The full text on this page is automatically extracted from the file linked above and may contain errors and inconsistencies.
--
)r ~- J
Hl
10
I
A' 3PQ
~. 1.&\\
L1BR,ARY
pnnM 5030
JUN 1 5 1972
TREASURY DEPARTMENT
~~ited
States SavinGs
Bor~s
Issued
~d Redee~d Thro~h
JaDRar.Y
3l.
9Q
(Dollar ~ou:-.ts in i.lil1ions - ~u."1c.cd and will r.01 necessarUY a4d to ~tnlc)
A. ,;,.ou..~t
Issued
1I
Y·\T1i;;:,1)
S<.:ricG A-1935 - D-1941 ••••••••••
Series F & G-1941 - 1951 .........
~"\"""'m;;,n
· •.''.l.V.w.
~r1ea
E:
JI
I
5,003
29,308
A.tiou..~t
Redeer.:ed
4,991
29,137
A;nount
11 Outatand inr;
.
,4
1'*
V or
Ou'"wG +,.~.,
A.-:lt .16&1
.26
13
171
I
.58
r-=====±=====~========~====~
1941 • ••••••••••••••••••••
19/.2 • ••••••••••••••••••••
1943 • i • • • • • • • • • • • • • • • • • • •
1944
1945 • ••••••••••••••••••••
1946 • ••••••••••••••••••••
1947 • ••••••••••••••••••••
·.................... .
1948 • ••••••••••••••••••••
1949 • ••••••••••••••••••••
1950 • ••••••••••••••••••••
1951 • ••••••••••••••••••••
1952 • ••••••••••••••••••••
1953 • ••••••••••••••••••••
1954 • ••••••••••••••••••••
1955 • ••••••••••••••••••••
1956 • ••••••••••••••••••••
1957 • ••••••••••••••••••••
1958 • ••••••••••••••••••••
1959 •••••••••••••••••••••
1960 • ••••••••••••••••••••
1961 ••••••••••••••••••••
1962 • ••••••••••••••••••••
1963 • ••••••••••••••••••••
Unclassified ••••••••••••••••••
Total. Series E ••••••••
1,832
8,089
13,020
15,167
ll,875
5,338
5,031
5,184
5,100
4,449
3,852
4,031
4,587'
4,644
4,801
4;608
4,329
4,186
3,913
3,893
3,905
3,755
3,670
1;549
6,868
11,067
12,720
9,757
4,166
3,746
3,754
'3,606
3,062
2,640
2,704
283
1,222
1,954
2,447
2,1l8
1,172
1,285
1,431
1,494
1,387
1,212
1,327
2,906
1,681
2,767
2,821
2,718
2,477.
2,231
2,047
1,881
1,684
1,443
794
1,878
1,980
1,'890
1,852
1,956
1,867
2,012
2,221
2,312
2,876
lS.lt5
15.ll
15.01
16.13
17.&
21.96
25.54
27.ftJ
29.29
31.1~
31.46
32.92
36.65
40.44
41.24
41.02
42.78
46.n
47.71
51.~
56.88
61.51
78.31
533
586
- 53
~-------+---------~----------~----~
129,794.
89,992
39,801
30.66
Series H (1952 - Jan. 1957)
r - -3-,6-7-0-+--1,;"'4-3-2-+---2;',2-3-9--+---61-.0-41
H (Feb. 1957 - 1963) •••••
5,920
730
5,191
87.~
,.u....
.v....
Total Series H ••••••••••••••••
9,590
2-,-162
7,430
77.h~
Total Series E anu H ••••••••••
139,384
92,154
47,231
33.S!
213
168
(!!I
-4S
21.1]
~-------+--------~------~--~-----i
Series J and K (1952 - 1957) ••••
3,708
2,058
1,650
Wl.~
Series 10"' and G (1952)
•••••
I
r---~---+--~~--4-----~~--~-----1
To·~al
Series ~~~
G J and K ••••
1
matured •••••••
Total unmatured •••••
Tot~:
All Series
Grund Total· •••••••••
~
3,921
2,226
1,695
34;311
143,305
177,616
34,128
94,379
128,507
184
48,925
49,109
43.2
F===~======F=====~==~
Includes accrued diGcount.
Current redemption value.
At option of owner bonds may be held and
will earn interest for additional I>6r1ods
after original maturity dates.
Includes matured bonds which have not been
nresented for redemptions.
BUREAU OF THE PUBLIC DEBT
',2
",,;:-.i ted States Sav~r Bonris Is.sucd D.l".d Rcdccr:-,cd Throu;:h Jam. . ary J.L, 19b4
(Dollar amo~~t5 in ~illions - ro~~dcd and will ~ot neccGG~~i1y add to totnlc)
A;r.o~~t
Issued
::ricG A-1935 - D-1941 ••••••••••
~rieG
F & G-1941
" ,', Mlj'O';;'~
~'~iQ~wz:
-
1951
......... .
19/.2 • ••••••••••••••••••••
·....................
1943
1944
1945
1946
:'947
1948
19/.9
1950
1951
1952
1953
1954
:'955
1956
1957
:955
1959
:960
:961
I
••••••••••••••••••••
•
••••••••••••••••••••
••••••••••••••••••••
··...................
.
................... .
·................... .
·................... .
••••••••••••••••••••
·• ...................
.
•
• ••••••••••••••••••••
• ••••••••••••••••••••
··...................
................... ..
• ••••••••••••••••••••
·•••••••••••••••••••••
................... .
••••• ~...............
••••••••••••• .••••••
~9'2
0
•••••••••••••••••••••
...I..
1963 •••••••••••••••••••••
~
'
•
ri e d ••••••••••••••••••
u~c~aS5~~
To·o.l
Ser~e
~ •••••••• , •••••••
\I
....
a~
aries P. (1952 - Jan. 1957)
v. ...
Po (Feb.
4,991
29,137
11
I
.;\;i'10UII t
OutDto.ndinr;
I
' ;;; OutGtur,
V or
Jbt. Ie
I
13
171
I
I
.~§
~
1957 - 1963) •••••
283
15.45
1,222
15.11
l5.01
1,954
13,020
"
16.13
2,447
15,167
17.84
2,118
11,875
21.96
1,172
5,338
1,28,
25.54
5,031
27.f:iJ
1,431
5,184
29.29
5,100
1,494
31.18
1,387
4,449
31.46
1,212
3,852
32.92
1,3 21
4,031
36.65
1,681
4,587
1,R78
40.44
4,644
41.24
1,980
4,801
41.02
1,890
4,608
42.78
1,852
4,329
46.73
4,le6
1,956
1,867
47.71
3,913
51.68
2,012
3,893
56.88
2,221
3,905
I
37r::'r::'
61.57
2,312
:,);J
2,876
78.37
1
3,670
1:'33
- 53
~
~------~--------~----------~-----129, 794
30.66
89,992
39,801
r--3.;..,6-7-0-~-~--~--;......--.l---61.01
1,1132
2,239
81.69
5,191
730
5,920
1,832
8,089
I
I
9,590
~rie5 J and
K (1952 - 1957) ••••
TO'"al Series?
i
:
~l Scri.cG
: ....,cJ.-.lGeo
G) J and K ••••
'~'O~J;J.:;' .;,;.... turcd •••••••
TOl,(J,l ~.r.'::lturcd •••••
C,;-:.r.d
.l.otal •••••••••
ucc..,~(;d
77048
1,430
47,231
33.89
1=1
~------~----------
3,108
2,058
c
45
21.13
1,650
44.50
~------------------------~------~-------
2,226
1,695
43.23
~==3=,=9=21==============~====
1
!
34,311
113,305
117,616
184
48,9 25
49,109
34,128
94,379
128,507
.54
34.14
27.65
diccOW1t.
redemption value.
;~t o?t::'on of O'io";,,cr bor.da r:-.ny be held ~. . .d
will eu~ ~.tercGt for additional periods
after ori~inal maturity dates.
Gurr~nt
2,162
92,154
=1=3=9=,=3=84====::::::>I::C:C:='::
168
•••••
213
!!I
Total Series E arid H ••••••••••
F and G (1952)
,
1,549
6,868
11,067
12,720
9,757
4,166
3,746
3,754
3, &:J6
3,062
2,640
2,704
2,906
2,767
2,821
2,718
2,477
2,231
2,047
1,R81
1,684
1,lili3
794
586
I
70tal Series H................
~ries
5,003
29,308
k.ou..~t
Redeer.:ed
JI
:941 • ••••••••••••••••••••
T·
I
11
BL~U
OF
'i'~
pu1):,rc
DZ3':
2·Jt\i ted St: t~a So.vi.;l.';IJ Bonds Issued ~jd Redee:ued Thro\.ll;h FebnrArT, 1964
(Dollar nruO~j~a in ~illions - ~o~~dcd and will root neccs5arily ~dd to totnlG)
~ ·\T1T:1::n
-I
S<:ricG J\.-1935 - D-1941 .. ........
Series F & G-1941 - 1951 .........
l}"IATUEE!) J/
SQr1ea E:
1941 •••••••••••••••••••••
1942 •••••••••••••••••••••
1943
.l •••••••••••••••••••
191J • ••••••••••••••••••••
194~ • ••••••••••••••••••••
1946 • ••••••••••••••••••••
1947 • ••••••••••••••••••••
·................... .
·................... .
1952 ·................... .
1953
1948
191.9 • ••••••••••••••••••••
1950
1951 • ••••••••••••••••••••
• ••••••••••••••••••••
1954
1955 • ••••••••••••••••••••
1956 • ••••••••••••••••••••
•
••••••••••••••••••• 0
......................
1957
1958 • ••••••••••••••••••••
1959
1960
1961
1962
1963
• ••••••••••••••••••••
•
• • • • It • • • • • • • • • • • • • • •
• ••••••••••••••••••••
• ••••••••••••••••••••
• ••••••••••••••••••••
Unclas s ified ••••••••••••••••••
Total Series E ••••••••••••••••
Series H (1952 - Jan. 1957 ) 21
•••••
H (Feb. 1957 - 1964) •••••
$ 5,003
29,308
$ 4,991
29,155
$
12
152
_
.24
.52
r-=========~'======~====
1,832
8,092
13,024
15,176
11,879
5,341
5,034
5,lAB
5,105
4,453
3,856
4,037
4,592
4,650
4,807
4,614
4,335
4,192
3,919
3,899
1,550
282
6,871
1,221
11,0741,950
12,728
2,4489,763
2,117
4,169
1,172
3,749
1,286
3,751
1,431
3,610
1,495
3,066
1,387
2,643
1,212
2,709
1,329
2,914
1,678
2,771
1,879
2,824
1,983
2,722
1,892
2,481
1,854
2,235
1,958
2,051
1,868
1,886
2,013
15.39
15.09
14.97
16.13
17.82
21.94
25.55
27.58
29.29
31.15
31.43
32.92
36.54
40.41
41.25
41.01
42.77
46.71
47.67
51.63
3,911
1,690
2,221
56.79
3,761
1,455
2,306
61.31
3,830 I
853
2,977
77.73
1--_--.l.7::.48~-li_ _.;;.;80:::.:)4s.....~-----·r;~6:::-.._-+-_ _ _ __
~l:~3~'0~.2:J.~7~7_1,---90~I.i.o. 1~76_-4-1__1"",1'9.QO~?_-!
,a.
_ _~
30,. 6~3
3,670
1,445
2,225
60.63
5,982
743
5,239
87.58
"L.:.:'
Total Serios H •••••••••••••••• ~~9..1.'.,::.65.::,.:::2:.....-:---=.2.....,1m::8~8:...---T_ _~
7h~L&~t1t--_-+-__~7'J...1..,7.1'-01111-,
Total Se~ieG E and H.... ••••••
Series F andG (195 2 ) ••••••• oO ••
Se rie B J and K
~
J. 952
-
139~929
92.564
47 .366
~~ .Re:
~~~~~~~k=~~~~~==~==~~~
~-...::2~1:.:::-3-+-_-=-17/.::j'.4t-~-~---..319"---_+_--&.:1.8.u1..""'31-1
1957) •• oO. f.-....:::.3.z..~7.:..:0:.;.9_..;..,-..;2:..;',..::0.;;.68;;.-._+1_~1;.L'.~
6l.u;&ollL1.-._-t-__1...
?J, I _
uh......-w.,
I
To-"al Serie sF,
GI J and K ••••
Tot~l
Tot~l
G'~!..:1d
matured •••••••
unmatured •••••
All S2rics
Total ••••• oO...
1=;::::3=
,92=2=~1==2=.2=4=2==;::=~1_~.6=;R~O=~==~IJ.?~.R~I=
34,311
143,851
178,162
34,146
94,806
128,952
164
49,046
49,210
I
::-.c::' udc a nccrueci diG count •
C\';"'-:-ent red(:~.i?tion v<llue.
/. ;~t
,vion 0: ov..ner bor.da ..,0.'1 be ::--.eld and
will- earn ~~tercst for additi~al ~riods
I
I
after
ori~ina: maturit~
dates.
Includes matured bonds whioh have not been.
.,ro.,C'ntcd for redemption.
BUREAU OF THE PUBr.rC DEB?
.48
34.10
27.62
4
The report is in the form of a 53 page pamphlet.
A. E. Weatherbee, Administrative Assistant Secretary in a
foreword to the report said it was published
"to serve a dual
purpose of providing means of interchange of management information and giving recognition to the participating bureaus
and offices."
It is also distributed to other government
departments and agencies and to interested Congressional
Committees
0
- 5 -
returned to Treasury for redemption.
This change allowed
for the consolidation of offices which also contributed
to the total savings.
Savings:
$180,000.
The Bureau of Accounts made improvements in
central accounting, reports that are required from
other departments and agencies, and the disbursement
of Government funds
Savings:
0
$150,000.
The Alcohol and Tobacco Tax Division of the Internal
Revenue Service
made a study of its manpower used to
supervise distilleries in the U. S.
Savings:
The report, a 53 page pamphlet eB1!itle@,
)
.
$380,000.
42iPQsr9& 'i
i:o
.~
~1·
. Managemolia. . .mp . . ge:tpbd!.
is published by the Treasury Department
provide a means of intercb,a9ge of management information.
,/
It
-.
//
distributed to the TTsury ' s 12 partic~pa~ng bureaus and off.
ana-to other government departments and
Congressional Committees.
agen~
and to
~
d~:~~
- 4 The continuing evaluation of Coast Guard shore
units to provide the best possible service at minimum
costs led to the closing or automating of a number of
Light Stations.
Savings:
$246,000.
A study of commercial transportation systems used
to move heavy Coast Guard equipment and supplies and
subsequent negotiations produced lower rates for the
transportation of such items as small boats, buoys, and
household effects for transferred Coast Guard personnel.
Savings:
$735,000.
The Bureau of Public Debt, one of Government's major
record-keeping organizations, converted its record of
savings bonds sold and redeemed from manually maintained
registers to recording such transactions on magnetic tape.
This permits mechanical identification of bonds sold and
- 3 -
identifying well in advance the manpower necessary to
accomplish a predetermined workload.
Savings
The Bureau of Engraving and Printing, through
refinements and improvements of equipment used in the
production of rolls of stamps, has
~ncreased
its rate
of production to 125 percent of the originally planned
output.
Savings:
$220,000
The Coast Guard has reported a number of money-
saving improvements; among them are integration of two
electronic navigation stations to permit simultaneous
radio transmission/of two systems/from a single source.
Savings:
$100,000.
The installation of stainless steel propellers
on three U. S. Coast Guard Ice Breakers ~ reduce
maintenance costs from broken blades.
Savings:
$60,000.
- 2 Some of the principal achievements .dur ing the
~ar
listed i
the report were these:
A review of the Internal Revenue Service field organization (<;lar--i::ng--the fiscal yea! produced certain mergers and
consolidations which became effective January 1, 1964.
Savings to result will total $3.5 million.
The Internal Revenue Service will save about $600,000
t1
by using improved methods in the preparation of taxpayer
directories, and an
addjFjOPa~
$250,000 in savings has
been reported through the recent adoption of a new method
of key punching cards used in the (lnte-r-n&l-.~~nue
~~£~automatic data processing system •
.--..;
The Internal Revenue Service's Collection Division,
one of the key units engaged in processing individual
income tax returns, has developed a system for
D R AFT
TREASURY DEPARTMENT
Washington
For Release, Newspapers
Monday, February 3, 196~
NEW MANAGEMENT IMPROVEMENTS SAVE TREASURY $16, 000, 000
Sixteen million dollars will be saved by
improve~managemer
put into effect during fiscal year 1963, including the adoption
of suggestions from employees under an incentive awards program l
the Treasury reported today.
Treasury Secretary Douglas Dillon commended bureau heads
and individuals for their efforts in achieving the second highe
annual amount of savings during the l7-year history of the
Treasury's program.
In -4_s annual report entitled "Progress in Management
Improvement," the Treasury also pointed out that many of the nE
management measures taken during the year not only saved money,
but improved various Treasury services to the public.
!
.J.
I
I
""
TREASURY DEPARTMENT
January 31, 1964
RELEASE: A.M. NEWSPAPERS
10NDAY, FEBRUARY 3, 1964
~OR
NEW MANAGEMENT IMPROVEMENTS
SAVE TREASURY $16,000,000
Sixteen million dollars will be saved by improvements put into
ffect during fiscal year 1963, including the adoption of suggestions
:rom employees under an incentive awards program, the Treasury
'epor ted today.
Treasury Secretary Douglas Dillon commended bureau heads and
.ndividuals for their efforts in achieving the second highest annual
·.mount of savings during the l7-year history of the Treasury's
'ormal program.
In its annual report entitled "Progress in Management
mprovement," the Treasury also pointed out that many of the new
anagement measures taken during the year not only saved money, but
mproved various Treasury services to the public.
Some of the principal achievements listed in the report were
hese:
A review of the Internal Revenue Service field
organization produced certain mergers and consolidations which became effective January 1, 1964,
Savings to result will total $3.5 million.
The Internal Revenue Service will also save about
$600,000 by using improved methods in the preparation
of taxpayer directories, and $250,000 in savings has
been reported through the recent adoption of a new
method of key punching cards used in the automatic data
processing system.
The Internal Revenue Service's Collection Division,
one of the key units engaged in processing individual
income tax returns, has developed a system for
identifying well in advance the manpower necessary to
accomplish a predetermined workload. The new system
will produce a savings of $800,000 annually.
(OVER)
1122
- 2 The Bureau of Engraving and Printing, through
refinements and improvements of equipment used in the
production of rolls of stamps, has increased its rate
of production to 125 percent of the originally planned
output. Savings: $220,000.
The Coast Guard has reported a number of moneysaving improvements; among them are integration of
two electronic navigation stations to permit simultaneous
radio transmission from a single source. Savings: $100,000.
The installation of stainless steel propellers on
three U. S. Coast Guard Ice Breakers will reduce
maintenance costs from broken blades. Savings: $60,000.
The continuing evaluation of Coast Guard shore units
to provide the best possible service at minimum costs led
to the closing or automating of a number of Light
Stations. Savings: $246,000.
A study of commercial transportation systems used
to move heavy Coast Guard equipment and supplies and
subsequent negotiations produced lower rates for the
transportation of such items as small boats, buoys, and
household effects for transferred Coast Guard personnel.
Savings: $735,000.
The Bureau of Public Debt, one of Government's major
record-keeping organizations, converted its record of
savings bonds sold and redeemed from manually maintained
registers to recording such transactions on magnetic
tape. This permits mechanical identification of bonds
sold and returned to Treasury for redemption. This change
allowed for the consolidation of offices which also
contributed to the total savings. Savings: $180,000.
The Bureau of Accounts made improvements in central
accounting, reports that are required from other
departments and agencies, and the disbursement of
Government funds. Savings: $150,000.
The Alcohol and Tobacco Tax Division of the Internal
Revenue Service made a study of its manpower used to
supervise distilleries in the U. S. Savings: $380,000.
The report is in the form of a 53 page pamphlet.
A. E. Weatherbee, Administrative Assistant Secretary in a forew~
to t~e.report said ~t was published "to serve a dual purpose of
prov~d~n~ means of ~nterchange of management information and giv~
r~cog~~t~on to the participating bureaus and offices."
It is d~
d~str~buted to othe: government departments and agencies and to
interested Congress~onal Committees.
11
J:{
.{:<"L '.!SF. ~.•
~.
H7i4:::: P AP2;l.S,
ueaday, fiebruar, 4.
1964.
i !le i rea.ury 0epartment announced 18st evenin..; that the tende~B tor two Sl~rl •• of
l're•• ury billa, one aeries to be an addi tiona1 issue of the bill. dated 1o'W'..oor 7, l~
lnd the otber aeries to be dated February 6, 1964. vtt1Ch were oftered on January 29, ..
)pened at the Federal :iea8m Banka on Februa17). Tenders were inTit.ed t~ ~-;.,)OO,,*
:>r thereabouts, ot 9l-day bUla and for i9OO,000,000. or thereabout., or l82-Jay bUll.
rne details of the tvo aeriea are 81 rOllOllll
,~\~y,; j~'
ACCCtJ'Ir:D
C'.1ifJrtlH V:: inDS I
~dgh
Low
A. Te rage
9l-daj Treaaury bUla
maturing ~l 7.
Approx. 3:quiv.
Price
Annual Rate
99.120
).4811
99.112
3. S13.~
99.114
3.S05,~
1969
!I
t
162-dal
:
JI& tur1.ng
I
rNaSVi
Augldt 6 , l~
Ap r. rox:tq;l
r'rice
98.1eo
:
bUla
;18.168
98.17)
....
Anl~u&l
a\t
~
J.600~
3.624S
3.615' Y
83 percent of the al'llOunt of n-day bUls bid for at the low price va. ac(:epttd
57 :>ercent ot tn.e amount or 182-day billa bid for at the low price . s aeeepttd
i:iatrlct
BOlton
~ev York
?hiladelpb1a
:":leveland
(tichmond
Atlanta
Chica::o
~t. Louie
,Unneapo1is
~.as ~ity
Dallas
.;)an
:'rancisco
'1' Jl
!I
y
Y
Al..2
Applied For
$
24,111,000
1,480,626,000
29,895,GOO
23,910,000
12,884,000
}O,464,ooo
20,.826,000
41,606,000
20,849.000
)1,1)2,000
30,423,000
1$2,$66,000
~2,084,354,ooo
Accepted
: AEp11ed For
$
14, III , ')00 : . ;
1.862, 000
897,838,000:
1,293,,84.000
14,895,000:
7,)82,000
23,870,000 s
16.454,000
12.757,000:
7, ~2,000
29,128,000 t
7,825,()J()
1)4,6)6 ,000:
139,062,000
35,202,000 t
29,805,000
16,509,000:
6,121,000
27.!>62,OOO:
12.>02,000
22,253,000
1l,641,OOO
n,627,000:
124,376.000
:U,)OO,688,()(YJ
;1,658,576,000
y .
!oeo ted
~ 3. ,g62,()1
67;)~2~4,Q1G
.?,)1)2,()1
l),uSU,a1
:., , 532,a1!
i /)04,01
/'4, 552t~
i::-;,SKl,OJ
J.+,l21j Ol
J'I,jO?,~
'),211,~
~'2Jod6~
$9{ I,}, 300,0:
inciu,les 1242,982,OUO noncompetitive tenders a.ccepted at tae a qrage pric» of 99,~
includes ~O,511 ,000 noncOIIpetitive tenders accepted at the awra,e price of 98.11
In a coupon i8sue of the same length and for tile sal'l'le &lount inve.ted, trw retull
t nese 0 Uls 'Would provicie ji.elds of 3.'9~. for t ~e 91-<1&} bUls. and ).7h;', ror ~
lS2-jaj bills. Interest rates on bills are qlJ,oted itl teNs or bank d1.cetlIlt wiU
ret'Jrn related to tne face &JI'IOunt of the bills payable at maturity rather ttw.n U
ucn.::1t invBated and thei r length in actual number of day. related to a )t 'J-<ial JI
in contrast, y1eld~ 00 certificates, notes, and 'Jonda are eonrputed 1.n t.rme of
intereat on tne AltOunt invested, and relate the number of dall rema1nin( in ..
int~!"e.t payment period to the actual number of days in tne period, witt se'Id.aJIII
compoundini\ it lIlore than one COUOO:l period is invol'W'ed.
1
1~)
TREASURY DEPARTMENT
~LEASE
A. M. NEWSPAPERS,
iy, February 4, 1964.
February 3,
RESULTS OF TREASURY'S WEEKLY BILL OFFP1UNG
{he Treasury Department armounced last evening that the tenders for two series of
rry bills, one series to be an additional issue of the bills dated November 7, 1963,
~e other series to be dated February 6,1964, which were offered on January 29, were
[i at the Federal Reserve Banks on February 3.
Tenders were invited for $1,300,000,0~
'"reabouts, of 91-day bills and for $900,000,000, or thereabouts, of 182-day bills.
~tailS of the two series are as follows:
l82-day Treasury bills
91-day Treasury bills
OF ACCEPTED
,~ITIVE BIDS:
maturing May 7, 1964
maturing August 6, 1964
Approx. Equiv.
Approx. Equiv.
Price
•
Annual Rate
Price
Annual Rate
figh
99.120
3.481%
98e180
3.600%
99.112
98.168
3.513%
3.624%
:
\verage
99.114
3.505%
98.173
3.615%
·
·
·
Y
Y
:3 percent of the amount of 91-day bills bid for at the low price was accepted
~7 percent of the amount of 182-day bills bid for at the low price was accepted
I
TENDERS APPUED FOR AND ACCEPTED BY FEDERAL RESERVE DISTRICTS:
,rict
Applied For
$ 24,111,000
1,480,628,000
29,895,000
23,970,000
12,884,000
30,464,000
205,826,000
41,606,000
20,849,000
31,132,000
30,423,000
152,566,000
$2,084,354,000
Accepted
: Applied For
Accepted
$ 14,111,000 : $
1,862,000 ~ 1,862,000
'York
897,838,000
1,293,584,000
676,284,000
ladelphia
14,895,000
7,382,000
2,382,000
~eland
23,870,000:
16,454,000
16,454,000
)mond
12,757,000
7,962,000
6,532,000
:nta
29,128,000
7,825,000
7,804,000
ago
134,636,000
139,062,000
74,552,000
lLouis
35,202,000
29,805,000
28,590,000
leapolis
16,509,000
6,121,000
4,121,000
as City
27,862,000
12,502,000
10,502,000
las
22,253,000
11,641,000
9,211,000
IFrancisco
71,627,000
124,376,000
62,086,000
! TOTALS
$1,300,688,000 !I $1,658,576,000
$900,380,000 ,£/
~
Ludes $242,982,000 noncompetitive tenders accepted at the average price of 99.114
Iludes $60,517,000 noncompetitive tenders accepted at the average price of 98.173
a coupon issue of the same length and for the same amount invested, the return on
lae bUls would provide yields of 3.59%, for the 91-day bills, and 3.74%, for the
,-day bills. Interest rates on bills are quoted in terms of bank discount with the
nrn related to the face amount of the bills payable at maturity rather than the
not invested and their length in actual number of days related to a 360-day year.
eontrast, yields on certificates, notes, and bonds are computed in terms of
rest 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, with semiannual
lounding if more than one coupon period is involved.
23
~on
and excha.nge tenders viII 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 I<
or other disposition 01' the bills, does not hAve any exemption, as such, and loal
trom 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 herea:fter imposed on the principal. or interelt
thereof by any state, or any of the possessions of the United states, or by any
local taxing authority.
For purposes of taxation the amount of discount at which
Treasury bills are originally sold by the United states is considered to be interest.
Under Sections 454 (b) and 1221 (5) of the Internal Revenue Code of 1954
the amount of discount at which bills issued hereunder are sold is not considered
to accrue until such bills are sold, redeemed or otherwise disposed of, and such
bills are excluded from consideration as capital assets.
Accordingly, the owner
of Treasury bills (other than life insurance companies) issued hereunder need
u·
clude in his income tax return only the difference between the price paid for sue
billa, whether on original issue or on subsequent purchase, and the amount actual
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.
1£1·
llh'TA - MODIFIED
decimals, e. g., 99.925.
Fractions
~
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 ot 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.
Dmnediately 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
The
submitting tenders will be advised of the acceptance or rejection thereof.
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
final.
Subject to these reservations, noncompetitive tenders for
less for the additional bills dated November
MaYxxm: 1964
ing until maturity date on
$1000 or less for the
tm
1965
,(
$2~O
91
~
or
days remain-
Hit
) and noncompetitive tenders tor
182 -day bills without stated price from anyone
ffii
bidder will be accepted in full at the average price (in three decima.ls) of accepted competitive bids for the respective issues.
Settlement tor accepted ten-
ders in accordance with the bids must be made or completed at the Federal Rese~
Banks on
Februa~ 1964
,in cash or other immediately available funds
in a like face amount of Treasury bills maturing
Februay, 1964
•
or
Cash
1~
DDXRIIllnllX
TREASURY DEPARTMENT
washington
February 5, 1964
FOR IMMEDIATE RELEASE,
TREASURY'S WEEKLY BILL OFFERING
The Treasury Department, by this public notice, invites tenders for two seriel
of Treasury bills to the aggregate amount of $ 2,2006,000 , or thereabouts, tor
cash and in exchange for Treasury bills maturing
Feb~~15, 1964 , in the amount:
ot $ 2,202liiS'OOO , as follows:
February 15, 1964
91 -day bills (to maturity date) to be issued
m
,
itdC
in the amount of $ 1,300,000,000 , or thereabouts, represent-
XffiX
ing an additional amount of bills dated
and to mature
~
14, 1964
---"::"-"'ffi~:------
amount of $ SOO'fHiOoo
November 14, 1963
bJIX
,
, originally issued in the
,the additional and original bills
to be freely interchangeable.
lS2
Wi
-day bills, for $ 900,000,000
FebruaW' 1964
,or thereabouts, to be dated
Wi
,and to mature
August _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 denominat ions 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 Standard time,
Monday, February 10, J..!,
xtlQ
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 til
price offered must be expressed on the basis of 100 , with not more than three
TREASURY DEPARTMENT
FOR IMMEDIATE RELEASE
Febr4ary 5, 1964
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
$2,200,000,000, or thereabouts, for cash and in exchange for
Treasury bills maturing February 13,1964, in the amount of
$2,202,268,000, as follows:
91-day bills (to maturity date) to be issued February 13, 1964,
1n the amount of $1,300,000,000, or thereabouts, representing an
additional amount of bills dated November 14,1963, and to
mature May 14, 1964,
originally issued in the amount of
$800,631,000,
the additional and original bills to be freely
interchangeable.
182-day bills, for $900,000,000,
or thereabouts, to be dated
February 13,1964, and to mature
August 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 ih 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 It'ederal Reserve Banks and Branches
up to the closing hour, one-thirty p.m., Eastern Standard
time, Monday, February 10, 1964.
Tenders will not be
received at the Trl~asury DeJ;>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 tEmders 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 tende.rs are
accompanied by an express guaranty of payment by an incorporated bank
or trust company.
- 2 -
Immediately after the closing hour, tenders will be opened at
the Federal Reserve Banks and Branches, following which public
announcement will be made by the Treasury Department of the amo~t
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
November 14,1963, ( 91~ays remaining until maturit¥ date on
May 14, 1964)
and noncompetitive tenders for ~ 100,000
or lesa 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 February 13, 1964,
in cash or other immediately available funds or in a l1ke face
amount of Treasury bills maturing February 13,1964. 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 dispoEition of the bills, does not have
any exemption, as such, and loss fro~ the sale or other disposition
of Treasury bills does not have ar.:\, .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 U~ited 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 exclude(
from consideration as capital assets. Accordingly, the owner of
Treasury bills (other than life insurance companies) issued hereundl
need include in his income tax retu~ 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 tb
return 1s made, as ordinary gain or loss.
Treasury Department Circular No. 418 (current revision) and th
notice prescribe the terms of the Treasury bills and govern the
conditions of their issue. Copies of the circular may be obtained
any Federal Reserve Bank or Branch.
000
TREASURY DEPARTMENT
February 7, 1964
FOR IMMEDIA'IE REIEASE
TREASURY DECISION ON WELDED STANDARD STEEL PIPE
UNDER THE ANTIOOMPING ACT
With regard to welded standard steel pipe from West Germany,
the Treasury Department has determined that the case be closed on
the basis of no sales at less than fair value within the meaning
of the Antidumping Act.
Notice of the determination will be pub-
lished in the Federal Register.
The dollar value of imports of the involved merchandise received during the 12-month period beginning July 1,
approximatelY $10,000,000.
1962,
was
REASURY DEPARTMENT
February 7, 1964
FOR IMMEDIATE REIEASE
TREASURY DECISION ON WELDED STANDARD STEEL PIPE
UNDER THE ANTIWMPING ACT
With regard to welded standard steel pipe from West Germany,
the Treasury Department has determined that the case be closed on
the basis of no sales at less than fair value within the meaning
of the Antidumping Act.
Notice of the determination will be pub-
lished in the Federal Register.
The dollar value ot imports of the involved merchandise received during the 12-month period beginning Jul¥ 1,
approximatelY $10,000,000.
1962, was
TP-l
TABLE III
Married Couple With One Dependent,
With Standard Deduction
Income
(W!Ses & 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
2O~000
Present Tax
0
0
0
$ 180
360
540
720
1,009
1, 501~
2,122
2,780
3,530
4,328
New Tax
0
0
0
$. 98
245
402
552
800
1,228
1,75 4
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
4;0
595
7'5>
" Tax Cut
46i
32
26
23
21
18
17
17
17
.-
19
1965
Married Couple with Two Dependents,
with Standard Deductions
Income
(Wages & salartes)
$ 1,000
1,500
2,000
3,000
4,000
5,000
6,000
7,500
10,000
] 2, 500
15,000
17,500
20,000
Present Tax
$
°°
60
°
240
420
600
877
1,372
1,966
2,616
3,350
4,124
New' Tax
$
°°
°
140
°
290
450
686
1,114
1,622
2,172
2,785
3,428
Tax Cut
$
60
100
130
150
191
258
344
444
565
696
10 Tax Cut
10~
42
31
25
22
19
17
17
17
17
TP-2
Table 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
'.22
620
818
1,048
1,405
2,096
2,982
4,002
5,153
6,412
New Tax
14
85
161
329
500
671
866
1,168
1,742
2,478
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
354
50 1l
668
862
1,062
$
i
Tax Cut
77i
43
33
22
19
18
17
17
17
17
17
17
17
j.
II-
TABLE
I
~I
Jt
1965
Married Couple with No Dependents
with Standard Deduction
Income
Present Tax
(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
0
30
$
120
300
480
660
844
1,141
1,636
2,278
2,960
3,710
4,532
New Tax
Tax Cut
0
0
56
200
354
501
658
915
1,342
1,886
2,460
3,085
3, 764
0
$ 30
64
100
126
159
1136
226
294
392
500
625
768
% Tax Cut
0%
10C
53
33
26
24
22
20
18
17
17
17
17
'ABLE II
Married Couple with No Dependents
with Standard Deduction
Income
Present Tax
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
0
30
$
120
300
480
660
844
1,141
1,636
2,278
2,960
3,710
4,532
New Tax
0
0
56
200
354
501
658
915
1,342
1,886
2,460
3,085
3,764
ffice of the Secretary of the Treasury
Office of Tax Analysis
Tax Cut
0
$ 30
64
100
126
159
Hi6
226
294
392
500
625
768
% Tax Cut
0%
10C
53
33
26
24
22
20
18
17
17
17
17
'Table A
1965
Single Taxpayer,
with Standard Deductions
Income
(Wages & salaries)
$ 1,000
1,500
2,000
3,000
~,000
5,000
6,000
7,500
10,000
12,500
15,000
17,500
20,000
Present Tax
$
60
150
240
'~22
620
818
1,048
1,405
2,096
2,982
4,002
5,153
6,412
New Tax
14
85
161
329
500
671
866
1,168
1,742
2,478
3,334
4,291
5,350
$
Tax Cut
46
65
79
93
120
147
182
237
354
50 ll
668
862
1,062
$
~ Tax Cut
77i
43
33
22
19
18
17
17
17
17
17
17
17
22
1964
Married Couple with Two Dependents,
with Typical Average Itemized Deductions
Income
(Wages & Salaries)
$
1I
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
$ 300
456
720
1,196
1,664
2,213
2,772
3,410
4,821
6,420
10,188
14,576
24,952
36,720
.
1964
245
377
618
1,051
1,477
1,976
2,483
3,057
4,332
5,769
9,078
13,013
22,484
33,107
$
Tax
.
Tax cut
$
55
79
102
145
187
237
289
353
489
651
1,110
1,563
2,468
3,613
·
·•
·
~ Tax cut
1~
17
14
12
11
11
10
10
10
10
11
11
10
10
Some of the irregularity in progression of percentages is due to round:
TP-2
TABLE X
Married Couple with Three Dependents,
with Typical Average Itemized Deductions
•
Income
(Wases & salaries)
$ 5,000
6,000
7,500
10,000
12,500
15,000
17,500
20,000
25,000
30,000
4V,ooo
50;000
75,000
100,000
Present Tax
$
180
336
600
1~064
1,531
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
$
Tax Cut
•
2,700
3,856
5,175
8,291
1l,971
51
91
141
205
268
345
431
530
761
1,017
1,615
2,284
30,
5, 90
~9
245
459
859
1,263
1,712
2,~79
20,~
3'430
~
Tax Cut
2~
27
24
19
18
17
17
16
16
16
16
16
15
15
TABLE D
1965
Married Couple with Two 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
~O,ooo
50,000
75,000
100,000
Present Tax
$ 300
456
720
1,196
1,664
2,213
2,772
3,410
4,821
6,420
10,188
14,576
24,952
36,720
New Tax
$ 218
338
561
973
1,,)77
1,844
2,318
2,850
4,024
5,367
8,525
12,248
21,168
31,178
Tax Cut
82
118
159
223
287
369
454
560
797
1,053
1,663
2,328
3,784
5,542
$
~,
Tax Cut
27%
26
22
19
17
17
16
16
16
16
16
16
15
15
1964
Married Couple with Two Dependents,
wi tb S'taDd.a.ri Bed_tion
Income
(Wages & Salaries)
Present tax
$
0
0
0
60
$
240
420
600
877
1,372
1,966
2,616
3,350
4,124
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
··
·
1964 Tax
0
0
0
0
$ 160
325
500
750
1,200
1,739
2,326
2,987
3,683
·
·
Tax cut
$ 60
80
95
100
127
172
227
290
363
441
·••
··•
-
10 Tax cut
1~
33
23
17
14
13
12
11
11
11
25
1964
Married Couple With No Dependents
vit1a StaDtlard. 1)o411C1;101&
.
.
Income
(Wages & Salaries)
$
1,000
1,500
2,000
3,000
4,000
5,000
6,000
1,500
10,000
12,500
15,000
11,500
20,000
Present tax
0
$ 30
120
300
480
660
844
1,141
1,636
2,218
2,960
3,110
4,532
1964 Tax
·•
·
Tax cut
··•
-
~ Tax cut
-
0
0
$ 64
226
395
554
120
990
1,440
2,021
2,636
3,311
4,049
$
30
56
74
85
106
124
151
196
251
324
399
483
1~
47
25
18
16
15
13
12
11
11
11
11
2S'
1964
Single Taxpayer,
with Standard Deduction
Income
(Wages & Salaries)
$
1,000
1,500
2,000
3,000
4,000
5,000
6,000
1,500
10,000
12,500
15,000
11,500
20,000
Present tax
.
60
150
240
422
620
818
1,048
1,405
2,096
2,982
4,002
5,153
6,412
$
··•
·
1964 Tax
·
··•
·
Tax cut
$ 16
$ 44
97
180
360
540
120
928
1,251
1,812
2,666
3,565
4,569
5,690
53
60
62
80
98
120
154
224
316
431
584
122
·•
·•
·
~
Tax
cut
73~
35
25
15
13
12
11
11
11
11
11
11
11
-
TREASURY DEPARTMENT
2!
February 7, 1964
IMMEDIATE RELEASE
1964r1965 GAX
R~UCTI0'
,SCamDULES FOR INDIV1DUALS
~
The Treasury released today the attached tables showing the
income tax cuts which individuals would receive as a result of
the tax bill.
Tables 1 through 4 show the tax reductions that would be
effective in 1964.
Table A through D show the tax reductions that would become
effective in 1965.
The tables compare the lower taxes with present taxes at
various income levels and show the dollar and percentage tax
reduction for:
single taxpayers with standard deduction,
couple with no dependents with standard deduction, married
marr~d
coup~
with two dependents with standard deduction and married couple
with two dependents with typical average itemized deduction.
000
D-1125
TREASURY DEPARTMENT
February 7, 1964
IMMEDIATE RELEASE
1964-1965 TAX REDUCTION SCHEDULES FOR INDIVIDUALS
The Treasury released today the attached tables showing the
income tax cuts which individuals would receive as a result of
the tax bill.
Tables 1 through 4 show the tax reductions that would be
effective in 1964.
Table A through D show the tax reductions that would become
effective in 1965.
The tables compare the lower taxes with present taxes at
various income levels and show the dollar and percentage tax
reduction for:
single taxpayers with standard deduction, married
couple with no dependents with standard deduction, married couple
with two dependents with standard deduction and married couple
with two dependents with typical average itemized deduction.
000
D-1125
2~
Single Taxpayer,
with Standard Deduction
Incoae
(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
1964 Tax
$ 16
97
180
360
540
720
928
1,251
1,872
2,666
3,565
4,569
5,690
Tax cut
$ 44
53
60
62
80
98
120
154
224
316
437
584
722
'10 Ta.x cut
73;'
35
25
15
13
12
11
11
11
11
11
11
11
1964
Married Couple with fto Dependents
Wi~ stallard. De411CUe.
..
Income
~W!Ses & 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
:
0
$ 30
120
300
480
660
844
1,141
1,636
2,278
2,960
3,710
4,532
·••
·
1964 Tax
0
0
$ 64
226
395
554
720
990
1,440
2,021
2,636
3,311
4,049
·•
·
··
Tax cut
$
is
30
56
74
85
106
124
151
196
257
324
399
483
•
••
·
•
:
-
~ Tax cut
-
1~
47
25
18
16
15
13
12
11
11
11
11
e 3
~,I
,~
v
,
1964
Married Couple with Two Dependents,
witil staDCJ.a.N Bed_tion
Incoae
(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
0
0
0
$ 60
240
420
600
877
1,372
1,966
2,616
3,350
4,124
·:•
·
1964
'.rax
0
0
0
0
$ 160
325
500
750
1,200
1,739
2,326
2,987
3,683
·•
·••
Tax cut
$ 60
80
95
100
127
172
227
290
363
441
·••
··•
~
Tax cut
1~
33
23
17
14
13
12
11
11
11
Married Couple with Two Dependents,
with Typical Average Itemized Deductions
Inc~
Present tax
.
1964 Tax
(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
1I
$ 300
456
720
1,196
1,664
2,213
2,172
3,410
4,821
6,420
10,188
14,576
24,952
36,720
$ 245
317
618
1,051
1,417
1,976
2,483
3,057
4,332
5,769
9,078
13,013
22,484
33,107
.
Tax cut
$ 55
79
102
145
187
237
289
353
489
651
1,110
1,563
2,468
3,613
·
·
·
~ Tax c:ut
1~
17
14
12
11
11
10
10
10
10
11
11
10
10
Some of the irregularity in progression of percentages is due to rounding.
Table ]\
1965
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
1~22
620
818
1,048
1,405
2,096
2,982
4,002
5,153
6,412
New Tax
14
85
161
329
500
671
866
1,168
1,742
2,478
3,334
4,291
5,350
$
Tax Cut
46
65
79
93
120
147
182
237
354
50 ll
668
862
1,062
$
~ Tax Cut
77~
43
33
22
19
18
17
17
17
17
17
17
17
TABLE .It
1965
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
0
30
$
120
300
480
660
844
1,141
1,636
2,278
2,960
3,710
4,532
New Tax
0
0
56
200
354
501
658
915
1,342
1,886
2,460
3,085
3,764
Tax Cut
0
$ 30
64
100
126
159
lH6
226
294
392
500
625
768
% Tax Cut
0%
10C
53
33
26
24
22
20
18
17
17
17
17
'.J
r)
'..J •
TABLE
~C
1965
Married Couple with Two Dependents,
with Standard Deductions
Income
::!.ges & salaries)
Present Tax
$ 1,000
0
0
0
60
$
240
420
600
877
1,372
1,966
2,616
3,350
4,124
1,500
2,000
3,000
4,000
5,000
6,000
7,500
10,000
] 2, 500
15,000
17,500
20,000
New Tax
Tax Cut
10 Tax Cut
0
0
0
0
$ 140
290
$
60
100
130
450
150
686
191
258
1,114
1,622
2,172
2,785
3,428
344
444
565
696
10010
42
31
25
22
19
17
17
17
17
D
TABLE
1965
Married Couple wIth" Two 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
$ 300
456
720
1,196
+,664
2,213
2,772
3,410
4,821
6,420
10,188
14,576
24,952
36,720
Tax Cut
New Tax
$ 218
338
561
973
1,377
1,844
2,318
2,850
4,024
5,367
8,525
12,248
21,168
31,178
82
118
159
223
287
369
454
560
797
1,053
1,663
2,328
3,784
5,542
$
~, Tax Cut
27i
26
22
19
11
11
16
16
16
16
16
16
15
15
-
TREASURY DEPARTMENT
Washington
REMARKS BY MISS EVA ADAMS
DIRECTOR OF THE MINT
PHILADELPHIA, PENNSv,LVANIA
TUESDAY, FEBRUARY 11, 1964
11:00 A.M.
After President Kennedy's tragic death, thousands of Americans
wrote to President Johnson, to the Secretary of the Treasury, and
to the Director of the Mint, recommending that the portrait of
John F. Kennedy be placed on a United States coin. President
Johnson subsequently asked Congress for legislation authorizing the
Treasury Department to mint new fifty-cent pieces with the likeness
of the late President. Congress gave its approval and President
Johnson signed the bill on December 30, 1963.
Today, we strike the first of the John Fitzgerald Kennedy
half-dollars to be used for general circulation purposes. Thus,
the late President joins the list of his illustrious predecessors
Nhose portraits appear on our coins for regular use -- Washington,
Jefferson, Lincoln, and Franklin Roosevelt.
No higher honor could come to me than this opportunity to
)reside over the first striking of the John Fitzgerald Kennedy
lalf-dollar, for I know that in history he will take his place with
~he other great presidents who appear on our coins.
With me in Philadelphia are Mr. Robert W. Wallace, Assistant
iecretary of the Treasury, Mr. Michael Sura, Superintendent of the
>hiladelphia Mint, and Mr. Gilroy Roberts, Chief Sculptor of the
lint, and Mr. Frank Gasparro, his Assistant. Mr. Roberts and
Ir. Gasparro designed the new half-dollar.
Standing by at the Denver Mint we are honored to have the
[onorable Byron G. Rogers, Congressman from the first district of
:olorado, Mr. Frederick W. Tate, Assistant Director of the Mint,
:nd Mrs. Fern Miller, the Superintendent there.
Now we are ready to strike the first coins and I would like
o ask Secretary Wallace and Congressman Rogers to start the stamping
resses on my signal.
- 2 -
Are you ready gentlemen? ----- Please press the button and
start the presses.
The first coins struck in Philadelphia and Denver will be
sent to the White House, and President Johnson will present them
to Mrs. Jacqueline Kennedy and to Caroline and John Kennedy.
During 1964 the Mint will produce 90,000,000 of the Kennedy
half-dollars. When 26,000,000 of that number have been made, they
will be distributed to banks throughout the country and released
to the public at face value in late March or early April.
Thereafter, the new coins will be placed in circulation on a
continuous basis as they are produced at the Mints. By the end
of the year, almost all of the 90,000,000 will be in circulation.
Congressman Rogers, I want to thank you for being present
at the Denver Mint and for participating in the ceremony today.
I am also grateful to Mrs. Miller and Mr. Tate for their
assistance.
Mr. Wallace, as the Assistant Secretary of the Treasury who
has general supervision over the Mint we appreciate your coming
to Philadelphia for this occasion. And my thanks to Superintendent
Sura and Mr. Roberts and Mr. Gasparro.
Goodbye from Philadelphia.
000
3~
REASURY DEPARTMENT
February 7, 1964
t IMMEDIATE RELEASE
PRELIMINARY RESULTS OF TREASURY' S CURRENT EXCHAI«lE OF.F'.mING
Preliminary figures show that about $7,989 million, or 95.4~, of Treasury
-tif'1cates of' indebtedness and bonds maturing February 15, 1964, aggregating
,375 million, were exchanged for the two new issues included in the current exLDge offering.
About $386 million, or 4.6~, of' the two maturing issues remain
• cash redemption.
Of' the maturing securities held outside the Federal Reserve Banks and GovernIt accounts, 8.4~ were not exchanged.
Details of the exchange are as follows:
[GIBLE FOR EXCHANGE
EXCHANGED FOR
4~ Notes
3-778~ Notes
due 8/13/65
due 8/15/66
Amount
$1,073
$6,602
$139
666
721
1,387
247
$6,195
$1,794
$7,989
$386
Amount
./4~ Ctfa.
$6,741
$5,529
1,634
$8,375
Total
UNEXCHANGED
Total
:urity
Bonds
(in millions)
=
~RIBmS
lera1 Reserve Banks
md Govt. accounts
. others
Total
!
-
$4,014
2,181
1,794
3,975
$6,195
$1,794
$7,989
$4,014
$
Final figures regarding the exchange will be announced ai'ter final reports
received from the Federal Reserve Banks.
0-1126
36
1&11 of ....
m
~, of 9l-cl1ll biU. h1.1 tor at. \be low ".1_ . . • •••~
01 tbI ___ of lS2-d&y bUla bid .for at. \be l~ pr1ee _
....',..d
fOrAl. H;Jl!:$3 At,LF,:,
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26,611,000 2
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178,Sn,0G0
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16,o&),~
18J.UZ&00I
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1nel.... tft6,lll.OOO 11Oftoapet.1t.1ve w:1clera e.coeI..~d &t ~ ........ pri~ t! ".I
I8e1__ ~.l77,OOO rtOnOJIIpllt1Uw trende.ra ac~?t.ed at \be .,..a.gwt pftt6 et 9&~
.
'lIa • 00QpCIft la... or \he s.- ~ &nO f~ u~ ... _~ ......... 'he ...~- Dilla .w.c:t ~ y18104 of 3.6).k, f o r " n.-, Wla, aM ).W~, t.
le2-4l¥ billa. In'-reat rrdAa ;}f1 M.llti «J"IIJI (,~ot..' 1D tea. . , .... cl1~ iii
\he NhIII ftla-"d to \be ftU>e ~t. of 1.be btU. pa,rMJ.e at. ......" ra ....'U
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'II' ., ..,. ••
TREASURY DEPARTMENT
:LEASE A. M. NEWSPAPERS,
il, February il, 1964.
RESULTS OF TREASURY I S WEEKLY BILL OFFERING
~he
Treasury Department announced last evening that the tenders for two series of
bills, one series to be an additional issue of the bills dated Nov~mber 14, 1963,
1e other series to be dated February 13, 1964, which were offered on February 5,
)pened at the Federal tteserve Banks on February 10. Tenders were invited for
),000,000, or thereabouts, of 91-day bills and for $900,000,000, or thereabouts,
~-day bills. The detRils of the two series are as follows:
OF ACCEPTED
91-~~y Treasury bills
IB2-rlay Treasury bills
~ITIVE BI:8S:
___~at':U'ing May 14, 1964
maturing August 13, 1964
Approx. Equiv.
Approx. Equiv.
Price
Annual Rate
Price
Annual Rate
-Iigh
99.115
3.501''b
98.166
3.628%
JOW
3.667%
99.104
98.146
3.545%
\.verage
98.150
99.105
3.5hO%
3.660%
~
·
Y
~3%
~9%
Y
of the amount of 9l-day bills bid for at the low price was accepted
of the amount of 182-day bills bid for at the low price was accepted
TENDERS APPLIED FOR A:ND ACCEPTED 3Y FEDERAL RESERVE DISTRICTS:
iriot
~on
York
tadelphia
reI and
wond
mta
cago
iLonis
leapolis
las City
~as
Francisco
TCYl'ALS
AEElie<!. ::;'or
$
6U,968,oOO
1,617,710,000
29,864,000
33,h31,000
14,039,000
37,590,000
225,510,000
)4,925,000
25,742,000
34,099,000
45,791,000
300z731z000
$2,J-J.6h,hoo,000
Aoc~J2"~ed
$
38,268,000
657,1.+90,000
14,864,000
32,oh7,000
14,039,000
33,535,000
144,520,000
28,611,000
16,572,000
31,879,000
36,221,000
254,!3262000
$1,302,372,000
Applied For
$ 10,593,000
1,247,100,000
8,001,000
39,614,000
·
2,831,000
·
16,683,000
178,592,000
9,799,000
7,155,000
12,257,000
10,606,000
183,717z000
~ $1,726,948,000
·
·
AooeEted
$ 5,593,000
606,500,000
3,001,000
34,564,000
2,831,000
16,683,000
82,1)22,000
8,294,000
5,645,000
12,257,000
8,606,000
1]) ~z!.t 27 z 000
$900,923,000
rd
ludes $266,311,000 noncompetitive tenders accepted at the average price of 99.105
ludes $66,177,000 noncompetitive tenders accepted at the average price of 98.150
a coupon issue of the same length and for the same amount invested, the return on
hese bills would provide yields of 3.63::~, for the 9l-day bills, and 3. 797~, for the
82-day bills. Interest rates on bills are quoted in terms of bank discount with
he return related to the f9_ce amount of the bills payable at maturity rather than
,he amount invested .:md their lenGth in actual number of days related to a 360-day
-ear. In contrast, yields on certificates, notes, and bonds are computed in terms
f interest on the amount inyested, cmd relate the number of days remaining in an
nterest payment. :period to ~he actual number of days in the peri3d, with semiannual
ompounding i f more than one coupon period is involved.
D-1127
TREASURY DEPARTMENT
Washington
IR RELEASE:
ON DEL IVERY
REMARKS OF THE HONORABLE DOUGLAS DILLON
SECRETARY OF THE TREASURY
BEFORE A JOINT CONFERENCE OF INTERNAL REVENUE SERVICE
FIELD AND NATIONAL OFFICE OFfICIALS,
AUDITORIUM, NATURAL HISTORY BUILDING, SMITHSONIAN INSTITUTION,
WASHINGTON, D.C., TUESDAY, FEBRUARY 11, 1964,
9:00 A.M., EST
I'm happy to join you once again during the Internal Revenue
rvice's annual conference in Washington.
The 1962 Revenue Act included a number of improvements in tax
uity and in closing loopholes that had a marked effect on your
rk. Your capacity to adjust to change will be challenged even
're strenuously this year by the major tax bill now before the
ngress. That bill embodies far-reaching changes: elimination of
e dividend credit; disallowance of deductions for certain state
d local taxes; curtailment of the exclusion for sick pay, to
ntion a few.
But the major change is the substantial rate
duction affecting all taxpayers and all segments of our economy.
The tax bill, as President Johnson has stressed, is the most
portant single domestic economic measure of the last 15 years.
on it hinges a good part of the solution to nearly every major
onomic problem confronting this country, including the need to
ovide greater opportunities for our less-privileged citizens.
Our concern for human rights goes back to the first days of
is Administration. President Johnson has been in the forefront
the drive for civil rights, and progress throughout the
vernment has been significant. Progress in the Treasury has been
ry heartening, and this has been due in no small measure to what
s been happening in the Revenue Service.
Appointments in Revenue at the professional level have increased
the South over the past year from 11 to 22. Albuquerque, Austin,
lahoma City, Birmingham, Jacksonville, and Louisville, have been
jed to the list of offices that have Negroes as Revenue Agents,
venue Officers, and Tax Technicians.
In Atlanta, where no Negro
j previously been employed in the Service in a white collar job,
11 ? S<
- 2 Negro Tax Technicians and Punch Card Operators are on duty. In
,3, you increased Negro employment, in grades GS-5 through 11,
1m 1413 to 1612, or 14 percent; in grades 12 through 18, from
to 106, or 51 percent.
You and I know that success in this area has been gained not
pronouncements -- however well intentioned -- but by action.
I I can assure you that Treasury has no policy of discrimination-in'erse. Civil Service rules and regulations must be strictly
:erved, nor can there by any compromise with merit principles.
: we do have an obligation to seek out qualified applicants,
:ourage training in the skills we need, offer retraining
lortunities, and use our minority group employees at their
.lest capacities.
Another major administration program in which Internal Revenue
an important role is the Alliance for Progress in Latin
'rica. We are deeply committed to that program and to the
ective of raising the level of tax administration in Latin America.
Since June 1962, Internal Revenue has sent 48 key employees
rseas to assist other governments. While principle emphasis
been on Latin America, we have also rendered assistance to
key, Korea, and the Philippines. We anticipate this need will
,was additional requests are received from countries around the
ld.
I regard the Foreign Tax Assistance Program as of great
,ortance to the United States. You have a small Foreign Tax
istance Staff here, ably headed by Harold Moss. But, as directors
the Service's field organizations, it is up to you to identify and
ommend to the Staff people who might be useful in this critical
'gram. I know it will continue to have your support.
When I became Secretary in 1961, the Service had 53,000
,loyees. Now it has 61,000. I believe this increase in staff
been fully justified. We have, as we all know so well, a
stant growth in population and in the economy -- with a
responding growth in the tax workload.
On the other hand, it is important to recognize the fact that we
not rely solely on additional manpower to answer the problems posed
the Service's ever increasing workload. The Service must also find,
hin itself, ways and means of meeting its growing responsibilities.
4' .
\..,
- 3 ltinued and heavy stress must be placed on improvements in
)ductivity.
I am well aware of the impressive gains you have
Ie over the years in the utilization of your human resources. These
Lns must continue if we are to meet our responsibilities.
In this
)ortant area we in Washington are particularly dependent on you
) carry the burden of operating our field offices throughout the
Intry. We look to each and everyone of you to make every possible
)nomy in the use of manpower and to give us your ideas so that
Jings developed in one district can promptly be made nationwide.
Commissioner Caplin intends to discuss with you a subject I
1sider of critical importance to tax administration:
the integrity
j public image of the Internal Revenue Service.
Although the recent arrests of Revenue employees and practitioners
New York points up the moral decay in certain elements of our
:iety, it also forcefully drives home the necessity for an
solute standard of morality in the public service.
Integrity in tax administration is something we tend to take for
anted in this country.
But the price of integrity is eternal
gi1ance. We must, therefore, always insist on absolute honesty
the part of our personnel. That is why I have given Commissioner
p1in my full support in this integrity program.
I think it's very fortunate that you uncovered and exposed
e corruption in New York yourselves. This attests to the
termination of your top officials and the efficiency of your
spection Service.
I hope this lesson will not be lost on those who would subvert
e tax system, nor on those who are responsible for directing the
rk of others. This is a deadly serious matter.
If venality or
shonesty ever gets a foothold in the Revenue Service, the damage
the country would be beyond calculation.
I'm sure you realize that the taxpayer's op1n10n is formed,
r good or for ill, on the basis of his treatment at the hands
individual Internal Revenue Service employees. What you or I
, or what we prescribe, makes very little impression on the
payer if it does not square with his experience.
Surely a taxpayer doesn't expect to be charmed or to be
oled by the Service. But he does -- and should -- expect to
treated with civility.
- 4 Unfortunately, he doesn't always receive it. I continue
see editorials and letters to the editor in which taxpayers
terly complain about lack of courtesy. This suggests to me that
e of our people may be going out of their way to be antagonistic.
now you are all sensitive to this problem, Commissioner Caplin
ecially so, but I cannot overstress the damage this sort of
ng does.
I do hope you will take a personal interest in making your
pIe aware of the importance of courtesy in taxpayer contacts.
tax system just can't work smoothly if we permit abrasiveness
get into the machinery.
With that, let me acknowledge your own courtesy in following
remarks so closely, and let me wish you ev'ery success for the
lr ahead.
000
TREASURY DEPARTMENT
February 11,1964
FOR IMMEDIATE RELEASE
............
TREASURY MARKET TRANSACTIONS IN JANUARY
During January 1964, market transactions in
direct and guaranteed securities of the government for Treasury investment and other accounts
resulted in net purchases by the Treasury Department of $148,724,150.00.
000
D-1129
fREASURY DEPARTMENT
h
February 11,1964
FOR IMMEDIATE RELEASE
TREASURY MARKET TRANSACTIONS IN JANUARY
During January 1964, market transactions in
direct and guaranteed securities of the government for Treasury investment and other accounts
resulted in net purchases by the Treasury Department of $148,724,150 00.
0
000
D-1129
- 3 mtUXXXJlllOElX IX UIX
and exchange tenders will receive equal treatment.
Cash adjustments vill be ...
for differences between the par value of maturing bills accepted in exchange 1114
the issue price of the new bills.
The income derived from Treasury bills, whether interest or gain trOll the q
or other disposition of the bills, does not have any exemption, as such, and 10'1
trom the sale or other disposition of Treasury bills does not have any speciu
treatment, as such, under the Internal Revenue Code of 1954.
The bills are BUbj~
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 intereat
thereof by any state, or any of the possessions of the United states, or by any
local taxing authority.
For purposes of taxation the amount of discount at which
Treasury bills are originally sold by the United states is considered to be in·
terest.
Under Sections 454 (b) and 1221 (5) of the Internal Revenue Code of 1954
the amount of discount at which bills issued hereunder are sold is not considered
to accrue until such bills are sold, redeemed or otherwise disposed of, and such
bills are excluded from consideration as capital assets.
Accordingly, the owner
of Treasury bills (other than life insurance companies) issued hereunder need in·
clude in his income tax return only the difference between the price paid
for8~
bills, whether on original issue or on subsequent purchase, and the amount actU&1ll
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, ptescribe the tenns of the Treasury bills and govern the conditions of their.lsS118·
Copies of the circular may be obtained from any Federal Reserve Bank or Branch•.
- 2 -
decimals, e. g., 99.925.
Fractions m~ 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 custaen
Others thaD
provided the names of the customers are set forth in such tenders.
banking institutions will not be pennitted to Bubmit 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.
Dmnediately 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.
~
. 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 sh&ll be
final.
Subject to these reservations, noncompetitive tenders for
less for the additional bills dated
ing until maturity date on
$10000 or less for the
November 21
May 21, 1964
(Cfij
1963
, (91
$2~O
iHi
or
days rem&iD'
) and noncompetitive tenders
tor
Wi
182 -day bills without stated price from anyone
Wi
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 Reae11l
Banks on
February 20, 1964
(Ciil
, in cash or other immediately available funds or
in a like face amount of Treasury bills maturing _ ....F..e.lllOba;rulAla...w~~:..a..-=19~6111.,;4=--_.
cash
JIIDXJE< -11M n IU
TREASURY DEPARTMENT
Washington
February ll, 1964
(
TREASURY'S WEEKLY BILL OFFERING
The Treasury Department, by this public notice, invites tenders for two ser1.
of Treasury bills to the aggregate amount of $ 2,100taO, 000 , or thereabouts, tor
February 20, 1964, in the 8I0.Il
cash and in exchange for Treasury bills maturing
of $
2,102~0,000
91
til
, as follows:
February 20, 1964
-day bills (to maturity date) to be issued
W
.
,
*'*
in the amount of $ 1,200(!J.0 , 000 , or thereabouts, representing an additional amount of bills dated
November 21, 1963
,
(CiJ
and to mature
, originally issued in the
May 21, 1964
((if
amount of $ 800,300,000
, the additional and original bills
~
to be freely interchangeable.
182 -day bills, for $ 900,000,000
6W
February 20, 1964
,or thereabouts, to be dated
~
, and to mature
6d&)C
AUgllst 20., 1964
fdr4
The bills of both series will be issued on a discount basis under competltl,..
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
0nl11
and in denominations of $1,000, $5,000, $10,000, $50,000, $100,000, $500,000 ~
$1,000,000 (maturity value).
'renders will be received at Federal Reserve Banks and Branches up to the
clOSing hour, one-thirty p.m., Eastern Standard time,
Monday, February 17,19!,
6&&)C
'!'enders will not be received at the Treasury Department, Washington.
E&ch tender
must be for an even multiple of $1,000, and in the case of competitive tender8~
price offered must be expressed on the basis of 100, with not more than three
I
I
/
. .)
') (
..
-
"
TREASURY DEPARTMENT
February 11, 1964
R IMMEDIATE 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
,100,000,000,or thereabouts, for cash and in exchange for
~asury bills maturing February 20,1964, in the amount of
,102,390,000, as follows:
91-day bills (to maturity date) to be issued February 20, 1964,
the amount of $ 1,200,000,000, or thereabouts, representing an
litional amount of bills dated November 21,1963, and to
;ure May 21, 1964,
originally issued in the amount of
')0,300,000, the additional and original bills to be free ly
:;erchangeable.
182-day bills, for $900,000,000,
or thereabouts, to be dated
Jruary 20,1964, and to mature August 20, 1964.
The bills of both series will be issued on a discount basis under
and noncompetitive bidding as hereinafter provided, and at
;urity their face amount will be payable without interest. They
1 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
lturi ty value).
~etitive
Tenders will be received at Federal Reserve Bank~ and Branches
to the closing hour, one-thirty p.m., Eastern Standard
ie, Monday, February 17, 1964.
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
ders. Others than banking institutions will not be permitted to
~it 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
n 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 company.
-1130
- 2 Immediately after the closing hour, tenders will be opened at
the Federal Reserve Banks and Branches, followin~ which public
announcement will be made by the Treasury Depart.roen t 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
~ovember 21, 1963,( 9~days remaining until maturit¥ date on
Nav 21 1964)
and noncompetitive tenders for $100,000
or- les!! 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 February 20, 1964,
in cash or other immediately available funds or in a like face
amount of Treasury bills maturing february 20,1964. Cash and
exchange tenders will receive equal treatment. Cash adjustments
will be made for differences between the par value of maturing
bills accepted in exchange and the issue price of the new bills.
The income derived from Treasury bills, whether interest or
gain from the sale or other disposition of the bills, does not have
any exemption, as such, and loss from the sale or other disposition
of Treasury bills does not have any special treatment, as such,
under the Internal Revenue Code of 1954. The bills are subject to
estate, inheritance, gift or other excise taxes, whether Federal or
State, but are exempt from all taxation now or hereafter imposed on
the principal or interest thereof by any State, or any of the
possessions of the United States, or by any local taxing authority.
For purposes of taxation the amount of discount at which Treasury
bills are originally sold by the United States is considered to be
interest. Under Sections 454 (b) and 1221 (5) of the Internal
Revenue Code of 1954 the amount of discount at which bills issued
hereunder are sold is not considered to accrue until such bills are
sold, redeemed or otherwise disposed of, and such bills are excluded
from consideration as capital assets. Accordingly, the owner of
Treasury bills (other than life insurance companies) issued hereunder
need include in his income tax return only the difference between
the price paid for such bills, whether on original issue or on
subsequent purchase, and the amount actually received either upon
sale or redemption at maturity during the taxable year for which the
return is made, as ordinary gain or loss.
Treasury Department Circular No. 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 froll
any Federal Reserve Bank or Branch.
000
4~
STATUTORY DEBT LIMITATION
January
As of
Washington, _
31, 1964
Feb. 12, l~
S,., I ill" 21 of s'Tond I. i berth Bond Act, as amended, provides that the face amount of obi i~ations i sS\lcd under aUl
.
.
. I an d'Interest b y t h e U'
...
( ex .... pl SUI h ~u ""rill •
Ihal A, I, OIl" Ih . . .11"(' amount 0 f 0 I I~atlons
~uarantee,I
as to'
prtnclpa
nue ;-.tates
f
ohli..:alion., Ia .. ma): he h .. ld by !he Secrelary
the Treasury), :'Shall.not exceed in
S2R,),000,()()() 000
II.S.< ., title H, seC'. '''7b), outstanding at anyone lime. for purposes of thiS secuon the curren I rI·,I"mplill" . I lit
any
i.,sued on a discount basis which is redeemable prior to maturity at the option of the holdn .. h,,11 11l'
no; it., (.1(' amount." The Act of November 26 1963 (P,L. 8R-187 8Rth Congress) provides that
the I" rind
\)t',cmh"r 1,1')(,', and
on June '\0,1<)64, the above limitation shall be temporarily increased to S.\09,()()O,llIIO non
of \il!i,lIion'i in the timing of revenue receipts, the public debt limit as increased by the
sentenc .. i.,
l
o~
~(), I"""~
Ilhli~ali"n
the.~.g~re6ate
1.\<I~7;'"
"'I:,,,
durin~
precedin~
endin~
h,.\~,~\h.~
It,n, ..
IUI;hl'r'i"'~~:~
thrllujo(h Junt' 29, 1<)61, by S6,OOO,OOO,000.
Thl' following table shows the face amount of obi igation s out standi ng and thc face amount which can Sli \I hl' i "U'J
this limitarion:
I
COO J
TOlal fact' amount that may be outstanding oit anyone time
Outstanding obli~ari(lns issued under Second Liberty t\ond Act, as amended
$315 ,
Intefest-bearing:
Trt'asury bills
Certificates of indebtedness
Treasury notes _ _ _ _ _ _ _ _ _ __
$52,547,142,000
10,939,435,000
56,443,694,000
Hondo; --
TCf'asury
*Savings (Current redemption value) - lIniH·d States Retirement Plan bonds nepo si t ary
__
R. E. A. series
Inveslrnent series ______ .. _ _ _ _
ooo,('Quo~)
$119,930,271,000
88,6.58,359,650
48,925,252,887
4,964,815
97,205,000
25,61.9,000
3,649,088,000
<:ertificates of Indebtl'dness
345,000,000
30,120,482
Foreign serit's
Foreign < 'urrency sefies
Treasury notes --Foreign s('ries .. _____________
1W,233,423
Treasury bond .. -
Special Funds Certificates of indl'btedness ________
Treasury notes _ _ _ _ _ _ _ _ __
Treasury bonds _ _ _ __
1,265,569,131
.5,012,568
730,215,226
5,012,568
20,000,000
Foreign Curr .. ncv series
Treasury certificates _ _ _ _ __
Treasury bonds _ _ _ _ _ _ _ _ _ _ __
5,820,630,.539
2,191,682,000
33,904,919,000
Total interest-bearing
Matured, interest-ceased _ _ _ _ _ _ _ _ _ _ __
20,000,000
41,917,2)1,539
304,498,;73,;90
292,002,061
Bearing no interest:
52,9.54,589
690,293
3,036,000,000
164,261,000
125,000,000
6,000,000
37,189,267
(Inited Stat(·s Savings Stamps
Excess profits tax refund bonds
Internat'l Monetary Fund notes
Internat'l De\'elop. Ass'l\. notes _ _ __
Inter-American Ikvc\0p, Bank notes
United Nations Children's Fund bonds
United Nations Special Fund honds
Total
3,422,09.5,149
308,212,610,800
Guaranteed obli/>:ations (not held by Treasury):
Interest-hearin/>: :
7.55,442,150
6,494,32.5
Debentures: F.B.A. & D( Stad. Bds.
761,936,475
Matured, interest-ceased
Grand total outstandin/>: _ _ _ _ _ _ _ _ _ _ _ __
Balance face amount of obli/>:ations issuable under above authority
~8 974 &J7
02 392
RECONCILEMENT WITH TABLE III OF THE DAILY STATEMENT OF THE UNITED STATES TREASURY
As of January
31, 1964
Gross public debt this date
Guaranteed obligations not owned by Treasury _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ __
Total gross public debt and guaranteed obligations
Deduct debt not subject
D-113 fo tal
(0
statutorv limitation
------------
~
---
debt subject to limitation - - - - - - - - - - - - - - - - - . - . . . - - - - - - - - -
308,577'~
761,9~
4 (~
STATUTORY DEBT LIMITATION
_Jlll'l¥5U7_2~)..9~
As of
Washin~ton. _Feb. ~1~. 1964
Seclion 21 of -';('('ond I.ihert}' nnnd Act, I\~ amended, pr,'vide'> that Ihl' face flmounl of ohligations issued under authority of
~n, and Ihe f"n' amounl of ohli,':ations ~uarant('('d a ... to principal lind intere<;t hy th(' United States (except such ~uaranlecd
alions as ma}: 1)(' h('ld hy !h~ Secretary {)~ the Tr('u"'lHvl, "Shall not ('xe"(',1 in the. a~~regate S2R'i,OOO,OOOjOOO (Act of June
.t)'i'0j II.S.(., title ~l. sec.C;,hl, out"t.lndln,': at anY nl\(' time.
ror [1urpo ... l'S of thl" "enton the current re, emption valliI' of
lhli,l:Btion i!'oo<'ul'd on a di<;""tnl ha ... i .. which is redecmahll' prinr to maturity at the option of the holder <;hall he con .... idl'red
s fan' amount." Thl' Act of Nnv('mher 21> I ')(, ~ (P. L. RR- I H7 HAlh ( on,':re <;s) provi dc s that durin,l( Ihe puiod he ~i nn i n,l( Oil
mht'! 1, IC)(,\ and endin~ nn 'une ~O, l'l(,·!, Ihe ;Ibove limitation ",hall he I('mporarily increased to S~09,OOO,OO(),()O(). Ikcall ... e
Itiation'" in Ihe timin,l: of r('ventl<' reeeipt~, the pllhlic d('hl limit a ... increas('d hy th,' preceding <;('ntenee i .. further increa<;('d
,':h June 29, I%tl, hy $(,.ooo,oon.O()o.
The following tahle sh(,w~ th,· face amOllnt of .. bli,l:illion<; olltSl.lndin,l: and Ihe fate amount which can slill he is,",ued under
imitalion:
$315,000,000,000
f face amounl thaI may be ollt"tandin,': .It nny on,' limc
stahdin,': ohli,l(alions issued under S"cond Libertv Ilon<1 Act, as amelld"d
nleresl-hearin,': :
Treasury hill,
$52,547,142,000
10,939,435,000
56,443,694,000
( erfificat"<' of indl'otedne<;s
frl'ao;ury not('<; ___________ _
lI .. nd ...
Tr('.I<;ury _________ _
88,658,359,650
48,925,252,887
4,964,815
97,205,000
25,619,000
3,649,088,000
*Savin/:s ( llrrt'nl r .. d('m[1lip" valli .. )
Ilnil .. d Sla!l'S RClirem('n! !,lan o"nd ...
Ik[1" ... i!.Hv
\{.
~.
A. "erit'"
Invc ... un{'nt "'('ric .... _
( ('rtifi .. ,lI(·s of
Ind"oln!'"'~'''
-
345,000,000
.30,120,482
}'Pfci,gn ",('rlC'"
I'Pf{'ign ( lIrrt'n<.
rrt"''''llf\
$119,930,271,000
Y .... ('flc ...
I1llfC,
Ito, 233,423
l'Of('i,c1l . . (·ric ....
rr(';I"urr bo"d ...
I·l)f~·i.c:n (tJrr('nc\'
I f(' •• 'un
l Cftifi<
7.30,215,226
5,012,568
20,000,000
"'('Tl("
.1fe ....
_~_
1,265,569,131
5,012,568
20,000,000
SP'" i.11 Fund" -
5,820,6)0,539
2,191,682,000
33,904,919,000
( n!ifi.ale<; of ind('o!('dn ..... ~
Trl'.ll;,Ury notc, _ _ _ _ _
fnral inlC'r""'I-o(,.lring
41,917,231,539
304,498,573,590
292,002,061
LHUft'd, intcr(""'-c('a~('d
~{'arin,g no intt'fl' .... r:
52,954,589
690,293
3,036,000,000
164,261,000
125,000,000
6,000,000
37,189,267
Iiniled "Ial .. " ""\·in,':,, "Iam!,~
I·
Xl ('<',
pr .. f" ... t.IX «·fllnd f,p"d ...
Internal'l \jon(,lary I· lind nOI'"
Inrnnat'l ()evelop. A ... ,,·n. nol .....
!nln-Ameri, an n'·'Tlo!,. /I.ink ""I'· ...
liniled
.~alion
... ( hil.tr<'n', I·"nd !>nn,l ...
\lni!cd Na!ion ... "1"'( ial I lin.! non.!,
r'utal
laran!('ed ooligation<; Inn! h"ld OV -I
3,u22,095,149
368,212,670,800
,,·.I'lIn)·
mert'<,I-n"aring:
\leoentllres: F.II.A.
&. ()(
755,442,150
6,494,325
"'!ad. lid ....
talured, interl'sl-ceasC'd
;rand ((Hal OlltSlandin,l(
761,936,475
____ _
!ncc face amount of ooli,l(arinn ... i""lIa!>!' tinder
<1ho\('
authority __ ._~ __ _
))8,974,to1,275
6,025,392,725
RECONCILEMENT WITH TABLE III OF THE DAIL Y STATEMENT OF THE UNITED STATES TREASURY
/\s of
public dehl this
January )1, ~96q
)08,577,064,810
rlfU£,_
761,936,47~
nleed ohli~alions not owned oy Tr('a ... ury
))9, 339,001, 28
gross puhlic deht and gliarOlnl(·t'd oollg.lIio" ...
'1
364,394,010
deht not "Uhjl'l'I t""ialuto'\' limirali'Hl
:'110
limltalion __
- - - - - - - - - ---- -
---- -------
308, 974, BJ7, 275
- 2 ~
currencies of which the Fund holds less than i::bs normal quota.
The United
States will draw such currencies from the Fund and sell them for dollars to
other members for their use in making repayments to the Fund.
In this way,
other members will be able to continue, in effect, to use their dollar
holdings to settle their obligations to the Fund.
The United States drawing will be made primarily in Deutschemarks and
French francs -- in equal amounts.
A small portion, equivalent to $5.5
million, will, however, be in Italian lire to replace lire sold from existing
Treasury stocks in January to enable Fund members to make several small
repayments to the Fund in lire at that time.
The present drawing does not
relate to any single repayment by another country but is designed. to cover
a number of transactions which are expected to take place in the coming weeks
FOE FFUASr~: A.V. \rE\'1rSPAPEPS
FRIDAY, FFt.<F'FAPY 1hz 196u__
. 1II!'.v...! l' .8Jf[WJ• •li ...111 . . ....-. :,J'.): .1)1 _.- ..
- ). ._-..,. ........,
--~.
1_
-~
- - -... -
-----
.".
~
f.
,
.-,
.
,oJ
.....
- '. .••. ' •
ImWI
..
••
,
.-:s
.~"'It":-
TREASURY ANNOUNCES FIRST U. S. DRAWING FROM IMF
Secretary of the Treasury Douglas Dillon announced today that the
United states has made its first drawing of foreign currencies from the
International Monetary Fund.
The drawing is being made under the standby
agreement for $500 million which was announced by President Kennedy in his
Balance of Payments Nessage last July 18.
The value of the currencies
countries over the past several years have been repaying more dollars to
the International Monetary Fund than the Fund has been paying out in new
drawings.
As a result, the Fund I s holdings of dollars now equal the amount
which the United States has paid into the Fund in dollars as part of its
quota.
At this point, the Fund under its rules can no longer accept dollars
in repayment.
4(""~J(~
Repayment must instead be either in gold or in other
fo!ei~
TREASURY DEPARTMENT
February 13, 1964
FOR RELEASE:
A.M. NEWSPAPERS
FRIDAY, FEBRUARY 14,1964
TREASURY ANNOUNCES FIRST U. S. DRAWING FROM IMF
Secretary of the Treasury Douglas Dillon announced today that
the United States has made its first drawing of foreign currencies
from the International Monetary Fund.
The drawing is being made
under the standby agreement for $500 million which was announced
by President Kennedy in his Balance of Payments Message last
July 18. The value of the currencies drawn is equivalent to
$125 million.
The Secretary said that the drawing was designed to meet a
special situation in the Fund's operations anticipated last July,
and is intended to facilitate repayments by other nations to the
Fund. The Secretary explained that foreign countries over the
past several years have been repaying more dollars to the
International Monetary Fund than the Fund has been paying out in
new drawings.
As a result, the Fund's holdings of dollars now
equal the amount which the United States has paid into the Fund
in dollars as part of its quota. At this point, the Fund under
its rules can no longer accept dollars in repayment. Repayment
must instead be either in gold or in other convertible currencies
of which the Fund holds less than the normal quota.
The United
States will draw such currencies from the Fund and sell them for
dollars to other members for their use in making repayments to the
Fund.
In this way, other members will be able to continue, in
effect, to use their dollar holdings to settle their obligations
to the Fund.
The United States drawing will be made primarily in
Deutschemarks and French francs -- in equal amounts.
A small
portion, equivalent to $5.5 million, will, however, be in
Italian lire to replace lire sold from existing Treasury stocks
in January to enable Fund members to make several small repayments
to the Fund in lire at that time.
The present drawing does not
relate to any single repayment by another country but is designed
to cover a number of transactions which are expected to take
place in the coming weeks.
000
I.
J
EXCERPT FROM INTERNATIONAL MONETARY FUND,
PRESS RELEASE, WASHINGTON, D.C., JULY 18, 1963
"The International Monetary Fund has entered into a stand-by
arrangement that authorizes the United States to draw the
currencies of other members of the Fund up to an amount equal to
$500 million during the next 12 months. The quota of the
United States in the Fund is $4,125 million, of which $1,031
million has been paid in gold. The amount of the stand-by
arrangement represents a little less than half the amount the
United States could draw on a virtually automatic basis under
Fund practice.
"The United States has not previously made use of the Fund's
resources. Drawings of U. S. dollars from the Fund by other
members have amounted to approximately $4.2 billion since the
Fund's operations began in 1947. In recent years, Fund policy
has encouraged drawings in non-dollar currencies and repayments
to the Fund in U. S. dollars. This policy has provided
assistance in financing the U. S. balance of payments deficit.
As a result of repayments, the Fund's dollar holdings are now
almost at the subscription level, which is 75 per cent of quota or
about $3 billion, and the Articles of Agreement prevent repayment
to the Fund with U. S. dollars beyond that level. In these
circumstances the stand-by arrangement, which is available for
general balance of payments needs, is intended to facilitate
repayments by other members. This would be accomplished through
U. S. drawings of other convertible currencies, which would be
sold to Fund members for dollars and used by them to make
repayments to the Fund."
000
TREASURY DEPARTMENT
Background
July 17, 196)
u.s. stand-bY Arrangement with the
International MonetaEY Fund
The United States has just obtained agreement of the International
Monetary Fund (lMF) to a stand-by arrangement in the amount of $500 million for a period of one year, beginning July 22, 1963. Since the amount
requested is well within the U.S gold tranche (of $1,031.25 million) at
the IMF, the proposed arrangement does not raise any problems in relation
to IMF policies on drawings.
The principal use of the stand-by arrangement foreseen by the United
States is for operations to facilitate solution of a technical problem
jointly faced by the Fund, many of its members with drawings outstanding,
and the United States. This is the problem of repurchases at the Fund by
countries which hold their official foreign exchange balances largely or
exclusively in U.S. dollars.
The Articles of Agreement of the Fund prevent the Fund from accepting
holdings of any "currency above 75 per cent of that country's quota except
through the initiative of that country to make a drawing of other currencies.
From the time the IMF first began operations until quite recently, the U.S.
dollar holdings of the Fund were well below 75 per cent of the U.S. quota,
because most drawings (as well as repurchases) at the Fund were in U.S.
dollars and cumulative repurchases did not reach the level of cumulative
drawings. In the past four years, the previous situation for Fund holdings of U.S. dollars has been substantially changed, especially since the
IMF drawing of the eqUivalent of $1.5 billion by the United Kingdom in
August-September 1961. First, the volume of repurchases at the Fund, while
never reaching the cumulative amount of drawings, has been much higher since
1958 than at any time before; a relatively large proportion of these higher
repurchases has continued to be made with U.S. dollars. Second, with the
achievement of convertibility by the main European currencies, a significant portion of new drawings from the Fund have utilized these currencies.
As a result, the Fund's holdings of U.S. dollars have been fairly close to
75 per cent of the U.S. quota since July 1962 and since the end of April
1963 those holdings have been practically at 75 per cent.
For countries holding official reserves in U.S. dollars, this situation presents a difficulty when they wish to make repurchases at the Fund.
The Fund's ability to accept U.S. dollars in repurchase is practically nil
owing to the 75 per cent of quota constraint. Countries wishing to repay
the Fund can offer other convertible currencies or gold to discharge their
repurchase obligations. It is very doubtful that a net transfer of gold
to the Fund is"desirable at present from the viewpoint of the international
payments mechanism as a whole. Also, in order to offer other convertible
currencies in repurchase, the countries concerned often need to undertake
administrative arrangements that are unusual and unfamiliar to them, and
such currencies must usually be purchased (against dollars) at prices
above ~Ar.
(OVER)
-2Under the stand-by arrangement, the United States will be able to
make available to countries wishing to make repurchases from the Fund,
using dollars, a simple and effective facility for obtaining other con.
vertible currencies which the Fund can accept in repurchase. In out.
line, the mechanism will be as follows:
1.
Upon learning that a given Fund member wishes to make a
repurchase, would otherwise use U.S. dollars for the
purpose, and would like to avail itself of this facility,
the Fund staff will contact the U.S. authorities.
2.
For value on the date of the repurchase transaction, the
U.S. will draw other convertible currencies (pursuant to
appropriate conSUltations through the Fund) equivalent to
the value of the repurchase.
3. The U.S. will sell for U.S. dollars, the currencies drawn
from the Fund to the repurchasing member, which will execute
the repurchase by transferring them to the Fund and taking
back the appropriate amount of its own currency. The sale
of other convertible currencies by the U.S. to the repurchasing member is envisaged as being at par.
4.
The net result of the transaction will be that the Fund's
holdings of the other convertible currencies drawn Qy the
u.S. will be the same as before, since they will leave the
Fund and immediately be returned by the repurchasing member.
The Fund's holdings of the repurchasing member's currency
will be reduced and those holdings of U.S. dollars will be
increased by the amount of the transaction.
The stand-by amount of $500 million is calculated to be sufficient
to cover presently foreseeable repurchases, using U.S. dollars as the
starting point, over the coming year. At the same time, the mechanism
described above is to be only a facility to be available to interested
Fund members at their option. Countries will, of course, continue to
have the option, if they choose, to purchase gold from the United States
for making repurchases from the Fund or for any other monetary purpose.
Countries will also continue to have the option of obtaining other convertible currencies for making repurchases from the Fund b,y purchasing
those currencies in the market against dollars or through arrangements
with the central banks concerned, with or without the assistance of the
Federal Reserve Bank of New York.
(J1
N
(..V
00
:-, r:
'-'
-2-
CaTrON WASTES
(In pounds)
COTTON CARD STRIPS made from cotton having a staple of less than 1-3/16 inches in length, COMBER
WASTE, LAP WASTE, SLIVER WASTE, AND ROVING WASTE, WHETHER OR NOT MANUFACTURED OR OTIiERWISE
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 1-3116 inches or more
in staple length in the case of the following countries: United Kingdom, France, Netherlands,
Switzerland, Belgium, Germany, and Italy:
Country of Origin
United Kingdom ••••••••••••
Canada ••••••••••••••••••••
France ...••..••..•..•.••..
India and Pakistan ••••••••
Netherlands •••••••••••••••
Switzerland •••••••••••••••
Belgium ........•.....•.•.•
Japan •.•..•••••••...•.••••
China •••••••••••••••••••••
Egyp t •••••••••••••••••••••
Cuba ••••••••••••••••••••••
Germany ••••••••••••••••.••
Italy •••••••••••••••••••••
Other, including the U. S.
Established
TOTAL QOOTA
Total Imports
Sept. 20, 1963, to
February 10, 1964
4,323,457
239,690
227,420
69,627
68,240
44,388
38,559
341,535
17,322
8,135
6,544
76,329
21,263
5,482,509
11 Included in tot.::l.l imports, column
2.~--
Established
33-1/3% of
Total Quota
Imports
l'
Sept. 20, 19 0J,
to Febru.:lry 10, ] 9()4
719,270
239,690
1,441,152
102,'1.45
1[',7,675
19,284
75,807
55,151
11,249
3L.l, llf 7
33,02::>
59,000
22,747
14,796
12,853
23,957
25,443
7,088
1,327,294
1,599,886
----- -
157,396
-----
The count::ry designations li.sted in this press release .:"ire t::hose 3pecified in l-'residentinl.'rocl.1.m.:J.t:ion
':"'.',')"1 o f '-:;'-',>l:crnhcr ::>, "1939, as modi.fied by the T a r i f f Schedules of the United Stntss.
Sinc" that:
t:Jo.
""n,"-C"">
l \ ... n
n.~""'o("on
<"'£'
CC"''l:''\..:.,\i_"
~CH'T'\t:ri...(:-"$
h"'l.V'"e
be.en
c::h,Cl"nc,?-d..
The
out::rnodc.<..1
n ..,rnCR
nrc
hcl,n~
rnt.;,'.lnrlJd
b~c
IUO"
,t'0
..
'-A.>
co
TREASURY DEPARTMENT
Washington, D. C.
IMMEDIATE RELEASE
~RIDAY,
D-1133
FEBRUARY 14,1964
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 (other than linters) (in pounds)
Cotton under 1-118 inches other than rough or harsh under 3/4'1
I!DPor~S~temb~r~29~_ 1963 - Febru3.rv ] 0 _ 1 qh4
Country of Origin
Egypt and Sudan •••••••••••••
Peru •••••••• ~o • • • • • • • • • • • • • •
India and Pakistan ••••••••••
China •••••.•••••••••••••••••
Mexico ••••••••••••••••••••••
Brazil ••••••••••••••••••••••
Union of Soviet
Socialist Republics •••••••
rgentina •••••••••••••••••••
~
aiti •••••••••••••••••••••••
cuador •••••••••••••••••••••
t~
Established Quota
Imports
783,816
247,952
2,003,483
1,370,791
8,883,259
618,723
Established Quota
Country of Origin
Honduras ••••••••••••••••••••
628,::15
11,294
157,300
Paraguay •••••••.••••••••••••
Colombia ••••••••••••••••••••
Iraq ••••..••••.•.•.•••••••••
8,C83,259
600,000
475,124
5,203
237
9,333
British East Africa •••••••••
Indonesia and Netherlands
New Guinea ••••••••••••••••
y.British W. Indies •••••••••••
Nigeria •••••••••••••••••••••
l/British W. Africa •••••••••.•
Other, including the U.S ••••
Except Barbados, Bermuda, Jamaica, Trinidad, and Tobago.
Except Nigeria and Ghana.
Cotton l-1/8 u or more
Established Yearly Quota - 45,656,420 lbs.
Imports August 1, 1963 -
Fehrl10qz 10» 1964
Staple Length
1-3/8 11 or more
1-5'32
11
39,590,778
1.500.000
B t . 759
or more and under
1.-3'S"
~Tangu:L_)
Imports
Allocation
39,590,778
752
871
124
195
2,240
71,388
21,321
5,377
16,004
Imports
c ,.
V"
I
TREASURY DEPARTMENT
Washington, D. C.
UfomDIATE RELEASE
0-1133
FRIDAY, FEBRUARY 14,1964
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 (other than linters) (in pounds)
Cotton under 1-1/8 inches other than rough or harsh under 3/4/1
lmports_S~J>t!mlJ>er 20" 1963 - FebruarvlO_ lqhL!.
Country of Origin
Egypt and Sudan •••••••••••••
Pens ••••••••••••••••••••••••
India and Pakistane •••••••••
China •••••.•••••••••••••••••
Mexico ••••••••••••••••••••••
Brazil ••••••••••••••••••••••
Union of Soviet
Socialist Republics •••••••
Argentina •••••••••••••••••••
Haiti •••••••••••••••••••••••
Ecuador •••••••••••••••••••••
Established Quota
783,816
247,952
2,003,483
1,370,791
8,883,259
618,723
Imports
628,215
11,294
157,300
8,883,259
600,000
475,124
5,203
237
9,333
Country of Origin
Established Quota
Honduras ••••••••••••••••••••
Paraguay •••••••.••••••••••••
Colombia •••••••••••••••••••.
Iraq ••••.•••••.•••••••••••••
British East Africa •••••••••
Indonesia and Netherlands
New Guinea •••••.••••••••••
YBritish W. Indies •••••••••••
Nigeria •••••••••••••••••••••
2/British W. Africa •••••••••••
- Other, including the U.S ••••
11 Except Barbados, Bermuda, Jamaica, Trinidad, and Tobago.
11 Except Nigeria and Ghana.
Cotton 1-1/8" or more
Established Yearly Quota - 45,656,420 lbs.
Imports August 1, 19m -.Febpnqr 10, 1%4
Staple Length
1-3/8" or more
1-5/32" or more and under
Allocation
39,590,778
Imports
39.590,778
752
871
124
195
2,240
71,388
21,321
5,377
16,004
Import!
-2-
COT1'OM WASTES
(In pounds)
COTTON CARD STRIPS made from cotton having a staple of less than 1-3/16 inches in length, COMBER
WASTE, LAP WASTE, SLIVER WASTE, AND ROVING WASTE, WHETHER OR NOT MANUFACTURED OR OTIlERWISE
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 1-3116 inches or more
in staple length in the case of the follOwing countries: United Kingdom, France, Netherlands,
Switzerland, Belgium, Germany, and Italy:
Country of Origin
United Kingdom ••••••••••••
Canada ••••••••••••.••.••••
France •••••••••••••.••••••
India and Pakistan ••••••••
Netherlands •••••••••••••••
Switzerland •••••••••••••••
Belgiwn ..•...........•....
Japan •••••••••••••••••••••
China •••••••••••••••••••••
Egyp t •........••••..••••••
Cuba ••••••••••••••••••••••
Ge rtna..ny •••••••••••••••••••
Italy .........•.•.........
Es tablished
TOTAL QOOTA
Total Imports
Sept. 20, 1963, to
February 10, 1964
Established
33-1/3% of
Total Quota
Imports
11
Sept. 20, 1963,
to FebrUary 10. 1964
4,323,457
239,690
227,420
69,627
68,240
44,388
38,559
341,535
17,322
8,135
6,544
76,329
21,263
719,270
239,690
187,675
19,284
11,249
34,147
33,022
59,000
1,441,152
102,245
75,807
55,151
23,957
25,443
7,088
5,482,509
1,327,294
1,599,886
22,747
14,796
12,853
Other, including the U. S.
157,396
1/ Included in total imports, column 2.
The country designations listed in this press release 3re those specified in rresidentiul Proclam3tion
2351 of 3e~tember 5, 1939, 3S modified by the Tariff Schedules of the United Stutes. Since that
date the n3mes of certdin countries have been changed. The outmoded names are beine retained bec~use
of their geogruph1c~1 coverage and have no political connotation.
Prepared in the Bureau of Customs.
~.
D-1133
5233
58
-2-
Commodity
Unit
Imports.....
of
a8 of
:Quantity:Feb. 1.
1,
Period and Quantity
Absolute Quotas:
Butter substitutes containing
over 45% of butterfat, and
butter oil •••••••••••••••••••••• Calendar Year
Fibers of cotton processed
12 mos. from
but not spun •••••••••••••••••••• Sept. 11, 1963
Peanuts, shelled or not shelled,
blanched, or otherwise prepared
or preserved (except ~-)eaaut
Pound
Quota Fill.
1,000
Pound
531
12 mos. from
butter) ........................ . August 1, 1963
1/ Imports through February 10, 1964.
D-1134
1,200,000
1,709,000 Pound
Quota
Fill~
5239
59
TRE AS ur:. Y DEE'i\..q,TNENT
Hashing ton
TI-.lHED I;,.TE RELEASE
D-1134
FRIDAY, FEBRUARY 14,1964
The Bureau of Customs announced today preliminary figures on imports for ~
tion of the fol10\·,ring commodities from the beginning of the respective quota perioda
through February 1, 1964:
Commodity
T,~riff-Rate
Unit
of
Period and Quantity
Imports
as of
:Feb. 1 1
Ouo ta.s:
Cream, fresh or sour ••••••••••••• Calendar Year
1,500,000
Gallon
Hhole Hilk, fresh or sour ••••••.• Calendar Year
3,000,000
Gallon
150,861
Cattle, 700 lbs. or more each
Jan. 1,1964Cother thc:-,n dairy CO\oJs) •••••••• Harch 31, 1964
120,000
Head
3,604
12 mos. from
Cattle less th.::l.n 200 lbs. each ••• ':\Jri1 1, 1963
200,000
Head
52,200
Fish, fresh or frozen, filleted,
etc., cod, haddock, hake, pollock, cusk, and rosefish ••••••• Calendar Year
Pound
Quota Filled
Tuna Fish •..•••.••.•••••••••..••• Calendar Year
24,861,670
To be
announced
Pound
2,706,826
;fui te or Irish potatoes:
Certified seed •••.•.•••••.•.••. 12 mos. from
Other ••••.•..•••.•.•••...•••.•• Sept. 15, 1963
114,000,000
45,000,000
Pound
Pound
34,062,000
6,776,605
69,000,000
Pieces
41,739,817
I~nives,
forks, and spoons
l!ov. 1, 1963uith stainless steel handles ••• Oct. 31, 1964
I/lm)orts for consumption at the quota rate are limited to 6,215,417 pounds during.
first three months of the calend2.r year.
TREASUR Y DEI? ARTMENT
Washington
1HEDIATE RELEASE
D-1134
RIDAY, FEBRUARY 14,1964
The Bureau of Customs announced today preliminary figures on imports for consumpLon of the following commodities from the beginning of the respective quota periods
lrough February 1, 1964:
Commodity
~riff-Rate
Unit
Imports
of
as of
:Quantity:Feb. 1, 1964
Period and Quantity
0uotas:
fresh or sour ••••••••••••• Calendar Year
1,500,000
Gallon
lole Hilk, fresh or sour ••••••.• Calendar Year
3,000,000
Gallon
~eam,
150,861.
lttle, 700 lbs. or more each
Jan. 1, 1964(other thcn dairy cows) •••••••• Harch 31, 1964
120,000
Head
3,604
12 mos. from
lttle less than 200 1bs. each ••• A}ri1 1, 1963
200,000
Head
52,200
.sh, fresh or frozen, filleted,
etc., cod, haddock, hake, ~)ollock, cusk, and rosefish ••••••• Calendar Year
Lnt1
Fish ........................ Calendar Year
li::e or Irish potatoes:
Certified seed •••••.•••••.••••• 12 mos. from
Other ••••.•..•••...•••••••••.•• Sept. 15, 1963
.ives, forks, and stl00ns
;rov. 1, 1963with stai::11ess steel handles ••• Oct. 31, 1964
Im~orts
24,861,670
To be
announced
round
~uota
Filled
round
2,706,826
114,000,000 l:' oU::1d
45,000,000 Pound
34,062,000
6,776,605
69,000,000
rieces
for consumption at the quota rate are limited to 6,215,41 7
rst three months of the co.lendo.r year.
l,,1,739,817
during the
-2-
Commodity
Absolute
Unit
1mports ~.
of
as of'
:Quantity:Feb. 1. 12it
Period and Quantity
Quot~s:
Butter substitutes containing
ovar 45% of butterfct, and
butte::- oil •...•..•..•.•....•..•.
Fibers of cotton processed
C,~lendar
12
mos.
Year
Pound
1,000
Pound
1,709,000
Pound
from
but not sf)un .........•.••......• Sept. 11, 1963
shelled or not shelled,
blanched, or othe:"uise prepared
or ~lreserved (exce~~t .'e,""',aut
1,200,000
:e3nu~s,
b!.l~ter) •••••••••••••••••••••••••
12 mos. from
August 1, 1963
11 I::l)orts through Fc.bru.:1.ry 10, 1964.
D-1134
Quota Fill~
61
TREASURY DEl? A.~1MENT
Washington
nn-lED lATE P..ELEASE
0-1135
FRIDAY, FEBRUARY 14,1964
The Bureau of Customs has announced the following preliminary figurq
showing the im!,orts for consumption from January 1, 1964, to February 1, 1964,
inclusive, of commodities under quotas established pursuant to the PhUipp1De
Trade Agreement Revision Act of 1955:
Commodity
Established Annual
Quota Quantity
Unit
of
Quantity
Imports
as of
February 1. 1964
Buttons •••••••••••••
680,000
Cigars ••••••••.•••.•
160,000,000
Number
Coconut oil •••••••.•
358,400,000
Pound
69,907,120
Cordage •••...•....••
6,000,000
Pound
404,709
Tobacco •••••••••••••
5,200,000
Pound
199,647
Gross
24,076
902,148
TREASUR Y DEPARTMENT
Washington
tNt-tED lATE RELEASE
FRIDAY, FEBRUARY 14,1964
D-1135
The Bureau of Customs has announced the following preliminary figures
showing the imports for consumption from January 1, 1964, to February 1, 1964,
inclusive, of commodities under quotas established pursuant to the Philippine
Trade Agreement Revision Act of 1955:
Commodity
Established Annual
Quota Quantity
But tons •••••••••••••
680,000
Cigars ••••••••.•••.•
Unit
of
Quantity
Imports
as of
February 1. 1964
Gross
24,076
160,000,000
Number
902,148
Coconu t oi 1 •••••••.•
358,400,000
Pound
69,907,120
Cordage ..•........••
6,000,000
Pound
404,709
Tobacco •..•••••
5,200,000
Pound
199,647
CI
••••
'l'RUstmr 1I!P.llmO!lft
Waah1DCtOll, D. C.
nNEDIA TE RELl:!SJ:
FRIDAY, FEBRUARY 14,1964
PRELIMINARY DATA ON IMPORTS fOR CONSUMPTION OP' UlDlABUfAC'l'URED LEAD AND zmc CHARGEABLE TO THE QUOTAS ESTABLISHED
BY PRESIDENTIAL PROCLAMATION HO. 3257 or SEPTEWBl!R 22tcl~btl MODIFIED BY THE TARIIT SCHEDULES or THE
UNITED STATES, WHICH B
CTIVE AUGUST 31., 1963.
QUARTERLY QUOTA PERIOD - January 1 - Maroh 31, 1964
IMPORTS _ January 1 - Feb~ary 7, 1964 (or as noted)
ITEM 925.01..
:
..
ITEM 925.03-
I
CountyY
Lead-beari~
ores
and ma terI.&l.e
of
UmrrcW!ht 1.ead and
1.ead waite and acrap
Productioll
••
I
Zino-bearing ores and
I
maten&1.s
I
I
&
:
Australia
11,220,000
11,220,000
Belgium and
Luxemburg (total)
22,540,000
10,356,896
-
Bolivia
5,040,000
4,736,205"
Canada
1.3,440,000
4,511,025"
15,92.0,000
!Peru
16,160,000
~epublic
14,eeo,ooo
16,160,000
7,387,103
14,880,000
'fugoslaT1.a
-See Part 2 • •ppeDdb to
·.~or~.
. . or
T_br~ary
Tarl~~
10.
1,574,551. ••
Sohe4ul.•••
~964.
zino waate
and.
scrap
66,400,000
-
66,480,000
7,520,000
37,840,000 14,046,275
3,600,000
70,480,000
23,613,079
6,320,000
1,800,497
12,860,000
4,718,422
35,120,000
10,768,445
3,760,000
2,622,026
5,440,000
3,251,844-·
-
1,763,346"
All o4:.her _._
6,560,000
,:.
17,124,555
15,760,000
ccun~r1e. (~otil)
: of zino and zino dust) and
36,eeo,OOO
of the Congo
(formerly Belgian Congo)
•••Un. So. Africa
:Uuwrought zino (except &1.10ya
7,520,000
LCt&l.y
tAexico
ITEM 925.04·
ITEM 925.02-
6,080,000
6,080,000
-
-
17,840,000
lA,928,460· -
6.oao,OOO
6,080,000
0-1136
/- ,"'.'
'v
TREAstJ'RT D!!PAlmIERT
Wuh1ngton. D. C.
~DIATE
RELEASE
FRIDAY, FEBRUARY 14,1964
PRELIMINARY DATA ON IMPORTS fOR CONSUMPTION 01i' UNMANUFAC'lURED LEAD AND ZINC CHARGEABLE TO THE QUOTAS ESTABLISHED
BY PRESIDENTIAL PROCLAMA.TION NO. 3257 OF SEPTEMBER 22tc!.~1. AS MODIFED BY THE TARIFF SCHEDULES OF 'IRE
UNITED STAT"..5, WHICH B
QUARTERLY QUOTA PEJnOD -
.t;FfECTIVF. AUGUST 31, 1963.
January 1 - lfi.3rch 3], 1004
IMPORTS _ January 1 - "fehruary 7, 196A (or as noted)
ITEM 925.01.
ITIlo{
925.03.
ITEM 925.02.
I
I
Country
Lead-beari~
cres
and materIa.l.s
of
Produotion
Australia
Umrrowtht lead and
lead waite and scrap
.
ll,22O,OOO
11, 220 pOOO
22,540,000
Zino-bearing ores and
IrAteria1s
.
ITEM 925.04·
;UDNrought zino (except alloys
: of zino and zinc dust) and
zino waate and scrap
10,356,896
BelgilB and
7,520,000
Luxemburg (total)
Bo1iTia
5,040,000
4,736,205"
Canada
13,440,000
4,511,025··
15,920,000
7,387,103
66,400,000
66,480,000
Mexico
16,160,000
16,16C,000
36,880,000
17,124,555
70,400,000
23,613,079
6,320,000
1,SOO g 497
12,880,000
4,718,422
35,120,000
10,768,445
3,700,000
2,622,026
5,440,000
3,251,'344 ••
6,080,000
6,080,000
Republic ot the CODgo
(to~rly Belgian Congo)
•••un.
So. Africa
14,880,000
14,1380,000
15,760,000
YugoslaTia
All o<:.her
eo~tries (totil)
37,840,000 14 g 046,275
3,600,000
Italy
Peru
7,520,000
6,560,000
1,574,551- •
.See Part 2, Appendix to Tariff Sohedule ••
•• Imports as of Febrvar.l 10. 1964.
6,080,000
1,763,346··
C ,0 (:JO ,l\I')()
1.7,840,000
14, 92fl ,460· •
D-1136
65
February
14, 196h
Fm IMMEDIATE RELEASE:
The Minister of Finance of Canada, Walter L. Gordon,
conferred today with Secretary of the Treasury Douglas
Dil~.
The Minister came to Washington to review with the secretu,_
v~
..
I~ft.retft
the various economic questions which are of special~[£e~
to the two governments whose financial relationships are
uniquely inter-related.
The subjects discussed included
the balance of payments of the two countries; the Canada-U .S.
tax convention; and the Canadian policy regarding automobilu
and parts.
These talks were part of a continuing series
of U.S.-Canadian Cabinet level contacts in the spirit of
President Johnson's meeting with Prime Minister Pearson
last month.
(Note:
,.'
//"'\
.'
'
Run and hold for distribution at
distribute)
2:45
p •. m. when the British
fREASURY DEPARTMENT
February 14, 1964
FOR IMMEDIATE RELEASE
The Minister of Finance of Canada, Walter L. Gordon,
conferred today with Secretary of the Treasury Douglas Dillon.
The Minister came to Washington to review with the Secretary
various economic questions which are of special interest to
the two governments whose financial relationships are uniquely
inter-related.
The subjects discussed included the balance
of payments of the two countries; the Canada-U.S. tax
convention; and the Canadian policy regarding automobiles
and parts.
These talks were part of a continuing series
of U.S.-Canadian Cabinet level contacts in the spirit of
President Johnson's meeting with Prime Minister Pearson
last month.
000
D-1137
-
Dlstl"ict
;.
~
Bostol1
New York
18,550,OOC
22,302. OCZ)
63,255 J OC-o
Rfchaload
Atlanta
~J4, 535 , (0)
Chict\60
st. Louis
Ul nnenpol1 a
KaDsas C1 ty
Dallas
SaD Franci seQ
53,5&.),00')
2" ,351,000
38,505,000
12,145,000
Treasury
r~ ~
.~'.1.,
TOO1\L
t
~.
'BoD&::, 196(
Tatel
60 ,aGS, 00:1
482 1 703,,000
11,164,000
Phi lade Iphir,
CleVeland
etfa., A-l964
..
5-l/4~ Ctfs.:
Series A-l.964
J'ed.c!rR 1 Heservc
'5-1/4:'1-
'"t-
,~
y
-z:;'
"i~
Bc:an4s
of'
~
..
40,164,000
11,111,000
101,7II,0D0
!l,.1,OOO
1lI, JU,OCID
16:082,000
33,381,000
170,742,000
ga,-,se,on,.
10,531,000
21~1,026,OOO
20,093,000
SI,SM,a
iO,."
37 , ()43,OOO
'JII.-
26,161~OOO
SS,llI,.
::-6,217,000
16..
24,~42JOOO
36,.".
117,_,.
35,425,000
1,664,000
J2,~),OOO
')65 000
a,. . .
062_, 822
Ca, oc-0,
;-j72C,782,000
$1,i09,m&,.
,. ..
J",
(Iii millions)
I'.
$4,350
s
..
$2,816
. l,5.2Z
fl'
J.12
1.8
'.1
1~.6
u.s
1.1
or
. . JIIIMI,lta
tIle~"
I_..at ....,.. . . . .
L.......
or
1$"'"
.7/. __ da1.ed PebI'J If II, lSIM. iIiI. . . . ~ 11,
. . . . . (a4a1t1CDJl 1 _ J ... I. NbruaJ7 .... lilli, -~
o
I1l'C
I
.mt
lS, 1:)6&,
rbc:4 in t.ba i'o.l.1ow1a1
-
•
n
$6,74J.
$5,5~
,_1.i1t
te,.m
!99
tG.al5
......
• I
If
#.
ao.toa
$
79,961,000
"",315,000
PIltl.lpde
~
It.
I
$
City
DlllA8
Son Pl"'8D::illCfJ
'l~""'Y
1"
7XE.J.'4.;
0:, r~
9L .Mtii
I
1',_#).))0
44,505,000
2',);3lfI .t000
&5,347,OOQ
"_t~,\)OO
!;it !()4b I OfJO
47,646,000
Ut. !ou18
•
J
!Plt, ..
1
, ,9 •
letllt
JiO, W1,OOO
2£.;~~,OO)
2'Il
1m
M,"'"
•',31"._
a._
sa,..,_
M, ••••
11,
'"':1 I5G2
'
, 00"
1'. . . . .
301.,11.1.-
54..565,000
16,200,000
15 1 21,s,0(X)
i:J J aaG100J
6&,JU1,tOOJ
• .., J U!~
.t.1
" ,,','))0
.
!t1,1.,.
G2,8t)S,00:)
23:3 .0I!,00Cl
16 ,. il2, 1.)()O
~12,,351,OOO
~·iS nI1 rsnpol:1~
.,015
."- 810
i>J.,
. 11:
aa,sc.i,ooo
llfJlIa_
Atl.azat,a
Qaoseo
.,. .....,.. ... IV
I P __
3.1/....._
"'1tIrA:_
......
~.
,.3."
W"l.¥,oqo
f ~
'fv,~.
'liYJ 1 OC:()
1',
A"
'f...
Y
b:) I OO~ I
."
; 1!i
... " .
VJO
, JOJO
d _
~ ,:)61 ,OC'JO
69,.,.,.,.
.,118.81,. . . .
21)l,"• •
",,101,"'''-
(' a
c
TREASURY DEPARTMENT
)R Df.IEDlATE RELFASE
February 17, 1964
SUBSCRIPTION FIGURES FOR CURRENT EXCHANGE OFFERING
The results of the Treasury' s current exchange offering of
?>-7/fJip notes dated February 15, 1964, maturing August 13, 1965, and
4;' notes (additional issue) dated February 15, 1962, maturing
August 15, 1966,
'e summarized in the following tables.
Amount
Eligible
for Exch
Issues Eligible
for Exch
e
1/4;' etfs., A-1964
Bonds, 1964
Total
Amount
For Cash
Total Red
tion
$6,741
$5,535
$1,083
$6,618
$123
1,634
668
727
1,z395
239
$8,375
$6,203
$1,810
$8,013
$362
Exchanges for 3-7/ff1, Notes of Series D-1965
Federal Reserve
District
3-1/4;' etfs.,
Series A-1964
Boston
New York
Philadelphia
Cleveland
Richmond
Atlanta
Chicago
St. rouis
Minneapolis
Kansas City
Dallas
San Francisco
Treasury
$
TOO'AL
D-1138
?J1,Bonds
of 1964
Total
79,947,000
4,636,313,000
44,585,000
45,347,000
28,546,000
47,648,000
212,351,000
54,563,000
26,200,000
44,217,000
62,853,000
233,823,000
18.z716,z000
$ 14,462,000
340 ,407 ,000
20,397,000
46,505,000
5,045,000
26,450,000
89,362,000
15,213,000
10,986,000
17,893,000
18,612,000
60,889,000
1.z746.z000
94,409,000
$
4,976,720,000
64,982,000
91,852,000
33,591,000
74,098,000
301,713,000
69,776,000
37,186,000
62,110,000
81,465,000
294,712,000
20.z462.z000
$5,535,109,000
$667,967,000
$6,203,076,000
.. 2 ..
Exchanges for 4~ Notes of Series A-1966
Federal Reserve
District
Boston
New York
Philadelphia
Cleveland
Richmond
Atlanta
Chicago
St. Louis
Minneapolis
Kansas City
Dallas
San FranciSCO
Treasury
TOTAL
Maturing Issues
3-1/4"" Ctfs., A.. 1964
3~
Bonds, 1964
Total
Bonds
of 1964
?>-1/4"" Ctfs.,
Series A-1964
$
?:J1,
Total
60,865,000
482,703,000
11,764,000
78,550,000
22,302,000
63,253,000
194,335 ,000
53,360,000
27,351,000
38,505,000
12,745,000
35,425,000
1,664,000
$ 10,331,000
219,026,000
20,093,000
40,164,000
16,082,000
33,381,000
170,742,000
37,048,000
26,161,000
36,217,000
24,142,000
92,430,000
965,000
$
$1,082,822,000
$726,782,000
$1,809,604,000
Eligible for Exch~e
Federal Reserve
Publicly Held Banks and Govern..
ment Accounts
(In millions)
71,196,000
701,729,000
31,857,000
118,714,000
38,384,000
96,634,000
365 ,077,000
90,408,000
53,512,000
74,722,000
36,887,000
127,855,000
2,629,000
For Cash Redemption
Percent of
Percent of
Total
Public
Outstanding HoldingS
$2,816
$3,925
1.8
4.3
1,522
112
14.6
14.3
'4,3~
$4,038
4.3
7.8
-
... '
,~ ~LU3I
I. M. IIF.WSPAP'I':dS,
fuNdal, F!t'1'!!!'l18, 196~.
RlSULTS 0'
TOfAt
r~Dlas
~
I
I
I
lC.lruary 17. 1964
!wsuayts
WJlIILIIILL
APPLIYJ) Fad AlID ACOIPl'ED 'II PllBIAL Rllt,-C{'
01i'f~iU~
i}rS'tR.T!~~:
For
'0!!fJ:I
• Aes>li."3, 764,UOO"
j'o,
AC.~
rApplied
63.803,060 I ~OJ.ooa
);r;ii
1,480,902.000
762.122,000:
1,S)2,4iO,000
7lS,09ia,0I
%;j
Iork
P·U_lpbl a
2~,691.000
lJa,691,ooo
cn.evelAlDd
26,221.000
22,996,000:
ii",.r
At.luta
ll,Slk,OOO
1),S)Ia,OOO:
Cbieqo
St. Lou1a
:flaDelpol1.
'*'CitT
Lall-.
)2,22S,OOO
228,430,000
39,661,000
20,6S1,000
40,065,000
2~,478,OOO
2S,151,OOO
3
1)),OS7,OOO s
)),109,000:
lS,991,000:
3S,919,OOO:
19,616,000 ~
8,S47,\.X)()
27 ,3:l 7 ,000
),549.ll,U2,0I
9,7~6,000
7,1~,.
2,315,lXJO
2,315.-
149,012,()j()
62,8&2,.
lo,531,O(JO
6,5)1,01
4,ll1,01
8,619,000
6,)r( ,fJ()O
ll,71~,OOO
9,t,32 ,O:';0
~,882"
Sua Franoisoo
_ 189,S8S,OOO _
98.88S,ooo I
12}.5;)5,0.:)0
61'~'.
tOTALS
32,195,080,000 $1,201,088,000!1 ~,9Ol,137,OOO $~, ~
~ Inoludea $250,31S,000 OODCOIlpIt1t.1.... teDden aooept-sd at the averqe price of "JA
!I Iaclude. 164,173,000 noncc.petlt.iYe te. . . . aGMpted at tn. Bvera<e ;Irice of 9IJ»
!I On • coupon issue or the sue length and tor tbe ..me amoUDt invested, tbl "'_.
tile•• bill. would provide .rielU ot 3.63 J, for \he '1l-day billa, and ).81', ttl-182-da¥ bUl.. Intere.t rat.. on bill. an quot.d in t.eru 1:>1' bankUaco- 11-the return related to the fa. _oat of t.he oW. payable at Jfl.&turitj' ret . . -tne amount iD"••t.ed and their length in acta]. lNIIber of dajS relat~d to • ~
"..,-. In contraet, yield. on certi!lcatee, no'-, and bondII are eO""~'.1ted 1llot illt..ren on the L"ftOunt invested, aDd relate tbe m.noer of dajs I'€!"I&1.niDC 11iaterut payaent period to the actual. n_ _ or day. in the "erioo, with . _ ns'
ooaspounding if more than one coupon period. 1a ino1-qd.
-I
,
--J
I
TREASURY DEPARTMENT
aELEASE A. M. NEWSPAPERS,
day, February IB, 1964.
February 11, 1964
RESULTS OF TREASURY'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 bills dated November 21, 1963,
the other series to be dated February 20, 1964, which were offered on February 11,
opened at the Federal rteserve Banks on February 17. Tenders were invited for
00,000,000, or thereabouts, of 91-day bills and for $900,000,000, or thereabouts, of
day bills. The details of the two series are as follows:
IB2-day Treasury bills
91-day Treasury bills
m'ITIVE BIDS:
maturing May 21, 1964
maturing August 20, 1964
Approx. Equiv.
Approx. Equiv.
Price
Annual Rate
Annual Rate
Price
98.146 a/
3.667%
High
99.110
3.521%
98.138 . Low
99.105
3.541%
3.683%
98.140
Average
99.107
3.534%
3.679% 1/
~cepting two tenders totaling $700,000
.~% of the a."Tlount of 91-day bills bid for at the low price was accepted
~% of the amount of IB2-day bills bid for at the 10'\'1 price was accepted
:$ OF ACCEPTED
.
Y
L TENDERS APPLIED FOR AND ACCEPTED DY FEDEfUlL RESERVE DISTRI crS:
~trict
AE,elied For
AcceEted
A,e,elied For
AcceEted
63,803,000
$ 25,203,000
$
$
3,764,000
$ 3,764,000
1,480,902,000
762,722,000
1,532,490,000
715,094,000
29,697,000
14,697,000
8,549,000
3,549,000
26,221,000
22,996,000
12,122,000
27,307,000
13,534,000
13,534,000
2,315,000
2,315,000
32,225,000
25,151,000
9,196,000
7,796,000
228,430,000
133,051,000
62,882,000
149,012,000
39,681,000
33,309,000
10,531,000
8,531,000
20,659,000
15,997,000
6,317,000
4,317,000
40,865,000
35,919,000
8,619,000
1l,719,OOO
19,618,000
29,478,000
9,882,000
4,882,000
98,z885 l 000 :
189,z585,z000
129,z505,z000
67l083l000
$2,195,080,000
$1,201,088,000 E/ $1,901,187,000
$900,954,000 E/
~cludes $250,315,000 noncomyetitive tenders accepted at the average price of 99.107
\cludes $64,173,000 noncompetitive tenders accepted at the average price of 98.140
a coupon is~~e of the same length and for the same amount invested, the return on
\liese bills would provide yields of 3.6.3%, for the 91-day bills, and 3.81%, for the
~2-day bills. Interest rates on bills are quoted in terms of bank discount with
I~e return related to the face amount of the bills payable at maturity rather than
~le amount invested and their len~tb in actual number of days related to a 360-day
.ar. In contrast, yields on certificates, notes, and bonds are computed in terms
r interest on the amount invested, and relate the number of days remaining in an
kterest payment period to the actual number of days in the reriod, with semiannual
impounding if more than one coupon period is involved.
ston
i York
iladelphia
3veland
:hmond
Lanta
lcago
, Louis
meapolis
lsas City
Uas
1 FranCisco
TOTALS
- 3 -
exempt from all taxation now or hereafter imposed on the principal or interest
thereof by o:ny Sta.te, or any of the possessions of the United States, or by any
local taxinG authority.
Treasury 'ollIs are
For purposes of taxation the amount of discount at which
original~
sold by the United States is considered to be
1ntc~
Under Scctiona 45~: (b) and 1221 (5) of the Internal nevenue Code of 1954 the EU1IOUD\ .
of discount G1,t "lhich 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
billa (othcr than life insurance companies) issued hereunder need include in his 11come tf'.x return only the difference betlreen the price paid for such bills, rmethcr
on oriGinal iSGUC or on subsequent purchase, and the runount
actual~
received citbeJ
upon sale or redemption at maturity during the taxable year for which the return 1s
mnde, as ord innlY GaJn or loss.
'l'reusury Dcptu'tmcnt Circular No. 418 (current revision) and this notice, pre·
scribe the tenl1s of the Treasury bills and govern the conditions of their issue.
Copiea of the circular may be obtained from any Federal Reserve Bank. or Branch.
- 2 -
Treasury bills applied for, unless the tenders are accompanied by an express
aranty of payment by an incorporated bank or trust company.
Immediately after the closine hour, tenders will be opened at the Federal Rerve Banks and Branches, follmving vrhich public announcement will be made by the
~asury
~
Department of the amount and price range of accepted bids.
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 tenders,
whole or in part, and his action in any such respect shall be final.
!se reservations, noncompetitive tenders for $ 20~O
Subject to
or less without stated
.ce from any one bidder will be accepted in full at the average price (in three
,:imals) of accepted competitive bids.
Payment of accepted tenders at the prices
'ered must be made or completed at the Federal Reserve Bank in cash or other imliately' available funds on ~Ma~r~c;h~3~'.2l~9§.64~._.-JOOm!D;BiX:OOmOOOCKXJlm:iO;)~W;:td
**
The income derived from Treasury bills, whether interest or gain from the sale
other disposition of the bills, does not have any exemption, as such, and loss
mthe sale or other disposition of Treasury bills does not have any special treatt, as such, under the Internal Revenue Code of 1954.
The bills are subject to
ate, inheritance, gift or other excise taxes, whether Federal or State, but are
73
..
\
TREASURY OFFERS $1 billion one-year BILLS
THFJI.sm cr D:ii:PfillTI IE:IlT
UnoM· l1ct
ol1
February 18, 1964
'1'he Tl'ec::m1"Y Dcpnrtment,
or therC8uouts, of
cOJ.I1)etitive
~er:i.~G
fOl"ll
ent,-
M(l
t 'lld
<il, 000, 000
thin public 110tice, invites tendero for $ 1,OOO~
-dc.y Trco.sury billa, to be irwued. on a di scount bc.sis _
noncompetitive biddinc
"Till be eluted
onl~r,
362
XXi{ii}iX
uy
0.:';
hCl'cinn1·ter provided.
The bills of this
March 3, 1964
, end 't·rlll metul'e
February 28, 1985
------~~~------Thcy wIll be issued in beOl~r
m ·
in denoliunat :;.on3 of
:;a, 000,
:;;::),000,
:;ao, 000,
:Ji50, 000, :;ilOO ,000, $500,l
(r'lo.tm:it~r value).
Tuesday, February 25, 196'
• ~cnd~
t$
'trIll not be received v.t the 'J.1rea:mry Department, Ho.shi1"lGton.
Each tender must be fill
tln even J:ruJ.tiple of :~l, 000, and in the cacc of cO;llpet::rttve teoo-er:3 ttle price offered
;.m.:;t be e;;:pre::wed on the ba.G:i.::; of 100,· 1itth not
JllOI'C
than three dcd.nw.l::;, e. C., a~.~
Fl'~ct:10~~0;1~t~~ta~~~~c~i i~~c~.Gt:~:c~h~~1~'-~~;;;~lc1;~er:~fc°~n3~~leda~~.~t~~e i::~
::"o:"·:.r::'. l'c1ccl :i.n the Gpecic·.l envelopes 1rlrtch IT.UJ. be Sll.Plll:.i.c(l by Federal Hcserve BsL~S III
JJ:"'~'Jlchcs
on eppl:tco.t:Lon therefor.
Bc'll1dl1G in::;titut,ion~ c;cne:"'nll~/ rao.y
GUU);[Lt
tenders :('01' account of cUS-Gomers pro-
vided the names of thc customers arc Gct l."o::.:th in such t.c:aders.
Others than bankiDll
institutions lTi~.1 not. be permitted )~o fJubj",ri.J~. J~cl1(1c:rc. exccpt for their o'\-m account.
Tendclrs 1r111 be received ,·Tithout deposi t :L~rom illcorporated bonl~s and trust companie9
nnd
frOi.l
responsible and recoGnized dea.lc:-cs in investment securities.
others must be c.ccoT.wenied
b~r p['.~'1.lent
0:1.' 2 pel'cent of the face amount
Tenders frcJ
____
rate will -be~ c~p~t~d on a bank discount basis of 360 days, as is currentlY ~
practice on all issues of Treasury bills.)
TREASURY DEPARTMENT
February 18, 1964
R IMMEDIATE RELEASE
TREASURY OFFERS $1 BILLION ONE-YEAR BILLS
The Treasury Department, by this public notice, invites tenders for
,000,000,000, or thereabouts, of 362-day Treasury bills, to be issued
a discount basis under competitive and noncompetitive bidding as
reinafter provided. The bills of this series will be dated
"reh 3, 1964, and will mature February 28, 1965, when the face amount
11 be payable without interest. They will be issued in bearer form
iy, and in denominations of $1,000, $5,000, $10,000, $50,000,
00,000, $500,000 and $1,000,000 (maturity value).
Tenders will be received at Federal Reserve Banks and Branches up
the closing hour, one-thirty p.m., Eastern Standard time, Tuesday,
bruary 25, 1964. Tenders will not be received at the Treasury
partment, Washington. Each tender must be for an even multiple of
,000, and in the case of competitive tenders the price offered must
expressed on the basis of 100, with not more than three decimals,
g.,99.925. Fractions may not be used. (Notwithstanding the fact
at these bills will run for 362 days, the discount rate will be
~puted on a bank discount basis of 360 days, as is currently the
aetiee on all issues of Treasury bills.) It is urged th~t
nders be made on the printed forms and forwarded in the special
velopes which will be supplied by Federal Reserve Banks or Branches
application therefor.
Banking institutions generally may submit tenders for account of
stomers provided the names of the customers are set forth in such
1ders. Others than banking institutions will not be permjtted to
)mit tenders except for their own account. Tenders will be
:eived without deposit from incorporated banks and trust companies
i from responsible and recognized dealers in investment securities.
:.lders from others must be accompanied by payment of 2 percent of
~ face amount of Treasury bills applied for, unless the tenders are
::ompanied by an express guaranty of payment by an incorporated bank
trus t company.
Immediately after the closing hour, tenders will be opened at the
leral Reserve Banks and Branches, following which public announcement
.1 be made by the Treasury Department of the amount and price range
accepted bids. Those submitting tenders will be advised of the
.140
- 2 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
accepted competitive bids. Payment of accepted tenders at the pr~es
offered must be made or completed at the Federal Reserve Bank in
cash or other immediately available funds on March 3, 1964.
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 soW
is not considered to accrue until such bills are sold, redeemed or
otherwise disposed of, and such bills are exc luded from consideration.
as capital assets. Accordingly, the owner of Treasury bills (other
than life insurance companies) issued hereunder need include in his
income tax return only the difference between the price paid for
such bills, whether on original issue or on subsequent purchase, and
the amount actually received either upon sale or redemption at
maturity during the taxable year for which the return is made, as
ordinary gain or loss.
Treasury Department Circular No. 418 (current revision) and this
notice, prescribe the terms of the Treasury bills and govern the
conditions of their issue. Copies of the circular may be obtained
from any Federal Reserve Bank or Branch.
000
TREASURY DEPARTMENT
Washington
FOR RELEASE A.M. NEWSPAPERS
THURSDAY, FEBRUARY 20, 1964
REMARKS BY THE HONORABLE DOUGLAS DILLON
SECRETARY OF THE TREASURY
BEFORE THE ECONOMIC CLUB OF CHICAGO
AT THE PALMER HOUSE, CHICAGO, ILLINOIS
WEDNESDAY, FEBRUARY 19, 1964, 7:00 P.M., CST
It is a pleasure to be here tonight, not only because of the
importance of this distinguished audience, but because it gives me the
opportunity to acknowledge the outstanding work of Chicago's
representatives on the U. S. Industrial Payroll Savings Committee, who
help our debt management program by promoting United States Savings
Bonds sales. I am sure the Conmittee will be calling upon many of you
to support the 1964 campaign -~ which begins tomorrow. I know you
will respond in any way you can.
Tonight, I want to examine with you one of our most persistent
economic problems
the deficits in ·our international balance of
payments:
Last year was critical for our balance of payments -- a year of
initial relapse, followed by vigorous recovery. Our deficit on
regular transactions reached an annual rate of $4-1/2 billion in the
first half of the year, b~t fell to little more th8n $1-1/2 billion
in the last half -- the best six-month record since our payments
were bolstered by the Suez crisis in 1957.
Regular transactions, as you know, include everything except
special inter-governmental transactions such as advance repayments
of debts owed to us, advances on military purchases from us, and
sales of special non-marketable U. S. obligations. Thus, regular
transactions provide the best measure of the year-to-year changes in
the basic elements that shape our balance of payments. However, the
overall balance -- which represents the total change in our liquid
assets and liabilities -- is the best measure of the results in any
given year, because it includes all transactions which affect our
international liquidity position-.-For all of 1963, our deficit on regular transactions amounted
to $3 billion -- a '$600 million improvement over 1962, just a hair
better than the 1961 record, when imports were depressed in the
aftermath of our last recession, but a substantial improvement over
the 1958-60 average of $3.9 billion.
1141
- 2 On an overall basis, the 1963 figures are complicated by our
5ale to foreign central banks for the first time of non-marketable,
TIedium-term convertible securities. These sales, which are highly
important in protecting our gold stock, amounted to $700 million.
rhere is no clear consensus on how those securities should be treated
in our statistics, so the Commerce Department presents two totals:
)ne making allowances for their sale, and the other disregarding them
)y treating them as fully liquid liabilities equivalent to cash. On
~he first basis, o~r overall deficit for 1963 was just under
$1.9 billion, and on the second, just under $2.6 billion. These
figures compare to $2.4 billion in 1961, $2.2 billion in 1962, and
3n average of $3.7 billion in the 1958-60 period.
These different statistical approaches make the balance of
)ayments more difficult to comprehend than it actually is. In addition,
)ur statistics, since they are derived differently, cannot be co~pared
Jith those of the International Monetary Fund and most other countries.
~o remedy that situation, the Administration appointed a committee
If experts from private life to study our balance of payments statistics.
~hat com~ittee has been at work for almost a year, and plans to make
.ts report some time this Spring. Its report, we hope, will result
.n a simplification or standardization of our balance of payments
;tatistics that will make them both more readily understandable and
lore comparable with the statistics of other countries.
One statistic that, for good or for ill, is always easily undertood, records our gold stock. Last year it showed substantial
mprovement. Total gold outflow was held to $461 million as compared
o $890 million in 1962, $857 million in 1961, and an average of
,1.7 billion in the 1958-60 period.
To understand what happened last year, and what it portends for
he future, we must go back to 1961, when we began to forge a comprehenive program to move our international accounts back into balance:
Without vigorous and appropriate corrective measures, the situation
t the beginning of 1961 could easily have degenerated into a major
risis of confidence in the dollar -- and thus for the entire Free
orld payments system. You will recall that there were many at that
ime who expected exactly that to happen. We had to take action
romptly and firmly -- and we did.
First, we had to make clear -- and keep clear beyond any doubt -ur firm determination to maintain the value of the dollar. Soon after
aking office, President Kennedy called attention to the very large
)ld and other resources at our disposal, and pledged that we would,
E necessary, mobilize all of these resources to maintain the value of
le dollar. President Johnson has emphatically reaffirmed our
lchanging determination on this score.
- 3 -
7:
,
To support the position of the dollar in world markets, we set up
a series of new international financial arrangements to offset the
effects of potential currency speculation and to avoid unnecessary and
unsettling movements of gold. These actions included the revival of
U. S. official activity in both forward and spot markets for foreign
exchange, informal arrangements to discourage private speculation in
the London gold market, and development of a broad network of bilateral
agreements for mutual extension of swap credits. The Treasury late in
1962 also began to sell to foreign central banks special Treasury
securities denominated in foreign currencies.
Measures such as these continue to be vital to the defense of the
dollar, although they must not be confused with measures to reduce the
deficit itself. With the return to convertibility of all the major
currencies of the Free World, and the ease with which large sums of
money can now move from country to country, the types of defense I
have been talking about will be of substantial value even when the
United States has returned to payments equilibrium.
As for the actual deficit, this Adninistration launched a broad and
continuing program -- of both general and specific measures
designed
to eliminate it within a reasonable period of time.
The general measures are, of course fundamental, for they affect
our domestic economic condition and climate upon which any final
resolution of our payments difficulty must depend. The first and most
important of those measures is, of course, tax incentives to encourage
greater growth in our domestic economy and greater investment in
product improvement and plant modernization.
We took the first significant step in that direction in 1962 with
the depreciation reform measures and the enactment of the investment
credit. We will take a second and far-reaching stride in that direction
when we adopt the tax reduction bill which has just been agreed upon
by a joint House-Senate Conference Co~ittee. This bill not only
reduces rates, but also almost doubles the effectiveness of the
investment credit by restoring the full benefits of the Administration's
original proposal, which was substantially watered down in the final
version of the 1962 bill. Thus it should be instru~ental in ge~erating
the more rapid advances in productivity that are crucial to our continued
and growing competitiveness in markets both at ho~e and abroad. Equally
important, as our economy expands in response to the tax cut, and
em?loyment and productive efficiency climb, investment in the
United States will become increasingly more attractive to both foreign and
domestic capital.
7Q
i _
- 4 A second general measure has been to use monetary policy to move
short-term interest rates closer to rates abroad, thus reducing the
outflow of short-term capital, while at the same time continuing an
ample availability of domestic credit.
The third, and final, overall factor has been the maintenance of
price stability. In early 1962, the President's Council of Economic
Advisers set up non-inflationary guideposts for wage and price
decisions calling for voluntary action by both business and labor.
Th2 Council pointed out in its most recent Annual Report that responsible
and voluntary adherence to those guideposts has been an important factor
in maintaining the impressive price stability of recent years. The
absence of inflationary price increases in this country -- at a time
when our competitors in Western Europe and elsewhere have generally
experienced a rising price level -- may well prove in the long run to
be the most important single factor favoring a gradual return to
balance in the international accounts of the United States. It is
essential that price and wage decisions be made with this in mind.
It is these general policies, which affect our whole economy and
its ability to co~pete, that are decisive over the long run.
But more
direct and quick-acting measures have been reouired as well.
The Administration has spared no effort to help our private
economy exploit and expand its opportunities for increased sales to
foreign countries.
In every way possible -- principally through the
Department of Commerce -- we have exhorted, encouraged, and above all,
helped Am,~rican business to expand exports. The Export-Import Bank,
in cooperation with private insurers, has improved the credit
facilities available to American exporters to the point where they are
now as good as any in the world.
We have also dramatically r2duced the net impact on our payments of
overseas outlays by the government itself. We have done so by limiting
and wherever possible cutting -- our gross expenditures abroad for
military purposes, and by offsetting as much as possible of such
spending through arrangements for the sale of U. S.-produced military
equipment to major allied countries. We have also had excellent success
in making sure that as much as possible of our economic assistance
overseas goes to finance additional exports of U. S. goods and services
thus avoiding or minimizing any adverse impact on our balance of
payments. As a result, by the end of this year we will have made a
one billion dollar reduction in our 1962 rate of overseas government
expenditures -- and, in addition, fro~ 1961 through 1963 our receipts
from sales of military equipment overseas have more than doubled,
improving our payments positions by another $500 to $600 million a year.
- 5 Finally, with the full cooperation of many of the leading
industrial countries, we have carried out a series of transactions
to give us added time for our long-term corrective measures to take
effect. These include prepayments by foreign countries on debts owed
to the U. S. Government, advance payments made by allied governments
toward purchases of U. S. military equipment and our issuance -beginning in the last quarter of 1962 -- of special non-marketable
medium-term U. S. Government securities to foreign monetary authorities.
Last year we adopted other interim, short-term measures as well.
It was imperative that we do so. In the first half of 1963, as we all
know, a surge of capital outflow swamped the improvement in other areas
and swelled the deficit on regular transactions to an annual rate of
$4-1/2 billion. New issues of foreign securities, in particular, soared
to an annual rate of nearly $2 billion -- nearly twice the 1962 rate
and more than three times the average for the years 1959 through 1961.
As a result, last July President Kennedy announced an intensified program
of actions to deal with our balance of payments problem. In terms of
im~ediate results, the two key steps taken at that time were the
pruposal for an Interest Equalization Tax, and the half-percent increase
in the Federal Reserve rediscount rate.
The sharp recovery in our payments during the last half of 1963
with the improvement in our long and short-term capital accounts
amounting to between $1-1/2 and $2, about $2 billion at an annual
rate -- bears dramatic witness to the effectiveness of these measures,
particularly the Interest Equalization Tax. This, then, is the
background. What can it tell us abJut our payments outlook for the
years immediately ahead?
First of all, it is clear that the Interest Equalization Tax
proposal has thus far operated somewhat as a tourniquet, shutting off
the flow of American portfolio capital into foreign securities rather
completely, except for some issues that had been arranged prior to
announcement of the tax. We can hardly expect this situation to
continue -- nor, in the long run, would it be either sound or desirable.
Market activity will undoubtedly increase once the tax is enacted and
the market grows familiar with its workings. During th= course of
this year, therefore, we expect a resumption of portfolio capital
outflows, but only at about the level considered normal before the
abrupt increases of 1962 and early 1963.
Second, we must expect a considerable expansion in imports during
1964 to keep pace with the rising level of domestic activity.
Normally, we import at a rate approximating three percent of our gross
national product. Because of the size of our GNP, this small percentage
amounts to a substantial sum in terms of our balance of payments. We
must, therefore, intensify our efforts to ensure that our exports of
merchandise will grow at least as rapidly as O'Jr imports. Otherwise,
- 6 our foreign trade could become a source of weakness in our balance of
payments -- rather than, as in the past, a source of strength.
Third, we can expect continuing reductions in our overseas
governmental expenditures as the programs announced last summer take
effect. The full force of those programs will be felt in 1965. After
that, it will become increasingly difficult to squ~eze additional
reductions out of these accounts.
A very favorable portent for the future is the growing realization
on the part of responsible officials in all major countries that the
large imbalances in the free world's accounts of recent years should
not -- indeed, cannot -- be permitted to continue. From the European
point of view, surpluses aggravate what is already a serious problem
of internal inflation. And the United States has made absolutely
clear its resolute determination to eliminate its international
deficit. Thus, we all have strong incentives to join together in
improving payments positions wherever they are thrown out of kilter.
There are, of course, m3ny difficulties to be overcome, both in
surplus and in deficit countries, before deeds will match the desire
for mutual improvement. But mutual understanding and determination
are growing, and international cooperation is a real a~d potent force
for mutual adjustment.
Much has been accomplished already. We have greatly strengthened
confidence in the foreign exchange markets. Through cooperation with
other monetary authorities and the rising pattern of short-term interest
rates in the United States, we have substantially narrowed the
incentives for the export of short-term capital. Every effort must be
made both here and abroad to see that this cooperation continues and
intensifies. We must -- and will -- continue to seek a better
adjustm2nt of long-term capital floNs through the development of more
effective capital markets in other countries in order to reduce undue
concentration upon our own. The proposed Interest Equalization Tax
has already stimulated much greater European efforts in this area.
On the whole, and barring unexpected developm2nts, I anticipate
that 1964 will see a continuation of the progress W2 have seen since
last July. This would mean a substantial improvement over 1963 in our
deficit on regular transactions.
Beyond 1964, we might better speak of requirements rather than
forecasts. We must continue -- difficult though it may be -- to seek
out ways to further reduce direct government spertding overseas over
and beyond the improvement we can now foresee for 1965. We must
remain prepared to make such use of monetary policy as may prove
necessary to prevent unacceptable outflows of short-term funds.
- 7 Most important of all, we must improve our balance on commercial trade
and service accounts, and we must do this by selling more. We will,
I believe, be assisted in this effort by the growing demands of markets
in Europe and elsewhere. To take advantage of those markets, we
must continue to work for stable costs and prices eVen as we seek more
rapid growth in employment opportunities and in the gross national
product. I do not look for any sudden or dramatic easing in the
competitive pressure which will confront us from now on, but our
competitive position has improved slowly but steadily over recent
years. We will therefore need -- and I am confident we will see -redoubled efforts on the part of the individual businessmen, farmers,
and industrialists of this nation.
Our country has set as its aim the difficult task of eliminating
its balance of payments deficit without disrupting the trade of other
countries and without sacrificing American leadership in the defense
of the West, the economic growth of the less developed countries , or
the support of forward looking economic policies. There must be no
relaxation in governmental or private efforts until that goal has been
reached. I a~ confident there will be none.
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
we
or other disposition ot the bills, does not have any exemption, as such, and 10S8
tram 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 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
'.l'reasury 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 tor
which the return is made, as ordinary gain or loss.
Treasury Department Circular No. 418 (current revision) and this notice, prescribe the
te~s
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.
8?
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 ot the customers are set forth in such tenders.
Others than
banking institutions will not be permitted to submit tenders except for their
own account.
Tenders will be received without deposit from incorporated banks
and trust companies and from responsible and recognized dealers in investment
securities.
Tenders from others must be accompanied by payment of 2 percent of
the face amount of Treasury bills applied for, unless the tenders are accompanied
by an express guaranty of payment by an incorporated bank or trust company.
Immediately after the closing hour, tenders will be opened at the Federal
Reserve Banks and Branches, following which public announcement will be made by
the Treasury Department of the amount and price range of accepted bids.
Those
submi tting 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
Subject to these reservations, noncompetitive tenders for $ 200,000 or
(16)
less for the additional bills dated November 29, 1963
, ( 91 days remainfinal.
(17)
(18)
ing until maturity date on _ _Ma...;;..Y_2...,8....;,~1_9_6_4___ ) and noncompetitive tenders for
(19)
$ 100,000 or less for the
(20)
182 -day bills without stated price from anyone
(21)
bidder will be accepted in full at the average price (in three decimals) of accepted competitive bids for the respective issues.
Settlement for accepted ten-
ders in accordance with the bids must be made or completed at the Federal
Reserv~
Banks on February 27, 1964
, in cash or other immediately available funds or
(22)
in a like face amount of Treasury bills maturing February 27, 1964
• Cash
------~(~2~3r)~~---
TREASURY DEPARTMENT
Washington
FOR IMMEDIATE RELEASE,
February 19, 1964
TREASURY t 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
m
cash and in exchange for Treasury bills maturing February 27, 1964
51
of $ 2,101,877,000 , as follows:
fit
91 -day bills (to maturity date) to be issued
m
, in the amount
February 27, 1964
,
xm
in the amount of $ 1,200,000,000 , or thereabouts, represent-
Xffi
ing an additional amount of bills dated November 29, 1963
and to mature
,
5IX
, originally issued in the
May 28, 1964
m , the.additional and original bills
amount of $ 801,679,000
tfjij
to be freely interchangeable.
182 -day bills, for $ 900,000,000
UffX
February 27, 1964
tnt
,or thereabouts, to be dated
tii!
,and to mature
Augusttiil1964
•
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 Standard time,
Monday, February 24, 1964
ftd
Tenders will not be received at the Treasury Department, Washington.
Each tender
must be for an even multiple of $1,000, and in the case of competitive tenders the
price offered must be expressed on the basis of 100, with not more than three
TREASURY DEPARTMENT
Februpry 19, 1964
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 February 27, 1964, in the amount of
$ 2,101,877,000, as follows:
91 -day bills (to maturity date) to be issued February 27, 1964,
in the amount of $ 1,200,000,000, or thereabouts, representing an
additional amount of bills dated November 29, 1963, and to
mature May 28, 1964,
originally issued in the amount of
$ 801,679,000, the additional and original bills to be freely
interchangeable.
182 -day bills, for $ 900,000,090,
or thereabouts, to be dated
February 27, 1964, and to mature August 27, 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 ih 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 Standard
time, Monday, February 24, 1964.
Tenders will not be
received at the Treasury De?artinent, 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 tende.rs are
accompanied by an express guaranty of payment by an incorporated bank
or trust company.
D-1142
- 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 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,OOOor less for the additional bills dated November
29 1963
(91- days remaining until maturitf date o~
May 28, 1964)
and noncompetitive tenders for $ 100,00U
or lesa for the182-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 onFebruary 27, 1964,
in cash or other immediately available funds or in a like face
amount of Treasury bills maturing February 27, 1964.Cash and
exchange tenders will receive equal treatment. Cash adjustments
will be made for differences between the par value of maturing
bills accepted in exchange and the issue price of the new bills.
The income derived from Treasury bills, whether interest or
gain from the sale or other disposition of the bills, does not have
any exemption, as such, and loss from the sale or other disposition
of Treasury bills does not have any special treatment, as such,
under the Internal Revenue Code of 1954. The bills are subject to
estate, inheritance, gift or other excise taxes, whether Federal or
State, but are exempt from all taxation now or hereafter imposed on
the prinCipal or interest thereof by any State, or any of the
possessions of the United States, or by any local taxing authority.
For purposes of taxation the amount of discount at which Treasury
bills are originally sold by the United states is considered to be
interest. Under Sections 454 (b) and 1221 (5) of the Internal
Revenue Code of 1954 the amount of discount at which bills issued
hereunder are sold is not considered to accrue until such bills are
sold, redeemed or otherwise disposed of, and such bills are excluded
from consideration as capital assets. Accordingly, the owner of
Treasury bills (other than life insurance companies) issued hereunder
need include in his income tax return only the difference between
the price paid for such bills, whether on original issue or on
subsequent purchase, and the amount actually received either upon
sale or redemption at maturity during the taxable year for which the
return is made, as ordinary gain or loss.
Treasury Department Circular No. 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.
000
p, ~,- 2 -
the eomm.ndant of the Coaat Guard on matters
pe~taining
to the
In8titution.
The U. S. Coas t Guard Academy is one of the llatioo'. four
A1'\aed Pore•• acaderaies.
Appointment of cadets is on •
competitive basia with no geographical quotaa.
The Academy
providea a four-year course of instruction leading to a
lechelor of Science degree and a commission as an Ensign in
the
eo.st
Guard.
The other tour melllber. of the Advisory CoaI1littee whose
term. have not yet expired are:
Dr. Arthur S. Ad. . ; Washington, D.C.; Chai~
of the Adviaory Committee; former President
of the Univeraity of New Rampshire; former
President of the American Council on Education.
attorney;
Mr. A. GillDOre nues ;/Waabington, D.C.; for.er
Assi8tant Secretary of Treasury;
Mr. Frederick W. Richmond, New York City;
PreSident of F. W. Richmond and Co , I ne.;
Mr. Walter F. Sheehan, New Milford, Connecticut;
Head ~ster Canterbury School.
COAST
k dsp,
~
NEW MEMBERS APPOINTED TO
GUARD ACADEMY ADVISORY CCHatlEE
~
... J . . .
:;/:-"
PretU
_A'..-L",
.
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.
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r
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C)
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. -
,J"""5pn today announced the appoint
r t of
three new members to the Advisory COmmittee to the United Stat••
Coast Guard Academy, New London, Connecticut.
7
$'
~
Dr. William W. Hagerty, Pre8ident of Drexel
Institute;
Phila~elphia.
Mr. William J. Fitzgerald, prominent Boston
\
\'
_.
"
attorney and businessmsn. Attended the U. S.
Coast Guard Academy in 1943 and served in the
u. s. eoast Guard, both overseBs and in the
United States during World War II, leaving
the Service wi tb the rank of Lieutenant. He
resides at 165 Mt. Vernon Street, Boston.
)
"'.
"---)
Dr. Karl O'Lessker, Professor of Political Science
at \-'abash Co16e!J and former Legislative
Assistant to Matthew E. Welsh. Governor ot "
Indiana. Be resides at 417 West Main Street.
Crawfordsville, Indiana.
Ti~
appointments fl11 present vscanc1ea on the aeven-eaD
~
and run until June 30, 1966.
Ti.le duties of the Adviaory ec-attt. . are to .x-aloe the . . . .
of instruction at the
~st
Guard Aeadeay. and to advise
TREASURY DEPARTMENT
FOR IMMEDIATE RELEASE:
NEW MEMBERS APPOINTED TO
COAST GUARD ACADEMY ADVISORY COMMITTEE
secretary of the Treasury Douglas Dillon today announced the
appointment of three new members to the Advisory Committee to the
United States Coast Guard Academy, Ne~ London, Connecticut.
The appointees are:
Dr. William W. Hagerty, President of Drexel
Institute; Philadelphia.
Mr. William J. Fitzgerald, prominent Boston
attorney and businessman. Attended the U. S.
Coast Guard Academy in 1943 and served in the
U. S. C03st Guard, both overseas and in the
United States during World War II, leaving the
Service with the rank of Lieutenant. He resides
at 165 Mount Vernon Street, Boston.
Dr. Karl O'Lessker, Professor of Political Science
at Wabash College and former Legislative
Assistant to Governor Matthew E. Welsh of
Indiana. He resides at 417 West Main Street,
Crawfordsville, Indiana.
The appointments fill present vacancies on the seven-man group,
and run until June 30, 1966.
The duties of the Advisory Committee are to examine the course of
instruction at the Coast Guard Academy, and to advise the Comm,gndant
of the Coast Guard on matters pertaining to the Institution.
The U. S. Coast Guard Academy is one of the Nation's four Armed
Forces academies. Appointment of cadets is on a competitive basis
with no geographical quotas. The Academy provides a four-year course
of instruction leading to a Bachelor of Science degree and a commission
as an Ensign in the Coast Guard.
(OVER)
D-1143
- 2 The other four members of the Advisory Committee whose terms
have not yet expired are:
Dr. Arthur S. Adams, Washington, D.C.; Chairman of
the Advisory Co~ittee; former President of the
University of New Hampshire; former President
of the American Council on Education.
Mr. A. Gilmore Flues, attorney, Washington, D. C.;
former Assistant Secretary of the Treasury.
Mr. Frederick W. Richmond, New York City;
President of F. W. Richmond and Co., Inc.
Mr. Walter F. Sheehan, New Milford, Connecticut;
Head Master, Canterbury School.
000
- 9 -
United States by speeding up customs procedures, by encouraging
,
......
\
....
'
,
facelifting~fforts a~our various ports and, above all, by
1\
I,
greeting visitors to our shores with courteous, efficient personnel-f.)!
..
r'l-..
r
Ie" ',"/, .: ,
)o~
(
our dockside §Ubassa?or~ of good will.
1\
It is a source of real
s~isfaction
to those of us in the
Treasury Department to salute Customs employees on their l75th
7.,
Birthday.
To Assistant Secretary Reed, Commissioner Nichols, and
)
\
to all of you, I say for all of us in the Department--congratulations
on a job well done.
89
- 8 -
1963 they reached $16.5 billion.
2.)
Customs collections in 1939 totaled $350.4 million.
In 1963 they came to almost $1-3/4 billion.
3.)
Consumption entries filed in 1939 were 514,000.
In 1963 they were 1,528,000.
Last year, nearly 48 million vessels,
aircraft~tomobiles,
trucks, buses and other carriers entered our ports and airports or
crossed our~n~borderso
The number of passengers processed reached
164 million, or more than five persons every second.
~stoms
volume every
has indeed become a big business, and it's growing in
day:~
S i:.(../:
I/!/ l~
Your detennination to continue Ifindingl ways to improve your
~
,,~
7(·
service to the traveling public, and the international business
f\.
community is to be commended.
)
on your oars.
After 175 years, you~re not resting
Your efforts have been instrumental in furthering
the Administration's policy of encouragin~ flJ.ce~gn travel 'to the
'-"
I
•
'-.V
- 7 -
Inside, in the ~stoms laboratories, and out front -- where
it meets the traveling public -- the Customs Service has been
steadily at work ~proving and streamlining its service.
Intro-
duction of oral baggage declaration at all airports in the United
States has greatly speeded Customs formalities.
At
~~hn F~
Kennedy Airport in New York, the average time it now takes for
travelers is four minutes per person -- a record hard to match
anywhere in the world, especially in view of the fact that an
average of
U- , [;0
5yvee
U
persons arrive there daily.
Impressive)too, is the fact that despite a greatly increased
volume of business since the war the number of employees of Customs
~
is now somewhat less than it was 25 years ago.
There were about
10,000 in Customs Service in 1939, and there are about 9,000 in
the Service now, efficiently handling such increases in business
as these:
1.)
U. S. Dnports in 1939 were valUed at $2 1 billiDQ.
8
In
- 6 -
restrictions placed on the imports of processed meats.
The salami
was confiscated as a matter of routine, its gold filling quickly
detected.
/
Narcotics smuggling alone represents a major task for our customs
inspectors.
Seizures and arrests of narcotics and other smugglers
are constantly being made along the borders of the United States.
In
fiscal 1963 there were in all 6,855 seizures made, valued at $24.1
million.
~""I / :
f ". ~'
,e
.
~wonder ~\
/~
~-
"-<,~",,
mana Americans
are fully aware of the dangers
involved in this regular work of Customs inspectors.
Since 1900,
42 ~ustoms officers have been killed in the line of duty by violators
of Customs laws or by accident while on duty.
Forty-nine others
I\J./ /"
have been seriously wounded or injured by vio1ator~ 68 have been
I
seriously
injUred62hi~on duty.
In this same period, some 95
smugglers are known to have been killed in gun battles with Customs
Enforcement officers.
-5-
to edge a small parcel along the floor with his foot, or attempting
to pass a package to a by-stander is readily detected.
But even with this kind of equipment, inspectors have to
develop what amounts to a sixth sense to spot the incoming traveller
who may be attempting to smuggle something into the country ~"J
..
,."
... ,
. ,,, .
Not long ago) this sixth sense led an alert inspector to 0 ~ D~
Dr~
thoroughlY search a man and wife and their 3-month-old infant who
;-....
were returning from a
.
trLp
to
.
MexLco.
.~
~/)/
~HL~~search
eventually un-
1\
covered a quantity of marijuana -- neatly concealed in the baby 1 s
diaper.
Ul)'t:.. ()
Diapers are by no means the only hiding places~ie~ o~ by
would-be smugglers which must be ferreted out by our well-trained
inspectors.
Smugglers have utilized hat bands, coat linings, auto-
mobile panels, hollowed-out-heelst:!e~ and even a piece of salami.
1\
One hapless traveler made the mistake of attempting to secret a
/u/
$475 gold _
L
b
in a piece of salami, ~vidently unaware ~ the
- 4 Herman Melville, author of "Moby Dick", was an inspector in
the New York Customhouse for 20 years, where he was paid the sum
of $4.00 a day.
The same rate of pay was earned by the famous
poet Edward Arlington Robinson who worked as a special agent at the
.J
,
,
v'
port of New York.
I wonder how many of the 9,000 men and women~ho ar~~currently
in the Service are at work on manuscripts that will one day become
literary classics, or at least dramatic television or movie scripts?
Certainly you have the material at hand.
Take the work of the
Customs Agency service, for example -- the enforcement arm of the
Bureau that wages an around-the-clock campaign against smuggling.
Nowadays plain clothes, special agents can and do make use of the
very latest investigatory and surveillance aids.
At ~ John F. Kennedy Airport in New York, for instance,
closed circuit television cameras permit behind-the-scenes agents
to observe passengers' movements on a TV
screen.Any~e ~ttemptina
J 77
a4&st year r
to the efficiency,
.---~--.
dedicatio~and
energy of the men and women in
/-1..IC (-I
the Service) W
----
I think this simple statistic is eloquent tribute
....-
..\..-
not
""
h~ some very distinguished alumni.."
£!Etsto
"""'-"
. . " . . ..
......
l~ny
~ ~ i~"~'l, ,~~:.
t(.;
•.
.•
~~~-""'":IIiiiI;,.....oA
;..
t (... . . . .
of YOU"reCall that Nathaniel Hawthorne was once a measurer in
V
the Boston customhouse,
at an annual salary of $1,500.
became
surv~or
He later
of customs, and it is said that during his tour of
duty he came upon~umerou~old records that inspired him,to write
his famous novel, "The Scarlet Letter."
The Service in those days
evidently didn't have anything approaching the thorough training
programs it has today.
At one point Hawthorne wrote his friend
Longfellow that he didn't believe he would have any difficulty
fulfilling his duties "since, I don't kIX>W what they are.
- 2 If you Customs ~fficials think life is complicated today,
imagine what it must have been like 182 years ago:
the states of
New York, New Jersey, and Connecticut placed heavy imposts on such
things as chickens, eggs and feed.
cabbages and turnips were appraised.
Connecticut wood was measured;
Duty had to be paid on vir-
tually everything shipped between the states.
It wasn't until 1789 that this chaotic state of affairs was
corrected, when the new Constitution gave the federal government
the muscle it needed to, "lay and collect taxes, duties imposts and
excises, -- (adding that) all duties, imposts and excises shall be
uniform throughout the United States."
In the early days customs receipts provided the bulk of our
Nation's revenues.
Two million dollars of the total of $2~ million
collected in 1789 came from customs duties.
That two mill'ion do11altR
compares with customs collections last year of almost 1-3/4 billion
dollars.
It is impressive to note in p~sing that despite this
".
I
/,
I'
~
/
).
!
I
'
l •. ~ , .
FOR RELEASE A. M. NE\-lSPAPERS
SUNDAY, FEBRUA:~~S16~4THE HONORABLE DOUGLAS DILLON
SECRETARY OF THE TREASURY
AT A DINNER MARKING THE l75th ANNIVERSARY
OF THE U. S. CUSTOMS SERVICE
,.~~SATURDAY, FEBRUARY 22, 1964, i;NI')1
:/ HOTEL SHERATON PARK, WASHINGTON, D.C. I
!S!
~
Mr. Chairman, Members of Congress, Commissioner Nichols,
Ladies and Gentlemen:
It is a privilege to be among the (§nore~ guests at this
gathering, which marks not only the birthday of the father of
our country but also the l75th Anniversary of the United States
Customs Service.
Legislation enacted by the 88th Congress calls
on the American people to "observe this anniversary with appropriate
ceremonies and activities", and President Johnson has proclaimed
1964 flU. S. Customs Year."
4---
The Customs Service has for
one~~hree-quarter
centuries
stood guard at our gates, and) as Franklin Roosevelt observed , "its
history embodies the history of both our domestic growth and our
foreign relations."
P
//4d
TREASURY DEPARTMENT
Washington
FOR RELEASE SUNDAY NEWSPAPERS
PEBRUARY 23, 1964
REMARKS OF THE HONORABLE DOUGLAS DILLON
SECRETARY OF THE TREASURY
AT A DINNER MARKING THE 175th ANNIVERSARY
OF THE U. S. CUSTOMS SERVICE
HOTEL SHERATON PARK, WASHINGTON, D. C.
SATURDAY, FEBRUARY 22, 1964, 7:00 P.M., EST
It is a privilege to be among the guests at this gathering, which
marks not only the birthday of the father of our country but also the
l75th Anniversary of the United States Customs Service. Legislation
enacted by the 88th Congress calls on the American people to "observe
this anniversary with appropriate ceremonies and activities", and
President Johnson has proclaimed 1964 "U. S. Customs Year."
The Customs Service has for one and three quarter centuries
stood guard at our gates, and, as Franklin Roosevelt observed, "its
history embodies the history of both our domestic growth and our
foreign relations."
If you Customs officials think life is complicated today, imagine
what it must have been like 182 years ago: the states of New York,
New Jersey, and Connecticut placed heavy imposts on such things as
chickens, eggs and feed. Connecticut wood was measured; cabbages
and turnips were appraised. Duty had to be paid on virtually everything shipped between the states.
It wasn't until 1789 that this chaotic state of affairs was
corrected, when the new Constitution gave the federal government the
muscle it needed to, "lay and collect taxes, duties imposts and
excises, -- (adding that) all duties, imposts and excises shall be
uniform throughout the Uni ted States."
In the early days, customs receipts provided the bulk of our
Nation's revenues. Two million dollars of the total of $2~ million
Collected in 1789 came from customs duties. That two million dollars
compares with customs collections last year of almost 1-3/4 billion
dollars. It is impressive to note in passing that despite this
tremendous increase in collections, the actual cost of collecting a
dollar of Customs revenues has dropped over the past 17 years by an
astonishing 29 per cent. I think this simple statistic is eloquent
tribute to the efficiency, dedication, and energy of the men and women
in the Service which has some very distinguished alumni:
1144
- 2 Many of you will recall that Nathaniel Hawthorne was once a
measurer in the Boston Customhouse, at an annual salary of $1,500.
He later became surveyor of customs, and it is said that during his
tour of duty he came upon old records that inspired him to write his
famous novel, "The Scarlet Letter." The Service in those days
evidently didn't have anything approaching the thorough training
programs it has today. At one point Hawthorne wrote his friend
Longfellow that he didn't believe he would have any difficulty fulfilling
his duties "Since, I don't know what they are."
Herman Melville, author of "Moby Dick", was an inspector in the
New York Customhouse for 20 years, where he was paid the sum of
$4.00 a day. The same rate of pay was earned by the famous poet
Edward Arlington Robinson who worked as a special agent at the Port
of New York.
I wonder how many of the 9,000 men and women currently in the
Service are at work on manuscripts that will one day become literary
classics, or at least dramatic television or movie scripts?
Certainly you have the material at hand. Take the work of the
Customs Agency Service, for example -- the enforcement arm of the
Bureau that wages an around-the-clock campaign against smuggling.
Nowadays, plain clothes, special agents can and do make use of the very
latest investigatory and surveillance aids.
At John F. Kennedy Airport in New York, for instance, closed
circuit television cameras permit behind-the-scenes agents to
observe passengers' movements on a TV screen. Anyone attempting to
edge a small parcel along the floor with his foot, or attempting to
pass a package to a by-stander is readily detected.
But even with this kind of equipment, inspectors have to develop
what amounts to a sixth sense to spot the incoming traveller who may
be attempting to smuggle something into the country. Not long ago,
this sixth sense led an alert inspector to order a thorough search of
a man and wife and their 3-month-01d infant who were returning from a
trip to Mexico. The search eventually uncovered a quantity of
marijuana -- neatly concealed in the baby's diaper.
Diapers are by no means the only hiding places used by would-be
smugglers which must be ferreted out by our well-trained inspectors.
Smugglers have utilized hat bands, coat linings, automobile panels,
hollowed-out-heels -- and even a piece of salami. One hapless
traveler made the mistake of attempting to secret a $475 gold pin in
a piece of salami, evidently unaware of the restrictions placed o~
the imports of processed meats. The salami was confiscated as a
matter of routine, its gold filling quickly detected.
- 3 Narcotics smuggling alone represents a major task for our Customs
inspectors. Seizures and arrests of narcotics and other smugglers are
constantly being made along the borders of the United States. In
fiscal 1963 there were in all 6,855 seizures made, valued at $24.lmillon.
Too few Americans are fully aware of the dangers involved in this
regular work of Custo~s inspectors. Since 1900, 42 Customs officers
have been killed in th2 line of duty by violators of Customs laws or
by accident while on duty. Forty-nine others have been seriously
wounded or injured by violators and 68 have been seriously injured on
duty. In th~s same period, some 95 smugglers are known to have been
killed in gun battles with Customs Enforcement officers.
Inside, in the Customs laboratories, and out front --where it
m.eets the traveling public -- the Customs Service has been steadily at
work improving and streamlining its service. Introduction of oral
baggage declaration at all airports in the United States has greatly
speeded Customs formalities. At Kennedy Airport in New York, the average
time it now takes for travelers is four minutes per person -- a record
hard to match anywhere in the world, especially in view of the fact that
an average of 4,OJO persons arrive there daily.
Impressive, too, is the fact that despite a greatly increased
volume of business since the war, the number of employees of Customs
is now somewhat less than it was 25 years ago. There were about
10,000 in Customs Service in 1939, and there are about 9,000 in the
Service now, efficiently handling such increases in business as these:
1.) U. S. imports in 1939 were valued at $2.1 billion.
they reached $16.5 billion.
2.) Customs collections in 1939 totalled $350.4 million.
1963 they came to almost $1-3/4 billion.
3.) Consumption entries filed in 1939 were 514,000.
they were 1,528,000.
In 1963
In
In 1963
Last year, nearly 48 million vessels, aircraft, automobiles,
trucks, buses and other carriers entered our ports and airports or
crossed our borders. The number of passengers processed reached
164 million, or more than five persons every second.
Your determination to continue seeking ways to improve your
service to the travelling public, and to the international business
community, is to be commended. After 175 years, you're not resting
on your oars. Your efforts have been instrQmental in furthering the
Administration's policy of encouraging foreign travel to the
- 4 united States by speeding up Customs procedures, by encouraging
face-lifting of our various ports and, above all, by greeting visitors
to our shores with courteous, efficient personnel -- our dockside
dispensers of good will.
It isa source of real satisfaction to those of us in the Treasury
Department to salute Customs employees on their l75th Birthday.
To Assistant Secretary Reed, to Commissioner Nichols, and to all of
you, I say for all of us in the Department -- congratulations on a
job well done.
000
TREASURY DEPARTMENT
WASHINGTON
FOR RELEASE P.M. NEWSPAPERS
MONDAY, FEBRUARY 24, 1964
INTRODUCTION BY THE HONORABLE DOUGLAS DILLON
SECRETARY OF THE TREASURY
OF THE HONORABLE WILLARD WIRTZ
SECRETARY OF LABOR
AT THE AMERICAN BANKERS ASSOCIATION'S SYMPOSIUM ON EMPLOYMENT
HOTEL MAYFLOWER, WASHINGTON, D.C.
MONDAY, FEBRUARY 24, 1964, 9:30 A.M., EST
President Johnson unfortunately could not be with you today.
However, he has asked me to bring you the following message:
"I am sorry that I cannot greet you personally this
morning as I had hoped to do, but I am pleased that Secretary
Wirtz and Secretary Dillon can act as my representatives.
"A year ago, the American Bankers Association sponsored
a Symposium on Economic Growth.
"The subject of employment -- which you are examining
today -- is no less vital to our Nation.
"Our labor force is growing more rapidly every year. Tax
reduction will provide many new jobs, but we will also have
to find new ways to provide more jobs for those who need them
particularly the long-term unemployed. That will be one of the
critical struggles in overcoming poverty in the United States.
"I welcome your efforts to increase public understanding
of this prob lem. "
Signed - Lyndon B. Johnson
With the exception of President Johnson himself, I can think of
no man more capable of outlining the overall employment problem than
Secretary Wirtz.
D-1145
-2I am sure that he will agree with me when I say we have already
taken a tremendous stride forward 'in improving employment opportunities in the United States with the Revenue Act of 1964. This
bill can be expected to create millions of additional jobs each year
as it takes effect. Moreover, the stimulus that the tax bill gives
to aggregate demand will provide a far better general economic setting for our various training, retraining, and other programs aimed
at structural unemployment.
I am also sure that Secretary Wirtz agrees with me that tax
reduction, by itself, will not be enough to solve our unemployment
problem. Our needs for new jobs will continue to expand. In addition to workers who have been squeezed out of the labor force by continuing slack in the economy and who will rejoin the labor force as
we step up expansion, normal labor force growth will exceed one million a year in the years just ahead. And, beyond this, we will need
about two million new jobs each year to offset the labor-saving effects of rising output per worker.
Moreover, the tax cut will not, by itself, solve our continuing
severe problem of matching up our available workers with available
jobs. As production processes and demand patterns continue to change
in this dynamic economy of ours, many of those who are looking for
their first jobs or who have been displaced by technological change:
do not have enough skills or the right skills;
are not in the right places;
or otherwise lack access to the jobs that are open.
Willard Wirtz is the very personification of the Administration's
conviction that, by means of both private and public policies, we must
join together to meet this problem. We are determined, indeed, to
meet the whole unemployment problem -- both the creation of ~ jobs
and the better matching of workers and jobs.
We hope that as a result of the tax cut, unemployment will be
down to five percent by the end of this year. But that will still
leave about a million people who will be out of work for 15 weeks •
or more in 1964. Whether you call it long-term unemployment, hardcore unemployment or structural unemployment, it remains an intolerably high figure. President Johnson and all of us in his Administration are determined to reduce it.
I am not so sanguine as to expect that Secretary Wirtz has
an easy solution up his sleeve, but I am confident that he can
provide valuable insights into the problem.
000
.--,
POI' 1f.LI..\ 3l A. M.
!WI"", \i!brwu7
H"~ I '
;'1. "E j: .,
February
"a 196£1. _
)
24, 196i.
n. f'NItSury e~,ttl"'tMent announced 1&31# ewn1.n.1 th.:lt the t,e~ f~r t,\-.. o s.r1.e. It
fNuUI'J bills, one series to . ..e rul $lCldit1QftAl issue of the bills cl.~"~~ r~OYember 2Y,
196) and t.he oU*, sene! t') be de.ted ::ebrWi%")' 21, 19.64, wb10b ..n /)f.fcu'ed on 1'. . . .
." i9, wre ~ at, the·.deral ii8~r"V8 ~<.aDka Oft .l'ebrwlr,y 24.'~n.~ro were iartW
tor $l,200,U<X>,OOO, or t.henr<tiouts, of ;11-dt\Y biUs and tor $900,OOv, j,A), or t.hen",
~ 182-dq bill.. Ti. dat:.tils of t.he 1Iw'O seri.•a are as follovaa
91-~ 'rru~Ui\U7 bills
liAQ ')I' ACC:wr f;D
c.utPl\~Tmv~: ~In~ I
.a~u:r¥¥ 1-:.,. 28, 1$
'rice
99.107
!
ri14h
Lov
"rage
!I
)9.102
~~9.10)
!I
4p~lrox. (t4uiT.
r nnw ...te
).531~
J.55J~
J.Sh·l;~
.21
1/
1
llJ3-da;r
I
-t!!1.a&
:
i'r1!!
96.1J1
98.U1
98.121
frO&'I,SUl"J
A~!g\1!t. 27.
!V
1'3 .
bill.
~.
A.j>·Prox.
AftnU¥
~"
).69S:'
).1OS~
).10])j
f.uept.1.ng one tAndIIr 01 :~2,(X)(),;)JOJ
E:xoei)t~ -t,"Q t.encIIft tot-aling ,,2$0,000
20-' of the MIIlOWIt. of 91-dq bUls bid for at the low pr1ee we aooep,"
97:{, of the lWOUftt :>1 lt2-da;y bills bid for ~,t t,he low priM was :4.~aept.od
TREASURY DEPARTMENT
i'OR RELEASE A. M. NEWSPAPERS,
~esday, February
25, 1964.
RESULTS OF TREASURY'S WEEKLY BILL OFFERING
The Treasury Department announced last evening that the tenders for two series of
'reasury bills, one serie s to be an additional issue of the bills dated November 29
,963, and the other series to be dated February 27, 1964, which were offered on Feb~ry 19, were opened at the Federal Reserve Banks on February 24. Tenders were invited
'or $1,200,000,000, or thereabouts, of 9l-day bills and for $900,000,000, or thereabouts,
,f l82-day bills.
The details of the two series are as follows:
ANGE OF ACCEPl'ED
(JotPETITIVE BIDS:
!I
9l-day Treasury bills
:
l82-day Treasury bills
maturing }lay 28, 1964
:
maturing August 27, 1964
Approx. Equiv.
:
Approx. Equiv.
Price
Annual Rate
:
Price
Annual Rate
High
99.107 !I
3.533%
98.132 bl
3.695%
Low
99.102
3.553~
98.127 3.705%
Average
99.103
3.547% !I
98.128
3.703 !I
Excepting one tender of $2,000,000; £/ Excepting two tenders totaling $250,000
20% of the amount of 9l-day bills bid for at the low price was accepted
97% of the amount of l82-day bills bid for at the low price was accepted
nAL TENDERS
FOR AND ACCEPTED BY FEDERAL RESERVE DISTRICTS:
Accepted
: Applied For
Accepted
Applied For
District
Boston
$ 12,329,000 $ 12,329,000
34,888,000
$ 54,319,000 $
New York
689,544,000
1, 3ll, 503, 000
744,762,000
1,463,362,000
Philadelphia
2,561,000
7,561,000
12,729,000
27,729,000
Cleveland
14,436,000
14,436,000
22,939,000
22,955,000
Richmond
1,895,000
1,895,000
15,573,000
15,573,000
Atlanta
9,680,000
10,916,000
21,434,000
25,594,000
Chicago
45,006,000
125,666,000
99,438,000
181,638,000
4,176,000
St. Louis
6,176,000
26,890,000
32,890,000
Hinneapolis
6,097,000
3,597,000
9,590,000
17,190,000
9,404,000
Kansas City
10,594,000
33,327,000
53,312,000
4,667,000
8,667,000
Dallas
20,263,000
30,063,000
161,906,000
104,577,000
San Francisco
159,972,000
213,272,000
$2,137,897,000 $1,201,805,000 ~/ $1,677,746,000 $901,872,000 ~
Includes $205,530,000 noncompetitive tenders accepted at the average price of 99.103
Includes $55,311,000 noncompetitive tenders accepted at the average price of 98.128
On a coupon issue of the same length and for the same amount invested, the return on
these bills would provide yields of 3.64;i, for the 91-day bills, and 3.84%, for the
l82-day bills. Interest rates on bills are quoted in terms of bank discount with
the return related to the face amount of the bills payable at maturity rather than
the amount invested and their length in actual number of ~s related to a 360-day
year. In contrast, yields on certificates, notes, and bonds are computed in terms
of interest on the amount invested, and relate the number of days remaining in an
interest payment period to the actual number of days in the period, with semiannual
compounding i f more than one coupon period is involved.
D-l146
APPLIF~
l"ebnJar1
The details of
thi~
issue are as follow.:
To~l applied for - S2,412,275,OOO
1,000 ,4~5 ,',)00
Total accepted
(includes $19,402,000 en\erect . . .
nonoampetltl ve ba.i. aDd aoeept" 1.D
f'.til at the average priee .~ below)
(r;xcepting one tender ot t),SQo,OOO)
Ran68 ,,1 accented CC»'lpetit.ive bide:
cJ6 225
:!lgh
~vera~.
~.207
)6.21h
(14:' of tile Q:r;o,mt
Federal Itv,..:rve
1l1.tr1ct
!S08ton
t~
Xork
PhUadalphia
Cl •••land
IUo!IIOnd
At.lanta
Chicago
St. Louie
Minneapolis
1anN. City
l1allu
San Franchco
!I
:~'''\livalEmt
:."OS
Low
2S, 1961a
\)ic1
~
rate of dLaoount approx. }. 7S4~ per aam\ll
"1\"
'!
n
,t
ms.
tf
).
ft
3.76S..
II
!I
"
for at tl'J.e low price wae accept.ecl)
'I 0 tal
iltonl1.ed
,
;;
tot.al.
for
40,950,000
1,579,921,000
10,)00,000
49,!)U,OOO
6,65S,ooo
5,920,000
212,573,000
11,633,000
19,660,000
5,)01,000
16,219,000
AeC!!pMd
•
20,150,000
739,221,000
)00,000
12 ,Sll,CXJO
6.6SS,ooo
1,820,000
lOS ,ll),000
8,8)3,000
1),680,000
2,801,000
2,)S',cx>o
11.7,412,000
66,48,000
:;,2,Ul2,275,OOO
U,ooo,49S,ooo
coupon lSSlJe of thr:- S3..~ length and f'or the same amoUDt inYeated, tot. returD.
theae b111e would proTide a yield of 3.9J~. Intereat rat •• on bllle .... qucrt.ed 11 ,
teraa ot bank discount vitn the return related to the race aollllt ot "he bUll pI~:
at uturltl rather than the amount invested and their 1eugt.b in aetMl n~ 01 _
related to a 3W-da.,. yea!". In contrast, yields on ce.rt..iticat. . , DOtea, aad boDdl III
COIr:put~d in te:r:;e of interest on the ClJ\O ..;nt invested, aod. relate "be naMr
dI7I
reaai.nUL' in an intere8t oaJlf~nt !'>flria..i t:) the actual naber of da18 1D "be pert.04,
witt. sell1.L"Ulual com'Xl . :ndin,; if !'t!'){"'E: than O~ coupon period 1. imolyecl.
)n •
or
TREASURY DEPARTMENT
R RELEASE A. M. i\1EWSPAPERS,
dnesday, February 26, 1964.
February 25, 1964
RESULTS OF TREASURY'S ONE-YEAR BILL OFFERING
The Treasury Department announced last evening that the tenders for $1,000,000,000,
thereabouts, of 362-day Treasury bills to be dated March 3, 1964, and to mature
bruary 28, 1965, which were offered on February 18, were opened at the Federal Reserve
,nks on February 25.
The details of this issue are as follows:
Total applied for - $2,412,275,000
Total accepted
1,000,495,000
Range of accepted competitive bids:
High
(Excepting one tender of $3,500,000)
96.225 Equivalent rate of discount approx. 3.754% per anmnn
96.207
"
It"
"
"
3.772%"
II
96.214
"
""
"
"
3. 765%"
"
Low
Average
(14%
(includes $19,402,000 entered on a
noncompetitive basis and accepted in
f1111 at the average price shown below)
1./
of the amount bid for at the low price was accepted)
Federal Reserve
District
Bostor.
New York
Philadelphia
Cleveland
RicInnond
Atlanta
Chicago
St. Louis
l1inneapo1is
Kansas City
Dallas
San Francisco
TOTAL
Total
Applied for
$ 40,950,000
1,879,921,000
10,300,000
49,511,000
6,655,000
5,920,000
212,573,000
17,833,000
19,680,000
5,301,000
16,219,000
147,412,000
Total
Accepted
$ 20,750,000
739,221,000
300,000
32,511,000
6,655,000
1,820,000
105,113,000
8,833,000
13,680,000
2,801,000
2,359,000
66,452,000
$2,412,275,000
$1,000,495,000
On a coupon issue of the same length and for the same amount invested, the return on
these bills would provide a yield of 3.93~. Interest rates on billf are quoted in
terms of bank discount with the return related to the face amount of the bills payable
at maturity rather than the amount invested and their length in actual number of days
related to a 360-day year. In contrast, yields on certificates, notes, and bonds are
computed in terms of interest on the amount invested, and relate tne number of days
remaining in an interest payment period to the actual number of days in the period,
With semiannual compounding if more than one coupon period is involved.
D-llL7
-; n-"
.....
l .. }
- 2 -
[( President Johnson 14no the Congre •• have managed
the g08l
~hich
~ achieve
President Kennedy sought -. n tax bill which weal.
benefit all Americana -- now and in the years to come.
~
..
~J (he tal( bill.
II The louse Ways ttnd Means Coamittee worked lonl and hard t.
\Iolrite
tn:
sonne rm6 prudent ts}-: btll embodying the btU•• t lDOG_
!;
J.n I-he !:doostory of: the United States.
CUt.
tl T"l'l(;
~enete
U Tl-.l1:t~ .bl. 11
'::i
FOUl£mce \JO!J1i::J11
. • • t t ee
h'l.C.i.l, came
11 l~
o;JO
l~~
01.lt OJ.:. Cue
1 d 1ong
wor,,-\.e
"\oo
1• i
<.;ouJ::crence
an d
....
_-..1 t 0
IMI~"
l1Ip~ d
at 111
further.
/ ("f'1...is
1c~~_s
; 1f.tton, by substantially reducing both iacllvl_1
J.U
and c:orporrltc income tn:>:es .rAtl alon8 the line, and by delo, •
launch
II
brillillnt. net, chap~ar :to the economic hi.tory of the
Uni cei.J St [·t~s.
TREASURY DEPARTMENT
FOR IMMED lATE RELEASE
STATEMENT BY SECRETARY DILLON ON THE TAX BILL
Treasury Secretary Dillon today issued the following statement:
"I am delighted with the action of the House in
approving the tax bill.
"The House Ways and Means Committee worked long and
hard to write a sound and prudent tax bill embodying the
biggest income tax cut in the history of the United States.
"The Senate Finance Committee also worked long and
hard to perfect and improve the bill.
"The bill which came out of the Conference is improved
still further.
"This legislation, by substantially reducing both
individual and corporate income taxes all along the line,
and by doing so in a fiscally responsible manner, will,
I am convinced, help launch a brilliant new chapter in the
economic history of the United States.
"President Johnson and the Congress have managed
to achieve the goal which President Kennedy sought -a tax bill which would benefit all Americans -- now and
in the years to come."
000
D-1148
.... '"
: '" I
-'-
TABLE D
1964
Married Couple with Two 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
300
456
720
1,196
1,664
2,213
2,772
3,410
4,821
6,420
10,188
14,576
24,952
36,720
$
1964 Tax
247
380
621
1,054
1,480
1,980
2,487
3,065
4,341
5,779
9,090
13,033
22,506
33,131
$
Tax Cut
% Tax Cut
53
76
99
142
184
233
285
345
480
641
1,098
1,543
2,446
3,589
18%
17
14
12
11
11
10
10
10
10
11
11
10
10
$
1/ Some of the irregularity in progression of percentages is due to
rounding.
Lble 4
Married Couple with Two Dependents,
with Typical Average Itemized Deductions
Inccee
(Wages & Salaries)
Present tax
$
300
456
720
1,196
1,664
2,213
2,TI2
3,410
4,821
6,420
10,188
14,576
24,952
36,720
5,000
6,000
7,500
10,000
12,500
15,000
17,500
20,000
25,000
30,000
4.0,000
50,000
75,000
100,000
1964 Tax
.
~-~~-
$
-=r~"'--~
~
Tax cut
0
0
Tax cut 1
= __ -_ _
··....,,~=~-""""_"'~-'--O-...,.....,--=.,.-=c-=-
$ ~·l.-'f7
3!R380
~ (''l-1
l-;e5'iIOS:'f
l: , lJTT 1'IRo
1,9161980
2J I183 l.,(-S7
~ 3oC.S'"
4,33e- '/3'ij
7-J+6s) S"11'
9,018 9of'o
?5- S3
* *" 99
l:9a-
7(.
~ IVz.
1'&r- Igtf
""'-00_'"
'-.-='~.--=-_~~r.
;_~'"
18;,
17
14
12
11
11
ffl l.33
~ l-KS'
10
~ffKo
~ ''11
1-,11:& I d 1fJ'
10
10
11
~.3'f~
13,01313033 ~{'>Y.3
22, 1t81t l.-lS""'O(. 2, I;'~ 2'1 YI.
33,19133131 -3 ,el3- 3s f 9
..,,~~.~_-
1/
.
=
~,"=",-_-.~o:-
---=r-._--.,.-_--~_=_,....~-~~-'("=
10
11
10
10
__
--._.."...-~~
Some of the irregularity in progreseion of percentages is dUe to rouno.ing.
111
TABLE C
1964
Married Couple with Tvo Dependents,
with staDdart De4.. tion
Incolle
(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
$
0
0
0
60
240
420
600
877
1,372
1,966
2,616
3,350
4,124
..
1964 'fax
0
0
0
0
$ 160
325
500
750
1,200
1,739
2,326
2,987
3,683
·
·•
Tax cut
$
60
80
95
100
127
172
227
290
363
441
·••
···
~ Tax cut
1~
33
23
17
14
13
12
11
11
11
~l'a~'lr>c
~)
1
1964
1964
Income
Wa es & Salaries
$
1,000
1,500
2,000
3,000
4,000
5,000
6,000
1,500
10,000
12,500
15,000
11,500
20,000
60
150/"
246
4'22
/f 620
818
1,048
1,405
2,096
2,982
4,002
5,153
6,412
$
,_i'
,
"
i
./'
/"
I'
;"
Tax
Tax cut
$ 16
gr
$ 44
53
60
62
80
3
540
120
928
1,251
1,812
2,666
3,565
4,569
5,690
80
"'-
..
98
120
--154
224
316
431
584
122
;, Tax cut
13;'
35
25
15
13
12
11
11
11
11
11
11
11
-;..J.. 4__
f)
-_
TABLE B
1964
Married Couple with No Dependents
Y1~
s.ae a r4
.
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
De411C~i~.
.
Present tax
1964 Tax
0
$ 30
120
300
480
660
844
1,141
1,636
2,278
2,960
3,710
4,532
0
0
$ 64
226
395
554
120
990
1,440
2,021
2,636
3,311
4,049
••
Tax cut
$
30
56
14
85
106
124
151
196
251
324
399
483
~
Tax cut
10~
41
25
18
16
15
13
12
11
11
11
11
able
1
1964
Married Couple with No Dependents
Y1~ S. . . .rd. De411Ctiell
:
Present tax
$
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
0
$ 30
120
300 ,,.t""
480/"/
,j
'f"
,~
/.{,141
, 1,636
2,218
2,960
3,110
4,532
~
0
0
$ 64
226
5
5
720
990
1,440
2,021
2,636
3,311
4,049
$
'.
30
56
14
85
106
124
151
196
257
324
399
483
Tax cut
10~
41
25
18
16
15
13
12
11
11
11
11
.; 1 ?
-. -l _
TABLE A
1964
Single Taxpayer,
with Standard Deduction
Incoae
(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,~2
4,002
5,153
6,412
1964 Tax
16
97
180
360
54.0
120
928
1,251
1,812
2,666
3,565
4,569
5,690
$
..
Tax cut
$ 41t.
53
60
62
80
~
120
154
224
316
431
584
122
·
·•
" Tax cut
13"
35
25
15
13
12
11
11
11
11
11
11
11
Comparison of schedules under present law and under the Revenue Bill of 1963
Taxable income
bracket (~ thousands}
Sing1.~
Married
person
(joint)
0
·5
1.0
1.5
2
4
6
8
10
12
14
16
18
20
22
26
32
38
44
50
60
70
-
-
-
-
--
0·5
1.0
1.5
2.0
4
6
8
10
12
14
16
18
20
22
26
32
38
3
4
8
12
16
20
24
28
32
36
40
44
52
64
-
60
76
88
100
-
70
120
80
90
-
44
50
- 100
100 - 150
150 - 200
200 and. over
80
90
0
1
2
-
-
--
-
-
-
Present
law rate
~.
·
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
140
160
180 200
300 400 and over
-
·
Office of the Secretary. of the 'l'i'easury}
Office of Tax Analys~s
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
Revenue Bill of 1963
Percent
of present
Rate
rate
14
15
16
17
19
22
25
28
32
36
39
42
45
48
50
53
55
58
70
~
t-
77·5
85 )
86
85
83
83
84
84
83
84
85
86
85
85
85
84
83
83
60
62
64
82
81
81
79
79
78
66
68
69
70
70
70
77
October
3, 1963
(;.
.-f
Individual Income Tax Rate Schedules for 1964
Taxable income
bracket ($ tnousands)
Single
Married
person
( joint)
0.0 0·5 1.0 1.5 2 4 6 8 10
12 14 16 18 20 22 26 32
38 44 50 60
10
80
90
100
150 200 and
-
-
--
0.5
1.0
1.5
2.0
4
6
8
10
12
14
16
18
20
22
26
32
38
44
50
60
10
80
90
100
150
200
over
0 1 2 3
4 8 12 16 20 24 28
32 36 40 44 52
64
16 88
100
120
140
160
180
200
300 400 and
-
-
-
-
Pres
rat
; --- 1964 ....
Rate a
1
2
3
4
8
l2
16
20
24
28
32
36
40
44
52
64
16
88
100
120
140
160
180
200
300
400
over
Office of the Secretary of the Treasury,
Office of Tax Analysis
20
20
20
20
22
26
30
34
38
43
41
50
53
56
59
62
65
69
12
15
18
81
84
81
89
90
91
16.0
16.5
11·5
18.0
20.0
23·5
27.0
30.5
34.0
31·5
41.0
44.5
41.5
50.5
53.5
56.0
58.5
61.0
63.5
66.0
68.5
11.0
13.5
15·0
16.5
16.5
11·0
-<
.~
~
.J-
I
I
.."
_'
TABLE X!I
Married Couple, Both Over 65,
Typical Average Itemized Deductions
~itb
Income
[Wa8es & salaries)
$ 1,000
1,500
2,000
3,000
4,000
5,000
6,000
7,500
10,000
1965 Tax
Present Tax
0
0
0
0
$
144
300
456
720
1,196
0
0
0
0
$ 105
Office of the Secretary of the Treasury
Office of Tax Analysis
Tax Cut
220
340
564
976
~ Tax Cut.
-~6
116
156
220
27%
27
25
22
18
, 4h
I
.
.L.
'
TABLE Xrl
Married Couple, Both Over
vith Standard Deduction
Income
(Wages & salari~s)
$ 1,000
1,500
2,000
3,000
4;000
5,000
6,000
7,500
10,000
Present Tax
$
1965 'fax
0
0
(j
0
0
0
140
290
0
60
240
420
$
600
1~50
81'7
1,372
686
1,114
Office of the Secretary of the Treasury
Office of Tax Analysis
65,
Tax Cut
$ 60
100
130
150
191
258
<f, Tax Cut
100
42
31
25
22
19
TABLE XIII
Single Taxpayer 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
1965Tax
0
0
30
120
300
·4e8
686
892
1,243
1,900
0
56
$
$
209
386
557
734
1,031
1,580
Office of the Secretary of the Treasury
Office of Tax Analysis
Tax Cut
$ 30
64
91
102
129
158
212
320
0"
Tax Cut
lOCi
53
30
21
19
18
17
17
11 '-,
Q
........
TABLE XII
Married Couple With Five 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
$
0
96
360
&10
1,2G8
1,745
2,298
2,870
4,209
5,736
9,342
13,619
23,836
35,550
1965 Tax
$
0
72
270
' 634
1,038
1,451
1,918
2,408
3,528
4,801
7,835
11,449
20,235
30,202
Office of the Secretary of the Treasury
Office of Tax Ana~818
$
Tax Cut
24
90
166
'230
294
380
462
681
935
1,507
2,170
3,601
5,348
'/0 Tax Cut
25i
25
21
18
17
17
16
16
16
16
16
15
15
'rABLE XI
1 1.Q
"""
Married Couple With Four Dependents
With Typical Average Item1~ed Deductio~~
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
Tax Cut
1965 Tax
$
480
932
1,400
1,901
2,454
3,050
4,413
5,964
9,625
13,937
24,208
35,940
Office of the Secretary of the Treasury
Office of Tax Analysis
47
157
364
748
1,152
1,583
2,050
2,558
3,696
4,993
8,069
11,719
20,553
30,532
$
13
59
116
184
248
318
404
492
717
971
1,556
2,218
3,655
5,408
i
Tax Olt
2';$
27
24
20
18
17
16
16
16
16
16
16
15
15
120
TAELE X
V~rried Cou?le with Three Dependents,
'with Typical Average Itemized Deductions
Incoo:e
Present Tax
Tax Cut
1965 Tax
'tj, Tax Cut
!·,~e."'CG & 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
~ft1ce
$
180
336
600
1,054
1,531
2,057
2,610
3,230
4,617
6,192
9,$C6
14,255
24,580
36,330
of the Secretary ot the Treasury
Ottice ot Tax Analysis
131
247
462
862
1,266
1,715
2,182
2,708
3,864
5,185
8,899
11,989
20,871
30,862
$
$
49
89
138
202
265
342
428
522
753
1,007
1,603
2,266
3,709
5,468
27~
26
23
19
17
17
16
16
16
16
16
16
15
15
TABLE IX
...12"-...
Married Couple with'Two Dependents,
With Typical Average Itemized Deductions
Inco~
Nages
&
Present Tax
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
+,664
2,213
2,772
3,410
4,821
6,420
10,188
14,576
24,952
36,720
Office of the Secretary of the Treasury
O:f'f'ice of Tax Analysis
Tax Cut
1965 Tax
$ 220
340
564
976
1,380
1,847
2,322
2,858
4,032
5,377
8,537
12,257
21,189
31,201
80
116
156
220
281+
366
450
552
789
1,043
1,651
2,309
3,763
5,519
$
~ Tax Cut
27~
25
22
18
17
17
16
16
16
16
16
16
15
15
TABLE VIII
Married Couple l11 thOne Dependent,
With Typical Average Itemized Deduction~
Income
{Wases & Salarie6~
$ 5,000
6,000
7,500
10,000
12,500
15,000
17,500
20,000
25,coO
30,000
40,000
50,000
75,000
100,000
PreSE'nt
$
420
576
T~
1965
$'
8~4
1,328
1,816
2,369
2,952
3,590
5,025
6,648
10,475
14,912
25,324
37,134
Office of the Secretary of the
Office of Tax Analysis
TTca3U~
Tax
311
436
671
1,090
1,512
1,979
2,472
3,008
4,200
5,569
8,779
12,555
21,507
31,549
Tax Cut
$
109
140
17
23
304
390
480
582
825
1,072
1,690
2,357
3,817
5,585
g
'/0
Tax Cu't;
26%
24
20
18
17
16
16
16
16
16
16
16
15
15
'l:ABLE VII
Married Couple llith No Dependents,
With Typical Aver~e Itemized Deductions
Ir.come
(~:2.1es -&
Present Ta::
Salaries)
5,000
6,<Y'vO
7,500
10,000
12,500
15,000
17,500
20,000
25,000
30,000
40,000
50,000
75,000
100,000
$
540
696
976
1,460
:;",972
2,5 25
3,133
3,770
5,229
6,886
10,775
15,248
2$,695
37,51;.8
1965
Tax,
407
538
785
1,204
1,644
2,111
2,622
3:158
4,368
5,773
9,031
12,843
21,825
31,897
$
Tax
Cut
$ 133
158
191
256
328
414
511
612
861
1,113
1,744
2,405
3,871
5,651
~ Tax Cut
25%
23
20
18
17
16
16
16
16
16
16 .
16
15
15
TABLE VI
M8ht1e<l Couple v11 th Fo~ Dependents
With Standard Deduction
,
Income
,
•
Pi'eaent
'1'~
(Wages & Salaries)
$ 1,OCO
0
1,5CO
2,000
0
3, COO
4,000
5,000
6,000
7,500
0
0
0
$ 180
360
630
10,000
1,lcS'
12,500
15,000
17,500
20,000
1,653
2 ,:>"'0""'>
2,9)0
3,740
Office of the Secret~j of the Treasary
Office of Tax Analysis
1965 Te:;.:
84
230
467
886
1,361
1,908
2,485
3,110 .
$
1
T~~
CUt
$
96
130
163
222
297
396
505
630
tfo 'Tax Cui1
53%
36
26
20
18
17
17
17
-2·25
TABLE V
Married Couple with 3 Dependents,
with Standard Deduction
Present tax
Income
(Wages and Salaries)
$ 1,000
1,500
2,000
3,000
4,000
5,000
6,000
7,5 00
10,000
12,500
15,000
11,500
20,000
1965 Tax
0
0
0
0
0
0
0
0
$ 121)
300
4130
750
1,240
1,810
2,460
3,170
3,920
Tax Cut
i
Tax Cut
--
4~
$ 78
6510
185
338
578
1,000
1,l:·90
115
142
172
240
320
2,01~.0
420
2,635
3,260
535
660
38
30
23
19'
18
17
17
17
$
Office of the Secretary of the Treasury
Office of Tax Analysis
TABLE IV
l-iarried Couple with Two Dependents,
with Standsrd Deductions
Income
(Wages & salaries)
Present Tax
$ 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
$
196'5 Tax
°°
60°
240
420
600
877
1,372
1,966
2,616
3,350
4,124
Office of the Secretary of the Treasury
Office of Tax Analysis
°°
0
0
$ 140
290
~50
686
1,114
1,622
2,172
2,785
3,428
Tax Cut
$
60
100
130
150
191
258
344
444
565
696
'to Tax Cut
100'f0
42
31
25
22
19
17
17
17
17
1, -:, .,
-'"-
~
'/0
Tax Cut
TABLE III
Married Couple lUth One Dependent,
With Standard Deduction
Inco:ne
(Hagee & Salariea)
$ 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
1965 Tax
0
0
0
0
0
0
$ 180
350
540
720
1,C09
1,50h
2,122
2,780
3,530
4,328
~.
.p
98
2::-5
$ 82
552
115
138
168
3;)0
209
£.:-02
1,228
1,75 4
2,310
2,935
3,596
Office of the SecretalJ( of the Treasury
Office of Tax Analysis
.
Tax Cut .
276
368
470
595
732
4~
32
26
23
21
18
17
17
17
17
TABLE II
Married Couple wit~ ~o Ds?c~dents
with Standard Deduction
Income
Present Tax
(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
0
30
$
120
300
480
660
844
1,141
1,636
2, 2-'8
2,960
3,710
4,532
1965 -Tax
0
0
56
200
354
501
658
915
1,342
1,886
2,46C
3,085
3, 764
Office of the Secretary of the Trea.sury
Office of Tax Analysis
Tax Cut
% Tax Cut
0%
10C
53
33
26
24
22
20
18
17
17
17
17
0
$ 30
64
100
126
15S
le6
226
294
392
500
625
768
-..-
'"
...
Table 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
1965 Tax
$
1~22
620
818
1,048
1,405
2,096
2,982
4,002
5,153
6,412
14
85
161
329
500
671
8""00
1,168
1,742
2,478
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
354
50 h.
668
862
1,062
~ Tax Cut
77~
$
J
43
33
22
19
18
17
17
17
17
17
17
17
1 ,.-... ;
~
...... v
Individual Income Tax Rate Schedules
Taxable income
bracket ~2 thousands}
Single
Mar;ried
nerson
(joint)
o-
0.5
.5 - 1.0
1.0 - 1.5
1. 5 - 2.0
4
2 6
4 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 & over
o-
1
1 - 2
2 - 3
3 - 4
4 - 8
8 -12
12 -16
16 -20
20 -24
24 -28
28 -32
32 -36
36 -40
40 -44
44 -52
52 -64
64 -76
76 -88
88 -100
100 -120
120 -140
140 -160
160 -180
180 -200
200 -3CO
300 -400
400 -6CO
600 -OCD
800& over
Present
Rate
20
20
20
20
22
26
30
1965.
Rate
3L"
14
15
16
17
19
22
25
28
38
43
""
.)0
32
L~ 7
39
50
53
56
59
62
65
69
72
75
78
81
42
84
87
89
90
91
91
91
45
48
50
53
55
58
60
62
64
66
68
69
70
70
70
70
70
Percent
of present
Rate
70 )
752-77.5
80 )
85 )
86
85
83
83
84
84
83
84
85
86
85
85
85
84
83
83
82
81
81
79
79
78
77
77
77
Office of the Secretary of the Treasury, Office of Tax Analysis
131
Feb.26,1964
I11~EDIATE
RELEASE
.......
-..
~
TAX REDUCTION SCHEDULES FOE
'r~DIVIDFALS
The Treasury released today the attached tablps sll owing
the income tax cuts which individuals will rec o iv8 as a result
of the Revenue Act of 1964.
Tables 1 throuEh 16 show the tax r"c.l1ctions that will
be effective in 1965.
Tables A through D show the tax recluctic·n.s tb8t will
be effective in 1964.
The tables compare the lower 1964 8nd 1965 taxes with
present taxes at various income levels and
Sf.OVJ
the dollar and
percentage tax reduction.
The tables deal only wi th income frwfl
l'f9C"8S 8
'-'
nc~ salaries
TREASURY DEPARTMENT
February 26, 1964
FOR IMMEDIATE RELEASE
TAX REDUCTION SCHEDULES FOR INDIVIDUALS
The Treasury released today the attached tables showing
the income tax cuts which individuals will receive as a
result of the Revenue Act of 1964.
Tables 1 through 15 show the tax reductions that will
be effective in 1965.
Tables A through D show the tax reductions that will be
effective in 1964.
The tables compare the lower 1964 and 1965 taxes with
present taxes at various income levels and show the dollar
and percentage tax reduction.
The tables deal only with income from wages and
salaries.
000
D-1149
Individual Income Tax Rate Schedules
Taxable income
bracket ~~ thousands}
Mar;ried
Single
(joint)
':Jerson
o.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 j.50 200 -
300 400 &
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
-
Present
Rate
1965
Rate
1
- 2
- 3
4
8
-12
-16
-20
-24
-28
- 32
-36
-40
-44
- 52
- 64
-76
-88
20
20
20
20
22
65
69
58
88 -lCO
100 -120
72
E,O
75
78
'"')
0_
81
66
34
87
89
90
91
91
68
0
1
2
3
4
8
12
16
20
24
28
32
36
40
44
52
64
76
-
-140
-160
-180
- 2CCl
-3m
300 -400
400 -6eD
600 -K-J
800& over
120
140
160
130
200
? ~
_0
30
14
15
16
17
19
22
3~·
25
28
38
-.J-
43
':"0
':')
Lf 7
39
50
53
56
L:2
S9
~/
"-'-
91
45
48
50
53
55
64
69
70
70
70
70
70
Percent
of present
Rate
70 )
75 1
80 )
85 )
86
85
83
83
84
84
83
84
85
77.5
86
85
85
85
84
83
83
82
81
81
79
79
78
77
77
77
Office of the Secretary of the Treasury, Office of Tax Analysis
Table 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
1~22
620
818
1,048
1,405
2,096
2,982
4,002
5,153
6,412
1965 Tax
14
85
161
329
500
671
865
1,168
1,742
2,478
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
354
50 ll
668
862
1,062
i
Tax Cut
77%
43
33
22
19
18
17
17
17
17
17
17
17
TABLE II
Married Couple wit~ ~o Da~c~den~s
with Standard Deduction
Income
Present Tax
(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
$
0
30
120
300
480
660
844
1,141
1,636
2, 2"'8
2,960
3,710
4,532
1965 Tax
Tax Cut
0
0
30
$
0
56
200
354
501
652
915
1,342
1,886
2,46C
3,055
3,764
Office of Lhe Secretary of the Treasury
Office of Tax Analysis
64
100
126
15S
lH6
226
294
392
500
625
768
-_
..
=
% Tax Cut
0%
10C
53
33
26
24
22
20
18
17
17
17
17
..
TABLE III
Married Couple Hlth One Dependent,
With Standard Deduction
Income
(t1cges & Salariea)
$ 1,000
1,500
2,000
3,000
4,000
5,000
6,000
7,500
o
o
o
$ 180
360
540
720
1,009
10,000
1, 501~
12,500
15,000
17,500
2,780
20,000
Tax Cut
Preflent Tax
2,122
3,530
4,328
$
o
o
o
98
245
402
552
800
1,228
1,154
2,310
2,935
3,596
Office of the Secretal~ of the Treasury
Office of Tax Analysis
$ 82
115
138
168
209
216
368
4,0
595
132
c;,
Tax Cut
46i
32
26
23
21
18
11
11
11
17
TABLE IV
Married Couple vith Two Dependents,
vith Standsrd Dzductions
Income
(Wages & salaries)
Present Tax
$ 1,000
1,500
2,000
3,000
4,000
5,000
6,000
7,500
]0,000
12,500
15,000
17,500
20,000
°
°0
$
60
2)~0
420
600
877
1,372
1,966
2,616
3,350
4,124
Office of the Secretary of the Treasury
Office of Tax Analysis
1965 Tax
Tax Cut
'to Tax Cut
°
0
0
0
$ 140
290
1150
686
1,114
1,622
2,172
2,785
3,428
$
60
100
130
150
191
258
344
444
565
696
100%
42
31
25
22
19
17
17
17
17
TABLE V
Married Couple with 3 Dependento,
withStendard neduction
Income
Present tax
and Salaries)
Tax Cut
~Wages
$ 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
o
o
o
o
$ 12')
$
o
...
42
$ 78
o
o
400
185
338
750
578
1,000
1,810
1,490
2,460
2,040
3,170
2,635
3,920
Tax Cut
o
300
1,240
~
3,260
Office of the Secretary of the Treasury
Office of Tax Analysis
115
142
172
240
320
420
535
660
65~
38
30
23
19'
18
17
17
17
TABLE VI
~lA:rr1ecl
Couple \-11 ti-. Fou:'
Dc~~ndento
With Stand~ Ded~~tion
L-:co:1e
Pre:;e:lt
l.r~
1965 7 .);:
T;::.:; C'at
~ 'Tax C-~
(Hase::: & S~1~rle3)
"
~
0
0
1,C~~
1,5CO
0
0
2,C~O
3,C~
0
4,CCO
12~
$
5,CCO
6,000
7,500
":) ~ .....
...J,--,,,,,J
-
10,ca~
630
~
r::J"
_;_vv
:2,500
15,000
17,5CO
20,000
'_ , -;))\.1
r"-"
,...
,..~
i.
c::!, ~v~'
')
C-~"
_~,,//V
L
,
~_'V
"
37
Of:..'::'~-: of the Se.::re·~':';'J m~the 'j::C(!~"J.:'7
Office of
T~ ~~elyu~J
$
84
230
:"-67
n
"-,,r
coo
1,361
1,908
2,485
3,110
$
96
130
163
222
297
396
505
630
53%
36
26
20
18
17
17
17
I
".
_/
I,)
,
'UBLE VII
Married Couple With No Dependents,
With Typical Average Itemi~ed Deductions
Income
Salaries)
('\'I~eo -&
5,000
6,000
1,500
10,000
12,500
15,000
17,500
20,000
25,000
30,000
40,000
50,000
15,000
100,000
1965
Present Tax
540
696
976
1,460
1,972
2,525
3,133
3,770
5,229
6,886
10,175
15,248
2$,696
37,548
$
Office of the Secretary of the Treasury
Office of Tax Analysis
Tax,
407
538
785
1,204
1,644
2,111
2,622
3,158
4,368
5,773
9,031
12,843
21,825
31,897·
$
cf,
Tax Cut
$ 133
158
191
256
328
414
511
612
861
1,113
1,744
2,405
3,871
5,651
Tax Cut
25%
23
20
18
17
16
16
16
16
16
16
16
15
15
(
TABLE VIII
Married Couple lIi th One Dependent,
With Typical Average Itemized Deductionb
I:1come
~'~e.ses & Salaries)
$ 5,000
6,o~0
7,5CO
10, COO
12,500
15,000
17,500
20,CCO
25,COO
30,000
40,oCO
50,000
75,000
lCO,COO
Pre3€·nt Te..A
$
420
576
1965
$
844
1,328
1,816
2,369
2,952
3,590
5,025
6,648
10,475
14,912
25,324
37,134
Office of the Secret~ry of the T~ca3u~
Office of Tax Analys1a
Tax
311
436
671
1,090
1,512
1,979
2,472
3,008
4,200
5,569
8,779
12,555
21,507
31,549
Tax
$
Cut
109
140
17~
23
304
390
480
582
825
1,072
1,695
2,357
3,817
5,585
~ Tax Cu·t
26%
24
20
18
17
16
16
16
16
16
16
16
15
15
TABLE IX
Married Couple with'Two Dependents,
Typical Average Itemized Deductions
w~th
Income
(\lases & sa 1aries)
Present Tax
$ 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
$ 300
100,000
456
120
1,196
+,664
2,213
2,172
3,410
4,821
6,420
10,188
14,516
24,952
36,120
Office ot the Secretary ot the Treasury
Office ot Tax AnalysiS
Tax Cut
1965 Tax
$ 220
340
564
976
1,380
1,847
2,322
2,858
4,032
5,377
8,537
12,267
21,189
31,201
80
116
156
220
284
366
450
552
189
1,043
1,65 1
2,309
3,763
5,519
$
~
Tax Cut
2710
25
22
18
11
17
16
16
16
16
16
16
15
15
TABLE X
Married Cou~le vith Three Dependents,
'with Typical Average Itemized Deductions
Income
Present Tax
Tax Cut
1965 Tax
"tf, Tax Cut
,',ia;:o;cs & 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
$
180
336
600
1,064
1,531
2,057
2,610
3,230
4,617
6,192
9,906
14,255
24,580
36,330
or the Secretary ot the Treasury
Ottlce or Tax Analysis
~f'fice
131
247
462
862
1,266
1,715
2,182
2,708
3,864
5,185
8,899
11,989
20,871
30,862
$
$
49
89
138
202
265
342
428
522
753
1,007
1,603
2,266
3,709
5.468
27~
26
23
19
17
17
16
16
16
16
16
16
15
15
,]ABLE XI
Married Couple With Four Dependents
With TYPical Average Item1~ed Deductio~~
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
5,964
9,625
13,937
24,208
35,940
$
Tax Cut
1965 Tax
$
Office of the Secretary of the Treasury
Office of Tax Analysis
47
157
364
748
1,152
1,583
2,050
2,558
3,696
4,993
8,069
11,719
20,553
30,532
$
13
59
116
184
248
318
404
492
717
971
1,556
2,218
3,655
5,408
'f, Tax Olt
2';$
27
24
20
18
17
16
16
16
16
16
16
15
15
TABLE XII
Married Couple With Five 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
$
0
96
360
1965 Tax
0
72
270
$
Roo
' 634
1,2G8
1,745
2,298
2,870
1,038
4,~09
5,736
9,342
13,619
23,836
35,550
1,~51
1,918
2,408
3,528
4,801
7,835
11,449
20,235
30,202
Office of the Secretary of the Treasury
Oftice ot Tax Analysis
$
Tax Cut
24
90
166
'230
294
380
462
681
935
1,507
2,170
3,601
5,348
rJ, Tax Cut
25~
25
21
18
17
17
16
16
16
16
16
15
15
TABLE XIII
Single 'l'axpayer Over 65,
With Standard Deduction
Income
Present Tax
Tax Cut
;, Tax Cut
(Wages & Salaries)
$ 1,000
1,500
2,000
3,000
4,000
$
0
0
30
120
300
4e8
0
$ 56
209
386
557
734
1,031
1,580
5,000
686
6,000
7,500
10,000
892
1,243
1,900
Office of the Secretary of the Treasury
Office of Tax Analysis
$ 30
64
91
102
129
158
212
320
100i
53
30
21
19
18
17
17
TABLE XI'I
Married Couple, Both Over 65,
with Standard Deduction
Income
(Wages & sa1ar1~s)
$ 1,000
1,500
2,000
3,000
4 s 000
5,000
6,000
7,500
10,000
Present Tax
1965 'fax
0
u
'10
Tax Cut
0
0
$ 60
240
420
600
87'l
1,372
Tax Cut·
$
Office of the Secretary of the Treasury
Office of Tax Analysis
0
0
0
140
290
1~50
686
1,114
$ 60
100
130
150
191
258
100
42
31
25
22
19
TABU: XV
Married Couple, Both Over 65,
vith Typical Average Itemized Deductions
1965 Tax
Present Tax
Income
!Wages & salaries)
$ 1,000
0
1,500
2,000
3,000
4,000
5,000
6,000
7,500
10,000
0
0
0
$ 144
300
456
720
1,196
Tax Cut
i
Tax Cut
--
0
0
0
0
:I>
,
Office of the Secretary of the Treasury
Office of Tax Analysis
105
220
340
564
976
-
g6
116
156
220
27%
27
25
22
18
Individual Income Tax Rate Schedules for 1964
Taxable income
bracket ($ tnousands)
Single
Married
person
( joint)
0.0 - 0.5
0.5 - 1.0
1.0
1.5
1.5 - 2.0
2
4
6
4 6 8
8 - 10
10 - 12
12 - 14
16
14
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
200
150
200 and 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 and
-
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
over
Office of the Secretary of the Treasury,
Office of Tax Analysis
Present
rates
1964
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
16.0
16.5
17·5
18.0
20.0
23·5
2-7.0
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
TABLE A
1964
Single Taxpayer,
with Standard Deduction
Incoae
(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
1964 Tax
$ 16
97
180
360
540.
720
928
1,251
1,872
2,666
3,565
4,569
5,690
Tax cut
$ 44
53
60
62
80
98
120
154
224
316
437
584
722
••
10 Tax cut
7310
35
25
15
13
12
11
11
11
11
11
11
11
TABLE B
1964
Married Couple with Ko Dependents
Vitil
s..aad
.
IncOl8e
(Wages & Salaries)
$
1,000
1,500
2,000
3,000
~,OOO
5,000
6,000
7,500
10,000
12,500
15,000
17,500
20,000
Decl1lC~1~.
.
Present tax
1964 Tax
0
$ 30
120
300
480
660
0
0
$ 64
226
395
554
720
990
1,440
2,021
2,636
3,311
4,0 49
8~4
1,141
1,636
2,278
2,960
3,710
4,532
••
Tax cut
$
..
30
56
74
85
106
124
151
196
257
324
399
483
»
·
~ Tax cut
10~
47
25
18
16
15
13
12
11
11
11
11
fABLE C
1964
Married Couple with Tvo Dependents,
wi til S'taDdaN Be4_tion
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
0
0
0
60
$
240
420
600
877
1,372
1,966
2,616
3,350
4,124
1964 'fax
0
0
0
0
160
$
325
500
750
1,200
1,739
2,326
2,987
3,683
Tax cut
$ 60
80
95
100
127
172
227
290
363
441
..
"" Tax cut
100""
33
23
17
14
13
12
11
11
11
TABLE "I>
1964
Married Couple with Two Dependents,
with Typical Average Itemized Deductions
Income
(Wages & Salaries)
$
1/
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 Ta.x
$
300
456
720
1,196
1,664
2,213
2,772
3,410
4,821
6,420
10,188
14,576
24,952
36,720
1964 Tax
$
247
380
621
1,054
1,480
1,980
2,487
3,065
4,341
5,779
9,090
13,033
22,506
33,131
Tax Cut
$
53
76
99
142
184
233
285
345
480
641
1,098
1,543
2,446
3,589
% Tax
Cut
18%
17
14
12
11
11
10
10
10
10
11
11
10
10
Some of the irregularity in progression of percentages is due to
rounding"
11
- 3 -
and exchange tenders will receive equal treatment.
Cash adjustments vill be made
tor differences between the par value of maturing bills accepted in exchange and
the issue price of the new bills.
'nle income derived from Treasury bills, whether interest or gain tram the Ale
or other disposition ot the bills, does not have any exemption, as such, and 10s8
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: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 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
ot 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 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 from any Federal Reserve Bank or Branch.
- 2 -
decimals, e. g., 99.925.
Fractions ~ 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 ot the customers are set forth in such tenders.
others than
banking institutions will not be pennitted to Bubmit tenders except tor 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 thereot.
The
'secretary ot 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 reserv.ations, noncompetitive tenders for
less for the additional bills dated
ffif
, (
June 4, 1964
91
2fiiiOO or
days
~n-
tm
Xiffi
ing until maturity date on
$ 100,000 or less for the
December 5, 1963
$
) and noncompetitive tenders for
Wi
182 -day bills without stated price from anyone
ffii
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 Rese~
Banks on _Ma_r_c_h_5-7,~1.,.9_64____ , in cash or other immediately available funds or
tm
in a like face amount of Treasury bills maturing ___Ma_r_c~h~5~,_1_96.;..4.;;;...-_.
Wi
cash
TREASURY DEPARTMENT
Washington
FOR IMMEDIATE RELEASE,
February 26, 1964
TREASURY'S WEEKLY BILL OFFERING
The Treasury Department, by this public notice, invites tenders for two series
of Trea.sury bills to the aggregate amount of $ 2,200,000,000 , or thereabouts, tor
Q(fJ
of $
2,20~9,OOO ,
as follows:
91 -day bills (to maturity date) to be issued
~
, in the amount
March ~1964
cash and in exchange for Treasury bills maturing
in the amount of $
1,30~0,000
June 4, 1964
6M
amount of $ 799'00000
XfdIJ
, or thereabouts, represent-
ing an additional amount of bills dated
and to mature
,
March 5, 1964
DeCembe~
1963
,
, originally issued in the
.
, the additional and original bills
to be freely interchangeable.
182 -day bills, for $ 900, . 0 0
, or thereabouts, to be dated
t'M()
March W964
, and to mature
September 3, 1964 •
0Ciii){
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 Standard time,
Monday, March 2, 1964
)(Xii)
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 tbe
price offered must be expressed on the basis of 100, with not more than three
TREASURY DEPARTMENT
February 26, 1964
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
~,200,OOO,000, or thereabouts, for cash and in exchange for
Treasury bills maturing March 5, 1964,
in the amount of
$2,202,309,000, as follows:
91-day bills (to maturity date) to be issued March 5, 1964,
in the amount of $1,300,000,000, or thereabouts, representing an
additional amount of bills dated December 5,1963, and to
mature June 4, 1964,
originally issued in the amount of
$799,967,000~
the additional and original bills to be freely
interchangeab.le.
182-day bills, for $900,000,000,
or thereabouts, to be dated
March 5, 1964,
and to mature September 3, 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
(maturi ty value).
Tenders will be received at Federal Reserve Banks and Branches
up to the closing hour, one-thirty p.m., Eastern Standard
time, Monday, March 2, 1964.
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,
Iwith 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
cenders. Others than banking institutions will not be permitted to
submit tenders except for their own account. Tenders will be received
'lithout deposit from incorporated banks and trust companies and from
responsible and recognized dealers in investment securities. Tenders
~rom others must be accompanied by payment of 2 percent of the face
rmount of Treasury bills applied for, unless the tenders are
lccompanied by an express guaranty of payment by an incorporated bank
)r trus t company.
D-1150
- 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 Department of the amount
and orice 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,OOOor less for the additional bills dated
December 5,1963, (91-days remaining until maturit¥ date on
June 4, 1964)
and noncompetitive tenders for ~ 100,000
or les8 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 March 5, 1964,
in cash or other immediately available funds or in a like face
amount of Treasury bills maturing March 5, 1964.
Cash and
exchange tenders will receive equal treatment. Cash adjustments
will be made for differences between the par value of maturing
bills accepted in exchange and the issue price of the new bills.
The income derived from Treasury bills, whether interest or
gain from the sale or other disposition of the bills, does not have
any exemption, as such, and loss from the sale or other disposition
of Treasury bills does not have any special treatment, as such,
under the Internal Revenue Code of 1954. The bills are subject to
estate, inheritance, gift or other excise taxes, whether Federal or
State, but are exempt from all taxation noW or hereafter imposed on
the prinCipal or interest thereof by any state, or any of the
possessions of the United States, or by any local taxing authority.
For purposes of taxation the amount of discount at which Treasury
bills are originally sold by the United States is considered to be
interest. Under Sections 454 (b) and 1221 (5) of the Internal
Revenue Code of 1954 the amount of discount at which bills issued
hereunder are sold is not considered to accrue until such bills are
sold, redeemed or otherwise disposed of, and such bills are excluded
from consideration as capital assets. Accordingly, the o\~er of
Treasury bills (other than life insurance companies) issued hereunder
need include in his income tax return only the difference between
the price paid for such bills, whether on original issue or on
subsequent purchase, and the amount actually received either upon
sale or redemption at maturity during the taxable year for which the
return is made, as ordinary gain or loss.
Treasury Department Circular No. 418 (current revision) and this
notice prescribe the terms of the Treasury bills and govern the
conditions of their issue. Copies of the circular may be obtained from
any Federal Reserve Bank or Branch.
000
TREASURY DEPARTMENT
It"
February 27, 1964
STATEMENT BY SECRETARY DILLON ON HOUSE ACTION ON
INTERNATIONAL DEVELOPMENT ASSOCIATION
Treasury Secretary Dillon today issued the following
statement:
"I of course regret that the House did not take favorable
final action on the bill to authorize an increase in the
resources of the International Development Association, but
certainly do not interpret its action to recommit the bill
to Committee at this time as a vote against the bill. I
remain fully convinced of the intrinsic merits of the IDA
program -- it is soundly administered, it draws on funds
provided by other countries instead of by ourselves alone,
and it is clearly in our national interest. I feel certain,
therefore, that further consideration in the Banking and
Currency Committee will strengthen the case for the bill,
and see every reason for the House to take favorable action
when the bill returns to the floor."
D-ll5l
TREASURY DEPARTMENT
FOR IMMEDIATE RELEASE
February 27, 1964
STATEMENT BY SECRETARY DILLON ON HOUSE ACTION ON
INTERNATIONAL DEVELOPMENT ASSOCIATION
Treasury Secretary Dillon today issued the following
statement:
"I of course regret that the House did not take favorable
final action on the bill to authorize an increase in the
resources of the International Development Association, but
certainly do not interpret its action to recommit the bill
to Committee at this time as a vote against the bill. I
remain fully convinced of the intrinsic merits of the IDA
program -- it is soundly administered, it draws on funds
provided by other countries instead of by ourselves alone,
and it is clearly in our national interest. I feel certain,
therefore, that further consideration in the Banking and
Currency Committee will strengthen the case for the bill,
and see every reason for the House to take favorable action
when the bill returns to the floor."
D-1151
000
TREASURY DEPARTMENT
February 27, 1964
FOR IMMEDIATE RELEASE
The Treasury today issued the following statement in response
to inqu~r~es concerning the action of the Bank of England in raising
its discount rate:
The United States and the United Kingdom have been in
close consultation regarding the develo£~~nt&~ffecting the
international position of sterlin&]'that have prompted the
Bank of England to act today to increase its bank rate.
Potentially unsettling flows of funds from London
have recently exerted pressure on the exchange markets.
The United States recognizes the importance of timely
action to meet incipient speculative pressures and to
promote continued balance of payments equilibrium. The
maintenance of stability in the international payments
system as a whole is in the common interest of all of
us.
The increase in short-term rates in London which
can be expected in response to this action, while helpful
in stemming unwarranted speculative pressures, is not
expected to disturb the basically balanced international
money market relationships that have generally prevailed
for some months. Consequently, the factors bearing upon
the determination of United States financial policy in
support of more rapid economic growth and international
balance are expected to remain substantially unchanged.
ri'he United States will continue to consult and cooperate
closely with the United Kingdom and other countries in
assessing international financial developments of
mutual interest.
000
TREASURY DEPARTMENT
February 27, 1964
FOR IMMEDIATE RELEASE
The Treasury today issued the following statement in response
to inquiries concerning the action of the Bank of England in raising
its discount rate:
The United States and the United Kingdom have been
in close consultation regarding the developments that
have prompted the Bank of England to act today to
increase its bank rate.
Potentially unsettling flows of funds from London
have recently exerted pressure on the exchange markets.
The United States recognizes the importance of timely
action to meet incipient speculative pressures and to
promote continued balance of payments equilibrium. The
maintenance of stability in the international payments
system as a whole is in the common interest of all of
us.
The increase in short-term rates in London which
can be expected in response to this action, while helpful
in stemming unwarranted speculative pressures, is not
expected to disturb the basically balanced international
money market relationships that have generally prevailed
for some months. Consequently, the factors bearing upon
the determination of United States financial policy in
support of more rapid economic growth and international
balance are expected to remain substantially unchanged.
The United States will continue to consult and cooperate
closely with the United Kingdom and other countries in
assessing international financial developments of
mutual interest.
000
D-1152
TREASURY DEPARTMENT
February 27, 1964
FOR RELEASE: A.M. NEWSPAPERS
FRIDAY, FEBRUARY 28, 1964
PETER A. BROOKE NEW SAVINGS BONDS
CHAIRMAN FOR MASSACHUSETTS
Secretary of the Treasury Douglas Dillon today appointed
Peter A. Brooke as volunteer State Chairman for the United
States Savings Bonds Program in Massachusetts.
Mr. Brooke, executive vice president of Tucker, Anthony
& Co., Inc., of Boston, succeeds the late Joseph P. Lynch,
former president of the Peoples National Bank, Marlboro, Mass.,
who served as State Chairman until his death last April.
In announcing Mr. Brooke's appointment, Secretary Dillon
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."
In addition to serving as executive vice president of
Tucker, Anthony & Co., which specializes in private financing,
public underwritings, mergers and acquisitions, Mr. Brooke
is a director of Unitrode Transistor Products, Inc., Waltham,
Mass.; Crystalonics, Inc., Cambridge, Mass.; and Damon Engineering, Inc., Needham, Mass.
A native of Worcester, Mass., Mr. Brooke is a graduate
of Harvard College and Harvard Graduate School of Business
Administration. With Mrs. Brooke and their three sons, he
resides in Concord, Mass.
000
TREASURY DEPARTMENT
February 27, 1964
FOR RELEASE: A.M. NEWSPAPERS
FRIDAY, FEBRUARY 28, 1964
PETER AQ BROOKE NEW SAVINGS BONDS
CHAIRMAN FOR MASSACHUSETTS
Secretary of the Treasury Douglas Dillon today appointed
Peter A. Brooke as volunteer State Chairman for the United
States Savings Bonds Program in Massachusetts.
Mr. Brooke, executive vice president of Tucker, Anthony
& Co., Inc., of Boston, succeeds the late Joseph P. Lynch,
former president of the Peoples National Bank, Marlboro, Mass.,
who served as State Chairman until his death last April.
In announcing Mr. Brooke's appointment, Secretary Dillon
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."
In addition to serving as executive vice president of
Tucker, Anthony & Co., which specializes in private financing,
public underwritings, mergers and acquisitions, Mr. Brooke
is a director of Unitrode Transistor Products, Inc., Waltham,
Mass.; Crystalonics, Inc., Cambridge, Mass.; and Damon Engineering, Inc., Needham, Mass.
A native of Worcester, Mass., Mr. Brooke is a graduate
of Harvard College and Harvard Gradu2te School of Business
Administration. With Mrs. Brooke and their three sons, he
resides in Concord, Mass.
000
TREASURY DEPARTMENT
FOR IMMEDIATE RELEASE
TREASURY DECISION ON WELDED STANDARD STEEL PIPE
UNDER THE ANTIDUMPING ACT
The Treasury Department has determined that welded standard
steel pipe from Luxembourg is not being, nor
like~
to be, sold in
the United States at less than fair value within the meaning of
the Antidumping Act.
Notice of the determination will be published
in the Federal Register.
The dollar value of imports of the involved merchandise received
during 1962 was approximatelY $4,000,000.
TREASURY DEPARTMENT
March 2, 1964
FOR IMMEDIATE RELEASE
TREASURY DECISION ON WELDED STANDARD STEEL PIPE
UNDER THE ANTIDUMPING ACT
The Treasury Department has determined that welded standard
steel pipe from Luxembourg is not being, nor likely to be, sold in
the United States at less than fair value within the meaning of
the Antidumping Act.
Notice of the determination will be published
in the Federal Register.
The dollar value of imports of the involved merchandise received
during 1962 was approximately $4,000,000.
rJi"
·jJL~
\t
_.
>•• ;'
':,~J.,.
1\,-.,
~~~ Ya.-ch ],_l:Y;_~_~____
.... .'..iL:' -
i:
~.: ; __ : Y'., •...'.li.JG.S :H.:..L )tT~;i1!~J
rna T·"~I!J·.lrJ .-.;~nt. anrtouncad laot evon1n;..: that. t.be t.enders for t.wo MI1ee
!'ra&eur' bills 0IlII 'lOr~,:;s t·:) lJe an a.idit,l~bti\le ~t the bUlM. da't.@d ~ S,
and "he) ()t.r... :eril"'~ t.O 0. cilI.ted 'J•.arch '-i, 1).';,4,. W.lich va,.. ~rt'ttNd on r'ebnaJ'1
:)pet*l at. the federu-\eMl"h ;-«_a on }!~;~ 2 •. t~ndar8 Wft 1nYS.\ed lew .1,)00,
or ',heftAMGt..a, 0t :,l~' bUls t.t.nd tar ..:5tI.J\J,CO.J,XlO, or t.beI'8abou.ta, of leI..,
i'he det.;;.ll.1S of tho t.wo aer1t!s .... aa tollowal
II
26=
:tAJif1!
jf
.h~~:'.?r [)
C·.J4 (.' r 1':' i .."
!; r .'.l •
Yl-dq l'reuUl'1 bUla
1M wrinq;
ric.
--_
..;.,;;-.Y9.iJ'J6 !I
;)fA
•
f
June 4. 1
t." ',. . rox. ;:,q,,{y.
lumul 'ate
).576.;,
j9.J92
3.S92.'~
.;1 .:)'/]
,.5[,9i,
1/
aI ! . .pt.1n~~ one tAndor of ;,ii,lU,'.))'), ~ Exoept.lrl'~ one tender of $SO,OOO
'It;:. at t.he u»\U!t. of 91-da,y billa bld tor a~ tr~e low prioe ... acoept4Ci
2)" of t.he "::Junt 'Jf lti2-da,;1' billa bId tX' at. l,be low priM .... aoo.pW
1'OTl\L r tl ;D(::,"i A.\;I..1 r r- ''\ ,qm AGC2'?t:,r B1 ~""o;.;..':RAI, :1:':;;';--"'''- ;·L/1R!CT,·,.
r.
0i.a1.r1ct.
Roetan
York
PhUade1pbU
CleftlMd
Ai'Rl1~d :.'~
Lo,)t~,OOO
1,6J4,5Jl,~
2&,)7J,()~~
27 .596,00.:;
~coepte<l
J
t
APKUe4, ~OJE.
18,926,000
I
~
f'·96,t.)O,OOO
s
13.J7l,O~J
26.G76.i)~K)
10,127 ,o:.)()
J,9rl,v)O
1,777,915,:':;00
8,852,o<Xi
U,2l$,C)X)
2.420,(00
A!OIPW
.
$ 2,8)),~
1)8,220,.
),Ja06,a
2O,1OO,ca
~J.o;.,:m
10,162, ,.{x)
Atl;;v;ta
25, ')02, {»)O
1E,,/*v,OOO
e"le,ooo
21l,1I;i,OOO
12J,5r:fl,OO'J
)4,fSl,OJO
1.)O,7n,OCA)
1), 784,()';()
U4,2C1,a.
12,2&,-
2'),6)0,01')0
1O,14 94,OCX>
6,1-.,-
Chioat..;o
st,. lNtlia
~1.1nne&i·-ol1ta
lans.~ l:l t.T
Dall..
3an 'rllllCiaoo
1'):'/, L.
:.41, 714,CO.~
11 , ,~.t ),000
25, 99<J,OOO
25, /.)),1),-'>0
_.l.L9,(J;2.\.~J
,\2 ,24S, 129,O!Xl
9.;.)8J,;.}i()
I
5, 195,000
If.,591,IXXJ
9,211,00.;
.... 112,1..79,000
Bh,?71.roi
,1,)01,194,OO-;!I $,2,097,93$,00)
2,)9S,OII
6,71&8,),oPS,a
),~1,aao
)!.WP••
J.902,~,QGD
.include. .;~~~ ),~lO, ~J noocOC&;Jeti ';.1 V@ ~tander8 a.cce;>Uitd ~t the a""'Ag. pr10e of " ...
~, Incllldea ''Jt~,t"c,VJ noocc.;.et.iUvo t.endttra accept.d at. the avenge pr1.oe or PlAt
m & CO\l;<)1'\ b~u. Jf tr•• SLtM ler~~.:th and for t.he ;3JJJ11!e aJIO\&r1t, invwat44, t.n. .... II
~.. se t-U~a "'h~d ;.rOYide .Ii61~i8 of J.~:7£.. tGr t.M ~l-dq billa, and ).9~,
1(:2-d,·;.r bUlB. [nt.er'tJt rate-u Xl bill~; aft cr-l-Oteci in t.en.a
bunk
.1
t.t. rewm nlAt~d t..o t.!ae ruC. ~ or the billa psq&ble at. ~"\1rlt.7 ...
tJr. 8IIl0',.11rt. invested und tJ~ir i8~ 111 &Ct.u.al nuao.r ot d.&)t. related w a )6O-4It
j .• ..ll".
~n C.)flTd'&t4t, .' i.81ds fX\ ~ri;.lt1C1i.t.a8, rlotA., aM bonds &l"'e o<ar~ Sa . of lnt,er.,3t '1Il the amount invc~t.ed, Ilnd rel.at.e the n~ilftner or dny-4; l"aa1.' . . . _
int.e.r"t, ~~nt. ;~Jri'>:: too t.t~ acrt.U&l mr..uer o! day. in the periOiJ.,witib . . .
cca ~ir.~: i f )lOre t.L~"n )00 c:)U...tOD ;-,.:riod 1.s involvucl.
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or
41""'\btI'''
",.1
p"
TREASURY DEPARTMENT
RELEASE A. M. NEWSPAPERS,
March 2, 1964
3, 1964.
RESULTS OF TREASURY'S WEEKLY BILL OFFERING
esday, March
The Treasury Department announced last evening that the tenders for two series of
,asury bills, one series to be an additional issue of the bills dated December 5, 19c
i the other series to be dated March 5, 1964, which were offered on February 26, were
tned at the Federal Reserve Banks on March 2. Tenders were invited for $1,300,000,00
thereabouts, of 91-day bills and for $900,000,000, or thereabouts, of 182-day bills.
details of t he two series are as follows:
~GE OF ACCEPTED
1PETITIVE BIDS:
High
Low
Average
91-day Treasury bills
maturinG June 4, 1964
Approx. Equiv.
Price
Annual Rate
99.096 al
3.576?s
99.092 3.592%
99.09.1
3.5A9% ~j
182-day Treasury bills
maturing September 3, 1964
Approx. Equiv.
Price
Annual Rate
98.093 bl
3.772%
98.086 3.786%
98.090
3.7TI% !I
a/ Excepting one tender of $100,000; bl Exceptin~ one tender of $50,000
97% of the amount of 91-day bill::; bid-for at the low price was accepted
23% of the amount of l82-day bills bid for at the low price was accepted
~A1 TENDERS APPLIED FOR AND ACCEPTED BY FEDERAL RESERVE DISTRICTS:
Accepted
)istrict
Applied For
Accepted
AoEp1ied For
30ston
$
$ lB,?26,OOO
$
3,983,000 $ 2,833,000
40,388,000
~ew York
896,830,000
758,220,000
1,77'/,915,000
1,634,531,000
'hilade1phia
0,852,000
3,406,000
28,373,000
13,373,000
:leveland
26,676,000
20,700,000
41,215,000
27,596,000
a.chmond
10,127,000
2,L.20,OOO
10,162,000
2,395,000
Ltlanta
18,640,000
8,518,000
6,748,000
25,502,000
:hicago
123,588,000
130,771,000
44,204,000
219,105,000
)t. Louis
12,284,000
34,851,000
13,784,000
41,714,000
tinneapo1is
9,083,000
5,795,000
3,095,000
17,e)S3,000
[ansas City
20,630,000
10,1..:94,000
6,194,000
25,990,000
lallas
9,217,000
16,591,000
3,957,000
25,633,000
lan Francisco
38,4~O,000
84,971,000
112,
L79,!OOO
149 z052 t OOO
$2,097,935,000 $902,/.t46,000
TOTALS $2., 2L.5, 729,000 $1,301,794,000
£I
~
Includes $220,510,000 noncompetitive tenders accepted at the average price of 99.093
Includes $56,678,000 noncompetitive tenders accepted at the aver~tge price of 98.090
On a coupon issue of the same length and for the same amount invested, the return on
these bills would provide yields of 3.67'/" for the 91-rl8Y bills, and 3.90;&, for thE
182-day bills. Intere st rate s on bills are quoted in terms of hCl..nk discount ~"i th
the return related to the f2..ce amount of the bill:=: p::lY2ble at maturity rather than
the amount invested and their length in actual nunber of days related to a 360-day
year. In contrast, yields on certificates, notes, and bonds are computed in terms
of interest on the amount invested, and relate the numher of days remaining in an
interest payment period to the actual n~ber of days in the period, with semiannuru
compoundine if more than one coupon period is invo1vt>d.
1153
- 77 -
government and out, seek a meaningful cons.neU8 on a tax
policy that serves the entire nation, rather than special
~roups,
that responsibility can and will be discharged.
o 0 000
- 76 -
and reBponslbil1ties 1n the field.
Their. Will be the .e.er
ending taak of employing their special kDOwledge of ,.. and
fiecal policy within the fr . . .work of the natloaal deai.ion
now taken to utilize this iustrument "for the common deten••
and the general welfare."
The burden will be heavy on
scholars, legislators on the tax writing committe•• and
el•••here in the Congress, the Executive Branch, leaders ot
busines. and labor, and the tax executive. and experts
represented here tOnight.
For tax policy formulation i8
truly an ever-unfinished task in a changing world.
It will
be a constant, ever-abiding responsibility tor analyeiB,
citiz.n education and decision-making in the democratic
process.
But as recent developments in tax policy indicate,
~
men of good will and concern for the national intereet, iD
- 75 In conclusion, I ehall resist the temptation to
prescribe my own particular program for near term
developments in tax policy.
for this
n~desty
There is a very good reaBOn
-- I have no program.
Indeed, it seems fitting to pause a while and s . .
how the
challgin~
dil'ections ill tax policy j\Ult described
actually work out in practice before deciding on the next
steps.
At least, the American businessmen whom J'Ou advi •• and
represent ought to be fully assured for the time being by
recent events that our tax policy is to help and encourage
them to do more
and put
LOOl'e
~&d
,~oll,u's
profitable business, create more jobs,
to wOl'k.
But, the tUl'ning point in tax policy represented by the
changing directions of the last two years haa a pr_lng
J. Cl1 sel' t~.L·rll t:..i --;.~iLt(!;':ti.iGr.~ tG
'chose who have special qualiflcat!oll
-
7,1 -
policy playing an important role, is bound to focus
continuing attention on tax policy as an important
measure of economic stabilization.
Congress is apparently
1...,
-:;'villing to delegate any of
its responsibility to the President to raise or lower
tax rates for a temporary period in a pattern prescribed
in advance as a measure of economic stabilization.
This
understandable reluctance will, however, place an added
premium on alertness in both Congress and the Executive
to utilize timely tax action as an anti-recession tool,
particularly in periods when resort to monetary and credit
stimulus is precluded by balance of payment difficulties.
- 73 -
forwal'O the effol't to secure equi ty and structural rafon
in association with attempts at "economic" tax reform.
(8)
The three measures represent the firet effective
resort to tax policy as a means of sustaining expansion and
reducing the frequency of cyclical recession.
Tile impact oi the 19ti2 tax actions and the prospect
or antlcipatiol!. 01 the 1964 Act have contributed importantly
to sustainL1J a period of economic expa..usion for thirty-.even
months.
The
l'eceut enactment casts all optimistic glow for
the indefinitIJ future.
pattern of ever
When
contl~asted
shol·tenin~ pe~·iods
with the pre-existing
of expansion, the last
one before this being twenty-five months, tbe likelihood
of achievinG the lon;;est one
ill.
peacetime history, wi th tax
- 72 -
reimbursed by the employer; and the removal of the
two percent consolidated returns tax.
Perhaps the public debate of the issues involved
in base broadening and ot l ler structural changes, apart
from net tax reduction and rate reduction, is as important
as the changes themselves.
Many issues that were heretofore
debated only by experts have been placed under legislative
and public examination.
The public and the Congress do
not always agree with the experts.
If, after a proper
debate, the solutions that the experts and technicians
.
propose do not secure legislative acceptance, then others
may be devised.
The important fact is that both of these bills carry
• 71 equity of the system and will qualify :lD _IlY
_W.
a•
• tructural reform even thoush they 10•• revenue rather
than gain it.
Some
e~l••
are:
the
1ntr"'~t...
of
all
averaling .yatem to . .et the probte.. of buaobed iDe....
the splitting of the first individual taX bracket 1at.
four bracket. to provide some differentiation f_ ehe evo
fifty percent of our taxpayer. whoa. 1000ae falla eat1•• 1y
in the previous first bracket; the adoptiOD of the 1IiD:I.a.-
standard deduction to provide special reliaf for tho. . with
very low incomes without the wa.tage at upper levala that
.cc~anie.
the competing approach of rauing ex. gpti. . , the
additional deduction for employee's moving expene •• wh.ther or III
- 70 -
of earned income of American ci tizeoa .. tabll.hinc
residence abroad.
Revenue raising resultlng from bas. broadening 1. not
the ooly test of tax reform in the structural .e_.
1Iaay
JROcl1floationa of key provle1oD8, Buch . . tbolle in 'tbe ..eoeot
b11l dea11ng with .tock optioDs,peraonal boldini companie.,
ioterest on deferred payments, minimum deposlt and bank loaa
life 11l8ura.nce, and group term 11fe lD1Juranoe are more
important for their long range significance than their current
consequences in recapturing revenue.
Nonethel... th...
modifications remove or limit special privileges and preferencea that are no longer considered equitable or
aec".a!1.
Also, the recently enacted law involv.. tbe latwodUCtiOD
of structural innova tiona which are deBlpeci to 1apl'ove the
- 69 -
*Make United States shareholders currently
taxable on tax haven earnings of foreign corporations
controlled by them;
*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;
*Tax profits fro;n sales of United States patents
to foreign subsidiaries at ordinary rather than
capital gains rates;
*Remove tax advl.'lt.J.ges previously granted to
investment companies created abroad;
*Restrict the exemption from United States tax
-:
'"
::'~)
'-
- 68 -
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
dl1(;
tax administrators;
*Provided for the taxation of mutual fire and
casualty insurance companies on underwriting, as well
~s
investment income
and provisions in the field of foreign taxation that:
- - 67· - -
the dividend credit which greatly advantaged the large investor
have been eliminated.
To these examples of structural reform should be added
from the 1962 Act provisions that:
*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 assocLl!..:ions over competing financial
- 66 -
Revenue l·aisi.llg structural changes in all previoua Revenue
Acts since 1940 total approximately $600 &11110n -- tile total
from 1953 to 1961 was less thWl $200 million.
The nearly
$1.7 billion of revenue raiSing changes in the two recent
Acts not only increased the equity of the income tax Byet. . ;
the revenue ruseo by them has been turned back into rate
reductions and investmellt incentives so as to accompliBh a
measure of "economic" tax reform iu addition to that achieved
through net tax reduction.
Structural reform in the 1964 Act included, for example,
limitations on tax advantages accruing from group term
lnaur~
bank loan insurance, sick pay exclusion, ca.aual ty 10•• deductlOi
the utllizu.tioD. of personal holding companies, multiple corporation provisions, gifts of future interest, aggregation of
mine~'al
pl'operties fo,," charging depletion, and the realisation
of capi tal gail18 on sales of real estate resulting fro. . . - ,
dopl'ecia. tion.
In ;tddi tio.u, deductions of certain State and 1011
taxes that wel'e uilficult of WliforDl and equitable
adJa1D1.ua'"
--,
I
...
- 65 Nonetheless, those sponsoring and proposing peraaneD't
changes in the tax structure to better adapt it to the eoOlMlU.c
challenges of the Sixties concluded that, while an overriding
priOl'i ty should be given to "economic" tax reform, any pel"U.nent
ohange in the system to tha.t end should be d ••lgned and
associated with a solid effort to improve the equity and
structural soundness of the system.
As a cODsequence, the
revenue raiSing structural changes accomplished under the two
Aot. of Congress represent major improvements in the equity of
the tax system and the revenue losing provlaione are deSilned,
by
and large, to relieve especial hardship. beyond the reacb of
rate reduction and achieve a careful balancing of tbe benefit••
If base broadening 1s the test of tax reform 1n the
structural sense of eliminating special
pref.~nc. . ,
then
the past eighteen months have wi tneaaed a real turning point
in tax reform in a structural as well
all
an "economic" . . . . .
- 64 -
and corporate units should spur the additional investment of
both capital and human effort and a natural desire to make the
most effective use of both, tending in turn to minimize the
misallocation of resources inherent in any tax system.
(7)
The two enactments represent a new determination by
the Executive and the Congress to associate a search for greater
equity and structural improvement in the tax system with efforts
at "economic" tax reform, thereby opening the door to periodic
and persistent improvement of the structure of the tax system
~s
it is adapted to an ever changing economic environment.
There were strong voices and many counsels of expediency
that urged a course of fore-;oing any concern with equity and
structural modification rather than risk or delay "economic"
tax reform.
The pressures for IIquickie" tax cuts even of a
temporary nature will he recalled.
- 63 -
existing structure with the inevitable result of increasing
pressure upward on existin3 rates or passing up the opportunities
of tax reduction or increased income tax generation to reduce
the rate scales.
This adoption of rate reduction as the primary objective
of
bO;:~1
net tax reduction
.:'.:3
well as base broadening means
that the nation has reincorporated in its tax system a
reassuring allegiance to the principle of rewards -- the leaving
of increased percentages of income after taxes with all those
who invest additional effort and capital in economic activity.
In short, the profit motive, personal and corporate, has been
Tecognized and invigorated
"tS
an obj ective of tax policy.
The
reduction of rates, up and down the scale, by leaving an
additional higher percentage of earnings with both individual
- 62 -
aigbt bave happened to the tax baa. if net tax reduction
bad been
primarily or 8ubtltantially devo't4tCl to
1_
0 ....
out
De. decluotions, orad1 ts or other 81'0.10u of b. . . "biola I i "
preferences depending upon the source or uae of inoom. or tbe
position of the recipient.
The Revenue Act of 1964 represents a decision to arr..t
the gradual erosion of the tax base through special preferenc••
and privileges for certain groupe of taxpayers.
Tbe de811D
of the future, 1f the policy of the 1964 Act i8 followed,
will be tbe provision of necessary revenu.. at tbe lo. . .t
possible tax rates whenever tax reduction
opportunities are presented.
O~
b. . . broadeDiDi
This is a commendable .witch
from the old pattern of opening new "loopholes" in the
.. 7
-
I
t~
_
- 61 -
"economic" tax reform and structural modification for purposes
of equity seems to have been overlooked by many commentators
\vho choose to define tax reform only in terms of base
broadening.
It is true that the Act of 1964 fell short of the target
projected by Presidential proposals of $13.6 billion of rate
reduction in a bill with net tax reduction of $10.3 billion.
This was largely accounted for by the refusal of Congress and
the public at large to accept the restriction on itemized
deductions in the so-called five percent floor proposal which wou:
have produced additional base broadening revenues of $2.3 billion
However, the picture is much less gloomy if one considers what
7~
I
_
- 60 -
n•• de of war,
1l0W
bold back growth and lead to cU.tort1oQa
in the tax structure.
About half of the Act's provislou will ..Huee lDe. . .
tax.. by a groa8 total of $12.4 billion aADual1y WbeD the progra. is fully effective, of which about tll.7 b1ll1on i .
allocated to reduction in individual and corporate rat.. ,
leaving only about $700 million of tax reduction aa a
of other structural changes.
oOD8eq~
The reaaa.ining prov1a10lUl, of a
base broaden! ng nature J will increase revenue by a total of
$835 aU llion a year, more than offsetting the .uuotUl'al
changes that lose revenue. and leaving a net total ... cut
01 $11.5 billion.
The aignificance of this
overwh.~ng
Bxecut1v. &ad
Legislative choice of a policy that utilizes
rate reduction as an instrument of both
- 59 -
acceler.J.tor effect to the p:~ocess of growth that will flow from
the tax program.
The interaction of these two facets, with
the one aiding and abetting the other, is of vital importance,
givinz the program a balance that is, perhaps, the most
important and overlooked aspect.
(6)
The Revenue Act of 1964 makes a reduction in income
tax rates the primary objective of income tax reform in both
the "economic I' and s truc tura 1 senses.
TI1is tax policy signified a recognition of the fact that
current high tax rates from top to bottom, both individual and
corporate, were too repressive for maintenance as a part of our
permanent tax structure.
The law expresses a national conviction
that these high tax rates
Oil
income, increased to meet the
17Q
..;...
•
•...1
- 58 The
COQSllDl8r
expendi tures generated by the incA. . . . io
take home pay resulting from the tax cut to iad1vlduala wll1
set in motion the familiar economic proc••• in wh10h .one),
is spent and ra-spent throughout the econo., and ultimately
increases consumer spending by several tl... th. ...unt of the
That
initial tax cut -- the so-called multiplier factor.
strong and sustained rise in consumer deaand markets and profi ts for business -
will further bolater the
direct tax incentives to investment.
in job
To encourage lDYHt.eot
producing facili ties, stressing of
required.
and thua in
COIHI\llDer
demaad 1.
The purchasing power of the consumer auat be
increased to effectively utilize present productive cap. .1ty
80
tba t addi tiona to produc ti va capac! ty Will be WOI"thwhil. or
replacement of obsolete high cost oapaci ty eM.i.-ule.
The operation of direct investment inc.at1vM will ad4
to the total of consumer purchasing power 1n the banda of
additional jobholders, suppliers, etc.
TIll. proc. . . ucla aD
,7Q
I
_
~.
- 51 -
1aportani ecoDOllic obJectlv..
It wu f.lt tbat botll
tax reduct10n io st1aulat. both _\lllPUOQ
approach. . -
aDd 1ov.....nt -- 10ter&ot1nl topth... would
ubi.v. a ....
dynu10 and suatained growth tllaD would &-e8ul"
on
ODe
f&"fa
a &".11. . .
_tbod to the exclusion of the otAN.
The recenily enacted tax bill providea a
.t1.,,1\18 'to
COWl_I" purchas1na
ppwer.
Of
~
aubetan~al
reductiou io
eventually abo"t ,8.6 billion will be apeat on add1tloaal
Q01lswaption.
The lug.at lihue of the lDd1vicNal ..eduotlo..
will 10 to those with 11lC0IIe8 of ,10,000 Mel las, _lao need
1 t JIOIIt, wbo account 101" close to 86
... tUl'D8
and who are 11kely to put a l u. . putt 01 tbell'
reGuctioll 1nto the spending .tr....
live.
perc.at of all ,uallle
ua
1111. 1. when tile cuaw.rl
Under the recently enacted bill tb8W reoe1ved
aearlr
60 percent of the overall iAdividual l'eelUC'loB, with thei ..
abare of the individual tax loacl belas ~ f&-Oll &0 to
48
percent.
- &6 -
But it is the total or coabined ettect that sbould be
decisive.
By increasing the profitabllity and l •••enin. the period
of
risk of new investment th. . . . . . .ur. . adopt the _at
effectlve way to make more attractive the lnv•• t.ent decl810Q1
which -are no-t being taken 'today.
'lbey aake today'. MarilDal
inve.tment the acceptable venture 01 tomorrow.
They 0p.D
tbe door wide for new technologi" and new products and
services wbich, if they are developed with thelr new .ark.ta,
create new demand, add! tional investment and ftn joba tbat
would never bave been available before.
(5)
TheBe measures seek to effect a balanced tax
reductlon -- one purposely desli!ed to provide both add1tl~
consumer purcbaeing power and direct inve.tment lnc.atl v_.
This balance served not only
to Batl.fy the requir. . . . .
of equi ty in a direct distribution of benefi ttl but alllo
-6&-
exaapl., the cbange in the adaill1atZ'a:t1v. . ."lea
coacenu._
depreciation doeS aore than reduce the SUid811ae 11••• f _
aachinery and
equ1~t
to coll1ora to up-to-da t • .,... . t1_.
much grea tar freedoa in fixing hie pnfen-ecl 11f. tOa"
aachinery and equip.nt, pZ'Ovldecl oal)" that bi. actual
r.plac~t
pattern
conf~
to hi. _tll1&te 1. a NIUIOPable
This policy
rat. . of business taxes will not only ....u1t in 100.-eU_
a.oderDizatioD a.od stepped-up growth 1n extatlag pZ'ocluct aM
service areas; they should speed the tZ'aawla'tion 01 pwoduat
developments from the laboratOZ')' to the pZ'OCluct1oa aDd
distribution
line in an ever faster cycle aDd belp to pnYld1
inviting outlets for new technology, iac.Btive,
p~oc ..... ~
ventures which mean. new jobs at 00•• aacl .." .arket8 bo~b ....
and abroac1.
-
54 -
.
co-.cnorate r:ltes from 52 to 48 percent and t;l.e norm;J.l tax rate
on the first $25,000 of corporate income from 30 to 22 percent,
.J.nd the reduction of individual rates on unincorporated
businesses, and the unlimited carry-over of capital losses for
ind:;"viduals at a rate of $1,000 a year.
of these chun:;es is to givt:: '
dramc~ti~
The cumulative effect
s~li:Et
in emphasis on
investment in our tax system.
These changes have greatly increJ.sed the after-tax
profitability on investment:.
They have shortened dram:ltically
t:1e period of risk or payout on new investment.
They have
greatly increased internal cash £lm'1, particularly for snaIl
business units where availability of
limitation on the growth
3.l(;
c~pital
is an important
development of enterprise.
- 53 -
m;lke this tax program
of domestic growth
a~
L
:,ey to resolving t:"'.e interlocking goals
external stability that are inseparable
from one another in the open competitive environment in which
we and our trading partners and friends in the Free World
now live.
(4)
These three measures give body to a positive policy
of reversing the hampering effects of the tax system on
investment incentives and materially strenathening those
incentives to provide increc.sed jobs, increased produc tivity
and competitive efficiency L..:Lnd_ a
v:l.~~ous
The nevl investment incentives include:
economic grow17.h.
the investment
credit of 1962, together \'Jit:1 the 1964 revision eliminating any
reduction in depreciation )c,sis to reflect the credit, the 1962
revised depreciation guidelines, the proposed reduction of overall
- 12 -
a tax policy related to other inatru.enta to . . .t tb• • •ew
changing cODdi tions that will affect a free
ecGllOII)'
111 tbe
type of OpeD world 1n which we l1v••
Tbe aaae coordination of tax policy Wi th ot.... polle1_
to coabat Wlemployaaent 1s necessary because ....,. of tIMI
~loy.d
do not have the r1ght sk1l18, are DOt in the
~1pt
placee, or otherwise lack access to tbe joba that .... opea.
The tax program now adopted, with the related pollei_ of
expendi ture control, monetary aDd debt . .nap•• ot, . . . .
to establish
~
financial environment suitable for the
Sixtl . . so that we can take full advantage of the gatberilll
forces for economic
pro~ress
proper coordination of our
both at home and abroad.
a8W
., a
tax and flscal pl'Ograa, . b t
.anapmellt, ItOnetary poliey and balance 01 pay_au polio1
we ..
-.1 1a avoicl1AM iAtlatiOJlU')'
cap! tal.
&ZO~
~_\IZ'eII
or increased outflo. . of
WlUle tax pollcy atrugles to
OVea"COM
the alo.
tbat dulla 1nveet. . .t lDCentive, fosters laef11clent
prof1 t IlU"giu, tJaereby retalaiag ca.pi tal flo.. in the UIl1 ted
stat. aad aAarpeDing our COlllHttitive abilit1 . . , 8aOD8tuy aacl
diacourqe outflows of short term cap! tal aDd ciautpen tenclencl.
to 1nflatioa.
J_t as
we learDeCl
111 World War II to correlate tu pol1CJ
w1 th other 1Q11trUllents to meet the extraordinary a.aDda of bot
war, . . .\lSt constantly search for the policy aix that iDCludll
-10aeconQ, _
the tax cut becoII_ full)' effecUve &Del the
ecoDOllY elq)aadll in
n.sponse,
the all.ocat101l of a aulMltaDtial
part 01 the r_ulting revenue increaa. . toward ella1aa't1q
the "ansi Uoaal defici t."
The actiOD 01 Pres:i.cient JobQaoQ ill pr.elltiJl& aa
ac'-"o1.t.z'a'tive budpt for fiscal 1965, tbe peri04 1n wlUc1l
the Act w111 begill to beCOlle fully effective, provic11oa
I.o~
expeACl1 turea allptly less than the budget requested. 101'
f180&1 1964 or expend1 ture' projected tor that year, p ....
coooret.
~&1it1
to the importance of relating tax reduct10a
to e&peaditure policy.
But there are other important correlatioAS betWMIl tax
pollcy aDd other
.~n t&
of general ecGllOIIic po 1107 •
••
have seen why UDder currot balallCe of pa7-ta ooadiU_
tax "lnd fisca.l policies ought to be preferred to 8OaetaI"J
policy in providing f~sh incentl ve and continuing at1_laU••
- 49 g
.btu.
power.
ecoaoaic motive
DOt taw de1101 t.
All of
U6
The taK
out ... the obJective •
would haft preferred to puab a tu
PX'Op"" 1avolY1111 substant:lal tax reduction agaioat a backP'OWld
01 bud&e1 balaace or
reclucUoo .-.pi te
.;1.
sUl'pll~.~3ut
we were willing to puab tax
defici t because of i t8 aDt1clpateo effect.
p&l't1cululy when thc.I.-e
W·l.S
a policy of expend! ture control
ACCQIIp&JlylnK 1 t tlla t looked to buoget balance or surplus
tbe
eco~
approacueu
satisfac~ry
neD
employment levels.
Oftu_, in the course of debate and cOlltroveray aurroUDd-
iDe the 1 _ _ of whetber 1 t was wlse to reduce taxes in a period
01 aua.taDtlal budget
l"ei,\c i. t,
j'ot
sl~bSt,:1.1ltl.i.tl1y
the illpOrtaace of correlation betwee. pollet_
1 t was DeC_ary to
poliei..
au_.
unused reaourctl
wall
OYU'lal"'.,
coaatillually tile coord1D&tloD 01
For example, ill describing tIM pzop'- ....11 1.
February lot year I stated that 1 t had
"two lllain ell.FI.U:
firat, a subataDtial net reductloll ia .ederal tax_.
meaningful lowering, in several stages of tax rates • • •
~J
- 48 (3)
of
1~64.
'!bee. three
_~~,
add new, but 11 t_tl.~~
l_portance of
..p.artlcularll the ReveDue Act
.:~~d~stoo<!,
di_u1onB to the
coord1natill~"..'t_:l~_~}icl:_~ th
mon~tary and cred1 t
pol1cy._ .. a:.~~~_<!!.l.!~_ ,managemell!, particularly
in dealing with economic
balance of payments,
For exaJnple, by
budget eltpencl1 tun~
~_h~~_k.! ___deficl t~
and_..:.L...~iJ~t_'!_~!".
coor~Hniltin;;:
control, 1 t becomes fiscally
in
~ur ~llt.rD.t1oDl.l
t.hreate .2.1. lnflation.
tax reduc'tioD wi tb expeDd1tun
r~s!,onsible
to reduce taxes as e1tb1
slack when there 18 likely to be a budget deficit, as 9811 ..
1D t l _ of budget balance or surplus.
This wl11iagaeaa to
reduce taxea, despite the existence of a buclget deficit,
.....u
be sharply distinguished from the econollic 'theory that t ...
purpoae of the tax cut 1s to create a deliberate budget defieU
- 41 lIOn th , of au i uiusion 01 dollars and iAC.nti v . . into the
private sector, tilese measures have already providec&
1~rt&At psycholo~ical
thrust, as witD. . . .d by
of 'the ecoaomy ill 11>63, pU""ticularly the latter part.
healthy economic recovery and growth dependa heavily
coJlficlence, initiat1vti, l.ucelltive, opti.ma.
the private citizen auu the
tu reduction will
):;e
all
priv~te
A
upoD
&lUi iJlciuatry
business sector.
U.
of
tbat
a tonic to reduce aluwsbDess and alack
bas been and will continue to be demonatrateu.
There is iatpo.&:tant suOsta.ace in Chairma.n Wilbur tills'
a.wl for F.(l~t'al i.lnances whicli. we can co.afJ.dently expect :fJ'OII
this bill
lila}
botil ~rml t
anu require add! tiona.l tax recluct10D1
in the not ,too ti.ista..at i'utw"e.
-
reduced.
46 -
.1- \:~ \.)
The reductions under the recently enacted tax bill
reduce individual income tax liabilities by about 19 percent
or $9.2 billion.
The changes in
corpora~e
tax rates under
the bill, together with 1962 reductions under the investment
credit, the liberalized modification of the investment credit
in the Act of 1964, and the revised depreciation guidelines,
also reduced corporate tax liabilities by 19 percent or
$4.75 billion.
The combined effect of this reduction of approximately
one-fifth of income tax liabilities -- the
largest in our tax
history -- will provide a marked economic stimulation to both
consumption and investment.
Apart from, and in addition to the effect, beginning this
,.
-
~
- 45 -
reduction as a means of eliminating th.:lt drag and stimulatin3
the economy to a higher rate of activity as a means of achieving
balanced budgets in a full employment economy.
Also tax reducti,
could be used to stimulate the modernization of plant and
equipment that \vould provide increa.3cd productivity in addition
to a fuller utilization of resources.
previous years
o~
Also, the fact that the
slack had been marked by increased rates of
Federal, state and local public expenditures, and personal
consumption expenditures, but relatively static investment leve:
pointed to' the choice
0.(
tax reduction as a weapon to deal with
a lagging economy.
As a result or the
me~sures
taken the overall weight of
taxes on the private secLo~ is in the process of being cons~d
,")
-
reduction to combat econonj
4·~~
l~ck
the way, to more r,'",")_:'_u_'_e_"c_o_nc~it
-
and sluggishness and pave
rowth.
Studies show that, given the tax system and income tax
rates of 1954 through 1962, the American economy, working under
conditions of full employment, would provide a substantial
budget surplus.
This revealed that the government's tax and
fiscal policy, reflected in the budget and tax rates, was
exercising a restraining effect upon demand and activity in
the economy.
The fact
th~t
the mixture of tax rates and
spend~
levels was actually restr:i_ctive, even though the budget showed
deficits, pointed to the existing tax structure as a drag on
tW
~
economy, slowing down growth and choking off expansion short of
the levels that would give full employment and utilization of
the nation's industrial capacity.
It also pointed to tax
-.:1-
a dynamic private sector is fundamental if tbe oatlOD 1. to
beu11 t fro. rapid growth and bold 1 t. pos1 tlOG 1 . . . . .lcl
affairs by retaainlng cOIIpeti ti ve with other industrial eoOllClld_.
The
II&~ tu4e
and the distributiOll of the Federal tax burclea, •
•• 11 as the totals of Federal expendi tures aDd the natloaal . .
which condition its overall impact, from DOW on will be &
primary object of public attention.
TO make an 1at.lll,eat
use of tax and fiscal policies to help insure a prosperoua
economy and adapt a tax system to the vigor of tbe
eco~c
Insti tutions wbich represent the Aaerica.n way of llf. will be
the objective of both political parties, the F.-ral eucuU.,.
aDd tbe Congress, and leaders from all walks of I1fe.
(2)
These measures are a positive atte!pt to use US
-
~2
-
our balance of payrnc its problem, and in association with a
policy of expenditure control, to bring the nation back to
balanced budgets or surpluses.
Of course, these three measures are not the end, but a
beginning, particularly if they prove reasonably successful
in the achievement of these objectives.
There will always be
an unfinished task of adapting our tax and fiscal policy to the
changing economic environmenL in a manner that will strengthen
our economy and maintain our preferred pattern of economic
organization.
In a society where an increasingly large percentage (now
about 27 percent) of annual income is drawn off by Federal,
state and local government -- a national tax policy to promote
- 41 -
consumers and investors.
profitabi
These tax measures will increase the
uusiness, the rewards of labor in take-home
pay, and t:1e incentives for the investment of both .capital and
human endeavor.
In coordination with other policies these tax measures will
greatly increase the prospects of combatting successfully
unacceptable levels of unemployment; they will aid in and reduce
the cost of public and private programs for reducing poverty,
eliminating depressed
area~
and facilitating an adjustment by
management and labor to both the dynamics and disciplines of a
modern industrial society.
These three measures are also tailored to deal in many
ways with our external financial relationships, exemplified in
-
(1)
Fir.
4Q
-
and foremost, these measures evince a new
national determination
to~~
tax and fiscal policy a positive
role in our political and e2onomic system -- to affirmatively
utilize tax and fiscal
po~.icl
in the words of. the EmEloyment
Act of 1946 "in a manner r:alculated to foster and promote
free competitive enterErise and the general welfare."
The three measures have been primarily designed to contributl
to a substantial increase in the level of economic activity at
the initiative of the private sector -- both consumers and
investors.
This increasing activity will utilize more fully
our growing labor force, our expanding technology, and our
increasing quantities of capital, in a market economy in which
these uses will be determined by private decisions of both
(
,-.
-39 -
~
. ,-,'
".;hich contributes significantly to m--:lintaining stability
in the general price level and a stable and high rate of use
of human and material resources; a tax system which interferes
as little as possible with the operation of the free market
mechanism in directing resources into their most productive uses;
and greater ease of compliance and administration."
Against this background of contemporary economic
perspectives and the history of Federal income tax policy as
it relates to our economic well-being, let us summarize some
particulars of changing direction that make the Revenue Acts
of 1962 and 1964 and the administrative liberalization of
depreciation a turning point in tax policy.
- 38 -
Iu 1959 a major study of the income tax .&8 conducted
by the House Ways and Means Couai t tee, under the Chail"lUJUlhip
of Congressman Wilbur Mills.
on papera from
IIOIIe
P"dllel diSCU88iolUl and bearinp
180 leadiug experts were held in late 1968
on "Ideas a.ad Suggestiolla Submi tted to tbe CoIIIIDi ttee 00 Way.
ana
;&ea.ll8 on
the firQ,-,u
Income Tax Structure.·
1
~,ubJ act
of B.evision of the Federal
Iu anllouilciut;: tbe inquiry into
opportunities for constructive reform Chairman Mills atated
that
"'nlt)
immedia.te Oh,J8ctive of income tax reform is reductio.
in tu rates without
sacrif.icln~
revenues required fer the
responsible financing of goverruaent."
He listed first among
the objectives of tax refor.. "a tax cl1Jaate IIlOre favorable to
economic growth\! , .followed by" brea tor equi ty
tllrou~
closei'
adherence to the priuciple that equal i.ncomes sllould bear equal
tax liabilities;
aBBW'allce
that the degree of progres.ion 1n
the distribution of tax burdens a.ccords as closely aa potniblt
wi th widely held standal'us of fairness; an overall tax
.,.u.
-11-
expa.u1oa.
The a.port of President E1 . .Qbow,r'. Cor
Fi
. .ioa
OA
Goals, released in late 1960, str. . .ed tu pelleJ . . .
laUOMl
iUp nM
to the achievement of econoa1c growth "at t.ba 11&&1. . nte
eOJ1ll1. ten t wi tb priJlU'Y dependence upoD free .......1.. &ad
the avoidance of IlU'ked 1aflation."
"Public pollel. . , particulul,
lJ1prove the el1l1&t. for
DeW
aD
TAe Co
.i.II1GB ur_
oYeZ'bualUa of
~
~,
tax
iavut.llt u4 tbe balaaci. . 01
lnv_ t.en t wi th couu.ption.
And, aa lI&I1y of you in the I'ooa will l'8Call, "'p1 M UII
lack of broad public a&lU popular &tt8I&t1_
to tU INDJect,
the yeast for tax polley CbaD&88 was workiq ..... tIae
._!IIIt
practltloaer8 and private oraaDiaatioas 0108. . t ' - tbe ~.
- 36 exanUnat.iOD 01 "f.oeral T~ Polley for EcOAOlaic Growth aod
St.abi1ity."
Hotw1thbtau~Q~ th~
a nat.10aa.L t4JL
~()l~cy
valuanle stockpile of p~poaala on
for growtb, the
yea.l'&
{rom 1954 to 1961
sa.w no tax policy change_ 01 subataDtial 8CODOII1c .1~f1cuace.
~,<e
coatiaued to ret&1D a taigb ra.te incoae tax on tile
ecoQOllly 01 the coUiltry, regard.L. . . 01 ita 1-.pa.ct OIl the
1111 t1at1ve of illUividual8, on the lnv_tMat ot capital, &Ad
the
cOll8umi~
power aDO habits ot the general public.
110 wever, the concurreDCe of ecoaoaic probleB18 that emerpd
in c.A.earer vie_ in th. latttil' part of the .la&t ciecaue "aa boUDd
to
brill~ 1ncreu;ing
attoauon to t.ax policy
lo,' exaaple, both c.lACiiuates
tor the
&8
ODe 01 the
presidency 1D 1960
- 35 war, threats of war, emergency defense programs, and inflation.
All of these artificial stimuli have :~e:i.<veu to foster and, 1n
mauy ilUltancee, to finance ecoIlODlic eXp.:lll81011.
As one loolul
forward to normal growth, the ilftport ..:wce 01 restoring llOrlULl
incent! yes and removing punt tl ve tax provisions becomes cl.ar."
Indeed, a predecessor in my current ofiice and good fri.nd,
Under Secretary of the Treasury Folsom, saio. in the fall of 1954,
1n appraising the 1954 tax la"l:
"In
aUj'
case, in a growing and
Ch.l1ging economy, tax revision is necessar llyl. continuing task.
We also look ton'u-d to future tax reduction since we appreciate
fully the severt ty of our present tax i.mrdell and believe that
its reduction 115 essential to the contiuuetl prosperity of the
country.
110 wever , we also believe that additiollal tax cuts IIUIt
wa1 t upon further reductions in F'edera.l expendi tureB."
They never ca.ae and nei ther diG f'irther tax reduction.
In 1955 ~ Subcommittee
Oil
Tax Policy of the Joint Sco~c
Commi t"tee, cha11~e.j by Cou;.;ressman 'Ni lbur Mills, conducted an
- Nperml tt8<i cu.rrellt d~ductioWi for .reaoarch aAc1 devOlOPMAt
expenaos
,UUl
lJerUl1 t ttH~
i.l.
di v idenc1 crec1i t ill the bolief -
Wb.J.Cll 0Xperl.enco ilas p.l'oved Q.ll88t1onable -
uecessaJ;Y to assure lleeued equi \1
F.isel.lhoweJ.' iu his first ~tate oi
must develop
~ syst~J4
01
t~tion
c~i tal.
that it W&II
I Adeed , Pr. .ideat
the Uuion Meaaage .aid: III.
which will iapoae tho leut
poaslble oOliucle to tae dynamic growth ut the COWltl"Y."
Iu a somewhat prophetic commentArY Dr. Dan Smith, then
~pec1a.J.
1~55:
Aaaistaut to tbe Secretary 0;( the Treasury, a&1d in
".(n turAUllg
to econoAUc
to refor_
~ruwtUt
Q. .l~ned
to reduce tax barrien
one preliminary comment Dli4Y be appropriate.
1'he ques tio~ is BOiAet1mea a&~eQ fUi towby any reUel 01 'lhi.
sort is :leede(l \iueu the economic syste.. b.a.a grOWIl
&pectacui;u.~ .... y aJ:a it
a8
nas over tlle Llst fifteau YOU8.
""CiJ..Cctl.OLl briab"i) out
the
A 11 ttl.
obviows point that the "rolJth 01 tbl
last Ii iteen tears 11as Ue0u .La au eUV1r0WQ8At cha.racter1ud
bJ
-33Even tue passing of the &DreAD War &Ad the IDtez'Dal
Revenue COde of 1!*64 brought 11 ttle chaDge 1a rate lM:a~.
The first bracket rate 1'or iDClividU&la 00 the 1'1n1t ,2,000
beCalM
20 peA-'cent with the top bracket be1ng 91 percent.
The corpor4te rates
a 30 percellt ooraal ias aad. a 22 pen.at
8urt4X on iocome over $25,000 making a eo.biaed rate of
52 percent 00 the latter inca.e to year
u~.... i
were contioueG 011 a yeU"
••
Howevel', tbe tax ac tiODll taken in 193. cUd recoca1- that
the
r~duct10n
ot tax barr1~& to long-tera ~th _aa aD
appropriate econoaic objectlv. of tax refon.
10 ackU.t1oa
to persdttinb the expiration of the exce8a profits tax, .taor
ina! vidual rate reuuctiol1,
80IMt
rec:luct1oD ill eac1_ tax. .
aAd
aany techuical chang. . , tue law recogn1&ecl the aMCl tor tu
!aceat1 ves to invest 10. pla4t a.xaG equipmeat.
took the form of a provision alloWing a
~
Tbia recogai tiOi
rapid writ...ff
- 32 O~:L~'-liY( w.i..llioli iadividU<iA1. were filini t4lUble return.
by 1945 with th(~ initial rate at 23 percent.
At the
.AIM
ttn¥' the ton i'~ori)01:"\tjilll ~ite rose to 40 percent with an exee ..
~
"..., .
corporation r·.ltes ve1:"e fixed at
3~
percent.
t:'!ouplf"$ were penn1tt;·\"1 to compute their
. ::t .'- ~' ..j,:"~
., ',) ),. ;
,~.I.
Also, married
t::lX 011.
rcvr-rsal,
a split income
pushin~~
the
;~i.'i~ lic on corpor..lte incomes over $2~,.
- 31 SCdrce materials, rationing I.l,nd regulation of CODSUlMtr
credit -- and forgotten to do anything about tax rat ••
l~ed
for the same reason.
Worlu j;ar II made the income tax into a . . .8 tax.
Li3~J,
:lfter ;], quaxteJ.' celltury of the
existence of the incOile
tax, there were only four ntillioll returns filed of the
popul~tion
four percent
Oil
four perc.lt
(14 years and over) -- with rates scaling In.
"taxable income below $4,000 to 19 percent on
i llcome in excess of $5 mi 111,)n.
tax became a vi tal f1sC':11 weapon.
But with the wa.r the inCOM
In the words of Prof88eon
Surrey and Warren:
.r
Almost overnight it changed its IIOrll1ns coat tor
overalls.
club
Until
Itsraembership sprea.d from tbe country
(Hst.l.'lct dowu to the railroad tracks, then
ovor to the other side of the railroad tracks."
- 30 -
govenllBent procurement -- 'i u lte
P1:'iV,H:~ set::(.or \.:'~)x~lated to
c>c contcc.. ry.
'.'(>t.
1:~1(:
levels and ma~itudE' of Federal
L1Come taxation were of such
<i
chardcter as to inevitably
t,L1Y a major role in the fUDCtioniag of the private econG8y.
They had been necessitated hy
.lVCJ:-t
cold
(;.t1C
pos~.,:Ia.r
W..lr
in:~ll.tlon
Wo'~ld
\,'ar II and maintained to
until tlw Kore.:lD War required their
anoiA}.1intaincd ,;l.t ..l 1d~.ifl level despite the changing
wedkenin~
ot pr '::'Vite initi:tt.i:ve reflected in the diminl.hiDa
SC.llc of uusiness rixed investment. and the ever tightening
constriction ot the
hi~h
rates on eonsumption a8 advancing
'::'neo~~ lIt'vels pusilee ·..in incretsing percentage of the
',.'",.- ".; .,'.,-, .... t ~~
"r
-.;.\,,_ • . " ..... t \ ; .
~ i:
W·:1;'; ,JS
-
~.lt~S
on
aur'-~
populat1oD
i lla. 1 in come.
'::'-Ol'!:::~l the nation had dismantled all of the
- 29 wi thCl':lw.ll from our respousibili ties abroad
Free World security and development.
tor sharing
in
We were neither content
to assign to government our priaary rel1aace for a higher level
01 ecuaouUc .:4ctivi ty .nor to acimi t
no lotit,;cr coul.d
,H:;t~';'lct
inv~stmeat
that our ecoaoaic proapecta
.from c:api ta.l sourcu at
tlOme aac <\.Jr\,)aG or t~lat our e:f1icieucy would no longer enabla
us to
:l.ch~evc
I I I.
eqUJ.lib.t'ium ia O'JI' oalance of
international
Tax Policy ?ersJ,,!ct.t ves (1939-1962).
There were other reasons for a decision to utilize tax
polJ.cy to meet theae econoadc probleutS that emerged in the
late fifties
illCvillO
;,wu carrieo.
ta.A systei1l h:l.c,
1:J3 ..... aW..l,
l:.lCe(.lC,
~'4tC :;.c~les
!lot
OV4,u'
into tile early Slati..
i;eeol fun<iameutally chan&ed
'Ibe
since
l"elirese.nted lU'gely a carryover of war-ti..
i,;,jpvse~
to l-estr.lLl denla.nd ana equalize sacrifice
- 2S -
of
,
01:
~
J..":'ji/i
8.J.:;J~S,
or
lc.'~L;
Oo!.:
C l~ C
tl:'l("- ':im£:'
sf'nee 1957 beeaus. of
investment capital.
:J-,:-po·:..Ll.:e porr.:ion O;:;l~03S Mtional product.
-\11 of thes(' factors corriliined tc· f'tlCourage a search for
t<l...""{
.. ........ ' ...
,{
-.
'-.
-::
.~
.:
-
~
?oli:y serve eeonomic needs -
both
- 27 ii.l'st iitae stunborn balance of pay. .nt. deticl t.
tL.~
;. 0":
;')Oi:lteti to .... u·u rest~'icti va policies -
at l.ut boosting
short-tera iuterest rates or imposing penalty tax•• on
foreign portfolio investment to keep U. S. funds !roa
110wiug abroad.
'..l'he coablilation
doi.lci tB 1 inti tee.
(.Hll'
.1.5
11 we
optiou to tlloze of an open economy in
~l.'e-l~5'1
contl'alit to ;:-\
'J/eloe J..a 4
of full COllv8rt1b11i ty of
Ei tuatioJl in which we could largely act
closed t;conomy.
In adcli tion to limi ting a
'1Onetuxy and cre<i1 t policy as a . .ana tor
reli:.ulce UPQ:.l
expansiOJl an.:! i;ro'Wth, the balance of payments 8i tuation led
to
1ncre~~inb
ilora -
Loth IIl£
cos ts so
aUU
RtJ.y
emphasis on
hont:
lOOauB
up private investment at
01 increasing producti vi ty aDd 10ftl'1.,
tv attaiLl a dtJ:'ou~el' 9061 tiOll in aarketa at hOII8
<4S
~road
a
ste~ping
anu
01'
ab
a means oi
dttr~ctia&
flO'll:' to the \Jri.ite~ ,:,tates.
iuvestment dollars to
- 26 L.Ll.t.
~,iCre.lSeS ir~ job,;,
leavin~
out those on tarM, totaled
-1.3 LU Ilion from 1957 Uu'ough 1962.
Of these, 2 aillion
:JcclU·..:'€d tJl the ~overl1ment
alJaost all State and localj
sector -
30d, GOI) wel'e '.1ue to governmeIl t
wero fOl.1ad in
jobs,
;lon~rofit
procurement prograJU; 700,000
institutions; 600,000 were part-ti_
1e:lviug that p<lrt of the private sector not doing govern-
mellt \Vorl'. ',vi th
l.~b'e!.l
tll~
;.L
net job creatiofl of 200,000 in the six-year
poli tical and economic reasons for directing
J,<ltional pol1c;.' i.,t1itL.l.tives to the i)rivate sector of the
economy, there
J.
,!;:i.~
c!ilOthcl· a.l tern4\. ti ve to tax policy -- the
J«:.e of ered! t a.;w monetary tools in an atterapt to
Clcre ..4seC
,)l'ovh:.a stlll lower illteJ.·IJ~t rates and substantially increased
S'.!.}Jiil}.e-~~
of moncy ~~ld. \'!ro<.i1 t.
:(eulledy ~oiiltet.i out ia
i
hls audress to the EcollOaiC Club of
.- "'.~
• 9'"()
-.. 'ec \:l'j".""'\:'!r!
0 ....
1
But, as the late President
'0't.1.r
balance of paYi'llellts .1 tWlt10a
"In today's circumstances it ilS desirable to ••ek expauioD
through our free market processes -- to place inor....d
spending power in the hands of private C008U11era and inv•• ton
and offer more encouragement to private initiative.
Tbe moat
effective policy, therefore, is to expand demand and unl...h
incenti ves through a pl·ogram of tax reduction and reform,
coupled with the most prudent public policy of public
expend1t~
Economic analysis supports this political preference in
today's Circumstances when inadequate investment in the privati
sector is a major reason for lagging growth, stubborn unemployment and balance of payments difficulties.
From 1957 W
1962, in real terms, lederal purchases of goods and servic••
rose more than 13 percent, total national output went up .or.
tban 16 percent, consumer expendi tures went up more than
17 percent, State and local gov.rnment expenditures went up
28 perceat, but plant and equipment spending declined by .ore
than one percent.
Secretary of Labor Wirtz recently e8tiaa~d
-ilT-
Growth itself might have been achieved by a .as.ive
increase in Fedel'a! spending well beyond the nece•• i tie. of
mounting defense and space costs.
But the President decided
against that course because of the political preference to
which he and the nation firmly hold.
increases in
~~overament
To depend upon massive
expend! tures as the primary reliance
for a higher level of economic activity ia to consciously
expand the role of government in making and carrying out
economic decisions.
In that situation, an ever larger pro-
portion of the nation's labor and money would be used directly
by the government.
The government's activities as a buyer,
lender or donor would determine in larger and laraer part the
use of labor and capital even in the private flector of the
economy.
In his Tax Message of January a year ago, the late
Preside'.lt Kennedy made his clear and unequivocal choice, aa1111,
- 23 8etweetl 1950 ..wd 1960 there waa a aha.rp decli_ 11l the
ra t. of incraa.ae of producti vi if pel' worker and per hour
from that 01 the ea.rlier postwu period.
with tue exception of the depression, no period of
1a this centw'Y has wi tlles.ed such a
cOllp.u,"able
le~th
di.turbing
ullQe~'-utiliz..::1tioa
Uai ted states as the
in~tidtives
U. S e
became
per~oa
of lUv2-63 e
;.1
of productive resources in the
vreceuin6 the new tax policy
And, surely, at 00 time alDce the
1Ilaj or indus trial power has 1 t 80
rlsJted ita
leadership becaus6# of obsolescent product1ve plant aDd
equipment.
1'0 iUeet ~his accWIl111a.tioll of econolllic
woea, tbe choice
t u policy as the key weapon follows logically froll
o.Ulalysic of the; poli tical aud ecOUODUC
altel'uativt: optious.
aD
limi tat10llS on
01
- 22 :;U(;t!
ot the total was due to a $12." bi 11100 deficit io
1959, resulting froJa an unanticipated rec... loD.
tn 1956 and 1951 business fixed inveatment averaged
ne..u'ly eleven percent of total output.
to roughly nine percent.
Thereafter it receded
The rate of lncre. . . io our stock
of business plant and equipment substantially dim1D1shed
after 1957, falling to
1888
than two percent a year, ca.pared
to four percent a year in the 1954-57 per1od.
There waa alao
a disturbing rise in the proportion of our aachinery aDd
equipment which is more than ten years old 1n the latter part
{)f
the docad\:t.
.i
survey of the abe of machine tools in the
u. ;; •• :,)y the American Machinist Maiaz1ne, sbowed sixty-foUl'
!>erCOll t to be at leas t ten years old.
SiJailar eatiaatea shoW
much lower :.>ercenta::;es of equlptaent over ten yeare old in
?r.::l:lCEI,
Italy, ':Jermany, the Uuited Kingdom and the U.S.S.R.
- 21 -
to ,L'euuce the WleJAploymellt of SOJDe 10ur &111100 people ill
our
~OWl t ...·y
today read.y, willing aGO able to work -
who
canDOt
liad job£.
'."aile OUl' 11a tiollal
level of
IJa.l'.Llt;
~.O
percent
~l'owth
ritte in 1903 Aas been at a
~n cous~aat
aollara, . . cannot 10rs-t
unia.vor,loly wi til .L'ogular ra.tes 1n Western European
countries 01
Io~',
live ana six percent -- or eveD our own
:fOUl.' ~ercellt tf:euo loU lll\.lCU of'
CU1~ uUlol.'1C(: of
L>(:(:u
.l:l
OVClo
thtt
tue
period priol,o
to 1955.
payments aeriei ts for the last two Y8&1'8 hlft
excess uf $2 ui llion a year -- a cooa1derable lI1PZ'OY""
;";:"-l/~ to ~4 Qil,Hull
annual delic1 ts that charactel'iJld
thu ye • .rs l0.j(j-bv, out still a serious problem, anu ODe we art
,1vV illb l.Lrruly to
solv(:.
- 20 _
~eaks
~d
of unemployment,
l~gglDg
growth rat. . , budget deflclt.,
continued unfavorable imbalances In our international
~J:l.yment8.
economic
',hat are some of the specific ele_Du in the
back~round
that lea to the new tax policy iaitiatiy..?
Take the matter of unemployment.
With an average rat. of
unemployment of six percent from 1958 through 1960, a
sustaiaed recovery that by now has stretched al.aat over a
three-year period, still finds our rate of une.ployaeDt .tuck
firmly at the intolerable level of five and one-balf percent.
In fact, not more than once in seventy-six consecutive months
a~
unemployment dropped below the f1 va percent level.
.J.uemplo'!ment loOilW as an
increasing threat.
True,
is producin;3: mol'e than one million new jobs a year.
is not
onou~h.
OUl'
'Dli •
eco..,
But that
We need five million additional jobs in the
fc\\' fell'S to l.tleet the r.'.piuly expaading youth force that is
~t
- 19 -
The
er4dic~\ioa
of 100& existing flaws 10 tb. lield 01
and tilere are aaaay -
equity and simplification
i41 tile
',' 1
tax
income tax systeJD b.a.Q to &1 ve way to a priori t)'
l'ec.~el';a.J.
for and major
that re.a1n
e~phasis
~olicy.
This
on the overall national
WOU:i
eco~c
aapecta
ueteraiuea by tbe pres1<ie.llt, the
Treowury aud the COllgress beca.use of QisturbiDg Gevelop_nta
in our .l.lational ecooomy
~illce
Ivtiti which cried out for firat
cOllSJ.ueratioll.
The iuuate strengtu 01 the United
~tat.s
in the l&&t halt
of the "if ties 'Ji<l.S hliU"re<i by deterioration in confiaence ill
t~c
vigor, growth potential
econowy on
~nicb
.ecoveries
~lQ
campetitlv.neBS of the
~1cu
so much depends •
f~om
rE.."'Cessions falled to reach a sati81acWl1
l·..,te 01 utlliz4tion of l'eSQI.U'Ces, much 1 _ sustain the c:le81nd
poice ",ver appreci.wle pel"J.ods.
tcaue.ncy to ever< more frequeat
)erloas of eXpi..L!lE10J.l ;,)"[
~ven
more disturb111i thaD a
recessions
was
the fac::t that
the U. S. ecOQOl8y were aarred by bipel
- 18 -
ii'bat this all adds up to is that 1963 wi tll-.ci
aD
aot1v.
r •• poIlSe iu tbe ecollOllic ca.aUDi ty to a new f1DaDC1al .oyl.....
lIlent of which the new directions io tax aad lillCal polioy ....
olD
important and significant coaponellt.
~uch
Ito
ODe CaD
t.ll bow
of the 1963 advance can be attrlbutable to the tax
policies put into effect in 1962 and anticipated tor early
It is
6~fficient
tax and related
to note that the
eXi)euu..i. ture
eco~c
1e~.
policy alx of which
policy..vdJ:J the keystone provided
ail environment that has coabined in this expanaioft to provide
a hlgher rate of econolllic growth, greater price stability, &Ad
a greater increase in eap10yment than in any previoWi
noD-
wartime expansion.
Tile fact that there was an ovenrbelaing refusal to I'8t1ll'l
to tne tax policy outlook that preceded the l'8Cellt illl t1aii ••
should give some pause to those who will detlcribe with peoeuaW
hindsight wny and how it should have beea doGe differently.
".
: I
-.itQ-
assets be depreciated from a level of 93 percent rather than
100 percent.
There was no suggestion that administrative
liberalization of depreciation, announced in July
196~,
b.
reversed; there was only some expressed d•• ire that the
liberality of that administrative action be confirmed by
legislative enactment.
Even SOIDe of the major opponeuts of tax reduction last
spring had second thoughts.
In a speech last October, Dr.
Raymond J. Saulnier, former Chairman of President Eisenhower'.
Council of Economic Advisers, noting his serious reservatioDl
of some while back, put the situation in realistic terms:
"As th1uss st:.l.nd now the prospect of tax
reduction has been so thoroughly built into the
expectations and planning and to some extent also
into the fiilancial commitments of individuals and
businesses that it would be .eriously deflationary
t.}
c,~ll
it off.!'
- 16 -
Only through examining the perspective. of our contemporary
economic problema and the tax policy •• tting of the la.t f ..
decades can we arrive at understanding.
The euphorla of a record-breaking 1963 in gross national
product, industrial production, employment, profits before
and after taxes, and countless other indices summarized in the
Economic Report of the President transmitted in January an.
confirmed by the current Economic Indicatora for February hlv.
not caused the national desire for the recently enacted tax
hill to abate one whit.
There was no serious suggestion that
the investment tax credlt -- the centerpiece of the Revenue Act
of 1~Y)2 -- be repealed.
T:1e principal legislative concern
~10W it could be Lrnproved by
the elimination of
'.J.
provision in
the earlier Act that deprived it of nearly one-half of itl
contemplated effectiveness by req~r1Da that
WI'
u.wly
~ir"
- 15 ~lO""
\fell (Jovel'llment expendi tures are controlled."
111 the '.~'...llie of passage a
have it that
i~come
generally agreed sentiment would
tax rates have been too high for bealth,
economic growth and that the door should be le:tt open :tor
further cuts later if this one works tbe way we expect it will.
LeaYia~
we
to the future the question of how :tar and how fut
travol down the p'-4rticular route cllosen, the support o:t tIlil
new tax policy expresses a ~.~p sense of
national purpose -
a
determinatioll to move the country forward to greater econollic
streu~t:"t,
:t\~E-.ire
"11 t,::tli ty, !;rowth and
~ffecti veness.
It r .."fleets a
to do awa.y ;lromptly wi th idle manpower and unused or
ohsolete
c~pacitiest
inadequate demand and inveat.ent. a
succession 01 substantial uudgetary deficit., and iabalaac..
~:.t.
our interuatiollal payments.
~:k/ .:<-wi Iti1Ger
whJ..t circumstances did this deep sense 01
:Ltt...::Hlal ptU',t.;osc; ('!Qerge .llld why did i t
fasten upon tax poUcf!
I
....
-~nM}T
well be
a
turning point at
a
crossroade.
Chail'll&n Wilbur
Mills of the House Ways and MeaDs Co-.dtt. . , & principal
arcbitect of the bill, said last week before it. final p ...agt:
"As a result of the Revenue Act of 1964 .e
will have a Federal income tax much more in tUDe
with our times.
But times change.
We should all
of us be alert to such changes and be prepared to
make further tax adjustments, if the.e should be
necessary and desirable, in the interest of a
healthy
growin~
economy and sound management of
the Government's fiwulCes.
Indeed, pre.erving the
gains for the economy and for rederal finances,
which we can confidently expect fro. this bill,
may both permit and require additional tax
reductions in the not too distant future.
"Whether or not we will reali •• the opportuniti ..
1'0.1'
lurthel'
t.LX
l'cductiou wi 11 depend in great part on
,3
- wIt 1& also remarkable that the c11ainiah1n" oppoai tion bee ...
increasingly divided in its point of vie., with part of it
finding little co.tort in the status quo, and aDOther part,
fearful of change, united only in skeptici •• that the aajority
had enosen the lIleana most appropriate to worthy objective••
Moreover, the national Qecision embodied in all three
01 these tax policy determinations -- the Act of 1962, the
administrative liberalization of depreciation, and the Act of
19ti4 -- has
very long-term implica.tions.
These
were not "quickil
tax measures taken ou the spur of the lDOmen t to meet a teapol'&l'7
or Vassing situation.
lVl1g
They represented action r.aponsive
~
a
:telt o.e(.1, long ovel'due -- truly a turnin& pOint in
~l;i tional
econom.1c policy -- considered and peraanent in natUl".
iior a1:e these loug-terBl implicatioWi liai ted merely to
UtO
3.
results of the a.ction taken.
El()Vemeat
Thia aay be no mere pauae
to be l'esw4ed in the previously held. direction.
iD
It
I
I...
-.~.
-
new massive revenue acts have beca.e law 1n eight.en aontb8,
embodying a reasonably cohesive and consiatent approach.
The
proposed Revenue Act of 1964 was voted last wee. on .ucc... ive
days in the House and Senate by majori tie. approaching foUl'
to one following intensive debate in volURdnoUB detail during
tne preceding thirteen months.
In the end, this measure,
strongly backed by two Presidents in a Democratic AdainietratioD,
became law wi th a substantial measure of bipartisan 8upport,
with majorities exceeding two to one in both House. on both
sides of the aisle.
Moreover, it i . difficult to recall an
instance in the natio.l'S peacetime hi8tory when its political
brains and leadership from all sectors of the private
commun1~'
business, labor, financial -- have been in 8uch general accord
(hl
.~
key economic policy as that which supported the enactileDt
of the tax bill.
TIlis support came to the bill fro. diverse .ectors and
'JJ..l
ts 01 view
0,1
ma·t1Y d~fiering
rationales and moti vatio~.
- 11 In the lIlinds of both proponents and oPpoDentil of the
legislation something very flignificallt that call be truly
termed "n. turning point in tax policy" baa occurred.
WIlile
it is tempting to 8i t back and siaply watch bow 1 t worD out,
there 18 an obligation, now the debate is over, to Alla11"
the a.aning of this contemporary decision.
This 18 eo, not
only because of the current importance and aagni tude of the
action UDdertaken, but alao because of the rather overwbeuuD,
national consensus 1 t Signifies and its porteat. tor the
future, particularly if it. results prove beneficial to tbe
national economy.
Past failures to do anything about the general cOIIPlaint
concerning the tax system shared by everyone bave been ezpWoy the stat....nt that "The existing tax .yst. . persists not
because we are a;;~.. eed 1 il support of
U.4U b
Ie to agree
011 how
it, but because we are
to change it."
ll.aally, this lo~a.m on national tax pollcy has been
.:l(:~ ••. ti.l._,t \.AI ~~,nioIial consensus haa c1eveloped.
TID
- 10 ~en.tor
Russell Long, second ranking a.aber of the Senate
Finance Commi ttee and floor lIUUl&ger for tbe tall: bill in the
~enate,
s\wmmrizea his reaction in these teraa:
"Perhaps the moet unique aspect of the bill 18
thnt it reinforces our private enterprise syat•••
By reducinr~
the level
of
individual and corporate
taxatioil wo are giving the free enterprise a.g88Dt
of our society an opportunity to take up tbe slack
which many of us believe has arisen in our econo.y
because our tax system has in large part up to this
time sti 11 beetl gea.ced ft..>r a wartime, rather than
i>eac~timef
the
~conomy.
By this action
p~lvate euter~rise
.e are giving
sector of our economy tbe
opportuni ty to provide the f;rowth we need in tbe
years ahead to improve our competitive situation
lloroad, to offset at least in part tile increasinG
\JI'\cn:;>loyueut that 'We face, and to pl'OYlde for a better
- 9 ti~e
new law's _a4ing.
"Let
lie
i~plications
LaJlt week be _aid:
take this opportua1 ty to ,.tate tbe
of the Revenue Act of 1964 for the
fiscal pollcy of the United Stat...
As I said
last September. this legislation meet. the requlreaaents of fiscal respoll8ibility.
It 1_ part
of an overall program to conduct tbe flnancee of
the !'ed.ral Govel'waent in such a way that a
bud~;et
balanced
can be achieved in an econoay
which is growing rapidly, providing adequate
e.ployment and illvestment opportun1 ties, aaking
full use of its capi tal and human resources, and
giving the fullest possible play to the initiative
8.J1d venturesomeness of the private sector of the
economy •.
>
- 8 -
t\)
.;.ive ,lew 1JQpetus to
private tran&actioUli.
Cuufirmlag what the late ~resideat Kennedy e~aaized
<.!L
r;;commenuillg tile tax ,program a. yeu earl!er, Pr.sident
JOhIlR-.)1l
s.u,<1:
'\Ie cou!d uav(;; ctlosea to sti.ulate th4J
ecou.o",y through a higb level of
spenciiag.
\fe doubte<.i the '\Vl.so.om of follo.itl~
tuat course.
'lOo.
11lstead,
at the same
tl~
''ilQ
la.:,_:i..il~
1 .• 1 i,..1
~t
;'1.110 the.£.·
cl10se tax reu\&Cti.oll,
we made consc1entioua and
e:.u·nest at te14p ts to reduce
. .)u'tti.llg
t~OV.l·1lIIeI1t
gov~rWleJlt
expend! ture&. "
way, i':l'esicient Johason noted that "By
tius course we U<lve made tll1s bill an expression of
iu our sytstem of free enterprise."
- 7 -
a revenue or subsistence for th_elvn; and,
secondly, to supply tbe state or co..onwealth
with a revenue sufficient for the publie Wlage.
It proposes to enrich both the people aDd the
soverel~l1.
I~ a
very real sense the new tax policy -.bodied in the
tliI'oe measures represents just that -- a bold effort to adapt
.u. tional fiscal policy to enable the people of the United Stat.
to p.I:ovide a plentiful revenue for themselves by extracting
.La
uod1fled. patterns of taxing a revenue sufficient for
t.:.e public use, thereoy enriching both the 8C01lOIIy aDd the
pU01ic treasury.
President Joh.18oU referred to the new tax policy as
t,
~
;:
bold .J.pproach to the problems of the American econollY.
~.l.S
a bold ap!>roach.
Rut it was not a new or no"el
It
0".
It Vt'.LS tn au a.llcient and ilOnorable tradi tiOD that finda ~y
- 6 ye.sterdJly tb.at have become tile loopbol_ a.ru1 special
:f'or my part, I ahall try to appra1 ••
preferences of today.
t H~ l>a.rtlcul~1i
in tVh1.ch this ne. body of policy __a
01 the COllStl. tut:LI.)IJ.,
t.o . ~).i.·(lIiJ..ue 10:1.: tile COIlU8OU
to
defense and
,(;I:,(:ral weU,aIo 01 the Un! teo ;jtates. H
l'ouight, let us
p~t
to oue side for the
~nt
our special
interests ancl speciaii2.ed axpertise and borrow a YaAta"e polot
11.'01&
a. siapler era when the all-embracing phrase "poll tical
ecouoay" was in current use.
~atlous"
AQ.a.m
Smi th in b..1. tWealth of
obaerve" tha.t;
"J>olit.:1.cal economy, cO.alSiderQQ as a branch
of tae science 01 a statesman or legislator, proposes two distinct objects: iirst, to provide a
v1eutl1ul revenue or
subs~ste4Ce for the people,
'"".I. ";.;)re ~,j,'operl/ to enable tllea to pravia au.::b
- 5 It seems
referrecl to
J.';}
~referable
to speak of all three tax . .aaure8
ther than view the recently enacted tax bi 11
.L Il 1 sol!! tio!l fr:')m tile Revenue ,\ct of 1962 and the IIIOdificatiOD
~)y
the Treasul-Y Departmcat ia that same year of the tax:
tI'eatmeot of deprecLl.tiou.
l
new l)Qdy' of tax p,llicy.
~~xpei&Ji
The three are a package reflectiDi
Together wi th related budgetary and
ture policy for fiscal 1964 and 1965 they represent
aD
i.lltc5rated exercise of positive fiscal policy.
~atur;lllV,
the tax bill and the related measures Man
di fferellt tIlt 1l1!.S to different people, depending upon their
backgroun.d and special sphere of interest.
It is for the tax
lawyers ;lnd technlci;lns t<.; a.aalyze tho bone and sinew of th...
:nc'\S',t·l'"es ;:us they apply in day to day transactions.
It i8 fM
the structur.ll tax reformers, the press, law faculties and,
2V~\\,
the Treasury Department, to uuderscore the defects that
lnd tb.ere arc many -- in the
relief provisions of
- 4 -
fiegardless of one's feeliAiB about the WrODKDe. . or
rightness of the new directioas taken, all aU8t aa.1t that
national tax policy has becoae since 1960 one of the liveli •• t
topicS of public interest and policy determination.
If full
and intelligent discussion of critical political deci.iona i.
a measure of the strength and vitality of the democratic
process, the millions of words in debate and cOlllDentary
these tax measures are a net gain for us all.
011
If translation 01
ideas from the drawing board of the scholar or the panel
discussions of botb the experts and practical men of affairs
into the concrete reality of positive governmental action il
a measure of the effect! vell.as of
;t,
dyna.mic po11 tical .yst••
the break-through in the past three years of the logjam
nat~onal
OD
tax policy should be reassuring.
In lignt of that break-through, it is worthwhile to II&kt
at least
:J.
preliminuy appraisal of
the.~ax
policy actiODB aDd
- 3 -
tax reform in the "econoaic" . . . . . , 1 t adda to tile battery
of instruments of monetary, cred1 t, and buclset aad expeacl1 tve
policy the recognition of yet another powerful KOYera.eatal
tool to be exercised for our econollic welfare aad oation.l
strength.
As an active participant during the laat tlar. . yean in
the process of formulating and tranalating varioU8 propo••la
into the reality of law and decision, I muat, naturally, ple.d
guil ty to any charge of being biased in favor of t h _ thr..
lIleasures in their related context.
Like every other ob!lerv.,.
or pArticipant, if I had my own way there aay be so. . f . .t~
I might have fashioned somewhat differently.
But regarded DOt
as the last word but as an important first step they coaati tut.
an affirmative effort to attune tax and fiscal policy to the
requirement. of a functioning econollY in a private enterpl'1"
syst•••
- 2 \\hat has Il...t.ppeneu .lS that in the crucible of inten••
aatioLlal deoate tax
~l(i
I.lscal policy have finally been
.1.ccorued a posi ti ve role .In o la' poli tical and economic
system -- particulal:ly to nurture a dynamiC, productive
priva.te
eL1t~rpl'ise
sectol>.
A new meaning and reality, and
a pl'omising :f:i;ame of reference,
~ecl~ratioil 01
ha.ve been gi veIl to the
policy iu the Employment Act of 1946.
That
policy, it may be z'eca,11ed, directed that the Feueral Govel'lUIIllt,
iU
promoting Ulaxiillilm employmellt;prOQuction..:-and purchasing power, '
shall coorainate its pIa-as, fun.ctious and resources for
cl'eatillb aJ.ld m.ulltaLling these
COLleii tions
"ill a manner calculatt4
to tostel' ana prowo-te free competi ti ve enterprise and the
~erle~'al
welfare."
The Hevenae Act of J.Vli4 aua l'elated tax measures in 1963
l"etlected a uatl.ollal will to mount an effective program of tal
a.na flscdl ~ctl()ll .espoasJ. ve to tilis policy.
That pl'ogram
~ •.r;M/;J.K;) ~)l'
T'l}: ~i0 'ilJi~ ABLE HENRY H. FOWLER,
UNlJFl. SECt.['TA. . :.. OF' THE TREASURY, AT THE
FOUL~TEiHTH AlitfUl\L JUDYE.<Ul CO.NFERJ;NCE OJ'
THE T.U EXECUTIVES INSTITUTE, MAYFLOWER
HOTEL, W.-\SHINGTON, D.C., MOi'lDAY, MARCH 2,
1964, 7:30 P.II., EST
A TURNING POINT IN TAX POLICY
Tile aew currents that have emerged in the last two year.
'i1,"",,l'k.
,1 tll'niub poiat in iu,tioual tax policy.
.L.i.Ve addeCi a :lew and meaui ngful
;}olicy.
Indeed, they
dimension to national acono.le
In any event, the tax policy embodied in the Revenu.
Act of 1962, the administrative liberalization ot depreciation
i'l tile same
Id.~t
year, and tne Revenue Act of 1964 which
beCalM
law
;\leek, ia the fiuallcial and economic context to which th.y
ax'e .celatec:, l'epresents a sigllificant milestone in American
;uli tic.ll :louci ecollomictlistory.
I a signing the Revenue .Act of
::'~ib"'l Pl~es:tlient Joinsoll reflected the view held by many,
.i.;1cltlcli:l;', h.i.s pj,'etiecessol',
.......
h-l-~
.......... \....
ft"
.1.<:':
0#-
~He
;_0. ~il~
1
the late President Kennedy, that tbt
e rJOst .:!.:nportllut step we have taken to
TREASURY DEPARTMENT
FOR RELEASE: A.M. NEWSPAPERS
TUESDAY, MARCH 3, 1964
REMARKS OF THE HONORABLE HENRY H. FOWLER,
UNDER SECRETARY OF THE TREASURY, AT THE
FOURTEENTH ANNUAL MIDYEAR CONFERENCE OF
THE TAX EXECUTIVES INSTITUTE, MAYFLOWER
HOTEL, WASHINGTON, D. C., MONDAY,
MARCH 2, 1964, 7:30 P. M., EST
A TURNING POINT IN TAX POLICY
The new currents that have emerged in the last two years
nark a turning point in national tax policy.
Indeed, they have
added a new and meaningful dimension to national economic policy.
In any event, the tax policy embodied in the Revenue Act of 1962,
the administrative liberalization of depreciation in the same year,
and the Revenue Act of 1964 which became law last week, in the
iinancial and economic context to which they are related, represents
a significant milestone in American political and economic history.
In signing the Revenue Act of 1964 President Johnson reflected the
view held by many, including his predecessor, the late President
{ennedy, that the tax bill "is the single most important step we
1ave taken to strengthen our economy since World War II."
What has happened is that in the crucible of intense national
jebate tax and fiscal policy have finally been accorded a positive
role in our political and economic ~ystem -- particularly to
rurture a dynamic, productive private enterprise sector. A new
neaning and reality, and a promising frame of reference, have been
~iven to the declaration of policy in the Employment Act of 1946.
rhat policy, it may be recalled, directed that the Federal Government,
Ln promoting maximum employment ,production ,and purchasing power,
3hall coordinate its plans, functions and resources for creating and
'naintaining these conditions "in a manner calculated to foster and
)romote free competitive enterprise and the general welfare."
The Revenue Act of 1964 and related tax measures in 1962
eflected a national will to mount an effective program of tax and
iscal action responsive to this policy. That program truly
epresents a turning point in national tax policy; it is tax reform
_n the "economic" sense:
it adds to the battery of instruments of
lonetary, credit, and budget and expenditure policy the recognition
)f yet another powerful governmental tool to be exercised for our
!conomic welfare and national strength.
1-1154
- 2 As an active participant during the last three years in the
process of formulating and translating various proposals into the
reality of law and decision, I must, naturally, plead guilty to
any charge of being biased in favor of these three measures in
their related context. Like every other observer or participant,
if I had my own way there may be some features I might have
fashioned somewhat differently. But regarded not as the last word
but as an important first step they constitute an affirmative
effort to attune tax and fiscal policy to the requirements of a
functioning economy in a private enterprise system.
Regardless of one's feelings about the wrongness or rightness
of the new directions taken, all must admit that national tax
policy has become since 1960 one of the liveliest topics of public
interest and policy determination. If full and intelligent
discussion of critical political decisions is a measure of the
strength and vitality of the democratic process, the millions of
words in debate and commentary on these tax measures are a net gain
for us all. If translation of ideas from the drawing board of the
scholar or the panel discussions of both the experts and practical
men of affairs into the concrete reality of positive governmental
action is a measure of the effectiveness of a dynamic political
system, the break-through in the past three years of the logjam on
national tax policy should be reassuring.
In light of that break-through, it is worthwhile to make at
least a preliminary appraisal of these tax policy actions and their
significance.
It seems preferable to speak of all three tax measures
referred to rather than view the recently enacted tax bill in
isolation from the Revenue Act of 1962 and the modification by the
Treasury Department in that same year of the tax treatment of
depreciation. The three are a package reflecting a new body of
tax policy. Together with related budgetary and expenditure policy
for fiscal 1964 and 1965 they represent an integrated exercise of
positive fiscal policy.
Naturally, the tax bill and the related measures mean
different things to different people, depending upon their background and special sphere of interest. It is for the tax lawyers
3nd technicians to analyze the bone and sinew of these measures
3S they apply in day to day transactions. It is for the structural
tax reformers, the press, law faculties and, even, the Treasury
)epartment, to underscore the defects that remain -- and there are
nany -- in the relief provisions of yesterday that have become the
Loopholes and special preferences of today. For my part, I
3hall try to appraise the particulars in which this new body of
- 3 policy seeks to employ our knowledge of tax and fiscal policy, in
the words of the Cons ti tu tion, to "provide for the common de fense
and general welfare of the United States."
I.
~New
Venture With An Ancient Tradition.
Tonight, let us put to one side for the moment our special
interests and specialized expertise and borrow a vantage point
from a simpler era when the all-embracing phrase "political
economy" was in current use.
Adam Smith in his "Wealth of Nations"
observed that:
~'Pol i
tical ec onomy, cons ide red as a branch
of the science of a statesman or legislator,
proposes two distinct objects:
first, to provide
a plentiful revenue or subsistence for the people,
or more properly to enable them to provide such
a revenue or subsistence for themselves; and,
secondly, to supply the state or commonwealth with
a revenue sufficient for the public usage.
It
proposes to enrich both the people and the sovereign."
In a very real sense the new tax policy embodied in the three
measures represents just that -- a bold effort to adapt national
fiscal policy to enable the people of the United States to provide
a plentiful revenue for themselves by extracting in modified
patterns of taxing a revenue sufficient for the public use, thereby
enriching both the economy and the public treasury.
President Johnson referred to the new tax policy as riA bold
approach to the problems of the American economy."
It was a bold
approach.
But it was not a new or novel one.
It was in an
ancient and honorable tradition that finds many echoes in the
history of other peoples -- instances in which the government, by
modifying a repressive tax system, sought to give new impetus to
private transactions.
Confirming what the late President Kennedy emphasized in
the tax program a year earlier, President Johnson said:
recom~ending
"We could have chosen to stimulate the
economy through a high level of government
spending. We doubted the wisdom of folloNing
that course.
Instead, we chose tax reductions,
and at the same time we made conscientious and
earnest attempts to reduce government expenditures."
Putting it another way, President Johnson noted that "By taking
this course we have made this bill an expression of faith in our
.
"
system of free enterpr~se.
- 4 For Congressman Wilbur Mills, the Chairman of the House Ways
and Means Committee, there was a similar assessment of the new
law's meaning. Last week he said:
"Let me take this opportunity to restate the
implications of the Revenue Act of 1964 for the
fiscal policy of the United States. As I said
last September, this legislation meets the
requirements of fiscal responsibility.
It is part
of an overall program to conduct the finances of
the Federal Government in such a way that a
balanced budget can be achieved in an econo~y
which is growing rapidly, providing adequate
employment and investment opportunities, making
full use of its capital and human resources, and
giving the fullest possible play to the initiative
and venturesomeness of the private sector of the
economy."
Senator Russell Long, second ranking member of the Senate
Finance Committee and floor manager for the tax bill in the Senate,
summarized his reaction in these terms:
"Perhaps the most unique aspect of the bill is
that it reinforces our private enterprise system.
By reducing the level of individual and corporate
taxation we are giving the free enterprise segment
of our society an opportunity to take up the slack
which many of us believe has arisen in our economy
because our tax system has in large part up to this
time still been geared for a wartime, rather than
peacetime, economy.
By this action we are giving
the private enterprise sector of our economy the
opportunity to provide the growth we need in the
years ahead to improve our competitive situation
abroad, to offset at least in part the increasing
unemployment that we face, and to provide for a
better and more prosperous America for all of us."
In the minds of both proponents and opponents of the
legislation something very significant that can be truly termed
"a turning point in tax policy" has occurred. While it is
tempting to sit back and simply watch how it works out, there
is an obligation, now the debate is over, to analyze the meaning
of this contemporary decision.
This is so, not only because of
the current importance and magnitude of the action undertaken, but
also because of the rather overwhelming national consensus it
signifies and its portents for the future, particularly if its
results prove beneficial to the national economy_
- 5 Past failures to do anything about the general complaint
concerning the tax system shared by everyone have been explained
by the statement that "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."
Finally, this logjam on national tax policy has been broken.
A meaningful national consensus has developed. Two new massive
revenue acts have become law in eighteen months, embodying a
reasonably cohesive and consistent approach. The proposed
Revenue Act of 1964 was voted last week on successive days in the
House and Senate by majorities approaching four to one following
intensive debate in voluminous detail during the preceding
thirteen months.
In the end, this measure, strongly backed by
two Presidents in a Democratic Administration, became law with a
substantial measure of bipartisan support, with majorities
exceeding two to one in both Houses on both sides of the aisle.
Moreover, it is difficult to recall an instance in the nation's
peacetime history when its political brains and leadership from
all sectors of the private community -- business, labor, financial
have been in such general accord on a key economic policy as that
which supported the enactment of the tax bill.
This support came to the bill from diverse sectors and
points of view on many differing rationales and motivations.
It is also remarkable that the diminishing opposition became
increasingly divided in its point of view, with part of it finding
little comfort in the status quo, and another part, fearful of
change, united only in skepticism that the majority had chosen the
means most appropriate to worthy objectives.
Moreover, the national decision embodied in all three of
these tax policy determinations -- the Act of 1962, the
administrative liberalization of depreciation, and the Act of
1964 -- has very long-term implications. These were not "quickie"
tax measures taken on the spur of the moment to meet a temporary
or passing situation.
They represented action responsive to a
long felt need, long overdue -- truly a turning point in national
economic policy -- considered and perm~nent in nature.
Nor are these long-term implications limited merely to
the results of the action taken. This may be no mere pause in
a movement to be resumed in the previously held direction.
It
may well be a turning point at a crossroads.
Chairman Wilbur Mills
of the House Ways and Means Committee, a principal architect of
the bill, said last week before its final passage:
- 6 "As a result of the Revenue Act of 1964 we
will have a Federal income tax much more in tune
with our times. But times change. We should all
of us be alert to such changes and be prepared to
make further tax adjustments, if these should be
necessary and desirable, in the interest of a
healthy growing economy and sound management of
the Government's finances. Indeed, preserving the
gains for the economy and for Federal finances,
which we can confidently expect from this bill,
may both permit and require additional tax
reductions in the not too distant future.
"Whether or not we will realize the opportunities
for further tax reduction will depend in great part
on how well Government expenditures are controlled."
In the wake of passage a generally agreed sentiment would
have it that income tax rates have been too high for healthy
economic growth and that the door should be left open for further
cuts later if this one works the way we expect it will.
Leaving to the future the question of how far and how fast
we travel down the particular route chosen, the support of this
new tax policy expresses a deep sense of national purpose -- a
determination to move the country forward to greater economic
strength, vitality, growth and effectiveness. It reflects a
desire to do away promptly with idle manpower and unused or
obsolete capacities, inadequate demand and investment, a succession
of substantial budgetary deficits, and imbalances in our
international payments.
Why and under what circumstances did this deep sense of
national purpose emerge and why did it fasten upon tax policy?
Only through examining the perspectives of our contemporary
economic problems and the tax policy setting of the last few decades
can we arrive at understanding.
II.
Economic Perspectives -- 1957-1962.
The euphoria of a record-breaking 1963 in gross national
product, industrial production, employment, profits before and
after taxes, and countless other indices summarized in the
Economic Report of the President transmitted in January and
confirmed by the current Economic Indicators for February have
not caused the national desire for the recently enacted tax bill
- 7 to abate one whit.
There was no serious suggestion that the
investment tax credit -- the centerpiece of the Revenue Act
of 1962 -- be repealed.
The principal legislative concern was
how it could be improved by the elimination of a provision in the
earlier Act th~ deprived it of nearly one-half of its contemplated
effectiveness by requiring that newly acquired assets be depreciated
from a level of 93 percent rather than 100 percent.
There was no
suggestion that administrative liberalization of depreciation,
announced in July 1962, be reversed; there was only some expressed
desire that the liberality of that administrative action be confirmed
by legislative enactment.
Even some of the major opponents of tax reduction last
spring had second thoughts.
In a speech last October,
Dr. Raymond J. Saulnier, former Chairman of President Eisenhower's
Council of Economic Advisers. noting his serious reservations of
some while back, put the situation in realistic terms:
"As things stand now the prospect of tax
reduction has been so thoroughly built into the
expectations and planning and to some extent also
into the financial commitments of individuals and
businesses that it would be seriously deflationary
to call if off."
What this all adds up to is that 1963 witnessed an active
response in the economic community to a new financial environment
of which the new directions in tax and fiscal policy were an
important and significant component. No one can tell how much
of the 1963 advance can be attributable to the tax policies put
into effect in 1962 and anticipated for early 1964.
It is
sufficient to note that the economic policy mix of which tax and
related expenditure policy was the keystone provided an
environment that has combined in this expansion to provide a
higher rate of economic growth, greater price stability, and a
greater increase in employment than in any previous nonwartime
expansion.
The fact that there was an overwhelming refusal to return
to the tax policy outlook that preceded the recent initiatives
should give some pause to those who will describe with penetrating
hindsight why and how it should have been done differently.
The eradication of long existing flaws in the field of
equity and simplification -- and there are many -- that remain
in the Federal income tax system had to give way to a priority
- 8 for and major emphasis on the overall national economic aspects
of tax policy. This was determined by the President, the Treasury
and the Congress because of disturbing developments in our
national economy since 1956 which cried out for first consideration.
The innate strength of the United States in the last half of
the Fifties was marred by 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 appreriable periods. Even more disturbing than a
tendency to ever more frequent recessions was the fact that
periods of expansion of the U. S. economy were marred by higher
peaks of unemployment, lagging growth rates, budget deficits,
and continued unfavorable imbalances in our international payments.
What are some of the specific elements in the economic background
that led to the new tax policy initiatives?
Take the matter of unemployment. With an average rate of unemployment of six percent from 1958 through 1960, a sustained recovery
that by now has stretched almost over a three-year period, still finds
our rate of unemployment stuck firmly at the intolerable level of five
and one-half percent.
In fact, not more than once in seventy-six
consecutive months has unemployment dropped below the five percent
level.
This unemployment looms as an increasing threat.
True, our
economy is producing more than one million new jobs a year.
But that
is not enough. We need five million additional jobs in the next few
years to meet the rapidly expanding youth force that is pouring into
the labor market in increasing numbers,to provide opportunities for
those idled by technological advances,and to reduce the unemployment
of some four million people in our country today ready, willing and
able to work -- who cannot find jobs.
While our national growth rate in 1963 has been at a level of
3.8 percent in constant dollars, we cannot forget that from early 1955
through 1962 it average 2.8 percent, comparing 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 have been
in excess of $2 billion a year -- a considerable improvement over the
$3-1/2 to $4 billion annual deficits that characterized the years
1958-60, but still a serious problem, and one we are moving firmly
to solve.
There have been deficits in the Federal administrative
budget in five of the last six years, totaling $31.7 billion.
- 9 -
Much of the total was due to a $12.4 billion deficit in 1959, resulting
from an unanticipated recession.
In 1956 and 1957 business fixed investment averaged nearly eleven
percent of total output. Thereafter it receded to roughly nine percent.
The rate of increase in our stock of business plant and equipment
substantially diminished after 1957, falling to less than two percent
a year, compared to four percent a year in the 1954-57 period. There
was also a disturbing rise in the proportion of our machinery and
equipm.?nt which is more than ten years old in the latter part of the
decade. A survey of the age of machine tools in the U. S., by the
Am?rican Machinist Magazine, showed sixty-four percent to be at least
ten years old.
Similar estimates show much lower percentages of
equipment over ten years old in France, Italy, Germany, the United
Kingdom and the U.S.S.R.
Between 1955 and 1960 there was a sharp decline in t he 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 wi tnessed such a disturbing under-'ltilization
of productive resources in the United States as the period preceding
the new tax policy initiatives of 1962-63. 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.
To meet this accumulation of economic woes, the choice of tax
policy as the key weapon follows logically from an analysis of the
political and economic limitations on alternative options.
Growth itself might have been achieved by a massive increase in
Federal spending well beyond the necessities of mounting defense and
space costs.
But the President decid2d against that course because of
the political preference to which he and the nation firmly hold.
To
depend upon massive increases in government expenditures as the primary
reliance for a higher level of econ8mic activity is to consciously
expand the role of government in m3king a~d carrying out economic
decisions.
In that situation, a~ ever larger proportion of the nation's
labor and money would be used directly by the government. The
government's activities as a buyer, lender or donor would determine in
larger and larger part the use of labor and capital even in the
private sector of the economy.
In his Tax Message of January a year ago, the late President
Kennedy made his clear and unequivocal choice, saying, "In today's
circu~stances it is desirable to seek expansion through our free
market processes -- to place increased spending power in the hands
of private consumers and investors and offer more encouragement to
- 10 private initiative. The most effective policy, therefore, is to
expand demand and unleash incentives through a program of tax reduction
and re~orm, c~upled with the most prudent public policy of public
expenditures. '
Economic analysis supports this political preference in today's
when inadequate investment in the private sector is
a major reason for lagging growth, stubborn unemployment and balance
of payments difficulties. From 1957 to 1962, in real terms, Federal
purchases of goods and services rose more than 13 percent, total
national output went up more than 16 percent, consumer expenditures
went up more than 17 percent, State and local government ex~enditures
went up 28 percent, but plant and equipment spending declined by more
than one percent. Secretary of Labor Wirtz recently estimated that
increases in jobs, leaving out those on farms, totaled 4.3 million
from 1957 through 1962. Of these, 2 million occurred in the gover0ment
sector -- almost all State and local; 800,000 were due to government
procurement programs; 700,000 were found in nonprofit institutions;
600,000 were part-time jobs, leaving that part of the private sector not
dJing gov2rnment work with a net job creation of 200,000 in the six-year
span.
circu~stances
Given the political and economic reasons for directing national
policy initiatives to the private sector of the economy, there was
another alternative to tax policy -- the increased use of credit and
mon2tary tools in an attempt to provide still lower interest rates and
substantially increased supplies of money and credit. But, as the late
President Kennedy pointed out in his address to the Economic Club of
N,~w York in December 1962, "Our balance of payments situation today
places limits on our use of those tools for expansion."
For the first time stubborn balance of payments d2ficits pointed
to,vard restrictive policies -- at least boosting short-term interest
rates or imposing penalty taxes on foreign portfolio investment to
keep U. S. funds from flowing abroad. The combination of full
convertibility of currencies in the Wester0 world beginning in 1959
and external deficits limited our optio~ to those of an ope~ economy
in contrast to a pre-1957 situation in which we could larg2ly act as
if we were in a closed economy. In addition to limiting a reliance
upon monetary and credit policy as a m2ans for expansion and growth,
the balance of payments situation led to increasing emphasis on
stepping up private investm2nt at hone -- both as a means of increasing
productivity and low2ring costs so as to attain a stronger position in
markets at home and abroad and as a means of attracting investment
dollars to stay home or flow to the United States.
- 11 -
Here again two factors stood in the way and both pointed toward
tax policy as an answer.
Idle and obsolete capacity has for some years
held back a floodtide of investment in modernization and expansion
that the nation has long needed. Well over ten percent of our overall
industrial capacity has remained idle during much of the time since
1957 because of lack of demand despite a substantial improvement in
rate of utilization early in the current expansion. Moreover, corporate
profits after taxes, even after the early expansion of 1961, remain below
former levels as a percent of investment capital, of sales, or of the
corporate portion of gross national product.
All of these factors combin~d to encourage a search for ways and
means of making tax policy serve economic needs -- both do~estic and
international.
The alternatives seemed either to be to drift into a way of life
at horne contrary to our traditional preferences or a withdrawal from
our responsibilities abroad for sharing in Free World security and
development. We were neither content to assign to government our
primary reliance for a higher level of economic activity nor to admit
that our economic prospects no longer could attract investment fro~
capital sources at home and abroad or that our efficiency would no
longer enable us to achieve equilibrium in our balance of international
payments.
III. Tax Policy Perspectives (1939-1962).
There were other reasons for a decision to utilize tax policy to
meet these economic problems that emerged in the late Fifties and
carried over into the early Sixties. The income tax system had not
been fundamentally changed since 1954 and, indeed, represented largely
a carryover of war-time rate scales imposed to restrain demand and
equalize sacrifice and, in no sense, designed to maximize economic
growth in the private sector unrelated to government procurement -quite the contrary.
Yet, the levels and magnitude of Federal income
taxation were of such a character as to inevitably playa major role
in the functioning of the private economy. They had been necessitated
by World War II and maintained to avert postwar inflation until the
Korean War required their reaffirmation.
They were carried over into
the continuing cold war and maintained at a high level despite the
changing character of aggregate demand from excessive to in~dequate,
the weakening of private initiative reflected in the diminishing
scale of business fixed investment, and the ever tightening constriction
of the high rates on consumption as advancing income levels pushed an
increasing percentage of the population into ever higher tax rates
on marginal income.
- 12 It was as though the nation had dismantled all of the machinery
established to live with the excessive demands and drives of war -such as price and wage control, allocation of scarce materials,
rationing and regulation of consumer credit -- and forgotten to do
anything about tax rates imposed for the same reason.
World War II made th~ income tax into a mass tax. Until 1939,
after a quarter century of the existence of the income tax, there were
only four million returns filed -- four percent of the population
(14 years and over) -- with rates scaling from four percent on tax~ble
income below $4,000 to 79 percent on income in ~xcess of $5 million.
But with the war the income tax became a vital fiscal weapon.
In
the words of Professors Surrey and Warren:
"Almost overnight it changed its morning coat for overalls.
Its membership spread from the country club district down to
the railroad tracks, then over to the other side of the
railroad tracks."
Forty-five million individuals were filing taxable returns by
1945 with the initial rate at 23 percent. At the same time the top
corporation rate rOSe to 40 percent with an excess profits tax added.
Instead of revenue from these two sources of approximately $2.2
billion in 1939 the indLvidual income tax and the corporate income tax
yielded $27.5 billion in 1948.
In the postwar period individual tax
rates declined from a 23-to-94 percent scale to a l6.6-to-82.l percent
scale, and corporation rates were fixed at 38 percent. Also, married
couples were permitted to cOl1pute their tax on a split income joint
return method which resulted in their :otal tax being equal to twice
the tax on one-half of their combined income.
Exemptions were
increased to $60).
But the Korean War brought a reversal, pushing the individual
rates back up to 22.2-to-92 percent individual scale and a 52 percent
corporate scale on corporate incomes over $25,000.
Even the passing of the Korean Har and the Internal Revenue Code
of 1954 brought little change in rate scales. Th~ first bracket rate
for individuals on the first $2,000 became 20 percent with the top
bracket being 91 p2rcent.
The corporate rates -- a 3) percent normal
tax and a 22 percent surtax on income over $25,000 making a combined
rate of 52 percent on th~ latter income -- were continued on a year
to year basis.
HONever, th~ tax actions taken in 1954 did recognize that the
reduction of tax barriers to lo~g-term growth was an appropriate
~conomic objective of tax reform.
In addition to permitting the
~~iration of the excess profits tax, minor individual rate reduction,
lOme reduction in excise taxes and many technical changes, the law
~ecognized the need for tax incentives to invest in plant and equipment.
- 13 This recognition took the form of a provision allowing a more rapid
write-off of depreciable assets in the earlier years. Also the 1954
Act permitted current deductions for research and development expenses
and permitted a dividend credit in the belief -- which experience
has proved questionable -- that it was necessary to assure needed
equity capital. Indeed, President Eisenhower in his first State of
the Union Message said: "We must d'2velop a system of taxation which
will impose the least possible obstacle to the dynamic growth of the
country. 11
In a so~ewhat prophetic commentary Dr. Dan Smith, then Special
Assistant to the Secretary of the Treasury, said in 195.5: "In turning
to reforms designed to reduce tax barriers to economic growth, one
preliminary comment may be appropriate. The question is sometimes
asked as to why any relief of this sort is needed when the eco~omic
system has grown as spectacularly as it has over the last fifteen years.
A little reflection brings out the obvious point that the growth of the
last fifteen years has been in an environment characterized by war,
threats of war, emergency defense progra~s, and inflation. All of
these artificial stimuli have served to foster and, in many instances,
to finance economic expansion. As one looks forward to normal growth,
the im~ortance of restoring normal incentives and removing punitive
tax provisions becomes clear.11
Indeed, a predecessor in my current offiCe and good friend,
Under Secretary of the Treasury Folsom, said in the fall of 1954, in
appraising the 1954 tax law: "In any case, in a growing and changing
economy, tax revision is necessarily a continuing task. We also look
forward to future tax reduction since we appreciate fully the
severity of our present tax burden and believe that its reduction is
essential to the continued prosperity of the country. However, we also
believe that additional tax cuts must wait upon further reductions in
Federal expendi tures. 11
They never came and neither did further tax reduction.
In 1955 a Subcommittee on Tax Policy of the Joint Economic
Commi ttee, chai red by Congressman Ih Ibur Mi 11s, conducted an examination of 'IFederal Tax Policy for Economic Growth and Stability.11
Notwithstanding the valuable stockpile of proposals on a national
tax policy for growth, the years from 1954 to 1961 saw no tax policy
changes of substantial economic significance.
- 14 We continued to retain a high rate income tax on the economy of
the country, regardless of its impact on the initiative of individuals,
on the investm2nt of capital, and the consuming power and habits of
the general public.
However, the concurrence of economic problems that emerged in
clearer view in the latter part of the last decade was bound to bring
increasing attention to tax policy as one of the aVenues to the
achievement of generally agreed national economic goals.
For example, both candidates for the presidency in 1960 in their
speech references to tax reform stressed the need for changes that would
stimulate economic growth, with President Kennedy giving repeated and
especial emphasis to tax revision that would encourage plant
modernization and expansion.
The Report of President Eisenhower's Commission on National
Goals, released in late 1960, stressed tax policy as a high road to
the achievement of economic growth "at the maximum rate consistent
with primary dependence upon free enterprise and the avoidance of
marked inflation." The Commission urged that "Public policies,
particularly an overhauling of the tax syste~, including depreciation
allowances, should seek to improve the climate for new investment
and the balancing of investment with consumption."
And, as many of you in the room will recall, despite the lack of
broad public and popular attention to the subject, the yeast for tax
policy changes was working among the scholars, practitioners and
private organizations closest to the subject.
- 15 In 1959 a major study of the income tax was conducted by the
House Ways and Means Committee, under the Chairmanship of Congressman Wilbur Mills. Panel discussions and hearings on papers from
some 180 leading experts were held in late 1959 on "Ideas and
Suggestions Submitted to the Committee on Ways and Means on the
Broad Subject of Revision of the Federal Income Tax Structure."
In announcing the inquiry into opportunities for constructive reform
Chairman Mills stated that lithe immediate objective of income tax
reform is reduction in tax rates without sacrificing revenues
required for the responsible financing of government." He listed
first among the objectives of tax reform lIa tax climate more
favorable to economic growth", followed by "greater equity through
closer adherence to the principle that equal incomes should bear
equal tax liabilities; assurance that the degree of progression in
the distribution of tax burdens accords as closely as possible
with widely held standards of fairness; an overall tax system which
contributes significantly to maintaining stability in the general
price level and a stable and high rate of use of human and material
resources; a tax system which interferes as little as possible with
the operation of the free market mechanism in directing resources
into their most productive uses; and greater ease of compliance
and administration."
IV.
Changing Directions of Tax Policy
Against this background of contemporary economic perspectives
and the history of Federal income tax policy as it relates to our
economic well-being, let us summarize some particulars of changing
direction that make the Revenue Acts of 1962 and 1964 and the
administrative liberalization of depreciation a turning point in
tax policy.
(1) First and foremost, these measures evince a new national
determination to give tax and fiscal policy a positive role in our
political and economic system -- to affirmatively utilize tax and
fiscal policy in the words of the Employment Act of 1946 lIin a
manner calculated to foster and promote free competitive enterprise
and the general welfare."
The three measures have been primarily designed to contribute
to a substantial increase in the level of eco~omic a~tivity at the
initiative of the p~ivate sector -- both consumers and investors.
This increasing activity will utilize more fully our growing labor
force, our expanding technology, and our increasing quantities of
- 16 capital, in a market economy in which these uses will be determined
by private decisions of both consumers and investors. T~ese tax
measures will increase the profitability of business, the rewards
of labor in take-home pay, and the incentives for the investment
of both capital and human endeavor.
In coordination with other policies these tax measures will
greatly increase the prospects of combatting successfully
unacceptable levels of unemployment; they will aid in and reduce
the cost of public and private programs for reducing poverty,
eliminating depressed areas, and facilitating an adjustment by
m~nagement and labor to both the dynamics and disciplines of a
modern industrial society.
These three measures are also tailored to deal in many ways
with our external financial relationships, exemplified in our
balance of payments problem, and in association with a policy of
expenditure control, to bring the nation back to balanced budgets
or surpluses.
Of course, these three measures are not the end, but a
beginning, ?articularly if they prove reasonably successful in
the achievement of these objectives. T~ere will always be an
unfinished task of adapting our tax and fiscal policy to the changing
economic environment in a manner that will strengthen our economy
and maintain our preferred pattern of economic organization.
In <'1 SOel ptv where an increasingly large percentage (now about
27 percent) of annual income is drawn off by Federal, state and
local government -- a national tax policy to promote a dynamic private
sector is fundamental if the nation is to benefit from rapid growth
and hold its position in world affairs by remaining competitive with
other industrial economies.
T~e magnitude and the distribution of
the Federal tax burden, as well as the totals of Federal expenditures
and the national debt which condition its overall impact, from now
on will be a prim~ry objecL of puhlic attention.
To make an
intelligent use of tax and fiscal policies to help insure a
prosperous economy and adapt a tax system to the vigor of the economic
institutions which represent the American way of life will be the
objective of both political parties, the Federal executive and the
Congress, and leaders [r~@ all walks of life.
(2)
These measures are a positive attempt to use tax
reduction to combat economic slack and sluggishness and pave the w~y
- 17 to more rapid economic growth.
Studies show that, given the tax system and income tax rates
of 1954 through 1962, the American economy, working under conditions
of full employment, would provide a substantial budget surplus.
This revealed that the government's tax and fiscal policy, reflected
in the budget and tax rates, was exercising a restraining effect
upon demand and activity in the economy. The fact that the mixture
of tax rates and spending levels was actually restrictive, even
though the budget showed deficits, pointed to the existing tax
structure as a drag on the economy, slowing down growth and choking
off expansion short of the levels that would give full employment
and utilization of the nation's industrial capacity.
It also
pointed to tax reduction as a means of eliminating that drag and
stimulating the economy to a higher rate of activity as a means of
achieving balanced budgets in a full employment economy. Also tax
reduction could be used to stimulate the modernization of plant and
equipment that would provide increased productivity in addition to
a fuller utilization of resources. Also, the fact that the previous
years of slack had been marked by increased rates of Federal, state
and local public expenditures, and personal consumption expenditures,
but relatively static investment levels pointed to the choice of
tax reduction as a weapon to deal with a lagging economy.
As a result of the measures taken the overall weight of taxes
on the private sector is in the process of being considerably reduced.
The reductions under the recently enacted tax bill reduce individual
income tax liabilities by about 19 percent or $9.2 billion. The
changes in corporate tax rates under the bill, together with 1962
reductions under the investment credit, the liberalized modification
of the investment credit in the Act of 1964, and the revised
depreciation guidelines, also reduced corporate tax liabilities by
19 percent or $4.75 billion.
The combined effect of this reduction of approximately one-fifth
of income tax liabilities -- the largest in our tax history -- will
provide a marked economic stimulation to both consumption and investment.
Apart from, and in addition to the effect, beginning this month,
of an infusion of dollars and incentives into the private sector, these
measures have already provided an important psychological thrust, as
witnessed by the performance of the economy in 1963, particularly the
latter part. A healthy economic recovery and growth depends heavily
- 18 upon the confidence, initiative, incentive, optimism and industry
of the private citizen and the private business sector. That
tax reduction will be a tonic to reduce sluggishness and slack
has been and will continue to be demonstrated.
There is important substance in ~hairman Wilbur Mills'
recent assertion that "Preserving the gains for the economy and
for Federal finances which we can confidently expect from this bill
may both permit and require additional tax reductions in the not too
distant future."
(3) These three measures, particularly the Revenue Act
of 1964, add new, but little understood, dimensions to the
importance of coordinating tax policy with budget expenditure,
monetary and credit policy and debt management, particularly in
dealing with economic slack, deficits in our international balance
of payments, and incipient threats of inflation.
For example, by coordinating tax reduction with expenditure
control, it becomes fiscally responsible to reduce taxes as either
a long or short term economic stimulant in times of recession or
slack when there is likely to be a budget deficit, as well as
in times of budget balance or surplus. This willingness to
reduce taxes, despite the existence of a budget deficit, should
be sharply distinguished from the economic theory that the
purpose of the tax cut is to create a deliberate budget deficit
tJ obtain economic motive pOwer.
The tax cut was the objective
not the deficit.
All of us would have preferred to push a tax
program involving substantial tax reduction against a background
of budget balance or surplus. But we were willing to push tax
reduction despite a deficit because of its anticipated effect,
particularly when there was a policy of expenditure control
accompanying it that looked to budget balance or surplus when
the economy approached satisfactory employment levels.
Oft-~imes,
in the course of debate and controversy surrounding
the is.':,I,e of whe ther it was wise to reduce taxes in a period of
substantial budget deficit, yet substantially unused resources, the
importance of correlation between policies was overlooked.
It was
necessary to stress continually the coordination of policies. For
example, in describing the program early in February last year I stated
that it had "two main elements:
first, a substantial net reduction in
Federal taxes, through a meaningful lowering, in several stages of tax
rates . . . and; second, as the tax cut becomes fully effective and the
economy expands in response, the allocation of a substantial part of
the resulting revenue increases toward eliminating the transitional
deficit."
- 19 The action of President Johnson in presenting an administrative
budget for fiscal 1965, the period in which the Act will begin to
become fully effective, providing for expenditures slightly less than
the budget requested for fiscal 1964 or expenditurffiprojected for that
year, gave concrete reality to the importance of relating tax reduction
to expenditure policy.
But there are other important correlations between tax policy
and other elements of general economic policy. We have seen why
under current balance of payments conditions tax and
fiscal policies ought to be preferred to monetary policy
in providing fresh incentive and continuing stimulation.
But, given this stimulus from tax and fiscal policy, monetary policy
and debt management can be used with greater flexibility in avoiding
inflationary pressures or increased outflows of capital. While tax
policy struggles to overcome the slow growth that dulls investment
incentive, fosters inefficient work spreading, maintains high unit
costs and presses upon profit margins, thereby retaining capital
flows in the United States and sharpening our competitive abilities,
monetary and debt management policies can be used more effectively to
discourage outflows of short term capital and dampen tendencies to
inflation.
Just as we learned in World War II to correlate tax policy with
other instruments to meet the extraordinary demands of hot war, we
must constantly search for the policy mix that includes a tax policy
related to other instruments to meet the&er changing conditions that
will affect a free economy in the type of open world in which we live.
Th2 same c80rdination of tax policy with oth2r policies to co~bat
unemployment is necessary because many of the unemployed dJ not have
th3 right ski lls, are not in the right places, or otherwise lack access
to the jobs that are open.
The tax program now adopted, with the related policies of expenditure control, monetary and debt management, seeks to establish 3
financial environ~ent suitable for the Sixties so that we can take
full advantage of the gathering forces for economic progress both at
ho~e and abroad.
By a proper coordination of our new tax and fiscal
program, debt management, monetary policy and balance of payments
policy we can make this tax program a key to resolving the interlocking
goals of domestic growth anj external stability that are inseparable
fro~ one a710ther in the open competitive environmo2nt in which we and our
tradLng partners and friends in the Free World now live.
(4) These three measures give b0dy to a positive policy of reverSing
the hampering effects of the tax system on investment incentive~ and
materially strengthening those incentives to provide incre~sed Jobs,
increased productivity and competitive efficiency, and a v~gorous
~conomic growth.
- 20 The new investment incentives include:
the investment credit of
1962, together with the 1964 revision eliminating any reduction in
depreciation basis to reflect the credit, the 1962 revised depreciation
guidelines, the proposed reductio~ of overall corporate rates from
52 to 48 percent and the normal tax rate o~ the first $2) 000 of
corporate income frol') 30 to 22 percent, and the reduction' of individual
rates on unincol~orated businesses, and the unlimited carry-over of
capital losses for individuals at a rate of $1,000 a year. The cumulat~ve effect ~f these changes is to give a dramatic shift in emphasis
on 1nvestment 1n our tax system.
Th2se changes have greatly increased the after-tax profitability
on investment. They have shortened dramatically the period of risk or
pJyout on ne\,' investment. They have greatly increased internal
cash flmv, particularly for small husiness units where availability
of capital is an important limitation on the growth and development of
enterprise.
Each of these changes is important separately. For example, the
change in the administrative rules concerning depreciation does more
than reduce the guideline lives for machinery and equipment to conform
to U,)-to-date practice; it in,.-:orporates a new set of rules that permit
the businessman much greater freedom in fixing his preferred life
for machinery and equipment, provided only that his actual replacement
pattern conforms tl) his c:stinlClte in a reasonable period of time.
This nolie\' together ,vith the investment credit and Imvered rates
of business taxes will not only result in increased modernization
and stepped-up growth in existing product and service areas; they
sh~uld speed the tran~lation of product developm~nts fra~ the laboratory
to thp rr('("l-:'ti,,,, 'mel dLsr-rihution line in a'l ever faster cycle and
help to provide inviting outlc:ts for n~w technology, incentive, processes
and ventures wi.ich mean new jobs at home and new markets both here a'ld
abroad.
But it is the total or combined effect that should be decisive.
By increasing the profitahility and lessening the period of risk
of ne~ investment these measures adopt the most effective way to m3ke
more attractive the investment decisions which are not being taken
tOday. They make today's marginal investment the acceptable venture
of tomorrm'l. They 0lWll the door \vide for ne,v technologies and new
products and services which, if th2Y are developed with their new
markets, create n~w demlnd, aJditional investment and new jobs that
would n2ver helVe been nVilildble before.
(5)
Th'c'sc measures seek to effect ,1 balanced tax reductio~
one purpose ly des i gned to p rovi de both addi tiona 1 cuns umer purchas ing
~ower and direct investment incentives.
- 21 This balance served not only to satisfy the requirements of equity
in a direct distribution of benefits but also important economic
objectives.
It was felt that both approaches -- tax reduction to
stimulate both consumption and investment -- interacting together would
achieve a more dynamic and sustained growth than would result from a
reli0nce on one method to the exclusion of the other.
The recently enacted tax bill provides a substantial stimulus to
consumer purchasing power.
Of the reductions to individuals amaunting
to $9.2 billion, it is expected that eventually about $8.6 billion
will be spent on additional consumption.
The largest share of the
individual reductions will go to those with inco~es of $lO,OJO and less,
who n,~ed it most, who account for close to 85 percent of all taxable
returns and who are likely to put a large part of their tax reduction
into the spending stream. This is where the customers live.
Under
the recently enacted bill they received nearly 60 percent of the
overall individual reduction, with their share of the individual tax
load being decreased from 50 to 48 percent.
The co~sumer expenditures generated by the increases in take home
pay resulting from the tax cut to individuals will set in motion the
fa~iliar economic process in which money is spent and re-spent
throughout the economy and ultimately increases consumer spending by
several times the amount of the initial tax cut -- the so-called
nultiplier factor.
T~at strong and sustained rise in consumer demand
and thus in markets and profits for business -- will further bolster the
direct tax incentives to investment.
To encourage investment in job
producing facilities, stressing of consumer demand is required. The
purchasing power of the consumer must be increased to effectively
utilize present productive capacity so that additions to productive
capacity will be worthwhile or replacement of obsolete high cost
capacity desirable.
The operation of direct investment incentives will add to the total
of consumer purchasing power in th<~ hands of additional jobholders,
suppliers, etc.
This process adds an accelerator effect to the
process of groNth that will flow from the tax program. The interaction of these two facets, with the one aiding and abetting the other,
is of vital importance, giving the program a balance that is, perhaps,
the most important and overlooked aspect.
(6)
The Revenue Act of 1964 makes a reduction in income tax
tax reform in both the "economic"
.
ra t es t 'ne pr~mary
0 b'Jec t'~ve of ;ncome
~
anj structural senses.
This tax policy signified a recognition of the fact that current
high tax rates from top to bottom, both individual and corporate, were
too repressive for maintenance as a part of our per.nanent tax structure.
- 22 -
Th2 law expresses a national conviction that these high tax rates on
income, increased to meet the needs of war, now hold back growth and
lead to distortions in the tax structure.
About half of the Act's provisions will reduce income taxes by a
gross total of $12.4 billion annually when the program is fully
effective, of which about $11.7 billion is allocated to reduction in
individual and corporate rates, leaving only about $700 million of
tax reduction as a consequence of other structural changes. The
remaining provisions, of a base broadening nature, will increase
revenue by a total of $835 million a year, more than offsetting the
structural changes that lose revenue, and leaving a net total tax cut
of $11.5 billion.
The significance of this overwhelming Executive and Legislative
choice of a policy that utilizes rate reduction as an instrument of
both "economic" tax reform and str'-1ctural modification for purposes
of equity seems to have been overlooked by many commentators who
choose to define tax reform only in terms of base broadening.
It is true that the Act of 1964 fell short of the targ~t projected
by Presidential proposals of $13.6 billion of rate reduction in a bill
with net tax reduction of $10.3 billion. This was largely accounted
for by the refusal of Congress und the public at large to accept the
restriction on itemized deductions in th2 so-called five percent floor
proposal which would have produced additional base broadening revenues
of $2.3 billion. HONever, the picture is much less gloomy if one
considers what might have happened to the tax base if net tax reduction
had been primarily or substantially devoted to carving out new
d2ductions, credits or other erosions of base which give preferences
d,~pending upon the source of use of income or the pos i tion of the
recipient.
The Revenue Act of 1964 represents a decision to arrest
the gradual erosion of the tax base through special preferences
and privileges for certain groups of taxpayers. The design of the
future, it the policy of the 1964 Act is followed, will be the
provision of necessary revenues at the lowest possible tax rates
whenever tax reduction or base hroadening opportunities are
presented. This is a commendable switch from the old p3ttern of
opening new "loopholes" in th(' existing structure \vith the
inevitable result of increasing pressure upward on existing rates
or passing up the opportLlnitie~ of tax reduction or increased
inCUffi(' tax generation to reduce the rate scales.
- 23 This adoption of rate reduction as the primary objective
of both net tax reduction as well as base broadening means
that the nation has reincorporated in its tax system a
reassuring allegiance to the principle of rewards -- the leaving
of increased percentages of income after taxes with all tho3e who
invest additional effort and capital in economic activity. In
short, the profit motive, personal and corporate, has been
recognized and invigorated as an objective of tax policy. The
reduction of rates, up and down the scale by leaving an additional
higher percentage of earnings with both individual and corporate
units should spur the additional investment of both capital and
human effort and a natural desire to make the most effective use
of both, tending in turn to minimize the misallocation of resources
inherent in any tax system.
(7) The two enactments represent a new determination by
the Executive and the Congress to associate a search for greater
equity and structural improvement in the tax system with efforts
at "economic" tax reform, thereby opening the door to p2riodic
and persistent improvement of the structure of the tax system
as it is adapted to an ever changing economic environment.
There were strong voices and many counsels of expediency
that urged a course of foregoing any concern with equity and
structural modification rather than risk or delay "economic"
tax reform. The pressures for "quickie" tax cuts even of a
temporary nature will be recalled.
Nonetheless, those sponsoring and proposing permanent
changes in the tax structure to better adapt it to the economic
challenges of the Sixties concluded that, while an overriding
priority should be given to "economic" tax reform, any permanent
change in the system to that end should be designed and
associated with a solid effort to improve the equity and structural
soundness of the system. As a consequence, the revenue raising
scructural changes accomplished under the two Acts of Congress
represent major improvements in the equity of the tax system
and the revenue losing provisions are designed, by and large, to
relieve especial hardships beyond the reach of rate reduction and
achieve a careful balancing of the benefits.
- 24 If base broadening is the test of tax reform in the structural
sense of eliminating special preferences, then the past eighteen
months have witnessed a real turning point in tax reform in a
structural as well as an "economic" sense. Revenue raising
structural changes in all previous Revenue Acts since 1940 total
approximately $600 million -- the total from 1953 to 1961 was
less than $200 million.
The nearly $1.7 billion of revenue
raising changes in the two recent Acts not only increased the equity
of the income tax system; the revenue raised by them has been turned
back into rate reductions and investment incentives so as to
accomplish a measure of "economic" tax reform in addition to that
achieved through net tax reduction.
Structural reform in the 1964 Act included, for example,
limitations on tax advantages accruing from group term insurance,
bank loan insurance, sick pay exclusion, casualty loss deduction,
the utilization of personal holding companies, multiple corporation
provisions, gifts of future interest, aggregation of mineral
properties for charging depletion, and the realization of capital
gains on sales of real estate resulting from excessive depreciation.
In addition, deductions of certain State and local taxes that were
difficult of uniform and equitable administration, and the
dividend credit which greatly advantaged the large investor have
been eliminated.
To these examples of structural reform should be added
from the 1962 Act provisions that:
~"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;
- 25
;"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;
and provisions in the field of foreign taxation that:
;"Make Uni ted States shareholders curren tly
taxable on tax haven earnings of foreign corporations
controlled by them;
*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;
*Tax profits from sales of United States patents
to foreign subsidiaries at ordinary rather than
capital gains rates;
*Remove tax advantages previously granted tc
investment companies created abroad;
;"Restrict the exemption from United States tax
of earned income of American citizens establishing
residence abroad.
- 26Revenue raising resulting from base broadening is not the only
test of tax reform in the structural sense. Many modifications of
key provisions, such as those in the recent bill dealing with stock
options, personal holding companies, interest on deferred payments,
minimuu deposit and bank loan life insurance, and group term life
insurance are more important for their long range significance than their
current consequences in recapturing revenue. Nonetheless these
modifications remove or limit special privileges and preferences that
are no longer considered 2quitable or necessary.
Also, the recently enacted law involves the introduction of
structural innovations which are designed to improve the equity of the
syste~ and will qualify in many minds as structural reform even though
th2Y lose revenue rather than gain it. Some exa~ples are: the
introduction of an averaging system to meet th2 problems of bunched
income; the splitting of the first individual tax bracket into four
brackets to provide SO'll!? differentiation for the over fifty percent
of our taxpayers whose income falls entirely in the previous first
bracket; the adoption of the minim'Jrn standard deduction to provide
special relief for those with very lON incomes without the wastage at
ux)er levels that acco:npanies the comp8ting approach of raising exe-:nptions; the additional deduction for employee's moving expenses whether
or u8t reimbursed by the employer; and the removal of the two percent
consolidated returns tax.
Perhaps the public debate of the issues involved in base broadening
and other structural changes, ap~rt from n2t tax reduction and rate
reduction, is as important as ~he changes themselves. Many issues that
were heretofore debated only by experts have been placed under
legislative and public examination. The public and the Congress do
not always agree with the experts. If, after a proper debate,
the solutions that the experts and technicians propose do not secure
legislative acceptance, then others may be devised.
The im~ortant fact is that both of these bills carry forward the
2ffort to secure equity and structural reform in association with
3ttempts at "e~onomic" tax reform.
(8) The three measures represent the first effective resort to
:ax policy a3 a means of sustaining expansion and reducing the frequency
)f cyclical recession.
The impact of the 1962 tax actions and the prospect or anticipation
)f the 1964 Act h~ve contributed importantly to sustaining a period of
!cono~ic expansion for thirty-seven months.
The recent enactment casts
m o?timistic glow for the indefinite future. hlhe'l contrasted with th2
lre-exis ting pat te rn 0 f ever shortening periods of expans ion, the las t
me before this b8ing twenty-five months, th2 likelihood of achieving
h2 longes t one in peace time hi story, wi th t ax policy p lClying an
- 27 important role, is bound to focus continuing attention on tax policy
as an important measure of economic stabilization.
Congress is apparently unwilling to delegate any of its responsibility to the President to raise or lower tax rates for a temporary
period in a pattern prescribed in advance as a measure of economic
stabilization. This understandable reluctance will, hONever, place an
added premium on al~rtness in both Congress and the Executive to
utilize timely tax action as an anti-recession tool, particularly
in periods when resort to monetary and credit stimulus is precluded by
balance of payments difficulties.
In conclusion, I shall resist the temptation to prescribe my own
particular program for near term developments in tax policy. There
is a very good reason for this modesty -- I have no progra~.
Indeed, it seems fitting to pause a while and see how the changing
directions in tax policy just described actually work out in practice
before deciding on the next steps.
At least, the American businessmen whom you advise and represent
ought to be fully assured for the time being by recent events that our
tax policy is to help and encourage them to do more and profitable
business, create more jobs, and put more dollars to work.
But, the turning point in tax policy represented by the changing
directions of the last two years has a pressing longer term significance
to those who have special qualifications and responsibilities in the
field.
Theirs will be the never ending task of employing their special
knowledge of tax and fiscal policy within the framework of the national
decision now taken to utilize this instrument "for the common defense
and the general welfare."
The burden will be heavy on scholars,
legislators on the tax writing committees and elsewhere in the Congress,
the Executive Branch, leaders of business and labor, and the tax executives and experts represented here tonight.
For tax policy formulation
is truly an ever-unfinished task in a changing world.
It will be a
constant, ever-abiding responsibility for analysis, citizen education
and decision-making in the democratic process.
But as recent developments in tax policy indicate, where men of
good Nill a~d concern for the national interest, in gov2rnment and out,
se2k a ~eaningful consensus on a tax policy that serves the entire
nation, rather than special groups, that responsibility can and will be
disch3rged.
000
TREASURY DEPARTMENT
March 3, 1964
FOR IMMEDIATE RELEASE
TREASURY DECISION ON WOODEN COAT HANGERS
UNDER THE ANTIDUMPING ACT
The Treasury Department has determined that wooden coat
hangers from Yugoslavia are not being, nor likely to be, sold
in the United States at less than fair value within the meaning of the Antidumping Act.
Notice of the determination will
be published in the Federal Register.
The dollar value of imports of the involved merchandise
received during 1963 was approximately $1,000,000.
000
TREASURY DEPARTMENT
March 3, 1964
FOR IMMEDIATE RELEASE
TREASURY DECISION ON WOODEN COAT HANGERS
UlfDER THE ANTIDUMPING ACT
The Treasury Department has determdned that wooden coat
hangers from Yugoslavia are not being, nor likely to be, sold
in the United States at less than fair value within the meaning of the Antidumping Act.
Notice of the determination will
be published in the Federal Register.
The dollar value of imports of the involved merchandise
received during 1963 was approximately $1,000,000.
000
- 3 -
and exchange tenders viII 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.
The income derived from Treasury bills, whether interest or gain from the
~e
or other disposition of the bills, does not have any exemption, as such, and 10s8
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
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 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 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 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 will be received without deposit from incorporated bBZlks
and trust companies and from responsible and recognized dealers in investment
securities.
Tenders from others must be accompanied by payment of 2 percent of
the face amount of Treasury bills applied for, unless the tenders are accompanied
by an express guaranty of payment by an incorporated bank or trust company.
Immediately after the closing hour, tenders will be opened at the Federal
Reserve Banks and Branches, following which public announcement will be made by
the Treasury Department of the amount and price range of accepted bids.
Those
submitting tenders will be advised of the acceptance or rejection thereof.
The
secretary of the Treasury expressly reserves the right to accept or reject any
or all tenders, in whole or in part, and his action in any such respect shall be
final.
Subject to these reservations, noncompetitive tenders for $ 200,000 or
***
less for the additional bills dated
ing until maturity date on
$~O
December 12, 1963
, ( 91
days remain5qd(#
(&f
June ~64
) and noncompetitive tenders for
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 ten-
ders in accordance with the bids must be made or completed at the Federal Reserre
Banks on
Harch 12, 1964
Uti&
, in cash or other immediately available funds or
in a like face amount of Treasury bills maturing __Ma_r_c_h---:1lr,:2:,=-l_9.,;..64___ • cash
b#
TREASURY DEPARTMENT
Washington
March 4, 1964
FOR IMMEDIATE RELEASE
}OOOOOOOOOOOO~~
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 $ 2,200 t#0' 000 , or thereabouts, for
cash and in exchange for Treasury bills maturing
of $
2,200~7,OOO
~-daY
March
~
, in the amount
1964
, as follows!
bills (to maturity date) to be issued
March
1~1964
in the amount of $ 1,300,000,000 , or thereabouts, represent-
l2iJ
ing an additional amount of bills dated
and to mature
June
~1964.
amount of $ 800,.000
December 12, 1963 ,
X(C6ij
,originally issued in the
, the additional and original bills
to be freely interchangeable.
182 -day bills, for $ 900,~OO ,or thereabouts, to be dated
~
March ~964
, and to mature September 10 J 1964
(CiiJ
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 Standard time, Monday, March 9, 1964
ilii
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
March 4, 1964
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
~,200,000,000, or thereabouts, for cash and in exchange for
Treasury bills maturing March 12,1964,
in the amount of
$2,200,377,000 as follows:
9Lday bills (to maturity date) to be issued March 12, 1964,
in the amount of $1,300,000,000, or thereabouts, representing an
additional amount of bills dated December 12,1963, and to
mature June 11, 1964,
originally issued in the amount of
$ 800,981,000, the additional and original bills to be freely
interchangeable.
182-day bills, for $900,000,000,
or thereabouts, to be dated
March 12, 1964,
and to mature September 10, 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 Standard
time, Monday, March 9, 1964.
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
~ccompanied by an express guaranty of payment by an incorporated bank
)r trust company.
0-1155
- 2 -
Immediately after the closing hour, tenders will be opened at
the Federal Reserve Banks and Branches, followin~ which public
announcement will be made by the Treasury Department of the amount
and Drice 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 fiual. Subject to these reservations, noncompetitive
tenders for ~OO,OOO or less for the additional bills dated
December 12 1963, (91-days remaining until maturitr date on
TunL' U, 1 q64)
and noncompeti t i'le tenders for $ 100,000
or less for 'che 182-day bills without stated price from anyone
bidder will be accepted 1n full at the average price (in three
decimals) of accepted competitive bids for the respective issues.
Settlement for accepted tenders 1n accordance with the bids must be
made or completed at the Federal Reserve Banks on March 12, 1964,
in cash or ether immediately available funds or in a like face
amount of Treasury bills maturing ~larch 12, 1964.
Cash ctnd
exchange tenders will receive equal treatment. Cash adjuntments
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 disposj~ion of the bills, does not have
any exempticn, as such, and loss from the sale or other dJsposition
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 1r>P ~xF>m!,+: from all tax~+:ion now or hereafter imposed on
the princiral or interest thereof by any State, or any of the
possession~ of the United States, or by any local taxing authority.
~or purposes of taxation the amount of discount at which Treasury
bills are originally sold by the United States is considered to be
interest. Under Sections 454 (b) and 1221 (5) of the Internal
Revenue Code of 1954 the amount of discount at which bills issued
hereunder are sold is not considered to accrue until such bills are
sold, redeemed or otherwise disposed of, and such bills are excluded
~rom consideration as capital assets.
Accordingly, the owner of
7~'easury bills (other than life insurance companies) issued hereunder
need include in his income tax return only the difference between
the ;;rice paid :'or 2u~h bi lls, whe'~her on original issue or on
subsequent purchase, anJ the ar.lJun~ actually received eith2r upon
sale or redemption at maturity during the taxable year for which the
return is made, as ordinary gain or loss.
":-,eas~:-'JT J-?DartmeClt Cir:ulp,r lIe. L.ll8 (current revision) and this
n::ltice prescribe the terms of the ~reasury bills and govern the
conditions of their issue. Copies of the circular may be obtained f~m
any ~eieral Reserve 3ank or Branch.
KENNEDY
K\LF - DOLLARS TO BE RELE ,,\SED MARCH
24
The Bureau of the Mint has arranged with the Federal
Reserve Banks to start distribution of the John F. Kennedy
half-dollars to the commercial banking system on March
24.
This means that the coins will be available in most city
banks on that day and most country banks a day or so
following.
Requests for individual snecimens of the Kennedy halfdollar should be made through local banks.
Neither the Mint
nor the Federal Reserve Banks and Branches can supply them
directly to the public.
The initial release will be 26,000,000 pieces.
Before
the year is over, another 64 million pieces will be issued.
As a coin of regular issue, the Kennedy half-dollar will be
in effect for a twenty-five year period.
000
TREASURY DEPARTMENT
March 4, 1964
FOR IMMEDIATE RELEASE
KENNEDY HALF-DOLLARS TO BE RELEASED ON MARCH 24
The Bureau of the Mint has arranged with the Federal
Reserve Banks to start distribution of the John F. Kennedy
half-dollars to the commercial banking system on March 24.
This means that the coins will be available in most city
banks on that day and most country banks a day or so
following.
Requests for individual specimens of the Kennedy halfdollar should be made through local banks.
Neither the Mint
nor the Federal Reserve Banks and Branches can supply them
directly to the public.
The initial release will be 26,000,000 pieces.
Before
the year is over, another 64 million pieces will be issued.
As a coin of regular issue, the Kennedy half-dollar will be
in effect for a twenty-five year period.
000
D-1156
- 21 -
permitting the foreign currencies acquired to be held in a wider
variety of safe and liquid money market instruments -- including,
in particular) foreign Treasury bills, -- the Congress would be taki
'*'
mesL
important new step to
S--f:oI.'eRg€ReQ
the internati onal monetary
system and the position of the dollar.
Clearly) perfection cannot be claimed for either the Federal
Reserve
Act~
which became law more than 50 years ago, or the Federal
Reserve System as it has evolved within the framework of that law.
As in the past, the effective adaptation of the Federal Reserve to
the needs of today and tomorrow will require that the Congress be
willing to search out and eliminate faults and anachronisms that
hamper effective performance o
in undertaking tha necessary
But, I would also urge this Committee
task~
to protect and preserve those
elements in the structure of the Federal Reserve thae underly its
special strength and stature at the center of our banking system.
- 20 -
bilities in the international financial area .. a-&----Ue-xihl¥-.a4!l -eeeit'o
z
/.
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The Federal Re serve banks, as they acquire foreign currencies
can place these funds abroad only in bank deposits or in commercial
paper of limited classes and restricted availability.
For years,
these restrictions were of no practical import, in view of the
limit ed amount of fureign currencies held by the Systemo
Federal Reserve
1S
But, the
now resuming operations in a variety of foreign
currencies on a larger scale and participating widely in the
of reciprocal currency agreements and other arrangements that
netwo~
m'l€
emerged from the increasing cooperation among monetary authorities
in recent years.
Consequently, the need for greater flexibility is
apparent.
These operations in defense of the dollar
-~
and more broadly
in the interests of international monetary stability generally -are likely to grow rather than to diminish ln coming years.
By
- 19 The necessity for banks to maintain assets that meet these
restrictive "eligibility" requirements in a volume adequate to provi
a reasonable margin over foreseeable needs ,." gtJr n i;aIg impediment in
the flexible distribution of bank credit among competing uses.
More
over, shortages of eligible paper could potentially affect the
ability of the Federal Reserve to make credit promptly available at
reasonable terms to its members when required.
Unless these eligi-
bility requirements are relaxed, the time could come that the flow
of credit from banks to consumers, homebuyers, and businesses
requiring medium-term credit would be unnaturally constrained.
Doubts
~~d
arise over the ability of the Federal Reserve to
relieve any sudden pressures effectively and expeditiously.
I urge
that you give your early attention to removing this anachronism
from law.
A somewhat parallel rigidity in the law is beginning to affect
the ability of the Federal Reserve
- 18 The first of these areas concerns the archaic requirements
defining the paper eligible for securing advances to member banks.
At the present time, as you know, the Federal Reserve can
freely lend to member banks at the prevailing discount rate only
on the basis of Government securities or commercial paper meeting
certain rigid legal requirements in its maturity, purpose, and Itself
liquidating" character.
In recent years, a much larger proportion
of the Government security holdings of many banks has been needed
to secure public deposits or for other purposes that effectively
forestall their use in borrowing from the Federal Reserve.
The
supply of}paper meeting the technical eligibility requirements of
the Federal Reserve Act has al so decl ined as the character of bank
lending has changed over the decades, and in any event the use of
this paper for borrowing would require awkward and cumbersome procedures by both commercial banks and the Federal Reserve.
- 17 side of lower rates o
But I think that to make a fixed level of
interest rates the sole obj ective in any circumstances,- would prevent the Federal Reserve from doing most of the other things that
we expect it to do -- in avoiding inflation, or averting boom-bust
cycles, or assisting sustained growth o
The contribution that flexible interest rates and monetary
policies can make to growth without inflation are so great that we
must place no artificial restrictions of this kind on Federal
Reserve operations.
Before closing, I would like to suggest to the Committee two
areas in which outmoded restrictions in the Federal Reserve Act havE
clearly outlive any usefulness they might once have had, and today
unnecessarily constrict the flexibility with which the Federal
Reserve can dischar~ e its domestic and international responsibilit iE
- 16 -
The final bill, HR. 9749, would commit the Federal Reserve to
support the yields of all Government securities at rates no higher
than
4-~%.
This would in my judgment represent a departure from
the principles of flexible and vigorous monetary and credit policieE
Those principles are now , I would hav,¢' thought, almost unanimously
accepted by those concerned with fostering sustained and orderly
economic growth.
In my judgment, efforts to peg interest rates by governmental
decree, or to hold them below a predetermined level, represent an
unrealistic simplification of what can in fact be done, or
attempted, by any governmental authority.
rates to be as low as possible.
~8t!
of
*3
proper~
want interest
We want to remove any props that
artificially hold rates above the levels that supply and demand in
competitive markets would produce.
We want the influence of govert
!"l2'nt constructively used, wherever there is room for choice, on the
- 15 of the Tax and Loan Account system would be self-defeating. ,'-It is ..
net:
~(m~tte!' ~-can
safely· leave to the cost acc-ountants alone.
I would be happy to have Mr. John Carlock, who as Fiscal
desposito~
Assistant Secretary is directly in charge of the Treasury
arrangements, provide you with a more detailed review of these
matters at your convenience.
Much broader issues of monetary theory and practice are raised
by the proposal in HR. 9687 that we reverse the Banking Acts of 1933
and 1935 and permit banks to resume payment of interest on demand
deposits.
This approach was fully explored by the President's
Committee on Financial Institutions.
However, the majority of the
Committee concluded in its report filed last year that the dangers
and difficulties posed by such a change, particularly for smaller
banks outside of the financial
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- 14 section of the country to another, as well as disturbing contractions
or expansions in the total of bank reserves, that would otherwise
be an unfortunate by-product of the large, day-to-day cash and
borrowing operations of the Treasury.
Second, the Tax and Loan
Account System makes it possible for commercial banks to underwrite
and distribute new Treasury securities -- an indispensable element
in the smooth market absorption of many new cash offerings.
I know of no arrangements in foreign countries that have been
more successful in minimizing and cushioning the effects of Treasury
operations on the money markets, even though in many of those
countries a highly centralized banking system makes simpler the task
of forestalling disturbing flows.
Any effort to seek a precise balancing of costs and earnings
that emerge from the mutual relationships of the Treasury and the
banks that would directly or indirectly impede these basic function!
- 13 The first of these, which would require the payment of interest
on Treasury Tax and Loan Accounts, is the most limited in scope.
This matter, as you know, has been carefully reviewed at intervals
by the Treasury Department o
We now have underway a new and
'J/ .> .. ~
comprehensive study of the facts
on~~~bank
earnings that can
be attributable to these accounts and bank expenses in handling
transactions of the Government.
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This study, which I hope will be
,/
completed by
~
will shed further light on this matter.
However, in appraising the Tax and Loan Account System, I
,_,.
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it is vital to keep in mind that these
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.
designed
not otil'y as a method to reimburse banks for services performed but
to fill a special need in our decentralized financial system,
characterized by a large number of independent banks.
arrangements perform a two-fold function.
These
First, the use of
Tax and Loan Accounts avoids abrupt flows of deposits from one
=
12 -
of the current special geographical restrictions on Board membership and of indications that members should be representative of
p3rticular interests.
In the same vein, I should also express my firm support for
the efforts now underway to lift the salaries of Board members
along with those of other Government Officials.
This is the
appropriate path toward reducing the present anomalies -- so evident
within the Federal Reserve System itself
t.~':.
members with salaries
~-
that have left Board
,:
~~
below the more competitive rates paid
not only in industry but within the Federal Reserve System itself.
Other Issues
Three ot the bills before your Committee -- HR. 9686, HR.96B7,
and HR. 974~ -- raise issues of general financial policy rather
than of the administrative structure and independence of the
Federal Reserve itself.
- 11 -
attract highly qualified otficials and staff; and a reputation for
operating efficiently and impartially.
The structure that has resulted does not fit easily into the
framework of standard tables of organization.
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.,
is widely dispersed/ Methods---e-t--a-ehieving coordination· between.._
the major instn.unent:-~~c1 depend5 in part on informal working
relationships built up over the years.
vestigial elements of
an earlier conception of private participation in central banking
policies -- elements that are more symbolic than real today -are still visible.
Personally, I would be inclined to the view that, if any
change is made in the composition of the Board itself, it might
better be made smaller rather than larger.
I would also think
that consideration might usefully be given to some shortening in
the present l4-year term for Board members,J,to the elimination bot!
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- 10 questions of organization upon which I have no special competence,
In approaching questions of this kind, however, I do feel
strongly that we should remain mindful of the relevance of one
of President Wilson's remarks at the time the Federal Reserve
System was established 50 years ago.
sponsor s
He noted then that the
of that legislation were dealing "with our economic
system as it is and as it might be modified, not as it might be
if we had a clean sheet of paper to write upon."
This
Com~ittee
is dealing with a living institution -- an
institution that has demonstrated its capacity to innovate, to
experiment, and to adapt itself to a very wide range of circumstances.
But in this process of change, it has never lost certain
characteristics -- an established tradition of independent judgment;
a mixture of regional participation in policy-making with ultimate
central control that is unique in our Government; an ability to
- 9 there will be firm institutional basis for expecting that the kind
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of cooperative relationship charectetistie
will continue
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daf-i~ t::hl:~ A~
in the future, and that the viewpoints and aims of
an incoming Administration will be sympathetically reflected in the
councils at the Federal Reserve
Q
Two years ago, President Kennedy
made precisely such a proposal to the Congressl
~~ ~s ~~
by· the Joint- Economie---C.oromittee in its rep?rt.
It was valid then
anrirremains valid today.
I commend it to your attention.
The Internal Structure of the Federal Reserve
The bills before you raise a number of other specific issues
concerning the internal structure of the Federal Reserve, including
the c0mposition of the Board, the usefulness of the Federal Open
Market Committee, arrangements for appropriate audits, and the
methods of covering its necessary expenditures.
I will not dwell
upon these issues at length for they raise a number of detailed
- 8 -
and quite properly
SOQ
But around the world, almost all countries
still find it useful to maintain independence for their central
banks within the
govern~ent.
Independence naturally implies the right to disagree; and not
only to disagree, but to act on the basis of different judgments.
Some differences between the Treasury and the Federal Reserve may
trom time to time be a fact of life.
sing.
But this need not be distres-
The necessity to test policy proposals against the views of
an independent Federal Reserve is, I believe, the best insurance
.
we can have that the claims of financial stability will never be
In considering this problem ot achieving a proper balance, I
share the view ot the present Chairman of the Board of Governors
that
term of office should be made coterminous, or more nearly
coterminous, with that of the President.
choose a new Chairman upon taking
With a President free to
office~ ~ shortly
th£reafter,
- 7 -
You will recall the inquiries into the Federal Reserve conducted by Senator Douglas and Chairman Patman
~n
1950 and 1952.
At that time the issue of supporting the prices of Government
securities at a tixed rate was still alive, and the case for timely
flexibility of mJnetary and credit policy was strongly argued.
Both reports pointed out that the demands ot the Treasury during
the early postwar years for a stable market for its securities
should give way to the overriding need for 'the Federal Reserve to
use its powers to contribute to a sustainable
overa~l
balance in
our' economy c
Finally, and perhaps most fundamental to a resolution of this
issue, experience over many years and in many countries has taught
the wisdom of shielding those who make decisions on monetary poli~
from day-to-day pressures.
The day of private central banks
operating without regard to Government policy is long since gone,
econo~y,
will at times be biased by the constant pressures on the
Secretary ot the Treasury to assure the economical financing of
the dominant borrower in our economy -- the Federal Government
itself.
This does not mean that the Federal Reserve should not or
does not properly take into account the financing needs of the
Federal Government in determining its own policy.
These Treasury
financing operations have important implications for financial
markets generally, and in their common pursuit of a vigorous and
healthy economy the Federal Reserve and the Treasury share a common
interest in the orderly financing of Government.
But occasions
could, of course, arise in which almost any Secretary of the
Treasury would feel a conflict between his immediate interest in
insuring a successful financing and the broader objective of maintaining a supply of money and credit in tune with the needs of the
economy as a whole
.
- 5 Demands on the time of any Secretary of the Treasury are
already heavy.
Added responsibilities for the formulation and
execution ot monetary policy would compete with
in other areas.
his responsibilitie:
Delegation of a large portion of these new respon-
sibilities to his subordinates -- and that could hardly be avoided would in turn raise further questions about whether the critical
and complex issues of monetary policy were receiving the attention
they deserve.
It is one thing for the Secretary of the Treasury
to be continually aware ot the general nature and direction of
monetary policy, and to keep in close touch with the Chariman of
the Board of Governors on the issues that seem most siqnificant
.o
as I now do.
It is quite another to be responsible for the vast
and complex activities of a very intricate operating organization.
Proposals ot this kind also raise the possibility that decis~
on monetary policy, directed toward the overall health of the
- 4 cannot be attributed entirely to a happy accident of
congenial personalities or to a fortuitous coincidence of objectives.
The Federal Reserve is bound by the same broad objectives,
cited in the Employment Act of 1946, that govern the operations
of other government agencies.
Federal Reserve Independence
From time to time, suggestions have been made that coordination
of financial policy should be enforced by various devices.
Such a
proposal is contained in one of the bills before you -- HR. 9631 .which would make the Secretary of the Treasury ex-officio Chairman
of the Federal Reserve Board.
This proposal seems to me to raise most important questions
of public policy, for inevitably the implication is that the
stature of the Federal Reserve -- independent not of the
Governm~t
but ot the Treasury -- would be, to some degree, diminished.
- 3 been further bolstered by free and continuous exchange of inforrnatioo
between the staffs of the Treasury and the Federal Reserve.
In addition,
Prasi:dent-Eisennower--lnl'tl~4,~
Kennedy and Johnson have continued
PresidentS
practice of meeting from
t~e
to time with the top financial officials ot the Administration.
Chairman Martin has participated fully in these discussions.
He
cannot, of course, bind the Federal Reserve to a decision that is
within the province of his Board
OI
the Open Market Committee.
But
he is always willing to convey his own appraisals and judgments to
us.
These conference~enable him to interpret accurately and sym-
pathetically the Administration's objectives and policies to his
own Board and to the Open Market Committee, so that those groups
/)
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have the benefit ot this information in arriving at their
own decisions.
This process of close consultation and cooperation
- 2 -
the supply of money and bank credit according to their own best
appraisal of prevailing economic circumstances.
.
This cornmon under-
.(
as the chief fiscal
standing and cooperation has gr@fitl~ h!:if'e~ me
...
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and financial a.:t:aeiRM. of the
Governrnen~ in
my direction of our
international financial relationships.
cooperation has been reflected in a number of informal
relationships that, by their presence through several administrations, are now a matter of course.
Every Monday, for instance, the
Chairman of the Board of Governors visits the Treasury to discuss
with me current issues and problemS..
Every Wednesday, the Chairman,
together with other Governors and members of his staff, meet at
lunch with the Under Secretary for Monetary Affairs and his associat
to discuss matters of mutual interest.
More formally, certain
aspects of international policy are cleared through the National
Advisory Council under my chairmanship.
These relationships have
STATEMENT OF THE HONORABLE DOUGLAS DILLON
SECRETARY OF THE TREASURY
BEFORE T.1E SUBCOMMITTEE ON DOMESTIC FINANCE
OF THE HOUSE COMMITTEE ON BANKING AND CURRENCY
THURSDAY, MARCH 5, 1964, 10:00 A.M., EST
Federal Reserve - Treasury Cooperation
It is difficult for me to conceive of any closer working
relationships between two coordinate agencies of Government than
those that h3ve characterized the Treasury and the Federal Reserve
s-iftce--i--have
b~·en·
in-my--pr-e-sent: "'ffice.
That does not mean that
our policy judgments always coincide -- any more than do, for
instance, the policy judgments of the individual Governors who sit
on the Federal Reserve Board.
But I believe that each agency has
been fully informed at all times on the problems and policies of
the other, and worked closely together in coordinating their separat
I have always found the fMJ1i sy officials of the Federal Reserve
eager to learn of our special problems and quick to cooperate
wi~~
the bounds set by their own primary responsibility for regulating
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TREASURY DEPARTMENT
Washington
FOR RELEASE:
ON DELIVERY
STATEMENT OF THE HONORABLE DOUGLAS DILLON
SECRETARY OF THE TREASURY
BEFORE
THE SUBCOMMITTEE ON DOMESTIC FINANCE
OF
THE HOUSE COMMITTEE ON BANKING AND CURRENCY
THURSDAY, MARCH 5, 1964, 10:00 A.M., EST
Mr. Chairman:
My testimony today will be limited to what I have experienced
during my three years as Secretary of the Treasury.
That is the
only period in which I have had any close contact with the
Federal Reserve System or with the operations of our commercial
banking system.
Federal Reserve - Treasury Cooperation
It is difficult for me to conceive of any closer working
relationships between two coordinate agencies of Government than
those that have characterized the Treasury and the Federal
Reserve during the past three years.
That does not mean that
our policy judgments always coincide -- any more than do, for
instance, the policy judgments of the individual Governors who
sit on the Federal Reserve Board.
But I believe that each
agency has been fully informed at all times on the problems and
policies of the other, and worked closely together in coordinating
their separate actions.
D-1157
- 2 -
I have always found the officials of the Federal Reserve
eager to learn of our special problems and quick to cooperate
within the bounds set by their own primary responsibility for
regulating the supply of money and bank credit according to
their own best appraisal of prevailing economic circumstances.
This common understanding and cooperation has been of great
help to me as the chief fiscal and financial office of the
Government and in my direction of our international financial
relationships.
Cooperation has been reflected in a number of informal
relationships that, by their presence through several
administrations, are now a matter of course.
Every Monday, for
instance, the Chairman of the Board of Governors visits the
Treasury to discuss current issues and problems with me, and
my associates.
Every Wednesday, the Chairman, together with
other Governors and members of his staff, meet at lunch with
the Under Secretary for Monetary Affairs and his associates to
discuss matters of mutual interest.
More formally, certain
aspects of international policy are cleared through the National
Advisory Council under my chairmanship.
These relationships have
been further bolstered by free and continuous exchange of
information between the staffs of the Treasury and the
Federal Reserve.
- 3 In addition, Presidents Kennedy and Johnson have continued
the practice of meeting from time to time with the top
financial officials of the Administration.
has participated fully in these discussions.
Chairman Martin
He cannot, of
course, bind the Federal Reserve to a decision that is within
the province of his Board or of the Open Market Committee.
But
he is always willing to convey his own appraisals and judgments
to us.
These conferences also enable him to interpret
accurately and sympathetically the Administration's objectives
and policies to his own Board and to the Open Market Committee,
so that those groups may have the benefit of this information in
arriving at their own decisions.
This process of close consultation and cooperation
cannot be attributed entirely to a happy accident of congenial
personalities or to a fortuitous coincidence of objectives.
Its foundation rests solidly upon the fact that the
Federal Reserve is bound by the same broad objectives, cited
in the Employment Act of 1946, that govern the operations of
other government agencies.
Federal Reserve Independence
From time to time, suggestions have been made that
coordination of financial policy should be enforced by various
devices.
Such a proposal is contained in one of the bills
- 4 before you -- H.R. 9631
which would make the Secretary of
the Treasury ex-officio Chairman of the Federal Reserve
Board.
This proposal seems to me to raise most important questions
of public policy, for inevitably the implication is that the
stature of the Federal Reserve -- independent not of the
Government, but of the Treasury -- would be, to some degree,
diminished.
Demands on the time of any Secretary of the Treasury are
already heavy.
Added responsibilities for the formulation and
execution of monetary policy would compete with his
responsibilities in other areas.
Delegation of a large portion
of these new responsibilities to his subordinates -- and that
could hardly be avoided -- would in turn raise further questions
about whether the critical and complex issues of monetary policy
were receiving the attention they deserve.
It is one thing for
the Secretary of the Treasury to be continually aware of the
general nature and direction of monetary policy, and to keep in
close touch with the Chairman of the Board of Governors on
the issues that seem most significant -- as I now do.
It is
quite another to be responsible for the vast and complex
activities of a very intricate operating organization.
- 5 -
Proposals of this kind also raise the possibility that
decisions on monetary policy, directed toward the overall
health of the economy, will at times, consciously or
unconsciously, be biased by the constant pressures on the
Secretary of the Treasury to assure the economical financing
of the dominant borrower in our economy -- the Federal
Government itself.
This does not mean that the Federal Reserve
should not or does not properly take into account the financing
needs of the Federal Government in determining its own policy.
These Treasury financing operations have important implications
for financial markets generally, and in their common pursuit
of a vigorous and healthy economy the Federal Reserve and
the Treasury share a common interest in the orderly financing
of Government.
But occasions could, of course, arise in
which almost any Secretary of the Treasury would feel a
conflict between his immediate interest in insuring a successful
financing and the broader objective of maintaining a supply of
money and credit in tune with the needs of the economy as a
whole.
- 6 Finally, and perhaps most fundamental to a resolution
of this issue, experience over many years and in many
countries has taught the wisdom of shielding those who make
decisions on monetary policy from day-to-day pressures.
The day of private central banks operating without regard
to Government policy is long since gone, and quite properly
so.
But around the world, almost all countries still find
it useful to maintain independence for their central banks
within the government.
Independence naturally implies the right to
disagree; and not only to disagree, but to act on the
basis of different judgments.
Some differences between
the Treasury and the Federal Reserve may from time to time
be a fact of life.
But this need not be distressing.
The
necessity to test policy proposals against the views of an
independent Federal Reserve is, I believe, the best insurance
we can have that the claims of financial stability will never
be neglected.
- 7 In considering this problem of achieving a proper balance,
I share the view of the present Chairman of the Board of Governors
that the Chairman's term of office should be made coterminous
or more nearly coterminous, with that of the President.
,
With
a President free to choose a new Chairman upon taking office,
or shortly thereafter, there will be firm institutional basis
for expecting that the kind of cooperative relationship
that has characterized the past three years will continue in
the future, and that the viewpoints and aims of an incoming
Administration will be sympathetically reflected in the
councils of the Federal Reserve.
Two years ago, President
Kennedy made precisely such a proposal to the Congress.
was valid then and it remains valid today.
It
I commend it
to your attention.
The Internal Structure of the Federal Reserve
The bills before you raise a number of other specific issues
concerning the internal structure of the Federal Reserve,
including the composition of the Board, the usefulness of the
Federal Open Market Committee, arrangements for appropriate
audits, and the methods of covering its necessary expenditures.
I will not dwell upon these issues at length for they raise a
number of detailed questions of organization upon which
I have no special competence.
- 8 -
In approaching questions of this kind, however, I do feel
strongly that we should remain mindful of the relevance of
one of President Wilson's remarks at the time the Federal
Reserve System was established 50 years ago.
He noted then
that the sponsors of that legislation were dealing "with
our economic system as it is and as it might be modified,
not as it might be if we had a clean sheet of paper to
write upon."
This Committee is dealing with a living institution -and institution that has demonstrated its capacity to innovate,
to experiment, and to adapt itself to a very wide range of
circumstances.
But in this process of change, it has never
lost certain characteristics -- an established tradition of
independent judgment; a mixture of regional participation in
policy-making with ultimate central control that is unique
in our Government; an ability to attract highly qualified
officials and staff; and a reputation for operating efficiently
and impartially.
The structure that has resulted does not fit easily
into the framework of standard tables of organization.
- 9 Policy responsibility is widely dispersed and coordination
depends in part on informal working relationships built up
over the years.
Vestigal elements of an earlier conception
of private participation in central banking policies -elements that are more symbolic than real today -- are
still visible.
But change without clear purpose can be dangerous too.
If there are persuasive reasons for particular proposals -if it can be shown that ownership of Federal Reserve Bank
stock by member banks has biased Federal Reserve policy decisions,
or if budgetary or auditing practices have been loose, to
take two examples -- by all means, this Committee should act.
But I doubt the advisability of taking action simply for the
sake of achieving symmetry with other Government agencies,
particularly if there was danger that such action might impair
a long tradition of regional participation and efficient
service of which I believe the country can be proud.
Personally, I would be inclined to the view that if any
change is made in the composition of the Board itself, it
- 10 -
might better be made smaller rather than larger.
I would
also think that consideration might usefully be given to
some shortening in the present l4-year term for Board members,
as well as to the elimination both of the current special
geographical
restrictions on Board membership and of
indications that members should be representative of
particular interests.
In the same vein, I should also express my firm
support for the efforts now underway to lift the salaries
of Board members along with those of other Government officials.
This is the appropriate path toward reducing the present
anomalies -- so evident within the Federal Reserve System
itself -- that have left Board members with salaries far
below the more competitive rates paid not only in industry
but within the Federal Reserve System itself.
Other Issues
Three of the bills before you Committee -- H. R. 9686,
H. R. 9687, and H. R. 9749 -- raise issues of general
financial policy rather than of the administrative structure
and independence of the Federal Reserve itself.
- 11 -
The first of these, which would require the payment of
interest on Treasury Tax and Loan Accounts, is the most limited
in scope.
This matter, as you know, has been carefully reviewed
at intervals by the Treasury Department.
We now have underway a
new and comprehensive study of the facts both on bank earnings
that can be attributable to these accounts and on bank expenses
in handling transactions of the Government.
This study, which I
hope will be completed by July, will shed further light on this
matter.
However, in appraising the Tax and Loan Account System, I
think it is vital to keep in mind that these arrangements were
basically designed not as a method to reimburse banks for services
performed but to fill a special need in our decentralized financial
system, characterized by a large number of independent banks.
These arrangements perform a two-fold function.
First, the use
of Tax and Loan Accounts avoids abrupt flows of deposits from one
section of the country to another, as well as disturbing contractions or expansions in the total of bank reserves, that would
otherwise be an unfortunate by-product of the large, day-to-day
cash and borrowing operations of the Treasury.
Second, the Tax
and Loan Account System makes it possible for commercial banks
to underwrite and distribute new Treasury securities -- an indispensable element in the smooth market absorption of many new cash
offerings.
- 12 I know of no arrangements in foreign countries that have
been more successful in minimizing and cushioning the effects of
Treasury operations on the money markets, even though in many of
those countries a highly centralized banking system makes
simpler the task of forestalling disturbing flows.
Any effort to seek a precise balancing of costs and earnings
that emerge from the mutual relationships of the Treasury and the
banks that would directly or indirectly impede these basis
functions of the Tax and Loan Account System would be self-defeating.
I would be happy to have Mr. John Carlock, who as Fiscal
Assistant Secretary is directly in charge of the Treasury
depository arrangements, provide you with a more detailed review of
these matters at your convenience.
Much broader issues of monetary theory and practice are raised
by the proposal of H. R. 9687 that we reverse the Banking Acts of
1933 and 1935 and permit banks to resume payment of interest on
demand deposits.
This approach was fully explored by the President's
Committee on Financial Institutions.
However, the majority
of the Committee concluded in its report filed last year that the
dangers and difficulties posed by such a change, particularly for
smaller banks outside of the financial centers, outweighed any
potential advantages.
I joined in that majority finding.
- 13 The final bill, HR. 9749, would commit the Federal Reserve
to support the yields of all Government securities at rates no
higher than 4-t%.
This would in my judgment represent a departure
from the principles of flexible and vigorous monetary and credit
policies.
In my judgment, efforts to peg interest rates by governmental
decree, or to hold them below a predetermined level, represent an
unrealistic simplification of what can in fact be done, or properly
attempted by any governmental authority.
to be as low as possible.
We want interest rates
We want to remove any props that arti-
ficially hold rates above the levels that supply and demand in
competitive markets would produce.
We want the influence of
government constructively used, wherever there is room for choice,
on the side of lower rates.
But I think that to
~ake
a fixed
level of interest rates the sole objective in any circumstances
would prevent the Federal Reserve
fro~
doing most of the other
things that we expect it to do -- in avoiding inflation, or
averting boom-bust cycles, or assisting sustained growth.
The
contribution that flexible interest rates and monetary policies
can make to growth without inflation are so great that we must
place no artificial restrictions of this kind on Federal Reserve
operations.
- 14 Before closing, I would like to suggest to the Committee two
areas in which outmoded restrictions in the Federal Reserve Act
have clearly outlived any usefulness they might once have had, and
today unnecessarily constrict the flexibility with which the
Federal Reserve can discharge its domestic and international
responsibilities.
The first of these areas concerns the archaic requirements
defining the paper eligible for securing advances to member banks.
At the present time, as you know, the Federal Reserve can
freely lend to member banks at the prevailing discount rate only
on the basis of Government securities or commercial paper meeting
certain rigid legal requirements in its maturity, purpose, and
"self-liquidatin~'
character.
In recent years, a much larger
propostion of the Government security holdings of many banks has
been needed to secure public deposits or for other purposes that
effectively forestall their use in borrowing from the Federal
Reserve.
The supply of other paper meeting the technical eligi-
bility requirements of the Federal Reserve Act has also declined
as the character of bank lending has changed over the decades,
and in any event the use of this paper for borrowing would require
awkward and cumbersome procedures by both commercial banks and
the Federal Reserve.
- 15 The necessity for banks to maintain aasets that meet these
restrictive "eligibility" requirements in a volume adequate to
provide a reasonable margin over foreseeable needs could become
an impediment in the flexible distribution of bank credit among
competing uses.
Moreover, shortages of eligible paper could
potentially affect the ability of the Federal Reserve to make
credit promptly available at reasonable terms to its members
when required.
Unless these eligibility requirements are
relaxed, the time could come that the flow of credit from banks
to consumers, hornebuyers, and businesses requiring medium-term
credit would be unnaturally constrained.
Doubts might unneces-
sarily arise over the ability of the Federal Reserve to relieve
any sudden pressures effectively and expeditiously.
I urge that
you give your early attention to removing this anachronism from
law.
A somewhat parallel rigidity in the law is beginning to
affect the ability of the Federal Reserve to meet its growing
responsibilities in the international financial area.
The
Federal Reserve banks, as they acquire foreign currencies, can
place these funds abroad only in bank deposits or in commercial
paper of limited classes and restricted availability.
For years,
these restrictions were of no practical import, in view of the
limited amount of foreign currencies held by the System. But,
- 16 the Federal Reserve is now resuming operations in a variety of
foreign currencies on a larger scale and participating widely in
the network of reciprocal currency agreements and other arrangements that have emerged from the increasing cooperation among
monetary authorities in recent years.
Consequently, the need
for greater flexibility is apparent.
By permitting the foreign currencies acquired to be held in
a wider variety of safe and liquid money market instruments -including, in particular, foreign Treasury bills, -- the Congress
would be taking an important new step to further strengthen the
international monetary system and the position of the dollar.
Clearly, perfection cannot be claimed for either the Federal
Reserve Act, which became law more than 50 years ago, or the
Federal Reserve System as it has evolved within the framework of
that law.
As in the past, the effective adaptation of the
Fed,~ral
Reserve to the needs of today and tomorrow will require that the
Congress be willing to search out and eliminate faults and anachronisms that hamper effective performance.
But, I would also
urge this Committee, in undertaking that necessary task, to
protect and preserve those elements in the structure of the
Federal Reserve that underlie its special strength and stature
at the center of our banking system.
000
UNITED STATES NET MONETARY GOLD
IRAaJ~rlOlS
WITH
FOREIGN COUNTRIES AND INTERNATIONAL INSTITUTIONS
January 1, 1963 - December 31, 1963
(In millions of dollars at $35 per fine troy ounce)
Negative figures represent net sales by the
United States· ositive fi ures net urchases
First
Second
Third
Fourth
Quarter Quarter Quarter
Quarter
1963
1963
1963
1963
Algeria
-15.0
--Argentina
-30.0
Austria
-20.0
-30.0
-32.1
Brazil
+28.4
+16.5
-.9
+28.2
Cambodia
-2.3
+3.2
Cameroon Republic
-1.9
Cent. Afr. Republic
-.7
Chad
Congo (Leopoldville)
Dahomey
Ecuador
Egypt
France
Gabon
Guinea
Iran
Israel
Madagascar
Mauritania
Mexico
Niger
Peru
Philippines
Rep. of Congo (Brazzaville)
Senegal
Spain
Syria
Tunisia
-.7
-3.1
-.4
-101.3
-.8
-2.3
-.5
-101.3
-.7
-30.1
-82.
+72.
+1.
-1.
-.
-3.
-.7
-101.3
-2.
-517.
-2.
-5.
---.8
---
-70.0
+24.9
-.7
-1.7
-60.0
-.1
-.1
-7.0
-2.3
-.8
-4.0
-.1
-4.
-.
-10.
-.1
+24,
-1.
-130,
-.1
Turkey
-8.5
+14.5
+1.0
United Kingdom
+106.5
+18.0
+74.0
Upper Volta
-.8
Uruguay
+8.0
Vatican
Yugoslavia
-.4
-.4
-.6
All Other
-.1
__-....._,1
- .8
Total
-96.1
-100.0
-180.5
Figures may not add to totals because of rounding.
---
---
-7.
-2.
-10.6
-.5
-------
ea1en'
Year
1963
-15.1
-2.
-2.8
-5.9
-.1
-.6
-213.8
---
-
-.1
-5.0
+130.8
+1.0
-.5
-1.5
-15.1
+2
+329
-t8
+1
--·1
·2
-391
TREASURY DEPARTMENT
March 5, 1964
FOR IMMEDIATE RELEASE
UNITED STATES FOREIGN GOLD TRANSACTIONS
FOR FOURTH QUARTER OF 1963
During the fourth quarter of 1963, the net sale of
monetary gold by the United States amounted to $15.1
million.
The first three quarters showed net sales of
$96.1 million, $100.0 million and $180.5 million,
respectively.
These transactions brought to $391.7 million the
net sale of monetary gold for the year as a whole.
The Treasury's quarterly report, made public today,
summarizes monetary gold transactions with foreign governments, central banks and international institutions for
Calendar 1963 by quarters (table on reverse side).
In addition to these net monetary sales of $391.7
million worth of gold to foreign entities, the U.S. had
net domestic sales of $69 million worth of gold for
industrial, professional and artistic uses.
Thus, the
total decrease in U.S. gold stock during Calendar 1963
was $461 million.
(OVER)
D-1158
TREASURY DEPARTMENT
March 5, 1964
FOR IMMEDIATE RELEASE
UNITED STATES FOREIGN GOLD TRANSACTIONS
FOR FOURTH QUARTER OF 1963
During the fourth quarter of 1963, the net sale of
monetary gold by the United States amounted to $15.1
million.
The first three quarters showed net sales of
$96.1 million, $100.0 million and $180.5 million,
respectively.
These transactions brought to $391.7 million the
net sale of monetary gold for the year as a whole.
The Treasury's quarterly report, made public today,
summarizes monetary gold transactions with foreign governments, central banks and international institutions for
Calendar 1963 by quarters (table on reverse side).
In addition to these net monetary sales of $391.7
million worth of gold to foreign entities, the U.S. had
net domestic sales of $69 million worth of gold for
industrial, professional and artistic uses.
Thus, the
total decrease in U.S. gold stock during Calendar 1963
was $461 million.
D-llS8
UNITED STATES NET MONETARY GOLD TRANSACTIONS WITH
FOREIGN COUNTRIES AND INTERNATIONAL INSTITUTIONS
January 1, 1963 - December 31, 1963
(In millions of dollars at $35 per fine troy ounce)
Negative figures represent net sales by the
United States' ositive fi ures net urchases
First
Second
Third
Fourth
Quarter Quarter Quarter
Quarter
1963
1963
1963
1963
Algeria
-15.0
Argentind
-30.0
Austria
-30.0
-20.0
-32.1
Brazil
+16.5
+28.4
-.9
+28.2
Cambodia
-2.3
+3.2
Cameroon Republic
-1.9
Cent. Afr. Republic
-.7
Chad
Congo (Leopoldville)
Dahomey
Ecuador
Egypt
France
Gabon
Guinea
Iran
Israel
Madagascar
Mauritania
Mexico
Niger
Peru
Phi lippines
Rep. of Congo (Brazzaville)
Senegal
Spain
Syria
Tunisia
Turkey
United Kingdom
Upper Volta
Uruguay
Vatican
Yugoslavia
All Other
Total
-.7
-3.1
-.4
-101. 3
-.8
-2.3
-.5
-101. 3
-.6
-213.8
-.7
-.7
-101.3
-2.8
-5.9
+24.9
-.7
-1. 7
-60.0
-.1
-.8
-4.0
-.~
-10.6
-.1
-.4
+14.5
+18.0
-.8
+8.0
-.4
-.1
-10.6
+24.7
-.7
-1.7
-130.0
-.1
-.1
-.4
-.5
+1.0
+74.0
-5.0
+130.8
+2.0
+329.3
-.8
+8.0
+1.0
+1.0
-.5
-1.9
-2.5
-391. 7
-.5
-8.5
+106.5
-7.0
-2.3
-.8
-.1
-.7
-3.1
-.8
-2.3
-2.2
-517.7
-.7
-2.8
-7.0
-70.0
-.7
-5.9
-2.3
-.8
-4.0
-.1
Calendar
Year
1963
-15.0
-30.0
-82.1
+72.2
+1.0
-1.9
-.6
__-....;.•. ;;,1
-.1
-.8
-96.1
-100.0
-180.5
Figures may not add to totals because of rounding.
-1.5
-15.1
-
- 2 -
Prl'S idl'n t J uhnson took of fice .
Be low and around the border is 't:h€
inscription from the President's address before the Joint Session
of Congress on November 27, 1963:
We will serve all the Nation,
a united people with a united purpose. - Lyndon B. Johnson.
The reverse ofllie medal is the work of Frank Gasparro, Assistant
Chief Sculptor of the Mint.
The Presidential Medal Series includes medals for all former
Presidents of the United States.
Individual medals or the entire
series may be purchased from the Philadelphia Mint.
000
LYNDON B. JOHNSON PRESIDENTIAL MEDAL
NOW ON SALE AT THE MINT
The Lyndon B. Johnson Medal has been added to the Presidential
Series of medals available for purchase from the Bureau of the Mint,
Miss Eva Adams, Director of the Mint announced today.
The Johnson Presidential Medal may be obtained from the
Superintendent, United States Mint, Philadelphia, Pennsylvania,
19130.
The cost is $3.00 including postage.
The medal is of
Mint bronze, and is three inches in diameter.
The front or obverse of the medal contains a likeness of the
President modeled by Gilroy Roberts, Chief Sculptor of the Mint.
Around the border is the inscription Lyndon B. Johnson.
The back or reverse has an adaptation of the Seal of the
President ot the United States in the center.
Above, around the
border, are the words, President of the United States.
Beneath
the eagle in the seal is November 22, 1963, the date upon which
TREASURY DEPARTMENT
WASHINGTON. D.C.
March 6, 1964
FOR IMMEDIATE RELEASE
LYNDON B. JOHNSON PRESIDENTIAL MEDAL
NOW ON SALE AT THE MINT
The Lyndon B. Johnson Medal has been added to the Presidential
Series of medals available for purchase from the Bureau of the Mint,
Miss Eva Adams, Director of the Mint announced today.
The Johnson Presidential Medal
Superintendent, United States Mint,
19130. The cost is $3.00 including
Mint bronze, and is three inches in
may be obtained from the
Philadelphia, Pennsylvania,
postage. The medal is of
diameter.
The front or obverse of the medal contains a likeness of the
President modeled by Gilroy Roberts, Chief Sculptor of the Mint.
Around the border is the inscription Lyndon B. Johnson.
The back or reverse has an adaptation of the Seal of the
President of the United States in the center. Above, around the
border, are the words, President of the United States. Beneath
the eagle in the seal is November 22, 1963, the date upon which
President Johnson took office. Below and around the border is
an inscription from the President's address before the Joint
Session of Congress on November 27,1963: We will serve all the
Nation, - a united people with a united purpose. - Lyndon B.
Johnson. The reverse of the medal is the work of Frank Gasparro,
Assistant Chief Sculptor o[ the Mint.
The Presidential Medal Series includes medals for all
former Presidents o[ the United States. Individual medals or
the entire series may bv purchased [rom the Philadelphia Mint.
oUo
D-1159
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I .... '
'I
,.~....
"t.
_.!.
-.i,
,.
.: Vf]
\!':..
'.
~
- .. .:.'-
..'\. .
.i1:
-"'I'
•
'- '"
•
);22.<XV
125,5$8,000
2,258,000
12,9)9,000
11,nO,OOO
1),6'4,CXX>
61,lt}8,OOO
S,4S9,<XX>
1l,102,<M>
:) ,5;13,000
6,)18,000
)7,'JS2,OOO
HOO ,)2),cm
t.en:Je~t: ~c~cr~t..f~(l at. tc<: d.VC1"8~. price 01 99.lQ
:i t '~ite <Average price ot 98.121
.~. 1 . - - . ,""
..-,
<~.
7r~
·.A'.mt ~ ..,lv .....
d, t......
r.UI'Il •
~
~~_
>:~u. ' ........ ~
l'";Ju t ...
v
ila
"
te::~:Eh"''';' ,\':"'::e:'Jt~!j
"'::"
\
_
,I...
1
••
',J
.... "
_. 1 • .'~,::r ~"3 ~l-.;.~,.. Gills, and 3.844, tor -.
" :..L.:} .:l..~t'l :~')")~1Jd ~r: to~,,:,':C of bank i.U.COunt vlUl t
.J.' L .'" ;JL~.l;; p.:~ •. r.:."lD ",t natl.:.t'i ty rather thaD t.bI .
::lct,'•.l::' ~-:U~;:>i;;r ;)1' c~.a" 0 :'elated t.o a )6O-dal ,.,
.;, .,:, >::;, u~t (.,-on~!G .~t"; \.'O('!"uted in tenu of 11.. ,.:.dJ';. t ,.e; :~·z:l:~'t.'r Cr~4i.Js re:;aining 11\ an ~
.. ..;;.
,.;;. L :L~' t :'11] ~Qrixl, wit.:. aeciannual ~
TREASURY DEPARTMENT
FOR RELEASE A. M. NEWSPA.PERS,
Tuesday, March 10, 1964.
March 9, 1964
RESULTS OF TREASURY'S WEEKLY BILL OFFERING
The Treasury Department announced last evening that the tenders for two series of
Treasury bills, one series to be an additional issue of the bills dated December 12,
1963, and the other series to be dated March 12, 1964, which were offered on March 4,
were opened at the Federal Reserve Banks on March 9. Tenders were invited for
$1,)00,000,000, or thereabouts, of 91-day bills and for $900,000,000, or thereabouts of
182-day bills. The details of the two series are as follows:
'
RANGE OF ACCEPTED
CCMPETITIVE BIDS:
91-day Treasury bills
maturing June 11, 1964
Approx. Equiv.
Price
Annual Rate
:
182-day Treasury bills
maturing September 10, 1964
Approx. Equiv.
Price
Annual Rate
98.130
High
99.111 a/
3.517%
3.699%
98.116
Low
99.104 3.545%
3.727%
98.122
Average
99.107
3.534% !/
3.715%
a/ Excepting one tender of $100,000
- 28% of the amount of 91-day bills bid for at the low price was accepted
9% of the amount of 182-day bills bid for at the low price was accepted
Y
TOTAL TENW...RS APPLIED FOR AND ACCEPTED BY FEDERAL RESERVE mSTRICI'S:
District
Boston
New York
Philadelphia
Cleveland
Richmond
Atlanta
Chicago
St. !Duis
Minneapolis
Kansas City
Dallas
San Francisco
TOTAlS
I Includes
AEElied For
i 26,724,000
1,616,384,000
30,693,000
27,114,000
16,904,000
33,871,000
240,127,000
35,051,000
21,026,000
27,820,000
26,078,000
97,2503,2000
$2,199,295,000
AcceEted
$ 16,724,000
849,994,000
15,693,000
26,514,000
16,904,000
32,871,000
182,247,000
28,331,000
20,666,000
25,820,000
18,358,000
65,2903 2 00
$1,300,025,000
°
··
~
:
··
:
£/
AEElied For
3,622,000
$
1,381,258,000
7,308,000
17,489,000
11,810,000
13,624,000
122,423,000
12,459,000
11,102,000
8,593,000
10,318,000
57,2519,2000
$1,657,525,000
AcceEted
$ 3,622,000
725,558,000
2,258,000
12,939,000
il,710,000
13,624,000
61,188,000
5,459,000
ll,102,000
8,593,000
6,318,000
37,2952,2000
$900,323,000
E/
$251,410,000 noncompetitive tenders accepted at the average price of 99.107
I Includes $64,614,000 noncompetitive tenders accepted at the average price of 98.122
I On a
coupon issue of the same length and for the same amount invested, the return on
these bills would provide yields of 3.61%, for the 91-day bills, and 3.84%, for the
182-day bills. Interest rates on bills are quoted in tenus of bank discount with the
return related to the face amount of the bills payable at maturity rather than the
amount invested and their length in actual number of days related to a 360-day year.
In contrast, yields on certificates, notes, and bonds are computed in tenus of interest on the amount invested and relate the number of days remaining in an interest
payment period to the actual ~umber of days in the period, with semiannual compounding
if more than one coupon period is involved.
D-1160
~.!arch
Ie, 1961.;
~~'X~~~
:!'·~TJ:.:D
STATES A1':)
PP'~SI01J
i s(~
a.it '
'c
l-/CtJDll~J!.S
TO
r;E.ClIS~
F?CPCSEIl
C? ::'''lCC'''[ TAX CO~~v'E}!T~ON
;ss i o!~s a2"'e to Lc }]eld in the near future between Honduras
t'
COI~\(~ltiOl~
j
-'-ed
~~-:::a'~es
':etl-leen
t~le
looking toward a modification of tl1e existing
two countries for the avoidance of double
i;axatio:. a(Jd +:1'e prevention of fiscal evasion with respect to taxes
or.
inrco~ne.
t::e Treasury Department announced today.
TIle principal purpose of the discussions will be to make such
general revisions in the convention as seem appropriate in the light
of
t~e
admi:1istrative experience of Honduras with the convention,
including
1"
vision of the permanent establishment article.
Tnterested taxpayers in the United States are invited to submit
V;ei I" vie"\-Is to StaYlley S. Surrey, Assistant Secretary of the Treasury,
Viashington 25, D. C. on those matters which they believe should be
COllsidered in the forthcoming discussions.
of comments is I,jarch 31.
Dea.dline for the receipt
TREASURY DEPARTMENT
March 10, 1964
FOR IMMEDIATE RELEASE
UNITED STATES AND HONDURAS TO DISCUSS PROPOSED
REVISION OF INCOME TAX CONVENTION
Discussions are to be held in the near future between
Honduras and the United States looking toward a modification
of the existing convention between the two countries for the
avoidance of double taxation and the prevention of fiscal
evasion with respect to taxes on income, the Treasury
Department announced today.
The principal purpose of the discussions will be to make
such general revisions in the convention as seem appropriate
in the light of the administrative experience of Honduras
with the convention, including revision of the permanent
establishment article.
Interested taxpayers in the United States are invited
to submit their views to Stanley S. Surrey, Assistant
Secretary of the Treasury, Washington 25, D. C. on those
matters which they believe should be considered in the
forthcoming discussions.
Deadline for the receipt of comments
is March 31.
000
D-116l
?RO?OS2:TJ DRM;T uf' fRESS RELEASE
Treasu:rj Career Homen to Aclvise Secretary
Secretary Dillon has appointed a committee of nine career women
'\-Tho occ:upy key positions in Treasury bureaus to serve him in an advisory
capacity as a means of furthering the President's proe;r8.m for assuring
equal employment 0-;:Jp0rtuni t:, for women i!l Treasury.
C~_the
Treasury
}!mR:SO-:r'y-Gomodttee on the Status of Women in the
Departmen~
Foreign
Asset~~
Award.
Qtl:J,~.
Dr. l<1a.rgaret H. Schwartz, Director, Office of
Control, recently honored with the Federal Woman's
memlHitr&
ot:
the Committee are:
Eve. K. Haughey
Office of Debt Analysis
Offic~ of the Secretary
Charlotte T. Lloyd
Office of the General Counsel
Esther C. L8w-ton
Office of Personnel
Office of the Secretary
Betty G. McIntyre
Bureau of Customs
Winifred Loring
Bureau of Ene;raving and Printing
Mary E. Taylor
Internal Revenue Service
Marjorie L. Gilchrast
Savings Bonds Division
Elizabeth Z. Huntley
BU}'eHu of Accounts
The
a.
charged with:
SugGesti&e measures for ~king the program for equal employment
opportunity for women more effective
.
~~~
b.
SerVlng as a focal point for 'pl;Qga=am reports on the program; and
c.
Stir:ulating positive ections to encourage the emplo;yment of
W0men '\-Therever appropriate and provide$ info:nnation to the
~epartment on the values of full utilization of skills of
l:O!jeYl.
TREASURY DEPARTMENT
FOR IMMEDIATE RELEASE
TREASURY CAREER WOMEN TO ADVISE
SECRETARY DILLON
Treasury Secretary Douglas Dillon has appointed a committee
of nine career women who occupy key positions in Treasury bureaus
to serve him in an advisory capacity as a means of furthering the
President's program for assuring equal employment opportunity for
women in the Federal government.
Dr. Margaret W. Schwartz, Director, Office of Foreign Assets
Control, recently honored with the Federal Woman's Award, was
named chairman of the group.
The new Advisory Committee on the Status of Women in the
Treasury Department is specifically charged with:
a.
Suggesting measures for making the program
for equal employment opportunity for women
more effective within the Treasury;
b.
Serving as a focal point for progress
reports on the Treasury's program; and
c.
Stimulating positive actions to encourage
the employment of women wherever appropriate
and provide information to the Department on
the values of full utilization of skills of
women.
Other members of the Committee are:
Eva K. Haughey
Office of Debt Analysis
Office of the Secretary
Charlotte T. Lloyd
Office of the General Counsel
Esther C. Lawton
Office of Personnel
Office of the Secretary
Elizabeth Z. Huntley
Bureau of ftecounts
D-1162
Betty G. McIntyre
Bureau of Customs
Winifred Loring
Bureau of Engraving
and Printing
Mary E. Taylor
Internal Revenue Service
Marjorie L. Gilchrest
Savings Bonds Division
MINT AGAIN DISCONTINUES ACCEPTANCE OF PROOF COIN ORDERS
The Bureau of the Mint announced today that the demand for proof
coin sets has been so great it has had to again discontinue acceptance
of proof coin orders. In the past two, days alone over !Do, 000 pieces
of mail for proof coins has reached the Mint at Philadelphia. Many
of these orders must be turned back.
The total capacity of the Mint to produce proof coins is about four
million sets. After the assassination of President Kennedy orders
poured into the Mint with the result that on January 10, the Mint
announced discontinuance of order acceptances. Betweei.1 November 1,
1963 and January 10, 1964, the orders received amounted to over
3. 9 million sets. After processing all these orders and making the
decision to reduce 100 sets per order to 75, this made approximately
400, 000 additional sets available to small collectors. Only two weeks
ago proof coin orders were again reopened.
The Director of the Mint, Miss Eva Adams, said today it is
evident from the flood of mail received the past two days, we have
simply reached the limit of the orders we can handle during the balance
of this calendar year.
-000-
March 10, 1964
MINT AGAIN DISCONTINUES ACCEPTANCE OF
PROOF COIN ORDERS
The Bureau of the Mint announced today it is again
discontinuing acceptance of proof coin orders for this year.
Orders for the sets were stopped on January 10, 1964,
at which time more than 3.9 million had been received.
Mint capacity provides for the production of about 4 million
sets this year.
After processing the orders received and
reducing large orders to a smaller number of sets,
approximately 400,000 additional sets then became available
for individual collectors.
As a result, proof coins orders
were again reopened two weeks ago.
Orders received since
then have exceeded the additional sets available.
The Mint therefore can no longer accept orders for
proof coins this year.
000
TREASURY DEPARTMENT
March 10, 1964
FOR IMMEDIATE RELEASE
MINT AGAIN DISCONTINUES ACCEPTANCE
OF PROOF COIN ORDERS
The Bureau of the Mint announced today it is again
discontinuing acceptance of proof coin orders for this year.
Orders for the sets were stopped on January 10, 1964,
at which time more than 3.9 million had been received.
Mint capacity provides for the production of about 4 million
sets this year.
After processing the orders received and
reducing large orders to a smaller number of sets,
approximately 400,000 additional sets then became available
for individual collectors.
As a result, proof coin orders
were again reopened two weeks ago.
Orders received since
then have exceeded the additional sets available.
The Mint therefore can no longer accept orders for
proof coins this year.
000
D-1163
- 3 -
and exchange tenders vill 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.
Tbe income derived from Treasury bills, whether interest or gain from the ole
or other disposition of the bills, does not have any exemption, as such, and
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 are subject
to estate , inheritance, gi:f't or other excise taxes, whether Federal or sta.te, 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 actu.ally
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.
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 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 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
Subject to these reservations, noncompetitive tenders for $ 200,000 or
~
less for the additional bills dated December 19, 1963
days remainfinal.
j(j1l)3
cepted competitive bids for the respective issues.
Settlement for accepted ten-
ders in accordance with the bids must be made or completed at the Federa.l Reserve
Banks on
>!arch
&
1964
, in cash or other immediately available funds or
in a like face amount of Trea.sury bills maturing
Marc~ 1964
Cash
TREASURY DEPARTMENT
Washington
March 11, 1964
FOR IMMEDIATE RELEASE,
-{~r;r;x;caxvxccrv
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 $ 2,200,000,000 , or thereabouts, for
cash and in exchange for Treasury bills maturing
of $
2,202~,000
C*
March _
, in the amount
1964
, as follows:
91 -day bills (to maturity date) to be issued
at<
March llix.1964
~
in the amount of $ 1,300,000,000 , or thereabouts, represent-
stYmX
ing an additional amount of bills dated December 19. 1963
**
and to mature ~J~un~e~18~~~1~9~6~4~____ ' originally issued in the
amount of $
800~tOOO
,the additional and original bills
to be freely interchangeable.
182 -day bills, for $ 900 , O~OO
, or thereabouts, to be dated
UQX
March
~
X
1964
, and to mature
September 17. 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 bea.rer 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 standard time,
Monday. March 16. 1964
~
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 tM
price offered must be expressed on the basis of 100, with not more than three
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
$2,200,000,000, or thereabouts, for cash and in exchange for
Treasury bills maturing March 19,1964,
in the amount of
$2,202,159,000, as follows:
91-day bills (to maturity date) to be issued Maych 19, 1964,
in the amount of $1,300,000,000, or thereabouts, representing an
additional amount of bills dated December 19,1963, and to
mature June 18, 1964,
originally issued in the amount of
$800,163,000,
the additional and original bills to be freely
interchangeable.
182-day bills, for $900,000,000,
or thereabouts, to be dated
and to mature September 17, 1964.
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 ih 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 It'ederal Reserve Banks and Branches
up to the closing hour, one-thirty p.m., Eastern Standard
time, Monday, March 16, 1964. .
Tenders will not be
received at the Trl:!asury De~artment, Washington. Each tender must
be for an even multiple of ~l,OOO, 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
~serve Banks 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
3ubmit tenders except for their own account. Tenders will be received
fithout deposit from incorporated banks and trust companies and from
'esponsible and recognized dealers in investment securities. Tenders
'rom others must be accompanied by payment of 2 percent of the face
wount of Treasury bills applied for, unless the tenders are
lccompanied by an express guaranty of payment by an incorporated bank
r trust company.
D-1164
- 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 Department of the amount
and price range of accepted bids. Those submitting tenders will be
advised of the acceptance or rejection thereof. The Secretary of
the Treasury expressly reserves the right to accept or reject any or
all tenders, in whole or in part, and his action in any such respect
shall be final. Subject to these reservations, noncompetitive
tenders for $200,000 or less for the additional bills dated
December 19,1963,(91-days remaining until maturit¥ date on
June 18, 1964)
and noncompetitive tenders for ~100,OOO
or les8 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 March 19, 1964,
in cash or other immediately available funds or in a like face
amount of Treasury bills maturing March 19,1964.
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 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, inheritance, gift or other excise taxes, whether Federal or
State, but are exempt from all taxation now or hereafter imposed on
the principal or interest thereof by any State, or any of the
posseSSions of the United States, or by any local taxing authority.
For purposes of taxation the amount of discount at which Treasury
bills are originally sold by the United States is considered to be
interest. Under Sections 454 (b) and 1221 (5) of the Internal
Revenue Code of 1954 the amount of discount at which bills issued
hereunder are sold is not considered to accrue until such bills are
sold, redeemed or otherwise disposed of, and such bills are excluded
from consideration as capital assets. Accordingly, the owner of
Treasury bills (other than life insurance companies) issued hereunder
need include in his income tax return only the difference between
the price paid for such bills, whether on original issue or on
subsequent purchase, and the amount actually received either upon
sale or redemption at maturity during the taxable year for which the
return is made, as ordinary gain or loss.
Treasury Department Circular No. 418 (current revision) and this
notice prescribe the terms of the Treasury bills and govern the
conditions of their issue. Copies of the circular may be obtained from
any Federal Reserve Bank or Branch.
000
T."'~stJRY
DJl:Pl..I{~_;:!·
Washington, D. C.
IMMEDIA TE RELEASE
0-1165
THURSDAY, MARCH 12,1964
?F2LIMINARY DATA on IMPORTS FOR CONSUMPTION 0F UNMA.NtJFAC~D LEAD .L'fD ZllIG CHARGEABLE TO THE QCOTAS ESTABLISH3:l
;1I PRESIDENTT.wU. ?ROCLAMA.TICN NO. 3257 OF SEPTEMBER 22~ 1958.. AS MODIFIED BY THE TARIIT SCHEDULES OF TIlE
UNITED STATES, WHICH
Production
~,,--- ....... ~--
Australia
!;ITEGTIVE AUGUST 31, 1963.
QUARTERLY QUOTA. PERIOD -
January 1
March 31, 1<]64
IMPORTS _
January 1
March 6, 1964 (or as noted)
ITEM 925.01Country
of
BE~
Lead-bearing ores
and III8. terials
Unwrcught lead and
lead waste and scrap
; Cuarterly Q U o t a ; Cfuaiteriy .:nota.
: Dutiable
Imports: Dutiablf lead
read
?oUlidJ)
11,220,000
11,220,000
ITEM 925.02-
!TIM 925.03-
pounds}
22,540,000
.
Zinc-bearing ores and
materials
.; Cuarterry-o:u:-ota
Imports: ~inc Content
. \"o\lllds)
~crts
ITEM 925.04-
;UDNrought zino {except alloys
: of zinc and zinc dust) and
zino waste and scrap
:C>'liaOrterl? ouo-ta
By Weight
~peu:rral!)
~Dcrts
21,020,317'"
Bel~ium
and
Luxemburg (tot.al.)
Bolivh.
Canada
5,040,000
13,440,000
5,537,598··
15,920,000
15,260,360"
66,400,000
66,480,000
36,880,000
16,160,000
16,160,000
12,880,000
31,401,456
27,415,106
9,969,922"
70,480,000
49,275,523
6,320,000
3,918,145
35,120,000
17,653,846
3,760,000
3,261,493"
5,440,000
5,2Ql,136··
6,080,000
6,080,000
Republio of the Congo
(fennerly Belgian Congo)
14,800,000
14,880,000
15,760,000
:'ugos1aTia.
All o+.her ~:tp
countries (total)
37,840,000
3,600,000
~,1exico
"'\:"n. So. Africa
7,520,000
5,040,000
Italy
Peru
7,520,000
6,560,000
2,729,830"
6,080,000
6,393,009"
6,080,000
17,840,000
17,840,000
-See Part 2, Appendix to Tariff Sohedu1ea •
• -Im~ort8 as of Maroh 9, 1964 •
.. ··Un on of South Africa is listed in the Tariff Schedules.
This oountry is now called the Republic of South Africa.
T:':::AStJRY DEI'A..~'!U£:r:i:l'
Washington, D. C.
ThNEDIATI: RELl:ASE
D-1165
THURSDAY, MARCH 12,1964
PRELIMINARY DATA ON IMPORTS FOR CONSUMPTION Q1i' UNMANUFAC'IURED LEA.D AND ZINC CHARGEABLE TO THE QUOTAS ESTABLISHED
BY PRESIDENTIAL PROCI...AMA.TICN NO. 3257 OF SEPTEMBER 22.1. 1958.1. AS MODIFED BY THE TARIFF SGB..EOOLES OF 'l1IE
UNITED STATI:S, WlUGB BJ!;CAME J!;ITECTIVE AUGUST 31, 1963.
QUARTERLY QlJOTA PERIOD IYPORTS _
..:
ITEM 925.01Country
Lead-be~
ores
and D1a:teria1s
of
January 1 - March 31, 1964
January 1 - March 6, 1964 (or as noted)
ITEM 925.03-
ITEM 925.04·
ITEM 925.02-
Zinc-bearing ores and
materials
Unwrcug1:lt lead IUld
lead waste and scrap
ProductioD
;Unwrought zino {except alloys
: of zinc and zinc dust) IUld
zinc was te and scrap
:
~arter~y
?0UD4I)
Australia
·:tlWi..:fterly
QUOta
: Dutiable tead
1l,Z20,OOO
'-llob~
Imports: l:utiab1r lead
11,220,000
--- -----:ouarTe~ota
Imports: ";inc Content
Pound!)
22,540,000
fJtiota.
By Weight
p"o\Urc!'S)
~~~-~-~er1:y-
"""\.ounds)
Impcrts:
IDPorts
21,020,317·"
Belgium and
Luxemburg (total)
Eo1ivia
5,040,000
5,537,598"
15,92.0,000
15,260,360"
66,480,000
66,480,000
36,800,000
Mexico
16,160,000
Peru
16,160,000
12.880,000
31,401,456
27,415,106
9,969,922'"
70,480,000
49,275,523
6,320,000
3,918,145
35,120,000
17,653,846
3,760,000
3,261,493··
5.440,000
5,201,136··
6.080.000
6,090,000
Republic of the Congo
(formerly Belgian Congo)
·-:-n. So. Africa
lA,aeo.ooo
14,880,000
15.760.000
YugoslaYia
o~her
37,840,000
3,600,000
Italy
All
7,520,000
5,040,000
13,440,000
Canada
7,520,000
nnt.p
countries (total)
6.560.000
2,729,930"
6,080,000
6,393,009· •
6,080,000
17,840,000
17,840,000
-See Part 2, Appendix to Tariff Sobeclul.e8.
--Imnorta a8 of Maroh 9, 1964.
···Uulon of South Africa is listed in the Tariff Schedules.
PREPARED Dl 'DIE lIOREA.t1 OF CUS'l'OG
This oountry is now called the Republic of South Africll. o
- 2-
COTTON WASTES
(In pounds)
COTTON CARD STRIPS made from cotton having a staple of less than 1-3/16 inches in length, COMBER
WASTE, LAP WASTE, SLIVER WASTE, AND ROVING WASTE, WHETHER OR NOT MANUFACTURED OR OTIIERWISE
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 1-3116 inches or more
in staple length in the case of the following countries: United Kingdom, France, Netherlands,
Switzerland, Belgium, Germany, and Italy:
Country of Origin
United Kingdom ••••••••••••
Canada •••••••••••••••••
Fr ance ••..•..••.....•.••..
India and Pakistan ••.•••••
Netherlands •••••••••••••••
Switzerland •••••••••••.•••
Belgium..........
• •••••
Japan........
• •••••
China........
• •••.••••
Eg yp t •••••••••••••••••••••
Cuba ••••••••••••••••••••••
Germany.............
. ••
Italy...............
• ••
Other, including the U. S.
Established
TOTAL QUOTA
Total Imports
Sept. 20, 1963, to
March 9, 1964
Established
33-1/3% of
Total Quota
Imports
Sept. 20, 1963,
to March 9, J 96l,
4,323,457
239,690
227,420
69,627
68,240
44,388
38,559
341,535
17,322
8,135
6,544
76,329
21,263
728,424
239,690
199,417
19,284
1l,249
34,147
33,022
59,000
1,441,152
109,327
75,807
55,151
35,738
25,443
7,088
5,482,509
1,359,971
1,599,886
11
22,747
14,796
12,853
164,478
11
Included in total imoorts. column 2.
The country designations listed in thi.s press release are those specif'ied in Presidential Proclamation
No. 2351. 01" September 5_ 1.939, as modit'ied by" the Tari!':f Schedules o:f the United States. Since that
date the names 01" certain countries have been changed.
The outmoded names are being retained because
~ .L_" - ""-"-Anhic:a].. COverage and have no political. connotation.
TREASURY DEPARTMENT
Washington, D. C.
IMMEDIATE RELEASE
THURSDAY, MARCH 12,1964
D-1166
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 <other than linters) (in pounds)
Cotton under 1-1/8 inches other than rough or harsh under 3/4"
Imports September 20, 1963 ~March 9. 196~
Country of Origin
Egypt and Sudan •••••••••••••
Peru ••.•••••••••••••••••••.•
India and Pakistan ••••••••••
China •••••.•••••••••••••••••
Mexico •••••••••••••••••••••.
Brazil ••••••••••••••••••••••
Union of Soviet
Socialist Republics •••••••
Argentina •••••••••••••••••••
Haiti •••••••••••••••••••••••
Ecuador •••••••••••••••••••••
!I
Established Quota
Imports
Country of Origin
783,816
247,952
2,003,483
1,370,791
8,883,259
618,723
628,215
11,294
159,692
Honduras •••••••••••••.••••••
752
Paraguay •••••••.••••••••••••
871
Colombia •••••••••••••••••••.
Iraq ••.•..•.••.•...•..•.•..•
British East Africa •••••••••
Indonesia and Netherlands
New Guinea •••••.••••••••••
l/British W. Indies •••••••••••
Nigeria •••••••••••••••••••••
I/British W. Africa •••••••••.•
Other, including the U.S ••••
124
195
2,240
8,88),259
&xJ,OOO
475,124
5,203
237
9,333
Established Quota
71,388
21,321
5,377
16,004
Except Barbados, Bermuda, Jamaica, Trinidad, and Tobago.
11 Except Nigeria and Ghana.
Cotton 1-1/S" or more
Established Yearly Quota - 45,656.420 Ibs.
Imports August 1. 1963 -,March 9, 1964
Staple Length
1-3/8" or more
1-5/32" or more and under
1-3/S" (Tanguis)
Allocation
39,590,778
Imports
39,590,778
1.500,000
8~,759
I-lIS" or more and under
!-:;\lf~"
_
4_","""
""4?
,.
c:.~c:.
hJ.",,>
Imports
-2-
CO'ITON WASTES
(In pounds)
COTTON CARD STRIPS made from cotton having a staple of less than 1-3/16 inches in length, COMBER
WASTE. LAP WASTE, SLIVER WASTE, AND ROVING WASTE, WHETHER OR NOT MANUFACTURED OR OTIfERWISE
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 1-3116 inches or more
in staple length in the case of the following countries: United Kingdom, France, Netherlands,
S~tzerland, Belgium, Germany, and Italy:
Country of Origin
United Kingdom ••••••••••••
Canada ••••••••••.•••••••••
France •••••••••••••.••••••
India and Pakistan ••••••••
Netherlands •••••••••••••••
Switzerland •••••••••••••••
Belgium ••••....••.•..•.•••
Japan •••••••.••••••••.•.••
China •••••••••••••.•..••••
Egyp t ••••••••.••••••••••••
Cuba •••••••••••.••••••••••
Gex-ma.ny •••••••••••••••••••
Italy •••••••••••••••••••••
Other, including the U. S.
Es tablished
TOTAL QOOTA
Total Imports
Sept. 20, 1963, to
Mar~ 9, 1964
Established
33-1/3% of
Total Quota
Imports
11
Sept. 20, 1963, to March 9, J9N.
4,323,457
239,690
227,420
69,627
68,240
44,388
38,559
341,535
17,322
8,135
6,544
76,329
21,263
728,424
239,690
199,41.7
19,284
1l,.249
34,147
33,022
59,000
1,441,152
109,327
75,807
55,151
35,738
25,443
7,088
5,482,509
1,359,m
1,599,886
22,747
14,796
12,853
164,478
Included in t.ot.a.l- iumorts. col.~ 2.
The country deaign&Uons- listed in this press release are those specified in President.ial Proc.1amat.ion
Ro. 2351 or Septe.ber 5. 1939. as modified by the Tarif"f" Schedul.es of" the United States. Since that
date the names or certain countries have been changed.
The outu:xled names are being retained because
11
o~ t.he:l.r geographi..cal. coverage and. have DD political. connotation.
-2-
Commodity
··:Period and Quantity
·.
: Unit:
Imports
:
of:
as of
:Quantity: Feb. 29. 196
Absolute Quotas:
Butter substitutes containing
over 45% of butterfat, and
butter oil •••••••••••••••••••••• Calendar Year
1,200,000 Pound
Quota Fille
Fibers of cotton processed
12 mos. from
but not spun •••••••••••••••••••• Sept. II, 1963
1,000 Pound
53
Peanuts, shelled or not shelled,
blanched, or otherwise prepared
or preserved (except peanut
12 mos. from
butter) ••••••••••••••••••••••••• August 1, 1963
1,709,000 Pound
Quota Fille
11 Imports
through March 9, 1964.
TREASURY DEPAR'IMENT
Washington
IMHED lATE RELEAS E
TrlURSDAY, MARCH 12,1964
D-1167
--------~----------~~
The Bureau of Customs announced today preliminary figures on imports for consump
tion of the following commodities from the beginning of the respective quota periods
through February 29, 1964:
Commodity
·
··
Period and Quantity
: Unit :
Imports
:
of
:
as of
: Quanti ty:Feb. 29. 19E
Tariff-Rate Quotas:
Cream, fresh or sour ••••••••••••• Calendar Year
1,500,000 Gallon
162,904
Whole Milk, fresh or sour •••••••• Calendar Year
3,000,000 Gallon
3
Cattle, 700 Ibs. or more each
Jan. 1, 1964(other than dairy cows) •••••••• March 31, 1964
120,000 Head
5,543
12 mos. from
Cattle less than 200 1bs. each ••• April 1, 1963
200,000 Head
55,117
Fish, fresh or frozen, filleted,
etc., cod, haddock, hake, pollock, cusk, and rosefish ••••••• Calendar Year
Quota Filled
Tuna Fish •••••••••••••••••••••••• Calendar Year
24,861,670 Pound
To be
announced Pound
White or Irish potatoes:
Certified seed ••••••••••••••••• 12 mos. from
Other •••••••••••••••••••••••••• Sept. 15, 1963
114,000,000 Pound
45,000,000 Pourrl
35,986,900
10,881,614
Knives, forks, and spoons with
Nov. 1, 1963stainless steel handles •••••••• Oct. 31, 1964
11
69,000,000 Pieces
4,234,009
51,309,)93
Imports for consumption at the quota rate are limited to 6,215,417 poums during
first three months of the calendar year.
TREASURY DEPAR1MENT
Washiflf1,ton
IMMED lATE RELEAS E
THURSDAY, MARCH 12,1964
D-1167
__------------------~=r--~
The Bureau of Customs announced today preli.m.inary figures on imports for consumption of the following corranodi ties from the beginning of the respective quota periods
through February 29, 1964:
:
Commodity
Period and Quantity
Uni t :
Imports
of
as of
:QuantitYiFeb. 29. 1964
Tariff-Rate Quotas:
Cream, fresh or sour ••••••••••••• Calendar Year
1,500,000 Gallon
162,904
Whole Milk, fresh or sour........ Calendar Year
3,000,000 Gallon
3
Cattle, 700 Ibs. or more each
Jan. 1, 1964(other than dairy cows) •••••••• March 31, 1964
120,000 Head
5,543
12 mos. from
Cattle less than 200 Ibs. each ••• April 1, 1963
200,000 Head
55,117
Fish, fresh or frozen, filleted,
etc., cod, haddock, hake, pollock, cusk, and rose fish....... Calendar Year
24,861,670 Poand
Quota Filled
Tuna Fish •••••••••••••••••••••••• Calendar Year
To be
announced Pound
4,234,009
114,000,000 Pound
45,000,000 Pourrl
10,881,614
White or Irish potatoes:
Certified seed ••••••••••••••••• 12 mos. from
Other •••••••••••••••••••••••••• Sept. 15, 1963
Knives, forks, and spoons with
Nov. 1, 1963stainless steel handles •••••••• Oct. 31, 1964
11
69,000,000 Pieces
.
11
35,986,900
51,309,393
Imports for consumption at the quota rate are limited to 6,215,417 pourrls during the
first three months of the calendar year.
-2:
Conmodity
:Period and Quantity
Unit
Imports
of:
as of
; Qlanti ty: Feb. 29. 196it
Absolute QuotAS:
Butter substitutes containing
over 45% of butterfat, and
butter oil •••••••••••••••••••••• Calendar Year
Fibers of cotton processed
1,200,000 Pound
Quota Filled
12 mos. from
but not spun •••••••••••••••••••• Sept. ll, 1963
1,000 Pound
Peanuts, shelled or not shelled,
blanched, or otherwise prepared
or preserved (except peanut
12 mos. from
bu t ter ) ••••••••••••••••••••••••• August 1, 1963
11
Imports through March 9, 1964.
0-1167
1,709,000 Pound
Quota Filled
TREASURY DEPAR'IMmT
Washington
IMM.ED lATE RELEASE
THURSDAY, MARCH 12,1964
D-1168
The Bureau of Customs has announced the following preli.mina.ry figures
showing the imports for consumption from January 1, 1964, to February 29, 1964,
inclusive, of commodities under quotas established pursuant to the Philippine
Trade Agreement Revision Act of 1955:
Commodity
·
··
Established Annual
~ota Quantity
·
···
Unit
of
Quantity
· Imports
as of
· February
29. 1964
Buttons •••••••••••••
680,000
Cigars ••••••••••••••
160,000,000
Number
Coconut oil •••••••••
358,400,000
Pound
llO,968,786
Cordage •••••••••••••
6,000,000
Pound
841,871
Tobacco •••••••••••••
5,200,000
Pound
349,647
Gross
25,837
1,970,408
TREASURY DEPAR'lHEXT
Washington
IMMFDlATE RELEASE
THURSDAY, MARCH 12,1964
D-1168
The Bureau of Customs has announced the following prelim1.nary figures
showing the imports for consumption from Janu8l'7 1, 1964, to February 29, 1964,
inclusive, of commodities under quotas established pursuant to the Philippine
Trade Agreement Revision Act of 1955:
Commodity
••
••
••
Established Annual
Quota Quantity
••
••
••
Unit
of
Quantity
Gross
Imports
••
••
as or
•• FebruarY 29. 1964
Buttons •••••••••••••
680,000
Cigars ••••••••••••••
160,000,000
Number
Coconut oil •••••••••
358,400,000
Pound.
llO, 968, 786
Cordage •••••••••••••
6,000,000
Pound
841,871
Tobacco •••••••••••••
5,200,000
Pound
349,647
25,837
1,970,408
TREASURY DEPARTMENT
March 12, 1964
lOR IMMED lATE RELEASE
TREASURY MARKET TRANSACTIONS IN FEBRUARY
During February 1964, market transactions in
direct and guaranteed securities of the government for Treasury investment and other accounts
resulted in net purchases by the Treasury Department of $101,145,000.00.
000
D-1169
TREASURY DEPARTMENT
March 12, 1964
EOR
IMMEDIATE RELEASE
TREASURY MARKET TRANSACTIONS IN FEBRUARY
During February 1964, market transactions in
direct and guaranteed securities of the government for Treasury investment and other accounts
resulted in net purchases by the Treasury Department of $101,145,000.00.
000
D-1169
STATllTORY DEBT LIMITATION
\t'ashin~ton, ~laI'
:\ s of
13 ~
1964
l ,d '( ",nd I illert\" I\llfHt -\{"t, a . . amended, l'rovidc·o;; that (he face amount of ohligarinns isslIcd under authori(\· of
!II." \' f
.In,j rill 1.11 (" ,\rTH~llnf p( pl)li,e,Ulllll" ,gll,H,Hlf('{'t! a .... [0 principal anti in('rt'<;;( by (h(· {lnitc{l Sta('~ (except ,c;.uch ~uluani("('d
,d.I,(.""~,,, ." Ill.". I,.. h .. LI h\ rh" ~(·tr"r.H\ "f Ihe )'rea'",,'), :':;h.llillol ,·xc('(·d ;n rh ... a~Rr('..,al(' S2H'i,OOO,OOOIOOO (.An of Junr
,II, 11)',,'1., ....... ( , ' (Irit' ~ I. . . ('(: -c:; .... h), I.Hll~{,\nth~lg: iI.t <lnr nne tIme .. I-or purpo ....cs of rhls s('~·tlnn ,he CllrfCrH fet emption va,luc Ilf
.111\
,.t,II,L:.ltlllfl j ........ u("t! PIl .1 dl . . c..tllln( h.l . . l.... \\"h(( hi" redccmahl(' poor (0 maturtty at the 0pflon of the holder .... ~;tll he cnns.d('rrd
. h i,., I." , .. lmlll",L"
I'h,' An of No\emher 2() )<)(d (1',1,,, BA-.IR7 HAlh (.onR"'''s) (,«)vides rhar durillR ,Ihe I" rllHI 1)('llinn;n~ "n
I)" 'Illb, , I. I'll, \. <In" ('11.111',1( Iln rune 10. l<l(d, lilt, ,Ihew,: limitatiOn shal~ he lemporarlly IlIcrcas~'d to S\O ),OOO,OOO,O()O" llenIUS('
ld \.lrl.llitlfl .... in rhe (jmin~ of f('\'t'ntU' receipt ... , the puhllc d('ht l.ml£ as Increased hy ,he preceding ~('nr("nct' ...... further lncrra~{'d
tI",lll"h JIII)( ~(), I <)('j, h\' $r,.()(Hl,110I1,O()O,
II,,' 1,,11,,\\fn,l( lahl" "how", rh" fac(' amOllnl of (lhl;~,l!ion' (lll!<;tand;n~ and Ih" facc amounl which can slill he ;ssueJ undl'!
eil i . . II rlll r .I( itlfl :
I (If.1i t .1\ (' ,unntlflC I hat may he O\lt r..;( <lnding .If any on(' time
...... , \ (1<111
.1
$315,000,000 ,000
()"r'Lll1dil1): ()hl;):.lIi"", ;s"lIe,( lI"dn Secol1d Liherty Hone! Act, as amended
'nt(·rt' .... t-h(';.Hin~ :
I
fl',I"'"
( creif;,
hill,
01
,11('''
;"d('hr('dnt'~s
I rl' ...... \IfV note'
I
[t·,I .... lIf\
*"";',l\'ing" (
urrent redemption vah)(')
II"il('d Star", \{t'rirt'm('1lI I'I.In hnfl(h
I)('po .... il.lr\'
\{, I . !\, "('f;'"
11l\·{· ... ull{'nt <..,('rl£'",
I'Pf('i grl
I'(ll(,j
$53,549,831,000
4,198,246,000
64,456,658,000
$122,204,735,000
87,013,413,350
49,045,712,626
5,061,008
96,884,000
24,820,000
3,637,710,000
139,823,600,984
275,000,000
30,120,482
.... <:rt(·'"
1ITT('lle. ~
gn (
... (·TI(· ...
I'Tt'.' .... t1TV lIot(' ~
160,233,423
730,215,226
5,012,5"68
_ _~20 ~OOO ,000
I"l)f!·ign ( urn'nt \' ..,,('rl(· ...
I r< .' .... un
l
('rtifi( .Ut· ...
TrC,\ .... lIry hond~
~I'«
i.ll 1·III"l., ind{'ht('dn('~
( / rrifil a((',. . of
TT( ,t"Jr~
6,672,487,378
2,317,626,000
33,893,010,000
...
IHHC:'--
I T<·.l"'UTV hpnd..,
I ('f.11
1,195,569,131
5,012,568
20,000,000
illt('Tt' ....
t .. h('.aring
".utlfed, ifU('rt·..,t-C{·;l<.;cd
_42,883,123,378
306,132,041,06i
308,626,550
nt'.Hint! nn infefl'sf ~
:Illtt'tl
53,395,057
689,717
3,166,000,000
164,261,000
125,000,000
6,000,000
37,189,267
"LUC,· ... ~;\vin.l! ... "'tamp'
\ l t· ........
prnflf ...
t.1X
f(,fund hnlld ...
Inl('fllat'l \hl!l('[afY l:lInd fHHC'"
tru(.'rnar', f){,\Tiop.
A.., ,,'II.
n()[{· ....
11l1t'r-,'\mcrican J)('\'(·lop, Il.lIlk n(ll('"
'n;It',1 '\,I(itlfl" ( hildrt'fl', I Ilnd hon.j.,
'ni{('lJ ~.lfion ... "(,,{'cial l'lInd hond,
rO!.11
3,552,535,042
309,993,202,653
(,Il.lf,lnn·cd ohli"alions (flor held h\ Tr<''''"ry)'
I(H(·ft·,{-hl'.Hjn~ :
Ikht'ntllres, 1',11.,'\, &. ()(
787,380,850
5,471,175
'raJ. Bd".
\l.ltUft'li, int{'rf.'S(-Ceased
(;r,lnd wr,ll oll"lafldin"
H,d,lIlc,'
f,H'C
.lmounr oj ohli,l(at;ons i''Ilaol" lIndt'r aho)',' authorilY
_--=-72.2,852,025
~_ _ _ . ____ .___
_
RECONCILEMENT WITH TABLE III OF THE DAILY STATEMENT OF THE UNITED STATES TREASURY
:\s of
--.Ep.bruar~_28,
] 96h
310,357,071,07'
(.r.)Ss rublic ,leOI thi" datt' _
(;lI.H,Inlt't'd ohligations nOI owncd oy
792,852$
Trt'a~ury
311 149 ,'1&'7,
~
T"!.ll gros> ruhlic d<'ol and ):u:"dnret'd ohlioarions
/">
,
I), 1'1('1 ,lehr nnr ",hien to qarUI(lr\' limilal;on
1<,(.11
d('hbs~111'70)
limlLl!ion
-
363,8711~~
------;31o, 786,05(,if'
_ _ _ _ _ _ _ _ _ _ _ _ _- - -____
J
--")
STATUTORY DEBT LIMITATION
February 29, 1964
As of
Washington, Mm
13 ,
1964
Sf'l"tion 21 of Second I.iherty Hond Aer, as amt'nded, provides that the face amount of obligations issued under authority of
thaI Ac.t, and the fal'(' amount of ohli,.:ations ~uarantee,1 as to pr1rcipal and interes.t by the United States (except such guaranteed
obli,.:atlons as may he ht'ld by the Secretary of the Treasuryl, Shall not exceed In the aggre~ate $285 000000000 (Act of June
\0 19~C); U.S.<. •• title H. sec. 7~7hl, outstanding at anyone time. For purposes of this section the c~rren't redemption value of
any Ilhligation issued on a di s('t,unt hasis which is redeemable prior to maturity at the option o( the holder shall he considered
as its (ace amount." The Act of November 26 1963 (P.L. 88-187 88th Congress) provides that during the pniod beginning on
Decemher 1.196', and ending on June '0,1964, the ahove limitation shall be temporarily increased to $309,000,000,000. Because
of variations in the timin~ of revenue recf'ipts. the public deht limit as increased hy the preceding sentence is further increased
throu,.:h }unt' 29, lC)64. by $6.000.000,000.
The following table shows th(· face amOllnt of obligations outstanding and the face amount which can still be issued under
this limitation:
Total fact' nmount that may he out standin~ Oll anyone time
I
I
,
Outstanding obligations isslled under Second Liherty Rond Act. as amended
Intercst-hearin~ :
Treasury bills _ _ _ _ _ _ _ _
$315 000 000 000
Certificates of indehtedness
$53,549,831,000
4,198,246,000
_______ 64,456,658,000
______
Treasury no({'s _ _ _ _ _
-Treasury ___________________
$122,204,735,000
B{lnd~
*~avings (urrenl (I"temption value)
__ _
(fniled SlalCS Relirem('nI Plan hond" __
ncpo~itarv
___________ _
R. F. A, "eric'>
____ _
InVl· .... tm(·nt sc'ri('s
_. _______ _
87,013,413,350
49,045,712,626
5,061,008
96,884,000
24,820,000
3,637,710,000
139,823,600,984
( nlifical£'s of Indehtl'dness -
275,000,000
.30,120,482
('{lrei,gn ,('ries _ _ .. ____ .. __
roreign ( urrcnc.:y ~('ri('''''
Trt'a""ur\' notcs
-
160,233,423
Fnrci gn .... (·flC' ....
T,,- ,\ >-;11 ry hond .. -
7.30 , 215 , 226
$,012, 568
rorcign ("urrt'ncv serlc'"
I
rl'.l'-.Ur\' c('r(ifi{'at('~ __________ ---
Trea~\Iry honds ________ - - - - - _ _ _.=.29,000 , 000
~IH"
ial
Fllnd~
-
6,672,487,378
2,317,626,000
{ nlificares of indehrednc""
Trl'Ol~ury
1,195,569,131
5,012,568
20,000,000
not£''' _ __
33,893,010~OOO
"("«''''iury honds _____________ _
TOI~I
intcrc ... ·hcaring
Malured, inlcr"st-ceased ___________ _
42,883,123,378
.306,132,041,061
308,626,550
H"Ming no inlereSt :
53,395,057
689,717
Internal" Monetary Fund nt>le~
3,166,000,000
Inlernal'l Develop. As"',,. nOle"
164,261,000
Inler-American nevl·lop. /lank nOI(''' __ _
125,000,000
IIniled Nalions <:hiIJr('n'~ hind honds __
6,000,000
linited Nalions Special Fund hon.\~ _ _ _ 37,189, 267
(Iniled
,-_X<
es~
Slale~
Savinl(s Stamp" __ _
profi'" taX refund bt,nd ..
Total
(;uaranreed ohlil(ations (not hdd hy T",,,slIry),
Inr('r('~t-hl'arinl(
3,552,535 , 042
.309,993,202,653
,
Ikh£,nlures: F.II.A. & D( Slad. 0.1 .. · ___
Matured. interest-ceast'd _ _ _ _ _ _ _
Grand tOlal outstanding _______________
787,380,850
5,471,175
792, 852,025
------------------
Ralance face amount of ohlil(ations i~"uahle under ahove authority - - - - - - - RECONCILEMENT WITH TABLE III OF THE DAILY STATEMENT OF THE UNITED STATES TREASURY
As of
:;ross public debt this dllte ___
.J[ebnl~28, J9 6h
- -----
:;oaranteed ohligations not owned by Treasury - - - - - - - rotal gross public debt and I(uar;anteed ohlil(alillns
le<lurl deht not suhiecr to SlalutorV limitation - - - - - - - - - - - - - 'olal debt suhject to limitation
D-1170
310,357,077,079
792,852 , 025
TREASURY DEPARTMENT
March 13, 1964
FOR IMMEDIATE RELEASE
WITHHOLDING OF APPRAISEHENT ON
CARBON STEEL BARS
Tile Treasury Department is instructing customs field officers
to withhold appraisement of carbon steel bars, bars-shapes under 3
inches, and structural shapes 3 inches and over, manufactured by
Western Canada Steel Limited and/or its subsidiary, the Vancouver
Rolling Mills Limited of Vancouver, Canada, pending a determination
as to whether this merchandise is being sold in the United States
at less than fair value.
in the Federal
Notice to this effect is being published
Re~ister.
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 justi:'y a finding of dumping under the law.
The complaint in this case was received on December 16, 1963.
The dollar value of imports received during the 3-month period November 1963 through January 1964 was approximately $824,000.
000
TREASURY DEPARTMENT
March 13, 1964
FOR IMMEDIATE RELEASE
WITHHOLDING OF APPRAISEMENT ON
CARBON STEEL BARS
The Treasury Department is instructing customs field officers
to withhold appraisement of carbon steel bars, bars-shapes under 3
inches, and structural shapes 3 inches and over, manufactured by
Western canada Steel Limited and/or its subsidiary, the Vancouver
Rolling Mills Limited of Vancouver, Canada, pending a determination
as to whether this merchandise is being sold in the United States
at less than fair value.
Notice to this effect is being published
in the Federal Register.
Under the Antidumping Act, determination of sales in the United
States at less than fair value would require reference of the case
to the Tariff COmmQssion, 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 December 16, 1963.
The dollar value of imports received during the 3-month period november 1963 through January 1964 was approximately $824,000.
000
P" J:. '1.:. L .'t, :. <, •
'. ,. '. •. ) J
TU8Sd(;;~'J_~_C~...J. JJ_,l..!.'i...!.. __ _
Lu.-rt. '!.IVenin,~ t,Bat. t.he l,enriers l->r two ...rl •• at
81"\ ~~riJition;,.l. issue or' t.be :.:ills dat..ed i.lecember 19,
1'1(:), s..'1C t.Le ,yt,Ler ~'rie~: t.) "!-l ~:wd '(\1"Cl. 1), L"(L, vt,icr, ~-Mre ;)ffered on AU"Cb U,
were J,·tmeO [lot ':.1',(: 9GCr<?.l ·~~ser.f;~ lv.nk::: f.>n }'arch l(.l'e~derfi were invited for
'l,3u:)~J:}U,))il" ,)r there~c:N;,.~,}f :I-day billG J:.nd .;'or ·:'Y(.}(),·.I00,J,p), or thesreabaGa,
0:' 12-r\':;~ 0::.115. ::e ':~d.£i13 }; the;> I.:wo aerlp.;:; ;'!'Q CCZ f.;)lloh"S:
_r€,:.t:'~'1 :'3 <·.rt.nle:d.i ;:.n,n:nnceJ
i'j',(
lrea~'Lr.y ~iU:S, '~rle (3(-;r1c5 t_~
\ '
',C
91-~¥
:rae-oS uT'lJ bi11~l
12, 196:.•._.
___ t:!d,...;;!:~~~. ~E?~
A,;;I1'"');:. 'Qlliv • •
. rice
\[l1'lllal
lf2-day
!lal"e
. rice
3.S~29
Low
J. S~~!~;7'~
/verci.~8
,3.1;.3(\'
~/ "~C("i·-tin:~ f)\,;.r rJ~f,Jel'S
'~:rea3ury
bUla
__.!iat,U!'~~ .;:)ept.nber 17.Jm
Appro". Iq ••
11
.'.nnw :tate
3.719.'
:;&.115
3.729~
<; ,,' .ll!)
3.126:~
y'
t)t:;,lin!'7".)7"no
)f: . :?f the ;:,:',101111'(. 0f :,l-d[jJ' bill') bid .::.,r l·t tho 1'J\-.: ;Jrice Waf> aeoejJted
Tl {)f the .:;.m;-'tUJlt,..;/' 1, 2-dsJ' bUl& bid .for i.tt1lC 1;m ::>rice was &cCo"lpted
l.i3~Ij._<:.~,____
t~oston
New 1.)rk
,'hiladftl.2,.I..:'.
~~~:E':}d ~'Jr
~~~~__
'29,367. y:;:.)
17, .3~;9,O:j)
l,i..;(/:, 111, "r:;J
32, F 't I'Y;;';
1'f,'(,7,D0-)
17,1(7 ,.;}.,,'0
J I ;i.,r:),!,iJ'j
ClevelAnd
Ii :crd1Wn..i
:t(.L~,J:',)
l),:~u., J:;J
Atlanta
C· tCaijO
?('t,F',;}y.)
~)7. 2!J-J,<)(j~;
~,t. LO!li~
::;3,3{9,,)(j,)
iinne<).;~'olilJ
i(l!n8~.s ::i t;,'
:?2).!::,·.jYJ
;,iall6.g
i!!.n
~'r'inCi5CO
r Ii'A;.,..,.
3': ,i:32,
J()J
3~;,13j"):J;
___ . c~':'2t37J_>~J']
'~t2;2,(')51,YY)
l.3,).!.w.,',:n,)
26,lOl,Q;}J
lL.,l:):J,O:J.)
;>.7,:r:'LS,O',iJ
16,17?,000
32,339,0');)
2l,51~,On
_.lS9,31'1,O?)
':1,)0;),502,O'JO!?,/
i\1):,.JJ.i!!.d For
hccepte4
~
\$
6,201,000
1,,441,720,000
8,982,()Q.)
47,806,000
J, 112,000
9,461.,,00J
2,2CD.,-
6S9,46k.3,981••
42,)61&,3,~,.
8,e)9,_
128,h21,OOO
U,607,OOO
33,611,-
10,184,000
7,olk,-
10,492,000
9,7)1,000
9,fST,.
S,Cia,.
5,4)1,.
214,m.OO2
U$.M-
tl,911.319,OOO
$900,271,-
".14
b
LnclJde~ ~}: 7, 75-),,,;';):) -:1onc:m:!€ti1~ivA 1Jenaer;3 accepted nt the average·rice of
c/ :~-tclj)':lf!B n:,::.31,"OO n)!1c:)!:uetitive ~"!ruier3 ;~cce~;;ted :<.."v"he r;vera;,z.e iJr1ce of 9I.JII
I!l;;i C:)U:.'Yn 1.:.; nii-:')~;:'h
-:,JtX~ len~t.L and for the s;,r.e r.motL.'1t imrested, ·:.he reillllt
i~'C'>:::(1 u:l1 ~;'.)·:1ld 'r0v:' fJe :.ie:dB :;;1' 3.62<, .f3T t,!,!.; 91-ja.;. bilLj, and). $,&. t.1
1 ?-(.:-::; (·,Ul'.
':1r....::r -:;::, ~~L."-:; J~ bill~ rov (~lloW i.n ~.al"i:':;' )f bo.o.k cli.scoun'."
:,il~- rel;,;,r rel;, t.~,d t_J tL:, f;~ce G.'1'l·?Uy,t=>f' 'the 'bills ",;.tyab1c ut luf:lvurity ratbel' ...
t,:.,~ ;:,K:-;O,:.T(.l.n':c.c:ted ;'n~ t.rh~ir lc::'!.o\tli in sctl..t:,l ntUllbe.r of ckv;;; relClted to a ~
,- -- • ,'\ c.,>ntr~_[;'~ii, " 'i~21ct:.i .\~l ~,~rtific8.teS. notes, end bYldG w-e comvut.ed 1& _
-':~ :-')',-er:.-t)~ ..hc :,mc'un'" :'!1:<:H::L:,d, 8nd rel . . . t.e tr.e num':;·er of ctaY3 resnainina IIj~c, ' l ' ; t , ')~.;7 'nt 1~.:ri;J,.1 i.) ;;';.<;~:ctt.k'J.l ni.llUOer :Jf days in the ~18rion. ~ith _ . _
e.' -' -:l,;.~:~:' i ' .~tY~·f} :.L;:,n 'J::V; c.;)u:':>n ·~riod is involved.
It'
TREASURY DEPARTMENT
~R RELFASE A. M• NEWSPAPERS,
llesday, March 17, 1964 •
RESULTS OF TREASURYIS WEEKLY BTI..L OFFERING
The Treasur~ Department announced last evening that the tenders for two series of
reasury bills, one series to be an additional issue of the bills dated December 19,
163, and the other series to be dated March 19, 1964, lIihich were offered on March 11,
Ire opened at the Federal Reserve Banks on March 16. Tenders wert'. invited for
l,300,000,000, or thereabouts, of 91-day bills and for $9oo,OOO,OCO, or thereabouts,
: 182-day bills. The details of the two series are as follows:
lNGE OF ACCEPTED
HPETITIVE BIDS:
9l-day Treasury bills
l82-day 'l'reasury bills
maturing June 18, 1964
maturing September 17, 1964
Approx. Equiv •
Approx. EqUiv.
Price
Annual Rate
Price
Annual Rate
High
99.108 a/
3.529%
3.719%
98.120
Low
99.1~ 3.545%
98.115
3.729%
Average
99.106
3.538%
98.116
3.726% !I
a/ Excepting four tenders totaling $797,000
- 38% of the amount of 91-day bills bid for at the low price was accepted
70% of the amount of 182-day bills bid for at the low price was accepted
Y
TAL TENDERS APPLIED FOR AND ACCEPTED BY FEDERAL RESERVE DISTRICTS:
District
Boston
~w York
?hi1ade1phia
Applied For
$ 29,567,000
1,568,717,000
32,167,000
38,145,000
13,341,000
28,875,000
197,200,000
33,389,000
22,842,000
34,432,000
30,139,000
223,!831 l 000
AcceEted
$ 17,359,000
AE~lied
For
AcceEted
~
8,201,000 $ 2,201,000
817,797,000
1,447,720,000
659,464,000
17,167,000
8,982,000
.3,982,000
Ueveland
38,045,000
47,806,000
42,364,000
licbmond
13,341,000
3,712,000
3,602,000
ltlanta
26,101,000
9,464,000
8,839,000
lhicago
114,100,000
128,421,000
33,621,000
It. Louis
27,245,000
11,607,000
9,957,000
linneapol1s
16,172,000
10,492,000
8,042,000
:ansas City
32,339,000
10,184,000
7,034,000
i8ll.es
21,519,000
9,731,000
5,431,000
an Francisco
l59,!31 7!000
214.z999.z000
1151. 740.z000
TOTALS
$2,252,651,000 $1,300,502,000 £/ $1, 911, 319,000 $900,277,000 ~
~udes $247,750,000 noncompetitive tenders accepted at the average price of 99.106
hwludes $68,6)1,000 noncompetitive tenders accepted at the average price of 98.116
)n a coupon issue of the same length and for the same amount invested, the return on
these bills would provide yields of 3.62%, for the 91-day bills, and 3.85%, for the
182-day bills. Interest rates on bills are quoted in terms of bank discount with
the return related to the tace amount of the bills payable at maturity rather than
the amount invested and their length in actual number of days related to a 360-day
year. In contrast, yields on certificates, notes, and bonds are computed in terms
of interest on the amount invested, and relate the number of days remaining in an
interest payment period to the actual number of days in the period, with semiannual
compounding if more than one coupon period is involved.
l71
.
TREASURY DEPARTMENT
March 17, 1964
FOt{ H]·:EDIATE ?J::iliASE
!,nTEHOI1nI~G OF APPRAIS~NENT ON
Al·ll'lOHIUl,1 PHOSPHATE TYPE FERTILIZEl~
':;"he 'i'reasLll'Y Department is instr1J.cting customs field officers
to ",ithhold appraisement of ammonium phosphate type fertilizer from
Canada pending a determination as to ,,,hether this merchandise is
beinG sold in the United States at less than fair value.
Notice to
this effe·.:-t is beint3 published in the Federal Hegister.
Under the Antidunping Act, determination of sales in the United
States at less than fair value would require reference of the case
to the Tariff Commission, which vould consider ",hether American industry vas beinl3 inJt;red.
30th dumping price and injury must be
shmm to j'J.stify a findinG of dwnpine; under the law.
The complaint in this case was received on Varch
8, 1963,
and
was made by the firr.1 of I';orthwest Cooperative Hills, Inc.) St. Paul,
l-linnesota.
'The dollar val'J.e of irn:;?orts received during
approxirilately :;7) 150, 80J.
000
1963
was
TREASURY DEPARTMENT
:
March 17, 1964
FOR IMMEDIATE RElEASE
WITllliOIDING OF APPRAISEMENT ON
AMMONIUM PHOSPHATE TYPE FERTILIZER
The Treasury Department is instructing customs field officers
to withhold appraisement of ammonium phosphate type fertilizer from
Canada pending a determination as to whether this merchandise 1s
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 March 8, 1963, and
was made by the firm of Northwest Cooperative Mills, Inc., St. Paul,
Minnesota.
The dollar value of imports received during 1963 was
approximate~
$7,150 ,000.
000
- 3 -
G.nri. e:cch2nr,c tcnners 'Till recci ve equll trea.tment.
Cash adjustments will "be made
for dlfferenccG bctw2cn the p3.r value of rna.turin!!, bills accepted in exchange and
the issue price of the new bills.
The income derived fro'Tl 'I'rcosury bills, whether interest or gain from the sale
or othcr disposition of the bills, does not have any exemption, as such, and loss
from t.hc Gale or other dlr.po::dtion of Trcn:mry bills does not have any special
trec1f .m-::nt,
3 ~
such, under the Internal Revenue Code of 1954.
The bills are subject
to cr;tn.te, inheritance, gift or other excise taxes, whether Federal or state, but
ore exempt from all toxa.tion now or hereafter imposed on the principal or interest
thereof hy any state, or any of the pOGGcssions of the United states, or by any
10c3l toxinc; 81lthority.
For JlurpoCies of to,'8,tion the amount of discount at which
'rre~sury
bills are orieinally sold by the United states is considered to be in-
terc3t.
Under Sections 454 (b) and 1221 (5) of the Internal Revenue Code of 1954
the emotmt of discount at which bills issued hereunder are sold is not considered
to accrue until such bills are Gold, redeemed or othenfise disposed of, and such
bills are excluded from consideration as ca.pital a.ssets.
Accordingly, the owner
of Trea.sury bills (other thon life insurance companies) issued hereunder need inelude in his income tax return only the difference between the price paid for such
bills, whether on originnl issue or on subsequent purchase, and the amount actual!)
received either upon sale or redemption at maturity during the taxable year for
which the return is made, as ordinary gain or loss.
Trea.sury 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.
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 incorpora.ted banks
and trust companies and from responsible and recognized dealers in investment
securities.
Tenders from others must be accompanied by pa.yment of 2 percent of
the face amount of Treasury bills applied for, unless the tenders are accompanied
bY' an express gu.a.ra.nty of payment by an incorporated bank or trust company.
Immedia.tely after the closing hour, tenders will be opened at the Federal
Reserve Banks and Branches, foliowing which pubUc 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 i l l tenders, in whole or in part, and his action in any such respect shall be
final.
Subject to these reservations, noncompetitive tenders for $ ~ooo or
less for the additional bills dated
1ng until maturity date on
$ 100,000 or less for the
**XX
December 26, 1963
June ~964
~
X\<BJ
, (91
tw
days remain-
) and noncompetitive tenders for
182 -day bills without stated price from anyone
tftJ
bidder will be accepted in full at the average price (1n three decimals) of aceepted competitive bids for the respective issues.
Settlement for accepted ten-
ders in accordance with the bids must be mnrle or complet.ed at the Federal Reserv~
Banks on March 26
in a like face
1964
, in cash or other immedia.tely available funds or
am~of Treasury bills maturing
March 26, 1964
~
•
cash
TREASURY DEPARTMENT
Washington
March 18, 1964
FOR IMMEDIATE RELEASE,
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 $ 2,200,000,000 , or thereabouts, for
cash and in exchange for Treasury bills ma.turing
of $
2,209~2,000
m
_M_a~r_c_h_Xthr.6~1_9_6_4_ _ ,
, as follows:
91 -day bills (to maturity date) to be issued
XfM
in the amount
in the amount of $1,300,000,000
fift
amount of $
June
2~964
804,~000
1964
, or thereabouts, represent-
ing an additional amount of bills dated
and to mature
March~
December 26, 1963
6ti
, originally issued in the
,the additional and original bills
to be freely interchangeable.
182
Wf
, or thereabouts, to be dated
-day bills, for $ 900,88RiR00
~
March lliJ964
, and to mature _.;;.S..;;;eolO.p..;.t.;;;em;;;;b;;..ei:ir~2~4:;,,'r......;1;.;9;..;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 fom only,
and in denominations of $1,000, $5,000, $10,000, $50,000, $100,000, $500,000 and
$1,000,000 (maturity value).
Tenders viII be received at Federal Reserve Banks and Branches up to the
closing hour, one-thirty p.m., Eastern Standard time,
Monday. March 23, 1964
(daf
Tenders will not be received at the Treasury Department, Washington.
Each tender
must be for an even multiple of $1,000, and in the case of competitive tenders the
price offered must be expressed on the basis of 100, with not more than three
TREASURY DEPARTMENT
•
March, 18, 1964
FOR TIMMEDIATE RELEASE
TREASURY'S WEEKLY BILL OFFERING
The Treasury Department, by this public notice, ir.vites tenders
for two series of Treasury bills to the aggregate amount of
$2,200,000,000, or thereabouts, for cash and in exchange for
Treasury bills maturing March 26, 1964,
in the amount of
$ 2,209,072,000, as follows:
91-day bills (to maturity date) to be issued March 26, 1964,
in the amount of $1,300,000,000, or thereabouts, representing an
additional amount of bills dated December 26,1963, and to
mature June 25, 1964,
originally issued in the amount of
$804,309,000,
the additional and original bills to be freely
interchangeable.
182-day bills, for $900,000,000,
or thereabouts, to be dated
March 26,1964,
and to mature September 24, 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
(maturi ty value).
Tenders will be received at I~ederal Reserve Banks and Branches
up to the closing hour, one-thirty p.m., Eastern Standard
time,
Monday, March 23, 1964.
Tenders will not be
received at the Treasury DeJ?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
or trust company.
D-1172
- 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 Depart~nt 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
December 26, 1963,(91~ays remaining until maturit¥ date on
Jun 25 1964)
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 March 26, 1964,
in cash or other immediately available funds or in a like face
amount of Treasury bills maturing March 26,1964.
Cash and
exchange tenders will receive equal treatment. Cash adjustments
will be made for differences between the par value of maturing
bills accepted in exchange and the issue price of the new bills.
The income derived from Treasury bills, whether interest or
gain from the sale or other disposition of the bills, does not have
any exemption, as such, and loss from the sale or other disposition
of Treasury bills does not have any special treatment, as such,
under the Internal Revenue Code of 1954. The bills are subject to
estate, inheritance, gift or other excise taxes, whether Federal or
state, but are exempt from all taxation now or hereafter imposed on
the principal or interest thereof by any State, or any of the
possessions of the United States, or by any local taxing authority.
For purposes of taxation the amount of discount at which Treasury
bills are originally sold by the United States is considered to be
interest. Under Sections 454 (b) and 1221 (5) of the Internal
Revenue Code of 1954 the amount of discount at which bills issued
hereunder are sold is not considered to accrue until such bills are
sold, redeemed or otherwise disposed of, and such bills are excluded
from consideration as capital assets. Accordingly, the owner of
Treasury bills (other than life insurance companies) issued hereunder
need include in his income tax return only the difference between
the price paid for such bills, whether on original issue or on
subsequent purchase, and the amount actually received either upon
sale or redemption at maturity during the taxable year for which the
return is made, as ordinary gain or loss.
Treasury Department Circular No. 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 fron
any Federal Reserve Bank or Branch.
000
- 2 -
,March 13, 19&4
The Honorable William McChesney Martin, Jr.
Chairman, Board oE Governors of the Federal Reserve System
The Honorable James J. Saxon
Comptroller of the Currency
The Honorable Joseph W. Barr
Chairman, Federal Deposit Insurance Corporation
Gentlemen:
This letter will serve to let you know that each of your
three offices has formally notified me of your assent to my
proposal to you of March 3, 1964, concerning procedures for
informing each other and me in advance of public announcement
of any rule, regulation, or policy which will be or might be
construed to be in conflict with that of one of the other agenci
At.-l.N,
Those who have been design~by each of you as the person t
whom such notice or comment should be addressed are as follows:
For the Board of Governors of the Federal Reserve
System, Howard H. Hackley, General Counsel;
For the Comptroller of the Currency, Albert J.
Faulstich, Administrative Assistant;
For the Federal Deposit Insurance Corporation,
William M. Moroney, General Counsel.
,>1
I have designed G. d'Andelot Belin, General Counsel, as the
person to receive such notice or comments for me and have asked
him to keep me informed of developments as they arise.
The notification procedure will be in effect from the time
of your receipt of this letter.
Sincerely yours,
/s/
Douglas Dillon
Douglas Dillon
TREASURY DEPARTMENT
March 18, 1964
FOR IMMEDIATE RELEASE
The Treasury today released the following correspondence:
March 3, 1964
The Honorable William McChesney Martin, Jr.
Cba1rman, Board of Governor. of the Fedaral Re••rve System
The HODOrable Jamel J. Saxon
Comptroller of the Currency
The Honorable Joseph W. BJU'r
Chairman, Federal Deposit Insurance Corporation
Gentlemen:
I am attaching a copy of a le.~tter dated March 2. 1964
from the President to me directing that I eatabl1ah proeedu~
to in.un a maxiDI.UD degree of cool'dination among your reapectiw
agenei.. in the field of bank regulation.
The orderly conduct of bank regulation ia ... ential to •
healthy climate in which the banking commun1ty can make ita
maximum contribution to the economy and carry on 1ta affain
10 an efficient and enlightened fashion. 1 therefore requut
that henceforth each of your agencies give notice and an
opportunity to comment t on a confidential baaie, to each of
the other agencjLes and to me, ten working ciaye pdor to the
public announcement of any rule, regulation or policy which
will be J or might be construed to be. in conflict with •
presently effective rule. regulation or policy of one of the
other agencies. The giving by any agency of notice and the
receipt by it of comments will imply no obligation that 8ucb
comment. will be accepted. On the otiler hand, ltvil1 imply
an obligation that any comments received will be carefully
cooaiderad and accoumodated as prac ticable.
I ahould appreciate your assent to this proposal and the
nama of the indiVidual or office in your agency to whom any
notice or CODJ:Dents should be addressed.
D-1l73
Sincerely yours,
/s/ Douglas Dilloa
TREASURY DEPARTMENT
FOR IMMEDIATE RELEASE
March 18, 1964
The Treasury today released the following correspondence:
March 3, 1964
The Honorable William McChesney Martin, Jr.
Chairman, Board of Governors of the Federal Reserve System
The Honorable James J. Saxon
Comptroller of the Currency
The Honorable Joseph W. Barr
Chairman, Federal Deposit Insurance Corporation
Gentlemen:
I am attaching a copy of a letter dated March 2, 1964
from the President to me directing that I establish procedures
to insure a maximum degree of coordination among your
respective agencies in the field of bank regulation.
The orderly conduct of bank regulation is essential to a
healthy climate in which the banking community can make its
maximum contribution to the economy and carryon its affairs
in an efficient and enlightened fashion. I therefore request
that henceforth each of your agencies give notice and an
opportunity to comment, on a confidential basis, to each of
the other agencies and to me, ten working days prior to the
public announcement of any rule, regulation or policy which
will be, or might be construed to be, in conflict with a
presently effective rule, regulation or policy of one of the
other agencies. The giving by any agency of notice and the
receipt by it of comments will imply no obligation that such
comments will be accepted. On the other hand, it will imply
an obligation that any comments received will be carefully
considered and accommodated as practicable.
I should appreciate your assent to this proposal and the
name of the individual or office in your agency to whom any
notice or comments should be addressed.
Sincerely yours,
/s/
Douglas Dillon
D-1173
(over)
- 2 March 13, 1964
The Honorable William McChesney Martin, Jr.
Chairman, Board of Governors of the Federal Reserve System
The Honorable James J. Saxon
Comptroller of the Currency
The Honorable Joseph W. Barr
Chairman, Federal Deposit Insurance Corporation
Gentlemen:
This letter will serve to let you know that each of your
three offices has formally notified me of your assent to my
proposal to you of March 3, 1964, concerning procedures for
informing each other and me in advance of public announcement
of any rule, regulation, or policy which will be or might be
construed to be in conflict with that of one of the other agencies.
Those who have been designated by each of you as the person
to whom such notice or comment should be addressed are as follows:
For the Board of Governors of the Federal Reserve
System, Howard H. Hackley, General Counsel;
For the Comptroller of the Currency,
Albert J. Faulstich, Administrative Assistant;
For the Federal Deposit Insurance Corporation,
William M. Moroney, General Counsel.
I have designated G. d'Andelot Belin, General Counsel, as the
person to receive such notice or comments for me and have asked
him to keep me informed of developments as they arise.
The notification procedure will be in effect from the time
of your receipt of this letter.
Sincerely yours,
/s/
Douglas Dillon
Douglas Dillon
TREASURY DEPARTMENT
Washington
REMARKS BY THE HONORABLE JAMES A. REED
ASSISTANT SECRETARY OF THE TREASURY
AT THE PROPELLER CLUB LUNCHEON OBSERVING THE
175TH ANNIVERSARY OF THE U.S. CUSTOMS SERVICE
NATIONAL PRESS CLUB, WASHINGTON, D. C.
THURSDAY, MARCH 19, 1964, NOON, EST.
MR. PRESIDENT, COMMISSIONER NICHOLS, LADIES AND GENTLEMEN:
I am happy to be your guest speaker at your luncheon today in
honor of the United States Customs Service which is celebrating
its l75th Anniversary. I was honored by your national organization
at its convention last October in Baltimore in being asked to
speak at a luncheon meeting. I have also been privileged to be
present at a previous luncheon meeting of your post. In this way
and in other connections I have become acquainted with the work
of the Propeller Club and I have come to admire your organization
and its members who are dedicated to furthering the interests of
the United States Merchant Marine. I am particularly pleased to
be able to discuss Customs which I believe has richly earned its
reputation as one of the hardest working and most efficient
agencies of Government, and which keeps breaking records under
the leadership of Commissioner Nichols who I am pleased to note
is also being honored by you today.
Everybody knows a little bit about the Customs Service,
which presents a different aspect for different people.
To the international traveler, Customs is a uniformed inspector
who opens his luggage upon arrival from a trip abroad, sometimes
hurried, sometimes harried, more frequently than not polite and
courteous but strictly attending to his duties. To the importer
of foreign merchandise, Customs is the tax collector, knowledgeable,
stern, swift, matter-of-fact. To the smuggler, Customs is a law
enforcement officer in plain clothes, thus, dangerous, a kind of
"watchdog" of his country's treasury, a man with whom you don't
take chances. To the ship owner or the boat lover, Customs is
the man who keeps the records, who issues registers and other
shi.ps' papers, and who enters and clears maritime traffic on
voyages to and from foreign ports. To the unscrupulous exporter,
Customs is the man who upholds the Neutrality Act and enforces
the mandates of Congress regarding export control.
- 2 Customs is many things to many people, but it is only a handful
of people who are aware of the tremendous variety of duties which
our Customs officials are required to perform.
I have mentioned a few of these duties, just a very few, and
there are too many others to mention. But I would like to refer
back to a phrase I used in my introduction: "Customs breaks
records. "
People who are economy minded and who may feel that some
Government agencies are perhaps somewhat prodigal with the
taxpayers' money, should have a look at Customs. The Bureau of
Customs guards the ports entering Canada and Mexico, those on
the east coast and the west coast, Alaska and Hawaii, the
Commonwealth of Puerto Rico, and our territories such as the
Virgin Islands. It combats smuggling, it collects almost two
billion dollars a year in duties -- duties on sixteen billion
dollars worth of imports each year.
Customs does all of these things with a total staff of 9,000
persons. During the time of Calvin Coolidge, Customs had over
10,000 on its staff. The volume of work has increased four fold
since those balmy days in the twenties. Nevertheless, the
Bureau of Customs has fewer people on its payroll.
Another record: In the early part of this century it cost
us 5-1/2 cen~ to collect $1,000 of revenue. Today this has been
reduced to 4.2 cents to collect $1,000 for the U. S. Treasury.
The Customs budget of $76,000,000 brings in $2,000,000,000.
I for one regard this as an outstanding performance, an example
of efficient management and economy of effort which has little
parallel anywhere, in government or outside of government.
TRAFFIC ON NEW YORK CITY WATERFRONT
Customs not only collects revenue but also is making an
important contribution to the balance of payments program by
cooperating with the United States Travel Service in helping to
make foreign visitors to our shores feel welcome. Early in
October 1962 Commissioner Nichols and I organized a three man
committee to'examine the situation at the New York piers which
was little short of a disgrace. The situation was a disgrace
to the City of New York which was and remains the major gateway
to our country. It reflected no credit upon our country which
is the richest and greatest power in the world, but one would
.
never know it arriving at our New York piers after a transatlant~c
journey. We needed help in cleaning up our New York waterfront
arrival areas, and that help was forthcoming, I'm happy to
- 3 say. After the other members of my committee, New York City
Marine and Aviation Commissioner Leo Brown and Admiral
John M. "Dutch" Will, president and chairman of the board of
American Export Lines, and I went on a careful inspection tour of
the Hudson River piers, I stated:
"The length of time required to unload baggage; the
inadequate facilities for baggage examination; the absence of
heating in winter and air conditioning in summer; the poor
lighting, all contribute to the delay in clearing Customs. Even
the porter service leaves much to be desired. There are no
tables or benches, for instance, so that baggage has to be
examined on dirty cement floors."
"We are defeating our own purpose if we invite foreign
tourists to the United States and then subject them to the
intolerable conditions on the piers of New York. Our own citizens
are fully justified in protesting against these conditions. We
cannot sit back and complacently wait for these conditions to
change. We mus t ac t now."
Considering that more than four million persons in New York
City travel by ship and by air each year, this was a challenge
we obviously could not ignore. The efficient clearance of
passengers through the Public Health, Immigration and Customs
Service occupied our time and energy during the closing months
of 1962 and early 1963. The Bureau of Customs, the Marine and
Aviation Department of the City of New York, and the shipping
companies worked out a detailed program designed to give passengers
more courteous service. The Bureau introducted a number of time
saving procedures. For example, visitors were barred from the
Customs areas unless they had a special pass issued by Collector
of Customs Joseph P. Kelly. Baggage declarations were distributed
aboard ship and passengers were enabled to save time in having
their inspectors clear their baggage. More recently, indeed
only last month, the Traffic Department of the City of New York
in cooperation with our Committee has succeeded in reorganizing
the traffic flow outside the Hudson River Piers with the result
that disembarking passengers can actually get into a taxi and
leave by the west side highway in a matter of minutes after they
complete their Customs clearance. We are now experimenting with
oral declarations for arriving passengers by sea and if the
experiment proves successful will consider extending it to all
sea arrivals.
- 4 These are only a few of the reforms which have been introduced
since our committee started to function. Naturally, a lot more
remains to be done. The ultimate reform would be to rebuild the
New York City Piers, along the lines of the Holland-America Line
Pier 40 which is a model of efficiency and cleanliness. The
New York Piers were constructed early in the century and some of
them really are objects which could be of antiquarian interest.
Some of our European allies, whose piers were destroyed in
World War II, have since rebuilt them, and the contrast with our
own passenger piers is remarkable, to say the least. In 1964,
with 500,000 visitors from abroad expected to visit the
New York World's Fair, we anticipate that we will be able to handle
the extra traffic expeditiously as a result of some of the changes
which I have been discussing. We will continue to keep under
review the challenging problems of ship arrivals in New York and
cooperate fully with City, State and Federal agencies in making
visitors from abroad feel welcome when they arrive in the great
City of New York.
FACILITATION OF TRANSPORT
Several members of the Propeller Club have asked me to discuss
steps which have been taken for the elimination of unnecessary and
costly requirements which are now imposed on merchant shipping.
One of your distinguished officers who is also the Deputy
Commissioner of Customs, Mr. Robert McIntyre, has recently
returned from London where he has been representing the United
States at important conferences under the auspices of the
Intergovernmental Maritime Consultative Organization, better known
as IMCO. The agenda of these meetings is concerned with the
measurements of vessels and the means of facilitating travel and
transport.
Under immediate consideration of one of the groups were various
proposals for a new universal system of measurement to determine
gross and net tonnages. The United States has proposed a new
system designed to eliminate the present artificialities now
bound up in international practice and permit corresponding changes
in domestic law. A relatively simple formula would be used in
determination of gross tonnage and the net tonnage would consist
only of the volume of the spaces actually used for the carriage of
- 5 -
passengers and cargo. We are hopeful that we can reach agreement
on this system, which will permit rapid and simple measurements
to be made and which will give realistic results more nearly
corresponding to the actual size of the ship.
The IMCO Subcommittee studying measurement problems has
recently proposed and the Assembly has approved a plan for solving
the problem of shelter-deck and other open spaces on ships. This
proposal is the first agreement to come from IMCO. It will permit
the closing of the presently prescribed openings in the uppermost
deck and in certain bulkheads without loss of the existing
exemptions, principally relating to spaces in the 'tween decks.
Many important suggestions incorporated in the proposal have
been made by the United States, working through a team of two
representatives -- one from Government and one from industry.
The principal steamship associations throughout the country have
joined in naming the industry representative. The cooperative
approach which has been followed in this work has been cited on
more than one occasion as a model for future assignments in
international meetings when the interests of Government and
industry are both involved.
FACILITATION OF TRAVEL & TRANSPORT
Treasury has also been represented in the work of the
Organization of American States and IMCO, proceeding on separate
but related fronts, in the efforts to facilitate travel and
transport. This work has been directed to securing uniformity
and simplification on a regional or world-wide basis in the
requirements which are imposed by governments and public
authorities in the various nations incident to the arrivals and
departures of vessels.
The countries of the OAS, at the recent Inter-American Port
and Harbor Conference in Argentina, concluded a Convention of the
Facilitation of International Waterborne Transportation, known as
the Convention of Mar del Plata. That Convention has been signed
by the United States and a number of other nations of the.
Western Hemisphere. It will serve as a framework upon wh~ch to
rest an annex of standards and recommended practices similar to
that which has been so productive in the field of air
transportation.
- 6 IMCO is proceeding along the same lines and has held meetings
of experts in the fields of customs, immigration, and health.
Plans have already been announced for an international conference
to consider TMCO's proposed Convention with annexed standards and
recommended practices in 1965. We are very hopeful that these
efforts will result in great improvements in paperwork requirements
in the marine field and will serve as the impetus for the
elimination of unnecessary, hampering, and costly requirements
which are now imposed on merchant shipping. In this effort, too,
we have had and are continuing to have the cooperation of the
entire maritime industry.
This has been a somewhat rambling talk which has touched upon
a little bit of Customs history, upon the contributions which the
Customs Service is making to the balance of payments program, and
to a field of maritime interest in which Customs is taking an
active part. Possibly there are some members who would like to
know more about the problem of tonnage measurement. For a
detailed report on the work of IMeO in the fields I have mentioned,
I refer you respectfully to Mr. McIntyre who has the latest
information at his fingertips. Suffice it now to say that we are
happy to be here to join with you in celebrating 175 years of
Customs, we appreciate the honor you have accorded our Service,
and we hope that you will all be here to celebrate the 200th
Anniversary 25 years from now.
000
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y
TREASURY DEPARTMENT
RELEASE A. M. NElrJSPAPERS ,
tuesday, March 24, 1964.
~R
March 23,
RESULTS OF TREASURY I S WEEKLY BILL OFFERING
t:easury
Depar~ent announced last evening that the tenders for two series of
bills, one ser1es to be an additional issue of the bills dated December 26 1963
nd the other series to be dated March 26, 1964, which were offered on March 18, we~e
'
pened at the Federal Reserve Banks on March 23. Tenders were invited for $1,300,000,000,
r thereabouts, of 91-day bills and for $900,000,000, or thereabouts of 182-day bills
le detills of the two series are as follows:
'
•
The
~asury
\.NGE OF ACCEPTED
91-day Treasury bills
182-day Treasury bills
maturing June 25 J 1964
maturing September 24, 1964
Approx. Equiv.
Approx. Equiv •
Price
Annual Rate
Price
Annual Rate
High
3.736%
99.107
3.533%
98.111
Low
3.742%
99.102
3.553%
98.108
Average
3.740% !I
~9.103
3.550%
98.109
71% of the amount of 9l-day bills bid for at the low price was accepted
88% of the amount of lB2-day bills bid for at the low price was accepted
)MPETITIVE BIDS:
!I
/rAL TENDERS APPLIED FOR Alm ACCEPrED BY FEDERAL RESERVE DISTRICTS:
AcceEted
!EElied For
Accepted
Applied For
District
$
Boston
$ 56,783,000 $ 14,892,000
3,476,000 $ 2,960,000
752,063,000
New York
862,265,000
1,463,006,000
1,895,932,000
2,173,000
Philadelphia
7,401,000
13,956,000
30,943,000
25,343,000
Cleveland
26,938,000
25,577
000
32,955,000
1
2,832,000
Richmond
12,628,000
3,232,000
18,100,000
8,781,000
~tlanta
20,040,000
13,305,000
30,619,000
31,707,000
118,174,000
Chicago
146,147,000
248,673,000
7,318,000
15,211,000
st. Louis
21,607,000
31,013,000
5,998,000
9,698,000
'tinneapolis
9,993,000
19,035,000
9,634,000
9,746,000
21,792,000
ransas City
38,785,000
4,694,000
)allas
14,766,000
13,524,000
24,029,000
48 2068 z000
98z603z000
)an Francisco
144 z9092OO O
234z7012000
$1,783,556,000 $901,571,000 ~
TOTAL
$2,661,568,000 $1,307,33 0 ,000
InclUdes $237,488,000 noncompetitive tenders accepted at the average price of 99.103
Includes $62,483,000 noncompetitive tenders accepted at the average price of 98.109
On a coupon issue of the same length and for the same amount invested, the return on
these billa would provide yields of 3.63%, for the 91-day bills, and 3.86%, for the
182-day bills. Interest rates on bills are quoted in terms of bank diSCOWlt with the
return related to the face amount of the bills payable at maturity rather than the
amount invested and their length in actual number of days related to a 360-day year.
In contrast, yields on certificates, notes, and bonds are computed ~ terms of
interest on the amount invested, and relate the number of days remaining in an
interest payment period to the actual number of days in the period, with semiannual
compounding i f more than one coupon period is involved.
!I
1174
FOR RELEASE:
UPON DELIVERY
STATEMENT OF THE HONORABLE DOUGLAS DILLON
SECRETARY OF THE TREASURY
BEFORE THE HOUSE COMMITTEE ON BANKING AND CURRENCY
ON INCREASE IN RESOURCES OF THE
INTERNATIONAL DEVELOPMENT ASSOCIATION
MARCH 23, 1964, 10:00 A.M. EST
I am happy to appear before you today on behalf of
S. 2214.
This bill would amend the International Develop-
ment Association Act to authorize the United States to agree
to contribute $312 million to the International Development
Association (IDA) in conjunction with contributions of $438
million from 16 other industrialized countries.
The International Development Association was organized
in 1960 as an affiliate of the World Bank, to provide
financing to less developed countries on easier repayment
terms than the World Bank could provide.
Only members of the World Bank can become members of
IDA.
Membership in IDA is divided into two classes
the
Part I countries are those in a position to provide assistance
to the developing countries.
Their subscriptions to IDA
are all in convertible currencies.
are the developing countries.
The Part II countries
Ten percent of their sub-
scriptions are in convertible currencies and ninety percent
in their own currencies.
D-1175
- 2 The initial subscriptions -- totaling $767 million in
convertible currencies and $219 million in local currencies
were payable in annual installments over a five-year period
beginning in November 1960.
The final installment will fall
due November 8, 1964.
In September 1963, 17 of the economically advanced
nations of the free world reached agreement in principle
to provide an additional $750 million in convertible currencies to IDA for funds beyond 1964.
On our part, this
agreement was, of course, subject to Congressional approval,
which we are now seeking.
This amount would be paid in over
the three-year period commencing November 1965, at the rate
of $250 million a year.
The U. S. share would be payable
at the rate of $104 million a year.
While authorization is
required now to permit IDA to continue operations, no appropriation would be required until FY 1966.
This agreement represents an important additional step
in the continuing efforts of the United States to encourage
other industrialized nations to share the burden of financing
the development of the less fortunate nations of the free
world.
The United States provided 43 percent of the initial
resources subscribed by Part I countries, which were payable
- 3 -
at the annual rate of $150 million.
The new proposal would
increase this to an annual rate of $250 million, but the
U. S. share would be slightly reduced, to 41.6 percent.
Thus,
both the amount and the proportion put up by others would be
increased.
It is clear to me that these moves are in the
right direction -- one that the Congress itself has advocated
for many years.
Unless the United States approves this arrangement, the
IDA will soon have to stop operations and the pledges of the
other countries will not become effective.
This would be a
blow -- not only to our role of leadership in the free world,
but also to our own financial interests, since the greatly
increased contributions by others would be lost.
There should be no question in anyone's mind -- and there
is none in mine -- that contributions to IDA are a form of
foreign aid -- repayable aid to be sure, but still aid.
The Administration has and will continue to take the
annual U. S. contribution to IDA fully into account in formulating our bilateral aid proposals.
We expect that the
Congress in acting on our proposals will do likewise -- both
in the authorization and appropriation process.
Indeed,
for some years the annual appropriation for IDA has been
- 4 handled by the Appropriations Committee as an integral part
of the foreign aid appropriation bill.
In this way our con-
tribution to IDA has been taken into account by the Congress
each year in determining the appropriate level of our own
bilateral aid program.
This legislation would authorize an annual contribution
of $104 million to IDA for the three fiscal years 1966-68.
This is a small sum when compared to the rest of our foreign
aid program.
And it is a type of foreign aid that serves
our interest in a way that no other aid program does, for it
brings with it, in hard currency and on identical terms,
nearly $3 of aid from other industrialized countries for
every $2 we put up.
Over the five years, fiscal 1961 through
1965, our contribution to IDA will average $64 million.
we increase it -- by $40 million a year
As
as we are now
proposing, we also increase -- by $61.5 million a year -the contributions of other industrialized countries.
In
this way, they share more of the burden we have been carrying
on our own shoulders.
Aid Criteria
There have been a number of objections to the proposal
on the grounds that disbursements by IDA are not governed
- 5 -
by the statutory criteria which govern our own bilateral
aid program.
The fact of the matter is that the World Bank management
which is responsible for IDA as well -- has always been
a strong proponent of sound financial policies and has done
its utmost to encourage private enterprise.
Many of the
special provisions recently written into law to guide our
own bilateral programs have long been established policies
of IDA and the World Bank.
One has only to look at the
attached record (Annex A) of IDA's credit activities to date
in the light of certain of our own AID criteria to fully
appreciate this.
Hickenlooper Amendment
One area that appeared to be of considerable concern
during the House debate relates to expropriation of property
and nullification of contracts -- an area in which the
Hickenlooper Amendment governs use of funds appropriated to
AID.
Ceylon is the only country in which our aid has been
terminated because of the principles embodied in the
- 6 -
Hickenlooper Amendment.
Long before this happened, the Bank
and IDA had informed Ceylon they were not prepared to extend
credit there because of Ceylon's financial policies.
Since
then, neither the World Bank nor IDA has extended credit to
Ceylon and none is presently contemplated.
The reason this has happened -- and can be expected to
happen in other countries where there are similar situations
-- is that it is the established policy of the Bank and IDA
not to operate in countries which are making poor use of their
resources.
For example, neither the Bank nor IDA lend money
to countries whose external debt held by the public is in
default -- unless there is evidence that these countries are
making reasonable efforts to achieve a fair and equitable
settlement with their creditors.
Similarly, neither the
Bank nor IDA will extend credit to governments which refuse
to pay compensation for foreign-owned properties which they
have expropriated.
These policies of the Bank and IDA are long standing
and will continue to be fully supported by the United States
Government.
They are fully supported by other principal
contributors as well.
I am completely assured that IDA funds
will not be available to countries which decline compensation
- 7 for expropriated foreign private property.
The proceeds of
an IDA credit could not, of course, be used by a country to
pay compensation for an expropriated property.
IDA credits,
just like World Bank loans, are granted for specific new
projects.
As the attached Annex A shows, these are for con-
struction of new facilities in a variety of fields such as
ports, roads, power and agriculture -- not for the purchase
of existing facilities.
Self-help
The Bank and IDA have long recognized that no amount
of external assistance can lead to growth and development
unless the country itself is prepared to follow sound
policies.
They have declined to provide financing to
countries unprepared to take steps which the Bank and IDA
thought necessary for orderly development of their economies
and fulfillment of the purposes of the financing.
The Bank
and IDA have thus contributed importantly to establishing
the principle of self-help which has been the central
feature of our own assistance programs ever since the first
days of the Marshall Plan.
Bokharo Amendment
Some concern has been expressed, despite these policies,
- 8 that IDA might finance the proposed Indian steel mill to be
constructed at Bokharo, and thereby permit U. S. funds to
be used in a way that had been prohibited by the Congress
without its specific consent.
Of course, even the over-all proposed $750 million
would not give IDA sufficient funds to finance a project of
such magnitude.
It would leave virtually nothing for other
worthwhile projects.
So that on this score alone it would
not be approved by IDA.
But, even if the funds were available, it has long
been the policy of the World Bank and IDA not to extend
credit to government-owned industrial enterprises which
compete with private industry.
In fact, while the Bank has consistently refused to
finance government-owned steel capacity in India, it has
loaned over $150 million to private Indian steel firms.
IDA has never made a loan for a government-owned
industrial enterprise.
The Bank has only made three such
loans -- all to Yugoslavia in the early 1950's.
On
the
other hand, the Bank and IDA together have provided over
one billion dollars for the direct development of private
enterprise.
- 9 Terms on Relending
Whereas AID must charge interest on loans at the annual
rate of 2 percent after ten years, there is no such limitation on IDA loans, which are for a fifty-year period with a
3/4 percent annual service charge.
This difference in terms
was the subject of some comment.
However, IDA was specifically organized to help meet
the needs of developing countries for funds that would not
unduly burden their balance of payments.
As I understand it, the principal reason Congress required the 2 percent interest floor on AID loans was in
recognition that we were providing assistance on substantially
better terms than most other aid-giving countries.
But in
IDA, the cost of lending on these favorable terms is borne
by all contributing countries alike, and other countries
contribute nearly $3 for every $2 that comes from us.
IDA's
terms, which were recommended by Mr. Eugene Black
who
certainly cannot be called an unsound businessman
have
been internationally agreed to and accepted as appropriate
by the other countries which together have the greatest stake
in providing IDA resources.
These countries, such as Britain,
- 10 -
Germany, France, the Netherlands, and Sweden are certainly
sound and careful bankers and would not provide funds on
these terms unless they were clearly required.
As the attached Annex B shows, many of IDA's credits
are reloaned within the country of the borrower at higher
rates of interest and shorter terms than the country is
required to pay IDA.
This is the same practice that is
followed by AID, within the statutory guideline established
by the Congress that AID funds shall be Hreloaned at rates
of interest not excessive or unreasonable for the borrower".
IDA has a similar policy of not permitting relending of its
funds at excessive or unreasonable rates of interest.
The
United States will continue to support this policy in IDA.
IDA's long-term, low-interest loans, which are often
reloaned on harder terms, are appropriate because the
country's balance-of-payments position does not permit it
to borrow the needed funds on commercial or World Bank terms.
On
the other hand, domestic end-users of the funds have no
balance-of-payments problems and therefore do not need these
very favorable terms.
For this reason, the appropriate
terms for the ultimate recipient of the funds are determined
in the light of prevailing levels of interest rates within
- 11 -
the country and the character of the project itself.
Eligible Borrowers
There has been some confusion about which countries
are eligible to borrow from IDA, as well as whether IDA
would lend to Communist countries.
Under its Articles, only members of IDA, which must,
in turn, be members of the World Bank and the International
Monetary Fund, are eligible to receive IDA credits.
Moreover, none of the countries participating in the
proposal to provide $750 million of additional resources
to IDA is, under IDA's policies, entitled to receive any
credit from IDA.
Even among the lesser developed members of IDA
the
so-called Part II countries -- not all would expect to
receive credits.
In fact, only 20 countries have received
IDA credits, as contrasted with the 71 countries to which
the World Bank has made loans.
Because of its very limited
resources, it is IDA's policy to lend only to those countries
with very low per capita income and the most difficult
balance-of-payments situation.
- 12 -
None of the Sino-Soviet bloc countries is a member of
IDA.
While Yugoslavia is a member, it has received no
credits and none are being considered.
Furthermore, all IDA
credits must be uSed within the territory of the borrowing
country
Directors.
for projects approved by IDA's management and
Accordingly, it would not be possible for a
borrowing country to relend to any other country.
So we
need have no concern that Cuba, which is not a member of
IDA and therefore not entitled to receive an IDA credit,
could indirectly receive the benefits of an IDA credit.
We would not expect the IDA management to propose a
loan to any country that had fallen under Communist control,
and I can give you categoric assurance that if any such
suggestion were ever made it would be most strongly and
vigorously opposed by the United States.
IBRD Grant to IDA
Attention has been called to the size of the World
Bank's reserves, which, as of December 31, 1963, amounted
to $558 million in the Supplemental Reserve and $271 million
in the Special Reserve.
There have been suggestions that
some part of these reserves should be transferred to IDA,
or , at least , that the Bank should not go on accumulating
- 13 reserves at such a rate as in the past, but should transfer
some part of its net income to IDA.
While I strongly favor transferring some of the Bank's
net income for fiscal year 1964 and thereafter to IDA , I do
not feel the Bank could properly or in good conscience dissipate any of its presently existing reserves.
Under the Bank's Articles of Agreement, the Special
Reserve, which amounts to $271 million and has been built up
from a 1 percent per annum commission charged on outstanding
World Bank loans, must be invested in short term securities
and kept available for meeting liabilities of the Bank.
Accordingly, none of this Reserve can be transferred to IDA.
The Supplemental Reserve, amounting to $558 million,
differs from the Special Reserve in that it is not a segregated fund, but is rather in the nature of an earned surplus
and is used in the Bank's regular operations.
As its name
implies, it provides an additional reserve against losses on
the Bank's loans and guarantees.
In order to maintain an
adequate reserve against these risks, the Board of Governors
of the Bank have deemed it necessary to allocate all net
income to the Supplemental Reserve from the time of its
- 14 creation in 1950 to the end of the last fiscal year, June 30,
1963.
The Bank sold its bonds to the public constantly
throughout this period and the financial statements of the
Bank reflected the amount of the Supplemental Reserve existing
at the time each issue of bonds was
sold.
Any reduction at this time in the Supplemental Reserve
could, therefore, be considered a breach of faith by the
holders of the Bank's bonds.
Thus it would have a most
serious adverse effect on the Bank's ability to continue
mobilizing private capital for development by selling its
bonds to the public.
However, this does not mean that the Bank need accumulate reserves in the future as rapidly as it has done in the
past.
At the 1963 Annual Meeting of the Bank, there was
general recognition that the Bank's reserves are now more
nearly adequate to its present level of operations.
In
recognition of this, the Board rescinded a resolution originally
adopted in 1950 which required that all net income be automatically allocated to the Supplemental Reserve.
Accordingly,
at the end of this fiscal year the Board will have to decide
what to do with the net income for fiscal year 1964.
- 15 During the past year we have been urging that each year
a portion of the Bank's net income be granted to IDA.
I now
understand that the Bank's management intends to propose
that, beginning with fiscal year 1964, a substantial portion
of its earnings be granted to IDA.
We will fully support a
proposal to transfer a large share of the Bank's earnings to
IDA and I am confident such a grant will be made.
U. S. Share
The negotiations which resulted in the present proposal
were long and difficult.
We took the lead in these negotiations
because we recognized the great value which IDA has to the
United States in mobilizing more funds from other countries
than from ourselves.
Our share of IDA's resources contributed by the Part I
countries was reduced from over 43 percent to 41.6 percent.
Under the new proposal the amount of our annual contribution
would increase from $64 million to $104 million -- a rise of
62 percent.
This compares to an increase for Italy of 176
percent, Sweden 148 percent, Germany 129 percent, Japan 105
percent, France 95 percent, and Canada 84 percent.
Full
details for each participating country are shown in the
attached table.
- 16 It was suggested during the House debate that the IDA
did not really represent a method of getting other countries
to share the aid burden with us, because we were providing
them aid with which to make their contributions to IDA.
Since 1963, no new commitments for economic assistance
have been made to the governments of any of the Part I
countries of IDA and none is planned.
Undisbursed amounts to
fulfill prior commitments amount to only $63,000.
The Church Amendment as enacted last year prohibits new
commitments to these countries for military assistance after
July 1, 1963, except for minor training expenses.
Since
payments under the new IDA proposal would not be made until
fiscal years 1966, 1967 and 1968, it is clear that no new
commitments will be made to any of the Part I countries for
disbursement during those years.
As to deliveries under earlier military aid commitments,
according to the Defense Department the facts are as follows:
As of right now, eight countries who have agreed to contribute
$313 million of the $438 million from other countries are no
longer receiving any U.
s.
military aid at all.
As of fiscal
1967, those figures are expected to grow to $390 million and
fourteen countries.
Only two countries, putting up $48 million
- 17 or approximately eleven percent of the total foreign contribution to IDA, are expected to continue to receive
military aid deliveries from prior commitments throughout
the three-year period, fiscal 1966-68, and deliveries to
both of these countries should be completed during fiscal
1968.
Thus it becomes clear that except for relatively
minor deliveries from past military aid commitments to a
few countries, there is no substance to the concern that
was manifested during the House debate.
The foreign con-
tributions to IDA are a real and valuable sharing of the
aid burden and will not in any way be facilitated by current
U. S. military aid programs.
U. S. Influence in IDA
I would like to consider now the extent to which we are
able to influence IDA's operations.
Votes in the World Bank and IDA are on a weighted basis,
according to the size of each country's subscription.
The
seventeen countries which would contribute the $750 million
in the new proposal have together 64 percent of the total
votes in IDA.
The United States alone has 26.6 percent of
the vote, which is ample to assure that our interests are
protected.
- 18 While the funds for which we are seeking authorization
would be paid over to IDA, our voting strength and close
working relationship with IDA's management and staff -- as
well as with the other contributing countries -- assure the
United States an important voice in IDA's operations.
Conclusion
Mr. Chairman, unless the proposal to increase IDA's
resources becomes effective soon, IDA will have to stop
operations, and it cannot become effective without favorable
action by the United States.
IDA cannot commit itself to make loans without assurance
that it will be provided with the funds necessary for disbursements when the time comes.
IDA's present hard currency resources total $777 million.
Against these, commitments of $591 million have been signed,
leaving a balance of $186 million still available for commitment.
In anticipation of approval of the proposal for new
resources -- originally scheduled for December 31, 1963,
then postponed to March 31 of this year and now to June 30
- 19 IDA expected to have seventeen projects in nine countries
ready for signature before June 30.
$267.5 million.
These projects total
Obviously, $81.5 million of these cannot
be financed within the balance of initial resources now
available.
These are projects which have reached the final
stages of planning after many months -- and, in some cases,
years
of consideration.
In many cases, they are key
parts of broader development plans, which would have to be
reconsidered if the projects do not go forward.
cannot be turned on and off at random.
This process
Lack of continuity
means waste and ineffective development.
So far, all contributing members of IDA except the
United States have voted in favor of the proposal to increase
the resources of IDA.
If the United States fails to approve the proposal, the
other countries will be released from their commitments.
Thus,
this channel for mobilizing the resources of other industrialized countries for the aid effort on terms identical with our
own contribution will be effectively blocked.
This will make
it difficult -- if not impossible -- to negotiate further
burden-sharing arrangements with other nations.
- 20 -
Accordingly, Mr. Chairman, I strongly urge early and
favorable action by the House so that the IDA can continue
uninterrupted its uniquely valuable operations.
Thank you.
PARTICIPATION IN PROPOSED INCREASE IN IDA RESOURCES
(In millions of U.S. dollars and percentages]
Country
Australia
Austria
Be1gitnn
Canada
Denmark
Finland
France
Germany
Italy
Japan
Kuwait
Luxembourg
Netherlands
Norway
South Africa
Sweden
United Kingdom
United States
Total
NOTE:
Initial resources
Proposed amount of
new resources
Total
Annual
rate
Total
Annual
rate
20.18
. 5.04
4.04
1.01
37.83
8.74
3.83
52.96
52.96
18.16
33.59
3.36
7.57
1. 75
.766
10.59
10.59
3.63
6.72
.67
19.80
5.04
16.50
41. 70
7.50
2.298
61. 872
72.60
30.00
41. 25
6.60
1.68
5.50
13.90
2.50
.766
20.624
24.20
10.00
13.75
27.74
6.72
10.09
10.09
320.29
5.55
1. 34
2.02
2.02
26.23
64.06
.75
16.50
6.60
3.99
15.00
96.00
312.00
.25
5.50
2.20
1. 33
5.00
32.20
104.00
742.72
148.56
750.00
250.00
13"~.14
Detail may not add to totals due to rounding.
Percent
share of
initial
resources
Percent
share of
new
resources
2.72
0.67
2.64
.67
2.20
5.56
1.00
.31
8.25
9.68
4.00
5.50
5.09
1.18
0.52
7.13
7.13
2.45
4.52
0.45
Percent incr~ase
in annual ra~e
of participation
+ 63.4
+ 66.3
+ 83.6
+ 42.9
0
+ 94.7
+ 128.5
+ 175.5
+ 104.6
3.73
0.90
1. 36
1. 36
17.66
43.12
.10
2.20
.88
.53
2.00
12.88
41.60
- 34.2
+ 147.5
+ 22.8
+ 62.3
100.00
100.00
+ 68.3
0.9
+ 64.2
Annex A
DESCRIPTIONS OF EACH IDA CREDIT
THROUGH FEBRUARY 29, 1964
CHILE
HIGHWAY REHABILITATION
$19 million credit
signed June 28, 1961
This development credit, extended jointly with a
World Bank loan of $6 million for road maintenance
equipment, will cover the foreign exchange cost of
construction, rehabilitation and consolidation of the
main secondary roads in Chile's ten southern provinces,
the country's most important agricultural region.
Existing dirt roads in Southern Chile become
impassable during the five-month rainy season each
year; and the damage caused there by the earthquakes
of May 1960 has only partially been repaired. With
the help of the credit, about 600 miles of roads will
be newly built or relocated, and 1,600 miles of existing
roads will be improved, providing an integrated al1weather road system connecting the main producing areas
with consumption and processing centers. The benefits
of good road transport in the Southern zone should be
felt by the whole Chilean economy. The ten provinces
already produce about 53% of the country's total agricultural output; with better communications they could
further reduce Chile's dependence on imported produce,
agricultural and livestock products.
CHINA
IRRIGATION PROJECT
$3.7 million credit
signed August 30, 1961
A program for the development of deep wells was
begun in 1958 when the Provincial Government of Taiwan
established the Ground Water Development Bureau. The
Bureau constructs and equips wells for Irrigation
Associations which operate irrigation works in their
respective districts. The project which the IDA credit
will assist is a continuation of this program and consists of the provision of about 765 deep wells to provide more irrigation water for approximately 207,500
- 2 acres in the western and southern plains. The water
will be used on land operated by more than 100,000
farmers and should increase the gross value of farm
production by the equivalent of about $15 million a
year.
The Government of the Republic of China is relending the proceeds of the credit to the Province of
Taiwan which is making funds available to four Irrigation Associations under an arrangement by which the
Associations will repay the credits over 20 years, at
12% interest per annum, the customary terms for such
credits in Taiwan.
CHINA
DREDGING PROGRAM
$2.2 million credit
signed August 30, 1961
This credit will finance expenditures by the
Taiwan Provincial Government on dredging equipment,
engineering services and the training of personnel
for the improvement and maintenance of Taiwan's
three commercial harbors, Kee lung , Kaohsiung and
Hualien. The Republic of China is re-lending the
equivalent of the credit to the Province of Taiwan,
repayable in 15 years, at 12% interest per annum.
Keelung and Kaohsiung serve the western plain which
contains most of Taiwan's population and economic
activity; Hualien serves the narrow eastern coastal
region and is only now being developed into a port
for international trade.
The volume of traffic is expected to increase at
all three ports. The new equipment will not only be
used to expand the capacity of the ports to handle
the growing trade, but will also replace existing
equipment which has passed its economic life and is
already inadequate for present maintenance operations.
Maneuvering areas will be enlarged at the western
ports to avoid congestion and provide protection from
typhoons, and the harbor areas will be deepened and
extended.
- 3 -
CHINA
TAIPEI WATER SUPPLY
$4.4 million credit
signed September 6, 1961
The credit will help to finance the expansion and
improvement o~ water supply facilities in Taipei, the
largest city ~n Taiwan, and in eight suburban communities.
At present public water supplies are available only in
Taipei City itself and in two suburbs. Over the Taipei
region as a whole, it is estimated that by 1970 a total
of about 360,000 cubic meters of water daily--about
double the present output--will be needed to meet the
requirements of the rapidly increasing population and
to extend service to those communities which at present
lack a public water supply. The new facilities being
installed with IDA assistance should meet this demand.
They consist of a river water pumping station and
pipeline, a new filtration plant, two reservoirs, a
substantial increase in the distribution system, and
at least three new deep wells. The project is being
carried out by the Taipei Water Works and is part of
the current four-year economic plan for Taiwan. The
Republic of China is re-lending the equivalent of the
credit to the Taipei Water Works, repayable in 23 years,
at 12% interest per annum.
CHINA
INDUSTRIAL DEVELOPMENT
$5 million credit
signed December 1, 1961
The credit will provide the additional foreign
exchange needed by the China Development Corporation
(CDC) for its lending over the next two or three years.
The Republic of China is re-lending the equivalent of
the credit to CDC, repayable over 30 years, at 9.8%
interest per annum. CDC will re-lend at 14% to private
enterprises at maturities appropriate to the indiv~dual
projects. CDC was establishe~ in May 19~9 by leadlng
bankers and businessmen in Talwan to asslst the establishment modernization and expansion of private
industri~l enterprises in the island. With no organized
bond market and limited resources available from commercial banks, many companies have had to depend on .
short-term loans from private money lenders at very hlgh
- 4 -
rates of interest. The principal function of CDC is
to offer long-term financing, both in local currency
and in foreign exchange, for private industry. As
such, it has an important role in the development of
private industry u~der China's current Four-Year Plan,
which calls for an annual increase of almost 16% in
manufacturing output. At the time the IDA credit was
made, CDC had made over 70 loans aggregating the
equivalent of nearly $10 million, mostly at medium
and long term.
COLOMBIA
HIGHWAY PROGRAM
$19.5 million credit
signed August 28, 1961
This credit, together with a World Bank loan of
$19.5 million made on the same date, will assist a
highway improvement program of the Colombian Government, involving the reconstruction or new construction
of about 800 miles of roads forming part of the main
road network of Colombia, the preparation of designs
on another 300 miles of roads, an expansion of maintenance operations and the procurement of maintenance
equipment. The IDA credit will be used for road construction work.
When the current program is completed,
Colombia will have an all-weather highway system connecting most of her important cities.
COSTA RICA
HIGHW~Y PROGRAH
$5.5 million credit
signed October 13, 1961
This credit, together with a World Bank loan of
$5.5 million made on the same date will help to finance
the reconstruction and construction bv the Costa Rican
Government of about 420 miles of road, representing
about one-third of the country's national and regional
highway system, and the improvement of road maintenance
operations. 1'1ost of the highways to be improved serve
the central plateau, populated by about three-fifths of
the population and containing the bulk of the country's
agricultural and manufacturing wealth. Improvements
of the existing roads will cut vehicle operating costs
by 12/0 to 2 S;~ on :nos t of the roads. Three new highway
- 5 ~ections will be built, two to relieve severe congestion
~n the San Jose area, and the third to open up a rich
~gricultural region.
These works, together with the
~mprovement
of maintenance operations constitute the
fir~t and most important stage of a s~ven-year program
to.~mprove and extend the country's highway network
wh~ch now carries 80% of total passenger traffic and
70% of freight.
EL SALVADOR
HIGHWAYS
$8 million credit
signed November 2, 1962
The credit will be used for the reconstruction of
seven trunk roads, the construction of four new feeder
roads--227 miles in all--and the modernization of
maintenance operations on the El Salvador Coastal Highway, which borders the Pacific from Guatemala to
Honduras.
The seven trunk roads to be built to higher standards
will accommodate steadily increasing traffic and substantially reduce transportation costs. Three of the roads
link the two largest cities, San Salvador and Santa Ana,
and the country's two chief ports, La Libertad and
Acajutla. The four new feeder roads will serve fertile
but little used highland regions in the west and central
parts of the country, leading to an increase in land
under cultivation and stimulating shifts in production
from low-grade coffee to more profitable food crops.
ETHIOPIA
HIGHWAY DEVELOPMENT
$13.5 million credit
signed February 27, 1963
The credit will assist in financing the continuing
highway development program in Ethiopia. It will provide the foreign exchange needed to complete the new
roads now being built; to build two new roads with a
total length of 135 miles, six small br~dges, and,the
asphalting of 500 miles of roads. ,It wlll also flna?ce
the procurement of accounting machlnes for the Imperlal
Highway Authority and the foreig~ ex~hange c~sts,of
consultants to assist the Authorlty In organ~zatlonal
- 6 -
and engineering matters, and to conduct a survey and
feasibility study of a proposed road through the Awash
Valley leading ultimately to the new port of Assab,
which at present can be reached from Addis Ababa only
by a mountaincus and much longer route.
The improvement of Ethiopia's highway network,
begun in 1950, has already contributed significantly
to the development of the economy. Better roads have
reduced travel time and transport costs to a fraction
of their former level; opened new areas to production,
making possible an increase in the output of various
crops both for export and for home markets; induced a
shift from subsistence to cash-crop agriculture; and
extended the reach and effectiveness of governmental
administration.
The Imperial Highway Authority, established in
1950 as an autonomous government agency, is responsible
for developing and maintaining Ethiopia's highways.
The highway network now comprises 3,200 miles of allweather roads, all of which are under routine maintenance.
In addition, 530 miles of new roads are under construction.
The World Bank has assisted the Government's highway
program with a loan of $5 million in 1950 and one of
$15 million in 1957.
The total cost of the project is estimated at the
equivalent of $23.2 million. The IDA credit will cover
the foreign exchange requirements and the Government
will be responsible for providing the local currency
requirements for the project and for the continued
maintenance and betterment of existing roads.
HAITI
HIGHWAY MAINTENANCE
$350,000 credit
signed November 2, 1962
In Hay 1956, the World Bank made a loan of $2.6
million to Haiti for a 3-year highway maintenance program,
which was to include the setting up, equipping and training
of an organization to rehabilitate and maintain this
national highway system. Operations under this loan were
successful, with marked improvements in the roads them-
- 7 selves and in highway administration, and a notable
stimulation in agricultural production in the regions
served. Funds under this loan were exhausted in 1961.
Haiti is currently making the required service payments
to the World Bank on the loan.
In mid-1962, Haiti requested an IDA credit of
about $6 million for an expanded maintenance program
and new construction. Subsequently, other financing
which had been expected to form a part of the total
program was found to be unavailable. In view of this,
and of increasing internal instability in the country,
IDA declined to consider the application for the full
amount requested. Since complete withdrawal of support
from the highway administration would probably have
resulted in the abandonment and consequent loss of the
good results achieved over the years, IDA felt it
appropriate to make an interim credit of $350,000 to
provide for completion of improvement work now underway
and continued ordinary maintenance for about 1 year.
HONDURAS
HIGHWAYS
$9 million credit
signed May 12, 1961
This development credit will make $9 million
available to Honduras to assist in carrying out a
program of highway development and maintenance. The
program being financed includes a 62-mile extension
of th2 Western Highway of Honduras, from its present
terminus at Santa Rosa de Copan to the border of
El Salvador; the construction of feeder roads in
Western Honduras; the continuation for two years of a
highway maintenance program; and a highway planning
survey.
The highway extension will traverse a region which,
although one of the most populous in Honduras, has
remained until now inaccessible by road and limited
mainly to subsistence agri?ul~ure. The new road should
stimulate production on ex~st~ng farms and open new
- 8 land to settlement; it will also provide the first
direct link between Puerto Cortes on the Caribbean in
the north with El Salvador and Guatemala in the south,
and should thus greatly reduce transport costs between
the rapidly developing northwestern region of Honduras
and the other two countries, contributing to the economic
integration of all three.
INOLA
HIGHWAYS
$60 million credit
signed June 21, 1961
The credit will cover half the cost of improvements
to the National Highways of India during the first 3-1/2
years of the Third Five-Year Plan which began April 1,
1961. The funds will be used mainly for the construction
of about 660 miles of highways, including 19 major bridges,
which will open up some of the less developed parts of
India, improve connections between important agricultural
and industrial centers, and relieve traffic congestion in
the vicinities of the two principal cities and ports,
Calcutta and Bombay.
Demard for rail and road transport rose very rapidly
with the growth of agricultural and industrial production
during the Second Five-Year Plan, and this trend is
expected to continue during the Third Five-Year Plan.
While the railways must expand to meet the growing demand
for long distance and bulk movements of freight, there is
also pressing need for an improved road network to enable
motor vehicle transport to make the shorter hauls and to
move high-value goods. The IDA credit will help to finance
works to eliminate some of the major deficiencies in the
lS,OOO-mile National Highways system which links the main
centers of population. All the works are located in the
region of the Gangetic Plains in northern India, and in
coastal areas around Calcutta and Bombay where population
density is highest, and where 40% of India's vehicles
are registered.
- 9 -
INDIA
IRRIGATION
$6 million credit
signed September 6, 1961
The credit will assist in financing the drilling
and equipping of 800 tubewells for the irrigation of
320,000 acres of land in Uttar Pradesh, the most populous
State in India and one which produces about a third of
the country's wheat and sugar and about half the barley.
The wells will be built and operated by the State's
Irrigation Department which has had long and successful
experience in tubewell irrigation. The project should
make possible a substantial increase in the agricultural
output of the State. The Government of India is re-lending the equivalent of the credit to the State of Uttar
Pradesh for 12 years, at 4-1/8% interest per annum.
INDIA
IRRIGATION
$8 million credit
signed November 22, 1961
This credit will assist in financing the Salandi
project for the irrigation of about 225,000 acres in
the State of Orissa in eastern India. The Government
of India will re-lend the equivalent of the credit to
the State of Orissa, repayable over 10 years, including
3 years grace, at 4% interest per annum. The area is
now under dry farming and produces only one crop a year;
crop failures are frequent because of the unreliability
of rainfall. With irrigation, double cropping will be
possible on almost 40% of the land; higher yields should
be obtained for rice, the main crop, and new crops will
be introduced. The project includes the construction of
a dam on the Salandi River, a 45-mile main canal and
about 450 miles of distribution canals and related
structures. The State of Orissa will also provide
technical assistance to farmers who will use the irrigation
water.
INDIA
IRRIGATION
$4.5 million credit
signed November 22, 1961
The credit will help to finance completion of the
Shetrunji project for the irrigation of 86,000 acres in
an arid but fertile area of the State of Gujarat in
western India. The Government of India will finance 50%
of the cost of the project; the equivalent of the credit
- 10 will be applied against this contribution and will be
re-lent to the State of Gujarat, repayable over 10 years,
with 3 years grace, at 4% interest per annum. Some of
the civil works, including a dam across the Shetrunji
River, have already been built. The work being undertaken to complete the project involves the building of
about 94 miles of main and distribution canals, houses,
workshops, buildings, and service roads. The State of
Gujarat will provide technical services to farmers to
bring about prompt utilization of the available water.
INDIA
IRRIGATION AND DRAINAGE
$10 million credit
signed November 22, 1961
With the introduction of perennial irrigation in
the 19th century, the Punjab became one of the chief
agricultural Statesin India. The extension of irrigation
and the building of embankments for roads, railways and
town sites, in the absence of adequate drainage, has
caused the water table to rise, with the result that waterlogging is severe over wide areas of the State and agricultural production has been thereby reduced. The high water
table has also aggravated the problem of flooding which
occurs in years when the monsoon is heavy. The State
Government of the Punjab is now constructing a system of
adequate surface drainage and building embankments to
keep rivers in their channels. The project being assisted
by the IDA credit includes the construction of 17 miles of
such embankments, the enlargement of 300 miles of existing
drains, and the excavation of 2,000 miles of new drains.
The Government of India is re-lending the equivalent of
the credit to the State of Punjab, repayable over 30 years,
including 5 years grace, at 4-1/2% interest per annum.
INDIA
POWER
$18.5 million credit
signed February 14, 1962
The credit will assist in financing an expansion of
the electric power system of the Damodar Valley Corporation
(DVC), a semi-autonomous governmental organization established in 1948 to execute a unified scheme for the development
of the Valley. The Government of India and the States of
Bihar and of West Bengal provide capital for the DVC
construction program in the form of non-repayable advances
- 11 -
at about 4-1/2% per annum; the credit will represent
part of the Government's contribution.
The Damodar Valley is an area of some 9,250 square
miles lying northwest of Calcutta. DVC has already
completed several projects there for the generation and
transmission of electric power and for irrigation and
flood control, assisted by earlier World Bank loans
totaling a net amount of $49.2 million. The IDA credit
will help to finace the addition of a l40,000-kilowatt
generating unit at the existing l65,000-kilowatt Durgapur
thermal power station, and the expansion of transmission
facilities. The project forms part of DVC's expansion
program during India's Third Plan under which DVC plans
to increase the capacity of its plants to 1,084,000
kilowatts, or more than double present capacity. This
will be sufficient to meet the needs of its system by
1965, after which further expansion will be necessary to
meet the requirements of the Damodar Valley area, now
the site of four steel mills and many other heavy
industries based on the rich mineral deposits of the Valley.
INDIA
IRRIGATION
$15 million credit
signed June 29, 1962
The credit will assist in financing a project being
carried out by the State of Bihar to improve and extend
the Sone irrigation system in the western part of the
State, making possible the irrigation of about 1,000,000
crop-acres annually.
The Sone project area is located just west of the
city of Patna on the Sone River, a tributary of the
Ganges, and has been under irrigation for over 80 years.
The primary reason for the present project is that the
existing diversion weir needs to be replaced: the loss
of water from leakage, along with heavy siltation, has
led to serious operational difficulties. A new diversion
barrage will now be built and the canal system, now
comprising about 427 miles of canals on one side of the
river and 1,235 miles on the other, is being remodeled
and extended. The project should result in much higher
- 12 crop yields and, when the water is fully utilized, the
annual gross value of production will be nearly double
the present level of 207 million rupees ($43 million).
For this type of project, the Government of India provides
604 and the State of Bihar 40% of the finance; the Indian
Government contribution, part of which the IDA credit will
finance, is repayable by the State of Bihar over 7 to 15
years, at 4% interest per annum.
INDIA
IRRIGATION
$13 million credit
signed July 18, 1962
The credit will help to complete an irrigation
project to supply 152,000 acres in the Purna River Valley
in the State cf Maharashtra, and to provide a 15,000kilowatt hydroelectric power station. The Purna project
will introduce irrigated agriculture to a drought-stricken
area in the western part of the Indian high plateau. The
resulting higher yields in crops are expected to increase
the value of production about sixfold. The project
includes the construction of two dams on the Purna River,
a SO-mile main canal and about 250 miles of distribution
canals with associated works. Provision is made for a
water management program, to be carefully administered
with the help of a consultant, to avoid dangers of waterlogging and salinity. In addition, the State will provide
services to farmers in the project area to improve farming
practices and to meet their requirements for fertilizer
and for agricultural credit.
The Government of India customarily finances 60% of
the cost of irrigation schemes of this type and the IDA
credit will be part of this contribution, which is made
available to the State of Maharashtra in the form of
interest-bearing advances repayable in 7 to 15 annual
installments, with an appropriate grace period, at 4%
per annum.
INDIA
POWER
$17.5 million credit
signed August 8, 1962
A World Bank loan of $18.7 million, made in 1959,
assisted construction of the first stage of the Koyna
hydroelectric project, which is now coming into operation
- 13 with installed capacity of 240,000 kilowatts. This
new credit will help to finance the secor;j stage of
the project, increasing its capacity to 380,000
kilowatts. The Government of India is financing the
entire cost of the project through annual advances and
in this case also the IDA credit will form part of the
Government's contribution, which is repayable by the
State of Maharashtra over 20 years, after a ten-year
period of grace, at an interest rate determined annually
and now standing at 4-1/2% per annum. At the completion
of Stage II, the Koyna project, one of the largest hydroelectric undertakings in India, will nearly double the
capacity of the electricity system serving the highly
industrialized Bombay-Poona area. Stage I of the Koyna
project included the construction of the storage dam,
the tunnel system, the underground powerhouse and
associated transmission facilities. Stage II includes
raising the dam to its design height of 280 feet above
the river bed· the installation of four 75,000-kilowatt
units to compiete the power station; the construction of
a second 40,OOO-kilowatt power station at the foot of the
dam; strengthening the transmission system to Bombay; and
construction of transmission lines to the site of a.new
aluminum factory to be built on the west coast 45 m~1es
from Koyna.
INDIA
PORT OF BOMBAY
$18 million credit
signed September 14, 1962
The credit will assist a five-year program to expand
facilities at the Port of Bombay for both cargo and
passenger traffic. The Indian Government will make available
the equivalent of the credit to the Trustees of the Port
of Bombay in the form of a 25-year loan including a 5-year
grace period at 5-3/4% interest per annum. Cargo traffic
through Bombay has doubled in the past ten years to a
total of about 15 million tons. Passenger traffic has
also risen as long-distance passenger liners and cruise
ships have called at the port in increasing numbers in
recent years. The increased traffic has put a great strain
on port facilities, particularly those for handling the
larger cargo vessels.
- 14 The expansion program, based on the recommendations
of consultants, includes the construction of four additional deep-water berths at Alexander Dock; a new ferry
wharf adjacent to Prince's Dock so as to release three
harbor-wall berths for deep-water berthing; an extension
of Ballard Pier to provide an additional berth and a
new building equipped to accommodate passenger and cargo
traffic; dredging of the main harbor channel; new floating craft, including a new drag-suction dredge, two grab
dredges, seven tugs, four harbor launches and one salvagecum-water boat; and improved port equipment and services.
INDIA
TELECOMMUNICATIONS
$42 million credit
signed September 14, 1962
The Indi.an Post and Telegraphs Department will use
the IDA funds for the purchase abroad over the next two
years of equipment to expand and improve telephone and
telegraph services. India has only about 1.2 telephones
per 1,000 inhabitants, compared with an average of 5 per
1,000 for Asia, 46 for the entire world and 300 to 400
for most highly developed countries. The backlog of
registered applications for new subscriber services amounts
to some 50% of those installed and even this percentage
may understate the effective demand.
The telegraph system is equally unable to cope with
demand. Most telegraph offices in India are still
equipped with Morse Code sounders, hand-operated at 25
words per minute, as against the international speed of
66 words per minute by mechanical processes.
Accordingly, the Indian Third Five-Year Plan aims at
increasing telephone subscriber sets from 461,000 to
761,000 between 1961 and 1965 and raising the capacity of
the central exchanges from 412,600 to 758,100 lines. The
telegraph service will be improved by building new telegraph
offices, installing telecommunications equipment operating
at the international speed and considerably expanding the
teleprinter service. The total investment involved is
estimated at the equivalent of $280 million, of which $100
- 15 million is required in foreign currencies. The IDA
credit will be made available to the Posts and Telegraphs
Department as a permanent non-amortized investment by
the Central Government bearing a 4-1/4% annual dividend.
INDIA
RAILWAYS
$67.5 million credit
signed March 22, 1963
India's railway system, one of the world's largest
and most successful, is the country's most important
carrier of long-distance freight and passenger traffic.
Its continuing expansion and modernization is central to
India's development plans. Under both the Second FiveYear Plan (1955-61) and the current Third Plan (1961-66),
the Railways account for about one-fifth of all investments
in the public sector. In particular, the foreign exchange
cost of the Railway's development program has been substantial. Considerable help in meeting it has been
provided by World Bank loans totaling $378 million since
1957 -- by far the largest amount the Bank has lent for
any single enterprise.
The foreign exchange cost of the 1961-66 program is
expected to reach the equivalent of Rs. 2,490 million
($523 million), despite the fact that India, by developing local manufacture of railway equipment, has somewhat
reduced its dependence on imports; electric locomotives,
for instance, are now built by the Indian Railways, and
by 1966 most of the locomotives needed will be locally
produced.
The IDA credit will help the Indian Railways to
finance planned imports of track, materials, components
and equipment needed during 1963 to build locomotives and
rolling stock in India, and also to finance imports needed
for the electrification program and various other items
required to increase carrying capacity.
The IDA credit will be made available to the Indian
Railways in the form of a permanent non-amortized investment
by the Central Government in the Railways bearing a 4-1/2%
annual dividend.
- 16 INDlA
POWER
$20 million credit
signed May 24, 1963
This credit will assist construction of a 120,000kilowatt thermoelectric power station near Kothagudem,
in the center of the large Singareni coal fields in the
northern part of the State of Andhra Pradesh. A reservoir
will also be built to supply cooling water, and a 150mile transmission line will be constructed to connect
wifu other power facilities. The project is part of a
State program to relieve the power shortage which has
for many years hampered the development of industry and
agriculture. Although installed generating capacity in
Andhra Pradesh was increased from 43,000 to 213,000
kilowatts during India's first two Five-Year Plans, this
was insufficient to keep up with demand, which is rising
by about 20% each year. The Kothagudem station has
therefore been designed to allow for further expansion.
Over two-thirds of the future demand is expected to come
from industry.
The project will be built and operated by the Andhra
Pradesh State Electricity Board, assisted by consultants
during construction. The reservoir will be built by the
State Government. As in the Koyna project, the Government
of India is financing the entire cost of the project through
annual aQvances, including the proceeds of the IDA credit.
The State of Andhra Pradesh will repay the advances over a
period of 20 years, after a grace period corresponding to
the construction period, at interest of 4-1/2% annually.
The State Government will make part of the proceeds avai1abl
to the State Electricity Board on the same repayment terms,
but at 5% annual interest.
JORDAN
AMMAN WATER SUPPLY
$2 million credit
signed December 22, 1961
The credit will be used to help finance expansion
and improvement of the water supply system in the capital
city of Amman. The works to be undertaken include the
development of several new wells, pumping stations,
improvement of existing water mains, additional storage
capacity, water treatment facilities and a laboratory for
water testing. The Government of Jordan will re-lend the
equivalent of the credit to the Municipality, repayable
- 17 over 23 years, including 3 years grace, at 4% interest
per annum.
The population of Amman has doubled over the past
ten years. Measures have been taken by the Municipal
Government to adapt the water supply system to the
increase in demand, but they have been inadequate to
provide even a minimum supply of safe water. The project
which the IDA credit will assist falls within the framework of a 25-year master plan and should provide a safe
and dependable supply of water sufficient to meet the
city's requirements until 1972.
JORDAN
AGRICULTURAL CREDIT PROGRAM
$3 million credit
signed December 12, 1963
The credit will be used to provide additional
resources for the lending program of the Agricultural
Credit Corporation (ACC), a semi-autonomous government
agency. Loans to cooperatives and individual farmers are
an important part of a program being carried out by the
government to increase agricultural production and thereby
lessen Jordan's dependence on im?orted foodstuffs which
now account for nearly a third of all imports. ACC will
make loans for the reclamation and improvement of land,
the establishment of permanent plantations, irrigation
and on-farm development. There will also be modest
investments in farm mechanization, in livestock production
and in farm and storage buildings. The Government of
Jordan will relend the proceeds of the credit to the ACC
for 20 years including a 10-year grace period with interest
at 3-1/4% per annum. The ACC will relend the funds at
5-1/4% per annum at maturities appropriate to individual
projects.
JORDAN
WATER SUPPLY
$3.5 million credit
signed December 12, 1963
-
The credit will be used to improve the water supply
systems of Jerusalem and three other cities in Jordan.
The main components of the projects involve collection
works, transmission mains, pumping facilities, reservoirs
and related facilities. Existing distribution systems
in the project areas will also be expanded and improved.
- 18 The Central Water Authority (CWA), the government
agency responsible for the development of Jordan's
water resources, will employ management consultants and
make their services available to the operating agencies,
and also assist in the operation of the water systems.
The IDA credit will cover two-thirds of the total cost,
including all the foreign exchange costs. The remaining
costs will be covered by loans from the Municipal Loan
Fund of the Jordan Development Board and local water
authorities' revenues. The proceeds of this credit will
be relent by the Government of Jordan to the Central
Water Authority for a period of 23 years including a 3year grace period with interest at 4% per annum.
KOREA
RAILWAY DEVELOPMENT
$14 million credit
signed August 17, 1962
The proceeds of this credit are being used by the
National Railroad -- Korea's principal means of transport
for the purchase abroad of 115 passenger cars and 935
coal cars, and for the services of foreign consultants
to assist in the establishment of a modern accounting
and statistical system. These are among the key items in
a five-year program, 1962-66, to increase capacity and
improve efficiency.
The most serious problem facing the Railroad has
been insufficient equipment for the movement of coal and
for passenger cars. Since 1953 coal production has
risen from less than a million tons to over five million
tons; as a result, whereas Korea spent $25 million on
coal imports as late as 1956, it is now an exporter of
coal. This is by far the most important commodity
carried by the Railroad and accounts for almost 50% of
commercial revenue freight. Passenger traffic, which
contributes significantly more to the Railroad's gross
revenues than freight, is also growing. Additional cars
are needed to replace many obsolete passenger cars and
500 converted box cars still in use for passenger service,
as well as to provide for future demand.
- 19 The Government of Korea is re-1ending the proceeds
of this credit to the Korean National Railroad for 25
years including a 1 year grace period at 5-3/4% per annum.
NICARAGUA
MANAGUA WATER SUPPLY
$3 million credit
signed September 7, 1962
This credit will help to finance the first stage of
a 20-year program to increase and improve water supplies
to the capital city of Managua. The program is required
to meet the needs of a growing population, many of whom
are now without piped water, and to reduce the present
high incidence of water-borne disease. The Government of
Nicaragua will re-lend the proceeds of the credit to
Empresa Aguadora de Managua for repayment over 24 years,
including a four-year grace period, at 6% per annum.
The first stage of the project, which is being
carried out with the assistance of foreign engineering
consultants, includes new pumping facilities for
increased supply; substantial improvements and extensions
of the transmission and distribution systems; new service
connections and meters; and improved chlorination and
meter repair facilities. A study of existing and possible
supplementary water supply sources is also to be undertaken.
PAKISTAN
IRRIGATION PROJECT
$1 million credit
signed October 19, 1961
The credit will assist the East Pakistan Water and
Power Development Authority in the execution of the Dacca/
Narayanganj/Demra irrigation project. The project, the
first of its kind in East Pakistan, is designed to increase
agricultural production in a densely populated and poor
area, and will serve as a pilot project for the development
of similar schemes elsewhere in East Pakistan. The equivalent
of the IDA credit will be re-lent by the Pakistan Government
to the Province of East Pakistan, repayable over 32 years,
including 5 years grace, at 4% interest per annum.
- 20 The project will be carried out on an area of
20,600 acres of land immediately southeast of Dacca,
where most of the land is flooded every year to a
depth of from 5 to 15 feet after the monsoon rains.
At present it produces one crop of rice a year and
lies unused until the next annual flood. Under the
development scheme, a dual purpose pumping station
will regulate the supply of water: during the monsoon,
excess water will be pumped out of the area, and during
the rest of the year water will be pumped in from the
Lakhya River for distribution through canals to be
excavated in the area. This ~ll make possible three
crops annually on most of the land and two crops on the
remainder, thus tripling annual average production per
acre.
PAKISTAN
INLAND PORTS PROJECT
$2 million credit
signed November 22, 1961
This credit will help to finance a program to
improve inland water transport in East Pakistan where,
in general, it is the most economical means of transport
and in some areas the only means of transport. About
60% of the two billion ton-miles of freight carried
annually in East Pakistan is transported by watercraft.
In the Greater Dacca area alone, the most important
commercial center, over six million passengers use water
transport annually.
In 1958 the Inland Water Transport Authority was
established as an agency of the East Pakistan Government
to provide river conservancy services, to operate and
improve inland ports, terminals and storage facilities,
and to supervise inland water transportation operations.
The equivalent of the IDA credit will be re-lent by the
Pakistan Government to the Province of East Pakistan,
repayable over 25 years, with 5 years grace, at 4% interest
per annum, to assist the first phase of the Authority's
program to be carried out under Pakistan's Second FiveYear Plan. The principal works to be undertaken consist
of the installation of cargo and passenger facilities at
the five main inland river ports, Dacca, Khulna, Narayanganj,
- 21 Barisal and Chandpur. The IDA credit will also pay
for the services of experts to assist the Authority
for. a period of at least tw~ years, and for a study of
nav1gable waterways that W1ll lead to recommendations
for detailed surveys.
PAKISTAN
$18 million credit
DRAINAGE AND SALINITY CONTROL
signed June 29, 1962
This credit will assist a project being carried out
by the West Pakistan Water and Power Development Authority
to restore the productivity of more than 300,000 acres
of farmland in the Khairpur area in West Pakistan.
Khairpur is located on the left bank of the Indus River
near the Sukkur Barrage, about 300 miles north of Karachi,
and is part of the Indus Basin, the most important area
of irrigation in Pakistan. The Basin extends 800 miles
northward from the mouth of the Indus River on the
Arabian Sea to the Salt Range Mountains and has been under
large-scale perennial irrigation since the turn of the
century. Lack of suitable drainage facilities has led to
the progressive deterioration of several million acres of
fertile land in the last ten years.
The project area comprises 355,000 acres of land
which has been under irrigation since 1932. The water
table is now less than five feet from the surface over
130,000 acres, and is rising at an average rate of nearly
four inches annually. As the water table rises, evaporation
leaves a residue of salt in the soil; as a result, about
20% of the project area has so far gone out of production
and there has been a general decline in crop yields;
continued deterioration of the soils would endanger the
livelihood of tens of thousands of families.
The Khairpur project aims to lower the groundwater
level through pumping and drainage. In addition, salt
concentrations in surface soils will be flushed out by
heavy irrigation and drainage. The project will not only
prevent a further decline in productivity, but will make
possible an increase in farm production valued at 52
million rupees ($11 million) annually. The equivalent of
the credit will be re-lent by the Pakistan Government to
the Province of West Pakistan, repayable over 30 years,
including 5 years grace, at 4% interest per annum.
- 22 PAKISTAN
INDUSTRIAL ESTATES
$6.5 million credit
signed November 2, 1962
The development of estates to accommodate small and
medium-sized industrial enterprises, with the objective
of increasing their productive efficiency, is a feature
of Pakistan's Second Five-Year Plan (1960-65). Such
enterprises employ about 80% of Pakistan's industrial
workers and account for about 40% of industrial production,
and many of them manufacture items that are produced in
highly mechanized establishments in industrialized countries.
The IDA credit will be used by the West Pakistan
Industrial Development Corporation (WPIDC) for the
development of two industrial estates near Lahore, for
loans for the purchase of machinery and equipment by
enterprises settling on the estates and for the provision
of technical and managerial assistance to estates in other
areas of West Pakistan. Each estate will cover about 100
acres and will accommodate from 300 to 350 enterprises.
WPIDC will provide certain common production facilities,
and assist in obtaining credit and raw materials and in
marketing.
The proceeds of the credit will be made available to
the Industrial Development Corporation by the Government
of Pakistan through the West Pakistan Provincial Government.
An estimated $5.3 million, which will be used for capital
requirements, will be repaid by WPIDC to the Provincial
Government over a period of 25 years, including five years
of grace, with interest at 4% a year. The balance of about
$1.2 million will be made available by the Provincial
Government to WPIDC as a grant for technical assistance
facilities and services.
PAKISTAN
FLOOD CONTROL
$5 million credit
signed June 26, 1963
This credit will assist a project to protect about
400,000 acres of cultivated land in East Pakistan from
flooding by the Teesta and Brahmaputra Rivers. The project
- 23 should enable farmers in the area to increase the net
value of crop production by the equivalent of $6
million annually, mainly in rice production, most of
which is locally consumed.
An earthen embankment 135 miles long is to be
constructed along the right banks of the Teesta and
Brahdmaputra Rivers. Eight regulators will be installed,
two for the discharge of internal drainage water and six
for controlled intake of flood water. The project also
includes the provision of technical assistance and
extension services to farmers to enable them to obtain
the maximum advantage from the flood protection and to
guide them in the establishment of satisfactory cropping
and rotation patterns and improved agricultural practices.
The project will be built and operated by the East
Pakistan Water and Power Development Authority. The
credit will be re-lent on IDA terms by the Central
Government of Pakistan to the Province of East Pakistan,
which will re-Iend an equivalent amount to the Authority
for repayment over a period of 25 years, including a fiveyear grace period, with interest at 4% a year.
PAKISTAN
FLOOD CONTROL
$9 million credit
signed July 26, 1963
The credit will finance half the cost of a flood
protection, drainage, and irrigation project for 135,320
acres of flat deltaic plain, near Chandpur in East
Pakistan. As a result of floods during the monsoon and
too little rain in the winter, together with primitive
farming practices, yields per acre are extremely low,
although the soil is potentially highly productive. The
controlled distribution of water to farms in the area
will make it possible to grow crops throughout the year
and greatly increase agricultural output. When the project
is in full operation, farm incomes will be doubled in one
of the most densely populated agricultural districts of
the world.
- 24 The project, which includes 108 miles of compacted
earth embankments, is expected to take 3 years to complete,
at a total cost estimated at the equivalent of $18.2
million. It will be financed from the proceeds of the
IDA credit, together with additional funds advanced by
the Provincial Government of East Pakistan to the East
Pakistan Water and Power Development Authority, which
will execute and operate the project. The proceeds of
the credit will be relent on the same terms by the Central
Government to the Provincial Government, which will in
turn relend the funds to the East Pakistan Water and
Power Development Authority for 25 years, including a 5year grace period with interest at 4% a year.
PAKISTAN
WATER SUPPLY
$50 million credits
signed August 16, 1963
These two credits, totaling $50 million, will assist
in financing water supply and sewerage projects in the
cities of Dacca and Chittagong in the Province of East
Pakistan: $26 million for the Dacca project and $24
million for that in Chittagong. Dacca is the capital and
leading commercial center, and Chittagong is the main
port in the Province. The availability of sewerage
facilities and an adequate supply of pure water in these
cities should improve health, increase individual
productivity and earnings, and help to create conditions
favorable to further commercial and industrial growth.
To ensure that the new systems will be run efficiently
as single units, the Provincial Government will establish
for each city a Water Supply and Sewerage Authority, which
will be responsible for carrying out the project and
operating the facilities. The total cost of the Dacca
project is estimaLed at the equivalent of $50 million;
the estimated cost of the Chittagong project is equivalent to $43 million. The IDA credits will finance the
foreign exchange requirements; the local currency costs
will be covered by loans from the Provincial Government
and by the Authorities' own resources.
The Government of Pakistan will relend the proceeds
of the IDA credits to the Province of East Pakistan,
and the Provincial Government in turn will relend an
equivalent amount to the Dacca and Chittagong Water Supply
- 25 -
and Sewarage Authorities. The Dacca Authority will
repay its loan to the Provincial Government in rupees
over 20 years, after a 5-1/2 year grace period, with
interest at 3-1/2 per cent a year. The Chittagong
Authority will repay its loan in rupees over a period
of 25 years, after a 5-1/2 year grace period, with the
same interest rate; the longer repayment period is
justified by the higher investment relative to the lower
population density and different geographic conditions
in Chittagong.
PARAGUAY
CATTLE DEVELOPMENT
$3 million credit
signed December 26, 1963
This credit equivalent to $3.6 million will help
finance a program to improve and increase cattle
production. IDA funds will be used for a project to
be carried out over a 3-year period to provide facilities
basic to rational cattle management on a large number of
selected ranches in Paraguay. Investment in cattle
production is the quickest means of strengthening Paraguay's
economic position since cattle raising is the country's
principal industry and the main source of foreign exchange
earnings, accounting for as much as one-third of total
foreign exchange earnings in recent years.
The total investment of $6 million, $3.6 million
from IDA and $2.4 million from domestic sources,
represents a large inj ection of capital into the most
vital sector of the economy. It will provide new
employment opportunities for a large number of people and
also increase exports of meat products thereby providing
needed foreign exchange.
Most of the IDA credit will be lent to ranchers to
assist in financing facilities needed to improve livestock
management. Loans will be for 12 years including a 4year grace period at 9% per annum. A small portion of
this credit will be lent to contractors to finance imports
of machinery needed to build stock watering facilities.
These loans will be for 3 to 5 years with interest at 9%.
All loans will be made by the Central Bank which will
- 26 utilize funds received in repayment of loans financed
from the IDA credit in a revolving fund to make further
loans for ranch development, for a period of 20 years
from the date of the IDA credit.
PARAGUAY
HIGHWAY PROGRAM
$6 million credit
signed October 26, 1961
The credit will help to finance the cost being
incurred by the Paraguayan Government for the improvement
of the country's most important highway, between the
capital city of Asuncion and Encarnacion, the second
largest town. The highway crosses the eastern section
of Paraguay, connecting with a number of feeder roads
which serve a heavily populated area containing some of
the country's best farming and cattle-raising land. With
the exception of a 40-mile section built to all-weather
standards with the assistance of a World Bank loan in
1951, this is a narrow, dirt or gravel road, sections of
which are closed during the rainy season. With the
assistance of the IDA credit, the highway will be widened
and given a permanent bituminous surface over the remaining 190 miles, making it passable in all seasons; a new
two-lane bridge will be built over the Tebicuary River
where now all vehicles must cross by one primitive ferry.
The credit will also be used for the purchase of imported
maintenance equipment.
SUDAN
AGRICULTURE
$13 million credit
signed June 14, 1961
The Roseires Dam project on the Blue Nile provided
the occasion for the first joint IDA-World Bank operation,
the IDA credit being extended in conjunction with a Bank
loan of $19.5 million. The German Government also took
an important share in this operation by providing, through
Kreditanstalt fOt \{iederaufbau, a long-term loan equivalent
to $18.4 million. A total of $50.9 million is thus being
made available to the Sudan to finance this important
extension of irrigation, on which depends the future
development of the country.
- 27 The water to be stored by the dam, which will
cross the Blue Nile at a point about 66 miles downstream
from the Ethiopian border, will more than double supplies
available for irrigation during periods of seasonal
shortage. It will make it possible to bring nearly
900,000 acres under irrigation for the first time, and
also greatly to increase yields and diversify crop
production in other areas where water supplies are at
present inadequate. The dam will be about ten miles long,
with a concrete central section 196 feet high and more
than two-thirds of a mile long. Because of work interruptions in flood seasons, construction is expected to
take several years.
SWAZILAND
HIGHWAY PROJECT
$2.8 million credit
signed March 14, 1962
Swaziland, a British dependency in southern Africa,
has an area of 6,700 square miles and a population of
250,000. There is as yet no railway and the territory
is completely dependent on road transport. Since 1958
the Government has been carrying out a construction
program to improve the roads, particularly the main trunk
roads. This credit will help to finance the construction
to all-weather standards of the most important highway in
Swaziland, extending 112 miles across the country from the
South African borden on the west to the Mozambique border
on the east. The new highway will stimulate economic
growth and facilitate external trade. It will link the
most productive agricultural, forestry and mineral areas
with the largest township, and will open new land for
cultivation.
SYRIA
HIGHWAY DEVELOPMENT
$8.5 million credit
signed December 26, 1963
The credit will help to finance the improvement of
two of the most important highways in Syria: the road
from Damascus to Aleppo, the country's principal northsouth trunk highway, and the road from Aleppo to Raqqa,
the transport route for produce corning from the main
agricultural areas in the east. The improvement~ shoul~
reduce vehicle operating costs, achieve substant1al sav1ngs
in road maintenance expenditures, and expedite the movement
- 28 -
of goods between Syria's largest cities and between
producing and marketing centers. IDA funds will also
finance consultants' services for a program to
reorganize and strengthen the Department of Highways
and Bridges, and for an over-all survey of the country's
roads to serve as a basis for future highway investment.
TANGANYIKA
EDUCATION
$4.6 million credit
signed December 20, 1963
This credit, the first by the World Bank group in
Tanganyika since it became independent in 1961, will
help finance the construction and equipment of two new
schools and the extension and equipment of 53 others.
This will provide an additional 6,900 places for students.
The expansion of secondary schools is vital to the
economic development of Tanganyika. To meet the pressing
demand for secondary school graduates the government has
initiated a program to increase the number of secondary
school places to 24,300 in the five-year period, July
1962 to June 1967. Several countries have agreed to
provide qualified teachers for the schools.
TANGANYIKA
HIGHWAY PROJECT
$14 million credit
signed February 5, 1964
The credit will help to finance the construction
or improvements of eight main roads totaling 734 miles
in length in various parts of the country. The roads
are important both for production and trade as they
serve areas now producing cash crops or areas with a
potential for agriculture, the country's chief economic
activity. As a result of the project there will be better
routes for a growing volume of traffic, lower transport
costs, faster transportation of agricultural produce to
consuming centers and ports, and savings in road maintenance
costs.
The wide dispersion of Tanganyika's population of
9.5 million requires an extensive transportation network.
The railways serve only parts of the country and the road
system is of primary importance. The present road system
extends over 21,000 miles, of which nearly half are main
roads serving as trunk routes between provincial centers
and with neighboring countries. The quality of the main
roads is very uneven with paved or gravel sections near
the towns and long stretches between towns with only
earth surfacing.
-- 29 The road project being assisted by IDA is a step
toward the construction of an interconnected highway
system that can be used in all kinds of weather. The
works to be carried out include some realignment, the
replacement of a number of poorly sited and narrow
bridges, improvement of drainage and the paving of
certain sections.
The project will be executed by the Public Works
Division of the Tanganyika Ministry of Communications,
Power and Works, assisted by consultants on part of the
work. The total cost is estimated at the equivalent of
$18.8 million. The IDA credit will finance the foreign
exchange requirements, estimated at about 75% of the total
cost; the local currency costs will be met by the Government
of Tanganyika. With the exception of one road, which is
already being built by the Public Works Division, all the
roads will be built by contractors selected on the basis
of international competitive bidding. The roads are
scheduled for completion by June 1967.
TUNISIA
SCHOOL CONSTRUCTION
$5 million credit
signed September 17, 1962
Tunisia's development planning lays great stress on
education; the country has few natural resources and
improvement of the living standards of the four million
inhabitants is particularly dependent on the development
of human skills to form the basis for more productive
agriculture and the expansion of industry and services.
During the next three years the Government intends to
spend $31 million equivalent on the expansion of secondary
and middle education and the IDA credit will help to meet
this cost, providing just over half the financing for the
construction and equipment of six schools, for which there
is particularly urgent need. In Tunis, the credit will
finance the extension of a teachers' training college, a
secondary school emphasizing mathematics and technical
courses, and a new secondary school for girls. In Sfax,
the second largest city of Tunisia, it will finance
exp~nsion of the Technical School.
The ~emainder of t~e
credit will be used to build two large mlddle schools 1n
the provinces.
The credit was the first made by IDA for school
construction, and also the first operation in Tunisia by
either IDA or the Bank.
- 30 TURKEY
INDUSTRY
$5 million credit
signed November 23, 1962
The Turkish Government will re-lend the proceeds of
this credit to the Industrial Development Bank of Turkey
(lOB), which will in turn be enabled to lend foreign
exchange to industrial enterprises in Turkey which require
imports of equipment from abroad. lOB will pay the
Government 5-1/2% per annum on amounts advanced and will
re-lend at 87. with maturities appropriate to the individual
projects.
lOB was established in 1950 through the joint efforts
of Turkish private interests, the Government and the World
Bank, and has made a substantial contribution to industrial
development. It has become an important institutional
source of long-term finance for private industry; it has
pioneered in familiarizing Turkish industry with more
modern techniques of investment planning; and it has earned
a reputation as a competent adviser on the technical and
financial aspects of industrial enterprises. Its credits,
loans and equity participations have helped to bring
additional private savings into industry, and thus to
raise output and increase employment.
TURKEY
POWER
$1.7 million credit
signed February 1, 1963
The credit will help Turkey to increase the supply
of electric power to help meet the demands of growing
industries and commerce in the Adana area. It will
enable the Cukurova Electric Company to install a new
l8,000-kilowatt unit in its hydroelectric generating plant
on the Seyhan River, and to meet the cost of engineering
studies for two new power stations.
The area served by the company is a rich agricultural
region with prosperous new industries which, along with a
new port at Mersin equipped with a grain elevator and a
flour mill, have led to rising demand for electric power.
The company is now unable to meet peak demand, obliging
large consumers to operate their own high-cost diesel
units. Even the addition of the new unit at Seyhan will
not fully meet power requirements. Plans are being drawn
up for two additional plants: a thermal station at Hersin
and a hydroelectric plant on the Kadincik River near Tarsus.
- 31 -
The Turkish Government will re-lend the proceeds
of the credit (except for the amount reserved for
engineering s7udies) to the Cukurova Electric Company.
The company w1ll repay this loan over a period of 20
years with interest at a rate of 5-1/2% a year.
TURKEY
IRRIGATION
$20 million credit
signed May 31, 1963
Increased agricultural production has been given
the highest priority in Turkey's development plans, both
to meet domestic requirements and for export. This
credit will finance the first stage of a project on the
Adana Plain, under which 170,000 acres will be drained
and irrigated, making possible a large increase in the
volume and value of commercial crops.
The Adana Plain, potentially one of the richest
areas in Turkey, lies on the southern coast between the
Taurus Mountains and the Mediterranean Sea. The Seyhan
River flows through the center of the Plain and the whole
area is being developed as a multipurpose project comprising flood control, electric power and irrigation. Some
irrigation works were built in the 1940's. Levees for
flood control were completed in 1953, and the construction
of a dam on the Seyhan River, an electric power plant and
transmission lines were finished in 1956 with the help of
a World Bank loan of $22.9 million.
The Government of Turkey will be responsible for
carrying out the new project, which is estimated to cost
the equivalent of $50 million. The publi~ drainag~ and
irrigation works should be completed and 1n operat1on by
March 1966. Most of the on-farm works should be finished
two years later.
RELENDING
TERMS
ON
IDA
Annex B
PROJECTS
From Inception through February 29, 1964
Country
Project
Amount and
Date of Credit
Sub-Borrower
Terms of Sub-Lending
China
Irrigation
$3.7 million
Aug. 30, 1961
Local Irrigation
Authorities
12% per annum for 20 years
China
Dredging
$2.2 million
Aug. 30, 1961
Province of Taiwan
12% per annum; 15 years,
including 3 year grace period
China
Water Supp ly
$4.4 million
Sept. 6, 1961
Taipei Water Works
12% per annum; 23 years,
including 3 year grace period
China
Industrial
Development
$5.0 million
Dec. 1, 1961
China Development
Corporation
9.8% per annum, 30 years; CDC
will relend at 14%, maturities
appropriate to individual
projects
India
Irrigation
$6.0 million
Sept. 6, 1961
State of
Uttar Pradesh
4-1/8% per annum; 12 years
India
Irrigation
$8.0 million
Nov. 22, 1961
State of Orissa
4% per annum; repayable in 10
years, including 3 year grace
period
India
Irrigation
$4.5 million
Nov. 22, 1961
State of Gujarat
4% per annum; repayable in 10
years, including 3 year grac~~
period
~
India
Irrigation
$10.0 million
Nov. 22, 1961
State of Punjab
4-1/2%; repayable in 30 years,
including 5 year grace period
India
Power
$18.5 million
Feb. 14, 1962
Damodar Valley
Corporation
4-1/2% per annum.
No amortization, funds considered nonrepayable advance by Central
Government to DVC.
- 2 -
Country
India
India
Project
Irrigation
Purna
Irrigation
Amount and
Date of Credit
Sub-Borrower
Terms of Sub-Lending
$15.0 million
June 29, 1962
State of Bihar
4% per annum; annual advances
repayable over 7 to 15 years,
after appropriate grace period
$13.0 million
July 18, 1962
State of Maharashtra
4% per annum; 7-15 years plus
grace period appropriate to
individual projects
India
Koyna Power
$17.5 million
August 8, 1962
State of Maharashtra
4-1/2% per annum; 30 years,
including 10 year grace period.
Rate of interest subject to
annual determination.
India
Port of
Bombay
$18.0 million
Sept. 14, 1962
Trustees of the
Port of Bombay
5-~/4%
India
Teleconnnunications
$42.0 million
Sept. 14, 1962
Posts and Telegraphs Department
4-1/4% dividend payable to
Central Government; no amortization, funds considered as
permanent investment by Central
Government in Posts and Telegraphs Department.
India
Railway
Improvement
$67.5 million
March 22, 1963
Indian Railways
4-1/2% dividend payable to
Central Government; no amortization, funds considered as
permanent investments by
Central Government in Railways.
per annum; 25 years,
including 5 year grace period
Project
Amount and
Date of Credit
Sub-Borrower
India
Kothagudem
Power
$20.0 million
May 24, 1963
State of Andrha
Pradesh
4-1/2% per annum; 20 years
after grace period corresponding to construction period.
State of make funds available
to State Electricity Board at
5%, same maturity.
Jordan
Water Supply
$2.0 million
Dec. 22, 1961
City of Auman
4% interest per annum;
repayable over 23 years
including 3 years grace period
Jordan
Water SUpply
$3.5 million
Dec. 12, 1963
Four Municipalities
4% per annum; 23 years,
including 3 year grace period
Jordan
Agricultural
Credit
$3.0 million
Dec. 12, 1963
Agricultural Credit
Corporation
3-1/4% per annum; 20 years,
including 10 year grace period;
Corporation to sub-lend at
5-1/4%, maturities appropriate
to individual projects.
Korea
National
Railroad
$14.0 million
Aug. 17, 1962
Korean National
Railroad
5-3/4% per annum; 25 years
beginning 1964
Nicaragua Managua Water
Supply
$3.0 million
Sept. 7, 1963
Empresa Aguadora
de Managua
6% per annum; 24 years,
including 4 year grace period
Pakistan
Irrigation
$1.0 million
Oct. 19, 1961
Province of
East Pakistan
4% interest per annum;
repayable over 32 years,
including 5 year grace period
Pakistan
Inland Ports
$2.0 million
Nov. 22, 1961
Province of
East Pakistan
4% interest per annum,
repayable over 25 years,
including 5 year grace period
Country
Terms of Sub-Lending
- 4 -
country
Project
Amount and
Date of Credit
Sub-Borrower
Terms of Sub-Lending
Pakistan
Drainage and
Salinity Control
$18.0 million
June 29, 1962
Province of
West Pakistan
4% per annum; repayable over
30 years, including 5 year
grace period
Pakistan
Industrial
Estates
$6.5 million
Nov. 2, 1962
West Pakistan
Industrial Developments Corporation
4% per annum; 25 years,
including 5 year grace
period
Pakistan
Brahmaputra
Flood Control
$5.0 million
June 26, 1963
East Pakistan Water
and Power Development Authority
4% per annum; 25 years,
including 5 year grace
period
Pakistan
Chand pur
Irrigation
$9.0 million
July 26, 1963
East Pakistan Water
and Power Development Authority
4% per annum; 25 years,
including 5 year grace
period
Pakistan
Dacca Water
Supply
$26.0 million
Aug. 16, 1963
East Pakistan Water
and Power Development Authority
3-1/2% per annum; 25-1/2 years,
including 5-1/2 year grace
period
Pakistan
Chittagong
Water Supply
$24.0 million
Aug. 16, 1963
East Pakistan Water
and Power Development Authority
3-1/2% per annum; 30-1/2 years,
including 5-1/2 year grace
period
Paraguay
Cattle
Development
$3.6 million
Dec. 26, 1963
Private Ranchers
9% per annum; 12 years,
ing 4 year grace period
Turkey
Development of
Private Industry
$5.0 million
Nov. 23, 1962
Industrial Development Bank of Turkey
5-1/2% per annum, maturity
related to maturities of Bank's
sub-loans; Bank to sub-lend at
8%, maturities appropriate to
<"';~"""'''''L-''-:::
-rurkey
-....;"""--~
~"&.I:r~.a
PCJ_r-
",,--A -"'-- "'-
$1.7
Ini11ioor>.
Feb.
1.
1963
-~
...... a::._
~~:.o:--=:-""--",,,,,,,,,~-=-
C~k~~~~~
C<>ID.pa..~y
E1~~tr~~
~ ... ...I~ .... ~ ,.1 .... 1
~~~~
,...,,.-n;
~f
5-1/2%
includ~
#:>I"'r~
S~~-L~~d~~S
pe~
~~~~;
2.0
years
-
-
Amount and
Country
Project
Turkey
NOTE:
5
Cukurova
Power
Date of Credit
$1.7 million
Feb. 1, 1963
Sub-Borrower
Cukurova Electric
Company
Terms of Sub-Lending
5-1/2% per annum; 20 years
IDA credits not contained in this listing, funds were utilized directly by
department or agency of Central Government, without relending arrangements.
On
- 3 -
and exchange tenders will receive equa.l 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.
Tbe 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
trom the sale or other disposition of Treasury bills does not have any special
treatment, as such, under the Internal Revenue code of 1954.
The bills are subject
to estate, inheritance, gift or other excise taxes, whether Federal or state, but
are exempt from all taxation now or hereafter imposed on the principal or interest
thereof by any state, or any of the possessions of the United states, or by any
local taxing authority.
For purposes of taxation the amount of discount at which
Treasury bills are originally sold by the United states is considered to be interest.
Under Sections 454 (b) and 1221 (5) of the Internal Revenue Code of 1954
the amount of discount at which bills issued hereunder are sold is not considered
to accrue until such bills are sold, redeemed or otherwise disposed of, and such
bills are excluded from consideration as capital assets.
Accordingly, the owner
of Treasury bills (other than life insurance companies) issued hereunder need include in his income tax return only the difference between the price paid for such
bills, whether on original issue or on subsequent purchase, and the amount actually
received either upon sale or redemption at ma.turity 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.
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 gua.ra.nty of payment by an incorporated bank or trust company.
Izmnediately 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 $
less for the additional bills dated
ing until maturity date on
$
l~OO
or less for the
Janua~ 1964
Ju~y ~64
182
@&
)
,(
91
~oo
or
days remain-
xt&ti
and noncompetitive tenders for
-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 ten-
ders in accordance with the bids must be made or completed at the Federal Reserve
Banks on ___~A~n~Y~i~1_~~~1~3~6~4~______ ' in cash or other immediately available funds or
in a like face amount of Treasury bills maturing __A_p_r_i_l,:,,;~r±:::l1~9_6_4;;,.-____
Cash
TREASURY DEPARTMENT
Washington
March 25, 1964
FOR IMMEDIATE RELEASE,
)(J()f)(::)OOCOOOOo€X)~OODOOOOOOOOOOOOcX
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 $ 2z200ti!0'000 , or thereabouts, for
cash and in exchange for Treasury bills maturing
of $2,199,569,000
01
W
April fif1964
,in the amount
,as follows:
ro
-day bills
(to maturity date) to be issued
in the amount of $
lz30~00zOOO,
or thereabouts, represent-
ing an additional amount of bills dated
and to mature
Ju~y ~1964
wnount of $ 800 ,~OOO
,
April 2tt1964
Janua~
1964
,
, originally issued in the
,the additional and original bills
to be freely interchangeable.
, or thereabouts, to be dated
182 -day bills, for $ 900,09&.£00
0&k
~~
A;Pri1~1964
,and to mature ____0_c_t_ob_e..;;.;tm~1~...;1-9;...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 bea.rer 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 Standard time,
Monday. March 30. 1964
p;if
Tenders will not be received at the Treasury Department, Washington.
Each tender
must be for an even multiple of $1,000, and in the case of competitive tenders the
price offered must be expressed on the basis of 100, with not more than three
TREASURY DEPARTMENT
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
~,200,OOO,OOO, or thereabouts, for cash and in exchange for
Treasury bills maturing April 2, 1964,
in the amount of
$ 2,199,569,000, 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 January 2,1964,
mature July 2,1964,
originally issued in the
$ 800,466,000, the additional and original bills
interchangeable.
April 2, 1964,
representing an
and to
amount of
to be freely
18~day bills, for $ 900,000,000,
or thereabouts, to be dated
Apri12,1964,
and to mature October 1, 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
(m::lturitv value).
Tenders will be received at Federal Reserve Banks and Branches
up to the closing hour, one-thirty p.m.,
Eastern Standard
time,
Monday, March 30, 1964.
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
~sponsible and recognized dealers in investment securities.
Tenders
from others must be accompanied by payment of 2 percent of the face
amount of Treasury bills applied for, unless the tenders are
accompanied by an express guaranty of payment by an incorporated bank
or trust company.
D-1176
- 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 Depart~nt· 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,OOOor less for the additional bills dated
January 2,1964
01-days remaining until maturit~ date on
July 2, 1964)
and noncompetitive tenders for ~OO,OOO
or lesa 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
April 2, 1964,
made or completed at the Federal Reserve Banks on
in cash or other immediately available funds or in a like face
amount of Treasury bills maturing April 2, 1964.
Cash and
exchange tenders will receive equal treatment. Cash adjustments
will be made for differences between the par value of maturing
bills accepted in exchange and the issue price of the new bills.
The income derived from Treasury bills, whether interest or
gain from the sale or other disposition of the bills, does not have
any exemption, as such, and loss from the sale or other disposition
of Treasury bills does not have any special treatment, as such,
under the Internal Revenue Code of 1954. The bills are subject to
estate, inheritance, gift or other excise taxes, whether Federal or
State, but are exempt from all taxation now or hereafter imposed on
the principal or interest thereof by any State, or any of the
possessions of the United States, or by any local taxing authority.
For purposes of taxation the amount of discount at which Treasury
bills are originally sold by the United states is considered to be
interest. Under Sections 454 (b) and 1221 (5) of the Internal
Revenue Code of 1954 the amount of discount at which bills issued
hereunder are sold is not considered to accrue until such bills are
sold, redeemed or otherwise disposed of, and such bills are excluded
from consideration as capital assets. Accordingly, the owner of
Treasury bills (other than life insurance companies) issued hereunder
need include in his income tax return only the difference between
the price paid for such bills, whether on original issue or on
subsequent purchase, and the amount actually received either upon
sale or redemption at maturity during the taxable year for which the
return is made, as ordinary gain or loss.
Treasury Department Circular No. 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 fr
any Federal Reserve Bank or Branch.
000
- 2 -
June.
Holders of silver certificates may redeem them for silver
bullion at the monetary value of $1.292929292 an ounce at the
New York and San Francisco Assay Offices, not at the Treasury.
Thus, holders of silver certificates may continue to exercise
tneir legal rignt
[0
demand an amount of silver precisely equal
to the silver content of a standard silver dollar.
wnile silver dollars have not been minted since 1935,
nearly one-nalf billion of these coins have been put into circulation in the last hundred years.
Tilese silver dollars will
continue to circulate freely alongside their paper money counterparts.
The Congress has been considering appropriations that
would provide for further coinage of silver dollars.
Meanwhile,
mint facilities are currently being fully utilized in supplying
the subsidiary and minor coins that serve an essential function
as a means of payment in all parts of the country, and for which
there are no substitutes.
The eventual disposition of the existing small Treasury
stocks of silver dollars will be carefully considered in the
liEnt of existing circumstances at a later date.
Ut\.nf1'
'3/2.)/64
TK.t:ASU[(Y 1'0 H.ELJEEH SILVEH. CEK1'IfICr\Tc.:j Il~
BULLI01'i ll'LS'l'EA.l) Of SILVEK DOLLARS
treasury Secretary Douglas Dillon tonight announced that
silver certificates will nenceforth be redeemed in silver
bullion only.
The Secretary explained that Treasury's dwindling stock
of silver dollars nas been channeled to the greatest extent
feasible to certain western states
~lere
silver dollars has been traditional.
some circulation of
However, heavy drains by
coin collectors and dealers have now reduced the Treasury's
stock of silver dollars, which was about 28 million on
January 1, to approximately 3 million, virtually all of which
have special numismatic value.
'l'hese silver dollars cannot be
equitably distributed by redeeming silver certificates.
More-
over, tlLeir releas e vlOuld not serve any purpos e in adding to
the supply ot circulating coins, since these silver dollars
\vith special numismatic value would De entirely absorbed by
coin dealers and collectors.
In providing that silver certificates will now be redeemed
only in silver bullion, the Secretary of the Treasury has exercised an option provided in legislation passed by Congress last
TREASURY DEPARTMENT
FOR IMMEDIATE RELEASE
March 25, 1964
TREASURY TO REDEEM SILVER CERTIFICATES IN
BULLION INSTEAD OF SILVER DOLLARS
Treasury Secretary Douglas Dillon tonight announced that silver
certificates will henceforth be redeemed in silver bullion only.
The Secretary explained that Treasury's dwindling stock of silver
dollars has been channeled to the greatest extent feasible to certain
Western states where some circulation of silver dollars has been
traditional. However, heavy drains by coin collectors and dealers
have now reduced the Treasury's stock of silver dollars, which was
about 28 million on January 1, to approximately 3 million, virtually
all of which have special numismatic value. These silver dollars
cannot be equitably distributed by redeeming silver certificates.
Moreover, their release would not serve any purpose in adding to the
supply of circulating coins, since these silver dollars with special
numismatic value would be entirely absorbed by coin dealers and
collectors.
In providing that silver certificates will now be redeemed
only in silver bullion, the Secretary of the Treasury has exercised
an option provided in legislation passed by Congress last June.
Holders of silver certificates may redeem them for silver bullion at
the monetary value of $1.292929292 an ounce at the New York and
San Francisco Assay Offices, not at the Treasury. Thus, holders of
silver certificates may continue to exercise their legal right to
demand an amount of silver precisely equal to the silver content of
a standard silver dollar.
While silver dollars have not been minted since 1935, nearly
one-half billion of these coins have been put into circulation in the
last hundred years. These silver dollars will continue to circulate
freely alongside their paper money counterparts: The Congress ha~
been considering appropriations that would prov~de for further ~o~nage
of silver dollars. Meanwhile, mint facilities are currently be~ng
fully utilized in supplying the subsidiary and minor coins that serve
an essen t ia 1 func t ion as a means of paymen t in a 11 parts of the
country, and for which there are no substitutes.
The eventual disposition of the existing small Treasury stocks of
Silver dollars will be carefully considered in the light of existing
circumstances at a later date.
D-1177
000
-
,)
-
eX'lnpL froIn all tn.;;nLlon noYT or hereafter .imposed on the principal or interest
thereof by any State, or any of the pOGGesGions of the United States, or by any
10cn1. to...'Cinc; author 1 ty.
For purposes of taxation the amount of discount at ,.,hlch
Treasury ',)111s are orie;inally sold by the United States is considered to be intcrcs
UndlT Section:::; 'l~A
[lnd 1221 (5) of the Internal Devcnuc Code of 1%4 the [1Jnoun L
(1)
of discount 8.t ,.,hic11 bills issued hereunder are sold is not considered to accrue
unti 1 such bi 11e are Gold, redeemed or othenri se di sposed of, and such bills are
c~~clucled
fr""'1 conGJdcrntion
0.8
capi Lal assets.
AccordinGly, the owner of Treasury
bills (other tho,n life insurDnce companies) i G sued hereunder need include in his in
come
tf',X l'e
turn only the difference bet'Teen the price paid for such billa} "'he Lhcr
on orie iO:1J, In:;ll('
upon sale
mndc,
1.1:::;
OJ'
on subsequent purcl1ase, and the amount actually received cithc
01' rcdr~r'1ption
at maturity durinc; the taxable year for which the return ts
on1 Lnal~r LD,in or loss.
Tl'e~LGU1,y JlcllCl.rLmcnt Circular No. -118 (current revision) and this notice, prc-
Gcr11)e the tenl:] of the
Copies of the
'~irculnr
Tre~>,sillJ'
bi l.1D and Govern the conditions of their iSGue.
meW be obtained from any Federal Deserve Bank or Branch.
- 2 -
of Treasury bills applied for, unless the tenders are accompanied by an express
guaronty of payment by an incorporated bank or trust company.
All bidders are required to
~aree
not to purc hase or to sell, or to make any
~
~reements with respec~ ~o the pUl'chase or sale or other disposition of
at a speclflc rate or price
of this iSsuo/) until after one-t.hirty p.m., Eastern Standard time,
bills
any
Fridru-
April 3, 1964
Immediately after the closine hour, tenders will be opened at the Federal Reserve Banks and Branches, follOlfinG vrhich public announcement will be made by the
Treasury Department of the amount and price ranee of accepted bids.
ting tenders
~dll
of the Treasury
be advised of the acceptance or rejection thereof.
eA~rcssly
Those submitThe Secretary
reserves the rieht to accept or reject any or all tenders,
in whole or in part, and his action in any such respect shall be final.
these reservations, noncompetitive tenders for $ 200,000
W
Subject to
or less without stated
price from any one bidder will be accepted in fUll at the average price (in three
~cimals)
of accepted competitive bids.
Payment of accepted tenders at the prices
offered must be made or completed at the Federal Reserve BanJ:S in cash or other immediately available funds on
April 8, 1964
, provided, however, any qualified
ffi
deposi tary will be penni tted to mrute payment by credit in its Treasury tax and loan
not more than 50 percent of the amount of
~count for/Treasury bills allotted to it for itself and its customers up to any
amount for which it shall be qualified in excess of existing deposits when' so notified, by the Federal Reserve Bank of its District.
The income derived from Treasury bills, whether interest or gain from the sale
Oll does not have any exemption, as such, and loss.
or other disposition of the b 1 s,
bills does not have any special treatfrom the sale or other disposition of Treasury
The bills are subject to
~nt, as such, under the Internal Revenue Code of 1954.
estate, inheritance, gift or other exc
ise taxes, whether Federal or state, but are
D",,:rArm i:8IlT
TnFJ',sm':Y
~lnGl1fl1~tOll
March 26, 1964
nx:a.¥~
TREASURY OFFERS $1 BILLION ONE-YEAR BILLS
Thc Tl'cc.G11.l'Y Department, u~r th:i.G puhl-i.c noticc, inviGcz tcndero fo1' ~; 1,000,000,
C0:){
or thcl'CD1)outs, of'
-dr.y TreCI.Sul'Y bjllG, to
357
xm
COlt}x:tic.ive r...nd noncompetitive bidcJJ.nL;
~Cl'.j.<..:~~
'rill be datcd
ull~:1 ·~l1c
J)cl'cinn:..:tcr pl'ov:i.dcd.
0.:;
The bill:> of this
, enu lrill mc.tm'c
April 8, 1964
5(i'6
'i'c.cc C;ilO'Lmt ,rill be ]!D,:;'·u.bJ.c \.rLi,JlOlrL
::;1, 000,
~'O I',) on 1:,' , t'11(\ in dcno~iLi.no.V.on::; of
icrmco. on a discO"lmt bO.81s unu(
1)0
.i.nL(~J·''-::3L.
The::
~rlll
March 30&0[965
be iGuucd in OCO,l'C)
::;~j, 000, :\1.0, 000, :;i50, 000, :;ilOO, 000, :~500, (
Cl1t~ ::;].,000,000 (r.lo.t.Ul'i.L:,' value).
~:cndc:c's
\TIll be
l'CCC.i. '!'.cd Cl.t
o,1c-:';hil'"v:,r p. r'I., Eo.::rtc:;:n
llOlXc',
Fcclc)"'.l I:'::3C2. "Ve
~Jt[Cnu:.'.J.'(l ·l;j.JlC,
nc'nL~.; LncJ. B:,:~lJ1chcG
ev,~n rmJ-tiple of
.. !1~::;J.:,
rJ.T',C
<a,ooo,
I.:"'~'jlchcs 011
It
lOO, IrlGh not
:i.G
'LU'ccd thc,l; tcmlcI',:; be 1I[1.(lc on the printed
c;cnc:,:cc11~r
vidc<l the nCI.1eG of the Ctu.rl:.o;-nel'c
0.2.'(:
l.1C',Y
~ct
Tenders 1r1.l1 be l'ccei veu ,:rlthout dcpos.Lt
:L'1'0;.1
o~hcrs
j'l0~:C
0:1.'
-Lhon three dccir.1o.1s, e. [.,
aa.
fOJ.":1,:) till
£',:Fl.)l:i. cO.t~.on thcI'ci'ol'.
En1.1.:il1[; in:>tltul:.ion:.;
ond
Each tcnder must be 1'0.
aml in the co.se 0; CO,Jl)eU.l:.:i.vc tender::; the price offercu
ue c;;IXcCf~Ged on the b2.f,;5.:3
L.ionr; LlO\)' not be neeu.
clo~;.lni
Tcndo:::
Friday, A&l 3, 1964
,lllJ. not be recd ved c.t the 'J'rc8.GUry Dep[u'tmcnt, lla.r:.hinGton.
0.11
up to the
)'ccponsible
Mel
:::uUl;t:i.·l;
tcn<..1.cI'c
:;'01'
nccount of customer:>
pl'O~
.l·o:,' Lh in such t.ei1c1crs.
Others than bDrildn[
J~l'om
nnd tr\.wt conrpsnier
incorporated
bo.nl~c
l'ecocnizctl dcoJ.(;j:s in investment GecUl'i ties.
mu::;t be c.cCOY,Ilx',niecl 11;;' lX'.~j.len(, oi' 2 pel'cent of the :['c.cc DJnount
Tenders from
TREASURY DEPARTMENT
FOR lMMED lATE RELEASE
TREASURY OFFERS $1 BILLION ONE-YEAR BILLS
The Treasury Department, by this public notice, invites tenders for
~l,OOO,OOO,OOO, or thereabouts, of 357-day Treasury bills
to b '
d
d'
b'
'
e ~ssue
on a, ~scount a~~s under co~petitive and noncompetitive bidding as
here~nafter prov~ded,
The b~lls of this series will be dated April 8
1964, and will mature March 31, 1965, when the face amount will be
'
payable without interest. They will be issued in bearer form only and
~ 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 Standard time, Friday,
April 3, 1964. Tenders will not be received at the Treasury Department,
Washington. Each tender must be for an even multiple of $1,000, and in
the case of competitive tenders the price offered must be expressed on
the basis of 100, with not more than three decimals, e. g., 99.925.
Fractions may not be used. It is urged that tenders be made on the
printed forms and forwarded in the special envelopes which will be
supplied by Federal Reserve Banks or Branches on application therefor.
Banking institutions generally may submit tenders for account of
customers provided the names of the customers are set forth in such
tenders. Others than banking institutions will not be permitted to
submit tenders except for their own account. Tenders will be received
without deposit from incorporated banks and trust companies and from
responsible and recognized dealers in investment securities. Tenders
from others 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 trus t company.
All bidders are required to agree not to purchase or to sell, or
to make any agreements with respect to the purch~s~ or sale or ~ther
,
disposi tion of any bills of this issue at a spec:-f~c rate, or prlce, unt~l
after one-thirty p.m., Eastern Standard time, Fr~day, Aprll 3, 1964.
Immediately after the closing hour, tenders ,will be,opened at the
Federal Reserve Banks and Branches, following wh~ch publlc a~nouncement
will be made by the Treasury Department of the amount and pr~ce range
of accepted bids. Those submitting tenders will be advised of the
n'1l78
- 2 -
acceptance or rejection thereof. The Secretary of the Treasury expres:
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 t(
these reservations, noncompetitive tenders for $200,000 or less withoul
stated price from anyone bidder will be accepted in full at the
average price (in three decimals) of accepted competitive bids. Paymet
of accepted tenders at the prices offered must be made or completed at
the Federal Reserve Banks in cash or other immediately available funds
on April 8, 1964, provided, however, any qualified depositary will be
permitted to make payment by credit in its Treasury tax and loan
account for not more than 50 percent of the amount of Treasury bills
allotted to it for itself and its customers up to any amount for which
it shall be qualified in excess of existing deposits when so notified
by the Federal Reserve Bank of its District.
The income derived from Treasury bills, whether interest or gain
from the sale or other disposition of the bills, does not have any
exemption, as such, and loss from the sale or other disposition of
Treasury bills does not have any special treatment, as such, under the
Internal Revenue Code of 1954. The bills are subject to estate,
inheritance, gift or other excise taxes, whether Federal or State, but
are exempt from all taxation now or hereafter imposed on the principal
or interest thereof by any State, or any of the possessions of the
United States, or by any local taxing authority. For purposes of
taxation the amount of discount at which Treasury bills are originally
sold by the United States is considered to be interest. Under
Sections 454(b) and 1221 (5) of the Internal Revenue Code of 1954 the
amount of discount at which bills issued hereunder are sold is not
considered to accrue until such bills are sold, redeemed or otherwise
disposed of, and such bills are excluded from consideration as capital
assets. Accordingly, the owner of Treasury bills (other than life
insurance companies) issued hereunder need include in his income tax
return only the difference between the price paid for such bills,
whether on original issue or on subsequent purchase, and the amount
actually received either upon sale or redemption at maturity during
the taxable year for which the return is made, as ordinary gain or los
Treasury Department Circular No. 418 (current revision) and this
notice, prescribe the terms of the Treasury bills and govern the
conditions of thier issue. Copies of the circular may be obtained fro
any Federal Reserve Bank or Branch.
000
TREASLJRY DEPARTMENT
FOR IMMEDIATE RELEASE
March 26, 1964
TREASURY ANNOUNCES ONE BILLION NEW CASH BORROWING
AND FEGULAR ONE-YEAR BILL
The Treasury Department announced today that it is offering an additional
billion, or thereabo11ts, of the 3-7/810 notes due August 13 1965 that were
orisinally issued as part of the February refunding offering ~hich ~s made
two months ago. Public holdings of this issue are $2.2 billion, a comparatively small amount for a quarterly maturity. The additional ~l billion offeri~g will bring the total maturing on this quarterly date more ~earlY in line
wlth ot~er quarterly maturities Rnd help to broaden the market tradeability
of the lssue. The notes are to be offered at a price of $99.70 (to yield
about 4.10~), plus accrued interest from February 15, 1964, to April 8, 1964
($5.64217 per ;1,000).
~l
Subscriptions will be received for 9E!:. day only, ~ Tuesday, March 31.
All subscriptions for the notes addressed to a Federal Reserve Bank or Branch,
or to the Treasurer of the United States, Washington, D. C. 20220, and placed
in the mail before midnisht March 31 will be considered as timely.
Payment may be made through credit to Treasury Tax and Loan Accounts and
will be due on April 8.
At the same time the Treasury announced its customary monthly offering
of $1 billion of one-ye3r Treasury bills. The auction will occur on Friday,
April 3. Payment wi 11 be due on Hednesday, April 8, and may be made with
50% credit to Treasury Tax and Loan Accounts. Full details are contained in
the Treasury's release inviting tenders for the bills.
Interest on the notes will be paid on August 15, 1964, and February 15
and August 13, 1965. The notes will be made available in registered as well
as bearer form. All subscribers requesting registered notes vill be required
to furnish appropriate identifying numbers as required on tax returns and
other documents submitted to the Internal Revenue Service.
subscriptions to the 3-7/8% Treasury Notes, Series D~1965, from banking.
institutions for their own account, Federally-insured savlngs and loan aSSOClations, states, political subdivisions or inst~entalit:es thereof~ pu~lic
pension and retirement and other public funds, lnternatlonal organlzatlons in
which the United States holds membership, foreign central banks and foreign
States, Government Investment Accounts and dealers who make primary markets
in Government securities and report daily to the Frderal Reserre Bank .of New
York their positions with respect to (~vernment securities and horrowlngs
thereon will be received withollt deposit. Subscriptions from all others must
,
D-1179
- 2 be accompanied by payment of 2 percent of the amount of notes applied for,
not subject to withdrawal until after allotment. Subscriptions from commercial banks for their own account will be restricted in each case to an
amount not exceeding 50 percent of the combined capital (not including
capital notes or debentures), surplus and undivided profits of the subscribing bank.
The Secretary of the Treasury reserves the right to reject or reduce
any subscription, to allot less than the amount of notes applied for, and to
make different percentage allotments to various classes of subscribers.
Commercial banks and other lenders are requested to refrain from making
unsecured loans, or loans collateralized in whole or in part by the notes
subscribed for, to cover the deposits required to be paid when subscriptions
are entered, and banks will be required to make the usual certification to
that effect.
All subscribers to the notes are required to agree not to purchase or
to sell, or to make any agreements with respect to the purchase or sale or
other disposition of the securities subscribed for under this offering at a
specific rate or price, until after midnight March 31.
'.\
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TREASURY DEPARTMENT
roR RELEASE A. M. NEWSPAPERS,
Tuesdq, March 31, 1964.
March 30, 1964
RESULTS OF TREASURY I S WEEKLY BILL OFFERING
The Treasury Department announced last evening that the tenders for two series of
Treasury bUls, one series to be an additional issue of the b1ll. dated January 2, 1964,
land the other series to be dated April 2, 1964, which were offered on March 25, were
opened at the Federal Reserve Banks on March 30. Tenders were invited for $1,300,000,000,
or thereabouts, of 91-day bills and for $900,000,000, or thereabouts, of 182-day bills.
The details of the two series are as follows:
RANGE OF ACCEPrED
COMPETITIVE BIDS:
High
Low
Average
91-day Treasury bills
maturing July 2, 1964
Approx. Equiv.
Annual Rate
Price
99.114
3.505%
99.106
3.531%
99.109
3.525%
Y
182-~ Treasury bills
maturing October 1, 1964
Approx. Equiv.
Price
Annual Rate
98.131
3.697%
98.120
3.719%
98.124
3.710% Y
89% of the amount of 91-day bills bid for at the low price was accepted
6($ of the amount of 182-day bills bid for at the low price was accepted
TOTAL TENDERS APPLIED FOR AND ACCEPl'ED BY FEDERAL RESERVE DISTRICTS:
District
Boston
New York
Philadelphia
Cleveland
Richmond
Atlanta
Chicago
St. Louis
Minneapolis
Kansas City
Dallas
San Francisco
TOTALS
Accepted
Applied For
Accepted
$ 14,096,000
$
5,644,000 $ 5,644,000
1,4~,834,000
904,334,000
1,338,009,000
104,009,000
23,066,000
8,066,000
1,391,000
2,391,000
28,196,000
26,996,000
19,156,000
14,024,000
20,338,000
20,338,000
2,321,000
2,311,000
31,161,000
36,699,000
9,331,000
8,291,000
182,514,000
125,194,000
132,433,000
61,033,000
42,882,000
31,112,000
9,594,000
8,094,000
20,312,000
18,592,000
4,1)6,000
3,736,000
19,482,000
19,462,000
13,552,000
11,512,000
25,696,000
19,786,000:
8,775,000
7,375,000
ll3,200,OOO
69,105,000:
81,371,000
66,981,000
$1,961,917,000 $1,300,460,ooo!l $1,632,319,000 $901,407,000
') titive tenders accepted at the average price of 99.109
~ Inc111des $2ll,215,OOO noncam·~iti tenders accepted at the average price of 98.124
~ Includes $55,142,000 noncompe
ve
the same amount invested, the return on
On a coupon issue of the same lengthfan)d i%r for the 91-day bills, and 3.8l~, for the
these bills would provide yields 0 . • 6 ,
uoted in terms of bank discount with
182-day bills. Interest rates on b~1Sf~~eqbi11S p~ab1e at maturity rather than
the return rela.ted to the face amoun . 0
t al nUIllber of days related to a 360-day
the amount invested and their length Jon ac U t
and bonds are canputed in terms
year. In contrast, yields. on certifiC~~:ia~~ ~~ number of days remaining in an
of interest on the amount ~nvested~ b
of days in the period, with semiannual
interest payment period to the act
n~de~ involved.
compounding i f more than one coupon per 0
B
y
D-1180
Applied For
$ 44,096,000
£I
NEW
BOR~OWING
TOMORROW ID$NTIFIED AS ADDITIONAL ISSUE
In response to numerous inquiries, the Treasury
Department stated that the additional amount of $1 billion
3-7/8% notes maturing August 13, 1965, on which the
subscription books will be open March 31, will be identifiable
as an additional issue.
This will be helpful to taxpayers
in distinguishing the additional issue from the notes
already outstanding.
The additional amount of notes will,
of course, be subject to the provisions of section 1232 of
the Internal Revenue Code pertaining to original issue
discount
0
TREASURY DEPARTMENT
FOR IMMEDIATE RELEASE
NEW BORROWING TOMORROW IDENTIFIED
AS ADDITIONAL ISSUE
In response to numerous inquiries, the Treasury
Department stated that the additional amount of $1 billion
3-7/8% notes
~aturing
August 13, 1965, on which the
subscription books will be open March 31, will be
identifiable as an additional issue.
This will be helpful
to taxpayers in distinguishing the additional issue from the
notes already outstanding.
The additional amount of notes
will, of course, be subject to the provisions of section
1232 of the Internal Revenue Code pertaining to original issue
discount.
000
D-118l
@FedFRASER