Annual Report of the activities
and accomplishments of the U. S. Secret Service
for the Fiscal Year ended June 30, 1962.
_74
U. S. Secret Service
Annual Report
Fiscal Year Ended June 30, 1962
275
The major functions of the United States Secret Service as defined
by Section 3056, Title 18, United States Code, are the protection of the
President of the United States and members of his family, the Presidentelect, and the Vice President at his request; the detection and arrest
of persons committing any offenses against the laws of the United States
relating to obligations and securities of the United States and of
foreign governments; and the detection and arrest of persons violating
certain laws relating to the Federal Deposit Insurance Corporation,
Federal land banks, and national farm loan associations.
Protective and Security Activities
The protection of the First Family and the Vice President, when
requested, continued to be the most important responsibility of the
Secret Service. Security arrangements were effected within and outside
the United States during the past fiscal year without significant incidents.
Enforcement Activities
Despite the entry of organized criminals into the field of counterfeiting, the crime of counterfeiting was an unprofitable one in the fiscal
year of 1962. Seven hundred and thirty-seven persons were arrested for
counterfeiting offenses and 44 counterfeiting plants were captured during
the year. The amount of $3,567,020 in counterfeit money was seized from
counterfeiters before it could be circulated. Counterfeit currency received
during the past fiscal year amounted to $4,134,916, an all time high, but
only $567,896 of this amount represented a loss to the public. From the
- 2 foregoing it can be seen that seven out of every eight counterfeits manufactured were seized by the Secret Service before they could be passed on
the public.
Counterfeit issues reflected that the product of the counterfeiter
is improving consistently with the development of the graphic arts and
the ease with which counterfeit money can be produced.
This, coupled
with the wide distribution available to organized criminals, increased
the enforcement problem and required the Secret Service to originate newer
methods and speed up current techniques to suppress this dangerous crime.
As a result of intense investigation, surveillance and undercover
work, in February 1962, special agents in New York recovered a million
dollars in counterfeit notes in the largest domestic seizure in the
history of the Service.
This issue of counterfeit currency was controlled
by a group with nation-wide underworld connections.
The notes were being
safeguarded by a comparatively minor figure in the syndicate, pending
distribution to hoodlums in other areas. The same group controlled
six other types of counterfeit notes which were actively passed along the
Eastern seaboard.
Information was received that $2,500,000 of one of the
six new counterfeits was destined for Cuba and Puerto Rico, but such
activity did not materialize.
In September 1961 a $10 counterfeit note appeared in New York City.
Within 30 days, although 12 persons had been arrested, the circulation of
these counterfeits had spread to Massachusetts, Connecticut, Rhode Island,
New Jersey, Pennsylvania, Maryland, District of Columbia, Virginia, North
Carolina, Florida, Ohio and Nebraska.
276
- 3 In October 1961 four men were arrested in New York and $25,000 was
recovered.
Shortly thereafter other arrests in Georgia of three men from
Brooklyn resulted in another large seizure of counterfeit currency.
In January 1962 a man was arrests in Seattle for passing a $20 note
and $4,800 in counterfeit money was seized.
Further investigation resulted
in four additional arrests and seizures amounting to $480,000 in these same
counterfeits.
While the seizures amounted to almost the entire $500,000
printed by the counterfeiters, the notes had been passed in Washington,
California, Nevada, New Mexico, Michigan, Nebraska, Missouri, Illinois and
Oregon in the short time they had enaaged in the venture.
Shortly thereafter another $20 counterfeit issue appeared in the West.
Two men and a woman were arrested in ^qttle, Washington, for passing these
notes and a counterfeit $100 note. The source of these notes was quickly
arrested in Casper, Wyoming.
The counterfeit plant was seized and the
counterfeit note maker was arrested In Dickinson, North Dakota, at which
time $350,000 in $20 and $100 notes was seized.
One issue of a new $20 counterfeit note was traced to Cuba.
The first
note appeared in Cuba in July 1961. These notes, and counterfeit $100 notes
having a previous Cuban origin, are frequently confiscated in the United
States from Cuban exiles who have converted their pesos into dollars before
leaving Cuba and thus were defrauded by black market money exchangers.
The
amount of $27,560 in these counterfeit notes was seized in this country in
fiscal year 1962.
- 4 The cases mentioned above illustrate the vast geographical area which
must be covered by our agents in the space of a short time to effectively
suppress the passing of counterfeit notes and to protect the public from
loss.
The following table is a summary of the seizures of counterfeit money
during the fiscal years 1961 and 1962:
Counterfeit Money Seized
FY 1961 and 1962
1961
Counterfeit Currency
Loss to the Public
Before Circulation
$
563,578.44
1,637,865.20
1962
$
567,896.35
3,567,020.43
Percent
Increase
+
.8
+117.8
Total $2,201,443.64 $4,134,916.78 + 87.8
The forgery of government checks continued to represent a major enforcement problem for the Secret Service. During the past fiscal year the Secret
Service investigated 40,351 cases involving an amount of $4,244,133.16, an
increase of 15.8% cases over the previous year — 3,414 persons were
arrested for check forgery, an increase of 15.1% over the previous fiscal
year.
The Secret Service also investigated 7,804 cases involving the forgery
of U. S. Savings Bonds, representing $758,715, an increase of 2.6% cases
over the previous year — 82 persons were arrested for these offenses.
A few of the more flagrant cases investigated during the past fiscal
year follow:
In New York City a woman and man, the woman an old offender, were
arrested and admitted stealing and forging 340 checks in a 10-raonth period.
They realized about $17,000 from their criminal efforts and when arrested
had only $10 in their possession. The money received from this illegal
activity was spent to satisfy a $400 a week narcotic habit.
In Indianapolis, Indiana, a 33 year old woman was arrested for forgery
of a $1,023.88 check. This was her fourth arrest for multiple theft and
check forgery.
In Greenwood, Mississippi, an arrested forger admitted stealing and
forging 100 checks in a four-month period. The checks were stolen and
forged in Greenwood and Jackson, Mississippi, Little Rock and Memphis.
Also in Greenwood, Mississippi, a multiple forger was arrested who
was responsible for the forgery of over 100 checks. While waiting trial
he escaped from jail on September 16 vowing to continue stealing checks
as long as he was free. He was traced by his forgeries through the
states of Mississippi, Illinois, Arkansas and Florida. He was arrested
in Jacksonville, Florida, on December 18 after having forged and cashed
over 100 government checks he had stolen from rural mailboxes prior to
his second apprehension.
One hundred twenty-one stolen and forged Canadian Pacific Railway
money orders were passed in the country. In August 1961 Secret Service
followed the trail of the forgers through Virginia, West Virginia, Michigan,
Ohio, Illinois, Indiana, Maryland and New York before identifying and
arresting the forgers and identifying the thief who was by that time
in jail in Ontario, Canada.
The Secret Service in September 1961 arrested six persons in Chicago
who admitted realizing about $30,000 in eight months by forging government
- 6 checks. One of those arrested acted as a clearing house for the ring,
accepting the checks which were stolen from the mail and assigning them
to others for the forgery. To others went the task of passing the forged
checks and the proceeds were divided among the group.
In Shelby, North Carolina, one man was arrested for forging 50 government
checks while on parole from a 1957 conviction for forgery.
In Buffalo, New York, in December 1961, three persons arrested admitted
the forgery and passing of over 200 checks in the Buffalo area.
The following table shows the number of criminal and non-criminal
investigations completed in fiscal years 1961 and 1962. This table reflects
the arrest of 169 persons in fiscal year 1962 for crimes other than
counterfeiting and forgery, bringing the total of persons arrested to 4,402
in fiscal year 1962. Cases of all types investigated, which included
counterfeiting and forgery, totalled 63,791, an increase of 12.1% cases
closed over the previous year.
Cases Investigated
FY 1961
FY 1962
% Change
Counterfeiting
Forged Govt. Checks
Forged Govt. Bonds
Misc. Criminal
Misc. Non-Criminal
Totals
11,004
34,846
7,603
1,226
2,223
56,902
10,052
40,351
7,804
1,187
4,297
63,791
- 8.7
+ 15.8
+ 2.6
- 3.2
+ 97.8
+ 12.1
+ 23.9
+ 15.1
+ 9.3
Arrests
Counterfeiting
Forged Govt. Checks
Forged or Stolen Bonds
Misc.
Totals
595
737
2,967
3,414
75
169
82
169
3,806
4,402
+ 15.7
- 7 Convictions of 3,923 persons in Secret Service cases in fiscal year
1962 reflected an increase of 13.9% over the previous year. In all
Secret Service cases brought to trial in this period, 98.3% resulted in
convictions.
The rising tide of lawlessness as shown by these statistics is also
reflected in the general crime picture throughout the country.
To meet this challenge it will be necessary to exert continued
vigilance, prompt investigation and vigorous prosecution.
The growth of cooperation between all levels of law enforcement
agencies has been the one bright beacon in the otherwise dark crime
picture, and the result of such close cooperation is reflected in the
accomplishments of the Secret Service in its protective and investigative
activities.
and exchange tenders will receive equal treatment.
Cash adjustments will be made
for differences between the par value of maturing bills accepted in exchange an
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 lo
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-
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 (current revision) and this notice, pre-
scribe the terms of the Treasury bills and govern the conditions of their tissu
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.
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 accompani
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 b
final. Subject to these reservations, noncompetitive tenders for $200,000 or
(&&
less for the additional bills dated
June 7, 1962
, ( 91
days remain-
%B*}C
ing until maturity date on
December 6, 1962
xpajT
) and noncompetitive tenders for
$100,000 or less for the VAO -day bills without stated price from any one
bidder will be accepted in full at the average price (in three decimals) of ac-
cepted competitive bids for the respective Issues. Settlement for accepted ten-
ders in accordance with the bids must be made or completed at the Federal Reser
Banks on September 6, 1962 , in cash or other immediately available funds or
in a like face amount of Treasury bills maturing
September 6. 1962
Cash
_2&3_d_02KX
'.€>:«% ccitf^itf-t»:M£«»n*
TREASURY DEPARTMENT
*
C
Washington
FOR BSdEDIATE RELEASE August 27, 1962
»,*.».».».»,».».*.»»•.—.».».» »^.» —.—.—»—.—.w.—.—.—.—.—.—.v.—.—.—
TREASURY'S WEEKLY BILL OFFERING
Tbe Treasury Department, by this public notice, invites tenders for two series
of Treasury bills to the aggregate amount of $ 2,000,000,000 , or thereabouts,
cash and in exchange for Treasury bills maturing September 6, 1962 > in the amount
—w—
^w
91 -day bills
(to maturity date) to be issued
of $1,901,854.000
9 as follows:
September 6, 1962 ,
m
in the amount of $1,300,000,000 > or thereabouts, represent_
_
—
and
December
> originally
ing to
an mature
additional
amount 6.
of 1962
bills dated
June issued
7. 1962in the>
amount of $ 701,967,000 , the additional and original bills
to be freely interchangeable.
132 -day bills, for $ 700,000,000 , or thereabouts, to be dated
x$_3$c pEjE
September 6, 1962 , and to mature March 7, 1965 .
The bills of both series will be issued on a discount basis under connpetitive
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, $50,000, $100,000, $500,000 and
$1,000,000 (maturity value).
Tenders will be received at Federal Reserve Banks and Branches up to the
Daylight Saving
closing hour, one-thirty p.m., _£_3tera/&_a__iaan_ time, Friday, August 51T 1962
Tenders will not be received at the Treasury Department, Washington. Each tender
must be for an even multiple of $1,000, and in the case of competitive tenders t
price offered must be expressed on the basis of 100, with not more than three
TREASURY DEPARTMENT
_l^"W«wmLij_w«ij.jw«»i« J iwiiiij.j.awj^
WASHINGTON, D.C.
FOR IMMEDIATE RELEASE
August 27, 1962
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
$ 2,000,000,000, or thereabouts, for cash and in exchange for
Treasury bills maturing September 6,1962,. in the amount of
$1,901,854,000, as follows:
91-day bills (to maturity date) to be issued September 6, 1962,
in the amount of $1,300,000,000, or thereabouts, representing an
additional amount of bills dated June 7, 1962,
and to
mature December 6,1962, originally issued in the amount of
$701,967,000, the additional and original bills to be freely
interchangeable.
182-day bills, for $ 700,000,000, Qr thereabouts, to be dated
September 6, 1962, and to mature March 7, 1963.
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, $50,000, $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 p.m., Eastern Daylight Saving
time, Friday, August 31, 1962.
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
D-589 of Treasury bills applied for, unless the tenders are
amount
accompanied
by an express guaranty of payment by an incorporated bank
or
trust company.
- 2 Immediately after the closing hour, tenders will be opened at
the Federal Reserve Banks and Branches, following which public
announcement will be made by the Treasury Departmment of the amount
and price range of accepted bids. Those submitting tenders will be
advised of the acceptance or rejection thereof. The Secretary of
the Treasury expressly reserves the right to accept or reject any or
all tenders, in whole or in part, and his action in any such respect
shall be final. Subject to these reservations, noncompetitive
tenders for $ 200,000or less for the additional bills dated
June J, 1962,
(91-days remaining until maturity date on
December 6, 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 Bante on September 6, 1962,
In cash or other immediately available funds or in a like face
amount of Treasury bills maturing September 6, 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 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
0O0 the taxable year for which the
sale or redemption at maturity during
return is made, as ordinary gain or loss.
Treasury Department Circular No. 4l8 (current, revision) and this
notice prescribe the terms of the Treasury bills and govern the
conditions
any Federalof
Reserve
their Bank
issue.
or Branch.
Copies of the circular may be obtained from
TREASURY DEPARTMENT
Washington
282
FOR RELEASE ON DELIVERY
REMARKS BY HARVEY E. BRAZER
DEPUTY ASSISTANT SECRETARY OF THE TREASURY
BEFORE THE TAX EXECUTIVES INSTITUTE, INC.
WHITE SULPHUR SPRINGS, WEST VIRGINIA
WEDNESDAY, AUGUST 29, 1962
10:00 A.M., E.S.T.
THE 1962 REVISION OF DEPRECIATION GUIDELINES
The importance of depreciation charges in the costs of doing
business in the United States may be seen in the fact that these
charges represented close to 10 percent of gross national product
originating in business in 1961. This importance is further underscored for corporations when it is realized that corporate depreciation
deductions in 1961 were approximately equal to the $23.3 billion of
corporate profits after taxes. Undistributed corporate profits in
the same year amounted to $8.3 billion, and were therefore only about
one-third as large as depreciation deductions as a source of funds
or cash flow. These few figures in themselves go far in explaining
why the subject of depreciation has been of such intense interest
to businessmen, accountants, lawyers, economists, and the Treasury.
I believe that a meaningful discussion of depreciation and of the
nature and significance of the recently released Treasury revision
of depreciation guidelines and rules should be prefaced by a
definition of depreciation. Controversies over what constitutes
"adequate" depreciation have turned in substantial part on this
definition. In my view depreciation is a charge against income
designed to permit the cost incurred in acquiring an asset that is
expected to be used for more than one year or accounting period to be
spread over the life of that asset. Thus a piece of machinery or
equipment that costs $100 and is expected to be used for five years,
at the end of which time it will have a zero salvage value, should
give rise to charges against income over that five-year period of
$100. If it does, its owner will have charged his actual outlay or
expense against income, much as he charges the cost of labor,
materials, power, and so forth. If upon replacing the asset the
business finds that the price of the replacement is higher than $100,
this may be due either to an increase in price, to an improvement in
the machine, or to a combination of both factors. In a period of
rising prices it is ordinarily impossible to distinguish between
these two factors. In any event, if the new capital outlay is, like
D-590
the first one, regarded, in effect, as a deferred expense, my
- 2 -
283
definition of depreciation suggests that the new higher cost should
be written off over the life of the new machine or equipment. Thus
I exclude the notion that depreciation charges as such should be
permitted to exceed original cost less salvage value, if any.
The actual period over which a depreciable asset should be
written off is always a matter of judgment which cannot be resolved
with definitive foresight. Depreciable lives used for tax purposes,
therefore, are primarily anticipatory. Only time and hindsight —
sometimes called "experience" — can tell us whether the depreciable
lives used are "appropriate". They are appropriate if they coincide
with replacement practice and salvage experience.
The rate at which an asset should be depreciated over its life
depends upon the relationship between the passage of time and the
value of the asset. This relationship may be expected to be governed
by such factors as the rate of change in the relevant technology,
intensity of use of the asset, and the rate at which the cost of repair
and maintenance increases with time.
Background of the Treasury's Approach to
Depreciation Revision
The foregoing concepts underlie the Treasury's approach to
revision of depreciation guidelines and rules. We have not disturbed
the principle — nor could we through administrative action — of
permitting depreciation in amounts equal only to the historical costs
of depreciable assets. And we have regarded the 1954 Internal
Revenue Code provisions for the use of the double-declining-balance
and the sum-of-the-years-digits methods of depreciation as appropriate
means of providing flexibility with respect to the timing of depreciation charges over the depreciable lives used. These methods
permit roughly two-thirds of depreciation to be taken over half of
the depreciable life.
Objectives
Over the past year, while the Treasury had the revision of
depreciation guidelines and rules under intensive study, our first
major concern was to establish a clear-cut set of objectives.
Elimination of controversy. One of our foremost objectives was
the minimization or elimination of controversy between taxpayer and
revenue agent on questions having to do with whether or not the
taxpayer's depreciation charges meet the requirements of the Internal
Revenue Code, which stipulate that "There shall be allowed as a
- 3 -
£_84
depreciation deduction a reasonable allowance for ... exhaustion,
wear and tear (including a reasonable allowance for obsolescence) ..."
Although the provision for a "reasonable allowance" for depreciation
has been a part of the tax law sine© the Revenue Act of 1913,
Treasury rulings and regulations interpreting this provision have
varied. Between 1913 and 1924 the burden of proving the reasonableness of depreciation deductions was on the taxpayer, but between 1924
and 1934 this burden was shifted to the Government. Thus, for the
ten years preceding 1934, depreciation deductions were generally
permitted as claimed by the taxpayer, unless the Internal Revenue
Service was able to provide clear and convincing evidence that they
were unreasonable.
A major change was introduced in 1934 when T.D. 4422 and
Mimeograph 4170 were issued by the Treasury. This Treasury action,
which once again placed the burden of proving the reasonableness of
depreciation deductions on the taxpayer, was the Treasury's alternative
to a Congressional suggestion of 1933 that depreciation allowances be
reduced by one-quarter as a means of increasing revenues which had
fallen so sharply as a result of the severe economic depression. The
Treasury's 1934 action brought a substantial curtailment of depreciation
deductions through a variety of measures, including the upward
adjustment of depreciable life schedules which had been published in
a 1931 document entitled Depreciation Studies. The 1942 edition of
Bulletin F incorporated, adjusted and extended the scope of these
schedules.
The next major change in the Treasury's approach to depreciation
came in the form of Revenue Rulings 90 and 91 of 1953. These rulings
were designed to provide a more liberal administrative policy which
would reduce controversy over depreciation and in large part reverse
the action taken through the issuance of T.D. 4422 in 1934. Thus
Revenue Ruling 90 states that "... it shall be the policy of the
Service generally not to disturb depreciation deductions, and Revenue
employees shall propose adjustments in the depreciation deduction only
where there is a clear and convincing basis for a change. This policy
shall be applied to give effect to its principal purpose of reducing
controversy with respect to depreciation."
Opinions differ as to the effectiveness of Revenue Rulings 90
and 91 in reducing controversy between taxpayers and the Internal
Revenue Service on matters of depreciation. Until this year, Revenue
agents and taxpayers still had available to them for guidance only
Bulletin F, in which the depreciable lives indicated or suggested
had not been changed for at least 20 years.
The Treasury accepted the premise that neither taxpayer nor agent
had available to him clear-cut objective standards for determining
the reasonableness of depreciation charges. What was reasonable to
one taxpayer or to one agent could be unreasonable to another, so that
- 4 _. O >«.''
similarly situated taxpayers subject to audit by different agents
could be expected to fare differently.
Some means, therefore, had to be sought through which the same
objective standard of reasonableness could be applied uniformly, for
the protection of both the taxpayers and the revenues.
Simplicity. A second major objective sought by the Treasury, one
closely" related to the elimination of controversy, was simplicity in
the administration of tax depreciation. Under the item-life approach
to depreciation, even Bulletin F's 5,000 suggested lives failed to
cover all of the depreciable assets used by business and agriculture.
A single firm manufacturing soap, for example, was expected to look
to Bulletin F's 200 item-lives for depreciable assets used in that
industry-. Departure from item-lives or Bulletin F's suggested
schedules required continued negotiations with the Revenue agent, as
did the establishment of depreciable lives for the many assets not
covered in Bulletin FT- frequently because they did not exist 20 years
ago.
The Treasury believed that greater simplicity could be achieved
if more attention were to be paid to the forest of the depreciation
account and less to the trees represented by every depreciable asset
held by the taxpayer.
Greater recognition of obsolescence. Although the Internal Revenue
Code specifically notes that obsolescence should be taken into
account in determining the reasonableness of depreciation allowances,
past practices have looked primarily to the historical experience of
the taxpayer in determining depreciable lives. The Treasury, in its
revision, followed a course dictated by the view that, since the
life of a depreciable asset or a group of such assets can necessarily
only be determined on the basis of hindsight, and because past
experience may not be an appropriate index of future replacement
practice, a new administrative approach to depreciation was required.
This new approach would look to the taxpayer's prospects and expectations with respect to future replacement, rather than to his past
experience. A major objective of the revision, therefore, was to
establish guideline lives that give greater explicit recognition to
obsolescence and which recognize that "useful life to the taxpayer"
involves more than the question of how lon_, an asset may be expected
to last in a physical sens©. Thus, economic life, rather than
physical life, has been emphasized.
From the point of view of the economist, an asset that is in
perfectly good physical shape may no longer be economically useful.
The standard economist's criterion for determining when an asset
should be replaced is the rule that a capital asset should be replaced
when the total unit cost of production with a new asset is less than
use
the
foregone
variable
the old
unless
asset.
or out-of-pocket
the Clearly,
firm follows
profits
unit
a capital
cost
or profit
involved
asset
opportunities
replacement
in continuing
will
policy
to be
286
- 5 governed by this rule. If we accept the assumption that it is the
objective of the firm to maximize its profits, it is the economically
useful life, rather than the physical life, that is relevant for
depreciation purposes. The rule, of course, places major emphasis
upon the technological alternatives available to the firm and therefore
on the rate of technological change, and consequently, on the rate
of economic obsolescence of capital assets.
Emphasis on future practices. A further objective of the Treasury
was related to the fact that investment in machinery and equipment
has been lagging badly in the United States both relative to our past
record and relative to the experience of our major foreign competitors.
We believe that many firms were caught in a vicious circle because of
reliance on past replacement experience in determining the reasonableness of current depreciation charges. If a firm had been laggard in
replacing its capital assets, its experience would warrant only a
long depreciable life and therefore low depreciation charges. On the
other hand, low depreciation charges, given the importance to total
cash flow available for investment of depreciation, meant that funds
were not available for investment in more modern equipment. Moreover,
the fact that existing assets are not full depreciated is frequently
held to be a serious obstacle to their replacement. We believed
this situation had to be remedied.
Thus, in its new approach to the administration of tax depreciation, the Treasury aimed at providing American business and
agriculture with the opportunity to start "fresh" by looking primarily
to the future.
The new guidelines for depreciation
The new guidelines for depreciation involve a major departure
from past practices. Most significantly, in pursuing the achievement
of the law's objective of permitting a reasonable allowance for
depreciation, they seek a reasonable overall result in measuring
depreciation, rather than approaching depreciation on an itera-by-item
basis. Instead of the more than 5,000item lives suggested in
Bulletin F, Part I of Revenue Procedure 62-21 provides for less than
TOO guideline classes and lives divided amoung four groups. Group 1
includes depreciable assets used by business in general — office
furniture, fixtures, machines and equipment; transportation equipment;
land improvements; and buildings. Guideline classes and lives, each
of which covers a nonmanufacturing activity other than transportation,
communications, aid other public utilities, are found in Group 2.
Machinery and equipment, including depreciable jigs, tools, dies, and
fixtures, and special-purpose structures, used in manufacturing are
covered in Group 3. Finally, the guideline classes and lives
(other than those dealt with in Group 1) used in the transportation
and communications industries and by water, gas, and electric utilities
are presented in Group 4.
_6-
287
Under the new approach, a taxpayer engaged, say, in the manufacture
of furniture, ordinarily will be concerned with only four or five
guideline classes and lives. Thus, his machinery and equipment, as
well as special structures, if any, may be depreciated under the tenyear life assigned to guideline class 12 of Group 3; his office
furniture, fixtures, machines, and equipment are also assigned a
ten-year guideline life under guideline class 1 of Group 1; his
automotive equipment lives of three to six years under guideline classes
2(b) and 2(d) of Group 1; his land improvements a life of 20 years
under guideline class 3 of Group 1; and his buildings will be depreciated as under the old practices.
Our furniture manufacturer may use the new guideline lives
irrespective of his past practices with respect to replacement of
depreciable assets or the item or group lives he has used in the past.
If the new guideline lives are not shorter than lives he has previously
justified — as will be the case in some instances — he may continue
to use those previously justified shorter lives in lieu of the new
guideline lives. In either case, he is entitled to use the previously
justified or new guideline lives as a matter of right, beginning
with accounting years for which tax returns are due on or after
July 12, 1962. Moreover, his depreciation charges will not be
questioned by the Service for the first three years.
But no prescribed schedule of lives or depreciable lives justified on past audit or on other bases will necessarily provide reasonable depreciation allowances. The test of the reasonableness of his
depreciation allowances will be found only in the relationship
between those allowances and future replacement practices. This
relationship will show up on the taxpayer's books in the ratio of his
accumulated depreciation reserves to the depreciable basis of the
assets being depreciated. Thus we look to the taxpayer's "reserve
ratio" — the ratio as we have just defined it.
In the simplest case, where the guideline class of assets is
being depreciated on a straight-line basis and where the rate of growth
of the depreciable basis is zero, if the taxpayer's replacement
practices coincide with the depreciable life being used and there is
no dispersion of lives of individual assets around the guideline
life, the reserve ratio will necessarily equal 50 percent for a
seasoned account. A reserve ratio higher than 50 percent will indicate that the taxpayer's replacement cycle is longer than the depreciable life upon which his depreciation charges are based. On the
other hand, a reserve ratio of less than 50 percent will indicate
that the reverse is true.
The new procedure uses the reserve ratio test as the objective
means of determining whether or not the taxpayer's depreciation
charges are reasonable. But to pick up our furniture manufacturer
illustration, we noted that his depreciation charges would not be
- 7-
288
challenged in the first three years. In the fourth year of the
transition to the new approach we will not ask that his reserve ratio
be equal to the expected reserve ratio — given the depreciable life
being used for the guideline class of assets, the rate of growth and
method of depreciation being used — nor even that it be within the
acceptable range provided in our tables of reserve ratios. In the
fourth year, the taxpayer's depreciation charges will not be disturbed
provided only that his reserve ratio in the fourth year lies within
the designated range or the gap between his reserve ratio and the
upper limit of the range is lower than it was in at least one of the
three preceding years. This same rule applies until a period equal
to the guideline life has elapsed. At the end of this period, or
after the end of the presumed life cycle, the taxpayer will meet the
reserve ratio test if his reserve ratio lies within the range
indicated in the reserve ratio tables for his rate of growth, method
of depreciation, and the depreciable life being used, irrespective
of whether it is the guideline life, a longer life, or a life shorter
than the guideline which the taxpayer has been able to justify.
I want to emphasize the fact that the reserve ratio test is a
liveral test, one which is not designed to place the taxpayer or the
agent in a rigid strait jacket.
The reserve ratio ranges are so
calculated that the upper limit of the range will be reached only if
the taxpayer is replacing his assets on the average over a period 20
percent longer than the depreciable life upon which his depreciation
charges are based. Similarly, he will penetrate the lower limit of
the reserve ratio range if he is replacing his assets in a period of
years that averages 10 percent shorter than the depreciable life he
is using for tax depreciation purposes. But the liberality of the
test goes even further. The reserve ratios presented in the tables
were computed on the assumption that all assets in a guideline class
have a life equal to the one depreciable life. That is, it is
assumed that there is no dispersion around this life. If dispersion
were to be taken into account (and, of course, the degree of dispersion
would vary for each taxpayer) the computed reserve ratios would be
considerably lower than those printed in our tables and the test
therefore would be far more sever© in its application.
This discussion of the new guidelines and rules for depreciation
deals, of course, only with the straightforward case.. Many taxpayers
will find that they will encounter problems and questions that I have
not touched on here. I believe that most of these questions or
problems are dealt with in parts II aod III of Revenue Procedure 62-21
and in the Questions and Answers contained in the guideline pamphlet.
I hope that the questions dealing with some of the details of the
procedure may be raised in the discussion to follow this session.
The Treasury invites such questions and is now preparing to publish
supplementary questions and answers and explanatory materials for
application of the new depreciation rules.
289
- 8 Results to be Expected from the Application of the
New Depreciation Guidelines
On the basis of intensive studies conducted by the Treasury, we
expect that the guidelines for depreciation will permit the achievement of the objectives I outlined earlier. We have no doubt not
eliminated entirely controversy between taxpayer and agent. As the
revenue procedure explains, many issues remain to be resolved on the
basis of the particular facts and circumstances and the reserve
ratio test does not apply in rigid fashion. For example, the fact
that a taxpayer's reserve ratio exceeds the upper limit of the
indicated reserve ratio range will not be sufficient to require that
his depreciable life or lives be extended. This will be only one
factor to be taken into account by the Internal Revenue Service agent.
But certainly controversy should be drastically reduced.
We believe, too, that the new procedure will prove to have
achieved a great deal in the direction of simplicity. But no one
seriously suggests that a full understanding of the new procedure can
be achieved without careful study. Once understanding is widespread,
however, I believe that the procedure will in fact prove to be
reasonably mechanical in its application.
Nor can there be any serious doubt but that the vicious circle
to which I alluded earlier will be broken, and that the new depreciation procedure will stimulate a higher level of investment in
machinery and equipment in the economy.
We expect that these new guidelines will permit more liberal
depreciation deductions for more than 70 percent of investment in
depreciable assets other than buildings. Our estimate of the potential
increase in depreciation under the new guidelines is $4.7 billion,
about 17 percent of the depreciation deductions currently claimed
on depreciable assets (exclusive of buildings). However, we recognize
that in any one year not all of the potential increase in depreciation
will result in reduction in tax liabilities. Hence, in order to move
from the $4.7 billion potential increase in depreciation to the
estimated reduction in tax liabilities, it is necessary to take into
account the fact that some taxpayers will not elect to use the new
guideline lives and some taxpayers who will use the more liberal
depreciation provisions will not have sufficient taxable income to
absorb the additional depreciation. We estimate that the increase
in depreciation charges taken by businesses reporting taxable income
in the first year will be equal to $3.4 billion, at a tax saving of
some $1.5 billion.
The new guideline lives represent a reduction of an estimated
32 percent from the Bulletin F lives for machinery and equipment used
in manufacturing and a reduction of about 15 percent from actual lives
used under practices pursued prior to the issue of Revenue Procedure
62-21. We expect that in practice the estimated average depreciable
life for machinery and equipment used in manufacturing will decline
from about 15 to 12 years.
- 9 -
&.. \j \j
Overall, therefore, the Treasury's revision of depreciation
guidelines constitutes a very important step forward in several
major directions.
Conclusion
The tax bill now being debated on the floor of the Senate
contains two major provisions that are closely complementary to
the administrative action already taken by the Treasury in the field
of depreciation. One is Section 13 of the bill as it was reported
by the Senate Committee on Finance, dealing with gain from disposition
of certain depreciable property. This section of the bill provides
for the treatment as ordinary income of any gain on the sale or other
disposition of depreciable property, other than buildings or their
structural components, to the extent of depreciation deductions
taken in 1962 and subsequent years. It also provides that the first
10 percent of salvage value of depreciable personal property may
be disregarded in the computation of depreciation charges. Both
of these provisions of Section 13 of the bill are extremely important
for purposes of facilitating the administration of the new
depreciation guidelines.
Of even greater significance, from the point of view of stimulating investment in machinery and equipment, is the bill's provision
of a 7 percent investment tax credit. As Secretary of the Treasury
Dillon has pointed out on several occasions, the investment credit
must be enacted in order to round out the Administration's program
with respect to the tax treatment of investment — a program
designed to place American business on an approximately equal footing
with its competitors abroad in terms of the tax treatment of capital
assets. Realistic revision of depreciation by itself could not
achieve this objective. The administrative revision that has now
been accomplished is but one part of a two-part program. The importance of its enactment is underscored by the fact that the credit
will operate to offset the reduction in reported business profits
that will result from the application of the new depreciation
guidelines.
Revision of rules governing tax depreciation can never be said
to have been completed, just as tax revision generally is necessarily
a continuing process. No one individual or substantial group of
individuals can possibly anticipate all or even most of the problems
that arise when major changes are undertaken in an area as important
as tax depreciation.
How well the Treasury has succeeded in attaining the objectives
of the new depreciation guidelines will depend in large measure
upon the cooperation of businessmen, farmers, accountants, and lawyers
concerned as taxpayers or practitioners with issues in the field
of tax depreciation. You can cooperate most effectively by
recognizing not merely the letter of Revenue Procedure 62-21, but
- 10 -
- ^
more importantly, its spirit. We in the Treasury certainly do not
make claim to infallibility. We may have overlooked soaie important
problems — we may even have made some mistakes. We rely upon
experts such as those assembled in this audience to call to our
attention any errors or oversights. Commissioner Caplin has made it
patently clear that he expects those responsible for the administration
of the tax laws under his direction to pursue precisely the course
I ask of you — application of the new guidelines and rules in
accordance with the facts and spirit that motivated the Treasury in
bringing about revision.
0O0
OQ9
__ \J IL,
TREASURY DEPARTMENT
W A S H I N G T O N , D.C.
FOR IMMEDIATE RELEASE
August 28, 1962
TREASURY LIMITS AWARDS IN WEEKLY BILL AUCTIONS
Yesterday's regular weekly Treasury bill auction was
marked by the unusual occurrence of a single bidder tendering
for an exceptionally high proportion of the total amount of
3-month bills offered.
In view of the disproportionate
allotment that would have occurred and the resulting market
disturbance, the Secretary of the Treasury decided to invoke
the right that he expressly reserves in every public offering
of Treasury securities to reject any or all tenders, in whole
or in part.
Under these circumstances, he has announced that
no single bidder will be awarded more than one quarter of the
total supply of bills offered in either the 3-month or 6-month
maturities.
0O0
D-591
UNITED STATES NET MONETARY GOLD TRANSACTIONS WITH
FOREIGN COUNTRIES AND INTERNATIONAL INSTITUTIONS
293
January 1, 1962 - June 30, 1962
(In millions of dollars at $35 per fine troy ounce)
Negative figures represent net sales by the
United States* positive figures, net purchases
First
Second
i Fiscal Year 1
Country
Quarter
Quarter
July 1, 1961
1962
1962
June 30. 196
Argentina
+60.0
+25.0
+85.0
Austria
-39.4
-16.9
-56.3
Belgium
-28.0
-35.0
-207.4
...
Burma
-5.0
-5.0
.
..
Cambodia
1
-3.1
Canada
Congo Republic
Costa Rica
Cyprus
Dom. Republic
Egypt
El Salvador
France
Greece
Iceland
...
+190.0
+4.6
•k
...
*
|
-k
-.4
-.3
...
-45.0
-4.0
-5.0
-97.5
-15.0
-.1
-.1
-.1
!
!
+190.0
+28.8
-2.3
-2.0
-3.1
-8.5
-5.7
-142.5
-29.2
-7.1
!
Indonesia
Iran
Int. Mon. Fund
Israel
Lebanon
Netherlands
Nigeria
Saudi Arabia
Spain
Switzerland
Syria
Tunisia
Turkey
United Kingdom
Yugoslavia
All Other
Total
/<"
I
-10.0
-.6
-10.5
...
!
1
-12.6
-47.1
+61.6
+35.0
-1.1
-.1
—
-59.0
-.5
-1.1
-181.3
J
-.2
-16.2
+150.0
-10.0
-32.1
-24.9
-20.0
-25.1
-204.1
+46.9
-1.1
J
-.5
-150.0
-1.1
-711.6
-.3
-.4
-.7
-1.1
-1.6
-6.8
-291.0
-101.8
|
Figures may not add to totals because of rounding
*Less than $50,000
-1,025.7
a
CP
TREASURY DEPARTMENT
294
WASHINGTON, D.C.
August 30, 1962
FOR IMMEDIATE RELEASE
UNITED STATES FOREIGN GOLD TRANSACTIONS
FOR SECOND QUARTER OF 1962
The net sale of monetary gold by the United
States during the second quarter of 1962 amounted
to $101.8 million. In the first quarter of the
year, there was a net sale of gold of $291.0
million.
The Treasury's quarterly report, made public
today, summarizes monetary gold transactions with
foreign governments, central banks and international institutions for the first two quarters
of calendar year, 1962, and for the Fiscal Year
1962.
D-592
TREASURY DEPARTMENT
WASHINGTON, D.C.
August 30, 1962
FOR IMMEDIATE RELEASE
UNITED STATES FOREIGN GOLD TRANSACTIONS
FOR SECOND QUARTER OF 1962
The net sale of monetary gold by the United
States during the second quarter of 1962 amounted
to $101.8 million. In the first quarter of the
year, there was a net sale of gold of $291.0
million.
The Treasury's quarterly report, made public
today, summarizes monetary gold transactions with
foreign governments, central banks and international institutions for the first two quarters
of calendar year, 1962, and for the Fiscal Year
1962.
D-592
UNITED STATES NET MONETARY GOLD TRANSACTIONS WITH
FOREIGN COUNTRIES AND INTERNATIONAL INSTITUTIONS
January 1, 1962 - June 30, 1962
(In millions of dollars at $35 per fine troy ounce)
Negative figures represent net sales by the
United States; positive figures, net purchases
First
Second
Fiscal Year 1962
Country
Quarter
Quarter
July 1, 19611962
1962
June 30. 1962
+60.0
+25.0
+85.0
Argentina
-16.9
-39.4
-56.3
Austria
-35.0
-28.0
-207.4
Belgium
-5.0
-5.0
Burma
-3.1
Cambodia
Canada
Congo Republic
Costa Rica
Cyprus
Dom. Republic
Egypt
El Salvador
France
Greece
Iceland
Indonesia
Iran
Int. Mon. Fund
Israel
Lebanon
Netherlands
Nigeria
Saudi Arabia
Spain
Switzerland
+190.0
+4.6
*
*
*
*
-.3
-.4
-45.0
-4.0
-5.0
-97.5
-15.0
-.1
-.1
-.1
*
+190.0
+28.8
-2.3
-2.0
-3.1
-8.5
-5.7
-142.5
-29.2
-7.1
-10.5
-.2
-16.2
+150.0
-10.0
-32.1
-12.6
-47.1
+61.6
-59.0
+35.0
-24.9
-20.0
-25.1
-204.1
+46.9
-1.1
-.1
-10.0
-.6
*
Syria
Tunisia
Turkey
United Kingdom
Yugoslavia
All Other
-1.1
-181.3
-150.0
-.3
-.4
-1.1
-1.6
Total
-291.0
-101.8
-.5
...
Figures may not add to totals because of rounding
*Less than $50,000
-1.1
-.5
-1.1
-711.6
-.7
-6.8
-1,025.7
. 3 Text of Special Citationt
**fe nmwy Jacob Anslinger
In reeogmtKm of outstanding leadership in
the world-wide struggle to eliminate addiction to
narcotic drugs* As first and only Cossaiesloner
in the thii?ty~tifo year history of the Treasury
Bepai?tBtent,s Bureau of narcotics, you have
resdared conspicuous and dedicated service to your
country and to the world • tm& career haa
exestollf led the highest traditions of th# Federal
Civil Service.11
. 2-
2*1
your wortc with other goverrsaents of the Free World to keep the flow
of drugs within the hounds of legitimate use. In so doing you have
waged an effective war against the worM^tide illicit traffic in
narcotics.
President Kennedy's request that you remain as the United
States Representative on the Commission of Narcotic Drugs of the
United Hatlons is further testimony to your experience and
dedication. You have certainly earned the highest award the
Treasury Department can bestow.
X am proud now to present to you the Alexander Hamilton Award,
and to read to you a special citation from the Treasury
Department „
29S
CT
SHARKS BY TREASURY SECRETARY DOUGLAS DILLON
mm
PHSSSNTINO THE ALEXANDER HAMILTON AWARD
HAIOT JACOB
mmmom, mnmm ommmzmmn
OP
mm<mcB
12 NOON THUHSSAY, AUOUST 30, 3J&-* HOOM 4121* «ABf THEASURr
Coinmlssioner Anslinger, it is wholly appropriate that you he
honored with the Alexander Hamilton Award. As you know, the first
principle underlying this award — and the reason why it is given
in the name of our first Secretary of the treasury — is that it
recognises the rare quality of leadership.
this country awoke forty years ago th the iiaperaitee need to
fight the illicit spread of narcotics, (Mr first rmed was a leader.
The Nation was fortunate in selecting you as that leader.
The second criterion in determining who should receive the
Alexander Hamilton Award is that the leadership displayed he of such
a higher order as to provide outstanding and unusual service and
benefit to our Goveraisent and our people.
Your record fully meets this requirement, for your activities
have heen geared to world needs, as well. I refer, of course, to
28®
*- w <^
REMARKS BY TREASURY SECRETARY DOUGIAS D U X O H
UPON PHBSEHTlNa THE A1MANDER KAI^HLTON AWARD
TO
HARRY JACOB JOfSIJNOER, RETIRED COBSTO5SIOHER OF NARCOTICS
12 NOON THURSDAY, AUGUST 30, 19&2, ROOM 4121, MAIN TREASURE
Coiamissioner Anslinger, it is wholly appropriate that you he
honored with the Alwxander Hamilton Award, As you know, the first
principle underlying this award — and the reason why it is given
in the name of our first Secretary of the Treasury •• is that it
recognizes the rare quality of leadership*
This country awoke forty years ago th the imperaifcee need to
fight the illicit spread of narcotics* Our first m&d was a leader*
The Nation was fortunate in selecting you as that leader.
The second criterion in determining who should receive the
Alexander Hamilton Award is that the leadership displayed he of such
a higher order as to provide outstanding and unusual service and
benefit to our Govermaent and our people*
Your record fully meets this requireaw&nt, for your activities
have been geared to world needs, as well. I refer, of course, to
- 2 your work with other governments of the Free World to keep the flow
of drugs within the bounds of legitimate use* In so doing you have
waged an effective war against the world-wide illicit traffic in
narcotics*
President Kennedy *s request that you remain as the United
States Representative on the Commission of Narcotic Drugs of the
United Nations is further testimony to your experience and
dedication.* You have certainly earned the highest award the
Treasury Itepartment can bestow*
X am proud now to present to you the Alexander Hamilton Award,
and to read to you a special citation from the Treasury
Department*
• * • • »
301
• 3
Text of Special Citation t
To Harry Jacob Anslinger
In recognition of outstanding leadership in
the world-wide struggle to eliminate addiction to
narcotic drugs* As first and only Commissioner
in the thirty-two year history of the Treasury
Department** Bureau of Narcotics, you have
rendered conspicuous and dedicated service to your
country and to the world. Your career has
exemplified the highest traditions of the Federal
Civil Service•*
302
wm mukm A* M« mmvkmm*
August 31, Ifit
Satwday* Scptsabsr 1_ „MSf .„„
HEKIffS Of TS&UKgtt'* ISCttLI B U L OrnKUtt
the treasury Sefpartasiit annouo©*- last evening that the tenders for two aeries of
fwu^rjr sills, ©a* series tofeean additional istas of the bill* dated Jwne J, l % t # etf
the oilier eerie** to m dated sepUater 6, xm§ m*h were offered m August if, *e*»
opened at the federal Sssene isaks m August 31. Tenders eere invited for H*300i99M
or tiseros&oste, ©f $l<«iay billa ana for $700,000,000, or tfesraabeste, ef lSt*day W i t ,
the details of tb* two series are as fellows s
l82*day Treasury b U l s
?i«day Treasury bills
i-ias of Aoeirtia
aaturinf_i_l£_iLlL
aatsrisg
Daessfosr
6,
"
COKPEtUIVr- BIOS,
v.
Appro**
A&ttiaal Hits
ijiffesl .Mate
arias
J___
2.805*
•
#.5os»/
J.95I*
•
BOA
I.83W1/
•
96.U9S
of $300*000
of ?l-day hills -id for at tne lee price nac
«f 182-day hills hid for at ths lev
AMP AO*»fiB Bf luasan aESMti COSTSICISI
•Mfi
toiAi, tmsms kwum tm
"WO.
St* loule
Gity
See Fraaeise©
Sm^mEmSmmmmmmmmmmm
I
20,162,000
1,512 ,(X*3,0t)0
2s,SSs,000
23,^*9,000
12,3U3,OCX)
19,3i»S,000
ICTfSTOfQOQ
28,0145,000
22,1*38,000
5O,U35,0OO
fS,33$#O00
10,162,000
MMfcM*>
U*,$d3,ocx>
12,343,000
16,SU5,000
137,0?OfOOO
23,8US,000
20,636,000
U9,635,000
ItlgtOOO
biSKy_ss
# io,6^,acx>
1,071,1U2,000
7#ee7,00O
26,^W*,000
1,362,000
Mb7fOoo
120,175,000
6,066,000
6,Gli4,000
xx,m$<m
a.g»
*.»»
2.977S1/
accepted
Aeaasfeed
SiTiTTliiiS~ir. m i l - —
$ i*,6^,ooo
5o7,liT.OOO
1,667,000
ll,20i>tQQQ
x$m$m
S0»1?M*
6,OIU,000
11.21i*,000
M35fW
$2,053,1*7,000
*i,300,3?7,0O0 y 11,331.W,000
I700,m,«_st
T0SAI3
. at ths average prise * * J * » # 1
y XaeMs* |2C&,l*72,OQO aoiieoetssetitive tenders
at the average price ef %•*?* »;
' Xaeledtos $U7»92»tOOO sasMNapettttae tenders i
On a eeapoa iaeae of the mm length and for the serae a m e n * a f w w a .
these hills w m d d provide yields of 2 , 8 ^ , for tbe ^.-daj M i l s , sad
k&hj***
ld2-4av bills. Xatsrest rates ca M i l s ar« quoted in t e m e of bsafe diacotmt *m
th« return related to tfee face a»o*itt ef U s h U l s payable at astarity ^ ^ g ^
tbs w s o ^ t Invested aad tfc«ir l s a f U in actual awihsr of days relate te a 3 6 0 - W
wear. la contrast, yields m certificates, netes, ssdtoeedsare counted is t e w
0t interest on the « K M * iiarested, and relate Vm mamr ef days reeaiaias la as
iater«ai payamwm period to tHe aciml mmhar ef days ia U e period, with
ng
if
/° raore than one coupwa period is involved*
I
TREASURY DEPARTMENT
W A S H I N G T O N , D.C.
FOR RELEASE A. M. NEWSPAPERS,
Saturday, September 1, 1962.
August 31, 1962
RESULTS OF TREASURY'S WEEKLY BILL OFFERING
onn
oil:
The Treasury Department announced last evening that the tenders for two series of
Treasury bills, one series to be an additional issue of the bills dated June 1, 1962, and
the other series to be dated September 6, 1962, which were offered on August 27, were
opened at the Federal Reserve Banks on August 31- Tenders were invited for $1,300,000,000,
or thereabouts, of 91-day bills and for $700,000,000, or thereabouts, of 182-day bills.
The details of the two series are as follows:
RANGE OF ACCEPTED
COMPETITIVE BIDS:
High
Low
Average
91-day Treasury bills
maturing December 6, 1962
Approx. Equiv.
Price
Annual Rate
99.291
99.279
99.281*
2.805$
2.852$
2.83i*$ 1/
182-day Treasury bills
maturing March 7, 1963
Approx. Equiv.
Annual Rate
Price
98.50^ a/
98.1*91 "
98.U95
2.957$
2.985$
2.977$ 1/
a/ Excepting one tender of $200,000
_0 percent of the amount of 91-day bills bid for at the low price was accepted
30 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
BostonNew York
Philadelphia
Cleveland
Richmond
Atlanta
Chicago
St. Louis
Minneapolis
Kansas City
Dallas
San Francisco
TOTALS
Applied For
$
20,162,000
1,512,01*3,000
29,588,000
23,91*9,000
12,31*3,000
19,31*5,000
197,870,000
28,81*5,000
22,1*38,000
50,1*35,000
25,338,000
110,81*1,000
Accepted
10,162,000
895,21*3,000
ll*,588,000
23,91*9,000
12,31*3,000
16,51*5,000
137,070,000
23,81*5,000
20,638,000
1*9,635,000
15,338,000
81,01*1,000
$2,053,197,000
$1,300,397,000 b/ $1,331,979,000
Applied For
$
10,61*1*,000
1,071,11*2,000
7,667,000
26,901*, 000
1,382,000
i*,81*7,000
120,175,000
6,068,000
6,011*,000
11,1*_U,000
9,235,000
56,1*87,000
Accepted
\ l*,6i*U,000
567,167,000
2,667,000
11, 201*, 000
1,382,000
1*,1*1*7,000
50,175,000
1*,068,000
6,011*,000
11,211*,000
6,235,000
30,912,000
$700,129,000 c/
V Includes $201*, 1*72,000 noncompetitive tenders accepted at the average price of 99.281*
c/ Includes $k7 ,929,000 noncompetitive tenders accepted at the average price of 98.1*95
tip
On a coupon issue of the same length and for the same amount invested, the return on
these bills would provide yields of 2.89$, for the 91-day bills, and 3.06$, 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
r ^ o m P o u n d i n g if more than one coupon period is involved.
''D
>
• i
.United States Savings Bonds Issued and Redeemed Through August 31, 1962
(Dollar amounts in millions - rounded and will not necessarily add to totals)
Anount
Issued 2J
MATURED .
Series A-1935 - D-1941 .«
Series F & G-1941 - 1949
UNMATURED
/
Series E: -^
1941 .
1942 ,
1943 .
1944 .
1945 .
1946 .
1947 ,
1948 .
1949 ,
1950 ,
1951 ,
1952 ,
1953 .
1954 .
1955 .
1956 ,
1957 .
1958 ,
1959 .
1960 ,
1961 ,
1962 ,
Unclassified ..
Total Series E
Series H-1952 - 1962 2/
Total Series E and H
Series F and G:
1950
1951
1952
Unclassified
Total Series F and G
5,003
26,082
Amount
Amount
% Outstandfy
Redeemed 1/ Outstanding 2/ of Amt. Issue
4,988
25,896
15
186
.30
.71
1,510
6,664
10,759
12,428
9,511
4,034
3,605
3,597
3,439
2,899
2,476
2,457
2,643
2,610
2,661
2,556
2,285
2,046
1,825
1,617
1,271
266
590
83,749
306
1,357
2,147
2,606
2,253
1,244
1,361
1,517
1,586
1,478
1,313
1,508
1,828
1,915
2,031
1,953
1,943
2,033
1,984
2;165
2,516
1,434
-1.35
38,344
16.85
16.92
I6.64
17.33
19.15
23.57
27.41
29.66
31.56
33.78
34.64
38.03
40.89
42.32
43.30
43.31
45.96
49.84
52.10
57.26
66.44
84.35
8.495
1.709
6.786
79.88
130.588
85.458
45.130
34.56
2,429
793
212
2,054
422
105
65
3,433
2,646
1,816
8,021
12,906
15,034
11,764
5,279
4,966
'5,114
5,025
4,376
3,790
3,965
4,471
4,525
4,691
4,509
4,228
4,079
3,808
3,781
3,787
1,700
456
122,093
$
-U
375
371
106
-65
31.41
15.44
46.78
50.00
787
??>.%
Series J and' K-1952 - 1957
Total Series F, G, J and K ....
1ML
1,904
1.780
48.32
7.H7
4.550
2.567
36.07
{Total matured
Total unmatured ....
Grand Total
31,085
137,705
168,790
30,884
90,008
120,892
201
47,697
47,898
1/ Includes accrued discount.
OFFICE OF FISCAL ASSISTANT SECRETARY
2/ Current redemption value.
_J/ At option of owner bonds may be held and will earn interest for additional perioas
after original maturity dates.
y
Includes matured bonds which have not been presented for redemption.
.United States Savings Bonds Issued and Redeemed Through August 31, 1962
(Dollar amounts in millions - rounded and will not necessarily add to totals)
Amount
Amount
Amount
Issued l/ Redeemed 1/ Outstanding 2/
• YATUP83 .
^Series A-1935 - D-1941 .<
* Series F & G-1941 - 1949
pMTOKED _,
' Series E: -^
1941
1942
1943
1944
1945
1946
1947
1948
1949
1950
1951
1952
1953
1954
1955
1956
1957
1958
1959
1960
1961
1962
Unclassified ••
Total Series E
Series H-1952 - 1962 3/
Total Series E and H
Series F and G:
1950
1951
1952
Unclassified
Total Series F and G
Series J and K-1952 - 1957
Total Series F, G, J and K ..
All Series
Total matured .,
Total unmatured
Grand Total ....
5,003
26.0S2
•$
4,988
25,896
% Outstanding
of Ant.Issued
.30 2
.71
15
186
$
1,816
8,021
12,906
15,034
11,764
5,279
4,966
'5,114
5,025
4,376
3,790
3,965
4,471
4,525
4,691
4,509
4,228
4,079
3,808
3,781
3,787
1,700
456
122,093
1,510
6,664
10,759
12,428
9,511
4,034
3,605
3,597
3,439
2,899
2,476
2,457
2,643
2,610
2,661
2,556
2,285
2,046
1,825
1,617
1,271
266
590
83,749
306
1,357
2,147
2,606
2,253
1,244
1,361
1,517
1,586
1,478
1,313
1,508
1,828
1,915
2,031
1,953
1,943
2,033
1,984
2;165
2,516
1,434
-1.35
38,344
8.495
1.709
6.786
79.88
45.130
34.56
130,588
S5 .458
4J
16.85
16.92
-
/"
'i
Q Q
17! 33
19.15
23.57
27.41
29.66
31.56
33.78
34.64
38.03
40.89
42.32
43.30
43.31
45.96
49.84
52.10
57.26
66.44
84.35
31.41
2,429
793
212
2,054
422
105
65
yi5
371
106
-65
15.44
46.78
50.00
x__n
?,M6
__2Z_
oo
3.684
1,904
1.780
-3,3?
7,117
4,550
2,567
36.07
31,085
137,705
168,790
30,884
90,008
120,892
201
47,697
47,893
.65
34.64
28.38
1/ Includes accrued discount.
0 E
V Current redemption value.
™ E OF FISCAL ASSISTANT SEC3ETAK:
V At option of oy,ner bonds may be held and will earn interest for additional periods
after original maturity dates.
U Includes matured bonds which have not been presented for redemption.
TREASURY DEPARTMENT
Washington
304
FOR RELEASE ON DELIVERY
REMARKS BY HARVEY E. BRAZER
DEPUTY ASSISTANT SECRETARY OP THE TREASURY
AT THE ANNUAL CONFERENCE ON TAXATION OP THE
NATIONAL TAX ASSOCIATION
MIAMI BEACH, FLORIDA
TUESDAY, SEPTEMBER 4, 1962
2:30 P.M., E.S.T.
THE ADMINISTRATION'S TAX POLICY
This Administration has made it abundantly clear that a dynamic
tax policy will play a major role In accelerating the growth of the
American economy. President Kennedy opened his Tax Message to the
Congress of April 1961 with these words: "A strong and sound Federal
tax system is essential to America's future. Without such a system,
we cannot maintain our defenses and give leadership to the free
world. Without such a system, we cannot render the public services
necessary for enriching the lives of our people and furthering the
growth of our economy."
As a first step toward tax reform the President recommended an
investment incentive In the form of a tax credit to accelerate
modernization and expansion of our industrial capacity. To offset
the initial revenue loss involved and to eliminate many anomalies
and inequities in the tax system, the President also proposed
corrective legislation in other areas. These included taxation of
foreign Income, withholding on dividends and interest, the dividend
credit and exclusion, expense accounts, capital gains on the sale of
depreciable property, and the taxation of cooperatives, mutual fire
and casualty Insurance companies, and mutual thrift institutions.
In addition, President Kennedy cited the review of depreciation
methods and rules already underway in the Treasury Department,
indicated that his Immediate proposals represented only a first,
urgent step to constructive tax reform, and announced that he was
directing the Secretary of the Treasury to prepare a comprehensive
tax reform program.
Thus — In the first three months of this Administration — the
general pattern of tax policy, as well as the first details, were
spelled out. Let's examine the progress so far and see where we hope
to
go from here.
D-594
- 2-
305
The Revenue Act of 1962
In the past 16 months the Congress has moved tax reform along
effectively. H. R. IO65O, the Revenue Act of 1962, as passed by the
House and amended by the Senate, although heavily buffeted about as
It passed through the seas of the legislative process, contains
important revisions dealing with every area of tax reform suggested
by the President but one — repeal of the dividend credit and
exclusion.
The investment credit
As passed by the House and amended by the Senate, the investment
credit provides for a credit against tax liability for investment in
machinery and equipment. The rate of the credit is 7 percent for
investment in assets having an expected useful life of eight years
or more, other than that undertaken by public utilities. For public
utilities the rate of the credit is 3 percent. In the case of
assets having a useful life of four to six years one-third of the
cost of newly acquired assets is eligible for the credit and for
those having an expected useful life of six to eight years two-thirds
of the coist is eligible. The depreciable base of the assets will be
reduced by the amount of the credit.
The credit — which is expected to have an initial cost of about
$1 billion in the first full year of operation — will stimulate
investment by far more than that increase in the flow of cash
available for investment suggests. It will do this by reducing the
net cost of acquiring depreciable assets, thus increasing sharply
the expected profitability. This increase will vary inversely with
the expected life of the asset. For an asset with a service life of
ten years and an after-tax yield of 5 percent under straight-line
depreciation or 5.6" percent under double-declining balance
depreciation, the expected rate of profitability will be increased
to 6.7 percent. For more durable equipment, for example an asset
expected to last 15 years, the increase In profitability will be
somewhat less, but the profitability will still be increased by more
than 14 percent over what it would be with double-dec lining depreciation.
Because the credit applies only to newly acquired assets
(including used assets to the extent of $50,000 per year), the entire
incentive effect Is concentrated on the profitability of new capital.
No revenue is lost in raising the after-tax net income derived from
assets already in place. It is, therefore, an efficient way of
encouraging both modernization and expansion of productive facilities.
The credit will therefore help to accelerate economic growth and
improve our competitive position in markets at home and abroad. It
will also increase the attractiveness of Investment at home relative
Thus,
our
tax
to direct
balance
credit
bothinvestment
in
is
ofterms
restricted
payments
of
abroad
trade
position.
to because
investment
and capital
eligibility
within
accounts
the
for
United
the
the
credit
investment
States.
will aid
- 3-
308
Both absolutely, in real terms, and relative to our gross
national product, investment in productive facilities in this country
has lagged in recent years. It is by no means coincidental that both
our rate of economic growth and our rate of capital investment have
dropped behind those of most industrialized nations — particularly
those of Western Europe and Japan. Comparison between the tax
treatment of capital investment in this country and capital
consumption allowances* including special incentive allowances and
depreciation beyond realistic write-offs, clearly demonstrates that
even with the new and substantially liberalized depreciation
allowances we are far less generous in our treatment of capital assets
than are our major foreign competitors. The investment credit,
however, will serve to place American industry on a substantially
equal footing — with respect to tax treatment of depreciable equipment — with its foreign competition. Treasury studies have
demonstrated that the combination of the investment credit and the
new liberalized depreciation guidelines will bring our allowable tax
write-offs for depreciable assets In line with the average of those
permitted abroad.
Taxation of foreign income
For many years abuses have existed in the area of taxation of
foreign income. So-called "tax haven" operations have become
notoriously successful as a means of tax avoidance. Aided by
artificial arrangements between American parent corporation and
foreign-controlled subsidiary regarding intercompany pricing and
the artificial shifting of various forms of income from parent to
foreign subsidiary and from one subsidiary to another, an Increasing
number of American-controlled foreign corporations have managed to
reduce sharply or eliminate completely both their American and
foreign tax liabilities. The provisions of H. R. IO650 will
contribute substantially to ending tax haven abuses.
The bill also deals effectively with existing escapes from
American taxation now available to American citizens who establish
residence abroad primarily for the purpose of avoiding United States
income taxes. It deals effectively as well with the tax treatment
of foreign Investment companies, foreign trusts, and gain from the
sale or exchange of stock in a foreign corporation where income
earned abroad is repatriated by means of a liquidating distribution
or a sale.
The bill closes two other foreign tax loopholes: the first
permits the escape from American estate taxation with respect to
foreign real property contained in the estate and the second allows
domestic corporations receiving dividends from foreign corporations,
in effect, to double count in part in computing their credit for
foreign taxes the amount of taxes paid to foreign governments. The
bill changes the estate tax law to include foreign property in the
base, and also contains a provision for grossing up of dividends
received from foreign corporations other than those located in less
developed countries.
- 4Under reporting of dividend and interest income
The Treasury has estimated that between $4 and $5 billion of
reportable dividends and interest somehow fails to find its way into
the income tax returns of millions of individuals. This reporting
gap of more than 10 percent of dividends properly includable on
individual income tax returns and a shocking 34 percent of interest
so includable is currently tolerated at a revenue cost to the
Treasury of about $1 billion per year. H. R. IO650, as passed by
the House of Representatives, would effectively close about 80
percent of this gap by providing for withholding at the source in
a manner similar to that which has applied to wages and salaries for
20 years. The withholding provisions of the House bill were strongly
opposed by groups of payors, much as withholding on wages and
salaries was opposed 20 years ago in Congress and in each of more
than 25 Sta";e capitals where, in the course of the past 14 years,
legislatures have succeeded in enacting withholding for wage and
salary incoEe.
This opposition was carried to the Senate Finance Committee
which decided to drop withholding in the bill as it reported it to
the Senate. In lieu of withholding the Senate bill provides for
stringent reporting requirements with respect to dividends and
interest. Under the terms of the Senate version of the bill payors
of dividends and interest are required to report to the Internal
Revenue Service and to the taxpayer amounts aggregating $10 or more
paid to any one individual during the year.
There is considerable difference of opinion as to the
effectiveness of the Senate bill's reporting requirements. Chairman
Byrd of the Senate Committee on Finance has stated, "I believe that
with an extension of the application of information returns, there is
a good possibility of collecting the tax on the presently nonreported
dividends and interest without imposing the burdens apparently inherent
in a withholding system." At a later point in his remarks before
the Senate on May 21, 1962, he elaborated by saying, "I believe that
the matching by the Government of Information returns against tax
returns will provide essentially the same check on interest and
dividend reporting as a withholding system, with one exception: the
information returns will be more effective in that they will indicate
the missing tax above the first bracket rate." These remarks suggest
that the reporting requirements will yield in the neighborhood of
$780 million a year, roughly the amount which the Treasury has
estimated would be produced by withholding. But the Treasury has
estimated that the amount realized will be closer to $240 million,
and the Staff of the Joint Committee on Internal Revenue Taxation has
effective
estimated as
that
withholding.
the reporting requirements will be only one-half as
- 5-
30 9
The dividend and interest reporting requirements of the Senate
bill clearly constitute an improvement that will reduce the gross
inequity involved in the fact that a large proportion of taxable
interest and dividends is now permitted to avoid its fair share of
tax liability. But it is highly unlikely that anything short of
collection at the source will do the job adequately. Opinions may
differ as to the proper definition of income for tax purposes, tax
rates, and other aspects of our income tax system, but few would
argue that the wholesale escape of interest and dividends from their
fair share of the tax burden can be tolerated if common justice is
to prevail in our tax structure.
Cooperatives, mutual fire and casualty insurance companies, and
mutual thrift institutions
The cooperative or mutual form of business organization, as
contrasted with the corporate or partnership form, has created tax
problems that have plagued Congress for more than a decade. The
bill deals directly with these problems as they relate to the tax
treatment of cooperatives and their patrons, mutual savings banks
and savings and loan associations, and mutual fire and casualty
insurance companies.
The bill recognizes that these institutions are actively engaged
in competition with organizations subject to ordinary business
taxation and consequently that they enjoy an unfair competitive
advantage. While taking cognizance of the fact that mutual and
cooperative institutions ordinarily depend upon retained earnings
exclusively, or almost exclusively, for the protection to creditors
and investors that is ordinarily afforded when business is done in
the corporate form by capital stock plus retained earnings, the
provisions of H.R. IO650 will remove gross inequities and restore
appropriate competitive relationships in the areas affected.
Expense accounts
The problems of deductible expenses for business entertainment,
travel, and business gifts have been a source of Increasing concern
to many people. Flagrant abuses have created the label, "expense
account society".
The bill now before the Congress contains important provisions
that will strengthen the hand of the Internal Revenue Service in
ending such abuses. They do not go nearly as far as the President
recommended last year, but they provide more safeguards than does the
present law which permits entertainment expenses to be deductible as
"ordinary and necessary business expenses" where a business purpose,
however remote, exists. The bill requires that all expenditures
for entertainment and related facilities, and for travel and gifts,
be substantiated by adequate records; it disallows entertainment
expenses unless they can be shown to be directly related to
309
- 6(the Senate added "or associated with") the active conduct of the
taxpayer's trade or business; and business gifts, generally, are
deductible only if the value of the gift does not exceed $25.
The House bill would restrict the deductibility of entertainment
expenses more than is suggested by the bill as amended by the Senate
Finance Committee and the language of that Committee's report.
Irrespective of which way the Congress finally moves between the
positions of the two bodies, distinct progress will have been achieved
in eliminating at least the worst of the existing expense account
abuses.
Capital gains on sale of depreciable property
When depreciable business property is sold the positive
difference between the proceeds of sale and the undepreciated basis
of the property is treated as capital gain for income tax purposes.
That part of the gain which represents the difference between the
undepreciated basis and cost has been charged against income taxable
at ordinary income tax rates through the taking of depreciation
allowances. Thus the opportunity arises for converting ordinary
income into gain taxable at far lower than ordinary income tax rates
when, upon the sale of the property, it turns out that depreciation
charges have exceeded the actual decline in value of the property.
The President, in his Tax Message of 196l, recommended that this
part of the gain, which actually constitutes recovery of excessive
depreciation, be treated as ordinary income for tax purposes.
Both the Ways and Means Committee of the House and the Senate
Committee on Finance rejected this recommendation as it affects real
property. But the bill as passed by the House and as it now stands
before the Senate follows the President's recommendation with respect
to personal business property. That is, after 1962 gain on the sale
of depreciable personal property will be taxed as ordinary income
to the extent of depreciation taken after December 31, 1961.
Enactment of this section of the bill has assumed new importance
and urgency with the recent liberalization of depreciation announced
by the Treasury. Failure to enact this section of the bill would
offer additional opportunity to convert ordinary income into
capital gains.
It seems certain that Congress will not deal this year with the
problem of real property. Until it does so, however, the abuses
available through the use of so-called real estate shelters for
purposes of tax avoidance will continue. Thus the problem with its
many complexities remains with us in this area. It is certainly to
be hoped that a solution can be found that will be recognized by the
major parties concerned as being adequate and equitable, preferably
in the next session of Congress.
310
- 7 Fiscal effects
The Treasury has estimated that H.R. IO650, as amended by the
Senate Committee on Finance, will involve an initial revenue loss of
$210 million in Its first full year of operation. This $210 million
represents the difference between the billion dollar cost of the
investment tax credit and approximately $800 million in revenue to
be provided by the other provisions of the bill. However, this
"gross" estimate neglects the fact that the enactment of the
investment credit will stimulate a higher level of investment and
consequently a larger gross national product and tax base. When this
factor is taken into account the bill as reported by the Senate
Finance Committee is seen to be in balance or better.
If the provision for withholding of tax on interest and dividends
contained in the bill as passed by the House should survive in the
Revenue Act of 1962, the full year gross effect of the bill on
Treasury tax receipts will be a revenue gain of well in excess of
$300 million per
year.
Administrative
Revision of Depreciation
In the area of tax policy in which It has administrative
discretion to act, the Treasury has gone forward with its long-awaited
program of revision of guidelines and rules for depreciation. This
major revision — which took effect July 12, 1962 — constitutes a
bold new approach to the tax treatment of depreciation. It involves
abandonment of the former Item life approach with its multitude of
complexities and annoyances. It provides the taxpayers with a far
greater element of freedom and flexibility in the area of tax
depreciation. It looks to the future in its emphasis upon
prospective technological change and obsolescence. Finally, it
provides clear-cut objective standards designed to produce uniformity
in the administration of depreciation.
The Treasury's new depreciation guidelines and rules, as
contained in Revenue Procedure 62-21, are the outcome of studies
begun in i960 and carried through with maximum intensity over the
course of the past year. As most of you are no doubt now aware, the
new approach involves the establishment of guideline classes and
lives for broad groups of assets. These groups are so designed that
depreciable assets of an individual firm will in most cases come
under no more than four or five guideline classes and lives.
Those assets that are commonly used by business In general, such
as office furniture, equipment, machines, and fixtures and
transportation equipment, may be depreciated over a guideline life
common to all industries. The machinery and equipment of Individual
industries are dealt with as a group for each broad category or
industry.
The guideline
will permit
more and
rapid
depreciation
of better than
70 percent lives
of existing
machinery
equipment.
311
- 8The new guideline lives are available as a matter of right to
taxpayers irrespective of their past practices or experience. For
a period of three years depreciation charges based upon the new
guideline lives or upon shorter lives previously justified will not
be challenged or disturbed. Even in the fourth year the taxpayer
need only demonstrate by means of a simple, liberal test that he is
moving in his replacement practices toward the use of a replacement
cycle equal or reasonably close to that suggested by the applicable
guideline life. After the completion of the first life cycle —
equal to the guideline life for the industry — a straightforward
objective test is provided for determining whether or not the life
being used for depreciation purposes by the taxpayer is appropriate.
Appropriate here means simply reasonable conformity with the
replacement policy pursued. As part of Revenue Procedure 62-21 the
Treasury has published reserve ratio tables which take into account
the rate of growth of the taxpayer's depreciable asset account, the
method of depreciation being used, and the depreciable life over
which the guideline class of assets as a whole is being depreciated.
The tables provide for considerable leeway, permitting the taxpayer
a large element of flexibility and taking into consideration factors
such as the existence of standby equipment and the irregularity
over time of replacement purchases.
The new depreciation guidelines will permit a potential increase
in depreciation charges of almost $5 billion per year. The Treasury's
estimate of the revenue cost of liberalized depreciation — $1.5
billion — takes into account the fact that not all of this potential
will be used to reduce tax liabilities. That is partly because some
firms will choose to retain present practices, foregoing the
opportunity to reduce taxable Income by increasing depreciation
charges, and partly because some of the potential increase in
depreciation will accrue to firms with zero or negative taxable Income.
The new guideline lives represent a reduction of more than
30 percent from existing Bulletin F suggested lives. They average
approximately 15 percent lower than lives now actually being used
in manufacturing industries. The reduction varies considerably from
industry to industry, depending upon present practices, prospective
technological change, and various economic factors affecting
prospective economic lives of depreciable assets.
Revision of tax lives and procedures for depreciable property
has long been desirable as a matter of equity to reflect more
accurately the influence of obsolescence on economic lives of capital
assets. Bulletin F guidelines were established 20 years ago on the
basis of replacement practices of the depressed prewar years.
Depreciation, designed to reflect the loss in value of plant and
equipment
over time,
is
a function
not alone
of
"wear
and
tear",
demand.
economic
also
of technological
Inputs,
competitive
progress,
conditions,
changes
in
and
relative
consumer
costs
taste
of
and but
- 9-
312
The Treasury is confident that through its favorable effects on
cash flow, expected rates of return, and the period for which funds
are placed at risk through investment in capital equipment,
liberalized depreciation will stimulate increased productive investment. Coupled with the investment credit, which it complements
closely, the new approach to depreciation will provide a strong and
lasting stimulus to the high rate of investment that is a major
requirement for accelerated economic growth. In combination they
will provide incentives to invest comparable to those available In
the rapidly growing industrial nations of Western Europe and Japan.
Further Goals of Tax Policy
This audience surely does not need to be reminded that taxes
importantly influence a wide variety of economic decisions and play
a significant role in determining the level of economic activity,
the distribution of income, and competitive business relationships.
Tax policies also affect the value of our currency, our balance of
payments, and the rate at whiqh our economy grows.
A fundamental objective of our tax policy must be the maintenance
of a tax system that permits us to meet our growing public needs.
Adequate revenues are required to maintain our defenses, support our
international commitments, provide the domestic public services
demanded of the Federal Government, and to finance these activities
in a manner that maintains confidence in the management of our
overall fiscal affairs.
Adequacy does not mean that revenues must always equal
expenditures. It refers, rather,to the capacity of the tax system
to supply revenues in the amounts necessary to finance expenditures
without adverse economic consequences. In some circumstances
revenues should exceed expenditures to produce a budgetary surplus;
in others, a deficit is appropriate.
Experience in the past three economic recoveries, including the
current one, suggests that in recovery our tax system tends to
result in the Government sector Imposing an excessively strong
dampening influence on the economy. This influence contributed
substantially to the abortive character of the 1958-1960 recovery.
It may be responsible as well for the slowlng-down of the current
recovery over the past nine months. In pursuing a more rapid rate
of economic growth the tax system should be so adjusted as to reduce
the fraction of the increased income generated by recovery that Is
absorbed by taxes, in order to ensure that a recovery's momentum is
not lost before full employment and full utilization of Industrial
capacity can be achieved.
W
JL. ••w'
- 10 Depreciation reform and the investment credit will certainly
contribute to a higher rate of growth in the economy. But more must
be done if this objective is to be fully realized. The rate at which
the economy can be expected to grow depends, at least in part, on
the rewards offered at the margin for personal effort, saving,
risk-taking, and productive investment. At the present time our
tax system, with individual income tax rates ranging from 20 to 91
percent, and a corporate rate of 52 percent, reduces these marginal
rewards excessively and thus weakens incentives. At the same time,
since opportunities are afforded to some to avoid these rates, the
tax system also diverts resources into activities which, while far
less productive than others when measured on a pre-tax basis,
provide a much higher after-tax return. Thus our rate of growth is
hampered because the tax system distorts the free flow of capital
and diverts the energies and ingenuity of Individuals from productive enterprise and activity to the intensive search for tax
shelters of various kinds.
This kind of diversion, while attractive to many individual
taxpayers and corporations, by definition reduces the efficiency with
which the economy operates. Maximum growth can be achieved only if
the fetters that now dull initiative and incentives and that tend
to discourage risk-taking and mobility are substantially loosened, if
not removed.
Opinions vary as to what constitutes fairness or equity In the
application of particular taxes. But, with due recognition for
variations in taxpayers' circumstances, the standard of horizontal
equity, under which persons with equal incomes and similar
circumstances should pay equal taxes, finds general acceptance as a
guiding principle.
A second criterion of equity -- "vertical" equity — requires
that as income increases the proportion of that income that is
paid In taxes should rise. The effectiveness and efficiency of our
income tax laws, under which we rely so heavily upon our traditional
system of voluntary compliance, depend upon a general belief that
each individual's share of the tax burden is just, and that others
are not escaping their fair share.
In some instances departures from uniformity and neutrality
interpreted in the "pure" sense may be appropriate means of
achieving important public purposes. They are justified only when
real and significant differences exist between taxpayers' situations,
or when there is no better way of attaining a compelling national
objective than by the tax route. Beyond this, the tax system should
apply uniformly and without discrimination between individuals,
between businesses, and between the ways in which similarly situated
Individuals choose to conduct their economic affairs.
91 4
- 11 Finally, simplicity is also a basic objective of tax policy.
In our complex modern society simplicity may frequently conflict
with other objectives. In evaluating our tax policies, however,
simplicity must always be near the head of the list. Unless it is,
the tax system may become virtually incomprehensible, and compliance
increasingly burdensome.
In accordance with the directive Issued by the President in his
Tax Message of April 1961, the Treasury is presently engaged in
preparing a comprehensive tax reform program. Studies are underway
on the manner in which existing tax provisions operate, their
effects on the economy, and on the distribution of tax liabilities.
These studies are designed to provide a factual and analytical basis
for tax reduction and tax reform proposals that will be consistent
with the Administration's general economic policy objectives.
One purpose of the present studies is to determine where and in
what manner the income tax base may properly be broadened and unwarranted special preferences eliminated. A more inclusive tax base,
together with the desired reduction in the proportion of total income
generated in the economy absorbed by the Federal tax system, will
permit significant tax rate reductions. Various possible changes
in the tax structure are being carefully evaluated in terms of their
prospective contribution to more rapid economic growth, more
efficient operation of our free enterprise economic system, tax
equity, neutrality, and simplification.
In addition, continuing study is being given to the most
feasible means of strengthening the contribution of the tax system
to the avoidance of recurrent recessions and the unemployment and
tragic waste and suffering that accompany them. Only if we can
succeed in preventing the periodic interruption of our economic
growth and progress will we succeed in achieving our full economic
potential as a Nation. To this end the President's proposal that
he be given discretionary authority to adjust income tax rates,
within prescribed limits and subject to Congressional veto, is
worthy of far more serious study and careful consideration than it
has thus far been accorded.
0O0
315
TREASURY DEPARTMENT
Washington
FOR RELEASE ON DELIVERY
REMARKS BY RICHARD E. SLITOR
CHIEF, BUSINESS TAXATION STAFF, OFFICE OF TAX ANALYSIS
AT THE ANNUAL CONFERENCE ON TAXATION OF THE
NATIONAL TAX ASSOCIATION
MIAMI BEACH, FLORIDA
THURSDAY, SEPTEMBER 6, 1962
2:30 P.M., E.S.T.
FEDERAL TAX TREATMENT OF DEPRECIATION AND OBSOLESCENCE
Introduction
In a discussion devoted to various fields of tax reform.
I enjoy an advantage over most of my fellow panelists. Whereas
they are dealing primarily with aspirations, in the depreciation
area one can speak of tangible accomplishment.
Revenue Procedure 62-21, announced by the Treasury early in
July, is one of the most significant documents ever issued on
the subject of tax depreciation.
This administrative reform provides new, shorter guideline
lives which supplant Bulletin "F" and new rules for their
application. The new Procedure is the outgrowth of decades of
criticism and dissatisfaction with tax allowances for depreciation. We can discount some of these expressions of discontent
as mere reflections of a wholly understandable — but disguised
desire for tax reduction. Nevertheless, until the recent
revision, there remained a solid basis for questioning the
realism and even-handedness of the tax depreciation system.
Tax Depreciation and the Investment Decision
Tax depreciation policy derives its major importance from
the magnitude of the depreciation deduction and its impact on
investment decisions. Depreciation is, of course, only one
D-595
91 G
\j JL '•*?
- 2 of many deductions used in determining taxable income. In
1959, corporate depreciation deductions (exclusive of amortization) amounted to about $20-1/2 billion or less than 3
percent of total compiled deductions of over $769 billion.
But since tax depreciation directly affects the rate of
recovery of capital invested in productive facilities, it
plays a key role in the tax environment as it bears on the
flow of investment required for modernization, growth, and
a vigorous free enterprise system.
Although it is a relatively small percentage of total
deductions, depreciation looms large in relation to net
earnings. In 1959, depreciation (exclusive of amortization)
claimed on corporate tax returns was about 44 percent of
corporate net income and 86 percent of net income after tax.
For 1962, corporate depreciation will be nearly 3 times
the amount of retained corporate earnings. The tax effect of
depreciation alone will exceed retained earnings as an
internal source of funds. The leverage which depreciation
charges exert on tax liabilities and the cash flow that is
a major factor in investment decisions is therefore apparent.
Inadequate depreciation slows the rate of capital
recovery, thus influencing the decision to take investment
risks. It also has the practical effect of raising the
effective rate of tax on business earnings since it imposes
a tax on what is in reality capital, not income. Since
even relatively small changes in the rate of investment mean
much in terms of net growth, adjustments in depreciation
rules have an important impact on the economy.
Basic Concepts
In simplest terms, depreciation is a method of recognizing
costs arising from the erosion of fixed assets by spreading the
cost of long-lived assets over their useful lives. Or, as a
well-known economist has put it, the manufacturer knows that
his machinery wears out, and that if his capital is to remain
unimpaired he must set aside something annually to replace it.
Not only does his machinery wear out; in a period of rapid
improvement and invention like our own, it fast becomes
antiquated and he must be prepared to discard it even before
it has ceased to be workable. 1/ The "something" the
manufacturer — or any other businessman — sets aside is
depreciation.
1/ F. W. T a u s s l g 7 ^
1, ^rd ed.
revised, page 7TI
91 7
- 3 This is a simple enough concept, but one which has
involved difficult problems of public policy. Computing
depreciation involves three basic aspects: the depreciable
basis or amount to be written off, the useful life, and the
time pattern for allocating cost over the service life.
All have been matters of controversy over the years.
If depreciation were not involved in tax computations
(or in the determination of utility rates) it would be
purely a matter of private concern to business firms and
their investors in determining their operating results and
financial position. In the absence of tax considerations,
it is demonstrable that depreciation, as such, has no
effect on a rational investment or replacement policy. As
one expert put it in 1941 before tax considerations became
as important as they are today, "Calculations of depreciation, on the other hand, are mere figures entered into
books. They do not affect either the machine or its
owner's financial position in any way, unless he thinks
they do and lets them affect his judgment...A good slogan
to remember is that, if one wishes to make a machine as
profitable as possible, one must do something to the
machine and not to the books..."1/
But tax deductibility for depreciation changes this
picture. The cash flow to the business from depreciable
investments is the sum of the net revenue from the asset
after taxes plus depreciation. This may also be expressed
as the sum of the net revenue computed without regard to
depreciation, less taxes on that amount, plus the tax value
of the depreciation deductions. At a 52 percent corporate
tax rate, a dollar of depreciation deductions produces more
current cash flow to the corporation than a dollar of net
income.
1/
Gabriel ^riJ7~¥reinreTcK~, ^ThlTTheory and General
Principles of Depreciation," a paper presented at
the 88th Annual Meeting of the American Society of Civil
Engineers, New York, January 16, 1941, Waverly Press,
Baltimore, page 1.
_kHistorical Background
From the inception of the modern income tax under the
Sixteenth Amendment in 1913> provision has always been made for
the deduction of a reasonable allowance for depreciation.
1/ The basic statute merely provides that there shall be allowed
as a depreciation deduction a reasonable allowance for the
exhaustion, wear and tear (including a reasonable allowance for
obsolescence) of property used in the trade or business or held
for the production of Income. 2 / However, the administrative
approach under the statute has undergone redirections from
time to time.
While business accounting for the erosion of fixed assets
prior to the present century was varied and on the whole
primitive, there is no doubt that the availability of depreciation deductions for income tax purposes had a marked effect in
improving and rationalizing the accounting practices of industry
with respect to depreciation.
Pre-1934 Treatment
For a considerable period prior to 1934 taxpayers had
enjoyed a certain de facto freedom in the rate at which they
could write off assets. Depreciation deductions were generally
permitted to stand undisturbed. Through most of this period,
tax rates were relatively low — a top of about 12-1/2 percent
for corporations and 25 percent for individuals.
In the search for revenues to cope with the Great
Depression, a subcommittee of the Ways and Means Committee
in 1933 recommended as a means of increasing tax revenues
that for the next 3 years depreciation allowances be reduced
by a flat 25 percent.
1/In the Civil War IncolmeTax in effect from "186X1:6 1872,
depreciation was not mentioned. In the Income Tax Act of
1894, declared unconstitutional in the famous Pollock
decision of 1895, "all estimated depreciation oTTvalues"
was expressly disallowed. With the adoption in 1909 of a
1 percent corporate excise tax measured by net income, the
need for capital recovery allowances was recognized. The
1909 Act permitted a "reasonable allowance for the depreciation of property." See historical summary in Eugene L. Grant
and Paul T. Norton, Jr., Depreciation,The Ronald Press, New
York, 1949, Chapter 11, and George Terborgh, Realistic
Depreciation Policy, Machinery and Allied Products Institute,
1954, pages 2-3, and 12.
2/Specific language indicating that depreciation included a
reasonable allowance for obsolescence was introduced by the
Revenue Act of 1918.
- 5 -
319
Post-1934 Developments
This countersuggestion was accepted by the Congressional
Committees and the Treasury proceeded to issue its well-known
T.D. 4422 and Mimeograph 4170. The major effect of these steps
was to place a greater burden of proof of the reasonableness of
depreciation deductions on the taxpayer. The administration of
depreciation was considerably tightened, more detailed records
and schedules were required of the taxpayer, and depreciation
accounts and tax lives were re-examined and adjusted.
A
Bulletin "F" with detailed schedules of suggested useful
lives which were to survive until recently was issued in 1942.
The 1942 Bulletin "F" lives represented an expansion and frequently a lengthening of useful life schedules contained in a document entitled Depreciation Studies issued in January 1931 as a
companion to the 1931 Edition of Bulletin "F". The 1931 and
previous 1920 editions of Bulletin "F" had not actually contained
useful lives but had outlined rules and principles for computing
tax depreciation and obsolescence.
Reform Proposals
In the following years, the administrative and legislative
treatment of depreciation became a constant target of criticism.
There was persistent pressure for liberalization to correct what
was regarded as underdepreciation, as a source of needless
administrative friction, as failure to take advantage of the
incentive potentialities of more accelerated tax write-offs —
or all these things.
Remedial proposals took various forms:
1. Proposals to correct underdepreciation by sanctioning
new formulas, such as a more liberal declining-balance method
to concentrate more capital recovery in the early years.
2. Proposals to shorten service life estimates as
compared with Bulletin "F" and current practices.
3. Proposals to stimulate investment through outright
acceleration beyond realistic depreciation cost concepts, such
as
5-year amortization or initial allowances.
4. Proposals for greater flexibility in the administration of depreciation, to give the taxpayer greater
discretion, provide a zone of administrative tolerance, attach
greater weight to management decisions, minimize controversies
over moderate differences — and incidentally to liberalize
timing of allowances.
'^ 0 f s
_, 6 5. Replacement cost proposals, generated by the substantial rise in prices during and after World War II,
intended to close the gap between the erosion of productive
equipment measured in current dollars and historic cost
depreciation.
The beneficial incentive effects of acceleration were seen
in various lights. Stress was alternatively placed on:
1. Increasing the internal supply of capital funds.
2. Shortening the payout period.
3. Reducing risk.
4. Giving greater assurance of tax benefit from
depreciation.
5. Removing the mesmeric influence of residual book
value in delaying obsolete asset retirements.
6. Providing the equivalent of an interest-free loan
by Government to businesses investing in equipment.
7. Increasing participation by the Treasury in the
capital requirements and risks of investment, in line with
the tax share of net earnings.
8. Inducing a preference for new, modern equipment over
expenditures for repairs and refurbishing to eke out the life
of the old.
The temporary increase in capital recovery allowances
resulting from the accelerated amortization programs of
World War II and the Korean period eased the stringency.
But the termination of these programs and the run-off of
allowances under existing certificates were to create new
pressures which left their mark on depreciation policy.
New Liberalized Methods and Administrative Treatment
On the eve of the 1954 Code changes, a more liberal
administrative attitude was formalized in Revenue Rulings
90 and 91. The tendency of these rulings was to lighten
the compliance burden on the taxpayer by indicating that
the Internal Revenue Service would generally not disturb
depreciation nor propose adjustments unless there was a
clear and convincing basis for a change.
- 7 The Internal Revenue Code of 1954 specifically authorized
the use of the double-declining balance and the sum of the
years digits methods for computing depreciation with respect
to new property acquired after December 31, 1953. The 1954
Code did not, however, make any changes with respect to the
determination of useful lives nor, of course, in the historic
cost basis of depreciation.
Reaction to the 1954 Code Changes
What was achieved by the 1954 Code liberalization in the
way of meeting persistent criticisms of chronic underdepreciation and in the form of increased investment and modernization?
In spite of glowing expectations, business reaction was somewhat reserved. The general attitude seemed to be that the new
methods were a step in the right direction but inadequate. On
the other hand, some academic critics labeled them as outrageous
giveaways and others damned them with the faint praise that they
were a mild incentive with substantial revenue cost.
Adoption of the new methods by business progressed slowly
and there was considerable doubt and speculation for several
years as to exactly what was happening in this area and why
adoption was not 100 percent. The Treasury Depreciation Survey
questionnaire disclosed that as late as 1960 only 70 percent
of the large corporation respondents and 57 percent of the
smaller firms were using one or more of the new methods for
any significant portion of their property accounts. However,
in manufacturing industries, a substantial portion — about
75 percent — of new property acquisitions since 1953 were
being depreciated under the new methods.
Looking at the reaction of the economy in terms of plant
and equipment expenditures, the results were not immediate and
dramatic. But business capital expenditures for new plant and
equipment acquired additional momentum year by year — whether
because of the depreciation changes or because of the overall
strong level of demand in the economy beginning in 1955 is
still a matter of dispute. In any event, business capital
outlays in 1957 reached a record of about $37 billion, a rate
subsequently unequalled even in dollar terms until 1962. Even
in 1962 business capital expenditures as now projected will
fall short in real terms of the 1957 level.
But investment fell sharply in the recession of 1958, and
as the decade of the 1950's wore on, business capital expenditures continued to lag behind the levels required for vigorous
growth. The signs of lethargy that are a major challenge to a
free economy were evident. Criticisms of the depreciation
provisions were renewed.
322
- 8
Attempts to revise Bulletin "F"
Following the 1954 Code liberalization, the Treasury
in the years 1956-58 undertook studies looking towards
the modernization of Bulletin "F". Submissions from
taxpayers were inviteofand a study team of Internal
Revenue Service personnel and outside experts was assigned
to the task of developing new suggested lives. However,
these studies did not come to a successful fruition.
The general approach of the study and the limited
information available did not support a meaningful revision
of depreciable lives which gave adequate recognition to
obsolescence. As indicated by Treasury officials at the
time, another reason for the decision not to reissue
Bulletin "F" was that many taxpayers had succeeded in
negotiating shorter lives and the reissuance of a new
Bulletin "F", even with somewhat more up-to-date service
"lives, might lead to an unfortunate renewal of emphasis on
the prescribed schedules. Moreover, it was apparent that
the availability of capital gain treatment on profits from
the disposition of overdepreciated property constituted a
major stumbling-block in the path of real depreciation
reform.
Depreciation provisions and the competitive position of U. S.
"Business
As the rest of the world experimented widely and
successfully with more liberal depreciation and investment
incentive provisions, the United States allowances came to
be regarded as the most limited in the world. It was
increasingly borne in upon Americans that the United States
economy does not operate in isolation and that our depreciation and investment incentive provisions have a direct
bearing upon the competitive position of U. S. producers in
markets both at home and abroad.
Treasury studies the basis of new reforms
The spirit of reform was in the wind. After considerable
planning and testing, the Treasury in July 1960 launched a
survey of tax lives, depreciation practices, and opinions
covering some 2,700 large corporations and as part of the same
study sought views on depreciation reform of some 7,600
smaller businesses. The survey produced usable data on service
lives and practices from nearly 2,000 large corporations
holding about half the corporate depreciable property in the
country.
- 9 This survey was supplemented with statistical data
from a sample of 50,000 corporation tax returns for 1959,
and engineering studies of 6 basic industries (aircraft,
automobiles, electrical machinery and equipment, machine
tools, railroads, and steel) as well as a special study
of the textile industry.
A revision of suggested depreciable lives in the
various branches of the textile industry was announced in
the fall of 1961 and spring of 1962 in advance of general
depreciation reform. Bulletin "F" lives for this industry
were shortened by about 40 percent and actual tax lives in
use were shortened by some 12 to 15 percent from generally
prevailing practice. Following the textile revisions, work
then went forward with all possible speed on the general
reform of both guideline lives and practices for all of
American business.
Basic reform of 1962: New guideline lives and rules
Revenue Procedure 62-21, made effective July 12, 1962,
provided a basic, historic reform in both guideline lives
and the administration of depreciation for tax purposes.
6£?
The fundamental concept underlying the new Procedure
is that the depreciation claimed by a taxpayer will not be
disturbed if there is an overall consistency between the
depreciation schedule he uses and his actual practice in
retiring and replacing his machinery and equipment.
Demonstration of this overall consistency will be based upon
the application of an objective test — the reserve ratio —
used in conjunction with broad classes of assets.
Guideline lives are established for each of these
classes — in all cases shorter than those previously
suggested for the guideline class as a whole 1/ — to assist
in the determination of appropriate depreciation. The broad
class approach is designed to achieve reasonable overall
results, simplify administration and compliance, and minimize
controversy over specific items or narrow classes of assets.
Transitional provisions permit the use of the new
guidelines without challenge for a period of at least 3 years.
T7
Lives for buildings, with the exception of farm buildings,
were not significantly changed from Bulletin "F" levels.
99^
- 10 A central objective of the new Procedure is to facilitate
the adoption of depreciable lives even shorter than those set
forth in the new guidelines — and shorter than those currently
in use, even where current usage is already below the guidelines — provided only that certain standards are met and that
subsequent replacement practices are reasonably consistent with
the tax lives claimed.
The Procedure applies to all returns due on or after the
July 12 effective date. This means that it is applicable to
taxable years of corporations beginning on or after May 1,
1961 and taxable years of individuals and partnerships
beginning on or after April 1, 1961. The new guideline lives
and procedures are applicable to all existing assets as well
as future acquisitions.
The new Procedure not only shortens previously suggested
guideline lives by some 30 to 40 percent, but also provides
a simplified administrative framework based on objective rules.
However, the new administrative rules do not supersede existing practices for those taxpayers who wish to follow the
older methods.
Treasury estimates indicate that the new guidelines will
permit more rapid depreciation than is now being taken on 70
to 80 percent of the machinery and equipment of American
business and agriculture. They will increase potential depreciation deductions by $4.7 billion and expected actual deductions by $3.4 billion in the first full year. Over-all, this
represents a potential increase of 17 percent in depreciation
deductions on machinery and equipment and an over-all increase
of 13 percent in depreciation deductions on all property,
including buildings.
Shorter Lives
The new shorter lives provide a significant speed-up in
the rate of write-off of productive equipment.
In the aerospace industry, for example, manufacturing
equipment may be written off under a new guideline life of
8 years, as compared with 15 years under Bulletin "F" and
10 years under actual previous practice. An electronics
producer also may use an 8-year life, for which there is no
Bulletin "F" counterpart.
325
-nA manufacturer of chemicals and allied products may
depreciate his production machinery and related equipment
over a guideline life of 11 years, as against 15 to 22 under
Bulletin "F" and 13 years under recently prevailing practice.
The equipment of manufacturers of metal working machinery
may be depreciated over 12 years, compared with 17 to 20 years
under Bulletin "F" and 16 years in prior practice.
For the manufacturing industries as a whole, the new
guidelines on production machinery and equipment average
13 years, compared with 19 years in Bulletin "F" and 15
years in previous practice.
Greater Recognition of Obsolescence and Economic as
Distinguished from Engineering IXves""
The new lives give greater recognition to obsolescence.
They represent the current practice of the most progressive
segment of industry. Therefore, they more closely represent
economic lives under present conditions, as distinguished
from physical or engineering lives. In this sense they are
a foward-looking measure of the depreciation period rather
than a backward-looking reflection of the historic past.
Fresh Start to Escape the Vicious Circle of Long Historic Lives
The new guidelines coupled with the transition rule permit
a firm beleaguered with excessively long lives to escape from
its past and the vicious circle which results when slow tax
write-offs delay replacement and slow replacement in turn builds
up a record of long physical lives. A fresh start for all
companies is encompassed in the three-year transitional rule
which will permit unchallenged use of the new guidelines for
three years and continued use thereafter providing only that
continuous progress is mad© in bringing replacement practice
into line with the depreciation taken.
Guideline Lives Based on Broad Asset Classes
The new Procedure abandons the old Bulletin "F" approach
with its emphasis on detailed asset l i v e s . T h e 1 9 5 2 edition
of
Bulletin "F" contained some 5,000 item lives. Instead,, the
newProcedure sets forth four major groups of guidelines. The
first applies to assets such as office equipment, cars and
trucks, and buildings that cut across industry lines. The
other three cover, respectively, the broad classes of productive
equipment of the non-manulacturing industries, manufacturing,
- 12 -
'IpQ
and transportation, communications, and public utilities.
These four groups together comprise 54 guideline classifications and, counting additional classes in some industries,
prescribe approximately 99 guideline lives. This simplified,
compressed system of guideline lives is contained within 10
pages of the booklet Depreciation Guidelines and Rules, as
compared with the 66 pages which Bulletin "F" required to
accomplish this task.
The emphasis in this broad class approach is on
achieving a reasonable overall result rather than itemby-item accuracy.
For most taxpayers, all equipment and facilities will
be covered by four or five guideline classes. Office
furniture and equipment would be depreciated in Group One,
Class 1, subject to a 10-year life. Automobiles and trucks
would be covered by Group One, Class 2, with lives of 3 and
4 to 6 years, respectively. Buildings would be covered by
Group One, Class 4. All other assets would, in most cases,
especially in manufacturing, be covered by just one or two
additional guideline classes.
While the broad class approach has similarities to the
Canadian system, it is more flexibly tailored to the requirements of particular industries. Moreover — in contrast with
the Canadian system — it does not impose the guideline class
lives as rigid minimums. It rewards the taxpayer with a more
dynamic equipment policy for whom hard and fast guidelines
would be unfair and discouraging.
Reserve Ratio Test
In many situations under Revenue Procedure 62-21, the
use of an objective standard for determing the appropriateness of the depreciation taken comes into play. This
standard is the reserve ratio, which is computed by dividing
the depreciation reserve for a particular class of assets by
the original cost (or other basis) of these assets.
The reserve ratio test measures the relationship between
tax lives and replacement practice. The reserve ratio test
is based on the elementary fact that for a taxpayer with a
stabilized account with no growth, in which assets are depreciated, for example, over 10 years and replaced in each
instance after 10 years, the accumulated reserve on the
straight-line basis will be 50 percent of the gross property
account. Thus, a 50 percent reserve reflects consistency
3??
- 13 between tax life and retirement practice in that case. This
percentage norm will vary with the rate of growth (or average
elapsed age) of the account, the life used, and the depreciation method. A higher percentage than the norm indicates
slower replacement than the tax life used; a lower percentage,
a faster replacement practice.
Use of the reserve ratio test and its application to
broad classes of assets will compare tax lives and replacement practice on a comprehensive basis with the objective
of achieving a reasonable overall result. It will therefore
end preoccupation with the determination of specific item
lives, which has burdened both taxpayers and the Internal
Revenue Service without necessarily achieving meaningful
improvement in the fairness or realism of depreciation
allowances.
The reserve ratio test may be used by the taxpayer as
a means of automatically justifying his right to follow the
depreciation practices he is using. It will, however, be
used only in conjunction with established standards as a
basis for imposing longer lives than those the taxpayer
considers appropriate. Where the reserve ratio test is not
met, the taxpayer will always be allowed, as at present,
to demonstrate the reasonableness of the depreciation
claimed on the basis of all the pertinent facts and
circumstances.
The reserve ratio test embodied in Revenue Procedure
62-21 differs significantly from the rough rules of thumb
which have in the past sometimes been used. It is more
carefully designed than former tests based on the same
general concept. It is also more flexible. It takes into
account the inevitable deviations from a theoretical norm
by providing a range within which the reserve ratio may
vary, for example, because of retention of fully depreciated standby capacity, without signalling a possible need
for adjustment of tax lives.
The margin of tolerance contained in the Reserve
Ratio Table encompasses rates of replacement as much as
20 percent slower than the tax life used but only 10 percent
faster. Thus the reserve ratio will more quickly indicate a
taxpayer's right to faster depreciation writeoffs than the
possibility that longer tax lives should be used.
32S
- 14 Another factor making for liberality in the reserve ratio
test is the fact that the percentages in the Reserve Ratio Table
set forth in the Procedure assume no dispersion in item or
component lives around the average tax life used. As those
who are familiar with depreciation accounting know, dispersion
with the consequent offset against the reserve account of
retirement losses on items with below average lives, results
in a lowering of the reserve ratio. Disregard of this factor
automatically yields a larger tolerance in the upper limit of
the reasonable reserve ratio range.
Transition Rule
As previously indicated, the Procedure provides a
transition rule which comprises two aspects.
3-Year Moratorium
The first, which we may call the 3-year moratorium, is
the rule that for taxpayers using lives at least as long as
the guideline life (and also taxpayers using previously
established shorter lives) 1/ the reserve ratio test is
presumed to be met for the first 3 years under the new
Procedure. This permits unquestioned use of these lives
for the 3 years.
Period Equal to Guideline Life Allowed to Align Replacement
Practice with Tax Life
The second, which we may call the replacement cycle
transition, provides that use of the guideline life or
equivalent — automatically allowed at the outset — will
continue to be accepted unless there are clear indications
that the taxpayer's replacement practices do not conform
with the depreciation claimed and are not even showing a
trend in that direction. Thus, even after the 3-year
moratorium, the taxpayer will be given a period of years
equal to the guideline life, commencing with the first year
to which the new Procedure applies, to bring his reserve
ratio within the designated reasonable range, provided the
ratio is moving towards the appropriate limit during this
period. Consequently, in the fourth year the taxpayer's
depreciation deductions will not be disturbed provided only
that his reserve ratio is either within the designated range
or the gap between his ratio and the upper limit is lower
than it was in at least one of the three preceding years.
This rule will continue to apply until a period equal to the
guideline life has elapsed. For example, if a taxpayer is
using a 12-year guideline life, he would be allowed a period
of 12 years, beginning with the first year under Revenue
1/ Either by prior usage or by acceptance on auait by the
"" Internal Revenue Service
99Q
- 15 Procedure 62-21, to reduce his reserve ratio to within the
range. Thereafter, the taxpayer will be expected to have
demonstrated consistency between his tax life and his
replacement practice by a reserve ratio within the upper
limit of the designated reasonable range for his circumstances.
Guideline Lives not Minimums
The guideline lives are not minimums. Shorter lives
which have been established or which may in the future be
justified will be permitted.
A taxpayer who wishes to move for the first time below
the guideline life or to reduce further an already below
guideline life may do so automatically if his reserve ratio
for the preceding taxable year is below the lower limit of
the reserve ratio range and he has been using the life he
wishes to reduce for at least one-half a replacement cycle.
The new life to which he can move must, of course, be the
life indicated as appropriate by the Adjustment Table which
is provided as part of the new Procedure. The transition
and reserve ratio rules applicable in other situations are
similarly available to this taxpayer.
Reserve Ratio Test Not Exclusive
The reserve ratio test may be used to justify the tax
lives in use. But it will be used only in conjunction with
established standards. If the reserve ratio test is not
met, the taxpayer will always be allowed, as at present,
to demonstrate the reasonableness of his depreciation on
the basis of all the pertinent facts and circumstances.
Taxpayers who do not meet the prescribed reserve ratio
tests for moving to a new shorter life below the guideline
life may also demonstrate that they are entitled to the
shorter lives on the basis of all the relevant facts and
circumstances.
Key facts, among others, are: (1) that the taxpayer
(other than a public utility) is using the same depreciable
life he is claiming for tax purposes on his own books and
(2) that the taxpayer has a history of following replacement
practices consistent with the depreciation allowances claimed.
- 16 Abolition of Penalty Rates
The new Procedure provides specifically for adjusting
depreciable lives which prove
to be substantially out of
line with the actual replacement practice of the taxpayer.
Adjustment tables are provided which indicate how much
adjustment upward or downward is called for.
In general, these adjustments lengthen or shorten the
class life where the reserve ratio is excessive or deficient —
as the case may be — to a life approximately consistent with
the replacement practice which the taxpayer's reserve ratio
indicates he has been following.
"Penalty rates" which in the past have been applied to
correct accumulated past errors over a brief span will no
longer be imposed.
Continuing Revision
The Treasury has indicated that the experience under the
new lives and rules will be watched carefully, and periodically
revised to maintain tax treatment of depreciation and
obsolescence in close keeping with current conditions. The
"lag" which developed under the old Bulletin "F'will not be
repeated.
Benefits for Small Businesses
The new guideline system will be of important benefit to
new businesses and to newly established guideline classes of
older businesses. It has frequently been said that the small,
new business, more than any other, has been subject to the
Bulletin "F" straitjacket.
Since the very structure of the reserve ratio will mean
that starting reserve ratios will be low and will remain low
for a period of years, new businesses in effect will be
permitted generally to use the new guidelines for the first
replacement cycle.
The tangible help to small businesses is shown by the
estimates of $80 million tax reduction in the first year
under the new Procedure for the service industries, $150
million for whoesale and retail trade, and $90 million for
agriculture.
33,
- 17 Benefits to Sellers of Capital Goods
Sellers of machinery and equipment will find that the
new shorter guidelines are an important factor in increasing
their orders for new equipment. The fact that a machine tool,
for example, may generally be written off over 12 years
instead of 15 or 20, will be a real factor in the sales
potential.
Other Developments
A discussion of the tax treatment of depreciation would
not be complete without reference to important corrective
and simplifying provisions of the Revenue Act of 1962.
One is a provision removing capital gain treatment on
profit from the sale of depreciable property (other than
buildings) to the extent of depreciation deductions on the
property for the period since December 31, 1961. This
change is designed to deal with situations where depreciation exceeds the actual decline in value of the property
and has the effect of creating an artificial gain on resale.
Such overdepreciation has the result, familiar to experts
in the tax field, of converting ordinary income into
capital gain for tax purposes. The correction contained
in the Revenue Act of 1962 is of great importance to the
recent liberalization of depreciation since, in the absence
of this safeguard, faster depreciation might lead in many
instances to greater conversion of ordinary into capital
gain, handicapping efforts towards a flexible administration of depreciation.
The other deals with the problem of salvage value which
has long plagued depreciation policy. Under this provision,
salvage to the extent of 10 percent of the cost may be
disregarded in computing depreciation on personal property,
effective for taxable years beginning after 1961. This will
simplify compliance and facilitate the administration of the
new depreciation guidelines and rules.
Conclusion
Decades ago, Alfred Marshall, one of the wisest
economists of the 19th Century, summed up the substance
of depreciation problems in a few sentences which have
well withstood the test of time.
332
- 18 "Almost every trade", he wrote, "has its own difficulties
and its own customs connected with the task...of allowing for
the depreciation which...capital has undergone from wear-andtear, from the influence of the elements, from new inventions,
and from changes in the course of trade....And people whose
minds are cast in different moulds or whose interests in the
matter point in different directions, will often differ widely
on the question what part of the expenditure required for
adapting buildings and plant to changing conditions of trade
may be regarded as an investment of new capital; and what ought
to be set down as charges incurred to balance depreciation,
and treated as expenditure deducted from the current receipts,
before determining the net profits or true income earned by
the business." 1/
In his General Theory in 1936 Keynes had occasion to
comment on depreciatTon"Tn the United States. He stressed
a point which we may well be reminded of now. That is the
fact that depreciation allowances are not automatically
matched by investment but are actually a form of business
saving. If real investment does not keep pace with these
financial provisions for replacement, they may constitute
a heavy drag on the economy, its early recovery from a slump,
and its long-terra growth.
Checkered as it is, the history of Federal tax treatment
of depreciation as a whole discloses a creative process.
Today we have liberal up-to-date lives, combined with methods
which permit recovery of two-thirds of the cost within the
first half of a realistic life estimate. We also have
objective rules which, among other advantages, give an
initial liberal presumption in favor of the slow replacer
but apply a bit of spur to the laggard firm.
The investment credit provided by the Revenue Act of
1962 is in substance an extention of tax depreciation policy.
This credit permits a firm to deduct from its taxes 7 percent
of the cost of its machinery and equipment purchases. In
combination with the investment credit, which it complements,
the new approach to depreciation will provide a strong and
lasting stimulus
to Principle
investment of
that
is neededEighth
to speed
up
TTTvlfred
Marshall,
Economics,
Edition
page 354, n.
\) O *~/
- 19 -
economic growth. These two aspects of depreciation reform
together will provide rates of capital recovery and incentive
to invest comparable to these available in the rapidly growing
industrial nations of Western Europe and Japan.
While realistic depreciation will make a great contribution to the economy, it should not, in my opinion, be regarded
as a panacea for our tax and economic problems. Economists
and businessmen have only begun to scratch the surface of
the economics of the investment decision and how it is
influenced by the interplay of taxation and capital recovery
allowances. Moreover, beyond this, there remains a whole
chapter to be written on the interaction of tax depreciation
and investment incentive measures with fiscal and monetary
policies designed to assist the free economy not only to
survive and prosper, but to outdistance competitors. We
will need to continue every effort to restructure the tax
system to encourage modernization and growth. The program
of tax reduction and reform to be recommended next year
has that as a basic aim.
334
and exchange tenders will receive equal treatment. Cash adjustments will be ma
for differences between the par value of maturing bills accepted in exchange
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 l
from the sale or other disposition of Treasury bills does not have any specia
treatment, as such, under the Internal Revenue Code of 1954. The bills are sub
to estate, inheritance, gift or other excise taxes, whether Federal or State,
are exempt from all taxation now or hereafter imposed on the principal or int
thereof by any State, or any of the possessions of the United States, or by an
local taxing authority. For purposes of taxation the amount of discount at whi
Treasury biHs 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 19
the amount of discount at which bills issued hereunder are sold is not consid
to accrue until such bills axe sold, redeemed or otherwise disposed of, and su
bills are excluded from consideration as capital assets. Accordingly, the owne
of Treasury bills (other than life insurance companies) issued hereunder need
clude in his income tax return only the difference between the price paid for
bills, whether on original issue or on subsequent purchase, and the amount act
received either upon sale or redemption at maturity during the taxable year f
which the return is made, as ordinary gain or loss.
Treasury Department Circular No. 418 (current revision) and this notice, pre-
scribe the terms of the Treasury bills and govern the conditions of their .iss
Copies of the circular may be obtained from any Federal Reserve Bank or Branch
. 2 -
^WliJaM:^
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.
Immediately after the closing hour, tenders will be opened at the Federal
Reserve Banks and Branches, following which public announcement will be made by
the Treasury Department of the amount and price range of accepted bids. Those
submitting tenders will be advised of the acceptance or rejection thereof. The
Secretary of the Treasury expressly reserves the right to accept or reject any
or all tenders, in whole or in part, and his action in any such respect shall be
final. Subject to these reservations, noncompetitive tenders for $200,000 or
less for the additional bills dated
ing until maturity date on
$100,000 or less for the
" (20)
June 14, 1962
December 15, 1962
, ( 91
days remain-
) and noncompetitive tenders for
182 -day bills without stated price from any one
i^r
bldder 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
Banks on September 13, 1962
, in cash or other immediately available funds or
(2SJ
in a like face amount of Treasury bills maturing
September 15. 1962
Cash
Jk^B-gfefe-fe:
33
.'XQ:9m*:m:*fMM9j*j.
TREASURY DEPARTMENT
Washington
FOR IMMEDIATE RELEASE,
September 5, 1962
XXXX)gXXXXXXXXXj^pCgXX}OCXXXXXXXXXXX
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 $ 2,000,000,000
or thereabouts, for
m
cash and in exchange for Treasury bills maturing September 15, 1962 , in the amount
of $ 1,900,696,000 , as follows:
91 -day bills (to maturity date) to be issued September 15, 1962 ,
w* TO
in the amount of $ 1,500,000,000
—w
or thereabouts, represent-
.
ing an additional amount of bills dated June 14, 1962
,
amount of $ 700,118,000
, the additional and original bills
"
182
p0$
m
to be freely interchangeable.
and to mature December 15, 1962 , originally issued in the
-.day bills, for $ 700,000,000
, or thereabouts, to be dated
September 15, 1962 , and to mature
—
(33?
March 14, 1963
,
QQD)
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, $50,000, $100,000, $500,000 and
$1,000,000 (maturity value).
Tenders will be received at Federal Reserve Banks and Branches up to the
Daylight Saving
closing hour, one-thirty p.m., Eastern/^Q£SSXM time, Monday, September 10, 1962
im
~
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
•ui*.m>:>.*r»m.M!MLiimjMi± m .
im^pmiumrmm.mKima
W A S H I N G T O N , D.C.
September 5, 1962
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
$ 2,000,000,000, or thereabouts, for cash and in exchange for
Treasury bills maturing September 13,1962, in the amount of
$1,900,696,000, as follows:
91-day bills (to maturity date) to be issued September 13, 1962,
in the amount of $1,300,000,000, lor thereabouts, representing an
additional amount of bills dated June 14, 1962,
and to
mature December 13,1962, originally issued in the amount of
$700,118,000,
the additional and original bills to be freely
interchangeable,
182-day bills, for $700,000,000, or thereabouts, to be dated
September 13, 1962,and to mature March 14, 1963.
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, $50,000, $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 p.m., Eastern Daylight Saving
time, Monday, September 10, 1962.
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
D-596
or
trust company.
,
- 2 Immediately after the closing hour, tenders will be opened at
the Federal Reserve Banks and Branches, following which public
announcement will be made by the Treasury Departmment of the amount
and price range of accepted bids. Those submitting tenders will be
advised of the acceptance or rejection thereof. The Secretary of
the Treasury expressly reserves the right to accept or reject any or
all tenders, in whole or in part, and his action in any such respect
shall be final. Subject to these reservations, noncompetitive
tenders for $200,000 or less for the additional bills dated
June 14, 1962,
(91-days remaining until maturity date on
December 13, 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 Banlson September 13, 1962,
in cash or other immediately available funds or in a like face
amount of Treasury bills maturing September 13,196a 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
0O0 the taxable year for which the
sale or redemption at maturity during
return is made, as ordinary gain or loss.
Treasury Department Circular No. 4l8 (current revision) and this
notice prescribe the terms of the Treasury bills and govern the
conditions
any Federalof
Reserve
their Bank
issue.
or Branch.
Copies of the circular may be obtained from
TREASURY DEPARTMENT
WASHINGTON, D.C.
FOR IMMEDIATE RELEASE September 5, 1962
ADVANCE REFUNDING OFFER
The Treasury is offering holders of $26.8 billion of certificates and
notes maturing February 15, 1965 and May 15, 1965 the right to exchange them
for either or both of the following new securities:
5-5/4$ notes due August 15, 1967
4$ bonds due August 15, 1972
The issues eligible for exchange are considerably closer to maturity than
the eligible issues in earlier advance refundings. The Treasury*s objective
in making this offer is to reduce the extremely congested maturity schedules
of February and May 1965 and to improve the structure of the outstanding debt.
By refunding these maturing securities in two stages, the Treasury will also
assist the smooth functioning of the money and capital markets.
In February 1965, three issues totalling $15.5 billion mature, $9.4 billion
of which is held by the public and the remaining $5.9 billion by the Federal
Reserve and Government Investment Accounts. In May 1965, three issues totalling
$15.5 billion mature, $9.8 billion of which is held by the public and the remaining
$5.7 billion by the Federal Reserve and Government Accounts.
The offering is designed to be attractive to investors. Market yields on the
new issues, as summarized in paragraph 11 below, compare favorably with those on
outstanding issues of comparable maturities on the date of this offering. After
giving effect to the difference between the present and the offered coupon rates,
and to the payments that will be made by the Treasury to subscribers in further
adjustment of interest differences, the effective yields on the new notes will
range between 5.80 and 5.85$; the effective yields on the new bonds will range
between 4.05 and 4.07$.
The reinvestment return to holders for the period of the extension would
also appear to compare favorably with prospective yields that might be obtained
on reinvestment at the time these six outstanding securities are scheduled to
mature. The new 4 year 11 month notes will provide yields for the extension
period of 5.89$ or 5.90$ for holders of February maturities and 5.94$ to 5.97$
for May holders. The new 9 year 11 month bond will provide a yield for the
extra period of holding equivalent to 4.11$ or 4.12$ for the subscribers who
turn in February maturities and 4.15$ or 4.16$ for those who turn in May
maturities.
The transfer of old for new securities will not be treated as a sale and
purchase for tax purposes, thereby avoiding Immediate charging of book losses
on the securities being accepted by the Treasury in exchange for the new issues.
D-597
338
2-
Terms and Conditions of the Advance Refunding Offer
X, To all holders of the following outstanding Treasury securities:
Description of securities
Issue date
3-1/2$ certificate A-1965
Feb. 15, 1962
2-5/8$ note A-1965
April 15, 1958
5-1/4$ note E-1963
Nov. 15, 1961
3-1/4$ certificate B-1963
May 15, 1962
3-1/4$ note D-1965
May 15, 1961
ii note B-1965
April 1, 1959
Final maturity
date
Remaining term
to maturity
(Months)
Amount
outstanding
(in billions)
$6.9
Feb. 15, 1965 5
Feb. 15, 1965
Feb. 15, 1965
May 15, 1965
May 15, 1965
May 15, 1965
2.8
5.6
6.7
5.0
1.7
5
5
8
8
8
2. New securities to be issued:
Description of securities
Issue date
5-3/4$ note of Aug. 15, 1967Sept. 15, 1962
Hi bond of Aug. 15, 1972
Sept. 15, 1962
Interest startsi/
Interest payable
Sept. 15, 1962
Sept. 15, 1962
Feb. 15 & Aug. 15
Feb. 15 & Aug. 15
\J Interest on the securities surrendered stops on September 15, 1962,
3. Terms of the exchange:
Exchanges will be made on the basis of equal face amounts, with payments by the Tr
and with adjustments of accrued interest to September 15, 1962, on the securities surrendered (per $100 face amount), as indicated below:
Securities
to be
exchanged
Amounts to be paid to subscribers
On account
On account of
of purchase
accrued interest
Total
price of
to Sept. 15, 1962
securities
on securities
to be issued
to be exchanged
3-1/2$ certificate A-1963
2-5/8$ note A-1965
3-1/4$ note E-1965
3-1/4$ certificate B-1965
3-1/4$ note D-1965
ty note B-1965
$ .50
.10
.40
.40
.40
1.00
FOR THE NEW NOTES
$ .294857
.221128
.275777
1.086277
1.086277
1.556957
5-1/2$ certificate A-1965
2
-5/8$ note A-1965
5
"l/4# note E-1965
5
"l/4$ certificate B-1965
;
'l/4$ note D-1965
• note B-1965
$ .70
.50
.60
.60
.60
1.20
FOR THE NEW BONDS
$ .294857
.221128
.275777
1.086277
1.086277
1.556957
Extension
of
maturity
Yrs.-Mos.
$ .794857
.521128
.675777
1.486277
1.486277
2.556957
$. .994857
.521128
.875777
1.686277
1.686277
2.556957
9
9
9
9
9
9
-
6
6
6
5
5
5
'A'AX
- 3 The following coupons should be attached to the securities in bearer form when they
are surrendered:
^____ Securities Coupons to be attached
JZ% ctf. A-1963, 2-5/8$ note A-1963, 3-1/4$ note E-1963
/4$ ctf. B-1963, 4$ note B-1963, 3-1/4$ note D-1963
Feb. 15, 1963
Nov. 15, 1962 & May 15, 1963
Accrued interest to September 15, 1962, will be paid to subscribers, in the case of
bearer securities following their acceptance, and in the case of registered notes
following discharge of registration in accordance with the assignments on the notes
surrendered.
Limitation on amount of securities to be issued:
While it is not practicable to estimate the extent of investor acceptance, the Treasury
is placing an outside limit of $6 billion, or thereabouts, on the aggregate amount of
notes, and $3 billion, or thereabouts, on the aggregate amount of bonds to be issued
to the public. In the event the limit on either issue is exceeded, subscriptions to
the respective issue will be subject to allotment. In addition, exchange subscriptions for the notes and bonds from Government Investment Accounts will be allotted
in full.
|
Books open for subscription for the new securities:
The books will be open for the receipt of subscriptions from Monday, September 10,
through Wednesday, September 12, 1962. Subscriptions placed in the mail by midnight
of September 12, 1962, addressed to the Treasurer, U. S., Washington 25, D. C , or
any Federal Reserve Bank or Branch, will be considered as timely. The use of registered mail is recommended for security holders' protection'in submitting securities
to be exchanged.
Requirements applicable to subscriptions:
Subscriptions will be received at the Federal Reserve Banks and Branches and at the
Office of the Treasurer of the United States, Washington 25, D. C. Banking institutions generally may submit subscriptions for account of customers, provided the names
of the customers are set forth in such subscriptions.
Subscriptions from banking institutions for their own account, Federally-insured savings and loan associations, States, political subdivisions or instrumentalities
thereof, public pension and retirement and other public funds, international organizations in which the United States holds membership, foreign central banks and
foreign States, Federal Reserve Banks, and Government Investment Accounts will be received without deposit. Subscriptions from all others must be accompanied by deposit
of eligible securities in an amount equal to 10$ of the securities applied for.
Denominations and other charactertistics of new securities:
The notes will be issued in denominations of $1,000, $5,000, $10,000, $100,000,
$1,000,000, $100,000,000 and $500,000,000 in coupon and registered forms. 'The'bonds
will be issued in denominations of $500, $1,000, $5,000, $10,000, $100,000 and
$1,000,000 in coupon and registered forms. The notes and bonds will be acceptable to
secure deposits of public moneys. They will not be acceptable in payment of taxes.
7 An
- 4
Nonrecognition of gain or loss for Federal income tax purposes solely on account
of exchange of old for new securities:
The Secretary of the Treasury has declared pursuant to section 1037(a) of
the Internal Revenue Code that no gain or loss shall be recognized for Federal
income tax purposes solely on account of the exchange of the securities; however,
section 1051(b) of the Code requires recognition of any gain realized on the exchange to the extent that money (other than interest) is received by the security
holder in connection with the exchanged Accordingly, if the fair market value 1/
of the 3-5/4$ notes or 4$ bonds plus the amount paid to the investor (discount)
exceeds the cost basis of the old securities to the investor, the gain (but not
to exceed the amount of the payment) must be recognized and accounted for as gain
for the taxable year of exchange. He will carry the new securities on his books
at the same amount as he is now carrying the old securities except that he will
reduce the cost basis by the amount of the payment and increase it by the amount
of the gain recognized. If the fair market value of the new securities plus the
amount of the payment does not exceed the cost basis of the old securities, the
basis in the new securities will be the cost basis in the old securities reduced
by the amount of the payment.
Gain to the extent not recognized (or loss), if any, upon the securities
surrendered in exchange will be taken into account upon the disposition or redemption of the new notes or bonds.
TJ The mean of the bid and asked quotations on date subscriptions
are submitted.
Book value of new securities to banking institutions:
The Comptroller of the Currency, Board of Governors of the Federal Reserve Sys
and the Federal Deposit Insurance Corporation have indicated to the Treasury that
banks under their supervision may place the new notes and bonds received in exchange on their books at the amount at which the eligible securities surrendered
are carried on their books, reduced by the amount of discount, if any, received by
the subscriber and increased by the amount of gain, if any, which will be recognized
as indicated in paragraph 8. They will so advise their examiners.
Computation of reinvestment rate for the extension of maturity:
A holder of the outstanding eligible certificates and notes has.the option of
accepting the Treasury's exchange offer or of holding them to maturity. Consequently,
he can compare the interest he will receive resulting from exchanging now with the
interest that he might obtain by reinvesting the proceeds of the eligible securities
at maturity.
34
- 5 -
The interest income before tax for making the extension now through exchange will
be the coupon rates on the new issues. If a holder of the eligible certificates
and notes does not make the exchange he would receive the coupon rates on the
eligible issues to their maturity and would have to reinvest at that time at a
rate equal to that indicated in paragraph 11 below for the remaining terms of the
issues now offered, in order to equal the interest he would receive by accepting
the exchange offer. For example, if the 3-1/4$ certificates or notes of 5/15/63
are exchanged for the 4$ bonds of 8/15/72, the rate for the entire nine years and
eleven months will be 4$. If the exchange is not made, a 3-l/4$ rate will be
received until May 15, 1963, requiring reinvestment of the proceeds of the 3-l/4's
at that time at a rate of at least 4.15$ for the remaining nine years and three
months, all at compound interest, to average out to a 4$ rate for nine years and
eleven months. This minimum reinvestment rate for the extension period is shown
in the table under paragraph 11. The minimum reinvestment rates for the other
issues included in the exchange are also shown in the table under paragraph 11.
34
XX. Investment rates on the new notes and bonds offered in exchange to holders of the
eligible securities:
3-1/2$ 2-5/8$ 3-1/4$ 3-1/4$ 3-1/4$ 4$
C/ls
Notes
Eligible securities
2/15/63
2/15/65
Notes
2/15/63
c/ls
5/15/63
Notes
5/15/65
Notes
5/15/65
$0.40
$0.40
$0.40
$1.00
FOR THE NEW 3-3/4$ NOTES OF AUGUST 15, 1967
payments on account of $100
issue price to subscriber —
$0.50
$0.10
Approximate investment yield
from exchange date (9/15/62)
to maturity of notes offered
in exchange based on price
of securities eligible for
exchange 1/
3.81$
3.80$
3.81$
3.81$
3.81$
3.83$
Approximate minimum reinvestment rate for the extension
period 2/
3.90
3.89
3.90
3.94
3.94
3.97
$0.30
$0.60
$0.60
$0.60
$1.20
FOR THE NEW 4$ BONDS OF AUGUST 15, 1972
Payments on account of $100
issue price to subscriber —
$0.70
(Approximate investment yield
I from exchange date (9/15/62)
to maturity of bonds offered
in exchange based on price
of securities eligible for
exchange 1/
4.06$
4.05$
4.06$
4.06$
4.06$
4.07$
Approximate minimum reinvestment rate for the extension
period 2/
.
4.12
4.11
4.12
4.15
4.15
4.16
y Yield to nontaxable holder or before tax. Based on mean of bid and asked prices (adjuste
for payments on account of issue price) at noon on September 4, 1962.
II Rate for nontaxable holder or before tax. For explanation see paragraph 10 above.
24^
to* mmm A. n* mmkmm,
10, 1962
It/urn* M****** nf u6t>ut
m t m m or I W U R H I *t uencur iftt a r m s *
th
Xm% wm$m
^ ^ tenders for two aeries of
Treasury b i U e , mm series Iftbtan additional Um* of the M i l s daUd June ifc, ifff,
and th* oth^r series, to be detetf S*.pt^ber 13, If**, which were offered on r*pte^b_r 5,
w r n or>emd at the Federal Reserve I^nks on Septesiber 10. Tenders mm invited for
$1,300,000,000, oi* thsreabout®, of &«4qr bills and for $700,000,000,
of l8a~d*r M i l s , the details of Uia two warUa am m
tmmmt
bill*
*wm m taounm
C0?1FSfX?IfE SUB*
•
fjT^*XTijWiw*Xiin5Mi»»w»
2.8921
9®.$21
*,?8s$ J/
of yl-oay bille bid for at the lov price was
of lite-day bills H i for at the lov price ma
mm* mmm
AFFIXED
m AXD *0esm» it
NS8&91 UlBfRlCfBt
^
How X®#k
1,8U2,666,«JOO
11*152*09®
i2f59f,«i
Atlanta
Chisago
St. Louis
|f97Ui#0QO
jtfi*ait®8@
Las
San
2S*€*tt»cw
13*6^000
200*8$, 00*
I6ft|?»000
21,7114,000
S6tS6$t00O
6,0^8,000
M6»?8$90Q&
8,606,000
10,,07,000
10s2U9fOOO
*^* TA^*_ _—
•.aiS(Q0O
1,7,685.000
7,SS4,CX»
io,uor,ooo
••fallC-29£
TOUS
*
18,902,000
*2 v XTMSSff00O
1 ^ 0 * 1 * 1 , 0 0 0 gf
ftMH»,l*0b<XN>
iT0O#a%000 j/
Irtcludes #171,117,000 aono«M|wtittv« Anders accepted *% Urn average price of 99.29$
Includes $69,915,000 m t a q p t t t t - * tenders «***£»**£ at tUs average price of 98.S-8
On a coupon Issue of the sa%* length «ni for tfe* saaws amount invested, the return m
these M i l s w a d provide yields of if0$#, for th» 9X**d>W bills, and 3*00^, for the
XM*dm M i l s . Interest rsiss «A bills are quoted In ^ r m s of bank discount vith
the mimm related to fchs fso* amount of tht bills payabla at maturity rather than
the amount invested and th@ir length in actual number of days related to a 360*d_y
yam* In contrast, yields m esjrtiftoateo, notes, and bonds ara computed in termc
of intaraat on the amount invested, and rsl&is His number of days remaining in an
interest payment period %o the actual auwO»r of days in the period, with
compounding if ^or© ^~sa one coupon period Is involved*
-Sff
TREASURY DEPARTMENT
W A S H I N G T O N , D.C.
KIR RELEASE A. M. NEWSPAPERS,
Tuesday, September 11, 1962.
September 10, 1962
RESULTS OF TREASURY'S WEEKLY BILL OFFERING
The Treasury Department announced last evening that the tenders for two series of
Treasury bills, one series to be an additional issue of the bills dated June lU, 1962,
and the other series to' be dated September 13, 1962, which were offered on September 5,
were opened at the Federal Reserve Banks on September 10. Tenders were invited for
$1,300,000,000, or thereabouts, of 91-day bills and for $700,000,000, or thereabouts,
of 182-day bills. The details of the two series are as follows:
RANGE OF ACCEPTED
COMPETITIVE BIDS:
High
Low
Average
91-day Treasury bills
maturing December 13, 1962
Approx, Equiv.
Price
Annual Rate
99.298
2.111%
99.292
2.801$
99.295
2.7892 1/
182-day Treasury bills
maturing March lit, 1963
Approx. Equiv.
Annual Rate
Psice
2.892$
98.^38
2.925$
98.^21
2.911$ 1/
98.528
2 percent of the amount of 91-day bills bid for at the low price was accepted
25 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
If
Applied For
I
67,97U,000
1,81*2,666,000
37,152,000
30,798,000
22,599,000
34,095,000
194,707,000
31,737,000
29,714,000
39,481,000
27,81*5,000
17,667,000
$2,376,1*35,000
Accepted
Applied For
1*6,892,000
$
12;978,000
9U8,366,000
1,087,1*98,000
18,902,000
8,1*62,000
25,61*1*,000
13,65U,000
22,599,000
9,080,000
31,495,000
8,01*8,000
100,555,000
106,785,000
26,737,000
8,806,000
21,714,000
10,1*07,000
26,285,000
10,21*9,000
17,81*5,000
9,381,000
13,1U7,000
1*,812,000
$1,300,181,000 a/ $1,290,160,000
Accepted
$ 6,578,000
57U,U98,000
3,462,000
13,651*,000
9,080,000
8,01*8,000
U7,685,000
7,556,000
10,1*07,000
10,01*9,000
4,381,000
4,812,000
$700,210,000 b/
V Includes $271,217,000 noncompetitive tenders accepted at the average price of 9
2/ Includes $69,915,000 noncompetitive tenders accepted at the average price of 98.528
y On a coupon issue of the same length and for the same amount invested, the return on
these bills would provide yields of 2.85$, 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.
D-59?
Q
45
- 3 Savings bonds issued under the new procedure will be in-
scribed in the name of the taxpayer or taxpayers either as single
ownership bonds in the case of the single taxpayer or as co-owner
bonds in the case of a joint return.
The suggestion that tax refunds be available in the form of
savings bonds has been made by a number of people over the years.
However, until the advent of automatic data processing equipment
for the handling of individual income tax returns, it has not
been administratively feasible to proceed with such a program.
Sufficient progress has now been achieved in the Treasury's
automatic data processing program to use this technique in the
payment of refunds owed to individuals.
0O0
Complete details will be spelled out in the instructions to
accompany the 1962 tax forms. Any taxpayer who chooses to take
his refund in the form of Savings Bonds will receive the largest
amount of bonds consistent with the size of his refund, provided
that the check to be issued for the cash portion of the refund is
not less than $1.00. For example, a refund of $20.00 Could take
the form of a $25.00 bond, the purchase price of which is $18.75,
and a check for $1.25. However, a refund of $19.00 would be paid
only in the form of a check, since the issuance of even the
smallest denomination savings bond would leave a balance of only
$0.25 to be paid by check.
This action makes a third option available to recipients of
refunds* Taxpayers will, of course, continue to have the options
of receiving their refunds in the form of a check issued by the
Treasury Department or applying their refunds toward the following
year's tax liability.
341
FOR RELEASE:
AM Papers,
Wednesday, Sept. 12, 1962
Treasury Offers Option of Taking
Tax Refunds in Savings Bonds
Treasury Secretary Douglas Dillon today announced that
taxpayers will have the option of receiving tax refunds for
1962 in the form of Savings Bonds.
The new individual income tax forms for 1962 will include
space for each taxpayer to indicate whether his refund should
be made payable in Series E Savings Bonds. Bonds will subsequently be issued in the customary multiples of $18.75 and
sent to the taxpayer with a check for any remaining balance due.
The decision to arrange for the optional payment of tax
refunds in the form of Series E Savings Bonds reflects the
favorable responses received from a recent sample survey of some
3,800 taxpayers who received refunds on their payments of 1961
income taxes. ^@n..^«^^fig_'S,",^'agig*octed tha.fty ulu.uugli Lliis T
8/L.L/*tJ fia^&<s ysfc/t Jtot*J<frf dttAJjO? ^^aCfi? /y 7V/J
348
TREASURY DEPARTMENT
WASHINGTON, D.C.
September 11, 1962
FOR RELEASE A.M. NEWSPAPERS
WEDNESDAY, SEPTEMBER 12, 1962
TREASURY OFFERS OPTION OF TAKING
TAX REFUNDS IN SAVINGS BONDS
Treasury Secretary Douglas Dillon today announced that
taxpayers will have the option of receiving tax refunds for 1962
in the form of Savings Bonds.
The new individual income tax forms for 1962 will include
space for each taxpayer to indicate whether his refund should be
made payable in Series E Savings Bonds. Bonds will subsequently
be issued in the customary multiples of $18.75 and sent to the
taxpayer with a check for any remaining balance due.
The decision to arrange for the optional payment of tax
refunds in the form of Series E Savings Bonds reflects the favorable
responses received from a recent sample survey of some 3,800
taxpayers who received refunds on their payments of 1961 income
taxes. The responses indicated a potential demand in the
magnitude of one-half billion dollars for Savings Bonds offered
in this way.
Complete details will be spelled out in the instructions to
accompany the 1962 tax forms. Any taxpayer who chooses to take
his refund in the form of Savings Bonds will receive the largest
amount of bonds consistent with the size of his refund, provided
that the check to be issued for the cash portion of the refund is
not less than $1.00. For example, a refund of $20.00 could take
the form of a $25.00 bond, the purchase price of which is $18.75,
and a check for $1.25. However, a refund of $19.00 would be paid
only in the form of a check, since the issuance of even the
smallest denomination savings bond would leave a balance of only
$0.25 to be paid by check.
This action makes a third option available to recipients of
refunds. Taxpayers will, of course, continue to have the options
of receiving their refunds in the form of a check issued by the
Treasury Department or applying their refunds toward the following
year's tax liability.
Savings bonds issued under the new procedure will be
inscribed in the name of the taxpayer or taxpayers either as
single ownership bonds in the case of the single taxpayer or as
D-599
co-owner bonds in the case of a joint return.
34£
2 However, until the advent of a u t o m ^ r t ^ = P e 0 p l e o v e r t h e Vea™for the handling of ind^vidua? income tax reluT«8a<?\*ClXllment
been administrativelv feasihia £„ „T ? rf^.urns' lfc has n°t
Sufficient progress now blen achieved E'Enf"^ * Pr°?ramautomatic data processing n „ „ l 2 n l e v e a in the Treasury's
payment of refunds owld to^nlmduals?6 thiS teohnl«™ -» the
oOo
and exchange tenders will receive equal treatment. Cash adjustments will pe made
for differences between the par value of maturing bills accepted in exchange and
the issue price of the new bills.
The income derived from Treasury bills, whether interest or gain from the sale
or other disposition of the bills, does not have any exemption, as such, and los
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, girt or other excise taxes, whether Federal or State, bu
are exempt from all taxation now or hereafter imposed on the principal or intere
thereof by any State, or any of the possessions of the United States, or by any
local taxing authority. For purposes of taxation the amount of discount at which
Treasury bills are originally sold by the United States is considered to be in-
terest. Under Sections 454 (b) and 1221 (5) of the Internal Revenue Code of 1954
the amount of discount at which bills issued hereunder are sold is not considere
to accrue until such bills are sold, redeemed or otherwise disposed of, and such
bills axe excluded from consideration as capital assets. Accordingly, the owner
of Treasury bills (other than life insurance companies) issued hereunder need in
clude in his income tax return only the difference between the price paid for su
bills, whether on original issue or on subsequent purchase, and the amount actua
received either upon sale or redemption at maturity during the taxable year for
which the return is made, as ordinary gain or loss.
Treasury Department Circular No. 418 (current revision) and this notice, pre-
scribe 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.
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
ovn account. Tenders will be received without deposit from incorporated banks
and trust companies and from responsible and recognized dealers in investment
securities. Tenders from others must be accompanied by payment of 2 percent of
the face amount of Treasury bills applied for, unless the tenders are accompanied
by an express guaranty of payment by an incorporated bank or trust company.
Immediately after the closing hour, tenders will be opened at the Federal
Reserve Banks and Branches, following which public announcement will be made by
the Treasury Department of the amount and price range of accepted bids. Those
submitting tenders will be advised of the acceptance or rejection thereof. The
Secretary of the Treasury expressly reserves the right to accept or reject any
or all tenders, in whole or in part, and his action in any such respect shall be
final. Subject to these reservations, noncompetitive tenders for $200,000 or
less for the additional bills dated
June 21, 1962
p$5
ing until maturity date on December 20, 1962
, ( 91
days remain-
C3&X
) and noncompetitive tenders for
ps§F
$JL60,000 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
Banks on September 20, 1962
» in cash or other immediately available funds or
m a like face amount of Treasury bills maturing
September 20, 1962
Cash
30-f
'wvwswMnmvM
TREASURY DEPARTMENT
Washington
FOR IMMEDIATE RELEASE^ September 12, 1962
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 $2.000.000.000 y or thereabouts, fo
cash and in exchange for Treasury bills maturing September 20, 1962, in the amou
of
$1*900,824.000 , as follows:
91 -day bills (to maturity date) to be issued
September 20, 1962 >
in the amount of $1,500,000,000 > or thereabouts, representing an additional amount of bills dated
June 21, 1962
and to mature December 20, 1962
, originally issued in the
&
amount of $700.552.000
t * n e additional and original bills
to be freely Interchangeable.
182 -day bills, for $ 700,000,000 , or thereabouts, to be dated
September 20, 1962 > and to mature tferch 21. 1965 •
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, $50,000, $100,000, $500,000 and
$1,000,000 (maturity value).
Tenders will be received at Federal Reserve Banks and Branches up to the
Daylight Saving
closing hour, one-thirty p.m., Eastern/fctxffltaxfl time, Monday, September 17, 1962
Tenders will not be received at the Treasury Department, Washington. Each tender
must be for an even multiple of $1,000, and in the case of competitive tenders t
price offered must be expressed on the basis of 100, with not more than three
L CH
J-S^
TREASURY DEPARTMENT
W A S H 1 N G T 0 N , D.C.
September 12,1962
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
$2,000,000,000, or thereabouts, for cash and in exchange for
Treasury bills maturing September 20,1962, in the amount of
$1,900,824,000, as follows:
91-day bills (to maturity date) to be issued September 20, 1962,
in the amount of $1,300,000,000, or thereabouts, representing an
additional amount of bills dated June 21, 1962,
and to
mature December 20,1962, originally Issued in the amount of
$700,552,000,
the additional and original bills to be freely
interchangeable.
182
-day bills, for $700,000,000, or thereabouts, to be dated
September 20,1962, and to mature March 21, 1963.
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, $50,000, $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 p.m., Eastern Daylight Saving
time, Monday, September 17, 1962.
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.
D-600
- 2 Immediately after the closing hour, tenders will be opened at
the Federal Reserve Banks and Branches, following which public
announcement will be made by the Treasury Departmment of the amount
and price range of accepted bids. Those submitting tenders will be
advised of the acceptance or rejection thereof. The Secretary of
the Treasury expressly reserves the right to accept or reject any or
all tenders, in whole or in part, and his action in any such respect
shall be final. Subject to these reservations, noncompetitive
tenders for $200,000 or less for the additional bills dated
June 21, 1962,
(91-days remaining until maturity date on
December 20,1962) 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 Banl<son September 20, 1962,
in cash or other immediately available funds or in a like face
amount of Treasury bills maturing September 20,1962.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 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<5k (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
0O0 the taxable year for which the
sale or redemption at maturity during
return is made, as ordinary gain or loss.
Treasury Department Circular No. 4l8 (current, revision) and this
notice prescribe the terms of -the Treasury bills and govern the
conditions of their issue. Copies of the circular may be obtained fro
any Federal Reserve Bank or Branch.
3>
1HBA30KF B B M B H 8 8 9
BuhlniitrthifluCm
IV-SDXAfS «ffrTW51
-TCTRSBtl, SEPTEMBER 13,1962
nsLZMZH-sr
D-6OI
or _J_ANUPACTDT$J> IKAD AND ZINC <aufft«ifff.i
BY fSZSXDSHHAL PBOCLAkAIIOM DO. 3^57 |P S-PTOfflKR 22, 1959
DATA O N IMPORTS FOR CONSUMPTION
T O T H E QUOTAS' K S T A B U - H E O
CO-OTHLT ODOTA reHIOD • July I - September 30, 1962
ttH W
* * July I - September 7, 1962 (or uu noted)
ITEM 392
t Lead bullion or baa* bullion*
t load la pigs and bars, lead
Lead-bearing ores, flu* dost, I dross, reolalaed lead, sorap
•ad cattee
x lead, aatlaoolal lead, antl*
t aonlal sp rap lead, typo -atal,
I all alloys or combinations of
• ftiota ,
t
lead n.a.p.f.
Quarterly
tC__rtarly
Quota
Dutiable Lead
Imports i Dutiable Lead
Itejorta
MJI « • f M
(Pounds)
(Pounds)
™* y
Country
of
Produotloa
Australia
10,080,000 10,080,000
™*
353
23,680,000 16,578,616
Belgian Conge
5,440,000
BelgLua and
Luxe-burg (total)
Bolivia
$,040,000
Canada
13,440,000
I3,MIO,OOO
15,920,000
Me-loo
Pent
l£,l60,000
2,796,892
Oku So« Afrlea
14,880,000
U,880,000
TUgoslerla
* imports as of
7,520,000
7,520,000
37#«4O,O0O
29,193,242
66,480,000
66,480,000
36,880,000
30,215,M10
70,480,000
50,925,835
6,320,000
2,009,591
12,880,000
6,910,^72
35,120,000
23,600,761
3,760,000
2,850,230
15,760,000
12,893,518*
17,840,000
17,81)0,000
14,632,979*
•a
6,560,000
3,747,888*
1,120,515*
Italy
All ether forei#i
ooustrles (total)
rrz- 394
t
I
t
i
t Zlno-baaring ores of all kinds, s Zlno la blooks, pigs, or slabs;
t except pyrites oontalnl&g not t old sad worn-out zlno, fit
i
orer Jfc of d n o
> only to be re-aaufaetursd, zlno
t
t
dross, and zlno skl-nlngs
\
i
;Q_utarly
Qiota
tQuarterly
Quota
i, Dutiable
Zinc
iBoorts : By height
Deports
II
(Pounds J*
(Pounds)'
6,560,000
6,080,000
3,600,000
6,080,000
6,080,000
September 10, 1962.
The ebove country designations ere those specified in Presidential Proclamation No.-3-57
countries have been changed.--
of
September 22, 1958. Since that date the names of certain
3W
H^ihlngiwin, 0* 0.
X--8DIACT J B H a
THURSBAY, SEPTEMBER 13.1962
D-601
l U U M D U B T DATA OH H909SS FOR CaSSuWTiOH QT WW)Mt£rm®
-SAO AND ZINC msHBtClWOg TO fBSflOOTASSSTABLISHD
I T nssrasiriAi, fsoeuutrzoji m* 3257 o? szpfaasR 22,1950
•
July I - September 30, 1962
&RmS9m july | _ September 7, 1962 (or ue noted)
JSL
Country
of
Produotloa
Australia
ITEM 392
t Lead bullion or base bulllsp^
t lead la pigs and bars, leejf
Lead-bearing ores, flu* dast,s dross, reolalaed load, aor-ap
and s&ttee
x lead, antlaoalal lead, antls aonlal scrap load, type -atsj,
l all alloys or ooablnatloas of
Oau-tarly Quota
t*G_xrtarlync_ata
lead n.a.p.f.
Dotlabla Lead
Imports x Dutiable Lead
reports
(Pounds)
(Pounds)
10,080,000
10,080,000
23,680,000
IT-M 334
SSLJSL
t
t
j
i
« Uas-bearlng ores of all kinds,: Zlno la bleoks, pigs, or slabs;
e except pyrites ooatalnlng not x old end •era-out zlno, fit
t
over Jfr of tine
t only to be re-aoufaetursd, zlno
t
t
dross, end zlno sklasings
i
E
;0_-terly
Oieta
t-zartsrly
_aeta
Iaports
t Dutiable Zlns
Icports i By seljght
(Pounds)
(Pounds)
16,378,616
Belgian Congo
1 440 OOQ
Bel glue and
Luxemburg (total)
Bolivia
5,OM>,OOO
13,440,000
13,440,000
MeHoo
Pora
16,160,000
2,796,892
Ota* So* Afrlsa
14,880,000
14,880,000
ltagoslovla
•Imports as of
6,560,000
7,520,000
7,520,000
37,840,000
29,193,242
3,600,000
m
1,120,513*
15,920,000
14,632,979*
36,880,000
30,215,410
70,480,000
50,925,835
6,320,000
2,009,59»
12,880,000
6,910,472
35,120,000
23,600,761
3,76o,ooo
2,850,230
iS»7fiO,ooo
12,893,518*
17,840,000
)7,840,000
66,480,000
66,480,000
Italy
All ether forei*t
ootsstrloo (total)
3,747,888*
6,560,000
6,080,000
6,080,000
September 13, 1962.
The above country designations ere those specified in Presidential Proclamation No."-3257 °f September 22, 1953. Since that date the names of certain
countries have been changed.-"
r0
T—'j
3 ^
-£COTTON WASTES
(in pounds)
COMBER
COTTON CARD STRIPS made from cotton having* staple of less than 1-3/16 inches in length, CO!
ER WASTE, AND ROVING 7JASTE, WHETHER OR NOT MANUFACTURED OR OTHERWISE
WASTE, LAP WASTE, SLIVER
ADVANCED IN VALUEx Provided, however, that not more than 33-1/3 percent of the quotas shall
be filled by cotton wastes other than comber wastes made from cottons of 1-3/16 inches or more
in staple length in the- case- of the- following countries: United Kingdom, France, Netherlands,
Switzerland, Belgium, Germany, and Italy*
Country of Origin
Established
TOTAL QUOTA
Total Imports
i Established :
Imports
TJ
Sept. 20, 1961, to : 33-1/3% of : Sept. 20, 1961,
Total Quota ; to Sept. 10. 1962
Sept. 10. 1962
United Kingdom
4,323,457
Canada
...
239,690
France
227*420
British India
69,627
Netherlands
. .
68,240
Switzerland . . • • • • •
44,388
Belgium
38,559
Japan . . . . . . . . . .
341,535
China .
17,322
Egypt •
• •
8,135
Cuba • • • •
• •••••
6,544
Germany . . . . . . . . .
76,329
Italy . . . . . . . . . .
21.263
1,892,083
239,690
179,155
69,627
67,447
42,019
22,062
341,500
.1,441,152
76,329
25,443
7.088
25,443
5,482,509
2,929,912
1,599,886
1,577,654
y
1,441,152
-
-
75,807
75,807
-
-
22,747
14,796
12,853
22,747
12,505
—..
-
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.
CO
' '
r—-|
3 r?
TREASURY DEPARTMENT
Washington, D. C.
IMMEDIATE RELEASE
THURSDAY, SEPTEMBER 13,1962
D-602
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, I96I to September 10, 1952
Country of Origin
Established Quota
Imports
Country of Origin
Established Quota
E
£ypt and the AngloEgyptian Sudan ....
Peru
British India
China
Mexico
Brazil
Union of Soviet
Socialist Republics
Argentina
,
Haiti
,
Ecuador
783,816
247,952
2,003,483
1,370,791
8,883,259
618,723
475,124
5,203
237
9,333
Honduras
Paraguay
783,816
Colombia
245,483
Iraq
2,003,483
British East Africa ...
8,883,259
Netherlands E. Indies .
618,723
Barbados
l/0ther British W. Indies
114,908
Nigeria
2/0ther British W. Africa
3/0ther French Africa ...
Algeria and Tunisia ...
^ 752
- 871
124
195
2,24b
71,388
21,321
5,377
16,004
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, 19)2 to September 10. 196?
Established Quota (Global) - 45,656,420 Lbs.
Staple Length
1-3/8 or more
I-5/32" or more and under
1-3/8" (Tanguis)
1-1/8" or more and under
1-3/8"
Allocation
39,590,778
Imports
39,590,778
1,500,000
122,857
4,565,642
4,565,642
Iirroorts
3 Si
TREASURY DEPARTMENT
Washington, D. C.
IMMEDIATE RELEASE
THURSDAY, SEPTEMBER 13,1962
D-602
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 September lu, 1962
Country of Origin
Egypt and the AngloEgyptian Sudan ....
Peru
3ritish India
China
Mexico
Brazil
Union of Soviet
Socialist Republics
Argentina
,
Haiti
,
Ecuador
Established Quota
783,816
247,952
2,003,^83
1,370,791
8,883,259
618,723
475,124
5,203
237
9,333
Imports
Country of Origin
Established Quota
Honduras
Paraguay
783,816
Colombia
245,483
Iraq
2,003,483
British East Africa ...
8,883,259
Netherlands E. Indies .
618,723
Barbados
l/0ther British W. Indies
114,908
Nigeria
2/0ther British W. Africa
_j/0ther 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, 1962 to September 10. 1962
Established Quota (Global) - 45,656,420 Lbs.
Staple Length
1-3/8" or more
1-5/32" or more and. under
1-3/8" (Tanguis)
•1-2/8" or more and under
1-3/8"
Allocation
39,590,778
Imports
39,590,778
1,500,000
122,857
4,565,642
4,565,642
COffOB WASHES
(Xa peseds}
COTTON CARD STRIPS made rfrom cotton having «. staple of less than 1-3/16 inches is length, COMBER
WASTE, LAP WASTE, SLIVER WASTE, AND ROVING WASTE, WKSTHER OR NOT MANUFACTURES OR OTHERWISE
AB7ANGED XH VALUE* Provided, however., that not more than 33-1/3 percent of the quotas shall
be fiHed by cotton mates 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 liBgdom, France, Netherlands,
Switaerlaiid, Belgium, German, and It&Xys
Country of Origin
_
—
.
.
_
___,:"•
s Established
t TOTAL QUOTA
i
•
•
_
Imports
%
Total Imports s Established
ats M«~w .__&_rewi :
a'
«fc-tu^/\y* w »
s Sept* 20, 1961, to s 33-V3BK o* s Sept* 20, 1961,
r
_
United Xiag&em 4,323,45?
Canada
-. • *
239,690
France • • • • • • • ; . .
227,420
British India
69,627
Hetherlsada .......
68,240
Switzerland .......
44,388
Belgium . . . ,
38,559
Japan, . . . « . • • • . • • . . .
341,535
China e .........
17,322
Egypt * •
• •
^,135
Cuba . . . . ......
6,544
Germany <*•
• •
76,329
Italy . . • . . . . . . « -_.
VH&}
1,892,083
239,690
179,155
69,627
67s447
42,019
22,062
341,500
1,441*152
76,329
25,443
7.088
5,482,509
2,929,912
y
1,441,152
«,
«
75*307
75,807
-
— .
22,747
14,796
12,853
22,747
12,505
_
-
-.-
1,599,886
25,443
• i 9
1,577,654
Included in total imports, column 2.
prepared in the Bureau of Gustoma.
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.
%<Y
-2-
Commodity
: Unit
Imports
. of
as of
rQuantitv: September 1T 1<
Period and Quantity
Absolute Quotas:
Butter substitutes, including
butter oil, containing 45%
or more butter fat
Calendar
Year 1962
Cotton products, except cotton
wastes, produced in any stage
preceding the spinning into
yarn
Peanuts, shelled, unshelled,
blanched, salted, prepared or
preserved (incl. roasted peanuts but not peanut butter)
1,200,000
Pound
Quota Filled
12 mos. from
Sept. 11, 1961
1,000
Pound
Quota Filled
12 mos. from
August 1, 1962
1,709,000
Pound
215,317
1/ Imports through September 7, 1962.
hi
TREASURY DEPARTMENT
Washington
IMMEDIATE RELEASE
TH8RSB&1T, SEPTEMBER 13,1962
D-603
The Bureau of Customs has announced preliminary figures on imports for consumption of the following quota commodities from the beginning of the respective
quota periods through September 1, 1962:
Commodity
Period and Quantity
Imports
; Unit
as of
: of
:
: Quantity: September 1, 196
Tariff-Rate Quotas:
Cream, fresh or sour Calendar Year 1,500,000 Gallon 89
Whole Milk, fresh or sour Calendar Year 3,000,000 Gallon 277
Cattle, 700 lbs. or more each July 1, 1962(other than dairy cows)
Sept. 30, 1962
120,000 Head
12 mos. from
Cattle less than 200 lbs. each... April 1, 1962
200,000
Fish, fresh or frozen, filleted,
etc., cod, haddock, hake, pollock, cusk, and rosefish
Calendar Year
28,571,433
Head
7,410
42,265
]J
Pound
Quota Filled
114,000,000 Pound
36,000,000 Pound
52,233,560
Quota Filled
Tuna Fish Calendar Year 59,059,014 Pound 37,272,804
White or Irish potatoes:
Certified seed
Other
12 mos. from
Sept. 15, 1961
Walnuts Calendar Year 5,000,000 Pound 2,325,455
Stainless steel table flatware
(table knives, table forks,
Nov. 1, 1961*-;
tablespoons
Oct. 31, 1962
69,000,000
Pieces
68,371,290
1/ Imports for consumption at the quota rate are limited to 21,428,574 pounds during
the first nine months of the calendar year.
3U
TREASURY DEPARTMENT
Washington
IMMEDIATE RELEASE
THDHSDftY,
SEPTEMBER
13,1962
D-603
The Bureau of Customs has announced preliminary figures on imports for consumption of the following quota commodities from the beginning of the respective
:, not a periods through September I, 1962:
•orsmodity
:
Period and Quantity
Unit
:
Imports
of
:
as of
Quantity: September 1. 1962
Tariff°Rate Q~ot&g:
>a£c., frsgfe; zt souir. Calendar Yeas'
Gallon
89
vhols Milk, -fretsi or .spur........ Calendar Year 3,000,000- Gallon
277
Cattle, 700 lbs. or. sic ire each
(other .than dairy co-re)
July 1,
Sept. 30
1,500,000
120,000
Head
7,410
12 mos. from
Cattle Isss than 200 lbs« each... April 1, 1962
200,000
Head
42,265
Fish, fresh or froisis, filleted,
etc., cod, haddoek, bake, pol*
lo;k, eusk, _r,d rssa-leh......... Calendar Year
28 9 571 9 433
1/
Poisnd
Quota Filled
Flgh........................ Calendar Year 59,059,014 Pound 37,27298Q4
White or Irish potatoes;
Csrtifisd seed.......,......t .... 12 roos. from
Othsr...
.................... Sept. 15, 1961
114,000,000 Pound
36,000,000 Pound
................. ^....... Calendar Year
5,000,000
StaiRlass steel table flatY-ar©
(table knives, table forks,
Kov. 1, 1961table spoons...................' Oct. 31, 1962
69,000,000
Pound
Piece.
52,233,560
Quota Fil
2,325,455
68,371,290
-2-
Commodity
: Unit
Imports
, of
as of
•Quantity: September 1. 1Q^
Period and Quantity
Absolute Quotas:
Butter substitutes, including
butter oil, containing 45%
or more butter fat
Calendar
Year 1962
Cotton products, except cotton
wastes, produced in any stage
preceding the spinning into
yarn
Peanuts, shelled, unshelied,
blanched, salted, prepared or
preserved (incl. roasted peanuts but not peanut butter)
1,200,000
Pound
Quota Filled
12 mos. from
Sept. 11, 1961
1,000
Pound
Quota Filled
12 mos. from
August 1, 1962
1,709,000
Pound
215,317
1/ Imports through September 7, 1962.
LO
LO
*ZC/
TREASURY DEPARTMENT
Washington
IMMEDIATE RELEASE
THURSDAY, SEPTEMBER 13,1962
D-604
The Bureau of Customs has announced the following preliminary
figures showing the imports for consumption from January 1, 1962, to
September 1, 1962, inclusive, of commodities under quotas established
pursuant to the Philippine Trade Agreement Revision Act of 1955:
Commodity
Buttons.
Established Annual
Quota Quantity
680,000
Unit
of
Quantity
Gross
Imports
as of
September 1. 1962
178,007
Cigars
160,000,000
Number
Coconut oil
358,400,000
Pound
119,106,347
Cordage.
6,000,000
Pound
3,078,826
Tobacco.
5,200,000
Pound
4,475,376
7,503,253
?>c^
TREASURY DEPARTMENT
Washington
IMMEDIATE RELEASE
THURSDAY, SEPTEMBER 13,1962
D-604
The Bureau of Customs has announced the following preliminary
figures showing the imports for consumption from January 1, 1962, to
September 1, 1962, inclusive, of commodities under quotas established
pursuant to the Philippine Trade Agreement Revision Act of 1955:
Commodity
Buttons....
Established Annual
Quota Quantity
680,000
Unit
:
Imports
of
:
as of
Quantity : September 1. 1962
Gross
178,007
Cigars
160,000,000
Number
Coconut oil
358,400,000
Pound
119,106,347
Cordage....
6,000,000
Pound
3,078,826
Tobacco....
5,200,000
Pound
4,475,376
7,503,253
TREASURY DEPARTMENT
WASHINGTON, D.C.
September 12, 1962
FOR IMMEDIATE REIEASE
WITHHOLDING OF APPMISEMENT ON
ACRYLIC STAPIE FIBER
The Treasury Department is instructing customs field officers
to withhold appraisement of acrylic staple fiber manufactured in
West Germany and sold by Textiel Fabriek Huizen, Huizen, Netherlands,
pending a determination as to whether this merchandise is being
sold in the United states at less than fair value. Notice to this
effect is being published in the Federal Register.
Under the Antidumping Act, determination of sales in the United
States at less than fair value would require reference of the case
to the Tariff Commission, which would consider whether American
industry was being injured. Both dumping price and injury must be
shown to justify a finding of dumping under the law.
The complaint in this case was received on July 18, 1962. The
dollar value of imports received from March 1962 to date was approximately $1,500,000.
3 £~<i_
TREASURY DEPARTMENT
mmmmmmmmmmtmm^matvmmkvmMftwmmwmsm
•••-•>~""~——*—
WASHINGTON, D.C.
September 12, 1962
FOR IMMEDIATE RELEASE
WITHHOLDING OF i-KKUlISEMENT ON
ACRYLIC STAPLE FIBER
The Treasury Department is instructing customs field officers
to withhold appraisement of acrylic staple fiber manufactured in
West Germany and sold by Textiel S&briek Huisen^ Hui2en, Netherlands,
pending a determination as to whether this merchandise is being
sold in the United States at less than fair value. Notice to this
effect is being published in the Federal Register.
Under the Antidumping Act, determination of sales in the United
States at less than fair value would require reference of the case
to the Tariff Commission, which would consider whether American
industry was being injured. Both dumping price and injury must be
shown to justify a finding of dumping under the law.
The complaint in this case was received on July 18, 1962. The
dollar value of imports received from March 1962 to date was approximately $1,500,000.
.
4
-
addressed to:
Office of Debt Analysis
U. S. Treasury Department
Room 3036, Main Treasury Building
15th and Pennsylvania Avenue, N.W.,
Washington 25, D. C.
A public meeting with Treasury officials for discussion of
questions and suggestions will be held in the auditorium of
the Federal Reserve Bank of Hew York on Wednesday, October 17,
at 3:30 PM. In making the announcement at this tine, the
Treasury hopes to give all interested parties adequate time
for preliminary consideration, prior to the October 17 meeting,
of all of the procedural and ether problems which might be
encountered in initiating this new borrowing technique.
•
3
-
It is sot presently contemplated that offerings of long-term
bonds at competitive bidding will be made on a regularly schedule
basis. If this first trial should prov* successful, subsequent
applications of this technique for selling long-term bonds will
be made, with appropriate notice to the market, whenever the
general economic environment and capital market conditions seam
appropriate for such an offering.
Recognizing that many problems will have to be resolved
before this new type of borrowing operation can be initiated, the
Treasury wishes to obtain the views of ©embers of the financial
community and amf other interested persons on the procedural
and other aspects of selling long-term Government securities
through competitive bidding. Written comments should be
rr
• c7
The baste procedures to be followed will be similar to
those which have been used for many years in selling/most issues /
fof State and local government securities and|corporate utility oond^
^ It is andfctjNitmi tbat potential underwriters will |wish £©]&>»
htd^in% groups. The bonds will be awarded to the group offering
the highest bid (the lowest interest cost) for "bonds'bearing a
given coupon, maturity and call provision (if any). The
$eoretaI|r *£' the Treaty will reserve the right to reject all
bids.
cil11
" * -^&M»g @r b* t»iti«-t#s, -.
The treasury*a objective is to explore the practicability
of this technique for occasionally placing moderate amounts of
7YJL* UivW*-' ^p^^U^k^
Along-term
Government bonds in the hands OJT the public," at the
ft^ lowest possible interest cost to the taxpayers *md without
adverse effects on the markets for other long-term securities
,4. -fo^tltMAAAMAA1?^
V
-9M^" £ijft f -*,£s ^
t^
>-!••/";/M.>
/ ^ M - "
*••* •**,*• *t
to
, S»pfi»h.w 13, 1908 ~
1362-^
TRi-ASURY FLANS TO SELL LOSG-TERM
BONDS THROUGH COMPETITIVE BIDDING
today its intention to test
fy^
a new technique in borrowing operations - - the sale of
long*term bonds
tmfm the
underwriting symdloatafbii
basis of competitive bidding. | The
at
time during the
will be
six months, after there
has been fmll opportunity fee comment and appraisal [both by j
investors and,byl the banks and other financial institutions
which might wish to participate in bidding for and distributing
t to be offered will be in the order of
magnitude of one-quarter of a billion dollars.
^ :rxmt
'** **»«uri*
TREASURY DEPARTMENT
WASHINGTON, D.C.
September 13, 19&2
FOR RELEASE AM NEWSPAPERS
FRIDAY, SEPTEMBER 14, 1962
TREASURY PLANS TO SELL LONG-TERM
BONDS THROUGH COMPETITIVE BIDDING
The Treasury announced today its intention to test a new
technique in borrowing operations — the sale of long-term bonds
through an underwriting syndicate on the basis of competitive
bidding.
The experiment will be made at some time during the next six
months, after there has been full opportunity for comment and
appraisal by both investors and the banks and other financial
institutions which might wish to participate in bidding for and
distributing the bonds. The amount to be offered will be in the
order of magnitude of one-quarter of a billion dollars.
The basic procedures to be followed will be similar to those
which have been widely used for many years In selling State and
local government securities and the bonds of privately-owned
public utilities. It is anticipated that potential underwriters
will form bidding groups. The bonds will be awarded to the group
offering the highest bid (the lowest Interest cost) for bonds
bearing a given coupon and maturity and call provision, if any.
The Secretary of the Treasury will reserve the right to reject
all bids.
The Treasury's objective is to explore the practicability of
this technique for occasionally placing moderate amounts of
marketable long-term Government bonds In the hands of the public,
at the lowest possible interest cost to the taxpayers and without
adverse effects on the markets for other long-term securities.
It Is not presently contemplated that offerings of long-term
bonds at competitive bidding will be made on a regularly-scheduled
basis. If this first trial should prove successful, subsequent
applications of this technique for selling long-term bonds will
be made, with appropriate notice to the market, whenever^ the
general economic environment and capital market conditions, seem
appropriate for such an offering.
Recognizing that many problems will have to be resolved
before this new type of borrowing operation can be Initiated, the
D-605
Treasury wishes to obtain the views of members of the financial
community and any other interested persons on the procedural and
- 2 other aspects of selling long-term Government securities through
competitive bidding. Written comments should be addressed to:
Office of Debt Analysis
U. S. Treasury Department
Room 3036, Main Treasury Building
15th and Pennsylvania Avenue, N. W.
Washington 25, D. C.
A public meeting with Treasury officials for discussion of
questions and suggestions will be held in the auditorium of
the Federal Reserve Bank of New York on Wednesday, October 17,
at 3s30 PM. In making the announcement at this time, the
Treasury hopes to give all interested parties adequate time for
preliminary consideration, prior to the October 17 meeting, of
all of the procedural and other problems which might be
encountered in initiating this new borrowing technique.
0O0
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6 1962
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CORRECTED COPY
8/21/62
TREASURY DEPARTMENT
WASHINGTON. D.C.
I lit Ifl^
FOR IMMEDIATE RELEASE
£fUGC**s(
TREASURY MARKET TRANSACTIONS IN JULY
During JUiiy* 1962, market transactions in
direct and guaranteed securities of the government
for Treasury investment and other accounts resulted
)by the Treasury Department ot^-SOtf-, ^ ' If
$61,901,000.
%&x*~)
oOo
r
'I
^_D_-3X6-——
3 73
TREASURY DEPARTMENT
WASHINGTON, D.C.
September 14, 1962
FOR IMMEDIATE RELEASE
TREASURY MARKET TRANSACTIONS IN AUGUST
During August 1962, market transactions in
direct and guaranteed securities of the government
for Treasury investment and other accounts resulted
in net sales by the Treasury Department of
$304,377,300.
0O0
D-606
/
TREASURY DEPARTMENT
WASHINGTON, D.C.
September 14, 1962
FOR IMMEDIATE RELEASE
The Treasury Department today announced that preliminary reports from
the Federal Reserve Banks show that^subscriptions of about $7,830 million
have been received for the 3-3/4$ notes and 4$ bonds included In the Department* s latest advance refunding operation. These subscriptions included
$7,489 million from public holders and $341 million from Government Investment Accounts. Subscription books for the offering were open from September
10 through September 12. A H subscriptions will be allotted in full. Delivery
of and payment for the new notes and bonds will be made on September 20, 1962.
Subscriptions are as follows (in millions);
From Public
From Government
New Issue
Holders
Investment Accounts
3-3/4$ note of Series A-1967
4$ bonds of 1972
Total
$5,240
2,249
$7,489
$ 21
520
$341
Total
$5,261
2,569
$7,830
962
Details by Federal Reserve Bank Districts as to subscriptions will be
announced when final reports are received.
/
i/4
&i4'
o
3l ^
TREASURY DEPARTMENT
WASHINGTON, D.C.
September 14, 1962
FOR IMMEDIATE RELEASE
TREASURY'S ADVANCE REFUNDING RESULTS
The Treasury Department today announced that preliminary
reports from the Federal Reserve Banks show that total
subscriptions of about $7,830 million have been received for the
3-3/4$ notes and 4$ bonds included in the Departments latest
advance refunding operation. These subscriptions Included
$7,489 million from public holders and $34l million from Government
Investment Accounts. Subscription books for the offering were
open from September 10 through September 12. All subsoriptions
will be allotted in full. Delivery of and payment for the new
are
follows
(in millions)t
notesSubscriptions
and bonds will
beas
made
on September
20, 1962.
From Public
Holders
New Issue
-3A# note of Series A-1967
% bonds of 1972
$5,240
2,249
Total
$7,489
From
Government
Investment
Accounts
$ 21
320
$341
Total
$5,26l
$7,830
Details by Federal Reserve Bank Districts as to subscriptions
will be announced when final reports are received.
0O0
D-607
i
STATUTORY D E B T LIMITATION
As of Jsg&SJL-
3
Washington,
Sqpt, 1 ' * 1968-
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." T>« Act of July 1, 19(52 (P.L. 87-512 87th Congress) provides that the above limitation shall be temporarily increased (1) during the period beginning on July 1, 1962* and ending on March 31, 1963, to
$308,000,000,000} (2) during the period beginning on April 1, 1963. and ending on June 24, 1963, to $305,000,000,000, and
(3) during the period beginning on June 25. 1963, and ending on June 30, 1963, to $300,000,000,000.
The following table shows the face amount of obligations outstanding and the face amount which can still be issued
under this limitation:
,_~08 O O O OOH n
Total face amount that may be outstanding at any one time
V ^ U O , U U U , UUU } 0
Outstanding Obligations issued under Second Liberty Bond Act, as amended
^ Interest-bearing:
Treasury bills
$43,6^6,749,000
Certificates of indebtedness
20.39S,711,000
Treasury notes
Bonds Treasury.
•Savings (current redemption value).
Depositary
R. E. A. series
Investment series
Certificates of Indebtedness
Foreign series
Foreign Currency series
Special Funds Certificates of indebtedness
Treasury notes
Treasury bonds
Total interest-bearing
Matured, interest-ceased
Bearing no interest:
United States Savings Stamps .
.58,062,137,000
$122,097,597,000
•77,197,077,050
•47,696,967,163
115,903,500
24,490,000
- 4,6^,663,000
129,680,100,713
550,000,000
—l4q,.77,P50
699,277,250
7,316,763,000
6,614,626,000
31.495.174.000
51,147,000
724,560
Excess profits tax refund bonds
Special notes of the United States :
Internat'l Monetary Fund series
^.426.^.000
297,904,137,963
339,666,239
3,002,000,000
115,304, too
55.000.000
Internat'l Develop. Ass'n. series
Inter-American Develop. Bank series.
Total
Guaranteed obligations (not held by Treasury):
Interest-bearing:
• 2.224,175,9?)
301,467,980,162
Debentures : F. H. A. & D C Stad. Bds
k£S , 2 3 3 , 3 5 0
Matured, interest-ceased
1. 5 9 6 , 7 5 0
Grand total outstanding
_
Balance face amount of obligations issuable under above authority.
469.830.100
3Qi,9j7t^Q|gj
6 t 06?;Wr7:
Reconcilement with Statement of the Public Debt
AugUSt
(Daily Statement of the United States Treasury,
AllgllRt 31
1 Qfig
(Data)
Outstanding Total gross public debt
Guaranteed obligations not owned by the Treasury _
vIV^
Total gross public debt and guaranteed obligations
Deduct - other outstanding public debt obligations not subject to debt limitation
301,841,941,50"
469.830.10!
302,311,771,^
m^U$
D-608
301,937,810,26!
STATUTORY DEBT LIMITATION
As of AngusJL_31, Washington,
Sopt,
' /
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 lace amount." T n e Act of July 1, 1962 (P.L. 87-512 87th Congress) provides that the above limitation shall be temporarily increased m during the period beginning on July 1, 1962, and ending on March 31, 1963, to
$308,000,000,000, (2) during the period beginning on April 1, 1963, and ending on June 24, 1963, to $305,000,000,000, and
(3) during the period beginning on June 25, 1963, and ending on June 30, 1963, to $300,000,000,000.
The following table shows the face amount of obligations outstanding and the face amount which can still be issued
under this limitation:
^ 0 8 000 000 OOO
Total face amount that may be outstanding at any one time
^
•
* V A ^ J , \J\JKJ
Outstanding Obligations issued under Second Liberty Bond Act, as amended
v
Interest-bearing :
Treasury bills
$43,636,749,000
Certificates of indebtedness
20 3 9 & 7 1 1 0 0 0
Treasury notes
Bonds -
58,062,-37,000
Treasury
•Savings (current redemption value)
77,197,077,050
1}7 6 9 6 9 6 7 l 6 3
Depositary
R. E. A. series
Investment series
Certificates of Indebtedness -
115,903,500
24, 4 9 0 , 0 0 0
4,6^5,663,000
"
Foreign series
lUq,877,PRQ
Certificates of indebtedness
7,3l6 763
Treasury notes
6,6l4, 6 2 6 , 0 0 0
699, 877 , 250
000
31.495.174.000
45.426.56^.000
2 9 7 QOll 1 "T7 Q £ ~
~ 7 Q (\(\f\ OTtQ
c-t _lr7 Q Q O
Excess profits tax refund bonds
Special notes of the United States :
Internat'l Monetary Fund series
129,680,100,713
550,000 , 000
Foreign Currency series
Special Funds -
Treasury bonds
Total interest-bearing
Matured, interest-ceased
Bearing no interest:
United States Savings Stamps
$122,097,597,000
7 p k Rf>D
T 0 0 2 000
Internat'l Develop. Ass'n. series
Inter-American Develop. Bank series
«»«!
Total
Guaranteed obligations (not held by Treasury):
000
2.15 "504 4 0 0
55.000.000
"
'
•"'
3 . 2 2 4 175
960
''' _ * ' ' T ' J« 1 tnuliir I . 1. 11
301,467,980,162
Interest-bearing :
Debentures: F. H. A. & D C Stad. Bds
468,233,350
Matured, interest-ceased
...,,1.596.750
Grand total outstanding
Balance face amount of obligations issuable under above authority
469.830.100
-^OX Q-X7 g i n o g p
£ flfco 1 tiQ*"Tttf
Reconcilement with Statement of the Public Debt Atlffilflt "$1 1 Qfe
(Daily Statement of the United States Treasury,
(Date)
A u g u s t . ^1 r 1 9 ^ 2
)
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
,
.
301,84l,94l 507
4 6 9 8^50 1 0 0
3 0 2 ^ 0 1 7 7 1 607*"
-zy 7 qg-i
301,937,810,262
D-608
7? ?
ft» MBII^S A-» «• M l f M i l i S ,
lit itff
» « $ § or t iMsiiii tj « m u r .MIX offm£»
^pftis^fl> aim^uuoed l*at awt&m *-** tm Umdrnta tar two «#*£*« of
Tr«aeur/ oillg, am aariaa %a aa am aMiUmaX
Xamrn at llm UXXa datad Jam f!# JJ&f »
md %m mm* mrtaa to m 4aUd Ba&tamlmr m$ \%2, aMah mm attawad m ^tm&or
U
mm apamd At %im mdmal mmma
maim m 3tgvt#i»te*r 17. tmidmt* ww® Invito for
#1-»300,000#OUO, w t>*srs*&outs, #f m«4syr bill© and for 1700,000,000, or tiwraaaama9 a
MMaw
bills, ttot <I«taU* of the two «#ri## are «# fellow-*
fMkay Tmmaim
UXXa
M2*day imaa*m maXXn
ftuns of waitfus
eotimrmfs vxati
f*Hfi
lltto
ff.t»
It
of the
«f tfe»
t*imy
JH*L
_.»3_««&1 i|B _ S
HJhlS v
2.9k9$
t#ra*
%*$my
of fJMay UUa bi for at the low prto* « i
«f IflMir bills bid tor at the lo* price mm aaaaptad
TOTAL H I S 8 S A m t * 8 fUft A§B A 0 « m S D If f M S M S . K J M ¥ I H»ta0ISi
Iflf11
Applied For
1,611,096,000
ftlllAMlpMA
Atlanta
Umm
Cltj
WaXMa
a« rrajissl#e©
tof-jyyi
31,^33,000
25,174,000
tMttffltt
23S,?82,OQO
3l4,S'96fOO0
^?fj?0f00©
a,/^3,oou
31,150*0©®
I|fi6$#oo6fo0o
spsr
651,^80,000
17,126,000
J0»ft?*MO
22,7^4 #000
22,S»>J,CK)0
1^,711,000
20,180,000
^,813,000
^8,1$0,000
m$m§m*(my
1,053,406,000
£,793,000
9J M U « 0 0 9
l0,,tH3,0Q0
T»JNW#QOQ
113,i?60,00Q
10,iil0,000
10,320,000
16,157,000
U,217,O00
kaaamimd
xz m»m
%x§m9m§m
4,523,000
?,2&5,000
36,260,000
a ,w,ooo
8,320,000
15,^69,000
67
,^261,000
$m*m$*mi
MMto 5»28li,6l9,GGO noacos ^tttiv« intern aeo*pt<Ki at tte iiti«|« pilot at 99.292
laaXadm 178,14,000 noncoaptfUttv* Uadars aseept<sd at the avorage price at 9b.§0}
m a m*m>® U*m at tha warn length amd tar %h» amm awma% immatad, the r^tur© on
%ham hiXXa v uld inwld« yie-l.ts of t*6$l* for the 91-d^y bills, am 3«05,i, for tbt
l$f«4n3r billa, i.atcr-:v:t r a U s on bill. «r® q w U d In temc ®£ M « dt»e:^t yith
th« mtm& ratetad to t>«» fac# aaowit of th« b l U e wn^able at statarltx rather than
the amount Invested aad th*lr Ito^th in aatwa wmtoar at amja relat*d to * 360-^ay
$aar* In contraft, yields on o«rtlfl08it©8, mtam, aad bonds &m compute la tarrn
at -imtmraat m %hm amount immU4$
md raXaim th* mmbar at dm/s resfflainifjg In an
inter* t pft^»#nt p©rlo- to iim aet^l is^ber ©f day* in the period, with
oomDmiO-i^g' if fsore than one. mvpan partad la involved.
i
CP !
TREASURY DEPARTMENT
W A S H I N G T O N , D.C.
FOR RELEASE A. M. NEWSPAPERS,
Tuesday, September 18, 1962.
September 17, 1962
RESULTS OF TREASURY'S WEEKLY BILL OFFERING
The Treasury Department announced last evening that the tenders for two series of
Treasury bills, one series to be an additional issue of the bills dated June 21, 1962,
and the other series to be dated September 20, 1962, which were offered on September 12,
were opened at the Federal Reserve Banks on September 17. Tenders were invited for
$1,300,000,000, or thereabouts, of 91-day bills and for $700,000,000, or thereabouts, of
182-day bills. The details of the two series are as follows:
RANGE OF ACCEPTED
91-day Treasury bills
182-day Treasury bills
COMPETITIVE BIDSj
maturing December 20, 1962
maturing March 21, 1963
Approx. Equiv.
Approx. Equiv.
Price
Price
Annual Rate
Annual Rate
W—I—W«l ill i K-w»>w-wi-»—P-w
High
Low
Average
99.300
99.292
99.293
2.769$
2.801$
2.796$ 1/
98.509 a/
98.498 "
98.503
2.949$
2.971$
2.962$ 1/
a/ Excepting three tenders totaling $400,000
Fl percent of the amount of 91-day bills bid for at the low price was accepted
12 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
8
40,839,000
1,611,098,000
32,487,000
31,433,000
25,174,000
25,263,000
238,982,000
34,596,000
27,370,000
41,993,000
38,150,000
117,621,000
$2,265,006,000
Accepted
ipted
UO,55U,000
851,280,000
17,126,000
30,947,000
22,794,000
22,953,000
149,711,000
28,406,000
20,180,000
36,813,000
28,150,000
52,480,000
fl,301,394,000 b/
Applied For
Accepted
W
12,3"207000 Jo,320,000
1,053,406,000
521,811,000
8,793,000
3,793,000
38,611,000
13,611,000
10,283,000
4,523,000
7,285,000
7,285,000
113,960,000
36,260,000
10,410,000
8,470,000
10,320,000
8,320,000
16,157,000
15,969,000
11,217,000
6,217,000
82,096,000
67,526,000
$1,374,858,000
,105,000 c/
V Includes $284,619,000 noncompetitive tenders accepted at the average price of 99
y Includes $78,154,000 noncompetitive tenders accepted at the average price of 98.503
1/ On a coupon issue of the same length and for the same amount invested, the return on
these bills would provide yields of 2.85$, for the 91-day bills, and 3.05$, 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
v a
! F- I n contrast, yields on certificates, notes, and bonds are computed in terms
01 interest on the amount invested, and relate the number of days remaininp in an
the actual number of days in the
_2£^2^S_ 3 T? n LS! r i2o
Per-<>d, with semiannual
compounding if more than one coupon period is involved.
D-509
2 ¥c
STATEMENT BY THE HONORABLE ROBERT V. ROOSA
UNDER SECRETARY OF THE TREASURY FOR MONETARY AFFAIRS
BEFORE THE SENATE COMMITTEE ON BANKING AND CURRENCY
ON S. 1413
TUESDAY, SEPTEMBER 18, 1962 —
10:00 A.M.
Mr. Chairman and Members of the Committee:
I am pleased to appear before you today in support of
S.1413. This bill would exempt from Federal regulation the
rates of interest that may be paid by commercial banks on time
deposits of foreign governments, their .central banks or other
monetary authorities, and international financial institutions
of which the United States is a member. The bill implements a
recommendation in the President's message to the Congress on the
Balance of Payments of February 6, 1961, and is identical with
a bill passed by the House of Representatives on September 11
of this year.
The broad objective of this bill is to permit our commercial
banks to adapt more effectively to the changing demands upon the
dollar, and thus support more fully its role as the principal
international reserve currency. Specifically, by permitting
banks to compete freely for the dollar balances of foreign
governments and certain international institutions - and by
encouraging them to undertake more aggressively the broader
D-610
- 2 -
3*7
range of services that could be supported by a growing volume
of such deposits - the alternative attractiveness to these
foreign institutions of purchasing or holding gold will be
reduced. The provisions of the bill cover, of course, all
foreign bodies authorized to purchase gold from the United
States.
The existing difficulty which this bill would eliminate
arises because the language of the Federal Reserve Act and the
Federal Deposit Insurance Act has been carefully interpreted to
mean that the interest rate ceilings on commercial bank time
and savings deposits must be applied to domestic and foreign
depositors alike (including foreign governments and international
institutions). Distinctions are possible, under present law,
between deposits of various maturities or types, or by reason
of the location of the deposit itself - but no distinction can
be based on the location or nature of the depositor. As a
result, the regulatory ceilings - contained in the familiar
Regulation Q of the Federal Reserve Board - have necessarily
been set on the basis of broad domestic considerations that
importantly affect banks throughout the country.
These domestic considerations cannot be neglected. However,
in today's world of convertible currencies and expanding world
trade, a mold cast for thousands of banks engaged solely in
domestic business no longer fits that part of our banking
activity that involves the servicing of international reserves the dollars that, alongside gold, stand behind the currencies of
other countries of the world. The United States has special
responsibilities and opportunities at the center of the world's
monetary system. To discharge these responsibilities with full
effectiveness, it is appropriate that we permit the free interplay of competitive market forces to determine the rates paid on
those foreign time deposits that are a part of the reserve funds
of foreign countries.
Interest rates alone are only one element - and by no means
the most important - in the complex of interrelated factors that
determine a decision on the part of a foreign country to hold
dollars as part of its international reserves. They cannot be
a substitute for confidence in the willingness and ability of
the United States to buy gold from, and sell it to, all
responsible monetary authorities upon demand at the established
price of $35 an ounce. Our ability to meet that commitment must
rest, in turn, on the enormous productive capacity of this country
and the ability of our industry to compete effectively in world
markets. But, the value of the dollar as an international
- 4 -
°
reserve and trading currency is also bulwarked by the efficient
facilities and wide variety of services provided foreigners by
American banking and other financial institutions.
This bill has a direct bearing on one of the kinds of
services that help to maintain the versatility and universal
acceptability of the dollar - the ability of our financial system
to provide a broad range of suitable investment media for foreign
funds, including particularly funds for which no immediate
disbursement is contemplated but which must be placed in investmen
media of unquestioned safety and ready availability in time of
need. Time deposits with our leading commercial banks have
traditionally provided to foreigners a desirable short-term
investment vehicle of this sort. These deposits provide a direct
return in the form of interest, and their maturity and other
terms can be flexibly adjusted to the needs of the foreign
investors. Moreover, they have the additional advantage of
encouraging close customer-banker relationships, helping to
support or assure lines of credit when needed and broadening
access to a host of other banking services.
For these reasons, some foreign governments and international
institutions prefer to hold at least a portion of their shortterm dollar holdings in the form of time deposits rather than
-
5
-
3S-/
in other, more impersonal, short-term investment media.
Thus,
our leading commercial banks are sometimes able to attract
into time deposits funds that might otherwise be transferred
to other countries or exchanged for gold. Today, over $2
billion of the funds of foreign governments and international
institutions are held in this form.
In recent years, however, the interest rate ceilings
applied to all time and savings deposits have sometimes
inhibited competition in this area - preventing commercial
banks from providing a return to foreign depositors as high as
they themselves would be willing to pay. To this extent, our
commercial banks have not been able to exercise their fiill
potential for attracting and retaining funds of official
foreign institutions in this country.
The decision which the competitive freedom permitted the
banks by this bill will influence is the final - but critical choice of foreign monetary authorities between holding dollars
or gold - or perhaps another currency. Time deposits are only
one of several forms in which dollars might earn interest, and
more basic considerations than the rate of return on short-term
investments lie behind most Judgments of foreign governments to
purchase - or to refrain from the purchase of - gold. nevertheless.
the flexibility permitted by this bill will be a worthwhile
addition to our total effort to achieve a pattern of financial
arrangements equal to the task of supporting the position of
the dollar - and with it, the whole international monetary system
based upon the use of the dollar, side by side with gold, as
a reserve currency.
I should emphasize that this bill does not represent any
new departure in policy, but rather supplements and parallels
other measures that have been and are being taken by our Governmen
to provide attractive facilities for the investment of funds of
official foreign institutions in the American market. For
instance, the Treasury during the past year has, on several
occasions, used its authority to provide official foreign
institutions with special non-marketable issuesof U. S. Government
debt especially tailored to their maturity requirements. The
Congress last year granted to all foreign central banks tax
exemption on interest earned on their holdings of U. S. Government
securities — an exemption formerly limited to foreign governments,
to certain types of central banks, or to countries where exemption
was provided by terms of a specific tax treaty. And the bill
would complement our efforts to keep the general level of shortterm rates in this country reasonably attractive in comparison
to those available abroad.
-
7
-
These devices have been helpful, but they cannot supplant
the efforts of commercial banks. Within the basic framework
of free, competitive markets, both Government and private finance
have a role to play in achieving as diversified and attractive
facilities for the investment of foreign official funds as we
can.
In our judgment, the narrow exemption from regulation
provided by this bill will create no danger that intense
competition between banks for these deposits could in any way
undermine the safety and stability of the banking system.
Competition for these deposits is virtually confined to the
larger commercial banks able to maintain a full range of costly
facilities required to service foreign accounts. These banks
are in a position to make informed judgments concerning the
risks and returns involved in this business and, in fact, have
had long experience in competing for such deposits at home and
abroad. Moreover, deposits of this type will, at best, account
for but a small portion of their total resources.
I should emphasize, too, that this bill would make no
distinctions among private depositors - domestic or foreign.
Wherever located, private depositors would remain subject to the
same ceiling rates of interest, and their own decisions in holding
3 ?io
-
8 -
dollars or another currency here or abroad will riot be influence
The only distinction made is that between, on the one hand, the
time deposits of foreign governments and monetary authorities
and international institutions and, on the other hand, those of
all others - a distinction that recognizes the special conditions
and problems inherent in our evolving international monetary
arrangements and related to our long-established policies in
buying and selling gold.
It would be a mistake to think of this bill as a major part
of our attack on our gold and balance of payments problem. It
will have no direct effect on our balance of payments deficit,
as such, because it will not reduce the supply of dollars passing
into the hands of foreigners. It will not permit us to create
for ourselves a domestic island of easy money and low interest
rates for borrowers at home, while at the same time attracting
funds from abroad with very high interest rates — for no bank
will be prepared to offer uniquely high rates to foreign
depositors when it, itself, cannot lend or invest those funds
profitably in this country. But the bill will help strengthen
our ability, in a limited but nonetheless significant area, to
discharge effectively our responsibilities as custodian of a
reserve currency, and to remove one possible barrier to the
holding of dollars by foreign official institutions in preference
to gold.
I urge your speedy approval in support of that worthwhile
objective.
* 20 *
Continued effort %» also required by the surplus countries to
open their markets to foreign products and borrowers, to minimize
the foreign exchange costs of our defense deployments, and to assum
a fairer share of the burden of economic assistance.
Those are the basic challenges ®f the day. Thay are challenges
that earn and must he met. They can, of course, he met most readily
by cooperative action among nations. But we recognize that in the
final analysis, each nation must accept the responsibility for taki
the actions needed to maintain the soundness of its own currency in
international markets. This we In the United States are fully
prepared to do, in the knowledge that a sound dollar la essential n
only for us at home, hut also for the continued and healthy growth
of trade and commerce throughout the entire free world*
0O0
• IS - i *
That is the signlfic&aso of thftm&amtA ajmat&ttem a*range»ents
which are hating established through the Fund by m mmbaw of the
industrialized countries. Ho e*pect to roeoivo final approval of
these arrang«Kien*a for tho United Statoa fro» our Congress before
the end of the current legislative seasion, ftipwrt to earlier actios
~^^r - -^ar^B^^aaa^aM aF^P^es*-™»-^*^s^•P^P^MWOQ^ ^P-^~e^ffw-^>e#.<wp^s—^W y •no'^^ff . ^_s^p^v^^~^~•••ipsewm-^a* ^ a^iam--^m<aqp ~stw*-iw*aa . _^~^•*
miimegtem* , •• -m Mgg$ fK&i£i*s« St? *e r#£?^ai*« that: is the
*\ HotgwH ie^ we haryo t&Uisted act isms ia other direction* to
reinforce the defenses of our tsaaetary eysces, nu^lnowm h% «d
rniniloannrlriii rhe facilities aRraULabla through aba Fuad. these
aew.laltiatives started saace thaa a year a*o, when the United States
.for the first tie* in a generation began to iotervona In the foreign
part of its international reserves, working closely with other
countries, various techniques have been carefully tested in a wide
- 14 -
from our overseas investments mod the Improved eenrpetitlve position
of our exports, underlie our goal of the early achievement of* balan
in our international payment*.
•~ Progress toward a basic eqoliibriis* in tho payments position of
deficit and surplus countries alike is tho true foundation for any
lasting international monetary stability, but alone it is not enough
We must also he prepared to eope with those sudden, and potentially
• ••_-" * •- it
large, movements of "short-term funds that can he set off, often
with little or no warning, by a variety ©f^influenees?c This is part
a matter of the amount of international liquidity that exists at a
given time, which in*turn rests on our joint ability to maintain the
usefulness of hoy currencies, side by side with gold itself. But
equally important, it is essential that we have the facilities for
quickly mobilizing additional resources! when and aa they are required, and applying them effectively at the point of need. • •*•**
That is the
^
{ 1/
- 13 roughly |2.6 billion a year. Through our own economies, and ar-
rangements for the procurement of additional American equipment and
services by our allies, that figure will drop to about $1-3/4 billi
in 1962. We firmly intend to bring about substantial further reduc-
tions over the next few years. Our intention reflects our convictio
that a more equitable sharing of these defense burdens can and must
he reached.
Our economic assistance programs total about $4 billion a year.
fete are aiming to provide 30 percent of that aid in the form of
United States goods and services, as compared with an average of
about 2/3 in recent years. Meanwhile, wo look to other industrialis
free nations to provide a fair share of the expanding needs for
development assistance.
The reduction in dollar outflows that are being achieved by
these and other Government actions, together with the growing retur
from our overseas
3?/
* 19 In ell these ways, we are justified la looking back upon the
past year as a period of striking progress in strengthehing our
international monetary system —
a system that, in the lest analysis,
rests firmly cm the maintenance of the dollar et its present gold
value ma a key reserve and trading currency.
But, necessary as it has been to strengthen the defenses against
temporary swings of short-term funds, we must not allow progress in
this area to divert our attention from the fundamental need to
achieve an overall equilibrium in basic trade and investment flows.
For the United States, this requires continued mnd vigorous
effort in many directions. Me must maintain and improve the competitive position of our exports through price stahliity at home and
aggressive selling abroad.
We must also continue to reduce the
dollar flows associated with our defense effort overseas and with
our widespread economic assistance programs*
Continued effort
2f> *
- IS ~
political and economic developments serve mo legitimate interest.
It is equally clear that It 4&am not serve the interests of the
official participants in the market to engage is treassotiona*in £ ^
ignorance of their implications for each other, its p-mmm ^®M
That is why the authorities of a auafcer of countries have begun
to exehange information snd to eoordinete their operatic** in the Hi
gold market — mot om the basis of hard and fast rules, hut in accordance with common understandings reacir^ia frequent consultations.
The object is^to contain within a reasonable rsage those fluctuations
which occur in response to passing influences — toiemphasise that the
private purehase of gold is tsalikeiy to yield speculative profits, and
instead can he expected to he a eoetiy and unrewsrding use of funds.
*fce
In ell these
3f^
- 17 action to meet unusual pressures when end if they develop, end to
contain and diffuse their impact.
The potential value of such cooperative arrangements was
vividly demonstrated by the experience in 1961 when sterling was
under heavy pressure. More recently the shock of the temporary Canadi
difficulties and the potentially disturbing offsets of the sharp brea
in the stock markets of the united States and other industrialised
countries this spring were accommodated smoothly and of festively.
Responsible cooperation among monetary authorities has also
borne fruit in new techniques for handling transactions on the London
gold market so that it may better fulfill its basic purpose of
providing a workable and flexible mechanism for distributing the supp
of newly mined gold. It is clear that temporary and erratic fluctuations in the market price of gold in response to reel or fancied
political and
- 16 -
variety of situations. Their usefulness for dealing with Incipient
disturbances in the exchange markets and unusual swings of short-t
money has, I believe, now become clear to all.
The amounts of convertible currencies presently at the disposal of the United States, largely as a result of reciprocal
currency agreements and direct Treasury borrowing, are not inconse
quential. They amount to approximately $900 million in cash or
standby facilities. Should large and potentially disruptive flows
of funds actually develop, these facilities could be further enlar
In addition, should the need arise, the united States is also pre-
pared, in concert with other affected countries, to provide forwar
exchange to the market, thereby facilitating the holding by privat
parties abroad of dollars that have passed into their hands for wh
may prove enentually to have been a temporary period. In these way
a pattern has been established for prompt and effective internatio
action to
- 12 $3.7 billion during the years 1958-60. These eight-month results
were influenced both hy a substantial inflow of Canadian funds
during the first half of the year, and hy a sharp reversal of these
flows during July and August.
A particularly encouraging development for the longer run has
been our ability to maintain a decidedly favorable balance pf trade,
even while domestic recovery was generating a sizeable increase in
our imports. An important factor, of course, has been price stabilit
which laid the foundation for the increase of 6-1/2 percent which w
achieved in our exports during the first half of this year as compa
to the same period a year ago. Me intend to continue to strengthen
competitive capacity of our industry over the coming years. That is
one of the chief reasons why our tax program has placed so much
emphasis on improving the climate for productive investment.
In recent years, our military effort in defense of the free
world has resulted in. a net balance of payments outflow averaging
roughly $2.6 bill
S7^
-n goods and services.
At the same time, in cooperation with some of the principal
surplus covin tries, a reverse capital flow has developed in the fo
of prepayments of debt owed to the United States -- a flow that so
far this year has totalled nearly $550 million from France, Italy,
and Sweden. And it is also worth pointing out that the return flow
of earnings from our rapidly growing private investments abroad,
which now amount to nearly $60 billion, was running at an annual
rate of $3.6 billion duxting the first half of this year — $300
million higher than in 1961, and $1.1 billion higher than just four
years ago in 1958.
So far as our overall balance of payments is concerned, further
improvement has been apparent. The deficit for the first eight
months of the year ran at an annual rate somewhat over $1-1/2 billi
in contrast to last year's $2-1/2 billion, and to the average of
$3.7 billion
w
- 10 been striving for in freeing trade and payments hetween countries.
It would not be in keeping with our special responsibilities as
custodian of a reserve currency. And it would be contrary to our
own long-run interest in ensuring that funds move to where they wil
be used most productively.
The magnitude of this type of portfolio investment, in relation
to our balance of payments, should not be overstated. Foreign bonds
and notes totalling just under $600 million were sold in our market
during the first six months of this year. Of this amount as much as
one-third was for the purpose of refunding other dollar obligations
Often a *£uarter —
and sometimes much more —
of the individual
issues were taken up by Investors abroad: one indication that it is
market facilities as much as long-term rate differentials that tend
to attract these issues to the New York market. Moreover, in some
cases, the new funds raised have been used for investment in
productive facilities in this country or for purchases of American
11 *
- 9 -
the United States and quite futile in terms of our balance of paymen
It is true that a sizeable numher of foreign securities have
been floated in the SSew York market this year. However, such
borrowing is attracted as taucf? by our well-developed market
facilities and by our complete freedom from controls as by relativel
small differences in overall interest costs to borrowers — costs
that for many foreign offerings have run to 6 percent or more.
1 have suggested on other occasions that the fundamental, long-run
solution to the anomaly apparent today — with borrowers in seme of
the surplus countries seeking credit in a deficit country — lies in
the further development of the capital markets in Western Europe and
the abandonment of outmoded controls and restrictions on the free
flow of capital that still are far too prevalent.
Imposition of capital controls by the United States would not
be a satisfactory solution. It would he contrary to all that we have
been striving
- $ -
becoming available in the market. Bam of those fuaads will come from
the rapidly growing savings accounts in our commercial banks. Some
will represent a prudent increase in the money supply, as our productive capacity increases. Meanwhile, the Treasury will continue to
seek opportunities for placing longer-term bonds with individuals
and with investment institutions.
That should not he interpreted as an intention to press ahead
with long-term financing, or to constrict the money supply, to the
point of impeding the availability of funds for buaineas investment.
Should the economic advance generate a growing and buoyant demand
for funds for domestic investment, with consequent pressures on the
supply of resources, a moderate rise in long-terra interest rates wou
be a natural and appropriate response. But a blunt effort at this
time to push long-term rates up, In an attempt to crowJout of our
markets some marginal amount of foreign borrowing, seems to me both
contrary to the needs of the free world for an expanding economy in
the United States
- 7of the outstanding Federal debt. The slow but steady shortening of
the average maturity of the marketable debt that had proceeded
throughout the 1950*e has been reversed. After allowing for the
effects of last week's advance refunding, the average length of the
debt has been increased hy 20 percent since January, I960. The
general public now has more of its funds in Government bonds of
longer than 20-year maturity than at any time since the eerly fiftie
We have not jeopardised prospects for price stability hy monetising
excessive amounts of debt through the banking system. The money
supply — demand deposits and currency — is today less than 2 percent
larger than a year ago -- certainly no cause for inflationary concer
during a period in which overall economic activity has risen hy some
6 percent•
As we move ahead in financing the current budget deficit, we
will continue to tap a cross section of the j^ast amount of funds
becoming available
* 6 -
supply of credit to support domestic expansion, while simultaneously
maintaining a rough equality between the return available on shortterm investments in the United States and in the leading money
markets abroad. We have concentrated the bulk of new Treasury
borrowing in the short-term area of the market, and, as a result, ke
short-term rates are now a full half of one percent higher than a
year ago. Meanwhile funds for productive long-term investment have
remained in ample supply. And long-term rates for corporate bonds,
mortgages, and state and local government securities — which have a
far more important relationship to domestic investment — have held
at or below the levels to which they had declined in the recession
months of 1961.
While concentrating our new cash borrowing in the short-term area,
we have, at the same time, undertaken a significant restructuring
of the outstanding
- 5 countries. We intend to submit the remainder of the tax reform
program to Congress in January at the start of its next session.
Although we had hoped for a balanced budget in the current
fiscal year, ending next June 30, we now recognise that another
moderate budget deficit appears likely. Because our business re-
covery has not mssved as rapidly as we had anticipated, revenues wil
fail below projected levels. However, the currently envisaged deficit
accompanied hy appropriate monetary and debt management policies,
should not give rise to fears of inflation. For our problem is not
excessive dammd and scarce resources, hut rather excess capacity,
too much unemployment and a tax structure that has become a dreg on
productivity, new investment and growth.
With this in mind, the basic aim of our monetary and debt
management policies over the past year has been to assure an ample
supply of
- 4physical resources. To meet our obligations to ourselves end to
other nations, we must put those idle resources to work — and we
must do so in ways that will add to our productive efficiency and
reinforce the prospects for price stability.
Broad agreement has developed among our citizens that one of the
keys to progress is tax reform — reform designed to stimulate in*
vestment and to release the brakes on growth inherent in our presen
rate structure. A good beginning has already been made. The tax
treatment of depreciation has been thoroughly modernized. A 7 per-
cent tax credit -- similar to the investment allowances now used in
many other countries -- has been approved by both Houses of our
Congress and is expected to become law shortly. Together and for th
first time in many years, these reforms will place investment in ne
equipment in the United States — so far as taxes are a factor — on
a basis roughly comparable to that in the other industrialized
countries.
4q&
- 3 growth and sizable external deficits during the later 1950's. We are
now attacking both of these problems with vigor, and the results are
encouraging.
Since the end of the mild recession 18 months ago, the value of
total output has expanded by more than $35 billion, or roughly 11 per
cent. Unemployment has been appreciably reduced. At the same time
increases in average wage rates in manufacturing — roughly 3 percent
per year — have been smaller than during other postwar recoveries,
and have remained within the limits of rising productivity.
Prices
for manufactured goods are now slightly lower than during the recession
months of 1961 — and in fact have remained virtually stable for four
years.
Although our economy continues to move steadily ahead unmarred
by the excesses that characterised earlier periods of expansion, we
are not satisfied.
The rate of investment in new productive facilities
has continued to lag, and we still have too many idle human and
physical resources
- 2 -
Cyprus, Kuwait, Liberia, Senegal, Sierra Leone, Somalia, Tanganyika,
and Togo — and to express my pleasure over the large number of
pending applications for membership, of which many are on our agenda
One basic function of our international monetary system is to
assure the time and resources necessary to facilitate the adjustment
that are an inevitable consequence of economic change and progress.
But, no matter how soundly conceived and operated, no monetary ar-
rangement can absolve a country of the responsibilities that go hand
in hand with the benefits of participating in world trade and invest
ment. That is why the first order of business for each of us must
be the development of programs that combine external financial equil
brium with economic growth at home.
There are no simple prescriptions that can be readily
utilised at all times and by every country. That is recognised
by the United States, which experienced relatively slow
growth and
HOLD FOR RELEASE UPON DELI¥ERY,
SCHEDULED FOR 10:30 A.M.
<4o%*
RQIAI^S OF THE HONORABLE DOUGLAS DILLON,
SECRETARY OF THE TREASURY OF THE UNITED
STATES AND GOVERNOR OF THE INTEENATIONAL
MONETARY FUND
Before the
ANNUAL MEETING OF THE INTERNATIONAL
MONETARY FUND
/QlZovmm
A.M., EDT
SEPTE&fflSR 19, 1962
First of all I wish to pay tribute to our retiring Deputy Managing
Director, Mr. Marie Cochran. His long diplomatic and financial ex- \
perience has been an important element In the Funds success, and his
vigor and impartiality have enhanced its high standards.
The Annual Report makes clear that the International Monetary
Fund has had an exceptionally active and successful year. That Is
evident from the statistical summary of the Fund's operations — tota
drawings by 22 countries of $2.2 billion spread over 10 different
currencies, and repurchases of $1.3 billion. It is also evident in
the continued growth of the Fund's membership. I should like to
welcome the new members who have Joined since we met in Vienna --
Cyprus, Kuwait, Liberia,
HOLD FOR RELEASE UPON DELIVERY,
SCHEDULED FOR 10:30 A.M.
REMARKS OF THE HONORABLE DOUGLAS DILLON,
SECRETARY OF THE TREASURY OF THE UNITED
STATES AND GOVERNOR OF THE INTERNATIONAL
MONETARY FUND
Before the
ANNUAL MEETING OF THE INTERNATIONAL
MONETARY FUND
10:30 A.M., EDT
SEPTEMBER 19, 1962
First of all I wish to pay tribute to our retiring Deputy Managing
Director, Mr. Merle Cochran. His long diplomatic and financial
experience has been an important element in the Fund's success, and
his vigor and Impartiality have enhanced its high standards.
The Annual Report makes clear that the International Monetary
Fund has had an exceptionally active and successful year. That is
evident from the statistical summary of the Fund's operations — total
drawings by 22 countries of $2.2 billion spread over 10 different
currencies, and repurchases of $1.3 billion. It is also evident In
the continued growth of the Fund's membership. I should like to welcome
the new members who have joined since we met in Vienna -- Cyprus,
Kuwait, Liberia, Senegal, Sierra Leone, Somalia, Tanganyika, and
Togo — and to express my pleasure over the large number of pending
applications for membership, of which many are on our agenda.
One basic function of our international monetary system is to
assure the time and resources necessary to facilitate the adjustments
that are an inevitable consequence of economic change and progress^
But, no matter how soundly conceived and operated, no monetary
arrangement can absolve a country of the responsibilities that go
hand in hand with the benefits of participating in world trade and
investment. That is why the first order of business for each of us
must be the development of programs that combine external financial
equilibrium with economic growth at home.
There are no simple prescriptions that can be readily utilized
at all times and by every country. That is recognized by the
United States, which experienced relatively slow growth and sizable
external deficits during the later 1950's. We are now attacking
both of these problems with vigor, and the results are encouraging.
Since the end of the mild recession 18 months ago, the value of
total output has expanded by more than $55 billion, or roughly
11 percent. Unemployment has been appreciably reduced. At the
same time increases in average wage rates in manufacturing — roughly
3 percent per year — have been smaller than during other postwar
recoveries, and have remained within the limits of rising
D-611
productivity.
for years.
manufactured
goods
areIn
now
slightly
lower
virtually
than duringstable
thePrices
recession
for four
months
of 1961
— and
fact
have remained
- 2 Although our economy continues to move steadily ahead unmarred
by the excesses that characterized earlier periods of expansion, we
are not satisfied. The rate of Investment in new productive'
facilities has continued to lag, and we still have too many idle human
and physical resources. To meet our obligations to ourselves and to
other nations, we must put those idle recources to work — and we
must do so In ways that will add to our productive efficiency and
reinforce the prospects for price stability.
Broad agreement has developed among our citizens that one of the
keys to progress is tax reform — reform designed to stimulate
investment and to release the brakes on growth inherent in our present
rate structure. A good beginning has already been made. The tax
treatment of depreciation has been thoroughly modernized. A 7 percent
tax credit -- similar to the investment allowances now used in many other
countries — has been approved by both Houses of our Congress and is
expected to become law shortly. Together and for the first time in
many years, these reforms will place investment in new equipment in
the United States — so far as taxes are a factor — on a basis
roughly comparable to that in the other industrialized countries.
We intend to submit the remainder of the tax reform program to
Congress in January at the start of its next session.
Although we had hoped for a balanced budget in the current
fiscal year, ending next June 30, we now recognize that another
moderate budget deficit appears likely. Because our business recovery
has not moved as rapidly as we had anticipated, revenues will fall
below projected levels. However, the currently envisaged deficit,
accompanied by appropriate monetary and debt management policies,
should not give rise to fears of inflation. For our problem is not
excessive demand and scarce resources, but rather excess capacity,
too much unemployment and a tax structure that has become a drag on
productivity, new investment and growth.
With this in mind, the basic aim of our monetary and debt
management policies over the past year has been to assure an ample
supply of credit to support domestic expansion, while simultaneously
maintaining a rough equality between the return available on shortterm investments in the United States and in the leading money
markets abroad. We have concentrated the bulk of new Treasury
borrowing in the short-term area of the market, and, as a result, key
short-term rates are now a full half of one percent higher than a
year ago. Meanwhile funds for productive long-terra investment have
remained in ample supply. And long-term rates for corporate bonds,
mortgages, and state and local government securities — which have a
far more important relationship to domestic investment — have held
at or below the levels to which they had declined In the recession
months of 196l.
While concentrating our new cash borrowing in the short-term
area, we have,of
restructuring
atthe
theoutstanding
same time, Federal
undertaken
debt.
a significant
The slow but steady
- 3-
u
shortening of the average maturity of the marketable debt that had
proceeded throughout the 1950*s has been reversed. After allowing for
the effects of last week's advance refunding, the average length of the
debt has been increased by 20 percent since January, I960. The
general public now has more of its funds in Government bonds of
longer than 20-year maturity than at any time since the early fifties.
We have not jeopardized prospects for price stability by monetizing
excessive amounts of debt through the banking system. The money
supply — demand deposits and currency — is today less than 2 percent
larger than a year ago — certainly no cause for inflationary concern
during a period in which overall economic activity has risen by some
6 percent.
As we move ahead in financing the current budget deficit, we
will continue to tap a cross section of the vast amount of funds
becoming available in the market. Some of those funds will come from
the rapidly growing savings accounts in our commercial banks. Some
will represent a prudent Increase in the money supply, as our
productive capacity increases. Meanwhile, the Treasury will continue
to seek opportunities for placing longer-term bonds with individuals
and with investment institutions.
That should not be interpreted as an intention to press ahead
with long-term financing, or to constrict the money supply, to *the
point of impeding the availability of funds for business investment.
Should the economic advance generate a growing and buoyant demand
for funds for domestic investment, with consequent pressures on the
supply of resources, a moderate rise in long-term interest rates
would be a natural and appropriate response. But a blunt effort at this
time to push long-term rates up, in an attempt to crowd out of our
markets some marginal amount of foreign borrowing, seems to me both
contrary to the needs of the free world for an expanding economy In
the United States and quite futile in terms of our balance of
payments.
It is true that a sizable number of foreign securities have
been floated in the New York market this year. However, such
borrowing is attracted as much by our we11-developed market
facilities and by our complete freedom from controls as by relatively
small differences in overall interest costs to borrowers — costs
that for many foreign offerings have run to 6 percent or more.
I have suggested on other occasions that the fundamental, long-run
solution to the anomaly apparent today — with borrowers in some of
the surplus countries seeking credit in a deficit country -- lies in
the further development of the capital markets in Western Europe and
the abandonment of outmoded controls and restrictions on the free
flow of capital that still are far too prevalent.
Imposition of capital controls by the United States would not
be a satisfactory solution. It would be contrary to all that we have
used
custodian
long-run
been
It would
most
striving
not
interest
productively.
of be
afor
reserve
inin
keeping
freeing
ensuring
currency.
with
trade
that
our
And
funds
and
special
It
payments
would
move
responsibilities
to
be
between
where
contrary
they
countries.
to
will
as
ourbe
own
-4The magnitude of this type of portfolio investment, in relation
to our balance of payments, should not be overstated. Foreign bonds
and notes totalling just under $600 million were sold in our market
during the first six months of this year. Of this amount as much as
one-third was for the purpose of refunding other dollar obligations.
Often a quarter — and sometimes much more — of the individual
issues were taken up by Investors abroad: one indication that it is
market facilities as much as long-term rate differentials that tend
to attract these issues to the New York market. Moreover, in some
cases, the new funds raised have been used for investment in
productive facilities in this country or for purchases of American
goods and services.
At the same time, in cooperation with some of the principal
surplus countries, a reverse capital flow has developed in the form
of prepayments of debt owed to the United States — a flow that so
far this year has totalled nearly $550 million from France, Italy,
and Sweden. And it is also worth pointing out that the return flow
of earnings from our rapidly growing private investments abroad,
which now amount to nearly $60 billion, was running at an annual
rate of $3-6 billion during the first half of this year -- $300
million higher than in 196l, and $1.1 billion higher than just four
years ago in 1958.
So far as our overall balance of payments is concerned, further
improvement has been apparent. The deficit for the first eight
months of the year ran at an annual rate somewhat over $1-1/2 billion,
in contrast to last year's $2-1/2 billion, and to the average of
$3.7 billion during the years 1958-60. These eight-month results
were influenced both by a substantial inflow of Canadian funds
during the first half of the year, and by a sharp reversal of these
flows during July and August.
A particularly encouraging development for the longer run has
been our ability to maintain a decidedly favorable balance of trade,
even while domestic recovery was generating a sizable increase In
our imports. An important factor, of course, has been price
stability which laid the foundation for the increase of 6-1/2 percent
which we achieved in our exports during the first half of this year
as compared to the same period a year ago. We intend to continue
to strengthen the competitive capacity of our industry over the
coming years. That is one of the chief reasons why our tax program
has placed so much emphasis on Improving the climate for productive
investment.
In recent years, our military effort in defense of the free
world has resulted in a net balance of payments outflow averaging
roughly^ $2.6 billion a year. Through our own economies, and
arrangements
for
procurement
of
additional
American
equipment
and
conviction
and
reductions
in
services
1962.
must by
be
We
over
that
our
reached.
firmly
allies,
the
athe
more
next
Intend
equitable
that
few
toyears.
figure
bring
sharing
will
about
Our drop
of
intention
substantial
these
to
about
defense
reflects
further
$1-3A
burdens
our
billion
can
- 5Our economic assistance programs total about $4 billion a year.
We are aiming to provide 80 percent of that aid in the form of
United States goods and services, as compared with an average of
about 2/3 in recent years. Meanwhile, we look to other industrialized
free nations to provide a fair share of the expanding needs for
development assistance.
The reduction in dollar outflows that are being achieved by
these and other Government actions, together with the growing
returns from our overseas investments and the improved competitive
position of our exports, underlie our goal of the early achievement
of balance in our international payments.
Progress toward a basic equilibrium in the payments position of
deficit and surplus countries alike is the true foundation for any
lasting international monetary stability, but alone it is not enough.
We must also be prepared to cope with those sudden, and potentially
large, movements of short-term funds that can be set off, often
with little or no warning, by a variety of Influences. This is
partly a matter of the amount of international liquidity that exists
at a given time, which in turn rests on our joint ability to maintain
the usefulness of key currencies, side by side with gold itself. But
equally important, it is essential that we have the facilities for
quickly mobilizing additional resources, when and as they are
required, and applying them effectively at the point of need.
That is the significance of the special borrowing arrangements
which are being established through the Fund by a number of the
industrialized countries. We expect to receive final approval of
these arrangements for the United States from our Congress before
the end of the current legislative session. Thanks to earlier
action by other participating countries, the agreements will then
become effective.
Meanwhile, we have initiated actions in other directions to
reinforce the defenses of our monetary system, supplementing and
complementing the facilities available through the Fund. These
new initiatives started more than a year ago, when the United States
for the first time in a generation began to intervene in the foreign
exchange markets and to hold convertible foreign currencies as a
part of its international reserves. Working closely with other
countries, various techniques have been carefully tested in a wide
variety of Situations. Their usefulness for dealing with incipient
disturbances in the exchange markets and unusual swings of shortterm money has, I believe, now become clear to all.
The amounts of convertible currencies presently at the disposal
of the United States, largely as a result of reciprocal currency
agreements and direct Treasury borrowing, are not Inconsequential.
They amount to approximately $900 million in cash or standby
facilities. Should large and potentially disruptive flows of funds
- 6actually develop, these facilities could be further enlarged. In
addition, should the need arise, the United States is also prepared,
in concert with other affected countries, to provide forward
exchange to the market, thereby facilitating the holding by private
parties abroad of dollars that have passed into their hands for what
may prove eventually to have been a temporary period. In these ways,
a pattern has been established for prompt and effective international
action to meet unusual pressures when and if they develop, and to
contain and diffuse their Impact.
The potential value of such cooperative arrangements was
vividly demonstrated by the experience in 1961 when sterling was
under heavy pressure. More recently the shock of the temporary
Canadian difficulties and the potentially disturbing effects of the
sharp break in the stock markets of the United States and other
industrialized countries this spring were accommodated smoothly and
effectively.
Responsible cooperation among monetary authorities has also
borne fruit in new techniques for handling transactions on the London
gold market so that it may better fulfill its basic purpose of
providing a workable and flexible mechanism for distributing the
supply of newly mined gold. It is clear that temporary and erratic
fluctuations in the market price of gold In response to real or
fancied political and economic developments serve no legitimate
interest. It is equally clear that it does not serve the Interests
of the official participants in the market to engage in transactions
in ignorance of their implications for each other.
That is why the authorities of a number of countries have begun
to exchange information and to coordinate their operations in the
gold market — not on the basis of hard and fast rules, but in
accordance with common understandings reached In frequent
consultations. The object is to contain within a reasonable range
those fluctuations which occur in response to passing influences —
to emphasize that the private purchase of gold is unlikely to yield
speculative profits, and instead can be expected to be a costly and
unrewarding use of funds.
In all these ways, we are justified in looking back upon the
past year as a period of striking progress in strengthening our
international monetary system — a system that, in the last analysis,
rests firmly on the maintenance of the dollar at its present gold
value as a key reserve and trading currency.
But, necessary as it has been to strengthen the defenses against
temporary swings of short-term funds, we must not allow progress in
this area to divert our attention from the fundamental need to
achieve an overall equilibrium in basic trade and investment flows.
- 7For the United States, this requires continued and vigorous
effort in many directions. We must maintain and improve the
competitive position of our exports through price stability at home
and aggressive selling abroad. We must also continue to reduce the
dollar flows associated with our defense effort overseas and with
our widespread economic assistance programs.
Continued effort is also required by the surplus countries to
open their markets to foreign products and borrowers, to minimize
the foreign exchange costs of our defense deployments, and to assume
a fairer share of the burden of economic assistance.
Those are the basic challenges of the day. They are challenges
that can and must be met. They can, of course, be met most readily
by cooperative action among nations. But we recognize that in the
final analysis, each nation must accept the responsibility for taking
the actions needed to maintain the soundness of its own currency in
international markets. This we in the United States are fully
prepared to do, in the knowledge that a sound dollar is essential
not only for us at home, but also for the continued and healthy
growth of trade and commerce throughout the entire free world.
0O0
44
3e_@-g-C*mPMt
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. 418 (current revision) 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-
r/*s
HE_ta-<M®8g£a?
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
ovn account. Tenders will be received without deposit from incorporated banks
and trust companies and from responsible and recognized dealers in investment
securities. Tenders from others must be accompanied by payment of 2 percent of
the face amount of Treasury bills applied for, unless the tenders are accompanied
by an express guaranty of payment by an incorporated bank or trust company
Immediately after the closing hour, tenders will be opened at the Federal
Reserve Banks and Branches, following which public announcement will be made by
the Treasury Department of the amount and price range of accepted bids. Those
submitting tenders will be advised of the acceptance or rejection thereof. The
Secretary of the Treasury expressly reserves the right to accept or reject any
or all tenders, in whole or in part, and his action in any such respect shall be
final. Subject to these reservations, noncompetitive tenders for $ 200,000 or
less for the additional bills dated
June 28, 1962
pxy
ing until maturity date on December 27, 1962
, (
91
days remain-
npsr
) and noncompetitive tenders for
P^
$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
Banks on
September 27, 1962
in cash or other immediately available funds or
JS3£
in a like face amount of Treasury bills maturing September 27, 1962
p§5
Cash
,t
*> * 3 • > # ^ # 4} *J _/« V _•' * _V 9,
TREASURY DEPARTMENT
Washington
FOR IMMEDIATE RELEASE, September 19, 1962
:mxxx)_Q--mxK^^^
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 $ 2,000,000,000 , or thereabouts, f
cash and in exchange for Treasury bills maturing September 27, 1962 , in the amount
P3
of $1,900,7.12,000 , as follows:
91 -day bills (to maturity date) to be issued September 27, 1962
,
in the amount of $1,500,000,000 , or thereabouts, representing an additional amount of bills dated June 28, 1962 ,
m
and to mature
December 27, 1962 , originally issued in the
wr
amount of $700,197,000
, the additional and original bills
pcxj
to be freely interchangeable.
182 -day bills, for $700,000,000 , or thereabouts, to be dated
(XE_$
paj
September
27, 1962
, and
to mature
March 28,
1965
.
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 onl
and in denominations of $1,000, $5,000, $10,000, $50,000, $100,000, $500,000 an
$1,000,000 (maturity value).
Tenders will be received at Federal Reserve Banks and Branches up to the
Daylight Saving
closing hour, one-thirty p.m., Eastern/ft&IB___*ktime, Monday, September 24, 1962
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
WUJUIM',, yj. i
miu„mry.nm,Jme.mlAmsm!mtm«mtm,ammam
WASHINGTON. D.C. \ ^ f r ^ /
September 19, 1962
FOR IMMEDIATE RELEASE
TREASURY'S WEEKLY BILL OFFERING
The Treasury Department, by this public notice, invites tenders
„°or £™ /EST168 o f T r e a s u r y Dills to the aggregate amount of
$ 2,000,000,000, or thereabouts, for cash and in exchange for
Treasury bills maturing September 27,1962, in the amount of
$1,900,712,000, as follows:
91 -day bills (to maturity date) to be issued September 27, 1962
in the amount of $1,300,000,000, or thereabouts, representing an
'
additional amount of bills dated June 28, 1962,
and to
mature December 27, 1962, originally issued in the amount of
$700,197,000,
the additional and original bills to be freely
interchangeable.
182-day bills, for $700,000,000, or thereabouts, to be dated
September 27, 1962,and to mature March 28, 1963.
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, $50,000, $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 p.m., Eastern Daylight Saving
time, Monday, September 24, 1962.
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-612
accompanied by an express guaranty of payment by an incorporated bank
or trust company.
- 2 Immediately after the closing hour, tenders will be opened at
the Federal Reserve Banks and Branches, following which public
announcement will be made by the Treasury Departmment of the amount
and price range of accepted bids. Those submitting tenders will be
advised of the acceptance or rejection thereof. The Secretary of
the Treasury expressly reserves the right to accept or reject any or
all tenders, in whole or in part, and his action in any such respect
shall be final. Subject to these reservations, noncompetitive
tenders for $200,000 or less for the additional bills dated
June 28, 1962,
(91-days remaining until maturity date on
December 27,1962}) and noncompetitive tenders for $100,000
or less for the 182-day bills without stated price from any one
bidder will be accepted in full at the average price (in three
decimals) of accepted competitive bids for the respective Issues.
Settlement for accepted tenders in accordance with the bids must be
made or completed at the Federal Reserve Banls on September 27, 1962,
in cash or other immediately available funds or in a like face
amount of Treasury bills maturing September 27,1962.Cash and
exchange tenders will receive equal treatment. Cash adjustments
will be made for differences between the par value of maturing
bills accepted in exchange and the issue price of the new bills.
The income derived from Treasury bills, whether interest or
gain from the sale or other disposition of the bills, does not have
any exemption, as such, and loss from the sale or other disposition
of Treasury bills does not have any special treatment, as such,
under the Internal Revenue Code of 195^. The bills are subject to
estate, inheritance, gift or other excise taxes, whether Federal or
State, but are exempt from all taxation now or hereafter imposed on
the principal or interest thereof by any State, or any of the
possessions of the United States, or by any local taxing authority.
For purposes of taxation the amount of discount at which Treasury
bills are originally sold by the United States is considered to be
interest. Under Sections k$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
0O0 the taxable year for which the
sale or redemption at maturity during
return is made, as ordinary gain or loss.
Treasury Department Circular No. 4l8 (current, revision) and this
notice prescribe the terms of the Treasury bills and govern the
conditions
their Bank
issue.
Copies of the circular may be obtained from
any Federalof
Reserve
or Branch.
id
TREASURY DEPARTMENT
WASHINGTON, D.C.
September 19,l£
FOR IMMEDIATE RELEASE
REPORTS BY FEDERAL RESERVE DISTRICTS
OF SUBSCRIPTIONS TO CURRENT ADVANCE REFUNDING
The Treasury Department announced today the results of the current advance refunding
offer of:
3-3/4$ Treasury Notes of Series A-1967, due August 15, 1967, and
4$ Treasury Bonds of 1972, due August 15, 1972,
in exchange for:
3-l/2$ Ctfs. due Feb. 15, 1963
2-5/8$ Notes due Feb. 15, 1963
3-1/4$ Notes due Feb. 15, 1963
3-1/4$ Ctfs. due May 15, 1963
3-l/4$ Notes due May 15, 1963
4$ Notes due May 15, 1963
Subscriptions were divided among the several Federal Reserve Districts and the
Treasury as follows:
FEDERAL RESERVE
DISTRICT
4$ BONDS
OF 1972
3-3/4$ NOTES
OF SERIES A-1967
Boston
New York
Philadelphia
Cleveland
Richmond
Atlanta
Chicago
St. Louis
Minneapolis
Kansas City
Dallas
San Francisco
Treasury
Govt. Inv. Accts.
Totals
$
159,986,000
2,283,754,000
154,717,000
446,497,000
144,742,000
167,927,000
804,461,000
170,457,000
111,706,000
176,521,000
129,250,000
500,474,000
10,131,000
21,000,000
$
$5,281,623,000
$2,580,006,000
153,549,000
1,218,081,000
49,237,000
46,277,000
33,739,000
40,365,000
281,959,000
54,689,000
69,204,000
58,436,000
54,491,000
190,718,000
9,111,000
320,150,000
SUMMARY OF AMOUNT AND NUMBER OF SUBSCRIPTIONS RECEIVED
Total
4$ Bonds of 1972>
3-3/4$ Note>s Series A-1967
No.Sub.
Amount
NO.SUD.
--- " Amount
No.Sub. "" Amount
Commercial Bks.
(own account)
$3.,587,627,000
1 ,672, 996,000
All Other
$5.,260, 623,000
21,000, 000
*°vt. Inv. Acc_s.
$5 ,281; 623,000
GRAND TOTALS
D-613
7,423 $1,147,200,000
5,450 1,112,656,000
12,873 $2,259,856,000
3,376 $4,734,827,000 10,799
004
10;380
2/785,652,000 12,454
$7,520,479,000 23,253
320,150,000
341,150,000
$2,580,006,000
$7;861,629,000
-7
TREASURY DEPARTMENT
WASHINGTON, D.C.
September 20, 1962
FOR IMMEDIATE RELEASE
TREASURY OFFERS $3 BILLION IN MARCH TAX BILLS
As the first step in meeting its fourth quarter cash needs, the
Treasury announced the offering of $3 billion in 170-day tax anticipation bills. The bills, which are to be dated October 3, 1962 and mature
on March 22, 1963, will be accepted at face value in payment of income
taxes due on March 15, 1963. The bills will be auctioned on Wednesday,
September 26. The payment date is Wednesday, October 3. Any qualified
depositary will be permitted to make payment by credit in its Treasury
tax and loan account.
D-614
- 3-
^/ 7 0
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, in
itance, gift or other excise taxes, whether Federal or State, but are exempt from
taxation now or hereafter imposed on the principal or interest thereof by any Stat
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
by the United States is considered to be interest. Under Sections 454 (b) and 1221
of the Internal Revenue Code of 1954 the amount of discount at which bills issued
under are sold is not considered to accrue until such bills are sold, redeemed or
wise disposed of, and such bills are excluded from consideration as capital assets
Accordingly, the owner of Treasury bills (other than life insurance companies) iss
hereunder need include in his income tax return only the difference between the pr
paid for such bills, whether on original issue or on subsequent pruchase, and the
actually received either upon sale or redemption at maturity during the taxable ye
for which the return is made, as ordinary gain or loss.
Treasury Department Circular No. 418 (current revision) 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-
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.
Renders will be received without deposit,from incorporated banks and trust companies
land from responsible and recognized dealers in investment securities. Tenders from
©there must be accompanied by payment of 2 percent of the face amount of Treasury bil
11 applied for, unless the tenders are accompanied by an express guaranty of payment
^incorporated bank or trust company.
All bidders are required to agree not to purchase or to sell, or to make any
agreements with respect to the purchase or sale or other disposition of any bills of
Daylight Saving
this issue, until after one-thirty p.m., Eastern^ged_^c.time,Wednesday^ September 26,1962 .
Immediately after the closing hour, tenders will be opened at the Federal Reserve
jJanks 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
fill be advised of the acceptance or rejection thereof. The Secretary of the Treasury
r;)xpressly
n<nd
reserves the right to accept or reject any or all tenders, in whole or in
his action in any such respect shall be final. Subject to these reservations, non
sompetitive tenders for $ 400,000 or less without stated price from any one
idder will be accepted in full at the average price (in three decimals) of accepted
ompetitive bids. Payment of accepted tenders at the prices offered must be made or
ompleted at the Federal Reserve Bank in cash or other immediately available funds on
ttober, 5, 1962 , provided, however, any qualified depositary will be permitted
9 .make payment by credit in its Treasury tax and loan account for Treasury bills all
1 it for itself and its customers up to any amount for which it shall be qualified in
«ess of existing deposits when so notified by the Federal Reserve Bank of its Distric
The income derived from Treasury bills, whether interest or gain from the sale
other disposition of the bills, does not have any exemption, as such, and loss from
_3& i tOlSBC
immBD3£m&
TREASURY DEPARTMENT
Washington
FOR MEDIATE RELEASE, September 20,; 1962
XKX3IX
TREASURY OFFERS 7| 3 BILLION,: IN :MARCH TAX BILLS
The Treasury Department, by this public notice, invites tenders for $ 5,000,000,000
or thereabouts, of 170 -day Treasury bills, to be issued on a discount basis under
•competitive and noncompetitive bidding as hereinafter provided. The bills of this
will be designated Tax Anticipation Series, they will be dated October 5, 1962
and they will mature March 22, 1965 . They will be accepted at face value in
m
payment of income and profits taxes due on March 15, 1965
, and to the extent they*
are not presented for this purpose the face amount of these bills will be payable with-
out interest at maturity. Taxpayers desiring to apply these bills in payment of Mar
1965 , income and profits taxes have the privilege of surrendering them to any
Federal Reserve Bank or Branch or to the Office of the Treasurer of the United Stat
Washington, not more than fifteen days before March 15, 1965 , and receiving receip
therefor showing the face amount of the bills so surrendered. These receipts may be
submitted in lieu of the bills on or before March 15, 1965 , to the District Direct
of Internal Revenue for the District in which such taxes are payable. The bills wil
issued in bearer form only, and in denominations of $1,000, $5,000, $10,000, $50,00
$100,000, $500,000 and $1,000,000 (maturity value).
Tenders will be received at Federal Reserve Banks and Branches up to the closing
Daylight Saving
hour, one-thirty p.m., Eastern/Stated time, Wednesday, September 26,1962. Tenders will
not be received at the Treasury Department, Washington. Each tender must be for an
multiple of $1,000, and in the case of competitive tenders the price offered must b
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 an
forwarded in the special envelopes which will be supplied by Federal Reserve Banks
Branches on application therefor.
V7- k/J>
TREASURY DEPARTMENT
WASHINGTON. D.C.
September 20,1962
FOR IMMEDIATE RELEASE
TREASURY OFFERS $3 BILLION IN MARCH TAX BILLS
The Treasury Department, by this public notice, invites tenders
for $3,000,000,000 or thereabouts, of 170-day Treasury bills, to be
issued on a discount basis under competitive and noncompetitive
bidding as hereinafter provided. The bills of this series will be
designated Tax Anticipation Series, they will be dated October 3,
1962, and they will mature March 22, 1963. They will be accepted at
face value in payment of income and profits taxes due on March 15,
1963, and to the extent they are not presented for this purpose the
face amount of these bills will be payable without interest at
maturity. Taxpayers desiring to apply these bills in payment of
March 15, 1963> income and profits taxes have the privilege of
surrendering them to any Federal Reserve Bank or Branch or to the
Office of the Treasurer of the United States, Washington, not more
than fifteen days before March 15, 1963, and receiving receipts
therefor showing the face amount of the bills so surrendered. These
receipts may be submitted In lieu of the bills on or before March 15,
1963, to the District Director of Internal Revenue for the District
in which such taxes are payable. The bills will be issued in bearer
form only, and in denominations of $1,000, $5,000, $10,000, $50,000,
$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 p.m., Eastern Daylight Saving
time, Wednesday, September 26, 1962. 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
D-615
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
or
trust company.
by an express guaranty of payment by an incorporated bank
- 2 All bidders are required to agree not to purchase or to sell, or
to make any agreements with respect to the purchase or sale or other
disposition of any bills of this issue, until after one-thirty p.m.,
Eastern Daylight Saving time, Wednesday, September 26, 1962.
Immediately after the closing hour, tenders will be opened at the
Federal Reserve Banks and Branches, following which public announcement
will he made by the Treasury Department of the amount and price range
of accepted bids. Those submitting tenders will be advised of the
acceptance or rejection thereof. The Secretary of the Treasury
expressly reserves the right to accept or reject any or all tenders,
in whole or in part, and his action in any such respect shall be
final. Subject to these reservations, non-competitive tenders for
$400,000 or less without stated price from any one bidder will be
accepted in full at the average price (in three decimals.) of accepted
competitive bids. Payment of accepted tenders at the prices offered
must be made or completed at the Federal Reserve Bank in cash or
other immediately available funds on October 3, 1962, provided, however,
any qualified depositary will be permitted to make payment by credit
in its Treasury tax and loan account for Treasury bills allotted to
it for Itself and its customers up to any amount for which it shall be
qualified in excess of existing deposits when so notified by the .
Federal Reserve Bank of its District.
The income derived from Treasury bills, whether interest or gain
from the sale or other disposition of the bills, does not have any
exemption, as such, and loss from the sale or other disposition of
Treasury bills does not have any special treatment, as such, under
the Internal Revenue Code of 195^. The bills are subject to estate,
inheritance, gift or other excise taxes, whether Federal or State,
but are exempt from all taxation now or hereafter imposed on the
principal or interest thereof by any State, or any of the possessions
of the United States, or by any local taxing authority. For purposes
of taxation the amount of discount at which Treasury bills are
originally sold by the United States is considered to be interest.
Under Sections 454 (b) and 1221 (5) of the Internal Revenue Code of
1954 the amount of discount at which bills issued hereunder are sold
is not considered to accrue until such bills are sold, redeemed or
otherwise disposed of, and such bills are excluded from consideration
as capital assets. Accordingly, the owner of Treasury bills (other
than life insurance companies) issued hereunder need include in his
income tax return only the difference between the price paid for such
bills, whether on original issue or on subsequent purchase, and the
amount 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 (current revision) and this
notice, prescribe the terms of the Treasury bills and govern the
0O0
conditions of their issue. Copies
of the circular may be obtained from
any Federal Reserve Bank or Branch.
A ^*
i
- 3 -,
He was graduated with honors la economies fre« Stanford
University, is a graduate of Harvard l*w Sohool, and attended
Oxford University as a thodes scholar,
was a Combat Naval Aviator.
-taring World War IX he
He holds the Havy Bistingulsaed
Flying €roas9 the Hfevy Air Medal, and the Purple Heart,
In serving the Inter-Asieriean Bevelopiieat Bank *t thia tiiae
of crisis and decision, torn Killefer ean count on our wholehearted
support.
i *'
- i Thus, the job of United States Executive Director brings
with it great demands upon the resources, the imagination, and
the vigor of the man who holds it — and this is me of those
satisfying occasions when the job and the nan are well wet.
A brief look at Tom Eillefsr's background underlies our
confidence in hi a; * *&*tr~ >-**&• **<£ jjt**~-A#wa*&t -*fcv at
Aa First Vice President and Vice Chairman of the Board of mm
Directors of the Export-Import Bank, he has had first-hand
experience in development tasks on a truly global scale.
tm km a lawyer by trade. He was admitted to the California
Bar la 3M*. He served for mm years with a prominent law flr*
with offices in California and here la Washington, fie specialised
km maritime law, and became Executive Director of the Committee
of American Steamship Lines until he joined the Export-Import
Bank, He was a member of the staff of the United States High
Corafflission for Germany in 1951-52.
He was graduated
REJslARKS BY TREASURY SECRETARY DODGES DILLOH, AFTER ADMINISTEBIHG
THE OATH OF OFFICE AS EXECUTIVE DIRECTOR OF THE IHTER-AMERICAN
DEVELOPHEJSrr BANK TO TOM KILLEFER, ROOM 4121, TREASURY BUILD IMG,
5:30 P.M., EOT, M0HB4Y, SEPTEMBER i4, 1962
I am happy to weleeae Toe mXJmtmw ma the new United States
Executive Director of the Xnter-Aaeriean Derelopoeat Bank, and as
ay Speelal Aeslstant for this assigaaeat.
Froa the sonant the -teak was created la I960, its doom were
opened to great responsibilities and to great opportunities. Under
the able direction ef Mr. Felipe Hearers, the Bank's distinguished
President, end with the aid ef General Robert Cutler, the first
United States Executive Director, those responsibilities have been
set, and the Bank has aatured rapidly te becoee a potent iaatruaent
for growth and development within the Aeericas.
ist-i-a le know now that the IAHB appeared ea the heaisphere seeae
not m aoaeat too aoon. .lie launching of the Alilaaoe for Progress
sad the political events ef the two intervening years haver
feeussed a searching light on Latin America. The IABB eust
operate ia that light, with its responsibilities vastly increased,
and its problems greatly magnified.
Thus, the Job
REMARKS BY TREASURY SECRETARY DOUGLAS DILLON, AFTER ADMINISTERING
THE OATH OF OFFICE AS EXECUTIVE DIRECTOR OF THE XI*TER-A?J£RICAN
DEVELOPMENT BANS TO TOM KILLEFER, BOOM 4121, TREASURY BUILDING,
5:30 P.M., EDT, MONDAY, SEPTEMBER 24, 1962
I am happy to welcome Tom Killefer as the new United States
Executive Director of the Inter-American Development Bank, and as
my Speolal Assistant for this assignment*
From the moment the Bank was created in 1960, its doors were
opened to great responsibilities and to great opportunities. Under
the able direction of Mr* Felipe Herrera, the Bank4a distinguished
President, and with the aid of General Robert Cutler, the first
United States Executive Director* those responsibilities have been
met, and the Bank has matured rapidly to become a potent instrument
for growth and development within the Americas.
We know now that the IABB appeared on the hemisphere scene
not a moment too soon. The launching of the Alliance for Progreaa
and the political events of the two intervening years have
foeuesed a searching light on Latin America. The IADB must
operate in that light, with its responsibilities vastly increased,
and its problems greatly magnified.
V^7
- 2 Thus, the Job of United States Executive Director brings
with it great demands upon the resources, the imagination, and
the vigor of the man who holds it — and this is one of those
satisfying occasions when the Job and the man are well met.
A brief look at Tom Sillefer's background underlies our
confidence in hlmt
As First Vice President and Vice Chairman of the Board of
Directors of the Export-Import Bank, he has had first-hand
experience in development tasks on a truly global scale.
Tom is a lawyer by trade. He was admitted to the California
Bar in 1946. He served for many years with a prominent law firm
with offices in California and here in Washington. He specialised
la maritime law, and became Executive Director of the Committee
of American Steamship Lines until he Joined the Export-Import
Bank. He was a member of the staff of the United States High
Commission for Germany in 1951-52.
m $ m
He was graduated with honor® in economies from Stanford
University, is a graduate of Harvard Law School, and attended
Oxford University as a Rhodes Scholar. During World War ZX he
was a Combat Naval Aviator. He holds the Navy Distinguished
Flying Cross, the Navy Air Medal, and the Purple Heart.
In serving the Inter^Americms Development Bank at this time
of crisis and decision, Tom lillefer can count on our wholehearted
support*
lj
FOR SEURASE A. *•
wmtmm,
a , 15&2
'mmut gnx af&naao
' r. Scp!*»afcer 25. 1962.
HKMLIS
?
w rmsm**
The Treasury Qspartsjent announced last evening that the tenders for two aeries of
treasury bills, one series to he an additional leeas at the bills dated Jum 2Sf 1^62*
and the other aeries to be dated September 27, 1962, which were offered m September 19,
were opened at the Federal $»s©rv« Banks m Sepfcassber j&# fenders nere invited for
^1,300*000*000* ®«* thereabouts, of fl*day bills and for $?0O*000*0O0* or
ISlMtay bills, the details of the two series are as followst
HAII3I OF ACCEPTED
00Wf®f IflVE BXBBi
bills
lfe 2-day treasury hills
St*
Mi*
Higjh
•Jglst
Fi_j_e -«B—*_>1 Sate
^^^^2_2__Il__»_«__^__.
*2__M__^__Z__^__«__i_tf__^__^__^__.
2»7Jet
99.3&0
99.302
99,39S
31 percent ©f the
58 percent of the
•MfWwXlMaMaMaa&MMkMft
Mkny
9S.SU* z.tm
n&$
z*m$ y
of 91-day bills bid for at the low price i
of 182-day bills bid or at the lev price
TOfAL M I K E S AFFLTED F9& AID ACCSPnCO IT IBSBAL ISSERfE SXatlSOtSf
^Mwnww
Seston
i©w fork
Allied For
•
Cleveland
St.
Minneapolis
Kansas City
SaXXrn
Sm. Francisco
3&*PS?*ooo
1*£-3»133*0O0
28,66$,000
feO,09$,000
22,192,000
24,181,000
229*983,000
3U,616,000
26,001,1100
1*0,91*3,000
22,1*09,000
38,602,000
8O3,?f3»00&
19*665,000
Ii0*09$#000
ll**25?,000
31,891,000
l$0*fe2,O00
27,221,000
22*501,000
JM9»000
1?*319»000
ma*rimm
mm-**
$ ,,Ui?,000
S0S»632*000
$
11,139,000
2,3T2,0Q0
?*S#2*000
22,11*6,000
50,262,000
3,Sl?,O0O
3»Af»ooo
ii,536#OO0
11,16?, (XK)
58»71?,000
2i4U,l53,000
3,709,000
7,209,000
ll,268,000
7,868,000
S,57i*000
13,501,000
S,0ll6,000
17,3tffO0O
MM
TOTAIA
$2,150*082,000
$1,3^0*122*000^ $1*H?*239,000
$700*110*000 5/
Includes $2it0*0t*9,000 tioneospetltlvs tenders accepts at item average price ©f 99.3*$
Incl-des $60*636,000 noneompetitiv^ tenders accepted at the average pries of $$,$1$
me of
of the
the mm
m
On a ©oupan issue
length and for the seme aaoant invested, the return on
these bills scald prorids yields of 2.81S, for the 91-day bills* sad 3-02$, for the
182«d»y bills. Interest rat s on bills are quoted in terms of bauikediscount tilth
the return related to the face amount of the bills payable at maturity rather than
Urn mmnt invested and their length in actual number of days related to a 360-day
yaar. In contrast, yields on certificates, notes, and bonds are computed in terms
of interest on the amount invested, and relate the maaber ot days remaining in an
interest pa&amt period to the actual masher of days in the period, with
compounding if more than one coupon period is involved*
• • > .
^
£/t
<-/3o
TREASURY DEPARTMENT
i""**™""11
FOR RELEASE A. M. NEWSPAPERS,
Tuesday, September 25, 1962.
September 2k, 1962
WASHINGTON, D.C.
RESULTS OF TREASURY'S WEEKLY BILL OFFERING
The Treasury Department announced last evening that the tenders for two series of
Treasury bills, one series to be an additional issue of the bills dated June 28, 1962,
and the other series to be dated September 27, 1962, which were offered on September 19,
were opened at the Federal Reserve Banks on September 2h. Tenders were invited for
$1,300,000,000, or thereabouts, of 91-day bills and for $700,000,000, or thereabouts, of
182-day bills. The details of the two series are as follows:
RANGE OF ACCEPTED
91-day Treasury bills
182-day Treasury bills
COMPETITIVE BIDS:
maturing December 27, 1962
maturing March 28, 1963
Approx. Equiv,
Approx. Equiv.
Price
Annual Rate
Price
Annual Rate
High
99.310
2.730$
98.518
2.931$
Low
99.302
2.761$
98.5lii
2.939$
Average
99.305
2.1k9% 1/
98.515
2.938$ 1/
21 percent of the amount of 91-day bills bid for at the low price was accepted
58 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
Accepted
Applied For
$
11,139,000
38,602,000
$
38,957,000
1,38U,U01,000
803,723,000
1,513,133,000
7,552,000
13,665,000
28,665,000
50,262,000
UO,095,000
UO,095,000
3,519,000
1^,257,000
22,192,000
11,167,000
31,891,000
3k,181,000
Il4l;,l53,000
150,762,000
229,983,000
7,209,000
27,221,000
3U, 616,000
7,868,000
22,501,000
28,081,000
13,501,000
32,209,000
U0,9U3,000
17,329,000
17,319,000
22,U09,000
119,139,000
107,877,000
116,827,000
$2,150,082,000
$1,300,122,000 a/ $1,777,239,000
Accepted
$ U,UU7,000
505,632,000
2,372,000
22,lU8,000
3,519,000
k, 536,000
58,717,000
3,709,000
U,268,000
5,57i,ooo
5,oU6,ooo
8o,iU5,ooo
$700,110,000 b/
a/ Includes $2UO,Oli9,000 noncompetitive tenders accepted at the average price of
V Includes $60,636,000 noncompetitive tenders accepted at the average price of 98.515
V On a coupon issue of the same length and for the same amount invested, the return on
these bills would provide yields of 2.81$, for the 91-day bills, and 3.02$, 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-616
4-1
* 26 *
future and turn our energies toward meeting thaa. In that process,
the bankers ef the Nation can play a irital and eonstrnstlve role.
- as But I site that only to introduce tarn acre iiaportant conclusion:
W& mm% not claim too such. She emerging system presupposes — as any
workable arrangement mat -- that the United states and other leading
nations will pursue their expanding growth objectives and do so by
methods that will also assure an equilibrium in their basic trade and
investment accounts. That ia i&y I nave eaqphasised the priority of the
measures for meeting our own balance of payments problem hare today. Aod
that is wi3y it is so lapertsst — as the President stressed last week ~»
that other countries now CTpftfrt.-*1 of #yf,yyr se asstsae a fuller share of the
foKff^eas of defense and aid*
In attacking those real and difficult tasks, m should not he
diverted either by false fears for the stability of our monetary system
or by vain hopes that sere Monetary reform can substitute for aore basic
measures. To sink back into cosgOacency would he to undermine all our
very real achievements to date. Bat we must also appreciate the progress
that has been made, so that w can identify the real challenges of the
4 '3 5
But we have only made the beginning. The skills, energies and judgment
of many man, in many countries, will he needed to fashion the changing
shape of these and possibly other new measures as experience provides
the needed tests*
the renewed and healthy confidence in the stability of our international monetary system so evident at the sessions of the world central
hankers and finance ministers at the fund meeting last week nonetheless
reflects already an increased appreciation of the arrangements now in
place — arrangements that have necessarily been revealed oitly in hits
and pieces as they have emerged over the past 18 months. It is worthwhile
repeating the closing sentence in the appraisal contained in a communique
Issued last Wednesday (September 19) by the members of the ten countries
in the Fund's special resources group:
"The additional resources thus provided, together with
present national reserves and the existing resources of the
Bfi?, are large enou$i to provide the support that mi$it be
needed to assure the stability of the existing exchange rate
system as based on present gold parities."
- 2J ~
Taken together, these astr arrangements ** emerging froa a mutual
understanding of caramon problems and needs among the industrialized
countries -- powerfully enlarge the defensive capabUities of our
convertible gold-dollar system to withstand strains or shocks from any
source. A little of their defensive potential can he glimpsed in the
assistance that emerged so promptly and ef festively at the time of the
recent Canadian difficulties, and during the spring ef 1961, vaea
sterling mm under heavy pressure* But it is clear that the emerging
system la capable of much more, including both defending the dollar itself
from any conceivable attack as well as contributing to the meeds of the
world for adequate international liquidity ever the years ahead.
the Halted States decision to hold foreign currencies aa part of its
reserves — taken in conjunction with the wide range of cooperative
facilities being worked out with other leading countries — can make a major
contribution toward enlarging the usable means of international payments.
if3i
Useful as these operations in the exchange markets have been, it
is not their past or current site that is so significant — although
the United States does have today approximately $900 million of foreign
currencies at its disposal, either in the form of each or standby
facilities. Rather, the significance lies in the pattern set for meeting
fixture contingencies -- the technical feasibility of the arrangements,
their expansibility in time of agreed need, and the ability to pinpoint
the use of our resources at the point and time of need.
AH of these new arrangements are, of course, reinforced hy the
enlarged capacity of the International Monetary Fund to provide assistance
in time of need. As a result of the increase in subscriptions voted in
1956, the United States alone has a fund quota of over $J| billion. These
facilities are being further supplemented by the new $6 billion standby
credit pool agreed to hy ten of the industrialised countries last December, &
pool in vhich the United States share of $2 billion is now awaiting final
approval by the Congress.
• 21 •
of many of them. This point clearly emerges from the recent full report
on Treasury*Federal Reserve operations prepared by Charles A. Coombs of
the Sew York federal Reserve Bank. The release of this report reflects
our policy of making available to the public from time to time as much
of the detail of our operations as we possibly can.
X should stress again, too, that it Is no part of our intention to
disguise the basic forces of supply and demand, or the various market
evidences of changing needs and conditions in the international financial
position of the United states or any other country. We want and need the
sensitive signals of changes in fundamental forces that are reflected in
price fluctuations In free markets. And as one of my foreign friends
remarked to someone from another country, perhaps with a slight uJJSrior
motive, the United states publishes and discloses Its record so freely
and frequently that It could not — even if It were to try — hide the
facts of Its balance of payments position from the intelligent observer.
^7
- 20 *
With our own balance of payments in deficit, we have acquired
forei^a currencies to support these activities largely hy aeaaa ef
so-called swap agreements arranged by the federal Beserve with air
principal trading partners. _hese agreemsats provide for a reciprocal
exchange of currencies, usable by either party when needed to meet
temporary shifts in the international flow of funds. ZS addition, we
have on occasion acquired currencies from certain countries, so far In
modest amounts, by outrl^t purchase, by direct treasury harrowing, or
by accepting repayment of debts owed the tfcilted States Government in
usable foreign currencies rather than dollars.
Thus far, the operations have been mainly In the nature of "pilot"
projects, testing and probing the mechanical possibilities and their
possible usefulness. But experience has, X believe, already demonstrated
their value in meeting specific situations, involving marks, Swiss francs,
lire, guilders, and Belgian francs. One encouraging characteristic of
the operations already undertaken has been the early reversibility
i3)
- lo •
alternative to drawing on our own gold steak, If sad vbea ear dollar
outflow might exceed the amounts that one or another of these foreign
central banks and governments might wish to hold voluntarily. In a
similar way, temporary disturbances In the exchange markets can he
cheeked before setting off a massive speculative run aa we alternatively
acquire and then release holdings of the other major currencies. Moreover, our holdings of foreign currencies (or arrangementa permitting us
to borrow them on a limited standby basis) can support aueh larger sales
of forward exchange. By participating in the forward markets to assure
larger availabilities of "turn-arouaa" facilities, we sake it feasible,
for example, for private parties abroad, who may wish to hold dollars
passing into their hands for temporary periods, to go en holding them
while assured of the availability of enough of their own currency to
meet expected needs at some later date.
Lf-3 <7
~m building on experience and existing institutions and supplementing and reinforcing the protection already implicit In the world* s existing monetary
reserves and in the International Monetary fund.
The new initiatives have taken the form of a new set of arrangements
under which the United States, for the first time in a generation, is
dealing directly in the foreign exchange markets, in a great enlargement
of the resources available through the IMF, and in the application of
cooperative arrangements to the London gold market. Taken together, an
entirely new dimension has been added to our international financial
system.
One innovation is that the United states Is now holding foreign exchange
as part of its own reserves, these foreign currencies can be acquired
when o&e or another of the leading industrial countries has a deficit with
the United states. In turn, such holdings, once acquired, can be used,
with the understanding of the other countries involved, to buy up dollars
flowing into the hands of foreign official institutions, thus becoming an
-17 Convertibility brou#t with it a freer flow of short-term funds
among nations. While this was a highly desirable addition to international liquidity, it also Involved an Increased risk of sudden and
disruptive flows of short-term capital between nations. Funds were sow
free to move, at least on short-term, among all the leading countries,
not only in response to differences In money market rates of Interest but
also in reflection of changing fears or hopes concerning the weakness or
strength of each country' a economic position. The balance of payments
disciplines — always present — were even more dearly visible. She
need was to develop new arrangements which, while never concealing the
persisting force of those disciplines, would limit the scops for speculative aberrations which could so easily develop In the new environment.
This is why the United States, working step by step with the leading
foreign nations, has taken the Initiative over the past year and a half
to build an enlarged set of defenses for the international monetary system,
- 16 -
These are no small accomplishments. Tet progress has brought
with it new problems. In meeting them, again in the spirit of
neglecting nothing, of trying to cope with all the pieces of the
problem, large or small, we have worked out in cooperation with the
other leading countries a new system of defenses for the dollar.
Little if any of this could have been done if the United States was
not clearly determined to bring its balance of payments back into
fundamental equilibrium, and to do this in a way that would be adapted
to the progress already achieved in liberalizing trade as well as to
the longer-run needs for convertibility, liquidity, and growth in the
future. All that has been done has rested on the clear understanding —
among all of the participating countries — that financial arrangements,
essential as they are for the support of trade, cannot take the place
of real correction in our underlying balance of payments position.
-15 widespread use of the dollar as a supplement to gold in the international reserves of other nations and as a medium of international
payments.
This convertible gold-dollar system, bulwarked by the resources
of the International Monetary Fund, has served the world well. It has
provided ample liquidity to support more than a doubling of world trade
since 1950 — a trend which is continuing with an increase of 6 percent
in the first half of this year compared to the like period of 1961.
It has permitted the industrialized countries to dismantle part of
their exchange controls, to lessen their restrictions on capital movements (and in a few cases to remove them J and to restore the convertibility of their currencies for all ordinary payments. And it has, at
the same time, allowed individual nations to work out their own economic
destinies, free to develop along the lines of their own capacities and
choices, but within a framework of ever-growing cooperation among
nations to work out and achieve common objectives•
- lU For the present, in the area of Governmental capital floss, we
have been successful in developing a large reverse flow to the United
States in the form of prepayments of long-term debt owed the United
States Government by the surplus countries of Western Europe* Prepayments this year by France, Italy, and Sweden have already amounted
to $550 million. We know that such prepayments do not "solve" our
balance of payments needs, but they do reduce the outstanding supply
of dollars abroad that our foreign deficit would have otherwise produced.
They temporarily reduce strains while the slower, but more lasting,
forces of market adjustment are bringing our trade and payments position
back into equilibrium.
Cooperative efforts between nations have been the basis for most
of our progress over the past 18 months toward developing and strengthening our international financial system. The backbone of that system,
as it has evolved out of experience since World War II, rests on the
VI
- 13 Those efforts extend also to the broader listing of American securities
on European exchanges. They have resulted in sales of a significant
proportion of recent security issues in New lork to foreign investing
institutions — both directly and in secondary distribution. Pressures
have consequently begun to mount within those countries which still
maintain tight controls, as individuals seek the freedom to invest
abroad and cite, in support of their desires, the currently strong
balance of payments positions of 'their particular countries.
And there are ways in which American business and banking can also
help in the financing of commercial requirements. Ingenuity in searching
out sources of funds abroad for American businesses operating there, as
well as imaginative extension of participation arrangements to more
foreign lenders in the credits granted by American banks at home axud.
abroad, can pay off in broadened contacts and a wider range of services
for any customers engaged in foreign operations.
- 12 -
Jfono Kill cut through the problems with a single, decisive thrust?
each will seam minor in Itself, but will gain decisive strength by
being an incremental part of a comprehensive total effort.
We know, for example, that Europe will not be able overnight to
transform its own capital markets in order to carry a larger part of
the world's capital requirements. But there are many kinds of steps
that can be taken, not only by the Europeans but by Americans as well,
that will help somewhat in lessening the pressure for outflows of
capital from the American markets while also contributing toward the
evolution of needed new facilities in Europe. This kind of approach
is symbolized by the work that the Export-Import Bank has been doing,
for example, in placing some of its own paper with European investors.
T^e Investment banking community in New York is making a comparable
Contribution, not only in its own long-run competitive interests but
also with short-run benefit to the American balance of payments, by
making increasingly vigorous efforts to attract European funds.
-11 -
At the same time, we have Eiinimized the pressures of Governmental
operations in the longer-term market so that constructive investment
at home would be encouraged. These measures have been important in
stemming outflows into money market instruments abroad and, at the
same time, continuing a ready availability of funds for any form of
productive new domestic investment — not only during the recession
which ended last year but also throughout the expansion phase we have
enjoyed since that time.
To those who favor some administrative check on outflows of capital,
or those who want some arbitrary forcing up of interest rates on bank
loans and capital issues to thwart flows abroad, the answer must be
essentially the same — neither the public nor the private sectors can
be expected to take aetion which might handicap the functioning of a
competitive, market economy — a capitalist economy. But there are
many answers that can be sought short of that prescription.
4<n
- 10 -
between countries, but for immediate dollars-and-cents reasons — they
would cost us more than they could possibly save. Our own money and
capital markets are the most highly organized, most efficiently
diversified, of any in the world. To try to impose controls over outward capital movements in any one sector of these markets — say bank
loans — would only invite capital flight through many others. And to
try instead a comprehensive approach — clamping the cold hand of
capital issues controls, or credit rationing, over the entire sweep of
the markets — would literally congeal the bloodstream of American
capitalism*
No, so far as the outflows of capital are concerned, there is no
effective answer outside the forces of the markets themselves. That
is why, so far as volatile short-term money flows are concerned, we
have combined the influence of debt management and monetary policy
for more than two years to exert some upward force on short-term money rates.
c
• 9 -
issued policies to over one thousand exporters covering potential
exports of one-half billion dollars before the end of the year.
This combination of Government support with private enterprise
can now provide exporters in this country with credit facilities that
are the equal of any industrialized country. I urge you to familiarize
yourself with this program more closely by reading a little booklet
published just last week by the Export-Import Bank entitled "From One
Bank to Another." I understand that copies are available from the ABA
office, here and in Mew Tork and Washington.
But our balance of payments problems include even more than the
need to expand exports, both of goods and of services, and to curb the
outflow of dollars through Government programs, for they also involve
the flows of capital. This country rejects direct controls on the
flow of capital, not only because they would be inconsistent with our
traditional and fundamental objectives of freeing trade and payments
- 8 -
There is one particular area where your services and knowledge
are absolutely essential — the financing of exports, financing for
export, as you well know, presents special problems — some technical
and some attributable to the additional element of risk. The Export-
Import Bank has long had programs for participating with banks in
credits of this kind. The Export-Import Bank1® commercial bank
guarantee program, geared to the special political and exchange risks,
has been streamlined and simplified to increase its usefulness, as many
of you know. If any of you still find problems, the Bank's Chairman
and President, Harold kinder, wants to know about them. In addition,
the resources of private enterprise are now being utilized more
effectively through the facilities of the Foreign Credit Insurance
Association — a cooperative effort of the Export-Import Bank and 72
insurance companies, fhe FGIA, operating successfully since February
in the insurance of short-term credit, has now extended its activities
into the medium-term field, and we expect that it will have actually
- 7 -
The Export Coordinator, Draper Daniels, acting within the Department
of Commerce, setting goals industry by industry and region by region,
is already depending heavily on the new National Export Council, which
has 33 regional councils and the participation of 10,000 individual
businessmen.
Many of you no doubt are aware of these activities in your own
area. You are crucially situated in your own communities to provide
the leadership necessary to make this program a success. I realize
that you cannot all become experts in the special problems of foreign
trade. But you do know the problems of the local businessman and you
can help him find the assistance he needs. Within the banking community
itself there are vast resources of knowledge and talent — and it is a
challenge to our correspondent banking system to tap these resources
effectively and make them available to every American producer capable
of reaching profitable outlets in foreign markets.
. 6Government itself is now providing American businessmen with mors
information In detail on foreign markets than ever before. And foreign
businessmen are being exposed to many more American products — through
new trade centers abroad, through trade fairs, and through the determined
day-to-day efforts of our foreign representatives. But these activities
can reach their full potential only if the facts and opportunities of
foreign trade become as familiar to the American businessman as they have
long been to his foreign competitor — who, by necessity, has had to
depend for generations on foreign markets forl||s daily livelihood.
The challenge is clear* We look to a further expansion in exports,
not in hundreds of millions but in billions, within the next two years
to help accomplish balance in our payments. That is not unrealistic.
During the first half of this year, our exports were 6-1/2 percent higher
than a year earlier. But it will take sustained and energetic effort.
Essential as is this close attention to Government programs, all
of us recognize -that, In the end, American success must rest on the
performance of ths private economy — its ability to find profitable
opportunities for productive home investment, to reduce unemployment,
to improve efficiency, to maintain price stability, and to seek out and
penetrate export markets* This is the way, and the only way, we can
expect to combine healthy growth at home with external balance. It is
just such considerations that underlie so much of our emphasis on tax
reform — reform that will stimulate new incentives to work, to invest,
and to cut costs. Such reform has already reached some distance hy
revising depreciation guidelines; will soon hopefully be enlarged by
the 7 percent tax credit for inrestasnt? and must be furthered in the
next Congress by an across-the-board realignment and reduction In the
tax rate structure. We simply cannot afford to carry on indefinitely,
in this competitive world, with a tax structure that dulls initiative
and brakes the economy at levels well below its full potential.
m k **
'
though some cuts have proved possible, but mainly by persuading cur
allies that it would pay them to return to us the dollars they receive.
Hew? By purchasing here, at lower costs, some of the military equipment
which they naad — and achieving the end© of standardisation at the same
time.
We have been equally vigorous in limiting the balance of payments
drains from our economic assistance programs. The balance of payments
impact of the current §1* billion program is being reduced by providing
more aid in the form of American goods end services. Eighty percent of
the funds being committed under current directives will directly result
in American exports — and I can assure you that every significant outlay
for aid that comes within that other twenty percent (that is, spent abroad)
must be justified in terms of national priorities at the highest level &t
Government.
- 3-
That is why we have a special Cabinet committee, headed by
Secretary Dillon, which reports directly and frequently to the President,
in order to speed decisions and assure continuous top-level leadership
within all branches of the Federal Government. Out of that committee's
work has come a new control system, covering all expenditures of funds
overseas by every Federal agency. Every item must now be justified In
terms of today* s priorities. And the national export drive is receiving
new impetus from the appointment last July of an Export Coordinator who
will oversee and expedite all of the vastly expanded services for
exporters throughout Government — not passively, but actively, by
working with Individual companies and industry groups to establish goals
for expanded sales around the world.
So far as Governments own part of the deficit is concerned, the
large items have been military outlays and economic aid. Over the past
18 months, the Defense Department has cut roughly one-third from our net
dollar spending abroad for defense — not by cutting down on activities,
4^1
- 2 -
certainly continue to play, a leading part in alerting America to its
balance of payments problems and the new efforts needed to limit costs
and raise productivity in order to promote both greater growth and more
exports. Bankers know that the dimensions of the problem ahead are
still large. To be sure, thus far in 1962, the over-all deficit has
approximated an annual rate of $1*1/2 billion — a striking contrast to
the deficit of $2.5 billion in 1961, and to the auch higher figure of
$3.9 billion in I960. While it is still not possible to sort out fully
the influence of the recent Canadian difficulties from more lasting factors,
the performance this year has been gratifying. But what this also means
is that all of the more obvious, the "easier" measures to reduce the
deficit have now been taken. That is why our approach in the Government
is, and must be, to give continuing and direct attention, systematically
and persistently, to every possible way — large and small — of helping
our drive toward balance of payments equilibrium.
REMARKS OF THE HONORABLE ROBERT V. RQOSA,
UNDER SECRETARY OF THE TREASURY FOR MONETARY AFFAIRS,
AT THE ANNUAL CONVENTION OF UBS AMERICAN BANKERS ASSOCIATION
AT ATLANTIC CITY, NEW JERSEY,
TUESDAY, SEPTEMBER 25, 1962, 11:00 A.M., EDT
BANKING AND THE BALANCE OF PAYMENTS
Your meetings have begun here in Atlantic City just as the annual
meeting of the Free World1s finance ministers and central bankers ended
in Washington* There, the financial officials of the more than eighty
countries renewed, indeed they reinforced, their expressions of confidence
in us, and in our dollar. But, gratifying though this is, the reaffirmation of confidence must not be misinterpreted. It does not mean that
any of us in the United States can slacken in any way the drive toward
getting this country1s international accounts into balance* It only means
that enough has so far been accomplished to persuade the rest of the world
that we will be able, if we try even harder, to finish the job.
That is why our discussion of the balance of payments here this
morning is so timely. For the banking fraternity has played, and will
••• ( / 7
_-7/' f
^s7
TREASURY DEPARTMENT
Washington
REMARKS OP THE HONORABLE ROBERT V. ROOSA,
UNDER SECRETARY OF THE TREASURY FOR MONETARY AFFAIRS,
AT THE ANNUAL CONVENTION OF THE AMERICAN BANKERS ASSOCIATION
AT ATLANTIC CITY, NEW JERSEY
TUESDAY, SEPTEMBER 25, 1962, 11:00 A.M., EDT
BANKING AND THE BALANCE OF PAYMENTS
Your meetings have begun here in Atlantic City just as the annual
meeting of the Free World!s finance ministers and central bankers
ended in Washington. There, the financial officials of the more than
eighty countries renewed, indeed they reinforced, their expressions
of confidence in us, and in our dollar. But, gratifying though this
is, the reaffirmation of confidence must not be misinterpreted. It
does not mean that any of us in the United States can slacken In any
way the drive toward getting this country's international accounts
into balance. It only means that enough has so far been accomplished
to persuade the rest of the world that we will be able, if we try
even harder, to finish the job.
That is why our discussion of the balance of payments here this
morning is so timely. For the banking fraternity has played, and
will certainly continue to play, a leading part in alerting America
to its balance of payments problems and the new efforts needed to
limit costs and raise productivity in order to promote both greater
growth and more exports. Bankers know that the dimensions of the
problem ahead are still large. To be sure, thus far in 1962, the
over-all deficit has approximated an annual rate of $1-1/2 billion —
a striking contrast to the deficit of $2.5 billion in 196l, and to
the much higher figure of $3.9 billion In i960. While it is still
not possible to sort out fully the influence of the recent Canadian
difficulties from more lasting factors, the performance this year
has been gratifying. But what this also means is that all of the
more obvious, the "easier" measures to reduce the deficit have now
been taken. That is why our approach in the Government is, and must
be, to give continuing and direct attention, systematically and
persistently, to every possible way -- large and small -- of helping
our drive toward balance of payments equilibrium.
That is why we have a special Cabinet committee, headed by
Secretary Dillon, which reports directly and frequently to the
President, In order to speed decisions and assure continuous toplevel leadership within all branches of the Federal Government. Out
of that committee's work has come a new'control system, covering all
D-617
expenditures of funds overseas by every Federal agency. Every item
must now be
national
export
justified
drive is
in terms
receiving
of today's
new impetus
priorities.
from theAnd
appointment
the
^rr
- 2 -
last July of an Export Coordinator who will oversee and expedite all
of the vastly expanded services for exporters throughout Government —
not passively, but actively, by working with individual companies
and industry groups to establish goals for expanded sales around
the world.
So far as Government's own part of the deficit is concerned,
the large items have been military outlays and economic aid. Over
the past 18 months, the Defense Department has cut roughly one-third
from our net dollar spending abroad for defense — not by cutting
down on activities, though some cuts have proved possible, but
mainly by persuading our allies that it would pay them to return to
us the dollars they receive. How? By purchasing here, at lower
costs, some of the military equipment which they need — and
achieving the ends of standardization at the same time.
We have been equally vigorous in limiting the balance of payments
drains from our economic assistance programs. The balance of payments
impact of the current $4 billion program is being reduced by providing more aid in the form of American goods and services. Eighty
percent of the funds being committed under current directives will
directly result in American exports — and I can assure you that
every significant outlay for aid that comes within that other
twenty percent (that is, spent abroad) must be justified in terms
of national priorities at the highest level of Government.
Essential as is this close attention to Government programs, all
of us recognize that, in the end, American success must rest on the
performance of the private economy — its ability to find profitable
opportunities for productive home investment, to reduce unemployment,
to improve efficiency, to maintain price stability, and to seek out
and penetrate export markets. This is the way, and the only way, we
can expect to combine healthy growth at home with external balance.
It is just such considerations that underlie so much of our emphasis
on tax reform — reform that will stimulate new incentives to work,
to invest, and to cut costs. Such reform has already reached some
distance by revising depreciation guidelines; will soon hopefully
be enlarged by the 7 percent tax credit for investment; and must be
furthered in the next Congress by an across-the-board realignment
and reduction in the tax rate structure. We simply cannot afford
to carry on indefinitely, in this competitive world, with a tax
structure that dulls initiative and brakes the economy at levels
well below its full potential.
Government itself is now providing American businessmen with
more information in detail on foreign markets than ever before.
And foreign businessmen are being exposed to many more American
products -- through new trade centers abroad, through trade fairs,
and through the determined day-to-day efforts of our foreign
representatives. But these activities can reach their full potential
foreign
generations
familiar
only if the.
competitor
to on
the
facts
foreign
American
and
-- who,
opportunities
markets
businessman
by necessity,
for his
of
asdaily
foreign
they
has have
had
livelihood.
trade
to
long
depend
become
beenfor
to
as his
Ys'f
- 3The challenge is clear. We look to a further expansion in exports,
not in hundreds of millions but in billions, within the next two years
to help accomplish balance in our payments. That is not unrealistic.
During the first half of this year, our exports were 6-1/2 percent
higher than a year earlier. But it will take sustained and
energetic effort. The Export Coordinator, Draper Daniels, acting
within the Department of Commerce, setting goals industry by
industry and region by region, is already depending heavily on the
new National Export Council, which has 33 regional councils and the
participation of 10,000 individual businessmen.
Many of you no doubt are aware of these activities in your own
area. You are crucially situated in your own communities to provide
the leadership necessary to make this program a success. I realize
that you cannot all become experts in the special problems of foreign
trade. But you do know the problems of the local businessman and you
can help him find the assistance he needs. Within the banking
community itself there are vast resources of knowledge and talent —
and it is a challenge to our correspondent banking system to tap
these resources effectively and make them available to every American
producer capable of reaching profitable outlets in foreign markets.
There is one particular area where your services and knowledge
are absolutely essential — the financing of exports. Financing for
export, as you well know, presents special problems — some technical
and some attributable to the additional element of risk. The ExportImport Bank has long had programs for participating with banks in
credits of this kind. The Export-Import Bank's commercial bank
guarantee program, geared to the special political and exchange risks,
has been streamlined and simplified to Increase its usefulness, as
many of you know. If any of you still find problems, the Bank's
Chairman and President, Harold Linder, wants to know about them.
In addition, the resources of private enterprise are now being utilized
more effectively through the facilities of the Foreign Credit Insurance
Association — a cooperative effort of the Export-Import Bank and 72
insurance companies. The FCIA, operating successfully since February
in the Insurance of short-term credit, has now extended its
activities into the medium-term field, and we expect that it will
have actually issued policies to over one thousand exporters covering
potential exports of one-half billion dollars before the end of the
year.
This combination of Government support with private enterprise
can now provide exporters in this country with credit facilities
that are the equal of any Industrialized country. I urge you to
familiarize yourself with this program more closely by reading a
little booklet published just last week by the Export-Import Bank
entitled "From One Bank to Another." I understand that copies are
available from the ABA office, here and in New York and Washington.
iu
- 4But our balance of payments problems include even more than the
need to expand exports, both of goods and of services, and to curb
the outflow of dollars through Government programs, for they also
involve the flows of capital. This country rejects direct controls
on the flow of capital, not only because they would be inconsistent
with our traditional and fundamental objectives of freeing trade
and payments between countries, but for immediate dollars-and-cents
reasons — they would cost us more than they could possibly save.
Our own money and capital markets are the most highly organized,
most efficiently diversified, of any in the world. To try to impose
controls over outward capital movements in any one sector of these
markets — say bank loans — would only invite capital flight through
many others. And to try instead a comprehensive approach — clamping
the cold hand of capital issues controls, or credit rationing, over
the entire sweep of the markets — would literally congeal the
bloodstream of American capitalism.
No, so far as the outflows of capital are concerned, there is
no effective answer outside the forces of the markets themselves.
That is why, so far as volatile short-term money flows are concerned,
we have combined the influence of debt management and monetary policy
for more than two years to exert some upward force on short-term
money rates. At the same time, we have minimized the pressures of
Governmental operations in the longer-term market so that
constructive investment at home would be encouraged. These measures
have been important in stemming outflows Into money market Instruments
abroad and, at the same time, continuing a ready availability of
funds for any form of productive new domestic investment — not only
during the recession which ended last year but also throughout the
expansion phase we have enjoyed since that time.
To those who favor some administrative check on outflows of
capital, or those who want some arbitrary forcing up of interest rates
on bank loans and capital issues to thwart flows abroad, the answer
must be essentially the same -- neither the public nor the private
sectors can be expected to take action which might handicap the
functioning of a competitive, market economy —- a capitalist economy.
But there are many answers that can be sought short of that
prescription. None will cut through the problems with a single,
decisive thrust; each will seem minor in itself, but will gain
decisive stength by being an incremental part of a comprehensive
total effort.
We know, for example, that Europe will not be able overnight to
transform its own capital markets in order to carry a larger part of
the world's capital requirements. But there are many kinds of steps
that can be taken, not only by the Europeans but by Americans as well,
that will help somewhat in lessening the pressure for outflows of
capital
from
the
American
markets
while
also contributing
toward
the
for
evolution
is symbolized
example,
of needed
in
byplacing
thenew
work
facilities
some
that
ofthe
its
Export-Import
in
own
Europe.
paper
with
This
Bank
European
kind
hasof
been
investors.
approach
doing,
fu
- 5The investment banking community in New York is making a comparable
contribution, not only in its own long-run competitive Interests but
also with short-run benefit to the American balance of payments, by
making increasingly vigorous efforts to attract European funds.
Those efforts extend also to the broader listing of American securities
on European exchanges. They have resulted in sales of a significant
proportion of recent security issues in New York to foreign investing
institutions — both directly and in secondary distribution. Pressures
have consequently begun to mount within those countries which still
maintain tight controls, as individuals seek the freedom to Invest
abroad and cite, in support of their desires, the currently strong
balance of payments positions of their particular countries.
And there are ways in which American business and banking can
also help in the financing of commercial requirements. Ingenuity in
searching out sources of funds abroad for American businesses
operating there, as well as imaginative extension of participation
arrangements to more foreign lenders in the credits granted by
American banks at home and abroad, can pay off in broadened contacts
and a wider range of services for any customers engaged In foreign
operations.
For the present, in the area of Governmental capital flows, we
have been successful in developing a large reverse flow to the
United States in the form of prepayments of long-term debt owed the
United States Government by the surplus countries of Western Europe.
Prepayments this year by France, Italy, and Sweden have already
amounted to $550 million. We know that such prepayments do not
"solve" our balance of payments needs, but they do reduce the
outstanding supply of dollars abroad that our foreign deficit would
have otherwise produced. They temporarily reduce strains while the
slower, but more lasting, forces of market adjustment are bringing
our trade and payments position back into equilibrium.
Cooperative efforts between nations have been the basis for most
of our progress over the past 18 months toward developing and
strengthening our International financial system. The backbone of
that system, as it has evolved out of experience since World War II,
rests on the widespread use of the dollar as a supplement to gold
in the international reserves of other nations and as a medium of
international payments.
This convertible gold-dollar system, bulwarked by the resources
of the International Monetary Fund, has served the world well. It has
provided ample liquidity to support more than a doubling of world
trade since 1950 — a trend which is continuing with an Increase of
6 percent in the first half of this year compared to the like period
of 1961. It has permitted the Industrialized countries to dismantle
part of their exchange controls, to lessen their restrictions on
capital
movements (and
in a few
cases to
remove
them) and
to restore
the convertibility
of their
currencies
for
all ordinary
payments.
- 6And it has, at the same time, allowed individual nations to work out
their own economic destinies, free to develop along the lines of their
own capacities and choices, but within a framework of ever-growing
cooperation among nations to work out and achieve common objectives.
These are no small accomplishments. Yet progress has brought
with it new problems. In meeting them, again in the spirit of
neglecting nothing, of trying to cope with all the pieces of the
problem, large or small, we have worked out in cooperation with the
other leading countries a new system of defenses for the dollar.
Little if any of this could have been done if the United States was
not clearly determined to bring its balance of payments back into
fundamental equilibrium, and to do this in a way that would be
adapted to the progress already achieved in liberalizing trade as
well as to the longer-run needs for convertibility, liquidity, and
growth in the future. All that has been done has rested on the clear
understanding — among all of the participating countries — that
financial arrangements, essential as they are for the support of
trade, cannot take the place of real correction in our underlying
balance of payments position.
Convertibility brought with it a freer flow of short-term funds
among nations. While this was a highly desirable addition to international liquidity, it also involved an increased risk of sudden and
disruptive flows of short-term capital between nations. Funds were
now free to move, at least on short-term, among all the leading
countries, not only in response to differences in money market rates
of interest but also in reflection of changing fears or hopes
concerning the weakness or strength of each country's economic
position. The balance of payments disciplines -- always present —
were even more clearly visible. The need was to develop new arrangements which, while never concealing the persisting force of those
disciplines, would limit the scope for speculative aberrations which
could so easily develop in the new environment.
This is why the United States, working step by step with the
leading foreign nations, has taken the initiative over the past
year and a half to build an enlarged set of defenses for the
International monetary system, building on experience and existing
institutions and supplementing and reinforcing the protection
already Implicit in the world's existing monetary reserves and in the
International Monetary Fund.
The new initiatives have taken the form of a new set of arrangements under which the United States, for the first time In a
generation, is dealing directly in the foreign exchange markets, in
a great enlargement of the resources available through the IMF, and
in the application of cooperative arrangements to the London gold
market. Taken together, an entirely new dimension has been added
to our international financial system.
Vi3
- 7One innovation Is that the United States is now holding foreign
exchange as part of its own reserves. These foreign currencies can
be acquired when one or another of the leading industrial countries
has a deficit with the United States, In turn, such holdings, once
acquired, can be used, with the understanding of the other countries
involved, to buy up dollars flowing into the hands of foreign
official institutions, thus becoming an alternative to drawing on
our own gold stock, if and when our dollar outflow might exceed the
amounts that one or another of these foreign central banks and
governments might wish to hold voluntarily. In a similar way,
temporary disturbances in the exchange markets can be checked before
setting off a massive speculative run as we alternatively acquire
and then release holdings of the other major currencies. Moreover,
our holdings of foreign currencies (or arrangements permitting us
to borrow them on a limited standby basis) can support much larger
sales of forward exchange. By participating in the forward markets
to assure larger availabilities of "turn-around" facilities, we make
it feasible, for example, for private parties abroad, who may wish
to hold dollars passing into their hands for temporary periods, to
go on holding them while assured of the availability of enough of
their own currency to meet expected needs at some later date.
With our own balance of payments in deficit, we have acquired
foreign currencies to support these activities largely by means of
so-called swap agreements arranged by the Federal Reserve with our
principal trading partners. These agreements provide for a
reciprocal exchange of currencies, usable by either party when needed
to meet temporary shifts in the international flow of funds. In
addition, we have on occasion acquired currencies from certain countries,
so far in modest amounts, by outright purchase, by direct Treasury
borrowing, or by accepting repayment of debts owed the United States
Government in usable foreign currencies rather than dollars.
Thus far, the operations have been mainly in the nature of
"pilot" projects, testing and probing the mechanical possibilities
and their possible usefulness. But experience has, I believe,
already demonstrated their valuae in meeting specific situations,
involving marks, Stfiss francs,, lire, guilders, and Belgian francs.
One encouraging characteristic of the operations already undertaken
has been the early reversibility of many of them. This point
clearly emerges from the recent full report on Treasury-Federal
Reserve operations prepared by Charles A. Coombs of the New York
Federal Bank. The release of this report reflects our policy of
making available to the public from time to time as much of the
detail of our. operations as we possibly can.
I should stress again, too, that it is no part of our intention
to disguise
basic
forces
ofthe
supply
and
demand,
or
the
various
fundamental
market
national
country.
evidences
financial
Wethe
forces
want
of
and
position
that
changing
need
arethe
of
reflected
needs
sensitive
United
andin
conditions
price
signals
States
fluctuations
of
or
in
any
changes
the
other
interin
In free
^
- 8markets. And as one of my foreign friends remarked to someone from
another country, perhaps with a slight ulterior motive, the United
States publishes and discloses its record so freely and frequently
that it could not — even if it were to try — hide the facts of
its balance of payments position from the intelligent observer.
Useful as these operations in the exchange markets have been,
it is not their past or current size that is so significant — although
the United States does have today approximately $900 million of foreign
currencies at its disposal, either in the form of cash or standby
facilities. Rather, the significance lies in the pattern set for
meeting future contingencies -- the technical feasibility of the
arrangements, their expansibility in time of agreed need, and the
ability to pinpoint the use of our resources at the point and time
of need.
All of these new arrangements are, of course, reinforced by the
enlarged capacity of the International Monetary Fund to provide
assistance in time of need. As a result of the increase in
subscriptions voted in 1958, the United States alone has a Fund
quota of over $4 billion. These facilities are being further
supplemented by the new $6 billion standby credit pool agreed to by
ten of the industrialized countries last December, a pool in which
the United States share of $2 billion is now awaiting final approval
by the Congress.
Taken together, these new arrangements — emerging from a mutual
understanding of common problems and needs among the industrialized
countries — powerfully enlarge the defensive capabilities of our
convertible gold-dollar system to withstand strains or shocks from
any source. A little of their defensive potential can be glimpsed
in the assistance that emerged so promptly and effectively at the
time of the recent Canadian difficulties, and during the spring of
1961, when sterling was under heavy pressure. But It is clear that
the emerging system is capable of much more, including both defending
the dollar itself from any conceivable attack as well as contributing
to the needs of the world for adequate international liquidity over
the years ahead.
The United States decision to hold foreign currencies as part
of its reserves — taken in conjunction with the wide range of
cooperative facilities being worked out with other leading countries —
can make a major contribution toward enlarging the usable means of
international payments. But we have only made the beginning. The
skills, energies and judgment of many men, In many countries, will
be needed to fashion the changing shape of these and possibly other
new measures as experience provides the needed tests.
The renewed and healthy confidence in the stability of our international monetary system so evident at the sessions of the world
central bankers
at the
Fund
meeting
last
nonetheless
arrangements
revealed
only
reflects
now
inand
bits
in finance
place
already
and pieces
— ministers
arrangements
an increased
as they
have
that
appreciation
emerged
have
necessarily
over
of the
the week
past
been
H^
- 918 months. It is worthwhile repeating the closing sentence in the
appraisal contained in a communique issued last Wednesday
(September 19) by the members of the ten countries in the Fund's
special resources group:
"The additional resources thus provided,
together with present national reserves and the
existing resources of the IMP, are large enough
to provide the support that might be needed to
assure the stability of the existing exchange
rate system as based on present gold parities."
But I cite that only to introduce the more important conclusion:
We must not claim too much. The emerging system presupposes — as any
workable arrangement must — that the United States and other leading
nations will pursue their expanding growth objectives and do so by
methods that will also assure an equilibrium in their basic trade
and investment accounts. That is why I have emphasized the priority
of the measures for meeting our own balance of payments problem here
today. And that is why it is so Important — as the President
stressed last week — that other countries now capable of doing so
assume a fuller share of the burdens of defense and aid.
In attacking those real and difficult tasks, we should not be
diverted either by false fears for the stability of our monetary
system or by vain hopes that mere monetary reform can substitute
for more basic measures. To sink back into complacency would be to
undermine all our very real achievements to date. But we must also
appreciate the progress that has been made, so that we can identify
the real challenges of the future and turn our energies toward
meeting them. In that process, the bankers of the Nation can play
a vital arid constructive role.
0O0
it tf
STATEMENT BY UNDER SECRETARY ROBERT V. ROOSA,
BEFORE
THE AMERICAN BANKERS ASSOCIATION CONVENTION,
ATLANTIC CITY, NEW JERSEY,
TUESDAY, SEPTEMBER 25, 1962.
First of all, I would like to thank the American Bankers
Association's Savings Bonds Committee for the exceptionally good
work its Chairman and members have done in behalf of the Savings
Bonds program. Secondly, I would like to express our appreciation
to each of you for your support of the Freedom Savings Bond Drive
held last May and June.
Savings Bond sales this year will total in the neighborhood
of some four billion, three hundred million dollars. This is less
than the four billion, five hundred and thirty-*five million dollars
that was purchased in 1961, but it represents a magnificent
achievement in light of the intense competitive market for savings
that we are witnessing. The sale of smaller denomination Savings
Bonds increased steadily this year, indicating successful achievements with payroll savers in industries and companies — including
many banks.
The partnership that exists between bankers and the Treasury
Department in this remarkable thrift program is unique. Many of
you are completing your 21st year of service as volunteer chairmen
of the Savings Bonds program* Through your support you have
rendered outstanding service to your Government and your country.
We in the Treasury are deeply appreciative of this. We are grateful too for the help you have given us in sustaining the concept
of systematic savings and fostering the habit of thrift among
millions of Americans*
4i7
- % ~
higher than that of last year. Our balaace of payments deficit —
at aa annual rata «— is now down to about $1.5 blllioa, compared
to $2.5 in 1961, and $3.9 ia 1960.
Added exports also mean added profits for American business.
They are a clear signal that we are competing successfully for
world business. To increase them is a most effective way to furthe
buttress the strength of the dollar as the main reserve currency
of the Free World.
The "1" Award is aow held by 1X0 companies. This is aa elite
group and I welcome you iato it*
REMARKS BY TEHASURY SECRETARY DOUGLAS DILLON AFTER PRESENTATION OF
"E" AWARDS FOR OUTSTANDING CONTRIBUTIONS TO THE U. S. EXPANSION
DRIVE, 3:00 P.M.t EDT, TUESDAY, SEPTEMBER 25, 1962
The blue-and-white nEM pennant, raised above factories mud
offices as a symbol of excellence in waging the production battle
of World War II, today signifies outstanding achievement In the
export of American goods and services to world markets. It is a
mark of excellence in what President Kennedy calls *'a new and
constructive context of national urgency."
President Kennedy revived the "E" Award on December 5, 1961,
at the suggestion of Secretary Hodges, as an incentive to American
management and labor to put forth their best efforts in selling
abroad.
It is clear that an increased level of exports is essential
in our progress toward a balance in our international payments.
I am glad to say that we have achieved significant gains, and that
our export trade has been one of the reasons. In the first half
of this year, our rate of exports moved to a level 6*1/2 percent
REMARKS BY TESASURY SECRETARY DOUGLAS DILLON AFTER PRESENTATION OF
E n AWARDS FOR OUTSTANDING CONTRIBUTIONS TO THE U. S. EXPANSION
DRIVE, 3:00 P.M., EDT, TUESDAY, SEPTEMBER 25, 1962
The blue-and-white "E" pennant, raised above factories and
offices as a symbol of excellence in waging the production battle
of World War II
t
today signifies outstanding achievement in the
export of American goods and services to world markets. It is a
mark of excellence in what President Kennedy calls Ma new and
constructive context of national urgency."
President Kennedy revived the ME" Award on December 5, 1961,
at the suggestion of Secretary Hodges, as an incentive to America
management and labor to put forth their best efforts in selling
abroad.
It is clear that an increased level of exports is essential
in our progress toward a balance in our international payments.
I am glad to say that we have achieved significant gains, and tha
our export trade has been one of the reasons, In the first half
of this year, our rate of exports moved to a level 6-1/2 percent
^7 O
- 2 higher than that of last year* Our balance of payments deficit —
at an annual rate -»- is now down to about $1.5 billion, compared
to $2.5 in 1961, and $3.9 in I960,
Added exports also mean added profits for American business.
They are a clear signal that we are competing successfully for
world business. To increase them is a most effective way to furthe
buttress the strength of the dollar as the main reserve currency
of the Free World•
The "E" Award is now held by 110 companies. This is an elite
group and I welcome you into it.
if 7 /
Wmm&m
REUSASE
Beybesaberif, 1962
SUPPL^ETKAL REPORT OF SDBSCPJPTIOI^S FOR LATEST ADVANCE REFUIffillJG
The Treasuiy Itepartment today announced a breakdown of the securities exchanged
for the 5-3/4§l Treasury iotes of Series A-1967, due August 15, 1967, and the # freasmy
Bonds of 1972, du© August 15, 1972, offered la the »eparf^^t , s latest refunding offer,
together witli total amounts eligible for exchange end remaining outstanding as of the
close of business, Itoday, Septes^** 24, 1962. fhis imeoraation (in millioiiii of doHar*
is ae follows:
SECUBITIES a AHDOI57S
1SSPI3B
mm il!iliSHRl^iss_i
Total
AMDtWS
v&wmimmw*^mwwm
5*1/Z% Otfs.
# s # ^a.6
2-5/8$ notes
2,839.4
S-1/4H Bofeas
V42.5
totals #13,543.5
M y IS, 1963, mi^ritieii
3-3/*$ Otf®$ 6,686.7
3*3/4$ lotas
S#047.5
4fl Ifetes
lf743.0
Totals $33f476.?
mm>wmB
$26,810.7
#D,7flUt
1,071.4
993.2
#t,34S.2
#
375.1
300*6
404,3
#1,040.5
$1,154.8
1,333.2
$
#
44S.7
720.0
370.3
#1,405,7
2,024.9
lltM?!
Q-tiPrP
$3,974.8
#5,281.0
¥&M
967.0
1,304.9
173.9
#MB.s
f7'6^'3
Amount
Remaining
Outstanding
# 6,706.8
1,606.2
2,245.0
# 9,458.0
# 5,280.0
3,022.6
1,19S,6
# 9,501.4
$18,959.4
fills total of subscriptions, $7,860.3 jaillion, Includes #7,519.2 aullion, ***c3S*«fc
at securities bald hy th© pablic. Of the #7,519.2 million ef public%%©ld securities
exchanged, #3,635.5 f&ilion (40.0 of those eligible for exchange) consisted of Fetirtt*
aa® 15, 1963, Maturities, and #3,685.7 alllioa (37.0 of those eligible fur exchange!
consisted of Ifey 15, 1963, aatarities.
S - 6/ f
<-/7 ^
TREASURY DEPARTMENT
WASHINGTON, D.C.
IMMEDIATE RELEASE
September 2 6 , 1962
SuPPI____NTAL REPORT OF SUBSCRIPTIONS FOR LATEST ADVANCE REFUNDING
The Treasury Department today announced a breakdown of the securities exchanged
for the 3-3/4$ Treasury Notes of Series A-1967, due August 15, 1967, and the 4$ Treasury
Bonds of 1972, due August 15, 1972, offered in the Department's latest refunding offer,
together with total amounts eligible for exchange and remaining outstanding as of the
close of business, Monday, September 24, 1962. This information (in millions of dollars)
is as follows:
EXCHANGED
FOR& AMOUNTS
SECURITIES
ELIGIBLE FOR EXCHANGE
AMOUNTS
ISSUES
Feb. 15, 1965, maturities
3-1/2$ Ctfs.
$ 6,861.6
2-5/8$ Notes
2,839.4
3-l/4$ Notes
3,642.5
Totals
$13,343.5
May 15, 1965, maturities
3-1/4$ Ctfs.
$ 6,685.7
3-1/4$ Notes
5,047.5
4$ Notes
1,743.0
Totals
$15,476.2
GRAND TOTALS $26,819.7
Amount
Remaining
Outstanding
3-3/4$ Notes
Series A-1967
4$ Bonds
of 1972
Total
$ 779.6
1,072.4
995.2
$ 375.2
260.8
404.5
$1,154.8
1, **>33*2
1,597.5
$2,845.2
$1,040.5
$3,885.5
$ 9,458.0
$
$
448.7
720.0
370.3
$1,405.7
2,024.9
544.2
$ 5,280.0
5,022.6
1,198.8
$2,435.8
$1,559.0
$5,974.8
$ 9,501.4
$5,281.0
$2,579.5
$7,860.5
$18,959.4
957.0
1,304.9
175.9
$ 5,706.8
1,506.2
2,245.0
This total of subscriptions, $7,860.5 million, includes $7,519.2 million of
securities held by the public. Of the $7,519.2 million of publicly held securities
exchanged, $5,855.5 million (40.8$ of those eligible for exchange) consisted of February 15, 1965, maturities, and $3,685.7 million (37.6$ of those eligible for exchange)
consisted of May 15, 1963, maturities.
D-618
d)2)
- 3 -
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 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 subje
to estate, inheritance, gift or other excise taxes, whether Federal or State, bu
are exempt from all taxation now or hereafter imposed on the principal or intere
thereof by any State, or any of the possessions of the United States, or by any
local taxing authority. For purposes of taxation the amount of discount at which
Treasury bills are originally sold by the United States is considered to be in-
terest. Under Sections 454 (b) and 1221 (5) of the Internal Revenue Code of 1954
the amount of discount at which bills issued hereunder are sold is not considere
to accrue until such bills are sold, redeemed or otherwise disposed of, and such
bills are excluded from consideration as capital assets. Accordingly, the owner
of Treasury bills (other than life insurance companies) issued hereunder need in
clude in his income tax return only the difference between the price paid for su
bills, whether on original issue or on subsequent purchase, and the amount actua
received either upon sale or redemption at maturity during the taxable year for
which the return is made, as ordinary gain or loss.
Treasury Department Circular No. 418 (current revision) and this notice, pre-
scribe 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.
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 accompani
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 b
final. Subject to these reservations, noncompetitive tenders for $200,000 or
(3&c)
less for the additional bills dated
July 5, 1962
, ( 91
days remain-
sps?
"_$&r
ing until maturity date on
January 5. 1965
) and noncompetitive tenders for
$ 150,000 or less for the is? *day bills without stated price from any one
bidder will be accepted in full at the average price (in three decimals) of ac-
cepted competitive bids for the respective issues. Settlement for accepted ten-
ders in accordance with the bids must be made or completed at the Federal Reser
Banks on October 4, 1962 , iu cash or other immediately available funds or
in a like face amount of Treasury bills maturing n^.nhPr 4. 1962 Cash
x$2Z$
-pM
X_2KCXMxkJK^2-_C
TREASURY DEPARTMENT
Washington
FOR IMMEDIATE RELEASE* September 26, 1962
xrxTroTXinrYYYxrx"^^
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 $2,000,000,000 , or thereabouts, for
-*—w^—
cash and in exchange for Treasury bills maturing
October 4, 1962 , in the amount
of $I,,9Q1,Q97|1QQQ > as follows:
91 -day bills (to maturity date) to be issued October 4, 1962
,
in the amount of $1,500,000,000 , or thereabouts, represent-
3p§c
ing an additional amount of bills dated
and to mature
January 5, 1965
July 5, 1962
,
, originally issued in the
amount of $700,181,000 , the additional and original bills
2P£xJ
to be freely interchangeable.
182 -day bills, for $700,000,000 , or thereabouts, to be dated
tm
2<a£x)
October 4, 1962
, and to mature
April 4, 1965
.
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, $50,000, $100,000, $500,000 and
$1,000,000 (maturity value).
Tenders will be received at Federal Reserve Banks and Branches up to the
Daylight Saving
closing hour, one-thirty p.m., EasterxV'^tMadsflaxKtime, Monday, October 1, 1962
Tenders will not be received at the Treasury Department, Washington. Each tender
must be for an even multiple of $1,000, and in the case of competitive tenders t
price offered must be expressed on the basis of 100, with not more than three
\1 ' ' L
TREASURY DEPARTMENT
gTO:^A'l'!UnU 1 iiiM, TO ^,. W .,»^.».-^ 1 .^
WASHINGTON. D.C.
N^V^x
7
September 26,1962
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
$2,000,000,000, or thereabouts, for cash and in exchange for
Treasury bills maturing October 4, 1962, in the amount of
$ 1,901,097,000, as follows:
91-day bills (to maturity date) to be issued October 4, 1962,
in the amount of $1,300,000,000, or thereabouts, representing an
additional amount of bills dated July 5, 1962,
and to
mature January 3, 19&3* originally issued in the amount of
$ 700,181,000, the additional and original bills to be freely
interchangeable.
182-day bills, for $ 700,000,000, or thereabouts, to be dated
October 4, 1962,
and to mature April k, 1963.
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, $50,000, $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 p.m., Eastern Daylight Saving
time, Monday, October 1, 1962.
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-619
accompanied by an express guaranty of payment by an Incorporated bank
or trust company.
- 2 Immediately after the closing hour, tenders will be opened at
the Federal Reserve Banks and Branches, following which public
announcement will be made by the Treasury Departmment of the amount
and price range of accepted bids. Those submitting tenders will be
advised of the acceptance or rejection thereof. The Secretary of
the Treasury expressly reserves the right to accept or reject any or
all tenders, in whole or in part, and his action in any such respect
shall be final. Subject to these reservations, noncompetitive
tenders for $ 200,000or less for the additional bills dated
July 5, 1962,
(91-days remaining until maturity date on
January 3, 1963)
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 Banle on October 4, 1962,
in cash or other immediately available funds or in a like face
amount of Treasury bills maturing October 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 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
0O0 the taxable year for which the
sale or redemption at maturity during
return is made, as ordinary gain or loss.
Treasury Department Circular No. 4l8 (current, revision) and this
notice prescribe the terms of the Treasury bills and govern the
conditions
their Bank
Issue.
Copies of the circular may be obtained fr<
any Federalof
Reserve
or Branch.
-"7 ''"
Sopfambor 26, If62
tm mmAm
k. M* mtmmte,
Thwroday. Sapttrtwr 2?« H 6 2 *
asawur Or .H_4s"jAr«i» 13 - U L U O H i7o»L*r w i junricxMixooi atf& onusum
Tha Troaiiay *o&rtaMNn& ansiotasi©o(i last omt&m
that the toodorf for f3,§OO,0OOfOQ(
or tfe**«ti>0ttt», of lax Anticipation ioiioa 170-dsy froagnupy hill® to 1*© datod oetobtr
1962, and to isaiuro m*.Foh ft, 1|63# whUh n n offotod on aapt&mbar 20, i**** opanod at
tho Kodoiwl riosorvo Baafca on Soptosabor 26.
tho dotoil* of thio iaoua ar® as follow*
fetal applied tar - #S,m,SliX,O0O
Total aoooptod
- 3»00O 9 9AfO0Q
Cineliidos U6*9$m*90QQ aatatad on a
noiicoapetliivs baa it &sd aeaoptod in
full at the uvar&ge prlfta ahoMa MaXsm)
maaa of aooaptod eaapoUtloa bid** (rw»p*iog two toadora totaling 13,100,000)
i&i* * f8»®2§ f^ulvalont rata at diaoowtt opprat* 2J±9?£ per agnsa
!«•
* 16.757
•
«• *
«
*
Mrtvtf*
- 96.765
•
» »
i
«
2,632s B
2y6l6S' "
»
"
(?5 poroont of tha amoisat bid for at tha ion pHoo ma aseoptod)
Ftdoval ftaaorvo
7istriot
total
•FMMM
2,7to,5jo,doo.
Wmton
Mm Itark
?hilad«lpt&a
GLovalaiid
Eio~@©ad
AtlAttU
Cftioago
St, Louit
^i£_n$apolis
S&naaa city
'jaXXaa
Oae '^ffk&oiBOo
m9$i$9m®
TOTAL
y
total
Aooootod
# 'H^jUA
X#2iib»MS»jQb#..
Ul 9 ftfc000
$03,373,000
136,772,000
225,610*000
6^8,665,000
l$3fl0O*OQO
lS7,&3o,©00
A f 2O3 9 000
290,860,000
ft*M?3iO(*
ifos^n^wo.
i5,?ia»5ia,ooo
,. Wt.flhW.
?7,*T,W
Uy^ao,Goo
1*^*365,000
<5>,3>0,0O0
U6,33i,OQO
n9 774,000
21^,330,000
#3,000,991,000
jn a ®:y*p<m iaauo of the aano langth afi-J for tho s&ift® anoint iaift&atoss, tho iPotam ««
thoao bills would pmrldo a yiald of 2«69f • ttitorost ratos on billa aro quota- in
torsi of b a A diacc-unt *dti: tha ratorn rol&torf to tim tarn aaarant of tho kill* f*J
abla at aastorlty rathor than tho o m u a t latostad and thoir length in aetml rna^m
of daya ralatod to a 36o-<ia,v yaar. In contraat, yields on eortlfloatoa, notos, *»
&Diid© are am$vt&$ in torus of mtoraat ®& the aooost invasttd, and raloto the n*
bar oiJ daya regaining In ma intaroat pa^st^t poriod to th® aotual atsabor of daya 1
tho r>erio7* with aasdanrwal ao^onnding If mm thaa on© coupon poriod ia infoit*
a
H
TREASURY DEPARTMENT
WASHINGTON, D.C.
September 26, 1962
FOR RELEASE A. M. NEWSPAPERS,
Thursday, September 27, 1962.
RESULT OF TREASURY1 S §3 BILLION 170-DAY TAX ANTICIPATION BILL OFFERING
The Treasury Department announced last evening that the tenders for $3*000,000,000,
or thereabouts, of Tax Anticipation Series 170-day Treasury bills to be dated October 3,
1962, and to mature March 22, 1963, which were offered on September 20, were opened at
the Federal Reserve Banks on September 26.
The details of this issue are as follows:
Total applied for - $5,941,541,000
Total accepted
- 3,000,991,000
(includes $£62,£46,000 entered on a
noncompetitive basis and accepted in
full at the average price shown below)
Range of accepted competitive bids: (Excepting two tenders totaling $3,100,000)
High - 98.820 Equivalent rate of discount approx. 2.k99% per annum
M
Low
- 98.757
"
"
"
"
2.632^ "
Average
- 98.765
»
"
"
"
"
2.6l6# '•
»
»
l/
(25 percent of the amount bid for at the low price was accepted)
Federal Reserve Total Total
District
Boston
New York
Philadelphia
Cleveland
Richmond
Atlanta
Chicago
St. Louis
Minneapolis
Kansas City
Dallas
San Francisco
TOTAL
Applied for
$256,794,000
2,760,530,000
236,515,000
503,373,000
138,772,000
225,610,000
690,665,000
153,490,000
187,838,000
94,203,000
290,880,000
402,871,000
$5,941,541,000
Accepted
I
96,619,000
1,11*4,205,000
111,515,000
296,873,000
97,047,000
l49,4L0,000
449,265,000
85,390,000
116,338,000
78,778,000
219,330,000
156,221,000
$3,000,991,000
1/ On a coupon issue of the same length and for the same amount invested, the retu
these bills would provide a yield of 2.69$. 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-620
/// V
-7 Administration is doing its part, through such efforts as the
establishment of programs of ^inatieial acrelofriroc and
information for exporters. Th^ Congress has also made
T, without major amendments,
essential contribution
,
the Trade Expansion Act, which
i
the key markets pf the world.
Much of the rest is
up to American business.
foOo
*~>-*>*•
V
V 7{
- 6 no grounds for complacency, for it has been achieved during a
period of relatively high unemployment and underutilization of
productive capacity. Nor should we relax our efforts because
some of our major foreign competitors are now experiencing
difficulty in holding down prices and in keeping wage increases
in line with productivity gains. For our competitors, too,
realize the stake they have in the maintenance of a stable
price structure and of competitive prices of their export
products. They will not, for long, permit any cost-price spiral to
unchecked.
Maintenance of a competitive price structure in this
country is not, however, the only responsibility which American
business has if we are to reach our goal of balance of payments
equilibrium. The mere existence of a competitive price structure
will not automatically expand our export sales. ^iii,uoaV^Selllng
effort is necessary,/initiative on the part of American firms to
find fesasabr potential overseas markets and exploit them. The
no
Meanwhile, .amjw government will continue to take all steps
possible to assure continuing reduction in our balance of
payments deficit. But there is one overwhelming responsibility
which rests not primarily on government at all but upon American
business and labor. This is the responsibility for continuing
price stability and a competitive cost structure. To be sure,
governmental policies can help. The reform of the tax treatment
of depreciation which we put into effect earlier this year and
the proposed 7 percent tax credit on new investment — now
reaching the final stages of Congressional consideration — were
undertaken with the» otojetttgiqc of stimulating business investme
in new, cost-cutting productive facilities, which will help keep
our products competitively priced in world markets. But the
ultimate decisions which will either stabilize or unstabilize
our price structure rest, in this country, essentially in private
hands. Our recent record of overall price stability should be
- 4 supply of funds in the free world to finance the world's rapidly
expanding trade — without upsetting strains.
Cooperation with our allies has extended beyond the
financial field, however.
Progress is being made toward a more
equitable sharing among the prosperous, industrialized nations
of the world of the burden of their mutual defense and of the
development of the underdeveloped world. Our allies understand
clearly that it is no longer in their own interest to expect the
United States to carry these burdens virtually unassisted. The
shift toward a fully equitable distribution of the cost of
mutual defense and of foreign aid will, however, take time.
X
- 3 for defense will — through a variety of measures — be reduced
by about one-third by the end of this year — down to $1 3/4
billion, compared with more than $2 1/2 billion in earlier years.
This reduction will come about without impairment, in any way,
of our military strength and that of our allies.
Second, the balance of payments cost of our foreign aid
program is being cut, without any diminution of overall aid
itself. In recent years, about two-thirds of our foreign aid
outlays have been in the form of exports of U. S. goods and
services, with only the remaining one-third being actually spent
abroad. We are now approaching our target of reducing ttatoi
OBweweap opmadamorto one-fifth of the total.
Third, a broad array of financial measures^iMace been undertaken aimed both at the immediate objective of preventing or
y
minimizing speculative movements of fupdls from one country to
another and at the longer-term objective of assuring a sufficient
^ ^ / l _ „. fi +•?%* t^t*****^.^yye^-^*^^^^'^'^^ *"
- 2 country has completely solved its balance of payments problems.
We have not, and we do not claim to have done so. Rather, the
present confidence in the dollar is based upon growing
recognition of the fact that this country will continue to move
ahead toward balance of payments equilibrium — that we know how
to achieve equilibrium and, even more importantly, that our
resolve to do so is firm and unshakable, regardless of the
difficulties that may lie in our path.
Much has been achieved already. Our overall balance of
payments deficit — the extent to which our expenditures around
the world exceeded our income — reached $3«9 billion in I960.
This was reduced to $2 1/2 billion in 1961 and the present
prospect Is that it will be reduced still further this year.
During the first eight months of this year, the deficit ran at an
annual rate of only a little over $1 1/2 billion.
This progress has been brought about in a variety of ways.
First, the net dollar cost of our necessary overseas expenditures
REMARKS OF THE HONORABLE DOWLAS DILLON
SECRETARY OF THE TREASURY
BEFORE THE /
WHITE HOUSE CONFERENCE OF, BUSINESS/EDITORS AND PUBLISHERS
STATE DEPARTMENT AUDITORIUM
WEDNESDAY, SEPTEMBER 26, 1962, 5:00 P.M. EDT
Confidence in the stability of the American dollar has
been restored. This important fact emerged clearly from last
week's meeting here in Washington of the financial leaders of
more than 80 nations of the free world. It has also been
demonstrated by the recent behavior of the world's foreign
exchange markets, which have showed remarkable stability — in
sharp contrast to the uncertainties and fluctuations which have
usually occurred at the time of the annual meetings of the
International Monetary Fund, the World Bank and their affiliated
organizations.
These concrete manifestations of confidence, heartening as
they are, should not be exaggerated, however, nor the reasons
behind them misunderstood. The new feeling of assurance in
world financial circles is not based on any belief that this
FOR RELEASE ON DELIVERY
L/?$
TREASURY DEPARTMENT
Washington
REMARKS OF THE HONORABLE DOUGLAS DILLON
SECRETARY OF THE TREASURY
BEFORE THE
WHITE HOUSE CONFERENCE OF
BUSINESS MAGAZINE EDITORS AND PUBLISHERS
STATE DEPARTMENT AUDITORIUM
WEDNESDAY, SEPTEMBER 26, 1962, 5:00 P.M.,EDT
Confidence In the stability of the American dollar has
been restored. This Important fact emerged clearly from last
week's meeting here in Washington of the financial leaders of
more than 80 nations of the free world. It has also been
demonstrated by the recent behavior of ,the world's foreign
exchange markets, which have showed remarkable stability — in
sharp contrast to the uncertainties and fluctuations which have
usually occurred at the time of the annual meetings of the
International Monetary Fund, the World Bank and their affiliated
organizations.
These concrete manifestations of confidence, heartening as
they are, should not be exaggerated, however, nor the reasons
behind them misunderstood. The new feeling of assurance In
world financial circles is not based on any belief that this
country has completely solved its balance of payments problems.
We have not, and we do not claim to have done so. Rather, the
present confidence In the dollar Is based upon growing
recognition of the fact that this country will continue to move
ahead toward balance of payments equilibrium -~ that we know how
to achieve equilibrium and, even more importantly, that our
resolve to do so is firm and unshakable, regardless of the
difficulties that may lie in our path.
Much has been achieved already. Our overall balance of
payments deficit -- the extent to which our expenditures around
the world exceeded our income -- reached $3.9 billion in I960.
This was reduced to $2-1/2 billion in 1961 and the present
prospect is that it will be reduced still further this year.
During the first eight months of this year, the deficit ran at
an annual rate of only a little over $1-1/2 billion.
This progress has been brought about In a variety of ways.
First, the net dollar cost of our necessary overseas expenditures
for defense will -- through a variety of measures -- be reduced
by about one-third by the end of this -year — down to $1-3/4
billion, compared with more than $2-1/2 billion In earlier years.
D-621
This reduction will come about without impairment, in any way, of
our military strength or that of our allies.
<J<tl
- 2 Second, the balance of payments cost of our foreign aid
Program is being cut, without any diminution of overall aid
itself. In recent years, about two-thirds of our foreign aid
outlays have been in the form of exports of U. S. goods and
services, with only the remaining one-third being actually spent
abroad. We are now approaching our target of reducing the
balance of payments cost of this program to one-fifth of the
total.
Third, a broad array of financial measures, based on international consultation and cooperation, has been undertaken aimed
both at the immediate objective of preventing or minimizing
speculative movements of funds from one country to another and
at the longer-term objective of assuring a sufficient supply of
funds in the free world to finance the world's rapidly expanding
trade — without upsetting strains.
Cooperation with our allies has extended beyond the
financial field, however. Progress is being made toward a more
equitable sharing among the prosperous, industrialized nations
of the world of the burden of their mutual defense and of the
development of the underdeveloped world. Our allies understand
clearly that it is no longer in their own interest to expect the
United States to carry these burdens virtually unassisted. The
shift toward a fully equitable distribution of the cost of
mutual defense and of foreign aid will, however, take time.
Meanwhile, the government will continue to take all steps
possible to assure continuing reduction in our balance of
payments deficit. But there is one overwhelming responsibility
which rests not primarily on government at all but upon American
business and labor. This is the responsibility for continuing
price stability and a competitive cost structure. To be sure,
governmental policies can help. The reform of the tax treatment
of depreciation which we put into effect earlier this year and
the proposed 7 percent tax credit on new investment — now
reaching the final stages of Congressional consideration — were
undertaken for the purpose of stimulating business investment
in new, cost-cutting productive facilities, which will help keep
our products competitively priced in world markets. But the
ultimate decisions which will either stabilize or unstabilize
our price structure rest, in this country, essentially in private
hands. Our recent record of overall price stability should be
no grounds for complacency, for it has been achieved during a
period of relatively high unemployment and underutillzation of
productive capacity. Nor should we relax our efforts because
some of our major foreign competitors are now experiencing
difficulty in holding down prices and in keeping wage increases
in line with productivity gains. For our competitors, too,
They
unchecked.
realize
structure
will
the
not,
andstake
of
for
competitive
they
long,
have
permit
in
prices
the
anymaintenance
cost-price
of their export
of
spiral
a products.
stable
to goprice
7/f?
- 3 Maintenance of a competitive price structure in this
country is not, however, the only responsibility which American
business has if we are to reach our goal of balance of payments
equilibrium. The mere existence of a competitive price structure
will not automatically expand our export sales. An increased
selling effort is necessary, as well as initiative on the part
of American firms to find potential overseas markets and
exploit them. The Administration is doing its part, through
such efforts as the establishment of programs of export
insurance, improved credit facilities and information for
exporters. The Congress has also made an essential contribution
by approving, without major amendments, the Trade Expansion Act,
which will make it possible to maintain our access to the key
markets of the world. Much of the rest is up to American
business.
0O0
'/ I z
m J m
I hasve every confidence that the work of this conference
will be productive of very worthwhile results. He ell desire to
end this social evil.
With continued vigorous law enforcement working hand in hand
with stepped-up scientific and medical research into the cause
mnd cure of drug addiction, I mm aura we can look forward to the
eventual elimination of this monstrous traffic in human misery.
1 wish you a most successful conference*
0O0
m {} m
forward-looking program could easily he offset by an increase in
the volume end profitability of the illicit drug traffic*
And that is the thought I would like to leave with you —
that the Treasury md its Narcotics Bureau are pert of any effort
to solve the problem of drug addiction, and that effective
enforcement is our contribution to that partnership, In turn, we
hope that those responsible for determining new methods will not
disregard the mmd for continued effective enforcement. There is
no conflict in aims, and there nmmd be no conflict in determining
the most effective measures to achieve those aims. We are confident that we can work creatively with those who seek new solutions,
end we are happy to make available what we have learned from our
experience. We are also able to learn from others, and we are
Well aware that solving such a complex problem requires close
cooperation*
H 16
* 5
m
traffic* We have come far since that time, but we still have a
long way to go. You will hear about the new programs and methods
in effect in California and in Hew fork, and I am sure you will
give them your close attention*
Aa you examine possibilities and alternatives, X would like
you to have Treasury's viewpoint clearly in mind:
- Because of the Bureau of Narcotics' responsibilities in the
enforcement area, and because we have opposed programs involving
legal supplying of addicts9 a number of people feel erroneously
that the Treasury Is not concerned with the human and social
problems presented by drug addiction* That is simply not the case.
We believe that there is much room for progress* and we alio eur
believe SM keeping an open"mind. Naturally, we are anxious that
the importance of effective enforcement not be overlooked. If
enforcement were ignored, the beneficial effects of any
7<?(
• 4 •
away from persons with an addiction potentiality*
Narcotics addiction is neither a normal* nor a socially
acceptable practice* Whatever its cause, treatment and cure must
be sought. There are many difficulties involved* It will be
your job to consider and examine them* A constructive solution
must and can be found. We must learn much more than we know now
about the causes — social, psychological, and physiological — of
addiction* At the same time, we must apply as effectively as
possible the knowledge we already possess*
I am certain that this conference will mark a milestone on
the road to eventual solution of the whole program of drug
addiction and abuse* It was nearly half a century ago that the
Congress adopted the Harrison Narcotic Act — the first of a
number of control measures seeking to suppress the illicit drug
traff_^#»-:::r^ivjte^h.aye
7
• 3
m
of allowing continued addiction by maintaining drug dosage* and
this has contributed to some public misunderstanding. The
Treasury Department and its Bureau of Narcotics do not favor thepenitentiary confinement of addicts In preference to treatment
and possible cure* We have never had such a policy. In keeping
with the viewpoint of the American Medical Association we have m
consistently urged treatment and cure. But we have, along with al
the President's Ad Hoe Panel* Joined the very respectable body
of authorities opposed to the defeatist alternative of making
narcotics legally available to addicts. illi«£fe m mLimtmm on
The Treasury Department and its Bureau of Narcotics have
always pursued a policy of vigorous law enforcement. We have
strongly advocated severe penalties for the illicit trafficker
whole illegal activities undermine our efforts to keep narcotic drugs
4f*
• 2 •
Treasury* and its Bureau of Narcotics, welcomes a conference such
as this* You are here to examine all aspects of the problem of
illicit narcotics* as well as the problem of drug abuse* You
are undoubtedly already aware of the widespread public misconceptions
concerning this problem. You will concern yourselves with what^
has been learned* and what needs to be learned* about root causes
of narcotics addiction* and what can be done to provide treatment,
rehabilitation* and cure*
The best cure is always prevention, and while we cannot hope
to solve the problem solely by prevention* enforcement plays an
important role in reducing the traffic. In that way, enforcement
makes a contribution which is absolutely necessary to eventual
solution of the problem.
The Treasury would be the last to suggest that enforcement '«!§§
is the whole solution* The Treasury has opposed the alternative
c
-/%
FOR RELEASE ON DELIVERY;
/
REMARKS OF THE HONORABLE DOUGIAS DILLON
SECRETARY OF THE TREASURY
AT THE WHITE HOUSE CONFERENCE ON NARCOTIC AND DRUG ABUSE
STATE DEPARTMENT AUDITORIUM* WASHINGTON, D.C*
THURSDAY, SEPTEMBER 27, 1962, 10:15 A.M., EDT
I want to express the appreciation of the Treasury Department
for your attendance at this conference. For many years the
Treasury's Bureau of Narcotics has fought both the national and
international traffic in illicit drugs. It has fought hard and
well, and the drug traffic today is far less than it would be
without the important work of narcotic agents, who not infrequently
face serious danger and even risk their lives in line of duty.
The ne&d to reduce this traffic still further remains urgent, and
the Bureau's enforcement activities will be just as important
in the future as in the past.
Despite the great strides made in control of the narcotics
traffic, the problem remains a serious one. That is why the
if? *
TREASURY DEPARTMENT
Washington
FOR RELEASE ON DELIVERY
REMARKS OF THE HONORABLE DOUGLAS DILLON
SECRETARY OF THE TREASURY
AT THE WHITE HOUSE CONFERENCE ON NARCOTIC AND DRUG ABUSE
STATE DEPARTMENT AUDITORIUM, WASHINGTON, D.C.
THURSDAY, SEPTEMBER 27, 1962, 10:15 A.M., EDT
I want to express the appreciation of the Treasury Department
for your attendance at this conference. For many years the
Treasury's Bureau of Narcotics has fought both the national and
international traffic in illicit drugs. It has fought hard and
well, and the drug traffic today is far less than it would be
without the important work of narcotic agents, who not infrequently
face serious danger and even risk their lives in line of duty.
The need to reduce this traffic still further remains urgent, and
the Bureau's, enforcement activities will be just as important in
the future as in the past.
Despite the great strides made in control of the narcotics
traffic, the problem remains a serious one. That is why the
Treasury, and its Bureau of Narcotics, welcomes a conference such
as this. You are here to examine all aspects of the problem of
Illicit narcotics, as well as the problem of drug abuse. You are
undoubtedly already aware of the widespread public misconceptions
concerning this problem. You will concern yourselves with what
has been learned, and what needs to be learned, about root causes
of narcotics addiction, and what can be done to provide treatment,
rehabilitation, and cure.
The best cure Is always prevention, and while we cannot hope
to solve the problem solely by prevention, enforcement plays an
Important role in reducing the traffic. In that way, enforcement
makes a contribution which Is absolutely necessary to eventual
solution of the problem.
The Treasury would be the last to suggest that enforcement
is the whole solution. The Treasury has opposed the alternative
of allowing continued addiction by maintaining drug dosage, and
this has contributed to some public misunderstanding. The
Treasury Department and its Bureau of Narcotics do not favor the
penitentiary confinement of addicts in preference to treatment
and possible cure. We have never had such a policy. In keeping
with the viewpoint of the American Medical Association we have
D-622
consistently urged treatment and cure. But we have, along with
the President's Ad Hoc Panel, joined the very respectable body
of authorities opposed to the defeatist alternative of making
narcotics legally available to addicts.
^u
- 2 The Treasury Department and its Bureau of Narcotics have
always pursued a policy of vigorous law enforcement. We have
strongly advocated severe penalties for the illicit trafficker
whose illegal activities undermine our efforts to keep narcotic
drugs away from persons with an addiction potentiality.
Narcotics addiction is neither a normal, nor a socially
acceptable practice. Whatever its cause, treatment and cure must
be sought. There are many difficulties involved. It will be
your job to consider and examine them. A constructive solution
must and can be found. We must learn much more than we know now
about the causes -- social, psychological, and physiological —
of addiction. At the same time, we must apply as effectively as
possible the knowledge we already possess.
I am certain that this conference will mark a milestone on
the road to eventual solution of the whole program of drug
addiction and abuse. It was nearly half a century ago that the
Congress adopted the Harrison Narcotic Act — the first of a
number of control measures seeking to suppress the illicit drug
traffic. We have come far since that time, but we still have a .
long way to go. You will hear about the new programs and methods*.
in effect in California and in New York, and I am sure you will
give them your close attention.
As you examine possibilities and alternatives, I would like
you to have Treasury's viewpoint clearly in mind:
Because of the Bureau of Narcotics' responsibilities in the
enforcement area, and because we have opposed programs involving
legal supplying of addicts, a number of people feel erroneously
that the Treasury is not concerned with the human and social
problems presented by drug addiction. That is simply not the
case. We believe that there is much room for progress, and we
also believe in keeping an open mind. Naturally, we are anxious
that the Importance of effective enforcement not be overlooked.
If enforcement were ignored, the beneficial effects of any
forward-looking program could easily be offset by an increase in
the volume and profitability of the Illicit drug traffic.
And that is the thought I would like to leave with you —
that the Treasury and its Narcotics Bureau are part of any
effort to solve the problem of drug addiction, and that effective
enforcement is our contribution to that partnership. In turn,
we hope that those responsible for determining new methods will
not disregard the need for continued effective enforcement. There
is no conflict in aims, and there need be no conflict in
determining the most effective measures to achieve those aims. We
are confident that we can work creatively with those who seek new
solutions, and we are happy to make available what we have learned
from
are well
cooperation.
our experience.
aware that solving
We aresuch
alsoaable
complex
to learn
problem
from
requires
others,close
and 4we
c{ <j
- 3I have every confidence that the work of this conference
will be productive of very worthwhile results. We all desire
to end this social evil.
With continued vigorous law enforcement working hand in hand
with stepped-up scientific and medical research into the cause
and cure of drug addiction, I am sure we can look forward to the
eventual elimination of this monstrous traffic in human misery.
I wish you a most successful conference.
oOo
<-/?<?
mmsm wcmim m umm wow®
imm im immmmz ACT
ma >tramm
Separtaeot has determined that Ugnin Taaillin
from Saaada ia not beiag, »cr likely to be* sold la the Hilted
States at lass thaa fair va&se vltMa the aaa&itig at ma *&%%&mm
Ast. Se4iee ©f til* ^fee^atoati®® vial be f^lished ia
the Federal
m$pM*r.
Appraieiss atfteara am being iiaNawted to wraaaad with
«»
.. -
,— -»- j-jj» Ar1t.4A wi!imni)Mi«ul4 • «
t® smy faeeticn at
'ftwMM j^AVUSkilA _r£4_<_31_t
X*_£IA_m
am&m*
fb© dollar valaa ©f iaparts of the involved atrefesadise
receivedtoriiag1 S & *«-* <r^^«acim^#3y |T7O*O0C.
2cc: &*. Hesdrick
ec: Mr. Settel
TREASURY DEPARTMENT
WASHINGTON, D.C. \^r—;
September 27,1962
FOR IMMEDIATE RELEASE
TREASURY DECISION ON LIGNIN VANILLIN
UNDER THE ANTIDUMPING ACT
The Treasury Department has determined that lignin vanillin
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 1961 was approximately $770,000.
TREASURY DEPARTMENT
Washington
STATEMENT OF STANLEY S. SURREY
ASSISTANT SECRETARY OF THE TREASURY
BEFORE THE
SENATE FINANCE COMMITTEE
ON H. R. 6371
FRIDAY, SEPTEMBER 28, 1962, 9:00 A.M.
The Treasury welcomes this opportunity to present its views on
H. R. 6371* This bill grants tax reduction to people retired on otherwise taxable Income by Increasing the retirement Income credit. The
Treasury Is very much aware of the financial problems encountered by
older people retired on limited incomes. We also recognize that the
problem of equalizing the tax treatment of Individuals retired on exempt
social security benefits and individuals retired on other forms of
retirement income Is an Important one. However, the liberalization in
the tax credit for retirement income proposed by H.'R. 6371 does not
constitute an adequate solution to this problem. The bill will give
little or no benefits to low Income retired people. Instead the benefits
would be concentrated heavily among those with highest retirement incomes*
Moreover, the bill, as a practical matter, would not achieve equality of
treatment among retired persons.
Legislative Background
Retirement benefits received under the social security program and
the railroad retirement program are excluded from adjusted gross income
under present law. The ruling which established this procedure with
respect to social security benefits was issued In 19^1 vhen benefits were
smaller and personal exemptions for taxpayer and spouse considerably
higher than they are today.
D-623
- 2 -
In 195^ the Congress adopted the retirement income credit. The
provisions of this credit were made to parallel in many important
respects provisions applicable to benefits paid under the social
security program. The Internal Revenue Code grants the retired
individual a credit against his tax liability equal to the tax computed
at the first bracket rate of 20 percent on the amount of his retirement
income up to $1,200. In 195^ $1,200 was roughly equivalent to the
maximum primary social security benefit. For persons aged 65 or
over, retirement income is defined to include rent, interest,
dividends, pensions and annuities. Government employees and
military personnel, regardless of age, may apply the credit to
income from public retirement systems.
In computing the credit, the amount of retirement income up
to $1,200 received by an individual must be reduced by the amount
of his social security or railroad retirement benefits. Congress
also provided substantially the same retirement test for the credit
as was then employed for social security purposes, l/
l/ Under the original legislation, an individual was permitted to
"~ earn $900 a year as an employee or in self-employment without
affecting his eligibility for the credit. However, the amount
of income on which the credit is based was reduced by $1 for
every $1 of earnings in excess of $900. An individual was not
eligible for any credit, therefore, if his wages equaled or
exceeded $2,100. The earnings test for retirement was waived
In the original legislation for those who had reached 75 years
of age.
- 3Provisions of H. R. 6371
H. R. 6371 would amend the provisions of the retirement income credit
to reflect changes made in recent years by amendments to the Social
Security Act. The most important change would increase the maximum
amount of income eligible for the credit from $1,200 to $1,52**-. The new
figure is the annual equivalent of the maximum primary social security
benefit ($127 a month) established in the 1958 amendments to the Social
Security Act.
The bill would also change the present earnings test for retirement.
Under present law, for people between 65 and 72, the base for the credit
Is reduced dollar for dollar for earnings in excess of $1,200. Under
the bill, such retired persons would only lose $1 of their credit
base for every $2 of earnings between $1,200 and $1,700. Earnings in
excess of $1,700 would continue to reduce the Income eligible for the
credit on a dollar for dollar basis.
The test described above would apply to retired government
employees 65 and over on the same basis as other retired individuals of
this age„ In addition, however, this test would apply to government
employees between the ages of 62 and 65 who are retired on a pension
received from a public retirement system. The present test for retired
government employees under 65 years of age reduces the amount of retirement income eligible for the credit on a dollar for dollar basis for
earned income in excess of $900.
- kShortcomings of the Bill
The maximum primary social security benefit is not an adequate guideline
In its report accompanying H. R. 6371> the Committee on Ways and
Means stated, '^C-he retirement income credit under present law Is designed
to give those who have retirement Income,but do not receive tax-exempt
social security or similar types of tax-exempt benefit: payments, a tax
exemption of approximately the same size as that received by social
security beneficiaries." In this regard, we do not feel that the maximum
primary social security benefit Is a proper benchmark for the retirement
income credit. The maximum benefit is by no means representative of the
general level of social security benefits. Virtually no one currently
receives the maximum benefit. At present it Is estimated that only about 25
retired Individuals receive the maximum benefit of $1,524. At the end
of i960 the average annual social security benefit was only $959 for a
retired man and $715 for a retired woman. These average benefits are far
below the $1,524 base for the credit established by H. R. 6371. l/ In
fact the $1,52^ base for the credit, which would be available under the
bill to a single person, even exceeds the average social security benefits
received by a retired worker and his wife. The latter benefits, which amount
l/ Not only is the average level of social security benefits far below
$1,524, but, under present law, it will remain so, for many years. To
receive the maximum monthly benefit of $127 a retired worker must have
received $4,800 in every year used to compute his average monthly
earnings. Prior to 1958, however, the base for social security wage
deductions was less than $4,800 a year. Thus only In exceptional cases
can anyone receive the maximum primary benefit at the present time.
1TD
T-
- 5 to 1-1/2 times the primary social security benefit, averaged $1,487 at
the end of i960.
The bill would raise the base for the retirement income
credit to $3,048 where both husband and wife are entitled to the tax credit.
While this is the legal maximum for social security benefits for a husband
and wife both entitled to the maximum primary benefit, we are aware of no
couples actually receiving this amount.
The bill would benefit primarily persons with substantial retirement incomes
In evaluating H. R. 6371 It must be remembered that present tax law
contains a number of provisions designed to meet the special needs of
people living on retirement incomes. A person who has reached the age of
65 may claim an additional $600 exemption on his tax return. If the
taxpayer's spouse is also 65, he may claim an additional exemption for
her as well. Persons 65 and over receive a more liberal medical expense
deduction than other taxpayers. Social security and railroad retirement
benefits paid to retired persons are tax exempt.
As a result of these provisions, taxpayers 65 and over may now receive
considerable amounts of income free of tax. Because of the additional
exemption, the retirement Income credit and the standard deduction, It la
possible under present law for a single person 65 or over to receive
$2,667 without paying tax. A person under 65 with the same Income would
have to pay a tax of $360,
If H. R, 6371 were enacted, a single person
65 years of age would have no tax to pay o n e retirement income of $3,027
($3,500 if the income comes from dividends) while a younger person would
have a tax bill of $425. These differentials are just as marked for
married couples. A married couple both age 65 and both eligible for the
- 6 -
retirement Income credit can receive an Income of $5,333 at present
without paying tax. A younger married couple with the same Income must
pay a tax of $720. Under H. R. 6371, a retired couple would be able to
receive $6,053 free of tax while a younger couple would have to pay tax
of $855 on the same Income. These examples indicate that existing
provisions for retired taxpayers relieve most of those with low Incomes
of tax.
Liberalization of the retirement Income credit as provided In
H. R. 6371 vould be of primary benefit to retired persons with relatively
substantial incomes. A man and his wife both eligible for the retirement
income credit could reduce their tax bill by $129 under this
bill. If their income were entirely from dividends, this would raise
to $7,000 the amount such a couple could receive free of tax. This
Implies that the Individual's holdings of stock amounted to about $150,000.
Few persons 65 or over have Incomes and assets of these magnitudes. The
median income in i960 for families in which the head of the household had
reached 65 was $2,897*
According to the i960 Census of Population, there are 16.6 million
persons In the 65 or over age group. Less than one-half of these persons,
7.7 million, filed i960 Income tax returns. Less than one-quarter,
3.9 million, filed taxable returns. Most persons In this age group —
12.7 million out of 16.6 million — are thus nontaxable under present
law and would not benefit from further liberalizations. Furthermore,
^J3
-7 only a small part of those who now file taxable returns would be in
position to take advantage of the provisions In H. R. 6371. In i960
an estimated 452,000 persons 65 or over claimed a retirement Income
credit. This figure represents only 2.6 percent of those In the population who are.65 or more years of age.
Moreover, the bill would provide tax benefits to Individuals who
receive social security benefits In addition to their other retirement
Income, At present social security benefits must be subtracted from
the $1,200 limit from which the credit Is computed. If the limit were
raised to $1,524, these persons would have a larger retirement Income
credit. This appears to be inconsistent with the basic purpose of the
credit, which is to eliminate tax discrimination In favor of persons
with social security or other nontaxable pension and annuity income.
Conclusion
The income and tax status of retired persons and aged persons
generally has been affected tn recent years by significant changes in
social security, other public retirement programs, and private pension
and retirement plans* In the case of social security alone there have
been four major changes since 1954- The rapidity with which these changes
have occurred suggests the desirability of a re-examination of the practic
of linking provisions of the Internal Revenue Code to provisions of the
Social Security Acts
- 8 H. R. 6371 would involve an estimated revenue loss of $40 million
a year. The chief issue that the bill raises is why this tax reduction
should be provided now to a relatively small group of retired people who
already receive favorable tax treatment. Individuals generally are not
receiving tax reductions at this time. The bill la advanoed on the
ground that the maximum amount of social security benefits hae been
inoreased. Actually! however, only about 25 individuals of the millions
of social security beneficiaries receive the maximum social seourity
benefits. Moreover, and this is a most significant faot, the change in
social security benefits has not in any way altered the economic position
of people eligible for the credit*
As you know, the treasury, at th§ direction of the President, is
prepriag a comprehensive tin reform program for presentation to the
next session of the §@»g?§§_e Ma^or aspects of this program will be a
reduction ©f income tan re tee and the development of a more equitable
tax base* fat fiepartaeat recommends that legislation dealing with the
retirement income credit be deferred until it can be considered in the
perspective of the tax reform program, tte treasury department is
therefore opposed to the enactment of I, H, ilfi,
- 6Representatives of Treasury's Bureau of Customs, Bureau of
Narcotics, Secret Service and Internal Revenue Service served as
Delegates to Madrid. U. S. observers included representatives
from the F.B.I., Department of Defense, and the Agency for
International Development. The next General Assembly of Interpol —
the 32nd -- will be held in Helsenki, Finland, in September 19&3.
Mr. Sagalyn has been activfe in criminal police work since
A
1939 and has held responsible positions in Federal and municipal
police agencies. He has served as Chairman of the U. S.
Delegation to the 1961 and 1962 General Assemblies of Interpol.
in.,;ite^4jO@tei%^J_w»^>
0O0
- 5Serving as delegates on the Executive Commitee are
Patrick Wiechmann, Chief of the Foreign Police Department,
Chile; ^g|t Heide-Joergensen, Director General of Police of
Denmark; |§J| F. Franssen, Commissioner General, Judiciary Police,
Belgium; Hg| Bejra Napombejra, Chief of the Interpol Section,
Foreign Affairs Division, Thailand; H§ Mohamed Zentuti, Director
General of the Federal Police, Libya; and .$$. Hans Furst, Chief
Prosecutor, Switzerland.
2^M&S
Director of Law Enforcement Coordination for the
kg
Treasury Department, M&%^$&^M$r\ oversees all criminal investigations
involving narcotics, counterfeiting, smuggling, tax fraud, Federal
regulations of firearms and the enforcement of port and shipping
Y
regulations. His responsibility includes the coordination of the
I criminal enforcement activities of U. S. Bureau of Narcotics, Bureau
1
I of Customs, Secret Service, Internal Revenue Service and the U.S.
Coast Guard.
<u\-
_ 4 -
amended its previous Act to authorize the Attorney General to
designate the Treasury Department to serve as the United States
representative.
*•**,
Interpol Is directed by an Executive Committee composed of
a president, two vice presidents and six delegates, all of
whom must l3«$aei^ different countries and must represent
different geographical areas of the world.
President of Interpol
and representing Europe is ¥fs. R. L. Jackson, Assistant Commissione
of New Scotland Yard in charge of criminal investigations whose
term of office expires in 1964. Vice President for a one-year
term and representing the Eastern Hemisphere is JgS| Arturo Xavier,
who is Deputy Director of the National Bureau of Investigation,
Republic of the Philippines.
Mr. Sagalyn was elected at this week's General Assembly
In Madrid to a three-year term as Senior Vice President and
I
/ representative of the Western Hemisphere.
***,
S^SMj*
•'-'^Wf?r<!my>
™^mwmts*m<«+*t*Py),,
"Wr fio,, j ^
. 3.
<>°
of and provided by the police of the countries concerned. Each
country works through a national law enforcement agency designated
as the National Central Bureau by the Government of each member
country.
In the United States the Treasury serves as the Interpol
representative and its Office of Law Enforcement Coordination
acts as the National Central Bureau. This office receivs and
A.
coordinates all requests for information which eminate to or from
the United States from the Secretariat or the National Central
Bureaus of the various 83 member countries.
PQ£Ut&Vf£±0 ——*--*™"»"«-^
A
^eeause of Mfi^esponslbilitles wi^sh involvJT international
criminal activities sgfpa as narcotics trafficking, counterfeiting,
and smuggling, the Treasury Department had maintained a close interest
all U.
in Interpol for many years/./
U. £S. membership was authorized by
*"» *»*
Congress in 1938 $0$ this function was first handled by the
Federal Bureau of Investigation in the Department of Justice. In
1950, however, the U. S. withdrew from Interpol and maintained
an unofficial status In the Organization until 1958 when Congress
S~D t
- 2 police matters. Through its Seeretarjf in Paris Interpol provides
J
intelligence, recordfand communication services on criminal police
matters for its 83 member countries. Except for Cuba, which has
been a member for many years, but has not actively participated
in Interpol since Castro's assumption of power, no communist
bloc countries are members of the organization.
Organized in 1923 by a small group of European countries
who saw the need {and advantages a£j promotjj-6 mutual assistance
and cooperation between their criminal police authorities, Interpol
first had its headquarters in Vienna. At the outbreak of World War IL
its records were seized by the Germans and taken to Berlin^ ^fl
the organization became largely defunct. In 19^6 Interpol was
reactivated and its headquarters transferred to Paris where it
today.
A. centralized criminal records and information service
is provided by the Secretariat which also maintains a control statio
P
for a world-wide radio communications network.
All criminal
investigation and enforcement functions are the responsibility
DRAFT --
9-28-62
€vf
FOR RELEASE SUNDAY NEWSPAPERS
SEPTEMBER 30, 1962
CRIMINALSAHAVE NO PLACE TO HIDE,
SAYS TREASURY'S INTERPOL CHIEF
"The days of escape for criminals to far away places is
drawing to an end," Wt&> Arnold Sagalyn, Director of Law Coordinati
of the Treasury Department and newly elected senior Vice President
of the International Criminal Police Organization (Interpol) said
today on his return from the international organization's 31st
General Assembly which ended this week in Madrid, Spain.
"The increasing effectiveness and success of Interpol as an
international criminal police intelligence and communications
organization has left today's criminal no place to hide. No
matter what part of the world T-fwefoii^h he may seek to operate n
the odds are against him that his identification and
f t
£ $•»• 7, "*( fc f *f %
illegal activities will remain u
~~~ Mr. Sagalyn commented
Interpol is an international body which was organized to
promote international cooperation and assistance in criminal
f•
Qi
,0^
4
U > '*'M
y-~L/
5 /6
TREASURY DEPARTMENT
WASHINGTON. D.C.
September 28, 1962
FOR RELEASE SUNDAY NEWSPAPERS
SEPTEMBER 30. 1Q62
CRIMINALS WILL HAVE NO PLACE TO HIDE,
SAYS TREASURY'S INTERPOL CHIEF
The days of escape for criminals to far away places is
drawing to an end," Arnold Sagalyn, Director of Law Coordination
of the Treasury Department and newly elected senior Vice President
of the International Criminal Police Organization (Interpol) said
today on his return from the international organization's 31st
General Assembly which ended this week in Madrid, Spain.
"The increasing effectiveness and success of Interpol as an
international criminal police intelligence and communications
organization has left today's criminal no place to hide. No matter
what part of the world he may flee to or seek to operate, the odds
are against him that his identification and illegal activities
will remain undetected," Mr. Sagalyn commented.
Mr. Sagalyn was elected at this week's General Assembly In
Madrid to a three-year term as Senior Vice President and
representative of the Western Hemisphere.
As Director of Law Enforcement Coordination for the Treasury
Department, he oversees all criminal Investigations involving
narcotics, counterfeiting, smuggling, tax fraud, Federal regulations
of firearms and the enforcement of port and shipping regulations.
His responsibility Includes the coordination of the criminal
enforcement activities of U. S. Bureau of Narcotics, Bureau of
Customs, Secret Service, Internal Revenue Service and the U. S.
Coast Guard.
Mr. Sagalyn, 44, has been active in criminal police work since
1939 and has held responsible positions In Federal and municipal
police agencies. He has served as Chairman of the U. S. Delegation
to the 1961 and 1962 General Assemblies of Interpol.
Interpol is an International body which was organized to
promote international cooperation and assistance in criminal
police matters. Through its Secretariat in Paris, Interpol provides
Intelligence, records and communication services on criminal police
matters for its 83 member countries. Except for Cuba, which has
been a member for many years, but which has not actively participated
D-624
in Interpol since Castro's assumption of power, no communist bloc
countries are members of the organization.
37/
- 2 Organized in 1923 by a small group of European countries who
saw the need to promote mutual assistance and cooperation between
their criminal police authorities, Interpol first had its
headquarters in Vienna. At the outbreak of World War II, its
records were seized by the Germans and taken to Berlin. The
organization became largely defunct. In 1946, Interpol was
reactivated and its headquarters transferred to Paris where it is
today.
A centralized criminal records and information service is
provided by the Secretariat, which also maintains a control station
for a world-wide radio communications network. All criminal
investigation and enforcement functions are the responsibility of
and provided by the police of the countries concerned. Each
country works through a national law enforcement agency designated
as the National Central Bureau by the Government of each member
country.
In the United States the Treasury serves as the Interpol
representative and its Office of Law Enforcement Coordination acts
as the National Central Bureau. This office receives and
coordinates all requests for information which eminate to or from
the United States from the Secretariat or the National Central
Bureaus of the various 83 member countries.
U. S. membership In Interpol was authorized by Congress in
1938. This function was first handled by the Federal Bureau of
Investigation in the Department of Justice. In 1950, however, the
U. S. withdrew from Interpol and maintained an unofficial status
in the Organization until 1958, when Congress amended Its previous
act to authorize the Attorney General to designate the Treasury
Department to serve as the United States representative. Previously,
because of responsibilities involving such international criminal
activities as narcotics trafficking, counterfeiting, and smuggling,
the Treasury Department had maintained a close interest in Interpol
for many years,
Interpol Is directed by an Executive Committee composed of
a president, two vice presidents and six delegates, all of whom
must come from different countries and must represent different
geographical areas of the world. President of Interpol and
representing Europe Is R. L. Jackson, Assistant Commissioner
of New Scotland Yard in charge of criminal investigations, whose
term of office expires in 1964. Vice President for a one-year
term and representing the Eastern Hemisphere is Arturo Xavier,
who is Deputy Director of the National Bureau of Investigation,
Republic of the Philippines.
- 3Serving as delegates on the Executive Committee are
Patrick Wiechmann, Chief of the Foreign Police Department, Chile;
Heide-Joergensen, Director General of Police qf Denmark!
F. Franssen, Commissioner General, Judiciary Police, Belgium;
Bejra Napombejra, Chief of the Interpol Section, Foreign Affairs
Division, Thailand; Mohamed Zentuti, Director General of the
Federal Police, Libya; and Hans Furst, Chief Prosecutor, Switzerland.
Representatives of Treasury's Bureau of Customs, Bureau of
Narcotics, Secret Service and Internal Revenue Service served as
Delegates to Madrid. U. S. observers included representatives
from the F.B.I., Department of Defense, and the Agency for
International Development. The next General Assembly of Interpol —
the 32nd — will be held in Helsenki, Finland, in September 1963.
0O0
Treas.
HJ
10
.A13P4
v.133
Treas.
HJ
10
.A13P4
U.S. Treasury Dept.
Press Releases
U.S. Treasury Dept
Press Releases
TITLE
v.133
DATE
LOANED
BORROWER'S NAME
PHONE
NUMBER
U.S. TREASURY LIBRARY
1 0031505
@FedFRASER