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PRESS RÊteASE-S ,
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L IB R A R Y
ROOM 5030
JUN 7 1973
TREASURY DEPARTMENT
m
\
DepartmentoftheTREASURY
WASHINGTON. D C 20220
TELEPHONE W04-2041
FOR IMMEDIATE RELEASE
October 2, 1972
UNITED STATES AND CANADA TO DISCUSS REVISION
OF INCOME TAX CONVENTION
The Treasury Department announced today that representatives
of the United States and Canada will meet in Washington in late
November to begin discussions on revision of the income tax
convention between the two countries.
The existing convention between the United States and
Canada was signed in 1942.
It has been modified by supplementary
protocols signed in 1956 and 1966.
The forthcoming negotiations
will include a general review of the convention, and will take
into account recent substantial reform of Canadian tax law as
well as changes made in the United States law in recent years.
Also considered will be the "Draft Double Taxation Convention"
published in 1963 by the Fiscal Committee of the Organization
for Economic Cooperation and Development (OECD), and recent
conventions concluded by the United States with other industrial
countries.
In this connection, interested persons may wish to
consult treaties recently entered into with Japan, Belgium and
Norway.
The Treasury said that persons who wish to offer comments
or suggestions concerning the proposed convention should submit
their views in writing to Under Secretary of the Treasury
Edwin S, Cohen, U.S. Treasury Department, Washington, D.C. 20220,
by November 3, 1972.
oOo
S-59
I DepartmentoftheTREASURY
K H IN G T O N , D.C. 20220
ATTENTION:
TELEPHONE W04-2041
FINANCIAL EDITOR
October 2, 1972
?0R RELEASE 6:30 P.M.
RESULTS OF TREASURY’S
WEEKLY BILL OFFERING
The Treasury Department announced that the tenders for two series of Treasury
July 6, 1972
, and
;he other series to be dated
October 5, 1972 , which were invited on September 26, 1972
rere opened at the Federal Reserve Banks today. Tenders were invited for $2,300,000,000,
>r[thereabouts, of 9]^day bills and for $1,800,000,000, or thereabouts, of
182-day
•ills. The details of the two series are as follows:
Jills, one series to be an additional issue of the bills dated
¡AjrGE OF ACCEPTED
¡(flPETITIVE BIDS:
High
Low
Average
91-day Treasury bills
maturing January 4, 1973
Approx. Equiv.
Price
Annual Rate
98.852
98.831
98.837
4.542$
4.625$
4.601$
:
|
:
:
:
:
1/ :
182 -day Treasury bills
maturing April 5, 1975
Approx. Equiv.
Price
Annual Rate
97.434
97.420
97.431
5.0.76$
5.103$
5.082$
1/
96$ of the amount of 91-day bills bid for at
2$ of the amount of 182-day bills bid for at
OQjAL TENDERS APPLIED FOR AND ACCEPTED BY FEDERAL R
District
1Boston
New York
Philadelphia
■Cleveland
Ri chmond
Atlanta
Chicago
Sit. Louis
Minneapolis
|%nsas City
iDbllas
San Francisco
TOTALS
Applied For
$
27,945,000
2,941,345,000
35,115,000
19,375,000
10,425,000
13,335,000
293,300,000
51,585,000
49,440,000
31,535,000
35,305,000
129,715,000
Accepted
$
13,945,000
1,839,825,000
15,115,000
19,195,000
8,425,000
12,235,000
174,860,000
42,335,000
42,320,000
20,000,000
15,305,000
96,795,000
$3,638,420,000
$2,300,355,000 a/
: Applied For
: $
16,340,000
:
3,005,760,000
:
26.645.000
:
41.590.000
;
13.120.000
:
13.885.000
252.275.000
:
53.335.000
:
42.315.000
:
31.725.000
:
34.365.000
:
150.455.000
:
$3,681,790,000
Accepted
>
1,140,000
1,618,235,000
6 , 120,000
10.700.000
5.120.000
8.285.000
72.090.000
29.335.000
7.455.000
14.060.000
10.305.000
17.210.000
$1,800,055,000 b/
I Includes $178,105,000 noncompetitive tenders accepted at the average price of 98.837
f deludes $100,835,000 noncompetitive tenders accepted at the average price of 97.431
1 pese rates are on a bank discount basis. The equivalent coupon issue yields are
4*72 $ for the 91-day bills, and 5.29$ for the 182-day bills.
. ■■
mmm
DepartmentoftheJR U SlIR Y
KINGTON,
D.C. 20220
TELEPHONE W04-2041
October 3, 1972
FOR IMMEDIATE RELEASE
TREASURY ISSUES COUNTERVAILING DUTY PROCEEDING NOTICE
ON CARBON STEEL AND HIGH STRENGTH STEEL PLATES FROM MEXICO
Issuance of a countervailing duty proceeding notice
covering carbon steel and high strength steel plates from
Mexico, items used principally in heavy steel manufacturing
processes, such as shipbuilding, was announced today by
Assistant Secretary of the Treasury Eugene T. Rossides.
The notice states that the Treasury Department has
received information which raises a question as to whether
the Government of Mexico makes certain payments, bestowals,
rebates, or refunds upon the manufacture, production, or
exportation of carbon steel and high strength steel plates,
which constitute the payment or bestowal of a "bounty or
grant" within the meaning of the United States countervailing
duty law.
If Treasury finds that a bounty or grant has been
paid or bestowed, the imports in question would be subject
to an additional (countervailing) duty equivalent to the net
amount of the bounty or grant.
The notice invites submission of comments in time to
be received within 30 days from the date of publication in
the Federal Register.
It is scheduled to be published on
October 4, 1972.
If the Treasury Department finds that bounties or grants
are being paid or bestowed within the meaning of the counter
vailing duty law, it will issue a countervailing duty order
proclaiming the amount of countervailing duties to be assessed
on imports of carbon steel and high strength steel plates
from Mexico.
The countervailing duty would become effective
30 days after publication of the order in the Customs Bulletin,
During the representative period January 1972 through May
1972, imports of carbon steel and high strength steel plates
from Mexico were slightly more than $12,300,000.
# # #
“SI
DepartmentoftheTREASURY
J aSHINGTON, M
B
M
B
TELEPHONE W04-2O4^|
1
W
FOR RELEASE AT 12 NOON CDT
TUESDAY, OCTOBER 10, 1972
EXCERPTS FROM REMARKS BY JAY N. WOODWORTH
DEPUTY TO THE ASSISTANT SECRETARY OF THE TREASURY
FOR ECONOMIC POLICY
BEFORE A JOINT MEETING OF THE MOBILE CHAMBER OF COMMERCE
AND THE MOBILE JAYCEES
MOBILE, ALABAMA
OCTOBER 10, 1972, 12 NOON CDT
The United States is in the midst of a rapid economic
expansion.
It now seems that 1972 will prove to be a
boom year by virtually every measure of business and
economic activity.
In real terms, output of the Nation's
goods and services over the past 9 months has risen at
the fastest rate since 1958.
The number of new jobs has
grown at an exceptionally rapid pace.
The number of unemployed has started to decline.
Productivity has advanced
rapidly after a long hiatus.
Our international trade
balance finally appears to have stabilized following years
of deterioration, and I believe the stage has been set for
further improvement.
Much of the credit for this improved economic pattern
can be given to the launching of the New Economic Program
some 13 months ago.
It was designed to spur real economic
activity -— and this goal has been met.
The Program con
tained numerous incentives which were meant to create jobs —
and employment has risen by nearly 2 3/4 million over the
past year.
It was designed to reduce unemployment -and the unemployment rate has started to decline and should
continue falling to roughly five percent by the end of
this year.
The Program sought to reverse our balance of
trade deficits — and this effort is succeeding.
In each
instance, these favorable developments show that progress
is being achieved on our most fundamental economic problems.
The New Economic Program has also made considerable
progress in the Nation's fight against inflation -- a
problem that directly affects more Americans than any other
(OVER)
2
part of the Program.
Price and wage inflation have
slowed markedly in the first year of the Economic
Stabilization Program.
Consumer prices, which rose by
more than six percent in 1969, are now advancing at a
three percent rate.
While the battle against inflation
is not yet won, developments on the price front now indi
cate that the goal can be achieved of reducing the infla
tion rate below three percent by the end of this y e a r .
A real test of the Stabilization Program's accomplish
ments is in the rapid gain in consumer purchasing power.
The average worker's real take-home pay -- after adjustment
for both inflation and taxes — had actually declined
between 1965 and 1970 in spite of the large wage gains
during this period, because prices and taxes rose even
more strongly.
Since early 1971, however, the consumer's
spendable income has advanced at a rapid four percent
annual rate, indicating that the consumer is finally
winning in the fight against the inflation disease.
There is room, of course, for a further slowing of
inflation and for a further reduction in the unemployment
rate.
Indeed, some of the early forecasts for 1973 that
we have seen in the last few days indicate that the New
Economic Program will make further progress next year.
Along with projections for a continued and rapid economic
expansion in 1973, many business economists also expect
further progress in our fight against unemployment and
inflation.
There are many reasons for the exceptional rise in
employment that we have had in the past year and that ;
business economists are projecting for 1973.
Most business
analysts would agree that one important reason for our
rapid employment growth is the impact of the investment^tax
credit and liberalized depreciation rules that the President
-and the Congress put into effect last year -- and that a
feW people wish to see repealed.
These policy actions
Were designed to stimulate capital spending and to create
^hew jobs.
Clearly, these goals are being achieved.
A
¿Capital goods boom is now in the making and this boom is
a driving force behind the expansion in incomes, sales,
production, and jobs.
oOo
Secretary of the Treasury George P. Shultz will accept a
plaque commemorating the Main Treasury Building in Washington as
a national historic landmark at a brief ceremony at 2:00 p.m. on
October 18.
The event will take place on the South Portico of
the Building on the plaza surrounding the statue of Alexander
Hamilton, the first Secretary of the Treasury.
In designating the Treasury building as an historic site,
the National Park Service called it an "outstanding example of
Greek Revival civil architecture" in this country, particularly
noting the Ionic colonnade on the 15th Street side.
It is one
of the three oldest Federally-occupied buildings in Washington,
next to the Capitol and the White House.
It was the site of
President Andrew Johnson’s first cabinet meeting and President
Grant's first inaugural ball.
The present Treasury building dates back 136 years to
July 4, 1836 when Congress authorized its construction on the
site east of the White House.
It was deemed eligible for the
landmark designation last February, having been found to
"possess national significance in commemorating the history of
the United States."
Secretary of the Interior Rogers Morton will present the
landmark plaque and certificate to Secretary Shultz, following
a brief program featuring the U.S. Army Band and 3rd Infantry
Fife and Drum Corps.
Deputy Secretary Charls E. Walker will be
master of ceremonies, and Director of the Mint Mary Brooks will
present the Secretaries with a commemorative medal marking the
occasion.
oOo
Departmtnto/theTREASURY J
ISHINGTON, O.C. 20220
H
TPlPPunui:
-»m i
TELEPHONE um.
W04-2041
jf
UV.
FOR RELEASE AT 10:30 A.M.
STATEMENT OF THE HONORABLE EUGENE T. ROSSIDES
ASSISTANT SECRETARY OF THE TREASURY
(ENFORCEMENT, TARIFF AND TRADE ÂFFAIRS, AND OPERATIONS)
FEDERAL BUILDING
DETROIT, MICHIGAN
October 5, 1972
10:30 A.M.
PRESIDENT NIXON'S ANTI-NARCOTICS PROGRAM
IS SUCCEEDING
FIFTEEN-MONTH REPORT OF THE
TREASURY/IRS NARCOTICS TRAFFICKER PROGRAM
1,011 MAJOR TARGETS
Treasury's IRS Narcotics Trafficker Program
has now selected over 1,000 individuals as major
targets for tax investigation.
92 targets were
selected in September to bring the 15-month total
to 1,011 major targets.
On behalf of the Treasury Department, I
congratulate the Detroit Police Department for
its tremendous assistance to the Treasury/IRS
program.
Three-quarters of the 62 targets in
Detroit were referred to us by the Detroit Police
Department.
The tax drive against drug traffickers is
taking the profit out of the heroin traffic.
The President's action program has achieved
a reduction in the amount of heroin in the U.S. -and the tax drive is contributing substantially
to the total effort which has reduced the supply
of heroin in Detroit and throughout the nation.
S-60
The heroin shortage is due, in large part,
to the day in, day out work of the 350,000 State
and local law enforcement personnel of this country,
who are the first line of defense against drug
abuse.
President Nixon's anti-narcotics drive is
succeeding.
The President's action program:
1.
has turned the tide in the war
against drug traffickers.
2.
has galvanized the nations of the
world into action. More has been
done on the international front in
the last three and one-half years
than in the previous 35.
3.
has brought unprecedented pressure
on the drug distribution system.
We have the drug traffickers taking a step
backward and must now redouble the pressure on them.
Today, I am going to highlight the Treasury/IRS
Narcotics Trafficker Program.
1,011 Major Targets and 911 Minor Traffickers
In 43 states, 69 metropolitan areas and the
District of Columbia, 1,011 targets have been selected
by Treasury's Target Selection Committee and referred
to the IRS for intensive tax investigation (see
attached Table I ) 0 Under the direction of IRS
Commissioner Johnnie M. Walters, 494 Treasury Agents
and 112 support personnel are presently conducting
these investigations.
In addition, 911 major traffickers are under
tax action.
$69.3 Million Assessed--$11.7 Million Collected
$69.3 million in taxes and penalties have
been assessed under the program, of which more
than $11.7 million have already been collected.
We are now using the drug traffickers illegal
profits to put them out of business (see attached
Table II).
15 Convictions + 33 Indictments + 48 Prosecution
Recommendations (96)______________________________
Fifteen men have been convicted on criminal
tax charges; 33 other criminal tax cases are
pending in Federal District Courts in New York,
Miami, Detroit, Los Angeles, San Francisco,
Seattle, Boston, Indianapolis, Baltimore, and
Washington, D.C., and in other areas; and another
48 investigations have been completed with pro
secution recommendations (see attached Table II).
During September alone, we achieved the
following results:
92 major targets; $3.8 million in taxes
and penalties were assessed, of which
$767,000 were collected; 7 convictions,
17 indictments, and 16 cases recommended
for prosecution.
In addition, 113
minor targets were placed under tax action.
We believe that this represents a tremendous
achievement.
By focusing attention on the persons
responsible for the narcotics distribution, this
program is making a major additional contribution
to the President's war against drug abuse.
- 4 -
Get Out of the Illegal Drug Traffic or Face Up
to Intensive Tax Investigation______________ _____
The word for the drug traffickers is to get
out of the illegal drug traffic or face up to
intensive tax investigation.
This word should be
spread in every city and town in the United States,
We have institutionalized this program.
Everyone
in this illegal business should realize that he
will be subjected to tough tax scrutiny.
The program*s objectives--to take the profit
out of the illegal traffic in narcotics and thereby
further disrupt
the traffic--are accomplished in
two ways:
1. Major targets: by conducting systematic
tax investigations of middle and upper echelon
narcotics traffickers, smugglers, and financiers.
These are the people who frequently are insulated
from the daily operations of the drug traffic through
intermediaries.
2. Minor targets: by the systematic drive to
seize--to be applied to taxes and penalties owing--the
substantial amounts of cash that are frequently found
in the hands of minor narcotics traffickers, those
below the middle and upper echelon level.
Although all of the penalties and taxes that
have been assessed may not be collected, the impact
of this program on the narcotics traffic is already
substantial and increasing each month.
5
Essential Cooperation of State and Local Police
Treasury has coordinated this tax program
with State and local police, whose more than
350,000 officers constitute the first line of
defense against the internal traffic in narcotics.
The cooperation of State and local police in
identifying key traffickers, in furnishing intelli
gence information on them, and in several cases, in
actually working with our agents on some phases of
the investigations, has been an invaluable contribu
tion to this program.
The police here, as in all parts of the country,
have also been of great assistance to our program by
contacting IRS whenever they have made arrests or
searches, where they have found substantial cash or
other assets in the possession of persons involved
in the drug traffic.
In this manner we have been
able to remove considerable sums of cash from the
drug traffic by applying it to taxes and penalties
owing.
This aspect of our program could not be
effective without the assistance of the local police.
Close Coordination with Other Federal Agencies
We have also coordinated this tax program with
the anti-smuggling drive of our Bureau of Customs,
and the drive against narcotics distribution of the
Bureau of Narcotics and Dangerous Drugs, and the
prosecution efforts of the Tax and Criminal Divisions
of the Department of Justice.
Their cooperation is
an essential ingredient to the success of the program.
The reasons for the substantial results since the
program was initiated are many.
I mention the following:
1.
Morale and dedication of the men and women
of the Internal Revenue Service. .
2.
Direct line organization, coordinated with
all regional and district elements of IRS,
with control of the nationwide program
stemming from Washington.
3.
Streamlined procedures for expedited
investigation and review of cases.
40
Treasury Target Selection Committee system
controlling the selection of major narcotics
traffickers and financiers as targets of
the program.
5.
Cooperation of State and local police
agencies, Customs, BNDD and DALE in
identifying major and minor targets, in
developing intelligence on them, and in
locating cash and other assets in their
possession.
6.
Cooperation of the Department of Justice
attorneys in securing indictments and trying
the cases.
In summary, we are doing the job better and faster
but we are still not satisfied.
This is not the time
to be over-optimistic.
Much more needs to be done in
the war on narcotics.
The Treasury/IRS Narcotics Trafficker Program is
a major enforcement effort, but it must be emphasized
that it is only one part of this Administration's
comprehensive drive against the supply of narcotics
and the demand for narcotics.
7
The President’s Multi-Dimensional War on Drug Abuse
President Nixon started his war on drugs the
first month of his Administration when he
established the Interdepartmental Task Force on
Narcotics, Marijuana and Dangerous Drugs that led
to Operation Intercept in September, 1969, and
Operation Cooperation in October, 1969.
He has
escalated that war with a series of action programs
which have turned the tide on drug abuse.
First, he elevated the drug problem to the
foreign policy level and has taken personal initiatives
in soliciting the cooperation of other governments.
The aim of our diplomatic efforts is to have each
nation do its share and meet its responsibilities
in the worldwide war against drug abuse.
The State Department has done an extraordinary
job in convincing other nations that this is a
worldwide problem which requires the cooperation
of the world community.
On September 18* President Nixon addressed U.S.
drug program coordinators from 55 of our embassies
and said:
" Any government whose leaders participate
in or protect the activities of those who
contribute to our drug problem should know
that the President of the United States is
required by statute to suspend all American
economic and military assistance to such a
regime.
8
MI shall not hesitate to
that law.
I consider keeping
out of the United States just
as keeping armed enemy forces
in the United States."
comply with
dangerous drugs
as important
from landing
These U.S. initiatives have already produced
some tremendous accomplishments by other countries.
France, under former U.S. Ambassador Arthur K.
Watson’s urging, has now made the war on drugs a
priority program.
In March of this year, French
Customs
seized 935 pounds of heroin, the largest
seizure in history, from a boat bound for the
United States, and 321 pounds of morphine at the
Italian border.
A few months later, French narcotics
agents seized 220 pounds of heroin and four function
ing heroin laboratories, one of which was capable
of producing enough heroin to supply one-fifth of
this country’s addicts for a year.
These actions
have made serious inroads on the world drug traffic.
In the opium producing area, we obtained
agreement by the Turkish Government that after
June 1972 there would be no further planting of
opium poppy in Turkey.
Turkish opium has been a
major source of heroin for U.S. addicts.
In Southeast Asia, we have mounted a major
diplomatic and enforcement effort, working closely
with the Governments of Thailand, Laos, and South
Vietnam to bring about destruction of opium supplies
and heroin laboratories and interdiction of the
ground, sea, and air smuggling routes.
Substantial
seizures have been made.
And, most recently, extradition proceedings
have come to a conclusion with the arrival of
Auguste Ricord in New York on September 2,
1972, to face trial in connection with the
smuggling of a substantial quantity of heroin into
the United States.
Second, he placed particular emphasis on the
crucial roles of education, research and rehabilita
tion.
On January 1, 1969, the Federal Government
was funding only 16 treatment programs.
This
number has grown enormously and, as of the end of
FY-1972, there were 321 Federal treatment programs
operating.
Funding in the areas of education,
research and rehabilitation has
also increased
substantially.
More money will be spent on these
programs during this Administration than in all
the preceding years.
For Fiscal Year 1973 alone,
$485.2 million has been requested for programs
in these areas.
This is over 10 times the amount
funded in FY-1969.
-
10
-
Third, he recognized the central role.of the
states and the need for close Federal-State
cooperation in a unified drive against drug abuse.
Through the Law Enforcement Assistance Administra
tion (LEAA), substantial grants have been made to
States for the attack on drug abuse.
Without
doubt, the current shortage of heroin is due,in
large part, to the dedicated efforts of State and
local policemen throughout the country.
Fourth, he provided a substantial increase in
budgetary support for the Bureau of Narcotics and
Dangerous Drugs and the Bureau of Customs and
initiated the Treasury/IRS tax drive on drug
traffickers.
In FY-1973, $244.2 million will be
spent on narcotics-related law enforcement as
compared with $ 20.2 million which was spent in
FY-1969.
Also, he established the Office of Drug Abuse
Law Enforcement in the Department of Justice to
assist in the assault on the street level heroin
pusher working closely with State and local
enforcement agencies.
Fifth, he stressed total community involvement -the private sector as well as governmental agencies -in this anti-drug abuse program.
As part of this
aspect of the program, he has elicited the support
of leading athletes and other celebrities for the
production of anti-narcotic public service advertise
ments which have been especially effective among the
youth.
Sixth, he recommended differentiation in the
criminal penalty structure between heroin and
marijuana, and flexible provisions for handling
first offenders.
This was adopted into law in the
Comprehensive Drug Abuse and Control Act of 1971.
ï
T 31*114CP
Ar)ïT ZWP>
nnmAi
sM/s r
2A3ÄA M A TIJ0£1OHT;:?M
Attached are £ h e ;program |açt,sheets for
Detroit and the following other areas:
Bpston
£:
S j
I
01
°">NeW ¥0£k :i€it$r £}
^Hârtfofd c‘■ ftJ'1 nß^
Baltimore-Wash^iqgpon,
Philadelphia
Pittsburgh btClt*î*H
Newark- Camden
At lan ta «o3 gity.m £ t W
Miami
I n d i a n a p o l i s '5 ;?£“v
e r££ vChJpago,.£;
St. Louis
Albuquerque, jv £q /jq u
Austin
i:
V3
Denver
#* ns î jA
: £os. Angeles-San Diego
5 Phöehi5 1°4c: ■
’0'
I *■
San,. Francigporr,■. *
Seattle
’
.no 1111 v131§Iiiv a|uc-J
°0 o
III
Xr
riajeol'xO waM
D.C.
TABLE I
METROPOLITAN AREAS
STATE
TARGETS
COMPLETED
INVESTIGATICI
ITATI
flew I
Alabama
Mob i1e
Alaska
Anchorage
Arizona
xor-.
Arkansas
M
j
Phoenix-Tücsoh-Yuma
:?.rf-i3 ■'■■■ ■v'löi:?o |.;u'r.tvc5iJ,&%■
Little Rock
2
ifiew t
1
fiew
Colorado
Connecticut
Hartford
14
Delaware
Wilmington
District of Columbia
Washington
Florida
Hawaii
Georgia
Illinois
• {; j t/•
Miami-Tampa-Jacksonville
Pr1ijOs vtJ'C:-'
Honolulu--'-';’ sti:p tit11Â :
niJtîuA/’
Atlanta :
i^wrsn
•c« j/"I ;-j';•-, ,
f.;y
.
Chicago, Springfield
flew Ì
16
7
iNorth
2
45
39
^ .r
5
J 1-*xe -1i.i’v.t
Los Angeles-San Diego
San Francisco-Oakland
i
.'
Denver
California
}
1Ohio
12
5
1
22
Oklab
Orego
5 .
75
22
10
2
29
9
56
5
11
2
Penns
jphode
South
Tenne
Tiexas
Indiana
Indianapölrs-Gary *
Kentucky
Louisville-Covington
Newport
Utah
5
Virgi
13
4
Louisiana
New Orleans
Maine
Bangor
Maryland
Baltimore
12
2
West
Massachusetts
Boston
21
3
Wiscoi
Michigan
Detroit
62
13
Minnesota
St. Paul-Minneapolis
1
Washi
4
Jreasi
Offici
1
Mississippi
Gulfport
Missouri
St. Louis-Kansas City
Nebraska
Omaha
3
Nevada
Las Vegas
3
17
6
TATE
METROPOLITAN AREAS
TARGETS
COMPLETED
INVESTI GATION
3
2
Newark-Camden
66
8
^Jew Mexico
Albuquerque
11
2
flew York
Albany
Buffalo-Rochester
New York City § Suburbs
12
6
2
New Hampshire
Portsmouth
kew Jersey
15
142
39
1
North Carolina
Greensboro-Charlotte
17
Ohio
Cincinnati-Dayton
Cleveland
16
‘
8
Oklahoma
Oklahoma City
3
Oregon
Portland
13
1
Pennsylvania
Philadelphia
Pittsburgh
41
35
2
6
Rhode Island
Providence
1
South Carolina
Columbia
5
Tennessee
Nashville-Memphis
7
îexas
Austin-Houston-El Paso
Dallas
tjltah
Salt Lake City
Virginia
Richmond-Norfolk
Arlington-Alexandria
28
Washington
Seattle
17
■est Virginia
Parkersburg
1
■isconsin
Milwaukee
2
46
4
12
1
2
1,011
■reasury Department
■ffice of Law Enforcement
1
5
194
October 1 , 19 72
TABLE II
Major Target Assessments:
Number
Amounts
Regular Assessments
Jeopardy Assessments 1/
Tax Year Termination 2/
128
40
43
$
Total
211
Minor Target Assessments:
l
8,166,960
18,923,400
8,474,925
$ 35,565,285
3/
Jeopardy Assessments
Tax Year Termination
Total
67
844
$
911
$ 33,775,698
Total Assessments involving Narcotic Traffickers
2,564,152
31,211,546
$ 69,340,983
Seizures involving Narcotic Trafficker :
Major Targets
Currency
Property
Minor Targets
1,902,371
58,738
Total Dollars Seized
8 ,275,057
1, 508,528
$ 11,744,694
Cases Recommended for Prosecution
48
Criminal Cases in U. S. Courts
awaiting Trial
33
Criminal Convictions
15
Total Criminal Cases
96
IV Jeopardy assessments are assessments of taxes made where a return
has been filed or should have been filed, but where circumstances
exist under which delay might jeopardize the collection of the revenue.
2/ Termination of tax year is a computation of the tax due and assess
ment made where the time for filing the return has not become due where
circumstances exist under which delay might jeopardize the revenue.
V These are assessments made as a result of seizures by other law
enforcement agencies of cash or other assets against current income
of narcotic traffickers where delay might jeopardize collection of
the revenue.
Treasury Department
Office of Law Enforcement
October 1, 1972
DETROIT
Major Targets
62
Major Target Assessments
Minor Target Assessments
(12)
1/
(48)
Total Assessments involving Narcotic Traffickers
$
982,138
$1,096,080
$2,078,218
Seizures involving Narcotic Traffickers:
$
Currency
147,927
85,859
Property
Total Dollars Seized
Cases Recommended for Prosecution
Criminal Tax Cases in U. S. Courts
awaiting Trial
Criminal Tax Convictions
Total Criminal Cases
$
233,786
3
4
___ 0
7
JL/ See footnote 3 on Table II
Treasury Department
Office of Law Enforcement
October 1 , 1972
BOSTON
2i
Major Targets
major Target Assessments
(5)
minor Target Assessments 1/
$ 5,561,815
(62)
■Total Assessments involving Narcotic Traffickers
$ 1,880,543
$ 7,442,358
9
■Seizures involving Narcotic Traffickers:
Currency
$
387,831
Property
$
116,000
$
503,831
Total Dollars Seized
leases Recommended for Prosecution
2
■riminal Tax Cases in U. S. Courts
awaiting Trial
1
■riminal Tax Convictions
0
Botal Criminal Cases
3
1/ See footnote 3 on Table II
Ireasury Department
■ffice of Law Enforcement
October 1 , 1972
NEW YORK CITY
142
Major Targets
Major Target Assessments
Minor Target Assessments
(46)
1/
$ 7,416,046
(82)
5,566,855
Total Assessments involving Narcotic Traffickers
$12,982,901
Seizures involving Narcotic Traffickers:
Currency
$ 4,326,596
Property
$
Total Dollars Seized
187,271
$ 4,513,867
Cases Recommended for Prosecution
8
Criminal Tax Cases in U. S. Courts
awaiting Trial
3
Criminal Tax Convictions
1
Total Criminal Cases
1/
12
See footnote 3 on Table II
Treasury Department
Office of Law Enforcement
October 1, 1972
K
HARTFORD
14
Major Targets
Major Target Assessments
(2)
$■169,690
Minor Target Assessments 1/ (13)
2 74 ?909
Total Assessments involving Narcotic Traffickers
444,599
Seizures involving Narcotic Traffickers:
Currency
$ 27,398
Property
$ 16,100
Total Dollars Seized
43,498
Cases Recommended for Prosecution
1
Criminal Tax Cases in U. S. Courts
awaiting Trial
0
Criminal Tax Convictions
~
Total Criminal Cases
.
1
¿/ See footnote 3 on Table II
Treasury Department
Office of Law Enforcement
October 1 , 1972
BALTIMORE - WASHINGTON, D.C.
Major Targets
34
$
Major Target Assessments (9)
Minor Target Assessments 1/
(2)
Total Assessments involving Narcotic Traffickers
1,270,716
238,834
$ ’ 1,509,550
Seizures involving Narcotic Traffickers:
Currency
$
44,879
-0 -
Property
Total Dollars Seized
$
44,879
Cases Recommended for Prosecution
1
Criminal Tax Cases in US S. Courts
awaiting Trial
2
Criminal Tax Convictions
Total Criminal Cases
1/
' 3
6
See footnote 3 on Table II
Treasury Department
Office of Law Enforcement
October 1 , 19 7.2
PHILADELPHIA
Major Targets
Major Target Assessments
Minor Target Assessments
(4)
1/
$ 206,195
$ 598 0 25
(30)
Total Assessments involving Narcotic Traffickers
$ 804,220
Seizures involving Narcotic Traffickers:
Currency
$ 289,749
Property
24,725
Total Dollars Seized
$ 314,474
Cases Recommended for Prosecution
0
Criminal Tax Cases in U. S. Courts
awaiting Trial
0
Criminal Tax Convictions
0
Total Criminal Cases
0
1/ See footnote 3 on Table II
Treaimry Department
Office of Law Enforcement
October
i, 1972
PITTSBURGH
Major Targets
Major Target Assessments
(2)
Minor Target Assessments 1/
$
(7-)
Total Assessments involving Narcotic Traffickers
27,637
370,561
$ 398,198
Seizures involving Narcotic Traffickers:
Currency
35,699
Property
2,988
Total Dollars Seized
$
38,687
Cases Recommended for Prosecution
4
Criminal Tax Cases in U. S. Courts
awaiting Trial
1
Criminal Tax Convictions
0
Total Criminal Cases
5
1/
See footnote 3 on Table II
Treasury Department
Office of Law Enforcement
October l , ,1972
•
n
NEWARK - C A M D E N
Major Targets
major Target Assessments
(7)
$ 3,702,427
liinor Target Assessments 1/ (22)
1,265,985
total Assessments involving Narcotic Traffickers
$ 4,968,
¡Seizures involving Narcotic Traffickers:
Currency
$
Property
369,397
235,000
Total Dollars Seized
D'.-;
}
604,397
■.| HSflsi tCv; ibbo *
(Cases Recommended for Prosecution
(Criminal Tax Cases in U. S. Courts
awaiting Trial
Criminal Tax Convictions
potal Criminal Cases
q
&3rwoD
.c *v rix
’
* '
^
1
n
||
1/ See footnote 3 on Table II
treasury Department
Prrice of Law Enforcement
October 1 , 1972
ATLANTA
29
Major Targets
Major Target Assessments (11)
Minor Target Assessments
1/
(35)
Total Assessments involving Narcotic Traffickers
$ 379,061
A.A
740
-Q 5/
1u
$ 847,801
Seizures involving Narcotic Traffickers:
Currency
$ 157,970
-0-
Property
Total Dollars Seized
$ 157,970
Cases Recommended for Prosecution
4
Criminal Tax Cases in U. S. Courts
awaiting Trial
0
Criminal Tax Convictions
0
Total Criminal Cases
1/
4
See footnote 3 on Table II
Treasury Department
Office of Law Enforcement
October 1,
MIAMI
75
Major Targets
29
Major Target Assessments
(31) j
$ 10,098,248
61
a■fu
n
01
Minor Target Assessments 1 /
(31)
510,088
10,608,336
Total Assessments involving Narcotic Traffickers
c?jL 0Jtj*
4»j $,£. O. 1XJ f e 11.i
teizures involving Narcotic Traffickers:
Currency
$
70
322,544
Property
70
147,525
Total Dollars Seized
, ,,
$
.
322,544
fases Recommended for Prosecution
2
1
0
■riminal Tax Cases in U. S. Courts
awaiting Trial
10
m a^
.
Iriminal Tax Convictions
0
lotal Criminal Cases
4
1/ See footnote 3 on Table II
Ǥ. -
•
'.# V
?-
111T " . ..— r* 1 -- —
treasury Department
, 19$ fffice of Law Enforcement
^October 1 , 1972
INDIANAPOLIS
8:fsgisT if ¿si
.,r Targets
or Target Asse
-s
X?) 3a n9X088388 A $Og'liS; >
(2)
\I eisssiBaasaA
nor Target Assess, -nrta l ! (7)
cal Assessments
zures involvin
'P>; •■
o.&ts?! M l v l o v n l s'Snsi ret 646 1 80
Ing Narcotic Traffickers
$ *
i
tic Traffickers:
T o I^ o d ’i e M gnivlo^VlIJL d Si,
^ f r:cs§5?,146
Currency
Property
Tota,i. up 4.J,ars Seized
is Recommended ^
*osecution
nr al Tax Cases
awaiting Trial
. S . Courts
$ 392,667
,1;j ij *j b 8o 1 '! *io i b s-bn smmo o s .H aj58si
xrjo3 *2
*U n l s s s e D x b T X'&ijaBitf
Isl'iT gnislswp
sn o iS o iv n o D xsT I Bnlm li
1
iinal Tax Convir •
398sD Isfx im l’iO I p
al Criminal Cast
ae footnote 3 *
*m rv Department
"t of Law Enfc
ts8 s i s I I o G IsO oT
t
CHICAGO
Major Targets
56
Major Target Assessments
(5)
Minor Target Assessments 1/ (37)
«
$ 221,075
*****
$ 989,211
IsdoT
$ 210,286
Total Assessments involving Narcotic Traffickers
£ »■< ;i:sll
Seizures involving Narcotic Traffickers:
Currency
78,909 *
$
-0 -
Property
■,
Cases Recommended for Prosecution
;V;|
■
1
: | ’ % Qgj f'v¿1
Criminal Tax Cases in U. S. Courts
awaiting Trial
:5k>} viioQ-‘
Criminal Tax Convictions
fib 0 B i’>
Total Criminal Cases
1/ See footnote 3 on Table II
78,909
U&ott
Total Dollars Seized
£■ ®
II
.........."T"11...
Treasury Department
Office of Law Enforcement
___
XI i"''■>
,
0 lSU
ao lm l 3 l& ta T
■<:i
U
ALBUQUERQUE
7
■Major Targets
3
■ Major Target Assessments
_5
■ Minor Target Assessments
8
11
(5)'
1/
$
358,429
(13)
■Total Assessments involving Narcotic Traffickers
200,935
$
559,364
$
155,889
■Seizures involving Narcotic Traffickers:
4
Currency
0
Property
4
500
Total Dollars Seized
$
156,389
4
■ Cases Recommended for Prosecution
1
0
■ Criminal Tax Cases in U. S. Courts
awaiting Trial
;Q.
2_
6
■ Criminal Tax Convictions
■ Total Criminal Cases
. 0
J&
1
1/ See footnote 3 on Table II
1972
Treasury Department
Office of Law Enforcement
-&
October 1 , 197=2
AUSTIN
Major Targets
Major Target Assessments
(12)
$ 1,576,515
Minor Target Assessments 1/ (70)
Total Assessments involving Narcotic Traffickers
1,214,701
$ 2,791,216
Cl «J. 11
Seizures involving Narcotic Traffickers:
Currency
O <5
O
2 %> ,X 32*•J v X
g n lv lo v n l as^xislsE
$
Property
v6;a3,f3sa
46,50 5,
Total Dollars Seized
$
739,855
Cases Recommended for Prosecution
Criminal Tax Cases in U. S. Courts
awaiting Trial
1E1 ■'!T s.fl151SW£
Criminal Tax Convictions
' r JuL t
Total Criminal Cases
1/ See footnote 3 on Table II
Treasury Department
Office cf Law Enforcement
o n iîo o l 938 \I
October: 1 ,
c
LOS ANGELES - SAN DIEGO
Major Targets
45
Majpr Target Assessments
(18)
$
844-,179
Minor Target Assessments 1/ (124)
$ '7,742,715
Total Assessments involving Narcotic Traffickers
$ 8,586,894
Seizures involving Narcotic Traffickers:
Currency
$
Property
932,665
129,650
Total Dollars Seized
$ 1,062,315
Cases Recommended for Prosecution
5
Criminal Tax Cases in U. S. Courts
awaiting Trial
0
Criminal Tax Convictions
Total Criminal Cases
1
6
¿/ See footnote 3 on Table II
Treasury Department
Office of Law Enforcement
October 1, 1972
PHOENIX
Major Targets
53
Major Target Assessments
(6)
Minor Target Assessments 1/
$
115,897
1,354,310
(44)
Total Assessments involving Narcotic Traffickers
$1,470,207
Seizures involving Narcotic Traffickers:
$
Currency
222,749
75,000
Property
Total Dollars Seized
$
297,749
Cases Recommended for Prosecution
3
Criminal Tax Cases in U. S. Courts
awaiting Trial
0
0
Criminal Tax Convictions
Total Criminal Cases
3
1/ See footnote 3 on Table II
Treasury Department
Office of Law Enforcement
October 1, 1972
SAN FRANCISCO
Major Targets
39
Major Target Assessments (9)
^ ^ 5
sSnssrassfeBA
Minor Target Assessments 1/ (44)
2 ,376^695
Total Assessments involving Narcotic Traffickers
$ 2,985,120
Seizures involving Narcotic Traffickers £ ’;1vl ovn&
■
Currency
: Is*-.7
g n lv io v n .j 8
Property
355,686
X P n 9 -^v-fT 71,485
i&q®
Total Dollars Seized
Cases Recommended for Prosecution
$27,171
2
I e ^o T
Criminal Tax Cases in U. S. Courts^:x
bsBnsmmogsH
3
awaiting Trial
.
• fe^yoD . 8 ,I| i l l - 398B-D X S i XBOX-ill
Criminal Tax Convictions
i£i j i gnidlsws — §.
¿iioi3olvno 3 xsi laixiinitiOg
|Total Criminal Cases
|
’
1/ See footnote 3 on Table II
€
I Treasury Department
jOffice of Law Enforcement
,1,
3 s e b 0 isn,ifo.i I >4 Xs 3.g T
■ : -;
~
: t 3 f d sT no c *330o -j OOJ. ~ ^
__ _ _ _ _ .„October-..-4^--19-7^— “
.1 n s 0 31 Bq 3.0 x ^ 8 s.9^ “
inS£G30T3'Xn3 WSj. -iO
SEATTLE
Major Targets
17
Major Target Assessments
(4)
$
12 7,829
224,932
Minor Target Assessments 1/ (13)
Total Assessments involving Narcotic Traffickers
$
352,761
$
13 7,204
Seizures involving Narcotic Traffickers:
Currency
20 ,000
Property
$. 157, 204
Total Dollars Seized
*'l
Cases Recommended for Prosecution
2
Criminal Tax Cases in U. S. Courts
awaiting Trial
;;
1
Criminal Tax Convictions
14
Total Criminal Cases
J./ See footnote 3 on Table II
Treasury Department
Office of Law Enforcement
Oc to be-;
1972
DENVER
22
Major Targets
Major Target Assessments (2)
$ 721,637
Minor Target Assessments 1/ (5)
$ 241,130
Total Assessments involving Narcotic Traffickers
$ 962,767
Seizures involving Narcotic Traffickers:
Currency
$ 94,811
Property
~Q~
m
, r>
J
Total Dollars Seized
$ 94,811
Cases Recommended for Prosecution
1
Criminal Tax Cases in U.
awaiting Trial
0
S.Courts
0
Criminal Tax Convictions
Total Criminal Cases
-
0
1/ See footnote 3 on Table XI
Treasury Department
Office of Law Enforcement
October 1, 1972
1
THE DEPARTMENT OF THE TREASURY
REMARKS OF
HONORABLE GEORGE P. SHULTZ,
SECRETARY OF THE TREASURY
BEFORE THE
LUNCHEON OF THE WORLD AFFAIRS COUNCIL
LOST ANGELES HILTON HOTEL
October 2, 1972
Los Angeles, California
[This transcript was prepared from a tape recording.3
n
2
1
SECRETARY SHULTZ:
The last time I was introduced
2
to the gathering or group of this
5
George Meany who did it much more simply than you.
4
I'm
5
Treasury since John Connally.
6
sending
r, -.<*
it was by my friend
He said,
George Shultz, the greatest Secretary of the
(General laughter.)
7
8
size
SECRETARY SHULTZ:
And since I think John Connally
was a terrific Secretary of Treasury, I didn't mind at all. .
9
I
appreciate your comment, Roy.
The business of
10
bouncing around from Cabinet post to another is very hard work.
11
I think my first move from the Secretary of Labor to the
12
Office of Management and Budget was partly his fault because
13
his commission was the one that suggested successfully that
14
the new department be created, so I hold him partly responsible
15
for that.
16
When I —
on the day when the President was going
17
to announce this appointment, I told my two youngest
18
children who are still at home —
19
is a. boy —
20
with them both when I told them.
21
and then they heard about it at school, and the girl came
22
home very upset.
23
with Daddy?
■24
he change the other Cabinet members around?
25
and the —
and one is a girl, one
I'd say t:hat it didn't register
They went off to school
She said to her mother, what's the matter
The President keeps changing him around.
(General laughter.)
Why doesn 't
—
' \ C
11
2
13
SECRETARY SHULTZ:
3
But my youngest son w^s immediately
taken with the job because he's a bit of a squirrel, he goes
around and cuts lawns in the neighborhood and saves his money
4
and he's very conscious of that, and he immediately was beseiged
5
by his friends for dollar bills which the Secretary of Treasury
6
signed, so he knew immediately that it was a good job.
7
So I am very glad to have a chance to be here,
8
particularly right now because it gives me a chance to pay
9
tribute to the work that Mr. Ashe has done toward the
10
reorganization of government,
11
come to one of the great cities of the world that participates
12
in the interaction between our domestic economy and the
13
trading world, and discuss the subject of international
14
trade and monetary reform.,.
15
and it gives me a chance to
It is interesting to roe, just in greeting people
16
here before the election, that I've met two people who have
17
been present and participated in the Brent Woods discussion
18
so that apparently in this audience there is a great continuity
19
of interest in this subject, and participation.
20
I asked, and Mr* Ashe said last week we had the
21
Representatives of 124 nations gathered in Washington for the
22
International Monetary Fund/World Bank meeting, and the dominant
topic of the speeches and the discussions was the general
25
subject of reform of the monetary and trading systems.
24
So, what I thought I would do here is just informally
L
/
4
4
1
give you a little report of what happened, as I see it, my
2
impressions, what ideas we developed, what.the developments
5
were, what the outlook or prospects are in this area as one
4
can evince them at this stage of the game.
5
.6
Well, I think that first of all, the most important
thing in the world that's happened was the President's decision
7
to go to the meeting and speak personally to the delegates,
8
and to sponsor and make a strong U.S. initiative here.
9
think that it was Universally acknowledged that that was
10
a key element in making this meeting successful, and I say
11
that both from the standpoint of the, say, the psychology
12
of the meeting, but also from the substantive style.
13
has been universally acknowledged and very much welcomed.
14
is certainly true around the world that the U.S. being
15
the power that it is, it is very popular to knock the U.S.
16
That's certainly a popular game around.~i
17
I
It
It
However,^underneath it all, people are staryed for
18
leadership from the U.S.? they want to know where the U.S.
19
stands? and they want for us to be out in front, fighting for
20
what we think is right because I think they know that while
21
we must serve our interests, that over the years we've had
22
a pretty good record of looking at
23
way, and in most cases the world as a. whole has progressed.
24
25
v them in an enlightened
Now, I think that the President w a s welcomed
for taking leadership.
I think also his message was welcomed
5
(!>?
5
1
first of all because it was realistic.
2
in platitudes of various kinds.
o
about his going over to address the group some time ago, he
4
said, well, if I have something to say I'll go, butiffli am goiig
5
to go over there and just engage in some general, hot air> I
6
won't go.
7
him well in this area.
8
He did not engage
I know when we first talked
He has that attitude, as you all know; you know
So, his message was a realistic message.
It made
j
9
contact with the things that were on people's minds.
10
dertainly put the U.S. forward, as I said, ready to take a
11
forward-looking view here and at the same time to [Inaudible]
12
that we want to see an expansion of jobs all over the world,
13
but we are not going to stand by and see the transfer of jobs
.14
out of the U.S. to other places.
'15
our expense.
It
It's not going to happen at
It is going to happen because we have expansion
16
everywhere, and I think while some people might have preferred
17
it if he didn't say that, on the whole people like it better
18
if you're realistic, and that is realistic.
19
I
think also there was a feeling the President's
20
speech was thoughtful, both substantively and procedurally.
21
pointed up the nature of the agreement that we might seek, and
22
also, I think, from analogies to the SALT Talks —
23
heard this referred to by many delegates —
24
kind of agreement that is worth having is one that is of such
25
a nature that the countries of the world feel a stake in
and I
that the only
He
6
1
preserving it.
2
But, if it takes place at somebody*s expense, ours or somebody
5
else*s, then it isn't going to last.
4
5
Then it will last. It will have stability.
So, that is the principle that we have used in trying
to establish this agreement*
6
So, I think the first thing that we're in accord
7
on from the meeting is the strong impression that the President' s
8
speech and his decisions to go ahead made, and I think that
9
helped really mark the meeting in terms of a new beginning in
10
11
that area.
Now, second —
and this is something that as an
12
intellectual matter we're all conscious of:, and certainly I
13
had thought about it.
14
was in my speech, but it really comes through when you spend
15
the week talking with people from other countries arid listening
16
to what they have to say about the U.S. and the monetary
17
system and so on, and this is the central wprk"of the
18
domestic H.S. economy and what happens in it, not only to
19
us and how well we're getting along here, but to the well
20
functioning of the world's monetary and trading system.
21
It was in the President's speech, it
In a way it seems to me the thick of the monetary
22
system as a thing that links up all these separate parts
23
in all these different economies in countries all over the world,
•24
and you can see if the various pieces have some stability
25
to them, particularly the bigger pieces, then the problem
of providing the links is relatively easy compared to the
situation where the pieces are bouncing around all over the
place in an erratic fashion.
And then if you're going to
provide the links, it becomes extremely difficult.
It's almost as though if the U.S. economy is going
strongly and we have inflation under control,
that there are
wide ranges of possible monetary and trading systems that
will work.
j
On the other hand, if the U.S. economy and other
major economies are very erratic in their behavior and prone
to inflation at varying rates, then it's going to be extremely
difficult to figure out how to provide a set of stable
links.
So, I think that the importance of what we do here
at home to how well we are able to deal in this new monetary
system can't be overestimated.
Now, as we have seen in the post-World War II period
that the U.S. economy was kind of a bedrock, what happened
there arid
the period of 1965 to 1969 when our
economy went sort of off the trolley as far as inflation is
concerned, that it was responsible for a lot of the trouble
that we have been having in our international; balance of
payments and balance of trade since then.
Now, the performance of the U.S. economy in the
last year is clearly the envy of the world.
Everybody speaks
1
about it.
2
have the lowest rate of inflation, unsatisfactory though
5
that rate of inflation may be and think about the price of
4
meat and so forth.
5
good, and everybody sees it.
6
We have the strongest rate of real growth and we
Neverthless, by comparison, it's extremely
And so the big thing is, can we maintain that perfor
7
mance?
8
been having and the declining rate of inflation that we have
9
really seen?
Can we maintain the strong real growth that we've
If we can, I think then we'll see the dollar, which
10
11
is much stronger now on the world market than it was, say,
12
eight or nine months ago, we'll see that strength continue
13
to
14
the U.S. products continue to improve.
, and we'll see the competitive position of
Now, in this connection I think we're right now
15
16
engaged in something that again sort of fascinated our
17
foreign visitors as it was in the news in Washington last
18
week and is very much in the news today!— the President
19
met a group of leaders in the White House this morning about
20
it —
21
spending.
22
late 1960's that caused us a lot of our troubles, and right
23
now we have a situation where it's not necessary for that
24
to happen, but it can happen.
25
asked, banged the table for an absolute ceiling on federal
and that is this notion of getting control of federal
It was the out of control federal spending in the
And so the President has
9
9
1
spending, and the ceiling number you wouldn't believe.
2
have come in my career in Washington to be able to pass off
5
big numbers.
4
means $300 million dollars.
They don't —
so if you say "clink three" that
5
(General laughter.)
6
SECRETARY SHULTZ:
Yo\}
sort of have to get
7
accustomed to these —
8
about a ceiling of $250 billion dollars, a quarter of a
9
I
to the big numbers.
We're talking
trillion dollars, and the President's feeling is somehow or
10
another we ought to be able to gat along for a year on a
11
quarter of a trillion doliars,anI why can't we, and if we
12
make an effort we can.
So, we're working towards our
13
-~
and
14
I think that it is important not only to maintaining our
15
sense of balance here at home, but it is part and parcel
16
of our development in world trade
17
effectively with our trading partners abroad, the central
18
thing.
19
and our ability to deal
Now, a third aspect of the discussions that we
20
had in the meetings where I did —
21
speech and I gave a speech and mine has particularly a let
22
of semi-technical details.
23
words in the International Monetary business, and I put
■24
them all in the speech in one phrase or another.
25
repeat that but just to talk about some of the elements,
the President gave a
fa-t,
I've learned a whole bundle of
I won't
there's
11
'
—
a problem.
There is the need, as we see it, and a difficulty
I2
K^
4
I5
6
7
8
9
I 10
I 11
of relating monetary developments and other elements of
international economic matters together.
In a sense, rather
than think of what we*re doing as international monetary
reform, we're inclined to think of it as international economic
reform.
'
Now, conceptually you can see that it is nonsense
to think of a monetary system as having a life of its own.
It exists for a purpose.
It exists for the purpose of promotin 3
trade, of seemng that capital can flow where it can best
I 12
be used, and it;s the method by which we transmit $id.
I 13
is affected by the interconnection of the tax systems of
1 14
I 15
It
the various trading countries and so on.
So, it is a subtle relationship among subjects!
I 17
that pcan'ti-be treated separately in different compartments,
l
^
and we have beem emphasizing — and I think we have been
I 18
finally making some headway, emphasizing the importance
I 19
of treating the conceptual relationship among these matteres.
I 16
I 20
1 21
Now, we have been misunderstood on that and we are
trying to clear that up, too.
This doesn't mean that you
I 22
are going^ to have to negotiate everything at once and that
I 23
you're going to have the same people trying to negotiate
I
all of this exquisite detail that goes into tariff and trade
.24
1 25
regulations or some aspects of the ferade-reguiafeiens monetary
/
I11
,
mn 11
'
9 i
.
1
system.
2
and you have experts that can talk to each other,,and I think
5
you can make a fair case that the experts don't know what they' :e
4
talking about and some of the ^---------------- -
5
You know, those things are almost like art forms,
But
many things do have a
6
life of their own but there has to be a way, as they come
7
up and get to a higher level of generality that you relate
8
them to each other, and that's what we have been struggling •
9
for and I think
10
going to be a fulcrum of the negotiations.
H
little headway on that, that's
Now, we have the benefit and the difficulty of
12
the fact that there are institutions that are the guardians
13
of these various elements in the system.
14
one of the things we'll be wanting to do is see how the
15
institutions, such as the IMF and the QATT —
16
; 17
1
u
Now, I think that
AGreement on Tariff and Trade—
can be worked more harmoniously
together and related together.
That was, I. believe, very
important in the idea of Brent Woods ~.
19
and I think that these will try to help bring that about
20
to their extent.
~ ^
21
So, this, I think, is a very important element in
22
the picture, and at least in our judgement, we can't expect
23
the exchange r a t e , and changes in the exchange rate to carry
25
' 11
the General
18
1 24
i
the whole load of adjustments in the system.
That's another
way of saying what I was saying about those relationships.
• ■
12
n 12
■
.
1
Well, that, then, takes me to the next subject,
2
and that is the adjustment process, and as we conceive it
5
anyway, this is the heart of the matter, the heart of the
4
subject, and it is what the argument is fundamentally all
5
about, namely, as you have flows of payments for various
6
reasons and you find a tendency
7
start getting out of kilter, for a country to start building '
8
up a big surplus or another country to start generating a
9
chronic deficit, how do you bring that into adjustment?
for
I
to
And
[ 10
our whole pitch has been, it is essential to do that, that
1 11
we have to think in terms of an equilibrium type system,
[ 12
and so that the process of adjustment is going to be a central
1 13
subject to our discussions.
l
I1
1 14
Now, our ideas about how to do this do provide for
I 15
a, relationship among these different subjects that I was
I 16
talking about a moment ago.
I 17
some kind of accepted pressures on countries to make adjustment! 3,
1 18
to have that pressure be symmetrical, and it is to be applied
1 19
as much to a surplus as to a deficit country, and then from
| 20
there to be a great element of national flexibility as to
[ 21
how the adjustments may be carried out, and different countries
22
23
I 24
25
We emphasize the importance of
and their different cultures or the different stages they
V'
are in their economies"may want to go about it.entirely
different ways.
Certainly the exchange rate is a central method of
^ 1|| .
•
13 ■
1
getting adjustments.
2
ability for goods to come into your country, if you're a
5
surplus nation —
4
a surplus country aid or concessionary aid for underdeveloped
5
countries
6
of course, for deficit countries, the whole problem of
7
mohitoring your own domestic economy is bound to be extremely
8
important.
9
But trade regulations, easing the
or an important element here, if you're
is certainly a way to go, and
1
At any r a t e , this is a big central piece of
matter, the adjustment process, and we on the
10
11
one hand are looking for pressures for adjustment that
12
represent an international body of rules, so to speak, and
13
flexibility in the execution of that for any individual
14
country, the point being that they do make an adjustment, not
15
how they make the ad jus tmen t .
16
Now, in terms of the outlook, I would say that the
17
outlook for international monetary reform is'pretty good.
18
The Committee of 20 which represents the large industrialized
19
nations and then nations from around the world that are
2C
developing countries, is a broad and
2]
that is off to a good start except they're going to be
2i
somewhat unwieldy,
2i
sit around in a room together —
representative group
A large number of people are going to
first meeting we had about
160 people, but under the rules all of the so-called
governors —
and then each governor has two associates —
14
1
3 '7
all of those people are entitled to attend any official m e e t i n g ,
2
On the other hand, the day before the first Commission official
5
meeting, we had dinner of the 20 people in the business, and
4
at the suggestion of the SEcretary of the meeting and in
5
view of the rule that I just mentioned, we decided to call
6
that dinner a gathering and we managed to transact quite
7
a little —
8
expect that one way of dealing with some of the unwieldiness
9
of this large number of people is to have more gatherings
10
and fewer meetings
.
a good understanding at that gathering, and I
11
One thing that I think is important for everybody
12
to recognize, and I think people generally do, is that this
13
is going to be a group of people who will discuss and will
14
try to reach a general concensus of views and we most certainly
15
want to do that, and we will want to try to see the other
16
fellow’s point of view, and understand it and see how we
17
can accomodate him and so on.
18
On the other hand, we certainly have to identify
19
some big
20
to give up on, and I think everybody recognizes thisthat
21
this —
22
anybody can vote the United S t a t e s , or vote France or vote
23
Germany, or vote the Commonmarket or vote India or vote
24
any country into a system that they find fundamentally in
25
opposition to their interests.
interests of ours-*e^ that w e ’re not going
becauseyou have to ask 20 people, doesn't mean that
They just won't do it.
Wa
Q? 1
15
.
w o n ’t do it, and neither will the others, Japan.
'So, i t ’s got to be worked at hard in the spirit
of getting concensus.
So, at any rate, the Committee is formed
[Mike
seems to be turned off brieflyI and the need to do something
about the subject X think is widely recognized.
There's
a lot of common ground been identified at the meeting itself.
The speeches, I think, tended to bring that, and I think
that in a sense we can see progress possible in that the
interim arrangements, the Smithsonian agreement and the things
that have surrounded it are working as holding operations
and we could see that trade is expanding and flowing as we
work at this agreement, and so we're not being held up on
that account.
Now, we have to take the time, I think, to do
a realistic job.
We will do that, and at the same time if
you'start in on something like this with the idea that
you've got an infinity of time you'll never get through it
because it's always hard to give a little ground.
And so
I think there hasn been an informal sort of agreement
because we do have another annual meeting.
be in Nairobi
It happens to
next year, and that there should be a real
effort to use that as a discipline and a deadline and to
see if we can't
advance
bit by the time that meeting takes place.
a little
^
f|l6
.
-
.
1
3
.
Finally, let me return to the —
16
j
where I started
12
on this and reemphasize, with all due respect to the hard
I5
efforts that we have made and will continue to make to get
I
4
a good monetary and trading system in the world —
5
just reemphasize the importance of that, of how well we
6
do our job here in the domestic U.S,> economy.
7
a good job, if we have some discipline ourselves, if we have
8
the guts to discipline our-tendency to. throw money in
9
projects, federal money —
If we do
it isn't federal money, it's your
money.
1 11
If we can just exercise some discipline here, we will not
1 12
only help ourselves a lot domestically in having a strong
1 13
or growing economy with reasonably stable prices, but we
1 14
will help our position in the world and it will also be
I 15
contributing mightily to the development of a flourishing
16
1
let me
1 10
■
■:
It all comes out of taxes, and we
/
!|1
and healthy world trade and economic order.
(Applause.)
1 17
I 18
19
20
•
‘
' ••
*
--
_
,
I
* *'
-•
. -•
\ ■
•.*a.- **
•;•/*/
'
.
. .
21
22
23
I 24
25
'
;
'
; $ .
v
\'r - ' '
/
at quarterly intervals as a part of its program for raising
cash this fiscal year.
A further issue of this type is
planned for next December or early January.
FOR IMMEDIATE RELEASE
October 5, 1972
DETAILS OF TREASURY AUCTION OF $2.0 BILLION OF NOTES
The $2.0 billion, or thereabouts, of 2-year Treasury Notes to be sold at auction
under competitive and noncompetitive bidding will be 6$> Treasury Notes of Series
E-1974, dated October 19, 1972, due September 30, 1974 (CUSIP No. 912827 CU4).
The notes will be issued in registered and bearer form in denominations of $1,000,
$5,000, $10,000, $100,000 and $1,000,000.
Interest will be payable on March 31 and
September 30 until maturity.
Tenders for the notes will be received up to 1:30 p.m., Eastern Daylight Saving
time, Wednesday, October 11, 1972, at any Federal Reserve Bank or Branch and at the
Office of the Treasurer of the United States, Securities Division, Washington, D. C.
20220; provided, however, that noncompetitive tenders will be considered timely
| received if they are mailed to any such agency under a postmark no later than
Tuesday, October 10.
Each tender must be in the amount of $1,000 or a multiple thereof, and must state
the price offered, if it is a competitive tender, or the tern "noncompetitive", if
it is a noncompetitive tender.
The price on competitive tenders must be expressed
on the'basis of 100, with two decimals, e.g., 100.00.
99.76 will not be accepted.
Tenders at a price less than
Fractions may not be used.
The notation "TENDER FOR
TREASURY NOTES" should be printed at the bottom of the envelope in which the tender
is submitted.
Public announcement will be made of the amount and price range of accepted
tenders.
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 will be accepted in full at the average price (in two decimals) of accepted com
petitive tenders.
This price may be 100.00, or more or less than 100.00.
Commercial banks, which for this purpose are defined as banks accepting demand
deposits, may submit tenders for account of customers provided the names of the cus
tomers are set forth in such tenders.
Others than commercial banks will not be
permitted to submit tenders except for their own account.
(OVER)
-
2-
Tenders will be received without deposit from commercial and other banks for
their own account, Federally-insured savings and loan associations, States, political]
subdivisions or instrumentalities thereof, public pension and retirement and other
public funds, international organizations in which the United States holds membership!
foreign central banks and foreign States, dealers who make primary markets in Govern-!
ment securities and report daily to the Federal Reserve Bank of New York their
positions with respect to Government securities and borrowings thereon, and Govermeii
accounts.
Tenders from others must be accompanied by payment of 5 percent of the facj
amount of notes applied for.
Payment for accepted tenders must be completed on or before Thursday, October
1972, at the Federal Reserve Bank or Branch or at the Office of the Treasurer of the
United States in cash or other funds immediately available to the Treasury by that
date.
Any qualified depositary will be permitted to make settlement by credit in
its Treasury tax and loan account for the amount of the notes allotted to it for
itself-and its customers.
"Where full payment is not completed in funds available hy
the payment date, the allotment will be canceled and the deposit with the tender up
to 5 percent of the amount of notes allotted will be subject to forfeiture to the
United States.
The Treasury will construe as timely payment any check payable to the Federal
Reserve Bank or the Treasurer of the United States that is received at such bank or
office Toy Monday, October 16, 1972, provided the check is drawn on a bank in the
Federal Reserve District of the bank or office to which the tender is submitted.
Other checks will constitute payment only if they are fully and finally collected by[
the payment date Thursday, October 19, 1972.
Checks not so collected will su bject
investor's deposit to forfeiture as set forth in the preceding paragraph.
A check
payable other than at a Federal Reserve Bank received on the payment date will not
constitute immediately available funds on that date.
Commercial banks are prohibited from making unsecured loans, or loans collateral)
ized in. whole or in part by the notes bid for, to cover the deposits required to be
paid when tenders are entered, and they will be required to make the usual cert ifi°a
tion to that effect.
Other lenders are requested to refrain from making such loans.j
All bidders are required to agree not to purchase or to sell, or to make any
agreements with respect to the purchase or sale or other disposition of the notes 1
for under this offering at a specific rate or price, until after 1:30 p.m., Eastern
Daylight Saving time, Wednesday, October 11, 1972.
DtpartmentoftheTREASURY J
im cthiu nr..H
H 1 .
'
‘
‘
fl
.1 M L
IjRS
FOR RELEASE AT NOON EDT
Oct. 6 , 1972
Secretary of the Treasury George P. Shultz today
made the following announcement at Philadelphia:
President Nixon has asked me to announce today, on
behalf of the Government, a new program to aid minority
businesses.
It is a small step, but one more effort to
respond to the needs of minority entrepeneurs.
I
am announcing it at Philadelphia because the
program was designed by a young White House Fellow -Antoinette Ford of Philadelphia, and because it involves
medals made here at the Philadelphia Mint -- a facility
which has been serving the nation since its founding.
In addition, the new program will be put into practical
operation for the first time at a minority enterprise
being set up later this month at the Customs building ,in
this city.
To give you just a bit of the background, early in
the Administration, President Nixon set up a National Task
Force on Minority Business Concessions.
This group has
been busy since December 1970 expanding the number of
minority business concessions in Federal facilities across
the nation -- flower shops, tourist offices, gift shops
and so on.
For instance the IRS Service Center in
Philadelphia has a gift shop set up under this program.
The General Services Administration seeks out
entrepenuers, helps set them up in Federal Buildings, and
helps arrange needed financing, and so on.
Other government
agencies and departments are making increasing efforts to
aid the program -- with the action coordinated by the
Commerce Department's Office of Minority Business Enterprise
(OMBE).
Until now, Treasury Mint and the Bureau of Engraving
and Printing have been unable to participate, but
Arthur Sampson, Acting Administrator of the General Services
Administration, has now arranged with Mary Brooks, Director
of the Mint, and James Conlon, Director of the Bureau of
Engraving and Printing, for discount sales, to minority
S-62
(OVER)
■SUING
2
entrepenuers set up Federal buildings across the nation, of
numismatic and historic items--ranging from Presidential
medals to historic engraved prints.
Few Americans realize that their government has these
historic medals, which commemorate not only every President,
but also events such as the Wright Brothers flight, and
exploits of famous Americans like John Paul Jones.
The
Engraving and Printing Material being made available includes
some of the famous engravings of the Presidents and Chief
Justices as well as a lithograph of the Great Seal of the
United States.
1ENTI0]
[a RELEi
■ The
alls, 01
he othei
ere opei
r¡there?
Finally, I would like to mention again that the first
minority corporation to take advantage of this new program
Ills . :
is setting up a sort of "variety store" in the Customs
building here in Philadelphia.
The President of the Corporation,
UGE OF
Dr. John Clay, is also with us this noon.
I p e t it :
I will only make one last comment.
Neither the Mint nor
the Bureau of Engraving and Printing will make available under
this program anything except non-security items.
No one should
think we're planning to issue at cut rates any of the nation's
money.
Higl
Low
Avei
a/
ral tei
Listrie
poston
Hew Y02
philade
^levels
jRichmór
Atlante
DepartmentoftheTREASURY
I
hiNGTON,
D C. 10220
TELEPHONE W04-2041
BEl'ITION: FINANCIAL EDITOR
)R RELEASE 6:30 P.M.
October 6, 1972
RESULTS OF TREASURY’S WEEKLY BILL OFFERING
I The Treasury Department announced that the tenders for two series of Treasury
Ills, one series to be an additional issue of the bills dated
July 13, 1972
, and
U other series to be dated October 12, 1972 , which were invited on September 29, 1972
fere opened at the Federal Reserve Banks today. Tenders were invited for $2,300,000,000,
r[thereabouts, of 9IUday bills and for $1,800,000,000, or thereabouts, of
182-day
Ells. The details of the two series are as follows:
iNGE OF ACCEPTED
JPETITIVE BIDS:
I High
1 Low
l| Average
91-day Treasury bills
maturing January 11, 1973
Approx. Equiv.
Annual Rate
Price
98.819
98.797
98.801
4.672$
4.759$
4.743$
1/
182-day Treasury bills
maturing April 12, 1973
Approx. Equiv.
Annual Rate
Price
97.406
97.388
97.392
a/
5.131$
5.167$
5.159$
1/
a/ Excepting 2 tenders totaling $2,000,000
56$ of the amount of 91-day bills bid for at the low price was accepted
28$ of the amount of 182-day bills bid for at the low price was accepted
PAL TENDERS APPLIED FOR AND ACCEPTED BY FEDERAL RESERVE DISTRICTS:
Dp-strict
poston
lew York
Philadelphia
Cleveland
Kadmiond
Atlanta
Chicago
|St. Louis’
linneapolis
|A&sas City
■alias
qan Francisco
TOTALS
Applied For
$
29,285,000
3,190,225,000
13,015,000
18,460,000
26,200,000
10,290,000
218,245,000
48,500,000
32,180,000
60,595,000
33,615,000
122,190,000
Accepted
$
9,845,000
1,948,125,000
13,015,000
18,460,000
10,515,000
9,590,000
128,645,000
31,720,000
16,180,000
44,155,000
12,735,000
57,470,000
Applied For
$
18,050,000
3,031,795,000
33,700,000
53,950,000
41,880,000
9,210,000
576,595,000
50,785,000
34,430,000
19,840,000
28,685,000
170,195,000
Accepted
$
3,050,000
1,410,695,000
3,560,000
19,940,000
13,880,000
9,110,000
211,695,000
25,785,000
5,130,000
9,340,000
6,685,000
82,235,000
$3,802,800,000
$2,300,455,000 b/ $4,069,115,000
$1,801,105,000
includes $161?440,000 noncompetitive tenders accepted at the average price of 98.801
■^eludes $ 88,155,000 noncompetitive tenders accepted at the average price of 97.392
IB^ese rates are on a bank discount basis. The equivalent coupon issue yields are
4.87 * for the 91-day bills, and 5.37$ for the 182-day bills.
FOR RELEASE AT 10:00 A.M.
STATEMENT OF
MR. JOHN M. HENNESSY, ASSISTANT SECRETARY FOR INTERNATIONAL
AFFAIRS, THE DEPARTMENT OF THE TREASURY,
BEFORE THE FOREIGN OPERATIONS AND GOVERNMENT
INFORMATION SUBCOMMITTEE OF THE
HOUSE COMMITTEE ON GOVERNMENT OPERATIONS
OCTOBER 10, 1972, AT 10:00 A.M.
Mr. Chairman and Members of the Subcommittee, I am glad to
review again with you our progress since the last hearing in the
reporting and collecting of overdue foreign debts owed to the
United States Government.
The Chairman’s letter to the Department
of the Treasury indicates that today’s debt review will be concen
trated mainly on the countries which may be visited by the
Subcommittee in an inspection mission to several U.S. Embassies
in Europe, North Africa and the Near East later this year.
We
have already made some preliminary material available to the
Subcommittee staff concerning the debt arrearages of these coun
tries, and I will be glad to comment on the arrearages in more
detail.
With the Chairman’s permission, I would like to take this
opportunity to discuss first some of the recent developments in
the debt area in order to bring up to date the discussion of these
matters.
-
2
-
As you all know well, the Subcommittee has been asking since
its initial hearing in 1970 for a statement of the total debt —
long- and short-tern —
foreigners.
owed to the United States Government by
On previous occasions we have had to reply that we
lacked complete information on the short-term portion of this debt.
During the hearing last February I was able to give you only pre
liminary and incomplete figures, because at that time we had not
yet received complete reports on the short-term foreign debts and
accounts receivable of the military departments.
I am glad to say that we are now able to give you the figures
you have requested on total foreign debt to the United States Govern
ment.
We have obtained reports as of June 30, 1972 from the Government
agencies of their short-term foreign credits and accounts receivable
from foreigners and I am now able to give you a preliminary total
figure.
As of June 30, 1972, the preliminary grand total of foreign
indebtedness to the United States Government was $30.6 billion; of
*
this amount $660 million was reported to be in arrears.
The figures
are summarized in the following table:
Foreign Credits and Accounts Receivable Reported by U.S.
Government Agencies as of June 30, 1972
(Millions.of dollars)
Long-term Credits
Short-term Credits
Accounts Receivable
Grand Total
Principal
Outstanding
Amount
in Arrears
30,117
82
356
37^
6
280
30,555
66 0
*This excludes the World War I indebtedness, of which $19.9
billion is due and unpaid.
I would like to offer a few general comments on these figures.
The total of short-term credits and accounts receivable outstanding
—
over:$¡¿4:35 million for June 30? 1972 -- considerably exceeds the
approximately; $200 million we. reported in February on a preliminary
and incomplete basis, for June 30? 1971.
The 1971 figure did not
include complete reports by the military agencies.
During my testi
mony in February, I estimated that the amounts remaining to be
reported by the military could amount to as much as several hundred
million dollars.; /.The amounts reported this year by the military
were $285 million,, of which about $2*1-5 million was in arrears.
1
The largest portion of the arrearages reported by the military
agencies.about.$200 millionrepresent amounts on their books
arising from logistical support provided to allied military forces
during the operations-conducted under United Nations auspices —
in.Korea and .in •tbe Congo *:rnV;
t .o r The ¡military arrearage s have been under careful review by the
/National >Adyisory Council* ,Only last month, the NAC held a meeting
with representatives- of the various services to discuss the problems
/connected with debts owed the military agencies.
The Council will
continue to keep these matters under careful and energetic review
and it is expected that recommendations concerning the disposition
of these claims will be developed shortly.
Count
* 'i 2*Î*ÎT\ 1 ‘
Üi>
' îh
•' Tu. \
f,v '■
W 5Î
i
ï3 -t%
OÎ
S iit.l
oi
Î>£irOW X
Our ability to provide you with a figure-on'total debt •owed 'to
tprus
the United States Government rests on the' fabt that our.reporting--
lance
system for short-term credits and accounts réeeivable has beéh" ;"cp
completed and is operating satisfactorily^ 'We believe1''that^d^^
Gemany
present reporting regulations are adequate to produce thésé figures
regularly in the future at six-month intervals* as of June 30 and m
ireece
December 31 of each year.
Therefore we will provide these data
to the Congress regularly in the future.
I should liK#ti^ba®xXii;iri
pan
that on the basis of these reports the National Advisory Coiticil''- '"
will subject arrearages on short-term credits and accounts receivable
laly
•to the same full scrutiny as wë give to the-arrearages-ôiï lôhg-têhm
debt.
:
'
'
^ Vi +%oqp^,j:«Diiai:SoI .fflO'i’i
fcrocco
Turning now to the debt status of the countries inclüdëd.Æn
yoùr inspection mission, most of the arrearages bWëdùby0theSë,ltèn-]i
Lain
countries are of the type which have for~ thë;fir St'.tiièe been 'reported
to Treasury -under our new reporting requirements? \As<:thë^tâblê rbelow
Tunisia
shows, nearly all of the official arrearages Pfi;tHesè-doünthiès'âfë
iij prkey
either accounts receivable or short-term crédits'
;bwed to the various
agencies, mostly the military:services. "'■
3-
cp-o/i of 9tmz&aoi
to!Etal, t
ïtralHTSOJCOO ano]:,•r.bnetfsiioos'i tail'd boioeqxx si it bus
*vlt*soife
oc l l x w ainxalo -sashf-- *t0
M . No
Le
Indebtedness of Selected Countries to U.S. Government Agencies
Amounts Reported as of June 30, 1972
(In thousands of dollars or dollar equivalents)
Amounts Dae and Unpaid. 90 Days or More
Country and Type
Total
------ --------- SK6FT-T&HH--SSSOTTCs ’
of Obligor
Outstanding
Total
Credits
Credits Receivable
Iprus
Total
Official
Private
3,876
n.a.
n.a.
202
*
202
ranee
Total
Official
Private
313,911
n.a.
n.a.
192
188
4
Total
Official
Private
36,042
n.a.
n*a#
328
328
-
Total
Official
Private
208,407
n.a.
n.a.
18,440
18,440
*
Total
Official
Private
768,478
n.a.
n.a.
36,664
36,664
Jernany
-
feece
ran
•
202
- oqcri 1 ■Min..-.'
202
-
- ■
..."i . - . ..:*
*
35,624
35,624
-
39
39
-
153
149
4
129
129
-
199
199
-
40
40
-
18,400
18,400
*
51
51
989
989
-
laly
-
Total
Official
Private
24-2,227
n.a.
n.a.
14,622
14,622
*
Irocco
-
Total
Official
Private
465,885
n.a.
n.a.
207
206
1
Total
Official
Private
541,392
n.a.
n.a.
5,032
5,032
308,349
n.a.
,,
n.a.
61
53
8
60
52
8
1,259,495
n.a.
n.a.
87,729
87,472
257
257
257
-
163,477
36,143
lain
piisia
lirkey
-
-
-
Total
Official
Private
Total
Official
Private
Pal, Ten Countries
M. Not available.
Less than $500
.
■•
4,14-#,062
*
-r
.
■-
-
—
-
.
*
*
*
-
45
45
-
14,577
14,577
■*
3
3
204
203
1
26
26
5,006
5,006
-
*
-
1
1
-
mm
•
-
87,472
87,472
-
333
127,001
1 1 | zmfJ* I H&sm|voD
-
6
-
The largest portion of the amounts due the military represents
logistic support expenses going hack to the Korean operations, the
status of -which is presently being examined.
The remainder of the
military accounts represents mostly short-term credit sales.
this category, Italy is the major debtor. ~
In
about $1^.5 million.
The other more significant arrearages, which range from about
,
$100,000 to $1 million, are owed by France, Greece, Iran and
Turkey.
The rest of the short-term arrearages in these countries
relate to current programs of the various U.S. agencies, including
the Departments of State, Commerce and Justice, the AID and the
Federal Aviation Administration.
The only major long-term item in arrears is the lend-lease and
Surplus property debt of Iran which arose from World War II.
This, Mr. Chairman, concludes my prepared statement.
be glad to answer any questions you may have.
I will
DepartmentoftheTREASURY
[HINGTOH D.C. 20220
'C f c & j
TELEPHONE W04-2041
October 10, 1972
FOR RELEASE AT 4:00 P.M.
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 $4,100,000,000, or thereabouts, for
cash and in exchange for Treasury bills maturing October 19, 1972,
in the amount
of $4,101,405,000, as follows:
9 1 -day bills (to maturity date) to be issued October 19, 1972,
in the amount
of $2,300,000,000, or thereabouts, representing an additional amount of bills
dated July 20, 1972,
and to mature January 18, 1973
originally issued in the amount of $ 1,799,955,000,
(CUSIP No. 912793 QB5 )
the additional and original
bills to be freely interchangeable.
182-day bills, for $ 1,800,000,000, or thereabouts, to be dated October 19, 1972,
and to mature April 19, 1973
(CUSIP No. 912793 QQ2 ) .
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 $10,000, $15,000, $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 clos
ing hour, one-thirty p.m., Eastern Daylight Saving time, Monday, October 16, 1972.
Tenders will not be received at the Treasury Department, Washington.
roust be for a minimum of $10,000.
$5,000.
Each tender
Tenders over $10,000 must be in multiples of
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.
roay not be used.
Fractions
It is urged that tenders be made on the printed forms and for
warded 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
(OVER)
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.
Only those
submitting competitive 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 each
issue for $200,000 or less without stated price from any one bidder will be accepted
in full at the average price (in three decimals) of accepted competitive bids for
the respective issues.
Settlement for accepted tenders in accordance with the
bids must be made or completed at the Federal Reserve Bank on October 19, 1972,
in cash -or other immediately available funds or in a like face amount of Treasury
bills maturing
treatment.
October 19, 1972.
Cash and exchange tenders will receive equal
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.
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 considered to accrue
when the bills are sold, redeemed or otherwise disposed of, and the bills are ex
cluded from consideration as capital assets.
Accordingly, the owner of Treasury
bills (other than life insurance companies) issued hereunder must include in his
income tax return, as ordinary gain or loss, the difference between the price paid
for the 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.
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.
UNITED STATES SAVINGS BONDS ISSUED AND REDEEMED THROUGH
September 30, 1972
(Dollar amounts in millions - rounded and will not necessarily add to totals)
D E S C R IP T IO N
A M O U N T IS S U E D
AMOUNT
R E D E E M E D i/
AMOUNT
O U T S T A N D IN G . !/
% O U T S T A N D IN G
O F A M O U N T IS S U E D
MATURED
■ Series a-1935
thru D-1941
■ Series P and G-1941 thru 1952
■ Series .7 and K-1952 thru 1957
5,003
29^ 521
3,754-
4,998
29,496
3,745
1,915
8,452
13,585
15,855
12,4-78
5,687
5,4-17
5,614
5,567
4,883
4-,223
4-, 4-29
5,063
5,163
5,381
5,203
4-, 908
4,798
4-, 505
4,526
4-, 610
4-, 480
1,726
7,606
12,255
14,231
11,055
. 4,879
4,513
5,021
3,021
4,900
4,765
5,14-2
5^092
4 ,83 4
4,543
4,749
5,451
3,689
240
2,947
2,845
2,951
2^883
2,687
2,379
10
.08
.24
24
9
UNMATUKtD
■ Series E^/ :
1941
1942
1943
1944
1945
1946
1947
1948
1949
1950
1951
1952
1953
1954
1955
1956
1957
1958
1959
1960
1961
1962
1963
. 1964
1965
1966
1967
1968
1969
1970
1971
1972
Unclassified
•
-------------w----- ---
4,600
4,484
3,881
3,357
3,494
3,919
3,942
4,067
3,897
3,621
3^448
3,196
3,119
3,051
2^874
9.8 7
189
846
1,330
1,624
1,423
10.01
9.79
10.24
11.40
808
14.21
903
1,014
1,083
16.67
18.06
19.45
20.52
20.53
1,002
867
935
1,144
21.11
22.60
1,221
1,315
1.306
1,281
1,349
1,309
1,407
1.559
1,606
2,000
1,952
1,920
2.191
2,209
2,148
'
23.65
24.44
25 10
26 10
28.12
29.06
31.09
33.82
35 85 !
39.79
39.84
40.29
42.61
43 ,3 8 :
44*44
47.63
54.69
65.24
84.44
310
2,164
2,597
3,556
3,115
-7 0
185,173
135,871
49,303
26.63
5,485
8,625
3,904
2^811
1,581
5,814
28,82
67.41
14,110
6,715
7,396
52,42
Total Series E and H
199,283
142,585
56,698
28.45
( Total matured
Series < Total unmatureri
I _______ ( Grand Total
38,277
199,283
237,561
38,240
142,585
180,825
38
56,698
56,736
28.45
23.88
Total Series E
.e
■Series H (1952 thru May, 1959)^
H (June, 1959 thru 1972)
Total Series H
ssue,
■
2,152
1,894
575
¡foc/utJes
value-'
n e r bonds m ay be h e ld and w ill earn in te r e s t for a d d itio n a l p erio d s a fte r o riginal m a tu rity d a te s •
Form PD
3812 (Rev* Feb* 1972) —Dept, of the Treasury —Bureau of the Public Debt
.10
oftheTREASURY
Department
WASHINGTO
N, nr
DC 20220
iifiiflAI
f
ÜHI
TELEPHONE W04-2041
1 7 89
FOR RELEASE AT 12:00 NOON CDT
THURSDAY, OCTOBER 12, 1972
ADDRESS BY THE HONORABLE SAMUEL R. PIERCE, JR.
GENERAL COUNSEL OF THE TREASURY
BEFORE
THE 45TH ANNUAL CONVENTION OF THE
NATIONAL BANKERS ASSOCIATION CONVENTION
THURSDAY, OCTOBER 12, 1972
12:00 NOON CDT, HOUSTON,TEXAS
I welcome this opportunity to address the National Bankers
Association for several very cogent reasons.
As a founder and
former director of one of your member banks— Freedom National
Bank of New York— I believe I have an understanding of and a
feeling for many of the problems that face minority-owned or
controlled banks.
In addition, through the years, I have gotten
to know a number of the officers and directors of this Association
and of its member banks, and this engagement gives me a chance to
renew old acquaintances.
I also welcome this opportunity because
it brings me to the wonderful city of Houston.
It is one of my
favorite cities, and one of the truly great cities of the United
States.
Reflections and a Progress Report
on the Minority Bank Deposit Program
Essential to the substantial growth of any bank is the growth
of its deposits.
In the past, a minority controlled bank located
in a Black, Spanish-speaking, or Indian community has generally
experienced difficulty in securing deposits in sufficiently large
amounts to permit it to grow strong enough to have a truly great
impact on the economic development of its community.
This is
understandable because the people in minority communities are
S-63
-
2-
often relatively poor and many of the businesses located in
these communities are quite small and relatively weak finan
cially— to say nothing of the prejudices a minority bank may
face and the competition it may receive from white banking
institutions.
Deposits are not the only ingredient necessary for a
small bank to grow into a much larger and stronger one.
Sufficient capital growth as well as constant improvement in
management and staff are also essential to the growth of a
bank.
However, without a significant growth rate in its
deposits— which are the raw material of banking— the expansion
of a small bank would be severely limited.
It was with these factors in mind that the Nixon Administra
tion in October, 1970, embarked upon its minority bank deposit
program.
Agencies of government and businesses in the private
sector have been urged by the Administration to participate in
this program by making deposits in minority owned or controlled
banks.
It was and still is believed that by assisting these
banks to secure substantial increases in their deposits, they
eventually will grow strong enough to become vital and key
instruments in the economic growth and development of minority
communities.
This program reflects part of the Administration's effort
and desire to see to it that progress is made in fulfilling the
expectations that Blacks and other minorities have to enjoy their
just share of the economic fruits of this Nation; to see to it
that they get "a piece of the action"— a phrase used by the
President in referring to his intention to help minorities
realize their economic aspirations.
The program has been and continues to be successful.
When
Dr. Charls Walker, Deputy Secretary of the Treasury, addressed
your Association in July of this year, he reported that as of
June 30, 1972, the minority banks in this Country had deposits
totaling $825,406,000, an increase of $429,000,000— or 108 p e r c e n t since the Nixon Administration launched its minority bank deposit
program in October, 1970.
In order to have the latest figures on the growth of minority
bank deposits by the time of this meeting, I had telephone calls
made last week to all of the minority banks to find out what their
deposits were as of September 30, 1972.
I am happy to announce
today that as of September 30, the 43 minority banks in the United
States had a total of $874,225,000 in deposits, an increase of
-3$477,710,000— or 120 percent— since the minority bank deposit
program was initiated two years a g o .*
During the third quarter of this year the deposits of
minority banks increased by almost $50,000,000— or approxi
mately 12 percent.
With some luck and great deal of hard
work the landmark of $1 billion in deposits may still be
attained by the end of 1972.
As I previously mentioned, in addition to deposits, adequate
capital and skilled personnel are important ingredients in the
growth of a bank.
Last week I talked with William Camp, the
Comptroller of the Currency, about the capital and personnel
problems of minority banks. He said that minority banks were
improving in both categories; that, on the whole, they were
securing the necessary capital to permit them to grow on a
sound basis; and that their management and staff personnel
had shown definite and constant improvement.
He did say, how
ever, that the problem of getting good people was tougher than
the problem of securing additional capital, but added that this
was true for all banks, not just minority banks.
As deposits in minority banks are growing at a remarkable
rate, and as they are acquiring the necessary capital to grow
on a sound basis, and their management and staff are constantly
improving, it is reasonable to conclude that in general the
minority banks of this Country should grow and prosper.
The
extent to which they expand and the degree of their profitability
will not only depend upon those factors I have already discussed,
but also-— in substantial measure— upon the condition of the
American economy.
J
'n .
.",". y y s
The American Economy:
Its Dark Past and Bright Future
Banks, like other businesses, are acutely affected by the
health of the economy.
A strong, expanding economy relatively
free from inflation and inflationary expectations nurtures the
growth and development of banks and other businesses.
Two tables are attached. One (Exhibit A ) 'shows the growth of
total deposits of all banks participating in the program on a
quarterly basis since the program was initiated.
The other
table (Exhibit B) shows the total deposits of each bank in the
program as of September 30, 1972.
4-
The American economy has grown much stronger and healthier
in the past few years.
Prior to that time, due primarily to
inflation, the Vietnamese war, and the mishandling of certain
fiscal and monetary problems, the economy was relatively un
stable .
Inflation in our Nation commenced in the mid-60's.
It was
a demand-pull inflation which simply stated, means that there was
too much money chasing too few goods.
In terms of the old law of
supply and demand, there was much more demand for goods than there
.were goods that could be supplied.
The war in Vietnam, like any other war, stimulated the economy
because it required the Government to spend tremendously large sums
of money.
Good economic practice in times of war would dictate an
increase in taxes.
First, to help pay for the war, and secondly,
to take money out of the private sector to reduce inflation.
Escalation of the war began in mid-1965.
However, it was not
until January of 1967, fully 18 months later, that the Administra
tion then in power, called for a tax increase to help pay for the
war«— to be effective in mid-1967.
This was a surtax which was not
actually passed until June, 1968.
It was simply a question of too
little, too late.
The economic cost of the Vietnam war might have been borne
through cutbacks in non-Vietnamese Federal spending; however, this
was not done.
In fact, domestic spending ballooned to a whopping
$35 billion in the four years ending in mid-1969.
When the full escalation of the Vietnamese war and the F ed eral
Government's mishandling of fiscal and monetary problems resulting
from the war were added to the already strained economy, the con
sequence was the overheated, highly-inflationary economy which
President Nixon inherited when he took office in 1969.
The Country had experienced an annual rate of inflation of 5.01
during the last three months of 1968 and it accelerated to 6.4% in
the first three months of 1969.
This was an intolerable rate of
inflation.
To combat this situation the Administration immedi
ately instituted a program of fiscal and monetary restraint aimed
at cooling off the economy by winding down inflation. , Progress
was made toward obtaining that objective.
However, the
Administration did not consider this progress rapid enough and,
as a consequence, adopted a new economic program in August, 1971.
-5The New Economic Policy— as this program is often referred
to— set the following objectives:
1.
To assure acceleration of economic growth and
employment by the more rapid expansion of demand
for goods arid Services.
Towards this end, the
Revenue Act of 1971 included a repeal of the ex
cise tax on automobiles, a tax credit for invest
ment > and a reduction of individual income tax
liabilities.
" '! ;
2.
To restrain inflationary behavior and expectations
by a system of wage-price controls.
Once those
inflationary expectations were dampened, the economy
over the long run could expect reasonable price
stability without controls. Thereafter, increased
economic growth and productivity could provide for
advancés in real wages and real profits.
3.
To achieve a realignment in the external value of the
dollar which would reflect more realistically the
relative position of international prices and costs.
While many problems remain, the economic policies of the
Administration generally have been meeting with success. The
major economic indicators clearly show th i s .
During the twelve months between A u g u s t , 1971, and August,
1972, the rate of iriflation was down to 2.9%,
This compares with
an annual raté of iriflatioh of 6.4% which existed shortly after
President Nixon took office.
Real weekly wages (that is, incomes after allowance for in
flation and taxes) for the average worker began to advance under
the economic policies of this Administration.
There was no
improvement in reàl Weekly wages at all between 1965 and 1970.
In fact, a slight dedline bebured during this period.
Over
the last twelve months, ending in A u g u s t , 1972, real weekly wages
rose 4.1%.
This m e a n s , of course, that living standards and
incomes are now rising significantly.
The most cemprehensivé measure of national output— Gross
National Produce in constant dollars— indicates the succesful
outcome of the New Economic Policy.
Between the third quarter
of 1970 and the third quarter of 1971— the year preceding the
adoption of the New Economic Policy— real Gross National Product
6-
rose 2.2%.
Between the third quarter of 1971 and the second
quarter of 1972, real GNP increased at an annual rate of 7.5%.
In the second quarter of 1972, the latest for which infor
mation is available, real GNP rose at an annual rate of 9.4%—
the largest gain since the last quarter of 1959.
There has also been a dramatic expansion in business invest
ment on plant and equipment in reaction to the investment tax
credit and accelerated depreciation allowances.
Between the
third quarter of 1971 and the second quarter of 1972, nonresidential fixed investment has increased at an annual rate
of 16%, which compares with only 3% in the year preceding the
adoption of the New Economic Policy.
As output advanced, so did employment, and unemployment
rates diminished.
The number of jobs advanced sizeably. In
September, 1972, employment was 2.5 million higher than a year
earlier.
This represented an increase of approximately 3% which
is higher than any of the yearly increases during the entire
decade of the 1960's.
The unemployment rate has also declined— from the neighbor
hood of 6% last winter to 5-1/2% this September.
Normally, the
decline in the unemployment rate would have been much larger,
considering the large increase in employment. ‘ However, the labor
force increased at an extraordinary rate as over 450,000 veterans
returned to civilian life over the past year.
At the same time,
the new job opportunities attracted many more entries into the
labor force.
These new opportunities brought into the work force
many people, particularly women and teenagers, who in the past
had not been part of the labor force.
As a result of these two
factors, total unemployment did not decline as much as one would
expect, even though jobs rose by 2.5 million.
It is quite clear that at this time the economy is p r o g r e ssin g
at a very rapid rate with diminishing inflation,»
It has come out
of a dark past and faces a bright future.
Looking ahead to the
balance of this year and into 1973, the consensus view of the
economic experts of all political persuasions is that the economy
in 1973 will show vigorous growth, increased business o p p o r t u n i
ties, more employment and incomes, and reduced unemployment.
5 "1
-7-
III.
Sensitivity to Community Needs
It seems clear that in general the future for minority banks
is quite good.
They are accumulating deposits rapidly; securing
the necessary capital to maintain a sound growth rate; improving
their personnel; and operating in a favorable economic climate.
As a result, minority banks can be expected to grow and prosper.
Sometimes when business concerns become large, wealthy, and
economically independent, they also become less sensitive and more
impersonal.
Their objectives become more material than human.
The profit motive becomes far more important than the motive for
helping one's fellow man.
I hope I live to see the day when some of the banks currently
referred to as minority banks grow so large and powerful that
their histories can be compared with the Bank of America, the
largest bank in the world, which at one time could have appropri
ately been called a "minority bank".
However, I hope none of the
members of this Association will ever forget the communities that
spawned them; nor their obligation to be sensitive to the needs of
those communities, and their responsibility to help those com
munities grow and develop both economically and socially.
Governor Andrew Brimmer of the Federal Reserve Board stated
in a report on Black banking released on July 31, 1972 that Black
banks only loaned 41.1% of their total deposits, while the loans
of all other insured banks represented 64.5% of their deposits.
Dr. Brimmer concluded that Black banks had clearly demonstrated
their ability to attract capital, but were experiencing difficulties
in finding reasonably secure outlets for their funds in the Black
communities.
There may be good and substantial reasons— other than difficulty
in securing loans in their communities— for Black banks having such
a low loan ratio.
For example, a large percentage of the deposits
of Black banks may be in tax and loan accounts or other Federal
Government accounts which may be drawn upon on short notice; thereby
Preventing the banks from making long term loans with those deposits.
Nevertheless, the point made by D r . Brimmer makes one wonder
whether Black banks as well as other minority banks are being as
creative as they should in their efforts to serve the needs of
-
8-
their communities.
I am certainly not being critical, but I do
want to urge most strongly that the directors and officers of
every minority bank give substantial thought to the question of
whether their bank is truly sensitive to community needs and is
doing its utmost to be creative and imaginative in serving the
needs of its community.
I do not believe minority banks are solely in business to
make money.
Their commitment is much broader than that.
I
think that when most minority banks were founded— particularly
those founded within the past 10 years, which represents about
two-thirds of the minority banks in existence today--they were
founded more in the spirit of dedication, than in the spirit of
free enterprise.
I know when a group of us founded Freedom National Bank our
hopes and aspirations went beyond the profit motive.
We had
dreams that some day the bank would not only make money for its
shareholders, but would be of vital importance in the economic
growth and development of the Black community in New York City.
We realized that, to some degree, bank profits might well have
to be sacrificed to fulfill an obligation we believed we had
to the community.
I feel certain that the founders of most minority banks had
similar thoughts when they started their banks.
That is why I
believe there is an unwritten, but moral, obligation on the part
of minority banks to be highly sensitive to community needs and
to respond to those needs through creative, imaginative, and
reasonably bold action.
To me, this obligation will remain until
such time that there is no further need for minority banks because
all people will have respect for each other as human beings;
prejudice and bigotry will have disappeared; and everyone will
have the same opportunity to achieve according to his or her
ability.
It will be the day— to paraphrase the words of the late
and great Dr. Martin Luther King— when minorities are free at
last, free at last— Great God Almighty when they are free at
last!
0 O0
TOTAL DEPOSITS OP BAMS PARTICIPATING IN
THE ADMINISTRATION» S MINORITY BANK DEPOSIT PROGRAM
(in rounded $ thousands)
31 Banks
Originally
On Roster
Date
Banks Subsequently
Added to Roster
New Banks 1/ Existing Banks 2/
r3
Totals
I9/30/70
« 396,515
-
-
* 396,515
I2/31/70
kk3,32k
-
-
14143,3214
19/30/71
514.3,509
* 8,1493
-
552,002
12/31/71
618,7147
16,885
* 51,930
687,562
2J
698,721
32,527
914,158
825,406
[9/30A 2 1 /
720,170
W4.276
109,779
■6/30/72
U
W
8714,225 v
At 9/30/71: Pan American National Bank, Union City, N. J., Banco del Pueblo,
Santa Ana, Cal., North Milwaukee State Bank, Milwaukee, Wise., and Atlantic
National Bank, Norfolk, Va.
At 12/31/71: The above and Greensboro National Bank, Greensboro, N. C.
At 6/30/72; The above, Vanguard National Bank, Hempstead, N. Y., and Lumbee
Bank, Pembroke, N. C.
At 9/30/72: The above and First Enterprise Bank, Oakland, Cal.
At 12/3l/fl: Republic National Bank, Miami, Fla., Highland Community Bank,
Chicago, 111., and American State Bank, Tulsa, Qkla.
-At 6/30/72 and 9/30/72:
The above and Fidelity National Bank, Miami, Fla.
W
Figures obtained from banks by phone; may differ sli^itly from published figures.
W
Includes:
27 State banks with total deposits of $5^2,533
16 National banks with total deposits of $321,692
31 Black and multiracial banks with total deposits of $494,761
11 Spanish-American banks with total deposits of $377,672
1 American Indian bank with deposits of $1,792
EXHIBIT B
TOTAL DEPOSITS OP MINORITY-OWED BANKS
at September 30, 1972 (in $ thousands)
i
Bank
Bank of Finance, Los Angeles
Pan American National Bank, Los Angeles
First Enterprise Bank, Oakland
Banco de Pueblo, Santa Ana
Industrial Bank, Washington, D. C.
United Community National Bank, Washington, D. C.
The Bank of Miami
Fidelity National Bank of South Miami
Republic National Bank of Miami
Citizens Trust Company, Atlanta
Carver State Bank, Savannah
Highland Community Bank, Chicago
Independence Bank, Chicago
Seaway National Bank, Chicago
Douglass State Bank, Kansas City, Kansas
Unity Bank & Trust Co., Roxbury, Mass.
1st Independence National Bank, Detroit
1st Plymouth National Bank, Minneapolis
Swope Parkway National Bank, Kansas City, Mo.
Gateway National Bank, St. Louis
Pan American National Bank, Union City, N. J.
Centinel Bank of Taos, N. Mex.
Vanguard National Bank, Hempstead, N. Y.
Banco Credito y Ahorro Ponceno, New York City 2/
Banco de Ponce, New York City 2/
Banco Popular de Puerto Rico 2/
Freedom National Bank, New York City
Mechanics & Farmers Bank, Durham, N. C.
Greensboro National Bank, Greensboro, N.C.
Lumbee Bank, Pembroke, N. C.
Unity State Bank, Dayton
American State Bank, Tulsa
Freedom Bank of Finance, Portland, Ore.
Victory Savings Bank, Columbia, S. C.
Tri-State Bank, Memphis
Citizens Savings Bank & Trust Co., Nashville
Pan American National Bank, Houston
Riverside National Bank, Houston
First State Bank, Danville, Va.
Atlantic National Bank, Norfolk
Consolidated Bank & Trust Co., Richmond
Liberty Bank of Seattle
North Milwaukee State Bank, Milwaukee
Total
Total Deposits
f
28,745
17,752
3,155
6,310
35.959
16,774
44,325
29,565
66,579
30,852
5,859
9,963
39,592
ia,071
15.960
12,800
23,914-2
13,337
9,500
15,192
7,7635
6,880
8,015
194398
97,525
75,000 e
145,6147
33,273
2,696
1,792
...
5,Ui8
3,672
7,5514
14,865
16,570
8,689
6,575
10,295
7,ioi
6,989
17,14314
6,286
7,556
t 8714,225
l/ Deposits reported via phone; may differ slightly from published figures
2/ New York City offices only
2/ Includes offices in Charlotte and Raleigh
e
Estimated, exact figures not readily available in bank
FOR RELEASE AT 2:00 P. M . , EDT
STATEMENT OF THE HONORABLE GEORGE P. SHULTZ
SECRETARY OF THE TREASURY
BEFORE THE
SENATE COMMITTEE ON FINANCE
WEDNESDAY, OCTOBER 11, 1972, at 2:00 P . M . , EDT
Mr. Chairman and Members of the Committee:
We are appearing today with a sense of urgency
on the subject of the-debt limitation for fiscal
year 1973.
The temporary limit of $4-5 0 billion in Section 21
of the Second Liberty Bond Act, as amended, will expire
on October 31, 1972.
At that time the debt subject to
limitation will be approximately $437 billion, while the
permanent limit is only $400 billion.
It is therefore
necessary to have action on the debt limit before the
Congress adjourns.
As we requested, the House has approved a temporary
limit of $465 billion through June 30, 1973.
Based upon
our current estimates that budget revenues for the
fiscal year will continue to improve to approximately
$225 billion and that budget outlays are limited to $250
billion, this should be sufficient to carry us through the
2
fiscal year.
But let me emphasize that $250 billion figure.
must limit our outlays to $250 billion.
We
And the only
certain way is to include in the bill before you the
President’s proposal for a spending ceiling.
W e ’re talking about a ceiling of a quarter of a
trillion dollars —
and the President’s belief is that,
somehow, we ought to be able to get along on a quarter
of a trillion dollars a year.
If we make the effort, we
can.
I believe we can succeed in this endeavor as well as
we have succeeded in the fight against inflation.
The recent international monetary meetings proved to
me that the performance of the U.S. economy has become the
envy of the world.
Everybody speaks about it in terms
of our strong rate of real growth and our relatively
low rate of inflation —
unsatisfactory though that rate
may b e .
The big question is:
Can we maintain this success?
Can we maintain strong, real growth and keep inflation
declining?
If we can, every person in this nation will benefit.
If we cannot, every American will suffer.
j
3
If we have another flood of inflation caused by
over-spending, wage increases will again be wiped out
by price increases.
Price hikes will become the rule
rather than the exception.
We will find ourselves right
back in the same sort of fiscal and economic trouble that
we had in the late 1960’s.
There is no reason for us to repeat that sorry
performance.
One way to ensure success rather than
inflation is to do as the President has done —
bang on
the table and call for an absolute spending ceiling.
The fact is, we have got to change the whole way of
thinking in every part of the government -- not only in
the Congress but in the Administration itself.
The
approach has to become, ”fight, and keep spending under
control.M
I have in the past weeks spoken to groups of business
labor and civic leaders from many parts of the country.
I have found intense public interest in the idea we are
f *O ^7
discussing here today.
O iT
T _A. r f
But I have also found disbelief -
a feeling we cannot do it.
Our record speaks against us.
The question most often asked of me at these meetings
was this:
"What programs can you cut out if Congress
passes the spending ceiling?”
4-
I have w o r k e d
in m a n y parts of government.
Before
j o i ning the T r e a s u r y I served at OMB w h i c h has m o r e than
a p a s s i n g interest
in e x p e n d i t u r e s .
A n d I t o l d the
q u e s t i o n e r s what I tell y o u n o w -- "We can h o l d t h e line
everywhere.
Wha t we n e e d is the w i l l to act."
We n e e d a g e t - t o u g h a t t i tude,
T-liXJ5-G
+»■«** S H O D
d o l l a r we
8 S i!
spend,
.15 lllltpkfj* c'—j ' i t
comes
an awa r e n e s s
t-. ■ , %.*x-•
.
f rom s o m e b o d y ’s taxes.
not h o l d the line on e x p e n d i t u r e s ,
t hat every
aj
If we do
we w i l l n ot be able to
hol d the line on taxes.
Finally,
let me say two things.
First,
it is a
fin a n c i a l n e c e s s i t y for y o u r g o v e r n m e n t to h a v e the
debt limit inc r e a s e d and extended.
e v e n more
important,
p e r haps
A n d s e c o n d -- and
-- it is in the in t e r e s t of
every A m e r i c a n to h a v e the s p e n d i n g c e i l i n g e n a c t e d at
the same time.
I urg e prompt a p p r o v a l of the m e a s u r e
b e f o r e you.
0O 0
TABLE I
*3 ‘
PUBLIC DEBT SUBJECT TO LIMITATION
FISCAL YEAR 1973
Based on Estimated Budget Outlays
of $250 Billion and Receipts of $225 Billion
($ billions)
Operating
Cash Balance
1972:
Public Debt
Subj ect to
Limitation
IS
With $3 Billio
Margin for
Contingenc ies
A C T U A L
$428.6
June
30
$10.1
July
17
28
31
6.2
9.6
9.0
432.3
437.0*
433.7
15
30
31
September 14
2.1
4.6
5.0
434.8
438.2*
436.8
438.2
August
1.9
. . .... .
E S T I M A T E D
436
432
28
29
6
6
October
16
30
31
6
6
6
440
441*
437
November
15
29
30
6
6
6
443
444*
441
December
15
29
6
6
447*
445
January
15
31
6
6
451*
444
$454*
447
February
15
27
28
6
6
6
451
452*
449
.454
455*
452
March
15
29
30
16
30
6
6
6
6
.6
457
458*
454
461*
451
460
461*
457
464*
454
May
15
30
31
6
6
6
458
462*
458
461
465*
461
June
15
29
6
6
465*
456
1973:
April
peak level of month
468*
459
6
Table II
Budget Receipts
Outlays and Surplus or Deficit (-) by Fund
($ billions)
:
Actual
1971
Fiscal Year
: Current
:: Actual
1972
:
1973
::
Receipts:
Trust Funds .....................
Federal Funds ...................
Deduct: Intragovernmental receipts
66.2
133.8
-11.6
72.9
148.8
-13.1
82.6
155.6
-13.2
Total unified budget .... ......
188.4
208.6
225.0
Trust Funds .....................
Federal Funds ................. ..
Deduct: Intragovernmental outlays.
59.4
163.7
-11.6
67.0
177.7
-13.1
75.2
188.0
-13.2
Total unified budget ...........
211.4
231.6
250.0
Budget surplus (+) or deficit (-) :
Trust Funds ......................
Federal Funds .............. .
+6.8
-29.9
+5.9
-28.9
+7.4
-32.4
-23.0
-23.0
-25.0
Outlays :
Total unified budget ......... .
Office of the Secretary of the Treasury
Office of Tax Analysis
T.ibie III
Unified Budget Receipts
Outlays and Deficits (-)
Fiscal Year
: Change :
January : from :
June
: January:
1972
estimate
estimate : 1972 :
:es tiriate:
1972
: Change
: from
: Actual
: June
: 1972
:estimate
Fiscal Year 1973
Change
: Change :
from
January : from :
. Current
June
June
: January:
1972
estimate
.
estimate
1972
estimate : 1972 :
estimate:
:estimate:
:eipts ...
197.8
+9.2
207.0
+1.6
208.6
220.8
+2.2
223.0
:lays ....
236.6
—3.6
233.0
-1.4 '
231.6
246.3
+3.8
250.0
licit (-)
-38.8
+12.8
-26.0
+3.0
-23.0
-25.5
-1.6
-27.0
:ice of the Secretary of the Treasury
)ffice of Tax Analysis
:e: Figures are rounded and may not necessari!
+2.0
225.0
250t0
+2.0
-25.0
8
Tabic IV
Comparison of Fiscal Tear 1972 Receipts
As Estimated in January 1972» June 1972, and Actual (Preliminary) June 1972
($ billions)
January :
Change from January 1972 Budget
1972 ::Economic and Legis
Other
Total
budget :: re-estimate lation
Individual Income tax
Corporation Income tax .............
Employment taxes and contributions ...
Unemployment insurance ...............
Contributions for other insurance and
r e t i rement..........
Excise taxes .......................
Estate and gift t a x e s ................
Customs d u t i e s .... •..............
Miscellaneous r e c e i p t s .......
Total budget receipts ..............
86.5
30.1
46.4
4.4
+6.4
+1.5
3.4
15.2
5.2
3.2
3.5
+0.1
197.8
+7.8
+1.5 1/
-
-
0.1
+7.9
+1.5
- 0.1
0.1
-
0.1
+0.1
- 0.1
-
•
0.1
+1.5
0.1
+9.2
June
:
Change from June Estimate
1972
:Economic and: LeglsTotal
Other
eatlmate : re-estimate: latlon
94.4
31.6
46.3
4.3
+0.4
+0.4
+0.4
+0.4
0.1
- 0.1
+0.1
+0.1
-
¡Actual Fiscal
: Tear 1972
:(Preliminary)
94.8
32.0
46.1
4.4
*
3.5
•15.2
* 5.1
3.2
• 3.5
+0.1
+0.1
3.4
15.5
5.4
3.3
3.6
+176
+17?
2087?
+0.3
+0.3
*
20770
+0.3
+0.3
*
Underlying Income Assumptions
Calendar Tear 1971
.........................
1047 2/
Personal I n c o m e .....................
857 % J
Corporate profits before tax ...........
85 2/
Office of the Secretary of the Treasury
Office of Tax Analysis
y
Change in capital gains tax estimate.
If Figures are consistent with pre-July 197*2 Commerce figures.
Vote: The figures are rounded and may not neçessarily add to totals.
*Less than $50 million.
1047
y
857
2/
85.5 2/
1050
861
83
Table V
Comparison of Fiscal Year 1973 Receipts
As Estimated in January 1972, June 1972, and Currently
($ billions)
January ::
Change from January 1972 Budget
1972 ::Economic and: Legis- :
:
budget :: re-estimate: lation : Other
; Total
::
June
:
Change from June Estimate
::
1972 — Economic and: Legis- :
:
;; estimate : re-ear faaate; latlon : Other ; Total
+3.5 k
-0.5t
-0.9
+0.1
-0.1
::
:: Current
;; estimate
99.0
35.5
54.3
5.1
3.7
16.2
4.3
2.{
Z=-
-0A
+2.0
*
225.0
'l
j
1152
936
97
Office of the Secretary of the Treasury
Office of Tax Analysis
JL/ Change in capital gains tax estimate.
Note: The figures are rounded and may not necessarily add to totals.
* Figures are consistent with pre-July 1972 Commerce revision.
!
REMARKS OF THE HONORABLE EUGENE T. ROSSIDES
ASSISTANT SECRETARY OF THE TREASURY
(ENFORCEMENT, TARIFF AND TRADE AFFAIRS, AND OPERATIONS)
before the
CONFERENCE OF AMERICAN WINE GROWERS
MADISON HOTEL
WASHINGTON, D. C.
October 11, 1972
It is a pleasure to have this opportunity to
talk with you today.
The importance of the functions of the former
Alcohol, Tobacco and Firearms Division of the
Internal Revenue Service was recognized by the up
grading of that Division to full Bureau status
within the Treasury Department effective July 1,
1972.
The Secretary placed responsibility in my
office for supervision of the operations of the
new Bureau and Rex Davis was named by Secretary
Shultz as the Director of the new Bureau on
September 22.
Although a number of organizational changes
are being made or are in the planning stage, the
Bureau will not undergo any drastic shake-up.
It
will be in a position to carry out more effectively
its many law enforcement and regulatory responsi
bilities.
This will be complemented and augmented
by a more direct concern in the Treasury Department
with the problems of the Bureau and of the industry.
1:00 P.M
2
The growth of the American wine industry has
been impressive.
From 1966 to 1971, tax-paid
withdrawals of still wines and sparkling wines
increased 38% and 169% respectively.
Annual sales
are now estimated at nearly one billion dollars.
With the recent plantings of additional vineyards,
further increases in production and sales can be
expected0
These prospects are enhanced by the recent
exchange rate adjustments resulting from President
Nixon's New Economic Policy.
These monetary
changes improve the competitive position of the
U.S. wine industry, both at home and abroad.
However, the share of the domestic market
held by imported wines has continued to increase.
With exports in 1971 at 377,000 gallons and imports
at 35,000,000 gallons, the imbalance in trade in
this area is apparent.
In the first six months of
1972, imports rose to 21% million gallons.
U.S. tariff duties on wines have been reduced
over the last five years to a low level as a result
of the Kennedy Round negotiations, but other countries
have not been as generous about their levies.
High
duties are imposed by some countries on American
wines; others limit their importation by quotas; and
still others prohibit importation of our wines either
outright or by a system of priorities.
We can understand your concern that some countries
impose barriers against importation of wines bearing
labels which denote a particular production process,
such as sherry, or an historical geographic place of
production.
For example, they refuse to admit labels
such as "California Sherry" or "New York Champagne,"
even though these labels clearly show origin.
3
These matters, and others with which I am sure
you are all familiar, are of considerable concern to
us.
We intend to do everything we can properly do
to obtain amelioration of these matters for the
promotion of freer trade and for the advancement of
this Administration's "Doctrine of Fairness in
International Trade."
In the area of importations into the U.S., we
have received complaints that foreign-produced wines
are labeled with the name of a variety of grape when
no such grape is in fact grown in the country of
manufacture.
We are going actively to investigate this alleged
abuse ourselves to ensure that U.S. consumers are not
subjected to falsely labelled products and do not pay
premium prices for them.
Our aim is also to guarantee
that our wines do not have to compete in the U.S.
market with irregular or improper importations.
As a step toward increasing our wine exports,
we intend to bring the barriers erected by foreign
countries to the attention of those charged with
negotiating our trade agreements.
I know there are other problems -- I have not
tried to be exhaustive.
Rather, I hope I have conveyed
to you our deep interest and determination -- the
determination of the new bureau with the active support
of the Department of the Treasury -- to investigate and
prevent unfair foreign trade practices in wine importa
tions and to work to remove unfair barriers to our own
wine exports.
The experts tell me that American wines are now
unexcelled in quality and can compete in a fair market
anywhere in the world.
Our aim is to make sure they
have a chance to do so.
0O 0
FOR IMMEDIATE R E L E A S E
O c t o b e r 12,
1972
D E C I S I O N ON S T A I N L E S S STEEL
A U T O M O B I L E S P LASH G U A R D S F R O M
C A N A D A U N D E R THE A N T I D U M P I N G A C T
A final d e t e r m i n a t i o n that stainless steel a u t o m o b i l e
splash g u ard s f rom C a n a d a are not being, nor l i kely to be,
sold at less than fair v a l u e w i t h i n the m e a n i n g of the
Antidumping Act, 1921, as amended, w as a n n o u n c e d t o day by
Assistant S e c r e t a r y of the T r e a s u r y E u g e n e T. Rossides.
Notice of the d e t e r m i n a t i o n w i l l be p u b l i s h e d in the
Federal R e g i s t e r of O c t o b e r 13, 1972.
A N o t i c e of T e n t a t i v e N e g a t i v e D e t e r m i n a t i o n w as p u b l i s h e d
fn the F e d e r a l R e g i s t e r on A u g u s t 18, 1972.
That notice
invited i n t e r e s t e d p a r t i e s to submit w r i t t e n v i ews or arguments,
or requests for an o p p o r t u n i t y to p r e s e n t their v i e w s orally.
No submissions or r e q u e s t s w e r e received.
During the p e r i o d of J a n u a r y 1971 t h r o u g h A u g u s t 1972,
stainless steel a u t o m o b i l e splash g u ards im p o r t e d fro m C a n a d a
were valued at a p p r o x i m a t e l y $2,000.
# # #
ATTENTION: ‘ FINANCIAL EDITOR
FOR RELEASE AT 6:30 P.M.
October 11, 1972
RESULTS OF TREASURY NOTE AUCTION
The Treasury announced that it has accepted $2.0 billion of the $4.8
billion of tenders received for its new 6/ notes auctioned today» The
range of accepted competitive bids was as follows:
Price
Approximate Yield
High
Low
100.41
Average
100.25
5.77/o
5.89/
5.86/
100.20
l/Excepting 1 tender of $2,000
Tie $ 2.0 billion of accepted tenders includes 20/ of the amount of
notes bid for at the low ppice, and $0.3 billion of noncompetitive tenders
accepted at the average price.
FOR RELEASE AT
10:30 AM, Tuesday
October 10, 1972
TAXATION —
MYTHS AND REALITIES
Remarks of the Honorable Charls E. Walker, Deputy
Secretary of the Treasury, before the 98th Annual
Convention of the American Bankers Association in
Dallas, Texas, Oct. 10, 1972
It is most distressing to witness growing confusion over the
Federal income tax system in this electiou year.
and the American taxpayer —
not misled —
deserve better.
The American people —
They need to be informed,
enlightened, not confused.
I was therefore more than pleased when ABA President Stults asked
me to try today to separate fact from fiction — myths from realities —
■
jin
the recent public discussions of the Federal income tax system.
This I shall try to do by commenting on several of the more important
myths.
MYTH #1;
Rich people get away with murder when it comes to paying
Federal income taxes.
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REALITY:
This myth seems to have grown out of the disclosure
some months ago of some highly misleading and incomplete data indicating
that over one hundred individuals with more than $200,000 in adjusted
gross income paid no Federal income taxes in 1970«
The first point to note is that the returns from which this in
formation was drawn were unaudited.
As the audit process has taken place,
the number of non-taxpayers has dropped sharply and now stands at only
85.
In addition, the number will decline further as certain "staged-in"
provisions of the Tax Reform Act of 1969 become fully effective.
It is also important to note that —
even though the audit process
is far from complete and even though the 1969 Act is now just fully coming
into effect —
the number of individuals in this high-income range that
do not pay taxes has already been cut by more than two—thirds, and is
likely to drop still more.
Stated differently, the Tax Reform
Act —
the most massive revision
of the Internal Revenue Code in history, signed by President Nixon in
December 1969 —
is proving to be highly effective in reducing the number
of rich people who pay no income taxes.
I wouldn't be surprised if, from reading the papers lately, you had
,received the opposite impression.
Moreover, so much attention has been paid to this handful of nontaxpayers that those with incomes above $200,000 who do pay big taxes
have been almost wholly overlooked.
In contrast to the 85 or less who
paid no taxes, more than 15,200 (or 99 per cent-plus) did, and they paid
heavily —
an average of $177,000 per person for a total of $2.7 billion.
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This Is an effective rate of 44 per cent on adjusted gross lneome and 60
per cent on taxable Income.
Rich people do pay taxes, and those who claim otherwise are either
ignorant of the facts, or deliberately ignoring the facts.
MYTH #2:
The Tax Reform Act of 1969 greatly increased the complexity
for the typical taxpayer of preparing and filing his return.
REALITY:
The 1969 Act made taxpaying much simpler for 25 million
taxpayers (almost one-third of the total).
Through enactment of President Nixon's Low Income Allowance, some
12 million low-income individuals (poverty level or lower) were removed
completely from the tax rolls —
than that.
and you can't make taxpaying any simpler
In addition, the 1969 legislation made it attractive for
another 13 million taxpayers to use the standard deduction and thus
avoid the time and trouble of itemizing their deductions.
The 1969 Act did make taxpaying more complicated for one type of in
dividual — - the one in several thousand who finds it
advantageous to hire an expert lawyer
or accountant to devise investment
shelters that minimize his Federal income tax.
illegal about this.
There is absolutely nothing
But the 1969 Act did take an important step toward
tax equity by enacting for the first time a minimum income tax aimed at
collecting some amount of taxes from all citizens with high incomes.
The sharp reduction in the number of high income people paying no
Federal taxes indicates that the minimum income tax —
other tax-tightening provisions of the 1969 Act —
along with many
have been at least
partially successful in this respect, but it is too early to say how
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successful.
We need more Information before we go further.
MYTH #3:
»
The Tax Reform .Act of 1969 and the Revenue Act of 1971
provided a "bonanza" to business and the rich while increasing taxes on
the working man.
REALITY: For the four years 1969 through 1972, these two Acts (includ
ing the new guidelines permitting accelerated depreciation of new equipment
for business) raised the tax bill on corporations by $5 billion, but lowered
the bill for individuals (mainly low- and middle-income) by almost $19
million.
And this latter figure does not include the $3.5 billion tax
cut from repeal of the excise tax on automobiles —
a benefit accruing
mostly to individuals.
As to rich individuals versus those not so well off, the President's
Low Income Allowance, as already noted, removed all persons at or below
the poverty level from the tax rolls• Beyond this, individuals paying taxes
in the bottom bracket had their tax bills reduced by 82 percent.
Moving
on up the income scale, the amount of tax reduction decreased progressively,
except in the highest brackets. Individuals with incomes of over $100,000
actually had their tax payments increased by 7-1/2 percent.
Again, I wouldn't be surprised if you had received just the opposite
impression from some statements made during the campaign.
MYTH
If4;
By raising taxes on corporations, the Government can avoid
raising them on individuals.
REALITY: This myth is one of the most deeply rooted of all.
In the final analysis, corporations do not pay taxes —
people do.
The corporation is simply a legal arrangement for doing business —
an
arrangement which, incidentally, has proved highly efficient in helping to
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meet the ever-growing economic needs of man*
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To determine which persons
the corporate tax really hits, several factors have to be considered«
Is the corporation in a strong enough position to pass on the tax
to its customers?
If so, the corporate income tax hits the individual
something like a sales tax, and if it*s on a business which produces necessities
the impact may be regressive —
hitting poor people relatively harder than
rich people.
If the corporation cannot pass on the tax, then it must be absorbed
by the owners
stockholders —■
— in the form of lower profits and dividends«
Still, however, it is people who bear the tax.
Many of these people have
high incomes, but as already noted, the 1969 Act increased the tax burden
on the very rich by 7.5 percent.
It should also be noted that some 30
million taxpayers directly own and an additional 70 million indirectly
own stock in corporations.
In the long run, a corporation, if it is to remain a going concern,
clearly must pass on all of its taxes in one way or another.
short run, economists —
although in disagreement —
that about half of the corporate
about half borne by stockholders.
But in the
appear to believe
profits tax is passed on to cusomters,
This is why some European countries
are moving toward an income tax credit to corporate shareholders in order
to reduce the double taxation on corporate dividends.
The question of whom the corporate tax hits is difficult to answer —
except that it does not, as some would have you believe fall only on
‘big business."
In one way or another taxes are always paid by people,
people.
MYTH #5:
The Job Development Investment Credit and the easing of
depreciation guidelines in the 1971 tax act were giveaways to business
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that fail to help the working man«
REALITY: Economists of all persuasions have recognized for many
years that productive Investment Is the mainspring In creating new jobs,
raising the standard of living of the working man, and maintaining and
sharpening U. S. competitiveness in world markets.
President Kennedy re
cognized this in 1961-62 when he eased depreciation guidelines and proposed
the first tax credit for investment in new equipment.
In 1971, this nation incurred its first trade deficit in the twentieth
century.
Our competitiveness abroad had become severly eroded.
Rather
than criticizing investment-spurring changes in the tax laws as giveaways,
the critics of these actions would do well to ponder what made this country
so richly productive in the first place, and where we will stand in
the international trading race in the future if their advice were heeded.
This list of myths and realities concerning the Federal income tax
system is by no means exhaustive —
I could recount several more.
I think I've covered enough to illustrate my point —
But
many of the dis
cussions about taxes during this election year have generated more heat
than light, more rhetoric than substance.
Let me conclude with two observations.
First, the Federal income tax system is basically a fair and effective
system —
and, as a result of the Tax Reform Act of 1969 and the Revenue
Act of 1971, it is a much better system than we had only four years ago.
The 1969 legislation has especially been unjustly maligned.
I lived and
slept with that legislation, and in my personal judgment, the provisions
adjusting preferences and creating equity were highly constructive.
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Second, the real issue in the tax arena now is the level of taxes
that the typical American bears and what he gets for his money in the
form of Government services.
In state after state, county after county,
and precinct after precinct, the voter is asking whether the money he
sends to Washington is being used efficiently and effectively to solve
our national problems—
and in many instances he comes up with a strongly
negative answer.
Many taxpayers have concluded that the power to spend is really the
power to tax —
that to keep their already heavy tax burden from rising
higher, some significant restraints must be put on the Federal spending
process.
The typical American, in other words, is convinced that Uncle
Sam ought to be able to struggle along on a quarter of a trillion dollars
a year.
That is why he supports President Nixon's clear call for enactment
of a tough, no-exceptions lid on Federal spending for this fiscal year.
I hope very much that Congress responds positively to that call —
and I think it will.
FOR RELEASE AT 4:00 P. M.
October 13, 1972
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 $4,100,000,000, or thereabouts, for
cash and in exchange for Treasury bills maturing
of $4,101,710,000
October 26, 1972, in the amount
as follows:
91-day bills (to maturity date) to be issued
October 26, 1972, in the amount
of $2,300,000,000, or thereabouts, representing an additional amount of bills
dated
July 27, 1972,
and to mature
January 25, 1973
originally issued in the amount of $1,800,400,000,
(CUSIP No. 912793 QC3),
the additional and original
bills to be freely interchangeable.
182 -day bills, for $1,800,000,000, or thereabouts, to be dated October 26, 1972,
and to mature
April 26, 1973
(CUSIP No. >912793
QRO).
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 $10,000, $15,000, $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 clos
ing hour, one-thirty p.m., Eastern Daylight Saving time, Friday, October 20, 1972.
Tenders will not be received at the Treasury Department, Washington.
roust be for a minimum of $10,000.
$5,000.
Each tender
Tenders over $10,000 must be in multiples of
In the case of competitive tenders the price offered must be expressed
°n the basis of 100, with not more than three decimals, e.g., 99.925.
roay not be used.
Fractions
It is urged that tenders be made on the printed forms and for
warded in the special envelopes which will be supplied by Federal Reserve Banks
or Benches 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
inking 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 F e d e r a l
Reserve Banks and Branches, following which public announcement will be made by
the Treasury Department of the amount and price range of accepted bids.
Only thoij
submitting competitive 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 respec]
shall be final.
Subject to these reservations, noncompetitive tenders for each
issue for $200,000 or less without stated price from any one bidder will b e accepj
in full at the average price (in three decimals) of accepted competitive b id s for
the respective issues.
Settlement for accepted tenders in accordance with the
bids must be made or completed at the Federal Reserve Bank on October 2 6 , 1972,
in cash or other immediately available funds or in a like face amount of Treasury
bills maturing October 2 6 , 1 9 7 2 .
treatment.
Cash and exchange tenders will receive equal
Cash adjustments will be made for differences between the par value
maturing bills accepted in exchange and the issue price of the new bills.
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 considered to accru
when the bills are sold, redeemed or otherwise disposed of, and the bills
cluded from consideration as capital assets.
Accordingly, the owner of
a r e ex
T reasu ry
bills (other than life insurance companies) issued hereunder must include in his
income tax return, as ordinary gain or loss, the difference between the price Pal
for the bills, whether on original issue or on subsequent purchase, and the aclounj
actually received either upon sale or redemption at maturity during the taxable
year for which the return is made.
Treasury Department Circular No. 418 (current revision) and this notice,
prescribe the terms of the Treasury bills and govern the conditions of their aSS j
Copies of the circular may be obtained from any Federal Reserve Bank or Branch.
ADVANCE FOR RELEASE AT:
8:30 p.m. October l4, 1972
COMBATTING INTERNATIONAL TERRORISM
Treasury Department Customs Security Officers (CSO) have
arrested 42 persons aboard aircraft — 18 in response to threats of
hijacking and 2k for other causes involving air safety — since
January 1971, Assistant Secretary of the Treasury Eugene T. Rossides
said today at a meeting of the National Executive Committee of the
Zionist Organization of America in New York.
Mr. Rossides commended the CSO’s for their outstanding effort and
said that, "To date there has not been a skyjacking on a flight 'where
Customs Security Officers have conducted a pre-departure search. We have
detained 59,248 potentially lethal weapons and made 2,478 arrests on the
ground for possession of illegal weapons, immigration violations, trans
port of narcotics and other law violations. Of those arrested, 3^4
possessed weapons and made hijacking or sabotage threats and 889 possessed
narcotics, marijuana or dangerous drugs."
Mr. Rossides described President Nixon1s program to combat
terrorism. He cited the world leadership of the President in initiating
action on the diplomatic and domestic fronts including:
— Protection of Israeli citizens in the U.S. who might
be threatened.
— Increased protection by the Executive Protective
Service of the Israeli Embassy and other foreign
missions in Washington, D.C. and UN missions in
New York City.
— Initiatives in the UN for international treaties for
preventing and punishing acts of terrorism.
— Agreement by Interpol members to aid in preventing
and suppressing terrorist activities.
— Establishment of a Cabinet Committee to Combat
Terrorism which will coordinate and direct all
Federal Government action in this area.
Full text of the speech is attached.
ADVANCE FOR RELEASE AT:
8:30 p.m., OCTOBER 14, 1972
REMARKS OF THE HONORABLE EUGENE T. ROSSHES
ASSISTANT SECRETARY OF THE TREASURY
(ENFORCEMENT, TARIFF AND TRADE AFFAIRS, AND OPERATIONS )
BEFORE THE
NATIONAL EXECUTIVE COMMITTEE OF THE ZIONIST ORGANIZATION
OF AMERICA
BILTMORE HOTEL, NEW YORK, NEW YORK
October l4, 1972
8:30 p.m.
It is a privilege to appear tonight before the Zionist Organization
of America during its 76th year of service and the 25 th year* of
Israel’s independence.
I will discuss with you this evening President Nixon’s initiatives
in combatting terrorism and his actions in building peace with prosperity
for the world.
Terrorism:
Munich - Skyjacking - Mail
The tragedy in Munich and the threat of other terrorist acts weigh
heavily on the minds of all civilized men, and President Nixon has
provided the leadership to the free world community in acting against
this barbarism. There is no single easy solution to terrorism but there
is an answer: bringing together the combined efforts of the world
community — its governments, its law enforcement agencies, and its
citizens — to prevent any safe havens for terrorists throughout the
world, and especially to provide for extradition or punishment of guilty
parties. President Nixon is committed to seeing that this will be done.
Terrorist acts of violence and anarchy anywhere in the world must
be stopped decisively. If terrorism succeeds in one instance, then the
price goes up in the next. So long as terrorists believe that the
methods they employ will yield results, they will continue perpetrating
their crimes. Civilized society must never Succumb to a conspiracy of
violence.
We must not withdraw into isolated enclaves of protection, but must
band together to keep the world as a whole open and safe. Certainly
the answer to terrorism is not ’’Come home America.”
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The tragedy at Tel Avivis Lod Airport, the murders in Munich, and
the sending of bombs through the mail naturally command headlines, but
■what shoiild not be overlooked, particularly by those who resort to terrorist
activities, is that substantial progress is being made by the world community
toward containing these threats, with this Administration in a leadership
role.
President Nixon has directed a series of actions on the diplomatic
front and on the enforcement front to strengthen the net to ensnare
these criminals.
In the aftermath of the Munich tragedy, President Nixon moved
swiftly to tighten security in the U.S. against terrorist attacks.
the Presidents words:
In
"Since we are dealing with international outlaws
who are unpredictable, we have to take extra security
measures to protect those who might be the targets of
this kind of activity in the future. That might include
Americans of Israeli background, American citizens."
Then he placed a telephone call to Premier Golda Meir and assured her
personally that the U.S. Government would protect Israeli citizens in
the United States who might be threatened. He also directed that the
Executive Protective Service, operating under the Secret Service, assist
the New York Police Department in providing security at the Israeli and
other UN Missions in. New York. Moreover, we intensified EPS security
for the Israeli Embassy and other foreign missions in Washington and
provided EPS protection for, the World Bank - Itnernational Monetary Fund
meeting in Washington.
In immediate response to the Munich tragedy, President Nixon, prior
to establishing a Cabinet Committee to Combat Terrorism, which I will
discuss later, established a high-level intelligence committee, under
the direction of the State Department, to establish special relations
with intelligence groups of friendly nations for the exchange of infor
mation about terrorists and another committee to coordinate U.S. law
enforcement efforts against terrorism. Secretary Rogers conferred with
representatives of more than 50 embassies in Washington to examine plans
for a collective security system against terrorism. Also, Secretary
Rogers expressed the Administration’s full support for legislation
extending to foreign "official guests" of the U.S. the provisions of
Federal laws against attacks on foreign government officials here.
I was proud to see Ambassador George Bush exercise only the second
veto by the United States in the 27-year history of the UN Security
Council. The proposed resolution was so obviously one-sided against
Israel that it did not even mention the Palestinian Arab terrorist
attack on the Israeli Olympic team. The U.S. vetoed this resolution because
every attempt our government made to balance the resolution by calling for
the condemnation of terrorism was blocked by China and the Soviet Union.
- 3 -
In the following two weeks the United States took additional actions
to further international efforts against terrorism. First, the U.S.
succeeded in placing the issue of terrorism on the agenda of the
UN General Assembly. Then, in his remarks at the opening of the
27th UN General Assembly, Secretary of State Rogers sought a world
diplomatic conference to achieve an international treaty for the
prevention and punishment of acts of terrorism including:
—
a treaty to prosecute or extradite those who attack
or kidnap diplomats or officials of foreign governments
or international organizations;
—
a treaty providing for multinational suspension of all
air service to countries which fail to punish or
extradite hijackers or saboteurs of civil aircraft; and
—
a treaty to require prosecution or extradition of
persons who kill, seriously injure, or kidnap innocent
civilians in a foreign state for the purpose of harming
or forcing concessions from a state or international
organization.
An additional success was achieved when the Interpol General Assembly
in Frankfort, Germany, by unanimous vote (58-0-0) adopted a Resolution
proposed by the U.S. Delegation condemning certain forms of terrorist
activity, recommending that member countries take measures to prevent
and suppress such actions, and urging cooperation among the members
through the Interpol machinery. The Israeli Delegation and 10 Arab
Delegations endorsed the Resolution.
Next, while these actions were occurring, the President directed
the establishment of a Cabinet Committee to Combat Terrorism. This
Committee is developing and coordinating the various activities throughout
the Government to deal quickly and effectively with the world-wide
problem of terrorism. All of the U.S. anti-terrorist initiatives to
date and our future plans are being reviewed and guided by the Cabinet
Committee.
Air Piracy
President Nixon also led the world community into action against
terrorism in the air piracy area, following the multiple hijackings in
September 19?0> where Arab terrorists seized four commercial airplanes,
imperiled 600 passengers, and then destroyed the planes with a capital
loss of $50 million.
Our President's reaction was swift and vigorous.
message delivered on September lly 19?0> declared:
His historic
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~
"Piracy is not a new challenge for the community
of nations. Most countries, including the U.S., found
effective means of dealing with piracy:on the high seas
a century and a half ago. We can ... and we will ...
deal effectively with piracy in the sky today."
There was no suggestion in launching this bold program for
"America to come home." Rather, the President chose to lead the world
in fighting a new terrorist menace that threatened all peace-loving
people, wherever they might live.
The President called for armed guards on U.S.
pre-departure inspections. Within 2h hours of the
I am proud to say that 100 Treasury Agents were in
American sky marshals. And within a week Treasury
principal overseas flights numbered 275«
carriers and for
President’s action,
the air -- the first
Agents protecting
The President then selected Treasury as the agency to develop a
permanent sky marshal force because of the close relationship to
Treasury responsibilities and expertise in enforcing Customs laws and
in the Secret Service protective mission. This Treasury sky marshal
force works in close coordination with the Department of Transportation,
FAA, and the Department of Justice.
Treasury is proud of the job done in recruiting, screening,
training, deploying, and supervising a semi-permanent force of about
1,200 Customs Security Officers, who now are able to perform their
mission through pre-departure screening of airline passengers and as
guards aboard planes in flight.
With this assignment, Treasury enforcement came full-circle. Treasury
is the oldest Federal law enforcement organization in the United States.
In the early days of our nation, Customs officers of Treasury fought
sea pirates — in the 20th Century they are being called upon to protect
against the menace of aerial piracy.
The President's program consists of diplomatic and enforcement
elements:
First, U.S. diplomacy is working for agreement within the community
of nations so that none will offer sanctuary to skyjackers. Obviously,
if a skyjacker were punished wherever he lands, or returned to the
country where the crime was committed, it would create an important
deterrent and close a serious loophole.
Diplomatic initiatives of the President have received support of
almost all of the nations of the world. In practically every country,
skyjackers have only one thing to look forward to -- prison.
The President’s forceful action in September 1970 dramatically led
the world toward doing something constructive about this problem for the
first time.
- 5 -
Secondly, there are armed enforcement personnel, Customs Security
Officers, "who screen and inspect passengers before they board their
aircraft and ■who, on selected flights, accompany the plane in the air.
To date there has not been a skyjacking attempted on a flight
■where Customs Security Officers have conducted a pre-departure search.
We have detained 59>248 potentially lethal •weapons and made 2,478
arrests on the ground for possession of illegal ■weapons, immigration
violations, transport of narcotics and other law violations. Of those
arrested, 384 possessed weapons and made hijacking or sabotage threats
and 889 possessed narcotics, marijuana or dangerous drugs.
In the air, CSO's have made 42 arrests for actions endangering
crew, passengers or the aircraft, including 18 in response to threats
of hijacking and 24 for other causes involving air safety.
Mail
One particularly savage form of terrorism we have encountered is the
letter bomb ■which has spread around the world and killed the Israeli
Agricultural Attache in London. * Fortunately, an officer of the U.S.
Bureau of Customs discovered the three explosive envelopes addressed to
Israeli officials in New York City.;
In response to this new threat our Customs officers are cooperating
with the Postal Inspection Service in an intensive program to uncover
and intercept these deadly missives before they reach their unsuspecting
recipients; and agents of our Bureau of Alcohol, Tobacco, and Firearms
are also lending their considerable expertise in the detection and
handling of these and other explosive devices.
Concurrently, all Federal agencies have been alerted to the
possibility of mail bombs and tty? procedures for dealing with them.
Every one of us working on the complex problem of terrorism, and
its skyjackings, mail bombs and other violence, realizes that much more
must be done. We are encouraged, however, by the President's urgent
concern and his mandate for an immediate vigorous attack on this
problem and its earliest resolution.
"A Full Generation of Peace ... A New Prosperity Without War."
The President's leadership in combatting terrorism and criminal
violence, by individials or organized conspiracies, is one aspect of his
overall objective of bringing about world peace. As the President stated
in New York on September 27:
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6
-
"The ■world is reaching out for peace. The way
may be hard and treacherous, but men of reason and
decency sire determined today, as perhaps never before,
to make the effort. Let us not be disrupted or turned
away by those ■who would loose anarchy upon the world;
let us seek no accommodations with savagery, but rather
act to eliminate it."
Implicit in everything the President does is his dedicated pursuit
of peace. His objective is a new prosperity without war, a full
generation of peace for the United States and the world.
Indeed, his achievements
benefits flowing from his new
area of law enforcement, will
to Richard Nixon as the Peace
in foreign policy, supplemented by the
economic policy and his actions in the
lead historians of this century to refer
President.
Let me tell you why:
1. He is bringing to an end the war in Vietnam in a manner that will
insure a lasting peace. Since he has taken office, the U.S. troop
level in that country has dropped from 542,000 in January 1969, to
35 )000 as of today -- this means that our direct involvement in Vietnam
has been reduced by 94$ with further scheduled reductions to 27,000
by December 1. These reductions in troop levels have been
accompanied by a dramatic drop in the casualty rate.
2. The President made a historic journey to Peking last May which
began a dialogue with a government that represents nearly one quarter of
the world*s population. Already trade agreements have been reached
with the Republic of China and many other accords to further world
peace are just over the horizon.
3. Mr. Nixon was the first American President to visit Moscow.
This journey opened up new lines of communication with the other super
power, damping the fires of the Cold War.
4. The Moscow trip achieved an arms race accord. The Senate has
approved a treaty limiting defense weapon sites in each country. In
the immediate future the Congress will send to the President a resolution
authorizing approval of the U.S. - Sòvièt interim agreement limiting
offensive nuclear weapons.
5. During the Nixon Administration, the four powers were able to
reach an historic agreement on the status of Berlin, a potential tinder
box for twenty-five (2 5 ) years.
- 7 6.
Through President Nixon*s Initiative and leadership, the Middle
East has enjoyed over two years of cease fire. It "was the President*s
position that before any agreement could he reached between the two
sides, a cease fire must prevail.
Recognizing that Israeli strength must be maintained until peace is
achieved, the President has provided for economic and military assistance,
both grant and credit, to Israel amounting to over $600 million in
Fiscal Year 1971, over $500 million in Fiscal Year 1972 and over
$500 million projected for Fiscal Year 1973*
Allow me at this point to repeat President Nixon's messagé honoring
this 25th anniversary of Israel*s nationhood:
"The commitment of our nation to the survival of
Israel is an article of American faith,
"Our two lands are as one in our love of freedom
and in our unyielding resolution to preserve that freedom.
"A keystone of my foreign policy is, and shall remain,
a relentless search for peace in the Middle East;
"— a lasting peace that will guarantee Israel *s
survival and the future of all peace-loving people of
the Middle East;
"— an enduring peace that will enable today *s
celebration of Israel*s nationhood to echo down the
centuries." J
These are not pious promises but solid contributions. We are
determined not to permit the military balance to tip against Israel.
Foreign Minister Abba Eban and other Israeli leaders have
declared that President Nixon has "impressively fulfilled his promises
to Israel." One of the many reasons for this was President Nixon*s
firm demonstration of U.S. strength when Israel and Jordan were
threatened by Syrian forces in September of 1970. The President *s
actions speak louder than any words.
7- Integral to the President's objective of world peace is economic
prosperity. His New Economic Policy, announced on August 15, 1971, marked
a watershed in world history, not just U.S. history. Because of the New
Economic Policy we are now achieving a peacetime economy with real growth
and vitality, as well as reasonable price stability. Economists of various
schools of thought are as close to consensus as they have ever been that a
major upswing in the economy without excessive inflation is now taking place.
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8
-
What does this new era signify for the United States and the rest
of the trading world? Essentially, it means we are well on the road
to creating an international economic system which, on the basis of
mutual advantage, will stimulate international trade and freer
c ompetition, draw nations and people together, and thus form the
economic basis for a lasting peace with prosperity.
*
*
*
"A full generation of peace...a new prosperity without war" sums
up the guiding principle of President Nixon*s Administration. This may
well be a modern-day application of the immortal words of that revered
teacher, Hillel, who, when asked to condense the "Torah" into the
briefest possible form, replied: "What is hateful to thee, Never do
to thy fellow man."
0O0
i
FOR IMMEDIATE RELEASE
October 20, 1972
SECRETARY SHULTZ NAMES BATTEN OF J. C. PENNEY
AS 1973 CHAIRMAN OF PAYROLL SAVINGS COMMITTEE
William M. Batten, Chairman of the Board and Chief Exec
utive Officer, J. C. Penney Co., Inc., New York, New York,
has been appointed Chairman of the 1973 U. S. Industrial
Payroll Savings Committee by Secretary of the Treasury George
P. Shultz.
Mr. Batten, who succeeds Donald S. MacNaughton, Chairman
and Chief Executive Officer, The Prudential Insurance Co. of
America, served on the U. S. Industrial Payroll Savings Com
mittee in 1972 as Retail Merchandising Chairman.
He will
assume the Chairmanship at the annual meeting of the Committee
in Washington on January 11, 1973.
In naming Mr. Batten, Secretary Shultz said, MYour ac
ceptance of this assignment assures a continuation of the out
standing leadership which has made the Committee a vital force
in the sound management of the debt and in advancing the sta
bility of our economy and our country in a crucial period.”
Members of the Committee are the chief executives of
leading corporations.
They will conduct a nationwide campaign
to enroll 2,400,000 employees in the Payroll Savings Plan -either as new participants or as present savers who increase
their E-Bond allotments.
The Committee was first organized in late 1962 by then
Secretary of the Treasury Douglas Dillon.
Harold S. Geneen,
Chairman and President, International Telephone and Telegraph
Corp., served as first Chairman, in 1963.
He was followed,
in 1964, by Frank R. Milliken, President, Kennecott Copper
Corp.; Dr; Elmer W. Engstrom, then President, RCA Corp., 1965;
Lynn A. Townsend, Chairman of the Board, Chrysler Corp., 1966;
Daniel J. Haughton, Chairman of the Board, Lockheed Aircraft
Corp., 1967; William P. Gwinn, then Chairman and Chief Execu
tive Officer, United Aircraft Corp., 1968; James M. Roche,
then Chairman of the Board, General Motors Corp., 1969; Gordon
2
M. Metcalf, Chairman of the Board, Sears, Roebuck and Co.,
1970, and B. R. Dorsey, President, Gulf Oil Corp., 1971.
All
continue to serve on the Committee.
The mission of the Committee is to stimulate the regular
purchase of Series E Bonds by employees throughout the nation.
Employers will be urged to sign up at least one of every two
employees not taking part in the Payroll Savings Plan and to
obtain an increase in allotment from at least one of every
two employees who are now enrolled in the Plan.
Mr. Batten was born June 4, 1909, in Reedy, W. Va.
He
joined J. C. Penney Co. as an extra salesman in 1926, becoming
a regular salesman in 1928.
After graduating from Ohio State
University with a Bachelor of Science Degree in Economics, in
1932, and graduate work at the University of Chicago, he
joined the company on a full-time basis in 1935, as a sales
man, and then progressed to section manager, and assistant
manager in Lansing, Mich.
Subsequent promotions led to his
election as President and Chief Executive Officer in 1958;
he*was named Chairman of the Board in 1964.
During World War Two, Mr. Batten served as a lieutenant
colonel in the U. S. Army's Office of the Quartermaster
General.
He is Chairman of The Business Council, Washington; a
Director, American Telephone and Telegraph Co., Boeing Co.,
First National City Bank and First National City Corp., and
the American Retail Federation.
He is a member of several
civic, academic, and social organizations, and the recipient
of numerous awards.
Mr. Batten is married to the former Kathryn Pherabe Clark
of Gettysburg, Ohio; they have two children, David Clark and
Jane Louise.
The Battens reside in Mill Neck, Long Island,
New York.
oOo
i DepartmentoftheTREASURY
IHINGTON, D.C.
TELEPHONE W04-2041
TTENTION: FINANCIAL ED ITOR
October 16, 1972
OR RELEASE 6:30 P.M.
RESULTS OF TREASURY'S WEEKLY
BILL OFFERING
The Treasury Department announced that the tenders for two series of Treasury
jbills, one series to be an additional issue of the bills dated July 20, 1972
, and
me other series to be dated October 19, 1972
, which were invited on October 10, 1972,
W e opened at the Federal Reserve Banks today.
Tenders were invited for $ 2,300,000,000,
lor thereabouts, of 91-day bills and for $ 1,800,000,000, or thereabouts, of
182-day
tills. The details of the two series are as follows:
HE OF ACCEPTED
«COMPETITIVE BIDS:
High
Low
Average
91-day Treasury bills
maturing January 18, 1973
Approx. Equiv.
Annual Rate
Price
98.790
98.777
98.782
4.787$
4.838$
4.818$
1/
182 -day Treasury bills
maturing
April 19, 1973
Approx. Equiv.
Annual Rate
Price
97.418
97.397
97.408
5.107.$
5.149$
5.127$
1/
of the amount of 91-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
pTAL TENDERS APPLIED FOR AND ACCEPTED BY FEDERAL RESERVE DISTRICTS:
District
Boston
New York
Philadelphia
Cleveland
Richmond
Atlanta
Chicago
St. Louis
Minneapolis
Kansas City
Dallas
San Francisco
TOTALS
Accepted
Applied For
13,115,000
29.465.000 $
1,982,755,000
3,405,015,000
13.720.000
44.015.000
21.830.000
26.175.000
8.355.000
33.355.000
9.360.000
12.575.000
107,695,000
271.820.000
32.050.000
49.530.000
11.225.000
35.805.000
23.565.000
42.625.000
11.925.000
35.525.000
65.320.000
145.455.000
$4,131,360,000
Applied For
$
17,130,000
2,955,140,000
36.615.000
41.645.000
24.330.000
16.590.000
378.425.000
37.285.000
31.770.000
29.315.000
31.635.000
163.005.000
$2,300,915,000 a/ $3,762,885,000
Accepted
»
2,480,000
1,500,840,000
6.615.000
10.945.000
4.030.000
.
11 100.000
128,825,000
24.785.000
9.770.000
19.315.000
9.585.000
71.990.000
$1,800,280,000 b/
1/ Includes $ 193,695,000 noncompetitive tenders accepted at the average price of 98.782
1/ Includes $112,605,000 noncompetitive tenders accepted at the average price of 97.408
|7 These rates are on a bank discount basis. The equivalent coupon issue yields are
I 4.95 $ for the 91-day bills, and5.34 1 for the 182-day bills.
Departmentof
^T
11»
FOR RELEASE AT 11:45 A.M. EDT
October 17, 1972
LOCAL POLICE HELP TREASURY'S IRS
NARCOTICS TRAFFICKER PROGRAM
A substantial number of the 1,011 major narcotics
traffickers targeted for intensive tax investigations
by the Treasury/IRS Narcotics Trafficker Program were
referred by local police, Assistant Secretary of the
Treasury Eugene T. Rossides told the 79th Annual
Conference of the International Association of Chiefs
of Police at Salt Lake City today.
Mr. Rossides praised the police for their effort^
saying, "The cooperation of State and local police in
identifying key traffickers, in furnishing intelligence
information on them and, in several cases, in working
with our Treasury agents on some phases of the investi
gations, has been an invaluable contribution to the
program." In addition, Mr. Rossides noted that the
minor target program, which has resulted in the seizure
of over $10 million from pushers, depends, to a great
extent,on local police who call the IRS when they make
a drug arrest and find sums of cash or property.
Mr. Rossides said, "Without doubt, the current
shortage of heroin is due, in large part, to the
dedicated efforts of State and local police throughout
the country."
Mr. Rossides pointed out the cooperation between
the Treasury and local police in many areas involving
the mission of the Secret Service, the Alcohol Tobacco
and Firearms Bureau, the Bureau of Customs, as well as
the Internal Revenue Service.
He also highlighted
Treasury's ability to help local police internationally
through Interpol.
S-65
-
2
-
He said that the peace officer is, as President
Nixon noted on Sunday, the first line of defense
against crime in the United States.
In concluding his remarks Mr. Rossides recognized
the work of the IACP in bringing greater degrees of
professionalism to police work, H ® said,"the challenge
to every law enforcement officer is to be a professional--properly trained, judicious in application of
his enforcement tools, and with personal integrity and
character."
Full text of the speech is attached.
0O0
Octo
FOR RELEASE AT 11:45 E.D.T.
REMARKS OF THE HONORABLE EUGENE T. ROSSIDES
ASSISTANT SECRETARY OF THE TREASURY
(ENFORCEMENT, TARIFF AND TRADE AFFAIRS, AND OPERATIONS)
Before The
SEVENTY-NINTH ANNUAL CONFERENCE
Of The
INTERNATIONAL ASSOCIATION OF CHIEFS OF POLICE, INC,
SALT LAKE CITY, UTAH
October 17, 1972
11:45 A.M
t
It is a pleasure to be with you at the 79th
Annual Conference of the International Association
of Chiefs of Police.
Your distinguished professional society, which
includes members from over 60 nations, is the kind
of cooperative effort needed to meet the threat of
modern crime.
As you well know, criminals today
have as little respect for international boundaries
as they have for the rule of law.
Therefore, the
fight against crime is truly a global responsibility
for the law enforcement elements of every civilized
nation in the world community.
I would like to stress three themes this morning:
First, the successes of President Nixon's
worldwide war on the drug trafficker;
Second, the need for an ongoing cooperative
effort between Federal law enforcement agencies
and State and local police -- the first line of
internal defense against criminal forces; and,
Third, the professionalism of the peace
officer.
2
The President's MultiDimensional War on Drug Abuse
Last Sunday began the third annual "National
Drug Abuse Prevention Week." In President Nixon's
Proclamation launching the event, he made this
observation:
"The enormous human tragedy of drug abuse
gives pause to our customary gesture of setting
aside seven days a year for intensified concern
with this or that social problem.
More than a
problem, narcotics and dangerous drugs are a grave
emergency threatening each and all of us.
"Drug Abuse Prevention Week, therefore, is but
one more occasion to redouble our war against this
enemy, to take stock of large victories won in a
short time, identify areas of continuing concern
and target more resources on them."
I am pleased to report that President Nixon's
anti-narcotics drive jls succeeding.
The President's
action program:
(1)
has turned the tide in the war against
drug traffickers in the U.S.;
(2)
has galvanized the nations of the world
into action against drug abuse.
More
has been done on the international front
in the last three and one-half years than
in the previous 35;
(3)
has reduced the supply of heroin;
(4)
is taking the profit out of the heroin
traffic; and
(5)
has brought unprecedented pressure on
the drug distribution system»
3
President Nixon started his war on drugs the
first month of his Administration when he established
the Interdepartmental Task Force on Narcotics,
Marijuana and Dangerous Drugs that led to Operation
Intercept in September, 1969, and Operation Coopera
tion in October, 1969.
He has escalated that war
with a series of action programs against the supply
of narcotics and the demand for narcotics.
First, he elevated the drug problem to the
foreign policy level and has taken personal
initiatives in soliciting the cooperation of other
governments.
The aim of our diplomatic efforts is
to have each nation do its share and meet its
responsibilities in the worldwide war against drug
abuse.
These U.S. initiatives have already produced
some tremendous accomplishments by other countries.
France, under former U.S. Ambassador Arthur K.
Watson's urging, has now made the war on drugs a
priority program.
In March of this year, French
Customs seized 935 pounds of heroin, the largest
seizure in history, from a boat bound for the
United States, and 321 pounds of morphine at the
Italian border.
A few months later, French
narcotics agents seized 220 pounds of heroin and
four functioning heroin laboratories, one of which
was capable of producing enough heroin to supply
one-fifth of this country's addicts for a year.
These actions have made serious inroads on the
world drug traffic.
- 4 -
In the opium producing area, we obtained
agreement by the Turkish Government that after
June 1972 there would be no further planting of
opium poppy in Turkey.
Turkish opium has been
a major source of heroin for U.S. addicts.
In Southeast Asia, we have mounted a major
diplomatic and enforcement effort, working closely
with the Governments of Thailand, Laos, and South
Vietnam to bring about destruction of opium supplies
and heroin laboratories and interdiction of the
ground, sea, and air smuggling routes.
Substantial
seizures have been made.
Second, he placed particular emphasis on the
crucial roles of education, research and rehabili
tation.
On January 1, 1969, the Federal Government was
funding only 16 treatment programs.
This number has
grown enormously and, as of the end of FY 1972, there
were 321 Federal treatment programs operating.
Funding in the areas of education, research and rehabili
tation has also increased substantially.
More money
will be spent on these programs during this Administra
tion than in all the preceding years.
For Fiscal Year
1973 alone, $485.2 million has been requested by the
President for programs in these areas.
This is over
10 times the amount funded in FY 1969.
Third, he recognized the central role of the
states and the need for close Federal-State coopera
tion in a unified drive against drug abuse.
Through
the Law Enforcement Assistance Administration (LEAA),
substantial grants have been made to States for the
attack on drug abuse.
The Office of Drug Abuse Law
Enforcement was established in the Department of
Justice to work closely with State and local enforce
ment agencies in the assault on the street-level
heroin pusher.
- 5 -
Without doubt, the current shortage of heroin
is due, in large part, to the dedicated efforts of
State and local police throughout the country.
Fourth, he provided a substantial increase in
budgetary support for the Bureau of Customs and BNDD and
initiated the Treasury/IRS tax drive on drug traffickers.
In FY 1973, $244.2 million will be spent on narcoticsrelated law enforcement as compared with $20.2 million
which was spent in FY 1969.
Fifth, he stressed total community involvement —
the private sector as well as governmental agencies
in this anti-drug abuse program«
Sixth, he recommended differentiation in the
criminal penalty structure between heroin and
marijuana, and flexible provisions for handling
first offenders.
The Need for Ongoing Cooperative Efforts Between
Federal and Local Law Enforcement Agencies_______
The Treasury Department deeply appreciates your
assistance in the fight against illegal narcotics,
I would like to report to you the results of one
of these programs— the Treasury/IRS Narcotics Trafficker
Program, which would not have attained its remarkable
success without your dedicated aid.
In the 15 months
that we have worked on this program, we have selected
1,011 individuals as major targets for tax investigation.
The word for the drug traffickers is to get out of
this illegal business or face up to intensive tax
investigation.
The warning should be spread in every
city and town in the United States that this program is
institutionalized and is working.
Everyone in this
illegal trade should know full well that he will be
subject to tough tax scrutiny and possible criminal
penalties.
6
This program is one reason we have the drug
traffickers taking steps backward and all of us must
now redouble the pressure on them.
Treasury has coordinated this tax program with
State and local police, whose more than 350,000
officers constitute the first line of defense against
the internal traffic in narcotics.
The cooperation
of State and local police in identifying key traffickers,
in furnishing intelligence information on them and, in
several cases, in actually working with our agents on
some phases of the investigations, has been an
invaluable contribution to this program.
A substantial
number of the major targets under tax investigation
were referred to us by State and local police.
The police have also been of great assistance to
our program by contacting IRS whenever, in the course
of arrests or searches, they have found substantial
cash or other assets in the possession of persons
involved in the drug traffic.
In this manner, we have
been able to remove considerable sums of cash from the
drug traffic by applying it to taxes and penalties
owed.
This aspect of our program could not be effective
without the assistance of the local police.
Law Enforcement Cooperation
is a Two-Way Street
The Treasury Department, with its diverse law
enforcement missions, has the second largest law
enforcement arm in the Federal Government -- with over
6,000 Treasury Agents.
These agents are in four
operating agencies of the Department:
the U 0S. Secret
Service, the Bureau of Customs, the Internal Revenue
Service, and the Bureau of Alcohol, Tobacco and Firearms„
Each of these agencies has a specialized mission.
Our
policy is to assist and complement, but never to usurp,
the job the local police must ultimately do.
î
/L/
7
The Treasurÿ Department assists your law
enforcement agencies with a multitude of resources
and capabilities, including our advanced forensic
sciences techniques, which are primarily, though not
exclusively, carried out by the ATF and Customs Bureaus,
and the facilities of the International Criminal Police
Organization (Interpol).
Should the occasion arise, Interpol can provide
you with the means and capability of pursuing a
criminal who flees the United States, as well as
obtaining vital information and evidence in a foreign
country thousands of miles away.
The National Central
Bureau of Interpol, operated by the Treasury Department
in Washington, can draw upon the police resources of
114 countries located on every continent of the globe.
With the exception of the Soviet Union, Communist China,
and their satellites, every major country in the world
is a participating member.
Interpol serves any police or investigative agency,
whether it be local, county, state, or Federal, having
a requirement for investigation, from a routine criminal
name
check to a full criminal investigation leading to
the gathering of evidence and subsequent arrest and
extradition of the fugitive.
The Treasury Department pays the annual membership
dues and maintains and staffs the National Central
Bureau.
So no charges are assessed local police depart
ments for investigations, telex, cable or radio messages.
Thus, you, the local Chiefs of Police, are completely
free to utilize Interpol's services.
The Professionalism of the Peace Officer
Now let me give you my appreciation of the work
being done by the first line of defense — the local
police officer.
There is no question that police
-
8
-
officers in this country are doing an outstanding job
of maintaining the public safety and curtailing the
criminal element, while simultaneously respecting the
substantive aid procedural civil rights of all our
citizens.
In fact, the role of the policeman is that of a
peace officer and we should start using that more
descriptive title.
I
was in Miami Beach last August and personally
witnessed some of the confrontations that the officers
of Chief Rocky Pomerance had with the various
protestors.
The Miami Beach police did a magnificent
job in preventing much of the potential violence that
could have marred the conventions there.
They behaved
with marked restraint.
Only after some of the pro
testors interfered with the rights of law-abiding
citizens and delegates were they arrested — and then
with moderate force.
The police force in a country is an essential
element not only for the safeguarding of the rights
of the citizens, but also for ensuring the minimal
stability needed for any system of representative
government to progress in an orderly fashion.
In
fact, on a number of occasions the most anarchistic
protestors have found the protection of the peace
officer necessary to ensure their very ability to
protest!
Yet, in the United States, prior to this
Administration, the policeman had been the forgotten
m a n Q Leaders spoke and wrote a great deal about
almost every other institution but very little about
the essential and paramount role of our law enforcement
officials.
President Nixon has changed that.
He set
the tone of leadership and support for law enforcement
as an integral part of the rule of law.
- 9 -
If law enforcement is to continue to be
regarded as an honored profession, then the
challenge to every law enforcement officer is to
be a professional— properly trained, judicious
in application of his enforcement tools, and with
personal integrity and character.
Your own organization, the IACP, works toward
these goals because its program is on a professional
level, designed to strengthen the capability of peace
officers to maintain public order with a minimum use
of force and, at the same time, to improve their own
public image.
The peace officer is the basic social scientist.
He must deal with all persons from all walks of life,
on minor matters or in major situations of a crisis
nature.
He must know his community.
He must work
with all individuals and groups to obtain their respect
and cooperation.
He must be aware that stability does not mean
status quo, that it must provide for orderly change,
and that peaceful dissent is an essential ©lament
of representative government and must be protected
as strongly as any other right of our citizens.
Our peace officers must not only be enforcers of
the law but, in doing that job, must be diplomats,
psychologists, sociologists, and doctors as well.
In
essence, they must be men of thought as well as men
of action.
Law enforcement officers must achieve and maintain
a professional status.
Every police department must
have a procedure for constant evaluation of its methods
and programs to keep up with an ever-changing society,
and must be uncompromising in rooting out any violation
-
10
of internal integrity.
I know that these are the objectives of your
association and of all of you here today.
For his part, President Nixon will continue to
do whatever his Administration can to help your
forces maintain peak effectiveness, as together we
combat the menace that drug traffickers and other
criminals represent for America.
In his speech last Sunday, the President made
a categorical commitment:
"...it is our local police forces who
are the real front-line soldiers in
the war against crime.
As President
over the past four years, I have
given all-out backing to our peace
officers in their dedicated efforts
to make all of us safer on the streets
and more secure in our homes, and I
shall continue to do so/'
0O0
TH E D EPA RTM EN T O F T H E T R E A S U R Y
WASHINGTON, D.C. 20220
Assistant Secretary
October 17, 1972
Dear Chief:
In my address before this IACP Convention, I
discussed the Treasury/IRS Narcotic Trafficker Program,
which is in furtherance of our mutual effort to disrupt
trafficking in narcotics.
The program centers upon middle and upper echelon
narcotic traffickers.
Your support and cooperation to
date has made it possible for us to achieve substantial
results, as set forth in the enclosed summary.
We need
your continued help in furnishing us the names of
potential middle and upper echelon narcotic targets in
your area and supportive intelligence concerning these
traffickers.
In those areas where you already have close contact
with IRS Narcotic Trafficker Program personnel, this
information should continue to be passed through those
contacts.
Where such close contacts do not exist, please
direct such information to Mr. John Bridgman, P. 0. Box 120,
Washington, D.C.
20044.
It would be helpful if this
intelligence would include the individual’s role in
trafficking, his standard of living, including income,
known assets, current address(es) and Social Security
number, if known.
We are very pleased to be associated with your
membership in this effort.
Sincerely yours,
LEPARTMENT OF THE THEASURY1
HfflRML REVENUE SERVICE PROGRAM
AGAINST NARCOTICS TRAFFICKERS
V- RESULTS AS OF OCTOBER 15, :1972
tilfdoK'■
Major Target Assessments:
Number
■'"•r-rrodoaA
129
Regular Assessments . /
Jeopardy Assessments—p /
Tax Year Terminations-/
Total
„
Amount
$
8,268,617
iàStotom 18,764,281
8 ,898,759
36,037,lié
J *3
212.ili, $
3/
Minor Target Assessments:—
Jeopardy Assessments
Tax Year Terminations
Total
73
$ 2,61*5,913
■8^Kîi*7 31,611,301*
956
$34,257,217
Total Assessments
V:|j|gallilij>
$ 70,294,359
;-i¡¡Í8 ¡¡1f
Seizures:
..
Currency
Property
Major Targets
■
;*,
í *'rï>,,
$ 2 ,03^,638
87,238
Total
P H||j|||{l Minor Targets
.-J*JJ
1101 5Sill
$ 9>283>107
1 >717,73.1
$ 13,122,811
Cases Recommended for Prosecution
Criminal Tax Cases in U.S. Courts awaitibg-Trial
Criminal Tax Convictions
,....
Total Criminal Cases
33
17
100
“Hocrw #1
----------- ;
— — ---------
riCav wmi
l/ Assessments of taxes made -where a return has been filed or
should have been filed, but where circumstances exist under
which delay might jeopardize the collection of the revenue.
2/ A computation and assessment of the tax due where the time
for filing the return has not expired but where circumstances
exist under which delay might jeopardize the revenue.
llover©U
3/ Assessments made as a result of seizures by other law
enforcement agencies of cash or othér assets against current
income where delay might jeopardize collection of the revenue
Office of Law Enforcement
lííOtl $8
ÈEEAROMENT OF THE TREASURY
INTERNAL REVENUE SERVICE PROGRAM
AGAINST NARCOTICS TRAFFICKERS
RESULTS AS OF OCTOBER 15, 1972
5TATE
TARGETS
METROPOLITAN AREAS
COMPLETED
INVESTIGATIONS
Alabama
Mobile
2
Alaska
Anchorage
1
Arizona
Phoenix-Tuscon-Yuma
Arkansas
Little Rock
California
Los Angeles-San Diego
San Francisco-Oakland
b5
16
39
7
Colorado
Denver
12
Connecticut
Hartford
lb
^Delaware
Wilmington
District of Columbia
Washington
Florida
Miami -Tampa-Jacksonville
Hawaii
55
5
2
5
1
22
5
.75
22
Honolulu
10
2
Georgia
Atlanta
29
9
Illinois
Chicago, Springfield
56
5
Indiana
Indianapolis-Gary
11
2
Kentucky
Lousiville -Covington
Newport
retili
, 5
Louisiana
New Orleans
Maine
Bangor
Maryland
Baltimore
12
2
Massachusetts
Boston
21
3
Michigan
Detroit
62
13
Minnesota
St. Paul-Minneapolis
Mississippi
Gulfport
Missouri
St. Louis-Kansas City
b
; 13
1
b
WfvT
17
2
¿ìli '
SH :tffiTROPOIiITAN;AREAS *%■?£'£*U TARGETS
C'/•'‘ ,Pf
’Xtì •tt;t v*l*»U.iir
Omàha
3
w m m 'z s m m
STATE
Nebraska
Nevada
Las Vegas
New Hampshire
Portsmouth
New Jersey
Newark-Camden
New Mexico.
Albuquerque
New York
EEfc
COMPLETED
INVESTIGATIONS
3
All - ~ ■'-
2^ '
3
,rA
•
q Albany
Buffalo-Rochester
: New York City
Suburbs
North Carolina
Gree nsb oro -Charlotte
Ohio
Cineinnati-Dayton
Cleveland
Oklahoma
Oklahoma City
66
8
11
2
12
62
15
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*
October 15, 197/
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SECRETARY SHULTZ:
It is thought by most people,
2
including us, that the special drawing rights could be a
5
suitable numeraire for an international monetary system.
4
extensively this will take over as the basic international
5
assets, from the dollar, from gold, is stated very positively
6
and optimistically by some people who feel that we can just
7
sort of decide to create lots of S D R ’s and everybody will
8
accept them and go along.
9
How
I think that the SDR offers a very important potentia
10
role, but I think we ought to approach it cautiously, being
11
cognizant of the fact that money is a very tricky thing.
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If
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If you look at the history
fdnanciall.ior.isesr. and?: one
thing and another, you can see that sort of the psychological
acceptance of something that people call money is extremely
important and we ought to, so to speak, develop this new
asset in a way that has it grow sort of in proportion to the
confidence that people develop in it, rather than sort of
pouring it out on the system all of a sudden and possibly
ruining a potential good thing.
T h a t ’s a little bit beyond your question.
I couldn't
really define it simply anyway, so I took it as far as —
QUESTION:
M r . Secretary.
SECRETARY SHULTZ:
QUESTION:
Yes, sir,
Is it true we are right.
SECRETARY SHULTZ:
Only if it is something —
what
3
1
would be a right would be an international agreement to have
2
SDR as a means of settlement of international accounts, and
5
then an agreement on the proportion in which they would be
4
issued among the countries.
5
$1 billion worth, then what does the U.S. get and what does
6
India get, what does this country and that country get?
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8
That is, if you're going to issue
You have to develop an allocation,
now, of course.
9
and there is one
That's the very sticky thing.
The developing countries are intent on using the
10
creation of SDR's as a means of channeling aid to them because,
11
obviously, if people will accept the SDR, and you get some,
12
then you can spend it to get resources1
, realrresburcés and no
13
if you create $1 billion worth and you allocate
14
disproportionate amount to the developing countries, that's a
15
form of secondary aid, they want that.
'16
it in a
I concede that there
are strong arguments for that.
17
We have been a country with a go slow attitude on
16
this subject, wanting to see just what the SDR's come down
11
to, and also with the feeling that if we in the United States
2(
are to grant aid —
2;
we shoúld do it through the proper Congressional procedure,
2;
and we think that it's improbable that the Congress would be
2
willing
2
the climates that we have on that subject
to go along with that means of really granting aid
without going through the Congressional process.
Yes, sir.
-A
4
1
QUESTION:
The Wall Street Journal reports that
^
2
Western European countries and France seem to be quite inclined
5
to accept the U.S. decision on the country's surplus foreign
4 ' exchange, check the degree of control of those with
5
deficiencies.
6
Are you as optimistic as the Wall Street Journal?
.7
SECRETARY SHULTZ:
Well, I think*there has gradually
8
developed a support for the view which we put forward very
9
strongly, and which Secretary Connally put forward very
10
strongly, that we've got to have symmetry in an international
11
monetary system.
12
So there have to be pressures toward equilibrium in the
15
balance of payments account of any individual country, and
14
that it is just as important to do that with surplus countries
15
as with deficit countries.
16
If it is to work it has to come out even.
The system, as you know, has essentially worked, to
17
put pressure on deficit countries, but surplus countries are
18
as out of bounds as a deficit country is except that they have,
19
in a sense, the reverse reasons.
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So, we have worked with that, discarded this thing,
21
supported that in these meetings, and I think on the whole
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people want it, people support that in theory, and they're
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gradually beginning to support it in practice if we can figure
out ways to bring it about.
So, I'm reasonably —
I think that the developing
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. . .
ab
concensus bn things like that is the sort of thing that gives
!one hope that we can develope an agreement on a new international
monetary and trading system within some forseeable time, perhaps.
It might not be quite as fast as we would like, but there is
motion on in that new area of concensus are developing.
I might say I think Secretary Connally did a terrific
job for the U.S.
in taking a tough posture
and
people see. that we meant it in saying that we must
making
defend
our interests and we want to have a free and fair trading
world and want to be part of it,
but we want to see that
it is fair to the U.S. interests.
'
.
He's sticking up for that strongly, and I think
that tough position which was criticized,
to do with getting that -—
has had a lot
it's just like any negotiation.
If there's nobody around willing to take a tough stand, you're
going to get rolled over —
QUESTION:
and he took it.
[Inaudible.3
SECRETARY SHULTZ:
It's not a great problem.
more inclined toward the other fellow.
We were
It was clear it was
going to be a European in the job of Chairman of
the
group
21
of Deputies which is sort of a working group,
22
23
I guess, and
we constructed a list over two months ago, worked it over very
carefully, of who would be people that,we thought would be
24
good on that,
and we came down to five names that we were
25
agreeable to —
[Inaudible.]
—
and we came down to these
6
1
2
5
4
5
two.
I think we would have somewhat preferred the Italian 1 1
delegate, but those were essentiallytthe .candidate “as.'far .as
we were concerned.
'4 *n
He is, of course, an able person.
director of the Dank of England
He's executive
(inaudible)
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One thing that I might say, the poinitthat iwegmake-on this new committee of twenty that's been.Idevloped,
we want to negotiated a new monetary system*.
is that
We -have-' the
process of taking votes to elect the Chairman, and then we
will do that.
I think that we expected one way or the other
countries, major countries particularly agreed
agree that no committee^ can
tz
mns£
nvote r;theeOThitedSt^le^v ihiJ4%d
States or any other major country into an agreement that we
think is against our interests.
We just won't accept t*>at.
There has to be a process in this committee.of building
18
a concensus of views and agreeing on it mutually, andlit just
19
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won't go if its three and two or something like that.
Then
we 'd have. .to ‘draw back: and; s t a r t ,again.
21
So, I think the reason I mentioned that is that we did
22
have the vote, but I don't think anyone can see if that's the
23
way we're going to settle it.
.24
The President, in his speech to the group, made a.
25
tremendous dent, and I think this speech and his decision to
L
7
1
to move forward with a positive plan was the turning point
2
in this meeting and the turning point in the development of
1?
a new monetary and trading system.
4
He made a couple of points which he drew from the
5
SALT Talks, among
6
principles.
.7
recognizing the tilings that divide people, "keeping in mind
8
the overall purpose which tends to unite usj and then secondly,
f.
and relevant to the point I was just making, that the kind
others,!.he-gave us two, fundamental;.
One was the importance of keeping in mind while
1 la
of an agreement that's needed is an agreement that each country
1 11
will feel a stake in preserving.
1 12
If you can reach that kind of an. agreement, then
13
it will hold, it will have stability, whereas if you reach
I 14
and agreement and there are some major countries that don't
1 15
feel that way about it, so they're dissatisfied,
I 16
won't last.
I 1.7
So, we are approaching it in that spirit and I
think it's a good spirit all around.
20
QUESTION:
2!
SECRETARY SHULTZ:
I 22
as the last one; just
did Break down*
18
I 19
It will break down again
then it
and I —
Okay.
I'm an old college professor
as a matter of fact, I was even a Dean when the
23
President called me and invited me to be Secretary of Labor
24
in his Cabinet.
I 25
I think he was a little startled at the
alacrity with which I accepted the offer, but he didn't
. 8
know about the old saying that old deans never die; they just
lose their faculties.
(General laughter.)
SECRETARY SHULTZ:
I was very conscious of that, be
cause’I didn rt~ Want t o ’be: classified that way, but I have spent
a lot ^of time -in. the -classroom and at other meetihgs at r.he
University, of: Chicago where -X. was last' on; the ;faculty;
There
were ho whistles,- bells, gongs, .or anything' to tell..you:when a
meeting/ o r whatever kind of‘meeting, to have anyway of;telling!
you' when the! meetingVis over/' ;so you tend to devleopoa sixth t
sense. 3?; guess', i looking around a t the people/..and they; let': you
Icnow* when the meeting is
over.
(General laughter.)
SECRETARY SHULTZ: (Inaudible) This;:meetihg/is/bverrbut
do want before adjourning to say how much I appreciate your
having this gathering.
lot in awarding t h e pin.
I know that Senator Fong helped a
I sm grateful to him.
He's been
very helpful to me in many respects.
But it is a pleasure to get a chance to meet with
this group.
While the conversations haven't been as extensive
as I would like them, I have had a chance to sample the
menu, find out what's on your minds, and I find that a very
helpful thing to do because it's just#too easy to sit in
your office in Washington and of course you see people from
25
all over the country all the time, but you have the feeling
9
tiat you're getting the views that people have but you're
really not because they come there for a purpose, you know,
and you don't quite get the way they size things up.
So I think getting around, having a chance to
chat with you is very worthwhile from my standpoint, and I
appreciate it very much, and of course, I appreciate the
chance to be here
in Hawaii and not cold.
I went around
the golf course this afternoon.
So, I believe that.
matter what happens.
(Applause.)
I guess I'll believe it no
1
1
DEPARTMENT OF THE TREASURY
2
5
REMARKS OF
4
THE HONORABLE GEORGE P. SHULTZ,
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SECRETARY OF THE TREASURY
6
BEFORE THE
7
TEAMSTERS UNION
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October 4, 1972
2
MODERATOR:
And it's a special honor for myse
to have the opportunity to present to you a man who plays
a very
key and important part not only
but in
the matter of managing money and
in our national affairs,
doing
things
international.
I asked him what condition the Treasury was in, if
it was possible to make a little subsidy.
flow wasn't too good at the moment
He said the cash
and he wouldn't recommend
asking, so we gave that up.
Well, let me say about the Honorable Secretary —
and I've known him for some time, as a man of real sincerity
and he
has the common touch.
He holds
in the
affairs of our nation, but he's
a very elevated position
still just an ordinary
guy and he talks to you that w a y , meets with you and greets
you that way.
He's had over the years, because of his background
in economics and bargaining, union-management relations, he
has had a very sincere, genuine concern, he's spent his time
studying the problems of the working man and their families,
how they live and what they need to live with, and for many,
many years he's been a very sincere friend of the trade union
movement in this country, understands it very well.
I could recite a lot of credentials, you've seen
some of them in your brochure, but I don't think that's necessary
I'm going to introduce to you a very swell guy, a very fine
2
3
1
0
individual, the Honorable Secretary of the Treasury,
thj
j
Honorable George Shultz.
5
George?
4
(Applause.)
5
SECRETARY SHULTZ:
6
Ladies and gentlemen and delegates, I must say you
Thank you very much
[Inaudible.]
7
know how to put on a seminar.
8
when I was teaching at the university and you said seminar,
9
it was a little smaller than this, and we didn't have that
10
I remember back in the days
kind of entertainment that you put on here last night.
11
(General laughter.)
12
SECRETARY SHULTZ :
I noticed that
13
working all the time.
14
what was going on and looked oyet at
15
was making notes and working away.
16
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Einer.
He
fellows that got up on the stage.
(General laughter.)
20
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I looked up on the stage and saw
that the Teamsters put on was really superb, some of those
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was
Of course, I think some of the special entertainment
18
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Einer
SECRETARY S HULTZ :
I expected at some point to have
somebody shout out, girls, watch the hands, girls, but nobody
did.
As I have said, I am very pleased to appear here
before you as a supporter of the trade union movement and
25
collective bargaining.
I believe in it.
I think it's made
4
1
a constructive contribution over the years to not only
2
members of the labor unions, but to American society.
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Now, collective bargaining,
under fire.
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"It's always easier to be
critical than it is to be constructive."
So, as I think of collective bargaining, what it
is is an effort to be constructive.
After you have made
demands and counter-proposals and so on and so forth back
and forth, half of collective bargaining comes in agreement,
and agreement is a constructive thing.
It's something that
you live by, which you hope improves the conditions of work.
13
14
as you know, is always
It always has been under fire, and I think that
we have to remember that saying,
7
8
tnef
And this is how I regard this seminar,
spirit
in that
as a conference that recognizes we have problems,
but at the same time says we have a good institution here, and
our job, in a conference like this, is to seek improvement of
that, and it's in that spirit that I approach it, and address
myself, as
Einer 1
has asked me to do, to the problems of
collective bargaining in the years ahead, in the talk that
I have prepared.
Now, I would say that in accepting this invitation
I'm conscious out of my own background, having worked in the
field of labor relations, having been Secretary of Labor, I'm
24
conscious that I'm outside my jurisdiction,
and being somebody
25
with a bit of a labor background, I 'know I'm out of that
'
m
jurisdiction, but I checked with the Secretary of Labor/and
he says it's okay to go ahead and sound off on the subject,
and of course, it is a subject of long time interest to me
and great importance to anybody who has responsibilities in the
performance of our economy, not only our domestic economy, but
our performance with respect to international competition,
and that was borne in on me very heavily last week when we
had meetings with some 124 finance ministers from countries
all around the world.
But, I would say that I. also have a history of
involvement with the President in this field, and I go back
to the discussion I had with him when he was the Present-elect
and I was his designee as Secretary of Labor.
Naturally,
I
was interested to know what kind of Secretary of Labor did
he want and I had my own ideas as to how the job ought to be
approached.
Well, he said he wanted somebody like Jim Mitchell,
I'm sure^rnany of you knew Jim Mitchell, the Secretary of
Labor under Ike, and I think one who is well regarded by the
labor movement as well as by management.
But, the President
put down three conditions that he thought were very important,
aud they're ones that I have tried to live by, and I think
again, in terms of this conference and what it means, they
wean something.
First of all was the idea that we should listen to
1
organized labor.
2
labor.
5
all the time but listen and try to get it through your head
4
what is behind what they are saying.
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Say what you have on your mind.
Agree where you have agreements.
with somebody.
Don't be afraid to agree
At the same time, don't be afraid to disagree,
but put out in a direct way so it's understandable what it is
that you
have on,.your
mind
.t
and define them.
Be sure, be a little careful with commitments you
make, but once you make one, be dog gone sure that you
live up to it and stick with that commitment no matter what.
And I suppose, especially if it happens to be a little inconven
ient, in retrospect, rt's important to stick with that commit
ment .
16
17
Hear what is on their minds, not necessarily agree
Second, be direct.
10
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We should bG ready to work, with organized
Now, I thought what I would do against that background
is to discuss two main subjects.
The first is to discuss
some aspects of collective bargaining prospects over the next
three year cycle, and I believe there are aspects of this that
have been completely overlooked in the generally pessimistic
press about collective bargaining.
22
As you know, the press, by and large, thinks
23
collective bargaining is a big problem area, that it doesn't
24
do a good job, and they're quite pessimistic about the
25 outlook.
1
o
d
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Well
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And then second
18
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.
m
I know this has been discussed
a great deal within your union*
discussing it a little with
and others.
I've had the pleasure of
Einer
and Frank Fitzsimmons
I'll make several observations/ looking forward
to a more detailed exchange of views this afternoon and then
beyond ~~ some observations on this problem of strikes
and the public interest», what could we do about it.
Nov/, I think before taking up either of those subject!
I would like to make a comment on something that is less
directly related to collective bargaining, but I think of
great general importance insofar as your union is concerned,
insofar as the country as a whole is concerned.
16
17
.
i
optimistic flavor to what we can look forward to.
11
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■
X want to di.scuss that with you and present
some thoughts about it that seems to me lend a much more
4
5
f
But, the subject that I want to flash for your
attention, and do this out of a labor relations background, is
the importance of leadership, and it seems to me that over
the last ten years or so somehow or other in this country we
have gotten in the habit of knocking leadership.
Anybody
21
that stands up and is constructive and stands for something,
22
s a leader.
23 with him?
So, automatically, the idea is what's wrong
_
24
Well, I think that we need to get our thinking turned
25
around, and we are in the process of doing that, of recognizing
8
1
the importance of leadership and the need for it that
2
have today.
5
I think there is a tendency for that to happen.
4
am interested to see among many of my management friends,
5
example, the recognition of the fact that at least as far
6
law probably hasn't done all that much good.
8
some problems.
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14.
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for
as leadership is concerned in the union, the Landron-Griffin
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It has caused
.
•
So, I think it is a necessity to have the kind of
' ■
■
leadership based on these ingredients, as I would see it: on
intelligence.
We must have the ability to really think about
these subjects and apply intelligence to them.
Second, it seems to me a key ingredient is a sense
of strategy.
Where are you going, not just today, but where
does this take you tomorrow and the next y e a r a n
try to look ahead.
effort to
'
Third, I would say, it's a capacity to be realistic,
certainly, to put those goals out there where you want to
get eventually, but at the same time to have a capacity to
he realistic about what there is here today and is achievable.
I might just say in that connection, again referring
to this international meeting that was held in Washington last
l8
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11
in a very positive way.
So, one aspect of what he said 4 i f a 3
12
I was particularly interested in as far as reactions are
13
concerned —
14
expanding all over the world.
he made the point that we want to see jobs
And then he said, but like
5
we just said, that we d o n ’t expect to see jobs expanding in
6
your country at the expense of my country.
7
stand still for that.
8
9
1 10
1 11
I'm not going to
So, I thought to myself, I wonder how that's going
to go down.
That is the kind of statement that you don't
make in international meetings.
So, I listened around to the finance ministers
[ 12
around the world and heard what they had to say, and in
1 13
general their reaction was, well,
i
—1
the way we feel.
that's realistic.
That's
It's realistic to expect he would feel that
1 15
way, ana, we can feel that we're likely to progress better on
1 16
the basis of realism than on the basis of something else.
I 17
18
1 19
I 20
21
22
23
24
Well, fourth, I would say a sense of humanity.
There
has to be that touch with the people finally, and it seems
to me of terrific significance is guts in leadership, an
ability to stand up in a tough situation and take a position
and to fight it through.
So, those are some ingredients that as I have looked
at your program and discussed the nature of this seminar, it
seems to me you're getting it, and as I have known them, you
25
have people like
Harry
Rutledge and
Einer
Moe
and
1 ||
10
0
1
F ra n k F it z s im m o n s
2
u n io n .
5
We c a n
to
g iv e
a l l w e lc o m e
you
th a t
le a d e r s h ip
i
h e re
in
th is
th a t.
Now, let me turn to the first of the two topics
4
that I mentioned, the subject of collective bargaining,
5
say, 1973 through 1975, and the greatest of these is 1973, I'm
6
sure.
7
8
I think
let's
this three year cycle that's ahead of us
is not being analyzed correctly and is being widely misunderstot
9
Let me give you the analysis of what lies ahead as typically
10
given in most prognostications.
11
12
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24
The first point that's made is that more workers
will come up for bargaining in 1973 than in 1972 and therefore
that, of course, has the potential for a lot of strikes and
a lot of difficulty, and everybody can pull out the numbers
which show 1972, about 2.8 million covered by new agreements,
ift 1973 about 4.3 million,
so people point to that and they
say there lies the seed of trouble.
Second, the observation is widespread that when you
look at recent contract settlements, you see terrific front
end loading in those contracts, with very large first year
increments typically, so people put that down and say, well,
we had perhaps a little respite from that in 1972 because of
the nature of the industries* bargaining, but in 1973 t h a t .
will be back and that's going to be a big problem.
25
Third, people note the fact that the economy is
XX
1
expanding strongly.
2
terrific clip.
.5
million increase in jobs in the last year, one year span, is
4
the largest increase in jobs for a one year span since way
5
back in the middle 1950's when we had an unusual expansion
6
in 1955 and 1956.
7-
It is moving up in realvterms at a
Employment is rising strongly.
The 2.6
So, the economy is expanding strongly and it is
8
expected, of course, that that will have its impact in the
9
labor market, and that they'll have tight labor markets and
10
people therefore hurt in that.
11
and there will be a re-ignition of inflation going along with
12
these strikes and sparked by rapid wage increases with a
13
heavy front end load.
There'll be a lot of strikes,
14
So, what we see from this, according to this analysis
15
is a kind of disaster in front of us, heavy bargaining calendar
16
a lot of strikes, bargaining power out of kilter with a
17
re-ignition of inflation, basically stemming from the nature
18
of the contracts that will be negotiated.
19
That all adds up, according to the widespread
20
analysis, to a failure of collective bargaining, and the
21
indictments and the predictions of failure have been widespread
22
for a long time, and they're very widespread now.
23
24
25
Now, let me take a look at this analysis and tell
you what I think is wrong with it, because I think it's very
important to make contact with what people are saying and see
(
i11
1
12
5
if it holds up.
12
h
V
I don't think it holds u p f bjdlfc] anyway, I'll
tell you what my reasons are, and then you can agree or
disagree.
4
First of all, let me take you back a ways and remind
5
you that we had a period running from about 1957 to about 1965
6
in which you had virtual stability in the price level.
7
rose some, 1 percent,
8
for all practical purposes people felt that we had stability
9
in prices, and that made an impact on expectations.
10
was the experience of people, so that became the expectation
11
of people.
12
It
1 1/2 percent or so like that, but
That
Second, associated with this kind of stability in
13
prices, we had the growth of the long term agreement. . It
14,
didn't start then, it started before, but it has become more
15 ■ and more common in major industry to have the three year
1 16
agreement or the long term agreement of various durations.
17
And, I think it's fair to say, also off of that stability,
18
less interest in the cost of living escalation,
19
20
21
22
23
24
25
and where you
had cost of living escalation, a tendency for it to be
DIBLE [
and sometimes
[INAU
[INAUDIBLE] .
Now, against that background we had the emergence,
not on purpose, but the emergence of government policy in
the late *60's with the juxtaposition of the Vietnam War
costs and the Great Society costs, of the government running
a terrific deficit with the economy operating at full
13
1
employment, and this as we —
2
not very much argument about it —
5
inflation, and inflation started in 1965 and each year
4
successively —
5
'68 higher than '67?
6
gradual run-up in the rate of inflation.
7
8
11
12
13
14
15
16
17
18
19
20
21
'66 higher than
this is what generated
'65;
'69 higher than
*67 higher than
'68.
'66;
You've had a
Now, what was the result of that, speaking now
in terms of the collective bargaining?
9
10
I think it's geifera;íly recognized
Well, I think the result was pretty clear, that
if you took major industries where the expectation was firm
that there was not going to be inflation, bearing it out
in long term contracts, that major industries where the workers
lost ground.
They lost ground in' real terms in the sense of
prices against wages, particularly prices plus taxes against
wages.
But, they also lost ground in relative terms, and
I think as people who have worked in the field of laborindustrial relations, you know that there's nothing that gets
to me as much as the situation where I have been on a parity
with the guy over there, and all of a sudden he moves ahead
and I don't, so that that structural relationship was so
disrupted.
22
Now, let me give you some numbers that reflect what
23
24
1 *m talking about here, and I'll use some examples of major
industries to illustrate this point.
25
Here áre industries that bargained in 1967 and 1970,
14
1
r*J
rubber, auto, and trucking , take those three.
2
Now, go back to 1966, the year before Qhey bargained,
5
and ask yourself what was happening to the rate of increase
4
in average hourly earnings in those industries as compared
5
to average hourly earnings in general, and it's quite revealing
6
to look at these numbers.
7
quite like this before.
8
I've never seen them tabulated
- ■
In 1966 the private, non-farm average increase was
9
4.5 percent.
10
For trucking it was 2.9.
11
For rubber it was 3.4.
For auto it was 2.9.
Now, move to 1969f again, the year before the
12
bargaining, average average private, non-farm,
13
rubber, 4.7, autos, 5.5; trucking,
14
average as; in the previous period.
15
6.7 increase;
6.1, all three below the
Now, take a couple of other years.
Take the
16
people who bargained in 1968 and in 1971, how did they do?
17
So, here we'll take aerospace, steel,-metal cans and communi
18
cation.
19
20
21
22
23
.24
25
In 1967, average hourly earnings, private, non-farm
across the board were rising at a rate of 4.7 percent.
Aerospace,
3.7; steel, 1.1; metal cans,
3.4; communications,
3.2, all below the average.
In 1970, again, the year before the bargaining,
private, non-farm average 5.9 percent;
3*5, metal cans, 4.2; communications,
aerospace,
4.8; steel,
3.4, all below the
15
1
(A
average.
\
2
t) x
S o , what do you learn from tables likg that?
Well,
5
I think you see the statement of a problem,
4
what lay behind the unrest that I think we all felt throughout
5
the labor force, and which you could see in the overall
6
statistics about real spendable earnings, that is, if you
.7
take weekly earnings, allow for the inflation bite and allow
8
for the tax.bite, you see that that period from 1965 through
9
and you see the —
the end of 1970 there was no increase, no increase at all.
10
So, we had large increases in money wages, but
11
no increase in real wages.
12
wheels and they were getting damned frustrated about it.
13
So, people were spinning their
So, I think what we see here is kind of looking
14
back at a situation where we were bound to have turmoil, and
15
you were bound to have large front-end loaded settlements.
16
I don't see how you could expect, anyone could expect to get
17
away from it, and of course, that is essentially what happened.
18
And I'll review, so to.speak, what the results were.
19
20
21
22
23
24
25
In 1967, following that 1966 that I read, private,
non-farm average,
8.7; trucking 6.0.
4.7 percent increase; rubber, 5.7; autos,
In 1970, average, 5.9; rubber, still a
little below, 5.5; autos, 13.2; trucking, 14.3.
You really
got back.
(General laughter.)
SECRETARY S HULTZ:
Some people might say you did it
16
.5
1
with a little extra
2
back.
5
4
class
because
you
came
But, at any rate, I think that relationship was
bound to occur.
5
And, take the '68 and '71.
Private, non-farm
6
average^ 6.3 in '68; steel, again a little below,
7
metal cans, 9.8; communications, 9.3.
8
average was 6.5; steel, 12.0; metal cans, 11.7; communications,
9
14.7.
10
And
6.0;
'71 where the
So, what we see here is a rapid back and forth, that
11
1 think is, analytically, very easy to explain according to
12
the way the situation developed as I described it.
13
Now, if you said to yours-elf, now, what does that
14
mean about collective bargaining during this period?
15
fact that we had this catch-up, so does that mean that collecti
16
bargaining was a failure as so many have said?
17
I would say not at all.
Quite the reverse.
The
If
18
there hadn't been a reflection through collective bargaining
19
of the problems inherent in those first figures that I read
20
to you, I would say collective bargaining would have failed.
21
It would not have been realistic in facing up to the problems
22
that people have, and that's —
23
do?
24
25
after all, what is it that you
You give representation and the problems were t h e r e .
So, it
'didn't look to me as though that was anything
unreal or that one should have expected otherwise from the
17
1
2
type of figure, without regard to any particular^n^mj^ers, the
| type of figures that I read off.
5
Now, let me come back to the original proposition
4
against that background, and let's try to look ahead and ask
5
ourselves about the pessimistic outlook that I mentioned in
6
the beginning.
7
8
9
10
11
12
13
14
Well, first of all, now, instead of having had the
Consumer Price Index going, up each successive year from
through '69, what we have seen is that in '69 we had our
highest rate of increase, about 6.1 percent.
came down a little to about 5.5 percent.
17
18
19
20
21
22
In 1970 it
In 1971, prior to
the wage-price freeze it had come down further to 3.8 percent.
Since the wage-price freeze it has been on the average about
2.9 percent.
15
16
'65.
Now, that's still too high.
That is not low enough
to get out of people's minds by any means the notion that
inflation is still a problem
areas that are very visible,
,
and certainly with particular
like food prices, that the worker
and his family feel very directly, there is a lot of work to
be done.
But, nevertheless, the scale has been coming down
rather than going up.
23
Second, in terms of the relative wage positions of
.24
key groups of workers, that has been restored.
That is more
25
or less in balance, never precisely in balance.
Remember those
17
18
1
comparisons we make, one way or another, but as coitj^a^ed
2
with the way in which the organized groups w e r e \getting out
o
of kilter all the time, off the numbers that I read you, that
4
situation has been corrected, and in terms of real wages
5
instead of that period from '65 through 1970 with no increase,
6
in the last two years, taking it on the average, we have seen
7
real wages go up on the order of about 4 percent per year.
So, what does that add up to?
Well, it means that
9
the problem of this justifiable turmoil that people felt in
10
the earlier time has been, so to speak, satisfied by events.
11
Now, what does that mean?
I am sure you can tell
12
me about lots of grievances and sources of dissatisfaction and
13-
so on, but some of what was there i s n ’t there, so t h a t ’s
14
one point.
15
Second, the tremendous easily combustible need
16
for catch-up has been done, and on the whole, that situation
17
has been rectified and the deferred increase picture is somewhat
18
more stable.
19
_
So, on this basis it seems -to me as, at least I
20
look back through the latter half of the 1960*s, that period,
21
I would not describe it as a period where collective bargaining
22
failed in the sense that turmoil occurred and high front-end
23
loaded wage settlements occurred, rather, one in which collective
24
bargaining reflected the problems that were there, maybe
25
over reflected it in some cases, but anyway, it reflected them.
19
11
They were genuinely there, and in that sense-it wo^kkcL^) It
12
worked the way it's supposed to work, and I d o n ’t see any
1^
reason why we can't expect the same thing to happen again.
14
As a new situation emerges, a new thrust of collective bargainii ig
l
1
5
goes along with it.
And the key here, coming back to the inflation
16
I
7
business, is, as it was before, the key here is Government.
18
Will Government have the discipline not to re-ignite the
19
inflation by running a gigantic budget deficit when we get
I io
up to full employment or there abouts?
1 11
hurts you.
I 12
fought now to try to keep that discipline, keep that budget
1 13
under control.
1 14
That's when it really
And that is what the battle that is being
.
It is insane to say that we can spend a lot more
I 15
Government money and not raise more, and to
1 16
wage and price control,
I 17
doesn't make sense.
I 18
balance
and have price stability.
the
It just
So, you have to have that discipline on the budget
1 19
and given it, then it seems to me we can expect that free
] 20
collective bargaining may do a pretty good job for us.
1 21
I 22
1 23
24
25
Now, let me turn briefly to the second subject,
this question of strikes and the public interest, and there
again, you know, it is a subject that is very prickly.
a perennial problem that's been debated over the years.
go back to one of the earliest
It's
You
pieces of legislation in the
20
1
field of labor relations, the Railway Labor Acjtf,l back in 1926,
2
basically they*re fighting the same problem, \ v
5
Now, the President made an effort to get at it
4
three years ago, put forward some legislation.
5
and I was Secretary of Labor at the time —
6
was put forward not as the last word, so to speak, but as the
7
first word.
8
the problems and here is something.
9
discuss it.
10
we don't say our suggestion is the best of all.
11
it's a suggestion and let's hear what other people have to
12
suggest, and let's go at it.
13
I would say —
that that legislaticj
It was put forward in the spirit of here are
Now, l e t ’s sit down and*
Let's have some hearings,
let's get at it.
And
We just say
Well, that hasn't passed, and it has had some
14
opposition.
15
at any rate, what the President now feels is, the problem is
16
still there.
17
a different way and let us consult very widely on that subject,
18
and so in his Labor Day address, you probably noticed, he
19
proposed a council or committee on industrial peace,
20
I would hope that this committee would be one in which
21
essentially you had a relatively small group of people, each
22
of whom is expert so you don't have to do years of research
23
to get them up to scratch.
I think some of it has come from your
Let's come at it again.
union .But,
Let's come at it
and
They're already up to scratch.
The^
•24 would be experienced people who know the subject and who come
25
together, and they are given an assignment by the President with
20
21
1
the notion that it isn't going to take them ftorJ^/er^ to do it,
2
work on it for two months, work on it for three months, some
|5
short period of time, and then say what you think.
And if
4
you don't agree, let the disagreements show through so we
5
can see just what we are up against there.
6
Well, now, I would put forward to you, of course,
.7
not a suggested program because I don't think that would be
8
the spirit of the kind of discussions that we want to have
9
underway, but rather some general principles that it seems to
10
me have to be in people's minds when they approach this
11
subject.
12
I suppose the first one and the basic one, you
13
couldn't have expressed it any better than Mr. Fitzsimmons
14
did here —
15
I will have to say, at least with some fear and trepidation
16
having been involved in many things personally and seeing them
17
reported in the newspaper, and saying, gee, I was there.
18
didn't recognize anything.
19
20
21
22
23
24
25
and I'm just looking at the newspaper account,
I
(General laughter.)
SECRETARY SHULTZ:
So, this has quotation marks
around it, and it sounds sensible to me anyway, and it says,
that despite the size, Mr. Fitzsimmons says, that the Teamsters
Union "never takes the position we are stronger than the
community we serve."
Well, I think that is a basic principle that one has
22
1
2
5
4
>5
6
7
8
9
10
il
12
15
to have in mind, and to me what that means is that^tjic L/j?ublic
health and safety has got to be of paramount concern,
and
any activity that seems to threaten public health and safety
is not going to be acceptable to the community.
So, we have to recognize that.
That is a starting
point that everyone must keep in mind.
At the same time the other side, that we want to
preserve the free collective bargaining process and we know
that that means that we must preserve the right to strike,
and there's no sense in saying —
this at breakfast —
Leonard and I were discussing
that you can have free collective
bargaining and say to the unions, or management, on the lockout side for that matter, that under no circumstances can
14
there be any strike or lock-out, because the two things just
15
don't fit together.
16
17
18
19
20
2!
22
23
The possibility has to be there.
So, we have to look for ways in which it can be
exercised to meet the
first
principle that : donIt
imperil
the first principle.
I would say, third, that the general tone of collects re
bargaining throughout the economy will have an impact upon the
sectors of the economy where the public interest seems to be
particularly affected by a strike, and of course, the transportation industries have that characteristic because a strike
24
there has its impact on third parties so quickly as compared
25
with other industries.
2
23
B u t,
if
th e
w ill
a ffe c t
to n e
and g e n e ra l s p ir it
th e e co n o m y
th e se
to n e
and
le g is la t iv e ly
th ro u gh
w o u ld
th e
T h e y 'r e
r ig h t
t h a t n o t h in g
If
o p p o se s
h a v in g
se e k
w ill se e k
to
w i l l w o rk
if
you
try
to
say,
and
th e
la b o r m ovem ent
not
lik e ly
it ,
th a t
i t 's
t r o u b le
s o m e w a y o r o t h e r v/e h a v e
he w as t a l k i n g
th ro u g h o u t
in
p u t s o m e t h in g
to
so m e o t h e r
now .
th e P r e s id e n t p u t fo r w a r d
have to
say
com m and g e n e r a l s u p p o r t .
and t r a d in g
b a r g a in in g
th e
th a t b a s is .
C o n gre ss,
and v ig o r o u s ly
So,
th a t can
on
it
we w a n t t o W o rk o n
c o lle c t iv e
it
I
So,
g e n e ra l su p p o rt.
w o rk v e r y w e ll.
c o u n t r ie s
of
fo u rth ,
d o e s n 't h a v e
v o c ife r o u s ly
a s w e ll.
ap p ro ach
Now ,
it
areas
c a n b e g o o d g e n e r a l l y ,( l \ t h j i n k
th e re
at
A g a in ,
t h is
—
he
s a id
agre e m e n t th a t e ach
p re se rve ,
w ill
fin d
to
s o m e t h in g
q u o te
a p r in c ip le
i n t e r n a t i o n a l m e e t in g
ab o u t agre e m e n t on
r e la t io n s h ip s
an
to
and
in t e r n a t io n a l m o n e ta ry
as
a b a s ic
n a t io n
fe e l i t 's
—
in
p r in c ip le ,
in v o lv e d
it s
w it h
in t e r e s t
to
we
it
se e k
to p r e s e r v e .
W e ll,
s o m e t h in g t h a t
th e
sam e p r i n c i p l e
lo o k s w o r k a b le ,
a p p lie s
h e re .
e ve ryb o d y w ill
We h a v e
se e k
to
p re se rve
it .
F ift h ,
to se e k m uch m ore
have in
th e
m e d ia t io n
I
w o u ld
c r e a t iv e
c o lle c t iv e
s e r v ic e
lo o k
in
on
w ays to
b a r g a in in g
th e
a m o re p e r s o n a l
u se
th e
sp h e re .
G o v e rn m e n t,
le v e l
fo r
t a le n t s
th a t we
We h a v e
a good
and m any s t a t e s
have
us
24
b
h I
■
11
mediation services that do a good job.
At the same
some
12
of these
1^
extraordinary talent, and I don't see why we can't say to
14
an E m e r Moe or somef here is this dispute over here.
particularly general disputes really require
It doesn 't
5
have anything to do with your industry.
6
have any, sort of, direct conflict of interest in it, but
Therefore, you c a n ’t
.7
come over here and work with somebody of like quality on the
8
management side and somebody in the public sector,
9
on this dispute and help us mediate it, and use people , in
10
other words, who are experienced.
1 11
and work
They may not necessarily know all about the details
I 12
of that industry.
I 13'
is ■they,-would be experienced people who know how the process
1 14
works, and I think if we get people who are creative and
I 15
have them use people in a mediation sense, maybe we could get
1 16
around some of these disputes.
17
That's not important.
The important thing
And finally, I would say that we c a n ’t leave the
18
President empty-handed #in this area.
19
are that should be put in his hands, I think that's the kind
20
of question that we need to be discussing.
21
i 22
! 23
24
25
How strong the means
It does seem to me he needs to be equipped with more
than one avenue that he can follow so that he, too, can play
at this process of collective bargaining and he, too, can be
a little unpredictable and keep people a little bit off
balance as to just where the Government is going to come in.
r
1
p
Iu
And I think if that's the case this tends to
^
promote the collective bargaining process rather than having
5
one party or the other striving all the time to bring the
4
Government in.
5
y
Well, finally,
let
roe return to the theme of
6
leadership which I see is the theme of this conference and
7
the spirit of this conference.
8
conviction that collective bargaining is a good process and
9
it can work, that we have lots of problems, but we can
10
discuss them, we can solve them through discussion and through
11
bargaining if we have the kind of leadership that we need
12
and that we must have in management, in labor, and throughout
13
our country.
14
As you can see, I have the
.
And here again I would come back to these central
15
characteristics which it seems to me in a conference like
16
this you're trying to encourage and bring out: the application
17
of intelligence to the problem;
18
strategy, of an outlook that's longer than just next week's
19
aspect of the problem, so you try to think ahead, work ahead;
20
the ability to be both goal centered and idealistic on the
21
one hand, but realistic on the other; the sense of humanity tha
22
seems to me all leadership must have, particularly union
23
leadership; and the guts that's necessary,- that you can't
24
25
the application of a sense of
teach anybody in a seminar or a school —
itfe an attribute that
some people have and others don't have —
but the guts to stand
26
up in
to u gh
s it u a t io n s
And
I
and e x e rt
w o u ld h a v e
k n o w in g m a n y o f y o u r
to p
to
say
le a d e r s
o ve r th e y e a r s ,
k n o w in g p e o p le
and s e e in g
k in d
w it h
th e
t h is
k n o w le d g e
our co u n try h a s
th ro u gh
th a t I
of
th a t th e
e v e r se e n
have
t r ie d
to
p u t fo rw a rd
to
you
in
T h ank yo u v e ry m uch.
( A p p la u s e .)
14
15
21
22
23
24
25
le a d e r s h ip .
th a t
I'm
had
re assu re d
th e
chance,
th ro u g h o u t y o u r o r g a n iz a t io n
has go t
th a t m e asu re s
a p p lie d
you
of
a n d h a v in g
la r g e s t
ran ks
fin d
to
a c o n fe re n c e
th e
you w ill
t h a t k in d
g o in g
on,
up to
th e
re assu re d
a n d m o s t im p o r t a n t u n io n
le a d e r s h ip
to
I'm
th e
y o u .,
ye ars
at
th e
e x a c t in g
a n d w h ic h
ahead.
to p
and
sta n d a rd s
I
t h in k
(DepartmentoftheTREA$URY
IHINGTQN, D.C. 20220
; * " ' TELEPHONE WO4^04t
FOR RELEASE AT 2:00 P.M., EDT
WEDNESDAY, OCTOBER 18, 1972
SECRETARY SHULTZ ACCEPTS PLAQUE DESIGNATING
THE TREASURY BUILDING AS A NATIONAL HISTORIC LANDMARK
Treasury Secretary George P. Shultz today accepted a plaque
from Interior Secretary Rogers C, B. Morton designating the
136-year-old Treasury building as a National Historic Landmark.
Mrs, Richard Nixon, playing a role in the preservation and
protection of the country’s heritage, walked across the street
from the White House to witness the colorful ceremony and to
accept a special silver commemorative medal from Director of
the Mint Mary Brooks,
Two other silver medals, especially
struck for the occasion, went to Secretaries Shultz and Morton.
The ceremony took place at the South Portico of the
Treasury -- the third oldest Federally-occupied building in
Washington after the Capitol and the White House -- and marked
the first instance in which the Interior Department has so
designated a building occupied by a Cabinet-level official.
The ceremonial party gathered on the steps overlooking a
statue of Alexander Hamilton, who was sworn in as the first
Secretary of the Treasury on September 11, 1789.
The Treasury building erected between 1836 and 1869 is
regarded as one of the outstanding examples of Greek Revival
civil architecture in this country.
It is the third building
occupied by the Treasury Department.
The first was destroyed
by the British in 1814 and the second fell victim to arson in
1833.
S-66
Although it is probably apocryphal, there is a legend that
the position of the Treasury cornerstone was determined by
President Andrew Jackson.
Irked because he thought the committee
planning the building was dawdling, Jackson strode over from the
White House one morning in 1836 and, after examining the site,
drove his cane in the ground near the northeast corner, and
said:
"Right here is where I want the cornerstone."
The Treasury building today occupies a double city block
in downtown Washington.
The 15th Street facade,designed by
Robert Mills as a monumental Ionic colonnade, is its most
outstanding feature.
The building, measuring 260 feet east and west by 466 feet
north and south, is of hollow rectangular shape bisected by a
single corridor across the center from east to west.
The north,
west, and south facades have lofty porticoes, the pediments of
which are supported by 8 monolithic Ionic columns each 36 feet
high. The east facade, is, for the most part, a colonnade of
30 similar pillars in an unbroken line of 341 feet.
Inside,
fluted Corinthian pilasters topped by capitals bearing the
eagle with the lifted wing and the key of the Treasury seal
flank the broad marble corridors; sweeping circular staircases
with wrought iron balustrades join the different floor levels.
The Treasury has been the scene of intriguing historic
events.
For 55 days following the assassination of
President Lincoln, President Andrew Johnson used one of the
offices on what is now the third floor of the building, allowing
Mrs. Lincoln an opportunity to move from the White House
unhurried.
This room is little changed in appearance since
President Johnson's administration.
The Treasury Cash Room at the north end of the building
was constructed with six varieties of marble in the walls.
On
March 4, 1869, President Grant held his inaugural ball in this
room. The Treasury stores cash and securities in the vaults.
During World War II one of them was set up as FDR's
bomb shelter.
The history of the Treasury Department may be seen in the
public exhibit hall on the west side of the building, opposite
the visitors' entrance to the White House.
oOo
n
eDepartmentoftheTREASURY
I hiNGTON, D C 20220 - '
TELEPHONE W04-2041
FOR RELEASE AT 4:00 P. M.
1972
TREASURY’S MONTHLY BILL OFFERING
The Treasury Department, by this public notice, invites tenders for two series
of Treasury bills to the aggregate amount of $2,300,000,000, or thereabouts, for
cash and in exchange for Treasury bills maturing
of $1,700,170,000
as follows:
273-day bills (to maturity date) to be issued
of $500,000,000,
dated
October 31, 1972, in the amount
October 31, 1972, in the amount
or thereabouts, representing an additional amount of bills
July 31, 1972,
and to mature
July 31, 1973
originally issued in the amount of $1,200,980,000,
(CUSIP No. 912793 BA6),
the additional and original
bills to be freely interchangeable.
357-day bills, for $1,800,000,000, or thereabouts, to be dated October 31, 1972
and to mature
October 23, 1973
(CUSIP No. 912793
RDO).
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 0 ,000, $15,000, $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 clos
ing hour, one-thirty p.m., Eastern Daylight Saving time, Tuesday, October 24, 1972.
Tenders will not be received at the Treasury Department, Washington.
Mast be for a minimum of $10,000.
$5,000.
Each tender
Tenders over $10,000 must be in multiples of
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.
may not be used.
Fractions
It is urged that tenders be made on the printed forms and for
warded 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
(OVER)
-2account.
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.
Only those
submitting competitive 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 each
issue for $200,000 or less without stated price from any one bidder will be accepted
in full at the average price (in three decimals) of accepted competitive bids for
the respective issues.
Settlement for accepted tenders in accordance with the
bids must be made or completed at the Federal Reserve Bank on October 31, 1972,
in cash or other immediately available funds or in a like face amount of Treasury
bills maturing October 31, 1972.
treatment.
Cash and exchange tenders will receive equal
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.
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 considered to accrue
when the bills are sold, redeemed or otherwise disposed of, and the bills are ex
cluded from consideration as capital assets.
Accordingly, the owner of Treasury
bills (other than life insurance companies) issued hereunder must include in his
income tax return, as ordinary gain or loss, the difference between the price paid
for the 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.
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.
(DepartmentoftheTREASURY
SHINGTON, D.C. 20220
TELEPHONE W04-2041
FOR RELEASE AT 2 ;00 P«M«, EDT
REMARKS BY TREASURY SECRETARY GEORGE P. SHULTZ
AT
THE TREASURY HISTORIC LANDMARK CEREMONY
WEDNESDAY, OCTOBER 18, 1972 at 2:00 P 0M 0, EDT
Mrso Nixon, Secretary Morton, distinguished guests,
members of the Treasury Department, friends«oo
Mr«, Secretary, we are honored that the Treasury build
ing has been designated a National Historic Landmark«,
As Secretary of the Treasury and on behalf of the
American public, I accept with pride the responsibility of
preserving this building«
But this designation is only
one of the many important and significant events in the
136-year history of the Treasury building«
It was in this building, in a room overlooking the
White House, that President Andrew Johnson held his first
Cabinet meeting while the grief-stricken widow of President
Lincoln remained in the official residence«
And it was in the Treasury building, on March 4, 1869,
that President and Mrs« Grant held their inaugural ball«
I speak from the South portico of the building, the sec
ond wing to be completed, just a few feet from a statue
of Alexander Hamilton, the first Secretary of the
Treasury«
Across the way in the park sits General Sherman
astride his horse, appearing as if he were ready to
review the Federal troops who were billeted in the South
wing of the Treasury during the Civil War«
-2-
Where the North Wing is now, once was the home of
our fledgling brother, the State Department0 I refer to
the State Department as fledgling because Treasury was
established by an Act of Congress on September 2, 1789,
13 days before the State Department0 Treasury is the
oldest existing department0 There is even historical
relevance in the date on which the Congress authorized
the construction of this Treasury building
that date
was July 4, 1836c
We are also mindful that this Treasury Building
perpetuates the memory of tens of thousands of public
servants who have worked h e r e 0 They have served not
only the Treasury, but also units from which sprang
the Justice Department, the Interior Department, the
Public Health Service, the Civil Service Commission,
the Veterans Administration, the Coast Guard, and the
Office of Management and Budget0
Men -- and women -- who have labored here helped
develop the ideas for the International Monetary Fund
and the International Bank for Reconstruction and
Development, the Inter-American Development Bank, and
the Asian Development Bank, agencies through which the
United States contributes to the well-being of many
nations and peoples0
The building is rich in history0 But there are two
pieces of history that I think are especially worth
noting by those of us who work in this building todayQ
The first has to do with the iron beam-brick arch
construction of the building0 It was the first time
this kind of construction was used in the United States,
and a large group of congressmen were convinced — with
some expert architectural backing -- that the whole
thing would fall down when the scaffolding was removed0
The plan to build it squeaked through by three votes,
and appropriations were not finally voted until
congressmen could see the building standing freec
-3-
The second historical note has to do with the
cornerstoneo
It contains a golden lock of hair from the
head of the baby granddaughter of Andrew Jackson, who
was President when the cornerstone was laidQ I would
point this out to you with great pride, except for the
fact that, because of additions to the building over
the years, nobody is quite sure which stone is the
cornerstoneo
The lesson to be drawn from the first fact is this:
nobody in Treasury should be reluctant to stand up to
Congress and fight for what he believes to be right0
And the lesson of the second fact, the cornerstone, is
this: nobody in Treasury should be so cocky as to
think he knows it all0
However, in my short tenure here I've learned
something additional that is closely related to this
event today — that is, what makes Treasury tick, what
lies behind the Treasury tradition of excellence and
dedication -- traits for which this great building is
so fine a symbol0
Having previously served two years as Director of
the Office of Management and Budget, and having worked
closely with Secretaries David Kennedy and John Connally
on the economic Troika, I came to Treasury with advance
knowledge of its esprit and excellence,. And if there
is one single Treasury trait that has contributed to a
continuity of greatness, I think it can be summed up as
a "sense of reality,," As President Nixon once wrote
to one of our Treasury officials, it is a very clear
understanding that promises of "pie in the sky" seldom
end up as "meat on the table„"
The Treasury does not deal with pie in the sky„
It deals with realities, such as the awesome burden of
raising the taxes which Justice Holmes referred to as
the price we pay for civilization0
Fortunately for the citizens of this country, the
Treasury has always carried out this duty -- and a host
of others — with the highest of professional standards„
-4-
Fortunately, also, the Treasury has had a keen
appreciation of politics in the broad as opposed to
the partisan sensec Treasury*s approach to political
problems -- whether in conceiving and managing
legislation, administering the tax laws, guarding our
borders, or in any other of our activities Kg is based
not just upon its sense of reality, but also upon a
clear understanding of what the political process is all
about o
Politics has been referred to as the "art of the
possible." That definition is all right as far as it
goes, but I think it should go further0 In the Treasury,
we cultivate politics as the "art of making possible
what is desirable and what is necessary0"
And this brings me to my final thought concerning the
continuity of greatness and pride that has been the name
of the game in Treasury ever since the days of Alexander
Hamilton, our first Secretary0 The men who have preceded
me as Secretary of the Treasury have been leaders, leaders
who have known that it takes leadership of the highest
order to make the necessary possible, and the impossible
today possible tomorrow0
If you conclude from these thoughts that I am proud
to be serving as Secretary of the Treasury, you are
correcto
I thank President Nixon, through M r s 0 Nixon,
for appointing me to the position; for giving me an
opportunity to work with so many dedicated and skilled
professional people on problems of such vast importance,
and to do so in a great and wonderful building, that
through its grandeur and its simplicity is a tangible
representative of a great department of government0
0O 0
SHINGTON, D C. 20220
TELEPHONE W04-2041
c
FOR RELEASE UPON DELIVERY
12:00 NOON, OCTOBER 19, 1972
EXCERPTS FROM REMARKS
BY THE HONORABLE EDGAR R. FIEDLER
ASSISTANT SECRETARY OF THE TREASURY FOR ECONOMIC POLICY
BEFORE THE WOMEN’S BOND CLUB OF NEW YORK
NEW YORK CITY
THURSDAY, OCTOBER 19, 1972
The American economy continues on the path of vigorous
growth.
Total production increased substantially again in
the third quarter, with every major economic sector except
defense contributing to the expansion.
At the same time, the
pace of inflation is holding in a very moderate range.
Prospects for additional expansion on through 1973 are
unequivocally favorable.
The forward thrust of the leading
business indicators has not diminished.
The advance signs
of business investment show particular strength; for example,
contracts and orders for new plants and equipment are 22 pe r
cent above a year ago.
Particularly encouraging are the
sensitive indicators of labor-market conditions: the hiring
rate, help-wanted advertising, job vacancies, and overtime
hours, all of which are on the upgrade.
These trends point
to a further hefty increase in employment in the months
ahead, and thus to a reduction in unemployment.
Among the few dark clouds on this bright economic
horizon is the threat that Federal spending will get out
of hand.
The Congress has legislated - - on a program-by
program basis, without regard to the total -- a long list
of spending proposals that in the aggregate exceed the
absorbent capacity of a balanced and steadily growing
economy.
There is a small but articulate group in our society
that wants to restructure the American economy in the d i
rection of higher government spending and higher taxes.
That
view, however, is not widely held.
It is wholly contrary to the
position of the Nixon Administration, and I am sure also that
it is contrary to the position of the great majority of the
S - 67
(OVER)
2
American people and of the Congress.
Accordingly, in looking
ahead to the shape of fiscal policy in 1973, control of Federal
spending is imperative, since a tax hike is not even a longshot possibility.
An open Federal spigot would damage the economy in several
important ways.
With activity advancing as rapidly as it is,
excessive fiscal stimulus in 1973 would bring on new demandpull inflationary pressures -- the kind that the stabilization
program is not designed to hold down.
A re-acceleration of
inflation would, in turn, reduce consumer and business confi
dence, undo the improvement that is just now beginning to show
in our balance of trade, and force interest rates higher.
In
short, fiscal discipline is a prerequisite for the attainment
of full prosperity and balanced economic growth without serious
inflation.
Unfortunately, while the Senate and the House both agreed
to a limit on total spending, they were unable to agree on the
exact form of legislation.
As a result, the President will
have to try to do the spending control job himself.
It will
he a more difficult task without the formal ceiling, but Federal
spending must and will be kept in bounds; the alternatives are
too hazardous.
oOo
OFFICE OF R E V E N U E S H A R IN G
WASHINGTON, D.C.20220
FOR RELEASE AT 12:30 P. M . , EDT
TELEPHONE W04-8711
October 20, 1972
STATEMENT BY SECRETARY SHULTZ ON REVENUE SHARING
President Nixon’s signature on the State and Local
Fiscal Assistance Act of 1972 marks a revolutionary
turning point in our Federal-State system of government.
This Act carries with it the Nixon Administration’s
recognition that the Federal government can be and is
responsive to local needs and problems.
It answers
those who say there is a widening gap between government
and the people and that this gap has produced a feeling
that the individual has little voice in government actions.
I d o n ’t believe the mere input of money will solve
all problems at the local level.
But with this money
comes the responsibility for elected officials to see that
it is spent wisely.
It will help solve some problems and
at least lessen others.
In the final analysis, the local
voters will review the wisdom of the expenditures.
This Act will have dramatic financial and social
impact at both the national and local levels.
It moves
the power to act, to decide what is best for our States,
cities, and local governments, into the hands of those
closest to their important and diverse problems.
It is
an Act of faith in the people of this country and in our
system of distributed governmental authority that has
served so well and for so long.
I am sure that faith
will be richly rewarded in the future as in the past.
tDepartmentof
BHINGTON. D C: 20220
^T
TELEPHONE W04-2041
1 O. y
FOR IMMEDIATE RELEASE
October 26,1972
SECRETARY SHULTZ NAMES BATTEN OF J. C. PENNEY
AS 1973 CHAIRMAN OF PAYROLL SAVINGS COMMITTEE
William M. Batten, Chairman of the Board and Chief Exec
utive Officer, J. C. Penney Co., Inc., New York, New York,
has been appointed Chairman of the 1973 U. S. Industrial
Payroll Savings Committee by Secretary of the Treasury George
P. Shultz.
Mr. Batten, who succeeds Donald S. MacNaughton, Chairman
and Chief Executive Officer, The Prudential Insurance Co. of
America, served on the U. S. Industrial Payroll Savings Com
mittee in 1972 as Retail Merchandising Chairman.
He will
assume the Chairmanship at the annual meeting of the Committee
in Washington on January 11, 1973.
In naming Mr. Batten, Secretary Shultz said, "Your ac
ceptance of this assignment assures a continuation of the out
standing leadership which has made the Committee a vital force
in the sound management of the debt and in advancing the sta
bility of our economy and our country in a crucial period."
Members of the Committee are the chief executives of
leading corporations.
They will conduct a nationwide campaign
to enroll 2,400,000 employees in the Payroll Savings Plan -either as new participants or as present savers who increase
their E-Bond allotments.
The Committee was first organized in late 1962 by then
Secretary of the Treasury Douglas Dillon.
Harold S. Geneen,
Chairman and President, International Telephone and Telegraph
Corp., served as first Chairman, in 1963.
He was followed, I g ;4
in 1964, by Frank R. Milliken, President, Kennecott Copper
Corp.; Dr. Elmer W. Engstrom, then President, RCA Corp., 1965;
Lynn A. Townsend, Chairman of the Board, Chrysler Corp., 1966;
Daniel J. Haughton, Chairman of the Board, Lockheed Aircraft
Corp., 1967; William P. Gwinn, then Chairman and Chief Execu
tive Officer, United Aircraft Corp., 1968; James M. Roche,
then Chairman of the Board, General Motors Corp., 1969; Gordon
2
M. Metcalf, Chairman of the Board, Sears, Roebuck and Co.,
1970, and B. R. Dorsey, President, Gulf Oil Corp., 1971. All
continue to serve on the Committee.
The mission of the Committee is to stimulate the regular
purchase of Series E Bonds by employees throughout the nation.
Employers will be urged to sign up at least one of every two
employees not taking part in the Payroll Savings Plan and to
obtain an increase in allotment from at least one of every
two employees who are now enrolled in the Plan.
Mr. Batten was born June 4, 1909, in Reedy, W. Va. He
joined J. C. Penney Co. as an extra salesman in 1926, becoming
a regular salesman in 1928.
After graduating from Ohio State
University with a Bachelor of Science Degree in Economics, in
1932, and graduate work at the University of Chicago, he
joined the company on a full-time basis in 1935, as a sales
man, and then progressed to section manager, and assistant
manager in Lansing, Mich.
Subsequent promotions led to his
election as President and Chief Executive Officer in 1958;
he was named Chairman of the Board in 1964.
During World War Two, Mr. Batten served as a lieutenant
colonel in the U. S. A r m y ’s Office of the Quartermaster
General.
He is Chairman of The Business Council, Washington; a
Director, American Telephone and Telegraph Co., Boeing Co.,
First National City Bank and First National City Corp., and
the American Retail Federation.
He is a member of several
civic, academic, and social organizations, and the recipient
of numerous awards.
Mr. Batten is married to the former Kathryn Pherabe Clark
of Gettysburg, Ohio; they have two children, David Clark and
Jane Louise.
The Battens reside in Mill Neck, Long Island,
New York.
oOo
1
1
U N IT E D
STATES
DEPARTM EN T OF THE TREA SU RY
2
IN T E R V IE W
5
4
5
6
EUGENE T.
R O S S ID E S ,
ENFORCEM ENT,
i
.
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
A S S IS T A N T
SECRETARY
T A R IF F A N D T R A D E A F F A IR S ,
A N D O P E R A T IO N S
7
8
OF
by
E L IO T
JANEW AY
FOR
m
1
MR.
JANEW AY:
2
co m p e te n t r e p o r t e r
5
w h a t w e 'r e
4
and he r e f e r s
5
in v e n t o r ie s
6
r e c e s s io n
and
17
n ic k e l —
it
on
is
on
th e
d u m p in g
th e
happens
to
9
M R. JANEW AY:
10
MR.
11
M R. JANEW AY:
13
th e n g o t i n
15
M R. JANEW AY:
M R . R O S S ID E S :
18
MR.
25
th a t
T h is
R O S S ID E S :
MR.
JANEW AY:
I can se n d yo u
th e
I
up d u r in g
th e
la s t
R u s s ia n s ,
w ho h ave
be w h a t k in d ?
com es o u t o f C u b a.
ve ry
in t e r e s t in g .
in
You
C u b a w h ic h
a ll
of
se e ,
th e
t h e ir
R u s s ia n s
re se rve .
th e n b a rte re d ,
as
is
t h e ir
ou t o f Cuba.
q u e s t io n
MR.
fo rm .
e xce ss
R ig h t .
it .
ta k e s
it
to
Th e R u s s ia n s
is
24
s it u a t io n
In t e r e s t in g .
21
23
of
N ic k e l.
T h a t m ay n o t b e
r e g u r g it a t e d
22
n ic k e l
w h at th e
happens
It 's
t h is w i l l be
of
M y n o t io n
Oh.
20
a fr a id
a ve ry
c o m m e r c ia l r e s e r v e s ,
now i s
JANEW AY:
th e
by
—
17
Now ,
th e
been b u ilt
N ic a r o ,
R O S S ID E S :
fa s h io n
sto ry
on
g o v e rn m e n t fin a n c e d
MR.
19
la r g e
It
good p a rt.
a fte r t h e ir
dough
be N ic a r o
R O S S ID E S :
14
16
to
R O S S ID E S r
n ic k e l t h is
s it u a t io n .
q u e s t io n
MR;
i t 's
n ic k e l
th a t have
8.
12
good
th e
a c c u r a t e ly
o f n ic k e l
a ve ry
is
w h e th e r in
on o u r sy ste m
ge ts
I
in t o
Now ,
se n d yo u
sto ry
th o u gh
th e
g r a il
n ic k e l
com pany
— *
com e w it h o u t p r o b le m s .
t h is
can
and
s t a in le s s
d o n 't
paym ent fo r
is
a r e a l to u gh y
and w ill
it
m ay b e
fla g
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you
it
w ay —
to
get
11
it .
12
th e
I5
in
I'm
su re
stre e t
t h is
t h e y 'v e
at
th e
got
it
over
E c o n o m i c A d v i s o r s '.
m o r n in g 's
R O S S ID E S :
In
6
MR.
J A N E W A Y :'
Y e s.
7
Now ,
5
t h is
we g e t i n v o l v e d
9
tia t io n s
10
b a rte r p r o p o s a ls ,
11
k is s
12
is n 't
w it h
th e m
in
th e
fir s t ,
a cop
so rt
is
an
E a st,
or
MR.
JANEW AY:
16
I
17
y o u r s e lf
paper t h is
t h in k y o u 'd
to
I 18
sto ry
th a t
d a ily
paper of
b e cau se
is
to
t r a d in g
com e
th e m
T h is
is
nego-
a t u s w it h
w h e t h e r w e 'r e
w it h
as
fir s t
or
a th o rn y
g o in g
—
to
t h is
one.
/
w a s n 't
but I
in
m y m in d u n t i l
th in k ,
so m e g o o d
if
to
be b lu n t
you,
y o u k n o w .,
I
about it ,
ad d re sse d
p r o b le m .
in
th e
any o f
I
t h is ?
d o n 't kn o w .
I
d o n 't w a n t t o
m ake
re cord .
2!
MR.
JANEW AY:
22
MR.
R O S S ID E S :
th e
q u e s t io n
Y e s.
And i t
R O S S ID E S :
any com m ent f o r
of
f lir t
m o r n in g ,
T re asu ry
MR.
d e t a ils
q u e s t io n
do y o u r s e lf
th e
Is
19
25
—
in t r ic a t e
g o in g
o f q u e s t io n .
14
saw t h e
t h e y 'r e
ju st
R O S S ID E S :
24
A m e r ic a n
in t e r e s t in g
and th e
MR.
23
th e
m o re n e c e s s a r ily
13
I 20
F ro n t page
ot acro ss
th e ir s .
8
1 15
C a p it o l,
[ In a u d ib le ]
MR.
14
a t th e
W e ll,
B u t I'd
t r a n s a c t io n , to
MR.
JANEW AY:
MR.
R O S S ID E S :
th is
W e ll,
have
fin d
T h e r e 's
is
not
to
fo r
se e
th e
th e
re co rd .
a ctu a l
out —
no t r a n s a c t io n .
th e
d e t a ils
of
th e
p r o b le m .
4
1
MR.
JANEW AY:
2
MR.
R O S S ID E S :
MR.
JANEW AY:
MR.
R O S S ID E S :
3
i
4
5
!6
n ic k e l g o e s
fro m
co n tro l re gs
--
:7
8
9
MR.
b u t th e
you se e ,
and th e
A g r ic u lt u r e
11
n e g o t ia t io n s ,
12
I
13
th e
R u s s ia n s
s a id ,
14
If ,
h o w e ve r,
th e y
15
16
n
18
19
20
21
22
23
24
25
MR.
And i t
th e
it
n ic k e l
t h in k
h it
a rt.
a c t io n ,
our
fo r e ig n
n a m e ly ,
e n t ir e ly
Cuban n ic k e l
t h e n w o u ld b e
if
th e
S ta te
are
r e a s o n a b le
w e 'd
lik e
to
p e rso n
th e
conce
D e p a rtm e n t o f
in v o lv e d
g e t in v o lv e d
if
a sse ts
e x p r e s s in g
in
th e m ,
w o u ld
p a y y o u w it h
in
th e se
to o ?
o b je c t i f
so m e n i c k e l.
—
R O S S ID E S :
Dum ped.
—
gave
you
enough
to
sh u t dow n
W e st V ir g in ia n —
R O S S ID E S :
MR.
JANEW AY:
MR.
R O S S ID E S :
MR.
JANEW AY:
So,
w hy d o n 't we p u t t h a t o n
w a n te d
to be t a lk in g
MR.
Is
th e
of
is
MR.
I
a te rm
com pany
any
w e ll,
of
m ay n o t be
D e p a rtm e n t o f
M R. JANEW AY:
H u n t in g t o n ,
does
w i l l y o u r o p e r a t io n
d o n 't
b e in g
The d e t a ils
q u e s t io n
and th e
a c tio n ,
T r a n s a c t io n
C u ba th e n
is ,
a c t io n .
O f th e
JANEW AY:
q u e s t io n
10
The
to
T h e n r e a s o n a b le
Dum ped,
T h a t 's
m e n t io n
about is
R O S S ID E S :
t h is
Y e s.
t h in g
not as
p e o p le
w o u ld b e u p s e t .
a te rm
of
r ig h t .
th e
in v e n t o r y ?
t h a t my n o t io n
d u m p in g i n
o f w h at we o u g h t
dough.
F in e .
g o in g
e t h ic s .
y e t,
M au ry,
o r w h a t?
5
1
VOICE:
2
MR. J A NEWAY:
5
MR. ROSSIDES:
4
MR. JANEWAY:
I5
f
Yes.
It's recording.
Oh.
Plus anything else on your mind.
MR. ROSSIDES: That's fine*
6
MR. JANEWAY:
7
There's a statutory definition,
8.
definition.
What's your definition of dumping?
and I guess there's a policy
9
MR. ROSSIDES:
10
The statutory definition really deals with the questi
They both coincide pretty well.
11
of the price in the country of export and our comparison Ls as
12
between the price, the home market price in the country of
13
export —
14
import purchase price in the United States, and very simply,
15
if the price in the foreign country is $1.00 and it's 80 cents
16
here and all other aspects of the statute are complied with,
17
there are sales —
18
call it the home market price —
as compared to the
there's a dumping margin of 20 cents.
Now, we allow —
we don't have that much discretion i:
19
this statute.
20
in allowing what we call adjustments for circumstances of
21
sale in that home market price as being different from the
22
circumstances of sale here.
23
24
25
We have some, and the discretion comes in
So, you can have $1.00 price for whatever —
use the word widgets as a —
I'll
and 80 cents in the United States,
1
11
•
but then in looking at circumstances of sale, some expenses
that we feel are related to the product, that dollar can be red .iced
12
I5
by these extra costs that the product bears overseas in the
14
home market as compared to the fact that it does not bear
15
those same expenses here in the United States.
MR. JANEWAY:
16
17
fund and that kind of thing.
MR, ROSSIDES:
18
9
Likb payments into a Social Security
Without --- yes, without even commentin' t
as to whether that one is because it may be that we have held
I io
that that is not at the moment, and I'm reviewing that whole
1 11
area.
I 12
But, say there's 10 cents that is allowed for an
I 13
adjustment, then you're down to 90 versus 80 and you have
1 14
a dumping margin of 10 cents.
| 15
margins .
1 16
MR. JANEWAY:
I 17
MR. ROSSIDES:
I 18
MR. JANEWAY:
I 19
MR. ROSSIDES:
I 20
t
Nov;, if its 20 there are no
Does the statute put a number on it?
No, the statute r** .
This is your policy guideline.
No, no.
I say if the difference was
20 cents —
21
MR. JANEWAY:
22
MR. ROSSIDES:
•
Right.
—
from that dollar to 80, then there
23
would be no margins.
24
there's no percentages, no figure —
25
that we are allowed to make adjustments for circumstances of
If it came down to whatever ours was —
it gives you the language
7
6
1
s a le .
2
In
th e
c u r re n t r e g u la t io n s
5
w e fre p r o p o s in g
4
s t a n d in g
5
d o n 't - f o r g e t
6
m ay t r y
to
7
o f s a le
b eyon d w h at we fe e l i s
8
th o se
9
it
10
p e rc e n ta ge .
as
t ig h t e n
t h in k in g
re d u ce s
in
to
th e
MR.
fa c t h e re ,
up so
th e
t h a t u n r e a s o n a b le
d e fin it io n
red u ce
a lle g e d
th e
JANEW AY:
R O S S ID E S :
14
MR.
JANEW AY :
15
MR.
R O S S ID E S :
w hat we d id
18
g iv e
19
h is t o r y
20
B u re a u o f C u sto m s w o r k in g
21
tw o s u p e r v i s o r s
22
s u p e r v is o r h a d o th e r d u t ie s
23
a lo t o f o th e r d u t ie s .
24
In
p r o b le m s ,
th e y
try
to
in c lu d e
t h a t hom e m a rk e t s o
B u t t h e r e 's
fie ld
have
no
se t
fin d in g s
of
cam e, E lio t ,
th a t
I
ve ry
on th e se
my ow n o f f ic e
an d he w as o n ly
In
sta tu te
q u ic k ly ,
w e re
p r o b le m s
th e re
o v e r a ll
w as one
t im e
a
lo t
I 'l l
of
t im e ,
th e
th e
p lu s
im m e d ia t e
s u p e r v is o r h ad
sta ff
b e cau se
and
m en in
fu ll
th e
is
and th e n
th re e
o th e r w o rd s,
and h is
p art
t h is
T h is
m a d e s u m m in g u p
— * w hen we cam e t h e r e
t im e .
m en?
f ie Id ' m en.
r e ju v e n a t io n -o f
a re c e n t sp e e ch
p art
—
a c ir c u m s t a n c e
and
do you
And we h ave
17
25
—
Do you have
th e new r e v iv i n g ,
it
in
a llo w e d
o th e r w o rd s,
r e a s o n a b le
p r ic e
are
Y e s.
16
fo f
ite m s
n o m is u n d e r
sta ff?
MR.
w h e n :w e
In
p r o p o s in g ,
have
o f w hat is
How d o y o u
do you have
th e
.
d u m p in g m a r g in .
13
you
t h a t p e o p le
th e w o rd u n r e a s o n a b le
stre tch
it e m s
11
12
to
to
t h a t w e 'r e
m an on
he had
a
th e se
lo t
8
■1
of other m a tters.
■2
MR. JANEWAY:
■5
MR. ROSSIDES:
What have you got now?
Now we have —
,v
f\
\
we've added six,
and tli
■4
one person part time is full time, so we have a total of seven.
■5
One person is a deputy to me, deputy to —
I6
peson we call him deputy to because he's a career status,
|7
four operations men —
MR. JANEWAY:
18
I9
I10
111
1 12
MR. ROSSIDES:
if he's a career
Out in the field.
No, no, four here on my staff, and twcj>
economists to be working on studins relating to these statutes
and relating to trade and tariff matters affecting Customs, not);
the oasier type economists looking at the broader matters.
I15
-MR. JANEWAY:
MR. ROSSIDES:
1 14
Right.
In Customs we increased from those
five to 40 by directive here and by supplemental appropriation
1 15
16
17
18
which the White House approved and the Congress approved —
was only half a million dollars but it meant a great deal in
giving us the resources to move up to 40.
I have since directed plans to move it up to 60.
19
20
21
In
addition, and most important, we also received authority to
send more people overseas.
MR. JANEWAY:
22
23
it
That's the other question I was going
to ask.
24
MR. ROSSIDES:
Right.
25
Before, we had some Customs representatives, a
T
^
fe w o v e r s e a s ,
1
1
m e n t,
'w h o
s m u g g lin g ,
.
had
o th e r d u t ie s ,
o th e r
a sp e cts,
in c lu d in g
Wc r iÿi n i hfa l e-n f o r c e -
a n d n o w w e 'v e
go tte n
th e
—
•
■5
y o u 'r e
f a m ilia r w it h
I4
p e o p le
o ve rse as,
I5
w a n ts t o
keep
■6
O p re d i s
o p e r a t io n
■7
a im e d a t d o l l a r
lÔ
it
h it s ,
of
9
■ 10
Il
11
as
ta k e
th e
b ee n a b le
o ve rco m e
1 13
p ast ye ar.
to
th a t
MR.
JANEW AY:
115
MR.
R O S S ID E S :
d o in g m o re T D Y 's ,
M R. JANEW AY:
I 18
MR.
I
21
We m ay ,
so m e p e o p l e
in
MR.
R O S S ID E S :
you se e ,
w o n 't s a y
if
s e r io u s
and se n d
D e p a rtm e n t •
o ve rse as^ , .fo r
o r ig in a l
m a tte r,
cut
s o w e 'v e
te n m en o v e r s e a s
over
t h is
S !1
is
m o st im p o r t a n t .
p lu s
It
t h a t v i e 'r e
b u ild s
up
—
T e m p o rary
a s s ig n m e n t ,
so rry,
te m p o ra ry
to
th é
p e rm a n e n t,
s h ip
over
—
23
25
p e o p le
w h ic h w a s t h e
ve ry
a d d it io n
JANEW AY:
I
b u t p r in c ip a lly
case .
MR.
W e ll,
p r im a r ily
TDY?
22
24
o ve rse as,
P e rm a n e n t a s s ig n m e n t ,
R O S S ID E S :
d u ty on a s p e c if ic
and th a t
D e p a rtm e n t and D e fe n se
a fe w
g e t t in g
The P r e s id e n t
p o s s ib le ,
fo r
is
P e rm a n e n t a s s ig n m e n t .
and t h is
117
fo rc e
have
w as a v e ry ,
I 14
1 20
Sta te
a te n p e rc e n t c u t,
1 12
as
and v is ib ilit y ,
w hen we o n ly
in ,
1 19
in
O p red
p r o b le m .
o ve rse as
r e d u c t io n
p r o b le m s
o f O p re d .
in t r ic a t e
fe w p e o p le
w hen w e cam e
I 16
p r o b le m s
a ve ry
co u rse ,
B u t,
us to
is
th e
th e y
a co u n try
W ill th e
Oh y e s,
have
does
to ,
Jap an ese
le t
th e y h ave ,
b u t th e y
n o t co o p e ra te ,
y o u r p e o p le
th e y
have.
in ? '
h a v e .to .
T h e y 'v e
you have
not
a ve ry
—
IO
1
important authority from the Congress,
2
evidence available.
5
1
MR. JANEWAY:
You use the best
è
And they can't defend themselves.
4
MR. ROSSIDES:
5.
MR. JANEWAY :
6
MR. ROSSIDES:
7
You see, if they don't —
Well —
On that basis the Complainant
Right, wins.
Yes.
we don't —
I'm just
8
saying that's always in the background, but what is happening
9
is, and very important, and that's why in my judgment, Treasury
10
authority in this area stems from the Secretary's responsibilit
11
to supervise and administer the Customs laws of the United
12
States, because that's where the manpower is, on the operationa
13
level, the fact-finding level.
14
It's silly to talk about creating another agency.
15
MR. JANEWAY:
16
Constitution.
17
MR. ROSSIDES:
18
MR. JANEWAY:
19
MR. ROSSIDES:
21
MR. JANEWAY:
23
Correct.
This precedes —
what you say that,
as you're talking to a newspaper audience —
20
22
And this goes right back to the
This —
right.
This precedes the statutory implementa
tion.
MR. ROSSIDES:
When we say go back to the Constitution
in the sense of the raising of the revenue.
MR. JANEWAY:
Yes.
11
1
• ■
I
>■
MR. ROSSIDES:
11
MR. JANEWAY:
12
I 5
-
1
x
Q
J
■
/
Regulate the commerce of the United
States .
MR. ROSSIDES:
1 4
1 5
This goes right back —
This goes right back to the Constitu
tion, and the first Secretary of the Treasury, Alexander
6
Hamilton, in organizing our financial institutions,
7
is one reason why Burk Hartke --¿is one aspect of Burk
8
Hartke —
9
talked about setting up something separate,
10
agency to handle all of these matters and a lot of other *—
11
he just —
I don't know if we need to get into it that way —
MR. JANEWAY:
1 I 12
and this
an independent
So, what you're doing really is you're
13
spiking the guns of Burk H a r t k e .
14
MR. ROSSIDES:
Yes, but even before Burk Hartke
15
came up we wanted to take that point, the initiative on
16
this was in February of ' 6 9 when Secretary Kennedy called me
17
in and said we must clean up the backlog on these c ustoms ,
18
on these dumping cases..
| 19
This is dumping.
And then shortly
thereafter I made the comment, not in this particular speech,
20
that the Senate Finance Committee in their confirmation hearing 3,
21
they only ask questions on this area, dumping and countervailin
22
despite all of the other responsibilities on law enforcement.
1 . ^3
MR. JANEWAY :
24
25
MR. ROSSIDES:
Service —
That's what they ask you.
Yes. On law enforcement, the Secret
J t
12
1
MR. JANEWAY:
2
MR. ROSSIDES:
3
MR. JANEWAY:
4
MR. ROSSIDES:
Dumping is a very, very serious issue -Right.
Around the country.
So we —
I want to take pride in the
5
fact that: this Administration and this Department moved right
6
away
on dumping, and has revived —
7
8
MR. JANEWAY:
I know you have, but has it been
effective?
9
MR. ROSSIDES:
10
MR. JANEWAY:
And Davis —
so —
Davis had a couple of cases which
11
he tried to push, but he was in a lot of trouble pushing
12
them.
13
MR. ROSSIDES:
14
MR. JANEW7\Y:
15
MR. ROSSIDES:
16
MR. JANEWAY:
Who was that?
Davis.
That, I d o n ’t know.
i'll tell him. '. .
; Davis
17
you had steel used for transmission towers, and he got
18
into all kinds of —
19
MR. ROSSIDES:
20
21
22
23
'24
25
ask him about it —
MR. JANEWAY:
with the Administration,
for that.
Yes.
He got into all kinds of trouble
the —
this
Administration fightih
The Italians, I t h i n k , were dumping a lot of
steel —
MR. ROSSIDES:
MR. JANEWAY:
Yes.
Now that was —
I think that case is still going on.
13
12
I
I1
1
2
MR. ROSSIDES?
That's in the countervailing duty,
and there we have had several cases in addition.
I*
is that —
I4
in the transmission tower case before this Administration, on
5
and we've still —
What happened
part of that case only.
we made a finding on subsidy
The other part is still open.
6
MR. JANEWAY; That's my recollection.
7
MR. ROSSIDES:
8
open as to what some •—
MR. JANEWAY;
9
10
Well, the Italians are your problem,
right?
11
I 12
Right, very important parts are still
~
MR. ROSSIDES:
Right,
Now —
but with the
transmission tower we determined that certain ex p e n s e s ,
13
certain rebates of indirect taxes were not related directly
14
to the product, and therefore were subsidy.
Now, if the tax, the indirect tax was directly
.15
16
related to the product, the countervailing,; international
17
countervailing duty code says that that's not a subsidy, but
.18
this was so way out -—
19
stamp tax, rebate of certain indirect things that were so
20
far out that we said was a subsidy when they rebated it.
'21
MR. JANEWAY;
postage stamp —
rebate of a postage
It went to general overhead.
22
MR. ROSSIDES:
23
Now, the Commonmarket even held it bad,
24
law —
25
group —
Right.
the Italian 639 law. So the —
the 639
I forget the technical
the Court of whatever it was, the Treaty of Rome,
14
i f ,
1
W
11
th e y h e ld
t h is
s e c t io n
12
So,
■5
sa m e o r i g i n a l
I
t o - It a lia n
go o d s,
15
to d a y
cam e in ,
16
1i
ve ry
th a t
1 10
1 11
d e v e lo p
and
th e
' .
-
f o llo w in g
a p p lie d
up
th a t
c o u n t e r v a ilin g
a c u rre n t one
in
th e
d u t ie s
o ffic e
a c o m p la in t w h ic h w e w i l l b e m o v in g
I 14
p lu s
I 15
th e n a p p ly
ones
a n o th e r one
th a t
in ju r y
is
th is
18
fin is h
it
of
th e
it
of
th o u g h ,
th a t
—
th e
in
U .S .
but
out
a p p ly in g
S te e l case
any o f
th e se
se e m s t o m e, E l i o t , " i s
th e
are
day
to
r e a lly
d a y o p e r a t in g
c a p a b le
t h e y 'r e
—
th e
—
th e
of
have
as you
o p e r a t in g
b e cau se
o f h a n d lin g
w hen a d e c is io n
d e t e r m in e d ,
th e
th e
--
fa c t-
d u m p in g m a r g in s
o n ly
ones
th a t
can
d u t ie s .
T h is
—
a sp e cts
The key
a r id t h e r e a f t e r ,
16
in
o th e r
a r t ic le ,
r e s p o n s ib ilit ie s ,
fin d in g
1 21
a n d t h e r e 's
n o t b e e n d e c id e d .
I 13
20
w h ic h w e h a v e
V
(
se v e ra l case s
T h e re w i ll be
Now ,
th e o n ly
I 19
had
to o .
t h a t sam e p r i n c i p l e .
I 12
17
case
s h o r t ly .
18
19
w e 'v e
bad,
goes back
book
—
is
to
it
w h ic h
—
JANEW AY: .I
ju s t have
a ll
th e
ho,
MR.
R O S S ID E S :
—
M R. JANEW AY:
22
MR.
R O S S ID E S :
23
MR.
JANEW AY:
24
[ Ih a u d ib le . ]
25
T h is
one
is
in t e r e s t e d
th e re ?
MR.
t im e
you *d be v e ry
t h is
it
r ig h t
h e re
one, Jacob
—
D i n e r 's
I
book.
D in e r .
Y e s , t h is - o n e , I
Y e s,
oh y e s,
assu m e
gre a t guy.
Y e s.
a r e p r in t, o f b a s ic
books
so
y o u m ig h t
j !_ _ _ _
Sfl
n1
hi
2
w ant to
days
p ic k
and
I
up
a copy
ke e p g o in g
s o m e t im e ,
back
5
MR.
R O S S ID E S :
4
MR.
JANEW AY:
5
C u sto m s h a v e
w it h
th e
MR.
9
th e
10
I ’l l
11
our w o rk.
12
C o m m is s io n ,
13
t h e r e 's
14
as to
15
d is c u s s io n
16
in ju r y .
17
th a t t h e ir
18
w ay we a p p ly
in ju r y
get
w it h
th e
If
th e
T a r iff
W e ll,
th e
w e d e t e r m in e
te c h n ic a l p a r t
it
and th e y have
—
i t 's
in
su ch
th e
15
e a r ly
a gem .
out th a t
r e a lly
th e
now , u n d e r o u r in t r ic a t e
in
t h is
gre at
to
th re e
case ,
d e b a te
an d d is p u t e
—
d e fin it io n
of
T a r iff
in
C o m m is s io n
th e re
are
a m in u t e —
C h a ir m a n
m o n th s
to
a n d t h e r e 's
t h e r e 's
th a t goes
se tu p
C o m m is s io n ?
th a t
th e
Som e o f o u r c o lle a g u e s
of
h a n d le s
d u m p in g m a r g in
w e c o m p le t e
th e
T a r iff
d e t e r m in e w h e th e r
a g r e a t d e b a te
on
a s u b s t a n t ia l
on r e g a r d in g
aro u n d
th e
in ju r y
is
n o t th e
a p p lie d
it
in
w hat is
w o r ld
fe e l
sam e a s
th e
it .
W e f e e l w e 'v e
a c c o rd a n c e w it h
th e
I n t e r n a t i o n a l D u m p in g C o d e .
21
22
fit ,
Then we se n d
th e
19
20
te st.
in ju r y
b e cau se
And he p o in t s
R O S S ID E S :
in t o
re ad
Y e s.
t h is
F e d e r a l—
8
it
I
do t h is .
How d o e s
6
7
to
to
W
b u t t h is
Y o u 'r e
agre e m e n t —
23
MR.
'24
r e lie f
25
C o m m is s io n .
to
f a m ilia r w it h
th e
D u m p in g C o d e ,
in t e r n a t io n a l
a n d o u r A n t id u m p in g A c t .
JANEW AY:
a c o m p la in a n t .
So,
you
d o n 't h a v e
You have
to
se n d
th e
it
pow er to
to
th e
g iv e
T a r iff
16
v
■
■
.1
MR.
I
we d o n 't h a v e p o w e r t o
5
o u r ow n —
d o n 't h a v e
T h e re ’s
m ake th e
fin a l,
You have
7
th e
8
pow er h a v in g
R O S S ID E S :
W e ll,
th e
fu ll
of
th e
—
one w it h in
an e n fo rc e m e n t p o w e r;
th e
r e m e d ia l p o w e r c a n n o t b e g in
done
it s
9
M R. JANEW AY:
10
MR.
11
c o m p la in t s ,
12
in .
-
m
tw o p a r t s
you
a r e m e d ia l p o w e r.
MR.
6
—
ye s,
we do b e cau se
w it h o u t o u r e n fo rc e m e n t
p a rt.
You
R O S S ID E S :
can
Y e s.
b u t w e d o n 't ;
in it ia t e
The —
we w a it
it .
w e ll,
fo r
th e
we can
in it ia t e
c o m p la in t t o
com e
~0n<:
13
MR.
14
If
15
th a t y o n w e re
16
I'd
sta rt
—
JANEW AY:
I
w e re
R ig h t .
a fo r e ig n e r
about to
to
th e
se n d
—
I
17
MR.
18
M R. JANEW AY:
19
MR.
R O S S ID E S :
20
MR.
JANEW AY:
21
MR.
R O S S ID E S :
22
Num ber one,
23
as w e ll in
24
r ig h t
25
R ig h t .
M R. JANEW AY:
4'
5
R O S S ID E S :
th is
se n se ,
a case
keep
R O S S ID E S :
d o in g
s a y in g
T a r iff
—
I'd
W e ll,
It
to
t h is
th e
and
I
w as
aw are
F e d e ra l T rad e
C o m m is s
it .
C o m m is s io n .
b e g in
ye s,
to
n e g o t ia t e .
but —
d o e s n 't h a p p e n .
It
does
we do h ave
and i t 's
and i t
th e
d o e s n 't .
r e m e d ia l a u t h o r it y
o u r n e g o t ia t io n .
They
change
aw ay o r e ls e .
We h a v e
a case ,
com es in
and one o f
th e
p r o b le m s
.6
17
1
in
2
one and
5
w e 'v e
now re d u c e d
4
th e se
p ro p o se d
th e
p assage
o f tw o y e a r s ,
a h a lf,
5
MR.
to o
th a t
JANEW AY:
t h a t 's
one
7
got to
be ve ry
8.
an a p p e lla n t b e f o r e
th e
MR.
10
go in t o
11
is
to
is
r ic h
ye ars,
a n d b e lo w ,
and
a h a lf,
b a c k lo g ,
but
a n d m y a im
now
in
n in e m o n th s.
T h a t 's
one
on
of your
th e
and n o t r e a lly
th e
T a r iff
R O S S ID E S :
W e ll,
w it h o u t
tw o
a t e r r ib le
a year
sh ru g -o ffs
so m e t h i n g s
c o m p la in t s w it h
T a r iff
C o m m is s io n .
be h u rt in
C o m m is s io n .
t h is
—
is
p art of
Y o u 'v e
ord e r
to
be
goes
on
fo re v e r
It
w hy —
w e ll,
it
th e
o ff
—
le t
me
re co rd ,
b ackgro u n d .
12
13
of
We h a d
r e g u la t io n s
6
9
lo n g .
th re e
One t h in g ,
sp e e ch
t h is
MR.
JANEW AY:
15
MR.
R O S S ID E S :
to
17
and to
say
b e cau se
th e
18
th a t
th e
re co rd
and
i t 's
in
th e
19
w e 'r e
20
a ll,
21
Is
22
p ro ce d u re s,
g o in g
to
th ro u gh
th a t th e re
25
r e q u ir e d
t e l l me w h at y o u
and i t 's
—
b e cau se
a case .
Now ,
I
ve ry
i t 's
n ic e
d o n 't w ant
o f you
e d u c a tio n a l
d e t e r m in e
w it h in
w h e th e r we a c c e p t a c a se ,
C u sto m s r e g u la t io n s
c o m p la in t ,
w h e re we m ake
th a t
so rt
of
o n e m o n th
fir s t
th e
t h in g ,
of
d e c is io n .
t e c h n ic a l
how we in v e s t ig a t e .
F ir s t ,
24
ju st
R ig h t ,
c a n h e lp
d e c id e
an a d e q u a te
23
Y o u 'll
p o in t .
We g e t
it
fo r
— '
14
16
is
are
w hen we h ave
a r e a s o n a b le
d u m p in g m a r g i n s , a t
to w it h h o ld
a p p r a is e m e n t .
th e
cau se
fir s t
to
b lu s h
b e lie v e
we a re
t h a t 's
MR.
JANEW AY:
MR.
R O S S ID E S :
th e
c u to ff
th a t we do n o t
th e g o o d s
d u ty
is
t .. *
e n try .
b u t we w i ll
jo b .
T h a t s im p ly
W it h h o ld in g
th e
th e
not
m eans we —
a p p r a is e m e n t m e a n s
T h a t s im p ly m e an s
le t
t h a t d u ty m ay b e th e
th e m
t h is ,
know w h at th e
n o rm al d u ty
p lu s
th e
d u ty .
MR.
JANEW AY:
N e v e r t h e le s s ,
MR.
R O S S ID E S :
MR.
JANEW AY:
MR.
R O S S ID E S :
you
le t
th e
com e, r i g h t
in .
—
you
—
-
e x t r a d u t y w h ic h
th e y
can
go
in t o
B u t t h e y 'r e
th é
MR.
R O S S ID E S :
i t 's
Is
econom y —
w hen th e y
th a t d is c r e t io n a r y
O n c e w e d e t e r m in e
n o t d is c r e t io n a r y .
are
v '. y estai
n o t su b je c t to
h ad n o t a n t ic ip a t e d
JANEW AY:
th a t th e re
The goods
They
MR.
d u m p in g m a r g i n s ,
b e lie f
d ate .
com e in
b e cau se
th e
R ig h t .
liq u id a t e
d u m p in g m a r g i n
le t
A p p r a is e m e n t a t
d u m p in g m a r g i n s ,
th a t
s o ld .
on yo u r p a rt?
th a t
th e re
are
O nce we h ave
we are
r e q u ir e d
th e
to
do t h a t .
MR.
JANEW AY:
MR.
R O S S ID E S :
Then,
t e n t a t iv e
t h a t 's
d e t e r m in a t io n
And —
Now ,
th a t
a p p r a is e m e n t ,
b e lie f
th e y
is
ve ry
are
im p o r ta n t,
b e cau se
th e re
b e cau se
d u m p in g ,
a m o u n t—
l e t me f i n i s h .
o u r t e n t a t iv e
we w it h h o ld
th a t
b u t th e
d e c is io n .
are
if
d u m p in g m a r g in s
you have
th e n you
We m ake
a ct,
t h a t w it h h o ld in g
and
a t e n t a t iv e
and
of
a
th a t
act
a p p r a is e m e n t
19
ji 17
■ m
.
-
I1
means that they are not subject to not only the pormal duties
12
that they anticipated, but now the importer, not the exporter - MR. JANEWAY:
1f
The American taxpayer under your
jurisdiction.
14
MR. ROSSIDES:
15
Right.
He, the businessman,
the
importers, now is going to have to pay, possibly, additional
16
I
17
duties.
18
MR. JANEWAY:
19
MR. ROSSIDES:
I 10
1 11
He's got to pay these.
He's got to pay these.
So, what
happens then, immediately?
If you're a businessman importing and you expected .r:
1 12
to pay 5 percent duty, and now gee, there may be margins
I 15
and I'm going to have to pay more duty, and I've calculated
1 14
a certain amount of profit, you're sure in hell going to
I 15
act, and someone is going to act.
1 16
Now, that exporter is either going to raise his
I 17
price in the U.S. market or lower his price at home to
I 18
eliminate the dumping margin.
I 19
20
MR. JANEWAY:
MR. ROSSIDES:
Right.
So that's why I say it is remedial
21
in that sense.
You don't have to wait because the amount
22
of dumping duties actually collected is small because the
23
businessmen are prudent persons, and as soon as they realize
24
that they have a chance of having additional liability as of
25.
a particular date —
1
-11
201
19
1
M R . JANEW AY:
2
MR.
II
C o rre ct?
u
Now ,
5
p re v e n ts
6
im p o r t e r t o
R ig h t .
R O S S ID E S :
th e
c o llu s io n
—
b e cau se
JANEW AY:
8
MR.
R O S S ID E S :
d id , we p u t o n
MR.
11
y o u 'r e
s a y in g
12
a c t io n
th a t
13
th e T a r i f f
JANEW AY:
is
JANEW AY:
16
MR.
R O S S ID E S :
17
MR.
JANEW AY:
18
MR.
R O S S ID E S i
21
in
22
sp o t —
23
24
25
th o se
a ct.
th e
im p o r t e r p a y s
c o u ld
s u b s id iz e
th e
JANEW AY:
MR.
R O S S ID E S :
once we f in d
th a t
in
th e
a g a in
th a t
d e fe n se
e x p o rte r
—
case
and
of
b e fo re
s u p p le m e n t a l.
T h a t 's
A fte r
r ig h t .
r ig h t .
th e
T h a t 's
Is
fa c t.
r ig h t ,
t h e r e 's
t h e r e 's
MR.
t h a t 's
th e n ,
of
If
Q u a s i- ju d ic ia l.
re ce n t ye ars
c a s e s w h e re
th a t.
b e cau se
a lin e
T h a t 's
c a s e s w h e re
in
a llo w
an d t h a t m ak e s p r o c e e d in g s
a lm o s t
MR.
case s
got
s u ffic ie n t
C o m m is s io n
th o se
We d o n 't
t h a t y o u 'v e
15
o f th e
to
t h a t —
W e ll> r e a lly ,
R O S S ID E S :
20
th a t
e x p o rte r
a d d it io n a l d u t ie s
MR.
th a t in
fa c t
th e
Now ,
U
19
g o in g
pay.
MR.
10
t h e y 'r e
and th e
7
9
—
b e cau se
no in ju r y
t h e y 'v e
fo u n d
no in ju r y ,
—
even e xce p t
and
in ju r y
in
—
m ost
but
th a t
r e a lly
is
th e
th e
r e lie f
is
gra n te d
—
B u t,
in
e ffe c t,
21
1 11
1
i
MR.
'
l l
1 2
ste m
fro m
JANEW AY:
a n y new
sta tu to ry
1 2
MR.
R O S S ID E S :
1 4
MR.
JANEW AY:
MR.
R O S S ID E S :
1 5
Now ,
1 6
th e
f i i i
M /
ju s t d e s c r ib e d / d o e ^ th a t
W h a t y o u 'v e
a u t h o r it y ?
No.
T h a t 's
a lw a y s b e e n
th e re .
R ig h t .
se co n d p o in t
is
th a t once we h ave
th a t
•
1 7
1 8
9
t e n t a t iv e
t a t iv e
w ith h o ld in g ,
w it h h o ld in g
o th e r w o rd s,
m ake- o u r
C u sto m s d o e s
I 10
a r e c o m m e n d a t io n ,
1 11
t io n .
| 12
t e n t a t iv e .
We m ake
I 13
to
th e n we h av e
fa c t u a l a n a ly s is ,
d e c is io n , h e re
th re e
m o n th s, we g iv e
com e i n
and be h e ard
b o th
o p p o r t u n it y
I 15
c o n fr o n t a t io n
c o n fe re n c e ,
a ll
I 16
ap pe ar b e fo re
my s t a f f
p re se n t th e ir
no m a r g in s ,
18
19
i 20
a fa c tu a l
As
we a llo w
I
say,
to
th e
d is c r e t io n
w it h
w e ll know n.
w it h in
th r e e m o n th s o f o u r
22
m o n th s
t h e r e a ft e r we m ake
23
o f t im e s w e o v e r t u r n .
'24
th e p a r t ie s
25
th a t had been
ta k e n ,
at
se n d s
on
th e
in .
|
over
th e
p a r t ie s
th e
w h at we c a ll
sam e
case
cam e in
c ir c u m s t a n c e s
And
21
cam e in
done
in
So,
te n H
1
a
t im e ,
and
o f m a r g in s
or
in q u ir y .
w h a t we a llo w
ge ts p re tty
and th a t
t h a t re com m e n d a
a s we s h o u ld ,
I 14
17
to
m o n th s,
f i n a l d e t e r m in a t io n -
and we a c c e p t o r r e je c t
th e
Then,
th e
th re e
th e n we m ake
fir s t
of
to
of
an d e x p la in e d
b u t g e n e r a lly
yes
w h e th e r
s a le ,
—
t im e s w e c h a n g e
th e y
sta y
and th a t
and th e n
o r now ,
aw ay c e r t a in
o r noi -
d e t e r m in a t io i >
1
a fin a l
d e t e r m in a t io n
a fin a l one,
A c o u p le
as
and
t h r c ie .
a c o u p le
b e cau se
f a c t u a l p o s i t i o s 'IS
th e
sam e .
in 21
11
22
.
r 0
Now, then from that three months, the'Tariff
12
Commission pretty much
I
initial determination, the maximum time is six months.
14
It's a very technical point, but you have to ask for.
15
can get either six months withholding or three months.
16
[Inaudible],
But once we make our
If the importer, businessman or so on —
You
the importer
7
because they're both businessmen on both sides, Complainants —
8
if he does not ask for six months withholding, then the
9
initial temporary, tentative determination is the final one,
10
and we ship it right to the Tariff Commission.
11
MR. JANEWAY:
12
MR. ROSSIDES:
Right.
Because the Tariff Commission only
13
has three months, but if they ask' for a six months, then
14
we do our three months to check for the final,
15
their three months.
16
■17
MR. JANEWAY:
MR. ROSSIDES:
19
MR. JANEWAY:
21
22
23
1 24
25
—
You're really saying in football
terms that you can stop that ball carrier at the line.
18
20
and they do
MR. ROSSIDES:
Right.
That's the only thing —
You've got it beautifully, in the
other way that you pointed out, that the Tariff Commission
is supplementary, right.
MR. JANEWAY:
Now, take —
qoming, taking it back
to Japan, my Japanese friends like to say that sure, admittedly
our labor costs in cash terms are very low, but what about the
12
1
r
/ X ' h
[ IP /
overhead due to our protection against unemployment anq so
forth.
Now, when your people go over there —
1
I'm just
4
taking Japan as one case.
In Britain, as you know, you
5
adjust anybody's pay because no one has any medical costs.
6
Right?
7
MR. ROSSIDES:
8
MR. JANEWAY:.
9
MR. ROSSIDES:
10
MR. JANEWAY:
11
Are you able to take
112
13
I hadn't thought of it —
So it becomes a very substantial —
Certainly.
You see?
are you able and are you
willing and do you have ways of making adjustments of that
kind to allow for local institutions?
[14
MR. ROSSIDES:
15
authority.
16
articles comes out —
MR. JANEWAY:
1 18
MR. ROSSIDES:
19
We have the method and ways and
To what degree, I will supply when your
I 17
I 20
Yes.
- ...
- -
Did you see what I —
Right, right.
The general policy that we've set down, that I've
set down and pushed is to be as strict as possible regarding
2i
the circumstances of sale, you know.
22
.<
'/
and within the concept of reason, as fairly —
23
be fair —
24
25
*
'
MR. JANEWAY:
We want to be reasonable
we want to
The President said something in the
paper this morning about diversity of customs between countries i•
J____ k]
24
23
1
If
th e y w an t to
2
gu e ss
th e re
th e
e x p o rte r
6
be an o ve rh e ad
R O S S ID E S :
MR.
[8
s o w h a t w e 'r e
d o in g
is
th a t g e n e ra l p h ra se
--
11
MR.
13
t r y in g
to
keep
16
c r e d it
17
to
in
sco re ,
th a t
as
to
if
I
w ant to
u se
on,
of
say,
a
lo o s e
c ir c u m s t a n c e s
a d m in is t r a t io n
of
s a le *
W e 'r e
to
d e fin it io n .
In
o t h e r w o r d s , y o u 'r e
t r y in g
be
fa ir
g iv e
to
th e m
can d e m o n stra te
so
you
t h e y 'r e
th e m
e n t it le d
a d ju stm e n t —
R O S S ID E S :
19
MR.
JANEW AY:
21
MR.
R O S S ID E S :
22
MR.
JANEW AY:
us
up —
a t ig h t e n e d
you w ant to
MR.
C o rre c t.
I
t h in k
C o rre ct.
i t 's
im p o r t a n t .t o
say
th e y
—
23
w ant to ,
'24
c o m p la in t s .
25
—
JANEW AY:
18
g iv e
b o th
R ig h t .
fo r w h a te v e r th e y
th a t
fa ir
a n d t h e A m e r ic a n m a n u f a c t u r e r ,
in t e r p r e t a t io n
MR.
15'
—
R O S S ID E S :
have
14
t h a t w e 'r e
R ig h t .
t ig h t e n in g
M R ..J A N E W A Y :
and a b ro a d
m ake su r e
R O S S ID E S :
10
20
Y e s.
M R. JANEW AY:
12
fa c to r..
—
I7
9
e v e r y b o d y 's m e d ic a l e x p e n
B u t we w ant to
4
5
ou gh t to
MR.
I^
assu m e
if
you
MR.
I
can,
gu e ss
of
Y e s.
G iv e
th e
sh o e s
R O S S ID E S :
us
an
it e m iz a t io n ,
it e m s w h e re y o u 'r e
if
g e t t in g
—
Oh,
th e
go o d s?
T h a t 's
e asy.
you
25
t
1
MR.
2
MR. ROSSIDES:
5
JANEW AY:
Y e s.
Shoes, stainless steel - - t h e Times
i
last monthly report on unitory Government cases —
'4 ’
MR. JANEWAY:
5
MR, ROSSIDES:
Microwave.
Oh, we have a host.
6
don't think we have a current shoe case.
7
industrial products, bicycle tires —
.8
MR. JANEWAY:
10
MR. ROSSIDES:
12
I
A lot of
you said the microwave.
The microwave is one we did —
9
11
Shoes —
Stainless steel.
Stainless steel case, and we held
there what the Japanese have not done enough recognition of,
nor our other friends, frankly, is that we take pride in the
13
fairness with which we have administered this statute, and
14
in the stainless steel case we found no margins.
15
We found
no dumping margins, but they d o n 5t talk about that.
They
16
always try to criticize us when we find that there were
17
dumping margins in a case.
■18
case.
19
20
21
22
23
24
25
MR. JAN E W A Y :
That was a very important
Last month's stainless steel totals
were out, and theyJre way up, big increases all over again —
MR. ROSSIDES:
MR. JANEWAY:
MR. ROSSIDES:
The ~
33 percent, I think.
That's a different question about the
voluntary steel restraint —
MR. JANEWAY:
I know it.
5
26 I
2
MR.
1
2
Mr . JANEW AY:
in
on a p r ic e
5
b a s is
MR.
6
t o d e t e r m in e
7
g e n e r a lly
8
a rra n ge m e n t.
I
is
a t th is
Now ,
p o in t ,
th e
t h e y 'r e
M R. JANEW AY:
12
MR.
R O S S ID E S :
s t a in le s s
c a t e g o r ie s
of
14
c e r t a in , o f
th e
15
to
16
fig u r e s .
ta k e
if
but I
but as
th e y
are
fa r
on
th a t,
t h in k
i t 's
a
th e
o ve r,
end o f
and th e
a b le
c o m m it m e n t s
r e s t r a in t
b u t th a t
th e
been
t h e ir
d o e s n 't m e an
y e a r."
R ig h t .
T h e y 'r e
—
in
a
th e
lit t le
s t a in le s s
but th a t p art
on th a t,
over
is
b u t w e 'r e
JANEW AY:
You
in
c e r t a in
c a te go ry ,
—
I'm
and
n o t g o in g
m o n it o r in g
~
MR.
i t ' s l c o m in g
a s w e 'v e
m e e t in g
s t e e l fig u r e s ,
r e g io n a l,
o u t d e p e n d in g
it ,
a lit t le
11
18
fig u r e s
I m ean.
Y e s,
th a t th e y w ill be o v e r by
13
know
a ll
R O S S ID E S :
r e g a r d in g
9
10
And th e
d if f e r e n t q u e s t io n .
5
4
R O S S ID E S :
th o se
-
a re m o n it o r in g
a ll
th e
ste e l
fig u r e s .
19
Now ,
20
t h e r e 's
21
m o n th —
22
o f th e b u lg e
a g a in ,
a b u lg e —
if
t h e r e 's
as
do you
I
com e in t o
th in k ,
a b u lg e
I'm
and i t
it
if,
c o n fid e n t
d e v e lo p s
fo r
e x a m p le ,
th e re
th a t
w as
th e
la s t
cau se
w as p r ic e -c u t t in g ?
23
MR.
R O S S ID E S :
24
MR.
JANEW AY:
25
MR. ROSSIDES:
Oh, y e s.
T h a t 's
T h a t 's
a d iffe r e n t
one.
—
W e 11, let me give you the example.
y
26
27
We've put out a notice on stainless steel regarding
1
2
France.
5
we got in Japan as no margin, we had a complaint from an
4
American company regarding France recently, and I signed off
5
on the French case, and the French have denied it, and we
;6
You know, when we decided a stainless steel case
just now do the factual investigation.
7
will turn out.
8
On —
I don't know where it
Correct.
it was initiated September 22, 1972.
The
9
Complaint came in August 24,
10
strip from France.
11
yet, and so even though there are these restraint arrangements
12
that does not allow anybody to dump by price discrimination
13
just because there's a voluntary —
'72, stainless steel sheet and
We don't give out the complainant's name
14
MR. JANEWAY:
15
MR. ROSSIDES:
16
MR. JANEWAY:
That's right.
Or manaatory —
Right, but when you get —
once
17
it goes over an agreed .limit, you can bet your life it's a
18
price technique t h a t 's doing it.
19
MR. ROSSIDES:
20
MR. JANEWAY:
21
22
23
'24
25
You think so?
Oh, well —
you see, one of the
tell tale symptoms you've got, not to digress —
I'm sure
we'll talk in a leisurely way some other time —
is that
I've never seen a period with business so good, where G . M . ,
for example —
Joe Dyne, the production manager of G. M.
told me yesterday they can sell anything they can make.
28
7
1
T h e ir p r o b le m
2
got
a lu m in u m
is
m a k in g
p r ic e
w ars
5
MR.
R O S S ID E S :
4
MR.
JANEW AY:
and
5
sta rts
6
s t e e l p r o d u c t s w h ic h
7
by
fo rw a rd
it
--
yh e re
y o u 'v e
—
R ig h t .
b u y in g
—
you
g o t p e r s is t e n t
know w h at th a t
th e n g e t m oved b a c k
to
is
hand
fa ls e
—
of
th e m
out
~~
MR.
R O S S ID E S :
9
MR.
JANEW AY:
10
o ff
11
headache.
12
m ean o u t o f
15
s e m i-fa b r ic a t e d
14
a s lo w in g
15
in
th e m ark ,
th e se
th e
b a s ic
grou n d ,
fo rm
dow n in
R O S S ID E S :
17
MR.
JANEW AY:
c o n d it io n
19
' MR.
20
MR.
21
ge ts you
r ig h t
22
say t h is
if
23
and p o lic y .
MR.
24
e n fo rc e
th e
R O S S ID E S :
you
So,
lik e
R O S S ID E S :
sta tu te s,
I
in d u s t r ie s
d o n 't
in
t h e ir
aw ay.
T h e re fe
a s lo w in g
dow n
a ffo rd
d u m p in g .
in
back
E u ro p e
and
to
th e
in
u n s a t is
Jap an **
R ig h t .
y o u 'v e
th a t gray
fe e l
can
get
Y e s.
o f b u s in e s s
in t o
b y b a s ic
re cove ry,
And th a t g e ts
JANEW AY:
—
a l l b e in g w h it t le d
w hy you
c a n 't
n ic k e l in v e n t o r y
p r im a r y
y o u r d o m e s tic
c o lle c t io n ,
t h is
in d u s t r ie s
b u t th e
are
MR.
fa c to ry
copper p ro d u c ts
an d w h e re y o u h a v e
A ll
you r ta x
R ig h t .
W h e re
16
25
not s e llin g
W h e re y o u 'v e
8
18
it ,
and
it ,
Y e s.
got
are a,
th e
a p o s it io n
h e re
th a t
a n d y o u m ig h t w a n t t o
gray
T h e r e 's
th a t p o lic y
a r e a b e tw e e n
e n fo rc e m e n t
a p o lic y
r e a lly
you
w as m ade b y
t h is
• '■
j
29
p8
I1
/ f ?
Administration right from the very beginning, that we're
12
not just going to sit on them.
1
enforce them.
I4
15
’
■
We have .a responsibility to
i
Now, how you enforce them, there are policy questions;
I
involved.
16
MR. JANEWAY:
17
MR. ROSSIDES:
That's right.
Where you can have a loose inter
18
pretation of circumstances of sale.
That's a policy question.
19
In my statement which you'll see, we made a very basic
I 10
policy change on price assurance, so basic that it changed
1 11
around the whole tenor of the administration and dumping
1 12
act, and it was just as ^surprising to me that we would even
I 13
tolerate the previous policy.
And that was this, price assurance meant that
1 14
| 15
after a case was initiated, dumping allegation —
I16
past before we got it, it might take two years to finish the
I 17
case —
I 18
margins, dumping margins.
I 19
say the other side, the person complained against, the alleged
and in the
Then the other side —
when I
20
dumper —
21
negotiate, but it really wasn't negotiation.
22
come in and say, oh, I'm very sorry we did that in the past.
23
We will give you assurance we will not do it in the future.
24
will give you price assurance.
25
•
there would be a recommendation that there were
would come in and negotiate, and I use that term
They would just
And that used to be accepted, and then they would
We
•
K
30
r
11
put out
a n o t ic e
MR.
■^
1"
a p a r k in g
I5
th e re
JANEW AY:
p ro d u ce r in
17
MR.
t h e d u m p in g
19
m ean a n y t h in g b e c a u s e
I 10
to y o u r m a rk e ts
la w s
of
th e
U n it e d
I 12
MR.
R O S S ID E S :
If
I 15
Y o u 'r e
Japan,
got
—
W hy?
It
d i d n 't
g o m a x im u m p r o d u c t i o n ,
—
and
s e ll
’
Got a b e tte r
JANEW AY:
I'v e
o ffs id e s
e x a m p le .
any e x ce ss
p r o d u c t io n ,
s h ip
got
a b e tte r
e x a m p le
fo r you.
b u t y o u d o n 't g e t p e n a liz e d
fiv e
•
17
MR.
18
A n d y o u 'r e
R O S S ID E S :
MR.
JANEW AY:
21
MR.
R O S S ID E S :
so ,
we d id
'24
M R. JANEW AY:
25
MR.
n o t o ffs id e s ,
and th e
it .
T h a t 's
r ig h t .
H e 's
s a y in g ,
t h is .
R O S S ID E S :
r ig h t .
t h a t y o u 'r e
c a ll
20
—
T h a t 's
t o ld
r e fe r e e - d o e s n 't e v e n
e x a m p le .
th e
you n e v e r th o u g h t o f
yard s.
23
y o u 'r e
/
MR.
b e cau se
on
U .S .
1 14
22
a re b a te
it .
Sta te s.
c o u ld
t h a t y o u 'v e
JANEW AY:
19
F ran ce ,
you
MR.
16
pay
g e t t in g
R ig h t .
I 11
th e
to
lik e
) "
fo u n d i
So , w hat h ap p e n s?
R O S S ID E S :
18
to
n o m a r g in s
G e rm an y —
M R . JANEW AY:
it
you had
R O S S ID E S :
16
I 13
w e re
T h a t w o u ld b e
t ic k e t b e fo re
MR.
14
th a t
no,
We s to p p e d
S a y h e 's
And
*
y o u w e r e n 't o f f s i d e s
th a t.
T h a t 's
g o t tw o f o o t b a l l s
so w h a t we d o now
is
a good
th e re .
we w ill
•
■ 30
1 1
n o t a c c e p t an y p r ic e
1 2
in
th e
p ast
|
assu ra n ce
s t im u la t e d
JANEW AY:
I 4
MR.
R O S S ID E S :
15
M R. JANEW AY:
MR.
6
7
fa m o u s—
8
in
9
t h e y 'r e
1 10
th e
is
Jap an e se
is
w hen I
No s a n c t io n .
Now ,
t h is
w as th e
sto p p e d
w hen th e y
cam e in
p r ic e
h e re ,
we —
and
I
14
com e i n
15
case
say
sh o w
t h is
s a id ,
cam e a n d a n o t h e r y e a r w h ile
fo rg e t
th e y
I
s a id
s a id ,
case
p r ic e
th e
you know ,
w as g o in g
assu ra n ce ,
fa c ts
yeah,
you
m e, w e ll,
so w h a t?
.
and th e n
ju st
to
th e
20
to g iv e
21
p o in t th e r e ,
22
and th e n we c h a n ge
23
on a d e m in im is m a t t e r o r m in im a l s i t u a t i o n .
—
p r ic e
but I
—
th is
e v e n q u e s t io n
assu ra n ce s
you know .
it .
24
M R. JANEW AY:
25
MR.
R O S S ID E S :
in
th e
I
d o n 't
su re
th in k
I
w h e th e r th e re
p a st.
W hat a u t h o r it y
We w i l l
I
so m e o n e
c o m p le t e
m ake
19
even
have
th e
" T h e re *s
w an t in
w as a u t h o r it y
a t e c h n ic a l
do you have
a c c e p t p r ic e
p e o p le
to
say ,
a ssu ra n ce
F r iv o lo u s .
T h a t 's
g o in g
% -
knew a b o u t i t ,
but I
I'm
w e r e d u m p in g m a r g i n s ,
__
th a t
t h in k
a y e a r b e fo re
18
re co rd
to
a n d w e d o n 't
th a t th e re
S o , we fo r m a liz e d
if
on
I'm ; h e r e ,
it .
17
and
assu ra n ce .
13
and
t h is ,
case ,
to
and
no con cern .
No s a n c t io n s .
12
f 16
s it
th e y had
new ?
W e ll,
1 11
B e cau se
t e le v is io n
o ffe r in g
W hat e ls a
Oh su re .
R O S S ID E S :
th is
p* o l i c i e s
d u m p in g .
MR.
1 i
p r i■c e ■ a s s uJr a ni c el
b e cau se
r ig h t .
W hen th e
am ount
to d a y
r
i31
32
X
of goods
in v o lv e d
is
de m in im is ,
2
Then you have
5
th e o th e r p h r a s e we u se
4
p e rc e n t,
b u t th e
to ta l
MR.
JANEW AY:
6
MR.
R O S S ID E S :
b u t b o th
—
w h e re
And
a ls o
9
c o n s id e r in g .
10
p r ic e
11
a t th a t b e cau se
12
aw ay?
I
is n 't
one
fo rg e t
or
w o rth
tw o
it .
R ig h t .
" MR.
14
MR.
I'm
T h e r e 's
d o in g
sta rt
assu ra n ce .
13
tw o s e p a r a t e
a case .
Now ,
th e
a n o th e r one,
sta n d a rd s,
t h a t 's
a d iffe r e n t one
R O S S ID E S :
Now th e y
16
h e re .
17
c o u n try
18
fro m M in n e s o t a ,
19
is
20
n o w , a b u s i n e s s m a n w h o 's g o i n g
21
t h e y 'r e
sta tu te ,
fir s t
la w y e r s
fro m
s it u a t io n .
t h in k in g
as
th e y
have
s h o u ld ,
t im e w e 'r e
C a lifo r n ia ,
MR.
JANEW AY:
23
MR.
R O S S ID E S :
24
MR.
JANEW AY:
to
ta k e
b e fo re
—
I'm
aw ay,
I'm
lo o k in g
tw o y e a r s
in t o
th e y
c a lls
account
s h ip
aro u n d
o r b u s in e s s m e n ,
Illin o is ,
W o u ld m y c l i e n t
ahead o f
to
g e t t in g
r e p r e s e n t in g
22
c le a r a n c e ?
and
w h ic h
R ig h t .
o u r d u m p in g
fro m
r ig h t
o t h e r t h i n g /w as l u d i c r o u s ,
JANEW AY:
F o r th e
th o u gh ,
T h e y com e i n
15
25
th e re m ay be
I
lo w .
8.
th e
it .
a m in im a l, de m in im a l —
am ount in v o lv e d
5
7
fo rg e t
be
buy
in
th e
V e ry
Y e t,
ve ry
v io la t io n .
stu ff.
are
b o th ,
you
you g e t t in g
t h is
Im p o r t e r s
S o now
in t e r e s t in g .
im p o r t a n t ,
th e
b y th e w ay,
t im e .
T h a t 's
goods
se e .
im p o r te r
MR. ROSSIDES:
I haven't gotten into that,
I'tfe
been analyzing two things, one, if when we initiate a case
someone comes in and gives price assurance.
Now, that's —
we haven't started anything yet, we're just beginning.
So
there it's not a question of a year's study and so on and
so forth, and it may be a good policy to allow it in that case
I'm analyzing that.
MR. JANEWAY:
MR. ROSSIDES:
Right.
"
Secondly, the question of advance
rulings, before someone sets up what their pricing structi:ire
will be.
MR. JANEWAY:. But I think it's very healthy if
they're calling for clearances, even if they don't get
assurances.
MR. ROSSIDES;
MR. JANEWAY:
get over to
MR. ROSSIDES:
MR. J A NEWAY:
Yes.
Right.
Move over to dope.
I've got to
at 12:30.
Right.
You want to give us a list?
Why
don't you stick a list in with the transcript,of some
commodities.
MR. JANEWAY:
Right, the list.
Now, just let me
give you the names, first.
The latest case was Geranium point contact diodes.Then stainless steel sheet and strip that I mentioned about.
■M3
34
I1
If/ f ^ /
Microwave ovens from Japan.
•
12 i
MR. JANEWAY: Right.
1
1
MR. ROSSIDES:
1 /
Electronic color separating or
14
sorting machines from the United Kingdom; surgical rubber
15
gloves, Austria; synthetic methionine, Japan; wire rope,
16
Japan; ceramic glazed wall tile, Philippines;
17
steel reinforcing bcirs, Mexico; and another stainless steel
18
place, Sweden.
MR. JANEWAY:
9
1 11
Mail that —
MR. ROSSIDES:
1 10
MR. JANE WAY:.
1 13
MR. ROSSIDES:
Oh, oh.
MR. JANEWAY:
I'm sorry.
We'll give you a list of some
We may want to finish this about
on the phone.
17
18
I'll give you a list
items.
15
16
No, t h a t ’s —
of items but this is a —
1 12
1 14
preformed
MR. ROSSIDES:
And then I'm also giving you this
speech.
| 19
MR. JANEWAY:
20
Right.
MR. ROSSIDES:
That I'll take.
Which lays it out, and I think you'll
21
find it interesting particularly with your knowledge of it
22
where others sometimes don't appreciate it fully.
23
24
25
This was —
the day?
you may have seen this in National Journa.1
I think that'll —
MR. JANEWAY:
that lays out a lot of the points
Give us what your approach is, what
1
2
5
4
5
we h a v e d o n e
6
v is
7
n a t io n
is
o f th e
B u re au
a v is
in
th e
d u m p in g a n d
S e c r e t a r y 's
r e v iv e
th e
c o u n t e r v a ilin g
r e s p o n s ib ilit ie s
o p e r a t in g
o f C u sto m s
in
t a r iff
and
t h e r e 's
10
c o u n t e r v a ilin g w h e re
i t 's
11
o f tra d e
th e m o n it o r in g
12
t h in k w h a t we t r y
13
w hat th e
14
th e
15
and s u p e r v is io n
16
th e T r e a s u r y
17
m ent h a s
h o st o f o th e r
s t a t is t ic s ,
do in
and th e n
20
th e
21
h e re
n a t io n s
of
th e se
never been
at
Se cre ta ry
am b assad o rs
tra d e
p ro p e r g a t h e r in g
th e
d u m p in g
a rra n ge m e n ts,
at
le a s t
t a r iff
1
t a b le ,
and
th e
[ In a u d ib le ]
th e
im p o r t a n c e
ju st
of
and
th e
not
t h in g s
tra d e
and
of
m a tte rs,
th e
and
and
th e
a r.d
and
I
v e r b a liz e
a ffa ir s
in s t it u t io n a liz e d ,
D e p a rtm e n t to
of
p ro p e r
it
r e v ie w
m oved
T re asu ry
D e p a rt
t a b le .
--
s u d d e n ly w h en S e c r e t a r y
sta rte d
c o m p la in in g ,
th e y
g e t t in g
r e a liz e d
th e se
w e ’v e
Kennedy
c a lls , fro m
got
s o m e t h in g
.
22
MR.
JANEW AY:
23
MR.
R O S S ID E S :
MR.
JANEW AY:
25
th e se
Now , w h at hap p en ed
19
24
im p o r t a n t :
S e c r e t a r y .o p e n t h e
[ In a u d ib le ]
18
to
t h in g s ,
are a,
fin a n c e s
R e s p o n s ib ilit ie s
9
a w h o le
fo r
tre a ty
o t h e r d e p a r t m e n t s w h ic h
T h e y k n e w y o u w o u ld
T h a t 's
I
be
e ffe c t iv e .
r ig h t .
w o n 't
say
a n y t h in g
s h a l l b e n a m e le s s .
a b o u t tw o
I
■1 355
1
11
1
MR. ROSSIDES:
12
And my position is very clear.
f
Right.
/
35
U/
•7
Treasury has the
greatest responsibilities of any other agency or department
14
in the Federal Government in trade matters.
6
7
MR. JANEWAY:
It's the agency that catches hell
when as a result of a failure of trade there's a failure of
revenue collecting.
8
MR. ROSSIDES:
9
On d o p e , the philosophy and —
I 10
MR. JANEWAY:
1 11
MR. ROSSIDES:
1 12
■
/
1
5
I
•
13
14
Right.
And this is written down?
My speech yesterday to the Internatior ial
Association of Chiefs of Police and the October 5, 15-month
drug tax report.
/
On dope we, the Administration, through the
15
President's
16
against drug abuse.
17
and that war is succeeding, and the proof is there, that we
18
are reducing the supply of heroin in this nation,
19
taking the profit out of it.
20
last several months there's actually shortages of heroin in
21
major cities —
program,
we've
revolutionized the struggle
President Nixon has a
22
M R . JANEWAY:
23
MR. ROSSIDES:
war against it,
that we're
For the first time, in the
T h a t 's r i g h t .
We know threeror four ways. One,
24
when we seize heroin on the streets and analyze it, the
25
chemical content, whereas the normal addictive numbers are
37
1
2
5
■4
;
M R . JANEWAY:
1
|
MR. ROSSIDES:
MR. JANEWAY:
this
1
G
)
Evaluation.
Nov/ down to a percent and a half, one
percent, to junk, in effect.
5
6
/ C_
5 percent heroin in a shot, 19 to one ratio —
Number one —
Junkies are taking junk instead of
i
. y
7
MR. ROSSIDES:
8
Now, the price, say, of that five percent in that
That's right, and they're mad.
9
particular shot may still be $5 or $6, but when the value
10
is down to 1 1/2 percent, 2 percent, you've had a 60 percent
11
price increase — • •
12
MR. JANEWAY: 1 And it doesn't take you that long.
13
MR. ROSSIDES:
14
MR. JANEWAY:
15
take that long.
What,
a trip?
Whatever you call it, a trip doesn't
~
. ...
16
MR. ROSSIDES:
17
when you get down to 1 percent —
18
a medical expert, on 1 percent has zero, practically, effect.
19
When you're talking about that amount, you're really giving
20
them junk.
21
MR. JANEWAY:
22
MR. ROSSIDES:
23
MR. JANEWAY:
24
MR. ROSSIDES:
25
Doesn't last that long, and in effect,
I don't profess to be
Now, is this —
Yes.
[Inaudible]
Right.
And those speeches have said,
and this is the great thing that the President did, and in
■ 37
■n
'
■
1 if
'
7
C
/
I1
his campaign promise in '68, showed that Customs was not being
12
adequately used.
I5
into Customs, and revived their authority on all smuggling
14
aspects of dope, and we've had enormous increases in seizures,
15
and the risk.
16
of [blank on tape]
7
—
We have had a massive infusion of manpower
The key thing is we have now raised the risk
loophole; at the moment of light aircraft and small
8
boats coming across the southern border and in the waters
9
of Florida and California and the bay.
I 10
111
I
12
I 15 ’
1 14
LO
i
—i
16
17
Congress —
MR. JANEWAY:
Not ports of entry, not points of
entry.
MR. ROSSIDES:
No.
In.other w o r d s , points of
entry, yes, it comes in there, but at least we have manpower
there — * we're trying to do the job and we raise the risk.
MR. JANEWAY:
We've got a surveillance problem
on the coasts and where light aircraft can get into fields.
18
MR. ROSS IDES*:
19
So, we've increased our radar network along the
20
southern border —
21
MR. JANEWAY:
22
MR. ROSSIDES:
23
Right.
We have a radar —
Well, we don't.
say it.
That's my problem,
is we have it. in certain spots, but I don't want to say —
24
MR. JANEWAY:
25
MR. ROSSIDES:
In other words you —
I want to raise the issue —
39
38
1
M R. JANEW AY:
2
MR.
5
w e 'v e
5
R O S S ID E S :
in c r e a s e d
4
MR.
y o u 'r e
our
JANEW AY:
s c a r in g
R O S S ID E S :
7
MR.
JANEW AY:
8
MR.
R O S S ID E S :
s t r e n g t h e n in g
MR.
JANEW AY:
11
MR.
R O S S ID E S :
MR.
JANEW AY:
15
MR.
R O S S ID E S :
16
And th e
17
MR.
JANEW AY:
18
MR.
R O S S ID E S :
19
MR.
JANEW AY:
20
fir s t
t im e
If
y o u d o n 't
s a y w h ere
it
is ,
th e n
T h a t 's
r ig h t .
We w a n t t o
Y o u 'v e
got
a rad ar
W e 'v e
got
a r a d a r n e tw o rk
—
n e tw o rk .
and
I
d i d n 't
Y e s.
know
th a t.
A n d w e 'r e
s t r e n g t h e n in g
th a t
A n d y o u 'r e
k e e p in g
it
fle x ib le
and
m o b ile .
B u re au o f
You o p e ra te
th a t
fro m
h e re .
C o rre ct.
And
th a t goes
th ro u gh
th e
C u sto m s,
C u sto m s.
MR.
R O S S ID E S :
22
MR.
JANEW AY:
s o le ly
C o rre ct.
—
21
23
th e
n e tw o rk .
13
14
fo r
t h a t n e tw o rk .
10
12
t h a t now
p e o p le .
MR.
w e 'r e
—
—
6
9
R ig h t .
w it h
th e
B u re au
24
MR.
25
Now , we h a v e
R O S S ID E S :
R ig h t .
Does
th e
—
you're
a b le
to
do
th a t
o f C u sto m s.
Oh v e s .
th e
a g e n c ie s
th a t
are
in v o lv e d
in
th e
39
r
\
/
T
1
Federal effort.
2
Drugs, whose responsibilities are the internal drug traffic
1^
MR. JANEWAY:
5
6
17
MR. ROSSIDES:
transferred —
1
And Treasury, too.
No.
It used to be.
Then it was
the Bureau of Narcotics was transferred to
the Justice Department and combined with the Bureau of
8
Drug Abuse in HEW and put into the Bureau of Narcotics and
9
Dangerous Drugs in Justice.
T h e r e ’s a perennial dispute as to why it should be
- i
—1
F—1
1 10
there and sd on, but I ’m not getting into that, of course.
And we now have worked out a very fine working
12
13
relationship with that Bureau.
14
jealousies, but the President determined that we handle the
15
smuggling part, they handle the internal, and we both work
16
with our respective counterparts overseas.
17
18
.
Now, the Bureau of Narcotics and Dangerous
in the United States.
14
MR. JANEWAY:
There used to be jurisdictional
You were starting to say -- and
you do have people overseas.
19
MR. ROSSIDES:
‘ 20
MR. JANEWAY:
21
are the takeoff points.
22
MR. ROSSIDES:
Yes.
The President —
At whati you thought and What you think
Correct, the key countries, to develop
23
intelligence and to work with them, and through Interpol, which
24
we are also represented for the United States because of
25
international crime dealing so much with smuggling, counterfeit
Hi
®, •
B B H
H
B9G
H
'
H
0
»
c
_ ------
I
/
£jg
Kb 39
'
•
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11
[9
.
40
■.
financial crimes, Interpol has beefed it up.
(T
Ay
1*
Very quickly, you read those six points gbout the
"- 7
P r e s i d e n t oh increase in education, research, rehabilitation.
14
The central role, Eliot, which is a philosophical point,
15
the central role of the states in enforcement.
6
7
8
9
to beef up the 350,000 state police.
I 12
I 13
We do our job of
complementing and do the Federal function and prevent the
smuggling, internally, to prevent the major, interstate
conspiracies, Bureau of Narcotics and Dangerous Drugs.
I 10
1 11
•SI
We're here
Then we initiated this tax thing, which is the —
in my judgment the finest Federal-state cooperative effort,
enforcement effort ever, and it's A1 Capone revisited,
I use the phrase revisited with a vengeance.
and
We're not
/
Iv|j
1 14
1 15
gust going after one person.
nation-wide effort to take the profit out of the drug business.
16
MR. JANEWAY:
17
18
MR. ROSSIDES:
MR. ROSSIDES:
25
—
statement, you'll see the amount
of money that we've gotten —
22
'24
And by both civil or criminal
MR. JANEWAY: . I will.
20
23
That's what you've got to do, see.
penalties, and if you read that --
19
21
We've institutionalized a
MR. JANEWAY:-
What I'm going to do the first of
the week, around the first of the week is call you on the
phone —
[End of tape.]
•
flSHINGTQN, D C 20220
TELEPHONE W04-2041
0
FOR IMMEDIATE RELEASE
October 20, 1972
In response to a number of inquiries related to the trading
in gold futures to be introduced on the Winnipeg Commodity
Exchange in mid-November, the Treasury Department today issued
the following statement on the application of current Treasury
Gold Regulations to trading in gold futures b y U . S . firms and
individuals:
In general, Treasury Gold Regulations permit persons and
firms licensed by the Treasury Department to buy and hold gold
for commercial, industrial, and artistic purposes in amounts
necessary to conduct their legitimate business operations. At
the same time, Treasury Regulations prohibit speculative and
hoarding activity in gold by Americans.
Under the Regulations, the purchase of gold in futures
markets is treated in the same manner as other gold purchases:
1) Treasury's Gold Regulations provide that Americans may
not acquire any interest in gold, at home or abroad, unless
authorized by a Treasury license.
This prohibition is applicable
to U . S ; citizens wherever residing, to non-citizens residing in
the United States and to U.S. companies and their foreign
subsidiaries.
2) U.S. firms and individuals authorized by a Treasury
license to buy or hold gold for commercial, industrial and
artistic purposes may engage in gold futures transactions only
to an extent consistent with their licenses. Specifically,
purchases of gold futures are limited in amount to the specific
inventory restrictions contained in their licenses and the
transactions must serve the legitimate and customary purposes of
their businesses. Speculative activities by gold licensees not
related to current business operations could result in the
revocation of their gold licenses and subject them to the civil
and criminal provisions prescribed by law.
Gold purchased for future delivery will be included in the
authorized inventory of the gold licensee. Gold licensees are
required to set forth their net futures position in their
regular reports to the Treasury Department and their position
is subject to inspection at all times.
3)
U.S. firms and foreign subsidiaries of U.S. firms which
OVER
2
are members of commodity exchanges abroad may engage in brokerage
activities on such exchanges for Treasury gold licensees and
for firms and individuals not subject to the jurisdiction of
the United States. A Treasury gold license is not required for
brokerage functions.
At the same time, brokerage firms may not acquire any
interest in gold for their own account for present or future
delivery.
Brokerage firms engaging in brokerage activities
must take reasonable measures to assure that the transactions
on behalf of U.S. gold licensees serve legitimate business
purposes and are consistent with the limitations contained in the
gold license.
They must also take reasonable measures to assure a
non-U.S. citizens with whom they transact business are not acting
on behalf of U.S. citizens.
■
heDepartmentoftheTREASURY
ASHINGTON. D.C.20220
ATTENTION:
',lIftEPHONE W04-2041
FINANCIAL EDITOR
FOR RELEASE 6:30 P.M.
October 24, 1972
RESULTS OF TREASURY’S MONTHLY BILL OFFERING
The Treasury Department announced that the tenders for two series of Treasury
bills,.one series to be an additional issue of the bills dated
July 31, 1972
, and
the other series to be dated October 31, 1972 , which were invited on October 18, .1972,
were opened at the Federal Reserve Banks today. Tenders were invited for $500,000,000,
or thereabouts, of 273-day bills and for $1,800,000,000, or thereabouts, of
357-day
bills. The details of the two series are as follows:
RANGE OF ACCEPTED
COMPETITIVE BIDS:
High
Low
Average
273-day Treasury bills
maturing July 31, 1973
Approx. Equiv.
Annual Rate
Price
5.185$
5.244$
5.223$
96.068
96.023
96.039
1/
357-day Treasury bills
maturing October 23, 1973
Approx. Equiv.
Annual Rate
Price
94.744
94.695
94.726
5.300$
5.350$
5.318$
1/
100$ of the amount of 273-day bills bid for at the low price was accepted
44$ of the amount of 357-day bills bid for at the low price was accepted
TOTAL TENDERS APPLIED FOR AND ACCEPTED BY FEDERAL RESERVE DISTRICTS:
D is t r ic t _____
Boston
New York
P h ila d e lp h ia
Cleveland
Richmond
A tlanta
Chicago
St. Louis
M inneapolis
Kansas City
D allas
San F ra n c is c o
TOTALS
Applied For
$
25,060,000
1,460,225,000
485.000
995.000
21.345.000
2,365,000
150,000,000
16.215.000
18.865.000
11.690.000
32.650.000
70.945.000
Accepted
60 ,000
V
362 ,225 ,000
485 ,000
995 ,000
11 ,345 ,000
365 ,000
57 ,500 ,000
10 ,215 ,000
3 ,865 ,000
1 ,690 ,000
2 ,650 ,000
48 j945 ?000
Applied For
$
78,010,000
2,726,865,000
19.750.000
26.470.000
15.375.000
6,550,000
280.845.000
15.595.000
16.890.000
16.640.000
13.860.000
114.825.000
Accepted______
|
13,010,000
1,549,965,000
3.750.000
11.470.000
10.255.000
1.990.000
119,520,000
9.595.000
10.890.000
4.640.000
3.860.000
61.685.000
$1,810,840,000
$
$3,331,675,000
$1,800,630,000 b /
500,340,000 a/
y Inclu des $ 12,555,000 n o n c o m p e titiv e te n d e rs acc e p te d a t
£/ Includes $ 28*,335’,000 n o n c o m p e titiv e te n d e rs acce p te d a t
1/ These r a t e s are on a bank d is c o u n t b a s i s . The e q u iv a le n t
5.46$ f o r th e 27 3 -d ay b i l l s ,
th e ave rage p r i c e o f 96.039
th e ave rage p r ic e o f 94.726
coupon is s u e y i e l d s are
and 5.62$ for the 3 5 7 -d ay b i l l s .
FOR IMMEDIATE RELEASE
October 25, 1972
TREASURY ANNOUNCES FINANCING PLANS
The Treasury today announced the sale at auction of
an additional $3.0 billion of 6-1/4% notes maturing
November 15, 1976.
The auction for these 4-year notes
will be on November 1. Payment will be on November 15.
Commercial banks may make payment for up to 75% of their
own and their customers* accepted tenders by credit to
Treasury tax and loan accounts.
Noncompetitive tenders
up to $400,000 will be accepted in full at the average price
The details of this offering are being released separately.
The Treasury currently estimates that, including
amounts needed to pay off $1.3 billion of notes maturing
on November 15 and $1.4 billion of bonds maturing on
December 15, borrowing in the neighborhood of $12 billion
may be needed through the early weeks of 1973, with the
cash needs concentrated primarily in early December and
early January.
The sale announced today will provide $3
billion of the needed amount*
Consistent with earlier indications, an additional
$2 billion or thereabouts is expected to be provided by the
sale in December or early January of notes similar to the
issue of 2-year notes sold earlier this month.
Additions to the regular weekly bills of the type
announced yesterday provide $200 million of new cash for
each week that they are continued.
The Treasury also noted that seasonal tax collections
next spring will allow for sizeable amounts of tax antici
pation bills maturing in April and June 1973, and indicated
that at least the bulk of its remaining near-term cash needs
will be met by sales of these bills.
BUREAU OF THE PUBLIC DEBT
WASH., D.C. 20220 - W04-22E
for imm e d i a t e r e l e a s e
DETAILS OF TREASURY AUCTION OF $3.0
BILLION OF NOTES
The $3.0 "billion, or thereabouts, of 4-year Treasury Notes to be sold at auction
under competitive and noncompetitive bidding will be an additional amount of the 6-1/4%
Treasury Notes of Series D-1976, dated September 8, 1971, due November 15, 1976 (CUSIP
No. 912827 CK6), with interest payable from November 15, 1972.
An additional amount of
the notes will be allotted to Government accounts and the Federal Reserve Banks in ex
change for their holdings of notes maturing November 15, 1972.
The notes will be issued in registered and bearer form in denominations of $1,000,
$5,000, $10,000, $100,000 and $1,000,000.
Interest will be payable on May 15 and
November 15 until maturity.
Tenders for the notes will be received up to 1:30 p.m., Eastern Standard time,
Wednesday, November 1, 1972, at any Federal Reserve Bank or Branch and at the Office
of the Treasurer of the United States, Securities Division, Washington, D. C. 20220;
provided, however, that noncompetitive tenders will be considered timely received if
they are mailed to any such agency under a postmark no later than Tuesday, October 31.
Each tender must be in the amount of $1,000 or a multiple thereof, and must state
the price offered, if it is a competitive tender, or the term "noncompetitive", if
it is a noncompetitive tender.
The price on competitive tenders must'be expressed
on the basis of 100, with two decimals, e.g., 100.00.
99.01 will not be accepted.
Tenders at a price less than
Fractions may not be used.
The notation "TENDER FOR
TREASURY NOTES" should be printed at the bottom of the envelope in which the tender
is submitted.
Public announcement will be made of the amount and price range of accepted
tenders.
Those submitting tenders will be advised of the acceptance or rejection
;thereof.
The Secretary of the Treasury expressly reserves the right to accept or
reject any or all tenders, in whole or in part, and his action in any such respect
shall be final.
Subject to these reservations noncompetitive tenders for $400,000
or less will be accepted in full at the average price (in two decimals) of accepted
competitive tenders.
This price may be 100.00, or more or less than 100.00.
Commercial b a n k s, w hich f o r t h i s p u r p o s e 'a r e d e fin e d as b a n k s a c c e p tin g demand
deposits, may subm it te n d e rs f o r accoun t o f cu sto m e rs p r o v id e d th e names o f th e c u s
tomers are s e t f o r t h i n such te n d e r s .
O th e rs th a n com m ercial b a n k s w i l l n o t be
permitted t o sub m it te n d e rs e x ce pt f o r t h e i r own acco u n t.
(OVER)
-
2-
Tenders will be received without deposit from commercial and other banks for
their own account, Federally-insured savings and loan associations, States, political
subdivisions or instrumentalities thereof, public pension and retirement and other
public funds, international organizations in which the United States holds membership,
foreign central banks and foreign States, dealers who make primary markets in Govern
ment securities and report daily to the Federal Reserve Bank of New York their
positions with respect to Government securities and borrowings thereon, and Government
accounts.
Tenders from others must be accompanied by payment of 5 percent of the face
amount of notes applied for.
Payment for accepted tenders must be completed on or before Wednesday, November 15,
1972, at the Federal Reserve Bank or Branch or at the Office of the Treasurer of the
United States in cash, 6$ Treasury Notes of Series F-1972, maturing November 15, 1972,
which will be accepted at par, or other funds immediately available to the Treasury
by that date.
Any qualified depositary will be permitted to make settlement by credit
in its Treasury tax and loan account for not more than 75$ of the amount of the notes
allotted to it for itself and its customers.
Where full payment is not completed in
funds available by the payment date, the allotment will be canceled and the deposit
with the tender up to 5 percent of the amount of notes allotted will be subject to
forfeiture to the United States.
The Treasury will construe as timely payment any check drawn to the order of the
Federal Reserve Bank or the Treasurer of the United States that is received at such
bank or office by Friday, November 10, 1972, provided the check is drawn on a bank
in the Federal Reserve District of the bank or office to which the tender is submitted.
Other checks will constitute payment only if they are fully and finally collected by
^e payment date Wednesday, November 15, 1972.
Checks not so collected will subject
the investors deposit to forfeiture as set forth in the preceding paragraph.
•
A
check payable other than at a Federal Reserve Bank received on the payment date will
n°t constitute immediately available funds on that date.
Commercial b a n k s a re p r o h ib it e d from m aking u n se cu re d lo a n s , o r lo a n s c o l l a t e r a l - '
lzed in whole o r i n p a r t b y th e n o te s b i d f o r , t o c o v e r th e d e p o s it s r e q u ir e d t o be
Paid when te n d e rs are e n te re d , and th e y w i l l be r e q u ir e d t o make th e u s u a l c e r t i f i c a
tion to th a t e f f e c t .
O th er le n d e r s are re q u e ste d t o r e f r a i n from m aking such lo a n s .
All bidders are required to agree not to purchase or to sell, or to make any
agreements with respect to the purchase or sale or other disposition of the notes bid
r lui^er this offering at a specific rate or price, until after 1:30 p.m., Eastern
Standard time, Wednesday, November 1, 1972.
FOR IMMEDIATE RELEASE
October 25, 1972
TREASURY ANNOUNCES PROPOSED AMENDMENTS
TO THE CURRENCY AND FOREIGN TRANSACTIONS REPORTING ACT
Proposed amendments to the regulations implementing
Public Law 91-508, the Financial Recordkeeping and Currency
and Foreign Transactions Reporting Act of 1970, were
announced today by Assistant Secretary of the Treasury
Eugene T. Rossides.
The proposed amendments, which will be published in the
Federal Register on October 28, do the following:
1)
eliminate the requirement of the keeping of microfilm
copies of checks drawn for $100 or less.
It is
estimated that such checks account for approximately
90% of all personal checks.
2)
require that information made available to other
departments or agencies shall be received in confi
dence and not disclosed except for official purposes.
3)
state explicitly that these regulations do not authorize
the Secretary or any other person to inspect or review
financial records required to be maintained.
Inspection
and other access to such records is subject to the
requirements of existing Federal and State Law.
4)
eliminate operators of credit card systems from the
definition of financial institution.
5)
delete a phrase which allows the Secretary by written
order or authorization to impose additional recordkeeping
or reporting requirements without amending the regulations.
Comments on the proposals should be directed to the Treasury
Department, Office of the General Counsel, Washington, D.C. 20220,
and received no later than November 27, 1972.
A copy of the proposed regulations is attached.
S-69
MORE
DEPARTMENT. OF THE TREASURY
[31 CFR Part 103]
FINANCIAL RECORDKEEPING AND REPORTING OF CURRENCY
AND FOREIGN TRANSACTIONS
Notice of Proposed Rule Making
Notice is hereby given in accordance with the administrative
procedure provisions in 5 U.S.C. 553, that pursuant to the
authority vested in the Secretary of the Treasury by
II of Public Law 91-508
Titles I and
(84 Stat. 1114 et s e q .), the Secretary
is considering the following amendments to 31 CFR Part 103,
37 F.R. 6912 (1972), set forth in tentative form below.
Any
person who wishes to submit views or objections pertaining to the
proposed amendments may do so in writing within 30 days following
publication of this notice in the Federal Register.
All comments
submitted pursuant to this notice will be open to public
inspection unless otherwise requested.
Comments should be
submitted in duplicate and should be addressed to the
Honorable Samuel R. Pierce, Jr., General Counsel, Treasury
Department, Washington, D. C
E u g e n ^ T . Rossides
Assistant Secretary
Part 103 of Title 31 of the Code of Federal Regulations
is amended as follows:
Subpart A is amended by deleting from §103.11 subparagraph
(5) of the definition of a financial institution, renumbering
the following subparagraph so that the definition of financial
institutions will read as follows:
"Financial institution.
Each agency, branch or
office within the United States of any person doing business
in one or more of the capacities listed below:
(1)
a bank;
(2)
a broker or dealer in securities;
(3)
a person who engages as a business in
dealing in or exchanging currency as, for example, a
dealer in foreign exchange or a person engaged primarily
in the cashing of checks;
(4)
a person who engages as a business in
the issuing, selling or redeeming of travelers' checks,
money orders, or similar instruments, except one who
does so as a selling agent exclusively or as an
incidental part of another business;
(5)
a licensed transmitter of funds, or
other person engaged in the business of transmitting
funds abroad for others•"
2
Subpart C is amended by amending 103.34 to read as
follows:
§103.34
(a)
Additional Records to be Made and Retained by Banks
With respect to each deposit or share account opened
with a bank after June 30, 1972, by a person residing or doing
business in the United States or a citizen of the United States,
such bank shall secure and maintain a record of the taxpayer
identification number of the person maintaining the account;
or in the case of an account of one or more individuals, such
bank shall secure and maintain a record of the social security
number of an individual having a financial interest in that
account.
(b)
Each bank shall, in addition, retain either the
original or a microfilm or other copy or reproduction of each
of the following:
(1)
Each document granting signature authority
over each deposit or share account;
(2)
Each statement,
ledger card or other record
on each deposit or share account, showing each trans
action in, or with respect to, that account;
(3)
Each check, clean draft, or money order drawn
on the bank or issued and payable by it, except those
drawn for $100 or less or those drawn on accounts which
can be expected to have drawn on them an average of at
least 100 checks per month over the calendar year or
on each occasion on which such checks are issued, and
which are (i) dividend checks,
(ii) payroll checks,
(iii)
(iv) insurance claim checks,
employee benefit checks,
(v) medical benefit checks,
mental agency accounts,
dealers in securities,
accounts,
(vi) checks drawn on govern
(vii) checks drawn by brokers or
(viii) checks drawn on fiduciary
(ix) checks drawn on other financial institutions
or (x) pension or annuity checks;
(4)
Each item in excess of $100
(other than bank
charges or periodic charges made pursuant to agreement
with the customer), comprising a debit to a customer’s
deposit or share account, not required to be kept, and
not specifically exempted, under subparagraph
(b)(3) of
this section;
(5)
Each item, including checks, drafts, or
transfers of credit, of more than $10,000 remitted or
transferred to a person, account or place outside the
United States;
(6)
A record of each remittance or transfer of
funds, or of currency, other monetary instruments, checks,
investment securities, or credit, of more than $10,000
to a person, account or place outside the United States;
4
(7)
Each check or draft in an amount in excess
of $10,000 drawn on or issued by a foreign bank,
purchased, received for credit or collection, or other
wise acquired by the bank;
(8)
Each item, including checks, drafts or trans
fers of credit, of more than $10,000 received directly
and not through a domestic financial institution, by
r tT-
letter, cable or any other means, from a person, account
or place outside the United States;
(9)
A record of each receipt of currency, other
monetary instruments, checks, or investment securities,
and of each transfer of funds or credit, of more than
$10,000 received on any one occasion directly and not
through a domestic financial institution, from a person,
account or place outside the United States; and
(10)
Records prepared or received by a bank in the
ordinary course of business, which would be needed to
reconstruct a demand deposit account and to trace a
check in excess of $100 deposited in such account through
its domestic processing system or to supply a description
of a deposited check in excess of $100.
This subparagraph
shall be applicable only with respect to demand deposits.
5
Subpart D is amended by amending §103.43 to read as
follows :
§103.43
;
Availability of Information.
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vine
9idj50.iXcrq£
sd
The Secretary may make any information set forth in any
xd. iJusda yorid
bn&.
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reports received pursuant to this part available to any other
department or agency of the United States upon the request of
....
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W
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the head of such department or agency, made in writing and
stating the particular information desired, the criminal, tax
or regulatory investigation or proceeding in connection with
^
£cïWO X JL<3Ü.:
which the information is sought and the official need therefor.
Any information made available under t h i ^ S " o t h e r
departments or agencies of the United States shall be received
by them in confidence, and shall not be disclosed to any pefson
except for official purposes relating to the investigation or
.:sirkj$jrs Hf
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h
yd
di. ab^.ooex- dopa
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aasooj»
proceeding in connection with which the information is sought.
.wfiXi b3b :tQ' i o _
Subpart D is further amended by amending §10,3.45 to read
as follows:
§103.45
Exceptions, exemptions, modifications, and reports.
(a)
The Secretary, in his sole discretion, may by
written order or authorization make exceptions to, grant
exemptions from, or otherwise modify, the requirements of
this part.
Such exceptions, exemptions, or modifications may
be conditional or unconditional, may apply to particular
6
persons or to classes of persons, and may apply to particular
transactions or classes of transactions.
They shall, howevery
be applicable only as expressly stated in the order or autho
rization, and they shall be revocable in the sole discretion
of the Secretary.
(b)
The Secretary shall have authority to further define
all terms used herein.
Subpart D is further amended by adding a new §103.51 as
follows :
§103.51
Access to records.
This part does not authorize the Secretary or any other
person to inspect or review the records required to be main
tained by Subpart C hereof.
Inspection or review or other
access to such records is governed by other applicable Federal
or State law.
2
'
I
1
[T h e
2
V O IC E :
5
s in c e
ta p e
r e c o r d in g
—
th e
gre a te st
at
th is
S e cre ta ry
p o in t .]
of
th e
\
j
T re asu ry
J o h n C o n n a llv .
4
(G e n e ra l la u g h t e r .)
5
SECRETARY
6
I
7
chance
8
w o u ld h a v e
9
w o n d e rfu l b u ild in g
10
b e fo re
11
in s id e .
I
12
and t h a t
i t ’s
13
have
14
fo r
have
fro m
to
it
to
a d m it t h a t
t h in k
as
th e
se e
be h e re
in
t h is
I ’m a l s o
17
t h is
19
th e m i n
20
o ve r and
21
fr ie n d s .
it
a ll
fix e d
fro m
up on
se e
t h in g
of
fo r
w it h
So,
and to
th e
th e re ,
22
(A p p la u s e . ) '
23
SECRETARY
24
p a r t ic ip a t e d
25
b e n e fit t e d
in
ve ry
a ll
sc h o o l to
re p re se n t th e
to
SH ULTZ:
so rts
and even
in
on
sh o w s
be
in
th e
th ro u gh '
and
sc h o o l and a g re a t
It 's
se e
and
fa m ily
ve ry,
in
th e
ve ry
i t 's
to
t h r ill
n ic e ..
h e re
h a v e n 't
tre a t
to
o f C h ic a g o
A d m in is t r a t io n .
o f w a vs m y s e lf.
to
se e n
lo o k
so m any o th e r o ld
The U n iv e r s it y
th e
I
a gre at
se e
and
a u d ie n c e
.
w o n d e rfu l to
h e a v ily
o u t s id e ,
th a t-
i t ’s w o n d e rfu l fo r
o c c a s io n .
to u c h e d
I
a d m ir e r o f
th a t b u ild in g
t h is
a
in s id e .
w as a w o n d e rfu l b u ild in g
a lo n g w h ile ,
you
g r e a t p le a s u r e
th e
an
th e
e v e n in g P r e s id e n t a n d M r s .
q u it e
th e
a n d h a v in g
a lw a y s b e e n
t r a d it io n
it .
im a g in e
o c c a s io n
ap p e ars
a s s o c ia t e d
to
can
t h is
I ’v e
it
a gre at
of us
p a r t ic ip a t e
18
in
w as re n o v a te d ,
to
You
R o s e n w o ld H a l l
t h a t nam e
a ll
SH U LTZ:
p a r t ic ip a t in g
se e
15
16
b e g in s
I ’v e
I
has
have
had p re tty
/
' |l I
O'
3
1
w o n d e r fu l p e o p le
com e a n d
2
G o u ld w h e n
in
I
w as
5
in
4,
B ro o k s
5
in
th e
now t h a t
my o f f ic e
6
re p re se n te d .
8
w hat I
9
it
10
th e
11
fro m m e, w i l l
sam e
It 's
c o n s id e r
w o u ld n 't b e
th e
be
to o
in t e r e s t e d
14
c o n t r o l,
15
in
16'
D r.
17
at th a t
t im e
18
d e n t,
d i d n 't
19
I
20
d i d n 't d o
21
be b a ck
22
p e o p le
in
to p
I
to
of
fro m
th e
and
L ab o r,
25
th e
d ir e c t ly
I
t o t a lly
h ard
o f d o in g
w o u ld
s a id
have
se e
fin d
w it h o u t
on
th e
s o m e t h in g
U n iv e r s it y
I
ju st
t r e m e n d o u s ly
how n o t o n ly
and
to
h e re ,
but I
t h in k
th e
P r e s id e n t ,
to
d o w it h
p r o b le m
of
to
a key
p la y
and I
th e
of
fro m
of
th e
th e
r o le
w ent aro u n d
r e c r u it in g
M r.
P r e s i
h im ,
and
th a t
I
re m e m b e r.
p o in t
is
d ru g
but
h o n e s t ly ,
ta k e
th e
U n iv e r s it y
Se cre ta ry
of
d i d n 't
t h in k
su p p o se
any p a r t ic ip a t io n
abou t t h is
o f C h ic a g o ,
th e
a n y t h in g
I
arou n d
I
so m e b o d y
m ade a s p e c ia l
C h a ir m a n
Ron
a s y o u k n o w , h a s b e e n e x t r e m e ly
so rt,
th e
t o me t o
a su d d e n w ho sh o w e d up
p r o b le m
is
com e a n d w o r k ,
th a t
and w o rke d v e ry
W hen y o u
24
and
t h is .
any
23
q u it e
U n iv e r s it y
t a le n t
but o th e rs,
a ll
t h e w h o le
th e
s u r p r is in g
com e i n
13
t h in k
T r e a s u r y w o r k in g
in t e r e s t in g
The P r e s id e n t,
I
o f M anagem ent and B u d ge t,
t im e ,
been
to
U n iv e r s it y ,
J a ffe
Jack
and h e lp in g me o u t.
7
so
m e:
D e p a rtm e n t o f L a b o r , an d A r th u r
O ffic e
I 'm i n
A t th e
12
th e
w it h
is
th a t
s im p ly
fa c t
T re asu ry,
th e
q u a lit y
H e 'l l
of
e x t r a o r d in a r y .
th a t
th e
th e
Se cre ta ry
S e cre ta ry
C o u n c i l o f E c o n o m ic A d v i s o r s ,
of
th e
of
C o m m e rce r
p e rso n
[4
" -
I
:
/
f
y
1
/ * J
who put the Management into the OMB are all from the University
2
of Chicago, you get an idea of the contributions the University
5
has made, and the role that the University plays in the
4
affairs.
5
6
I'd hate to tell you about the number of people
we tried to get . and
didn't get.
7
(General laughter.)
8
SECRETARY SHULTZ:
9
‘
So, there is some kind of a
connection there.
10
I thought as a mark of my own esteem and also in
11
the job of Secretary of Treasury you have a few little
12
privileges: that come along, or things that happen when you
13
.
One of them is your signature goes on these dollar
7
! 14
bills, and that's a big to do in signing dollar bills,
and
15
naturally when I discovered that and saw those of some of my
16
predecessors that were Secretary/ of Treasury, too, I learned
17
that the thing to do right away is you buy the first thousand
18
because they have those low num b e r s , and then you have lots
19
of fun with those low number dollar bills and so that is one
20
marker.
21
■til
’
And then another thing that happens to the Secretary of V 1
22
Treasury is a medal is struck and then your picture is on
23
o n e s i d e of it and on the other side you can have whatever you
24
want, and most of the people put the Seal of the Treasury
25
Department, which is, of course a very beautiful seal, but
5
1
in my case I thought it would be nice to of course li^ve the
2
Seal of the Treasury Department on it but
5
but to also have the organizations that I have the pleasure
4
of being with in the government, the U.S. Marine Corps,
5
and the Department of Labor and the Office of Management
6
and Budget on the back, and also it would be nice to have the
7
Seal of the University of Chicago on one of the medals, so
8
I have here a little presentation to make to have —
9
[Inaudible.]
And Endrick, if you would come forward,
and the
10
President, Mr. President and Dean Davison, if you would come
11
forward.
12
I have the first two of these medals that were
15
struck, and you don't have to look at the side that has my
14
picture on it —
*
15
“ (General laughter.)
16
SECRETARY SHULTZ:
17
Just look at the side that has
the Seal of the University of Chicago on it..
18
(Applause.)
19
SECRETARY SHULTZ:
As you know, it is illegal to
20
deface the currency.
21
has special, by a special ruling of the Secretary,
22
to write on it, and so I have written and signed my name
23
over the printed signature, and one of these dollar bills
24
has the serial number 1892, the date of founding of the
25
University of Chicago, for you, sir;
However, the Secretary of the Treasury
is entitled
and 1898 on it, the date
of
fo u n d in g
—
( A p p la u s e .)
SECRETARY
SH U LTZ:
So
t h a t ’s q u it e
a change
fo r
W a s h in g t o n .
(G e n e ra l la u g h t e r .)
SECRETARY
us
a l l w hen th e
to
say
th a t
th e w ay
t h in g s
it
"p e a c e
tu rn s
to
at hand"
w h e re
p r o d u c t iv e
th e w o r ld ,
so
I
th o u gh t I
do we go
w o u ld
th e m e o f
e x p e c t a t io n
a s we m ove in t o
g e n e r a t io n
of peace,
b u t c o m p e t it io n
ra th e r
th a n
in
te rm s
in
are
but at
th e
our
to ,
in
any
w e ll,
and one o f
a
lit t le
and
th a t
w h a t we m ay h op e
c o m p e t it io n
a ffa ir s
th e
th ro u g h o u t
is
of
b it
is
on e k in d
h is
a
th ro u gh o u t
i n t e r n a t i o n a l e c o n o m ic
o f m ilit a r y
th a t
p e a c e w o r t h w h ile ,
you
P r e s i d e n t 's ,
th e
th in k
f o r p e o p le
to
a b le
a d d it io n a l
a se n se ,
h e re ,
fo r
t h a t 's
ra te ,
and I
in
is
hope
so m e
m a k in g
and
ta lk
th a t we se e
w o r ld ,
c e r t a in ly
fro m
o u r s e lv e s
ab ou t a fa v o r it e
th a t
I
a gre at day
K is s in g e r
e s t a b lis h e d ,
c o n c e n tra te
fo r
is
th e re
o u r a t t e n t io n
w h ic h w e w o u ld
m a k in g i t
and
A p p a r e n t ly
has been
t h is
H e n ry
be w orke d o u t,
tu rn s
w hat h ap p en s n e x t,
t h in g s
is
o u t.
o f peace
th a t n a t u r a lly
W e ll,
P r e s id e n t th ro u g h
th a t have
stru ctu re
SH ULTZ:
th e
a ffa ir s
or
a n o th e r.
And
at
M r.
H a r r is
so rt
h is
d is c u s s io n .
th a t
end i t
o f p ic k e d
w as
o u t th e
in t e r e s t in g
to me t h a t
s u b j e c t so m e h o w
to
sta rt
1
2
to my lot as Secretary of the Treasury to work on the subject
5
particularly as it affects monetary arrangements.
4
thought what I might do this evening is just report to you
5
informally about where we stand on that score, the outcome of
6
these discussions at the International Monetary Fund and
7
World Bank meeting held about four weeks ago in Washington and
8
just tell you some of the things that took place there that
|
struck me as especially
10
to think about asIwe move into a different kind of world, and
11
as we worry about a different S e t lot problems.
And so I
the/.significant things,that we have
12
I think the first thing that was so striking to us
13
was and which was remarked on in the corridors as well as at
14
the meeting —
15
pretty much discussing at this particular meeting the problems
16
of the monetary system;
17
the world gathered to do t h i s .—
18
meeting a number of things, I think, stood out, as I see them.
19
as you know, we had 124 nations there, all'
and the Finance Ministers from around
in the corridors and at the
The first, and very striking point, was the great
20
sense of welcome, almost relief, and joy with which the fact
21
that the President came to the meeting and spoke so eloquently
22
about the subject and with such knowledge and, in effect, put
23
forward a set of United States' views.
24
Now, I think there was a fair amount of agreement
25
on the views that were put forward, but certainly there's a
.
1
lo n g
d is t a n c e
2
sy ste m .
But
5
th a t th e
U .S .
4
tu re
5
th a n m o st o f
6
th e
7
w o r ld ;
8
e c o n o m ic p o w e r i n
9
th e P r e s id e n t
of
to
it
go
had
had gone.
we a re
th e
com e
w as a ls o
And
r o le
by
w o r ld a n d
fo rw a rd
12
n o t w e lc o m e
a t th e
U n iv e r s it y
13
[ In a u d ib le ]
and
fo rth ,—
14
w o rk to w a rd
a new
15
we w a n t t o
16
fro m
17
to
18
we f e e l a r e
d is a d v a n t a g e o u s
19
b u s in e s s m e n
a n d A m e r ic a n
20
tre m e n d o u s d ra g -d o w n
21
in t e n d
to
22
a lo n e
0
s u r p r is e d
w o r ld
as
sy ste m
U n it e d
fo r
—
th e
and have
gone
Sta te s
w as v e ry
to
to
to
se e
sa y .,w it h
t h a t n e g o t ia t io n
fro m
th e
w o rk e rs.
o f A m e r ic a n
th e
com e
say
g a in
w e lc o m e
know
th a t
th e
r e s u lt
to
th o u g h t
se e
at
th e
th a t m ost o f
th is
of
a s we
b e n e fit s
in
t h in g s
r
th a t
s t a n d p o in t o f A m e r ic a n
in
n o t g o in g
th is
to
p ro ce ss
in t e r n a t io n a l m e e t in g s ,
s e m in a r s
is
T ra d e w o r ld ,
[ In a u d ib le ]
fo r
it
t r a d it io n
in
th a t
stro n g e s-:
fo rw a rd ' —
r e p r e s e n t o u r s e lv e s
'—
th e
th a t we a re .re a d y
We a r e
jo b s
I
it s
a F re e
a m in u t e
in
r e a s s u r in g .
b u t a n y o n e w o u ld
we w an t to
fu rth e r
s t r o n g ly
has
me how p e o p le
had
a stru c
you ve ry
U .S .
o f C h ic a g o
fo r
w it h
and had
s t r ik e s
a n y new
t h r ille d
th e m o st a fflu e n t ,
P r e s id e n t
t h in k
of
ju st
fo rw a rd
a n o p e n w o r ld s we w a n t t o
b u t d o n 't
n e g o t ia t e
22
/
o f w h at th e
w e re
th e m
it
in t e r e s t in g
th e
tra d e ,
stru c tu re
com e
th e
fa r
11
so
and
s u r p r is e d
le a d e r s h ip
to
se e
o u t th e
fo rw a rd
th a t had
a ll,
It
r e a lis m
com e
th e m
tre m e n d o u s
10
w o r k in g
w a s a p p a r e n t t h a t p e o p le
t h in k in g
a fte r
in
se e . a
an d we
t h a t m an n e r.
U n iv e r s it y
th e
w as r e a s s u r in g ;
of
F in a n c e
th a t
C h ic a g o ,
M in is t e r s
is ,
th e y
le t
but I
aro u n d
s a id ,
w as
th e
t h a t 's
1
th e w ay we f e e l a b o u t
2
And w hen th e
5
e ve ryw h e re ,
4.
e xp e n se
o f ou r c o u n try ,
5
And th a t
w as r e a lis t ic ,
6
P r e s id e n t
is
7
r e a lis t ic
and p o lit ic a lly
8
a c c o m p lis h e d .
P r e s id e n t
n o t to
expand
we fo u n d
about
o u r c o u n t r ie s ,
we w an t to
jo b s
and
in
it
t h is
your
good
to
t h in k
th e
fa c t
of
th e
11
c r it ic is m
t h a t we g e t
as
12
it
13
th a t we ta k e
14
th a t you
15
ve ry
16
is
17
a ll
18
argu m e n t by a s k in g ,
19
w o u ld n 't w e p u t o u r p l a n s
fo rw a rd ?
A nd th e
20
he s a id
p u t th e m
fo rw a rd ,
21
o u t w e ll,
22
l e a s t w e 'r e
in t e r e s t in g
th e
s t r o n g ly
25
to
an e le c t io n
stro n g e st
le a d e r s h ip .
th a t
is
th e
se n se .
th e
e c o n o m ic a lly
be
th e
y o u 'r e
le t 's
so m uch th e
t r y in g
to
t h a t 's
se co n d
aro u n d ,
if
b e tte r
of
in
th e
th e
se e
h o w w e lc o m e
T h ere
are
a lw a y s
fo rw a rd ..
ahead,
a ta rge t
w e ll,
w e ll,
c o u n try
P r e s id e n t w ho f e l t ,
ye ar,
a ll
in it ia t iv e ,
to
p u t s o m e t h in g
to m ake y o u r s e lf
d is c u s s io n s
th e
and r e a s s u r in g
s h o u ld n ’t
The
of
P r e s i d e n t 's
w a s w e lc o m e d a n d w i t h
24
at
a b o u t w h a t s h o u ld
le a d e r s h ip ,
So
lo t
se e
t a k in g
23
expand
co u n try
a m anner th a t
r e a lis t ic
to o .
•
I
th e n ,
jo b s
t h a t m ade a
is
in
in
have
10
is
of
says,
have
g o in g
So
9
[ In a u d ib le ]
and
it
th e
if
T h e y w e re m ade
w e ll,
a fte r
do w h at we t h in k
a ll,
an sw e r
is ,
and
it
th e
th a t
if
w e ll,
r ig h t
ye s;
tu rn s
at
t h in g .
a sta rte r.
t h in g
w as
th e
th a t w as v e ry
im p o r ta n c e
at
e le c t io n ,,
d o e s n 't ,
is
t h is
fo rw a rd
P r e s id e n t r e s o lv e d
w e r e n 't a n y
it
is
a rgu m e n ts
w hy p u t a n y t h in g
th e re
and
th e
w o r ld ,
s t r ik in g
a tta ch e d
to
me in
by e ve ryo n e
and
1 10
7
m
10
1
to developments in the United States' economy. ( We tend to
2
look on our own economy and say, well, i t d o e s
5
we're in trouble, therels ,a lot of inflation;
4.
There's expanding, that's the other way around; that's good.
5
look poorly,
that's bad.
We know that other people are also affected by it.
1 6
But it was just stunning to see ourselves as others see us
7
and to see how strongly they are affected by the fact that
8
the U.S. economy is expanding strongly, more strongly than
9
any of cur trading partners in the last year or so and that
10
the U.S. record on inflation in the last year or so is better
11
than any of our.^tradingupartners', and that is a very
12
reassuring fact, and it makes a tremendous difference, as
' 13
1 14
15
16
everyone saw, to what can be done in the international monetary
system.. And it's almost as though, if the U.S. economy is
behaving itself, if it is expanding strongly, providing that
big, diverse market, and this inflation is under control, almosl :
17
any monetary system can work.
18
almost no monetary system can work, so that the central impor
19
20
21
22
23
24
25
And if the reverse is true,
tance of what happens here to the kind of world monetary and
trading system we have was very apparent in the comments of
Finance Ministers both from the developed countries and the
developing countries. '
They happened to be in Washington at a time when
we were in the midst of our work with the Congress to get a
stiff lid on Federal spending, and in everybody's mind, and I
/I
;
-
ii
fa-/-
1
. .
/ y (\
think properly, that is identified as the central^ eaoQpmic
I2
problem in achieving the kinds of goals that, we're talking
5
about, and so they observed that, and I'm sure when they
4.
went back home and they read about the outcome, they1have
5
wondered what it meant.
6
From our standpoint,
I
the outcome of that battle has
7
been a great victory for the idea that we must control our
8
spending and we must keep this whole processing line if we
9
are to maintain the discipline necessary to control inflation,
10
and if we are to avoid at some time down the road —
11
would suspect that it can't:possibly be soon under any
12
circumstances, and certainly the President is against any
13
kind of a tax increase.
■■
and I
: 14
So, the battle to keep spending under control is
15
the battle to keep taxes under control, the battle to keep
16
inflation under control, and I would say the battle to keep
17
the U . S . domestic economy in healthy shape so that we can
18
have expansion,
19
the .ratew.of inflation and so that we can have the kind of
20
economy in the sphere of enterprise that we look to in the
21
future.
22
|.
/'
!
•
so that we can have a continued reduction in
•.|
So, at any fate, the second thing that I think came
23
through to me in the meetings was the tremendous importance
24
that everyone attaches to the behavior of the U. S. economy,-
25
and their tremendous admiration for the way in which
12
p
we 're historically behaving, particularly since/rney
so much of the trouble that we seem to be having right in this
particular boat.
This, now, is the time, of course, when discipline
must be exercised, and we are in a testing time, this question
of spending and inflation, and the President is very concerned
and is going to deal with it in
The third item that —
e
tough and determined way.
turning now more to the
v
international monetary arrangements and some of the issues
involved —
the third item that came in for a lot of comment
and which on the whole I think that people welcomed,
though
I'm not sure that everyone really^understood exactly what
our position is and just where we're going going in the
negotiations, but people welcomed the sense in which we talked
about a link between a monetary system and other aspects of
the trading aid, military investment and other things that
flow money around the world.
And as y o u 1know, we have been
taking the view that certainly conceptually it is ridiculous
to think of the monetary system as somehow a kind of isolated
thing going on over here unrelated to arrangements made about
trade or unrelated to arrangements made about capital flow
or aid patterns or whatever it may be, but these things are
all part of a set and have to be thought about in that way,
and the system, if it is to work over a period of time must
be a system that recognizes that fact.
13
So,
we p u t th a t
le v e l we m u st h ave
an d d e a ls w it h
th e
a sy ste m
th e m
h a s b e e n m is u n d e r s to o d
s a y in g
t h a t w h ile
c o n n e c t io n s ,
at
about tra d e
w h a te v e r,
th e
we se e
th e y do o r
at
th a t
le a s t
to be d e a lt w it h
at
to ,
t h e ir
ve ry
th e re
are
th e se
a rra n ge m e n ts
d e a lt w it h
and
I
o r .
by
tru st
I ’m n e v e r e x a c t l y
th o se
are
P e o p le
are as
are
w h ic h
g o in g
have
o f our
th e
GATT o r
th e
Com m on M a r k e t o r w h a te v e r
have
s it
aro u n d
it
m ay b e ,
s e t t le
k in d s
and we d o n ’t
a n y t h in g
of
th e
u n t illw e
s e t t le
I
fo u n d
th a t.
it
c a ll
to
se e
d iffe r e n t -p a r t s
Now ,
in
e v e r y t h in g
t o .e x p e c t t h a t
B u t w h at we d id
e n c o u r a g in g
b e tw e e n th e
w o u ld
and
th ro u g h
say ,
we w on ’t
in c lu d in g
a ll
th e se
d e t a ils .
I t ’s u n r e a lis t ic
e x p e cte d
to
a rra n ge m e n ts
to
have
to w o rk o u t p a r t ic u la r s
GATT o r th ro u g h
t r a d in g
w h e re
le v e l n e g o t ia t io n s
about it ,
ow n te r m s .
is
o u r p o s it io n
le v e l
and are
ra te
th is
[ In a u d ib le ]
a lt h o u g h
b u t a t,a n y
in
t h in k
p a r t ic u la r
a ll
r e la t io n s h ip s
and
a lo n e m o n e ta ry
know
ajt t h e l p r p a d
th e se
—
a b ro ad
d e t a il
th e y
sta rt
about th a t,
w as a
n a r r o w ',
h a v e ;:e x c r u c ia t in g
I
<sr
h e re
r e c o g n iz e s
sam e t im e
th e re
ve ry
s a id
a lt h o u g h
a rra n ge m e n ts, le t
e x p e rts w ho t h in k
c e r t a in
le a d ,
—
and
th a t
and a t th e
c ir c u m s t a n c e s w o u ld
c le a r
fo rw a rd
th e
fo u rth
a t t e n t io n
d e s ig n in g
to
a m o n e ta ry
is
try
to
and we h a v e n ’t
p o in t o u t ,
a c k n o w le d g e d ,
of
t h is
sy ste m ,
of
and
th e
r e la t io n s h ip
sy ste m .
e le m e n t i n
th e ,
is
a n d w h ic h
t h is
p ic t u r e
co u rse ,
th a t
is
th e
th e
th a t
I
c e n tra l asp e ct
s o -c a lle d
14
r
1 1
adjustment process.
What kind of an a d j u s t mentVp^^es^-jre
2
we going to have, and here we put a great deal of emphasis
5
on the need for flexibility in the monetary system and the
4.
need for symmetry in the approach to it, and if we are going
5
to seek a system in which equilibrium is thought of as desired,
then we have to see that there is as much burden on a country
I 6
7
8
running a surplus to make adjustment as there is on a country
running a deficit.
There is nothing particularly virtuous
9
about a surplus or terrible about a deficit.
10
that there is a lack of equilibrium,
11
to have to be done on both sides of the equation to deal with
C \2
i— 1
that adjustment processf:and to make for an equilbrium.
13
They both suggest
that something is going
So, we have advocated in the adjustment process that
14
there be some discipline in forcing countries to make adjust
15
ments and at the. same time that there be a wide area of
16
discretion among countries to decide in their own way, given
17
their own culture, their own patterns, how that adjustment
18
might take place.
19
We think that the exchange rate is bound to be a
20
central feature in the adjustment process, but it is not
i— 1
C \2
a good idea to act as though that element of the price system
22
can carry the whole burden, and that we may very well find
23
a situation in which very restricted trade practices make it
24
almost impossible to deal with the lack of equilibrium for
25
which the exchange rate changes, and what you must have
| :
5
is
changes
in
th e
t r a d in g
We h a v e
a ve ry
stro n g
up i t s
ra te
th e
su g ge ste d
s u r p lu s ,
of
a id
and
so
th e m o n e ta ry
sy ste m ,
so
lin k e d
are
th e p r o c e s s
of
o p t im is m
are
th a t
in
I
w ere
of
but at
in
ta k e s
T w e n ty c o u ld
m ent on
th e m
in
to
to
th e
e a r lie r
a id
sh o w
s t e p p in g
im p le m e n t i n
m e n t io n e d
th e
le a s t
i t . 's
have
sy ste m
th a t
about
and
lin k
it
in
b r in g
b e fo re
w o rk on
th e
w h at th e y w an t to
fo rth
hope
aro u n d
and
it
g e t t in g
th a t o ff
is
a se n se
and
th e
o f r o o m e n t u iji
say
in
N a ir o b i n e x t y e a r,
t h a t w hen n e x t y e a r 's
t h is
t h a t w o u ld
t e c h n ic a lit ie s
th e
and
to
th a t
th e
a c t u a lly
e le c t e d
of
s o m e t im ^
C o m m it t e e .o f
N a ir o b i m e e t in g
d e v e lo p .
abound;
a p p o in t e d
w e re
and th e re
w ill be
th e
got
fo r
c e r t a in ly
w e ll a c c e p te d
m o m e n ts i n
g o in g
Id e a s
e s t a b lis h e d ,
so
arran ge '
som e g r o u n d s
w e ll a c c e p te d ;
d e p u t ie s
and
t h a t w e w o u ld
in s t it u t io n a l
com e f o r w a r d .
been w illin g
—
th e
th a t we h ave
som e g e n e r a l p r i n c i p l e s
a re g o in g
r u n n in g
c o n s id e r
w ay to
w as v e ry
C h a ir m a n
p la c e
Se p te m b e r —
th e
T w e n ty w as
a r r iv e d ,
V ic e
an d m any p e o p le
m e e t in g
I
sy ste m ,
r e a s o n a b ly
we h a d o u r p a r lia m e n t a r y
grou n d ,
th a t
te rm s o f
w ill
in it ia t iv e
T h e p e o p le
th e
is
t h in k
a new s y s te m
A C o m m it t e e
C h a ir m a n ,
t h a t 's
in -o t h e r w o rd s,
id e a
and h e re
th e re ,
th e P r e s i d e n t 's
m e t.
ou gh t to
t r a d in g
fin a lly ,
o u r ow n t h o u g h t s
w o r ld .
th e
it
co u n try
a d ju stm e n t.
W e ll,
m e n ts t h a t
on;
th e
j JW '
th a t any
p e rh ap s
a d ju stm e n t p ro c e ss
fo rth
sy ste m .
at
g u id e
th e
le a s t
agre e
p e o p le
w ho
sy ste m ,
g u id e
.16
So,
1
to
have
a s w it h
a n y k in d
2
have
so m e s e n s e
5
so m e m a r k e r s
4.
p e o p le ,
5
a r e a l d e a d lin e
6
w o u ld
7
m e e t in g w o u ld . b e ' u s e f u l
8
on.
—
w e ll,
fa ll
you have
t h a t 's
in
a p a rt,
W e ll,
9
of
I
t im in g
to
of
se n se
but at
t h in k
us
in
11
G o ve rn m e n t v e r y
12
and we f e l t
13
package
a b o u t how th e m o n e ta ry
14
have
say
15
w h ic h p e o p le
16
a new m o n e ta ry
17
w it h
18
p o s s ib le
19
b e h a v in g , i t s e l f
20
p r ic e s ,
21
p re tty
to
th e
—
I
h ard
I
s a id ,
w e ll, - a ll o f
sy ste m , b u t ;e a c h
e s s e n t ia l t h in g s .
to
and
se e
if
th a t
th é
th a t
So,
I
in t e r r e la t io n s h ip s ,
24
b a t t le
25
and th e
[ In a u d ib le ]
th e
ju st
w it h
a se n se
gre at
re tu rn
in
P r e s id e n t ,
w it h
w o u ld
to
a n d w e m u st, h a v e
do
econom y b e h a v e s
I
d e gre e
have
th a t you
b e a c h ie v e d ,
th a t
e ffo rts
and
th e
c o u n t r y w o u ld
e x p a n s io n
of
w o r ld
w e ll .th o u g h t th ro u g h
s h o u ld .b e ,
is
th e
o th e rs
th e
i t 's
to
agre e
e v e r y t h in g
it s e lf,
and
r e a s o n a b ly
t h e n w e w o u ld
ste a d y
have
a
sy ste m .
t h in k
23
—
U .S .
c o u ld
th a t
Be su re
m eans stro n g
go o d m o n e ta ry
22
sy ste m
in
e x is t e n c e
tu rn
to
and
m eant th a t
a n d w it h
a r e a s o n a b le ,
says
know ,
w o u ld
a lo n g
on o u r p o s it io n
w as s u r p r is e d
you
to
I
t o [p u t dow n
dow n t h a t
th e
and
h ave w orke d
we p u t fo rw a rd
a g a in
—
l^ iir iC y o u
have
is n 't
t r y in g
fin a lly
to
m a in p o i n t
it
sam e t im e
10
t h is
and you
a d e a d lin e ,
th a t
th e
to
n e g o t ia t io n ,
p u t s o m e t h in g
a k in d
th e
of
we se e
a ll
an d we se e
—
and
G o v e rn m e n ta l o u t lo o k
to
is
of
th e se
[ In a u d ib le ]
m ake o u r
t h in g s
—
se n se
n a t u r a lly
in
t h e ir
w in n in g
t h is
o f d is c ip lin e
d is c ip lin e d ,
but I
17
mi
■
1
think we have rrsi [Inatidible]
in this country w / t
iLfaor
2
and management and the other sectors to have that discipline
5
[Inaudible].
4.
It's going to be a very.bloody battle in the next
5
few months in getting control of the inflation, but we feel
6
we have the technical.tools to do the job and decide the
7
question such that it will be possible.
8
agrees in one way or another that it will be effective —
9
[Inaudible] —
10
job.
I'm sure that everybody
the President will have to do, but that.is his
11
Wilbur Mills who led brilliantly the bipartisan
12
battle to get the spending ceiling through the House, and
13
it was voted by a very large margin,
14
he said I c a n ’t imagine why the President wants to undertake
15
this task, but i t ’s a good thing that he will because nobody
16
else will.
17
he s a i d t a i s
said on many occasions,
in '
And certainly the Congress can tackle the budget
18
piece by piece, and the President, of course, has to look at
19
it that way, but also thinking all the time at what these
20
pieces add up to, and I think now when he does that, as he
21
has been doing, he sees that whatever happens things are going
22
to be bloody and difficult-if things are going to be held under
23
control.
24
these kinds of decisions
25
has done, that maybe in a few years later
But I believe
[Inaudible]
[Inaudible]
and he is willing to make
and after all the President
[Inaudible].
18
W e ll,
hope
is
of
som e
th a t we a re
p e rh ap s
th a t
so
is
som e
[ In a u d ib le ]
in t e r e s t
to
you
fo rtu n a te
to
have
th a t p u t t in g
gre at
and r e la t e d
peace
e m p h a s is
in t e r n a t io n a l r e la t io n s , ,and th e
w it h
th e
o u t t r a d in g
p a rtn e rs,
and
to
fa ir ,
a p a tte rn
an d c o m p e t it io n
in
w h ic h
w h ic h
filM filfoibri l l JD á^
[T ap e r e c o r d in g
(A p p la u s e .)
w o rk
th e
d ir e c t s
th e
n o t io n /
[ In a u d ib le ] .
need to
I
C h in e s e
w ork
c o n s t r u c t iv e ly
w it h
su re
a gre e m e n ts
¡L
in v it in g
in a u d ib le
fro m
of
and o th e rs
w e 'r e
e c o h o m ic
t h in k
a sp e cts
c o n s t r u c t iv e ly
c o m p e t it io n
T h a n k y o u v e r y m uch f o r
e v e n in g —
to
o n e c o n o m ic
gre at
R u s s i a n s ,c.t h e - C o m m u n i s t - B l o c ,
th a t we h ave
m a t e r i a l than £
me h e re
t h is
t h is
p o in t .]
is
so
DepartmentoftheTREASÜRY
¡ASHINGTON, D C 20220 ■ |
TELEPHONE W04-2041
FOR RELEASE AT 12:00 NOON (CDT)
REMARKS OF THE HONORABLE PAUL A. VOLCKER
UNDER SECRETARY OF THE TREASURY FOR MONETARY AFFAIRS
AT THE ANNUAL MEETING
OF THE
MINNESOTA ECONOMIC ASSOCIATION
AT THE COLLEGE OF ST. THOMAS
ST. PAUL, MINNESOTA
FRIDAY, OCTOBER 27, 1972, AT 12:00 NOON (CDT)
INTERNATIONAL MONETARY REFORM:
A DISCUSSION OF THE RECENT U. S. PROPOSALS
Last month, at the Annual Meeting of the International
Monetary Fund, President Nixon and Secretary Shultz set
forth broad principles and more concrete ideas for reshaping
and modernizing the international monetary system.
The
timing of their remarks was not just an accident of a
meeting calendar„
More than a year had passed since the "events of
t
August 15" signaled the end of the Bretton Woods system, as
it had developed earlier in the postwar period.
The
intervening period had,been one of ferment -- sometimes in
exchange markets and more continuously in thinking.
S-71
2
But they could speak against the background of evident
progress toward the objectives of the New Economic Policy.
Our inflation had been reduced to a rate as low as any
among important industrialized countries.
had been speeded.
Economic growth
Together with the unprecedented exchange
rate alignment negotiated last December, these laid the
essential groundwork for urgently needed improvement in our
balance of payments and more international monetary
stability.
Meanwhile, a degree of needed flexibility had
been introduced into exchange rate practices through wider
margins.
Some of the groundwork had been laid for trade
negotiations, and agreement reached on a proper forum for
formal monetary negotiations.
But even more important as a setting for their remarks
and for the future of monetary reform has been the less
tangible evolution in attitudes and thinking over the past
year.
There is today general agreement and understanding
that a thorough revamping of our international monetary
system is necessary to meet the needs of this generation —
that tinkering with technical features would not be enough.
There is a fuller and sharper appreciation of an old lesson
3
of political economy —
if we are to live harmoniously
with our neighbors and share the gains from expanding
trade,
individual nations must seek their prosperity in
a context of prosperity for all.
There is broad agreement
that participation in an interdependent and open world
requires a willingness to develop, and adhere to, basic
rules of international conduct —
a general code of good
conduct to guide policy-making and day-to-day cooperation.
Moreover, I believe we can detect some areas of
convergence of thinking on more specific elements in a
new monetary order.
There is greater recognition, for
instance, that the problems of the adjustment process -the means by which imbalances in international payments
can be reduced and eliminated in timely fashion -- must
be dealt with more effectively than in the past.
There
is acceptance of the proposition that, to assist this
process, the exchange rate structure needs to be more
flexible than in the past.
The need for greater symmetry
in the responsibility for initiating adjustment policies
between deficit and surplus countries is more fully
recognized -- as is the need to leave considerable
-
4
-
flexibility to national governments in their choice among
specific adjustment instruments.
Finally, the need for a
broad consistency among our monetary and trading arrange
ments is better established, even though the specifics of
this interrelationship are still controversial and vague
in many m i n d s .
If these propositions sound self-evident and hardly
worth repeating to an audience of economists, from my
particular observation post they add up to a rather strik
ing change in political and negotiating attitudes -- in
the ’’atmospherics" that can be so important in the success
of negotiations.
There seems to me an eagerness to proceed,
not just in the abstract, but to deal in a realistic way
with some enormously difficult questions -- economic and
political -- that need to be resolved to square our monetary
and trading institutions and conduct with today's realities.
The United States initiative at the IMF meeting came
on the eve of the formal start of detailed and intensive
negotiations in the newly formed "Committee of 20."
The
designation and composition of a properly representative
and effective negotiating body, with a necessarily broad
5
mandate,
itself presented issues of importance and
controversy.
As those issues were resolved, and as both
national governments and the IMF, itself, began to identify
more clearly the substantive issues and to outline basic
elements in their thinking, we had the conditions necessary
for setting out more specific ideas in a comprehensive and
integrated way.
The President thought it important to do
so for, if the U. S. is to play its proper role in helping
to build a realistic and workable international monetary
system, our purposes must be clearly perceived and our ideas
fully understood»
We, as other governments, face a difficult problem in
this respect»
We are dealing with complex matters which
even an informed citizen can sort out only with difficulty.
Yet, it is not enough that we debate our ideas with
financial officials from other nations around a negotiating
table.
In the end, we are dealing with matters that affect
the prosperity of our own nation, the maintenance of a
stable world economic order, and political harmony.
National commitments will be involved, and legislative
support will be required.
-
6
-
I know you, as economists, have a particular interest
in the various reform issues.
We frankly look to you for
understanding and leadership in contributing to this
necessary international dialogue.
In formulating our own proposals, we have tried to
deal with the basic sources of instability and strain in
the monetary system that have become so evident in recent
years.
In the broadest sense, the repeated crises and
frictions reflect the fact that, for too long, the
monetary system, rather than promoting equilibrium,
tolerated disequilibrium.
As sweeping and fundamental
changes developed in the world economy, our monetary and
trading arrangements failed to keep pace.
For too long,
the resulting imbalances were covered over with expedient
measures -- the improvisation was often brilliant, but in
the end fundamental difficulties kept recurring in more
virulent form.
Many of the economic changes in the more than twentyfive years since Bretton Woods have been desirable in
themselves; but they have, nonetheless, eroded the
underlying premises of the system then established.
With
7
the resurgence of Europe and Japan, a monetary structure
which assumed and was based on a single predominant
currency -- the dollar -- became untenable.
The implicit
assumption that a dominant United States with immense
reserves and an impregnable competitive position could
play a relatively passive role in the adjustment process,
while in effect underwriting the stability of the system
as a whole, simply no longer fits the elementary facts of
the distribution of economic and political power in today’s
world.
From our point of view, the system seemed to permit
other countries, in seeking their own economic and payments
objectives, to achieve results that left the United States
with a more or less perpetual balance of payments deficit,
without adequate capacity to take action to correct that
deficit.
From the point of view of others, the same system
seemed to provide a special privilege for the U. S., free
ing us from normal pressures to adjust our balance of
payments.
From either point of view, the results were not
satisfactory -- practically continuous deficits for the
U. S. and practically continuous surpluses for Europe
8
and Japan in particular, ever greater foreign holdings of
dollars, pressures on our industry and competitive
position, and an increasingly speculative atmosphere.
Having said that much, we are still a long way from
agreeing on specific measures to achieve and maintain the
needed equilibrium in the system.
In developing our own
proposals to that end, we have endeavored to build from
certain principles that we believe command wide support.
Thus, the system must be, and must appear to be,
equitable, assuring that all nations are accorded fair and
comparable treatment under an internationally accepted set
of rules and principles.
The system should be symmetrical,
both in the sense of all nations having the same privileges
and the same obligations, and in the sense that pressures
for initiating adjustment to correct imbalances should be
evenhanded, whether those imbalances are in the form of
surpluses or deficits.
We have also sought to design a system which leaves
needed freedom of action for national governments.
health
The
of the whole requires that every country should
9
have strong incentives to adjust when its economy is out
of balance internationally, but there should be an
adequate and realistic range of choice in selecting
instruments and techniques of adjustment
compatible with national institutions, national circum
stances, and national objectives.
There is, in other
words, more than one path to righteousness.
Our specific ideas embodying those principles can be
listed under six major aspects of monetary reform.
First, the exchange rate regime.
Most nations have
made plain they want a fixed point of reference for the
external value of their currency -- a central or par value
-- and this value would be supported by convertibility of
their currencies into other internationally agreed assets.
We believe reasonably wide margins for fluctuation of
market exchange rates around such central values should be
permitted —
for the dollar as well as other currencies --
to dampen incentives for short-term capital flows and to
ease transitional rate changes.
Some countries -- for
example, developing countries wishing to maintain a particu
larly close relationship to a major trading partner or
10
nations in the process of forming a monetary union -- may
wish to maintain a narrower margin against certain
currencies and would be permitted to do so.
Conversely,
specific provision should be made for individual countries
choosing to "float" their currencies.
Rather than
considering such countries outside or beyond the law,
nations choosing to float, particularly for more than a
brief transitional period, should be required to observe
more stringent standards of behavior in other respects to
assure the consistency of their actions with the basic
requirements of a cooperative order.
These proposals WDuld provide greater symmetry, in that
the dollar would have the same technical possibilities for
flexibility as other currencies.
At the same time, they
would not impose unnecessary rigidity in practice, for
nations would be permitted certain options so long as their
actions are compatible with established standards of inter
national responsibility.
More broadly, the proposals are aimed at protecting
the stability of the entire system by providing a reason
able degree of flexibility in exchange rate practice.
The
11
search for a greater stability through flexibility may
sound like a contradiction in terms.
Indeed, it poses
extremely difficult practical issues, particularly in
developing criteria for when central values might change
-- a subject to which I will shortly return.
But we have
learned from experience that rigidity is not synonymous
with stability.
Rigid exchange rates, in the end, are not
consistent with the degree of freedom of action in
monetary, fiscal and other national policies which most
governments regard as necessary; they can breed large
imbalances and invite large speculative flows, unduly
large exchange rate adjustments and, thus, repeated monetary
disturbances.
A system of central or par values with convertibility
forces attention to a second range of issues concerning the
composition and volume of international reserves.
Con
sistent with much foreign thinking, the U. S. believes that
Special Drawing Rights should increase in importance,
should become the yardstick for measuring currency values,
and should be subject to periodic changes in amount to
meet the aggregate need for reserves.
We would neither
12
generally ban nor encourage foreign currency holdings,
but certainly they should not be required to play so
central a role in the operation of a new system.
Possibly
the new system could be assisted by provision for
exchanging part of existing reserve currency holdings, at
the option of the holders, into a special issue of SDR;
careful study will need to be given such proposals.
We, of course, continue to feel the role of gold will
continue to diminish, and orderly procedures can be
developed to facilitate that development.
The third -- and in many ways the most critical -area concerns the adjustment process.
Failure to achieve
prompt and effective adjustment has been a central defect
in the monetary system -- and an improved adjustment system
lies at the heart of the U. S. reform proposals.
Under Bretton Woods, or any system of convertibility
into reserve assets, there are more or less automatic
pressures on deficit countries to adjust —
those countries
ultimately become unable or unwilling to continue to
provide reserve assets to others.
But, in practice,
were no comparable pressures on surplus countries.
there
The
13
system was asymmetrical in an important respect.
Our approach to deal with the adjustment problem is
built on the assumption that currencies generally will be
convertible into reserve assets and, therefore, subject to
adjustment pressures from disporportionate loss of reserve
assets when in deficit.
Similarly, disproportionate
increases in reserves would become an objective indicator
of the need for surplus countries to adjust.
These swings
in reserves would, of course, reflect swings in balance of
payments positions.
Such a system would require agreed statistical criteria
for measuring reserves, and for appropriate benchmarks
against which to measure the need for adjustment action.
The aggregate supply of reserves, as determined in good part
by SDR allocation, will in turn need to be consistent with
the established adjustment criteria to assure the system
works evenhandedly, without bias toward deficit or surplus
countries.
Sufficient flexibility, possibly with the help of
supplementary indicators, would need to be built into the
application of the system to avoid reaction to false signals,
14
such as from unwarranted speculative movements 0
Moreover,
as indicated earlier, nations should be permitted
flexibility in how they respond to the need to adjust -whether a surplus country, for instance, reduces trade
barriers, increases aid, or appreciates its currency.
In
many instances, a deficit country might appropriately
choose to restrain a domestic inflation.
But, in the end,
the international community should insist on adjustment,
and that insistence will need to be reflected in some
adequate combination of inducements and penalties lest we
slip back into tolerating such prolonged imbalances that
the system falls apart.
Fourth, in presenting our proposals, we also have
given specific attention to capital and other balance of
payments controls.
The U. S. view is that for reasons of practicality,
as well as basic philosophy, freedom of trade and payments
should be encouraged and reliance on controls minimized.
Countries should not be required to use controls in lieu
of other more basic adjustment measures, and should not be
permitted, for example, to use capital controls to maintain
15
a chronically undervalued currency.
When trade controls
are permitted temporarily in extreme cases of balance of
payments difficulty, they should, in our view, be in the
form of surcharges or across-the-board taxes.
A fifth feature of our ideas is the relationship
between negotiations on monetary reform and related
negotiations in trade and other fields.
Our view has been,
and continues to be, that monetary, trade, and investment
activities must be viewed as parts of an integrated whole
-- and policies in each of these areas must be mutually
consistent and reinforcing.
Accordingly, we have taken the view that negotiations
about a new monetary system, now under way in the new
Committee of 20, must embrace not only explicitly monetary
rules but must also consider their compatibility with the
broad rules of the trading system and those covering
investment transactions.
A comprehensive reform of all
these interrelated aspects of the international economy is
essential if we are to develop a system in which adjustment
is brought about effectively and equitably, with a
liberalizing thrust.
Detailed trade negotiations over.
16
specific barriers, such as item-by-item changes in
tariffs and non-tariff barriers, as well as similar
negotiations in the investment field, cannot and will not,
of course, be dealt with effectively in the Committee of
20.
But the Committee can help support serious efforts
in other bodies to attack these specific problems; and, in
its own deliberations, it cannot shy away from assuring the
broad compatibility of our codes of conduct in the trade
and monetary area.
A sixth and final feature of Secretary Shul t z ’
presentation concerned the international institutional
arrangements which should accompany reform of the trade and
payments system.
Implicit in the proposals we have made is the need for
modification of the institutions which monitor the trade
and monetary rules.
With a new monetary structure, I would
envisage an even more critical role for the IMF.
Also, with
increased emphasis on the interrelationships between trade
and finance,
there is need for closer harmony in the rules
of the IMF and GATT, and a closer working relationship
between the two institutions.
Further, the sensitive issues
17
involved imply a greater need for intensive and continuous
involvement of national governments in the deliberations
of the international institutions, and those bodies must
more fully engage national representatives of stature and
influence in their own governments.
I would judge the initial response to the U. S. ideas
as encouraging.
Certainly, the straightforward effort to
present an integrated set of ideas has been welcomed as a
means of providing a new thrust to the negotiations and
moving the dialogue forward.
Nevertheless, we should not be misled into believing
that points of difference in approach -- in some cases,
major differences—
have already been resolved.
In
presenting our ideas, Secretary Shultz carefully took into
account the ideas and proposals of others and incorporated,
where he could, areas of consensus.
Therefore,
it is
hardly surprising that one element or another in his
remarks struck a responsive chord. On the other hand, I
would emphasize the ideas were presented as an integrated
package.
In our mind, one part is clearly dependent upon
another.
To put it plainly, the proposals should not be
18
considered as some kind of smorgasbord —
with the diner
entirely free to pick and choose among the items he
personally finds enticing.
Rather, we visualize our
proposals more in the tradition of a fine French chef,
carefully constructing a meal with one course leading to
another -- with the final satisfaction of the diner
dependent as much on the balance of the whole as on any
particular course.
Or, perhaps, as my mother used to
tell me as a child, I could enjoy the dessert only if I
also ate the liver —
because it was the liver that was
essential to a healthy growing boy.
Differences of approach, as well as controversy on
technicalities, should, of course, be expected.
Nations
have different traditions, different economic philosophies,
different circumstances and different experiences.
Contrasting views on how the international monetary system
should operate, viewed from these different vantage points,
are natural.
The challenge is to reconcile these differ
ences in a cohesive whole, serving to the maximum extent
possible the particular interests of each partner, so long
as those interests do not impinge upon the rights of others.
We hope that by the time of the IMF Meeting in
Nairobi next year we will find that agreement on the main
outlines of a new system can be accomplished.
To
achieve that result, you can anticipate intense and diffi
cult negotiations.
I would suggest that those negotiations deserve your
continuing interest and attention -- for the outcome will
be of great importance to the United States and to the
American economy.
Sometimes the point is made in this country that
foreign trade is a relatively picayune matter -- after all,
exports amount to less than 4 percent of our GNP.
suggest this is a misleading measure.
I would
$100 billion trade
-- in and out -- is hardly a picayune number, to say
nothing of the vast amount of investment, tourism, defense
expenditure, and other transactions across our boundaries.
We need to do no more than look out the window into our
streets, or walk through a department store, to see how
much trade affects our daily lives.
Nowhere is this more apparent than in Minneapolis» As
a center of trade in so elemental a commodity as grain and
20
as a manufacturer of so sophisticated a product as
computers -- which happen to be two of the nation's
largest export items —
its prosperity is closely tied to
these seemingly abstract and arid matters of monetary and
trade reform.
That is why we do not underestimate the urgency for
moving ahead to reach agreement -- not any agreement, but
an agreement that will serve our basic interests as well
as those of other nations.
The challenge before us all is
to reconcile those interests in a context of freer trade and
open international competition, supported by durable and
practical monetary arrangements.
I am confident that with
the informed support of the American people -- but only
with that support -- that goal will be reached.
# # # # # # # #
Department of
lASHINGTON, DC 20220
theTREASURY
TELEPHONE W04-2041
FOR R E L E A S E A T A M S T E R D A M A T 1 0 :3 0
4 :3 0 A .M . (E S T )
A .M .
R E M A R K S O F W IL L IA M C . C A T E S
D E P U T Y A S S IS T A N T S E C R E T A R Y O F T H E U . S . T R E A S U R Y D E P A R T M E N T
F O R IN D U S T R IA L N A T IO N S F IN A N C E
AT
T H E T R A N S -W O R L D IN V E S T M E N T S E M IN A R
AT THE GRAND HO TEL K R A SN A P O LSK Y , AM STERDAM , THE N ETH ERLAN DS
MONDAY, OCTOBER 30, 1972
T H E IM P A C T O F T H E C U R R E N C Y C R I S I S
W hen th e
fo r a sp e e c h ,
In v e s t m e n t D e a le r s
th e m o u th s o f
w a te re d a t th e
5 co m p u te rs,
cu rre n cy
p ro d u ce
g u id a n c e
c h a lle n g e :
we c o u ld
c r is e s
w it h
D i g e s t g a v e me t h i s
w it h
a fe w h u n d r e d m a n -h o u r s
a ffe c te d
c o r r e la t e
s e c u r it ie s
a ll
not be v e ry
But I
su s p e c t th e
illu m in a t in g .
r e s u lt s
re co rd e d
m a rk e ts
a b e a u t i f u l new e c o n o m e t r ic m o d e l w it h
sy ste m .
t it le
so m e o f o u r e c o n o m e t r ic ia n s
u n d o u b t e d ly
a ll
ON S E C U R IT IE S M A R K E T S
and
p ast
and
b u ilt -in
w o u ld
a fte r
a ll
2
O ne p r o b le m
is
w hen d id
an d w hen d id
it
end?
n o r c o n fin e d
to
one
a s id e
to
It
IM F m e e t in g
p ic k in g
a m o n th a g o
le a v in g
th e p e r io d
as
c r is is "
sta rt
h a s n o t b e e n c o n t in u o u s ,
But
m a rk e ts o f a num ber o f co n ce rn e d
as
"c u rre n c y
c e r t a in ly
cu rre n cy.
and a r b it r a r ily
th e
th e
th e se
fro m
a s a m p le ,
q u e s t io n s
A u gu st 5,
th e
1971
sto ck
c o u n t r ie s h a v e p e rfo rm e d
f o llo w s :
Tokyo
+ 44%
A m ste rd a m
+21%
New Y o r k
+ 10%
F ra n k fu rt
+14%
London
+ 19%
Z u r ic h
+ 15%
E u r o -d o lla r
is s u e s
a m o u n te d t o
r o u g h ly
sam e p e r io d
in
w e re up
$ 2 .5
1971.
fir s t
b illio n ,
n in e
m o n th s o f
60 p e r c e n t a b o v e
in
1972
th e
o th e r c u r r e n c ie s
70 p e r c e n t .
o th e r th a n
to
th e
E u r o -is s u e s
W hat can one deduce
a b le
in
fro m
th a t s e c u r it ie s
re co ve r
fro m
a ll
o f t h is ?
m a rk e ts h ave
cu rre n cy
jit t e r s
V e ry
lit t le ,
a p p a r e n t ly b e e n
and go on t h e ir
m e rry w ay.
B u t th e re
n a tu re ,
and i t
m y s e lf to d a y .
are
is
in d ir e c t
th e se
S in c e
e ffe c ts
t o w h ic h
e a r ly
I
of
a f a r m ore
w o u ld
1971, w hen th e
lik e
to
s e r io u s
ad d re ss
cu rre n cy
c r is is
3
r e a lly
of
began,
16 o u t o f t h e
th e O r g a n iz a t io n
fo r
E c o n o m ic C o o p e r a t io n
D e v e lo p m e n t h a v e e i t h e r
a ffe c t in g
d e s ig n e d
o f sh o rt-te rm
is
th ro w n o u t w it h
have
th e
a heavy sta k e
a p p a re n t:
u n d e r w h ic h
tra d e
th e m id d le
m a r a u d in g
u lt im a t e ly
age s,
"s p e c u la t o r s ,"
e x te n d
to
is
in t e n t io n s
o r o t h e r w is e ,
a ll
in v e s t m e n t b a b y w i l l b e
b a th w a te r.
is
your baby,
g o in g
th e
r e in fo r c e
and b lo c s
e r e c t in g
A d o lla r
W h e th e r i t
on in
you
th e
a w o r ld
of
are
o f r u le s
c o n t in u e
to w a rd
o f n a t io n s ,
exch ange b a r r ie r s
b a r r ie r s w h o se
a l l h e re
fie ld
a lt e r n a t iv e s
a n d c a p i t a l m o v e m e n ts c a n
n a t io n s
o u t flo w
The d a n ge r in
f o r hum an b e tte r m e n t o r d o we d r i f t
o f a n a r c h y , w it h
in
to
th e se
o f d e t e r m in in g
h o n o r a b le
A n a ly t ic a lly ,
d o we m ove
o r th e
d e p e n d s on th e
s p e c u la t iv e
w hat is
in flo w
fa th o m .
t h a t th e
in
m ost c a se s
a g u ild e r .
in v e s tm e n t b a b y
m o n e ta ry re fo rm .
w o rk
is
to
In
n o t an e a sy one.
o r g u ild e r
d iffic u lt
m e asu re s
th e
is
and
o r t ig h t e n e d m e a su re s
p r o b le m
and in t e n t io n s ,
n o t o r io u s ly
S in c e
th e
c a p it a l i s
d o lla r
o f th e h o ld e r ,
cu rb
b u t th e
and a g u ild e r
a sh o rt-te rm
o f th e se
to
c a p it a l,
sh o rt-te rm
a d o lla r
are
in s t it u t e d
th e m ovem ent o f c a p it a l.
m e asu re s a re
w hat is
23 n a t io n s w ho a r e m e m b ers
lo g ic
t h e ir
a w o r ld
lik e
to w n s
a g a in s t
w ill
th e m o ve m e n t o f g o o d s a n d p e o p le .
4
A t th e
la s t
IM F m e e t in g ,
S h u lt z
p re se n te d
to
a gro u n d w o rk
la y
The h e a rt o f
a s e r ie s
th e se
fo r
to
d e fic it s
can
of
co n ce rn s
a b it
of
r e m a in
in
and
so
r e a s o n a b le
f ir m ly
th a t
fo r
c r e a t io n ,
re se rve
fo r
fu n d in g
a sse ts
w ill have
or
la s t in g
r e a s o n a b le
m e a n in g ;
e q u ilib r iu m
w i l l becom e p o s s ib le ,
and
th e
The
in
fre q u e n c y
and t r a d in g
p r o b a b ly
s h o u ld
in c r e a s e d
fo r
t h is
p ro gre ss
e x c e s s iv e
as
a w h o le
W it h o u t a
o r u se
o u t s t a n d in g
of
p ro sp e ct of
co n tro l o f
can
no
re se rve s
th e
fa ll
s p e c u la t iv e
and
in
s e v e r it y
re se rve s
in t o
p la c e ,
c a p it a l
n o t w ant to
th e
flo w s
in
s o p h is t ic a t io n
cu rre n cy
w o u ld e n t a i l r o l l i n g
th e
c lo c k
o f tra d e ,
and
c a p it a l
t e c h n o lo g y
of
and
a m onkey w re n ch
o f th e
th e
th e w o r ld 's
We c a n n o t e x p e c t ,
th ro w
cu rre n cy
s o p h is t ic a t io n
im b a la n c e s
sy ste m .
of
re c e n t y e a r s , are
ever gre a te r
a n d g r o w in g
m o n e ta ry
th e
a v o id
r e g u la t io n
c o n v e r t ib ilit y
tw o t r e n d s :
c u rre n c y m a rk e ts
s im p ly
d im in is h e d .
in c r e a s in g
of
s o -c a lle d
sy ste m
sy ste m ,
c r i s e s w h ic h we h a v e w it n e s s e d
r e s u lt s
sy ste m .
w h ic h
once we h ave
th e
d e s ig n e d
a d ju stm e n t p r o c e s s ,
of
d an ge r o f d e s t a b iliz in g
w i ll be g r e a t ly
can
e q u ilib r iu m .
t e c h n ic a l sch e m e s
id e a s
th e
ja rg o n
th e
fu n c t io n in g
T re asu ry
th e m o n e ta ry
th e m eans w h ere b y n a t io n s
o r s u r p lu s e s ,
s m o o t h ly
re fo rm
—
o f th e
in t e r r e la t e d
p r o p o s a ls
"a d ju stm e n t p r o c e s s "
re fe rs
of
Se cre ta ry
back
in t o
m a rk e ts,
on
th e
in t e g r a t io n
5
o v e r th e
p a st q u a rte r c e n tu ry .
exchange
c o n t r o ls ;
to o
o fte n ,
sy m p to m s t h e y u n d e r m in e
In s t e a d
w hen t h e r e
To t r e a t
th e
th e
s u s p ic io n s
d is e a s e
in
b a s ic
we m u st r e c o g n iz e
are
That is
th e
an e ff o r t
to
h e a lt h
th e
of
we m u st m ove to
c re a te
re m o ve s
th e
on d is e q u ilib r iu m .
The
to
to
o f a d ju stm e n t,
e q u ilib r iu m
d is c u s s
is
th e
a d ju stm e n t p r o c e s s ,
to d a y u n der th re e
th e m o r a lit y
of
d is e q u ilib r iu m .
and th u s
o r n e c e s s it y
I w o u ld l i k e
c a p it a l m oves
sy ste m
te m p t a t io n
s p e c u la t e
th e
a c r e d ib le
o f e q u ilib r iu m
—
of
p a t ie n t .
o f s u b s t a n t ia l u n c o rre c te d
t h e m a in t e n a n c e
m eans o f m a in t a in in g
tre a t
th a t s p e c u la tiv e
w h ic h e n s u r e s
—
s ig n ific a n c e
h e a d in g s :
a d ju stm e n t and th e
th e
w h ic h
m e th o d s
com m on s e n s e
o f a d ju stm e n t.
M e th o d s o f A d ju s tm e n t
A c o u n t r y w h ic h
re sp o n se s
in
and d ir e c t
d is c ip lin e ,
th e
tra d e
tra d e
in
appeal o f e x p o rt m a rk e ts
su ch a p o lic y
is
:
im p o r ts
is
enhanced.
to
a lo n e .
of
d o m e s t ic
to
d e v a lu a t io n ,
in t e r n a l
e c o n o m ic
a c t iv it y
c u r t a ile d
In
p o s s ib le
th e se ,
and th e
to
But if
t h is
th e b y -p ro d u c t o f
d o m e s t ic
adopt it
th e
r e la t iv e
som e c ir c u m s t a n c e s ,
b e u n a c c e p t a b le
fe w m o d e r n g o v e r n m e n t s w i l l d a r e
p a y m e n ts r e a s o n s
fir s t
d o cto r o rd e re d .
lik e ly
th re e
"in t e r n a l d is c ip lin e , "
The
r e s t r ic t
dem and fo r
m ay b e j u s t w h a t t h e
d e f ic it h as b a s ic a lly
are a
m e asu re s.
m eans to
p o in t t h a t th e
is
u n e m p lo y m e n t,
fo r b a la n c e - o f-
6
Devaluation, the second possible approach, has, in practice,
usually been the end product of persistent deficit.
For small
countries, devaluation can be a rather flexible tool, but the
larger the impact of a given country on world trade the harder
it is likely to be for that country to devalue effectively.
This
is because other countries will tend to allow their currencies
to devalue along with that of a country with whom they have
substantial trading relations.
The third conceivable method of eliminating a deficit is
wantonly
trade restriction.
Too often/practiced, trade restriction is
universally regarded as a hostile act.
Its justification should
be extraordinary circumstances, and its use confined to temporary
periods.
The cleanest —
and least used —
form of trade
restriction is a uniform import surcharge and export subsidy.
is important to emphasize,
It
in view of the emotional opposition
that the U.S. temporary import surcharge of August 1971 evoked
in some areas, that uniform import surcharges and export subsidies
have the same effect on the trade account and therefore on a
nation's trading partners, as does a devaluation in the same
amount.
Indeed, to recapitulate,
any of the three methods of balance-
of-payments adjustment described above will have the effect on
a nation's trading partners of shrinking the market for their
exports and exposing them to more intense competition from
imports.
%H
7
A fourth method of adjustment is to try to affect the
capital account, by encouraging investment inflows or by
restricting capital outflows.
While artificial incentives
should be avoided, measures which promote sound investment
inflows are all to the good; but restriction of capital out
flows, sometimes perhaps a useful temporary action, too often
degenerates into permanent exchange controls which delay and
hinder the very process of adjustment.
The means available to surplus countries to eliminate
their surpluses are the converse of those described for
deficit countries.
A surplus country can deliberately inflate
its domestic economy so as to raise the demand for imports
and increase prices of its exports.
It can revalue.
It can —
and this is the measure which provides the greatest benefit
to the greatest number —
reduce barriers to imports.
Finally,
it can deliberately increase its aid and investment outflow.
In a nutshell, as Secretary Shultz pointed out,
"we can and
should leave considerable flexibility to national governments
in their choice among adjustment instruments."
The important thing to remember in all this is that one
country's deficit is another's surplus.
Therefore the net
result of measures that effect trade flows will be the same for
all concerned whether action is taken by deficit countries to
eliminate their deficits or by surplus countries to eliminate
their surpluses.
8
The Morality of Adjustment
It is popularly believed that surpluses are a token
of virtue, a belief stemming from the analogy between a
nation
and a household.
are money in the bank.
Surpluses are savings;
reserves
Thrifty nations, which successfully
control the evil of inflation, gain the reward of a balanceof-payments surplus.
Of course, by maintaining artificially low parities
for their currencies, countries can gain the same trappings
of virtue through the back door.
This particular "virtue"
obviously cannot be attained without the existence of sinners
on the other side.
But even those who regard surpluses as the visible token
of economic virtue must grant that after a certain point they
are a rather costly form of conspicuous non-consumption.
A frequently heard complaint these days is that surplus
countries should not be the ones to take any action, least of
all to revalue their currencies, as this would be meting out
"punishment" to the virtuous and successful.
What punishment?
In all societies throughout recorded history, there has
existed a relatively simple mechanism whereby the hard working
or productive can be rewarded:
they get paid more.
When it comes to nations, the hard working, thrifty and
disciplined should logically expect to get a higher price for
/
9
their output and pay less for their inputs —
a natural
consequence of revaluation and also, in part, the
consequence of reducing barriers to imports.
some argue that such a pay raise —
improvement in the terms of trade —
Why then do
otherwise called
is some sort of
punishment?
You may object that revaluation of a currency cuts
the profit margins of that country's export industry.
what has been going on prior to the revaluation?
But
Prices
have been going up in the rest of the profligate world
whilst our virtuous surplus country has kept its own inflation
under control and profit margins in its export industries
have been rising.
The effect of a revaluation is therefore
to avoid concentrating all of the fruits of the surplus
country's virtue in improved profit margins of its export
industries —
distributing, through better terms of trade
and cheaper imports, the benefits of their stoic virtue to
all of the people in the surplus country.
Is this punishment?
Admittedly, if exchange rate adjustments are long delayed,
too many resources will be drawn into the export trade of a
surplus country and the consequent adjustment will be painful.
g
This is the real evil we should work to avoid.
So much for the morality of adjustment:
it makes good
sense both domestically and internationally to distribute the
rewards of anti-inflationary virtue to all of the people via
improving terms of trade, rather than rewarding only the
export
sectors
while accumulating unnecessary reserves
as a useless success symbol.
The Common Sense of Adjustment
When things get out of whack, on whom should the "burden"
of adjustment fall?
We have already seen that for practical
purposes the shift in trade is approximately the same whether
the adjustment action is taken by the surplus or the deficit
country.
However, it is argued that no government wants to
have to take the overt political act of adjustment either by
devaluation or by revaluation.
of common sense must prevail:
Here, I would submit, a rule
If 100 nations are in slight
surplus and one nation in enormous deficit, that one nation
should do the adjusting.
If 100 nations are in slight deficit
and one nation in enormous surplus, it is up to the one surplus
nation to act.
Theoretically, of course, the 100 deficit
nations can devalue while the surplus country does nothing.
But that means that 100 governments, with 100 parliaments,
are obliged to act;
surely a more cumbersome process.
Furthermore, the country in surplus has a variety of
adjustment means at its disposal.
If it takes the necessary
action itself, it can tailor the repercussions of adjustment
11
on its own economy.
If, for example, a surplus nation
maintains elaborate import controls and performs below the
norm with respect to untied aid, the government of that
country can use a mix of import liberalization and increased
aid in order to help achieve its objective.
But if the
one surplus country in our example remains passive whilst
all the remaining 100 nations devalue, the net effect will
be concentrated on the exchange rate and therefore on the
surplus country*s exporting industries.
Indeed, I would like to venture a note of cautious
optimism regarding the relationship of the adjustment process
to the liberalization of trade.
If each country has a clear
and unequivocal responsibility to avoid undue surpluses or
deficits, the cost of trade restrictions, at least for
surplus countries, will become doubly apparent.
One very
heartening example of this is Japan whose Government recently
announced steps, which include unilateral tariff reductions,
to reduce that country*s balance-of-payments surplus.
Capital Controls
I think that, as investors, most of you in this room
would not advocate the use of selective exchange controls to
achieve adjustment.
Exchange controls adversely effect the
breadth and depth of securities markets, and in the long run
12
they lead to inefficiency in the allocation of national
resources, and thereby reduce the effective yield on
savings and distort trade«
Even if reluctantly, many nations have of late
increasingly accepted exchange controls as a way of
protecting their external positions«
However much one
can sympathize with situations and actions of individual
countries, we must all recognize the danger of adopting
controls as a way of life«
Exchange controls tend to
aggravate the disease they were intended to cure.
If
controls on capital flows become the means to maintain
a chronically undervalued--or overvalued--currency, they
will perpetuate the disequilibrium in the system«
This
in turn, reinforces pressures for flows of speculative
capital requiring continuation and elaboration of
controls--a monetary Parkinson*s law, welcomed by no one«
The answer lies in collective action to achieve and
maintain, in Secretary Shultz’s words, "a monetary and
trading environment in which all nations can prosper and
profit from the flows of goods,
among us«M
services and investment
No nation is an economic island any more,
and insular fortifications will not suffice«
13 -
As representatives of the investment community you
are accustomed to looking to the future«
I am convinced
that your influence will be crucial in the months and
years ahead in pointing out that human progress depends
upon rededicating ourselves to the goal of world-wide
freedom for trade and investment in a climate of
monetary equilibrium and stability«
0O0
FOR IMMEDIATE RELEASE
October 30, 1972
Teamsters Union President Frank Fitzsimmons formally
informed Treasury Secretary George P. Shultz and Labor
Secretary James Hodgson that $85,000 had been given to
the Government today from the Estate of William Meitz, a
St. Louis Teamster Union member, who willed his entire
estate to the U.S. Government.
Mr. Meitz, a bachelor, was 81 when he died on January 3,
1972. He had worked as a driver for 37 years with the firm of
Beck and Corbitt in St. Louis. During his lifetime, he was
a member of Teamsters Joint Council 13 and Local 610.
Mr. Meitz*s will read that *’my estate of whatever kind
and character and wherever situated, I give and bequest to
the Government of the U.S. to be used by said Government
in any manner that it may see fit.'*
Secretary Hodgson remarked that "This is a real example
of the industriousness, thrift and success of the modern
American working man. Mr. Meitz's bequest is a true symbol
of the working man*s love of country."
Secretary Shultz noted that Mr. Meitz, a World War I
veteran, had accumulated his money by investing in U.S. Savings
Bonds, an indication of his many years of devotion to his
country.
Shultz said "It is the contributions, both in spirit
and savings, of millions of hard working union men and women
and other citizens such as Mr . Meitz that provide the real
muscle and strength of the U.S.'3
Fitzsimmons said that through his act, Mr. Meitz had
demonstrated the "patriotism and faith in Government of
Teamsters and Union members in general."
Mr. Fitzsimmons made the announcement on behalf of
Mr. Meitz's attorney H. Lloyd Kelley III of St. Louis, who
said that the special recognition of Mr. Meitz's bequest was
a "fitting tribute to the memory of this man who had worked
hard and lived simply all his life."
|
DepartmentoflheJR[ASURY
------ I^
n n fi
ISHINGTON.
D Cn. 20220
[ENTION:
-
TELEPHONE W04-2041 4
FINANCIAL EDITOR
October 30, 1972
RELEASE 6:30 P.M.,
RESULTS OF TREASURY’S
WEEKLY BILL OFFERING
The Treasury Department announced that the tenders for two series of Treasury
one series to be an additional issue of the bills dated
August 3, 1972
. and
le other series to be dated November 2, 1972
, which were invited on
October 24, 1972,
[reopened at the Federal Reserve Banks today. Tenders were invited for $ 2,400,000,000,
1 8 2 -day
Ithereabouts, of 91-day bills and for $ 1,900,000,000, or thereabouts, of
Lis. The details of the two series axe as follows:
ls ,
OF ACCEPTED
PETITIVE BIDS:
High
Low
Average
91-day Treasury bills
maturing February 1, 1973
Approx. Equiv.
Annual Rate
Price
98.802
98.789
98.795
4.739/
4.79l/o
4.767/
1/
182- day Treasury bills
maturing May 5, 1975
Approx. Equiv.
Annual Rate
Price
97.410
97.393
97.401
a/
5.123$
5.157/o
5.14l/o
1/
a/ Excepting one tender of $800,000
19/ of the amount of 91-day bills bid for at the low price was accepted
29/oof the amount of 182-day bills bid for at the low price was accepted
PAL TENDERS APPLIED FOR AND ACCEPTED BY FEDERAL RESERVE DISTRICTS:
district
poston
(few York
Philadelphia
leveland
Richmond
Atlanta
Chicago
ft. Louis’
Minneapolis
^nsas City
Nias
kn Francisco
TOTALS
Accepted
Applied For
16,54=5,000
$
32,355,000 $
1,963,570,000
3,163,480,000
11,325,000
51,325,000
20,630,000
20,875,000
22,125,000
52,795,000
12,430,000
20,240,000
152,040,000
341,070,000
34,445,000
41,445,000
18,195,000
35,115,000
18,020,000
38,230,000
13,335,000
42,575,000
117,430,000
196,100,000
$4,035,605,000
$2,400,090,000 b/
Applied For
$
18,555,000
3,020,465,000
24,790,000
72,370,000
49,910,000
16,125,000
391,110,000
32,670,000
31,305,000
22,600,000
31,555,000
151,445,000
Accepted
$
3,555,000
1,673,935,000
4,690,000
23,820,000
15,410,000
10,125,000
114,210,000
17,705,000
9,305,000
11,065,000
8,305,000
8,345,000
$3,862,900,000
$1,900,470,000 c/
deludes $176,750,000 noncompetitive tenders accepted at the average price of 98.795
deludes $ 90,255,000 noncompetitive tenders accepted at the average price of 97.401
^ese rates are on a bank discount basis. The equivalent coupon issue yields are
*•89# for the 91-day bills, and 5.35/ for the 182-day bills.
The Treasury Department, by this public notice, invites tenders for two series
of Treasury bills to the aggregate amount of $4,300,000,000, or thereabouts, for
cash and in exchange for Treasury bills maturing
of $4,099,425,000
November 9, 1972, in the amount
as follows:
91-day bills (to maturity date) to be issued November 9, 1972,
in the amount
of $2,400,000,000, or thereabouts, representing an additional amount of bills
dated August 10, 1972,
and to mature
February 8, 1973
originally issued in the amount of $1,800,830,000,
(CUSIP No. 912793 QJE9),
the additional and original
bills to be freely interchangeable.
182-day bills, for $1,900,000,000, or thereabouts, to be dated November 9, 1972,
and. to mature
May 10, 1973
(CUSIP No. 912793 QT6 ).
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 $10,000, $15,000, $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 clos
ing hour, one-thirty p.m., Eastern Standard time, Monday, November 6, 1972.
Tenders will not be received at the Treasury'Department, Washington.
mast be for a minimum of $10,000.
$5,000.
Each tender
Tenders over $10,000 must be in multiples of
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.
may not be used.
Fractions
It is urged that tenders be.made on the printed forms and for
warded in the special envelopes which will be supplied by Federal Reserve Banks
°n 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.
2-
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.
Only those
submitting competitive 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 each
issue for $200,000 or less without stated price from any one bidder will be accepte
in full at the average price (in three decimals) of accepted competitive bids for
the respective issues.
Settlement for accepted tenders in accordance with the
bids must be made or completed at the Federal Reserve Bank on November 9, 1972,
in cash or other immediately available funds or in a like face amount of Treasury
bills maturing November 9, 1972.
treatment.
Cash and exchange tenders will receive equal
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.
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 considered to accrue
when the bills are sold, redeemed or otherwise disposed of, and the bills are ex
cluded from consideration as capital assets.
Accordingly, the owner of Treasury
bills (other than life insurance companies) issued hereunder must include in his
income tax return, as ordinary gain or loss, the difference between the price paidfor the 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.
Treasury Department Circular No. 418 (current revision) and this notice,
prescribe the terms of the Treasury bills and govern the conditions of their i^sue.
Copies of the circular may be obtained from any Federal Reserve Bank or Branch.
ATTENTION: FINANCIAL EDITOR
FOR RELEASE AT 6:30 P.M.
November 1, 1972
RESULTS OF TREASURY NOTE AUCTION
The Treasury announced that it has accepted $3.0 billion of the $7.1
billion of tenders received for its new 6-1/4$ 4-year notes auctioned
today. The range of accepted competitive bids was as follows:
Price
Approximate Yield
High
100.31 ^
6.16$
Low
100.14
6.21$
Average
100.18
6.20$
l/Excepting four tenders totalling $415,000
The $3.0 billion of accepted tenders includes 92$ of the amount of notes
bid for at the low price, and $0.5 billion of noncompetitive tenders accepted
at the average price.
DepartmentoftheTREASlffllf jfj
Wa s h in g t o n , d .c . 2 0 2 2 0
.
telephone w m
,204 ì
November 2, 1972
FOR IMMEDIATE RELEASE
TREASURY DEPARTMENT AMENDS COUNTERVAILING DUTY
PROCEEDING NOTICE ON
CARBON STEEL PLATES AND HIGH-STRENGTH STEEL PLATES
FROM MEXICO
The Treasury Department announced today the
amendment of the "Notice of Countervailing Duty
Proceedings" published in the Federal Register of
October 4, 1972, with respect to carbon steel plates
and high-strength steel plates from Mexico.
The amendment, which will be published in the
Federal Register, on November 3, 1972, extends the time
for submission of written views concerning the
existence or nonexistence of a bounty or grant from
30 to 45 days.
Accordingly, submissions must be
received by the Commissioner of Customs no later than
November 18, 1972.
# # #
e PeparmntoltheTRE/lSURYlJ
WÖ4-204T ’
m x û à LD.C,
" * 20220
SHIN6T0N.
[
for RELEASE AT 11:30 A.M.
STATEMENT OF THE HONORABLE EUGENE T. ROSSIDES1
ASSISTANT SECRETARY OF THE TREASURY
(ENFORCEMENT, TARIFF AND TRADE AFFAIRS, AND OPERATIONS)
ATLANTA, GEORGIA
lovember 2, 1972
11:30 A.M,
PRESIDENT NIXON'S ANTI-NARCOTICS PROGRAM
IS SUCCEEDING
SIXTEEN-MONTH REPORT OF THE
TREASURY/1RS NARCOTICS TRAFFICKER PROGRAM
1,107 MAJOR TARGETS
1,082 MINOR TRAFFICKERS
Treasury's IRS Narcotics Trafficker Program
now has 1,107 major targets under tax investigation.
96 targets were selected in October to bring the
16-month total to this new level.
In addition, 1,082
minor traffickers are under tax action.
On behalf of the Treasury Department, I
congratulate the Atlanta Police Department for their
tremendous assistance to the Treasury/IRS program.
Three-quarters of the 29 major targets in Atlanta
were referred to us by the Atlanta Police Department,
and all of the 35 minor traffickers.
I'm also pleased to be here with U.S. Attorney
John Stokes who has given the program tremendous
support, resulting in four of these targets being
indicted.
The President's action program has reduced the
supply of heroin in the United States.
The tax drive against drug traffickers is taking
the profit out of the heroin traffic and is contribu
ting substantially to the total effort which has
reduced the supply of heroin throughout the nation.
172
2
Evidence of the heroin shortage is mostly
in cities which have historically been supplied
by European sources.
The existence of the shortage
is known through intelligence information from
informants and traffickers as well as by such
other criteria:
1. Limited availability of heroin in
wholesale quantities.
2. A general decrease in both weight and
purity coupled with an increase in price at the
wholesale level.
3. A notable increase in the number of
addicts seeking treatment.
4. A decrease in the number of reported heroin
overdoses, reflecting reduced purity at the retail
level.
5. An increase in frequency of theft of heroin
substitutes from legitimate drug distributors.
6.
The establishment of an increasing pattern
showing East Coast traffickers attempting to establish
new sources of supply in Western cities for Mexican
and Asian heroin to replace the diminishing supply of
European heroin.
President Nixon's anti-narcotics drive is
succeeding.
The President's action program:
1. has turned the tide in the war against
drug traffickers.
2.
has galvanized the nations of the world
into action.
More has been done on the inter
national front in the last three and one-half years
than in the previous 35.
3
3.
has brought unprecedented pressure on the
drug distribution system.
We have the drug traffickers taking steps
backward and must now redouble the pressure on them.
Today, I am going to highlight the Treasury/IRS
Narcotics Trafficker Program.
1,107 Major Targets and 1,082 Other Traffickers
In 45 states, 74 metropolitan areas and the
District of Columbia, 1,107 targets have been
selected by Treasury's Target Selection Committee
and referred to the IRS for intensive tax investi
gation (see attached Table I). Under the direction
of IRS Commissioner Johnnie M. Walters,494 Treasury
Agents and 112 support personnel are presently
conducting these investigations.
The Congress has passed a supplemental
appropriation of $4.5 million which will increase
the number of agents to 648.
In addition, 1,082 other traffickers are under
tax action.
$77.1 Million Assessed--$13.2 Million Collected
$77.1 million in taxes and penalties have
been assessed under the program, of which more
than $13.2 million have already been collected.
We are now using the drug traffickers illegal
profits to put them out of business (see attached
tables).
- 4 -
18 Convictions + 40 Indictments + 56 Prosecution
Recommendations = 114
___
_______________
Eighteen men have been convicted on criminal
tax charges; 40 other criminal tax cases are
pending in Federal District Courts in Atlanta,
Miami, Detroit, Los Angeles, San Francisco,
Seattle, Boston, Indianapolis, Baltimore, and
Washington, D. C . , and in other areas; and another
50 investigations have been completed with prosecu
tion recommendations (see attached tables).
During October alone, we achieved the following
results:
The program expanded to two new states-Iowa and Kansas--and five new metropolitan
areas--Des Moines, Iowa; Lawrence, Kansas;
Orlando, Florida; and Toledo and Columbus,
Ohio.
96 new major targets selected; $7.8
million in taxes and penalties assessed, of
which $1.5 million were collected; 3 convic
tions, 10 indictments, of which 4 were in
Atlanta, and 18 cases recommended for
prosecution.
In addition, 171 minor targets
were placed under tax action.
We believe that this represents a tremendous
achievement.
By focusing attention on the persons
responsible for the narcotics distribution, this
program is making a major contribution to the
President’s war against drug abuse.
Get Out of the Illegal Drug Traffic or
Face Up to Intensive Tax Investigation
The word for the drug traffickers is to get
out of the illegal drug traffic or face up to
intensive tax investigation.
This word should be
spread in every city and town in the United States.
We have institutionalized this program.
Everyone
in this illegal business should realize that he
will be subjected to tough tax scrutiny.
The program*s objectives--to take the profit and
capital out of the illegal traffic in narcotics and
thereby further disrupt the traffic--are accomplished
in two w a y s :
1. Major targets: by conducting systematic
tax investigations of middle and upper echelon
narcotics traffickers, smugglers, and financiers.
These are the people who frequently are insulated by
intermediaries from the daily operations of the drug
traffic.
2 0 Minor targets: by systematic seizure of the
substantial amounts of cash frequently found on
arrested minor narcotics traffickers, those below
the middle and upper echelon level.
These sums are
then applied to taxes and penalties owed to IRS.
Although all of the penalties and taxes that
have been assessed may not be collected, the impact
of this program on the narcotics traffic is already
severe and increasing each month.
Essential Cooperation of State and Local Police
Treasury has coordinated this tax program with
state and local police, whose more than 350,000
officers constitute the first line of defense against
the internal traffic in narcotics. The cooperation
of state and local police in identifying key
traffickers, in furnishing intelligence information
on them and, in several cases, in actually working
with our agents on some phases of the investigations,
has been an invaluable contribution to this program.
The police here, as in all parts of the country,
have also been of, great assistance to our program by
contacting IRS whenever they have made arrests or
6
searches, where they have found substantial cash or
other assets in the possession of persons involved
in the drug traffic.
In this manner, we have been
able to remove considerable sums of cash from the
drug traffic by applying it to taxes and penalties
owing.
This aspect of our program could not be
effective without the assistance of the local police.
Close Coordination with Other Federal Agencies
We have also coordinated this tax program with
the anti-smuggling drive of our Bureau of Customs,
the drive against narcotics distribution of the
Bureau of Narcotics and Dangerous Drugs, and the
prosecution efforts of the Tax and Criminal Divisions
of the Department of Justice.
Their cooperation is
essential to the success of the program.
In summary, we are doing the job better and
faster but we are still not satisfied.
This is not
the time to be over-optimistic.
Much more needs to
be done in the war on narcotics.
The Treasury/IRS Narcotics Trafficker Program
is a major enforcement effort, but it must be
emphasized that it is only one part of this Adminis
tration’s comprehensive drive against the supply
of narcotics and the demand for narcotics.
7
President Nixon started his war on drugs the
first month of his Administration when he established
the Interdepartmental Task Force on Narcotics,
Marijuana and Dangerous Drugs that led to Operation
Intercept in September, 1969, and Operation Coopera
tion in October, 1969.
He has escalated that war
with a series of action programs against the supply
of narcotics and the demand for narcotics.
First, he elevated the drug problem to the
foreign policy level and has taken personal
initiatives in soliciting the cooperation of other
governments.
The aim of our diplomatic efforts is
to have each nation do its share and meet its
responsibilities in the worldwide war against drug
abuse.
These U.S. initiatives have already produced
some tremendous accomplishments by other countries.
France, under former U.S. Ambassador Arthur K. Watson1s
urging, has now made the war on drugs a priority programc In March of this year, French Customs seized
935 pounds of heroin, the largest seizure in history,
from a boat bound for the United States, and 321
pounds of morphine at the Italian border.
A few months
later, French narcotics agents seized 220 pounds of
heroin and four functioning heroin laboratories, one of
which was capable of producing enough heroin to supply
one-fifth of this country's addicts for a year.
These
actions have made serious inroads on the world drug
traffic.
In the opium producing area, we obtained
agreement by the Turkish Government that after June
1972 there would be no further planting of opium
poppy in Turkey.
Turkish opium has been a major
source of heroin for U.S. addicts.
8
In Southeast Asia, we have mounted a major
diplomatic and enforcement effort, working closely
with the Governments of Thailand, Laos, and South
Vietnam to bring about destruction of opium supplies
and heroin laboratories and interdiction of the
ground, sea, and air smuggling routes.
Substantial
seizures have been made.
Second, he placed particular emphasis on the
crucial roles of education, research and rehabili
tation.
On January 1, 1969, the Federal Government was
funding only 16 treatment programs.
This number has
grown enormously and, as of the end of FY 1972, there
were 321 Federal treatment programs operating.
Fund
ing in the areas of education, research and rehabilita
tion has also increased substantially.
More money
will be spent on these programs during this Administration
than in all the preceding years.
For Fiscal Year 1973
alone, $485.2 million has been requested by the
President for programs in these areas.
This is over
10 times the amount funded in FY 1969.
Third, he recognized the central role of the
states and the need for close Federal-State coopera
tion in a unified drive against drug abuse.
Through
the Law Enforcement Assistance Administration (LEAA),
substantial grants have been made to States for the
attack on drug abuse.
The Office of Drug Abuse Law
Enforcement was established in the Department of
Justice to work closely with State and local enforce
ment agencies in the assault on the street-level
heroin pusher.
Without doubt, the current shortage of heroin
is due, in large part, to the dedicated efforts of
State and local police throughout the country.
L
Fourth, he provided a substantial increase in
budgetary support for the Bureau of Customs and BNDD
and initiated the Treasury/IRS tax drive on drug
traffickers.
In FY 1973, $244.2 million will be
spent on narcotics-related law enforcement as compared
with $20*2 million which was spent in FY 1969.
Fifth, he stressed total community involvement -the private sector as well as governmental agencies -in this anti-drug abuse program.
Sixth, he recommended differentiation in the
criminal penalty structure between heroin and
marijuana, and flexible provisions for handling
first offenders.
oOo
DEPARTMENT OF THE TREASURY
Table I
TREASURY/INTERNAL REVENUE SERVICE NARCOTICS TRAFFICKERS PROGRAM
RESULTS AS OF NOVEMBER 1, 1972
COMPLETED
INVESTIGATIONS
STATE
METROPOLITAN AREAS
Alabama
Mobile
Alaska
Anchorage
Arizona
Phoenix-Tuscon-Yuma
Arkansas
Little Rock
California
Los Angeles-San Deigo
San Francisco-Oakland
k5
h2
16
7
Colorado
Denver
12
1
Connecticut
Hartford
Ik
2
Delaware
Wilmington
1
District of Columbia
Washington
22
Florida
Miami-Jacksonville
Tampa-Orlando
Hawaii
Honolulu
10
1
X
Georgia
Atlanta
29
11
Illinois
Chicago-Springfield
5k
6
Indiana
Indianapolis-Gary
11
3
Iowa
Des Moines
2
Kansas
Lawrence
1
Kentucky
Louisville-Covington
Newport
6
Louisana
New Orleans
Maine
Bangor
Maryland
Baltimore
13
2
Massachusetts
Boston
23
3
Michigan
Detroit
65
13
Minnesota
St. Paul-Minneapolis
TARGETS
13
2
1
60
5
3
5
27
lb
1
1
5
r
h
COMPLETED
INVESTIGATIONS
STATE
METROPOLITAN AREAS
Mississippi
Gulfport
Missouri
St. Louis-Kansas City
Nebraska
Omaha
3
Nevada
Las Vegas
3
New Hampshire
Portsmouth
h
2
New Jersey
Newark-Camden-Trenton
65
6
New Mexico
Albuquerque
11
5
New York
Albany
Buffalo-Rochester
New York City & Suburbs
12
19
156
1
55
l
TARGETS
3
18
8
l
North Carolina
Greensboro-Charlotte
17
Ohio
Cincinnati-Dayton-Columbus
Cleveland-Toledo
17
23
Oklahoma
Oklahoma City
Oregon
Portland
1)4
2
Pennsylvania
Philadelphia
Pittsburgh
hi
2
38
5
3
Rhode Island
Providence
1
South Carolina
Columbia
5
Tennessee
Nashville-Memphis
7
Texas
Austin-Houston-El Paso
Utah
Salt Lake City
Virginia
Richmond-Norfolk
Ar1in gton-Alexandria
28
Washington
Seattle
21
h9
10
6
1
\
West Virginia
Parkersburgh
1
Wisconsin
Milwaukee
5
1107
Office of Law Enforcement
Treasury Department
2
h
209
CO O R D I N A T E D LA W E NF O R C E M E N T D E A L E R P R O G R A M
Table
III
Metropolitan
Areas
Assessments
Atlanta, Ga.
Boston, Mass
Newark-Camden-Trenton,N.J.
Philadelphis, Pa.
Baltimore, Md.-Washington, D.C.
Pittsburgh, Pa.
Miami-Jacksonville-Tampa, Fla.
New York City
Detroit, Mich.
St. Louis-Kansas City, Mo.
Chicago-Springfield, 111.
Austin-Houston-El Paso, Texas
Los Angeles-San Deigo, Cal.
San Francisco-Oakland, Cal.
Phoenix-Tuscon-Yuma, Arizonia
Seattle, Wash,
Other
Totals
U.S. T r e a s u r y D e p a r t m e n t
Off ice of Law E n f o r c e m e n t
No ve m b e r 1, 1972
Number
468,740
1,980,585
1,484,398
680,113
238,834
451,202
699,576
7,429,750
1,220,891
247,618
1,603,730
1,551,436
10,451,375
2,542,460
1,403,745
224,932
6,393,983
35
64
25
36
2
11
45
96
60
7
68
82
145
56
53
13
284
$ 39,073,368
1082
$
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Document Type: Transcript
Number of Pages Removed: 13
Author(s):
Title:
"Meet the Press" Interview with Secretary George Shultz
Date:
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URL:
Federal Reserve Bank of St. Louis
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DepartmentoftheTR[ASURY
ashingtoh
o.c. 20220
v . ^ uphone
n
W M -a m ?
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 $4,300,000,000, or thereabouts, for
cash and in exchange for Treasury bills maturing
November 16, 1972,in the amount
of $4,101,725,000, as follows:
91 -day bills (to maturity date) to be issued
November 16, 1972,in the amount
of $2,400,000,000, or thereabouts, representing an additional amount of bills
dated
August 17, 1972,
and to mature
February 15, 1973 (CUSIP No. 912793 QF6),
originally issued in the amount of $1,800,285,000,
the additional and original
bills to be freely interchangeable.
182 -day bills, for $1,900,000,000, or thereabouts, to be dated
and to mature
May 17, 1973
November 16, 1972
(CUSIP No. 912793 QU3 ) .
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 $10,000, $15,000, $50,000, $100,000, $500,000 and $1,000,000
(maturity value) .
Tenders will be received at Federal Reserve Eanks and Branches up to the clos
ing hour, one-thirty p.m., Eastern
Standard time, Monday, November 13, 1972.
Tenders will not be received at the Treasury Department, Washington.
®ust be for a minimum of $10,000.
$5,000.
Each tender
Tenders over $10,000 must be in multiples of
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.
ftay not be used.
Fractions,
It is urged that tenders be made on the printed forms and for
warded 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.
2-
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.
Only thos
submitting competitive 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 respectl
shall be final.
Subject to these reservations, noncompetitive tenders for each
issue for $200,000 or less without stated price from any one bidder will be accepti
in full at the average price (in three decimals) of accepted competitive bids for
the respective issues.
OMPETI
November 16, 1972,
in cash or other immediately available funds or in a like face amount of Treasury
treatment.
[ANGE o:
Settlement for accepted tenders in accordance with the
bids must be made or completed at the Federal Reserve Bank on
bills maturing
Th<
ills , i
he otfr
rere op<
r th e r
ills .
November 16, 1972.
Cash and exchange tenders will receive equal
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.
Hi,
La
Av
a
100
25
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 considered to accru<
pAL T
actually received either upon sale or redemption a t maturity during the ta x a b le
B istr
Bosto:
Hew Y
Fhila
Cleve
Richm
Atlan
Chica
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year for which the return is made.
Minne
when the bills are sold, redeemed or otherwise disposed of, and the bills are ex
cluded from consideration as capital assets.
Accordingly, the owner of Treasury
bills (other than life insurance companies) issued hereunder must include in his
income tax return, as ordinary gain or loss, the difference between the price pa^
for the bills, whether on original issue or on subsequent purchase, and the amount
Treasury Department Circular No. 418 (current revision) and this notice,
Kansa
Balia
San F
prescribe the terms of the Treasury bills and govern the conditions of their issue.
Copies of the circular may be obtained from any Federal Reserve Bank or Branch.
V In cl
\l Ihes
4.79
of
Department thefÜ EA SlIRY
,n»T nii n n In flA fl
UlN
GTON, D C. 20220
.......... .............. T E I
C B U m i C \ktr\A n t \ A *
TELEPHONE
W04-2041
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JHLi
■
ATTENTION:
FINANCIAL EDITOR
November 6 , 1972
RELEASE 6:30 P.M.
RESULTS OF TREASURY'S WEEKLY BILL OFFERING
The Treasury Department announced that the tenders for two series of Treasury
ills, one series to be an additional issue of the bills dated August 10, 1972
, and
tie other series to be dated November 9, 1972 , which were invited on October 31, 1972,
ere opened at the Federal Reserve Banks today. Tenders were invited for $2,400,000,000,
r thereabouts, of 91-day bills and for $1,900,000,000, or thereabouts, of
182-day
ills. The details of the two series are as follows:
!TGE OF ACCEPTED
COMPETITIVE BIDS:
High
Low
Average
91-day Treasury bills
maturing February 8 , 1973
Approx. Equiv.
Annual Rate
Price
98.832
98.814
98.820
4.62l/o
4.692/o
4. 668/0
1/
182-day Treasury bills
maturing May 10, 1975
Approx. Equiv.
Annual Rate
Price
97.509
97.482
97.494
4.927/c
4.98l/
4.957/0
u
a/ Excepting one tender of $300,000
100/ of the amount of 91-day bills bid for at the low price was accepted
25/ of the amount of 182-day bills bid for at the low price was accepted
OTAL TENDERS APPLIED FOR AND ACCEPTED BY FEDERAL RESERVE DISTRICTS:
District
Boston
Hew York
Philadelphia
Cleveland
Richmond
Atlanta
Chicago
Bt. Louis
Minneapolis
Kansas City
Dallas
Ban Francisco
TOTALS
Applied For
$
27,110,000
3,103,845,000
32,140,000
22,490,000
33,190,000
19,560,000
344,295,000
50,170,000
43,205,000
28,260,000
34,395,000
146,975,000
Accepted
$
9,110,000
1,921,695,000
12,140,000
22,490,000
16,690,000
14,310,000
200,295,000
37,170,000
29,205,000
18,260,000
17,395,000
' 101,975,000
Applied For
$
25,535,000
2,795,590,000
27,215,000
37,975,000
37,030,000
26,545,000
568,840,000
51,780,000
38,700,000
20,125,000
30,845,000
214,980,000
Accepted
$
5,785,000
1,525,790,000
7,215,000
17,775,000
11,080,000
21,545,000
77,340,000
35,280,000
20 ,200,000
10,125,000
10,470,000
158,230,000
$3,885,635,000
$2,400,735,000 b/
$3,875,160,000
$1,900,835,000 sJ
includes $168,245,000 noncompetitive tenders accepted at the average price'of 98.820
,Includes $ 86,510,000 noncompetitive tenders accepted at the average price of 97.494
Ihese rates are on a bank discount basis. The equivalent coupon issue yields are
4.79 % for the 93-day bills, and 5.15/» for the 182-day bills.
FOR IMMEDIATE RELEASE
November 7, 1972
TREASURY ANNOUNCES
TWO ACTIONS UNDER THE
ANTIDUMPING ACT
Treasury's actions with respect to two investigations
under the Antidumping Act of 1921, as amended, were announced
today by Assistant Secretary Eugene T. Rossides.
In the first case there was a finding of dumping, and
in the second case there was a final discontinuance of an
antidumping investigation.
Both cases will appear in the
Federal Register of November 8, 1972.
In the first case, Assistant Secretary Rossides announced
that the Treasury has issued a dumping finding with respect to
dry cleaning machinery from West Germany.
On June 28, 1972,
the Treasury Department advised the Tariff Commission that
this merchandise was being sold at less than fair value within
the meaning of the Antidumping Act.
On October 4, 1972, the
Tariff Commission determined there was injury to a U. S.
industry.
In such situations the dumping finding automatically
follows as the final administrative requirement in antidumping
investigations.
Dumping duties will be assessed on imports of
this merchandise which have not been appraised and on which
dumping margins are found.
During the period of July 1970
through March 1972 imports of dry cleaning machinery from
West Germany were valued at approximately $4.7 million.
In the second case, the Treasury announced a final
discontinuance of the antidumping investigation on deflection
yokes, used in color television receivers, from Japan.
On
June 30, 1972, the Department published a tentative discon
tinuance notice after the investigation showed that sales at
less than fair value were only minimal in relation to the
volume of imports, and the foreign manufacturers offered
formal assurances that there would be no further sales at less
than fair value.
This'notice also invited interested parties
to submit written views or request an opportunity to present
their views orally.
During the period of March 1971 through
July 1972 imports of deflection yokes, used in color television
receivers, from Japan were valued at approximately $3.9 million
# # #
Z
UNITED STATES SAVINGS BONDS ISSUED AND REDEEMED THROUGH
October 31, 1972
(Dollar amounts in millions — rounded and will not necessarily add to totals)
D E S C R IP T IO N
A M O U N T IS S U E D -!/
jATURED
Series A-1935 thru D-1941----Series P and G-1941 thru 1952
Series J and K-1952 thru 1957 .
5,003
29,521
3,754-
AMOUNT
r e d e e m e d
..
!/
AMOUNT
o u t s t a n d in g
4,998
29,497
3,745
5
24
9
1,727
7,611
12,263
189
845
1,331
1,619
!/
% O U T S T A N D IN G
O F A M O U N T IS S U E D
.10
.09
.24
‘hmatured
Series E -^ :
1941 _____________
1942 _______________
1943 _______________
1944 _______________
1945 _______________
1946 _______________
1947 _______________
1948 _______________
1949 _______________
1950 _______________
1951 ____________
1952 ________ ,______
1953 _______________
1954 _______________
1955 _______________
1956 _______________
1957 ___________
1958 _______________
1959 _______________
1960 _______________
1961 ____________
1962 _______________
1963 _______________
1964 _______________
1965 _______________
1966 _______________
1967 _______________
1968 _______________
1969 _______________
1970 _______________
1971 _______________
1972 _______________
Unclassified
Total Series E
1,916
11,063
4,883
■ 4,518
4,605
4,490
3,886
3,361
3,499
3,926
3,948
4,073
3,904
3,633
3,455
3,203
3,126
3,060
2,884
3,037
2,961
2,856
2,961
2,894
2,670
2,394
2,173
1,941
704
294
902
10.21
11.38
14.18
16.64
1,012
1,081
1,001
866
934
1,143
1,221
1,314
1,305
1,280
1,348
1,307
1,407
1,558
1,605
2,001
1,950
1,923
2,190
2,206
2,143
2,158
2,586
3,525
3,314
68
18.01
19.40
20.48
20.48
21.07
22.55
23.62
24.39
25.05
26.05
28.07
28.98
31.04
33.74
35.75
39.72
39.71
40.24
42.52
43.25
44.25
47.44
54.34
64.50
82.46
18.78
185,828
136,271
49,557
26.67
5,485
8,674
3,912
2,831
1,573
5,844
28.68
67.37
14,159
6,743
7,417
52.38
199,987
143,013
56,974
28.49
38,278 '
199,987
238,265
38,240
143,013
181,254
37
56,974
57,011
.10
28.49
23.93
Series H (1952 thru May, 1 9 5 9 )4 /.
H (June, 1959 thru 1972) _
Total Series H
Total Series E and H
¡
Total m atured__
Total unmatured
Grand T o t a l____
Includi®s
9.86
8,456
13,593
15,859
12,4.83
5,690
5,420
5,618
5,571
4-,887
4,227
4,433
5,069
5,169
5,387
5,209
4,914
4,803
4,510
4,533
4,618
4,489
5,038
4,911
4,779
5,151
5,100
4,843
4,552
4,759
5,465
4,019
362
14,240
1,420
807
a ccru e d d is c o u n t .
Currentredemption
value,
°Pdon ot o w n e r b o n d s m a y b e h e l d a n d w i l l e a r n i n t e r e s t l o r a d d i t i o n a l p e r i o d s a f t e r o r i g i n a l m a t u r i t y d a t e s .
Form PD 3812 (R ev. Feb. 1972)
—Dept, of the Treasury —Bureau of the Public Debt
9.99
9.79
FOR IMMEDIATE RELEASE
November 9, 1972
TREASURY ISSUES COUNTERVAILING DUTY PROCEEDING NOTICE
ON REFRIGERATORS AND FREEZERS FROM ITALY
The Treasury Department announced today the issuance
of a countervailing duty proceeding notice covering
refrigerators, freezers, refrigerating equipment, and
parts thereof, from Italy.
The notice states that the Treasury Department has
received information which appears to indicate that the
Government of Italy makes certain payments, bestowals,
rebates, or. refunds upon the manufacture, production, or
exportation of refrigerators and freezers, which constitute
the payment or bestowal of a"bounty or grant" within the
meaning of the U.S. countervailing duty law.
If Treasury
finds that a bounty or grant has been paid or bestowed,
the imports in question would be subject to an additional
(countervailing) duty equivalent to the net amount of the
bounty or grant.
The notice invites submission of comments in time to
be received within 30 days from the date of publication
in the Federal Register.
It is scheduled to be published
on Friday, November 10, 1972.
If the Treasury Department finds that bounties or
grants are being paid or bestowed within the meaning of
the countervailing duty law, it will issue a countervailing
duty order proclaiming the amount of countervailing duties
to be assessed on imports of refrigerators and freezers
from Italy.
The countervailing duty would become effective
30 days after publication of the order in the Customs
Bulletin.
During the period of January 1972 through July 1972,
imports of refrigerators, freezers, refrigerating equipment,
and parts thereof, from Italy were approximately $27 million.
# # #
Departmentof
Wa s h in g t o n , o c 20220
.
^T R E
t i umùnt
FOR IMMEDIATE RELEASE
,j|f
W 04 *20 41
November IO, 1972
SALE OF APRIL AND JUNE TAX ANTICIPATION BILLS
The Treasury is selling $2.0 billion of tax antici
pation bills maturing in April 1973 and $2.5 billion
maturing in June 1973.
The April bills will be auctioned on November 17,
for payment November 24. Commercial banks may make
payment for their own and customers* accepted tenders
by crediting Treasury tax and loan accounts. The bills
will mature on April 20 but may be used at face value in
payment of Federal income taxes due April 15, 1973. The
details of the offering of the April bills are being
released separately.
The June bills will be auctioned on November 29,
for payment December 5. The bills will mature on June 22
but may be used at face value in payment of Federal income
taxes due June 15, 1973. The details of the offering of
the June bills, including the extent, if any, to which
commercial banks may make payment by crediting tax and
loan accounts, will be released later.
T fflT IO N :
OR
F IN A N C IA L E D IT O R
'
Novem ber 1 0 , 1972
IM M E D IA T E R E L E A S E
T R E A S U R Y O F F E R S $ 2 B I L L I O N I N A P R IL T A X A N T IC IP A T IO N B I L L S
The T r e a s u r y D e p a r t m e n t , b y t h i s p u b l i c n o t i c e , i n v i t e s t e n d e r s f o r $ 2 , 0 0 0 , 0 0 0 , 0 0 0 ,
or t h e r e a b o u t s , o f 1 4 7 - d a y T r e a s u r y " b i l l s , t o "be i s s u e d o n a d i s c o u n t b a s i s u n d e r com
p e titiv e a n d n o n c o m p e t it iv e b i d d i n g a s h e r e i n a f t e r p r o v i d e d .
The b i l l s o f t h i s s e r ie s
t i l l be d a t e d N o v e m b e r 2 4 , 1 9 7 2 , a n d w i l l m a t u r e A p r i l 2 0 , 1 9 7 $ :
( C U S IP N o . 9 1 2 7 9 3 R G 3 ) .
5hey w i l l b e a c c e p t e d a t f a c e v a l u e i n p a y m e n t o f in c o m e t a x e s d u e o n A p r i l 2 5 , 1 9 7 3 ,
Lad 'to t h e e x t e n t t h e y a r e n o t p r e s e n t e d f o r t h i s p u r p o s e , t h e f a c e a m o u n t o f t h e s e
(bills w i l l b e p a y a b l e w i t h o u t i n t e r e s t a t m a t u r i t y .
T a x p a y e rs d e s ir in g t o a p p ly th e se
t i l l s i n p a y m e n t o f A p r i l 1 5 , 1 9 7 3 , in c o m e t a x e s m a y s u b m it t h e b i l l s t o a F e d e r a l
¡Reserve B a n k o r B r a n c h o r t o t h e O f f i c e o f t h e T r e a s u r e r o f t h e U n i t e d S t a t e s ,
¡Washington, n o t m o re t h a n f i f t e e n d a y s b e f o r e t h a t d a t e .
In th e c a se o f b i l l s su b
mitted i n p a y m e n t o f in c o m e t a x e s o f a c o r p o r a t i o n t h e y s h a l l b e a c c o m p a n ie d b y a d u l y
completed F o rm 5 0 3 a n d t h e o f f i c e r e c e i v i n g t h e s e it e m s w i l l e f f e c t t h e d e p p s i t o n
¡April 1 5 , 1 9 7 3 .
I n t h e c a s e o f b i l l s s u b m i t t e d i n p a y m e n t o f in c o m e t a x e s o f a l l o t h e r
taxpayers, t h e o f f i c e r e c e i v i n g t h e b i l l s w i l l i s s u e r e c e i p t s t h e r e f o r , t h e o r i g i n a l
of w hich t h e t a x p a y e r
a l 1 s u b m it o n o r b e f o r e A p r i l 1 5 , 1 9 7 3 , t o t h e D i s t r i c t
¡Director o f I n t e r n a l R e v e n u e f o r t h e D i s t r i c t i n w h ic h s u c h t a x e s a r e p a y a b l e .
The
[bills w i l l b e i s s u e d i n b e a r e r f o r m o n l y , a n d i n d e n o m in a t io n s o f $ 1 0 , 0 0 0 , $ 1 5 , 0 0 0 ,
*50,000, $ 1 0 0 ,0 0 0 , $ 5 0 0 ,0 0 0 a n d $ 1 , 0 0 0 , 0 0 0 ( m a t u r i t y v a l u e ) .
T e n d e rs w i l l b e r e c e i v e d a t F e d e r a l R e s e r v e B a n k s a n d B r a n c h e s u p t o t h e c l o s i n g
pour, o n e - t h i r t y p . m . , E a s t e r n S t a n d a r d t i m e , F r i d a y , - N o v e m b e r 1 7 , 1 9 7 2 .
flot be r e c e i v e d a t t h e T r e a s u r y D e p a r t m e n t , W a s h in g t o n .
minimum o f $ 1 0 , 0 0 0 .
T e n d e rs w i l l
E ach te n d e r m u st b e f o r a
T e n d e r s o v e r -$ 1 0 ,0 0 0 m u s t b e i n m u l t i p l e s o f $ 5 , 0 0 0 .
In th e case
c o m p e t it iv e t e n d e r s t h e p r i c e o f f e r e d m u s t b e e x p r e s s e d o n t h e b a s i s o f 1 0 0 , w i t h
&Qt more t h a n t h r e e d e c i m a l s , e . g . , 9 9 . 9 2 5 .
F r a c t io n s m ay n o t b e u s e d .
I t i s u rge d
t e n d e r s b e m ade o n t h e p r i n t e d f o r m s a n d f o r w a r d e d i n t h e s p e c i a l e n v e lo p e s
^ fc h w i l l b e s u p p l i e d b y F e d e r a l R e s e r v e B a n k s o r B r a n c h e s o n a p p l i c a t i o n t h e r e f o r .
(OVER)
-
2-
Banking institutions -generally nay submit tenders' for account of customers
provided the names of the customers are set forth in such tenders. Others than bank
lag 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 pay
ment by an incorporated bank or trust company.
All bidders are required to agree not to purchase or to sell, or to make an y
agreements with respect to the purchase or sale or other disposition of any bills of
this Issue at a specific rate or price, until after one-thirty p.m., Eastern Standard
time, Friday, November 1 7 , 1 9 7 2 .
v.
Im m ed i a t e l y a f t e r t h e c l o s i n g h o u r , t e n d e r s w i l l b e o p e n e d a t t h e F e d e r a l Reserve]
Banks a n d B r a n c h e s , f o l l o w i n g w h ic h p u b l i c a n n o u n c e m e n t w i l l b e m ade, b y t h e T re a su ry
•D e p a r t m e n t o f t h e a m o u n t a n d p r i c e r a n g e o f a c c e p t e d b i d s .
O n ly t h o s e s u b m it t in g
C o m p e titiv e te n d e r s w i l l b e a d v is e d o f th e a c c e p ta n c e o r r e j e c t io n t h e r e o f.
The
S e c r e t a r y o f t h e T r e a s u r y e x p r e s s l y r e s e r v e s t h e r i g h t t o a c c e p t o r r e j e c t a n y o r a ll
t e n d e r s , i n w h o le o r i n p a r t , a n d h i s a c t i o n i n a n y s u c h r e s p e c t s h a l l ' b e f i n a l .
S u b j e c t t o t h e s e r e s e r v a t i o n s , n o n c o m p e t it iv e t e n d e r s f o r $ 3 0 0 ,0 0 0 o r l e s s w it h o u t
";Vv'Ji'O,.
MpfHB
iT.f1$1
f/;■■1 |p|
m p :.
s t a t e d p r i c e f r o m a n y o n e b i d d e r w i l l b e a c c e p t e d i n f u l l a t t h e a v e r a g e p r i c e ( in
th r e e d e c im a ls ) o f a c c e p te d c o m p e t it iv e b id s .
S e t t l e m e n t f o r a c c e p t e d t e n d e r s in
a c c o r d a n c e w i t h t h e b i d s m u s t b e m ad e o r c o m p le t e d a t t h e F e d e r a l R e s e r v e B a n k i n cash
O f o t h e r i m m e d ia t e l y a v a i l a b l e f u n d s o n N o v e m b e r 2 4 , 1 9 7 2 .
A n y q u a l i f i e d d e p o s it a r y
w i l l b e p e r m i t t e d t o m ak e s e t t l e m e n t b y c r e d i t i n i t s T r e a s u r y t a x a n d loan a c c o u n t fa
T re a su ry b i l l s a llo t t e d t o i t f o r i t s e l f and i t s c u sto m e rs.
U n d e r S e c t i o n s 4 5 4 ( b ) a n d 1 2 2 1 ( 5 ) o f t h e I n t e r n a l R e v e n u e C o d e o f 1 9 5 4 th e amo
o f d i s c o u n t a t w h ic h b i l l s i s s u e d h e r e u n d e r a r e s o l d i s c o n s i d e r e d t o a c c r u e w hen the
b i l l s a r e s o l d , r e d e e m e d o r o t h e r w i s e d i s p o s e d o f , a n d t h é b i l l s a r e e x c lu d e d fro m
c o n s id e r a t io n a s c a p it a l a s s e t s .
life
A c c o r d in g ly , th e ow ner o f T re a su ry b i l l s
( o t h e r than
i n s u r a n c e c o m p a n ie s ) i s s u e d h e r e u n d e r m u s t i n c l u d e i n h i s in c o m e t a x r e t u r n , as
o r d i n a r y g a i n o r l o s s , t h e d i f f e r e n c e b e t w e e n t h e p r i c e p a i d f o r . t h e b i l l s , w h eth er on
o r i g i n a l i s s u e o r o n s u b s e q u e n t p u r c h a s e , a n d t h e a m o u n t a c t u a l l y r e c e i v e d e it h e r upon
s a l e o r r e d e m p t io n a t m a t u r i t y d u r i n g t h e t a x a b l e y e a r f o r w h ic h t h e r e t u r n i s made.
T r e a s u r y D e p a r t m e n t C i r c u l a r N o . 4 1 8 ( c u r r e n t r e v i s i o n ) a n d t h i s n o t i c e , p r e s c r it
th e te rm s o f th e T r e a s u r y b i l l s an d g o v e rn th e c o n d it io n s o f t h e ir is s u e .
t h e c ir c u la r - m ay b e o b t a in e d fro m a n y F e d e r a l R e se rv e B an k o r B ra n c h .
C o p ie s o f
FOR IMMEDIATE RELEASE
MEMORANDUM TO CORRESPONDENTS:
November 13, 1972
The Treasury Department today responded to a question
that has arisen under Temporary and Proposed Income Tax
Regulations relating to arbitrage bonds.
The question
concerns the definition of the term M a t e r i a l l y higher" as
it applies to a refunding issue, that is, an issue of
governmental obligations whose proceeds are used to refund
a prior issue of the same governmental unit.
Under Temporary Income Tax Regulations on arbitrage
bonds published in the Federal Register of November 13,
1970, and amended on June 1, 1972, the yield produced by
acquired obligations is not materially higher than the
yield of governmental obligations issued after July 1, 1972,
if the difference is not greater than one-eighth of one
percentage point.
The Temporary Regulations did not provide specific
rules regarding refunding issues. However, Proposed Regulations
which were published on June 1, 1972, contain specific rules
governing refunding issues.
These rules provide that in the
case of refunding issues occurring after July 1, 1972, the
yield of acquired obligations is materially higher if it
exceeds the yield of a refunding issue by any amount.
The June 1, 1972, Notice of Proposed Rule Making specifi
cally stated that the regulations to be adopted will supersede
the Temporary Regulations.
Furthermore, final regulations and
changes and amendments to final or temporary regulations are
routinely made effective from the date of publication of
proposed regulations containing the amendments or from a later
date specified therein.
Taxpayers, issuers, and their counsel
are cautioned that they may not rely on the provisions of
final or temporary regulations after publication of a Notice
of Proposed Rule Making which, if finally adopted, will change
or supersede the provisions of those regulations effective
with the date of the Notice or a later date as specified in
the Notice.
Despite the above, a question apparently has arisen as
to whether, with regard to refunding issues occurring after
July 1 } 1972 and before the date when Treasury adopts final
(OVER)
regulations, the allowable "spread” will be the one-eighth
of one percentage point provided in the Temporary Regulations
or a zero spread as provided in the Proposed Regulations if
the Proposed Regulations are later adopted, in their present
form, as a Treasury Decision.
The Treasury Department's position is that if the Proposed
Regulations were adopted without change, the allowable spread
on such refunding issues occurring after July 1, 1972 would be
zero. However, to prevent any hardships that might result in
this event to issuers and purchasers of bonds who relied in
good faith on an opinion of counsel to the effect that the oneeighth of one percentage point spread provided in the Temporary
Regulations would be applicable notwithstanding the provisions
of the final regulations, the Treasury Department has decided
that obligations issued between July 1, 1972, and November 13,
1972 will not be deemed taxable if as a result of such good
faith reliance on the opinion of counsel, the issuer invested
in acquired obligations having a yield of no more than oneeighth 6f one percentage point higher than the yield on the
issued obligations. Also such an issuer will not be included
in the list of issuers whose statements of certification or
covenants may not be relied upon in the future.
The provisions
of the Proposed Regulations will be conformed with this
announcement prior to adoption.
DepartmentoftheJREASURY
USHINGTON,
D.C.20220
TELEPHONE W04-2O41
FOR RELEASE AT 3:00 P.M.(EST)
REMARKS OF THE HONORABLE PAUL A. VOLCKER
UNDER SECRETARY OF THE TREASURY FOR MONETARY AFFAIRS
AT THE INTERNATIONAL FINANCE AND MONETARY REFORM SESSION
OF THE
39TH NATIONAL FOREIGN TRADE CONVENTION
SPONSORED BY THE NATIONAL FOREIGN TRADE COUNCIL, INC.
AT THE WALDORF-ASTORIA HOTEL, NEW YORK, NEW YORK
MONDAY, NOVEMBER 13, 1972, AT 3:00 P.M.(EST)
In leading off this session on money at the National
Foreign Trade Convention, a few preliminary comments on
the relationship between international monetary reform
and trade negotiations seem in order.
I would then like
to turn, rather abruptly, to a central question for
monetary reform itself.-- How can we achieve a better
process of balance of payments adjustment?
In the broadest terms, the need for a properly
functioning international financial system is selfevident to those engaged in foreign trade.
Conversely, in
my experience international bankers seldom talk together
for long without the debate broadening out into considera
tion of trading policies and practices.
2
These prosaic facts would hardly bear mention except
in the light of two further observations, both of which
have impressed themselves on my consciousness in recent
years and m o n t h s .
The first is a commentary on national and international
bureaucracies, from which I do not exempt the banks of the
Potomac.
Thé close linkage between trade and monetary
questions have too often been obscured and neglected by the
way the work is organized.
Trade men do trade —
tariff bindings, escape clauses and all that.
GATT,
Monetary men
do money -- the IMF, SDR's, exchange rate tunnels, snakes
and worms, and all that.
They both have a job, necessary
expertise, and a mandate -- and they don't appreciate
poachers on their preserves.
When asked in philosophical
terms, "Shouldn't our approach toward trade and money be
linked?" -- the answer is usually, "Of course."
-
When
asked in operative terms, "Shouldn't we sit down inter
nationally and deal with the broad problems together?" -the answer has too often been, "Let's each mind our own
business." -- or some equivalent expression.
My second observation is that the nations of the world,
perhaps for the first time since the postwar planning at
%
3
the end of World War II, have the strongest kind of
incentive —
and the plain responsibility -- to take a
fundamental new look at virtually the whole range of inter
national economic arrangements.
The incentive grows out of
the simple fact that, however great our achievements in
expanding trade and promoting prosperity over the past 25
years, our monetary and trading system and institutions have
not been working so well.
The vast economic changes of the
postwar period have produced strains and tensions threatening the international economic equivalent of "law and order."
0»
...
There is no doubt in my mind that, today, that
challenge of updating our institutions and our practices
is widely accepted.
There is a will to approach the task
O
lia
li
lilifeli
in a cooperative spirit.
These are the absolutely essential ingredients for
success.
At the same time, our conviction is that success will
also be dependent on approaching the problem in sufficiently
large focus.
President Nixon, in speaking recently to the
IMF, put the problems of economic reform in the larger context
of peaceful relations among nations»
And, he emphasized, ,fWe
must see monetary reform as one vital part of a total reform
\
4
of international economic affairs, encompassing trade and
investment opportunity as well."
Painting on so large a canvas obviously presents
problems.
At the least, we will need to overcome the
inertia —
bureaucratic or otherwise -- that would keep every
problem in an insulated compartment and stifle imagination.
As a practical matter, the negotiations will need to be
broken down into manageable pieces.
But, at the same time,
we need to recognize the broader relationships between trade,
money, investment and development, and approach these problems
with a common philosophy and a common view.
When the United
States has emphasized the need to recognize the link between
trade and monetary reform, this is what we have had in mind.
Perhaps I can help clarify this approach by asserting
several propositions on the substance and possible organiza
tional implications of this link.
Our point of departure,
in the words of Secretary Shultz,
is that there is "mutual interest in encouraging freer trade
in goods and services and the flow of capital to the places
where it can contribute most to economic growth.
We must
avoid a breakup of the world into antagonistic blocs.
must not seek a refuge behind a wall of protectionism."
We
15To a c h ie v e
s t a b le
p ro m o te
o f p a y m e n ts
t im e ly
r e s t r ic t io n s .
a tta ck
to
p ro te ct
A t th e
t h e ir
on e x is t in g
in d iv id u a l c o u n t r ie s
in te r e s ts
t im e ,
tra d e
arran ge
in t e r n a t io n a l b a la n c e
w it h o u t t h is ,
sam e
we w i l l n e e d a
p a r t ic u la r ly , b e tte r
an d o r d e r ly
a d ju stm e n ts;
p r o p e lle d
d ir e c t
g e n e r a l o b je c t iv e ,
m o n e ta ry sy ste m a n d ,
m e n ts to
are
t h is
th e
and
b y c o n t r o ls
o b je c t iv e
r e q u ir e s
on monetary reform.
a
in v e s tm e n t r e s t r i c t i o n s .
Both approaches to the problem are in hand.
newly established Committee of 20
and
The
has started its work
Major nations have committed themselves
■«I
I
■
to start detailed trade negotiations within the framework
of GATT.
In
IIJIhhuiI
|
t h e ir
s p e c ific s ,
th e se n e g o t ia t io n s
I
can p roce e d
Mtail
in
d iffe r e n t
fo ru m s.
D is c u s s io n
o f a m ass o f d e t a il on tra d e
is s u e s
be re d u c e d a n d w hen, how p a r t ic u la r
and o th e r
re m o ve d
a d m in is t r a t iv e
--
r e q u ir e
n e g o t ia t in g
--
exchange
- - w h ic h
The
sam e
m e c h a n is m s ,
th e
d o lla r ,
and a ll
th o se
th e
fin a n c ia l e x p e rts
is
th e
t a r iff
is
to
n o n - t a r if f b a r r ie r s
to
tra d e
a s p e c ia l e x p e r t is e ,
p ro ce ss.
ra te
b a r r ie r s
and r e s o lu t io n
tru e
can b e st be
e x p e r ie n c e
and
o f m o n e ta ry t e c h n iq u e s
r o le
of
o th e r m a tte rs
b u t w h ic h m ake th e
S D R 's ,
th a t
eyes
so
g o ld ,
and
in t r ig u e
o f a tra d e
6
man glaze over.
In this sense, the detailed trade negotia
tions should not and need not wait on discussions of monetary
reform; nor need the discussions of monetary questions await
the results of the detailed trade negotiations.
In the
overlap.
larger aspects, however,
the negotiations will
For instance, in pursuit of the goal of freer trade,
we believe definite incentives could and should be built into
the rules concerning the balance of payments adjustment process
to encourage trade liberalization.
Indeed, surplus countries
may sometimes find it more desirable from their own point of
view to reduce tariffs or eliminate other restrictions than,
say, put the full weight of adjustment on exchange rates.
In
specific instances, such action could well be more desirable
from the viewpoint of other nations as well.
Looking at the same problem from the opposite direction,
the process of orderly balance of payments adjustment through
exchange rates is made more difficult if large areas of our
economies are insulated from foreign price competition.
To
the extent such restrictions remain, the adjustment process
is less efficient; more of the burden is thrown on lessinsulated sectors of the economy, creating the temptation
for still more controls.
Our approach toward monetary reform and reform of
the trading system overlaps in another broad area.
In
the discussions at the IMF, the concern over the world
breaking up into antagonistic blocs was echoed and re
echoed.
There
seemed to be a wide consensus for what was
termed a Mone-worldM solution -- by which is presumably
meant a nondiscriminatory, multilateral payments system.
Of course, one prime characteristic of a "bloc world"
would be widespread preferential tariffs and trade
barriers.
Thus, the logical counterpart of nondiscrimina
tion in monetary arrangements is most-favored-nation
treatment in trade.
That principle is already enshrined
in Article I of the GATT.
But we are forced to conclude
from simple observation that the forcefulness with which
that principle is applied in practice today does not match
its prominence in the Articles. We need to reach a new
consensus on nondiscrimination in money and trade alike,
A more specific example of the need to achieve con
sistency in the rules governing trade and money arises
when we consider the circumstances, if any, under which
trade restraints might legitimately be used to assist in
8
the process of balance of payments adjustment.
In our
thinking, such action should be confined to extreme and
temporary circumstances.
The measures taken should be
across-the-board and market oriented, such as a tariff
surcharge or a general tax on imports.
In any event, the
trade men and the money men will need to reach agreement.
In his remarks to the IMF, Secretary Shultz also referred
to certain other important areas for negotiation that some
times seem in danger of falling between the stools of "money"
and "trade."
Trading patterns and balance of payments
adjustments are often distorted by the use of fiscal
subsidies or penalties that affect the flow of goods or
investment, by administrative pressures on investment
decision-making, and by competition in the provision of
official export credits.
The international discussion that
followed the introduction of the DISC provision in our own tax
code in an effort to provide tax treatment for our exporters
more comparable to that commonly available abroad points up
the need for agreed and appropriate international standards.
The growing practice of some countries in providing large
subsidies for investment in particular areas often has the
practical result of impinging on the trade of others.
This has been a matter of some controversy within the
European Community, but the problem is not limited to
Europe and cries out for more general consideration.
Organizationally, the mandate of the Committee of 20
plainly charges that group with the responsibility for
considering the interrelationships of monetary reform to
trade, investment, and development.
Without itself becoming
involved in specific trade negotiations, that body can do
much to assure a consistency of approach, and provide
stimulus for detailed negotiations in other bodies.
The
presence of the Secretary Generals of the GATT and the OECD
at its deliberations should help assist that process.
The Committee of 20 was conceived as a temporary body.
However, the need for better harmonization of our approaches
toward monetary, trade, and investment problems will not cease
once monetary reform is accomplished.
This reform effort
should also aim at finding more permanent organizational
arrangements to assure that the problems of the international
economy continue to be treated by governments and by our
international institutions as parts of an interrelated whole.
We should be willing to reshape our institutions and, if
10
necessary to realign their responsibilities,
to achieve
that result; at the very least, the rules and practices
of the IMF and the GATT need to be fully consistent, and
closer working relationships established among our inter
national institutions.
In discussing the relationships between trade and
money,
I have already alluded several times to the
importance of achieving improvement in the processes of
balance of payments adjustment -- the manner by which
countries achieve and maintain an equilibrium in their
economic relationship with other countries.
Amid all the controversy about monetary matters, there
is a basic strand of agreement that failure of the adjust
ment process was a prime cause of the breakdown of the
Bretton Woods System.
Imbalances were permitted to continue
for too long and in too large amounts, consistent with the
stability of the whole.
There were no agreed means for
assigning responsibility for initiating adjustment measures.
To the extent effective pressures did exist, they worked in
a biased way. The lack of consensus on the adjustment process
has provided fertile ground for speculation,
instability and even for political friction.
for monetary
-
11
Meaningful monetary reform must deal with this
central problem#
Some have suggested that
freely floating exchange rates would be a logical and
straightforward approach, counting on the forces of the
market to achieve a
continuing
shifting currency values.
equilibrium through
However, most leading countries
have expressed the strong desire to work instead within
the framework
—
of officially established exchange rates
par or central values —
supported by convertibility
of national currencies into internationally agreed
reserve assets.
The ideas set forth by Secretary Shultz
are based on that premise.
Consequently, his proposals
deal with adjustment problems in that context.
There is ample evidence that a convertibility system
will not, in itself, solve the adjustment problem.
To be
sure, loss of reserves will eventually force a persistent
deficit country to take action,.
But even on the deficit
side, disequilibrium can be maintained for a considerable
period through extensive borrowing and by measures dis
torting trade, investment or the internal economy.
On
the surplus side, the disciplines are still less effective.
12
Reserves can be accumulated more or less indefinitely.
This is a crucial asymmetry.
For a variety of
reasons, countries have felt little incentive to take
overt action to eliminate surpluses.
Revaluation, or
action to liberalize imports, affects vocal domestic
interests.
A strong trading position can be a vehicle
for domestic expansion.
A strong currency and large
reserves provide protection against the unknown, and can
be an element in national prestige; surpluses are often
equated with virtue.
In the end, therefore, the necessary corollary of a
system of established exchange rates supported by con
vertibility must be new arrangements to induce and
maintain a satisfactory balance of payments equilibrium.
Our suggestions are pointed in that direction.
aimed
at
They are
actively promoting timely measures of
adjustment in a manner to support the basic objective of
freer trade and payments.
They would apply in an even-
handed manner to deficit and surplus countries.
They
would leave an appropriately wide area for national dis
cretion.
Without
ruling
out either transitional or more
13
indefinite "floats" of a national currency, they would
be fully integrated with, and support, the general desire
to maintain established exchange rates and convertibility
and to work toward freer trade.
There are two related elements in the approach to
the adjustment problem sketched out by Secretary Shultz
that deserve special emphasis:
(1)
the need for
objective criteria to help guide adjustment actions; and
(2) the use of reserve movements as a primary criterion.
An effective international monetary system will need
to have substantial flexibility for national governments
to make adjustments in the manner suited to their own
needs and circumstances.
However, taken alone, experience
shows national discretion cannot be counted on to produce
either timely or equitable adjustment decisions.
Similarly, the need for international consultation and
review is evident —
but full reliance on the discretion
of international bodies alone can lead to long debate and
indecision in a potentially
phere.
These decisions
politically charged atmos
can be disciplined by developing
agreed objective criteria that signal the need for
adjustment action.
perfect.
But these criteria will never be
Taken alone,
they cannot point unerringly to
appropriate action; and they must be reconciled with
national discretion.
What is needed is a blend of these approaches.
The
objective criteria would identify periods of serious balance
of payments disequilibrium, and create a strong presumption
that effective adjustment policies should be implemented.
But the country concerned should have and could have substan
tial discretion in determining the composition of its adjust
ment policies.
International consultations would determine
the applicability of the criteria to particular situations,
or deal with the rare case where the criteria provided a
"false signal."
The use of objective indicators recognizes that adjust
ment decisions are frequently difficult for any government.
There is a natural tendency to postpone and avoid action
until imbalances cumulate into a major problem for nations
and a major opportunity for speculation.
International group
may be equally reluctant to face promptly difficult and
politically sensitive adjustment questions.
15
With objective indicators agreed in advance, con
tention over which country should initiate action should
be reduced.
The discipline to act -- and to act in a
timely way -- will be stronger.
In the context of such
a system, countries should find it in their own interest
to act early as imbalances are emerging, rather than
simply waiting for imbalances to build up to the point
that the indicator comes into play.
The criteria developed will need to be capable of
being applied evenhandedly to all countries -- large or
small, developed or developing, reserve currency country
or not -- in support of the common objective of dealing
with payments imbalance, whether surplus or deficit.
In
a convertibility system, there is already a direct re
lationship between balance of payments adjustment needs
and reserve changes.
Overall balance of payments m o v e
ments are promptly reflected in changes in official
reserve holdings.
Sooner or later, reserve losses will
force a deficit country to act in any event.
Building on
that natural, but one-sided relationship, use of reserve
changes as the prime objective indicator to discipline the
16
adjustment process for both surplus and deficit countries
seems both straightforward and equitable.
This approach would require that certain standards
be developed for individual countries, taking account of
their needs and desires to hold and accumulate reserves
over time.
These standards for individual countries would,
in turn, need to be consistent with the availability and
growth of reserves in the system as a whole.
Given these
standards, countries experiencing disproportionate losses
or gains of reserves would be expected to initiate
corrective adjustment action.
If the losses or gains
continued to an excessive degree, certain disciplines would
come into play.
At some point, for instance, a country piling up
reserves should lose its right to demand conversion; for,
through conversion, its excessive surplus would create
unwarranted pressures on other countries.
If reserves,
nonetheless, continued to rise, an effective combination
of adjustment measures would be expected.
Ultimately, in
the absence of effective adjustment measures, other
countries should be permitted to protect their interests
17
by such a measure as applying a special surcharge on
imports from the chronic surplus country.
Conversely,
a deficit country persistently refusing to initiate a d
justment measures might be refused credit, its SDR
allocation, or other privileges.
A critical defect of the system in the past was
that, while it required for its sustained operation a
broad equilibrium both in the supply of and demand for
reserves and in balances of payments, there was no
adequate means for assuring either.
An increasing portion
of reserve holdings took the form of reserve currencies;
and that portion became too large to support converti
bility.
Imbalances in payments were not only increasingly
large, but they tended to fall into persistent patterns
-- including a chronic U. S. deficit.
The approach of
using reserves as an objective indicator is aimed at both
problems.
On the one hand, it provides a basis for
achieving greater consistency between the desire to hold
reserves and the total supply of reserves.
On the other
hand, it can provide a needed discipline for guiding the
adjustment process.
18
In sum, the logic of the approach is that:
(a)
there is a need for better balance
of payments adjustment;
(b)
there is a need for better indi
cators to help guide balance of
payments adjustment decisions;
(c)
there is a need for consistency
between the availability of
reserves in the system and the
equilibrium demands; and
(d)
these needs can be brought
together in the context of a
system of established exchange
rates supported by convertibil
ity through a focus on reserve
movements as an indicator of the
need for adjustment.
If all this sounds highly technical and abstract,
I would like to put the essence of the problem in a few
simple propositions.
19
No country wishing to benefit from the enormous
advantages of international trade and investment can be
independent of external influence.
others.
Its actions affect
Others' actions affect it.
Certainly, every country wants a maximum freedom of
action for itself.
Where it can have such freedom with
out impinging adversely on others, it should have it.
We should not demand a particular course of action when
that action is not essential to the whole.
When a rule
is unnecessary, let's get rid of it.
But some rules are necessary.
In terms of inter
national monetary reform, no nation has a right to run
an indefinite surplus or deficit —
when other countries
are unwilling to provide the counterpart.
No nation is
entitled to acquire or manage reserves in a manner in
consistent with other nations meeting their objectives.
Those two simple propositions are the core of the
problem with which we must deal.
The theme of Mr. Shultz's remarks before the IMF
was that we need a new balance in international economic
affairs.
In approaching the problems of monetary reform,
20
balance and equilibrium have a special and precise m e a n
ing beyond the general connotation of stability and good
order.
We lack both kinds of balance today.
Our aim must be to regain balance in both senses of
the word.
That commitment will need to be expressed in
our agreed codes of conduct and in our institutional
arrangements.
I am under no illusion that the process of reform
will be easy.
Vital national interests are at stake.
The real world is incredibly complex.
Yet, the heritage of the past provides the founda
tion for success.
The real glory of Bretton Woods lay
not in the particular form of the institutions it created
or the specific agreements reached.
Rather,
it lay in the
habit of economic cooperation which it fostered and which
is ingrained in our consciousness.
This is a time of new testing.
There have been
enormous shifts in the global balance of power.
The
integration of markets for goods and capital that we
sought so eagerly has brought immense new problems in
its wake.
However inevitable, institutional change —
21
fundamental change —
is always a painful
apid
uncertain
process.
But you know, and I know, all of that.
What's
important is that we approach the job in good spirit
and with willing acceptance of the need to find common
approaches to our problems.
I can report I can see
increasing evidence on all sides of a willingness to do
just that.
1 # # #
DepartmentoftheTRUSURY
IHINGTON. D.C. 20220
3
T E liP H O N f W M -2 0 4 Ì
:
ATTENTION:
ps??
FINANCIAL EDITOR
FOR RELEASE 6:30 P J.
November 13, 1972
RESULTS OF TREASURY'S WEEKLY
BILL OFFERING
The Treasury Department announced that the tenders for two series of Treasury
one series to be an additional issue of the bills dated August 17, 1972
, and
t h e other series to be dated
November 16, 1972 , which were invited on November 6, 1972,
were opened at the Federal Reserve Banks today.
Tenders were invited for $ 2,400,000,000,
or thereabouts, of
91-day bills and for $ 1,900,000,000,or thereabouts, of
182-day
b ills .
The details of the two series are as follows:
b ills ,
RANGE OF ACCEPTED
COMPETITIVE BIDS:
High
Low
Average
91-day Treasury bills
maturing February 15, 1973
Approx. Equiv.
Annual Rate
Price
98.802
98.789
98.793
4.739$
4.791$
4.775$
1/
182-day Treasury bills
maturing May 17, 1975
Approx. Equiv.
Annual. Rate
Price
97.450
97.431
97.437
5.044 $
5.082 $
5.070$
1/
49$ of the amount of 91-day bills bid for at the low price was accepted
95$ of the amount of 182-d.ay bills bid for at the low price was accepted
TOTAL TENDERS APPLIED FOR AND ACCEPTED BY FEDERAL RESERVE DISTRICTS
District
Boston
New York
Philadelphia
Cleveland
Richmond
Atlanta
Chicago
St. Louis
Minneapolis
Kansas City
Dallas
San Francisco
TOTALS
Applied For
$
27,975,000
3,243,740,000
35,010,000
19,755,000
42,660,000
29,970,000
270,800,000
38,050,000
44,730,000
28,240,000
34,105,000
110,790,000
Accepted
$
13,465,000
2,052,620,000
15,010,000
19,740,000
18,640,000
16,250,000
92,170,000
23,030,000
33,965,000
18,380,000
11,840,000
86,980,000
$3,925,825,000 “$2,402,090,000 a/
Applied For
$
20,830,000
3,107,000,000
35,685,000
34,335,000
61,205,000
13,215,000
301,275,000
46,085,000
25,180,000
22,225,000
39,465,000
199,820,000
Accepted
$
4,830,000
1,643,050,000
6,685,000
9,235,000
24,955,000
8,630,000
53,390,000
25,535,000
9,180,000
10,225,000
8,765,000
96,320,000
$3,906,320,000
$1,900,800,000
y Includes $169,890,000 noncompetitive tenders accepted at the average price'of 98.793
y Includes $ 92,100,000 noncompetitive tenders accepted at the average price of 97.437
1/ These rates are on a bank discount basis. The equivalent coupon issue yields are
4.90$ for the 91-day bills, and 5.28$ for the 182-day bills.
§
DepartmentoftheTREASURY
ASHINGTON. O C 20220
TELEPHONE W04-2041
2
FOR IMMEDIATE RELEASE
November 14, 1972
WITHHOLDING OF APPRAISEMENT OF
IMPRESSION FABRIC OF MAN-MADE FIBER FROM JAPAN
The withholding of appraisement of impression fabric
of man-made fiber from Japan pending a determination as
to whether it is being sold at less than fair value within
the meaning of the Antidumping Act, 1921, as amended, was
announced today by Assistant Secretary of the Treasury
Eugene T. Rossides.
This impression fabric is used for
typewriter ribbon and computer tape.
The decision will appear in the Federal Register of
November 15, 1972.
Under the Antidumping Act, the Secretary of the
Treasury is required to withhold appraisement whenever he
has reasonable cause to believe or suspect that sales at
less than fair value may be taking place.
A final Treasury decision in this investigation will
be made within three months.
Appraisement will be withheld
for a period not to exceed six months from the date of
publication of the "Withholding of Appraisement Notice" in
the Federal Register.
Under the Antidumping Act, a determination of sales in
the United States at less than fair value requires that the
case be referred to the Tariff Commission, which would
consider whether an American industry was being injured.
Both
sales at less than fair value and injury must be shown to
justify a finding of dumping under the law.
Upon a finding of
dumping, a special duty is assessed.
During the period of September 1971 through May 1972,
imports of impression fabric of man-made fiber from Japan
totaled approximately, $900,000.
DepartmentofthefREASURY
TELEPHONE W04-2Q41
ISHINGTON, D C 20220
FOR IMMEDIATE RE .EASE
November 14, 1972
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 $4,300,000,000, or thereabouts, for
cash and in exchange for Treasury bills maturing
November 24, 1972,in the amount
of $4,102,680,000, as follows:
90 -day bills (to maturity date) to be issued November 24, 1972, in the amount
of $2,400,000,000, or thereabouts, representing an additional amount of bills
dated August 24, 1972,
and to mature February 22, 1973
originally issued in the amount of $1,800,540,000,
(CUSIP No. 912793 Qp4),
the additional and original
bills to be freely interchangeable.
181-day bills, for $1,900,000,000, or thereabouts, to be dated November 24, 1972,
and to mature
May 24, 1973
(CUSIP No. 912793 QV1 ).
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 $10,000, $15,000, $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 clos
ing hour, one-thirty p.m., Eastern
Standard time, Monday, November 20, 1972.
Tenders will not be received at the Treasury Department, Washington.
must be for a minimum of $10,000.
$5,000.
Each tender
Tenders over $10,000 must be in multiples of
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.
may not be used.
Fractions
It is urged that tenders be made on the printed forms and for
warded 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
(
niZEE
-
account.
2-
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.
Im m e d ia te ly a f t e r th e c l o s i n g h o u r, te n d e rs w i l l be opened a t th e F e d e ra l
r^e Banks and Branches, following which public announcement will be made by
the Treasury Department of the amount and price range of accepted bids.
Only those
submitting competitive 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 each
issue for $200,000 or less without stated price from any one bidder will be accepted
in full at the average price (in three decimals) of accepted competitive bids for
the respective issues.
Settlement for accepted tenders in accordance with the
bids must be made or completed at the Federal Reserve Bank on
November 24, 1972,
in cash or other immediately available funds or in a like face amount of Treasury
bills maturing
treatment.
November 24, 1972.
Cash and exchange tenders will receive equal
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.
Under Sections 454(b) and 122l(5) of the Internal Revenue Code of 1954 the
amount of discount at which bills issued hereunder are sold is considered to accrue
when the bills are sold, redeemed or otherwise disposed of, and the bills are ex
cluded from consideration as capital assets.
Accordingly, the owner of Treasury
bills (other than life insurance companies) issued hereunder must include in his
income tax return, as ordinary gain or loss, the difference between the price paid
for the 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.
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.
of
theTREASURY
Department
Washington, d .c
20220
TELEPHONE W04-2041
le t ,
FOR RELEASE IN PM'S
WEDNESDAY, NOVEMBER 15, 1972
REMARKS BY THE HONORABLE EDGAR R. FIEDLER
ASSISTANT SECRETARY OF THE TREASURY FOR ECONOMIC POLICY
BEFORE THE NATIONAL ECONOMISTS CLUB SEMINAR
MAYFLOWER HOTEL
WASHINGTON, D. C.
WEDNESDAY, NOVEMBER 15, 1972
ON THE IMPACT OF CONTROLS
The rate of inflation has diminished.
My family and
my noneconomist friends would seriously question that s t a t e
ment, and understandably so, but among economists and others
who watch the statistics closely there is wide agreement
that both prices and wages are increasing at a slower rate
than before the controls were put in place 15 months ago
today.
Inflation Scoreboard
Most statistical series on prices and wages reveal the
slowdown, as shown in Table I and Charts 1 and 2, a t t a c h e d .
The most decisive evidence is found in the broadest price
measures we have, those from the GNP data, which show a
cut-back in the rate of inflation to about 2 3/4 percent
in the first year of the stabilization pro gram, compared to
about a 5 percent rate from 1969 through e arly 1971.
The
consumer price index also shows a pronounc ed but more gradual deceleration of inflation over these y ears.
The slowdown
is less decisive as measured by the wholes ale price index,
which is narrower in coverage and historic ally more volatile
than the o t h e r s .
On the wage side, the adjusted hourly earnings index
has increased at a rate of 6.1 percent during the stabiliza
tion program, compared to about 7 percent previously.
Wage
increases in major collective bargaining settlements (which
data provide very narrow coverage relative to the hourly
earnings series) have averaged 6.6 percent in the first
three quarters of 1972, compared to over 8 percent in 1971
prior to the c o n t r o l s .
S - 74
no
2
Thus, the evidence shows a clear, but not uniform,
deceleration in the rate of inflation.
Price inflation
has been cut by perhaps 2 percentage p o i n t s . The growth
of wage rates appears to have been slowed by a percentage
point or more.
On balance, it seems fair to conclude that
we have gone from about a 5 percent inflation world to a
3 percent inflation world.
The comparisons mentioned thus far have treated the
first year or so of the stabilization program as a single
period of time’. It is possible, of course, to separate out
the various phases of the stabilization program -- the freeze,
the post-freeze bulge, and the subsequent period.
However,
there does not appear to be any analytical pay dirt in doing
so.
The freeze did stop the upward movement of prices and
wages almost completely for ninety days.
The expected p o s t
freeze bulge occurred on the wage side, though little evidence
of it appears in the price series.
(Evidently, the p o s t
freeze bulge in prices was diffused through all of Phase II.)
Subsequently, the data settled down and, during the eight
months or so since the post-freeze bubble, do not reveal any
patterns -- within that time period -- that would appear to
be analytically interesting.
Contribution of the Controls
The fact that the pace of price and wage inflation has
been cut back since the stabilization program was put in
place, coupled with the fact that the deceleration was abrupt
and coterminous with the onset of the program, has led many
analysts to the conclusion that the controls, by themselves,
were primarily responsible for that deceleration.
Others
have challenged this view, in particular by pointing to the
economic slack in the utilization of our manpower and capital
resources.
Some have even concluded that the economic slack
accounts for all of the slowdown in inflation, and that the
controls have been a pointless exercise.
My own view is that there have been three important
factors that jointly account for the inflation slowdown:
the controls, the economic slack, and the improved cost
picture that was brought about by accelerated growth.
3
That the economic slack -- underutilized equipment and
jobless workers JR is exerting some downward pressures on
prices and wages is apparent from several s o u r c e s . There
are many reports that price increases approved by the Price
Commission have not been put into effect because of c o m p e
titive pressures.
Moreover, a close look within the
Wholesale Price Index reveals that 36 different product
classes -- 13 percent of the total -- experienced an actual
decline in prices during the first 12 months of the s t a b iliza
tion program.
Similarly, many wage settlements are totalling
less than the general Pay Board standard of 5.5/6.2 percent.
Pay Board data show that one-sixth of their approvals call
for a wage increase of 3 percent or less, and more than 40
percent involve an increase that is below 5 percent.
These
several pieces of evidence suggest that economic slack has
played a part in slowing the rate of both price and wage
inflation.
The third factor, the impact of economic growth on the
cost structure of business, has received little attention to
date.
The process, a familiar one to business cycle analysts
but not otherwise well known, is: 1) an acceleration of the
growth in economic output takes place, 2) with this faster
output growth comes an upswing in the rate of productivity
growth (in fact, cause and effect run both ways, with each
factor reinforcing the o t h e r ) , 3) the better productivity
performance produces a slower rise in unit costs, 4) which
in turn reduces the upward pressure on p r i c e s .
¡b That this process has taken place over the past year is
clearly demonstrated in Chart 3.
That it has played a role
in the deceleration of inflation is suggested by the evidence
that price inflation has slowed more than wage inflation.
I want to emphasize my view that the inflation slowdown
was the joint product of the three factors.
I doubt very
much -- based on the past record of incomes policies here and
abroad -- that the stabilization program could have made
significant headway in the absence of economic slack.
The
slack, however, had not shown much effectiveness in putting
the brakes on inflation before August 1971.
And the a c celera
tion of output growth, which brought with it the improved
cost performance, was strongly helped by the fact that i n
flation slowed down.
Thus, the three factors - - c o n t r o l s ,
slack, and output growth -- reinforced one another in bringing
about the slowdown in inflation.
Other Effects of the Controls
Slowing inflation was and is the name of the game, so
the stabilization program must be rated a success for having
contributed significantly to that achievement.
At the same
time, we want to know what other effects, if any, the program
may have had on the economy.
Clearly the program has had other effects , some u n
desirable and some beneficial.
For example, the inflationary
expectations of businessmen and workers have been brought
down this past year, along with the rate of inflation itself.
Another beneficial effect is that the economic importance
of productivity has become much more widely known.
The r e
lationship between the general standard of the Pay Board and
the overall inflation goal of the Price Commission has made
the role of productivity much more widely understood than
before.
The explicit requirement by the Price Commission
that the i n d u s t r y ’s trend rate of productivity growth be
taken into account on an application for price increases has
focused the attention of business managements on the p r o d u c
tivity growth achieved by their own firm.
This increased
attention and understanding of a crucial economic concept is
all to the good, not only in the fight against inflation but
in other ways as well.
Still another beneficial effect of the program is the
improvement that it has brought about in the real earnings of
workers.
From 1965 to 1970, real earnings increased very
slowly as the large increases in nominal wages were s u b
stantially chewed away by rising prices.
In the past couple
of years, however, the average worker has seen the purchasing
power of his paycheck make headway again, despite the fact
that his nominal wage gains are not as large as before.
The
better price performance has meant that the real purchasing
power of his pay has increased sharply.
This improvement in real earnings is one argument, and
the reduction in inflationary expectations is another, against
the re-emergence of excessively large wage settlements in 1973.
It has become conventional wisdom recently that - - l e a v i n g
aside the controls program for the moment -- next year's heavy
bargaining calendar, which includes some especially prominent
u n i o n s , and a reduction of the unemployment rate to below
5 percent will bring on a new round of large wage settlements.
These large union settlements, it is said, will be emulated
throughout the economy and will thereby set off a new inflationarry s p i r a l .. I .believe, however, that the sharp upswing
in ^reallearnings will reduce considerably the pressures for
particularly large wage g a i n s .
:T9gBnnm To
sn o isxo e i:
T. A second factor that should reduce such pressures is
the fact that the large unions that will be bargaining next
year -- e.g., auto workers, electrical workers, teamsters -have achieved a significant catch-up in their wages relative
to other workers over the past three years.
Generally speakin
the wage increases under long-term contracts negotiated by
these unions in earlier years did not fully anticipate the
subsequentirate ofninflation and the continuing acceleration
ofjwage i S e t t l e m e n t s . As a result, traditional wage r e l a t i o n
ships got Out of line.
In 1970, therefore, these unions,
despitexthe existence of substantial economic slack, won very
large catch-up s e t t l e m e n t s .
Since 1970, however, the rate of inflation has been cut
sharply and the level of wage settlements has been reduced.
This has restored the relative wage position of workers in
the 1970-to-73 bargaining cycle vis-a-vis the rest of the
economy.
Accordingly, there is much less reason now for
theseaunions' to demand above-average wage increases than
in the'rilasf roundoqf bargaining.
ToflsInGaddition,,ifit is arguable how instrumental out-ofline settlements in these industries -would be in setting off
a renewed wage-price spiral.
While the collective bargaining
calendar is heavier in 1973 than this year, the number of
workers included in next y e a r ’s major negotiations still
represents only about 5 percent of the total work force.
Although there is clearly emulation in wage settlements from
one union to another and between the union and nonunion sector
the^vast majority of all wage determination in our economy is
carriedodn in informal ’’n egotiations” , often just between
individuals and their supervisors.
In the past, out-of-line
settlements achieved by prominent unions, either larger or
smallefceithan:?average, have not set an unbreakable pattern
for the rest of the economy.
Some analysts have argued,
furthermore, that union settlements trailed rather than led
the acceleration of price and wage inflation during the
1965-1970 period.
Consequently, there is no reason to believe
that the prominent 1973' negotiations will automatically set
the: pace for all of the w o r k f o r c e .
6
Dislocations
One of the most common worries about any system of prico
and wage controls is that they will disrupt the normal opera
tions of the economy -- that they will create resource mis-^ ;
allocations and distort the judgment and decisions of managers
to the point of creating serious economic inefficiencies.
In
an economy as complex as ours, some distortions are inevitable
in any system of wage and price controls.
A rigid control system like the wage-price freeze of
August to November 1971 is sure to create serious distortions
if continued for very long.
It was for this reason that the
freeze was limited to three months duration.
In planning
Phase II, a conscious effort was made to provide sufficient
flexibility to avoid economic misallocations and distortions;
The most important result of this effort was the general oprinciple adopted by the Price Commission that price increases
were to be based on the pass-through of cost increases.
Another example was the term-limit-pricing rule adopted by
the Price Commission.
On the pay side, the Pay Board provided
for a variety of exceptions to its general wage standard.
For the most part, the Phase II controls appear to have
generated few important economic distortions.
Some undesirable
changes in business practices have been reported, but¡most of
these have been of little significance.
Where they were
significant, the stabilization authorities have made an effort
to correct the situation.
One way of testing the proposition that there has been
sufficient flexibility built into the control system is to
examine the behavior of prices and wages in detail, and to
compare the pattern of changes during the controls period
against the pattern in previous years.
For example, an
examination of wage changes in major collective bargaining
agreements during the first three quarters of 1972 shows
a widely varying pattern with many increases above the
general standard and many below -- a pattern that is not
dissimilar to the patterns of wage settlements recorded
for 1970 and 1971.
Similarly, a look at the detail within the Wholesale
Price Index by 271 different product classes also shows
a wide dispersion of price changes that is not dissimilar
to pre-control years.
If the price movements of individual
product classes during the freeze had been concentrated in
a much narrower range than in earlier years, we might have
concluded that the stabilization program was disrupting the
normal pricing practices of business firms in a serious way.
However, since both prices and wages show a pattern for 1972
that is similar to earlier years, we may conclude, albeit
rather tentatively, that widespread, serious economic
distortions have thus far not developed.
Signs of Demand-Pull
In the analysis of the variou s components of the Wholesale Price Index, a second interes ting point emerged. When
the subgroups of the Wholesale Pri ce Index are listed in order
of their price increases during th e first year of the controls
program, 20 commodity subgroups ar e seen to have experienced
an increase of 6 percent or more -- ranging from hides and
skins at 112 percent down to live poultry at 6 percent (see
Table 2, attached). Seventeen of these 20 subgroups are
concentrated in just three areas: raw agricultural commodities
and related processed foods; hides and leather; and lumber,
The other three subgroups are wast epaper, gas fuels, and
railroad equipment.
In almost every case it appears that strong increases
in demand or supply shortages are responsible for the sharp
run-up in prices. Of these 20 groups, only gas fuels and
railroad equipment are In industries where "administered
pricing" is sometimes alleged (and the price increase for
gas fuels can quite possibly be traced to a rise in demand
because of environmental considerations). In every other
case, I believe, there would be general agreement among
economists that highly competitive markets exist.
The nature of this list -- i.e., the fact that almost
all of these price increases are traceable to supply-demand
imbalances, the kind of inflation that the stabilization
program was not designed to deal with -- suggests two con
clusions. First, it suggests again that the stabilization
program, by allowing the pass-through of cost increases, and
by exempting raw agricultural products and used products
such as wastepaper, has provided a flexibility that permits
the price system to carry out its traditional functions of
rationing and resource allocation. Second, the nature of
the list raises a question about the efficacy of the controls
program during some future period -- e.g., when full employ
ment is approached -- when demand-pull inflationary pressures
become more widespread.
Problem Sectors
Although economic distortions do not currently appear
to be numerous, there is one major sector of the economy
where significant distortions are reported: softwood lumber,
which is under heavy demand-pull pressure from the extra
ordinary boom in homebuilding. It is widely reported by
industry sources that:
-- Lumber production is being held 5 to 10 percent
below levels that would be achieved in the
absence of controls, primarily to avoid violation
of the Price Commission's profit margin rule.
-- Minor operations are being performed on standard
cuts of lumber to create "new products” that
are exempt from price control.
-- Railroad cars full of lumber are being shipped
around the country from middleman to middleman,
accumulating markups (which are individually
legal) but not getting the lumber to the final
user.
-- Phony export and re-import transactions are
being recorded -- the paperwork is there but
no lumber ever leaves the country -- to
circumvent the Price Commission's regulations.
There may be similar problems in the medical field,
although in this case the evidence is thin.
In the past year,
the rate of increase in medical care prices as recorded in
the Consumer Price Index has been cut very sharply. Hospital
service charges have increased at a 4.8 percent annual rate
during the stabilization program, compared to a rate of about
12 percent earlier. Physicians' fees have increased at
a 2.3 percent rate during the program, compared to about
7 percent previously. At the same time, however, total
hospital expenses per patient day have been increasing at
a rate of about 11-1/2 percent over the past year, only
slightly lower than in previous years.
&
9
This suggests the possibility that the number of medical
care services provided to each patient has been increased
sharply. It suggests, for example, that patients are having
their blood tested more frequently than in previous years,
and that other services are being provided more frequently.
It raises the question of whether the hospitals are circum
venting the price regulations by providing a greater volume
of unnecessary services in order to raise the total cost to
the patient. The evidence here is only circumstantial, but
it is enough to indicate the possibility that the control
program is significantly distorting the provision of medical
care services.
Summing Up
The basic goal of the Cost of Living Council was to
reduce the rate of inflation to below 3 percent by the end
of 1972. The stabilization program, operating in conjunction
with a moderate degree of economic slack and an improved cost
picture arising from the acceleration of economic growth,
appears to have achieved this goal..-- or at least come very
close to it. It has done so despite the emergence of strong
demand-pull inflationary forces in such major industries
as food, lumber and leather.
The stabilization program also produced a number of
side effects, some of them beneficial, others detrimental.
The program has focused increased attention on and under
standing of the economic role of productivity.
It has reduced
inflationary expectations and increased the purchasing power
of workers' paychecks, thus setting the stage for less
inflationary price and wage decisions in the future. The
program has provided considerable flexibility for the economy,
thereby allowing the price system to continue its functions
of rationing and resource allocation. By and large, few
major inefficiencies and inequities have appeared, except
perhaps for lumber and, possibly, medical care.
Taking all the pieces together, the stabilization program
has made an important contribution to the achievement of a maj or
goal of economic policy, and it has done so without inflicting
much economic injury. If the controls wer e to be continued
indefinitely, however, major inefficiencie s and inequities
would develop.
TABLE 1
MEASURES OF PRICE AND WAGE INFLATION
BEFORE AND DURING THE ECONOMIC STABILIZATION PROGRAM
(Seasonally adjusted percent changes at annual rates)
Stabilization
Program to
Early
1971Ê./
Date£/
1969Ë/
197 0Ë./
GNP Price Deflators
Total
Private, fixed weights
5.3
5.1
5.3
4.5
5.1
5.0
2.6p
2.8p
6.1
7.2
4.5
7.4
3.8
5.5
2.2
4.8
8.2
4.5
3.8
5.0
2.9
4.6
4.3
3.2
4.2
2.3
3.4
3.3
4.8
2.2
5.2
4.0
7.5
3.9
-1.4
3.6
6.5
4.7
7.7
2.6
2.9
4.6
4.0
4.9
2.2
3.7
1.6
1.5
3.8
3.1
5.9
3.1
10.3
4.6
2.8
8.1
6.5
7.6
6.8
8.9
7.1
8.6
6.1
6.6
Consumer Price Index
All items
Food
Commodities less food
Services^/
Rent£/
Wholesale Price Index
All commodities
Farm products, processed
foods, feeds
Industrial commodities
Consumer commodities,
excluding food
Producer finished goods
Intermediate materials,
excluding food
Crude materials, excluding food
Wages
Hourly earnings®/
Negotiated wage changesf/
For footnotes, see reverse side.
2
FOOTNOTES
a/
For monthly series, December to December; for quarterly
series, fourth quarter to fourth quarter.
b/
For monthly series, December 1970 to August 1971; for
quarterly series, fourth quarter 1970 to second quarter
1971.
c/
For consumer prices, August 1971 to September 1972; for
wholesale prices and hourly earnings, August 1971 to
October 1972; for GNP series, third quarter 1971 to
third quarter 1972 (preliminary); for negotiated wage
changes, first three quarters of 1972.
d/
Not seasonally adjusted; data contain almost no seasonal
movements.
e/
Earnings of private nonfarm production workers, adjusted
for interindustry shifts and for overtime in manufacture.
f/
Average wage change over life of contract in collective
bargaining agreements covering 1,000 or more employees
decisions reached during 1969, 1970, first half of 1971
and first three quarters of 1972 (not seasonally adjusted
November 13, 1972
TABLE 2
LARGEST INCREASES IN SUBGROUPS OF THE
WHOLESALE PRICE INDEX, AUGUST 1971 TO AUGUST 1972
Subgroup
Percent Increase
1.
Hides § Skins
2. Plant § Animal fibers
3. Wastepaper
4. Leather
5. Livestock
6 . Fresh § Dried Fruits § Vegetables
7. Other Farm Products
8 . Plywood
9. Meats, Poultry, § Fish
10. Lumber
11. Other Leather
Related products
12. Cotton Products
13. Wool Products
14. Footwear
15. Grains
16. Manufactured Animal Feeds
17. Gas Fuels
18. Other Wood Products
19. Railroad Equipment
20. Live Poultry
112.0%
29.1
23.1
22.9
22.1
19.8
18.2
12.8
12.4
11.9
9.7
9.2
9.1
8.0
7.5
6.7
6.6
6.6
6.3
6.0
" L O' 3>
C//4/ÎT /
MEASURES OF PRICE INFLATION
BEFORE AND DURING THE
ECONOMIC STABILIZATION PROGRAM
Percent—
B l
15
Price Deflator, Private Gross Product
5.1
45
5.0
2.8
Consumer Price Index
Wholesale Price Index
52
11
HO
22
0
1 9 69
1970
SEE MOTES TO TABLE 1.
Early1971
Stabilization
Program to Date
4
C
H
A
R
T
2
MEASURES OF WAGE
CHANGES
fi1
TV
limi'j."
Sill,I
MfuI
111
1969
1970
SEE NOTES TO TABLE 1.
Early1971
Stabilization
Program to Date
CHARTS
C H A N G E S IN O U TP U T PRODUCTIVITY
AND UNIT LABOR COSTS,PRIVATE ECONOMY
P e rc e n t—
Output
76
0.5
2.3
I
Productivity
3.2
M
¡i
ifi
Unit Lab o r Costs
7/
1Q68W-
1969W
m ow 1970m
3.8
1.3
idiom r- 1971m197ITE 1972mp
of
theTREASURY
Department
ASHINGTON, D C; 20220 g- • TELEPHONE W04-2041 ,
FOR IMMEDIATE RELEASE
November 15, 1972
TREASURY’S MONTHLY BILL OFFERING
The Treasury Department, by this public notice, invites tenders for
$1,800,000,000, or thereabouts, of 355-day Treasury bills for cash and in exchange
for Treasury bills maturing November 30, 1972, in the amount of $5,803,525,000.
The bills of this series will be dated November 30, 1972, and will mature
November 20, 1973 (CUSIP No. 912793 RE8).
The bills will be issued on a discount basis under competitive and noncom
petitive 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 $10,000, $15,000, $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, Wednesday, November 22,
1972.
Tenders will not be received at the Treasury Department, Washington.
Each tender must be for a minimum of $10,000.
multiples of $5,000.
Tenders over $10,000 must be in
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
a®.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.
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.
Only those submitting competitive tenders will be advised of the acceptance or
rejection thereof.
The Secretary of the Treasury expressly reserves the right
to accept or reject any or all tenders, in whole or in part, and his action in
any such respect shall be final.
Subject to these reservations, noncompetitive
tenders for $200,000 or less without stated price from any one bidder will be
accepted in full at the average price (in three decimals) of accepted competi
tive bids.
Settlement for accepted tenders in accordance with the bids must
be made or completed at the Federal Reserve Bank on November 30, 1972, in cash
or other immediately available funds or in a. like face amount of Treasury bills
maturing November 30, 1972.,
treatment.
Cash and exchange tenders will receive equal
Cash adjustments will be made for differences between the par value
of maturing bills accepted in exchange and the issue price of the new bills.
Under Sections 454(b) and 122l(5) of the Internal Revenue Code of 1954 the
amount of discount at which bills issued hereunder are sold is considered to
accrue when the bills are sold, redeemed or otherwise disposed of, and the bills
are excluded from consideration as capital assets.
Accordingly, the owner of
Treasury bills (other than life insurance companies) issued hereunder must
include in his income tax return, as ordinary gain or loss, the difference
between the price paid for the bills, whether on original issue or on subsequent
purchase, and the amount actually received either upon sale or redemption at
maturity during the taxable year for which the return is made.
Treasury Department Circular No. 418 (current revision) and this notice,
prescribe the terms of the Treasury bills and govern the conditions of their
issue.
Branch.
Copies of the circular may be obtained from any Federal Reserve Bank or
DepartmentoftheJR[J[$llRY
SHINGTON, D C. 20220
TM È
TitlPHOWE W04-2041
FOR IMMEDIATE RELEASE
November 17, 1972
TREASURY ANNOUNCES EXEMPTIONS AND INTERPRETATIONS
RELATING TO THE REGULATIONS ISSUED UNDER PUBLIC LAW 91-508
Exemptions and interpretations relating to the regulations
implementing Public Law 91-508, the Currency and Foreign
Transactions Reporting Act, were announced today by Assistant
Secretary of the Treasury Eugene T. Rossides.
This material,
which will be published shortly in the Federal Register,
includes an exemption from the requirement that a taxpayer
identification number be obtained by banks with respect to
Christmas Club accounts on which the annual interest is not
anticipated to exceed $10.00.
A copy of the Notice is attached.
S-75
MORE
</
NOV 17 1372
N O T I C E
DEPARTMENT OF THE TREASURY
MONETARY OFFICES
INTERPRETATIONS OF AND EXEMPTIONS FROM THE TREASURY
DEPARTMENT REGULATIONS ISSUED TO IMPLEMENT
TITLES I AND II OF PUBLIC LAW 91-508
Introduction
Advice has been requested by persons subject to
these regulations concerning the conclusions of the
Treasury Department on the application of the law and
the regulations, and requests have been received for
exemptions from various requirements of the regulations
which were published on April 5, 1970, 37 F.R. 6912
(1972), pursuant to the authority contained in Section
103.45 of the regulations.
Interpretations made and
exemptions granted up to this time are set forth below.
Additional interpretations and exemptions will appear
from time to time as the occasion warrants.
Identifying
details and confidential information have been deleted
to prevent unwarranted invasions of privacy and to comply
with statutory requirements concerning disclosure of
information obtained from members of the public.
2
Sec. 103.11 - Exemption From
1. The definition of a bank as appears in Sec. 103.11
(a)(7) was not intended to include a company which is
wholly engaged in financing inventories and retail in
stallment sales of automobile dealers.
Such a company
requested and was granted an exemption from the record
keeping and reporting requirements of Part 103, Title 31,
Code of Federal Regulations.
However, if said company is
a "financial institution" within the meaning of Sec. 103.11
(other than as a "bank")
it would, of course, have to com
ply with those provisions of this part relating to fi
nancial institutions other than b a n k s .
Sec. 103.23 - Interpretations
1. Unless a transaction in foreign currency for clients
who are nonresidents of the United States and performed
through brokers outside the U.S. involves the physical
transportation, mailing or shipment of currency, bearer
investment securities or negotiable i struments in bearer
form into or out of the U. S . in amounts exceeding $5,000
on any one occasion, there is no duty to report the trans
fer.
A transfer of funds by means of bank check, bank
draft, or wire transfer need not be reported.
3
2.
A bank is not required to prepare Form 4790 if the
bank receives such items over the counter from a person
who may have transported them into the United States
or if the bank delivers such items over the counter to
a person who may transport them out of the United States.
Howeverf if a bank knows that such items have been
transported into the country, it must file a report on
Form 4790 if a complete and truthful report has not been
filed by the customer.
3.
Sec. 103.23(c) provides that a bank is not required
to report currency or other monetary instruments mailed
or shipped through the postal service or by common carrier.
When a trust company is acting as a corporate executor or
corporate trustee, no report need be filed with respect to
currency or bearer monetary instruments mailed or shipped
through the postal service.
4.
In the case where a trust company acts as custodian
for individual executors and trustees who maintain Custody
Accounts for those estates and trusts where they are named
fiduciary, it will be necessary to file a Form 4790, Report
of International Transportation of Currency or Monetary
Instruments, under the circumstances described in Sec. 103.23(a)
5.
A private courier service does not qualify as a
"common carrier" under the regulations.
4
Sec.
103.23 - Exemptions From
1. A bank whose employees physically transport currency
across the Canadian border on a weekly basis for deposit
with a Canadian bank which is only a few hundred yards
away requested an exemption from the requirements of
Sec. 103.23.
Due to the special circumstances, the Depart
ment granted the request provided that an accurate record
of such transfers is maintained by the bank*
2. A bank in Maine, which for a period of more than twenty
years, has used its personnel to physically transport
sums of currency and checks in excess of $5,000 to and
from a bank in a contiguous Canadian town several times
a month, requested and was granted an exemption from the
reporting requirements of Sec. 103.23 due to the special
circumstances involved.
The Department, however, does
require the bank to maintain an accurate account of such
transfers.
3. An exemption is granted to any merchant shipping company
from the requirement to report the transportation into or
out of the United States of currency or bearer instruments
in amounts in excess of $5,000 with respect to currency
or bearer instruments placed on board ship by the owner or
o
5
operator in order to provide for reasonable shipping
needs. Records of such monies placed on board are
to be maintained by the shipping companies.
4.
A company that transports sealed packages
containing money and valuables under written
bilateral contracts for banks, brokerage houses, and
security dealers requested an exemption from the
requirements of this section.
Under the provisions
of Sec. 103.23 (c) (7), such companies are exempt
from reporting the transportation of currency or
monetary instruments overland between established
offices of banks or brokers or dealers in securities
and foreign banks.
The company in question is further
granted an exemption from reporting overland ship
ments between domestic banks, brokers or security
dealers and foreign'persons. However, all firms
engaged in international carriage of valuables by
air must continue to file with the Bureau of Customs
reports of international air shipments.
6
Sec. 103.33(a)
1.
- Interpretation
This regulation requires the keeping of records,
the majority of which are already kept by financial
institutions.
The typical loan application form
asks the applicant to state the purpose of the loan,
so it would seem normal in the case of each extension
of credit in an amount in excess of $5,000 for the
record to contain a reference to the nature or the
purpose of the loan.
However, if it is a passbook
loan, for example, the entry "passbook loan" would
suffice.
Sec. 103.34(a)
1.
- Interpretations
Any citizen residing or doing business in the
United States and any citizen of the United States
who opens an account with a financial institution
after June 30, 1972, must provide that institution
with his taxpayer identification number at the time
the account is opened.
For individuals, the taxpayer
identification n u m b e r .is his social security number,
for corporations, partnerships, and other entities,
it is the IRS employer identification number.
7
Banks, savings and loan associations, building and
loan associations, savings banks, credit unions, and
brokers and dealers in securities are included in this
requirement.
If an account is opened in more than one
individual's name, the financial institution is required
to secure and maintain the social security number of at
least one individual having a financial interest in that
fit
ff
i
kj
l
account.
If the customer does not have a taxpayer identification
i
number or has lost his card and is unaware of his number,
iff
the account may be opened provided the customer (of if
under eighteen years of age, his guardian)
authorizes the Social!
Security Administration to furnish his social security
number to both the customer and the financial institution,
or the customer, regardless of age, authorizes the
■■
internal Revenue Service to furnish his employer identification number to both the customer and the financial
*iii
^
P
institution.
act
With respect tb accounts opened for trusts, charitable
organizations, clubs and similar entities the financial
institution should secure the employer identification
number of the entity.
An employer identification number
must be obtained for this purpose even though an organiza
tion might not otherwise require one.
published July 6, 1972
(37 F.R. 13279).
See instructions
ft
8
2*
This requirement of a taxpayer identification number
does not apply to aliens who are ambassadors, ministers,
career diplomatic or consular officers, or to naval, mili
tary and other attaches of foreign embassies and legations,
and the members of their immediate families, nor to aliens
who are accredited representatives to international organiza
tions entitled to enjoy privileges, exemptions and immunities
as an international organization under the International Or
ganizations Immunities Act of December 29, 1945
(22 U.S.C.
288), and the members of their immediate families.
3.
In regard to determining the proper identifying number
to be furnished by accounts opened in more than one name,
the bank should follow the regulations and rulings issued
by the Internal Revenue Service under Section 6109 of the
Internal Revenue Code.
of IRS Form 3435.
These rules are outlined on the back
However, the bank should not use Form 3435|
to apply for a taxpayer identification number for a new ac
count, but should instead use Form SS-4 or SS-5.
4.
The bankruptcy estate of an individuax or partnership is
considered as a separate entity from the individual or part
nership.
However, the Treasury Department does not regard
the estate of a corporation in bankruptcy as an entity separal
9
from the corporation.
Accordingly, the trustee of a
corporation in bankruptcy should use the identification
number of the corporation.
Upon completion of the IRS
Form SS-4 with an appropriate authorization to furnish
the Employer Identification Number to the institution,
a trustee will be pernitted to make deposits.
He need
not wait until the Employer Identification Number is
obtained.
5.
All accounts that are primarily savings or checking
accounts, with the exception of mortgage escrow accounts,
are deposit accounts and are subject to the requirements
of this section.
6.
Where a person purchases a money order directly from
the bank or through an agent of the bank and the bank
maintains only a consolidated account with no separate
record by customer, no deposit account has been opened
by the customer and only those recordkeeping requirements
normally applicable to/cashiers* checks T ould apply.
7.
Where a person re-opens a checking account after
June 30, 1972, the bank is required to secure the social
security number just as with a new account, and the same
would apply to the automatic extension of a certificate
of deposit.
10
8.
A certificate of deposit sold in bearer form is
an interest-bearing form of commercial paper, which
need not be purchased from the bank, but is available
in the money market.
It is not a deposit account as
that term is used in the regulations and no identifi
cation number need be obtained.
In the case of regis
tered certificates of deposit, the taxpayer identifica
tion number must be secured.
9.
A credit card program operated by a bank does not
involve a deposit account and is not, therefore, subject
to the requirements of this section.
10. Section 103.34(a) exempts nonresident aliens not do
ing business in the United States from the requirement
to furnish the bank with a taxpayer identification number.
If an alien asserts that he is neither residing nor doing
business in the United States a bank therefore may open
the account without obtaining a taxpayer identification
number, provided that it secures a statement from the
person to that effect and provided the bank is unaware
of any facts inconsistent with that statement.
Normal
banking practices for ascertaining identity and location
of customers should be followed.
All nonresident aliens
in the United States should have one of the following U.S.
Immigration and Naturalization Service forms:
11
1.
Form 1-151 (Alien Registration Receipt Card)
2.
Form 1-185
(Nonresident Alien Canadian Border
Crossing Card)
3.
Form 1-186
(Nonresident Alien Mexican Border
Crossing Card)
a &im bjsw sboD
4.
Form 1-9 4
(Arrival-Departure Record) :,; i-
5.
Form 1-95A (Alien Crewman's Landing Permit)
6.
Form 1-184
(Alien Crewman's Landing Permit
and Identification Card)
The bank should maintain a record of the applicant's
"• *7'"t
D&3am9X&
country of citizenship and the number assigned him on
i 0¿>9*5 VBQ G&
his INS form or other official document issued by the
applicant's government.
11.
In regard to a business firm opening an account in
the name of employees who are foreign nationals not re,*mo -j8y3 yd x xsjdss
siding in the United States, the bank may open the account
'.'oni/oip suoxpxJCsi: f i o
for them without securing a taxpayer identification number
pursuant to this section provided that the bank is satisfied
that the persons are non-resident aliens not doing business
in the United States.
The bank should verify the identity
KiX/O iXO idJSOJ ^ r ~tr f g h r
and whereabouts of such persons and require *the business
q
noqo od s i s a s d i
firm to supply for each such account a statement to the
di 5 x dnxjooofi
effect that the employee is a non-resident alien riot doing
business in the United States.
12
12.
It is acknowledged that the "Old Order Amish"
people do not accept social security benefits or pay
self-employment tax.
In 1965, the Internal Revenue
Code was amended to provide an exemption from selfemployment tax if a person can show that he is ,a
member of a recognized religious sect which follows
the practice of making reasonable provisions for its
dependent members.
While the Amish people are opposed
to and exempted from the social security program, they
no ijxxfi b sn p ia a s
..
do pay their Federal t axes.
A bank should explain to
its Amish customers that the number required to open
any account is merely a taxpayer identification number
and in no way obligates such person to the social
security system.
"tni/OOOS o,
'
'"
However, if a depositor still objects
on religious grounds to applying for a social security
number, Form SS-4, Application for an Employer
identification Number, can be used instead.
13..
If a new business has applied for an employer
identification number, but has not yet received it when
S jfij
it seeks to open a bank account, the bank may open the
j s J* <2 s
account if it secures a completed Form SS-4 in accordance
with the instructions issued by Treasury.
The completed
Form should not be sent to IRS but simply retained as
evidence that an application for a number is pending.
Since in the above instance the bank will not automatically
receive the number, it must follow up with the customer to
insure that the number is furnished within a reasonable time.
Generally speaking, the Internal Revenue Service furnishes an
employer identification number to an applicant within 45 days.
Sec. 103.34(a)
1.
- Exemptions From
An exemption from the requirements of this subsection is
granted with respect to all accounts opened as part of a
school savings program for school savers up to eighteen
years of age, provided that the amount of interest earned on
such accounts is $10 or less.
Children over eighteen years
of age may apply for a social security number without parental
authorization and payments of interest aggregating $10 or more
are required by Section 6049, Internal Revenue Code of 1954,
to be reported on Form 1099, together with the depositor's
social security number.
Banks having a school savings pro
gram should set up appropriate procedures to obtain numbers
for accounts held, by persons aged eighteen years or older
and for all accounts earning interest of $10 or more annually.
2.
An exemption from the requirements of this subsection
is granted with respect to Christmas Club accounts, provided
the annual interest is not anticipated to exceed $10.00.
14
Section 103.34(b)
1.
- Interpretations
If there is no check or draft corresponding to a
pre-authorized paper entry, it will be sufficient to
maintain the customer's authorization to charge his account
and the memorandum list of entries for a period of five years,]
2.
Insurance companies commonly issue drafts in settlement
of claims or for other purposes which are payable through
a particular bank, but which are drawn on the company
itself and not on a deposit account.
However, drafts which
are issued by insurance companies are treated as checks
throughout the financial system, despite the fact that they
are not drawn on a deposit account, and are, therefore,
subject to the requirements of Sec. 103.34(b)(3).
If
these drafts meet the volume and purpose requirements of
this section, no copy need be retained.
If they do not
meet these standards, it will be necessary for the bank
to retain a copy of the draft as required by this section
and to retain the records required by Sec. 103.34(b)(10)
for a period of two years.
3.
Clean drafts, including "cash item drafts", are drawn
"payable through" or "payable at" a particular bank.
The
bank receives them and presents them to its customer who
reviews them and pays for those it accepts.
The majority
of such items should be eligible for exemption under
Sec. 103.34(b)(3), those which are not eligible should be
microfilmed or copied before they are released to the customer
4.
Sec. 103.34(b)(10) does not require a receiving
bank to copy or be able to produce an item drawn on
another bank.
Furthermore, a bank need not be able
to supply a description of a deposited check if it
can trace a check through its domestic processing system
Sec. 103.36 - Interpretation
1.
A bank must retain for a period of five years checks
drawn on itself.
However, the proof and entry run tapes
which allow a bank to reconstruct an account, need only
be retained for a period of two years.
Sec. 103.37 - Interpretation
1.
The term "temporarily" used in this section should
be interpreted as a vacation or business assignment
expected to last less than six months.
Sec. 103.42 - Interpretation
1.
This section provides that nothing contained herein
shall require or authorize the microfilming or other
reproduction of currency or obligation or security of
the United States as defined in 18 U.S.C.
8 or any
obligation or security of any foreign government.
However, government checks may be microfilmed, but
not copied, for the purpose of tracing or identifying
a transaction.
16
Sec. 103.45 - Exemptions
1.
A bank, whose employees physically transport
currency across the Canadian border on a weekly basis
for deposit with a Canadian bank which is only a few
hundred yards away, requested an exemption from the
requirements of Sec. 103.23.
Due to the special cir
cumstances, the Department granted the request provided
that an accurate record of such transfers is maintained
by the bank.
2.
A bank in Ma i n e , which for a period of more than
twenty years has used its personnel to physically trans
port sums of currency and checks in excess of $5,000 to
and from a bank in a contiguous Canadian town several
times a month, requested and was granted an exemption
from the reporting requirements of Sec. 103.23 due to
the special circumstances involved.
The Department,
however, does require the bank to maintain an accurate
record of such transfers.
3.
An exemption is granted to any merchant shipping
company from the requirement to report the transportation
into or out of the United States of currency or bearer
instruments in amounts in excess of $5,000 with respect
to currency or bearer instruments placed on board ship
by the owner or operator in order to provide for reason
able shipping needs.
Records of such monies placed on
board are to be maintained by the shipping companies.
17
4.
A company wholly engaged in financing inventories and
retail installment sales of automobile dealers which came
within the definition of a "bank" in Sec. 103.11(a)(7)
re
quested and was granted an exemption from the recordkeeping
and reporting requirements of Part 103/ Title 31, Code of
Federal Regulations.
However, if said company is a
"financial institution" within the meaning of Sec. 103.11
(other than as a "bank")
it would, of course, have to comply
with those provisions of this part relating to financial
institutions other than banks.
5.
An exemption from the requirements of Sec. 103.34(a)
is granted with respect to all accounts opened as part
of a school savings program for school savers up to eighteen
years of age, provided that the amount of interest earned
on such accounts is $10 or less.
Children over eighteen
years of age may apply for a social security number without
parental authorization and payments of interest aggregating
$10 or more are required by Section 6049, Internal Revenue
Code of 1954, to be reported on Form 109>, together with the
depositor's social security number.
Banks having a school
savings program should set up appropriate procedures to obtain
numbers for accounts held by persons aged eighteen years or
older and for all accounts earning interest of $10 or more
annually.
18
6.
An exemption from the provisions of Part 103, Title 31,
Code of Federal Regulations, is granted to those persons
who are registered with the Securities and Exchange
Commission as broker-dealers solely in order to offer
and sell variable annuity contracts issued by life in
surance companies.
However, if a person so registered
at any time offers and sells other types of securities
in addition to variable annuity contracts, this exemption
does not apply to any part of his business.
This exemption
will in no way affect recordkeeping regulations or other
requirements promulgated under the Securities and Exchange
Act of 1934, as amended.
7.
An exemption from the requirements of Sec. 103.34(a)
is granted with respect to Christmas Club accounts, pro
vided the annual interest is not anticipated to exceed
$10.00.
Eugene T . R ô s s ï d ë s
Assistant Secretary for
Enforcement, Tariff
and Trade Affairs
and Operations
DepartmentoftheTREASURY
[ASHINGTQN> Ö.C. 20220
ITTEWTION:
tTELEPHONE
M p U m i c wWO4-204!
ha
lîf
LlU
FINANCIAL EDITOR
RELEASE 6:30 P.M.,
Friday, November 17, 1972.
■ImuI
11
ki'tod
RESULTS OF TREASURY’S OFFER OF $2 BILLION OF APRIL TAX BILLS
The Treasury Department announced that the tenders for $2,000,000,000, or
¡hereabouts, of 147-day Treasury Tax Anticipation bills to be dated November 24, 1972,
id to mature April 20, 1973, which were offered on November 10, 1972, were opened at
the Federal Reserve Banks today.
The details of this issue are as follows:
Total applied for
Total accepted
- $6,354,800,000
- $2,000,570,000
Range of accepted competitive bids:
High
Low
Average
98.Q85
98.062
98.072
(includes $339,050,000
entered on a
noncompetitive basis and accepted in
full at the average price shown below)
(Excepting 2 tenders totaling $200,000)
Equivalent rate of discount approx. 4.690$
Equivalent rate of discount approx. 4.746$
Equivalent rate of discount approx. 4.722$
per annum
per annum
per annum 1/
( 17 $ of the amount bid for at the low price '
■ Federal Reserve
_ District
■ Boston
■New York
■Philadelphia
■ Cleveland
■ Richmond
■ Atlanta
■ Chicago
■St, Louis
■Minneapolis
■Kansas City
P allas
Pan Francisco
Total
Total
Accepted
Total
Applied For
$ 340,575,000
3,036,295,000
246,560,000
140,340,000
25,560,000
109,010,000
757,625,000
129,150,000
421,760,000
194,015,000
110,200,000
843,710,000
$
$6,354,800,000
$2,000,570,000
1 " Phis is on a bank discount basis.
164,815,000
474,135,000
39,340,000
17,440,000
14,900,000
51,895,000
215,080,000
56,450,000
198,110,000
170,8.35,000
9,200,000
588,370,000
The equivalent coupon issue yield is 4
JO
<1
FOR IMMEDIATE RELEASE
MONDAY, NOVEMBER 20, 1972___________
INCOME TAX TREATY DISCUSSIONS WITH CANADA OPEN
Officials of the United States Treasury Department
and Canada*s Ministry of Finance opened three days of
discussions on possible tax treaty revisions at the
Treasury Building today.
Talks are designed to identify issues for further
study by officials of both nations and no final
decisions are expected to be reached.
The UoS. delegation is headed by Under Secretary
Edwin S. Cohen.
0O 0
S-76
BepartmentoflheTREASURY
Washington
d .c
m u m ,n
r .20220
TELEPHONE W04-2041
’
|
OF
o
J7\
FOR IMMEDIATE RELEASE
November 20, 1972
Pi;
DECISION ON PIG IRON FROM BRAZIL
UNDER THE ANTIDUMPING ACT
A tentative determination that pig iron from Brazil
is not being, nor is likely to be, sold at less than
fair value within the meaning of the Antidumping Act,
1921, as amended, was announced today by Assistant
Secretary of the Treasury Eugene T. Rossides.
Notice of this determination will be published in
the Federal Register of Tuesday, November 21, 1972.
Information gathered
that the price to buyers
that the price to buyers
ment of this merchandise
withheld.
in this investigation showed
in the home market was lower
in the United States. Appraise
from Brazil has not been
During the period of January 1971 through May 1972,
imports of pig iron from Brazil were valued at approxi
mately $3.5 million.
# # #
DepartmentoftheTREASURY
HINGTON,
D.c.20220
TELEPHONE W04 2041
FOR IMMEDIATE RELEASE
November 16, 1972
TREASURY SECRETARY SHULTZ NAMES WILLIAM V. LUNEBURG
SAVINGS BONDS CHAIRMAN FOR MICHIGAN
William V. Luneburg, President of the American Motors
Corporation, Detroit, has been appointed Volunteer State
Chairman for the Savings Bonds Program by Secretary of the
Treasury George P. Shultz, effective immediately.
He succeeds A. P. Fontaine, Director and Chairman of the
Executive and Finance Committees of Bendix Corporation, Southfield, Mich., who has served since January 1971.
Fontaine
will receive the Treasury*s Award of Merit.
Luneburg will head a committee of state, business, finan
cial, labor, media, and governmental leaders who -- in cooper
ation with the Savings Bonds Division -- assist in promoting
the sales of Savings Bonds.
He has previously served as
Chairman for Detroit in the 1971 Savings Bonds Campaign.
Luneburg was born in New York City.
He graduated from
New York University in 1934, with a Bachelor of Science degree
and received a Master’s degree in Business Administration in
1936 from Harvard Business School.
He became Director of the Textile Economics Bureau of
New York in 1937.
During World War II, he served in the U. S.
Navy, returning to the Bureau after the war.
Luneburg began his career in the automobile industry in
1949 as a financial analyst for the Ford Motor Company.
In
1956, he was named manager of Fo r d ’s Rouge assembly plant.
In
1959, he became Executive Vice President of the Mather Spring
Company, Toledo, Ohio.
Luneburg joined American Motors in 1963 as Vice President
of Finance.
Two years later, he was appointed to the company’s
Board of Directors, becoming group Vice President of Automo
tive Operations in 1966.
In 1967, he was elected President
and Chief Operating Officer of American Motors.
(OVER)
2
Mr. Luneburg is a member of a number of business and
automotive organizations, and has served as Chairman of the
Motor Vehicle Manufacturers Association.
He is married to the former Frances Louise Benton, and
has a son, William, Jr.
0 O0
DepartmentofthefREASURY
W
ashington , d .c . 20220
MTION:
TELEPHONE W04-2041
FINANCIAL EDITOR
November 20, 1972
Ir RELEASE 6:30 P.M.
RESULTS OF TREASURY'S WEEKLY BILL OFFERING
The Treasury Department announced that the tenders for two series of Treasury
Ills, one series to be an additional issue of the bills dated August 24, 1972
. and
[he other series to be dated November 24, 1972 , which were invited on November 14, 1972
[ere opened at the Federal Reserve Banks today. Tenders were invited for $2,400,000,000,
|r thereabouts, of 90 -day bills and for $1,900,000,000, or thereabouts, of
181-day
Ills. The details of the two series are as follows:
E OF ACCEPTED
ETITIVE BIDS:
High
Low
Average
90 -day Treasury bills
maturing February 22, 1973
Approx. Equiv.
Price
Annual Rate
98.817
98.801
98.806
4.732$
4.796$
4.776$
1/
181-day Treasury bills
maturing May 24, 1973
Approx. Equiv.
Price
Annual Rate
97.482
97.453
97.461
5.008$
5.066$
5.050$
1/
95$ of the amount of
90-day bills bid for at the low price was accepted
81$ of the amount of 181-day bills bid for at the low price was accepted
PIAL TENDERS APPLIED FOR AND ACCEPTED BY FEDERAL RESERVE DISTRICTS:
District
Boston
New York
Philadelphia
Cleveland
Richmond
Atlanta
Chicago
St. Louis
Minneapolis
R^sas City
Dallas
San F ran cisco
TOTALS
Applied For
$
31,615,000
3,013,620,000
31.935.000
22.535.000
16.445.000
25.955.000
000
^,000
289,125,000
44.755.000
31.880.000
28.335.000
36.295.000
98.690.000
Accepted______
|
19,040,000
1,980,545,000
21.685.000
21.735.000
12.345.000
24.945.000
165,025,000
30.755.000
22.630.000
18.335.000
19.245.000
64.840.000
Applied For
$
22,510,000
2,886,640,000
29.555.000
38.025.000
13.120.000
22.340.000
295.485.000
40.500.000
20.035.000
22.485.000
31.420.000
584.285.000
Accepted______
|
8,510,000
1,605,490,000
q
.45S.non
9.455.000
21.875.000
2.920.000
8.090.000
112,565,000
18,000,000
9.035.000
11.185.000
8.420.000
84.785.000
$3,671,185,000
$2,401,125,000 a/
$3,806,400,000
$1,900,330,000 b/
I /includes $L60,105,000 noncompetitive tenders accepted at the average price'of98.806
' Includes $ 88,735,000 noncompetitive tenders accepted at the average price of 97.461
/ These rates are on a bank discount basis. The equivalent coupon issue yields are
•90$ for j^e 9 0 -day bills, and 5.25$ for the 181-day bills.
Departm ent oftheTREASURY
MgfgN. D C 20220
TEtiPHGNE W04-2041
FOR IMMEDIATE RELEASE
November 21, 1972
TREASURY ANNOUNCES ACTIONS
ON THREE INVESTIGATIONS UNDER
THE ANTIDUMPING ACT
Actions on three investigations under the Antidumping
Act of 1921, as amended, were announced today by Assistant
Secretary of the Treasury Eugene T. Rossides.
In the first case there was a finding of dumping, in
the second case there was a final discontinuance of an
antidumping investigation, and in the third case there was
a tentative revocation of a finding of dumping. All three
actions will be published in the Federal Register of
November 22, 1972.
In the first case, Secretary Rossides announced that
the Treasury has issued a dumping finding with respect to
bicycle speedometers from Japan.
On June 24, 1972, the
Treasury Department advised the Tariff Commission that
bicycle speedometers from Japan were being sold at less than
fair value within the meaning of the Antidumping Act.
On
September 22, 1972, the Tariff Commission determined there
was injury to a U. S. industry.
In such situations the
dumping finding automatically follows as the final adminis
trative requirement in antidumping investigations.
Dumping
duties will be assessed on imports of this merchandise which
have not been appraised and on which dumping margins are
found.
During calendar year 1971 imports of bicycle
speedometers from Japan were valued at approximately $670,000.
In the second case, the Department announced a final
discontinuance of the antidumping investigation on welded
stainless steel pipe and tubing from Japan.
On August 4,
1972, the Treasury published a tentative discontinuance
notice after the investigation showed that sales at less
than fair value were only minimal in relation to the volume
of imports, and the foreign manufacturers offered formal
assurances that there would be no further sales at less than
fair value.
This notice also invited interested parties to
submit written views or request an opportunity to present
their views orally.
No submissions or requests were
received.
During the period of September 1971 through
May 1972 imports of welded stainless steel pipe and tubing
from Japan were valued at approximately $5 million.
In the third case, Secretary Rossides announced an
intent to revoke a finding of dumping with respect to
chromic acid from Australia.
The original finding was issued
on March 21, 1964.
Since that time there have been no
importations of chromic acid from Australia.
In addition,
the producer of the acid has given assurances to the
Treasury Department that future sales to the United States
will not be at less than fair value prices.
Before taking
a final action in this case, there will be an opportunity
for interested persons to present oral and written views
on this decision.
DepartmentaltheTREASURY
SHINGTON. D C. 20220
TELEPHONE W04-2041
c
FOR IMMEDIATE RELEASE
3
November 21, 1972
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 $4,300,000,000, or thereabouts, for
cash and in exchange for Treasury bills maturing November 30, 1972, in the amount
of $5,803,525,000, as follows:
91-day bills (to maturity date) to be issued November 30, 1972, in the amount
of $2,400,000,000, or thereabouts, representing an additional amount of bills
dated August 31, 1972, and to mature March 1, 1973 (CUSIP No. 912793 Qii2), origin
ally issued in the amount of $1,801,810,000, the additional and original bills to
be freely interchangeable.
182-day bills (to maturity date) to be issued November 30, 1972, in the amount of
$1,900,000,000,- or thereabouts, representing an additional amount of bills dated
May 31, 1972, to mature May 31, 1973 (CUSIP No. 912793 PX8), originally issued in
the amount of $1,200,180,000 (an additional $500,950,000 was issued August 31,
1972), the additional and original bills to be freely interchangeable.
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 $10,000, $15,000, $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 clos
ing hour,
one-thirty p.m.,. Eastern Standard time, Monday, November 27, 1972.
Tenders will not be received at the Treasury Department, Washington.
must be for a minimum of $10,000.
$5,000.
Each tender
Tenders over $10,000 must be in multiples of
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.
may not be used.
Fractions
It is urged that tenders be made on the printed forms and for
warded in the special envelopes which will be supplied by Federal Reserve Banks
or Branches on application therefor.
(OVER)
-2Banking institutions generally may submit tenders for account of customers
provided the names of the customers are set forth in such tenders.
Others than
banking institutions will not be permitted to submit tenders except for their own
account.
Tenders will be received without deposit from incorporated banks and
trust companies and from responsible and recognized dealers in investment securities.
Tenders from others must be accompanied by payment of 2 percent of the face amount
of Treasury bills applied for, unless the tenders are accompanied by an express
guaranty of payment by an incorporated bank or trust company.
Immediately after the closing hour, tenders will be opened at the Federal
Reserve Banks and Branches, following which public announcement will be made by
the Treasury Department of the amount and price range of accepted bids.
Only those
submitting competitive 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 each
issue for $200,000 or less without stated price from any one bidder will be accepted
in full at the average price (in three decimals) of accepted competitive bids for
the respective issues.
Settlement for accepted tenders in accordance with the
bids must be made or completed at the Federal Reserve Bank on November 30, 1972,
in cash or other immediately available funds or in a like face amount of Treasurybills maturing November 30, 1972.
treatment.
Cash and exchange
tenders will receive equal
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.
Under Sections 454(b) and 122l(5) of the Internal Revenue Code of 1954 the
amount of discount at which bills issued hereunder are sold is considered to accrue
when the bills are sold, redeemed or otherwise disposed of, and the bills are ex
cluded from consideration as capital assets.
Accordingly, the owner of Treasury
bills (other than life insurance companies) issued hereunder must include in his
income tax return, as ordinary gain or loss, the difference between the price paid
for the 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.
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.
DepartmentoftheTREASURY
[SHINGTON, D C. 20220
ATTENTION:
V
TELEPHONE W04-2041:
FINANCIAL EDITOR
November 22, 1972
FOR IMMEDIATE RELEASE
TREASURY OFFERS $2.5 BILLION IN JUNE TAX ANTICIPATION BILLS
The Treasury Department, by this public notice, invites tenders for $2,500,000,000 ,«
m*
or thereabouts, of 199-day Treasury bills, to be issued on a discount basis under com
petitive and noncompetitive bidding as hereinafter provided.
The bills of this series
I
i
will be dated December 5, 1972, and will mature June 22, 1973 (CUSIP No. 912793 RHl).
They will be accepted at face value in payment of income taxes due on June 15, 1973,
(¡i
and to the extent they are not presented for this purpose the face amount of these
hills will be payable without interest at maturity.
Taxpayers desiring to apply these
hills in payment of June 15, 1973, income taxes may submit the bills to a Federal
Reserve Bank or Branch or to the Office of the Treasurer of the United States,
Washington, not more than fifteen days before that date.
In the case of bills sub
mitted in payment of income taxes of a corporation they shall be accompanied by a duly
completed Form 503 and the office receiving these items will effect the deposit on
June 15, 1973.
In the case of bills submitted in payment of income taxes of all other
taxpayers, the office receiving the bills will issue receipts therefor, the original
of which the taxpayer shall submit on or before June 15, 1973, to the District
Director of Internal Revenue for the District in which such taxes are payable.
The
bills will be issued in bearer form only, and in denominations of $10,000, $15,000,
$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, Wednesday, November 29, 1972.
will not be received at the Treasury Department, Washington.
minimum of $10,000.
Tenders
Each tender must be for a
Tenders over $10,000 must be in multiples of $5,000.
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.
(OVER)
1
i
-
2-
Banking institutions generally may submit tenders for account of customers
provided the names of the customers are set forth in such tenders.
Others than bank
ing 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 pay
ment by an incorporated bank or trust company.
All bidders are required to agree not to purchase or to sell, or to make any
agreements with respect to the purchase or sale or other disposition of any bills of
this issue at a specific rate or price, until after one-thirty p.m., Eastern Standard
time, Wednesday, November 29, 1972.
Immediately after the closing hour, tenders will be opened at the Federal Reserve
Banksand Branches, following which public announcement will be made by the Treasury
Department of the amount and price range of accepted bids.
Only those submitting
competitive tenders will be advised of the acceptance or rejection thereof.
The
Secretary of the Treasury expressly reserves the right to accept or reject any or all
tenders, in whole or in part, and his action in any such respect shall be final.
Subject to these reservations, noncompetitive tenders for $400,000 or less without
stated price from any one bidder will be accepted in full at the average price (in
three decimals) of accepted competitive bids.
Settlement for accepted tenders in
accordance with the bids must be made or completed at the Federal Reserve Bank in cash
or other immediately available funds on December 5, 1972.
Any qualified depositary
will be permitted to make settlement by credit in its Treasury tax and loan account for
Treasury bills allotted to it for itself and its customers.
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 considered to accrue when the
bills are sold, redeemed or otherwise disposed of, and the bills are excluded from
consideration as capital assets.
Accordingly, the owner of Treasury bills (other than
life insurance companies) issued hereunder must include in his income tax return, as
ordinary gain or loss, the difference between the price paid for the 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.
Treasury Department Circular No. 418 (current revision) and this notice, prescribe
the terms of the Treasury bills and govern the conditions of their issue.
the circular may be obtained from any Federal Reserve Bank or Branch.
Copies of
DepartmentoftheTREASURY
SHINGTON. D.C. 20220
TELEPHONE W04-2041
ATTENTION: FINANCIAL EDITOR
FOR RELEASE 6:30 P. M.
November 22, 1972
TREASURY'S MONTHLY BILL OFFERING
The Treasury Department announced that the tenders for $1,800,000,000,
or thereabouts, of 355-day Treasury bills to be dated November 30, 1972 , and
to mature November 20, 1973 , which were offered on November 15, 1972 , were
opened at the Federal Reserve Banks today.
The details of this issue are as follows:
RANGE OF ACCEPTED COMPETITIVE BIDS:
High
L ovj
Average
-
94.872
94.824
94.847
Approx, equiv. annual rate 5.200$ per annum
Approx, equiv. annual rate 5.249$ per annum
Approx, equiv. annual rate 5.226$ per annum
1/
( 63 $ of the amount bid for at the low price was accepted)
TOTAL TENDERS APPLIED FOR AND ACCEPTED BY FEDERAL RESERVE DISTRICTS:
Federal Reserve
District
Total
Applied for
Total
Accepted
Boston
New York
Philadelphia
Cleveland
Richmond
Atlanta
Chicago
St. Louis
Minneapolis
Kansas City
Dallas
San Francisco
$
$
TOTALS
50,590,000
2,911,040,000
38,905,000
27,135,000
1,750,000
19,190,000
487,350,000
24,105,000
25,010,000
26,225,000
38,900,000
149,025,000
$3,799,225,000
1/ This is on a bank discount basis.
7,740,000
1,623,355,000
6,405,000
7,135,000
750,000
3,190,000
87,750,000
3,105,000
4,410,000
3,725,000
3,900,000
48,775,000
$1,800,240,000
The equivalent coupon issue yield is 5,51$.
2/ Includes $ 27,615,000 entered on a noncompetitive basis and accepted in full
at the average price shown above.
DepartmentofthefREASURY
OFFICE OF REVENUE SHARING
WASHINGTON, D.C.20220
TELINONE W04-871T
FOR RELEASE AT 1 P.M. EST
EXCERPTS OF THE REMARKS OF THE
HONORABLE CHARLS E. WALKER
DEPUTY SECRETARY OF THE TREASURY
BEFORE THE REGIONAL COUNCIL CONFERENCE
ATLANTA, GEORGIA
NOVEMBER 27, 1972, 1:00 P.M. EST
It is a pleasure for me to join you here today to discuss
the provisions of the Revenue Sharing Act, which was signed by
President Nixon at Independence Hall in Philadelphia on
October 20.
Those of us from the Treasury Department who had
the pleasure of working on this legislation with representatives
of state and local governments are particularly enthusiastic
about its prospects.
Our main purpose here today is to discuss with you the
operational aspects -- the nuts and bolts of revenue sharing.
During the course of the meeting, we hope to provide answers
to the many questions that you have about the program.
In
the event that we do not have an answer immediately, we will
certainly get it as soon as we get back to Washington and will
be in touch.
Before getting into the so-called nitty-gritty world, I
think it is important that all of us understand the philosophy
behind this program - - a philosophy that puts it in an entirely
different class from other types of grant programs.
As most
of you know, the Federal Government has for many years been
sending money back to state and local governments.
In the
current fiscal year alone, close to $38.5 billion in categorical
grants will go to state and local government .
What makes revenue sharing so different?
The answer lies
in the approach that will be used in revenue sharing - - a n
approach that makes revenue sharing landmark legislation.
Here are a few of, the more striking differences:
1.
There are very few strings attached to revenue sharing
funds.
At the state level you can use the money for any
legitimate functions of government.
At the local level you
will be given a wide latitude within a long list of broad
categories.
-
2
-
The reasoning, of course, is that you are closest to the
problems and can do a better job of tailoring programs.and
services to meet your particular needs.
2.
State and local governments will not have to submit
detailed plans and blueprints for approval by Federal bureaucrats!
before they receive their revenue sharing funds.
We are all
too familiar with the delays and complexities of trying to
make every local unit of government conform to nationally
imposed standards.
3.
Revenue sharing funds totaling $30.2 billion will
be distributed automatically in each of the next five years.
This is an important break with previous programs because
you can count on the funds being available.
You can make
your plans ahead of time instead of being locked in on a yearby-year basis.
4.
The Treasury Department is determined to keep the
red tape to an absolute minimum.
There will be the necessary
safeguards to make sure that funds are used properly, but we
do not plan on having an array of bureaucrats looking over
your shoulder every step of the way.
Our program plans call
for a staff of about 50 in the Office of Revenue Sharing.
This staff will consist mainly of lawyers, accountants and
computer experts.
The President clearly described the philosophy of this
program in his 1971 State of the Union message.
He said:
"The time has come for a hew partnership between
the Federal Government and the States and the
localities - - a partnership in which we entrust
the States and localities with a larger share of
the N a t i o n ’s responsibilities and in which we
share our Federal revenues with them so that they
can meet these responsibilities.”
We believe the legislation, officially entitled'the State
tha
and Local Fiscal Assistance Act, marks, the reversal of a trend
has developed over the past 40 years.
The Federal Government
has pre-empted the most efficient revenue raising device -the progressive income tax.
With the increasing flow of
money to Washington, state and local governments were forced
to go to Washington to seek answers to pressing problems.
By returning Mno-stringsM money directly to state and local
-3governments, we are reaffirming our faith in the ability of
governments closest to the people to do the best job in
serving their citizens.
In short, revenue sharing will help
provide the wherewithal to enable you to do a better job.
How will revenue sharing work? As I mentioned earlier,
an Office of Revenue Sharing has been established under the
Secretary of the Treasury.
Edward A. Fox, Director of Finance
for the Federal Home Loan Banks in Washington, D.C., has been
named interim director of this new office.
He is charged with
the responsibility of getting the checks out to 38,000 state
and local government units as quickly and efficiently as
possible.
Ed and his staff will handle your technical questions
about the operations of this program.
Our present plans are to have the first checks in the
mail early in December.
The checks will be for approximately
one-half of the 1972 payment.
The second checks in early
January will cover the remaining half.
The amount for the
calendar year 1972 is $5.3 billion.
This amount will increase
slightly in each succeeding year and the five-year total will
amount to $30.2 billion.
Under the law, one-third of the funds will go to
governments and two-thirds to local governments.
For
entitlement, this will mean that $1.8 billion will be
tributed to the
states and $3.5 billion to counties,
and other local governmental units.
state
the 1972
dis
cities
The formulas used to divide the funds are described in
your kits, and I shall not go into them here, except to note
that the Congressional process worked extremely well in shaping
a workable and equitable approach.
All of you have seen print-outs of the estimated entitle
ments.
It is highly important to understand that those figures
are precisely as labelled -- estimates. The Office of Revenue
Sharing -- working with the Bureau of Census, which supplies the
basic data -- is making excellent progress in updating and
verifying the relevant figures.
We feel confident at this
time that the target date for mailing the first checks -- the
first week in December
- can be met.
But it is most important to recognize that the actual,
official entitlements will vary somewhat from those previously
published.
In other words, the amounts will be an accurate
reflection of what the formulas direct to each recipient.
And to make certain that each governmental unit gets its
proper share, the books for final settlement of the first
entitlement will not be closed until the Secretary of the
-4-
Treasury is fully satisfied that the data are as good as
can be -- and in any event no earlier than January 1, 1974.
As you know, the funds that you will receive must be
accounted for in^a^separate trust fund.
In no way does this
affect your flexibility in using them, but reflects the
strong desire of Congress to devise a system in which proper
audit can be made.
This is an exciting experiment.
Its success depends
upon you -- how wisely and effectively you use the money.
If, as I believe and hope, the program leads to better
service for the people -- administered by the governments
closest to the people -- then I am confident that revenue
sharing, rather than fading from the scene as a one-shot
effort, will pave the way for a new and more effective
Federalism in our great nation.
I t ’s up to you.
oOOo
Of
DepartmentoftheTREASURY
OFFICE OF REVENUE SHARING I
• /WASHINGTON, O.C. 20220
TELEPHONE W04-8711
J 7 89
FOR RELEASE AT 1 P.M. CST
EXCERPTS OF THE REMARKS OF THE
HONORABLE CHARLS E. WALKER
DEPUTY SECRETARY OF THE TREASURY
BEFORE THE REGIONAL COUNCIL CONFERENCE
DALLAS, TEXAS
NOVEMBER 29, 1972, 1:00 P.M. CST
It is a pleasure for me to join you here today to discuss
the provisions of the Revenue Sharing Act, which was signed by
President Nixon at Independence Hall in Philadelphia on
October 20.
Those of us from the Treasury Department who had
the pleasure of working on this legislation with representatives
of state and local governments are particularly enthusiastic
about its prospects.
Our main purpose here today is to discuss with you the
operational aspects -- the nuts and bolts of revenue sharing.
During the course of the meeting, we hope to provide answers
to the many questions that you have about the program.
In
the event that we do not have an answer immediately, we will
certainly get it as soon as we get back to Washington and will
be in touch.
Before getting into the so-called nitty-gritty world, I
think it is important that all of us understand the philosophy
behind this program -- a philosophy that puts it in an entirely
different class from other types of grant programs.
As most
of you know, the Federal Government has for many years been
sending money back to state and local governments.
In the
current fiscal year alone, close to $38.5 billion in categorical
grants will go to state and local governments.
What makes revenue sharing so different?
The answer lies
in the approach that will be used in revenue sharing -- an
approach that makes revenue sharing landmark legislation.
Here are a few of the more striking differences:
1.
There are very few strings attached to revenue sharing
funds.
At the state level you can use the money for any
legitimate functions of government.
At the local level you
will be given a wide latitude within a long list of broad
categories.
-
2
-
The reasoning, of course, is that you are closest to the
problems and can do a better job of tailoring programs and
services to meet your particular needs.
2.
State and local governments will not have to submit
detailed plans and blueprints for approval by Federal bureaucrats
before they receive their revenue sharing funds.
We are all
^•00 familiar with the delays and complexities of trying to
make every local unit of government conform to nationally
imposed standards.
3.
Revenue sharing funds totaling $30.2 billion will
.e^distributed automatically in each of the next five years.
This is an important break with previous programs because
you can count on the funds being available.
You can make
your plans ahead of time instead of being locked in on a yearby-year basis.
4.
The Treasury Department is determined to keep the
red tape to an absolute minimum.
There will be the necessary
safeguards to make sure that funds are used properly, but we
do not plan on having an army of bureaucrats looking over
your shoulder every step of the way.
Our program plans call
for a staff of about 50 in the Office of Revenue Sharing.
This staff will consist mainly of lawyers, accountants and
computer experts.
The President clearly described the philosophy of this
program in his 1971 State of the Union message.
He said:
"The time has come for a new partnership between
the Federal Government and the States and the
localities -- a partnership in which we entrust
the States and localities with a larger share of
the Nation's responsibilities and in which we
share our Federal revenues with them so that they
can meet these responsibilities."
We b e l i e v e the legisla ti on, o f f i c i a l l y e n t i t l e d ' t h e State '
and Local Fiscal A s s i s t a n c e Act, m ar ks the re v er s a l of a trend that
has d e v e l o p e d over the past 40 years.
The Federal Government
has p r e - e m p t e d the most e f f i c ie n t re venue r a is i n g de vice -the p r o g r e s s i v e income tax.
W i t h the in c re a s i ng flow of
m o n e y to Wa sh i ng to n , state and local g o v e r nm e n t s w er e forced
to go to W a s h i n g t o n to seek an swers to p r e s s i n g problems.
By r e t u r n i n g " no - s t r i n g s " m o n e y d i r e c t l y to state and local
governments, we are reaffirming our faith in the ability of
governments closest to the people to do the best job in
serving their citizens. In short, revenue sharing will help
provide the wherewithal to enable you to do a better job.
How will revenue sharing work? As I mentioned earlier,
an Office of Revenue Sharing has been established under the
Secretary of the Treasury. Edward A. Fox, Director of Finance
for the Federal Home Loan Banks in Washington, D.C., has been
named interim director of this new office. He is charged with
the responsibility of getting the checks out to 38,000 state
and local government units as quickly and efficiently as
possible. Ed and his staff will handle your technical questions
about the operations of this program.
Our present plans are to have the first checks in the
mail early in December. The checks will be for approximately
one-half of the 1972 payment. The second checks in early
January will cover the remaining half. The amount for the
calendar year 1972 is $5.3 billion. This amount will increase
slightly in each succeeding year and the five-year total will
amount to $30.2 billion.
Under the law, one-third of the funds will go to
governments and two-thirds to local governments. For
entitlement, this will mean that $1.8 billion will be
tributed to the states and $3.5 billion to counties,
and other local governmental units.
state
the 1972
dis
cities
The formulas used to divide the funds are described in
your kits, and I shall not go into them here, except to note
that the Congressional process worked extremely well in shaping
a workable and equitable approach.
All of you have seen print-outs of the estimated entitle
ments. It is highly important to understand that those figures
are precisely as labelled -- estimates. The Office of Revenue
Sharing -- working with the Bureau of Census, which supplies the
basic data -- is making excellent progress in updating and
verifying the relevant figures. We feel confident at this
time that the target date for mailing the first checks -- the
first week in December -- can be met.
But it is most important to recognize that the actual,
official entitlements will vary somewhat from those previously
published. In other words, the amounts will be an accurate
reflection of what the formulas direct to each recipient.
And to make certain that each governmental unit gets its
proper share, the books for final settlement of the first
entitlement will not be closed until the Secretary of the
-4-
Treasury is fully satisfied that the data are as good as
can be -- and in any event no earlier than January 1, 1974.
As you know, the funds that you will receive must be
accounted for in a separate trust fund.
In no waf does this
affect your flexibility in using them, but reflects the
strong desire of Congress to devise a system in which proper
audit can be made.
This is an exciting experiment.
Its success depends
upon you -- how wisely and effectively you use the money.
If, as I believe and hope, the program leads to better
service for the people -- administered by the governments
closest to the people -- then I am confident that revenue
sharing, rather than fading from the scene as a one-shot
effort, will pave the way for a new and more effective
Federalism in our great nation.
I t ’s up to you.
oOOo
DepartmentoftheTREASURY
HINSTON, D C 20220
ATTENTION:
TELEPHONE W04-2041 I
FINANCIAL EDITOR
FOR RELEASE 6:30 P.M.
November 27, 1972
RESULTS OF TREASURY1S WEEKLY
BILL OFFERING
The Treasury Department announced that the tenders for two series of Treasury
one series to he an additional issue of the hills dated August 31, 1972, and
the other series to he an additional issue of the hills dated May 31, 1972, which were
i n v i t e d on November 21, 1972, were opened at the Federal Reserve Banks today.
Tenders
were invited for $2,400,000,000, or thereabouts, of 91-day hills and for $1,900,000,000,
or thereabouts, of 182-day hills.
The details of the two series are as follows.
b ills ,
RANGE OF ACCEPTED
COMPETITIVE BIDS :
High
Low
Average
91-day Treasury hills
maturing March 1, 1973
Approx. Equiv.
Annual Rate
Price
98.776
98.760
98.765
4.842#
4.905#
4.886#
1/
182-day Treasury hills
maturing May 3i, ly73
Approx. Equiv.
Annual Rate
Price
97.390 a/
97.372
97.382
5.163#
5.198#
5.178#
1/
a/ Excepting one tender of $765,000
14# of the amount of 91-day hills bid for at the low price was accepted
67# of the amount of 182-day hills hid for at the low price was accepted
TOTAL TENDERS APPLIED FOR AND ACCEPTED BY FEDERAL RESERVE DISTRICTS:
District
Boston
New York
Philadelphia
Cleveland
Richmond
Atlanta
Chicago
St. Louis
Minneapolis
Kansas City
Dallas
San Francisco
TOTALS
Apulied For
$
48,440,000
3,262,290,000
31,385,000
25,695,000
16^905,000
21,915,000
206^770,000
35,580,000
28,170,000
33,050,000
32,785,000
518,945,000
Accepted
$
7,820,000
1,905,760,000
11,385,000
18,090,000
6,430,000
10,780,000
31,945,000
22,440,000
5,720,000
16,515,000
9,765,000
353,890,000
Applied For
$
18,075,000
2,748,535,000
50,130,000
61,895,000
12,955,000
13,030,000
270,115,000
37,285,000
22,965,000
28,160,000
38,285,000
206,790,000
Accepted
$
2,815,000
1,631,690,000
5,130,000
25,405,000
7,955,000
9,730,000
120,590,000
17,785,000
8,305,000
17,335,000
7,285,000
46,080,000
$4,261,930,000
$2,400,540,000 h/
$3,508,220,000
$1,900,105,000 c/
y Includes $157,470,000 noncompetitive tenders accepted at the average price of 98.765
2/ Includes $ 99,605,000 noncompetitive tenders accepted at the average price of 97.382
1/ These rates are on a hank discount basis. The equivalent coupon issue yields are
5.02 # for the 91-day hills, and 5.39# for the 182-day hills.
FOR IMMEDIATE RELEASE
j_.
November 28, 1972
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 $ 4,300,000,000, or thereabouts, for
cash and in exchange for Treasury bills maturing
December 7, 1972,
in the amount
of $4,222,725,000, as follows:
91 -day bills (to maturity date) to be issued December 7, 1972,
in the amount
of $2,400,000,000, or thereabouts, representing an additional amount of bills
dated September 7, 1972, and to mature
March 8, 1973
originally issued in the amount of $ 1,801,200,000,
(CUSIP No. 912793 QJ8 ),
the additional and original
bills to be freely interchangeable.
182 -day bills, for $ 1,900,000,000, or thereabouts, to be dated December 7, 1972,
and. to mature
June 7, 1973
(CUSIP No. 912793 QW9 ),
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 $10,000, $15,000, $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 clos
ing hour, one-thirty p.m., Eastern Standard time, Monday, December 4, 1972.
Tenders will not be received at the Treasury Department, Washington.
must be for a minimum of $10,000.
$5,000.
Each tender
Tenders over $10,000 must be in multiples of
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.
may not be used.
Fractions
It is urged that tenders be made on the printed forms and for
warded 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
(OVER)
-
account.
2-
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.
Only thos)
submitting competitive 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 respeclj
shall be final.
Subject to these reservations, noncompetitive tenders for each
issue for $200,000 or less without stated price from any one bidder will be accepts
in full at the average price (in three decimals) of accepted competitive bids for
the respective issues.
Settlement for accepted tenders in accordance with the
bids must be made or completed at the Federal Reserve Bank on
December 7, 1972,
in cash or other immediately available funds or in a like face amount of Treasury
bills maturing
treatment.
December 7, 1972.
Cash and exchange tenders will receive equal
Cash adjustments will be made for differences between the par value oij
maturing bills accepted in exchange and the issue price of the new bills.
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 considered to accn^
when the bills are sold, redeemed or otherwise disposed of, and the bills are ex
cluded from consideration as capital assets.
Accordingly, the owner of Treasury
bills (other than life insurance companies) issued hereunder must include in his
income tax return, as ordinary gain or loss, the difference between the price pai^
for the bills, whether on original issue or on subsequent purchase, and the amounij
actually received either upon sale or redemption at maturity during the taxable
year for which the return is made.
Treasury Department Circular Wo. 418 (current revision) and this notice,
prescribe the terms of the Treasury bills and govern the conditions of their issuep
Copies of the circular may be obtained from any Federal Reserve Bank or Branch.
«
f
i
r
n
u . u .
¿\u i\y
TELEPHONE W04-2041
November 28, 1972
FOR IMMEDIATE RELEASE
DECISION ON PRINTERS' RUBBERIZED
BLANKETS FROM THE UNITED
KINGDOM UNDER THE ANTIDUMPING ACT
A final determination that printers' rubberized
blankets from the United Kingdom are not being, nor likely
to be, sold at less than fair value within the meaning of
the Antidumping Act, 1921, as amended, was announced today
by Assistant Secretary of the Treasury Eugene T. Rossides.
These blankets are used to transfer ink from an etched
cylinder to paper on lithographic and offset printing
presses.
Notice of the determination will be published in the
Federal Register of Wednesday, November 29, 1972.
A Notice of Tentative Negative Determination was
published in the Federal Register of September 21, 1972.
This notice invited interested persons to submit written
views or arguments, or requests for an opportunity to
present their views orally.
No submissions or requests
were received.
During the period of July 1971 through June 1972,
imports of printers' rubberized blankets from the United
Kingdom were valued at approximately $805,000.
# # #
issili
DepartmentoftheTHUSURY
W ashington , d.c 20220
telephone
W04-2041
1M
H
I
Attention :
f in a n c ia l
e d it o r
RELEASE 6:30 P.M.,
tiednesday, November 29, 1972.
RESULTS OF TREASURY’S OFFER OF $2.5 BILLION OF JUNE TAX BILLS
The Treasury Department announced that the tenders for $2,500,000,000, or
thereabouts, of 199-day Treasury Tax Anticipation bills to be dated December 5, 1972,
pi to mature June 22, 1973, which were offered on November 22, 1972, were opened at
the Federal Reserve Banks today.
The details of this issue are as follows:
Total applied for - $ 5,069,960,000
Total accepted
- $ 2,500,660,000
(includes $376,910,000
entered on a
noncompetitive basis and accepted in
full at the average price shown below)
Range of accepted competitive bids:
High
Low
Average
-
97
97
97,
Equivalent rate
Equivalent rate
Equivalent rate
of
of
of
discountapprox.
discountapprox.
discountapprox.
5.000$
5.125$per
5.089$ per
per
annum
annum
annum1/
( 70 $ of the amount bid for at the low price was accepted)
Federal Reserve
L D istrict
Poston
Few York
Philadelphia
Cleveland
Richmond
planta
Chicago
p Louis
Nneapolis
Rsas C ity
Cillas
pi Francisco
Total
Ms
T o ta l
A p p lied For
$
286,650,000
2,294,800,000
144,110,000
146,500,000
38,960,000
91,580,000
664,380,000
83,455,000
547,155,000
192,240,000
127,200,000
452,930,000
$5,069,960,000
is on a bank discount basis.
T o ta l
A ccepted
$
153,050,000
596,300,000
88,610,000
131,500,000
36,360,000
62,080,000
420,380,000
63,255,000
547,155,000
190,140,000
48,200,000
163,630,000
$2,500,660,000
The equivalent coupon issue yield is 5.30 $.
DtpartmentoftheTREASURY
ASHINGTON. D C. 20220
TELEPHONE W04-2041
FOR RELEASE UPON DELIVERY
EXCERPTS OF THE REMARKS OF
THE HONORABLE CHARLS E. WALKER
DEPUTY SECRETARY OF THE TREASURY
BEFORE THE SECURITIES INDUSTRY ASSOCIATION
BOCA RATON, FLORIDA
THURSDAY, NOVEMBER 30, 1972, 11:00 A.M. EST
This is the height of deer hunting season in many
parts of the country, but in my current home town
Washingtoni D.C. -- another season is in full swing.
On
the banks of the Potomac it is now the season for secondguessing and speculation.
Since these are sports that any number can play, I
thought I might use these few minutes to give you my own
impressions of some of the reasons behind the President's
landslide victory.
And, what this mandate might mean in
terms of Washington developments and financial markets.
Every pundit in the nation has his or her reason why
the President won by such a large margin.
Quite a few
concluded that the President came through in the minds of
the voters as the stronger and more decisive of the two
candidates.
Others cite the winding down of the war and
foreign policy in general as the President's main source
of strength.
Still others point to the state of the
economy in general and the resounding success of the New
Economic Policy in particular.
But there was another very important factor -- one
which, in my opinion, has not been given sufficient
attention.
In my travels and discussions with people
around the country -- both before and after the election -I sensed a public mood of dissatisfaction with government
at many levels, but especially an intensifying concern
with the size and activities of the Federal sector.
The
Federal government, people seemed to say, had grown too
big for its britches -- and something ought to be done.
Strong evidence to support this view grew out of the
Congressional debate on the spending ceiling.
With the
budget threatening to loom out of control, and sooner or
later re-ignite the fires of demand-pull inflation, the
S-78
-
2
-
President in late July proposed an ironclad ceiling of
$250 billion on Federal spending for the current fiscal
year.
At the time, some critics said the Administration
was not really serious about getting the legislation
enacted, but only in creating a campaign issue.
But when
the distinguished Chairman of the House Ways and Means
Committee
Representative Wilbur D. Mills of Arkansas -led the bill through his committee by the overwhelming
vote of 21 to 4, some of the critics changed their tune.
Their views shifted further when the House approved the
ceiling by a substantial margin.
As you know, the spending ceiling failed to become
law, because the Senate would not go along with the House
approach, and the Senate's proposed procedure was not
acceptable to the^President. But the principle did not
d i e , and in fact is alive, well and, indeed, thriving in
Washington, D.C.
By both words and action, President Nixon
is moving firmly toward his fundamental goal of limiting
the growth of the Federal sector.
The words were uttered
both in the campaign and afterwards.
The actions consist
of the cabinet reshufflings and reorganizations that are
just now beginning to unfold.
My point is this:
Congress, and especially members
of the House of Representatives, are highly responsive to
the desires of their constituents.
And with so many of
their constituents firmly convinced that the tax dollars
they are sending to Washington are not being effectively
used, spending restraint -- whether through legislation
or the will of the Executive -- struck a most responsive
chord.
Stated broadly, therefore, the Nixon landslide tells
me that relations between the Administration and the
Congress in the next four years are not going to be nearly
so difficult as some pundits seem to believe.
With the
President and the public in tune as to the basic thrust
of domestic policy, the stage seems to me to be set for
a constructive partnership between a Congress controlled
by one party and a President from the other party.
What does all this mean for financial markets?
Good
news, in my judgment.
As one of the principal workers
for the spending ceiling in Congress, I was of course
very disappointed that we didn't get the legislation we
<c
-3asked for.
But, in addition to the stamp of approval from
the only group that really counts, the voters, we actually
achieved a great deal.
For example:
Both Houses endorsed the $250
suitable target -- saying, in
Uncle Sam ought to be able to
quarter of a trillion dollars
billion figure as a
other words, that
get along on a
this fiscal year.
The legislation as finally enacted contains a
provision requiring the President to report on
so-called ’’impounded funds,” or monies that
Congress has appropriated, but which the
Executive branch has not spent.
This seems to us
to be at least an implicit ratification of the
authority of the Chief Executive -- asserted since
the days of Thomas Jefferson -- to engage in such
withholding (a view opposed by some members of
Congress).
And the Congress took an important step towards
putting its own procedures in order by establishing
a Joint Commission on the Budget to study the
spending problem and recommend solutions by next
February 15.
Recognizing all this, plus the crystal-clear intention
of the President to put the rein on spending, reaction in
financial markets has been very good.
Fears of a credit
crunch have diminished, favorable behavior of interest rates
is increasingly predicted, and the whole tone and mood are
considerably better than just a few weeks ago.
In my own view, the U.S. economy is once again geared
for a long period of healthy economic growth, rising
employment, and a return to reasonable price stability.
Just as Phases I and II of the New Economic Policy have
gone a long way towards restoring stability between wage
increases and gains in productivity, the President’s firm
determination -- backed by the people -- to limit Federal
spending and the growth of the Federal sector gives promise
of avoiding another round of the type of inflation brought
on by overspending in the late 1960’s.
And that should be mighty good news for the securities
industry.
For, after all, w h a t ’s good for the economy -and thus is good for the people -- is also good for you.
Thank you very much.
oOOo
FOR IMMEDIATE RELEASE
November 30, 1972
TREASURY ANNOUNCES TWO ACTIONS ON INVESTIGATIONS
UNDER THE ANTIDUMPING ACT
Actions on two investigations under the Antidumping
Act, 1921, as amended, were announced today by Assistant
Secretary of the Treasury Eugene T. Rossides.
Both cases involve determinations of sales at less
than fair value.
The decisions will be published in the
Federal Register of December 1, 1972.
In the first case, Assistant Secretary Rossides
announced that roller chain, other than bicycle, from
Japan is being, or is likely to be, sold at less than
fair value within the meaning of the Antidumping Act.
The case will now be referred to the Tariff Commission
for a determination as to whether an American industry
is being, or is likely to be, injured.
In the event of a
determination of injury, dumping duties will be assessed
on all entries of roller chain, other than bicycle, from
Japan which have not been appraised and on which dumping
margins exist. A notice of "Withholding of Appraisement"
was issued on August 31, 1972, which stated that there
was reasonable cause to believe or suspect that there were
sales at less than fair value.
During the period of
January through June 1972, imports of roller chain, other
than bicycle, from Japan were valued at approximately
$9 million.
In the second case, the Department announced that
canned bartlett pears from Australia are being, or are
likely to be, sold at less than fair value within the
meaning of the Antidumping Act.
The case will now be
referred to the Tariff Commission for a determination as
to whether an American industry is being, or is likely to
be, injured.
In the event of a determination of injury,
dumping duties will be assessed on all entries of canned
bartlett pears from Australia which have not been appraised
and on which dumping margins exist. A notice of
(OVER)
-
2-
"Withholding of Appraisement" was issued on August 31, 1972,
which stated that there was reasonable cause to believe
or suspect that there were sales at less than fair value.
During the period of January through August 1972, imports
of canned bartlett pears from Australia were valued at
approximately $567,000.
In both of these cases, interested persons were
invited to present oral and written views before Treasury
made the final decisions.
# # #
Departmentof
theTREASURYj H
iiG
iT
ii
u. n
o 20220
on non
lASHiIN
OnN
D.C.
.......TELEPHONE
TCIXDUOAIC AJUflJ
OflAl
W04-2041
»-*L.
DECEMBER 4, 1972
FOR IMMEDIATE RELEASE
UNITED STATES AND U.S.S.R
BEGIN NEGOTIATING INCOME TAX TREATY
The Treasury Department announced today that the
United States and the Union of Soviet Socialist Republics
have begun negotiations on an income tax convention between
the two countries.
The Department said that representatives of the two
nations held preliminary discussions on a tax treaty in
Washington on October 17 and 18, reviewing potential
problem areas and possible solutions.
Further discussions
are anticipated in the near future.
When completed, the treaty is expected to cover such
matters as the tax treatment of businesses established in
one country by a firm of the other country, and the tax
treatment of business visitors, royalties, and interest
payments.
Persons who wish to offer suggestions or comments on
income tax matters relating to the discussions are asked
to submit their views in writing, by December 30, 1972, to
Edwin S. Cohen, Under Secretary of the Treasury, Washington,
D.C.
20220.
oOo
S-79
Departmentof
ik in m n i n r i n r i n
MHINGTON.
D C. 20220
theTREASURY
T C I C D U O M C w t ìA 7H A 1
TELEPHONE W04-2Q41
FOR IMMEDIATE RELEASE
J JW I
U U
1 3
U
U
December 4, 1972
STATEMENT OF THE HONORABLE EUGENE T. ROSSIDES
ASSISTANT SECRETARY OF THE TREASURY
(ENFORCEMENT, TARIFF AND TRADE AFFAIRS, AND OPERATIONS)
WASHINGTON, D.C.
Taking the Profits Out of the Illegal Drug Traffic
Seventeen Month Report of the
Treasury/IRS Narcotics Trafficker Program
During November, Treasury Agents and support personnel
of the Internal Revenue Service seized and collected $2.4
million from narcotics traffickers and made assessments of
$5.4 million.
In addition, 68 new major targets were selected
and 157 minor targets were placed under tax action.
In the Courts, 2 traffickers were convicted, and 4
indictments were returned.
The Treasury has recommended an
additional 11 cases for prosecution.
The additional targets expanded the program into one new
state, South Dakota, and eight metropolitan areas, — Aberdeen,
South Dakota; Augusta, Georgia; Peoria, Illinois; Annapolis,
Maryland; Reno, Nevada; Chattanooga, Tennessee; Fort Worth,
Texas; and Bridgeport, Connecticut.
The 17 months results of this program are as follows:
1,175 Major Targets and 1,239 Other Traffickers
In 46 states, 82 metropolitan areas and the District of
Columbia^ 1,175 targets have been selected by Treasury's Target
Selection Committee and referred to the IRS for intensive tax
investigation (see attached Table I ) . Under the direction of
IRS Commissioner Johnnie M. Walters, 550 Treasury Agents and 112
support personnel are presently conducting these investigations.
S-77
2
2
ff
The Congress has passed a supplemental appropriation of
$4.5 million which will increase the number of Treasury Agents
to 648.
In addition, 1,239 minor targets traffickers are under
tax action.
$82.5 Million Assessed— $15.6 Million Collected
$82.5 million in taxes and penalties have been assessed
under the program, of which more than $15.6 million have already
been collected.
The d r u g : traffickers illegal profits are
being used to put them out of business (see attached Tables
II and III).
20 Convictions + 44 Indictments + 61 Prosecution Recommenda
tions = 125
Twenty men have been convicted on criminal tax charges;
44 other criminal tax cases are pending in Federal District
Courts in Atlanta, Miami, Detroit, Los Angeles, San Francisco,
Seattle, Boston, Indianapolis, Baltimore, and Washington, D.C.,
and in other areas; and another 61 investigations have been
completed with prosecution recommendations (see attached
Tables II and III).
We believe that this represents a tremendous achievement.
By focusing attention cn ¡the persons responsible for the narcotics
distribution, this program is making a major contribution to the
President's war against drug abuse.
Get Out of the Illegal Drug Traffic or
Face Up to Intensive Tax Investigation by Treasury Agents
The word for the drug traffickers is to get out of the illegal
drug traffic or face up to intensive tax investigation by Treasury
Agents. This word should be spread in every city and town in the
United States.
We have institutionalized this program.
Everyone
in this illegal business should realize that he will be subjected
to tough tax scrutiny.
r
DEPARTMENT OF THE TREASURY
"
TABLE I
TREASURY/INTERNAL REVENUE SERVICE NARCOTICS TRAFFICKER PROGRAM
RESULTS AS OF DECEMBER ll 1972
TARGETS
COMPLETED
INVESTIGATIONS
STATE
METROPOLITAN AREAS
Alab ama
Mobile
Alaska
Anchorage
Arizona
Phoenix-Tucson-Yuma
Arkansas
Little Rock
California
Los Angeles-San Diego
San Francisco-Oakland
45
42
22
Colorado
Denver
12
2
Connecticut
Hartford-Bridgeport
16
2
Delaware
Wilmington
1
District of Columbia
Washington
22
5
Florida
Miami-Jacksonville
Tampa-Orlando
95
27
Hawaii
Honolulu
10
1
Georgia
A t 1anta-Augusta
31
12
Illinois
Chicago-Springfield
Peoria
61
7
Indiana
Indianapolis -Gary
12
3
Iowa
Des Moines
4
Kansas
Lawrence
1
Kentucky
Louisville-Covington
Newport
6
Louisiana
New Orleans
Maine
Bangor
Maryland
Baltimore-Annapolis
14
3
Massachusetts
Boston
24
3
Michigan
Detroit
71
13
Minnesota
St. Paul-Minneapolis
2
13
1
9
61
3
7
16
2
1
5
TARGETS
COMPLETED
INVESTIGATIONS
STATE
METROPOLITAN AREAS
Mississippi
Gulfport
Missouri
St. Louis-Kansas City
Nebraska
Omaha
3
Nevada
Las Vegas-Reno
5
New Hampshire
Portsmouth
4
2
New Jersey
Newark-Camden-Trenton
67
7
New Mexico
Albuquerque
11
5
New York
Albany
Buffalo-Rochester
New York City
14
20
157
1
3
55
North Carolina
Greensboro-Charlotte
17
1
Ohio
Cincinnati-Dayton-Columbus
Cleveland-Toledo
17
24
Oklahoma
Oklahoma City
Oregon
Portland
18
4
Pennsylvania
Philadelphia
Pittsburgh
42
39
3
6
Rhode Island
Providence
6
South Carolina
Columbia
5
South Dakota
Aberdeen
1
Tennessee
Nashville-Memphis-Chattanooga
8
Texas
Austin-Houston-El Paso
Dallas-Ft. Worth
Utah
Salt Lake City
Virginia
Richmond-Norfolk
Arlington-Alexandria
28
2
Washington
Seattle
24
5
West Virginia
Parkersburg
1
Wisconsin
Milwaukee
5
1
1175
239
Office of Law Enforcement
Treasury Department
3
21
8
3
51
8
2
11
2
6
TABLE II
Number
Major Target Assessments:
189
43
51
$11,052,523
19,450,434
9,172,179
283
$39,675,136
91
1148
$ 2,862,639
39,997,320
1239
$42,859,959
Regular Assessments
Jeopardy Assessments 1/
Tax Year Termination y
Total
Minor Target Assessments:
Amounts
3/
Jeopardy Assessments
Tax Year Termination
Total
Total Assessments involving Narcotic Traffickers
$82,535,095
Collections and Seizures involving Narcotic Traffickers:
Currency
Property
Major Targets
Minor Targets
$3,163,904
141,463
$10,237,426
2,082,999
Total Dollars Seized § Collected
$15,625,792
Cases Recommended for Prosecution
61
Criminal Tax Cases in U.S. Courts
awaiting Trial
44
Criminal Tax Conviction
20
Total Criminal Cases
125
1/ Jeopard y a sse ss men ts are as ses sm en ts of taxes made w h e r e a re turn
has been filed or s h o ul d have b e e n filed, but w h e r e c i rc um sta nc es
exist un de r w h i c h de lay mi ght je op ar d iz e the c o ll e c t i o n of the
revenue.
\j Termination of tax year is a computation of the tax due and assess
went made where the time for filing the return has not become due
where circumstances exist under which delay might jeopardize the
revenue.
\l
These are as sessments made as a result of seizures by ot her law
enforcement agencies of cash or other assets against cu rrent income
of na rcotic traff ick er s w h e r e delay m ig ht j e opa rd ize c o ll e c t i o n of
the r e v e n u e .
Treasury D e pa rt me n t
Office of Law E nf or c e m e n t
December 1, 1972
U. S. Treasury Department
Office of Law Enforcement
TABLE III
Minor Target Program
Major Target Program
Metropolitan Areas
Atlanta, Ga#
Austin-Houston-El Paso, Tex0
Baltimore, M d o - Washington, D . C .
Boston, Mass#
Buffalo, N.Y.
Cleveland, Ohio
Chicagc-Springfield, Ilio
Detroit, Mich»
Charlotte-Greensboro, N.C .
Miami-Jacksonville-Tampa, Fla0
Los Angeles-San Deigo, Calif.
Kewark-Camden-Trenton, N .J.
New York City
Philadelphia, Penna.
Phoenix-Tucson, Ariz0
Pittsburgh, Pennao
San Francisco-Oakland, Calif.
Seattle-Tacoma, Wash.
St. Louis, Moo
Richnond-Norfolk-Arlington, Va 0
Other
Totals
Number
ia
15
il
5
3
10
17
3
32
25
1U
53
5
10
$
U l5 ,9 7 7
1 ,5 7 6 ,5 1 5
1 ,3 6 2 ,8 8 2
5 ,5 6 1 ,8 1 5
1 6 ,3 8 3
33
3 1 1 ,7 1 3
1 , 2 5 2 ,1 6 6
1 6 3 ,9 3 3
1 0 ,1 8 3 ,6 5 3
9 1 5 , UUl
3 ,7 2 1 ,6 1 9
7 ,5 0 3 ,7 3 8
2 0 6 ,1 9 5
2 8 0 ,U22
3 6 ,6 8 9
76 0 ,8 8 8
1 3 7 ,8 3 8
1 ,0 1 9 ,7 9 3
11*6 ,73U
a ,io o ,7 a 2
283
$ 3 9 ,6 7 5 ,1 3 6
k
12
5
9
3
I.
c.
0
0
2
1
2
1
a
1
1
1
0
0
2
3
0
11
1
2
3
0
2
1
3
2
2
0
9
61
, Assessments , Dollars Seized ,P.R. ,
$
2 8 ,5 1 1
5 a , 220
2 2 ,1 8 3
1 6 ,8 5 0
1 3 ,5 5 5
l5 ,2 a o
1 ,3 0 0
5 9 ,2 3 8
1 ,6 5 6
1 , 6 2 1 ,0 2 7
16 ,0 0 0
5 ,6 2 0
2 ,8 a 3
7 9 ,6 8 a
35,0 0 0
5 ,5 7 3
1 1 ,2 7 a
27a,11a
$
2,263,888
5
3
3
2
1
0
3
a
2
2
a
0
10
1
3
3
. Number
5
1
0
0
0
2
1
a
1
0
1
0
0
1
0
1
2
0
1
37
91
2
67
19
12
78
69
3a
a9
177
27
108
ai
58
11
61
13
8
7
270
aa
20
1239
5
Assessments , Dollars Seized
a ? 6 ,a 3 3
1 ,6 2 9 ,0 3 8
2 3 8 ,8 3 a
2 ,1 3 2 ,8 8 7
ia 9 ,3 2 6
6 9 0 ,6a6
2 ,2 6 a ,a 2 i
i,3 io ,5 a a
3 2 0 ,6 8 0
7 6 2 ,0 3 2
1 0 ,2 9 1 ,8 3 6
1 , 5 0 2 ,9 9 1
■ 7,7 9 a , 275
*
7 1 a , 073
l,a i6 ,6 9 9
a 5 l,2 0 2
2 ,5 8 2 ,6 5 0
2 2 a ,932
2 a 7 ,7 1 2
2 6 a , 88O
7 ,3 9 3 ,8 6 8
$
$ a 2 ,8 5 9 ,9 5 9
$
$
Collections
1 3 6 ,7 9 7
8 1 7 , a87
a a ,8 7 9
5 a 2 ,5 8 2
8 2 ,12 2
1 1 3 ,3 7 5
17 8 ,0 0 8
3 6 7,8 0 6
5 3 ,9 8 9
5 9 3 ,5 9 a
1 ,3 2 5 ,8 0 2
8 6 9 ,3 1 9
3 ,7 6 6 ,2 6 a
3 2 0 ,aa7
3 3 7 ,7 6 5
1 2 0 ,7 5 2
5 3 1 ,1 6 3
1 2 2 ,2 0 a
2 7 ,0 7 1
1 5 ,8 3 6
1 ,9 5 3 ,0 7 3
$
1 2 ,3 2 0 ,a 2 5
$
6 7 ,8 7 7
9 3 ,6 3 6
69 2 ,0 0 0
1 0 ,0 5 2
ia 2 ,8 7 7
8 ,ia a
2 6 ,8 9 5
Dollars Seized includes both property and currency
P.R. - Cases Recommended for Prosecution
I.
- Criminal Cases in U. S. Courts awaiting Trial
Co
- Criminal Convictions
December 1, 1972
i,o a i,a 8 i
DepartmentoftheJRU SlIRY
ASHINGTON. D.C. 20220
JfjH
TELtPHUNE W0 4 -2 Q41
HR
STTENTION:
FINANCIAL EDITOR
RELEASE 6 : 3 0
F.M.
December 4, 1972
RESULTS OF TREASURY'S WEEKLY BILL OFFERING
The Treasury Department announced that the tenders for two series of Treasury
t i l l s , one series to be an additional issue of the bills dated
September 7, 1972 , and
jhe other series to be dated December 7, 1972
, which were invited on November 28, 1972,
ere opened at the Federal Reserve Banks today. Tenders were invited for $2,400,000,000,
r thereabouts, of 9 1 -day bills and for $1,900,000,000, or thereabouts, of 1 8 2 -day
'il ls .
The details of the two series are as follows:
OF ACCEPTED
COMPETITIVE BIDS:
H igh
Low
Average
91 -day Treasury bills
maturing
March 8, 1973
Approx. Equiv.
Price
Annual Rate
98.762
98.743
98.750
4.898$
4.973$
4.945$
1/
183-day Treasury bills
maturing
June 7, 1973
Approx. Equiv.
Price
Annual Rate
97.378
97,349
97.356
5.186$
5.244$
5.230$
1/
7° of the amount of 91 -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
HAL TENDERS APPLIED FOR AND ACCEPTED BY FEDERAL RESERVE DISTRICTS:
D istrict
Boston
Hew York
Philadelphia
Cleveland
Richmond
Atlanta
Chicago
Ct. Louis
Minneapolis
Kansas C it y
Dallas
Can F ra n cisco
TOTALS
Applied For
<j,
25,820,000
2,929,860,000
32,145,000
29,235,000
23,900,000
21,515,000
311,970,000
42,685,000
37,420,000
34,415,000
37,230,000
156,210,000
Accepted
|
I0,520,00o
1,995,610,000
12,145,000
29,235,000
10,500,000
21,515,000
171,720,000
32,685,000
24,170,000
21,315,000
15,730,000
55,210,000
Applied For
$
28,820,000
2,569,560,000
49,190,000
92,695,000
28,205,000
51,640,000
305,980,000
38,110,000
30,410,000
22,810,000
42,410,000
116,040,000
Accepted
|--820,'000
1,574,710,000
10,090,000
56,695,000
9,705,000
21,535,000
112,480,000
27,110,000
11,410,000
20,610,000
14,020,000
37,240,000
$3,682,405,000
$2,400,355,000 a/
$3,366,870,000
$1,900,425,000 b/
%
deludes $173,680,000 noncompetitive tenders accepted at the average price1of 98.750
deludes $ 96,840,000 noncompetitive tenders accepted at the average price of:97.356
Ihese rates are on a bank discount basis. The equivalent coupon issue yields are
5.08 $ for the 91 -day bills, and 5.45$ for the 183-day bills.
■M» ■
DepartmentoftheTREASURY
ISHINGTON, O.C. 20220
TELEPHONE W04-2041
m
re
o n
FOR IMMEDIATE RELEASE
December 5, 1972
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 $4,300,000,000, or thereabouts, for
cash and in exchange for Treasury bills maturing December 14, 1972, in the amount
of $4,103,795,000
as follows:
91-day bills (to maturity date) to be issued December 14, 1972, in the amount
of $2,400,000,000, or thereabouts, representing an additional amount of bills
dated September 14, 1972,and to mature
March 15, 1973
originally issued in the amount of $1,800,810,000,
(CUSIP No. 912793 QK5),
the additional and original
bills to be freely interchangeable.
182 -day bills, for $1,900,000,000, or thereabouts, to be dated December 14, 1972
and. to mature
June 14, 1973
(CUSIP No. 912793
QX7)#
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 $10,000, $15,000, $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 clos
ing hour, one-thirty p.m., Eastern Standard time, Monday, December 11, 1972.
Tenders will not be received at the Treasury Department, Washington.
must be for a minimum of $10,000.
$5,000.
Each tender
Tenders over $10,000 must be in multiples of
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.
may not be used.
Fractions
It is urged that tenders be made on the printed forms and for
warded 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
tanking institutions will not be permitted to submit tenders except for their own
(OVER)
-
account.
2-
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.
Only
thos^
submitting competitive 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 each
issue for $200,000 or less without stated price from any one bidder will be accept|
in full at the average price (in three decimals) of accepted competitive bids
the respective issues.
fo r
Settlement for accepted tenders in accordance with the
bids must be made or completed at the Federal Reserve Bank on December 14, 1972,
in cash or other immediately available funds or in a like face amount of Treasury
bills maturing December 14, 1972.
treatment.
Cash and exchange tenders will receive equal
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.
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 considered to accrui
when the bills are sold, redeemed or otherwise disposed of, and the bills are ex
cluded from consideration as capital assets.
Accordingly, the owner of Treasury
bills (other than life insurance companies) issued hereunder must include in his
income tax return, as ordinary gain or loss, the difference between the price paid
for the 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.
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.
fzl
FOR IMMEDIATE RELEASE
December 5, 1972
ANTIDUMPING INVESTIGATION INITIATED ON
CAIiCIUM PANTOTHENATE FROM JAPAN
The initiation of an antidumping investigation
on imports of calcium pantothenate from Japan was
announced today by Assistant Secretary of the Treasury
Eugene T. Rossides.
Calcium pantothenate is a member
of the B-complex vitamin family and is used as a food
supplement.
This decision will be published in the Federal
Register on Wednesday, December 6, 1972.
Mr. Rossides' announcement followed a summary
investigation conducted by the Bureau of Customs
after receipt of a complaint alleging that dumping
was taking place in the United States.
The total value of the calcium pantothenate
imported from Japan during the period of January 1972
through August 1972 amounted to approximately $450,000
DepartmentoftheTREASURY
plilTO N , D C 20220
TELEPHONE W04 2041
FOR IMMEDIATE RELEASE
December 6, 1972
WILLIAM E. SIMON NOMINATED TO BE
DEPUTY SECRETARY OF THE TREASURY DEPARTMENT
,,
I
I
President Nixon announced on December 6th, 1972, that he
planned to nominate William E. Simon, 44, as Deputy Secretary
of the Treasury, to succeed Charls E. Walker, who is
resigning to enter private business.
ll|!
The post is the second-highest ranking office in the
Department.
Simon has been Senior Partner in charge of the Government
and Bond Department and the Municipal Bond Department of Salomon
-Brothers, New York. Mr. Simon also has been one of the seven
Salomon Brothers partners on the firm's Executive Committee.
He had joined the firm in 1964.
A native of Paterson, N . J . , he was educated at Newark Academy
and Lafayette College, where he received a B.A. degree in 1951.
He began his career in finance in 1952 with Union Securities,
becoming an Assistant Vice President and Manager of the firm's
Municipal Trading Department three years later. In 1957, he
joined Weeden & Co. as Vice President, a post he held until
joining Salomon Brothers.
He served on the Board of Governors and Executive Committee
of the Investment Bankers Association of America, and on its
Governmental Securities Committee which meets quarterly with
U S . T r e a s u r y officials. When the Association merged with the
Association of Stock Exchange Firms in 1972, Mr. Simon was
elected to the Board of Directors, Executive Committee and
Chairman of the Public Finance Council of the new Securities
Industry Association.
He is a founder and past president of the Association of
Primary Dealers in U S - Government Securities, and is active
in many public and private organizations including the Special
Advisory Liaison Committee of the U.S- Department of Housing and
S-81
(OVER)
I
-
2-
Urban Development, National Chairman of Fund Raising for the
United States Olympic Committee, and Chairman of the
Technical Debt Management Committee of New York City. He is
a trustee of Lafayette College, the Mannes College of Music
in New York City and Newark Academy.
He is married to the former Carol Girard. They live with
their seven children at New Vernon, New Jersey.
0O 0
S-81
DepartmentoftheJREASURY
WASHINGTON. O.C. 20220
TELEPHONE W04-2041
.
FOR IMMEDIATE RELEASE
December 6, 1972
EDWARD L. MORGAN NOMINATED TO BE
ASSISTANT SECRETARY OF THE TREASURY FOR ENFORCEMENT, TARIFF
AND TRADE AFFAIRS, AND OPERATIONS
President Nixon announced on December 6th, 1972, that he
planned to nominate Edward L, Morgan,34, as Assistant
Secretary of the Treasury for Enforcement, Tariff and Trade
Affairs, and Operations.
Mr. Morgan, who has been Deputy Special Assistant to the
President for Domestic Affairs, will succeed Eugene T.
Rossides, who is rejoining the New York law firm of
Royall, Koegel, fibWells.
Mr Morgan was born in Lorain, Ohio, March 6, 1938. A
few years later his family moved to Tucson, Arizona. He
attended the University of Arizona at Tucson, receiving a
BA
in Political Science and the Freeman Award as the
University1s outstanding male graduate.
He received his
LLB in 1963 and was admitted to the State Bar of Arizona
the same year.
He was President of the Young Lawyers Section of the State
Bar in 1968-69, and also is a member of the American Bar
Association, the Federal Bar Association, and the District
of Columbia Bar Association. He has been admitted to practice
before the Supreme Court of the United States.
Shortly after graduation, Mr, Morgan entered the armed
services of the United States, where he served in the Adjutant
G e n e r a l s Corps. He received an honorable discharge in 1965 with
the rank of Captain.
After discharge from service, Mr. Morgan joined the law firm of
Gust, Rosenfeld & Divelbess in Phoenix, Arizona, and remained
with that firm until January,1969, when he became Deputy Counsel
to the President. In October of that year he was promoted to be
S-82
(OVER)
-
2
-
Deputy Assistant to the President for Domestic Affairs, and
also holds the post of Assistant Director of the P r e s i d e n t s
Domestic Council.
The President appointed Mr. Morgan to the Council of the
Administrative Conference of the United States in 1969. In 1970,
the President named Mr. Morgan to the post of Vice Chairman of
the Conference. During 1971 to date, Mr. M rgan has also served
as Executive Director of the President’s Cabinet Committee on
Education.
Mr. Morgan is single, and h a s ,a daughter by a prior
marriage.
oOo
S-82
FOR IMMEDIATE RELEASE
December 6, 1972
Secretary of the Treasury George P 0 Shultz today
issued the following statement on the nomination of
William E. Simon to be Deputy Secretary of the Treasury:
nThe President is nominating with my enthusiastic
support William E. Simon to be Deputy Secretary of the
Treasury.
"He has a keen mind, is an expert in the field
of finance, and is an outstanding administrator. Many
officials of the government share the President’s great
admiration of him.
"1 am convinced that he will be of great aid in
the many vital projects on which Treasury is engaged."
0O0
D e p a r t m e n t a l ‘^TREASU
RY1
SHINGTON., OX.
O.C.2
202201
0220
TELEPHONE W04-2041
FOR IMMEDIATE RELEASE
MJ W I
U VJ Lb U U
December 6, 1972
Secretary of the Treasury George P. Shultz today
issued the following statement on the nomination of
Edward L. Morgan to be Assistant Secretary of the
Treasury for Enforcement, Tariff and Trade Affairs, and
Operations:
"I have worked closely with Ed Morgan at the White House,
and I am convinced his background uniquely qualifies him, ✓
for the post he is undertaking.
"His background in law, his outstanding analytical
ability, his knowledge of the workings of the government,
and his ability to bring together diverging viewpoints
will be of major help to me and to the Treasury Department
as he takes on his new assignment.
"He has my total confidence —
of the President.”
S-84
as he has the confidence
DepartmentoftheTREA$URY
ASHINGTON, D.C. 20220
TELEPHONE W04 2041
FOR RELEASE P.M. NEWSPAPERS
THURSDAY, DECEMBER 7, 1972
TREASURY ISSUES AMENDMENTS
TO ANTIDUMPING REGULATIONS
Amendments to the Antidumping Regulations which are
intended to insure that the Antidumping Act is made more
effective in defending U.S.; industry against unfair
international trade practices in the dumping area, while
at the same time providing complete fairness in antidumping
investigations, were announced today by Assistant Secretary
of the Treasury Eugene T. Rossides.
The amendments adopt most of the changes contained in
a Treasury notice of proposed rule making published in the
Federal Register on April 19, 1972, which include, among
others, specific timetables for processing cases and special
procedures for accelerated renewal of investigations where
the Treasury has reasonable cause to believe that price
assurances have been violated in discontinued investigations.
The Treasury notice provided a period of sixty days
during which interested persons could submit comments. After
considering all comments, the Treasury is adopting the amended
Antidumping Regulations announced today. In addition to
adopting most of these earlier proposed changes, the Department
has made other changes, including an amendment which sets forth
procedures whereby discontinued investigations can be terminated
and an amendment which specifically provides that when an
investigation is discontinued on the basis of price assurances,
the foreign manufacturers,,producers, or exporters will permit
verification of the information they submit in periodic reports.
Other changes have been made to clarify both existing and newly
implemented procedures.
With a few exceptions noted therein, the amendments shall
apply to antidumping proceedings in which neither a decision,
final or tentative, nor a withholding of appraisement is
published before January 8, Ì972.
A copy of the amended Regulations which will be published
in the Federal Register of December 9, 1972,is attached.
Attachment
S-80
S/t
ADM-9-REG:bjf
(T. D. 72-
336
)
Antidumping— Customs Regulations amended
Procedures relating to antidumping investigations and determinations
modified; Part 153» Customs Regulations amended.
DEPARTMENT OF THE TREASURY
OFFICE OF THE COMMISSIONER OF CUSTOMS
Washington, D. C.
TITLE 19— CUSTOMS DUTIES
CHAPTER I— BUREAU OF CUSTOMS
PART 153 - ANTIDUMPING
On April 13, 1971» a Notice of Proposed Rule Making was published
in the Federal Register
(36 F.R. 7012) inviting interested persons to
submit suggestions for improving those provisions of the Customs
Regulations relating to antidumping procedures
(19 CFR Part 153).
Subsequently, proposed amendments were published in the Federal Register
on April 19, 1972 (37 F.R.
notice").
7698) (hereinafter referred to as "the
After consideration of all data, views, or arguments
submitted in response to the notice, the following additional changes
are made in Part 153:
1.
In section 153.8, the proposal to delete the word "reasonably"
wherever it appears before the words "direct relationship" is adopted.
However, the statement in the commentary to the notice that under the
change such items as bad debts and general advertising will no longer
be allowed as differences in circumstances of sale is modified to the
extent that expenses for general advertising of the particular
2
product under investigation will continue to be considered appropriate
for allowance as a circumstance of sale.
2»
Paragraph (b) of section 153.15 is changed to specify a
circumstance under which manufacturers, producers, or exporters
involved will be named in the "Notice of Tentative Discontinuance of
Antidumping Investigation."
3.
Paragraph (c) of section 153.15 is changed to include in the
statement of price assurances an additional assurance to the effect
that the manufacturer, producer, or exporter concerned will permit
verification of information submitted in periodic reports.
4.
Paragraph (e) of section 153.15 has been changed to clarify
existing procedures for publication of a "Discontinuance of Antidumping
Investigation" notice following publication of a "Withholding o f Appraisement Notice" or a "Notice of Tentative Negative Determination."
5.
A new paragraph 153.15(h) is added, setting forth procedures
for the termination of discontinued antidumping investigations.
6.
Section 153.17 is changed to state that merchandise specified
in this section must be resold to an unrelated United States purchaser
before an exporter's sales price can be determined.
7.
Paragraph (c) of section 153.33 is changed to make clear
existing procedures for publication of a negative determination
following publication of a "Notice of Tentative Discontinuance of
antidumping Investigation."
3
8.
In section 153.37, the provisions for opportunity to
present views following publication of notice of a tentative
decision or a notice of withholding of appraisement have been
consolidated.
Appropriate changes reflecting this are made In
sections 153.15, 153.33 and 153.41.
Accordingly, Part 153, together with all amendments thereto,
of the Customs Regulations, Chapter I, Title 19 of the Code of
Federal Regulations, is hereby adopted, and republished as set forth
below.
Effective date. Paragraphs (f), (g), and (h) of section 153.15
shall be effective with respect to all discontinued investigations,
whether or not discontinued before the date of publication of these
amendments.
The balance of the amendments shall be effective with
respect to all antidumping proceedings in which neither a decision,
final or tentative, nor a notice of withholding of appraisement has
been published before the 30th day after the date of publication of
these amendments in the Federal Register.
Assistant Secretary of the Treasury
PART 153— ANTIDUMPING
153.1
Scope.
Subpart A - Fair Value
153.2
Fair value; Definition.
153.3
Fair value based on price in country of exporta
tion; The usual test.
153.4
Fair value based on sales for exportation to
countries other than the United States.
153.5
Fair value based on constructed value.
153.6
Calculation of fair value.
153.7
Fair value; Differences in quantities.
153.8
Fair value; Circumstances of sale.
153.9
Fair value; Similar merchandise.
153.10
Fair value; Offering price.
153.11
Fair value; Sales agency.
153.12
Fair value; Fictitious sales.
153.13
Fair value; Sales at varying prices.
153.14
Fair value; Quantities involved and differences
in price.
153.15
Discontinuance of antidumping investigation.
153.16
Fair value; Shipments from intermediate country
153.17
Fair value; Merchandise resold in a changed
condition.
153.18
Fair value; Level of trade
Subpart B - Availability of Information
153,23
Availability of information in antidumping
proceedings.
Subpart C - Procedure Under Antidumping Act, 1921
153.25
Suspected dumping; Information from Customs
officer.
153.26
Suspected dumping; Information from persons
outside Customs Service.
153.27
Suspected dumping; Nature of information to be
made available.
153.28
Adequacy of information.
153.29
Initiation of antidumping proceeding; Summary
investigation.
153.30
Antidumping Proceeding Notice.
153.31
Full scale investigation.
153.32
Determination as to fact or likelihood of
sales at less than fair value.
153.33
Negative determination.
153.34
Withholding of appraisement.
153.35
Affirmative determination; General.
153.36
Affirmative determination; Appraisement
withheld pursuant to section 153.34(b).
153.37
Opportunity to present views.
3
153*38
Referral to United States Tariff Commission.
153.39
Revocation of determination of sales at less
than fair value; Determination of sales at
not less than fair value.
153.40
Dumping finding.
153.41
Modification or revocation of finding.
153.42
Publication of determinations and findings.
153.43
List of current findings.
Subpart D - Action by District Director of Customs
153.48
Action by the District Director of Customs.
153.49
Reimbursement of dumping duties.
153.50
Release of merchandise; Bond.
153.51
Type of bond required.
153.52
Conversion of currencies.
153.53
Dumping duty.
153.54
Notice to importer.
153.55
Dumping duty; Samples.
153.56
Method of computing dumping duty.
Subpart E - Antidumping Protests
153.64
Authority:
Antidumping protests procedures.
The provisions of this Part 153 issued under sections
201-212, 407, 42 Stat. 11 et seq., as amended, section 5,
72 Stat. 585, sections 406, 407, 42 Stat. 18; 5 U.S.C. 301,
19 U.S.C. 160-173.
Other authorities are cited to text in
parentheses.
153.1
Scope.
This part sets forth procedures and rules applicable to
proceedings under the Antidumping Act, 1921, as amended, the
assessment of the special dumping duty, and protests relating to
matters under the Antidumping Act, 1921, as amended.
SUBPART A - FAIR VALUE
153.2
Fair value; Definition.
For the purposes of section 201(a) of the Antidumping
Act, 1921, as amended (19 U.S.C. 160(a)), the fair value of the
imported merchandise shall be determined in accordance with
sections 153.3 to 153.5.
153.3
Fair value based on price in country of exportation;
The usual test.
(a)
General. Merchandise imported into the United
States will ordinarily be considered to have been sold, or to be
likely to be sold, at less than fair value if the purchase price
or exporter*s sales price (as defined in sections 203 and 204,
respectively, of the Antidumping Act, 1921, as amended (19 U.S.C.
162, 163)), as the case may be, is, or is likely to be, less than
the price (as defined in section 205, after adjustment as provided
for in section 202 of the Antidumping Act, 1921, as amended
5
(19 U.S.C. 164, 161)), at which such or similar merchandise
(as defined in section 212(3) of the Antidumping Act, 1921, as
amended (19 U.S.C. 170a(3))) is sold for consumption in the
country of exportation on or about the date of purchase or
agreement to purchase of the merchandise imported into the
United States if purchase price applies, or on or about the
date of exportation thereof if exporter*s sales price applies.
(b)
Restricted sales. When home market sales form
the appropriate basis of comparison, they will be used for this
purpose whether or not they are restricted.
If there should be
restrictions which affect the value of the merchandise, appropriate
adjustment of the home market price will be made.
153.4
Fair value based on sales for exportation to countries
other than the United States.
(a)
General.
If it is demonstrated that during a
representative period the quantity of such or similar merchandise
sold for consumption in the country of exportation is so small,
in relation to the quantity sold for exportation to countries
other than the United States, as to be an inadequate basis for
comparison, then merchandise imported into the United States will
ordinarily be deemed to have been sold, or to be likely to be
sold, at less than fair value if the purchase price or the exporter*s
sales price (as defined in sections 203 and 204, respectively, of
the Antidumping Act, 1921, as amended (19 U.S.C. 162, 163)), as
the case may be, is, or is likely to be, less than the price
(as defined in section 205, after adjustment as provided for in
section 202 of the Antidumping Act, 1921, as amended (19 U.S.C.
164, 161)), at which such or similar merchandise (as defined
in section 212(3) of the Antidumping Act, 1921, as amended
(19 U.S.C. 170(a)(3))), is sold for exportation to countries
other than the United States on or about the date of purchase
or of agreement to purchase the merchandise imported into the
United States if purchase price applies, or on or about the
date of exportation thereof if exporter’s sales price applies.
(b)
Restricted sales. When third country sales form
the appropriate basis of comparison, they will be used for this
purpose whether or not they are restricted.
If there should be
restrictions which affect the value of the merchandise, appropriate
adjustment of the third country price will be made.
153.5
Fair value based on constructed value.
(a)
General.
If the information available is deemed
by the Secretary insufficient or inadequate for a determination
under sections 153.3 or 153.4 he will determine fair value on the
basis of the constructed value as defined in section 206 of the
Antidumping Act, 1921, as amended (19 U.S.C. 165).
(b)
Merchandise from controlled economy country.
Ordinarily, if the information available indicates that the
7
economy of the country from which the merchandise is exported
is controlled to an extent that sales or offers of sales of
such or similar merchandise in that country or to countries other
than the United States do not permit a determination of fair
value under sections 153.3 or 153.4, the Secretary will determine
fair value on the basis of the constructed value of the merchandise
determined on the normal costs, expenses, and profits as reflected
by the prices at which such or similar merchandise is sold by a
non-state-controlled-economy country either (1) for consumption
in its own market; or (2) to other countries, including the United
States.
153.6
Calculation of fair value.
In calculating fair value under section 201(a), Anti
dumping Act, 1921, as amended (19 U.S.C. 160(a)), the criteria
in sections 153.7 through 153.16 shall apply.
153.7
Fair value; Differences in quantities.
(a)
General.
In comparing the purchase price or
exporter's sales price, as the case may be, with such applicable
criteria as sales or offers, on which a determination of fair
value is to be based, reasonable allowances will be made for
differences in quantities if it is established to the satisfaction
of the Secretary that the amount of any price differential is
wholly or partly due to such differences.
In determining the ques
tion of allowances for differences in quantity, consideration will
3f 1
8
be given, among other things, to the practice of the industry in the
country of exportation with respect to affording in the home market
(or third country markets, where sales to third countries are the
basis for comparison) discounts for quantity sales which are freely
available to those who purchase in the ordinary course of trade.
(b)
Criteria for allowances. Allowances for price
discounts based on sales in large quantities ordinarily will not be
made unless:
(1)
Six-month rule.
The exporter during the 6 months
prior to the date when the question of dumping was raised or presented
(or during such other period as investigation shows is more
representative) had been granting quantity discounts of at least
the same magnitude with respect to 20 percent or more of such or
similar merchandise which he sold in the home market (or in third
country markets when sales to third countries are the basis for
comparison) and that such discounts had been freely available to
all purchasers, or
(2)
Cost justification.
The exporter can demonstrate
that the discounts are warranted on the basis of savings specifically
attributable to the quantities involved.
(c)
Price lists.
In determining whether a discount
has been given, the presence or absence of a published price
list reflecting such a discount is not controlling.
In certain
lines of trade, price lists are not commonly published and in
others although commonly published they are not commonly adhered
to
9
153,8
Fair value; Circumstances of sale.
(a)
General.
In comparing the purchase price or
exporter*s sales price, as the case may be, with the sales, or
other criteria applicable, on which a determination of fair value
is to be based, reasonable allowances will be made for bona fide
differences in circumstances of sale if it is established to the
satisfaction of the Secretary that the amount of any price differ
ential is wholly or partly due to such differences.
Differences
in circumstances of sale for which such allowances will be made
are limited, in general, to those circumstances which bear a
direct relationship to the sales which are under consideration.
(b)
Examples.
Examples of differences in circumstances
of sale for which reasonable allowances generally will be made
are those involving differences in credit terms, guarantees,
warranties, technical assistance, servicing, and assumption by
a seller of a purchaser’s advertising or other selling costs.
Reasonable allowances will also generally be made for differences
in commissions.
Except in those instances where it is clearly
established that the differences in circumstances of sale bear
a direct relationship to the sales which are under consideration,
allowances generally will not be made for differences in research
and development costs, production costs, and advertising and other
selling costs of a seller unless such costs are attributable to a
later sale of merchandise by a purchaser? provided
that reasonable
10
allowances for selling expenses generally will be made in cases
where a reasonable allowance is made for commissions in one of
the markets under consideration and no commission is paid in
the other market under consideration, the amount of such allowance
being limited to the actual selling
expense incurred in the one
market or the total amount of the commission allowed in such other
market, whichever is less,
(c)
Relation to market value.
In determining the
amount of the reasonable allowances for any differences in
circumstances of sale, the Secretary will be guided primarily by
the effect of such differences upon the market value of the
merchandise but, where appropriate, may also consider the cost of
such differences to the seller, as contributing to an estimate
of market value,
153,9
Fair value; Similar merchandise.
In comparing the purchase price or exporter*s sales price,
as the case may be, with the selling price in the home market, or
for exportation to countries other than the United States, in the
case of similar merchandise described in subdivisions (C), (D), (E),
or (F) of section 212(3), Antidumping Act, 1921, as amended (19 U.S.C,
170a(3)), due allowance shall be made for differences in the mer
chandise,
In this regard the Secretary will be guided primarily by
the effect of such differences upon the market value of the mer
chandise but, when appropriate, he may also consider differences in
11
cost of manufacture if it is established to his satisfaction that
the amount of any price differential is wholly or partly due to
such differences.
153.10
Fair value; Offering price.
In the determination of fair value, offers will be con
sidered in the absence of sales, but an offer made in circumstances
in which acceptance is riot reasonably to be expected will not be
deemed to be an offer.
153.11
Fair value; Sales agency.
If such or similar merchandise is sold or, in the absence
for
of sales, offered / sale through a sales agency or other organization
related to the seller in any of the respects described in section
207 of the Antidumping Act, 1921 (19 U.S.C. 166), the price at which
such or similar merchandise is sold or, in the absence of sales,
offered for sale by such sales agency or other organization may be
used in the determination of fair value.
153.12
Fair value; Fictitious sales.
In the determination of fair value, no pretended sale or
offer for sale, and no sale or offer for sale intended to establish
a fictitious market, shall be taken into account.
153.13
Fair value; Sales at varying prices.
Where the prices in the sales which are being examined
for a determination of fair value vary (after allowances provided
for in sections 153.7, 153.8, and 153.9), determination of fair
value will take into account either the prices of a preponderance of
the merchandise, or the weighted averages of the prices of
r
?
12
the merchandise
thus sold.
Unless there is a clear preponderance
of merchandise sold at the same price,
weighted averages of the
prices of the merchandise sold will normally be used.
If there is
not a clear preponderance of the merchandise sold at the same price
and weighted averages of the prices of the merchandise sold are
determined by the Secretary to be inappropriate, the Secretary may
use any method for determining fair value which he deems appropriate.
153.14
Fair value; Quantities involved and differences in
price.
Merchandise will not be deemed to have been sold at less
than fair value unless the quantity involved in the sale or sales to
the United States, or the difference between the purchase price
or exporter’s sales price, as the case may be, and the fair value,
is more than insignificant.
153.15
(a)
Discontinuance of antidumping investigation.
Price assurances, termination of sales or other
circumstances. Whenever the Secretary of the Treasury is satisfied
during the course of an antidumping investigation that either:
(1)
Price revisions have been made which eliminate
the likelihood of sales at less than fair value and that there is
no likelihood of resumption of the prices which prevailed before
such revision, and assuranceshave been received to this effect;
or
13
(2)
Sales to the United States of the merchandise
have terminated and will not be resumed and assurances have been
received to this effect;
or whenever the Secretary concludes that there are other circumstances
on the basis of which it may no longer be appropriate to continue an
antidumping investigation, the Secretary may publish a "Notice of
Tentative Discontinuance of Antidumping Investigation" in the
Federal Register,
(b)
Notice of Tentative Discontinuance of Antidumping
Investigation, The notice will set forth a description of the
merchandise involved and state the facts relied upon by the Secretary
in publishing the notice and that those facts are considered to be
evidence warranting the discontinuance of the investigation.
In the
case of investigations tentatively discontinued pursuant to subparagraph
(a)(2) of this section, the notice will identify the manufacturers,
producers or exporters who have furnished appropriate assurances.
The notice will also state that interested persons shall be given the
opportunity to present their views under the procedure set forth in
section 153,37, and unless persuasive evidence or argument to the
contrary is presented within such period as is specified in the notice
the Secretary will publish a final notice discontinuing the investigation.
The tentative acceptance of price assurances or assurances of
termination of sales to the United States, and price revisions or the
termination of sales to the United States will not prevent the Secretary
from making a determination of sales at less than fair value in
any case where he considers such action appropriate.
(c)
Statement concerning assurances. Assurances provided
for in paragraph (a) of this section, shall be in substantially the
following form:
I hereby certify that I am (an officer)
(attorney-in-fact) of (name of foreign manu
facturer, producer or exporter) and am authorized,
on behalf of (name of foreign manufacturer,
producer or exporter), to give assurances that:
(Select the applicable provision.)
1.
All future sales of (commodity) by
(name of foreign manufacturer, producer or
exporter) for exportation to the United
States shall be made at prices which are not
less than fair value within the meaning of
the Antidumping Act, 1921, as amended
(19 U.S.C. 160 et seq.) and that (name of
manufacturer, producer or exporter) shall
make a report to the Commissioner of Customs
which shall contain or be accompanied by the
information required by section 153.15(f)
of the Customs Regulations (19 CFR 153.15(f))
for such period of time and at such intervals
15
as the Secretary may deem appropriate and
shall cooperate in allowing whatever veri
fication of such information is deemed
necessary by the Secretary; or
2.
All sales of (conmodity) by (name of
foreign manufacturer, producer or exporter)
for exportation to the United States have
terminated and shall not be resumed.
Officer or Attomey-in-fact
(d)
Final discontinuance.
As soon as possible after the
publication of a "Notice of Tentative Discontinuance of Antidumping
Investigation" the Secretary will determine whether final discontin
uance is warranted and, if he so determines, publish a "Discontinuance
of Antidumping Investigation" notice in the Federal Register.
(e)
Final discontinuance after issuance of a "Withholding
of Appraisement Notice" òr a "Notice of Tentative Negative Determination".
The procedures specified in paragraphs (b) and (d) of this section will
not apply if the decision to issue a "Discontinuance of Antidumping
Investigation" notice is made by the Secretary after a "Withholding
of Appraisement Notice" or "Notice of Tentative Negative Determination"
has been issued and thereafter he has afforded interested parties an
opportunity to be heard pursuant to the provisions of section 153.37.
In lieu thereof a "Discontinuance of Antidumping Investigation" notice
from making a determination of sales at less than fair value in
any case where he considers such action appropriate.
(c)
Statement concerning assurances. Assurances provided
for in paragraph (a) of this section, shall be in substantially the
following form:
I hereby certify that I am (an officer)
(attorney-in-fact) of (name of foreign manu
facturer, producer or exporter) and am authorized,
on behalf of (name of foreign manufacturer,
producer or exporter), to give assurances that:
(Select the applicable provision.)
1.
All future sales of (commodity) by
(name of foreign manufacturer, producer or
exporter) for exportation to the United
States shall be made at prices which are not
less than fair value within the meaning of
the Antidumping Act, 1921, as amended
(19 U.S.C. 160 et seq.) and that (name of
manufacturer, producer or exporter) shall
make a report to the Commissioner of Customs
which shall contain or be accompanied by the
information required by section 153.15(f)
of the Customs Regulations (19 CFR 153.15(f))
for such period of time and at such intervals
15
as the Secretary may deem appropriate and
shall cooperate in allowing whatever veri
fication of such information is deemed
necessary by the Secretary; or
2.
All sales of (commodity) by (name of
foreign manufacturer, producer or exporter)
for exportation to the United States have
terminated and shall not be resumed.
Officer or Attorney-in-fact
(d)
Final discontinuance. As soon as possible after the
publication of a ’’Notice of Tentative Discontinuance of Antidumping
Investigation” the Secretary will determine whether final discontin
uance is warranted and, if he so determines, publish a ’’Discontinuance
of Antidumping Investigation” notice in the Federal Register.
(e)
Final discontinuance after issuance of a ’’Withholding
of Appraisement Notice” ór a ’’Notice of Tentative Negative Determination”.
The procedures specified in paragraphs (b) and (d) of this section will
not apply if the decision to issue a ’’Discontinuance of Antidumping
Investigation” notice is made by the Secretary after a ’’Withholding
of Appraisement Notice” or ’’Notice of Tentative Negative Determination”
has been issued and thereafter he has afforded interested parties an
opportunity to be heard pursuant to the provisions of section 153.37.
In lieu thereof a "Discontinuance of Antidumping Investigation” notice
3
16
will be published in the Federal Register setting forth the statement
of reasons therefor.
(f)
Periodic reports by foreign exporters.
Whenever an
investigation has been discontinued by the Secretary on the basis
of price assurances, the foreign manufacturer, producer, or exporter
of the merchandise which was the subject of the discontinued
investigation shall thereafter make a report to the Commissioner of
Customs for such period of time and at such intervals as the Secretary
may deem appropriate.
The periodic reports to the Commissioner of
Customs generally shall, as determined by the Secretary, contain or
be accompanied by the following:
(1)
Prices at, and the terms and conditions on which,
the merchandise is being sold for export to the United States and in
17
the applicable foreign market (or information regarding constructed
value as set forth in section 206 of the Antidumping Act, 1921, as
amended (19 U.S.C. 165));
(2)
Published price lists, if any;
(3)
Information regarding discounts, quantities
involved on a per sale basis, shipping charges, packing costs, and
other circumstances of sales in the two markets under consideration;
(4)
Information regarding differences in cost of
manufacture where similar merchandise is compared pursuant to
section 153.9; and
(5)
Such other information which the Secretary deems
appropriate.
(g)
Reopening of discontinued investigation.
In the event
that the Secretary determines, subsequent to the discontinuance of an
investigation pursuant to paragraph (d) of this section, that there
are reasonable grounds to believe or suspect that there are or are
likely to be sales to the United States at less than fair value, he
will reopen the investigation by publishing forthwith in the Federal
Register a "Withholding of Appraisement Notice" with respect to the
merchandise.
If,prior to the discontinuance of the investigation,
importers and exporters concerned had requested a 6-month withholding
of appraisement pursuant to section 153.34(b), when the investigation
is reopened the Secretary may withhold appraisement for 6 months.
If
no such requests have been received, the Secretary may withhold
appraisement pursuant to section 153.34(a).
The withholding of
appraisement may be made effective with respect to merchandise entered,
or withdrawn from warehouse, for consumption not more than 90 days
before the date of publication.
Whenever an investigation is reopened,
interested persons will be given the opportunity to present their
views pursuant to section 153.37.
(h)
Termination of discontinued investigations.
(1)
Whenever the Secretary is satisfied that termination
of a discontinued investigation is appropriate, he will publish a
"Notice of Tentative Termination of Antidumping Investigation" in
the Federal Register.
The notice will set forth a description of the
merchandise involved and state the facts relied upon by the Secretary
in publishing the notice and that those facts are considered to be
evidence warranting the termination of the investigation.
The notice
will also state that interested persons shall be given the opportunity
to present their views under the procedure set forth in section 153.37,
and unless persuasive evidence or argument to the contrary is presented
within the period specified in the notice the Secretary will publish
a final notice terminating the investigation.
(2)
As soon as possible thereafter the Secretary will
determine whether final termination is warranted and, if he so
determines, publish a "Notice of Termination of Antidumping Investigation"
in the Federal Register.
153.16
Fair value; Shipments from intermediate country.
If the merchandise is not imported directly from the country
of origin, but is shipped to the United States from another country,
19
the price at which such or similar merchandise is sold in the country
of origin will be used in the determination of fair value if the
merchandise was merely transshipped through the country of shipment.
153.17
Fair value; Merchandise resold in a changed condition.
If exporter's sales price (as defined in section 204 of
the Antidumping Act, 1921 (19 U.S.C. 163)), is applicable and the
imported merchandise is resold to an unrelated United States
purchaser in a condition different from that in which it was
imported, the Secretary may use such reasonable basis as he deems
appropriate to determine exporter's sales price.
153.18
Fair value; Level of trade.
The comparison of the purchase price or exporter's sales
price (as defined in sections 203 and 204, respectively, of the
Antidumping Act, 1921, as amended (19 U.S.C. 162, 163)), as the case
may be, with the applicable price in the home market of the country
of exportation (or, as the case may be, price to third country
markets) will generally be made at the same level of trade.
However,
if the Secretary finds that the sales of the merchandise to the
United States or in the applicable foreign market are insufficient
in number to permit an adequate comparison, the comparison will be
made at the nearest comparable level of trade and appropriate adjustments
shall be made for differences affecting price comparability.
SUBPART B - AVAILABILITY OF INFORMATION
Note:
For Bureau of Customs general provisions relating to
availability of information see Part 103 of this chapter.
153.23
Availability of information in antidumping proceedings.
(a)
Information generally available.
information but not necessarily all documents
In general, all
obtained by the
Treasury Department, including the Bureau of Customs, in connection
with any antidumping proceeding will be available for inspection or
copying by any person.
With respect to documents prepared by an
officer or employee of the United States, factual material, as
distinguished from recommendations and evaluations, contained in
any such document will be made available by summary or otherwise
on the same basis as information contained in other documents.
Attention is directed to section 24.12 of this chapter relating
to fees charged for providing copies of documents.
(b)
Requests for confidential treatment of information.
Any person who submits information in connection with an antidumping
proceeding may request that such information, or any specified part
thereof, be held confidential.
Information covered by such a
request shall be set forth on separate pages from other information;
and all such pages shall be clearly marked "Confidential Treatment
Requested."
The Commissioner of Customs or the Secretary of the
Treasury or the ’elegate of either will determine, pursuant to
paragraph (c)of this section, whether such information, or any
21
part thereof, shall be treated as confidential.
If it is so
determined, the information covered by the determination will not
be made available for inspection or copying by any person other
than an officer or employee of the United States Government or a
person who has been specifically authorized to receive it by the
person requesting confidential treatment.
If it is determined
that information submitted with such a request, or any part
thereof, should not be treated as confidential, or that summarized
or approximated presentations thereof should be made available
for disclosure, ‘the person who has requested confidential treatment
thereof shall be promptly so advised and, unless he thereafter
agrees that the information, or any specified part or summary or
approximated presentations thereof, may be disclosed to all interested
parties, the information will not be made available for disclosure,
but to the extent that it is self-serving it will be disregarded
for the purpose of the determination as to sales at less than fair
value and no reliance shall be placed thereon in this connection,
unless it can be demonstrated from other sources that the information
is correct.
(c)
Standards for determining whether information will be
regarded as confidential.
(1)
General.
Information will ordinarily be considere
to be confidential only if its disclosure would be of significant
competitive advantage to a competitor or would have a significantly
22
adverse effect upon a person supplying the information or upon a
person from whom he acquired the information*
Further, if
disclosure of information in specific terms or with identifying
details would be inappropriate under this standard, the information
will ordinarily be considered appropriate for disclosure in
generalized, summary or approximated form, without identifying
details, unless the Commissioner of Customs or the Secretary of the
Treasury or the delegate of either determines that even in such
generalized, summary or approximated form, such disclosure would
still be of significant competitive advantage to a competitor or
would still have a significantly adverse effect upon a person
supplying the information or upon a person from whom he acquired
the information*
As indicated in paragraph (b) of this section,
however, the decision that information is not entitled to pro
tection from disclosure in its original or in another form will not
lead to its disclosure unless the person supplying it consents to
such disclosure.
(2)
for disclosure.
Information ordinarily regarded as appropriate
Except as provided in section 153.23(c)(3), information
will ordinarily be regarded as appropriate for disclosure if it:
(i)
(ii)
Relates to price information;
Relates to claimed freely available price
allowances for quantity purchases; or
(iii)
cumstances of sale
Relates to claimed differences in cir
23
(3)
Information ordinarily regarded as confide
Information will ordinarily be regarded as confidential if its
disclosure would:
(i)
(ii)
(iii)
Disclose business or trade secrets;
Disclose production costs;
Disclose distribution costs, except to
the extent that such costs are accepted as justifying allowances for
quantity or differences in circumstances of sale;
(iv)
Disclose the names of particular customers
or the price of prices at which particular sales were made; or
(v)
Disclose the names of particular persons from
whom confidential information was obtained, if nondisclosure of the
names has been requested (5 U.S.C. 552).
SUBPART C - PROCEDURE UNDER ANTIDUMPING ACT, 1921
153.25
Suspected dumping; Information from Customs officers.
If any district director of Customs has knowledge of any
grounds for a reason to believe or suspect that any merchandise is
being, or is likely to be, imported into the United States at a
purchase price or exporter*s sales price less than the foreign
market value (or, in the absence of such value, then the constructed
value), as contemplated by section 201(b) Antidumping Act, 1921, as
amended (19 U.S.C. 160(b)), or at less than its ,ffair value” as that
term is defined in section 153.2, he shall communicate his belief or
suspicion promptly to the Commissioner of Customs.
Every such
q
24
fp
communication shall contain or be accompanied by a statement of
substantially the same information as is required in section 153,27,
if the district director has such information or if it is readily
available to him.
153.26
Suspected dumping; Information from persons outside
Customs Service.
Any person outside the Customs Service who has information
that merchandise is being, or is likely to be, imported into the
United States under such circumstances as to bring it within the
purview of the Antidumping Act, 1921, as amended, may, on behalf of
an industry in the United States, communicate such information in
writing to the Commissioner of Customs.
153.27
Suspected dumping; Nature of information to be made
available.
Communications to the Commissioner pursuant to section
153.26, regarding suspected dumping should, to the extent feasible,
contain or be accompanied by the following:
(a)
A detailed description or sample of the
merchandise; if no sample is furnished, the Bureau of Customs may
call upon the person who furnished the information to furnish
samples of the imported and conpetitive domestic articles, or
either;
(b)
The name of the country from which it is being,
or is likely to be, imported;
25
(c)
The name of the exporter or exporters and
producer or producers, if known;
(d)
The ports or probable ports of inport ation into
the United States;
(e)
Information indicating that an industry in the
United States is being injured, or is likely to be injured, or
prevented from being established;
(f)
Such detailed data as are available with respect
to values and prices indicating that such merchandise is being, or
is likely to be, sold in the United States at less than its fair
value, within the meaning of the Antidumping Act, 1921, as amended,
including information as to any differences between the foreign
market value or constructed value and the purchase price or exporter's
sales price which may be accounted for by any difference in taxes,
discounts, incidental costs such as those for packing or freight,
or other items.
(g)
Such material as is available indicating the
market price for similar merchandise in the country of exportation
and in any third countries in which merchandise of the producer
complained of is known to be sold.
(h)
Such information as is available as to sales made
for consumption in the country of exportation or for exportation
otherwise than to the United States over a significant period of
time prior to the date upon which the information is furnished.
(i)
Such suggestions as the person furnishing the
information may have as to specific avenues of investigation to be
pursued or questions to be asked in seeking pertinent information.
153.28
Adequacy- of information.
If any information filed pursuant to section 153.26 in
the opinion of the Commissioner does not conform substantially with
the requirements of section 153.27, the Commissioner shall return
the communication to the person who submitted it with detailed
written advice as to the respects in which it does not conform.
153.29
Initiation of antidumping proceeding; Summary
investigation.
Upon receipt of information pursuant to section 153.25
or 153.26 in a form acceptable to the Commissioner, the Commissioner
shall conduct a summary investigation.
If he determines that the
information is patently in error, or that merchandise of the class
or kind is not being and is not likely to be imported in more than
insignificant quantities, or for other reasons determines that
further investigation is not warranted, he shall so advise the
person who submitted the information and the case shall be closed.
153.30
Antidumping Proceeding Notice.
(a)
Publication of Antidumping Proceeding Notice. If the
case has not been closed under section 153.29, the Secretary will
publish a notice in the Federal Register that information in an
acceptable form has been received pursuant to section 153.25 or
153.26.
This, notice»to be referred to as the "Antidumping Proceeding
Notice," will specify:
27
(1)
A description of the merchandise involved;
(2)
Whether the proceeding relates to all shipments
of the merchandise in question from an exporting country, or only
to shipments by certain persons or firms; in the latter case, the
names of such persons and firms will be specified;
(3)
The date on which information in an acceptable
form was received and that date shall be the date on which the
question of dumping was raised or presented for purposes of sections
201(b) and 202(a) of the Antidumping Act, 1921, as amended (19 U.S.C.
160(b) and 161(a));
(4)
The fact that there is some evidence on record
concerning injury to or likelihood of injury to or prevention of
establishment of an industry in the United States; and
(5)
A summary of the information received.
If a
person outside the Customs Service raised or presented the question
of dumping, his name may be included in the notice unless a
determination under section 153,23 requires that his name not be
disclosed,
(b)
Time limit on publication. Generally, antidumping
proceeding notices issued pursuant to section 153.30 shall be published
in the Federal Register within 30 days after the date that information
was received pursuant to section 153,25 or 153.26 in a form acceptable
to the Commissioner,
153.31
(a)
Full scale investigation.
Initiation of investigation.
Upon publication of
an Antidumping Proceeding Notice, the Commissioner shall proceed, by
28
a full-scale investigation, or otherwise, to obtain such additional
information, if any, as may be necessary to enable the Secretary
to reach a determination as provided by section 153.32.
In order to
verify the information presented, or to obtain further details,
investigations will, where appropriate, be conducted by Customs
Representatives in foreign countries, unless the country concerned
objects to the investigation.
If an adequate investigation is not
permitted, or if any necessary information is withheld, the Secretary
will reach a determination on the basis of such facts as are available
to him.
(b)
Pricing information. Ordinarily the Commissioner will
require the foreign manufacturer, producer, or exporter to submit
pricing information covering a period of at least 120 days prior to
the date that information in a form acceptable to the Commissioner was
received pursuant to section 153.25 or 153.26.
The Commissioner may,
however, require the submission of pricing information for such longer
period as he deems necessary; and he may also require the submission
of pricing information on a current basis during the course of the
investigation.
153.32
Determination as to fact or likelihood of sales at
less than fair value.
(a)
Fair value determination. Upon receipt from the
Comissioner of Customs of the information referred to in section
153.31, the Secretary of the Treasury will proceed as promptly as
29
possible to determine whether or not the merchandise in question
is in fact being, or is likely to be, sold in the United States
or elsewhere at less than its fair value*
(b)
Submission of views.
During the course of an anti
dumping proceeding interested persons may make such written sub
missions as they desire*
Appropriate consideration will be given
to any new or additional information submitted.
The Secretary or
his delegate also may at any time invite any person or persons
to supply him orally with information or argument.
(c)
Time limit on investigations*
Generally, within
6 months, or in more complicated investigations, within 9 months,
after the date of the publication of an"Antidumping Proceeding
Notice" the Secretary will publish in the Federal Register a
"Withholding of Appraisement Notice" (section 153.34), a "Notice
of Tentative Negative Determination" (section 153.33), or a
"Notice of Tentative Discontinuance of Antidumping Investigation"
(section 153.15), as appropriate.
However, if the Secretary decides
that the appropriate tentative decision cannot satisfactorily be
made within the 9-month period, he will publish a notice of that
fact in the Federal Register, together with the reasons therefor.
The notice also will announce the length of additional time,
usually not more than 3 months, within which the appropriate action
will be taken
' '
ch
30
153.33
Negative determination.
(a)
Notice of Tentative Negative Determination.
If it
appears to the Secretary that on the basis of information before
not
him a determination of sales at / less than fair value may be
required, he will publish in the Federal Register a ’’Notice of
Tentative Negative Determination,” which will include a description
of the merchandise involved and a statement of the reasons upon
which the tentative determination is based.
Opportunity to present
views will be provided pursuant to section 153.37.
(b)
Final determination.
As soon as possible thereafter,
the Secretary will make a final determination and publish his deter
mination in the Federal Register.
(c)
Negative determination after issuance of a ’’Withholding
of Appraisement Notice” or a "Notice of Tentative Discontinuance of
Antidumping Investigation”. The procedure specified in paragraphs
(a) and (b) of this section will not apply if the decision to issue a
negative determination is made by the Secretary after a ’’Withholding
of Appraisement Notice” or a ’’Notice of Tentative Discontinuance of
Antidumping Investigation” has been issued and thereafter he has afforded
interested parties an opportunity to be heard pursuant to the pro
visions of section 153.37.
In lieu thereof,a final negative deter
mination will be published setting forth the statement of reasons.
153.34
(a)
Withholding of appraisement.
Three-month period.
If the Secretary determines
during the course of his investigations that there are reasonable
31
grounds to believe or suspect that any merchandise is being, or is
likely to be, sold at less than its foreign market value (or, in the
absence of such value, then its constructed value) under the Anti
dumping Act, and if there is evidence on record concerning injury
or likelihood of injury to or prevention of establishment of an
industry of the United States, he shall publish notice of these
facts in the Federal Register in a ’’Withholding of Appraisement
Notice,” indicating:
(1)
A description of the merchandise involved;
(2)
That the belief or suspicion relates only to
certain shippers or producers, if this is the case and that the
withholding of appraisement is limited to the transactions of such
shippers or producers} and
(3)
The expiration date of the notice (which shall
be no more than 3 months from the date of publication of the notice
in the Federal Register, unless a longer period of withholding of
appraisement has been requested pursuant to paragraph (b) of this
section and has been approved by the Secretary). This withholding
of appraisement notice will be issued concurrently with the
S e c r e t a r y ’s
determination pursuant to section 153,35, unless appraisement is being
withheld pursuant to paragraph (b) of this section,
(b)
Six-month period.
At any time prior to the issuance
of the"Withholding of Appraisement Notice"referred to in paragraph
(a) of this section, importers and exporters concerned may request
that the period of withholding of appraisement extend for a period
longer than 3 months, but in no case longer than 6 months.
Upon
receipt of such a request,
the Secretary will decide whether appraisement should be withheld
for a period longer than 3 months.
If the Secretary decides that
a period of withholding of appraisement longer than 3 months is
justified, he will publish ^'Withholding of Appraisement Notice"
upon the same basis and containing information of the same type as
is required by paragraph (a) of this section, except that the
expiration date of the notice may be 6 months from the date of
publication of the notice in the Federal Register.
(c)
Advice to District Directors of Customs. The
Commissioner shall advise all district directors of Customs of the
Secretary*s action.
Upon receipt of such advice each district
director of Customs shall proceed to withhold appraisement in .
accordance with the pertinent provisions of section 153.48.
153.35
Affirmative determination; General.
If it appears to the Secretary on the basis of the infor
mation before him that a determination of sales at less than fair
value is required, unless the Withholding of Appraisement Notice
was issued pursuant to section 153.34(b), he will publish in the
Federal Register his"Hetermination of Sales at Hess Than fair Value
This determination will include:
(a)
A description of the merchandise involved;
(b)
The name of each country of exportation;
(c)
The name of the exporter or exporters or
producer or producers, if the determination covers shipments by
less than all of the exporters or producers;
33
(d)
The date of the receipt of the information in
an acceptable form;
(e)
Whether the appropriate basis of comparison is
purchase price or exporterfs sales price; and
(f)
A statement of reasons upon which the determination
is based.
153.36
Affirmative determination; Appraisement withheld
pursuant to section 153.34(b).
If it appears to the Secretary on the basis of the information
before him that a determination of sales at less than fair value is
required, and if a "Withholding of Appraisement Notice" has been issued
pursuant to section 153.34(b), he will publish in the Federal Register
his determination of sales at less than fair value within 3 months
from the date of publication of such "Withholding of Appraisement
Notice."
This determination will contain information of the same type
as required in sections 153.35(a) through (f).
153.37
Opportunity to present views.
Pursuant to publication in the Federal Register of (1) a
"Withholding of Appraisement Notice"; (2) any other notice of tentative
disposition of an antidumping investigation; or (3) a notice of tentative
modification or revocation of a dumping finding, an opportunity will be
provided for the presentation of views by interested persons as set
forth below.
)
■■M PSPrr
" ‘
.
*
.
^ o
-.,03
s__y
34
(a)
Written.
Interested persons may make such
written submissions as they desire, within a period which will be
specified in the notice, with respect to the contemplated action.
Appropriate consideration will be given to any additional information
or argument submitted.
(b)
Oral.
If any interested person believes that any
information obtained by the Bureau of Customs in the course of the
antidumping proceeding is inaccurate or that for any other reason the
tentative decision or the withholding of appraisement is in error,
he may request in writing, within a period which will be specified
I•
•
in the notice, that the Secretary of the Treasury afford him an
opportunity to present his views in this regard.
All such requests
shall be accompanied by a statement outlining the issues which the
person wishes to discuss.
Upon receipt of such a request, the
Secretary will notify the person who supplied any information, the
accuracy of which is questioned and such other person or persons,
if any, as he in his discretion may deem to be appropriate.- If the
Secretary is satisfied that the circumstances so warrant, an
opportunity will be afforded by the Secretary or nis delegate for
all such persons to appear, through their counsel or in person,
accompanied by counsel if they so desire, to make known their
respective points of view in regard to those issues which the Secretary
or his delégate has determined to be appropriate for discussion.
35
With respect to a"Withholding of Appraisement Hotice "issued
pursuant to section 153.34(a), such meeting will be held within
3 weeks of the date of the publication of the notice unless for
unusual reasons it is clearly impracticable to do so.
In all
other cases, it normally will be held within 5 weeks of such
publication.
Reasonable notice of the meeting will be given.
The Secretary or his delegate may at any time invite any person
or persons to supply him orally with information or argument.
153.38
Referral to United States Tariff Commission.
Whenever the Secretary makes a determinaton of sales at
less than fair value he shall so advise the United States Tariff
Commission.
153.39
Revocation of determination of sales at less than fair
value; Determination of sales at not less than fair value.
If the Secretary is persuaded from information submitted
or arguments received that his determination of sales at less than
fair value was in error, and if the Tariff Commission has not yet
issued a determination relating to injury, he will publish a notice
of "Revocation of Determination of Sales at Less Than Fair Value;
Determination of Sales at Not Less Than Fair Value," or, if
appropriate, a notice of "Modification of Determination of Sales
at Less Than Fair Value," which notice will set forth a description
of the merchandise involved and state the reasons upon which it was
based.
He will notify the Tariff Commission of his action.
10)%36
153.40
Dumping finding.
If the Tariff Commission determines that there is, or is
likely to be, the injury contemplated by the statute, the Secretary
of the Treasury will make the finding contemplated by section 201(a)
of the Antidumping Act, 1921, as amended (19 U.S.C. 160(a)), with
respect to the involved merchandise.
153.41
Modification of revocation of finding.
(a)
Application to modify or revoke.
An application for
the modification or revocation of any finding made as provided for
in section 153.40 may be submitted in writing to the Commissioner
of Customs, together with detailed information concerning any change
in circumstances or practice which has obtained for a substantial
period of time, or other reasons, which the applicant believes will
establish that the basis for the finding no longer exists with respect
to all or any part of the merchandise covered thereby.
(b)
Modification or revocation by Secretary.
The Secretary
of the Treasury may, on his own initiative, modify or revoke a find
ing of dumping.
(c)
Notice of modification or revocation of finding.
If
it appears to the Secretary that a modification or revocation of an
existing dumping finding may be appropriate, he will publish in the
Federal Register a "Notice of Tentative Determination to Modify or Revoke
Dumping Finding," which will include a description of the merchandise
involved and a statement of the reasons upon which the tentative deter
mination is based.
Opportunity for interested persons to present views
will be provided pursuant to section 153.37.
37
(d)
Final determination. As soon as possible after
publication of a "Notice of Tentative Determination to Modify or
Revoke Dumping Finding," the Secretary will make a final determi
nation and will publish his determination in the Federal Register*
153,42
Publication of determinations and findings.
Each determination made in accordance with sections
153.33, 153,34, 153.35, and 153.36, whether such determination
is in the affirmative or in the negative, and each finding made
in accordance with section 153.40, will be published in the
Federal Register, together with a statement of the reasons
therefor.
153.43
List of current findings.
The following findings of dumping are currently in
effect:
FINDINGS OF DUMPING
Country
T.D,
Portland cement, other
than white, nonstain
ing portland cement
Sweden
Belgium
55369
55428
Portland gray cement
Portugal
55501
Portland cement, other
than white, nonstain
ing portland cement
Dominican Republic
55883
Chromic acid
Australia
56130
Steel reinforcing bars
Canada
56150
Carbon steel bars and
structural shapes
Canada
56264
Merchandise
Modified
by
Steel jacks
Canada
66-191
Cast iron soil pipe
Poland
67-252
Titanium sponge
U.S.S.R.
68-212
Pig iron
U.S.S.R.
68-261
Pig iron
Czechoslovakia
68-262
Pig iron
East Germany
68-263
Pig iron
Romania
68-264
Potassium chloride,
otherwise known
as muriate of potash
France
69-263
Potassium chloride,
.otherwise known as
muriate of potash
West Germany
69-264
Canada
Potassium chloride,
otherwise known as
muriate of potash,
except shipments by
U.S. Borax § Chemical
Co., Kalium, Saskatchewan,
Canada
Aminoacetic acid(glycine)
France
Steel bars, reinforcing
Australia
bars, and shapes manu
factured by The Broken
Hill Proprietary Co.,
Ltd., Melbourne, Australia
69-265
70-71
70-81
Whole dried eggs
Holland
70-198
Tuners (of the type used
in consumer electronic
products)
Japan
70-257
Television receiving sets, Japan
monochrome and color
71-76
Ferrite cores (of the
type used in consumer
electronic products)
Japan
71-84
Ceramic wall tile
United Kingdom
71-129
Clear plate and float
glass
Japan
71-130
Clear sheet glass
Japan
71-131
Pig iron
West Germany
71-192
Pig iron
Canada
71-193
Pig iron
Finland
71-194
Clear sheet glass
Taiwan
71-226
Tempered sheet glass
Japan
71-247
Clear sheet glass weighing France
over 28 ounces per
square foot
71-293
Clear sheet glass weighing Italy
over 16 ounces per
square foot
71-294
Clear sheet glass weighing West Germany
over 28 ounces per
square foot
71-295
Ice cream sandwich wafers
Canada
72-77
Diamond tips for phono
graph needles
United Kingdom
72-91
Fish netting of manmade
fibers
Japan
72-158
Large power transformers
France
72-160
Large power transformers
Italy
72-161
Large power transformers
Japan
72-162
40
Large power transformers
Switzerland
72-163
Large power transformers
United Kingdom
72-164
Asbestos cement pipe
Japan
72-178
Elemental sulphur
Mexico
72-179
Cadmium
Japan
72-206
Instant potato granules
Canada
72-263
Dry cleaming machinery
West Germany
72-311
Bicycle speedometers
Japan
72-322
SUBPART D - ACTION BY DISTRICT DIRECTOR OF CUSTOMS
153.48
Action by the District Director of Customs.
(a)
Appraisement withheld; Notice to importer. Upon
receipt of advice from the Commissioner of Customs pursuant to
section 153.34, the district director of Customs shall withhold
appraisement as to such merchandise entered, or withdrawn from
warehouse, for consumption, after the date of publication of the
"Withholding of Appraisement Notice," unless the Secretary*s
"Withholding of Appraisement Hotice”specifies a different effective
date.
Each district director of Customs shall notify the importer,
consignee, or agent immediately of each lot of merchandise with
respect to which appraisement is so withheld.
Such notice shall
indicate: (1) the rate of duty of the merchandise under the applicable
item of the Tariff Schedules of the United States if known; and
(2) the estimated margin of the special dumping duty that could be
assessed.
Upon advice of a finding made in accordance with section
153.40, the district director of Customs shall give immediate
41
notice thereof to the importer when any shipment subject thereto is
imported after the date of the finding and information is not on
hand for completion of appraisement of such shipment,
(b)
Request to proceed with appraisement.
If, before a
finding of dumping has been made, or before a case has been closed
without a finding of dumping, the district director of Customs is
satisfied by information.furnished by the importer or otherwise that
the purchase price or exporter*s sales price, in respect of any shipment,
is not less than foreign market value (or, in the absence of such
value, than the constructed value), he shall so advise the
Commissioner and request authorization to proceed with his appraisement
of that shipment in the usual manner.
153.49
Reimbursement of dumping duties.
(a) General.
In calculating purchase price or exporter’s
sales price as the case may be, there shall be deducted the amount
of any special dumping duties which are, or will be paid by the
manufacturer, producer, seller, or exporter, or which are, or will
be, refunded to the importer by the manufacturer, producer, seller,
or exporter, either directly or indirectly, but a warranty of
nonapplicability of dumping duties entered into before the initiation
of the investigation, will not be regarded as affecting purchase
price or exporter’s sales price if it was granted to an importer
with respect to merchandise which was:
(1)
Purchased, or agreed to be purchased, before
publication of a"Withholding of Appraisement Notice"with respect to
such merchandise, and
42
(2)
Exported before a determination of sales at less
than fair value is made.
(b)
Statement concerning reimbursement.
Before proceeding
with appraisement of any merchandise with respect to which dumping duties
are found to be due the district director of Customs shall require
the importer to file a written statement in the following form:
I hereby certify that I (have) (have not) entered into
any agreement or understanding for the payment or for
the refunding to me, by the manufacturer, producer, seller
or exporter of all or any part of the special dumping
duties assessed upon the following importations of
(commodity) from (country): (List entry numbers) which
have been purchased on or after (date of publication
of withholding in Federal Register) or purchased
before (same date) but exported on or after (date of
determination of sales at less than fair value).
A certificate will be required for all merchandise that is. unappraised
on the date that the finding of dumping is issued.
Thereafter, a
separate certificate will be required for each additional shipment.
153.50
Release of merchandise; Bond.
When the district director of Customs in accordance with
section 153.34(c) has received a notice of withheld appraisement
or when he has been advised of a finding provided for in section
153.40, and so long as such notice or finding is in effect, he
43
shall withhold release of any merchandise of a class or kind covered
by such notice or finding which is then in his custody or is there
after imported, unless an appropriate bond is filed or is on file,
as specified hereafter in section 153.51, or unless the merchandise
covered by a specified entry will be appraised without regard to the
Antidumping Act, 1921, as amended.
153.51
(a)
Type of bond required.
General.
If the merchandise is of a class or kind
covered by a notice of withheld appraisement provided for in
section 153.48(a) or by a finding provided for in section 153.40,
a single consumption entry bond covering the shipment, in addition
to any other required bond, shall be furnished by the person making
the entry or withdrawal, unless:
(1)
A bond is required under paragraph (b), or
(2)
In cases in which there is no such requirement,
the district director of Customs is satisfied that the bond under
which the entry was filed is sufficient.
The face amount of any additional bond required under this paragraph
shall be sufficient to assure payment of any special duty that may
accrue by reason of the Antidumping Act, but in no case shall be
for less than $100.
(b)
Bond on Customs Form 7591.
If the merchandise is of
a class of kind covered by a finding provided for in section 153.40
and the resale price in the United States is unknown, the bond required
by section 208 of the Antidumping Act, 1921 (19 U.S.C. 167), shall be
yi
...
i
44
on Customs Form 7591.
In such case, a separate bond shall be required
for each entry or withdrawal, said such bond shall be in addition to
any other bond required by law or regulation.
The record of sales
required under the conditions of the bond of Customs Form 7591 shall
identify the entry covering the merchandise and show the name and
address of each purchaser, each selling price, and the date of each
sale.
The face amount of such bond shall be equal to the estimated
value of the merchandise covered by the finding.
153.52
Conversion of currencies.
In determining the existence and amount of any difference
between the purchase price or exporters sales price and the
foreign market value (or, in the absence of such value, the con
structed value) for the purposes of sections 153.2 through 153.5
of these regulations, or of section 201(b) or 202(a) of the Anti
dumping Act, 1921, as amended (19 U.S.C. 160(b), 161(a)), any
necessary conversion of a foreign currency into its equivalent
in United States currency shall be made in accordance with the
provisions of section 522, Tariff Act of 1930, as amended (31
U.S.C. 372) and section 16.4 of this chapter; (a) as of the
date of purchase or agreement to purchase, if the purchase price
is an element of the comparison; or (b) as of the date of
exportation, if the exporter*s sales price is an element of the
comparison.
45
153.53 Dumping duty.
(a)
Rule for assessment. A special dumping duty shall
be assessed on all importations of merchandise, whether dutiable
or free, as to which the Secretary of the Treasury has made
public a finding of dumping, entered or withdrawn from warehouse,
for consumption, not more than 120 days before the question of
dumping was raised by or presented to the Secretary or his delegate,
provided the particular importation has not been appraised prior
to the publication of such finding, and the district director of
Customs has determined that the purchase price or exporter's sales
price is less than the foreign market value or constructed value,
as the case may be.
(b)
Entered value not controlling. The fact that the
importer has added, on entry, the difference beti^een the purchase
price or the exporter's sales price and the foreign market value
or constructed value and the district director of Customs has
approved the resulting entered value shall not prevent the
assessment of the special dumping duty.
153.54
Notice to importer.
Before the special dumping duty is assessed, the district
director of Customs shall notify the importer, his consignee, or
agent of the appraisement of the merchandise, as in the case of an
advance in value.
153.55
Dumping duty; Samples.
If. the necessary conditions are present, the special
dumping duty shall be assessed on samples imparted for the purpose
of taking orders and making sales in this country.
153*56
Method of computing dumping duty.
If it appears that the merchandise has been purchased
by a person not the exporter within the meaning of section 207,
Antidumping Act, 1921 (19 U*S*C* 166), where purchase price is
less than foreign market value, the special dumping duty shall
equal the difference between the purchase price and the foreign
market value on the date of purchase, or agreement to purchase,
or, if there is no foreign market value, between the purchase price
and the constructed value, any foreign currency involved being
converted into United States money as of the date of purchase or
agreement to purchase.
If it appears that the merchandise is
imported by a person who is the exporter within the meaning of such
section 207, where the exporter’s sales price is less than foreign
market value,
the special dumping duty shall equal the difference
between the exporter's sales price and the foreign market value on
the date of exportation, or, if there is no foreign market value,
between the exporter's sales price and the constructed value, any
foreign currency involved being converted into United States
money as of the date of exportation.
SUBPART E - ANTIDUMPING PROTESTS
153.64
Antidumping protests procedures.
Protests relating to the Antidumping Act, 1921, shall be
made in the same manner as protests relating to ordinary Customs
duties.
of
Department theTREASURY
OFFICE OF REVENUE SHARING
WASHINGTON. DC.20220
December 8, 1972
MEMORANDUM FOR THE PRESS
REVENUE SHARING STATISTICS
The attached papers include:
-- Tabulation of first allocation to 100 largest
cities.
-- Tabulations of initial revenue sharing payments
to state governments, local governments, and
total amounts paid.
-- Copy of a letter from the Director of Revenue
Sharing to heads of local governments.
-- Tabulations showing the early "Blue Book"
Conference figures and the present
allocations, plus percentage changes
between the two.
Attachments
OFFICE OF REVENUE
SHARING
REVENUE SHARING 100 LARGEST CITIES
Cities
Actual
Amount
of Checks*
First Allocation
(Jan.-June 1972)
Actual
Amounts
Per Capita
Amounts
New York, N.Y.
$100,847,538
$12.90
$101,866,199
Chicago,111.
31,185,549
31,500,554
9.35
Los Angeles,Cal.
15,940,670
5.67
15,781,264
Philadelphia,Pa.
21,981,080
22,203,111
11.39
12.21
Detroit,Mich.
18,487,136
18,302,265
7,433,362
Houston, Tex.
6.09
7,507,971
Baltimore ,Md.
11,951,482
11,831,968
13.19
Dallas,Tex.
6.93
5,795,317
5,853,855
11,834,502
11,954,041
Washington,D.C.
15 .80
Cleveland,Ohio
9.70
7,214,134
7,287,004
7.42
Indianapolis,Ind.
5,482,887
5,538,269
5,539,902
Milwaukee ,Wis.
7.80
5,595,860
San Francisco,Cal.
12.47
8,833,517
8,922,744
San Diego,Cal.
3,132,436
3,164,076
4.54
4,242,612
San Antonio, Tex.
6.55
4,285,466
Boston,Mass.
14.03
8,904,129
8,994,069
5,993,422
9.51
Honolulu,Hawaii
5,933,488
7.15
Memphis, T e n n .
4,411,281
4,455,839
6,251,132
10.15
St. Louis,Mo.
6,314,275
14.38
New Orleans,La.
8,448,471
8,533,809
Phoenix,Ariz.
3,785,490
6.57
3,823,727
6.11
Columbus,Ohio
3,267,245
3,300,247
7.90
Seattle,Wash.
4,193,993
4,152,054
Jacksonville,Fla.
7.67
4,055,338
4,014,785
Pittsburgh,Pa.
11.39
5,862,953
5,922,174
11.61
5,974,922
Denver,C o l o .
5,915,173
9.23
Kansas City,Mo.
4,603,544
4,650,043
6.18
Atlanta,Ga.
3,042,473
3,073,204
7.31
3,382,554
Buffalo,N.Y.
3,348,729
4,132,782
9.25
Cincinnati,Ohio
4,174,527
4.72
2,084,882
San Jose,Cal.
2,105,941
6.49
Minneapolis,Minn.
2,792,508
2,820,715
8.38
Nashville-Davidson , 3,534,501
3,570,203
Tenn.
^Amount of check is less than "allocation" because of reserve for
possible errors.
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
16.
17.
18.
19.
20.
21.
22.
23.
24.
25.
26.
27.
28.
29.
30.
31.
32.
33.
-
Cities
34.
35.
36.
37.
38.
39.
40.
41.
42.
43.
44.
45.
46.
47.
48.
49.
50.
51.
52.
53.
54.
55.
56.
57.
58.
59.
60.
61o
62.
63.
64.
65.
66.
67.
68.
69.
70 o
71.
Actual
Amount
of Checks
Fort Worth,Tex.
$2,277,266
Toledo,0hio
2,293,844
Portland,Oregon
4,169,841
Newark,N.J.
4,246,878
Oklahoma City,0kla .. 2,731,487
Louisville,Ky.
4,674,030
Oakland,Cal.
2,304,155
Long Beach,Cal.
1,517,152
Omaha,Nebr.
2,036,844
Miami,Fla.
3,289,574
Tulsa, Okla.
2,129,832
El Paso,Tex.
2,711,743
St. Paul,Minn.
2,122,552
Norfolk,Va.
3,368,770
Birmingham, A la.
2,486,792
Rochester,N.Y.
1,145,117
Tampa,Fla.
2,618,590
Wichita,Kan.
1,298,873
Akron,Ohio
1,758,408
Baton Rouge,La.
3,344,955
Tucson,Ariz.
2,196,405
Jersey City,N.J.
2,308,548
Sacramento,Cal.
1,634,562
A u s tin,Tex.
1,435,048
Richmond,Va.
2,728,602
Albuquerque,N.Mex.
2,987,831
Dayton,Ohio
2,100,342
Charlotte,N.C.
2,036,693
St.Petersburg,Fla.
1,442,116
Corpus Christi,Tex . 1,576,903
Yonkers,NeY.
871,670
Des Moines,Iowa
1,112,007
Grand Rapids,Mich.
1,536,001
Syracuse,N.Y.
685,245
Flint,Mich.
1,748,127
Mobile, A l a 0
2,223,062
Shreveport,La.
1,870,163
Warren,Mich.
1,088,691
2-
First Allocation
(Jan.-June 1972)
Actual
Amounts
$2,300,268
2,317,014
4,211,959
4,289,775
2,759,076
4,721,242
2,327,429
1,532,476
2,057,418
3,322,802
2,151,344
2,739,134
2,143,991
3,402,798
2,511,911
1,156,683
2,645,040
1,311,992
1,776,169
3,378,742
2,218,590
2,331,866
1,651,072
1,449,543
2,756,163
3,018,011
2,121,557
2,057,265
1,456,682
1,592,831
880,474
1,123,300
1,551,516
692,166
1,765,784
2,245,517
1,889,053
1,099,687
Per Capita
Amounts
$5.35
6.05
11.04
11.23
7.49
13.05
6.44
4.27
5.81
9.92
6.48
8.50
6.92
11.05
8.35
3-90
9.52
4.74
6.45
12.43
8.44
8.96
6.42
5.76
11.05
12.38
8.73
8.53
6.74
7.79
4.31
5.58
7.85
3.51
9.13
11.82
10.36
6.13
Jity
Actual
Amount
of Checks
$2,180,442
[I Providence,R. I .
1,089,938
3. Fort Wayne,Ind,
2,081,363
'tt. Worcester,Mass.
9 Salt Lake City,Utah 1,796,588
1,566,433
?6. Ga r y ,Indiana
1,755,005
I Knoxville,Tenn.
1,882,720
Virginia
Beach,Va.
78.
899,799
79. Madison,Wisc.
1,171,238
80. Spokane,Wash.
1,139,113
81. Kansas City,Kan.
1,440,706
82. Columbus,Ga.
•583,416
Anaheim,Cal.
83.
1,386,104
184. Fresno,Cal.
1,482,094
85. Springfield,Mass.
1,676,227
86. Hartford,Conn.
1,660,580
87. Bridgeport,Conn.
745,345
88. Santa Ana,Cal.
1,688,493
89. Tacoma ,Wash.
1,794,388
90. Jackson,Miss.
846,927
91. Lincoln,Nehr.
953,111
92. Lubbock,Tex.
900,163
93. Rockford,111.
1,226,381
94. Paterson, N . J .
1,541,919
95. Greensboro,N.C .
596,711
96. Riverside,C a l .
1,109,316
97. Youngstown,Ohio
708,623
98. Fort Lauderdale,Fla.
842,015
99. Huntsville ,Ala.
ioo. Evansville,Indiana
1,091,887
First Allocation
(Jan.-June 1972)
Actual
Amounts
$2,202,466
1,100,947
2,102,386
1,814,735
1,582,255
1,772,732
1,901,737
908,887
1,183,068
1,150,619
1,455,258
589,309
1,400,105
1,497,064
1,693,158
1,677,353
752,873
1,705,548
1,812,513
855,481
962,736
909,255
1,238,768
1,557,493
602,738
1,120,521
715,780
850,520
1,102,916
Per Capita
Amounts
$12.30
6.18
11.91
10.32
9.02
10.15
11.05
5.29
6.94
6.84
8.74
3.54
8.44
9.13
10.72
10.72
4.83
11.05
11.77
5.72
6.46
6.17
8.55
10.81
4.30
8.02
5.13
6.11
7.95
INITIAL REVENUE SHARING PAYMENTS
Ala,
Alaska
Ar i z .
Ark.
Calif.
Colo.
Conn.
Del.
D.C.
Fla.
Ga.
Hawaii
Idaho
111.
Ind.
Iowa
Kan.
Ky.
La.
Me.
Md.
Mass.
Mich. .
Minn.
Miss.
Mo.
Mont.
Nebr.
Nev.
N.H.
N. J.
N.M.
N.Y.
N. Car.
N. Dak.
Ohio
Dkla.
Ore.
Pa.
R.I.
S. Car.
S. Dak.
Tenn.
Texas
Utah
Amt. Paid
to State
Government
Amt. Paid
to Local
Governments
Total
Amount
Paid
$14,946,087
1,093,303
8,287,130
9,710,377
92,443,559
8,995,692
11,091,526
3,147,459
$29,851,298
1,880,218
15,639,262
17,242,515
184,712,996
17,944,197
22,179,987
4,791,930
11,834,502
48,395,859
36,140,362
7,821,571
6,963,658
89,970,805
37,393,646
24,895,557
17,141,396
25,818,544
40,213,387
10,164,495
35,334,416
54,474,105
73,862,622
34,835,716
29,012,902
32,227,223
6,465,610
12,742,336
3,768,024
5,430,368
54,984,447
9,837,989
194,104,226
44,787,299
7,046,872
70,373,249
19,378,933
17,447,383
91,359,636
7,973,337
23,504,044
7,668,617
32,605,795
81,722,653
9,992,880
$44,797,385
2,973,521
23,926,392
26,952,892
277,156,555
26,939,889
33,271,513
7,939,389
11,834,502
72,602,547
54,232,701
11,732,357
10,475,721
135,182,213
56,169,124
37,353,343
25,795,167
43,005,687
60,623,408
15,287,049
53,006,184
81,717,740
110,895,777
52,396,328
43,759,667
48,444,153
9,847,520
19,155,953
5,667,994
8,167,735
82,480,765
15,518,891
291,281,351
67,229,428
10,706,060
105,673,646
29,102,495
26,195,165
137,222,167
11,959,996
35,669,385
11,650,073
48,916,516
122,680,956
15,040,553
24,206,688
18,092,339
3,910,786
3,512,063
45,211,408
18,775,478
12,457,786
8,653,771
17,187,143
20,410,021
5,122,554
17,671,768
27,243,635
37,033,155
17,560,612
14,746,765
16,216,930
3,381,910
6,413,617
1,899,970
2,737,367
27,496,318
5,680,902
97,177,125
22,442,129
3,659,188
35,300,397
9,723,562
8,747,782
45,862,531
3,986,659
12,165,341
3,981,456
16,310,721
40,958,303
5,047,673
(OVER)
2
vt.
Va.
Wash.
W. Va.
Wise.
Wyo.
Amt. Paid
to State
Government
Amt. Paid
to Local
Governments
Total
Amount
Paid
$ 2,428,891
17,546,071
12,864,706
11,503,557
21,987,547
1,644,864
$ 4,759,333
35,082,556
25,583,591
14,186,000
43,748,807
3,235,396
$ 7,188,224
52,628,627
38,448,297
25,689,557
65,736,354
4,880,260
U.S. Treasury Department
Office of Revenue Sharing
/•
3
d
OFFICE OF THE SECRETARY OF THE TREASURY
W A S H IN G T O N . D .C . 20220
Gentlemen:
Pursuant to the State and Local Fiscal Assistance Act of 1972,
we are pleased to enclose initial checks for the January 1, 1972,
through June 30, 1972, entitlement period.
Before depositing this check or expending any part of the proceeds,
you should carefully review the Act and the interim regulations which
have previously been sent to all recipient governments.
Generally, there are very few ’’strings" attached to the expenditure
of revenue sharing funds. State governments may expend their revenue
sharing payments for any lawful purpose. Units of local governments
have discretion to expend their revenue sharing payments on broad cate
gories of priority expenditures described in the Act and on any lawful
ordinary and necessary capital expenditure. However, neither a State
nor a unit of local government may use any portion of its revenue sharing
payments to match funds for any federal program, nor use any portion in
an activity or program which discriminates on the basis of race, color,
national origin or sex.
All recipient governments are required to publish reports of how
their revenue sharing funds were used. Existing regulations require
that such reports be published on or before March 1, 1974, for the use
of the enclosed entitlement check. Simplified reporting forms are being
developed by the Office of Revenue Sharing for the "end use" report
required.
If you question whether your government is eligible for participa
tion in the initial entitlement payment, please return the enclosed
check and communicate with my office. For example, a special district
government, such as a school district or a sanitary district, is not
eligible to receive revenue sharing funds. If your unit of government
was dissolved or absorbed, please return the enclosed check with details
of your government’s dissolution. Each recipient of a revenue sharing
check accepts that entitlement payment as a fiduciary for his government.
2
It is anticipated that revenue sharing payments for the second
entitlement period running from July £ 1972, through December 31,
1972, will be made soon after the beginning of 1973.
The Act requires that recipient governments give certain assurances
to the Secretary of the Treasury in order to qualify for revenue sharing
payments related to later entitlements. You will be notified of any
such reports required, and appropriate forms will be supplied to you, in
adequate time to assure your continued participation.
While we have expended every effort to verify the data upon which
this initial payment has been based, we recognize that there may be
errors. Therefore, the books for this entitlement period will be kept
open until we have determined that all of the data used is up-to-date
and correct. As a consequence, the enclosed payment will be subject to
adjustment in subsequent entitlement periods. We feel that in most cases
such adjustments will be minimal. However, some adjustments may be in
significant amounts, especially to units of government in those county
areas where there have been recent governmental reorganizations or new
incorporations, or where there is an appreciable Indian population. We
hope to correct these and any other data difficulties in the near future.
Revenue sharing is a new and exciting experiment, returning funds
to local communities to be spent for local priority purposes and under
local control. Its success will depend upon how wisely and effectively
the recipient governments administer their programs.
Sincerely yours,
Edward A. Fox
Director
Office of Revenue Sharing
BLUE BOOK
CONFERENCE
FIGURES
ALABAMA
ALASKA
ARIZONA
ARKANSAS
CALIF OR NX A
COLORADO
CONNECT ICUT
d e l At:a nr.
*1
M' «
r
O
«
Ft o n e A
GEORGIA
HAWAII
Idaho
ILLINOIS
INDIANA
IC1 A
KANSAS
KENTUCKY
LOUISIANA
MAINE
MA RY L ANO
MASSACHUSETTS
MICHIGAN
MINNESOTA
MISS IS STEP t
MISSOURI
MONT ANA
NEBRASKA
NEV AD 1
NEW HANFSHTRE
NEW JERSEY
NEW MEXICO
NEW YORK
NORTH 1 ARCS IN A
NORTH CAKOTA
CHIC
OKLAHOMA
OREO CM
PENNSYLVANIA
T
,\ii u o
g
j
C *
* jg$ ry
* Oi L - r 4 *- * i )
SOUTH CAROLINA
S C UTH 1Ta~K OTA
TENNESSEE
TEXAS'
UTAH
VERMONT
VIRGINIA
WASHINGTON
WEST VIRGINIA
WISCONSIN
wyohtnc
116146045.
631183t.
501 81*47 7
55007449.
556099744.
5 46 2 43 72.
66374658.
15791060.
23647504.
1459 G71Ï6.
100032412.
23331023.
39855397.
274744572.
304311662.
7702754F.
52346418.
87331250.
113619337
31133570.
106937253.
162981602.
221895756.
103894T30.
30707611
2875552
20586195.
42873756.
31132655.
1523 6003.
16 3-605396.
33244446
591438960.
135502564
13737563.
207023672.
59412460.
5622 b216*
2 7397 74 84
2 3 57 357 3.
cl 516231
25109297.
934C243F.
244527456.
313884^3.
34845465.
105248354.
94 065 OF 9.52295085.
133921024.
9698200.
.
.
.
Ü .
.
.
.
i
% CHANGE
VS.
BLUE BOOK
PRESENT
ALLOCATION
90582342.
F c0 8 5 7 3.
50225033.
5 4 54 113 6 •
560264003.
54539344.
F 7221 368.
16066G50.
23909033.
14 6 70 71 _3.
109500545.
23701732.
s.1 ¿fîSziii .
274008532.
313790775.
75501734.
52447037.
! 869772 4 4.
122532033.
31045776.
107101623.
165112340.
224443361.
106 427114 8.
89449399.
98207990.
20495663.
389711403.
11 514 366.
363301ÖT.
166544348.
32374379.
539952262.
136912393.
22176897.
213942793.
53930 G 78.
53916361.
277954725.
24161563«
.
24 32T1TKT.
98852354.
247940653.
30580S72.
14707527.
106339828.
. 7 7 967 9f5 .
51 95 0 2 S3.
133257859.
996 8 857 .
1
-2 2.0
4.7
.1
-.8
•7
-« 2
3 .6
1 .7
1 .1
•5
•3
#jf|
7.2
— •3
9.3
-2.0
— •8
- .4
1 .9
— .3
.1
1.3
1 .1
714
-2.5
— .6
- .4
-9.3
3.4
9.0
1.9
-.8
- .4
.4
22.4
- 3.3
- •8
-5.7
3 .5
2 •J
-11.5
-3.°
•wr*
1 .4
~ 2 •G
-.9
1.0
’-7.3
- .7
-.5
1 2.8
1
THE DEPARTMENT OF THE TREASURY
%
y
(/
■y
2
5
REMARKS OF
4
HONORABLE EDWIN S. COHENj
5
- UNDER SECRETARY OF' THE TREASURY,
6
BEFORE
7
TAX FORUM,
8
UNITED STATES CHAMBER OF COMMERCE
9
10
11
12
13
14
15
16
W e dn esday,
17
Novem ber 29,
W a s h in g t o n ,
18
D.
1972
C.
19
20
21
22
23
24
25
[ T h is
t r a n s c r ip t w as p re p a re d
fro m
a ta p e
r e c o r d in g .]
2
and p a r t ic ip a t e
4
in
th is
p ro gram .
I m u s t e m p h a s iz e ,
a s W a lt e r
5
t io n ,
6
w ill be
7
a tte m p t to
8
on th o se
9
a s he in d ic a t e d
he w ill
10
C o n gre ss
im p o r t a n t t a x
11
n o t a tte m p t to
12
w ill be
t h a t w h ile
I
w iil d is c u s s
o f m a jo r s ig n if ic a n c e
p r e d ic t w h at th e
is s u e s
on
th e
and
15
I
It
15
c o n t e m p la t in g
16
I
17
1969
it
th a t
on th e
ta x
w as o f th e
th e
in
w h ic h
I
c o in e d
20
p u b lic ly ,
t im e
but I
21
and U nder S e c re ta ry
22
p re ss.
23
th a t
24
re co rd
25
ask e d
it
H ou se
in
Act of
I
r e v ie w
of
dubbed
at
th e
W a lk e r i f
he
not
b e cau se
co u rse
it
I
as ye ars
1969,
th e
th e
had
Tax
to
s h o u ld
d e c is io n s
th e
R e fo rm
liv e d
and
to
c o m m it t e e
so m e b o d y
th o u gh t
th e
ask e d
Act of
th e
to
b ill
as-
th e
day
do it
C h a ir m a n M i l l s
re p o rte d
th e
th e
o u t th e
a c o n fe re n c e
fro m
th a t
c o n c lu s io n
ru e
n o t in te n d e d
w it h
go by,
and h e re we a re
"la w y e r s
T r e a s u r y w hen we h ad
and
t h in k
w ill be
C h a r ls W a lk e r a f t e r we h a d b r ie f e d
and on cam e ra ,
D r.
of
re m e m b e r a t
a c o n v e r s a t io n
T h a t m o r n in g w h en th e
a fte rn o o n
w ill
ta k e ,
P r e s i d e n t 's
ago,
1973.
th a t p h ra se .
had done
I
I
p r e s e n t r e c o m m e n d a t io n s
18 c o u n t a n t s r e l i e f a c t o f 1 9 6 9 , " a n d I h a v e
19
th a t
p o s it io n
C o n gre ss w ill
is s u e s ,
R e fo rm
in
I
in t r o d u c
so .
Tax
in a d v e r t e n t ly
h is
is s u e s
a d m i n i s t r a t i o n 's
a sh o rt
re fo rm
th e
in
c o m in g y e a r ,
p r e d ic t w h at th e
se e m s o n ly
we w e re w o r k in g
th e
a tte m p t to
s h a ll n o t do
14
t h in k
to
so m e o f
in
o r w h at a c t io n
try
sta te d
b ill,
on th e
a u d ie n c e ,
w a s so m e w h a t c o m p lic a t e d
3
1
for the average person to understand, he turned to me and, on
I
2
camera and on the record, he asked me,
5
called the bill this morning?", and I had to tell him.
"Ed, what was that you
4
[Laughter.]
5
So that name~stuck with the bill.
It may be that the
6
lawyers and accountants are in need of further relief in 1973,
7
as I dubbed it, there is still something to complete the
f
8
regulations under the '69 act.
9
we have had 179 regulations projects under the '69 act, and I
10
see in the back of the room the Chief Counsel of the Internal
11
Revenue Service, Martin Worthy, who worked so long and hard
12
and tough on the regulations and the 179 projects.
13
have published all but one of the significant and important
14
regulations in proposed form, and my recollection is that the
15
last report I had was that we were down to about 50 of those
16
170-odd regulations that had been published in proposed form
17
that were in final form.
18
the last count, and we are pressing ahead to complete those
19
before we have another round of tax revisions.
I
20
We have made great progress,
We now
We had something uner 30 to go by
I remember in the late fifties when the Internal
21
Revenue Code of '54 had just been passed, and the American Law
22
Institute had a project to consider further tax revision, and
23
I was engaged with many others on that project, I was glad to
24
find Professor William L. Carey, of Columbia University, who
25
was, as you may recall, the Chairman of the SEC in the Kennedy
"
3
MV
4
administration, bring out an article which was entitled
"Effects Upon the American Law Institute Progress Progress by
the Internal Revenue C o d e :
Reappraisal."
A Plea for a Moratorium And
His theme was that we had not yet at that time
suggested by 1960 what“ the 1954 changes were, and that we
should be caution of making major changes in the tax law so
frequently.
And he said this is a word of caution that we
should bear in mind, but at the same time obviously we ought
to try constantly to improve the equity and the mechanics of
t
the tax structure, and I am sure the Congress and the adminis
tration will cooperate in that effort in the next year or
two.
I was not long ago in the Reform Club in London, and
I asked them, in this old building, how the club seemed to be
named'the Reform Club, because I was told that they were to
celebrate their 200th anniversary in October of this year, the
month just past.
founded in
And I was told that the organization was
1772 to accomplish reform, and that they had
succeeded in the reform act of 1832, and I think they have been
satisfied with that accomplishment ever since.
[Laughter.]
I hope that while we should be careful in the pace
with which we contemplate changing the l a w s , that we are not
satisfied with the progress we have made in any particular
statute, and particularly not the '69 act, but that we can go
5
1
forward with new and significant improvements.
2
Now, X can't hope to cover with you all of the issues
5
or all of the important issues in the brief time today, but I
4
thought that I would mention a few and indicate what I think
5
are likely to be. major areas of concern, those that I think
6
will involve major revenue changes, have a major revenue impact
7
upon business and individuals, and that may affect the struc
8
ture of.the law.
9
Now, of the money raising items, revenue items, I
10
guess one would include in particular such items as the taxa
11
tion of capital gains and the depreciation and investment
12
credit items.
In round terms, the investment credit and the depre
13
14
ciation provisions that were enacted in 1971, because the
15
investment credit was in effect from 1962 to 1969 and then
16
restored as the job development investment credit in 1971.
17
This was
18
it is fully effective.
19
$800 million on the individual, but in the corporate area, in
20
the neighborhood of $2.7 billion after it has become fully
21
operative.
22
with respect to corporations, some $2.7 billion when
It also has an effect of some I think
And the ADR has convinced all that the first year
23
effect of 1971
w&s some $600 million.
For this current year
24
we estimated it about $1.4 billion corporations, and it will
25
gradually peak in 1976 at about $3.2 billion, and then slowly
6
1
reduce after that.
2
revenue and I am sure that the Congress will review these
5
provisions since they are important to the structure, but our
4
Treasury estimates show —
5
ant factor —
6
of business equipment higher than that of any other major
7
industrialized nation in the western world before we made
8
those changes in 1971.
9
Now, these are substantial amounts of
and I think this is a most import
that our income tax laws make the capital costs
Even after those changes, the capital cost of busi~
10
ness equipment in the United States, under the present law,
11
with the accelerated depreciation, with our ADR and our in
12
vestment credit, is still higher than that of any other major
13
industrialized nation in the western world, except France and
14
the Netherlands.
I put in a word of caution with respect to
15
Canada because I am not at the moment sure what the Canadian
16
rule is, since they introduced legislation that will make
17
their business capital costs lower than ours, but legislation,
18
it is my guess, has been enacted, and I am not sure exactly
19
what the status of their depreciation is.
20
But aside from Canada, we are still in the present
21
situation in a position in which, after all of these provisions,
22
the capital cost of business equipment is higher in the United
23
States than that of any other industrialized countries except
24
France and the Netherlands, and possibly Canada.
25
Now, as you know, there has been a substantial
7
1
increase in expenditures on plant and equipment following the
2
enactment of these new provisions.
5
the changes between those two y e a r s ' expenditures on plant and
4
equipment increased by only 2 percent; in the period from '71
5
to '72, the figures indicate an increase' of almost 10 p e r c e n t ,
6
and there are indications that this will continue next year.
In
7
8
d o e s n o t se e m
9
th e
10
upon
11
th e
to
lig h t
be
th e
of
t h is
t im e
e c o n o m ic
in
in v e s t m e n t c r e d it p r o v is io n s
in
Decem ber a ft e r
In the years
w h ic h
to
a s w e re
'70 and '71,
im p r o v e m e n t ,
change
so
th e
th is
APR and
r e c e n t ly
agre e d
s o m uch d e lib e r a t io n .
Now, another provision that I mention that is, of
12
course, of major importance is the treatment of capital gains.
15
Now, when you talk about major revenue raising proposals, the
1,4
proposals that have been voiced in some quarters is to
15
eliminate the special treatment of capital gains and tax on
16
the ordinarily income, raised according to the projections
17
very substantial amounts of money, in the range of, say, $6
18
to $8 billion, depending upon your estimates of the projected
19
realization of capital gains.
20
At the 1971 levels of capital gains, we estimated
21
that this would be in the range of $5.6 billion.
22
hard to predict~the level of capital gains from year to year,
23
and we are still not sure what it was in 1971 so we should
24
have the data off the computers soon.
25
It is very
The level of capital gains has varied quite
substantially in the years —
in the early sixties, it was at
a level of around $12 to $15 billion; it rose steadily until
in 1968, if I recall the figure, capital gains had;reached an
aggregate of $34 billion; it dropped in 1970 as low as $19
billion, and that was-due"to the drop in the stock market at
that time; and we think it will probably come back at present
to a range of $30 billion.
But some of the revenue estimates that we have seen
of the additional tax that would be derived from removing
special provisions relating to capital gains are based on
assumptions that the capital gains will amount to a level of
some $42 to $45 billion.
Now, whether that will occur or not
particularly if you had more rigorous treatment of capital
gains in the tax structure and possibly a diminution of the
rate of realization of capital g a ins7 no one can predict.
Now, in considering the importance of capital gains
I think you have to take into account the fact that they are
the biggest item, at least in the individual tax area,
individual taxpayer situation, of any of the so-called
preferences in the upper income br a c k e t s .
On July 21 of this year, I presented to the Joint
Economic Committee an estimate of the amount of revenue
that
is foregone because of 45 specific tax preferences, tax
expenditures, tax subsidies or —
them, perhaps —
as some people would call
loopholes in the federal income tax law. The
9
1
2
45 were selected by the staff of the Joint Economic Committee.
For the first time, in that testimony, we were
5
asked by the committee to provide and furnish the estimates
4
of these tax preferences by income classes, and we used nine
5
different income classes,“ the highest one being the income
6
class above $100,000.
7
45 so-called tax preferences —
8
these, but you do add them —
9
order of magnitude of about $42 billion, of which about $5.9
10
billion is in the income group above $100,000.
11
Of the total revenue foregone by these
so it is difficult to add
in the aggregate they show an
When you look at the $5.9 billion total revenue fore
12
gone in the over $100,000 category, more than half of it is
13
due to the untaxed half of capital gains.
14
capital gains, it should be treated as ordinary inc o m e , and
15
if you count the fact that one-half o f “it is excluded from
16
income, the tax foregone because of the exclusion of that tax
17
represents about $3 billion out of the total preferences of
18
some $5.9 billion in the over $100,000 category.
19
dicates the importance of the treatment of capital gains in
20
the income tax system in determining what would be an equitable
21
treatment.
22
If you take a '
—
:
So that in
Now,~of the r e s t of the $5.9 billion, about $1 billion
23
is related to the deductability of state and local taxes, which
24
I think most people would not consider a preference; about $1
25
billion represented the deductability of charitable
10
1
contributions, which has its own public benefit; about $360
2
million represented the effects of tax-exempt bond entry; and
o
the remainder was scattered among a number of preferences
4
that produced larger results in the lower income brackets.
5
Now, the problem of the treatment of capital gains
6
has been with us a long time.
7
to the over $100,000 group or however you would judge the
8
upper income gr o u p s .
It is not confined, of course,
I was interesting in finding, in looking through the
9
10
statistics of income for 1960 through 1970, that in all those
11
years 50 percent of the capital gains in the country are
12
realized by persons with adjusted gross incomes of less than
13
$50,000, and that is a rather surprising conclusion, a
14.
surprising fact.
In 1970, when capital gains were down somewhat, 50
15
16
percent of the total capital gains were realized by persons
17
with adjusted gross incomes under $30,000.
18
more important that it is an issue of equity with respect to
19
the upper income groups.
Nonetheless, it is
Now, when you get around to considering the treat
20
21
ment of capital gains and losses, there are a number of points
22
that one has to take into account.
23
position in the world financial markets.
24
few industrialized nations that tax
25
income.
One is our competitive
We are among the
capital gains as ordinary
Most countries don't tax capital gains.
The United
55
v
11
1
Kingdom some seven years ago began to tax capital gains, but
2
they do so at a maximum rate of 30 percent, well below their
. 5
rates in the upper income bracket.
Canada last year went to
4
the taxation of capital gains but, as we do, decided to in
5
clude as income one-half of capital gains.
6
countries don't tax capital gains at all.
7
Most other
Another factor is that in the neighborhood of half
8
of our capital gains are derived from investments in corporate
9
stocks.
10
the corporate level and again on dividends, and on capital
11
gains on the sale of the stock.
12
We impose a double tax on corporate profits, once at
Canada, the United Kingdom, France and Germany
15
either have or are in the process of installing a system of
14
partial integration of the corporate and the ¿dividual tax.
15
So our double tax on corporate profits-has to be borne in
16
mind in weighing the tax burden on capital gains.
17
Of course, with respect to real estate, the heavy
18
property taxes, which is a source of such great concern, must
19
also be weighed in the balance.
20
One important factor to be borne in mind is that
21
these revenue estimates that have been made about the revenue
22
to be gained by taxing capital gains as ordinary income, assume
23
that we wouldn't change the provision that limits capital
24
losses deductions to $1,000 a year for individuals.
25
are going to tax capital gains as ordinary income, you have got
If you
^ ° )
1
12
to give consideration to a principle of fairness, which might
2
require you to allow capital losses as ordinary deductions,
, 5
because otherwise you would be taxing capital gains in full
4
but giving practically no allowance for capital losses except
5
against capital gains'.-' “
6
Now, this $1,000 limitation on deductions for losses
7
was .introduced many years ago during the depression because of
8
revenue considerations.
9
further deductions of capital losses as a counterpart of taxing
10
capital gains more heavily, the revenue loss stemming from
11
riberalized loss deductions would be quite considerable, since
12
individuals then would realize their losses and realize their
15
capital gains .
If in fairness we were able to permit
4V
;,
•*
9*tb
14
Now, a final point, whenever capital gains treat
15
ment is reviewed, consideration is given to having a system
16
of reducing rates depending upon the length of the holding
17
period.
18
remember back that far —
19
five different percentages of capital gains taken into income
20
gearing with the holding period up to ten years.
21
was abandoned in 1938 because it was complex and because it
22
tended to inhibit the mobility of the capital markets and
23
since the individuals tended to hold onto their investments
24
for longer periods to secure the advantages of the progressive
25
reductions in tax.
When I came to the bar in 1936 —
and it is hard to
we had such a system in effect, with
The system
13
jj-i
Now, nonetheless this or some modification of that
is a possibility to be considered as the Congress takes up the
issue of capital gains treatment next year.
Now, another topic which I am sure will be discussed
at considerable length" and was throughout 1969 consideration
and has been since., is the review of the minimum tax.
Various
proposals have been offered, particularly in the past year,
which would tend to achieve a quick increase in revenue by
changing the minimum tax in a variety of w a y s .
The tax became effective in 1970 and we do have
figures for that year showing that about 76,000 individuals
filed minimum tax returns since they were required to file
them if they had preferences in excess of $15,000 so they
were entitled to $30,000 exemption.
7w
-
*'*
~
On the returns that showed minimum tax payable,
which was about 19,000 p e r s o n s , it is interesting to see what
the preferences were.
In the aggregate, for those 19,000 in
dividuals, it came to about $4.5 billion of preference.
But
of that total of $4.5 billion, about 80 percent, more than
almost $3.7 billion, represented the excluded half of long
term capital gains.
Of the remaining 20 percent, accelerated
depreciation or amortization on real estate represented about
a quarter of a million dollars, depletion about $210 million,
excess investment interest in the neighborhood of $200
million, stock options about $130 million, and the rest under
1
yy y
$30 million.
2
14
But the biggest item by far, at least in the present
5
minimum tax, that swamps every other item, and it is the ex
4
cluded half of capital gains as far as individuals are con
5
cerned.
6
to realize that in the main it is a function of the system of
7
taxing capital gains.
8
raised the tax on capital gains from a maximum of 35 percent
9
to 36.5 percent; but it does have some startling effects in
10
some cases, and we ran a computer on an interesting case where
11
a man had a $12 million capital gain and a $6 million business
m
loss, and since he took into account only one-half of his
13
capital gains of $6 million and that was offset by a $6 million
14
business loss, he had no regular income tax to pay, but he
15
paid a minimum tax of 10 percent of his excluded $6 million,
16
half of his capital gains, so he paid a minimum tax of $600,000
17
on account of the minimum tax.
18
When you consider the minimum tax revision, you have
By and large, the minimum tax had
The minimum tax has a bite in some c a s e s , and cer
19
tainly in that one.
20
tax on corporations for 1970, the first year for which we have
21
figures, we collected about $218 million.
22
that we know came from the petroleum, mining and related
23
industries, about $104 million, and the rest was scattered
24
among primary metal industries, railroad
25
savings and loan associations, and so on.
When you look at the effect of the minimum
Now, about half of
transportation,
So it looks as though
15
1
the bulk of that revenue came from petroleum, mining, and
2
related industries, and that was because one of the prefer
5
ences is depletion and that would turn up in those industries.
4
Now, there have been various proposals to change
5
the minimum tax.
6
of bills is to double the rate, which is at least a quick way
7
of changing it.
8
structural changes would be needed as a matter of fairness.
9
For example, when the 10 percent tax is applied to the excess
10
of the accelerated real estate depreciation over straight
11
line depreciation, the taxpayer now is given no adjustment
12
for this tax when he later sells the property, nor is an
13
employee who pays the minimum tax when he exercises a stock
14
option- given an adjustment to the basis of the stock when he
15
later sells the stock at a gain.
16
the tax rate substantially, I think equity would require that
17
some of these complicated adjustments be made.
18
One'proposal that has been made in a number
If we were to double the tax, however, some
If~we~ are going to increase
Another proposal is to reduce the exemption, now
19
$30,000, to $20,000 or $15,000.
As an illustration, if we
20
were to reduce the exemption from $30,000 to $20,000 at the
21
1972 level of income, we estimate that this would increase the
22
revenue yield of- individuals, which we estimate at $180 million
23
for 1972, to $220 million, a gain of $40 million.
24
would increase the number of the persons paying the minimum
25
tax from 30,000 to 55,000.
But it
If you reduce the exemption to
16
1
$15,000, you could raise the revenue from what we estimate
2
1972 at $180 million to $250 million, and the number of tax-
5
payers would increase to 75,000.
4
Now, whether the added complication for so many more
5
taxpayers is worth it~in relation to this amount of revenue
6
gained has to be weighed in the balance, particularly when you
7
consider that most of the effect is with respect to capital
8
gains and the capital gains treatment will doubtless be re-
9
viewed on its own.
Another important proposal with respect to the
10
11
minimum tax is a proposal to eliminate the deduction now given
12
in computing thè amount subject to minimum tax for the
13
regular
14
double, the revenue from the minimum tax and it would be quite
"15
income taxes paid.
significant.
Roughly speaking, this would
However, while this was the type of proposal
16
that came from the Senate Finance Committee in ’69 and was
17
changed on the floor of the Senate to its present form, if you
18
eliminate the deductions for the regular income tax, the
19
minimum tax would then simply be at 7 percent or whatever the
20
rate would be applied to the items of preference income, re-
21
gardless of whether the taxpayer was paying a regular income
22
tax or not.
23
1
— -
---~ ~ - -
Neither the Treasury's staff proposals in 1968 for
24
a minimum tax nor the Treasury's 1969 proposal for a limit on
25
tax preferences, nor the current limit on tax law applies when
- \r ■. r1
the taxpayer has a relatively small proportion of tax prefer
ences in relation to his total income.
When the regular in
come tax is deducted, as under existing law, the minimum tax
isn't applicable if the taxpayer gains in regular income tax
more ordinary income tax,“ pay more ordinary income tax than
his preferences calculated after allowance of exemptions.
But the incentives given by Congress for these special prefer
ences are thus available to people who are bearing a substant
tial ordinary tax burden, while the objectives of the minimum
tax were obtained by having the tax apply to those persons
who are using the incentives to such an extent that they are
not bearing a reasonable part of the cost of the government.
If we convert the minimum tax into a direct tax on preferences,
we are- simply watering down those preferences, and if that is
deemed to be the desirable objective;~it would be far simpler
to whittle down those particular incentive provisions directly
rather than indirectly by a complex separate tax on the
allowed preferences.
Now, so much for the minimum tax.
I might add that
there are other proposals to add to the minimum tax tax-exempt
interest on state and municipal bonds, but I think if this
were done certainly with respect to outstanding bonds, it would
raise serious problems of equity and my reaction from the
kinds of conclusions of the Congress in 1969 would be that the
Congress would not be inclined to take a step to tax municipal
9
should be the guidelines in making those determinations.
10
I think it has some promise for a solution in that area.
But
Now, one of thé things that I might mention is the
11
12
problem of the tax shelters involved in real estate syndicate
15
operations, farming operations and farm syndicates, oil and
14
gas syndicates, which has been proliferating."’ I was interested,
15
when we gave these revenue estimates by income classes to the
16
Joint Economic Committee on July 21, I was interested in find
17
ing, according to our Treasury staff estimates for 1 9 7 1 -levels
18
of income in that above $100,000 income group, where $5.9
19
20
billion as I mentioned
was foregone because of the 45 prefer
ences .
21
The sum total of revenue loss in that income group
22
for percentage tlepletion, intangible drilling costs, capital
23
gains in timber, farm expenses and farming capital gains,
24
accelerated depreciation in excess of straight line on real
25
estate and housing rehabilitation —
all of those things
A-
—m
19
1
represented in the aggreate only some $250 million out of the
2
aggregate of $5.9 billion.
5
any way that $250 million is a small number, but it is swamped
4
by some of the other numbers, particularly the ones relating
5
to capital gains.
6
~
Now, I don't mean to indicate in
........ —
*j
Now, "we are concerned nonetheless that the syndica
7
tion operations in the tax shelter area have been increasing,
8
and Chairman Casey of the SEC has particularly indicated
9
concern about the increase in the number of syndications in
10
that area.
11
ation.
So I am sure that these will come under consider
12
Of course there will be consideration given to the
13
treatment of farm and business income, but I understand that
14
that will be discussed later this afternoon and so I shall not
15
take up your time with it.
16
sideration of the estate and gift tax, which the Ways and
17
Means Committee had indicated in the '69 committee report
18
would be taken up soon thereafter, and I assume that time has
19
come, and that will involve the related problem of capital
20
gains at death.
21
But I am sure there will be con
We have, I am sure, the problem of the taxation of
22
married and single people
23
subject.
24
Treasury at least came to a conclusion that I indicated to
25
the Ways and Means Committee around the first of May, that
which is a grievously difficult
We have worked long and hard on that and we at the
20
^y
1
g iv e n
th e
2
d e s ir e
5
t h is e
4
to
5
th e
o b je c t iv e
to
in
g iv e
e q u ate
th e
com m on la w
e ffe c t
s in g le
to
p e o p le
o f p r o g r e s s iv e
ta x e s
in
e sta te s,
th e
at
th e
7
b u rd e n ,
is
b ase d
8
p e o p le
9
e x te n t th a t
10
w o rk.
liv e
on th e
to g e th e r
sam e
(L a u g h te r.]
12
We a r e
13
h a v in g
IR S
14
b u t w e -h a v e
a ge n ts
g iv in g
r e s is t e d
[ L a u g h t e r .]
16
I
w it h .
The
18
a g a in s t
19
a g a in s t ,
20
im p o s s ib le
21
b a s ic
fin d
s in g le
I
to
23
c o n c lu d e
24
in
25
have
th e
th a t.
t h is
c o n c lu d e d
of
p e o p le
is
p e o p le
liv e
a p a rt,
in c o r r e c t , th e
v >
to
th e
a c t u a lly
.
in
th e
and
ta x
sy ste m
to
liv in g
th e
w o n 't
p o s s ib ilit y
■ ; « ^
c la im
th a t
p e o p le
c la im
th e
o f th e
have
th e
>
t h a t we m ade t h a t m a r r ie d
w it h
of
w hom ,
t b •<-; ••
a n e x t r e m e ly d i f f i c u l t
t h in k
on
th e y
th e y
su b je c t to
are
are
d is c r im in a t e d
g iv e n
in c o m e
lo n g
ta x
enough.
t o m y ow n t h o u g h t s
stru c tu re .
For
b een u r g in g
th a t
deal
d is c r im in a t e d
t h a t m a t h e m a t ic a lly
o f b o th ,
p r o g r e s s iv e
r a m b le d
ta x
and have
to
c la im s
w it h o u t r e f e r r in g
e q u it y
‘ '
and
--------
s a t is fy
W e llr I
22
s in g le
am i n c l i n e d
a s s u m p t io n s
........
to
im p o s s ib le
p e o p le
w h ic h d i f f e r e n t i a t e s
on w ho i s
a n d th e m a r r ie d
and
t im e .
and a
e sta te s
th e m a r r ie d
c o n s id e r a t io n
check
15
17
and
stru c tu re
n o t m a t h e m a t ic a lly
a s s u m p t io n
t h a t a s s u m p t io n
11
is
o f b o th
The p re se n t sy ste m ,
6
ta x
c o m m u n it y p r o p e r t y
it
c la im s
in c o m e
som e o f
it
th e
stru c tu re .
I
d o n 't
lik e
to
a b o u t im p r o v e m e n t
so m e m o n th s n o w ,
th e re
is
is
I
a m a x im u m
'777.
1
e q u it y
2
h a lf
5
in c h e s
in
ra te s
in
th e
ta x
stru ctu re
of
ta x
to
h e ig h t .
I
a ll
[L a u g h te r.]
5
Not
lo n g
ago~,
6
on a c o ld
7
th e
8
w h ile
9
fa c in g
10
know , w as th e
11
th e
12
have been
13
q u o t a t io n s , s p e a k in g
14
ro ck
15
re v e n u e
B u ild in g
s it t in g
of
th o se
th e re
re ar
th e
b ase
about
fo r
o f th e
th a t
a
17
On a b e a u t ifu l d ay
go
19
H a m ilt o n ' s r o c k .
o u t in
Rock C re ek
[L a u g h te r.]
21
T hank yo u v e ry m uch.
23
24
25
and
lik e
20
22
th e
T re asu ry
B u ild in g
w h ic h w e d e d ic a t e d
n a t io n a l
la n d m a r k ,
and
sta tu e
and he,
T re asu ry,
t im e
are
I
w as
as
you
and e n grave d
th e w o rd s
s in c e .
"H e
It
has
sm o te
an ab u n d an t stre a m
on
th a t
in
th e
of
------
[L a u g h te r.]
w ill
of
sta tu e
lo n g
fo rth ."
t h in k
th a t.
o f A le x a n d e r H a m ilt o n ,
o u r n a t io n a l r e s o u rc e s
18
by g iv in g
sp e e c h e s w e re b e in g m ad e,
of
16
I
fro n t
a c h ie v e d
under fiv e -fo o t -s ix -
an h o u r in
S e c re ta ry
o f th e
th in k in g
gu sh ed
be
o f A le x a n d e r H a m i l t o n 's
fir s t
s id e
in
an h is t o r ic
w h ile
HJL/7I/
h o p e fu l o f
I”sat
as
w ho a re
21
: oy
w h ic h w o u ld
O c to b e r d a y d u r in g
T re asu ry
n o rth
■ . -; :
am s t i l l
4
th e
.. ■, ;
t h is ,
P ark
w hen I
and
lo o k
le a v e
h e re ,
I
f o r A le x a n d e r
I
Dec-ember 8, 1972
FOR IMMEDIATE RELEASE
SCHEDULE FOR TREASURY'S REGULAR WEEKLY
B IL L AUCTIONS DURING THE HOLIDAY SEASON
The T r e a s u r y 's r e g u la r w eekly b i l l a u c t io n w i l l be h e ld on F r id a y ?
December 15, r a t h e r th a n on Monday, December 18.
The day f o r th e a u c t io n i s
b e in g advanced to a s s u r e ample tim e between i t and th e payment d a te d u r in g
th e p r e - h o lid a y se aso n .
Payment f o r and d e liv e r y o f th e b i l l s w i l l be on
the norm al day, T h ursday, December 21,
Announcements i n v i t i n g te n d e rs f o r th e two sub sequent w eekly b i l l a u c tio n s
w i l l be made on F r id a y , December 15, and F r id a y , December 22, and th e a u c tio n s
w i l l be h e ld on F r id a y , th e 22nd and th e 29th.
f o r th e se is s u e s w i l l be Th ursday as u s u a l.
The payment and d e liv e r y day
December 8, 1972
FOR IMMEDIATE RELEASE
TREASURY’ S WEEKLY B IL L OFFERING
The T re a s u ry Departm ent, b y t h i s p u b lic n o t ic e , i n v i t e s te n d e rs f o r two s e r i e s
o f T re a su ry b i l l s
t o th e a g g r e g a te amount o f $ 4 ,3 0 0 ,0 0 0 ,0 0 0 , o r th e re a b o u ts , f o r
cash and i n exchange f o r T re a s u ry b i l l s m a tu rin g
December 21, 1972, i n th e amount
o f $ 4 ,1 0 2 ,9 2 5 ,0 0 0 , as f o l l o w s :
9 1 -d a y b i l l s
( t o m a t u r it y d a te ) to be is s u e d
December 21, 1972, i n th e amount
o f $ 2 ,4 0 0 ,0 0 0 ,0 0 0 , o r th e re a b o u ts , r e p r e s e n t in g an a d d i t i o n a l amount o f b i l l s
dated
September 21, 197%and to m ature
M arch 22, 1973
o r i g i n a l l y is s u e d i n th e amount o f $ 1 ,8 0 1 ,8 2 5 ,0 0 0 ,
b ills
(C U S IP No. 912793 Q13 ),
th e a d d i t i o n a l and o r i g i n a l
t o be f r e e l y in te r c h a n g e a b le .
1 8 2 -d a y b i l l s ,
and. t o m ature
The b i l l s
f o r $ 1 ,9 0 0 ,0 0 0 ,0 0 0 , o r th e re a b o u ts , to be d a te d
June 21, 1973
(C U S IP No. 912793
December 21, 1972,
QY5 ).
o f b o th s e r i e s w i l l be is s u e d on a d is c o u n t b a s i s under c o m p e titiv e
and n o n c o m p e titiv e b id d in g as h e r e in a f t e r p ro v id e d , and a t m a t u r it y t h e i r fa c e
amount w i l l be p a y a b le w ith o u t i n t e r e s t .
They w i l l be is s u e d i n b e a re r form o n ly ,
and i n d e n o m in a tio n s o f $10,000, $15,000, $50,000, $100,000, $500,000 and $1,000,000
(m a t u r ity v a l u e ) .
Tenders w i l l be r e c e iv e d a t F e d e r a l R e se rv e Banks and Bran ch es up t o th e c l o s
in g h o u r, o n e - t h ir t y p .m ., E a s te r n
S ta n d a rd tim e , F r id a y , December 15, 1972.
Tenders w i l l n o t be r e c e iv e d a t th e T re a s u ry Departm ent, W ash in gto n .
must be f o r a minimum o f $10,000.
$5,000.
Each te n d e r
Tenders o ve r $10,000 m ust be i n m u lt ip le s o f
I n th e c a se o f c o m p e titiv e te n d e rs th e p r ic e o f f e r e d m ust be e x p re sse d
on th e b a s i s o f 100, w ith n o t more th a n th re e d e c im a ls , e . g . ,
may n o t be u se d .
It
99.925.
F ra c tio n s ,
i s u rg e d t h a t te n d e rs be made on th e p r in t e d form s and f o r
warded i n th e s p e c i a l e n ve lop e s w hich w i l l be s u p p lie d b y F e d e r a l R e se rv e Banks
or B ran ch es on a p p lic a t i o n t h e r e fo r .
B a n k in g i n s t i t u t i o n s g e n e r a lly may su b m it te n d e rs f o r a cco u n t o f custom e rs
p ro v id e d th e names o f th e custom e rs a re s e t f o r t h i n such te n d e rs .
O th ers th an
b a n k in g i n s t i t u t i o n s w i l l n o t be p e rm itte d to su b m it te n d e rs exce pt f o r t h e i r own
(OVER)
ac c o u n t.
Tenders w i l l be r e c e iv e d w ith o u t d e p o s it from in c o r p o r a t e d banks and
t r u s t com panies and from r e s p o n s ib le and r e c o g n iz e d d e a le r s i n in ve stm e n t
s e c u r it ie s .
Tenders from o th e r s m ust be accom panied b y payment o f 2 p e rc e n t
o f th e fa c e amount o f T re a s u ry b i l l s
a p p lie d f o r , u n le s s th e te n d e rs are
accom panied by an e x p re ss g u a r a n t y o f payment b y an in c o r p o r a t e d bank o r t r u s t
company.
Im m e d ia te ly a f t e r th e c l o s i n g h o u r, te n d e rs w i l l be opened a t th e F e d e ra l
R e se rv e Banks and B ra n ch e s, f o llo w i n g w hich p u b li c announcement w i l l be made by
th e T re a s u ry Departm ent o f th e amount and p r i c e ra n ge o f acc e p te d b i d s .
O n ly those
s u b m it t in g c o m p e titiv e te n d e rs w i l l be a d v is e d o f th e a cc e p tan ce o r r e j e c t io n
t h e r e o f.
The S e c r e t a r y o f th e T re a s u ry e x p r e s s ly r e s e r v e s th e r i g h t t o acce p t or
r e j e c t any o r a l l te n d e r s , i n w hole o r i n p a r t , and h i s a c t io n i n any such respect
s h a l l be f i n a l .
S u b je c t to th e se r e s e r v a t io n s , n o n c o m p e titiv e te n d e rs f o r each
i s s u e f o r $200,000 o r l e s s w ith o u t s t a t e d p r i c e from any one b id d e r w i l l be accepted]
i n f u l l a t th e av e ra ge p r i c e
th e r e s p e c t iv e i s s u e s .
( i n th re e d e c im a ls ) o f acce p te d c o m p e titiv e b id s fo r
S e ttle m e n t f o r acce p te d te n d e rs i n acco rd an ce w ith the
b i d s m ust be made o r co m pleted a t th e F e d e r a l R e se rv e Bank on
December 21, 1972,
i n c a sh o r o th e r im m e d ia te ly a v a i l a b l e fu n d s o r i n a l i k e fa c e amount o f Treasury
b i l l s m a tu rin g
tre a tm e n t.
December 21, 1972.
Cash and exchange te n d e rs w i l l r e c e iv e equal
Cash a d ju stm e n ts w i l l be made f o r d if f e r e n c e s between th e p a r v a lu e of
m a tu rin g b i l l s
a cc e p te d i n exchange and th e i s s u e p r i c e o f the new b i l l s .
Under S e c t io n s 4 5 4 (b ) and 12 2 1 (5 ) o f th e I n t e r n a l Revenue Code o f 1954 the
amount o f d is c o u n t a t w hich b i l l s
when th e b i l l s
is s u e d h ereun der a re s o l d i s
a re s o ld , redeemed o r o th e rw ise d is p o s e d o f , and th e b i l l s
c lu d e d from c o n s id e r a t io n as c a p i t a l a s s e t s .
b ills
(o t h e r th a n l i f e
are ex
A c c o r d in g ly , th e owner o f T re asu ry
in s u r a n c e com p anies) is s u e d h ereunder m ust in c lu d e i n h is
income t a x r e t u r n , as o r d in a r y g a in o r l o s s ,
f o r th e b i l l s ,
c o n s id e re d to accrue |
th e d if f e r e n c e between th e p r ic e p aid
w hether on o r i g i n a l is s u e o r on su b se q u e n t p u rc h a se , and th e amount
a c t u a l l y r e c e iv e d e it h e r upon s a le o r red em p tion a t m a t u r it y d u r in g th e ta x a b le
y e a r f o r w hich th e r e t u r n i s made.
T re a s u ry Departm ent C i r c u l a r No. 418 (c u r r e n t r e v i s i o n )
p r e s c r ib e th e term s o f th e T re a s u ry b i l l s
and t h i s n o t ic e ,
and go v e rn th e c o n d it io n s o f t h e i r issu e . I
C o p ie s o f th e c i r c u l a r may be o b ta in e d from any F e d e r a l R e se rv e Bank o r Branch.
0
Department /theTREASURY
¡ Ê Ê Ë M D.C. 20220
|f
TELEPHONE W04-2041
F O R IM M E D IA T E
RELEASE
December 8, 1972
FINANCIAL INSTITUTIONS ALLOWED 45 DAYS TO
SECURE TAXPAYER IDENTIFICATION NUMBER
The Treasury Department announced today amendments to the
regulations implementing Public Law 91-508, the Financial
Recordkeeping and reporting of Currency and Foreign Transactions
Act of 1970, which will allow Financial Institutions 45 days
to secure a taxpayer identification number for each deposit or
share account opened after June 30, 1972.
If the Institution
is unable to obtain the number in that time, it will not be in
violation of the law if it (a) has made a reasonable effort to
secure the number, (b) it maintains a list of persons who have
not supplied the number, and (c) is prepared to notify the
Secretary of the Treasury of the name, address,
and account number
of any person who has not supplied the number, if so directed.
The amendments also codify previously announced exemptions
to the Taxpayer identification number requirement, and additionally
exempts accounts of (a) Federal, State, local and foreign
governmental agencies; (b) aliens temporarily residing in the
United States who are students and aliens not engaged in a trade
or business in the United STates, (c) unincorporated subordinate
units of a tax exempt central organization which are covered by
a group exemption letter.
Other amendments announced today do the following:
S-85
(1)
Exempt banks from reporting normal overland
international shipments of currency or
monetary instruments from or to an established
customer.
(2)
Provide that only the bank which actually pays
or collects a check or draft in an amount in
excess of $10,000 drawn on or issued by a foreign
bank to maintain the original or a copy of the
check or draft.
(3)
Limit the requirement that a copy and a record
be retained of the receipt of each check, draft
or transfer of credit of more than $10,000
received directly from a person, account or
2
p la c e o u t s id e th e U n it e d S t a t e s t o th o s e
w h ic h a r e r e c e iv e d fr o m a b a n k , b r o k e r o r
d e a le r in f o r e ig n e x c h a n g e lo c a t e d o u t s id e
th e U n it e d S t a t e s .
1
A c o p y o f th e a m e n d m e n ts, w h ic h w i l l b e p u b lis h e d
F e d e ra l R e g is t e r , is a tta c h e d .
A tta ch m e n t
in
th e
THE DEPARTMENT OF THE TREASURY
[31 CFR Part 103]
FINANCIAL RECORDKEEPING AND REPORTING
OF CURRENCY AND FOREIGN TRANSACTIONS
Liberalization of Certain Requirements
In order to clarify certain features of the recordkeeping
and reporting requirements imposed pursuant to Titles I and II
of Public Law 91-508 (84 Stat. 1114 et seq.) the Department
finds that it is necessary to make the following amendments to
31 CFR Part 103, 37 F.R. 4912 (1972) set forth below, effective
immediately.
The Department also finds that, since each of these amend
ments relieves restrictions, notice and public procedure with
respect to said amendments is unnecessary under the provisions
of 5 U.S.C. 553(b)
and that good cause exists for making it
effective less than 30 days after publication.
Samuel R. Pierce, Jr
General Counsel / X
A s s is t a n t
S e c re ta ry
DEC 6 1972
Part 103 of Title 31 of the Code of Federal Regulations is
amended as follows:
Subpart B is amended by an amendment to §103.23 as follows:
§103.23 Reports of transportation of currency or monetary instru
ments .
(a) Each person who physically transports, mails, or ships,
or causes to be physically transported, mailed or shipped,
currency or other monetary instruments in an aggregate amount
exceeding $5,000 on any one occasion from the United States to
any place outside the United States, or into the United States
from any place outside the United States, shall make a report
thereof.
A person is deemed to have caused such transportation,
mailing or shipping when he aids, abets, counsels, commands,
procures or requests it to be done by a financial institution or
any other person.
A transfer of funds through normal banking
procedures which does not involve the physical transportation of
currency or monetary instruments is not required to be reported
by this section.
(b) Each person who receives in the United States currency
or other monetary instruments in an aggregate amount exceeding
$5,000 on any one occasion which have been transported, mailed,
or shipped to such person from any place outside the United States
with respect to which a report has not been filed under paragraph
of this section, whether or not required to be filed thereunder,
shall make a report thereof, stating the amount, the date of
receipt, the form of monetary instruments, and the person from
whom received.
(a)
2
(c)
This section shall not require reports by (1)
a Federal Reserve Bank,
(2) a bank, a foreign bank, or a broker
or dealer in securities, in respect to currency or other monetary
instruments mailed or shipped through the postal service or by
common carrier,
(3) a commercial bank or trust company organized
under the laws of any state or of the United States with respect
to overland shipments of currency or monetary instruments shipped
to or received from an established customer maintaining a deposit
relationship with the bank, in amounts which the bank may
reasonably conclude do not exceed amounts commensurate with the
customary conduct of the business, industry or profession of
the customer concerned,
(4) a person who is not a citizen or
resident of the United States in respect to currency or other
monetary instruments mailed or shipped from abroad to a bank
or broker or dealer in securities through the postal service
or by common carrier,
(5) a common carrier of passengers in
respect to currency or other monetary instruments in the
possession of its passengers,
(6) a common carrier of goods in
respect to shipments of currency or monetary instruments not
declared to be such by the shipper,
(7) a travelers' check
issuer or its agent in respect to the transportation of travelers'
checks prior to their delivery to selling agents for eventual
sale to the public,
(8) nor by a person engaged as a business in
the transportation of currency, monetary instruments and other
commercial papers with respect to the transportation of currency
or other monetary instruments overland between established
3
offices of banks or brokers or dealers in securities and foreign
persons.
(d)
This section does not require that more than one report
be filed covering a particular transportation, mailing or shipping
of currency or other monetary instruments with respect to which a
complete and truthful report has been filed by a person.
However,
no person required by paragraph (a) or (b) of this section to file
a report shall be excused from liability for failure to do so if,
in fact, a complete and truthful report has not been filed.
Subpart C is amended by amending §103.34 to read as follows:
§103.34
(a)(1)
Additional Records to be made and Retained by Banks With respect to each deposit or share account opened with
a bank after June 30, 1972, by a person residing or doing business
in the United States or by a citizen of the United States, such
bank shall, within forty-five days from the date such an account
is opened, secure and maintain a record of the taxpayer identifi
cation number of the person maintaining the account; or in the
case of an account of one or more individuals, such bank shall
secure and maintain a record of the social security number of
an individual having a financial interest in that account.
In £he event that a bank has been unable to secure the
identification required herein with respect to an account within
the 45-day period specified, it shall nevertheless not be deemed
to be in violation of this section if (i) it has made a
reasonable effort to secure such identification,and (ii) it
4
maintains a list containing the names, addresses, and account
numbers of those persons from whom it has been unable to secure
such identification, and makes the names, addresses, and account
numbers of those persons available to the Secretary as directed
by him.
(2)
The 45-day period provided for in paragraph (1) shall
be extended where the person opening the account has applied for
a taxpayer identification or social security number on Form SS-4
or SS-5, until such time as the person maintaining the account
has had a reasonable opportunity to secure such number and furnish
it to the bank.
(3)
A taxpayer identification number for a deposit or share
account required under subsection (1) need not be secured in the
following instances:
(i) accounts for public funds opened by
agencies and instrumentalities of Federal, State, local or foreign
governments,
(ii) accounts for aliens who are (a) ambassadors,
ministers, career diplomatic or consular officers, or (b) naval,
military or other attaches of foreign embassies and legations, and
for the members of their immediate families,(iii)accounts for
aliens who are accredited representatives to international
organizations which are entitled to enjoy privileges, exemptions
and immunities as an international organization under the
International Organizations Immunities Act of December 29, 1945
(22 U.S.C. sec. 288), and for the members of their immediate
families,
(iv) aliens temporarily residing in the United States
for a period not to exceed 180 days,
(v) aliens not engaged in
a trade or business in the United States who are attending a
recognized college or university or any training program, super
vised or conducted by any agency of the Federal Government,
(vi)
unincorporated subordinate units of a tax exempt central organiza
tion which are covered by a group exemption letter,
(vii) interest
bearing accounts maintained by a person under 18 years of age
opened as part of a school thrift savings program, provided the
annual interest does not exceed $10, and (viii) Christmas Club,
vacation club and similar installment savings programs provided
the annual interest does not exceed $10.
In instances (vii) and
(viii) , the bank shall, within fifteen days following the end of
any calendar year in which the interest accrued in that year
exceeds $10, use its best efforts to secure and maintain the
appropriate taxpayer identification number or application form
therefor.
(4)
The rules and regulations issued by the Internal Revenue
Service under Section 6109 of the Internal Revenue Code of 1954
shall determine what constitutes a taxpayer identification number
and whose number shall be obtained in the case of an account main
tained by one or more persons.
(b)
Each bank shall, in addition, retain either the original or
a microfilm or other copy or reproduction of each of the following
(1) Each document granting signature authority over each
deposit or share account?
(2) Each statement, ledger card or other record on each
deposit or share account, showing each transaction in, or with
respect to, that account;
6
(3) Each check, clean draft, or money order drawn on the
bank or issued and payable by it, except those drawn on accounts
which can be expected to have drawn on them an average of at
least 100 checks per month over the calendar year or on each
occasion on which such checks are issued, and which are (i)
dividend checks,
checks,
(vi)
(ii) payroll checks,
(iv) insurance claim checks,
(iii) employee benefits
(v) medical benefit checks,
checks drawn on governmental agency accounts,
drawn by brokers or dealers in securities,
on fiduciary accounts,
(vii) checks
(viii) checks drawn
(ix) checks drawn on other financial
institutions, or (x) pension or annuity checks;
(4)
Each item other than bank charges or periodic charges
made pursuant to agreement with the customers, comprising a
debit to a customer's deposit or share account, not required to
be kept, and not specifically exempted, under subparagraph (3)
of this paragraph;
(5)
Each item, including checks, drafts, or transfers of
credit, of more than $10,000 remitted or transferred to a person,
account or place outside the United States,
(6)
A record of each remittance or transfer of funds, or of
currency, other monetary instruments, checks, investment securities/
or credit, of more than $10,000 to a person, account or place
outside the United States;
(7)
Each check or draft in an amount in excess of $10,000
drawn on or issued by a foreign bank which the domestic bank has
paid or presented to a non-bank drawee for payment;
7
(8)
Each item, including checks, drafts or transfers of
credit, of more than $10,000 received directly and not through a
domestic financial institution, by letter, cable, or any other
means from a bank, broker, or dealer in foreign exchange outside
the United States;
(9)
A record of each receipt of currency, other monetary
instruments, investment securities, or checks, and of each
transfer of funds or credit, of more than $10,000 received on
any one occasion directly and not through a domestic financial
institution, from a bank, broker or dealer in foreign exchange
outside the United States;
(10)
Records prepared or received by a bank in the ordinary
course of business, which would be needed to reconstruct a demand
deposit account and to trace a check deposited in such account
through its domestic processing system or to supply a description
of a deposited check.
This subparagraph shall be applicable only
with respect to demand deposits.
$103.35
Additional records to be made and retained by brokers
and dealers in securities.
(a)(1)
With respect to each brokerage account opened with a
broker or dealer in securities after June 30, 1972, by a person
residing or doing business in the United States or a citizen of
the United States, such broker or dealer shall within forty-five
days from the date such account is opened, secure and maintain a
record of the taxpayer identification number of the person main
taining the account; or in the case of an account of one or more
8
individuals, such broker or dealer shall secure and maintain a
record of the social security number of an individual having a
financial interest in that account.
In the event that a broker or dealer has been unable to
secure the identification required within the 45-day period
specified, it shall nevertheless not be deemed to be in violation
of this section if (i) it has made a reasonable effort to secure
such identification, and (ii) it maintains a list containing the
names, addresses and account numbers of those persons from whom
it has been unable to secure such identification, and makes the
names, addresses, and account numbers of those persons available
to the Secretary as directed by him.
(2)
The 45-day period provided for in paragraph
(1)
shall be extended where the person opening the account has
applied for a taxpayer identification or social security number
on Form SS-4 or SS-5, until such time as the person maintaining
the account has had a reasonable opportunity to secure such
number and furnish it to the broker or dealer.
(3)
A taxpayer identification number for a deposit or
share account required under subsection
in the following instances:
(1) need not be secured
(i) accounts for public funds
opened by agencies and instrumentalities of Federal, State,
local or foreign governments,
(ii) accounts for aliens who are
(a) ambassadors, ministers, career diplomatic or consular
officers, -or (b) naval, military or other attaches of foreign
embassies, and legations, and for the members of their immediate
families,
(iii) accounts for aliens who are accredited
9
(iii) accounts for aliens who are accredited representatives to
international organizations which are entitled to enjoy privileges,
exemptions and immunities as an international organization under
the International Organizations Immunities Act of December 29,
1945 (22 U.S.C. sec. 288), and for the members of their immediate
families,
(iv) aliens temporarily residing in the United States
for a period not to exceed 180 days,
(v) aliens not engaged in
a trade or business in the United States who are attending a
recognized college or university or any training program, super
vised or conducted by any agency of the Federal Government, and
(vi) unincorporated subordinate units of a tax exempt central
organization which are covered by a group exemption letter.
(b)
Every broker or dealer in securities shall, in addition,
retain either the original or a microfilm or other copy or
reproduction of each of the following:
(1)
Each document granting signiture or trading authority
over each customer*s account;
(5),
(2)
Each record described in §204.-17a-3(a)
(1), (2),
(3),
(6),
(7),
(3)
A record of each remittance or transfer of funds, or of
(8), and (9) of Title 17, Code of Federal Regulation
currency, checks, other monetary instruments, investment securities
or credit, of more than $10,000 to a person, account or place
outside the united States;
10
(4)
A record of each receipt of currency, other monetary
instruments, checks, or investment securities and of each
transfer of funds or credit, of more than $10,000 received on
âny one occasion directly and not through a domestic financial
institution, from any person, account or place outside the
United States.
of TREASURY
Department the
WASHINGTON, D.C. 20220
I
TELEPHONE W04-2041
FOR IMMEDIATE RELEASE
December 11,1972
WILLIAM L. GIFFORD NAMED ASSISTANT TO THE
SECRETARY OF THE TREASURY FOR LEGISLATIVE AFFAIRS
Secretary of the Treasury George P. Shultz today announced the
appointment of William L. Gifford as Assistant to the Secretary for
Legislative Affairs.
In his new post Mr. Gifford will coordinate and direct all
Congressional relations for the Department, Secretary Shultz said.
Mr. Gifford, 42, has served as Special Assistant to the
President since September, 1970.
In that capacity he handled
Congressional Relations for the Office of Management and Budget.
Prior to service at the White House he was Special Assistant for
Legislative Affairs at the Department of Labor for then
Secretary of Labor Shultz.
"I welcome the opportunity to continue my relationship with
Bill Gifford," Secretary Shultz said, " a n d am pleased his
expertise and relationships with Congress will be available to
the Department of the Treasury."
A native of Weston, Connecticut, Mr. Gifford received his
B.A. degree from Fordham University and attended the University
of Connecticut School of Law.
He than served with several
newspapers including the Jamestown, New York, Post-Journal.
Beginning in 1959, he served for 10 years as Administrative
Assistant to then Representative Charles E. Goodell of
New York.
He is married to the former Marion Miletti of Jamestown,
New York.
The Giffords have three children, Margaret, William,Jr.,
and David.
They reside in Alexandria, Virginia.
oOo
S-86
WILLIAM Lo GIFFORD
William Lo Gifford, 42, was born in Weston,
Connecticut, the son of M r s e Rolland Wo Gifford and the
late M r c Giffordo He attended local public schools and
attended Fordham University on an academic scholarship0
He attended the University of Connecticut School of
Law from 1952 to 1955 while working as a law librarian0
Following stints on several newspapers, he was a
political reporter for the Jamestown, N„ Yo, Post-Journalo
In June, 1959, he began service as Administrative
Assistant to then Representative Charles Eo Goodell of
New Yorko
Upon the appointment of Representative Goodell
to the Uo So Senate he served as Director of Congressional
Activities for the 38th Congressional District of New York
After brief service as Administrative Assistant to
Representative James F c Hastings of New York, he joined
the Administration of President Nixon as Special Assistant
to then Secretary of Labor George P c Shultz0
When Secretary Shultz became Director of the Office
of Management and Budget, Gifford was named as Special
Assistant to the President and assigned to handle
Congressional Relations for the OMB <, After M r 0 Shultz
became Secretary of the Treasury, Gifford was named
Special Assistant to the Secretary of the Treasury for
Legislative Affairs, effective December 12, 19720
He is a life-long Republican having participated in
political campaigns since 19480 He is married to the
former Marion Miletti of Jamestown, New York«
They have
three children - Margaret, William, J r 0, and Davido
They
reside in Alexandria, V a c
###
December 1972
Of
DepartmentoftheTREASURY
WASHINGTON, D.C. 20220
TELEPHONE W04-2041
n 89
ATTENTION:
FINANCIAL EDITOR
December 11, 1972
!0R RELEASE 6:30 P.M.
RESULTS OF TREASURY’S WEEKLY B IL L OFFERING
The T re a su ry Department announced t h a t th e te n ders f o r two s e r ie s o f T re asu ry
(ills, one s e r ie s to be an a d d it io n a l is s u e o f the b i l l s dated September 14, 1972 , and
;he other s e r ie s to be dated December 14, 1972 , which were in v it e d on December 5 , 1972,
rere opened a t the F e d e ra l Reserve Banks to d ay .
Tenders were i n v it e d f o r $2,400,000,000,
>r th e re ab o u ts, o f
91-day b i l l s and f o r $1,900,000,000, or th e re a b o u ts, o f
182-day
i l l s . The d e t a i l s o f th e two s e r ie s are as f o l l o w s :
SANGE OF ACCEPTED
¡OMPETITIVE B ID S :
H igh
Low
Average
(
a
61$
17$
91-d a y T re asu ry b i l l s
m atu rin g March 15, 1973
A p p ro x . E q u iv .
Annual Rate
P r ic e
98.713
98.707
98.711
5.091$
5.115$
5.099$
1/
182 -d a y T re asu ry b i l l s
m atu rin g June 14, 1975
Approx. Eq u iv.
Annual Rate
P r ic e
97.326 a/
97.304
97.316
5.289$
5.333$
5.309$
1/
E x c e p tin g one te n der o f $600,000
o f the amount o f 91-day b i l l s b id f o r a t th e low p r ic e was accepted
o f th e amount o f 182-day b i l l s b id f o r a t the low p r ic e was accepted
K)TAL TENDERS APPLIED FOR AND ACCEPTED BY FEDERAL RESERVE D IST R IC T S:
D is tr ic t
Boston
New Y ork
P h ila d e lp h ia
Cleveland
Richmond
A tlan ta
Chicago
St. L o u is
M inneapolis
Kansas C i t y
D allas
San F r a n c is c o
TOTALS
j In c lu d e s
'J In clu d e s
A p p lie d For
$ 1 31,105,000
3,428,995,000
49,790,000
59,745,000
42,215,000
24,465,000
294,155,000
54,120,000
29,340,000
42,525,000
21,115,000
391,140,000
$4,468,710,000
Accepted
$
10,690,000
1,925,800,000
9,805,000
21,220,000
15,730,000
10,975,000
109,780,000
28,660,000
6,835,000
18,900,000
8,840,000
233,320,000
$2,400,555,000 b/
A p p lie d For
$
48,225,000
2,360,435,000
30,025,000
95,425,000
36,140,000
20,795,000
406,625,000
54,250,000
22,330,000
36,840,000
28,380,000
111,650,000
Accepted
$
23,225,000
1,448,385,000
5,025,000
36,4 /5,000
16,740,000
14,550,000
266,205,000
25,780,000
10,330,000
21,035,000
12,750,000
20,350,000
$3,251,120,000
$1,900,850,000
cj
$188,940,000 no n co m p e titive te n d e rs accepted a t the average p r ic e o f 98.711
$ 118?,440*,000 no n co m p e titive te n d e rs accepted a t the average p r ic e o f 97.316
[/ These r a t e s are on a bank d is c o u n t b a s i s .
The e q u iv a le n t coupon is s u e y i e l d s are
5.24 $ f o r th e 91 -day b i l l s , and 5 .5 3 $ f o r the 182-d a y b i l l s .
WASHINGTON. D C. 20220
TELEPHONE W04-2Q41
FOR IMMEDIATE RELEASE
1
' *** r
December 7, 1972
TREASURY SECRETARY SHULTZ NAMES ERNEST J. LOEBBECKE
SAVINGS BOND CHAIRMAN FOR CALIFORNIA
Ernest J. Loebbecke, Chairman of the Board and Chief
Executive Officer of The TI Corporation, Los Angeles, has
been appointed Volunteer State Chairman for the Savings Bonds
Program by Secretary of the Treasury George P. Shultz, effec
tive immediately.
He succeeds Robert H. Moulton, Chairman of the Board, R. H.
Moulton £ Co., Los Angeles, who has served as Volunteer Chairman
since 1943.
Moulton has been named Chairman Emeritus for Cali
fornia.
Loebbecke will head a committee of state, business,
financial, labor, media, and governmental leaders, who -- in
cooperation with the Savings Bonds Division -- assist in promoting
the sales of Savings Bonds.
Loebbecke is a native of Chico, Cal.
He received his college
education at the University of San Francisco and Southwesten
University.
Upon graduation, he went into practice as a Certi
fied Public Accountant.
He joined the Title Guarantee and Trust Co. in 1934, serving
as accountant, chief accountant, and Treasurer of that company
before going into private practice in 1943.
In 1947, he joined the TI Corporation, then called Title
Insurance and Trust Co., as Treasurer.
He has since served the
company as Vice President, Executive Vice President, President,
and Chairman of the Board.
He has been Chief Executive Officer
of the company since 1963.
Loebbecke is a director of a number of companies, includ
ing the American Express Co. and Fireman’s Fund American
Insurance Co., San Francisco.
An active business leader, Loebbecke is past president
of the California State Chamber of Commerce, past director of
the Los Angeles Chamber of Commerce, and a member of the Policy,
Budget, Education, and Construction and Development Committees
(O V E R )
1
-
2-
of the U. S, Chamber of Commerce.
He was recently appointed
to the Governor's Manpower Policy Task Force, and is a member
of the California Commission for Economic Development.
MATURE!
Series
Series
Series
UNMATU
Series
He is a member of several educational and business organi
zations, and has been given honorary degrees by Loyola University
of Los Angeles and the University of San Francisco.
Since 1963, he has won a number of community service awards,
most recently the "Industrialist of the Year" award for 1972,
presented by the California Museum of Science and Industry.
Loebbecke and his wife, Ann, have a son, Robert E., and a
daughter, Mrs. Mary Anne Boulle.
oOo
Une
Tot
Series
Tot
Tot
All Sei
^eludesai
C
u
rre
n
tre
c
■1
UNITED STATES SAVINGS BONDS ISSUED AND REDEEMED THROUGH
November 30 , 1972
(Dollar amounts in millions — rounded and will not necessarily add to totals)
D ESC R IPT IO N
MATURED
Series A-1935 thru D-1941
Series F and G-1941 thru 1952
Series J and K-1952 thru 1957
UNMATURED
Series E
:
1941
1942
1943
1944
1945
1946
1947
1948
1949
1950
1951
1952
1953
1954
1955
1956
1957
1958
1959
1960
1961
1962
1963
1964
1965
1966
1967
1968
1969
1970
1971
1 Q72
U nclassified ___________________;_____
A M O U N T IS SU ED -^ /
AMOUNT
r e d e e m e d
J/
AMOUNT
O U T S T A N D IN G i/
5,003
29,521
3,754
4 ,998
29,497
3,745
5
24
9
1,917
8,460
13,598
15,864
12,493
5,693
5,423
5,621
5,575
4-,891
4,231
4,435
5,074
5,174
5,393
5,214
4,919
4,809
4,512
4,539
4 ,624
4,495
5,047
4,919
4,790
5,160
5,109
4,851
4,560
4,768
5,478
4,514
393
1,728
188
7,615
845
12,268
14,247
11,068
4,886
' 4,522
4,609
4,494
3,890
3,364
3,503
3,930
3,952
4,078
3,909
3,639
3,462
3,210
3,134
3,068
2,893
1,329
1,617
1,424
807
901
1,012
1,081
1,001
866
932
1,144
1,222
1,314
1,305
1,281
1,347
1,302
1,405
1,556
1,602
1,998
1,946
1,924
2,188
3,048
2,973
2,866
2,972
2,905
2,712
2,407
2,194
1,983
839
316
2,204
2,139
2,152
2,574
3,495
3,675
77
% O U TSTA N D IN G
OF AM O UNT IS SU ED
.10
.08
.24
9 .81
9.99
9 .7 7
10.19
1 1 .4 0 '
14.15
16.61
18.00
19.39
20.47
20.47
21.01
22.55
23.62
24.34
. 25.03
26.04
28.01
28.86
30.95
33.65 ■
35 .6 4
39.59
39.56
40.17
42.40
4 3 .14 44.09
47.19
53.98
63.80
81.41
19.59
186,541
136,685
49,856
26.73
5,485
8,725
3,919
2,852
1,566
5,873
28.55
67.31
Total Series H
‘ 14,210
6,771
7,439
52.35
Total Series E and H
200,752
143,456
57,295
28.54
38,277
200,752
239,029
38,240
143,456
181,697
37
57,295
57,333
.10
28.54
23.99
Total Series E
Series H (1952 thru May, 19591-2/
H (June, 1959 thru 1972)
( Total matured
All Rerips < T nt.al lmmatpred
( Grand Total
in
clu
d
e
sa c c r u e d d i s c o u n t ,
[C
u
rre
n
tr e d e m p t i o n v a lu e ,
M
to p tio n o f o w n e r b o n d s m a y
b e h e l d a n d w i l l e a r n i n t e r e s t fo r a d d i t i o n a l p e r i o d s a f t e r o r i g i n a l m a t u r i t y d a t e s .
Form PD 3812 (Rev. Feb. 1972) —Dept, of the Treasury «■. Bureau of the Public Debt
Department
WASHINGTON, d M 20220
of
theTREASURY
P]
TELEPHONE W04-2Q41
)/
F O R IM M E D IA T E R E L E A S E
Decem ber 13,
1972
T R E A S U R Y A N N O U N C E S C O L L A P S IB L E B A B Y S T R O L L E R S
F R O M J A P A N A R E B E IN G S O L D A T L E S S TH A N F A IR V A L U E
A d e c is io n t h a t c o ll a p s ib l e b a b y s t r o l l e r s fro m J a p a n
a re b e in g , o r a re l i k e l y t o b e , s o ld a t le s s th a n f a i r
v a lu e w i t h i n t h e m e a n in g o f t h e A n t id u m p in g A c t , 1 9 2 1 ,
a s am ended, w as announced to d a y by A s s is t a n t S e c re ta ry o f
th e T re a su ry E u ge n e T . R o s s id e s .
The p a r t ic u la r s t r o lle r s
in v o lv e d a r e lig h t w e ig h t a n d d e s ig n e d t o be fo ld e d an d
c a r r i e d o n t h e a rm i n t h e sam e m a n n e r a s a n u m b r e lla w h e n
n o t in u se .
N o t ic e o f th e d e t e r m in a t io n w i l l be p u b lis h e d
i n t h e F e d e r a l R e g i s t e r o f D e c e m b e r 1 4 , .1 9 7 2 ,
T h e c a s e w i l l now b e r e f e r r e d t o t h e T a r i f f C o m m is s io n
f o r a d e t e r m in a t io n a s t o w h e t h e r a n A m e r ic a n i n d u s t r y i s
b e in g , o r i s l i k e l y to b e , in ju r e d .
In th e e v e n t o f an
a f f i r m a t i v e d e t e r m i n a t i o n , d u m p in g d u t i e s w i l l b e a s s e s s e d
o n a l l e n t r ie s o f t h e s e c o ll a p s i b l e b a b y s t r o l l e r s fro m
J a p a n w h ic h h a v e n o t b e e n a p p r a i s e d a n d o n w h ic h d u m p in g
m a r g in s e x is t .
A n o t ic e o f "W it h h o ld in g o f A p p r a is e m e n t " w a s is s u e d
o n S e p te m b e r 2 1 , 1 9 7 2 , w h ic h s t a t e d t h a t t h e r e w a s r e a s o n a b le
c a u se to b e lie v e o r s u s p e c t t h a t th e re a re s a le s a t le s s
th a n f a i r v a lu e .
P u rsu a n t to t h a t n o t ic e , in t e r e s t e d p a r t ie s
w e re g iv e n a n o p p o r t u n it y t o p r e s e n t o r a l a n d w r it t e n v ie w s
p r io r to f in a l T re a su ry a c t io n .
1972,
Japan
D u r in g th e p e r io d o f J a n u a ry 1 , 1 9 7 1 , th r o u g h A u g u s t 3 1 ,
im p o r t s o f t h e s e c o ll a p s i b l e b a b y s t r o l l e r s fro m
a m o u n te d t o a p p r o x im a t e ly $ 1 5 4 ,0 0 0 .
# # #
F O R IM M E D IA T E
RELEASE
Decem ber 13,
1972
T h e T r e a s u r y D e p a r t m e n t t o d a y im p le m e n t e d a c o m p u t e r b a s e d
T r e a s u r y E n fo r c e m e n t C o m m u n ic a t io n S y s t e m (T E C S ) w h ic h l i n k s
n a t io n w id e t h e T r e a s u r y la w e n f o r c e m e n t f u n c t i o n s o f t h e C u s t o m s
B u re a u , A lc o h o l, T o b a c c o a n d F ir e a r m s B u re a u , S e c r e t S e r v ic e ,
an d th e In t e llig e n c e D iv is io n an d O f f ic e o f In s p e c t io n o f th e
In t e r n a l R e ve n u e S e r v ic e .
T h e s y s t e m , l i m i t e d t o c r i m i n a l la w e n f o r c e m e n t o p e r a t i o n s ,
w i l l e n h an ce o p e r a t io n a l e ff e c t iv e n e s s , e lim in a t e d u p lic a t io n o f
r e c o r d s an d fr a g m e n t a t io n o f e f f o r t .
T E C S w i l l a ls o p r o v id e
in f o r m a t io n fr o m t h e N a t i o n a l C r im e In f o r m a t io n C e n t e r S y s t e m ,
o p e r a t e d b y t h e F B I, e n a b l i n g T r e a s u r y la w e n f o r c e m e n t p e r s o n n e l
a u t h o r iz e d to u se th e sy ste m a c c e s s t o r e c o r d s on w a n te d p e r s o n s
o ffe n d e r c r im in a l h is t o r y an d id e n t if ia b le s t o le n p r o p e r ty .
FOR IMMEDIATE RELEASE
December 14,1972
Secretary of the Treasury George P. Shultz today
accepted with regret the resignation of Edward J. Gannon
executive assistant to Deputy Secretary Charls E. Walker.
In a letter to Mr. Gannon, Secretary Shultz praised
him for his direct contribution to the President's
minority bank deposit program, his assistance on student
loan programs and in his work as coordinator of financial
and taxation functions in connection with Hurricane
Agnes.
Secretary Shultz said, "I know of your desire to
return to private life at this time and to associate
yourself in the consulting business with Dr. Walker.
You do so with the warmest wishes and high respect of
your many friends in the Administration."
2
Edward J. Gannon, executive assistant to the Deputy
Secretary of the Treasury, joined the Treasury Department in
1969.
Prior to his Treasury appointment he served for eight
years as Deputy Manager of the American Bankers Association,
and for four years before that as a senior editorial
associate and supervisor of the Public Relations Department
of The Chase Manhattan Bank.
Born in Crafton, Pennsylvania, (suburb of Pittsburgh)
on August 6, 1931, he attended Crafton High School. He is
an alumnus of Slippery Rock College where he was admitted
to Kappa Delta Pi, the national honorary education
fraternity. He later did graduate work in English at
New York University.
Mr. Gannon attended the Naval Officer Candidate
School in Newport, Rhode Island, and served in Norfolk,
Virginia, and later as Navy Press Officer in New York City.
Before joining the Treasury he was a member of the
Advisory Board of the National Urban League's Summer
Fellowship Program, a member of the Public Information
Committee of the Joint Council on Economic Education, and
a member of the Government Task Force on Student Loans.
Mr. Gannon is married to the former Susan Catherine
Gannon (correct) of Wellesley Hills, Massachusetts. They
have four children Stacey 13, Gretchen 11, Stephanie 10 and
David 7.
The Gannons reside in Bethesda, Maryland.
December 6, 1972
Dear Mr. Secretary:
Please accept my resignation as Executive
Assistant to the Deputy Secretary, effective
at your pleasure. Although I would like to
depart as seon as feasible, I will certainly
do everything possible to make the transition
smooth and complete.
It has been both a pleasure and an honor
to serve the Nixon Administration, the Treasury,
you, and your predecessors. Even though ray job
kas been pretty much behind the scenes, I have
received tremendous personal satisfaction out
of administering the minority bank deposit pro
gram, helping keep the student loan program out
of too much trouble and other general adminis
trative duties for the Deputy Secretary.
As you know, I plan to join Charis E.
Walker in establishing a consulting firm here
in Washington. If there is ever an occasion
where my services could be of some benefit to
the Treasury or the Administration, I will be
available.
Sincerely,
Edward J. Gannon (signed)
Edward J. Gannon
Executive Assistant to the
Deputy Secretary
The Honorable
George P. Shultz
Secretary of the Treasury
Washington, D.C. 20220
- 4 THE SECRETARY OF THE TREASURY
W ASH IN GTO N
20220
Decem ber 12,
1972
¿y
Dear Ed:
I a c c e p t y o u r r e s ig n a t io n , e ffe c t iv e a t a d a te y e t
t o b e d e t e r m in e d , w it h r e lu c t a n c e a n d r e g r e t .
In e f f e c t iv e ly s e r v in g th e T re a su ry u n d e r th re e
S e c r e t a r ie s — D a v id K e n n e d y , J o h n C o n n a lly , an d m y s e lf
y o u h a v e c o n t r ib u t e d to th e s u c c e s s o f th e f i r s t f o u r
y e a r s o f th e N ix o n A d m in is t r a t io n a n d t o th e p u b lic
in te r e s t .
To a c o n s id e r a b le e x te n t t h is c o n t r ib u t io n w as
in y o u r a s s is t a n c e to th e D e p u ty S e c r e t a r y , b u t I a ls o
kn o w o f y o u r u n iq u e c o n t r i b u t i o n s t h a t w e re m ad e m o re
d ir e c t ly .
One su ch in s t a n c e w as th e h ig h ly s u c c e s s f u l p ro g ra m
o f P r e s id e n t N ix o n t o b o ls t e r m in o r it y e n t e r p r is e b y
in c r e a s in g d e p o s it s in m in o r it y b a n k s.
S t i l l a n o th e r w as
i n t h e p ro m p t a n d e f f e c t i v e m a n n e r i n w h ic h y o u c o o r d in a t e d
F e d e r a l f i n a n c ia l a c t io n s , in c lu d in g d is b u r s e m e n t a n d
t a x a t io n f u n c t io n s , i n c o n n e c t io n w it h n a t u r a l d i s a s t e r s
su c h a s in th e a fte r m a th o f H u r r ic a n e A g n e s .
T h is w as a n
im p r e s s iv e jo b a n d I know y o u w o rk e d o n i t w it h g r e a t e n e r g y
and e ffe c t iv e n e s s .
S t i l l a t h ir d in s ta n c e w as in y o u r s t r o n g an d s u c c e s s
f u l w o rk in h e lp in g t o b o ls t e r th e g u a r a n te e d s t u d e n t lo a n
p ro gra m — f i r s t in h e lp in g to ke e p th e p ro gra m g o in g s t r o n g
l a s t su m m e r, a n d s e c o n d i n w o r k in g e f f e c t i v e l y w it h o t h e r
G o v e rn m e n t a g e n c ie s t o im p r o v e t h e p r o g r a m i n t h e f u t u r e .
I know o f y o u r d e s ir e t o
tim e , a n d t o a s s o c i a t e y o u r s e
w it h D r . W a lk e r .
You do so w
h ig h r e s p e c t o f y o u r m any f r ie
r e tu r n to p r iv a t e l i f e a t t h is
lf in th e c o n s u lt in g b u s in e s s
it h th e w a rm e st b e s t w is h e s a n d
n d s in th e A d m in is t r a t io n .
S in c e r e ly y o u r s ,
G e o rge P . S h u lt z
M r. E d w ard J . G an n on
E x e c u t iv e A s s i s t a n t t o th e
D e p u ty S e c r e t a r y
U .S . T re a su ry D e p a rtm e n t
W a s h in g t o n , D .C .
20220
FOR IMMEDIATE RELEASE
December 14, 1972
TREASURY ANNOUNCES FINANCING PLANS
The Treasury will sell at auction $2.0 billion of
1/
5-1/&X notes maturing on December 31, 1974.
The auction will be held on Wednesday, December 20.
The payment date for the notes will be Thursday, December 28.
Commercial banks may make payment for their own and their
customers’ accepted tenders by credit to Treasury Tax and
Loan Accounts.
The details of this offering are being re
leased separately.
This sale is a part of the program of issuing 2-year
notes maturing at quarterly intervals that the Treasury
announced in October.
Department
oftheTREASURY )
WASHINGTON, O.C. 2Ô220
TELEPHONE WQ4-2041
FOR IMMEDIATE RELEASE
TREASURY TO AUCTION $2.0 BILLION OF NEW NOTES
The Treasury will auction $2.0 billion, or thereabouts, of 2-year Treasury Notes
under competitive and noncompetitive bidding.
The notes will be designated 5-7/8$
Treasury Notes of Series F-1974, dated December 28, 1972, due December 31, 1974
(CUSIP No. 912827 CV2).
The notes will be issued in registered and bearer form in denominations of .
$1,000, $5,000, $10,000, $100,000 and $1,000,000.
Interest will be payable on June 30
and December 31 until maturity.
Tenders for the notes will be received up to 1:30 p.m., Eastern Standard time,
Wednesday, December 20, 1972, at any Federal Reserve Bank or Branch and at the Office
of the Treasurer of the United States, Securities Division, Washington, D. C. 20220;
provided, however, that noncompetitive tenders will be considered timely received if
they are mailed to any such agency under a postmark no later than Tuesday, December 19.
Each tender must be in the amount of $1,000 or a multiple thereof, and must state
the price offered, if it is a competitive tender, or the term "noncompetitive” , if it
is a noncompetitive tender.
The price on competitive tenders must be expressed on the
basis of 100, with two decimals, e.g., 100.00.
not be accepted.
Fractions may not be used.
Tenders at a price less than 99.51 will
The notation "TENDER FOR TREASURY NOTES"
should be printed at the bottom of the envelope in which the tender is submitted.
Public announcement will be made of the amount and price range of accepted tenders
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.
Sub
ject to these reservations-noncompetitive tenders for $200,000 or less will be accepted
in full at the average price (in two decimals) of accepted competitive tenders.
price may be 100.00, or more or less than 100.00.
(OVER)
This
-
2-
Commercial banks, which for this purpose are defined as banks accepting demand
deposits, may submit tenders for account of customers provided the names of the cus
tomers are set forth in such tenders.
Others than commercial banks will not be per
mitted to submit tenders except for their own account.
Tenders will be received without deposit from commercial and other banks for theim
own account, Federally-insured savings and loan associations, States, political sub
divisions or instrumentalities thereof, public pension and retirement and other public!
funds, international organizations in which the United States holds membership, foreigr!
central banks and foreign States, dealers who make primary markets in Government se
curities and report daily to the Federal Reserve Bank of New York their positions with!
respect to Government securities and borrowings thereon, and Government accounts.
Tenders from others must be accompanied by payment of 5 percent of the face amount of I
notes applied for.
Payment for accepted tenders must be completed on or before Thursday, December 28,1
1972, at the Federal Reserve Bank or Branch or at the Office of the Treasurer of the
United States in cash or other funds immediately available to the Treasury by that date!
Any qualified depositary will be permitted to make settlement by credit in its Treasurj/i
tax and loan account for the amount of the notes allotted to it for itself and its cus-l
tomers.
Where full payment is not completed in funds available by the payment date, the
allotment will be canceled and the deposit with the tender up to 5 percent of the
amount of notes allotted will be subject to forfeiture to the United States.
The Treasury will construe as timely payment any check drawn to the order of the I
Federal Reserve Bank or the Treasurer of the United States that is received at such
bank or office by Tuesday, December 26, 1972, provided the check is drawn on a bank
in the Federal Reserve District of the bank or office to which the tender is submitted!
Other checks will constitute payment only if they are fully and finally collected by
the payment date Thursday, December 28, 1972.
Checks not so collected will subject the!
investor’s deposit to forfeiture as set forth in the preceding paragraph.
A check
payable other than at a Federal Reserve Bank received on the payment date will not
constitute immediately available funds on that date.
Commercial banks are prohibited from making unsecured loans, or loans collateral-!
ized in whole or in part by the notes bid for, to cover the deposits required to be
paid when tenders are entered, and they will be required to make the usual certifica
tion to that effect.
Other lenders are requested to refrain from making such loans.
All bidders are required to agree not to purchase or to sell, or to make any
agreements with respect to the purchase or sale or other disposition of the notes bid I
for under this offering at a specific rate or price, until after 1:30 p.m., Eastern
Standard time, Wednesday, December 20, 1972.
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 $4,300,000,000, or thereabouts, for
cash and in exchange for Treasury bills maturing December 28, 1972, in the amount
of $4,100,030,000
as follows:
91 -day bills (to maturity date) to be issued December 28, 1972, in the amount
of $2,400,000,000, or thereabouts, representing an additional amount of bills
dated September 28, 1972,and to mature
March 29, 1973
originally issued in the amount of $1,800,615,000,
(CUSIP No. 912793 QMl)
the additional and original
bills to be freely interchangeable.
182-day bills, for $1,900,000,000, or thereabouts, to be dated December 28, 1972,
and to mature
June 28, 1973
(CUSIP No. 912793
QZ2 ),
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 $10,000, $15,000, $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 clos
ing hour, one-thirty p.m., Eastern Standard time, Friday, December 22, 1972.
Tenders will not be received at the Treasury Department, Washington.
must be for a minimum of $10,000.
$5,000.
Each tender
Tenders over $10,000 must be in multiples of
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.
may not be used.
Fractions
It is urged that tenders be made on the printed forms and for
warded 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.
2-
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.
Only those
submitting competitive 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 each
issue for $200,000 or less without stated price from any one bidder will be accepted
in full at the average price (in three decimals) of accepted competitive bids for
the respective issues.
Settlement for accepted tenders in accordance with the
bids must be made or completed at the Federal Reserve Bank on December 28, 1972,
in cash or other immediately available funds or in a like face amount of Treasury
bills maturing December 28, 1972.
treatment.
Cash and exchange tenders will receive equal
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.
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 considered to accrue
when the bills are sold, redeemed or otherwise disposed of, and the bills are ex
cluded from consideration as capital assets.
Accordingly, the owner of Treasury
bills (other than life insurance companies) issued hereunder must include in his
income tax return, as ordinary gain or loss, the difference between the price paid
for the 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.
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.
Department o f
IfHINGTON, O.C. 20220
thRY
TELEPHONE W04-2041
FOR IM M E D IA T E R E L E A S E
Decem ber 15,
1972
T R E A S U R Y A N N O U N C E S A C T IO N S
O N TW O IN V E S T IG A T IO N S U N D E R
T H E A N T ID U M P IN G A C T
Tw o a c t io n s u n d e r t h e A n t id u m p in g A c t , 1 9 2 1 , a s
am ended, w e re a n n o u n c e d to d a y b y A s s is t a n t S e c r e t a r y
o f th e T r e a s u r y E u ge n e T . R o s s id e s .
The f i r s t c a se in v o lv e s th e in it ia t io n o f an a n t i
d u m p in g i n v e s t i g a t i o n , a n d t h e s e c o n d i s a t e n t a t i v e d e t e r
m in a t io n o f s a le s a t n o t le s s th a n f a i r v a lu e .
B o th o f
th e se a c t io n s w i l l b e p u b lis h e d in th e F e d e r a l R e g is t e r
on S a t u r d a y , D e ce m b e r 1 6, 1 9 7 2 .
In th e f i r s t c a se , M r. R o s s id e s an n o u n ce d th e i n i t i a
t io n o f a n a n t id u m p in g i n v e s t i g a t i o n o n im p o r t s o f p o ly
m e r iz e d c h lo r o b u t a d ie n e fr o m J a p a n .
T h is p ro d u c t i s
c o m m o n ly c a l l e d p o l y c h l o r o p r e n e r u b b e r , a n d i s u s e d i n
th e m a n u fa c tu r e o f s y n t h e t ic r u b b e r p r o d u c t s .
The announce
m ent f o llo w s a su m m ary i n v e s t i g a t i o n c o n d u c te d b y th e
B u re a u o f C u s to m s a f t e r r e c e ip t o f a c o m p la in t a l l e g i n g t h a t
d u m p in g w a s t a k i n g p l a c e i n t h e U n i t e d S t a t e s .
D u r in g th e
p e r io d o f J a n u a r y t h r o u g h Se p te m b e r 1 9 7 2 , im p o r t s o f p o ly
m e r iz e d c h lo r o b u t a d ie n e fr o m J a p a n w e re v a lu e d a t a p p r o x i
m a t e ly $ 4 .7 m i l l i o n .
In th e se c o n d c a s e , T r e a s u r y is s u e d a t e n t a t iv e d e t e r
m in a t io n t h a t p e rm a n e n t m a g n e ts o f a ln ic o o r c e r a m ic m a t e r ia l
fro m J a p a n a r e n o t b e in g , n o r a r e l i k e l y t o b e , s o ld a t l e s s
t h a n f a i r v a l u e w i t h i n t h e m e a n in g o f t h e A n t id u m p in g A c t .
A ln ic o m a g n e ts c o n s is t o f m e ta l a llo y s , and a re u se d in a
la r g e n u m b e r o f a p p l ic a t io n s s u c h a s t e le p h o n e s , lo u d s p e a k e r s ,
and m o to rs.
C e r a m ic m a g n e ts h a v e g r e a t e r e l e c t r i c a l r e s i s t a n c e ,
a re l i g h t w e ig h t , a n d a r e u se d in e le c t r o m e c h a n ic a l
a p p lic a t io n s su ch a s g e n e ra to r r e la y s „ The in v e s t ig a t io n
r e v e a le d t h a t t h e p r i c e t o b u y e r s in t h e h om e m a r k e t w a s lo w e r
th a n th e p r ic e t o b u y e r s in th e U n it e d S t a t e s .
A p p r a is e m e n t
o f t h i s m e r c h a n d is e h a s n o t b e e n w it h h e ld .
D u r in g th e p e r io d
o f J a n u a r y th ro u g h J u n e 197 2, th e v a lu e o f th e s e p e rm a n e n t
(OVER)
H
-
2-
m a g n e ts im p o r te d fro m J a p a n in t o t h e U n it e d S t a t e s w a s
a p p r o x im a t e ly $ 1 .6 m illio n .
In t e r e s t e d p e r s o n s w i l l h a v e
an o p p o r t u n it y t o p r e s e n t t h e ir v ie w s c o n c e r n in g t h i s
d e c is io n b e fo r e th e T r e a s u r y ta k e s f i n a l a c t io n .
# # #
12-15-72
KENNETH W.’DAM
¿ASSISTANT TO THE. SECRETARY OF THE TREASURY)
'
(WHITE HOUSE STAFF)
Bom :
August 10, 1932
Marysville, Kansas
Education:
.B.S.
J.D.
University of Kansas 1954
University of Chicago Law School 1957 (First
in class; Managing Editor of the Law Review)
Government Experience:
Assistant Director (for national security and inter
national affairs), Office of Management and Budget,
1971 - present
Academic Experience:
University of Chicago, 1960-1971 (Professor of
Law, 1964-1971)
Visiting Professor, University of Freiburg i. Br.
(Germany 1964)..
Legal Experience:
Law Clerk,
1957-58
Associate,
Consultant
Masters,
Mr. Justice Whittaker, U.S. Supreme Court,
Cravath, Swaine & Moore, New York 1958-60
to Kirkland, Ellis, Hodson, Chaffetz &
Chicago, 1961-1971
Languages:
French and German (speaking, reading and writing);
Spanish (reading only).
Miscellaneous:
Rockefeller Foundation Fellowship (for study of supra
national organizations), 1966.
I
Elected to American Law Institute, 1968.
Books:
The GATT:
(Universit
2
Kenneth W. Dam
Articles
"Implementation of Import Quotas:
14 J. Law and Econ. 1- (1971).
"Consumer Protection:
(1971)
The Case of Oil/"
An Overview," Antitrust L. J.
"The Pricing of North Sea Gas in Britain," 13 J. Law
and Econ. 1 (1970) .
"Corporate Takeovers and the Antitrust Laws*"'
25 Bus. Lawyer 735 (1970); 39 Antitrust'!^«!.
(1970).
"Fortner Enterprises v. United States Steel: "Neither
a Borrower, nor a Lender Be,1 " 1969 Supreme Court
Rev. 1.
,
>. *
"Exclusive Distributionships in the United States and
the European Economic Community," in Ius Privatum
Gentium, Festschrift for Max Rheinstein, Vol. II,
p. 721 (1969). Reprinted i n — Antitrust L. J. —
(1971).
,;^Is the Colgate Doctrine Dead?"
772 (1968).
37 Antitrust L. J.
"Oil and Gas Licensing in the North Sea," 8 J. Law
and Econ. 51 (1965).
"The European Common Market in Agriculture," 67
Columbia L. Rev. 209 (1967)
*
^
’* ‘7
Trademarks, Price Discrimination and the Bureau of
Customs," 57 Trademark Reporter 14 (1967),
reprinted from 7 J. Law and Econ. 45 (1964).
Some International Constraints on Improved Export
Earnings of Developing Countries: Tariff Prefer
ences and the Cotton Textiles Agreement," in
Development: International Law and Economics 107
(Vol. II, Proceedings of the International Society,
Stanford School of Law, 1967).
»
The Economics and Law of Price Discrimination: Herein
of Three Regulatory Schemes," 31 U. of Chicago L. /
Rev. 1 (1963).
"Regional Economic Arrangements and the GATT: The
Legacy
of
a Misconception," 30 U.''of Chicago
T.
Dn«.
ilC
3
L.
Rev.
615
(1963)
December 15, 1972
THE WHITE HOUSE TODAY ISSUED* TH.E'FOLLOWING PRESS RELEASE:
. '
H
■ ■ ■ ?7
Secretary of the Treasury George P. Shultz
announced today that Kenneth W. Dam will be his
Deputy in his new White House role as Assistant to
the President.
Mr. Dam has been an Assistant Director
(for national security and international affairsl^in
the Office of Management and Budget since mid-1971.
Prior to joining OMB, Dam taught law at the
University of Chicago.
He received a B.S. degree in 1954 from the
University of Kansas and a law degree (J.D.) in 1957
from the University of Chicago.
From July 1957 to
%
July 1958 he was clerk to former Supreme Court Justice
Charles E. Whittaker.
Before joining the faculty of
the University of Chicago Law School in 1960, Mr. Dam
practiced law in New York City with the firm of Cravath,
/
Swaine and Moore.
While teaching law, he was consultant
to the Chicago law firm of Kirkland, Ellis, Hodson,
Chaffetz and Masters.
In 1964, Mr. Dam was a visiting
professor at the University of Freiburg, West Germany.
^Mr. Dam is the author of a number of books and
articles about international economics.
He is a member
of the American Bar Association, the New York State
Bar Association and the American Law Institute.
(
Department
WASHINGTON, D.C. 20220
oftheJREASURY
TELEPHONE W04-2041
FOR IMMEDIATE RELEASE
December 15, 1972
RICHARD V. ADAMS AWARDED TREASURY'S
EXCEPTIONAL SERVICE AWARD
Treasury Secretary George P. Shultz has presented
Richard V. Adams with Treasury's Exceptional Service Award.
The Exceptional Service Award is conferred by the Secretary
only on Treasury officials or employees who have distinguished
themselves and the Treasury by exceptional public service.
A gold medal award, the Exceptional Service Award is the
highest award which may be recommended to the Secretary.
Mr. Adams was specifically credited for his crucial
role in the formulation and evolution of policies and programs
designed to enhance the efficiency of the Government's overall
financing activities, including both the development and
implementation of new techniques in Treasury security offerings
and improved coordination of agency financing.
Mr. Adams has resigned as Special Assistant to the Secretary
for Debt Management, effective today, to become Senior
Vice-President, Chemical Bank, New York City. He will assume
his new post in January.
Prior to his appointment to the Treasury in May, 1971,
Mr. Adams was Vice-President of the National City Bank of
Cleveland, Cleveland, Ohio. He is married to the former
Avis M. Rossum of Minneapolis, Minnesota. The Adams' have
three children.
oOo
S -8 7
OFFICE OF REVENUE SHARING
WASHINGTON. D.C. 20220
FOR IMMEDIATE RELEASE
December 15,1972
REVENUE SHARING "MEMPHIS RULE"
The Treasury Department said today it has advised six state
governors of actions they must take under the so-called "Memphis
Rule" of the State and Local Fiscal Assistance Act of 1972,
commonly known as revenue sharing0
The six affected states are Alabama, Louisiana, North Carolina,
New York, Tennessee, and Nevada.
The "Memphis Rule" section of the Act provides a procedure to
deal with situations where a county government imposes a sales tax
in behalf of some of all of the local governments within the
county, and then shares part or all of these taxes with those local
governments. This rebate of county imposed taxes to local
governments must be returned to the local governments with no
strings attached in order to fall under the provisions applicable
to the "Memphis Rule." In these cases, the Governor of the State
is required to certify to the Secretary of the Treasury as to
those county and municipal governments affected by the Memphis
Rule. Treasury, accordingly, will make the appropriate revenue
allocation among those governments.
The effect of the imposition of this provision would be to
increase the General Tax Effort Factor of the local governments
involved and to decrease the taxes credited to the county
government for purposes of the revenue sharing formulas. The
Office of Revenue Sharing will make adjustments to the first
entitlement payments distributed last week in a subsequent payment
under this program. Hopefully, this adjustment can be made in the
January payment. The Office of Revenue Sharing has notified the
county governments involved which it has been able to identify that
their recent allocation may be materially reduced by the invocation
of the "Memphis Rule".
Attachment
oOo
f *' .**
*y A-
Department o f t h e jffl
OFFICE OF REVENUE SHARING
WASHINGTON. D.C. 20220
TELEPHONE W04-8711
/ 78 <>
December 15,1972
COUNTIES NOTIFIED OF THE ’’MEMPHIS RULE"
ALABAMA
Tuscaloosa
LOUISIANA
Ascension
Ratides
Jefferson Iberville
Saint Mary
West Baton Rouge
Terrebone
NEVADA
Clarke
Washoe
Lyon
NEW YORK
Albany
Broome
Cattaraugus
Cayuga
Chautaugua
Chemung
Clinton
Cortland
Erie
Fulton
Genesee
Jefferson
Monroe
Montgomery
Niagara
Onondaga
NEW YORK (CONT.)
Ontario
St. Lawrence
Tioga
Warren
NORTH CAROLINA
Buncombe
Cumberland
Dublin
Durham
Greene
Hertford
Jones
Lenoir
Madison
New Hanover
Onslow
Pemlico
Richmond
Tyrrell
Watauga
Clay
Jackson
Swain
Macon
Chowan
Pasquotank
Perquimans
Wayne
TENNESSEE
Bedford
Benton
Bledsoe
Blount
Bradley
Campbell
Cannon.
Carroll
TENNESSEE (CONT.)
Carter
Cheatham
Chester
Claiborne
Clay
Cocke
Coffee
Cumberland
DeKalb
Dickson
Dyer
Fayette
Franklin
Gibson
Giles
Grainger
Greene
Hamblen
Hancock
Hardeman
Hardin
Hawkins
Henderson
Henry
Hickman
Humphreys
Lake
Lauderdale
Lawrence
Lincoln
Loudon
McWinn
McNairy
Macon
Madison
Marion
Marshall
Maury
Meigs
Monroe
Obion
Overton
Perry
Polk
Putnam
Roane
Robertson
Rutherford
Sequatchie
Segier
Shelby
Smith
Stewart
Sullivan
Sumne r
Tipton
Trousdale
Unicoi
Washington
Weakley
Williamson
Wilson
KilpP«
Department o f
WASHINGTON. D.C. 20220
■àr
thefREASURY 1H
TELEPHONE W04-2041
g î. M
1
ATTENTION:
FINANCIAL EDITOR
December 15, 1972
FOR RELEASE 6:30 P.M.
RESULTS OF TREASURY'S WEEKLY BILL OFFERING
The Treasury Department announced that the tenders for two series of Treasury
bills, one series to be an additional issue of the bills dated September 21, 1972 , and
the other series to be dated December 21, 1972 , which were invited on
December 8, 1972,
were opened at the Federal Reserve Banks today.
Tenders were invited for $2,400,000,000,
or thereabouts, of 9 1 -day bills and for $1,900,000,000, or thereabouts, of
18^-day
bills. The details of the two series are as follows:
RANGE OF ACCEPTED
COMPETITIVE BIDS:
High
Low
Average
91 -day Treasury bills
maturing March 22, 1973
Approx. Equiv.
Price
Annual Rate
98.723
98.709
98.714
5.052$
5.107$
5.087$
1/
182 -day Treasury bills
maturing
June 21, 1973
Approx. Equiv.
Price
Annual Rate
97.346
97.316
97.322
5.250$
5.309$
5.297$
y
55$ of the amount of
91-day bills bid for at the low price was accepted
66$ of the amount of 182-day bills bid for at the low price was accepted
TOTAL TENDERS APPLIED FOR AND ACCEPTED BY FEDERAL RESERVE DISTRICTS:
District
Boston
New York
Philadelphia
Cleveland
Richmond
Atlanta
Chicago
St. Louis'
Minneapolis
Kansas City
Dallas
San Francisco
TOTALS
Applied For
$
2$,170,000
2,990,095,000
23,665,000
43,200,000
34,460,000
16,505,000
251,680,000
54,760,000
22,610,000
41,835,000
34,610,000
159,195,000
Accepted
$
13,170,000
1,921,595,000
18,665,000
43,200,000
13,310,000
16,505,000
162,430,000
38,760,000
19,710,000
33,385,000
13,610,000
106,295,000
Applied For
$
17,645,000
2,645,730,000
81,135,000
77,465,000
33,430,000
8,920,000
420,495,000
50,060,000
14,810,000
33,655,000
31,725,000
203,770,000
Accepted
W
3,645,000
1,410,650,000
19,435,000
44,765,000
8,430,000
8,720,000
241,585,000
32,410,000
10,130,000
16,975,000
8,045,000
96,090,000
$3,695,785,000
$2,400,635,000 a/
$3,618,840,000
$1,900,880,000 b/
]|/ Includes $160,945,000 noncompetitive tenders accepted at the average price of 98.714
Includes $102,895,000 noncompetitive tenders accepted at the average price of: 97.322
i/ These rates are on a bank discount basis. The equivalent coupon issue yields are
5.23$ for the 91 -day bills, and 5.52$ for the 182-day bills.
Department ofthe TREASU RY ,
OFFICE OF REVENUE SHARING
WASHINGTON; O.C. 20220
j|
TELEPHONE W04-8711
1
?
December 15,1972
FOR IMMEDIATE RELEASE
REVENUE SHARING "MEMPHIS RULE"
The Treasury Department said today it has advised six state
governors of actions they must take under the so-called "Memphis
Rule" of the State and Local Fiscal Assistance Act of 1972,
commonly known as revenue sharing0
The six affected states are Alabama, Louisiana, North Carolina,
New York, Tennessee, and Nevada.
The "Memphis Rule" section of the Act provides a procedure to
deal with situations where a county government imposes a sales tax
in behalf of some or all of the local governments within the
county, and then shares part or all of these taxes with those local
governments. This rebate of county imposed taxes to local
governments must be returned to the local governments with no
strings attached in order to fall under the provisions applicable
to the "Memphis Rule." In these cases, the Governor of the State
is required to certify to the Secretary of the Treasury as to
those county and municipal governments affected by the Memphis
Rule. Treasury, accordingly, will make the appropriate revenue
allocation among those governments.
The effect of the imposition of this provision would be to
increase the General Tax Effort Factor of the local governments
involved and to decrease the taxes credited to the county
government for purposes of the revenue sharing formulas. The
Office of Revenue Sharing will make adjustments to the first
entitlement payments distributed last week in a subsequent payment
under this program. Hopefully, this adjustment can be made in the
January payment. The Office of Revenue Sharing has notified the
county governments involved which it has been able to identify that
their recent allocation may be materially reduced by the invocation
of the "Memphis Rule".
Attachment
oOo
(OVER)
2
December 15,1972
C O U N T IE S N O T IF IE D O F T H E
NEW Y O R K
ALABAM A
O n t a r io
S t. Law re n ce
T io g a
W arre n
T u s c a lo o s a
L O U IS IA N A
A s c e n s io n
R a t id e s
J e ffe rso n
Ib e r v ille
S a in t M ary
W e st B a to n
T e rre b o n e
NEVADA
C la r k e
W ash o e
Lyon
NEW Y O R K
A lb a n y
B ro o m e
C a tta ra u gu s
Cayuga
C h a u ta u gu a
Chem ung
C lin t o n
C o r t la n d
E r ie
F u lt o n
G e n esee
J e ffe rso n
M on roe
M o n tgo m e ry
N ia g a r a
O nondaga
(C O N T .)
Rouge
N O R T H C A R O L IN A
Buncom be
C u m b e r la n d
D u b lin
D u rh am
G re e n e
H e rtfo rd
Jones
L e n o ir
M a d is o n
New H a n o v e r
O n s lo w
P e m lic o
R ic h m o n d
T y r r e ll
W a ta u g a
C la y
Jackson
S w a in
M acon
Chow an
P a sq u o ta n k
P e r q u im a n s
W ayne
TEN N ESSEE
B e d fo rd
B e n to n
B le d s o e
B lo u n t
B r a d le y
C a m p b e ll
Cannon
C a r r o ll
"M E M P H IS R U L E "
TEN N ESSEE
(C O N T .)
C a rte r
C h e a th a m
C h e ste r
C la ib o r n e
C la y
Cocke
C o ffe e
C u m b e r la n d
D e K a lb
D ic k s o n
Dyer
F a y e tte
F r a n k lin
G ib s o n
G ile s
G r a in g e r
G re e n e
H a m b le n
H ancock
H ard e m an
H a r d in
H a w k in s
H e n d e rso n
H e n ry
H ic k m a n
H u m p h re ys
Lake
L a u d e r d a le
Law ren ce
L in c o ln
Loudon
M c W in n
M c N a ir y
M acon
M a d is o n
M a r io n
M a r s h a ll
M au ry
M e ig s
M o n ro e
O b io n
O v e rto n
P e rry
P o lk
P u tn a m
Roane
R o b e rtso n
R u th e rfo rd
S e q u a t c h ie
S e g ie r
S h e lb y
S m it h
Ste w a rt
S u lliv a n
Sum ner
T ip t o n
T r o u s d a le
U n ic o i
W a s h in g t o n
W e a k le y
W illia m s o n
W ils o n
Department
WASHINGTON, DX. 20220
oftheTREASURY
TELEPHONE W04-2041
December 15, 1972
FOR IMMEDIATE RELEASE
TREASURY ANNOUNCES CONTEMPLATED OFFERING
OF LONG-TERM TREASURY BONDS
The Treasury announced today that it contemplates
selling an issue of long-term bonds in early January»
The maturity range being considered is 20 to 30 years.
The amount will be between $500 and $750 million.
The Treasury said that it would make a further
announcement of its intentions later.
DepartmentoftheTREASURY
WASHINGTON, D.C, 20220
TEUPH0NE W04-2041
FOR IMMEDIATE RELEASE
December 18, 1972
TREASURY'S MONTHLY BILL OFFERING
The Treasury Department, by this public notice, invites tenders for
$1,800,000,000, or thereabouts, of 352-day Treasury bills for cash and in exchange
for Treasury bills maturing
December 31, 1972
The bills of this series will be dated
December 18, 1973
, in the amount of $1,701,030,000.
December 31, 1972
, and will mature
(CUSIP No. 912793 RF5).
The bills will be issued on a discount basis under competitive and noncom
petitive 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 $10,000, $15,000, $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, Tuesday, December 26, 1972.
Tenders will not be received at the Treasury Department, Washington.
must be for a minimum of $10,000.
$5,000.
Each tender
Tenders over $10,000 must be in multiples of
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.
not be used.
Fractions may
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 w U l 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.
(OVER)
-
2-
Immediately after the closing hour, tenders will he 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.
Only those submitting
competitive tenders will be advised of the acceptance or rejection thereof.
The
Secretary of the Treasury expressly reserves the right to accept or reject any or
all tenders, in whole or in part, and his action in any such respect shall be final.
Subject to these reservations, noncompetitive tenders for $200,000 or less without
stated price from any one bidder will be accepted in full at the average price (in
three decimals) of accepted competitive bids.
Settlement for accepted tenders in
accordance with the bids must be made or completed at the Federal Reserve Bank on
January 2, 1973
, in cash or other immediately available funds or in a like
face amount of Treasury bills maturing
tenders will receive equal treatment.
December 31, 1972
.
Cash and exchange
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.
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 considered to accrue when the
bills are sold, redeemed or otherwise disposed of, and the bills are excluded from
consideration as capital assets.
Accordingly, the owner of Treasury bills (other than
life insurance companies) issued hereunder must include in his income tax return, as
ordinary gain or loss, the difference between the price paid for the 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.
Treasury Department Circular Wo. 418 (current revision) and this notice, pre
scribe the terms of the Treasury bills and govern the conditions of their issue.
Copies of the circular may be obtained from any Federal Reserve Bank or Branch.
FOR IMMEDIATE RELEASE
December 19, 1972
TREASURY PROPOSES NEW RULE PROTECTING
FREEDOM OF THE SEAS MAXIM IN INCOME TAX
TREATMENT OF CONTINENTAL SHELF AREAS
The Treasury Department today has revised a proposed
regulation on the taxation of income connected with mineral
activities on the continental shelf to specifically recognize
the principle of "freedom of the seas" and to thereby safe
guard the rights under international law of the United States
and foreign countries.
The new proposed regulation replaces a regulation
originally proposed March 2, 1971, issued under Section 638
of the Internal Revenue Code which was added to the Code at
Treasury's request by the Tax Reform Act of 1969.
The new Code section generally provides that income
derived from mineral exploration or development operations
on the U.S. shelf will be considered income from sources with
in the United States. Similarly, the continental shelf areas
adjacent to foreign countries which exercise taxing juris
diction over the areas will be treated for U.S. tax purposes
as part of those countries.
The regulation proposed today included the statement:
"Nothing in this section shall prejudice or affect the
freedoms of the high seas and other rights under international
law, or the exercise of such freedoms and rights by the United
States or foreign countries." The language was developed
in consultation with the State Department. The new regulation
reflects technical comments made by interested persons to
the March 2, 1971 proposal.
The Treasury proposal will appear in the Federal Register
of December 20, 1972. Before adoption of the new proposed
regulation, Treasury will consider comments or suggestions which
are submitted in writing to the Commissioner of Internal Revenue,
Attention: CC:LR:T, Washington, D.C. 20224, within 30 days.
oOo
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Department
oftheJREA$URY (f
WASHINGTON,
m i m £D.C.
* '20220
in m n
TÉLÉPHONÉ W04-2041
Vi
F O R IM M E D IA T E
RELEASE
1
Decem ber 19,
1972
T H O M A S D . W IL L E T T
A P P O IN T E D D E P U T Y A S S IS T A N T S E C R E T A R Y F O R R E S E A R C H
T re asu ry S e c re ta ry G
th e a p p o in t m e n t o f T h o m as
e ffe c t iv e Decem ber 18, a s
R e se a rc h in th e O ffic e o f
In t e r n a t io n a l A f f a ir s .
e o rge P . S h u lt z to d a y an n o u n ce d
D . W i l l e t t o f R ic h m o n d , V i r g i n i a ,
D e p u ty A s s is t a n t S e c r e ta r y fo r
th e A s s is t a n t S e c r e ta r y fo r
M r. W ill e t t , 30, com e s t o th e T r e a s u r y fro m C o r n e ll
U n i v e r s i t y , w h e re h e h a s b e e n P r o f e s s o r o f E c o n o m ic s a n d
P u b lic A f f a ir s .
H e s u c c e e d s W ils o n S c h m id t w ho r e t u r n e d
t h i s f a l l t o h i s p o s t a s C h a ir m a n o f t h e E c o n o m ic s D e p a r t m e n t
a t V ir g in ia P o ly t e c h n ic In s t it u t e an d S t a t e U n iv e r s it y .
B e fo r e g o in g
fa c u lt y a t H a rv a rd
F le t c h e r S c h o o l o f
V i r g i n i a w h e re he
t o C o r n e ll, M r. W i l l e t t w a s o n t h e e c o n o m ic s
U n iv e r s it y .
He h a s a ls o ta u g h t a t th e
Law a n d D ip lo m a c y a n d a t th e U n i v e r s i t y o f
r e c e iv e d h is P h .D . in 1 9 6 7 .
M r. W ille t t i s th e a u th o r o f s e v e r a l b o o k s an d s t u d ie s
o n i n t e r n a t i o n a l m o n e ta r y e c o n o m ic s a n d b a la n c e o f p a y m e n ts
p o l i c y a n d o f m o re th a n f i f t y p a p e r s o n v a r io u s t o p ic s in
e c o n o m ic t h e o r y a n d p o l i c y .
He w as a m em ber o f P r e s id e n t E l e c t N i x o n 's t a s k f o r c e o n b a la n c e o f p a y m e n ts p o l i c y in
19 6 8 a n d s e r v e d a s a S e n io r S t a f f E c o n o m is t w it h th e C o u n c il
o f E c o n o m ic A d v i s e r s d u r in g 1 9 6 9 a n d 1 9 7 0 .
S in c e t h a t t im e
he h a s been a p a r t -t im e s e n io r c o n s u lt a n t to h is p re d e c e s so r
a t T re asu ry.
A n a t iv e o f V i r g i n i a , M r. W i l l e t t g r a d u a te d fro m th e
C o lle g e o f W illia m an d M a ry in 1 96 4.
He i s m a r r ie d t o th e
f o r m e r J e a n M a r t i n o f R ic h m o n d .
T h e W i l l e t t ' s h a v e tw o
c h ild r e n .
oOo
S- 88
«R
Department
làifrrnu n n nnnon
WASHINGTON,
D C, 20220
'I
nr
as
oftheTREASURY I
TÉLÉPHONÉ W04 2041
T C i C D U f t m c u u n v i onjii
UA-
3?
FOR IMMEDIATE RELEASE
/ 789
December 20, 1972
EMERGENCY LOAN GUARANTEE BOARD
The Emergency Loan Guarantee Board today approved
the request of Lockheed Aircraft Corporation and its
lending banks for permission for the company to borrow
from the banks an additional $20 million under the
Government guarantee, which, when drawn down, will bring
the total permitted borrowings under Government
guarantee to $150 million»
Lockheed is authorized under
the terms of its agreement with the Emergency Loan
Guarantee Board to borrow from the lending banks up
to $250 million under Government guarantee»
The Board
also announced that from its inception on August 9, 1971,
through November 30, 1972, it had received fees of
$3,192,355»86 from Lockheed under the Government
guarantee commitment»
oOo
S-89
m
M
O f
Department
WASHINGTON, D.C. 20220
oftheTREASURY
TELEPHONE VWH-2041
ip ®
ATTENTION: FINANCIAL EDITOR
FOR RELEASE AT 6:30 P.M.
December 20., 1972
RESULTS OF TREASURY NOTE AUCTION
The Treasury announced that it has accepted $2.0 billion of the $5.6
billion of tenders received for its new 5-7/8$ 2-year notes auctioned
today. The range of accepted competitive bids was as follows:
Price
Approximate Yield
100.29 U
High
100.05
Low
100.09
Average
l/Excepting one tender of $300,000.
5.72$
5.85$
5.83 $
The $2.0 billion of accepted tenders includes 83$ of the amount of notes
bid for at the low price, and $0.5 billion of noncompetitive tenders accepted
at the average price.
Department o f theJR E A SU R Y
Washington, o c. 20220
telephone
W04-2041
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 $4,300,000,000, or thereabouts, for
cash and in exchange for Treasury bills maturing
of $4,099,380,000
January 4, 1973,
in the amount
as follows:
9 1 -day bills (to maturity date) to be issued
January 4, 1973,
in the amount
of $2,400,000,000, or thereabouts, representing an additional amount of bills
dated October 5, 1972,
and to mature
April 5, 1973
originally issued in the amount of $1,800,475,000,
(CUSIP No. 912793 QN9) ,
the additional and original
bills to be freely interchangeable.
1 8 2 -day bills, for $1,900,000,000, or thereabouts, to be dated January 4, 1973,
and to mature
July 5, 1973
(CUSIP No. 912793 RJ7 ).
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 $10,000, $15,000, $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 clos
ing hour, one-thirty p.m., Eastern Standard time, Friday, December 29, 1972.
Tenders will not be received at the Treasury Department, Washington.
must be for a minimum of $10,000.
$5,000.
Each tender
Tenders over $10,0'00 must be in multiples of
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.
may not be used.
Fractions
It is urged that tenders be made on the printed forms and for
warded 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
(OVER)
-
accoimt.
2-
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.
Only those
submitting competitive 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 each
issue for $200,000 or less without stated price from any one bidder will be accepted
in full at the average price (in three decimals) of accepted competitive bids for
the respective issues.
Settlement for accepted tenders in accordance with the
bids must be made or completed at the Federal Reserve Bank on
January 4, 1973,
in cash or other immediately available funds or in a like face amount of Treasury
bills maturing
treatment.
January 4, 1973.
Cash and exchange tenders will receive equal
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.
Under Sections 454(b) and 122l(5) of the Internal Revenue Code of 1954 the
amount of discount at which bills issued hereunder are sold is considered to accrue
when the bills are sold, redeemed or otherwise disposed of, and the bills are ex
cluded from consideration as capital assets.
Accordingly, the owner of Treasury
bills (other than life insurance companies) issued hereunder must include in his
income tax return, as ordinary gain or loss, the difference between the price paid
for the 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.
Treasury Department Circular Wo. 418 (current revision) and this notice,
prescribe the terms of the Treasury bills and govern the conditions of their issue, j
Copies of the circular may be obtained from any Federal Reserve Bank or Branch.
FOR IMMEDIATE RELEASE
December 26, 1972
REQUIREMENT FOR INSCRIBING SOCIAL SECURITY
ACCOUNT NUMBERS ON SERIES E SAVINGS BONDS
The T reasu ry will req u ire issuing agents to include the social security
account number of the owner or first-n am ed coowner on all Series E savings bonds
with issue dates of October 1, 1973, or la ter.
This requirem ent w ill make possible a m ore efficient record-keeping system .
The present E bond reg istratio n reco rd s, which now extend to some 3.4 billion bonds
and are expanding at a rateof 130 million item s a year, are based on the ow ners’
nam es and ad d resses. The sim ilarity of nam es and m ultiple changes of address
often ham per the identification of bond holdings and the expeditious processing of
requests for inform ation or claim s for the replacem ent of lost, stolen or destroyed
bonds.
A system of reco rd s based on account num bers will be m ore p recise and,
as a resu lt, owners will benefit from m ore tim ely and accurate servicing of th e ir
inquiries and claim s. The record-keeping system will also make less cum bersome
the reporting to the Internal Revenue Service of in te re st paid when bonds are
redeem ed.
The requirem ent for obtaining the social security number of the owner will
bring S eries E savings bonds into line with the requirem ents now in effect for savings
accounts with financial institutions and all other re g iste re d bonds — those issued by
the Government as well as by all other is s u e rs .
Advance notice of the requirem ent is being made to give sufficient tim e to
issuing agents to make th is change in an orderly fashion. T here are m ore than
18, 500 banks and other financial institutions and companies qualified to issue
Series E savings bonds. While many of the agents handling payroll accounts now
include social security num bers as p art of the bond inscription, a number of them
do not. Those who do not are urged to convert as expeditiously as possible.
Financial institutions issuing bonds on over -the-counter sales may begin im m ediately
to inscribe the num bers on these bonds.
oOo
S-91
RESULTS OF TREASURY'S
WEEKLY BILL OFFERING
The Treasury Department announced that the tenders for two series of Treasury
bills, one series to be an additional issue of the bills dated September 28, 1972 , and
the other series to be dated December 28, 1972 , which were invited on December 15, 1972
were opened at the Federal Reserve Banks today. Tenders were invited for $2,400,000,000,
or thereabouts, of 91-day bills and for $1,900,000,000, or thereabouts, of
182-day
bills. The details of the two series are as follows:
RANGE OF ACCEPTED
COMPETITIVE BIDS:
High
Low
Average
91-day Treasury bills
maturing March 29, 1973
Approx. Equiv.
Annual Rate
Price
98.712
98.701
98.708
5.095$
5.139$
5.111$
1/
182-day Treasury bills
maturing June 28, 1973
Approx. Equiv.
Annual Rate
Price
97.332 a/
97.309
97.314
5.277$
5.323$
5.313$
1/
a/ Excepting 1 tender of $140,000.
20$ of the amount of 91-day bills bid for at the low price was accepted
96$ of the amount of 182-day bills bid for at the low price was accepted
TOTAL TENDERS APPLIED FOR AND ACCEPTED BY FEDERAL RESERVE DISTRICTS:
District
Boston
New York
Philadelphia
Cleveland
Ri chmond
Atlanta
Chicago
St. Louis'
Minneapolis
Kansas City
Dallas
San Francisco
TOTALS
Applied For
$
24,475,000
2,924,610,000
14,710,000
55,480,000
53,670,000
11,405,000
249,110,000
65,395,000
27,455,000
35,990,000
118,870,000
.116,830,000
Accepted
$
9,225,000
1,971,025,000
10,870,000
24,995,000
28,670,000
10,485,000
114,290,000
41,920,000
8,375,000
22,175,000
95,270,000
63,030,000
Applied For
$
42,310,000
2,683,485,000
24,590,000
42,950,000
40,330,000
14,795,000
434,115,000
47,625,000
15,735,000
31,845,000
31,900,000
133,660,000
$3,698,000,000
$2,400,330,000
b/ $3,543,340,000
Accepted
$
2,210,000
1,565,170,000
3,535,000
7,785,000
5,330,000
11,505,000
226,560,000
27,375,000
4,535,000
14,835,000
6,670,000
24,860,000
$1,900,370,000 sJ
b/ Includes $177,£50,000
noncompetitive tenders accepted at the average price’of 98.708
c/ Includes $101,810,000 noncompetitive tenders accepted at the average price of 97.314
y These rates are on a bank discount basis. The equivalent coupon issue yields are
5.25$ for the 91-day bills, and 5.54$ for the 182-day bills.
Departmentof
WASHINGTON. D.C. 20220
iheJR£ÆSl//?K
TELEPHONE W04-2041
FOR IMMEDIATE RELEASE
DECEMBER 26, 1972
NEW U.S. CUSTOMS PROCEDURE
SPEEDS PAYMENT OF DRAWBACK CLAIMS
U.S. Customs regulations have been amended to permit
prompt payment of drawback claims, the Treasury Department
announced today.
Under a new procedure, a claimant who requests accel
erated payment may expect to receive a refund of 90 percent
of his claim within two months, with the difference either
refunded or due when the claim is liquidated.
Drawback is a refund of 99 percent of duties paid on
imported merchandise which is subsequently used to produce
a product for export. In the past, drawback claimants in
some instances have had to wait a year or longer until their
claims were liquidated before receiving payment. The new
procedure should help to alleviate a shortage of working
capital which has sometimes adversely affected claimants,
especially smaller firms.
To be eligible for accelerated payment, a claimant
must submit a computation of the amount due and file a
bond guaranteeing refund of any overpayment with the appro
priate regional office of the U.S. Customs Service. Within
three weeks, the Regional Commissioner of Customs will
determine whether the conditions for accelerated payment
have been met. When the claim is liquidated, Customs will
pay the remainder or demand a refund in cases of overpayment.
The right to receive accelerated payments will be denied
claimants who repeatedly abuse it by filing erroneous compu
tations which force Customs to demand a refund.
E“Yf
DepartmentofiheTREASURY
iMfi-raw n
r t20220
m tn
WASHINGTON,
D.C.
ATTENTION:
]|
TELEPHONE W04-2041
FINANCIAL EDITOR
FOR RELEASE
6:30 P.M.
December 26, 1972
RESULTS OF TREASURY'S MONTHLY BILL OFFERING
The Treasury Department announced that the tenders for $1,800,000,000, or
thereabouts, of 352-day Treasury bills to be dated December 31, 1972, and to
mature December 18, 1973, which were offered on December 18, 1972, were opened
at the Federal Reserve Banks today.
The details of this issue are as follows:
RANGE OF ACCEPTED COMPETITIVE BIDS: (Excepting one tender of $475,000)
High
Low
Average
(
94.794
94.735
94.782
Approx,
Approx,
Approx,
equiv.
equiv.
equiv.
annual rate 5.3241° per
annual rate 5.3851° per
annual rate 5.337$ per
annum
annum
annum
7 $ of the amount bid for at the low price was accepted)
TOTAL TENDERS APPLIED FOR AND ACCEPTED BY FEDERAL RESERVE DISTRICTS:
Boston
New York
Philadelphia
Cleveland
Richmond
Atlanta
Chicago
St. Louis
Minneapolis
Kansas City
Dallas
San Francisco
TOTALS
Total
Accepted
Total
Applied for
Federal Reserve
District
$
29,865,000
2,671,840,000
36,745,000
2,370,000
1,830,000
2,130,000
246,325,000
22,595,000
20,970,000
13,400,000
25,650,000
102,690,000
$3,176,410,000
$
3,865,000
1,612,200,000
12,095,000
2,370,000
830,000
2,130,000
106,435,000
9,595,000
6,970,000
3,400,000
3,550,000
36,690,000
$1,800,130,000
The equivalent coupon issue yie
1j
This is on a bank discount basis.
2/
Includes $30,125,000
entered on a noncompetitive basis and acce
full at the average price shown above.
l/
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ti ts
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H H H M R B M
i
DepartmentoftheTR[ASURY
WASHINGTON. D C 20220
rib
TELEPHONE W04-2041
‘
■>-'>
FOR IMMEDIATE RELEASE
•• -i
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s.
■
<****'*
:
***'”
December 27, 1972
TREASURY AUCTION OF 20-YEAR BONDS
The Treasury will auction $625 million of 6-3/4%
20-year bonds on January 4, 1973.
The bonds will be
dated January 10, 1973, and will mature on February 15,
1993.
These bonds are the longest securities to be offered
by the Treasury since 1965.
The sale is part of the
Treasuryfs continuing effort to finance the public debt
responsibly, in a manner neither inflationary nor disturbing
to the marlet.
Auctions have been successfully used for many years
in marketing Treasury bills, and more recently they have
been used in marketing medium-term coupon issues with
maturities up to 9-years 9-months.
With this sale the
Treasury will be extending the use of the auction method
to the marketing of longer-term bonds.
The procedure under which awards will be made in this
auction differs from the procedure that has been used in
auctions for shorter-term securities.
The difference is
that all tenders accepted in this auction will be awarded
at the price of the lowest accepted tender.
As in the
usual auctions, the Treasury will accept bids starting
with the highest price bid and ranging downward to the
bid which provides a total of $625 million.
(The Secretary
of the Treasury reserves the right, however, to accept less
than $625 million of tenders.)
This procedure will provide
an incentive to bid at prices sufficiently high to be sure
of awards, while also assuring each bidder that, if he bids
at a price within the range of accepted prices, he will be
awarded bonds at the same price as every other bidder.
Non
competitive tenders up to $250,000 will also be accepted.
(OVER)
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2
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T h is s a l e o f lo n g e r -t e r m b o n d s a t a u c t io n w it h th e
" u n i f o r m - p r i c e 11 m e th o d o f m a k in g a w a r d s c o n t i n u e s t h e
T r e a s u r y 's s e a r c h f o r th e m o st e f f i c i e n t m eans o f m a r k e t in g
F e d e ral s e c u r it ie s .
The d e t a i l s
s e p a r a t e ly .
of
t h is
a u c t io n a re b e in g
r e le a s e d
FOR IMMEDIATE RELEASE
December 27, 1972
DETAILS OF TREASURY AUCTION OF $625 MILLION OF BONDS
The $625 million or thereabouts, of 20-year Treasury bonds to be sold at auction,
under competitive and noncompetitive bidding will be 6-3/4$ Treasury Bonds of 1993,
dated January 10, 1973, and will mature February 15, 1993 (CUSIP No. 912810 BN7).
The
bonds will be sold at auction on Thursday, January 4, 1973, in the usual manner except
that the lowest accepted bid price will be the price to be paid on ALL accepted tenders.
The bonds will be issued in registered and bearer form in denominations of $1,000,
$5,000, $10,000, $100,000 and $1,000,000.
Interest will be payable on August 15, 1973,
and thereafter on February 15 and August 15.
Tenders for the bonds will be received up to 1:30 p.m., Eastern Standard time,
Thursday, January 4, 1973, at any Federal Reserve Bank or Branch and at the Office of the
Treasurer of the United States, Securities Division, Washington, D. C. 20220; provided,
however, that noncompetitive tenders will be considered timely received if they are
mailed to any such agency under a postmark no later than Wednesday, January 3, 1973.
Each tender must be in the amount of $1,000 or a multiple thereof and must state the
price offered, if it is a competitive tender, or the term "noncompetitive", if it is a
noncompetitive tender.
The price on competitive tenders must be expressed on the basis
of 100, with two decimals, e.g., 100.00.
Fractions may not be used.
The notation "TENDER
FOR TREASURY BONDS" should be printed at ~fche bottom of the envelope in which the tender
is submitted.
Tenders at the highest prices will be accepted to the extent required to attain the
amount offered.
Tenders at the lowest price accepted will be prorated if necessary.
All accepted tenders will then be awarded at the price of the lowest accepted bid.
Public
announcement will be made of the results of the auction and the price to be paid for ai i
accepted tenders.
Those submitting tenders will be advised of the acceptance (and
awarded price) 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, including the right
to accept less than $625 million of tenders, and his action in any such respect shall be
final.
Subject to these reservations noncompetitive tenders for $250,000 or less will
te accepted in full at the same price as accepted competitive tenders.
be 100.00, or more or less than 100.00.
(OVER)
The price may
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DepartmentoftheffiE/ffllRY
WASHINGTON. D.C. 20220
TELEPHONE WQ4-2041
FOR IMMEDIATE RELEASE
December 29, 1972
TREASURY ANNOUNCES MANUAL HOISTS FROM LUXEMBOURG
ARE BEING SOLD AT LESS THAN FAIR VALUE_____
The Treasury Department announced today that manual
hoists from Luxembourg are being, or are likely to be, sold
at less than fair value within the meaning of the Antidumping
Act, 1921, as amended. These manual hoists are of both
lifting and pulling types (similar to chain hoists) and are
chiefly used in the transportation and construction trades.
Notice of the determination will be published in the
Federal Register of December 30, 1972.
The case will now be referred to the Tariff Commission
for a determination as to whether an American industry is
being, or is likely to be, injured. In the event of an
affirmative determination, dumping duties will be assessed
on all entries of these manual hoists from Luxembourg which
have not been appraised and on which dumping margins exist.
A "Notice of Withholding of Appraisement" was issued
on September 30, 1972, which stated that there was reasonable
cause to believe or suspect that there are sales at less
than fair value. Pursuant to that notice, interested parties
were given an opportunity to present oral and written views
prior to final Treasury action.
During the period of October 1971 through July 1972
imports of these manual hoists from Luxembourg amounted to
approximately $530,000.
SÉÉË
DepartmentofthefREASURY
WASHINGTON. D.C. 20220
J fl
TELEPHONE W04-2041
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...
ATTENTION:
n 89
...
FINANCIAL EDITOR
December 29, 1972
FOR RELEASE 6:30 P.M.
RESULTS OF TREASURY’S WEEKLY BILL OFFERING
The Treasury Department announced that the tenders for two series of Treasury
bills, one series to be an additional issue of the bills dated October 5, 1972
, and
the other series to be dated January 4, 1973 , which were invited on December 22, 1972
were opened at the Federal Reserve Banks today. Tenders were invited for $2,400,000,000,
or thereabouts, of 91-day bills and for $1,900,000,000, or thereabouts, of 182-day
bills. The details of the two series are as follows:
RANGE OF ACCEPTED
COMPETITIVE BIDS:
High
Low
Average
91-day Treasury bills
maturing April 5, 1973
Approx. Equiv.
Annual Rate
Price
98.706
5.119$
5.194$
98.687
5.163$
1/
98.695
102-day Treasury bills
maturing July 5, 1975
Approx. Equiv.
Annual Rate
Price
5 .353$
97.294
5.420$
97.260
.» 5.396$ 1/
97.272
98$ of the amount of 91-day bills bid for at the low price was accepted
69$ of the amount of 182-day bills bid for at the low price was accepted
TOTAL TENDERS APPLIED FOR AND ACCEPTED BY FEDERAL RESERVE DISTRICTS :
District
Boston
New York
Philadelphia
Cleveland
Richmond
Atlanta
Chicago
St. Louis'
Minneapolis
Kansas City
Dallas
San Francisco
TOTALS
Accepted
Applied For
$
38,915,000 W 35,915,000
2,929,105,000 1,845,105,000
15.375.000
15.375.000
22.320.000
22.320.000
8,915,000
14.915.000
11.390.000
14.390.000
242,230,000
331.550.000
56.090.000
59.090.000
20.940.000
22.940.000
19.045.000
29.245.000
33.540.000
49.580.000
89.340.000
109.840.000
Applied For
17,725,000
2,578,765,000
25.985.000
34.755.000
12.820.000
8,595,000
308.570.000
27.375.000
27.370.000
20.375.000
33.710.000
151.460.000
W
$3,637,265,000 $2,400,205,000 a/ $3,247,505,000
Accepted
>
3,415,000
1,500,395,000
15 ,#85,000
29.755.000
4.820.000
7.595.000
192,470,000
22.655.000
26.750.000
16.355.000
13.090.000
66.810.000
$1,900,095,000 b/
a/ Includes $165,855,000 noncompetitive tenders accepted at the average price of 98.695
b/ Includes $ 80,905,000 noncompetitive tenders accepted at the average price of 97.272
1/ These rates are on a bank discount basis. The équivalent coupon issue yields are
5.30$ for the 91-day bills, and 5.62$ for the 182-day bills.
@FedFRASER