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LIBRARY
POOM 5030
JUN 1 6 1972
TREASURY DEPARTMENT
LIBRARY
R()OM 5030
JUN 161972
TREASURY DEPARTMENT
~d,
,(
)
t'
tJlli
t('ri
:;I.'it,r>;,
::>,vinr,s 1\<'ll'ls 1-:'1)",j nnrl fj,'d""IT"rj
_
1"(1'
I:,'
-- --·--------------t·--1."
-
11, 1963
Hill rot l1('c(,6G:1rily Ildd
;'1)11
- .---- - · - - - - - - - - - - - - - r - - ' v - n < ~~; 1----.-· lunount
Iss'l cl J.I lledeemcd
-
"hr('~lJ:1l july
II
t."
!.nt,nlr:)
Amount
;~ Ol.ltl;tnndu
OutstandinG;:'; of Amt,IssUl
1;1, ; j)
-.~
: "ri, " A-i'l)5 - D-19/,1 ,.........
:-""rif's l' F.. G-19/,1 - 1950 ••••••••
r:' .. •· ~1'''·'·
~-~LJ..:;,,)
Series
J'::
11
1'1/, 1
1' 1/, ,~
1')1,3
1 '.1/,/,
1',)1, )
· ................... .
) ')/.()
1 ')1,7
] ')/, g
1 ')1.')
·................... .
$
5,003
28,512
$
4,990
28,375
$
13
137
.26. "
.48.
~~~====~======~===~,
1,826
8,066
12,982
15,120
11,836
5,317
5,008
5,159
5,074
4,424
3,831
4,007
4,557
4,595
4,761
4,573
4,294
4,149
3,876
3,854
3,862
3,717
1,595
1,537
6,814
10,953
12,626
9,677
4,123
3,700
3,102
3,552
3,009
2,590
2,641
2,793
2,708
2,766
2,665
2,415
2,170
1,974
1,798
1,572
1,230
185
290
1,252
2,029
2,494
2,159
1,194
1,308
1,457
1,522
1,414
..
15.88
15.52
15.63
16.49
18.24
22.46
26.12
28.24
i
30.00
31.96
1~241
32.39
) rYi;':
1,366
34.09
)'))3
1,763
38.69
J flj/,
1,887
41.07
.1 ')))
1,994
41.88
J '))6
1,908
41.72
) 0~j7
1,878
43.74
l'))H
1,919
47.70
1 r)j') · .................... .
1,902
49.07
10()O ..................... .
2,056
53.35
2,290
11)61. · .................... .
59.30
1()62 · .................... .
2,487
66.91
1,409
88.34
1963 · ................... .
TlJ)01 flSS i fip.d •••••••••••••••••• 1___...:;5;.:;.;5..;.j8-t-_ _....5.''-l1..,;8~-+-_ _ _..;-;;.::2:.:::0~_+._ _ _--1
Tntnl Sr>riPf; E ....... ,........
127,041
87,779
39,262
30.90
,C)t3 rj s Ii (1952 - 196 J ) •
1---9~J2-2-3-f---l-=~;...9-84~-+----..,;;~I~-'..-23-1~9--I.--~
718 ..-..h-1
]1))0
.I ())l
•
••••••
III
•••••••••••••
·
¥. . ... .. . .
p
Tot.fll Sf'rjPs E ami Ii ......... .
Spri0G f nwl G (1951 - 1952).....
Spri,0s .1 Rno K (1952 - 1957) ....
I1(".'11
All
l./
J
11
w'
m~t.un:d •••••••
Tr>t.nl lmmntured •••••
I Gr:md Total •••••••••
,~""'rips ~
9
136,264
1,007
89,763
781!J
46,501
34.13
227
22.54
r---~--~~--~~--~-----~~---+--~~~
3.699
2J OOO
1.700
h5.96.
4,706
21.781
1,927
40.9S
33,515
140,970
174,485
33,364
92,543
125,907
151
48,427
48,518
discmmt.
value.
bond s may be held and
·.':i) 1 enrn interest for additional periods
nft.pr original maturity dates.
Includes matured bonds which have not been
presented for redemption.
1I,('.I1),j··'S
.4S
34.3S ,
27.84 '
nCCI1.100
CqJ"I'''nt rf'cipmption
J\ t op f, i on of O'.'me r
I
j
BUREA U OF 'mE PUBLIC DEB1
Q','
Uni ted States SavincR Bonris I.r;~ lled and Tkdr>f>rred Throur.h July
(Dollar amounts in millions -
rc"11
(led 8nd
Amc1ult
Issu(d
11
31, 1963
\'Iill r:ot necessarily odd t.o totflLr.)
l\JnoW1t
Hedeemed
11
% OutBt.nwIlJl(
Amotmt
OutstandinG 21 of Amt.lr;[;\F~c
\TUiIED
3eries A-1935 - 0-1941 ••••••••••
)eries I' & G-19l.1 - 1950 ••••••••
.~!'li\TUT@
)eries E:
$ 5,003
28,512
$ 4,990
28,375
1,826
8,066
12,982
15,120
11,836
5,317
5,008
5,159
5,074
4,424
3,831
4,007
4,557
4,595
4,761
4,573
4,294
4,149
3,876
3,854
3,862
3,717
1,595
1,537
6,814
10,953
12,'626
9,677
4,123
3,700
3,702
3,552
3,009
2,590
2,641
2,793
2,708
2,766
2,665
2,415
2,170
1,974
1,798
1,572
1,230
185
558
127,041
578
87,779
-20
39,262
136,264
89,763
46,501
13
137
.26%
.48%
J./
191.1
191.2
191.3
191.4
19/.5
••••
CI
•••
a •••• " •••••••
·............•......
...................0..
o ••••••••••••••••••••
.00
••• 0
•••••
0
••••••••
1 ')/.6
• • 00 • • • • • • • • • • • • • • 0&.
1<)~7
••••• o ••••••••• o •• e ••
].9/. 8' •••••• ., ••••••••••••••
·................... .
11)41)
1950 • • • • • • • • • • • • • • e • • • • • •
1951
.,
.,
11)')2
1953
195/.
1955
.,
10')6 • • • • • • • • • • • • • • • cG • • • •
11)57
"
19')8
.,
1951)
1960
.,
1961 "
"
1962
1963 ..••••..••••••••
·.......... ..... .. .
·................... .
•••••••••••••• 0
••••••
·........... ....... .
..... ............. .
··.......
........... .
·............... ... .
CI
• • • • • • • • • • • • • • ., • • • • •
•
0
• • • • • • • ., • • • • • • • • • • •
..... ............. .
•
•••••••••••••• 0
•••••
"~.e.
Unclassified ••••••••••••••••••
Totol Series E................
-3eries II (1952 - 1963).~ ••••••••
Total Series E and II ••••••••••
~eriee F and G (1951 - 1952).....
.:)e r ie s J and K (1952 - 1957) ••••
290
1,252
2,029
2,494
2,159
1,194
1,308
1,457
1,522
1,414
1,241
1,366
1,763
1,887 .
1,994
1,908
1,878
1,979
1,902
2,056
2,290
2,487
1,409
15.88
15.52
15.63
16.49
18.24
22.46
26.12
28.24
30.00
31.96
32.39
34.09
38.69
41.07
41.88
41.72
43.74
47.70
49.07
53.35
59.30
66.91
88.34
I------~~----~~--~------~---t---------·--
30.90
1---9~,2-2-3-+---1.:;....9-8-4-+---7..:;...2-:3-1~9-- _ICltJGL_--_
1,007
~
781
227
_
.~
e:=z:
34.13
_3
.'
t . ,.
i(!
22.54
I----~--~~--------+--------~---~-----~~--
1-_..-:.
.0~0~0_
3..:&.,6;:;,.:)9:..4-9..;-_~2l,.,.;
...__--.-;1;;.o'1-J.7..;:;.OO~_If-~4~15 ~16... __
Total SAries F, G, J and K ..•.
i~l
.
4,706
2 1781
1,927
40.95
I=======*=======r-========~====--===
33,515
33,364
151
Total matured •••••••
.45
Serip.s To\.o.l tmnJatured .....
140,970
92,543
48,427
34.35
Grand Total •••••••••
174,485
125,907
48,578
27.t34
:Includes accrued discotmt.
Current redemption value •
. At option of ovmer bonds may be held and
will earn interest for additional periods
nfter original maturity dates.
Includes matured bonds whioh have not been
presented for redemption.
BUREAU OF THE PUBLIC Dr-;BT
2
August 2, 1963
lrelitlinarJ figures show trot about $6,374 million, or 96.0;."
of
Treasury certificates and bonds maturing August 15, 19G3, aggre~tin.g $6,s.2
million, were exchanged for the ncv 3-3/4% notes oi'fered in the current ex-
change.
About )268 miliion, or 4.;)%, of the tw maturing 1ssues remain tor
cash redenlption.
Of the maturing securities held outside the Federal Reserve Banke aDd
Government accounts, lO.Oo;f, were not exchanged.
Details of the exchange are
El1£b~~.
for .~9.~
68
follovs:
(1n millions)
.0XC?~~ by
FREIs and
Govt. Accts.
lul
Total
--othere
..
l~
~cur1t1es
Amountu
3-1/?:f, etfa.
2-1/2% bonds
$5,181
70 7
352
;.;>1,315
910
$5,ll2
$ 69
1,461
_1,262
.J!!
Totals
'VO ,642
)4,1-19
.t2,225
;.;,G ,374
$268
;~,::;,
Unexch!DJ!4
Final figures ref.,"8.rd.ill£: the exchange will be announced a:rter :f1Dal repoN
TREASURY DEPARTMENT
FOR IMMEDIATE RELEASE
August 2, 1963
PRELIMINARY RESULTS OF TREASURY'S CURRENT EXCHANGE OFFERING
Preliminary figures show that about $6,374 million, or 96.0%, of
Treasury certificates and bonds maturing August 15, 1963, aggregating $6,642
million, were exchanged for the new 3-3/4% notes offered in the current exchange.
About $268 million, or 4.0%, of the two maturing issues remain for
cash redemption.
Of the maturing securities held outside the Federal Reserve Banks and
Government accounts, 10.8% were not exchanged.
Details of the exchange are as follows:
Elie;ible for
Exchan~e
Exchan~ed
(in millions)
bl
All
others
Total
Exchanged
Unexchanged
Securities
Amounts
FRB's and
Govt. Accts.
3-1/2% ctfs.
2-1/2% bonds
$5,181
1,461
$3,797
352
$1,315
910
$5,112
1,262
$ 69
199
Totals
$6,642
$4,149
$2,225
$6,374
$268
Final figures regarding the exchange will be announced after final reports
are received from the Federal Reserve Banks.
000
D-928
4
- 5 -
Forging and negotiating government checks continued to be a
large-scale criminal business, with the number of cases investigated
in 1963 rising to a total of 47,505, compared to slightly more than
40,000 in the previous 12 months.
/JJ;,..~,.. ~ .
Chief Rowley credited
"clc~e ~onds"
with other law enforcement
agencies as enabling the Service to achieve "gratifying success"
during the year.
He gave great credit to state and municipal
l
polic\ organizations for their cooperation.
As is customary, in reporting on the Secret Service's vital
task of protecting the President, his immediate family and the
Vice President, the fiscal year summation resorts to the laconic
statement that this "most important responsibility" was "effectively
provided," and that security arrangements for trips within the
United States and abroad were carried out "without significant
incidents."
- 4 Compared with the previous fiscal year, it would seem that
counterfeiting dropped off, because the totals of currency
siezed before circulation decreased from $3,567,020.43 in fiscal
1962 to $2,845,823.25 in fiscal 1963.
a trend, Chief Rowley reported.
This in no way represents
Shortly after the turn of the
year the Secret Service broke a counterfeiting ring in the
San Francisco area, which was involved with the printing and
passing of
so~e
$2 million in bogus bills.
In this instance and
othe~occurring
in North Carolina and
Florida, employees and equipment of legitimate printing houses were
involved in "big time" counterfeiting cases nipped in the bud by
the Service.
Other major cases inVOIved[::s usua"S "repeaters"
with previous criminal records, two of which took place in Chicago
and Los Angeles.
- 3 -
7bogus money before it could be passed gpoI1./ an unsuspecting pUblic.
1'1' ...;'
1\
~ ~ ') , '
Thus, only one out of every seven counterfeits made during the
A
year resulted in a loss to the public.
The record of arrests and convictions is impressive:
total of 3,717 persons were convicted for all
offens~s
•
',j
investigated by the Service.
a
!
These included~f cours~ cases of
forgery of Government checks and bonds as well as currency.
Of
the cases brought to trial during the l2-month period,
97.6 percent resulted in convictions -- and, in 92.3 percent
of these cases, the criminals pleaded guilty.
Because the fiscal year ended during a period of intense
Secret Service activity against criminals operating in states
along both eastern and western seaboards, the report presents an
anomalous statistical situation.
7
- 2 -
"Supposedly trusted employees were using such equipment
after normal working hours without either the consent or the
knowledge of their employers," &hi
of
He pointed
Bnl.]aey -said;
out that the quality of counterfeit currency has improved with
advances made in the graphic arts.
C iltef
/Cc IJ..,)~ ~r'
~€ ce~eF&>stressed
'l
the fact, however, that Special Agents
of the Secret Service had "continued a sustained drive with
marked success against the counterfeiters of our currency and
other obligations in the past fiscal year.
This year proved to
be another unprofitable year for counterfeiters."
I ~,'
.:::
~';.
; \ ' '7
~
(,
I f~
-r!'
Chief Rowley's figures show that a total of $3,394,263 was
to..
received by the
Service during the period.
Banks, businesses
and individuals turned over to the Secret Service $548,400 in
fake bills, with which they had been victimized -- but Secret
Service agents had ~tuali1 siezed from counterfeiters $2,845,823 in
Treasury Department
Washington, D.C.
August 2, 1963
FOR RELEASE SUNDAY A.M. PAPERS:
AUGUST 4, 1963:
COUNTERFEITERS ARE USING GOOD
COMMERCIAL EQUIPMENT)SECRET SERVICE REPORTS
The Chief of the United States Secret Service today warned
business firms using printing equipment to "become more familiar
with the activities of their employees" because such activity
accounted for much of the counterfeiting which took place over
the past year.
Chief James J. Rowley, in his annual report to Treasury
Secretary Douglas Dillon said:
~\
q
TREASURY DEPARTMENT
August 2, 1963
FOR RELEASE IN NEWSPAPERS
SUNDAY, AUGUST 4, 1963
COUNTERFEITERS ARE USING GOOD
COMMERCIAL EQUIPMENT, SECRET SERVICE REPORTS
The Chief of the United States Secret Service today warned
business finns using printing equipment to "become more familiar with
the activities of their employees" because such activity accounted
for much of the counterfeiting which took place over the past year.
Chief James J. Rowley, in his annual report to Treasury Secretary
Douglas Dillon, released today, said:
"Supposedly trusted employees were using such equipment after
working hours without either the consent or the knowledge of
their employers." He pointed out that the quality of counterfeit
~urrency has improved with advances made in the graphic arts.
~onnal
Chief Rowley stressed the fact, however, that Special Agents of
the Secret Service had "continued a sustained drive with marked
~uccess against the counterfeiters of our currency and other obligation~
In the past fiscal year. This year proved to be another unprofitable
rear for counterfeiters."
Chief Rowley's figures show that a total of $3,394,263 in
~ounterfeits was received by the Service during the period.
Banks,
)usinesses and individuals turned over to the Secret Service $548,400
~n fake bills, with which they had been victimized -- but Secret
lervice agents had seized from counterfeiters $2,845,823 in bogus
noney before it could be passed to an unsuspecting public. Thus, only
)ne out of every seven known counterfeits made during the year resulted
_n a loss to the public.
The record of arrests and convictions is impressive: a total of
1,717 persons were convicted for all offenses investigated by the
iervice. These included cases of forgery of Government checks and
londs as well as currency. Of the cases brought to trial during the
.2-month period, 97.6 percent resulted in convictions -- and, in
2.3 percent of these cases, the criminals pleaded guilty.
(MORE)
-929
- 2 -
Because the fiscal year ended during a period of intense Secret
Service activity against criminals operating in states along both
eastern and western seaboards, the report presents an anomalous
statistical situation.
Compared with the previous fiscal year, it would seem that
counterfeiting dropped off, because the totals of currency seized be fori
circulation decreased from $3,567,020.43 in fiscal 1962 to
$2,845,823.25 in fiscal 1963. This in no way represents a trend,
Chief Rowley reported. Shortly after the turn of the year the Secret
Service broke a counterfeiting ring in the San Francisco area, which
was involved with the printing and passing of some $2 million in
b'Jgus bills.
In this instance and others occurring in North Carolina and
Florida, employees and equipment of legitimate printing houses were
involved in "big time" counterfeiting cases nipped in the bud by the
Service. Other major cases involved "repeaters" with previous
criminal records, two of which took place in Chicago and Los Angeles.
Forging and negotiating government checks continued to be a
large-scale criminal business, with the number of cases investigated
in 1963 rising to a total of 47,505, compared to slightly more than
40,000 in the previous 12 months.
Chief Rowley credited "strong bonds" with other law enforcement
agencies as enabling the Service to achieve "gratifying success" durin~
the year. He gave great credit to state and municipal police
organizations for their cooperation.
As is customary, in reporting on the Secret Service's vital task
of protecting the President, his immediate family and the Vice
President, the fiscal year sumTIation resorts to the laconic statement
that this "most important responsibility" was "effectively provided,"
and that security arrangements for trips within the United States and
abroad were carried out "without significant incidents."
A copy of the Secret Service's Annual Report is attached.
000
: ,
TREASURY DEPARTMENT
UNITED STATES SECRET SERVICE
WASHINGTON 25, D.C.
OFFICE OF THE CHIEF
August 1, 1963
MEMORANDUM TO THE SECRETARY
Attention:
Mr. Robert A. Wallace
Assistant to the Secretary
From:
Mr. James J. Rowley
Chief, U. S. Secret Service
Subject:
Secret Service Annual Report
The Annual Report of the activities and
accomplishments of the U. S. Secret
Service for the Fiscal Year ended June 30,
1963, is herewith submitted.
/
~
(/XJt~-fC- "l~c-V1r
~.
/ ' .
,
~'. ~--'
~
"')
U. S. Secret Service
Annual Report
Fiscal Year Ended June 30, 1963
1
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, the
members of his Dnmediate family, the President-elect, the
Vice President or other officer next in the order of succession to the office of President, and the Vice Presidentelect; protect a former President, at his request, for a
reasonable period after he leaves office; 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 Federal land bank associations.
Protective and Security Activities
Protection for the First Family and the Vice President,
the most important responsibility of the Secret Service, was
effectively provided during the past fiscal year.
Security
arrangements for their trips within the United States and
abroad were successfully carried out without significant
incidents.
- 2 -
Investigative and Enforcement Activities
Special Agents of the Secret Service continued a sustained drive with marked success against the counterfeiters
of our currency and other obligations in the past fiscal
year.
This year proved to be another unprofitable year for
counterfeiters.
The quality of counterfeit currency improves with the
advances made in the graphic arts.
There were a number of
instances during the year in which printing equipment of
legitimate business firms was used for making counterfeit
money.
Supposedly trusted employees were using such equip-
ment after normal working
ho~rs
or knowledge of their employers.
without either the consent
The ease with which this
crime was accomplished points up the necessity for employers to become more familiar with the activities of
their employees, particularly those who have access to
printing equipment.
During this past fiscal year 662 persons were arrested
for counterfeiting offenses and 47 counterfeiting plants
were seized.
Counterfeit currency received during this past
",
.)
L .-_
- 3 year amounted to $3,394,263, but only $548,440 resulted in
a LOss to the public.
Special Agents of the Secret Service
seized $2,845,823 before it could be passed upon an unsuspecting public.
Only one out of every seven counterfeits
manufactured resulted in a loss to the publico
The following counterfeiting cases are prime examples
of why this crime showed small profits in fiscal year 1963.
By eliminating counterfeiting at its source, the bulk of
bogus money was seized before it became a threat to the
publico
The speed with which counterfeit notes are manu-
factured and distributed today, makes it necessary for the
Secret Service to take quick .and effective measures of
suppression.
In June 1963 at Durham, North Carolina, $1,038,860
in counterfeit $20 notes were seized by our agents.
The
counterfeit money had been manufactured less than two days
before the arrests were made and the seizure accomplished.
Agents arrested five persons.
The counterfeit money was
manufactured by the owner of a legitimate printing business
and an employee.
An undercover agent purchased $30,000 of
the counterfeit leading to the arrest of the major distributor
- 4 and the seizure of over a million dollars in counterfeit
money from his car and residence.
Only $10,000 in counter-
feit money produced by this ring has not been located at
the present time.
This amount was allegedly sold to one
of the men arrested but its present whereabouts is
unknown.
However, it will be recovered or its previous
destruction accounted for, before the Secret Service closes
this case.
Only a few of these notes have been circulated.
In June 1962 a new counterfeit $50 bill appeared in
Fort Lauderdale, Florida.
During the following two weeks
the notes were passed throughout the Miami area.
Investi-
gation disclosed the identity of the passer as an employee
of a Fort Lauderdale printing firm.
On July 5, 1962, he
was arrested and $99,000 in counterfeits, with plates and
negatives used in their manufacture, were seized.
The
passer who was also the manufacturer had made the counterfeits in two days, using company equipment and without the
knowledge or consent of the owner.
passed prior to the passer's arrest.
Only ten notes were
He is now serving a
five-year sentence in a Federal prison.
In June 1962, a private detective, formerly a Washington,
- 5 D. C. police officer, asked a friend to find a buyer for
counterfeit $100 money and plates used for their printing.
In canvassing his contacts, the friend, through a third
party, unknowingly approached undercover agents of the
Secret Service for the sale.
On July 29, 1962, the two
principals completed the delivery transaction of $434,000
in counterfeit $100 notes and the counterfeit plates to the
undercover agents.
With their arrest a large scale counter-
feiting escapade was nipped in the bud
e
Thus, a severe
financial loss to the public was averted.
In August 1962 two legitimate printers from Miami,
Florida, joined forces to
$20 currency.
ma~ufacture
counterfeit $10 and
Their years of experience in the trade, and
the availability of excellent equipment and supplies enabled
them to produce deceptive counterfeit notes.
On August 17,
1962, agents arrested a third man, a friend of one of the
printers, at Dayton, Ohio, for passing counterfeit notes.
Through him the location of the plant was established and
that same evening one of the printers was arrested in
Miami Beach and the entire counterfeiting plant seized.
The second printer, having marital problems, had left
- 6 Florida and was arrested in Midland, Texas, on August 19,
1962.
A total. of $132,000 in counterfeit currency was
seized in this case.
Less than $500 in counterfeit notes
was passed on the public.
A year ago in Chicago, Illinois, new issues of counterfeit $10 and $20 notes appeared.
They were crude by current
standards and believed to be the work of amateurs.
Within
a short tLme, additional new Lmproved issues appeared
which were associated with the crude issue through analysis
of printing defects.
It was obvious that the counterfeiters
were making progress.
By January 1963 more than $17,000 in
twelve different issues of counterfeit notes had been
passed within the city of Chicago, all determined to be
the work of the same group.
continued.
Intensive investigation was
It was determined that a small group of hoodlums
were in control of the distribution of the notes throughout
the city.
Simultaneous raids were conducted in April 1962
on a restaurant and a residence in Chicago, which resulted
in the arrest of the five manufacturers, and the seizure of
the press, plates, negatives and several thousand dollars in
uncut counterfeit notes.
Included in the seizure were
plates for a new counterfeit $5 note which had not yet been
printed.
- 7 -
Counterfeiting has its share of repeat offenders.
A
Los Angeles man, who was arrested on January 8, 1963, for
manufacturing counterfeit notes, had just completed a prison
term on September 12, 1962, for the same offense.
Service first arrested
h~
in 1958.
The Secret
Before being sentenced
for counterfeiting in 1958, he fled to Mexico where once
again he became involved in the manufacture of counterfeit
notes.
He surrendered to Federal authorities in 195g e
The following table is a summary of the seizures of
counterfeit money during the fiscal years 1962 and 1963:
Counterfeit Currency
1962
1963
Loss to the public
$
567,896.35
$ 548,440.50
Seized before circulation
$3,567,020.43
$2,845,823.25
$4,134,916.78
$3,394,263.75
Total
The above figures, showing a decrease in the dollar
amount of counterfeiting from that of the previous year, do
not indicate a trend.
To illustrate, shortly after the past
fisca1year, a $2 million plus counterfeiting ring was broken
in the San Francisco area.
Thus, the
cr~e
ing continues to be a potential threat.
of counterfeit-
- 8 -
Forgery of government checks continue to represent
a major enforcement problem for the Secret Service.
During
the past fiscal year the Secret Service investigated 47,505
cases involving a face amount of $4,711,861.22, an increase
of 11.0% cases over the previous year.
A total of 3,343
persons were arrested for check forgery offenses during
the year.
The Secret Service also investigated 7,169 cases invo1ving the forgery of U. S. Savings Bonds, representing a
face amount of $931,845.53, an increase of 22.8% cases
over the previous year.
During the year 81 persons were
arrested for bond forgery offenses.
The following case summaries demonstrate the various
types of people and the varying size of their forgery
operations.
The crime of forgery and negotiation of U. S. Treasurer's
.
checks is not new to the narcotic addict. Two such persons,
a man and a woman in Pittsburgh, Pennsylvania, were arrested
in August 1962 for stealing, forging and cashing 19 Treasury
checks totalling $1,807.36.
The woman was a repeat forger,
having been arrested on a previous occasion for the same
offense.
Following her arrest and while on bail, she was
- 9 -
admitted to a hospital after having taken an overdose of
barbiturates
0
She subsequently recovered and on March 14,
1963, she was sentenced to a term of three years.
The male
defendant committed suicide while incarcerated in a county
jail awaiting judicial disposition of his case.
An involved check forgery ring consisting of ten
persons, five men and five women, was broken in November
and December 1962 with their arrest in Atlanta, Georgia,
for the forgery and cashing of 35 government checks totalling
$2,365.47.
All defendants were convicted and received
sentences ranging from two years imprisonment to two years
probation.
An example of preliminary criminal planning involved
two former inmates of the Uo S. Penitentiary, Atlanta, Georgia.
Prior to their release, plans were made that upon being discharged from the penitentiary they would team up to steal,
forge and cash government checks e
Their criminal operations
began in Boston, Massachusetts, on March 31, 1962, and continued through New York, Ohio, Pennsylvania, New Jersey,
Illinois and Michigan, until the arrest of one of the men
in Chelsea, Massachusetts, on May 3,
1963~
This man had
been arrested and convicted for government check forgery
- 10 on four previous occasions.
The second man was arrested in
Michigan on November 23, 1962, for another offense, and is
now serving a sentence in the Michigan State Penitentiary.
Together they stole, forged and cashed 142 U. S. Treasury
checks having a face value of $10,564.70.
Their illegal
check cashing operation, while not unique, was successful.
On occasions they would open a checking account at a bank,
deposit stolen and forged checks and later draw a check
against the balance.
In addition, they would use the pass-
book number of their account as identification in cashing
other forged checks at branch banks.
Investigation and
photographic evidence reflected that one of the criminals
attempted to alter his physical appearance from time to
time.
The criminal arrested in Massachusetts was able to
obtain a reduction in his bail from $10,000 to $5,000,
which he was able to furnish.
When released on bail , he
immediately proceeded to sell 11 stolen Treasury checks to
an informant of the government.
He was recently sentenced
to serve a five-year prison term.
On May 2, 1963, in Washington, D. C., a woman was
arrested for mUltiple check forgery.
All 29 checks having
- 11 a total face value of $2,680.22 were alleged to have been
forged and negotiated by this person who has been indicted by a grand jury and is currently awaiting trial.
A repeat forger was arrested on April 25, 1963, in
Cincinnati, Ohio, for the forgery and negotiating of a
$1,105.20 check in the purchase of a used caro
He had been
previously arrested by the Secret Service in September 1958
for check forgery, receiving a one-year sentence.
He was
arrested for the second time in December 1960, again by
our Special Agents and charged with check forgery, receiving a two-year sentence.
His third attempt at forgery
resulted in a three-year sentence o
The increased number of stolen U. So Savings Bonds
which are forged and negotiated was revealed by the activity
of a group of five individuals who were arrested in New York
State in February 1963.
They had successfully forged and
negotiated 451 of these bonds having a total maturity value
of $68,250.
The bonds, registered to nine different owners,
were stolen in burglaries of residences and business establishments in New York, New Jersey and Illinois.
The
principal defendant who had possession of these bonds
- 12 -
solicited the services of the other four defendants.
These
four opened accounts at various New York banks in the
name of the stolen bonds' registered owner.
They then
presented the forged bonds for payment a day or two later
using the account for identification.
Another check forger repeater was arrested January 1963
in Des Moines, Iowa, by local law enforcement officers as a
result of a previously placed "lookout notice".
This man
and his wife are alleged to have stolen, forged and cashed
over 100 government checks totalling $11,176.47 which were
cashed in Minnesota, Michigan, New York, Colorado, California,
Nevada, Ohio, Illinois, Utah,. Oregon, Washington, Iowa,
Nebraska, Vermont, New Hampshire, Maine, Indiana, Rhode
Island, Pennsylvania, Massachusetts, Wyoming, Idaho and
Maryland.
This man had an arrest record dating back to
July 10, 1946, and is a four-time repeater in the forgery and
negotiation of government checks.
escapade began on June 3, 1961.
His current criminal
He travelled by automobile,
and on one occasion he had to abandon his car after an
accident.
He then purchased another car to which he affixed
extra license plates he carried with him.
Unlike most other
~
13 -
forgers, this man was also known to have effected the escape
of a former wife after her arrest in Madison, Wisconsin, by
using a gun.
Both defendants are currently awaiting judicial
disposition e
As the result of the passage of a new law last year
prohibiting the use of coin slugs, the Secret Service has
made 59 arrests.
While the number of such cases reported
in this past fiscal year has not been great it is to be
assumed that it will continue to increase.
The following table shows the number of criminal and noncriminal investigations completed by the Secret Service in
fiscal years 1962 and 1963.
This table reflects the arrest
of 121 persons in fiscal year 1963 for crimes other than
counterfeiting and forgery, bringing the total of persons
arrested to 4,207 in fiscal year 1963.
Cases of all types
investigated by the Secret Service, totalled 71,969, an
increase of 12.8%.
Cases Investigated
FY 1962
FY 1963
Counterfeiting
Forged Government Checks
Forged Government Bonds
Miscellaneous Criminal
Miscellaneous Non-Criminal
10,052
40,351
7,804
1,187
4,297
10,378
47,505
7,169
1,080
5,837
63,791
71,969
Total
- 14 FY
Arrests
Counterfeiting
Forged Government Checks
Forged Government Bonds
Miscellaneous Cr~es
Total
1962
FY
1963
737
3,414
82
169
662
3,343 .
81
121
4,402
4,207
A total of 3,717 persons were convicted for offenses
investigated by the Secret Service.
Of all Secret Service
cases brought to trial in the past fiscal year, 97.6%
resulted in convictions; 92.3 per cent of these involved
pleas of guilty.
The incidence of crfmes over which the Secret Service
has investigative jurisdiction remains generally consistent
with the nationwide crime trend.
Yet, despite the rise in counterfeiting and related
crfminal activity, the past fiscal year demonstrated the
increase in proficiency of the Secret Service organization
and methods -- but perhaps even more
~portantly
it under-
lined the growth and development of cooperation between all
levels of law enforcement over the past several years.
It
has been the strong bonds between the Secret Service and law
enforcement agencies that have enabled the Service to achieve
- 15
~
gratifying success in those protective and investigative
functions c
Great credit is due to state and municipal
police organizations in this respecto
August 2, 1963
FOR RELEASE AT 6:00 PM, EDT
FRIDAY, AUGUST 2, 1963
JOINT JAPANESE - UNITED STATES
COMMUNIQ~
On July 31, Foreign Minister Ohira arrived in Washington for
conversations with the President, Secretary Rusk, Secretary Dillon,
Under Secretary Ball and other officials of the United States Government.
During his stay in Washington, Foreign Minister Ohira discussed a
wide range of matters of mutual interest to Japan and the United States,
including trade, finance and recent developments in the international
situation. The conversations produced a deeper understanding of common
problems and contributed to the strengthening of the partnership between
the two countries.
Both sides agreed on the importance of the balance of payments
program announced by the President in his Message to the Congress of
July 18, in view of the key position of the dollar in the international
financial system and the present balance of payments problem of the
United States. United States officials explained the need for taking
action with respect to total U.S. private long-term portfolio investm8nts
abroad because of their sharp rise from a 1959-61 average of $600 millior.
to $1.1 billion last year and an annual rate of over $1.8 billion the
first h~lf of this year.
Of particular importance to Foreign Minister Ohira was the possible
impact on Japan of the legislative proposal to be submitted to the
Congress for an interest equalization tax
He expressed anxiety that the
interest equalization tax would shut off the flow of 10ng-tenTI capital
to Japan, which his Government conside~s necessary for the continuation
of Japan's economic growth and the stability of its balance of payments.
United States officials agreed that the sound economic growth of Japan
is of vital importance for the prosperity and stability of the entire
free world and that an appropriate flow of long-term private capitol to Japan
was desirable. They further made clear their expectation that Am8rican
investors would continue to purchase Japanese securities after imposition
of the tax, so that its imposition would not prevent Japan from
obtaining sufficient capital from the United States and other sources
to preserve the stability of its balance of payments.
u
Secretary Dillon informed the Foreign Minister that the draft
legislation on the interest equalization tax, as it will be proposed to
the Congress, will include a provision allowing the President to grant
~ertain exemptionsif the imposition of the tax were to have such
~onsequence for a foreign country as to imperil or threaten to imperil
:he stability of the international monetary system.
(HORE)
- 2 -
It was agreed that if, contrary to United States expectations,
serious economic difficulties were to arise in Japan, the United States
would consult with Japan on the appropriate measures that might then be
taken to meet the problem, including consideration of some form of
exemption from the proposed interest equalization tax for new issues
of securities. It was decided to create a special joint JapaneseAmerican economic consultative task force to maintain a close liaison
on these problems.
000
TREASURY DEPARTMENT
August 6, 1963
NOTE TO EDITORS AND CORRESPONDENTS:
Robert W. Reese has been appointed Public Affairs
Officer for the Treasurer of the United States, Mrs. Kathryn
O'Hay Granahan.
Mr. Reese has served since 1954 as Director of Public
Information, Treasury!s Savings Bonds Division, Washington, D. C.
From 1948 to 1954, he was Director of Advertising and Promotion,
Savings Bonds Division, Seattle, Washington, for the Pacific
Northwest.
Prior to that he was Public Relations Director,
Pacific Northwest, for the Return of World War I I Dead
Program,
Depar~ment
of the Army.
Mr. Reese attended the University of Missouri and the
University of Washington, where he received a B. A. degree in
1938, and an M. A.
degree in 1939 in literature and philosophy.
During World War II, Mr. Reese served as combat intelligence
officer with the 13th and 92nd Combat Bomb Wings and with
Headquarters, USAFE.
He holds the rank of Colonel, USAF Ready
Reserve.
Mr. Reese is in Room 3417, Main Treasury Building,
(WO 4-2041).
Dixon Donnelley
Assistant to the Secretary
(Public Affairs)
TREASURY DEPARTMENT
')
)
FOR IMMEDIATE RELEASE
WITllliOLDING OF APPRAISEMENT ON
VITAL WHEAT GLUTEN
The Treasury Department is instructing customs field officers
to withhold appraisement of vital wheat gluten from Canada,
manu~
factured by The Ogilvie Flour Mills Co., Limited, pending a
deter~
mination 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 19, 1963.
dollar value of imports received during 1962 was approximately
$432,000.
The
TREASURY DEPARTMENT
FOR IMMEDIATE RELEASE
WITIDlOLDING OF APPRAISEMENT ON
VITAL WHEAT GLUTEN
The Treasury Department is instructing customs field offlcers
to withhold appraisement of vital wheat gluten from Canada) manufactured by The OgilVie Flour Mills Co.;. Limited, pending e. determination as to whether this merchandise is being sold in the United
states at iess 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
muSl:.
be
shown to justify a finding of dumpine -under -c.he law.
The complaint in this case was received on April 19, 1963.
dollar value of imports received during 1962 was approximately
$432,000.
The
- 3 -
and exchange tenders vill receive equal treatment.
Cash adjustments vill be made
for differences between the par value of maturing bills accepted in exchange and
the issue price of the new bills.
Tbe income derived from Treasury bills, whether interest or gain fram the
~e
or other disposition of the bills, does not have any exemption, as such, and 108s
trom the sale or other disposition of Treasury bills does not have any special
treatment, as such, under the Internal Revenue Code ot 1954.
The bills are subject
to estate, inheritance, gi:t't 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 ta.xa.tion 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 InternaJ. Revenue Code of 1954
the amount of discount at which bills issued hereunder are sold 1s 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 ac:tua.1lY
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 -
decimals, e. g., 99.925.
be
Fractions may not be used.
It is urged that tenders
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 ot
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
3(B4iC
less for the additional bills dated
ing until maturity date on
$
l~OO
:tJ'lB.Y 16, 1963
, (91
~
November 14, 1963
days remain-
3(B4iC
) and noncompetitive tenders
tor
:()Bij
or less for the
182 -day bills without stated price from anyone
UfJ
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
Banks on
Au;;ust ~9c3
Rese~
, in cash or other immediately available 1\mds or
in a like face amount of Treasury bills maturing
August 15, 1963
t&J
•
Cash
TREASURY DEPARTMENT
Washington
August 7, 1963
FOR IMMEDIATE RELEASE
mH£€ffiftffi!{i\mJl~
TREASURY I S WEEKLY BILL OFFERING
The Treasury Department, by this public notice, invites tenders for two series
of Treasury bills to the aggregate amount of $ 2,10.0,000, or thereabouts, tor
cash and in exchange for Treasury bills maturing
August _
, in the amount
1963
of $ 2,101~'000 , as follows:
91
00
-day bills (to maturity date) to be issued
in the amount of $ 1, 300 ~,ooo
August 15, 1963
----:;~"""l**~~--
,
, or thereabouts, represent-
ing an additional amount of bills dated May 16, 1963
and to mature
amount of
$
,
**
November 14, 1963 , originally issued in the
:wx
800,~OOO
, the additional and original bills
to be freely interchangeable.
182 -day bills, for
fill
$
800,O~OO
August 15, 1963
ftl'JJ
,or thereabouts, to be dated
,and to mature
Februa~
1964
•
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., Ea.stern/~ time,
Monday, August 12, 1963 _
3(1&ijIC
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
t~
TREASURY DEPARTMENT
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
$2,100,OOO,OOO,or thereabouts, for cash and in exchange for
Treasury bills maturing August 15, 1963, in the amount of
$ 2,101,543,000, as follows:
91 -day bills (to maturity date) to be issued August 15, 1963,
in the amount of $ 1,300,000,000, or thereabouts, representing an
additional amount of bills dated May 16, 1963,
and to
mature November 14, 1963,originally issued in the amount of
$ 800,667,000, the additional and original bills to be freely
interchangeable.
182 -day bills, for $ 800,000,000,
or thereabouts, to be dated
August 15, 1963,
and to mature February 13, 1964.
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 Savings
time, Monday, Augus t 12, 1963.
Tenders will not be
received at the Treasury De~artment, 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
:>r trust company.
)-931
- 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 Departmnent 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 16, 1963,
(91 days remaining until maturit¥ date on
November 14, 1963) and noncompetitive tenders for ~ 100,000
or less for the 182-day bills without stated price from anyone
bidder will be accepted in full at the average price (in three
decimals) of accepted competitive bids for the respective issues.
Settlement for accepted tenders in accordance with the bids must be
made or completed at the Federal Reserve Bank on August 15, 1963,
in cash or other immediately available funds or in a like face
amount of Treasury bills maturing August 15, 1963. 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 ~old by the United states is considered to be
interest. Under Sections 454 (b) and 1221 (5) of the Internal
Hevenue 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 bllls 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 frfl
any Federal Reserve Bank or Branch.
000
TREASURY DEPARTMENT
FOR RELEASE A.M. NEWSPAPERS
THURSDAY, AUGUST 8, 1963
L. M. SCHWARTZ NEW KANSAS
SAVINGS BONDS CHAIRMAN
Secretary of the Treasury Douglas Dillon today appointed L. M.
Schwartz volunteer State Chairman of the Kansas Savings Bonds
Committee. Mr. Schwartz is President of the Citizens State Bank
of Paola, Kansas. He succeeds J. Hardin Smith, who has served in
the post since April, 1961.
In announcing the appointment, the Secretary said, "We feel
that the Savings Bonds program is one of the most important activities in which we are engaged. It not only is an essential
feature of our debt management program, but also serves to encourage thrift. The addition of a leader of your stature will
help us tremendously."
Mr. Schwartz has served as Chairman of the Foundation of
Commercial Banks, and is now serving as its Vice Chairman. He is
a member of the Committee on Statewide Advertising and Public
Information of the Kansas Bankers Association, and is a member of
the American Bankers Association's Committee on Public Relations.
In connection with membership in these organizations, Mr. Schwartz
developed, under the Kansas Bankers Association's sponsorship, a
new method of cost analysis for banks and a method for analysis
of savings accounts profits. Both methods have since been adopted
by the American Bankers Association.
In addition to his banking activities, Mr. Schwartz is owner
of two Kansas newspapers and a guest lecturer at Kansas State
University. He served several years as Chairman of the Bank
Management Commission of the Kansas Bankers Association, which
conducts the annual Bank Management Clinic.
000
TREASURY DEPARTMENT
August 8, 1963
FOR IMMEDIATE RELEASE
TREASURY MARKET TRANSACTIONS IN JULY
During July 1963, market transactions in
direct and guaranteed securities of the governmAnt for Treasury investment and other accounts
resulted in net sales by the Treasury Department
of $59,009,500.00.
000
TREASURY DEPARTMENT
August 8, 1963
FOR IMMEDIATE RELEASE
TREASURY MARKET TRANSACTIONS IN JULY
During July 1963, 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 $59,009,500.00.
V-932
v~')
__
REMARKS OF THE HJNORABLE DOUGLAS DILLO~
SECRETARY OF THE TREASURY
AT THE WESTERFIELD RECEPTION
WASHINGTON HOTEL, NORTH ROOM
FRID~Y, AUGUST 9, 1963, 7:00 P.M., EDT
This oc:casion to honor DT. Samuel Westerfield evokes
in us all a mixture of both regret and pleasure -- regret
that the Treasury Department is losing his talents as an
international economist; yet pleasure at his moving up to
even higher responsibilities in the Department of State as
Deputy Assistant Secretary for Economic Affairs.
The m3n we are honoring this evening began as Associate
Director of our Office of D?bt Analysis. Dr. Westerfield's
background in international economics quickly led to his
advancement to the position of Senior Adviser for International
Affairs.
We take great pride in the fact that it was the Treasury
which brought Dr. Westerfield to Washington. And, it was
the Treasury which provided him with 2~ years of high-level
experience necessary to fulfill the responsibilities of his
new post.
Thus, we are happy to share in Dr. Westerfield's recognition. While it will be difficult to replace him, we shall
make every effort to do so. And, our policies of recruitment for high level positions among all groups in our society
will most certainly continue.
TREASURY DEPARTMENT
August 9, 1963
FOR IMMEDIATE RELEASE AFTER 6:00 P.M.,
FRIDAY, AUGUST 9, 1963
TREASURY OFFICIALS HONOR DR. WESTERFIELD
Treasury officials, including Secretary D~uglas Dillon,
today honored Dr. Samuel Z. Westerfield, Jr., at a reception
held at the Washington Hotel.
Dr. Westerfield is leaving the Treasury after 2~ years as
the Department's Senior Adviser for International Affairs, to
become Deputy Assistant Secretary of State for Economic Affairs.
Secretary Dillon spoke briefly to the group expressing the
Treasury Department's pride in he lping to further Dr. Wes terfieldls
career. The guest of honor, accompanied by his wife, Helene, was
presented with an engraved silver cigarette box by Assistant
Secretary John C. Bullitt.
Those attending the evening reception included Andrew
Hatcher, Deputy Press Secretary to the President; Lo~is Martin,
Vice Chairman, Demo~ratic National Committee; Lawrence P. Doss,
Assistant Director, Division of Automatic Data Processing;
Ro~ert A. Wallace, Treasury Department Employment Policy Officer;
and Dixon Donnelley, Assistant to the Secretary (Public Affairs),
Dr. and Mrs. Westerfield, and their two children, Samuel III,
age 16, and Sheila Helene, age 11, reside at 1743 Upshur Street,
N. W., Washington, D. C.
(A copy of Secretary Dillon's remarks is attached.)
TREASURY DEPARTMENT
August 9, 1963
FOR IMMEDIATE RELEASE AFTER 6:00 P.M.,
FRIDAY, AUGUST 9, 1963
TREASURY OFFICIALS HONOR DR. WESTERFIELD
Treasury officials, including Secretary D~uglas Dillon,
today honored Dr. Samuel Z. Westerfield, Jr., at a reception
held at the Washington Hotel.
Dr. Westerfield is leaving the Treasury after 2~ years as
the D2partment's Senior Adviser for International Affairs, to
become Deputy Assistant Secretary of State for Economic Affairs.
Secretary Dillon spoke briefly to the group expressing the
Treasury Department's pride in helping to further Dr. Westerfield's
career. The guest of honor, accompanied by his wife, Helene, was
presented with an engraved silver cigarette box by Assistant
Secretary John C. Bullitt.
Those attending the evening reception included Andrew
Hatcher, Deputy Press Secretary to the President; Louis Martin,
Vice Chairman, Democratic National Committee; Lawrence P. Doss,
Assistant Director, Division of Automatic Data Processing;
Robert A. Wallace, Treasury Department Employment Policy Officer;
and Dixon Donnelley, Assistant to the Secretary (Public Affairs).
Dr. and Mrs. Westerfield, and their two children, Samuel III,
age 16, and Sheila Helene, age 11, reside at 1743 Upshur Street,
N. W., Washington, D. C.
(A copy of Secretary Dillon's remarks is attached.)
REMARKS OF THE HONORABLE DOUGLAS DILLO~
SECRETARY OF THE TREASURY
AT THE WESTERFIELD RECEPTION
WASHINGTON HOTEL, NORTH ROOM
FRID~Y, AUGUST 9, 1963, 7:00 P.M., EDT
This occasion to honor Dr. Samuel Wes terfield evokes
in us all a mixture uf both regret and pleasure -- regret
that the Treasury Department is losing his talents as an
international economist; yet pleasure at his moving up to
even higher responsibilities in the Department of State as
Deputy Assistant Secretary for Economic Affairs.
The m3n we are honoring this evening began as Associate
Director of our Office of D2bt Analysis. Dr. Westerfield's
background in international economics quickly led to his
advancement to the position of Senior Adviser for International
Affairs.
We take great pride in the fact that it was the Treasury
which brought Dr. Westerfield to Washington. And, it was
the Treasury which provided him with 2~ years of high-level
experience necessary to fulfill the responsibilities of his
new post.
Thus, we are happy to share in Dr. Westerfield's recognition. While it will be difficult to replace him, we shall
make every effort to do so. And, our policies of recruitment for high level positions among all groups in our society
will most certainly continue.
TREASURY DEPARTMENT
Washington
FO~
RELEASE ON DELIVERY
REMARKS OF THE HONORABLE HENRY H. FOWLER,
UNDER SECRETARY OF THE TREASURY,
BEFORE THE AMERICAN BAR ASSOCIATION
(SECTION OF TAXATION)
CONRAD HILTON HOTEL, CHICAGO, ILLINOIS,
SATURDAY, AUGUST 10, 1963, 12:30 PM, eDT
CHANGING DIRECTIONS IN NATIONAL TAX POLICY
I would like to begin by congratulating the Section on
Taxation for its initiative which led to the establishment in
February 1962 by the American Bar Association of a Special Committee
on Substantive Tax Reform. Both personally and officially I share
your satisfaction in th2 adoption this past May by the Board of
Governors of a resolution approving "the continuance of inquiry and
research ... leading to the objectives of establishing a fair and
equitable tax system, broadening the tax base, and providing
incentives for work and investment."
It is to this common purpose of your Section, the Treasury
Department and the present Administration -- improving our national
tax policy -- that I will address myself today.
There can be no more important subject before this country
today.
In a society where an increasingly large percentage (now above
27 percent) of annual income is utilized by Federal, state and
local governments through taxation -- it is essential that our
national tax policy be adapted to promote a dynamic private sector.
Otherwise, the nation cannot have its full measure of rapid
growth, full employment and a rising standard of living -- while
remaining sufficiently competitive with other industrial economies
to meet shared responsibilities and commitments for the security
and development of the Free World.
In addition, tax policy must lessen some distinctions between
sources and uses of inco~e, and widen others, to meet the changing
demands in a democratic nation for fairness and equity in
taxation. M()reover, tax policy must be reflected in a system simple
enough to be effectively administered with the main burden of
compliance resting upon voluntary self-assessment.
D-913
- 2 -
These are challenging and difficult tasks of public policy
formulation to which the members of this Section can make a major
and welcome contribution.
1.
The Problem of Change in Tax Policy
Few things are more subject to constant change in our democratic
society than national tax policy, or more difficult to change in
any comprehensive and substantial fashion. There is certainly
ample evidence of that over the past three decades -- and over the
past several years.
By its very nature, the formulation of effective tax policy is
not an exact science, but an extremely practical and contingent art
of approximation. Anyone framing tax policy must take account
of future as well as present needs, of past experience as well as
prospective impact, of political possibilities as well as economic
and fiscal ideals.
Every move in the tax area affects some sector of our diverse
and complex economy, and arouses, not only considerable public
interest, but considerable special interest as well. As it was put
so '/Jell in your own Annual Report of July 1963, "There are so many
conflicting claims of the community that almost any statement about
unraveling the tangled tax skein causes a general commotion and
restiveness. Each taxpayer retreats to the security of a known
position; for old battlements offer more comfort than new skirmishes."
These attitudes are bound to be reflected in the position of
the elected representatives in City Hall, in the State House and
in Congress.
Nearly every taxpayer or taxpayer group ha:3 his own especi al
formula for changing our tax system -- a formula that can uSllally
be written on the back of an envelope or the top of a tablecloth.
But no single private group seems to have sufficient strength to
change our national tax system to suit its particular plan. And,
until recently, many groups seemed to be powerful enough to veto
proposals that did not meet their particular requirements.
As a wise commentator remarked in the famolls Pane 1 DiE;CllSS i UI1S
of 1959 before the House Ways and Means Committee: "The existing
tax system persists, not because we are agreed in support of it,
but because we are unable to agree on how to change it."
Against this background it is easy to sense the difficully
of framing new and meaningful tax policy which will have SOlI!'..: chance
of surviving the legislative process and, then, securing its
acceptance as public policy.
- 3 -
The last three years have witnessed what may be the beginning
of a break-through in this log jam on national tax policy.
A
limited but meaningful national consensus has developed on an
approxim.ate area of change in national tax policy. This very summer
and fall there is a great national opportunity to take a significant
forward step in forging a better national tax policy. When that
step is taken, much will remain to be done; but taking that step
will open the door of opportunity for additional forward progress
and fix its direction.
Because of these developments and because of the recent
dedication of this body to substantive tax reform, I should like to
discuss the current tax policy proposals pending for enactment before
the Congress -- their background, their significance, and their
meaning for changing directions in national tax policy.
2.
Background (1955-60)
A new administration in January of 1961 viewed the question of
tax policy against a background of unconcern by the general public,
and intense but dispersed interest among the experts. Two landmark
studies of expert attention should be noted.
In 1955, a Subcommittee on Tax Policy of th2 Joint Economic
Committee, chaired by Congressman Wilbur Mills, conducted an
examination of "Federal Tax Policy for Economic Growth and Stability."
That investigation set the stage for the second major study
which was the 1959 examination of Tax Revision by the Com~ittee on
Ways and Means, also made under the direction of the distinguished and
able Mr. Mills.
After collecting papers from some 180 leading experts,
including many m!=mbers of this Section (papers which were published
in the Tax Compendium of the House Ways and Means Committee of
~ovemh2r 1959), there were Panel Discussions and Hearings beginning
Ln December 1959 on "Ideas and Suggestions Submitted to the Com"11ittee
)n Ways and Means on the Broad Subject of Revision of the Federal
:ncome Tax Structure."
Notwithstanding the valuable stockpile of proposals on
lational tax policy created by these two studies and countless other
cholars, practitioners and private organizations, the year 1960,
ike the pr2vious three years, saw little broad public attention
r governmental action in the field of national tax policy responsive
o the proposals of the experts.
But the three years after 1960 have witnessed national tax
olicy become one of the liveliest topics of public interest and
Jlicy determination.
- 4 -
An important contributory, if not decisive, element in the
emergence of national tax policy into the front lines of public
attention, so that it is no longer the peculiar interest of scholars
and technicians, is the determination of the present Administration
to give a high priority to national tax policy. This priority to
and the major emphasis on the overall national economic aspects of
tax policy was determined by the reaction of the President, the
Treasury and the entire Administration to disturbing developments
in our national economy since 1956.
Despite the innate strength of the United States, the last
half of the Fifties was marked by some deterioration in confidence
in the vigor, growth potential and competitiveness of the American
economy on which so much depends.
Recoveries from recessions failed to reach a satisfactory rate
of utilization of resources, much less sustain the desired pace over
appreciable periods. Even more disturbing than a tendency to
recurrent recession was the fact that expansion of the U. S. economy
was marred by higher peaks of unemployment, lagging growth rates,
budget deficits, and continued unfavorable imbalances in our
international payments.
What are some of the significant elements in this cloudy
background?
After sixty months of unemploym~mt in excess of five
percent, unemployment is still running over five and one-half
percent.
Our national growth rate of 2.7 percent from early 1955 to
the present compares unfavorably with regular rates in Western
European countries of four, five and six percent -- or even our own
four percent trend in much of the period prior to 1955.
-- Our balance of payments deficits for the last two years
lave been in excess of $2 billion a year -- a considerable improvenent over the $3-1/2 to $4 billion annual deficits that characterized
:he years 1958-60, but still a serious problem, and one we are
loving firmly to solve.
-- There have been deficits in the Federal administrative
'udget in five of the last six years, totaling $31.7 billion. Much
f the total was due to a $12.4 billion deficit in 1959, resulting
rom an unanticipated recession.
'
-- In 1956 and 1957 business fixed investment averaged nearly
leven percellt of total output. Since that time it has fallen to
~ughly nine percent.
The rate of increase in our stock of business
lant and equipment has substantially diminished since 1957, rising
- 5 -
hy less than two percent a year since then, compared to four percent a
y~ar in the 1954-57 period.
There has been a disturbing rise in the
proportion of our machinery and equipment which is more than ten years
old. A recent survey of the age of machine tools in the U. S., by the
American Machinist Magazine, shows sixty-four percent to be at least
ten years old -- a picture that has worsened since the last survey in
1958. Similar estimates show much lower percentages of equipment over
ten years old in such major competitor countries as France, Italy,
Germany, the United Kingdom and the U.S.S.R.
Between 1954 and 1960 there was a sharp decline in the rate
of increase of productivity per worker and per hour from that of the
earlier postwar period.
-- With the exception of the depression, no period of comparable
length in this century has witnessed such a disturbing underutilization
of productive resources in the United States. And, surely, at no
time since the U. S. became a major industrial power has it so
risked its leadership because of obsolescent productive plant and
equipment.
3.
Breaking the Log Jam (1961-62)
These are some of the facts which gave priority to national
tax policy, beginning in 1961, and to specific tax proposals which
Nould go to the heart of the problem of growth, productivity and
~ompetitiveness -- and do so in a manner consonant with our free
narket economy.
President Kennedy in his first Tax Message to the Congress in
~pril 1961 assigned the major role in meeting the changing needs and
'equirements of our economic and international position to tax
olicy.
He coupled this objective with that of "a more equitable
ax structure, and a simpler tax law." While a more comprehensive
pproach was being fashioned he called, as a "first though urgent
tep", for a tax policy which would promote economic growth and
roductivity by encouraging the modernization and expansion of
achinery and equipment.
The Revenue Act of 1962, therefore, contained, as its central
:ovision, the investment tax credit which reduced current taxes
Jr a business by seven percent of annual expenditures for new
lchinery and equipment. To offset the tax reduction it was proposed
) provide compensating revenue gains through the elimination of
rcain defects and inequities or special preferences long cond(;lllned
exponents of substantive tax reform.
This first Message indicated the direction of the second and
ter more comprehensive step by observing that higher tnx rates
~ made necessary by a narrowing of the tax base which dOL's not
=t the test of promoting some desirable social or economic
- 6 objective of overriding importance. It was announced that "it will
be a major aim of our tax reform program to reverse this process
by broadening the tax base and reconsidering the rate structure."
After nearly 18 months of strenuous legislative activity,
marked by nearly continuous predictions of the death of the proposals,
a law, including the investment credit and a variety of structural
reforms, was enacted. The tax credit involved a revenue loss of
$1 billion but the other structural provisions increased revenues
by an estimated $800 million or more. These provisions:
,', Extended conSiderably reporting requirements
on dividends and interest income;
*
Provided a basis for curtailing many abuses
in the expense account area;
* Eliminated the tax avoidance device of
converting ordinary income into capital gain through
the sale of depreciable personal property;
*
Substantially reduced the tax advantages of
mutual thrift associations over competing financial
institutions resulting from tax-free accumulation
of earnings as bad debt reserves;
* Provided for current taxation of the earnings
of cooperatives;
*
Allowed salvage value up to 10 percent of the
cost of the original asset to be disregarded in
determining allowable depreciation deductions -reducing the likelihood of disputes in this area
between taxpayers and tax administrators;
*
Provided for the taxation of mutual fire and
casualty insurance companies on underwriting, as well
as investment income.
The principal aim of the 1962 Revenue Act, however, was tu
expand private investment in the United States. The direct approdl.:h
of a credit for domestic investment was supplemented by the removal
of unwarranted tax inducements to investment in other industri at i zc'<.J
nations. Provisions to accomplish this included measures to:
*
Make United States shareholders currently
taxable on tax haven earnings of foreign corporations
controlled by them;
- 7 -
Tax dividends distributed by foreign subsidiaries
of United States corporations in industrialized
countries at the full domestic corporation income tax
rates -- less, of course, a credit for foreign taxes;
'k
*
Tax profits from sales of United States patents
to foreign subsidiaries at ordinary rather than
capital gains rates;
* Remove tax advantages previously granted to
investment companies created abroad;
* Restrict the exemption from United States tax
of earned income of American citizens establishing
residence abroad.
The other part of a two-pronged program of tax policy to
encourage investment in machinery and equipment was the administrative
liberalization by the Treasury last year of the tax treatment of
depreciation. The new so-called Guidelines provided the first
comprehensive revision of the rules for determining service lives
of machinery and equipment since "Bulletin F" in 1942.
The change in the administrative rules concerning depreciation
does more than reduce the lives of machinery and equipment for
depreciation purposes to conform to up-to-date practice; it speeds
the translation of product developments from the laboratory to the
production and distribution line in an ever faster cycle; it
encourages maximum competitive efficiency. It incorporates a new
test that permits the businessman to fix his preferred life for
machinery and equipment, provided only that his actual replacement
pattern conforms to his estimate in a reasonable period of time.
The already evident effectiveness of these tax changes in
increased capital investment clearly demonstrates how
reducing business taxes can result in increased modernization and
3tepped-up economic growth.
~ncouraging
With the investment credit and the new depreciation guidelin~s,
lational tax policy has taken an important step in the taxation
)f new investment in machinery and equipment. These provisions
~lp to overcome obsolescence and provide inviting outlets for new
echnology, invention and new processes.
Their continued utilization and adaptation will insure that
he tax system will not become either a passive deterrent or an
nactive stimulant to investment in capital equipment -- a main
ource of growth and competitive effiCiency.
- 8 -
I trust and believe that this policy will continue to be
attuned sharply to a dynamic and competitive economy in which
change is continuous.
4.
The Emergence of a National Consensus
on Tax Policy (1963)
While the Revenue Act of 1962 and the administrative liberalization of depreciation were being completed, the stage for a more
comprehensive second step in national tax policy was altered by new
developments.
At the outset of 1962, after nine months of rapid recovery,
the expansion of the U. S. economy slackened. Between the fourth
quarters of 1961 and 1962 the Gross National Product rose barely
enough to permit the nation to hold its own on rates of unemployment,
profits, and capital investment. The overriding lesson of this 1962
slow down was that the pattern of slow growth since 1957, rather
than the temporary spurt in 1961, was the true measure of the
nation's long term economic problem.
There~s a break in the stock market and considerable pressure
for an emergency temporary tax cut. But, it was determined in the
late summer of 1962 that the right approach for a second step was
a permanent reduction in our income tax rate structure, accompanied
by a substantial net tax reduction and some structural reforms
responsive to considerations of equity. The President announced
his position that "our tax rates, in short, are so high as to weaken
the very essence of the progress of a free society -- the incentive
for additional return for additional effort." It was also
recognized that the level of present taxes constituted a drag on
recovery and growth.
Early this year, the President, in his State of the Union
Message, made a new tax program his number one legislative objective
for 1963.
In summary, the basic thrust of the proposed new tax prog~am
is a substantial reduction in rates on individual and corporate
income and capital gains at all levels -- reversing a trend of mon.~
than thirty years in which rates have moved upward in war and in
peace -- easing the pressure of repressive tax rates imposed partly
to constrain wartime and early postwar inflationary pressures,
but which now act to slow our growth.
The major reform in the tax program, as submitted by the
?resident, is the reduction in tax rates. The annual cost of the
)roposed rate reduction would be $13.6 billion -- when the program
rould be fully effective in 1965 -- to be met by a $10.3 billion
- 9 -
net reduction spaced over a two-year period and structural changes
which would provide a net increase in revenues of $3.3 billion.
Over thirty structural changes were proposed. Most of these
were intended to broaden the base of taxation by eliminating or
lessening certain special privileges. They would -- in effect -have paid for $3.3 billion of rate reduction and other structural
reforms involving a revenue cost of $740 million, which were
intended to relieve hardships which would not be removed by rate
reduction alone.
Since the House Ways' and Means Committee will shortly report
out a bill which will accept in whole or in part a number of these
structural proposals, while rejecting others, until that time
I prefer to limit my comments to the consequences of substantial
rate reductions -- the major reform toward which the program is
directed.
The corporate reductions proposed would actually be somewhat
greater in magnitude than the combined effect of the investment
credit and depreciation reform. This would greatly spur productive
investment. In fact, it would -- together with the two earlier
measures -- increase the profitability of new investment by almost
thirty percent.
But there is no point in spurring investment, or increasing
corporate cash flow, if there is no corresponding consumer demand
to assure that such investment will payoff in higher sales and
greater profits. Therefore, the individual tax and rate reductions
significantly larger than the total of all business tax reductions
both in this year's proposed measures and in those already taken
in 1962 -- are of even greater economic significance.
Clearly these measures of reduction -- together with
Lmprovements in the capital gains area -- will be of primary
Lmportance in moving our economy onto the new and higher plane of
lctivity we must achieve if we are to better our performance over
:hat of the past five or six years.
And better that performance we can and must -- by the
nactment this year of a tax program along the general lines
roposed by the President.
This is not merely the opinion of those in the Administration.
t is the opinion of many in private life who, by reason of unusual
aow1edge and experience, are in a position to have an informed
Jdgment concerning the workings of the economy.
- 10 -
Seldom in the nation's history have its economic brains
and leadership from diverse private sectors developed such a '
solid consensus on a key economic issue as that which has
emerged on the national need for the scaling down of the Federal
income tax rate structure this year.
More than 200 witnesses testified before the Ways and
Means Committee on the fresident's tax proposals. They represented many leading business and trade organizations, labor
unions, and others familiar with our economic system. While their
views have differed widely on specifics, only two of these
witnesses have disagreed with the central thesis of the President's
program -- the need for a substantial reduction in taxes and
income tax rates to encourage economic growth and the expansion
of job opportunities.
The Business Committee for Tax Reduction in 1963, organized
in April this year, has brought together over 2,000 of the nation's
leading businessmen and bankers in support of their belief that
the Congress should enact during the present session net
reductions of corporate and individual taxes totaling about
$10 billion.
Furthermore, the National Small Business Advisory Council,
a nonpartisan group from all parts of the country, which was
appointed in accordance with the Small Business Act as "truly
representative of small business," in May adopted a resolution
supporting a program of tax revision with objectives along the
general lines of that proposed by President Kennedy.
In addition, the AFL-CIO
long in the vanguard for
public m2asures to expand employment opportunities -- has urged
Congress to adopt an immediate tax reduction of $10 billion to
provide the economy with the maximum thrust of a high velocity
buying power.
Another example of this national consensus is the recent
announcement of the coming together of 45 nationally
recognized leaders of labor, small business, education,
agriculture, housing and welfare groups in a Citizens
- 11 -
Committee for Tax Reduction and Revision in 1963. This leadership
group reached common agreement on the need for action at this session
of Congress to "achieve a meaningful revision in income tax laws,
including a substantial net reduction of individual and corporate
taxes, totaling about $10 billion."
Finally, over 400 leading professional economists in more than
40 colleges and universities throughout the country recently endorsed
the general features of the Ad~inistration's tax program.
In the remaining weeks of the summer and fall the Congress will
determine whether or not this national consensus will become law,
thereby changing the direction of national tax policy.
5.
Why Ac tion Now?
Those who have not yet joined in the emerging national consensus
just described generally point to one of several reasons. Some
claim that the current business upturn has made the tax program
unnecessary. SO:1le point to the prospective budget deficit for the
fiscal year 1964 and urge that tax reduction be postponed until the
budget is balanced. Some fear that adoption of the tax program
Nould worsen our international balance of payments problem. Those
iuestions are honestly raised and they deserve forthright answers.
First, de~pite the current business upturn, there are now -It this very moment -- more than four million Americans willing to
Jork who cannot find jobs. The current upswing has failed to meet
:he unemployment problem, and there is no indication it will - - by
.tself -- develop enough steam to do so.
No bogeyman of recession is needed to paint the appalling
·icture which will develop if we are unable to significantly improve
ur economic performance. W. P. Gullander, President of the NatioDul
ssociation of Manufacturers, has estimated that if our economy dops
at produce jobs faster than l.t has in recent years, by 1970 our
nemployment will have more than doubled to a staggering 12. 7 p~'r
ent. It is not hard to imagine how this could come about. In
l1e year which ended June 30, 1963, for instance, our labor forct.'
rew by more than a million, but only five out of every six persons
~re able to find jobs.
The annual addition to the labor force
:; expected to be 40 percent higher than that -- 1.4 million perSllllS
year -- after 1963, as the wave of youth born in the early post-wilr
!ars reaches maturity. Added to the job toll of automation, C111T':"lIl
temployment and underemployment, the threat to those who hold j llhs
well as those who seek them is clear.
- 12 -
Put in human terms that is the chief underlying reason why
President Kennedy's tax program is today an urgent national need.
We cannot stand idle and allow our young people to be relegated,
in growing numbers, to the ranks of our unemployed. Jobs must be
created by a dynamic private enterprise system. We cannot allow our
economy to continue to move along at a pace 30 or 40 billion dollars
below potential without taking action, facing a period when that
gap could continually widen. The tax program recommended by the
President -- and now undergoing final modifications by the Ways and
Means Comruittee -- will enlarge the opportunity for our free enterprise system to cope with the problem of economic slack and resulting
unemployment.
The size of the job becomes clearer when it is considered that
to close the output and employment gap by the end of 1964 would
take an average rise of $14 billion a quarter, starting im~ediately.
At the present pace -- even allowing for current improvement -- the
economy has been advancing by only. slightly more than $8 billion
a quarter so far this year. Even at this improved rate, if potential
U. S. output continues to grow at 3.5 percent a year, it would take
roughly ten years to reach four percent unemployment. We cannot
wait that long.
The tax program is not only essential to creating more jobs
and improving our economic performance -- it is equally essential
if we are to move out of a period of substantial federal deficits
toward the time when we can reasonably expect to balance the budget.
Even at lower tax rates, a more rapidly expanding economy
will very quickly produce the greater government revenues that can
provide for our growing national needs without risking large deficits.
In fact, one of the most important aims of the tax program is to
achieve what your Tax Bulletin has described as a "primary national
objective" of bringing "expenditures and tax receipts ultimately . .
into balance."
I wish to repeat the commitment that President Kennedy made
in his Budget Message -- a commitment entirely overlooked by too
:nany. President Kennedy pledged that as the economy climbs to fllll
employment, in response to the tax program, "a substantial part of
the revenue increases mus t go toward eliminating the trans i ti ona1
deficit."
Unless we adopt a substantial tax reduction bill this yenr,
our goal of a balanced budget will likely remain for SOtTle timc' ltl
Corne well beyond the reach of an economy operating at far ]C!SS llldl\
potential. The paradox is that, while our present tax cates iU'"
- 13 so high that they would produce a substantial budget surplus at
reasonably full employment, those same high tax rates ac t to preVt'll t
our reaching full employment. Thus, we have little hope of ever
achieving that surplus unless we first reduce our tax rates.
It is, of course, impossible to predict with certainty exactly
when expenditures will be brought into line with receipts -- or
when receipts will exceed expenditures. But we can be sure: First,
that Federal tax revenues will exceed those expected without a tax
cut within a very few years. That was what happened after the last
major tax reduction in 1954 -- revenues exceeded the pre-tax-cut
level within two years. Second, that President Kennedy will continue to spare no effort to keep expenditures to the minimum amount
necessary for national security and well-being. Third, that part
of the answer to o~r chronic budget deficits is a far more rapidly
expanding economy.
The Federal budget 19, of course, not the only budget that will
benefit from the tax program. It has been estimated that both state
and local revenues will rise on an average of something like seven
percent -- almost $3 billion -- as a result of increased economic
activity once the tax program is fully in effect.
The overall reduction in individual and corporate income tax
rates is essential to advance the nation's principal international
economic goal:
to bring our balance of payments into equilibrium
without weakening our programs for the defense and development of tlll'
Free World.
If we are to reduce and eliminate the deficit in our balanc('
)f payments -- and the resulting risk of drain on our gold stocks
ve must expand our trade surplus while attracting a greater volulll<_'
)f investment to our shores. Outselling foreign goods requires
Lncreased productivity at home. Since the tax program will foslt,t~reater investment and increase productivity, it will also irnproV('
:he competitive position of United States products vis-a-vis Lho~),-'
)f foreign producers.
Similarly, as the tax program takes hold and establishes ;!
ising pattern of economic activity and accelerated growth, the
nited States will become a magnet for foreign investment funds as
ell as long-term U. S. private investment which now gOE':; ahr():vl.
Prompt reduction in Federal income taxes and tax rilles) Cill'll,
vital to achieving some of the most pressing of our niltioGul
onomic goals -- full employment with a more ra~id gro\Jth, emu
lance~l in our internal budget and our internat~onal paYlllcnls.
~
6.
14 -
The Future of National Tax Policy
Against the background of the last decade, sharpened by the
initiative of the last twelve months, the cause of substantive tax
reform stands at a strategic crossroads. National interest in tax
policy has been awakened by events and the expressions of leader$hip
in many walks of life, public and private, to a pitch surpassing
any since the enactment of the Sixteenth Amendment. Measures
moving substantially toward substantive tax reform have been the
number one item on the legislative agenda for the year.
Failure to enact major tax legislation this year would inevitably return the initiative to those who believe firmly in the
status quo -- insofar as our current tax system is concerned -- and
ignore the urgent need and desire for a clear-cut change in direction
in national tax policy that exists throughout our nation for
reasons that transcend individual benefit.
Ther~fore, it seems clear to me that the cause of substantive
tax reform to which this Section has recently dedicated itself
Ls bound up in the enactment at this session of Congress of the law
that takes another substantial step along this road.
A meaningful reduction in income tax rates -- individual,
:orporate and capital gains -- is the single most important reform
)f the President's tax program. The enactment of a law incorporating
:his approach would signify these changed directions in national tax
lolicy:
First, the current high tax rates will be recognized as too
epressive for maintenance as a part of our permanent tax structure,
ecause of a conviction that they hold back growth and lead to disortions in the tax structure.
Second, the policy of allowing high tax rates on income, increased
roperly to meet needs of war and emergency, to become fixed will be
2t aside.
IX
Third, national tax policy would incorporate the reduction in
rates as the primary objective of income tax reform.
Fourth, national tax policy would be tilted in favor of arresting
Le gradual erosion of the tax base through special preferences and
tvileges for certain groups of taxpayers. The design of the future
11 be the provision of necessary revenues at the lowest possible
x rates in place of the old pattern of opening new "loopholes" in
e existing structure with the inevitable result of increasing
Nard pressure on existing rates.
- 15 Fifth, the nation will reincorporate in its tax system a reassuring allegiance to the principle of rewards -- the leaving of
increased percentages of income to remain after taxes with those
who invest additional effort and capital in economic activity as
a means of spurring growth. In short, the profit motive, personal
and corporate, will be recognized and i~vigorated.
It is extremely difficult to look ahead in any definitive way
to the specific future of substantive tax reform until there has
been a final legislative disposition of the issues raised by the
President's 1963 program.
There may come in the years ahead the need for further rate
reduction, particularly if the present proposals prove to be effective
in accomplishing their economic objectives or increasing income levels
in time serve to make the new rates a heavier or unnecessary burden.
Certainly your suggestion for thorough study and possible wholesale reduction of the whole area of exemptions and deductions is a
challenging one, although we in the Treasury Department have hardly
painted over our bruises from our last major effort -- the original
proposal to put a five percent floor under personal deductions.
Certainly I would not claim that we have made much progress
toward our goal of tax simplification. The compelling urgency of
tax reduction for economic reasons, and the natural priority of tax
equity, have forced considerations of simplification aside for the
moment. This is an area where much progress can be made, as your
resolutions suggest, and where renewed emphasis is indicated.
As I said earlier, the 1955 Study on Federal Tax Policy for
Economic Growth and Stability and the 1959 Ways and Means Committee
Compendium on Income Tax Revision explored a considerable range of
issues and problems under o~r tax laws. But until 1961 these
matters remained in the limited domain of a few knowledgeable tax
experts and scholars. Starting in 1961, however, the present
Administration's tax programs have served to throw open to public
consideration and discussion a very large number of these subjects.
There has hardly been a period in our tax his tory when so many is SLIt'S
of tax policy have been placed before the Congress for considerati()ll
by it and the public. You may be interested in Attachments A and
B which respectively list the topics considered by the 1955 and 1~59
studies and then indicate those topics which, in whole or in part,
have been involved in this Administration's tax programs.
These matters of tax policy, raised and explored as a r(,~)1l1l
of the President's proposals, have b2en placed in the public dUlIlaill
where they can be fully analyzed and debated so that others besi<il':i
tax experts can see the issues whose resolution is a part of I1dtiul1dl
tax policy.
- 16 I would be the last to suggest that the tax programs recently
considered will solve all our tax problems in the years ahead, but
I would also be the last to concede that national tax policy can
meet the challenge of the Sixties without a program along the main
lines President Kennedy has proposed.
I hope that you will agree and that you will feel that favorable
action on this program this year will serve the cause of substantive
tax reform and promote the national interest.
Schedule A
FEDERAL TAX POLICY FOR ECONOMIC GROWTH
AND STABILITY
Joint Committee on the Economic Report
November 9, 1955
Summary of Contents
I.
II.
III.
IV.
V.
Focus of Tax Policy: Short-Run
Stabilization and Long-Run Growth
VII.
VIII.
1963
Tax
Program
x
x
Impact of Federal Taxation on the
Distribution of Real Income and
Levels of Consumption •••••••••••
Impact of Federal Taxation on the
Amount and Character of Private
Investment ••••••••••••••••••••••
x
x
Impact of Federal Taxation on
Management and Entrepreneurial
Efforts and on Type of Remuneration; Effects on Labor Supply and
Professional Skills •••••••••••••
x
x
Relative Emphasis in Tax Policy on
Encouragement of Consumption or
Investment ••••••••••••••
•••••••
x
x
Economic Impact of Expansion and
Contraction of the Tax Base •••••
x
x
8
VI.
Revenue Act
of 1962 and
Depreciation
Reform
Relationship of Exemptions and
Deductions in the Individual Income
Tax to Economic Stability and Growth
x
Economics of Capital Gains Taxation
x
- 2 Revenue Act
of 1962 and
Depreciation
Reform
IX.
X.
Impact of Federal Taxation on
Natural Resources Development
Effectiveness of Tax Depreciation Policy in Counteracting
Economic Fluctuations and
Promoting Economic Growth e • • •
XI.
Role of Commodity Taxation in
Tax Policy for Steady Growth
XII.
Corporate Income Taxation ••••
XIII.
Taxation of Small Business •••
XIV.
Relationship of the Taxation of
Income Derived Abroad to Foreign
Economic Policy ••••••••••••••
xv.
Economic Significance of Deferred
Compensation and Pension Plans
XVI.
Federal, State, and Local Government Fiscal Relations and Their
Significance for Economic
Stability and Growth . . ..... .
XVII.
Impact of Federal Estate and Gift
Taxation
1963
Tax
Program
X
X
X
X
X
X
Schedule B
INCOME TAX REVISION
COMMITTEE ON WAYS AND MEANS
1959
Summary Subject Index
Revenue Act
of 1962 and
Depreciation
Reform
1963
Tax
Program
x
x
Major Objectives of and Guides for
Tax Reform:
The Income Tax Appraised Under
These Objectives ••••••••••••••
~.e
The Relative Role of Income Taxes
in the Tax System
Statistical Analysis of the Tax Base
and the National Income ••••••••
x
& ••••• e
Specific Elements in the Computation of
Taxable Income
Individual Income Tax Exclusions • • •
x
Individual Income Tax Deductions
&
x
0
x
Taxation of Fluctuating Incomes ••••
x
•
•
Taxation of Family Income
Taxation of the Aged ••••••••••••••
The Exemption of Interest on State
and Local Bonds
Business Deductions:
x
Percentage depletion and exploration and development costs ~ •• e
x
-
2 -
Revenue Act
of 1962 and
Depreciation
Reform
1963
Tax
Program
x
General business expenses
Research and development
expenditures $OO~.GO~ooO.OOGOOO
x
Accoun"ting Provisions
Treatment of Capital Gains
000
~
s •
~
0
x
c
Pensions and Other Employee
Benefit Plans "
Compliance and Enforcement:
Amount of unreported income
x
Procedure to improve income
reporting
O~oooooo
x
COOOO$O • • • • • •
The Taxable Entity:
Treatment of Dividends
o •
0
0
Q
~
~
coo
x
80.
Corporate Distributions and Adjustments
Treatment of Investment Companies
Partnerships and Corporations Taxed
Like Partnerships
Income of Estates and Trusts
Special Problems in Corporate Taxation:
Mutual Financial Companies .. "0" ........ "
x
x
- 3 -
Revenue Act
of 1962 and
Depreciation
Reform
••••••••••
x
Taxation of Income from Foreign
Investment •••••••••••••••••• ~ ••••
x
Insurance Companies •••••
0
1963
Tax
Program
Tax-Exempt Organizations
The Structure of Tax Rates:
Individual Rates •••••••••••••••••••
x
Corporate Rates •• ~ •••••••••••••••••
x
Flexibility of the Revenue Yield
ENT
WASHINGTON, D.C.
August 12, 1963
"
b~
tNEEKLY BIll OFFERING
~evening
that the tenders for two series of
issue of the bUls dated May 16, 1963, and
:1, which were offered on August 7, were opened
:Tenders were invited for $1,)00,000,000, ur
10,000, or thereabouts, of 182-day bills. The
~.a1
I
lills
42 1963
• Equiv.
Rate
11%
39%
35%
I
:
·•
11
182-day Treasury bills
maturing February 13, 196h
Approx. Equiv •
Price
Annual Rate
3.428%
98.267
98.254
3.454%
98.261
3.J.ilil% !/
iI
Ls bid for at the low price was accepted
.1s bid for at the low price was accepted
IERAL RESERVE DISTRICTS:
d
692,000
261,000
001,000
503,000
161,000
519,000
~80,ooo
:
I
I
·:•
I
·•
1_19,000
llO,OOO
.01,000
:05,000
63 z000
15,000
t
·•
t
bl
ApElied For
$
9,027,000
1,110,182,000
10,382,000
11,575,000
2,490,000
9,824,000
122,693,000
1l,584,000
6,571,000
9,335,000
10,254,000
58,690,000
$1,372,607,000
Acceptt: d - - $ 3,02,{,OOO
645,382,000
5,382,000
11, 51S, ouO
2,41\0,000
r
9,52",000
58,6JJ,OuO
9,5Uh,oOO
5,571 ,000
9,335,ouo
6,63lt,ooo
-
3~u70
,UUO
._--
$800,1:;7,000
EI
s accepted at the average price of <)'J .157
accepted at the average pri ce of ~U. 2()1
r the same amount invested, the rt.:tlll'n on
for the 91-day bills, and 3.5)~~, fur thf!
~ quoted in terms of bank dtSCOllIli 'Ioli th
Ie bills payable at maturity ratbf:r tlnu
.ual numoer of days relatE:.:a to a 3GU-d c,y
note::;) and bondc; are COHlvutf;;d in
1,"11I1:j
ate the number of days r(;IIl3.inill!: in an
r of days in the perj.od, \-Jith sCII.i;IIlIllIiil
i5 involved.
STATEMENT OF THE HONORABLE DOUGLAS DILLON
SECRETARY OF THE TREASURY
BEFORE THE HOUSE WAYS AND MEANS COMMITTEE
10 A.M. (EDT), MONDAY, AUGUST 12, 1963
At the outset of your discussion of rate reductions, I
would like to outline briefly the new rate schedule
recommended by the Administration, to consider the Lmpact
of that rate schedule, and to review some of our reasons
for recommending it.
I.
Summary of Proposal
Individual Rate Reduction
In the light of structural changes agreed to by the
Committee, the Administration recommends a schedule in which
individual tax rates -- after the tax reduction is fully
'effective -" would range from 14 percent on the first $500
of taxable income to 70 percent on income above $100,000.
Under this schedule the first $2,000 of taxable income is
split into four brackets of $500 each, following the
suggestions of Mr. Herlong and Mr. Ullman.
These first four
bracket rates would be 14, 15, 16 and 17 percent.
The first
$500 bracket rate represents a reduction of 30 percent from
the present rate, the second 25 percent, the third 20
and the fourth 15 percent.
percen~
The average rate reduction on
- 2 -
this first $2,000 is 22.5 percent.
Beyond the first $2,000,
rate reduction varies between 14 and 17 percent up through
the $50,000 - $60,000 bracket, averaging about 15-1/2 percent
and then increases to a maximum of 23 percent at the 70
percent rate.
Over-all rate reduction amounts to 20 percent
from present rates, compared to the 23.3 percent originally
recommended by the President.
The proposal assumes enactment of the minLmum standard
deduction as originally recommended and repeal of the dividend
credit.
In the absence of repeal of the dividend credit, it
would be necessary to increase rates in those brackets which
currently receive the benefits of the dividend credit, so as
to replace the substantial revenue loss.
In order to provide maxLmum impact on the economy at the
outset, two-thirds of the rate reduction for individuals would
take effect January 1, 1964 and the remaining one-third on
January 1, 1965.
Corporate Rate Reduction
In the case of corporations the present over-all
rate of 52 percent would be reduced to 50 percent on January 1,
1964 and to 48 percent on January 1, 1965.
Under the two-year
staging the normal tax rate -- which applies to the first
- 3 -
$25,000 of corporate profits -- would be reduced from the
current 30 percent to 23 percent as of January 1, 1964.
The
surtax -- which is added to the normal tax for profits uver
$25,000 -- would go from the present 22 percent to 27 percent
on January 1, 1964 and fall to 25 percent on January 1, 1965.
For corporations earning $25,000 or less the full effect would
result in a percentage reduction of
23~3
percent.
For the
largest corporations the total rate reduction would be 7.7
percent.
The present lag in corporate payments would be eliminatc'd
over a seven-year period in such a fashion that payments withill
any calendar year would never be more than those which would
have been made before rate reduction.
The proposed current
payments involve April and June installments in 1964 and in
the six succeeding years of l, 4, 9, 14, 19, 22 and 25 perCi.·lll
respectively.
Over-all Revenue Cost
The over-all revenue cost of the proposed plan would
be $10,635,000,000 when fully effective in calendar year
1965, as compared with $10,320,000,000 under the Prt.:sldenl l s
origiocll proposals.
If the revenue inereases from tht· cap it d I
gains <lrea -- which are largely dependent upon
t"st ililalt'~l 01
- 4 induced effect -- are omitted from both programs,
th~
revenue
cost of the new alternative program would be $10.9 billion
compared to $11.1 billion under the President's original
recommendations.
Thus these new rate scales fully offset the
loss of revenue resulting from failure to accept a number of
the original revenue-raising proposals.
II.
Discussion of Proposal
The following considerations have guided the revision
in rates.
First, the pattern of economic development since
the President's Message in January has served, not to reduce,
but to confirm the need for a program of approximately the
same economic magnitude and long-term consequences as the
original program -- a net tax reduction of $10.3 billion.
While progress so far this year has been somewhat better than
earlier expectations, the outlook for reducing unemployment,
in the absence of substantial tax reduction, has certainly
not improved.
With the postwar baby boom beginning to reach
the labor market, unemployment is bound to increase unless
we release the economy from the shackles imposed by our
present high income tax structure.
Second, the greater-than-expected advance in the economy
in the first six months of calendar 1963, the prospective
- 5 -
reduction in expenditure levels as a result of Executive and
Congressional action on current apprupriation measures, and
the postponement of t.he effective date of tax reduction from
July 1, 1963 to January 1, 1964 will combine to reduce the
anticipated deficit for fiscal 1964 -- including, tax reduction -. below the $9.2 billion forecast by the President's
budget last January before allowance for tax reduction.
This
means that tax reduction of the magnitude required and
originally proposed c"m now be accomplished with a substantially
smaller increase in the public debt than was previously
supposed.
This will facilitate progress toward the ba L.tIH: ni
budget we would all like to see.
Third, the rate reductions should be fairly distributed
among incoffi'z groups in order to retain for taxpayers with
incomes of $10,000 or less approximately the same scale of
reduction they would have received under the President's
over-all program, even though higher income taxpayers, because
of the
Crnl~ittee's
action rejecting the five percent floor
under itemized deductions, would receive slightly larger overall reductions than those originally proposed.
III.
Economic Effects
The economic magnitude and consequences of the
Presidl~nl' ~j
- 6 -
original program and the plan we now recommend are roughly
the same because the long-term outlook has not changed.
The program we now recommend would reduce calendar year
1964 tax liabilities by about $6.5 billion.
Leaving aside
the capital gain revisions, which would increase revenues
because of the unlocking effect of rate reductions, calendar
year 1964 tax liabilities would be cut by $6,910,000,000, as
compared to $7 billion in the program originally recommended
by the President.
Urttler the new program we would, of course,
lose the economic stimulation of the $3 billion reduction in
calendar 1963 tax iiabilities that was a part of the President's
original proposal.
In calendar 1965, its first year of full
effl'ct, the pL-ogram we now propose would extend just over
$iU- i/2
bill i on in net tax reduction, compared with the $10.3
bi ilion of (-he President I s program.
Such action would be entirely appropriate in the light
lJf the pattern of economic development since the President's
Mt'ssage ill January.
While there has been a short-term advance
ill t hl' t'\-\lnomy this spring which was not anticipated in
J.itIIICi I"V,
'llwtwl1ged
the rate of unemployment has remained substantially
since then at a somewhat higHer 1evel than last
\'t'dt") and the long-range outlook -- both fdt employment and
- 7 for private investment -- is no more promising today than it
was last January.
Moreover, developments in the balance of
payments situation since the first of the year underscore the
importanceof reducing taxes as rapidly as possible.
While the recent advance in the economy makes it feasible
to postpone the effective date of tax reduction from July 1,
1963 to January 1, 1964, any substantial cutback in the overall magnitude of the program would have a damaging effect,
not only in real terms but also in its impact on expectations.
For there is good reason to believe that expectations of
substantial tax reduction have been an important psychological
factor in the advance of the "economy so far this year.
IV.
Budgetary Effects
The expansion of the economy in early 1963 will provide
considerably greater revenues for fiscal 1964 than those
contemplated in the President's January budget.
Moreover,
reductions in appropriations and authorization requests by
the President and the Congress will reduce the level of
expenditures in fiscal 1964 substantially from that projected
in the JanuaLY budget.
Under the program we now recommend,
which would make two-thirds of the individual cut and onehalf of the corporate cut effective on January 1, 1964,
- 8 receipts for fiscal 1964, without taking feedback into account,
would be reduced by only $2.17 billion, compared to the $3.94
billion projected under the President's program.
With a
conservative estimate for feedback, the net reduction in
fiscal 1964 revenues would be $1.8 billion, instead of the
$2.7 billion estimated in the January budget.
This combina-
tion of factors should bring the budget deficit in fiscal
1964 not only well below the over-all $11.9 billion deficit
projected in the President's January budget but also below
the $9.2 billion contemplated in that budget before any
allowance for reduction.
v.
Equity
Apart from the economic consequences of changes in magni-
tude and timing, the other major consideration behind the
rate changes we recommend as an alternative to those in the
President's original program is the need to maintain equitable
treatment among the various income groups in tailoring the
rate changes to the structural modifications adopted by the
Committee.
The Committee's decisions on the proposed struc-
tural revisions have served to substantially reduce the
Lmpact of revenue-raising measures prLmarily on those in the
middle and upper income brackets.
It would not be equitable
- 9 -
to offset that revenue loss by reducing the tax reduction for
these low income groups.
Accordingly, their percentage
reduction has been retained as much as possible.
While the
President's program proposed a reduction of 40 percent for
those in the 0 to $3,000 bracket, the alternative program
would provide a reduction of 39 percent for the lowest income
bracket.
Including the combined effect of rate reduction and
structural change, the average individual tax reduction under
the program we are recommending would be 18.7 percent,
compared to 18.4 percent under the program as originally
proposed.
As in the original proposal, the smallest reduction
would go to those with incomes of $50,000 or higher, but their
over-all reduction under the current program would be 12.9
percent as compared to the 9.4 percent originally recommended.
Over-all, the Committee's modifications of the President's
program resulted in a reduction of approximately $2 billion
in increased revenue from the structural changes proposed by
the President; the rate reduction under the schedule we propose is corresponingly reduced by' about $2.1 billion to
offset this loss as well as a portion of the loss due to
modifications in the capital gains provisions.
- 10 Approximately $1.6 billion of this shortfall in rate
reduction is reflected in the individual rate reductions, as
compared with the President's program, and $500 million in
the corporate rate reduction.
Looking at rate reduction alone,
the individual rate reduction is thus 14.1 percent less than
it would have b~en under.the President's program and the
corporate rate reduction is 18.6 percent less.
Comparison of the percentage distribution of total tax
reduction under this proposal with that under the President's
program shows that it is slightly less generous to taxpayers
with incomes under $10,000.
The proportions are 64 percent
for the President's program and 59 percent for this proposal.
This modification is a necessary consequence of the Committee's
rejection of the principal revenue-raising revision, the five
percent floor under itemized deductions, which would have
affected the middle and upper income groups because they make
much greater use of itemized deductions than the lower income
groups.
But any further shift would substantially threaten
the equitable distribution of benefits which must be a major
objective of any program of tax reduction.
~stimated
revenue effect of structural changes and capital gains revision
(In millions of
doL~~s)
01
----------------------~C~a-l~e-n~d-a-r--y-e-a-r-----------------
:"
1 9 6 5 : Long term 17
.. 1964
Structural changes
Group term insurance
..........................................
Sick pay- exclusion .............. .: ....•.......................
Deduction of certain State, local and foreign taxes
Casualty loss deduction ••••••••••.••••••••••••••••••••
Charitable deductions
( a)
( a)
( a)
( a)
. . . . . . . . ... . . . . . . . .
of
. ............. .
Medical expense deduction •••••••••••••••••
Child care allowance •••
• ••
••
• •••••
Moving expenses ••••••
Interest on certain deferred payments ••••••••••••••••••.•••••
Aggregation of oil and gas properties ••••••••••••••••.•••••••
Income averaging
••••••
Bank loan insurance •••
Personal holding compan~es •••••••••••••••••• . ••..••••••••••. ,
Repeal dividend credit .........•.••••.•.......• '.....•.•.••••
Mininlum standard deduction ••••••.•••••.•••••••.•..••••.••••••
Multiple corporate surtax exemr~Lons •••••••••••••••.•••.•••••
Repeal of 2 percent tax on con..;'" ~idated cor:r;,,)rate returns ••••
Total, structural changes ••••••••••••••••••••••••••
5
-H10
+500
+ 60
*
- 10
- 10
-60
*
+"40
40
~ 10
+15
'¥370
-310
+ 35 - + 70 2/
- :=;0
+680
-
+680
+680
+210
- 90
- 30
+130
+ 15
- 10
5
Capital gains (including induced effects)
50-40 percent inclusion
Treatment of capital losses ....................... '.. e • • • • • • • • •
Modi:f ied carryover of bas is ................................. .
G
•••••••••••••••••••••••••••••••••••••
Sale or exchange of real estate ••••••••••.••.•••••.••••••••••
Sale of residences by taxpayers aged 65 or over ••••••••••••••
Capital gains treatment of iron ore royalties ••••••••••••.•••
Stock options ............................................... .
Total, capital gallS .............................. .
+340
.:.- 30
+150
+~5"l/
- 10
5
- 30
+125
+ 15
- 10
5
-
*
*
*
+460
+305
+ 10
Office of the Secretary of the Treasury, Office of Tax Analysis
1/
2/
-/
3,
(8)
*
Capital gains long-term estimates are for tenth year.
Range between 3 percent' penalty and 7 to 3 percent penalty.
Long-run effect; first year effect small.
No final action by Ways and Means Committee
Negligible.
August 12, 1963
Midpoint used in tables.
~
Table 2
Tax Program Summary - ·Alternative Plan
Combined Individual and Corporation Estimated Revenue Loss (Before Feedback)
Calendar Years 1964 and 1965 and Fiscal Years 1964 and 1965
(In millions of dollars)
Tax rate changes only
Calendar
year liability
1964
: 1965
Fiscal
year
recei~ts
:Total,tax rate and structuraw
Tax rate and structural
changes and
changes
capital gains revision
Calendar
Fiscal
Fiscal
Calendar
:year
liability:
year
receipts
year liability: year recei;ts
1964 : 19 5
1964 : 1965
: 1964: 19 5 : 1964 : 1965
1964:: 1965
!I ......
9,600 13,670
4,150 10,180
7,000 11,070
3,940 7,680
6,250 10,320
Alternative Plan •...•.•...•
7,590 11,620
2,170
6,910 10,940
2,170 7,230
6,450 10,635~ 2,170 6,770
President's Program
Alternative as compared to
President's Program •••••• -2,010
-2,050
Office of the Secretary of the Treasury,
Office of Tax Analysis
7,910
-1,980 -2,270
90
130 -1,770
- 450
+ 200
+
315
3,940 6,880
-1,770
- 110
August 12, 196]
!/
Under President's Program there would be a decrease in calendar year 1963 liB.Uili:t'iEB oaf l3-,2lDm1llion for
rate changes only and of $3,090 million for all provisions.
~
Includes capital gains revenue estimated for year. Substitution of the long-term estimate would give a total
revenue reduction of $10,930 million. The estimated revenue reduction under the President's Program on the
same basis 1s $10,720 million.
(In millions of dollars)
Calendar year liabirfiies::
Individual
Rate changes
Structural changes ••••••••••••••••••••
Total, rate and structural •.•••••••
Capital gains revisions •••••••••••••••
Total, individual •••••••••••••••
..........................
..
Fiscal year receipts
1964
1965
-9,480
+ 625
-2,430
-8,Jf55
-2,430
-7,540
+ 625
-6,915
+ 450
-Q,465
1964
1965
-6,320
+ 625
-5,695
+ 450
-5,245
+
295
-~O
-2,430
Corporation
Rate changes ••••••••••••••••••••••••••
Acceleration of payments ••••••••••••••
Structural changes ••••••••••••••••••••
Total, rate and structural •••••••••
Capital gains revisions •••••••••••••••
Total, corporation ••••••••••••••
-1,270
-2,140
+
55
-1, 21 5
10
+
-1,2 0 5
+
55
-2, 08 5
10
+
-2,075
Rate changes ••••••••••••••••••••••••••
-7,59 0
-11,620
Acceleration of corporation. payments •.
Structural changes ••••••••••••••••••••
Total, rate and structural •••••••••
Capital gains revisions •••••••••••••••
Total
+ 680
-6,9 1 0---+ 460
-6,450
+ 680
-10;940
+ 305
-10,635
+
260
+
260
+
260
-1,270
+ 900
+
55
315
10
+
305
Total, individual and corporations
...........................
Office of the Secretary of the Treasury
Office of Tax Analysis
y
-2,430
+ 260
-2,170
-2,170
-8,810
+ 900
+ 680
-7,23 0
+ 460
-6,770
August 12, 196.3
Individual rate reductions are two-thirds effective January 1, 1964, total program January 1, 1965.
Corporation rate reductions of two points (including reversal of normal and surtax rates) effective
January 1, 1964 with four points reduction on January 1, 1965 (normal tax 23 percen~. surtax
25 percent). Structural changes and capital gains revision effective January 1, 19~.
~able !J.
Tax Program Summary - President I s Program
Estimated revenue effect before feedback
y
(In millions of dollars)
Calendar year
liabilities
1963
Individual
Rate changes
...............................
-2,760
Structllral chan.ges ........................ .
1964 __:
Fiscal year
receipts
. 1965
-8,280
-ll,040
+2z3~0
+
- 8,710
+ 650
- 8,060
21.~30
Total, rate and structural •••••••••
Capital gains revisions ••••••••••••••••••••
-2,760
Total , individual ••••••••••••••••••
-2,76J:)
-5,950
+ 650
-5,300
450
-1,320
- 2,630
+ 120
330
330
+ 270
-1,050
+ 100
950
-
+ 270
- 2,360
+ !QQ.
- 2,260
-3,210
-9,600
-13,670
+ 120
-3,090
+2.z600
-7,000
+ 750
-6,250
+ 2,600
-ll,070
+ 750
-10,320
Corporation
Rate change s
Acceleration of payments •.•••••••••••••••••
Structural changes •••••••...••.••••....••.•
Total, rate and structural •••••••••
Capital gains revisions ••••••••••••••••••••
...............................
Total, corporation •••••••••••••••••
1964
-5,000
+ 180
-4,820
-4,820
-
450
+1,300
+ ~o
+ 880
+ 880
1965
-10,360
+ 2,23 0
- 7,830
+ 700
- 7,130
- 1,320
+ 1,500
30
~
+ 150
+ 100
+ 250
Total, individual and corporations
Rate changes .............................. .
Acceleration of corporation payments •.•.•..
Structural changes ........................ .
Total, rate and structural •••••••••
Capital gains revisions ••••••••••••••••••••
Total
..............................
Office of the Secretary of the Treasury,
Office of Tax Analysis
!J
For
~dividuals,
-3,090
-5,450
+1,300
+ 210
-3,940
-3,940
-11,680
+ 1,500
+ 2z500
- 7,680
+ 800
- 6,880
August 12, 1963
rate reductions would have been accomplished in three steps; one-fourth effective
January ~, ~963, an additonal one-half effective January 1, 1964, and fully effective January 1, 1965.
For corporat~ona~ the ra~e reversa1 would have been effective for 1963, the combined rate reduced
~5C) .pe~c:-~c:",. ~964 a.n.d. t.o 47 percent. f o r ~965_
The st:ru.ctu.r~ changes would be e1'"1'"ect:1.ve
Table 5
Tax Program Comparison
President's program
!I
and Alternative plan
(In millions of dollars)
Tax rate changes only
Calendar year
liability
1964
1965
Fiscal year
receipts
. 1964
1965
Total, tax rate and structural
changes and capital gains revision
Calendar year
Fiscal year
liability
receipts
.1964
1965
1964
1965
Tax rate and structural changes
Fiscal year
receipts
13~~~65__ :
Calendar year
liability
1964
1965
President's program
Individual ••••••.••.•••••
Corporation •••••••••••••.
-8,280
-1/3 20
-11,040
- 2z630
-5,000
+ 850
-10,360
+ 180
-5,950
-1/050
- 8,710
- 2 z360
-4,820
+ 880
-7,830
+ 150
-5,300
250
- 8,060
- 2/260
-4,820
+ 880
+
'I'otal •••••••• , .••• ,'.
-9,600
-13,670
-4,150
-10,180
-7,000
-11,070
-3,940
-7,680
-6,250
-10,320
-3,940
-6,880
Alternative plan
Individual •••••.•.•••••••
Corporation ••••.••.••••••
-6,320
-1/270
- 9,480
- 2/140
-2,430
+ 260
- 7,540
370
-5,695
-1/ 21 5
- 8,855
- 2/0 8 5
-2,430
+ 260
-6,915
315
-5,24 5
-1 2 20 5
- 8,560
- 2/072
-2,430
+ 260
-6,465
305
Total •••••••.•••••••
-7,590
-11,620
-2,170
- 7,910
-6,910
-10,9 40
-2,170
-7,230
-6,450
-10,635
-2,170
-6,770
Alternative plan as compared
to President's program
Individuals •••.••••••••••
Corporations •••••••••••••
+1,960
+
50
+ 1,560
+
490
+2,570
590
+ 2,820
25 0
+
-
255
165
145
275
+2,390
620
+ 915
- 465
+
+
500
185
+2,390
620
+ 665
555
Total ••••.••••••••••
+2,010
+ 2,050
+1,980
+ 2,270
+
90
+
130
+1,770
+ 450
315
+1,770
+ 110
Office of the Secretary of the Treasury,
Office of Tax Analysis
!I
55
255
200
+
~7,130
August 12:-I9b3
Under President's program there would be a decrease in calendar year 1963 liabilities of $3,210 million for rate changes only and
$3,090 million including structural changes and all provisions.
250
Table 6
Individual income tax rate schedules
Schedules under present law and the President's tax program; and under alternative plan
Taxable income
bracket ($ thousands)
Single
person
0
.5
1.0
1.5
2
4
6
8
10
12
14
16
18
20
22
26
32
38
44
50
60
70
80
90
100
150
200
300
400
-
-
-
-
--
Married
(j oint)
0.5
1.0
1.5
2.0
4
6
8
10
12
14
16
18
20
22
26
32
38
44
50
60
70
80
90
100
150
200
300
400
&. over
0
1
2
3
4
8
12
16
20
24
28
32
36
40
44
52
64
76
88
100
120
140
160
180
200
300
400
600
--
1
2
3
4
- 8
- 12
- 16
- 20
- 24
- 28
- 32
- 36
- 40
- 44
- 52
- 64
- 76
- 88
-100
-120
-140
-160
-180
-200
-300
-400
-600
-800
800 &. over
President's tax program
Present
law rate
Rate
20
20
20
20
22
26
30
34
38
43
47
50
53
56
59
62
65
69
72,
75
78
81
84
87
89
90
91
91
.-~-.--~~~-
.'
65
9~
&5*nm 3PEL W'fc.
70 )
0 75
7
80
80 )
82
81
80
79
79
79
19
80
19
80
80
81
80
80
79
77
76
74
13
71
11
71
71
71
65
65
b~~~~on.)
It
+
14
14
16
16
18
21
24
27
30
34
37
40
42
45
47
50
52
55
51
58
59
60
61
62
63
64
Annua1 revenue cost
($
Percent
of present
rate
71
$~~.o4
~£'
1'* Aai&W_L-
Alternati ve plan
Percent
of present
rate
Rate
14
15
16
17
19
22
25
28
32
36
39
42
45
48
50
53
55
58
60
62
64
66
68
69
10
70
10
70
70 )
75 ) 77.5
80T
85 )
86
85
83
83
84
84
83
84
85
86
85
85
85
84
83
83
82
81
81
79
79
18
77
77
70
77
$9.48
A: .... uac .~,
19&3
Table 6A
Individual Income Tax Rates Under Present Law
and Alternative Program for 1964 and 1965
"
j:
Taxable income
brackets
Married
Single
( joint)
person
0.0 - 0.5
0.5 - 1.0
1.0 - 1.5
1.5 - 2.0
2 - 4
4 - 6
6 - 8
8 - 10
10 - 12
12 - 14
14 - 16
16 - 18
18 - 20
20 - 22
22 - 26
26 - 32
32 - 38
38 - 44
44 - 50
50 - 60
60- 70
70 - 80
80- 90
90 - 100
100 - 150
150 - 200
200 - 300
300 - 400
400 and over
o1
2
3
4
8
12
16
20
24
28
32
36
40
44
52
64
76
88
100
120
140
160
180
200
300
400
600
-
1
2
3
4
8
12
16
20
24
28
32
36
40
44
52
64
76
88
100
120
140
160
180
200
300
400
600
800
800 and over
Present
rates
20
20
20
20
22
26
30
34
38
43
47
50
53
56
59
62
65
69
72
75
78
81
84
87
89
90
91
91
91
Office of the Secretary of the Treasury,
Office of Tax Analysis
y
Assuming two-thirds of tax cut in 1964.
1964
Rates
16.0
16.5
17·5
18.0
20.0
23.5
27.0
30.5
34.0
37.5
41.0
44.5
47.5
50.5
53·5
56.0
58.5
61.0
63.5
66.0
68.5
71.0
73.5
75.0
76.5
76.5
77.0
77.0
77.0
y
1965
Rates
14
15
16
17
19
22
25
28
32
36
39
42
45
48
50
53
55
58
60
62
64
66
68
69
70
70
70
70
70
August 12, 1963
~
Table 7
Comparison of individual income tax liabilities under present law, the
President's tax program and under alternative program 11 with
a four-way split of the first bracket
(In millions of dollars)
Adjusted gross
income class
($ thousands)
0-3
3 -
5
5 10 -
20
10
- 50
50 and over
20
Total
Number of
returns
··
··
Tax
law
51,020
1,450
4,030
18,300
12,710
6, 7~
_ _ 4,170
_
41,420
Change
0-3
3 -
5
10
20
50
gj
y
·
··
Tax under
alternative program
870
2,850
14,500
10,770
5,940
3,180
890
2,970
14,665
10,645
5,765
3,630
38, no
38,565
from present law
-
580
5
-l,lSO
20
-1,940
50
- 820
-3,800
-
560
-1,060
and over
-
390
-3,635
-2,065
- 995
- 540
Total
.8,no
-8,855
-
10
Office of the Secretary of the Treasury,
Office of Tax Analysis
11
Tax under
President's
tax
12rogram
Amount of tax
( thousands)
9,680
10,540
22,900
6,710
1,040
150____
···
under
present
Inc~ud.e
August 12 ,1.963
structUX'U changes which consist of comm:f.ttee action to date and in addition include
of the d.1.v:1.dend credit and adopt:1.on of the m1n1mum standard deduct:1on.
e~1m1nat:1.on
Bx.c3.:u4... tax a t ..:l..terDat:l.ve rate OD c:a.p:l.t.U. ga.:l.Da.
_ ... ....;._ .:... __ ....... v
Adjusted gross income
class
($ thousands)
..;
Present
law
,jOA
-.tJ.L ug.c:-Wri;-
ana tind.e-r aJ.. ternati ve program
President's
tax
program
Alternative
program
Rate and
structural
changes
rate and structural
changes and increase in
di vidend income 1/ fran
reductionin corporate tax
Tot~
Change from present law as percent of present law
0
3
5
10
20 50 and
-
-40.0
-29·3
-20.8
-15·3
-12.1
- 9.4
-18.4
3
5
10
20
50
over
Total
-38.6
-26.~
-19·9
-16.2
-14.7
-12·9
-18.7
-40.0
-27·3
-20.6
-17.8
-17.5
-16.5
-20.2
Effective rate of tax on adjusted gross income
0
3
5
3
5 - 10
10 - 20
20
-
50
50 and over
Total
7·9
9·4
11.2
15·0
22.7
35 ·3
13·5
4.8
6.6
8.9
12.7
20.0
32.0
11.0
4·9
6.9
9·0
12.6
19·4
30.8
11.0
4.8
6.8
8.9
12.4
18.8
29·5
10.8
Percentage distribution of tax reduction
G
3
5
10
20
50
3
5
10 20 50 and over
-
Total
Office of the Se-cretary of the Treasury
Office of Tax Analysis
!/ After individual income tax.
6.7
13·5
43.6
22·3
9·4
4.5
100.0
6.3
12.0
41.1
23·3
11.2
6.1
100.0
6.0
11.5
39·3
23.6
12.4
7.2
100.0
August 12, 1963
1'abl.e9
~963 al.terDat1ve tax
prograin
Cbange in tax liability resulting tram rat.e and structural. cbanges tor ind1rt~,
}j
Structure.l. chan~es
:L1bere.l.ize: Rev1se :$~OO tloor:
Mod.1:t'y:
: Repee.l. :
Adjusted gross:
:L1beral1ze: Income :ex~us1on: medice.l. :
per
: Mod.1:t'y
grou~
:M1scel-:d1v1dend: M1nimum
income cla.s s : Rate change: child care: averag1Ilg:
ot
: expense casue.l.ty :s1ck pay
term
:laneous:rece1ved:ste.ndard :Toty
:deduction :
: moving
:deduct1on:
loss
:exc~usion:and other: taxes : credit : deduction:
.
~nses : (aged)
: insurance:
(In millions ot do~s)
($ thousands)
0-3
3 -
5 -
~o
5
10
- 20
20 - 50
50 and over
Total
'fot~
- no
*
*
*
*
*
-9,480
-10
400·
-~,020
-3,910
-2,290
-1,150
-~o
*
*
-10
-20
*
*
*
-20
-25
-10
- 5
-10
*
-40
-60
*
15
30
10
5
*
- 5
5
-
*
60
-10
5
20
55
25
5
*
*
*
*
~o
40
5
15
45
80
-180
-100
- 30
*
5
10
200
130
70
50
llO
15
500
370
-310
,1
.3
.4
~ ~.5
100
125
-~6o
- 40
+275
+225
+155
+170
- 560
-1,060
-3,635
-2,065
- 995
- 540
+625
-8,855
-li.O
Change as a percent at present tax
o 3 5 ~o 20 50 and
3
5
-27.6
-25.3
20
50
over
-~8.0
~o
Total
-a.4
-17.0
-17.0
-20.0
Of't.1.ce of the Secretary of tbe
aU1ce of 1'ax Analysis
1:1
*
-.2
*
*
*
*
*
*
*
-.~
-.3
-.5
-.~
-.~
-.~
-.2
*
-.~
-.1
*
*
*
.4
.2
.3
*
*
*
-.1
.~
.1
-.1
..
*
*
.1
.2
*
*
.1
.3
.5
.2
1.0.6
.1
~.O
~.5
+ l.a
+ 2.3
.2
1.2
3.0
+ 4.1
-38.6
-26.3
·l.9.9
-l.C.a
-14.7
-12.9
*
1.1
.8
+ 1·3
-18.7
*
1.0
1.1
.c
-12.4
....i
.7
~asury,
Based em Bouse W~ ~ Me~ Cammittee actiem 'to dat.e and
.. 1.0
+
1.;
August 12,
m1n1mllD
standard deduction and eUmination at d.iv1d.end cred.it.
1963
Table 10
Comparison of Tax Liability at Various Income Levels Under Present Law
President's Program and Alternative Program
)
Married Taxpayer With Two Dependents, With Typical Average Itemized Deductions
, Adjusted graBS income
:
(Wake-and salary 1ncome OI!lY)
Present
law
President's
program'
Alternative
program
Tax Llll.b1li ty
$ 5,000
1,500
10,000
15,000
20 j OOO
30,000
50,000
.$
300
720
1,196
2,21 3
3i 41O
6,1~20
14i516
245'
$,
596
1 Oi I.
1,908
,
_"T
2,952
5,570
12 / 690
$
235
576
994
1 J 575
2 J 884
5,416
12,369
Percent Decrease From T~~ L1~bil1ty
Under Preoen~ Lnv
18.3%
17.2
15.2
13.8
13.4
13.2
12.9
5,000
7,500
10,000
15,000
20,000
30,000
50,000
21. 7Yu
20.0
16.9
15.3
15.4
15.6
15·1
'I'ax e.a Perc,:;nt of Adjusted OrDas Income
5,000
7,500
10,000
15,000
20,000
30,000
50,000
O:~ic~ of ~he Secr~tury of
OI':'ice of' 'l'c....'X Ana.lys16
Note:
6.O"p
9.6
12.0
14.8
11.1
21.4
29.2
4.9
7.9
10.1
12.7
14.8
18.6
25.4
l~.
r(1.
7.7
9.9
12.5
14.1.
18.1
24.7
the Treasury
This table pl't:sents for taxpayers who--i tei(~iz8-de-ductions, 1;Lc- bllJ!ll: Lof rate reduction under the President's pL'ogrwn and the Al tel'(.ut i Vc:
Prugl'am, the impact of the 5 percE:nt floor unde:c ltemi'l.eri dc\lu<.:t.iulili
under the President's progr8lll, and the impact of tlle dit.ii.,d lu\/u.(lcc:
as a dE:duction of certain State and local taxeS puid undec 1-he:
Alternative Program.
Table lOA
Compurison 01' 'llax Liability at Various Income Levels Under Present Law,
Prebidtnt's Program and Alternative Program
Single Person, With Standard Deduction
lH1Justed grOHti income
:
'Wl:l.ge-ana-sa-lnt"y::::iTlcome-Qnly~
President's
program
Present
law
Alternative
program
Tax Lleb111tv
$ 1,000
2,000
3,000
5,000
7,500
10,000
15,000
20,000
$
60
240
422
818
1,405
2,096
4,002
6,412
$
14
156
318
642
1,116
1,668
3,176
5,088
,
14
161
329
671
1,168
1,742
3,334
5,350
Percent Decrease From Tax Liability
Under Present Lav
1,000
2,000
3,000
5,000
76.7""
35.0
24.6
21.5
. 20.6
20.4
7,500
10,000
15,000
20,000
20.6
.20.6
76.7~
32.9
22.0
18.0
16.9
16.9
16.7
16.6
Tax aa Percent of Adjusted Gross Income
1,000
2,000
3,000
5,000
7,500
10,000
15,000
20,000
6.~
12.0
14.1
16.4
18.7
21.0
26.7
32.1
th~ ScCl"i::t.a.ry' of the Treo.sUl'j"
OffiCe ot Tux Anulysi6
Cit.:'!.cc of
Note:
1.4
7.8
10.6
12.8
14.9
16.7
21.2
25.4
1.1~1o
8.0
11.0
13.4
15.6
17.4
22.2
26.8
August 12, 19Z3
This table presents for taxpayers who take the standard deduction, the impact of rate reduction and the minimum standard
deduction under the President's program and the Alternative
Program.
Table lOB
Comparison of Tax Liability at Various Income Levtls Under Present Law,
President's Program, and Alternative Program
Married - Two Dependents, With Standard Deduction
Adjusted gross lncome~ Present
(Wage and salary incmne=:qnlY)/
law
President's
program
Alternative
program
Te.,:.: Lie-bili tv
$ 1,,000
2,000
S'"OOO
5,,000
7,,500
10,,000
15,,000
20,,000
$
60
420
877
1,,372
'2,,616
,4,,124
Pe-rc€:nt
1"""3
00
29~
686
l/lll~
1,068
2,076
3,282
2,172
3,428
Decr~e.s~
Und~r
1,000
2,000
3,000
5,000
7,,500
,10,000
15,,000
20,000
$
$ 280
From Te.:< Litlbili tv
Present Lsw
100.0~
100 .O~~
33.3
24.4
21.8
22.2
20.6
20.4
16.9
31.0
l8.8
17.0
Tii.X es ?crcam. of M.1usted Gros:) Incofcc
1,000
2 1 °00
3,000
5,000 '
7,500
10,000
15,000
20,000
2.0%
0.4
~
).
1"0{.
04~
,.)
~ e~!
./.
11.7
8.8
9.1
13 .. 7.
10.7
13.8
l1.l
16.4
17.1
17.4
20.6
11,.5
Ot-:'-i-C-~-O-I-'-"'-""h-",-·-=S=-c-c-r-e-t-o.-ry-o-I-::-"-t;-;h-e-;;T:;-r-::e~e.-s:-::ury:-:::-:-----------f..A-';\I~;~-;-;-U;, L'-'I' :'.) -, 'I '/' , J
Oftice of Tax Analvsis
Note:
This table presents for taxpayers \-/ho takt: tllt: stuntli1rtl (kdl~':
tion, the impact of rate reduction 6.wl tht: minimum sttllld<ll'.j
deduction under the President's program und tht: Alttl'lwlivr:
Program.
Table 11
11
lof reducing corporate normal tax to
Revenue effect
23 percent and combined rate to 48 percent
.
Surtax net
income class
(Dollars)
.
0
0
Number
of
corporations
.
Taxable
income gj
($000,000)
•0
Computed tax
. liability,
present
rates gj
($000,000)
: ~ ~~QQ,J2QQl
o-
25,000
467,500
2,910
874
204
23·3
25,000 -
50,000
54,000
1,800
636
ll3
17.8
50,000 -
100,000
25,000
1,725
759
88
1l.6
100,000 - 1,000,000
25,500
6,860
3,427
293
8.5
__ J..1 437
7.7
2,135
8.8
1,000,000
and over
Total
41 000_
576,000
35.193~
___
49,225
Office of the Secretary of the Treasury,
Office of Tax Analysis
y
.
Normal tax to 23 percent and
combined rate to 48· percent
Amount of
Percent
reduction
reduction
At 1963 levels of income.
gj Excluding capital gains presently taxed at the alternative rate.
18.16~_
24,360
August 12, 1963
Table 12
Current Tax Payment for Corporations
Annual payments for a $10,000,000 calendar year
corporation (assuming 75 percent estimation) and
change in aggregate Treasury receipts implied by
the following program of rate reduction and payments acceleration:
(1)
reduction of normal tax rate to 23 percent
in 1964; surtax rate of 27 'percent in
,1964 and 25 pel'cent in l.9f)5.
(2)
first and second quarter current payments
in 1964 and six succeeding years of 1, 4,
9, 14, 19, 22, and 25 percent.
.
.
Revenue effect
: Corpora t i OIl payments:
{Millions
of dollars)
Calendar •
Fiscal
Rate
:Combined
10 of
year :Current:
year
Dollars
:payment:reduction: effect
1963
100.~
1963
$
5,19 2 ,43 0
100.0
1964
+ 260
1965
5,126,664
98.7
1965
+
900
- 1,270
370
1966
5,145,7 81
99.1
1966
+1,500
- 2,140
640
1967
5,145,781
99.1
1967
+1,5 00
- 2,140
640
1968
5,145,781
99.1
1968
+1,500
- 2,140
640
1969
5,004,969
96.4
1969
+ 900
- 2,140
- 1,240
1970
5,004,969
96.4
1970
+ 900
- 2,140
- 1,240
1971
4,793,75 0
92.3
1971
+
- 2,140
- 2,100
1963
$ 5,19 4 ,5 00
1964
Office of the Secretary of the Treasury
Office of Tax Analysis
$
40
$
+
260
August 12, 1963
TREASURY DEPARTMENT
/~
I
t IMMEDIATE RELFASE
Augus t 14, 1963
SUBSCRIPrION FIGUBF"s FOR CURREN.r EXCHANGE OFFERING
The results of the Treasury's current exchange offering of 3-3/4% notes of
iee F-1964, dated August 15, 1963, maturing November 15, 1964, are summarized
the following tables.
Amount Eligible
for Exchange
Issues Eligible
for Exchange
Total
Excha~ed
For Cash
Redem,ption
(In millions)
12%
etfs., C-1963
12~ Bonds, 1963
$5,181
1,461
$5,133
1,266
$ 48
195
$6,642
$6,399
$243
Exchanges bl Federal Reserve Districts
'./ ~
Reserve
i'rancisco
;ury
3-1/2% Ctfs.
Series C--1963
$ 41,861,000
4,363,624,000
53,241,000
1ll,509,000
21,005,000
43,075,000
161,680,000
76,037,000
39,404,000
56,060,000
23,463,000
137,084,000
4 z614 z000
Total
$5,132,657,000
~ra1
,rict
on
York
adelphia
eland
mond
nta
3.go
~u1s
~apolis
~s
City
loS
ring Issues
-)
of 1963
26,756,000
683,382,000
45,462,000
63,534,000
15,922,000
34,992,000
147,749,000
68,999,000
17,247,000
74,827,000
25,067,000
60,749,000
l z338 z000
Total
68,617,000
$
5,047,006,000
98,703,000
175,043,000
36,927,000
78,067,000
309,429,000
145,036,000
56,651,000
130,887,000
48,530,000
197,833,000
5 z952 z000
$1,266,024,000
$6,398,681,000
$
Eligible for l!!xchange
Fed€~ral Reserve
Publicly Held
Banks and Government Accounts
(In mill+ons)
, Otfa., 0-1963
~ Bonds, 1963
Total
_~ Bonds
For Cash Redem,ption
Percent of
Percent of
Total
Public
Outstanding
Holdings
$1,384
1,109
$3,797
352
0.9
13.3
3.5
17.6
$2,493
$4,149
3.1
9.7
- :3 -
and exchange tenders will receive equal treatment.
7.:
Cash adjustments nIl be made
for differences between the par value of maturing bills accepted in exchange and
the issue price of the new bills.
'!be income derived from Treasury bills, whether interest or gain from the I&le
or other disposition of the bills, does not have any exemption, as such, and loss
trom the sale or other disposition of Treasury bills does not have any special
treatment, as such, under the Internal Revenue Code ot 1954.
The bills are subject
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 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 Interna.l. Revenue Code of 19&
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
u-
clude 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 actua1l1
received either upon sale or redemption at maturity during the taxable year tor
which the return is made, as ordinary gain or loss.
. Treasury Department Circular No. 418 (current reVision) and this notice, pn
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 pennitted 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 FedenU
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 a:ny
or all tenders, in whole or in part, and his action in any such respect smul
final.
Subject to these reservations, noncompetitive tenders for
less for the additional bills dated
M9' 23, 1963
~
ing until maturity date on November 21, 1963
, (
~
$2U
91
O or
days remain-
dM
) and noncompetitive tenders for
j(fi6
$ 1XWOO or less for the
182 -day bills without stated price from anyone
(iiJO
bidder will be accepted in full at the average price (in three dec1mals) of aecepted competitive bids for the respective issues.
Settlement for accepted ten-
ders in accordance with the bids must be made or completed at the Federal Rese1"l.'
Banks on
August 22, 1963
tmO
, in cash or other immediately available tunds or
in a like face amount of Treasury bills maturing
August 22, 1963
-------,~~~-------
•
cash
7~
I
.:."I'.I.~."
,",'
•.•.•.. :; •. :>.'
TREASURY DEPARTMENT
washington
August 14, 1963
FOR IMMEDIATE RELEASE,
TREASURY'S WEEKLY BILL OFFERING
The Treasury Department, by this public notice, invites tenders for two aeriel
182 -day bills, for $ 800 ,~O
nux
August
~1963
, or thereabouts, to be dated
, and to mature
February 20 , 1964
j(lDIX)
The bills of both series will be issued on a discount basis under competit1f1
and noncompetitive bidding as hereinafter provided, and at maturity their
amount will be payable without interest.
f~e
They will be issued in bearer form oD11.
and in denominations of $1,000, $5,000, $10,000, $50,000, $100,000, $500,OOO~
$1,000,000 (maturity value).
1'enders will be received at Federal. Reserve Banks and Branches up to the
.
Dayl1~ht Saving
clOSing hour, one-thirty p.m., Ea.sternIS~ time,
Mlnday. Aua 19, lJI!...
1'enders will not be received at the Treasury Department, Washington.
Each teDIW!,
must be for an even multiple of $1,000, and in the case of competitive tendel'ltl
price offered must be expressed on the basis of 100 , with not more thaD three
TREASURY DEPARTMENT
FOR IMMEDIATE RELEASE
TREASURY'S WEEKLY BILL OFFERING
The Treasury Department, by this public notice, invites tenders
or two series of Treasury bills to the aggregate amount of
2,100,000,000, or thereabouts, for cash and in exchange for
reasury bills maturing August 22, 1963, in the amount of
2,102,089,000, as follows:
91 -day bills (to maturity date) to be issued
the amount of $ 1,300,000,000, or thereabouts,
iditional amount of bills dated May 23, 1963,
:lture November 21, 19639riginally issued in the
800,428,000, the additional and original bills
1terchangeable.
1
August 22, 1963,
representing an
and to
amount of
to be freely
182 -day bills, for $800,000,000,
or thereabouts, to be dated
gust 22, 1963,
and to mature February 20, 1964.
The bills of both series will be issued on a discount basis under
'mpetitive and noncompetitive bidding as hereinafter provided, and at
lturity their face amount will be payable without interest. They
11 be issued in bearer form only, and in denominations of $1,000,
,000, $10,000, $50,000, $100,000, $500,000 and $1,000.000
.aturi ty value).
Tenders will be received at Federal Reserve Banks and Branches
to the closing hour, one-thirty p.m., Eastern Daylight Saving
me, Monday, August 19, 1963.
Tenders will not be
ceived at tne Treasury De~artment, Washington. Each tender must
for an even multiple of $1,000, and in the case of competitive
~ders the price offered must be expressed on the basis of 100,
Gh not more than three decimals, e. g., 99.925. Fractions may not
used. It is urged that tenders be made on the printed forms and
~warded in the special envelopes which will be supplied by Federal
>erve Banks or Branches on application therefor.
Banking institutions generally may submit tenders for account of
ltomers provided the names of the customers are set forth in such
lders. Others than banking institutions will not be permitted to
,mit tenders except for their own account. Tenders will be received
hout deposit from incorporated banks and trust companies and from
ponsible and recognized dealers in investment securities. Tenders
m others must be accompanied by payment of 2 percent of the face
,unt of Treasury bills applied for, unless the tenders are
·ompanied by an express guaranty of payment by an incorporated bank
.trust company.
37
- 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 ~OO,OOO or less for the additional bills dated
tvTav 23
1963
(91 days remaining until maturit~ date on
Novemb~r 21, '1963, and noncompetitive tenders for $100,000
or less for the 182 -day bills without stated price from anyone
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 Augus t 22, 1963,
in cash or other immediately available funds or in a like face
amount of Treasury bills maturing August 22, 1963. 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 han
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 authori~.
For purposes of taxation the amount of discount at which Treasu~
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"U
notice prescribe the terms of the Treasury bills and govern the
conditions of their issue. Copies of the circular may be obtaln~~
any Federal Reserve Bank or Branch.
000
TREASURY DEPARThlENT
\.JashinGton, D. C.
nrr1EDIATE RELEASE
AUGUST 15, 1963
The Bureau of Customs announced today preliminary . . ~bl!reS showing the
quanti ties of ',rheat and . .,heat flour authori zed to be entered, or withdrawn
from warehouse, for consumption under the import quotas established in the
President's proclamation of May 28, 1941, as modified by the President's
proclamation of April 13, 1942, for the 12 months commencing May 29, 196),
as follows:
Wheat flour, semolina,
crushed or cracked
wheat, and similar
\.Jheat products
Wheat
Country
of
Origin
Established
Quota
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
800.000
Established
Quota
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
·3,81,,000
6,000
1~000
1,000
795,000
'4~
-----
3,8n.-
THEASURY DEPARTI·lENT
Washington, D. C.
RElEASE
AUGUST 15, 1963
nIM]~"1)IA'l'E
(l'he Bureau of Customs announced today prel1mirw.ry figures showing the
quantities of' 'tlheat and uheat flour authorized to be entered, or withdrawn
from warehouse, for consumption under the import quotas established in the
President's proclamation of May 28, 1941, as modified by the President's
proclamation of April 13, 1942, for the 12 months commencing May 29, 1963,
as follows:
flour, semolina,
crushed or cracked
wheat, and similar
wheat products
Whe~t
Wheat
Country
of
Origin
Established
Imports
Established :
Imports
Quota
Quota
:May 29, 196),
:May 29, 1963, :
:to Aug. 3, 1963
:to Aug. 3, 196):
(Pounds )
(Pounds )
(Bushels)
(Bushels)
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
S'. . eden
Yugoslb.via
Norway
Canary Islands
1,000
Rumania
100
Guatemala
100
Brazil
Union of Soviet
100
Socialist Republics
100
Belgium
000,000
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 1 °°0
1,000
,),815,000
4,000,000
3,821,000
6,000
~-
"
canoH WASTES
-CIa poWltis)
COTTON CARD STRIPS made -from cott.on having-a staple ·ot less than 1-3/16 inches in length, CO!.!BER
WASTE, LAP WASTE, SLIVER WASTE, AND ROVING iIASTE, WHETHER OR NOT MANUFACTURED OR OTHmilISE
ADVANCED rd VALUE: Provided, however, that not more than 33-l/3 ·percent o~ the quotas shall
be tilled b7 cotton wastes other.than comber wastes made from cottons of 1-3/16 inches or more
in staple- length in the- case- of the- tollowing countries: United Kingdom; France, Netherlands,
Switzerland, Belgium, Ge-~, and Ita171'
.
Count 17 of Origin
':
:
:
Established
TOTAL QUOTA
United Kinsdom • • • • •
4,323,457 .
Canada • • • • • • • • •
239,690
France • • • • • • • • •
227,420
British India • • • • • •
69,627
Nether~and8 • • • • • ~ •
68,240
Switzerland ~ • • • • • •
44,388
Belgium. ' • • • • • • • •
38,559
Japan. • • . • • • e . • • • •
341,535
Ch1.na -• • • • • • • • • •
17,322
8,135
EOPt • • • • • • • • • •
6,544 .
Cuba • • • • • • • • • •
76,)29
Germ&n7 • • • • • • • • •
21,263
Ital7 • • • • • ••••••
5,482,509
1I Inc~uded.in
:
Total Imports
:
: Sept. 20, 1962, to:
: August 12.' 1963
:
1,551,812
239,690
·162,778
49,926
51,982
11,234 .
33,150
36,070
2,136,642. .
Established:
33-1/3% of:
Total Quota:
Imports
II
Sept. 20, 1962,
to Augu§t 12. 1963
.1,44l,152
1,111,486
75,807
75,183
22,747
14,796
12,853
21,836
--
25,443
7,088
1,599,886
1,208,505
total. ~Ort8, ·co1umn 2 •.
Prepared in 'the Bureau of' Customa. ---The count.ry designaUons' listed in' this press release are those specified in President.ial.
Proc~ama.1:.ion No. 235~
have been. ch~ed_
of September 5.
~939.
Since that dat.e the names o£ certain countries
TREASURY DEPARTMENT
Washington, D. C.
I"1'~lAn:
RELEASE
AUGU.:;;T l5
~
1963
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
3/4"
Country of Oricin
2~:ypt
Imports
Country of Origin
and the Anglo-
=0JPti~~
::'en..l
Established Quota
Sudan ••••••••
••••••••••••••••••••
3~itish
India •.•.•...•••
................... .
..China
. co ................•.
l· .!.C}:~
Brazil ................••
Union of Soviet
Socialist Republics •••
ArGentina ••
l~iti
•••
Scuo.dor
183,816
241,952
2,003,483
1,370,191
8,883,259
618,123
782,857
35,995
81,640
8,883,259
618,723
475,124
5,203
231
9,333
Established Quota
Honduras
Paraguay
Colombia
Iraq ................ ~ ..
Bri tish East Africa •••
Netherlands E. Indies •.
Barbacios ••••••••••••••
yother British W. Indies
Nigeria •••••••••••••••
2/ Other British W. Africa
l'Other French Africa •••
Algeria and Tunisia •••
-
-
Im-oo
~
752
811
124
195
2,240
71,388
21,321
5,377
16,004
689
1/ Other than Barbados, Bermuda, Jamaica, Trinidad, and Tobago.
Y Other than Gold Coast and Nigeria.
]/ Other than Algeria, Tunisia, and Madagascar. .
-.
Staple Length
1-3/St. or more
1-5/32" or more ar¥i under
Allocat.1on
39,590,778
~-3/8t· (Tangui.s)
~. 500.000
1-3/.'
4.565.642
~-~8t. or IIIDre and under
o 1bs.
-~:-~
!mPorts Year emed July 31. 1963
39.590,778
Imports Aug. 1. 1963 to Aug. 12. JIIMj
39,590,778
263.051
82,095
4.098.879
354.097
~---
TREASURY DEPARTMENT
Washington, D. C.
~
'!
I,
"--
n!·!tDlAXE
RELEASE
,.... , "
- . .--.. ... .,...
,
--,
~
~'''--' \'..;' \,.... ;::• .l...
__
....
...
....
.......
F'
~\
~
\..--"
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
4"
Cc~r.try
Established Quota
of Oriein
=::y:pt and the Anglo=:0..!JJtiD...."1 Sudan ••••.•••
r'..1 ••.•••••••••••••••••
3~itish Ir.dia •..•••.•.••
::"2
C::i!1a •...••.•..••••.••••
:·:2):i co ...............••.
Jrazil .................•
l_:!:ion of Soviet
Socialist Republics •••
:..:" GO nt ina
-.....
!:z:..l. "" ~
••••
• ••••
'=:c'J.ooor •••••.•••••••••••
783,816
247,952
2,003,483
1,370,791
8,883,259
618,723
475,124
5,203
237
9,333
Imports
Established Quota
Country of Origin
782,857
35,995
81,640
8,883,259
618,723
-
..............
Honduras
Paraguay •••••••.
Colombia •••••••.
lr'aq •••••••••••• e.a • ~ • •
Bn tish East Africa •••
Netherlands E. Indies .Bal:"bad.os ••••••••••••••
Other British W. Indies
Nige.rta •••••••••••••••
2/Other British W. Africa
l'Other French Africa .. ..
Algeria and Tunisia .. ..
11
Imports
752
871
l24
195
2,240
71,388
21,321
5,377
16,004
689
ether than Barbados, Bermuda, Jamaica, Trinidad, and Tobago.
Other than Gold Coast and Nigeria.
etr:er than Algeria, Tunisia, and MadNt8Sc:ar.
o 1bs.
Staple Length
Alloc~tio,n
39,590,778
1-3/St' or more
1-5/32" or more and under
1-3/St' (Tanguis)
1,5C?,OOO
1-1/8" or more and under
1-3/St'
4,565,642
Imp::-rts Year emerl July 31. 1963
39,590,778
Imports Aug. 1. 1963 to Aug. 12.!Q63
39,590,778
263,051
82,095
4,098,879
3S.l".097
~
cone. WASTES
·CIIl po1Wla)
COTTON CA..ltD STRIPS made . from. cotton having -a staple of less than 1-3/16 inches in length, CO!.!BER
WASTE, LAP 'hASTE, SLIVER T.ASTE, AND ROVING 7JASTE, ':iHETH£R OR NOT 1WiUFACTURED OR OTHERilISE
ADVAl,C~D TN VALUE: Provided, however, that not more than 3~1/3 percent ot the quotas shall
be filled by cotton wastes other than comber wastes ~de from cottons of 1-3/16 inches or more
in stapl~ length in the- case- of the- follo\'!ing countries: United Kingdom, France, Netherlands,
Srltzerland, Belgium, C~rmany, and Italy~
Country of Origin
:
Established
~
TOTAL QUOTA
:
$
4,323,457
United Kingdom • • • " •
Canada .. 0
C!t
•
"
til
•
Fra.'lce .. • • .. .. .. ..
British India ~
u
Nether~ands • • ~
5
8
Q
•
..
G
•
0
4
.
e
•
Switzerland .• • ..
Belgium • .. .. .. " ,. • .. ..
Japan 0 " . " . . . . . . . . . .
China· . . . . . . G • • • 0
It
..
0
•
Egypt . . . . . . . . . . . . . . . .
Cuba . . . . . . • • • G
Ge~ • • • • • • • e _
It
Italy • • .. •
•
........
239,690
227,420
69,627
68,240
44,388
38,559
341,535
17,322
8,135
76,329
21,263
Inc~uded.in total
Established
33-1/3% of:
Sept~
Imports
T:9tal Quota:
to AUCJ.st 12,
20, 1962,
1,551,812
239,690
162,778
49,926
51,982
11,234
33,150
)..~4U .. l;2
It lll ,486
75,807
75,183
2.2,747
21,836
36,070
25,443
2,136,642-
1,599,886
6,5~
5,482,509
J/
Total Imports
Sept. 20, 1962, to
AUgust. 12 1963
:
'
196~
14,796
12,853
..
..-
-
7,088
1,208,505
imports, . column 2 •
.Prepared in 'the Bureau ot· Customs-.
'l'he country desi.gnations listed in tlri.s press reJ.ease are those specified in Presidenti.al.
Procl..amaUon No. 2.35~ 0;£ September 5, ~9.39. Since that date the names 0;£ certain countri.es
have been changed.
17
I
I
I
I
-2-
: Unit
of
: ')uantit
Imports
1,200,000
Pound
Quota Fit
12 nos. fron
11, 1902
1,000
round
12 mos. from
,',u3uS ~ 1, 19:)2
1,709,000
Quota Fil
1:2 mos. from
i\,u3ust 1,19:]3
1,709,000
180,
COi'.1:nocli::y
Sutter
SU~3~i~utcs,
Leriod and
oil, containi~~ 45~
or I:]ore outl:eri:;,': •...........•.
c'l.. . (JL:UC,·S,
~:a5tc'":,
::'::C,,~r:)'_:
) i. . ()cluc~d
i:1
salted, prepared cr
)rcscrv~d
(incl.
11
:)U
Sel)t.
unsh::l.1cd,
~lanched,
n'.1ts
Ye<::..r 1963
s~:3.:;e
l:he s~in~in3 into
yare, . . . . . . . . . . . . . . . . . . . . . . . . . . .
Shc.l.1~d,
Calendar
cot:;:O':l
o:~l.y
}rcce~in3
C<l:m':s,
as of
i~cludin3
~ut~er
I~O~:;':'l':",-
~uantity
roasl:~d
~10:: ~)can:l'':
?ca\)'.1t::er) .•.•
lm)orts ::hrough rlU8ust 12, 1'),:]3.
TRZASURY DEPAI{THENT
8?
~~ashington
nn-IED lATE RELEAS3
AUGUST 15, 1963
The Bureau of CustorJS announced today preliminary figures on imports iOl" conSUI:l:l'
tion of the following commodities from the beginning of the respective quotLl ;Jeriods'
through August 3, 1963:
Commodity
: Period and Quantity
Unit
of
: Quantity
~.nporc5
of
.1S
Augus~
~
3.
Tariff-Rate Quotas:
Cream, fresh or sour .............. Calendar Year
1,500,000
Gallon
451,554
Hilk, fresh or sour •••••••.. Calendar Year
3,000,000
Gallon
.~
~Jhole
Cattle, 700 lbs. or more each
July 1, 1963(other than dairy cows) ......... Sept. 30, 1963
120,000
Head
3,041
12 mos. from
Cattle less than 200 lbs. each •••. April 1, 1963
200,000
Head
44 ,--?'7
Fish, fresh or frozen, filleted,
etc. , cod, haddock, hake, pollock, cusk, and rosefish ••.•.... Calendar Year
24,874,871
Pound
')uota til
Tuna Fish ......................... Calendar Year
63,130,642
Pound
29,03 1,Jl
Uhite or Irish potatoes:
Certified seed •...••••..••..•... 12 mos. from
Other ........................... Sept. 15, 1962
114,000,000
36,000,000
Pound
Pound
58,990,)
29,911,1
'·]alnuts ........................... Calendar Year
5,000,000
Pound
3,5~5,;
Stainless steel table flatware
(table knives, table forks,
?'Iov. 1, 1962table spoons) ....••...•••••.••• C'ct. 31, 1963
69,000,000
Pieces
.;liotz ?i
--------------------------------------------Im~)orts for consumption at the quota rate are limited to 18,656,154
first nine months of the calendar year.
J/
PO'lI1CS
dur::'4
TREASURY DEPARTHENT
Washington
ATE RELEASE
r 15, 1963
he Bureau of Customs announced today preliminary figures on imports for consumpf the following commodities from the beginning of the respective quota periods
h August 3, 1963:
·:• Period
Commodity
··
Unit
of
: Quantity
and Quantity
Imports
as of
August 3, 1963
Rate Quotas:
fresh or sour •••••...••..•• Calendar Year
1,500,000
Gallon
451,554
ilk, fresh or sour ••••••••. Calendar Year
3,000,000
Gallon
60
700 Ibs. or more each
July 1, 1963-
r than dairy cows) ..•...... Sept. ~O, 1963
120,000
Head
3,041
12 mos. from
Less than 200 Ibs. each •••• April 1, 1963
200,000
Head
44.227
or frozen, filleted,
cod, haddock, halce, po 1cusk, and rosefish ••••.••• Calendar Year
24,874,871
Pound
Quota Filled 1:.1
h ••••...•••.•.•.....••.••. Calendar Year
63,130,642
Pound
29,036,028
114,000,000
36,000,000
Pound
Pound
58,990,542
29,911,029
5,000,000
Pound
3,575,631
69,000,000
Pieces
Quota Filled
~esh
Irish potatoes:
ied seed . . . . . . . . . . . . . . . . . . 12 mos. from
.............. ............ . Sept. 15, 1962
.......................... Calendar Year
~
) steel table flatware
knives, table forks,
Nov. 1, 1962-
spoons) ............ , ........ . Oct. 31~ 1963
ts for consumption at the quota rate are limited to 18.656,154 pounds during the
e months of the calendar year.
- 2-
Commodity
~eriod
a~d
Qua~tity
: Unit
Import-;of
as of
:Quantity: August 3~
,Absolute Quotas:
But ter subs ti tutes, inc illd ing
butt:er oil, containiu:: 45~1,
or more butterfat . . . . . . . . . . . . . .
lJl."ouucts, c;,c,~pt cotton
produced i ~ any 5 tage
lJrcceding the spin~inG into
Calendar
Year 1963
1,200,000
Pound
12 mos. from
Sept. Us 1962
1,000
Pound
12 mos. from
August 1, 1962
1,709,000
Pound
1,709,000
Pound
Quota Fi1l~
t..:ULlUl(
\Jd~ t C8,
Y-:.ll-r1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ..
l'.:J.nuls, shelled, unsllQUcd,
blanched, salted, prepared o~
preserved (incl. rO.:J.sled PQanuts but not peanut butter) .•..
12 mos. from
August 1, 1963
l/ Llllports through August
J..2, 1963.
Quota F1\l
~ ....'
naeoLUI
1~ (','
'.
1-.J,
c
.J ,; .J
J'BELDIDIAa! DAtI. OK IJaIORrS Pta CONSUlIPTIOlf or llNUANUFACTtJ'RD
If PaESIDDTWt PBDCLUIATIOHIJO.
ClJABfIRLY CIJOf.. JlRIQD •
m:M "1
I
I
C0l.D'lt ".
I
or
ProduoUoa
• Auguat 9. 1963 (or
I
__ ~ _ _ ~~ __________
drou, Noh1mad lend, a,.:"a;)
I leai, ant1.!lonb.l les.d, a.nt1I S1on1&l aot"&p lead, type lII~tal,
I all &1107. or oambill&'t1ol18 ot
______ ~~ __ L __ ~ __ }.ul!~n ••• .,.~te~
~
:Q.aartQrli-Ci.tota-~--
• Dutla.bl .. Lead
Pounds)
10,010,000
Alutralla
322
I Led &,111011 01' but &llUoD,
I bad III pip &ad ban, led
dwrt,.
--
~-:~rl.j
Iar:Jor"h
zz.
J u , ;,
and I18ttea
I
~
LEAl) AND ZINC CBI.JlGiUmC TO _
01 SlPfDlllm
1'58
- Sep hltt, ar 30, ' ~~t, 3
ITEM
Lel1d.be~ ONS, nUt
a
'257
,11,,1 I r
DfJGltS.
!r:;Iol"h
-
Bel g1W1l ad
L\ax8l1bw-C (total)
5,010,000
Bollvt&
1,,'"0,000
~
-
I'tal.1
t.N
so.
If, 114,6589~o,735-
-
Mu:loo
AM ••
1,,1~,OOO
11,,160,000
14,180,000
I~J880,;)0->
-
!\ap.1m.
All othor fD. .l .
oou::n.ri•• (total)
',"0,000
noted)
23,610,000
avll' 3~ ot z1ao
•
a
1
12,88O"aoo
15t?fo.GOD
1,72.;,,,07·
',010.. 000
~
oalz
to be l"eiJl8llUte.ctUJ"ld., z.1Do
41'0. . , Im4 a1no .k1_SDB;lI
Qlota.
Dutla..ble Un:
I=~r"ts
:
rU
(Pou.r:ui4
-
...
b, j7 3,581
..
-
-
•
",I8O.GOO
I
I
1
lS,no,OCIO
ITEM
C
I
: Z1no-blliU"1n8 ores ot all ldDds, I Zino 1Zl bloou, plp. or alal:l.,
• except p,yrit .. oo!):t...ln1~ DOt loll! .,rui1rOm-cMtt %1=, nt
(PCWlUJ
IO,OiO,OUI)
QI1atIS artWJSBD
l'!'EI4 ' "
:~~rl3'
QJ.QU
z Duthblt Ls:s,i
IS
I
I
Bel£lllA COD.
Va.
,-
aD .. SI
T "1'
,';
L G U.:)
____
.
7, 3<HI ,1)~4
",480,000
..
(,6, 4fU, 000
5,440,000
1,,)43,L'4d·
7.520,000
7,520,O()O
37,140,000
Ib,~37,294
-
'.~.ClOO
25.095,508
7O,4aG.OOO
513,563,576
,.,20.. 000
~, 1 jO ,006
1l,)63,122
'5,120,000
6,130,957
',760,000
1,912,058
..
-
3.0tl,81~·
6,080,000
•
11,a.o.ODO
11,840,300
"",000
u,OdO.O(J()
.'D?orta a. of ~uou.t 12, 1963
The a~~y. c~u"tr1
a6un~r,
••
h.~.
o~.i¥n.ti~n.
t •• n
~h~nued.
ere
tnoae specified i" Presidential
Prbcla.~tio"
No. 3257 cf
Septe.b£r 22,
I?~S.
Since t~.t ~.te t~~ n •• ca ~f cert_in
tmStIR! JIRA1tPNIW:
~l).c.
r.
()
mEDm& mr.S'
I
~~.
AUGUST 15, 1963
nrLDf.DUxr llUol OR D!POBfS fCB CONSt!l!PTION or U!OO.Nt1F'.\C':t1iIn tEAD .lJ\I) ZINC CBlRGwu,: fO fa
It PUSIDMUL l'BOCL.UlA1'lD~ )10. 3257 01 surilmm Z2, ~SS
c:aatU ESfULISHD
ClJunaLT GDQf1 JCRIQD • . Iul) I ~ Sept ••bar ;0, '~3
DI!'D1l!S. July I • Auguat 9. 1963 (or
_ _ _ _ _ _ _ _ _ _--=I:.:..:f£lf=~l
z
Ira ,,2
I
3
zQ..ulrtQl"l.1
I
~ot.a
Dtrtiabl .. Lead
~o!"t.
:~rl,y Q.\l)ta
L~i
: t)u:tbbl.
POWl:S.s}
lOloaO.OOO
A&1.t ra.l1a
-
lelp,u Cacp
IO,OiO,OOO
Lu:a:a~ hoW)
5,010.000
4t I7lt,65S·
eu..d.a
l'~O.OCIO
950,735-
-
)Iuioo
PeN
;.Mea
16,160,000
'6,160,000
14,180,000
11i,880,OOO
-
1\apal.w1a
All other fDNlp
o~ri •• (~1al)
',560,000
.ID?Ort. &1 of Auo~.t
---
b,573,587
...
loUna
l~
~,6eO,oao
1,723,~O7·
-
lS.~,OOO
..
h~v(
tl~n
m
or
t1llo
old
Nld TOl"'D-o\:1;
Qlata.
%in::
-(POIUldS
I:oocrtlr
-
..
-
7,324,024
nno
ia blocka, piSS, 01" al&ba;
::dec, tit
I onl¥ to be roamtt4rlun~ :1J:IO
:
41-0.. , and 1100 .leI!IId Dp
•
".48~u)o
I"U
-
5.MO.OQO
I,S~3t2lj8·
7.520,000
7.520,000
37,810,000
16,937,294
.
~b,480,OOO
,,600,•
•
",110,000
25,095,508
1O,Iao,.oao
~a,563,S76
'.3JC),OOO
;,190,606
12,-'000
",:;6,,122
'5,120.000
6,730,957
"7&0,000
1,912,058
-
1S.?'O.CIOO
;,0/1,81"·
'.010,000
',080,000
..
•
..
•
17,1&0,-
17,8~O,OOO
40a0,ooo
(',0(10,000
12, 1963
Th( .Lc."t c;~""trr ciE:Sisniti{>~$ art t"~u specified in ?reaid£oHa' Prcclaalltion No.
countr,e~
over- 3~
:~arl.r
I l)JtlAble
~orta
(POWl15)
..
Btl g1\111 ad
so.
I
I
•
Z111c-bea.rin& O!'aS of &ll klnds, I
a excep't pyrites OOIlte.1n1no not I
*
,
m'll
____ ~__.E
opu, flue c!tut,1 cll"on, NCWl:l31i le£Ul, 8G:'aj)
Ud aa'\tu
: le~, anti!lonla.l le3.d, a.rrt1:Doni&! .crap lead, W. mat6l. I
I aU &11(0"* 0 .. ocubina.t1oza or I
t
lead a.s_?:.
r
Produotion
noted)
l
Lead.be~
cwnt!')"
of
Vb.
__ _____
- -1-l.8&d-I:iil-nc~or btu. bUll1on,
a lM4 1n pip and. ban, lead
aD
:!Honscd.
;2,7
cf Stpteebu 22, 1958.
Since thit d.te tht o •• ea
~f
cert~in
TREASURY DEPAR'lMENT
Washington
IMHED IA TE RELEAS E
-~
?
The Bureau of Customs has announced the following preliminary figures s~
the imports for consumption from January 1, 1963, to August J, 1963, inclusive,
of cormnodi ties under quotas established pursuant to the Philippine Trade Agre.
Revision Act of 1955:
Commodity
•
·:Established
Annual
Quota
Quantity
··
••
:
··
Unit
of
Quantity
Gross
··•
·•
·
Imports
as of
August 3. 1963
156,104
Buttons ••••••••••
680,000
Cigars •••••••••••
160,000,000
Number
Coconut oil ••••••
358,400,000
Pound
242,082,246
Cordage ••••••••••
6,000,000
Pound
3,536,070
Tobacco ••••••••••
5,200,000
Pound
4,930,313
7,502,285
TREASURY DEPAR'IMENT
Washington
IMMEDIATE RELEASE
AUGUST 15, 1963
The Bureau of Customs has announced the following preliminary figures showing
the imports for consumption from Januar,y I, 1963, to August 3, 1963, inclusive,
of commodities under quotas established pursuant to the Philippine Trade Agreement
Revision Act of 1955:
Commodity
·:Established Annual ··•
·
.
Unit
of
Quantity
•.
...
..•
Imports
as of
August 3. 1963
••
Quota Quantity
Buttons ••••••••••
680,000
Cigars •••••••••••
160,000,000
Number
Coconut oil ••••••
358,400,000
Pound
242,082,246
Cordage ••••••••••
6,000,000
Pound
3,536,070
Tobacco ••••••••••
5 .. 200,000
POuM
4,930,313
·
Gross
156,104
7,502,285
- 4 notified that the seller's status has changed.
The Trearury
has indicated that penalties would be applied to persons making
improper sales under the blanket certificates, as well as those
executing false certificates.
000
- 3 OJ.lnership Certificate.
Instead, members and member organizations
of the exchanges will be required, when effecting a regular
sale, to procure from the seller or his nominee a Certificate
of American Ownership covering the sale.
To facilitate handling of accounts in which several
forei~
securities may be traded, members of these exchanges will be
permitted to rely on Blanket Certificates of American Ownership.
These fOTIns, which will be available at Internal Revenue Service
Offices, may be executed by those who have been United States
persons continuously since July 18, 1963.
cover all sales made
o~
Since these certificatel
the exchange through a single account,
this procedure will avoid the necessity for delivering a new
Certificate of American Ownership in connection with each
individual trade.
Blanket certificates would remain in effect
until revoked or until the member or member organization is
- 2 to the technical problems which had caused the postponement of
the proposed effective date of the tax on transactions through
the exchanges.
Under the new rules, regular trading on the New York and
American Exchanges in taxable foreign securities will be
conducted only if the seller is a United States person who can
sell the foreign security free of tax.
Transactions in which the
seller is not a United States person will be handled as
special transactions and noted as "subject to interest
equalization tax."
As a result, any United States person acquiring a
forei~
security on either of these exchanges in a regular transaction
will be covered by the exclusion from the proposed tax granted
to purchase from other Am=ricans.
Such a person will not be
required by the Treasury Department to produ:;e an American
August 15, 1963
FOR
IM~DIATE
RELEASE:
The Treasury Department announced today that the proposed
Interest Equalization Tax now before Congress will become
applicable to purchases of foreign securities on national
securities exchanges on Monday, August 19, 1963.
The New York Stock Exchange and the American Stock Exchange
are today sending to their m2mbers and member organizations
notification of new rules applying to the trading of foreign
securities.
The action today follows the Treasury's previous announcement
that under its proposal the tax would be generally applicable to
acquisitions of foreign securities after July 18, 1963, but
would not be applied to purchases effected on national securities
exchanges on or before August 16, 1963.
Discussions between
Treasury and exchange representatives have produced solutions
TREASURY DEPARTMENT
August 15, 1963
FOR IMMEDIATE RELEASE:
SECURITIES EXCHANGES NOTE AUGUST 19
AS EFFECTIVE DATE OF PROPOSED TAX
The Treasury Department announced today that the proposed
Interest Equalization Tax now before Congress will become applicable
to purchases of foreign securities o~ national securities exchanges
on Monday, August 19, 1963.
The New York Stock Exchange and the American Stock Exchange
are today sending to their members and member organizations
notification of new rules applying to the trading of foreign
securities.
The action today follows the Treasury's previous announcement
hat under its proposal the tax would be generally applicable to
cquisitions of foreign securities after July 18, 1963, but would
ot be applied to purchases effected on national securities
xchanges on or before August 16, 1963. Discussions between
reasury and exchange representatives have produced solutions to
he technical problems which had caused the postponement of the
roposed effective date of the taxon transactions through the
xchanges.
Under the new rules, regular trading on the New York and
n.9rican Exchanges in taxable foreign securities will be conducted
only if the seller is a United States person who can sell the foreign
ecurity free of tax. Transactions in which the seller is not a
nited States person will be handled as special transactions and
ted as "subject to interest equalization tax."
As a result, any United States person acquiring a foreign
curity on either of these exchanges in a regular transaction will
covered by the exclusion froill the proposed tax granted to
rchase from other Americans. Such a person will not be required
the Treasury Department to produce an American Ownership
rtificate. Instead, members and member organizations of the
changes will be required, when effecting a regular sale, to procure
om the seller or his nominee a Certificate of Am.;rican Ownership
lJering the sale.
(MORE)
- 2 To facilitate handling of accounts in which several forei~
securities may be traded, members of these exchanges will be
permitted to rely on Blanket Certificates of Am,2rican Ownership.
These forms, which will be available at Internal Revenue Service
Offices, may be executed by those who have been United States
persons continuously since July 18, 1963. Since these certificates
cover all sales made on the exchange through a single account,
this procedure will avoid the necessity for delivering a new
Certificate of American Ownership in connection with each
individual trade.
Blanket certificates would remain in effect
until revoked or until the member or m2mber organization is
notified that the seller's status has changed. The Treasury has
indicated that penalties would be applied to persons making
improper sales under the blanket cartificates, as well as those
executing false certificates.
000
-
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jJ
STATUTORY DEBT LIMITATION
A s of __.J_'_l.L_l....J_,--,=,-~1~,_1-";1_6-L-3___
TREASURY DIP.\RTIQ
,
Vhcal ~~"'I<.
If'
T
Wuhin~t~n: Aug. l~of 19(;;
_-
Section 21 of Second Liberty Bond Act, as amended, provides that the face amount of oblisations iSllurd under
-chat Act, and the face amount of obligations guaranteed as to principal and interest by the United States (e][Cepl sucb 1m" tI
oblil'ations as may be hdd by the Secretary of the Treasury), "Shall not c][ceed in the 8SFegate .285000 000 ~;;IUI~
June 30, 19~9; U. S. c., title 31, sec. 757b), outstanding at anyone lime. For purposes of tblS section th~ CUl~enl' r d (An ..
value of any obligation issued on a discount basis which is redeemable prior to maturity at the optiOIl of the holder .b.il~
lIidered 85 its frace amount," The Act of May 29, 1963 (P. L. 88-30 88th Congress) provides tbat the above limitltioll a r.,
temporarily increa!led (1) during the period b~ginnin8 May 29, 1963, and ending on June 30,'1963 to '307,000,000,000, (2~~:~
the pe(1od begInnIng on July I, 1963,and endmg on August 31,1963 to '309,000,000,000.
.
- ...
The followinjl; table shows the face amount of obligations outstanding a"nd the face amount which can still b.
.. IUtt;
under this limitation:
Total face amount that may be outstanding at anyone time
$309,000,000,00:
Out~tanding Obligations issued und~r Second Liberty Bond Act, as am~nd~d
Interest-bearing:
Treasury bilh - - -_ _ _ _ _ _~$47 ,221,727,000
C~rtificates
22,169,068,000
of indebtedness _ _ _ __
52 ,15L,07 3.1000
Treasury notes
Bonds Treasury _ _ _ _ _ _ _ _ _ _ _
• Savings (Current redemption value)
81,945,752,050
48,426, 771 ,192
227,14LI
United States Retirement Plan bonds
102,561,500
26,289,000
--1.l899, 3S;l,Q.02
Depositary
R. E. A. series
Investment series
Certificates of Indebtedness -
$121,544,868,000
134,hoo,991,886
L02 ,500,000
Foreign series
Foreign Currency aeries _ _ _ _ __
Treasury notes -
208,000,000
ForeigD series - - - - - - - - - Treasury bonds-
654,;US ,ltl2
Forei~cur~ency .s~rjes
t-TPqS
_oIrdL:erl,lllcates
;:,pecl a1 un sCertificates ().£ indebtedness _ _ __
--2,500, otm
6,038,732,303
1,265,428,182
2,500,000
4,71+1,366,000
Treasury notes
Treasury b o n d s - - - - - - - - - 3 2 , 9 W t , 2 3 . 8 ~OOO
Total interest-bearing _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ __
Matured, interest-ceased _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ __
Beating no intere5t:
United States Savings Stamps _ _ _ __
52,879,u50
695,411
Excess profits tax refund bonds _ _ __
Special notes of the United States:
lnternat'l Monetary Fund series _ _ __
Internat'l Develop. Ass'n. series _ __
Inter-American Develop. Bank
s~ries
__
43,724,336,303
300,93 8 ,124,371
260,535,675
2,961,000,000
128,956,600
_12.$.J 000 ,000
Total
Guaranteed obligations (not held by Treasury):
3,2681531~461
304, 467 ,191,'"50'7-
Interest-beating:
Debentures: F. H. A. & DC Stad. Bds. -
645,326,850
Matured, interest-ceased - - - - - . __ ~,967.J550
,3~4.1400
Grand total outstanding _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ __
647
B81ance face amount of obligations issuable und~r above authority
Reconcilement with Statement of the public Debt ___J_ul_Y,,--_3_1--L,_1_9_6_3___
(Date)
(Dei 1y St at em ent
0
f the Unit ed State s T re a s ury, _ _--.-:J~ul=..oy'--.c:3=l::..o,a._;1::L9_"6;..,3"____
(D.te)
Outstanding Total gross public debt _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ __
304 83L,51t ,..
Guaranteed obligations not owned by the Treasury _ _ _ _ _ _ _ _ _ _ _ _ _ _ __
-)0-$-,4"""81;11C ,:
)67 3~ ~
Total gross public debe and guaranteed obligations _ _ _ _ _ _ _ _ _ _ _ _~_ __
Deduct - other outstanding public debt obligations Dot subiect to debt limitation - - - - -
'647~
~
STATUTORY DEBT LIMITATION
As of
July
Q,~
31, 1963
TREASURY DEPARTMENT
Fhc"t ~erv{c"
WashYnston, Aug. 16_~
Section 21 of Second Li betty Bond Act, as amend.ed, provides that the face amount of obligations issued under aut hOI i ty of
Act, and the face amount of obligations guaranteed as to principal and interest by the United SCates (except such guaranteed
gations as may be he~d by the Secretary of the Treasury), "Sha,ll not exceed in the a8~egate, '285,000,000,000 (Act of
e 30 1959; U. S. C., tIde 31, sec. 7S7b), outstanding at anyone time. For purposes of thiS sectlon the current redemption
Ie of' any obligation issued on a discount basis which is redeemable prior to ma tuti ty at the o.,ptlon of the bolder shall be con,red as Hs face amount." The Act of May 29, 1963 (P. L. 88-30 88th Congress) provides tbat tbe above IimitadOIl shall be
~oratily increased (1) during the period beginning May 29, 1$)63, and ending on June 30:1963 to $>07,000,000 000, (2) dudog
period beginning on July 1, 1963, and ending on August 31,1963 to 1309,000,000,000.
'
19_63
The following table shows the face amount of obligation s
outstanding a'nd the face amount which can still be issued
1er this limitation:
tal face amount that may be outstanding at anyone time
utstanding $309,000,000,000
Obligations issued uoder Second Liberty Bond Act, flS amended
Interest-beating:
Tteasury bills --------~~47 ,221, 727 ,000
Certificates of indebtedness _ _ _ _ _ 22,169,068,000
Treasury notes
Bonds Treasury _ _ _ _ _ _ _ _ _ _
• Savings (Current redemption value)
United States Retirement Pllln bonds
52 ,.154,073,.,000
$121,5h4,868,OOO
81,945,752,050
48,426,771,192
227,lbh
102,561,500
26,289,000
3,899,391,000
Depositary
R. E. A. series
Investment series
Certificates of Indebtedness -
134,400,991,886
402,500,000
Foreign series
Foreign Currency seties _ _ _ _ __
Treasury notes Foreign series - - - - - - - - Treasury bonds-
20B ,000,000
~g&e~t~udr6ertif~~sa
tes ----SpeCial Fll'n s -
65h~ 928..,,182
----z:;;-OO
,
, trOt>
Certificates ().f indebtedness - _ _ _
Treasury notes _ _ _ _ _ _ _ _ _
6,038,732,30.3
4,741,366,000
32 ,944 ,238 , 000
Treasury bonds
Total interest-bearing _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ __
Matured. interest-ceased _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ __
Bearing no interest:
United States Savings Stamps _ _ __
Excess profits tax refund bonds _ _ __
2,500,000
43,724,336,30.3
.300,938,124,371
260~53.5,675
52~879,450
695,411
Special notes of the United States:
Internat'l Monetary Fund series _ _ __ 2,961,000,000
Internat'l Develop. Ass'n. series _ __
128,956,600
Inter-American Develop. Banlc series _ _
000 ,000 __
Total _______________________________
125.1
~aranteed obligations (not held by Treasury) :
[ntetest-bearing:
Debentures: F. H. A. & DC Stad. Bds. ___
1,265,u28,182
3, 268 l 531,l 461
304,467~191,S07
645,326,850
interest-ceased~ -~~=-=-=-==--=-=-=-=-__====2,:06=7:,:5:5:0:._~==6=L=7::,=3::9=4:::,=h-O-0
.{atured,
}rand
total outstandin8 _
Ince face amount of obligations issuable under above authority
31, 1963
July 31, 1963
)
(Daily Statement of the United States Treasury, --~~=.l--(O'-:!':!.:';te'-:)-=«-::;'''''''---July
__
Reconcilement with Statement of the public Debt _ _:::-'::~"-:==~'-'::'-"":'-(Date)
anding )tal gross public debt _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ __
laraDteed obligations not owned by tbe Treasury __________________
tal gross public debt and guaranteed obligations
., ,
. debt 0 bl"IBations PO t subject to debt hmitatlon _ _ _......._
:t - other outstanding pubhc
-944
.304,,834,S16,Ull
647,,394,400
30>,481,910,811
367,.324,904
J05,ll4,.sa~,907
T
ASHINGTON. D.C.
August 19, 196)
EEKLY BILL OFFERING
ening that the tenders for two series ot
issue of the bills dated May 2), 196),
6), which were of.fered on August 14, were
19. Tenders were invited for $1,300,000,000,
000,000, or thereabouts, of 182-~ bills.
s:
ills
, 196)
182-day Treasury bills
:
maturing February 20i~ 1964
• Equiv.
Approx. EqiiIv.
_ Rate
:
Price
Annual Rate
3.)47%
:
98.257 E/
).1.£48%
3.363%
~
98.246
3.469%
~ 3.355%!I:
98.250
3.462% Y
",,000;
Excepting two tenders totaling $200,000
,Us bid for at the low price was accepted
:ills bid for at the low price was accepted
W
BY FEDERAL RESERVE DISTRICTS:
cepted
:
19,163,000 I
857,122,000 :
17,251,000:
23,312,000:
1),)25,000:
19,550,000:
18),564,000 s
34,841,000:
10,99),000:
)1,226,000:
18,448,000:
7l,'~O,OOO:
N
$1,)00,235,000
£I
A~plied
For
$
>,774,000
1,260,171,000
8,556,000
44,675,000
9,221,000
4,6)0,000
112,022,000
10,086,000
6,740,000
15,485,000
8,933,000
74,716,000
$1,501,009,006
Accepted
$ 5,638,000
669,056,000
),121,000
9,6'75,000
),861,000
4,230,000
42,582,000
8,086,000
4,740,000
10,435,000
),9)),000
35 l 356,000
$800,713,000 ~
>etitive tenders accepted at the average price of 99.152
~titive tenders accepted at the average price of 98.250
_.J length and for the same amount invested, the return on
yields of 3.41"g" £or the 91-day bills, and ).57%, for the
rates on bills are quoted in terms of bank discount with
, face amount of the bills payable at maturity rather than
heir length in actual number of days related to a )60-day
.dB on certificates, notes, and bonds are computed in tenna
Lt invested, and relate the nmnber of days remaining in an
to the actual munber of days in the period, with semiannual
in one coupon period is involved.
TREASURY DEPARTMENT
Washington
FOR RELEASE ON DELIVERY
STATEMENT OF THE HONORABLE DOUGLAS DILLON
SECRETARY OF THE TREASURY
BEFORE THE WAYS AND MEANS COMMITTEE OF THE HOUSE OF
REPRESENTATIVES
10:00 A.M. EDT, AUGUST 20, 1963
My purpose in appearing before you today is to review
the compelling considerations that have led the President to
propose an Interest Equalization Tax on purchases of foreign
securities, to describe the proposed tax, and to urge its
early enactment.
In the most general terms, the Interest Equalization Tax
is designed to bring the cost of capital raised by foreigners
in the United States luarket into closer alignment with the
costs prevailing in the markets of most other industrialized
countries. This would be achieved by means of an excise tax
on the acquisition from foreigners of foreign securities with
maturities of three years or more.
This tax has been assigned a key role in our total effort
to achieve prompt and lasting improvement in our balance of
payments.
Its specific purpose is to reduce the immediate
strains on our position caused by a swelling outflow of 10ngterm portfolio capital from this country -- an outflow that
threatens to delay beyond prudent limits the progress toward
the external balance that we so urgently need. The tax will
complement actions being taken to improve every other major
sector in our international accounts.
Today, a disproportionate share of the demands for
capital from all the world -- from deficit and surplus
countries alike -- converges on the United States.
In the
short space of eighteen months, the volume of new foreign
issues reaching the United States market has more than tripled,
increasing from an average of less than $600 million over the
years 1959-1961, to $1.1 billion in 1962, and to an annual
rate of almost $2 billion over the first six months of this
year. A substantial portion of these rising demands must
be diverted to markets in other nations, particularly those
now in a strong external position, if the stability of the
international financial system as a whole is to be protected.
D-946
- 2 The Interest Equalizatioll Tax is a transitional means
for achieving this purpose. The need will end as longer-range
measures to raise the profitability of investment in the United
States , to restore external equilibrium, and to build more
effective capital markets abroad become more effective. And
the tax is essential for ensuring progress in reducing our
own payments deficit o'/er the difficult period that lies
immediately ahead.
It will help achieve our objectives in
a manner fully consistent with our responsibilities to spur
growth at home, to meet the most pressing needs of other
nations particularly dependent on access to our capital
market, and to maintain the framework of free markets.
The Over-all Problem
While the basic problems in this area are long standing,
the clear need for this particular action has developed only
recently. The combination of circumstances that now make it
compelling can be fully understood only within the context
of our entire balance of pa~nents, the many actions -- short
and long-run -- being taken in other directions to restore
balance, and the concurrent needs of domestic economic
policy. These matters are discussed in my recent testimony
before the Joint Economic Committee, and the President's
Special Message on the Balance of Payments which spelled out
our full action program.
As the President made clear, our over-all deficit has
declined appreciably from $3.9 billion in 1960 to $2.2
billion in 1962. Much of that progress, however, has
reflected special inter-governmental arrangements with some
of our friends abroad, sllch as debt prepayments and
medium-term borrowings, which in total amounted to nearly
$1.4 billion in 1962.
Important as they are in protecting
our gold stock, these special inter-governmental transactions
cannot be considered a substitute for the progress we
urgently need in reducing the hard core of our deficit.
This deficit on so-called "regular transactions" -that is, all transactions that emerge from the interplay of
market forces and the established policies of this and other
governments -- totaled over $3~ billion in 1962 up about
$500 million from 1961.
During the first six rn~nths of
this.ye~r, the annual rate moved still higher, to well ov~
$4 blillon. Preliminary figures for July indicate some
improvement reducing the annual rate for the first seven
months to approximately the $4 billion level.
- 3 -
The increase in our deficit on regular transactions has
developed despite a continued large surplus on exports of
goods and services, concerted efforts to reduce the balance
of payments cost of Government spending abroad, and substantial
military offset arrangements with Germany and Italy. It is
due almost entirely to the accelerating outflow of long-term
portfolio capital into new foreign issues.
For instance, while our deficit on "regular transactions"
increased by $530 million in 1962 as compared to the previous
year, U. S. purchases- of new foreign issues grew by $553
million. During the first. six months of 1963, this trend
not only continued but accelerated and the annual rate of
new foreign issues exceeded the 1962 rate by some $875 million.
Once again growing purchases of new foreign issues accounted
for the entire increase in our deficit on "regular transactions"
during the first six months of this year. The continuation
of purchases of new foreign issues at any such rate threatens
to deprive us of the time needed to imp~ove our payments
balance by the fundamental adjustments in other areas that
necessarily take time to work themselves out.
We recognize that still more must and can be done to
improve every major sector of our international accounts.
As a result of an intensive review of the practical possibilities
by the Cabinet Committee on the Balance of Payments, beginning.
last winter and completed only last month, the President has
taken action to ensure a reduction of approximately $1 billion
in the rate of Government overseas spending within the next
18 months.
Most importantly, we must improve the basic competitive
position of our economy by stimulating cost-cutting investment
and greater productivity -- while maintaining stability of
the general price level; this is, of course) a central objective
of the tax program with which you are so familiar.
But we must also recognize that, in a highly competitive
world economy, progress toward increasing our already large
commercial surplus cannot be dramatic or swift. Nor can we
expect savings in Government spending abroad, important as
they will be, to produce a sufficient reduction in our deficit
Over the next critical year or two, before the tax program
and other longer range measures become fully effective.
- 4 The Capital Outflow
For many years, the United States has been an exporter
of long-term capital, with the net flow of direct and longterm portfolio investment averaging over $2 billion a year
since the mid-1950's.
Following the widespread return of
convertibility at the beginning of 1959, and the related
elimination of restrictions on the use of foreign short-term
funds in the industrialized countries of Europe, a large
outward flow of short-term capital has developed as well.
Since 1959 short-term U. S. investment abroad -- including
unrecorded transactions, chages in which are believed largely
to reflect variations in the movement of short-term capital
that are not covered by our reporting system -- has also
average close to $2 billion a year.
Faced with this outward flow of capital -- netting out
to roughly $4 billion during recent years -- we have recognized
that measures to reduce the imbalance in the flows of capital
must be a key element in our over-all balance of payments
program.
This Co~nittee has played an active role in reducing tax
incentives to direct investment abroad, whkhhave been one
important element in the over-all problem. The investment
credit in the Revenue Act of 1962, together with depreciation
reform, brought the tax treatment of new investment in
machinery and equipment in the United States more closely in
line with that extended by other industrialized countries. In
addition, that Act sharply curtailed the use of so-called tax
haven countries as a device for reducing tax liabilities. Wi~
a reduction in the corporate tax rate to 48 percent, as propM~
in the bill you are now completing, and with your decision to
restore the full effectiveness of the 1962 investment credit
by the repeal of Section 48 G, differences in tax treatment
should be a far less significant element in decisions to
undertake direct investments i.n other industrialized countries.
More important for the longer-run, the strong impetus to economic
growth in the United States that will be provided by the new
tax bill, and the enlar~~opportunities for sales and profits
that this growth will bring, will greatly increase the relat~e
attractiveness of investment in the United States , and thus
reduce the net outflow of direct investment.
However, the problem of capital outflow has, during the
past months) shifted to the area of portfolio transactions,
as foreign borrowers have taken increasing advantage of the
10\.;er long-term interest rates and ready availability of
- 5 capital in our domestic capital markets.
It is these surging
demands by foreigners on our market, which if allowed to
continue unchecked could seriously undermine the stability of
the dollar, that have forced us to act.
Evidence of this accelerating outflow of portfolio capital
first appeared during the latter part of 1962, when a spate of
new foreign issues resulted in total purchases by Americans
for the entire year of $1.1 billion, more than double the 1961
level. The Administration made no recommendations for action
at that time, although the situation was carefully reviewed,
since a large portion of the outflow could be traced directly
to the Canadian difficulties in the spring of 1962, difficulties
which gave rise later in the year to an exceptionally large
volume of borrowings by that country to rebuild its foreign
exchange reserves.
Our official efforts were limited to
informal suggestions for spacing out the timing of the larger
Canadian borrowings. The full dimensions of the problem only
became apparent during the first half of this year when the
volume of new issues from other areas also rose sharply,
bringing the total purchases of foreign bonds and stocks for
the 12 months ended in June to $1.6 billion.
These enormous demands on our capital market have come
from a wide variety of sources.
One of the most striking
characteristics has been the sudden rise in sales of new
issues by foreign corporations, particularly those in Europe
and Japan, which in the past have been much less active than
foreign governments in using our market facilities. The
Securities and Exchange Commission recently reported that over
$400 million of new foreign corporate issues were offered in
New York during the period from April I to June 30. That
figure, covering a period of only three months, amounted to
three quarters of the comparable total for the entire year 1962
and to nearly three times the total for the year 1960. Nor is
the flow abating -- over $200 Inillion of new foreign corporate
issues have been informally reported to us as in registration,
conunitted, or in the final negotiating stages, at the date of
the President's Message, all of them from industrialized
countries and many from Europe.
At the same time foreign governments
including cities
and provinces -- have also been borrowing substantially more
han in earlier years.
In many instances, these borrowings,
t least in the case of the developed countries of Europe,
- 6 -
do not arise from any need for foreign exchange, nor are they
related, in any direct or ascertainable way, to import
requirements from the United states.
Instead, the loans have
frequently been designed to finance construction projects with
relatively small import content, or in some instances to Cover
the internal budgetary deficits of a central government; there
have been notable occasions in which the proceeds of large
dollar bond issues have been devoted to the purchase of
already existing domestic facilities.
Clearly, the major
motivation for placing many of these issues in New York has
been simply the ready availability of funds at a relatively
low rate of interest, rather than a pressing need for capital
from outside the borrower's own country.
There are no signs that this flood of new issues will,
of its own accord, fall back to the more sustainable levels
of earlier years. To the contrary, the information now becoming
available points toward the definite possibili ty that -- unless
effective action is taken -- the tide of foreign sales may ri~
still further.
Foreign businessmen are becoming much more aware of the
efficient facilities and relatively low rates available here,
and much more accustomed to their use. At the same time, then
are indications that the profit margins of many European
business firms have come under increased pressure during
recent years, so that their ability to finance their growth
almost wholly from retained earnings -- the normal practice
for many years -- is now more limited. This is leading to
increased demands for borrowed funds at a time when European
capital markets are, by and large, not yet adequately organiz~
to efficiently supply business needs from the growing savings
of their own peoples. Somewhat similar forces seem to be at
work in the case of many local government authorities abroad,
hard-pressed to finance a backlog of lo~al improvements.
These rising demands on our market have a counterpart
in the increasing familiarity with, and interest in, foreign
securities by U.S. underwriters. At the same time, the
appeti te of American investors for new foreign issues has been
whetted by the huge flow of savings in this country, by the
relative shortage of profitable domestic investment outlets,
and by the opportuni ty to earn a higher return on foreign issues.
The unfortunate experiences of the twenties and thirties, whi~
long restrained the demand for foreign securities, have noW
been largely forgotten. Moreover, the fear of difficulties
in obtaining prompt payment of income and principal has abated
- 7 -
with the ready convertibility of currencies and the growing
volume of foreign reserves.
Similar forces could, of course, easily stimulate larger
American purchases of outstanding foreign issues, and this
possibility would be greatly enlarged if the burgeoning supply
of new issues reaching our market is successfully curtailed.
Better Free World Markets for Capital
It is entirely appropriate that the United Sta.tes -- the
world's strongest and wealthiest nation -- should continue to
support the development: of other nations by supplying them
with urgently needed capita.l through private market f8.cilities.
This is a natural part of our role at the center of the world's
financial system. Our capacity to provide this capital in
reasonable amounts is assured by the ability of our economy
both to generate enormous savings and to maintain the largest
surplus on current commercial transactions of any nation.
Moreover, the mutual advantages of flows of capital in
reasonable amounts -- advantages both to the United States,
in terms of a future flow of earnings, and to other nations,
in terms of supporting their own growth -- are readily apparent.
At the same time, hm.,rever, it serves the interest of no
free nation to have this flow run at a pace that sharply
aggravates existing imbalances in internationa.l payments.
This would soon brin·g intolerable strains on the whole international monetary system, imperil the bright prospects for
growing trade among nations, and undermine the growth and
cohesion of free world economies.
For the past 18 months, American officials have pointed
out that our balance of payments imposes some limits on the
amount of capital that this country could afford to invest
abroad. We have cautioned that so long as the United States
stood alone in providing both a free and efficient capital
market -- and so long as the capital markets of most other
industrialized countries continued to be inadequate to the
task of meeting even their own internal needs at reasonable
rates -- the danger might emerge that demands on our market
would exceed the limit of what we could safely supply.
These warnings emphasized that other industrialized
countries, to support their own rapid growth, should develop
their own capital market facilities for mobilizing and
distributing their own domestic savings.
It is clear that
- 8 more effective markets in the other industrialized countries,
combined with the relaxation and elimination of controls on
foreign lending that linger on from an earlier day, are basic
requirements for a properly functioning international financi"al
system -- a system in which flows of capital from country to
country, responding to market forces, will promptly reflect
shifting needs and capacities.
I believe this need for better capital markets in the
leading industrialized countries is generally recognized today.
Signs of progress are beginning to a.ppea.r in some countries.
But the progress has been too slow to meet the need. The
potential dangers we foresaw have unfortuantely materialized.
As a result, we cannot escape the hard and unplea.sant necessity
for prompt action on our part to stem the outflow of portfolio
capital. When other industrial nations have developed adequate
long-term capital markets of their own -- as they must and will·,
a wholly free international market for long-term capital will,
for the first time, become an actuality and will lend much
"Ineeded flexibility and strength to the entire international
payments mechanism. In the interim," and until our own balance
of payments position becomes significantly stronger, we must
seek temporary answers.
The Possibility and Limitations of a. General Tightening of Credit
One solution to the excessive export of long-term capital
would be to tighten credit and raise interest rates all along
the line. In this way, costs of financing would be raised,
foreign borrowings would be diverted to other markets, and
domestic securities would become more attractive to investors,
both American a.nd foreign. But this approach implicitly
associates a balance of payments deficit with excess demand and
rising prices at home. Instead, we are faced today with
unempluyment and inadequate investment within our domestic
economy. A sharp rise in interest rates throughout our money
and capital markets, if possible at all in the face of the
huge current supply of savings, would require the most drast~
restraints on our money supply and credit expansion and Yfould
thus sharply reduce domestic as well as foreign borrowing.
The cost would be measured not only in growing unemployment,
loss of potential production, and personal hardship. In
addition, it would also jeopardize the prospects for restor~g
lasting balance in our international accounts. A depressed
economy will not stimulate investment at home, encourage rapid
strides in productivity, or provide incentives to use more of
- 9 our savings in this country. These a.re the factors -- combined
with price stability -- that must be at the heart of our longerrange program to restore international equilibrium and lasting
confidence in our currency.
A rise in long-term interest rates reflecting a normal
market response to a vigorously expanding economy that is creating
pressures on available resources would be quite another thing.
Such a development could not only benefit our balance of payments
but would also help assure stability in our domestic economy.
But to try to artificially reverse this natural process, and
force long-term interest rates sha.rply higher at a time when
our growth potential is not being realized, would be to run
risks that neither we nor the world can afford.
With short-term rates the situation is quite different.
It has been possible and desirable to exert upward pressure
on these rates over the past 2 years, thereby curtailing the
outwa.rd flow of short-term capital, while keeping credit amply
available to domestic borrowers.
In fact, from the low point
of the recession in early 1961 until mid-July, rates for
Treasury bills increased by 3/4 of 1% while bank loan rates and
the cost of long-term corporate borrowing held steady. At the
same time the interest cost of state and local financing
declined and long-term mortgage rates -- perhaps the most
important of all rates for the domestic economy -- dropped by
1/2 of 1%. The recent rise in the Federal Reserve discount rate,
combined with higher permissible rates for short-term time
deposits, has cB.rried this policy a step further, and should be
of considerable assistance during the months ahead.
The Interest Equalization Tax, applying to purchases of
portfolio securities with maturities of 3 years or more, will
be a companion measure in the long-term area. It will achieve
by means of a tax that genera.lly increases the cost of money to
foreigners by about 1 per cent -- the dampening impact on
foreign borrowing that we cannot accomplish under present
circumstances by restricting credit to the degree that would be
necessary to achieve a substantial rise in rates throughout the
whole structure of our long-term domestic credit.
- 10 The Nature of the Interest Equalization Tax
The Interest Equalization Tax will be a temporary excise
tax imposed on the acquisition of a foreign security from a
non-resident foreigner by a United states person, regardless
of the place where the transaction actually is completed. The
American lender or purchaser can be expected to demand about
the same net return, after allowing for_the tax, as he would
for a comparable issue not subject to tax. Consequently,
a foreign issuer of new securities will need to provide
more attractive terms to compensate for the impact of the
tax. In the case of bonds, the tax has been graduated by
maturity in a manner that will introduce a differential of
approximately 1% in the effective interest rate before and
after taxi the tax on equities would be the same as for bonds
of the longest maturity.
The result will be that costs to foreigners of capital
in the United States market will be much more closely aligned
with costs prevailing in most of the leading countries abroad.
This will substantially eliminate the existing incentive to
raise money in the American market simply to achieve a saving
in interest costs.
In only two countries, switzerland and the Netherlands,
are long-term rates below or closely comparable to those
prevailing in the United States.
It is not accidental that
we find in these two countries the best developed capital
market facili ties on the Continent of Europe -- for inefficient,
cumbersome markets inevitably mean high interest rates. Nor
is it accidental that they both very strictly limit, by
direct controls, the amount of foreign borrowing in their
markets. The United Kingdom, with potentially the broadest
and largest of all the foreign markets, has limited foreign
access even more narrowly, until very recently confining its
lending almost exclusively to Commonwealth countries in the
sterling area. And in the United Kingdom, as with virtually
all other industrialized countries, prevailing rates paid by
domestic borrowers are 1 per cent or more above those in the
United States.
The higher borrowing costs for foreigners resulting from
the tax will not be prohibi ti ve and long-term funds will remain
available to those prepared to meet the normal market test of
willingness to pay the prevailing rate.
Those who have urge~
needs for longer-term funds not available on reasonable te~
el sewhere wi 11 continue to make use of our unrivaled facilities;
- 11 those who today merely find their own or other markets marginally
too costly for their taste will be diverted from our markets.
The consequences of the tax for foreign borrowers will
thus be closely analogous to a rise in long-term interest
rates in the united States. While the price of long-term
money to foreigners will rise, no restrictions will be placed
on the free use of dollars for any purpose that a holder -foreign or domestic -- might desire. Decisions of private
parties, responding to forces working through market prices,
will not be supplanted by official directives.
This is vastly different from an attempt to direct
individual transactions and to impose a system of exchange
controls, or even a selective screening of capital issues,
upon market processes. That kind of approach, as the
President has said, would be both inappropriate to our
circumstances and contrary to our basic precept of free
markets.
The problem we face is not one that we can meet simply
by exercising the moral force of Government leadership and
persuasion. Government can, to be sure, point out the nature
of the problem, and suggest the main directions in which the
public interest lies. We have done that repeatedly over the
past year, suggesting that American underWriters seek out
potential foreign buyers and that more emphasis be placed
on public offerings rather than private placements so that
foreign participation becomes possible. But it is now clear
that firm legal guidelines and the disciplines of market
forces are required to reinforce these efforts. The
Interest Equalization Tax meets this need.
The Coverage of the Tax
To achieve its purposes both effectively and equitably, and
without unnecessary distortion of normal market relationships,
the proposed tax must be applied to acquisitions of both new
and outstanding securities, and to both debt and equities.
Clearly, the major problem at the moment, in terms of sheer
dollar volume, relates to new debt issues. These accounted for
nore than four-fifth's of the outflow from all portfolio
transactions in foreign securities over the first half of
this year, and for the bulk of the increase over the past
twelve months. Gross purchases of outstanding foreign bonds
are also large -- with reported total foreign bond sales,
- 12 exclusive of new issues and direct investments, running from
$600 to $800 million annually during recent years -- but frequent~
these purchases are offset by sales, reflecting the simultaneous
transactions that characterize arbitrage. However, net purchases
were slightly over $100 million in 1960. After dropping to
smaller figures in 1961 and 1962, they rose to an annual rate of
$200 million during the first six months of 1963.
Perhaps even more important, the interest of American
investors in outstanding foreign debt issues could be expected
to rise very substantially if such issues remained freely
available without tax, while the volume of new issues reaching
our market contracted. At best, the effectiveness of the tax
would be sharply reduced, and established market relationships
in the sale of new issues would be disrupted to little or no
avail.
Trading in outstanding foreign equities, in contrast to
bonds, is much larger than the flow of new stock issues. New
issues of foreign shares purchased by Americans amounted to
$74 million in 1962, and $32 million over the first six months
of this year. Meanwhile, gross purchases of outstanding foreign
stock from foreigners have ranged from around $600 million to
over $900 million during recent years.
In some years, purchases
have been almost entirely matched by sales to foreigners -- Md
some proportion of tre transactions undoubtedly has reflected
routine and offsetting arbitrage activity. But, during six of
the past ten years there has been a sizeable drain on our balance
of payments from this trading ranging as high as $326 million
in 1961.
l
American investment advisors and investing institutions,
including pension funds with increasing frequency seem to
believe that diversification could be improved by investing a
portion of their assets in foreign equities. When one considen
the billions of dollars currently invested in stocks by pension
funds alone, it is easy to realize that an attempt to place only
five per cent of these assets in foreign securities -- as some
have recently begun to do -- could lead to an outflow of many
hundreds of millions of dollars per year, far outpacing our
efforts to induce more purchases of American securities by
foreigners.
Regardless of the merits of such diversification
in the long run, there is no question but that a cascading of
such purchases in present circumstances would gravely strain
our over-all balance of payments position.
J
- 13 The issuance of equities is an alternative to debt financing
in raising capital, and the choice is directly influenced by
relative cost.
Similarly, for many investors, bonds and stocks
represent alternative uses of funds.
Both debt and equity
capital are relatively cheap in the United States today, and
in these circumstances it would clearly be inconsistent to tax
foreign access to one market and not to the other.
Under the proposal before you, the only transactions taxed
would be acquisitions of foreign securities by a United States
person from a non-resident foreigner.
Trading in foreign securities
among Americans, as well as sales of foreign securities by
Americans to foreigners, will be entirely free of tax. An active
tax-free market will be maintained within the United States for
widely held foreign issues.
Imposition of the tax should entail
no loss in the value of foreign securities held by Americans,
and is in no sense a capital levy.
Exclusions and exemptions from the tax can be justified
only when clearly required to support vital national objectives,
to meet the needs of the international financial system as a
whole, or to permit effective, non-discriminatory administration.
Extension of exemptions beyond these limits -- which are in every
case fully consistent with its purposes -- would inevitably open
the way to both inequities and avoidance, and eventually undermine
the effectiveness of the tax.
Short-term Securities -- One class of securities that would
be excluded from tax entirely are those with a maturity of less
than three years. These money market instruments change hands
in enormous volume.
The transactions take a wide variety of
forms, and the extension of credit can be, and sometimes is,
submerged as part of related transactions. Many different
purposes are served, but most of them relate closely to trade
financing and to normal, reversible, shifts of funds between
markets in response to temporary needs.
Close integration of
the money markets in the leading countries is essential to the
orderly and expeditious clearing of international payments that
underlies the flow of trade, and the operation of the international
monetary system.
Large shifts of short-term funds in response to interest
rate differentials or speculative influences can be a source
of serious strain, and net outflows of short-term capital have
added to our balance of payments problem over recent years.
However, these transactions cannot readily be separated from
those that provide an essential lubricant for world commerce;
and partial insulation of the domestic market by an excise
tax would risk distorting and impeding normal trade financing.
Formidable administrative obstacles would also be encountered.
- 14 Consequently, our main tool for influencing the market in this
area must continue to be the flexible use of the traditional
instruments of monetary policy, such as the increase in the
discount rate effected last month by the Federal Reserve.
Commercial Bank Loans -- Commercial banks making loans
in the ordinary course of their commercial banking business
would not be subject to tax.
The great bulk of these loans fall
within a three-year maturity range, and would therefore be
excluded for the reasons already mentioned; the volume of foreign
loans maturing in more than five years appears to be minimal
and usually is related to specific U.S. exports.
The volume
of bank lending is, of course, directly subj ected to the influence
of monetary and credit policy.
Clear evidence that longer te~
bank lending was being used in any significantly increasing
degree as a means for assisting foreign borrowers in evading
the tax would, of course, be a source of serious concern.
However, we would not expect any such development.
Export Credit
Export credit extended by American
producers directly to their foreign customers, as well as
Export-Import Bank financing, will also be excluded from the
tax.
Considering the exclusion of bank and short-term financing,
it is clear that this tax will not impair the present ability
of American firms to offer credit facilities second to none in
the world -- whether for short- or medium-term -- to their
foreign customers.
Direct Investments -- The tax will not be applied to direct
investments in overseas subsidiaries and affiliates. Direct
investment is defined to include the acquisition of debt or
equity interests in a foreign corporation by a United States person
owning at least ten per cent control after the transaction is
completed; this is based on a statutory test used in the Revenue
Act of 1962.
Decisions to undertake direct investment imply active
participation in the management of the foreign corporation. W
these decisions, questions of market position and long range
profitability completely outweigh any concern over interest-rate
differentials.
The inadequacy of capital markets abroad has
also been much less of a factor in causing direct investment
than it has in stimulating portfolio investment abroad by
Americans. Application of the proposed Interest Equalization
Tax to this area consequently 1S unnecessary and undesirable.
Less Developed Countries
The tax would not be applied
to acquisition of securities issued by less developed countrieS,
- 15 as defined by Executive Order of the President, nor to acquisition of
securities issued by less developed country corporations, whether
or not these securities are guaranteed by a developed country.
At the present time, it is contemplated that this exclusion
would apply to the securities of all Latin American countries ,
African countries with the exception of South Africa, Asian
countries except for Japan and the Crown Colony of Hong Kong,
and to a few other nations outside the Sino-Soviet bloc.
This exclusion is designed to avoid any impediment to the
flow of private capital to those nations with chronic capital
shortages, urgent development needs, and limited capability
for foreign borrowing on normal commercial terms. The United
States, through its aid programs and otherwise, has long
recognized a responsibility for assisting these nations in
their struggle to achieve improved standards of living, and
application of the tax to issues of these countries would work
against that objective. The outflow of portfolio capital to
these areas has been limited, never exceeding $200 million
during recent years, and usually running closer to $100
million.
Exemptions in the Interest of International Monetary Stability
An exemption by Executive Order, for new issues only, would be
provided if the President finds that the application of the tax
would have such consequences for a foreign country as to imperil,
or threaten to imperil, the stability of the international
monetary system.
The President would be authorized to place
a limit on the amount of any such exempti~n over a specified
period, or to allow an unlimited exemption. The exemption
authority would not cover transactions in outstanding securities,
which would remain subject to tax.
Exercise of this executive authority would be jusitified
only in response to a highly unusual set of circumstances. A
continuing need on the part of the foreign country for sizable
external borrowing to offset a current account deficit would not
in itself meet the test.
Nor would a distinct threat to international
monetary stability necessarily be implieo because the capital market,
as well as the trade and other financial relationships, of the
foreign country concerned happened to be especially closely
integrated with those of the United States, and that country
traditionally met the bulk of its needs for external capital
in our market. A potential threat to the monetary system
would arise only when the foreign country concerned, faced
with higher borrowing costs in the United States, would be
Eorced to adopt measures gravely damaging to the stability of
Ets currency and imperiling the international monetary system
- 16 as a whole.
In my judgment, only Canada would today qualify
for exemption on these grounds.
As to the effectiveness of the tax, Canadian authorities
have indicated that domestic considerations in Canada favor
an expansionary policy with interest rates as low as can be
maintained, without eliminating the United States as a source
of the limited amount of funds needed to balance over-all
Canadian accounts.
Pursuit of such a policy by Canada itself
serves to reduce the interest incentive for Canadian borrowing
in our markets.
Thus, we can expect that even with an unlimited
exemption on new issues the volume of Canadian borrowing will
be substantially less than the high rate of late 1962 and early
1963 and should roughly approximate the more normal levels of
earlier years.
In any event, the trend of Canadian borrowing
will be closely followed by American and Canadian authorities,
reflecting the strong interest of both governments in attaining
this objective. For our part we are also establishing an
inter-departmental committee to keep close track of developments.
Although we are prepared to appraise with officials of JapG
and other countries the impact of the tax over time in the light
of their particular circumstances, we cannot now see any reason
for further exemptions.
Application of the Tax
The detailed provisions of the tax, and the way in which
it will be applied, are fully explained in the technical
description already in the hands of your Committee.
I will
simply summarize the main provisions here.
The Rate Schedule--The tax on debt obligations will be
assessed as a percentage of their actual value, according to
a schedu~graduated by maturity, with the rates ranging from
2.75 percent for a 3 to 3~ year maturity to 15 percent for an
obligation maturing in 28~ years or more.
In the case of stock,
the tax would be 15 percent, the same as for bonds of the
longest maturity.
Liability for Tax--The tax would be imposed only on United
States persons who acquire foreign securities from non-resident
foreigners.
In cases of acquisitions from other Americans, a
certificate of American ownership executed by the seller will
serve as proof that the transaction is exempt from tax.
To facilitate and encourage the placement of new forei~
issues abroad, American underwriters participating in the
- 17 distribution of new foreign issues would receive a credit or
refund of the tax on any sales directly to foreigners.
Similarly,
dealers maintaining markets in foreign bonds denominated in
U. S. dollars will be given a refund from tax on any such
securities purchased from foreigners and resold to foreigners
within a reasonable time.
This treatment will provide incentives
to place a maximum portion of new flotations in foreign hands,
and will assure potential foreign buyers that an active
secondary market will be available for such new foreign dollar
bonds as they may purchase.
Returns--The tax will be paid on the basis of returns due
by the last day of the month following each calendar quarter.
These returns will require a listing of all taxable and certain
exempt acquisitions during the calendar quarter.
Effective Date and Expiration--Under the terms of the bill
before you, this tax, with certain limited exceptions, would be
applicable to acquisitions made after July 18, 1963, the date of
the President's Message proposing the tax, and through December
31, 1965. The choice of the July date is necessary to avoid
markedly perverse and inequitable effects. The nature of the
tax was disclosed in the President's Special Message on the
Balance of Payments, and the essential features were fully
described in material released by the Treasury at the same time.
Market participants were informed of the proposed effective
date and forms easing the task of compliance were made promptly
available.
In a situation of this kind, any appreciable lapse of time
between the initial announcement and the effective date would
clearly create problems of the most serious character. A very
large volume of contemplated transactions could be advanced to
this interval, resulting in a sharply accelerated outflow of
dollars.
In the space of only a few weeks, or even days, strains
on the foreign exchange market could reach the point of threatening
to set off self-reinforcing speculative movements. The ensuing
disturbance and unsettlement would inevitably linger on, with
possibly prolonged effects on trade and economic activity.
An exemption for issues in registration on July 18, or for
which there were unconditional or partly performed purchase
commitments, will avoid any undue impact on transactions in
process at the time of announcement.
The practicability of the procedures for the application of
the proposed tax has been established. With the help of certificates
of ownership provided by the Treasury, the large over-the-counter
- 18 market has already been operating for more than a month just
as if the tax were already in effect. An exemption for
Stock Exchange transactions prior to August 16 provided ample
time for resolution of technical problems arising in trading
on an Exchange, and those markets have now begun to operate
under procedures that permit both purchasers and sellers to
comply with a minimum of difficulty.
The Impact on Capital Flows
No one could pretend to forecast with prec~s~on the impact
of this tax on the volume of portfolio flows.
The very essence
of this kind of action, working through market prices instead
of administrative controls, is that no fixed and immutable
target can be set. The volume that will emerge is not predetermined
but will depend upon the urgency of the needs of other countries,
the speed with which capital markets in other countries develop,
and upon other supply and demand factors in our own market.
New foreign issues will continue to reach our market from
borrowers with inadequate markets at home, and limited access
to markets of other countries. Countries needing to cover a
current account deficit will continue to find it advantageous
to borrow some amount in our market, despite the higher price.
Borrowing by underdeveloped countries, while relatively small,
will continue unimpeded.
But marginal borrowers, attracted simply by the existing
savings in interest costs, will certainly be induced to seek
funds in their home market. This tax will virtually eliminate
rate incentives to come to the United States when there is a
feasible option to borrow in the home market.
It is clear that
a significant proportion of the swelling volume of new issues
over the past year, and those which were on the horizon before
the President's Message, has been by borrowers in industrialized
countries in a position to exercise precisely that choice.
On bal ance, a reasonable prognosis may be a reduction in
the outflow of capital from this country into new foreign bond
and stock issues back toward the range of $500 to $700 million
that prevailed from 1959-1961.
In effect, this would reverse
the sharp acceleration in 1962 to $1.1 billion, and the furth~
alarming increase over the first six months of this year to an
annual rate of nearly $2 billion. This will enable us to make
the progress we so clearly need in reducing our over-all deficit.
The smaller outflow should be fully sustainable in view of the
progress being made in other sectors of our balance of payments,
and at the same time will make it possible to meet the urgent
needs of our foreign friends.
- 19 Additional balance of payments savings can, of course,
be anticipated with respect to transactions in outstanding
securities. But of even greater importance, imposition of the
tax on such securities will remove the possibility that net
increases in purchases of outstanding foreign securities
could frustrate the effects of the tax on new issues and add
appreciably to the burden on our balance of payments.
This tax will incidentally generate some revenue for the
Treasury. Any estimate must allow for a wide range of
uncertainty, not only because the total volume of foreign
issues that will be purchased from abroad by Americans cannot
be pinpointed, but because the composition by type and maturity
may shift. However, it appears likely that these revenues
will fall somewhere in the general area of $20 to $30 million
annually.
The Need for Early Action
The Interest Equali~ation Tax will not, of course, be a
permanent part of our financial scene; but it is also not just
a stop-gap to protect the dollar. Rather, it is an essential
element of a much broader program to restore lasting balance
in our international payments and to assure the continued
stability of the whole international payments system.
The role of this tax is critical. For it has become
apparent that, until capital markets are better developed
abroad and investment demand becomes greater at home, and
until the planned reductions in Government expenditures
entering our balance of payments take effect, a rising outflow
of portfolio capital can endanger our whole position -- and
with this the entire financial structure of the free world.
These problems can and will yield to our concerted efforts,
and to those of the other industrialized countries. As they
do, this tax should be removed. But we cannot take comfort
in a bright tomorrow before we meet the urgent problems of today.
We cannot afford to delay in the idle hope that
other, easier solutions can be found, or that our immediate
problems will simply fade away. We must demonstrate conclusively
that we are willing to meet the challenge before us, and to
control our own affairs. Only that way can we keep and
strengthen confidence in the achievements already made,
in cooperation with our friends abroad, toward curbing disruptive
currency speculation, toward building strong defenses for the
- 20 -
dollar, and toward developing an international financial
structure that is fully adequate to the tasks ahead.
This tax will be effective and fair. There are no
acceptable alternative for promptly limiting the outflow
of dollars into foreign securities that is presently endangeri~
the other gains that our balance of payments program has begun
to produce. The time for action is now.
u.s.
Balance of Payments, 1960-1st Qtr. 1963
(In millions of $)
Co~ercial
Trade Balance
Corr.merci~l Services Balance
Balance on Commercial Goods and Servicesll
expenditures
4·1ilitary cash receipts-l/
Govern~:lent grants and capita1--do11ar payments
to foreign countries and international institutions
Govern~ent capital receipts excluding debt prepayments,
borro\·1ings, and fundings!1
:·~ilitary
Remittances and pensions
1st Qtr.
1963 1.1
-1960
1961
-1962
2817
1458
4275
3179
2130
5309
1989
2322
4311
400
578
978
-3048
336
-2934
~741
393
.. 3028
673
-1107
-1116
-1070
-226
538
533
513
103
-672
-705
-736
.,217
-2114
-1438
-683
-2143
-1475
-905
-2495
-716
-102S
-985
34
-3913
-3043
-3573
-917
32
673
1387
461
-3881
-2370
-2186
-456
181
Private capital
lon~-term
o
short-term
Unrecorded transactions
B~lance
on
Re~ular
Transactions
Special Government Transacticn~/
Overall Defic.it
-44
11 Seasonally adjusted.
2/
-
Nonmilitary merchandise and service transactions less those financed by Government grants
and capital.
}../
E:.::cludin,:; aclvan-:es cu :uilitary
~:<ports.
4/ Includes small ~~a~zes in mis~el1aneous Govern~ent non-liquid liabilities.
5i Not seasonally edjusted; Includ8s nonscheduled receipt3 on C~vernm~nt loans advances on
- military exports, and sales of non-c~r~etable medi~-tel~ s~~urities, including $350 million
of non-~~r1:etable oedium-term convertible securities in th~ first quarter of 1963.
Sot!rce: St.~Z~~_.Gur:cent l}.!.~s!Ele...2.§.
!ABLE 2
Private Capital Flows in the U.S. Balance of payments, 1959-1st Qtr. 1963
(In millions of $)
LO~IG- TERH
-1959
CAPITAL
Direct Investment
U.S. direct investment abroad
Foreign direct investment in U.S.
Net
Portfolio Investment
U.S. purchases of new issues of foreign securities
U.S. net purchases of outstanding foreign securities
Other U.S. long-term, net
Redemptions of U.S.-held foreign securities
Foreign long-term portfolio investment in U.S.
Net
Net long.. term capital
SHORT-TERM CAP~L
U,S. short-term, net
Foreign commercial credits to U.S.
Net short-term capitalll
•
UNRECORDED TRANSACTIONS
1/
Not seasonally adjusted.
-
~hese were:
21
1960
-
1961
-
1962
-
-556
73
.. 1557
132
-1553
-1525
-1425
-539
-573
-1076
-55
-248
-512
-26
14
95
471
... 200
100
289
-523
-353
-258
123
393
170
139
31
11
-455
-561
-618
-1070
-482
-1589
-2114
-2143
-2495
-1021
-77
-1348
154
-90
-1541
177
-507
-116
31
-13
77
-1438
-1364
-623
18
412
-683
-905
-1025
106
-1372
238
-1694
141
-1598
-1134
-624
-139
-258
-177
Including receipts on Export-Import Bank fundings of U.S. private short-term credits.
1961. 111; 1962. 93; 1st Qtr. 1963. 8 •
• O~~Q_t
Survey
pC
~UEx.nc
ay.~D
•••
1st Qtr!1
1963 -
17
New Issues of Foreign Securities Purchased by U.S. Residents,
bI guarters J 1962-1963 {first halfl
(In millions of $)
Total
1961
Canada
237
1 9 6 2
-I -II -III
196 3
-
IV Total
-
--
I
II
1.1
1963 first'!:'!
half at annual rate
10
112
41
294
457
368
239
1,214
57
35
138
15
7
195
60
145
410
Japan
61
11
17
48
25
101
47
45
184
Latin American Republics
18
*
19
*
8:2/ 1021/
12
24
Other developed countries
43
n.a. n.a. n.a.
n.a.
60
--
-18
36
Other less developed countries
95
n.a. n.a. n.a.
n.a.
i7
25
18
86
Int'l institutions and unallocated
':?
......
80
1
3
.-
84
523
170
312
133
\~estern
Europe
Total new issues
461 1,076
*
Less than $500,000.
1/ Preliminary
2/ Not seasonally adjusted.
3/ Includes $75 million issue by Inter-American Development Bank.
Source:
Survey of Current
Busines~
and Department of Commerce
-512
465
1,954
- 3 -
and exchange tenders will receive equal. treatment.
Ca.sh adjustments vill be made
for differences between the par value or maturing bills accepted in exchange
~d
the issue price of the new bills.
The income derived from Treasury bills, whether interest or gain from the S&le
or other disposition of the bills, does not have any exemption, as such, and 1081
trom the sale or other disposition of Treasury bills does not have any special
treatment, as such, under the Internal Revenue Code ot 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 hereaf'ter imposed on the principal or interest
thereof by any state, or any of the possessions of' the United sta.tes, or by any
local taxing authority.
For purposes of taxation the fllIlOunt of' discount a.t which
Treasury bills are originally sold by the United states 1s considered to be interest.
Under Sections 454 (b) and 1221 (5) of' the Internal Revenue Code of 195'
the amount of discount at vhich bills issued hereunder are sold is not considered
to accrue until such bills are sol.d, redeemed or otherwise disposed of', and such
bills are excl.uded from consideration as ca.pital assets.
Accordingly, the owner
of Treasury bills (other than lif"e insurance companies) issued hereunder need include in his income tax return only the dif"ference betveen the price paid for such
bills, whether on original issue or on subsequent purchase, and the amount actuall1
received either upon aa.l.e or redemption at maturity during the taxable year tor
which the return is made, as ordinary gain or lOBS.
Treasury Department Circular No. 418 (current revision) and this notice,
p~
scribe the ter.ms of the Treasury bills and govern the conditions of thelr.188~'
Copies of the circular may be obta.ined 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 Y1U
be supplied by Federal Reserve Banks or Branches ·on application therefor.
Banking institutions generally may submit tenders for account of customen
provided the names of the customers are set forth in such tenders.
others thall
banking institutions will not be peDm1tted to ,submit tenders except for their
own account.
Tenders will be received without deposit from incorpora.ted 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 gua.ra.nty of payment by an incorporated bank or trust company.
Immediately after the closing hour, tenders will be opened at the Federal.
Reserve Eanks and Branches, following which public announcement will be made by
the Treasury Department of the amount and price range of accepted bids.
Those
~e
submitting tenders will be advised of the acceptance or rejection thereof.
'Secreta.ry of the Treasury expressly reserves the right to accept or reject
or all tenders, in Whole or in part, and his action in any such respect
final.
Subject to these
reservations~
$
l~OO or less for the
s~ ~
noncompetitive tenders for $ 200,000 or
less for the additional bills dated May 31, 1963
ing until maturity date on
&rrf
~
tt4X
November 29 z 1963
~
92 days remain-
,(
) and noncompet it i ve tenders for
XlW
l82-day bills without stated price from an.yone
tnt
bidder will be accepted in full at the a.verage price (in three decima.ls) ot
cepted competitive bids for the respective issues.
&e-
Settlement for accepted tea-
ders in accorda.nce with the bids must be made or completed a.t the Federal Reset'll
Banks on
August 29, 1963
4fiJ
, in cash or other immediately available ~~«
in a. like face amount of Treasury bills maturing
August 29, 1963
:tD*
• cash
TREASURY DEPARTMENT
Washington
FOR IMMEDIATE RELEASE,
August 21, 1963
X
TREASURY'S WEEKLY BILL OFFERING
The Treasury Department, by this public notice, invites tenders for tvo eerie.
of Treasury bills to the aggregate amount of' $ 2.,.100,000,000 , or thereabout., tor
xttfJ
cash and in exchange for Trea.sury bills maturing
XPJ
of $ 2'1~01000' as follows:
92 -day bills (to maturity date) to be issued
-}()dl.k~;;'"
in the amount of $
Ij300~0
,in the I1IJUIIt
August 29, 1963
,
August 29, 1963
~
,000 , or thereabouts, represent-
ing an additional amount of' bills dated May 31, 1963
and to mature November 29, 1963
xca4
, originally issued in the
5¢)C
amount of $ 801.000
,the additional and original bills
to be freely interchangeable.
182 -day bills, for $ 800,.00
,or thereabouts, to be dated
}(dGk
August_1963
,and to mature
Februa.ry 27, 1964
~
The bills of both series will be issued on a discount basis under compet1t111
and noncompetitive bidding a.s hereinafter provided, and at maturity their
amount will be payable without interest.
t~e
They will be issued in bearer torm oalti
and in denominations of' $1,000, $5,000, $10,000, $50,000, $100,000, $500,000 u4
$1,000,000 (ma.turity value).
Tenders viII be received at Federal Reserve Banks and Branches up to tile
D3.ylight SaVing
clOSing hour, one-thirty p.m., Ea.ster.ql~ time,
Monday, August 26, 196!.
ffft
Tenders will not be received at the Treasury Department, Washington.
Each
t'-
must be for an even multiple of $1,000, and in the ca.se of competitive tendel'lprice orfered must be expressed on the basis of 100, with not more than
t~
-,
· ')
... .L '-
TREASURY DEPARTMENT
IMMEDIATE RELEASE
Augns t 21,
TREASURY'S WEEKLY BILL OFFERING
The Treasury Department, by this public notice, invites tenders
or two series of Treasury bills to the aggregate amount of
~,100,OOO,OOO, or thereabouts, for cash and in exchange for
'easury bills maturing August 29 1963
in the amount of
~,102,530,000, as follows:
'
,
August 29, 1963,
92 -day bills (to maturity date) to be issued
the amount of $1 300 000,000, or thereabouts, representing an
dltional amount or biils dated May 31, 1963,
and to
ture November 29, 19639riginally issued in the amount of
101,296,000,
the additional and original bills to be freely
terchangeable.
182
-day bills, for $ 800,000,000,
or thereabouts, to be dated
gust 29, 1963, and to mature
February 27, 1964.
The bills of both series will be issued on a discount basis under
~etitive and noncompetitive bidding as hereinafter provided, and at
~urity their face amount will be payable without interest.
They
Ll be issued in bearer form only, and in denominations of $1,000,
,000, $10,000, $50,000, $100,000, $500,000 and $1,000,000
ituri ty value).
Tenders will be received at Federal Reserve Banks and Branches
to the closing hour, one-thirty p.m., Eastern Daylight Saving
le, Monday, August 26,1963.
Tenders will not be
eived at the Treasury De~)artment, Washington. Each tender must
for an even multiple of $1,000, and in the case of competitive
ders the price offered must be expressed on the basis of 100,
h not more than three decimals, e. g., 99.925. Fractions may not
used. It is urged that tenders be made on the printed forms and
warded in the special envelopes which will be supplied by Federal
erve Banks or Branches on application therefor.
Banking institutions generally may submit tenders for account of
tomers provided the names of the customers are set forth in such
iers. Others than banking institutions will not be permitted to
nit tenders except for their own account. Tenders will be received
lout deposit from incorporated banks and trust companies and from
bonsible and recognized dealers 1n investment securities. Tenders
11 others must be accompanied by payment of 2 percent of the face.
lnt of Treasury bills applied for, unless the tenders are
>mpanied by an express guaranty of payment by an incorporated bank
rust company.
- 2 -
Immediately after the closing hou~, tenders will be opened at
the Federal Reserve Banks and Branches, following which publlc
announcement will be made by the Treasury Departmment of the amount
and price range of accepted blds. Those submitting tenders will be
advised of the acceptance or rejection thereof. The Secretary of
the Treasury expressly reserves the right to accept o~ ~eject any or
all tenders, 1n whole or in part, and his action in any such respect
shall be final. Subject to these reservations, noncompetitive
tenders for $200,0000r less for the additional bills dated
May 31 1963
(92 days remaining until maturit~ date on
Novemb~r 29,' 1963) and noncompetitive tenders for ~ 100 ,000
or less for the 182 -day bIlls without stated price from anyone
bidder will be accepted in full at the average price (1n 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 29, 1963,
in cash or other immediately available funds or in a llke faoe
amount of Treasury bills maturing August 29, 1963. Cash and
exchange tenders will receive equal treatment. Cash adjustments
will be made for differences between the par value of maturing
billa accepted in exchange and the issue price of the new b1lls.
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 lOBS 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, 1nheritance, 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 tax1ng 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 iSBued
hereunder are sold is not considered to accrue until such b1lla a~
sold, redeemed or otherwise disposed of J 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 1n 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 durjng the taxable year for which the
return 1s made, as ordinary gain or loss.
Treasury Department Circular No. 418 (current revision) and th1S
notice prescribe the terms of the Treasury bills and govern the
conditions of their issue. Copies of the circular may be obta1nedr~
any Federal Reserve Bank or Branch.
000
11"-'
TREASURY DEPARTMENT
=
August 20. 196)
ADVANCE FOR A.M. NEWSPAPERS OF THURSDAY, AUGUST 22, 1963
NOTE TO CORRESPONDENTS:
The attached tables show the income tax cuts which
individual~
would receive as a result of the tax reductions approved by the
House Ways and Means Committee.
There are 15 tables in all.
Eleven of them show th'e tax
reductions for married taxpayers taking the standard deduction
or itemizing deductions, with up to five dependents.
One shows
the tax reduction for single persons taking the standard deduction.
rhree show the tax reduction for taxpayers over age 65.
The
tables compare the lower proposed taxes with present taxes at
larious income levels and show the dollar and percentage tax
:-eduction.
The tables deal only with income from wages and salaries.
They do not include income from stocks and bonds; the sale of
securities, real estate, and other capital assets; or other
ources.
The figures shown in the tables take account of the
ommittee's proposal to disallow deductions for certain State
and local excise taxes, such as those on alcohol, tobacco,
asoline, and some other items.
- 2 -
The tables also reflect the effect of the minimum standard
deduction where applicable.
This new provision which the
Committee approved would allow a taxpayer a standard deduction
of at least $300 for himself, an additional $100 for a spouse
and for each dependent, and another $100 for
blind or over 65.
h~self
if he is
The present standard deduction is 10 percent
of a person's income (technically, adjusted gross income) for
those whose incomes are $10,000 or less.
deduction would
supplem~nt
The minimum standard
the present standard deduction by
providing a minimum amount for use by the taxpayer whenever it
exceeds 10 percent of his income.
It would
E££
affect the $600
exemption allowed every taxpayer for himself, spouse, and each
dependent or the additional $600 exemption allowed a person'who
is blind or over 65.
'fable I
Single Taxpayer,
with Standard Deductions
Income
(Wages & salaries)
$ 1)000
1,500
2,000
3,000
4,000
5,000
6,000
7,500
10,000
12 .. 500
15 .. 000
17,500
20,000
Present Tax
$
60
150
240
422
620
818
1,048
1,405
2,096
2,982
4,002
5,153
6,412
New
Tax
1485
161
329
500
671
866
1,168
1 .. 742
2,418
3,334
4,291
5;350
$
Office of the Secretary of the Treasury
Office of Tax Analysis
Tax Cut
$
46
65
79
93
120
147
182
237
354504668
862
1,062
~
Tax Cut
11;'
43
33
22
19
18
17
17
17
17
17
17
17
TABLE II
Married Couple with No Dependents
with Standard Deduction
Income
Present Tax
(Wage. & Salaries)
$ 1,000
1,500
2,000
3,000
4,000
5,000
6,000
7,500
10,000
12,500
15,000
17,500
20,000
$
New Tax
°
30
°0
120
300
480
660
844
1,141
1,636
2,278
2,960
3,710
4,532
56
200
354
501
658
915
1,342
1,886
2,460
3,085
3,764
Office of the Secretary of the Treasury
Office of Tax Analysis
Tax Cut
0
$ 30
64
100
126
159
186
226
294
392
500
625
768
"
Tax Cut
0%
10C
53
33
26
24
22
20
18
17
17
17
17
TABLE I I I
Married Couple With One Dependent,
With Standard Deduction
Income
(Wages & Salaries)
$ 1,000
1,500
2,000
3,000
4,000
5,000
6,000
7,500
10,000
12,500
l,5,000
17,500
20,000
Present Tax
New Tax
()
0
0
0
0
0
$ 180
360
540
720
1,009
1,501..
2,122
2,780
3,530
4,328
$
98
245
402
552
800
1,228
1,754
2,310
2,935
3,596
Office of the Secretary of the Treasury
Office of Tax Analysis
Tax Cut
$ 82
115
138
168
209
276
368
470
595
732
i
Tax Cut
46i
32
26
23
21
18
17
17
17
17
TABLE IV
Married Couple with Two Dependents,
with Standard Deductions
Income
Present Tax
New Tax
Tax Cut
~ Tax Cut
(Wages & salaries)
$ 1,000
1,500
2,000
3,000
4,000
5,000
6,000
7,500
10,000
12,500
15,000
11,500
20,000
$
0
0
0
0
0
0
60
0
240
420
600
$ 140
877
1,372
1,966
2,616
3,350
4,124
Office of the Secretary of the Treasury
Office of Tax Analysis
290
450
686
1,114
1,622
2,172
2,785
3,428
$
--
-----
60
l~
100
130
150
191
42
258
344
444
565
696
31
25
22
19
17
17
17
17
--
TABLE V
Married Couple wlth 3 Dependents,
with Standard neductton
Present tax
Income
New Tax
Tax Cut
(Wages and Salarles)
$ 1,000
1,500
2,000
3,000
4,000
5,000
6,000
7,500
0
°
°
120
0
$
300
15,000
480
750
1,240
1,810
2,460
17,500
20,000
3,170
3,920
10,000
12,500
i
Tax Cut
0
0
0
0
42
$
185
338
578
1,000
1,490
2,040
2,635
3,260
Office of the Secretary of the lrreasury
Office of Tax Analysis
--$
78
115
142
172
240
65%
38
30
23
19
320
18
420
535
660
17
17
17
TABLE VI
Married Couple With Four Dependents
With Standard Deduction
Income
(WageB & SalarieB)
$ 1,000
1,500
2,000
3,000
4,000
5,000
6,000
1,500
10,000
12,5 00
15,000
17,500
20,000
Of~io~ q~
Of~1ce
Present Tax
0
0
0
0
0
$ 180
360
630
1,108
1,658
2,304
2,990
New Tax
$
3,740
the Secretary of the
of Tax Analysis
Tr.ea~ury
98
245
476
886
1,361
1,908
2,485
3,110
Tax Cut
$ 82
~ Tax Cut
--
46~
115
154
222
24
297
18
396
17
17
17
505
630
32
20
~LE
VII
Married Couple With No Dependents,
With Typical Average Itemized Deductions
Income
(Wages &Salaries)
5,000
6,000
1,500
10,000
12,500
15,000
11,500
20,000
25,000
30,000
40,000
50,000
75,000
100,000
Present Tax
New Tax
$
$
540
696
976
1,460
1,972
2,525
3,133
3,770
5,229
6,886
10,775
15,248
25,696
37,548
Office of the Secretary of the Treasury
Office of Tax Analysi s
410
540
799
1,218
1,664
2,1 29
2, 64 3
3,175
4,401
5,818
9,104
12,945
22,035
32,138
Tax Cut
:$
:t.30
156
177
242
308
396
490
595
828
1,068
1,671
2,303
3,661
',410
~ Tax Cut
24%
22
18
17
16
16
16
16
16
16
16
15
14
14
TABLE VIII
Married Couple With One Dependent,
With Typical Average Itemized DeductionS
Income
(Wages & Salaries)
$ 5,000
6,000
7,500
10,000
12,500
15,000
17,500
20,000
25,000
30,000
40,000
50,000
75,000
100,000
Present Tax
$
42'0
5'(6
81114
1,3?8
1,816
2,3E9
2,952
3,590
5,025
6,648
10,475
14 J91~?
25,324
37,134
Tax
314
439
685
1,104
1,532
1,99'(
2,493
3,02 5
4,231
5,608
8,852
12,657
21,117
$ 106
137
159
224
284
372
459
$
Office of the Secretary of the Trea.sury
Office of Tax AnalysiB
Cut
New Tax
~1,190
565
794
1,040
1,623
2,255
3,601
5, 34~
i
Tax Cut
25i
24
19
11
16
16
IE
16
16
16
15
15
14
14
TABLE IX
Married Couple with Two Dependents,
with Typical Average Itemized Deductions
Income
Present Tax
NeW' Tax
Tax Cut
i
Tax Cut
ages & salaries)
$ 5,000
6,000
7,500
10,000
12,500
15,000
17,500
20,000
25,000
30,000
40,000
50,000
75,000
100,000
300
$
456
720
1,196
1,664
2,213
2,712
3,410
4,821
6,,420
WI,
U3H
14.,576
24.,,952
36,120
fice of the Secretary of the TreasUI'l';'
Office of Tax Analysis
$ 223
343
576
994
1,400
1,865
2,343
2.875
4,063
5,416
8,60 5
12,369
21,399
31,442
4> 77
113
144
202
264
348
429
535
758
1,004
1,583
2,207
3,553
5,278
26;'
25
20
17
16
16
16
16
16
16
16
15
14
14
'l'ADLE X
Married Couple with Three Dependents,
with Typical Average Itemized Deductions
Income
(Wages & salaries)
$ 5,000
6,000
7,500
10,000
12,500
15,000
17,500
20,000
25,000
30,000
40,000
50,000
75,000
100,000
Present Tex
$
180
336
600
1,064
1,53 1
2,057
2,610
3,230
4,617
6,192
9,906
14,255
24,580
36,330
Office of the Secretary of the Treasury
Office of Tax Analysis
NeW' Tax
$
133
250
474
876
1,283
1,733
2,201
2,725
3,895
5,224
8,371
12,085
21,081
31,094
Tax Cut
$ 47
86
126
188
248
32~
409
505
722
968
1,535
2,170
3,49.9
5,23b
i
Tax Cut
'C6~
26
21
18
16
16
16
16
16
16
15
15
14
14
TABLE XI
Married Couple With Four Dependents
With Typical Average Itemized Deductions
Income
(Wages & Salaries)
$ 5,000
6,000
7,500
10,000
12,500
15,000
17,500
20,000
25,000
30,000
40,000
50,000
75,000
100,000
Present Tax
$
60
216
480
932
1,400
1,901
2,454
3,050
4,413
5,9 64
9,625
13,937
24,208
35,940
fice of the Secretary of the Treasury
Office of Tax Analysis
New Tax
$
49
161
376
763
1,169
1,601
2,069
2,575
3,727
5,032
8,137
11,815
20,763
30,760
Tax Cut
$
11
55
104
169
231
300
385
475
686
932
1,488
2,122
3,445
5,180
%Tax
Cllt
l~
25
22
18
l'r
16
16
16
16
16
15
15
14
14
TABLE XII
Married Couple With Five Dependents,
With Typical Average Itemized Deductions
Income
(Wages & Salaries)
$ 5,000
6,000
1,500
10,000
12,500
15,000
11,500
20,000
25,000
30,000
40,000
50,000
75,000
100,000
New Tax
Present Tax
96
360
&)0
1,2G8
1,145
2,298
2,870
4,209
5,136
9,342
13,619
23,836
35,550
Office of the Secretary of the Treasury
Office of Tax Analysis
Cut
;, Tax Cut
0
0
:I>
Tax
$
14
281
648
1,055
1,469
1,931
2, 42 5
3,559
4,840
1,903
11,545
20,445
30,430
$
22
19
152
213
216
361
445
650
896
1,439
2,074
3,391
5,120
23~
22
19
17
16
16
16
15
15
15
15
14
14
TABLE XIII
Single Tllxpayer over 65,
With Standard Deduction
Income
(Wages & salaries)
$ 1,000
1,500
2,000
3,000
4,000
5,000
6,000
7,500
10,000
Present Tax
$
NelN Tax
0
0
30
0
120
300
48f5
686
89~~
1,243
1,900
28
$
209
386
Tax Cut
$ 30
92
91
100
102
21
19
557
129
734
1,031
1,580
158
212
320
Office of the Secretary of the Treasury
Office of Tax Analysis
~ Tax Cut
17
30
18
17
17
TABLE XIV
Married Couple, Both OVer 65,
with Standard Deduct10n
Income
(Wages & salaries)
Present Tax
$ 1,000
1,500
2,000
3,000
4,000
5,000
6,000
7,500
10,000
0
0
$
0
60
Tax Cut
0
0
0
0
$ 60
100
100
42
130
150
191
31
240
420
$ 140
600
1~50
811
1,312
686
1,114
Office of the Secretary of the Treasury
Office of Tax Analysis
~ Tax Cut
NeW' Tax
290
258
25
22
19
-
TABL~
xv
Married Couple, Both OVer 65,
with Typical Average Itemized Deductions
Income
lWages & salaries)
$ 1,000
1,500
2,000
3,000
4,000
5,000
6,000
7,500
10,000
Present Tax
$
New Tax
0
0
0
0
0
0
0
0
144
$108
223
343
300
456
120
1,196
Office of the Secretary of the Treasury
Office of Tax Analysis
Tax Cut
$ 36
77
113
cJ,
Tax Cut
25
26
25
576
144
20
990
206
11
TREASURY DEPARTMENT
August 23, 1963
CORRECTION
The following corrections are made on Treasury Release D-948,
dated August 20, 1963. This release was a series of 15 tables
showing the income tax cuts which individuals would receive as a
result of the tax reductions approved by the House Ways and Means
Committee.
TABLE VI
Married Couple With Four Dependents
With Standard Deduction
Income
(Wages & Salaries)
Present Tax
$ 5,000
$ 180
6,000
7,500
360
630
New Tax
$
84
230
467
Tax Cut
$
96
130
163
10
Tax Cut
53%
36
26
TABLE XII I
Single Taxpayer over 65
With Standard Deduction
Income
Present Tax
(Wages & Salaries)
$ 2,000
$ 120
New Tax
$
56
Tax Cut
$
64
Ie Tax Cut
,',
1 ,:
~J
'
TREASURY DEPARTMENT
-*
August 23, 1963
CORREcrION
The following corrections are made on Treasury Release D-948,
dated August 20, 1963. This release was a series of 15 tables
showing the income tax cuts which individuals would receive as a
result of the tax reductions approved by the House Ways and Means
Committee.
fABLE VI
Married Couple With Four Dependents
With Standard Deduction
Income
wages & Salaries)
Present Tax
$ 5,000
6,000
$ 180
360
7,500
630
New Tax
$
84
Tax Cut
$
230
467
96
130
163
% Tax Cut
53%
36
26
ABLE XIII
Single Taxpayer over 65
With Standard Deduction
Income
Present Tax
wages & Salaries)
$ 2,000
$ 120
New Tax
$
56
Tax Cut
$
64
% Tax Cut
53'10
- 3 -
124
CX1lilPl:.
('rom all tnxo:Llon novr or hereafter imposed on the principal or interent
thereof by any state, or any of the possessions o:f the United States, or by nny
locl1l to...'CinG nuthorl ty.
For purposes of taxation the amoWlt of discount at 1t'hiclJ
'l'rensury Dills nrc oriGinally sold by the United states is considered to be intel'll
Under SccLlonr: 1!')~; (b) Dnd 1221 (5) of the Internal TIcvenuc Code of 1954 the ~
of cUSCOtUlt D.t which bills issued hereunder nre sold is not considered to nccrue
until such bi1lc are cold, redeemed or othenrise disposed of, end such bills are
e;cclucled fr(liil conGidcrution as capi tal 3,scctS.
AccordinGly, the owner of Tre8.SUJ1
bill::; (other thnn life insurance compo.ntcG) issued hereunder need include in his.
come
t.fl.X
return on]J' the difference bctvccn the price paid for such bills) ,meLher
on oric; tnn'.
upon sale
Ilmdc,
[1."
j.fJ:;llC
01'
or on subsequcnt J>urchase, and the amount actually received eitll
redclilption at maturity durinG the taxable year for which the return ~
orc1lnm:,T Lain or 101,s.
IJlrC:LGU1,Y J)cl);l.rLJl1cnt
scrihc the
tCJ'lII;J
CopieG of the
of the
Circular No. 418 (current revision) and this notice,
Tre~.StU7
(~irculnr JnDy
pre
b:i.llD and Govern the conditions of their issue.
be' ol>tnincd from any Federal Reserve Bank or Branch.
- 2 -
Treasury bills applied £or, unless the tenders are accompanied by an express
l.ranty of payment by an incorporated bank or trust company.
All bidders are required to agree not to purchase or to sell, or to make any
'eements with respect to the p~~chase or sale or other disposition of any bills
at a specific rate or price,
Daylight Saving
this issuel until after one-thirty p.m., Eastern/~ time, Tuesday,
~
~~_8t~Z~7~,_19~6~3_________ •
Immediately after the closing hour, tenders will be opened at the Federal Reve Banks and Branches, follow"ing 1-rhicb public announcement will be made by the
asury Department of the amount and price range of accepted bids.
g tenders will be advised of the acceptance or rejection thereof.
the Treasury
eA~rcssly
Those submitThe Secretary
reserves the right to accept or reject any or all
whole or in part, and his action in any such respect shall be final.
3e reservations, noncompetitive tenders for $
~e
from any one bidder will be accepted in
mals) of accepted competitive bids.
2~O
fU~l
tenders~
Subject to
or less without stated
at the average price (in three
Payment of accepted tenders at the prices
red must be made or completed at the Federal Reserve Bank in cash or other im-
The income derived from Treasury bills, whether interest or gain from the sale
~her
disposition of the bills, does not have any exemption, as such, and loss
the sale or other disposition of Treasury bills does not have any special treatas such, under the Internal Revenue Code of 1954.
The bills are subject to
;e, inheritance, gift or other excise taxes, whether Federal or state, but are
THFJ\,SUJ 'Cl D:li:rAH'J'l iBIrr
iTnGhj,l1~ton
August ~lt 196~
mEASURY OFFERS $1 BILLION ONE-YEAR BILLS
'rho Tl'ce::;nry Dcp8rtmcnt, 1.>;1 th:i,c pu111ic notice" inviLee tend.ers for 4~
or Lhcl'Col)Quts, of'
-dr-:'y TrCD,GUry b111G, to be iGrmeo. on a discotmt b(!.:;is
363
\IJI
5(ii9C
COlI1.)cti i".ivc r...l'lc1 noncompcti tl v~ biddinG 0.:,
~Cl·,i.C:' tTil)' be dated
September 3, 1.963
--~---~~~--------
:i'o 1',> onl~r, <:'J1(1 in dcnor,Li.n~:V,on3 of
1~cndc:'::3
viII be
hCl·einn.~ter
::a, 000,
provided.
The billa of this
, end lrill ll1::'.turc
August
lIM
~l,
ii&i
:;i50, 000, :;ilOO, 000,
:/,5,000) :;>10 J 000,
n~(;c.i, 'll:U ~l,t }'c(lcl'~',l r:';;3Cl 'YC nr\nl;'~3
Lnd
B:l'~)JIChcG
up to the
~OO
clo~j
Dayl1ght Saving
lLo1..1:,', Ol1c-~hil'"L,:r
1).1"1.,
E[l,:::;tc~'n/~
U.J1C,
Tuesday, . s t 271 1963
,rill not be received <:,.t thc 'l're3GUry Depnl'tmcnt, Uo.shincton.
n.n cy,':m J.ruJ.tlple of :;il,OOO, ana in the
CQC;C
B:..':-JIChes on
eI>l)l:i.cc,t:~on
Each tender nrust be ~
0:1 cO;iQ')etJ.c:tve tender::; the :price offcra1
-,n,-=-J.:, be c;:pl'cGued on the U:],r.;:i.3 oj.' :cOO, ,rl-ch not
F;.'r.c ~~.i.on8 Ll~r not be UGcu.
. T~
]'1.01·C
thon three dccir.l0.1G, e.
It :i.:J tU'Ced thc.. t te:nrJ.cr:: be
lnnc1c
on the printed
e'l
i
i'o~j
a
therefor.
DcllJ~inG in::;t.ltut.ion0 C/.2ne::,,'c,.ll-:,r
1.1[',:/
~111J1;[i.t tena.CI'C ~'Ol' account of customers pIt
institutions \~i.].l not be pCl'-nittec1;~o ~~ubJlit -l;cnC:.2rc; c;~cc.pt for their m-m accQlDlt·
Tenders ,r1.11 be l'cccivcc1 lrlthout dcpo:-..:.Lt i"rom illcorporated bDnl~Z ond truGt compau1l
ond
:L'rOi.l
J:eGponsi1Jlc Mel recocnized deolcl'c in inv0!stmcnt securities.
o'l,hcrs nm::;t be c.ccor'll)E'niecl b:-
J!L',~j.1cn'::'
o:i: 2
PC1'CCITl;
of the face amount
Tenders tlfJ
TREASURY DEPARTMENT
-
R IMMEDIATE RELEASE
TREASURY OFFERS $1 BILLION ONE-YEAR BILLS
The Treasury Department, by this public notice, i.nvites tenders
$1,000,000,000, or thereabouts, of 363-day Treasury bills, to be
sued on a discount basis under competitive and noncompetitive
lding as hereinafter provided.
The bills of this series will be
:ed September 3, 1963, and will mature August 31, 1964, when the
e amount will be payable without interest.
They will be issued in
rer form only, and in denominations of $1,000, $5,000, $10,000,
,000, $100,000, $500,000 and $1,000,000 (maturity value).
Tenders will be received at Federal Reserve Banks and Branches
to the closing hour, one-thirty p.m., Eastern Daylight Saving
me, Tuesday, August 27, 1963.
Tenders will not be received at
e Treasury Department, Washington.
Each tender must be for an
en multiple of $1,000, and in the case of competitive tenders the
ice offered must be expressed on the basis of 100, with not more
an three decimals, e.g., 99.925.
Fractions may not be used.
otwithstanding the fact that these bills will run for 366-days,
e discount rate will be computed on a bank discount basis of 360
ys, as is currently the prac tice on all issues of Treasury bills.)
is urged that tenders be made on the printed forms and forwarded
the special envelopes which will be supplied by Federal Reserve
n,ks or Branches on applica tion therefor.
Banking institutions generally may submit tenders for account of
,tamers provided the names of the customers are set forth in such
lders. Others than banking institutions will not be permitted to
~it tenders except for their mnl account.
Tenders will be received
hout deposit from incorporated banks and trust companies and from
ponsible and recognized dealers in investment securities.
Tenders
1m others mus t be accompanied by payrner: t of 2 percen t of the face
unt of Treasury bills applied for, unless the tenders are accompanied
an express guaranty of payment by an incorporated bank or trust
pany.
~9
- 2 All biddc:rs .c1re required [ 0 agree not to purchase or to sell, or
to nl.1ke allY agn:clPencs ,.,lith respect to the purchase or sale or other
disposition of ,::my bills of this issue Bt.a sp~ci~ic r~te or price,
until nfter one-thirty p.m., Eastern Dayllght Savlng tlme, Tuesday,
Augu s t 27, 1963.
Immediately after the closing hour, tenders will be opened at the
Federal Reserve' Banks and Branches, following which public announcemen
will be made by the Treasury Department of the amount and price range
of 2ccepted bids.
Those submitting tenders will be advised of the
acceptance or rejection thereof.
The Secretary of the Treasury ~pu.
ly reserves the right to accept or reject any or all tenders, in whole
or in part, and his ac t ion in any such respec t shall be final. Subjed
to these reservations, noncompetitive tenders for $200,000 or less
without stated price from anyone bidder will be accepted in full at
the average price (in three decimals) of accepted competitive bids.
Payment of accepted tenders at the prices offered must be made or
completed at the Federal Reserve Bank in cash or other immediately
available funds on September 3, 1963.
The incom~ derived from Treasury bills, whether interest or ga~
from the sale or other disposition of the bills, does not have a~
exemption, as such, and loss from the sale or other disposition of
Treasury bills does not have any special treatment, as such, under thct
Internal Revenue Code of 1954.
The bills are subject to estate,
inheritance, gift or other excise taxes, whether Federal or Sta~, ~a
are exempt from all taxation now or hereafter imposed on the principal
or interest thereof by any State, or any of the possessions of ilie
United States, or by any local taxing authority.
For purposes of
taxation the amount of discount at which Treasury bills are originall,
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 nol
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 an original issue or on subsequent purchase, and the amount
actually received either upon sale or redemption at maturity during ~
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 terBts of the Treasury bills and govern the coo'
ditions of their issue.
Copies of the circular may be obtained fred
any Federal Reserve Bank ~r Branch.
TREASURY DEPARTMENT
August 21, 1963
FOR RELEASE AFTER 4:00 P.M.
TREASURY OFFERS $1 BILLION OF ONE-YEAR BILLS
The Treasury Department today announced the introduction
of a new pattern of Treasury bill issues.
Its one-year
Treasury bills will henceforth be offered on a monthly basis,
rather than quarterly.
The first of the new series will be
offered in the amount of $1 billion, to be auctioned on Tues~y,
August 27, for payment on Tuesday, September 3.
It will mature
on August 31, 1964.
The amounts of each subsequent issue are expected to be
in the general magnitude of $1 billion, rather than the
magnitudes of $2.0-$2.5 billion that have been used in the
quarterly issues of similar bills.
On July 15, 1963, the Treasury announced that it was
giving consideration to the establishment of monthly auctions
of one-year Treasury bills, in the interest of a more orderly
scheduling of its short-term maturities, and requested comments
on the proposal from members of the financial community and other
interested parties.
On the basis of the many responses receb~
from the public and its own studies, the Treasury concluded tMt
a program of monthly auctions of one-year bills was not only
feasible but also likely to meet a market need which is not
currently being adequately met by other short-term money market
instruments.
The Treasury does not undertake, by this action, necessarily
to auction a one-year bill every month, nor is it committed to
the $1 billion amount, but a pattern of this sort is likely to
develop as opportunities continue to arise to replace the outstanding quarterly issues with those issued monthly.
000
D-950
TREASURY DEPARTMENT
August 21, 1963
FOR RELEASE AFTER 4:00 P.M.
TREASURY OFFERS $1 BILLION OF ONE-YEAR BILLS
The Treasury Department today announced the introduction
of a new pattern of Treasury bill issues.
Its one-year
Treasury bills will henceforth be offered on a monthly basis,
rather than quarterly.
The first of the new series will be
offered in the amount of $1 billion, to be auctioned on Tuesday,
August 27, for payment on Tuesday, September 3.
It will mature
on August 31, 1964.
The amounts of each subsequent issue are expected to be
in the general magnitude of $1 billion, rather than the
magnitudes of $2.0-$2.5 billion that have been used in the
quarterly issues of similar bills.
On July 15, 1963, the Treasury announced that it was
giving consideration to the establishment of monthly auctions
of one-year Treasury bills, in the interest of a more orderly
scheduling of its short-term maturities, and requested comments
on the proposal from members of the financial community and other
interested parties.
On the basis of the many responses received
from the public and its own studies, the Treasury concluded that
a program of monthly aucti.ons of one-year bills was not only
feasible but also likely to meet a market need which is not
currently being adequately met by other short-term money market
instruments.
The Treasury does not undertake, by this action, necessarily
to auction a one-year bill every month, nor is it committed to
the $1 billion amount, but a pattern of this sort is likely to
develop as opportunities continue to arise to replace the outstanding quarterly issues with those issued monthly.
000
-950
- 3 -
_
'; 0
/;/':,Y-!#;"r'
.
with the strict exclusion of all
religious, or racial character.
~"
FSE
having a political,
~ 1{"\ •
, r""'-"
I
'
..
-
L
-
,
A'~ atterlding the Helsinki conference a~
,I
U
·r
...
----_.
/1
ubserv~~
are:
Frank A. Bartirno, Assistant
Departm2nt of D2fens~) ~
Gen~ral
Counsel (Manpower)
Norman Phi lcox, Legal At tache, American Embas sy, Paris) Franq
Byron Engle,
for International
Director, Office of Public
Development~
~P4~'!~'~
.ii!!!lllf!'M~:( i::galyn
Safet~Agency
is
-:en~~~
;ic'e
ip~e:i:ient
of its nine-man executive committee.
of Interpol"
a member
He was elected to a
three year term at Interpol's General Assembly in Madrid last
year and holds this office as a representatives of the Western
Hemisphere.
The President of Interpol is Mr. R. L. Jackson,
Assistant Commissioner, C.loD., Scotland Yard.
There are
87 member nations in the organization.
"i\
The purposeS of Interpol ,b;:tto insure and promote mutual
assistance between ~ criminal police authorities within the
-;.)
limits of the laws existing in the different states, and to~d
tmvard efficient repression of cOTIIDlon-law crimes Rnd offensej
=$!S2!--1
T~'frllewiftg--l'r.e.a&l-ry·
(.-'7..-4 --
.,~II<S
~p re-sentiug...J:i:w.j1 ~_T -, .
Assembly of the
,-,·,·t •.. i
~~~
Law Enforcement officials ~
I
..
j
t()
.,
International Criminal Police Organization
j'?V ,_,.( '-
t
~
J
.... '.
{ ( (•• . ;
'.
61.!ck.
(Interpol) wi£teh S'taree:d:::A{lgIIst 21: and
/\
c ~
~"FE??e'"'~ Helsinki, Finland*
'/.
JA..;U..
..9'
..
Uili-~--A-rnold
t
t' f
.'.
()~
".
,,*.J.
cOlltittdE54H[talQ8A
~~.~.~,
'--r-t
.1
~1"t-~~.-
•
Direc:torl'\~w
..."
i.. ~i;li.:;;f ~
___
i-L~""~ ~'"'
1-;:,'''''6--.
OlLiE
Sagalyn,
Coordination ~~. .f~~
,rf. (', J":,
the 32nd General
delegates _
'jeT'
t
~"
Enforcement
ft..,I'Jt-V:..44'I'~"-~?
a:u...
~~~J---- ~f~ 14- j~./ /~.~ ~ ~/ r~ w.t-
Henry L. Giordano, Commissioner, Bureau of
Narcotic~
Lester D. Johnson, Deputy Commissioner, Bureau of
Customs
H. Alan Long, Director, Intelligence Division, Internal
Revenue Service
Paul J. Paterni, Deputy Chief,
u.
S. Secret
Service~
The Honorable Joseph D. Tydings, United States Attorney,
~s
Baltimore, Maryland, ad ii: also . . serving as a United States
delegate to the Interpol conference, and is attending as tM
personal representative of Attorney General Robert F. Kennedy.
13/
TREASURY DEPARTMENT
August 22, 1963
FOR IMMEDIATE RELEASE
LAW ENFORCEMENT OFFICERS REPRESENT UNITED STATES
AT INTERPOL ASSEMBLY
Six Government law enforcement officials are se.rving as United
tates delegates to the 32nd General Assembly of the International
riminal Police Organization (Interpol), meeting this week in
elsinki, Finland, the 1~easury Department announced today.
The Treasury Depar.tment is the U. S. Government agency
signated as Interpoll s representative in this country.
Arnold Sagalyn, Director of Law Enforcement Coordination for
l€ Treasury is chairman of the delegation.
Other Treasury officials
rving as members are:
Henry L. Giordano, Commissioner, Bureau of
rcotics; Lps ter D. Johnson, Deputy Commissioner, Bureau of
stoms; H. Alan Long, Director, Intelligence Division, Internal
venue Service; Paul J. Paterni, Deputy Chief, U. S. Secret Service.
The Honorable Joseph D. Tydings, United States Attorney,
ltimore, Maryland, is also serving as a United States delegate to
e Interpol conference, and is attending as the personal
presentative of Attorney General Robert F. Kennedy.
Official United States observers attending the Helsinki Conference
~:
Frank A. Bartimo, Assistant General Counsel (Manpower)
)artment of Defense; Norman Philcox, Legal Attache, American Embassy,
is, France; Byron Engle, Director, Office of Public Safety, Agency
International Development.
Mr. Sagalyn is senior Vice President of Interpol, a member
its nine-man executive cornmit:tee. He was elected to a three year
m at Interpol's General Assembly in Madrid last year and holds
s office as a representative of the Western Hemisphere.
President of Interpol is Mr. R. L. Jackson, Assistant Commissioner,
.D., Scotland Yard.
There are 87 member nations in the
anization.
The purposes of Interpol are to insure and promote mutual
istance between criminal police authorities, within the limits of
laws existing in the different states, and to work toward efficient
ession of common law crimes and offenses, with the strict exclusion
~ll matters having a political, religious, or racial character.
)1
000
TREASURY DEPARTMENT
FOR JJ.'Jl'.1EDIATE RELEASE
WITHHOLDING APPRAISEMENT ON
CAST ACRYLIC PLASTIC SHEET, "pERSPEX"
The Treasury Department is instructing custOffiE field officers
to wi thhold appraisement of cast acrylic plastic sheet, 'Iperspex,
II
from the United Kingdom 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
Slates 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 May 10, 1963, and ws
made by the firm Cast OPtics Corporation.
re~ei ved
Tne dollar value of
~o~s
during the first 6 months of 1963 was approximately $197,000.
000
TREASURY DEPARTMENT
FOR IMMEDIATE RELEASE
WITHHOLDING APPRAISEMENT ON
CAS'r ACRYLIC PLASTIC SHEh"'T, "PERSPgX"
The Treasury Department is instructing customs field officers
to lrithhold apprail3ement of cast acrylic plastic sheet, IIPerspex,11
from the United Kingdom 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 Ant1.duruping Act, determination of sales in the United
States at less than fnir value would require
rel'~rence
of the case
to the Tariff' Conunission, which would consider whether American industry was being injured.
to justify a finding of
Both dumping price and injury must be uhown
dWl~ping
under the law.
The' complaint in this caEie was received on May 10, 1963, and
made by the firm Cast Optics Corporation.
waD
The dollar value of lu11JOrtl:l
recei ved during the first 6 months of 1963 was approxiruately $19'(,000.
000
tarAt ttNDKRS lPPLnD 'OR AID iCCBPTKD BI PIDI&t.L RUlRrI DISfIlCII,
~
...
... toft
JIM J edIt1pb1a
!R21Sed
$
~
39,Sl4,ooo
1,'~"OS7,OCrJ
)0,0)5,000
A!!!f!!d
•
I
_
•
lh.uS,ocx> •
86k,S12.000'
15,03S:; OJO •
CleM1_
1l,157,OOO'" )1,lS7,OOO •
11.....
A\l.Mta
21,17b.,CXlO
Qh1eaco
,....1.. ct.
". t-i.
Mi- •• po118
0.1
a. ,. Ad..
!ow.
~
Y
2S,Slh,ooo
16,7~,OOO.
21,609,000
J
2)6.31).000
1)2,)2),000 I
)0,050,000
2),62S,ooo.
21,467,000
16,067,000.
29,)8e,OOO
2),,)8,000 ••
27,)01,000
17,)01,000.
132,822,000. lr)',~J.OlO I
:!!1,)OO,lS9,OOO!l ~_~ ~ I ',9."
Includ~8 ~219,9)O,())() nonc~tltiY. \adere ~ ., \be ~ p~ Ii!
Jncluda8n~t' ,l6tS,<xx> nO!\OOllpetltl.e teacMn aoeepMd ., U. ~ t)r1~ €t "I
')n a O)\l!~ iaaue of the 88M leqth and t .. tba . . . _ I l . ' ~tl tb3 ....:1
these ~\iU. would provide yielda of l.48~, tor the 92.., M~l.o ~ JoMSo •
182-cSay bille. InteJ"fJ.t r41.t.ea on bill. an quoMd 1n , _ ., ~ (~
t.he return related to the race ~ of the bUle pqab1.e . . ~~1 ~ I
the atftOWlt 1nv...ted and their 1~ in . .tal .Rt.r of __ ~~ t® o. ~:
year. In contl'Ut., yield8 on Mrtitictltaa, oot..a, aDd lM8. . . . ~~ Ml/!:)
at i.nteres\ on the aIIlOUDt. invested, .,.,tJ hlate tal DWI~ II ~ ~~ ,
1nt,er;~.t. ~nt pe 'c-..cl too the eotua11 ., . . ~ . . 1ft VIe ~(Vi~~
annul 00IIIp0Undi1l~ if JIOZ"e than'.. . . . _ ,.nod la i.aQlWlAo
$2,173,875,000
I
TREASURY DEPARTMENT
=
RELEASE A. M. NEWSPAPERS,
,day, August 27, 1963.
RESULTS OF TREASURY'S WEEKLY BILL OFFERINQ
The Treasur.y Department announced last evening that the tenders for two series ot
sury bills, one series to be an additional issue or the bUl.s dated May .31, 1963,
the other series to be dated August 29, 1963, which were offered on August 21, were
ed at the Federal Reserve Banks on August 26. Tenders were invited ~or $1,300,000,000,
hereabouts, ot 92-day bills and for $800,OOO~OOO, or thereabouts, ot 182-day bills.
details of the two series are as follows:
~ OF ACCEPrED
92-day Treasury bills
182-day Treasury bills
e:TITlVE BIDS:
maturing November 29, 1963
:
maturing February 27, 1964
Approx. Equiv. :
Approx.. Equiv.
Price
Annual Rate
:
Price
Annual Rate
High
99.134 ij
3.389%
:
98.236 ij
3.489~~
Low
99.130
3.404%
:
98.231
.3.499%
Average
99.132
3.396% !I
:
98.234
3.494% 1/
Excepting 3 tenders totaling $2,tlltl,000;
Excepting 1 tender of $55,000
percent of the amount of 92-d~ bills bid for at the low price was accepted
percent of the amount of 1ti2-day bills bid £or at the low price was accepted
£I
APPLIED FOR AND ACCEPTED BY FEDE&U, RESERVE DISTRICTS:
trict
Applied For
Accepted
: Applied For
Accepted
$ 39,514,000 $ 14,415,000 : $ 18,704,000 $ 12,704,000
ton
York
1,549,057,000
86u,572,000: 1,286,818,000
666,859,000
ladelphia
30,035,000
15,035,000:
6,932,000
1,907,000
veland
31,157,000
31,157,000:
15,930,000
5,13 0 ,000
hmond
21,174,000
16,724,000:
4,654,000
2,354,000
anta
25,534,000
21,609,000:
5,639,000
2,629,000
cago
236,373,000
152,323,000:
168~912,000
36,841,000
Louis
30,050,000
23,625,000:
5,544,000
3,044,000
leapolis
21,467,000
16,067,000:
6,260,000
3,160,,000
Sa5 City
29,388,000
23,938,000:
14,355,000
8,805,000
Las
27,301,000
17,301,000:
9,312,000
4,227,000
Francisco
132,825,000
103,393,000:
15b.,90B,OOO
32",893,000
otals
$2,173,875,000 $1,300,159,000
$1,698,028,000 $800,553,000 SI
ncludes $2l9,930,000 noncompetitive tenders accepted at the average price o£ 99.132
ncludes $48,16B,OOO noncompetitive tenders accepted at the average price of 98.2)4
n a coupon issue ot the same length and for the same amount invested, the return on
hese bills would provide yields of 3.48%, ror the 92-day bills, and 3.62%, for the
82-day bills. Interest rates on bUls are quoted in terms of bank discount with
be return related to the face amount of the bills payable at maturity rather than
ne amount invested and their length in actual number ot days related to a 36o-day
aar. In contrast .. y:ields on certii"icates .. notes, and bonds are computed in terms
r interest on the amount invested, and relate the number of days remaining in an
~terest p~nt period to the actual number of days in the period, with semi~ual compounding 1£ more than one coupon period is involved.
TENDERS
sf
- 3 -
and exchange tenders will receive equal treatment.
cash adjustments will be ma4e
for differences between the par value of maturing bills accepted in
exchan~ ~d
the issue price of the new bills.
'nle income derIved from Treasury bills, whether interest or gain trom the I&l.e
or other disposition at the bills, does not have any exemption, as such, and
lOBI
trom the sa.l.e or other disposition of Treasury bills does not have a.ny special
treatment, as such l under the Internal Revenue Code ot 1954.
The bills are subject
to estate, inher1 tance, girt or other excise taxes, whether Federal or sta.te I but
are exempt from all taxation now or herea.:f"ter imposed on the principal or interest
thereof by any state, or any of the possessions of the United states, or by any
loca.l taxing authority.
For purposes of taxation the amount ot 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
~M
the amount of discount at which bills issued hereunder are sold is not cODs1dere4
to accrue until such bills are sold, redeemed or otherwise disposed of, a.nd such
bills are excluded from consideration as capita.l assets.
Accordingly, the owner
of 'l'reasury bills (other than lI:te insurance companies) issued hereunder need in·
clude in his income tax: return only the dIfference between the price paid for 8ucb
bills, whether on original issue or on subsequent purchase, and the amount actuall1
received either upon sale or redemption at maturity during the taxa.ble 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 condi tiona of their .issue.
Copies of the circular may be obtained from any Federal Reserve Bank or Branch.
-
decimals, e. g., 99.925.
Fractions may not be used.
It is urged that tenders
be made on the printed forms and forwarded in the special envelopes which V1U
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 per.m1tted 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
~denU
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.
~
secretary of the Treasury expressly reserves the right to accept or reject a.ny
or all tenders, in whole or in part, and his action in any such respect
final.
8~ ~
Subject to these reservations, noncompetitive tenders for $ 200,000 or
less for the additiona.l bills dated
June 6, 1963
5C(ibCi)CX
ing until maturity date on
$ 100,000 or less for the
~
December 5, 1963
, (
91
~
days rem&iD-
'¢ii1
) and noncompetitive tenders
~
tor
182 -day bills without stated price from anyone
~
bidder will be accepted in f'ull at the average price (in three decima.ls) ot accepted competitive bids for the respective issues.
Settlement for accepted teD-
ders in accordance with the bids must be made or completed at the Federal ReseI'ft
Banks on September 5, 1963
~
, in cash or other immediately a.vailable fuDds or
in a like face amount of Treasury bills maturing
September 5, 1963 • CIIh
-------~~~~----
iHfttXxixt
UDXXXJIIJD'IU
TREASURY DEPARTMENT
'Washington
August 26, 1963
FOR IMMEDIATE RELEASE
TREASURY'S WEEKLY BILL OFFER ING
The Treasury Department, by this public notice, invites tenders for two ser1e,
of Treasury bills to the aggregate amount of $ 2110~OIOOO
cash and in exchange for Treasury bills maturing
of $2,103,113,000
W
or thereabouts, ~r
September 5, 1963, in the UOUIlt
xIii,
, as follows:
91 -day bills (to maturity date) to be issued
~
J
September 5, 1963
,
~
1n the amount of $ 1,300,000,000 , or thereabouts, represent-
X{CiJX
ing an additional amount o£ bills dated
June 6, 1963
fjij
A
December
1963
, originally issued in the
Jl~
.
amount of $ 800~OOO
,the additional and original bills
a.nd to mature
to be freely interchangeable.
182 -day bills, tor $ 800,0.00
,or therea.bouts, to be dated
i6&'iQC
September 5, 1963 , and to mature
i6d&7
March 5, 1964
•
{&if
The bills of both series will be issued on a discount basis under competit111
and noncompetitive bidding as hereinafter provided, and at maturity their
8lDount will be payable without interest.
t~e
They viII be issued in bearer tom
oDll,
and 10 denominations of $1,000, $5,000, $10,000, $50,000, $100,000, $500,000'-
$1,000,000 (maturity value).
~nder6
will be received at Federal Reserve Banks and Bra.nches up to the
Dayllght Saving
clOSing hour, one-thirty p.m., Eastern~ time, Friday, August 30, 19I5_
"i,i
Tenders will not be received at the Treasury Department, Washington.
Each teadll'
must be for an even multiple of $1,000, and in the case of competitive tendeJ'ltil
price offered must be expressed on the basis of 100, with not more thaZ1 tbl'et
TREASURY DEPARTMENT
August 26, 1963
OR IMMEDIATE RELEASE
TREASURY'S WEEKLY BILL OFFERING
The Treasury Department, by this public notice, invites tenders
or two series of Treasury bills to the aggregate amount of
2,100,OOO,OOO,or thereabouts, for cash and in exchange for
('easury bills maturing September 5,1963, in the amount of
2,103,113,000, as follows:
9~day bills (to maturity date) to be issued
the amount of $1,300,000,000, or thereabouts,
ditional amount of bills dated June 6,1963,
ture December 5,1963, originally issued 1n the
800,219,000,
the additional and original bills
terchangeable.
September 5, 1963,
representing an
and to
amount of
to be freely
182-day bills, for $800,000,000,
or thereabouts, to be dated
Jtember 5, 1963, and to mature Marc h 5, 1964.
The bills of both series will be issued on a discount basis under
mpetitive and noncompetitive bidding as hereinafter provided, and at
turity their face amount will be payable without interest. They
11 be issued in bearer form only, and in denominations of $1,000,
000) $10,000, $50,000,
$100,000; $500,000 and $1,000,.000
lturlty value).
Tenders will be received at Federal Reserve Banks and Branches
to the closing hour, one-thirty p.m., Eastern Daylight Saving
Ie, Friday, August 30~ 1963.
Tenders will not be
eived at the Treasury De~artment, Washington. Each tender must
for an even multiple of $1,000, and in the case of competitive
ders the price ofrered must be expressed on the basis of 100,
h not more than three decimals, e. g., 99.925. Fractions may not
used. It is urged that tenders be made on the printed forms and
warded in the special envelopes which will be supplied by Federal
erve Banks or Branches on application therefor.
Banking institutions generally may submit tenders for account of
tomers provided the names of the customers are set forth in such
jers. Others than banking institutions will not be permitted to
nit tenders except for their own account. Tenders .will be received
10Ut deposit from incorporated banks and trust companies and from
,onsible and recognized dealers in investment securities. Tenders
rl others must be accompanied by payment of 2 percent of the face
Int of Treasury bills applied for, unless the tenders are
)mpanied by an express guaranty of payment by an incorporated bank
rust companYe
953
•
..I~\ :i.:.lit'A.~E j\. :',.
1.1j • •
~,"Af'::as,
Auguat 27, 196)
W.<1ne adal' A2«)dt. 28. li6l.
~U';'S:.~LTS
... I
"),i
Ti~..:A5U:{i 'S ::h~S-C:Att HILLJFFERlNG
, ~ -, "-reasuri 1Apal"'t.Mr.ent 3IulOUilced last ,.ven1nt~ that the tenden !,o)r
l~~ut. ~f J6J-da¥ Tr. .sl1l7 billa to be dated Sept_ber 3, 17Q J
~~"~~~ Jl~ l~',
wnich wzoe oftered on
Au.~ust
t
.,
21, were opened at tbe , .....
on AUJUSt 27.
lh. Jetaile of tht. issue are u
follows:
l'otal applied. for • t2,611.w.u.,OOO
Total aeoepted
- 1,000,910.000
(includes 164,020,000 enten4 -
noncompetit1ve basi. and
.eoep~
full at the average price _holm
Jiang. of aocepted competitive bidal
Hi6h
-
iDV
Ave~e
-
i6.41o iquiyaJ.ent rate of discount approx. l.S60
w
..
u
n
).S79
96.391
"
96.39>
..
It
(b8 pergent of the aaou.nt bid
iJi.etriot
e
67,215,000
1,743,191,000
39,053,000
166,71),000
Bostoll
liew fork
Pn1ladel.phia
Cl•••land
6,596,000
IlicbPaond
Atlanta
Chicago
i"iinneapol1.
Kan... City
.leMa'
•
1
11k
1
99
1
6
L
L
2,32 .. 707.000
TOT.A.L
Total
~O,962,OOO
22,66.3,000
17,391,000
San Francisco
V&IJ &oCI
13
18,048,000
Dallas
).S7S
22,171.000
274,131,000
st. Loui.
"
for at the lo-w price
Total
AEplied tor
l' e~.l l~.6rve
Y
""
$2,631,441,000
92
2
Sj
tl,OOC
On a coupon issue of the S8Me lSDgt:l and for the 8Ql8 amount 1nTeete4,
these hills 'Would oroTide a y-ield of 3.74(. Interest rates on bill••
teI"lt18 c:;f uallit disco·,mt with trle return related to the face amount of t
.'t t fllAt uri tl rather than the amount invested and their length in actual
relat.ed to • )6o-da,7 year. In contrast, yields on oert1iloat•• , DOteI
computed in te1"ll8 of inter&st on the amount invested, and relate t,be r
rem&inlIl? in an int~rest payment period to t he actual maber of da~ j
with semiannual co.~o?Ddint~ if PlOre than one coupon period i8 iDYolYe<
!
TEASURY DEPARTMENT
E A. M. NEWSPAPERS,
August 28, 1963.
August 21, 1963
RESULTS OF TREASURY'S ONE-YEAR BILL OFFERING
~easury
Department announced last evening that the tenders tor $1,000,000,000,
outs, of 363-day Treasury bills to be dated September ), 1963, and to mature
1964, which were offered on August 21, were opened at the Federal Reserve Banks
27.
etaUs of this issue are as follows:
applied for - $2,631,441,000
accepted
- 1,000,910,000
(includes 164,020,000 entered on a
noncompetitive basis and accepted in
full at the average price shown below)
of accepted competitive bids:
- 96.410
- 96.391
- 96.395
age
Equiva1ent rate of discount approx. 3.560% per annum
n
-
_.
n
•
•
n.
•
3.519% n
3.575%·
n
•
!I
(88 percent 01' the amount bid 1'or at the low price was accepted)
al Reserve
Total
Applied for
$ 67,21$,000
Let
11
ork
39,053,000
114,471,000
1,003,000
166,713,000
99,077,000
1,143,191,000
:ie1phia
land
)nd
6,596,000
22,171,000
274,731,000
~a
~o
)uis
20,962,000
lpolis
18,048,000
, City
22,66),000
17,391,000
~
rancisco
TOTAL
Total
Accepted
$
1,915,000
2)2,707,000
12,631,4hl.,000
1,496,000
1),171,000
92,306,000
6,062,000
4,848,000
4,863,000
2,391,000
$9,307,000
$1,000,910,000
lpOD issue ot the same length and for the same amount invested, the return on
)ills would provide a yield of 3.74%. Interest rates on bills are quoted in
,t bank discount with the return related to the face amount of the bills payable
1J.r1ty rather than the amount invested and their length in actual number of days
l to a J60-day year. i:n contrast, yields on cert1.ficates, notes, and bonds are
,d in terms of interest on the amount invested, and relate the nmnber of days
.ng in an interest payment period to the actual number of days in the period,
mannual. COmpOWlding if more than one coupon period is involved.
- 6 Dr. Glenn Ho Damon, Staff Research Coordinator, Bureau of
Mines, Department of the Interior.
Arthur R. Gatewood, President, American Bureau of Shipping.
Ludwig Co Hoffmann, Chief, Office of Ship Construction,
Maritime Administration, Department of
Co~erce.
Charles So Morgan, Assistant General Manager, National
Fire Protection Association.
Richard Parkhurst, Fonner Chairman, Boston Port Authority
and form;r Commissioner, U. S. Maritime Connnission (Ret.)
Captain W. So Vaughn, U. S. Coast Guard, Chief, Testing
and Development Division, Office of Engineering, Coast Guard
Headquarters.
000
- 5 -
•
,
t
That Coast Guard rank Vessel regulations be amended to require
a suitable, properly calibrated, explosive gas-indicating device
to be carried and used aboard tank vessels, particularly in the
p~
room .
• • , That judicial procedures be revised to make available to
courts expert opinion from unbiased scientific or technical sources
to aid them in making their decisions.
Members of the committee were:
Chainnan, Herbert Lo Seward, Emeritus Professor of Mechanical
and Marine Engineering, Yale University, and former professor of
Maritime Economics at the U. S. Coast Guard Academy.
Dr. Homer Carhart, Head, Fuels Branch, Naval Research Labora~
Department of the Navy.
E~ Carroll Creitz, Fire Research Section, National Bureau of
Standards, Department of Commerce
0
- 4 -
..
, That the Coast Guard update its statistical procedures with
reference to maritime accidents.
I
•
I
That further studies be made to determine factors
contributing to fire and explosion hazards associated with
flammable cargoes.
Particular emphasis should be placed on
vapor concentration, static electricity and inerting.
I
..
"
That bridge-to-bridge radiotelephone be used in congested
waters by all ships for the exchange of navigational
information.
A single frequency should be assigned and its
use limited to this particular purpose •
• • ,That serious consideration be given to requiring a bright
light synchronized with a vessel's whistle.
The light sho~d
be clearly visible all around the horizon and be of such
character that it cannot be mistaken for a vessel's
navigation lights.
- 3 Other reconnnendations
...
t2
de were:
That a uniform set of Rules of the Road be developed for
Western Rivers, Great Lakes and inland waters patterned closely
after the International Rules of the Road.
,
J
That when necessary, traffic in narrow or shallow channels
be controlled to reduce collision hazards created by the
maneuvering of large tankers.
It was also urged that special
consideration be given to the use of one-way traffic and speed
control.
That Merchant Mariner' s D~cuments carry endorsements indica~
basic knowledge of regulations and safety practices applicable
aboard a tanker.
Employment should be conditioned on such an
endorsement.
That greater care be taken to detect and eliminate accident~
prone individuals from service on tank vessels.
- 2 was that no regulations be issued
making mandatory the gas-freeilll
or inerting of empty cargo tanks in such ships before or during
navigation.
Secretary Dillon, in appointing the committee,
pointed out that the problem of gas-freeing tankers after
discharging combustible or flammable cargoes was one which
has concerned the industry and the Coast Guard for some time.
The committee reported that it had held 33 all-day meetings
of the main group, in addition to many ID2etings of five
specialized subconnnittees.
Representatives of industry, labor
and government were interviewed, and committee members made
numerous inspection trips on tank vessels and barges.
August 23, 1963
For Release, ~~ Newspapers
'Tuesday, August 27, 1963)
.....
TREASURY
R~LEASES
TANKER SAFETY COMMITTEE FINDINGS
Secretary of the Treasury Douglas Dillon today made public
the results of a l6-rnonth study of hazards involved in the
operation of tanker vessels carrying explosive or flammable
cargoes.
The study was conducted by a commi ttee of maritime safety
experts appointed by Secretary Dillon in April, 1962, upon the
recormnendation of the Commandant of the U. S. Coast Guard, which
has the statutory responsibility for maintaining safety on
navigable waters of the United States.
Herbert Lee Seward,
Professor Emeritus of Mechanical and Marine Engineering, Yale
University, served as Chairman.
Captain W. S. Vaughn, U.
s.
Coast Guard, represented the Treasury Department on the commt~
The first of eleven recommendations by the nine-man ~o~
TREASURY DEPARTMENT
i¥!M'biiffi· . . . . . , . . . . .
2 •
wy.
WASHINGTON. D.C.
August 29, 1963
FOR RELEASE: SUNDAY NEWSPAPERS
SEPTEMBER 1, 1963
TREASURY RELEASES
TA.~KER
SAFETY COMMITTEE FINDINGS
Secretary of the Treasury Douglas Dillon today made public
he results of a l6-month study of hazards involved in the operaion of tanker vessels carrying explosive or flammable cargoes.
The study was conducted by a committee of maritime safety
Kperts appointed by Secretary Dillon in April, 1962, upon the
ecommendation of the Commandant of the U. S. Coast Guard, which
as the statutory responsibility for maintaining safety on naviable waters of the United States. H2rh~rt Lee Seward, Professor
1eritus of Mechanical and Marine Engineering, Yale University,
~rved as Chairman.
Captain W. S. Va'Jghn, U. S. Coast Gu~rd,
presented the Treasury Department on the committee.
The first of eleven recommendations by the nine-man group
s that no regulations be issued making mandatory the gas-freeing
inerting of empty cargo tanks in such ships before or during
vigation.
S2cretary Dillon, in appointing the committee, pointed
t that the problem of gas-freeing tankers after discharging
nbustible or flam:nable cargoes was one which has concerned the
dustry and the Coas t Guard for som2 time.
The committee reported that it had held 33 all-day meetings
the main group, in addition to many meetings of five specialized
lcommittees.
Representatives of industry, labor and governm2nt
e interviewed, and committee members made numerous inspection
ps on tank vessels and barges.
Other recommendations were:
• . . Tha t a uniform set of Rules of the Road be developed
Western Rivers, Great Lakes and inland waters patterned closely
~r the International Rules of the Road.
155
- 2 · • . That ,vhen necessary, traffic in narrow or shallow
channels be controlled to reduce collision hazards created by
the ma"1euvering of large tankers.
It was also urged that special
consideration be given to the use of one-way traffic and speed
control.
. That Merchant Ma1:-iner's Documents carry endorsements
indicating basic knowledge of regulations and safety practices
applicable aboard a tanker.
Employment should be conditioned on
such an endorsement
A
· . . That greater care be taken to detect and eliminate
accident-prone individuals from service on tank vessels.
· . . That the Coast Gdard update its statistical procedures
with reference to maritime accidents.
· . . That further studies be made to determine factors
contributing to fire and explosion hazards associated with
flammable cargoes. Particular emphasis should be placed on vapor
concentration, static electricity and inertingo
· . . That bridge-to-bridge radiotelephone be used in congested waters by all ships for the exchange of navigational
information. A single frequency should be assigned and its use
limited to this particular purpose.
· . . That serious consideration be given to requ~r~ng a
bright light synchronized with a vessel's whistle. The light
should be clearly visible all around the horizon and be of such
character that it cannot be mistaken for a vessel's navigation
lights.
. That Coast Guard Tank Vessel regulations be amended to
require a suitable, properly calibrated, explosive gas-indicating
device to be carried and used aboard tank vessels) particularly
1n the pump room.
· . . That judicial procedures be revised to make available
to courts expert opinion from unbiased scientific or technical
sources to aid them in making their decisions.
- 3 Memb'3rs of the cOTflITlittee were:
Chairman, Herbert L. Seward, Emeritus Professor of Mechanical
and Marine Engineering, Yale University, and former professor of
Maritime Economics at the U. S. Coast Guard Academy.
Dr. Homer Carhart, Head, Fuels Branch, Naval Research Laboratory,
Department of the Navy.
E. Carroll Creitz, Fire Research Section, National Bureau of
Standards, Department of Commerce.
Dr. Glenn H. Damon, Staff Research Coordinator, Bureau of
Mines, Department of the Interior.
Arthur R. Gatewood, President, American Bureau of Shipping.
Ludwig C. Hoffmann, Chief, Office of Ship Construction, Maritime Administration, Department of Commerce.
Charles S. Morgan, Assistant General Manager, National Fire
Protection Association.
Richard Parkhurst, Former Chairman, Boston Port Authority
and fanner Commissioner, U. S. Maritime Commission (Ret.)
Captain W. S. Vaughn, U. s~ Coast Guard, Chief, Testing and
Development Division, Office of Engineering, Coast Guard Headquarters.
000
UNITED STATES NET M)NETARY GOLD TRANSACTIUN.::>
Wln1
FOREIGN COUNTRIES AND INTERNATIONAL INSTITUTIONS
January 1, 1963 - June 30, 1963
(In millions of dollars at $35 per fine troy ounce)
First
Country
Quarter
_ _ _ _ _ _ _ _ _---'1-....96~3 .
Second
Austria
Brazil
-20.0
+28.4
-30.0
+16.5
Quarter
1%3
Burma
Cambodia
Cameroon Rep.
Central African Rep.
-2.3
- 1.9
.7
Chad
Colombia
Congo Republic
Costa Rica
Dahomey
Denmark
Ecuador
Egypt
France
Gabon
Iran
Ivory Coast
Kuwait
Lebanon
Niger
Peru
Philippines
Senegal
Somalia
Spain
Surinam
Swi tzerland
Syria
Tunisia
Turkey
Uni ted Kingdom
Upper Volta
Uruguay
Yugoslavia
All Other
Total
*
I;I Fiscal Year 1963
I
July 1, 1%2June 30. 1963
-136.3
+10J~6
- 16.0
4.0
1.9
.7
.7
.7
+
.7
*
*.8
+
-
.4
-101.3
- 2.3
.5
-101.3
.7
5.9
.1
+24.9
- 1.7
- 70.0
-60.0
.1
.1
.5
.4
.1
- %.1
5.5
1.6
-517.6
.7
- 1.5
- 12.5
5.9
,8
8.5
+106.5
37 .. 8
.. 7
.6
.8
15.0
+:14.5
+18.0
.8
+ 8.0
.4
.1
-100.0
Less than $50,000
FigUl'es may not add to totals because of rounding
- 21.0
.8
.6
+ 24.6
1.7
-
1.9
-170.0
+ 2.5
+ 5.0
.3
.5
6.0
68.8
.8
+ 8.0
1.6
1.6
+
+
-
-636.2
TREASURY DEPARTMENT
FOR IMMEDIATE RELEASE
UNITED STATES FOREIGN GOLD TRANSACTIONS FOR
SECOND QUARTER OF 1963
The net sale of monetary gold by the United
States during the second quarter of 1963 amounted
to $100.0 million.
In the first quarter of the
year, there was a net sale of gold of $96.1 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, 1963, and for the Fiscal Year 1963.
000
D-956
TREASURY DEPARTMENT
=
FOR IMMEDIATE RELEASE
UNITED STATES FOREIGN GOLD TRANSACTIONS FOR
SECOND QUARTER OF 1963
The net sale of monetary gold by the United
States during the second quarter of 1963 amounted
to $100.0 million.
In the first quarter of the
year, there was a net sale of gold of $96.1 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, 1963, and for the Fiscal Year 1963.
000
D-956
UNITED S TATES NET M)NETARY GOLD TRANSACTIONS WITH
FOREIGN COUNTRIES AND INTERNATIONAL INSTITUTIONS
January 1, 1963 -
JQ~e
30, 1963
(In millions of dollars at $35 per fine troy ounce)
Negative figures represent net sales by the
United States·
sitive fi ures net urchases
First
Second
Fiscal Year 1963
Country
Quarter
Quarter
Jul~ I, 1962_ _ _ _ _ _ _ _ _ _-=1....96"""""'-3 •
1 6
June 0 1 6
I
Austria
Brazil
Burma
Cambodia
Cameroon Rep.
Central African Rep.
Chad
Colombia
Congo Republic
Costa Rica
Dahomey
-30.0
+16.5
-20.0
+28.4
-136.3
+10].6
- 16.0
- 2.3
4.0
- 1.9
.7
1.9
.7
.7
.7
37.8
+
*
.7
.7
.8
.6
.8
+ 15.0
D8nmark
Ecuador
E~ypt
- .4
-101.3
FTo....'lce
Qabo::1
I.
I
.
.7
Ir2....YJ.
I\'o~y
,; ,;
2.3
.5
-101.3
I,
~
5.9
;
Coast
K.1.lY::li t
L~:xJ.'1on
.
i!
[\iger
,'
.8
,
.1
Se::2.::al
+
Kingdom
Up?er Volta
U::i~ed
i
i
1.9
-170.0
+
2.5
+
5.0
- 70.0
-60.0
.1
.1
.. 3
.5
~5
8.5
+106.5
li:--u..;~2Y
Yugosla\"ia
All Other
Total
.6
24.6
1.7
- 1.7
•
S'.':i ~2erla.'r}d
1\Glisia
.8
I
+24.9
So::::alia
S:~T~a
1.5
- 12.5
- 21.0
; ~
?e~'u
Philippines
5.5
1.6
-517.6
.7
5.9
+14.5
+18.0
.8
+ 8.0
,1
6.0
68.8
.8
8.0
1.6
1.6
-100.0
-636,,2
.4
- 96.1
.
; !
Less than $50,000
Figures may not add to totals because of rounding
+
+
+
-
tOn. a:.WS£ A •• !. ,.\~,;sf'APl·:dS,
Saturday, A1J,~'let 31..1 1963.
'Ltlf: lreaf,\Jrj (.Iepart..'tlcnt alUlO'Wlced li'3.st • .,enlng that tt\e tenden tor two Nn•• tl
'lre~am.r ... bills, one Berie. to be an additional issue
the bUll dated JIm. 6,
tn. otber aeries to 00 dated Ssptember 5, 196), which"" of Iered on Au.;i.:.uIt ?6, ...
1.",
or
or.eDed at the Federal ,~~aerve Bantes on Au.;:uat..30. TeJld4tra weN 1Dvited for 4l,))O,~
or t.a. .... oo~ta.t of 91-da/ bills and for ,j.800,ooo,OOO, or thereabout., 01 Id2-daJ bWa
111. cae1.aila of t ne two series are as follows:
,tAiiJ2: :..1:
lt~c}~P'J. f':U
C.';.M,.,~.u'n
if' dl0.2:
)l-dal Treasury bille
~turi.n6
rJt!cember
>,
Approx. :?q ui \' •
,\nnual aAte
Price
3.378%
3.390%
).)84%
!/
182-day Treasury billa
_turiDg Marcb ~, l~
~.roro](. t:'.qib
.. nnW date
1963 ,
;
••
96.242
I
!I
90.235
I
:
!I
~.2.37
3.4171
).U;U
3.4c7( ~
';.xceptin~ Olla \:..cnder of $75,OCtO; b/ Excepting one tender of $100,000
10 percent of the 8.FlOll.nt of :ll-day b!lls bid for at the low 01'108 W•• <i.t.Cc.pt.d
78 percent of t.1t' ~.r.10unt of lti2-day billa bid tor at the low price val" acoep\td
i )'fAL T';.i'4Dgi~;, .!""I.[.J ,;'j{ AND AGCE:>T·i'D '?l ?~DEa.AL rL';S: \VR .:iSj'ar :..'15:
District
iJ08ton
Mev ton
Am)lied For
Ay08Eted
.~
~~
)4,957,000
1,718 ,992,000
27,901,O(()
Philadelphia
Cl••eland
2),268,000
lUomaond
17,l.i74,OOO
2j),9:J4,ooo
33 J 5 78, (X}O
Chicago
St. Louis
Minneapolis
Jan ••• City
iJalla,
san Franciscc
8,957,000
I
]31,663,000
I
12,451,000
21,)28,000
a
10,)66,000
11,422,000
Atlanta
••
!Eplled Por
1 12,140,000
1,:23~,861,OOO
B,772,OOO
10,02),000
2,507,000
I
:
:
4,)80,000
138,933,000
10,193,000
d,S75,000
12,517,000
153,7)4,000
17,01),000 :
/cOiEttd
. 5,7&0,.
6A2,O)S,II
),712,-
8,67),_
1,1687,_
),~I"
56,JS6"
~,lJ&'"
;,W
..
21, 97S ",LID
1),1$),000
I
33,9)9,000
21,585,000
125.460.000
~2
';'u5 , (lClO
" . , ,'. . , \)'
23,l.W.a,ooo
18,185,000
t
9,61),000
lO,019,OOJ
I
lOl,)69,OOO
17,0918
sf
11,557,46S,C)o
iaOl,~,11C
d~J
"(8 11141 000
il,30J,68S,0CJ0
I~~
I
6,W"
;,611.-
cI Includ~~ ,.:,21£-, ~5L,()f.}'.} noncompetitivE:' tsnelara accented &l t.he avera,;t:' ,:ri08 tI "J
d/ I,Ic1uJ€s ?4 t,455,'X J !loncompetitive teen' ers accepted at toe average:riee of ,...
l
II
On a
COU)ofl
iss:}€'
o;t,,1e
s~e
leTl
rth and for the . . . . amonnt 1n••~d, t.1lI
~
t.heae bUIs vOLhi ::'rovide yields of 3.47', tor tneJl-day b1l11, and 3.6U, t.
182-day bills. [ntercst r3tee on bi.l.ls are quoted!in t emil of bank :iiaco1llt 11~
the return rfdated to VIe face amolcDt of the 0111s payaole at JUturity ra\Wtile ll:r!Ount tnvested wd t heir len~~th in actual nWlber (If day. related to . . . . .
yea~. In c~Ltrast, yields or, ceMiflcate. J notes, and bonds are GOIDouted iA "':
~t .l.nt~~8t. on tn\:".; ~~ol'n~ i~"VL:'St~::, and. relate the IlWlber of da,Y8 ~iD1.DC sad
_nt.ere",t P&i1Mnt p8.1::l.: t: : ,.: ~:;t'.).al mmlDer 01 d. • .,. in t nt' ~r1odJ n t h
_...
"-
cozr':'.:'0~mji~l l.f !E!~re ~ '~::1")n"" C"))Ji~On ;:F M.od is iIWol'fed.
TREASURY
&
RELEASE A. M. NEWSPAPERS,
relay, August 31, 1963.
August 30, 1963
RESULTS OF TREASURY'S WEEKLY BILL OFFERING
The Treasury Department announced last evening that the tenders for two serles of
sury bills, one series to be an additional issue of the bills dated June 6;, 196), and
other series to be dated September 5, 1963, which were offered on August 26, were
I3d at the Federal. Reserve Banks on August 300 Tenders were invited for $1,300,OOO.:tOOO~
nereabouts, of 91-day bills and for $800,000,000, or thereabouts, of 182-day bills.
letails of the two series are as follows:
OF ACCEPTED
TITlVE BIDS:
High
Low
A,verage
91-day Treasury bills
maturin~ December 52 1963
Approxo Equiv ..
Price
Annual Rate
99.146
99.143
Y
3.378%
3.390%
3.384% 1/
99.1h5
.
182-day Treasury bills
rna t yring 1:1arch 5 ~ 1?6h
.•
~
:
Approx e Equi v ..
s
..
Price
98.242
:l
98G235
98 .. 237
...
Annual Rate
,2/
3 .. 4?7%
3.491%
3~h87%
11
~cepting one tender of $75,000; £/ Excepting one tender of $100,000
oercent of the amount of 91-day bills bid for at the low price was accepted
oercent of the amount of 182-day bills bid for at the low price was accepted
TENDERS APPLIED FOR AND ACCEP'I'ED BY FEDERAL RESERVE
~rict
~on
York
adelphia
eland
mond
nta
ago
Louis
eapolis
as City
llS
rancisco
AE:e1ied For
$
34,957,000
1,798,992,000
27,901,000
23)268,000
11,422,000
17,474,000
283,994,000
33,878,000
21,975,000
33,939,000
27,585,000
125,2460 l 000
$2,440,845,000
AcceEted
8,957,000
931,66),000
12,451,)1000
21,328,000
10,300,000
12,517,000
153,734,000
J.7,01),000
13,153,000
2),144,000
18,185:1 000
78 ,174.z000
$1,300,685,000
$
.
0
"
0
:
8
·.
·
·..
·.
g
:
DISTRICTS~
ApElied F'or_
"$ 12,140~ooo
1,239,861,000
8,772,000
10,023$000
2,507,000
Accented
$ ~;-740,OOO682,035,000
3,772,000
8,673.,000
1,,482,000
4~.380,ooo
),952,000
138" 933 ,000
10,193,000
56,356,000
5,149,000
6,lltJ;-ooo
8,5?5;.oOO
3
I'
9,093,000
:;
10 ,OJ.9 ,000
~
102.13691000
£I
$1,557,465,000
5,445~OOO
5 11 619,000
_ 17 2•0 99 JOQq
$801,465,000
9J
wies $212,954,000 noncompetitive tenders accepted at the average price of 99$lu$
ndes $49,455,000 noncompetitive tenders accepted at the average price of 9<3,,2)'7
Coupon issue of the same length and for the same amount invested, the return on
e bUls would provide yields of 3 .. 47%, for the 91-day bills, and 3 .. 61%, for the
Gay billse Interest rates on bills are quotedin t~rrr,s of bank discount -wit.h.
return related to the face amount of the bills payable at maturity ra.ther than
BlIiount invested and their length in actual number of days related to & .36O....d,.ay
In contrast, yields on certificates, notes, and bonds are computed in terms
nterest on the amount invested, and relate the number of days remaining in an
rest payment period to the actual number of days in the period, r..-'i.t.b. semianntul
ounding i t more than one coupon period is involvede
- 3 Due to the limitations of existing law , "in-bond"
(~-'t;t;.:J )
(unta~)
"
transfers of concentrate between breweries are limited to transfers
between breweries of the same ownership.
There are no such
restrictions on the "in-bond" transfers of wine between wineries or on
the "in-bond" transfers of distilled spirits between distilled
spirits plants
o
The Treasury noted that the new conditions
relating to the production of beer concentrate might warrant
reexamation of the existing statutory restrictions on "in-bond"
transfers between breweries.
000
- 2 -
on the notices in the spring and fall of 1961.
The new regulations provide for (1) the production in a
brewery of a concentrate from beer by the removal of water, (2) the
reconstitution of beer from such concentrate by brewers by the
addition of water and carbon dioxide,
(3) the qualification as
breweries of plants concentrating or reconstituting beer, (4) the
transfer of concentrate between breweries belonging to the same
brewer, (5) the exportation of a concentrate without payment of
tax, and (6) for the labeling of the reconstituted product as
"BEER -- made from beer concentrate."
These regulations require the reconstitution of the beer
before it is removed from the brewery for consumption or sale.
Therefore, the concentrate as such will not be available for sale
to consumers.
DRAFT - 8-30-63
NEW REGULATIONS PERMIT BREWERS TO PRODUCE
BEER BY NEW PROCESS
New tax regulations to be in effect December 1, 1963 will permit
beer to be produced by a new concentration process, aeeoyding to an
aImOQ".,.,,,,..,,,, today by the Treasury Department.a/>vv. /><,,,cc,(
~
This process involves removal of water from beer by freezing
and is similar to one used in the production of concentrated fruit
juices and other products.
The new regulations reflect amendments to the Internal
Revenue Regulations (26 Code of Federal Regulations, Parts
245-~er
and 252-Exportation of Liquors, and 27 Code of Federal Regulatioos,
Part 7-Labeling and Advertising of Malt Beverages) relating to
t~
concentration and reconstitution of beer.
The regulations will appear in Saturday's Federal Register, and
are issued pursuant to notices of proposed rule making published in
the Federal Register of December 28, 1960.
Public hearings were beld
TREASURY DEPARTMENT
.,
FOR IMMEDIATE RELEASE
NEW REGULATIONS PERMIT BREWERS TO PRODUCE
BEER BY NEW PROCESS
New tax regulations to be in effect December 1, 1963 will
permit beer to be produced by a new concentration process, the
Treasury Department announced today.
This process involves removal of water from beer by freezing
and is similar to one used in the production of concentrated fruit
juices and other products.
The new regulations reflect amendments to the Internal
Revenue Regulations (26 Code of Federal Regulations, Parts 245-Reer
and 252-Exportation of Liquors, and 27 Code of Federal Regulations,
Part 7-Labeling and Advertising of Malt Beverages) relating to the
concentration and reconstitution of beer.
The regulations will appear in Saturday's Federal Register,
and are issued pursuant to notices of proposed rule making published
in the Federal Register of December 28, 1960. Public hearings
were held on the notices in the spring and fall of 1961.
The new regulations provide for (1) the production in a
brewery of a concentrate from beer by the removal of water,
(2) the reconstitution of beer from such concentrate by brewers
by the addition of water and carbon dioxide, (3) the qualification
as breweries of plants concentrating or reconstituting beer,
(4) the transfer of concentrate between breweries belonging to the
same brewer, (5) the exportation of a concentrate without payment
of tax, and (6) for the labeling of the reconstitutted production
as "BEER -- made from beer concentrate."
These regulations require the reconstitution of the beer
before it is removed from the brewery for consumption or sale.
Therefore, the concentrate as such will not be available for sale
to consumers.
Due to the limitations of existing law, "in-bond (non-taxpaid)
transfers of concentrate between breweries are limited to transfers
between breweries of the same ownership. There are no such
restrictions on the I'in-bond" transfers of wine between wineries
or on the "in-bond" transfers of distilled spirits between
distilled spirits plants.
The Treasury noted that the new conditions
relating to the production of beer concentrate might warrant
reexamination of the existing statutory restrictions on "in-bond"
transfers between breweries.
D-958
Uni ted States Sav:iJlgs Bonds Issued and Red~eme!1 Through Au~at J~ 1%3
(Dollar amounts in millions - rounded and will not necessarily add to tOtals)
Amount
Issued
.............
.......
MATUflliD
A-1935 - D-1941
Series F & G-1941 - 1950
&~ries
tT"M.1AIURE D JI
~ries E:
1941
1<)42
1943
1944
1945
1946
1947
191t 8
l )!t <)
1950
1951
1952
1953
1954
1955
1956
1957
1958
1959
1960
1961
1962
1963
l
·....................
·....................
·....................
·....................
·....................
·....................
·.....................
·....................
·....................
·....................
·....................
·....................
·....................
·....................
·....................
·....................
·....................
·....................
··....................
....................
· ....................
·....................
Unclassified ...................
Total Series E .................
Series H
H
·....................
3/
(1952 - Jan. 1957) •••••
(Feb. 1957 - 1963) •••••
':'otal Series H ••••••••••••••••
Total Series E and H • • • • • • • • • •
$
II
5,003
28,512
1,827
8,070
12,987
15,128
11,840
5,321
5,012
5,163
5,07 8
4,428
3,83)-1,
4,014
4,563
Amount
Redeemed
$
II
Amoun t
~ % ~tsiQOutstand inC ZI of Amt.r.
4,990
28,379
$
13
133
-.
~
-
4,299
4,155
3,882
3,860
3,869
3,72.3
1,979
533
1,539
6,825
10,975
12,646
9,694
4,132
3,710
3,713
3,564
3,020
2,600
2,655
2,816
2,718
2,777
2,676
2,428
2,182
1,989
1,811.11,595
1,281
282
500
287
1,244
2,Oll
2,482
2,146
1,189
1,302
1,450
1,515
1,407
1,234
1,359
1,747
1,883
1,990
1,903
1,871
1,972
1,893
2,046
2, 271~
1,696
34
85.1
l~n ,510
88~132
3,670
5,610
1,363
648
39,378
2,307
4,962
J9j
62J
9.280
2.01J
1.269
Ja.:
136,790
90,143
46,647
J4.;
209
2Q!
4,601
4,767
4,579
2,~2
1J
15.1.
15.Ja.
15 ..
16"
18.1.
22.1.
25.'
28.0
29.t
31.7
32.1
33.S
38.2
40.9
41.7
U.S
43.S
47"
48.7
SM
58.1
6S.~
6.;•
8~J
-
Series F and G
(1951 - 1952) •••••
1,007
798
Series J and K
(1952 - 1957)
••••
3,701
2,008
1,693
4]J
r~,
....
4,708
2,806
1,902
~
.......
33,515
33,369
92,949
126,318
146
TO-l.al Series
1
G, J and K
ITotal matured
All Series Total unmatured •••••
Grand Total •••••••••
-;J
zj
JJ
1J
14l,498
175,013
Includes accrued discount.
Curr<?nt redemption value.
At option of ovmer 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.
48,549
48,695
BUREAU OF THE PUBLIC DZa7
,
)1.
Z7.
..
ED
United States Savings Bonds Issued and Redeemed Through August 31, 1963
(Dollar amounts in millions - rounded and will not necessarily add to tota16)
,.
Amount
Amount
AmOlli1t
% OutGtunding
Issued J.I Redeemed 11 OutstandinG 2.J of Amt.IsDued
~ A-1935 - D-1941
a ••••
• • • • It
ea F & 0-1941 - 1950 .............
$
5,003
28,512
$
4,990
28,379
$
13
133
.26%
.47
URIDl:JI
as E:
1941 •• e.·· •
"'a ••
1942 • ••••••••••••••••••••
1943
1944 ••••• 11." •••••••••
1945 • • • e • • " • • •
•• e •••••
1946
1947
1948 ..................... " ..
1949
1950 • • • • • e • • • • • • • • • e _ • • • •
1951
a •••••••••
1952 • • • • • • e • • • • • • • • • • • • • •
1953 • • • • • • • • • • • • • • • eo • • • • •
1954
1955 • ••••••••••••••••••••
1956
1957 • . . . . . . e . . . . . . . . . .
1958
1959
1960 • • • • • • • • • • • • e • • " • • • • •
1961
1962
e ....
196J • • • • • • .,w.e • • • • • • • • e • •
1,827
8,070
12,,987
1.5,128
1,539
6,825
10,975
12,646
9,694
4,132
3,710
3,713
3,564
3,020
1,363
648
287
1,244
2,011
2,482
2,:1.46
1,189
1,302
1,450
1,515
1,407
1,234
1,359
1,747
1,883
1,990
1,903
1,871
1,972
1,893
2,046
2,27h.
2,442
1,696
34
39.1.378
2,307
4,962
88.h5
9 2Bo
2.01]
:L .269
78 ... 13
.........
136;t 790
90,143
46,647
34.10
F and G (1951 - 1952).8 •••
1,007
798
209
20.75
J and K (1952 - 1957)
3;7~.
2,008
1~693
45 .. 74
4,708
2,806
lL902
40 .. 40
33,515
141.,498
175,,013
33,,369
92,949
126,,318
1.46
48,549
48,695
34.31
27.82
ct • • •
.,& • • • •
•••••••
~
•••••• $
• • O' • • •
&
•••
e.~
•
•••••
., . . . . . . . . . . . . II • •
• " •••• e •• " •••••••••••
•• eA.fl • • • • • • • • • • • • • • •
•
•••••••••
II
•
. . . . . . . . . . . . . . . . 00 • • •
•
••••••••• 0
...........
It
••••
• • • • • • • • • IIe • • • • • e • • • •
• • • • • eo • • • • • • • • • • • • • • •
•
. . . . . . . . . . . . . . . . . II . . . . . .
. . . . . . . . . . . . . . . 1) • •
assified
1 Series E
I
e •••
..............
••••• 0 " •••• " ••••
3/
H (1952 - Jan. 1957) •••••
H (Feb. 1951 - 1963) •••••
l Series H ••
$
•• "
......... "
l Series E and H .... e
Series F, G, J and K
ies
•••
II!!
a
•
•
&
•••
{Total matured ••••••.
Total unmatured •••••
Grand Total •••••••••
1l,8t~0
5,321
5,012
5,16)
5,0'78
4,4:28
3,834
4,014
4,563
4,601
4,7 67
4,579
4,299
4,155
3,882
3,860
3,869
3,723
1,979
533
127,510
3,670
5,610
udes accrued discount.
ent redemption value.
ption of owner bonds may be held and
earn interest for additional periods
r original maturity dates.
udea matured bondH whlclJ. lmve not. been
lilted for red,:;tnption.
2,600
2,655
2,816
2,718
2,777
2,676
2,428
2,182
1,989
1,81h
1,595
1,281
282
500
88,132
!J
BUREAU OF THE PUBLIC DEBT
IS.71
15.42
15.~8
16.41
18.D
22.35
25.98
28.08
29.83
31.78
32.19
33.86
38.29
uO.93
41.75
41.56
43.52
47.46
48.76
53.01
58.17
65.59
85.10
6.38
30.88
62.86
.h4
- 3 -
and exchange tenders viII receive equal. treatment.
Ca.sh adjustments will be made
for differences between the par value of maturing bills accepted 1n exchange ~d
the issue price of the new bills.
The income derived from Treasury bills, whether interest or gain from the lilt
or other disposition of the bills, does not have any exemption, as such,
8Ild lOll
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 esta.te, inheritance, gif't or other excise taxes, whether Federal or state, but
are exempt from all taxation now or herea.:f'ter imposed on the principal or
inte~n
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 origina.l.ly sold by the United states 1s considered to be in-
terest.
Under sections 454 (b) 8Jld 1221 (5) ot" 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 caplta.:l assets.
Accordingly, the ower
of Treasury bills (other than lire insurance companies) issued hereunder need 111-
clude 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 actuaa
received either upon sale or redemption at maturity during the taxable year for
which the return 1s 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 FederaJ. 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 ma.y submit tenders for account of customers
provided the names of the customers are set :forth in such tenders.
Others
t~
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 percentct
the face amount of' Trea.sury bills a.pplied for, unless the tenders are a.ccompanled
by an express guaranty of' payment by an incorporated bank or trust company.
Dmnediately after the closing hour, tenders will be opened at the Federal
Reserve Banks and Branches J following which public e.nnouncement 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 thereat.
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.
less
.,
Subject to these reserv,ations, noncompetitive tenders for $ 200,000 or
~or
the additional bills dated
June 13, 1963
,(
~
91
days
remain-
:tIiiJ
) and noncompetitive tenders for
ing until ma.turity date on
December 12, 1963
$ 100,000 or less for the
(CiiJ
182 -day bills without stated price :from a:ay one
lH*
tH*
bidder will be accepted 1n f'ul.l at the average price (in three decimals)
cepted competitive bids for the respective issues.
or ac..
Settlement for accepted teD..
ders in accordance with the bids must be made or completed at the Federal ReBe'"
Banks on
September 12, 1963
ttif
, in cash or other immediately a.vailable
in a. like ~ace amount of Treasury bills maturing
September 12 , 1963
#ill
tundJ or
TREASURY DEPARTMENT
Washington
September 4, 1963
FOR IMMEDIATE RELEASE
TREASURY'S WEEKLY BILL OFFERING
The Treasury Department, by this public notice, invites tenders for two serll
of Treasury bills to the aggregate amount of $ 2,100,000,000 , or therea.bouts, fol
bSJX
cash and in exchange for Treasury bills maturing September 12, 1963 , in the IIOUI
of $2,100,529,000
91
W
~
, as follows:
(to maturity da.te) to be issued September 12, 1963
~
in the amount of $ 1,300~O,OOO , or thereabouts, represent-
-day bills
iii
ing an additional amount of bills dated
and to mature
amount of .$
December 12, 1963
iii
800,mtooO
,
June
13~63
,
,originally issued in the
the additional and original bills
to be freely interchangeable.
182
a:a
-day bills, for
.$ 800 ,~OO
September 12, 1963
(tm
, or therea.bouts, to be dated
, and to mature
March .1964
The bills of both series will be issued on a discount basis under competiUII
and noncompetitive bidding as hereinafter provided, and at maturity their
amount will be payable without interest.
t~e
They will be issued in bearer fol'll ol2lr
and in denominations of' $1,000, $5,000, $10,000, $50,000, $100,000, $500,000 u4
$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/!iUc*UAeJi time, Monday, September 9,
iiif
1!1
Tenders will not be received at the Treasury Department, Wash1ngton. Each teadlI
must be for an even multiple of $1,000, and in the case of compet1t1ve tendetll
price oft'ered must be expressed on the basis of 100, with not more thaD thrd
fREASURY DEPARTMENT
a
=
September
4, 1963
R IMHEDIATE RELEASE
TREASURY'S WEEKLY BILL OFFERING
The Treasury Department, by this public notice, invites tenders
two series of Treasury bills to the aggregate amount of
,100,000,OOO,or thereabouts, for cash and in exchange for
asury bills maturing September 12,1961, in the amount of
,100,529,000, as follows:
9 L day bills (to maturity date) to be issued September 12,1963,
the amount of $1,300,000,000, or thereabouts, representing an
Itlonal amount of bills dated June 13,1963,
and to
ure December 12,1963 ,originally issued in the amount of
)0,929,000,
the additional and original bills to be freely
erchangeable.
18~day
bills, for $ 800 ,000 ,000,
or thereabouts, to be dated
:ember 12,1963, and to mature March 12, 1964.
The bills of both series will be issued on a discount basis under
petltlve and noncompetitive bidding as hereinafter provided, and at
urlty their face amount will be payable without interest. They
1 be issued in beare r form only, and in denominations of $1,000,
JOO, $10,000, $50,000,
$100,000, $500,000 and $1,000,000
turl ty value).
Tenders will be received at Federal Reserve Banks and Branches
co the c losing hour, one-t~irty p.m., Eas tern Day1 ight Saving
~, Monday, September Y, 1Y63.
Tenders will not be
~ived at the Treasury De~artment, Washington .
Each tender must
:~or an even multiple of $1,000, and in the case of competitive
lers the price offered must be expressed on the basis of 100,
1 not more than three decimals, e. g., 99.925.
Fractions may not
lsed. It is urged that tenders be made on the printed forms and
larded 1n the special envelopes which will be supplied by Federal
rve Banks or Branches on application therefor.
Banking institutions generally may submit tenders for account of
omers provided the names of the customers are set forth 1n such
ers. Others than banking inst1.tutions will not be permitted to
it tenders except for their own account. Tenders will be received
out deposit from incorporated banks and trust companies and from
onsible and recognized dealers in investment securities. Tenders
others must be accompanied by payment of 2 percent of the face
nt of Treasury bills applied for, unless the tenders are
mpanied by an express guaranty of payment by an incorporated bank
rus t company.
-959
- 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 amo~t
and price range of accepted bids. Those submitting tenders will ~
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 13, 1963,
(91-days remaining until maturitr date on
December 12,1963) and noncompetitive tenders for ~noo ,000
or les8 for the 182-1ay bills without stated price from anyone
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 Re!3erve Banks on September 12, 1963
in cash or other immediately available funds or in a like face
amount of Treasury bills maturing September 12,1963. 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 han
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 1s 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 t~
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 obta1MdN
any Federal Reserve Bank or Branch.
000
13. Payments on issue price and investment rates on the new bonds offered in
EOO
3-1/4'fo
3-3/4'fo
4-3/1
Notes
Not.
5/15/64
5/15/64
S/llS!
e/ls
FOR THE NEW :3
Payments on account of $100 issue price to subscriber
APJroximate investment yield from exchange date
(1/15/65) to maturity of bonds offered in exchange
.. sed on price of securities eligible for exchange
!I
ApproXimate minimum reinvestment rate f'or the
extension period !I --------------------------------
$0.65
$0.95
$1.6
4.0~
4.02~
4.02
4.14
4.13
4.13
FOR THE NEW
Payments on account of $100 issue price to subscriber
Approximate investment yield from exchange date
{9/15/63} to maturity of' bonds offered in exchange
based on price of securities eligible for exchange
!I
$1.15
$1.45
$2.10
4.15~
4.14'fo
4.141
4.22
4.22
4.22
Approximate minimum reinvestment rate for the
extension period
~
--------------------------------
FOR TIm NEW 4
Payments on account of $100 issue price to subscriber
Approximate investment yield from exchange date
(9/15/63) to maturity of bonds offered in exchange
based OD price of securities eligible for exchange
11
Approximate minimum reinvestment rate for the
extension period !I --------------------------------
y
$1.35
$1.65
$2.30
4.2l~
4.20'f0
4.201
4.24
4.24
4.24
Y1eld to nontaxable ho1der or bet'ore tax. Based on mean ot' bid and asked pr1cI
issue price) at noon on Sevtember 3. 198~_
APPENDIX TO PARAGRAPH NO. 9
NONRECCGNrrION OF GAIN OR LOSS FOR FEDERAL INCOME TAX
PURPOS!3
Where a bond 1 s offered by the Treasury wi th a payment (other than the accrued ~
adjustment) to the investor.
Examples:
1.
Assume that:
(8)
The fair market value of the security offered by the Treasury OIl the tI
the subscription is submitted is $99.50 (per $100 face value).
(b)
The payment to the subscriber (discount) on account of $100 issue
1s
(c)
$.80.
pri-'
The amortised cost basis of' the security surrendered on the books of ta
subscriber is $100.50 (per $100 face value). (It 1s assumed thattbe
security surrendered was bought at a price above $100.50 and that the
original premium was reduced prorate over the period from purchase date
to mat uri ty. )
The sum of the fair market value of the security offered by the TreaSUl1'"
the payment to the subscriber is $99.50 + $.80 or $100.30. This is lesl"
the cost basiS of the issue surrendered, therefore, no gain is rec~~.
The new issue will be entered on the books of the subscriber at a cost buiJ
of $99.70, the cost basis of the issue surrendered less $.80. The ~D~
bet-ween this cost basis and the proceeds of a subsequent sale or redell}'t10D
of the new issue will be a capital gain or loss to all investors, except iii
to whom the securities ere stock in trade. Under present law, if the CGIidI
time that the security surrendered and the new security received in e.xebNfll
were held exceeds 6 months, the capital gain or loss is long-term, othem.
it is short-term.
2.
The assumptions are the same as in example 1 except that the payment
(discount) to the subscriber is now $1.20 (per $100 face value) instead of
$.80 in example 1.
The sum of the fair market value of the new security received in exehaDl' b)
the subscriber plus the $1.20 payment (discount) is $100.70. This exceedI
the cost basis of the security surrendered by $.20. This excess is a
recogni zed gain reportable for the year in whi ch the exchange takes p]aee.
The gain is a capital gain except to those to whom the securities are stock
in trade. Under present law, if the time the security surrendered was be14
exceeds 6 months.1 the capital gain is long-term, otherwise it is short-tell
5
(c) Gain to the extent not recognized under (b) (or ~oss), if' any, upon the old sec
ties surrendered in exchange will be taken into account upon the disposition or rede
tlon of the new securities. (See appendix to paragraph 9 attached.)
Federa~ estate tax option on the 4-~/8~ bonds of 1989-94 -- The 4-1/8% bonds of 198~
will be redeemable at par a.nd accrued interest prior to maturity for the purpose of'
using the proceeds in payment of' Federal estate taxes but only 1f' ther are owned by
decedent at the t±me of his death and thereupon constitute part of his estate.
Book value of new securities to banking institutions:
!he Comptroller of' the Currency, Board of' Governors of' the Federal Reserve System,
the Federal Deposit Insurance Corporation have indicated to the Treasury that banks
under their supervision may place the new securities received in exchange on their
at an amount not grea.ter than the amount at which the eligible securities surrender
by them are carried on their books plus the amount of premium, if any, paid on the
securities, or reduced by the amount of' discount, if any, received by the subscribe
and increased by the amount of gain, if' any, which will be recognized as indicated
paragraph g.
Computation of' reinvestment rate f'or the extension of' maturity:
A holder of the outstanding eligible securities bas the option of accepting the
treasury's exchange offer or of' holding them to maturity. Consequently, he can com
the interest plus (or minus) any payment, other than the adjustment of accrued inte
he will receive resulting f'rom exchanging now with the total of the interest on the
eligible issues and what he might obtain by reinvesting the proceeds of the eligibl
securities at maturity.
The income before tax for making the extension now through exchange will be the co
rates plus (or minus) any payment on the new issues. If' a holder of the eligible
r1ties does Dot make the exchange he would receive the coupon rates on the eligibJ
issues to t~ maturity and would have to reinvest at that time at a rate equal. t
tbat indicated in paragraph 13 below for the remaining terms of the issues now of'f
in order to equal. the return (including any payment) he vould receive by acceptine
exchange offer. For example, if the 3-5/4'" bonds of 5/l.5/66 are exchanged for thE!
4~ bonds ot 8/15/73, the investor receives 4", for the entire nine years and eleveJl
months plus $1.15 (per $100 f'ace value) immediately. If' the exchange is not made
3-3/4'J, rate will be received until May 15, 1966, requiring reinvestment of' the pr
of the 3-3/4's of 1966 at that time at a rate of' at least 4.32~ for the remaining
years and three months, all at compound interest, to average out to a 4i rate for
years and eleven months plus the $1.15 i.mm.ediate payment. This minimum reinvestm
rate for the extension period is shown in the table under paragraph 13. The mini
reinvestment rates for the other issues included in the exchange are also shown i
table under paragraph 13.
5.
Limitation on amount of securities to be iSBued:
The amount of securities to be issued under this o'ffering will be limited to the ...
of the eligible securities tendered in exchange and accepted.
6.
Books open for subscriptions for the new securities:
The books will be open for the receipt of subscriptions from llinda.y, September 9, tU
Friday, September 13. Subscriptions placed in the mail by midnight, September 13,
addressed to any Federal Reserve Bank. or Branch or the Treasurer, u. S., Wa8~
D. C. 20220, will be considered as timely. The use of registered mail is rec..., .
for the security holders' protection in submitting securities to be exchanged.
If' securities eligible for exchange are pledged With a state or Federal Goveraa I
or authority and such securities cannot or will not be released by such authorltrtl
pledgor in time for use in mak1 ng payment for the securities of'f'ered in this exc,*,
the pledgor may, nevertheless, enter a subscription. Such subscriptions should be •
companied by a letter signed by an authorized official of" the pledgor explaiD1.Dc ~
cumstances and, if the authority will not release the secur1ties, a request IAd..zation 'for the Federal Reserve Bank, or Branch, or the Treasurer of the U. S. (aecoa
to where the subscription is directed) to deliver the new securities to the state or
Federal authority in exchange ror the old securities held by such authority.
7.
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, D. C. 20220. Banking 1utI
tions generally may submit subscriptions for account of customers. All subscriben
questing registered securities will be required to furnish appropriate IdentlfyiDg
numbers as required on tax returns and other documents submitted to the Internal ~
Service.
8.
Denominations and other
cbaracter~stics
of new securities:
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 fonns. The bonds 'Will be acceptable to see!
deposits of' public moneys.
9•
Nonrecognition of gain or loss ror Federal income tax purposes:
(a) General -- The Secretary or the Treasury has declared pursuant to section 1037(
of the Internal Revenue Code that no gain or loss shall. be recognized for Federal is
come tax purposes solely on account of the exchange of the securities; hawver, - '
l031(b) of the Code requires recognition of any gain realized on the exchange to UI
tent that money (other than interest) is received by the security holder in
with the exchange as indicated in (b).
CO-
(b) Where the securities to be issued are offered by the Treasury with a ~
i
the investor -- If the fair market value 1 of the securities to be issued plUS ~
amount paid to the investor (discount) exceeds the cost basis to the investor
securities to be exchanged, such gain (but not to exceed the amount of the PI II
must be recognized and accounted for as gain for the taxable year of exclJan8l· till
carry the new securities on his books at the same amount as he is now carryiDI •
securities except that he will reduce the cost basis by the amount of the pa~
increase it by the amount of the gain recognized. If' the fair market valUe of ~
securities plus the amount of the payment does not exceed the cost basis of tbI..-II
securities, the basis in the nev secur1ties 'Will be the cost basis in the 014 .-reduced by the amount of' the payment.
,:!-)
3.
(Continued)
Securities
to be
exchanged
Amounts to be paid to or by subscribers
On account of
Payable
Net amount
accrued interest to 9/15/63
to
Payable
Payable
subscriber
to
El
on account
To be
To be Extezw
of purchase subscriber : subscriber
paid
collected
or
on
on
price of
to
securities
!!:9! maturit
securities
securities
subsubto
be
to be
to be
scriber
:
scriber
Yra •••
issued
exchanged
issued
···
·
···
·
-
FOR THE 4% BONDS OF 1973
3-1/4% ctf.
4-3/4~ note
3-3/4% note
3-3/410 bond
4%
note
3-5/810 note
3-3/4i note
B-1964
A-1964
D-1964
1966
A-1966
B-1967
A-1967
$1.15
2.10
1.45
1.15
1.80
0.40
0.70
$2.236277
3.687636
2.703397
2.403397
2.136957
0.705367
1.015897
$1.086277
1.587636
1.253397
1.253397
0.336957
0.305367
0.315897
9
9
9
7
7
6 •
6
FOR THE 4-1/8$ BONDS OF 1989-94
3-1/410
4-3/4i
3-3/410
3-3/4i
ctf.
note
note
bond
4%
note
3-5/8% note
3-3/4% note
B-1964
A-1964
D-1964
1966
A-l966
B-1967
A-1967
$1.35
2.30
1.65
1.35
2.00
0.60
0.90
$1.086277
1.587636
1.253397
1.253397
0.336957
0.305367
0 .. 315897
$1.686402
1.686402
1.686402
1.686402
1.686402
1.686402
1.686402
$0.749875
2.201234
1.216995
0.916995
0.650555
30 •
30 •
30
28
27
$0.781035 27
0.470505 26
•
•
•
•
•
The following coupons should be attached to the securities in bearer form when tlle1
surrendered:
Securities
3-1/4~ ctf. B-1964, 4-3/4% note A-1964,
3-3/4~ note D-1964, and 3-3/4% bond 1966
4~ note A-1966, 3-5/8% note B-1967, and 3-3/4i note A-I967
4.
Coupons to be atta~
Nov. 15 , 1963, and sub'"
Feb. 15, 1964, and sub'"
Payment:
Payment for the new securities must be completed by September 18, 1963. The new"
ties will be delivered September 18, 1963. Where the table in the preceding ~
shows a net amount to be collected from subscribers such amount should acc~
subscription. Where the table shows a net amount payable to subscribers tbe ~
be made by the Treasury, if bearer securities are surrendered following their fj
and if registered securities are surrendered following discharge of registrati<lll
a~cordance vith the assignments on the securities.
reducea Dy "nt: !:WJVUU" v.... IILl<::: }R1ymenl;.
2
Terms and Conditions of the Advance Refunding Offer
L.
To all holders of the following outstanding Treasury securities:
Remaining term
Final maturity
)escription of securities
)-1/4~
certificate B-1964
1-3/4% note A-1964
5-3/4~ note D-1964
5-3/4~ bond 1966
1,%
note A-1966
5-sjsi note B-1967
5-3/4% note A-1967
2.
Issue date
date
1963
July 20, 1959
June 23, 1960
Nov. 15, 1960
Feb. 15, 1962
March 15, 1963
Sept. 15, 1962
15, 1964
May 15, 1964
.May 15, 1964
May 15, 1966
Aug. 15, 1966
Feb. 15, 1967
Aug. 15, 1967
to maturity
Yrs. - MJs.
Lin b1li11
$S.7
8
May
May l5,
Amouat
outstaJid1l
8
8
'.9
3.9
8
11
5
2
2
3
3
3.6
4.5
4.3
5.3
11
New securities to be issued (or additional amount of an outstanding issue):
Description of securities
Amount
outstanding
_I_s--.;s;,.-u_e_da_t_e_ (in bi1!:ions) Interest startsli Interest
3-7j8~
bond of Nov. 15, 1968 Sept. 15, 1963
bond of Aug. 15, 1973 Sept. 15, 1963
4-1/8~ bond of May 15, 1994~ April 18, 1963
4%
$0.3
Sept. 15, 1963
Sept. 15, 1963
Sept. 15, 1963
1/
2/
~
Interest on the securities surrendered stops on September 15, 1963.
Callable on and after May 15, 1989.
First interest payment will be May 15, 1964.
3.
Terms of the exchange:
pal!!
May 15 & ~T.
Feb. 15 & Au&.
May 15 & loT.
Exchanges will be made on the basis of equal face amounts, with payments by the
Treasury, and with adjustments of accrued interest to September 15, 1963, on the s~
ties surrendered and on the additional issue of bonds (per $100 face amount), 88 indie
below:
Amounts to be paid to or bl subscribers
Payable
On. account of
to
accrued interest to 9L15L63
Net amount
•
subscriber
Payable
Payable
•
••
on account
••
to
!!:l
~
of purchase subscriber • subscriber
To be
To be •
of
price of
•
collected
•
on
paid •
on
maturlt
securities
fran
securities • securities
to
to be
subto be
to be
subIrs ....
scriber_
issued
•
exchanged
:.:.::-issued
scriber •
·
·
0
0
Securities
to be
exchanged
·
·
0
0
FOR THE
3-l/4~
4-3/4~
3-3/4~
ctf. B-1964
note A-1964
note D-1964
$0.65
1.60
0.95
3-7L8~
$1.086277
1.587636
1.253397
reduced by the amount or 'the paymem:;.
·
-
BONDS OF 1968
$1.736277
3.187636
2.203397
4 4 •
4 -
TREASURY DEPARTMENT
FOR IMMEDIATE RELEASE
September 4, 1963
ADVANCE REFUNDING OFFER
The Treasury today announced that it will offer holders of $32.1 billion of out.
standing Treasury securities an opportunity to extend their holdings at attractive yielda
Of this total, $23.0 billion are held by the public.
The current of'f'ering combines a junior advance refunding with a "prerefunding "
that is, an advance refunding of' issues maturing within the next 12 months.
'
Holders of securities eligible for exchange have the option of exchanging them, u
of September 15, 1963, (with payment for the new bonds to be completed by and d.el1ve!'1 te
be made on September lS) for three new issues as follows:
Securities eligible for exchange
and their maturity dates
Securities offered in exc~e
and their maturity dates
ctfs., B-1964
4-3/4% notes, A-1964
3-3/4% notes, D-1964
Prerefunding
5/15/64)
3-7/ei bonds, 1968 (new issue)
ll/~~
5/15/64)
4%
bonds, 1973 (new issue)
8/~/I
5/15/64)
4-l/ai bonds, 1989-94 (addl. issue) 5/~/89"
3-3/4'/0
4%
3-5/8'/0
Junior" Advance Refunding
5/15/66)
a/15/66)
4%
bonds, 1973 (new issue)
8/~~
2/15/67)
4-1/8% bonds, 1989-94 (addl. issue) S!lfj!89.'
e/15/67)
3-1/4i
II
3-3/410
bonds,
notes,
notes,
notes,
1966
A-1966
B-1967
A-1967
The exchanges will be made on the basis of par for par with accrued interest adjd
menta as of September 15, 1963, and with cash payments to subscribers which will .",mately equalize current market values among eligible issues having different coupoul
maturities, and provide an attractive exchange value for each of the issues offered.
amount of the offering will be limited to the amount of securities accepted in excblll!
Cash subscriptions are not invited.
The exchanges will not be treated as a sale and purchase for tax purposes; them
there will be no recognition of gain or loss for Federal income tax purposes 801el1 II
account of the exchange of old for new securities. Details are presented in the roll'l
paragraph No.9.
The subscription books vill be open beginning M:>nday, September 9) and will reII1
open through Friday, September 13, 1963, for all classes of subscribers.
Further details of the offering, including amounts of cash payments due to IllblCl'l
and the amounts of accrued interest adjustments, are described below.
D-960
TREASURY DEPARTMENT
..:
o
•
-
,
dMEDIATE RELEASE
September 4, 1963
ADVANCE REFUNDING OFFER
The Treasury today announced that. it viII o"ffer holders of $32.1 billion of' outng Treasury securities atl opport.unity to extend their holdings at attractive yields.
s total, $23.0 billion are held by the public.
le current offering combtnes a jun:lor advance refunding with a "prerefunding,"
" an advance refunding Clf issues maturing within the next 12 months.
Jlders of securities el:lgible for E!Xchange have the option of exchanging them, as
ember 15, 1963, (with )?flyment i'or the new bonds to be completed by and delivery to
on September 18) ror three ne\\r iE~sue8 as follows:
ies eligible for exchange
their maturity dates
atts., B-l964
notes, A-1964
'3.otes, D-1964
Securities offered in exchange
and their maturity dates
Prere fUnding
5/15/64)
3-7/8% bonds, 1968 (new issue)
11/15/68
5/15/64}
4~
bonds, 1973 (new issue)
8/15/73
5/15/64}
4-1/8% bonds, 1989-94 (addl. issue) 5/15/89-94
Adv8.nce Re funding
)onds, 1966
lotes, A-19G6
lotes, B-1967
lotes, A-1967
5/15/66)
8/15/66}
2/15/67)
8/15/67}
4~
4-1jai
bonds, 1973 (new issue)
8/15/73
bonds, 1.989-94 (adell. issue) 5/15/89-94
exchanges will be made on the basis of par for par with accrued interest adjustof September 15, 1963, and with cash payments to subscribers which will approxi~allze current market values among eligible issues having different coupons and
:s, and provide an attractive exchange value for each of the issues offered. The
r the offering will be limited to the amount of securities accepted in exchange.
Jcr1ptions are not invited.
exchanges will not be treated as El sale and purchase for tax purposes; therefore,
1 be no recognition of gain or loss for Federal income tax purposes solely on
f the exchange of old for new securities.
Details are presented in the following
NO.9.
subscription books will be open bE~ginn1ng Monday, September 9, and will remain
19b Friday, September 13, 1963, for all classes of subscribers.
ler detai1a of the offering, inc1.uding amounts of cash payments due to subscribers,
~untB of accrued interest adjustments, are described below.
Terms and Conditions of the Advance Refunding Offer
1.
To all holders of the fol1oving outstanding Treasury securities:
DeBcription of securities
3-1/4'~
4-3/4%
3-3/4%
3-3!4cj,
4i
3-5/8%
3-3/4%
2.
certificate B-1964
note A-1964
note D-1964
bond 1966
note A-1966
note B-1967
note A-1967
Issue date
15, 1963
July 20, 1959
June 23, 1960
Nov. 15, 1960
Feb. 15, 1962
M9.rch 15, 1963
Sept. 15, 1962
May
Final maturity
date
May 15, 1964
May 15, 1964
M9.y 15, 1964
May 15, 1966
Aug. 15, 1966
Feb. 15, 1967
Aug. 15, 1967
Remaining term
to maturity
Yrs. - fus.
AmoUllt
out stand
1Jn b1!!!
8
8
2
8
8
2
11
3
3
5
$5.7
•• 9
3.9
3.6
4.S
4.3
5.3
11
New securities to be issued (or additional amount of an outstanding issue):
Amount
Descrl~tion
of securities
Issue date
3-7/8% bond of Nov. 15, 1968 Sept. 15, 1963
4~
bond of Aug. 15, 1973 Sept. 15, 1963
4-1/8~ bond of May 15, 1994~ April 18, 1963
outstanding
(in billions 2 Interest starts!! Interest N
$0.3
Sept. 15, 1963
Sept. 15, 1963
Sept. 15, 1963
!I
~!
~
Interest on the securities surrendered stops on September 15, 1963.
Callable on and after May 15, 1989.
First interest payment will be May 15, 1964.
3.
Terms of the exchange:
May
lS
&."
Feb. 15 &'"
May 15 & ~
Exchanges will be made on the basis of equa.1 face amounts, vi th payments by thlt
Treasury, and with adjustments of accrued interest to September 15, 1963, on the seq
ties surrendered and on the additional is:me of bonds (per $100 face amount), as iDdI
below:
Amounts to be Eaid to or bl subscribers
Payable
On account of
to
accrued interest, to 9/15/63
Net amount
subscriber
Payable
Payable
on account
to
••
Ex
of purchase subscriber
To be
subscriber
To be :
price of
on
on
paid •• collected
ma~
securities
securities
from
securities
to
to be
subto be
to be
Bub- :
issued
scriber !!!:l
jssued
exchanged
scriber
~
Securities
to be
exchanged
-
FOR THE 3-7L8~ BONDS OF 1968
3-1/4~ ctf. B-1964
4-3/4~ note A-1964
3-3!4~ Dote D-1964
$0.65
1.60
0.95
$1.086277
1.587636
1.253397
$1. 736277
3.187636
2.203397
,,
4
7:
v'
ontinued)
Amoux:~s to be paid to or ol subacrib,ers
Payable
On account of'
to
accrued interest_~o 9!15L63
Net amount
subscriber
Payable
Payable
•
on account
to
•
El
of purchase subscriber
Extension
subscriber
To be
To be
price of
on
of
on
paid • collected
maturity
securities
securities
securities
f'l'om
to
to be
to be
to be
BUUsubscriber Yrs. -~JOs.
issued
exchanged •
scriber
issued
--.--------~
~
0
··
·- -
·
·
~
$
:urities
iO
be
~hanged
G
&
-~-
0
6
-~-
FOR THE 4% BONDS OF 197.:2.
ctf.
note
note
bond
Ilote
lote
lote
B-1964
A-1964
D-1964
1966
A-1966
B-1967
A-1967
$1.15
2.10
1.45
1.15
1.80
0.40
0.70
$1.086277
1.587636
$2_236277
3.687636
2.703697
2.403397
1.2~i3397
1.253397
0.336957
0.305367
0.315897
2,,136957
00705367
1.015897
':l
9
9
9
v
7
7
3
0
6
6
6
0
30
0
0
:5
3
FOR THE 4-1L8~ BONDS OF 1989-94
:tf.
lote
lote
lond
.ote
ote
ote
B-1964
A-1964
D-1964
1966
A-1966
B-1967
A-IS67
$1.35
$1.086277
2.30
1~587636
1.65
1.35
1.253397
1.253397
0.336957
0.305367
0.31.5897
2~OO
0 .. 60
0.90
follOWing coupons should be attache<l
$1.686402
1.686402
1.686402
1.686402
$0.749875
2.201234
1.216995
1.686402
v.650555
$O~ 761.035
30
28
27
27
0,,470505
26
0.916995
1.686402
1.686402
'1;0
30
0
0
9
3
9
'the secur:!.ties in bearer form ""hen they are
~endered:
Securities
f. B-1964, 4-314~ note A-1964;--note D-1964, and 3-3/4% bond 1966
-1966, 3-5/8% note B-1967, and 3-3!4i note A-1967
COUPOllS
to be attached
............
--~---------.-
----.,,~~
.... --,~-
Nov. 15, 1963, and subseqUent
Feb .. 15, 1964, and subsequent
at:
.1t for the new securities must be completed by September 18, 1963e The new securi.··
rill be delivered September 18, 1963. Where the table in the preceding paragrc,ph
a net amount to be collected from subscribers such amount should accompany the
iption. Where the table shows a net amount payable to subscribers -t.he 1)8yment vlill
e by the Treasury, i:f bearer .securities are surrendered :foD"oYing their acceptanc:t,
registered securities are surrendered folloving discharge of :.r-egistration ia
ance with the assignments on the securit1es~
,-?77
Li::i-'c,·~tlU!l
on ~'-- o\.:!~t of .. c.u:::ii:ies to be issued:
1:10 [':~xut of LCCLtritir:~~ to 0(; issued unucr this of1' erin 3 Ifill be 11111itcJ. to the B.::Ju
of the eli Cib1c securi tic:.; te~K~crcd in exchn.nc;e and ncccptccl.
6.
Books open for subscriptions 1'or the ne'''' securities:
The books will be o:p:::l for the receipt of subscriptions from I·:Onday, Septe.mber 9 tm
Friday, September l3. Subscriptions placed in the I;;8.il by midni[;ht, Septe!llber
addressed to D.Dy Federal TIcscrve B·'J.n1\. or Brcnch or the Trc;).surer, U. S., Hash.
D. C. 20220, will be considered as timely. 'I'he use of registered mail 1s reco_
for_~he sec_l!-~i~y holders' protection in s\"lb;nii~ting securities to be exchanged.
13
If securities eligible for exch'J.n~e are pledGed with u St:3.te or Federal Government If
or authority and such sccuri tics cam:.ot or \-rill not be released by such authority to
pledgor in time for use in makinG pa.yrcent :for the securities offered in this exeh.llw
the pledc;or may, nevertheless, enter a Gubscription. Such subscriptions should be.
companied by a letter sic~ncd by nn autho:r'ized official of the pledcor explaining"
cumstonces and, if the o.u-'.:;hority viII not release the secur1"ties, a request and nil
zation for the Federal. Reserve :C:mk, or Branch, or the Treasurer o:f the U. S. (aea
to where the 6ubscriptlon is directed) to deliver the new securities to the State or
Federal authority in exch'J.nce :for the old securities held by such authority.
7.
Requirements applicable to subscriptions:
Subscriptions ,dl.l be received at the Federal Reserve Banks and. Branches and at the
Office of the Treasurer of the United States, Hash1ngton, D. C. 20220. Banking 1JuI
tions generally may submit subscriptions for account of customers. All subscriben
questing registered securities will be required to furnish appropriate ident1~
numbers as required on tax returns and other documents submitted to the Internal Be
Service.
8.
Denominations and other
character~stics
of new securities:
The bonds will be issued in denominations of $500, $1,000, $5,000, $10,000, $100,Q»
and $1,000,000 in coupon and registered forms. The bonds Will be acceptable to s~
deposits of public moneys.
9.
Nonrecognition of gain or loss for Federal income tax purposes:
(a) General -- The Secretary of the Treasury has declared pursuant to section 18
of the Internal Revenue Code that no gain or 10S8 shall be recognized for Federal
come tax purposes solely on account of the exchange of the securities; howeve;J •
l031(b) of the Code requires recognition of any gain realized on the exchange to
tent that money (other than interest) is received by the security holder W co'with the exchanee as indicated in (b).
(b) '{here the securities t_? be issued are o:ffered by the Treasury with 8 pa~
the investo:r: -- 11' the :fair market value 11 of the securities to be issued P1Ulof
amount p.'3.id to the investor (discount) exceeds the cost basis to the investor
securities to be exchanged, such gain (but not to exceed the amount of the ~,.
must be recognized and accounted for as gain for the taxable year of exchange••
carry the new securities on his books at tbe same amount as he 1s nov C8~
securities except that he will reduce the cost basis by the amount of the pa~
increase it by the amount of the gain recognized. If the :fair market value of ol
securities plus the amount of' the payment does not exceed the cost basis of thesecI
securities, the basis in the new securities vill be the cost basis in the old
reduced by the amount of the payment.
!7
The mean of the bid and asked quotations on date . . . . . .ilajl~~ liir... Iillbmitted.
5
c)
Gain to the extent not recognized under (b) (or loss), if any, upon the old securi-
lea surrendered in exchange will be taken into account upon the disposition or redempion of the new securities~_JSee appendL"C to paragraph 9 attached.)
~~eral estate tax o~tion on the 4-1/8~ bonds of 1989-94 -- The 4-1/8% bonds of 1989-94
ill be redeemable at par and accrued interest prior to maturity for the purpose of
s1ng the proceeds in payment of Federal estate taxes but only if they are owned by the
ecedent at the time ~f his death and thereupon constitute part of his estate.
~ok
value of new securities to banking institutions:
le Comptroller of the Currency, Foa.rd of' Governors of' the Federal Reserve System, and
le Federal Deposit Insurance Corporation have indicated to the Treasury that bank.s
lder their supervision may place the new securities received in exchange on their books
; an amount not greater than the amount at which the eligible securities surrendered
r them are carried on their books plus the amount of premium, if any, paid on the new
:curities, or reduced by the amount of discount, if any, received by the subscriber
ld increased by the amount of gain, if any, which will be recognized as indicated in
ragraph 9.
mputation of reinvestment rate
~or
the extension
o~
maturity:
holder of the outstanding eligible securities has the option of accepting the
easury's excbange offer or of' hold:lng them to maturity. Consequently, he can compare
;: interest plus (or minus) any payment, other than the adjustment of accrued interest,
will receive resulting from exchanging now with the total of' the interest on the
19ible issues and 1-rhat he might obtain by reinvesting the proceeds of' the eligible
:urities at maturity.
income bef'ore tax for making the extension noW' through exchange will be the coupon
:es plus (or minus) any payment on the new issues. If' a holder of the eligible secuiea does not make the exchange he would receive the coupon rates on the eligible
ues to their maturity and would have to reinvest at that time at a rate equal to
t indicated in paragraph 13 below :for the remaining terms of the issues now offered,
order to equal the return (includ.ing any payment) he would receive by accepting the
bange offer. For example, it' the ;".)-3/4% bonds of 5/15/66 are exchanged :for the
bonds of 8/15/73, the investor receives 4% for the entire nine years and eleven
ths plus $1.15 (per $100 face value) immediately. If the exchange is not made, a
/4% rate will be received until May 15, 1966, requiring reinvestment of the proceeds
the 3-3/4's of 1966 at that time at a rate of at least 4.32% for the remaining seven
ra and three months, all at compound interest, to average out to a 410 rate for nine
C's and eleven months plus the $1.15 i.rrm1ediate payment.
This min:1Jnum reinvestment
~ for the extension period is shown ill the table under paragraph 13. The minimum
lvestment rates f'or the other issues included in the exchange are also shown in the
Le under paragraph 13.
!
13.
Paymeots
00
issue price and investment rates on the new bonds offered in exchange to uolders of the eligible
3-l/4~
e/rs
5/15/64
3-3/4~
4-3/4cfo
Notes
3-3/4~
Notes
5/15/64
5/15/64
5/15/66
FOR THE NEW'
Payments on account of $100 issue price to subscriber
A:cr~l'V"Iximate
$0.65
$0.95
3-7/8'f,
Bonds
4~
rlotes
8/lS/66
scc~rities:
3-5/81>
Notes
2/lE/67
3-3/4~
Notes
8/15/67
BONDS OF NOVEMBER lS, 1968
$1.60
investment yield from exchange date
(9/15/53) to maturity of bonds offered in exchange
based on price of securities eligible for exchange
!I
ApproXimate m1n~ reinvestment rate for the
extension period ~ --------------------------------
4.0~
4.02~
4.02~
4.14
4.13
4.13
FOR TEE NEW 4~ BONDS OF AUGUST 15 I 1973
Payments on account of $100 issue pr1ce to subscriber
Approximate investment yield from exchange date
(9/1S/63) to maturity of bonds offered in exchange
based on price of securities eligible for exchange
11
Approximate minimum reinvestment rate for the
extension period ~ --------------------------------
$1.15
$1.45
$2.10
$1.15
$1.80
$0.40
$0.70
4.15~
4.l4~
4.14~
4.15rfo
4.15~
4.15~
4.14~
4.22
4.22
4.22
4.32
4.34
4.32
4.36
FOR THE NEW 4-1/si BONDS OF MAY 15, 1989-94
Payments on account of $100 issue price to subscriber
Approximate investment yield
rram
extens~on ~r~od ~
~. Y1.~d
1. • •u..
$1.65
$2.30
$1.35
$2.00
$0.60
$0.90
exchange date
(9/1.5/63) to ma.turlty of" bonds offered in exchange
based on price of securities eligible for exchange
Approx:1.mate minimum re:1nvestment
$1.35
11
4.2~~
4.2~
4.2~
4.2l.~
4.21~
4.21;'
4.2~
4.24
4.24
4.24
4.28
4.29
4.28
4.29
and asked
p~ces (adjusted ~or payments on account or
rate1:or the
--------------------------------
t o nontaxab1e ho1der or be~ore tax.
Based on mean
Dr1.a_) a t Qaoa:>. O~ l l e p t . _ b.. It'" 3 . 1.96:5.
or b~d
APPENDIX TO PJ\RflGMPH 1;0. 9
NONRECCCNrrION OF GAnT OR LOSS FOR F:r::D:;;rv'\L n;COi,!E TAX PURPOSES
Where a bond is offered by the Treasury vi th a payment (other than the accrued interest
adjustment) to the investor.
Exa.mples:
1.
Asswne that:
(a)
The fair market value of the security offered by the Treasury on the date
the subscription is s~bm1tted 1s $99.50 (~er $100 face value).
The paymcnt to the subscriber (discount) on accoWlt o:f $100 issue price
is $.80.
(c)
The amortised cost basis of the security sl.u'rendered on the books of the
subscriber is $100.50 (per $100 face value). (It is assumed that the
security surrendered ~~s bOUGht at a price above $100.50 and that the
original premium was reduced prorate. over the period f'rom purchase date
to maturity. )
The sum of the fair market value of the security offered by the Treasury and
the payment to the subscriber is $99.50 + $.80 or $100.30. This is less than
the cost basis of the issue surrendered, therefore, no gain is recognized.
The new issue will be entered on the books of the subscriber at a cost basis
of $99.70, the cost basis of the issue surrendered less $.80. The gain or loss
between this cost basis and the proceeas of a subsequent sale or redemption
of the new issue will be a capital gain or loss to 0.11 investors, except those
to whom the securities are stock in trade. Under present law, if the combined
time that the security surrendered and the new security received in exchange
were held exceeds 6 months, the capital gain or loss is lor~-term, otherwise
it is short-term.
2.
The assumptions are the same as in example 1 except that the payment
(discount) to the subscriber is now $1.20 (per $100 face value) instead of
$.80 in example 1.
The sum of' the fair market value of the new securjty re~e1ved in exchange by
the subscriber plus the $1.20 ~~yment (discount) is $100.70. This exceeds
the cost basis of the security surrenclered by $.20. This excess is a
recognized gain reportable for the Y"=€~r in 'Hhich the exchange takes place.
The gain is a capital gain except to those to whom the securities are stock
in trade. Under present law, if the time the security surrendered was held
exceeds 6 months, the capital Bain is long-term, otherwise it is short-term.
The subscriber loTill carry the new issu.e received in exchange at a cost basis
e9ua1 to the basis of the issue surrendered ($100.50), less the payment
(~1.20), plus the amount of the recogn.ized gain ($.20)" or ($100.50
$1.20 + $.20) $ 99.50.
:5.
The assumptions are the same as In example 1, except that the cost basis on
the books of the subscriber, of the security surrendered is $99.00 (per $100
face value) instead of $100.50 in example 1.
The sum of the fair market value of the ne'" issue received in exchange by the
subscriber plus the $.80 paymen.t (discount) is $100.30 (as 1n example 1). Th1~
exceeds the $99.00 cost basis by more than $.80. However, the amount of the
gain reportable for the year of' the exchange is $.80, since the amount of gain
recognized cannot exceed the amount of the paynlent. The nature of the
recognized gain and its treatment is the same as in example 2.
In this case, the subscriber will enter the new security received in exchange
on his books at~99_QOJ th~ w~-~st basis as the security surrendered.
Tuble 1.
Payments to and by the Subscriber in the September 1963
Advance Refundins
(In dollars per ~100 of face value)
-
Securities e1icible
for exchanGe
:Adjustment:
Accrued interest
: payments : -=-_t~0":,",,3_e-=p--:t-=e_m_be-:-r~1.;..51-1......;1...;;9~6=3-;--_
Net amoullt
:
to
Payable
Payable:
Net
to be ~1d
:subscriber:
to
by
accrued :
sub-: sub: interest:
: (on account of
scriber
scriber
payable - - - - purchase
on
on
to
: price of : issues : offered: sub.
To
. J
offered : to be
: issues : scriber ; Subscriber ;SUblC
issues) : exchanged:
:
1/
IIPre-refunding":
For the 3-7/8% bond, November 15, 1968
3 -1/4j~ Certificate, 5/15/6L~.
4- 3/4:~ Note, 5/15/64 •••••••
3-3/Lt~~ Note, 5/15/64 ••••.••
3-1/4~ Certificate, 5/15/64.
4-3/4~ Note, 5/15/64 •••••••
3 - 3/11-p Note, 5/15/64 •••••••
.650000
1.600000
.950000
1.086277
1.587636
1.253397
1.150000
2.100000
1.450000
For the
1.086277
1.587636
1.253397
1.086277
1.587636
1.253397
4~i
bond, August 15,
1.086277
1.587636
1.253397
1.736277
3.187636
2.203397
1973
2.236277
3.687636
2.703397
For the 4-1/8jj bond, Nay 15, 1989-94
3-1/h~~ Certificate, 5/15/64.
4-3/4j~ Note, 5/15/64 •••••••
3-3/4~ Note, 5/15/64 •••••••
11
1.350000 i1.086277
2.300000 i 1.587636
1.650000 )1.253397
I
Junior refunding":
3-3/4:~ Bond, 5/15/66 •••••••
4~~ Hote, 8/15/66 •••••••••••
3 -5/8~; Note, 2/15/67 •••••••
3 - 3/1~~~ Note, 8/15/67 •••••••
1.150000
1.800000
.400000
.700000
1.686402
1.686402
1.686402
-.600125
-.098766
-.433005
.749815
2.20123 4
1.216995
For the 4~b bond, August 15, 1973
:1. 253397
1.253397 2.403397
.336957
.336957 2.136957
.305367
.705367
.305367
.315897
1.015897
.315897
For the 4-1/8% bond, toBy 15" 1989-94
3 - 3/ 4:o ::,ond, 5/15/66 •••••••
~:~ Note, 8/15/66 •••••••••••
3-5/8~~ ~ote, 2/15/67 •••••••
3-3/h~~ note, 8/15/67 •••••••
1.350000 :1.253397
2.000000
.336957
.600000
.305367
.900000
.315897
1.686402 -.433005
1.686402 -1.349445
1.686402 -1.381035
1.686402 -1.370505
Office of the Secretary of the Treasury
Office of :Jebt ::..nalysis
J:./
i:inus siGU indicates net accrued interest payable by the subscriber.
.916995
.650555
September:
:
:
~ppLV~""e
~veB"1;men"1;
y:Le.l.a.
:
Approx:1.mate re:Ulvestment rate
from 9/~5/63 to maturity!!
:
3-1/4~ Certificate 5/15/64 ••••
4.0210
4.15%
4.21%
:
4.l4~
4.22%
4.24~
4-3/4% Note
5/15/64 ••••
4.02
4.14
4.20
··
4.13
4.22
4.24
3-3/4% Note
5/15/64 ••••
4.02
4.14
4.20
4.13
4.22
4.24
4.32
4.28
Securities e11g1ble
for exchange
for
extens~on per~o~
:
"Prerefundi~:
IIJunior"
··
refundi~:
3-3/4% Bond
5/15/66 .•••
4%
Note
8/15/66 ••••
3-5/8% Note
3- 3/4~~ Note
Not eligible
4.21
\I
4.15
4.21
II
4.34
4.29
2/15/ 67 .....
"
4.15
4.21
n
4.32
4.28
8/15/67 .....
"
4.14
4.20
If
4.36
4.29
Office of the Secretary of the Treasury
Office of Debt Analysis
~
~
1/
: Not eligible
4.. 15
September 4, 1963
Yields to nontaxable holders (or before tax) on issues offered in exchange based on prices of eligible
iSBues (adjusted for payments on account of issue price). Prices are the mean of bid and ask quotations
at noon on September 3, 1963.
Rate for nont~(able holders (or before tax).
Reopening of an existing security.
7
August 1973 will receive, in the form of an immediate payment
~ f::; ~ t'7'i'
NoT otJ~ 'i
from the Treasury 'A the full value of hi s ~ A!i:~lzei coupon from
r
now until its maturity next May)
Off
mffi~
in addition,
e~li£ an investment yield of more than
prior to the
announe~--,of
Pi
4-1/8% on a security
which will mature in 9 years and 11 months
~-da}l
~ril1
--chi,s
#
~based eM AQQA pri~
{)f£ering1-~
Details in the Advance Refunding
The subscription books for this offering will be open
beginning Monday, September 9, and will remain open through
Friday, September 13, 1963, for all classes of subscribers.
Payment date is Wednesday, September 18, 1963, with interest
adjustments as of September 15.
The amounts of cash payments due to subscribers under eac
possible exchange, the amounts of accrued interest adjustments)
and the investment yields and reinvestment rates are set forth
in the attached tables.
Other details relating to this advanci
refunding may be found in the formal offering circulars.
6
opportunity to exchange their holdings in this issue for
longer-term securities bearing lower coupon rates of interest _
ranging from 3-7/8% for the 1968 maturity to 4-1/8% for the
1989-94 maturity.
The financial advantage which will accrue
to the holders of the 4-3/4/0 notes in making this exchange is,
however, as grea;: as the financial advantage offered to the otlv
lower coupon eligible issues maturing in May
certificates and the 3-3/4% notes.
196~,
the 3-1/4%
This comparability among
the various options is accomplished by the establishment of
different adjustment payments to be paid by the Treasury.
III
the present case, full allowance has been made for the differenl
in interest over the period from now until next Mayas between
the 4-3/4% issue and any of the 3-7/8%, KS. 4% and 4-1/8% issues
offered in exchange.
These adjustments are based on the
differences between the current market values of the eligible
securities and the indicated current market values of thosebd
offered in exchange.
In addition, the adjustment payment also
includes an amount sufficient to improve substantially the
effective yield on the new issues over the current market level
of yields for the maturities involved.
As an illustration, a holder of the 4-3/4% notes of MaY
1964 who exercises the option to exchange into the 4% bonds of
5
1960, despite the fact that the total outstanding Government
debt has risen by $15.1 billion during that period.
In short, the debt restructuring accomplished thus far
in calendar 1963, together with the restructuring which will be
•
accomplished by this advance refunding, should assure that the
budget deficit will be financed in a non- inflationary manner,
and should contribute further toward this country's economic
growth and its external balance.
Advance Refunding High Coupon Issues
Typically, advance refundings have involved the exchange
of outstanding securities for new issues carrying higher coupon
rates of interest.
However, as advance refunding continues to
evolve as a debt management tool, there will be occasions in
which holders of outstanding high-coupon securities will be
offered exchange options involving new issues with lower coupon
rates of interest.
It is important, therefore, that investors
become fully aware of the advantages which can accrue to them
in an advance refunding exchange of relatively high coupon
issues for issues carrying lower coupons.
In the present advance refunding, holders of the 4-3/410
'Vf
notes of May 1964, for example, are being offered an attractl
4
conducted under comparable market conditions suggest that such
""~'1{
operations have a helpful catalytic effect in testing and
It..
}t1).S:)K ( / I LJ l
clarifying the capacity of the long-term market without any
"
appreciable effect on long-term interest rates.
Debt management operations during the first seven months
of calendar 1963 have laid a strong foundation for the
achi~~
K-.
of ",Treasury's obj ective of non-inflationary financing of the
budget deficit.
Despite 1!IsfIIX'Oa: Qtli increasing use of
Treasury bills during the January-July period of this year, the
Treasury has reduced the total debt maturing within one year
by $2.0 billion over the same period.
The debt maturing
one-to-five years has been reduced by $3.6 billion.
~
During th
same span of time, the debt maturing beyond five years has been
increased by $6.1 billion.
ItI \"1
lll.e change in structure has been
~~~
pctt"allried
by a sharply
reduced reliance on the banking system in financing the deficit
The estimated holdings of Government securities by all commerci
banks have actually declined by $4.3 billion during the first
seven months of calendar 1963.
Perhaps even more significant,
commercial bank holdings of Government securities on July 31, l
1;vere only about $100 million higher than they were at the end
c
3
requirements and the needs of the balance of payments situation
I
but also to assure that the growth of the very short-term debt
'Tu..e TQ € J>.'-;. vo..Y
does not exceed the needs of the economy.
..a must also attempr
from time to time, to reduce the debt in the one-to-five-year
maturity area, in order for the market to be able to absorb
readily future borrowing within that area,.
pm Li8tiTai:~ !he
market "conditions in-the fUiMJlae.
In the pre-refunding portion of this operation, the
Treasury is seeking to reduce the total size of the security
issues maturing on May 15, 1964, of which $8.0 billion are held
by the public.
This is a larger quarterly maturity tMn
any other now outstanding.
The junior advance refunding, by
reducing the amount of debt maturing in 1966 and 1967, will hel
to simplify the Treasury's problems of refunding maturing oblig
tions in the years immediately ahead.
With the economy still operating well below capacity
levels, the Treasury has a continuing concern that its actions
shall not reduce the availability of capital for construct~e
inve s tment nor p lace upward pres sures on long -term interest
rates.
Past experience with advance refundings which were
2
The Background of this Advance Refunding
This advance refunding is another part of a continuing
debt management program designed to finance the Government's
requirements at the lowest practicable cost, while also
furthering the growth and expansion of the American economy,
helping to restore balance of payments equilibrium, and
developing a maturity structure of the debt itself that will
contribute to flexible operations at minimum
cost~
in the futur
By offering holders of outstanding issues with coupons of
3-1/4/0 to 4-3/4/0 an opportunity to invest for longer periods
at coupon yields of 3-7/8/0 to 4-1/8%, the Treasury will accomplish further needed restructuring of the outstanding
d~t
as a coordinate part of its program for carrying out these
inter-related objectives.
During the remainder of calendar 1963, the Treasury must
raise a net amount of approximately $6 billion in cash.
The
present intention is that the great bulk of this cash financial
will be accomplished through offerings of Treasury bills,
possibly including tax anticipation bills.
The Treasury will
of course, adj ust the timing and magnitude of these borrowing
operations with a view not only to the pattern of its cash
- 2 -
Background of this Advance Refunding
b ..
This advance refunding is another part of a continuing debt
l11anagemen t program des igned to finance the Gove rnmen t' s requirements
al the Imves t practicable cost, while also furthering the grmvth and
vxpansion of the American economy, helping to restore balance of
payments equilibrium, and developing a maturity structure of the debt
itself that will contribute to flexible operations at minimum cost in
the future.
By offering holders of outstanding issues with coupons of
3-1/4% to 4-3/4% an opportunity to invest for longer periods at
coupon yields of 3-7/8% to 4-1/8%, the Treasury will accomplish
further needed restructuring of the outstanding aebt as a coordinate
part of its program for carrying out these inter-related objectives.
During the remainder of calendar 1963, the Treasury must raise
a net amount of approximately $6 billion in cash.
The present
intention is that the great bulk of this cash financing will be
accomplished through offerings of Treasury bills, possibly including
tax anticipation bills.
The Treasury will, of course, adjust the
timing and magnitude of these borrowing operations with a view not
only to the pattern of its cash requirements and the needs of the
balance of payments situation, but also to assure that the growth of
the very short-term debt does not exceed the needs of the economy.
The Treasury must also attempt, from time to time, to reduce the debt
in the one-to-five-year maturity area, in order for the market to be
able to absorb readily future borrowing within that area.
In the pre-refunding portion of this operation, the Treasury is
seeking to reduce the total size of the security issues maturing on
May 15, 1964, of which $8.0 billion are held by the public. This is
a larger quarterly maturity than any other now outstanding. The
junior advance refunding, by reducing the amount of debt maturing in
1966 and 1967, will help to simplify the Treasury's problems of
refunding maturing obligations in the years immediately ahead.
With the economy still operating well below capacity levels, the
Treasury has a continuing concern that its actions shall not reduce
the availability of capital for constructive investment nor place
upward pressures on long-term interest rates.
Past experience with
advance refundings which were conducted under comparable market
conditions suggest that such operations mav h8ve a helpful catalytiC
effect in testing and clarifying the absorptive capacity of the
long - term marke t wi thou t any apprec iab le e ftec t on long -term interest
rates.
""r ", ,. ~
; " ...=. /
l
~)
_
i·
~
.
I
,-.
,+-,; \
J
~
'" •• _
•
i
TREASURY DEPARTMENT
FOR HfHED lATE RELEASE
ADVANCE REFUNDING OFFER
The Treasury today announced tha t i t will offer holders of seVt~,
issues of outstanding Treasury securities an opportunity to extend
their holdings at attractive yields.
$23.0 billion of these securitie
are held by the public.
Including $9.1 billion of holdings by offici~
accounts, there are $32.1 billion of these issues outstanding.
The current offering combines a "junior!! advance refunding of
certain securities maturing in 1966 and 1967 with a "pre-refunding" oj
all securities maturing on May 15, 1964.
Holders of securities eligible for exchange will have the option
through all of next wee;, of exchanging them for three new issues as
£ollO\-vs:
Securities eligible for exchange
and their maturity dates
Securities offered in exchange
and their maturity dates
3-1/4/0 ctfs.,
5/15/64)
Pre-refunding
3 -7/8% bonds, 1968 (new)
3-3/4/0 notes,
5/15/64)
bonds, 1973 (new)
4-3/4% notes,
5/15/64)
3-3/4/0 bonds,
5/15/66)
4 G'/,o
notes,
8/15/66)
3-5/8/0 notes,
2/15/67)
3-3/4% notes,
8/15/67)
D-961
4-1/8% bonds, 1989 -94
(add1. issue)
Junior Advance Refunding
4/0
bonds, 1973 (new)
11/15/
8/151
5/15,
8/15,
4-1/8% bonds, 1989-94
5/15
(add1. issue)
TREASURY DEPARTMENT
-=
=
srn
[MMED rATE RELEASE
ADVANCE REFUNDING OFFER
The Treasury today announced that it will offer holders of seven
of outstanding Treasury securities an opportunity to extend
. holdings at attractive yields.
$23.0 billion of these securities
~ld by the public.
Including $9.1 billion of holdings by official
mts, there are $32.1 billion of these issues outstanding.
~s
The current offering combines a "junior" advance refunding of
in securities maturing in 1966 and 1967 with a "pre-refunding" of
ecurities maturing on May 15, 1964.
Holders of securities eligible for exchange will have the option
gh all of next week of exchanging them for three new issues as
ws:
:ies eligible for exchange
I their maturity dates
Securities offered in exchange
and their maturity dates
Pre-refunding
3-7/8;0 bonds, 1968 (new)
11/15/68
bonds, 1973 (new)
8/15/73
ctfs. ,
5/15/64)
notes,
5/15/64)
4%
notes,
5/15/64)
5/15/89-94
4-1/8% bonds, 1989-94
(addl. issue)
bonds,
5/15/66)
notes,
8/15/66)
notes,
2/15/67)
:totes,
8/15/67)
Junior Advance Refunding
4%
bonds, 1973 (new)
8/15/73
4-1/8% bonds, 1989-94
5/15/89-94
(addl. issue)
- 2 -
:!
Background of this Advance Refunding
This advance refunding is another part of a continuing debt
lagement program designed to finance the Government's requirements
the lowest practicable cost, while also furthering the growth and
)ansion of the American economy, helping to restore balance of
'ments equilibrium, and developing a maturity structure of the debt
,elf that will contribute to flexible operations at minimum cost in
future.
By offering holders of outstanding issues with coupons of
/4% to 4-3/4% an opportunity to invest for Jonger periods at
pon yields of 3-7/8% to 4-1/8%, the Treasury will accomplish
ther needed restructuring of the outstanding debt as a coordinate
t of its program for carrying out these inter-related objectives.
During the remainder of calendar 1963, the Treasury must raise
?t amount of approximately $6 billion in cash. The present
~ntion is that the grE:'at bulk of this cash financing will be
)rnplished through offerings of Treasury bills, possibly including
anticipation bills. The Treasury will, of course, adjust the
~g and magnitude of these borrowing operations with a view not
, to the pattern of its cash requirements and the needs of the
mce of payments situation, but also to assure that the growth of
very short-term deb t does not exceed the needs of the economy.
Treasury must also attempt, from tillle to time, to reduce the debt
he one-to-five-year maturity area, jn order for the market to be
to absorb read ily fu ture borrow iIlg \Vi thin tha t area.
In the pre-refunding portion of this operation, the Treasury is
ing to reduce the total size of the security issues maturing on
lS, 1964, of which $8.0 billion are held by the public. This is
~ger quarterly maturity than any other now outstanding.
The
)r advance refunding, by reducing the amount of debt maturing in
and 1967, will help to simplify the Treasury's problems of
lding maturing obligations in the years immediately ahead.
With the economy still operating well below capacity levels, the
ury has a continuing concern that its actions shall not reduce
vailability of capital for constructive investment nor place
d pressures on long-term interest rates.
Past experience with
2e refundings which were conducted under comparable market
tions suggest that such operations may h~ve a helpful catalytic
t in testing and clarifying the absorptive capacity of the
:erm market without any appreciable efteet on long-term interest
-- J -
Debt manag,L:'lllL'llt upl1ratiolls during thl" firs~ S('Vl'!\ lllUtilhs 01
lendar 1963 have laid a strong [ounddtion [or the achieVL'llll:l1t of till.'
easury's objective of non-inflationary financing uf the buclg;et
fieit.
Despite increasing use of Treasury bills during the
:1Udry -July per iod of th i s ye ar, the Trl:' aSlJ ry has re:>ducL'c/ UH' t U Cl I
::>t maturing within one:> YL:'ar by $2.0 billion Uver the samL:' pl:'ciod.
~ debt maturing in onl-'-to-five years has bet'n reduceu by ~?J.6 btlliull.
~ing the same span of tillle, the dL·bt l1laturing beyund five years has
~n increased by $6.1 billion.
This change in structure has been accompanied by a sharply
luced re 1 iance on the banking sy stem in [inanc ing the de fic it.
Thl'
:imatcd holdings of Government securitic's by all commercial banks
'e actually declined by $4.3 billion during the first Sl:'Vel1 IIlUnL:!ls
calendar 1963.
Perhaps even more sign i fi c an t, C ommerc i a 1 bank
dings of Government securities on July 31, 196J were only abuul
,0 million higher than they were at the end of 1960, despi u, th~
t that the total outstanding Government dtc>bt has risen by $15.1
1 ion during tha t per iod.
In short,
the debt restructuring accomplished thus far in
endar 1963, together with the restructuring which will be
omplished by this advance refunding, should assure that the budgl'l
icit will be financed in a nOll-inflationary manner, and should
tribute further toward this country's economic growth and its
~rnal balance.
!nee Re funding High Coupon Issues
Typically, advance rf:fundillgs have involved the exchange or
;tanding securities for new issues carrying higher coupon t-aLl'~;
_nterest.
However, as advance refunding continues to evolve- d~
,bt management tool, there wi 11 be occasions in whi ch ho] dVl-~; 01
tanding high-coupon secucities will be offered exchange opt iUH,'3
lYing new issues with lower coupon rates of interest.
It i~;
rtant, therefore,that i.nvestors become fully C\warc of the
ntagps which can accrue to them in an advance refunding ('xch~l!l)))L'
elatively high coupon issul:'S for issues carrying 10\V'L'r C:OUpl1l1~j"
In the present advance refunding, holders of the !+-J/4'J ll()Lt'~j u1
1964, for example) are bl:'ing offeced an attractict::' upporLuni ly
<:: C han get h (' i rho 1 din g s i n
t his iss u v r () r I o n g er - t L' r m Sec II r i L i l ' ,';
Lng lowE>r coupon rates of interE'st -- ranging [rom ')-} /'<.yt
L968 maturi ty to L'~-1/8% for the 19(3')-1)4 maturity.
Th('
Ie ial advan t-ag.~ ,,,,hi c h "vi 11 acc rue to the holde r S 0 [ ehe
fur
f% notes in llldking this exch<:mge is, hn\.v(,ver, as
[11\
Icial advantage offereJ to the other)
grt',lt
] l1\ver coupe)!)
<I:.
- 4 -
igible issues maturing in May 1964, the 3-1/4% certificates and the
3/4% notes. This comparability among the various options is
complished by the establishment of different adjustment payments to
paid by the Treasury.
In the present case, full allowance has been
je for the differences in interest over the period from now until
(t Mayas between the 4-3/4% issue and any of the 3-7/8%, 4% and
l/8% issues offered in exchange. These adjustments are based on the
:ferences between the current market values of the eligible
:urities and the indicated current market values of those being
:ered in exchange.
In addition, the adjustment payment also includes
amount sufficient to improve substantially the effective yield on
, new issues over the current market level of yields for the
urities involved.
As an illustration, a holder of the 4-3/4% notes of May 1964
exercises the option to exchange into the 4% bonds of August 1973
1 receive, in the form of an immedia te payment from the Treasury,
only the full value of his present coupon from now until its
Jrity next May, but, in addition, an investment yield of more than
18% on a security which will mature in 9 years and 11 months.
lils in the Advance Refunding
The subscription books for this offering will be open beginning
lay, September 9, and will remain open through Friday, September 13,
I, for all classes of subscribers.
Payment date is Wednesday,
ember 18, 1963, with interest adjustments as of September 15.
The amounts of cash payments due to subscribers under each
ible exchange, the amounts of accrued interest adjustments, and
investment yields and reinvestment rates are set forth in the
ched tables. Other details relating to this advance refunding
be found in the formal offering circulars.
Table 1.
Payments to and by the Subscriber in the September 1963
Advance Refunding
(In dollars per $100 of face value)
.•
:AdJustment:
Net amount
to be paid
~urities
eligible
for exchange
'undingll :
For the
Certificate, 5/15/64.
Note, 5/15/61t- •••••••
Note, 5/15/64 •• ee • • •
3-7/8% bond,
.650000 1.086277
1.600000 1.587636
.950000 1.253391
For the 4~ bond,
Certificate, 5/15/64.
5/15/64 •••••••
Note, 5/15/64 •••••••
Note,
1.150000 1.086271
2.100000 1.581636
1.450000 1.253397
November 15, 1968
1.086217
1.587636
1.253397
August 15,
1.086277
1.581636
1.253391
1.736277
3.187636
2.203391
1973
2.236271
3.687636
2.703391
For the 4-1/8% bond, May 15, 1989-94Certificate, 5/15/64.
Note, 5/15/64 •••••••
Note, 5/15/64
0 ••••••
1.350000 1.086277 1.686402 -.600125
2.300000 1.587636 1.686402 -.098766
1.650000 1~253397 1.686402 -.433005
.749815
2.201234
1.216995
efundin.s" %
For the
5/15/66 , ......
8/15/66 •••••••••••
Note, 2/15/67 •••••••
~ote, 8/15/61 •••••••
Bond,
J
1.150000 1.253397
1.800000
.. 336957
.400000
.305367
.700000
.315897
4%
bond, August 15, 1913
1.253397
.336951
.305367
.. 315897
2.403397
2.136957
.705367
1.015891
For the 4-1/8% bond, August 15, 1973
~ond,
5/15/66 ......... .
8/15{66 ........... .
fote, 2/15/67 .......... ..
fote, 8/15/61 u . . . . . .
the Secretary
1.350000 1.253397 1.686402 -.433005
.336957 1_686402 -1.349445
2.000000
.600000
.305367 1.686402 -1.381035
.315897 1.686402 -1.370505
.900000
or the Treasury
rice of Debt Analysis
Sign indicates net accrued interest payable by the subscriber&
.916995
.650555
September 4, 1963
Securities eligible
for exch
e
~ a.ng
:
Approximate investment yiel.d
•
•
:
from 9/15/63 to maturity:!!
:
. _ .
47 Bqnd
: 8 15173
3-7/8% ~ond :
~/15/68
:
4-1/8%
Bond
: 5/15/89-94
nPrerefundinatt :
11
:
Approximate reinvestment rate
for extension perioid
3-1/8%
47 Bond
: 8 15173
Bond :
3/: 11{15/68
-
4-1/8~ Bond
5/15(09-9 4 ]/
:
3... 1/ 4%Certificate 5/15/64. ~,,~
4. 02i
4. 15%
4.21%
;
4.14~
4.22%
4.24%
4-3/4%
Note
5/15/64.c~~
1~.02
4.14
4.20
~
!~.13
4.22
4.24
3"3/4~'o Note
5/15/64,0,.
4.02
4.14
4.20
~
4.13
4.22
4.24
4,. 32
4.28
I'll
4.34
4.29
I~
4.32
4.28
\'f
4.36
4.29
·
Junior" refunding:
~
3-3/4% Bond
5/15/66.~ ••
4%
.a/15/66~ ...
Note
Not eligibl~
It
0
4".15
4.21
4.15
4.21,
: Not eligible
~
~
,
3"'5/8% Not€'
2/15/67 .• ~ e
III
4.15
4.21
·
3-3/4% Note
8/15/67 .• e ..
III
4.14
4.20
·
Office of the Secretary of the Treasury
Office of Debt Analysis
Y
:
~
September 4, 1963
Yields to nontaxable holders (or before tax) on issues offered in exchange based on :prices of eligible
issues (adJusted for payments on account of issue price). Prices are the mean of bid and ask quotations
at noon on September 3, 1963.
Y Rate for nonta.."C8ble holders (or before tax:).
]/ Reopening of an exist1nP. security.
TREASURY DEPARTMENT
September 5, 1963
FOR IJ.1MEDIATE RELEASE
WITHHOLDING OF APPRAISEMENT ON
COPPER SHEErS
The Treasury Department is instructing customs field officers to
\.,ithhold appraisement of copper sheets from Yugoslavia pending a deter.
mination as to whether this merchandise is being sold in the United
States at less than fair value.
in the Federal Register.
Notice to this effect is being published
This merchandise is used for roofing.
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 nru.st be shown to
justify a. finding of dumping under the law.
The complaint in this case was received on March 1, 1963.
The
dollar value of imports received during the first 6 months of 1963 ws
approximately $460,000.
TREASURY DEPARTMENT
September 5, 1963
FOR IMMEDIATE RELEASE
WITHHOLDING OF APPRAISEMENT ON
COPPER SHEEl'S
The Treasur,y Department is instructing customs field officers to
withhold appraisement of copper sheets from Yugoslavia pending a determination as to whether this merchandise is being sold in the United
states at leas than fair value.
in the Federal Register.
Notice to this effect is being pub1ished
This merchandise is used for roofing.
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 March 1, 1963.
The
dollar value of imports received during the first 6 months of 1963 was
approximately $460,000.
TREASURY DEPARTMENT
September 9, 1963
FOR IMMEDIATE RELEASE
TREASURY DECISION ON 12-OUNCE CANNED LUNCHEON
MEATS UNDER THE ANTIDUMPING ACT
The Treasury Department has determined that 12-ounce canned
luncheon meats from Denmark 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 Denmark without regard to
~
question of dumping.
The dollar value of imports of the involved merchandise received
in the 1962 - 1963 period was approximately $2,500,000.
000
TREASURY DEPARTMENT
September 9, 1963
FOR IMMEDIATE RELEASE
TREASURY DECISION ON 12 -OUNCE CANNED LUNCHEON
MEATS UNDER THE ANTIDUMPING AClr
The Treasury Department bas determined that 12 -ounce canned
luncheon meats from Denmark 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 deter.mination
wi~
be published in
the Federal Reglstere
Appraising officers are being instructed to proceed with the
appraisement of this merchandise from Denmark without regard to aqy
question of
d~ingo
The dDlJ.a.r value of imports ot the
invo~ved
merchandise received
in the 1962 - 1963 period was approximately $2J500~OOO.
000
,
1-\
t~:L..'
~
.~.
:. ,.'
!;'-,
,. .
,
1__<1"1, __~!.:1!::'~_!2,-_~k
.;{
,.i
~.,
."·U',',
VJ.L~
3ILL ..J~
,--We
\ent .... t . . . . ..-!at .. . . . . . . lJ, lAJ.
whi_t.',
---.......
ell.... _ "".'.1
t.
tn. 1reoa.'.(ry ,A~3~ent. anrlQ_c»d laa' necilli *~
iftJII.l1r¥ ollia, l)Aft "r1d~ t,<:, tze ,tU ad\11tlcaal 1M_ ot 10M
aIk1 t .... o\'!'Wr .orios to ~ J..t".. d ,.. ~,t.eJa~J' 12, l~J.
wre opeueu ..ttt.'le !ed8r.;l .i.$erv.~. 00 ~~ber 'J.
f..l,}..J(),OUU,CXIl),
lG2-Pj bill,,_
01"'Ihe
the ......:oloo\1W, '))1 11-4&1' bWa aDd :.1"
oet.~il.
~
tooO.aoo.-. _ 'bll .'_1.,
of ta~' \-we . .riA• • ,.. .. a Co11_.
;l-d., l're;c8ur1 bW.
_~~t.~.i.~~r 12"t~
t ;::''Prox. "41
-riee~ __..l
_ •..• .....-.-.
·-de b
,. •
:'1.161
~9.1SO
lAPw
....-
.. ,
r _
3•
aate
.31.'"
••
I••
J.]6) i
t
J
=
t
J9.155
).lhli.!I I
49 peroellt of t.he uount otill-da)' bUl. lxLd t • • " t. ... 1. . _ . . . ~
46 ~rCQt of tn. 4l'«)ua\ ;;).f lLS2-da.t ~il.la bJA tv at. t.lIe ltAr ,.,... _ . . .pt..
.;v.rll~e
r
J1..tr1CJtJ.,!'ei1ed ?'or
1·~.\QIl
. . !oric
Pnllajelphla
<.aeftlaDd
i'(1d1aoDd
:.\laAta
;h1oa;o
Jt. ~ui.
ttiDDeapoll.
'*0. . 3 O;lt.1
..)all...
Jan A-ranaiaco
Total.
;:
)6,011 1 000
1';,J7,~2,00Q
AC~
~ ~l.ooO
:!J!:N.1M
874,.$4l,aoo
t
J6,7'}7,;y,)I
~1,1~1,OOO'
Jl,lt)8.0()i)
11,lO8,000
t
16,117 ,C()O
1.4,U1.ooo
JO,21;,,000
~h4,1~7,OOO
t
2), j()4,OOO
31,2lJ'-'.XIO
2).~.OOO,
1l,~42,QOO
I
li,7til,\X}I;J
11&U.;~,G\ki
18.111,OOi";
I
:U~957 ,aj2 ,000
J.l.)OO,Ul2.000!l
~
I,J~iiO
'It,m.7,911",
I.m.euo
14.6"''~7l1""
*
11&1~~..~'
:("1'111
lS.Sn.-
r
~).21.9.000;
16;,617,000
11,6)5,000
3J,b35,00J
J
t
:;,;.-.,,:
15........
•..,._
10,811,..
6,'JIa.I
IdlJeW
$1,1)), •
.-
!I IG&l.~~s 4267 ,Oll,\J[1\J n,"..,~ti t.i.... tea1en aeMpMcl .t, " . . M.,... IfW' " •
fi/ ~~Ilde~ ,i6j,27i,WJ ntmecatj.tl~1'f'e UDdin & • . . , . . . .t \lie ........._ " til
II ~" • C<'~C)I) 1".... ,,!, t ... $""'. lfHI~tf. aDd ter U. _ _ .... ~ w .....
t.._
~;.. :r<C' I;ill~ ·w~'llJ ~)r(,Yl(k
]lclJ.»l of ).41', tor
9l--M7 MUa,
J.Jlt, •
Itt2-dA J blUI. ~.at·.r.!d, A\~$ on bUll! a" quo\ed ~. ~ . , . . .-. •• 111.
t·.. ~t . t"r. rellltft-d t.c t!'"zt> rae.- aso1Ultr af t._ 81.11. ~
at I it, . . .
tr. &~r'>~t in"f:~t.,;'! an'1. t;$lr l.~'th ia ___1 ~ . , ..,. ..I ... " . ~
'.~ •..~.~ co~~tr4~t., ::-i!;.l.i8 ')n . .
ao\ea. aM M.C, _ I ........
.)[ 1.;;:.41l'X' t -:Hi. :':.~n ~:f.lt iny~at.ed. aDd ~ \!wt _Gel' et ..,. _1l1li
.i:1..~~;l. ,-b.l!l",~;t t'uri.»J t._, l-!.06 Actal D " r .1 dan 1A , . . , .......~",.
(>\;1l:.'cn.r."Lr...: if :~ON t~l! '-'r.e 2 f,:.oJl peri" 1. ' - 1.....
n
"'ili_\._,
TREASURY DEPARTMENT
REL'USE A. M.. NEWSPAPERS,
day, September 10, 1963.
RESULTS OF TREASURye S WEEKLY BILL OFFERING
The Treasury Department announced last evening that the tenders for two series of
sury bills, one series to be an additional issue of the bUls dated June 13, 1963,
~he other series to be dated September 12, 1963, which were offered on September 4,
opened at the Federal Reserve Banks on September 9. Tenders were invited ~or
00,000,000, or thereabouts, of 91-day bUls and for $800,000,000" or thereabouts, o:f
day bUls.
The details of the two series are as follows ..
8 OF ACCEFTED
6TITIVE BIDS:
High
IDw
Average
91-day Treasury bills
maturing December 12, 1963
&
Approx. Equiv. :
Price
Annual R a t e :
99.161
99.150
99.155
3.319%
3.363%
:
:
3.343%!/:
182-day Treasury bills
maturing March 12, 1964
Price
Approx. Equiv.
Annual Rate
98.262
98.238
98 .. 251
3.438%
3.485%
3.460%
!/
percent of the amount of 91-day bills bid for at the 1011 price was accepted
percent of the amount of 182-day bills bid for at the low price was accepted
TENDERS APPLIED FOH AND ACCEPl'ED BY FEDERAL RESERVE DISTRICTS:
trict
Appli.ed For
Acce;eted
• AEElied For
ton
$ 36,011,000 $ 23,461,000 • $
9,156,000
York
874,842,000
1,437,042,000
939,997,000
ladelphia
7,927,000
21,797,000
36,197,000
reland
31,108,000 :
15,537,000
31,108,000
·
·
·
·
Acce;eted
$ 8,076,000
656,497,000
2,927,000
15,537,000
2,574,000
14,470,,000
52,7ll,OOO
14,462,000
8,562,000
10,881,000
6,234,000
16,1l7,ooO
14,117,000 ·•
2,574,000
14,670,000
30,219,000
30,219,000
:ago
185,617,000 .
95,711,,000
244,147,000
Louis
15,462,000
:
21,835,000
33,835,000
leapolis
8,562,t000
23,904,000 ·•
23,904,,000
as City
10,881,000
31,242,000 ·•
31,242,000
as
6,334,000
18,,731,,000 ·
19,781,000
Francisco
1 z093.z000
1l093.z00~
17 2139,000
17,!649!OOO
Totals
$1,957,852,000 $1,300,012,000 51 $1,133,904,000 $800,024,000 !Y
nCludes $267,011,000 noncompetitive tenders accepted at the average price of 99.155
nQLudes $65,279,000 noncompetitive tenders accepted at the average price of 98.251
lluond
mta
·
·
n a coupon issue of the same lengt.h and for the same amollnt invested, the return on
these bills would provide yields of 3.h3%, for the 91-day bills, and 3 .. 58%, for the
182-day bills. Interest rates on bills are quoted in terms of bank discount with
the return related to the :race amount of the bills payable at maturity rather than
the amount invested and their length in actual number of days related to a )60-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 remaini.ng in an
interest payment period to the actual mnn.ber of days in the period, with semiannual
COmpounding i f more than one coupon period is involved.
2
TREASURY DEPARTMENT
September 10, 1963
FOR IMMEDIATE RELEASE
TREASURY MARKET TRANSACTIONS IN AUGUST
During August 196), market transactions in
direct and guaranteed securities ot the government for Treasury investment and other accounts
resulted in net purchases by the Treasury Department of $33,534,000.00e
000
0-963
- 3 -
and exchange tenders vill receive equal treatment.
Cash adjustments will be made
for differences between the par value of maturing bills accepted 1n exchange
~d
the issue price of the new bills.
The income derived from Treasury bills, whether interest or ga.in frOlll the ealt
or other disposition of the bills, does not have any exemption, as such, and
10811
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 subJec1
to estate , inheritance, gift or other excise taxes, whether Federa.l 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
loca.l taxing authority.
For purposes o'f taxation the amount of discount at which
Treasury bills are originally sold by the United states is considered to be 1nterest.
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 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 Inelude in his income tax return only the difference between the price pa.id for such
bills, whether on original issue or on subsequent purchase, and the amount actu&U
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 Trea.sury bills and govern the conditions of their.iss ue .
Copies of the circular may be obtained from any Federal Reserve Bank or Branch.
- 2 -
decima.ls, e. g., 99.925.
Fractions may not be used.
It is urged tha.t tenders
be made on the printed forms and forwarded in the special envelopes which Will
be supplied by Federal Reserve Banks or Eranches 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
t~
banking institutions will not be pennitted to submit tenders except for their
O\olll
account.
Tenders will be received without deposit from incorpora.ted banks
and trust companies and from responsible and recognized dealers in investment
securities.
Tenders from others must be accompanied by payment of 2 percent of
the fa.ce amount of Treasury bills applied :for, unless the tenders are a.ccompan1ed
by an express guaranty of payment by an incorporated bank or trust company.
Immediately after the closing hour, tenders will be opened at the Fedenli
Reserve l3a.nks and Branches, following which public announcement will be made by
the Treasury Depa,rtment of the amount and price range of accepted bids.
Those
submitting tenders will be advised of the acceptance or rejection thereof.
~e
secretary 01' the Treasury expressly reserves the right to accept or reject a:ny
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
less for the additional bills dated
$ 200,000 or
~
, (91
days rem&in------~~~~-----~
ing until maturity date on December 19 J 1963
) and noncompetitive tenders for
$
100,000 or less for the
~
182
~
June 20, 1963
~
-day bills without stated price from MY one
bidder will be accepted in full a.t the a.verage price (in three decimals) of s.ccepted competitive bids for the respective issues.
Settlement for accepted ten-
ders in accordance with the bids must be made or completed a.t the Federal Reserft
Banks on
September 19! 1963
~
, in cash or other immediately available funds or
in a like face amount of Treasury bills maturing September 19
M
1963
• Cash
TREASURY DEPARTMENT
Washington
September 11, 1963
FOR IMMEDIATE RELEASE,
*XXJOCXX~DOOOCXXXXXJOO<X
TREASURY I S WEEKLY BILL OFFERING
The Treasury Department, by this public notice, invites tenders for tvo aeriel
of Treasury bills to the aggregate amount of
$ 2 t 100ftf0' 000 , or therea.bouts, tor
September 19, 1963, in the lIIOun1
cash and in exchange for Treasury bills maturing
XW
of $ 2.10~71000 , as follows:
91
-day bills
taX
(to maturity date) to be issued
in the amount of
September 19, 1963
tit
$ lz300gXf0'ooo , or thereabouts, represent-
ing an additional amount of bills dated
and to mature
,
December 19, 1963
00
amount of $ 800 'li&iOOO
June 2t&t1963
, originally issued in the
the additional and original bHls
to be freely interchangeable.
182 -day bills, f'or
$
800,222LOOO
()(.'td3t
September 19, 1963
~
,or thereabouts, to be dated
~
,and to mature
_-.;;.;M;;.;a.;;.r..;;c;;.;;h~l:h.~9~1;;;.9_6~4_ __
uq
The bills of both series will be issued on a. discount basis under competitive
and noncompetitive bidding as hereinafter provided, and at maturity their
amount will be payable without interest.
t~e
They will be issued in bearer form Only,
and in denominations of $1,000, $5,000, $10,000, $50,000, $100,000, $500,OOOUd
$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/~ time, Monday, September 16, ~
fiiJEach teu--.tar
Tenders will not be received at the Treasury Department, Washington.
must be for an even multiple of $1,000, and in the case of competitive tenders tbl
price offered must be expressed on the basis of' 100, with not more than three
TREASURY DEPARTMENT
September 11, 1963
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
$ 2,100,000,000,or thereabouts, for cash and in exchange for
Treasury bills maturing September 19,1963, in the amount of
$ 2,102,297,000, as follows:
91-day bills fto maturity date) to be issued
in the amount of $ ,300,000,000, or thereabouts,
additional amount of bills dated June 20,1963,
mature December 19,1963,originally issued in the
$ 800,700,000, the additional and original bills
interchangeable.
September 19,1963,
representing an
and to
amount of
to be freely
182 -day bills, for $ 800,000) 000,
or thereabouts, to be dated
September 19, 1963 ,and to mature March 19, 1964.
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, Sep tember 16,1963.
Tenders will not be
received at the Treasury De~artment, Washington. Each tender must
be for an even multiple of $1,000, and in the case of competitive
tenders the price ofrered 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
~ithout deposit from incorporated banks and trust companies and from
responsible and recognized dealers in investment securities. Tenders
rrom 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-964
- 2 Irmnediately after -che 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 amoun~
and price range of accepted bids, Those submitting tenders will be
advised of the acceptance or rejection thereof. The Secretary or
the rrreasury expressly reserves the right to accept or reject any 0:
all tenders) in whole or in part~ and his action in any such reSDeCI
shall be final,
Subject to these reservations, noncompetitive '
tenders for $200,000 or less for the additional bills dated
June' 2()~ 196'),
(91-days remaining until maturit¥ date on
DCCL".llDe'r 19,1963)
and noncompetitive tenders for $100,000
or less for the 182-day bills without stated price from anyone
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 IlJ, 1%
in cash or other immediately available funds or in a like face
amount of Treasury bills maturing September 19,1963. Cash ~md
exchange tenders will receive equal treatment, Cash adjusooents
will be made for differences between the par value of maturing
bills accepted 1n exchange and the issue price of the new bills,
The income derived from 'rreasury 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
possess1ons 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 state s 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 exclude'
from consideration as capital assets.
Accordingly, the owner of
Treasury bills (other than life insurance companies) issued hereund
need include in his income tax return only the difference between
the price paid for such bills, whether on original issue or on
subsequent purchase, and the amount actually received either upon
sale or redemption at rna turi ty during the taxable year for which th
return is made, as ordinary gain or loss.
Treasury Department Circular No. 418 (current revision) an:! th
notice prescribe the te:::'Tl1s of the Treasury bills and govern HIe .
conditions of their issue.
CODies of the circular may be obtalne1
any Federal Re se I've Bank or Branc h.
000
-
2 -
Associate of the Planning Research Corporation of Los Angeles.
He served in the United States Air Force from 1942 to 1945.
~Ir.
Stockfisch, 41, resides at 4705 Kellogg Drive, McLean ,
Virginia, with his wife, the former Claire Bondello, and their
daughter Suzanne, age 9.
A. STOCKFISCH NAMED
DEPUTY ASSISTANT SECRETARY
JACOB
:t
-,
~i~~:\s'~~e~tar2
Treasury Secretary Douglas Dillon today announced the appo1ab
/'~~
of Jacob A. StockfiSChS";';pi"ty
J:o
•
,
for
Tax Policy and as Director of the Treasury's Office of Tax Analyst.
~r.
Stockfisch has been the Director of Special Studies,
Office of Assistant Secretary of Defense
(Comptroller),
WashiDg~
D.C., since September, 1961.
As Director of the Office of Tax Analysis,
~r.
Stockfisch ril
be the Treasury Department's principal economic adviser on tax
policy matters and will be responsible for the direction of a
technical staff engaged in relating economic data to tax plans
programs.
au
He will also serve as Deputy to Assistant Secretary
Stanley S. Surrey.
A native of Los Angeles, Mr. Stockfisch received his B.A.
degree from Pomona College, Claremont, California, and his ~.L
degree from the Uni versi ty of California in Berkeley.
From 1957
to 1961, he was Associate Professor of Business Administration at
the University of California.
Prior to that time, he was an ,
TREASURY DEPARTMENT
-
September 11, 1963
FOR IMMEDIATE RELEASE
JACOB A. STOCKFISCH NAMED
DEPUTY ASSISTANT SECRETARY
Treasury Secretary Douglas Dillon today announced the
appointment of Jacob A. Stockfisch of McLean, Virginia, as Deputy
Assistant Secretary for Tax Policy and as Director of the
Treasury's Office of Tax Analysis.
Mr. Stockfisch has been the Director of Special Studies,
Office of Assistant Secretary of Defense (Comptroller),
Washington, D. C., since September, 1961.
As Director of the Office of Tax Analysis, Mr. Stockfisch
will be the Treasury Department's principal economic adviser on
tax policy matters and \-.1i1l be responsible for the direction of
a technical staff engaged in relating economic data to tax
plans and programs. He will also serve as Deputy to Assistant
Secretary Stanley S. Surrey.
A native of Los Angeles, Mr. Stockfisch received his
B.A. degree from Pomona College, Claremont, California, and his
Ph.D. degree from the University of California in Berkeley.
From 1957 to 1961, he was Associate Professor of Business
Administration at the University of California. Prior to that
time, he was an Associate of the Planning Research Corporation
of Los Angeles. He served in the United States Air Force from
1942 to 1945.
Mr. Stockfisch, 41, resides at 4705 Kellogg Drive, McLean,
Virginia, with his wife, the former Claire Bondello, and their
:laughter Suzanne) age 9.
D-965
000
-2COTTON vi AS T£3
(In pounds)
COTTON CARD STRIPS made from cotton having a staple of less than 1-3/16 inches in length, COMBER
WASTE, LAP WASTE, SLIVER WASTE, AND ROVING WASTE, WHETHER OR NOT MANUFACTURED OR OTHERWISE
ADVANCED IN 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 Kinedom, France, Netherlands,
Swi tzerland, Belgium, Germany, and Italy:
Country of Origin
United Kingdom
Canada
France
India am Pakistan
Netherlands
Switzerland
Belgium
Japan
China
Egypt
Cuba
Germany
Italy
11
:
:
:
Established
TOTAL QUOTA
Established:
Imports
II
33-1/3% of: Sept. 20, 1962,
Total Quota: to September 9. 1963
4,32J,457
239,690
227,420
69,627
68,240
44,388
38,559
341,535
17,322
8,135
6,544
76,329
2:1..263
1,603,706
239,690
162,778
49,926
51,982
11,234
33,150
1,41.J.,152
1, lll, 486
75,807
75,183
22,747
14,796
12,853
21,836
58,025
25,41+3
5,482,509
2,210,491
Inc~uded in total imports,
Prepared
:
Total Imports
:
: Sept. 20, 1962, to:
: September ~19Q3 :
column 2.
in t.he Bureau of' Cust.oms.
--
--
--
7~088
1,599,886
1,208,5 05
TREASURY DEPARTMENT
Washington, D. C.
IHHL-D IA Tf~ RE'J..E:AS E
0-966
FRIDAY, SEPTEMBER 13,1963
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, as modified by
the Tariff Schedules of the United States which became effective August 31, 1963.
COTTON (othe!" t.han linters) (in pounds)
Cotton under 1-1/a inches other than rough or harsh umer
Imports September 20, 1962 - September 9. 1963
Country of Origin
Egypt and Sudan •••••••••••••
Peru ••••••••••••••••••••••••
India and Pakistan ••••••••••
China •••••••••••••••••••••••
Mexico ••••••••••••••••••••••
Brazil ••••••••••••••••••••••
~>lion of Soviet
::,Qcialist Republics •••••••
1\ rp:t~ntina •••••••••••••••••••
Haiti •••••••••••••••••••••••
ECl:.ador •••••••••••••••••••••
y.
Y
Established Quota
783,816
247,952
2,003,483
1,370,791
8,883,259
618,723
Imports
3/4ft
Country of Origin
Established Quota
782,857
35,995
81,640
Honduras ••••••••••••••••••••
Pa.ragu~ ••••••••••••••••••••
Colombia ••••••••••••••••••••
~raq ••••••••••••••••••••••••
3ritish East Africa•••••••••
8,883,259
Indonesia and Netherlands
618,723
New Guinea ••••••••••••••••
JjBritish W. Indies •••••••••••
Nigeria •••••••••••••••••••••
11British W. Africa •••••••••••
Other, including the U. S",
475,124
5,203
237
9,333
Except Barbados, Bermuda, Jamaica, Trinidad, a.rrl Tobago.
Except Nigeria and Ghana.
Cot ton 1-1/8" or more
Established Yearly Quota - 45.656.420 1bs.
ImpQrts August 1. 1963 to September 9. 1963
Staple Length
1.-3/&· or more
~-5/32" or more and under
1..-3/8" (Ta.ngt.da)
~"or - . r e
-=:<'1."1"
and und.r
... ·&_·-:o.·"..._-o·
~.2~9·S;"'"
~+oC»l:'ii'5
e-..r~ -.:tc=-.a.a7---.::::: ---c
-~...:---
Allocation
39,590,778
~.500.000
_,.. __ .. -=::;~,"",",
:::a:-L-re-~.x.: ~~IL{.~
"\:...£C>++<=J<;:>
Imports
39,590,778
_~' ••
---""'. __ .-..• _
~-'::~'Q:"~~-o:r
Bl.7'59
..
752
871
124
195
2,240
71,3 88
21,321
5,]77
16,004
Imports
TREASURY DEPARTMENT
Washington, D. C.
IMMED IA TE RELEASE
D-966
FRIDA!, SEPTEMBER 13,1963
Preliminary data on imports for consumption of cotton and cotton waste chargeable to the quotas
established by the President's Proclamation 01 September 5, 1939, as amended, as modified by
the Tariff Schedules of the United States which became effective August 31, 1963.
COTTON (other than linters) (in pounds)
Cotton under 1-1/8 inches other than rough or harsh urrler 3//it'
~s_~epteJ1lber 2P--,---196~_-~Se~ember9~_l263_ _
CountrLoL_Origin
Egypt and Sudan •••••••••••••
Peru ••••••••••••••••••••••••
India and Pakistan ••••••••••
China •••••••••••••••••••••••
Mexico ••••••••••••••••••••••
Brazil ••••••••••••••••••••••
Union of Soviet
Socialist Republics •••••••
Argentina •••••••••••••••••••
Haiti •••••••••••••••••••••••
Ecuador •••••••••••••••••••••
11
Y
Established ggota
783,816
247,952
2,003,483
1,370,791
8,883,259
618,723
475,124
5,203
237
9,333
~rts
Established Quota
Country of OriKin
_.
---
782,857
35,995
81,640
Honduras ••••••••••••••••••••
Paragu~ ••••••••••••••••••••
Colombia
••••••••••••••••••••
.,.
~raq ••••••••••••••••••••••••
8,883,259
British East Africa •••••••• e
Indonesia and Netherlands
618,723
New Guinea ••••••••••••••••
l/British W. Indies •••••••••••
N'~ger1a
• •••••••••••••••••••••
2/British W. Africa •••••••••••
Other, including the U. S •••
Except Barbados, Bermuda, Jamaica, Trinidad, an:i Tobago.
Except Nigeria and Ghana.
Cot ton 1-118" or more
Established Yearly Quota - 45.656.420 lbs.
Imports August I, 1963 to September 9. 1263
staple Length
~-3/S" or more
~-5/32n
or more and under
Allocation
Imports
39#590,778
39#590,778
-
--~
752
871
l24
195
2,240
71,388
21,)21
5,377
16,004
Imports
-2COTTON WASTES
(In pouma)
COTTON CARD STRIPS made from cotton having a staple of less than 1-J/16 inches in length, COl-illER
vJASTE, LAP WASTE, SLIVER WASTE, At"ID ROVING WASTE, HHETHER OR NOT lWWFACTURID OR OTHERr1ISE
ADVANCED IN VALUE: Provided, hOviever, 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, Frances I~etherlands,
Switzerlan:i, BelgiwI1, Germany~ and Italy:
Established
TOTAL ClJOTA
Country of Origin
Canada
France
227,420
69,627
68,240
44,388
38,559
341,535
17,322
8,135
6,544
76,329
21,263
India an:! Pakistan
Netherlands
Switzerland
Belgium
Japan
China
Egypt
Cuba
~rmany
Italy
5,482,509
Incl:uded.:1.n total. i.mport.s.
--""--------
:
4,323,457
239,690
Uni ted Kingdom
y
-:
4-
.~-
'Qo. • . - - • • ,
nr
column 2.
~]."""t.o ....
_
-
Total LlTIporfs--:--Established :
- ~IffipOrts---~I1
Sept. 20, 1962, to:
33-1/3% of: Sept. 20, 1962,
September 9, 1963 .: Total Quota: to September 9, 196]
1,603,706
239,690
162,778
49,926
51,982
1l,234
33,150
1,441,152
1,ill,486
75,807
75,183
22,747
14,796
12,853
21,B36
58,025
-
25,443
7.088
2,210,491
1,599,886
- - - - - - - - - -
1,208,505
TREASURY DEPARTNENT
WashinGton, D. C.
HlttfEDIATE RELEASE
FRIDAY, SEPTEMBER 13,1963
D-967
The Bureau of Customs announced today preliminary figures showing the
quantities of Ttlheat and ...rheat flour authorized to be entered, or withdravn
from i-Iarehouse, for consumption under the import quotas established in the
President's proclamation of May 28, 1941, as modified by the President's
proclamation of April 13, 1942, for the 12 months commencing May 29, 1963,
as follows:
Wheat flour, semOlina,
crushed or cracked
wheat, and similar
wheat products
Wheat
Country
of
Origin
Established
Imports
Established
Imports
Quota
Quota
:May 29, 1963,
: May 29, 1963
:to Aug. JO, ~96j
; to Aug. 30,;
(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
800,000
795,000
3,815,000
24,000
13,000
13,000
..
8,000
75,000
6,000
210
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
0,
TREASURY DEPARTnENT
Washincton, D. C.
INt-1EDIATE RELEASE
FRIDAY, SEPTEMBER 13,1963
D-967
The Bureau of Customs announced today preliminary fi~lres showing the
quanti ties of '''heat and "heat flour authori zed to be entered, or withdrawn
from warehouse, for consumption under the import quotas established in the
President's proclamation of May 28, 1941, as modified by the President's
proclamation of April 13, 1942, for the 12 months commencing May 29, 1963,
as follows:
..
Wheat
Country
of
Origin
..
Canada
China
Established :
Imports
Imports
Established
Quota
Quota
:May 29, 196 3,
:May 29, 196),
:to Aug. 30, 1963
:to Aug. )Ol 196}
(Pounds)
(Pounds)
(Bushels)
(Bushels)
795,000
795,000
Hungary
Hong Kong
Japan
United Kingdom
Australia
Gennany
Syria
New Zealand
Chile
Netherlands
Argentina
Italy
Cuba
France
Greece
Mexico
Panama
100
100
100
100
2,000
100
1,000
100
Uruguay
Poland and Danzig
Sweden
Yugoslavia
Norway
Canary Islands
Rumania
Guatemala
Brazil
Union of Soviet
Socialist Republics
Belgium
Wheat flour, semolina,
crushed or cracked
wheat, and similar
wheat products
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
210
6,000
1,000
100
100
100
100
Boo,ooe
795,000
4,000,000
3,821,210
TREASURY DEPARTMENT
Washington
DlMEDIATE RELEASE
FRIDAY, SEPTEMBER 13,1963
D-968
The Bureau of Customs has announced the following preliminary figures
showing the irnnorts for consumption from January 1, 1963, to August 31, 1963,
inclusive, of ~omTOOdities under quotas established pursuant to the Philio!line
Trade Agreement Revision Act of 1955:
COffirrodity
··· Established Annual
Quota Quantity
·
·:
Unit
of
~uantity
·••
··
Imports
as of
August 31, 1963
Buttons •••.•..•••
680,000
r'
ul~ars •••••••••••
160,000,000
Number
Co conllt
il ••••••
35B,400,000
Pound
277,074,439
••••••••••
6,000,000
Pound
3,919,028
Tobacco ••••••...•
5,200,000
Pound
4,930,313
Corda~e
0
Gross
176,610
8, 705,660
TREASURY DEPART!J:ENT
Washington
IW,IEDIATE RELEASE
FRIDAY, SEPTEMBER 13,1963
D-968
The Bureau of Customs has announced the following preliminary figures
showing the imports for consumption from January 1, 1963, to August 31, 1963,
inclusive, of commodities under quotas established pursuant to the Philinoine
Trade Agreement Revision Act of 1955:
CorTIJrodi ty
·• Established Annual
·: Quota Qu;:.mti ty
Unit
of
quantity
Gross
.•
I~orts
as of
August 31, 1963
17 6 ,610
II.
6BO,000
~if.ars •••••••••••
160,000,000
Number
il ••••••
3S8,40 0,OOO
Pound
277,074,439
ordage ••••••••••
6,000,000
Pound
3,919,028
obaceo ••••••••••
5,200,000
Pound
4,930,313
3uttons •......•
!o conut
0
8,705,660
TRE~SJkY
DEP'RT~ENT
~a5~ingto~,
IMMLDI' Il
D. C.
Rt.LU~;t
D-969
FRIDAY, SEPTEMBER 13,1963
PRELIMIIHRY D~lh UN IhI"'OilT~ I:OR C,~fjSUMPIICN OF UI~h\i<NUF"CTUf(t.1J Lt:e; At~O LINl CNflRuc"bU T~ Trit: .Uf'T,& f&~;'BLI~4t.1J
tY ,'F(E:)IDUlfln PRCClAMATIO~; NO. 3(.57 iJ Sf.Pft~'Lt.':; :C,l, I'))e tc ,'rhOIFI':!) fY I.-it:. URIFF ~Cfit./jultS Gf Tr1[
UNITll ST~T[S, ':filSH ErG/ME EFFtCIl~i WGJ&T 31) IC:b3.
~U~RTtALY
LunTA PlHIOO - July
IMPu~IS
-----------------11iL,;~ ~~
Country
- &Ept~mber
o. l~b5 (or as not~d)
Un~ruu£~t
Zine-hE~rlng or~s ~n~
aatllrillia
.
.... ------~.--- .. ------------~------:IJuartE·rly I/ul')h
:liuaderl)' iiUGh
:yl.l~.i.!tJL~SHI _____.I!!>(lrh
11,220,000
ICu8rt£~rly
':uoh
Unwrought ilnc (excp~. ,I'n,~
of 7ine dnd zinc duet) and
22,540,000
.Bst~
~nd
scrap
:QuJrLl'rl)
~uotu
!3~1illlL1.i!'.L ____I_Ill£i.r.t.I'_:_fL!fi.'d!:.:..L________ ~_l.'!'J!£!.!L
(PQ.!nd,)
11.~)20,OOQ
----------
•• -~-- _ _ _ _ _ _I_,_~__ , - - - - - - - - - •." - - - - -
-------"--
_.! Out j b~lL..LnL_~ __'_I'IIf'.£:t.1!.
(Poundf-)
;.,
.• 01j·
9i~
I T£M
----
7int
I'
----, -- .
AU:$tr~1
lebO ana
end ~tr~p
ICf~ ~~&t~
~n
.......
i
50. I 'je)
_____ ______!~':l~S.O ;. ___________1 TEU~.hQi~_______
Lead-bearing or~e
Ilnc Ill£' t eri rtl s
of
Product i
- JulJ
- &epteraber
(Pour\ds)
(P(lundr.)
20,623,574
S e I 9 i IJII and
bv\~t: J"] \ toft
!}
SoUl/iII
,,040,000
4,,29,1389"
Can&G&
13,ljljo,ooo
2.~77,593··
15,920,000
12J684,8~7
6b;480,OOO
66,480,000
I ta I)
7,520,000
/,520,000
37,ti40,OOO
29,206,572
3,600, 000
Mel< i (;0
10,160,000
Peru
16,160,000
36,8tlO,OOO
36,860,000
70 ,480,000
57,98b,392
6,320,000
3,190,606
12,860,000
6,76 4 ,810
35,12a,OOO
13,216,566
3,760,000
3,263,~OO"
5,4~O,OOO
5,16~,233"
Reputli, of lhe Congo
(for.erly Selgitn Congo)
Un. 60. Afriea
,~,880,OOQ
Ilf,880,000
OW"a o . ' " " ' , ,
15.760,000
·~~..;\~,~.·t\:~,~)
__ n ...
~·";.
... "" ....
9('J~"O€.'
~
.,..-
-s;;
6.~O.OOO
OC7.~·OO·~~~
...
OOO"'O.:?~·9
000
I
D09 •
k
2.16",2'5··
"=",,,=,,,.:; . . . ~.
-::"'~.
~6~·""86".-!S
6.080,000
Q"'C>-O~.
·S'So:
OOO~ORh'~OL.
1I,~57.1;Z7··
6,080,000
17.81tO.OOO
17.sa.o.ooO
«>.080.UOO
..:
O'~-""9L.-9
OOO""OE"'a~9~
OCJO"Og'J.l'·..!!! •
OOO"099"~
00000·0-::., .. '9"
._ .......
-
-~
--
-
_no, ....... "'>
•
r,.
•
........
-"
-.~"'"
"-.
.,_
a.
')
___
~ __
,
......... ~ . . . .
I
,
0<00"00<)0''''9,
n...J"-4
'O!JI.\x,.._
TREASURY
DEPtRT~ENT
~.$ningto~j
IMY[DI~TE
C. C.
RELEASE
D-969
FRIDAY, SEPTEMBER 13,1963
PRELI~I~!RY
OtTA
~N
I~~Q~TL
C~USU~PTICN
fOR
OF
U~N~NUFPCTURED
~UhRT£RlY ~UuTA
PERIOO - July
IMPORIS - July
_____ ~~_
~~&.L!
I HIt
CrlfRbE~6lE
LEi.D AND LINe
tt PREsrDiNTI~L PRCCLA~~TIO~ NO. 3257 CF SEPTE~5ER 22, 195H,
UNIIED ST~TES, ~HI:H 6ECAME EFfECTI~E AUGUST 31, 1963.
~s M(DIFt~O
EY
l~E
10 TriE .U0TtS E&T:eLtSHED
SCHEGJlES Of THE
T~RIFF
- Septelllber )0, ISE3
- September
ITEM
6,
2~~~
1963 (or as noted)
______________
!lf~~~Qi!
_____________
I TOI
'Ji5. Oli·
-~-----------
I·
Country
le~d-ce~ring
of
Un.rQu£~t
ore:
le~d
le,~ ~o~t~
lind laitlriL's
Producti~n
end
and
Un~rousht
zinc (excfp~ fll~)~
of zine grlO zinc du~t) 8nd
7int wBste tnd &cra~
; .
lut(;rillfll
~Crap
: '
'I
--
Zinc-bE~rinE or~~
and
..- - -
l,
.! _________________
~
_______________
_l....~
__ .______________
Ii;uuterly Quct~
:Cuarterly ':uoh
:Qu~rt<:.>rl)~uoh
: "p.!:!..Ul:~ Jtiup____'.!"O(lr ts ...!. 01.1 t i u.!::lL.Ln&__ -.!..9££:!:..1.£. ..:._~!:!! i ,," ~~£ ___ -1!.E! rJ.!'_:_ll...hill_"_t__ .____ _
~
__
:Quartf.rly liul)ta
(PtlvnoG)
11,220,000
AUHnl it
11,220,000
(Powlnd!)
22,5~O,oOO
(Pounds)
~l.~~£._
(Pounds)
2a,62~,571+
SelSiul\ and
lU.~~t0~2 (l~tf')
801 i vi ~
5,040,000
lj,3~3,889··
Canedt
15$1;40,000
2,377,593··
15,920,000
12,684,SI.j7
66;480,000
66,480,000
liIe)(ico
10,160,000
Peru
37,H40,OOO
29,206,572
16,IGO,OOO
,36,880,000
36,8&0,000
70,ljao,OOO
57,986,592
6,320,000
~,190,606
12,860,000
6,76 11 ,810
35,120,000
13,216,566
3.760,000
3,263,500"
5.1t40,OOO
5.16!,233··
R~putli(
of the Congo
(for.crly telgiln C~ngo)
Un. t'c,. Africa
All
(,520,600
3,600,000
I ta I}
Yuse61~
?,5<:'O,OOO
... il.
othe~
forp;n~
1l!,680,OOO
11!.8ea,ooo
15,7&0,000
1I,~57,127··
-2-
Commodity
Period and Quantity
Uni t
of
Import;
as of
:Quantity :August 3.1..
Absolute Quotas:
Butter substitutes, including
butter oil, containing 45%
or more butterfat •••.•..••.••••.
Calendar
Year 1963
Cotton products, except cotton
wastes, produced in any stage
preceding the spinning into
yarn •................•..........
12 mos. from
Sept. 11, 1962
Peanuts, shelled, unshelled,
blanched, salted, prepared or
preserved (incl. roasted peanuts but not peanut butter) •••••
!/Imports through September 6, 1963.
D-970
1,200,000
Pound
1,000
Pound
1,709,000
Pound
Quota FiJ
12 mos. from
August 1, 1963
354,
TREASURY Dl:J?ARTHENT
~Jashing
ton
r:'L"lC:Jlt\TE RGi...:::"':"SG
FRIDAY, SEPTEMBER 13,1963
D-970
The Bureau of Customs announced today preliminary figures on imports for cons~
tion of the fol lowing commodi ties from the beginning of the respective quota periods
through August 31, 1963:
Commodity
Unit
of
QUantity
Period and Quantity
Imports
as of
August 31, 1
Tariff-Rate Quotas:
Cream, fresh or sour •••••..•..••. Calendar Year
1,500,000
Gallon
497,008
Whole Hilk, fresh or sour •.••.•.• Calendar Year
3,000,000
Gallon
95
Cattle, 700 lbs. or more each
July 1, 1963{other than dairy cows) •...•.•• Sep t. 30, 1963
120,000
Head
5,433
12 mos. from
Cattle less than 200 Ibs. each •.• April 1, 1963
200,000
Head
45,448
Fish, fresh or frozen, filleted,
etc., cod, haddock, hake, pollock, cusk, and rosefish •..•... Calendar Year
24,874,871
Pound
Quota Filled
Tuna Fish •.•.......•...••••.•.... Calendar Year
63,130,642
Pound
33,425,128
114,000,000
36,000,000
Pound
Pound
58,990,542
29,926,633
Walnuts ...•.•.•.....•...•.•••...• Calen.dar Year
5,000,000
Poun.d
3,710,551
Stainless steel table flatware
(table knives, table forks,
Nov. 1, 1962table spoons) ••.•.•..•.•.•.••. Oct. 31, 1963
69,000,000
te or lri c;h potatoes:
Certifieci seed .................... 12 mos. from
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . Sept. 15, 1962
\,fu i
Pieces
Quota Fillec
l/import s for consurnpt ion at the quo ta rate are limited to 18,656,154 pounds during
first nine months of the calendar year.
]/ Impor ~ s through Au~us t 30; quota discontinued under new Tariff Schedu lesof the
l~lnit:ed States, \vhich became effective August 31, 1963.
TREASURY DEPARTMENT
Washington
EDIATE RELEASE
DAY, SEPTEMBER 13,1963
0·-970
The Bureau of Customs announced today preliminary figures on imports for consumpof the following commoditi.es from the beginning of the respective quota periods
ugh August 31, 1963:
Unit
Commodity
Period and Quantity
pf
Imports
as of
_ _ _ _ _ _ _ _ _ _ _ _ _ _.....;.._ _ _ ._ _ _ _ _ _ _ _ _ _ _ _-2-...::Q:Cu::.:alA!n~tob.i.l::;.t..ty~......!.A!.lJ!.!~Sil'_l1J;:!Jt~lt.....:.iL~-_t..9..6"::'L .
ff-Rate Quotas:
n, fresh or sour
~
Calendar 'lear
1,500,000
Gallon
',,91" 008
Milk, fresh or sour •••••••• Calendar Year
3,000,000
Ga.llon
95
8
••••
0
•••••••
e, 700 Ibs. or more each
her than dairy cows) •.••••••
July 1, L963Sept~ 30, 1963
ll.20,OOO
Head
5,433
12 mos. from
e less than 200 Ibs. each ••• April l~ 1963
200,000
Head
45,,4(+-8
fresh or frozen, filleted~
cod, haddock, hake, polk, cusk, and rosefish •..•. ,. Calendar Year
24,874,871
Pound
Quota Fil!·ed
Fish •.•..•.•.••.•••••••••••. Calendar Year
63 9 130,642
Pound
3)~425~128
U4,OOO,OOO
36,000,000
Pound
Pound
58,990,)(;'1
29,926'c. 6 ]]
lJ
• t
or Irish potatoes:
tified seed •.•••••••• ~ ••••
e
$
~r ••••••••••••••.•••••..••.•
12 mOS$ from
Sept. 15) 1962
'}
/
,::;;,f'
:s.o.~~
•.•.
Calendar Year
5~OOO~OOO
.ess steel table flatware
)Ie knives, table forks,
Nov~ 1, 1962 ..
-Ie spoons) ••.•.• ~ .• '" • e ~ ~ ~ ~ Oct. 31, 1963
69~OOO,OOO
ou • • • $
.....
eOIi~.de
II-
-
Pound
Pieces
3~710~'i',j~
Quot6filled
-_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ ~_ _ _ _.~ _ _ _ _ , . . c • • • o
rts for consumption at. the quota rate are limited to 18~656.l54 pounds dl.1lclng the
nine months of the calendar year~
rts through August 30; quota discontinued under new Tariff SchedulLesof the
States, which became effective August 31, 1963~
-2-
Unit
Coromodity
Period and Quantity
Imports
of
as uf
:WQ,ntity :Aur.ust lL..
Absolute Quotas:
Butter substitutes, including
butter oil, containing 45%
or more butterfat., •.•.••••• ~ ••.
Calendar
Year 1963
Cotton products, except cotton
wastes, produced in any stage
preceding the spinning into
yarn •..•.... e . . . . . . . . . . . . . . . ".o
....
blanched, salted, prepared or
(incl. roasted peanuts but not peanut butter} •••••
1,200,000
Pound
Sept. 11, 1962
1,000
Pound
12 mos. from
August 1, 1963
1,709,000
Pound
Quota Fi1
12 mos. from
Peanuts, shelled, unshelled,
p~eserved
lJlmports through September 6,
1963&
354,
STATUTORY DEBT LIMITATION
As of
";\.",·l,lst 31, 1963
TREASURY DI'4J1lIb
,llcal SOfY\eo
Washin~toll. sept.13 , 1~2J
Section 21 of Second Liberty Bond Act, as amended, provides that the face amount of obligatiolls illued IIndtr
h
that Act, and the face amount of obligations guaranteed as to principal and interest by the UnitedStates (except IlICb llll "''I)
obligations as mllY be held by the Secretary of the Treasury), "Shall not exceed in the agpegate .285000000
June 30, 1959; U. S. c., title 31, sec. 757b). outstanding at anyone time. For pwposes of thiS section th~ cur~fll!'rtd (Ac
value of any obligation issued on a discount basis which is redeemable prior to maturity at the option of the bolder alaeUt!"
lIidered as i~s face amount.". The Act ~f May .29,. 1963 (P. L. 88-30 88th ~on8r~ss) provides thar the abo"e lifllitatia...u
temporarily Increased (1) during the peuod beginnIng May 29, 1963, and ending on June 30,'1963 to '307,000,000 000
tbe period beginning on July I, 1963, and ending on Augu!lt 31,1963 to 1309,000,000,000.
'
,
&:'11.
m_
The following table shows the face amount of obligations outstanding a'nd the face amount whicb call still be ilia
under this limitation:
Total face amount that may be outstanding at allY one time
$309, 000, OOOJ 00
Outstanding Obligations issued under Second Liberty Bond Act, as amended
Interest-bearing:
Treasury bills - - - -_ _ _ _ _ _-*$47,219,311,000
Certificates of indebtedness _ _ _ __ 16,99,3, u33,000
Treasury notes _ _ _ _ _ _ _ _ __
~8,262,211,OOO
$122,769,958,000
Bonds Treasury - - - - - - -_ _ _ _
.. Savings (Current redemption value)
United States Retirement Plan bonds
Depositary
R. E. A. series
Investment series
Certificates of Indebtedness Foreign series _ _ _ _ _ _ _ _ __
30,1-1-63,017,950
4B, 248, 942, 475
260,779
102,072,500
26,368,000
3,332,440,000
133,023,101,704
3Lt2, 000 ,000
Foreign Currency aeries _ _ _ _ __
Treasury notes Foreigll series - - - - - - - - - Treasury bonds-
163,ll8,257
Forei~currencJ( series
~reas
dCer~ificates
SpeCial
s Certificates of indebtedness _ _ __
70~~~66~~8~
11210,~73,7J8
2, 00,000
7, J2)~, 9.S8, 576
4, 749,936,000
Treasury notes
Treasury bonds _ _ _ _ _ _ _ _ _ _ 32, 944~S3....:3, 000
Total interest-bearing _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ __
Matured, interest-ceased _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ __
Beating no interest:
United States Savings Stamps _ _ _ __
52 ,280,796
695,191
Excess profits tall refund bonds _ _ __
Special notes of tbe United States:
Internat'l Monetary Fund series _ _ __
Internat'l Develop. Ass'n. series _ __
3,028,000,000
128,955,600
Inter-American Develop. Bank eeries _ _ "
Total
Guaranteed obligations (not held by Treaswy):
125,000,000
3,334,932,587
30b, 1E7 , 562,;9B5
Interest-bearing:
Debentures: F. H. A. & DC Stad. Bds. _
672,60L~,
Matured, interest-ceased _ _ _ _ _ __
_ ~S27,2S0
Grand total outstanding ____________________________________________________--
250
Balance face amount of obligations issuable under above authority
306.8~~.6~
2,1,3 .
Reconcilement with Statement of the public Debt _ _ _
A_'-l-"gu"--s-=-=t--=3:..1:::A.J-..-::l;:.,9:..6~3_
Augll~t~o,=--___
1963
(Daily Statement of the Ullited States Treasury, _____________
.:..-_
(Date)
Outstanding Total gross public debt ________________________________
Guaranteed obligatiolls not owned by the Treasury __________________
Total gross public debt and guaranteed obligations ___________________Deduct - other outstanding public debt obligations not subject to debt limitation - _ _ __
D-971
306,S34,617,9
6741~~
307,208, 7,
___ 367J~
306,8411
STATUTORY DEBT LIMITATION
As of
i,1l'-,lSt
31. 1963
TREASURYD~PARTM~NT
Flec:el
S~rvlC:1!
Washin~ton, sept.13., 1963_
Section 21 of Second Liberty ~on~ Act, as amended, provi.de~ that the. face amount of obligations issued under auth'If!Ir of
I Act and the fnce amount of oblIgations guaranteed a1l to prwclpal and Interest by the United States (eJ[cept such guaranteed
isati~ns as may be he~d by the Secretary of the ~reasury), "Sha,ll not exceed in the a8~egate S285,OOO.OOO,OOO (Act of
Ie 30 19~9i U. S. C., tIde 31, sec. 7~7b), outstanding at anyone time. For purpo/Jes of thiS section the current redemption
1Se of'any obligation issued on a discount basis which is redeemable prior to maturity at the option of the holder shall be conieled as Its face amount." The Act o( May 29, 1963 (P. l. 88-30 B8th Congres/J) provides that the above limitatioll Bh"It be
lporarily increslled (1) during the period b~ginning May 29,1963, and ending o'n June >0,'1963 to H07,000,000,000. (2) durin!
period beginning on July I, 196},flnd ending on August 31,1963 to H09,OOO,000,000.
.
The following table shows the faee amount of obligations outstanding ;nd the face amount which can still be issued
Ider this limitation:
)tll face amount that may be outstandinB at Bny one time
$309,000,000,000
)utstBnding Obligations issued under Second Liberty Bond Act, BS amended
(nterest-bearing:
Treasury bills
Certificates of indebtedness
.
$47,219,314,000
16,988,433,000
Treasury notes
58,56~,211,OOO
Bonds Treasucy _ _ _ _ _ _ _ _ _ _ BO,h63,017,950
Savings (Current redemption value)
United States Retirement Plan bonds
D~positary _____
R. E. A. series
[nvestment series
48,548,942,475
260,779
102,072,500
26,36B,000
3., 882,4.40,000
$122,769,958,000
133,023,101,704
Certificate Ii of lndebtedne s s Foreign series
For~ign Currency series _ _ _ _ __
342,000,000
Treasury notes Foreig1l sedell - - - - - - - - - Treasury bondsForeion (:urrcacy, series ...,',--_ _ __
'T'rea'-"i.''''7 G3r'tificates
Speclll1 FlL1ds Certificates ().f indebtl"dness _ _ __
163, ll8, 257
70C;;, 2.55;, tJ61
2,.;)00,000
7, 82).j., 858, 576
notes
4,749,936,000
bonds - - - - - - - - - 32, 94h, 238,000
Treasury
Treasury
Total interest-bearing _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ __
Matured, interest-ceased _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ __
Bearing nO interest:
United States Savings Stamps _ _ __
1,21O,~73,7J8
2, 00,000
45,.519,032,.576
302, S2h, 865, 998
307,764,400
52,280,796
695,191
Excess profits tax refund bonds - - - Special notes of the United States:
Internat'l Monetary Fund series _ _ __ 3~028,OOO,ooO
l28,956,600
Internat'l Develop, Ass'n. series _ -__
125,000,000
Inter-American Develop. Baok series
Total __________________________________
ullranteed obligations (not held by Treasury):
Ioterest-bearing :
672, 60l~, 250
Debentures: F. H. A. & DC Stad. Bds._
67h,131,500
Matured, intere st-ceased _ _ _ _ _ _ _ _ _ _.~1J!,:.:5_2_7.:._t!..,_2:.:5_0_
Grand total outstanding _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _- - - - - - anCe face amount of obligationll issuable under above authority
b
August 31, 196)
August -,0, 196)
Reconcilement with Statement of the public De t ---.:.::.::.s:2..=:::::::rn.'7t~~~z-~--''''--(Daily Statement of the United States Treasury, ----~-(D-el....:e:...)~--~taodiog -
otalgross public debt _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _- - - - - uaranteed obligations noC owned by the Treasury - - - - - - - - - - - - - - - ocalgross public debe and guaranteed obligatioDs
•
_ ... t:~'
t
let - otber outstanding puh1lC' &ht ~atloo.S DO
D-971
.'
.
ub;ect
to
debt
hmltaClOQ
----8
306,534,617,95 0
674,131 soo
307,2013, 74~55
367,054,965
-30-6>-,-"'Scr"G"=-'1;o9~,1lg->
- 4 -
.;tU:lY ~_,i;Cll ~C ~nis one mattcL':
Dill ?a33
tlL2
.<C'J3~)
t(:e -:ienaLe F-LIlancc
1~c'l1se
0~
ti-le
snol:.ld ti.1e.'ays and i.·leans Committee
Treasu.cy :Jill limit: its presentation before
~CJmoittee
to ur6ing tLle early enactment
OJ.
the
Commictee c,iLL and commentin:: un any matters raised by memberl
tne Finance
COr!Lli'~
is iwportant to indicate toe
:lbelieve
Treasury
at:
....
i:.ee.
.
,-;.1 ~ S
"A ~zno\·]1ed~e
t :::ne so
0"::
ti18 t
~osition
0:;:
the
nearin C>~"S be .:o::e the Jenate Finance
tlis position :nay be nel,?":ul to ta:;-:payers and
or.:;ani'3ations ;·.rL-..ose a})i.:;earances be~~ore the 3enate Finance CommitteE
0:-
tlle na:::u::e o.o.:thei-r- IJresentations may be ini:luenced by the
TreC1sur~l ;;osition -- StJeci:=ically\·m.ether it intends to support th
..
II
;-_ouse OJ.. 11 or reCC:l1l-lf2nd c:odi;:ications in its Key i?YOVl.Sl.ons.
o '..f0
- J -
:~ltnouc~h tile
enacted Cll;_S YCClr.
ori.;i.nal
~~r0l,,,sC1ls
0rainate
di.~"::erenc(;s
the need Lor
I
0-=
L1C
the
o_~
the President
an'1 substantially modi:':ied others) 't,ve must sub-
to t:le broad consensus on basic principles and
enactment
To iacilitate the
?assa:;e
pledse
prom~t
bill rej ected some
o~
the bill.
achieve~ent
o_~
these objectives, I urge
Jays and t-:eans Committee bill by the House.
coo-t-'eration
O~
I also
the Treasury Department to minimize con-
trovers), over details that are not consequ'2ntial NLlen measured agai:
t(-:.e need
~.:or
Treasury
~epartment
Febr~ary: s
,?rom.)t enac tmen t 0':':: this legis lat ion.
Therefore, the
will not renew in the 3enate those of last
reco:m.,le'-ldations \vhich have been debated and rej ected by
t11e .Jays and l';eans Ccmnittee.
In ract, the only aSlJect of the bill
to which t'le Treasury is giving fu:.:-ther study is th-2 problem posed
-")~y Lie nC)ll-ta::al:iur. C~ be;::o~e-de.atLl appreciation
2
CeC2;.::;.cnt
-:.'..En
""'I""'" .!-·U"'"
: ·1~ ...j .,.
c..._'_
d. .....
or capital assetS
Geld oy the l"leirs, a 'natter not res o1v
1
3ubj ect only to the results of
t
- 2 number
~):
the are2S
J~
ta:: 1a,,'J revision dealt -.'lith in the President'
It .b'i-(yviJes a balanced ever-all reduction in the rate
structure Lor indi'liduals and corl)orations \vilich \vi11 permit an
~rowtn
increase in economic
Jreatcr proiitability
iJill
l'.1ai.::Ec:S
are
~'lell
o~
ne~
tnrough release
invescment.
-
OJ..:
~urchasin~ power ~d
The revis ions \Vhich the
suited to carry cut many o-f the objectives the
President SOUgllt in f1..1cL-:lns bis proposals, and the reduction propose l
is limited to an amount consistent with Ziscal responsibility.
l:-'aSSClse Ji tne bill is a matter
deser-Jes the
su~:)ort
o,~
0_,=
vital national interest 'Ilhich
e-lery Arnerican re;ardless OJ: party affilia-
ti:m.
T~e
bill is a
matters by tne
~roduct O~
caretul study
LlyS and L'ieans Committee.
o~
many
di~~icult
Some may:vish further
s ;=:~·.1C'=-.1ra~ c-~an~es und sone may pre.~er other solutions in this or
~l)_at Pl.-o'l:'sic'n.
It is DOSt im?ortant ,1o;'JeVer, that the bill be
9/13/63
Fur :Zelease:
~AH-l._g..._',(J!:
/f/il
..
7i~,,',;:
:/~"/":~
,
~ ~o[lda Y :
.]Ci;tcnDel' L!, 1SS'J
Treasury Statement on Tax Bill
~ecretary
~ollo\'vin,~)
of the Treasury 0ou31as Dillon today issued the
statefllen~
on the tax bill reported out
Oi:
the
House~ay
anu Eeans Conm!i t tee:
°'1 am very lJleased at tt1e action oi the I-louse ,lays and Means
CCElmittce l.n rejJo,:~in.:; out the Jroposed n,evenue Act of 1963.
enactment this year:7ill
'''''1... T"~:1
o.
v ~
Its
the nation a ne,," ta:: policy that wi
spur our e.conom-i.c :sro;Jth, leadin~ to higher employment and fuller
tJ.ti1L:ation c
resulti.n.;
~
cur national resour':es.
:rol' t:lat
~ro~·]tll
TIle increased revenues
':1i1l 'f!rovide the best and earliest as-
balance.
-----
The bL~ 1 ::2~orted by the
t~__ e
iays and Neans Committee carries
ta:: reduction Vr.-,o;'Dsals/o£ the President and covers a large
0\
TREASURY DEPARTMENT
WASHINGTON. D.C.
September 13, 1963
FOR RELEASE:
A. tvI. NEWSPAPEKS
MONDAY, SEPTEMBER 16, 1963
TREASURY STATEMENT ON TAX BILL
Secretary of the Treasury Douglas Dillon today issued the
following statement on the tax bill reported out of the House Ways
and Means Committee:
"I am very pleased at the action of the House Ways
and Means Committee in reporting out the proposed Revenue
Act of 1963.
Its enactment this year will give the
nation a new tax policy that will spur our economic
growth, leading to higher employment and fuller
utilization of our national resources.
The increased
revenues resulting from that growth will provide the
best and earliest assurance of budgetary balance.
"The bill repor ted by the Ways and t-1eans Commi ttee
carries out the tax reduction proposals of the President
and covers a large number of the areas of tax law
revision dealt with in the President's Message.
It
provides a balanced over-all reduction in the rate
structure for individuals and corporations which will
permi t an increase in econo~11ic growth through re lease
of purchasing power and greater profitability of nuw
investment.
The revisions which the bill makes are
well suited to carry out many of the objectives the
President sought in makLng his proposals, and the
reduction proposed is limited to an amount consistent
with fiscal responsibility.
Passage of the bill is a
matter of vital national interest which deserves the
support of every American regardless of party affili<.:1tion.
72
"The bi 11 is a produc t of care ful study of many
difficult matters by the Ways and Means Committee.
Some.'
may wish further structural changes and some may prefer
other solutions in this or that provision.
It is most
important, however, that the bill be enacted this year.
Although the bill rejected some of the President's
original proposals and substantially modified others,
we must subordinate differences to the broad consensus on
basic principles and thE? need for prompt enactment of LL!()
bill.
-
2 -
"To facilitate the achievement of these objectives,
I urge passage of the Ways and Means Committee bill by
the House.
I also pledge the cooperation of the
Treasury Department to minimize controversy over details
that are not consequential when measured against the
need for prompt enactment of this legislation. Therefore,
the Treasury Department will not renew in the Senate those
of last February's recommendations which have been debated
and rejected by the Ways and Means Committee.
In fact,
the only aspect of the bill to which the Treasury is
giving further study is the problem posed by the nontaxation of before-death appreciation of capital assets
of a decedent when actually sold by the heirs, a matter
not resolved by the Ways and Means Committee. Subject
only to the results of the study given to this one matter,
should the Ways and Means Committee bill pass the House,
the Treasury will limit its presentation before the
Senate Finance Committee to urging the early enactment of
the House Committee bill and commenting on any matters
raised by members of the Finance Committee.
"I believe it is important to indicate the position
of the Treasury at this time so that hearings before the
Senate Finance Committee can be expedited.
"A knowledge of this pas i tion may be he lpful to
taxpayers and organizations whose appearances before
the Senate Finance Committee or the nature of their
presentations may be influenced by the Treasury position
specifically whether it intends to support the House bill
or recommend modifications in its key provisions."
000
TREASURY DEPARTMENT
September 16,1963
FO~~
D-·jHEDIATE
~LEASE
"VliTliHOLDING OF APPRAlSEl1ENT ON
WHITE POi1TIMH) CEIv1ENT
The Treasury Department is instructing customs field officers
to withhold appraisement of white po:-tland cement from Japan pend-
ing 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 AntidulIlPing Act, determination of' sales in the United
States at less than fair ve..l-.1e vlOuld require reference of the
to the
~ariff
case
Connnission, which would consider whether American in-
dustry was being injured.
Both dumping price and injury must be
sbown to j'Jstif'y a finding of dU11!pine under the law.
The complaint in this ,~ase was received on February 5, 1963,
and vras made by O't·1elveny & :,versJ los Angeles, California, on be-
half' of the LU vel'slde Cement Company.
rece ived during the first
The dollar value of imports
r·r r
months of l.:;u3 ',.;ras approximately;Prf.95 )VVV'
r.c£..
b
000
TREASURY DEPARTMENT
=
September 16,1963
FOR IMMEDIATE RELEASE
WITnHOLDING OF APPRAISEMENT ON
WHITE PORTLAND CEMENT
The Treasury Department is instructing customs field officers
to withhold appraisement of white portland cement from Japan pending a determination as to vrhether 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 Antidump1fig Act, determination of sales in the United
States at less than i'air value would require reference of the case
to the Tariff Commission, which would consider whether American industr,y was being injured.
Both dumping price and injury must be
shown to justif'y a finding of dwnping under the law.
The complaint in this case was received on Februa~ 5, 1963,
and was made by O'Melveny
&
f.Vers, IDs Angeles, California, on be-
half of' the Riverside Cement Company.
The dollar value of imports
received during the first 6 months of 1963 was approximate~ $95,000.
000
TREASURY DEPARTMENT
WASHINGTON.
September 16, 1963
\-!Ir.;:'}JiOI.DII~C
OF APPMISEI·IENT ON
ACID
Cl~0Iv11C
r~'he
rlrreas,n-;y
Depart~ent
is instructing customs field officers
to withhold appraiccmcnt of chromic acid from Australia, pending
3.
deter!Iiin.:::.tion as to vrhether this merchandise is being sold in
the United States at less than fair value.
1s beinG published in the Feder3.l TIegister.
C Ofi1Jncrc io..l
inorcanic chemical
\'li th
Notice to this effect
Chromic acid is a
several industrial uses, the
l.1ost imporiaDt being that of chromiuril plating.
Under the Antidu.mping Aet, deterl.1ination of sales in the United
States at less than fair value would require re:ference of the case
to the ':;:'a.rif'f Commission) 1-rhieh would consider \-.lhether American
inciustry ,.;ras oein G injured.
30th du.'TIping price and injury must be
shown to justif"lJ a finding of duml1ing 'J.!lder the law.
1963.
The
months of
1953
The r.:omplaint in this case was received on 1'1ay 17,
dellar vnlue of imports rec:eived d..rring the first
'.,las ap:proxin.ately ~75 ,000.
6
TREASURY DEPARTMENT
=
September 16, 1963
FOR !MlJlEDIATE RELEASE
WITHHOIDING OF APPRAISEMENT ON
CImOMIC ACID
The Treasury Department is instructing customs field officers
to withhold appraisement of chromic acid from Australia, pending
a determination as to whether this merchandise is being sold in
the United States at less than fair value.
is being published in the Federal Register.
Notice to this effect
Chromic acid is a
commercial inorganic chemical with several industrial uses, the
most important being that of
ChrOmiWll
plating.
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
J
shown to justifY a finding of dUlll.ping under the law.
The complaint in this case was received on May 17, 1963.
dollar value of imports received during the first
was approximatelY $75,000.
The
6 months of 1963
'I."",
'Oil aiUASE .~.
]I.
S!p~iMr
fIIl,.,'$.JA ..>j.~ >1...., ,
HI
~Mr
1961·
i::S;.'i:rs
)f 1Ji~Aj::iit'S
1I1-:E·KLf BILL
16.
1"
1
.~
Ttw ~1'U.ut'y uapert.-nt umo-unced 1 ••t ...:.dng \ilia" ,,. ,.tIN Ie
tNAhJ7 bills, ODe "rie. to be an addi'\1.oDal baue ot " . . bW. -W
aDd t.be other •• ,.1 •• to De dated jeptel'lOeI" 19, 196), Vld..cb .... .,. . . .
.... opeMd .1. t}w : edeN
~mU 0:1 ,>;.pt,_ber 16. ,..........
'l,lOO,lW,OOO, or t.hereabOut.., of Jl-<181 bWe aDC1 to~
0
of 182-da, billa. The det&U. of the two . .ri.. are .a toll..a.
".sen.
_\oil
... Ion
t
31,151,000
A\laAta
)1,5So,ooo
SaD ,.'ranclaoo
~ -:'1'AL
Oil ~A'''.''
iaYlt.ed , .
' tbe...., ....
1,4d7,272,000
~
Cnl0ac0
Louis
M1••• poll.
k ..... 01t.;,
Dall..
"'- 10, lJI
.t
48,9b1&,ooo
)0,028,000
st..
t.. . ...,.
A.eeU " lor
POlI.delphia
u ...cec:l
(.8OO,ooo,OGO,
I
20,264,000
22),40S,000
39,202,000
26,749,000
.32,411,000
29,8)7,000
. U6,!>SS,OOO
.J2,lla,07!.,CXJO
pri.-'"
t,_ ....... )rUI".
~ Lacludlla ~82,4J,6,OOO ~1tl.. t,euders ........ at, ,lie . . . . . .
intiude. 403,814,000 nonooapeUtl.. t.eDden .CllptH . ,
}/..;o • OOUpOD 1.~ or t._ _ l~b. aa:l tor , .. _ _ _ ial'eft4l l, Ute ~
!I
'oqu."
r t._
~~a. b1l.la vo1lld p&-ovide T1el~ ot ).50.1.
91.- MIle, " III ,.....
l~i-Q.ay bWs. Iate...at I"a':e. OIl bUl.....
111 , _ _ . , . . , .is••.
\a. return relat.4ld \0 the !aoe ~ of , . . .m. ,.".~ d . .,
,he aoUld. infta14<l au:1 t.heir leach 11& _~ eta> •• ot ..,. ... ~ M • •
,eu. in c~ntraB1.. fi,Qld! 011 oerUt1_t.i1I, ..... , &lid It_de AN . . . . . . . 111
ot int.er.13t 011 the &B)unt. tn•• Aed, and ftlate ..... a;-. of ..,. II Pat • •
int.reeil. pa~Mt ~riOd t~) tbe acn,ual. D'Ii Rbi. 01 "78 1a "be "...uc f vi'- .allIlU.l.l coa.pouoalJig 11' u10re t.nAll one 0 0 " peI1.ocl 1. iInol.....
.
"\
Pi" ......,
TREASURY DEPARTMENT
JR RELEASE A. M. NEWSPAPERS,
llesday, September 17 J 1963.
RESULTS OF TREASURY is WEEKLY BILL OFFERING
The Treasury Department announced last evening that the tenders for two series of
bills, one series to be an additional issue of the bills dated June 20, 1963,
\d the other series to be dated September 19, 1963, which were offered on September il,
tre opened at the Federal Reserve Banks on September 16. Tenders were invited for
,300,000,000, or thereabouts, of 91-day bills and for $800,000,000, or thereabouts,
182-day bills. The detaUs of the two series are as follows:
~easury
91-day Treasury bills
maturing December 19, 1963
NGE OF ACCEPI'ED
IPETITlVE BIDS I
Price
High
Low
Average
Excepting two tenders
percent of the amount
percent o.f the amount
99.146
99.136
99.138
!I
Approx. Equiv.
s
Annual Rate
g
3.378%
3.418%
3.409% 1/
totaling $500,000
182-day Treaeur.y bills
maturing March 19, 1964
I
I
Price
98~230
98.216
98 .. 220
·
•
Approx. Equiv.
Annual Rate
3.$01%
3.529%
3.521%
!I
of 9l-day bills bid for at the low price was accepted
ot 182-day bills bid for at the law price was accepted
?AL TENDERS APPLIED FOR AND ACCEPTED BY FEDERAL RESERVE DISTRICTS:
)istrlct
"eton
8W York
IJrUadelphia
leveland
ticbmond
P4anta
Idcago
'b. Louis
lDneapolis
bas City
lUas
- FranCisco
TOTAL
35,894,000-
Applied For
Accepted
I
Applied For
48,944,000
1,487,272,000
30,028,000
31,757,000
20,264,000
31,550,000
223 1 405,000
39,202,000
26,749,000
32,411,OOO
29,837,000
116 .z655 I. 000
$2,1l8,074,OOO
$
3
I
$
$
824,120,000
15,028 1 000
31,757,000
19,264,000
28 .. 940,000
146,973,000
31,880,000
20,029,000
28,971,000
20,227,000
1
I
·•.
&
:
·••
•
·••
·
~~~555,oo0 :
$1,300,238,000 BI
ll,2$9,OOO
934,451,000
8,334,000
2},372,000
4,083,000
5,378,000
133,788,000
9,509,000
6,841,000
11,777,000
11,831,000
96.z807 2OOO
$1,257,430,000
Accepted
$ 6 1 959,000
575,201,000
5,034,000
2},372,000
4,083,000
5,378,000
72,413,000
7,509,000
4,766,000
8,677,000
6,831,000
800240702000
$800,630,000
Y
~~udes $282,446,000 noncompetitive tenders accepted at the average price of 99.138
ncJ.udes $6J,81.1h OOO noncompetitive tenders accepted at the average price ot 98.220
kl a eoupon issue of the same length and for the same amount invested, the return on
these bills would provide yields of 3.50%, for the 91-001' bills, and 3.64%, 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 bUla payable at maturity rather than
the amount invested ani their length in actual number of daY'S related to a J6o-day
year. In contrast, yie~ds 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 semi&llnua.l, compounding if more than one coupon period is involved.
-973
TREASURY DEPARTMENT
Washington
FOR RELEASE:
ON DELIVERY
REMARKS BY THE HONORABLE DOUGLAS DILLON
SECRETARY OF THE TREASURY
AT
THE WHITE HOUSE CONFER~NCE ON EXPORT EXPANSION
THE MAYFLOWER HOTEL, WASHINGTON, D. C.
TUESDAY, SEPTEMBER 17, 1963,11:00 A.M., EDT
I do not need to speak to you today about the importance of
achieving balance in our international accounts. You well know that
the dollar is at the base of the free world's payments system, which
in turn finances the flow of international trade.
The dollar must
and will stay firm -- but this requires that we balance our
international accounts in the near future even though it may call for
heroic measures.
We have been working at this job for the past 2-1/2 years, but
progress has been slow and difficult.
In the first place, we are
faced with a unique situation in which balance of payments deficits
exist side by side with an underemployed economy.
The classic
situation -- for which the remedy is well known -- is one in which
inflation and over consumption create a balance of payments deficit.
The remedy is to restrict domestic consumption and restrain inflation
py tightening credit, thereby diverting into the export market
production that the home market can no longer absorb.
But this would
)e exactly the wrong remedy in our present state of excessive
Inemployment, underutilized manufacturing capacity, and stable price
Levels. To sharply restrict credit in these circumstances would
mly lead to increased unemployment, lower profits, and less
~nvestment, when we need more of all three.
It would produce hardship
It home and would not help our balance of payments.
So we have had to try and find a different solution -- a solution
hat can at one and the same time bring prosperity at home and balance
broad. This has involved a many-sided attack which has resulted in
ignificant improvement in many areas.
But new problems have arisen
s old ones have moved toward solution, and even greater efforts are
~ necessary.
D-974
- 2 -
Let us see first of all what has been done.
In 1960, the overall
balance of payments deficit was $3.9 billion. This fell to $2.4
billion in 1961 and $2.2 billion last year.
In the first half of
1963, however, our deficit once again increased. The biggest adverse
factor was the sharp increase in recorded outflows of U. S. capital -)utflows amounting to over $2.5 billion, as compared with $1.7 billion
In the first half of 1962 and $3.3 billion for all of 1962. The
Largest share of that increase resulted from American purchases of
lew foreign securities.
At $1 billion, they were more than double
~e rate of the first half of 1962 and almost equal to the $1.1
lillion recorded for .all of 1962.
Other items changed but little and, as a result, during the
lrst half of 1963 our deficit on an annual basis ran at a rate of
ither $3.2 or $4.2 billion, depending on how one prefers to account
:or the medium-term convertible bonds which, this year, we have
old to foreign central banks for the firs t time.
We have good grounds for hope that, when the results are in for
11 of 1963, the actual deIicit will be less than the annual rate
ndicated by the first half figures.
While many of the additional
easures announced in the President's July 18th Balance of Payments
essage will not be fully effective until next year, we nevertheless
Kpect that the exceptionally large private capital outflows in the
irst half of this year will fall markedly in the second half. The
lcrease in short-term interest rates resulting from the higher
~discount rate and the proposed Interest Equalization Tax should
~lp to reduce these outflmvs.
Thus, the record shows that, while we hAve made progress, we
Ne a great deal yet to accomplish.
But before I consider what
~ can do for the future, let me touch very quickly upon some of
le efforts we have already made -- efforts we will continue to
.gment.
We have worked vigorously to cut overseas cash dollar expenditures
r defense and aid, and as much as possible to tie the expenditures
do make to procurement in this country.
In our foreign economic
sistance, the Agency for International Development during the last
seal year tied fully 80 percent of its commitments to the export
U. S. goods and services, and that percentage is scheduled to
se still further in this fiscal year.
This means lower dollar
tflows as expenditures begin to reflect these new commitments.
By
;cal 1965 the annual dollar outflow for the AID agency will be cut
half from the billion dollar level of 1960 and 1961 to not more
In $500 million.
- 3 And in our military programs, the Defense Department has held
~ts gross dollar expenditures abroad below 1960 levels, despite the
mild-up in overseas force levels due to the Berlin crisis of 1961.
\t the same time) net military expenditures abroad have been reduced
~ nearly $850 million between 1960 and 1962 -- largely because of
lur success in negotiating agreements with some of our allies for
:harply increased purchases of American military equipment.
It is, in fact, in the area of net United States Defense
xpenditures overseas that our efforts to improve our balance of
,ayments position have brought some of the most encouraging results
o date. The Department of Defense is seeking all possible means
o cut expenditures without impairing our capabilities to carry out
ur military commitments.
It has made particularly good progress
n its efforts to expand the sales of U. s. military equipment
broad. We have increased our receipts from those sales from under
400 million in calendar 1961 to well over $1 billion in 1962 -- and
e are striving to maintain a similarly high level in the future.
It
s worth noting as well that our success thus far in this area has
temmed, in large measure) from constant and close cooperation
etween government and indus try.
We are going to continue this progress in the military area.
:; the President announced last July, we intend to reduce the annual
)llar outlay of our military forces overseas by a further $300
illion a year while at: the same time reducing our purchases of
rreign strategic materials by another $200 million.
Thus, by
muary 1, 1965, reductions in defense expenditures abroad will be
)ntributing another $500 mill ion a year to the improvement in our
dance of paymen ts .
Special inter-governmental arrangements -- such as debt prepay'nts and medium-term borrowings -- with some of our friends
'erseas have also helped reduce our gold outflow and narrow the gap
our payments.
These "special transactions" amounted to $1.4 billion
1962 -- including substantial advance military payments -- and to
out $600 million in the first half of 1963.
We have acted to stem the outflow of short-term capital by a
ries of carefully managed increases in short-term money rates -ile at the same time we have maintained ample credit availability,
d long-term rates and bank loan rates have remained low or even
Clining due to the flood of liquid savings accumulated by the
efican people.
The recent increase in short-term interest rates
Duld serve -- not only to stem the outflow of short-term capital
but also to make it much more attractive for foreigners to hold
~ir assets in dollars, thus helping to reduce our gold ou tflow.
Insert page 4, following par. 4 of Secretary Dillon's Export
Expansion Speech, Tuesday, September 17, 1963.
A word of explanation may b. in order har..
about commercial export.. the exports you •• 11
basia.
I am calking
00
a commercial
Thea. are not the a.me thing •• the fiaur.. for
merchandise exports released on a monthly baste by the
Departm81lt of CODIIDarca.
Theae monthly figure. include
agricultural exports financed under PL 480 .a well . .
exports financed by the Aid agencT.
l'hea. tied exports
financed by American taxpayers have been
&r~
rapidly
during the pas
, t two years as tied aid polici.. bave takan
effect.
Thus, the monthly figure. have Dot been a Crue
indication of our competitive performance.
The true figure 1. the total of coanerc1al export.
which omits aid and PL 480 shipment."
Tbia figure 1.
published quarterly by the Department of C01mD8rce.
The
figures for the firat half of '63, which w111 .oeD b.
available, .how that our commercial trade surplus baa
actually declined fro. last ,..ar'. totallt
Thia 18 why
tria muat redouble our aflora. to wcrua8 commercial exports
and not b. satisfl.d with merely incrl8Ui.ng our lovaromenc
financed exports.
- 4 We have proposed the Interest Equalization Tax as a temporary
~asure to help turn the tide of foreign security sales in our
~rkets while slower-acting but more basic measures are taking
ffect.
We have adopted these measures and many others to keep our
ayments imbalance and the resulting gold flow to a minimum and to
asten our progress toward achieving lasting balance in our payments.
e will continue to implement these measures.
But helpful as they
re, these measures only deal with part of the problem.
By and
arge, they help reduce our payments rather than increase our
eceipts. We mus t also and increasingly concentrate our efforts
pon expanding our international receipts. More than anything else)
llat means expanding our exports.
I do not need to detail before this audience how vital exports
re to our balance of payments -- indeed, to our entire economy.
do not need to describe the many steps we have already taken to
~lp increase our exports.
In 1962, our commercial exports -- those not financed by
lvernment capital -- ran at about $18 billion.
If these exports
~ been 12 percent greater they would have offset our overall
:.2 billion payments deficit, and if they had been 20 percent
~ater they would have offset our $3.6 billion deficit in regular
'ansactions (those excluding special government transactions).
These comparisons should help define the large task ahead of
-- particularly when we consider that, since 1960, our commercial
ports have been increasing at an annual rate of about one percent.
r task is to boost this rate dramatically over a fairly short
riod of time.
This is not an easy task.
But I am convinced we can do it
we set our minds to it. The markets are there. For in the
~ years from 1957 to 1962, our share of the major industrial
tions' exports of manufactured goods -- excluding exports to the
ited States -- decreased steadily from almost 29 percent to less
an 23 percent. This means we have been losing markets that we
~d •
If we are to regain these markets and more, if we are to
~rease our exports to ..:.he levels we need -- if we are in fact to
'lieve long-range solutions to our major economic problems -m We must enact into law this year a substantial tax reduction
>gram.
- 5 Tax reduction is absolutely essential if we are to attain the
main long-term goals of our ~alance of payments efforts;
First, to expand our trade surplus, and second, to make the
United States a more attractive place to invest long-term capital,
both foreign and domestic.
~o
Already the two tax measures adopted last year -- the investment
credit and dt.::prec ia t ion re form - - have given a strong boos t to
the international competitive position of American industry. They
reduced business taxes by almost $2.5 billion a year -- and) as
one recent survey showed, businessmen credit their tax savings from
these measures for 43 percent of their planned increase in capital
spending for this year.
The proposed corporate tax reduction would
provide a comparable spur to investment and -- together with the
1962 measures -- would increase the profitability of new investment
by almos t 30 percent.
The direct stimulus of these measures -- and the overall stimulus
)f more rapid and sustained economic growth -- would greatly intensify
~he incentives for increased investment in new tools, new techniques
rod for exploration and development of new markets and new products.
~is would sharpen the competitive edge of American business, not
mly in foreign markets, but also in our own home market.
Equally important, as our economy expands in response to the tax
ut and employment and productive efficiency climb, the United States
dll become continually more attractive to investment capital, both
:oreign and domestic.
It is also likely that a more rapidly growing
conomy would soak up current savings and bring with it a natural
ncrease in longer-term interest rates that would in turn help to
low the outflow of capital.
For all these reasons, the American
ankers Association last July stated that substantial tax reduction
as a vital element in any program to achieve balance in our payments.
In no sense, however, docs this mean that the tax bill will
utomatically solve our payments imbalance or allow any of us to
elax our efforts. While the tax bill will provide the climate and
h.e extra leverage to spur us on to greater efforts and to help make
hose efforts continually more productive, it will still be
nperative that we step-up our drive to expand our exports and widen
IT access to foreign markets -- and that we maintain the kind of
1ge and price stability we have enj eyed over recent years.
Above
ll, you in private industry must work ever harder to seek out,
<plore and develop export opportunities.
For the tax bill will give
) the more dynamic and growing economy in which any measures that
)u adopt can have maximum impact -- and in which you will have the
:~ghtened incentives you must have if you are to mount an export
.lve of the scope and in tens i ty we need.
t)Oo
-
I~);'I!IPL
['l'UJn
,.")
-
all tn...:u:IUon novr or hereafter imposed on the princi.pn.l or Intcre::;t
thereof by any state, or nrw of the posGesnions of the United Stutes, or by any
local
to~"{:tnc;
[luthori t.y.
For Jlurposes of taxation the amount of discOlU1t o.t ,,,hich
Treasury 'oLlIs nrc oric;inalJ,y Gold by the United States in considered to be
int0r~
UncleI' Sec Lions 1~t1 (11) ,md 1221 (5) of' the Internal nevcnu~ Code of' IGJ1 the [';'1oun
of discOWlt ['.t 1111ic11 bills issued hereunder are sold is not considered to
8.CClllt?
untJl such bills are Gold, redeemed or othcnrise disposed of J and such bills
c;:clucled frr" 1 cons:i.d(To.tion os cnpi tal assets.
OTe
Accordincly, the owner of Treasury
bill:J (other thon l:Lfe insuroncc compo..ni.es) :issued hereunder need include in hIs 1
come
ti',X
F: 1.111'11
on orie;in<ll_ i
(.1111.\, the difference bcl:.l1een the price paid :for such billa, rrhctllcI
OJ'
n:;(I('
on GubsequcnL purchase, and the runount actually received cith
npon sale 01' rctt(-'r lp-Lion at maturity durinc the toxo..blc year for which the rctuTn 1
1
'J'te:.SU1,\'
::;cril,c tIle
Dql;ll'LJIK:nt
tell'}:]
Copies of Lhe
Circular No. 11,10 (current revision) and this notice,
pre·
of the TrcC'.,swJ bi l.l,s and Govern the conditions of their iSGue.
~irculQr
moy be obtained from any Federal Reserve Bank or Branch.
- 2 -
of Treasury bills applied for, unless the tenders are accompanied by an express
;ua.ranty of payment by an incorporated bank or trust company.
'~.'."
.
""
,.,..
~
greements with respe·c't'to".t.beo.,J?>prc.?El..~~ ~~ sale or other disposition of e:ny bilt
f this issue, until.~.f"t.er.. one"'"tl1irtY p.m., Eastetfl'S'bfmQ.a,r9:.. ~ime,
,.. ,,,~--'> ..-
...
1
l
H.lz1.
'---"'~
Immediately after the closine hour, tenders will be opened at the Federal Re~:rve
Banks and Branches" follmTing vlhich public announcement will be made by the
easury De};lartment of the amount and price ranee of accepted bids.
~
tenders will be advised of the acceptance or rejection thereof.
the Treasury
eA~rcssly
Those submi tThe Secretary
reserves the right to accept or reject any or all tenders,
whole or in part, and his action in any such respect shall be final.
ese reservations, noncompetitive tenders for
$
200,000
fit
Subject to
or less without stated
ice from any one bidder will be accepted in full at the average price (in three
Pa~nent
cimals) of accepted competitive bids.
of accepted tenders at the prices
fered must be made or completed at the Federal Reserve BankS in cash or other imHately available funds on
October 1, 1963
• ~oo.I~aiKDJaKDiB<D:jCXQS<XiiOOn::ttgi
~r"l!e penni tted to mak?;ayment by credit ~::n it§..T:reasury""t";;::;' 10+
:ount for Treasury bills allo.t.t§d to .it
>,:"' .........~-"..
~-
-......... ",-,
fOT
itself and its customers up to any
I
~
l1mt for which i.:t. -afla.ll--be qualified in excess' 'Of e.xi€lJlng deposits when' so notir
The income derived from Treasur;y bills, whether interest or gain from the sale
other disposition of the bills, does not have any exemption, as such, and loss
m the sale or other disposition of Treasury bills does not have any special treat-
t, as such, under the Internal Revenue Code of 1954.
The bills are subject to
a.te, inheritance, gift or other excise taxes, whether Federal or state, but are
(NotWi thstandlng the fact that these 'b1U
will run for 365 days, the discount rate
will be computed on a bank discount baai
of 360 days, as is currently the pract1c
on all issues of Treasury bills.)
'l'1u'Y'.SID:Y D:,,:PJ\H'J'j r:~IlT
ih~Ghjn.:::;tol1
1963
'The T:t:ec.st1:Y
Ulcl'(~[lbouts J
or
CD!
lJ1C';',itlve
:";C1"
nep~rtmcnt, 1J~r
of'
th:U:;
pu1)1~i.c
notice:
invil;e~
tendcrG fo1'
Xii
:tiij{ ,
i.w.lcl noncojYlp~titlv2
bidcUnL
0.:;
hel'c:lnai'-ccr providcd.
The bill:::; of this
a
196&
The:.' trill be irwucd in
uCC',l'l:
~
5(X!ij{
i·e.cc c;;\otmt ,rill "be J:lc.:,'cl,bJc vil,l101!L
'l.'endc:..'s "ill be l'ccc.i./r:(1 Cl.t Fcclc).'c'.l
i!ot1.-l')
il.Lll
O;l(:-~hi.l'-:"~r
nol~
p.ll.,
}'~,['.c ~.i on;;
In;,('J''-.:~L.
I:<:.3C::"VC
Eo.:::;tc:;,~l,=~~it~~c,
r,~'lnL:;
~.l1d B:L'~lJ1cheG
U8.:"
!:a, 000,
emu in the
caGC
(Wt
0;
cO~Jl)et~i_ (,~t ve
.
"(:.c:n<]21',-:;
l)c
1'1[1.<1C
196~
Tend,
Each tender must be 11
tcnrlCl':J
------------_._._-----
not be n~cQ.!\ It :i_:J tu,[:cu thc..l;
U.p to the clodr
Wednesday! September 25,
bc l"ceei ved c.t the 'l'reo.::;ury De:p{'.l'tmcnt, '\-lo.shlnGton.
even j mJtiple of
1,000,000
365 -dr'.y Treo.sury b:i.ll:::;, to br. i:::;rmed on a eli SCOlUlt bo.Gj.s un,'
ic:; uUJ. be c1rl.:~cd _ _
0_ct_ob_e_r'=rl~,~1_9....6_3_ _ _ _ _ ) on<1 ~rlll mc.tul'c September
\llt":-1~11c
.')11
~i
thc prJce o.ff~l'':!(
on the printed i'o:'I'1J a:
I;:,::'jl<:hcs on cppl:icC',t5.on therefor.
in[Jt:Ltut:i.on.s ',1.:.1 noc be l)Cl'ili-~i..C;(l ~,o ~;UbiLi.t ·:';e:nc~~...:r;:: e;:cCIJt
1'01'
their mm account.
Tc=nc;'Cl'S lT1.11 bc l'ccci vcc1 "-Tithout dCpO~.Lt J~l'om incorporated bo.n1;.:::; o.nd truGt compani
,:md
:':-1'0;1
)'c:,;pl)nslbJ.c rnd rccoc;nized c.1colc;:i.'~ in invC'stdcnt ::;ccul'ities.
e
Tenders fro:
TREASURY DEPARTMENT
=
September 17, 1963
FOR IMMED lATE RELEASE
TREASURY OFFERS $1 BILLION ONE-YEAR BILLS
The Treasury Department, by this public notice, invites tenders
for $1,000,000,000, or thereabouts, of 365-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
dated October 1, 1963, and will mature September 30, 1964, 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 hour, one-thirty p.m., Eastern Daylight Saving
time, Wednesday, September 25, 1963. Tenders will not be received at
the Treasury Department, Washington.
Each tender must be for an even
w1tiple of $1,000, and in the case of competitive tenders the price
Dffered must be expressed on the basis of 100, with not more than
three decimals, e. g., 99.925.
Frac tions may not be used.
(Notwithstanding the fact that these bills will run for 365 days,
:he discount rate will be computed on a bank discount basis of 360
lays, as is currently the practice on all issues of Treasury bills.)
[t is urged that tenders be made on the printed forms and forwarded
~n the special envelopes which will be supplied by Federal Reserve
lanks or Branches on application therefor.
Banking institutions generally may submit tenders for account of
ustomers provided the names of the customers are set forth in such
enders. Others than banking institutions will not be permitted to
ubmit tenders except for their own account.
Tenders will be
eceived without deposit from incorporated banks and trust companies
nd from responsible and recognized dealers in investment securities.
enders from others must be accompanied by payment of 2 percent of
he face amount of Treasury bills applied for, unless the tenders are
ccompanied by an express guaranty of payment by an incorporated bank
t trust company.
D-975
- 2 -
Immediately after the closing hour, tenders will be opened at t
Fc'deral Reserve Banks and Branches, following which public announce-!Il;
wi 11 be made by the Treasury Departmen t of the amoun t and price rang,
of accepted bids.
Those submitting tenders will be advised of the
acceptance or rejection thereof.
The Secretary of the Treasury
expressly reserves the right to accept or reject any or all tenders,
in whole or in part, and his action in any such respect shall be
final.
Subject to these reservations, noncompetitive tenders for
$200,000 or less without stated price from anyone bidder will be
accepted in full at the average price (in three decimals) of accepte,
competitive bids.
Payment of accepted tenders at the prices offered
must be made or completed at the Federal Reserve Banks in cash or
other i~nediately available funds on October 1, 1963.
The income derived from Treasury bills, whether interest or gail
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 Revenr
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 froo
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 t~
price paid for such bills, whether on original issue or on subsequen
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 thi
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.
000
- 3AI·JOUNTS OF SB:URITIES ELIGIBLE FOR EXCHA.HGE AND
iJ·I0UNTS OF NEW SECURITIES TO BE ISSUED
ELIGIBLE FOR EXCHANGE
Amounts
(millions)
Securi ties
4%
4-1/8%
Bonds
1968
Bonds
1973
Bonds
1989-94
$
$
$ 365
3-7(8%
%
Total
Total
unex..
Ex-
chang!
cha~ed
{m1ill
PUBLIC HOLDINGS
3-1/4~; Ctfs., B-1964
$ 2,375
4-3/4(/) Notes, A-1964
-'::'-3/4~j Notes, D-1964
3-3/4% Bonds of 1966
4~ Notes, A-1966
3-5/~ Notes, B-1967
3-3/4% Notes, A-1967
2,073
3,591
3,254
2,703
Total Public Holdings
619
193
756
500
197
789
586
276
122
320
4,122
695
4,926
655
114
106
91
142
3,698
$1,260
$23,044
1,568
$1,484
512
1,865
700
382
786
$ 891
797
62.5
24.7
51.9
21.5
14.1
19.1
16.2
$6,526
28.3
$'.6,518
1,561
1,726
2,55'
2,321
3,336
4,129
GOVT. ACCOU.NTS AND
FEDERAL RESERVE BANKS
3-1/4~~ .Ctfs., B-1964
4-3/4% Notes, A-1964
3-3/4% Notes, D-1964
3-3/4% Bonds of 1966
4;0 Notes, A-1966
3-5/810 Notes, B-1967
3-3/4% Notes, A-1967
Total Govt. Accounts
and Fed. Res. Banks
Grand Totals
$ 3,318
2,860
302
343
$
2
$
21
1) 751
165
356
$
9,095
$32,139
-=---$>
23
$1,591
;t:
$
15
15
31
68
14
43
21
31
68
14
43
0.1
0.5
7.0
9.0
3.9
8.5
12.1
]94
2.1
$5,720
20.9
o
171
$3,869$ 1,260
.$
2
$ 3,~
2,E
2
1,E
1
$25,4
Details by Federal Reserve Districts as to subSCriptions will be announced later
this week.
2
A breakdown follows of the subscriptions received from
Government accounts and from Federal Reserve Banks and from
all other subscribers and a breakdown of the securities excMngl
into the securities offered in this advance refunding, together
with the total amounts eligible for exchange (all amounts are
in millions of dollars):
2
A breakdown follows of the subscriptions received from
Government accounts and from Federal Reserve Banks and from
all other subscribers and a breakdown of the securities exchangE
into the securities offered in this advance refunding, together
with the total amounts eligible for exchange (all amounts are
in millions of dollars):
SUBSCRIPrIONS BY GDVERNr-1ENT ACCOUNl'S, FEDERAL
RE3ERVE BANKS, AND OTHERS
3-7/8%
1968
4%
Bonds
1973
$
$
Bonds
Subscriber
Government Accounts and
Federal Reserve Banks
Others
Totals
23
171
4-1/8%
Bonds
1989-94
$
Total
$ 194
1,568
3,698
1,,260
6,526
.$1,591
$3,869
$1,260
$6,720
TREASURY DEPARTMENT
FOR IMMEDIATE RELEASE
September 18, 1963
PRELIMINARY RESULTS OF TREASURY'S ADVANCE REFUNDING
The Treasury Department announced today that it is
well pleased with the results of the recently completed
advance refunding.
More than $6.5 billion of public holdings
were exchanged for the new issues, 28.3% of the total of
eligible issues held by the public.
Public holders subscribed for $1,568 million of the
new 3-7/8% bonds of November 1968, $3,698 million of the new
4% bonds of August 1973 and $1,260 million of the 4-1/8% bonds
of May 1989-94 (which had been originally issued through
competitive bidding earlier in the year).
The large subscriptions for the longer-term issues reflect the continued strength
of the long-term bond market and the confidence of the investing
public in the prevailing level of long-term interest rates.
This advance refunding will greatly facilitate the
Treasury's 1964 financing operations.
In the pre-refunding
portion of the operation, investors exchanged 48.0% of the
issues eligible for subscription, thereby reducing the amount
of securities maturing on May 15, 1964 from a publicly-held
total of about $8.0 billion to a total of about $4.2 billion.
This will not only facilitate the Treasury's refunding of the
remaining May 1964 maturities, but it will enable the market to
accommodate readily the substantial additional quantities of
Treasury bills which will be sold to meet cash requirements.
The junior advance refunding, in reducing the total
amount of debt held by the public maturing in 1966-67 by some
$2.7 ~ill~on, will also facilitate the orderly refunding of
maturlng lssues during the years immediately ahead. Some
17.8~ of the eligible issues held by the public were exchanged.
The advance refunding has had the effect of increasing
the average length of the debt by more than four months.
At
the end of September, the average length of the debt will be
more than 5 years and 3 months, the highest level since July
1956.
D-976
TREASURY DEPARTMENT
na"
FOR TIKMEDIATE RELEASE
September 18, 1963
PRELIMINARY RESULTS OF TREASURY'S ADVANCE REFUNDING
The Treasury Department announced today that it is
well pleased with the results of the recently completed
advance refunding.
More than $6.5 billion of public holdings
were exchanged for the new issues, 28.3% of the total of
eligible issues held by the public.
Public holders subscribed for $1,568 million of the
new 3-7/8% bonds of November 1968, $3,698 million of the new
4% bonds of August 1973 and $1,260 million of the 4-1/8% bonds
of May 1989-94 (which had been originally issued through
competitive bidding earlier in the year).
The large subscriptions for the longer-term issues reflect, the continued strength
of the long-term bond market and the confidence of the investing
public in the prevailing level of long-term interest rates.
This advance refunding will greatly facilitate the
Treasury's 1964 financing operations.
In the pre-refunding
portion of the operation, investors exchanged 48.0% of the
issues eligible for subscription, thereby reducing the amount
of securities maturing on May 15, 1964 from a publicly-held
total of about $8.0 billion to a total of about $4.2 billion.
This will not only facilitate the Treasury's refunding of the
remaining May 1964 maturities, but it will enable the market to
accommodate readily the substantial additional quantities of
Treasury bills which will be sold to meet cash requirements.
The junior advance refunding, in reducing the total
amount of debt held by the public maturing in 1966-67 by some
$2.7 billion, will also facilitate the orderly refunding of
maturing issues during the years immediately ahead.
Some
17.8% of the eligible issues held by the public were exchanged.
The advance refunding has had the effect of increasing
the average length of the debt by more than four months.
At
the end of September, the average length of the debt will be
more than 5 years and 3 months, the highest level since July
1956.
D-976
2
A breakdown follows of the subscriptions received from
Government accounts and from Federal Reserve Banks and from
all other subscribers and a breakdown of the securities exchanged
into the securities offered in this advance refunding, together
with the total amounts eligible for exchange (all amounts are
in millions of dollars):
SUBSCRIPrIONS BY GOVERNMENT ACCOUNI'S I FEDERAL
RESERVE BANKS, AND GrEERS
3-7/8'/0
3ubscriber
Bonds
1968
4<},
Bonds
4-1/8%
Bonds
1973
1989-94
$
:I>
Total
rernment Accounts and
leral Reserve Banks
.ers
Totals
23
171
$
$ 194
IJ568
3,698
1,260
6,526
$1,591
$3,869
$1,260
$6,720
- 3 AMOUNrS OF SECURITIES ELIGIBLE FOR EXCHANGE AND
AMOUNTS OF NEW S~UlUTIC3 TO BE ISSUED
NEW
:GIBLE FOR EXCHANGE
Amounts
(millions)
:ur1ties
3-1!fJ1;
S~uro:TIES
TO BE ISSUED
~mi1l10n~
Bonds
1968
4Cf,
Bonds
1915
4-1/
Bonds
1989-94
$ 619
$ 500
$
Total
'"
EJcTotal
changed
unexchanged
(millions)
PUl3LIC HOLDINGS
$
4:~
etfa., B-1964
4~ Notes, A-1964
4:~ Notes, D-1964
4:~ :Bonds of 1966
:>teo,_A-19S6
~ Notes, B-1967
t~ Notes, A-1967
2,315
2,013
3,591
3,254
2,703
4,122
4,926
$23.1 044
Public Holdings
193
756
--1,568
365
122
320
114
106
91
142
$1,484
512
1,865
100
382
786
797
62.5
24.7
51.9
21.5
14.1
19.1
16.2
$ 891
197
789
586
216
695
655
3,698
$1,260
$6,526
28.5-
.$16,518
1,561
1,726
2,554
2,321
3,336
4,129
T. ACCOUNTS AND
ERAL RESERVE BANKS
~ etfa., B-1964
~ Notes, A-1964
'Notes, 1)..1964
~ Bonds of 1966
~es, A-1966
, Notes, B-1967
, Notes, A-1967
$
3,318
2,860
302
$
$
21
343
1,751
165
356
-
d. Res. Banks
$ 9,095
$
Grand Totals
$32,139
$1,591
Govt. Accounts
$
15
15
0
31
68
14
43
21
31
68
14
43
0.1
0.5
7.0
9.0
3.9
8.5
12.1
2
23
-
2
$: 171
$
J 94-
2.1
$3,869$ 1,260
$6,720
20.9
$ 3,316
2,845
281
312
1,683
151
513
$
8,901
$25,419
eta11s by Federal Reserve Districts as to subsc,riptlons will be announced l.ater
eek.
- 3 -
and exchange tenders vill receive equal treatment.
Cash adjustments vill be made
for differences betYeen the par value of maturing bills accepted 1n exchange and
the issue price of the new bills.
The income derived from Treasury bills, whether interest or gain frOIl1 the
or other disposition of the bills, does not have any exemption, as such, and
rut
1088
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 a.re BubJec1
to estate , inheritance, gi:f't 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 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 considered
to accrue until such bills are sold, redeemed or otherwise disposed of, and such
bills are excluded from consideration as capita.l. assets.
Accordingly 1 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 purcha.se, and the amount a.ctuall
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 Trea.sury 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 1n 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 vill be received without deposit from incorpora.ted 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
a.ccom~i~
by an express guaranty of payment by an incorporated bank or trust company.
Immediately after the closing hour, tenders will be opened a.t 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 1n part, and his action in MY such respect shall be
final.
Subject to these reservations, noncompetitive tenders for $ 200,000 or
~
June 27, 1963
,(
91 days remain------~~---------~
December 26, 1963
) and noncompetitive tenders for
less for the addltiona.l bills dated
ing until maturity date on
$100,000
or less for the
~
182
4Dl
-day bills without stated price from anyone
4llJ
bidder will be accepted in full at the average price (in three decimals) of sccepted competitive bids for the respective issues.
Settlement for e.ccepted ten-
ders in accordance with the bids must be made or completed at the Federal Reserve
Banks on September 26
19'"'3
Wfo
, in cash or other immediately available funds or
in a like face amount of Treasury bills maturing
September 26, 1963
fUJ
•
Cash
TREASURY DEPARTMENT
Washington
FOR IMMEDIATE RELEASE,
September 18, 1963
XXXX~XXXXXXXXXXXXXXX
TREASURY'S WEEKLY BILL OFFERING
The Treasury Department, by this public notice, invites tenders for two aerie
of Treasury bills to the aggregate amount of $ 2,100,000,000 , or thereabouts,
W
September 26, 1963, in the ~~
cash and in exchange for Treasury bills maturing
W
of $ 2,101,881,000 , as follows:
~
91 -day bills (to maturity date) to be issued
~
in the amount of $
1,30~OlOOO
September 26, 1963
~
, or thereabouts, represent-
ing an additional amount of bills dated
and to mature
December 26, 1963
~
amount of $ 798 z8~OO
~r
June 2iHJ1963
,
, originally issued in the
, the additional and original bills
to be freely interchangeable.
182 -day bills, for $ 800 ,O~OO
>tM3t
, or thereabouts, to be dated
September 26 , 1963 , and to mature
March 26 txij64
XCd&){
The bills of both series will be issued on a discount basis under competitive
and noncompetitive bidding as hereinafter provided, and at maturity their
amount will be payable without interest.
f~e
They m.ll be issued in bearer form only,
and in denominations of $1,000, $5,000, $10,000, $50,000, $100,000, $500,000 ~d
$1,000,000 (maturity value).
Tenders will be received at Federal Reserve Banks and Branches up to the
Daylight Saving
Monday I September 23, 196~
_
closing hour, one-thirty p.m., EasterIf'~ time,
(15)
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
FOR IM}ffiDIATE RELEASE
TREASURY'S WEEKLY BILL OFFERING
The Treasury Department, by this public notice, invites tenders
for two series of Treasury billa to the aggregate amount of
$2,lOO,OOO,OOO,or thereabouts, for cash and 1n exchange for
Treasury bills maturing September 26,1963, 1n the amount of
$2,101,881,000, as follows:
9 L day bills (to maturity date) to be issued
in the amount of $1,300,000,000, or thereabouts,
additional amount of bills dated June 27, 1963,
mature December 26,1963, originally issued in the
$798,837,000,
the additional and original bills
interchangeable ~
182 -day bills, for $800,000,000,
September 26,1963, and to mature
September 26, 1963,
representing an
and to
amount or
to be freely
or thereabouts, to be dated
March 26, 1964.
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 $l,OOO~
$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-th1rty p.m., Eas tern Daylight Saving
time, Monday, September 23,1963.
Tenders will not be
received at the Treasury De~artment, Wash1ngton • Each tender must
be for an even multiple of $1,000, and in the case of compet1tive
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 subm1t 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 depos1t from Incorporated banks and trust companies and from
responsible and recognized dealers in investment securities. Tenders
from others mus.t 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-977
- 2 lnunediately after T,he ~~losing hour, tenders will be opened at
the Federal Reserve Banks ,~nd Branches, following which public
announcement will be made D-,;r 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 77
1963
(91-days remaining until maturit¥ date on
Deccmbe~ 26,1963) and noncompetitive tenders for $100,000
or less for the 182-day bills without stated price from anyone
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 26, 1963
in cash or other immediately available funds or in a like face
amount of Treasury bills maturing September 26,1963. Cash and
exch8.r.ge tenders vlill receive equal treatment. Cash adjustments
will be made for differences between the par value of maturing
bills accepted in exchan~e 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 aCCFt.le 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
subs0quent purchase> and the amount actually received either upon
s:l.=--e ~}r redemption 3.t m2turlty during the taxable year for which the
return is made., as crdinary gain or loss.
~reasury Depart:n2nt Circular No. 418 (current revision) and this
notice prescribe the terms cf the Treasury bills and govern the
conditions of their issue.
Copies of the circular may be obtained fr
any Federal Reserve Bai-.k or Branch.
C')o
TREASURY DEPARTMENT
FOR IMMEDIATE RELEASE
Robert A. Wallace Takes Oath As
Assistant Secretary of the Treasury
Supreme Court Justice Byron R" White today administered the oath
office to Robert A. Wallace as Assistant Secretary of the Treasury, a
new position recently established by the Congress.
The ceremony was wi tnessed by Treasury Secretary Douglas Dillon,
Senator Paul H. Douglas and other Congressional and Administration
leaders.
Mr. Wallace has served in the Treasury since January, 1961
as an Assistant to the Secretary.
Secretary Dillon cited Mr. Wallace for his efforts in the formu1
and execution of Treasury policies in the economic, fiscal, and e~10
ment fields. A former staff director of the U. S. Senate Committee 0
Banking and Currency, Mr. Wallace will continue policy supervision ov
the Bureau of the Mint and the United States Secret Service. He will
also continue to represent the Treasury in matters pertaining to the
formulation of the national budget.
As the Treasury's Emp loyment Po licy Officer, Mr. Wallace is give
much of the credit for the Treasury's record in fair employment pract
during recent years.
Secretary Dillon said that the Treasury's
achievement of tripling the number of Negroes in the highest regular
classified positions and increasing their number in the middle profe~
levels were the results of Mr. Wallace's "quiet determination" in
tapping "hitherto unused human resources in this Nation in the intere
of better public service."
Prior to his association with the Treasury, Mr. Wallace was a
consultant to Senator Ke~nedy, and during the Presidential campai~
1960, was responsible for research on economic policies.
Born in Oklahoma, Mr. Wallace studied at Oklahoma State Univers
He received his A.B. degree from the University of Washington, and h
Ph.D. degree from the University of Chicago.
In 1949 he came to
Washington as legislative assistant to Senator Paul H. Douglas of
Illinois, later serving with the Committee on Banking and Currency.
000
D-978
TREASURY DEPARTMENT
R IMMEDIATE RELEASE
Robert A. Wallace Takes Oath As
Assistant Secretary of the Treasury
Supreme Court Justice Byron R. White today administered the oath of
fice to Robert A. Wallace as Assistant Secretary of the Treasury, a
Nposition recently established by the Congress.
The ceremony was witnessed by Treasury Secretary Douglas Dillon,
latar Paul H. Douglas and other Congressional and Administration
:lders. Mr. Wallace has served in the Treasury since January, 1961,
an Assistant to the Secretary ..
Secretary Dillon cited Mr. Wallace for his efforts in the formulation
i execution of Treasury policies in the economic, fiscal, and employIt fields. A former staff director of the U. S. Senate Connnittee on
lking and Currency, Mr. Wallace will continue policy supervision over
~ Bureau of the Mint and the United States Secret Service.
He will
3D continue to represent the Treasury in matters pertaining to the
~ulation of the national budget.
As the Treasury's Employment Policy Officer, Mr. Wallace is given
h of the credit for the Treasury's record in fair employment practices
'ing recent years. Secretary Di lIon said that the Treasury's
.ievement of tripling the number of Negroes in the highest regular
ssified positions and increasing their number in the middle professional
els were the results of Mr. Wallace's "quiet determination" in
ping "hitherto unused human resources in this Nation in the interest
better public service. 1\
Prior to his association with the Treasury, Mr. Wallace was a
sultant to Senator Kennedy, and during the Presidential campaign in
0, was responsible for research on economic policies.
Born in Oklahoma , Mr. Wallace studied at Oklahoma State University_
.
received his A.B. degree from the University of Washington, and h~s
D. degree from the University of Chicago.
In 1949 he came to
~ington as legislative assisl:ant to Senal:or Paul H. Douglas of
lnois, later serving with the Committee on Banking and Currency_
000
78
- 2 -
SU;·lliJARY OF AJI0UNT
AND
:NUl,IDER OF
SUBSCRIPrIONS RECEIVED
III SEPJ.'El·!BER 1963 ADVANCE REFUNDING
(Dollar Amounts in Millions)
3- 7 / 8~j funds
of 1968
Am01.illt Ho.Sub.
1ndi vi duo Is
1I
Government
Accounts
Grand Totals
l/
'!J
Amount No.Sub.
TarAL
Amount No. Sub.
-
142
7,840
201
3,362
7,207
395
3,042
5,293
$3,719 14,519
$1,259 1,105
$6,546
20,340
23
$ 171
~
$ 194
$1,591
$3,890
$1,259
$6,740
509
4,622
378
3,976
866
5,921
2,384
1,997
554
922
1,622
~-;;1,568
4,716
y
Totals
4-1/ 8?~ Bonds
of 1989-94
15
100
~
Commercial Banl:s
(Glm account)
i i l l Others
4;;; Bonds
of 1973
Arno'..ll1t No.Sub.
$
27
1,410
987
$
$
$
Includes pc.rtnerships and personal trust accounts.
Includes insurance companies) mutual savings banks, corporations exclusive of
cOl~';1erci21 ban}:s, p:civate pension and retirement funds, pension, retirement and
other lUnds of State and local gover~ments, and dealers and brokers.
TREASURY DEPARTMENT
REPORTS BY FEDERAL RESERVE DISTRICTS
OF SUBSCRIPTIONS TO CURRENT ADVANCE REFUNDING
r;-he 'l'rea.::;ury Depe.rtment announced today the results of the current advance refuD
j.ng
0:.' __ 'er
8~·:
3-7/8~ Treasury Bonds of 1968, due Nov~~ber
15, 1968, in exchange for the follmdQg
securities due f,lay 15, 1964:
3-1/ 4)~ Treasury Certificates of Indebtedness of Series :8-1964,
4-3/4); Treasury Notes of Series A-1964, and
3-3/ 4~ Treasury Notes of Series D-1964; and
4;~, Treasury Bonds of 1973, due August 15, 1973, and
4-1/8% Treasury Bonds of 1989-94 (additional issue), due relay 15, 1989-94, in exchan.
3-1/4% Treasury Certificates of Indebtedness of Series :8-1964, due May 15,
1964,
4-3/4% Treasury Notes of Series A-1964, due May 15, 1964,
3- 3/4% TreastU'y Notes of Series D-1964, due ~,ia.y 15, 1964,
3- 3/ 4~J Treastrry Bonds of 1966, due Hay 15, 1966,
4~~ rl'reasury Notes of Series A.-1966, due August 15, 1966,
3-5/8~~ Treastrry Notes of Series B-1967, due February 15, 1967, and
3-3/4::, Treasury Not2s of Series A-1967, due August 15, 1967.
Total subscriptions amount to $6,740.6 million, which includes $6,546.3 million
exchanged by public holders and ~194.3 million exchanged by Government Investment
Accounts.
4-1/8% BONDS
OF 1989-94
FEDERAL RESERVE
3-7/ffJ/o BONDS
(Addi ti ona1
4% BONDS
DISTRICT
Total
OF 1968
OF 1973
Issue)
Boston
New York
Philadelphia
Cleveland
?.ichmond
Atlanta
Chicago
St. Louis
?--tinneapolis
Kansas City
D511as
San Francisco
'Ires sUY"".f
Govt. Inv. Accts.
Totals
$
77,902,000
745,371,000
33,251,000
96,193,000
42,291,000
39,082,000
257,668,000
34,896,000
41,320,000
38,958,000
22,060,000
134,173,000
4,852,000
23,250,000
$1,591,267,000
$ 205,377",500
1,913,982,000
50,277,500
107,728,000
44,543,000
65,974,000
496,010,500
104,694,000
103,719,000
97,980,500
93,431}000
430,187,500
5)139 500
171,238~00o.,
$3,890,282,000
16,067,000
982,768,000
58,863,500
1,935,000
2,539,000
4,243,000
90,633,500
4,136,500
1,982,500
2,281,000
13,395,000
78,855,000
1,331,000
$ 299,34E
-----
194,43
$1,259,030,000
$6,740,57
$
3,642,12)
142,3~
205,85E
89,3n
109,29!
844,3li
143,7Zf
147,02:
139,21!
128,8&
64:3,2l!
ll,:3Z
-
There is attached a table showing an analysis of subscriptions by investor caSE
D-979
TREASURY DEPARTMENT
~ IMMEDIATE RELEASE
REPORI'S BY FEDERAL RESERVE DISTRICTS
OF SUBSCRIPrIONS TO CURRENT ADVANCE REFUNDmG
The Treasury Department announced today the results of the current advance refundoffer of:
5-7/&Ip Treasury Bonds of 1968, due November 15, 1968, in exchange for the following
3ecurities due May 15, 1964:
~
3-1/4~ Treasury Certificates of Indebtedness of Series B-1964,
Treasury Notes of Series A-1964, and
3-5/4i Treasury NOtes of Series D-1964; and
4-51.'4
~
Treasury Bonds of 1973, due August 15, 1973, and
~l/eJip Treasury Bonds of 1989- 94 (add.! tiona1 1s sue), due May 15, 1989- 94, in exch8J'l.ge
~or:
3-1/4f1, ~easury Certificates of Indebtedness of Series B-1964, due May 15,
1964,
~5/4% Treasury Notes of Series A-1964, due May 15, 1964,
3-S/4i Treasury Notes of Series D-1964, due May 15, 1964,
3-S/4fI, Treasury Bonds of 1966, due May 15, 1966,
4:~ Treasury Notes of Series A-1966, due August 15, 1966,
5-5/810 Treasury Notes of Series :8-1967, due February 15, 1967, and
5-5/4~ Treasury Notes of Series A-1967, due August 15, 1967.
Total subscriptions amount to ~~6, 740.6 million, which includes $6 , 546.5 million
Ilanged by public holders and $19~L. 5 million exchanged by Government Investment
~unts.
4-1/e;J, BONDS
!>AL RESERVE
.WCT
ton
3-7/ff/o BONIS
OF 1968
$_
York
ladelphia
'eland
haond
Illta
:ago
lDuis
*:polis
"8 City
las
1'ranc1sco
tal1l1
~. lllv.
Accts.
Totals
IIL~Q2,OOO
745,,371, 000
33,251,000
96,193,000
42,291,000
39,082,000
257,668,000
34,896,000
41,320,000
38,958,000
22,060,000
134,173,000
4,852,000
23,250,000
$1,591,267,000
OF 1989-94
(Addi tiona1
Issue)
4% BONDS
OF 1973
$ ___ ~Q~ .. 311~Q~L
1,913,9.82,000
50,277,500
107,728,000
44,543,000
€5,974,000
4,96,010,500
104,694,000
103,719,000
97,980,500
93,431,000
430,187,500
' 5 139 500
171~238~000
$3,890,282,000
$
16,067,000
982,768,000
58,863,500
1,935,000
2,539,000
4,243,000
90,633,500
4,136,500
1,982,500
2,281,000
13,395,000
78,855,000
1,3:31,000
Total
, __
?~~ .!:346 L 500
3, 642, 12l, 000
142,392,000
205,656,000
89,373,000
109,299,000
844,312 J 000
143,726,500
147,021,500
139,219,500
128,886,000
643~ 215 , 5j)O __ .
-----
11322,500
194!488iOOO
$1,259,030,,000
$6, 740,579,000
~-
There is atta.ched a ta.ble showing an analysis of Bubscriptions by investor cla6ses.
n"979
- 2 -
SUMMARY OF AMOUNT AND NUMBER OF SUBSCRIPrIONS RECErVED
IN SEP1'EMBER 1963 ADVANCE REFUNDING
(Dollar Amounts in Millions)
3-1/8% Bonds
of 1968
Amount No. Sub.
Ind.1 vi duals
Y
Government
Accounts
Grand Totals
Y
Y
TarAL
Amount No. Sub~
$ 100 5 , 921
$
15
509
$ 142
7,840
4,,622
578
201
3,362
7,207
3,976
866
395
3,042
5 / 293
$3,719 l4,519
$1,,259 1,105
$6,546
20,340
i
~
981
2,,384
1 , 991
554
922
1,622
$1,568
4,716
y
Totals
of 1989-94
Amount No. Sub.
1,410
Banks
(Own accoWlt)
$
23
$1,591
4-1/ Bi Bonds
of 1913
Amount No. Sub.
27
$
Co~nercla1
All others
4'f, Bonds
171
$3,890
.... -
$1,259
f
194
$6,740
Includes partnerships and personal trust a(.!counts.
Includes insurance companies, mutual sav1ngs banks" corporations exclusive of
cC'mmercial banks, priyate pension and retirement funds, I>enslon, retlr~nt and
other i'unds of State and local governments, and dealers and brokers.
r .,.
....
-
.J.J!(t
L .... ~.i...L i t
lCC; •
T.~"C
.J.doption of this pol icy would be
~...
the
~~euer~Jtioll ~
of
0'-<.1'
~~rowtn,
ta.~X
ctl~Lll(;:Ut:;cs
0(.;01101 lie
38 -
'-j
structure better adapted to
of the Sixties -- more job
iJ.J.:t !...l'tili/~':t.tion of resources,
hlaher rate
bc:tlanced ill tarnal budgets and a. ba.lance in
idten.l.l.tion~tl
~aymellts
-- a tax structure which
will interfere su!Jstantially less than the present oae
with tile ol:J€r~tio .. ~ of the free market mechaniBlll while
S~\l.Jt-ilyilJ.~
aJ,ld
the
:;,~ev'e.<hlCS
necessary
na ti oual puul ic needs.
to
our na.tional security
- 37 spending -- 1s one tha.t the Administration ba.. a.de by
".t
proposing tax reduction.
Now the Congre • • •
for the nation -- whether :,.we
wi~U
decide
move forward, throulh
the tax program, to a more product! ve taaorrow or .b.ther,
by closing the tax road.
to invite an 1ncrea. .d rat. of
government spending with the likelihood of additional
budgetary deficits as the alternative route toward aD
economic expansion to make jobs, goods, aDd .ervices
for all our people.
The Administration's economic program, with tax
reduction as its centerpiece, is designed to release
and (:;llcOUrd.gt.' tne il1hercnt expansionary forces in our
great i,ceo Illarl{et economy.
It is designed to eliminate
an lluduly heavy tax drag ou purchasing power and deIlaDd --
to fJl'ovide 1:6(.'''. incentives for more investment and increaMd
effol't
p~~
tv encourage the utilization of new technolOlY
- 36 sector of the economy for economic well-beiaa.
lie qui te rightly stresaed tbe point that tax reducttOQ
is far superior to increased Federal expenditur •• a. a
means of stimulating the economy becau . . it
bol.t.~
the initiative of private individuals aDd bu.iD. . . fir..
in making economic decisions.
In other word., it
enlarges the role of the private sector 1a tbe . . . r1can
economy rather than enlarging the role of Government.
President Kennedy himself has made it clear that thl.
is
exactly wbat the tax program involv...
lie pra1. .d the
Mills' statement only two days ago, anG added that he
himself subscribed to it.
This 1a ODe more in8'tance where
the President has voluntarily put himself on reoord . .
opposing excessive spending by the Federal govera.eut.
So the choice -- tax reduc~1on rather than 1Dore~.
- 35 tax reductiull CVLlld d(.'pri ve the economy of a strong 8t1.ulu'
;It
the very
tilac l.t wa.s c.t'itically needed.
l"L.lall y .tod pel.'haps most important , that tyinC
(;O!.ldi tiollS to t:1.X reductiofl makes
da..t'ua.~;es
tht.~
it less certain a.Dd
:J!.lf;iness and investor confidence so important
to improvint: our (;-coJlomic performance.
Actut]..lly,
a.etivity offers
of course, a. period of rising economic
.J.
Illuell bette'c climate in which to practice
eXi>Cudi ture cOlltrol than a period of chronic slack or
recession,
>Nilen b.e<..L.vy spendin~ is likely.
between spendiug a.nd
~
t~x
The relation
reduction was put very well in
recent stct.t-e;:l€tlt Ly Chairman blills himself.
In it be
stressed the impol:tU.l1Ce of the Administration's choice
of tax l'eductioH, instead of increa.sed Federal spending,
at]
"l,
l!1e~us of (;:uL.\.rging the responsibility of the private
-
34 -
fiscal 1905 the tax program would involve a r.dYoti08 1a
revenue $5 billion greater than the reduction in 1ge4.
There has been a great deal of diaeu.a1oa about
.uKr.'
tions that the tax cut be made contingent on ac.ae otMr
factor, such as the dent level, or expeDd1ture •• tlaat••.
As the flaws in each of these suggestions have been made
apparent
substitutes have been produced.
Ba81cally tbe
reasons such meaSures have failed to rally broad .upport
were summarized only last week by President KeDDed,..
TheJ
are simply these:
-- That the tax cut is needed OD ita own merlte, and
should not be made conditional on other events.
-- That revenue, defic1t, and debt •• tlaatea .&de
before Congress votes on appropriations Are nece.aaril,
uucertain.
Th.lt if any slowdown in economic activity 8bould
occu:c ~
l'e "V'el!Ues Nould drop, and condi tiona placed upGD
-
will
-
L.evt protJortionately lower tban the incr.a. .
l.C
in o,-u'
3:J
Na. tiou.l.l Pl'oduct and thus the retLl
Gl'l)SS
l.;u:cdcu oJ the
i~ederal
Gebt will be steadily reduced.
specific assurances
The Presitleut ll.as
:.ceglJ.rdit"&g l.lota tllt;~ iisci:4.1 19(j4 uudget and th~t of ii.cal
l~th
19btJ.
lie statect in his hugust
~ilbur
Mills 01 the tiousc Ways and Means Committee, that
eve11 taking Lito :.J.ccount the
cut, he expecte(1,
contingency
01.'
intervened, to
l'CVenl.le
letter to Chairman
loss from the tax
;ctS long as no serious internationa.l
u..ui'ol'esocil slowdowu. in the domestic econoay
SUhll1i t
to the Congress in January a budget
for fisc ..-tl l.h;f, involving ail estimated deficit of le ••
tilaa tile dofic.i. t
of ~9.2 billion forecast for 1964.
In
other ""oras, the deficit estimate for fiscal 1965 would bI
Si:l
L
1.l.l.er
tUa..d
t1.~;j.t
0f
fiscal 1964 despite the tact that in
- 32 --
President Kennedy himaelf oaly last .oatb
14e-affirmed 11is determination that tax reductl00
will be accompanied by the exercise of an eveD t1chter
rein on Federal expenditures limiting outlays to
only tbose
ex~oditures
which meet strict criteria
of nat10nal need.
The Pre.ident bas
a.5
repea~.dly
pledeed that
the tax cut becomes fully effective aDd the econa.),
cl1m.bs toward full e111ployment a substantial part of
the increased tax revenues will be applied toward a
reduction in the transitional deficit.
~ich
accoapdJ
the iu1tial cut in tax rates.
Finally, the P.resldent haa said that
increase in the ¥ederal
deb~
trans1tional budget deficit.
all,
resulting fra. tb. . .
- 31 The current 1964 budget calls for a
less total of expenditures for all the are. .
of the budget taken together excepting defeose,
space and interest on the public debt -thing attempted in
80. .-
only three out of the last
fifteen years -- while state and local governm.Dt
expenditures in recent years have been increa8iDI
at about seven per cent a year.
--
In each of the three budgets submitted by
President Kennedy, proposed expenditures -- other
than those required for space, defense and 1nt.reat
on the public debt -- increased less than they did 1
the last three budgets of the preceding administrat1
- 30 -
The natural vlt.lity of
our free el1terp:x:ise E"conomy will then be allowed to
function more effectively, and greater levels of output,
cmplo~nt
A
dnd tax revenue will
bal~lced
follow.
buegec, of course, requires fir.. ex-
penditure control, and that is something this lfmnJd.a.
tration considers to be important in and of itself and
.ill
essentidl
aCI~ompaniment
to a policy of tax reduction.
In dppr.J.isins this problem of establishing a
firm control of
f<=,d(.~ral
expenditures J there are so.
[.:.lets that you should know:
3udget (2xpenditures for civilian agencies
in
t,:i.-1t.'
finc,.ll year just ended (1963) were $1.7 bilU
- 29 The
~dct
of the tax program on the 8eOltMy
will come almost immediately.
That
iap.ct~
to,ether
with the natural growth of the economy. will preveat
revenues from falling below 1963 levels.
In fact,
tota 1 amount: of revenue losa from the tu eut will
::l-le
be only $5 billion to $7 billion aver the two or thr••
years it will take for revenues to catch up anti exceed
what they would have been without a tax cut.
Thl. would
lDE"an that if we were to reach full etIII'loyment by 1966 -something we cannot. of course, pred1.ct -- our Feeleral
Budget receipts would be $20 billion higher in fiscal
1~(~7
~:h.an
they will be in fiscal 1964.
In othf.::1:' 'Words, one way to balanee the budget i l
i..D
b~lance
the economy -- to remove the heavy drag of
- 28 ,Elly ~)l. 0
:.;il1iol1 of that amount ia attributablA
co tb.c t~x '~Ut:
~ith th~
4
tc.i~"~..::ut
But the currently e.tia&ted def1clt
Is
~lct:ually
iorecdst lasT:
J~!nu..J.:cy
cut.
tl1"-~
Part OJ:
lower than the deficit
for fisca.l 1964 without a tax
i1.11provement is the reault of the
pickup in the ceo"nomy
sinc~
then.
This ahowa the cloae
connection bCLwecn deficits and the economr.
For the
truth is thilt much of our persistent l'irge deficits
is
"-::Lle cesult oL
d
Idgging economy.
The pre.ent h1&h
tux r.:1tes tend to :.lbort or hold back recover1•• abort
O.l..
'
L: h c.: ~l;~
,. I"J. growtH.
1.cu
But as the tax cut moves the
c.:!onomy ~J) u Jligher plane 0;; activity It tax revenue. will
u:; co restoci. Qur budget to balanct: through a h1gber
-
, ,
- 27 prospect .is the rate reductions take eff'ect aad the
withholding rate drops.
So much, then, for the impact of the tax proar-am
on the economy and upon your particul.ar iDcIua try.
I
would now like to consider a topic on which there will
be much discussion as the tax debdte .we. throush the
Congress -- the subject of the effeet of the tax prosraa
on Feder41 finances.
You are
al1~
of course, concerned with the tap1i-
cations the tax bill has for the Federal Bucllet, and
rightly GO.
Certainly there will be .cae teaporary
crease in thQ deficit.
~
The fiscal 1964 def1eit:, for
instance, is ex~ccted to be just over $9 billion -- ~
- 26 •
most serious problem facing the new home buyer -.
finding the- combination
~vithin
loan that is
his
o~:
c~pacity
lines of prudent lenders.
proposal can
b~
down-payment and mortgage
and within the guide-
Of course, no feasible tax
expected to provide the lump au. ot
cash that younger faDdlies need to meet the
payment .
l~t
d~
it can hl-lVe -- and the proposed tax progr.
would have -- a direct: imp,I;tct upon the credit capability
of many families. ra:iking home ownership for the ttr.t
time
.;1
more practical proposition for some and a larger
mortgage possible for other.
3gre~
:\11 of you will, I a • •ur.,
that along with job st:lbillty, take-home pay i • •
key f3ctOl:" tn :lny credit appraisal.
~,voult.t
tU):"i.1 t:1:1UY
~-:.
'l1\e new tax
proar-
m.:1rginal prospect into a profltabla
- 25 i~oom
of thE first postwar decade ia pretty well ex-
hausted.
Tht! dec 1sion to buy a. house now turu 8)re
than anything else upon a purchaser's conf1deace iD
his job, in his prospects for uninterrupted and Maher
income and in the assurance of
which he can
shar~.
4
proaperoua ecoaoar in
Today our schools and collea••
are crowded with younger people who will
into the li-lbor force.
.OOA
a'lVe out
How soon they find jobs and
what kind of jobs they find will be inatru.ental in
their decisions on whether or Dot to purcbaa. a ho..
Cert~inly
individual tax reduction will provide
Ddddle and upper income taxpayers with inereaaed abilitu
and incentivEs for home ownership.
r€duc tion in the lower
bracke~.
The even larger t.a
can help overc_ the
- 24 luevic~bly
t.here lvi11 be a substantial increase in
the quantity
~ud
quality of home ownership.
ownership has long been a
and public policy
goal of our cltlzena,
pr~ry
h~s alw~ys
Ha.e
supported it.
The 1nereaae
in after-taz. income resulting from tax reduction would
give more people the means to purchase and
In
~dditionJ
own ha.ea.
it would give those who already have
homes the means to own better homes.
~qually
thE'
important, the tax program would nouriah
vital ingcedient of confidence.
TIle purchase of a
':touse is the single largest conmitment the average
j~rican
ever
L~d~rtdkes.
It is
d
long-term
commi~t
that is closely related to his confidence in the future.
Today the hSG.\iY nacklog of demand tr..at fed the housing
- ...'J3 -
to ;Joint to the possihility of negative develop. .nta,
I do so mer£~ ly to emph~isize that failing to £ct or
postponing action is ,:} course of conduct not without
responsibilities of its own.
When the Gon:.::;ress passes the tax bill subat&ntlally
in the form reported out by the House Ways and Means
Coumittee, it will ha.ve enacted legislation that will
play
cl
decisive role In our economic development over
next decade :.lnd beyond.
The savings dne loan industry has a tremendou.
stak€ in th.lt: decadE of economic develop1l¥!nt -- in the
6r~ling
expansion of our economy..
course» will
rising
~}en.cfit
e,[i~) lO:Y"L.'1(711t,
Your industry, of
from the overall pattern of
rising income and rising profit •.
th~
- 22 -
Bue the
t~x
bill is the best posaible measure v.
could adopt to
cession
~ll
min~ze
the possibility that a re-
occur in the near future or to lessen the
harm£ul effects of such a recession if one did oceur.
(!pT'ncre is no need for "gloom" or udoom".
There
i.,
011
the contrary, every reason for confldenee 1n the baaic
vitality of our free enterprise economy.
But the
time has arrived when we can no longer tolerate the
backward pull of high tux rdtes.
W~
It is i.q»erl:ltive that
subst3ntially reduce taxes and that we do it along
the general lines proposed by the President and -.bodied
in the tax bill, for the hard fact i8 that the pre.eat
bill offers us our
on~y
real chanee of reducing taxe.
at all tor the foreseeable future.
If I take the t t .
- 21 To those who would stand at
~he
eroearoada
today and urge a "wait and see" attitude or a ...... t
that we can really do without the tax cut, it . .y be
observed that there 1s no way to judse bow auch lanaer
the present expansion will continue.
M Pr•• ldent
Kennedy pointed out just caR day. ago, the United
States has had a recession on the average of every
42 months since the second World War -- .very 44 IIDDth.
since the first World War.
b~en
By November it
~ll
have
42 months since the last race •• ion began and by
January, when the tax cut would go into .ffect t 1t: vill
have been 44 months.
No prcJent evidence .ugg•• ta that a rece •• loa ,.
imminent t nor do I expeet
0 ..
ill the near future.
- 20 ~~h~
:~ap
hetw€'en actual and potential output from
$30 bil110n to something like $60 billion.
~~rthermore.
it is quite possible that the tax
bill could actually avert a recesaion which otherwtae
might occur.
It is generally accepted that the
eflectiveneS8 of anti-recession measure. depeadsa
great deal upon how soon they are brought into play.
It certainly stands Co reason that the .oat effective
time of t.111 is before the recession begins.
1 think
without question that the expectation of broad tax
reductim~
hds a14eady played some p_rt tD the econoadc
advance of 1963.
or
pOBtpon~ment
Correspondingly, of courae, any delay
or tllredt to dilute or truocate the tax
program could be expected to Qave
III
dAlllpeniD& effect on
- 19 pl"t~'vei1t ~11
cvt?nt 2"cOln happening.
What it can do 1.
assure that if the damage occurs its economic effects
\tlill be less than they would have been without in.uraDCe.
To put it Glu-ntly.
d
recession which occurs when the
economy itself is in a strong position will cauae far
less damage thdn
~
recession which falls upon an
economy alrt::d.dy weakened by persistent slack.
If emplo}l1nent and output ar€ alreddy below par
b(:fore
d.
recession begins, even a moderate downturn
can carry us to lower levels of economic activity than
would
ot:herwis~~
be like ly.
If, for example. r1ght DOW
we \'1ent into ,:1 downturn of the proportions of 1957-SI,
it hJS been estimated that unemployment could increa••
to somethiIlb like 8 percent of the labor force, and
vt-
-
18 -
It
in orde:c to
lI.nm-edia to
,nGfJt
;:-U:.I t
." y c 11 C .:> 1
....
to
tnc
'"'
_"
I.oit.
<l110","
idote
·l .t. l ,~
,:. .."-1
~ ,
;- JL.\...,
E:conomy to
,4.
>
[0.1'
It
•
~.i..isic
CUi'l(.
tC;i.1!-'O.i'aJ.·Y
\.-\.
w~s
':1..,ilG
\l
'Ii.J.S
co~dl tiO!l
i;0851 L)lo
uot
0"-
l'eCOIIU1MtDded
to provide
IUl
case of temporary
designed <is a long-range prograa
i t ..l l forces of our free market
ia to fuller play.
It was designed to
.J.llow our economy to breal\. out of the disappointing patterD
of recent years into a newer vattel"D of aore rap1d .rowtb.
Ne v(;;.rtheles5,
tile td.X prog.l-a..tn also offers a very
.
,70
- 17 toda.j'
OJ.
this crossrod.ds.
t
.Ve ca.n choose to free our
economy from the a.rtificial brake of high tax rate. and
.lllow it ouce again to
;)1.'
JtlOVC
.for\fa.rd under 1 t.
OWD
power.
we can delay dud r.JOstpoLlC and increase the likelihood
of repeating the disavpointing and dreary rOUDd 01 recover,
a.nd recession Mhich
h~s
mal.·ked tile postwar period.
Please don't 1Il1suaderstand me -- I do not wish to
su~gest
tilat the t..i.-" b111 cclrries some magic protection
against 'tile oli.slueas cycle.
offer is the
lii~elihood
I t does not.
Wha. t 1 t doe.
that, should a. recession occur,
it will be far less damaging than it would ha.ve been
wi thout
~
t,lX
This is
cu t.
c'iil
lm}Jortant point and I would like to
consider it furthel·.
The tax program Was not des1&Ded
- 16 Congress has estimated
th~t
-- as a result of th1 • • O-Call~
"!Rul tipller" effect -- the tax cut would increa" our total
national output to some $30 to $40 billion.
Let Ule empha.size once aga.in that this 1fl11 be aD
increase 1n
~lorm(l.l
economic act1 vi ty .
In other word8,
releasing the drag which our high tax rates have imposed
\.iV0.,l
our economy
~111
allow the natux·d.l vi tali ty of our
free enterprise system to make a maximum contribution
to accelerated econoillic growth.
said last January:
employment of our
As President KallJledJ
"The la.rgest single barrier to full
ru~npower
and resources and to a hiiher
ra tc of econoltlic growtn loS the unrea11stlc.411y heavy drac
(;t
f'ederal
1i.~cOl"Ue
taxes on pri va te purchasing power,
initiative ..d.1d inccIltive. tI
That is the crux of the choice we ft\.ce as . . eta.Dd
- 15 Individual income tax liability will be lowered
billion.
More than
3~k
b~
of this will be spent aDd
••
re-8peat
circulating throughout the economy in such a fashion aa
to increase overall consumer spending by _veral tl __ the
~~ount
of the
initl~l
tax cut.
This sustained Increa..
in the demand for conswner goods and services will 1n turn
stim.ulate greater investment in plant and equiPMent.
~eanwhile,
corporate tax reductions will provide DeW
investment incentives by increasing the Det rate of return
on capital investment and by making additional profit.
a.vailable for investment expenditures.
demand increase, more jobs
Kill rise.
~11l
As inv•• 'taent aDd
be created and lDCa.e8
'rhus investment and demand wlll each . . rve
to stimulate the otlwr to create an upward spiral of
(>,->~)nOi.i11c
act! Vi ty .
The Joint Economic eo..1 t'tee of tile
- 14 reduction a.ud more tHan one-half of the corporate rate
reduction would go into effect less than four .ootha fraa
today, and the remaining reductions would be effective
less than It.> ulonths from today, 011 January 1. 1966.
you consider these figures, which already include
WMD
t~
effects of proposed rovisions in individual corporate
and capt tal ga.ins taxes
I
you can see that eome $7 billlOD
in net tax reduction will go into effect within a few
months -- $S.d billion for lDdivlduala and $1.4 bl11100
for corporations.
~ore
lm~ortant,
however, than the billion. 01 dollar.
that will be turned back into the uational spen41Q& streu
aDd into nelll investJnent
J
..v111 be what theae dollars .111
do for the economy.
The impact on the economy will not be lOQK in coalD'
-
13 -
The recoanmendatio1)s of President Kennedy to the
Congress reflected that ba.laDce, a.nd the btll recently
voted by the House .'Vays a.nd Me4i.ns Commi ttee reflects
that balance.
The bill coata.il1s a number of revisions in the tax
law, designed to proraote growth
01:"
increase tax equity,
but the ma.jor revision is the overall reduction in iocoae
tax rates.
That reduction will reduceitbe taxes of vlrtua
every taxJ;Jayer and every business in the United Sta.t••.
bssentially, here ts what i t involves.
~"1rst,
of
get
~ll
tb.e ta.x bill provides for total net tax rec:tuc1
billion a year.
~.$g. 7
Of this amount, individual. would
billion and corporations $2.3 billion.
The redu,
tioa wO\lld be effective in two stages -- the first 1D
tHe second
1~65
.
Two-thirds of the
lndlvi~
- 12 -
markets and higher profits and incomes.
But without
the stimulus of iucreased consumer purchasing power,
investment stimulus a.lone would not develop the
lIlQ8entUII
required to break out of our pattern of slow growth.
In other wOl"ds
required to
brc~
J
a locally maj or fiscal stimulus wu
out of the pattern from 1957 to 1ge3.
At our receut pace, even allowing for current lmproveMDt,
if potential U.S. output continues to grow at
a year
J
~
perceat
it would take roughly 10 years for the U.S • • con~
to reach full employment.
Obviously
do
Ie
simply can't .a1 t
that lOAI·
balanced bill wa.s called for -- ODe Dot
ouly balanced among taxpayers at different income leyel.,
but also one balanced in terms of containing adequate
stimulus both to iuvestment and demand.
-
effect
011
11 -
productive investment.
III ma.killg pla.ns for ca.pital speDdiuB 10 IIMl3, for
instance, iJusinessmon, according to a recent 8urv• ."
1.d1el
that the t..vo tax cllauges a.ccounted for 43 cent. out of
~very
and
additioaal dollar they planned to speDd
Oil
pla.Dt
this YC4r.
equi~ent
Iuvestw.eut alone, however t
is not enouKb -
IDcreaMeI
demand is also essential to creating tbe econoalc pU8h
'lie
need today.
~or
1udustry will Dot increaae investment 1••• 18 1
V:l.l't iculaz"ly
to t'xpa..od catJacl ty, wi tbou't strone iDdlcatioa
that markets will 00 available for the good. wbleb that
e~~~ded
invest~&nt
will create.
is the touchstone for translating edl.a.catioa and
tOCIU10logiC..l.1
advance
into ne. products, new jobs, new
- 1U -
lllarket tJroceS~€S uy L.Jl",cing increased spendiull power in
t~lt.:
Hc.Ulds of
incentive to
COilSUmel'S
~l'ivate
lnvcstmeat
private
~ross
compolleu t
tx'end.
~as
and investors cUld offerlllK aore
iuvestment interests.
particularly critical.
u~estic
iuvestmeut
l'tJ~son
pJ.'esideat Kennedy a.s a. firet and
urgent step recommended that
to spur investment -- the i
The in ves t.meu t
a second
was the OA8 major
of ecouOl.lic ac ti v i tYNhich had sbown DO upward
,t'or tha t
~rovision
Since 1957
~oDgre.s
ta.x credi t,
-- the
01 course, becuae tb.e cell'
1~2.
11bera11~AtiOll
vi depreciaLle equipment,
inceDt1~
lJercent inveIJtmsnt tax credit
of the .L\evenue _-lct of
~~sure
pasa a n ••
~hich
To 1 t
was added
of the tax treau.
was caapleted by the &eel
of the Treasul'Y uader his own admiuistrat1ve author1 ty.
These nH:~..LSUres together have reduced business taxes by
- 9 -
i;ct"'f3en ;.l.chicv~ment .4nd potential.
Obviously SOIDethlDI
Ilh.lst b€ dOtle to lift
the ,'uuerican economy to a. higber
uor~"'1.;"l
The question is, what means should
~;€J.~fO,L;';:...nC(:.
l.-';'csicic.nt
outset.
~.)y
V'll ....'
Th(;!
l'\. ... ~.lledy
cU~E'
ic.l.ccd this question at the very
of i.!lonetary £io1icy
ValL-LIe\:.. of pa..Yii.lcnts problem.
Wa.S
seriously limited
'l'herefore, a. Jllajor
l'eli.:u!ce on fisca.l Vo1icy Was called for.
WaS
I
should sveadlut,:
~.It
The queetloD
in.crea.sed or should tues be
P,t'(;sideut !'".eunedy a.,flllO\lllCed his choice
t.il.).lJ
four mOilths <.1.fter l1c took office.
tax t'lCS8agc to the COllg.r:ess he proposed
Oe<.;;owe the .\,C'J'enu€: ,'.ct uf 1962.
~l,.nnourlced
that
~}C
At
le ••
In his April liel
"hat
was later
tbe same time be
ha.d ordel'ed a tborough review of our
idCOfilC
t.l..'i:
S'tl~ucture.
t·) ~.,~;,,;
t.~.';'
tJ01icy to seek expansion through our free
That was the
~llcy
decision:
to
-
;)Ul'
8 -
ecouo!>ly has certainly made a.dvances..
Gr088
National Product has increased some $80 billion 10 the
la.st 2-1/2 yca.rs over the ~50() billion rate we bad wben
President Kefulcdy took office.
but oot impressi ve enough.
That gain is impre8.ive
.r"or iustance,
if we bild been
able to l'cduce ullcmployrA6nt to 4 pel'cent our GNP rate
in the secoud qua.rtcr of this year would have beeo
~~10
or
~o20
billion instead of
By almogt
.my
~580
billion.
mea.sure you choose,
our economic
iJerforula.J.lce over the past five or six years has been far
iI'Ol,'1
adequa. te ,
lil.th the eJt:ceptiou of the Depression,
un peri.od iu tilis century ha.s wi tnesaed such a persi.teJlt
under-ut11i~Atioll
of prod.Jctive resources in the United
States.
ObVi01..1S1y something must be done to close the gap
- 7 •
f(FU'-;';h
1"actor '.I{hich provides a slgn1f1ca.ot
meas,-u,'"e 01 economic performance 1& busia••• fixed
investment -- a DlajO:a:" fact.or in detenaining a.rowtb,
mode~'nization
and full employment.
III 1856 aDcl Ig17
busiuess fixed investment averaged 11 percent of total
!:>ince that time it has fallen to rougbl,. 01 . . pel"-
output.
cent.
Since
1~57
the rate of increaae 10 our .took of
business plant and equipment baa ri.en by J,••• 'than two
percent a year, compared to four perceat a year in the
f'irst postw4.r decade.
Furthermor., there b.. .
a....
a
disturbing rise in the proportion of our aacb1nery aad
equipment which is more than ten years old.
Finally,
pe~~cent
rates ill
W.1.
th.
O~~
national growth rate of 1••• thaD
t~
since early 1.955 co.pares unfa..orably With rei'llai'
Westel~n
El.ll'ope of four to six percent, and eV.D
our own four percent treAd in .ucb of the period
- 8 element in any long-range solution of tbi.
For a tax cut 1B ne.ded botb to sharpeD
prob~.
. . .bl11t,
~rio
to compete with foreign goods in aarket. abroad &ad at
bome and to _aka the Un! ted Stat•• a . . . . . ."*rut! ...
place to invest -- the two
_aDfJ . . .b.otald
clepeacl ..,..
to bring our internatIonal payment. into bal.... 1.
the long run.
A third _&Sure of our inadequate eoo8Oldc ...., ......
over the past five or 81x year. 1a the defteSt 1.
Federal budget.
Tbe Federal budaet baa bad f1 . . deflc1a
1n the past six years -- deficit. whicb • .era...
billion a year.
Tho•• deficit. . .re
elearl~
of the failure of our econo.y 'to pel"fol'll
potential.
t~
the
~.lt
at ,. t. Ill .....
Consequently, tax reveDues tatled
adequate levelS, and a deficit occurre••
".1
~ ~
- 5 -
Association of Manufactur.... , wbo _"ll1ateci Uaa' if
0\11'
economy keeps on producina jobs oilly at tile le•• l of
recent years, by 1970 uneJDployaent oould ri . . to a
staggerinK 12.7 percent.
If there were
DO
otbar
consideration at all, tbe ne.d to create th. . . &dd1tiooal
jobll would make the tax
pro~...
a _tter
But there are other co1lllideratiDD8.
For 0 . . SIai...
our illternational balaDce of pay_ate haa bee. a c . . . .
for concerD ever since 1957.
Tbe
p.ra~.t.at
lar. . defilia
in our balance of pa.ymenta have led to a .....&e4 *ata
our national gold stockll.
aIlnowaced a new eeries of
P.... lde.t x.anecb' .--atlJ
_a8\1&"..
"to
cope wi til tile
balance of pay.ellta, but a.t the a..- tt. . Iae .de iot
abundantly clear that the tax
p~osr"
i . the yltal
08
- 4 back down to f1 ve and one-ha.lf.
Pt •• aac1 a balf perc•• t
Toda,
is too high, and we must do substantiall, better.
around four mi Ilion Americans wbo are actively loolr.101 fOI
\York are unab Ie to f i ad it.
last June 30 more thall
During tbe year wbJ.ch eoded
one million workers were &d.decI to
the labor force, but one out of every .1x a180 joined tb.
l,-anks of the Llnemployeu.
the labor mu'ket, and 1 t
As the postwar baby boom hi ts
1s just beginning to do
pressure to create new jobs will 1ncre. . . .
80,
tile
In adclition
we need to provide at least a adllloD job8 a year for
those workers idled by technological adyaoc...
Aa
additional million or more jobe wll1 be requir.d to br1DI
unemployment down to our interim goal of four percent.
The importance of this problem was under11Ded by a
statement by W. B. Gullander, President of the •• tional
- 3 Much more 1s at stake than a ."deleD
teaaporar~
econoDlic pickup which will peter out in a y ....
02'
two.
expaaaioD
Instead our goal is a 8ustaioed
.COD~C
which will produce jobs, income, profits aDd tax r . . .aue
at a significantly higher level over tbe lon.-ter.
future.
What is at stake 1s a higher nor•• l 1 . . .1 of
economic activity.
That 18 our goal.
I am cODYiaced
that the tax bill offers tbe best . .aD. of reachiDI it.
Wben we look at our recent ecoao.lc record it
becomes painfully evident that our ecoQoay baa aot be.a
performing adequately.
At home unemployment haa varied fro. flve to .....
percent of the labor force or higher for more thaa 11 ••
years.
Today unemployment haa been reduced to five and
one-half percent.
But
tha~
happeaed earlier in th1.
ccollomic expansion, and we bave baa to work bard to g.t
- 2 -!"ecolruDenda tions 01' the President' II tax reduction Uld
revision program.
Decisive action on that program
before the end of this session of the CoDgr••• Will
vitally affect and should seriously concern every
responsible citizen.
The cboice we face
is basically whether to coatiDu.
in the pattern of unsatisfactory growth , high UDemployment, unbalanced budgets and an unfavorable
balance
of payments, alternating with frequent reces81oD,
which has characterized the econo.y for the laat fl ••
years -- along with the economic uncertainties involved
in such a course -- or whether .e w1ll move boldly aDd
forcefully to bring our economy to a new and more rapidly
rising level of activi ty.
~e
And if we choose to
must choose how we do it.
180. . . . . . .d,
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20. 1963, 2: 00 P.M. (IV!')
L ...,.L. CUH.ON.-\L'0,
t
S).~y}·~B£R
Ifex't ..reek the House of t(eVresenta.tlve. w1ll YO'te
up or
tiOl)
dOlm
ot
the
:rlOSt
significa.nt piece of ecoac:alc 1-.. 1.1a-
the last fiftet:i,
yt;a.~·s.
!'it:t:'lda at an ecotlOtn lc crossroads.
'.the United States today
Our choioe a. to *1e11
,.,ay we turu . i l l detcrlnine io good part IMhat our
cAp~citles
~il1
Ue
to moet cballenges both at
~
aud
"llJl-oad not only next year or the year a.fter bdt for _ ,
years to
r~te
COt...,.
reouction
It will also deterain. wbether by tax
'Ne
choose the private 8nterprlae route
to ecorlOOlic growth and full emplO)'lMut or reI, for
_"ddt tional
tnr~lst
on an expalld1Dg
st;ellding.
ii.S
}lQU
Kl104' ~
tne HOUse ~til.ys CUld aiea1l8 COIiIUal t t. . baJI
Treasury Department
Washington
FDR RELEASE ON DELIVERY
-
REMARKS OF THE HONORABLE HENRY H. FOWLER
UNDER SECRETARY OF THE TREA.SURY
BEFORE THE CALIFORNIA SAVINGS AND LOAN LEAGUE
HOTEL DEL CORONADO, CORONADO ISLE, CALIFORNIA
FRIDAY, SEPTEMBER 20, 1963, 2:00 P.M. (PDT)
Next week the House of Representatives will vote up or down the
most significant piece of economic legislation of the last fifteen
years. The United States today stands at an economic crossroads.
Our choice as to which way we turn will determine in good part what
our capacities will be to meet challenges both at home and abroad
not only next year or the year after but for many years to come.
It will also determine whether by tax rate reduction we choose the
~rivate enterprise route to economic growth and full employment or
rely for additional thrust on an expanding rate of government spending.
As you know,
the House Ways and Means Committee has just voted
Ipprova1 of a bill embodying the principal recorrnnendations of the
lresident l s tax reduction and revision program.
Decisive action
In that program before the end of this session of the Congress will
itally affect and should seriously concern every responsible citizen.
The choice we face is basically whether to continue in the pattern
f unsatisfactory growth, high unemployment, unbalanced budgets and
n unfavorable balance of paym(~nts, alternating with frequent
ecesSion, which has characterized the economy for the last five years
- along with the economic uncertainties involved in such a course
r whether We will move boldly and forcefully to bring our economy
o a new and more rapidly rtsing level of activity. And if we
hoos e to move ahead , Wf~ must choose how we do it ..
Much more is at stake than
sudden temporary economic pickup
hich will peter out in a year or two.
Instead our goal is a
Ilstained economic expansion which will produce jobs, income, profits
1d tax revenue at a significantly higher level over the long-term
lture. What is at stake is a higher normal level of economic
~tivity. That is our goal.
I am convinced that the tax bill offers
le best means of reaching it.
980
8.
- 2 When we look at our recent economic record it becomes painfully
evident that our economy has not been performing adequatelYe
At home unemployment has varied from five to seven percent of
the labor force or higher for more than five years o Today unemployment has been reduced to five and one-half percent. But that
happened earlier in this economic expansion, and we have had to work
hard to get back down to five and one-half.
Five and a half percent
is too high, and we must do substantially better o Today around four
million Americans who are actively looking for work are unable to
find it. During the year which ended last June 30 more than one
million workers were added to the labor force, but one out of every
six also joined the ranks of the unemployed. As the postwar baby
boom hits the labor market, and it is just beginning to do so, the
pressure to create new jobs will increase. In addition we need to
provide at least a million jobs a year for those workers idled by
technological advances. An additional million or more jobs will be
required to bring unemployment down to our interim goal of four
percent. The importance of this problem was underlined by a
statement by W. B. Gullander, President of the National Association
of Manufacturers, who estimated that if our economy keeps on
producing jobs only at the level of recent years, by 1970 unerr~loyment
could rise to a staggering 12.7 percent.
If there were no other
consideration at all, the need to create these additional jobs would
make the tax program a matter of compelling urgency.
But there are other considerations. For one thing, our international balance of payments has been a cause for concern ever since
1957. The persistent large deficits in our balance of payments have
led to a marked drain on our national gold stocks. President
Kennedy recently announced a new series of measures to cope with the
balance of payments, but at the same time he made it abundantly
clear that the tax program is the vital element in any long-range
solution of this problem..
For a tax cut is needed both to sharpen
American ability to compete w:Lth foreign goods in markets abroad and
at home and to make the United States a more attractive place to
invest -- the two means we should depend upon to bring our
international payments into balance in the long run.
A third measure of our inadequate economic performance over the
past five or six years is the deficit in the Federal budget. The
Federal budget has had five deficits in the past six years -deficits which averaged $6.3 billion a year. Those deficits \'Jere
Clearly the result of the fai lure of our economy to perform at its
hi!gher potential.
Consequently, tax revenues failed to reach
ad~quate leve ls, and a defici t occurred"
- 3 A fourth factor which provides a significant measure of economic
performance is business fixed investment -- a major factor in
determining growth, modernization and full employment
In 1956 and
1957 business fixed investment averaged 11 percent of total output.
Since that time it has fallen to roughly nine percent. Since 1957
the rate of increase in our stock of business plant and equipment
bas risen by less than two percent a year" compared to four percent
a year in the first postwar decade. Furthermore, there has been a
disturbing rise in the proportion of our machinery and equipment
which is more than ten years old.
8
Finally, our national growth rate of less than three percent
since early 1955 compares unfavorably with regular rates in Western
Europe of four to six percent, a.nd even with our own four percent
trend in much of the period before 19550
Our economy has certainly made advances. Gross National Product
has increased some $80 billion in the last 2-1/2 years over the
$500 billion rate we had when President Kennedy took office. That
gain is impressive but not impressive enough.
For instance, if we
had been able to reduce unemp loyment to 4 percent, our GNP rate in
the second quarter of this year would have been $610 or $620 billion
instead of $580 billion ..
By almost any measure you choose, our economic performance over
the past five or six years has been far from adequate.. With the
eKception of the Depression, no period in this century has witnessed
such a persistent under-utilization of productive resources in the
United States.
Obviously something must be done to close the gap between
achievement and potential. Obviously something must be done to lift
the American economy to a higher normal performance" The question
is, what means should be employed.
President Kennedy faced this question at the very outset. The
IlSe of monetary policy was seriously limited by our balarc e of paynents problem. Therefore, a major reliance on fiscal policy was
~al1ed for.
The question was, should spending be increased or
3hould taxes be reduced? President Kennedy announced his choice
less than four months after he took office"
In his April 1961
:~~ssage to the Congress he proposed what was later to become
:he Revenue Act of 1962. At the same time he announced that he
lad ordered a thorough review of our income tax structure. That was
:he policy decision: to use tax policy to seek c::xpansion through
'Ut' free market processes by placing increased spending power in
he hands of consumers and investors and offering more incentive
o private investment interests.,
- 4
~
I~ve~tment was
domest~c 1nvestment
particularly critical. Since 1957 gross private
was the one major co~onent of economic activity
which had shown no upward trend o For that reason President Kennedy a
a first and urgent step recommended that Congress pass a new incentivi
to spur investment -- the 7 percent investment tax credito
The investment tax credit, of course, became the central provision of the Revenue Act of 1962. To it was added a second measure
the liberalization of the tax treatment of depreciable equipment,
which was completed by the Secretary of the Treasury under his own
administrative authority. These measures together have reduced
business taxes by some $2-1/2 billion, and have already had a signific~t effect on productive investment.
In making plans for capital spending in 1963, for instance,
businessmen, according to a recent survey, indicated that the two
tax changes accounted for 43 cents out of every additional dollar
they planned to spend on plant and equipment this year.
Investment alone, however, is not enough -- increased demand is
also essential to creating the economic push we need today.
For industry will not increase investment levels, particularly
to expand capacity, without strong indication that markets will be
available for the goods which that expanded investment will create.
Certainly investment is the touchstone for translating education and
technological advance into new products, new jobs, new markets and
higher profits and incomes. But without the stimulus of increased
conSumer purchasing power, investment stimulus alone would not
develop the momentum required to break out of our pattern of slow
growth.
In other words, a really ma.jor fiscal stimulus was required to
~e~ out of the pattern from 1957 to 1962.
At our recent pace,
even allowing for current improvement, if potential U. s. output
continues to grow at 3.5 percent a year, it would take roughly 10 years
for the U.. S. economy to reach full employment. We simply can't
wait that long.
Obviously a balanced bill was called for -- one not only balanced
~ong taxpayers at different,income levels, but also one balanced
in terms of containing adequate stimulus both to investment and demand.
The recommendations of President Kennedy to the Congress reflected
t~at balance, and the bill recently voted by the House Ways and Means
C~nnnittee reflects that balance"
I
The bill contains a ntnnber of revisions in the tax law, designed
to promote growth or increase tax equity, but the major revision is
the overall reduct-ion in --i--aCOIDE! tax rates e That reduction will reduce
- 5 the taxes of virtually every taxpayer and every business in the
~ited States.
Essentially, here is what it involves:
First, the tax bill provides for total net tax reduction of
$11 billion a year.
Of this amount , individuals would get
$8.7 billion and corporations $2.3 billion. The reduction would be
effective in two stages -- the first in 1964 and the second in 1965.
~o~thirds of the individual reduction and more than one-half of
the corporate rate reduction would go into effect less than four
months from today, and the remaining reductions would be effective
less than 16 months fro'J1 today, on January 1, 1965. When you
wnsider these figures, which already include the effects of
proposed revisions in individual corporate and capital gains taxes,
you can see that some $7 billion in net tax reduction will go into
effect within a few months -- $5.6 billion for individuals and
$1.4 billion for corporations.
More important, however, than the billions of dollars that will
be turned back into the national spending stream, and into new
investment, will be what these dollars will do for the economy.
The impact on the economy will not be long in coming. Individual
income tax liability will be lowered by $9 billion. More than
90 percent of this will be spent and re-spent circulating throughout
the economy in such a fashion as to increase overall conswner
spending by several tim.~s the amount of the initial tax cut. This
sustained increase in the demand for consum(~r goods and services will
in tum stimulate greater investment in plant and equipment.
Meanwhile, corporate tax reductions will provide new investment
incentives by increasing the net rate of re turn on capital investment
and by making additional profits available for investment expenditures.
As investment and demand increase, more jobs will be created and
incomes will rise. Thus investment and demand will each serve to
stimulate the other to create an upward spiral of economic activity.
The Joint Economic Conunittee of the Congress has estimated that -as a result of this so-called "multiplier" effect -- the tax cut would
increase our total national output to some $30 to $40 billion.
Let me emphasize once again that this will be an increase in
nna
!l2; l economic activity..
In other wrods) releasing the drag which
Dur high tax rates have imposed upon our economy will allow the
Ilatural vitality of our free enterprise system to make a maximum
~nttibution to accelerated economic growth.
As President Kennedy
said last January:
"The largest single barrier to full em;>loyment
)f Our manpower and resources and to a higher rate of economic growth
ls the unrealistically heavy drag of Federal income taxes on private
lurchasing power, initiative and incentive."
- 6 That is the crux of the choice we face as we stand today at
We can choose to free our economy from the
artificial brake of high tax rates and allow it once again to move
fo~ard under its own power.
Or we can delay and postpone and increase
the likelihood of repeating the disappointing and dreary round of
recovery and recession which has marked the postwar period.
wis crossroads.
Please don't misunderstand me -- I do not wish to suggest that
the tax bill carries some magic protection against the business cycle.
It does not. What it does offer is the likelihood that, should a
recession occur, it will be far less damaging than it would have
been without a tax cut.
This is an important point and I would like to consider it
further. The tax program was not designed as an anti-recession
measure. It was not recotmnended in order to meet a temporary
condition -or to provide an immediate antidote for a possible case
of temporary cyclical anemia.
It was designed as a long-range
program to allow the basic and vital forces of our free market
economy to come into fuller play. It was designed to allow our
economy to break out of the disappointing pattern of recent years into
a newer pattern of more rapid growth.
Nevertheless, the tax program also offers a very important
sort of recession insurance. Like any form of insurance it cannot
prevent an event from ha;.>pening. What it can do is assure that if
the damage occurs its economic effects will be less than they
would have been without insurance. To put it' bluntly, a recession
which occurs when the economy itself is in a strong position will
cause far less damage than a recession which falls upon an
economy already weakened by persistent slack.
If emp1oym'2nt and output are already below par before a
recession begins:J even a moderate downturn can carry us to lower
levels of economic activity than would otherwise be likely. If:J
for example right now we went into a downturn of the proportions
of 1957-58,'it has been estimated that unemployment could increase
to something like 8 percent of the labor force, and widen the gap
between actual and potential output from $30 billion to something
like $60 billion.
- 7 Furthermore, it is quite possible that the tax bill could
actually avert a recession which otherwise might occur.
It is
generally accepted that the effectiveness of anti-recession measures
depends a great deal upon how soon they are brought into play.
It
certainly stands to reason that the most effective time of all is
before the recession begins.
I think without question that the expectation of broad tax reduction has already played some part in the
economic advance of 1963. Correspondingly, of course, any delay
M postponement or threat to dilute or truncate the tax program
could be expected to have a dampening effect on public confidence.
To those who would stand at the crossroads today and urge a
"wait and see" attitude or suggest that we can really do without the
tax cut, it may be observed that there is no way to judge how rnuch
longer the present expansion will continue. As President Kennedy
pointed out just two days ago, the United States has had a recession
on the average of every 42 rnonths since the second World War -every 44 months since the first World War.
By November it will have
been 42 months since the last recession began and by January,
when the tax cut would go into effect, it will have been 44 months.
No present evidence suggests that a recession is imminent, nor
do I expec t one in the near future.
But the tax bill is the bes t
possible measure we could adopt to minimize the possibility that
a recession will occur in the near future or to lessen the harmful effects of such a recession if one did occur.
There is no need for "gloom" or "doom". There is, on the
contrary, every reason for confidence in the basic vitality of our
free enterprise economy.
But the time has arrived when we can no
longer tolerate the backward' pull of high tax rates.
It is imperative that we substantially reduce taxes and that we do it along the
general lines proposed by the President and embodied in the tax bill,
fur the hard fact is that the present bill offers us our only real
chance of reducing taxes at all for the foreseeable future.
If I
~ke the time to point to the possibility of negative developments,
I do so merely to emphasize that failing to act or postponing
~tion is a course of conduct not without responsibilities of its
own.
When the Congress passes the tax bill substantially in the
form reported out by the House Ways and Means Committee, it will
hne enacted legislation that will play a decisive role in our
economic deve lopmen t over the nex t decade and beyond.
- 8 The savings and loan industry has a tremendous stake in that
decade of economic development -- in the growing expansion of our
economy. Your industry, of course, will benefit from the overall
pattern of rising employment, rising income and rising profits.
~"itably there will
be a substantial increase in the quantity
and quality of horne ownership.
Home ownership has long been a
primary goal of our citizens, and public policy has always supported
it. The increase in after-tax income resulting from tax reduction
would give more people the means to purchase and own homes.
In
addition, it would give those who already have homes the means to
own better homes.
Equally important, the tax program would nourish the vital
~~edient of confidence.
The purchase of a house is the single
largest commitment the average American ever undertakes.
It is a
long-term commitment that is closely related to his confidence
in the future.
Today the heavy backlog of demand that fed the
housing boom of the first postwar decade is pretty well exhausted.
The decision to buy a house now turns more than anything else upon
a purchaser's confidence in his job, in his prospects for uninterrupted and higher income and in the assurance of a prosperous economy in
4hich he can share.
Today our schools and colleges are crowded
~ith younger people who will soon move out into the labor force.
fow soon they find jobs and wha t kind of jobs they find will be
lnstrumental in their decisions on whether or not to purchase a
lome.
Certainly individual tax reduction will provide middle and
Ipper income taxpayers with increased abilities and incentives for
lome ownership.
The even larger tax reduc tion in the lower bracke ts
:an help overcome the most serious problem facing the new home buyer
'. finding the combination of down-payment and mortgage loan that
.S within his capacity and within the guidelines of prudent lenders.
If course, no feasible tax proposal can be expected to provide the
ump sum of cash that younger families need to meet the downpaylent. But it can have -- and the proposed tax program would have -direct impact upon the credit capability of many families,
aking home ownership for the first time a more practical proposition
or Some and a larger mar tgage pas s ib Ie for others.
All of you wi 11,
am sure, agree tha t along wi th job s tabi! i ty, take -horne pay is
~y factor in any credit appraisal.
The new tax program would
Un many a marginal prospect into a profitable prospect as the
ate reductions take effect and the withholding rate drops.
So much, then, for the impact of the tax program on the economy
1d Upon your particular industry.
I would now like to consider a
)pic on which there wi 11 be much d iSCliS s ion as the tax deba te moves
- 9 -
through the Congress -- the subject of the effect of the tax pro-
gram on Federal finances.
You are all, of course, concerned with the implications the
Certainly
there will be Some temporary increase in the deficit. The fiscal
1964 deficit, for instance, is expected to be just over $9 billion
but only $1.8 billion of that amount is attributable to the tax cut.
fut the currently estimated deficit with the tax cut is actually
lower than the deficit forecast last January for fiscal 1964
without a tax cut.
Part of the improvement is the result of the
pickup in the economy since then. This shows the close connection
between deficits and the economy. For the truth is that much of
oor persistent large deficits is the result of a lagging economy.
The present high tax rates tend to abort or hold back recoveries
short of their full growth.
But as the tax cut moves the economy
to a higher plane of activity, tax revenues will increase sharply
despite the lower rates, and will allow us to restore our budget
to balance through a higher level of economic activity.
tax bill has for the Federal Budget, and rightly so.
The impact of the tax program on the economy will come almost
immediately. That impact, together with the natural growth of the
economy, will prevent revenues from falling below 1963 levels.
fu fact, the total amount of revenue loss from the tax cut will be
only $5 billion to $7 billion over the two or three years it will
take for revenues to catch up and exceed what they would have been
without a tax cut.
This would mean that if we were to reach full
employment by 1966 -- something we cannot, of course, predict -- our
Federal Budget receipts would be $20 billion higher in fiscal
1967 than they will be in fiscal 1964.
In other words, one way to balance the budget is to balance
the economy -- to remove the heavy drag of our present high tax
rates. The natural vitality of our free enterprise economy will
then be allowed to function more effectively, and greater levels
of output, employment and tax revenue will follow.
A balanced budget, of course, requires firm expenditure control, and that is something this Administration considers to be
important in and of itself and an essentia 1 accompaniment to a
policy of tax reduc tion.
In appraising this problem of establishing a firm control of
federal expenditures, there arE~ some facts that you should know:
- 10 -- Budget expenditures for civilian agencies in the fiscal
year just ended (1963) were $1.7 billion below the January
estimates.
-- The current 1964 budget calls for a less total of expenditures for all the areas of the budget taken together
excepting defense, space and interest on the public debt -something attempted in only three out of the last fifteen
years -- while state and local government expenditures in
recent years have been increasing at about seven per cent
a year.
-- In each of the three budgets submitted by President
Kennedy, proposed expenditures -- other than those required
for space, defense and interest on the public debt -- increased less than they did in the last three budgets of
the preceding administration.
-- President Kennedy himself only last month re-affirmed
his determination that tax reduction will be accompanied
by the exercise of an even tighter rein on Federal expenditures limiting outlays to only those expenditures which
meet strict criteria of national need.
-- The President has repeatedly pledged that as the tax
cut becomes fully effective and the economy climbs toward
full employment a substantial part of the increased tax
revenues will be applied toward a reduction in the transitional
deficits which accompany the initial cut in tax rates.
-- Finally, the President has said that any increase in
the Federal debt resulting from these transitional budget
deficits will be kept proportionately lower than the
increase in our Gross National Product and thus the real
burden of the Federal debt will be steadily reduced.
The President has given specific assurances regarding both the
fiscal 1964 budget and that of fiscal 1965. He stated in his
~~st 19th letter to Chairman Wilbur Mills of the House Ways
and Means Committee, that even taking into' account the revenue
loss from the tax cut, he expected, as long as no serious inter~ational contingency or unforeseen s lowdown in the domes tic economy
l~tervened, to submit to the Congress in January a budget for
E1Seal 1965 involving an estimated deficit of less than the deficit
of $9.2 billion forecast for 1964.
In other words, the deficit
estimate for fiscal 1965 would be smaller than that of fiscal
1964 despite the fact that in fiscal 1965 the tax program would
involve a reduction in revenue $5 billion greater than the reduction in 1964.
- 11 -
There has been a great deal of discussion about suggestions
that the tax cut be made contingent on some other factor, such as
the debt level, or expenditure estimates. As the flaws in each
of these suggestions have been made apparent, substitutes have
been produced. Basically the reasons such measures have failed to
rally broad support were summarized only last week by President
Kennedy.
They are simply these:
That the tax cut is needed on its own merits, and should
not be made conditional on other events.
That revenue, deficit, and debt estimates made before
Congress votes on appropriations are necessarily uncertain.
-- That if any slowdown in economic activity should occur,
revenues would drop, and conditions placed upon tax reduction
could deprive the economy of a strong stimulus at the very time
it was critically needed.
Finally and perhaps most important, that tying conditions
to tax reduction makes it less certain and damages the business
and investor confidence so important to improving our economic
performance.
Actually, of course, a period of rising economic activity
offers a much better climate in which to pra.ctice expenditure
control than a period of chronic slack or recession, when heavy
spending is likely.
The relation between spending and tax reduction was put very well in a recent statement by Chairman Mills
himself.
In it he stressed the importance of the Administration's
choice of tax reduction, instead of increased Federal spending,
as a means of enlarging the responsibility of the private sector
of the economy for economic well-being.
He quite rightly stressed the point that tax reduction is
far superior to increased Federal expenditures as a means of
stimulating the economy because it bolsters the initiative of private
In
individuals and business firms in making economic decisions.
other words, it enlarges the role of the private sector in the
American economy rather than enlarging the role of Government.
President Kennedy himself has made it clear that this is
exactly what the tax program involves.
He praised the Mills
statement only two days ago, and added that he himself subscribed
to it. This is one more instance where the President has voluntarily
put himself on record as opposing excessive spending by the Federal
Governmen t .
- 12 So the choice -- tax reduction rather thID increased spending __
is one that the Administration has made by proposing tax reduction.
Now the Congress must decide for the nation -- whether to move
fornard, through the tax program, to a more productive tomorrow or
whether, by closing the tax road, to invite an increased rate of,
government spending with the likelihood of additional budgetary
deficits as the alternative route toward an economic expansion to
make jobs, goods, and services for all our people.
The Administration's economic program, with tax reduction as
its centerpiece, is designed to release and encourage the inherent
expansionary forces in our great free market economy.
It is
designed to eliminate an unduly heavy tax drag on purchasing power
md demand -- to provide new incentives for more investment and
mcreased effort -- to encourage the utilization of new technology
and facilities.
The adoption of this policy would be a giant step
t~ard a tax structure better adapted to the economic challenges
of the Sixties -- more job generation, full utilization of resources,
higher rate of growth, balanced internal budgets and a balance in
oor international payments -- a tax structure which will interfere
substantially less than the present one with the operation of the
free market mechanism while supplying the revenues necessary to our
national security and national public needs.
TREASURY DEPARTMENT
WASHINGTON. D.C.
September 20, 1963
FOR IKMEDIATE RELEASE:
FRANK E. MORRIS RESIGNS FROM TREASURY
TO RE-ENTER PRIVATE BUSINESS
Treasury Secretary Douglas Dillon today announced the resignation
Frank E. Morris, Assistant to the Secretary for Debt Management,
effective September 25, 1963.
Mr. Morris leaves to become Vice President and Eco~omist of Loomi
Sayles & Co~pany, investment counsel, of Boston, Massachusetts.
Secretary Dillon accepted Mro Morris's resignation "with great
regret." The Secretary said: "The Treasury's succes s in debt management during the past two years has to a considerable degree been due
to your imaginative approach to our problems in this area, and to your
cO'Ilprehensive knowledge of the securities markets."
He credited Mro Morris with playing a major role in initiating tt
auction of long bonds and in the re-cycling of Treasury bills, two of
the innovations in debt financing developed during Mr. Morris's tenurE
of office.
Mr. Morris was appointed to the Treasury on September 25, 1961.
For some years prior to joining the Treasury, he was director of rese~
for the Investment Bankers Association, with offices in Washington, D
He had previously served as an economist in various capacities with tl
Federal Government.
Mr. Morris taught economics at the University of Michigan from
September 1949 to June 1951, and served in the European Theatre with
U. S. Army Air Force during World War II. He is the author of severa
articles on finance, and is a ~ember of the American Economic, Finane
and Statistical Associations.
Mr. Morris is a native of Detroit, Michigan, and received a B.A.
degree fro~ Wayne University. He received his MoAo and Ph.D. degrees
from the University of Michigan. Mr. Morris married the former Geral
Coltharp of Detroit in 1944. They have two daughters, Susan 9, and L
They
- Hill make their new home on Yorkshire Road in Dover , Massachuset
000
D-9S1
-
TREASURY DEPARTMENT
RI~DIATE
...
RELEASE:
FRANK E. MORRIS RESIGNS FROM TREASURY
TO RE-ENTER PRIVATE BUSINESS
Treasury Secretary Douglas Dillon today announced the resignation of
~kE. Morris, Assistant to the Secretary for Debt Management,
fective September 25, 1963.
Mr. Morris leaves to become Vice President and Economist of Loomis,
yles & Company, investment counsel, of Boston, Massachusetts ..
Secretary Dillon accepted Mr. Morris 8 s resignation "with great
gret." The Secretary said:
"The Treasury's success in debt managent during the past two years has to a considerable degree been due
your imaginative approach to our problems in this area, and to your
mprehensive knowledge of the securities markets 0"
He credited Mr. Morris with playing a major role in initiating the
ction of long bonds and in the re-cycling of Treasury bills, two of
e innovations in debt financing developed during Mr. Morris' s tenure
office.
Mr. Morris was appointed to the Treasury on September 25, 1961.
r some years prior to joining the Treasury, he was director of research
r the Investment Bankers Association, with offices in Washington, D. C.
had previously served as an economist in various capacities with the
deral Government.
Mr. Morris taught economics at the University of Michigan from
ptember 1949 to June 1951, and served in the European Theatre with the
S. Army Air Force during World War II. He is the author of several
tic1es on finance, and is a member of the American Economic, Finance,
d Statistical Associations.
Mr. Morris is a native of Detroit, Michigan, and received a B.A.
gree from Wayne University. He received his M.A .. and Ph. D. degrees
P1ll the University of Michigan. Mr. Morris married the former Geraldine
Itharp of Detroit in 1944. They have two daughters, Susan 9, and Lisa, 2
ey will make their new home on Yorkshire Road in Dover, Massachusetts.
000
981
- 2 -
non-inc\_'P.1e tax State, but the problem is particularly important in _tlH-~/
,,
area because of the large number of employees whD commute daily across
State lines.
FollolJing meetings with tax officials of Maryland) Virginia, and
the District of Columbia early this year, the Treasury requested the
Civil Service Commission to obtain a ruling from the Comptroller General
as to the legal authority to make payroll deductions for State income
taxes from salaries of Federal employees on the basis of residence in
situations where there is no withholding at the place of employment.
Such a ruling was obtained and the Civil Service Commission has amended
its regulations to authorize Federal agencies to institute a voluntary
payroll deduction plan under which a Federal employee who lives in one
State and works in another may make allotments for payment of State
income taxes to his State of residence.
The Treasury Departmentls regula-
tions set forth the procedures to be followed in handling the deductions.
The regulations are effective as of the date of issuance, September 19,
and Federal agencies may institute their plans after that date.
The new program makes available to employees not now subject to
1-Ti thholding
of State income taxes the convenience of paying their State
income taxes by the payroll deduction method.
Although the program is
W)t mandatory, the interest expressed in the plan by such employees
indicates that a large proportion of them deSire to participate.
The new program viII be helpful not only to employees in meeting their
resp''Jnsi bi:Li ties and simplifying their tax compliance problem but 'vlill be
of 5reat aSSistance to the States in the administration of their tax laws.
Draft News Release for Friday A.M. papers, September 20, 1963
(Under agreement with the Civil Service Commission
which will also have a press release on this date,
no prior release may be made.)
((',"~i,t..a
f
t
The Treasury Department announced today that it is issuing regulaJ(':
,~l!
.
/' /", •. '.
!'f
j
tions to the heads ~of executive agencies with respect to the new program
~
of payroll deductions for certain State income taxes.
This program sup-
plements the present withholding of State (and District of Columbia)
income taxes on salaries of Federal employees.
It is being instituted
under the revised pay regulations of the Civil Service Commission which
authorize Federal agencies to withhold the income tax of the State of
residence of an employee who works in a different State and is not
subject to withholding in the State of employment.
'/
j
Heretofore, under withholding agreements between the Treasury and
27 of the 33 States (and the District of Columbia) imposing income taxes,
Federal agencies followed the general practice of private employers and
withheld State income taxes on salaries of Federal employees at the place
of employment only.
However, many employees live in one jurisdiction and
work in another, and under reciprocity agreements some States do not
require withholding on nonresidents.
Buchagreements are in effect
between Maryland, Virginia, and the District of Columbia.
As a result,
thousands of Federal employees in this area have had no State income tax
withheld.
Similar situations exist in other States where reciprocity
agreements are in effect or a resident of an income tax State works in a
TREASURY DEPARTMENT
FOR RELEASE A.M. NEWSPAPERS
FRIDAY, SEPTEMBER 20, 1963
New Regulations Detail Withholding
of State Income Taxes on Federal Salaries
The Treasury Department announced today that it is issuing
regulations effective today, September 19, to the heads of executive
agencies with respect to the new program of payroll deductions for
certain State income taxes. This program supplements the present
withholding of State (and District of Columbia) income taxes on
salaries of Federal employees.
It is being instituted under the
revised pay regulations of the Civil Service Commission which
authorize Federal agencies to withhold the income tax of the State
of residence of an employee who works in a different State and is
not subject to withholding in the State of employment.
Under previous withholding agreements between the Treasury and
27 of the 33 States (and the District of Columbia) imposing income
taxes, Federal agencies followed the general practice of private
employers and withheld State income taxes on salaries of Federal
employees at the place of employment only. However, many employees
live in one jurisdiction and work in another, and under reciprocity
agreements some States do not require withholding on nonresidents.
Such reciprocity agreements are in effect between Maryland, Virginia,
and the Dis tric t of Columbia.
As a resu 1 t, thousands of Federal
employees in this area have had no State income tax withheld. Similar
situations exist in other States where reciprocity agreemencs are
in effect and, also, where a resident of an income tax State works
in a non-income tax State. The problem is particularly important in
ilie Washington metropolitan area because a large number of employees
Commute daily across State lines.
Following meetings with tax officials of Maryland, Virginia,
~d the District of Columbia early this year, the Treasury requested
ilie Civil Service Commission to obtain a ruling from the Comptroller
~nera1 as to the legal authority to make payroll deductions for
State income taxes from sa laries of Federal employees on the bas is
of residence in situations where there is no withholding at the place
of employment.
Such a ruling was obtained and the Civil Service
Commission has amended its regulations to authorize Federal agencies
to institut~ a voluntary payroll deduction plan under which a
~dera1 employee who lives in one State and works iti another may
D-982
(MORE)
-2 make allotments for payment of State income taxes to his State of
residence.
The Treasury Department's regulations set forth the
procedures to be followed in handling the deductions. The regulat
are effective as of the date of issuance, September 19, and Federc
agencies may institute their plans after that date.
The new program makes available to employees not now subject
to withholding of State income taxes the convenience of paying thE
State income taxes by the payroll deduction method.
Although the
program is no~ mandatory, the interest expressed in the plan by
such employees indicates that a large proportion of them desire tc
participate.
The new program will be helpful not only to employees in meet
their responsibilities and simplifying their tax compliance problE
but will be of great assistance to the States in the administrati<
of their tax laws.
000
- 8 counterfeits had been p~inted at Atlanta. The printer and
the photo;rapher were arrested in Atlanta, and the principal
in the case, J. B. Pritchard, was arrested in Griffin.
Pritchard's woman companion was arrested by our agents for
passin~ the counterfeit notes in Brunswick, Georgia.
Pritchard
was an accomplished counterfeiter and this case could not have
been brought to a successful conclusion without the efficient
coope~ation and assistance of the Sheriff and the Police at
Griffin.
--- - -- -From the foregoing it can be readily observed why we in the
Secret Service respect your professional abilities and enjoy
workin~ with you.
Despite the concern of increased counterfeiting and related
criminal activity we feel that the results achieved by the
Secret Service demonstrate a certain amount of proficiency -but of even greater importance to us, it has underlined the
growth and development of cooperation between all levels of
law enforcement over the past several years.
Our achievements
in both investigative and protective phases have been possible
because of the strong ties between the Secret Service and law
enforcement agencies at all levels.
I cannot too strongly
emphasize the credit that is due to state and municipal police
organizations and all other law enforcement agencies for their
able assistance.
In closing I would like to repeat, it is our responsibility,
yours and mine, to assure that we make the maximum contribution
each day in the work \Ve have chosen.
In so doing we can take
pride in the gains which law enforcement is making over crime
ever~~here and in all areas.
It is with justifiable pride that
we feel that we are playing a part in that progress which is
vital to the development of a sound, modern society.
We are indebted to the Peace Officers of Georgia for their
aole and efficient cooperation and assistance to the Secret
3eryice.
I ~vant to assure you of our continued cooperation and
assistance at all times in the interest of better law enforcement, and in the srowth of professionalism in law enforcement
to which all of us are dedicated.
- 7 pass them.
They passed about 40 between New York City and
Hoocibine and probably would have passed the remainder had
it not been for the prompt action by Sheriff Smith and Chief
Cou~sey.
The effective police work of these officers who
later testified in Federal Court was primarily responsible
for the ten year sentences imposed on all three defendants.
-=====
On April 16, 1962, a ne~v counterfeit $20 note appeared in
Nashville, Tennessee.
During the next few weeks these
counterfeits were passed in all of the Southeastern States
and as far Hest as Texas.
The leads obtained by our investigation were sketchy to say the least at this point.
On
November 30, 1962, one of the notes was passed at a paint
store in S~vannah.
The merchant being suspicious of the note
had it examined by a banker who determined it to be a counterfeit.
The merchant then alerted the Savannah police and furnished them ''lith the license ntnnber of the car used by the
passer.
A police officer spotted the automobile a short time
later and detained the driver.
The detective who was called
obtained a warrant, searched the car and found $67,400 in
counterfeit $20 bills in the trunk of the car.
The investigation that followed disclosed that William Roy Davis and
Ronald Rowland had made the counterfeits in Atlanta in April
1962. Davis, the driver, was a travelling salesman, and had
passed the counterfeit notes throughout the 15 states that
were in his sales territory.
=
=
=
=
On December 18, 1962, a new counterfeit $20 bill appeared at
Brunswick, Georgia.
Several of these notes had been passed
there by a woman noted as havin~ bleached blonde hair.
A day
or 8.\10 later two of the notes appeared in Griffin, Georgia,
and on June 11 two boys from Griffin were arrested at Tuskegee,
Alabama, with about $2,500 in counterfeits in their car.
Foll~
in~ a subsequent lengthy investigation, in which our agents werE
ably assisted by the Sheriff and Police officers from Griffin,
a complete printing plant was seized 1vhere $40, 000 in the
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27, 1962, Captain Clyde Adair, Detective DivisiO'n,
Poli~e ;jepar~m~ll;:, Columbus, GcoL·:;ia, callec~ our Atlanta Office
sLatin~ ~:e hac~ t\,]O counterfeit $10 bills 'vhieh had been passed
there. Our a3eEi..S joined Captain Adair all (1 "lith his force
conduct2u an investigation '<lhich resulted in the arrest on
I"JaL"ch 2 of J. B. GL"esham, Leo Hict(s, Jim Lett and Robert E.
A12xanoel- and thl:: sei~ure of a complete counterfeiting plant.
So t~oroughly was the case developed that all of the defendants
entered guilty pleas.
Gn
======
Another instance occurred on Sunday mornin~ October 29, 1961,
when three men in a Fontiac with Michigan license plates passed
a counterfeit $10 bill at a fruit stand near Woodbine, Georgia.
The f1.1erchant, bc-::comii.1t; sL.spicious, ,,,rote orn'7n the license nlITIlber
2'-l"iC called ~:·~eri..ff T;:. G. SE1ith at \·:O'odbinc.
He and Deputy
P2eples pick2d up t~e note, called two bankers out of church
services who verified t~e bill as bein3 counterfeit. Sheriff
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spotted the car as he was receiving the message. He arrested
the three men a~d found in their possession $6,600 in these
c a L1ll t e:' f 2 its .
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-
FULtlle::..- investi3a::ion ciisclosed that these men, Alphonse T.
0UOZZO, John:apanzaro, arlG Natilarl Sutton had obtained the
i.10~es ii.'l Brookl:y;n ~\:her2 they lived and made the trip South to
- 5 There is ample ev~aence of the increasing incidence of crime
within the investigative ju~isdiction of the Secret Service.
For example, we have seen a growing trend over the past
several years in the counterfeitin; of the obligations and
s~curities of the United ~tates.
We feel that there are three
major factors responsible for this increased counterfeiting.
First, the development of the graphic arts and the availability
of improved printin; equipment has enabled persons with limited
technical knowledge to turn out reasonably deceptive notes.
Second, the distribution outlets available to criminal organizations have increased. And third, there is no question but
that the constant pressure on gamblin; and other illegal activities has driven organized groups of criminals from these
fields into other illegal enterprises, such as counterfeiting.
In the last fiscal year ending June 30, 1963, a total of
$3.4 million in counterfeit money was received by the Secret
Service.
Of this amount over $2.8 million in bogus currency
was seized by our agents from counterfeiters before it could
be passed to the public.
During that period 662 persons were
arrested for counterfeitin~ offenses and 47 counterfeiting
plants were seized.
In the previous fiscal year the largest
amount of counterfeit money ever produced in the history of
die S,2rvice occur:cect.
In that year our agents seized over
$3.5 million in counterfeit currency befo~e any of it could
be passed on the public; 737 persons were arrested for counterfeiting offenses and 44 counterfeitin3 plants were seized.
Fl-om a comparison of the two yeal':S it would appear that counterfeitii.1g had. declined; yet in the period from July 1 through
September 8, 1963, t"J21ve counterfeiting plants were seized by
our ag8n-;:s "7~_tll. the assistance or other la,\-;r enforcement agencies
and approximately $L;.2 million in counterfeit money seized from
counterfeiters before this ille~al money could be passed.
Y,2t
t~le
direct loss to -::lie public was confined to approximately
"'OC'
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fOl.::=:,ery of Government
c~1ecks
and bonds also continued to
keep pace \vitil the l;eneral crime picture.
Durin; the past fisca
)7ear encL~n~ June 30, 1963, t~1e Secret ;;ervice investi:;ated over
- 4 which it is called upon to meet in a modern society.
In too
many instances our citizens have become indifferent to the
general crime picture as not seeming applicable to them, and
all too frequently they have shown complete disLespect for
our Im.;rs.
It is fundamental in a modern society that a law enforcement
officer properly performin3 his assigned duty to protect life
and property should be given full support by the public. Departures from t~lat cooperation should be viewed with concern as
the forces of organized crime and subversion are quick to
exploit lawlessness when encouraged by a listless or indifferent
public.
An important essential in the make-up of any professional law
enforcement officer is his patience.
The very nature of the
work and the complexity of situations require it.
Because we
have this in abundance, I am confident that law and order will
triumph, although. at times the road becomes quite rough.
Crime today continues to increase at a current rate of more than
four times the population growth.
The Secret Service as one
of the oldest law enforcement agencies in the United States has
witnessed the growth and development of crUme for almost a
century.
It has also witnessed the unceasing efforts of often
undermanned law enforcement agencies at all levels to meet this
challenge.
The Secret Service, as many of you know, was established on
July 5, 1865, as an arm of the Treasury Department for the express purpose of haltins the widespread counterfeiting of this
Nation's currency_ At that time one-third of our currency was
counterfeit. Meeting this challenge with an all-out effort the
Secret Service was able within a short time to eliminate this
potential threat and re-establish the stability of our currency.
Counterfeiting continues to be active, as I will recount a bit
later.
Since that time our agents were assigned various other
investigative responsibilities -- not only for the Treasury
Department but for many other agencies of the Federal Government as well.
- 3 sel£-u2fense, first aid, life savin3 and effective use of
fireal.LUs.
In addition, th.ey receive instructions in atomic,
'uiolo~ical and chemical ,varfare.
TraininE; programs are not
unique Hith the Secret Service, as all law enforcement has
made vast strides in this area. This trend clearly demonstrates the COQcern for and the development of professional
competence.
A striking example is the effective manner in which the Atlanta
Police Department has developed a well rounded traininJ program
and has attained a formidable reputation as a progressive minded
police department.
The credit for its progress is owed in no
small part to the excellent direction of that department by our
good friend and able associate, Chief Herbert T. Jenkins. The
high esteem with which Chief Jenkins is held by his police
associates throughout the Nation is evidenced by his position
as Second Vice President of the International Association of
Chiefs of Police, the leadership of which has done much to
further the cause of professionalized law enforcement.
We in law enforcement recognize the importance of presenting a
proper image to the public and the necessity for obtaining the
respect, trust and confidence of our people. This recognition
we know must be earned but I believe we are gradually gaining
it through all our efforts to became more professional in our
work. Huch, however, remains to be done to achieve our objectiv
During the early stages of police development the officer did
\vhat he thought was best -- in same instances he became quite
rigid and inflexible in the execution of his duties.
Because
of this the image of a law enforcement officer was placed in a
bad perspective. The parochial view of early law enforcement
was no different than that of other professions in their beginnin~, suct as law, medicine and engineering.
Yet we have
observed the esteem with which these professions are held today
throughout all countries of the world.
Lest my words be misunderstood or any misconceptions drawn --I do not want to convey the impression that the law enforcement
officer is alone responsible. To the contrary, as I mentioned
earlier, law enforcement is faced with many complex problems
,)
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-
I not to say that much of
t;),~ ,~;:cC'll211~ coopC:l"ation 2vL.:~enced on all Fl-esiucntial
vi_s';_L:::> ;:0 f01J,
ci D2 st2.te 2n6 in connection \oJith our criminal
i_I1\ .::.:s!.:i..=,c.L:ions \,7a3 !Jl:OLbl1::: abou;: by the close 'h10l kin;; rela::jollships 2stabli.3hec~ ,d'_til all of yOUL' ciepartments by A. B.
Ilentz, ou~ uos~ able 3p2cial Agent in Charge at Atlanta.
ILl.lly, Ba~lnej \:en~z is nile... Sec:;:et SerJice" to mai.1Y Geor~ians.
,),=:
ot1d ".lnj IJst
,:,781:"12
~,;~l.i1e
it is easy fo!." me to praise your unselfish and competent
cooperatiol1 in ",lorking closely Hith the Secret Service --- as
you have demonstratec: in the past, and continue to provide on
all occasion.:; --- I shoLlld like to confine myself to the
greate~ picture:
that is, the need for increased professionalism in law enforcement at all levels.
The law enforcement officer today faces many complex problems
none of [lis OWi,1 choosin;. Hore and more it has become vital
to estnblish sound recruitment policies and to submit our
personnel to intensive trainin6 in oreer that we mi.sht properly
Culfill our mission in la\v enforcement.
As an example, my
att:ention was directeci to the report of a recent article condensed from the Atlanta Constitution which stated that your
Govcl_-nor, Carl C. Sanders, has proposed the establishment of a
Georgia Police Academy to maintain and upgrade the high quality
of local la\v enforcement.
This is a step in the right direction
and he and others who share this interest should be commended for
vision and foresight in the recognition of this need.
I hope
in the interest of professional law enforcement that this trainin~ facility will be established.
Historically, all things must have a beginning.
In the early
stages of la'\V enforcement there were no programs established to
recruit and train QUI personnel.
In most instances a recruit
was issued a badge and 6un and thus armed, asserted his authorit
to enforce the law.
Secret Service training, too, has grawn
from the on-the-job, ao-it-yourself method to an extensive train
in,; and development program coverin3 a wide range of specialized
subjects.
For instance, our Special A3ent training now includes
comprehensive courses in protection techniques, criminal law,
.:rim:'nal investigative p:;:ocedures, use of scientific investigative de~Jices, docement and hand\.oJritin.s examination and analysis,
:Kemarks uy James J. Rrnvley
Cllier) Uniteci States Secret Service
Before
T~e Peace Officers Association of Geor3ia
At the Columbus City Auditorium
Columbus, Georgia
On Wednesday, September 25, 1963
At 11 a.m. EST
It is a pleasure to be a guest of the Peace Officers Association of Georgia and to have this opportunity to meet and talk
to your members many of whom are known to me.
It is associations like your \'lhich are providinG the stimulus for law enforcement officers to develop and improve their professionalism.
In my quarter of a century with the United States Secret Service
I have enjoyed a very close working relationship with the Peace
Officers of Georgia.
I have many warm recollections of working
with your officers at \\farm Sprin3s where former President
Roosevelt spent many pleasant peaceful days and again later at
Augusta where former President Eisenhower enjoyed your hospitalit
during his annual visits to this fine state.
Indeed, it is
always a pleasure to accompany our Presidents during visits to
your state because your officers are efficient and most willing
to assist the Secret Service in providing the necessary protection for our Chief 2xecutives.
The Secret Service has been protecting Presidents of the United
States since 1901 and we OV-le a great deal to the cooperation we
have i.1ad over the years from the police and other law enforcemen
or~anizat~ons here in th2 United States as well as overseas.
This ctsSistaL1ce bas been tremendoL,s and without it our protectiv
mission would be most difficult.
Before the Secret Service was charged with the responsibility of
Presidential p~otection, three Presidents --- Lincoln, Garfield
and HcKi~ley --- ha~ ~een assassinated within a period of 37
yea::s.
Ti.1is \,:as an ala::cmin'~ recore.
The public clamor at the
LimE of PYc:s:Loent ='lcKinley'.:3 death made it apparent that more
secure steps must be taken to insure the lives of our Chief
Executives.
ConoYeSS respoTLded by authorizing the Secret 5ervic
~0 Fer:o:cm L~li3 prott::ctive function, and today our Special Agent
_.l2~,~Lai:L C\):-~3::clI'1t 2L-~lO~l d8_~_1=/ prot2ct:_0l1 for the Chief Exe-
Remarks by James J. Rowley
Chief, United States Secret Service
Before
The Peace Officers Association of Georgia
At the Columbus City Auditorium
Columbus, Georgia
On Wednesday, September 25, 1963
At 11 a.m. EST
It is a pleasure to be a guest of the Peace Officers Association of Georgia and to have this opportunity to meet and talk
to your members many of whom are known to me.
It is associations like your which are providing the stimulus for law enforcement o~ficers to develop and improve their professionalism.
In my quarter of a century with the United States Secret Service
I have enjoyed a very close working relationship with the Peace
Officers of Georgia.
I have many warm recollections of working
with your officers at Warm Springs where former President
Roosevelt spent many pleasant peaceful 'days and again later at
Augusta where former President Eisenhower enjoyed your hospitalit,
during his annual visits to this fine state.
Indeed. it is
always a pleasure to accompany our Presidents during visits to
your state because your officers are efficient and most willing
to assist the Secret Service in providing the necessary protection for our Chief Executives.
The Secret Service has been protecting Presidents of the United
States since 1901 and we owe a great deal to the cooperation we
have had over the years from the police and other law enforcement
organizations here in the United States as well as overseas.
This assistance has been tremendous and without it our protective
mission would be most difficult.
Before the Secret Service was charged with the responsibility of
Presidential protection, three Presidents --- Lincoln, Garfield
and MCKinley --- had been assassinated within a period of 37
years.
This was an alarming record.
The public clamor at the
time of President McKinley'~ death made it apparent that more
secure steps must be taken to insure the lives of our Chief
Executives.
Congress responded by authorizing the Secret Service
to perform this protective function, and today our Special Agents
maintain constant 24-hour daily protection for the Chief Executive and his family.
-
2 -
I would be remiss and unjust were I not to say that much of
the excellent cooperation evidenced on all Presidential
visits to your fine state and in connection with our criminal
investigations was brought about by the close working relationships established with all of your departments by A. B.
Wentz, our most able Special Agent in Charge at Atlanta.
Truly, Barney Wentz is "Hr. Secret Service" to many Georgians.
While it is easy for me to praise your unselfish and competent
cooperation in working closely with the Secret Service --- as
you have demonstrated in the past, and continue to provide on
all occasions --- I should like to confine myself to the
greater picture:
that is, the need for increased professionalism in law enforcement at all levels.
The law enforcement officer today faces many complex problems
none of his own choosing. More and more it has become vital
to establish sound recruitment policies and to submit our
personnel to intensive training in order that we might properly
fulfill our mission in law enforcement. As an exrunple, my
attention was directed to the report of a recent article condensed from the Atlanta Constitution which stated that your
Governor, Carl C. Sanders, has proposed the establishment of a
Georgia Police Academy to maintain and upgrade the high quality
of local law enforcement. This is a step in the right direction
and he and others who share this interest should be commended for
vision and foresight in the recognition of this need.
I hope
in the interest of professional law enforcement that this training facility will be established.
Historically, all things must have a beginning.
In the early
stages of law enforcement there were no programs established to
recruit and train our personnel.
In most instances a recruit
was issued a badge and gun and thus armed, asserted his authority
to enforce the law.
Secret Service training, too, has grown
from the on-the-job, do-it-yourself method to an extensive training and development program covering a wide range of specialized
subjects.
For instance, our Special Agent training now includes
comprehensive courses in protection techniques, criminal law,
criminal investigative procedures, use of scientific investigative devices, document and handwriting examination and analysis,
- 3 self-defense, first aid, life saving and effective use of
firearms.
In addition, they receive instructions in atomic
biological and chemical warfare. Training programs are not'
unique with the Secret Service, as all law enforcement has
made vast strides in this area . . This trend clearly demonstrates the concern for and the development of professional
competence.
A striking example is the effective manner in which the Atlanta
Police Department has developed a well rounded training program
and has attained a formidable reputation as a progressive minded
police department. The credit for its progress is owed in no
small part to the excellent direction of that department by our
good friend and able associate, Chief Herbert T. Jenkins. The
high esteem with which Chief Jenkins is held by his police
associates throughout the Nation is evidenced by his position
as Second Vice President of the International Association of
Chiefs of Police, the leadership of which has done much to
further the cause of professionalized law enforcement.
We in law enforcement recognize the importance of presenting a
proper image to the public and the necessity for obtaining the
respect, trust and confidence of our people. This recognition
we know must be earned but I believe we are gradually gaining
it through all our efforts to become more professional in our
work. Much, however, remains to be done to achieve our objective
During the early stages of police development the officer did
what he thought was best -- in some instances he became quite
rigid and inflexible in the execution of his duties. Because
of this the image of a law enforcement officer was placed in a
bad perspective.
The parochial view of early law enforcement
was no different than that of other professions in their beginning, such as law, medicine and engineering. Yet we have
observed the esteem with which these professions are held today
throughout all countries of the world.
Lest my words be misunderstood or any misconceptions drawn --I do not want to convey the impression that the law enforcement
officer is alone responsible. To the contrary, as I mentioned
earlier , law enforcement is faced with many complex problems
-
it -
which it is called upon to meet ill a llloueUl t;oc iety.
III too
many instances our citizens have become indifferent tu the
general crime picture as not seeming applicable to them, and
all too frequently they have sbown c(Jl1lplete disrcspL:'ct for
our laws.
It is fundamental in a modern society that a 1m" enforcE:ment
officer properly performing his assigned duty to protect life
and property should be given full support by th~ public.
Departures from that cooperation should be viewed with concern as
the forces of organized crime and subversion are quick to
exploit lawlessness when encouraged by a listless or indifferent
public.
An important essential in the make-up of any professional law
enforcement officer is his patience.
Tht:! very nature of the
work and the complexity of situations require it.
Because we
have this in abundance, I am confident ,that law and order will
triumph, although at times the road becomes quite rough.
Crime today continues to increase at a current rate of more thar
four times the popUlation growth.
The Secret Service as one
of the oldest law enforcement agencies in the United States has
witnessed the growth and development of criIne ~or almost a
century.
It has also witnessed the unceasing efforts of often
undermanned law enforcement agencies at all levels to meet this
challenge.
The Secret Service, as many of you know, was established on
July 5, 1865, as an arm of the Treasury Department for the express purpose of halting the widespread counterfeiting of this
Nation's currency.
At that time one-third of our currency was
counterfeit. Meeting this challenge with an all-out effort the
Secret Service was able within a short time to el~inate this
potential threat and re-establish the stability of our currency_
Counterfeiting continues to be active, as I will recount a bit
later.. Since that time our agents were assigned various other
investigative responsibilities -- not only for the Treasury
Department but for many other agencies of the Federal Government as well.
- 5 -
There is ample evidence of the increasing incidence of crime
within the investigative jurisdiction of the Secret Service.
For example, we have seen a growing trend over the past
several years in the counterfeiting of the obligations and
securities of the United States. We feel that there are three
major factors responsible for this increased counterfeiting.
First, the development of the graphic arts and the availability
of improved printing equipment has enabled persons with limited
technical knowledge to turn out reasonably deceptive notes.
Second, the distribution outlets available to criminal organizations have increased. And third, there is no question but
chat the constant pressure on gambling and other illegal activities has driven organized groups of criminals from these
fields into other illegal enterprises, such as counterfeiting.
In the last fiscal year ending June 30, 1963, a total of
$3.4 million in counterfeit money was received by the Secret
Service. Of this amount over $2.8 million in bogus currency
was seized by our agents from counterfeiters before it could
be passed to the public. During that period 662 persons were
arrested for counterfeiting offenses and 47 counterfeiting
plants were seized. In the previous fiscal year the largest
amount of counterfeit money ever produced in the history of
the Service occurred. In that year our agents seized over
$3.5 million in counterfeit currency before any of it could
be passed on the public; 737 persons were arrested for counterfeiting offenses and 44 counterfeiting plants were seized.
From a comparison of the two yea~-s it would appear that counterfeiting had declined; yet in the period from July 1 through
September 8, 1963, twelve counterfeiting plants were seized by
our agents with the assistance of other law enforcement agencies
and approximately $4.2 million in counterfeit money seized from
counterfeiters before this illegal money could be passed.
Yet the direct loss to the public was confined to approximately
$12,OOO!
The forgery of Goverruuent checks and bonds also continued to
~'eep
pace with the general crime picture. During the past fiscal
year ending June 30, 1963, the Secret Service investigated over
- 6 47,000 forged check cases involving a total amount of nearly
$5 million. Our agents arrested 3,343 persons for the forgery
of Government checks. As you well know the forgery racket has
became big business.
I would like to comment on just a few instances where Georgia
Peace Officers furnished complete assistance and cooperation
to our Atlanta Secret Service personnel -- instances which
ably demonstrate what can be accomplished when professional
law enforcement officers work in harmony and receive the support
of public spirited citizens.
On February 27, 1962, Captain Clyde Adair, Detective Division,
Police Department, Columbus, Georgia, called our Atlanta Office
stating he had two counterfeit $10 bills which had been passed
there. Our agents joined Captain Adair and with his force
conducted an investigation which resulted in the arrest on
March 2 of J. B. Gresham, Leo Hicks, Jim Lett and Robert E.
Alexander and the seizure of a complete counterfeiting plant.
So thoroughly was the case developed that all of the defendants
entered guilty pleas.
=
=
=
=
Another instance occurred on Sunday morning October 29, 1961,
when three men in a Pontiac with Michigan license plates passed
a counterfeit $10 bill at a fruit stand near Woodbine, Georgia.
The merchant, becoming suspicious, wrote down the license number
and called Sheriff W. E. Smith at Woodbine. He and Deputy
Peeples picked up the note, called two bankers out of church
services who verified the bill as being counterfeit. Sheriff
Smith then radioed Chief of Police Coursey at Kingsland who
spotted the car as he was receiving the message. He arrested
the three men and found in their possession $6,600 in these
counterfei ts.
Further investigation disclosed that these men, Alphonse T.
Cuozzo, John Capanzaro, and Nathan Sutton had obta~ned the
notes in Brooklyn where they lived and made the trlp South to
- 7 -
pass them. They passed about 40 between New York City and
woodbine and probably would hav~ passed the remainder had
it not been for the prompt action by Sheriff Smith and Chief
Coursey. The effective police work of these officers who
later testified in Federal Court was primarily responsible
for the ten year sentences imposed on all three defendants.
======
On April 16, 1962, a new counterfeit $20 note appeared in
Nashville, Tennessee. During the next few weeks these
counterfeits were passed in all of the Southeastern States
and as far West as Texas. The leads obtained by our investigation were sketchy to say the least at this point. On
November 30, 1962, one of the notes was passed at a paint
store in Savannah. The merchant being suspicious of the note
had it examined by a banker who determined it to be a counterfeit. The merchant then alerted the Savannah police and furnished them with the license number of the car used by the
passer. A police officer spotted the automobile a short time
later and detained the driver. The detective who was called
obtained a warrant, searched the car and found $67,400 in
counterfeit $20 bills in the trunk of the car. The investigation that followed disclosed that William Roy Davis and
Ronald Rowland had made the counterfeits in Atlanta in April
1962. Davis, the driver, was a travelling salesman, and had
passed the counterfeit notes throughout the 15 states that
were in his sales territory.
= = = =
On December 18, 1962, a new counterfeit $20 bill appeared at
Brunswick, Georgia. Several of these notes had been passed
there by a woman noted as having bleached blonde hair. A day
or two later two of the notes appeared in Griffin, Georgia,
and on June 11 two boys from Griffin were arrested at Tuskegee,
Alabama , with about $2 , 500 in counterfeits in their car. Following a subsequent lengthy investigation, in which our agents were
ably assisted by the Sheriff and Police officers from Griffin,
a complete printing plant was seized where $40,000 in the
- 8 -
counterfeits had been printed at Atlanta. The printer and
the photographer were arrested in Atlanta, and the principal
in the case, J. B. Pritchard, was arrested in Griffin.
Pritchard's woman companion was arrested by our agents for
passing the counterfeit notes in Brunswick, Georgia. Pritchard
was an accomplished counterfeiter and this case could not have
been brought to a successful conclusion without the efficient
cooperation and assistance of the Sheriff and the Police at
Griffin.
======
From the foregoing it can be readily observed why we in the
Secret Service respect your professional abilities and enjoy
working with you.
Despite the concern of increased counterfeiting and related
criminal activity we feel that the results achieved by the
Secret Service demonstrate a certain amount of proficiency -but of even greater importance to us, it has underlined the
growth and development of cooperation between all levels of
law enforcement over the past several years. Our achievements
in both investigative and protective phases have been pOSSible
because of the strong ties between the Secret Service and law
enforcement agencies at all levels. I cannot too strongly
emphasize the credit that is due to state and municipal police
organizations and all other law enforcement agencies for their
able assistance.
In closing I would like to repeat, it is our responsibility,
yours and mine, to assure that we make the maximum contribution
each day in the work we have chosen. In so doing we can take
pride in the gains which law enforcement is making over crime
everywhere and in all areas. It is with justifiable pride that
we feel that we are playing a part in that progress which is
vital to the development of a sound, modern society.
We are indebted to the Peace Officers of Georgia for their
able and efficient cooperation and assistance to the Secret
Service. I want to assure you of our continued cooperation and
assistance at all t~es in the interest of better law enforcement, and in the growth of professionali~ in law enforcement
to which all of us are dedicated.
TMENT
tEASURYI S WEEKLY BILL OFFERING
Ilast evening that the tenders for two series of
~itio~al issue of the bills dated June 27 1963
fiber 26, 1963, which were offered on Sept~mber
cs on September 23. Tenders were invited for
'lay bills and for $800,000,000, or thereabouts of
.
'
se~es
are as f ollows:
,ury bills
1
182-day Treasury bills
Iber 26, 19~3:
maturing March 26, 1964
pprox. Eq~v. :
Approx. Equiv.
rmual Rate
:
Price
Annual Rate
is,
3.363%
3.386%
3.379%
~y
11
:
:
98.234 a/
98.222 98.227
3¥493%
3.517%
3.507%
11
bills bid for at the low price was accepted
lay bills bid for at the low price was accepted
) BY .F'EDERAL RESER.VE DISTRICTS:
~ccepted
:
Applied For
9,934,000
27,802,000 : $
1,019,246,000
890,347,000
7,351,000
13,509,000 :
8,417,000
36,683,000
3,497,000
17,195,000
9,183,000
31,743,000
92,504,000
112,89h,000
28,662,000
25,830,000 %
6,82h,OOO
16,857,000
14,806,000
27,959,000
8,530,000
19,104,000
_
_
6.
.
.
:.4 z..9861000
80,760,000
$1,300,683,000 £/ $1,273,040,000
:~
Accepted
$ 3,934,000
632,826,000
2,351,000
8,427,000
3,497,,000
9,183,000
42,204,000
25,462,000
5,824,000
11 .• 806, 000
4,900,000
49,625,000
$800,029,000
EI
lve tenders accepted at the average price of 99.146
ve tenders accepted at the average price of 98.227
gth and for the same amount invested, the return on
s of 3046%, for the 91-day bills, and 3.63%, for
tes on bills are quoted in terms of bank discount
face amount of the bills payable at maturity rather
Leir lerlo~h in actual number of days related to a
Ids on certificates, notes, and bonds are computed in
invested, and relate the number of days remaining
,0 the actual rnunber of days in the period; with sernilone coupon period is involved.
- 22 I repeat that call to all of you h._ tonlibt -- to jola ill
"wholehearted. active support" of the tax bill -- to ••k. ,...... of
the tax bi 11 this year a matter of your per.ooal act "ital ooacen.
for the
tax
bill personally and vitally coocerna the _lfar8 of ....
buainesaman, of every citlzeD, ad of our entire natiOll.
000
• 21J01ll •• Sa
9.
~.
,..t..
, ....
n,
St .d ....
'&tea"" ••••••l . . . . a.J.
a.N of . . .
Ot.,
DIe • •m.. Ca
Clleb _
I • • to . .
ChatI'
=
. f . . . . . . . ef . . . .,.
lttee _.bere.
"11Iae•• Co
of tU
ill
auaiDe..
r ....l
te • •_ CG
Co
r,te . . .
It.... •.•
'Ir •• '
••••• • • _ . . . . . . .air _ of cite Bs•••clft C.
........ Va,. ...
S• . . . . .
VI_
of the
tcc. ..... _ .... r-. .....c,_ .....
!bat
itt....y
la~ter
recopS ... Cbac _
Me appro..
.~ltur. . . . . "the
of 811
,.,0'Il8t...
......
ill ....
pro.,.cta of • put17 iaIpc•••• ftf
reetoriq lDdlv1dual iIlcati".. . . . Nlacerllaa _ _ _ t.e pou ...... A
it uri_ 411
.,snher. of
the BuI1M., C4J
lac.
to jo.
"'* die
- 20 major economic problems and to the achievement of our major
.c~1c
goals.
We may all have reservations about this or that provia1oo in tb.
tax bill.
We may all wish that it did more in some areas than it do
or less in others.
But we must weigh these doubts, theae reaervatlo
these wishes, against the strong and invigorating impact that the ta
bill as a whole will have upon our nat6on. upon every sector of our
economy, and upon every single taxpayer.
We must weight our h.aital
against the fact that, if we do not aGt now -- this year -- we coulcl
lose forever the opportunity to lighten the oppres8ive burden of ~
tax rates. to reemphasize the importance of individual initiative _
incentives, and to restore to our private enterprise system a more
more vital role in the expansion of our economy.
As you know, more than 2,400 of our country' 8 most dietiDgui.b
businessmen -- including, I am sure,
80me
of you here tonl&ht -- hi
-18-
of the House Committee on Appropriations, predicted in a recent ..J
speech that this year's appropriations will be held well below la.t
year' statal -- the first time that will have been done since the •
of the Korean War.
And they are unwise because they purport to
trol expenditures by placing the entire responsibility on a
est~te
COl
ODe-t~
of expenditures to be submitted by the President next J . .
Neither later supplemental requests nor increases voted by the
Congress would have any effect.
the American people.
This could only serve to misl....
The responsibility for expenditure control t
shared jointly by the President and the Congress.
The Congre ••
not the President has the power to appropriate moneys.
And in tbt
past few years Congress has often appropriated more than the Pre.
has suggested.
The only way to control expenditures is for the
Congress and the President to join in a continuLng effort.
That
just what is provided for in Section 1 of the bill as reported
tne Conrrnittee on Ways and Means.
~
- 17 J
-;\JUld ~ay a. ~reat deal more on thla aubject.
have &aid
enoU~l t.~ mak£'
.~t
clear that J by
But I hope I
any appropriate ,arat'
the temporary scraL"1 ::hettL": cut places upon our budget 1. _11
deed.
r~l
It is en?
SidiL 1.
price chat we must pay 1f we are to have
h'Jpe or moving out of s. period of substantial buqet clefi,
toward the time when we ea" reasonably expect to balance the I
.Jesp.l.te t:he :iU.~ facts
t
however, we
haVE.
aeen paraded befoJ
several iJrupoaals -- and ("'1le or thaae is now being made
,)L
OQ
the HOUSe: -- to tie the tax cut to some arbitrary limit
national ueLt or our national expenditures.
L~
aooner doe
,)()sal appear but its weaknesses become rather noticeably
!motile!" emerges to take its lJlace.
'.:wo
Bu~
no matter bow _
ratal ·jcie;;cs ill coamon -- che1 are both uunecuNr
sr€ '.mneceasary becauae the expenditure con'
t
-15-
civilian employment in the Federal Government grew by only 5,600
persons.
If employment had grown in line with total population tbl
crease would have been 42,000, not 5,600.
And during the same par
State and local government employment grew by about 300,000 -- or
more than 50 times as fast as Federal employment.
Fourth, and last, the fiscal 1963 deficit dropped from an eat
$8.8 billion to an actual $6.2 billion, largely as a result of du
econ~nic
upturn and a tight rein upon expenditures.
Including th4
-
effect of the tax cut, we now expect the 1964 deficit to be 1e.s
the $9.2 billion forecast last January without allowing for the t
-- and far less than the $11.9 billion originally forecast after
allowing for the tax cut.
In his letter to Chairman Nills, President Kennedy has gone
further.
In an unprecedented move, he has vOluntarily put htmse:
- 14 t:u: economy ..Ji 11 e~'~llnd and revenues increase
8S
a resu lt of the
tax cut, but becau5t: d.l::; .-.Juini8cration has all:eady put into effect,
thorough and ei [ecti'vc p!'"o~r&'1'\
Gi:
expenditure control.
While our
:''J\.!dget bas, ()f cou:r:-se t increased over the past three years. fully
72
!~t,<':,
_. ,"_
~,erccnt 'JI:
"'_t"o
.. ~
""
~o
O-fC
..'
the tctDl i.ncreas€ from 1961 through 1964 baa been in
_tir;."-r..n<:1"'"
.. .:....., ~"""', ,
space ana inescapable interest an the public d
,1100 YOu include the 1~6'" Budget as submitted by the President, thea
a~)8.rt
from def.ense and space -- the total increaae in all expendttlll
during the fil"st t.hrr:e y..:::ara ot his hchninistration will be $339 mill
les8 than che simi lal." increase during the preceding three years fro.
195;:: tv 190 i .
!.".:ne u~ the: ~pst way::; t.o me&.iH'::::~ economy in
the
6t=;"J\>Jt.:tl
in
,-illt'
nztiIJ.""Uil popuution.
.~t"oru
government t.
to
Surprising as it may be to
June 30, 1962, to June 30, 1963 -
- 13 f'
!-;,-ciae vi an even tighter rein on federal expeDditllras" -- that . .
f ...
the economy expancis in response to the tax cut,
tbe incre&aec1
tax
II.
."bat_tiel
revenues will be applied.!· toward redue1a& the
,..t
cr.
tional deficits -- and chat l:any increase in the Feeler.l clebt r~
from these transitional budget deficits will be kept proportlaaatel
lower than the increase in our Gro•• Natloa.al PTocluct t ancl tbIJa tbe
real burden ot the Federal debt will be steadily reduced. tt
In his, second lecter. as in his natlonw1de addre•• t tbe Pr. . U
again made it unmistakably clear that, by adoptin& the tax bill. d
nation will bt;"' choosing Htax reduction iDbceacl of deliberate clef18
-
these coursca UlUtually exc lusive and will DOt follow bocb at the •
tilDe -- that, in sh.')rt, the tax bill offers ua • choice betweeD P
pri~Tate
spending .or greac.er goveocra481lt 8peDdiq . . the pr~ face.
in our economic gr0 iNth.
-12government revenues to bring us
No .spect of the ducus8ion on the tax bill tbua fa: baa pI'OduutI II
muah mi8understanding -- eVeD d1atortl00 -- •• thi8 relation 'N_J.
the tax bill and the budget.
Let
Jlt:',
very briefly J try to make •
few points clear.
Fust, the
tax
bill 18 by far our beat ...u
deficit pattern of recent years.
of re.eraia& abe
Even at lower tax rate., • more
rapidly expanding economy will very quickly produce the areatec
iovel'l1lD8llt revenue. that can provide for our natioaal Dee. vitbtMtI
riskin, large deficits.
Second, the Pres ident has repeatedly linked the tax cut to •
program of strict expenditure conteol.
Moat rac8lltl, he baa . _
that quite clear in two important latters to ChalX"1M1l Wllb\lZ' HiUl
the House Way. and Means Committee -address last Wedne8day.
.8
_11 . . ill h1a
Dat~
In his first letter to Chairman Mil18 til
President pledged that "tax reduotl•
..at ••• be &oeompau1ecl ..,.
tt
- 11 econGaIJ thia year.
For the flr.t ala . .tba .1 thls , . . , dial -.J
have _ _ t (at _181 rat. .) . . . .h .. $21 lttl1t.. lION i1I . . .1
pereOD.&l
COll8\alptl00
expeocIltur.. eta. .. actuall,. .... -- . . .... •
$4 billion IBOre in durable goode Raeh . . -.t:..-i.1_, hi.tan . .
other., . . aucb .. $7.5 bl1110D GlOre ill non-durable poU _II . .
clothiaa.
ahoe.,
t_aeco and other., •• _eb a • •10 ..ill. . . . . . . II
lbat 1s the ld.Dd of tapact the tax
~.,
cue coul. baY_up . . . . . . . . "
that 1apact would .tart
althou&h, of cour.e, we do
DOC
.moat
t- .dtaeel.,
_.e ,...
expect it to approeeh tile 1. . .1 1 •
described _ t i l . year or two afcer that.
Thia greatly ex.pmded 8CODOIDt.e 8Ctlvl~ will T t . aot
productivity 8I1d higher operaeilaa n t. . 111 t.fuat;ry t
..
.-1,.
alM ....
- 11 Whil.
DO ODe
caa foree ••t precl. .1y ....c dle eftS'all t.. •• ..
the $11 bll11ao c.x cut would be. the Jo181:
aecaam.c
Ccmp'''. has .atillatecl that • $10 bl11u. tax
.pmt ad reapeot throu&hcNt the
_cay,
_c
C
lat........
_W, . . 1&
til ....... .ur
sa
cocal •••
Hat1oDa1 product by $30 to $40 b1111CJ11 a _ _ l1,. ..,.. .... 1& waW
11111101& ..., Job..
_
lbat 1. t of COUS'M. lMrel,. _
. . . . .ted . . -- but it - . . iatieace
But take, for ex_pl•• the
\iIW~ltt. . . . et..t.
-
cue
. .et-•• -- alDeuat
boda ...... _I . . . .
to.-. .... of the Jota& .. __ta
the 'SO bUlt.. -
..
a.. .
1& .,.li. . . . .
- 9 would drop fro. 52 to SO perceDt ta 1966, . . fna SO te 41 •••••
in 1965.
Two-thiru of the iDdlvlchaal r . . .tloe . . . 1101"8 • • • • •. .1f ••
iDto effect _ly a few abort moatha fro. . . . .- " . , '-il11_ f .
iladivWuala . . . $1.4 bl1110D for cot"pOract....
A~C
i
••1Mel,.
tta.refore, • larIe ebare of the tax cue wulAl ....ta co ••• luelf
felt within tbe ecoDCD1.
tbat tmpao& wou1cl pow . . ___ Ira ...
reductlOD iDto the ecoDCD1.
!be iaa'ea'" •• _~e activity tMt
would reeult would in tum g-.rate latahl? . . . . . . . . ,.ef1M, . . .
tIMa _ _ ' "
add even further impetus to the _tire prooe•••
-8in the economic well-belna of eaah _
of . . -- ill
~
,.ie
..PC"
for jobs, job security and advancement. in our profit. aad MD' ia-
vestment. in our markets and our
produDti.vi~.
When fully effeetlva ill 1965. t:h. tax bill WCMld
net tax reduction of $11 billion a year of income.
tax.. •
a8
• ..,
••••..-ad lB lM1 ' "
!hat net figure include. the effect: of
aione .. well
~
ea.awa1 ...a
reductions in individual. cos:,._U aDd ••,ital I
Individual income tax.. would be out by . . .t: ".7 1t'11&11
year, and corporate income
tax••
by a net t2.3 bi1110ll -- - - HI
plementlng last y. .r's cut of more
corporate tax••
reform.
a.
,_u
a result of the illveataeDt orecU.e . . . . .
Individual tax rates would fall f r . the , r••_~ ns • •
to 91 percent to a range of 14 to 70 pereat.
Tbe 1\01 21 eKp.
rate -- the rate on the fir.t $25,000 of e_. . . . . profla _. _
fall from 30 to 22 percent in 1964. . . . t:ha .axiwn. corporate rat
-7the onslaught of recession and its unhappy aide effects.
And we can say with complete confidence that, in ICOpe. ill diI
bution and in timing, the
tax
bill which 18 coming to a vote ill . .
House is entirely capable of doing the Job we want when we .nt it
done.
I will not go into the details of the bill or even the _ ••
benefits it offers individual taxpayers and business conceml la.
income group.
It will, of course, substantially reduce the taxeI
individuals in every income bracket, provide tax relief for bYaiDe
particularly for small busineas -- foster greater
tax
equ1tJ aad
relieve some of the hardships imposed on certain group. of
by
taxpa,.
the present tax system.
But important as these benefits are, what 18 far more tapoctA
is the overall impac t the tax bill will have upon our eccmoary -upon consumer demand, upon investment incentives, and thu
upal
the national economic: growth which is easily the most vital f . . .
-6thousand new j aba every day of the week iDe 1udiDa " " 78
•
unemployment to our modest interim loa1 of 4 penent.
If we are to provide tho•• lDil110u of DeW job. &Del r . .Gb __
4 percent goal within the next f.w year•• then :l.t baa b _
that our economy will have to p-ow by some tiS to
each year than it i8 now doing.
That 18 the la..p
ua -- not in the far and dim future. but r1&hC
ur.-nt task the tax bill vill help
why
we
IllU8t
U8
f1.5
eaes._
bl11iGa _
tuk tbat f _
DOW - - tba~
1a ella
accompliab and tlae _ _ _ _
pa.s the tax bill th1a year.
No one can predict exactly how man,. jobs the tax b111
.W III
produce and when, exactly how much it will help boost operatilll n
for manu£ac turing and when. exac tly how much it will add to • _ _
and investment demand and when.
But _
CAll
preclict wida ",el1,
certainty that. without the tax .ut, ... wi,1l fall . . . . . . . .
our goals and our pot8Dtill, aa4
bec_~. . . . . . . .
a.n
~
V"1. . . .~
-.5Not once for 70 conaecutive --the hu
pl.,• • t fall_1Ie1l
UtlC'
ment haa averaged five and three-quarters pere_t.
period of relative expansion we eanoot pin
ment, then -- even ahould we COIltiDue our
Aad if . . . . ,
8l'lOUp . - - _
' I'•••
'gl
,I
t , . . . ~_
unaided -- we will clearly loa. grOUDd when fuecl
vim
the ti. . ef
aDd displaced workers that: will inUlldate our labor _rlcet ill eM •
f_ years.
Bach year during the aid-Sixti.a
All
aver_ of .....t
2 million 700 thouaand young people will enter our labor _rut ••
40 percent more thaa in the aiel-Fiftie. -- and . . _ y a. t.e . . .
worbra will be displaced by advancea in techaolog ancI ,..""191
Tak1n& into account the normal redue tiOlls ia the lat.or Mnet ..,
retirement, death and
othe~
three years we must provide
caus•• , this ••SN
aD
daa~
...... _t
avec. . . of . . . . til•• three atllMe'
jobs annually just to keep our F ••••• __ ..,1.,£_t
tt. . . . . . . . . .
and an average of more than four IRillion new jobs aanually
01' .,..
-4cover the ground it 1DU8t: cover in the , _ n ...... ,
If, tlIae. . . .
in the .hort view we are advaDcing, ill the lOBI via ...... 1i....
more than standing 8tlll.
Today, for example, manufaeturlll8 18 operatiD& .t:
of capacity -- some S
rat...
_1, .7 . . .
0%'
In the 1•• t .ix year., UIluaeel plant c ....lty .............
six percentage pointa higher than the aver. . . of the
p.".' ....
1ft recent yean, a1ao, private inveatlBeDt in ,lallt .......1.5 ••• 1M
fallen to 9 percaDt of total output, compared to 10. 11 . . . . . . . . J
percent levels in the first postwar decade -- . . . _
ah_l. . . . . til
that one percentage point now amounta to _rly . ' .,l11lea ill·• •
investment.
The•• faet8 alOfte are _tter. for . . . . . . .en.
..t
even they 8eem minor when mea.ured apiDat our u~ter tMbille, ••
nearly six years to bring unempl.,._C clown to . . ...,"'18 .....
and when mea8ured againat the ......... fol&iclab1. dlB_u. . . .
employment problem will •••'-- . " . the nat f_ yean.
-3to discu•• a program that will both quictc.n and expand the arowtla of
our national economy.
I speak, of course, of the proar- -'tod1ecl
the tax bill which will come to a vote tomorrow in the Roue. of
Jlepresentatives.
It is now eight months to the day since the Pre.lelent .ubldttat
his Tax Message to the Congress.
they have been month. of lDt... ,~
public discussion, of voluminous testimony and careful
in the House WJys and Means Committee.
clellb.~.tl.
They have been monw ill ...
the economy has continued to rise, recording moderate but .011d ...
on all maj or fronts -- in total Gross National Product, ill iaduetd
production, in personal income and consumption expenditure., ill . .
porate profits.
The.e gains have been both helpful and beart-bl.
but not helpful or heartening enough.
For while they show that our economy baa real and •••eatial
strengths, they also argue with irrefutahle logic that \IIll. . . we
take action now our
ecODCIIIlY
vill .1mp 11 ~ advance fast . . . . . . .
- 2 -
wiele campaips
t~ ODe
OR
behalf of the .Payroll s.riDaa fla.
To . . . . _ n
.illioD new aavers bave been added to the roll., act the
final results are yet to "tabulated.
the IlWIber of
DeW
saver..
1D tribute
-.0.1 tile 1UD7 •• q
to tlua
.ff_~• •f
Ida e •• , . , •
and aymbol1c:a117. to the effort. of iIMluatr'J f.a . . . . .1 -
of the
~aclflc
Telephone
eo..p8Dy. ~ L~i
/
_* .....
1 _
"13 ..
"J' tfi.
~~-~
One could hardly ak for a Ml:c. ...i l ' ' ' _t --
ca..
virile aDd growing Weat. ill tb.1a ciC7. fa t:bia . .-WillI
Inn til
c
-- '- ,....
- Ie •
honor jUlt
ODe
of ehe lnat cODtrilRtcielu ttll , . . -.... ...... , II .....
bu.taea. l..rally. bave .....
to
the _ _. t e . . . . . . ef
• COIltri.hut:ioD of whloh we in the TI'Maury ...._In •••
••
ar.~.ful1y
_re.
'8JI'oll Iavt.q. Plaa.
I 8pu.k of yauy effort:. aa
8aP If
1,
an ....f · ...
",,1! of ....
REMARKS BY THE HONOIlABLI DOOOLAS DILLON
SECREtARY OF 'nil TUASUIlY
AT THE ADVlRnSING COUNCIL DINNU
ST. FRANCIS HOTIL J SAN FUNCISCO. CALUOlUtU
nJESDAY. SEPTEMBER 24 .. 1963, 6: 30 P.M. J , . p l
(As Delivered by The Honorable G. d' ADdelot BeliD.
General Counsel, Treasury Department)
Secretary Dillon has asked me to convey to you his
~Ir..ttaai
and his very great regret that he is \D'\ab1e to be with you tonlaht.
A
you know, the President's tax bill is now being debated on the floor
of the House of Representatives and the Secretary'. presence ia there!
urgently required in Washington.
It is my privilege to appear in hil
place.
On behalf of the Treasury, I would like to thank the member. of ,
Advertising Council for the splendid work they have done for maDY , . .
on behalf of United States Savings Bonds, and
80
many other iaaportat
~ ()
national goals.
I am also glad to see here tonight
kA-IV Y
...m .i.tlDpi....
;A
"--eJ.~t Bank of· AitJez tea ,S&ilfi!"d Oil of taltfornli. Pec ll '-;:=
-.Fe.1ephone, e
d
many mqre.
Your pres.ce giv. . . . the opportullit1 CIt
TREASURY DEPARTMENT
Washington
FOR RELEASE:
ON DEL IVERY
REMARKS BY THE HONORABLE DOUGLAS DILLON
SECRETARY OF THE TREASURY
AT
THE ADVERTISING COUNCIL DINNER
ST. FRANCIS HOTEL, SAN FRANCISCO, CALIFORNIA
TUESDAY, SEPTEMBER 24, 1963, 6:30 P. M., PDT
(9: 30 P.M., EDT)
(As Delivered by The Honorable G. d'Andelot Belin,
General Counsel, Treasury Department)
Secretary Dillion has asked me to convey to you his warm greetings
and his very great regret that he is unable to be with you tonight.
As you know, the President I s tax bill is now being debated on the floor
of the House of Representatives and the Secretary's presence is
therefore urgently required in Washington. It is my privilege to
appear in his place.
On behalf of the Treasury, I would like to thank the members of
The Advertising Council for the splendid work they have done for many
years on behalf of United States Savings Bonds, and so many other
~portant national goals.
I am also glad to see here tonight so
many distinguished leaders of America I s business community. Your
presence gives me the opportunity to honor just one of the great
cootributions that you, along with American business generally,have
made to the economic st;rength of our country -- a contribution of
~ich we in the Treasury Department are especially and gratefully
~are.
I speak of your efforts on behalf of the Payroll Savings Plan.
This year, under the leadership of a distinguished volunteer
~ommittee, some 28 major industries have conducted intensive
m~stry-wide campaigns on behalf of the Payroll Savings Plan. To
date more than one mi 11 ion new s avers have been added to the rolls,
md the final results are yet to be tabulated.
Among the many
companies here in the West that have contributed to this impressive
success is the Pac ific Telephone Company, which led the entire
telephone indus try in the number of new savers. In tribute to the
~fforts of his company -- and symbolically, to the efforts of industry
Ingeneral -- I am happy to award this Treasury Minute Man flag to
Mr. C. O. Lindeman, President of the Pacific Telephone Company.
D-984
- 2 One could hardly ask for a better environment -- than here in the
virile and growing Wes t, in this ci ty, in this gathering -- in which
to discuss a program that will both quicken and expand the growth of
our national economy.
I speak, of course, of the program embodied in
the tax bill which will come to a vote tomorrow in the House of
Representatives.
It is now eight months to the day since the President submitted
his Tax Message to the Congress. They have been months of intensive
public discussion, of voluminous testimony and careful deliberation
in the House Ways and Means Committee. They have been months in which
the economy has continued to rise, recording moderate but solid gains
on all major fronts -- in total Gross National Product, in industrial
production, in personal income and consumption expenditures, in
corporate profits. These gains have been both helpful and heartening,
but not helpful or heartening enough.
For while they show that our economy has real and essential
strengths, they also argue with irrefutable logic that unless we
take action now our economy will simply not advance fast enough to
cover the ground it mus t cover in the years ahead. If, there fore,
~ the short view we are advancing, in the long view we are little
more than standing still.
Today, for example, manufacturing is operating at only 87 percent
of capacity -- some 5 or 6 percentage points below preferred operating
ra~s.
In the last six years, unused plant capacity has averaged
six percentage points higher than the average of the preceding decade.
In recent years, also, private investment in plant and equipment has
fullen to 9 percent of total output, compared to 10, 11, and even
12 percent levels in the first postwar decade -- and we should note
well that one percentage point now amounts to nearly $6 billion in
annual investment. These facts alone are matters for deep concern.
But even they seem minor when measured against our utter inability
for nearly six years to bring unemployment down to an acceptable
degree -- and when measured against the even more formidable dimensions
that our employment problem will assume over the next few years.
Not once for 70 consecutive months has unemployment fallen below
5 percent. Even during the past 8 months of economic upturn
unemployment has averaged five and three-quarters percent. And if
during this period of relative expansion we cannot gain enough ground
~unemloyment, then -- even should we continue our present pace.
b~oken and unaided -- we will clearly lose ground when faced w1th
t~ tide of new and displaced workers that will inundate our labor
market in the next few years. Each year during the mid-Sixties an
average of about 2 million 700 thousand young people will enter our
labor market -- some 40 percent more than in the mid-Fifties -- and
- 3 as many as two million workers will be displaced by advances in
technology and produc tivity. Taking into account the normal
reductions in the labor market by retirement, death and other causes,
this means tha t over the nex t three years we mus t provide an aver age
of more than three million new jobs annually just to keep our present
unemployment rate from rising, and an average of more than four
million new jobs annually or eleven thousand new jobs every day of the
week including Sundays, to reduce unemployment to our modest interim
goal of 4 percent.
If we are to provide those millions of new jobs and reach that
4 percent goal within the next few years, then it has been estimated
that our economy will have to grow by some $15 to $25 billion more
each year than it is now doing. That is the large task tha t faces
us -- not in the far and dim future, but right now -- that is the
urgent task the tax bill will help us accomplish and the urgent
reason why we mus t pass the tax bill this year.
No one can predict exactly how many jobs the tax bill will help
produce and when, exac tly how much it will help boost operating rates
for manufac turing and when, exac tly how much it will add to consumer
and investment demand and when.
But we can predict with deadly
certainty that, without the tax cut, we will fall more and more behind
our goals and our potential, and become more and more vulnerable to
the onslaught of recession and its unhappy side effects.
And we can say with complete confidence that, in scope, in
distribution and in timing, the tax bill which is coming to a vote
in the House is entirely capable of doing the job we want when we want
it done. I will not go into the details of the bill or even the
abundant benefits it offers individual taxpayers and business concerns
in every income group!
It will, of course, subs tantially reduce the
taxes of individuals in every income bracket, provide tax relief for
business -- particularly for small business -- foster greater tax
equity and relieve some of the hardships imposed on certain groups of
tupayers by the present tax system.
But important as these benefits are, what is far more important
is the overall impact the tax bill will have upon our economy -upon consumer demand, upon inves tment incentives, and thus upon the
national economic growth which is easily the most vital factor in
the economic well-being of each one of us -- in our opportunities
fur jobs, job security and advancement, in our profits and our
in\7estment, in our markets and our productivity.
- 4 When fully effective in 1965, the tax bill would provide a total
net tax reduction of $11 billion a year -- as measured in 1963 levels
of income. That net figure includes the effect of structural
revisions as well as reductions in individual, corporate and capital
gains taxes. Individual income taxes would be cut by a net $8.7
billion a year, and corporate income taxes by a net $2.3 billion -t~s supplementing last year's cut of more than $2 billion a year cut
~ corporate taxes as a result of the investment credit and
depreciation reform. Individual tax rates would fall from the present
range of 20 to 91 percent to a range of 14 to 70 percent. The normal
corporate rate -- the rate on the first $25,000 of corporate profits
would fall from 30 to 22 percent in 1964, and the maximum corporate
rate would drop from 52 to 50 percent in 1964, and from 50 to 48
percent in 1965.
Two-thirds of the individual reduction and more than one-half of
ilie corporate rate reduction would become effective only three months
and several days from now, and the remaining reductions in about
15 months. In other words. some $7 billion in net tax reduction would
go into effect only a few short months from now -- $5.6 billion for
individuals and $1.4 billion for corporations. Almost immediately,
therefore, a large share of the tax cut would begin to make itself
felt within the economy. That impac t would grow as consumers and
investors, individuals and businesses, fed more and more of that tax
reduction into the economy. The increased economic activity that
would result would in turn generate higher incomes and profits, more
consumption and investment, and the final stage of the tax cut would
add even further impetus to the entire process.
1
While no one can forecast precisely what the overall impact of
the $11 billion tax cut would be, the Joint Economic Committee of the
Congress has estimated that a $10 billion tax cut could, as it is
spent and respent throughout the economy, increase our total Gross
National Product by $30 to $40 billion annually over what it would
otherwise be -- enough of an increase to create between two and three
million new jobs. That is, of course, merely an estimate -- although
m educated one -- but it does indicate that both investment and
consumer demand will rise by far larger dollar amounts than the tax
cut itself. It is sometimes hard to bring home to ourselves -- when it
is pu.t in such general terms -- exactly what that aggregate rise
would mean to different segments of our economy.
But take, for example, the lower rung of the ~oint Economic
COmmitt{~e estimate -- the $30 billion -- and assume it applied to our
economy this year. For the first six months of this year, that could
have meant (at annual rates) as much as $21 billion more in total
personal consumption expenditures than we actually had -- as much as
$4 billion more in durable goods such as automobiles, furniture and
- 5 others, as much as $7.5 billion more in non-durable goods such as
clothing, shoes, tobacco and others, as much as $10 billion more in
services such as housing, transportation, recreation and others.
That is the kind o~ impac t the tax cu t could have. upon our economy.
furthermore, that ~mpact would start almost immediately next year,
although, of course, we do not expect it to approach the level I
have described until a year or two after tha t.
This greatly expanded economic activity will mean not only more
and better jobs, greater investment and investment incentives, greater
productivity and higher operating rates in industry, but also greater
government revenues to bring us to our goal of a balanced budget.
No aspect of the discussion on the tax bill thus far has produced so
weh misunderstanding -- even distortion -- as this relation between
the tax bill and the budget. Let me, very briefly, try to make a
few points clear.
First, the tax bill is by far our best means of reversing the
deficit pattern of recent years. Even at lower tax rates, a more
rapidly expanding economy will very quickly produce the greater
government revenues that can provide for our national needs without
risking large defici ts.
Second, the President has repeatedly linked the tax cut to a
program of strict expenditure control. Most recently he has made
that quite clear in two important letters to Chairman Wilbur Mills of
the House Ways and Means Committee -- as well as in his nationwide
address las t Wednesday. In his firs t letter to Chairman Mills the
President pledged tha t "tax reduc tion mus t ... be accompanied by the
exercise of an even tighter rein on Federal expenditures" -- that as
the economy expands in response to the tax cut, "a substantial part
of the increased tax revenues will be applied" toward reducing the
transitional deficits -- and that "any increase in the Federal debt
resulting from these transitional budget deficits will be kept
proportionately lower than the" increase in our Gross National Product,
and thus the real burden of the Federal debt will be steadily
reduced. "
In his second letter, as in his nationwide address, the President
again made it unmis tak.qbly clear that, by adopting the tax bill, the
nation will be choosing "tax reduction instead of deliberate deficits
as the princ ipal means of boos ting our economy" -- tha t he considers
these courses mutually exclusive and will .!!2!. follow both at the same
time -- that, in short, the tax bill offers us a choice between greater
~ri\1ate spending or greater government spending as the prime factor
In our economic growth.
- 6 Third, the President could make these commitments, not only
because the economy will expand and revenues inc rease as a resul t of
ilie tax cut, but because his Administration has already put into effect
a thorough and effective program of expenditure control. While our
budget has, of course, increased over the pas t three years, fully
12 percent of the total increase from 1961 through 1964 has been in
ilie areas of defense, space and inescapable interest on the public
debt. When you include the 1964 Budget as submitted by the President,
t~n -- apart from defense and space -- the total increase in all
expenditures during the first three years of his Administration will
be $339 million less than the similar increase during the preceding
three years from 1958 to 1961.
One of the best ways to measure economy in government is to
compare the growth in the number of Federal civilian employees with
the growth in our national population. Surprising as it may be to
some, last year -- that is, from June 30, 1962, to June 30, 1963 -civilian employment in the Federal Government grew by only 5,600
persons. If employment had grown in line with total population the
increase would have been 42,000, not 5,600. And during the same
period State and local government employment grew by about 300 ,000 -or more than 50 times as fast as Federal employment.
Fourth, and last, the fiscal 1963 deficit dropped from an
estimated $8.8 billion to an actual $6.2 billion, largely as a result
of the economic upturn and a tight rein upon expenditures. Including
ilie effect of the tax cut, we now expect the 1964 deficit to be less
than the $9.2 billion forecast last January without allowing for the
tax cut -- and far less than the $11.9 billion originally forecast
after allowing for the tax cut.
In his letter to Chairman Mills, President Kennedy has gone even
further. In an unprecedented move, he has voluntarily put himse If
Ion record as intending -- in the absence of any unforeseen economic
ijownturn or international crisis over the next four months -- to
submit a fiscal 1965 budget with an even smaller deficit than the
h.2 billion originally forecast for this year without a tax cut.
In other words, despite the fact that fiscal 1965 tax revenues will
reflect the major part of the tax cut -- over $5 billion more of that
~ut than will fiscal 1964, or well over $7 billion in all -- the
~rojected fiscal 1965 budget will still involve a lower deficit than
~at originally projected for fiscal 1964 before any allowance for
lax reduc t ion.
~
7 -
Actually, of course, because of the economic stimulus from the
tax cut, tax revenues will fall short of what they would otherwise
be for only two or three years -- a total revenue shortfall of about
$5 to $7 billion. We expect that, at the end of that time, revenues
will have equalled or exceeded the levels they would have reached
wi thou t a tax cu t .
I could say a great deal more on this subject. But I hope I
have said enough to make it clear that, by any appropriate yardstick,
the temporary strain the tax cut places upon our budget is small
indeed. It is the small price that we mus t pay if we are to have any
real hope of moving out of a period of substantial budget deficits
toward the time when we can reasonably expect to balance the budget.
Despite these facts, however, we have seen paraded before us
several proposals -- and one of these is now being made on the floor
of the House -- to tie the tax cut to some arbitrary limit on our
national debt or our national expenditures. No sooner does one
proposal appear but its weaknesses become rather noticeably exposed,
and another emerges to take its place. But no matter how many of
these proposals may appear, no rna tter what guise they may assume,
they have two fatal defects in common -- they are both unnecessary
and unwise.
~hey
are unnecessary because the expenditure control they purport
to offer us is already being achieved. Clarence Cannon, the Chairman
of the House Committee on Appropriations, predicted in a recent major
speech that this year"' s appropriations will be held well below last
year's total -- the first time that will have been done since the end
of the Korean War. And they are unwise because they purport to
control expenditures by placing the entire responsibility on a
one-time estimate of expenditures to be submitted by the President next
January. Neither later supp·lemental requests nor increases voted by
the Congress would have any e ffee t. This could only serve to mis lead
the American people. The responsibility for expenditure control is
shared jointly by the President and the Congress. The Congress not
the President has the power to appropriate moneys. And in the
past few years Congress has often appropriated more than the President
has suggested. The only way to control expenditures is for the
Coogress and the President to join in a continuing effort. That is
just what i3 provided for in Sec tion I of the bill as reported by the
Committee on Ways and Means.
I have already spoken of what the tax cut will mean to our
economy, to jobs, and to the Federal budget. It will also mean a
great deal to our balance of payments as lower marginal tax rates
both individual and corporate -- increase both ~conomic activity and
investment demand. Higher domestic investment will result in
- 8 -
increased productivity, which will sharpen the competitive edge of
U. s. producers in world markets, and expanded economic activity will
make the United States more attractive to both domestic and foreign
investors. No group is in closer touch with our payments problems
than our bankers. It is therefore doubly significant that the
American Banker's Association has listed a prompt and substantial tax
wt as one of the main prerequisites for reaching balance in our
payments. In every respect, therefore, the tax cut is essential to
ilie solution of our major economic problems and to the achievement
of our maj or economic goals.
We may all have reservations about this or that provlslon in the
tax bill. We may all wish that it did more in some areas than it does,
or less in others. But we must weigh these doubts, these
reservations, these wishes, against the strong and invigorating impact
that the tax bill as a whole will have upon our nation, upon every
sector of our economy, and upon every single taxpayer. We must
weigh our hesitations against the fact that, if we do not act
now -- this year -- we could lose the opportunity to lighten the
oppressive burden of high tax rates, to reemphasize the importance
of individual initiative and incentives, and to restore to our private
enterprise system a more and more vital role in the expansion of our
economy.
As you know, more than 2,400 of our country's most distinguished
businessmen -- including, I am sure, some of you here tonight -- have
joined in forming The Business Committee for Tax Reduction in 1963.
Henry Ford II, Chairman of the Board of Ford Motor Company, and
Stuart T.Saunders, soon to be Chairman of the Board of The Pennsylvania
Railroad, serve as co-chairmen of the Executive Committee. Shortly
after the House Ways and Means Committee voted on the rate reductions
to be included in the tax bill, the Executive Committee sent a letter
to all Business Committee members. That letter recognized that some
members of the Business Committee may not approve of all provisions
in the tax bill. But it termed "heartening" the economies that have
occurred in Federal expenditures and "the prospects of a greatly
improved fiscal position at the end of the current budget year."
It called the net impact of the Ways and Means Committee action "a
very real step towards restoring individual incentives and bolstering
economic growth." And it urged all members of the Business Committee
to join with the Executive Committee in "wholehearted, active support"
of the tax bill.
I repeat that call to all of you here tonight -- to join in
"wholehearted, active support" of the tax bill -- to make passage of
the tax bill this year a matter of your personal and vital concern,
for the tax bill personally and vitally concerns the welfare of
every businessman, of every citizen, and of our entire nation.
000
TREASURY DEPARTMENT
September 24,1963
FOR IMtllEDIATE RELEASE
HITHHOIDING OF APPRAISEMENT ON
STEEL REINFORCING BARS
Press release dated JulY 16, 1963, is hereby corrected by
limiting the instructions to withhold appraisement to steel
reinforcing bars manufactured by "lestern Canada steel Limited
through its subsidiary, the Vancouver Rolling
Vancouver, Canada.
000
~tills
Limited of
TREASURY DEPARTMENT
=
-
September 24,1963
FOR IMMEDIATE REIEASE
WITIllIOLDING OF APPRAISEMENT ON
S1EEL REINFDRCING BARS
Press release dated JulY 16, 1963, is hereby corrected by
limiting the instructions to withhold appraisement to steel
reinforcing bars manufactured by Western Canada steel Limited
through its subsidiar,y,the VWlcouver Rolling Mills Limited of
Vancouver, Canada.
000
- 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 trom the 8&le
or other disposition 01' the bills, does not have any exemption, as such, and losl
trom the sale or other disposition of Treasury bills does not have any special
treatment, as such, under the Internal Revenue Code ot 1954.
The bills are subject
to esta.te, inheritance, gift or other excise taxes, whether }PederaJ. or state, but
are exempt fram all taxation now or hereafter imposed on the principal or interelt
thereof by a:oy state, or any of the possessions of the United states, or by any
local taxing authority.
For purposes of ta.xa.tion the amount 01' discount at which
Treasury bills are originally sold by the United states is considered to be interest.
Under Sections 454 (b) and 1221 (5) at 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 purcb&se, and the amount actually
received either upon sale or redemption at maturity during the taxable year tor
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 fram 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 pennitted 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
xtR)C
less for the additional bills dated
July 5, 1963
, (
----~~----
ing until maturity date on
January 2, 1964
91
xtR)C
days remain-
) and noncompetitive tenders for
(XI&tt
$
~oooor
less for the
182 -day bills without stated price from anyone
5(1a)Ok
bidder will be accepted in full at the average price (in three dec1mal.s) 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 October 3,
1963
:(iEfX~---
, in cash or other lmm.ediately available funds or
in a like face amount of Treasury bills maturing
October 3, 1963
------~(~2~3)~-----
•
Cash
TREASURY DEPARTMENT
Washington
September 25, 1963
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 $
2,100~,000
cash and in exchange for Treasury bills maturing
, or thereabouts, for
Octobe. 1963
, 1n the amount
of $ 2 , 19~4 z 000, as follows:
91
mx
,
October~1963
-day bills (to maturity date) to be issued
in the amount of $ 1,30.0,000, or thereabouts, representing an additional amount of: bills dated
and to mature
January~1964
amount of $ 800, iSOO
July
5~3
,
, originally issued in the
, the additional and original bills
to be freely interchangeable.
182 -day bills, for $
lW
800t~OO
Octobe~1963
, or therea.bouts, to be dated
, and to mature
April . 6 4
•
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/~ time, Monday, September 30, 1963
XWJEach
Tenders will not be received at the Treasury Department, Washington.
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
September 25, 1963
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
~,100,000,000, or thereab9uts, for cash and in exchange for
Treasury bills maturing Oc tober 3, 1963, in the amount of
$2,100,584,000, as follows:
91-day bills (to maturity date) to be issued
in the amount of $ 1 ,300,000,000, or thereabouts,
additional amount of bills dated July 5, 1963,
mature January 2, 1964, originally issued in the
~OO,050,000,
the additional and original bills
interchangeable.
October 3, 1963,
representing an
and to
amount of
to be freely
182-day bills, for $800,000,000,
or thereabouts, to be dated
and to mature April 2, 1964.
October 3, 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
(maturi ty value).
'
Tenders will be received at Federal Reserve Banks and Branches
up to the closing hour, one-thirty p.m., Eas tern Daylight Saving
time, Monday, September 30, 1963.
Tenders will not be
received at the Treasury De~artment, 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
~&ponsible and recognized dealers in investment securities.
Tenders
frqm 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 tr-ust company.
D-985
- 2 -
Immediately after the closing hour, tenders
the Federal Reserve Banks and Branches, following
announcement will be made by the Treasury Departrr
and price range of accepted bids. Those submittj
advised of the acceptance or rejection thereof.
the Treasury expressly reserves the right to acc~
all tenders, in whole or in part, and his action
shall be final. Subject to these reservations,
tenders for $200,OQO or less for the additional
July 5, 1963)
(91-days remaining until matur
January 2, 1964)
and noncompetitive tenders fc
or less for the 182-day bills without stated prj
bidder will be accepted in full at the average J
decimals) of accepted competitive bids for the
Settlement for accepted tenders in accordance w
made or completed at the Federal Reserve Banks
in cash or other immediately available funds or
amount of Treasury bills maturing October 3,19E
exchange tenders will receive equal treatment.
will be made for differences between the par vc
bills accepted in exchange and the issue price
The income derived from Treasury bills, w
gain from the sale or other disposition of the
any exemption, as such, and loss from the sale
of Treasury bills does not have any special tJ
under the Internal Revenue Code of 1954. The
estate, inheritance, gift or other excise taxI
State, but are exempt from all taxation now 0
the principal or interest thereof by a~y stat
possessions of the United States, or by any 1
For purposes of taxation the amount of discou
bills are originally sold by the United state
interest. Under Sections 454 (b) and 1221 (~
Revenue Code of 1954 the amount of discount ;
hereunder are sold is not considered to accr
sold, redeemed or otherwise disposed of, and
from consideration as capital assets. Accor
Treasury bills (other than life insurance cc
need include in his income tax return only t
the price paid for such bills, whether on OJ
subsequent purchase, and the amount actuall:
sale or redemption at maturity during the t
return is made, as ordinary gain or loss.
Treasury Department Circular No. 418 (
notice prescribe the terms of the Treasury
conditions of their issue. Copies of the-(
any Federal Reserve Bank or Branch.
000
RTMENT
~URY' S
ONE-lEAR BILL OFFERING
ced last evening that the tenders for $1,000,000,000,
bills to be dated October 1, 196,), and to mature
reel on September 17 J were opened at the Federal
as tollows a
50,000
75,000
(includes $46,261,000 entered on a
noncompetitive basis and accepted in
fUll at the average price shown below)
:I for at the low price' was accepted)
bids.
quivalent rate of discount approx.
n
•
"It..
..
n".
Irn
Total
Applied for
46,250,000
1,741,109,000
26,447,000
114,524 .. 000
3,273,000
30,170,000
244,520,000
1l,420,OOO
28,810,000
24,747,000
16,791,000
106,593,000
$
$2,394,660,000
3.57~
per
3.592%"
).586% It
anmDIl
"
II
!I
Total
Accepted
$
7,450,000
175,449,000
1,447,000
66,224,000
2,083,000
13,500,000
'72,465,000
4,620,000
3,810,000
10,347,000
1,797,000
41,98),000
$1,001,175,000
19th and for the same amount invested, the return on
Ld of ).75%. Interest rates on bills are quoted in
return related to the face amount of the bills payable
unt invested and their length in actual number of ~s
contrast, yields on certificates, notes, and bonds are
n the amount invested, and relate the number of days
t period to the actual number of days in the period,
more than one coupon period is involved.
TREASURY DEPARTMENT
September 25, 1963
FOR IMMEDIATE RELEASE:
NEW
TRr~SURY
AIDE NAMED
Treasury Secretary Douglas Dillon today designated
Donald I. Lamont, an attorney in the Office of the Chief Counsel
of the Internal Revenue Service, as a Special Assistant to the
Secretary. Mr. Lamont will serve as Director of the Executive
Secretariat, succeeding Edward L. Ki1lham, a State Department Forei
Service Officer on temporary assignment to the Treasury, who has
been assigned to the American Embassy in Brussels, Belgium.
Mr. Lamont has been with Internal Revenue Service since 1961,
has received a Special Service Award from Commissioner Caplin in
recognition of his work there. From 1957 to 1961, he was associate
with the legal firm of Ballard, Spahr, Andrews & Ingersoll in
Philadelphia.
Mr. Lamont was born in Port Washington, L.I., New York, in
1930. He was graduated from the University of Virginia and the
University of Virginia Law School. He is married to the former
Betty Banner. They have two children and reside at 2031 Crossley
Place, Alexandria, Virginia.
000
D-987
TREASURY DEPARTMENT
September 25, 1963
FOR IMMEDIATE RELEASE:
NEW
TR~SURY
AIDE NAMED
Treasury Secretary Douglas Dillon today designated
Donald I. Lamont, an attorney in the Office of the Chief Counsel
of the Internal Revenue Service, as a Special Assistant to the
Secretary. Mr. Lamont will serve as Director of the Executive
Secretariat, succeeding Edward L. Ki1lham, a State Department Foreign
Service Officer on temporary assignment to the Treasury, who has
been assigned to the American Embassy in Brussels, Belgium.
Mr. Lamont has been with Internal Revenue Service since 1961, and
has received a Special Service Award from Commissioner Caplin in
recognition of his work there. From 1957 to 1961, he was associated
with the legal firm of Ballard, Spahr, Andrews & Ingersoll in
Philadelphia.
Mr. Lamont was born in Port Washington, L.I., New York, in
1930. He was graduated from the University of Virginia and the
University of Virginia Law School. He is married to the former
Betty Banner. They have two children and reside at 2031 Crossley
Place, Alexandria, Virginia.
000
D-987
~
By) ,SECRETAPI pIU,ON ,;.pt. HOUSE PASSAGE OF mE TAX BIlsL
In paasing the tax bill as reported by the Committee on
Ways and Means, the House of Representatives haa taken a major
step toward freeing our economy from the heavy
drai
of high
wartime tax rates and encouraging the growth of our free
enterprise system.
I would particularly like to congratulate the Honorable
Wilbur Mills, Chairman of the House Ways and Means Committe.,
for his brilliant work and his inspiring leadership.
to commend him and the members of his
in fashioning the tax bill.
C~nmittee
I vant
for their effort.
The nation 18 in their debt.
TREASURY DEPARTMENT
September 25, 1963
IMMEDIATE RELEASE
STATEMENT BY TREASURY SECRETARY DOUGLAS DILLON
ON HOUSE PASSAGE OF THE TAX BILL
In passing the tax bill as reported by the Committee
on Ways and Means, the House of Representatives has taken
a major step toward freeing our economy from the heavy
drag of high wartime tax rates and encouraging the
growth of our free enterprise system.
I would particularly like to congratulate the
Honorable Wilbur Mills, Chairman of the House Ways and
Means Committee, for his brilliant work and his inspiring
leadership.
I want to commend him and the members of his
Committee for their efforts in fashioning the tax bill.
The nation is in their debt.
000
D-988
~7,;)
'~
I
,_,
September 26, 196,3
MEMORANDUM TO THE PRESS:
Secretary Dillon has deSignated J. D1nrey Daane,
Deputy Under Secretary for Monetary Affairs, as Acting
Assistant to the Secretary for Debt Management, effective
today.
Mr. Daane will also continue to serve in his present
capacity.
000
TREASURY DEPARTMENT
September 26, 1963
MEMORANDUM TO THE
PRESS:
Secretary Dillon has designated J. Dewey Daane,
Deputy Under Secretary for Monetary Affairs, to serve
temporarily, as Acting Assistant to the Secretary for
Debt Management, effective today.
Mr. Daane will also continue to serve in his
present capacity.
000
@FedFRASER