Full text of Press Releases of the United States Department of the Treasury : Volume 44

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LIBRARY
R f> O M 5 0 3 0

JUN

1 41972

TREASURY DEPARTMENT

TRn-aSURY DEPARTMENT
Washington
FOR RELEASE, MORNING NEWSPAPERS
Tuesday. November IQ, 1942.

Press
frese Servio
Service

The Secretary of the Treasury announced last evening that the tenders for
$500,000,000, or thereabouts, of 90-day Treasury bills to be dated November 12, 1942,
and to nature February 10, 1943, which were offered on November 6, were opened at the
Federal Reserve Banks on November 9*
The details of this issue are as follows:
Total applied for - $1,013,151,000
Total accepted
501,435,000
Range of accepted bids:
High
Low
Average price

- 99*925 Equivalent rate of discount approx. 0.300$ per annum
- 99.906
"
»
*
■
•
0.376$ "
"
- 99.907
w
■
*
*
■
0.373$ ■
■

(27 percent of the amount bid for at the low price was accepted.)

TREASURY REPARTMËHT
Washington
FOR RELEASE, MORNIHG NEWSPAPERS,
Tuesday, November 10, 1942.
II/9/ 4 2 '
”
~

Press Service
Ho, 34-0

The Secretary of the Treasury announced last evening that the
[' tenders for $500,000,000» or thereabouts, of 90-day Treasury bills

.

¡1 to be dated November 12 , 1942 , and to mature February 10 , 1943 ,
I which were offered on November 6 , were onened at the Federal Reserve
"
*• ’
j
.
‘ ¡S&m
;i Banks on November 9*
The details of this issue are as follows:
anna

• ’
*,-

total applied for - $1 ,013 ,151,000
Total accepted
>01,405,000
Range of accepted bids:
High
l ow

- 99.925 équivalent rate of discount approx, 0.300$
m per
annum
- 99.906
0.376$ per
annum

Average

Price - 99*907

0.373$ per

annum
(27 percent of the amount bid for at the low price was accepted»)

-0O 0-

H
hsn. I

Although rulings of the New York office are subject to modification
or reversal of the Commissioner of Internal Revenue in Washington, enployer
obtaining favorable rulings from the New York office can in each instance
rely on such rulings.

No modification or reversal by the Commissioner of

the ruling made by the New York office will be given retroactive effect.

ôi-/

Charles A. Drake, who has a record, of more than twenty years of
responsible work in t h e M v ! ^ Internal Revenue Service.
The territorial jurisdiction of the New Yoric office will cover the
State of New York.

That office will rule, for and on behalf of the

Commissioner of Internal Revenue, on all requests and applications for
salary increases and decreases coming within the jurisdiction of the
Commissioner as defined in the regulations of the Economic Stabilization
Director and approved by the President on October 27, 1942.
The jurisdiction of the Commissioner covers all salaries over $5,000
per year, and salary payments of less than $5,000 per year in the case of
executive, administrative or professional employees not represented by
labor organizations.
Under the .present arrangement employers in the State of New York will
address their requests for rulings to «Head, Salary Stabilization Unit,
253 Broadway, New York City,« and will obtain rulings from that offied as
to proposed salary adjustments.

Whenever necessary^ employers may confer

with the members of the New York office regarding proposed adjustments.
Procedure will be provided to permit appeals to the Commissioner of
Internal Revenue in Washington in case of adverse rulings by the New York
office.

TREASURY DEPARTMENT

Washington
Press Service
No. 34-1

FOB IMMEDIATE RELEASE,
Thursday, November 12, 1942
ll/XlA'2

Commissioner of Internal Revenue Guy T. Helvering announced
today the opening of the New York office of the new Salary
Stabilization Unit of the Bureau of Internal Revenue.

New York City.

The Unit

The office will be in charge of Charles A. Drake,

who has a record of more than twenty years of responsible work
in the Internal Revenue Service.
The territorial jurisdiction of the New York office will
cover the State of New York. That office will rule, for and
on behalf of the Commissioner of Internal Revenue, on all re­
quests and applications for salary increases and decreases com­
ing within the jurisdiction of the Commissioner as defined in
the regulations of the Economic Stabilization Director and ap­
proved by the President on October 27, 1942,
The jurisdiction of the Commissioner covers all salaries
over $ 5,000 per year, and salary payments of less than $ 5,000
per year in the case of executive, administrative or profes­
sional employees not represented by labor organizations.
Under the present arrangement employers in the State of New
York will address their requests for rulings to MHead, Salary
Stabilization Unit, 293 Broadway, New York City*1, and will ob­
tain rulings from that office as to proposed salary adjustments.
Whenever necessary, employers may confer with the members of the
New York office regarding proposed adjustments. Procedure will
be provided to permit appeals to the Commissioner of Internal
Revenue in Washington in case of adverse rulings by the New.York
office
Although rulings of the New York office are subject to mod­
ification or reversal, of the Commissioner of Internal Revenue in
Washington, employers obtaining favorable rulings from the New
York office can in each instance rely on such rulings. No mod­
ification or reversal by the Commissioner of the ruling made by
the New York office will be given retroactive effect*
-oOo-

-

Commodity

2-

:
Established Quota
: Period & Country : Quantity

: Unit of {Imports as of
: Quantity jOct. 31. 19L 2

Silver or black foxes,
furs, and articles:
Paws, head, or other
separated parts

12 months from
Dec. 1, 1941

500

Pounds

it

550

Pounds

Articles, other
than piece plates

tt

500

Unit

Molasses and sugar
sirups containing
soluble nonsugar
solids equal to
more than 6% of
total soluble
solids

Calendar year

Piece plates

1,500,000

Gallon

(Import quota
filled)
None

%

721,187

-oOo-

i

1

FOE IMMEDIATE RELEASE
November l&l 1942,
The Bureau of Customs announced preliminary figures for imports of commodi­
ties within quota limitations provided for under trade agreements, from the
beginning of the quota periods to October 31, 1942, inclusive, as follows:

ipi
ini!!?of

Commodity

lelesst
Cattle less than 200
pounds each
Cattle, 700 pounds or
more each (other than
dairy cows)

«nils 83CÌ1
Calendar year
Quarter year from
Oct* 1, 1942
Canada
Other countries

100,000

Head

51,720
6,214

Head
Head

65,640

27
(Tariff rate
quota filler

jesiUcj£
Whole milk, fresh or sour

Calendar year

3,000,000

Gallon

4, BOO

Cream, fresh or sour

Calendar year

1,500,000

Gallon

690

Fish, fresh or frozen
filleted, etc,, cod,
haddock, hake, pollock,
cusk and rosefish

Calendar year

17,174,495

a fresh i

White or Irish potatoes
certified seed
other

¡siaidroi
12 months from
Sept. 15, 1942
12 months from
Sept. 15

Cuban filler tobacco,
unstemmed or stemmed
(other than cigarette
leaf tobacco), and
scrap tobacco

Calendar year

Red cedar shingles

Calendar year

Pound

13,791,002
Is or Iris]
Itified si

90,000,000

Pound

1,712,199

60,000,000

Pound

167,271

i

Ifiller 1

pined oi

Pound
feto
(unstemmed
equivalent) (Tariff rate
22,000,000
quota filled

Irsliii
2,617,111

Square

2,402,378

FGrillai
Silver or black foxes,
furs, and articles:
Foxes valued under
$2$0 ea, and whole
furs and skins
Tails

| | and si

®valu8i
Period - May Nov. 1942
All countries

41,774

12 months from
Dec. 1, 1941

5,000

wWi sin
irs and skj

Number

Piece

21,007

(Import quot!
filled)

TREASURY DEPARTMENT
Washington

POH IMMEDIATE RELEASE,

Press Service
No. 34-2

Thursday, November 1 2 , 194.2»

The Bureau of Customs announced preliminary figures for imports of commodi­
ties within quota limitations provided for under trade agreements, from the
beginning of the quota periods to October 31, 1942, inclusive, as follows*

Commodity
Cattle less than 200
pounds each

*
Established Quota
* Unit of »Imports as of
s Period and Country *Quantity; Quantity :0ct. 31, 1942
Calendar year

100,000

Head

65,640

51,720
6,214

Head
Head

27
(Tariff rate
quota filled)

Cattle, 700 pounds or
more each (other than
dairy cows)

Quarter year from
Oct. 1, 1942
Canada
Other countries

Whole milk, fresh or sour

Calendar year

3,000,000

Gallon

4,800

Cream, fresh or sour

Calendar year

1,500,000

Gallon

690

Fish, fresh or frozen
filleted, etc., cod,
haddock, hake, pollock,
cusk and rosefish

Calendar year

17,174,495

Pound

13,791,002

90,000,000

Pound

1,712,199

60,000,000

Pound

167,271

(Tariff ra
quota fi|

4,800:
$

13,791,002
1,712,199;
UfJ

(Tariff fj I
quota fill I

2,402,31«]

White or Irish potatoes
certified seed
other

12 months from
Sept. 15, 1942
12 months from
Sept* 15

Cuban filler tobacco,
unstemmed or stemmed
(other than cigarette
leaf tobacco), and
scrap tobacco

Calendar year

Hed cedar shingles

Calendar year

Silver or black foxes,
furs, and articles*
Foxes valued under
$>250 ea* and whole
furs and skins
Tails

Pound
(unstemmed
equivalent) (Tariff rate
quota filled)
22,000,000
2,617,111

Square

2,402,378

Period - May Nov* 1942
All countries

41,774

Number

21,007

12 months from
Dec. 1, 19a

5,000

Piece

(Import quota
filled)

----—

—

2

Commodity

Established1Quota
t Unit of «Imports as of
» Period & Country : Quantity s Quantity «Oct. 31, 194,2

Silver or black foxes,
furs, and articlesï
Paws, he.ad, or other
separated parts

12 months from
Dec. 1, 1941

500

Pounds

11

550

Pounds

articles, other
than piece plates

ti

500

Unit

Molasses and sugar
sirups containing
soluble nonsugar
solids equal to
more than 6% of
total soluble
solids

Calendar year

Piece plates

-0O0—

1,500,000

Gallon

(Import quota
filled)
None
34

721,187

W

FOR IMMEDIATE RELEASE,
November
19ii2»

3

The Bureau of Customs announced today preliminary figures showing the quan­
tities of wheat and wheat flour entered* or withdrawn from warehouse* for con­
sumption under the import quotas established in the Presidents proclamation of
May 28, 19Ul, as modified by the Presidents proclamation of April 13, 1 9 k 2 , for
the twelve months commencing May 29* 19li2, as follows:
Wheat flour* semolina*
------ - 9

Country
of
Origin

Canada
China
Hungary
Hong Kong
Japan
United Kingdom
Australia
Germany
Syria
New Zealand
Chile
Netherlands
Argentine
Italy
Cuba
France
Greece
Mexico
Panama
Uruguay
Poland and Danzig
Sweden
Yugoslavia
Norway
Canary Islands
Rumania
Guatemala
Brazil
Union of Soviet
Socialist Republics
Belgium

^

WHEAT
:
similar wheat products
#
:
imports
•
t
imports
Established »May 29, 19l*2, to : Established »May 29, 191*2, 1
Quota
sOct. 31, 191*2.
:
Quota
»Oct. 31, 191*2
(Bushels}
(Bushels}
(Pounds}
(Pounds}
19 $,000

795,000
•

•

-

-

-

—
100
•
100
100

•
«•
•

-

100
2*000
100
1*000
100
-

we
-

—
~

-

-

-

-

-

-

-

—

-

-

1,000
100
100

3,815,000
«•

13,000

aw

13,000
8,000
75,000
1,000
5,000

a.
a.
aa
mm

mm

5,000

mm

1,000
1,000
1,000
111,ooo
2,000
12,000
1,000
1,000
1,000
1,000
1,000
1,000
1,000
1,000
1,000
1,000

mm

mm

kh
mm
mm

w»

mm
mm

mm

mm

mm
mm

mm

-

100
100
800*000

3,815,000
21»,000

■a

mm

mm

mm

-

mm

795,000

—oOo-

li,000,000

'

aa

3,sif>,obit

TREASURY BEPAETIu3'<T
Washington
FOR mXDIATE RELEASE.,
Thursday,, November 12, 194-2.

Press Service
No. 34-3

The Bureau of Customs announced today preliminary figures showing the quan­
tities of wheat and wheat flour entered, or withdrawn from warehouse, for con­
sumption under the import quotas established in the President’s proclamation of
May 2a, 1941, as modified by the President’s proclamation of April 13, 194-2, for
the twelve months commencing May 29, 1942, as follows:

Country
of
Origin

4
9
.WHEAT
:
;
Imports
J
i\Established ;LIay 29, 1942, to
tOct. 31, 1942.
i Quota
(Bushels)
(Bushels)

i
Wheat flour, semolina
tcrushed or cracked wheat, ;
:
similar wheat produet;
9
s
Imports
ft
iEstablished «May 29, 1942
:
Quota
iOct. 31, 194
(Pounds)
(Pounds)

3,815,000
24,000
13,000
13,000
8,000
75,000
1,000
5,000
5,000
1,000
1,000
1,000
14,000
2,000

3,815,000

795,000
Canada
China
Hungary
Hong Kong
Japan
100
United Kingdom
Australia
100
Germany
100
Syria
~
New’ Zealand
—
Chile
100
Netherlands
2,000
Argentine
100
Italy
~
Cuba
1,000
France
—
Greece
100
Mexico
Panama
Uruguay
Poland and Danzig
Sweden
Yugoslavia
Norway
Canary Islands
1,000
Rumania
100
Guatemala
100
Brasil
Union of Soviet
■ 100
Socialist Republics
100
Belgium

795,000
■-

—

—

—
*

800,000

795,000

4,000,000

3,815,044

—
-

-

-

-

-.

•oOo-

—
-

o
O

-

44

O<*v
r~j

—
*
-

—
■—
—

1,000
1,000
1,000
1,000
1,000
1,000
1,000
1,000
1,000
1,000
-

*

—
—
—'
—
—
—
—
-*
—

FOE IMMEDIATE RELEASE
November J0« 194-2,

The Bureau of Customs announced today preliminary figures showing the quan­
tities of coffee authorized for entry for consumption under the quotas ibr the
twelve months commencing October 1, 19-42, provided for in the Inter-American
Coffee Agreement, proclaimed by the President on April 15, 1941, as follows:

Country of
Production

Signatory Countries:
Brazil
Colombia
Costa Rica
Cuba
Dominican Republic
Ecuador
El Salvador
Guatemala
Haiti
Honduras
Mexico
Nicaragua
Peru
Venezuela

#
$
: Quota Quantity
(Pounds)
:
•

1,353,183,480
458,336,340
29,100,720
11,640,288
17,460,432
21,825,540
87,302,160
77,844,426
40,013,490
2,910,072
69,114,210
28,373,202
3,637,590
61,111,512

Non-signatory countries:
)
British Empire, except
)
Aden and Canada
)
Kingdom of the Netherlands )
and its possessions
)
) 51,653,778
Aden, Yemen and Saudi
Arabia
)
Other countries not signa-• ;
tories of the Inter-Ameri-)
can Coffee Agreement
>

~o0o~

•
:
Authorized for entry
:
for consumption
: As of (Date)
:
(Pounds)

Oct. 31, 1942
it
f!
8
«
II
tl
If
If
If
«
^
»
ft
ft

ft

33,057,853
54,031,384
-

552,526

3,788,385
800,027
1,237,707
1,797,045
7,072,351
685,689
2,102,059
10,730,489

8,097,737

TREASURY DEPARTMENT
Washington
Fpfi IMMEDIATE RELEASE,
Thursday,. November 12, 1942

Press Service
No. 34-4

The Bureau ,of Customs announced today preliminary figures showing the quan—
tfties o f coffee authorized for entry for consumption under the quotas for the
twelve months commencing October X, 1942, provided for in the Inter—Ameri can
Goffee Agreement, proclaimed by the President on April 15, 1941, as follows t
Country of
Production

I

s

t Quota Quantity
t
(Pounds)

*

}
Signatory Countriesi
Brazil
Colombia
Costa Rica
Cuba
Dominican Republic
Ecuador
El Salvador
Guatemala
Haiti
Honduras
Mexico
Nicaragua
Peru
Venezuela

1,353,183,480
¿58,336,340
29,100,720
11,640,288
17,460,432
21,825*540
87,302,160
77,844,426
40,013,490
2,910,072
69,114,210
28,373,202
3,637,590
61,111,512

Non-signatory countries!
)
British Empire, except
)
Aden and Canada
)
Kingdom of the Netherlands )
and its possessions
)
Aden, Yemen and Saudi
) 5 l,ò 5 3 ,7 7 B
Arabia
V
Other countries not signa- )
tories of the InteivAmeri-)
can Coffee Agreement
)

Authorized for entry
for consumption
t As of
( Date)
î
(Pounds)

1

Oct. 31, 1942
1»

33,057,853
54> 031,384

n

»
»1
it
H

«
H
it
It
f,

552,526
3,788,385
800,027
1,237,707
1,797,045
7,072,351
685,689
2,102,059

ft
It

H

10,730,489

8,097 737

-

2-

&
COTTON CARD STRIPS,/ COMBER "WASTE, LAP "WASTE, SLIVER WASTE, AND ROVING WASTE,
WHETHER OR NOT MANUFACTURED OR OTHERWISE ADVANCED IN VALUE* Arm»«! quotas
commencing September 20, by Countries of Origin:

,

2/

Total quota, provided, however, that not more than 33-1/3 pereent/of the
quotas shall be filled by cotton wastes other than card strips/and comber
wastes made from cottons of 1-3/16 inches or more in staple length in the
case of the following countries: United Kingdom, France, Netherlands,
Switzerland, Belgium, Germany and Italy:

(In Pounds)
Country of Origin

: Established : TOTAL IMPORTS : ESTABLISHED i Imports Sept.
: TOTAL QUOTA : Sept. 21,19i|.2 : 33-1/3/5 of t 21, 191*2 to
:
: to Oct.31 »191*2: Total Quota : Oct. 31, 191*2 1/

United Kingdom* ........
U,323,1*57
Canada*•••••••• .........
997 lion
France......... ........
British India*. .........
69.627
Netherlands.... .........
6fi.2)iO
Switzerland*••• ........
iili.388
Belgium*•••••••
38,5%?
Japan* «*••••••• .........
3l.i
17.\99
China.••»•••••• ..... .
Egypt..... .
........
8,135
Cuba.•.•••••••• ..... 6.^Wi
76.^20
Germany...... . ........
Italy......... ........
21,263

Totals

1,1*1*1,152

-

81,¡»95
61

5,1(82,509

ñ9‘i

75,80?
-

-

22,71*7
11*,796
12,853

-

-

-

-

25,Ut3
7,088

-

11*3,318

1,599,886

-

-

1/

Included in total imports, column 2 +

2j

The President *s proclamation, signed March 31* 19l*2, exempts from import quota
restrictions card strips made from cottons having a staple 1-3/16 inches or
more in length*

—oQo—

1

n

■

' V':"

34

FOR IMMEDIATE RELEASE
November
19l*2.

jy/
the Bureau of Customs announced today that preliminary reports from the col­
lectors of customs show imports of cotton and cotton waste chargeable to the im­
port quotas established by the President *s proclamations of September 5, 1939, and
December 19, 19l*0, as follows, during the period September 21, 19li2, to October 31*
191*2, inclusive*
*
COTTON HAVING A STAPLE OF LESS THAN 1-11/16 INCHES (OTHER THAN HARSH OR ROUGH
COTTON OF LESS THAN 3/1* INCH IN STAPLE LENGTH AND CHIEFLY USED IN THE MANU­
FACTURE OF BLANKETS AND BLANKETING, AND OTHER THAN LINTER5). Annual quotas
commencing September 20, by Countries of Origin*
(In Pounds)

Country of
Origin

1
3
3

Staple length less
than 1 -1/811
3 Inports Sept.
* Established * 2 1 , 191*2 , to
•
i
Quota
* Oct. 31. 191*2

Egypt and the AngloEgyptian Sudan........
Peru........ .
British India.••••••••••
China. ............
Mexico.*................
Brazil.
Union of Soviet
Socialist Republics...
Argentina.
Haiti
Ecuador...••••••••••••••
Honduras. ..... .
Paraguay....... .
Colombia.............
Iraq............... .
British East Africa...
Netherlands East Indies.
Barbados.••.».••••••••••
Other British West
Indies 3^.........
Nigeria...7 .... ......
Other British West
Africa ¿/•••••••••••*
Other French Africa 3/.*
Algeria and Tunisia....
Totals

783,816
21*7,952
2,003,1*83
1,370,791
8,883,259
618,723

* Staple length 1—1/8** or more
s
but less than I-H/I6 **
s Established t Imports Sept.
*
Quota
3 21, 19l*2, to
• 1*5.656.1*20 3 Oct. 31. 191*2.

mm

26,569,275
1,019,651*

21*7,952
—
8,883,259
618,723

1*75,121*
5,203
237
9,333

«■» m
** 1
1

237
9,263
»

752
871
121*
195
2 ,21*0

mm

I

mm

m

mm

M

mm

\

mm

1

mm

71,388

mm

••

mm

mm

\

1

mm
m.

2 1 ,3 2 1

mm

mm

5,377

•

mmm

16,001*
689

w
mm

mm

-

lit,516,882

9,759,1*31*

1*5,656,1*20

1/ Other than Barbados, Bermuda, Jamaica, Trinidad, and Tobago.
2 / Other than Gold Coast and Nigeria.

3/ Other than Algeria, Tunisia, and Madagascar.

1

27,588,929 1

TREASURY DEPARTMENT

Washington
tl» eoi*

o the ia.
)193?,am
October3]!
HOU®
HàNU* ]
quotas

S/S* or sc
n1-11/16«
sportsSep
I®,*
let. 31, 19»

FOR IMMEDIATE RELEASE,
Thursday, November IS, 19**2.

!Pres« Service
No. 3 ^ 5

The Bureau of Customs announced today that preliminary reports from the
collectors of customs show imports of cotton and cotton waste chargeable to
the import quotas established by the President’s proclamations of September 5*
1939» &u& December 19, 19^0» as follows, during the period September 21, 19**2,
to October 31* 19^2, inclusive*
COTTON HAVING A STAPLE OF LESS THAN 1-11/16 INCHES (OTHER THAN HARSH OR ROUGH
COTTON OF LESS THAN 3/** INCH IN STAPLE LENGTH AND CHIEFLY USED IN THE MANU­
FACTURE OF BLANKETS AND BLANKETING, AND OTHER THAN LlNTERS). Annual quotas
commencing September 20, by Countries of Origini
______________________
i
Country of
*

Origin
26,569,2?*'
1,019,«

5
* Established
1
Q^ota

Egypt and the AngloEgyptian Sudan.
Peru...................
British In d ia.. . . . . . . . . . .
China......... „
Mexico«.,,................
Brazil
Union of Soviet
Socialist R epu b lics,.,,
Argentina, *
.
3 a iti.. . . ...............................
Ecuador.. . . . . . . . . . . . . . . . .
Honduras..................
Paraguay..............................., .
lolombia.......................... ..
Iraq,
Sritish Bast A f r i c a . ,, . ,.
Netherlands East Indies..
Barbados.............................. ....
Hher British West
Indies 1/........... ............ ..
Nigeria,.................... .
Hher British West
Africa 2]
Hher French Africa ¿/« ,.
Algeria and T u n isia ... . . •
Totals
1/
2/
I 3/

(In Pounds)
Staple length less"
than l-l/gff

783,816
2U7,q52
2,003,483
1,370*791
8.883.259
618,723
U75.12U
5.203
237
9 »333
752
S71
12**
195
2,2*40
71.388

V Staple length l~l/S” or more
l
but less than l-ll/l6w

1 Imports Sept. * Established * Imports Sept.
\ 21*, 1Q**2, to
Quota
* 21, 19**2 , to t
; Oct. 31* 19**2 * **5,6Ç6,**20 \ Oct, 31* 19**2
26, 569,275
1. 019. 651*

—

2^7.952
-

+

MM

8,883,259
618,723

Jflft

-

»

-

«ft

-

237
9,263

-

«

-

«■*
■

*.

-

-

~
—

—

—

21,321
5,377
16, 00**
689

— ;

ft*
«ft

-

-4

«

-

-

—

1**,516*882

-

9 ,7 5 9 .^

^5 . 656, 1*20

Other than Barbados, Bermuda, Jamaica, Trinidad, and Tobago.
Other than Gold Coast and Nigeria,
Other than Algeria, Tunisia, and Madagascar.

27*58S,929

e

-2-

gj

COTTOH CARD S T R I P S ,/ COM BER W A S T E , L A P W A S T E , S L IV E R W A S T E , A ® R D V IU G W A S T E ,
W H ETH ER OH NOT M ANUFACTURED O B O T H ER W IS E ADVANCED IN V A L U E / A n n u a l q u o t a s
c o m m e n c in g S e p t e m b e r 2 0 , b y C o u n t r i e s o f O r i g i n *
2/

T o t a l q u o t a , p r o v i d e d , h o w e v e r , t h a t n o t m o r e t h a n 3 3 *‘¥l / 3 p e r c e n t / o f t h e
q u o ta s s h a l l b e f i l l e d b y c o tto n w a s te s o th e r th a n c a r d s t r i p s /a n d co m b er
w a s te s m ad e fro m c o t t o n s o f 1 -3 /1 & in c h e s o r m o re in s t a p l e l e n g t h in th e
c a s e o f t h e f o l l o w i n g c o u n t r i e s * U n i t e d K in g d o m , F r a n c e , N e t h e r l a n d s »
S w i t z e r l a n d , B e lg iu m , C e rm a n y a n d I t a l y * ,
(In P ou n d s)
Country of Origin

* Established * TOTAL IMPORTS * ESTABLISHED *Imports Sept.
5 TOTAL QUOTA ? Sept. 21,19^2 * 33-1/3$ of *21, 191+2 to
*
* to Oct.31*19^2* Total Quota iOct.31*19^2 1/

United Kingdom,
.
Canada................ .
France................ .
British India.,..... .
Netherlands........ .. ,
Switzerland............ ,
Belgium.........
J a p a n . * . i
China,............... •
Egypt**».»*..»•»».,.*,»1
Cuba,............. ... .
Germany............ ..
Italy,.... .

Totals

1/

1,W»1,152

'».323.^57
239,690
227,1+20

81,1*95
6i ,S23
—
**

69,627
68,21+0
1+U.388

■*>

38,559
3*1.535
17*322

♦
—

8,135
6,5©
76,329
21,263

1^3,318

5.^82,509

-

75*807

22.7U7
ii*.796
12,853
«
r
**
25.^3
7,088
1.599*886

«H* ■

«
- Ï
+»
**
'**

-

I n c l u d e d i n t o t a l i m p o r t s , c o lu m n 2 *

2/ T h e P r e s i d e n t ’ s p r o c l a m a t i o n , s i g n e d M a r c h 3 1 * 1 9 ^ 2 » e x e m p t s f r o m i m p o r t q u o t a
r e s t r i c t i o n s c a r d s t r i p s m ad e fro m c o t t o n s h a v in g a s t a p l e 1 -3 /1 & in c h e s o r
m o re i n l e n g t h .

~o0o~

w ill be su itab le for ©very c la s s and type o f in vesto r, fro®
the la rge st commercial banks, corporations and Insurance
companies to the sm allest individual investor or wage earner*
The War Savings S t a f f w ill remain continually active
in sales of War Savings Bonds.

In p a r tic u la r , the War

Savings S t a f f w ill in te n sify i t s Payroll Savings drive
in November and December, with the aim o f raising the
present fig u re of 23,000,000 workers now investing an
average of 8 per cent of th eir pay to a figure of at
le a s t 30,000,000 workers se ttin g aside an average of
at le a s t 10 per cent of th e ir earnings every pay day.
War borrowing must be done to the greatest possible
extent out of current income and savings of the people.
This is the soundest means of financing the war d e f i c i t .

Since sales of "tap” issues, War Savings Bonds
and Tax oavmgs Notes will not provide all of the necessary
funds, it is the intention of the Treasury likewise to
offer one or more series of open market securities for
subscription by banks and others.
Treasury issues already available, and those
to be announced for limited periods within the next few weeksj

Ü

B Ü

Secretary Morgenthau^ssued the follow ing statement'

(II®
IÄ

Borrowing by the Treasury to meet the r isin g costs
o f the war w ill be resumed on an
November 30®*

“

sale on

V ictory Fund Committees, which have been

active in promoting the sale of Treasury se cu ritie s other
than War Savings Bonds, w ill be asked to conduct a widened
campaign for the enlistment of id le funds in the war

pill a5i
illefili
¡lueexcel!

e ffo r t.

IMi

I

'f

.| --—T—

The Committees already have done excellen t work

in behalf of Treasury financing and they w ill be given
f u l l authority to conduct a drive fo r further funds.
In addition to conducting a campaign on

bonds,

the V ictory Fund Committees w ill be asked to promote

Since£

purchases by corporate and other taxpayers of series A
and C tax savings notes.

fcsilote

Such notes ease the taxpaying

problems of the purchasers and at the same time a s s is t
the current

\v

fcasr

of the Treasury.

Since

fc United j

the ne ooooary funds ft!IT "be

llBcli

through* sales
pnhiiiwii§I t ^ i s the intention of the Treasury likewise to

nowii

subscription by ban^^aM^xrfSers
-pg|
'"x

■

S
f
i

SSi
'

^feasury is suae already t i l l a b l e , and those to be
announced fo r lim ited periods w ithinHhe next few weeks,
'To./ •*
li) GLy'

(?
/

nap;

■intend?

o ffe r one or raop&C^eries of open j&wrket se cu ritie s for

j

ÍÉSO
Íop
IfiPS.

‘ <
n—

.

jl
iiiyHiw A «lii
fT ‘“Y' A-

- f

-t V

11Instil

treasury department

Washington
FOR IMMEDIATE RELEASE,
»«?hnyr, November 12, 194 2 .

Press Service
No. 34-6

Secretary Morgenthau today issued the following statement:
Borrowing by the Treasury to meet the rising costs of the
war will be resumed on an unprecedented scale on November 30.
Victory Fund Committees, which have been active in promoting
the sale of Treasury securities other than War Savings Bonds,
will be asked to conduct a widened campaign for the enlistment
of idle funds in the war effort. The Committees already have
done excellent work in behalf,of Treasury financing and" they
will be given full authority to conduct a drive for further *
funds.
Xn addition to conducting a campaign on ,*tap,< bonds, the
Victory Fund Committees will be asked to promote"'purchases by
corporate and other taxpayers of series A and C tax savings
notes. Such notes ease the taxpaying problems of the purchasers
and at the same time add to the current cash balances of the
Treasury.
Since sales of w tap11 issues, War Savings Bonds and Tax
Savings^Notes >111 not provide all of the necessary funds, it
is the intention of the Treasury likewise to offer" one or more
series oi open market securities for subscription by banks and
others.
Treasury issues already available, and those to be announced
tor limited periods within the next few weeks, will be suitable
for every.class and type of investor, from the largest commer­
cial banks, corporations and insurance companies to the smallest
individual investor or wage earner.
The War Savings Staff will remain continually active in
sales of War Sayings Bonds. In particular, the War Savings Staff
will intensify its Payroll Savings drive in November and Decem­
ber, with the aim of raising the present figure of 23,000,000
workers now investing an average of 8 per cent of their pay to
a figure of at least 30,000,000 worker si setting aside an average
oi at least 10 per cent of their earnings
CO every
v nay
i v dav.
Jv
War borrowing must be done to the greatest possible extent
out of current income and savings of the people.' This is the
soundest means of financing the war deficit.’
-oQo-

TREASURY DEPARTMENT

Washington*^*
FOR IMMEDIATE RELEASE^
.LY.T.Y-^ .-

Press Service
No.

The Treasury Department today reassured French nationals residing
within the United States that their status under the freezing order has
not been changed by Sunday* s action in including unoccupied European
France within enemy territory.
Officials pointed out that the recent amendment to General
Ruling No. 11, which declared nunoccupied” France within Europe to be
enemy territory, did not mean that French citizens within the United
States became enemy nationals.

It did not result in blocking the ac­

counts of French citizens within this country whose accounts heretofore
have been freed under General License No. 4-2.
As applied to unoccupied France, this amendment in effect
provides that no person in the United States may engage in any trans­
action involving trade or communications with a person in unoccupied
France without a license from the Treasury expressly referring to
General Ruling No. 11.

Ordinary transactions with French citizens in

the United States may be carried on in the same manner as in the past.
Treasury officials emphasized that resident French nationals
have no reason for alarm as a result of Sunday* s action.

ooOoo

TREASURY DEPARTMENTWashington
FOR IMEDIATE RELEASE,
Thursday, November 12, 1942.

Press Servite
No, 34-7

The Treasury Department today reassured French nationals
residing within the United States that their status under the
freezing order has not been changed by Sunday’s action in ine
eluding unoccupied European France within enemy territory.
Officials pointed out that the recent amendment to General
Ruling No. 11, which declared ‘’unoccupied” France within Europe
to be enemy territory, did not mean that French citizens within
the United States became enemy nationals* It did not result in
blocking the accounts of French citizens within this country
v/liose accounts heretofore have been freed under General License
No. 42..
^As applied to unoccupied France, this amendment in effect
provides that no person in the United States may engage in any
transaction^involving trade or communications with a person in
unoccupied France without a license from the Treasury expressly
referring to General Ruling No* 11. Ordinary transactions with
French citizens in the United States may be carried on in the,
same manner as in the past.
Treasury officials emphasized that resident French nationals
have no reason for alarm as a result of Sunday’s action.

,-o0o~

jggeBc
- 3 -

issue or on subsequent purchase, and the amount actually received either
upon sale or redemption at maturity during the taxable year for which the
return is made, as ordinary gain or loss*
Treasury Department Circular No* 418, as amended, and this
notice, prescribe the terms of the Treasury bills and govern the condi­
tions of their issue*

Copies of the circular may be obtained from any

Federal Heserve Bank or Branch.

(P O

“

Reserve Banks and Branchesf following which public announcement will he made
by the Secretary of the Treasury of the amount and price range of accepted
bids»

Those submitting tenders will be advised of the acceptance or rejec­

tion 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*

Payment of accepted tenders at the

prices offered must be made or completed at the Federal Reserve Bank in
cash or other immediately available funds on

November 18 1 1942------ •

:(?•)
The income derived from Treasury bills, v/hether interest or gain
from the sale or other disposition of the bills, shall not have any exemption,
as such, and loss from the sale or other disposition of Treasury bills shall
not have any special treatment, as such, under Federal tax Acts now or here­
after enacted*

The bills shall be subject to estate, inheritance, gift, or

other excise taxes, whether Federal or State, but shall be exempt from all
taxation now or hereafter imposed on the principal or interest thereof by
any State, or any of the possessions of the United States, or by any local
taxing authority*

For purposes of taxation the amount of discount at which

Treasury bills are originally sold by the United States shall be considered
to be interest*

Under Sections 42 and 117 (a) (l) of the Internal Revenue

Code, as amended by Section 115 of the Revenue Act of 1941, the amount of
discount at which bills issued hereunder are sold shall not be considered
to accrue until such bills shall be sold, redeemed or otherwise disposed
of, and such bills are excluded from consideration as capital assets»
Accordingly, the owner of Treasury bills (other than life insurance com­
panies) issued hereunder need include in his income tax return only the
difference between the price paid for such bills, whether on original

a

%

r

TREASURY DEPARTMENT
Washington
EOR RELEASE, MORNING NEWSPAPERS,
Friday. November 13, 19A2_____ •

¡antes

Ìli®
The Secretary of the treasury, hy this public notice, invites tenders
for $ 5QQ OOP jOOP

, or thereabouts, of

91

on a discount basis under competitive bidding.
be dated

November IS. 19A2

-day Treasury bills, to be issued
The bills of this series will

and will mature ___ February.¥

when the face amount will be payable without interest.

\ ^243---------

They will be issued in

bearer form only, and in denominations of $1,000, $5,000, $10,000, $100,000,
$500,000, and $1,000,000 (maturity value).
Tenders will be received at Federal Reserve Banks and Branches up to the
closing hour, two o'clock p. m., Eastern

time,

Monday, November 16, !9_A2_■

Tenders will not be received at the Treasury Department, Washington.

Each tender

must be for an even multiple of $1,000, and 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.

le , t a
it tie fri
for an evi

e ,f
l i tenie
special ea
»cp f

Fractions

It is urged that tenders be made on the pointed forms and for­

erg m

warded in the special envelopes which will be supplied by Federal Reserve Banks
or Branches on application therefor.

0011)1

Tenders will be received without deposit from incorporated banks and
trust companies and from responsible and recognized dealers in investment securi­
ties.

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

lie d
it tie Fed
to «louai
¡I fte aioi
% tendei

%tto a(
K and 1

TREASURY DEPARTMENT
Washington

FOR RELEASE, MORNING NEWSPAPERS,
Friday, November 13, 1942.____ _

The Secretary of the Treasury, by this public notice,
invites tenders for $500,000,000, or thereabouts, of 01-day
Treasury bills, to be issued, op. a discount basis under competi­
tive bidding.

The bills of this series will be dated November 18,

1942, and will mature February 17, 1943, when the face amount
will be payable without interest.

They will be issued in bearer

form only, and in denominations of $1,000, $5,000, $10,000,
$100,000, $500,000, and $1,000,000 (maturity value).
Tenders will be received at Federal Reserve Banks and
Branches up, to the closing, hour,, two o fclock.p.m., Eastern.War
time, Monday^ November 16, 1942. Tenders will not be received
at the Treasury Department, Washington. Each tender must be
for an even multiple of $1,000, and tile-price offered.must be
expressed on-the-basis o f ,100, with not'more,than three deci­
mals, e. g., 99*925. Fractions.may .not be used. It is urged
that-tenders, be made on the printed forms, and forwarded, i n ,jthe
special envelopes which will be supplied by Federal Reserve
Banks or Branches on application .therefor;..
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 pf 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 pub­
lic announcement will be made by the Secretary of the Treasury
of the amount and price range of accepted bids. Those submit­
ting tenders will be advised of the acceptance or rejection
thereof. The Secretary of the Treasury expressly reserves the
right to accept or reject any or all tenders, in Whole or in
part, and his action in any such respect shall be final.
34-8

(Over)

- 2 -

Payment of accepted tenders at the prices^offered must be made
or completed- at the Federal Reserve Bank in cash or other im­
mediately available funds on November 18, 1942»
The income derived from Treasury bills, whether interest
or gain from the sale or other disposition of the bills, shall
not have any exemption, as such, and loss from the sale or ^
other disposition of Treasury bills shall not have any;special
treatment, as such, under Federal tax Acts now or hereafter en­
acted. The bills shall be subject to estate, inheritance,
gift, or other excise taxes, whether Federal or State, but
shall be exempt from all taxation now or hereafter imposed on
the principal or interest thereof by any State, or an^y of> the
possessions of the United States, or by any local ..taxing auth­
ority* For purposes of taxation the amount of discount at
which Treasury bills are originally sold ,by the^United .States
shall be considered to be interest. Under Sections 42 and
117 (a) (1) of the Internal Revenue Code, as amended by Section
115 of the Revenue Act of 1941, the amount of discount at which
bills issued hereunder are sold shall not be considered^to ac­
crue until, such bills shall be sold, redeemed or otherwise dis­
posed o-f, and such hills are.excluded from consideration as
capital assets. Accordingly, the owner of Treasury bills ^
(other than life insurance companies) issued hereunder need in­
clude in his income tax return only the difference between the
price paid for such bills, whether on original^issue^or on sub­
sequent purchase, and the amount actually received either upon
sale or redemption at maturity during the taxable year for
which the return is made, as ordinary gain or loss.
Treasury Department Circular No. 418, as,amended, 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.

-oOo-

he added

jjjut taxes aimed at inflation, M
must he so designed as not to render more difficult the
jobs of price control,

rationing,

and other direct methods

of inflation control.
^Flexibility and
difficulties

freedom from serious administrative

were mentioned by the Treasury official as other

merits which wartime tax enterprises should have.
^ ^ f ^ t h e importance of flexibility, he said:
return to a
those

"The

world of peace will require changes as radical as

through which we are now passing. The problems that now

call for taxes capable of speedy adjustment to changed conditions
will after the war plague us in reverse."
-o-

2

^Labor ,materials and equipment all have had to be
shifted from the production of comforts to the production of
^ ¿ J J
the implements of war, he '•pointed!' e u t , and the resulting
necessity of reducing
war's economic

our current standards of living is the

cost as distinguished from its monetary

cost.

He explained how well-designed tax measures
can
¿the distribution of this cost
help accompTTShyfrtofcfift'i gitoyilgnilh*n faïxvïy, and m r n e d agai nst
the

unfairness of inflation as a HuntisoñMKf distribution^method.
^Protection from undue hardship of those with

minimum incomes was stressed by Mi». P aul as of much
important e .
J"The exemption of a minimum level of income from
taxation and the imposition of a light burden on workers
whose standard of living is barely adequate f o r productive
the
efficiency
is ^ social cost of providing vigorous workers in
our steel mills,

in our coal pits, and on our farms," he said.

shall lose much more than we gain if we so reduce
basic living standards as to impair morale and productive
efficiency ....The w e l l fed and adequately clothed worker
is a better worker, and the maintenance,
oy week, month by month,

day by day, week

of intense and enthusiastic productive

effort requires adequate economic Incentive,"
Jíaxes can relieve the spending pressure which
threatens a runaway inflation either by absorbing excess
purchasing power or by deflecting it from the market for consumer
goods and services, Mr. Paul said.

S 4 t1 c t » d r a f t ;— o f U o v t l -5 P a u l'

tfo'&frp r o t

>2-

J&- >h

Columbus,Ohio - Shouldering by this country of the
greatest production job
in world history 1 has
taxation

ever assigned to a national economy
created tasks for our wartime

which go far beyond the simple raising of revenue,

the annual meeting of the Ohio Chamber of Commerce was told here
today by Randolph E. Paul, General Counsel of the U.S.
Treasury Department.
Paul addressed the Ohio Chamber

on the

subject "Objectives of Tax Policy in Wartime."
g u m m i n g up "the criteria which must govern our
tax policy

in time of war," Mr. Paul said:

ΓTax action must be directed toward the removal of
the upward pressure of excess spending power on prices and
costs; toward the fair distribution of the economic burden
of the war; toward the maintenance of productive incentives
and the protection of the health and morale of our
population,

and finally, toward the creation of a fa/vorable

environment for a high level of business activity in the
post-war

period."

1 11ilf ■ 11 i « III I É III IPII Inn ■ f II I II M
l II n i II II iIilLJLU.pL
I^How
jlow

these problems of national welfare

have been

brought about irithe mobilization to meet war needs was
recited by Mr. P aul.

TREASURY DEPARTMENT
Washington
POR RELEASE 2*00 P.M., E.W.T,,
Friday, November 13» 1942,

Press Service
Ho, 34-9

Columbus, Ohio - Shouldering by this country of the
"greatest production dob ever assigned to a national economy
in world history1* has created tasks for our wartime taxation
which go far beyond the simple raising of revenue, the an­
nual meeting of the Ohio Chamber of Commerce was told here
today by Randolph E. Paul, General Counsel of the U. S.
Treasury Department,
Mr* Paul addressed the Ohio Chamber on the subject
"Objectives of Tax Policy in Wartime"*
Summing up "the criteria which must govern our tax pol­
icy in time of war," Mr. Paul said;
"Tax action must be directed toward the removal of the
upward pressure of excess spending power on prices and costs;
toward the fair distribution of the economic burden, of the
war; toward the maintenance of productive incentives and the
protection of the health and morale of our population, and
finally, toward the creation of a favorable environment for
a high level of business activity in the post-war period,"
How these problems of national welfare have been brought
about in the mobilization to meet war needs was recited bv
Mr. Paul.
Labor, materials and equipment all have had to be shifted
from the production of comforts to the production of the im­
plements of war, he said, and the resulting necessity of re­
ducing our current standards of living is the war*s economic
cost as distinguished from its monetary cost. He explained
how well-designed tax measures can help accomplish the dis­
tribution of this cost fairly, and warned against the unfair­
ness of inflation as a distribution method.
Protection from undue hardship of those with minimum incomes was stressed by Mr. Paul as of much importance.

2

tion IndSt h f i m p o s m o n ao ? i * ° f incone from taxastandard of living is barelv a * ? ™ 5ur2en on worker» whoso
ciencv ir + ^ 0
n barely adequate for productive effiour steel mills, in our°coal pYts^anf vigorous workers in
said.
ur oal plts> a^d on our farms,” he

basic livi!^1s b a n ^ r ™ CL mtoeiIpairWmoraie ai/* s? r2?uce
?"? « a 5 , S t S “ ii“o?Si4pS

?

S

f

month by month, of inten^e^nd^ri+h dSy
day’ week by week
requires adequate economic S c e n t t v e i « ^ 10 Pr°dUOtiVe a« ° f
a runawaySinflationEither

power or by deflertin^ i + *wL,
and services, Mr. Paul said.

WhiCh >
thr?atens

sort>lriS excels purchasing
market for consumer goods

.sslsned^astnot0to1?Inder mSi^difficul/the13’ h ^ V ® s° de‘
8 8 :

« *

o t h K i S f f s g o S * ^ S ^ i i l S 0?,«0? ;

ficulties^were^entione^by^he^reasur^officiai^as^^th dif‘
merits which wartime tax enterprises shouW have!
r
to a w o r l f o ^ p e a c r w i i r r f m ^ r « 1^ ^ ’ he said:
"The return'
through which we are now passing
^ r n h i radl°al.as ^ o s e
call for taxes csnnhil
5s *
e Probl e^s that now
ditions will after the wfr p i l g u e ^ f i ^ r e v e r s e ; ^ " 6615 C°n '

-o0o~

"TVeos uv vj
0$

£ev*iw&.

$ H

FCH IMMEDIATE RELEASE,
Monday, November 16, 1942»

* / o

y

'°

Commissioner of Internal Revenue Guy T. Helvering announced
today the opening of the Philadelphia office of the new Salary
Stabilization Unit of the Bureau of Internal Revenue.

The Unit will

be located in Suite 1313, Market Street National Bank Building,
Philadelphia.

The office will be in charge of Walter Perry, who has

a record of more than twenty years of responsible work in the Internal
Revenue Service.
The territorial jurisdiction of the Philadelphia office will
cover the States of Pennsylvania and New Jersey. That office will
rule, for and on behalf of the Commissioner of Internal Revenue, on
all requests and applications for salary increases and decreases
coming within the jurisdiction of the Commissioner as defined in
the regulations of the Economic Stabilization Director and approved
by the President on October 27, 1942.
The jurisdiction of the Commissioner covers all salaries
over $5,000 per year, and salary payments of less than $5,000 per
year in the case of executive, administrative or professional employees
not represented by labor organizations.
Under the present arrangement employers in the States of Pennsylvania
and New Jersey will address their requests for rulings to "Head, Salary
Stabilization Unit, Suite 1313, Market Street National Bank Building,
Philadelphia, Pennsylvania*, and will obtain rulings from that office
as to proposed salary adjustments. Whenever necessary, employers m y
confer with the members of the Philadelphia office regarding proposed
adjustments. Procedure will be provided to permit appeals to the
Commissioner of Internal Revenue in Washington in case of adverse rulings
by the Philadelphia office.
Although rulings of tha Philadelphia office are subject to modifica­
tion or reversal of the Commissioner of Internal Revenue in Washington,
employers obtaining favorable rulings from the Philadelphia office can in
each instance rely on such rulings. No modification or reversal by the
Commissioner of the ruling made by the Philade3{Ha®ffio« will be given
retroactive effect.

TREASURY DEPARTMENT
Bureau of Internal Revenue
Washington
FOR IMMEDIATE RELEASE,
Monday, November 16, 1942,
11/ 13/42

Press Service
No, 34-10

Commissioner of Internal Revenue Guy T. Helvering announced
today the opening of the Philadelphia office of the new Salary
Stabilization Unit of the Bureau of Internal Revenue,

The Unit

will be located in Suite 1313» Market Street National Bank
Building, Philadelphia.

The office will be in charge of

Walter Perry, who has a record of more than twenty years of re­
sponsible work in the Internal Revenue Service.
The territorial jurisdiction of the Philadelphia office
will cover the States of Pennsylvania and New Jersey.
That of­
fice will rule, for and on behalf of the Commissioner of In­
ternal Revenue, on all requests and applications for salary in­
creases and decreases coming within the jurisdiction of the
Commissioner as defined in the regulations of the Economic Stab­
ilization Director and approved by the President on October 27,
1942.
The jurisdiction of the Commissioner covers all salaries
over $5,000 per year, and salary payments of less than $5,000
per year in the case of executive, administrative or profession­
al employees not represented by labor organizations.
Under the present arrangement employers in the States of
Pennsylvania and New Jersey will address their requests for rul­
ings to wHead, Salary^Stabilization Unit, Suite 1313, Market
Street National^Bank Building, Philadelphia, Pennsylvania” , and
will obtain rulings from that office as to proposed salary ad­
justments.
Whenever necessary, employers may confer with the
members of the Philadelphia office regarding proposed adjust­
ments. Procedure will be provided to permit appeals to the Com­
missioner of Internal Revenue in Washington in case of adverse
rulings by the Philadelphia office.
Although rulings of the Philadelphia office are subject to
modification or reversal of the Commissioner of Internal Revenue
in Washington, employers obtaining favorable rulings from the
Philadelphia office can in each instance rely on such rulings.
No modification or reversal by the Commissioner of the ruling
made by the Philadelphia office will be given retroactive effect,

-0O0-

FOR IMMEDIATE RELEASE,
Tuesday» November.17, 194 2.
Commissioner of Internal Revenue Guy T. Helvering announoed today
the opening of the Los Angeles office of the new Salary Stabilisation TJhit
of the Bureau of Internal Revenue.

The Unit will be located in Suite 770,

Subway Terminal Building, Los Angeles.

The office will be in charge of

Hugh Duoker, who has a record of more than twenty years of responsible work
in the Internal Revenue Service.
The territorial jurisdiction of the Los Angeles office will cover
the Sixth Collection District of California, and Arizona. That office will
rule, for and on behalf of the Commissioner of Internal Revenue, on all
requests and applications for salary increases and decreases coming within
the jurisdiction of the Commissioner as defined in the regulations of the
Economic Stabilization Director and approved by the President on October 27,
1942.
The jurisdiction of the Commissioner covers all salaries over #5,000
per year, and salary payments of less than #5,000 per year in the case of
executive, administrative or professional employees not represented by
labor organizations.
Under the present arrangement employers in the Sixth Collection
District of California, and Arizona, will address their requests for rulings
to "Head, Salary Stabilization Unit, Suite 770, Subway Terminal Building,
Los Angeles, California", and will obtain rulings from that office as to
proposed salary adjustments. 'Whenever necessary, employers may confer
with the members of the Los Angeles office regarding proposed adjustments*
Procedure will be provided to permit appeals to the Commissioner of Internal
Revenue in Washington in case of adverse rulings by the Los Angeles office.
Although rulings of the Los Angeles office are subject to modification
or reversal cf the Commissioner of Internal Revalue in Washington, employers
obtaining favorable rulings from the Los Angeles office can in each instance
rely on such rulings. Ho modification or reversal by the Commissioner of
the ruling made by the Los Angeles offioe will be given retroactive effect.

TREASURY DEPARTMENT
Bureau of Internal Revenue
Washington, D. C.

FOR IMMEDIATE RELEASE,
Tuesday, November 17. 1942.
1 1 / 1 3 / 4 2 ---- z- - - - -

Press Service

No. 34-11

Commissioner of Internal Revenue Guy T. Helvering
announced today the opening of the Los Angeles office of the
new Salary Stabilization Unit of the Bureau of Internal Revenue.
The Unit will be located in Suite 770, Subway Terminal Building,
Los Angeles.

The office will be in charge of Hugh Ducker, who

has a record of more than twenty years of responsible work in
the Internal Revenue Service,
cover^rt L tSixti0r o l h f e i Sdn?ti0? ¥ |he Los AnEeles office will
Bixth Collection District of California, and Arizona

InternalRevenue ro i h l i ° r
f 1 be^alf of the Commissioner of
tvilfrnaJ' Kevanue, on aH requests and applications for salarv
increases and decreases coming within the jurisdiction of fhc
ber 2 V 1 9 4 2 ? Dlrector and aPProved by the President on Octo-

over $5eo^o’ieJivrfnn °f the Commissioner covers all salaries
ilr vear in
7
’ 2nd salary Payments of less than $5,000
? th
! of exe°ntive, administrative or profes­
sional employees not represented by labor organizations.

ill

lectiondDi’a f Hofrofert1^ ran?ement emPloJTers in the Sixth ColreqiesLDfoi
Ardzona’ wil1 address their
Suite 77n
1 I
? e£di Salary Stabilization Unit,
. J » ii?0,i>5ubway f?rminal Building, Los Angeles, California"
adiustientstaim e UllneS fr°m that °ffice a ® * 0 Proposed salary
meibeis of tbeW ^ n r ?ecesf ^ 7, emPioyers may confer with the
Procedure w i n k
°fflce regarding proposed adjustments,
of Internal R e v e n u e ^ n ^ a a V ° ?e m !t appeals to the Commissioner

tL : E L ln g e L r o ? fic e .

ln g t°n “ • CaSe ° f adVerSe r U li^ S

■ ■ ■ ■

H

H

«

Jf'
/v'
FOR IMMEDIATE RELEASE,
Tuesday, November 17, 1942,

Commissloner of Internal Revenue Guy T * Helvering announced todsy
the opening of the Chicago office of the new Salary Stabilisation Unit
of the Bureau of Internal Revenue*
South LaSalle Street, Chicago.

The Unit will be located at 208

The office will be in charge of Porter

Linder, who has a record of more than twenty years of responsible work
in the Internal Revenue Service*
The territorial jurisdiction of the Chicago office will cover the
States of Illinois, Wisconsin, Minnesota, North Dakota, South Dakota and
Indiana* That office will rule, for and on behalf of the Commissioner
of Internal Revenue, on all requests and applications for salary increases
and decreases coming within the jurisdiction of the Commissioner as defined
in the regulations of the Economic Stabilization Director and approved by
the President on October 27, 1942.
The jurisdiction of the Commissioner covers all salaries over #5,000
per year, and salary payments of less than #5,000 per year in the case of
executive, administrative or professional employees not represented by
labor organizations.
Under the present arrangement employers in the States of Illinois,
Wisconsin, Minnesota, North Dakota, South Dakota find Indiana will address
their requests for rulings to "Head, Salary Stabilization Unit, 208 South
LaSalle Street, Chicago, Illinois", and will obtain rulings from that
office as to proposed salary adjustments. Whenever necessary, employers
may confer with the members of the Chicago office regarding proposed
adjustments. Procedure will be provided to permit appeals to the Commis­
sioner of Internal Revenue in Washington in case of adverse rulings by
the Chicago office.
Although rulings of the Chicago office are subject to modification
or reversal of the Commissioner of Internal Revenue in Washington, employers
obtaining favorable rulings from the Chicago office can in each instance
rejy on such rulings. No modification or reversal by the Commissioner of the
ruling made by the Chicago office will be given retroactive effect.

B

, TREASU RY DEPARTMENT
u r e a u o f In t e r n a l R evenue
W a s h in g t o n

POE B ffilE D IA ÏE R E L E A S E ,
T u e sd a y , N o v e m b e r 1 7 , 1 9 4 2 ,

11/13/42

P re ss

----------

C o m m is s io n e r o f I n t e r n a l R e v e n u e G u y T .
to d a y th e

o p e n in g

iliz a t io n

U n it

o f t h e C h ic a g o

o f th e

B u re a u

o f f ic e

H e lv e r in g

a t 2 0 8 S o u t h L a S a lle

w i l l be in

c h a rg e

S tre e t,

o f P o r t e r L in d e r ,
o f r e s p o n s ib le

C h ic a g o .

T h e U n it w i l l
The o f f ic e

w ho h a s a r e c o r d

w o rk i n

anno un ced

o f t h e new S a la r y S t a b ­

o f In t e r n a l R e ve n u e .

b e lo c a t e d

th a n tw e n ty y e a rs

S e r v ic e

■No. 34-12

o f m o re

th e In t e r n a l R even u e

S e r v ic e *
t e r r i t o r i a l ¿ j u r i s d i c t i o n o f t h e C h ic a g o o f f i c e w i l l
c o v e r t h e S t a t e s o f I l l i n o i s , W is c o n s in
6
o i i l o ‘- w lj -1
, M in n e s o t a , N o r t h
D a.co t a , S o u t h D a k o ta a n d I n d ia n a .
That
o f f ic e w il l r u le , f o r
a n a on b e h a lf o f t h e C o m m is s io n e r o f I n t e r n a l R e v e n u e , on a l l
r e q u e s t s a n d a p p l i c a t i o n s f o r s a l a r y in c r e a s e s a n d d e c r e a s e s
c o m in g w it h in t h e j u r i s d i c t i o n o f t h e C o r a m is s io n e r a s d e f in e d
t h e r e g u l a t i o n s o f t h e E c o n o m ic S t a b i l i
s a t io n D i r e c t o r a n d a p -1
p r o v e d b y t h e P r e s id e n t on O c t o b e r 2 7 , I 940
¡¡M E
T <— •

over
° 5 M sh%
covers
l l s a la r ie
s
er «.?p,ouo pv,r ¿ e a r , and
a laConrflissioner
r y payments o
f le s s a thsn
non
P
T 11,

j

es n o t re p re s e n te d

b y la b o r o r g a n i z a t i o n s .

U n d e r th e p r e s e n t a rra n g e m e n t

e m p lo y e rs

in

th e s ta te *

n-f

In lia h M N lM d d r e h
m n n e s o t e ,W o rth P a L t a , L u t h
inala ia will aaaress their reauests for rul^ np-s tn
Stabilization Unit, 208 South LaSalle Street*, Chicago Illinois«

G o t

adlu^menM
"• r"U ”SS fron that
as to proposed^salary
m em bers o f t h e C h ir s W n n f « „
“r ’ CI? P ^ ° / e r s m ay c o n f e r w it h t h e
P ro c e d u re v k t u
5
o f f i c e r e g a r d in g p r o p o s e d a d ju s t m e n t s ,
o f I n t e M -1 p M M , P ? V iw e d , t o P e r it llt a p p e a ls to t h e C o m m is s io n e r
S h e ^ h S
o f f i c e ? ^ W a S h ln ^ on i n c a s e o f a d v e r s e r u l i n g s ^ *
i f i c Ta.,t i o. .
n ° o r h rr ee vv ee rr ss o
o if tt hh e° C° ol io
0 «n ei °r eo f a T
r en thrmi
s u b j e c t t o m oda ll o
m amSis°s.io
C h io a g o k f f ie e
e m p l o y e r s o b t a in in g f a v o r a b le r u l i n g s
C h ic a g o o f f i c e c a n i n e a c h in s t a n c e r e l v on s u c h n l u r , » «
if „
b y f t h f l l c a g M o f ^ ^ f w i l l k ih e . Co® l i s s i° n o r o f th e r u lin g
■
n*~ca^ ° o f- ^ ce W ill b e g iv e n r e t r o a c t i v e e f f e c t .

-0O0-*

m ade

fro m t h e

&JvJ

TREASURY DEPARTMENT
F IS C A L S E R V IC E
WASHINGTON

BUREAU O F ACCO UN TS
O F F IC E O F TH E CO M M ISSIO N ER

November 7, 1942

TO m .

During the month of October the following
market transactions took place in direct and guaran­
teed securities of the Government:
S a l e s ................ 11,000,800
Purchases ............

Net sales.......... $1,000,800

TR EA S U R Y D EPAR TM ENT
W a s h in g to n

FO R

IM M E D IA T E

R ELEA S E,

P re s s

S e rv ic e

N o .

^yC^\y-4^<A^UUl. ¡U
M a rk e t

tr a n s a c tio n s

in

' S i- 13

/ 9V
G o ve rn m e n t

s e c u r itie s

fo r

T re a s u ry

cin v e s tm e n t

and

o th e r

a c c o u n ts

in

er r p t n ï ï i h r _ r r

r e s u lte d

ln

11, o o &, $ O o
n e t

s a le s

o f -^ îltS lQ O -, Q O Q *

S e c re ta ry

M o rg e n th a u

announced

to d a y .

FOR IMMEDIATE RELEASE,
Monday, November 16, 1942,

Press Servi
No. 34-1

Market transactions in Government securities for
Treasury investment and other accounts in October, 1942,
resulted in net sales of $1,000,800 Secretary Morgenthan
announced today.

CO o

TREASURY DEPARTMENT
Washington

O b je c tiv e s o f Tax p o lic y In W artim e
An a d d re ss by Randolph E . F a u l, G e n e ra l C o u n se l o f
the U. S . T re a s u ry D epartm ent, b e fo re th e a n n u a l
m eeting o f the Ohio Chamber o f Commerce,
Colum bus, November 1 3 , 1942.
The U n ite d S ta te s i s fa c e d w ith th e b ig g e s t p ro d u c tio n jo b e v e r
a s s ig n e d t o a n a t io n a l economy in w o rld h is td ry *
I t i s c a lle d upon
to produce and to tra n s p o rt to w id e sp re a d b a t t le f r o n t s a l l th e
d ix ie r e n t weapons needed t o w in t h is war« I t m ust p ro v id e m illio n s
o f *aen in i t s own armed fo rc e s and th e arm ed fo rc e s o f o u r a l l i e s
w ith v a s t q u a n t it ie s o f th e se weapons« And i t m ust in s u re th a t t h is
f ig h t in g equipm ent i s second to none in q u a lit y »
The c o u n try i s m a g n ific e n tly equipp ed to do such a job* Our
p le n t if u l s u p p ly o f n a t io n a l re s o u rc e s h as lo n g been the en vy o f
th e w o rld . We have the p ro d u c tiv e in g e n u ity and t a le n t to make th e
most o f th e se re s o u rc e s » Our endowment o f e n g in e e rin g g e n iu s , o f
m a n a g e ria l a b i l it y , and of la b o r s k i l l s , co u p le d w ith o u r s u p p lie s
o f m a t e r ia l re s o u rc e s , have id e n t if ie d e f f ic ie n c y and mass pro duc­
t io n w ith th e A m erican economy»
B ut v a s t as th e y a re , o u r re s o u rc e s a re not lim it le s s *
They
can no t meet th e re q u ire m e n ts o f w ar and a t th e same tim e p ro v id e
th e l ib e r a l sta n d a rd o f liv in g t o w hich m ost o f u s have become
'accustom ed* Men and m a t e ria ls engaged in p ro d u c in g im plem ents o f
w ar, cannot a t th e same tim e produce the co m fo rts o f peace# We
can n o t have both*
F o r the d u ra tio n th e re i s no dilemma# I t i s our n a t io n a l p o lic y
to use o u r re s o u rc e s f o r w ar p ro d u c tio n to the f u l l e s t e x te n t c o n s is t e n t
w ith th e m aintenance o f th e c i v i l i a n h e a lth and m orale w h ich a re e sse n ­
t i a l to th a t p ro d u c tio n . We have moved a lo n g way in th a t d ir e c t io n «
(X ir w ar o u tp u t has d o u b le d , th en do ub led a g a in , and th e n do u b led s t i l l
a g a in . ^Yet o u r g o a l i s s t i l l f a r away, and econom ic m o b ilis a t io n f o r
w ar i s f a r from com plete* The jo b ahead o f u s i s too b ig f o r an y com­
p la c e n c y tow ard w hat we have a cco m p lish e d .
A few f ig u r e s w i l l in d ic a t e the m agnitude o f o u r o p e ra tio n s*
F e d e ra l e x p e n d itu re s d u rin g the f i s c a l y e a r 1943 w i l l amount to
b i l l i o n , compared w ith >33 b i l l i o n d u rin g th e th re e 1 y e a rs , 1 9 1 7 -1 9 1 9 ,
o f W orld e a r I* The A m erican peo p le a rc t h is y e a r sp e n d in g f o r w ar
ab o u t „600 f o r e v e ry mah, woman, and c h ild in the land *
These a re b re a t h -t a k in g fig u re s * Y e t th e y t e l l o n ly p a r t o f the
s t o r y . The com plete s t o ry cannot be t o ld , f o r we can no t know how lo n g
the w ar w i l l l a s t . Nor do we know w hat co u rse fu tu re w ar e x p e n d itu re s
w i l l take* To d a te , the w ar program , as a w h o le, t o t a ls C230 b i l l io n

.- 2 -

in a p p ro p ria tio n s a n d n t-t a u t h o r iz a t io n s betw een Ju n e , 19 4 0 , and Sep­
tem ber, 1942*
The c o n v e rs io n o f an economy t r a d it io n a lly devo ted to peace in t o
an economy w h ic h c a n produce w ar m a t e r ia l in such m agnitudes i s w ith o u t
p reced en t* The s ta g e s o f developm ent m ust have been a p p a re n t to an
in d u s t r ia l community su ch as y o u rs in Ohio*
.when c o n v e rs io n to w ar began, we had a t o u r command a s u b s t a n t ia l
re s e rv e o f unem ployed n a t u r a l and human re so u rc e s* A lth o u g h many who
were unem ployed d u rin g the d e p re s s io n had found w ork by 1940 , th e re
s t i l l rem ained in 1940 a welcome su p p ly ; o f untapped manpower* tie a ls o
had an a p p a re n t abundance o f raw m a te ria ls * M o reo ver, many f a c t o r ie s
had been p a r t ly o r w h o lly id le , o r had been o p e ra tin g o n ly a s m a ll p a rt
o f the tim e* . These p la n t s were a v a ila b le fo r. a n e x p a n sio n o f pro d u ctio n*
F u lle r use o f e x is t in g f a c t o r ie s , th e c o n s t ru c t io n o f new in d u s t r ia l
f a c i l i t i e s , a n d 'th e t r a in in g o f w o rk e rs , e n a b le d u s to in c re a s e s t e a d ily
o u r p ro d u c tiv e c a p a c ity * By u s in g men, m a t e r ia ls , and f a c i l i t i e s th a t
had fo rm e rly been id le , by w o rk in g lo n g e r h o u rs , and by a d d in g new
c a p a c it y , we w ere a b le f o r a b o u t a y e a r and a .h a lf to in c re a s e o u r output
o f arm am ents and a t the same tim e to c o n tin u e to in c re a s e , o u r s u p p ly o f
c i v il i a n goods* As Consum ers, we had a t the same tim e b o th more money
and more goods* Both our money incom e and o u r r e a l income w ere su b sta n ­
t i a l l y h ig h e r, than th e y had e v e r been b e fo re «
In t h is e a r ly stag e the r e a l c o s t o f p ro d u c in g th e im plem ents o f
w a r ----- th e e x t ra w o rk, th e a d d it io n a l p re s s u re , and the s a c r if ic e o f
th in g s we m ight have h a d ----- o fte n seemed rem o te.and u n re a l* The p r e v i­
o u s ly Unemployed p e rso n re g a rd e d h is new 30b , even though i t re q u ire d
h ard w o rk, a s a b le s s in g r a t h e r th an a' burden* Hi.s h ig h e r incom e
en a b le d him to b u y more goods and s e rv ic e s *
Because c i v i l i a n o u tpu t
was expanded, no one e ls e had t o r e c e iv e le s s -g o o d s and s e r v ic e s when
the new ly-em ployed p e rso n re c e iv e d more inco m e. There was r e la t iv e
p le n t y f o r everybody*
As our w ar o u tp u t expanded, i t was no lo n g e r p o s s ib le " t o depend
e n t ir e ly upon the employment o f equipm ent and la b o r th a t had fo rm e rly
' been id le * Tie had to t u rn to o th e r s o u rc e s . Tie had to d e v e lo p new
s u p p lie s o f la b o r , on one hand d ra w in g -u p o n th e women o f o u r c o u n try
and on th e o th e r: t r a in in g much o f the e x is t in g la b o r fo rc e in h ig h e r
s k ills *
We had to c u r t a il d r a s t ic a lly p r iv a t e c o n s t ru c t io n and the
p ro d u c tio n o f c a p it a l go o d s. In s te a d o f m a in ta in in g , r e p la c in g , and
a d d in g to our e x is t in g equipm ent in the norm al w ay, we w ere p ro d u cin g
the im plem ents o f war* H o uses, s t r e e t s , t ra n s p o r t a t io n f a c i l i t i e s ,
a n d , in c o n s id e ra b le m easure, even .fa c t o rie s and equipm ent devo ted to
p ro d u c in g consum er. goods, w i l l have to .se rve in s u b s t a n t ia lly t h e ir
p re s e n t c o n d itio n w h ile we go ab o u t th e g rim b u s in e s s o f w in n in g the w ar.

When a n o th e r su p p le m e n ta l so u rce o f war.; p ro d u c tio n , the s to c k s
o f b a s ic accum ulated re s o u rc e s - — f o r exam ple, o u r s c ra p m etal ands t o c k p ile s o f ru b b e r ~~ a rc d e p le te d , th e y can n o t be, re p la ce d «
U n t il r e c e n t ly th ese th re e so u rc e s — unem ployed f a c i l i t i e s ,
d e fe rre d m aintenance and c o n s t ru c t io n , and s t o c k p ile s —- have been
s u f f ic ie n t t o p ro v id e th e m ajor p a rt o f p u r w ar output* We have s
drawn h e a v ily on o n ly one segment o f consum er goods o u tp u t — d u ra b le
goods, su ch a s a u to m o b ile s, r e f r ig e r a t o r s , s to v e s , and tlto lik e *
U n t il r e c e n t ly v/c have m a in ta in e d the s u p p lie s o f consum er non­
d u ra b le goods and s e r v ic e s a t le v e ls a s h ig h a s have e v e r been
re a ch ed in t h is , co u n try*
These happy d ays a re a lm o st h isto ry #
The demands o f t o t a l w ar .
p la y no f a v o r it e s w ith so u rc e s o f in c re a se d , output* To m.,et the demands
01 t o t a l w ar, equipm ent and la b o r m ust be s h if t e d fro m th e p ro d u c tio n
o f the c o m fo rts, and even some o f the th in g s we have come to re g a rd
a s the n e c e s s it ie s o f l i f e , to the p ro d u c tio n o f th e im plem ents o f
war* To produce more ta n k s , p ia n o s , and g u n s, and to fe e d our a rm ie s
and o u r a l l i e s , we s h a ll have t o a c c e p t n o t o n ly fe w e r a u to m o b ile s,
b u t a ls o le s s h e a t, le s s c lo t h in g , and even lo ss.fo o d #
Had we p lan n ed t h is w a r, our tim in g , o f w ar p ro d u c tio n c o u ld have
been b e tte r* . I f , f o r exam ple, th e U n ite d S ta te s had embarked on re ­
armament a t th e d e p th o f the in d u s t r ia l d e p re s s io n when a la rg e p a rt
o f o u r human and m a t e ria l re s o u rc e s wore id le , th e n a tio n c p u ld have
produced w ar m a te ria ls w ith o u t d is p la c in g e x is t in g c i v il i a n p ro d u ctio n * '
A t t h a t tim e o u r sta n d a rd o f liv in g was s u b s t a n t ia lly 'lo w e r th an in
194 0, w h ich m arked the b e g in n in g o f o u r d efen se program* I f was und er
su ch c irc u m sta n c e s th a t Germany began to rearm* She was th u s en a b le d
to u t il i z e f o r w ar p u rp o se s s u b s t a n t ia lly a l l o f the in c re a s e d out­
p u t •r e s u lt in g from in c re a s e d em ploym ent o f men and m achines* We
can no t devote a com parable p ro p o rtio n o f o u r re s o u rc e s to w ar w ith ­
out re t u rn in g to d e p re s s io n ^ le v e ls o f consum ption:, and w ith o u t;
r e t a in in g a t the same tim e p r o s p e r it y le v e ls o f incom e and pro duc­
tio n * On a p h y s ic a l le v e l we ca n , how ever, more e a s ily c u r t a il
c u rre n t c i v il i a n p ro d u c tio n because o f the consum er c a p it a l we have
accum ulated d u rin g the y e a rs o f r e la t iv e ly h ig h o u tp u t o f consum er
goods*
The n e c e s s it y o f re d u c in g o u r c u rre n t sta n d a rd s o f liv in g b rin g s
u s fa c e t o fa c e w ith th e econom ic c o s ts o f the war# The m onetary
term s in w h ich I have s ta te d th e problem a re m e re ly sym bols f o r
the u n d e rly in g r e a l h o sts* The c i v il i a n goods we s h a ll have to
do w ith o u t, in o rd e r to push the p ro d u c tio n o f m ilit a r y and n a v a l_ k
goods to the. lim it , i s th e r e a l s a c r if ic e we m ust make* I f we
a c c e p t th e p re s e rv a t io n o f the fo u r freedom s a s th e g o a l o f the

w a r, wo have no c h o ic e as
to bear* Our d e s ir e s f o r
t io n s , and f o r many o th e r
d e s ire f o r th e d e m o cra tic

to the m a t e ria l b u rd en s we s h a ll have
r a d io s , f o r t r a v e l, f o r e x te n s iv e v a ca ­
t h in g s , w i l l have to g iv e way to our
way o f lif e *

The h ard econom ic f a c t s o f w ar — o u r d w in d lin g o u tp u t o f
consum er goods and s e r v ic e s — can be h id d e n f o r a tim e by b u lg in g
in v e n to rie s * F o r a tim e s to re s can c o n tin u e t o s u p p ly goods from .
ample sto ck s* B ut the p r o t e c t iv e c o v e rin g o f in v e n t o r ie s i s w e a rin g
t h in ¡in dozens o f p la c e s* B are sp o ts in s to re s h e lv e s a re becom ing
commonplace* The C h ristm a s ru s h w i l l f u r t h e r d e p le te s to c k s o f
a v a ila b le go o d s. The s c a r c it y o f n y lo n s to c k in g s and o f ru b b e r
p ro d u c ts has made th e h e a d lin e s 5 b u t th e y a re o n ly p a r t o f w hat
has a lre a d y o c c u rre d , and orF.y a f o r e t a s t e o f w hat i s to come*
E ach s c a r c it y th a t d e v e lo p s d iv e r t s p u rc h a s in g power in t o o th e r
c h a n n e ls , c re a t in g a d d it io n a l s c a r c it ie s and m aking th e r e a l c o s t
o f w ar more and more e v id e n t*
T h is r e a l econom ic c o s t m ust be met now, w h ile we a re f ig h t in g
the war* I t ca n n o t bo s h if t e d to fo re ig n c o u n t r io s » I t can no t be
s h if t e d to the f u t u r e « He w i l l n o t, as. the A x is has done, o b ta in
r e a l re s o u rc e s by lo o t in g conquered t e r r it o r y . He c a n n o t, because
o f the lim it a t io n s o f the in d u s t r ia l c a p a c it y o f th e n e u t r a ls and
o f o u r a l l i e s , o b ta in r e a l re s o u rc e s b y b o rro w in g goods fro m a b ro a d *
And b o rro w in g d o lla r s .a t home in no sense p o stp o nes the c o s t s to
the f u t u r e . .
The econom ic c o s t o f th e w ar w ould n o t be changed ' i f we c a n c e lle d
a l l ta x e s tom orrow . The c o u n try , a s a w h o le , can no t in c re a s e the
t o t a l s u p p ly o f goods m e re ly b y f in a n c ia l m a n ip u la tio n . The m a t e ria ls
o f w ar m ust come from th e p re s e n t g e n e ra tio n o f A m e rica n s. They —
and no one e ls e — can p ro v id e th o se m a t e r ia ls . They can do so o n ly
by hard w ork and th e postponem ent o f th e p le a s u re s o f consum ing a s
c iv ilia n s much o f th e f r u i t s o f t h e ir w o rk•
The p h y s ic a l r e a li t i e s o f h a rd w ork and s h o rt s u p p lie s have a
m onetary c o u n te rp a rt* The f u l l and in c r e a s in g ly in t e n s iv e m o b iliz a ­
t io n o f re s o u rc e s means la r g e and in c r e a s in g incom es to w o rk e rs and
in v e s t o r s ; th e s h o rt s u p p ly o f consum er goods means th a t th e re i s
r e la t iv e ly l i t t l e . f o r th e se incom es to b u y . I f th e y w ere p e rm itte d to
flo w f r e e ly to the m arket f o r consum er goods, th e y w ould l i f t p r ic e s ;
and in a w ild c o m p e titio n th e s h o rt s u p p lie s w ould go to th o se p e r­
sons who w ere w illin g and a b le to pay th e m ost f o r them . T h is i s one
method o f d is t r ib u t in g lim it e d s u p p lie s . I t i s the method o f i n f l a ­
tio n .- I t i s a method we u sed in the la s t Tfar, and a method o th e r
c o u n t rie s have used t ’o an eve n g re a te r degree* He have made some
use o f i t — though by d e fa u lt rather* th a n d e s ig n * . P r ic e s •o f consum er

*

goods as measured by the Bureau of labor Statistics cost of living
index number have risen,.more than.17 percent in the last two years*
This is only a handwriting on the wall.
T ie have certainly had enough experience with inflation to know
that it is an unsatisfactory method of distributing short supplies —
a method that would never bo explicitly chosen by intelligent men.
Inflation imposes the heaviest sacrifices on those who can least
afford them* Rising prices hit persons with fixed incomes much
harder^than persons with rising incomes* »They affect persons with low
incomes, who must ordinarily spend their entire income on purchases
of goods-and services, more adversely than persons with high incomes,
who can maintain their standards of living despite rising prices.

Inflation also disorganizes the economic process. Business, as
you well know, is conducted in terms of prices that are expected to
be fairly stable. Rapid price increases shift the emphasis from
production as a source of profits to speculation and hoarding as
sources of profit* The struggle of labor to keep wages In line with
ever-rising prices adds to the confusion. If inflation takes prece­
dence over- production as the main concern of business and labor, the
war effort will surely suffer.
Finally, inflation multiplies the monetary costs of the war and
makes the post-war adjustment more difficult, if not impossible.
The ;.basic inflation'problem is even more urgent today than it
has been in the recent past* During that period we nave had a large,
and even a growing, supply, of consumer goods and services to distri­
bute* Vie have also been able to rely on large inventories to fill
the gaps left by declining civilian production. The problem is now
entering a new and more critical phase* Llilitary requirements will
reduce, the civilian supplies to .the hard core of minimum civilian
needs* In allocating this reduction among the Individual members of
our population, our concern must be to avoid unfairness and all the
unnecessary haydslaps of the inflationary method of distribution.
Our concern must also be- to apply the highest possible' standards
of fair play and economic wisdom* The decisions we make with respect
to the distribution of the Nation’s ’’iron rations” will affect
human welfare, productive efficiency, and economic stability, not
only during the war,, but also in tlx: post-war period*
To accomplish our objectives, we shall have to adopt many
measures, be shall have to extend some' measures now in operation.
Vie■shall have :to introduce ■new measures. In such a program, taxes
must play a- vital' part. . They not only reinforce other controls,
but also perform functions beyond the reach of those controls. Not’

e v e ry ta x m i l do t h is « Not e v e ry ta x i s a good ta x* Tie need ta x e s
th a t m i l b o th keep e x c e ss p u rc h a s in g power away from the markejt .
and, a t the same tim e p la c e the in e v it a b le re d u c tio n in- consum ption
on th o se who a re in the b e s t p o s it io n to b e a r it *
D is t r ib u t io n o f th e Burden
The p rim a ry t e s t o f a-good ta x m easure i s how i t d is t r ib u t e s
the econom ic burden o f w a r• M illio n s o f o u r p e o p le ’ a re l iv i n g a t
a le v e l th a t i s b a r e ly adequate to keep them w o rk in g e f f i c ie n t ly
in th e f a c t o r ie s and in the f ie ld s *
R ecen t in c re a s e s in income
have re p re se n te d f o r many f a m ilie s m e re ly the p o s s ib ilit y o f
ch an g in g a d ie t s u f f ic ie n t f o r a se d e n ta ry l i f e o f p a r t ia l o r f u l l
unem ploym ent to a d ie t capable- o f s u s t a in in g a v ig o ro u s day a t a
s w if t ly m oving machine# F o r o th e r f a m ilie s in c re a s e s in incom e
have re p re se n te d n o th in g more th a n th e m aintenance' o f t h e ir
p re v io u s m eager liv in g w hich- can now be o b ta in e d o n ly a t a
h ig h e r p ric e * F o r s t i l l o th e r f a m ilie s in c re a s e s in incom e
have 're p re se n te d o n ly a p a r t ia l c o rr e c t io n o f m a n y .y e a rs1 la c k
o f m e d ica l and d e n t a l c a re , adequate c lo t h in g and s h e lte r*
These a re n o t m e re ly problem s o f s o c ia l w e lfa r e , w ith w h ich
we w ere co n cerned in days o f peace# In w à r th e y become m a tte rs
o f im m ed iate, m ilit a r y im p o rta n ce . The exem ptio n p f a minimum
le v e l o f incom e fro m t a x a t io n , and th e lim it a t io n o f the w ar
burden on th o se w o rke rs whose sta n d a rd o f l iv i n g i s b a r e ly adequate
f o r p ro d u c tiv e e f f ic ie n c y , i s th e s o c ia l c o s t o f p ro v id in g
v ig o ro u s w o rk e rs in o u r s t e e l m ills , in o u r c o a l p it s , and
on our fa rm s *
We s h a ll lo s e much more th an we g a in i f we so re d u ce b a s ic
liv in g ■ standard s as. to im p a ir m orale and p ro d u c tiv e e ffic ie n c y #
Wei s h a ll lo s e more t h a n -,we g a in i f we f a i l to re c o g n iz e th e
im po rtan ce o f m a in ta in in g in c e n t iv e s to produce and e a rn , to
w o rk, to w ork more h o u rs , and. to w ork, more e f f i c ie n t ly . Ï do
n o t w is h to su g g e st th a t liv in g s ta n d a rd s a re to be a d ju s te d a s
though men w ere m a ch in e s, o r th a t re w a rd s f o r p ro d u c tio n can
ta k e no a c c o u n t o f m o tive s o f p a trio tism #
I w is h s im p ly to
in d ic a t e the Im po rtan ce o f a broad g ra sp o f o u r p ro d u c tio n
problem in -draw ing up a c o n s t ru c t iv e ta x program# The w e ll- f e d
an |i a d e q u a te ly c lo th e d w o rke r i s a b e t t o r vrorker* And the
m ain ten an ce, d a y by d a y , week b y w eek, month b y m onth, o f
in te n s e and e n t h u s ia s t ic p ro d u c tiv e e f f o r t re q u ir e s adequate
econom ic in c e n tiv e #
I f ta x e s a re t o prom ote, r a t h e r th a n h in d e r ,
o u r t r a n s it io n tp maximum w ar p ro d u c tio n , th e y m ust in t e r f e r e
a s l i t t l e as p o s s ib le w ith the b a s ic in c e n t iv e s to w ork and produce*

The P reven tio n -' o f In f la t io n
Taxes m ust a ls o meet th e t e s t o f re d u c in g th e in f la t io n a r y
use o f p u rc h a sin g power w hich i s flo w in g in t o the hands o f con­
sum ers* The dam o f p r ic e c o n t ro ls ca n n o t h o ld b ack th e flo o d w a te rs
o i consum er p u rc a u s in g power w ith o u t the a id o f d iv e r s io n dams b u ilt
by taxes#
In f la t io n i s i t s e l f a form o f t a x a t io n , e x ce p t th a t th e p ro ce e d s
a re n o t g a rn e re d by the Governm ent. I t fa s te n s to o n e 's income as- «
s u r e ly a s th e t a x demanded by the revenue c o lle c t o r . I t i s th e
, w o rst p o s s ib le k in d o f a tax#
ia x a t io n can r e lie v e th e sp en d in g p re s s u re w h ich th re a te n s
a runaiijay in f la t io n e it h e r by a b so rb in g e x c e ss p u rc h a sin g power
o r by d e f le c t in g i t from th e m arket f o r consum er goods apd
.s e rv ic e s # . E it h e r method re d u ce s money demand and th e re fo re the
p re s s u re on p r ic e s . I f t a x a t io n i s to be p a rt o f a c o o rd in a te d
a tta c k on in f la t io n , i t m ust be d e sig n e d to a c co m p lish t h is
r e s u lt in ym.js w h ich do n o t make more d i f f i c u l t th e jo b s o f
p r ic e c o n t ro l and r a t io n in g .

F l e x ib i li t y
* * Econom ic lik e m ilit a r y p la n s m ust bo cap ab le o f iju ic k ad­
ju stm e n t in tim e o f war* . he can no lo n g e r p la n in term s o f
y e a rs and e x p e c t o u r p la n s to be f u l l y r e a liz e d . Tie m ust be
p re p a re d to change them on s h o rt n o t ic e . T h is means th a t th e
ta x m easures wc- ado p t m ust be fle x ib le #
They m ust be ca p a b le
o f a d ju s t in g a s t e a d ily in c re a s in g flo w o f income to a s t e a d ily
d e c re a s in g flo w o f goods# They m ust be c a p a b le -o f q u ic k r e v is io n
to meet un exp ected changes in w ar demands o r in consum er su p p lie s#
And a f t e r th e w ar i s o v e r, th e y must a ls o be cap ab le o f smooth
re a d ju stm e n t to 'p o st—w ar needs#
f l e x i b i l i t y i s im p o rta n t n o t o n ly f o r th e w a r p e rio d , b u t a ls o
a f t e r the w a r. The re t u r n to a w o rld o f peace w iH re q u ire changes
as r a d ic a l a s th o se th ro u g h w hich;w e a re now p a s s in g . The problem s
that^ now c a l l f o r ta x e s cap ab le o f speedy a d ju stm e n t to changed
c o n d itio n s w i l l a f t e r th e w ar p la g u e us in re v e rs e »
do s h a ll be a n x io u s then to -re c o n v e rt s p e e d ily and sm oothly*
The re le a s e 6 f p u rc h a sin g power d iv e rt e d b y t a x a t io n and o th e r
m easures from sp en d in g in t o s a v in g d u rin g t lx w ar can h e lp in t h is
p ro c e s s . B ut i t w i l l h e lp o n ly i f the re le a s e i s c o n t ro lle d and
a d ju s te d so th a t th e in c re a s e in p u rc h a sin g power i s tim ed to
m atch the in c re a s e in the su p p ly o f goods a v a ila b le f o r purchase#

A d m inis t r a t io n
Yiartim e c o n d itio n s im p a rt s p e c ia l im po rtance to the a d m in is tra ­
t iv e a s p e c ts o f t a x a t io n . Today, more t h a n 'e v e r, we need to s e le c t
ta x e s th a t a re re a s o n a b ly ca p a b le o f a d m in is tra tio n * We n e e d -to
s e le c t ta x e s th a t r a is e no s e rio u s problem s o f ta x co m p lian ce and
im pose a s l i t t l e d r a in a s p o s s ib le on sc a rc e -m a c h in e ry and manpower*
In the demand f o r b o th p e rso n n e l and m ach in e s, ta x a d m in is tra tio n w i l l compete w ith most o f th e w ar a g e n c ie s , the armed f o r c e s , and in
many c a se s w ith in d u s t r ia l p ro d u ce rs o f w ar m a te ria ls * The m e rits o f
any new t a x , however p ro d u c tiv e i t may be o f re v e n u e , w ould be
s e r io u s ly d im in ish e d i f the manpower, the equipm en t, and th e m a te ria ls
re q u ire d to a d m in is te r the t a x in t e r f e r e d s e r io u s ly w ith the w ar
e f f o r t b y d is s ip a t in g re s o u rc e s th a t a rc needed f o r the p ro s e c u tio n
o f the war*
M ost o f th e m achines and th e m a t e r ia ls n o rm a lly re q u ire d in ta x
a d m in is t ra t io n a rc now e x tre m e ly sca rce * Any u n n e c e ssa ry demand
p la c e d upon th e se s u p p lie s by the ta x a d m in is t ra t io n w ould u n d u ly
in t e r f e r e w ith the w ar e f f o r t *
These c o n s id e ra tio n s have le d th e T re a s u ry to a p p ra is e w ith
ca re the a d m in is t r a t iv e im p lic a t io n s o f v a rio u s t a x p ro p o s a ls . I t
has been f a i r l y o b vio u s t h a t the e x p a n sio n o f reven ue from c e r t a in
e s t a b lis h e d t a x so u rc e s w ould e n t a il le s s a d m in is t ra t iv e and com­
p lia n c e c o s t th a n the in t r o d u c t io n o f c e r t a in new ty p e s o f ta xe s*
So lo n g a s th e e x p a n sio n o f reven u e a lo n g su ch lin o s conform s to the
re q u ire m e n ts o f sound t a x p o lic y , I t I s c le a r ly advantageous fro m
th e a d m in is t ra t iv e p o in t o f view * T h is i s one re a so n why i t has been
d e s ira b le and a d m in is t r a t iv e ly f e a s ib le to expand the scope o f the
income tax* T h is a ls o 'i s a c o n s id e ra tio n in fa v o r o f a sp e n d in g s
ta x w h ich u s e s the same fram e w ork o f a d m in is t ra t io n a s the income
tax*
C o n c lu s io n
I have re vie w e d to d ay some o f the c r it e r ia w h ich m ust go vern
o u r t a x p o lic y in tim e 6 f w ar* In o rd e r n o t to b lu r the b ro ad
o u t lin e s o f the p ro b lem , I have d e lib e r a t e ly r e f r a in e d from d is c u s s in g
s p e c if ic ta x p ro p o sa ls* In tim a te a s s o c ia t io n w ith the ta x le g is la ­
t iv e p ro c e ss d u rin g the p a s t y e a r has im p re sse d me w ith the dan g er
o f becom ing to o p re o ccu p ie d w it h the t e c h n ic a l d e t a ils and th e
s p e c ia l in t e r e s t s in v o lv e d In .In d iv id u a l ta x m easures*
The jo b we fa c e i s b ro a d e r th a n any one tax* I t goes f a r beyond
c o n s id e ra tio n s o f revenue* 'Tax a c t io n m ust be d ir e c t e d tow ard the

rem o val o f th e upward p re s s u re o f e x c e ss sp e n d in g power on p r ic e s
and c o s t s ; tow ard the f a i r d is t r ib u t io n o f the econom ic burden o f
th e w ar; tow ard the m aintenance o f p ro d u c tiv e in c e n t iv e s and the
p ro te c tio n o f the h e a lth and m orale o f o u r p o p u la tio n ; and f in a l l y ,
toward^ th e c re a t io n o f a fa v o ra b le enviro nm ent f o r a h ig h le v e l
01 b u s in e s s a c t iv it y in the p o st-w a r period#
In a dem ocracy th e re i s bound to be e x te n s iv e d is c u s s io n o f
the p ro s and co ns o f any ta x p ro p o s a l. I t w ould be sad in d ee d i f
th e re w ere n o t. The welcome p rese n ce o f su ch d is c u s s io n i s a r e f le c t io n
o f th e s tre n g th o f dem ocracy. B ut th a t d is c u s s io n w i l l n o t s e rv e
the f u l l e s t p u rp o se i f i t s fram e o f re fe re n c e i s to o n arro w , i f i t
i s r e s t r ic t e d to th e c o n f li c t 'd ' s e lf is h in t e r e s t , o r i f i t o ve r­
em phasizes t e c h n ic a l p e r fe c t io n , V/e m ust see th e f o r e s t b e fo re we
may p r o f it a b ly exam ine th e tre e s#

TREASURY IE3PARTMBNT
Washington ;

(The following address by Assistant Secretary of the Treasury

John L. Sullivan before the eleventh Forum on Current Problems
in the Waldorf-Astoria Hotel, Hew Y6rk City, is scheduled for
delivery at 3 p.m., Eastern War Time, Tuesday, November 17,
1942, and is for release at that time*)

W L SAYINGS BONDS £S POST-WAR INSURANCE
The Treasury is delighted to participate in this Forum on current
problems and to join your discussion of poet-war conditions.
We are engaged in a conflict in which a military defeat would de­
stroy our liberty, our equality, our freedom of worship and freedom of
speech and all of the other freedoms that have made America the hope of
the world. Yet, without diverting one whit from the war effort, we
meet here today to discuss not merely how to preserve the best we have
thus far achieved but how to improve upon the best we, or any other na­
tion, have ever known. Here indeed is proof, — if proof be needed, —
of the vitality and dynamics of Democracy and of the courage and vision
of America.
Presently we have two major concerns: First, to raise the tremen­
dous sums of money to finance this war; and, second» to do it with the
least interference to our present war effort and with the greatest re­
gard for the economic security of our people now and later.
^„„ * T*oitv<fi/ederS1 tax collectioas in the fiscal year 1943 will be
r * . L 1? . , ? , li0n' Bat our Government expenditures during that year will
lllVt
pe~ ^ of the difference. $63 billion, the treasury
w i n be obliged to borrow.
In approaching the problem of such tremendous borrowings I want to
assure you that the Treasuiy has keenly in mind the economic welfare of
tne American people during this war and in the post-war period. It is
for this reason that we are making our maximum effort to“borrow from the
people of the country out of their current income every last dollar' they
can lend us. These are the dollars we welcome most cordially because
they are the most effective dollars in our fight to control inflation
now and in our quest to enhance the economic security of Americans in the
post-war era.
After the people of America have paid all their direct
taxes to Federal, State and municipal tax collectors in the
1943, they will have left in their pockets $36 billion more
after payment of the same taxes in the calendar year 1940,
34-14

personal
calendar year
than they had
At the same

-

2

-

time when there is this great increase in the net income of the people
of the country we are experiencing drastic reductions in the production
of civilian goods. !3?hese two factors contribute to the threat of a
paralyzing inflation that could disrupt our entire economy, bankrupt un­
told thousands of citizens, and destroy the morale Of the nation. Only
nation-wide saving on a tremendous scale, only saving by everybody, can
safeguard us against inflation.
^
So today, I plead with you for thrift, I plead for savings. I
plead with the .American people to lend every possible dollar out of their
incomes to their Government, le are not asking you to give that money,—
but to lend it.
r
X am not asking you to do an easy job or a part-time job, Savingsas-usual like business-as-usual will not satisfy the needs of the time
9 must st°P spending as usual on the good and pleasant things of life,
¥e must spend much less of our income on the present and invest much
more of our income in our own future. Freedom is what we are buying
when we invest our money in ?ar Bonds, and there is no better thing for
America to buy than Freedom.
*

t0
friends and **** neighbors in your own community that it really is smart and patriotic to be thrifty, Warn them
V v
S nger ° unnecess^
spending and show them by your own conduct
and by tne management of your own homes that you practice what you preach.
Ihe investment of Cveiy possible dollar in tfar Bonds is the finest
insurance you can purchase for the future, - not only for your countiy
but for yourself and for your family.
_JJLI „7hvthy ijhe^ I,niStiCe brlne® with
oman who holds Hhr Savings Bonds is in a
^?4dS "???' These '7ar 3ond® will
me families will purchase new homes, or

S°°d times or bad, the man or
better position than the neighbecome the nest egg with which
educate their children.

4n

Ih®y will enable people temporarily out of work to support their fam*V41 eniile °thers t0 buy the washing machines, vacuum clean­
ers and automobiles they have foregone during the war. In short, they are
L ^ ° ° T ? v
security,C l o n e d to suit not only the current financing
demands of the Government and the need to control inflation, but also to
” L . , f^ Te saIlng’ ln,r£stment end purchasing problems of the American
people in the post-war era.
l hQS
the ireas'ary today in its effort to finance the
war, to combat inflation, and to provide for post-war personal security.
^
t0 ^ Christmas olub ’
/ ou will be getting a check from your
ank ^ t ^ in tne next few weeks. lake at least half of that money and in­
vest it in .iar Savings Bonds. Take at least half of your dividend checks,
your interest on bonds, or your Christmas bonus and buy lav Savings Bonds.
Buy at least a few 7ar Savings Stamps out of eveiy bit of income that

- 3 -

passes through your hands. Above all, this Christmas give tar Savings
Bonds as presents. For your children especially there is no finer gifti
Such a gift is literally a present with a future. In this way you will
not only give them money but security for the kind of world you hone
they will he able to grow up in,
*

war.

Here is a job every man and woman in America can do to help win this
Let s all get into this fight and stay in it until victoiy.

-0 O0-

TSMSUBÏ m à A W m t
Washington

POKRELEASE,

MORNING NEWSPAPERS

k

Press Servies

Tuesday« November 17, 1942.

hPlflH

the Secretary of toe treasury announced last evening that the tend^s for
#500,000,000, or thereabouts, of 91~dsy treasury bills to bo dated November IS,
and to nature February 17, 1943, which were offered on Wovenber 13, were opened
Federal Reserve Banks on Wovenber 16.
the details of this Issue are as follows*
total applied for - &,157,405,000
Total accepted
501,422,000

fteèi
Range of accepted bidet
High
Low
Average price

« 99.925 Equivalent rate of discount approx. 0.297* per
- 99.906
«
e s
*
*
0.372* »
- 99.906-f »
e
s
s
S
0.371* *

annul

(65 percent of the anount bid for at the low price wae accepted.)

oO

û

tr

price

!percent

TREASURY DEPARTMENT
Washington
FOR RELEASE, MORNING NEWSPAPERS,
Tuesday, November 17, 1942*

Press Service
No. 34-15

The Secretary of the Treasury announced last evening that
the tenders for $500,000,000, or thereabouts, of 91-day Treasury
bills lb* be dated November 18, 1942, and to mature February 17
1943, which were offered on November 13* were opened at the
Federal Reserve Banks on November 16,
The details of this issue are as follows*
Total applied for - #1,15?.,405,000
Total accepted
501,422,000
Range of accepted bids:
High
Low
Average
Pr i c e

- 99*925 Equivalent rate of discount approx. 0.297$
per annum
- 99,906 Equivalent rate of discount aporox. 0*372$
per annum
- 991906* Equivalent rate of discount approx* 0 '271$
per annum
‘:i
*

(85 percent of the amount bid for at the low price was accepted.

-oOo-

TREASURY BBPARTMBWT
Washington

(0?he following address by Randolph 2. Paul, General Counsel
of the Treasury, "before the Few School for Social Research,
liew York City, Is scheduled for delivery at 9 p«uw,

Eastern Wartime* -November 17, l$k$f end
is for release at that time*)

THS BIRTH OF THE H5VOTJ2 ACT
The Revenue Bill of 19U2 — 2^9 official pages in length ~ was
enacted on October 21, 19U2 when the President affixed his signature
to the final product of one of the most gruelling legislative pro­
cesses on record. We ordinarily — but quite erroneously — think:
of this process as beginning on March 3, 19U2, when the Secretary of
the Treasury formally submitted his recommendations to the Ways and
Means Committee and as ending on October 21, 1$U|?* Buring this
period of more than 7i months the presB reported open hearings
before the Ways and Means Committee and the Senate Finance Committee,
and did its best to report what happened at executive, or secret,
sessions of these two committees and of the Conference Committee of
the two Houses* It also reported what happened on the floor of the
House of Representatives and the Senate* Apart from the bill itself
and very lengthy formal reports of the Ways and Means Committee, the
enate Finance Committee, and a great deal of guessing on the part
of experts, columnists, and others, these are the generally avail­
able sources of information with respect to the making of a revenue
act*
These sources do not give the entire picture. Much goes on
which of necessity is not a part of the public record* The work of
producing a revenue act is much more extensive and variegated than
most people suppose* Throughout the consideration of the Revenue
r u 4^ ^9^*2 ky the Treasury, by Congress, and by many other agencies,
X had. an opportunity to view the process from behind the scenes. I
should like to take you back stage this evening so that you may under­
stand how much more happens than appears on the regular stage; how
much hard work has to be done by members of the Ways and Means
Committee and Senate Finance Committee and their staffs and by
members of the Treasury force, and why the passage of a revenue act
through Congress occupies s6 many months* I do so not for the pur­
pose of revealing any dark sensational secrets, but rather in order
that you may have an understanding of the quantity and quality of

3^16

the work done by your administrative and legislative representatives«
and In the hope that you may have some compassion for those who have
in their charge the inevitable revenue legislation of the future#
In this connection the word "future* is not such a long-distance
word, %% refers to the Revenue Act of I9U3. X will not indulge ♦§<•
night in any dignified guessing as to what that Act will contain*
X am sure« however« that whatever the other feelings of some of you
may be« you may doubt the truth of Llewellyn1* statement made in
another connection!
"For too much law« more law will be the cure".

the Many Pontrlbutora to a Revenue Act
Before we trace the development of a Revenue Bill Itself« it
might be well first to indicate briefly some of the forces that eon«
tribute to its growth* Borne of these forces are seen« others are
unseen* Among the visible participants in the task of producing
a revenue act is the staff of the Joint Committee on Internal
Revenue Taxation* consisting of a number of lawyers and other ex­
perts headed by Hr* Colin I*. Stam* Chief of Staff, Also assisting
Congress are those members of the Office of the Rouse Legislative
Counsel who specialise in tax legislation« headed for the 19^2 act
by Mr, John O'Brien* This office is primarily responsible for the
back-breaking as well as mind-exhausting job of drafting the
statutory provisions agreed upon by the,Congressional committees
and the Congress itself* Next in the list we might put the Treasury
Department, The Treasury staff fans out from the Secretary through
me into two offices — the Office of Tex Legislative Counsel and
the Division of Tax Research. 1 am not sure which of these two
groups your Mayor recently referred to when he ascribed some pro­
posals to the "semi-colon boys of the Treasury Department"* The
former consists of a small group of lawyers headed by Mr* Thomas
Tarleau, Legislative Counsel and Mr* Stanley Surrey« Associate Tax
Legislative Counsel, (X am sorry to say that the 19*42 act was
Mr* Tarleau's last revenue act* Re has left us to go into private
practice. It Is hard to imagine how we will get along without him
on the 19^3 H U * )
The Division of Tax Research consists of a small
number of economists headed by Mr* Roy Slough* These two offices
were under my jurisdiction in the framing and presentation of the
19**2 act*
A number of other divisions in the Treasury assisted constantly
in the policy-making phases of the act* Constantly throughout the
consideration and drafting of the Act by Congress many lawyers of

- 3 ~
thé office of Mr. J. P. Wenehel, Chief Counsel of the Bureau of
Internal Revenue, assisted in various connections, particularly with
the drafting of the bill. Mr. Ouy 3?. Helvering, Commissioner of
Internal Revenue, and his staff were constantly consulted as the
19h2 bill moved toward its eventual final passage, the purpose of
these consultations very often being to determine from the best
possible source — experience — the administrative practicability •
of suggested provisions. Furthermore, Mr. Helvering and his assist­
ants frequently testified before Congressional Committees in con­
nection with special provisions where the administration of such
provisions had qualified them as experts. Î was particularly de­
pendent upon Captain Bliss and his staff in connection with the
technical phases of the tobacco tax, and many other excise taxes.
So much for the seen group of contributors. One should not for
get, however, that many contributors to a revenue act, particularly
at a time like the present, are not in Congress or the Treasury
department. Many other departments make suggestions, and are eonsulted both as to policy and technical details. This is true of
the Federal Reserve Board* the Bureau of the Budget, the Office of
Price Administration, the War Production Board, thé War and Navy
departments, the Maritime Commission, the Department of Agriculture
the Interstate Commerce Commission, and the Federal Communications
vosimi ssioii«

(The Pre-legislative Process
I
$aid that the consideration of the l $ k 2 revenue bill by
Congress began on March 3, 19^2. It is not to be assumed that this
date marks the beginning of work on the bill. The Treasury must
spend much time and effort before it is in a position to present
recommendations to Congress. In fact, work on a revenue bill com­
mences with the preparation of the President's budget message,
customarily made public early in January. For two months previous
to the submission of this message to the Congress, the message is
being prepared by the Bureau of the Budget, with the assistance of
the Treasury and the other governmental departments. The general
purpose of the Budget message is to state the government's fiscal
needs for the fiscal year beginning on the following July 1st, to
indicate the revenue yield of the existing tax structure, and to
recommend whatever additional legislation may be deemed necessary.
The President s message of January 5, 19h2 indicated unprecedented
revenue necessities. The Resident forecast $56 billion of war
expenditures, and two subsequent revisions have added $22 billion
more. This war budget of $7H billion, together with non-war
Governmental expenditures, makes a total for the fiscal year 19U3

of $85 billion* The original goal of additional taxes set ’
by the
President in the budget message was $7 billion.
It was clear even before December 7» 19^» to everyone in the
Treasury as well as to many others, that additional revenue legis­
lation would be necessary in the year 19^ 2* Moreover, the previously
mentioned offices in the Treasury are constantly at work upon the
improvement of the tax structure, In November, 19^1, the Treasury
commenced work specifically upon the revenue program for 19^2* The
period beginning then and ending at March 3, 19^2, was continuously
devoted to a consideration of the necessity of raising at least
7 billion dollars of additional revenue and of the available sources
of that revenue* For two reasons the job waft particularly difficult
this time* The first reason was that additional taxes had to be
superimposed upon heavy existing taxes* A second reason was that
we were at war* This meant that every suggested measure had to be
tested, not only in the ordinary light of how it would affect our
economy, but also in the light of how it would affect the prosecution
of the war* This question was paramount in the consideration by the
Treasury of every provision of the Revenue Act of ljUg.
I
would hate to have to repeat the strenuous days and nights of
December, l^hl, and «January and February, I9U2. One has to arrive at
policy recommendations from a consideration of (l) hundreds of sugges*
tions in the Treasury, (2) the views of other government agencies,
particularly the Bureau of the Budget, the Federal Reserve Board,
the War Production Board* the Office of Price Administration, and £he
war and Kavy Departments, and (3) proposals from many outside non«*
governmental sources* ©iis requires almost constant meetings end
conferences ranging from informal meetings of a few experts to
gatherings of 25 or 30 officials and taxpayer representatives* In
this period either the Secretary of the Treasury or I, or both of ns,
or members of the staff conferred with thousands of different individ­
uals* My records show that I personally participated in more than 800
of these conferences between January 1, 19UI, and the passage of the
19^2 act; 390 of these conferences Were with taxpayer representatives
and the representatives of other branches of the government* In the
period prior to March 3# 19^2# representatives of the Treasury con­
ferred with Chairman Robert D* Doughton of the Ways and Means
Committee and others on that committee* We conferred with Chairman
Walter F* Oeorge and other members of the Senate Finance Committee*
We conferred with Mr, Smith and other representatives of the Bureau
of thé Budget, We conferred with Mr* Bccles and members of his staff
in the Federal Reserve Board. We conferred with Mr* Henderson and
many of his assistants in the Office of Price Administration. We
conferred with Mr, Donald Kelson* head of the War Production Board,

- 5with respect to the effect of suggested tax measures upon war produc­
tion, We conferred with Mr, Patterson, Under Secretary of War, and
many others in the War Department; Mr, Eorrestal, Under Secretary of
the Navy» and many others in the Navy Department; Admiral hand.
Chairman of the Maritime Commission, and many others in the Maritime
Commission* These conferences with the service departments related
primarily to the impact of tax measures upon the war effort and upon
the war contracting process* We were in conference with members of
the Department of State, Department of Justice, Social Security
Board, Securities and Exchange Commission, Interstate Commerce
Commission, Office of War Information, War Labor Board, Board of Tax
Appeals, and federal Communications Commission*
All of these conferences I have past mentioned were in addition
to the conferences held with the personnel of the Treasury itself.
But intya— and interdepartmental conferences and conferences
with members of the Congress were not our only activity at this stage
of the revenue program* A revenue program is not made" in closed
caucus. Through the offices of the Treasury there passed a stream
of taxpayers and their representatives. Some of them volunteered
suggestions or were interested in specific measures. Some of them
were outside experts called into consultation by special invitation.
Much valuable aid was derived fro# these sources. To mention just a
few examples, - these conferences took in the representatives of
insurance companies, farm bureaus, railroad associations, mining
organizations* oil organizations! stock market organizations, labor
organizations, and many other organizations representing various groups
in our population,
I should like to mention one additional problem at this point#
It is not possible for all who suggest to come to Washington and
confer* Thousands of suggestions are made by correspondence, I
wish you could have a week with Treasury tax mail* It covers a wide
range both of questions and of mood. Many letters are sympathetic.
Some are anything but. An example of the latter is furnished by
the following conclusion to a 155 word telegram; **By the way what
is y o u r salary as an *expert1? The question mark applies to both
the sentence and the word expert,1
1 I have made it a point to give
all setters received, and even to postals, more than a perfunctory
acknowledgment. It is worth while doing so* Many of the sugges­
tions received in the Treasury mail have culminated in actual pro­
visions of the Revenue Act of 19^2. We are still studying other
suggestions. Even where the suggestion made is not feasible!- the
interest shown is stimulating* We like even to hear from those who
disagree with us. This happens sometimes.

- 6 -

J
giV? y0U at this t i m one 0T tW
0 examples of the
general points X have made. We felt early in the game that our
Federal excise taxes should be increased. Early in January. 19h2
ve. therefore organised a committee to consider and suggest excise*
taxes designed to raise revenue and facilitate the war effort.
This group consisted of representatives of the Staff of the Joint
°n *n^erna^ Revenue Taxation, the Office of Price
Administration, the War Production Board, the Federal Reserve Board,
the Bureau of the Budget, the Department of Agriculture, and various
branches of the Treasury. This committee gave specific consideration
to almost every conceivable type of excise tax. |t met every two or
three days for a discussion of specific excises. I attended about 20
of these meetings and found them very stimulating and helpful. The
general results of these meetings were recommendations for? increases
in the rates of a number of existing excises, the addition of certain
new excises, and the elimination of certain excises already on the
statute books. The example just given is one of interdepartmental
cooperation.

I would like now to give an example of cooperation with the
business world, Hr. Morgenthaufs message of March 3, i$i*2, recom­
mended collection of income tax at the source. This recommendation
followed about six months of dose study of the subject by the
Treasury. The problems encountered were varied and difficult# Most
^een solved when the recommendation was made. However,
additional precautions were taken* The Treasury wished to know more
about the problems that would be faced by employers if this method
of collection were introduced, and the attitude of employees toward
the method as well. The suggestion involved additional personnel
not only by the Bureau of Internal Revenue, but also by the business
community. It also would require additional machine equipment such
as typewriters, comptometers, etc#
We therefore made a survey of the country. Fourteen teams of
investigators,, consisting of one representative of the Bureau of
Internal Revenue and one representative of the Division of Tax
Research were sent from Washington. They interviewed employers in
Chicago, Detroit, Hew Yorkf and southeastern areas. One team went
to Toronto to study the established Canadian system of collection
of the tax at the source. Also, the thirty-eight Internal Revenue
Agents in Charge throughout the United States had their agents inter­
view approximately 10 business firms in each of their districts.
In this way we contacted more than J+5Q business concerns.
Aircraft companies, railroads, chain groceries, lunch rooms, and
beauty parlors, filled out questionnaires, and stated how collection

4M

y

i»

at the source would affect them. These questionnaires, when tabulated,
disclosed many significant factors* Tot example* it was learned that
310, or 6S percent, of the firms contacted needed no additional equip­
ment to inaugurate the proposed system. UoS, or SO percent* of the
firms were favoraple to the collection of tax at the source* With
this information and the many valuable suggestions received from
persons interviewed, it was possible greatly to improve the plans
we had developed op the insido. It was also possible to submit
estimates to the War Production Board of the equipment which would
be needed by the Bureau and by outside business.
The Treasury likewise made an extensive study of general sales
taxes at the manufacturing, wholesale and retail levels. The Treasury*®
position on the general sales tax was that the Government*s revenue
needs could and should be obtained without recourse to a general sales
tax. However, in order to assist the Senate Finance Committee and the
House Ways and Means Committee in their consideration of this problem,
the Treasury conducted a detailed investigation of different types of*
sales taxes In use in our own States and certain comparable foreign
countries. These investigations Included field surveys in seven
States and in Canada. The sales taxes of Australia and Great Britain
were also studied but without field trips to either country. The
results of these studies were presented to the Committees in
executive session*
I have said that representatives of the Treasury had several
conferences prior to March 3# 19^2 with Chairman Bought on and Chairman
George. We also had a great many conferences during this period with
Mr. S tam end his assistants. The purpose of these conferences was to
formulate to the utmost extent possible agreement between the Treasury
and the Joint Staff on the recommendations to be made to the
Congressional Committees, Buring this period we had 23 meetings with
Mr* Stam, and we were able to agree on more than 70 recommendations.
Most of the recommendations on which we reached agreement were
accepted by the Congress and are now contained in the Act, This
preliminary discussion was one of the most valuable features of our
work on the 19U2 bill.

The Consideration of the Bill by the House
Ways and Means Committee
How put yourself back to March 3, 191+2, On this date Secretary
Morgenthau appeared before the Ways and Means Committee in public
session for the purpose of submitting to the Committee the Treasury
recommendations for the 19^+2 Act* X fallowed Secretary Morgenthau

**' 8 m

with a more detailed discussion of some of the suggestions made* We
were questioned for the next two days of the session by the 25 members
of the Committee* Then followed what may be literally called a host
0;j i*aefisU8*
roua<i figures, 350 persons testified before the Ways
and Means Committee; the record of the hearings comprises 36^0 pages,
over 10 pages per person, Many of these witnesses represented no one
but themselves and were merely giving individual views to the Committee,
others appeared for organizations, including the Chambers of Commerce,
*1,0*» a .?, of L., National Association of Manufacturers,. Association
of American Railroads, American Bankers Association, National Orange,
American Mining Congress, National Lumber Manufacturers Association,
American Association of University Women, American Federation of
Teachers* The public sessions closed on April 17,
X made several subsequent appearances before the Committee in
open session. Altogether, J testified g times on the subjects of
pension trusts, tax exempt securities, percentage depletion and so
forth*
The next stage in the development of a revenue act is the ©xecu**
tive session of the Ways and Means Committee. This executive session
is held behind closed doors, and aside from committee members, no one
is allowed to attend except representatives of the Joint Staff, the
House Legislative Counsel, and representatives of the Treasury. At
the noon hour and at the conclusion of the afternoon session, it was
customary for the Chairman to announce to the representatives of the
press the action taken by the Committee,
In the 19j+2. bill these sessions lasted usually from lOtOO in the
morning until k ; } 0 or 5;0Q in the afternoon* though sometimes the
sessions were necessarily interrupted when votes were taken in the
House and the presence of members on the Floor was required* Like
the open sessions, they were fully attended by committee members*
No stenographic record was made of the proceedings, but they were
more or less formal in character* Every proposal is discussed in
detail not only in its legal aspects, but also from the economic
standpoint* At the request of the committee, information and an
expression of views, were given by the Treasury and the Joint Staff*
Every member of the Committee asked questions of the Joint Staff and
the Treasury as to the effect and advisability of particular provisions.
There was a constant exchange of views, both oral and written. Fre**
quent requests were made for further information as to the revenue
yield or loss involved in a particular measure.. In this fashion the
committee members obtained all of the information and data which they
deemed necessary to the policy determinations they had to make* At
the appropriate time, a tentative vote was taken on each item
under consideration* In this way there gradually developed

- 9 ~

the first committee print of the hill. When this was done, the
Committee as a whole re-considered eaoh new provision and took a
final vote with respeet thereto. Finally, the entire hill, as
recommended by the Committee, was sent to the floor of the House
for approval,
The l $ k 2 Bill reached the House on July lU. The House generally
has what is called a "closed rule1
1on Revenue hills. The effect of
this rule is that nothing hut committee amendments may be voted upon.
It is necessary for the House to accept or reject the hill in toto.
This year the consideration of the hill on the floor of the
House produced more than routine action* As introduced into the
House by the Ways and Means Committee, the 19^2 Revenue Bill pro­
vided for a combined normal and surtax on large corporations of
percent* An excess profits tax on corporations of 87-1/2 per­
cent was imposed by the Bill. The Ways and Means Committee, on the
last day of debate by the House, introduced amendments to the effect
that the Bill be recommitted to the Ways and Means Committee in
order to amend the Bill so that the combined normal and surtax rates
would be reduced to 40 percent and the excess profits tax raised to
90 percent. The House proceeded to reject that portion of the
Committee amendments which lowered the oorablned normal and surtaxes
and accepted the amendments which raised the excess profits tax. In
this form the Bill passed the House.
The Senate Finance Committee rejected the combined rate of b5
percent and replaced it with the Uo percent combined rate which the
Ways and Means Committee had proposed. This was agreed to by the
Senate and subsequently was accepted by the Conferees and by both
Houses so that in its final form the Bill contained the kO percent
combined rate and the 90 percent excess profits tax rate.
The Consideration of the Bill by the
Senate Finance Committee
The Revenue Bill of I9U2 passed the House on July 20. On July 23
hearings were commenced before the Senate Finance Committee, which con­
sists of 21 Senators. Here again the Secretary of the Treasury
appeared first for the purpose of stating the Treasury^ views with
respect to the House bill. The Secretary was followed by witnesses
representing outside organisations or giving their own personal views.
In the Senate Finance Committee this year 2 % witnesses appeared.
The record of the Senate hearings comprises 2376 pages* This, com­
bined with the House committee hearings, gives a total of 60l6 pages.

-

10

If you look at this record you will find that many of the witnesses
had already appeared before the Ways and,Means Committee*
At the conclusion of the open hearings, the Senate Finance
Committee, like the House, went into closed executive session* As
in the case of the House executive sessions, the Chairman of the
Committee at the end of the morning and afternoon sessions would
announce the nature of all actions taken by the Committee* The
executive sessions on the 19^2 bill, like the open sessions, were
very well attended hF Committee members*
On the whole* the Senate Finance Executive Sessions were very
much like those of the House Ways and Means Committee, except that
they were perhaps somewhat more formal* Testimony was presented by
the Joint Staff and the Treasury; there was constant questioning on
the presentation of such testimony; and information was requested by
the members of the Committee# In the Consideration of the 19^-2 bill
the Finance Committee expedited its Work by appointing several sub­
committees for the consideration of particular subjects, such as
collection of tape at the source and the Euml plan, renegotiation of
contracts, pension trusts, mutual insurance companies, and mining
relief. The House Ways and Means Committee did not adopt this
procedure* The Executive Sessions of the Senate Finance Committee
on the Revenue Act of 19^2 lasted from August 2^f to September 2^*#
On October 2 the Senate version of the Revenue Bill of 19^2
was presented on the floor of the Senate. The Senate, unlike the
House, permits amendments on the floor; it has no closure rule#
The Senate floor is the last chance for amendment and you may
imagine the scramble occasioned by this fact* Many amendments of
the 19h2 bill not acceptable to the Senate Finance Committee, or
not presented to that Committee in time, were presented on the floor
of the Senate* Particular provisions of the bill are debated* The
most highly debated points in the Revenue Bill of 19h2 were the cor­
porate tax rates, tax exempt securities, and percentage depletion.
This does not mean that many other points were not vigorously de­
based on the floor. The debate on the Senate floor on the 19^2 bill
lasted for four days and the bill was finally passed by the Senate
on October 10#

The Consideration of the Bill
3y the Conference Committee
When the last controversial item has been decided by the Senate,
the Chairman of the Finance Committee requests a vote on the entire

-

11

~

measure, which, despite prior disagreements, is usually passed by an
overwhelming majority. Then the Chairman moves that the Senate insist
upon its amendments, requests a conference with the House thereon and
asks the President of the Senate to appoint the conferees on the part
of the Senate* The House then insists on its disagreement with the
Senate and agrees to a conference. The Committee of conferees is
usually composed of the ranking majority and minority members of the
Committee on Ways and Means and the Committee on Finance. The
Conference Committee, consisting of lUjmembers in the case of the
19^2 Mil, has the Job of reconciling the disagreeing votes of the
two Houses.
It has no Jurisdiction to add any;new matter. It can only con-**
sider an item which is either in the House or the Senate bill from
the standpoint of reconciling the two measures. It was sometimes a
pleasure at this late stage of the Revenue Act to be able to tell
late comers that an amendment could not be considered because it
was not »in conference». At this committee, the House and Senate
members vote as separate bodies. When the House version of a
particular section is agreed upon, the Senate recedes. When a
Senate amendment is found to be acceptable, the House recedes. Of
the 504 Senate amendments to the Revenue Bill of I9b2, the House
receded with respect to all but IS amendments* This picture is,
however, rather misleading for many of the amendments are clerical
in nature, while some amendments made in the Senate are necessitated by lack of time for the adequate consideration of a problem
by the Ways and Means Committee* In many instances, where an amend­
ment of the Senate results in a compromise, the House, as said in
committee reports, recedes «with an amendment» though the compromise
version may more nearly represent the views of the House than of
the Senate.
The work of the conference committee in I9U2 lasted from October 12
to October 17 with a brief meeting on October 19, The work is done in
closed session and no stenographic record is taken of the proceedings.
If you watched closely the progress of the Revenue Bill of I9I4.2 you
may have noticed that only two days Intervened between the last
session of the Conference Committee and the President's signature
on the M U *
You may wonder how the job is possible from the
drafting standpoint. The answer to this question is that the bill
is constantly being drafted as the work of the committee proceeds.
Mr. O'Brien’s staff, with help from the Joint Staff and the Treasury,
are constantly at work upon the preparation of amendments as they are
agreed upon by the Committee. When such an amendment is agreed upon
and is later stricken out, this work, of course, goes for nothing;
but, on the whole, this practice of keeping the drafting process

12 -

abreast of the Revenue Bill makes for speed and is a vital part of the
machinery* Bo one can praise too highly the indefatigable efforts of
the drafting group on the Bevenue Act of I9U2. X sometimes wonder
how they survived*
What was the product of all this gestation? It is officially
known as the Bevenue Act of 19^2. It has been called the greatest
tax levy in the history of the United States, as well as the
heaviest and the longest* Life Magazine described its «Picture
of the Week«, the official copy of the act, as weighing 9 pounds
6 ounces and containing 135*000 words. Apart from these physical
attributes of greatness, it materially expands the scope of the
individual income tax* Xt increases individual net income tax
liability on 19^2 income from $5 billion to $8 billion. The Victory
tax, after the post war credit, will add some $2 billion more* The
19^2 Bevenue Act furthers the process of converting the income tax
to a mass tax. In 19*40 about k million taxpayers paid tax on the
1939 income* In 19*4-3 there will be more than 27 million net income
taxpayers under the established income tax system and close to
h6 million taxpayers under the gross Victory tax* The Bevenue Act
of 19*4-2 also raises annual corporate income and excess profits
revenues from less than $8 billion to more than $9 billion*
I suppose no act has been subjected to so much criticism. Much
of this criticism is in order insofar as it is directed to the in­
adequacy of the bill from the standpoint of curbing inflation and
from the revenue standpoint* However, we may perhaps tonight say a
few words in praise of the bill.
The Bevenue Act of 19*42 contains more relief provisions than
any other act in our history* Page after page is devoted to the
elimination of inequities. Many minor loopholes are closed. In
this sense, if not in a fiscal sense, the Revenue Act of I9U2 is
a great bill. We had reached the point in our rate structure where
loopholes resulted in a very serious loss of revenue, and where in—
equities and discriminations threatened to be disastrous* The tax
structure had to be put in shape to carry an increased load. That
has been partly done in the Bevenue Act of 19*42, and we have now a
basic tax structure which will be better able to stand the strain
of increased rates.

Conclusion
Prom what I have said 1 hope you will gather the impression that
the making of a Bevenue Act is not a simple matter. It is the product

- 13 of many minds and many conferences. It requires the most intensive
legal work.
It requires an investigation of every proposal not
only in the light of its impact upon our entire economy hut also in
the light of its effect upon a particular industry. Svery item in
the Act is tested not only in ordinary discussion hut hy much cross
examination In the legislative process. The end product is some­
times too long and is sometimes lacking in that many would want#
But if these are disadvantages they are the disadvantages that go
with the advantage of the Democratic process#

Total
all banks

* National
*
banks

All banks : Banks other than national
other than ;
State
: Mutual :priTate
national ;(commercial): savings :

LIABILITIES
Deposits of individuals, partnerships,
and corporations;
Demand.................
$39.983.386 $21,9^5.397
7.8U1.032
Time..................................... 25.6l3.382
i ,189,H10
U. S. Governmentand postal savings deposits.
1,902,191
Deposits of States and political sub­
2 ,7 1 * 1 ,7 2 0
l * .^ * * ^ !
divisions. .......... ................... *.
**-.*^,371
.
1
0
,2
9
5
.0
5
0
6
,1 (9 8 ,6 9 7
Deposits ofbanks.l/.........................
10,295*050
1*1*2,861
7 8 1 .1 9 5
Other deposits..........................
1 * 0 ,6 5 9 .1 1 7
Total deposits. U ..................
.
8 3 ,0 2 9 ,5 7 5
Bills payable, rediscounts, and other lia­
2,01*4
,
2 0 ,7 3 6
bilities for borrowed money...........
Acceptances executed by or for account of
78,6*41
3 7 .2 3 2
reporting banks.......................
3*41,110
6 0 8 ,8 2 1
Other liabilities...........................
Total liabilities» i/••••••••••••••••••••. S 3 .7 3 7 ,7 7 3
* * l .0 3 9 .1*73
CAPITAL ACCOUNTS
10*4,171
Capital notes and debentures...........
290,91*4
Preferred stock.............. .........
2 ,6 0 3 ,6 0 1
Common stock...........................
3 .7
1 1 6»Ill,1 1 1
Surplus.............. ......................
3
»7^6
1 , 2 7 0 ,2 6 1
Undivided profits...........................
1,270,261
Beserves and retirement account for pre­
ferred stock and capital notes and de­
5 0 7 ,1 6 0
bentures. »*»•»•»»»••»»»«•♦»•»•»•••»•»»»»»•
S , 5 2 2 , 21S
Total capital accounts...............
Total liabilities and capital accounts 1 / 9 2 .2 5 9 ,9 9 1

Beciprocal bonk balances with banks in
the United States.......................
if

6*43,72S

$18,037,989
17,772.350

712,781

1 ,7 1 2 ,6 5 1
3 . 7 9 6 ,3 5 3
3 3 8 ,3 3 s*
1+2,370.1*58

$17,925,021* $
2,196 $110,769
7,392.81*9 10,366,1
(01*
13,097
712,01*0
523
218
1 ,7 0 8 ,1 * 5 1
3 , 7 5 9 ,7 0 2
3 3 6 ,1 2 9
3 1 ,8 3 1 * ,1 9 5

2 ,8 0 6
1 .3 9 s*
228
36.1*23
686
1 .5 1 9
1 0 ,3 7 1 ,1 * 3 1 .1 6 * 4 ,8 3 2

1 8 ,7 2 2

1 6 ,9 7 5

30

1 ,7 1 7

*41,*409
2 6 7 .7 1 1
1 * 2 ,6 9 8 ,3 0 0

3 3 .0 8 5
2 2 9 .6 2 9
3 2 ,1 1 3 .8 8 1 +

12
3 7 ,5 9 3
1 0 , *409,0 6 b

8 ,3 1 2
*489
1 7 5 ,3 5 0

9 8 , 160
1 3 8 ,5 3 5
1 ,2 1 * 2 ,0 5 7
1 ,1 * 3 3 .0 2 1
*4 5 8,112

6 ,0 1 1

1 5 2 ,3 7 9
1 . 3 5 5 ,2 9 1
1,*411,*407
5 1 5 .9 “*9

1 0 U ,1 7 1
1 3 S .5 3 5
1 ,2 * 4 8 ,3 1 0
2 ,3 3 1 *. 70i*
75i*. 3 1 2

2*4*4, *466

262,69*4

3 ,6 7 9 ,1 * 9 2
1*1*, 7 1 8 ,9 6 5

*4,8*42,726
*47,5*41,026

2 0 6 ,2 9 5
3 . 5 7 6 ,1 8 0
3 5 ,6 9 0 ,0 6 * 4

1*39.310

20*4, *418

20*4, *418

—
—

8 8 9 .7 6 8
2 9 5 ,8 7 3

—

6 .2 5 3
H .9 1 5
327

1,20*4

5 5 .1 9 5
1,2*46,8*47

1 9 ,6 9 9

1 1 .6 5 5 .9 1 3

195,01*9

—

Excludes reciprocal interbank demand balances with banks in the United States (heretofore reported gross), the
amounts of which are shown below MTotal liabilities and capital accounts“^

—

Assets and liabilities of all active banks in tbe U n i t e d States a n d possessions,

« M M a M i

b y classes,

June 3 0 , 19 h 2 *

(In thousands of dollars)
Total
| all banks
s
Humber of hanks..........................
ASSETS

: National
j
bank s
•

banks :
Banks other than national
State
: Mutual
other than :
* Private
national : (commercial)**: savings

5,107

9,70g

$2.2K 7,o 6i

$7.370,>*99
6,906,011
14,276,510

$2,631,615
6,781,»55
9.413.070
* 9- ^ y »

13.987.KK2
1.KK6.5S9

10,200,1+02
1,286,38*+

3,737.083
i K6,3Ki

K9.957
13,S6K

2,01*+, 287
2,^+68,560

1,6i K,915
1.377,523

395,309
1,078,163

K.063
12.87K

286,217
lU, 765»*+*+1

16^, *+89
5,521*385
79.783

5,lK0
85,898

728,309

.... >155.81(6
20.372.72K
718,K71

13,588,25k

10,6^+8,005

9,928,501

1+8,19*+

588,690
72,^

615,630

K99.192
175.1K0

671,310
115.9K6
366,023

52,526

75,255
35.6K5
256,757
K7.5K1.026

58,362

16,859

3^

28,163
185,872
35.690.06K

70,286

7.K82
599
195.0K9

lMl5

Loans on real estate...................... $ 9.617.560
Other loans, including overdrafts......... 15.560,7U 5
Total loans.........................
25.178.305
U. S. Government securities:
Direct obligations......... ......... . 27,287,165
Guaranteed obligations................
3,075.858
Obligations of States and political sub­
divisions..............................
3.97K.821
Other bonds, notes, and debentures........
1^,027,1+70
Corporate stocks, including stock of Fed­
eral Reserve banks.......... ..........
650,798
Total investments...................
39.016.112
Currency and coin........................
1,1+1+6,780
Balances with other'banks, including re­
serve balances l/......................
2U,236,259
Bank premises owned, furniture and fix­
tures.................................
1,20K ,320
Real estate owned other than bank premises.
61U .523
Investments and other assets indirectly
representing bank premises or other
real estate............................
127,781
Customers1 liability on acceptances out­
standing...............................
67,961
Other assets............................
367,950
Total assets i t .....................
92,259,991

:

S jM

JJä

10,901,795

13.299.723
1,629,269
1,960,53K
1.558.910
19^.952
18.643,388

32.316
111,193
KK, 718.965

* Omits figures for Guam and The Philippines on account of the war.
** Includes trust companies and stock savings banks.

5K2.029

- .. ...9.119

636,323

.538

. .¿i_.

$K,736,569 $ 2,315
77.752 K6.80K
4,814,321 K9.iÏ9

ll.655.9i3

2.365
*+92
866

Comparison of

a sse ts

and

lia b ilit ie s

o f

a ll

banks

C o n tin u e d .

(In

th o u sa n d s

June 30,
1942

LIABILITIES
Deposits of individuals, partnerships, and corporations:
Demand.............. ........................
139,983,386
Time......................................
25,613,382
IT. S. Government and postal savings deposits..........
1,902,191
Deposits of States and political subdivisions.........
4,454,371
Deposits of banks............................ .
1/10,295,050
Other deposits (certified and cashiers’ checks, etc.)....
... 781,195
Total deposits...............................
1/ 83,029,575
Bills payable, rediscounts, and other liabilities for
borrowed money...............................
20,736
Acceptances executed by or for account of reporting banks
78,641
Interest, discount, rent, and other income collected but
not earned..... •.............................)
(
Interest, taxes, and other expenses accrued and unpaid...)
608,821 (
Other liabilities......... ....... ................ ) _________________L
Total liabilities...... ...................... 1/ 83,737,773
CAPITAL ACCOUNTS
Capital notes and debentures........................
104,171
Preferred stock................................. .
290,914
Common stock............... .....................
2,603,601
Surplus......................... ...............
3 ,7 4 6 , 1 1 1
Undivided pro fits............... .................
1,270,261
Reserves and retirement account for preferred stock and
capital notes and debentures............. ......
507.160
Total capital accounts.......................
8.522.218
Total liabilities and capital accounts........ .
1/92,259,991
1/

of

d o lla r s )

Page

Dec. 31,
1941

June 30,
1941

137,805,431
26,063,374
1,947,950
4,303,416
11,015,110
1.097.979
82,233,260

$35,571,528
26,247,184
800,326
4,140,029
10,982,431
807.831
78,549,329

22,593
100,521

22,559
106,594

97,811
101,181.
124,227
1 1 4 ,8 9 9
380.145
409.638
82.958.557________79.304.200
108,194
312,085
2,614,082
3 ,7 0 4 , 3 6 8
1,248,461

114,683
331,945
2,608,377
3,616,763
1,247,041

507.947
. 8,495,137
91,453,694

605,710
8.524.519
87,828,719

Amounts a s o f June 3 0 , 19 4 2 , a re n o t com parable w it h amounts re p o rte d f o r p r i o r
d a te s because o f the e x c lu s io n on t h a t date o f $ 6 4 3 ,7 2 8 ,0 0 0 o f r e c ip r o c a l
in t e rb a n k demand b a la n c e s w it h banks i n the U n ite d S t a t e s , re p o rte d by
com m ercial b a n k s. Such b a la n c e s w ere p r e v io u s ly re p o rte d g ro ss*

2

JL « state. «..

67.961

íc e p t a u a c e s
L'ti *

CkxxcL

127 - 781

o-fcirx

133.125
gU.46a
l6 g - S 2 3

144,400
90.360
157.96a

TREASURY DEPARTMENT
Comptroller of the Currency
Washington
Press Service

FOR RELEASE, MORNING NEWSPAPERS

7

n ie C o m p tro lle r o f the C u rre n c y to d a y re le a s e d the f o llo w in g p r e lim in a r y f ig u r e s , show ing th e a s s e t s and
l i a b i l i t i e s o f a l l a c t iv e banks i n the U n ite d S t a t e s and p o s s e s s io n s on June 3 0 , 194-2, and com parisons o f su ch
f ig u r e s w it h the a s s e t s and l i a b i l i t i e s o f a l l a c t iv e ban ks on December 3 1 , 194-1 and Jun e 3 0 , 1941*
(In thousands of dollars)
June 3 0 ,

1942

Number of banks.................................. .

D ec. 3 1 ,
1941

June 3 0 ,

1941

«UJ-y. -

ASSETS
1 9 ,6 1 7 ,5 6 0
Loans on real estate......... ......................
1 5 .5 6 0 .7 4 5
Other loans,-including overdrafts....................
2 5 .1 7 8 .3 0 5
Total loans..................................
IT. S. Government securities:
2 7 ,2 8 7 ,1 6 5
Direct obligations.......... .............. .
3 ,0 7 5 ,8 5 8
Guaranteed obligations...... ...................
3 ,9 7 4 ,8 2 1
Obligations of States and political subdivisions.......
4 ,0 2 7 ,4 7 0
Other bonds, notes, and debentures...................
6 5 0 .7 9 8
Corporate' stocks, including stock of Federal Reserve banks
3 9 .0 1 6 .1 1 2
Total investments.......................... . •••
1 ,4 4 6 ,7 8 0
Currency and coin................................ .
Balances with other banks, including reserve balances... 1 /2 4 ,2 3 6 ,2 5 9
1 ,2 0 4 ,3 2 0
Bank premises owned, furniture and fixtures............
6 1 4 ,5 2 3
Real estate owned other than bank premises............
Investments and other assets indirectly representing bank
1 2 7 ,7 8 1
premises or other real estate........... .........
6 7 ,9 6 1
Customers’ liability on acceptances outstanding.......
Interest, commissions, rent, and other income earned or
accrued but not collected.......................
]
3 6 7 ,9 5 0 [
Other assets••••»•»»»•»•*»»•*•»••»•••»»*•»••••»•••••••••••
1J 9 2 ,2 5 9 ,9 9 1
Total assets
* Excludes hanks in Guam and The Philippines on account of the war.

1 9 ,7 1 8 ,0 7 1
1 7 .1 2 0 .2 9 4
2 6 .8 3 8 .3 6 5

$ 9 ,6 3 3 ,3 0 5
1 5 .9 1 0 .1 3 3
2 5 ,5 4 3 ,4 3 8 ......

2 1 ,0 7 0 ,1 7 7
4 ,4 8 3 ,6 3 2
4 ,1 9 6 ,8 6 1
4 ,1 6 5 ,1 1 5
6 7 3 .5 6 1
3 4 .5 8 9 .3 4 6
1 ,5 4 5 ,0 1 8
2 5 ,9 4 2 ,3 7 7
1 ,2 0 9 ,4 8 0
70 6 ,4 8 6

1 8 ,8 9 2 ,7 9 0
4 ,6 8 4 ,2 7 1
4 ,2 0 6 ,5 2 6
4 ,2 4 2 ,1 1 5
7 0 4 .0 3 0
3 2 .7 2 9 .7 3 2
1 ,4 0 8 ,3 0 6
2 5 ,4 7 1 ,0 0 8
1 ,2 2 2 ,2 0 0
8 3 4 ,3 5 3

1 3 3 ,1 2 5
84,461 '
16 2 ,8 9 3
2 4 2 ,1 4 3 ......
9 1 ,4 5 3 ,6 9 4

14 4 ,4 0 8
9 0 ,3 6 0

15 7,9 6 1
2 2 6 .9 5 3
8 7 ,8 2 8 ,7 1 9

TBEA SU R Ï B SPà E ÏK M
Comptroller of the Currency
Washington
Press Service

.JOB BELSASB, MORUIHG WBWSPABERS
Thursday, Hovember 19* 19^2.

34-17

The Comptroller of the Currency today released the following preliminary figures, showing the assets and
liabilities of all active hanks in the United States and possessions on June 30* 1 9 ^ * and comparisons
such
figures with the assets and liabilities of all active banks on December $U 1941 and June 30, 1941.

01

(In thousands of dollars)

Dec* 3 1 ,
1941

Ju n e 30 *
1961

14*885

1 6 ,9 19

$ 9 , 617,560
15 . 560 , 7 ^
2 5 .1 7 8 .3 0 5

.$9 , 71 8 ,0 71
1 7 , 120.296
2 6 .8 3 8 .3 6 5

$ 9 .6 3 3 .3 0 5
1 5 ,9 1 0 ,1 3 3
2 5 ,5 6 3 .6 3 8

a7.2g7.165
3,075.85s

2 1 ,0 7 0 ,1 7 7
6 , 1+83,632
6 , 196,861
6 .1 6 5 ,1 1 5
6 7 3 .5 6 1 ... ...
3 6 .5 8 9 .36 b Z
1 .5 ^ 5 ,0 1 8
2 5 ,9 ^ 2 .3 7 7
1 ,2 0 9 ,4 8 0
706,4 86

1 8 ,8 9 2 ,7 9 0
4 ,6 8 4 ,2 7 1
Ij.,20 6 ,52 6
^ ,2 4 2 ,1 1 5
704*030
3 2 .7 2 9 .7 3 2 ..... _ _

Ju n e 30 ,
1942
14*815*

Humber of banks«•
ASSETS
Loans on real estate*«...*••••.«..«
•♦ »**•*
IJtE'ef Tos&sfincluding overdrafts*,
.»•••«•* my*
Total loans*
U. S. Government securities;
Direct obligations..•*«•*•**».»•
Guaranteed obligations*.............. ............... .
Obligations of States and political subdivisions*.....**..... *
Other bonds* notes, and debentures. • *•«•«*. .*•*•.#••*.•*•** »• **
Corporate stocks, including stock of federal ¡Reserve banks....*
Total investments*...*•*.•#*•*..*•*••*.*♦.**»•***••**«'•**«
Currency and c
o
i
n
.
....

3 ,9 7 6 ,8 2 1
>+,0 2 7,4 70
650,798
3 9 ,0 1 6 ,112~~
1 ,4 ^ 6 ,7 8 0
2 4 ,2 3 6 ,2 5 9
1 ,2 0 4 ,3 2 0
6 1 4 ,5 2 3

Balances with other banks, including reserve balances**...#.»*«
Bank premises owned, furniture and f i x t u r e s * . »
Heal estate owned other than, bank premises...... .
Investments and other assets indirectly representing bank
1 2 7 .7 8 1
premises or other real estate.**##............... .
6 7,9 6 1
Customers' liability on acceptances outstanding*.##...*#...*•♦.
Interest, commissions, rent, and other income earned or
accrued but not collected.
367.9 50 (
Other assets*•#*.**»»*.*»•*• *■■***•*..•♦*•«**.**■*-****«•»••l•*•*•*,
«S2.259.991
Total assets*.**-«..***•«*»*«•*.**•*•**•.**«*«-•#»*»**»♦«•-■
war«
* Excludes banks la Guam aad The Philippines on account of the

1,1+08,300

2 5 . 6 7 i.OO 8
1 , 222,200
8 3 6 ,3 5 3

1 3 3 .1 2 5
86,661

144,408
90,360

16 2 ,8 9 3
2 ^ 2 ,14 3

157.9 6 1
2 2 6 ,9 5 3
8 7 .8 2 8 ,7 1 9

91.653.696 ...

Press

;Kr,E<SE - M Oty Ja-o

--y~

C oniptrolie r
* <
=
>
f

---^ x

the

Currency today released -tin
«

•fi c m T Q J

« V ir r a ir l

-tV ia

S e r ^ r ic e
' *7

a s s e t .

....

(In thousands of dollars)

Comparison of assets and liabilities of all 'banks - Continued,

June

3 0

19^2

,

Dec* 31*

19^1

LIABILITIES
Deposits of individuals, partnerships, and corporations!
$37,805.1+31
Demand.............. ....................................
$39.^3.3f&
26.063,371+
lime..... .................. .................. ..........
25,613,382
i.ÿ+7 . 9 5 0
IJ* S. Government and postal savings deposits**..... •....*.*•**
1,902,191
i+,
303,1+16
Deposits of States and political subdivisions............... •*
^5^*311
1 1 ,0 1 5 , 1 1 0
Deposits of hanks,.................. .
..***.*» if 10,295.050
Í f JJ
Other deposits (certified and cashiers* checks, etc.)*....••••.
82,233,260
' 8 3 ,0 2 9 . 5 7 5
Total deposits*,**........**.... ..................... .
Bills payable, rediscounts, and other liabilities for
20,736
22,593
borrowed money.
1
0
0 ,5 2 1
78.641
Acceptances executed by or for account of reporting banks......
Interest, discount, rent, and other income collected but not
97.811
(
earned................. ..............
608,821
(
124,227
Interest, taxes, and other expenses accrued and unpaid...*..*..)
380,145
(
Other liabilities.................. .
82.958,557
83.737,773
Dotal liabilities***...*..»•*.*.*CAPITAL ACCOUNTS
108,194
104,171
Capital notes and debentures*.••«»•*••
290,914
312,085
Preferred stock*-*..•*•
2,6l4,QS2
2 ,6 0 3 , 6 0 1
Common ^stock.
3 ,7 0 ^ . 3 6 8
3.7Í+6.111
-Surplus.
1,248,461
1,270,261
*-• + » •
Undivided p r o f i t s . *>.....*
Beserves and retirement account for preferred stock and
5 O 7 .I6 O
507.9^7
• •:•' ♦i r♦**•♦p •'
capital notes and debentures*.. #
8,522,218
8 .4 9 5 . 1 3 7 .
Total capital accounts.«..............
91.453,694
9 2 .2 5 9 .9 9 1 _
Total liabilities and capital accounts
1/ Amounts as of June 30, 1942, are not comparable with amounts reported for prior
dates because of the exclusion on that date of $643,728,000 of reciprocal
interbank demand balances with banks in the United States, reported by
commercial banks. Such balances were previously reported gross*

1

1

Page 2

June 30*

19^1

$35.571.528
26,247,184
8 0 0 ,3 2 6

4,l40,029
10,982. ^ 3 1
78.51+9.329
22,55?
,5 9 *

1 0 6

101,181
114,899
409,638
79,304,200
114,683
3 3 1 .9*+5
2.608,377
3 ,6 1 6 , 7 6 3
1,247,041
605.710
8*524,519____
87,828,719

Assets and liabilities of all active banks in the United States and possessions, by classes,
June 30, 19*4-2 *
(In thousands of dollars)

j T o ta l
• a ll banks
Number o f banks,

» r,

N ational
banks
J ¥

f

A l l banks
other
xier than
vnan
national
j

»iw

Page

3

Banks other than n atio n a l
;
State
1 mutual
ï
Mutual
ì (commercial!i
savings î r va e
_
_
_
_
_
_
_
_
_.........................
...............................

ASSETS

T o ta l l o a n s . . . . ,
U. S . Government s e c u r itie s
D ire ct o b l i g a t i o n s * * ...^ ,,.. . . . . . . . . . .
Guaranteed o b l i g a t i o n s . . . . . . . . . . . . . . .
O b lig a tio n s o f S ta te s and p o l i t i c a l sub­
d i v i s i o n s . . . . . . . . . . . . . . . . . . . ..............
Other bonds, n o te s , and d e b e n tu re s .,. . . . .
Corporate stocks* in clu d in g sto ck o f fed ­
e ra l Reserve b a n k s..

$9.617,560 $2,247,061
15.560.71*5 S.654,734
25.17S,305 10,901.795

$7,370,499
6,906,011
l4.276.510

$2.631.615
... 6.781,455
..... 9.413.070

$4,736,569
77.752
4,814,321

27,287,165
27,287.165
3,075,85s

13.299,723
1,629,269

13.987.442
1,446,589

10,200,402
1,286,384

3.737.083
146,341

49.957

3,974,821
3*974,821
4,027*470
4,027,470

1.960,534
1.558,910

2,014,287
2,468,560

1,614,915
1,377.523

395.309
1,078,163

4,063
12,874

650.79s ...194,952
39,016,112 18,6*43,328
1,446*780
1,446*780
728*309

455,846
20,372.724
7I8.471

286,217
14,765,441
6361323

164,489
5.521,385
79,783

5,l40
85.898

10,648,005

9,928,501

48,194

615,630
542,029

499,192
175.140

671.310
115,946
366,023

58.362

16,859

Currency and c o i n .,. . . . . . . . . . . . . . . . . . . . . .
Balances w ith other banks, in clu d in g re­
serve balances l / . . . . . . . . . . . . . . . . . . . . . .
2*4,236,259
24,236,259 13.588.254
Bank premises owned, fu r n itu r e and f i x t u r e s . . . . . . ..............
1,204,320
588,690
R eal e s ta te owned other than bank premises
61*4,523
72,494
Investments and other a s se ts in d ir e c t ly
rep resen tin g bank premises or Other
r e a l e s t a t e .. . . . . . . . . . . . . . . . . . . . . . . . . . .
52,526
127.7a
Customers* l i a b i l i t y on acceptances out­
standing*
32.316
67.961
Other a s s e t s .. . . . . .
367,950 .. 111-193
T o ta l a s se ts I ./ ................................................ .. 92,259*991 4*4,718,965
* Omits fig u r e s f o r Guam and The P h ilip p in e s on account o f the war.
* * In cludes tr u s t companies and stock savings banks*

75.255
35,645
, 256,757
47.541,026

28,163 .
70,286
... 185,872
.... 35.&90.064
11.655,913

$2,315
46,804

49.119

13,864

2,365
492
866

3^
7,482
599

.

195,049._

Assets and lia b ilitie s of a ll active banks in the United States and possessions, by elasses,
June 30*. 1942 - Contd*
(In thousands of dollars)
: A ll banks
* other than
1 national

:
Banks other than national
:
State
; Mutual
:Private
: ( commercial) : savings

$39,9«3.3S6 $21,945,397
7,841,032
25.613.382

$18, 037,989
17*772,350

$17,925,021* $
2,196 $110,769
7,392.81*9 10,366,404
13,097

1, 902,191

1,189,410

712,781

712. 0*0

523

218

4.454,371
10, 295,050
781,195.
23.029,575

2,741,720
6,498,697
442,861
1*0 , 659,117

1, 712,651
3. 796,353
..338.331*
1+2,370,1*58

1 , 708, 1*51
3*759.702
336.129
31, 831*.195

1.394
228
686
10, 371*431

2,806
36,423
1,519
164,832

20,736

2,014

18,722

16,975

30

U717

78, 64l
60s ,821

37.232
341,110
1*1.039.1*73

4i ,409
267,711
42,698,300

33*085
229,629
32,113,684

12
37,593
10,409,066

8,312
489
175,350

104,171
290,914
2 , 603,601
3,746,111
1, 270,261

5 1 5 ,9 * 9

104,171
138,535
1,248,310
2.331+.70i*
75U.312

98,100
I 3S.535
1,242,057
1,433*021
458,112

6,011

152,379
1*355,291
1,411,407

g89,76s
295.S73

6,253
11,915
327

507,160
8,522,218

244,466
3.679,1*92

262,694
4,842,726

206,295
3,576.180

55,195
1,246,847

1,204
19,699

92, 239,991

44,718,965

47,541,026

35,690,064

11, 655.913

195.049

643,728

1*39,310

204,418

* Total
*all banks
LIABILITIES
Deposits of individuals, partnerships,
and corporationsi
Demand.. . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Time...............................................
U. S* Government and postal savings
deposits.
Deposits of States and p o litical subdivisions,. . . . . . . .
Deposits of banks l/ * * ., ♦ ,..**»*. ,.* * * * ,
Other deposits*..*♦ »♦ *.*. . . . . . . . . . . . . . .
Total deposits Jl/ .* .......* * * * * * * *
B ills payable, rediscounts, and other
lia b ilitie s for borrowed m oney.....**
Acceptances executed by or for account
of reporting banks.... . . . . . . . . . . . . . . .
Other lia b ili t i e s .. . . . . . . . . . . . . . . . . . . . .
Total lia b ilitie s ¿ / . . . .
CAPITAL ACCOUNTS
Capital notes and d e b e n tu r e s * ,......* ..
Preferred stock.
Common stock..• « • • • • • • • * .• * .... . . . . . . . .
Surplus. * • • * • * . . * . . . . . . . . . . . . . . . . . . . . . .
Undivided p r o fits .. . . . . . . . . . . . . . . . . . . . .
reserves and retirement account for
preferred stbck and capital notes
and debentures.
Total capital accounts*.
Total lia b ilitie s and capital
account s 1/
Reciprocal balances with banks in
the United S t a t e s . . * » . . . . . , . . . . . . . . . .
1f
__— • - ____ n «
*
-, *

Page 4

§ M 2 L JJ1 .

* Rational
** banks

amounts of which are shown below "Total liabilities and capital accounts".

—
«»MH»

—
—
204,418
(heretofore reported gross), the

,

\Before Secretary Morgenthau recommended too Congress on
March 3 ^that income taxes b e collected at the source, the Treasury
made extensive studies of busiress opinion on this ooint. Mr.
Paul

remficlnw u

out to assemble
ing

Fourteen teams of Investigators were sent
first hand information, with each team consist­

of a representative of the Bureau of Internal Revenue and

one of the Treasury Department's Tax Research Division.
More than 450 business firms were contacted. Eighty per cent
favored the collection-at-source plan

7

The Tr easury official concluded with a recital of the
progress of the tax bill through the House, the S enate, the
joint conference committee of the House and Senate appointed to
adjust

their differences over the measure, and so to its final

enactment.
-o-

-:ÊÈÈ~

'JS&-

>

3

) Mr. Paul said he gave his hack-stage picture of the
If * "-1

revenue act's evolution "not for the purpose of revealing any
dark, sensational secrets, but rather in order that you may
have an understanding of the quantity and quality of the work
done by your administrative and legislative representatives, arid
in the hope

that you may have some compassion for those

who have in their charge the inevitable revenue legislation

of

the future."
jili^recalled

that even before the President submitted

to

Congress his budget message of last January calling for
$56,000,000, of war expenditures in the new fiscal year —

a figure

a

later Increased to $78,000,000.—

Treasury experts had been

assembling data on possible sources of additional revenue.
[By March 3, when Congress began its tax bill deliberations,
the Treasury had sifted hundreds of suggestions by its own
personnel, plus the views of such other GrovernmentS

agencies as

the Bureau of the Budget, the Federal Reserve Board, the War
Production Board, the Office of Price Administration, and the War
and Navy Departments, and finally proposals from many
non-G-ov emmental

sources.

|"Through the offices of the Treasury there passed

a stream

of taxpayers and their representatives," Mr. Paul said. "Much
valuahle aid

was derived from them. Thousands of suggestions

were made by correspondence. Many of the suggestions received
in the Treasury mail

culminated in actual provisions of the

Revenue Act of 1942. We are still studying others."

While
pummmh

Paul's address for the most part was a "behind

the scenes" description of the manner in which the tax bill
came into being, rather than an appraisal of its merits, he
took brief note of the fact that the bill has been subjected
to much criticism, and commended one of the measure's
outstanding features.
Much of the criticism is in order insofar as it is
directed to the

inadequacy of the bill from the standpoint of

curbing inflation and from the revenue standpoint," he said.
"However, we may say a few words in praise of the bill.
I111iiim*****

"The Act contains more relief provisions than any other
act

in our history. Page after page

is devoted to the

elimination of inequities. Many minor loopholes are closed.
In this

sense, if not in a fiscal sense, the Revenue A ct of

1942 is a great bill.
j"We had reached the point in our rate structure where
loopholes resulted in a very serious loss of revenue, and where
Inequities and discriminations
The tax structure

threatened to be disastrous.

had to be put in shape to carry an Increased

load. That has been partly done in the Revenue Act of 1942,
and we have now a basic

tax structure

to stand the strain of increased rates."

which will be better aBle

« mi».eh afeet-raci

I

/

W
a
l o * J

{ J?

t

/

M M

1

0

n

law last month and

fi

f *SlsC<4*& V
i¿44*?

/¿V/£h
New York, iStfS’. -

U

¡ ¡ ¡ g 3V-/21
i

The new Federal tax bill, enacted into

now being placed in effect, set a record

laf

not only for severity of the taxes it levied but also for the
amount of labor of brain and brawn that went into its preparation
the New School for S0cial Research was told tonight.
iThe New School heaid Randolph E. Paul, General Counsel

The If
§e Irei
ions
;s,,by(
¡tax bil
! produc

of the Treasury Department, narrate the story of long months
of tedious work by the Treasury and other Government departments,
by Congress,

and by private citizens and agencies as the tax

bill grew from the idea stage to a completed legislative
product.

A tax

“The Birth of the Revenue Act of 1 9 4 2 “ was his subject.

■work,
¡only in
also in
^ item

tax bill “is the product of many minds and many conferen­
ces,"

Mr . Paul summed up.

“It requires the most intensive

j

legal work. It requires an investigation of every proposal
no|r only in the light

>|

of its impact upon our entire economy

ling in
they
Demo

but also in the light of its effect upon a particular industry.
Every item in the Act is tested not only in ordinary discussion
but by much cross examination in the legislative process.
j“The end product is sometimes too long and is sometimes
lacking in what many would want. But if these are

disadvantages,

they are the disadvantages that go with the advantage of the
Democratic process.“

j

! into t
I brief
|ch cri

feature

"lich
I I I to t
h inf

I k «

TREASURY DEPARTMEHT
Y/ashington
FOR RELEASE MORHIHG HEWSPAPERS,
Wednesday, November 18, 1942♦

Press Service
Ho, 34-18

ii/ 17/42

New York, Hov, 17?

The new Federal tax bill, enacted in­

to law last month and now being placed in effect, set a record
not onl3r for severity of the taxes it levied but also for the
amount of

labor of brain and brawn that went into its prep­

aration, the Hew School for Social Research was told tonight,
The Hew School heard Randolph E. Paul, General Counsel
of the Treasury Department, narrate the story of long months
of tedious work by the Treasury and other Government depart­
ments, ,by Congress, and by private citizens and agencies as
the tax bill grew from the idea stage to a completed legisla­
tive product, ”The Birth of the Revenue Act of 1942” was his
subject.
A tax bill Mis the product of many minds and many confer­
ences,” Mr, Paul summed up, ”It requires the most intensive
legal work. It requires an investigation of ever3r proposal
not only in the light of its impact upon our entire economy .
but also in the light of its effect upon a particular industry
Every item in the Act is tested not only in ordinary discus­
sion but by much cross examination in the legislative process*
’’The end product is sometimes too long and is sometimes
lacking in what many would want. But if these are disadvan­
tages, they are the disadvantages that go with the advantage
of the Democratic process.”
Y/hile Mr. Paul’s address for the most part was a !,behind
the scenes” description of the manner in which the tax bill
came into being, rather than an appraisal of its merits, he
took brief note of the fact that the bill has been subjected
to much criticism, and commended one of the measure’s outstand
ing features,
’’Much of the criticism is in order insofar as it is di­
rected to the inadequacy,of the bill from the standpoint of
curbing inflation and from the revenue standpoint,” he said.
’’However, we may say a few words in praise of the bill.

-

2

-

"The Act contains more relief provisions than any other
act in our history♦ Page after page is devoted to the elim­
ination of inequities. Many minor loopholes are closed# In
this sense, if not in a fiscal sense, the Revenue Act of 1942
is a great bill*
"We had reached the point in our rate structure where
loopholes resulted in a very serious loss of revenue, and where
inequities and discriminations threatened to be disastrous*
The tax structure had to be put in shape to carry an increased
load. That has been partly done in the Revenue Act of 1942,
and we have now a basic tax structure which will be better
able to stand the strain of increased rates *"
Mr. Paul said he gave his backstage picture of the revenue
act!s evolution "not for the purpose of revealing any dark,
sensational secrets, but rather in order that you may have an
understanding of the quantity and quality of the work done by
your administrative and legislative representatives, and in
the hope that you may have some compassion for those who have
in their charge the inevitable revenue legislation of the
future."
/
He recalled that even before the President submitted to
Congress his budget message of last January calling for
¿56*000,000*00® of war expenditures in the new fiscal year — * a
figure later increased to ¿78^000,000^)00— Treasury experts had
been assembling data on possible sources of additional revenue.
By March 3» when Congress began its tax bill delibera­
tions, the Treasury had sifted hundreds of suggestions by its
own personnel, plus the views of such other Government agen­
cies as the Bureau of the Budget, the Federal Reserve Board,
the War Production Board, the Office of Price Administration,
and the War and Davy Departments, and finally proposals from
many non-Governmental sources.
"Through the offices of the Treasury there passed a stream
of taxpayers and their representatives," Mr. Paul said. "Much
valuable aid was derived from them. Thousands of suggestions
were made by correspondence. Many of the suggestions received
in the Treasury mail culminated in actual provisions of the
Revenue Act of 1942, Vie are still studying others."
Before Secretary Morgenthau recommended to Congress on
March 3 that income taxes be collected at the source, the
Treasury made extensive studies of business opinion on this
point, Mr, Paul revealed. Fourteen teams of investigators
were sent out to assemble first-hand information, with each
team consisting of a representative of the Bureau of Internal
Revenue and one of the Treasury Departments Tax Research

- 3 -

Division, More than 450 business firms were contacted. Eighty
percent favored the collection-at-»source plan, he said.
The Treasury official concluded with a recital of the
progress of the tax bill through the House, the Senate, the
joint conference committee of the House and Senate appointed
to adjust their differences over the measure, and so to its
final enactment.

-oOo-

TR EA SuKi
13we&sj o;f

rt£NT
H.Cveiw^L.

\A/<nUl *.p/'^vVk
FOR IMMEDIATE RELEASE

^

Fr i cfay, November ZO, 1042.

? V e c c u /v u <l

Hd . 3Y-/f

Commissioner of Internal Revenue Guy T. Eelvering announced today
the opening of the Detroit office of the new Salary Stabilization Unit
of the Bureau of Internal Revenue.

The Unit will be located on the 14th

floor of the Penobscot Building, Detroit, Michigan.

The office will be

in charge of C. D. Leiter, who has a record of more than twenty years of
responsible work in the Internal Revenue Service.
The territorial jurisdiction of the Detroit office will cover the
State of Michigan. That office will rule, for and on behalf of the Commis­
sioner of Internal Revenue, on all requests and applications for salary
increases and decreases coming within the jurisdiction of the Commissioner
as defined in the regulations of the Economic Stabilization Director and
approved by the President on October 27, 1942.
The jurisdiction of the Commissioner covers all salaries over $5,000
per year, and salary payments of less than $5,000 per year in the case of
executive, administrative or professional employees not represented by
labor organizations.
Under the present arrangement employers in the State of Michigan will
address their requests for rulings to "Head, Salary Stabilization Unit,
14th Floor, Penobscot Building, Detroit, Michigan", and will obtain
rulings from that office as to proposed salary adjustments. 'Whenever
necessary, employers may confer with the members of the Detroit office
regarding proposed adjustments. Procedure will be provided to permit
appeals to the Commissioner of Internal Revenue in Washington in case of
adverse rulings by the Detroit office.
Although rulings of the Detroit office are subject to modification or
reversal of the Commissioner of Internal Revenue in Washington, employers
obtaining favorable rulings from the Detroit office can in each instance
rely on such rulings. Ho modification or reversal by the Commissioner of
the ruling made by the Detroit Office will be given retroactive effect.

TREASURY DEPARTMENT
Bureau of Internal Revenue
Washington
FOR IMMEDIATE RELEASE
Friday, November 20, 1942

Press Service
No* 34-19

ÏÏ7Ï874?--------------- :--------

Commissioner of Internal Revenue Cuy T. Helvering announced
today the opening of the Detroit office of the new Salary Stab­
ilization Unit of the Bureau of Internal Revenue*

The Unit

will be located on the 14th floor of the Penobscot Building*
Detroit* Michigan*

The office will be in charge of C* D. Leiter,

who has a record of more than twenty years of responsible work
in the Internal Revenue Services
The territorial jurisdiction of the Detroit office will
cover the State of Michigan. That office will rule, for and
on behalf of the Commissioner of Internal Revenue, on all re­
quests and applications for salary increases and decreases
coming within the jurisdiction of the Commissioner as defined
in the regulations of the Economic Stabilization Director and
approved by the President, on October 27, 1942*
The jurisdiction of the Commissioner covers all salaries
over #5,000 per year, and salary payments of less than #5,000
per year in the case of executive, administrative or profes­
sional employees not represented by labor organizations.
Under the present arrangement employers in the State of
Michigan will address their requests for rulings to "Head,
Salary Stabilization Unit, 14th Floor, Penobscot Building,
Detroit, Michigan", and will obtain rulings from that office
as to proposed salary adjustments* Whenever necessary, em­
ployers may confer with the members of the Detroit office re­
garding proposed adjustments* Procedure will be provided to
permit appeals to the Commissioner of Internal Revenue in
Washington in case of adverse rulings by the Detroit office*
Although rulings of the Detroit office are subject to mod­
ification or reversal of the Commissioner of Internal Revenue
in V/ashington, employers obtaining favorable rulings from the
Detroit office can in each instance rely on such rulings. No
modification or reversal by the Commissioner of the ruling
made by the Detroit Office will be given retroactive effect*
-oOo-

V s UiVv*. £ * * * FOR IMMEDIATE RELEASE
Monday, November 23rd.

3Y~ X*

Commissioner of Internal Revenue Guy T. Helvering announced
today the opening of the San Francisco office of the new Salary
Stabilization Unit of tte Bureau cf Internal Revenue.

The Unit

will be located on the ninth floor of the 100 McAllister Street
Building (formerly Empire Hotel), San Francisco, California.

The

office will be in charge of Milo W. Bean, who has a record of more
than twenty years of responsible work in the Internal Revenue Service.
The territorial jurisdiction of the San Francisco office will
cover the First Collection District of California, Nevada, Utah,
and Hawaii. That office will rule, for and on behalf of the Commis­
sioner of Internal Revenue, on all requests and applications for
salary increases and decreases coming within the jurisdiction
of the Commissioner as defined"in the regulations of the Economic
Stabilization Director and approved by the President on October 27,
1942.
The jurisdiction of the Commissioner covers all salaries over
$5,000 per year, and salary payments of less than $5,000 per year
in the case of executive, administrative or professional employees not
represented by labor organizations.
Under the present arrangement employers in the First Collection
District of California, Nevada, Utah, and Hawaii will address their
requests for rulings to nHead, Salary Stabilization Unit, Ninth Floor,
100 McAllister Street Building, San Francisco, Califoraia", and will
obtain rulings from that office as to proposed salary adjustments.
Whenever necessary, employers mdy confer with the members of the^
San Francisco office regardingproposed adjustments. Procedure will
be provided to permit appeals'to the Commissioner of Internal Revenue
in Washington in oase of adverse rulings by the San Francisco office.
Although rulings of the San Francisco office are subject to
modification or reversal of the Commissioner of Internal Revenue in
Washington, employers obtaining favorable rulings from the San Francisco
office can in each instance rely on such rulings. No modification or
reversal by the Commissioner of the ruling made by the San Francisco
office will be given retroactive effect.

TREASURY DEPARTttBHT
Bureau oT Internal Revenue
Washington
FOR' IMMEDIATE RELEASE,

Press Service

Monday, November 23, 1942,

No? 34?2Q

11/18/42

Commissioner of Internal Revenue Guy T, Helvering announced
today the opening of the San Francisco office of the new Salary
Stabilization Unit of the Bureau of Internal Revenue,

The Unit

will be located on the ninth floor of the 100 McAllister Street
Building (formerly Empire Hotel), San Francisco, California,
The office will be in charge of Milo W. Bean, who has a record
of more than twenty years of responsible work in the Internal
Revenue Service,
The territorial jurisdiction of the San Francisco office
will cover the First Collection District of California, Nevada,
Utah, and Hawaii, That office will rule, for and on behalf of
the Commissioner of Internal Revenue, on all requests and ap­
plications for salary increases and decreases coming within the
jurisdiction of the Commissioner as defined in the regulations
of the Economic Stabilization Director and approved by the
President on October 27, 1942,
The jurisdiction of the Commissioner covers all salaries
over $5,000 per year, and salary payments of less than $5,000
per year in the case of executive, administrative or profes­
sional employees not represented by labor organizations.
Under the present arrangement employers in the First Col­
lection District of California, Nevada, Utah, and Hawaii will
address their requests for rulings to "Head, Salary Stabiliza­
tion Unit, Ninth Floor, 100 McAllister Street Building, San
Francisco, California", and will obtain rulings from tha't of­
fice as to proposed salary adjustments. Y/henever necessary, em­
ployers may confer with the members of the San Francisco office
regarding proposed adjustments, Procedure will be provided to
permit appeals to the Commissioner of Internal Revenue in
Washington in case of adverse rulings by the San Francisco office.
Although rulings of the San Francisco office are subject to
modification or reversal of the Commissioner of Internal Revenue
in V/ashington, employers obtaining favorable rulings from the
San Francisco office can in each instance rely on such rulings.
No modification or reversal by the Commissioner of the rulings
made by the San Francisco office will be given retroactive effect^
-oOo-

A T iilir a M .

- 3 -

issue or on subsequent purchase, and the amount actually received either
upon sale or redemption at maturity during the taxable year for which the
return is made, as ordinary gain or loss*
Treasury Department Circular No* 418, as amended, and this
notice, prescribe the terms of the Treasury bills and govern the condi­
tions of their issue*

Copies of the circular may be obtained from any

Federal Heserve Bank or Branch

TflTTOTTy
- 2 Reserve Banks and Branches^.following which public announcement will be made
by the Secretary of the Treasury of the amount and price range of accepted
bids»

Those submitting tenders will be advised of the acceptance or rejec­

tion 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*

Payment of accepted tenders at the

prices offered must be made or completed at the Federal Reserve Bank in
cash or other immediately available funds on

November 25f 1942----- •

The income derived from Treasury bills, v/hether interest or gain
from the sale or other disposition of the bills, shall not have any exemption,
as such, and loss from the sale or other disposition of Treasury bills shall
not have any special treatment, as such, under Federal tax Acts now or here­
after enacted.

The bills shall be subject to estate, inheritance, gift, or

other excise taxes, whether Federal or State, but shall be exempt from all
taxation now or hereafter imposed on the principal or interest thereof by
any State, or any of the possessions of the United States, or by any local
taxing authority*

For purposes of taxation the amount of discount at which

Treasury bills are originally sold by the United States shall be considered
to be interest*

Under Sections 42 and 117 (a) (l) of the Internal Revenue

Code, as amended by Section 115 of the Revenue Act of 1941, the amount of
discount at which bills issued hereunder are sold shall not be considered
to accrue until such bills shall be sold, redeemed or otherwise disposed
of, and such bills are excluded from consideration as capital assets*
Accordingly, the owner of Treasury bills (other than life insurance com­
panies) issued hereunder need include in his income tax return only the
difference between the price paid for such bills, whether on original

■Bf m

TREASURY DEPARTMENT
Washington

mu £

FOR RELEASE, MORNING NEWSPAPER,
Friday. November 20, 1942_____ •

The Secretary of the treasury, hy this public notice, invites tenders

¡1 m
f o r $ 500.0 0 0,0 00

. o r thereabouts, of

91 - day T re a su ry b i l l s ,

on a discount b a s is under com petitive b id d ing .
be dated

The D i l l s of t h is s e rie s w ill

November 251
. 1942____ » anc^ will mature

3S

to be issued

when the face amount will be payable without interest.

February 24, 1942

'v
They will be issued in

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

1 Treas

Tenders will be received at Federal Reserve Banks and Branches up to the
War
'■
closing hour, two o rclock u. m., Eastern
time, Monday, November 23, 124k
xm .

Tenders will not be received at the Treasury Department, Washington.

Each tender

Ö [tenders
SI K enve

must be for an even multiple of $1,000, and the price offered must be expressed

: I or Bra:

on the basis of 100, with not more than three decimals, e. g., 99.925.

p ie r s
1 ani tn
| s in 1]
Ipanied 1

may not be used.

Fractions

It is urged that tenders be made on the pointed forms and foi’P

warded in the special envelopes which will be supplied by Federal Reserve Banks

appesi

or Branches on application therefor.

compani
Tenders will be received without deposit from incorporated banks and

[fceiiaj

trust companies and from responsible and recognized dealers in investment secure

Seders
Nient
!ani nr
■ be

am
ties.

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 b?
an express guaranty of payment by an incorporated bank or trust company.
/immediately after the closing hour, tenders will be opened at the Fedelj

3

/

aci

| p ?

I Pei

TREASURY DEPARTMENT
Washington

FOR RELEASE, MORNING- NEWSPAPERS,
.Friday, November 20, 1942.

The Secretary of the Treasury, by this public notice,
invites tenders for $600,000,000, or thereabouts, of 91-day
Treasury bills, to be issued on a discount basis under competi­
tive bidding.- The bills of this series will be dated Novem­
ber 25, 1942, and will mature February 24, 1943, when the face,
amount will be payable without interest.

They will be issued

in bearer form only, and in denominations of $1,000, $5,000,
$10,000, $100,000, $500,000, and $1,000,000 (maturity value).
Tenders will be received at Federal Reserve Banks and
Branches up to the closing hour,-two O ’clock p.m., Eastern War
time, Monday, November 23, 1942. Tenders will not be received
at the Treasury Department, Washington. Each, tender must be
for. an eveh multiple of $1,000, and the price offered must be
expressed on the basis of 100, with not more than three deci­
mals, 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/
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 Secretary of the Treasury of the
amount and price range of accepted bids. Those submitting ten­
ders 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
(over)

£

his action in any such respect shall be final* Payment of
accepted tenders at the prices,offered must be made or complete!
at the Federal Reserve Bank in’cash or other immediately avail­
able funds on November oc
• The income derived from Treasury bills, whether interest or
gain from the sale or other disposition of tne bills, shall not
have any exemption, as such, and loss from, the sale or other
disposition of Treasury bills shall not have any special treat­
ment, as such, under Federal tax Acts now or hereafter enacted.
The bills shall be subject to estate, inheritance, gift, or
other excise taxes, whether Federal or State, but shall be ^
exempt from all taxation now or hereafter imposed on the prin­
cipal or interest thereof by any State, or any of. the posses­
sions of the United States, or by any local taxing authority.
For purposes of taxation the amount of discount at which ^ .
Treasury bills are originally sold by the United States shall
;
be considered to be interest* Under Sections 42 and 11/ (a) (1)
of the Internal Revenue Gode, as amended by Section 115 of the ;
Revenue Act of 1941, the amount of discount at which bills, issued
hereunder are sold shall not be considered to accrue until such
bills shall be sold, redeemed or. otherwise disposed of, and such
bills are excluded from consideration as capital, assets, Accord­
ingly, the owner of Treasury bills (other than life insurance
companies) issued hereunder need include in his income tax return
only the difference between-the price paid for. such bills, whether
on original issue or on subsequent, purchase, and the amount actu­
ally received either upon sale or redemption at maturity during
the taxable year for .which the return is made, as- ordinary
or loss,
Treasury Department Circular No* 418, as .amended, and this
notice, prescribe the terms of the Treasury bills and govern th
conditions of their issue* Copies of the circular may be ob­
tained from any Federal Reserve Bank or Branch*

-oQo~

f

- 4
The 2 1/2 per cent bonds, 1 3/4 per cent bonds and 7/8 per cent
c e r t if i c a t e s o f indebtedness w i l l be dated December 1 , 1942 and w i l l bear
in te r e s t from th a t date»

Accrued in te r e s t w i l l be charged on a l l

su b scrip tio n s fo r which payment a t a Fed eral Reserve Bank.or a t an
au th orized d ep o sitary i s re c e iv e d l a t e r than December 1»
Any bank or t r u s t company q u a lifie d to hold War Loan d ep osits w ill
be perm itted to make payment by c r e d it fo r s e c u r it ie s subscribed fo r it s
own account or th a t o f i t s customers up to any amount fo r which i t sh a ll
be q u a lifie d in excess of e x is t in g d eposits»
A l l elements o f the banking and s e c u r it ie s business w i l l conduct a
vigorous campaign to assure the w id est p o s s ib le p u b lic purchases o f a l l
is s u e s o f th ese s e c u r itie s »

In con ju n ctio n w ith weekly s a le s o f discount

b i l l s , these arrangements w i l l make approxim ately h a lf the §9,000,000,000
o f Treasury borrowing in December av a ilab ]
the other h a l f w i l l be made a v a ila b le , by r

.

brs.

The

w idest p o s sib le p u b lic p a r tic ip a t io n i s e s s e n t ia l in the in t e r e s t o f
sound fin a n cin g out o f current income and savings#
A fte r completion o f t h is borrowing the Treasury does not expect to
do fu rth e r major fin a n c in g u n t il February.

For i t s new money.needs in

je^PP=CTTTX:

Ja n u a r ^ th e Treasury w i l l r e ly o l f f t b r upon fu r th e r s a le s o f Tax Savings
N otes, Savings Bonds, and Treasury b i l l s .

Oô

b

»' ' 1'’'''
4*

form only#

The bonds w ill be sold in denominations

from $500 to $100,000, and the c e r t ific a t e s from
$1,000 to $100,000.
The 2 1/2 per cent bonds, 1 2/4 per cent bonds and
7/8 per cent c e r t ific a t e s or\ indebtedness w ill be dated
December 1, 1942 and w ill be air In te re st from that date.
Accrued in te re st w ill be charged on a l l subscriptions for
which payment at a Federal ReseWe Bank or at an authorized
depositary is received la te r tha^i December 1.

/

Any bank or tr u s t company q u a lifie d to hold Wap io an
deposits w ill be permitted to

m k ik

payment by cre d it for

se cu ritie s subscribed for i t s own Account oi* that of i t s

\

customers up to any amount fo r whicM ij/ s h a ll be q u alified
in excess o f e x is tin g d e p o sits.

/

/

r

A l l elomants o f the bankirç*/ and aeeu rH ies business w ill
y

conduct a vigorous campaign/to assure the widest possible public
purchases of a l l issues ^df these s e c u r itie s .

In conjunction

jri'

with weekly sa le s of/discount b i l l s , these arrangements w ill
approximately h a lf the $9,000,000,000 o f Treasury borrowing

/

in December availab le from commercial banks, while the other
h a lf w i l l be made a v a ila b le by non-banking in vesto rs.

The

widest possible public p a rticip a tio n is e sse n tia l in the interest
of sound financing out of current income and sa v io rs.

3«

Salas to commercial banks w il l be lim ited to $2,000,000,000
or thereabouts of each series»

Applications from

commercial banks in amounts up to $100,000 w ill be
a llo tte d in f u l l , and larger subscriptions on an equal
percentage basis»

A l l app lication s from others than

commercial banks w ill be a llo tte d in f u l l .

The to tal

o f these s e c u r itie s to be issued thus w ill be the
$4,000,000,000 from commercial banks, plus the f u l l
amount subscribed by others*
For a l l classes o f subscribers other than commercial
banks, subscription books w ill be opened November 30
for both s e r ie s , and w ill remain open fo r several weeks. .
For commercial banks subscription books w ill be opened
November 30 on the 1 3/4 per cent bonds and w ill remain
open u n til the close of business December 2, while book«
w ill be opened December 16 on the 7/8 per cent

c e r

tificate

and w i l l remain open u n til the close of business December
In the case o f such bank su bscrip tion s, payment for the
bonds must be made on December 11, and fo r the certificate
on December 28«
The 1 8 /4 per cent bonds w il l be issued in coupon or
registered forms, a t the option of the buyers*

The

7/8 per cent c e r t ific a t e s w ill be issued in coupon

2.
Almost every c itiz e n has funds in the fora o f. currency
or bank deposit® which can be e n liste d in the war e ffo r t in
one way or another through the purchase of Government securities*
The sp e cia l o ffe rin gs to be sold under the d ire ctio n of
the Victory fund Committees w il l co n sist o f:
1.

Twenty-six year 2 1/2 per cent bonds due December 15,
1968» c a lla b le December 15, 1963, to be issued in
coupon or registered form at the option of the buyers*
Commercial banks, which are defined fo r th is purpose
as banks accepting demand d e p o sits, w i l l not be
permitted to hold these bonds u n til ten years a fte r
the date of issu e .

There w ill be no lim it to the

amount of t h is issu e , and no r e s tr ic tio n s upon
issuance excepting the temporary exclusion of
commercial banks from ownership for their own
account.

Subscription books w ill be opened

Hovember 30, and w ill remain open several weeks.
The bonds w ill be sold in denominations from $500
to $100,000.
2»

Two series intended for banks as w ell as other
in vestors;

(a) 1 3/4 per cent bonds due June 15, 1948,

and (b) 7/8 per cent c e r t ific a t e s o f indebtedness due
one year a fte r issuance.

These se c u r itie s w i l l be opes

for subscription by banks, and also by a l l other classes
of in v e sto rs, whether p r iv a te , corporate or institutional

la oriler to f xlm nce the war e f f o r t , which now 1® moving
into f u l l s t r id e , tW Baited S ta te s Treasury w ill borrow during
December the unprecedented sum o f approximately $2,000,000,000.
This sum w i l l be raised through o ffe rin g s o f a number o f Treasury
\

issues designed fo r every c la s s end I f f # o f in vesto r.

Every

American w ill have an opportunity to back the armed forces with
\

bond» #

\
\ 1

The Victory Fund Committee* w ill launoh an intensive sales
campaign on November 30 on t'br^e series o f sp e cia l offerings
o f scour it la s .

These w ell organised and expanding groups of

44,000 volunteer workers, drawn la rg e ly from the secu rities
\

- 11

and banking f i e l d s , w i l l s o l i c i t subscriptions from individual

\

*

J

in vesto rs, corporations, savings *nd\cona»rcial banks, insurants«
companies. In s titu tio n s , tru sts and e s ta te s ,
of the Federal Reserve Bank In each of

\h m

The President

twelve d is tr ic ts

is chairman o f the V ictory Fund Committed in bis d istrict#
f

\

- ..L^k

i t the same time ill# War Savings S t a f f , w ith i t s 300,000

volunteers in every community, w il l Intent i^y i t s drive to i l l
\

at le a s t 7,000,000 more income-earners to th<^ ranks of those

V
already investing' regu larly in Series 1 f a r Isolds through tbs
payroll savings plan.

\

\

Iljjj

f

^

r

T

zrw^

V
xt

,v.

d pi i J f

Z

>
/I

v

ecretary Morgenthau

tsJL s " U U ^~€£<H A,fv,o>

iCetX#.>‘‘$s4N«Jl«*wy

In order to finance the war e f f o r t , which now is moving
into f u l l s tr id e , the United Sta te s Treasury w ill borrow during
fy^-*yvx A - iX S ’trxA.x ttt.,

December the unprecedented sum o f approximately $9,000,000,000*
This sum w i l l be raised^ through o ffe rin g s of a number of Treasury
Tvc-tA/* 7F-*

^issues designed fo r every c la s s and type o f in vesto r.

Every
A

American w ill have an opportunity to back the armed forces with
bonds.
The Victory Fund Committees w ill launch an intensive sales
campaign on November 30 on three series o f «special offerinps
© insecurities.

These w ell organized and expanding groups of

44,000 volunteer workers, drawn la rg e ly from the securities
and hanking f i e l d s , w ill s o l i c i t subscriptions from individual
in vesto rs, corporations, savings and commercial banks, insurance
companies, in s titu tio n s , tru sts and e s ta te s .

The President

of the Federal Reserve Bank in each of the twelve d is t r ic ts
is chairman o f the V ictory Fund Committee in his d i s t r i c t .
At the same time the fa r Savings S t a f f , with i t s 300,000
volunteers in every community, w i l l in te n sify i t s drive to add
at le a s t 7,000,000 more income-earners to the ranks o f those
already investing regu larly in Series E fia/lsndS''through the
payroll savings plan*

ij

TREASURY DEPARTMENT
W ashington

PCH H S ISA S S ; MORNING PARSES,
F r id a y , November 2 0 , 1942

• 'P ro s s S e rv ic e
Kcu 3 / ^ 2 2 "

M orgenthau to d a y mad© th e fo llo w in g sta te m e n t;
H k'

'^n o rh e r to fin a n c e th e w ar e f f o r t , w hich now i s m oving in t o f u l l

.. .s t r id e , th e Ih iit e d S ta te s T re a s u ry V i l l b o rro w d u rin g December th e un­
p re ce d e n te d sum o f a p p ro x im a te ly $ 9 ,0 0 0 ,0 0 0 ,0 0 0 from a l l s o u rc e s .

T h is

sum w i l l be r a is e d p a r t ly th ro u g h th e c o n tin u in g s a le o f S a v in g s Bonds
and T ax S a v in g s N o te s, and p a r t ly th ro u g h o f f e r in g s o f a number o f new
T re a s u ry is s u e s d e sig n e d f o r e v e ry c la s s and ty p e o f in v e s to r*

Thus

e v e ry A m erican w i l l have an o p p o rtu n ity to b ack th e armed fo rc e s w ith bonds
ih e V ic t o r y Fund Com m ittees w i l l la u n c h an in t e n s iv e s a le s cam paign
on November 30 on th re e s c r ie s o f o f f e r in g s o f new s e c u r it ie s .

These

w e ll o rg a n is e d and exp an d in g groups o f 4 4 ,0 0 0 v o lu n te e r w o rk e rs , drawn
la r g e ly from th e s e c u r it ie s and b a n k in g f ie ld s , w i l l s o l i c i t s u b s c rip t io n s
from in d iv id u a l in v e s t o r s , c o rp o ra t io n s , s a v in g s and com m ercial b a n k s,
in s u ra n c e co m p anies,, in s t it u t io n s , t r u s t s and e s ta te s*

The P re s id e n t

o f th e F e d e ra l R e se rv e Bank in each o f th e tw e lv e d i s t r i c t s i s chairm an
■ o f th e V ic t o r y Fund Com m ittee in h is d i s t r i c t .
A t th e same tim e th e W ar S a v in g s S t a f f , w ith i t s 30 0 ,0 0 0 v o lu n te e rs
in e v e ry com m unity, w i l l In t e n s if y i t s d r iv e to add a t le a s t 7 ,0 0 0 ,0 0 0
more incom e—e a rn e rs to th e x’anks o f th o se a lre a d y in v e s t in g r e g u la r ly in
S e r ie s 2 War S a v in g s Bonds th ro u g h th e p a y r o ll s a v in g s plan*
A lm o st e v e ry c iu iz e n n as fu n d s in the form o f c u rre n c y or bank
| d e p o s its w h ich can oe e n lis t e d in th e w ar e f f o r t in one way o r a n o th e r
th ro u g h th e p u rc h a se o f Governm ent s e c u r it ie s *

-

2

-

iiie s p e c ia l o f f e r in g s to be s o ld u n d er th e d ir e c t io n o f the
V ic t o r y Fund Com m ittees w i l l c o n s is t o f:
1*

^ ’e n t y - s ix y e a r 2 1 /2 p e r ce n t bonds due December 1 5 , I 96B,
c a lla b le December 1 5 , 196.3, to be is s u e d in coupon o r
r e g is t e r e d f o r a a t th e o p tio n o f th e b u yers»

C om m erical

b a n k s, w h ich a re d e fin e d f o r t h is p u rp o se a s banks a c c e p t­
in g demand d e p o s it s , w i l l n o t be p e rm itte d to h o ld th e se
bonds u n t i l te n y e a rs a f t e r th e date o f is s u e .
°e ^

T h e re w i l l

l im i t to tn e amount o f t h is is s u e , and no r e s t r ic t io n s

upon is s u a n c e e x c e p tin g th e tem p o rary e x c lu s io n o f
com m ercial banks fro m o w n e rsh ip f o r t h e ir own a c c o u n t.
S u b s c rip t io n books w i l l be opened November 3 G, and v r i.ll
rem ain open s e v e ra l w eeks.

The bonds w i l l be s o ld in

d e n o m in atio n s from §500 to § 100 , 000 .
2.

Two s e r ie s in te n d e d f o r banks as w e ll a s o th e r
in v e s t o r s :

( a ) 1 3 / 4 p e r ce n t bonds due June 1 5 , 1943 ,

and (b ) 7 / 3 p e r ce n t c e r t if ic a t e s o f in d e b te d n e ss due
one y e a r a f t e r is s u a n c e .

These s e c u r it ie s w i l l be open

f o r s u b s c r ip t io n by b a n ks, and a ls o by a l l o th e r c la s s e s
o f in v e s t o r s , w hether p r iv a t e , c o rp o ra te o r in s t it u t io n a l.
o a le s to com m ercial banks w i l l be lim it e d to § 2 , 000 , 000,000
o r th e re a b o u ts o f ea ch s e r ie s .

A p p lic a t io n s from com m ercial

banks in amounts up to § 10 0,000 w i l l be a llo t t e d in f u ll- ,
and la r g e r s u b s c r ip t io n s on an e q u a l p e rce n ta g e b a s is .

- 3 All applications from others than commercial banks
will be allotted in full# The total of these securities
to be issued thus will be the $4,000,000,000 from com­
mercial banks, plus the full amount subscribed by others#

For a ll classes of subscribers other than commercial
banks, subscription books w ill be opened November 30 for
both series,., and w ill remain open for several weeks# For
commercial banks subscription book3 w ill be opened
November

30

on the 1 3/4 per cent bonds and w ill remain

open u n til the close of business December 2, while books
w ill be opened December 16 on .-the 7/8 per cent ce rtifica te s
and w ill remain open u n til the close of business December

18#

In the case of such bank subscriptions, payment for the
bonds must be made on December
on December

11,

and for the ce rtifica te s

28#

The 1 3/4 per cent bonds w ill be issued in coupon or
registered forms, at the option of the buyers# The
7/8 per cent c e rtifica te s 'tri l l be issued in coupon form
only.

The bonds w ill be. sold in denominations from

$500 to $100,000, and the ce rtifica te s from $1,000 to
$ 100, 000#

The 2

1/2 per

cent bonds, 1 j / h per cent bonds and 7/& per cent

certificates of indebtedness will be dated December X, 19*4-2 and will
bear interest from that date.

Accrued interest will be charged on all

subscriptions for which payment at a Federal Reserve Bank or at an
authorized depositary is received later than December 1.
Any bank or trust company qualified to hold War Doan deposits will
be permitted to make payment by credit for securities subscribed for.its
own account or that of its customers up to any amount for which it shall
be qualified in excess of existing deposits.
All elements of the banking and securities business will conduct a
vigorous campaign to assure the widest possible public purchases of all
issues of these securities.

In conjunction with weekly sales of discount

bills, these arrangements will make approximately half the $9#000,000,000
of Treasury borrowing in December available from non-banking investors,
while the other half will be made available by commercial banks.

The

widest possible public participation is essential in the interest of
sound financing out of current income and savings.
After completion of this borro\*ing the Treasury does not expect to
do further major financing until February.

For its new money needs in

January the Treasury will rely unon further sales of Tax Savings Rotes,
Savings Bonds, and Treasury bills.

00O00

INSOLVENT NATIONAL BANKS LIQUIDATED AND FINALLY CLOSED
_________
DURING THE MONTH OF OCTOBER. 1942________

Name and Location of Bank

Date of
Failure

Total
Disbursements
to Creditors
Including
Offsets Allowed

District National Bank
Washington, D* C* 1/

11-6-33

$ 7,419,931

First & Tri-State Nat’l
Bank & Trust Co*
Fort Wayne, Ind* ¿ J

6-22-34

1,209,388

First National Bank
Logansport, Ind.

11-11-31

5,023,433

First National Bank
Canonsburg, Penna. 1/

12-19-33

2,416,071

First National Bank
Webster Springs, W.Va* 1/

4-9-34

435,43.6

Percent
Dividends
Declared
to all
Claimants

102.88 2/2/

Capital
Stock at
Date of
Failure

$ 1,000,000

Cash, Assets,
Uncollected Stock
Assessments, etc*
Returned to
Shareholders

$

-0-

2,250,000

-o-

101.18 2/2/

250,000

-0-

109.73 2/2/

200,000

«0-

94.05 2/

25,000

«0-

64,0397

1/ Formerly in conservatorship*
2/ Including dividends paid thru or by purchasing bank*
2/ 100 percent principal and partial interest paid to creditors.
v
Receiver appointed to levy and collect stock assessment covering deficiency in value of
assets sold, or to complete unfinished liquidation*

221

«

fa * *

"5 *
.

n ...m

153*

§

**

-a

€

C Z

i

i n ................ .............................

IB

| ;^ b
—

XKSQLvianr

ratioiial b a m k s l i q u i d a t e d a b b t o n a l l y c l o s e d

__________ dobing tm mum, op ociobeb* 1942______

name and Location of ...Bank

Data of
Failure

Total
Dlsbursaaents
to Creditors
including
Offsets / H osed

District national Bank
Washington* D* C*
j/

11-6-33

*

First & Tri-State Sat*l
Bank St Trust Co»
Fort Wayne* IndU $J

6-22-34

1,209,388

First national Bank
logansport* M *

1101-31

5,023,433

First national Bank
Canunsburg* Faraia» j/

12-19-33

2*4X6*071

First national Bank
Webster Springs* W»Wa* j/

7,419,931

435,416

4-9-34

Percent
Dividends
Declared
to all

Capital
Stock at
Date of

r.lx i manta

102.88 2/2/

$ 1,000,000

Cash* Assets*
Uncollected Stock
Assessments, etc*,
Returned to
Shareholders

$

-0-

2*250*000

mQmm

101.18 2/5/

250,000

—0 —

209.79 3/2/

200*000

64.0997

94.05 2 /

25*000

-0-

nhwaopiy in c c ^ o n & to n ld o t
Including dividends paid thru or fcgr purchasing bank.
100 percent jwincipal andipartial interest paid to creditors*
M a r appointed to levy and collect stock assessmat cohering deficiency In value of
assets sold, or to cospl^te unfinished liquidation»

Bane .

KH

■■■

m

&__

m um m

Comptroller of the Currency
Washington

fop ksuuurs, m m t M Q

MMMMm

press s m n o t

During the »©nth of October, 1942» the liquidation
of five insolvent national banks was completed end the affairs
of such receiverships finally closed*
Total disbursements, Including offsets allowed, to
depositors and other creditors of these five receiverships,
amounted to 116,504,239» while dividends raid to unsecured
creditors amounted to an average of 97*24 percent of their oleine*
Total costs of liquidation of these receiverships averaged 6.41
percent of total collections fro» all sources, including offsets
allowed*
Dividend distributions to all creditors of all active
receiverships during the south of October, amounted to 11,760,069*
Data as to results of liquidation of the receiverships finally
closed during the »©nth are ae follows«

/

TREASURY DEPARTMENT
Comptroller of the Currency

Washington

PRESS SERVICE

FOR RELEASE, MORNING NEWSPAPERS,
lo t

%»*■

I

J

à

During the month of October, 1942, the liquidation
of five insolvent national banks was completed and the affairs
of such receiverships finally closed*
Total disbursements, including offsets allowed, to
depositors and other creditors of these five receiverships,
amounted to $16,504,239, while dividends paid to unsecured
creditors amounted to an average of 97*24 percent of their claims*
Total costs of liquidation of these receiverships averaged 6*41
percent of total collections from all sources, including offsets
allowed*
Dividend distributions to all creditors of all active
receiverships during the month of October, amounted to $1,'760,069*
Data as to results of liquidation of the receiverships finally
closed during the month are as follows:

TREASURY DEPARTMENT
Comptroller of the Currency
Washington
FOR RELEASE, MORNING NEWSPAPERS,
Saturday, November 21, 1942._ _ _
TT^üÎ4lT

Press Service
No. 34-23

~

During the month of October, 194^, the•liquidation
of five insolvent national banks was completed and the
affairs of such receiverships finally closed.
Total disbursements, including offsets allowed, to
depositors and other creditors of these five receiverr
ships, amounted to $16,504,239, while dividends paid to
unsecured creditors amounted to an average of 97.24 per­
cent of their claims.

Total costs oi liquidation o.*

these receiverships averaged 6.41 percent of total col­
lections from all sources, including offsets allowed.
Dividend distributions to all creditors of all
active receiverships during the month of October,
amounted to $1,760,069.

Data as to results of 'liquida­

tion of the receiverships finally closed during the
• month are as follows:

INSOLVENT NATIONAL BANKS LIQUIDATED AND FINALLY CLOSED
DURB iG- THE MONTH OP OCTOBER, 19^2

Name and Location of Bank

Date of
Failure

Total
^Percent
Disbursements
Dividends
to Creditors
Declared
Including
to all
Offsets Allowed
Claimants

District National Bank
Washington, D. G. l/

11- 6 -3 3

#

First & Tri-State Hat*!
Bank & Trust Co.
Port Wayne, Ind. } j j

7,9i9,93l

6-22-3^

1,209,388

First Nat ional Bazik
Logansport, Ind.

n - 11-31

5.023.933

First National Bank
Canon sburg, Penna. 1/

12-19-33

2,9-16,071

Pirst National Bank
Webster Springs, W.Va. 1/

l/

2/
1/

9-9-39

935.916

102.88 2/3/

6^.0397

Capital
Stock at
Date of
Failure

$ 1,000,000

Cash, Assets,
Uncollected Stock
Assessments, etc.
Returned to
Shareholders

$

-0~

2,250,000

—0—

101.18 2/2/

250,000

-0-

109.73 2/2/

200,000

-0-

25,000

-0-

99.05 2/

Fonnerly in conservatorship.
Including dividends paid thru or by purchasing hank.
100 percent principal and partial interest paid to creditors.
Receiver appointed to levy and collect stock assessment covering deficiency in value of
assets sold* or to complete unfinished liquidation.

-Tte ASo^ÄisWtcrMcyr
'Bu ^ éu

' * * * * * 'f* ' * ' * '
\ b jM H lH êT & 4

FOR IiaJEDIiiTE RELEASE .
November

VU
m

§ '

S

?
The Commissioner of Internal Revenue Guy T. Helvering announced
today the following changes in the territorial jurisdictions of the
Hew York and Philadelphia offices of the Salary Stabilization Unit of
the Bureau of Internal Revenue:
The Fifth Collection District of New Jersey, embracing the
counties of Bergen, Essex, Hudson, Hunterdon, Middlesex, Morris,
Passaic, Somerset, Sussex, Union and Warren, is now attached to
the New York territory, and employers in these counties should
address their communications to Mr. Chas. A. Drake, Head, Salary
Stabilization Unit, 253 Broadway, New York. Allmatters from these
counties now pending before the Philadelphia office will be trans­
ferred to the New York office. That office will rule, for and on
behalf of the Commissioner of Internal Revenue, on all requests and
applications for salary increases and decreases coming wi thin the
jurisdiction of the Commissioner as defined in the regulations of
the Economise Stabilization Director and approved by the President
on October 27, 1942.
The jurisdiction of the Commissioner covers all salaries over
$5,000 per year, and salary payments of less than $5,000 per year in
the case of executive, administrative or professional employees not
represented by labor organizations.
Under the present arrangement employers in the State of New
York and the fifth collection district of New Jersey, embracing the
counties mentioned above, will address their requests for rulings to
"Head, Salary Stabilization Unit, 253 Broadway, New York City , and
will obtain rulings from that office as to proposed salary adjustments. Whenever necessary, employers may confer with the members of
the New York office regarding proposed adjustments. Procedure will
be provided to permit appeals to the Commissioner of Internal Revenue
in Washington in case of adverse rulings by the New York office.
Although rulings of the New York office are subject to modifica­
tion or reversal of the Commissioner of Internal Revenue in ^Washington,
employers obtaining favorable rulings from the New York cf fioe can in
each instance rely on such rulings. No modification or reversal by
the Commissioner of the ruling made by the New York cf fice will be
given retroactive effect.

TREASURY DEPARTMENT
Bureau of Internal Revenue
Washington

FOR IMMEDIATE RELEASE,

Press Service
Ho* 34-24

Saturday, November 21, 1942«
11/20/42

The Commissioner of Internal Revenue Guy T. Helvering an­
nounced today the following changes in the territorial juris­
dictions of the Hew York and Philadelphia offices of the Salary
Stabilization Unit of the Bureau of Internal Revenue:
The Fifth Collection District of Hew Jersey* embracing the
counties of Bergen, Essex, Hudson, Hunterdon, Middlesex, Morris,
Passaic, Somerset, Sussex, Union and Warren, is now attached to
the Hew York territory, and employers in these counties should
address their communications to Mr. Charles A. Drake, Head,
Salary Stabilization Unit, 253 Broadway, Hew York. All matters
from these counties now pending before the Philadelphia office
will be transferred to the Hew York office. That office will
rule, for and on behalf of the Commissioner of Internal Revenue,
on all requests and applications for salary increases and de­
creases coming within, the jurisdiction of the Commissioner as
defined in the regulations of the Economic Stabilization Di­
rector and approved by the President on October 27, 1942.
The jurisdiction of the Commissioner covers all salaries
over $5,000 per year, and salary payments of less than $5,000
per y e a r i n the case of executive, adminis trative or professional employees not represented by labor organizations.
Under the present arrangement employers in the State of Hew
York and the fifth collection district of Hew Jersey, embracing
the counties mentioned above, will address their requests for
rulings to ,!Head, Salary Stabilization Unit, 253 Broadway, Hew ;
York City”, and will obtain rulings from that office as to pro­
posed salary adjustments. Whenever necessary, employers may
conier with the members of- the Hew York office regarding pro­
posed adjustments. Procedure will be provided to permit appeals
to the Commissioner of Internal Revenue in Washington in case of
adverse rulings by the Hew York office.
Although rulings of the Hew York office are subject to mod­
ification or reversal of the Commissioner of Internal Revenue in
Washington, employers obtaining favorable rulings from the Hew
York office can in each instance rely on such rulings. Ho mod­
ification or reversal by the Commissioner of the ruling made by
the Hew York office will be-given retroactive effect.
-oOo-

- r ^ £ ^ £ P A ( T T H £ M r
e>^ 1>nT<v ^ \ i£«V£*ui.

§f '

V JA -l (v-rnSTO M
H-e« J erv'we

EOR IMJEDIATE RELEASE

ni

Wednesday, November 25th.

5>/._7 i—

^

^

Gbmmi ssi on©r of Internal Revenue Guy T. Helvering
announced today the opening of the Boston office of the new
Salary Stabilization Unit of the Bureau of Internal Revenue.
The Unit will be located on the third floor of One State Street,
Boston, Massachusetts.

The office will be in charge of Frank L.

Daylor, who has a record of more than twenty years of responsible
work in the Internal Revenue Service.
The territorial jurisdiction of the Boston office will
cover the States of Maine, New Hampshire, Vermont, Massachusetts,
Connecticut, and Rhode Island. That office will rule, for and
on behalf of the Commissioner of Internal Revenue, on all requests
and applications for salary increases and decreases coming within
the jurisdiction of the Commissioner as defined in the regulations
of the Economic Stabilization Director and approved by the President
on October 27, 1942.
The jurisdiction of the Commissioner covers aULsalaries
over $5,000 per year, and salary payments of less than $5,000
per year in the case of executive, administrative or professional
employees not represented by labor organizations.
Under the present arrangement employers in the States of
Maine, New Hampshire, Vermont, Massachusetts, Connecticut and
Rhode Island will address their requests for rulings to "Head,
Salary Stabilization Unit, Third Floor, One State Street, Boston,
Massachusetts", and will obtain rulings from that office as to
proposed salary adjustments. Whenever necessary, employers may
confer with the members of the B o s t o n office regarding proposed
adjustments. Procedure will be provided to permit appeals to the
Commissioner of Internal Revenue in Washington in case of adverse rulings
by the Boston office.
Although rulings of the Boston office are subject to modifica­
tion or reversal of the Commissioner of Internal Revenue in Washington,
employers obtaining favorable rulings from the Boston office can in
each instance rely on such rulings. No modification or reversal by
the Commissioner of the ruling made by the Boston office will be
given retroactive effect.

TREASURY DEPARTMENT
Bureau of Internal Revenue
Washington

f

POR IMMEDIATE RELEASE,
Y/ednesday, November 25 , 1942,
u/ao/42
1
‘
1

Press Service
Ho. 34-25

E

Street, ||

Commissioner of Internal Revenue Guy T, Helvering announced
today the opening of the Boston office of the new Salary Stab­
ilisation Unit of the Bureau of Internal Revenue*

The Unit will

be located on the third floor of One State Street, Boston,
Massachusetts,

iceill ;
aohusetts, r
forasi
ill re#;:

îingïiis:
rsgètl^

1 salari« j

ifc#
3fOfflS8̮l[

The office will be in charge of Prank D, Daylor,

who has a record of more than twenty years of responsible work
in the Internal Revenue Service,
The territorial jurisdiction of the Boston office will cover
the States of Maine, New Hampshire, Vermont, Massachusetts,
Connecticut, and Rhode Island, That office will rule, for and
on behalf of the Commissioner of Internal Revenue, on all re­
quests and applications for salary increases and decreases com­
ing within the jurisdiction of the Commissioner as defined in
the regulations of the Economic Stabilization Director and ap­
proved by the President on October 27, 1942*

^yisdietton of the Commissioner covers all salaries
over $5,000 per year, and salary payments of less than $5,000
icutfl I per year in the case of executive, administrative or professional
employees not represented by labor organizations,
•eet,

MceastoJ
^ Under the present arrangement employers in the States of
oloye^i Maine, New Hampshire, Vermont, Massachusetts, Connecticut and
ding#! ™ 5 >de Island will address' their requests for rulings to "Head,
ppeahJ Salary Stabilization Unit, Third Floor, One State Street, Boston,
5eofMas sa ch use tt s , and will obtain rulings from that office as to
I proposed salary adjustments. Whenever necessary, employers may
R confer with the members of the Boston office regarding proposed
!ubj«ott0,l ^d3Ustments. Procedure will be provided to permit appeals to the
Commissioner of Internal Revenue in Washington in case of adverse
offi°e r u l l n Ss
thG Boston office,
3D!reter«'l

J,.,.fill« .
Although, rulings of the Boston office are subject to modi^^gpabi.on or reversal of the -Commissioner of Internal Revenue in
I Washington, employers obtaining favorable rulings from the
I Boston office can in each instance rely on such rulings. No modIification or reversal by the Commissioner of the ruling made by
Ithe Boston office will be given retroactive effect.
-oOo

TREASURY DEPARTHSKT
Washington
Pres® Service
FOB RELEASE, MORNING i^SPAPERS
Tuesday« November 21^. 1942.

3i - U

s p |
II p It i§!

the Secretary of the Treasury announced last evening that the tenders for
fiie: Sec.

1500,000,^00, or thereabouts, of 91-day Treasury bills to be dated Hovember 25, 1942,
and to nature February 24, 1943, which were offered on Kovenber 20, -»re opened at the

1 n
I

b il

Federal Reserve Banks on November 23*
1 8 sbij

p ers

bo be

were of

The details of this issue are as follows:

!
Total applied for - $1,149*026,000
Total accepted
**
501,722,000

p e .a sta

Range of accepted bids:
High
Low
Average price

(55 percent of

- 99.925 Equivalent rate of discount approx. 0»297% per annua
qg

onA

- 99e907

Bes |e Banks

s

e

*

**

*

n

n

m

*

*»

0.372$
0.370$

lotal sp;
| l | | ac(

Kid11ku V i

tgh -3
the anount bid for at the low price wae accepted.)

Em

r

1 ||e - 3

III

ento f

TIIEASÜHY P E ^ T M E N T
W a s h in g t o n
FOR R E L E A S E , ■ M ORIUIIG NEW SPAPERS
■T u e s d a y , .N o v e m b e r 2 4 , 1 9 4 2
1T h e S e c r e t a r y
th e t e n d e r s

o f th e T re a s u ry

f o r § 3 0 0 ,0 0 0 ,0 0 0 ,

R e s e rv e

la s t

1942,

on N o vem ber 2 0 ,

e v e n in g

th a t ,

o f 9 1 -d a y T re a s u ry

a nd to mature- F e b r u a r y 2 4 ,

•
1,943

w e re o p e n e d a t t h e F e d e r a l

B a n k s on N o v e m b e r 2 3 «

The d e t a ils
È L,

an no un ced

o r th e re a b o u ts,

bills to be d a t e d N o v e m b e r 2 6 ,

w h ic h w e re o f f e r e d

P r e s s ' S e r v ic e
i Ho* 3 4 -2 6

o f t h is

is s u e

a re

as

f o ll o w s :

T o t a l a p p lie d f o r - § 1 , 1 4 9 , 0 2 6 , 0 0 0
T o t a l a c c e p te d
5 0 1 ,7 2 2 ,0 0 0
Range

o f a c c e p te d

H ig h

-

Row

-

A v e ra g e
p r ic e

-

(5 5 p e r c e n t

b id s :

9 9 * 9 2 5 E q u iv a le n t r a t e o f d is c o u n t a p p r o x , 0 , 2 9 1 % p e r
annum
9 9 .9 0 6 E q u iv a le n t r a t e o f d is c o u n t a p p r o x . 0 . 3 7 2 $ p e r
annum
9 9 .9 0 7 E q u iv a le n t r a t e _o f d is c o u n t a p p r o x . 0 .3 7 0 $ p e r
annum
o f th e

a m o u n t b id

f o r a t th e

- o OQ"

lo w p r ic e . w a s

a c c e p t e d ,)

m

An a d d re ss by JSandolph E* Paul* G e n e ra l C o un sel o f the
T re a su ry D epartm ent, b e fo re the In s t it u t e on F é d é ra l
T a x a tio n a t th e New Y o rk U n iv e r s it y , December 1 , 1942*
,
‘r V *
The E f f e c t o f th e Tiïiar ,on Tax A d m in is tra tio n
I
have been doing a lot of talking in the last few weeks about
a shortage that- is presenting one of the most pressing problems of today*
lhat shortage is one of goods and servisses and it is paradoxically
coupléd with an abundance of money# This combination creates the problem
of inflation which I do not intend to discuss today* I intend rather to
discuss a totally different problem* It is not a problem arising out of
war shortages — rather th'e contrary* There is no danger of any shortage
in tax administration problems* Indeed, the Treasury Department, partic­
ularly the Bureau of Internal fîevenue, is about to harvest a bumper crop
of problems directly attributable to the war* I make few predictions on
platforms, but I feel safe in making the prediction that this crop of
problems will continue while the war lasts* May I add to-my prophecy
that each of you personally will become increasingly aware of each of
these problems as you try in your tax practice to deal with the burdens
I shall discuss here today*
Problem s o f ta x a d m in is tra tio n do n o t c o n v e n ie n tly a rra n g e th em se lve s
in n e a t sq u a re s o f b la c k and w h ite , and i t i s d i f f i c u l t to make c l a s s i f i ­
c a tio n s th a t w i l l w h o lly c l a r i f y su ch a su b je c t* H ow ever, some arrangem ent
i s n e c e s s a ry i f we a re to cope w ith th e su b je c t* I , t h e r e fo re , su g g e st
a two f o ld c la s s if ic a t io n o f w ar a d m in is t r a t iv e problem s* The f i r s t typ e
o f problem I have in m ind may be ro u g h ly c la s s if ie d as a f ie l d pro blem *
You are all, of course, aware of the fact that for several years the Bureau
has been decentralized* It has 43 field offices throughout the United
States* The first type of problem arises in and must be dealt with by these
field offices* In contrast, the second type of problem may be roughly
described as a home office problem* It arises at Washington, and it has to
do with basic matters of interpretation and policy, as distinguished from
the more ministerial or executive type of problem which arises in the field*
L e t me be more e x a c t now in d e s c rib in g th e se two ty p e s o f problem s as
fo llo w s *
1
1* The problem which the field offices face is a problem of the paper
work and the physical labor involved in handling
andreviewing tax returns
and in dealing face to face with the taxpayers*
2.
The seco n d p ro b lem , o r th e problem o f the W ash in g ton o f f ic e , i s one
o f d e te rm in in g th e p ro p e r manner in w h ich the p r o v is io n s o f ta x s t a t u t e s s h a ll
be in t e r p r e t e d and th en a p p lie d b y the f i e l d o ffic e s *

= =
fe :

'v

E f fe c t s o f the w ar on t h e f ie l d o f f ic e s o f th e
v
B ureau o f In t e r n a l Revenue .

W ith t h is ro ugh d iv is io n between the problem s o f the f ie l d o f fic e s ,a n d
th e home o f f ic e in m ind l e t us tu rn f i r s t to s p e c if ic in s ta n c e s o f th e w ar*s ■
e f f e c t on th e a d m in is t r a t iv e fu n c t io n in g o f th e f i e l d o ffic e s *
In c re a s e d number o f ta x re t u rn s
You a re a l l f a m ilia r w ith the f a c t th a t in th e Be venue A ct o f 194.2 we
lo w ered the p e rs o n a l exem ption from §{>1500 f o r a m a rrie d p e rso n w ith o u t
dependents and $750 f o r , a s in g le p e rso n to $1200 and $ 50 0 , re s p e c t iv e ly *
V«e a ls o re d u ce d th e dependency c re d it -fro m $400 to $350* T h is re d u c tio n
in exem ptions and dependency c r e d it h a s t r u ly co n v e rte d the n e t incom e ta x
| in t 0 a
incom e tax* The v ic t o r y ta x adds the f in a l touch* I t s exem ption
f ig u r e i s $624 w ith o u t re fe re n c e to th e m a r it a l and dependency s t a t u s o f the
ta x p a y e r; th e se ite m s a re ta ken c a re o f u n d er t h is ta x by means o f the p o s t
; ¡ w ar c re d it*
|
The re d u c tio n o f the p e rs o n a l exem ptions and the dependency c f e d it , and
the im p o s itio n o f the V ic t o ry t a x , com bine from th e s ta n d p o in t o f a d m in i­
s t r a t io n to produce problem s th a t w ould be re g a rd e d in o rd in a ry days as
in s u p e ra b le * The re d u c tio n o f th e c r e d it f o r dependents a lo n e adds n e a r ly
50 0 ,0 0 0 new ta xp a ye rs* In 19 4 0 , ab o u t 4 m illio n ta x p a y e rs p a id ta x on t h e ir
1939 income* In 1943 th e re w i l l be c lo s e to 46 m illio n ta x p a y e rs , in c lu d in g
th o se s u b je c t to the V ic t o ry t a x , o f w h ich number 27 m illio n w i l l be p a y in g
the ta x on n e t incom e* R e g a rd in g o n ly n e t incom e ta x p a y e rs we can se e th a t
t h e ir num bers have in c re a s e d from 4 m illio n to 27 m illio n , o r n e a r ly seve n
f o ld , o v e r a th re e —y e a r period# ; I am s u re I do n o t need to la b o r th e p o in t
th a t t h is m u lt ip lic a t io n o f ta x p a y e rs , to g e th e r w ith a d d it io n a l non—ta x a b le
re tu rn s * means f o r the reven u e a g e n ts and t h e ir s t a f f s a tre m e n d o u sly .
I in c re a s e d a d m in is t r a t iv e burden* The mere p h y s ic a l d u ty o f h a n d lin g su ch
a la rg e number o f re t u rn s i s a lm o st beyond d e s c rip tio n #
B ut the jo b moves
on in t o a d u ty o f a u d it in g th e re t u r n s and th e n e c e s s it y o f d is c u s s in g the
c o n te n ts o f th o usan ds o f re t u rn s w ith ta xp a y e rs* I t moves on s t i l l f u r t h e r
in t o in t e n s iv e ch e c k in g and s tu d y o f more co m p lica te d re tu rn s *
Then th e re
: a r is e s th e problem o f a d m in is t r a t iv e c o n s id e ra tio n o f th o usands o f r e t u r n s ,
in c lu d in g re q u e s ts f o r f u r t h e r in fo rm a tio n and c o n fe re n c e s w ith the taxp aye r*
; F in a lly , u n so lv e d problem s w i l l have to be ta ken to th e Tax C o u rt and the
J u d ic ia l C o u rts f o r a d ju d ic a tio n *
The 1942 A c t has c e r t a in ly n o t d rie d up
ta x p ra c tic e #

;
:
I
i'

D e lin q u e n c ie s
1 \ .
:•
"
■
' 7
''
^
I t i s n a t u r a l to p ro cee d from the e f f e c t on th e f ie ld o f f ic e s o f an
in c re a s e d number o f re t u rn s to, the m u ch \,d iscu sso d problem o f p o s s ib le d e lin —
q u e n c ie s , One h e a rs a g re a t d e a l o f s p e c u la t io n on t h is su b je c t* I use th e
w ord ‘’ s p e c u la t io n 0 a d v is e d ly , f o r , on no s u b je c t i s th e re , su ch w id e sp re a d ‘
m is in fo rm a tio n .
y

v

~ 3 -

One may, of course, take it for granted as a mere mathematical
corollary of «¿1 increasing number of returns that there will be some
increase in the number.of delinquencies. The problem is not one of
straight arithmetic. It is a problem of proportion. There is no
definite indication that delinquencies in the year 19^3 will be out of
proportion to the increasing number of new taxpayers. I say this with
full realization of the fact that we have not only an increased number
of taxpayers; but also substantially increased taxes f o t old taxpayers.
It would; however, be the act of an ostrich to ignore the
possibility of a grave delinquency problem in 19^3r ^bis was recog­
nized early in 19^2 when the Treasury first presented its recommenda­
tions for revenue legislation to the Congress* On March 3* 19^2, the
Secretary recommended the institution of a system Of collection of the
tax at the sodrce. On several later occasions i strenuously urged
upon Congressional committees the advisability of adopting a system of
collection at the source. I pointed out that it would have an antiinflatiohafy effect, and that it would be a convenience to taxpayers*
But I did not neglect to point out that it would cut tax delinquency.
In September, the Treasury made a further recommendation to the
Senate Finance Committee for a reduction of I9U2 tax liability, coupled
with the institution of collection at the source at a high rate for
19^3* Our collection at the source recommendation was first adopted
by the Ways and Means Committee and the Senate Finance Committee, but
in the final Act this method of collection was adopted only for the
Victory tax*
The Treasury is still vitally interested in placing taxpayers, in­
sofar as possible, on a current basis. Ho doubt collection at the source
introduces many administrative problems. It is, however, our firm con­
viction that these problems are less serious than the administrative
problems which will result from a failure to 'adopt the system* You may
imagine^the time and energy that will have -to be Consumed by representa­
tives of the Bureau of Internal Revenue in their attempts to grapple
with the problem of tax payment delinquencies even if they do not reach
undue proportion. At the very best there will have to be thousands of
conferences and special arrangements for taxpayers who have not budgeted
their 19^2 tax payments and who for one reason or another are not able
to make payment when it is due*
Loopholes
&. 1 -I
r
.
Bj
|
/•
Another fact with which you are all sadly familiar is that the
Revenue Act of I9L2 measurably increases tax rates both for individuals
and corporations* This single fact of increased rates is another off­
spring of the war which multiplies the administrative problems of the

field offices. We have reached the point where the deduction provisions
are a matter of great importance even to low income taxpayers. Everyone
feels impelled to take advantage of whatever loopholes the law may
afford. With twenty-six general deductions set forth in Section 23 of
the Code there are literally several hundred items which may he de­
ducted in computing net income. When an individual taxpayer with a
net income of only $19,000 will find that each $100 of deduction will
he Worth $52.00 of tax benefit, it is obviously going to be necessary,
in auditing 19^2 returns, to take into account the natural human im­
pulse to take full advantage of what the law permits. The Bureau of
Internal Revenue has, therefore, a vastly increased problem of
scrutinizing individual items in the taxpayer’s return with a view
particularly to determining whether deductions taken are properly
allowable.
This problem can be approached from another angle. Deficiency
assessments for the first four months for' the fiscal year beginning
July 1, 19h2, were considerably larger than deficiency assessments for
the corresponding four months of the previous fiscal year. Prom July
through October, 19hl, deficiencies were assessed in the amount of
$6h-l/2 million. Por the corresponding period in the fiscal year 19^2
deficiencies of $93 million were assessed. This represents an increase
of over Uo percent, traceable directly to the taking of an unwarranted
amount of deductions. The burden upon those having the duty of ad­
ministering the tax law is thus perfectly evident.
Retroactive legislation
The Revenue Act of 19^2 probably set a record for retroactive relief
The statute is full of provisions correcting injustices inadvertently
done by previous revenue acts. Examples of such provisions arej the
treatment provided for the recovery of bad debts and prior taxes, the
deduction permitted for non—trade or non-business expenses incurred in
the production of income, the Enright case amendment relating to the
handling of the income of a decedent, the extension of deduction
privileges in connection with the amortization of emergency facilities,
and the relief provided under the excess profits tax in the case of
abnormalties in income in the taxable year,
While it is not retroactive, I cannot refrain, in speaking of the
corrections of injustices, from mentioning Section 120 of the Revenue
Act. If I need further identify this section it is the Section which
excludes alimony from the gross income of the husband and taxes it t#
the divorced or legally separated wife.

Most of the above provisions were suggested to Congressional
committees jointly by the staff of the Joint Committee on Internal

$ -

Revenue Taxation. and the Treasury. J am in full sympathy with the
policy of giving retroactive relief 1* cases in which experience has
demonstrated injustices and unwarranted discriminations in previously
enacted revenue measures* But it should not he forgotten that the ex­
tension of retroactive relief brings a host of administrative problems
centering around the necessity of adjusting thousands of previously
filed returns. There are in the 19^2 Revenue Act, 53 retroactive pro­
visions which require adjustments in returns already filed*
The Bureau of Internal Revenue determined at an early date that it
would be better to hold such I9UI returns as might be affected by retro­
active legislation, rather than to process the returns and then be com­
pelled to reopen them to make adjustments required by new legislation.
A pamphlet was therefore issued to revenue agents describing in detail
points of possible retroactive legislation and instructing the agents
to hold the returns which might be placed in question by such legis
lation. As a result local revenue agents are now carrying an extra
burden of handling 19^1 returns which in other years would have been
disposed of some time ago. The magnitude of this burden may be judged
from the fact that some 65.00Q re*u*U$ ftT X9*43. alone have been delayed
because of just one of the 5 | it^s of retroactive legislation I have
mentioned. (The Higgins amendment.)
importance to the Government
as well as the taxpayer of this procedure i* illustrated by one instance
which occurred here in Hew York»
this case the Bureau policy re­
sulted in detecting that certain Changes in the law produced a de­
ficiency of $100,000 on the part of a personal holding company which
otherwise might have been missed entirely.
I should add the one thought that the retroactive relief provisions
of the 19U2 Act in many Instance* go to years prior to 19 ^1 . The full
effect of the retroactive legislation contained « the 19^2 Act wUl
only he realized when re-examination is made of returns for several past
years*

Suspension of statute of limitations
The 19^2 Act contains still other provisions which will increase
the work of the field offices* I am referring at this point to the
se.tion suspending the time limitations running against the Government
and taxpayers where the war malces impossible the timely Performance 0
reouired acts, for example, where a taxpayer is outside the^Jnited
States and because of the interruption of transportation and comunications cannot file a petition with the United States Tax
^
determination of a deficiency. The increased administrative burten
cast upon the Bureau by these very necessary provisions can be easily
imagined*

9

- 6 -

There will he a vast problem of keeping adequate and complete records
a© to the many postponements which are granted ©o that the Government can
he prepared to assert its rights when the statute of limitations is no
longer suspended. The saane problem exists in connection with the pro­
vision of the Soldiers and Sailors Oivil Relief Act, allowing a postpone­
ment of tax payments for members of the armed forces whose ability to
pay is affected by the fact of military service. In this connection
there is an additional burden of determining that military service has
affected the individual1» ability to pay. As the armed forces continue
toward the nine million mark, there will be a correspondingly increased
burden upon local revenue agents* Moreover, as this accumulation grows,
so will grow the post war administrative problem of collecting the sus­
pended taxes.
Effects of the War on the Washington Office
of the Bureau of Internal Revenue
X have given you a number of examples of increased administrative
burdens principally in the field offices of the Bureau of Internal Revenue.
We come now to the increased administrative tjob of the Bureau at
Washington. This problem is divisible into two parts* (l) The new
fact situations arising in connection with old provisions of the statute
and (2) the interpretation and application of new provisions in the
statute. In the first case, we have the ,}ob of putting new wine in old
bottles. In the second case, the problem is one of translating the
labels on new bottles.

Advertising
You are all familiar with section 23 (a)(1)(A) of the Internal
Revenue Code, providing for the deduction from gross income of ordinary
and necessary expenses paid or incurred in carrying on a trade or
business. And you have been accustomed to deducting advertising ex­
penses under this provision. With the intervention of war production
it is no longer necessary to advertise in order to sell one*s product.
Can it be said that it is an ordinary and necessary expense to adver­
tise in order to keep a potential post-war market? Should advertising,
which advocates war bond and stamp purchases, be regarded as goodwill
promotion and an expense or as a deductible gift? These were questions
which the Bureau could not postpone until the 19^2 returns were filed.
The manufacturer, the retailer, the advertising agency, the newspapers
and the magazines, all waited upon some official orientation before
proceeding. For their assistance they were provided with a press re­
lease by Commissioner Helvering officially outlining the Bureau*s
position on this difficult point.

~ 7Depreciation

A somewhat different aspect of the problem of applying pre-war
provisions to war situations which is presented to the Bureau is illus­
trated by the question of depreciation allowances. With machines
running and factories operating 2k hours a day many, many taxpayers
have, in making their returns* charged off greatly increased amounts
for depreciation* You will remember that last January the Bureau
issued a bulletin indicating its contemporary practice and the trend
of official opinion in the administration of.the provisions with re­
gard to depreciation. At that time recognition was taken of the fact
that increased schedules of production might appreciably affect the use­
ful life of some depreciable property. However, since with the increased
use of machinery there is a commensurate increase in repairs, and inas­
much as the greater factor in the diminishing value of tools and machinery
is not wear and tear but obsolescense» the amount of depreciation which
taxpayers have sought to charge off has shown a decided tendency to
exceed what the Bureau believes to be a pt oper amount. This has re­
quired special attention to the item of depreciation with an alert to
the field offices in this respect. On the part of the field offices it
means an examination of the facts involved in each case, and a possible
redetermination of the standards which the taxpayer has claimed for him­
self at his present rate of production in order to align them with the
carefully considered measurement made by the Bureau.
Hew Types of Contracts
One of the business phemomena of this war, which has created a new
problem in the application of the bid provisions of the tax law, has
been the appearance of new forms of contracts. Some contracts provide
for the rental of tools or machinery by one of the parties with the pro­
vision that after a certain amount of rental has been paid the, machinery
shall belong not to the contractors, but to the Federal Government. In
other contracts the Government is a party, and rents machinery to the
other party with the provision that after so much rental has been paid ,
the private party may have an option to purchase the machinery at a
reduced price. These contracts raise the question whether such rentals
should be charged off as expenses or used tc determine the basis of the
property involved. They simply do not fit the distinctions heretofore
devised between expense and capital items. Furthermore, they have not
assumed established moulds so that one can answers wWith contract A
you will get this results with contract B you will get that result*n
Each contract must be examined and the tax result independently de­
termined*

m

8

-

Frozen Inventories
|»et m© mefction still another problem which is typical of the tax
difficulties arising out of the war. Many manufacturers and merchants
h^ve inventories of critical materials which ai*e frozen by Government
order, so that the taxpayer can not dispose of them in the regular
order of business. Nevertheless, the taxpayer must meet the expense
of carrying these frozen inventories. This squarely presents the ques­
tion whether the taxpayer1© ©3q>ense in carrying these inventories should
be deducted from income or added to the cost of the gbods involved.
Again the solution lies in the surrounding fact situations and; to the
sorrow of the tax administrator, there is no ready-made ansvrer for
every case.
Regulations
I wish I could say that the work of the Bureau of Internal Revenue
ended with the enactment of a revenue act. Almost the opposite is true.
The Bureau assists constantly in various connections throughout the con­
sideration of a Revenue Act by the Congress. But its work really begins
when the Revenue Act has been signed by the President, One of the
principal items of Bureau labor is the preparation of regulations and
new tax return forms to implement the new statute.
You can imagine the extensive labor that must be put upon the
regulations to be issued under the 19*42 Act, particularly in connection
with such provisions as the war losses section, the two-year carryback
of net operating losses., the renegotiation of contracts sections, the
transportation of property tax, and the post-war refund of the excess
profits tax. The list might be extended almost indefinitely. In
addition to the new measures in the law the older sections have under­
gone many changes, making necessary corresponding revisions of the
regulations. The estate tax regulations must be substantially revised.
There is a legion of difficulties in connection with the subject of
pension trusts. The new Revenue Act contains 281 sections. Bach of
them requires elaboration in regulations. The official text of the
19*42 Act runs to 2*4-9 pages* The regulations covering the Act must be
many pages more. This job of preparing the regulations is exclusively
the burden of the Washington office, and constitutes a large part of
its war-time job.
I need not expound to you the importance of carefully prepared
regulations. From the standpoint of the taxpayer, they should be more
than a paraphrase of the statute. They should give real information
and help taxpayers to comply with the law. But, on the other hand,
they should not sacrifice rights of the Government. Jt is always to
be remembered in connection with every regulation that it is given

~ 9 ~
great weight by the courte in the interpretation of ambiguous provisions
of thé statute,
(The Interpretation of Wartime Provisions
When the Bureau has finished with the problem of writing the
regulations and preparing the tax forms, it will find as a result of
the war that it still has the burden of interpreting and applying
certain wartime legislation*
War Losses
Oneiof the most elaborate of these wartime provisions is Section 156
of the Revenue Act of lÿ+2 providing for war losses* With this section
as with other wartime provisions, Congress could not hope to Bpeoify in
legislation the exact solution for the practical problems created by the
war* It, therefore, "outlined broadly its intention and placed the duty
upon the Commissioner of Internal Revenue of determining the exact
manner in which the wartime problems .should be solved, In this,section
dealing with war losses, for example, Congress found it necessary to
charge the Commissioner in some 10 different instances with the
responsibility of making fact determinations necessary to the applica­
tion of the statute. The legislation with respect to war losses is a
new type of legislation* By this I mean there was no similar legis­
lation' in the Revenue Acts of the last war* (There can, therefore, be
no prior administrative history to direct the Bureau in applying this
section«
(Che Excess Profits Tax
(Che excess profits tax, and particularly the relief sections con­
tained in the 1962 Revenue Act, have created further administrative
problems because of the impossibility of covering in precise terms all
the many situations created by the war* Fortunately in this case there
is a history of administration during the last world wa.r and the
experience of the past three years upon which the Bureau can draw for
guidance in the administration of these complex provisions*
Amortisation of Emergency Facilities
Squally a product of the war are the provisions of the Code pro­
viding for amortisation of emergency facilities* Until the 19^2 Revenue
Act this special treatment for facilities, called into production by the
war, was available to corporations alone and limited to facilities
acquired after June 10, 19^0* Nevertheless, the amount of work involved
was such that the Bureau has accumulated 2^ filing cabinets full of
necessity certificates which represent the emergency facilities to
which special attention must be given. Now, with the 19^-2 Revenue Act

1

-

10

-

and the extension of the privilege of amortizing these facilities to
partnerships and individuals and to corporations so far as facilities
acquired "between January 1, 19^0 and June 10, 1 9 ^ are concerned, the
volume of thé Bureau* s "business in this regard will be almost doubled.
In addition the Bureau must re-examine the returns made for prior years
to give effect to the retroactive allowances provided by the' legislation.
' Cooperation With Other Departments

. In connection with amortization, I may note that one of the most
satisfying results of the war upon tax administration has been the in­
crease of the collaboration of other Departments and agencies of the
Government, Thus in the case of the amortization provisions of the
Internal Revenue Code not only is the Treasury concerned, but also the
War and Wavy Departments have functions essential to the carrying out
of this legislation.
Prior to the Revenue Act of 19^2 the tax consequences of the re­
negotiation of war production contracts were not spelled out by statute.
The War and Havy Departments and the Maritime Commission, therefore,
found a reluctance on the part of taxpayers to accept renegotiated con­
tracts until the tax effects were cleared. The Bureau of Internal
Revenue cooperated by going over the proposed contracts with the con-v
tractors involved and in many instances arrived at closing agreements
which would assure the contractor of his position, thus promoting a
ready acceptance of the renegotiated contracts. This same hind of
collaboration with other Government agencies and the use of closing
agreements ape likewise expediting the signing of many new contracts
foi* essential supplies.
Manpower
The problems which I have discussed thus far in tax administration
we have divided into problems of the field and of the Washington office
of the Bureau of Internal Revenue* There is onq effect of the war,
however, which bears equally upon both the field and home offices*
This is the manpower shortage created by military needs.
As with other organizations, our personnel is divided roughly into
three groups. There is a group from 20 years of age to 30 which has
had theoretical training and would normally be in the process of re­
ceiving practical experience. There is the group from 30
50 which
has received both its theoretical and practical training and is at the
height of its value in the acLmini strati op of the tax. program. And
finally, there is the group over 50 which, though thoroughly capable,
is less physically able to carry the volume of work carried by the

XX —

other groups* The first; two groups are being rapidly and substantially
depleted by the military demands so that the increased volume of work,
which I have been describing as war created, is falling upon the group
which is less able to carry even the normal volume. Of course, this is
a problem which confronts the taxpayer as well as the Bureau. Vfith a
diminished number of accountants and attorneys available in private
practice many corporations have indicated that they will have difficulty
in preparing to file returns on due dates during the coming year. This,
in turn, will Increase the burden of the local revenue agent who will
find in many instances that returns have not been prepared as carefully
as in the past and that, therefore, it will be necessary for him to in­
crease the amount of investigation and checking in handling returns*
There are many criteria of adequate taxes. Since 1 am talking
here today to the point of administration, I think it is proper to
repeat what I have said beforet that not the least of the criteria
of adequate taxes is their administrative feasibility. One test of a
sound tax measure is whether it raises serious problems of tax com­
pliance and whether it i&^oses too great a drain on scarce men and
machines. .Constantly, throughout the consideration by the Congress of
the Bevenue Act of 19^2, I was obliged to call to the attention of
committees the administrative aspects of suggested provisions. An
example in point is the sales tax*
A Federal sales tax, regardless of whether it is a retail sales
tax, a manufacturer*s ta,x, or a wholesaler*s tax, would require the
handling of a large number of monthly returns and the auditing of the
books and records of thf many registrants and taxpayers. This at a
time when, as. 1 have stated, it is increasingly difficult to secure
administrative personnel*
The administrative problems associated with the number of tax­
payers are greatest undor a retail sales tax. This is tru^ because the
tax must be collected in smaller amounts and from a larger number of
taxpayers than the other two forms of sales tax.
X have made referance to the burden which is now being carried
with respect to interpretation and the creation of regulations. Under
a manufacturers1 or wholesalers* tax these problems would be further in­
tensified. And under the retail sales tax such questions as the appli­
cation of the tax to installation and.transportation charges, the
treatment of trade-ins and installment sales would present similar ad­
ministrative problems.
In administering tax-free sales under any one of the three forms
of sales tax; a system of licenses or registration would in all proba­
bility be required. For enforcement purposes it would be necessary to

- 12

hare a census of retailers in the event a retail sales tax were adopted
and, inasmuch as the mortality rate of retail "business is high, the ad*»*
ministrator would require some method of discovering new businesses and
getting returns from discontinuing or bankrupt businesses.
Conclusion
I must end my remarks today with a plea. X have failed if I have
not made clear to you that the Treasury and the Bureau of Internal
Revenue are confronted with unprecedented problems. I have given you
concrete examples of our increased administrative burden. The strain
will be great. I am confident that the .Job will be done. All along
the line the country is facing new problems with imagination and
courage. The job is being done* fhe administrative task of collect­
ing $25 billion of taxes will be performed in the same spirit.
But we need help. We need the cooperation of taxpayers and
their counsel. We must adopt every possible labor-saving device. We
need a spirit of mutual trust and confidence. We need concise memo­
randa, prompt compliance, frank disclosures, and every possible aid
that taxpayers can give, I know you can give us assistance and I hope
you will help us in this way to do one of the hardest jobs in the
world.

TREASURY d e p a r t m e n t
Bureau of Internal Revenue

Washington
FOR IMMEDIATE RELEASE
■TueaBijy»

December 1» 1942.

p£e88 Servic®
No#

3

^

ft

Commissioner of Internal Revalue uuy T . Eelvering announced today
the opening of the Cleveland office of the new Salary Stabilization
Unit of the Bureau of Internal Revenue.

The Unit will be located

in the Williamson Building, 215 Euclid Avenue, Cleveland, Ohio.
The office will be in charge of Earl C. Ely, who has a record of
more than twenty years of responsible work in the Internal Revenue
Service.
The territorial jurisdiction of the Cleveland office will cover
the States of Ohio and Kentucky. That office will rule, for and on
behalf of the Commissioner of Internal Revenue, on all requests and
applications for salary increases and decreases coming within the
jurisdiction of the Commissioner as defined in the regulations of the
Economic Stabilization Director and approved by the President on
October 27, 1942.

t

The jurisdiction of the Commissioner covers all salaries
over #5,000 per year, and salary payments of less than #5,000 per
year in the case of executive, administrative or professional
employees not represented by labor organizations.
Under the present arrangement employers in the States of Ohio
and i^ntubky will address their requests for rulings to ’’Head, Salary .
Stabl 1iza/bion Unit, Williamson Building, 215 Euclid Avenue, Cleveland,
Ohiyo/ané will obtain rulings from that office as to proposed salary
a^ustj^nts. Whenever necessary, employers may confer with the memoers
of tie Cleveland office regarding proposed adjustments. Procedure will
be provided to permit appeals to the Commissioner of Internal Revenue in
Washington in case of adverse rulings by the Cleveland office.
Although rulings of the Cleveland office are subject to modifica­
tion or reversal of the Commissioner of Internal Revenue in Washington,
employers obtaining favorable rulings from the Cleveland office can
in each instance rely on such rulings. Ho modification or reversal
by the Commissioner of the ruling made by the Cleveland office will
be given retroactive effect.

Ut

dll

TREASURY DEPARdMiT
Bureau of Internal Revenue
Washington
FOR IMMEDIATE RELEASE,
T u e s d a y ,1 D e c e m b e r 1 ,

11/24/4 :>

1942.

P re ss

S e r v ic e

No. 34-27

---- ------

Commissioner of Internal Revenue Guy T. Helvering announced
today the opening of the Cleveland office of the new Salary Stabili­
zation Unit of the Bureau of Internal Revenue.

The Unit will be

located in the Williamson Building, 215 Euclid Avenue, Cleveland,
Ohio.

The office will be in charge of Eafl C. Ely, who has a record

of more than twenty years of responsible work in the Internal Revenue
Service.
V
The territorial jurisdiction of the Cleveland office will cover
phe States of Ohio and Kentucky. That office will rule, for and on
behalf of the Commissioner of Internal Revenue, on all requests and
applications for salary increases and decreases coming within the
jurisdiction of the Commissioner as defined in the regulations of
the Economic Stabilization Director and unproved by the President on
October 27, 1942.
T h e j u r i s d i c t i o n o f t h e C o m m is s io n e r covers all salaries over
9 5 ,0 0 0 p e r y e a r , a n d s a l a r y p a y m e n t s o f 1.less than $ 5 ^ 0 0 per year
in t h e c a s e o f e x e c u t i v e , a d m i n i s t r a t i v e o r p r o f e s s i o n a l e m p lo y e e ,
not r e p r e s e n t e d by la b o r o r g a n iz a t io n s .
U n d e r t h e p r e s e n t a r r a n g e m e n t e m p lo y e r s i n t h e S t a t e s ' o f O h io
and K e n t u c k y w i l l a d d r e s s t h e i r r e q u e s t s f o r r u l i n g s t o " H e a d ,
iSala y S t a b i l i z a t i o n U n i t , W i l l i a m s o n B u i l d i n g , 2 1 5 E u c l i d A v e n u e ,
C l e v e l a n d , O h io , a n d w i l l o b t a i n r u l i n g s f r o m t h a t o f f i c e a;
p ro p o se d s a la r y a d ju s t m e n t s .
W h e n e v e r n e c e s s a r y , e m p lo y e r s may
c o n f e r w i t h t h e m e m b e rs o f t h e C l e v e l a n d o f f i c e r e g a r d i n g p r o p o s e d
a d ju s t m e n t s .
P r o c e d u r e w i l l be p r o v id e d t o p e r m it a p p e a ls to th e
jC o m m is s io n e r o f I n t e r n a l R e v e n u e i n W a s h in g t o n i n c a s e o f a d v e r s e
r u lin g s by th e C le v e la n d o f f i c e .

¡|

BBHWBBWjiPl i"

A lt h o u g h r u l i n g s o f t h e C le v e la n d o f f i c e a r c s u b j e c t t o m o d i f i ­
c a t i o n o r r e v e r s a l o f t h e C o m m is s io n e r o f I n t e r n a l R e v e n u e i n
p à s h i n g t o n , e m p lo y e r s o b t a i n i n g f a v o r a b l e r u l i n g s f r o m t h e C l e v e l a n d
o f f i c e c a n i n e a c h i n s t a n c e r e l y on s u c h r u l i n g s , . Ho m o d i f i c a t i o n
o r r e v e r s a l b y t h e C o m m is s io n e r o f t h e r u l i n g m ade b y t h e C l e v e l a n d
o f f i c e w i l l be g iv e n r e t r o a c t i v e e f f e c t .

-o O o

TREASURY DEPARTMENT
Bureau of Internal R evenue
WASHINGTON

FOR IMMEDIATE RELEASE
Friday, November 27, 1942.

Press Service

H®* 3

///¿ ¡ ¿ fir C .

y,

v

Commissioner of Internal Revenue Guy T, Helvering announced today

P i l ¡ns
fe ito ;
■

the opening of the Atlanta office of the new Salary Stabilization

pissic

Unit of the Bureau of Internal Revenue.

le open

The Unit will be located

in Rooms 717-720, William Oliver Building, Atlanta, Georgia.
office will be in charge of Carlos J.
record of more than twenty years

The

who has a

loca I Eooi

of responsible work in the

fe will

Lively,

o f mois

Internal Revenue Service.
The territorial jurisdiction of the Atlanta office will cover
the States of South Carolina, Georgia, Florida, Alabama, and Tennessee.
That office will rule, for and on behalf of the Commissioner of Internal
Revenue, on all requests and applications for salary increases and
decreases coming within the jurisdiction of the Commissioner as defined
in the regulations of the Economic Stabilization Director and approved
by the President on October 27, 1942.
The jurisdiction of the Commissioner covers all salaries over
I5,000 per year, and salary payments of less than #5,000 per year in
the case of executive, administrative or professional employees not
represented by labor organizations.
Under the present arrangement employers in the States of South
Carolina, Georgia, Florida, Alabama and Tennessee will address their
requests for rulings to "Head, Salary Stabilization Unit, Rooms 717-20
William Oliver Building, Atlanta, Georgia”, and will obtain rulings
from that office as to proposed salary adjustments. Whenever necessary,
employers may confer with the members of the Atlanta office regarding
proposed adjustments. Procedure will be provided to permit appeals to
the commissioner of Internal Revenue in Washington in case of adverse
rulings by the Atlanta office.
Although rulings of the Atlanta office are subject to modification
or reversal of the Commissioner of Internal Revenue in Washington,
employers obtaining favorable rulings from the Atlanta office can in each
instance rely on such rulings. No modification or reversal by the Commiseffect °f ^

1zatioi hit of

rUlinS 1110(16 by the Atlanta office will be given retroactive

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TREASURY DEPARTMENT
Bureau of Internal Revenue
Washington
FOR IMMEDIATE RELEASE,
Friday, November 27, 1942.

Press Service
No. 34-28

11724742------------ - - Commissioner of Internal Revenue Guy T. Helvering announced *' .
today the opening of the Atlanta office of the new Salary Stabili­
sation Unit of the Bureau of Internal Revenue*

The Unit will be

located in Rooms 717-720, William Oliver Building, Atlanta, Georgia*
¡The office will be in charge of Carlos J* Lively, who has a record
Iof more than twenty years of r esponsible work in the Internal
[Revenue Service.
The territorial jurisdiction of the Atlanta office will cover
[the States of South Carolina, Georgia, Florida, Alabama, and .
Tennessee. That office will rule, for and on behalf of the Commis­
sioner of Internal Revenue, on all requests and applications for
salary increases and decreases coming within the jurisdiction of the
[Commissioner as defined in the regulations of the Economic Stabili­
sation Director and approved by the President on October 27, 1942.
The jurisdiction of the Commissioner covers all salaries over
|5,000 per year, and salary payments of less than 4>5,000 per year in
the case of executive, administrative or professional employees not
represented by labor organizations,
their
s 717-20
lings

Under the present arrangement employers in the States of South
Carolina, Georgia, Florida, Alabama and Tennessee will address their
requests for rulings to uHead, Salary Stabilization Unit, Rooms
lecessarji 117-720^William Oliver Building, Atlanta, Georgia11, and will obtain
rulings from that office a s to proposed salary adjustments. Whenever
peals to| necessary, employers may confer with the members of the Atlanta
adverse office regarding proposed adjustments*
Procedure will be provided
to permit appeals to the Commissioner of Internal Revenue in
Washington in case of adverse rulings by the Atlanta office.

3
8
Ûi
l
<

Although rulings of the Atlanta office are subject to modifica­
tion or reversal of the Commissioner of Internal Revenue in
Washington, employers obtaining favorable rulings from the Atlanta
loffice can in each instance rely on such rulings. No modification
||r reversal by the Commissioner of the ruling made by the Atlanta
office will be given retroactive effect.

>o0o-

TREASURY DEPARTMENT
Bureau ef Internal Revenue
WASH3NGTGN
FOR IMPEDIATE RELEASE
Monday, November 30th, 1942«

Press SBrrice N

N9‘ 3 / - a.

n /o .

Commissioner of Internal Revenue Guy

Helvering announced today

pondi
II

the opening of the Seattle office of the new Salary Stabilization Unit
of the Bureau of Internal Revenue.

The Unit will be located in Room 312

Smith Tower Annex, Seattle, Washington.

The office will be in charge of

Robert J. Service, who has a record of more than twenty years of responsible
■work in the Internal Revenue Service.
The territorial jurisdiction of the Seattle office will cover the
States of Washington, Oregon, Idaho, Montana, Wyoming and Alaska. That
office will rule, for and on behalf of the Commissioner of Internal
Revenue, on all requests and applications for salary increases and de­
creases coming within the jurisdiction of the Commissioner as defined
in the regulations of the Economic Stabilization Director and approved
by the President on October 27, 1942.
The jurisdiction of the Commissioner covers all salaries over
$5,000 per year, and salary payments of less than $5,000 per year in the
case of executive, administrative or professional employees not represented
by labor organizations.
Under the present arrangement employers in the States of Washington,
Oregon, Idaho, Montana, Wyoming and Alaska will address their requests for
rulings to MHead, Salary Stabilization Unit, Room 312, Smith Tower Annex,
Seattle, Washington1’, and will obtain rulings from that office as to
proposed salary adjustments. Wlhenever necessary, employers may confer
with the members of the Seattle office regardhg proposed adjustments.
Procedure will be provided to permit appeals to the Commissioner of Internal
Revenue in Washington in case of adverse rulings by the Seattle office.

territo:

;he S I of Wai

hat c
¡item
imcrea
lissio

fee w ill
[Revenue,
and dec
I as defi
fetor and

ir is d ic
Jr year, ;
ca p ezectr

Ü hy lai

f| the pr<
Oregoi
.«ests .foi
Smith ïc

Although rulings of the Seattle office are subject to modification
or reversal of the Commissioner of Internal Revenue in Washington, employers
obtaining favorable rulings from the Seattle office can in each instance rely
on such rulings. No modification or reversal by the Commissioner of the
ruling made by the Seattle office will be given retroactive effect.

g | tha'i

jeeessary
I S reg

permit
Eton m
i c
»

lull

fe is a l o:
d

o

Jf M
pii

Î the

1 1 giv,

fol
treasury department

Bureau of Internal Revenue
Washington
Press Service
No. 34-29'

,FOR IMMEDIATE RELEASE,
tRonday, November 30» 1942,
11724742

Commissioner of Internal Revenue Guy T. Helvering announced
today the opening of the Seattle office of the new Salary Stabiliza­
tion Unit of the Bureau of Internal Revenue.

The Unit will be

located in Room 312, Smith Tower Annex, Seattle, Washington.
The office will be in charge of Robert J* Service, who has a record
of more than twenty years of responsible work in the Internal Revenue
Service.

The territorial jurisdiction of the Seattle office will cover
the States of Washington, Oregon, Idaho, Montana? Wyoming and Alaska.
That office will rule, for and on behalf of the Commissioner of
Internal Revenue, on all requests and applications for salary
increases and decreases coming within the jurisdiction of the Coram the
jmissioner
as defined in the regulations of the Economic Stabiliza­
sDI*6B6Iltw
tion Director and approved by the President on October 27, 1942.

'CTO

The jurisdiction of the Commissioner covers all salaries over^
$ 5 ,000 per year in
aests for the case of executive, administrative or professional employees not
rJätfi represented by labor organizations.

liingtoBj

te,ooo per year, and salary payments of less than

to

»
fvo*r
D«
lU

Under the present arrangement employers in the States of

ttts.
passhington, Oregon, Idaho, Montana, Wyoming and Alaska will address
of I #
;heir requests -for rulings to ifHead, Salary Stabilization Unit,
ffiee. i loom 312, Smith Tower Annex, Seattle, Washington", and will•obtain

[rulings from that office as to proposed salary adjustments.

cation ¡Whenever necessary, employers may confer with the members of the
Procedure will be
) employ Seattle office regarding proposed adjustments.
stancer^J provided to permit appeals to the Commissioner of Internal Revenue
of the in Washington in case of adverse rulings by the Seattle office.
t.

Although rulings of the Seattle office are subject to modifica­
tion or reversal of the Commissioner of Internal Revenue in
¡Washington, employers obtaining favorable rulings from the Seattle
»office can in each instance rely on such rulings, ho modification
|or reversal by the Commissioner of the ruling made by the Seattle
office will be given retroactive effect.

oOo-

/;

H u

Vtifr)

Tlie township of I s l i p , Long Island^and i t s 32,000 c i t ­
izens formally became partners of Uncle Sam today when i t
became the first^ ttf'p re sen t the entire proceeds
_______ -%

,

,

.

of i t s scrap drivV-tO^'Secretary Morgenthau to be used m

A

furthering the war e ffo r t in any way he may see f i t .
!,We thought that the people gave the scrap to the Gov­
ernment, and therefore that the Government should have the
^'6 u3 wi ^ 'P ^

proceeds,” Robert Jones, spokesman for a ^committee explained
as he handed the check to Mr. Morgenthau.

tfI think it-are-wondorfm !t"
wj(YP âp o thrft

—

mài'«

MMM

Treasury o f f i c i a l s observed that the amount, collected
through the employment of sound trucks and a ir raid wardens,
was s u ffic ie n t to purchase eight parachutes, or four 30calib re machine guns, or fiv e 500-pound demolition bombs.
COrAx

Other members of the gr o u p waolu d
Frank Sin giser and Charles J . Meyer.

c

.C

5*' '.jJ

Hog er 0. LafferranSre,

TREASURY DEPARTMENT
Washington
FOR IMMEDIATE RELEASE,
Tuesday, November 24, 1942

Press Service
No, 34-30

The township of Islip, Long Island, and its 32,000
citizens formally became partners of Uncle Sam today when
it became the first community to present the entire pro­
ceeds of its scrap drive - $2,572*77 - to Secretary
Morgenthau to be used in furthering the war effort in any
way he may see fit*
”We thought that the people gave the scrap to the
Government, and therefore that the Government should have
the proceeds,” Robert Jones, spokesman for a township com­
mittee, explained as he handed the check to Mr. Morgenthau*
Treasury officials observed that the amount, collected
through the employment of sound trucks and air raid wardens
was sufficient to purchase eight parachutes, or four 30calibre machine guns, or five 500-pound demolition bombs.
Other members of the group presenting the check were
Roger 0. Lafferrandre, Frank Singiser and Charles J . Meyer.

- 3 -

issue or on subsequent purchase, and the amount actually received either
upon sale or redemption at maturity during the taxable year for which the
return is made, as ordinary gain or loss*
Treasury Department Circular No* 418, as amended, and this
notice, prescribe the terms of the Treasury bills and govern the condi­
tions of their issue*

Copies of the circular may be obtained from any

Federal Heserve Bank or Branch*

<S> &

0

mg*
-

2

-

Reserve Banks and Branches^ following which public announcement will be made
by the Secretary of the Treasury of the amount and price range of accepted
bids.

Those submitting tenders will be advised of the acceptance or rejec-

tion thereof.

J

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.

Payment of accepted tenders at the

nrices offered must be made or completed at the Federal Reserve Bank in
cash or other immediately available funds on

December 2. 1942______ •
B

The income derived from Treasury bills, whether interest or gain
from the sale or other disposition of the bills, shall not have any exemption, |
as such, and loss from the sale or other disposition of Treasury bills shall
not have any special treatment, as such, under Federal tax Acts now or here-»
after enacted.

I

The bills shall be subject to estate, inheritance, gift, or

other excise taxes, whether Federal or State, but shall be exempt from all
taxation now or hereafter imposed on the principal or interest thereof by
any State, or any of the possessions of the United States, or by any local
taxing authority.

For purposes of taxation the amount of discount at which

Treasury bills are originally sold by the United States shall be considered
to be interest.

Under Sections 42 and 117 (a) (l) of the Internal Revenue

Code, as amended by Section 115 of the Revenue Act of 1941, the amount of
discount at which bills issued hereunder are sold shall not be considered
to accrue until such bills shall be sold, redeemed or otherwise disposed
of, and such bills are excluded from consideration as capital assets.
Accordingly, the owner of Treasury bills (other than life insurance com­
panies) issued hereunder need include in his income tax return only the
difference between the price paid for such bills, whether on original

.

tipi
Bgton

2 u P ---- 2 /
?)

TREASURY DEPARTMENTWashington
EOR RELEASE, MORNING- NEWSPAPERS,

Friday9 November 27 > 1942

///?

The Secreta ry o f the tre a s u ry , by t h is p u b lic n o tic e , in v it e s tenders
•for S 50 0 .0 0 0.0 00

, o r thereabouts, o f

?l._-day T re a su ry b i l l s ,

on a discount b a s is under com petitive b id d ing .
he dated

IW ftm har 2 . 1942

The b i l l s

and w i l l mature

iff

when the face amount w i l l be payable w ithout in t e r e s t .

to be issued

of t h is s e rie s w ill

19A3
SS
They w i l l be issued m

March

to.nil
Öieclösiö

bearer form o n ly , and in denominations o f *>1,000, $ 5 ,0 0 0 , §>10,000, $100,000,

i
it, W
ash:
andthej
tiore'thi
-It is i
lithe
finks or

$ 500,000, and *1 ,0 0 0 ,0 0 0 (m a tu rity v a lu e ).
Tenders w i l l be received at Federa l Reserve Banks and Branches up to-the

g J r L r i time, Monday. November JO ,
w
Tenders w i l l not be received at the Tre a su ry Department, Washington. Bach tender

c lo sin g ho u r, two o*clock p. m .f E a ste rn

must be f o r an even m u ltip le of $ 1 ,0 0 0 , and the p ric e o ffe re d must be
on the b a s is of 100, w ith not more than three decim als, e. g ., 9 9 .9 2 5 .
may not be used.

It

irs will
: coigpani

ex p resse d

11

Fractions

i s urged that tenders be made on the p rin te d forms and for­

Atei*,
¡¡j Heser
Sentwin
;price 1
%ised
Ì||§||;
m j
S|M11
hey
If c inn,

warded in the sp e c ia l envelopes which w i l l be sup p lie d by Federal Reserve Banks
o r Branches on a p p lic a tio n th e re fo r.
Tenders w i l l be received w itho u t deposit from incorporated banks and
t r u s t companies and from re sp o n sib le and recognized d ea lers in investment securi­
t ie s .

Tenders from o th e rs must be accompanied by payment of 2

i

percent of t

face amount o f T re a su ry b i l l s applied f o r , u n le ss the tenders are accompanied t f 1
an exp ress guaranty o f payment by an incorporated bank or t r u s t company.
Immediately a fte r the c lo sin g h o u r, tenders w i l l be opened at th

3 i~

j securi
■2pere
tender

3 /

(g V ^ A j)

J
j

\P

if

E l oì j
!as sue]

TREASURY DEPAR TUENT
Washington

FOR RELEASE, HORNING NEWSPAPERS,
Friday, November 27, 1942*
--------- — -—
^— —

The Secretary of the Treasury,'by this public notice,
tenders for §500,000,000,

invites

or thereabouts, of 91-day Treasury bills,

to. be issued on a discount basis under competitive bidding.
The bills of this series will be dated December 2, 1942,* and will
mature March 3» 1943» when the face amount will be payable without
interest*
nil

They will be issued in bearer form.only, and in •

denominations of §1,000, §5,000, §10,000,;§100,000, §500>000, and
§1,000,000 (maturity value).

*‘

Tenders will be received at Federal Reserve Banks, and Branches
up to the closing hour, two o ’clock p. m . , Eastern. War time, Monday,
November 30, 1942.
Tenders will not be received at the.Treasury
Department, V/ashington.
Each tender must be for ,an even multiple of
§1,000, and the price oRferetf 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 thé printed forms and
forwarded in the special envelopes which'.will be supplied by Federal
Reserve Banks or Branches on application therefor.
Tenders will be received without deposit from incorporated banks
and trust companies and from responsible and recognized dealers in
Tenders from others must be accompanied by
griffi* investment securities.
payment of 2 percent of the face amount of Treasury bills applied for
c |t| unless the tenders are accompanied by an express guaranty of payment
by an incorporated bank or trust company.
lack^

|
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 Secretary of the Treasury of the
amount and price range of accepted bids. ■ Those submitting tenders
will be advised of the acceptance or rejection thereof.
The Secretar
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.
Payment of accepted tenders at the prices
offered must be made or completed at the Federal Reserve Bank in
cash or other immediately available funds on December 2, 1942.
The income derived from Treasury bills, whether interest or gain
from the sale or other disposition of the bills, shall not have any
exemption, as such, and loss from the sale or other disposition of ’

ill
34-31

(Over )

2
T re a s u ry b i l l s s h a ll n o t h ave a n y .s p e c ia l tre a tm e n t, a s s u c h , un d er
F e d e r a l t a x A c t s now o r h e r e a f t e r e n a c t e d .
T h e b i l l s s h a l l bo
<1
s u b j e c t t o e s t a t e , i n h e r i t a n c e , g i f t , o r o t h e r e x c i s e t a x e s , w nethej
F e d e r a l o r S t a t e , b u t s h a l l b e e x e m p t f r o m a l l t a x a t i o n now o r h e r e
a f t e r im p o s e d o n t h e p r i n c i p a l o r i n t e r e s t t h e r e o f b y a n y S t a t e , o m
a n y o f t h e p o s s e s s i o n s o f t h e U n i t e d S t a t e s , o r b y any l o c a l t a x ii^
a u t h o r it y .
F o r p u r p o s e s o f t a x a t i o n t h e a m o u n t o f d i s c o u n t a t whicfj
T r e a s u r y b i l l s a r e o r i g i n a l l y s o ld b y t h e U n it e d S t a t e s s h a l l be J
c o n s id e r e d t o be i n t e r e s t *
U n d e r S e c t i o n s 4 2 ..and 1 1 7 ( a ) v X > Q-*: t |
I n t e r n a l lie v e n u e C o d e , a s a m e n d e d b y S e c t i o n 1 1 5
t h e lie v e n u e A c+
o f 1 9 4 1 , t h e a m o u n t 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 are
; s o l d s h a l l n o t 'b e c o n s i d e r e d t o a c c r u e u n t i l s u c h b i l l s s h a l l - be
s o l d , re 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 s u c h b i l l s a r e e x c lu d e
fro m c o n s id e r a t io n a s c a p i t a l a s s e t s »
A c c o r d in g ly , th e o w n er ° f .l
T r e a s u r y b i l l s ( o t h e r t h a n l i f e 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 n e e d 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 o n l y t h e ^ d i f f e r e n c e
b e tw e e n t h e p r i c e p a id f o r s u c h b i l l s , w h e th e r on o r i g i n a l is s u e
on 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 i t h e r
u p o n , 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 m a d e , a s o r d i n a r y g a i n o r l o s s .
T r e a s u r y D e p a rtm e n t C i r c u l a r H o. 4 1 8 , a s am ended, a n d T h is
n o t i c e , p r o s c r ib e ? th e 1 te rm s o f t h e T r e a s u r y b i l l s and. g o v e rn th e
c o n d it io n s o f t h e i r is s u e *
C o p i e s o f t h e c i r c u l a 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 s e r v e B a n k o r B r a n c h .

-o O o -

TREASURY DEPARTMENT
Bureau of Iatornai Revenue
WASHINGTON

FOR IMMEDIATE RELEASE
Tuesday, December 1, 1942.

Press Service
Ho-

//

3 V - 3 2-

Commissioner of Internal Revenue Guy T. Helvering announced
today the opening of the Kansas City office cf the hew Salary
Stabilization Unit of the Bureau of Internal Revenue.

The Unit

will be located in the R. A. Long Building, Kansas City,
Missouri,

The office will be in charge of M. L. R. Wade, who

has a record of more than twenty years of r^ponsible work in
the Internal Revenue Service.
The territorial jurisdiction of the Kansas City office will
cover the States of Kansas, Missouri, Iowa, Nebraska and Colorado.
That office will rule, for and on behalf of the Commissioner of
Internal Revenue, on all requests and applications for salary
increases and decreases coming within the jurisdiction of the
Commissioner as defined in the regulations of the Economic Stabiliza­
tion Director and approved by the President on October 27, 1942.
The jurisdiction of the Commissioner covers all salaries over
|5,000 per year, and salary payments of less than $5,000 per year in
the case of executive, administrative or professional employees not
represented by labor organizations.
Under the present arrangement employers in the States of
Kansas, Missouri, Iowa^ Nebraska and Colorado will address their
requests for rulings to ”Head, Salary Stabilization Unit,
R, A. Long, Building,
Kansas City, Missouri”, and will
obtain rulings from that office as to proposed salary adjustments.
Whenever necessary, employers may confer with the members of the
Kansas City office regarding proposed adjustments. Procedure will be
provided to permit appeals to the Commissioner of Internal Revenue
in Washington in case of'adverse rulings by the Kansas City office.
Although rulings of the Kansas City office are subject to
modificatioh or reversal of the Commissioner of Internal Revenue
in Washington, employers obtaining favorable rulings from the Kansas
City office can in each instance rely on such rulings. No modification
or reversal by the Commissioner of the ruling made by the Kansas City
office will be given retroactive effect.

\

TREASURY DEPARTMENT
B u re a u o f In t e r n a l R evenue
W a s h in g t o n
P r e s s S e r v ic e
No. 3 4 -3 2

FOR IM M E D IA T E R E L E A S E
T u e sd a y , D ecem ber 1 , 1 9 4 2 .
|l/2?/i2
'
C o m m is s io n e r o f I n t e r n a l R e v e n u e G u y T .
to d a y th e

o p e n in g

s t a b iliz a t io n

U n it

o f th e K a n sas C it y

in

The o f f i c e

be in

m ore t h a n

th e R . A .

tw e n ty y e a rs

c h a rg e

Long B u ild in g ,
o f M. L .

o f r e s p o n s ib le

announced

o f t h e new S a l a r y

o f th e B u re a u o f I n t e r n a l R e ve n u e .

w i l l be lo c a t e d
w ill

o f f ic e

H e lv e r in g

The U n it

K an sas C it y ,

R . W ad e,
w o rk in

M is s o u r i.

who h a s a r e c o r d
th e

of

In t e r n a l Revenue

S e r v ic e .
The t e r r i t o r i a l j u r i s d i c t i o n o f th e K a n sa s C it y o f f i c e w i l l
c o v e r t h e S t a t e s o f K a n s a s , U i s s o u r i , Io w a , N e b r a s k a a n d C o l o r a d o ,
T h a t o f f i c e w i l l r u l e , f o r a n d on b e h a l f o f t h e C o m m is s io n e r o f
I n t e r n a l R e v e n u e , on a l l re q u e s t s and a p p lic a t io n s f o r s a la r y
i n c r e a s e s a n d d e c r e a s e s c o m in g w i t h i n t h e j u r i s d i c t i o n o f t h e
d o m m is s io n e r a s d e f i n e d i n t h e r e g u l a t i o n s o f t h e E c o n o m ic S t a b i l i ­
z a t i o n D i r e c t o r a n d a p p r o v e d b y t h e P r e s i d e n t on O c t o b e r 27> 1 9 4 2 ..

h

T h e j u r i s d i c t i o n o f t h e C o m m is s io n e r c o v e r s a l l s a l a r i e s o v e r
$ 5> 0 0 0 p e r y e a r , a n d s a l a r y p a y m e n ts o f l e s s th a n $ 5 )0 0 0 p e r y e a r in
t h e c a s e o f e x e c u t i v e , a d m in is t r a t i v e o r p r o f e s s i o n a l e m p lo y e e s n o t
re p re s e n te d by la b o r o r g a n iz a t io n s .

U n d e r, t h e p r e s e n t a r r a n g e m e n t e m p lo y e r s i n t h e S t a t e s o f K a n s a s ,
[ M i s s o u r i , Io w a , N e b r a s k a a n d C o lo r a d o w i l l a d d r e s s t h e i r r e q u e s t s
[ f o r r u l in g s to "H e a d , S a la r y S t a b i l iz a t i o n U n it , R . A . Long B u ild in g ,
||K a n s a s C i t y , M i s s o u r i ” , a n d w i l l o b t a i n r u l i n g s fro m t h a t o f f i c e a s
[ t o p r o p o s e d s a l a r y a d j u s t m e n t s '.
W h e n e v e r n e c e s s a r y , e m p lo y e r s m ay
T c d n f e r w i t h t h e m em bers o f t h e K a n s a s C i t y o f f i c e r e g a r d i n g p r o p o s e d
it [ a d j u s t m e n t s .
P r o c e d u r e w i l l be p r o v id e d t o p e r m it a p p e a ls t o t h e
[ C o m m is s io n e r o f I n t e r n a l R e v e n u e i n W a s h in g t o n i n c a s e o f a d v e r s e
, [ r u lin g s by th e K an sas C it y o f f ic e .
A lt h o u g h r u l i n g s o f t h e K a n s a s C i t y o f f i c e a r e s u b j e c t t o
m o d i f i c a t i o n o r r e v e r s a l o f t h e C o m m is s io n e r o f I n t e r n a l R e v e n u e
in W a s h in g t o n , e m p lo y e r s o b t a i n i n g f a v o r a b l e r u l i n g s fro m t h e K a n s a s
C
No m o d i f i ­
atH i t y o f f i c e c a n i n e a c h i n s t a n c e r e l y o n s u c h r u l i n g s .
c
a
t
i
o
n
o
r
r
e
v
e
r
s
a
l
b
y
t
h
e
C
o
m
m
is
s
io
n
e
r
o
f
t
h
e
r
u
l
i
n
g
m
ade
by th e
m
¡K a n sa s C i t y o f f i c e w i l l b e g i v e n r e t r o a c t i v e e f f e c t .

TREASURY DEPARTMENT
Bureau of Internal Revenue
washin &i q n

& t Jl.t>

FOR IMMEDIATE RELEASE,
Tuesday, December 1 , 1 9 4 2 . _____

Press Service

N o.

3Y^¿¿

Commissioner o f In te rn a l Revenue Guy T . H e lv e rin g announced
today the opening of the D a lla s o ffic e of the new S a la ry S t a b iliz a t io n
U n it of the Bureau of In te rn a l Revenue.

The U n it w i l l be located

in the Tower Petroleum B u ild in g , D a lla s , Te xa s.

The o ffic e w i l l be

in charge of A. H. H e rtw ig , who has a record of more than twenty
years of re sp o n sib le work in the In t e rn a l Revenue s e rv ic e .

H
The t e r r i t o r i a l ju r is d ic t io n of the D a lla s o ffic e w i l l cover
the S ta te s of M is s is s ip p i, Lo u isia n a , Te xa s, New Mexico, Oklahoma
and A rka nsa s. Tha t o ffic e w i l l r u le , f o r and on behalf of the
Commissioner o f In te rn a l Revenue, on a l l re q u e sts and a p p lic a tio n s
f o r s a la ry inc re a se s and decreases coming w it h in the ju r is d ic t io n
of the Commissioner as defined in the re g u la tio n s o f the Economic
S t a b iliz a t io n D ire c to r and approved by the P re sid e n t on October 27,
1942.

%

sj

l

The ju r is d ic t io n of the Commissioner covers a l l s a la rie s over
|5,000 per yea r, and sa la ry payments of le s s th an $ 5 ,0 0 0 per year
in the case of executive, a d m in istra tiv e or p ro fe ssio n a l employees
not represented by la bor o rg a n iza tio n s.
Under the present arrangement employers in the S ta te s o f
M is s is s ip p i, L o u isia n a , Te xa s, New Mexico, Oklahoma and Arkansas w i l l
address t l i e i r re q ue sts f o r r u lin g s to "Head, S a la ry S t a b iliz a t io n U n it ,
Tower
Petroleum
B u ild in g ,
D a lla s , T e x a s ", and w i l l
obtain r u lin g s from th a t o ffic e as to proposed s a la ry adjustm ents.
"Whenever necessary, employers may confer w ith the members of the
D a lla s o ffic e regarding proposed a d justm e nts. Procedure w i l l be
provided to p erm it appeals to the Commissioner of In t e rn a l Revenue
in Washington in case o f adverse r u lin g s by the D a lla s o ffic e .
Although r u lin g s o f the Dal la s o ffic e are sub jec t to m o d ific a tio n
o r re v e rs a l of the Commissioner o f In te rn a l Revenue in Washington,
employers obtaining favorable r u lin g s from the D a lla s o ffic e can in
each instance r e ly on such r u lin g s . No m o d ific a tio n or re v e rs a l by
the Commissioner of the r u lin g made by the D a lla s o ffic e w i l l be given
re tro a c tiv e e ffe c t.

I

O LP #,

\

lier'

mu
|l

I
I

tí

ii$î51

■TREASURY DEPARTMENT
Bureau of Internal Revenue
Washington
FOR IMMEDIATE RELEASE
Tuesday, December 1, 1942.

'Press Service
No. 34-33

H727/42

Commissioner of Internal Revenue Guy ,T. 'Helvering announced
located

today the opening of the Dallas office of the new Salary Stabilization

M filila

Unit of the Bureau of Internal Revenue,

twenty

the Tower Petroleum Building, Dallas, Texas.

The Unit will be located in
The office will be in

■charge of A. H. Kertwig, who has a record of more than twenty years
of responsible work in the Internal Revenue service.

rill cover
Okl&tea
)tthe
Dlieations
isdiction
Economic
October 21,

[
The territorial jurisdiction of the Dallas office will cover
[ ■the States of Mississippi, Louisiana, Texas, Hew Mexico, Oklahoma,
I and Arkansas,
That office will rule, for. and on behalf o f .the
1 Commissioner of Internal'Revenue, on all requests and applications

for salary increases and decreases coming within the jurisdiction
Qf the Commissioner as defined in the regulations of the Economic
Stabilization Director and approved by the President on October 27,
1942.

The jurisdiction of the Commissioner covers all salaries over
laries over
lip,000
per year, and salary payments of less than $>5,000 per year
i per year
, employees ih the case of executive, administrative Jor professional employees
[not represented by labor organizations.

Under the present arrangement employers in the States of -

ites of
Arkansas fill I Mississippi, Louisiana, Texas, Hew Mexico, Oklahoma and Arkansas will
)ilizationtti| address their requests for rulings to "Head, Salary Stabilization

ilnit, Tower Petroleum Building, Dallas, Texas”, and will obtain
liustments. [rulings from that office as to proposed salary adjustments.
[Whenever necessary, employers may confer with the members of the
rs of the [Pallas office regarding proposed adjustments.
Procedure will be
8 fillt* [provided to permit appeals to the Commissioner of Internal Revenue
lal Revenue [in Washington in case of. adverse rulings by the Dallas office.

andfill

office.

to n i ® « *
»ashi#!
ffice can &
reversal ^
o till t* i'1"

Although rulings of the Dallas office are.subject to modifica­
tion or reversal of the Commissioner of Internal Revenue in Washington
[employers obtaining favorable rulings from the Dallas office can in
[each instance rely on such rulings. Ho modification or reversal by
[the Commissioner of the ruling made by the Dallas office will be
[given retroactive effect.

-oOo-

1- 3/4 percen t

bonds and th e c e r t ific a t e s during the s p e c ifie d period s

w ill be rece iv ed w ithout d e p o s it, and payment a t par and accrued in te r e s t
to December 1 1 , 1942 fo r 1-3/4 percen t Treasury bonds a llo t t e d , and to
December 2 6 , 1942 fo r c e r t ific a t e s a llo t t e d must be xaade on such re s p e c tiv e
d a te s ,

S u b scrip tio n s from a l l o th ers must be accompanied by payment in

f u l l , a t par and accrued in te r e s t from December 1 to th e d a te payment i s
a v a ila b le in a F ed eral reserve Bank ©r the T reasu ry , fo r the amount o f
bonds or c e r tific a te ® a p p lie d f o r .

One day’ s accrued in te r e s t on 2—1/2

percent Treasury Bonds o f 1963-66 i s #0 .068, on 1-3/4 p ercen t T reasuiy Bonds
of I

94S

i s $0 ,048, and on 7/8 p ercen t Treasury C e r t ific a t e s o f Indebtedness

1 000.

o f S e rie s 1-1943 i s #0.024 per # ,

The te x ts o f the o f f i c i a l c ir c u la r s fo llo w :

The 2- 1/2 p ercen t Treasury Bond» o f 1963-611 w ill, do dated December 1 ,
1942 and w ill bear in te r o a t from th a t d ate a t tii© r a te o f 2- 1/2 p ercen t per
annum payable sem iannually# w ith the f i r s t payf-aent due June 13# 1 9 4 3 * The
bonds w ill im ture B o c e b e r 13# 1968 but isay be redeemed, a t th e o p tio n o f

the U nited S t a t e s , on and a ft e r December 13# 1943* Coupon bonds and bonds
re g is te re d both as to p r in c ip a l and in te r e s t « r ill be issu ed in denom inations
of
## ,
# «•>#
#
and $
,
# and in th e aenoimination o f
$ 1 ,000#000 fo r re g is te re d bonus o n ly . These bonds w ill not be a v a ila b le fo r
s u b scrip tio n by com m ercial banks# nor may they be tra n sfe rre d to o r h eld by
such banks fo r th e ir own account b efo re December 1# 1932« The bonds m y be
pledged as c o lla t e r a l fo r lo a n s , in c lu d in g lo an s by coM oercial banks# but any
such banks a cq u irin g th e bonds because o f fa ilu r e o f such lo an s to be p aid
a t m atu rity w ill be req u ired to d isp o se o f them in th e same manner as th ey
d isp o se o f o th er a s s e ts n ot e lig ib le to be owned by ban ks. Ary bonus o f th is
series# which upon the death o f th e owner c o n s titu te p a rt o f h is estate# w ill
be redeemed a t th e o p tio n o f th e d u ly co n stitu te d re p re se n ta tiv e s o f the de­
ceased owner1® e s ta te a t par and accrued in t e r e s t , co n d itio n ed on th e a p p lic a ­
tio n o f the or*tire proceeds o f redem ption to th e payment o f F ed eral e s ta te
ta x e s .

1300 1 000

000 110#000

100 000

The 1-3/4 percen t Treasury Bonds o f 194# w ill be dated December 1 , 1942
and w ill bear In te r e s t from th a t d ate a t the ra te o f p ercen t per annum
p a y a b le seruiannuaily with th e f i r s t payment due June 13# 1 9 4 3 * The bonds
w ill jiutur© Ju n e 13# 194# and may not be c a lle d fo r redem ption before m a tu rity .
Coupon bonds and bonds re g is te re d both as to p r in c ip a l and in te r e s t w ill be
issu ed in denom inations o f #500, # ,
, # ,
, ¿
ana $
,
, and in
the denom ination o f $1 ,000,000 fo r re g is te re d bonds o n ly .

1 3/4

1 000 3 000 10,000

100 000

The 7/8 percent Treasury C e rtific a te ® o f Indebtedness o f S e rie s 1-1943
w ill be dated December 1 , 1942# w ill be payable on December 1 , 1943# and w ill
bear in te r e s t a t the ra te o f 7/# p ercen t per annum payable sem ian n u ally . They
w ill be issu ed in b earer form o n ly w ith two coupons atta ch ed in th e denomi­
n atio n s o f # 1,000, # ,
, #
and #
,
.

5 000 10,000

100 000

Pursuant to the provisions of the Public Debt Act of 1941, interest upon
the bonds and certificates now offered shall not have a n y exemption as such
under Federal Tax Acts now or hereinafter enacted. The full provisions relat­
ing to taxability are set forth in the official circulars issued today^

S u b scrip tio n s fo r both is s u e s o f bonds and fo r th e is s u e o f c e r t ific a t e s
w ill be rece iv ed a t th e F ed eral deserve Banks and Branches# and a t th e Treasury
Department# W ashington.

Banking in s t itu tio n s and s e c u r itie s d e a le rs g e n e ra lly

may subm it s u b scrip tio n s fo r accou nt o f custom ers but o n ly th e F ed eral Reserve
Banks arid th e Treasury Department are au th o rized to a c t as o f f i c i a l a g e n cie s.
f

S u b scrip tio n s from banks and tr u s t companies fo r t h e ir own account fo r th e
M u J ' - 0 ..'L U X

jt-’
j / —

® r c 1'

iu /'

(ry

X m -c a / 9

£

~~pl, I

/

, //)yjj

(j

c

1 -a L

page

The Victory Fund Drive will continue for several weeks
and has for its aim a wide public participation in the interest of
sound Treasury financing out of current income arid savings.

djjPtL aN
Mare than half ths $9,000,000,000 will be raised from commercial banks^

ale®**,

v_3M»vewing”fre»i -bmBke^a»**TflfTmt

Teas sufy

t i' Z Z .

Although the Treasury is borrowing an unprecedented sum
in December, the program*vri8»e calls for longer intervals btween
loan flotations.

The espectation is that no further financing

will develop, after comjietion of the current program, until
February, with the exception oif the continuing sales of tan
f

savings notes, savings bonds and Treasury bills.
Secretary Morgenthau has sent a message to every salesman
of the Victory Fund Committees, in which he said that the American
public is being asked to ’’invest $9,000,000,000 in victory and in
freedom.”

«#

\

The funSs will be the medium through which the men on

the battlefields receive their supplies, he said, adding that those
who are engaged in the campaign are “contributing a high service to
the war effort.”

This task well done, the Secretary said, ’’will

bring satisfaction to us all and assurance to those in battle
The principal security
“Victory two-and-one-half s.”

the drive is called the

These bonds, due Dec. 15, 1968 and

callable Dec. 15, 1963, will not be sold to commercial banks, but

?

jmmg

•sJÊ^Ê9h

individual investors, corporations, institutions and other

in this Victory Loan Drive.

These hoods, at $500 and up, are the

ideal investment for them.”
AA^CmL t4+-& *
(t\A s ^ . ,
^iefregy Fuad >S»ive, Treasury officials
said today, the 300,000 volunteers of the War Savings Staff will
intensify their efforts to add at least 7,000,000 more income—earners
to the 23,000,000 who already are investing regularly i^serirs E War
Savings Bonds through the payroll savings program.

p

y/ ^ j^ jZ J c

*t£-*

Most
Â

---

—

t-i

.(

, J These groups, organized in each Federal Reserve District, are
responding with utmost enthusiasm to the program.

They are scanning

their lists of prospects and in some eases are forming competitive
teams to stimulate sales.

The district oommittees are headed in every

case hy the president of the respective Federal Reserve Bank.
<— ►
the
1 As part of the Victory Fund Activities,/commercial hanks
la the drive
of the country also have been enlisted/through the American Bankers
Association.

Also in the network are the stock exchanges of the

country, the Investment Bankers Association, and the National
Association «f Securities Dealers.
centers are adding to the effort.

Bond clubs in all financial

Ahe Victory Fund Drive of the United States Treasury, which
yv1
will raise $9,000,000,000 in borrowed funds to meet the costs of
the greatest war in history.

The first $1,000 bond of the

Victory Loan was purchased by the President from Secretary jaikitar
Morgenthau ^
"It is one of our jobs here at home," Mr.
Roosevelt said aar"trr gavc tits-the'^Swera-feary-r
/
"to provide the untold billions of dollars that are neoded to help
win this war.

I know that millions - more than 23,000,000 -

are already buying war bonds out of their regular pay every payday
But there are other millions of pi^mrte investors, corporations,
custodians of trust funds and estates, who have idle money in the
bank.

That money has got to go to work for our country.

Ve

have got to make our dollars fighting dollars .by investing them
in government bonds.

The new Victory Loan gives

oecfetarj

us a chance

N IDj}fcC6£
to make those dollars fight."

governs
Mài»,

(
jcretary Morgenthau bold
C&&<
to be borrowed in Decamber
that the $9,000,000,000^willbe the biggest amount of monqr ever
raised by any government in such a short time.

'*m: oi

jilt

Almost 50,000

Bests:
% fmi ft

professional salesmen from the banking, securities and insurance
f

f i e M ^ r e going to sell the bonds, mostly as a patriotic service
without aKpaanpaa# pay, he said.

Pfeli!
■retaci ;
Ì ft.

men are organized,HMr. Morgenthau announced,
il, I
“in the Victory Fund Committees in all parts of the country.

They’ve

been trained all their lives to reach the people who have accumulated
-eav4ngs and idle funds, and those are the people we want to reach

I

p

TREASURY DEPARTMENT
Washington
FOR RELEASE MORNING NEWSPAPERS,
Monday, November 30, 1942
11/28/42

Service
No. 34-34:

r r ess

President Roosevelt today sent off to a flying start the
Victory Fund Drive of the United States Treasury, which will
raise $9,000,GOO,QQG in borrowed funds to meet the costs of the
greatest war in history,

The first $1,000 bond of the Victory

Loan was purchased by the President from Secretary Morgenthau.
,fIt is one of our jobs here at home,n Mr, Roosevelt said,
11to provide the untold billions of dollars that are needed to
help win this war* I know that millions - more than 23,000,000 are already buying war bonds out of their regular pay every pay­
day, But there are other millions of individual investors, cor­
porations, custodians of trust funds and estates, who have idle
money in the bank. That money has dot to go tc Work for our
country. We have got to make our dollars fighting dollars by
investing them in Government bonds. The new Victory Loan gives
us a chance to make those dollars fight,”
Secretary Morgenthau said that the $-9,000,000,000 .to be bor­
rowed in December will be the biggest- amount of money ever raised
by any government in such -a short time, Almost 50,000 profes­
sional sales men from; the banking, securities and insurance
fields are going to sell the bonds, mostly as a patriotic service
without pay, ho said.
nThese men are organised,” M r .. Morgenthau announced, ”in the
Victory Fund Committees in all parts of the country. They’ve
been trained all their lives to reach the people who have ac­
cumulated balances and idl-e' funds, and those are the people we
want to reach in this Victory Loan prive. These bonds, at $500
and up, are the ideal inv os tm on t f or th em . n
■ Concurrently with the December drive, Treasury officials^
said today, the 300,000 volunteers of- the War Savings Staff will
intensify their•efforts to add at least 7,000,000 more incomeearners to the 23,000,000 who already are investing regularly in

- 2 -

Series E War Savings Bonds through the payroll savings program.
Most of the funds, however, will be raised through activities of
the Victory fund Committee.
These groups, organized in each Federal Reserve District,
are responding with utmost enthusiasm to the program. They are
scanning their lists of prospects and. in some cases are forming *
competitive teams to stimulate sales. The district committees
are headed in every case by .the president of the respective. Fed­
eral Reserve Bank.
As part of the Victory Fund Activities, the commercial banks
of the country also have been enlisted in the drive through the
American Bankers Association. Also in the network are the stock
exchanges of the country, the Investment Bankers Association, and
the National Association of Securities Dealers., Bond clubs in
all financial centers are adding to the effort.
Secretary Morgenthau has sent a message to every salesman
of the Victory Fund Committees, in which he said that the Amer­
ican public is being asked to invest $9,000,000,000 in victory
and in freedom,” The funds will be the medium through which the
men on the battlefields receive their supplies, he said, adding
that those who are engaged in the campaign are ”contributing a
high service to the war effort.” This task well done, the
Secretary said, ’’will bring satisfaction to us all and assurance
to those In battle.”
The Victory Fund Drive will continue for several weeks and
has for its aim a wide public participation in the interest of
sound Treasury financing out of current income and savings. It
is contemplated that less than half the $9,000,000,000 will be
raised from commercial banks.
Since the Treasury is borrowing an unprecedented sum in
December, the program calls for longer Intervals between loan
flotations. The expectation is that no further financing will
develop, after completion of the current program, until February*
with the exception of the continuing sales of tax savings notes,
savings bonds and Treasury bills.
The principal security to be sold during the drive is called
the ’’Victory two-and-one-halfs.” These bonds, due December lb,
1968 and callable December 15, 1963, will not be sold to commer­
cial banks, but sales to individual investors, corporations', in­
stitutions.and others will be unlimited*

- K
oJ

The 2-1/2 percent Treasury- 'Bonds of 1963-68 will be dated
December 1, 1942 and will bear interest from that date at the
rate of 2-1/2 percent per annum payable semiannually, with the
first payment due June 16* 1043♦ The bonds will mature December
15, 1068 but may be redeemed, at the. option of the United States,
on and after December 15, 1963. Coupon bonds and bonds regis­
tered both as to principal and interest will be issued in denom­
inations of $500, $1,000* $5,000, $10,000 and $100,000, and in
the denomination of $1,000,000 lor registered bonds only. These
bonds will not be available for subscription by commercial banks,
nor may they be transferred to or held by such banks for their
own account before December 1, 1952. The bonds may be pledged
as
collateral
for loans,
including loans byL commercial
banks,7 but
____
T
1
1
•
♦
^ * __
any such banks ^acquiring the bonds because of failure of such
loans to be paid at ma tu^'ity will be required to dispose of them
in the same manner as they dispose of other a set s not eligible
to be owned by banks, Any bonds of this series, which upon the
death of the owner const tute part of hi estate, will be re­
deemed at the option of the duly constituted representatives of
the deceased owner's estate at par and accrued interest, con­
ditioned on the application of the entire proceeds of redemption
to the payment of Federal estate taxes.
|
The 1-3/4 percent Treasury' Bonds of 1948 will be dated
December 1, 1942 and will bear interest from that date at the
rate of 1-3/4 percent per annum payable semiannually with the
first payment due June 15, 1943. The bonds will mature June 15,1948 and may not be called for redemption before maturity. Cou­
pon bonds and bonds registered both as to principal and interest
will be issued in denominations of $500, $1,000, $5,000, $10,000
and $100,000, and in the denomination of $1,000,000 for regis­
tered bonds only.
The 7/8 percent Treasury Certificates of Indebtedness of
Series £-1943 will be dated December 1, 1942, will be payable on
December 1, 1943, and will bear Interest at the rate of 7/8 per­
cent per annum payable semiannually* They will be issued in.
bearer form only with two coupons attached in the denominations
of $1,000, $5,000, $10,000 and $100,000.
Pursuant to the provisions of the Public Debt Act of 1941,
interest upon the bonds and certificates now offered shall not
have any exemption as such under Federal Tax Acts now or herein­
after enacted. The full provisions relating to taxability are
set forth In the official circulars issued today,

- 4 ^Subscriptions for both issues of bonds and for the issue of
certificates will be received at the Federal Reserve Banks and
Branches, and at the Treasury Department, Washington# Banking
institutions and securities dealers'generally may submit subscriptions for account of customers but only the Federal Reserve
Banks and the Treasury Department are authorized to act as offi­
cial agencies. Subscribers must agree not to sell or otherwise:,
dispose of their subscriptions or the securities allotted before
December 3 in the case of the 1-3/4 percent bonds, or before
December 19 in the case of the certificates. Subscriptions from
banks and trust companies for their own account for the 1-3/4
percent bonds and the certificates during the specified periods
will be received without deposit, and payment at par and accrued
interest to December 11, 1942 for 1-3/4 percent Treasury bonds
allotted, and to December 28, 1942 for certificates allotted
must be made on such respective dates. Subscriptions from all
others must be accompanied by payment*in full, at par and ac­
crued interest from December 1 to the date payment is available
in a Federal Reserve Bank or the Treasuryr for the amount of
bonds or certificates applied for. One da y’s accrued interest
on 2-1/2 percent Treasury Bonds of 1963-68 is $0,068, on 1-3/4
percent Treasury Bonds of 1948 is $0,048, and on 7/8 percent
Treasury Certificates of Indebtedness of Series E-1943 is $0,024
per $1,000.
The texts of the official circulars follow:

UNITED STATES OF ‘AMERICA
'

2 - 1 /2 PERCENT TREASURY BONDS OF. 1963-60

Dated and b e a rin g in t e r e s t from December

3*942

Due, December 15* 1968

REDEEMABLE AT THE OPTION OF THE UNITED STATES- AT PAR AND ACCRUED INTEREST ON AND

AFTER DECEMBER 15* 1963
In t e r e s t p a y a b le June 15 and December 15

TREASURY DEPARTMENT*
O ffic e o f th e S e c re ta ry ,
Washington, November 30*1942*

1942
Departm ent C ir c u la r No* 70 1
F is c a l S e rv ic e
Bureau o f th e P u b lic Debt
1«

I.

OFFERING OF BONDS

The S e c re ta ry o f th e T re a s u ry , p u rsu a n t to th e a u t h o r it y o f th e Second

L ib e rt y Bond A c t, as amended, in v it e s s u b s c r ip t io n s , a t p a r and a ccru e d in t e r e s t ,
from th e p eo p le o f th e U n ite d S ta te s f o r bonds o f th e U n ite d S ta te s , d e sig n a te d
2-AL./2 p e rc e n t T re a s u ry Bonds o f 1963—6 8 .

These bonds w i l l not be a v a ila b le f o r sub-*

s c r ip t io n , f o r t h e ir owp a c c o u n t, by com m ercial b a n k s, w hich a re d e fin e d f o r t h is
purpose a s banks a c c e p tin g demand d e p o s it s .

The amount o f th e o f f e r in g i s not

s p e c if ic a lly lim ite d *
II.
1.

DESCRIPTION OF BONDS

The bonds w i l l be dated December 1 , 19 4 2 , and w i l l b e a r in t e r e s t from th a t

date a t th e ra t e o f 2 - 1 /2 p e rc e n t p e r annum, p a y a b le on a sem ian n u al b a s is on June
15 and. December 1 5 , 19 4 3, and t h e r e a f t e r on June 15 and December 15 in each y e a r
u n t il th e p r in c ip a l amount becomes p a y a b le .

They w ill m ature December 15* 19 6 8 ,bu t

may be redeemed a t th e o p tio n o f th e U n ite d S ta te s on and a f t e r December 1 5 , 19 o 3,
in w hole o r in p a r t , a t p a r and a c c ru e d in t e r e s t , on any in t e r e s t day o r d a y s, on 4
|months* n o tic e o f redem ption g iv e n in such m anner as th e S e c re ta ry o f th e T re a s u ry
s h a ll p r e s c r ib e .

In ca se o f p a r t ia l redem ption th e bonds to be redeemed w il l be

' determ ined b y such method As may be p re s c rib e d by th e S e c re ta ry o i th e T re a s u ry .

2 From th e date o f redem ptio n d e sig n a te d in any such n o t ic e , in t e r e s t on th e bonds
c a lle d f o r redem ption s h a ll cease#
2.

The incom e d e riv e d from th e bonds s h a ll be s u b je c t to a l l F e d e ra l t a x e s ,

now o r h e re a ft e r Im posed,

The bonds s h a ll be s u b je c t to e s t a t e , in h e r it a n c e , g if t

or o th e r e x c is e t a x e s , w heth er F e d e ra l o r S ta te , b ut s h a ll be exempt from a l l ta x a ­
tio n now o r h e r e a ft e r im posed on th e p r in c ip a l o r in t e r e s t th e re o f by an y S ta te ,
o r any o f th e p o s s e s s io n s o f th e U n ite d S t a t e s , o r by any lo c a l t a x in g a u t h o r it y ,
3,

The bonds w i l l n o t be a c c e p ta b le to se c u re d e p o s its o f p u b lic moneys be­

fo re December 1 , 19 5 2 ; th e y w i l l n o t b e a r th e c ir c u la t io n p r iv ile g e , and th e y w i l l
not be e n t it le d to any p r iv ile g e o f co n ve rsio n *
4*

B e a re r bonds w ith in t e r e s t coupons a tta c h e d w i l l be is s u e d in d en o m in atio ns

of $500, $ 1 ,0 C 0 , $5>000, $ 10 ,0 0 0 and $ 1 0 0 ,0 0 0 ,

Bonds re g is t e r e d a s to p r in c ip a l and

in t e re s t w i l l be is s u e d in den o m in atio ns o f $ 500 , $ 1 ,0 0 0 , $ 5 ,0 0 0 , $ 1 0 ,0 0 0 , $ 100,000
and $ 1 ,0 0 0 ,0 0 0 ,

P r o v is io n w i l l be made f o r th e in te rc h a n g e o f bonds o f d if f e r e n t

denom inations and o f coupon and r e g is t e r e d bo nd s, and f o r th e t r a n s f e r o f re g is t e re d
;bonds, u n d e r r u le s and re g u la tio n s p re s c rib e d by th e S e c re ta ry o f th e . T re a s u ry ,
bxcept th a t th e y may n o t, b e fo re December 1 , 19 5 2 , be t ra n s fe rr e d to o r be h e ld by.
[commercial b a n k s, w hich a re d e fin e d , f o r t h is p u rp o se , a s banks a c c e p tin g demand
d e p o sits.

How ever, th e bonds may be ple d g ed a s c o lla t e r a l f o r lo a n s , in c lu d in g

p a n s by com m ercial b a n k s, b ut any su ch bank a c q u ir in g such, bonds b e fo re Docera|e r 1 , 19 5 2 , b e c a u se .o f th e f a ilu r e o f such lo a n s to be p a id a t m a tu rity w il l be
required to d isp o se o f them in th e same manner a s th e y d isp o se o f o th e r a s s e ts
fot e lig ib le to be owned by b a n k s,
5,

Any bonds is s u e d h ereu n d er w hich upon th e d eath o f th e owner c o n s t it u t e

(art o f h is e s t a t e , w il l be redeemed a t th e o p tio n o f th e d u ly c o n s titu te d re p re ­
sen tative s o f th e deceased ow ner’ s e s t a t e , a t p a r and a ccru e d in t e r e s t to date o f

1

a

paym ent,

- 3 P ro v id e d :
(a ) th a t th e bonds were a c t u a lly owned by th e decedent a t th e
tim e o f h is d e a th ; and
(b ) th a t th e S e c re ta ry o f th e T re a s u ry be a u th o riz e d to a p p ly
th e e n t ir e p ro cee d s o f redem ption to th e payment o f F e d e ra l
e s ta te t a x e s .

! R e g iste re d bonds su b m itte d f o r redem ption h e re u n d e r m ust be d u ly a s s ig n e d to "The
S e c re ta ry o f th e T re a s u ry f o r re d e m p tio n , th e p ro cee d s to be p a id to th e C o lle c t o r
j o f In t e r n a l Revenue a t

•

l from e s ta te o f ___________

f o r c r e d it on F e d e ra l e s t a t e ta x e s due
."

Owing to th e p e r io d ic c lo s in g o f th e t r a n s -

I f e r books and th e im p o s s ib ilit y o f sto p p in g payment o f in t e r e s t to th e re g is t e r e d
lo w e r d u rin g th e c lo s e d p e rio d , r e g is t e r e d bonds re c e iv e d a f t e r th e c lo s in g o f th e
[books f o r payment d u rin g such c lo s e d p e rio d w i l l be p a id o n ly a t p a r w ith a de~
d u ctio n o f in t e r e s t from th e d a te o f payment to th e n e xt in t e r e s t payment d a te ;
(bonds re c e iv e d d u rin g th e c lo s e d p e rio d f o r payment a t a date a f t e r th e books re —
lopen w i l l be p a id a t p a r p lu s a c c ru e d in t e r e s t from th e re o p e n in g o f th e books to
the d ate o f paym ent.

In e it h e r ca se ch ecks f o r th e f u l l s ix months in t e r e s t due

on the la s t day o f th e c lo s e d p e rio d w i l l be fo rw ard e d to th e owner in due c o u rs e ,

it

[A ll bonds su b m itted must be accom panied by Form PD 1 7 8 2 ,

p ro p e rly co m p leted , sig n e d

land sw orn t o , and by a c e r t if ic a t e o f th e appointm ent o f th e p e rs o n a l re p re s e n ta ­
t iv e s , u n d e r s e a l o f th e c o u rt , d ated not more th a n 6 months p r io r to th e subm is nsion o f th e b o n d s, w hich s h a ll show th a t a t th e d a te th e re o f th e appointm ent was
¡ ¡ ¡ t i l l in fo rc e and e f f e c t .

Upon payment o f th e bonds a p p ro p ria te memorandum re ­

c e ip t w i l l be fo rw ard e d to th e re p r e s e n t a t iv e s , w hich w i l l be fo llo w e d in due
course by fo rm a l re c e ip t from th e C o lle c t o r o f In t e r n a l Revenue.
i i / An e x a ct h a lf-y e a r* s in t e r e s t i s computed f o r each f u l l h a lf - y e a r p e rio d i r r e ­
s p e c tiv e o f th e a c t u a l number o f days in th e ' h a lf y e a r. F o r a f r a c t io n a l p a rt o f
|ny h a lf y e a r, com putation i s on th e b a s is o f th e a c t u a l number o f days in such
fpalf y e a r.
1/ The t r a n s f e r books a re c lo s e d from May 16 to
15* and from November 16 to
December 15 (b o th d a te s in c lu s iv e ) ii»
y / C o p ies o f Form PD 178 2 may be o b ta in e d from any F e d e ra l R eserve Bank o r from
the T re a su ry D epartm ent, W ash in g to n , D, C.
W
It:

— 4
6»

E xce p t a s p ro v id e d in th e p re c e d in g p a ra g ra p h s, th e bonds- v i l l i be sub­

je c t to th e g e n e ra l r e g u la t io n s o f th e T re a s u ry D epartm ent, now o r h e r e a ft e r p re ­
s c rib e d , g o v e rn in g U n ite d S ta te s bonds.

III. SUBSCSOPTIOIT AND ¿LLOTLENT /
1,

S u b s c rip tio n s w i l l be re c e iv e d a t th e F e d e ra l R e s e rv e ' .Banks „and B ran ches

and a t th e T re a s u ry D epartm ent, W ashington#

B an kin g in s t it u t io n s and s e c u r it ie s

d e a le rs g e n e r a lly may subm it s u b s c rip t io n s f o r a cco u n t o f cu sto m e rs, bu t o n ly th e
F e d e ra l R e se rve Banks and th e 'T re a s u ry D epartm ent a re a u th o riz e d to a c t a s 'o f f i­
c ia l a g e n c ie s .

S u b s c rip tio n s must be accom panied by payment in f u l l f o r th e

amount o f bonds a p p lie d fo r*
2.

The S e c re ta ry o f th e T re a s u ry re s e rv e s th e r ig h t t o ,r e je c t any s u b s c rip ­

t io n , in w hole o r in p a r t , to a l lo t le s s th a n th e amount o f bonds a p p lie d f o r , and
to c lo s e th e books a s to any o r a ll's u b s c r ip t io n s cat.any tim e w ith o u t n o t ic e ; and
a n y -a c tio n he may ta k e in th e se re s p e c ts s h a ll be f in a l*
t io n s , a l l s u b s c rip t io n s w il l be a llo t t e d in f u l l . ,

S u b je c t.to th e se re s e rv a ­

A llo tm en t, n o tic e s w il l be se n t

out p ro m p tly upon a llo tm e n t*

IV,
1.

payment

•

Payment a t p a r and a c c ru e d in t e r e s t , i f . a n y , f o r bonds, a llo t t e d h ereu n d er

must be made on. o r b e fo re D o a ^ f c r 1 , 19*42, o r on la t e r a llo tm e n t.
a ccru e d in t e r e s t i s $0*068 p e r $1,000*

One d a y ’ s

Any q u a lif ie d -d e p o sita ry w i l l be p e rm itte d

to make payment by c r e d it f o r bonds a llo t t e d to i t s custom ers ‘pp to any amount f o r
jw hich i t s h a ll be q u a lif ie d in e x ce ss o f e x is t in g d e p o s it s , w hen'so n o t if ie d by
the F e d e ra l R e se rve Bank.--of i t s D is t r ic t *

V• GhNnRaL rRO‘
/ISXOUS
I

1*

As f i s c a l a g e n ts o f th e U n ite d S ta te s , F e d e ra l R e serve Banks a re a u th o r—

jiz e d ana re q u e s te d .to re c e iv e s u b s c r ip t io n s , to make a llo tm e n ts up tp the.am ounts
in d ic a te d by th e S e c re ta ry o f th e T re a s u ry to th e F e d e ra l R e se rve Banks o f th e '

re s p e c tiv e D is t r ic t s , to is s u e a llo tm e n t n o t ic e s , to re c e iv e payment f o r bonds
a llo t t e d , to make d e liv e r y o f bonds on f u ll- p a id s u b s c rip tio n s a llo t t e d , and
th e y may is s u e in t e rim r e c e ip t s p e n d in g d e liv e r y o f th e d e f in it iv e bonds*
2f

The S e c re ta ry o f th e T re a s u ry may a t an y tim e , o r from tim e to tim e ,

p re s c rib e su p p le m en ta l o r am endatory r u le s and re g u la tio n s g o v e rn in g th e o f f e r ­
in g , w hich w i l l be com m unicated p ro m p tly to th e F e d e ra l R e serve Banks*

HENRY MCRCOTHMJ, J R .,
S e c re ta ry o f th e T re a s u ry .

UNITED STATES OF AMERICA
1-3/4 PERCENT TREASURY BONDS OF 1948
Due June 15, 1948

Dated and bearing interest from December 1, 1942
Interest payable June 15 and December 15

TREASURY -DEPARTMT,
Office of Hie Secretary,
Washington, November 30, 1942,

1942
Department Circular No,. 702

Fiscal Service
Bureau of the Public Debt
I,
!♦

OFFERING OF BONDS

The Secretary of the Treasury, pursuant to the authority of the Second

¡Liberty Bond Act, as amended, invites subscriptions, at par and accrued interest,
¡¿from the people ©f the United States for bonds of the United States, designated
1-3/4 percent Treasury Bonds of 1948.

The amount of the offering is not specifi­

cally limited, although allotments to commercial banks, which are defined for this
purpose as banks accepting demand deposits, for their .own account will be limited
¡bo 12,000,000,000, or thereabouts.

The books will be open today and until further

ijiotice for the receipt of subscriptions from others than commercial banks for their
|bwn account, and today, December 1 and December 2 for the receipt of subscriptions
from comercial banks for their own account.
II.
1.

DESCRIPTION OF BONDS

The bonds will be dated December 1, 1942, and will bear interest from

(hat date at the rate of 1-3/4 percent per annum, payable on a semiannual basis on
june 15 and December 15, 1943, and thereafter on June 15 and December 15 in each
¡[ear until the principal amount becomes payable.

They will mature June 15, 1948,

pd will not be subject to call for redemption prior to maturity.
2.

The income derived from the bonds shall be subject to all Federal taxes,

¡tow or hereafter imposed.

The bonds shall be subject to estate, inheritance, gift

- -2 ¡o r o th e r e x c is e t a x e s , w hether F e d e ra l o r S ta te , but s h a ll be exempt from a l l ta x a ­
t i o n now o r h e re a ft e r im posed on th e p r in c ip a l o r in t e r e s t th e re o f by an y S ta te ,
i or any o f th e p o s s e s s io n s o f th e U n ite d S ta te s , o r by any lo c a l t a x in g a u t h o r it y .
3.

The bonds w i l l be a c c e p ta b le to se c u re d e p o s its o f p u b lic m oneys, bu t w i l l

[not b e a r th e c ir c u la t io n p r iv ile g e and w i l l n o t be e n t it le d to any p r iv ile g e o f
¡ic o n v e rsio n .
4,

B e a re r bonds w ith in t e r e s t coupons a tta c h e d w i l l be is s u e d in den o m in atio ns

pf $ 50 0 , $ 1 ,0 0 0 , $ 5 ,0 0 0 , $ 10 ,0 0 0 and $ 10 0 ,0 0 0 ,

Bonds re g is t e r e d a s to p r in c ip a l

ijand in t e r e s t w i l l be is s u e d in d en o m in atio ns o f $ 50 0 , $ 1 ,0 0 0 , $ 5 ,0 0 0 , $ 1 0 ,0 0 0 ,
¡$100,000 and $ 1 ,0 0 0 ,0 0 0 .

P r o v is io n w i l l be made f o r th e in te rc h a n g e o f bonds o f

¡¡d iffe re n t d en o m in atio n s and o f coupon and re g is t e r e d bo nd s, and f o r th e t r a n s f e r
Hof re g is t e r e d b o n d s, u n d e r r u le s and re g u la tio n s p re s c rib e d by th e S e c re ta ry o f
ithe T re a s u ry .
5#

The bonds w i l l be s u b je c t to th e g e n e ra l re g u la tio n s o f th e T re a s u ry

¡¡Department, now o r h e re a ft e r p r e s c r ib e d , g o v e rn in g U n ite d S ta te s bonds.
III.
1,

SUBSCRIPTION AND ALLOTMENT

S u b s c rip tio n s w i l l be re c e iv e d a t th e F e d e ra l R e serve Banks and B ranches

¡and a t th e T re a su ry D epartm ent, W ash ing ton,

S u b s c rib e rs m ust ag ree not to s e l l o r

O therw ise d isp o se o f t h e ir s u b s c r ip t io n s , o r o f th e s e c u r it ie s w hich may be a llo t t e d
thereon, p r io r to December 3 , 1942*

B an kin g in s t it u t io n s and s e c u r it ie s d e a le rs

g e n e ra lly may subm it s u b s c rip t io n s f o r a cco u n t o f cu sto m e rs, b ut o n ly th e F e d e ra l
p s e rv e Banks and th e T re a s u ry Departm ent a re a u th o ris e d to a c t a s o f f i c i a l a g e n c ie s.
I
Others th a n b a n k in g in s t it u t io n s and s e c u r it ie s d e a le rs w i l l n o t be p e rm itte d to
¡p t e r s u b s c rip t io n s exce p t f o r t h e ir own a c c o u n t.

S u b s c rip tio n s from com m ercial

’tanks f o r t h e ir own a cco u n t w i l l be re c e iv e d w ith o u t d e p o s it.

A l l o th e r s u b s c r ip -

Uons must be accom panied by payment in f u l l f o r th e amount o f bonds a p p lie d f o r .
2.

The S e c re ta ry o f th e T re a s u ry re s e rv e s th e r ig h t to r e je c t any s u b s c rip —,

lio n , in w hole o r in p a r t , t o a l lo t le s s th a n th e amount o f bonds a p p lie d f o r , and

to close the books as to any or all subscriptions at any time without notice; and
any action he may take in these respects shall be final.

Subject to these reserva­

tions, subscriptions for amounts up to and including $100,000 from commercial banks,
and subscriptions in any amount from all other subscribers, will be allotted in
full; subscriptions for amounts over $100,000 from commercial banks will be allotted
:#n an equal percentage basis, to be publicly announced.

Allotment notices will be

sent out promptly upon allotment.
IV.
1.

PABMT

Payment at par and accrued interest, if any, for bonds allotted hereunder

to or for the account of others than commercial banks must be made on or before
December 1, 1942, or on later allotment.

Payment at par and accrued interest to

|¡December 11, 1942, for-bonds allotted hereunder to commercial banks must be made
Hon that date.

One day* 3 accrued interest is $0,048 per $1,000,

Any qualified

jdepositary will be permitted to make payment by credit for bonds allotted to it
¡[for itself and its customers up to any amount for which it shall be qualified in
Hexcess of existing deposits, when so notified by the Federal Reserve Bank of its
j(District.
V.
1.

GENERAI PROVISIONS

As fiscal agents of the United States, Federal Reserve Banka are author­

ized and requested to receive subscriptions, to make allotments on the basis and
¡up to the amounts indicated by the Secretary of the Treasury to the Federal Reserve
Banks of the respective Districts, to issue allotment notices, to receive payment
for bonds a llo t t e d , to make delivery of bonds on full-paid subscriptions allotted,
llnd they may issue interim receipts pending delivery of the definitive bonds.
2.

The Secretary of the Treasury may at any time, or from time to time, pre-

,
¡scribe supplemental or amendatory rules and regulations governing the offering,
Which will be communicated promptly to the Federal Reserve Banks.
HENKT M0RGENTHAU, JR.,
Secretary of the Treasury.

UNITED STATES CF AMERICA

DUO

D ated and b e a rin g in t e r e s t from December 1 , 1942

X9A2
Departm ent C ir c u la r Mo* 70 3

4. ,

-*»9^3

TREASUHT DEPARTMENT,
O ffic e o f th e S ecretary,»
W ashington, November 3 0 , 1942*

F is c a l S e rv ic e
B ureau o f th e P u b lic Debt
I.
1*

OFFERING OF CERTIFICATES

The S e c re ta ry o f th e T re a s u ry , p u rsu a n t to th e a u t h o r it y o f th e Second

L ib e rt y Be»»d A c t, a s amended, in v it e s s u b s c r ip t io n s , a t p a r and a ccru e d in t e r e s t ,
from th e p e o p le o f th e U n ite d S ta te s f o r c e r t if ic a t e s o i in d e b te d n e ss o f th e
U n ite d S ta te s , d e sig n a te d 7 /8 p e rc e n t T re a s u ry C e r t if ic a t e s o f In d e b te d n e ss o f
S e rie s E -1 9 4 3 .

The amount o f th e o f f e r in g i s not s p e c if ic a lly lim it e d , a lth o u g h

a llo tm e n ts to com m ercial b a n k s, w hich a re d e fin e d f o r t h is purp o se a s banks
a c c e p tin g demand d e p o s it s , f o r t h e ir own a cco u n t w il l be lim it e d to $ ¡2 ,0 0 0 ,0 0 0 ,0 0 0 ,
o r th e re a b o u ts .

The books w i l l be open to d a y and u n t il f u r t h e r n o tic e f o r th e

re c e ip t o f s u b s c rip t io n s from o th e rs th a n com m ercial banks f o r t h e ir own a c c o u n t,
and on December 1 6 , December 17 and December 18 io r th e re c e ip t o f s u b s c rip t io n s
from com m ercial banks f o r t h e ir own a c c o u n t,
II.
1*

DESCRIPTION OF CERTIFICATES

The c e r t if ic a t e s w i l l be d ated December 1 , 19 4 2, and w i l l b e a r in t e r e s t

from th a t d ate a t th e ra te o f 7 /8 p e rc e n t p e r annum, p a y a b le se m ia n n u a lly on
June 1 and December 1 , 1943*

They w i l l m ature December 1 , 1943> ar*d w i l l not be

s u b je c t to c a l l f o r redem ption p r io r to m a tu rity .
2.

The incom e d e riv e d from th e c e r t if ic a t e s s h a ll be s u b je c t to a l l F e d e ra l

ta x e s , now o r h e re a ft e r im posed.

The c e r t if ic a t e s s h a ll be s u b je c t to e s t a t e ,

|in h e r it a n c e , g if t o r o th e r e x c is e t a x e s , w hether F e d e ra l o r S ta te , but s h a ll be
I exempt from a l l t a x a t io n now o r h e re a ft e r im posed on th e p r in c ip a l o r in t e r e s t
; th e re o f by an y S ta te , o r any o f th e p o s s e s s io n s o f th e U n ite d S ta te s , o r by an y
lo c a l t a x in g a u t h o r it y .

Y

- 2 3.

The c e r t if ic a t e s w i l l be a c c e p ta b le to se c u re d e p o s its o f p u b lic moneys.

They w i l l not be a c c e p ta b le in payment o f ta x e s and w i l l n o t b e a r th e c ir c u la t io n
p r iv ile g e ,
4,

B e a re r c e r t if ic a t e s w ith two in t e r e s t coupons a tta c h e d w i l l be is s u e d in

denom inations o f $1,000* $>5,000, $ 10 ,0 0 0 and $ 10 0 ,0 0 0 ,

The c e r t if ic a t e s w i l l not

be is s u e d in re g is t e r e d fo rm .
5,

The c e r t if ic a t e s w i l l be s u b je c t to th e g e n e ra l re g u la tio n s o f th e T re a s­

u ry D epartm ent, now o r h e re a ft e r p r e s c r ib e d , g o v e rn in g U n ite d S ta te s c e r t if ic a t e s ,
III,
1,

SUBSCRIPTION AND ALLOTMENT

.

S u b s c rip tio n s w i l l be re c e iv e d a t th e F e d e ra l,R e s e rv e Banks and B ran ches

and a t th e T re a s u ry D epartm ent, W ashington.

S u b s c rib e rs m ust a g re e not to s e l l o r

o th e rw ise d isp o se o f t h e ir s u b s c r ip t io n s , o r o f th e s e c u r it ie s w hich may be
a llo t t e d th e re o n , p r io r to December 1 9 , 19 4 2,

B an kin g in s t it u t io n s and s e c u r it ie s

d e a le rs g e n e r a lly may subm it s u b s c rip t io n s f o r acco u n t o f cu sto m e rs, b ut o n ly th e
F e d e ra l R e serve Banks and th e T re a s u ry Departm ent a re a u th o riz e d to a c t a s o f f i c i a l
a g e n c ie s .

O th ers th a n b a n k in g in s t it u t io n s and s e c u r it ie s d e a le rs w i l l not be p e r­

m itte d to e n te r s u b s c rip t io n s exce p t f o r t h e ir own a c c o u n t.

S u b s c rip tio n s from com­

m e rc ia l banks f o r t h e ir own a cco u n t w i l l be re c e iv e d w ith o u t d e p o s it.

A l l o th e r

s u b s c rip tio n s must be accom panied by payment in f u l l f o r th e amount o f c e r t if ic a t e s
a p p lie d f o r ,
2,

The S e c re ta ry o f th e T re a s u ry re s e rv e s th e r ig h t to r e je c t an y s u b s c rip ­

t io n , in w hole o r in p a r t , to a llo t le s s th a n th e amount o f c e r t if ic a t e s a p p lie d
f o r , and to c lo s e th e books a s to any o r a l l s u b s c rip t io n s a t any tim e w ith o u t
n o tic e J and any a c tio n he may ta k e in th e se re s p e c ts s h a ll bo f in a l .

S u b je c t t o

th ese r e s e r v a t io n s , s u b s c rip t io n s f o r amounts up to and in c lu d in g $ 10 0 ,0 0 0 from com­
m e rc ia l b a n k s, and s u b s c rip t io n s in an y amount from a l l o th e r s u b s c r ib e r s , w i l l be
a llo t t e d in f u l l ; s u b s c rip t io n s f o r am ounts o v e r $ 10 0 ,0 0 0 from com m ercial banks w ill
be a llo t t e d on an e q u a l p e rce n tag e b a s is , to be p u b lic ly announced.
n o tic e s w i l l be se n t out p ro m p tly upon a llo tm e n t.

A llo tm e n t

- 3 IV 1*

PAYMENT

Payment a t p a r and a c c ru e d in t e r e s t , i f a n y , f o r c e r t if ic a t e s a llo t t e d

h ereu n d er to o r f o r th e a cco u n t o f o th e rs th an com m ercial banks m ust be made on
o r b e fo re December 1 , 19 4 2, o r on la t e r a llo tm e n t.

Payment a t p a r and a ccru e d

in t e r e s t to December 2 8 , 19 4 2, f o r c e r t if ic a t e s a llo t t e d h ereu n d er to com m ercial
banks must be made on th a t d a te .

One d a y ’ s a ccru e d in t e r e s t i s $ 0 ,0 2 4 p e r $ 1,0 0 0

Any q u a lif ie d d e p o s ita ry w i l l be p e rm itte d to make payment by c r e d it f o r c e r t i f i ­
c a te s a llo t t e d to i t f o r i t s e l f and i t s custom ers up to any amount f o r w hich i t
s h a ll be q u a lif ie d in e x c e ss o f e x is t in g d e p o s it s , when so n o t if ie d by th e F * w i\
RwO^rve E-.nl; o f i t s D is t r ic t ,
V.
1*

GENERAL PROVISIONS

Aw f i s c a l a g e n ts o f th e D ie te d S ta te s , Fv,av.rul liA porvo Banks a re a u th o r­

iz e d and re q u e ste d to re c e iv e s u b s c r ip t io n s , to make a llo tm e n ts on th e b a s is and
up to th e am ounts in d ic a te d by th e S e c re ta ry o f th e T re a s u ry t o th e Fw d o ral Re­
se rv e E-wiks o f th e re s p e c t iv e D is t r ic t s , to is s u e a llo tm e n t n o t ic e s , to re c e iv e
payment f o r c e r t if ic a t e s a llo t t e d , to make d e liv e r y o f c e r t if ic a t e s on f u ll- p a id
s u b s c rip tio n s a llo t t e d , and th e y may is s u e in t e rim r e c e ip t s p en d in g d e liv e r y o f
the d e f in it iv e c e r t if ic a t e s ,
2.

The S e c re ta ry o f the Tiv<~sury may a t any tim e , o r from tim e to tim e , p re ­

s c r ib e su p p le m en ta l o r am endatory r u le s and re g u la tio n s g o v e rn in g th e o f f e r in g ,
w hich w i l l be com m unicated p ro m p tly to th e F e d e ra l Rvso*va B an ks,

HENRY IcORGENTHAU, JF u ,
Sw0r o
f
th e T± m om y •

It was further pointed out that in intermittent employment - as
in seasonal occupations - it is not necessary to furnish the statement
with each cessation or interruption of work, if no termination of em­
ployment has occurred.

Termination of employment is a fact governed

by the intentions of the parties, and for the purpose of compliance
with section 469, in cases where work is intermittent, if there is
reasonable expectation on the part of both the employer and the em­
ployee of further employment, the statement may,be furnished at the
time of actual termination, or within thirty days thereafter.

If,

however, such expectation does not exist on the part of either party,
then employment has terminated and a statement must be furnished within
thirty days from the last wage payment.

TREASURY DEPARTMENT
Washington
EOR TMviT^nThto phït.tsartïî _

P ress S e rv ice
no.

In response to the many in q u ir ie s from employers regard ing the
requirements o f s e c tio n 469 o f the In te r n a l Revenue Code, as added
by the Revenue A ct o f 1942, r e la t in g to the fu r n is h in g o f statem ents
o f V ic to r y

today announced the fo llo w in g

r u lin g :
"An extension o f tim e, not exceeding t h ir t y days,
w ith in which to fu rn ish the statem ent required by sec­
tio n 469(a) is granted any employer w ith resp ect to any
employee whose employment i s term inated during the c a l­
endar y e a r. In the case o f in te rm itte n t or in terru p ted
employment where there i s reasonable ex p ectatio n on the
part o f both employer and employee o f fu rth e r employ­
ment, there is no requirement th a t a statem ent be immedi­
a t e ly furn ished the employee; but when such ex p ectatio n
ceases to e x i s t , the statement must be furn ished w ith in
t h ir t y days from th a t tim e .”
The s e c tio n re fe rre d to req u ires t h a t , in cases where the employ­
ment i s term inated before the c lo s e o f the calen d ar y ea r, the statement
o f V ic to r y Tax w ithheld be furn ished the employee w ith the l a s t payment
o f h is wages, but an extension o f time not exceeding t h i r t y days may be
granted under appropriate r e g u la tio n s .

As the statem ents must contain

pay r o l l and other data fo r the period o f employment, i t is fre q u e n tly
d i f f i c u l t to prepare such statem ents in time to fu rn is h them with the
l a s t wage payment.

This is e s p e c ia lly true where employment i s seasonal,

as w e ll as in la r g e establishm en ts where pay r o l l records are maintained
elsewhere than a t the p la ce o f employment.

The r u lin g is designed to

a lle v ia t e the burden imposed upon em ployers, by g ra n tin g a general ex­
ten sio n o f time in accordance w ith the a u th o rity conferred in the A c t.

It nos forthor poiated m t thmt ia latoralttoat oaployaant * en
1» ooasonol oocupatio»® - it lo aot aoeooo&ry to fttrmish tho st&tomont
witb o«ob aooo&tioa or iatorruptioa of work, If no toralautioa of 6«~
ployttdnt bes accurrsd.

Toralaatloa of saployaoat le o foot govoraod

by tho iatontioao of tho partios» <md for tho purpooo of eaoplioaoo
wlth sootioa 469» Ib

ooooo

«boro work is intoralttoat, if thoro lo

roaoon&bXo oxpoototioa os tho pert of both tho oaployor mú tho oaployos of further oaployoont» tho ototog&oat aoy bo furaáohod ot tho
U joo of ootttoX toralaotloa, or «ithin thirty doy» thoro«ftor.

If,

hooovar» sueh oxpoototioa doos aot oxiot oa tho part of eithor porty,
thoa «aploymant hm toralaetod and o ototooont aust ba toralshod wlthin
thirty doys fro® tho lost vago poyaont»

IS

EgÉI
ton

i

H*JZ

immi&'m wsumn

<%X- f;

S;C

B>ti> flifflu
\ Ho •

rii

/

temi

the many i n c o m e s from employers regarding the
m

I

ctlon 469
/

WL

tilt lata

Code, at added

of 1942, relating t
4, tht

¡sps
ppci

tralahlng pf it

ta

lay announced tht following

m
m
m

*An extsneion of timo, not axeeedlng thirty day«,
nitida which to furaiah Hit stateaent recuirad by sectimi 469{a) it granted tny araployer with raspaci to sny
cmployee whose amployment 1« teralnated during tht csl•nder yesr» la tht case of lattimitttat or interruptad
cmployment whtrt thère it rtetoatblt expcetatión mi thè
peri of both empleyer usi cmployee of further employ®ent, thè re is ao requlremeet that a statement be im»ediattly funai ehad thè employ#t{ but vhta tueh expectation
«casse to exlst, thè statement must bt turnished within
thirty day# from that timo,*

i

Sit
pip
1

fht atetloa referred to requires that, la eaaea where Hit employ-

1t®8 $
meat la terminated before the eleee of the calendar year, the statement
riil-:

of Victory Tax withheld be furnished the employee with the last payment
ef his wages, but m exteaeloa of tins act exceed lag thirty daye may be

JpgiK
granted uader appropriate regulations»

As the statements must contain

pay roll and other data for the period of employment, i t
I

is frequently

difficult to prepare such statements In time to furnish them with the

l§iB
m&¡¡fiali
s
BSilp^s
I
PUpfe
fif e g g r

last wage payment»

this le especially true where employment is seasonal,

/ as well as in large establishments where pay roll records are maintained
/

elsewhere than at the place of employment*

the ruling is designed to

alleviate the burden Imposed upon employers, by granting a general ex­
tension of time in accordance with the authority conferred in the Act»

m-.
I raH

ÉÉv-vV:

11111

m
m

-

X

Secretary horge.thau today .«nounced a ruling V

»er.ua. relating to the .tatenent. *

«pl.T.«™

««*

the Bureau of I n t e n d

^

employee. sowing the amount of Victory Tax withheld.
Ih, ruling wa. -ad. in repeons, to hundred, of injuries from em|.loy.r.
regarding the requirementa

Secretary Morgenthau today announced a ruling “by the Bureau of Internal
Revenue granting employers an extension

40$

the time in which they anmwmi4MlA£&
m t fc

4 * furnish employees whose services have Been terminated.a statement of the
amount of Victory Tax withheld from

wages«

The ruling, which was made in response to hundreds if inquiries from
mpsr
employers, q j B applies in cases where the employment is terminated before the
close of the calendar year«

Lf h ct 4 'fcl'4

Gdce

¿ua

/

TREASURY DEPARTMENT
Washington
FOR IMMEDIATE RELEASE,
Monday, November 30, 1942,

Press Service
No, 34-35

Secretary Morgenthau today announced a ruling by the
Bureau of Internal Revenue granting employers an extension of
the time in which they must furnish employees whose services
have been terminated with a statement of the amount of Victory
Tax withheld from wages.
The ruling, which was made in response to hundreds of in­
quiries from employers, applies in cases where the employment
is terminated before the close of the calendar year.
The text of the ruling, based on Section 469 of the Inter­
nal Revenue Code, as added by the Revenue Act of 1942, is as
follows:
uAn extension of time, not exceeding thirty days,
within which to furnish the statement required by sec­
tion 469(a) is granted any employer with respect to any
employee whose employment is terminated during the cal­
endar year. In the case of intermittent or interrupted
employment where there is reasonable expectation on the
part of both employer and employee of further employ­
ment, there is no requirement that a statement be immedi­
ately furnished the employee; but when such expectation
ceases to exist, the statement must be furnished within
thirty days from that time.’1
The section referred to requires that, in cases where the
employment is terminated before the close of the calendar year,
the statement of Victory Tax withheld be 'furnished the employee
with the last payment of his wages, but an extension of time not
exceeding thirty days may be granted under appropriate regula­
tions. As the statements must contain pay roll and^other data
for the period of employment, it is frequently^difficult to pre­
pare such statements in time to furnish them with the last wage
payment. This is especially true where employment is seasonal,

-

2

-

as well as in large establishments where pay roll records are
maintained elsewhere than at the place of employment. The ruling
is designed to alleviate the burden imposed upon employers, by
granting a general extension of time in accordance with the
authority conferred in the Act.
It was further pointed out that in intermittent employment as in seasonal occupations - it is not necessary to furnish the
statement with each cessation or interruption of work, if no
termination of employment has occurred. Termination of employment is a fact governed by the intentions of the parties, and
for the purpose of compliance with section 469, in cases where
work is Intermittent, if there is reasonable expectation on the
part of both the employer and the employee of further employment,
•n
I I
l
i
*■ v ■ "1 ■' _ -L.
V .
*_ _
_ .
the statement may be furnished at the time of actual termination,
or within thirty days thereafter. If, however, such expectation
ioes no' exist on the cart of either part;,o ? then employment lias
terminated and a statement must be furnished within thirt; nciV«:w
from the last wage payment.
r*

-oOo-

TREASURY DEPARTMENT
Washington

FOR RELEASE, MORNING NEWSPAPERS
Tuesday, December 1, 1942.

Press Service
3

4~

The Secretary of the Treasury announced last evening that the tenders for
$500,000,000, or thereabouts, of 91-day Treasury bills to be dated December 2, 1942,
and to mature March 3, 1943, which were offered on November 27, were opened at the
Federal Reserve Banka on November 30.
The details of this issue are as follows:
Total applied for - $1,220,276,000
Total accepted
503,206,000
Range of accepted bids:
High
Low
Average price

~ 99.925 Equivalent rate of discount approx. 0.2975& per ann
- 99.906
"
n
n
»
»
0.372^ "
- 99.907
w
•
K
■
"
0.368£ "

He del

Total a

(22 percent of the amount bid for at the low price was accepted.)

Average

price

TREASURY DEPARTMENT
Washington
FOR RELEASE, MORNING NEWSPAPERS,
Tuesday, December i, 1942,

ïï-SÜ=fc- - - - -

Press Service
No. 34-36

’

The Secretary of the Treasury announced last evening that
the tenders for $500,000,000, or thereabouts, of 91-day Treasury
bills to be dated December 2, 1942, and tf> Sature March 3, 1943,
which were offered on November 2?, were opened at the Federal
Reserve Banks on November 30*
The details of this isfue are as follows:
Total applied for - $1,220,276,000
Total accepted
503,206,000
Range of accepted bids:
High

- 99.925 Equivalent rate of discount approx. 0.297$
per annum
Low
- 99.906 Equivalent rate of discount approx. 0.372$
per annum
Average - 9ti.9Q7 Equivalent rate of discount approx. 0.368$ t
price
per annum

(22 percent of the amount bid for at the low price was accepted.)

TREASURY DEPARTMENT

FOR RELEASE, MORNING NEWSPAPERS
THURSDAY, DECEMBER 3, 1942

PRESS SERVICE
No. 34-37

12/2/42

THE BUREAU OF INTERNAL REVENUE TODAY ISSUED REGULATIONS UNDER WHICH
ITS NEW SALARY STABILIZATION UNIT WILL OPERATE.

THE UNIT WAS SET UP IN

CONFORMITY WI^H THE REGULATIONS ISSUED OCTOBER 27 BY THE DIRECTOR OF
ECONOMIC STABILIZATION.
THE TEXT OF THE NEW INTERNAL REVENUE REGULATIONS, EMBODIED IN
TREASURY DECISION 5186, IS AS FOLLOWS:

Extract from FEDERAL REGISTER
THURSDAY, DECEM BER, 3, 1942
TITLE 29—LABOR
Chapter VIII—Commissioner of Internal
Revenue
[TD. 5186]

TPart 1002—S tabilization o f S alaries
On October 27,1942, the President ap­
proved regulations relating to wages and
salaries prescribed by the Economic
Stabilization Director (7 F.R. 8748) under
the Act of October 2, 1942, entitled “An
Act to amend the Emergency Price Con­
trol Act of 1942, to aid in'preventing in­
flation, and for other purposes" (Public
No. 729, 77th Congress, 2d Session) and
Executive Order No. 9250, dated October
3, 1942 (7 F.R. 7871). Those regulations
conferred on the Commissioner of In­
ternal Revenue authority to administer
the provisions thereof relating to the
stabilization and limitation of certain
salaries. In the exercise of the authority
so conferred on the Commissioner of In ­
ternal Revenue, the following regula­
tions relating to salaries are hereby
promulgated. V
SUBPART A— D E FIN IT IO N S

Sec.
1002.1
1002.2
1002.3
1002.4
1002.5
1002.6
1002.7
1002.8
1002.9

General terms.
Employee and employer. Executive employees.
Administrative employees.
Professional employees.
Salary payments.
Salary rate.
Insurance and pension benefits.
Approval by Commissioner.

StTBPAET B— JU R ISD IC T IO N O F CO M M ISSIO N ER

1002.10 Amount of salary payment.
1002.11 Conclusiveness of determination.
1002.12 Geographical scope.
SUBPART C— SALARY INCREASES

1002.13 Commissioner’s approval required.
1002.14' Commissioner’s approval not re­
quired.
SUBPART D— SALARY DECREASES

1002.15 Salaries under $5,000.
1002.16 Salaries over $5,000.
SUBPART E— GOVERNMENTAL EM PLOYEES

1002.17 gtate and local employees.
SUBPART F — LIM ITA TIO N S ON CERTAIN SALARIES

1002.18
1002.19
1002.20
1002.21
1002.22
1002.23
1002.24
1002.25
1002.26
1002.27

Basic allowance.
Charitable contributions.
Insurance premiums.
Fixed obligations.
Federal taxes.
Multiple employers.
Limitation on 1942- salaries.
Community property.
Taxable year.
Effective date.

SUBPART G— EFFECT OF U N LA W FU L PAYM ENTS

1002/28 Amounts disregarded.
1002.29 Criminal penalties.
1002.30 Salary allowances under Code.
498290 0 —42

SUBPART H — EX EM PTION S

Sec.
.1002.31
1002.32
1002.33
1002.34

Exempt employers.
Statutory salaries.
Services in foreign countries.
Foreign employers.
A u t h o r it y : §§ 1002.1 to 1002.34, inclusive,
issued under Pub. Law 729, 77th Cong., E.O.
9250, 7 F.R. 7871; Regs, of Economic Stabiliza-tion Director, dated October 27, 1942, 7 F.R.
8748.
SUBPART A— DEFINITIONS

§ 1002.1 General terms. When used
in these regulations, unless otherwise
distinctly expressed or manifestly in­
compatible with the intent thereof:
(a) The term “Act” means the Act
of October 2, 1942 (Public No. 729, 77th
Congress) entitled “An Act - to amend
the Emergency Price Control Act of 1942,
to aid in preventing inflation, and for
other purposes”.
(b) The term“ Board” means the Na­
tional War Labor Board created by Ex­
ecutive Order No. 9017, dated January
12, 1942 (7 F.R. 237).
(c) The term “Commissioner” means
the Commissioner of Internal Revenue.
(d) The term “Code” means the In­
ternal Revenue Code, as amended and
supplemented.
(e) The term “person” has the same
meaning as when used in the Code.
(f) • The term “General Regulations”
means regulations (relating to wages and
salaries) issued by the Economic Sta­
bilization Director, approved by the Pres­
ident on October 27, 1942 (7 F.R. 8748),
and as amended or supplemented by
subsequent regulations issued by the Eco'nomic Stabilization Director relating to
wages and salaries.
(g) The term “in contravention of the
Act” means in contravention of. the Act
of October 2, 1942 (referred to in para­
graph (a) above), Executive Order No.
9250_of October 3, 1942 (7 F.R. 7871),
the General Regulations, these regula­
tions and other rulings and regulations
promulgated under such Act.
§ 1002.2» Employee and employer. An
employee, for the purposes of these regu­
lations, is an individual who performs
services for compensation where the re­
lationship between him and the person
for whom he performs the services is
the legal relationship of employee and
employer. An employer is any person
for whom an individual performs any
services, of whatever nature, as the em­
ployee of such person. The term “em­
ployer” is not limited to private persons
engaged in trade or business, but in­
cludes organizations which, under sec­
tion 101 of the Code, are exempt from
income taxation, and also government
departments and agencies. The exist­
ence of the legal relationship of employer

and employee is to be ascertained in the
light of the general purposes of the Act
and the General Regulations.
Generally, the legal relationship of
employer and employee exists when the
person for whom services are performed
has the right to control and direct the
individual who performs the services,
not only as to the result to be accom­
plished by the work done, but also as to
the details and means'by which that re­
sult is accomplished. An employee is
generally subject to the will and con­
trol iof the employer not only as to what
shall be done but .how it shall be done.
In this connection it is unnecessary that
the employer actually direct or control
the precise manner in which the services
are performed; it is sufficient that he
has the right to do so. The right to dis­
charge is also an important faetor indi­
cating that the person possessing that
right is an employer.
Other factors characteristic of an em­
ployer, but not necessarily present in
every case, are the furnishing of tools
and the furnishing of a place to work to
the individual who performs the services.
In general, if an individual is subject to
the control or direction of another
merely as to the result to be accom­
plished by the work and not as to the
means and methods for accomplishing
the result, he is an independent contrac­
tor. An individual performing services
as an independent contractor is not an
employee as to such services. Physi­
cians, lawyers, architects, contractors
and others who follow an independent
trade, business or profession in which
they offer their services to the public are
generally independent contractors and
not employees. Whether the relation­
ship of employer-employee exists will
be determined upon an examination of
the particular facts of each case.
If the relationship of employer and
employee exists the designation or de­
scription of the relationship by the
parties as anything other than that of
employer and employee is immaterial.
If such relationship exists, it is of no
consequence that the efnployee is desig­
nated as a partner, co-adventurer agent
or independent contractor. The meas­
urement, method, or designation of com­
pensation is immaterial if the relation­
ship of employer and employee thus in
fact exists.
An' officer of a corporation is an em­
ployee of the corporation but a director
as such is not. A director may be an
employeexof the corporation, however, if
he performs services for the corporation
other than those required by attendance
at and participation in meetings of the
board of directors.

2

F E D E R A L R E G IS T E R , T h u rsd a y, D ecem ber 3, 1942

§ 1002.3 Executive employees. An in­ fessional capacity” means any employee
Retainer fees paid to an individual,
dividual “employed in a bona fide execu­ who is:
not otherwise an employee, are not to be
tive capacity” means any employee:
(a) Engaged in work—
considered as salary. Insurance and
(a) Whose primary duty consists of
(1) Predominantly intellectual and pension benefits in a reasonable amount
the management of the establishment in varied in character as opposed to routine (see § 1002.8) are likewise excluded from
which he is employed or of a customarily mental, manual, mechanical, or physical the terms “salary” and “salary pay­
recognized department or subdivision work, and '
ment”.*
thereof, and
(2) Requiring the consistent exercise
Although the terms “salary” and “sal­
(b) Who customarily and regularly di­ of discretion and judgment in its per­ ary payment” do not include any com­
rects the work of other employees* And formance, and
pensation other than for personal serv­
(c) Who has the authority to hire'or
(3) Of such a character that .the out­ ices of an employee, the Commissioner
fire other employees or whose sugges­ put produced or the result accomplished is not precluded from determining, after
tions and recommendations as to the cannot be standardized in relation to a investigation, that amounts denomi­
hiring or firing and as to the advance­ given period of time, and
nated, for example, as rents or royalties
ment and promotion or any change of
(4) Whose hours of work of the same are in fact salary payments subject to
status of other employees will be given nature as that performed by employees the controls set forth in__these regula­
particular weight, and
not employed in an executive, adminis­ tions.
(d) Who customarily and regularly trative or professional capacity do not
All amounts paid to, authorized to-be
exercises discretionary powers, and
exceed 20 percent of the hours worked in paid to, or accrued to the account of
(e) Who is compensated for his serv­ the workweek by such employees; pro­ any employee during a calendar year
ices on a salary hasis at not less than vided
where such non-professional for services rendered or to be rendered
$30 per week (exclusive of board, lodg­ work isthat
an
essential part of and neces­ are to be included as salary for such
ing, or other facilities'), and
\
sarily incident to work of a professional year.
(f) Whose hours of wbrk of the same nature, this subparagraph (4) shall not
§ 1002.7 Salary rate. The term “sal­
nature as that performed by employees apply, and
ary rate” means the rate or aggregate
not employed in an executive, adminis­
(5) (i) Requiring knowledge of an ad­ of
rates or other basis at which the salary
trative or professional capacity do not vanced type in a field of science or learn­
exceed 20 percent of the total number of ing customarily acquired by a prolonged for any particular work or service is
hours worked in the workweek by the course of specialized intellectual in­ computed, either un,der the terms of a
employees under his direction: Provided, struction and study, as distinguished contract or agreement, express or im­
That this subparagraph (f) shall not ap­ from a general academic education and plied, or in conformity with custom or
ply in the case of an employee who is from an apprenticeship, and from train­ usage existing in the employer’s business
in sole charge of an independent estab- ing in the performance of, routine men­ establishment. For treatment of com­
missions/ and bonuses on a percentage
iishment or a physically separated tal, manual, or physical processes; or
basis see § 1002.14.
branch establishment,
(ii) Predominantly original and cre­
§ 1002.8 Insurance <and pension bene­
§ 1002.4 Administrative employees. An ative in character in a recognized field,
individual “employed in a bona fide ad­ of artistic endeavor as opposed to work fits. Compensation may include insur­
ministrative capacity” means any em­ which can be produced by a person en- - ance and pension benefits. In deter­
ployee:
dowed with general manual or intellec­ mining the amount of salary of-an em­
(a) Who is compensated for his serv­ tual ability and training, and the result • ployee, the insurance or pension benefit
ices on a salary or fee basis at a rate of which depends primarily on the in­ inuring to such employee is not meas­
of not less than $200 per,month (exclu­ vention, imagination,, or talent of the ured by what he will be entitled to re- ceive after the happening of certain con­
sive of board, lodging, or other facili­ employee, and
ties) , and
(b) Compensated for his services on tingencies, but rather in terms pf the
(b) (1) Who regularly and directly a salary or fee basis at a rate of not amount of contributions or premiums
assists an employee employed in a bona less than $200 per month (exclusive of paid by the employer. To the extent
fide executive or administrative capacity board, lodging, or other facilities); pro­ that an insurance and pension benefit
(as such terms are defined in these reg­ vided that this paragraph (b) shall not inuring to an employee is reasonable in
ulations), where such assistance is non- apply in the case of an employee who amount, such benefit is not considered
manual in nature and requires the exer­ is the holder of a valid license or cer­ as salary as defined in § 1002.6.
Section 165 (a) of the Code sets forth
cise of discretion and independent tificate permitting the practice of law
judgment; or
or medicine or any of their branches the conditions under which a trust form­
(2) Who performs under only general „and who is actually engaged in the prac­ ing part of a stock bonus, pension or
profit-sharing plan of an employer for
supervision, responsible nonmanual office tice thereof.
the exclusive benefit of his employees or
or field work, directly, related to manage­
§
1002.6
Salary
p
a
y
m
e
n
t
s
.
The
their beneficiaries shall not be . taxable
ment policies or general business opera­
terms
“salary”
and
“salary
payment”
for Federal income tax purposes. Con­
tions, along specialized or technical lines
requiring special training, experience, or mean only such salaries over which the tributions by an employer to an em­
knowledge, and which requires the exer­ Commissioner has jurisdiction. (See ployees’ trust or under an annuity plan,
cise of discretion and independent judg­ § 1002.10 of these regulations.) These which trust or plan meets the exemption
terms are not used in any restricted, requirements of such section 165 (a) (as
ment; or
(3) Whose work involves the execution narrow or technical sense, but encom­ of the date the contributions are made),
under only general supervision of special pass all forms of direct or indirect com­ shall be considered as reasonable, re­
nonmanual assignments and tasks di­ pensation for personal services of an em­ gardless of the amount of such contribu­
rectly related to management policies or ployee which is computed on a weekly, tions. On the other hand, contributions
general business operations involving the monthly, annual or other basis, other by an employer to an employees’ trust
exercise of discretion and independent than wages (as defined in the General which is subject to Federal income taxa­
Regulations and in orders or rulings of tion because it (Joes not meet the re­
judgment; or
(4) Who is engaged in transporting the Board). Bonuses, gifts, loans, com­ quirements of such section 165 (a) shall
goods or passengers for hire and who per­ missions, fees, additional compensation be treated, for purposes of these regula­
forms, under only general supervision, re­ and any other remuneration in any form tions, as salary.
sponsible outside work of a specialized or or medium whatsoever are considered as
To the extent amounts paid by an em­
technical nature requiring special train­ falling within the concept of “salary” or ployer on account of insurance premi­
ing, experience, or knowledge, and whose “salary payment”. Any compensation ums on a policy on the life of an em­
duties require the exercise of discretion which is not regarded as wages in the ployee are deductible by the employer in
commonly accepted sense of the term computing net income under the condi­
and independent judgment.
is salary notwithstanding that it may be tions set forth in section 23 (a) of the
§ 1002.5 Professional employees. Any computed on an hourly, daily or piece­ Code
(relating to deductions for ordi­
individual “employed in a bona fide pro­ work basis.
nary and necessary business expenses),

F E D E R A L R E G IS T E R , T h u rsday, D ecem ber 3, 1942
such amounts areltiot considered as sal­
ary. The amount of insurance premi­
ums th at will be considered as falling
outside the concept of salary cannot ex­
ceed the amount of such premiums de­
ductible by the employer for Federal in­
come tax purposes. • If, however, such
insurance premiums are includible in
the gross income of the employee (for
whose benefit the insurance has been
taken out), as well as deductible by the
employer, the amount which shall not
be considered as salary in respect of such
employee may not exceed 5 percent of
the employee’s annual salary determined
without the inclusion of insurance and
pension benefits.
The application of the preceding para­
graph may be illustrated by the follow­
ing examples. An employer having 20
salaried employees takes out life insur­
ance policies on each of such employees
in favor of beneficiaries designated by
them. - The premiums paid for 10 of the
employees are in each instance 7 percent
of the employee’s annual salary (exclu­
sive of insurance and pension benefits) .
As to the remaining 10 employees the
premiums in each instance are 5 per-"
cent of the employee’s annual salary (ex­
clusive of insurance and pension bene­
fits) . It is assumed that with respect to
each employee the premium paid would
be includible in his gross income under
the Code and would be deductible by the
employer under section 23 (a) of the
Code. As to the first 10 employees 2 per­
cent of the premiums in each instance
will be considered as salary, whereas no
part of the premiums will be considered
as salary in the case of the second group
of employees. If, however, none of the
premiums were deductible in computing
the net income of the employer, then the
entire amount of the premium in each
instance would be considered as salary
to the employee involved.
Premiums paid by an employer on
policies of group life insurance without
cash surrender value covering the lives of
his employees, or on policies of group
health or accident insurance, the bene­
ficiaries of which are designated by such
employees, do not constitute salary (re­
gardless of the amount of salary other­
wise received annually by such employ­
ees) if such premiums are deductible
by the employer under section 23 (a)
of the Code.
;
§ 1002.9 Approval by Commissioner.
Wherever the terms “approval by the
Commissioner” and “determination by
the Commissioner” are used in these
regulations they shall, except as other­
wise provided, include an approval or
determination by a regional officer of
the Salary Stabilization Unit established
by the Commissioner under Treasury
Decision 5176, which officer is authorized
to make such determination. If an ap­
proval or determination made by such
regional officer is subsequently modified
or reversed by the Commissioner, such
approval or determination shall be
deemed to have been continuously in
effect from its original date until the
first day of the payroll period following
reversal or modification, or until such

later date as the Commissioner may pro­
vide in his ruling.
To illustrate, an employer obtains the
approval of a regional officer of the Sal­
ary Stabilization Unit that a proposed
increase in certain salaries is permissi­
ble. The approval is given on Janu­
ary 2, 1943, and the salary increase is to
become effective January 15, 1943. On
March 15,1943, the Commissioner déter­
minés that the salary increase was not
proper and reverses the approval given
by the regional officer. The Commis­
sioner provides in his ruling that the in­
crease in salary shall be discontinued
after March 31, 1943. For purposes of
these regulations, no part of the salary
for the period between January 15 and
March 31 shall be considered to have
been in contravention of the Act. .
SUBPART B— JURISDICTION OF COMMISSIONER

3

review by The Tax Court of the United
States or by any court in any civil pro­
ceedings. Nothing herein' is i intended;'
however, to deny the right of any em­
ployer or employee to contest in The Tax
Court of the United States or in any
court of competent jurisdiction the va­
lidity of:
) (1) Any provision of these regulations,
on the ground such provision's not au­
thorized by law, or
(2) Any action taken or determina­
tion made under these regulations, on
the ground that such action or determi­
nation is not authorized, or has not been
taken or made in a manner required, by
law.
(c)
No increase in salary rate shall
result in any substantial increase of the
level of costs or furnish the basis either’
to increase price ceilings of the com­
modity or service involved or to resist
otherwise justifiable reductions in such
price ceilings.
§ 1002.12 Geographical scope. T h e
provisions of these regulations shall not
apply to salaries in any Territory or pos­
session of the United States, except
Alaska and Hawaii.

§ 1002.10 Amount o f salary pay­
ment. (a) The General Regulations
provide that the’ Commisisoner shall
have authority to determine, under reg­
ulations to be prescribed by the Com­
missioner with the approval of the Sec­
retary of the Treasury, whether salary
payments are made in contravention of
SUBPART C— SALARY INCREASES
the Act. The Commissioner’s jurisdic­
tion is confined to:
§ 1002.13 Commissioner’s approval re­
(1.) Salary payments in excess of $5,000 quired. Section 1 of the Act provides in
per annum, in the case of individuals effect that salaries, so far as practicable,
employed in any capacity whatsoever; shall be stabilized at the levels which
and
existed on September 15, 1942. In the
(2)
Salary payments of $5,000 or less case of a salary rate of-"$5,000 or less
per annum, in thé case of individuals (i) per annum existing on October 27, 1842,
who are employed in bona fide executive, or established thereafter in compliance
administrative or professional capacities, with these regulations, and in the case
and (ii) who, in their relations with of a salary rate of more than $5,000 per
their employer, are not represented by annum existing on October 3, 1942, or
duly recognized or certified labor organ­ established thereafter in compliance
izations, and (iii) whose services are not with these regulations, no increase shall
within the meaning of “agricultural be made by the employer, except as pro­
labor” as defined in paragraph (1) of vided in § 1002.14, without prior approval
§ 4001.1 of the General Regulations.
of such increase by the Commissioner.
Other salary payments are subject either Any salary increase made before the re­
to the jurisdiction of the Board or the quired approval of the Commissioner is
Secretary of Agriculture, as prescribed obtained is from the date of such in­
in the General Regulations. If, for ex­ crease in contravention of the Act. (See
ample, a salary is to be increased from §§ 1002.28 and 1002.29 for the conse­
$4500 per annum to $5200 per annum quences of a salary payment made in
(and subparagraph (2) is inapplicable), contravention of the Act.) The Com­
approval of such increase, if required, missioner may, however, approve an in­
crease in salary rate to be effective as
must be obtained from the Board.
of the date of the application for
§ 1002.11 Conclusiveness of determi­ approval.
nation. (a) Any determination by the
The burden of justifying an increase
Commissioner that a salary payment is in salary rate shall in every instance be
in contravention of the Act is conclusive upon the employer seeking, to make such
in every respect Upon all executive de­ increase. Increases in salary rates will
partments and agencies of the Federal not be approved unless necessary to cor­
Government for the following purposes: rect maladjustments or inequalities, or
(1) Determining costs or expenses of to aid in the effective prosecution of the
any employer for the purpose of any law >war. A promise made by an employer
or regulation, either heretofore or here­ to his employees prior to October 3,1942
after enacted or promulgated, including that salaries would be increased in the
the Emergency Price Control Act of 1942, future is generally to be ignored in de­
or any maximum price regulation there­ termining whether an increase after that
date should be approved. The same rule
under;
V
(2) Calculating deductions under the is applicable with respect to a promise
revenue laws of the United States; or made by an employer prior to October
(3) Determining costs or expenses 27, 1942, in the case of employees whose
under any contract made by or on behalf salary rates are $5,000 or less per annum.
A salary increase, however, may be ap­
of the United States.
(b) Any such determination of the proved, as to salaries below $5,000 per
Commissioner is final and not subject to annum, if to deny such increase would

4

F E D E R A L R E G IS T E R , T h u rsday, D ecem ber 3, 1942

be to force the continuation of a salary
which „is below the general level exist­
ing for the same or comparable work
in the local area on September 15, 1942.
An employer who has established a new
job classification, or who has begun busi­
ness, after October 3, 1942, must obtain
approval of the Commissioner for the
payment of salaries for such job classificátion or*in such new business: Pro­
vided, however, That if the salary rates
in question are not in excess of those
prevailing for similar job classifications
within the local area, the approval of the
Commissioner is not required. An in­
crease in a salary rate for a job classifi­
cation established after October 3, 1942,
shall be subject to the limitations pro­
vided in this Subpart.
" A mere change in the name, organiza­
tion, or financial structure of an em­
ployer, whether such employer be an in­
dividual, partnership or corporation, will
not in itself be sufficient for a finding
that, for the purposes of these regula­
tions, a new business has been begun
or new job classification established after
such change.
Any change in a salary rate, regardless
of its effective date, which results from
an award or decision of an arbitrator or
referee made after October 3,1942, in the
case of salaries of more than $5,000 per
annum, and after October 27, „1942 in
the case of salaries of $5,000 or less per
annum, is subject to the provisions of
these regulations notwithstanding that
the agreement or order for arbitration
or reference was made on or before Oc­
tober 3, 1942 or October 27,' 1942, as the
casé may be.
Unless otherwise expressly exempted,
any change in a salary rate, provided
for in any agreement existing as of Oc­
tober 3, 1942 in the case of salaries of
more than $5,000 per annum, or as of
October 27, 1942 in the case of salaries
of $5,000 or less per annum, which is to
take effect at some future date or on
the happening of some future event, is
subject to the provisions of these regula­
tions regardless of when the agreement
was made.
Payment for overtime will constitute
an increase in salary rate, and thus will
require the approval of the Commis­
sioner, unless the customary practice of
the employer has been to pay for over­
time, and the rate has not been changed.
Except as may be otherwise provided
from time to time by the Commissioner,
an application for the approval of a
salary increase shall be filed by the em­
ployer with the regional office of the
Salary Stabilization Unit of the Bureau
of Internal Revenue in whose territorial
jurisdiction the main office or principal
place of business of the employer is lo­
cated. Such application shall be filed
on forms prescribed by the Commis­
sioner and shall contain such informa­
tion as may be required by the Commis­
sioner.
§ 1002.14 Commissioner’s approval not;
required. The Commissioner’s approval
is not required where an increase in
salary rate is made in accordance with
the terms of a salary agreement or salary

rate schedule in effect on October 3,1942,
or approved thereafter by the Commis­
sioner, and is a result of:
(1) Individual promotions or reclassi­
fications,
(2) Individual merit increases within
established salary rate ranges,
(3) Operation of an established plan
of salary increases based on length of
service,
(4) Increased productivity under in­
centive plans,
(5) Operation of a trainee system, or
(6) Such other reasons or circum­
stances as may be prescribed in rulings
or regulations promulgated by the Com­
missioner from time to time.
For purposes of this section, the term
“salary agreement” or “salary rate
schedule” may include a salary policy
in effect on October 3, 1942, even though
not evidenced by written contracts or
written rate Schedules; For example, a
salary policy may be determined from
previous payroll records or other payroll
data. The existence of such policy, how­
ever, must be established to the satis­
faction of the Commissioner, and the
burden of proof rests upon the employer.
In such cases, the employer in advance
of making an increase in salary rate may
reduce the salary policy to writing and
secure approval thereof by the Com­
missioner.
A bonus or other form of additional
compensation which does not exceed in
amount the bonus or other additional
compensation to such employee for the
last bonps year ending before October 3,
1942 does mot require approval by the
Commissioner. In addition a bonus
based upon a fixed percentage of salary
where the percentage has not been
changed, does not require approval by
the Commissioner even though the
amount may be increased due to an au­
thorized increase in salary. Any other
bonus or other form of additional com­
pensation requires approval by the Com­
missioner. Where the compensation, or
part thereof, is paid on a commission
basis and is based upon a fixed percen­
tage (which has not been changed) of
Sales ntyade by the employee, a payment
does not require approval by the Com­
missioner even though the amount may
represent an increase due to increased
sales by the employee. See, however,
Subpart F of these regulations.
The provisions of this section may be
illustrated as follows:
(1) The X Corporation began business in
1940. As of July 1, 1942, pursuant to a coiv
porate resolution duly passed in January
1942, all of its salaried employees received
more than $5,000 per annum. No approval of
the Commissioner is required to increase the
salary of an employee who is promoted in
November 1942 from a salesman to general
manager and who receives a salary within the
salary range paid previously to individuals
occupying the' position of general manager.
(2) The X Corporation in December 1942
wishes to establish a new salary rate sched­
ule raising the level of compensation of all
its salaried employees. Approval by the
Commissioner of such schedule is required.
Assuming that such approval has been ob­
tained. further approval by the Commissioner

of any adjustment under>uch schedule com­
ing within this section is not required.
(3) The Y Corporation begins business on
; November 1, 1942. The salaries paid by it to
its employees are commensurate with sala­
ries paid by other employers in comparable
businesses in the same local area. Payment
of such salaries does not require the ap­
proval of the Commissioner. Any increase
in salary rates, however, requires the ap­
proval of the Commissioner.
(4) The M Corporation, which has manu­
factured furniture since 1925, is reorganized
in November 1942 and emerges from the re­
organization proceedings as the N, Corpora­
tion. There is no change in the nature of
the business although there is a substantial
alteration in the financial structure of the
company. The N Corporation is not to be
treated as a new employer beginning business
after October 27, 1942. Consequently, any
general increase in salaries over and above
those paid by the M Corporation requires
the prior approval of the Commissioner.
(5) Employees of the Z Corporation have
customarily received a bonus of 5 percent
of their annual salary at the end of each
calendar year. If, for example, one of the
employees received $6,000 in 1941 but received
salary of $7,000 in 1942 due to a salary in­
crease on July 1, 1942, a bonus of $350 may
be. paid to him for 1942 without prior ap­
proval of the Commissioner, notwithstanding
that his bonus for 1941 was only $300.
SUBPART D— SALARY DECREASES

§ 1002.15 Salaries under $5,000. In
the case of a salary rate existing as of
the close of October 3, 1942, or estab­
lished thereafter in compliance with
these regulations, under which an em­
ployee is paid a salary of less than $5,000
per annum for any particular- work, the
general rule is that no decrease can be
made by the employer in such salary
rate below the highest salary rate paid
for such work in the local area between
January 1,1942, and September 15,1942.
A decrease is permitted, however, with
the approval of the Commissioner, in
order to correct a gross inequity in any
case or to aid in the effective prosecution
of the war. Where such decrease isj>ermitted the salary rate may be reduced
below the highest salary rate paid for
the work in question between January 1,
1942 and September 15, 1942. Except
as otherwise provided in this section, any
decrease in such salary rate after Oc­
tober 3, 1942 shall be considered in con­
travention of the Act if it is made prior
to the approval thereof by the Commis­
sioner.
Except as may be otherwise provided
from time to time by the Commissioner,
an application for approval of any salary
decrease shall be filed in the same man­
ner as. in the case of an application for
approval of a salary increase. See
§ 1002.13 of these regulations.
The Commissioner’s approval is not re­
quired, for example, in the following
cases where salary decreases are made
after October 3, 1942:
(1) The new salary rate does not fall
below the highest salary rate existing
between January 1, 1942 and September
15, 1942 for the particular work in ques­
tion or for the same or comparable work
in the local area.
*
¡
(2) An employee has been demoted to
a lower position than that filled by him

F E D E R A L R E G IS T E R , T h u rsd a y, D ecem ber 3, 1942
between January 1, 1942 and September
15, 1942 and the salary rate for such
lower position is not less than the highest
salary rate existing for that position
during the same period.
(3) An employee has-been relieved of
substantial duties and responsibilities.
A disparity between salaries paid by
a particular employer and those paid by
employers generally in the local area
does not necessarily constitute justifica­
tion for decrease in salary rates paid by
such employer.
§ 1002.16 Salaries over $5,000. In the
case of a salary rate existing as of the
close of October 3, 1942, or established
thereafter in compliance with these reg­
ulations, under which an employee is
paid a salary of more than $5,000 per
annum, the employer is permitted to
make, without approval by the Commis­
sioner, a decrease to a rate not less than
$5,000 per annum. If, however, by vir­
tue of a decrease the new salary paid
to the employee is less than $5,000 per
annum, then the decrease below $5,p00
per annum is subject to the limitations
of § 1002.15 of these regulations. To
the extent that prior approval by the
Commissioner of a decrease is not re­
quired under § 1002.15 or this section,
such decrease shall not be considered as
being in contravention of the Act.
SUBPART E— GOVERNMENTAL EMPLOYEES

§ 1002.17 State and local employees.
An adjustment, in salaries (not fixed by
statute, see § 10b2.32) may be made by
a State, or any political subdivision
thereof, the District of Columbia, or any
agency or,instrumentality of any of the
foregoing, on certification to the Com­
missioner that such "adjustment is nec­
essary to correct maladjustments, or to
correct inequalities or gross inequities.
The certification procedure shall not ap­
ply to any adjustment which would not
otherwise require the Commissioner’s ap­
proval or which would raise salaries be­
yond the prevailing level of compensa­
tion for similar services in the area or
community. A certificate by the official
or agency authorizing the adjustment
stating the nature and amount of such
adjustment, and briefly setting forth the
facts meeting the foregoing requirement,
will be accepted by the Commissioner
as sufficient evidence of the propriety of
the adjustment, subject to review by the
Commissioner. Modification by the
Commissioner of adjustments made by a
governmental official or agency acting
pursuant hereto shall not be retroactive.
In exceptional cases where such an ad­
justment ir sought, and in all cases where
the agency seeks an adjustment other
than by the certification procedure, ap­
plication for approval shall be filed with
the appropriate regional office of the
Salary Stabilization Unit.
SUBPART

F— LIMITATIONS
SALARIES

ON

CERTAIN

§ 1002.18 Basic allowance. In addi­
tion to setting forth limitations on in­
creases and decreases in salary rates, the
General Regulations provide a ceiling on
the amount of salary which may be paid

to any employee during a calendar year.
The general rule is that no amount of
salary/may be paid or authorized to be
paid to or accrued ^o the account of any
employee or received by him during the
calendar year 1943, and in each succeed­
ing calendar year, which, after reduction
by the Federal income taxes on the
amount of salary, computed as below
without regard to other income and with­
out regard to deductions or credits,
would exceed $25,000. Additional al­
lowances of salary which may be per-'
mitted in certain circumstances are de­
scribed in §§ 1002.19 to 1002.22, inclusive.
The amount of Federal income taxes
referred to in the preceding paragraph
shall be determined:
(1) By applying to the total amount
of salary (but not including any amounts
allowable under §§ 1002.19 tcf 1002.22, in­
clusive, of these regulations) paid or ac­
crued during the calendar year in ques­
tion, undiminished by any deductions,
the rates of taxes imposed by Chapter 1
of the Code (except section 466 thereof
relating to withholding) as if such total
amount of salary were thé net income
(after the allowance of the appropriate
credits), the surtax net income, and the
Victory tax net income, respectively; and
(2) Without further allowance of any
other credits against any of such taxes.
Assume that the rates imposed under
Chapter 1 of the Code, as amended by the
Revenue Act of 1942, are applicable with
respect to the calendar year 1943. Un­
der the formula described in the preced­
ing paragraph, the basic allowance qf
salary for 1943 (which after reduction
by the Federal income taxes would yield
$25,000) is $67,200. This latter aimount
is the maximum amount of salary which
an employee would be permitted to re-<
ceive for 1943, provided he is not entitled
to further allowances under §§ 1002.19 to
1002.22, inclusive. If the rates of Fed­
eral income tax applicable for 1943
should be increased above those now
existing in the Code for 1942, the basic
allowance of salary will be an amount
greater than $67,200.
The basic allowance of salary as de­
scribed in this section represents an
amount against which the appropriate
tax rates are applied and remains the
same regardless of whether the employee
is married or single or of the number of
his dependents, if any. It is likewise un­
affected by the nature of amount of his
other income from all sources he would
the extent of his deductions allowable for
tax purposes generally.
For purposes of this subpart an amount
of salary, in addition to the basic allow­
ance of salary, will be permitted for any
expenses paid or incurred by an employee
which are ordinary and necessary for the
performance of the services for which the
employee is compensated. No such ad­
ditional amount, however, shall be per­
mitted for expenses which would not be
deductible in computing individual Fed­
eral income taxes.
§ 1002.19 Charitable contributions.
An amount of salary, in addition to the
basic allowance of salary described in
§ 1002.18, will be permitted in certain

5

1circumstances to allow an employee to
maintain his customary contributions to
charitable, educational or other organ­
izations described in section 23 (o) of tlffe
Code. Such additional amount of salary
will be permitted if the employee estab­
lishes to the satisfaction of the Com­
missioner that after resorting to his
other income from all sources he would
suffer undue hardship in maintaining
his customary contributions out of the
basic allowance of salary described in the
preceding section.
For purposes of this section and
§§ 1002.20, 1002.21, and 1002.22, “income
from all sources” includes income which
is exempt under the Federal income tax
laws.
What constitutes “undue hardship”
for purposes of this section and §§ 1002.20, 1002.21, and 1002.22, is dependent
upon all the circumstances in each case.
Contributions may be customary with­
in the meaning of this section even
though in the particular year in question
the organizations to which the contribu­
tions are made are different from those
to whom contributions were made in
previous years.
§ 1002.20 Insurance premiums. An
amount of salary, in addition to the basic
allowance under § 1002.18 may be per­
mitted to an employee under this section
to meet certain payments during the em­
ployee’s taxable year for insurance pre­
miums. To be entitled to such extra
allowance ,of salary' the employee must
establish to the satisfaction of the Com­
missioner that after resorting to other
income from all sources (see § 1002.19)
he is unable, without disposing of assets
at a substantial financial loss resulting
in undue hardship, to meet premium
payments on policies of life insurance in
force and effect on October 3, 1942 on
his life.
The premium payments referred to
in the. preceding paragraph are those
Which are required to be met during the
calendar year in question. No allowance
for salary is permissible for payments
of premiums which are due in future
calendar years.
IfNany insurance has been permitted
by an employee to lapse after October
3, 1942, no allowance for salary is per­
missible for payments of premiums on
policies taken out after such date, even
though the total annual premiums on
the new policies are not in excess of the
total annual premiums due on policies
in effect on October 3, 1942. Renewal
of policies in effect on October 3, 1942
(even though new premiums are higher)
will, not preclude applicability of this
section to premium payments on the re­
newed policies. Generally, in the case
of a conversion of a policy in effect on
October 3,1942 to a new policy requiring
payment of higher premiums, this sec­
tion is inapplicable to the annual amount
by which the new premiums exceed the
premiums in effect on October 3, 1942.
As used in this section, and §§ 1002.21
and 1002.22, substantial financial loss is
not necessarily confined to a loss suf­
fered on disposition of assets at de­
pressed prices substantially below cost

6

F E D E R A L R E G IS T E R , T h u rsday, D ecem ber 3, 1942

to the employee. The present value, in example, individual A receives a salary as
use or in production of income and the an employee of the X Corporation and
potential future value are factors to be also as an employee of its subsidiary, the
considered. For the purpose of this IT Corporation. Both the X Corporation
subpart, the provisions of the Cpde gov­ and the Y Corporation are required to
erning the determination of loss upon adjust their salary arrangements with
disposition of assets are not controlling. such employee to conform with the pro­
§ 1002.21
Fixed obligations.
An visions of these regulations. If individual
amount of salary in addition to the basic B is employed by the M Corporation and
allowance under § 1002.18 may be per­ the N Corporation, both of whom are
mitted to an employee under this section, owned, directly or indirectly, by the same
to make required payments during the person or persons, the M Corporation and
employee’s taxable year on fixfed obliga­ the N Corporation must adjust their
tions. Before any amount will be al­ salary arrangements with B to conform
lowed under this section, the employee with the provisions, of these regulations.
must establish to ‘the satisfaction of the. If individual C is employed by the R Cor­
? Commissioner that after resorting to his poration and the S Corporation and both
^ income from all /sources (see § 1002.19) , corporations have knowledge of that fact,
. he is unable, without the necessity of they must adjust their salary arrange­
disposing of assets at a substantial fi­ ments with C to conform with the pro­
nancial loss resulting in undue hardship, visions of these regulations.
Where an individual is employed by
to meet required payments of fixed ob. ligations for which he was obligated on two or more employers who, under these
regulations, are required to make salary
October 3, 1942. (See § 1002.20.)
The term “fixed obligations” as used arrangements in order to conform with
in this section means any enforceable the provisions of Subpart F, such indi­
if liability of the employee the amount of vidual and employers will be deemed to
which liability was fixed and determined be acting in contravention of the Act
on October 3, 1942. In no event is an and these regulations if proper salary
allowance for salary permissable under arrangements are not made. In any
this section for the payment xof any event, no employee may receive any
salary in excess of that allowed Under
amount due in future years.
Subpart F. (See § 1002.30.)
§ 1002.22 Federal taxes. An amount
§ 1002.24 Limitation on 1942 salaries.
of salary in addition to the basic allow­
ance under § 1002.18 may be permitted Unless payment thereof is required
to an employee, under this section, to under a bona fide contract in effect on
meet payments during the employee’s October 3, 1942, no amount of salary
taxable year of certain Federal income shall be paid or authorized to be paid
taxes. To be entitled to such an addi­ to or accrued to the account of an em­
tional allowance of salary the employee ployee or received by him after October
must establish to the satisfaction of the 27,1942 and before January 1,1943, if the
Commissioner that after resorting to his total salary paid, authorized, accrued or
income from all sources (see § 1002.19), received for the calendar year 1942 èxhe is unable, without disposing of assets beeds the amount of salary which would
at a substantial financial loss resulting otherwise be allowable under § 1002.18
in undue hardship, to meet payments (but not under §§ 1002.19 to 1002.22, in­
of certain Federal income taxes, more clusive) and also exceeds the total salary
paid, authorized, accrued or received for
fully described below. (See § 1002.20.)
An allowance for additional salary is' the calendar year 1941. For purposes of
permissible^in order to pay Federal in­ this section, the term “bona fide con­
come taxes owed by the employee him- tract” means a legally enforceable agree­
- self for any prior taxable year, but is not ment, written or oral. Such an agree­
permissible in order to pay any Federal ment may be evidenced by a bona fide
income tax due on the basic allowance resolution of a board of directors of a
of salary under § 1002.18, except as this corporate employer passed on or before
allowance is applicable^ for 1942. See October 3, 1942. The amount allowable
§ 1002.24. Thus, an amount for addi­ under § 1002.18 for 1942 (before reduc­
tional salary might be allowable in 1943 tion by any Federal income taxes) is
to meet the payment of the entire Fed­ $54,428.57.
eral income tax due on a salary received
§ 1002.25 Community property. The
in 1942. In 1944 an amount for addi­ limitations on salaries provided for in
tional salary might be allowable to meet §§ 1002.18 to 1002.24, inclusive, shall in
the payment of Federal income tax due nowise be affected by any community
on additional salary allowances per­ property law. For example, an employee
mitted for 1943 under §§ 1002.19,1002.20, resident in the State of R receives a sal­
1002.21 and this section for 1943; but no ary in 1943 of $100,000. Under the laws
amqunt, however, would be allowable to of that State, $50,000 of that salary is
meet the payment of the Federal income deemed to be the property of the em­
tax due on the basic allowance under ployee’s wife. For,purposes of these reg­
§ 1002.18 for 1943.
ulations, the employee’s salary is $100,000,
§ 1002.23 Multiple employers. Sala- not $50,000.
ries payable to an employee from more
§ 1002.26 Taxable year. For purposes
than one employer may, for purposes of of Subparts F and G of these regula­
Subpart F, be treated as if all such sal­ tions, the term “taxable year” of an em­
aries were payable by a single employer, ployee shall mean the calendar year dur­
regardless of the financial or other rela­ ing which the salary in question is paid
tionship of the several employers. For or authorized to be paid to or accrued to /

the account of such employee or received
by him. This rule is .applicable regard­
less of whether the employer or em­
ployee, or both, file Federal income tax
returns for a fiscal year or report in­
come, for Federal income tax purposes,
on an accrual basis or on the cash re, ceipts and disbursements basis.
§ 1002.27 Effective date. The provi­
sions of this subpart, except as provided
in § 1002.24, shall be applicable to all
salaries paid or accrued, after December
31, 1942,. irrespective of when payment
or accrual of such salary was author­
ized and irrespective, also, of any contract
or agreement made prior to or after such
date.
SUBPART G— EFFECT OF UNLAW FUL PAYMENTS

§ 1002.28 Amounts disregarded, '(a)
Section 5 (a) of the Act provides in ef­
fect that the President shall prescribe
the extent to which any salary paymenjLmade in contravention of regulations
promulgated under the Act shall be dis­
regarded by executive departments and
other governmental agencies in deter­
mining the costs o fJexpenses of any em­
ployer for the purposes of any other law
or regulation. In any case where a salary
payment is determined by the Commis­
sioner to bave beèï5\.n,idê in contraven­
tion of the Act, the entire amount of such
payment is to be disregarded by all ex­
ecutive departments and all other agen­
cies of the Federal Government for the
purposes of:
(1) Determining costs or expenses of
any employer for the purpose of any law
or regulation, either heretofore or here­
after enacted or promulgated, including
The Emergency Price Control Act of 1942,
or any maximum price regulation
thereof;
(2) Calculating deductions under thé
revenue laws of the United States; or
(3) Determining costs or expenses un­
der any contract made by Or on behalf
of the United States.
A payment in contravention of the Act
may be disregarded for more than one
of the foregoing, purposes.
(b) In the case of salaries decreased
in contravention of the Act, the amount
to be disregarded, as required by para- .
graph (a) of this section; is the amount
of the salary actually paid or accrued
by the employer at the reduced rate.
Thus, if, for example, on November 1,
1942, a weekly salary rate of $100 has
been unjustifiably reduced to $50 for
the remainder of the calendar year 1942,
the amqunt to be disregarded under par­
agraph (a) of this section is the total
amount of salary paid at the weekly
rate of $50. :•> -,
(c) In the case of salaries increased
in contravention of the Act, the amount
to be disregarded, as required by para­
graph (a) of this section, is the amount
of the salary actually paid or accrued by
the employer a t the increased rate and
not merely an amount representing an
increase in such salary. Thus, if, for ex­
ample, on November I, 1942, a weekly
salary rate of $100 in unjustifiably in­
creased to $150 for the remainder of 1942,
then the amount of salary to be disre-

F E D E R A L R E G IS T E R , T h u rsd a y , D ecem ber 3, 1942
garded for purposes of paragraph (a) of not more than one year, or to both such
this section is the total amount paid at fine and imprisonment.
the weekly rate of $150. Also, if, for ex­
§ 1002,30 Salary allowances under
ample, on February 1,1943, a weekly sal­
ary rate of $100 is increased to $150 with­ Code. Under section 23 (a) of the Code
out prior required approval, but is re­ reasonable allowances for salaries are
stored to $100 on June 1,1943, after for­ allowed as deductions in computing, net
mal disapproval by the Commissioner or income. The ^tests which determine
regional officer, then the amount of sal­ whether an allowance for salaries paid or
ary to be disregarded for purposes of accrued is reasonable within the mean­
paragraph (a) of this section is the total ing of section 23 (a) of the Code are
amount at the weekly rate of $150. in nowise suspended by any provision of
Neither in the cases described i n .this these regulations. An employer may be
paragraph nor in the case described in exempt from the operation of these reg­
paragraph (b) of this section are the ulations yet be denied deductions for
total amounts paid at the weekly rate purposes of section 23 (a) of the Code
of $100 to be disregarded for purposes of with respect to the salaries paid or ac­
paragraph (a) of this section. (See crued by him, Also, a basic allowance
§ 1002.31 relating to salary allowances under •§ 1002.18 and additional allow­
ances under §§ 1002.19 to 1002.22, inclu­
under section 23 (a) of the Code.)
(d)
Iii the case of a salary in excess sive, may nevertheless be disallowed in
of the amount allowable under Subpart whole or in part as deductions under sec­
F of these regulations which is paid to, tion 23 (a) of the Code.
authorized to be paid to, or accrued to
SUBPART H — EXEMPTIONS
the account of an employee during his
taxable year (as distinguished from the
§ 1002.31 Exempt employers. T h e
taxable year of the employer) in contra­ provisions of these regulations, except
vention of the Act, the amount to be dis­ those contained in Subparts F and G
regarded is the full . amount of such thereof, shall not apply in the case of
salary and not merely the amount repre­ an employer who employs eight or less
senting the excess over the amount al­ individuals in a single business. An em­
lowable under su^' Subpart F of these ployer is subject to the provisions of
regulations. Thus, if,* for example, un­ these regulations if at the time a salary
der such Subpart F an employee would increase is to take effect he has in his
be entitled to receive a total salary dur­ employ more than eight individuals, in
ing his taxable year of $67,200 for serv­ a single business. It is not necessary
ices rendered in such year, but actually that each employee be paid a salary pro­
receives $100,000 for such services, then vided all the individuals employed re­
the entire amount of $100,000 is to be ceive compensation for their personal
disregarded for purposes of paragraph services. If it is subsequently deter­
(a) of this section.
mined that the number of employees
been temporarily reduced by the em­
§ 1002.29 Criminal penalties. Section has
or that the employer has utilized
5 (a) of the Act provides in substance ployer,
any other' improper device, for the sole
that no employer shall pay, and no em­ purpose
claiming the exemption pro­
ployee shall receive, any salaries in con­ vided in ofthe
General Regulations and
travention of - the regulations promul­ these regulations,
such exemption
gated by the President under the Act. shall be deemed to then
been improperly
Section 11 of the Act provides that any obtained and of no have
force or effect.
person, whether1 an employer or em­
An employer may be exempt under this
ployee, who wilfully violates any provi­ section notwithstanding that shortly
sion of the Act or of any regulation after the effective date of a salary in­
promulgated thereunder, shall be sub­ crease he enlarges his personnel in good
ject, upon conviction, to a fine of not faith to more than eight employees.
more than $1,000, or to imprisonment for Any further adjustment in salary- will

c

7

then be subject to the provisions of these
regulations.
§ 1002.32 Statutory salaries. The
provisions of these regulations are ap­
plicable in every respect to any salary
paid by the United States, any State,
Territory, or possession or political subdi­
vision thereof, the District of Columbia,
or any agency or instrumentality of
any one or more of the foregoing, ex­
cept where the amount of such salary is
fixed by statute. The term “statute” for
purposes of this section does not include
a municipal ordinance or resolution en­
acted by a governmental unit inferior to
a State, Territory, or possession. Sala­
ries covered by the Federal Classification
Act of 1923, as amended, are excluded
from the operation of these regulations.
Likewise, salaries, for example, of public
school teachers which are paid under
salary schedules fixed by a state legisla­
ture and providing for mandatory incre­
ments are excluded from the operation
of these regulations. (See § 1002.17.)
§ 1002.33 Services in foreign coun­
tries. The provisions of these regula­
tions shall not be applicable in the case
of any individual employer, resident in
the United States or any Territory or
possession thereof, or of a corporaté em­
ployer organized under, the laws of the
United States or any State, Territory or
possession, with respect to salaries paid
by such employers to employees for
services rendered exclusively in foreign
countries.
§ 1002.34 Foreign employers. The
provisions of these regulations shall not
be applicable in the case of nonresident
foreign employers except that if any sal­
ary is paid to an employee residing in '
the United States payment of such sal­
ary is subject to all the provisions of
these regulations.
[ seal!

G uy T. H elvering,

Commissioner of Internal Revenue.
Approved: December 2, 1942.
J ohn L. S ullivan,
Acting Secretary of the Treasury.
[F. R. Doc. 42-12761; Filed, December 2, 1942;
11:40 a. m.]

É

D. 8 . GOVERNMENT PRINTING O FFICE : 1942

TREASURY DEPARTMENT
V/ashington
FOR RELEASE, MORNING- NEWSPAPERS,
Thursday, December 3» 1942

12/ 2/42

Press Service
No. 34-37
m "

1'

111!

The Bureau of Internal Revenue today issued regulations
under which its new Salary Stabilization Unit will operatef
Thè Unit vvas set up in conformity with the regulations issued
October 27 by the Director of Economic Stabilization,
The text of the new internal Revenue regulations, embodied
in Treasury Decision 5186, is as follows?

(T. D. 5186)
. .. TITL$ 29
CHAPTER VIII —

LABOR

COMMISSIONER OS1 INTERNAL REVENUE

.,. PART 1003 —

^

,

STABILI.ZAT101, 02’ SALARIES

" TREASURE DEPARTMENT,
Office of Commissioner of Internal Revenue,
. 'Washington*. 2. C.
TO COLLECTORS OE INTERNAL REVENUE
ARE OTHERS CONCERNED*.

5l

' ;' " j S
if

J§

| 1 '
'«M h 8 3 B

On October 27, 1942, the President approved regulations relating to
wages and salaries prescribed by the Economic Stabilization/Director (7 E*R.
8748) under the Act of October 2, 1942, entitled 'ttAN ACT to amend the Emer­
gency Price Control. Act of 1 9 4 2 ,. to aid in preventing inflation, and for
other purposes” (Public No. 729, 77th CongresS'V 2d Session) and Executive
Order No. 9250, dated October 3, 1942 (.7 E.R. 7 8 7 l). ; Those regulations con­
ferred on the Commissioner of Internal 'Revenue authority to administer the
provisions thereof relating to the stabilization and limitation of certain
salaries. In the exercise of the authority so conferred on the'Commissioner
of Internal Revenue, the following .regulations, relating to salaries are here­
by promulgated.

TABLE OE CONTENTS .

\

ÿ t/

’ t l'^ Vf

StlBPiM "A. - - ; :LEEINITIONS Î j ' ; .

t

Sec. 1C92.1.
r.>- 1C32.2.

; 4h:\v--

General terms
Employee and.employer

-1002..-3.

E xecutive employées

^

.'

1002.4.
'Administrative employees'
4 ’,
1002.5.
Professional employees
1002.6.
Salary payments
1002.7.
Salary rate
. 1002.,8.,Insuranpe and pension benefits
■ 1002.9,. ,Approval by Commis sionër
'' '
SUBPART B. —

, it

Sec. 1002.13.
1002.14.

*êàÊjÊm

.
\

<:v.,

\-X*

‘

JURISDICTION OE COMMISSIONER

SUBPART C. —
Commissioner’s
Commissioner’s
SUBPART 2. —

Sec. 1002.15.
1002,16.

>v iT.i

* «

Sec.. 1Q02,TO. ‘ Amount of. ’
salary payment
. ' ' ,
,1002.11. • Conclusiveness. of determination
1002.12. Geographical scope
'
i• ... ,*}
. .

v-- ■■■'■.,

-

>.. ‘

-, ' ,
,
.. Mr-_& j

’:i'

SALARY INCREASES
approval required •
approval notrequired
SALARY DECREASES : ‘

Salaries under $5,000
Salaries over $5,000 .
(over)

\

, ,.:
-

^ 2i

(T* D. 5186)

'

m n m W M T ù L EMPLOYEES

SUBPART

Sec, 1002« 17, ‘ State arid local employees
SUSPAST E. —
Sec« 1002«18.

LIMITATIONS ON 'CERTAIN SALARIES

Basic allowance

1002,19» : Charitable contributions
10Ò2.20* Insurance^ premiums '
1002,21.' Fixed Obligations

*

;‘.

•

1002.22* Federal taxes
1002,23* Multiple employers
1002,24* Limitation On 1942 salaries
*1QQ2»25.,. Community property
1002*26. .TaXeÿ^V. ÿeaT ’
;
••1002«37..
-V
' '.Effective
I
'.-¡.y;date
. .
.
.
■
tr *?'

SUBPART G* —

/ •»*

,ft

EFFECT OF ’l l i A T O PAYMENTS

Sec, 1002*28.«. ' Amounts disregarded
1002„29* .Criminal penalties
1002,30, Salary. allowances under Code
SUBPART H, —
Sec* 1002,31*
1002*32«
1Ô02.33*
1002,344

EXEMPTIONS

Exempt employers
Statutory salaries
Services in foreign countries
Foreign employers'’

AUTHORITYi Secs. 1002.1 to 1002*34, inclusive, issued under Puh* Law
729j 77th Gong*, 2d Sess*j E*0* 925Ô* 7 E.it 7871 ; Regs, of Economic StaMli
Ration Director, dated October 27',' 1942, 7 :E.R*: 8748,
SUBPART A, —

DEFINITIONS

^

Sec* Î002.1, General terms, — - When used in these regulations, unless
otherwise distinctly expressed or manifestly incompatible with the intent
thereof —
..............
’v
'A*
(a) The term ’’Act” means the Act of October 2, 1942, (Public
No, 729, 77th Congress) entitled ’'AN ACT to amend the‘Emergency
3ftbice Control Act of 1942, to aid in preventing inflation, and
for other purposes"*
(b) The term "Board" means the National War Labor Board .
created by Executive Order No. 9017, dated January 12, 1942 (7 E.R*

237)* .'

/

m m i

(c) The term "Commissioner" means the Commissioner of
Internal Revenue,
v ‘r *l

(T. D. 5186)
(d)
The term 11Cede11 means the Internal Eevanue Code, as amended
and. ^supplemented.- .•
: r;-'
; (a)
Code*

The term ’’p e rs o n ” h as the same m eaning ®fi;when -used in th e
*
¡|§M|
••
<

(f) The term ”G-eneral Regulations’* means regulations (relating
to wages and salaries) issued, by the Economic Stabilization Director,
,. approved by the President on October 27, 1942 (7; E*R. 8748)» and as
:; amended or supplemented by subsequent regulations issued, by the- Eco­
nomic Stabilization Director relating to wages and- salaries.
(g) Th'e .term ”in contravention of the. Act” means, .in contravention
of the Act of October 2, 1942 (referred to in paragraph (a) above),
Executive Order No* 9250 of October 3, 1942 (7 E. R. 7871), the General
. Regulations., these regulations and other rulings and regulations pro­
mulgated under such Act.
Sec. 1002.2. Employee and Employer. — - An employee, for the purposes of
these regulations, is; an individual who performs' services for compensation
where the relationship between him and the person for whom, he performs the
services is the legal relationship of employee and employer. An employer is
any person, for whom an individual performs any services, of whatever nature,
as the employee of such person. The term ’’employer” is not limited to private
persons engaged in trad© or business, but includes organizations which, under
section 101 of the Code, are exempt from income' taxation, and .also government
departments and agencies. The existence of the legal relationship of employer
ancL- employee- is. to; be ascertained in the light of the general purposes of the
Act and the G-eneral Regulations.
■
- Generally» •the legal relationship of -employer and employee exists when
the person for whom .services are performed has the right to control- and direct
the individual who performs the services, not only as to the result; to be ac­
complished by the work done, but also as to the details and means by which that
result is -accomplished. An employee is-generally subject-to the will and con«*
trol of the-employer-not; only as to what shall be done but how it shall be done.
In this connection it is unnecessary that the employer -actually direct or con­
trol .the. precise jne^uer in which- the services are performed5-, it is sufficient
that-hp has the right to do so. The right to discharge is also an important
factor indicating that the person possessing that right is,- an employer.
Other factors characteristic of an employer, but not necessarily present
in every case,; are the-furnishing of** tools and the furnishing of a.place to
work to the individual who:performs .the services. In general, if an individ­
ual is subject to the control or direction of another merely as to the result
to be accomplished by the work.and.not •as to-v the- means and methods for accom­
plishing; the result,-he; is an independent contractor.. An individual perform­
ing services as an independent contractor is not pn employee, as to such serv­
ices. Physicians, lawyers, architects, contractors and others who follow an
independent trade, business, or profession in which they offer their services
to the-;public are generally independent contractors and not employees. Whether
the relationship of employeivempl oy.ee exists will be determined upon an ex­
amination of the particular.facts of:.each case*-(over)

(T* D. 5X86)

^ 4 -

If the relat ionship of employ or and employee, exists the designation or
description of the relationship by the parties;as anything other ^than that of
employer and employee is immaterial* If such relationship exists» it is of
no consequence that the employee is designated as a partner, co«?adventurer,
agent or Independent contractor* The measurement, method, or designation of
compensation is immaterial if the relationship of employer and employee thus
in fa,ct. exists*
i; .,v *
' ' An officer of. a corporation is an employee of the corporation but a di- ^
rector aS such is not* A director may be an employee of the corporation, how­
ever', if he performs services for the corporation other than those required by j
attendance at and participation in meetings of the board of directors*
.'Sec* 1002.3. Executive employees* — An individual *employed in a bona
fide executive capacityn means any employee — '

(a) whose primary duty consists of the management of the establishBeil
in which he is employed or of a customarily recognized department or sub- J
division thereof, and
(b) who customarily and regularly directs the work of other em­
ployees, and

(c) 'Who has the authority to hire or fire other employees or whose
suggestions and recommendations as to the hiring or firing and as to the
• advancement and promotion or any change of status of other employees will
be given particular weight, and
(&)

idio customarily and regularly exercises discretionary powers,

and

•v

fe) who is compensated for.his services on a salary basis at not
less than $30 per week (exclusive of board, lodging, or other facilities),I
, and
(f) whose hours of work of the same nature .as that performed by
employees.not employed in an executive, administrative or professional
' capacity do nbt exceed 20 percent of the total number of hours worked
in the workweek by the Employees under his direction; provided that
■ this subsection (f) shall not apply In the case of an employee who is,
’in sole charge of an independent establishment or a physically separated
branch establishment.

Sec* 1002*4; Administrative employees. — An individual 11employed in a
bona fide administrative capacity1’ means any employee —

'* £

’ '
-

(a) who is compensated for his services on a salary or fee basis
at a rate of not less than $200 per month (exclusive of board, lodging,
or other facilities), and
fj‘

‘

(b) (1) who regularly and directly assists an employee.in a
'-boha fide executive or administrative capacity (as such terms
;are defined in these regulations), where such assistance is
nonmanual in nature and requires the exercise of discretion
and independent judgment; or

(2 ) who performs under only general supervision, re­
sponsible. nonmanual .office or field ¡-work, directly, related
to management policies'.or general, business:-¡operaticxns»along
.* . sepcialized or ■technical •linos.;req.i>iripg0sp$cl^ :%rni,iiiiig* :
;
:c .. experience, or knowledge, and which.-requires the exercise of
<t utr*.y,
discretion and independent judgment? crj
^ I | 4 |a"5 • '■ j;
(3) ’ whose work involves the execution under only general
n^ervisipn .of .special nonmanual assignments-.and
¡directly
'related to .management ,^oii.cies or ¡general busings,s operations
' Involving’the exercise, of discretion¡epd, independent Judgment^ pr
.
• (4). who is. ..engaged .in transporting ,
goods ■cr passenge-rs- .'for
. hire .and who. performs.-,, .under only ,general- supe-rv^islcn^.rre^ponsible
outside work, of a specialized .or .technical :nftture. kequi.ring special
training, experienc-e,. or knowledge;,.;- and, whose." du,ties require, the
exercise of;discretion, and independent-.4udSPe^t>>>-,. v? j

"

Sec, 1002. p. Prof essl^n^. employees, — •» Any.individual nemployed in a
bona fide professional capacity.u means- any empl6yee,:
w ho:
.i S r ^
;v

^ ^

. (a);
-engaged in work.

tk&

fcrffip

(1) predominantly .-.intelleotual.. and;' varied in- .character as;-. .
opposed to routine mental, manual, mechanicals or.¡physical.<rwo!rk,
and
I}'/:

■ ' (;; .

; «• ■
;
* ... , J $ /
:
(2 ) requiring the.consistentrexercise of discretion and judg.. . ment,In .Its performance, and;
^
'M-f- -

,r '‘

(3) of such a character that, the output •produced;or the result
accomplished cannot be standardized in relation to a given period
of-time, and
(.
•.
yyy| v:'."*.:?-.. ; ■-•1

(4) whose hours.o f .work of the ssme nature as that performed.,
by employees not employed in an executive, administrative or pro­
fessional capacity :do -not exceed, .2.0 percept .-of, the|:hqur;s worked in
the ..workweek by such employees; provided that where such non-pro­
fessional work is an essential part of and necessarily incident to
work of a professional nature, this subsection (4) shall not apply,
and
(5) (a ) requiring knowledge of an advanced type in a field
of science or learning customarily acquired by a prolonged
course of specialized intellectual instruction and study, as
distinguished from a general academic education and from an
apprenticeship, and from training in the performance of routine
mental, manual, or physical processes; or
(B) predominantly original and creative in character in a
recognized field of artistic endeavor as opposed to work which
can be produced by a person endowed with general manual or in­
tellectual ability and training, and the result of which depends
primarily on the invention, imagination, or talent of the em­
ployee , end

(over)

(T. D. 5186)

- 6 -

(b) compensated'for his services on a salary or fee basis at a
rate of not less than $200 per month (exclusive .of hoard, v.'¿edging» or
other facilities);'provided that this subsection (b) shall not apply in
the case of an employee who.is the holder of a valid license or certifi­
cate permitting the practice of law or medicine or any of their branches
and who is actually engaged in the practice thereof#.
Sec. .1008.6. Salary •payments. — The terms "salary" and sal ary payment"
mean only such salaries over which.the Commissioner has jurisdiction.
(See
section 1002.10 of these regulations.) These terms are not used in any re­
stricted, narrow or technical .sense, but encompas.s all forms of direct or in­
direct compensation for personal services of an employee which is. -computed on
a Weoicly, monthly, annual or other basis, other than wages v;(as defined in the
(JeheraT Rogul at ions 'and in orders or rulings of the Board). . Bonuses, gifts,
loans, commissions, fees, additional compensation and any other...remuneration
in any form or medium whatsoever are considered as falling within the concept
of ‘'salary11 or "salary payment".. Any compensation which is not .regarded/ as
wages in the commonly accepted sense of; the term is salary potwithstanding,,., „^
that it may be computed on an hourly, daily or piece-work basis#
Retainer fees paid to an individual, not otherwise an employee, are not
to be considered as salary. Insurance and pension benefits in-a reasonable
amount (see-section iQ02.8) are likewise excluded from the terms, "salary"
and sal ary payment "* '

'in s

on 1

Ifbnnng;

p | r fo;
feshall n<
tialoyer
■úaeets 1
Si tie contri
f a of the
Mono hy a

J si licose'
Although the terms "salary" and "salary payment." do not include any com­ j {tira166(a)
pensation'Other than for personal services of an employee., the Commissioner
is not precluded from determining, after investigation, that amounts denom­
inated, for example, as rents or royalties are in fact salary payments subject . Si the exti
P on'a pj
to the controls set forth in these regulations.
in coat
All amounts paid to, authorized to be paid to, or accrued t,o the ac­
a |i) ort
count of any employee during a calendar year for services rendered or to
iwinesg gj
be rendered are to be included as salary for such year#
* oi insura
■ p p t of b
Sec. 1002#7. Salary rate. — The term "salary rate" means .the rate
t#oyer.. ;
or aggregate of rates or other ..basis at which the salary for any particular
j
í "benefit the
:kfci":th£

I

' ^%loyee

(T. D. 5186)

- 7 ~

work, or service is computed., either under the terms of a contract or agree­
ment, express or implied, or in conformity with custom or usage existing^, ,,
in the employer1s business establishment* For treatment of commissions
and bonuses on ,a percentage basis see section 1002*14*
•Sec. 1002*8, insurance and -pension benefits. — Compensation may .
include insurance and pension benefits. In determining the amount of
'
salary of ah empioye e , the insurance or pension benefit inuring to such
employee is not measured by what' he”will be entitled to receive after the.
happening -of certain contingencies, but rather in terms of the amount
of «contributions or premiums paid by the employer. To the extent that
an insurance and pension benefit inuring to an employee is .reasoriable in
amount', such benefit is not considered as salary as defined in section .
1002*6*
':
'si .
Section 165(a) of the Code sets forth the conditions under which a
trust forming part of a stock bonus, pension or profit-sharing plan of
an employer for 'the’'exclusive benefit of his employees or their beneflciarie.S: shall not be taxable for Federal income tax purposes.; Contributions .
by an employer to an'employees1 trust or under an annuity plan, which trust,
or plan’meets the- exemption requirements of such section 165(a) (as of the •
date the contributions are made), shall be considered as reasonable, re­
gardless of the amount of such contributions. On the other hand, con­
tributions by' an employer to an employees’ trust which is. subject to
Federal income taxation-because it does not meet the requirements of such
section 165 (a) shall bo treated, for purposes of these regulations, as
salary.: i
• • ..t''
\ j; 3
• . To the .extent; amounts paid by' an employer on account of insurance
premiums on"a policy On the life of an employee are deductible, by the
employer'in computing net income under the conditions set' forth in seç'tiori:23 (a) of 'the Code (relating to deductions for ordinary and neces­
sary business expenses), such' amounts are hot considered as salary. The
amount of insurance premiums -that will be considered as falling outside
the concept of salary cannot exceed the amount of such premiums deductible
by the employer, for Federal income tax purposes. ; If, however, such in­
surance premiums are' includible in the gross income of the employee (for
whose benefit .the insurance has been taken out), as well as deductible by
the employer^ .the. amount which shall not be considered as salary in respect
of such .employee may hot exceed 5 percent of the employee1s annual salary
determinedwithout.;the"inclusion of'Insurance and pension benefits.
The application of the preceding paragraph may be illustrated by the
following examples* An employer having 20 salaried employees takes out
life insurance policies on each of such employees in favor of beneficiaries
designated by them. The premiums paid for 10 of the employees are in each

(over)

(T. D. 5186)

~ 8 ~

■"ihStànôé' 7 pëfcéht of the employee ’s annual salary .(exclusive'’of insurance
and -gènèion "bonefits), As to-the remaining 10 employees thè premiums’in
each ihstàncê':afë 5:percent of the employee 1s annual'salary (exclusive of'
insurance and pension benefits);■ It is assumed that With respect to each
employee the premium paid would he includible in his gross income under the.
Co de vând would be deductible by the employer under’deption 23 (a)'of the
Code, "As ;to the first 10 employees •3 percent of the prèmiiirns‘in'each' '
instance will be1 considered as salary, whereas no part oftthe premiums."
will be considered as salary in the Case of the -second"group of employees.
If, however, none of the premiums were deductible in'computing the net
income of ■thè enplòyer, then'the entire amount
thé premium in each in-'
stance would b;é considered as salary to the employee involved.
...
Premiums paid by an employer on, policies of group life insurance' '
without cash surrender value covering the lives of his employees,, or,on
policies -Of group "health or accident insurance, the bè'néìiciarles Of 'which
arc designated -bÿ- such employees do not constitute s’
alary (regardless of
the- amount Of salary otherwise received annually by Such employees) i f .
;s'UCh- premiums are" deductible by' the employer under section 23(a) of thé '
-■Gô'dé', d •: '
‘
^ V' ;dp'.'! vie ::!
'
Sec,- 1002.-9
Approval by ‘Commis si oner. — Wherever the terms ^approval
by the Commissioner11’ and 11de termination by thè Commi ss iòner11 are used in ■
these régulât ions 'they shall, except as otherwise'provided, include an . ..
approval o’
r determination by a regional officer of the Salary Stabilisation
Unit- e&tabl'ished by the Commissioner under Treasury Decision 5176, which
officer is authorized to make such determination. If an approval of deter­
mination made by such regional officer is subsequently modified or reversed
by the Commissioner, such approval or determination:shall be deemed to have
been continuously in effect from its original date until "the first daÿ Of
the'pay-roll period following reversal- or modification, or until such later
date-as the Commissiorier may provide in his ruling.
"
an employer obtains the approval Of a. regional .officer,,
of-the'--Salary- Stabilization Unit that a proposed "increase .in certain
salaries is permissible.-- The approval, ds given on January 2, .1943, and the
salary1increase -is 'to become effective January 15, 1943, On March 15, .1943,
the Commissioner determines'that the salary increase was not proper and' reverses
the approval given by the•regional officer. The Commissioner provides in his
ruling that thè increase in salary shall be discontinued after. March 31,. 1943,

I % sue:
«
K Ï ,

(T* D. 5186)

~'-9 ~

For purposes of these regulations, no:part* of the salary for the period be’tween January 15 and March 31 Shall:he considered to have been in contraven­
tion of the.. Act,
■SUBPART B —

JURISDICTION OF COMMISSIONER

Sec* 1002,10* Amount of Salary Payment, 1
— The General Regulations pro­
vide that the Commissioner shall have authority .to determine, under regulations
to he prescribed by the Commissioner with the approval of the Secretary of the
Treasury, whether Salary payments are made in contravention of the. Act* The
Commissioner’s jurisdiction is confined t o —
(1) salary payments in excess of $5,000 per annum, in the case
of individuals employed in any capacity whatsoever; and
(2) salary-payments of $5,000 or less per annum, dn the case of
individuals (i) who are employed in bona fide executive, administrative
or professional capacities, and £ii)^who, in their relations with their
employer, are not represented by duly recognized or certified labor
organizations, and (iii) whose services are. not within the meaning of
’’agricultural labor” as defined in paragraph (l) of section 4001*1 of
the General Regulations,
Other salary payments are subject either-to the jurisdiction of the Board or
the Secretary of Agriculture, as prescribed in the General Regulations* If,
for example, a salary is to be increased from $4500 per annum to $5200'' per
annum (and subdivision (2) is inapplicable), approval of such increase, if
required, must be obtained from the-Board,
,■ ' ' r ;
Sec. 1002,11* Conclusiveness of Determination, — (a) Any determina­
tion by the Commissioner that a salary'payment is in contravention of the Act
is conclusive in every respect upon'all executive departments and agencies
of the Federal Government for the following'purposes —
(1) determining costs or expenses of any employer for the pur­
pose of any law or regulation, either heretofore.‘6r-hereafter enacted
or promulgated, including the Emergency Price Control Act of 1942, or
any maximum price regulation thereunder;
(2 ) calculating deductions under the revenue laws of the United
States; or
(3) determining costs or expenses under any contract made by or
on behalf of the United States,.
(b) Any such determination of the Commissioner is' final, and not subject
ro review by The Tax Court of the United States' or by any court In any civil
proceedings, Nothing herein is' intended,, however, to deny the right of any
•employer or employee to contest in The Tax Court;of the United States or in
any court of competent jurisdiction the validity of — (l)
any provision of these regulations,, on the ground such
provision is not authorized by law,, or
(over)

10

(T. D. 5186)

-

(2) any action taken' o r .determination made under these-regula­
tions, on the ground that such action or .determination is not- authorized,
or has not been taken or made in a manner required, "by law.
(c) No increase in salary rate shall result in any substantial increase
of the level of costs or furnish the basis either to increase price ceilings
of the commodity or service-involved or to resist otherwise .Justifiable re­
ductions in such price ceilings,

Jiai

■ilsfi
jjbrS
,

* Sec. 1002.12, Geographical•Scope. — The provisions of these regulations j ¡ïfOcto
shall not apply to salaries in any Territory or possession of :the United StatesAjreject
tfîti
except Alaska and Hawaii,

l!6or

subpart

o —

salary increases

Sec, 1002,13, Commissioner* s approval required. — Section 1 of the Act : ifor ii
provides in effect that salaries, so far as practicable, shall be stabilized
at the levels which existed on September 15, 1943. In the case of•a salary
rate of $5,000 or less per annum existing on October 27, 1942, or established
thereafter in Compliance with these regulations, and in.the case of a salary
rate ,of more than $5,000 per annum existing on October 3, 1942, or established j
thereafter in compliance with these regulations, no increase .shall be made "by went
the employer, except as provided in section 1002,14, without prior approval of |«lire
such increase by the Commissioner.- Any salary-increase made before the require! laploj
approval of the Commissioner is obtained is from the date of such increase in i
contravention of the Act, (See sections 1002^28 and 1002.29 for the conse| flcêpt a
quences of a salary payment made .in -contravention of the Act,) The Commissionej ficatioi
may, however, approve an increase in -salary .rate to be effective as of the date11brith tl
of the application for approval,
j;:!iéïnal Be

1{place oj

The burden of justifying an increase in salary rate shall in every in­
p forms
stance be upon the employer seeking to make such increase. Increases in.
j * ay be
salary rates will not be approved unless necessary to correct maladjustments
or inequalities, or to aid in the effective prosecution of the war. A promise i
feiooa;
made by an employer to his employees prior to October 3, 1942.that salaries
Vll floi
would be increased in the future, is generally to be ignored in:determining
^terms
whether an increase after that date should be approved. The same rule is
applicable with respect to a promise made by an employer prior to October
27, 1942, in the case of employees whose salary rates are $5,000 or less per
(l)
annum. A salary increase, however, may be‘approved, as to salaries below
$5,000 per annum, if to deny such increase would be to force the continuation^
|
(2)
of a salary which is below the general level existing for the same or comparab %s,
work in the local area on September 15, 1942-, :
An employer who has established a new job classification, or who has be­
gun business, .after October 3, 1942, must obtain approval of the Commissionerj
for the payment of salaries-for.suCh job classification or in such hewbusinesi
provided, -however, that if the salary rates in question are'not in excess of
those prevailing for similar job classifications within the local area,; the
approval of the Commissioner is.not required. An increase in a salary rate
for a job classification established after October 3, 1942, shall be subject
to the limitations provided in this- Subpart.

ft! on ie
w

■w,

(T, D. 5186)

m\

Efii

laiy
C3KI

iisSlii

S6
jtaj

-

11

A mere change in the name, organization, or financial structure of an
employer, .whether such employer he an individual, partnership or corporatibn,'
will not in itself he sufficient: for a-finding that,, for the purposes of these
regulations, a new busines's has heen begun or new.job classification estab­
lished after such change.
Any change in'a salary, rate, regardless of its effective date, which
results from an award or decision of an arbitrator or referee' made after
October 3, 1942, in the case of salaries of more than $5,000 per annum, and
after October 27, 1942 in the case of salaries of $5,00Q or less per annum,
is subject to the provisions of these regulations notwithstanding that the
agreement or order for arbitration or reference was made oh or before October
3, 1942 or October 27, 1942, as the. case may be.
Unless otherwise expressly exempted, any change in a salary rate, pro-:

ttl ofi | vided for in any- agreement existing as of October. 3, 1942 in the case of

teJij

oh'i j
or tiUfi j
se of
.«H
halloas
¡rior
jefore.fei
sueHnsj

b

Salaried of more than $5,000 per annum, or as of October. 27“, 1942 in the case
of salaries of $5,000 or less per annum, which is to iake effect at some future
date or on the happening of some future event, is subject to the provisions of
these regulations regardless of when the agreement was made/
Payment for overtime will constitute an increase in Salary rate, and thus
will require the approval of the Commissioner, unless the customary practice
of the employer has* been, to pay fgr overtime, and the rate has not been changed.

Except as may be otherwise provided from time to time by the Commissioner,
an application for the approval of a salary increase shall be filed by the em­
fond ployer with the regional office of the Salary Stabilization Unit of the Bureau
of Internal Revenue in whose territorial jurisdiction the main office or principal place of business pf the employer is located. Such application shall be
filed on forms prescribed by the' Commissioner and shall contain such informa­
tion as may be required by the Commissioner,

for#I
j bkl

Sec. 1002,14, Commissioners approval not, required. — - The Commissioner’s
approval is not required where an increase in salary .rate is made in accordance
with the terms of a salary agreement or salary rate schedule in effect on
October 3, 1942, or approved thereafter by the Commissioner, and is a result of—
(1)
(2)
range s,

individual promotions or reclassifications,
individual merit increases within established salary rate

(3) operation of an established plan of salary increases
based on length of service,
(4)

increased productivity under incentive plans,

(5)

operation of a trainee system, or

(6) such other reasons or circumstances as may be prescribed in
rulings or regulations promulgated by the Commissioner from time to time.
(over)

(T . D, 5186)

« 12 —

For purposes o f t h is s e c tio n , the term ’’ s a la r y agreement” or ” s a la r y rate
schedule” .may .include a s a la r y p o lic y in e f f e c t on October 3 , 1942, even
though.not evidenced b y -w ritte n c o n tra c ts or w ritte n ra te sch ed u les. For
example, a s a la r y p o lic y may be determined from previous p a y r o ll records or
oth er p a y r o ll d a ta . The e x iste n c e o f such p o lic y , however, must be estab lish ed
to the s a t is f a c t io n o f the Commissioner* and the burden o f p ro o f r e s ts upon
the employer. In such c a s e s , the employer in advance o f making an increase in
s a la r y rate may reduce the s a la r y p o lic y to w r itin g and-secure approval there­
o f by the. Commissioner,
A bonus or other form o f a d d itio n a l compensation which does not exceed'
in amount the bonus or oth er a d d itio n a l compensation -to su ch ' employee fo r
i
the la s t bonus year ending b e fo re October 3, 1942 does not require approval
by the Commissioner^ In a d d itio n a bonus based -upon a fix e d percentage o f
s a la r y where. the percentage has n o t; been changed, does not require approval
by the Commissioner even though the amount m aybe in creased due to an authorized
in crease in s a la r y . Any. o th er bonus or. other form o f a d d itio n a l compensation,',
req u ires approval by the Commissioner. Where the com pensation, or p a r t'th e r e ­
o f , i s p aid on a commission b a s is and i s based upon a fix e d percentage (which :
has not been changed) o f s a le s made by the employee, a payment does not require
approval by the Commissioner even: though the amount'may represent an increase
due to in c r e a s e d .s a le s by the employee* See, however, Subpart F o f theser e g u la tio n s .
The p ro v is io n s o f t h is s e c tio n may be -illu s t r a t e d as follow s?
(1) The X Corporation began bu sin ess in 1940* As o f J u ly 1 ,
1942, pursuant to a corporate r e s o lu tio n d u ly p assed in Jan uary
1942, a l l o f i t s s a la r ie d employees re ce iv e d more than $5,000
per annum. No approval o f the Commissioner i s req u ired to i n - ;
crease the s a la r y o f an employee who i s promoted in November 1942
from a salesman to gen eral manager and who r e c e iv e s a s a la r y w ith in
the s a la r y range, p a id p re v io u s ly to in d iv id u a ls occupying thè p o s i­
tio n o f general manager.
(2) The X Corporation In December 1942 wishes to e s t a b lis h a new s a la r y rate schedule r a is in g the le v e l o f compensation o f
a l l i t s s a la r ie d employees. Approval by the Commissioner o f such
schedule i s re q u ire d . Assuming th a t such approval has been ob­
ta in e d , fu rth e r approval by the Commissioner o f.a n y adjustm ent
under such schedule coming w ith in t h is s e c tio n i s not re q u ire d ,
(3) The Y Corporation begins b u sin ess on November 1 , 1942.
The s a la r ie s p a id by i t to i t s employees are commensurate w ith s a la r ie s paid

\

(T. D. 5186)

- 1-3 -

by other employers in comparable businesses in the same local area*
Payment of such salaries does not require the approval of the Com­
missioner, Any increase in salary rates, however, requires the ap­
proval of the Commissioner,
(4) The M.Corporation, which has manufactured furniture since
1925, is reorganized in November 1942 and emerges from the reorganiza­
tion proceedings as the N Corporation,. There is ho change in the nature
of the business although there is a substantial alteration in the finan­
cial structure of the company. The N Corporation is not to be treated
as a new employer beginning business afte.r October 2?, 1942, Conse­
quently, any general increase in salaries over and above those paid by
the M Corporation requires the prior approval of the Commissioner,
(5) Employees of the Z Corporation have customarily received a
bonus of 5 percent of their annual salary at the end of each calendar
year. If, for example, one of the employees received $6,000 in 1941
but received salary of $7,000 in 1942 due to a-salary increase on July
1, 1942, a bonus of $350 may be paid to him for 1942 without prior ap­
proval of the Commissioner, notwithstanding that his bonus for 1941 was
only $300.
SUBPART D —

SALARY DECREASES

Sec. 1002,15. Salaries under $5,000. — In the case of a salary^rate ex­
isting as of the close of October 3, 1942, or established thereafter in com­
pliance with these regulations, under which an employee is paid a salary of
less than'$5,000 per annum for any particular work, the general rule is that
no decrease can be made by the employer in such salary rate below the highest
salary rate paid for such work in the local area between January 1, 1942 and
September 15, 1942. A decrease is permitted, however, with the approval of
the Commissioner, in order to correct a gross inequity in any case or^to aid
in the effective prosecution of the war. Where such decrease is permitted the
salary rate may be reduced below the highest salary rate paid for the work-in
question between January 1, 1942 and September 15, 1942. Except as otherwise
provided in this section, any decrease in such salary rate after October 3,
1942 shall be considered in contravention of the Act if it is made prior to
the approval thereof by the Commissioner,
Except as may be otherwise provided from time to time by the. Commissioner,
an application for approval of any salary decrease shall be filed in the same
manner as in the case of an application for approval of a salary increase.
See section 1002,13 of these regulations,
The Commissioner’s approval is not required, for example, in the follow­
ing cases where salary decreases are made after October 3,. 1942:
(1) The new salary rate does not fall below the highest salary.rate
existing belween January l,v 1942 and September 15, 1942 for the -particular
work in question or for the same or comparable work in the local area,..
(2 ) An employee has been demoted to a lower position than that
filled by him between January 1,. 1942 and September•15, 1942 and the
salary rate for such lower position is not less than the highest salary
rate existing for that position during the same period*
(over)

- 14 -

(T. D. 5186)

(3)
An employee has been .relieved of substantial duties and
responsibilities.
A disparity between salaries paid by a particular employer‘.and those paid
by employers generally in the local area does hot necessarily constitute justi­
fication, for decrease in salary rates paid.by such employer* .
Sec. 1002.16. Salaries over $5*000.— In the case of a salary'rate ex­
ist ing.as of the close of October 3, 1942, or established thereafter in com­
pliance -with these regulations, under which an employee is paid a salary of
more than ;$5,p00 per annum, the employer is permitted to..make, without approval
by the Commissioner, a decrease to a. rate not less than $5,000 per annum. If,
however., by virtue of a decrease the new salary paid to the employee is less
than $5,000 per annum, then the decrease below $5,000 per annum is subject to
the limitations of section 1002.15 of these regulations. .. To the extent that
prior approval by the Commissioner of a decrease is not required under section
1002.15 or.this section, such decrease shall not be considered as. being in
contravention of -the Act.,
... ....
SUBPART SJ —

GOVERNMENTAL EMPLOYEES . . ‘

ijli
Sec. 1002.1?. State and local employees, — An adjustment in salaries (noti teli
fixed by statute, see section 1002.32) may be made by a State, or any political j lit Oil
subdivision thereof, thè District of Columbia, or any agency or instrumentality Iée,
of any of the foregoing, on certification to the Commissioner that such adjust- JR S 6Ì
salary
ment is necessary to correct maladjustments, or to Correct inequalities'or
gross inequities. The:certification procedure :shall not apply to any adjustmenti
11
which would not otherwise require the Commissioner1s approval or which would
raise salaries-beyond the prevailing level of compensation for similar services j»'lags
in the area or community. A certificate .by the official-.or agency authorizing <¡1irsgar
Is'ispi
the adjustment stating the nature and amount òf such adjustment, and brieflysetting forth’the fact s>.meeting the foregoing requirementwill be ;accepted by Ntll
the Commissioner as sufficient evidence of the propriety of fhe adjustment, sub­
ject to review by the 'Commissioner. Modification by the Commissioner of adjust­
ments made by a governmental official or agency acting pursuant hereto shall
%
not be retroactive..
•■
.• - ilf ■
sauce0
In exceptional cases 'where such an adjustment is sought, and in all cases
where the agency seeks an adjustment other than by the certification procedure
application for approval shall be filed with the appropriate regional office
of the Salary Stabilization Unit.
*

SUBPART E —

LIMITATIONS ON CERTAIN SALARIES

“tothe

attedi!
?contrit

Sec, 1002.18. Basic allowance. — In addition to setting forth limita­
tions on increases■and decreases in 'salary rates, the General-Régulâtions pro­ !% 2
vide a ceiling on the amount of salary which may be paid to any employee during ttti
a calendar year. The general rule is that no amount of salary may be paid
y «
or authorized to be paid to or accrued to the account of any employee or
“fili
received by him during thé calendar year 1943, and in each-.succeeding, calendar ; h k
year, which, after reduction”by the Federal income taxes-on the amount-of such j
salary, computed as below without regard to ôther income and without regard to j forPmi
deductions or credits,"would exceed $25,000. ' Additional allowances of salary ;
which may be permitted in certain circumstances are described in sections 1002,;
to 10Ô2.22-, inclusive'.
* ■.i
•••:
'■
k

(T. D* 5186)

r %5 -

The amount of Federal income taxes referred, to-in the preceding parar*.
graph shall he determined —
(1) by applying to the total amount of salary (hut not in­
cluding any amounts allowable under sections 1002,19 to 1002,22»
inclusive, of these regulations) paid or accrued during the
calendar year in question» undiminished by any deductions, the
rates of taxes imposed by Chapter 1 of the Code (except section
466 thereof relating to withholding) as if such total amount of
salary were the net income (after the allowance of the appro**
priate credits), the surtax net income,1 and the Victory tax net
income, respectively; and
(2) without further allowance of any other credits against
any of such taxes, .

.jsT

dI

1

ip
ai

.

Assume that the rates imposed under Chapter 1 of the Code, as amended by
the Revenue Act of 1942, are applicable with respeot to the calendar year.
1943. Under the formula described in the preceding paragraph, the basic al­
lowance of salary for 1943 (which after reduction by,the Federal income taxes
would yield $25,000) is $ 6 7 , 2 0 0 . This latter amount is. the., maximum amount .of
salary which an employee would be permitted to receive for 1943, provided.he
is not entitled to further allowances under sections 1002,19 to 1002,22, in­
clusive. If the rates of Federal income tax applicable for 1943 should be
increased above those now existing in the Code for 1942, the basic allowance
of salary will be an amount greater than $67,200.
The' basic allowance of salary as described in this section represents.an
amount against which the appropriate tax rates are applied and remains the
same regardless of whether the employee is married or single or of the number
of his-dependents, if any* It is likewise unaffected'by the nature or amount
of his-other income (taxable or exempt) or by the extent of hid deductions.,
allowable for tax purposes generally.
For purposes of this Subpart an amount of salary, in addition to, the.basic
allowance of salary, will be permitted for any expenses paid or incurred by an
employee which are ordinary and necessary for the performance of the services
for which the employee is compensated. Ho such additional amount;, however,
shall be permitted for expenses which would not be. deductible in computing
individual Federal income taxes.

I ■
Sec, 1002» 19. Char itàbl e cont rlbut ion's. — An amount of salary, in a&diI tion to the basic allowance of salary described in section 1002.18, will bé
permitted in certain circumstances to allow an employee to maintain his custoj mary contributions to charitable, educational or other organizations described
in section'23'(o) of the■Code; Such additional amount of salary will be perv- mitted if the.employee, establishes to-thè satisfaction of the Commissioner that
Jii after resorting to his other income from all sources he would suffer undue
ls[ hardship-in maintaining his customary, contributions out of'the basic allowance
fi- of salary described in the preceding section.
For purposes of- this section and sections.1002.20, 1002.21, and 1002.22,
•11income from all sources,” includes income which is exempt under the Federal,
income tax laws.
h
...v,..-:--.

..What. co.ns titut es ••'boadp.a :hg,r4*ship^>.fort purpoSiCS:. oftthis section and section;
1002.20, 1ÒÓ2.21, and 1002.22, is dependent upon ài 1 the ci rcum stan ees 'ih eack
case.

sissl
Contributions .-may;be customary...within1 the- meaning of this, section even
though in the. particular;year-; in;-.question, ,th£;;organizations■to i.which; the con­
tributions are! madeiare-different- from.'those,-to whom .contributions -were made
in previous years*
Sect..10,02.20* Insurance premiums* * An amount- of Salary, in-addition to
the basic allowance.-under section 10.0.2-¿18. may .-be permitted.’'^ an 'employee un­
der this section to meet certain payments during;the-'e^iploye'e,s taxable year
for insurance premiums.
To be entitled to such extra allowance of salary the
employee must, e-s-tabli-sh „to :-th,e.:-satisfaction', of: th''e':Commis'sioher ;that after re­
sorting to other income from all sources (see section 1 0 0 2 .1 9 ) he is unable,
without disposing of assets at a substantial financial loss resulting in undue
hard.sh.ip».- to, meet premium^ payment's on\polici'es of ■•'life 'insurance irn''force and
eff ect -on October'3-, .19-h;2 '-on his lif e'» .
w$M
• ' 1 #^lNliiW§
. The premium-payments referred: to -in' the' preceding paragraph are'those
which- are required: to; he met durihg' the' calendar year in question-. -’
>Wo :allow­
ance for- salary; is-permissible-fo.r payments of- premiums 'which are dhein
.future, ¡calendar': year s* ; : -• .-; ■
* -hns **£
-;'•
-r- '
I'd If any insu.r.ance has" been p'ermi t ted by- an-: employee 'to '1 aps e;af ter 0ctober
3, 19^2, no allowance for salary is permissible -for'payments of‘premiums on
policies taken out after such date, even though the total annual premiums on
the-new- policies.- are. ho t in 'excess"of the total annual'pr-eMurns 'due on policies
in. effect -.on October.'.3v 19'^2. - Renewal of policies in' effect on; October"3'->
19^2 (even though new premiums- are-higher) •will -no t*-preclude:-âppli eabili t'|'of
this section to premium payments on-the'renewed policies. '-'ôéheraily, 'in; the
case of a conversion, of a policy in effect1on October 3, 19^-2-lo, a'new policy
requiring payment of higher premiums, this section is-inappTicable to the"'
annual amount by which the new premiums exceed the premiums in effect on
October 3> TQ

Is si

ter

toil

perni

lift
ite
'sala
lovai
teal]

Is j

Ü

•ore 1
tó s e

fetji

¡fifèii

iparati)

feto3
As .used i n ‘this section, and Sections 1002.21 a n d -1002.22/ subst'antial;;
iDloied
financial loss is not necessarily'confined to a loss suffered, on disposition
wtiret
of assets at depressed prices -substantially below cost to the ;empl,oyee.i; The
sitile
present value in use or in production of income and the potential future value
®vith
are factors to be considered. For the purpose of this Subpaxt., the .provisions lîln■
of the ‘Code governing the determination of loss upon disposition of*, assets-are
poi tfe
tea
not controlling.
' '
.
■

III

'i- ' Sec.-' 1002.21. 'Fixed obligations-. — An amount of. salary in-addition to
B a!
the basic allowance under section 1002.18 may be. permitted, to an •employee-, under
this section to make required payments during the 'employee's taxable year on
fixed obligations. Before any amount will be allowed under., this sections .the
employee'-must establish 'to ’'the satisfaction of the' Commissioner that, after-.re­
sorting to his income from all sources (see section 1 0 0 2 .1 9 ) » he is unable,
«I
‘/Hi
without the necessity of disposing of assets at. a substantial financial loss
resulting in'undue- hardship:, -to' meet required"payments,,o£,.fixed obligations: for
.Siilo
which-he was obli-gated on October 3 » 1 9 ' f e
Seé sëction" ÏÔ 0 2 .20.
..

il

■Ohe term ^fixed obligations11 as used in this section means any enforce­
able liability of the’ employee the amo db.t of which iiabili ty 'was fixed and
determine d o n October
In’no. event is an allowance, for salary per­
missible under this section fò.r .the payment of any. amp tint, due in future years*3

x

^

3

^

*

Sec.,1002.* 22. federal' taxes,* — .An amount of salary in addition to the
basic allowance under section 1002*IS may be permitted to an employee, under
this section,. to:meet,payments during the employee1s taxable year of certain
Federal income taxes* To be entitled to such an additional allowance of sal­
ary the employee must establish to. the satisfaction of.the. Commissioner that
after resorting to his income from all sources (see section 10.02.*19) »:he isunable, without disposing of assets at a substantial financial lo§s resulting
in undue, hardship, to. meet, payments of certain Federal income taxes, more
fully described below.
See section 1002*20*
An. allowance for additional salary is permissible; .in order to pay Federal
income taxes, owed by the employee himself for any prior taxable year, but is
not permissible in order .to pay any Federal income tax, due on the basic allow­
ance of salary'under section’Ì002.18, .except as this allowance is applicable
for 19^2* See section 1002*2U. Thus,, an amount for additional salary might
be allowable in 19^3 to meet-the payment, of the entire Federal income, tax due
on a, salary received in 19 U 2 . In Ì9 M 1 an amount for additional salary might
be allowable to meet the.payment, of Federal income tax due on, additional
salary allowances permitted .for 19.^3 under, sections ,1002*19». 100 2*20, 10 0 2*21
and this 'section fòt* 19 ^3 » hut no amount, however,, would, be, .allowable to meet
the payment of the Federal income, tax. due on the basi 0 allowance under section
1002.1S for 19^3*
Sec. 1002* 23» • Multipie,^employers« — Salaries payable to an employee
from mòre than one employer, may, for purposes .of Subpart F, be treated as if
all such salaries were payable by
single employer, regardless of the finan­
cial or other relationship of. the several employer’
s*. For example, individual
received a salary as an employee of the X Corporation and also as an em­
ployee of its subsidiary, the T Corporation. Both the X Corporation and the
Y Corporation are required to adjust ,their salary arrangements with such em­
ployee to conform with the provisions of these regulations* If individual B
is employed by the M Corporation and the IT Corporation, both of ,whom, are
owned, directly or indirectly,.by the same person or'persons, the M Corpora­
tion and the F Corporation must adjust their salary .arrangements with B to
conform with the provisions of these, regulations* If individual C is employed
by the R Corporation and. th.e;S Corporation and both corporations have know-ledge of that, fact, they ..must adjust their'salary arrangements with C to con­
form with the provisions of these., regulations.
a.

k

Where an. individual is employed.by two or more employers who , under these
regulations, are required to make salary arrangements in order to conform
with the provisi.ons of Subpart F, .such individual and .employers will be deemed
to be acting in contravention of the Act and these regulations if proper sal­
ary arrangements- are- not made* In any event,,no employee may receive any
salary in ¿xcess of that, allowed under Subpart F* See section 1002*30*
.Sec* 1002.2 U.. Limitation, on 19^2 salaries.* — Uniess payment thereof is
required under a bona fide contract in effect on October 3 , 19^2» no^amount
of salary shall be paid or authorized to be paid to or accrued to the account
(over)

(T. D. 5186)

- 18 -

of any employee or received ¡by 3^im g.f.tey O c t o b e r - 1942 and before Jannary
1, 1943, if the total salary paid, authprl-zedy;.accriiied;, of.- received for the
calendar year 1942 exceeds the amount, pif salary which -would: otherwise-he al­
lowable under section 1002*18 (but not under sections 1002,19 to 1002*22,. in­
clusive) and also exceeds the total, salary. pa^d;,.authorized, .accrued or re­
ceived for the calendar year 1941*. ..Ïbr^^p-Csë.s^o-Î; thi-s" section, the térm11bo na-fide contract" means a leagally .enforceable.--agreement, •written 0r;oral.
Such an agreement may be evidenced by a, bona fide resolution of à board of'directors of a corporate' employer .passed cm or .'before October 3, 1942. Theamount allowable under section 1002,18 -for. 1942 (before..reduction b y :aûÿ-‘•
Federal income taxes) .'is $.54:,428*.57>. ‘
f .
t B /;
.•••
1:- ' *
»
Sec. 1002.25. Community pro-perty-.,-The..1 imi tat,jons on salaries provided
for in sections 1002.18 to 1002,24, inclusive, shall in nowise be affected by
o.ny community property law. For example.,, .an/.employee resident in the State of
R receives a salary in'1943' of $100., OQQ.,/.,; Under.; the ;l;&ws ..òf- that. State, $50*000
of that salary is deemed to be thè property..of.-,'-the. employee1s wife,- For pur­
poses of these regulations, the employee^ s_ salary-is ,$100,000,'.not •$50, OOGi'.- Sec. 1002.26'. •Taxable year.,.— .For, purposes.-,of Subparts F and G- of thèse
regulation's', -thè"tern "taxable year" of pn employee (shall mean the' calendar''
year during-which the Salary in question is paid-,or authorized' to be'paid to
or accrued-to 'thé' account of such '-employee. qr,.received, by -him-. • This rule is
applicable-regardless of whether the pmpipypr, qr-employee-,- or. both,, file :
Federal income tax returns for, à fiscal .year .o.r -report, income, "for Federal .£
income 1tax purposes, on an acc'rual basis or on the cash receipts, and disburse­
ments basis.
Sec. 1002.27* Effective date.. — " The~ proyisions bf this- Subpart, except
as.provided in section 1002.24, shall be, applicable to all..-salaries, paid of'accrued after December131', 1942.; irrespective,.-of when:
,payment or: accrual of-'such salary-was authorized and i'rrespective.,, -also, of •any-contract or agree­
ment. made prior-to or after such date,,...
t....,•
"'!
SUSP ART

O''~r EFFECT. 0 $ vukkAWFUL -PAYMENTS ■;

Sec. 1002,28. Amounts disregarded. -- (a) ^Section 5 .(&) of the Act
provides-in effect-that the President .shall.prescribe the- -extent' to which any
salary payment'made in contravention .of .regulat io.ns promulgated under the Act
shall be disregarded by executive departments-and other governmental agencies
in determining the costs or expenses .of .any.employer for the purposes of any
other law or regulation.' In any case where a salary payment- is determined "by
the Commissioner to have been ma*de in contravention of the Act, the entire'
amount of such payment is to be disregarded by all .executive-; departments and
all other agencies of the Federal Government for the purposes of -r(l) determining co'bts or'expenses, of^ any employer -for the'
purpose of any law or regulation, either-, heretofore or hereafter
enacted Or' promulgated, including, t.he- Emergency Price Control
Act of 1942,-‘of any maximum price regulation thereof;
(2) ' calculating deductions.under the .revenue laws of the
United States; •or
’
,

(3 ) determining costs, or expenses under any contract made
"by or on behalf of the Uni ted. States.

k payment in contravention of the Act may be disregarded for more than one of
the foregoing-purposes.
(b) In the case of salaries decreased in contravention of the Act, the
amount to be disregarded, as required by paragraph (a) of this section, is'
the amount of the. salary actually paid or accrued by the enpl'oyer at the re­
duced rate.. Thus, if, for example, on November 1, 19*+2, a weekly salary rate
;of $100 has been unjustifiably reduced to $ 5 0 for'the remainder of the calen­
dar year- 19^-2, the amount to be .disregarded under paragraph (a) of this sec­
tion .is the total amount of salary paid at the weekly rate of $5 0 *
(c) In the case of salaries increased in contravention of the Act, the
amount to be disregarded, as required by paragraph (a) of this section, is
the amount of the salary actually paid or .accrued by the employer at the in­
creased rate and not merely an amount representing an increase in such salary*
,-Thus, if, for example, on November 1, 19^2 a weekly salary rate of $100 is un­
justifiably increased, to $ 1 5 0 for the remainder of 19^2, then the amount of
salary to be disregarded, for purposes: of paragraph (a) of' this section is the
total .amount paid at the weekly rate' of $150* Also »if»' for example, on
■February 1, 1 9 ^ 3 h ;weekly salary rate of $100 :is increased to $150 without '
prior required approval.,•but is restored, to '$100 on June 1, 19^3 after formal
disapproval by -the Commissioner or regional officer, then the-amount of palary
•;to b:e ;di sregarded fon purposes: of paragraph (a) of this section is the total
•amount at .the- weekly .rate of $150* Neither in the" .cases’described in this
paragraph,nor. in .the case described in paragraph (b) ■
'of this section are the
total amounts1paid at .the weekly-rate of $100" to be disregarded for purposes
of paragraph (a) of:this.'.section» ' (See 'section 1002»31 relating to salary
allowances under section 23 (a) of the Code.)
(d) In the. case: of a salary in: excess, of the. amount allowable under Sub­
part F of these regulations which dsr paid to, authorized to be paid to, or
accrued to.the account of anemployee during hiS 'taxable year (as distinguished from the•taxable year of the. employer) in contravention of the Act,
the amount to be disregarded is the full amount of such salary and not merely
the amount.representing the.excess over the amount allowable under such Subpart F of these regulations. Thus, if, for example, Under such Subpart F an
employee would be entitled to receive a total salary during his taxable year
of $6 7 , 2 0 0 for services rendered in such year, but actually receives $100,000
for such services, then the entire amount of $100,000 is to be disregarded for
purposes of paragraph (a) of this section.
Sec. 1002.29.
Criminal penalties. — Section 5 (a) of the Act provides
in substance that ho employer shall pay, and no employee shall receive, any
salaries in contravention of the regulations promulgated by the President un­
der the Act. Section 11 of the Act provides that any person, whether an em­
ployer or employee, who wilfully violates any provision of the Act or of any

(over)

20

(T. D. 51S6)

-

regulations promulgated thereunder, shall he subject, upon conviction, to a
fine of not more than $1,000, or to imprisonment for not more than one year,
or to both such fine and imprisonment*
Sec. 1002*30*
Salary allowances under Code. — Under section 2 3 (a) of
the Code reasonable allowances for salaries a;re allowed:as deductions' in com­
puting net income. The tests, which determine whether an allowance ■for.salar­
ies paid .or accrued is reasonable within the meaning of section 2 3 (a) of the
Code are. in nowise suspended by any provision of these, regulations. An em­
ployer may be exempt from the operation of these regulations yet be donied
deductions for.purposes of section 23 (a) of the Code with respect to the sal­
aries paid or accrued by him* .Also, a. basic allowance .under section 1002.18
and additional allowances under sections 1002.19 to 1002.22, inclusive, may
nevertheless be disallowed in whole or in. part- as deductions under section 2 3
(a) •‘of the. Code* '
•P
. av,' t . - - - !
...
; .1.
•

SUBPART; H —

EXEKPTIOUS

■

Sec..IOO2 .3 I*■ Exempt employers. —
The provisions of these regulations»
except tho.se- contained In Subpapts•F and G- thereof, shall not: apply in the:
case of. an. employer who employs, eight', or less individuals in., a single- busi-"
ness* An employer is subject ■to the provisions/of these, regulations if- at the
time a salary increase is .to.take effect he .has i.n, his -employ moré than eight
individuals in a.single business.
It.is not necessary,that each employee be
paid a salary provided all the individuals employed•receive- compensation for
their personal services. If it;is- subsequently determined ;that the. number.-of
employees has been temporarily reduced by the employer* or that the employer
has utilized any other improper device, for the sole purpose of .claiming-the
exemption provided in the General Regulations and these regulations, then such
exemption shall be deemed to have been improperly^obtained and of no force or
effect.
An employer may be exempt under this section notwithstanding that shortly
after the effective date of a salary increase he enlarges his personnel in
good faith- to more than eight employees* Any further adjustment in salary
will then be subject to the provisions of these regulations*
Sec* 1002*32*
Statutory salaries. — The provisions of these regulations
are applicable in every respect to any salary-paid by the United States, any
State, Territory, or possession or political subdivision thereof, the District
of Columbia, or any agency or instrumentality of any one. or more of the fore­
going, except where the amount of such salary is fixed by statute. Tho torm
^statute” for purposes of this section does not include a municipal ordinance
or resolution enacted by a governmental unit inferior to a State, Territory,
or possession.
Salaries covered by the,Federal Glassification Act of 1923» as
amended, are- excluded from the operation of these regulations* Likewise, sal­
aries, for example, of public school teachers which are paid under salary
schedules fixed by a state legislature and providing for mandatory increments
are excluded from the operation of these regulations. S é e auction 1002.17.
Sec. 1002*33*
S e rv ice s in fo r e ig n c o u n trie s .
The p ro v is io n s of these
re g u la tio n s s h a ll not be a p p lic a b le in the case o f any in d iv id u a l employer,

4

(T. D, 5186)

21

-

resident in the United States or any Territory or possession thereof, or of a
corporate employer organized under the laws of the United States or any State,
Territory or possession, with respect to salaries paid "by such employers to
employees for services rendered exclusively in foreign countries*
Sec. 1002*34. Foreign employers. ■— The provisions of these regulations
shall not "be applicable in the case of nonresident foreign employers except
that if any salary is paid to an employee residing in the United States pay*-*
ment of such salary is subject to all the provisions of these regulations*

GUT T. HELVERING,
Commissioner of Internal Revenue*
«APPROVED:

December 2, 1942*

JOHN L. SULLIVAN,
Acting Secretary of the Treasury,

M B Egg
- 3 -

issue or on subsequent purchase, and the amount actually received either
upon sale or redemption at maturity during the taxable year for which the
return is made, as ordinary gain or loss*
Treasury Department Circular No* 418, as amended, and this
notice, prescribe the terms of the Treasury bills and govern the condi­
tions of their issue*

Copies of the circular may be obtained from any

Federal heserve Bank or Branch*

'V û Q

-

2

-

Reserve Banks and Branches, following which public announcement will be made
by the Secretary of the Treasury of the amount and price range of accepted
bids.

Those submitting tenders will be advised of the acceptance or rejec­

tion 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.

Payment of accepted tenders at the

prices offered must be made or completed at the Federal Reserve Bank in
cash or other immediately available funds on

December 9. 1942______ .

The income derived from Treasury bills, whether interest or gain
from the sale or other disposition of the bills, shall not have any exemption,
as such, and loss from the sale or other disposition of Treasury bills shall
not have any special treatment, as such, under Federal tax Acts now or here­
after enacted.

The bills shall be subject to estate, inheritance, gift, or

i
other excise taxes, whether Federal or State, but shall be exempt from all
taxation now or hereafter imposed on the principal or interest thereof by
any State, or any of the possessions of the United States, or by any local
taxing authority.

For purposes of taxation the amount of discount at which

Treasury bills are originally sold by the United States shall be considered
to be interest.

Under Sections 42 and 117 (a) (l) of the Internal Revenue

Code, as amended by Section 115 of the Revenue Act of 1941, the amount of
discount at which bills issued hereunder are sold shall not be considered
to accrue until such bills shall be sold, redeemed or otherwise disposed
of, and such bills are excluded from consideration as capital assets.
Accordingly, the owner of Treasury bills (other than life insurance com­
panies) issued hereunder need include in his income tax return only the
difference between the price paid for such bills, whether on original

1mm.
TREASURY DEPARTIRENT
Washington
EOR RELEASE, MORNING NEWSPAPERS,
Friday, December 4. 1942_____ .

In issued
The Secretary of the treasury, "by this public notice, invites tenders
for $ SQO.OQQ.QQQ
. or thereabouts, of
91 -day Treasury hills, to he issued
S x
kxk
on a discount basis under competitive bidding. The bills of this series will
be dated

December 9« 1942
, and will mature _______ March 10, 1943________ ,
Me
M
when the face amount will be payable without interest. They will be issued in
bearer form only, and in denominations of $1,000, $5,000, $10,000, $100,000,
$500,000, and $1,000,000 (maturity value).
Tenders will be received at Federal Reserve Banks and Branches up to the
War
closing hour, two o !clock p. m,f Eastern &katatiaoEk time, Monday. December 7T 1942 .
Tenders will not be received at the Treasury Department, Washington.

Each tender

must be for an even multiple of $1 ,0 0 0 , and 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 pointed forms and for­

warded in the special envelopes which will be supplied by Federal Reserve Banks
or Branches on application therefor.
Tenders will be received without deposit from incorporated banks and
trust companies and from responsible and recognized dealers in investment securi­
ties.

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 a ft e r the c lo sin g hour, tenders w i l l be opened at the Federa

FOR RELEASE, MORNING iEWSPAPERS,
, December 4,
rr*------- -- ““

TREASURY DEPARTMENT
Washington

The Secretary of the Treasury, by this public notice, invites
tenders for $500,000,000, or thereabouts, of 91-day Treasury bills
to be issued on a discount basis under competitive bidding»

The

bills of this series will be dated December 9, 1942, and will
mature March 10, 1943, when the face amount will be payable writh~
out interest, ‘They will, be issued in bearer form only, and in
denominations of $1,000, $5,000, $10,000, $100,000, $500,000,.
and $1,000,000 (maturity value)..
Tenders will be received at Federal Reserve Banks and ^
Branches up to the closing hour, two o ’clock p.m_.,. Eastern »/¡far
1942. Tenders will not be received, at
time, Monday, December
Each tender must be for an
Wash!
the Treasury Department,
nd the price offered must be exprei sed
even multiple of $1,C
on the basis of 100, with not more than three decimals 9 Pc • 6CT* 5
tenders be
99,925. Fractions may not be used. It is *
^ 431
the
special
envelopes
made on the printed forms and forwarded in
which will be supplied by Federal Reserve Banks or Branches on
application therefor.
4\
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 Treas­
ury bills applied'for, unless the tenders are accompanied by an
express guaranty of payment by ari incorporated bank or trust
company.
Immediately after the closing hour, tenders will be opened
at the Federal Reserve Banks and Branches, following which pub­
lic announcement will be made by the Secretary of the Treasury^
of the amount and price range of accepted bids. Those submitting
tenders will be advised of the acceptance or rejection thereof.
34-38

(over)

•** 2 «•

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.. .Payment of accepted
tenders* at the price» offered must he made or completed at the
Federal Reserve Bank .in cash or other, immediately available funds
on December 9, 1942.
...
The income derived from Treasury bills, whether interest or
gain from the sale or other disposition of .the bills, shall not
have any exemption, as such, and loss from the sale or other dis­
position of Treasury bills shall not have any special treatment,
as such, under Federal tax Acts now or hereáfter énacted. The
bills shall be subject to estate, inheritance, gift, or other
excise taxes, whether Federal or State, but shall'be'exempt from
all taxation now or hereafter imposed on the principal or inter­
est thereof by any State, or any of the possessions of the United
States, or by any local taxing authority. For purposes of taxa­
tion the amount of discount at which Treasury bills aré origi­
nally sold^by the United States shall be considered to be interest
Under Sections 42 and 117 (a) (1) of the Internal Revenue Code, as
amended by Section 115 of the Revenue Act of 1941, the amount of
discount at which bills issued hereunder are sold shall not be ton
sidered to accrue until such bills shall be sold, redeemed or
otherwise disposed of, and such bills are excluded, from'considera­
tion as capital assets. Accordingly, the owner of Treasury bills
(other than life insurance companies) issued hereunder need inr
elude in his income tax return only the difference between the
price paid for such bills, whether on original issue or on sub­
sequent purchase, and the amount actually received either upon
sale or redemption at maturity during the taxable year for which
the return is made, as ordinary gain or loss.
Treasury Department Circular No. 418, as amended, 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.

-oGo-

December 2, 19*42.
STATUTORY DEBT LIMITATION
AS OP NOVEMBER 10. 19%27

i-jll'fv'

31-31

Section 21 of the Second Liberty Bond Act, as amended, provides that the
face amount of obligations issued under authority of that Act, nshall not exceed
in the aggregate $ 1 2 9 ,000 ,000,000 outstanding at any one time.”
The following table shows the face amount of obligations outstanding and
the face amount which can still be issued under this limitation:
Total face amount that may be
outstanding at any one time
Outstanding as of November JO, 19*4-2:
Interest-bearing:
Bonds Treasury
$^3,380,696,150
Savings (Maturity
value) *
1 7 ,2 7 6 ,6 7 6 ,5 7 5
Depositary
1 1 0 ,6 13,0 0 0
725,0^7,706
Adjusted Service
Treasury notes
Certificates of
indebtedness
Treasury bills
(Maturity value)

$1 2 5 ,000 ,000,000

$61,1*93,033,431

20,528,925,925

1 0 ,7 1 6 ,728,000

Matured obligations, on
which interest has ceased
Bearing no interest (U.S.
Savings stamps)

7 9 ,**9 6 ,0 30
215,804,582

Pace amount of obligations
issuable under above authority

98,755,379,968

$26,2*44,620,032

Reconcilement with Daily Statement of the United States Treasury
November 30. 1 9 ^
Total face amount of outstanding public debt obligations
issued under authority of the Second Liberty Bond Act,
as amended

$9 8 ,7 5 5 ,379,968

Deduct, unearned discount on Savings bonds (difference
between current redemption value and maturity value)
Add other public debt obligations outstanding but not
subject to the statutory limitation:
Interest-bearing (Pre-War, etc.)
1 9 5 ,9 6 9 .6 20
Matured obligations on which
interest has ceased
1 0 ,3 6 6 ,12 0
Bearing no interest
351,822,311
Total gross debt outstanding as of November 3 0», 19*42
1942
*

558.158.051
$96,115,750,455

Approximate maturity value. Principal amount (current redemption value)
according to preliminary public debt statement $1*4-,078,889,011.

3 y- 3 9

December 4* 1942
flag l i m i t a t i o n
A S O P NOVSMBBR 30. 1942

statutory

Section 21 ot the Second Liberty Bond Act« as amended« provides that the
face amount of obligations issued under authority of that Act, Hshall not exceed
in the aggregate $125,000,000,000 outstanding at any one time.*
Ihe following table shows the face amount of obligations outstanding and the
face amount which can still be issued under this limitations
Iota! face amount that may be
outstanding at any one time
Outstanding as of November 30, 1942*
Int erest*»bearingi
Bonds v
Treasury
$43,380,696,150
Savings (Maturity
value)*
17,276,676,575
Depositary
110,613,000
Adjusted Service
-735,047,706
Treasury notes
Certificates of
indebtedness
Treasury bills
(Maturity value)

$125,000,000,000

$61,493,033,431

20,528,925,925
10,716,728,000
5.721>392.000

Matured obligations, on
which interest has ceased
Bearing no interest (tf. S.
Savings stamps)

36,967*045.925
98,460,079,356
79,496,030
215,804.582

Pace amount of obligations
issuable under above authority

98,765,379,968
$ 36.244,620.032

Reconcilement with Daily Statement of the United States Treasury
November 30. 1942
Total fade amount of outstanding public debt obligations
issued under authority of the Second Liberty Bond Act,
Deduct, unearned discount on Savings bonds (difference
between Current redemption value and maturity value)
Add other public debt obligations outstanding but not
subject to the statutoiy limitations
interest-bearing (Pre-War, etc.)
195,969,620
Matured obligations on which
interest has ceased
10,366,120
Bearing no interest
351,833.311
Total gross debt outstanding as of November 30, 1942

$ 98,755,379,968
3.197.787,564
95,557*592,404

558.158.051
$ 96,115,750,455

r Approximate maturity value. Principal amount (current redemption value)
according to preliminary public debt statement $14*078,889,01!.
34-39

5
Accordingly, we have just embarked upon the
greatest borrowing operation in the h isto ry of th is
or any other government.

We are seeking to raise

at le a s t $9 b il lio n in the coming weeks, more than
h a lf o f which we hope w i l l come from in d iv id u a ls,
corporations and other sources outside the banking
system . f y

nhe

sale of War Savings Bonds is being

in te n s ifie d , e sp e cia lly through the payroll savings
plan, but in addition we are now o ffe rin g se cu ritie s
that should meet the needs of every type of in vestor.
In p a r tic u la r , we are placing great emphasis upon
the so -ca lle d "Victory tw o-and-one-halfs" —a long-term
bond that is an ideal investment for those able to
lend $500 or more to th eir Government.

In th is drive

we are not only seeking money out of current earnings,
which is the best of a l l kinds of money from the a n tiin fla tio n a ry point of view , but we are also seeking
the money that is lyin g id le in the form of accumulated
balance S ? This is no time for men or money to be id le .
As the President said la s t week, "We have got to make
our d o lla rs *figh tin g d o llars' by in vesting them in
^vernm ent bonds."

I have every hope that th is gigantic

borrowing w ill go over the to p , and that i t w ill set a
pattern for sim ilar financing operations in the year
to come.

4
Nor can we become smug and complacent about
our borrowing record, impressive though i t i s .

The

Treasury, as you know, has attempted to place as
large a proportion of i t s se cu ritie s in the hands
of the people, and not the banks.

We have stood

four-square for voluntary savings, pushing aside
the temptation to depend e n tire ly upon the e a sie r,
i f p o te n tia lly more dangerous, method of bank borrowing*
Since Pearl Harbor more than 50 m illio n individuals
have invested in War Bonds, and close to 24 m illio n
workers are now investin g regu la rly every pay day
through Payroll Savings Plans.

More than $8,500,000,000

o f the Series E, F , and G- issues were sold fromDecember 1941 through November 1942.
Impressive though th is to ta l is when judged in
terms of the standards o f the p a st, i t is p la in ly
inadequate in terms of the present and the fu tu re .
I t was only la s t January that the President proposed
war expenditures of $56 b il lio n for the f i s c a l year
beginning Ju ly 1st*

This staggering sum was dwarfed

by subsequent revisio n s upward.

Ju st as i t was

necessary to raise the sigh ts on war expenditures,
so must we now ra ise the s ig h ts on war borrowings.

3«
power from peacetime to wartime use.

The c iv ilia n

economy cannot be permitted to compete with the war
economy.
We w i l l not achieve this objective without the
enactment of measures more fundamental than any yet
adopted.

Ways are being devised to induce consumers

to r e fr a in from spending some $40 b il lio n in 1943.
This huge sum represents the d iffe re n ce between
disposable incomes remaining a fte r payment of a l l
personal taxes and the a vailab le supply of goods at
current p r ic e s.
Since the inception of the rearmament program,
we have increased tremendously the Government's
revenues from ta x e s.

Taxes were increased twice in

1940, once in 1941, and once again in 1942.
must — and can — do more.

But we

While income payments

to in dividuals w ill have increased by $49 b il lio n
from 1940 to 1943, personal taxes — Federal, S ta te ,
and lo c a l — w ill have increased by only $12 b il lio n .
Heavy as the increases have been, i t is clear that
we can afford to pay s t i l l more.

2

.

to convert our peaceful in dustries to the grim
business of war, le t us assess r e a l i s t i c a l l y and
soberly the grave problems we s t i l l fa c e .
We who fig h t the war have also the duty o f
paying fo r the war.

These costs are inescapable.

No fin a n c ia l sleigh t-o f-h an d can tran sfer goods and
services from the future to the present.

And no

debt that we might p ile up fo r the future can reduce
the s a c r ific e s in goods and services we must make today.
The strategy of war finance is to encourage the
f u l l e s t practicable use o f our productive resources,
to accomplish a prompt and adequate diversion of
resources from peacetime to wartime use, to d istrib u te
burdens among our c itiz e n s with a maximum o f fairn ess
and a minimum o f hardship, and to cause the fewest
possible post-war d islo ca tio n s in the economy as a whole.
The attainment of these s tr a te g ic a l ob jectives
requires, however, the use o f d iffe r e n t t a c t ic s fo r
d iffe re n t situ a tio n s.

Wise fin a n c ia l p o lic ie s in one

set of circumstances may be disastrous in another.
In a tta in in g our stra te g ic fin a n c ia l ob jectives
we must remember that the diversion of goods and
services from peacetime to wartime use must be accom­
panied by a corresponding diversion of spending

In to ta l war we can be s a tis fie d with
nothing le ss than to ta l v ic to r y .

This means that

we must vanquish our enemies in the f i e l d .

I t also

means that we must impose upon ourselves those
re stra in ts and s e lf-d e n ia ls without which v icto ry
in the f i e l d is made precarious and uncertain.
Total v icto ry also demands that we keep an
V

j

I * f *

(J*~

eye to the future as w ell as The present.

f /ft A.

For^vthe

nation -feday’ is engaged in two wars — the war against
the Axis and the war against post-war chaos.

Experience

has taught us that a m ilita ry v ic to ry alone may turn
to ashes.
While we take pride, therefore, in what our
arms have accomplished in the f i r s t year of war, pride,
to o , in the magnificent demonstration of our capacity

TREASURY DEPARTMENT
Washington
FOR RELEASE, MORNING NEWSPAPERS,
Sunday, December 6, 1942._ _ _ _ _ _

Press Service
No. 34-40

The following statement is made by Secretary Morgenthau:
In total war we can be satisfied with nothing less than
total victory. This means that we must vanquish our enemies in
the field. It also means that we must impose upon ourselves
those restraints and self-denials without which victory in the
field is made precarious and uncertain.
Total victory also demands that we keep an eye to the future
as well as the present. For today, a year after Pearl Harbor,
the nation is engaged in two wars -- the war against the Axis and
the war against post-war chaos. Experience has taught us that a
military victory alone may turn to ashes.
While we take pride, therefore, in what our arms have accom­
plished in the first year of war, pride, too, in the magnificent
demonstration of our capacity to convert our peaceful industries
to the grim business of war, let us assess realistically and
soberly the grave problems we still face.
We who fight the war have also the duty of paying for the
war. These costs are inescapable. No financial sleight-of-hand
can transfer goods and services from the future to the present.
And no debt that we might pile up for the future can reduce the
sacrifices in goods and services we must make today.
The strategy of war finance is to encourage the fullest
practicable use of our productive resources, to accomplish a
prompt and' adequate diversion of resources from peacetime to
wartime use, to distribute burdens among our citizens with a
maximum of fairness and a minimum of hardship, and to cause the
fewest possible post-war dislocations in the economy as a whole.
The attainment of these strategical objectives requires,
however, the use of different tactics for different situations*
Wise financial policies in one set of circumstances may be dis­
astrous in another.

-

2

-

In attaining our strategic financial objectives we must
remember that the diversion of goods and services from peacetime
to wartime use must be accompanied by a corresponding diversion
of spending power from peacetime to wartime use. The civilian
economy cannot be permitted to compete with the war economy.
We will not achieve this objective without the enactment of
measures more fundamental than any yet adopted. Ways are being
devised to induce consumers to refrain from spending some $40
billion in 1943. This huge sum represents the difference between
disposable incomes remaining after payment of all personal taxes
and^ the available supply of goods at current prices.
Since the inception of the rearmament program, we have
increased tremendously the Government’s revenues from taxes. Taxes
were increased twice in 1940, once in 1941, and once again in 1942.
But we must
and can -- do more. While income payments to indi­
viduals will have increased by $49 billion from 1940 to 1943,
personal taxes — Federal, State, and local -- will have increased
by only $12 billion. Heavy as the increases have been, it is clear
that we can afford to pay still more.
Nor can we become smug and complacent about our borrowing
record, impressive though it is. The Treasury, as you know, has
attempted to place as large a proportion of its securities in the
hands of the people, and not the banks. We have stood four­
square for voluntary savings, pushing aside the temptation to
depend entirely upon the easier, if potentially more dangerous,
method of bank borrowing. Since Pearl Harbor more than 50 mil­
lion individuals have invested in War Bonds, and close to 24 mil­
lion workers are now investing regularly every pay day through
Payroll Savings Plans. More than $8,500,000,*000 of the Series E,
F, and G issues were sold from December 1941 through November
1942.
Impressive though this total is when judged in terms of the
standards of the past, it is plainly inadequate in terms of the
present and the future. It was only last January that the
President proposed war expenditures of $56 billion for the fiscal
year beginning July 1st. This staggering sum was dwarfed^by sub- .
sequent revisions upward. Just as it was necessary to raise the
sights on war expenditures, so must we now raise the sights on
war borrowings.

f)
o -

Accordingly, we have just embarked upon the greatest borrow­
ing operation in the history of this or any other government. We
are seeking to raise at least $9 billion in the coming weeks, more
than half of which we hope will come from individuals, corpora­
tions and other sources outside the banking system,
The^ sale of War Savings Bonds is being intensified, espe­
cially through the payroll savings plan, but in addition we1 are
now offering securities that should meet the needs of every type
of investor. In particular, we are placing great emphasis upon
the so-called ‘‘Victory two-and-one-halfs5’ -- a long-term bond
that is an ideal investment for those able to lend $500 or more
to their Government. In this drive we are not only seeking money
out of current earnings, which is the best of all kinds of money
from the anti-inflationary point of view, but we are also seeking
the money that,is lying idle in the form of accumulated balances.
This is no time for men or money to be idle. A s the Presi­
dent said last week, “We have got to make our dollars ffighting
dollarsf by investing them in Government bonds.“ I have every
hope^that this gigantic borrowing will go over the top, and that
it will set a pattern for similar financing operations in the
year to come.

-oOo-

y f — 1v 7

3Y-*//

SECBETARY MORGEHTHAU, AS PERSOHAL DIRECTOR OF THE $9,000,000,000
VICTORY LOAN AND WAR SAVINGS SALES CAMPAIGN, ANNOUNCED TODAY THAT THE
»

t

f

8r

HALF-WAY MARK WAS PASSED IN TEE FIRST FOUR DAYS.
"THIS IS AMAZING AND I AM DELIGHTED,” THE SECRETARY SAID .

"IT

SPEAKS WELL FOR THE PATRIOTIC RESPONSE OF INVESTORS AND OF TEE MANY
THOUSANDS OF MY CO-WORKERS IN THE DRIVE.

WE HAVE MADE A FINE START.

BUT DON*T LET US FORGET THAT THE INTENSIVE EFFORT MUST BE CONTINUED
TO THE VERY END.

ONLY IN THIS WAY WILL THE DRIVE GO OVER THE TOP AND

PROVIDE THE NECESSARY FUNDS FOR VICTORY."
£

TREASURY DEPARTMENT
Washington

FOR IMMEDIATE RELEASE,
Friday, December 4, 1942,

Press Service
No. 34-41

Secretary Morgenthau, as personal director of the
$9,000,000,000 Victory Loan and War Savings sales cam­
paign, announced today that the half-way mark was passed
in the first four days.
"This is amazing and I am delighted,” the Secretary
said.

uIt speaks well for the patriotic response of in­

vestors and of the many thousands of my co-workers in
the drive.

We have made a fine start.

But don't let us

forget that the intensive effort must be continued to
the very end.

Only in this way will the drive go over

the top and provide the necessary funds for Victory.”

-oOo-

¡1

TREASURY DEPARTMENT
Washington
Press Serví««

FOR IMMEDIATE RELEASE«
Saturday. December 5. 1942

3

Secretary of the Treasury Morgenthau today announced the subscription
figures and the basis of allotment on subscriptions from commercial banks
for their own account for the current offering of 1-3A

percent Treasury

Bonds of 1943*
Reports received from the Federal Reserve Banks show that subscriptions
from such banks aggregate $2,356,000,000.

Of this amount $346,000,000 were

allotted in full to banks entering subscriptions for not more than $100,000
and the remainder were allotted 85 percent, but not less than $100,000 on
any one subscription, with adjustments, where necessary, to the $1,000
denomination.
The subscription books will remain open until further notice on this
issue and also on the 2-1/2 percent Treasury Bonds of 1963-68 and the 7/8
percent Treasury Certificates of Indebtedness of Series 1-1943 for sub­
scriptions from others than commercial banks for their own account.

As

previously announced, the books for the certificates will be open for
three days beginning December 16 for the receipt of subscriptions from
commercial banks for their own account.
Details as to commercial bank subscriptions and allotments will be
announced when final reports are received from the Federal Reserve Banks.

TREASURY DEPARTMENT
Washington
Press Service
No. 34-42

FOR IMMEDIATE RELEASE,

Saturday, December 5, 1942.

Secretary of the Treasury Morgenthau today announced the
subscription fi gures and the basis of allotment on subscriptions"
from commercial banks for their own account for the current offering of 1-3/4 percent Treasury Bonds of 1948.
Reports received from the Federal Reserve Banks show that
subscriptions from such banks aggregate $2,356,000,000. Of this
amount $346,000,000 v/ere allotted in full to banks entering sub­
scriptions for not more than $100,000 and the remainder were
allotted 85 percent, hut not less than $100,000 on any one sub­
scription, with adjustments, where necessary, to the $1,000
denomination.
The subscription books will remain open until further notice
on this issue and also on the 2^1/2 percent Treasury Bonds of 196368 and the 7/8 percent Treasury Certificates of Indebtedness of
Series E-1943 for subscriptions from others than commercial banks
for their own account. As previously announced, the books for the
certificates will be open for three days beginning December 16 for
the receipt of subscriptions from commercial banks for their own
account.
Details as to commercial bank subscriptions and allotments
will be announced when final reports are received from the Federal
Reserve Banks.

-oOo-

:-s

iee I

~

i

-

c ir c u la t io n .

2

v

-

A b i l l h as a lr e a d y been p a sse d b y th e Senate and i s b e in g

c o n s id e re d b y th e House o f R e p re s e n t a t iv e s w h ich w i l l p e rm it th e i s s u ­
ance o f m inor c o in s w h ich dof n o t consume la r g e q u a n t it ie s o f s t r a t e g ic
m e t a ls .

The m in ts p la n t o b e g in l a r g e - s c a le p ro d u c t io n o f o n e -c e n t

p ie c e s composed o f z in c - c o a t e d s t e e l as soon as t h i s b i l l i s e n a c te d .
The S e c r e t a r y a ls o gave a s s u ra n c e t h a t adequate q u a n t it ie s o f
f iv e - c e n t p ie c e s w i l l soon be a v a il a b l e .

The m in ts a re p ro d u c in g th e

new f iv e - c e n t p ie c e a t maximum c a p a c it y .

The new p ie c e i s composed

o f s i l v e r , $6% o f co p per and 9% o f m anganese, th u s s a v in g a l l o f
th e n i c k e l , and 2$% o f th e co p per t h a t was u sed I n th e fo rm e r c o in .
The S e c r e t a ry p o in te d o u t t h a t one way o f m eeting tem porary
s h o rta g e s i n l o c a l com m unities would be f o r th e m e rch a n ts, tra d e
a s s o c ia t io n s and th e l o c a l c le a r in g house to work o u t a c o o p e ra t iv e
program f o r p o o lin g the l o c a l s u p p ly o f c o in s .

TREASURY DEPARTMENT
W ashington

P re s s S e r v ic e
no.

o¥ 1
•SSs* S e c r e t a r y ”0^ "tief es.

3 y -

y>3

t h a t th e is s u a n c e o f

p a p e r o n e -ce n t and f iv e - c e n t p ie c e s b y m erchants a s s o c ia t io n s may s u b je c t
t o c r im in a l p r o s e c u t io n th e a s s o c ia t io n s i s s u in g su ch p a p e r p ie c e s and any
p e rso n s who c i r c u l a t e them.
The S e c r e t a r y c a lle d s p e c i f i c a t t e n t io n to s e c t io n 3f>83 o f th e
R e v is e d S t a t u t e s (U n ite d S t a t e s Code, t i t l e

1 8 , s e c t io n 293) w h ich p r o v id e s :

HNo p e rso n s h a l l make, i s s u e , c i r c u l a t e , o r p a y out
any n o t e , ch eck , memorandum, to k e n , o r o th e r o b lig a t io n
f o r a l e s s sum th an $ 1 , in te n d e d t o c i r c u l a t e as money
° r to be r e c e iv e d o r u se d i n l i e u o f la w f u l money o f the
U n ite d S t a t e s ; and e v e ry p e rso n so o ffe n d in g s h a l l be
f in e d n o t more than $ 50 0 , 0r im p riso n e d n o t more th an
s i x m onths, o r b o t h .”
The S e c r e t a r y s a id t h a t he was aware o f th e problem f a c in g r e t a i l
m erchants who f e a r t h a t th e s u p p ly o f m ino r c o in s w i l l n o t be s u f f i c i e n t to
meet th e in c r e a s e d demands cau sed b y C h ristm a s sh o p p in g .

He p o in t e d o u t,

how ever, that^ a lth o u g h i t was e a s y to u n d e rsta n d th e p a t r i o t i c m o tiv e s o f
groups p ro p o s in g to is s u e such s c r i p , such p r a c t ic e was i l l e g a l and c o u ld
n o t be t o le r a t e d .
, S e c r e t a r y Morgenthau su g g e ste d t h a t r e t a i l m erchants a s s o c ia t io n s
co o p e ra te w it h th e T re a s u ry Departm ent i n i t s cam paign to p e rsu a d e t h r i f t y
p e o p le t o t u r n i n to th e banks a l l c o in s w h ich th e y have accum ulated i n co in
banks and k it c h e n c r o c k e r y .

The s it u a t io n w i l l be a l le v ia t e d t o a co n sid erab le

e x te n t i f t h i s cam paign i s g iv e n the g r e a t e s t p o s s ib le p u b l i c i t y .

The Secretary

in d ic a t e d t h a t i t w ould be p a r t i c u l a r l y e f f e c t iv e i f d ir e c t e d a t s c h o o l
c h ild r e n and h o u se w iv e s.
The S e c r e t a r y a ls o s t a t e d t h a t th e T re a s u ry Departm ent i s do in g
e v e ry t h in g t h a t i t can to keep adequate q u a n t it ie s o f s m a ll c o in s i n

TREASU RY DEPARTMENT
W a s h in g t o n
FOR IM M E D IA T E R E L E A S E ,
S a t u r d a y , D ecem ber 5 , 1942

P r e s s S e r v ic e
No, 34-43

S e c r e t a r y M o rg e n th a u s a id
o n e -c e n t and f iv e - c e n t
s u b je c t to

th e a s s o c ia t io n s

a n d a n y p e r s o n s who c i r c u l a t e

S e c re ta ry

c a lle d

is s u a n c e

of paper

by m e rch a n ts a s s o c ia t io n s

c r im in a l p r o s e c u t io n

p a p e r p ie c e s
~

p ie c e s

to d a y th a t th e

s p e c if ic

such

them *

a t t e n t io n

(mitea

is s u in g

m ay

to

s e c t io n

3583

°°a*',iti*

nNo p e r s o n s h a l l m a k e , i s s u e , c i r c u l a t e ,
o r p a jr o u t a n y n o t e , c h e c k , m em orandum ,
o r . o t h e r o b l i g a t i o n f o r a l e s s sum
t h a n $>1, i n t e n d e d t o c i r c u l a t e a s m o ney o r
to be r e c e iv e d o r u se d in l i e u o f la w f u l
m oney o f t h e U n i t e d S t a t e s ; a n d e v e r y p e r s ? . ° ^ enc^ i^ S s h a l l b e f i n e d n o t m o re
t h a n $ 5 0 0 , o r i m p r i s o n e d n o t m o re t h a n s i x
m o n th s, o r b o t h ."

The Secretary said that he was aware of the problem facing
n o t * 1b e ™ u f ° i c i e u + Wi ° f e a i t ? a t . t h e s u ? ? l y o f m in o r c o i n s w i l l S
*c?+ o U f j- ^ c l e ? t t o
The in c r e a s e d dem ands c a u s e d b y
C h r i s t m a s s h o p p in g .
He p o i n t e d o u t , h o w e v e r , t h a t , a l t h o u g h
n o s in e
u rid e £ s t a n d t h e p a t r i o t i c m o t iv e s o f g r o u p s p r o p w

n o t b f t o le r lt e d !

S C r iP ’

p r a C t ic e w as

i l l e g a l a n d c o u ld

s o c l a h e n ? f o n L M Orf e n t h 5 " s u g g e s t e d t h a t r e t a i l m e r c h a n t s a s ­
s o c i a t i o n s c o o p e r a t e w i t h t h e T r e a s u r y D e p a r t m e n t i n i t s cam ­
p a ig n t o p e rs u a d e t h r i f t y p e o p le t o t u r n i n t o t h e b a n k s a l l
o ? o S L r v 1 0 h m ^ e^ l a V M ° OUmh l a h d i n
e x t e n t i f t h i 2 a ^ t u a '!'l o r { . W l l b b e a l l e
I ^ amP a ^ n ; i s g i v e n t h e
e f f e c + iv e i f
¿ r id la a t a d
e n e c u iv e i i d ir e c t e d a t s c h o o l c h ild

o o in b a n k s a n d k i t c h e n
v i a t e d t o a c o n s id e r a b le
g r e a t e s t p o s s ib le p ub ^ w o u ld b e p a r t i c u l a r l y
r e n a n d h o u s e w iv e s .

d o ir g 1 e v e rv th ? n ^ r iv « + S ° + S ta te +
T r e a s u r Y D e p a rtm e n t' i s
s n a lf
S -t h ? i ? can t0 k e e P a d e q u a te q u a n t it ie s o f
t h e S e n a te and ^ r ? u l a t l o n - A b i l l h a s a l r e a d y b een p a s s e d b y
+ a + i w r ?
b e ln 5 t c o n s id e r e d by t h e H o u se o f R e p r e s e n . l v e s w h lc h w lJ *b p e r m i t t h e i s s u a n c e o f m in o r c o i n s w h i c h do

-

•;

-

2

-

plan^^bogi^iatge-soale^production^of10 metal| * The'Mints
« » ips a; s o; . i hs , : ; s t 1 i 1 s ^ , s r

p » rf ° f « = o - = « » f . a

OI n “ - o 5 " S S L ° M n ^ S naRVr"oo ?!»t ,a ,,„ nt e „„.„titifc,
d u cin g th e new fiv e ^ c e n t rn POp
v a i ^a ^ e ^ The M ints a r e p ro p ie c e i s composed 35^ o f s i l v e r " sfr|X:L?Um c a P a e i t y . The new
g a n e se , th u s s a v in g all o f th e n i o ^ i
and
o f “* n t h a t was u sed in th e form er c o in .
’ Sn<*
th e copper
p o ra ry ¿ h o r t a e e s ^ in ^ o M ? 3 OUt
c h a n ts , t r a d e " ^
A
l ^
r o
out a c o o p e r a tiv e

-0 O 0 -

one waJr o f m eeting temc T
1? ^ fo r t K ^ . .

one facto r causing hoarding of the cent piece*

They pointed out

that nearly two b illio n of the Indian head cents were distributed
by the M int, the greater part of which s t i l l are outstandingStamp -eft
WMdferi.

’
“$¿^^1
f
C*Aa

f
k €JOC

**q Q o »"*

¡/1&S+-*-

fcs&sr»

'Y*0”

(/i4

7

¡ J ill

- 3 O f fi c i a ls c it e the record coinage figu re s as evidence that
business needs might be met i f outstanding money were made to
work harder#
Letters which have poured into the Mint from a l l sections of
the country since the shortage of metals for coinage was publicized
convinced Director Ross that large q uan tities of the minor pieces
can be enticed out of sugar bowls, ch ild ren ’ s banks, and bureau
drawers.

Hence i t was decided to e n lis t the help of the school

children , not only in bringing their own savings out of hiding,
but in carrying the appeal home to th eir parents and frie n d s.
One college professor co lle cte d 113,000 pennies in three weeks
from students and fa c u lty a sso cia te s, and put them into circulation^
Children of the College Heights school at Abilene, Texas,

¥

enrollment^465, brought in two gallons o f pennies, and bought War
Stamps with them, $314 worth.
A Montana woman brought in 35 pounds of pennies, and bought
War Stamps.
An Ohio man reported a lo c a l establishment had fiv e ^ h a lf gallon jars of pennies on d isp la y .

The Mint sent a p o lite le tte r

to the company named, c a llin g atten tio n to the business needs for
coin s.
Mint o f f i c i a l s believe that a widespread misconception of
the numismatic value of the Indian head penny, coinage o f which
m

was halted in 1909 when the present Lincoln design was adopted, is

¡¡til

-

2

-

o f them also are issu in g agents fo r War Bonds and Stamps.
Several recent developments have tended to tighten the coin
supply s itu a tio n .

Newly e ffe c tiv e increases in Federal taxes on

tobacco products and other items have required add ition al penny
change.
copper allo t t e d by the War 9rodu£So5r
"
jj
Board for coinage o f one-cent M e c e s , and fias U.ea-sfS Minting these

a®Baa®

coinfs pending decision o f W c p g w ^ r ^ l e g i s l a t i d f granting
authority fo r use of l j ^ r t n f t t i c a l m ate/ials,
r-dtht pieces was sus
fes iiade to

k

'

nded for s/veral monihs this
new a llo y

>nsumn-

^ d d cents p ricin g of merchandise, sta te s a le s , amusement and
other taxes, increased use of vending machines, and the general
increase in payrolls and trade volume due to^war « M w d w a l i - w .
* ” ——

fcyQu

^ / i l l

— S

|■

Is.

now pending before
oerore CongreSs^wwH
Congress wowid perm
$ermiit coinage of

one, three or fiv e cent pieces from such m aterials as the Treasury
and the War Production Board determined upon.
Mint experts are te stin g various possible su b stitu tes for the
c r i t i c a l copper, among them z in c -c o a te d ste e l which might be used
for the one-cent p ie ce .

Last year the Mint used 4,600 tons o f

copper in the making of pennies alone.
W€SI* 6

A b illio n and a h a lf of

these coins/produced, and more than ten b illio n have been made
throughout the years.

“*tbf

No/6'f'16

?} f f y

¿foi tec**#

p*? /

Thirty m illio n United Sta tes school children-today vrefe asked
by the Treasury Department to e n lis t in a pre-Christmas drive to
put id le co in s, e sp e cia lly pennies and 5 -cent p ie ce s, to work

ill

Icei

meeting holiday business demands.
Mrs. N e llie Tayloe Ross, Director of the M int, asked the
schools of the nation to undertake the campaign as a ”Help W in the
War” e ffo r t , pointing out that many tons o f v i t a l metals may be
saved i f present coins can be kept c ir c u la tin g , thus
the demand for new coinage.
The Treasury hopes th is ” coin round-up” w ill avert possible
lo c a l shortages at the year’ s business peak, where s h ift s in popu­
la tio n and wartime payrolls might otherwise re su lt in unbalanced
d istrib u tio n of availab le money stocks.
With the approval of Secretary Morgenthau, le tte r s are being

A

sent

Is,tell
isof the
effort, p
1 prese:
1fornew
mi.rv

ireasi
Isiortagei
landwar!
iion oi

to jsta te , county, and c it y superintendents o f schools,

asking them to organize ”bring in the coin s” programs.

Heads of

u n iv e r s itie s , colleges and parochial schools are being asked to

Office (
andoil
aVinp
1 andpa

jo in in the e ffo r t .
Mrs. Ross emphasized that the children are not being asked to

loss
1their s

give up th eir savings, but only to free them for business use.

¡tipsand
f:§i hes
She suggest^ that the ’’piggy bank” coin stocks be exchanged for War È asked
Ic%e f0

^ agents :

Cj&i

t l ’S f - i l t o business channels.
op

,.

anywhere else fop m elting.
_ .

7yinnsn*'

They should not be sent to the Mint
Banks have been asked to fa c ilit a t e
! — -

the drive by accepting^coins for exchange for. currency, and most

TREASURY DEPARmENT
Washington
FOR RELEASE, MORNING NEWSPAPERS, )
Monday, December 7, 1942.
-------2---------------T t t M ---- :

Press Service
No, 34-44

uWji
M I
ù IItiltH|i
l

Thirty million United States school children are being asked
by the Treasury Department to enlist in a pre-Christmas drive to
¡put idle coins, especially pennies and 5-cent pieces, to work meet
ing holiday business demands.

Mrs.^Nellie Tayloe Ross, Director of the Mint, asked the
1 avert fri! |$chools^of fhe nation to undertake the campaign as a /‘Help Win the
IF1*
pointing out that many tons of vital metals may be
ri ibiftiiif saved if present coin/s can be kept circulating, thus reducing the 1
demand for new coinage;
*
6

lt loÈli»
H
^^^^^nry hopes this ‘coin round-up“ will avert oossible
local shortages at the year1® business peak, where shifts in'.-poputy,KjgitiliI.iation and wartime payrolls might otherwise result in unbalanced
letters art^l distribution of available money stocks,
apppovai of Secretary Morgenthau and of the United
[tendenti oli |, ,
ptates Uixice^of Education, letters are being sent to State,
futi, Mi pjounty, and city^ superintendents u)f schools, asking them to
prganize bring in the>coins” programs. Heads of universities,
being«Mi ^ofleges and parochial schools are being asked to join in the
X OF I • v

I
Mrs. Ross emphasized that the children are not being asked to
give-up their savings, but only to free them for business use.
It e
that the piggy bank“ coin stocks be exchanged for
par btamps and Bonds to get the coins into business channels. They
juine** Iphould not be sent to the Mint or anywhere else for melting. Banks
ave been asked to facilitate the drive by accepting minor coins
lor exchange for silver or.currency, and most of them also are
issuing agents for War Bonds and Stamps.

Su p p l y I I t u a t i o r ntKewiv1e ? ? f i ? hT

tended to tighten the coin

general increase in payrolls’^ t r a d l v

S

S

t

S

£.**.

will p e m u i o i n a g e 1o r o n e enthrfebo5°f? Congrf s _ which, if passed,
I

aS the Treasury

the W -

Productio^Board^determined

criti?altconnertSB™nnt,t^ ting-VariOU! Possible substitutes for the
| for the one-cent »
?
*

p * t S g j ^ f £ ^ S S i aM
!b u s i n e S ^ e e d s
[work harder.

than ten b i l l C ^ I L f

coin^ e figures as evidence that
ght b met lf outstandin£ money were made to

pieces can be enticed out of sugar bowls
1¿«onf k i min?r
■ 5 o a? dC n f S - Hence U was decided to’enlisf the help ?f thf

|from ^ 2 S a& ^ y . : S S t i f^
Ian enrollment of S l / S o u i t ^ i w o
par Stamps with them; $314worth.
£

^

tPS

eJa{i t t t ul Ti f o i

a t / b ile ? e> T^ > with
° f pennies’ and bou£ht

3
I t ' A Montana, woman brought in 35 pounds of pennies, and bought
war otamps•
An Ohio man reported a local establishment had five halfteallon jars af pennies on display. The Mint sent a polite letter
F°.the company named, calling attention to the business needs for
coins.
. Mint officials believe that a widespread misconception of-the
pumismatic value of the Indian head penny, coinage of which was
gialtea m 1909 when the present Lincoln design was adopted, is one
ractor causing hoarding of the cent piece. They pointed out that
Million.
tte Indian head cents were distributed by
¡the Mint, the greater part of which, still are outstanding.
It
Reports from coin dealers show that most Indian heads after
¡they have been in circulation, are worth only face value..

Proposed Press Release

-2 -

selling liquor by the drink likewise revealed virtually no
evidence that nontax-paid spirits are being used to refill bar
bottles,

má

pointed uwt i
further poiwfrethgrgfc
»Matt While bootlegging

Aa &

is at its lowest ebb,^collections from distilled spirits have
reached the highest level in the history of the country.
?r tNvfjwjlw1

not expect that the

recent increase in the tax rate of *2 a proof gallon will result
f y j W

increase in bootlegging during the emerge!
-<ie. ^LffSL^3r~r
that through rigid enforcement the illicittraff:

-*<.

be effectively controlled after the termination of the
emergency, despite the increase in the tax rate.

had reached its lowest ebb since Appeal of national prohibition*

prior to th*,/4dv*nt of s u i r rationing (toy 1, **2), to an average

V

traffic had, over a period of years, been brought under effective
control through constant policing and adequate prosecution, except
in certain areas of some of the Southern States. j While the
attributed the abrupt decrease in liquor violations during the last
few months primarily to sugar rationing,

gasoline

and tire rationing, as well as the fact that many violators had
found more profitable employment, were contributing factors*

nn4t^v»f
The Treasury^eifee&sed that the public may be assured
that liquor purchased from retail liquor dealers is not likely to
be spurious and nontax-paid.

It was pointed out that practically

no Illicit spirlts^S^Seen seized in recent years in packages
imitating distillers* brands*

Inspection of retail liquor dealers

7

S' Ù J

jf

. __

Æ

3
„

.

.

y ~ V 6 ~I

/

.

p(tpi^y/s/^

2, <‘
f'/v/

bootlegging has reached the lowest ebb since repeal
of national prohibition,^Guy T, Helve]

Commissioner of Intern!
•••WW!niixmiiwqii!:

said today in reviewing 1942 statistics compiled by the
B u r e a u ’s Alcohol Tax Unit.
M a s h seized at illicit distilleries— consider]
the best measure of the volume of the non tax-paid liquor traffic—
has gradually decreased from a monthly average o f « ^

500,000

gallons

roiled

during the year nrior to the advent of sugar
rationing, May 1, 1942,

to an average of 170,000 gallons monthly

since that date.
Illicit distilleries

seized during the same periods

easure of
¡illally I
Bring the
!,to ai
Illic j
ped frc

dropned from a monthly average of 1,000 to 640.
This improvement in the enforcement situation has

Thisj
ieAlcohol
alouslvi

enabled the Alcohol T ax Unit to concentrate its personnel on the
tremendously increased supervisory responsibilities resulting from
industrial production of alchhol for w ar use.

ìr,He
iiiovera
ttrolthr
Iceptinc
Mile

pi viol
feratio
!fact
The îr
liquor
P spuri
ipic%

I

h ip

retail v
Ned«;
N Used i

TREASURY DEPARTMENT
W a s h in g t o n
POR R E L E A S E , MORNING NEW SPAPERS,
Tuesday, December 8, 1942
Ï W 4 2 ....... .. .. *
''----------

P r e s s S e r v ic e

No* 34-45

B o o t le g g in g h a s re a c h e d t h e lo w e s t
n a t io n a l p r o h ib it io n ,
Guy T .

H e lv e r in g ,

c o m p ile d

s a id

eb b s i n c e

re p e a l o f

C o m m is s io n e r o f I n t e r n a l R e v e n u e ,
to d a y in

r e v ie w in g

1942 s t a t is t i c s

b y t h e B u r e a u * s A l c o h o l T a x U n it *

moo
1 ^ l c l 'k d i s t i l l e r i e s — c o n s i d e r e d t h e b e s t
m e a s u r e o f t h e v o lu m e o f t h e n o n t a x - p a i d l i q u o r t r a f f i c — h a s
g r a d u a l l y d e c r e a s e d f r o m a m o n t h ly a v e r a g e o f 5 0 0 , 0 0 0 g a l l o n s
- ^ e a r P r i o r t o t h e a d v e n t o f s u g a r r a t i o n i n g , M ay 1 ,
1 9 4 2 , t o a n a v e r a g e o f 1 7 0 , 0 0 0 g a l l o n s m o n t h ly s i n c e t h a t d a t e
d i s t i l l e r i e s s e i z e d d u r i n g t h e sam e p e r i o d s
d r o p p e d f r o m a m o n t h ly a v e r a g e o f 1 , 0 0 0 t o 640*
^ mP r o v ( ; mf n t i n t h e e n f o r c e m e n t s i t u a t i o n h a s e n a b le d
t h e A l c o h o l T a x U n i t t o c o n c e n t r a t e i t s p e r s o n n e l on t h e t r e ­
m e n d o u s ly i n c r e a s e d s u p e r v i s o r y r e s p o n s i b i l i t i e s r e s u l t i n g
fro m i n d u s t r i a l p r o d u c t io n o f a lc o h o l f o r w a r u se *
g
Mr* H e l v e r i n g s a i d t h a t t h e n o n t a x - p a i d l i q u o r t r a f f i c
° 7 e f v a p e .r i o d o f Y e a r s , b e e n b r o u g h t u n d e r e f f e c t i v e
c o n s t a n t p o lic in g and a d e q u a te p r o s e c u t io n ,
e x c e p t i n c e r t a i n a r e a s o f som e o f t h e S o u t h e r n S t a t e s .
C o m m is s io n a t t r i b u t e d

th e a b ru p t

d e c re a se

in

s u g ^ r r a t i o n i n ^ Sh p U r:L? f t h e ^ ? s t fe w m o n th s P r i m a r i l y t o
h
? g a s o lin e and t i r e r a t io n in g , a s w e ll
£ a ? t h a t many v i ° i a t o r s h a d f o u n d m o re p r o f i t a b l e em­
p lo y m e n t , w e r e c o n t r i b u t i n g f a c t o r s .
t h a t lim ir v r m t i £
s a i d t h a t t h e p u b l i c may b e a s s u r e d
h a t l i q u o r p u r c h a s e d fro m r e t a i l l i q u o r d e a le r s i s n o t l i k e l y
b f . s P ^ i‘l o u s arfd n o n t a x - p a i d *
I t w as p o i n t e d o u t t h a t
p
c t i c a l l y no i l l i c i t s p i r i t s h a v e b een s e iz e d i n r e c e n t
p a ? k a &e s i m i t a t i n g d i s t i l l e r s * b r a n d s *
In s p e c t io n
re v e a l
^ e a le r s . s e llin g liq u o r by th e d r in k lik e w is e
r e v e a le d v i r t u a l l y no e v id e n c e t h a t n o n t a x - p a id s p i r i t s a r e
b e in g u s e d t o r e f i l l b a r b o t t l e s .
v

-

2

-

- m While bootlegging is at its lowest ebb, tax collections
xrom distilled spirits have reached the highest level in the
nistory of the country*
Trfasury officials d0 not expect that the recent increase
^ax rate, of $2 a proof gallon, will result in any iniS-b00tle§si?s during the emergency* Nevertheless the
^ officers of the Bureau have been instructed to be on
the alert for such violations. It is believed also that
through rigid enforcement the illicit traffic can be effecively controlled after the termination of the emergency, de~
spite the increase in the tax rate*

- o Oq-

M -

fjf -»V—■

^j
’T'Cs
7, /<?/;
<h>

8 'f-

>etary Morgenthau said today that the Treasury
Department has not decided on any tax recommendations for
presentation to Congress. jjFhe Secretary said that the
Treasury is now in the process of consulting a number of
government agencies who are interested in curbing inflation.
He added that they had not progressed far enough in their
studies to decide on any program of fiscal legislation
to present to the President or to discuss with Congres­
sional leaders. 7The Secretary said he doubted that he j

(AX

.. ,

c/f~ *1

would be ready to say anything definite on a tax program*
/?

,

\(P)

°

until after the President has sent his Budget Message to
Congress in January.
o

sen:

TREASURY ^DEPARTMENT
Washington
FOR M E D I A T E RELEASE,
Monday, December 7, 1942.

sendations ftf

U that tie

I a number (

irbing iafllij

tough in M

.egislation
th Congres*

ed that he/

Press Service
No. 34-46

Secretary Morgenthau said today that the Treasury Department
has not decided on any tax recommendations for presentation to
Congress.
The Secretary said that the Treasury is now in the process
of consulting a number of Government agencies who are interested
in curbing inflation.

He added that they had not progressed far

enough in their studies to decide on any program of fiscal legis­
lation to present to the President or to discuss with Congres­
sional leaders*

¿trpß

The Secretary said he doubted that he would be ready to say

t Message It
anything definite on the subject of taxes until after the Presi­
dent has sent his Budget Message to Congress in January.

-oOo-

*W-Ÿf

Secretary Morgenthau announced today that a total of
$5,536,000,000 in f,new money” had been realized from the sale
of all types <?f securities during the first five days of
i
December
Ç*of this amount, or $3,331,000,000
was raised from non-banking sources, he said.
In the table that follows a breakdown of funds received
from all sources from the sale of all Government securities
is given for the period through December

5:

Funds from banking sources —
Treasury bills . . . .
1-3/4$ Treasury bonds .

. . . $1 50 , 0 0 0 ,0 0 0
2.055.000.

000

2.205.000.

000

Funds from non-banking sources —
7/3$ Certificate ...........

610 , 000,000

1-

3/4$ Treasury bond ....

452,000,000

2-

1/2$

Victory bond ....

2 , 101 , 000,000

Tax notes ...................

114.000.

000

Savings bonds (E, F & G) . . .

104.000.

000

3,331,000,000
Total . .

$5,536,000,000

TREASURY DEPARTMENT
Washington
FOR IMMEDIATE RELEASE.,
Monday, December x7 , 1942.

Press Service
No. 34-47

Secretary Morgenthau announced today that a total of
$S,386,000,000 in "new money11 had been realised from the sale
of all types of securities during the first five days of
December.

About 60 percent of this amount, or $3,381,000,000,

was raised from non-banking sources, he said.
In the table that follows a breakdown of funds received
from all sources from tie sale of all Government securities is
given for the period 'through December fct
Funds from banking sources
Treasury bills . . . . / .

» • ♦

$150,000,000

l~3/4$ Treasury bonds, . V

• ♦ •

2.055.000. 000
2.205.000.

iunds from non-banking, sources —
7/8% Certificate . . . . . . . . .

610,000,000

1- 3/4$ Treasury bond . . . . . . .

452,000,000

2- 1/2$ Victory b o n d . ......... 2, JL0Ì,000,000
Tax notes.

.......

Savings bondé (E, F & G) . . . . -,

114,000,000
104,000,000
3,381,000,000

Total . * ........

. $5,586,000,000

000

FOR IMMEDIATE RELEASE
December 7 3 191+2 »

T A X ’.
W J

The Bureau of Customs announced today that under the silver
ot

black fox import quota provided for in the supplementary trade

agreement with Canada there were imported during the period
December 1 to 5, 191+2, 201 live silver or black foxes and

130 silver

fox skins from Canada, 1,623 silver fox skins from countries other
than Canada, 1+62 pounds of paws, heads, or other separate parts of
silver or black foxes, and 1+62 silver or black fox tails*

jf
v' 1

TREASURY DEPARTMENT
Washington

'leaentary trade

«period

FOR IMMEDIATE RELEASE,
Monday, December 7, 1942.

Press Service
No. 34-48

88«xUtfsût

countries other

»rate parts of

tails.

The Bureau of Customs announced today that under the
silver or black fox import quota provided for in the supple­
mentary trade agreement with Canada there were imported during
the period December 1 to 5, 1942, 201 live silver or black
foxes and 130 silver fox skins from Canada, 1,623 silver fox
skins from countries other than Canada, 462 pounds of paws,
heads, or other separate parts of silver or black foxes, and
462 silver or black fox tails.

-oOo^

Tw immun, m m m

e

Beceaiber 7» I9*i2.

The Bureau of Cue toes announced today that under the silver
or hlaelt fox import Quota provided for in -fells supplessentary trade
agreement with Canada there were imported during tho period
Beceaber l to $ , 191*2« 201 live silver or black foxes and 130 silver
f o x skins fro» Canada« 1*623 silver fox skins from countries other

than Canada« 1*62 pounds of paw«« head«, or other separate parte of
silver or black foxes« and 1*M silver or black fox tails.

JTStgc

TKKÄSURT DEPAKTKEHT
Washington

FOR B H Æ i m , WORKING HEWSPAP

PRESS SERVICE

Tuesday. Deceaber 8. 19A2._____

I2/7/42

The

(io.

Secretary et

the

Treasury announced

last

waning

3

that the tendere fer

file Sec.

$500,000,000, er thereabout«, of 91-da? Treasury bill« to be dated December 9, 1942 ,

I for j

and te nature larch 10, 1943# «hieb «ere offered eu December 4# «ere opened at the

i dated I

Federal Reserve Bank» cm December 7.
The detail» of this issue are as follows t

on Dece

Total applied for - $1,222,832,000
Total accepted
«
504,821,000

fetal api
I ac<

Bange of accepted bides
High
low
Average price

* 99*925
- 99*907
- 99*907/

I deta

Equivalent rate of discount approx. 0.297g per anna
lange of
*
«
«
«
«
0.368g *
«
•
*
«
*
*
0.367g «
» !

(80 percent of the anount bid for at the low price was accepted)

TREASURY DEPARTMENT
Washington
POR RELEASE, MORNING NEWSPAPERS,
Tuesday, December 8, 1942♦
12/7/42
'
;
> ,
'

•l
jt:M

Press Service

No. 34-49

^ ttadwifor
WDwèfJ
wi«Nit

The Secretary of the Treasury announced lést evening that the
tenders for #500,000,000, or thereabouts, of 91-day Treasury bills
to be dated December 9, 1942, spd to mature March 10, 1943, which
were offered on December 4» were opened at the Federal Reserve
Banks on December 7*
The details of this issue are as follows:
Total applied for - $1,222,832,000
Total accepted
504,821,000

iprox, 0#
• UÉ1

Range of accepted bids:

« oj1

u icw
ptad) I

High

- 99*925 Equivalent rate of discount approx, 0.297/T

Low

- 99-907

Average
Price - 99*907/

#
n

'

m

»

»

«

per annum
approx. 0 .3 6 8 $
per annum
approx. 0.367$
per annum

(80 percent of the amount bid for at the low price was accepted)

-0 O0 -

It

TREASURY DEPARTMENT
Washington
rl?

u «s,u

a d d re ss W R andolph E. P a u l, G e n e ra l.C o u n se l'
b a fo re th e
P a g e r s A s s o c ia t io n o f
r N V ° f k ' % w ïo r k » i s sch e d u le d f o r d e liv e r y at
P .h .. E a s te rn War lim e. T uesd ay, TtarflmW g. i qlz.
and i s f o r r e le a s e a t t h a t t im e .)

The Role of L ife insurance in-War Finance
our War exPen^itures and war financing operathey
Agination, The resulting
proSems
To ££ « * * * * ' * ? * the outlines of these
readv with +h*aS1Cail+ Very slmPle* The Government must always be

m
*»hih

S°

H

r
»
S
t
f
e
J
r
« p o r t a n t jo b
The Governm ent sh o u ld g e t t h a t H n e y in ways w h ic h "

eU her d i r e o U ^ K ^ t l
th e money in su ch
e a s ie r . And. f i n A v
but
be done in s io h a w ay’ t h it
th e .p eo p le.
7
3t

f ' ™ ^

^ w i.t b th® war 5 f « t ,
a s P0 S 3 lb le > i t sh o u ld get
n n f ^ ^ T 31“ f ^ ^ m e n t s w i l l be made
It, ZnJ**?,-, 1? P ° ^ a n ce» the jo b sh o u ld
t h s ° ° s t w il;l" b® d is t r ib u t e d f a i r l y among
2

?

w h U e Ttte°filMr,vhiD'ai'-0an n0t be Postponed.
secured by t L t a

» f

It must be met now

Muehthfb,

^

°?" *

T ^ t ^ ^ v o i d s ^ p L e ^ X
T
d6!irabD
Taxation now f t Sts w a r t ^ T i i S t ^ ^ i n t e r e s t charges later,
a post-war inflation.
on and diminishes the dangers of

ful ^ o i S r o f hi L o t i n g T t K db m m* ^ ehne0eSSarUy extended and Paininto the Treasury an
!^iah,on 8 0 annual basis will bring
tax revenue. K
S
b
^
W
*
S
W
? - * “ "
8 °f net
feeling - that we dese^e a iaoltion C
I certainly share the
ourselves to those recently enacted
Tt ? ^ t h e r taxes to-adjust
probably have to s a c r S c e f ToTtt iob £ * VT T T ™ 9 3 h a U
done, particularly when the greatest wir 5 t“ T ° S lslation is never
are to be-financed.
* greatest war expenditures in world history

*

- 2

m

Tæces are particularly important now because they reduce the
competition for goods and services, among civilians and between
civilians s-nd war agencies. Although production in the United States
J
v©ny high level, at least half of it is going and must go
about% n Î h?Î Î : Tl\e most ° R tim is tic current estim ates in d ic a te
tn a t ab out^ 7 0 b i l l i o n oi consumer goods and s e r v ic e s , measured at
present p r ic e s , w il l be a v a ila b le fo r c iv il ia n s to purchase in
calendar year 1943. Yet during th a t same year in d iv id u a ls m i l r e ­
c e iv e ^ as a r e s u lt o f record le v e ls o f production, employment and
economic a c t i v i t y , incomes aggregatin g about $125 b i l l i o n . A fte r ■
deducting c e rta in personal ta x e s chargeable a g a in s t t h is incomei i n W llf have I e f t &110 b i l l i o n o f d isp o sable income’ which they
11 be fre e to spend or to s a v e .' I f th e y spend more than $70 b i ll io n
g00dS and Sef vice£b thG ra ck e t demand m i l be in excess o f
h f n f n v pri0GS must r J SG> I f , th e y should tr y to spend the whole
tfiiu b i l l i o n , p ric e s would take a tremendous jump in 1943- g r e a tlv
I’ -® C0Sa ? th è ^ J * “ * * * . d isru p tin g markets* b rin g in g
d is s a t is fa c t io n and lowered morale because o f the high co st o f liv in g
and an o jie r ways g r e a tly in ju r in g th e war e f f o r t .
’

W » 1 f r ! r h 1^ P e 0 p le
^aVB been s a v in g in re c e n t months a t re c
le v e ls , and the f ig u r e s may re a c h §2 5 b i l l i o n f o r 19 4 2 . I f . in 1943
th e y sa ve no more th a n in 1 9 4 2 , th e y w i l l be in th e p o s it io n o f
t r y in g to spend^ 8 5 b i l l io n f o r o n ly § 7 0 b i l l io n o f a v a ila b le ro o d s

W 8!!£ 3 i ! m‘ ave» wh ! î 0 n ly t h is exoess
attempted consumption
^
th® p ric e o o ilin g s and the wage c o n tro ls now
in o p eiatio n woulci be put under severe and dangerous pressure ___
S s S b ilit t h f
t h r ®a te n n o t o n ly t h e ir in t e g r it y , b u t a ls o th e
p o s s ib ilit y o f W e ir c o n tin u a n c e . Somehow we s h a ll have to a b so rb •
° r ^ ta x t ^ an a d d it io n a l §15 b i l l io n o f attem pted sp e n d o fliv in g ^
t0 ST0:L£i iu r th e r in f la t io n and in cre a se s in th e co st
+ . - , ^ e T ra a f y 3 r f s d e e p ly co n cern e d w ith th e in f la t io n a r y p o te n T h S e are
® 3 ltu a ^ ° n wM-oh i s r a p id ly developing in our economy.
There are some wno s c o f f a t the th r e a t o f i n f la t i o n , and who have
T ^
^
i Warnini , S, 0 f in f la t io n a r y d an g er as in f la t io n h y s t e r ia .
I am su re ;th a t you w i l l not agree w ith t h is u n r e a lis t ic view . The
i r w w 1S ° ° ^ ldenf ° f our a b i l i t y to pay fo r t h is war 'without
in ju r y to our f in a n c ia l in s t it u t io n s or to th e l i f e savings or to
Î l l !? , 1
“
li! ° f our PeoP lQ- But we s h a ll not, accomplish
Y avoiding our problems* We s h a ll, preserve our in s t it u ­
tio n s and way o f l i f e only i f we fa c e our problems sq u aro ly. This

! / ? - ^ S\ anal:P e ° ur tasks and d iscu ss them w ith each other
xran kly and^without e q u iv o ca tio n . I n t e llig e n t a c tio n must be based
upon a n a ly s is o f th e f a c t s , however unpleasant they may be. Our
problems are so d i f f i c u l t th a t t h e ir s a t is fa c t o r y s o lu tio n w ill
req uire our combined wisdom.

~3 ~

« +r
sh^ d be clear by now that heavier taxes are needed. The size
le pro lem is almost staggering* Increasing taxes by | 1 5 billion — •
no task to, be undertaken lightly, I can assure j L - wo^ld not
w o S r b e 1 D L d e™ ir o f ° e 3 T t«°n.by t h 0 Same amount- Some of Ule taxes
s a S n ^ t n t S ? r , ° t b « fundB+that ««• already counted as part of the
,
saving anuicipated for next year*
For both political and economic reasons, countries flrfh-f-in»

ZIJ'Z

ar financing.

br n abie

Large-scale borrowing is also necessarv

rir

nnt

doef™ + ™

d:u,lini 3hed- But lending savings accumulated in the past
d"
* » ■ " « • or the attest
of'Sl^ M n 4 rt^ 5
3
• t xs required is additional net savings
iosome- 1 stress the word
people reduce their accumulated savings bv ilO M i l l ™ *+x,
others vail have to increase theirs by $ 2 5 billion
increase in savinn‘=? nn+ VuX
. if w j oinion* xt is the net
savings, not the gross increase, that counts.
— '

s^
economy

mobiles, refrigerators

4

s

£

l F

gs-

i

% J S^

Pfrtioplarly of auto­

anticipation of tax payments has doubtless t a n a decent f a c i a l so.
efi.eJ h® G^ r m e n t has taken various steps which are having the
restrictions
f f w 00"trols and rationing
the cost of living and thni 0 „„Kfvrecb e^ ects, both in keeping down
ducing their S a S s of L S T f
to save> and
in re­
measures have ^ c o ^ a g e d s t o n ^
°f S °?d3’ M e e t l y these
ave encouraged simpler, more economical, ways of living.

*■* 4
^Millions of our citizens have responded, and are responding,
magnificently to the Var Savings Bond campaign. Such saving from
current income and lending directly to the Government is, next to
taxes, the best possible form of war finance in the present crisis.
■1S
great assistance in the war effort, and can not be
encouraged too strongly.
Saving in other forms is also valuable to the war effort. An
excellent example is one in which every one in this room is interested,
namely, savings made from current income and devoted to the payment of
life insurance premiums. Such payments are withdrawn from the inft0 1 ,0 8 1 !1
sPenc^-ng» ^hay are set aside more permanently
than many other types of saving because most of us make a special
insurance in effect. In addition, insurance premium
payments enable the life insurance companies to purchase Government
rtI7 ;-?ilnSUi'“ 0e oomPanles have been, and it may be confidently
Ttas
I l L r n t l + U e + t 0 b°J lare° purchasers of Government securities.
just’a f s u r ^ 3 i ^ e+nt’ **?**,**& for
insurance premiums flow
just as surely, if not as directly, into the war effort.
concern^that i ^ t h ^ g-ank with you if I did not express a very real
,f r ? ^nat “ the absence of further governmental action the
attempted purenase of_goods in 1943 will not be sufficiently reduced
4-n +u lncreasf y
savings to hold prices and the cost of living down

£ d to S S
“ d S l i not

f

i t '

th a t 6 - ™ t a X

a c ti o n s h o S d ^ r

’ a i“i:ther inorease in taxes.

The burden of’the
sreased by appropriate higher taxes and it will be

^pScfcontrol^
be in t L
h
d

°?.the aotibn V d l 1 no doubt ba
the f i S d s
rationing of goods. Part of the action might

consSm^sfe^im Tf “ dubement n°t to spend; a progressive tax on
niwf i r ?PQnd;Lng o£ th© type recommended .last year bv the Tr««mr

V6 +S? ° h

ce iv a £ ? £ / § * ? hH

“

Pa4

income m d family^esrohsibilitie^Trd6^
to equal or 2 1 ,
^
’ "d

*

1^ re^uirement, adjusted to
everyone would be obliged

the f o ™ g l e ~ t 2 l i f
ao not exhaust the list. Whatever
attl2 1 6
aotlon may take, the purpose would be to reduce
attempted consumption, either through withdrav^ng money from the

spendings stream or through increasing saving from cur?e.nt income.
c o n t r i b l . t n l t l l c l i ^ is satisfied, I believe, that he is not
inflation or an increase in the cost of living. He is
of demand ?or g o o d s l ^ f e p ^ v h a t IB“t.®ver5r follar spent is a dollar
be n p r h o r h c r 1
£ said earlier. There will only

a t present

° f g° ° dS and s e r v ic e s a v a ila b le in I

943

3 1 1 ( 1 saving3' atte»
must be reduced to ^ 7 0
SOme way or wa^ s that «“ount
reduced to *>70 billion if prices are not to rise further. We

- 5 -

^ ^ t n°tT W » el?ei,tte?-1i
aSwa pe°ple 1,7 trying 40 buy more « » » that
amount. There just will be no more. If we try to buy more, the result

livinTnost ^ 6 S r rta|ie!> bla°k market3' broken price ceilings, higher
wm £
d a W 5 d soramble for goods. I need not dwell on the
effort „*+v!h ™ajr Pri°e lncreases TOuld have on the cost of the war
effort or the hardships which rising living costs would impose on the
norneedPtoSd^ellUP3 - ^ dt ^
personswith fix0d incomes.
rises would
w “ auJ L®"'ce on the injury which such price
represented tP P ? / “ holders of l l £ e insurance policies, who are

represented in all income groups»

f.safd a"? tj*e .beginning, the basic problems of war finance
of f i n a r ^ ^ + u 3^ 16*- The one 1 have ^ s^ s s e d tonight is the problem
? r o f ^ n 8 -the ^
^ th0Ut the dis™ptive price rises which result
the problem
^ l u m e of goods» The solution of
as a^whtVl p
*?lutio? that v a l 1 be ior the benefit of the people
confident +hZ a ^ gner tax? S and more thrift, more Saving, / & /
nfident the American people will support that solution, 2

i

I cert

J**

~2 ~

COTTON CARD STRIPS, COMBER WASTE, LAP WASTE, SLIVER WASTE, AND ROVING WASTE,
WHETHER OR NOT MANUFACTURED OR OTHERWISE ADVANCED IN VALUE.
commencing September 2 0 , by Countries of Origin:

Annual quotas

2/
Total quota, provided, however, that not more than 33”*l/3 p e r c e n t o f the
quotas shall be filled by cotton wastes other than card strips/ and comber
wastes made from cottons of 1 — 3 /l6 inches or more in staple length in the
case of the following countries: United Kingdom, France, Netherlands,
Switzerland, Belgium, Germany and Italy:
(In Pounds)
______________________ ______
'
J TOTAL IMPORTS :ESTABLISHED:Imports Sept. 21, “
Country of Origin: Established i Sept. 21, 19^2:33-1/3$ of :igU2 , to
------------- --- ;
QUOTA rfco Nov>28, 19ij2 .»Total Quota: Nov» 28« 191x2
if

United Kingdom,....
^,323,1*57
Canada,,,..........
239,690
France,..,..... .
227,^20
British India,..,.,,
69,627
Netherlands........
6 8 ,2^0
Switzerland.,,,.,,,.
Wlf,3Sg
Belguim,........ . 3 2 , 5 5 9
Japan.............
3UI, 535
China,.............
17,322
Egypt.,...,........
8,135
Cuba......
6,5©
G e r m a n y , 76,329
Italy..............
21,263

TOTALS

-

—

**

75,807

61,823
mm

mm
mm

mm

22,71+7
1^,796
12,853

m
mm
mm

-

—

„

•»

-

m

25,1+1+3

mm

7,ogg

-

1 .599.886

ly

Included in total imports, column

.

£?/

The President^ proclamation, signed March 31» 1 9 ^ 2 , exempts from import
quota restrictions card strips made from cottons having a staple 1 —3 / 1 6
inches or more in length.

- 0 O0 -

mm
m

-

H|3,318
2

„

—

mm

5,iS2,509

1 , ^ 1,152

81,1495

m

FOE BÎMEDIATE RELEASE,
December19U2.

3 l

T h e B u r e a u o f C u s to m s a n n o u n c e d to d p .y t h a t p r e l i m i n a r y r e p o r t s f r o m t h e
c o l l e c t o r s o f c u s to m s sh ow im p o rts o f c o t t o n an d c o t t o n w a s te c h a r g e a b l e t o th e
im p o r t- q u o t a s e s t a b l i s h e d b y t h e P r e s i d e n t ’ s p r o c l a m a t i o n s o f S e p t e m b e r 5 » 1 9 3 9 »
a n d D e c e m b e r 1 9 t 1 9 U 0 T-'S S f o l l o w s , d u r i n g t h e p e r i o d S e p t e m b e r 2 1 , 19 U 2 , t o
November 28, 19h2, inclusive!
COTTON HAVING A STAPLE OF LESS THAN l-ll/l6 INCHES (OTHER THAN HARSH OR ROUGH
COTTON OF LESS THAN 3 / U INCH IN STAPLE LENGTH AND CHIEFLY USED IN THE MANU­
FACTURE OF BLANKETS AND BLANKETING, AND OTHER THAN LINTERS). Annual quotas
commencing September 2 0 , by Countries of Origin;

S ta p le le n g th le s s
t h a n 1- l / g "
:
{Im p o rts S e p t.
: E s t a b l i s h e d { 2 1 , I 9U 2 , t o
Q u o ta
{N o v .2 8 . 1 9 it2
1

Count ry o f
O rig in

E g y p t an d th e A n g lo E g y p tia n S u d an ...............
7 S 3 ,8 l6
2 U 7 .9 5 2
P e r u , , , « * « * « « • * .« .< ,» • • • *
B r i t i s h I n d i a , , , , 2 .0 0 3 ,1 * 8 3
C h in a ,
1 , 3 70 ,79 1
M e x i c o . . . . . . . . . . . . . . . . . . . . . . . . . . . . . T 8 , 883,259
B r a z i l , , , , , ........
6 18 ,723
U n io n o f S o v ie t
S o c i a l i s t R e p u b l i c s ,,,,
1 * 7 5 ,1 2 1 *
A rg e n t i n a , .......... . „ ..........
5 ,2 0 3
H a i t i ..................................
237
E c u a d o r ,. . . . . . . . . _ _ . . . .
9 ,3 3 3
H o n d u ra s........ .................. .
752
P a r a g u a y ,.. . . ............ . . . .
871
C o l o m b i a , ••••,,
12 U
I r a q , , . , , . , . , , , - , , , ..........
195
B ritis h E a st A f r i c a ,,,.,
2 ,2 U 0
N e th e rla n d s E a s t I n d ie s ,
7 1 ,3 8 8
B a r b a d o s ,............... .
O th e r B r i t i s h W est
In d ie s
.................
2 1,3 2 1
N i g e r i a ,.......... . ......... .
5 .3 7 7
O th e r B r i t i s h W est
A frica 2
..........
1 6 , 00**
O th e r F re n c h A f r ic a ¿ / *
6S9
A lg e ria and T u n i s i a .,,,,
lU ,5 lé ,S S 2
JL/
2 /

S t a o l e l e n g t h 1 - 1 / 8 * o r m o re
b u t l e s s t h a n 1 - 1 1 flGn
E s ta b lis h e d t Im p o rts S e p t,
Q u o ta
i 2 1 , 19 U 2 , t o
U 5 . 656 .U 20 : N o v . 2 8 . 1 9 k 2
2 5 ,1 1 * 2 ,5 3 7
1 ,0 1 9 ,6 5 1 * '

—

2 1 * 7 ,9 5 2
•
-

8 ,8 8 3 ,2 5 9
6 1 8 ,7 2 3
«•

mm

237
9 ,2 6 3
mm

'
jM

_

•
mm ■
mm

_|_

mm

9 ,7 5 9 ,1 * 3 1 *

1* 5 , 656 , 1*20

Other than Barbados, Bermuda, Jamaica, Trinidad, and Tobago,
Other than Gold Coast and Nigeria,
Other than Algeria, Tunisia, and Madagascar,

26 , 162,191

TREASURY DEPARTMENT
Washington
Press Service
No* 34-50

FOR IMMEDIATE RELEASE,
Wednesday. December 9« 1942.

The Bureau of Customs announced today that preliminary reports from the
collectors of Customs show imports of cotton and cotton waste chargeable to the
import ouotas established by the Presidents proclamations of September 5, 1939,
and December 19, 1940, as follows, during the period September 21, 1942, to
November 28, 1942, inclusive?
COTTON HAVING A STAPLE OF LESS THAN 1-11/16 INCHES (OTHER THAN HARSH OR ROUGH
COTTON OF LESS THAN 3/4 INCH IN STAPLE LENGTH AND.CHIEFLY USED IN THE MANU­
FACTURE OF BLANKETS AND BLANKETING, AND OTHER THAN LINTERS). Annual quotas
commencing September 20, by Countries of Origin?

Country of
Origin

?

Egypt and the AngloEgy-otian S u d a n .....
P e r u ............. .•.
British I n d i a .... .
China ...............
Mexico ...............
B r a z i l ...... .......
Union of Soviet
Socialist Republics
Argentina....... .
H a i t i ..... .........
Ecuador .............
Honduras.......... ..
Paraguay ........ .
Colombia...... .....
Iraq ............... .
British East Africa...
Netherlands East Indies
Barbados .............
Other British West
Indies 1/ ..........
Nigeria............ »
Other British Wbst
Africa 2/ .........
Other French Africsa 3/
Algeria and Tunisia ..

/
2/
3/
1

(In Pounds)
.........
Staple length less t Staple length 1-1/8” or more
but less than 1-11/16”
!
than 1 - 1 /8 "
♦
♦Imports Sept.? Established ; Imports Sept.
Qpota
? 21, 1942, to
Established?21, 1942, to ?
Quota
?Nov.28. 1942 ? 45,656.420 : Nov. 28. 1942

25,142,537
1,019,654
—
—

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

' 247,952

475,124
5,203
237
9,333
752
871
124
195
2,240
71,388

237
9,263
—
—
-

—
—
—
—

21,321
5,377

-

—

16,004
689
•*
14,516,882

—
—
—
9,759,434

8,883,259
618,723

**
—
—
-

**
mm

45,656,420

Other than Barbados, Bermuda, Jamaica, Trinidad, and Tobago.
Other than Cold Coast and Nigeria.
Other than Algeria, Tunisia, and Madagascar.

26,162,191

*

2

COTTON CARD STRIPS 2/, COMBER WASTE*, RAP WASTE, SI ITER WASTE, AND ROWING WASTE,
WHETHER OR NOT MANUFACTURED OR OTHERWISE ADVANCED IN VALUE. Annual quotas
Commencing September 20, by Countries of Origins
Total quota, provided, however, that not more than 33-1/3 percent of the quotas
shall be filled by cotton wastes other than card strips 2 / and comber wastes
made from cottons of 1-3/16 Inches or more in staple length in the case of
the following countries: United Kingdom, Prance, Netherlands» Switzerland,
Belgium, Germany and Italy:
(In Pounds)
î TOTAL IMPORTS ?ESTABLISHED îImports Sept. 21,
Country of Origin? Established : Sept. 21,1942 :33-1/3$ of îl942, to Nov* 28,
• TOTAL QUOTA :to Nov.28.1942 îTotal Quota :1942 1/
United Kingdom .,...
Canada
Prance ........ .
British India .....
Netherlands .......
Switzerland ........
Belgium ......... ..
Japan .............
China
Egypt .......... .
Cuba ........... .
Germany..... .
Italy ..............

4,323»45?
239*690
227,420
69» 627
68,240
44,388
38,559
341,535
17,322
8,135
6,544
76,329
21,263

TOTALS

5*482,509

1

/

2/

Included in total imports, column

1,441,152
81,495
«
61,823
-'

•*
—
f.

2

•w
75*807
—
22,747
14,796
12,853
».
—

M.
—
—
mm

—

m

25,443
7,088

—
—

143,318

1,599,886

-

.

The President‘s proclamation, signed.March 31, 1942, exempts from import
quota restrictions card strips made from cottons having a staple 1-3/16
inches or more in length.

-oGo-

2-

l

5
Commodity

--

■

j_______ Established Quota________ :

* Period and Country i

Quantity

U

n
©f

i
t
i
'
• Imports as of

I

iQaantity: November 28, iqUp !

Silver or black foxes,
furs, and articles:

P aw s, h ead , o r o th e r
s e p a ra te d p a r ts
P ie ce p la te s

12 m o n t h s f r o m

500

P ec. 1 , 19*1
n

A r tic le s , o th e r
th a n p ie c e p l a te s

it

M o la sse s an d s u g a r
s iru p s c o n ta in in g
s o lu b le n o n su g a r
s o lid s eq u al to
m o r e t h a n 6$ o f
t o t a l s o lu b le
s o lid s

C a le n d a r y e a r

550

Pounds

500

U n it

1 , 500,000

—oOo—

Pounds

G a llo n

(I m p o r t q u o ta
fille d )
H one

72*,696

1

POR IMMEDIATS RELEASE.
/»

The Bureau of Customs announced preliminary figures for imports of commodities
within quota limitations provided for under tfcade agreements, from the beginning of
the quota periods to November 20 , 1942, inclusive, as follows:

Commodity

Cattle less than 200
pounds each
Cattle, 700 pounds or
more each (other than
dairy covs)

Established Quota
Period and Country : Quantity

Calendar year
Quarter year from
Oct. 1 , 1942
Canada
Other countries

Unit
of
: Imports as of
:Quantity: November 28, lftg

100,000

Head

51,720
6,214

Head
Head

46
(Tariff rate quota
filled)

3,000,000

Gallon

Cream, fresh or sour

1 ,500,000

Callon

Pish, fresh or frozen
filleted, etc., cod,
haddock, hake, pollock,
cusk and rosefish
White or Irish potatoes
certified seed
other

ilk,fresh or so
fri or sour

Calendar year

1 7 ,1 7 ^ 9 5

?<*md

1 5

1 2 months from
Sept. 15, 1 9 U2
1 2 months from
Sept. 1 5

90.000.

000

Pound

19,180,829

60.000.

000

Pound

Pound
(unstemmed
equivalent) (tariff rate
quota filled)

Cuban filler tobacco,
unstemmed or stemmed
(other than cigarette
leaf tobacco), and
serap tobacco

Calendar year

22 ,000,000

Red cedar shingles

Calendar year

2 ,6 l 7 ,l l l

Silver or black foxes,
furs, and articles:
Poxes valued under
$290 ea. and whole
furs and skins

Period - MayNov* 1942
All countries

Tails

to Ï

6 6 ,1 6 4

Whole milk, fresh or sour Calendar year
Calendar year

ofCm

12 months from
Bee. 1, 1941

41,774
5,000

.2 9 5 . 7 6 1

2 2 9 ,9 9 0

S q u are

2,530,681t

Humber

21,017

Piece

( i m p o r t q u o ta |
fille d )

or frozen
K etc., cod,
¡ife , pollock
li rosefish
p potatoes
id seed

W tobacco,
^ or stenmed
cigarette
and
tabacco

TREASURY DEPARTMENT
Washington

FOR IMMEDIATE RELEASE,
Thursday, December 10, 1942.

Press Service
No. 34-51

The Bureau of Customs announced preliminary figures for imports of commodities
Jwithin quota limitations provided for under trade agreements, from the beginning of
»the quota periods to November 28, 1942, inclusive, as follows:
.
Established Quota
.Unit of ,* Imports as of
; Period and Country : Quantity :Quantity, Nov. 28, 1942

Commodity

Dattle less than
i pounds each

200

Calendar year

1 0 0 ,0 0 0

Read

66,164

Head
Head

46
(Tariff rate
quota filled)

"attle, 700 pounds or
•I more each (other than
\ dairy cows)

Oparter year from
Oct. 1, 1942
Canada
Other countries

lihole milk, fresh or sour

Calendar year

3,000,000

Gallon

5,342

[ream, fresh or sour

Calendar year

1,500,000

G-allon

804

Calendar year

17,174,495

fish, fresh or frozen
I filleted, etc., cod,
jlhaddock, hake, pollock,
1 cusk and rosefish
:
K
Ihite or Irish potatoes
jjrcertified seed
fother

uban filler tobacco,
lj|unstemmed or stemmed
^ (other than cigarette
[leaf tobacco), and
l|iscrap tobacco
ed cedar shingles
!liver or black foxes,
[furs, and articles:
I[Poxes valued under
l|$250 ea, and whole
ifurs and skins
n
pis

1 2 months from
Sept. 15, 1942
1 2 months from
Sept. 15

Calendar year
Calendar year

Period - May zNov* 1942
All countries
1 2 months from
Dec. 1, 1941

51,720
6,214

Pound

15,295,761

90.000.

000

Pound
19,180,829

60.000.

000

Pound

2 2

,0 0 0 , 0 0 0

229,990

Pound
(unstemmed
equivalent) (Tariff rate
quota filled)

2,617,111

Square

2,530,684

41,774

Number

21,017

5,000

Piece

(import quota
filled)

2

Commodity

-

i
*
Established Quota
. Unit of
; Period and Country : Quantity : Quant ity

Imports as of
Uov. 28, 1942

Silver or black foxes,
furs, and articles:
faws, head, or other
t separated parts

1 2 months from
Dec. 1, 1941

500

Pounds

jiece plates

n

550

Pounds

trticles, other
than piece plates

«

500

Unit

Solasses and sugar
sirups containing
soluble nonsugar
solids equal to
more than && of
total soluble
solids

Calendar year

1,500,000

Gallon

(Import qpotä
filled)
Hone

45

724,696

FOR IMMEDIATE RELEASE,
Beceiaber-^fT 19*42»

lo
The Bureau of Customs announced today preliminary figures shoving the quan­
tities of wheat and wheat flour entered, or withdrawn from warehouse, for con­

|l f38 Bureau <
U iS 0f ch eats

sumption under the import quotas established in the President's proclamation of

j | {ion under th
May 28, 19*41, as modified by the President's proclamation of April 13, 19*42, for

| | | 1941, as ]
the twelve months commencing May 29, 19*42, as follows:

!f Itielve montbs

Country
of
Origin

Canada
China
Hungary
Hong Kong
Japan
United Kingdom
Australia
Germany
Syria
Hew Zealand
Chile
Netherlands
Argentina
Italy
Cuba
France
Greece
Mexico
Panama
Uruguay
Poland and Danzig
Sweden
Yugoslavia
Norway
Canary Islands
Rumania
Guat emala
Brazil
Union of Soviet
Socialist Republics
Belgium

WHEAT
:
Imports
Established : May 29, 19*42, to
Quota
* Nov. 28. 19*42
(Bushels)
(Bushels)

Wheat, wheat flour, semo­
lina, crushed or cracked wheat
and similar wheat products
Oountiy
f
#
Imports
jjof
Established : May 29, 19*42,
Origin
Quota
: Nov. 28.19*42
(Pounds)
(pounds)

795,000
-

795,000
-

3,815,000
2*4,000

-

•
-

13,000
13,000
8,000
75,000
1,000
5,000
5 .0 0 0
1,000
1,000
1,000

-

100
-

100
100
-

100
2,000
100
-

1,000
-

100
•
-

1,000
100
100
100
100
¿00,000

-

1*4,000

-

2,000
12,000
1,000
1,000
1,000
1,000
1,000
1,000
1,000
1,000
1,000
1,000

—
-

—oOo—

•

la

mm

m

-

Sang
[fygdn
lia

*4*4
•
•.
-

-

-

island
:[lands
jtina

11
I
)
s

|

piDannig

Ilia

mm

—

-

islands
,a
t
1 la

—
*4,000,000

3,815,04*4

r Soviet

-

•
795,ooo

3 ,815,000

fist W n

TREASURY DEPARTMENT
Washington

Press Service

FOR IMMEDIATE RELEASE.
Thursday. December 10» 1943.

tonne,i

prods

dill,

'

^

•No* 34—52

The Bureau of Customs announced today preliminary figures showing the quan­
tities of wheat and wheat flour entered, or withdrawn from warehouse, for con­
sumption under the import quotas established in the Presidents proclamation of
May 28, 1941, as modified by t}ie Presidents proclamation of April 13, 1942, for
the twelve months commencing May 29, 1942, as follows?

¿ea;
shedo:

m

boil

Country
of
Origin

r

0
0
0

0

0

10

10

10

10

10

A

10
10
10

A

10
10

A
A
A
A

10

A

A
A

0
0

0

0

f

Canada
China
Hungary
Hong Kong
Japan
United Kingdom
Australia
Germany
Syria
New Zealand
Chile
Netherlands
Argentina
Italy
Cuba
France
Greece
Mexico
Panama
Uruguay
Poland and Danzig
Sweden
Yugoslavia
Norway
Canaiy Islands
Rumania
Guatemala
Braz il
[Nnion of Soviet
Socialist Republics
Belgium

JTifoeat¿wheat flour,semolina,
*crushed or cracked wheat
WHEAT
•and similar wheat "products
?
Imports
i
: Imports
:
May
29,
1942, to i Established:May 29, 1942,
Established
j Nov. 28, 1942
Quota.
$
Quota
-iNov. 28. 1942
(Bushels)

(Bushels)

795,000

795,000

•p»

—
m

10 0

10 0
10 0

-

•t
1 ,0 0 0

10 0

-

**
1 ,0 0 0
10 0

8 ,0 0 0

m

•*
-

1 ,0 0 0

«■ft
—
-*
f*
44
_
—
—
—
**

**

10 0

800,000

795,000

-oOo-

3,815,000

75,000

10 0

10 0

3,815,000
24,000
13,000
13,000

-

—
«!*
-

10 0

(Pounds)

-

m

10 0
2 ,0 0 0

(Pounds)

5,000
5,000
1 ,0 0 0
1 ,0 0 0
1 ,0 0 0

14,000
2 ,0 0 0
1 2 ,0 0 0
1 ,0 0 0
1 ,0 0 0
1 ,0 0 0
1 ,0 0 0
1 ,0 0 0
1 ,0 0 0
1 ,0 0 0
1 ,0 0 0

**
-

1 ,0 0 0
1 ,0 0 0

**•

—
—

—
-

-

-

4,000,000

3,815,044

P

*

POE IMMERITE RELEASE
D e c e m b e r 1942._____

She Bureau of Customs announced today preliminary figures showing the quan­
tities of coffee authorized for entry for consumption under the quotas for the
twelve months commencing October 1, 1942, provided for in the Inter-American
Coffee Agreement, proclaimed by the President on April 1 5 , 19 hl, as follows:

Country of
Production

:
:
• :
•
*

Signatory Countries:
Brazil
Colombia
Costa Rica
Cuba
Dominican Republic
Ecuador
El Salvador
Guatemala
Haiti
Honduras
Mexico
Nicaragua
Peru
Venezuela
Non-signatory countries:
British Empire, except
Aden and Canada
Kingdom of the Netherlands
and its possessions
Aden, Temen and Saudi
Arabia
Other countries not signatories of the InterAmerican Coffee
Agreement

Quota Quantity
(Pounds)

1,353,183,^0
*t58,336,3**©

29 , 10 0 ,72 0

11,6110,288

f

1 7 , ^ 60,^32
2 1 ,8 2 5 ,5^0
8 7 , 302,160
77,844,426
40,013,^90

2 , 9 10 ,0 72
69,114,210
28,373.202

e
*
:
:
f
#

Authorized for entry
for consumption
As of (Date)
:
(Pounds)

Nov* 28, 1942
H

n
n
K
n
n
n

tt
H

it
it
it

it9 .6 7 s .907
86 , 161,193
967,919
3 , 492,012
3,79*t,985
2,716,594
7,062,528
5,038,392
10,5*13,718
958,298
3,064,225
67,380

3 , 6 37.5 9 0
6 1 , 1 1 1 ,5 1 2

M

2
1 1 . 3 *17.866

)
)
)
)
)
) 5 1 , 653. 77s
)
)
)
)
)

it

1 3 » 1 5 5 *101

0 O0 -

theasuhy

m&mime

Washington
POE B M B U T 3 HSLEASE,
Wednesday* Decernhe- 9, 1942«

Press Service
Ho. 34-53

OThe Bureau of Customs announced today preliminary figures showing the
Quantities of co^eee authorized for entry for consumption under the quotas
for the twelve months commencing October

1

, 1942* provided for in the Inter-

American Coffee Agreement, proclaimed by the President on April 15, 1941, &g
DMMDtlM

*T il a

follows«

Countiy of Production

Quota Quantity
(Pounds)

Signatory Countries:
Brasil
Colombia
Costa Rica
Cuba
Dominican Republic
Ecuador
El Salvador
Guatemala
Haiti
Honduras
ll,Äi
Mexico
Nicaragua
Peru
Venezuela
;Hon-sIgnatory countries:
British Empire, except
1Ü
Aden end Canada
Kingdom of the Hetherlands
and its possessions
Aden, Yemen and Saudi
Arabia
Other countries not signatories of the Inter-*
American Coffee
Agreement

1,353,183,480
453,336,340
23,100,720
11,640,288
17,460443s
21,835,540
87,202,160
77,844,426
40,013*490
2,910,072
69,114,210
28.373,202
3,637,590
61,111,512
)
)
)
)
)
)
)
)
)
)
)

51,653,778

'oOo~

i
*
•

Authorized for entry
.....
for consumption
As ei' ^Date)
(Pounds^
Hov. 28, 1942
Xi

*

*
,r
n
n
8

*
n
,J
R
8

49,678,907
86^161*193
967,919
3,492,013
3,794,* 935
2,716,594
7*062*528
5,038,293
10,543, VIS
953,293
3,064,235
67,280
2
11,347,866

13,155,101

- 3 -

issue or on subsequent purchase, and the amount actually received either
upon sale or redemption at maturity during the taxable year for which the
return is made, as ordinary gain or loss*
Treasury Department Circular No* 418, as amended, and this
notice, prescribe the terms of the Treasury bills and govern the condi­
tions of their issue*

Copies of the circular may be obtained from any

Federal He serve Bank or Branch*

<5 $

°

-

2

~

Reserve Banks and Branches,,following which public announcement will be made
by the Secretary of the Treasury of the amount and price range of accepted
bids.

Those submitting tenders will be advised of the acceptance or rejec­

tion 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.

Payment of accepted tenders at the

prices offered must be made or completed at the Federal Reserve Bank in
cash or other immediately available funds on

December 16f 1942_____ *

The income derived from Treasury bills, whether interest or gain
from the sale or other disposition of the bills, shall not have any exemption,
as such, and loss from the sale or other disposition of Treasury bills shall
not have any special treatment, as such, under Federal tax Acts now or here­
after enacted.

The bills shall be subject to estate, inheritance, gift, or

other excise taxes, whether Federal or State, but shall be exempt from all
taxation now or hereafter imposed on the principal or interest thereof by
any State, or any of the possessions of the United States, or by any local
taxing authority.

For purposes of taxation the amount of discount at which

Treasury bills are originally sold by the United States shall be considered
to be interest.

Under Sections 42 and 117 (a) (l) of the Internal Revenue

Code, as amended by Section 115 of the Revenue Act of 1941, the amount of
discount at which bills issued hereunder are sold shall not be considered
to accrue until such bills shall be sold, redeemed or otherwise disposed
of, and such bills are excluded from consideration as capital assets.
Accordingly, the owner of Treasury bills (other than life insurance com­
panies) issued hereunder need include in his income tax return only the
difference between the price paid for such bills, whether on original

TREASURY DEPARTMENT

_ s

i iïDÊ

tagton

Washington
FOR RELEASE, MORNING NEWSPAPERS,,
Friday, December 11« 1942_____ .
£t£

; The Sec
es tender
is, to be

The Secretary of the Treasury, hy this uublic notice, invites tenders

tills of
for

Ano.oon.noo

, or thereabouts, of

91 .-’day Treasury hills, to he issued

lire la r c h
on a discount basis under competitive bidding.

The Dills of this series will

March 17, 1943
December 16f 1942-- , and will mature _
£ 5
when the face amount will be payable without interest. Thejr will be issued in

be dated

interest,
iminations

bearer form only, and in denominations of $1,000, $5,000, $10,000, $100,000,

1,000, OC

$500,000, and. $1,000,000 (maturity value).

lenders
up t
Monday,

mders will be received at Federal Reserve Banks and Branches up to the
War
closing hour, two o'clock p. m., Eastern jgtostodxtime, Monday, December 14j t _ l M ^
Tenders will not be received at the Treasury Department, Washington.

Each tender

multiple
|e oasis

(25. Frac
must be for an even multiple of $1,000, and 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 pointed forms and for­

warded in the special envelopes which will be supplied by Federal Reserve Banks
or Branches on application therefor.
Tenders will be received without deposit from incorporated banks and
trust companies and from responsible and recognized dealers in investment securi­
ties.

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 hy
an express guaranty of payment by an incorporated bank or trust company.
Immediately after the closing hour, tenders will be opened at the Federal^

e on the p:
I will be
jication ti

Tenders i
; ! and fruì
p in im
ppanied bj
[foils appi

[ess guarii
any,

Immediate

re Federa]
announce^

r amount

Serswin1

TREASURY DEPARTMENT
Washington

EOR RELEASE, MORNING NEWSPAPERS,
Friday, December 11, 1942.
i s - i f e —

•
---------------------

The Secretary of the Treasury, by this public notice, in­
vites tenders for $600,000,000, or thereabouts, of 91-day Treasury
bills, to be issued on a discount basis under competitive bidding.
The bills of this series will be dated December 16, 1942, and will
mature March 1?, 1943, when the face amount will be payable with­
out interest.

They will be issued in bearer form only, and in

denominations of $1,000, $5,000, $10,000, $100,000, $500,000,
and $1,000,000 (maturity value).
Tenders will be received at Federal Reserve Banks and
Branches up to the closing hour, two o ’clock .p.m., Eastern War
time, Monday, December 14, 1942. Tenders will not be received at
the Treasury Department, Washington. Each tender must be for an
everi multiple of $1,000, and 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 t.hat tenders be
made on the printed forms and forwarded in the special envelopes
which will be supplied'by Federal Reserve Banks or Branches on
application therefor.
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 Treas­
ury 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 pub­
lic announcement will be made by the Secretary of the Treasury^
of the amount and price range of accepted bids. Those submitting
tenders will be advised of the acceptance or rejection thereof.
34-54

(over)

.

2

-

The Secretary of the Treasury expressly reserves the right to ac­
cept or reject any or all tenders, fn whole or in part,"and his
action in any such respect shall, be final, Payment of accented
tenders at the prices-offered must he made -or completed at the
lederai Reserve Bank in cash or other immediately available funds
on Dec ember 16, 1942.
:
The income derived from Treasury bills, whether interest or
gain from the sale or other disposition of the bills, shall pot
have any exemption, as' such, and loss from the Sale or other dis­
position of Treasury bills shall not have a,ny special treatment,
as such,- under Federal tax Acts now or hereafter enacted. The"’*
bills shall be subject to estate, inheritance, gift, or other ex­
cise taxes," whether Federal or State, but shall be exempt from k11
taxation now or hereafter imposed on the principal or interest
thereof by any State, or any of the possessions of thè United Sthtes :
or by any local taxing authority. For purposes of taxation the. .
amount -of dis count.at which Treasury: Dills are originally-sold by
the United States shall be considered to be interest. Under Sec­
tions 42 and 117 (a) (1) of the Internal Revenue Code,’as amended
by Section 116 of the Revenue Act of 1941,. tne amount of discount
at winch bills issued hereunder -are sold, shall not be considered,
to accrue until such bilxs shall be sold, redeemed or otherwise
disposed of, and sucn bills are excluded from consideration as
capital assets. Accordingly, the owner of Treasury bills, (other
than^life insurance companies.) issued hereunder 'need include in
his„income^ tax return only-the difference between the price paid
for such bills, whether •on -'original issue or on subsequent'pur­
chase, and the amount actually received, either upon sale or're­
demption at maturity during the taxable year for" which the return
is made, as ordinary gain or loss.
Treasury •Department Circular No-; 418,- as amended, and this
notice, prescrioe the terms of th e ‘Treasury bills and govern the
conditions of their tissue. Copies of the circular may be obtained
from anylFederal.Rese?>ve Bank or Branch.
-oOo-

DIVIDEND PAYMENTS TO CREDITORS OF INSOLVENT NATIONAL
BANKS AUTHORIZED DURING THE MONTH ENDED

3

NOVEMBER 30. 19A2

?f
v

—

7/

T o ta l
P ercentage
A uthorized
D ividends
to Date

Date
A uthorized

Number and
P ercentage
o f D ividend
A uthorized

Final

1 Ì-27-42

3rd

3.9 8 $

#242,800

‘'48.98$

"10,138

JTÄ
#6,100,950

The Harriman NB & Tr Co of
The City of New York,N.Y.

Final

11-27-42

5th

3.0 4 $

504,120

83.29$

10,142

16,583,160

The Nat*l Bk of Ridgerood
in New York, N.Y^

Final

11-30-42

1st

17.58*

52,100

17.58*

First Nat*l Bank in
Salem, Oregon

Final
Interest

11-24-42

2*66*

21,590

107.66$

The First Nat*l Bk of
Clarion, Penna*

Final

11-18-42

4th

44,600

87.2$

3,197

1 ,417,400

Fanners NB & Tr Co
Reading, Poma#

Final

11-9-42

6th

4. 35$

246,600

76.35$

13,000

5,668,500

First NB & Tr Co »of
Petersburg, Virginia

Final

11-20-42

5th

7 .1 8 *

168,600

97.18*

8,480

2,347,700

The National Bank of
Fairmont, W. Va*

Final

11-25-42

6th

8*1*

231,430

73. 1$

8,150

2,857,200

The First Nat*l Bank of
Dodgevilie, Wisconsin

Regular

11-7-42

2nd

12.$

104,800

6 7 .$

483

874,000

Name and L o catio n o f Bank
The Nat»l City Bk of
New Rochelle, N.Y.

Nature o f
D ividend

D is tr ib u tio n
o f Funds by
D ividend
A uthorized

%.

10.2$

I

Number o f
C laim ants

2

4,347

1 A m ount
Claims
Proved

296,600
811,930

TREASURY DEPARTMENT
Comptroller of the Currency
Washington

PressService

FOR RÉLEASE, MORNING NEWSPAPERS

3

S6

During the month ended November 30, 19-42, authorizations
were issued to receivers for payments of dividends to the creditors
of nine insolvent national banks.
total distributions of $1 ,7

1 6

Dividends so authorized will effect

,6 4 - 0 to 57,939 claimants who have proved

claims aggregating $36,957,44-0 or an average payment of 4*64 percent.
The minimum and maximum percentages of dividends authorized were 2.66

^

f X JTX

. ,: -7.

.

'

X

percent and 17.58 percent, while the smallest and largest payments
involved in dividend authorizations during the month were $2
$504,120, respectively.

1 ,5 9 0

and

Of the nine dividends authorized during the

month, one was a regular payment, seven were final payments, and one
was a final interest payment.

Dividend payments so authorized during

the month ended November 30, 1942, were as follows:

TREASURY DEPARTMENT
Comptroller of the Currency
Washington
POR REDEASE, MORNING NEWSPAPERS,
Saturday, December 12, 1942.
12/11/42

Press Service
No, 34-55

During the month ended November 30, 1942, authorisations
were issued to receivers for payments of dividends to the
creditors of nine insolvent national banks.

Dividends so

authorized will effect total distributions of $1,716,640 to

57»939 claimants who have proved claims aggregating $36,957,440
or an average payment of 4,64 percent.

The minimum and max­

imum percentages of dividends authorized were 2.66 percent
and 17*58 percent, while the smallest and largest payments
involved in dividend authorizations during the month were
$21,590 and $504,120, respectively.

Of the nine dividends

authorized during the month, one was a regular payment, seven
were final payments, and one was a final interest payment,
Dividend payments so authorized during the month ended
November 30, 1942, were as follows:

DIVIDEND PAYMENTS TO CREDITORS OF INSOLVENT NATIONAL
BANKS AUTHORISED DURING THF MONTH ENDED
_________ NOVEMBER' 50, 1942______________________

Name and Location of Bank

Nature of
Dividend

Date
Authorized

Number and
Percentage
of Dividend
Authorized

The Nat’1 City Bk of
New Rochelle, N.Y.

Final

11-27-42

3rd

3.98$

Ì242,800

The Harriman MB &■ Tr Co of
The City of New York, N. Y.

Final

11-27-42

5th

3.04$

The Nat’l Bk of Ridgewood
in New York, N.Y.

Final

11-30-42

1

st

First Nat‘1 Bank in
Salem, Oregon

Final
interest

11-24-42

The First Nat’l Bk of
Clarion, Penna.

Final

11—18—42

4th

Farmers NB & Tr Co
Reading, Penna.

Final

11—9—42

6

First NB & Tr Co. of
Petersburg, Virginia

Final

The National Bank of
Fairmont, ?r. Va.
The First Nat'l Bank of
Dodgeville, Wisconsin

Distribution"
of Funds by
Dividend
Authorized

Total
Percentage
Authorized
Dividends
to Date

Number of
Claimants

Amount
Claims
Proved

48.98$

10,138

16,100,950

504,120

83.29$

10,142

16,583,160

17.58$

52,100

17.58$

2

296,600

.6 6 $

21,590

107.66$

4,347

811,930

3,197

1,417,400

2

.2 $

144,600

87.2$

th

4.35$

246,600

76.35$

13,000

5,668,500

11-20-42

5th

7.18$

168,600

97.18$

8,480

2,347,700

Final

11—25-42

6

th

8

.1 $

231,430

73.1$

8,150

2,857,200

Regular

11-7-42

2

nd

1 2

,$

104,300

67.$

483

874,000

1 0

-

TREASURY DEPARTMENT
Washington

hlH

M
'bin

FOR IMMEDIATE RELEASE,
Friday, December II, 1942.

Press Service
34-56

Secretary of the Treasury Morgenthau today announced the final

Ia m

subscription and allotment figures with respect to subscriptions

utlmjnii

from commercial banks for their own account for the current offering of 1-3/4 percent Treasury Bonds of 1948.

nlMi

Subscriptions and allotments were divided among the several
Federal Reserve Districts as follows!

toSi

Federal Reserve
District

Total Subscriptions Received

Total Subscrip­
tions Allotted

Boston
New York
Philadelphia
Cleveland
Richmond
Atlanta
Chicago
St, Louis
Minneapolis
Kansas City
Dallas
San Francisco

$

I

im

HI
11
ml
Will
y
mi
M
i)lii
nf
i
l
m
«il
1

A
lii

m

g
g
j

P
JU
p

TOTAL

1 03, 976,000
760,328,500
117,623,500
162,613,000
106,343,000
103,865,500
409,033,500
93,616,000
80,737,000
104,289,000
87,708,000
230,067,000
$2,360 ,20 0,00 0

-0 O0

90,756,000
651.231.500

.

104 200.500
143.756.500
94.396.000
91,943,500
357.017.500
84 .202.000

.

73 052.000

92.441.000
77.601.000
197,539,000
$2,058,136,500

TREASURY DEPARTMENT
Washington
(The following address by Randolph E. Paul, General Counsel of the
Treasury, before the Cornell University Law School, Ithaca, New York, is
scheduled for delivery at A P.M., Eastern War Time, Friday, December 11,
1942, and is for release at that time.)
Federal Taxation in Total liar
I wish I could tell you adequately how pleased and honored I feel at
being asked to come to Ithaca to give this lecture. My sense of honor and
pleasure has many facets. There is first a personal consideration. It is
pleasant to come to the Law School whose «Quarterly11 in 1933 saw fit to
publish my first Law Review article* That article was the start of a long
hard journey which has not yet ended. But I still feel glad - first, that
I published the article, and second, that it was published in the Cornell
Law Quarterly,
Secondly, the list of my predecessors is a special mark of honor, It
almost frightened me into refusal* But a letter from Mr. Edelstein per­
suaded me to adhere to my too frequent practice of trying to do more than
I should, especially at a time when Washington demands upon time and energy
are so unpredictable and so endless.
Before I get into my subject I want to tell you another reason why
X was pleased to receive your invitation. For nearly a year I have been
engaged on what I have discovered to be the most unpopular job in the world.
I have been privately and publicly advocating the imposition of higher taxes
upon the American people — higher than they have ever been askod to pay in
their entire history. The experience has taught mo the truth of a New
Testament adage: «WTiere your treasure is, there will your heart be also.«i/
The heart, more than the head, I have sometimes thought. At any rate, you
were kind to invite into your midst “Public Enemy Number l,u who will never
forget the remark of Edmund Burke: «To tax and to please, no more than to
love and be wise, is not given to any man*«
I would compliment you on your capacity for punishment if I did not in­
terpret your invitation in a different way. My compliment will have another
flavor. I am going to assume a high degree of interest on your part in the
most challenging fiscal problem the world has ever known. I am going to
assume that you want to hear the facts underlying this problem, however grim
and unpleasant they may be* Some there are who want to play the ostrich,
but you are not of that pale cast of thought. At least, so I have decided.
I will, therefore, tell you the blunt truth as I see it — candidly, vdthout
equivocation, without any attempt to pull my punches. I will call a spade
a spade in spite of Oscar Wilde's epigram that those who call a spade a spade
should be given a spade. I think you can take what I 'wish to say, and I
would not like to think that you wanted anything less direct*
TTsi7 Matthew, Ch. 6, v* 21.

-

2

-

The Growth of Expenditures and National Income

If some of you are bored -with life, I suggest that you go back to the
economic literature of the 30*s. You will find that the financial world was
in a state bordering upon nervous collapse about annual expenditures of from
$4 billion to §9 billion by the Federal Government. People talked with grim
apprehension about the mounting debt occasioned by such constructive expendi­
tures as those for public works. Some of them violently protested against
expenditures to provide food and housing for the needy. All these dreaded
expenditures lifted the public debt from §17 billion in 1929 to §40 billion
in 1939.
I hope I may not be understood as being cavalier about our debt problem
if I say that all the worry and fear of those days was in a relative sense
little more than-a tempest in a teapot. Following Pearl Harbor the President
on January 5, 1942, sent to Congress a budget message for the fiscal year
1943, proposing $56 billion of war expenditures and recommending additional
tax revenues of §7 billion. Original goals became obsolete before they
could be reached. On April 24, 1942, a budget revision added §14 billion
to these war expenditures. Again on October 3, 1942, the second revision
added another §8 billion, making a total estimated war expenditure for the
fiscal £)eriod of §78 billion. These figures, and expenditures that will
have to be made in fiscal years to come, may well provoke grave concern.
Taking into account non-war governmental outlays, total expenditure for the
fiscal year 1943 will be §85 billion, or more than §600 for every man,
woman, and child in the land. To be compared with this figure is the modest
sum of §33 billion spent during the three years, 1917 to 1919, of World War I.
The Inflationary Gap

Those of you who enjoy contrasts may not object to some further figures.
Not long ago we were coaxing dollars out of their stagnant hiding places and
into the market. We were trying to stimulate trade and industry. Our
economic objective was critically described by some as being to spend our­
selves into prosperity,
be-managed in those far-away days of the recent past to increase our
national income from a low in 1932 of about §40 billion to the much higher
figure of §71 billion in 1939. But, to borrow from Mr. Churchill, this
was »not even the beginning of the end,» But it is perhaps the »end of
the beginning.» Next year our national income will amount to about §125
billion. Notwithstanding greatly increased war taxes, those who receive
that income will have left about §110 billion, some §42 billion in excess
of what they had after taxes in 1939« We have spent ourselves into
financial prosperity.
Does this mean that we have solved our economic problem? Not at all*
have merely changed our problem. Our people will have in 1943 a total
purchasing power of §110 billion, an increase of §36 billion over the year j

We

~ 3 ~

I9 U0 when they had only $ 7 1 + billion to spend. But at the best only $70 billion
worth of goods and services at present prices will be available to consumers
in 19^3* The difference between $110 billion and $70 billion, $1+0 billion, is
the new problem. It is an excess we must absorb by more saving and by more
taxes. If neople save $25 billion of that $1+0 billion, there will still be left
$15 billion of spending power in excess of goods and services available. If this
$15 billion is poured into the market by consumers, nothing can save Mr. Hen&ersonfe
price ceilings. Nothing can save <3ur whole economic structure* as we know it
today.

The Transition to a War Economy
From a pre-war goal of increasing spending, we have come to a war goal of
reducing spending* The story of this change in objectives is a story that cannot
be too simply told. When conversion to war began, we had at our command a sub­
stantial reserve of unemployed natural and human resources. Although many of
the depression unemployed had found work by 1 9 *+0 , there still remained in I9 U0
a welcome supply of untapped manpower. We had what seemed to be an abundance of
raw materials. Formerly partly or wholly-idle factories were available for the
expansion of production. By using these idle materials and facilities, by adding
new capacity, by using men who had been idle, and by training new workers, we
were able for about a year and a half to increase our output of armaments and at
the same time to continue to increase our supply of civilian goods. As consumers,
we had simultaneously more money and more goods. Both our money income and our
real income were higher then they had ever been before.
In this early stage the real cost of producing the implements of war — the
extra work, the additional pressure, and the sacrifice of things we might have
had — often seemed remote and unreal. The previously unemployed person regarded
his new job, even though it required hard work, as a blessing rather than a
burden. His higher income enabled him to buy more goods and services. Because
civilian output was expanded, no one else had to receive less goods and services
when the newly-employed person received more income. There was relative plenty
for everybody.
As our war output expanded, it was no longer possible to depend entirely upon
the employment of equipment and labor that had formerly been idle. We were
obliged to turn to other sources. We had to develop new supplies of labor, on the
one hand drawing upon the women of our country and, on the other hand, training
much of the existing labor force in higher skills. We had to curtail drastically
private construction and the production of capital goods. Instead of maintaining,
replacing, and adding to our existing equipment in the normal way, we itrere
producing the implements of war. The rapidly expanding armaments program also
made inroads on another supplemental source of war production — ■ our stocks of
[basic raw materials. Once our accumulated stockpiles of rubber, strategic metals,
and scrap materials are depleted, they can be replaced only with great difficulty,
if at all.

-

k

~

Until recently these three sources — unemployed facilities, deferred
maintenance and construction, and stockpiles — have been sufficient to provide
the major part of our war output. We have drawn heavily on only one segment of
consumer goods output «*** automobiles, refrigerators, stoves, and other durable
* goods. Until recently we have maintained the supplies of consumer non-durable
1 goods and services at levels above any that have ever been reached in this
I country.
These happy days are almost history. The demands of total war play no
I favorites with sources of increased output. To meet increasing demands, equipment
I and labor must be shifted from the production of the comforts, and even some of
the things we have come to regard as the necessities of life, to the production
[ of the implements of war. To produce more tanks, planes, and guns, and to feed
our armies and our allies, We shall have to accept not only fewer automobiles,
tut also less heat, less clothing, and even less food. Furthermore, while we
continue the principal business of winning the war, our houses, streets, trans­
portation facilities, and, in considerable measure, our factories and equipment
t devoted to the production of consumer goods, will have to serve in substantially
j their present condition*

f

Had we planned this war, our timing of war production could have been better.
If, for example, the United States had embarked on rearmament at the depth of
j the industrial depression, when a lafge part of our human and material resources
were idle, the nation could have produced war materials without displacing
i| existing civilian production. At that time our standard of living was subtf stantially lower than in 1 9 ^0 , which marked the beginning of our defense program.
; It was under such circumstances that Germany began to rearm* She was thus
jk enabled to utilize for war purposes substantially all of the increased output
Fresulting from increased employment of men and machines. We cannot devote a
; comparable proportion of our resources to war without returning to depression
! levels of consumption, and without retaining at the same time prosperity levels
of income and production. On a physical level we can, however, more easily
i curtail current civilian production because of the consumer capital we have
accumulated during the years of relatively high output of consumer goods.
The hard economic fact of a dwindling output of consumer goods and services
I can be hidden for a time by bulging inventories. For a time stores have been
| able to continue to supply goods from ample stocks. But the protective covering
of inventories is wearing thin in dozens of places. Bare spots in store shelves
I! are becoming commonplace. The Christmas rush will further deplete stocks of
[available goods. The scarcity of nylon stockings and of rubber products has made
I the headlines; but they are only a symbol of what has already occurred, and only
i a foretaste of what is to come. Sach scarcity that develops diverts purchasing
|power into other channels, creating additional scarcities and making the real
Icost of war more and more evident.

The Real Cost of the War
i'- How we are getting away from conventional monetary symbols into a more
j realistic appraisal of the economic cost of the war. The budget figures I
idh&ve given you can mean very little to most of us. But what I now have to say
jJlcan mean a great deal, because it is definite and concrete. More of us will
►

- 5 have to work more next year than this year, We shall have to work more hours
than today, and more intensively. There will he a smaller supply of consumers’
goods and services to reward us for our gfeater exertions* These are hard
physical facts. They cannot he obscured by any terminology. Neither taxes,
nor any economic measures at our command, can change the picture. Civilian goods
will not grow where war goods are planted* Harder work on the one hand, and a
jl lower supply of goods and services on the other hand, constitute the price
civilians must pay to win the war. They are the inescapable economic cost of
the war.

This cost must be met now while we hire fighting* It cannot be shifted to
I foreign countries. We will not, like the Axis, obtain resources by looting
f conquered territory# We cannot^ bebatese of the limitations of the industrial
capacity of the neutrals and bur Allies, obtain substantial resources by
borrowing goods from abroad*
Likewise, the real cost of the war cannot be shifted to the future.
Borrowing dollars at home in no sense postpones the real cost of the war to
the future. By mo financial manipulation can we reach our hands into the
future, and bring back to the present guns and planes with which to fight this
war. No financial legerdemain can transfer civilian goods and services from
the future to the present. Future generations cannot arm our fighting forcés#
We of the present have no choice between paying for the war now and postponing
the economic cost to the future# As sensible citizens we should turn, then,
from what is impossible to what is only difficult* Although we cannot evade or
I) postpone the economic cost of the war, we can, if we will, distribute that cost
f fairly# But we' shall not find that an easy job.

I

The Effects of Inflation
The physical realities of hard work and short supplies have a monetary
counterpart* Our increasingly intensive mobilization of resources means large
and increasing incomes to workers and to investors# Our short supply of consumer
goods means that there is relatively little for these incomes to buy. Thus, we
have the paradox of largeincomes and short supplies. Increased income has no
place to go. It is burning holes in millions of pockets. This is the explosive
factor in our economy.

As I have said, we have an inflationary gap of $15 billion. Shall we permit
this purchasing power to flow freely to the market for consumer goods and
j! services? If we do, we may be sure of a wild competition for our short supply,
i .Black markets will mushroom. Evasion and dealer favoritism will become common­
place* Empty shelves and illegitimate profits will become the order of the
day. The distribution of the short supply of the necessities of life will be
wasteful and inequitable* Competition to buy these necessities will be reduced
to a disorderly, time-consuming scramble. The goods and services will go not
I to those who need them most, but to those who are least bound by limitations of

II

time, money and scruples.

The devil will take the hindmost.

The ensuing

> hardships will be suffered particularly by families in the low income groups.

This is one method of distributing limited supplies. It is the method of
| inflation. It is a method we used in the last war, and a method other countries
I have used to an even greater degree. We have made some use of the method during

,

€ #

the past two years* though by default rather than design* Prices of consumer
goods* as measured by the Bureau of hahor Statistics Cost of hiving Index Humber,
have risen 19 percent during the past two years* This is only the handwriting
on the wall*
It would he carrying coals to Newcastle to discuss at any length the
meaning of that handwriting o n the wall* Inflation is the most unsatisfactory
method of distributing short supplies we could select* It is a method intelligent
men would never explicitly choose* It imposes the heaviest burden on those who
can least afford sacrifice apd the l a t e s t burden on those who can best afford
sacrifice* Rising prices hit persons with fixed incomes much harder than persons
with rising incomes* They affect persons with low incomes, who must ordinarily
spend all of their income for goods and services* more heavily than persons with
high incomes, who can maintain their standards of living despite rising prices*
Inflation also disorganizes the economic process* Business is conducted in
terms of prices that are expected to remain fairly stable* Rapid price increase
shifts the emphasis from production as a source of profit td speculation and
hoarding as a source of profit* The struggle of labor to keep wages in line with
ever-rising prices adds to the confusion* if inflation takes precedence over
production as the main concern Of business and labor, the war effort will surely
suffer*
finally. inflation multiplies the monetary costs of the war and makes the
post-war adjustment more difficult, if not impossible. If a given supply of war
goods rises in price, we will be obliged either to raise taxes or to float more
debt* The wake of inflation will be a disjointed price system, which will
promote a policy to wwateh and wait* until prices are again in line* Once they
are in line — that is, when they have descended from inflationary heights **
debts incurred at the high levels will be immeasurably harder to pay* The great
farm debt was one of the most disastrous economic legacies of the inflation we
suffered in the last war*
Blrect Inflation Control
We have taken two steps to control inflation. Congress made a direct attack
on the nroWLem in the first Price Control Act under which the Office of Priee
Administration established price ceilings, Congress made another frontal attack
by its passage of the Second Priee Control Aot, following which the President
created the Office of Economic Stabilization*
But the battle against inflation will act be won without the enactment of
more fundamental measures than any we have yet adopted* It will not be won
without heavy reliance upon fiscal weapons* Price ceilings and wage controls
by themselves will check, but they will n$t halt, the upward course in
They will be successful only if they are reinforced by fiscal measures designed
to restrict civilian spending and to relieve the pressure on^prices of un«r m
restricted consumer purchasing. Such measures are an essential part of a com­
prehensive anti^inflation program* We must somehow accomplish an absorption by
additional saving and taxes of $15 billion of excess spending power*

I

-w

*

To be effective, fiscal measures must be weighed in net, as distinguished
■; from gross, terms* The goal for 19^3 Is
prevent $H0 billion of excess
^purchasing power from reaching the market for consumer goods and services*
*It will not do merely to shift saving now being made from a voluntary to an
enforced status* Nor will compulsory lending out of accumulated saving
I contribute to the solution of the inflation problem* The net effect of such
|measures would be zero* Our task in 19^3 will be to add to net individual
|savings and existing taxes*

The Criteria of a Sound Tax Policy
A sound tax policy must ride several horses at the same time* It must
;look to the expansion of war production; it must be adapted to post-war needs;
Iits measures must be reasonably capable of administration* These things go
|almost without saying, and I wish to dwell today on less obvious criteria of a
sound tax policy*
I have tried to describe to you in simple concrete terms the inescapable economic
cost of the war*
The primary function of the tax system at a time like the
[present is to distribute that cost fairly and equitably.
The test of a good
[tax measure is how it distributes that burden. In the next few weeks you will
jread of many tax proposals* I would like to urge upon you that you test each
/proposal made in
the light of one basic group of facts* They are unpleasant
|facts* They areeasily forgotten facts.
But they must be remembered, or we
jlshall lose our way to a sound tax nolicy*
Millions of our people are lixriag today at a level that is barely adequate
to keep them working efficiently in the factories end in the fields* Hecent
1 increases in income have been much advertised, and it has been seriously sug­
gested that a special tax be put upon them* Yet the fact remains that these .
Increases in income have represented to many families merely the possibility
ijj&f changing a diet sufficient for a sedentary life of partial or full employment
|ijto a diet capable of sustaining a vigorous day at a swiftly moving machine. .
[jl'or other families increases in income have represented nothing more than the
liaaintonance of a previous meagre living which can now be maintained only at a
¡higher price, for still other families increases in income have represented
ienly a partial correction of many years lack of medical and dental care,
^inadequate clothing, and deficient shelter*
l

I do not want you to think that I am discussing problems of social welfare*
P would make no apologies for discussing such problems, but in these days we
[peed not place our emphasis upon social considerations* The problem of dis! tributing the co3t of a total war becomes in war a matter of military
|.importance* The exemption of a minimum level of income from taxation, and
5|s limitation of the war burden on those workers whose standard of living
Iis barely adequate for productive efficiency, are the social cost of providing
vigorous workers in our steel mills, in our coal pits, and on our farms*

*

g «

So much for the broad considerations of policy that must enter into our
war tax program. We must discard old notions that taxation is for revenue
only. We must use taxation as an instrument of inflation control. We must
recognize its function of distributing the economic burden of the war in a
fair and equitable manner. In the light of these basic principles we may
turn to the immediate legislative situation, and to the proposals commonly,
and sometimes strenuously, offered as solutions. W© may even imagine the
possible features of a Revenue Act of 19^3* It would be a strange legisla­
tive year which failed to produce a revenue act. The 19*+2 Act was our
twenty-first modern revenue act. I see no reason to abandon Karl Llewellyn*s
doctrine.^/ "For too much law, more law iri.ll be the cure,”

|:
I

I
|

The Income Tax
We may perhaps best begin this phase of our discussion with the income
tax. That is a tax to which we are accustomed. It has been a principal
source of revenue for many years. To what extent may we rely upon that tax
for the future under a war economy? To what extent shall we be obliged to
resort to other methods of taxation?
I am not going to try to answer the question whether our income tax
will be increased for the year 19^3* That is a matter for Congress to
^ determine. All that I can do is to indicate some facts that may not be
|- fully realized. For this purpose we may first pass judgment on the Revenue
Act of 19U2. That Act may not have raised sufficient revenue; it may be an
» inadequate answer to the inflation threat; to use a metaphor of a pre­
decessor Irvine lecturer, it may be no more than an inn that shelters for
the night, and not the journey*s end. But much may be said in favor of
the Act. It is certainly safe to say that it contains more relief pro­
visions than any other revenue act in our history. More than half of its
total 208 pages, or 120 pages, are devoted to the relief of inequities.
Many loopholes were closed which for years have offered opportunities for
evasion.^/ The Act devotes 1+2 pages to the clarification and definition
of existing provisions to enable more equitable and fair enforcement. This
makes a total of 10U corrective sections out of a total of 1 7 3 * la pages,
this is nearly JS percent of the Act, 162 pages out of 208. In this sense,
I if not in a fiscal sense, the bill will perform an outstanding service* We
1 had reached the point in our rate structure where loopholes resulted in
drastic loss of revenue, and where inequities and discrepancies threatened
R to be not only troublesome, but even disastrous to taxpayers. The tax
structure had to be put in shape to carry an increased load. A part of

r

I 2/ Llewellyn, The Bramble Bush, p* 122 (1 9 3 0 )
1/ Outstanding among loopholes corrected are the change in the capital
gains provisions, the new treatment of pension trusts, and the disre­
gard of the community property system for estate tax purposes.

1

this job was done in the Revenue Aot of 19*+2, and we now have a basic tax
structure which will be better able to stand the strain of increased rates.
Adhering to my purpose not to prophesy, let me make some comparisons.
The Revenue Act of 19^2 levies on citizens of this country the heaviest
income tax they have ever been asked to pay. X have attached to my lecture
notes a chart showing a graph of our income taxes commencing with the 1918
Act and going through to the 19^2 Act. Curves go down from 1918 to the
delightful days of 1929, and then swing upward. The 19^+2 curve is well
above the 1918 curve.
No one would want to deny the fact that sudden and sharp increases in
income taxes will cause some hardship and much inconvenience, especially for
the fixed income group. But that is not the same thing as saying that fur­
ther use of the income tax is impracticable. X have also attached to my
lecture notes a graphic comparison of the income taxes imposed by the
United States, Canada, and Great Britain* High as our income taxes now
are, they do not reach the levels of these two members of the United Nations
group. Tor example, in the United States, a married person without de­
pendents who receives a $5,000 net income will pay in the form of income
taxes, including the Victory tax, less than one-fourth of his income. In
Canada, he would pay more than one*»fourth of his income, in Great.Britain
almost one-third. To cite another example: A single person without de­
pendents who receives a $2,500 income will pay 18 percent in the United
States; 25 percent in Canada; and 2 9 percent in Great Britain* Certainly,
we can have higher income taxes if we can take what the British and the
Canadians are taking.
We must recognize, however, that the income tax can be improved to meet
the needs of the present. Our concept of income has its limitations. Certain
types of incomes, such as home-produced commodities, are not taxed. Some
items which are not income may be subjected to tax. The expense of getting
to and from work, and of moving to take a new job, are illustrations. Some
defects of the income tax, such as the exemption of state and local securi­
ties, could be remedied by legislation, though the Treasury Department has
encountered much resistance to any such legislation. Other defects, such
as the failure of the tax to reach the rental value of an owner-occupied
home, are exceedingly difficult to remedy* Differences in the costs of
living, problems of capital gains and losses, and the specification of
deductions, create still more difficulties. Other limitations stem from
faulty definitions of the taxpayer unit. There are here further defects
than can be reached by the Treasury joint return proposal. Every increase
in rates adds to the gravity of these imperfections of the income tax.

Income taxation adequate to siphon off sufficient purchasing power to
remove the danger of inflation will require the extension of high tax rates
to lower incomes, as well as sharp increases in rates on higher incomes.
Without safeguards this may have an adverse effect on the incentives to
make the exertion required for an all-out war effort. Labor may be

-

10

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reluctant to work overtime, and married women may be hesitant to accept war
jobs if too large a part of the additional income is taken by the income
tax.
When tax rates were at peacetime levels many individuals assumed long­
term obligations which they are unable to readjust on reasonable terms.
They have obligated themselves to devote large parts of their income to
the repayment of debt, to the payment of life insurance premiums, to
mortgage payments, and to other savings programs. Although the war will
inevitably impose personal hardships, avoidable burdens need not be imposed.
Hecent increases in tax rates have been so sudden that many taxpayers have
not been able to rearrange their financial affairs. In making further in­
creases of sufficient magnitude to meet present and prospective needs we
should make certain that they are not unnecessarily harsh in their impact
on large numbers of taxpayers.
We can place much greater reliance on the income tax than we have thus
far* In doing so, however, we will do well to make those refinements in
the structure of the tax which were desirable even in the past but have be­
come indispensable in the present.
The Individual Sxcess Profits Tax
One modification suggested in the form of the income tax is a special
tax on increases in individual income. Such a supplement to the income tax
has a special appeal in time of war, because many individuals do enjoy in­
creases of income as a direct result of the war, and also because individual
proprietorships and partnerships are exempt from the'excess profits tax,
although their profits are sometimes substantial.
But when we look more deeply into the matter, we quickly find that a
tax on increases in individual Income would have serious shortcomings, A
largé part of the recent increase in national income represents higher
wages earned by those in the lower income groups* In many cases these
higher wages result from steadier employment, more hours of work, extra
pay for overtime, and bonuses for extra output. The combination of a
special tax on increases in individual income and increases in the regular
income tax, at a time when many workers are called upon to pay income taxes
for the first time, might seriously deter many individuals from asserting
the maximum war effort.
Furthermore, a special tax on the excess of current income over income
in a specified base period would discriminate against certain groups of tax­
payers. The most conspicuous case, perhaps, is the one whose income was
abnormally low in the base period, or who was unemployed and was entirely
without income in the base period. I am not anxious to be the person who
has to explain why one of two individuals both'receiving $2,000, income. *
has to pay more tax than the other. I would probably get the reply that

11

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the individual who had no income in the ba6e period has less current taxpaying ability than the person who earned $2,000 continuously over the past
few years* Presumably, the individual with a steady income, who has been
able to maintain his person and property in good repair, is at least as well
able to bear the war burden as the worker who is employed for the first time
in years.
A tax on increases in the incomes of individuals would be especially
burdensome in the case of a member of the family who becomes a wage earner
to compensate for the loss of earnings of another member of the family who
has become unemployable, or who has been called for military service*
Where a son or husband has entered the armed services, the family income is
likely to be reduced, even though the wife or another member of the family
receives a larger income now than in the base period. In all probability,
under a special tax on increases in income, inequity to this kind of case
could not be avoided; and from present indications there will be millions of
such cases*
A super-tax of this type would impinge also on normal increases in income
not in any way connected with war profits. The modest increase in the salary
of a postman, fireman, or a college professor, in accordance with an established
promotion schedule is an example, The tax would bear with particular weight on
thos e who are at present estabL ishing themselves professionally. An engineer
who, after years of study and training, finally secures a post illustrates
this type of case* The craftsman who, as a result of the war, is for the
first time afforded an opportunity at work of greater responsibility and skill
within his competence, is another illustration*
The administrative problems involved in ascertaining what individuals
were liable to this tax, and in determining the amount of their tax liability,
would be extremely complex. For the great body of taxpayers, no means would
be available for checking the income of the base period. Income tax records
would be available for only a relatively small number, because until recently
high exemptions excluded most of the public from the requirement of reporting.
In addition, many persons having no intention of evading taxes simply do not
have accurate information about their income in past years*
A tax of this type would probably have to contain extensive relief
provisions to safeguard individuals with abnormalities in base period income,
or with extraordinary income in the current year, particularly where income
is derived from small proprietorships and partnerships* We have had enough
experience with analogous problems in the corporate field to know well its
administrative difficulties*
These considerations, together with the fact that any practicable scheme
would yield little revenue and would contribute even less to the control of
inflation, make this modification of the income tax highly questionable*

-

12

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)
The Sales Tax
I probably do not need to tell you the Treasury attitude toward the sales
tax. We have been roundly criticized for our opposition to that tax. J make no
t apology for opposing it. I would like to give you today some of the reasons
| why X have done so.
My first objection to the sales tax goes to the point of equity. I can
imagine no more unfair way of distributing the economic cost of the war.

The Secretary of the Treasury phrased this objection in crisp words in his
l statement to the Ways and Means Committee on March 3* 19^2; "The general sales
5 tax falls on scarce and plentiful commodities alike. It strikes at necessaries
and luxuries alike. As compared with the taxes proposed in this program, it
bears disproportionately on the low income groups whose incomes are almost
wholly spent on consumer goods. It is, therefore, regressive and encroaches
harmfully upon the standard of living."
To the Secretary*s statement I would like to add some details. If we
imposed a general retail sales tax on consumer purchases large enough to
equal 10 percent of the income of a person with consumer income under $500,
the tax would amount to only 6 percent of an income between $2,000 and $ 2 ,5 0 0 ,
and 3 percent of an income above $10,000. It would have an effect similar to
imposing an income tax without exemption at the rate of 10 percent on an income
of $500, at 6 percent on an income of $2,500, and at 3 percent on an income
i above $10,000. The idea is fantastic when we consider imposing such rates
under the income tax. But when we consider the imposition of a sales tax, we
should keep in mind that that is the way the tax would distribute the burden
i of the'war.
There are at least three places in the economic chain where a sales tax
could be imposed. The tax could be imposed on manufacturers, on wholesalers,
or on all retail sales. The task of administration varies enormously according
to Which one of these taxes is adopted. The tax on manufacturers would probably
be the easiest to administer and enforce* Such a tax would be directly paid
by 157,000 manufacturing taxpayers. A tax on sales by wholesalers would not be
greatly different from the administrative point of view. It would be directly
paid by some 306,000' taxpayers. Either of these taxes could be administered
by a relatively small force.
But here is the dilemma. Either of these taxes would play havoc with our
it whole system of price control. It would do so because a tax at these early
|A stages in the production-distribution- process would be treated as an ordinary
cost of doing business* This would lead to the necessity of determining how
the tax affected the cost of each particular product, of examining every
situation to see whether the seller could, absorb the price increase, and if
not, of granting increases above the ceiling prices. Each such increase would
necessitate still further increases at subsequent stages in the productive and
^ distributive process. The difficulty of preventing the maintenance of percentage
margins might lead to increases greater than the tax imposed.- Mr. Henderson
j has every right to "shudder", as he has said he does, at the thought of how his
office would be swamped if such a tax were passed.

\

~ 13 -

The retail sales tax to some extent gets bv this Scylla only to run
into Charybdis. While it would affect price ceilings, it would not demolish
them. But its administration would be very difficult at a time like the
present. There are over two and one-half million business units selling at
retail. A tax on retail sales would require frequent tax returns from every
one of these taxpayers. It would require a huga administrative force; a large,
well-trained field staff to audit the taxpayers* books periodically is the
backbone of an efficiently administered retail sales tax. The' personnal
problem becomes almost insuperable at a time when there is such great demand
by war industries and many branches of the Government for personnel.
In addition, we have the problem of accounting and business machines, desks,
chairs, filing cases, stationery, forms, office space, and transportation
for a field staff.
I would like to plead also for some realism about the revenue that
could be expected of a sales tax. The sales tax advocates are romantics on
this subject, t will not bore you with detailed figures, but I would like to
call your attention to the fact that the war-time base for a sales ta2£ on J
tangible goods would probably be less than $50 billion; the rest of the
$70 billion total of consumers* goods and services represents services which
cannot readily be subjected to a sales tax. The minute we begin to grant
exemptions, this $50 billion base dissipates. It would be reduced to $30
billion if we exempted food. Put the matter around the other way; In order
to raise only $5 billion, a sales tax of 11 percent would be required if food
were included in the tax base, and 17 percent if we mitigated the regressive
character of the tax by exempting food.
Much of the support given the sales tax stems from the erroneous belief
that foreign countries have found the sales tax an indispensable weapon of
war taxation. Actually, most European countries, like our own States,
introduced the sales tax not in time of war, but at a time when other
revenue measures became unproductive. They adopted it in depressions when
the income tax base disappeared and in periods of hyper-inflation when income
taxes assessed one day'became meaningless the next.
In Great Britain and Canada the relative importance of sales taxes and
customs has declined as the war has progressed.

Canada makes important use of consumption taxes. But the ratio’for the
Dominion, which was 51.S percent in the fiscal year 19U2, is estimated to
decrease to 3^*6 percent in the fiscal year 19U3 , X* is significant that
Canada adopted the general sales tax long before the War, and that it has
consistently refused to increase the tax rate for purposes of war finance.
The British Purchase Tax applies high rates to a very wide range of
commodities. But it leaves numerous articles untaxed. In fact, it applies
to substantially less than 20 percent of consumer expenditures. Three
principal groups of commodities are not taxed, (1 ) absolute necessities.

including food, coal, and utility services, (2) goods already taxed, such as
gasoline, tobacco, and drinks, and (3) most industrial machinery and equipment
and materials. The expected yield in 19^2-U3 is only 80 million pounds, less
than 3 percent of national and local revenue. This represents a decline from
about U percent in 19^1-*U2#
The United States already makes considerable use of taxes on consumption.
In 19^2 the ratio of sales taxes and customs to total taxes imposed by all
levels of government was 25.2 percent in the United States, The corresponding
ratio for the United Kingdom was 30,2 percent,
and that includes the purchase
Tax,
The sales tax is too crude an instrument to do an effective job in
controlling inflation, it is not sensitive to differences in spending capacity,
Every person pays the same tax rate whether he contributes one dollar or a
million dollars to the stream of inflationary spending power. Thus, the tax
fails to discriminate between persons who can reduce their purchases substantial­
ly and persons who cannot do so. In consequence, it is impossible to impose
a sales tax at sufficiently high rates to curtail the consumption of persons
whose living standards are liberal, without at the same time levying an
intolerable burden on tens of millions of our citizens. If it is imposed
at low rates, the sales tax id.ll exercise little or no restraining influence
on the persons who are in the best position to reduce their standards df living.
It would be fatuous in planning a tax program for today to leave out
tomorrow. The tax system of the war period will be the tax system of the
post-war period except to the extent that provisions are deleted by later
Congresses. There is such a thing as legislative inertia, and there are
such things as special pressure groups that enter into the equation of
future tax policy* Of course, any tax now needed in the light of war con­
ditions should go into our structure. But where the scales are nicely
balanced, it is proper to question a proposal from the viewpoint of
whether the suggested tax would be a proper part of a permanent tax system.
The sales tax.may be questioned on this point. If we think it would not be
a sound permanent measure, we had better realistically remember that if we
adopt it now it will be in the system when the war ends. What will be the
first deletion then? Will there be a reduction of progressive income tax
schedules or an elimination of the regressive sales tax? I cannot give
the answer to this question, but I am able to foresee pressure in favor
of the diminution of the taxes that bear most heavily on those who are
most able to bear post-war taxes.
Compulsory Saving and Compulsory Lending
Two measures, which assign tomorrow a prominent place in the framing
of today1s fiscal program, are compulsory saving and compulsory lending.
These measures are like taxes in that they compel the taxpayer to do
specified things with his money. But, unlike taxes, they give him a
financial claim against the future. Tor his payment he receives a
promissory note rather than a mere tax receipt.

- 15 In discussing compulsory saving and compulsory lending, I should first
like to clear the murky atmosphere which envelopes these proposals. Current
discussion tends to use interchangeably the terms “compulsory saving,"
"compulsory lending," "minimum saving," and "forced loans." Actually,
saving and lending may be two quite different things, and putting them on
a compulsory basis by no means resolves the differences. Compulsory lending
imposes the legal obligation to lend to the Government an amount equalling
a specified fraction of income, expenditure, or other base. The amount
loaned may come from any source, so long as it equals the specified fraction
,of the chosen base. Compulsory saving, on the other hand, imposes the legal
obligation to save a specified fraction of income,
Uotice, if you please, that I did not say "an amount equalling a
specified fraction." 'Compulsory saving specifies a minimum amount which
must be saved out of income itself, and the savings requirement cannot be
met by converting other assets or by borrowing money, To clarify the
difference between the two, let me point out, finally, that an individual
can lend to the Government without saving, by drawing on accumulated assets
or by borrowing;and that he can save without lending to the Government, by
investing in assets other than Government bonds. Compulsory lending is
now in effect in a mild degree under the new Victory tax.
In sharply differentiating compulsory lending and compulsory saving,
I do not mean to ignore the things they have in common. Both of them can
be made progressive in their incidence through the provision of exemptions
and the use of graduated rates. 3oth of them can recognize fixed committ­
ments and extraordinary expenses by allowing offsets for such things as
personal taxes, rent, ujedical expenses, debt repayment, and the like.
Both of them can contribute to the control of inflation by immobilizing
consumer spending power. Finally, both of them enjoy certain advantages
over taxation in this process.
Compulsory lending and compulsory saving both preserve the incentive
to work by postponing, rather than taxing away, the rewards of labor. The
promise of future rewards inherent in either of the measures also justifies
a greater restriction of consumption among the lower income groups than
would be justified under outright taxation. And, of course, larger total
levies on all income groups become more acceptable when we are promising
to return what we take at the moment. Finally, the compulsory lending
and saving schemes create a reserve of individual purchasing power for
the post-war period.
In addition to the advantages over taxation which it enjoys in common
with compulsory lending, compulsory saving is more effective than the
lending plan in its immediate impact on consumer spending. The only way
to meet the savings requirement is to spend less} lending, however, need
not replace spending, since it may come out of accumulated savings or out
of current income that would have -been saved anyway. Compulsory saving

- 16 n *e® * * * % savfogs requirement for each individual according to his income
and family status. 3y pitching the schedule of requirements to the diff) erence between individual incomes and the value of available consumer
supplies, compulsory saving offers a comprehensive solution to the nroblem
of inflation. The form of the saving is relatively immaterial, the vital
point being the removal of the excess income from the inflationary channels
of consumer spending*
*
\ **

attractiveness in principle of compulsory saving leads us to the
final test of any tax measure, — its administrative feasibility. To en­
force the savings requirement would demand a knowledge not only of each
person s income and family status, but also of changes in his capital
position. His asset and liability status at the beginning of the year
vould have to be compared with that at the end of the year» This is not
an insuperable problem* More formidable, however, is the difficulty of
enforcing saving out of income concurrently with the receipt of that
income, We are basing obligations upon a fact before it becomes a fact,
because the savings requirement cannot be known precisely until income is
known, and income cannot be known precisely until the period is ended*

One method of enforcing the savings requirement would be to issue to
il each consumer a license to spend only a specified amount on consumer goods
* ani servicesi ih this event, compulsory saving would become expenditure
rationing* kj
|}

Social Security

A governmental program now in operation, which has fiscal implications
|
. somewhat similar to those of compulsory lending, is the social insurance
system. Social insurance is compulsory and it involves payments into a
|
*ro111 which benefits are later paid on the insurance principle to the
I insured contributors. A social insurance program should be considered and
1 #sged primarily by the effectiveness with which it furnishes the protecI
against risks that the bulk of the population face in a mo d e m indusK
nation* However, it should be observed that expansion of social
I insurance has fiscal effects similar to those of compulsory lending. During
the early years of a social insurance program, and especially during the
war period when incomes are high, the contributions tend greatly to outrun

III
I¿J Briefly, expenditure rationing is really the reciprocal of compulsory
saving. Instead of telling people what minimum amount they must save,
expenditure rationing tells them what maximum amount they may spend on
| ^ the broad assortment ff goods which is the subject of inflationary
* pressure. JPor a more complete discussion of the measure, see my
address before the American Academy of Political and Social Science,
November 30, I9U2.

)
- 17 -

|

the benefits, while in years when the economy is running at low gear and
social insurance benefit obligations are high, the out payments will exceed
the contributions. Tor the wartime period a substantial expansion of the
social insurance system involving increased contributions in the form of a
payroll tax or some other form of tax would have distinctly anti-inflationary
effects*
The Spendings Tax
The spendings tax is another method of increasing saving. This tax
has never been tried in this country* It is now urged as a supplement to
the more conventional income tax because at high rate levels that tax is
not sufficiently selective in its impact* The spendings tax was proposed
by Ogden Mills in 1921, and has been advocated for many years by
Professor Irving Fisher of Tale* These gentlemen have advocated the
spendings tax, however, as a permanent part of our revenue system* I do
not. I think of the tax as a temporary war measure designed to have a
very substantial anti-inflationary effect.
As its name indicates, the spendings tax is imposed on expenditures
for consumers* goods and services* It i* not imposed upon income received,
nor upon income devoted to the purchase of capital assets. The base of
the tax consists of the difference between income received and income
saved by being applied to debt payments, life insurance premiums, the pur­
chase of war bonds, apd the acquisition of other capital assets. Further
deductions, such as rent, medical expenses, and educational expenses, can
be allowed if desired. Of course, there is a deduction for the amount of
the regular income tax* You will note that the taxpayer is not obliged
to keep account of his individual expenditures for different items of con­
sumers * goods and services* The amount of individual spendings would be
arrived at indirectly by deducting from the total amount of available funds
sums spent for purposes other than personal consumption*

The spendings tax has two important advantages over the sales tax.
It is possible under the spendings tax to provide for whatever exemptions
and deductions are deemed necessary to protect those whose low standard of
living threatens to impair their productive efficiency* It is also adapt­
able to the use of progressive rates* Thus it differentiates among tax» payers on the basis of ability to pay and distinguishes between "luxury*
and "non-luxury* spending. When the tax applies to specific commodities,
as under the sales tax, it is necessary to classify them for purposes of
establishing their rates according to some criterion of luxury. If
commodities are enumerated, many knotty problems of definition arise,
which add greatly to the administrative problem* If price is made the
I criterion, many goods are taxed at th& higher luxury rates merely because
the goods are made to last longer* Furthermore, if general prices are
rising, some commodities become luxuries merely because their prices have
risen.

)

18 The spendings tax does not require difficult decisions as to what constitutes a luxury; the "basis for graduating the rates is the total spending
o the individual. If his spendings are high, it is presumed that they are
devoted in part to luxuries, and they are taxed accordingly. IHirthermore,
the spendings tax can make allowance for the size of family, whereas the
sales tax increases the "burden the larger the number of dependents, A
further advantage of the spendings tax over the sales tax is that it does
not tend to enter into costs of production, and hence it does not con-*
tribute to price inflation,
I cannot take the time to tell you in detail the many further advan­
tages of the spendings tax. It will not strike at those who spend only
enough to provide a minimum standard of living. It will strike only
moderately at those who live in moderate comfort. It will strike hard at
those who maintain a high level of personal expenditure, and who thereby
make unjustifiable demands upon the reduced national supply of consumers1
goods and services. The tax is a powerful instrument for facilitating a
fair distribution of the limited supply of goods and services available.
In this respect it would be an important supplement to rationing. By
placing a tax penalty on the excessive expenditures of the wealthy it
would prevent the wealthy from monopolizing the supply of goods, thus
X saving a larger share for those with more moderate means. By mopping up
a part of the restless funds seeking outlets in consumer spending, the
spendings tax would minimize the danger of major breaks in our price
ceilings through the competitive bldding-up of prices*
I might mention one further important consideration, The purpose of
the spendings tax is to discourage spending and to stimulate saving. To the
extent that revenue is produced by the tax, the Treasury benefits. To the
extent that individuals avoid the tax by not spending, the pressure of in­
flation is released. The resultant personal savings become available for
borrowing by the Government either directly from the individual or indirectly
rom financial institutions. Incidentally* the tax will therefore provide
an increased measure of individual security and a backlog of purchasing
power that will be available after the war when production can again be
directed toward civilian needs.
One final point. The spendings tax leaves the taxpayer substantial
latitude. He may decide upon the amount of his spendings. He can spend
if he is willing to pay the price in higher taxes, but he is strongly
induced to postpone this spending. The decision he makes will determine
the size of his tax. Thus, he is to a considerable extent his own tax
assessor.

)

- 19 Conclusion
I hope that none of you came here today with the expectation of getting
a neatly packaged solution of our fiscal problem. If there is any such
person in the room, I am afraid he must suffer the fate of most optimists*
There is no economic litmus to give ready answers to so endless, so complex,
and so novel a problem as taxation in total war* There is no solution to
such a problem as one finds an answer to a problem in algebra or geometry;
there seldom is to any of the real problems of life. The science of taxa­
tion is a poor, inexact science; it has many pressures and shades of con­
tradiction. Honest opinions differ widely, and we must all find our ways
as best we can through tangles of imperfectly understood situations, past
conflicts of values that cannot be wholly resolved, to answers which have to
do* Powerful economic forces produce problems which must be handled with
whatever fallible and tentative wisdom legislators can utilise* I an simply
giving you a few intensely personal opinions on debated points. I have not
meant to be dogmatic; one is entitled to be very suspicious of tax theorists
who are too sure of their answers* Dogmatists so often try to disguise
difficulties by sweeping all the chessmen off the table. Por my definition
of a competent tax policy manf you can take Holmes1 definition of a liberal;
he is *a person who does not imagine himself to be God."
The responsibility for tax legislation is in Congress, not the Treasury*
All the Treasury can do is to suggest and advise; it proposes and Congress
disposes. % must, therefore, refrain from the thankless task of prophecy*
I do not know what taxes will be enacted in 19^3; I do not know what the
scope and magnitude of the 19^3 program will be; I do not know what pro­
portionate contribution each type of solution I have discussed will make
to the aggregate 19^3 program* To attempt to answer these questions would
be to enter into a field of prophecy for which I do not feel qualified* Ho
program of fiscal legislation for 19^3 has yet been formulated, so far as I
know* It is still in what the President calls *the discussion stage*n
A ll I can say today is that X sincerely hope that the principles I have
stated here will not be forgotten when the legislative mills grind out our
twenty-first modern revenue measure*
As I look back on the
Act and forward to the 19U3 Act, I must
confess a nostalgic yearning for the old simplicities and delusive exact­
nesses many Americans once thought they enjoyed. The past of taxation has
an enchantment in direct proportion to its distance in time. In long
retrospect it has a charming quality of 19th century moderation. We had
nearly reached the end of the 19th century when prominent Hew York lawyers*
strenuously arguing before the Sar of the United States Supreme Court
against the constitutionality of a two percent income tax, could hardly
contain emotions which moved them to call the act ^communistic in its pur­
poses and tendencies* and csnfiscatory. They were able* by the narrow
margin more characteristic of later days, to inter income taxation until

)
- SO- -

thirteen
come tax
That was
act, the
of 19 to

i

|

j

|

years of the new century had passed, Sven then we enacted an inof 19 pages at the almost unbelievably low rates of 1 to 7 percent,
only thirty years before the enactment of our twentieth revenue
Revenue Act of 19^2, which, without the Victory tax, reached rates
SS percent and attained a length of 202 pages.

Those were the happy days, Whirl had not deposed Zeus, to become
King in his own right. Since then an era has passed# Change — with its
long arm, its disturbing touch, its decree of events not yet manifest
has come to all the ^folkways1* of taxation* Tax issues are now stated in
novel ways; concepts dominant have exchanged places with concepts recessive;
new relationships and shifts of base are born of every economic event»
Everything,we do is brimful of consequences* We are writing a significant
chapter in tax history,
It is pleasant to remember the old days. My mind can share the
longing of every human mind for certainty and repose* §J But I know of
no more wasteful process than wishful thinking that such a golden age
will ever return for any of us here today, Such thinking is what should
be expected of George Chappell*s birds, which flew backward rather than
forward because they likedto go where they had been rather than where
they were going* I can hardly be suggesting too much if I suggest that
we should courageously face the future, no matter how different it may
be from the past*
Who can describe that future? I shall not be bold enough to try*
It is a future without precedent* It has no clear securities, only ttpotent
imponderables*R It is a future in which often we shall have to act in the
dark, sometimes mistakenly, upon the basis of available information, how­
ever unreliable it may be. There will be no fields of black and white.
It is a future on which we shall have to wager our salvatiop constantly
upon an inarticulate and subconscious judgment. The old certainties are
gone. The only remaining certainty is that ttthere is no gospel that will
save us from the pain of choosing at every step,1*

)

s S/ Of. Hamilton and Braden, The Special Competence of the Supreme Court,
I
50 Tala L.J. 1319, 1320, (19*0.),
§J Holmes,

)

INDIVIDUAL

INCOME

TAX

UNITED STATES, UNITED KINGDOM AND CANADA
Effective Rates for M arried Person without Dependents
_PER
H— CENT

*

!®

. 20

40

60

100

200

400 600

NET INCOME IN THOUSANDS OF DOLLARS

1000

2000

4000

*Including Victory Tax
Mit» erfthe Stcrttary of th* Tr«tury
atT
n

I
I
3
’
4
2

IN D IVID U AL

IN CO M E

TAX

Effective Rates for Married Person without Dependents
1918 and Selected Taxable Years

TREASURY DEPARTMENT
Washington
(The following address by SECRETARY MDRGENTHAU at the
presentation of Treasury T flags at a dinner in the
Robert E. Lee Hotel, Winston-Salem, North Carolina,
and broadcast over the Blue Network, is scheduled for
delivery December 12, 1942, at 8:30 P.M., Eastern War
Time, and is for release at that timeTJ

I am happy^ to be speaking tonight in the home State and in
the home community of one of America’s outstanding legislators —
my old friend, the Chairman of the Ways and Means Committee of
the House of Representatives, the Honorable Robert L. Doughton.
No other committee in Congress carries a heavier burden of
responsibility, for this is the committee that originates all
tax legislation«
Bob Doughton and I have shared many labors together during
these recent eventful years* We at the Treasury are indeed
fortunate to be working in partnership with a Chairman who takes
his responsibilities so seriously in these grave days. And I
think the taxpayers of the country are equally fortunate in having
tax legislation originate under the leadership of a man like
Bob Doughton, who is so devoted to his country and to the welfare
of its people* It is his wish, and mine, that tax legislation
shall always be the product of a meeting of minds, and that it
shall always be sound and just and fair to all the taxpayers*
Mr. Doughton has spoken with understanding of the burden that
pests upon me nowadays as Secretary of the Treasury. That burden
I has been especially great in this month of December. The Treasury
| is now in the midst of borrowing nine billion dollars in a single
jmonth — a borrowing operation unequalled in the annals of this or
iany other Government. In this Victory Loan drive we are depending
Iupon the voluntary help of almost fifty thousand professional
lsalesmen drawn from the securities, banking and insurance fields.
1It is their job to find the dollars that lie idle in trie hands of
Iindividual investors, corporations and custodians of trust funds;
it is their job to see that those dollars go to work for their
country.
)34-57

I am delighted to report to the nation that by today, only
the twelfth business day of our drive, we have raised more than
six and a half billion dollars* We have come more than two thirds
of the way toward our goal. This is a magnificent response,
another proof of what a free, enlightened and democratic people
can do when their country calls upon them*
In this Victory Loan drive and in the War Savings campaign
that has brought us together tonight, you in North Carolina are
doing great things. From the mountain homes in your western
counties to your factories in Winston-Salem and your shipyards
on the coast, this State of yours is giving a fine example of the
spirit that is being shown in every State at the start of our
second year of war. I have come here tonight to pay my tribute
of appreciation^ to the workers and employers of North Carolina
for their part in the War Savings campaign. But in paying my
tribute to them I want also to pay it to the workers and employers
of the United States as a whole.
Great as our war effort this year has been, however, we are
just beginning to fight. We are just beginning to show what this
country of 130 million people can do when it puts all its heart
and mind and muscle into a single lob. This beginning of ours in
1 1942 has already produced outstanding patriotic service in many
I fields, in this community and every community.
Take, for example, the Payroll Savings program in which you
in North Carolina have made such an enviable record. Every large
factory in the State now has a Payroll Savings plan. In those
factories 99 percent of all the workers are investing in War Bonds
week in and week out, by setting aside a part of their regular pay.
In the nation as a whole there were only 700,000 workers on
the Payroll Savings plan a year ago, and they were investing only
four percent of their earnings every pay day. Today more than
) 24 million workers are setting aside an average of eight and a
I half percent of their pay, so our soldiers ana sailors and flyers
have the weapons they need. This is an achievement "over here"
|that will give encouragement to our Allies and to our fighting
I men at battle stations all over the world.
We could never have achieved this success without the
Iuntiring effort of our 300,000 volunteer workers mho have been
[the unsung heroes in this grand enterprise. Day in and day out

our labor-management committees, of which there are many thousands
in the nation today, have also contributed, not only to the speeding
j. up of production but to the success of the War Savings effort as
well.
It is my firm belief that the good-will created by the Payroll
Savings plan has been felt all along the production line, and will
be felt for years to come. I like to feel that the new relationship
between labor and management, which has been shown so magnificently
in this War Savings campaign, is helping to build the post-war
world right here and now. I like to feel that it is setting the
pattern for the post-war years -- a pattern of labor and management
working side by side for their own good and their country’s good.
Important though the Payroll Savings plan is, it represents
only one phase of our War Savings campaign. Millions of farmers,
the self-employed, and businessmen have put their savings at their
country’s disposal. All in all 50 million men and women invested
in War Bonds during the past year.
These holders of War Bonds are the people who will be buying
the products of American industry ten years from now, when the
I bonds mature. The bonds that are bought today represent new homes,
1 new comforts, new horizons for the common man. They will help to
give body and substance to the ideal of "Freedom From Want" in
thousands of American communities and in millions of American
homes.
To my mind this is a fact of real significance for the post­
war years. It means, as Mr. Doughton has said, that more than
50 million Americans now have, a direct and personal stake in the
finances of their Government. It means that their savings not
only bear fruit now, in helping to win the war, but will also
help to keep peace-time industry active and strong in the future
years. It means that habits of thrift are growing steadily
stronger among the American people, with results that will help
to finance this People’s War and the People’s Peace to come.

- 3 -

OFFICE '

JURISDICTION

SAN FPANClSCO^^ E A f ^ l B ^ ’ir.l. Head
Room 918 - 100 McAllister Street
Building,
San Francisco, California,,

First Collection District of
California, Nevada, Utah
and Hawaii

CHICAGO —
QjNDERTporter^. Head^
Fourth Floor, 2^8 sou^Eh La Salle Street,
Chicago, Illinois*

Illinois, Wisconsin, Minnesota,
North Dakota, South Dakota, Indiana

BOSTON — —
Rooms 301-4, 1 'S'TateT’Street,
Boston, Massachusetts.

Maine, New Hampshire, Vermont,
Massachusetts, Connecticut,
and Rhode Island

CLEVELAND—
C^LY^EarTT^), Head
Williamson Building, 215 Euclid Avenue,
Cleveland, Ohio*

Ohio and Kentucky

ATLANTA— *
C i m ^ ^ r C a ^ o T ^ ^ Head
Rooms 717-720, WiTlTam Oliver Building^
Atlanta, Georgia*

South Carolina, Georgia, Florida,
Alabama and Tennessee

SEATTLE---C^EJRVIC^'Robert
Room 312, Smith Tower Annex,
Seattle, Washington*

Washington, Oregon, Idaho,
Montana, Wyoming and Alaska

Head

KANSAS CITY— (m D E ^ M. L. R^¿ Head.
R. A* Long Building,
Kansas City, Missouri.

Kansas, Missouri, Iowa,
Nebraska, and Colorado

DALLAS — —
CiffiRTWIGA A. H.-J Head^
Tower Petroleum Building,
Dallas, Texas.

Mississippi, Louisiana,
Texas, New Mexico,
Arkansas, and Oklahoma.

WASHINGTON, D. C.--(1 d D 0 ^ j 77 ^ . Head
Room 2529,
—
J
Internal Revenue Building*

Maryland, Delaware, Virginia,
West Virginia, North Carolina,
District of Columbia, and
Puerto Rico

IC

on a fixed percentage of the salary of each of the
employees of any group, provided the fixed percentage
is not increased in 1942.

An increase in the amount

of any employee’s bonus due to an increase in his
salary during 1942, without any change in the percen­
tage, will not be in violation of this rule.
4.

The bonus or other additional compensation is based on
a fixed percentage of an employee’s individual sales,
provided the rate of such payment was fixed before
October 3, 1942.

All other types of bonus payments require the approval of the
Commissioner.
An employer who wishes to pay a bonus which requires the
Commissioner’s approval before making payment should file an
application on forms which may be secured from any of the Salary

t

Stabilization Regional offices listed belowj
JURISDICTION
D E T ROIT-—
Cj4UkI£&J> W u.^Head
14th Floor, Penobscot Building,
Detroit, Michigan.

Michigan

Sixth Collection District of
California, and Arizona
Los Angeles, California.
NEW YORK —
<fi^Syuhârîes
253 Broadway, Fourth Floor,
New York, New York.

National Bank Building,
Philadelphia, Pennsylvania.

a TJ

Head

New York and the Fifth Col­
lection District of New Jersey

Pennsylvania and New Jersey with
the exception of the Fifth
Collection District of
New Jersey

g*0

F

TREASURY DEPARTMENT
Bureau of Internal Revenue
Washington
FOR IMMEDIATE RELEASE
Friday, December 11, 1942

Pr* t i 4 4 f /
î v

-jT '

Commissioner of Internal Revenue Guy T. Helvering today issued
a statement for the guidance of employers who wish to pay Christmas
or year—end bonuses in 1942 to employees whose salaries are within
his jurisdiction.
The Commissioner’s jurisdiction, he explained, extends only to
salaried employees receiving more than $5,000 a year and to executive,
administrative, and professional employees receiving less than $5,000
a year and not represented by a recognized labor organization.

In

order to come within the Commissioner’s jurisdiction, an executive
employee must receive more than $30 a week, and an administrative
or professional employee must receive more than $200 a month.
The Commissioner stated that his approval of bonuses to be paid
in 1S42 to salaried employees within his jurisdiction is not required
whe re:
1.

The amount to be paid in 1942 is not greater than the
amount paid to the same employee or an employee
occupying the same position in 1941,

2.

Before October 3, 1942, the employer had entered into
an enforceable contract with the employee to pay him, in
1942, (a) a bonus of a specified amount or, (b) a bonus
calculated in a specified manner,

3.

^

It has been the settled policy of the employer over a
period of at least two years to pay bonuses calculated

<

>

TREASURY DEPARTMENT '
Bureau of Internal Revenue
Washington
o

I
{

FOR IMMEDIATE RELEASE,
Friday, December 11, 1942*

•Press Service
No, 34-*58

Commissioner of Internal Revenue Guy T. Helvering today is\

sued a statement for the guidance of employers who wish to pay
Christmas or year-end bonuses in 1942 to employees whose salaries
are within his jurisdiction.
The Commissionerfs jurisdiction, he explained, extends only
to salaried employees receiving more than $5,000 a year and to .
executive, administrative, and professional employees receiving
less than $5,000 a year and not represented by a recognized labor
organization. In order to come within the Commissioner^ juris­
diction, an executive employee must receive more than $30 a week,
and an administrative or professional employee must receive more *
than $200 a month.

i
)

The Commissioner stated that his approval of bonuses to be
paid in 1942 to salaried employees within his jurisdiction is not
required where;
1.

The amount to be paid in 1942 is not greater than the
amount paid to the same employee or an employee oc­
cupying the same position in 1941.

2.

Before October 3, 1942, the employer' had entered into
an enforceable contract with the employee to pay him,
in 1942, (a) a bonus of- a specified amount' or, (b) a
bonus calculated in a specified manner, the amount of
which was determinable on or before October 3, 1942.

3‘

It has been the settled policy of the employer over
a period of at least two years to pay bonuses cal­
culated on a fixed percentage of the salary of each
of the employees of any group, provided the fixed
percentage is net increased in 1942. An increase in

I[ . '
is
1

rtf

\

2
the amount of any employee 1t bonus due to an increase
in his salary during 1942, without .any change in the
percentage, will not be in violation of. this rule.
4.

The^bonus or other additional compensation is based on
a fixed percentage of an employee’s individual sales,
provided the rate of such payment was fixed before
Octqber 3, 1942*

All other types of bonus payments require the approval of the
Commissioner*
employer who wishes to pay a bonus which requires the
Commissioner’s approval before making payment should file an
application on forms which may be secured from any of the Salary
Stabilisation Regional offices/listed below:
OFFICE

JURISDICTION

DETROIT'-- C* D* Leiter, Head,
14th Floor, Penobscot Building,
Detroit, Michigan*

Michigan

LOS ANGELES -- Hugh Pucker, Head,
Suite 770, Subway Terminal Building
Los Angeles, California*

Sixth Collection District
of California, and Arizona

NEW YORK *- Charles'A* Drake, Head,
253 Broadway, Fourth Floor,
New York, New York, •

New York and the Fifth Col­
lection District of New
Jersey

PHILADELPHIA
Waiter D* Perry, Head, Pennsylvania and New Jersey
Suite 1313, Market Street
with the exception of the
National Bank Building,
Fifth Collection District
Philadelphia, Pennsylvania.
of New Jersey
SAN FRANCISCO -- Milo W. Bean, Head,
Room 918 - 100 McAllister Street
Building,
San Francisco, California.

First Collection District
of California, Nevada, Utah
and Hawaii

CHICAGO -- Porter Linder, Head,
Fourth Floor, 208 South La Salle
^Street,
Chicago, Illinois,

Illinois, Wisconsin, Minne­
sota, North Dakota, South.
Da kota, Indlana

OFFICE

JURISDICTION

BOSTON
.Frank L* Day lor-» Head,
Rooms 301-4, 1 State Street, \
Boston, Massachusetts.

Maine, New Hampshire, Ver­
mont, Massachusetts, Con­
necticut, and Rhode Island

CLEVELAND — Earl C, Ely, Head,
Williamson Building, 315 Euclid
Avenue,
.
Cleveland, Ohio.

Ohio and Kentucky

ATUd\TA '- Cai‘los J. Lively, Bead,
South Carolina, Georgia,
Rooms 717-72Û, William Oliver Building, Florida, Alabama and l’enAtlanta, Georgia,
nessee .
SEATTLE
Robert J, Service, Head,
Room 312» Smith Tower Annex,
Seattle, Washington.

Washington, Oregon, Idaho,
Montana, Wyoming and Alaska

KANSAS CITY - M; L . R , Wade, Head,
R. A. Long Building,
•
J Kansas City, Missouri.

Kansas, Missouri, Iowa,
Nebraska, and Colorado

DÀLL1S -- A. H. Hertwig. Head,
Tower Petroleum Building.
I -Dallas, Texas* .

Mississippi, Louisiana,
Texas, New Mexico, Arkansas,
and Oklahoma,

IWASHINGTON, D. C. -- J, F. Addor,
Head,
*
Room 2529,
Internal Revenue Building,

Maryland, Delaware, Virginia,
West Virginia, North Carolini
District of Columbia, and
Puerto Rico

Washington, D* C.

UNITED STATUS SAVINGS BONDS
(Figures through December 10, 1942)
FEDERAL RESERVE
DISTRICT

Boston

TOTAL SUBSCRIP.
TIONS RECEIVED
& ALLOTTED

$23,824,000

New Yoik

55,673,000

Philadelphia

14,457,000

Cleveland

30,756,000

Ri chmond

17,262,000

Atlanta

15,566,000

Chicago

48,449,000

St. Louis

13,833,000

Minneapolis

11,882,000

Kansas City

10,390,000

Dallas

11,828,000

San Francisco

33,866,000

Treasury
To tal

3.137.000
$290,923,000

TREASURY TAX SAVINGS NOTES
(Figures through December 10, 1942)

FEDERAL RESERVE
DISTRICT

TOTAL SUBSCRIP­
TIONS RECEIVED
& ALLOTTED

TOTAL SUBSCRIPT
TIONS ORIGINAL
ING IN DISTRICT

Boston

$17,550,000

$18,231,000

New York

71,335,000

62,308,000

Philadelphia

12,701,000

16,238,000

Cleveland

50,406,000

49,168,000

Richmond

9,287,000

11,898,000

Atlanta

5,120,000

5,322,000

Chicago

22,382,000

25,389,000

St. Louis

3,226,000

3,229,000

Minneapolis

4,855,000

4,955,000

Kansas City

4,262,000

4,262,000

Dallas

5,311,000

5,432,000

San Francisco

7,841,000

7,844,000

10.000

10.000

$214,286,000

$214,286,000

Treasury
Totals

\

7/8 PERCENT TREASURY CERTIFICATES OF INDEBTEDNESS. SERIES E-19A3
(Figures through December 10, 1942)

FEDERAL RESERVE
DISTRICT

TOTAL SUBSCRIP­
TIONS RECEIVED
& ALLOTTED

TOTAL SUBSCRIP­
TIONS ORIGINATING
IN THE DISTRICT

Boston

$ 43,441,000

$ 44 , 871,000

584.496.000

576.921.000

Philadelphia

36.257.000

37.057.000

Cleveland

26 .284.000

26.359.000

Richmond

26 ,642,000

30 112.000

Atlanta

8 ,094,000

p 8,044,000

Chicago

119 .966.000

120.641 .000

12 ,633,000

12.713.000

Minneapolis

5 ,291,000

5,316,000

Kansas City

6 ,168,000

6 ,183,000

Dallas

7 ,726,000

8 ,231,000

San Francisco

14 ,005,000

14.555.000

Treasury

-

New York

St. Louis

TOTAL

.

5,000

5,000

1891,008,000

1891,008,000

1-3/4 PERCENT TKEASURY BOHDS OF 1918
(Figures through December 10, 1942)

FEDERAL RESERVE
DISTRICT

TOTAL SUBSCRIP­
TIONS RECEIVED
& ALLOTTED

TOTAL SUBSCRIP­
TIONS ORIGINATING
IN THE DISTRICT

Boston

< 63,493,000

$116,608,000

371,668,000

313,695,000

Philadelphia

10,960,000

11,495,000

Cleveland

21,034,500

21,575,500

Richmond

23,114,500

25,234,500

Atlanta

22,280,000

21,780,000

Chicago

29,753,000

31,987,000

St« Louis

7,038,500

6,094,500

Minneapolis

4,348,500

4,368,500

Kansas City

6,782,000

6,252,000

Dallas

5,436,500

6,013,500

20,518,500

21,323,500

2.248.000

2.248.000

$588,675,000

1588,675,000

New York

San Francisco
Treasury
TOTAL

2-1/2 PERCENT TREASURY BONDS OF 1963-68
¿7/=^ i v I f Y ' S

(Figures through December 10, 194-2)

FEDERAL RESERVE
DISTRICT

TOTAL SUBSCRIP­
TIONS RECEIVED
& ALLOTTED.

TOTAL SUBSCRIP­
TIONS ORIGINATING
IN THE DISTRICT

# 192, 594,000

$

■■

Boston,

_

1 , 352, 692,000

1,299,583,000

103, 549,000

103.790.500

Cleveland

64 , 882,000

67.027.000

Richmond

48.762.000

52.509.000

Atlanta

1 2 ,132,500

13.548.000

Chicago

109.772.500

99,2 a , 000

St. Louis

14.357.500

19.404.500

Minneapolis

24.585.000

28 143.000

Kansas City

35.495.500

19.399.500

Dallas

17.395.000

20 672.500

San Francisco

41.056.500

42,314,000

238.167.500

238.167.500

$2,255,441,000

$2,255,4 U ,000

New York
Philadelphia

Treasury
TOTAL

"1

t

y ''

251,641,500

.

.

2 -

to be allotted in full, while larger applications will be
subject to percentage allotments.
The funds raised through the drive,

together with funds

to be raised through the sl^e after January 1 of Treasury
bills,

savings bonds, certificates of indebtedness and tax

savings notes may enable the Treasury to fun£4i©iiintil some
time in March or April before another major financing campaign
Secretary Morgenthau praised the diligence of the
50,000 salesmen of the Victory Fund Committe^j^HPsSaBfcfee

m

in soliciting

subscriptions to the $9,000,000,000 of new securities..
The unselfish devotion of these gs&sos is contributing
greatly to the indicated success of the drive, he said.
Subscriptions through Dec.

10 for the different

issues from all sources are:
table A)

^ubsB'riullurrS'To the new issueTTri
sources
are:

"^Wslrrlcts,

U1

baie../v;

^Secretary Morgenthau announced today that subscriptions

aturday,
S M /4 2

to Treasury securities offered in the $9,000,000,000 December
Victory Fund Drive now total $6,500,000,000.

Seen

Although succes

0freasta

in achieving the aim now is indicated, he said, there must

fetory Fu

be no relaxation of effort,

achievi
jThe December d r i v e , m i f < j a 1so announced, will
relaxat:
terminate^ and the subscription books will close, at the close
of business December 23, with respect to three issues of
securities, namely, Victory two-and-one-halfs due December
1968, callable December 15, 1963;

15,

1 - 3 A # bonds due June 15,

19^8;

7/8$ certificates of indebtedness due December 1,
§ ajj r u À K
19^3 •
d r i v e ~ w t H — c 0 ntd’Tftrg*^irniTOhout"•©ec'embery—howevef,
"
5
,
»Ki.
fle^twlth -respe ct.. .t.Q_ serie s.¿„and-

tnd,JBfiEies~E

The Treasury will accept subscriptions which are placed
in the mails up to midnight of December 23 for the three issuei
on which the drive ends that day.

The issue of 7/8# certifi­

cates of indebtedness, as previously announced, will be open
to subscription by commercial banks December 16, 17 and 18
for their own account,

in the aggregate sum of $2,000,000,000,

with applications from such banks in amounts up to $100,000

The D(
trainate,
business
irities, r
1 calla
P; and 7
43.

The sa!
t

11

*- <and
5.

I The Tn
the mails
. which th(
tes of ine
'script
air
ac
P aPplica
plotted
Percen tag

! Î!» fUn
I e raised
bond
168 ®y ea
'ch or Apr;

secreta:

pen of ì
I P Ä t(

I f devoi

TREASURY DEPARTMENT
Washington
POH ROTEAS2, MOOTING NEWSPAPERS,
Saturday, December 12, 1942
12/11/42

Press Service
No, 34-59

Secretary Morgenthau announced today that subscriptions
to Treasury securities offered in the $9,000,000,000 December
Victory Fund Drive now total $6,600,000,000,

Although success

in achieving the aim now is indicated, he said, there must be
no relaxation of effort.
The December drive, the Secretary also announced, will
terminate, and the subscription books will close, at the close
of business December 0 3 , with respect to three issues of securities, nameiy, Victory two-and-one-halfs due December 15,
December 15, 1963; 1-3/4$ bonds due June 15,
“*948; an(^
certificates of indebtedness due December 1 ,
1943*
*
The sale will continue on the Series A and C Tax Savings
No^es and the Series P and G United States Savings Bonds,
. ,, The ^ easury will accept subscriptions which are placed
m the mails up to midnight of December 2$ for the three issues
on which the drive ends that day. The issue of 7 /8 $ certifi­
cates of indebtedness, as previously announced, will be open
to subscription by commercial banks December 16, 17 and 18 for
own account, in the aggregate sum of $2,000,000,000,
with applications from such banks in amounts up to $100,000 to
be allotted in full, while larger applications will be subject
to percentage allotments.
j.he funds raised through the drive, together with funds
to be raised through the sale after January 1 of Treasury bills
sayings bonds, certificates of indebtedness and tax savings
notes may enable the Treasury to function until some time in
rJarch or April before another major financing campaign.
Secretary Morgenthau praised the diligence of the 50,000
salesmen of the Victory Pund Committee in soliciting subscriptions to^the $9*000,000,000 of new securities, The un~
selfish devotion of these salesmen is contributing greatly to
the indicated success of the drive, he said.

Subscriptions through December 10 for the different issues
from all sources are;
Prom Banking
Sources

$ 300 ,000,000

Treasury bills

8 9 1 ,0 0 0 , 0 0 0

2 ,058*000,000

589 i0 0 0 , 0 0 0

2,647,000,000

2 , 2 5 5 *0 0 0 , 0 0 0

2: , 2 5 5 , 0 0 0 ,0 0 0

Tax Dotes

Total

&

$ 300 ,000,000

$ 8 9 1 ,0 0 0 , 0 0 0

2-1/2/ Victory Bonds

Savings Bonds (E, P

Total

;

7/8/ Certificates
I-3 /4 / Treas* Bonds

Prom nonbanking sources

G-)

2 1 4 0 0 0 000

. .

2 1 4 0 0 0 ,0 0 0

,

2 9 1 . 0 0 0 . 000

2 9 1 *0 0 0 ,0 0 0

$ 2 , 3 5 S , 0 0 0 , 0 0 0 $ 4 > 2 4 0 , 0 0 0 ,0 0 0 $ 6 , 5 9 8 , 0 0 0 ,0 0 0

special depositaries is any amount which In your opinion may be
justified to meet banks* requirements provided that all deposits in
war loan nocounts in excess of 100$ capital and surplus shall be
collaterally secured by the pledge of 0# S* Government securities’*.
While the Treasury has received no definite advice as to the inter»
protation placed upon this authority by the various Federal Reserve
Banks,| it appears to the Department, in view of present conditions,
that we would be justified in adopting a rather liberal attitude in
order to avoid unnecessary disturbance to the banking system, which
might result from excessive cash payments on any one day. At the
same time, the Treasury believes that it Is no longer necessary to
enforce the requirement that all deposits in war loan accounts in
excess of 100$ capital and surplus shall be collaterally secured by
the pledge of United States Government securities. Tour bank is,
accordingly, authorised to accept as security any collateral for war
loan accounts provided by the existing terms of Treasury Circular

Ho. 92«
Tory truly yours,

(Signed) D. W. Belli
Under Secretary of the Treasury

EDB:mc

11/13/42

Mr* W. si. Paddock
President
Federal H e s e m Bank of Boston
Boston« Massachusetts
Dear Ur* Paddock:
la view of the Treasury’s present and prospective large
requirements in connection with the financing of the war effort, and
the increasingly important part which banks m y be called upon to
take in this financing, it would appear desirable to have Federal
Iieaorve Banks circularize all incorporated banks and trust companies,
clearly indicating to such banking institutions the desirability of
qualifying as ¿special Depositaries of Public Moneys, under the pro­
visions of Treasury Circular Ho. 92, and of making payment, through
«War Loan Deposit Accounts", for Government securities. It is noted
that only 3,253 banka in the entire United States now hold designation
as special depositaries, and of that number only 2,149 are at present
utilizing the war loan accounts.
The beaks should be advised that this system nakes it unneees
sary for them to provide immediately available funds at the time sub­
scriptions ar< allotted but that, on the other hand, the proceeds of
subscriptions can be retained on deposit at the basks until called by
the Treasury, Tills will become increasingly important as payment for
the banka* own subscriptions may come simultaneously with withdrawals
of cash by depositors to make payment for individual subscriptions. It
appears especially desirable to inform banks that payment for customers
allotment a, on subscriptions made through such banks, also may be made
through tne medium of the war loan accounts. In other words, through
this method of paying for Government securities subscribed for by-the
banks and their customers, the funds can be retained in the Community
up to the time such funds are needed to meet Government obligations
presented for payment.
With respect to those banks which already have qualified as
special depositaries, as well ns any banka which nay qualify in the
future, attention is invited to Treasury telegram of August 3, 1942,
which provided in part as follows: "Until further advised to the
contrary, you are hereby authorized to recommend qualification of

/

SPECIAL DEPOSITARIES DESIGNATED UNDER THE PROVISIONS
■
OP TREASURY CIRCULAR NO. 92 - CHANGES
IN FEDERAL RESERVE DISTRICTS DURING
...PERIOD PROM NOVEMBER lU TO
DECEMBER 107

DISTRICTS

'K m ..DESIGNATIONS

No,•

(*

Amount

3 6 . S S 5 ,0 0 0

23

93

te,517,500

80

261,905,000

Philadelphia

113

2 2 , 1 7 U fl 0 0

3S

23.U09,500

Cleveland

152

75.3SU.ooo

28

5 9 , 8 1 0 ,0 0 0

Richmond

103

Ug,586,000

25

18,667,500

Atlanta

S3

17,160,500

35

36,557,500

Chicago

57

68,750,000

25

876,182,250

St. Louis

Up

9,U90,800

15

9,635,650

Minneapolis

5?0

57,97^.600

5U

19,61*3,000

Kansas City

115

16, 890, 7 5 0

28

1,963,500

2U

7,035.000

27

69.075,000

U

3,900,000

_n

1 0 . 0 9 6 .0 0 0

TOTALS

1U26

Uo6,7U8,250

391

i,U68,3UU,900

Qualifications
prior to Nov. l U ,

m

Boston

TO

New York

Dallas
San Francisco

19U2.

$

■ tes*?
INCREASES
No.
Amount

i

6 , 5 5 3 .92^ . 01^

**739

$ S , U 29, o i 7 , i 6U

$

81 . U 0 0 .0 0 0

.3
I Biffi®
For

center
Id
I*'1 '

im m e d ia t e r e l e a s e
'V,

Secret
S e c r e t a r y M o rg e n th a u a n n o u n c e d to d a y th a t
^ ^ t h e

p a s t m o n th

a d d it io n s

o f S p e c ia l D e p o s it a r ie s
in

th e

q u a lif ic a t io n s

have b ro u g h t
be h e ld

to

o f d e p o s it a r ie s

$ 8 ,1 2 9 ,0 1 7 ,1 6 1

o f 391

S y ste m added

h o ld

Tr f i f i q
s e a u r it ie s ijr T n e
c ir c u la r iz e

t o h a v in g

a re

s u b s c r ib e c

d e s ig n a t e d

t o t a l a m o u n t t h a t may

and

tru st

c o m p a n ie s

new d e p o s i t a r i e s ,

and

now d e s i g n a t e d

o rd e r

in c r e a s e d

th e

in

th e

e lig ib ilit y

ra m i n i m i n i t v

fo r

t h e ir d is t r ic t s
use

to ’

th e

i f o r t h e ir

of

th e

T h o se

t a k in g

o f th e

own a c c o u n t a n d
fimm*

In orde]
e piti e s ii
t.leet Govei
| | ? e Bank!
i ;|ew to ha1
^Special Di
c.;participa1

Ip oceed s

^jpit and I

a v ie w

"W a r L o a n A c c o u n t s "

T re a su ry

p ro ce e d s

w it h

j potai am

I A speci
I 'tei added
|i 5,748,250
| ¡designati

t h e f u n d s r a i s e d b y s a l e o f Governm nnt
.B u s M
S e c r e t a r y a s k e d t h e F e d e r a l R e s e r v e BanlcS* ' ^

th e b an ks

¡[ositaries

1 Ist compah

by $ 1 ,1 6 8 ,3 1 1 ,9 0 0 .
^nfih

to ke ep

a d v a n ta g e o f

!I fte numi
amoui
R fious des;

f i n a n c i n g gragg
s a le s
th o se

o f s e c u r it ie s
o f t h e ir

c u sto m e rs
The n u m b e r,

by F e d e r a l R e se rv e

I

in

i

th e m q u a l i f y

a b le

p r e v io u s ly

1 ,1 2 6

m e th o d o f participating i n
th u s

i cughout

and in c r e a s e s

c o - o p e r a t i o n w it h

""“rM|1 - 8S S p e c i a l D e p o s i t a r i e s .
t h is

co u n try

in

$ ¿ 0 6 ,7 ^ 8 ,2 5 0 ,

in s t it u t io n s
In

to

T r e a s u r y 1s l i s t

G o v e rn m e n t «

F e d e ra l R e se rv e
to

th e

by b a n ks

A s p e c ia l e f f o r t

q u a lif ie d

th e

th ro u g h o u t th e

a t a n y o n e t im e

b e h a lf o f th e

to

| 111 addit;

D is t r ic t s ,

of

new d e p o s i t a r i e s a n d t h e a m o u n t t h e y a r e q u a l i f i e d t o h o ld
and th e in c r e a s e s i n p r e v io u s d e s ig n a t io n s a r e a s f o llo w s :

I

TREASURY DEPAREIENT
Washington

FOR IMMEDIATE RELEASE,
December 14, 1942.

Press Service
No. 34-60

Secretary Morgenth.au announced today that during the past
month additions to the Treasury1s list of Special Depositaries
throughout the country and increases in the qualifications of
depositaries previously designated have brought to $3,429,017,164
the total amount that may be held at any one time by banks and
trust companies in behalf of the Government.
A special effort in cooperation with the Federal Reserve
System added 1,426 new depositaries, qualified to hold
$406,748,250, and increased the eligibility of 391 institutions
now designated by $1,468,344,900.
In order to keep the funds raised by sale of Government
securities in the communities where raised until actually needed
to meet Government payments, the Secretary asked the Federal
Reserve Ranks to circularize the banks in their districts with
a view to having them qualify for use of the w¥ar Loan^Aecounts
as Special Depositaries. Those taking advantage of this method
of participating in Treasury financing are thus able to retain
the proceeds of the sales of securities subscribed for their own
account and those of their customers until called by the Treasury.
The number, by Federal Reserve Districts, of new depositaries
and the amount they are qualified to hold and the increases in
previous designations are as follows:

D IS T R IC T S

NE r. D E S IG N A T IO N S
No,
Am ount

IN C R E A S E S IN P R E V IQ U S D E S IG N A T IO N S
N o.

A m ount

•i.

New Y o r k

3 6 ,8 8 5 ,0 0 0

02

70

to

B o sto n

93

4 2 ,5 X 7 ,5 0 0

80

2 6 1 ,9 0 5 ,0 0 0

P h ila d e lp h ia

113

2 2 ,1 7 4 ,1 0 0

38

2 3 ,4 0 9 ,5 0 0

C le v e la n d

152

7 5 .3 8 4 .0 0 0

28

5 9 ,8 1 0 ,0 0 0

R i chm ond

103

4 8 .5 8 6 .0 0 0

25

1 8 ,6 6 7 ,5 0 0

A t la n t a

83

1 7 ,1 6 0 ,5 0 0

35

3 6 ,5 5 7 ,5 0 0

C h ic a g o

57

6 8 .7 5 0 .0 0 0

25

8 7 6 ,1 8 2 ,2 5 0

S t«

42

9 ,4 9 0 ,8 0 0

15

9 ,6 3 5 ,6 5 0

M in n e a p o lis

570

5 7 ,9 7 4 ,6 0 0

54

1 9 ,6 4 3 ,0 0 0

K an sas C it y

115

1 6 ,8 9 0 ,7 5 0

28

1 ,9 6 3 ,5 0 0

24

7 .0 3 5 .0 0 0

27

6 9 ,0 7 5 ,0 0 0

4

5 .9 0 0 .0 0 0

13

1 0 ,0 9 6 ,0 0 0

1426

4 0 6 ,7 4 8 ,2 5 0

391

1 ,4 6 8 ,3 4 4 ,9 0 0

Q u a li f i ca t io n s
p r io r to
i
N ov, 1 4 , 1 9 4 2 . 3 3 1 3

6 ,5 5 3 ,9 2 4 ,0 1 4

L o u is

D a lla s
San F r a n c is c o
TOTALS

T o ta l to

d a te

4739

#

$ 8 ,4 2 9 ,0 1 7 ,1 6 4

8 1 ,4 0 0 ,0 0 0

TREASURY DEPARTMENT
Washington
FOR RELEASE, HORNING NEWSPAPERS
Tuesday. Deceaber 15. 1942.

Press Service

j

the Secretary of the Treasury announced last evening that the tenders for
$600,000,000, or thereabouts, of 91-day Treasury bills to be dated December 16, 1942, u
to nature March 17, 1943, which were offered on Deceaber 11, were opened at the Federal'

[ The Sec
t tenders

Reserve Banks on December 14*

f bills to
The details of this issue are as follows:

|3, which i
Total applied for - $1,293,757,000
Total accepted
600,722,000
Range of accepted bids 2
High
Low
Average price

eral Resei
The deta

(Excepting two tenders totaling $60,000)

- 99*926 Equivalent rate of discount approx. 0*293$ per annua
- 99*907
■
• ' •
*
*
0.368$ *
*
- 99*908
«
«
•
•
•
0.364$ ■' ■

r Total ap
Total ac
v

Range o f
{60, OCX
(3 5 percent of the amount bid for at the low price was accepted.)

High - (

Low . c
Federal Reserve
District
Boston
Hew York
Philadelphia
Cleveland
Riehaond
Atlanta
Chicago
St. Louis
Minneapolis
Kansas City
Dallas
San Francisco
TOTAL

Total
Applied For
*

42,790,000
777,096,000
40,997,000
1 7 ,682,000
2 8 ,363,000
1 0 ,383,000
214,091,000
26,959,000
1 3 ,128,000
3 2 ,138,000
17,735,000
... 72.395.000
*1,293,757,000

Total
Accepted

iverage - 9

I price
# 30,063,000
297,907,000
21,554,000
1 1 ,084,000
13,623,000
5,736,000
1 2 1 ,664,000
17,303,000
5,018,000
2 4 ,898,000
1 5 ,551,000
, 36.301.000
<600,722,000

I ¡percent of

IM

Heservi

ton
to

: Nelphia
; gland

ibond
1 |t a
f |ago

THEASOTOr DEPARTMENT
Washingtdh
FOR RELEASE, MORNING NEWSPAPERS,
Tuesday, December 18. 1942.
12-14-42----------*“ *-----------

Press Release
bo • 34—61

The Secretary of the Treasury announced last evening that
the tenders for $600,000,000* or thereabouts# of 91-day Treas­
ury bills to be dated December 16, 1942, and to mature March 17,
1943, which were offered on December 11, were opened at the
Federal Reserve Banks on December 14#
The details of this issue are as follows:
Total applied for - $1,293,757,000
Total accepted
¿00,722,000
Range of accepted bids}$60,000)
||

'

(excepting two tenders totaling

High

- 99*926 Equivalent rate of discount approx’. 0.293$
per annur$
Low
- 99.907 Equivalent rate of discount approx. 0.368$
per annum
Average - 99.908 Equivalent rate of discount approx. 0.364$
price
per annum
(35 percent of the amount bid for at the low price was accepted).
Federal Reserve
District

Total
Applied For

Total
Accepted

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

$

42,790,000
777.096.000
40.997.000
17.682.000
28.363.000
10.383.000
214.091.000
26.959.000
13.128.000
32.138.000
17.735.000
72.395.000

$ 30,083,000
297.907.000
21.554.000
11.084.000
13.623.000
5.736.000
121.664.000
17.303.000
5.018.000
24.898.000
15.551.000
36.301.000

$1,293,757,000
—oOo—

$600,722,000

Total

Starnò** 7, M i

fO

MB. »
th * »oath c£ lovaahcr su» market

transaction© tock place la direct and guaranteod
©©curiti«© of th© ® & r*rm m % .

Copy toî

Mr. Schwarz
Mr. Heffelfinger
Mise Sanford
Fil©

C&py tr>i -Mg, ■SchMor^

»...-Kfti*áUfcl¿A»£&£

^ g tfS T "

cnrF'jT — .

TREASURY DEPARTMENT
Washington

POR IMMEDIATE RELEASE,
Tuesday, December 3.5, 1942»

Press Service
Uo. 34-62

During the month of November no market trans­
actions took place in direct and guaranteed secur­
ities of the Government for Treasury investment and
other accounts, Secretary Morgenthau announced
today*

i-oOo-

TREASURY DEPARTMENT

Washington
An address by Roy Blough, D ire cto r of Tax Research,
U nited S ta te s Treasury Department, Before the New
England In s t it u t e o f't h e C o n t r o lle r s In s t it u t e
o f America, Boston, M assachusetts,
December 15,
^- .

19 2

WARTIME PROBLEMS OE BUSINESS TAXATION
I t w ill not be su rp risin g i f most businessmen remember the Revenue
Act of 19^2 m ainly fo r i t s corporate ta x r a t e s . The r a te s f i n a l l y adopted
were not agreed on e a s ily or q u ic k ly . They were the su b je ct o f much
d iscu ssio n and even controversy in the Ways and Means Committee, on the
flo o r o f the House, in the Senate Finance Committee, on the flo o r o f
the Senate and f i n a l l y in the Committee o f Conferees where the f in a l
d e cis io n was made. Indeed the corporate ta x ra te s were one o f the
most thoroughly considered questions in the whole revenue b i l l .
Out o f t h is l e g is l a t iv e process came the fo llo w in g r a t e s , with
which you are a l l su rely f a m ilia r . The excess p r o fit s ta x r a te was '
in cre a se d to a f l a t
percent with a c r e d it allowed fo r current debt
payments or postwar refunds up to 10 percent o f the excess p r o fit s ta x .
The combined normal ta x and su rta x ra te s were increased to a maximum of
UO p e rcen t. Of course, the great m ajo rity o f American corporations w i l l
pay at le s s than the hO percent combined ra te sin ce the corporate r a te
fo r sm all corporations s ta r t s a t 25 p e rcen t. Most of the income o f
co rp o ratio n s, however, w ill be taxed at the higher ra te s — part at
the UO percent ra te and p a rt at the excess p r o f it s ta x ra te o f 90 per­
c e n t, A number o f companies w ill be a ffe c te d by the lim it a t io n whereby
the t o t a l ta x cannot exceed SO percent o f the net income.

90

There appears to be an im pression in some c ir c le s th at American
corporations w ill have p r a c t ic a lly nothing l e f t a ft e r taxes under these
r a t e s . H ap pily, such i s not the case. I t i s estim ated th a t the I U
net ta x b i l l o f American corporations w ill amount roughly to $8 b i l l i o n
or a l i t t l e over h a lf o f th e ir 19^2 p r o f it s , and th a t a f t e r taxes the
19^2 p r o fit s w ill amount to $7 b i l l i o n , as compared with $7 b i l l i o n in
19^1, $5 b i ll i o n in
and
b i l l i o n in
.

92

19^0

1939

In t h is connection, I should lik e to quote from S ecre ta ry Morgenthau*s
statement before the Ways and Means Committee on March 3,
U :

19 2

^There can be no f a i r quarrel with the im position upon
corporations o f a s u b s ta n tia l proportion o f the in creased

load o f ta x a tio n required 'by our n a tio n a l p e r il* We are
fig h t in g fo r the maintenance of the very system o f fre e enter­
p r is e which makes corporate p r o fit s p o ssib le * At a time l i k e
t h is , X am confident th a t incorporated business w ill w illin g ly
pay a d d itio n a l taxes which w i l l , a f t e r a l l , leave i t in the
aggregate about the same amount o f income a f t e r taxes as
during the years before
^ .w

19 0

Of course, the fig u r e s ¿just mentioned are t o t a ls and show an average
s itu a tio n * The weight o f the ta x burden must be p ictu re d a ls o in terms
o f i t s e ffe c t on s p e c if ic corporations* Undoubtedly many corporations
w il l be more s e r io u s ly a ffe c te d than i s in d ic a te d by the t o t a l s .
Wartime corporate ta x ra te s are h ig h , in other co un tries as w ell
as our own, fo r a v a r ie ty o f reaso n s. The f i r s t , o bvio u sly, is revenue
requirem ents, which are so tremendous th a t every ta x must be v ig o ro u sly
ex p lo ite d which does not impair th e minimum l i v i n g standard necessary
fo r decency and productive e f f ic ie n c y . C orporations, being the source
o f a huge volume o f income, are in e v ita b ly a ta rg e t fo r h igh ta x r a t e s .
Moreover in the absence o f high corporate taxes a major p o rtio n o f the
cu rre n tly very larg e corporate earnings might a lto g e th e r escape war­
time ta x a tio n by being w ithheld from,payment as d ividends*
Wartime corporation taxes are high a ls o because the g reat m ajo rity
o f the people r ig h t ly consider war p r o fit s and a l l u n u su ally high p r o fit s
to be h ig h ly o b jectio n a b le during the war* They f e e l th a t the s a c r if ic e s
which others must bear in these times should be f u l l y shared by corpora—
tio n s , th at the w illin g acceptance by farmers and workers o f r e s t r ic t io n s
on farm p rice s and on wages and freedom to move from job to job should
be accompanied by heavy ta x a tio n o f p r o fits * Indeed, one o f the sources
of lab or d i f f i c u l t i e s has been the b e li e f o f workers th at management
and c a p it a l are making fortun es out o f the war. The war production pro­
gram, the f ig h t ag a in st i n f la t i o n , and the general maintenance o f p u b lic
morale thus depend in some degree on having corporate taxes h igh enough
and w ell enough d is tr ib u te d to convince the man on the s tr e e t th at the
s a c r if ic e s o f war are being g e n e ra lly shared and th a t la r g e p r o fit s
are not being made by some from the s a c r if ic e s o f o th e rs.
Xt i s a ls o a m atter o f fa ir n e s s to what one may t r u t h fu lly c a l l
the war c a s u a lty concern th a t taxes be h igh on those who are fo rtu n ate
enough in these times to continue making p r o f it s perhaps a t an
acce le ra te d r a t e . X need not elab o rate the f a c t th a t some concerns
have already passed out o f e x isten ce and th at many others have l i t t l e
prospect o f su rv iv in g the a p p lic a tio n o f the imperious r u le th a t war
production must come f i r s t . The Federal ta x system cannot prevent t h is
re g re tta b le r e s u lt ; h a p p ily , i t i s not resp o n sib le fo r i t although too
often i t rece iv es the blame.

~

3

-

. . ,A.s ld e iro a f ninof exception - the c a p it a l sto ck ta x - Federal taxes
6n Business are imposed on net income. The worst h i t b u sinesses may
nurse th e ir wounds p r a c t ic a lly ta x fr e e so f a r as the Fed eral Government
* ! i ^ 0<T £ er
Businesses wl}iCh are making p r o f it s hut are no more than
i° i_.
th e ir own are sch je d t to the income ta x while those which are
making excep tio n al p r o f it s pay in a d d itio n the excess p r o f it s tax* To
some extent the businesses which are prospering now are reaping the
rewards o f superior fo r e s ig h t and o f superior trtllin g n e ss and a b i l i t y
o f management to make the adjustment to th e war-time s itu a tio n * For
the most p a r t, however, they are b e tte r o f f m erely because they are
lu c k ie r w ith resn ect to t h e ir in d u stry and t h e ir lo c a tio n * J t i s a
kind o f lu c k not a sso cia te d w ith the important business fu n c tio n o f
assuming r is k s . Tax p o lic y can do l i t t l e to help the unfortunate
b u sin e ss. But i t can achieve some measure o f e q u a liz a tio n by seein g
to i t th at a s u b s ta n tia l measure o f the burden o f paying fo r the war
i s placed on the prosperous b u sin e sses.
While the reasons fo r imposing h igh wartime ta x r a te s on corpora­
tio n s have been p ersu asive there i s another sid e to the case* To the
extent th a t corporate p r o f it s are no g re a te r than could be r e a liz e d out­
sid e the corporate form and are d is tr ib u te d to sto ckh o ld ers, ta x a tio n o f
such p r o f it s in p art d u p lic a te s the in d iv id u a l income t a x . Moreover
the corporation ta x bears l i t t l e r e la tio n to personal a b i l i t y - t o - p a y V ;
the sto ck h o ld ers, Furthermore, a s corporate ta x r a te s r i s e , t h is
d u p lica te ta x a tio n reduces the p o s s ib ilit y o f b u ild in g up c a p ita l out
o f earnings to meet new and expanded needs which may l i e ahead.
While th ese co n sid eratio n s may have to be overruled by the exige n cies
o f war, high ra te s a ls o g iv e r is e to a problem c lo s e to the war program
i t s e l f , namely, the problem o f in cen tiv e *
When the p r o f it in ce n tiv e to businessmen i s mentioned one or more
o f a t le a s t two ideas may be in mind. The in c e n tiv e may be th a t o f en­
couraging businessmen to undertake war work and do i t to th e ir utmost
c a p a c ity . I question i f the p r o f it in c e n tiv e i s very important in t h is
con nection . The businessmen I have been ta lk in g with — and a g reat
many come to the Treasury in connection with ta x l e g is la t io n — have
fo r the most p a rt been sayin g they are not concerned whether they make
° U^ ° f the War; th ey are going t0 * ° th e ir utmost fo r the war
e f f o r t , p r o fit or no p r o f i t . I p r a is e them fo r t h e ir realism and th e ir
p a trio tis m .
There i s another kind o f in c e n tiv e , however, th a t i s important in
war production , namely the in ce n tiv e to e f f ic ie n c y . Jn a time when
there i s great s c a r c it y o f manpower, m achines, and m a te r ia ls , i t is
important th a t the output per u n it of input be ra ise d to i t s maximum,
digh ta x ra te s are l i k e l y to d u ll somewhat the e f f o r t to keep co sts to

- -'I}..-

a minimum, both in, terms o f money and in terms o f man hours, machine hours,
and raw m a te r ia ls . There a re , o f course, in c e n tiv e s to e ff ic ie n c y other
than p r o f i t s . I “b elieve businessmen have a g re a t and proper sense o f
p rid e in th e ir r e a l accomplishments and th a t they w il l make g reat e ffo r t s
to m aintain e f f ic ie n c y even where the pecuniary-rewards o f such e ffo r t s
are small i f adequate re co g n itio n i s given to e f f ic ie n c y . But extrem ely
high ta x ra te s in e v ita b ly lead to some r e la x a tio n in the e f f o r t s o f
management to keep co sts down.
, Tax p o lic y thus fa c e s t h is dilemma: On the one hand, th e need fo r
encouraging e f f ic ie n c y in d ic a te s th at a s u b s ta n tia l margin o f p r o fit
should be l e f t a ft e r taxes* On the other hand, th e need fo r e l i c i t i n g
the f u l l response o f other groups im portant to production in d ic a te s
th at taxes on business p r o fits -s h o u ld be h ig h . I t would be too much
to say th a t the Revenue Act o f 19^2 has solved the dilemma, but i t
contains fe a tu re s w h ich .I th in k go a s u b s ta n tia l d is ta n c e toward a

solutien.
Th<|. problem was faced to some exten t in the ra te stru ctu re i t s e l f .
The fo r t y percent income ta x ra te is hard ly high enough to a f f e c t
e ffic ie n c y a d v e rse ly . The 90 percent excess p r o f it s ta x ra te i s s o f t ­
ened by t%we fe a tu re s o f the law . P ro v isio n i s made fo r a rebate in the
post-war period of 10 percent o f the excess p r o f it s t a x . Further pro­
v is io n i s made fo r a maximum average e f f e c t iv e ra te lim it a t io n o f
SO percent fo r combined normal ta x , su rta x , and excess p r o f it s ta x .
The 10 percent post-w ar c r e d it has a ls o been used as a means to grant
&sme current help to corporations paying debts,- The A ct allow s a ta x
cre d it fo r n et debt repayments up to Ho percent o f the debts repaid in
the ta x a b le y ea r, but not in excess o f the post-w ar c r e d it fo r such y e a r•
The post-war refund w i l l , o f course, be correspondingly reduced* A
corporation ta k in g i t s t o t a l post-w ar c r e d it in the form o f the c r e d it
fo r debt payment would have a maximum current excess p r o f it s ta x ra te o f
81 p e rcen t. The number o f hardship cases a ffe c te d by the debt r e l i e f
c re d it i s lim ite d by the fa c t th a t no post-w ar c r e d it and acco rd in g ly
no c r e d it fo r debt payment is a v a ila b le to the corporation th a t i s not
subject to excess p r o f it s t a x .
However, it is primarily in its modifications of the tax base that
the Revenue Act of 19^2 has helped to meet the problems of businessmen.
I f my observation i s a ccu rate, businessmen and in d u s tr ia l lead e rs are
much more concerned about what i s su b ject to F ed e ral income and excess
p r o fits taxes than they are about the r a te o f tax* They are f e a r f u l th a t
income and excess p r o f it s taxes w i l l be imposed on apparent p r o fit s which
are not a c t u a lly p r o f i t s . In th a t case the ta x becomes, not a ta x on
income,, but a ta x an c a p it a l. *i!hey are a ls o concerned th a t the excess
p r o fits ta x s h a ll not be imposed on p r o fits ' which are not in excess o f
what Congress r e a lly intended normal p r o fit s to b e .

- 5

®he Treasury Department has been deeply concerned with these prob­
lems and has over the past few years made a series of intensive studies
in an effort to see just where the errors are likely to arise and what
remedies might be applied. It has,, in the consideration of previous
revenue bills, made various recommendations to Congress for the re*
finement of the income base and the protection of taxpayers against •'
unintended tastes on their capital* One that you may recall is the loss
carry-over provision which was re-introduced in 1939# During the recent
Revenue Bill of 19^2, the treasury made suggestions to the congressional
committees for a variety of corrective measures* The committees have
also been interested in the problem and not only considered sympathet­
ically most of the Treasury recommendations but adopted additional
features for the relief of taxpayers* X think it is not too much to
say that the refinement and purification of the income and excess profits
tax bases represent a fixed policy on the part of the Treasury and of
Congress. The Revenue Act of 19^2 took steps of great importance along
these lines« Xt is to these steps that X wish to devote the major part
of my discussion this evening*
Taxable Income and Its Allocation
The Federal incoiae tax law has throughout its history made provision
that in computing taxable net income all costs shall be deducted over the
long run, including depreciation and obsolescence of capital and deple­
tion of natural resources*' The possibility that unreal income may be
taxed derives not from this eventual calculation of net income but rather
from the timing of income and losses, that is, their allocation among
years. What difference in taxes does it make whether income and cost
items are correctly allocated to the right year? The answer depends on
many factors, and time does not permit an extensive analysis* A minor
point is that a tax paid in the wrong year either costs the.taxpayer
interest or pays him interest* Much more important is the fact that
most corporations do not have income in every year but incur losses in
some years and that many corporations are subject to excess profits taxes
in some years and not in others* Obviously, if an incorrect allocation
of cost8 among years results in a larger than correct loss in one year
and a correspondingly larger than correct income in another year, the
total tax is increased unless the loss of. the one year may be offset
against the profit of the other year. Bren if there were income in
every year the amount of taxes paid would be affected by incorrect
allocation if there were changes in tax rates or if the rates contained
a progressive element.
Tax rates tend to be higher in war years than in peace years and
excess profits taxes are usually war taxes* Moreover profits tend to be
overstated in the war years* Accordingly, there is every reason to be­
lieve that the bunching profits in war years'results in higher taxes
than would have resulted if the allocation had been correct. It is

~ 6 ~

thus in the interests of the taxpayer as véli as of accurate taxation to
have the allocation of income by years as correct as possibles In times
of peace and under relatively low rates* the incorrect allocation
probably does not result in many instances of excessive hardship; but ih
wartime and under high tax rates discrepancies between taxable profits
and actual profits can easily lead to more serious consequences*
So some extent errors in allocating income and Costs may be due to
differences between the provisions of the tax laws and the practices of
accountants. Some of these differences might be eliminated; more often
there Is good reason for them. Errors in allocating income are, however *
for the most part due to inadequacies of accounting procedures in
determining the income for any one year* Shis is not a criticism of
accountants but rather a recognition of their task which involves
prophecy of the future in estimating the income of the present and the
pact* Most business enterprises are Continuing ventures in which the
events of any one year represent only a part of their life histories.
Even under relatively normal circumstances* the bock profits shown at
the Close of any one annual accounting period may turn out not to have
beèn actual profits. Some assets may prove in time to have been overvalued; or some expectations may fail to materialize* Until sufficient
years have elapsed to permit a final review of substantially all of the
facts essential to the determination of actual profits, the periodic
summing up of income on.the basis of a single year's operations must
usually be regarded as iittle more than a tentative estimate of actual
profits;
$he tentative character of the annual estimates of Corporation profits
do not prevent dividends from being paid and other transactions being
carried on as the profits were finally determined* Likewise corporation
taxes must be levied largely on the basis of such annual estimates* tfhe
revenue requirements of governments do not permit the postponement of
taxes until apparent profits can be shown to be actual profits* On the
Other hand; any attempt to keep each year's tax open for correction until
profits
losses can be determined in the light of later history would
make the administration of our tax laws much move difficult* Hence,
Congress has followed the general rule that income taxes be levied on the
basis of the profits shown in a single annual accounting period although
provision is made fair some practical correction of uncertain prophecy in
the light of later experience*
Amortization of Wartime Equipment
Many factors may give rise to an incorrect determination of income
in a given year. An important oine concerns the amount of investment in
wartime equipment which should be charged off each year* A very large
amount of equipment used in making war goods has been supplied by the
Government; nevertheless a large volume is privately owned and financed.

•»

.*■»

The amount o f th e co st to “be charged o f f in any year depends, o f course, on
the probable u s e fu l l i f e o f th e asse t* In some cases t h is can “be answered
with l i t t l e d i f f i c u l t y * I f a c e r ta in j i g or p a tte rn , fo r example, i s usab le
only fo r a given c o n tr a c t, the co st can be charged as an expense a g a in st
the income from th at co n tract* This has been perm itted fo r many years*
Some machinery, equipment, and even b u ild in g s , however, w hile usable
only in connection w ith war work, w ill be u s e fu l throughout the war period
but then cease to be o f any use or v a lu e , An example might be s p e c ia l
equipment used in making machine guns. Tbe problem in t h is case i s to
determine how lo n g the company i s going to make machine guns and to charge
the co st (or more a c c u ra te ly the d ep le ta b le valu e) o f the s p e c ia l equipment
ag ain st the s a le s over th a t p e rio d . But no one knows how long the war w ill
l a s t , so th a t some s p e c ia l type o f treatm ent i s necessary to make sure th a t
in computing taxab le income the co st o f t h is s p e c ia l equipment w ill be
spread eq u ita b ly over the co n tra cts on which i t i s u s a b le .
A th ir d s itu a tio n presents a s t i l l more p u zzlin g problem* The goods
being produced may be one which w ill have a la rg e use in the post-war
p e rio d , fo r example, a irp la n e s ; o r, a lt e r n a t iv e ly , the equipment or p la n t
may be r e a d ily adapted to peacetim e use* In such case the problem i s one
of fo r e c a s tin g the extent to which peacetime use w ill r e a ll y be p o s sib le and
p r o fita b le * Thus, f o r example, n e a rly a l l o f the equipment fo r making
war planes might be adapted to producing planes in the post-w ar p erio d ,
but the market a t th at time does not appear l i k e l y to be more than a
fr a c tio n of the wartime m arket. The machinery and equipment w ill be
p r a c t ic a ll y a l l u sab le but obviously a g reat d eal w ill not a c t u a lly be
so used and may have to be scrapped.
These problems were f a i r l y c le a r e a r ly in the defense program and
the Second Revenue A ct o f 19^0 contained a p ro v isio n fo r am ortizing the
c o st o f defense p la n ts over a period o f f iv e years or le s s i f the war
should not l a s t so lo n g . As rev ised by subsequent a c t s , the am ortization
p re v isio n should la r g e ly remove the businessm an's worry about secu rin g
ta x deductions fo r h is wartime investment and a llo c a t in g them over the
war years* Whether he can a lso secure a p r o f it margin la r g e enough to
repay the investment during war i s another m atter,, but not one concerned
with ta x a tio n . The ta x treatment i s generous and may indeed be found un­
duly so in the l i g h t of what may a c t u a lly tra n sp ire*
Inventory P r o fit s
Apparent p r o f it s may a ls o a r is e due to changes in p ric e * Thus i f a
concern holding a m illio n d o lla r s 1 worth o f inventory rep la ces that in ­
ventory a t s u c c e s s iv e ly higher p r ic e s during the year and assuming i t i s
u sin g the f i r s t - i n f i r s t - o u t method o f ta k in g in v en to ry , i t s p r o f it s fo r
the year w ill in clu d e what is c a lle d ttinventory p r o f i t s * 11 I f , on the
other hand, p r ic e s f a l l during the year and the taxpayer continues to r e ­
p la ce h is in ven to ry, he w ill have su ffe re d inventory lo sse s* In view o f

the f a c t th at to s ta y in "business he must continue to keep an in v en to ry ,
there i s much to he sa id f o r the view th a t in ven tory p r o f it s and in ven to ry
lo s s e s should e it h e r not he counted or should o ff s e t each o th e r . This view
is supported hy the f a c t th a t i f the same p h y s ic a l inventory i s con tin uou sly
m aintained, the high er apparent p r o f it due to r is in g p r ic e s w i l l not he
a v a ila b le fo r the payment o f ta xe s and d ivid en d s, sin ce a la r g e r sum w ill
have to he spent in re p la c in g the goods sold than was deducted in computing,
p r o fits .
D eferred Maintenance
In s t i l l other ca s e s , current income may he o verstated as a r e s u lt o f
wartime r e s t r ic t io n s upon the making o f normal expen d itures. For example,
the r a ilr o a d s rep ort th at they are fin d in g i t im possible to make th e ir
normal maintenance o u tlays because o f p r io r it ie s on the needed m a te r ia ls .
Although most o f these maintenance expenditures are merely b ein g d eferred
and w i l l have to be made a t some fu tu re tim e, the aggregate taxes p aid by
the roads may be s u b s ta n tia lly a f f e c t e d . Thus t o t a l ta x e s may be higher
i f deferred maintenance i s made good in a lo s s year or in a year in which
the roads are su b ject to lower ta x r a te s than p re v a ile d when the maintenance
expenditures would norm ally have been made. Other in d u s tr ie s fa c e the same
problem although perhaps in le s s e r degree. S im ila r ly c e r ta in mining cor­
porations because o f labor shortages have been unable to make normal
development exp en d itu res. Other s im ila r cases could no doubt be c it e d .
Reconversion
Another erro r in wartime income may a r is e from the c o s ts o f post-w ar
reconversion. Costs o f conversion to war work are allow able a t the time
made, to the exten t th at they are not investm ents in new c a p it a l; and co sts
of reconversion w i l l be allow ab le as deductions a t the time they are in ­
curred. However, th a t time w i l l be a f t e r the war i s over and war p r o f it s
are ns lon ger re ce iv e d ; i t may indeed be a time when the bu siness i s lo s in g
money and the deduction o f the reconversion cost would be o f no valu e in
cu ttin g down otherwise ta x a b le income.
Reserves and the A llo c a tio n o f Income

I

There are se v e ra l ways by which the in c o r r e c t a llo c a t io n o f income
due to these and p o s s ib ly other fa c to r s could be handled in the income
tax law s. An obvious approach and one which has been fr e q u e n tly proposed
would be through allo w in g s p e c ia l reserves to be se t up to cover s p e c if ic
co n tin g e n cie s.- A g reat d e a l o f a tte n tio n and study was given during the
past year or more to the p o s s i b i l i t i e s o f ap p ly in g the s p e c i f i c contingencies reserve method. The d i f f i c u l t i e s prove to be v ery g r e a t .
Heither th e Treasury nor the taxpayer was in a p o s itio n to measure the
extent o f the problem in most c a s e s . The s o lu tio n o f each problem r e ­
quired a s p e c ific form ula and each in d u stry required a v a r ia tio n o f the

- 9f

form ula; even w ith p ro v isio n in such d é t a il the r e l i e f to p a r tic u la r cor­
poratio n s might he too greet or too small*
C onsideration was a ls o given to a kihd Of omnibus reserve which might
he s e t up to cover any war or p o st-w ar?contin gen cies which might a f f e c t
the amount o f income u ltim a te ly r e a liz e d from current Operations* Under
t h is id e a , corporations would have “been perm itted to deduct from current
income a sm all percentage o f net income to he set up in a reserve accou nt.
.Amounts in t h is reserve account would he added hack to n et income in
y ea rs when co n tin gen cies became f a c t s / Any unused reserves were to he
restored to income and taxed in f u l l .

4

This omnibus reserv e ra ise d d i f f i c u l t problem s. The absence o f any
c le a r t e s t p rescrib ed in advance f o r cLeteimining the reasonableness o f
amounts cre d ite d to the reserve and the amounts l a t e r charged a g a in st i t
meant the opening up o f a new f i e l d fb r l i t i g a t i o n . There was some
fe e lin g a ls o th a t the post-w ar Congress should not be fa c e d w ith th e
pressure which taxpayers would undoubtedly put upon i t to rep eal the
p ro v isio n fo r t a x a b ilit y o f unused p a rts o f th e reserve*
'
Loss Carry-back

A th ir d method and the one adopted by the Congress upon jo in t recom­
mendation o f the Treasury and the s t a f f o f th e J o in t Committee on In te r n a l
Revenue was a two-year carry-b ack o f lo s s e s . Thus, a corporation which has
income in
b and
U and a heavy lo s s in 19*41- can ap ply the
H lo s s in
the fo llo w in g \-mys. 3?irst, the 1911 lo s s can be o ff s e t a g a in st 19*4-2 income
to the exten t o f such, income. Second, i f any uncredited lo s s rem ains, i t
can be o ff s e t a g a in s t
I income and the 19*4-3 ta x reduced a c c o rd in g ly .
Third, i f th ere s t i l l remains an un credited lo s s , i t can be o ff s e t a g a in st
19*4-5 income, and any s t i l l remaining lo s s can be o ff s e t a g a in s t 19*4-6 income.
I f even a f t e r these fo u r o ff s e t s covering a fiv e -y e a r period in c lu d in g the
y ea r o f lo s s th ere s t i l l remains an u n o ffs e t lo s s , the taxpayer has no fu r ­
th er opportunity to o ff s e t i t a g a in st income. The p r io r law provided fo r
the carry-forw ard o f lo s s ; the present law adds the c a rry -b a ck . The revenue
law has had a previous example o f lo s s carry -b ack , namely in the Revenue Act
of I9IS, which perm itted carry -b ack o f 1919 lo s s e s a g a in st 1918 income.
That p ro v isio n did not meet the problem sin ce th e lo s s e s in volved in p ost­
war adjustm ents were not in curred i n many cases u n t il
or l a t e r .

19 2

19 3

19

19 3

1920

Although the lo s s carry -b ack and carry-forw ard p ro v isio n s w ill not
accom plish p r e c is e ly the same r e s u lts as would have been achieved under the
reserve p ro p o sals, taxpayers are perm itted, in e f f e c t , to compute ta x l i a ­
b i l i t i e s on the b a sis o f an accou ntin g period which may embrace as many as
fiv e y e a rs. Many corporations w ill be b e n e fitte d by th e lo s s carry-b ack
■provision which would have receiv ed l i t t l e or no help from the reserves be­
cause such corporations norm ally flu c tu a te between income and lo s s y e a r s .
A group o f co rp o ratio n s which w il l be b e n e fitte d deserves p a r tic u la r men­
tio n , namely, those which in I I have s u ffe re d lo s s e s because o f the ad­
justment to the war. W hile, norm ally, p ro v isio n s o f t h is type are not made
r e tr o a c tiv e , i t was provided th a t 19*4-2 lo s s e s could be o ff s e t a g a in st 19*4-1
income, although not ag a in st I U income. T his w ill g iv e exten sive r e l i e f
to business concerns hard h it by the war.

92
90

-

10

~

Carry-back o f Unused Excess P r o fit s C re d it .
The lo s s c a r r y - b a c k t e c h n i q u e w a tt a p p l i e d a l s o i n t h e c a s e o f the
excess p r o fit s t a x , in t h is case the cdi*ry*-badk being in the fortft. o f
unused excess p r o f it s cre d it* Important step s were a lso taken to
assure th a t only th a t type o f p r o fit which Congress intended to be
taxed as excess p r o f it s should a c t u a lly be so taxed* There are a
number o f competing th e o rie s o f excess p r o f it s ta x a tio n . The one
which the Congress has adopted i s th a t p r o f it s in the ta x a b le year
which are in excess o f what normal p r o fit s would have been during the
base period should be su b ject to excess p r o f it s tax* P ro te ctio n fo r
concerns w ith low p r o f it records in the base period is g iv en in the form
o f an in vested c a p it a l c r e d it , but t h is may be. viewed as a r e l i e f meas—
ure and not as in d ic a tin g apy r e a l divergence from the p r in c ip le o f tax»*
ing p r o f it s in excess o f normal p r o f it s fo r the base p e rio d . Any one
who has made any stu d ies o f the problem o f determ ining what normal p ro f­
i t s were during th e base period r e a liz e s the p r a c t ic a l im p o s s ib ility o f
accurate determ ination of such a f ig u r e . N ev erth eless, w ith a gross
^rate o f 90 percent and a net ra te of 81 p e rce n t, the r e s u lts o f substan­
t i a l erro r in determ ining excess p r o f it s are serio u s and in some cases
might cause severe hardship.
These hardships could a r is e e ith e r through some abnorm ality in the
earning o f the base period or in the earning o f the ta xa b le y e a r. Under,
the 1940 and 1941 A cts i t was recognized th a t some p ro v isio n should be
made f o r taxpayers whose average base period net income had been a ffe c te d
by some abnormal event or some o f whose ta xa b le year income was more
properly a ttr ib u ta b le to some other y e a r. These s p e c ia l r e l i e f provi——
sions were, however, broadened in to a g en eral r e l i e f p ro v isio n in the
1942 Act which w i l l , in e f f e c t , g iv e to any taxpayer who can e s ta b lis h
a base period abnorm ality, the r ig h t to appeal to the Commissioner and
U ltim a te ly to th e Tax Court o f the U nited S ta te s f o r a c o n stru c tiv e
average base p erio d net income more f a i r l y r e f le c t in g h is normal p r o f i t s .
This p ro v isio n w ill p a r tic u la r ly fa v o r corp o ratio n s which were u n u su ally
depressed during the base period as w e ll as new and growing corporations
whose average earnings during t h is period are an inadequate r e f le c t io n
of t h e ir normal, earnings f o r the y ea r subsequent to the base p erio d .
Taxpayers which were not in bu sin ess as o f January 1 , 1940, obvi­
ously have no base period earn in g . Under the 1940 and 1941 Acts they
were denied the use o f an average earnings base* However, as i t appears
that some o f the corporations*w hich have come in to existen ce sin ce the
beginning o f 1940 would be su b ject to unreasonable and ex cessiv e ta x bur­
dens i f compelled to compute t h e ir excess p r o f it s c r e d it by th e in vested
c a p ita l method, the 1942 Act perm its them to apply to the Commissioner
and to the Tax Court f o r a co n stru c tiv e earnings base* This p r iv ile g e ,
however, was r e s t r ic t e d to corporation? o f a c la s s in which ta n g ib le

/

-

11

-

asse ts not in c lu d ib le in in vested c a p it a l make important co n trib u tio n s
to income, to corp o ratio n s o f a c la s s in which c a p it a l is not an impor­
tant income producing fa c to r * and to corporations whose in vested c a p ita l
is abnormally low#
S p e c ia l R e lie f
There were, in a d d itio n , several c la s s e s o f taxpayers f o r whom
s p e c ia l r e l i e f from excess p r o f it s taxes was provided in the 1942 Act#
One such c la s s embraces the operators of mining p ro p e rtie s. These
operators, w ith some j u s t i f i c a t i o n s contended th at they were bein g
u n fa ir ly taxed on p r o f it s in excess c f normal to the extent th at such
p r o fit s were the r e s u lt , not of h igh er u n it p r o f i t s , but of more u n its
produced* They pointed out th at in a c c e le r a tin g the production of c r i t i ­
c a l war m a te r ia ls , they were sp ee d ily exhausting the ore reserves on
which they had counted f o r many years o f p r o fita b le o p eratio n s. Since
the ore mined today is not a v a ila b le fo r tomorrow’ s o p eratio n s, i t
could be argued th a t the aggregate in crease by the w hole-hearted cooper­
a tio n o f these operators in the war production program was r e s u ltin g in
la r g e r aggregate taxes than would have been imposed had production been
extended over a lon ger period of y e a rs.
A cco rd in gly , an attempt was made to work out a form ula which would
make adequate allowance fo r the more rapid d ep le tio n o f these w asting
a s s e ts . The form ula which was f i n a l l y adopted makes the amount o f
r e l i e f roughly proportionate to the extent o f a c c e le r a tio n , on the one
hand, and the l i f e o f the property, on the o th er. Thus, those mine
operators whose reserves w ill be exhausted w ith in a few years w il l be
s u b s ta n tia lly r e lie v e d o f th e ir excess p r o fit s a r is in g from a cce le ra te d
output, which those whose reserves are more or le s s u n lim ited w ill be
granted no r e l i e f .
Another s itu a tio n was discovered in the case of in stallm en t s e lle r s
who are perm itted to report income fo r ta x purposes under the i n s t a l l ­
ment method o f acco u n tin g. These taxpayers have found themselves lia b le
to excess p r o fit s ta x a tio n , even in cases where they have enjoyed nb
in crease in s a le s . The reduction in the supply of c e r ta in durable con­
sumers1 goods and the c r e d it r e s t r ic t io n imposed by R egulation V o f the
Federal Reserve Board have bunched income to the extent th at they have
caused payments to run cu rre n tly f a r ahead of exoenditures or c o s t s .
These taxpayers were th erefo re perm itted to usd an accru al b a s is of
accounting in computing th e ir excess p r o fit s taxes f o r a l l years in
which t h is ta x has been in e f f e c t .
Other R e lie f Provision s
A few other p ro v isio n s o f the 1942 Act which g iv e r e l i e f from hard­
ships o f wartime ta x a tio n may be mentioned b r ie fly ?
1. When a bu siness must dispose of r e a l or personal property due
to war co n d itio n s, the r e s u ltin g income or lo s s is la r g e ly or a lto g e th e r

12

-

involuntary* To prevent o vertaxatio n of th is income, the taxpayer is
perm itted to tre a t net gain s r e a liz e d on the d is p o s itio n of r e a l or de­
p re cia b le property as c a p it a l gain s while the net lo s s may be deducted
from ordinary taxab le income at h is option. This generous p ro v isio n w ill
reduce ta x l i a b i l i t i e s in many ca s e s . I t was approved no doubt in the
b e li e f th a t there would be no s u b s ta n tia l ta x avoidance by the device of
s e llin g a s s e ts . Perhaps t h is exp ectatio n was o v e ro p tim istic , since r e f­
erences are already appearing in the fin a n c ia l press d escrib in g the pos­
s i b i l i t y o f decreasing taxes through the use of t h is d ev ice .
3.
C onsolidated income ta x returns are again perm itted fo r normal
and su rtax purposes as w ell as fo r excess p r o fit s ta x purposes, in
a d d itio n a l ta x of 2 percent o f su rtax net income is imposed on corpo­
ra tio n s f i l i n g co n so lid ated retu rn s.
3.
S p e cia l p ro v isio n i s made fo r taxpayers usin g the l a s t - i n f i r s t
out method of v alu in g in v en to ries where such taxpayers have been o b liged
in v o lu n ta r ily to liq u id a te in v en to ries on account o f war shortages.
A redeterm ination o f ta xa b le income in the year o f liq u id a tio n is to be
made l a t e r , at the time of a ctu a l replacem ent, and the p r o fit or lo ss
w ill depend on the replacement c o s t .
4, Tile group o f investment companies e n t it le d to s p e c ia l ta x t r e a t ­
ment was m odified and expanded to include regu lated investment companies
re g is te re d under the Investment Company Act o f 1940 as a d iv e r s ifie d
investment company or a u n it investment tr u s t . Such companies are re­
garded, f o r ta x'p u rp o ses, as a mere pipe lin e through which the earn­
ings o f the company must pass before the shareholder receives h is share
o f the income from investm ents; the companies are not taxed on such
earn ings. The 1942 Act has extended th is conduit theory to in clud e
c a p ita l gains made by the regu lated investment companies. Such gains
are not taxed to the company but are to be included in the shareholder1»
return as c a p it a l g a in s .
5. Begulated p u b lic u t i l i t i e s are perm itted to deduct from th e ir
su rtax net income the amount o f income paid out as dividends on p re fe rred
sto ck . Such p re fe rred stock must be cum ulative, have p r io r claim s before—
any other c la s s of s to ck , and must have been issued p r io r to October 1,
1942. The deduction a p p lie s only fo r purposes o f the 16 percent su rta x .
Numerous other p ro v isio n s of the Bevenue Act o f 1942 were included
la r g e ly or e n tir e ly as a measure -of r e l i e f in making more- accurate the
determ ination o f ta xa b le income of corporations or the income ■sub.Jecp

- 13 to excess p r o f it s ta x . Some important problems o f . ‘b usiness ta x a tio n were,
however, not d e a lt w ith in the 1942 .Act, d esp ite the con sid erable amount
o f study and a tte n tio n they have been given by the Treasury and Congres­
s io n a l committees. Por example, present ta x laws g iv e h ig h ly p r e fe r e n tia l
treatm ent to corp o ratio n s fin an ced through borrowing as ag ain st corpora­
tio n s fin an ced through sto ck issu es*. This problem, although by no means
overlooked, was not so lv ed ; i t s d i f f i c u l t y i s g e n e ra lly recognized*
Conclusion
Most o f the problems o f business u n ce rta in ty in the postwar period
are not crea ted by the ta x laws and cannot be cured by changes in them.
The u n c e r ta in tie s are due to the in e v ita b le f lu x o f business a r is in g from
the te ch n o lo g ica l developments o f the war, to popu lation s h i f t s , to changes
in ta s te s and in t e r e s t s , to the problem o f g e ttin g an industry geared to
the war regeared once more to peace. The ta x laws can p ro vid e, however,
th at only a c tu a l p r o f it s s h a ll be su b ject to the in e v ita b ly heavy wartime
ta x a tio n , thus le a v in g the corp o ratio n i t s c a p it e l unimpaired to fa c e the
postwar p erio d . That id e a l r e s u lt can probably not be achieved in f u l l ;
undoubtedly the levepue A ct o f 1942 has not gone as f a r as i t is p o s sib le
to go; n e v e rth e le s s , i t has made a very g re a t advance in th at d ir e c tio n .
Indeed, the fu tu re h is to r ia n o f our time may be in te r e s te d not so much in
the ta x ra te s o f the 1942 Act as in the e f f o r t s th at were made to e a u a liz e
ta x e s and prevent incane d is to r tio n . i In those e f f o r t s are the im p lica­
tio n s fo r a more p e r fe c t ta x system.
Perhaps one point has become c le a r in the course o f t h is d is c u s sio n .
The ta x a tio n o f business in wartime is not a sim ple m atter r e a d ily d e te r­
minable by the a p p lic a tio n o f a s in g le g e n e ra lly accepted p r in c ip le . There
are a l l so rts o f competing p r in c ip le s , each w ith i t s r a tio n a l o b je c tiv e and
i t s pressure o f in t e r e s t s . There must always be a choice or compromise
between one p r in c ip le and another, between one o b je c tiv e and another. There
is always the danger of doing too much or too l i t t l e , Even r e l i e f fo r tax­
payers can be c a r r ie d too f a r .
This ta x qu estion is not one o f those th in gs th a t ary one can dash
o ff the answer to o v ei n ig h t. Tax problems reou ire d e ta ile d study in the
lig h t o f the many and varyin g a c tu a l s itu a tio n s in which people fin d them­
s e lv e s . The s o lu tio n o f ta x problems req uires above a l l , the cooperation
of every one concerned. We in the Treasury have been happy at the coopera­
tio n shown by the businessmen o f America* We s in c e re ly hope and b e lie v e
th at we can count on i t s co n tin u atio n and i t s growth. On our sid e we have
endeavored to cooperate w ith b u sin ess. I hope t h is d iscu ssio n has in d i­
cated th at our cooperation has not been merely v e r b a l. We s h a ll tr y to do
even b e tte r in the fu tu r e . I t is on mutual cooperation and on mutual
respect and forbearance fo r each o th e r1s views and id eas th a t the hope fo r
continued progress in the sound development o f business ta x a tio n must r e s t .

-o0o-~

(> 3
t n J z A

^

* & -

The^fTreasury Department announced today that remittance!
of United States Postal Money Orders to members of the armed
forces abroad are permiss>feble, provided they are sent through
the Army Post Office, Naval or other service mails.
The ruling was in response to many inquiries received by
the Department by persons desiring to send gifts of money to
servicemen abroad.
Such money orders may be purchased at any United States
Jgost ^ffice by executing regular money order applications,
Treasury officials said.

The Army and Navy have made special

facilities available to servicemen for realizing cash on money
orders in every part of the world in which our forces are
located.
The Treasury Department, at the same time, issued a.
caution against sending currency in view of possible conflict
with the various types of currency controls inaugurated both
in the United States and abroad.

PRESS RELEASE
W ashington
P re s s S e rv ic e
No*
FOR IMMEDIATE RELEASE
____• ■!/. / f
P e rso n s d e s ir in g to send g if t s o f money to s e r v ic e ­
men abro ad have been a s k in g th e T re a s u ry Departm ent in re c e n t
weeks w hether such re m itta n c e s m ay.be e ffe c te d b y U n ite d S ta te s
P o s t a l Money O rd e rs.
In re sp o n se to such in q u ir ie s , T re a s u ry Departm ent
o f f i c i a l s have announced th a t th e re i s no o b je c tio n to sending
U n ite d S ta te s P o s t a l Money O rd ers to members o f th e U n ite d
S ta te s armed fo rc e s ab ro ad , p ro v id e d th a t th e y a re se n t through
th e Army P o st O ffic e , N a va l o r o th e r s e r v ic e m a ils .

Such money

o rd e rs may be p u rch a se d a t any U n ite d S ta te s P o st O ffic e by
e x e c u tin g re g u la r money o rd e r a p p lic a t io n s .

The Army and Navy

have made s p e c ia l f a c i l i t i e s a v a ila b le to servicem e n f o r en­
cashm ent o f money o rd e rs in e v e ry p a r t o f th e w o rld in w hich our
fo rc e s a re lo c a te d .
The T re a su ry D epartm ent c a u tio n e d a g a in s t sen d in g
c u rre n c y in v ie w o f p o s s ib le c o n f lic t w ith th e v a rio u s types o f
c u rre n c y c o n t ro ls in a u g u ra te d both in th e U n ite d S ta te s and abroad.

0O0

U

S

TREASURE DEPARTMENT
Washington*
FOR IMMEDIATE RELEASE,
Wednesday, December 16, 1942.

Press Service
No, 34-63

The Foreign Funds Control of the Treasury Department
announced today that remittances of United States Postal Money
Orders to members of the armed forces abroad are permissible,
provided they are sent through the Army Post Office, Naval, or
other service mails.
The ruling was In response to many inquiries received by
the Department by persons desiring to send gifts of money to
servicemen abroad.
Such money orders may be purchased at any United States
Post Office by executing regular money order applications,
Treasury officials said.

The Army and Navy have made special

facilities available to servicemen for realising cash on money
orders in every part of the world in which our forces are
located.
The Treasury Department, at the same time, issued a cau­
tion against sending currency in view of possible conflict with
the various types of currency controls Inaugurated both in the
United States and abroad.

-oOo-

3 +~6 i
JOE IMMEDIATE RELEASE
Decemher 15. 1942.

The Bureau of Customs announced today preliminary figures shoving the quan­
tities of coffee authorized for entry for consumption under the quotas for the
twelve months commencing October 1, 1942, provided for in the Inter-American
Coffee Agreement, proclaimed by the President on April 1 5 , 1941, as follows:

«
•
Country of
Production

:
:

f
•
Signatory Countries:
Brazil
Colombia
Costa Pica
Cuba
Dominican Republic
Ecuador
El Salvador
Gu&t emala
Haiti
Honduras
Mexico
Nicaragua
Peru
Venezuela
Non*»signatory Countries:
British Empire, except
Aden and Canada
Kingdom of the Netherlands
and its possessions
Aden, Temen, and Saudi
Arabia
Other countries not signa­
tories of the InterAmerican Coffee
Agreement

1/

•
•
Quota Quantity
(Pounds) 1/

1,535.367,083
520.0sH.629
33.019.26H
13,212,917
17,533,713
2H.767.09H
99.680.2SH
88.33H.HH2
H5.H00.298
2,908,617
78,758,056
32.H62.515
H.127,276
61.25H.106
)
)
)
)
)

) 51,653.77«

)
)
)
)
)

Quotas revised.

-0O0-

:
:

•

Authorized for entry
for consumption
As of (Bate)
:
(Pounds)

Dec. 5, 1942
w
N
a
it
H
a
a
a
a
a
a
a
a

«

73.120,392
95.^36,33^
1,262,829
5,404,814
3.79MS5
2,7
941
1 I16,5
f✓✓
7,517,085
5.839,389
12,139,157
991,290
3,204,453
67,38©
2
11,3H7,900

lì,923,808

TREASURY DEPARTMENT
Washington
POI IMMEDIATE RELEASE,
Wednesday, December 16, 1942,

Press Serv ice
No, 34-64

The Bureau o f Customs announced today prelim inary fig u r e s showing the
q u a n titie s o f c o ffe e au th o rised fo r entry fo r consumption under the quotas fo r
the twelve months commencing October 1 , 1942, provided fo r in the In te r American C o ffe e Agreement, proclaim ed by the President on A p r il 15, 1941, as
follow s?
5

Country o f
Production
Signatory C o u n tries;
B r a z il
Colombia
Costa R ica
Cuba
Dominican Republic
Ecuador
E l Salvador
Guatemala
H a iti
Honduras
Mexico
Nicaragua
Peru
Venezuela
Non-^signatory C o u n trie s;
B r it is h Empire, except
Aden and Canada
Kingdom o f the Netherlands
and i t s possessions
Aden, Yemen, and Saudi
Arabia
Other co u n tries notsig n a to r ie s o f the In t e r American C o ffee
Agreement

1/

*

« Quota Quantity s
i (Pounds) 1/ :
♦
_____________*
1,535,367,083
520,084,629
33,019,264
13,212,917
17,533,713
24,767,094
99,680,284
88,334,442
45,400,298
2,908,617
78,758,056
32,462,515
4,127,276
61,254,106
)
)
)
)
)
) * :51f 653,?78
)
)
)
)
)

Quotas re v ise d .
-oOo'

Authorized fo r entry
f o r consumption
As o f (Date) l (Pounds)
Dec. 5 , 1942
it
tr
«
n
tr
it
it
it
n
tt
tr
tt
tr

it

73,120,392
95,436,334
1,262,829
5,404,814
3,794,985
2,716,594
7,517,085
5,839,389
12,139,157
9.91,290
3,204,453
67,380
2

11,347,900

13,923,808

- 3 issu e or on subsequent purchase, and the amount a c tu a lly received either
upon sale or redemption at m aturity during the taxab le year fo r which the
return i s made, as ordinary gain or lo s s *
Treasury Department C ir c u la r No. 418, as amended, and th is
n o tic e , p re scrib e the terms o f the Treasury b i l l s and govern the condi­
tio n s o f t h e ir is s u e .

Copies o f the c ir c u la r may be obtained from any

Federal Heserve Bank or Branch.

c?

ft

- 2 -

Reserve Banks and B r a n c h e s ,fo llo w in g which p u b lic announcement w ill be made
by the Secretary o f the Treasury o f the amount and p r ic e range of accepted
bids*

Those subm itting tenders w ill be advised o f the acceptance or rejec­

tio n th e r e o f.

The Secretary o f the Treasury ex p ressly reserves the right

to accept or r e je c t any or a l l ten d ers, in whole or in p a r t , and h is action
in any such respect s h a ll be f i n a l .

Payment o f accepted tenders at the

p r ic e s o ffe re d must be made or completed a t the Fed eral Reserve Bank in
cash or other immediately a v a ila b le funds on

December 2 3 ,

mm

The income derived from Treasury b i l l s , whether in te r e s t or gain
from the s a le or other d is p o s itio n o f the b i l l s , s h a ll not have any exemption,
as such, and lo s s from the sale or other d is p o s itio n o f Treasury b i l l s shall
not have any s p e c ia l treatm ent, as such, under Fed eral ta x A cts now or here­
a ft e r enacted#

The b i l l s s h a ll be su b ject to e s t a t e , in h e rita n c e , g i f t , or

other e x c ise ta x e s , whether Federal or S t a t e , but s h a ll be exempt from all
ta x a tio n now or h e re a fte r imposed on the p r in c ip a l or in te r e s t thereof by
any S t a t e , or any o f the p o ssession s o f the U nited S t a t e s , or by any local
ta x in g authority#

For purposes o f ta x a tio n the amount o f discount at which

Treasury b i l l s are o r ig in a lly sold by the U nited S ta te s s h a ll be considered
to be in terest#

Under Se ctio n s 42 and 117 (a) ( l) o f the In tern al Revenue

Code, as amended by Sectio n 115 o f the Revenue Act o f 1941, the amount of
discount a t which b i l l s issu ed hereunder are sold s h a ll not be considered
to accrue u n t il such b i l l s s h a ll be s o ld , redeemed or otherwise disposed
o f , and such b i l l s are excluded from co n sid e ratio n as c a p ita l assets*
A cco rd in g ly , the owner o f Treasury b i l l s (other than l i f e insurance com­
panies) issu ed hereunder need in clud e in h is income ta x return only the
d iffe re n c e between the p ric e paid fo r such b i l l s , whether on o rig in a l

HJRT M
ngton

TREASURY DEPARTMENT
Washington

The. Seci

EOR RELEASE, MORNING NEWSPAPER,

F r id a y . December 18 f 1942_______ •

rs for {
issued
of th is

The Secretary o f the tre a s u r y , "by th is p u b lic n o tic e , in v ite s tenders
fo r $

6QQ.OOQ.QQO

91

% o r thereabouts, o f

- day T re a su ry b i l l s ,

December 23. 1942

nterest,

M e

t

on a discount b a s is under com petitive b id d ing .
be dated

to be issued

The b i l l s

, and w i l l mature

of t h is s e rie s w ill

inations

March 24. 1943

}, 000 (me

when the face amount w i l l be payable w ithout in t e r e s t .

They w i l l be issued in

bearer form o n ly , and in denominations of $ 1 ,0 0 0 , $ 5 ,0 0 0 , $ 1 0,000, $100,000,
$ 5 00,000, and $ 1 ,0 0 0 ,0 0 0 (m a tu rity v a lu e ).

up t
day,
frea
j milt

Tenders w i l l be received at Federa l Reserve Ranks and Branches up to the 1the

Prac
1---

vV&X*

c lo sin g ho u r, two oTclock x>. m ., E a ste rn SfaeffsdjDDd tim e, Monday, December 21, 194L_ 'j the
J
will
Tenders w i l l not be received at the T re a su ry Department, Washington. Each tender jtion

lenders v
the clos
lecember
iry Depar
lie of fa
.sis of 1
ons may
Inted fo
| suppli
herefor,

must be f o r an even m u ltip le of $ 1 ,0 0 0 , and the p ric e o ffe re d must be expressed

anders w
¡and trus
on the b a s is of 100, w ith not more than three decim als, e. g ., 9 9 .9 2 5 . Fractions Heal« |s in in v
j secotii anied by
mav not be used. I t i s urged that tenders be made on the pointed forms and for- p ills applied
presr snaranty
warded in the sp e c ia l envelopes which w i l l be sup p lie d by Federal Reserve Banks

mediate:

o r Branches on a p p lic a tio n th e re fo r.
Tenders w i l l be received w itho u t deposit from incorporated banks and
t r u s t companies and from re sp o n sib le and recognized dea lers in investment securi
t ie s .

Tenders from o th e rs must be accompanied by payment of

2 percent of the

face amount o f T re a su ry b i l l s applied f o r , u n le ss the tenders are accompanied hy

I at tt
Federal
iwnou °eusent w:
Secre

3Lf'~6 J

py of tj

!r re l | t any c

to an such res
at th

:68eÄ V

y J*
* * 23, lg

an e xp ress guaranty o f payment by an incorporated bank or t r u s t company.
Immediately a ft e r the c lo sin g hour, tenders w i l l be opened at the ?eder

prii
p i be a(

.65

TREASURY DEPARTMENT
Washington

FOR RELEASE, MORNING NEWSPAPIRS,
Friday, December 18, 1942,_____
1 2

/1

7 / 4 2

'

The. Secretary of the Treasury, by this public notice, invites
tenders for $600,000,000, 'or thereabouts, of 9 ^-dayTreasury bills,
to be issued on a discount basis under competitive bidding.

The

bills of this series will be dated December 23, 1942, and will
mature March 24, 1943, when the face amount will be payable with­
out interest.

They will be issued in bearer form only, and in

denominations of $1,000, $5,000, $10,000, $100,000, $500,000 and
$1,000,000 (maturity value).
Tenders will be received at Federal Deserve Banks and Branches
up to the closing hour, two o’clock p,m,, Eastern War time, Mon­
day, December 21, 1942, Tenders will not be received at the
Treasury Department, Washington, Each tender must be for an even
multiple of $1,000, and 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
i the printed forms and forwarded in the special envelopes which
will be supplied by Federal Reserve Banks or Branches on applica­
tion therefor,
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 pajmtent of 2 percent of the face amount of Treasury
bills applied for, unless the tenders are accompanied by an ex­
press 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
k announcement will be made by the Secretary of the Treasury of the
I amount and price range of accepted bids. Those submitting ten1 ders will be advised of the acceptance or rejection thereof. The
Secretary of the Treasury expressly reserves the right to accept
|l or reject any or all tenders, in whole or in part, and his action
1in any such respect shall be final. Payment of accepted tenders
U &t the prices offered must be made or completed at the Federal
| Reserve Bank in cash or other immediately available funds on
I December 23, 1942,
3 4 *6 5

(Over)

- 'a -

,TJae income, derived, from Treasury bills, whether interest or
gain from thF'sale or othsi* disposition of the bills, shall not
have any exemption, as such, and loss from the sale or other dis- |
position of Treasury bills shall not have any special treatment, J
as such,, under.. Federal tax, Acts now, or hereafter enacted. The
j
bills Shall be subject to estate, inheritance, gift, or other
excise.taxes, whether. Federal or State, but shall be exempt from
all taxation now or hereafter imposed oh the principal or interest]
thereof by any State, or any of the possessions of the United
States, or by any local taxing authority. For purposes of taxa­
tion the amount; of discount, at which Treasury bills are originally!
sold"by the" United States shall be considered to be interest.
Under Sections 42 and.117 (a) (1) of the Internal Revenue Code,
as amended by Section' 115 of the Revenue Act of 1941, the amount j
of discount at which bills issued hereunder are sold shall not
be considered to accrue until such bills shall be sold, redeemed
or otherwise disposed of, and such bills,are excluded from con­
sideration as" capital assets. Accordingly, the owner of Treasury [
bills (other than life insurance companies) issued hereunder need
include in his income tax return only the difference between the
price paid.., for such, bills, whether on original issue or on sub­
sequent purchase, and the amount actually received either upon
sale or redemption at maturity during the taxable year for which
the return is made, as ordinal gain or loss?
Treasury „Department Circular Do. 418, as amended, and this
notice, prescribe the terms of the Treasury bills and govern the
conditions of their issue.
Copies of the circular may be ob­
tained from any Federal. Reserve Bank or Branch.

-oOo-

INSOLVENT NATIONAL BANKS LIQUIDATED AND FINALLY CLOSED
_________DURING THE MONTH OF NOVEMBER. 1942_________

Total
Disbursements
to Creditors
Including
Offsets Allowed

Percent
Dividends
Declared
to all
Claimants

Capital
Stock at
Date of
Failure

Cash, Assets,
Uncollected Stock
Assessments, etc.,
Returned to
Shareholders

Date of
Failure

Pelham Nat*l Bank
Pelham, N. Y l/

7-21-33

First Nat*l Bank
Centerville, S. D.

12-19-36

362,249

54.63

87,500

-0-

First Nat*l Bank
Rockwood, Tenn* 1/

10-30-34

609,650

43.85 2/

80,000

-0-

1/
2/
2/

$

2,007,337

44.1

1

Formerly in conservatorship*
Including dividends paid thru or by purchasing bank*
?• Pi I- c. appointed receiver in accordance with banking act of 1933

200,000

011

Name and Location of Bank

TREASURY DEPARTMENT
Comptroller of the Currency
Washington

.

FOR RELEASE, MORNING NEWSPAPERS

If

PRESS SERVICE

During the month of November, 1942, the liquidation
of three insolvent national banks was completed and the affairs
of such receiverships finally closed.
Total disbursements, including offsets allowed, to
depositors and other creditors of these three receiverships,
amounted to $3>059>286, while dividends paid to unsecured
creditors amounted to an average of 4.6,43 percent
claims.

of their

Total costs of liquidation of these receiverships

averaged 10.58 percent of total collections from all sources,
including offsets allowed.
Dividend distributions to all creditors of all active
receiverships during the month of November, amounted to #935,630.
Data as to results of liquidation of the receiverships finally
closed during the month are as follows:

T R EA S U R Y DEPARTM ENT.
C o m p tr o lle r o f th e C u rre n c y
W a s h in g to n

POR

R E L E A S E , M O R N IN G - N E W S P A P E R S ,
Decem ber 1 9 , 19 ^2

D u r in g
th re e
o f

in s o lv e n t

such

and

a m o u n te d

to

n a tio n a l

a m o u n te d

in c lu d in g

1

19 ^ 2 ,

banks

c o m p le te d

fin a lly

o f

o f

liq u id a tio n
and

th e

o f

a ffa ir s

o ffs e ts
th re e

d iv id e n d s

a ve ra g e

o f

to ta l

to

depos­

r e c e iv e r s h ip s ,
p a id

Ay
o f

a l l o w e d ,'

to

u n s e c u re d

p e rc e n t

th e s e

c o lle c tio n s

o f

th e ir

r e c e iv e r s h ip s
fro m

a ll

s o u rc e s ,

a l l o w e d T*

d u rin g
as

th e s e

liq u id a tio n
o f

th e

c lo s e d ,

w h ile

an

w as

in c lu d in g

d is tr ib u tio n s

D a ta

fin a lly

to

p e rc e n t

o ffs e ts

r e c e iv e r s h ip s

2& 6 *

c o s ts

0

D iv id e n d

1 9 3 5 * 6 3 0 ,-

N o ve m b e r,

c re d ito rs

$ 3 j Q 59*

T o ta l

a ve ra g e d

s h ip s

o f

d is b u rs e m e n ts ,
o th e r

c re d ito rs
c l a i m s .-

m o n th

r e c e iv e rs h ip s

T o ta l
ito rs

th e

P re s s S e rv ic e
N o ; 3 ^ -6 6

to

c lo s e d

th e

to

a ll

m o n th

r e s u lts
d u p in g

o f
o f

th e

c re d ito r s
N o ve m b e r/

liq u id a tio n
m o n th

a ré

as

o f

a ll

a c tiv e

a m o u n te d
o f

th e

to
r e c e iv e r ­

fo llo w s *

INSOLVENT NATIONAL B A M S LIQUIDATED AND FINALLY CLOSED
DURING- THE MONTH OF NOVEMBER, 19^2__________

Percent
Dividends
Declared
to all
Claimant s

2..007,3«7

kk*l

of Bank
Name and Location <

Date of
Failure

Total
Disbursements
to Creditors
Including
Offsets Allowed

Pelham Nat*l Bank
Pelhtufl, N. Y. 1/

7-21-33

$

First Nat*l Bank
Centerville, S. D,
First Nat*$nBank
Rockwood, Tenn,

I/
2/

3/

2

/

1 2

-1 9

10

- 3 0 -3 ^

-3 6

3 6 2

,2 ^ 9

6 3 9 ,6 5 0

5

U.6

Capi tal
Stock at
Date of
Failure

$

3

U 3 .S5

2

/

Formerly 3n conservatorship.
Including dividends paid thru or by purchasing hank*
F. D.- I. C* appointed re ce iv e r in accordance w ith hanking a c t o f 1933*

200,000

Cash, Assets,
Uncollected Stock
Assessments, etc.,
Returned to
Shareholders

$

-0-

37,500

-0-

80,000

-0-

- 1 Fu n d « b o rro w e d t o
on th e

d iffe re n t

a n d in c lu d in g D e ce m b e r 1 9 fr o m a l l

so u rc e s,

Is s u e s , a re t

Fu n d s fro m b a n k in g s o u rc e s —
Tre a s u ry b ills

*

«

$

*

2 ,05S,000,000

1 - 3 / l i T re a s u ry bonds

7/6$ C e r t i f i c a t e

.

500 , 000,000

.

2 .0 3 0 - O O P .O O P *

$ 1 , 588 , 0 0 0 ,0 0 0
Fu n d s fro m

n o n -b a n k in g s o u rc e s

7/6$ C e r t i f i c a t e

.

.

•

.

1 - 3 /4# T re a s u ry b o n d

•

«

•

2 - 1/2 # V ic to r y bend«

•

•

«

T a x n o te «»

.

1 .2 9 1 .0 0 0 .

809 ,0 00 ,00 0

2.528.000.

........................................................

S a v in g s b o n d s

(S ,

F & G)

000

000

1 8 0 ,0 0 0 ,0 0 0

•

T o ta l

$ 1 0 ,2 2 9 ,0 0 0 ,0 0 0

« T e n ta tiv e

The Decem ber d r iv e
b o u g h t th e

firs t

w a s o p e n e d b y P r e s i d e n t R o o s e v e l t , w hen he

$ 1 ,0 0 0 V i c t o r y t w o - a n d - o n e - h & l f f r o m

a n d d e c la r e d t h a t o u r d o l l a r s M u s t b e m ade « f i g h t i n g
in g

th e m i n

a s s ig n e d t h e

G o ve rn m e n t s e c u r it ie s «
ta s k

d o l l a r s ” b y In v e s t­

V i c t o r y Fu n d o r g a n is a tio n ess

o f p la c in g w it h i n d i v i d u a l i n v e s t o r s , b u s in e s s fir m s ,

in s t it u t io n s a n d banks th e th re e
b e r 2 3 , a n d a ls o

T o th e

S e c r e t a r y M o r g e n th a u ,

ta x

s e r ie s

o n w h i c h b o o k s w i l l c l o s e Decem ­

s a v in g s n o te s a n d S e r ie s

F a n d Q s a v in g s b o n d s.

Continually available, it was emphasized, are the various series of
Treasury tax savings notes and savings bonds.
All issues, including Treasury bills, are included in the
flotations from which the Treasury hopes to raise the total to
$11,000,000,000 or more in December.

Secretary Morgenthau expressed

the hope that year-end bonuses will be invested in securities of the
United States Government.
The extent to which previous records already have been ex­
ceeded in the December drive ie indicated by comparison with the
largest loan heretofore floated, which was the $6,964,581,100 Fourth
Liberty loan raised in three weeks by the United States Treasury in

1918.
Together with tax and other receipts of about $2,500,000,000,
the estimated $11,000,000,000 of borrowing would draw into the
Treasury a total of about #13,500,000,000 in this single month of
December.
The Treasury figures show that the drive is successful not
only because of the amount involved, but also because of heavy pur­
chases of securities by others than commercial banks.

One of the

principal aims of the drive was to borrow a large proportion of the
funds from non-banking sources, since that is the soundest and
least inflationary method of Treasury borrowing.

Of the total sales

of $10,229,000,000, to the close of business December 19, about
$4,588,000,000, or 45 percent was to commercial banks, and about
$5,641,000,000, or 55 percent was to non-banking investors.

-

2

-

Secretary Morgenthau revealed heavy subscriptions by commercial
banks to the 7/8 percent certificates of indebtedness on which books
were open to these institutions for three days last jweek.

Allotments

to the banks were about #2,030,000,000, and these funds, together with
f

sums realized on the continuing sales of all Issues to others, gave
the Treasury figures the lift which carried them first to the $9,000,000,000
goal of the drive, and then to the $10,000,000,000 level.
Reports received from the Federal Reserve Banks show that sub­
scriptions received from commercial banks for their own account to the
issue of 7/8 percent Treasury certificates of indebtedness of Series
3-1943 aggregated $3,360,000,000.

Subscriptions in amounts up to and

including $100,000, totaling about $270,000,000, were allotted in full.
Subscriptions in amounts over $100,000 were allotted 57 percent, but
not less than $100,000 on any one subscription, with adjustments,
where necessary, to the $1,000 denomination.
Although results of the drive are exceeding expectations,
Secretary Korgenthau urged redoubled efforts by the Victory Fund
organization and heavier purchases by investors, as a means of in­
suring that the next drive can be postponed until late March or early
April, 1943.
Issues to which further subscriptions are urged up to the
close of business December 23 by others than commercial banks, for
their own account, are Victory two-and-one-half1s due December 15,
1968 and callable December
1948, and

7/8 percent

15, 1963J 1-3/4

percent bonds due June 15,

certificates of indebtedness due December 1, 1943*

TREASURY
W ashington

m u r e l e a s e , mrnmi ®m $p m m $ p
today. Secaabw ,21. :M 2 .

Press Service

3

12/19/42

All financial records of history have been shattered In the Decem­
ber Victory Fund Drive of the Treasury, which already has enlisted over
110,000,000,000 of borrowed funds in the war effort, or $1,000,000,000 more
than the $9*000,000,000 nark set at the beginning of the campaign, Secretary
Horgenthau announced today.

The sights have been raised, he added, in the

hope that the borrowing can be Increased to $11,000,000,000 by the end of
the month.
"I am deeply gratified by the superb public response to the finan­
cial needs of our country in this ear1* Secretary Morgenthau said,

"This 1«

the sort of news that Axis leaders dread to hear and that they will not per­
mit their misguided peoples to know.
our associates of the United Rations*
fighting the good fight*

It is the sort of nows that inspires
It will reassure all soldiers who axe

The speedy borrowing of the tremendous sum is a

reflection of our American determination to win the war and win it quickly.
"Much more than $10,000,000,000 will be needed, and I urge every
American to dig deep into his pockets and buy more of the securities that
will remain available until December 23, and the tax notes and savings bonds
that will continue to be on sale.

The funds are an indispensable means for

making available the guns and ships, tanks and plants, with which the arsed
forces of the United Rations will achieve victory.
"The response by investors has been stimulated in large part by
the eager participation in the drive of many thousands of volunteer workers
drawn fro» the banking, securities, insurance and other fields.
workers have well earned the thanks of the nation. *
(To telegraphers

Hors to follow this afternoon)

These

TR EA S U R Y D EPARTM ENT
W a s h in g to n
fo r

, m o r
Decem ber

r e l e a s e

M onday,

12-19-52

n in g

2 1 ,

fin a n c ia l

Decem ber V ic to r y
e n lis te d
$1,

o ve r

$

o f

s ig h ts

b o r r o w in g

o f

D r iv e

h is to r y

o f

1 0 , 0 0 0 , 0 0 0 ,0 0 0

th e

have
can

re c o rd s

Fun d

0 00 , 0 0 0 ,0 0 0

b e g in n in g
The

P re s s S e rv ic e
N o . 3 5 -6 7

,
1 9 5 2 » _________
n e w s p a p e r s

'

A ll

or

-

m o re

th a n

c a m p a ig n ,
been

be

o f

th e

b o rro w e d
$

he

to

been

T re a s u ry ,

s h a tte re d

w h ic h

fu n d s

9 , 0 0 0 , 0 0 0 ,0 0 0

S e c re ta ry

r a is e d ,

in c re a s e d

th e

have

in

added,

in

th e

$ 1 1 ,0 0 0 ,0 0 0 ,0 0 0

has

th e

e ffo r t,

b y

w ar

se t

a t

announced

hope

th e

a lr e a d y

m a rk

M o rg e n th a u

in

th a t,

th e

th e
to d a y .

th e

end

o f

th e

m o n th .
" I

am

d e e p ly

fin a n c ia l needs
s a id .
"T h is Is

g r a tifie d

b y

th e

su p e rb

o f o u r c o u n try In th is
th e s o r t o f new s th a t

p u b lic

w ar

Axis

re s p o n s e to

th e

S e c r e ta r y M o rg e n th a u
le a d e rs d re a d to h e a r

a n d t h a t t h e y w i l l n o t p e r m i t t h e i r m i s g u i d e d p e o p * ® ® 't °
I t Is th e s o rt; o f new s t h a t in s p ir e s o u r a s s o c ia te s o f th e U n ite d
N a tio n s ,
I t w i l l re a s s u re a l l s o ld ie r s w ho a re fig h t in g th e g ood
fi£ h t
T h e s p e e d y b o r r o w i n g o f t h e tr e m e n d o u s sum i s a r e f l e c t i o n
o f^ o u r A m e r ic a n d e t e r m in a t io n t o w in th e w a r a n d w in i t q u i c k l y .

e ve ry

« M u c h m o r e t h a n $ 1 0 ,0 0 0 ,0 0 0 ,0 0 0 w i l l b e n e e d e d , a n d
A m e r ic a n t o d i g d e e p i n t o h i s p o c k e ts a n d b u y m o re

s e c u r it ie s t h a t w i l l re m a in a v a i l a b l e u
ta x n o te s a n d s a v in g s b o n d s t h a t w i l l c
The fu n d s a re a n in d is p e n s a b le m eans f o
guns and s h ip s , ta n k s and p la n e s , w ith
th e

by

U n ite d

w ill

a c h ie v e

n t il D ecem ber 23» an d th e
o n tin u e to
r m a k in g a v a i l a b l e tn e
w h ic h th e a rm e d fo r c e s o f

v ic to r y .

«T h e re s p o n s e b y in v e s to r s h a s b e e n s tim u la te d in la r g e
th e e a g e r p a r t ic ip a tio n
in th e d r i v e o f m any th o u s a n d s o f

v o lu n te e r
and o th e r
th e

N a tio n s

I u rg e
o f th e

w o rk e rs
fie ld s .

d ra w n
These

fro m th e b a n k in g ,
w o rk e rs h a ve w e ll

s e c u r itie s ,
e a rn e d th e th a n k s

p a rt

o f

n a t i o n .*
S e c re ta ry

M o rg e n th a u

c ia l b a n ks to
th e 7 / S
w h ic h b o o k s w e r e o p e n

r e v e a le d

heavy

s u b s c r ip tio n s

by

p e r c e n t c e r t i f i c a t e s o f In d e b te d n e s s
to th e s e in s t it u t io n s
fo r th re e d a ys

c o m m e r­
on
la s t

- 2 -

Lit

la,

Allotments to the banks were about 12,030,000,000, and these

sx sw&

5

¡themem s t ° t o the I9,00?000,000 goal of the drive, and then to the
110,000,000,000 level.
Renorts received from the Federal Reserve Banks show that subh he pe^iqU-V aegreirated $3,360,000, 000,

Subscriptions in amounts

K l o t t M 1» f»U. Sub,orlptior.. lj . ^ g t . m
allotted 57 percent, but not less than 1100,0!30 ,
o in|
scriptlo$, with adjustments, where necessary, to v™* ***
finatioh.

denom_

Although results of the drive are exceed
i« g a n U a t i o r f ^ K
wring that the next drive can be postponed until late March or
1 early April 19^3*
*

tn which further subscriptions are urged up to

i ^n^hfjsiness December 23 by others than commercial banks, for
close of business vfomopr
iwn-and-one-half1s due December 15»
their own acc°u»t, are Victory
1-3/h percent bonds due June 15#
tqLu$ aand°7 /^acercentecertiflcates of^indebtedness due December 1,
Jlig* "contlnually^vallable. It was emphasized, are the various
series of Treasury tax savings notes and savings bonds,.
All issues, including Treasury bills, are included In the
flotations from which the T^ ^ “^
op®f0^ tari L S enthau ex!
ties of the United States (Government.

|. A “.£ sw?a iSKiE’H 'Eni'SriSX
I

Together with tax and other receipts of about |2,5°°'0°°;000'

Treasurymattotfl^of0about'$13,500^ 000°000^ 1n this single month Of
I December,

9

)

*

3

-

Tfae T r e a s u r y f i g u r e s s h o w t h a t t h e d r i v e i s
s u c c e s s fu l n ot
o n ly b e c a u s e o f t h e a m o u n t i n v o l v e d , b u t a ls o b e c a u s e o f h e a v y p u r ­
chases o f s e c u r i t i e s b y o th e r s th a n c o m m e rc ia l b a n k s *
One O f th e
p r i n c i p a l a im s o f t h e d r i v e w as t o b o r r o w a l a r g e p r o p o r t i o n o f th e
fu n d s f r o m n o n - b a n k i n g s o u r c e s , s i n c e t h a t i s
th e s o u n d e st and
le a s t i n f l a t i o n a r y m e th o d o f T r e a s u r y b o r r o w in g .
O f th e
t o t a l s a le s
of $ 1 0 ,2 2 9 ,0 0 0 ,0 0 0 , t o t h e c lo s e o f b u s in e s s D e c e m b e r 1 9 , a b o u t
I * * , 588 , 0 0 0 , 0 0 0 , o r 45 p e r c e n t w a s t o c o m m e r c i a l b a n k s , a n d a b o u t
§ 5 , 5 4 1 , 0 0 0 , 0 0 0 , o r 55 p e r c e n t w a s t o n o n - b a n k i n g i n v e s t o r s .
Fund s b o rro w e d to and in c lu d in g
on t h e d i f f e r e n t i s s u e s , a r e :
Funds

fro m

b a n k in g

Tre a su ry
1-3 /4 #
7/8#

sou rces

b ills

,

Tre a su ry

.

Decem ber

fro m

.

7/8#

n o n -b a n k in g

C e r tific a te

1 - 3/4#

Tre a su ry

2 -1/2#

V ic to ry

Ta x

000

2 .0 3 0 .0 0 0 .

000»

5 8 8 , 0 0 0 , 000

sou rces

1,294,000,000

......................................
bond

bond

.

.

.

.

8 0 9 ,0 0 0 ,0 0 0

.

.

.

.

2 , 528, 000,000

.

4 8 0 ,0 0 0 ,0 0 0

n o t e s ...............................................

S a v in g s

bonds

( E ,

sou rces,

2 . 058. 000.
$

Funds

a ll

5 0 0 , 0 0 0 ,0 0 0

$

.

.

fro m

—

bonds

C e r tific a te

19

F

&

G )

,

30. 000,000

.

4 i , O T 7 5 üö
.

Total

$10,

2 2 9 , 0 0 0 ,0 0 0

♦ T e n ta tiv e

T h e D e c e m b e r d r i v e was o p e n e d b y P r e s id e n t R o o s e v e lt , w hen h e
b o u g h t t h e f i r s t $ 1 ,0 0 0 V i c t o r y t w o - a n d - o n e - h a l f fr o m S e c r e t a r y
M o rg e n th a u , a n d d e c la r e d t h a t o u r d o l l a r s m u s t b e m ade ” f i g h t i n g
d o l la r s ” b y i n v e s t i n g th e m i n G o v e rn m e n t s e c u r i t i e s *
To th e V ic to r y
[Fu n d o r g a n i z a t i o n w a s a s s i g n e d t h e t a s k o f p l a c i n g w i t h i n d i v i d u a l
in v e s to rs , b u s in e s s fir m s ,
in s t it u t io n s and ban ks th e th re e s e rie s
on w h i c h b o o k s w i l l c l o s e D e c e m b e r 2 3 » a n d a l s o t a x s a v i n g s n o t e s
and

S e rie s

F

and

0

s a v in g s

bonds

.

—0 O0 —

j

D is t r ic t s
No,

O ctober 31
Amount

■JJ.

¿¿rf*
Ko\
--

Mr'

"r

November 30
/
Amount

I
I

/
1
/
1
295 , 980,000

V

No.

December 19
j
Amount !

250

4 6 l,ll6,4S 5|

Boston

169

292 , 080,000

¡1 72

New York

500

3 ,2 4 3 ,3 2 0 ,1 3 9

501

\\ 3 ,4 2 8 /4/ 6 0 ,1 3 9

656

4 , 3 1 7 , 176,621

P h ila d e lp h ia

299

324 , 510,150

/ 305

V 3 3 5 ,7 1 0 ,1 5 0

431

407 , 812, 23!

Cleveland

191

325 , 120,000

426

557,784,9«

1 73

1 8 1 , 509,500

334

321 , 232, 4!

2 0 3 )2 6 2 ,8 5 0
\

402

282,021,83«

842 , 6^ 9,800 j

566

1,059,188,285!

| 273

241 , 862, 73s

1 1 7 ,8 1 8 ^ 7 5 0

! 949
1

748,033,9 50

1 7 3 ,5 4 9 ,^ 2 5
1

[ 585

232 , 733,760

289

310,428,485

99

415.537.8001

1 j
6 ,6 3 6 ,3 8 7 ,8 1 4 \ 5,2 6 0
J I

9 ,3 5 4 ,9 2 9 ,6 6 4 .

Richmond

295

1 9 7 ,2 6 0 ,3 5 0

Chicago

453

7 3 2 ,0 1 0 ,5 5 0

3 t. Louis

181

1 176
s
308

235

7 9 ,2 8 4 ,2 0 0

Kansas C ity

439

1 7 3 ,3 9 3 ,0 2 5

D a lla s

230

1 9 4 ,0 8 7 ,0 0 0

/

j

/
/

464

1

/

j1 185 /

1 6 9 ,5 7 7 ,8 0 0

M inneapolis

p o , 2 70 ,000 I

203

I

Atlanta

|

j 44/
2$3

3 1 6 .7 6 0 .8 0 0

1

1

f jiritt a T o

5>253

6 ,2 2 8 ,9 1 3 ,5 1 4

1 9 0 ,5 ^ ,3 0 0
\

3 4 5 .5 0 1 .8 0 0

r M

1

1

1 9 4 ,9 3 2 , obo !

f

San Francisco _ &

\

j

2 6 7, t
.1

j

/ 186 , 589,500

i

(

,342
wjS

—

/fh

TREASURY DEPARTMENT
IN T E R -O F F IC E C O M M U N IC A T IO N
D ATE

TO
FRO M

Secre ta ry Morgenthau announced today th a t S p e c ia l Depositaries
nisi
w <UAo f the Treasuiy
5,260 on December 1 9 j* iK 4 A p v M fa i
xj r
$9,354,929,664 o f Government d e p o s its .
.

.

These figures compare w ith 3,253 aepositaries^ifeldS^an
A
aggregate o f $6,228,913,514 on l a s t October 31, th e in crea se being due to a
'ss^o_increase these d e p o s ita r ie s ,
s p e c ia l dffort/^conducted by th e ' Treasury I n cooperation w ith the Federal
Reserve System .
In order to keep the funds ra ise d by s a le o f Government
s e c u r it ie s in the communities where ra ise d u n t il a c t u a lly needed to meet
_ J
n
"£ &
Federal payments, Hffr^ifnnpnitiMiiJasked the Federal Reserve Banks to

y&c

y

c ir c u la r iz e the banks In thei r d i s t r i c t s w ith a view to having them Q u a lify
fo r use o f the «War Loan Accounts« as S p e c ia l D e p o s ita rie s .

Those taking

advantage o f th is method o f p a r tic ip a tin g in Treasury fin a n c in g are thus able
to r e ta in the proceeds o f the s a le s o f s e c u r it ie s subscribed fo r th e ir own
account and those o f th e ir customers u n t il c a lle d by the Treasury.

V vd U

The number o f S p e c ia l D e p o s ita rie s, w ith

QlAjj *JF\s

on October 31 and as of December 19, are given by Federal Reserve D is tr ic ts

in the ta b le th a t follo w s*

TREASURY DEPARTMENT
W ashington

Press Service
No. 34-68

FOR RELEASE, MORNING NEWSPAPERS,
Tuesday« December 2 2 ,_1 942«-.------.

Secretary ltorgenthm

S T ^ ^ i S T * “

^JSiTtTZlT^A,929,664 o f Government d e p o s its .

These fig u r e s compare'with 3,253 d e p o sita rie s
,
¿v/- oort q *i q cn/ on l a s t October 31» tne m credbe ucltlb
d r t f f S c i L l f f o r t t o ’ L c r e a s e th ese d e p o s it a r ie s , conducted b y
T ? e a s w In cooperation w ith the Fed eral Reserve System.

Z

in order to keep the funds r a is e d b y s a le *
ft£ 5 i ’
in the communities where
^ ^ „ ^ f ^ S e r ^ B^nks to c ir c u la r iz e
a l l ^ t f K g 5 them q u a lify fo r use
^ % u ^ Vrar Loan Accounts» as S p e c ia l D e p o s ita r ie s , ¿hose takin g
advantage o f t h is method of ^ f / ^ ^ f f ^ T S - r i t i ^ S b a S b c d
f o r Sth e ir ^ " « o S n t ^ T o s e

o f th e ir c u s t o m s u n t i l c a lle d by the

Treasury.
The number of S p e c ia l D e p o s ita r ie s , w ith the ai ? Qn^ ^
q u a lifie d to hold on October 31 and as o f ^com ber 19, are given by
Federal Reserve D is t r ic t s in the ta b ic th a t fo llo w s :

D is t r ic t s
Boston
New York
P h ila d e lp h ia
Cleveland
Richmond
A tla n ta
Chicago
S t . Louis
M inneapolis
Kansas C ity
D a lla s
San Francisco
TOTALS

No.

October 31
Amount

No.

December 19
Amount

169
500
299
191
173
295
458
181
235
439
230
__8 2

fp ' 292 >080,000
3 ,2 4 3 ,3 2 0 ,1 3 9
3 2 4 ,5 1 0 ,1 5 0
325 , 120,000
1 8 1 ,5 0 9 ,5 0 0
1 9 7 ,2 6 0 ,3 5 0
732 ,0 1 0 ^ 5 5 0
1 6 9 .5 7 7 .8 0 0
79 ,2 8 4 ,2 0 0
1 7 3 ,3 9 3 ,0 2 5
1 9 4 ,0 8 7 ,0 0 0
3 1 6 .7 6 0 .8 0 0

250
656
431
426
334
402
566
273
949
585
289
99

$ '4 6 1 ,1 1 6 ,4 8 5
4 ,3 1 7 ,1 7 6 ,6 2 4
4 0 7 ,8 1 2 ,2 3 5
5 5 7 ;7 8 4 ,9 8 5
3 2 1 ,2 3 2 ;4 8 5
-2 8 2 )0 2 1 )8 3 5
1 , 059 ) 188)285
241 ) 862,735
7 4 8 ,0 3 3 ,9 5 0
2 3 2 ,7 3 3 ,7 6 0
3 1 0 ,4 2 8 ,4 8 5
4 1 5 .5 3 7 .3 0 0

3,253

0 6 ,2 2 8 ,9 1 3 ,5 1 4

5 ,2 6 0

$ 9 ,3 5 4 ,9 2 9 ,6 6 4

0O0

T R E A S U S I D EPA RTM EN T
W a s h in g to n
FO R R E L E A S E , M ORNING N E W SP A PE R S
T u e sd a y . D ecem b er 2 2 * 1 9 4 2 .

Press Service
6 8

T h e S e c r e t a r y o f th e T r e a s u r y a n n o u n ce d l a s t e v e n in g t h a t th e te n d e r s f o r

w ii- B
W

The Sec:

tenders 1

1 6 0 0 ,0 0 0 ,0 0 0 , o r th e r e a b o u ts , o f 9 1 -d a y T re a s u r y b i l l s t o b e d a te d D ecem b er 2 3 , 1942,

I* to be c

a n d t o m a tu r e M a rch 2 4 , 1 9 4 3 , w h ic h w e re o f f e r e d o n D e ce m b e r 1 8 , w e r e o p e n e d a t th e

|ch were of

F e d e r a l R e s e rv e B an k s o n D ecem b er 2 1 «

jerve Banks

T he d e t a i l s o f t h i s is s u e a r e a s fo llo w s s

The iota.

T o ta l a p p lie d f o r ~ 8 1 ,2 2 0 ,4 0 6 ,0 0 0
T o ta l a c c e p te d
6 0 0 ,7 0 9 ,0 0 0

Total ap]
Total act

R an ge o f a c c e p te d b id e t
h ig h
lo w
A v erag e p r ic e

of

- 99*926 E q u i v a l e n t r a t e o f d i s c o u n t a p p r o x . 0,293% p e r annum
- 99*908
»
»
<t
n
n
0*364# M
«
- 99*908+
*
*
»
•
«
0*363# *
•

(92 p e r c e n t o f t h e a m o u n t b i d f o r a t t h e l o w p r i c e w a s a c c e p t e d * )

F e d e ra l R ese rv e
p istrict

T o ta l
A p p lie d F o r

T o ta l
A c c e p te d

B o s to n
N ew T o r k
P h ila d e lp h ia
C le v e la n d
R ic h m o n d
A tla n ta
C h ica g o
8t . L o u i s
U in n e a p o lis
K an sas C ity
D a lla s
San F ra n c is c o

* 3 2 , 265,000
7 8 9 ,6 5 7 ,0 0 0
3 5 ,9 0 6 ,0 0 0
3 5 ,6 5 0 ,0 0 0
2 1 ,7 6 7 ,0 0 0
1 0 , 692,000
1 5 5 ,6 8 7 ,0 0 0
2 1 , 042,000
1 6 ,8 6 2 ,0 0 0
1 2 , 268,000
1 0 ,9 9 0 ,0 0 0
7 7 .6 2 0 .0 0 0

8 2 1 ,0 4 3 ,0 0 0

TOTAL

1 1 ,2 2 0 ,4 0 6 ,0 0 0

3 1 9 .9 7 8 .0 0 0

price
[percent 6f

Heservi

20 ,187,000
20 ,092,000

1 2 .4 6 6 .0 0 0
5 .9 5 8 .0 0 0
1 0 5 .4 0 1 .0 0 0
12 .362.000
15 ,389,000
10 ,464,000

9 .4 8 5 .0 0 0
,,4 7 .8 8 4 .0 0 0
8 6 0 0 ,7 0 9 ,0 0 0

York
Neigh

[eland

FOR RELEASE, MOHRIH# IfOTSPAPBRS*
Tuesday, December %>» 194SU
k p-2'1-42
The Secretary

&t

Press Service
N o f 34»69

the Treasury announced lest evening that

the tenders for |6 O O t0OQ,OOO, or thereabout»* of 91*day Treasury
hills to be dated December 23, 1942* and to mature March 24, 1943
which were offered on t>ecamber I S , were opened at the Federal
Reserve Banks on December 01*
The details of this issue are as follows:
Total applied for
Total accepted,
Range of accepted
High
Low
Average
price

- 99,926 Equivalent .#$#» of discount approx, 0,
per
.
- 99,908 Equivalent rate of discount approx, 0,364%
per annum
J
- 99,9084-Equivalent rate of discount approx, 0,363%
per annum

(92 percent 6f th© amount bid for at the low price was accept
Federal Reserve
District

Total
Applied For

Total
Accepted

Boston
New York
Philadelphia
Cleveland
Ri chraogd
Atlanta
Chicago
St, Louis
Minneapolis
Kansas City
Dallas
San Francisco

# 32,263,000
789,657,000
35,906,000
35,650,000
21,767,000
lO,692,000
155,687,000
21,042,000
16,862,000
12,268,000
V10,990,000
77,620.000

0 21,043,000
319,978,000
20,187,000
.20,092,000
12,466,000
5,958,000
105,401,000
12,362,000
15,389,000
10,464,000
9,495,000
47.884,000

^1,220,406,000

#600,709,000

TOTAL

>

~oQ e

/
tj/fi

F O B IM M ED IA T E R E L E A S E ,
D EC EM BER 3 8 = : 1 9 * * 2 .
v3

T h e B u r e a u o f C u s to m s a n n o u n c e d t o d a y p r e l i m i n a r y f i g u r e s s h o w i n g t h e q u a n t i ­

ÿi„

t i e s o f c o f f e e a u t h o r iz e d f o r e n t r y f o r c o n s u m p tio n u n d e r t h e q u o ta s f o r th e
t w e l v e m o n t h s c o m m e n c in g O c t o b e r 1 , 19 **2 , p r o v i d e d f o r i n t h e I n t e r - A m e r i c a n
tfcoffee

C o f f e e A g r e e m e n t , p r o c l a i m e d b y t h e P r e s i d e n t o n A p r i l 1 5 , 19 **1 , a s f o l l o w s :

Isostilicon

C o u n try o f
P ro d u c tio n
S ig n a to ry C o u n trie s :
B ra z il
C o lo m b ia
C o s ta R ic a
Cuba
D o m in ic a n R e p u b lic
E cu ad o r
E l S a lv a d o r
G u a te m a la
H a iti
H o n d u ra s
M e x ic o
N ica ra g u a
Peni
V e n e z u e la
R o n -s ig n a to ry C o u n trie s :
B r i t i s h E m p ire , e x c e p t
A den a n d C an ad a
K in g d o m o f t h e N e t h e r l a n d s
and i t s p o ss e s s io n s
A den, T em en, an d S au d i
A ra b ia
O th e r c o u n tr ie s n o t s ig n a ­
to r ie s o f th e I n te r A m e rica n C o ffe e
A g reem en t

: Q u o ta Q u a n ti ty
: ( P o u n d s ) 1/

1 , 5 3 5 . 36 7,0 8 3
520 , 08^,629

3 3 ,0 1 9 ,2 6 4
1 3 ,2 1 2 ,9 1 7
1 7 .5 3 3 ,7 1 3
2 ^ ,7 6 7 ,0 9 ^
9 9 ,6 8 0 ,2 8 * *
S S ,3 3 * * ,* * * * 2
* * 5 ,* * 0 0 ,2 9 8
2 , 9 08 ,6 17
7 8 ,7 5 ^ ,0 5 6
3 2 , 1*6 2 ,5 15
* * , 1 2 7,2 76
6 1 , 25 **, 106

)
)
)
)
)

5 1 . 6 5 3 ,778

Authorized for entry
for consumption
As of (Date)
: (Pounds)

D ee* 1 2 , 19**2
it

R
R
R
R
R
R
R
R
R
H
H
R

,pr<

Country
Product!

108 , 126,660
1 0 1 , 491,577

1 .8 9 9 .3 5 7
6 , 398,120
3 ,9 6 4 ,4 6 3
4 , 129,262
7 , 659,205
6 , 238,525
1 3 . 291,310
9 9 1 ,2 9 0
3 ,5 7 4 ,7 1 0
6 7 ,3 8 0

oryCountriei
m

licanHspabli
or
ill

2

1 1 ,3 4 7 ,7 6 7

1 ^ , 551,589

ex

«iti« Set
fa

and S

Nflee no
1/

I of «le k

Quotas revised.

N Coffee
-0O0revised.

I I
TREASURY DEPARTMENT
Washington
Prass Service
No, 34-70

FOR IMMEDIATE RELEASE,
Wednesday. December 23. 1943«

The Bureau of Customs announced today preliminary figures showing the quan­
tities of coffee authorised for entry for consumption under the quotas for the
twelve months commencing October 1, 1942, provided for in the Inter-American Cof-

r eatry
tion

fee Agreement, proclaimed by the President on April 15, 1941, as follows;

Country of
Production
*t
Signatory Countries:
Brasil
Colombia
w
Costa Rica
1 Cuba
Dominican Republic
13,S i
Ecuador
* El Salvador
Guatemala
Haiti
njlll Honduras
Mexico
Nicaragua
Peru
Venezuela
ion-signatory Countries;
British Snpire, except
Aden and Canada
Kingdom of the Netherlands
\ and its possessions
S Aden, Yemen, and Saudi
Arabia
‘I Other countries not signatories of the InterAmerican Coffee
| Agreement

ml

>

Quota Quantity
(Pounds) 1/

1,535,357,083
520,084,629
33,019,264
13,212,917
17,533,713
24,767,094
99,680,284
88,334,442
45,400,298
2,908,617
78,758,056
32,462,515
4,127,276
61,254,106
)
)
)
)
)
)
)
)
)
)
)

51,653,778

Quotas revised*

-oOo-

*
:
*

Authorized for entiy
for consumption
As of (Date)
: (Pounds)

Dec* 12, 1942
tt
w
s
s
s
s
s
a
it
i>
s
ft

108,126,660
101,491,577
1,899,357
6,398,130
3,964,463
4,129,262
7,659,205
6,238,525
13,291,310
991,290
3,574,710
67,380
2
11,347,767

ft

14,551,589

n

- 3 -

issue or on subsequent purchase, and the amount actually received either
upon sale or redemption at maturity during the taxable year for which the
return is made? as ordinary gain or loss.
Treasury Department Circular No, 418, as amended, and this
notice, prescribe the terms of the Treasury bills and govern the condi­
tions of their issue.

Copies of the circular may be obtained from any

Federal Heserve Bank or Branch,

i

2
Reserve Banks and Branches,, following which public announcement will be made
by the Secretary of the Treasury of the amount and price range of accepted
bids.

Those submitting tenders will be advised of the acceptance or rejec­

tion 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*

Payment of accepted tenders at the

prices offered must be made or completed at the Federal Reserve Bank in
cash or other immediately available funds on

December 30* 1942______ ,
XXX

The income derived from Treasury bills, whether interest or gain
from the sale or other disposition of the bills, shall not have any exemption,
as such, and loss from the sale or other disposition of Treasury bills shall
not have any special treatment, as such, under Federal tax Acts now or here­
after enacted*

The bills shall be subject to estate, inheritance, gift, or

other excise taxes, whether Federal or State, but shall be exempt from all
taxation now or hereafter imposed on the principal or interest thereof by
any State, or any of the possessions of the United States, or by any local
taxing authority*

For purposes of taxation the amount of discount at which

Treasury bills are originally sold by the United States shall be considered
to be interest*

Under Sections 42 and 117 (a) (l) of the Internal Revenue

Code, as amended by Section 115 of the Revenue Act of 1941, the amount of
discount at which bills issued hereunder are sold shall not be considered
to accrue until such bills shall be sold, redeemed or otherwise disposed
of, and such bills are excluded from consideration as capital assets.
Accordingly, the owner of Treasury bills (other than life insurance com­
panies) issued hereunder need include in his income tax return only the
difference between the price paid for such bills, whether on original

3 V - 7 /

TREASURY DEPARTMENT

I EEiEASE
bstey> j

Washington
EOR RELEASE, MORNING NEWSPAPERS,,

ww

Thursday. December 24« 1942

!he Sec
les tendez
The Secretary o f the tr e a s u ry , hy th is p u b lic n o tic e , in v ite s tenders
for $ 600.Q00.000

91

or thereabouts, of

- day Treasury bills, to be issued

on a discount basis under competitive bidding.

be dated

December 30» 1942

b ills, t
B u g. Th

The Dills of this series will

and w ill mature

when the face amount will be payable without interest.

I and WL

March 31. 1943

[payable w:

They will be issued in

nly, ai

bearer form only, and in denominations of *£1,000, $5,000, $10,000, $100,000,

0,000, $5(

$500,000, and $1,000,000 (maturity value).

enders
cues up t

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

Monday

War
closing hour, two o^clock p. m., Eastern 2St30XBd3GX2d- time, Monday^_Dsp^Bbsr ^ —1942j— •
Tenders will not be received at the Treasury Department, Washington.

Each tender

must be for an even multiple of $1,000, and 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

'enders i

It is urged that tenders be made on the pointed forms and for­

I hs and tru<
lers in ^

warded in the special envelopes which will be supplied by Federal Reserve Banks

?anied bj
bin«
express
company,

or Branches on application therefor.
Tenders will be received without deposit from incorporated banks and

“fidiate

trust companies and from responsible and recognized dealers in investment securi­
ties.

Ttmders from others must be accompanied by payment of 2

k federal

percent of the

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

¡he Treasu
an even m
Messed on ■
e‘ £♦ ,
■ tenders
[cial enveli
is or Brani

j

an express guaranty of payment by an incorporated bank or trust company.
Immediately after the closing hour, tenders will be opened at the Federa ]

2eme
luuUIib
tenders s

I ? « . îh e
to accet

w Ms

TREASURY DEPARTMENT
Washington
Press Service
No* 34-71

FOR RELEASE, MORNING- NEWSPAPERS,
Thursday, December 24, 1942.

12/23/42

“

The Secretary of the Treasury, by this public notice,
vites tenders for $600,000,000,

or thereabouts,

in­

of 91-clay Treas­

ury bills, to be issued on a discount basis under competitive
bidding.

The bills of this series will be dated December 30,

1942, and will mature March 31> 1943> when the face amount will
be payable without interest.

They will be issued in bearer

form only, and in denominations of $1,000, $5,000, $10,000,
$100,000, $500,000, and $1,000,000 (maturity value).
Tenders will be received at Federal Reserve Banks and
Branches up to the closing hour, two o ’clock p.m., Eastern War
Time, Monday, December 23, 1942. Tenders will not be received
at the Treasury Department, Washington.
Each tender must be
for an even multiple of $1,00©, and the price offered must be
expressed on the basis of 100, with not more than three deci­
mals, 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.
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 b 5r 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 c ompany.
Immediately after the closing hour, tenders will be opened
at the Federal Reserve Banks and Branches, following which pub­
lic announcement will be made by the Secretary of the Treasury
of the amount and price range of accepted bids. Those submit­
ting tenders will be advised of the acceptance or rejection
thereof. The Secretary of the Treasury expressly reserves the
right to accept or reject any or all tenders, in whole or in
part, and his action in any such respect shall be final* Payment
34-71

(O v e r )

-

2

-

of accepted tenders at the prices offered must be made or com­
pleted at the Federal Reserve Bank in cash or other, immediately
available funds on December 3 0 , 1942*
The income derived from Treasury bills, whether interest or
gain from the sale or other disposition of the bills, shall not
have any exemption, as such, and loss from the sale or other dis­
position of Treasury bills shall not have any special treatment,
as such, under Federal Tax Acts now or hereafter enacted. The
bills shall be subject to estate, inheritance, gift, or other
excise taxes, whether Federal or State, but shall be exempt from
all taxation now or hereafter imposed on the principal or inter­
est thereof by any State, or any of the possessions of the United
States, or by any local taxing authority.. For purposes of taxa­
tion the amount of discount at which Treasury bills are originally,
sold by the United States shall be considered to be interest.
Under Sections 42 and 117 fa) (1) of the Internal Revenue Code,
as amended by.Section 115.of the Revenue Act of 1941, the amount
of discount at which bills issued hereunder are sold shall not
be considered to accrue until such bills shall be sold, .redeemed
or otherwise disposed of, and such bills are excluded from con­
sideration as capital assets. Accordingly, the owner of Treasury
bills (other than life insurance companies) issued.hereunder need
include in his income tax return only the difference between the
price paid for such bills, .whether on original issue or on sub­
sequent purchase, and the amount actually received either upon
sale or redemption at maturity during the taxable year for which
th.e return is made, as ordinary gain or loss.
Treasury Department -Circular Ho. 418, as amended, and this
notice, prescribe'the t e r m s ,of the Treasury bills and govern the
conditions of their issue.
Copies of the circular may be
obtained from any Federal Reserve Bank or Branch.

-oOo-

TREASURY DEPARTMENT
Washington

POE IMMEDIATE RELEASE,
-y^V

I 7 Yi/

Proas Service
»o*

T h * Treasury Department today mads public a booklet entitled

Administration of* the Wartime Financial and Property Controls of*
tha United States Government*1, containing the most complete state­
ment of the scope and operations of Foreign Funds Control released
to date*
This booklet was prepared in June, 1942, for the use of the
delegates to the Inter^Amerioan Conference on Systems of Economic
and Financial Control and has not been materially revised since
that time.

The Treasury Department believes, however, that it is

now appropriate to make this document generally available to
persons interested in the purposes and functions of Foreign Funds
Control even though maoy developments have taken place since June,
1942, in the operations and policies of th# Control,

The booklet contains much heretofore unrevealed information
on the Government1# wartime financial controls which will be of
interest to the financial public and to all persona interested in
increasing the effectiveness of economic warfare against the Axis,

_ />

i n

/« — / . -

TREASURY DEPARTMENT
Washington

FOR
_ Z

IATÇ RELEASE,
j

j

iïd îL ir,

Press Serviee
No-

/The Treasury Départaient today made public a booklet
JF

---- »

Administration of the Wartime Financial and Property Controls of
the United States Government^» nnnl lïlirtafrthb mbs¥ c<iipiete state­
ment of the scope and operations of Foreign Funds Control released
to date«
Tïhis booklet was prepared in June, 1942, for the use of the

t» ■■ ■
»

delegates to the Inter-American Conference on Systems of Economic
and Financial Control and has not been materially revised since
that time«

The Treasury Department believes, however, that it is

now appropriate to make this document generally available to
persons interested in the purposes and functions of Foreign Funds
Control even thoufh^many devel^pi^^

place

*

in the operations and policies of the Control«
“ S r tooklet contains much heretofore unrevealed information
on the Government*s wartime financial controls which will be of
interest to the financial public and to all persons interested in
increasing the effectiveness of economic warfare against the Axis,

0 O o

TREASURE DEPARTMENT
Washington
FOR IMMEDIATE RELEASE,
Thursday, December 24, 1942.

Press Service
No* 34-72

The Treasury Department today made public a booklet,
"Adminis tret ion of the ’
W artime Financial and Property Controls
of the United States Government,” in which is contained the
most complete statement of the scope and operations of Foreign
Funds Control released to date*
This booklet was prepared In June, 1942, for the use of
the delegates to the Inter-American Conference on Systems of
Economic and Financial Control and has not been materially re­
vised since that time*

The Treasury Department believes, how­

ever, that it is now appropriate to make this document generally
available to persons interested in the purposes and functions of
Foreign Funds Control even though since its issuance many de­
velopments have taken place In the operations and policies of
the Control.
The booklet contains much heretofore unrevealed Informa­
tion on the Government*s wartime financial controls which will
be of interest to the financial public and to all persons Inter­
ested in increasing the effectiveness of economic warfare against
the Axis,

-oOo-

-

The
fro m

e x tre m e ly

th in

3

z in c

-

c o a tin g

w ill

p ro te c t

th e

s te e l

r u s t.
A u th o r ity

b u t

th e

o rd e r

m o d ifie d

o r

• T re a s u ry .

to

m ake

th e

new

c o in

e s ta b lis h in g

th e

z in c -s te e l

re vo k e d

a t

any

_ _ ------ — —

tim e

e x p ir e s

by

th e

Decem ber

3 1»

c o m p o s itio n

S e c re ta ry

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19 4 6 ,

m ay

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p u b lic ity
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p ro g ra m s

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m e n ts

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own

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expense*

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h e lp e d *

huge

a tte s ts

in

-

v o lu m e

to

o f

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th e

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w ith

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have

p a r­

tic ip a te d *
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packaged
a c tu a l
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fig u r e s

on

la s t

w eek

by

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th e

tio n

and

r e is s u e d

th e

num ber

The

B o a rd ,

to

o f

th e

f i l l

b a n ks,

have

b u s in e s s

p ie c e s

penny

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and*

is

copper

la w
i f

a ls o

been

n e e d s,

a ttra c te d

no

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h id in g

m in te d ,

i t

d u ll

th a t

th e

penny

a p p ro va l

o f

a u th o r ize d

p ro lo n g e d
th is

w as

w as

s ig n e d

th e

W ar

p r o d u c tio n

e x p e r im e n ta ­

th e

m ost

p r a c tic a l

tim e .

fo r

th is
The

c o in a g e

m in o r

o f

c o in s

d e n o m in a tio n
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S ta te s

a

th re e -c e n t

c o n tin u e s ,
a fte r
la s t

th e

con­
new

m in te d

a

1889.

z in c -s te e l
4 1*5

in

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a fte r

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c o in ,

becom e

th is

p ro d u c tio n .
c o in

c o in

dem and*

be

change

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o ffic ia ls
a t

th e

w ill

in

th re e -c e n t
The

s te e l

M in t

a

R o o s e v e lt*

S e c re ta ry

a v a ila b le

s id e ra tio n

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P re s id e n t

c o n v in c e d

p ie c e ,

a u th o rizin g

z in c -c o a te d

m a te ria l

to

r e a c h in g

a v a ila b le •
L e g is la tio n

o f

upon

penny

g r a in s ,
w ill

w ith

have

w ill

w e ig h

a g a in s t
a

s lig h tly

th e

b lu e -g ra y

c irc u la tio n .

p re s e n t
c a s t,

le s s
48

th a n

th e

g r a in s .

w h ic h

w ill

te n d

/ ff

S e c re ta ry
fo r

a

new ,

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w a r tim e

p n e -c e n t

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U

4

v

/

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h

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sam e

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e

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l

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c o in s

can

be

a lr e a d y

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m o n th

in

th e

s a v in g s

v e rt

th e m

has

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s is ta n c e
in g

to

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th e

c o in ,

a fte r

p ro d u c tio n

in

s a id

th a t

h id in g

b e lie v e d

and

th a t

dem ands

o f

by

fo r

th e

been

w h ic h

is

1, 19 4 3 *

th e

th e

o f

has

p e n n y,

M in t,

a b o u t

in to

be

w h ic h

Ja n u a ry

be

rv * U > £ * ^ ,

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p re s e n t

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1 .

to

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use

w ill

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w a r-n e c e s s a ry

m e ta ls

in c re a s e
th e

have

to

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and

a v a ila b le

changeover

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to

th a t

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penny

th e
i t

o th e rw is e

p ro g ra m ,
s to c k s

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is

o r

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m e ta l

b e in g

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to

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is

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a

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p o lic y .

th ro u g h o u t

M rs .

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c h a n n e ls .

s u c c e s s fu l

th e

th e

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b u s in e s s

w a rtim e

Banks

z in c -c o a te d

¿s%*xk*2Cij Z

R oss,

m in te d ,

in to

so

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to

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in to

in it ia lly

is

c h ild r e n

c o in

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be

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to

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as

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e s ta b lis h e d

***-

p ro v id e s

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th e

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1909 .

s in c e

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c

and

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A t

^

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s ize

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to d a y

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Ross

c o u n try
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have

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on

extensive

a
TREASURE DEPARTMENT
Washington
Press Service
No, 34-73

FOR RELEASE, MORNING NEWSPAPERS,
Friday, December 25, 1942._____ _
12-24-42

Secretary Morgentheu today established specifications For a
$ew, wartime one-cent coin to be made oF zinc-coated steel*

The

actio?* was taken under recently enaeted legislation designed to

m

conserve stretegic metal*
The order provides that the new piece shall be oF the same
size and design as the present coin, whifih has been minted sinte
1909* Coinage oF the present ptnny, which is 95 perosnt copper,
is suspended after January 1, 1943.
Mrs. Nellie Tayloe Ross, Director of the Mint, said the new
one-«ent piece will be In production about February 1. At the
same time, Mrs. Ross said that the campaign to draw outstanding
coins out of hiding and into business use will be continued.
It is believed that by increasing circulation of coins already
minted, demands For war-necessary metals can be reduced substan­
tially.
School children throughout the Nation have Joined this month
in the Treasury*s campaign to induce conversion of coin savings
into War Stamps and Bonds, or otherwise to divert them into busi­
ness channels. The program, designed initially to increase avail­
able penny stocks for holiday needs while the changeover to the
new metal is being made, has proved so successful that it is
being adopted as a continuing wartime policy.

il

Banks throughout the country have given substantial assistance
to the campaign to increase circulation of outstanding coins,
Mrs. Ross said, many of them carrying on extensive publicity pro­
grams in their communities at their own expense.
Many individuals,
radio stations, and commercial establishments have helped.
A huge volume of correspondence received at the Mint attests
to the enthusiasm with which the schools have participated.
v

Since the coins, upon reaching the banks, have been packaged
promptly and reissued to Fill business needs, no actual Figures
on the number of pieces attracted From hiding are available.

pi

«

2
L e g i s l a t i o n a u t h o r iz in g a c h a n g e i n th e p e n n y w as s ig n e d l a s t
week b y P r e s i d e n t R o o s e v e l t * W it h a p p r o v a l o f t h e W a r P r o d u c t i o n
B o a rd , S e c r e t a r y M o rg e n th a u a u t h o r iz e d p r o d u c t io n o f th e z i n c c o a t e d s t e e l c o i n a f t e r p r o lo n g e d e x p e r i m e n t a t i o n c o n v i n c e d M in t
o f f i c i a l s t h a t t h i s w as th e m o st p r a c t i c a l m a t e r ia l a v a i l a b l e a t
r t h i s t im e *
T h e new la v / a l s o a u t h o r i z e s c o i n a g e o f a t h r e e - c e n t p i e c e ,
and, i f th e dem and
f o r m in o r c o in s c o n t in u e s , c o n s id e r a t i o n w i l l
be g i v e n t h i s d e n o m in a t io n a f t e r t h e new p e n n y i s i n p r o d u c t i o n .
The U n i t e d S t a t e s l a s t m in t e d a t h r e e - c e n t c o i n i n 1 8 8 9 .
T h e z i n c - s t e e l p e n n y w i l l w e ig h s l i g h t l y l e s s t h a n t h e c o p p e r
c o in , 4 1 .5 g r a in s , a g a in s t th e p r e s e n t 48 g r a in s .
N e w ly m i n t e d ,
I i t w i l l h a v e a b l u e - g r a y c a s t , w h ic h w i l l t e n d t o b e co m e d u l l w i t h
c ir c u la t io n .
T h e e x t r e m e ly

t h in

z in c

c o a t in g w i l l p r o t e c t

th e

ste e l

fro m

i ru s t*
A u t h o r i t y t o m ake t h e n ew c o i n e x p i r e s D e c e m b e r 3 1 , 1 9 4 6 , b u t
! th e o r d e r e s t a b l i s h i n g t h e z i n c - s t e e l c o m p o s i t i o n m ay b e m o d i f i e d
¡l o r r e v o k e d a t a n y t im e b y t h e S e c r e t a r y o f t h e T r e a s u r y .

-o O o -

TREASURY DEPARTMENT
Washington
FOR IMMEDIATE: RELEASE,
Saturday« December 26. 1942.

Press Service

, il im »DIATI
ÆL

'y

Secretar

Secretary of the Treasury Morgenthau today announced the final subscrip­
tion and allotment figures with respect to subscriptions from commercial banks
for their own account for the current offering of 7/8 percent Treasury Certifi­

fi 1

subscri

from coi
of fing of

cates of Indebtedness of Series B-1943«
Subscriptions and allotments were divided among the several Federal Re­

,

1

Se. 5S ¿•1945.
script

serve Districts as followsi
Federal Reserve
District_______

Total Subscriptions Received

Boston
New York
Philadelphia
Cleveland
Richmond
Atlanta
Chicago
St. Louis
Minneapolis
Kansas City
Dallas
San Francisco
TOTAL

$ 199,299,000
1,293,455,000
128,239,000
257,212,000
149,405,000
173,834,000
500,827,000
147,436,000
106,777,000
107,238,000
117,339*000
315.242.000
$3,496,303,000

Total Subscriptions Allotted

Fetj hi Resen

$

Mi ,ct

fee il Resen
116,958,000
747,562,000
81,557,000
159,447,000
92,995,000
108,336,000
308,405,000
96,699,000
71,023,000
70,132,000
74,050,000
‘ 184,441,000
$2,113,605,000

Bos
Sew irk
'Phi lelphia
Old .and
Hies ind
iti ;s
Chi: (û
StJ ¡cuis
Sim polis
Kant «City
Bali

TREASURY DEPARTMENT
Washington

tafia

¿bscrip.

Press Service
No. 54-74

FOR IMMEDIATE RELEASE,
Saturday, December 2 6 , 1942*

Secretary of the Treasury Morgenthau today announced the
final subscription and allotment figures with respect to subscrip­

T fo tiii.

tions from commercial banks for their own account for the current
offering of 7/8 percent Treasury Certificates of Indebtedness of
Series E-1943.

sr&l He-

Subscriptions and allotments were divided among the several
Federal Reserve Districts as follows:
Federal Reserve
District

Total Subscriptions Received

Total Subscrip
tions Allotted

Boston
New York
Philadelphia
Cleveland
Richmond
Atlanta
Chicago
St. Louis
Minneapolis
Kansas City
Dallas
San Francisco
TOTAL

$

t

747,562
M

157

,

52

108 3

, :

70 132
,

,®

MB

¡¿P

199,299,000
1,293,455,000
128,239,000
257,212,000
149,405,000
173,834,000
500,827,000
147,436,000
106,777,000
107,238,000
117,339,000
315,242,000
î>3,49é,30Ï5,000

-oOo-

118,958,000
747,562,000
81,557,000
159,447,000
92,995,000
108,336,000
308,405,000
96,699,000
71,023,000
70,132,000
74,050,000
184,441,000
$2,ll3,é05,000

Far. $.

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(T. ft£ * ’.6'/-)
TITLE 26 — INTERNAL REVENUE
CHAPTER I
SUBCHAPTER A, PART 19
INCOME TAX
Ownership certificates required in connection
with Interest on bonds of corporations and
obligations of the United States and its
instrumentalities - Regulations 103 amended.
TREASURY DEPARTMENT,

Office of Commissioner of Internal Revenue,
Washington, D* C*
TO COLLECTORS O f INTERNAL REVENUE
AND OTHERS CONCERNED;

Regulations 103

19, Title 26, Code of federal

Regulations, 1940 SupjJ^ are amended as follows:
Paragraph 1* Section 19*143-3» as amended by
Treasury Decision $174» approved October 28, 1942, is
further amended by adding before the period at the end
of the first sentence the following:

"and (in the case of

taxable years beginning after December 31» 1942) that
his victory tax net income does not exceed the specific
exemption of #624"•
Par* 2* Section 19*143-4» as amended by Treasury
Decision $103, approved December 13, 1941» is further
amended as follows:
(A)

By striking out the last sentence of the first

paragraph and inserting in lieu thereof the following:
However, in the case of interest coupons presented
on or after January 1, 1943» sudh ownership

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because th is requirement could be changed only by Congress.
Kp^Âf
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However, handling of these c e r t ific a t e s is being considerably

ip

IMÎÎ

sim p lifie d .

^k~:h

The te x t o f the Decision is as fo llo w s:

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in te r e s t, and the bondholder’ s signature.
The completed c e r t ific a t e was presented a t the bank window
with the coupon, and they remained together through banking
channels to the o ffic e of the company issuing the bond.
The company then forwarded the c e r t ific a t e to the Commissioner
of Internal Revenue a t Washington.

The Revenue Bureau used

the c e r t ific a t e s as a check on the accuracy of income tax
returns.
Owners of ob ligation s of the United States were required
to prepare ownership c e r t ific a t e s in su b sta n tia lly the same
way when presenting coupons fo r payment.

In the case of

registered Government bonds, the c e r t ific a t e s were prepared
by the Treasury when in te re st checks were mailed.
Not only the preparation of the c e r t ific a t e s by the bond
owners, but also the subsequent handling of them by private
banks, Federal Reserve banks, corporations, and the Revenue
Bureau required the expenditure of much e ffo r t .
In the Revenue Bureau, the c e r t ific a t e s had to be sorted
and arranged for association with the individual income tax
returns of the bond owners.
The new Decision continues in e ffe c t the requirement for
f i l i n g of ownership c e r t ific a t e s in the case of citiz e n s of
the United States cashing in te re st coupons of domestic
corporations where such bonds contain a ta x -fre e covenant

The c e r t ific a t e s are eliminated also in the case of
c itiz e n s of the United States presenting in te re st coupons
from bonds of domestic corporations, except in the case of
bonds containing a ta x -fre e covenant*

About 4,500,000

c e r t ific a t e s accompanying corporation bond coupons have been
f ile d each year.
While the c e r t ific a t e s in the past have provided the
Bureau of Internal Revenue with information which produced
a certain amount of add ition al taxes, the aggregate amount
is not regarded by the Bureau as s u ffic ie n t , in comparison
with the re su lts of other c o lle c tio n e ffo r t s , to ju s t ify
f u l l continuance of the c e r t ific a t e plan.
The o rig in a l ownership c e r t ific a t e regulations re­
quired that bond owners presenting coupons for c o lle c tio n ,
either through th e ir banks, at Federal Reserve banks, at
the Treasury, or a t the home o ffic e s of domestic corpora­
tio n s, prepare and submit ownership c e r t ific a t e s on Form
1000 with the coupons.
A form was required fo r each coupon submitted, except
that one c e r t ific a t e could be submitted for groups of
coupons from the same issue of bonds.

The owner of donestic

corporation bonds was required to show his name and address,
the name and address of the obligor of the bonds, name of
bond, date of bond issu e , due dates and payment dates for

S B H H B B H H i
m ££
wmSmM

Secretary Morgenthau today made public a Treasury
Decision which re lie v e s in d iv id u a ls, business concerns and
the Government o f much paper work connected with the cash­
ing of in te re st coupons from corporate and Government bonds*
The decision renders unnecessary hereafter the execu­
tion and f i l i n g each year of more than 8,000,000 "ownership
c e r tific a t e s " previously required as income tax records*
"In these times when business men are being subjected
to add ition al record-keeping made imperative by the war,"
I

the Secretary said, "we have been examining a l l of our accap­
t i v i t i e s with a view to reducing th is Burden- We have ha-dr

MmM:

/1'OL.

t o con-s-rder each type of record with a view to i t s o ver-all
value*

By elim inating th is form, I believe we w ill provide

a saving in time and e ffo r t to taxpayers, banks and industry

ms

/l

in general th at w ill be very s u b s ta n tia l." ^ C L A u ^ a ¿ y
C
¿Vy / T a v U w,r
TwAAfltimr
^
f
*
L
Today’ s Treasury Decision e lim in a te d o u trig h t the re- /

l ( (A-ff- XCiA\JL.

quirement for f i l i n g of an ownership c e r t ific a t e , Form 1000,
by citize n s of the United States presenting in te re st coupons
fr om obligations of the United S ta te s .

About 4,000,000 such

c e r tific a t e s have been f i l e d annually in recent years, and
the number would have increased heavily with the issuance of
additional se c u r itie s to finance the war.
I-£ ;- J * <
‘-iV\:SV *
■w x
m X & m z m & R & f c $fr'-

j§ *

g i|g
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I S ®»«

because this requirement could be changed only by Congress.
However, handling of these certificates is being considerably
simplified.
The text of the Decision is as follows?

J
inter est, and the bondholder^ signature.
The completed certificate was presented at the bank window
with the coupon, and they remained together through banking
channels to the office of the company issuing the bond.
The company then forwarded the certificate to the Commissioner
of Internal Revenue at Washington.

The Revenue Bureau used

the certificates as a check on the accuracy of income tax
returns.
Owners of obligations of the United States were required
to prepare ownership certificates in substantially the same
way when presenting coupons for payment.

In the case of

registered Government bonds, the certificates were prepared
by the Treasury when interest checks were mailed.
Not only.the preparation of the certificates by the bond
owners, but also the subsequent handling of them by private
banks, Federal Reserve banks, corporations, and the Revenue
Bureau required the expenditure of much effort.
In the Revenue Bureau, the certificates had to be sorted
and arranged for association with the individual income tax
returns of the bond owners.
The new Decision continues in effect the requirement for
filing oi ownership certificates in the case of citizens of
the United States cashing interest coupons of domestic
corporations where such bonds contain a tax-free covenant

7r

The certificates are eliminated also in the case of
citizens of the United States presenting interest coupons
from bonds of domestic corporations, except in the case of
•I

bonds containing a tax-free covenant.

About 4,500,000

certificates accompanying corporation bond coupons have been
filed each year.
» -/ While the r>p

avP~pV» ovTcfecl 'tEèì

Bureau of Internal Revenue with informahlotf which produce
i certain amount of additiona^i"'taxes, the aggregate amount
:.s not regarded by the Bureau a ^ s u f ficient, in comparison

with the results of other collection efforts 7 -.to justify
uldr„.c ont,i-nuanee of-’4 h e--^ ^ h xfl^ ajte--pI-an:-8—--—

The original ownership certificate regulations re­
quired that bond owners presenting coupons for collection,
either through their banks, at Federal Reserve banks, at
the Treasury, or at the home offices of domestic corpora­
tions, prepare and submit ownership certificates on Form
1000 with the coupons.

A form was required for each coupon submitted, except
that one certificate could be submitted for groups of
coupons from the same issue of bonds.

The owner of domestic

corporation bonds was required to show his name and address,
the name and address of the obligor of the bonds, name of
bond, date of bond issue, due dates and payment dates for

Secretary Morgenthau today made public a Treasury
Decision which relieves individuals, business concerns and
the Government of much paper work connected with the cash­
ing of interest coupons from corporate and Government bonds.
The decision renders unnecessary hereafter the execu­
tion and filing each year of more than 8,000,000 ’’ownership
certificates” previously required as income tax records.
”In these times when business men are being subjected
to additional record-keeping made imperative by the war,”
the Secretary said, ”we have been examining all of our acuj crrfC
ftrfC ~to
Io-f- Ioanna^ to

tivities with a view to reducing this b

u

r

n_>* m
m vj
vj n
ivi*
gy vw «tn

Wg-teniTTlali

“X ’hjL'faq,

— to ,

ach type of record with a view to its over-all

value.

By eliminating this form, I believe we will provide

a saving in time and effort to taxpayers, banks and industry
in general that will be very substantial.'^jZji-^^(\
Today’s Treasury Decision eliminates outright the re­
quirement for filing of an ownership certificate, Form 1000,
by citizens of the United States presenting interest coupons
from obligations of the United States.

About 4,000,000 such

certificates have been filed annually in recent years, and
the number would have increased heavily with the issuance of
additional securities to finance the war.

3

returns.
■
g l o t o r n i i Tj u i i l La i r f

the cert^fj rntnfii i i .—

trons,

^

Owners of obligations of the United States were
required to prepare ownership certificates
the same

way

in substantially

when presenting coupons for payment. In the

case of registered «Government bonds,

the certificates were

prepared by the Treasury when interest checks were mailed.
Not only the preparation of the certificates by the
bond owners, but also the subsequent handling of them by
private banks,
Revenue Bureau

Federal Reserve banks,

corporations,

fend the

required the expenditure of much effort.

In the Revenue Bureau, the certificates had to be
sorted and arranged for association with the individual
income tax returns of the ©end owners.
The new Jjfecision continues in effect the requirement
for filing of ownership certificates in the case of citizens
of the United States cashing
corporations •where such
/nis

interest coupons of domestic

bonds contain

requirement could be change dimly

__ ML I

handling of these certificates is being considerably

Simplified

I

■ I

fal M il i f

■11 i

r r i UOPE

I

The certificates are eliminated^in the case of citizens
of the United States presenting interest coupons from bonds
exceot in the case of bonds

of domestic corporations,

containing.a-tax-free covenant. About 4, 500,00C^certif icates

gja.ro
i r o aa fry
f * ge oo *tcisu.
Q i l . **
*

■ a w H im lly

While

the certificates in the past have provided the

Bureau of Internal Revenue with information which produced a
certain amount of additional taxes,
not regarded by the Bureau
with

the

the aggregate amount is

as sufficient , in comparison

results of other collection efforts,

to justify ,

full continuance of the certificate plan.
The original ownership certificate regulations required
that bond owners

presenting coupons for collection,

either

through their banks, at Federal Reserve banks, at the Treasury,
or at the home offices of domestic corporations,
submit

prepare and

ownership certificates on Form 1000 with the coupons.
A form was required for each coupon submitted,

that

one certificate

except

could be submitted for groups of coupons

from the same issue of bonds. The owner of domestic corporation
bonds was required to show. Kis name and address, the name and
address of the obligor of the bonds,
bond issue,

name of bond, date of

due dates and payment dates for interest, and the

bondholder’s signature.

The completed certificate

was presented at the bank window

with the coupon, and they remained together

through banking

channels to the office of the company issuing the bond.

Se^etary Morgenthau today made public a TreasuryJ)ecis jon
_

. Ii.

ch relieves£individualsf7business concerns.^rdT the Grovern4
ent of much paper work connected with^SSe cashing of inter­
est courrCTT^from corporate andJ3«mirnment bonds.
The decisioivs^endejja^unnecessary hereafter the execution
and filing e a c h ^ f r df^more than

8 ,000,000 "ownership certifji

cates" n#€lfiously required^hs income tax records.

The Secre­

tary said the saving in time andN^fort to taxpayers, banks
and industry in general would be "tremendous."

He pointed

out that this saving is being accomplished at a time when such
relief is of special value because of other additional recordeeping resulting

™

Today's Treasury Decision eliminates outright the require­
ment for filing of an ownership certificate, Form 1000, by
citizens of the United States presenting interest coupons from
obligations of the United States.

About 4,000,000 such cer­

tificates have been filed annually in recent years, and the
number would have increased heavily with the issuance of
additional securities to finance the war.

S e c re ta ry Morgenthau today made p u b lic a
T re asu ry D e c is io n w hich r e lie v e s in d iv id u a ls , b u sin e ss
concerns and the Government of much paper work connected
w ith the cash in g o f in t e r e s t coupons from co rp o ra te and
Government bonds.
The d e c is io n ren d ers unnecessary h e re a fte r
the e x e cu tio n and f i l i n g each year o f more than

8,000,000

"ow nership c e r t if ic a t e s " ^ p r e v io u s ly re q u ire d as income
ta x re c o rd s ,
" I n these tim es when b u sin e ss men are being
su b je cte d to a d d it io n a l re c o rd -k e e p in g made im p e ra tiv e by
the w a r," the S e c re ta ry s a id , "we have been exam ining a l l
_

.

.

.

c

of our a c t i v i t i e s w ith a view to red ucM n g t h i s burden.
We have had to c o n sid e r each type o f reco rd w it h a view
to i t s o v e r - a ll v a lu e .

By e lim in a tin g t h i s form , I b e lie v e

we w i l l p ro v id e a s a v in g in time and e f f o r t to ta x p a y e rs,
banks and in d ustry^ rin
v e ry s u b s t a n t ia l, "

in g e n e ra l that w i l l be

TREASURY DEPARTMENT
Washington
FOR IMMEDIATE RELEASE,
Monday, December 28, 1942,

Press Service
No. 34-75

Secretary Morgenthau today made public a Treasury Decision
which relieves individuals, business concerns and the Government
of much paper work connected with the cashing of interest coupons
from corporate and Government bonds.
The decision renders unnecessary hereafter the execution and
filing each year of more than 8 ,000,000 nownership certificates”
previously required as income tax records.
"In these times when business men are being subjected to
additional record-keeping made imperative by the war,” the
Secretary said, ”we have been examining all of our activities
with a view to reducing this burden of paper work to a minimum.
The Treasury is checking each type of record with a view to its
over-all value, By eliminating this form, I believe we will pro­
vide a saving in time and effort to taxpayers, banks and industry
in general that will be very substantial, leaving them more time
to concentrate on winning the war.”
Today’s Treasury Decision eliminates outright the require­
ment for filing of an ownership certificate, Form 1000, by citi­
zens of the United States presenting interest coupons from'
obligations of the United States. About 4,000,000 such certifi­
cates have been filed annually in recent years, and the number
would have increased heavily with the issuance of additional
securities to finance the war,
The certificates are eliminated also in the case of citizens
of the United States presenting interest coupons from bonds of
domestic corporations, except in the case of bonds containing a
tax-free covenant. About 4,500,000 certificates accompanying
corporation bond coupons have been filed each year*
The original ownership certificate regulations required that
bond owners presenting coupons for collection, either through
their banks, at Federal Reserve banks, at the Treasury, or at the

- 2 -

home offices of domestic corporations, prepare and submit owner­
ship certificates on Form 1000 with the coupons,
A form was required for each coupon submitted, except that
one certificate could be submitted for groups of coupons from the
same^issue of bonds. The owner of domestic corporation bonds was
required to show his name and address, the name” and address of the
obligor of the bonds, name of bond, date of bond issue, due dates
and payment dates for interest, and the bondholder's signature.
The completed certificate was presented at the bank window
with the coupon, and they remained together through banking chan­
nels to the office of the company issuing the bond. The company
then forwarded the certificate to the Commissioner of Internal
Revenue at Washington, The Revenue Bureau used the certificates
as a check on the accuracy of income tax returns.
Owners of obligations of the United States were required to
prepare ownership certificates in substantially the sam wa‘
presenting coupons for payment. In the case of
dstered Governlent bonds, the certificates were prepared by the mI'va ceasury when
¡interest checks were mailed.
Not only the preparation.of the certificates by the bond
owners, but also the subsequent handling of them by private banks,
federal Reserve banks, corporations, and the Revenue" Bureau re­
quired the expenditure of much effort.
I p the Revenue Bureau, the certificates had to be sorted and
arranged for association with the individual Income tax returns
of the bond owners,
j
The new Decision continues in effect the requirement for
filing of ownership certificates in the case of citizens of the
jfaited States cashing interest coupons of domestic corporations
where such bonds contain a tax-free covenant because this require­
ment could^be changed only by Congress. However, handling of
píese certificates Is being considerably simplified.
The text of the Decision is as follows:

3
(T. D. 5304)
'TITLE 26

INTERNAL RETO3UE
CHAPTER I

SU3CHAPTER A, PAET 19
INCOME TAX

Ownership certificates required in connection
with interest on bonds of corporations and
obligations of the United States and its
instrumentalities - Regulations 103 amended.«
TREASURY DEPARTMENT,
Office of Commissioner of Internal Revenue,
Washington, D. C.
TO COLLECTORS OP INTERNAL REVENUE
AND OTHERS CONCERNED:
Regulations 103 /Part 19, Title 36, Code of federal
Regulations, 1940 S u a r e amended as follows*
Paragraph 1, Section 19,143-3, as amended by
Treasury. Decision 5174, approved October 28, 1942, is
further amended by adding before the period at the end
of the first sentence the following:
wand (in the case of
taxable years beginning after December 31, 1942) that
his victory tax net income does not exceed the specific
exemption of $624'*.
Par. 2. Section 19.143-4, as amended by Treasury
Decision 5103, approved December 13, 1941, is further
amended as follows:
(A) 5y striking out the last sentence of the first
paragraph and inserting in lieu thereof the following:
However, in the case of interest coupons presented
on or after January 1, 1943, such ownership
certificates are required to be filed by such
citizens, residents, fiduciaries and partnerships
only with respect to interest coupons on bonds,
mortgages or deeds of trust, or other similar
obligations issued prior to January 1, 1934, and
containing a tax-free covenant.
In the case of
interest on obligations of the United States or

any agency or instrumentality thereof, regardless
of the date of issuance thereof, ownership certi­
ficates shall be filed by such citizens, residents,
fiduciaries and partnerships only in the case of
interest paid on or after January 1, 1942 and prior
to January 1, 1943*
(B) By striking out the second sentence of the third
paragraph and inserting in lieu thereof the following:
The ownership certificate is required in such cases
whether or not the obligation contains a tax-free
covenant.
(C) By amending the last sentence of the third para­
graph to read as follows:
Ownership certificates (Porm 1001) shall also be
filed in the case of interest paid on or after
January 1, 1942, on obligations of the United
States or any agency or instrumentality thereof,
regardless of the date of issuance of such obli­
gations, if such obligations are owned by the
persons described in the first sentence of this
paragraph.
(D)
By inserting in the sixth paragraph immedi­
ately after the word ’’monthly” the following: ” (quar­
terly, for the calendar year 1943 and subsequent calen­
dar years)”.
Par. 3, Section 19.143-7, as amended by Treasury
Decision 5174, is further amended as follows:
(a ) By inserting immediately after the sixth'.sen­
tence the following:
However, for the calendar year 1943 and subsequent
calendar years the withholding agent shall make a
quarterly return on Porm 1012 on or before the
last day of the month following the termination
of the quarter for which the return is made.
The
ownership certificates, Porms 1000 and 1001, must
be forwarded to the Commissioner with the quarterly
return.
Porms 1001 should be listed on the quar­
terly return,
IShile Porms 1000 need not be listed
on the return, the number of such forms submitted
and the total amount of interest paid and of the
tax withheld on such of the forms as report inter­
est from which the tax is to be withheld should be
entered in the spaces provided.

-■$ *
(B) By inserting in the fourth sentence of the second
paragraph immediately aftei the word "monthly*1 the followingì "(quarterly, for the Calendar year 1943 and subsequent
calendar years)".
Par. 4. Section 19.143-9 is amended by adding after
"14" the followings "(and, for a taxable year beginning
after December 31, 1942, the Victory tax imposed by section
450)".
Par. 5. Section 19.147-4, as amended by Treasury
Decision 5103, is further amended by inserting at the end
thereof the followings'
(As to the requirements of filing ownership
certificates for bond interest generally in
the case of a nonresident alien, a nonresident
partnership composed in whole or in part of
nonresident aliens, a nonresident foreign
corporation or where the owner is unknown,
and with respect only to interest on obliga­
tions containing a tax-free covenant and issued
prior to January 1, 1934 ip the case of a citi­
zen or resident of the United States, a resident
partnership and nonresident partnership all of
the members of which are citizens or residents
of the United States, see section 19.143^4),

(This Treasury decision is issued under the authority
contained in sections 62 and 147 of the Internal Bevenue
Code (53 Stat. 32, 64.)

/s/ Guy T* Helvering
Commissioner of Internal Bevenue
Approved;

December 28, 1942.

/s/ John L. Sullivan
Acting Secretary of the Treasury.

y J^ L

1 É |# |

TREASURY DEPARTMENT
Washington

f a f DBASE
h^

Press Service

FOR RELEASE, MORNING NEWSPAPERS,
Tuesday. December 29. 1942.

3 Y- 7 i

12/28/42

II

m

1 Sen

The Secretary of the Treasury announced last evening that the tenders for
$600,000,000, or thereabouts, of 91-day Treasury bills to be dated December 30,

I tende : I f o r

1942,1 1 1

fated

V

and to nature March 31, 1913, which were offered on December 24, were opened at the

Whnari

*re

Federal Reserve Banks on December 28*

a * 1 D ec

The details of this issue are as follows:

¡e a e u

Total applied for - $930,278,000
Total accepted
- 602,950,000

ta l aj
l a l ac

Range of accepted bids: (Excepting two tenders totaling $157,000)

nge o i
{ 15?,0

- 99.931 Equivalent rate of discount approx.
w
n
m
n
«
it
n
it
n
it
• 99.908
«
«
«
»
«

High
Low
Average price

- 99.905

0 ,2 7 3 %

0.376$

0.365$

(12 percent of the amount bid for at the low price was accepted)

Total
Applied For

Federal Reserve
District______

$ 20 , 042,000
628 , 932,000
27 , 264,000
20 , 691,000

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

15.544.000
17.740.000
93.968.000
14 ,521,000
19.489.000
9,355,000
12 522.000
50.210.000

$ 18,282,000
313,296,000
1 9 ,7 62 ,00 0
18 ,831 ,00 0
15.544.000
17 .390.000
93 ,848,000
14 ,521,000
19 ,489,000
9,255,000
12 ,522,000
50.210.000

$930, 278,000

$602,950,000

.

TOTAL

Total
Accepted

per annua
i

1

1

f
'

1

•
.

kn age 7 ic e
1 pe ! cen t

0

eders : l e s e n
jis tr î! t
joston;
» Y c;:
l i l a j : .p h ia
le ve l; id
chinai
ta n t
N :
• ld i 1

TREASURY DEPARTMENT
Washington
POR RELEASE, MORNING NEWSPAPERS,
29 , 1942 .

“H Eu es aay; December
m

h.2/2 8/4 2

Press Service
Ho* 34-76

The Secretary of the Treasury announced last evening that.the
[tenders for $600,000,000, or thereabouts, of 91-day Treasury bills
J66 be dated December 30, 1942 , and to mature March 3 1 , 1943 , which
pere offered on December 24 , were opened at the Federal Reserve
¡Banks on December 28,
The details of this issue are as followss
Total applied for - $930,278,000
j.otal accepted
- 602,950,000
Ba5ff ° £ ^ ? cepted kidsj

I
ri

(Excepting two tenders totaling

- 99.931 Equivalent rate of discount approx. 0 .273^ Per
annum
Low
- 99 #905
P
«
«
ir
„
”
0.376$ per
annum
Average - 99*908
n
0.365$ per
price
annum
High

112 percent of the amount bid for at the low price was accepted)
federal Reserve
istrict
oston
lew York
hiladelphia
Cleveland
IRichmond
planta
phicago
S t . Louis
linneap oils
Kansas City
Ifellas
Ian Francisco

ÜfUM

Total
Applied For
$ 20 ,042,000
628,932,000
27.264.000
20.691.000
15.544.000
17.740.000
93.968.000
*4,521,000
19.489.000
9,355,000
12 522.000
50,210,000

$ 18,282,000
313,296,000
19.762.000
18.831.000
15.544.000
17.390.000
93.848.000
14.521.000
19.489.000
9,255,000
12.522.000
50.210.000

$930,278,000

$602,950,000

.

TOTAL

Total
Accepted

-0 O0 «*

- 3 -

issue or on subsequent purchase, and the amount actually received either
upon sale or redemption at maturity during the taxable year for which the
return is made, as ordinary gain or loss*
Treasury Department Circular Ho* 418, as amended, and this
notice, prescribe the terms of the Treasury bills and govern the condi­
tions of their issue*

Copies of the circular may be obtained from any

Federal Heserve Bank or Branch.

&

0

a

m
-

2

-

Reserve Banks and Branches,following which public announcement will be made
by the Secretary of the Treasury of the amount and price range of
bids.

accepted

Those submitting tenders will be advised of the acceptance or

tion thereof.

rejec­

The Secretary of the Treasury expressly reserves the right

to accept or reject any or all tenders, in whole or in part, and his
in any such respect shall be final.

action

Payment of accepted tenders at the

prices offered must be made or completed at the Federal Reserve Bank in
cash or other immediately available funds on
The income derived from Treasury bills,

January

6

. 1943______ •

whether interest or gain

from the sale or other disposition of the bills, shall not have any exemption,
as such, and loss from the sale or other disposition of Treasury bills shall
not have any special treatment, as such, under Federal tax Acts now or here­
after enacted#

The bills shall be subject to estate, inheritance, gift, or

other excise taxes, whether Federal or State, but shall be exempt from all
taxation now or hereafter imposed on the principal or interest thereof by
any State, or any of the possessions of the United States, or by any local
taxing authority#

For purposes of taxation the amount of discount at which

Treasury bills are originally sold by the United States shall be considered
to be interest#

Under Sections 42 and 117 (a) (l) of the Internal Revenue

Code, as amended by Section 115 of the Revenue Act of 1941, the amount of
discount at which bills issued hereunder are sold shall not be considered
to accrue until such bills shall be sold, redeemed or otherwise disposed
of, and such bills are excluded from consideration as capital assets*
Accordingly, the owner of Treasury bills (other than life insurance com­
panies) issued hereunder need include in his income tax return only the
difference between the price paid for such bills, whether on original

IS0EÎ
iif

TREASURY DEPARTMENT

Washington
FOR RELEASE, MORNING NEWSPAPERS,

Mf7t

Thursday, December 31, 1942
vis
ipr
The Secreta ry of the tre a s u ry , "by t h is p u b lic n o tic e , in v it e s tenders
f o r $ 600,000,000

o r thereabouts, of

91 _~day Tre a su ry b i l l s , to be issued

on a discount b a s is under com petitive b idding.

be dated

January 6, 1943

The b i l l s

, and w i l l mature

when the face amount w i l l be payable w ithout in t e r e s t .

R;

be ?aj

of t h is s e rie s w ill

April 7, 1943
Si! 30, I

They w i l l be issue d in

¡fender
fcjies.up
tii Honda,
freasur,
ten i d
led on '

bearer form o n ly , and in denominations of ‘f’ljOOO, $ 5 ,0 0 0 , $ 10,000, $100,000,
$500,000, and $ 1 ,0 0 0 ,0 0 0 (m a tu rity v a lu e ).
Tenders w i l l be received at Federal Reserve Ranks and Branches up to the

War
c lo sin g hour, tiv’o ol clock p, m,, E a ste rn ^3t2S»3fia!££& tim e,

Monday, January

Tenders w i l l not be received at the Tre a su ry Department, Washington,

k» 1943 ,

Each tender

must be f o r an even m u ltip le of $ 1 ,0 0 0 , and the p ric e offe re d must be expressed
on the b a s is of 100, w ith not more than three decim als, e, g ,, 9 9 .9 2 5 ,
may not be used.

It

Fractions

i s urged that tenders be made on the pointed form s and for­

iiedia
lat ■ e ledei
Ilio bounce
lofi | amour
tinI tenders
then of, Th
rigi Id acc
¡part fed hi
iieni acce
feted at

Tenders w i l l be received w ithout deposit from incorporated banks and
t r u s t companies and from re sp o n sib le and recognized d ea lers in investment securi­

JZ

| 1 99.9:

¡ten fs be !
cid Invelo]
or [anches

coni' ti?

o r Branches on a p p lic a tio n th e re fo r.

Tpnders from o th e rs must be accompanied by payment of

11

fendere
jand ti
irs in 3
acc; •landed
jury ills aï
exp; ss guai

warded in the sp e c ia l envelopes which w i l l be sup p lie d by Federal Reserve Banks

t ie s ,

81

percent of the

face amount o f Tre a su ry b i l l s applied f o r , u n le ss the tenders are accompanied hy
an exp ress guaranty of payment by an incorporated bank or t r u s t company.

dial I avai

Immediately after the closing hour, tenders will be opened at the Federal

L

I
TREASURY L E P A R T M E N T
Washington

FOR RELEASE, M O R N I N G NEWS P A P E R S
Thursday, D e c e m b e r 31, 1 9 4 2
1 2 /3 0 / 4 2
1
----------

The Secretary of the Treasury, by this public notice,
viues tenders for $600,000,000, or thereabouts,
Treasury bills,
tive bidding.

m-

of 91-day

to be issued on a.discount basis under competi­
The bills of this series will be dated January

6 , 1943, and will mature April 7, 1943, when the .face amount

will be payable without interest.

'

They will be issued in bearer

form only, and in denominations of #1,000,- #5,000, #10,000,
tie issiMii

#100,000, #500,000, and $1,000,000 (maturity value).
Eranche”
r e ?eivfd at federal. Reserve Banks and
f V j T®°- 8 ? t o Tthe closing hour, two o'clock p. m., Eastern V/ar
time^ Iionday, January 4, 1943.
Tenders will not b4 received at
the Treasury Department, Washington.- Each'tender want be for
an even multiple of #1,000, and the price offered
be ex-pressed on the basis of 100, with not more than three decimals,
s. S.j 99.925.
fractions may not be used.
It is irreed that
tenders be made on the printed forms and forwarded in the speoial envelopes which will be supplied by Federal Reserve Banks
or Branches on application ’therefor#
•!.
b a n k P a n d Y i l P 1 b e r ?c e i v e ! w i t h o u t d e p o s i t f r o m i n c o r p o r a t e d
oan.,s a nd t r u s t companies a n d f r o m r e s p o n s i b l e a n d r e c o g n i s e d

f c c ™ f / ^ t m e n t securities,
Tenders from others S s t be
n n h i i t d by p a y m e n t of 2 percent of the face amount of Treaspri-^/oo1S
for, unless the tenders are accompanied by an
c o m p a n y . 7
?ayment by an incorporated bank or trust
| ,t + u l np ediatielD after the d o s i n g hour, tenders will be opened
at the lederal Reserve Banks and Branches, following which pubteab^
1 ni° ®nnouncement will be made by the Secretary of the Treasury
IfnP+P^wP
fi£ricf range of accepted bias. Those submitIE g
be advised of the acceptance or rejection
rieht°+o i P J ecret£ry °f the Treasury expressly reserves the
» lght 4°-,a? ? ept °r r e ieot any or all tenders, in whole or in
» art> cand his action in any such respect shall be final. Pav■ient of accepted tenders at the prices offered must be made or
ld?a?bep d aV fcrf Fideral Reserve Bank in cash or other immeI dlately availaole funds on January/ 6, 1943*

'}34-77

(O v e r )

2
T h e in c o m e d e r i v e d f r o m T r e a s u r y b i l l s , w h e t h e r i n t e r e s t
o r g a i n f r o m t h e s a l e o r o t h e r d i s p o s i t i o n 01 t h e b i l l s , s h a l l
n o t h a v e a n y e x e m p t io n , a s s u c h , a n d l o s s i r o m t h e s a l e o r
,
o t h e r d i s p o s i t i o n o f T r e a s u r y b i l l s s h a l l n o t h a v e a n jr s p e c i a l
t r e a t m e n t , a s s u c h , u n d e r F e d e r a l t a x A c t s n o w ^ o r h e r e a f t e r en­
a cte d »
T h e b i l l s s h a l l be s u b j e c t t o e s t a t e , i n h e r i t a n c e , g if t ,
or o t h e r e x c i s e t a x e s , w h e t h e r F e d e r a l o t S t a t e , b u t s h a l l be
e x e m p t f r o m a l l t a x a t i o n now o r h e r e a f t e r im p o s e d on t h e p r i n ­
c ip a l o r in t e r e s t th e re o f by any S ta te , o r any o f th e p o ssesn o n s o i t h e U n it e d S t a t e s , o r b y a n y l o c a l t a x in g a u t h o r it y .
F o r p u r p o s e s o f t a x a t i o n t h e a m o u n t o f d i s c o u n t a t w h ic h T r e a s ­
u r y b i l l s a r e o r i g i n a l l y s o l d b y t h e U n i t e d S t a t e s s h a l l be
c o n s id e r e d t o be i n t e r e s t .
U n d e r S e c t i o n s 42 a n d 1 1 7 ( a ) ( 1 )
o f t h e I n t e r n a l R e v e n u e C o d e , a s a m e n d e d b y S e c t i o n l i p o f th e
R e v e n u e A c t o f 1 9 4 1 , t h e am o unt o f d is 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 s h a l l n o t b e c o n s id e r e d t o a c c r u e u n t il
s u c h b i l l s s h a l l be s o l d , re d e e m e d o r o t h e r w is e d is p o s e d o f,
a n d s u c h 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 i t a l a s ­
se ts»
A c c o r d in g ly , t h e o w n e r o f T r e a s u r y b i l l s ( o t h e r th a n
l i f e 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 c e r n e e d i n c l u d e i n h is
in c o m e t a x r e t u r n o n l y 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 id
f o r s u c h b i l l s , w h e t h e r 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 am ount a c t u a l l y r e c e iv e d e i t h e r u p o n s a le o r re ­
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 m ade, a s o r d in a r y g a in o r l o s s .
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 Ho* 4 1 8 , a s a m e n d e d , a n d t h is
n o t i c e , p r e s c r i b e t h e t e r m s o f t h e T r e a s u r y o i l l s a n d g o v e rn
th e c o n d it io n s o f t h e i r is s u e .
C o p i e s o f t h e c i r c u l a r may be
o b t a in e d fro m a n y F e d e r a l R e s e r v e B an k o r B r a n c h .

-oOo-

3 4 - 1
FOR IMMEDIATE RELEASE,
December 29. 19h2>
The Bureau of Customs announced today preliminary figures showing the quan­
tities of coffee authorized for entry for consumption under the quotas for the

TheJ

twelve months commencing October

1, 19h2t provided

for in the Inter-American

Coffee Agreement, proclaimed by the President on April

Country of
Production

Signatory Countries:
Brazil
Colombia
Costa Rica
Cuba
Dominican Republic
Ecuador
El Salvador
Guat emala
Haiti
Honduras
Mexico
Nicaragua
Peru
Venezuela
Non-signatory Countries:
British Empire, except
Aden and Canada
Kingdom of the Netherlands
and its possessions
Aden, Yemen, and Saudi
Arabia
Other countries not signatories of the InterAmerican Coffee
Agreement

1/

:
:

Quota Quantity
(Pounds) JL/

1,535.367,083

520.0sU.629
33.019.26*
13,212,fl7
17,533,713

24,767,09*
99,6so,28h
SS,33h,hh2
h5,hoo,29S
2.908,617
78,758,056
32,*62,515
*,127,276
61,254,106
>
>
>
)
)
>
)
)
)
>
)

15, Ifhi,

Itltiei

as follows:

[the tw

:
Authorized for entry
:
for consumption
i
:
: As of (Date)
:
(Pounda)

Dec* 19, 19h2
»
M
fl
n
n
a
R
R
R
R
R
R
R

¡ricafl O'
loffs:

111,920,906
106,155,2*3 |
1.899,370 I
5,7*2,826 I
^,3^3*95h I
5,553,020
7,659,3^3 *
8,100,568

17,886,731

991,321
h,200,261*
67,386
2

11,3*7,803 j

oUtiy of

S i natoiy C
ftzil
olombia
oeta Eic¡
iba
jminican
piador
; [ Salvado
tatémala

BU
«duras
«ico
.caragua

Su
nézuela

51,653,77s

Quotas revised*
-0O0-

R

16,169,353 J

* jignatoq
¡jtlsb Su]
den and
agdoü of
and its ]
■ I» Temer
¡rabia
count
¡orles oi
merican
freement

TREASURY DEPARTMENT
Washington
foe immediate r e le a s e ,
Wednesday. December 30. iq ^p
— ~ 1-— ^

Press Service
Ho. 34-78

The Bureau of Customs announced today preliminaiy figures showing the
suantities of coffee authorised for entry for consumption under the quotas
for the twelve months commencing October

1

, 1942, provided for in the Inter-

taerican Coffee Agreement, proclaimed by the President on April 15. 1941, as
follows:

Countjy of Production

I

-y
j

Signatory Countries!
Brazil
Colombia
Costa Rica
Cuba
Dominican Republic
Ecuador
El Salvador
Guatemala
Haiti
Honduras
Mexico
Nicaragua
Peru
Venezuela

Quota Quantity
(Pounds) 1j

1,535,367,083
580,084,639
33*019,264
13,312,917
17,633.713
34,767,094
99,680,284
88,334,442
45*400,298
2,908,617
78,758,056
33,462,515
4,137,276
61,254,106

Non-signatoiy Countries:
>
British Empire, exceut
)
Aden and Canada
)
Kingdom of the Netherlands)
and its possessions
)
Aden, Temen, and Saudi
) 51,653,778
Arabia
)
Other countries notsigna-)
tories of the Inter)
American Coffee
)
Agreement
)
1/ Quot as revised.

Authorized for Entiy
— for consumption
As of (Date)
(Pounds)
Dec. 19, 1942
«
«

n
»

s
»
»
tt

»
•h
s
tt

H

111,920,906
106,155,243
1,899,370
5,743,836
4,343,954
5,553,020
V, 659,343
8*100,568
17,886,731
991,321
4,200,264
67,386

2
11,347,803

16*169*353

*

-V-■!>'

(a *
t^HL*

hcry

5

4 - i

Si

Secretary Morgenthau announced that the stabilization
A
arrangement of July 14« 1937, under which the Central Sank of
•¿r<5, jfV~o d~^"&
China has been enabled to obtain up to
in(ll*(s} dollar
exchange has been «»tended for a period of six month# beyond
December 31« 1942*
Secretary

S also announced that the Government of

China had completely liquidated all obligations which it had
incurred in the past under the 1937 arrangement*

China’s favorable

record under this arrangement« the Secretary declared, was another
example of China’s creditable dealings with the United States*
This arrangement was extended at the request of the Government
of China*

The Treasury« in accordance with its traditional policy

of giving full financial cooperation to the Chinese Government, was
pleased to agree to tills request, the Secretary stated* A «&*«-*<&■ t

TREASURY DEPARTMENT
Washington

FOR IMMEDIATE RELEASE,
Thursday. December 31! 1942.

Press Service
No, 34-79

Secretary Morgenthau announced today that the stabilization
arrangement of July 14, 1957, under which the Central Bank of
China has been enabled to obtain up to $50,000,000 in United
States dollar exchange has been extended for a period of six
months beyond December 31, 1942.
The Secretary also announced that the Government of China
had completely liquidated all obligations w hich it had incurred
in the past under the 1937 arrangement.
record under this arrangement,

C h i n a ’s favorable

the Secretary declared, was

another example of C h i n a ’s creditable dealings with the United
States•
This arrangement was extended at the request of the Govern­
ment of China.

The Treasury, in accordance with its traditional

policy of giving full financial cooperation to the Chinese
Government, was pleased to agree to this request,
said.

oOo

the Secretary

-

2~

ia excess of the withholding deduction» is required
on the entire amount of wages paid in January 1943
for the payroll period December 27, 1942 to January
2, 1943, inclusive.

/

TREASURY DEPARTMENT
Bureau of Internal Revenue
Washington« U M w
SOR IMMEDIATE RELEASE,
Thursday» December 31, 1942 ^

/ '

Press

/Vo,

o

Commissioner of Internal Revenue Quy T. Helvering today e4t»èeA—.
that inquiries received by the Bureau indicate that some confusion
exists concerning the understanding of employers with respect to their
liability for the withholding of the victory tax*
withholding is required if the established payroll period ends on or after January 1, 1943.

In such a

case the tax is required to be withheld from the full amount of the
wages paid in excess of the withholding deduction allowable.

However,

if the established payroll period ends on or before December 31, 1942,
no withholding is required.
EXAMPLES:

(l) In the case of an established semimonthly pay­
roll period ending on the 10th and 25th day of the month,
withholding, in excess of the withholding deduction, is
required on the entire amount of the wages paid in Janu­
ary, 1943 for the payroll period commencing December 26,
1942^ and ending on January 10, 1943.
(2) If the payroll period ends on December 31» 1942,
the established monthly payroll period ending on the last
day of the month, no withholding will be required.
(3) In the case of an established weekly payroll
period ending on the 2nd day of January 1943, withholding,

TREASURY DEPARTMENT
B u r e a u of I n f ernal R e v e n u e

Washington
FOR I M M E D I A T E RELEASE,
Thursday, D e c e m b e r 51,

Press S e r v i c e
Bo, 34-80

194.2

C o m m is s io n e r o f I n t e r n a l R e v e n u e G u y T .
th a t

in q u ir ie s

e x is t s

b y t h e B u re a u

c o n c e r n in g t h e u n d e r s t a n d in g

t h e ir l i a b i l i t y
.

r e c e iv e d

f o r t h e w it h h o ld in g

.M r , H e l v e r i n g

s a id

of

H e lv e r in g

in d ic a t e

s a id

to d a y

t h a t som e c o n f u s i o r

e m p lo y e r s w i t h r e s p e c t t o

o f th e V ic t o r y t a x .

t h a t w it h h c O a im ? i s

re cm -i-r^ ri -h *

tablished payroll period ends on or aitfr Januarv 1 d i£ilh
such a case the tax
4. ^\
71, , nuary l, 1943.

?S"
in

am o u n t o f t h e w a v e s ^ i d S
b 2 ^ t h h e l d i* o m t h e f u l l
a llo w a b le .
H o w e ve r 1 i f t h e e e ? e h i- i° £ t h e w it h h o ld i n s d e d u c t io n
o r b e f o r e D e c e m b e r ^ 1 1 o i ? e^ a b ^ h e d p a y r o l l p e r i o d e n d s on
u xe u e ce m o e r i l , 1 9 4 2 , no w it h h o ld in g i s r e q u ir e d .
E U M P IE S :
n
t h e c a s e o f a n e s t a b l i s h e d s e m im o n t h l v « c u
r o l l p e r i o d e n d in g on t h e 1 0 t h a n d 2 5 t h d a v o ? + h e P y "
m o n th , w i t h h o l d i n g , i n e x c e s s o f t h e w i t h h o l d i n g d.ep a i d i n ' J a n u a r y ',31 1 9 4 3 ° n f o r ^ h e ^ p a v r o l l 11^
0 f , t h e w aS e s
i n 6 D e c e m b e r 2 6 , 1942,’ a n d e n d i ^ f o f J a S r f l ^ ™ 6^ 0 ;

the
la lt
la s t

P e r i ° d e n d s on D e c e m b e r 5 1 , 1 9 4 2 .
d a v b o t i h f raoni b l y P a y r o l l p e r i o d e n d in g on t h e
d a y o f t h e m o n th , n o w i t h h o l d i n g w i l l b e r e q u i r e d .

p e r io P in d in e ho n °th e
w e e k ly ^
ro 1 1
h n iri-i^ c r
L on t n e
da^ o f J a n u a r y , 1 9 4 3 , w it h o u i r e d S ^n i h SX C e^
° f t h e W it h h o ld in g d e d u c t i o n ^ i s r e 1945 f o r t h e
aD,° ^
W ageS p a l d i n J a n u a r y ,
* a r

-oCo-

2

, 1

1 9 4 2 to

4

hit

V i c t o r y M x , 11 ThijSK t a x

Januar/ 1,
n o t Jv) 6 mad*

n t o s G

ffect ufttil /

HV i^ t r y t ax "^éeturn^w ill

IS^T, andt^te
y/ 1

1944.

o~

3

the amount of income subject to tax, the taxpayer ascertains

’

at a glance, from tables on the back of the form, the amount
of tax he owes.
The tables make allowance for personal exemption, earned
income credit, and deductions aggregating six percent of
gross income. This percentage is- used as an average of the
deductions which would be claimed if the simplified form were
not available♦
The Internal Revenue Service officials expect the
simplified form to be especially popular among the

several

million Americans who in 1943 will pay income taxes for the
first time.
If the taxpayer1s 1942 gross income exceeded §3,000,
or came in whole or in part from sources other than salary,
wages,

dividends,

use Form 1040

interest and annuities,

it is necessary to

in making a return. This form Calls for

detailed statements on income and also on all expenditures
which are claimed as deductions.
Form 1040 A

may be easily recognized because it is

a single sheet printed on buff paper. Form 1040 is a two-sheet
fold, on white paper.
A four-page instruction circular accompanies Form 1040.
It gives a digest of the principal income tax requirements
applying to individuals.

Thefo^s

- f ,
fo,r/Peturnjs/on 1 9 4 ^ inbomeaf contain no reference
x
/
y

to t h e ^ § w five/percenttax on*/gross
H

■f

/

¡i

i j i i S o raes,/eal 1 e ^ t h e

to shore stations .throughout the United States,

for allotment

to its ships.
In two instances, Army commanders in foreign war zones
ashed for and received authority to use their own resources
to reproduce the forms in sufficient numbers to meet the needs
of their troops. Cargo spac.e thus was saved.
Congress has authorized deferment of income tax returns
and payments for members of the military and naval forces who
are on sea duty or are outside the continental

United States

at the time the returns and payments fall due, but the Internal
Revenue Service was informed that many such fighters probably
would prefer to file their returns at the usual time,
Forecasts have come from Internal Revenue collectors
that the simplified individual income tax returh,

officially

designated as Form 1040 A, will find wide favor among those
reporting on 1942 incomes. This form may be used when the
income of the taxpayer —

including the total incomes of a

man and wife making a joint return —

does not exceed $3,000,

and when there are no sources of income other than salary,
wages,

dividends,

interest and annuities. Its use' also is

limited to "cash basis" returns, which means, generally
speaking,

that the taxpayer does not keep a set of books.

Use of the simplified form eliminates all but a very
few calculations for the income tax payer,

and the form is

^

s ©df-expo.ana,copy as to these few. After determining from them

Siler-draft of. release on income tax forms

d ' f-

8V

Printing of 180,000,, forms for individual income tax returns
on 1942 incomes has been substantially completed and distribution
of the forms to offices of the nation's sixty-four Internal
Revenue collection districts is well under way, it was
announced today by Commissioner G-uy T. Helvering of the Bureau
of Internal Revenue.
Where wartime difficulties of paper supply and transpor­
tation have delayed either production or shipment of the forms, '
every effort is being made to finish supplying the collection
offices within the

near future, Mr. Helve ring said. Collectors .

in turn are hastening the distribution of forms to the public,
*K-

by mailing copies to all income tax payers of record and by
supplying the forms in Quantities to postoffices,

^

banks, public

offices and employers generally.
Because of the war,

the forms are being sent literally

around ^ue world. Supplies of them have been requisitioned by
botii the Army and the Navy for use of men and women in the
services.

The-Army requested a sufficient number to supply
Sco

t«

s

aj~

the personnel of adJLtymlug military posts outside the
continental United States. The Navy reques ted shipment of forms

TREASURY REPART MENT
Bureau of Internal Revenue
Washington
FOR IMMEDIATE. RELEASE,
Saturday, January 2, 1943#

Press Service
No. 34-81

Printing of 180,000,000 forms for individual income tax re­
turns on 1942 incomes has been substantially completed and dis­
tribution of the forms to offices of the nation's sixty-four In­
ternal Revenue collection districts is well under way, it was
announced today by Commissioner Guy T. Helvering of the Bureau
of Internal Revenue.
Where wartime difficulties of paper supply and transporta­
tion have delayed either production or shipment of the forms,
every effort is being made to finish supplying the collection
offices within the near future, Mr. Helvering said. Collectors
in turn are hastening the distribution of forms to the public,
by mailing copies to all income tax payers of record and by sup­
plying the forms in quantities to post offices, banks, public
offices and employers generally#
Because of the war, the forms are being sent literally
around the world*
Supplies of them have been requisitioned by
both the Army and the Havy for use of men and women in the serv­
ices. The Army requested a sufficient number to supply the per­
sonnel of scores of military posts outside the continental
United States#
The Havy requested shipment of forms to shore
stations throughout the United States, for allotment to its
ships.
In two instances, Army commanders in foreign war zones
asked for and received authority to use their own resources to
reproduce the forms in sufficient numbers to meet the needs of
their troops.
Cargo space thus was saved.
Congress has authorized deferment of income tax returns and
payments for members of the military and naval forces who are on
sea duty or are outside the continental United States at the
time the returns and payments fall due, but the Internal Revenue
Service was informed that many such fighters probably would pre­
fer to file their returns at the usual time.
Forecasts have come from Internal Revenue collectors that
the simplified individual income tax return, officially desig­
nated as Form 1040 A, will find wide favor among those reporting

- 2 -

on 1942 incomes. This form may be used when "the income of "the
taxpayer-- including the total incomes of a man and wife mak­
ing a joint return^-- does not exceed $3,000, and when there
are no sources of income other than salary, wages, dividends,
interest and annuities.
Its use also is limited to 11cash basis”
returns, which means, generally speaking, that the taxpayer does
not keep a set of books.
Use of the simplified form eliminates all but a very few
calculations for the income tax payer, and the form is selfexplanatory as to these few. After determining from them the
amount of income subject to tax, the taxpayer ascertains at a
glance, from tables on the back of the form, the amount of tax
he owes.
,
The tables make allowance for personal exemption, earned
income credit, and deductions aggregating six percent of gross
income.
This percentage is used as an average of the deduc­
tions which would be claimed if the simplified form were not
a va iia bl e •
-p * j

^•n"^e-rrial Revenue Service officials expect the simpliform to be especially popular among the several million
Americans who in 1943 will pay income taxes for the first time.

1 led

If the taxpayer’s 1942 gross income exceeded $3,000, or
came in whole or in part from sources other than salary, wages,
interest and annuities, it is necessary to use Form
40 in making a return.
This form calls for detailed state­
ments on income and also on all expenditures which are claimed
as deductions.
^Form 1040 A may be easily recognized because it is a single
sheet printed on buff paper.
Form 1040 is a two-sheet fold, on
white paper.
*

A four-page

instruction circular accompanies Form 1040,

It gives a digest of the p r i n c i p a l income t a x r e q u i r e m e n t s a p ­
p l y i n g to individuals.

-0 O0 -

-

2

-

"I am especially pleased that almost all of the $3,906,000,000. increase
over our goal of $9*000,000,000 came from non-banking sources."

Treasury officials revealed that in addition to the borrowing, the
Treasury received during December approximately $2,700,000,000 in taxes
and other collections*

When added to the public debt receipts of

$12,906,000,000, this makes a total of $15,600,000,000 of funds received
last month.

_

__

W - g M I SEP DURING THE MONTH OF
DECEMBER T H R OUOH THE SALE OF
(In millions of¡-dollars)
?
From
Banking
Sources!
Treasury bills ...... ... $

From
Non-Banking
Sources

897

—

Total

$

897

7/8*¡0 Certificates .... ...

2,117

$l,b78

3,795

1-3A$ Treasury bonds

...

2 ,05^

1 ,0 0 3

3,061

2 - 1 / 2 Treasury bonds

•••

1

2,827

2,827

1.312

t— 1

1.014

1,014

$7, gjSU

$12,906

Tax notes -

É I
CV1

$ Sb
1,226

r—1
•»

Series A .........
Series C .........
Savings bonds Se,j?Ts^s

irielS
$5,072

^ r

"Sriiijt,

ÿ&vjbFor immediate release^
/i </i Me.
Secretary Morgenthau today announced final figures— a history.
making tooal of $12,906,000,000— in the Treasury*s December Victory
Fund Drive to enlist fighting American dollars against the Axis.
Together with tax revenue and the usual Treasury/¿ill and Certificate
of/£ndebtedness financing to be done in the meanwhile, this unex{
pectedly large subscription to the Treasury offerings by the invest­
ing public gives assurance, he said, that no further drive will be
necessary until early April.
nThe #12,906,000,000 of borrowing is a reflection of the scale
on which the war is being carried to the enemy in our growing offensives
the Secretary said.

HIt is a measure of the productive and milit|ary

might of America.
f^^ere 3-3 comfort for all of us in this grand response by the
j
peoplejto the war needs of the Treasury. The banks of the country
promptly and willingly did their allotted share of the lending for
their own account, and they are especially to be commended for the
manner in which they urged their own depositors to withdraw funds and
invest them in Treasury securities.

Insurance companies and other in­

stitutional investors also purchased large amounts.

Some hundreds of

thousands of individual investors were able to purchase the securities,
and thus rolled up the total to the largest figure in history for any
single borrowing operation.^

TREASURY DEPARTMENT
Washington
FOR IMMEDIATE RELEASE,
Saturday, January 2 , 1843.

Press Service
No. 34-82

Secretary Morgenthau today announced final figures--a history-making total of *$12,906,000,000-in the Treasury’s December
Victory Fund Drive to enlist fighting American dollars against
the Axis,

Together with tax revenue and the usual Treasury bill

and certificate of indebtedness financing to be done in the mean­
while, this unexpectedly large subscription to the Treasury offer­
ings by the investing public gives assurance, he said, that no
further drive will be necessary until early April,
The $12,906,000,000 of borrowing is a reflection of the
scale on whichthe war is being carried to the enemy in our
growing offensives, the Secretary said. uIt is a measure of
the productive and military might of America.
ihere is comfort for all of us in this grand response by
the people to the war needs of the Treasury. The banks of the
country promptly and willingly did their allotted share of the
lending for their own account, and they are especially to be
commended^ for the manner in which they urged their own deposi­
tors to withdraw^funds and invest them in Treasury securities.
Insurance companies and other institutional investors also pur­
chased large amounts. Some hundreds of thousands of individual
investors were able to purchase the securities, and thus rolled
up the total to the largest figure in history for any single
borrowing operation.
821 especially pleased that almost all of the
|3,906,000,000 increase over our goal of $ 9 ,000 ,000,000 came

from non-banking sources.1*

— 2 -

Treasury officials revealed that in addition to the borrow­
ing, the Treasury received during December approximately
$2,700,000,000 in taxes and other collections, When added to the
public debt receipts of $12,906,000,000, this makes a total of
$16,600,000,000 of funds received last month.
The following table shows funds raised during the month of
December through the sale of United States Government securities:
(In million s of dollars)
From
Banking
Sources

Treasury bills ....... $

From
Non-Banking
Sources

897

«

Total

$

897

7/8$ Certificates ....

2,117

11,678

3,795

1-3/4$ Treasury bonds.

'O
C
&j A&
u<*;u

1,003

3,061

2,827

2,827

1,312

1,312

1,014

1,014

$7,834

$12,906

2-1/2$ Treasury bonds.
Tax notes Series A ........
Series C‘ ... .

-

$ 86
1,226

Savings bonds -

$5,072

3

It applies to all civil employees of the United States, including the
President, and to all employees of states, counties and cities,
STe believe that the additional w o r k which withholding will impose
upon employers, and upon the Government, will be more than offset by the
convenience to the taxpayer and by the fact that at least to this extent
the taxpayer has been placed upon a pay-as-you-go basis.
We hope that this is the beginning of a system which will enable
people to pay a substantial part of all their taxes out of their current
income -

an arrangement which will be far more satisfactory to the

taxpayers and to the Treasury, and which should constitute a formidable
weapon with which to combat inflation.

starting «arch 15, Ï944* or in one lump sum —

like the regular income

tax
t'e are well aware that every new tax presents new questions and
you may have questions that I have not answered.

The Bureau of Internal

Revenue is anxious to help every taxpayer and every employer to a c o m p l e t e
understanding of the V i c t o r y tax, and will welcome inquiries addressed
to the Collector of Internal Revenue in your district, or to the
Commissioner of Internal Revenue at Washington, D. C,

/.-¡Jiiv'j ■

Of;- V

•

m m

-

dependent.
■ B n
iip
JSIite

pcpis
tea«*

'mm

2

-

This credit constitutes a refund of part of your Victory

tax and will be paid back to yon after the war.

However, if yon have

purchased certain Government bonds or wade payment cm your life insurance
policies or have reduced old debts in an amount equal to your credit,
you are entitled to immediate Victory tax credits, which i f be used
to hslp psy your income l a l ^ if you don*t owe any income tax, you may

mmmmwi

get a cash refund Immediately after March 15, 1944.
The Victory tax applies to 1943 income, and you will be required to
file a Victory tax return on or before March 15, 1944»
Thanks to a new withholding device, the payment of the Victory
tax will present for wage and salary earners no sudden problem or great
burden, because the money to pay that tax will already have been

i

collected and will be standing to your credit at the United States
isi

treasury.

■ gil

Tour employer will deduct from every wage envelope and pay

check during the year 5 percent of the amount in excess of |12 per
week, and turn that money over quarterly to the Collector of Internal

*
1
felifilfcs
slfe^sWm?;

Revenue as prepayment of your Victory tax»

Tour employer is required

to give you a written statement showing how much he has withheld from
y<**r *»£«« or salary in 1943.

Save that statement.

It is your Victory

m

tax receipt.
M s
m

special withholding feature applies to practically all wage

and salaried people with certain exceptions, such as members of the
armed forces, agricultural labor, domestic help, and casual labor.

mm

rSi

/3 1

Last October Congress enacted our first wartime tax measure*
The Revenue Act of 1942 established higher rates for Income and other
taxes*

It also introduced an entirely new tax, the Victory tax*

Because It Is a new tax and because we have received many questions
about It, a few words of explanation would seem appropriate*
For millions of Americans who are already buying War Bonds, the
Victory tax and the income tax to be paid this year supply the first
opportunity to contribute by direct taxation to meeting the rising
costs of war*
The Victory tax became effective «January 1st*

Everyone who has

Income over #624 a year other than interest from tax free securities
or capital gains must pay the Victory tax*
of

5 percent

The tax is st the rate

on income over this amount*

The Victory tax Is an additional tax on personal income, entirely
separate fro® the individual income tax*

You cannot deduct personal

expenses such as Interest payments, other taxes and charitable contribu­
tions*

However, If you are a farmer or in a profession or business you

are permitted to deduct ordinary business expenses*
You wiH^>e glad to know that there are certain credits which
reduce this Victory tax below

5 percent*

depends upon your personal status*

The amount of this credit

If you are single, you are entitled

to a credit of 25 percent of the Victory tax*
are entitled to a

40 percent

credit with

If you are married you

2 percent

for each additional

TREASURY DEPARTMENT
Washington
POR RELEASE, MORNING- NEWSPAPERS,
Sunday, January 3 , 1943.____ "■
1-2-43
*

Press Service
No. 34-83

(The following address by Assistant Secretary of the
Treasury John L. Sullivan over the Mutual Network
is scheduled to be broadcast at 10:15 p.m,. Eastern
War Time, Saturday. January 12 . 1943.

Last October Congress enacted our first wartime tax measure.
Act of 1942 established higher rates for income and other taxes.
introduced an entirely new tax, the Victory tax.

The Revenue
It also

Because it is a new tax and

because we have received many questions about it, a few words of explanation
would seem appropriate.
Eor millions of Americans who are already buying War Bonds, the Victory
tax and the income tax to be paid this year supply the first opportunity to
contribute by direct taxation to meeting the rising costs of war.
The Victory tax became effective January 1st. Everyone who has income
over $624 a year other than interest from tax free securities or capital gains
must pay the Victory tax. The tax is at the rate of 5 percent on income over
this amount.
The Victory tax is an additional tax on personal income, entirely separate
from the individual income tax. You cannot deduct personal expenses such as
interest payments, other taxes and charitable contributions. However, if you
are a farmer or in a profession or business you are permitted to deduct ordi­
nary business expenses.
You will be glad to know that there are certain credits which reduce this
Victory tax below 5 percent. The amount of this credit depends upon your
personal status. If you are single, you are entitled to a credit of 25 percent
of the Victory tax. If you are married you are entitled to a 40 percent credit
with 2 percent for each additional dependent. This credit constitutes a refund
of part of your Victory tax and will be paid back to you after the war. How­
ever, if you have purchased certain Government bonds or made payment on your
life insurance policies or have reduced old debts in an amount equal to your
creditt you are entitled to immediate Victory tax credits, which may be used
to help pay your income tax in March 1944,
If you don’t owe any income tax,
you may get a cash refund immediately after March 15, 1944,

a Victory \ ^ x ° ^ t u r n o ^ ¿ ^ e f o r e 9Mare1hCÍ5 !!,1 9 « . y0,1 W l U
present

1 ,6

required *° « 1 «

“ a

^

££.T«fe£r* T

^

<*Vi 5

Internal Hevenue asep r e p ^ e n t ™ f t^ u r mv i c t o ^ eta^Uaryonryel°lthe C?UeCtor of
to give you a written statement showing how m h he > J
- f “ ? 1?yfer i s rerihired
or salary in 1943. Save that statement “
y o ^ o T ^
l l Z T ^
a r i e d ^ o p l f w i t h e*rt2 ^ w a S &
t0
Practlcally a 1 1 ^
and aalargicultural labor? do^^tic h e l ^ ^ ^ ^ 1
1 £ o r "
£ * * ? * ” ? f°rCes'
employees of the United States, including the President a^ 1 ^ 3 1 ? all.oivil
of states, counties and cities.
S
¿resident, and to all employees
We believe that the additional work which withhold ■?-no» w^ i
employers, and upon the Government, will be more than a f f S J * * 1
to the taxpayer and by the fact that at least to this' extent
been placed upon a pay-as-you-go basis.

pay

part of

p s ; . and “

an

shOTild —

s u b je c rt o ^ t h e ^ ic t o ^

1W.

„

ln on*

s i H “£ E ;S

1

J

S

“

taxpayer has

enaWe Peo*>le to

H
•

•

1^°** np°n

°

cthat

° ^ e r t t e ri Wag f «fed s a la ry i s

a lso

« t ' i i i S ' S . ’S r 11” “ 1 f * “* “

r I

fe e ; r

of the Victory tar^nfl ^
i
^ employer to a complete understanding
^ taf* and W l 1 1 welcome inquiries addressed to the Collector of
internal Revenue m your district
+>,« n
• •
t collector oi
at Washington, D. o.
’ or to the Commissioner of Internal B e ^ e

-oOo-

X.

fi
January~2 y lÿw
STATUTORY DEBT LIMITATION •
AS OP DECEMBER 31. 19ÏÏ27
Section 2 1 of the Second Liberty Bond Act, as amended, provides that the
face amount of obligations issued tinder authority of that Act, "shall not exceed
in the aggregate $1 2 5 ,000 ,000,000 outstanding at any one time,"
The following table shows the face amount of obligations outstanding and
the face amount which can still be issued under this limitation:
Total face amount that may be
outstanding at any one time

?ol| Î:face
standi

$125,000,000,000

Outstanding as of December 3 1 , 1 9 **2 :
Int ere st-bearing:
Bonds «•
Treasury
$**9.268,120t650
Savings (maturity
value)*
1 8 ,**8 5 ,093,*100
Depositary
1 2 9 ,603,000
Adjusted Service
__ 7gi1.59g.657
Treasury notes
Certificates of
indebtedness
Treasury bills
(maturity value)

ef
t i # c e aï

Mug
Best-1
onds ffreasu
Saving
E vai
•Detosi
Idjusti

$62,607,409,707

2 1 ,1 6 3 ,74 7,3 0 0
1 4

,1 4

8

,9

6 ,6 2 6 .982.000

Matured obligations, on
which interest has ceased
Bearing no interest (U*S.
War Savings stamps)

Nastily
artifici
[indetti
fóasuiy
(maturi

6 7 ,5 0 0

■41.939.696,800
110,547,106,507

¡d oblìi
ih Intel
Beai |g no il
Saving!

64,918,100
221.540.388

110,833.364.995

face amount of obligations
issuable under above authority

(mount c
table un

É i4.i66.fi7R.mR

Reconcilement with Statement of the Public Debt
(On the basis of daily Treasury Statements)
December 31. 19*42!“
Total face amount of outstanding public debt obligations
issued under authority of the Second Liberty Bond Act,
as amended

$1

1 0

,8 3 3 ,3 6 4 , 9 9 5

\
Deduct unearned discount on Savings bonds (difference
between maturity value and current redemption value)
Add other public debt obligations outstanding but not
subject to the statutory limitation:
Interest-bearing (Pre-War, etc,)
195,969,620
Matured obligations on which
interest has ceased
1 0 ,324,20 0
Bearing no interest
5 6 5 >529^102
Total gross public debt outstanding December 3 1 , 19*12
*

3

Approximate maturity value.

■3.435,289,484

Total face ami
ed unde:
Inded

Deduc linearne
beti É § matu

107,398,075.511

771.822,922
=8lOg.l6q.898.453
= = * * _

Principal amount (current re^emot.ion value)

according to statement of the public debt on the basis of d a ily Treasury
Statements $15 ,0*+9,803 ,9 1 6 .

pubi
sull (et to t
erest-i
f e d ob:
Merest
j p g no

ÌPSS tnjV
Au limate
ccordia»

Januaïy 4, 1943.

STATUTORY DEBT LIMITATION
AS OF DECEMBER 31,
af

194

Section 31 of the Second liberty Bond Act, as amended, provides that th*.
face amount of obligations issued under authority of that Act wRh»n «^4in the aggregate $125,000,000,000 outstanding at W
one t toll*
“ * eXCeed
,
following table shows the face amount of obligations outstand-ftvo*
the face amount which can still be issued under this limitation:
**

*

Total face amount that may be
outstanding at any one time
$125,000,000,000
Outstanding as of December 31, 1942;
Int erest-bearing;
Bonds -*
Treasury
$49,268,120,650
Savings (Maturity
value)*
18,485,093,400
Depositary
129,603,000
Adjusted Service
734.592.657
Treasury notes
Certificates of
indebtedness
Treasury bills
(maturity value)

$68,607,409,707

21,163,747,300
14,148,967,500
6.626.982,000

Matured obligations, on
which interest has ceased
Bearing no interest (U. S.
War Savings stamps)

41.939.696.800
110,547,106,507
64,918,100
221.340r388

Pace amount of obligations
issuable under above authority

110.833.364,995

$_ 14,166.635.005

jteconpilement w ith Statement of the Public Debt
ijQ.fi. tke basis of Daily Treasury Statements)
December 31. 1942
Total face amount of outstanding public debt obligations
issued under authority of the Second Diberty Bond Act
as amended
$110,833,364,995
Deduct unearned discount on Savings bonds (difference
between maturity value and current redemption value)
Add other public debt obligations outstanding but not
subject to the statutory limitation;
Interest-bearing (Pre-War, etc.)
195,969.620
Matured obligations on which
interest has ceased
10.324 2 0 0
Bearing no interest
565;539:i02

3.435.389.484
107,398,075,511

,771.822.922

Total gross public debt outstanding December 31, 1942
*&*&>■
xavjasmv
$108,169.898.433
Approximate maturity value. Principal amount (current redemuticn

t Œ S f s l i § î 8 i § % , & î to Æ
34-84

debt *

treasury department

Washington
FOR RELEASE, MORNING NEWSPAPERS
Tuesday. January 5, 1943.______

Press Service
3

Yhe

j

The Secretary of the Treasury announced last evening that the tenders for
1600,000,000, or thereabouts, of

91-day

Treasury bills to be dated January

tende for ;

6 and to

to be Sated i

mature April 7, 1943, which were offered on December 31, 1942, were opened at the

preci 1 Beci

Federal Reserve Banks on January 4*
The details of this issue are as follows!

| det£

Total applied for - #1,242,588,000
Total accepted
600,104,000
Range of accepted bids;
i&Ek
Low
Average price

lai at
|al ac

(Excepting one tender of #4,000)

!nge of

- 99.925 Equivalent rate of discount anprox. 0.2973# per anmm
• 99.907
»
»
»
»
n
0.368# » *
* 99.910
w
«
»
«
»
0.357# " *

eh -

(13 percent of the amount bid for at the low price was accepted.)

lice Federal Reserve
District
Boston
New York
Philadelphia
Cleveland
Richmond
Atlanta
Chicago
St. Louis
Minneapolis
Kansas City
Dallas
San Francisco
total

Total
Applied For

Total
Accepted

$ 30,835,000

$ 14,894,000

674.072.000
24.650.000
16.530.000
14.362.000
10.144.000
356.435.000
10.198.000
6.176.000
19.640.000
8.750.000
70.796.000

160.729.000
5.145.000
5.184.000
7.041.000
4.235.000
352.817.000
7.650.000
4.902.000
11.053.000
4.137.000
22.317.000

11,242,588,000

1600 ,104,000

pent o

Beser
«stoni

F Yo:
miad ,phia

¡level:
Siete

itieaj .is
I I'sas : h
lllaS;
È

I

isco

TR EA SU R Y DEPARTMENT
W a s h in g t o n
FOR R E L E A S E , HORNING- NEW SPAPERS,

P re f’s Service
M o. 3 4 - 8 5 .

Tuesda ÿ , J a nu ar y ' .5 , 1943

■1/4/43
Ih e

S e c re ta ry

of* t h e T r e a s u r y a n n o u n c e d l a s t

t e n d e rs f o r $ 6 0 0 , 0 0 0 , 0 0 0 ,

o r th e re a b o u ts,

to be d a t e d J a n u a r y 6 a n d t o
■ p re d o r D e c e m b e r^ 3 1 >

1942*

e v e n in g t h a t , t h e

o f 9 1 -d a y T re a s u ry

m a tu re A p r i l

7,

1943,

b ills

w h ic h w e r e o f -

w e re o p en ed a t t h e f e d e r a l R e s e r v e

j Banks on J a n u a r y 4 .
. The d e t a ils

o f t h is

is s u e

a re as

f o llo w s t

T o t a l a p p lie d f o r - $ 1 ,2 4 2 ,9 8 6 ,0 0 0
T o ta l a cce p te d
606% 1 0 4 , 0 0 0
Range o f a c c e p te d b id s ;
L

[
Jj

H ig h

-

Low

-

.
A v e ra g e
p r ic e -

m.3 p e r c e n t

(E x c e p t in g

one t e n d e r o f $ 4 ,0 0 0 )

9 9 .9 2 5 E q u iv a le n t r a t e
x l" 'a " l „
..
..
9 9 -9 0 7
”
”

o f d is c o u n t a p p r o x .
"

»

«

9 9 -9 1 0

«

«

»

”

"

o f t h e am ount b id

f o r a t t h e lo w p r i c e

¡F e d e r a l R e s e r v e
p is t r a c t

T o ta l
A p p lie d

B o sto n
|e w Y o rk '
[ P h il a d e l p h i a

$ 3 0 ,8 3 5 ,0 0 0
6 7 4 ,0 7 2 ,0 0 0
2 4 .6 5 0 .0 0 0
1 6 .5 3 0 .0 0 0
1 4 .3 6 2 .0 0 0
10,144>000
35 6 , 4 3 5 } 0 0 0
10.198.000
6,1 7 6 , 0 0 0
1 9 .6 4 0 .0 0 0
8 ,7 5 0 ,0 0 0
7 0 .7 9 6 .0 0 0

(Cleveland
fci c h n o n d
[ A t la n t a
[C h ic a g o
* L o u is
M in n e a p o lis
[Kansas C i t y
B a lia s
Ban I r a n c i s c o

1st

TOTAL

Por

$ 1 ,2 4 2 ,5 8 8 ,0 0 0

- 0 O0 -

per
annum
0.366% p e r
annum
0.23%

0.351%

per
annum

w as a c c e p t e d . )
T o ta l
A c c e p te d
$ 1 4 ,8 9 4 ,0 0 0
160,729,000
5 .1 4 5 .0 0 0
5.1 8 4 . 0 0 0
7 .0 4 1 .0 0 0
4 .2 3 5 .0 0 0
3 5 2 ,8 1 7 ,0 0 0
7 .6 5 0 .0 0 0
4. 9 0 2 . 0 0 0
1 1 .0 5 3 .0 0 0
4 ,1 3 7 ,0 0 0
2 2 .3 1 7 .0 0 0
$ 6 0 0 ,1 0 4 ,0 0 0

%m
J

FOR IMMEDIATE RELIASE,
January
1943.

?

mS0
.-¡suM

The Bureau, of Customs announced today preliminary figures showing the quanti­
ties of coffee authorized for entry for consumption under the quotas for the twelve 1
months commencing October 1, 1942, provided for in the Inter-American Coffee Agree­
ment, proclaimed by the President on April

Country of
Production

Signatory Countries:
Brazil
Colombia
Costa Rica
Cuba
Dominican Republic
Ecuador
El Salvador
Guatemala
Haiti
Honduras
Mexico
Hiearagua
Peru
Venezuela

1,535,367,083

520,084,629
33,019,264
13,212,917
17,533,713
24*767,094
99,680,284
88,334,442
45,400,298
2,908,617
78,758,056
32,462,515
4,127,276
61,254,106

follows!

Wel Inonti»

Goffi:jareen

Quota Quantity
(Pounds) 3./

Ron-signatory Countries!
)
British Empire, except
)
Aden and Canada
)
Kingdom of the Netherlands)
and its possessions
)
Aden, Yemen, and Saudi
)
Arabia
)
Other countries not signa-)
tories of the Inter)
American Coffee
)
Agreement

1/

15, 1941, as

titl

Authorized for entry
for consumpt ion
(Date)
î

Dee. 26,

1942

Conn
Prod

i a . tai, 733
117,11(0,335
§.352.ta9

6,o6ta7ta
U,iiirt,ss9
5.96ta294

7¿59,3^3

8,l67,ita
19.398.2it9
991,321
ta372,786

67,386

11,31(7,803

oiy Con
il

jM a
a Bica

nican Ri
dor
alvador
Binala
i
Hor liras

Mes 30
Rie ragua
Pei¡

% :u e la

51,653,77s

Quotas revised.

- 0O0-

16,165,992

n-a jnatoiy
Bri sh Büpi
I in and C
Kin¡ Ion of t
a lits po
Me Yemen,
4¡ Ibia
countr:
fies of 1
irican C<
'eement

tas revi

TREASURY DEPARTMENT
Washington
JOB IMMEDIATE RELEASE,
Thursday. January 7. 1943«

Press Service
Do. 34-86

The Bureau of Customs announced today preliminary figures showing the quan—
tities of coffee authorised for entry for consumption under the quotas for the
twelvf months commencing October 1, 1942, provided for in the Inte^American
Coffee Agreement, proclaimed by the president on 4pril 15, 1941, as follows.*

Country of
Production

5
I
i Quota Quantity ;
Authorized for entry
: (Pounds) 1/ ; ___r. for consumption
As of (Date) ;
(Pounds)

Signatory Countries;
Brazil
Colombia
Costa Pica
Cuba
Dominican Republic
Ecuador
El Salvador
Guatemala
Haiti
Honduras
Mexico
Nicaragua
Peru
Venezuela
Non-signatory Countries;
)
British Empire, except
)
Aden and Canada
)
Kingdom of the Netherlands)
and its possessions
)
Aden, Yemen, and Saudi
)
Arabia
)
Other countries not signa-)
tories of the Inter)
American Coffee
)
Agreement

1/

1*535,367,083
520,084,629
33,019,264
13,212,917
17,533,713
24,767,094
99,680,284
88,334,442
45,400,298
2,908,617
78,758,056
32,462,515
4,127,276
61,254,106

51,653,778

Quotas revised.

-oOo-

Dec. 26, 1942
»
it

»
»
a
h
I!
It
If
It
It
IT
if

It

121,411,733
117,140,335
2,352,479
6,064,741
4,444,889
5,964,294
7,659,343
8,167,144
19,398,249
991,321
4,372,786
67,386
2
11,347,803

16,165,992

Hffi
- 3 -

issue or on subsequent purchase, and the amount actually received either
upon sale or redemption at maturity during the taxable year for which the
return is made, as ordinary gain or loss.
Treasury Department Circular No, 418, as amended, and this
notice, prescribe the terms of the Treasury bills and govern the condi­
tions of their issue.

Copies of the circular may be obtained from any

Federal Heserve Bank or Branch,

Reserve Banks and Branches,,following which public announcement will
by the Secretary of the Treasury of the amount and price range of
bids.

accepted

Those submitting tenders will be advised of the acceptance or

tion thereof.

be made

rejec­

The Secretary of the Treasury expressly reserves the right

to accept or reject any or all tenders, in whole or in part, and his
in any such respect shall be final.

action

Payment of accepted tenders at the

prices offered must be made or completed at the Federal Reserve Bank in
cash or other immediately available funds on

January

1

?t IQ4 3 _____

The income derived from Treasury bills, v/hether interest or gain
from the sale or other disposition of the bills, shall not have any exemption,
as such, and loss from the sale or other disposition of Treasury bills' shall
not have any special treatment, as such, under Federal tax Acts now or here­
after enacted.

The bills shall be subject to estate, inheritance, gift, or

other excise taxes, whether Federal or State, but shall be exempt from all
taxation now or hereafter imposed on the prinfiipal or interest thereof by
any State, or any of the possessions of the United States, or by any local
taxing authority.

For purposes of taxation the amount of discount at which

Treasury bills are originally sold by the United States shall be considered
to be interest.

Under Sections 42 and 117 (a) (l) of the Internal Revenue

Code, as amended by Section 115 of the Revenue Act of 1941, the amount of
discount at which bills issued hereunder are sold shall not be considered
to accrue until such bills shall be sold, redeemed or otherwise disposed
of, and such bills are excluded from consideration as capital assets.
Accordingly, the owner of Treasury bills (other than life insurance com­
panies) issued hereunder need include in his income tax return only the
difference between the price paid for such bills, whether on original

ß Btf
lingto

TREASURY DEPARTMENT
Washington

The i

EOR RELEASE, MORNING NEWSPAPER,

Friday, January 8, 1943

g tqnc
to
)iUs
The Secreta ry of the t re a s u ry , hy t h is p u b lic n o tic e , in v it e s tenders

re Apr
for $ 600,000,000

or thereabouts, of

91 -day Treasury bills, to be issued

on a discount basis under competitive bidding.

.ntere

The bills of this series will
toil

be dated

January 13, 1943

and will mature

when the face amount will be payable without interest.

April 14» 1943
They will be issued in

fende:
chea u;
bearer form only, and in denominaotions of $1,000, $5,000, $10,000, $100,000,
Mondi
reaeu:
$500,000, and $1,000,000 (maturity value).
eve multi]
Tenders will be received at Federal Reserve Ranks and Branches up to the on ie bas
F
99
War
closing hour, two o*clock t>. m., Eastern & fa o a fa o o t time, M o n d a y , J a n u a r y 1 1 , 1 9 4 3 ,. Jm&c on thi
w ill
kxx
IH
catioi
Tenders will not be received at the Treasury Department, Washington. Each tender

Tende:

must be for an even multiple of $1,000, and 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.

ban and
dea ers in

Fractions

acc mpanie
bi appi
pre guar
pan

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.
Tenders will be received without deposit from incorporated banks and

Immed:
at M Fedi
anrüpncemei
| amci at and

trust companies and from responsible and recognized dealers in investment securi- 1

mi

i

stary c
sject s
ties. Tpnders from others must be accompanied by payment of 2 percent of the
iy such
face amount of Treasury bills applied for, unless the tenders are accompanied by jjj| ie prie
Ban
Jar fj 13,
an express guarantj?- of payment by an incorporated bank or trust company.
Immediately a ft e r the c lo s in g hour, tenders w ill be opened at the Federal!

1

I Illl

FOR RELEASE, MORNING NEWSPAPERS
Friday, January 8, 19^3•_______

treasury d e p a r t m e n t

j W a s h in g to n

I / 7A 3

The Secretary of the Treasury, by this public notice, in-

4

vites tenders for $600,000,000,

or thereabouts, of 91-áay Treasury

bills, to be Issued on a discount basis under competitive bidding,
i The bills of this series will be dated January 13, 1943\ &*id w i l l ;
mature April 14, 1943, when the face amount will be payable with» ■ ■ *
'‘
:• r n I r a n
I
¡s il):
out interest. They will be issued in bearer form only, and in
denominations of $1,000, $5,000, $10,000, $100,000, $ 500 ,000, an.d
11,000,000 (maturity value).
Tenders will be received at Federal Resérve Banks and
Branches up to the closing hour, two o ’clock p. m., Eastern War
time, Monday, January 11, 1943.
Tenders*will not.be received at
the Treasury Department, Washington.
Each tender must.be for an
even multiple of $1,000, and the price offered must, be expressed
on the basis of 100, with not more tlfan three decimals> *e. g . ,
99*925.
Fractions may not be used.
It is urged that tenders be
.4 made on the printed forms, and forwarded in the special .envelopes
If which will,be supplied by Federal Reserve Banks or Branches on
application therefor. .
,
•
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 ex­
press guaranty of payment by an incorporated bank or trust com­
pany.
Immediately after the closing hour, tenders will be opened
i at the Federal Reserve Banks and Branches, following which public
[ announcement will be made by the Secretary of the Treasury of the
amount and price range of accepted bids.
Those submitting tenA ders 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.
Payment of accepted tenders
ji at the prices offered must be made or completed at the Federal
Reserve Bank in cash or other immediately available funds on
[ January 1 3 , 1943«
3 4 -3 7

(O v e r )

V
7

The income derived from Treasury bills, whether interest or
gain from the sale or other disposition of the bills, shall not
have any Exemption; ‘a s •such,.and loss from the sale or other dis­
position of Treasury bills shall not have any special treatment,
as such, under Federal.:t ax fAe ts now or hereafter enacted, ,The
bills shall be subject to estate, inheritance,' gift"; or other'ex~'
else* taxes, whether •Federal; or State,-but shall .be .exeippt ?from
all taxation now or hereafter imposed on the principal or interest
thereof by a$y Sftate, or any: o f .the possessions, of the. United,
States, or by any local taxing authority.
For'purposes of t a x a - ■
tion •the amount of discount at. which .Treasury bills are priginally
sold by, the United States shall be considered to be interest^ r'
f,:
Under Sections dJ-2 and 117 (a) (1/) of the Internal. Revenue Codp,
as amended by Section 115 of the Revenue Act' of 19^1', the amount :r
of discount- at which bills issued hereunder are acid., shall, not.
be considered to accrue until such bills shall be sold, redeemed ' ’
or otherwise disposed of, and such bills are excluded from,con­
sideration as capital assets.
Accordingly, the owner of Treasury-*bills (other than life* insurance companies ) issued .hereunder need
include In his income tax return only the difference between the
price paid for such bills* whether on original.IssUe-or on sub- •
sequent^purchase, and the amount .actually received either upon
sale or redemption at maturity during the taxable, year for which
the return i s 'm a d e , as ordinary gain or lo s s ,. J , i :
' \'’
Treasury Department Circular No;
this .
•
not ice; prescribe -the terms of th e ;Treasury.bills end govern the
conditions of their issue.
Copies of the circulai* itayrbe pb*^
talned.from any Federal Reserve Bank or Branch.
c-

3*iM

I

THEa SÜRI DEPARTMENT
Washington

FOR RELEASE, HORNING NEWSPAPERS
'•^Tuesday. January 12. 1943._____

l i HEL

Press Service

34

-

i

The Secretary of the Treasury announced last evening that the tenders for

► 0004

or thereabouts, of 91-day Treasury bills to be dated January 13 and to mature April

14

lesday
IP43

1943, which were offered on January 8, 1943, were opened at the Federal Reserve Banks oa
¡¡fpanuary 11.
The details of this issue are as follows:
SPjspgjg:

Total applied for - $1,228,004,000
Total accepted
601,142,000

ÜSf

Toto
Tot?

Range of accepted bids:
High
Low
Average price

- 99.93O Equivalent rate of discount approx. 0*277% per annum
- 9 9 .9 0 7
■
»
»
»
it
0 .3 6 8 J É n
n
- 99.908
n
«
»
»
n
0.363/É n
»

(39 percent of the amount bid for at the low price was accepted.)
m m

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prie

mm

m w l
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■

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1

S p R
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f n

Federal Reserve
District

Total
Applied For

Total
Accepted

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

$

29,560,000
785,684,000
37,825,000
29,013,000
19,630,000
15,290,000
122,342,000
34,010,000
21,837,000
28,765,000
18,988,000
85.060.000

$ 18,460,000
259,708,000
28.752.000
25.710.000
15.919.000
14.723.000
67.807.000
27.398.000
21.767.000
27.340.000
18.076.000
75.482.000

#1,228,006,000

1601,142,000

TOTAL

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■ M O M M I

TREA SU RY DE PA RTMENT
W a s h in g t o n
FOR R E L E A S E , MORNING N EW SPAPERS,
T uesd ay, Ja n u a ry 1 2 , 1 9 4 3 .
1 -1 1 -4 3
r — " — -------------The S e c r e t a r y
th e t e n d e r s
b ills

to

P r e s s S e r v ic e
N o. 3 4 -8 8

o f th e T r e a s u r y

announced la s t

f o r $ 6 0 0 ,0 0 0 ,0 0 0 , o r t h e r e a b o u t s ,

be d a te d

w e re o f f e r e d

e v e n in g t h a t

o f 9 1 -d a y T re a s u ry

J a n u a ry 1 3 an d to m a tu re A p r i l 1 4 ,

on J a n u a r y 8 , 1 9 4 3 ,

w e re o p e n e d a t

th e

1943,

w h ic h

F e d e ra l

R e se rv e B a n k s on J a n u a r y 1 1 .
The d e t a il s

o f t h is

T o t a l a p p lie d f o r
T o t a l a cce p te d

Is s u e

a re as

f o llo w s :

- $ 1 ,2 2 8 ,0 0 4 ,0 0 0
6 0 1 ,1 4 2 ,0 0 0

Range o f a c c e p t e d b i d s :
H ig h

-

Low
A v e ra g e
P r ic e

9 9 .9 3 0 E q u iv a le n t r a t e
p e r annum
- 99*907 E q u iv a le n t r a t e
p e r annum
- 9 9 ,9 0 8 E q u iv a le n t r a t e
p e r annum

(3 9 p e r c e n t o f th e am ount b id

fo r at

F e d e ra l R e se rv e
D is t r ic t

T o ta l
A p p lie d

fo r

B o sto n
New Y o r k
P h ila d e lp h ia
C le v e la n d
R ic h m o n d
A t la n t a
C h ic a g o
S t . L o u is
M in n e a p o lis
K a n sa s C it y
D a lla s
San F r a n c is c o

$

TOTAL

o f d is c o u n t a p p ro x .

0 * 2 r7r7%

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0 .3 6 8 /c

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w as a c c e p t e d . )

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3 7 .8 2 5 .0 0 0
2 9 .0 1 3 .0 0 0
1 9 .6 3 0 .0 0 0
1 5 .2 9 0 .0 0 0
1 2 2 .3 4 2 .0 0 0
3 4 .0 1 0 .0 0 0
2 1 .8 3 7 .0 0 0
2 8 .7 6 5 .0 0 0
1 8 .9 8 8 .0 0 0
8 5 .0 6 0 .0 0 0

$ 1 8 ,4 6 0 ,0 0 0
2 5 9 ,7 0 8 ,0 0 0
2 8 .7 5 2 .0 0 0
2 5 .7 1 0 .0 0 0
1 5 .9 1 9 .0 0 0
1 4 .7 2 3 .0 0 0
6 7 .8 0 7 .0 0 0
2 7 .3 9 8 .0 0 0
2 1 .7 6 7 .0 0 0
2 7 .3 4 0 .0 0 0
1 8 .0 7 6 .0 0 0
7 5 .4 8 2 .0 0 0

$ 1 ,2 2 8 ,0 0 4 ,0 0 0

$ 6 0 1 ,1 4 2 ,0 0 0

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in c o m e t a x e s

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a d d it io n

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t h e m . 11
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been l a id
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is

Jan .

in d iv id u a l
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F e d e ra l

e x p e n d it u r e s

o f m o re t h a n

f i s c a l y e a r 1 9 4 4 and

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ta x

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T re a s u ry D e p a rtm e n t.
M r. S u r r e y a d d r e s s e d t h e

th e

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a l l 1943

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t h e s e p r o b le m s ,

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f u n d s t h e F e d e r a l (G o ve rn m en t n e e d s ;

is

how b e s t

th e

seco n d

TREASU RY DEPARTMENT
W a s h in g t o n
FOR R E L E A S E , AFTERNOON N EW SPAPERS,
W edn esd ay, J a n u a r y 1 3 , 1 9 4 3 .
1 -1 2 -4 3
New Y o r k ,

Jan .

13

o f p la c in g

in d iv id u a l

c o lle c t io n

of

th e

--

The

in c o m e

ta xe s

at

S u rre y ,

ta x le g is la t iv e

s im p le s t ,

m o st e f f e c t iv e

m e th o d

t a x p a y m e n ts on a c u r r e n t b a s i s

th e

R e t a il D ry Goods A s s o c ia t io n

P r e s s S e r v ic e
N o. 3 4 -8 9

so u rc e

w as

t o ld

of

th e

h e re

in c o m e ,

is

th e N a t io n a l

to d a y b y S t a n le y

S.

c o u n s e l o f th e T r e a s u r y D e p a rtm e n t.

M r. S u r r e y a d d r e s s e d t h e a s s o c i a t i o n
A sp e c ts o f th e 19 4 3 T a x P i c t u r e . ”

on th e

s u b je c t ,

’’ Some

The P r e s id e n t ’ s B u d g e t m essag e to C o n g re s s , f o r e c a s t in g
F e d e r a l e x p e n d i t u r e s o f m o re t h a n $ 1 0 0 , 0 0 0 , 0 0 0 , 0 0 0 i n t h e f i s c a l
y e a r 1 9 4 4 a n d c a l l i n g f o r $ 1 6 , 0 0 0 , 0 0 0 , 0 0 0 i n new c o l l e c t i o n s ” b y
t a x a t i o n , s a v i n g s o r b o t h ” , p r e s e n t e d tw o f i s c a l p r o b le m s w h ic h
s e r v e a s a b a c k g ro u n d f o r a l l 1 9 4 3 t a x s t u d i e s , M r. S u r r e y s a id .
T h e f i r s t o f t h e s e p r o b l e m s , h e e x p l a i n e d , i s how b e s t t o
s u p p l y t h e f u n d s t h e F e d e r a l G o v e rn m e n t n e e d s ; t h e s e c o n d i s how
to a b s o r b e x c e s s p u r c h a s in g p o w e r a n d t h u s p r o t e c t th e n a t i o n ’ s
s t a b i l iz a t i o n p ro g ra m .
" T h e T r e a s u r y D e p a r t m e n t h a s s a i d f o r som e t im e t h a t t h e
b e s t m e th o d o f p l a c i n g t h e in c o m e t a x o n a c u r r e n t b a s i s i s
t h r o u g h c o l l e c t i o n a t th e s o u r c e , ” M r. S u r r e y d e c la r e d .
”If
s u c h c o l l e c t i o n w e r e m ade a p p l i c a b l e a t t h e n o r m a l p l u s f i r s t
b r a c k e t s u r t a x r a t e , t h e v a s t m a j o r i t y o f o u r t a x p a y e r s w o u ld
be p la c e d on a c u r r e n t b a s i s - - a b o u t 2 5 ,0 0 0 ,0 0 0 o f th e e s t im a t e d
3 5 , 0 0 0 , 0 0 0 in c o m e t a x p a y e r s .
I n a d d i t i o n , t h e y w o u ld h a v e t h e i r
in c o m e t a x e s a u t o m a t i c a l l y b u d g e t e d f o r t h e m . ”
The f o u n d a t io n s o f a c o l l e c t i o n a t th e s o u rc e sy ste m h a ve
b e e n l a i d i n th e 5 p e r c e n t w it h h o ld in g t a x on w ages and s a l a r i e s
w h ic h i s a f e a t u r e o f t h e V i c t o r y t a x , a c c o r d i n g t o M r , S u r r e y .
W it h 5 0 ,0 0 0 ,0 0 0 p e r s o n s s u b j e c t to th e V i c t o r y t a x an d
a b o u t 3 5 , 0 0 0 , 0 0 0 t o t h e r e g u l a r in c o m e t a x , ’’ in c o m e t a x a t i o n i s
now o n a s h i r t s l e e v e s r a t h e r t h a n a s i l k s t o c k i n g b a s i s , ” h e
p o i n t e d o u t , a d d in g t h a t ’’ t h e c a s e f o r c o l l e c t i o n a t t h e s o u r c e
ca n be r e s t e d u po n t h i s in e s c a p a b le f a c t a lo n e . ”

r 2
C o m p a r in g t h e

s a le s

ta x

a n d s p e n d in g s

ta x,

M r,

S u rre y

s a id :

m a n u f a c t u r e r ’ s o r a w h o l e s a l e r ’ s t a x w o u ld p l a y h a v o c
w it h p r i c e c o n t r o l s , a n d a r e t a i l s a l e s t a x w o u ld y i e l d l i t t l e
re v e n u e e x c e p t a t v e r y h ig h r a t e s .
The r e t a i l s a le s t a x o p e ra te s
on a p i e c e m e a l b a s i s a n d h e n c e i t c a n n o t s a t i s f a c t o r i l y p r o v i d e
th e n e c e s s a r y e x e m p t io n f o r t h e l o w e s t in c o m e b r a c k e t s , n o r t a k e
in t o a c c o u n t f a m ily s i z e an d d e p e n d e n c y s t a t u s .
N e it h e r can i t
d i f f e r e n t i a t e b e t w e e n l u x u r y s p e n d in g a n d e s s e n t i a l e x p e n d i t u r e s
e x c e p t on th e c ru d e and w h o lly u n s a t is f a c t o r y b a s is o f a c l a s s i ­
f i c a t i o n o f a r t i c l e s to be ta x e d a t d i f f e r e n t r a t e s .
’’ T h e s p e n d i n g s t a ? t , h o w e v e r , o p e r a t e s o n a n o v e r a l l b a s i s
an d t h u s , t h r o u g h e x e m p t io n s a n d p r o g r e s s i v e r a t e s , c a n a c c o m ­
p l i s h th e s e en d s q u it e r e a d i l y . ”
I n c o n t e m p la t i n g t h e w e i g h t o f t h e t a x b u r d e n , i t m u s t b e
re m e m b e re d t h a t b a c k o f t h e b u r d e n i s a r e c o r d f l o w o f in c o m e ,
M r, S u r r e y summed u p .
” $ n d e v e n t h e h e a v i e s t o f b u r d e n s i s m ade
l i g h t b y th e r e a l i z a t i o n t h a t i t i s a s m a ll p r i c e to p a y i f i t
w i l l h e lp u s o b t a in th e t h in g s t h a t a r e a t s t a k e i n th e w o r ld
t o d a y ,” he s a id .

- 0 O0 -

-

or after such date.**

2 -

Thus, the directive supplied by

Congress refers not to the period during which the wages
were earned but to the time when they were paid.
3.

The Commissioner of Internal Revenue has inter­

preted " A i d ” liberally to give employees the fairest
possible treatment.

He ruled that all wages wconstruc­

tively paid" before January 1, 1943, would be exempt
from withholding.

That is, wages for payroll periods

ending on or before December 31, 1942, even if actually
delivered in 1943, were held to be available in 1942 and
therefore not subject to Victory tax withholding.
4.

Where payroll periods overlapped 1942 and 1943

so that the first wage payment in 1943 covered some
income earned at the end of 1942, withholding was re­
quired on the whole amount, under the terms of the
Revenue Act of 1942.

Vfalta.i.neaissfli the probloni"iof 'employ ers
»pi4"esited alloua 113ÏÏ*

>m

»

For

3 /Treasury officials said today that the methods developed
for administering the withholding provisions of the new Victory

)

Tax were determined upon as the most equitable for all tax­
payers affected, under the terms of the statute imposing the
tax.

The Bureau of Internal Revenue has ruled that withhold-

<

ing from wages for the tax is required if the established
payroll period ended on or after January 1, 1943«
Inaccurate and misleading statements as to the Bureau’s
procedure have been given circulation by

writers who

have asserted that the law does not cover any money earned
late in 1942«
The Internal Revenue ruling was based upon the follow-

j

ing considerations:
1*

Withholding under the Victory Tax is a collec­

tion device rather than a tax in itself•

It is merely

an advance collection for which the taxpayer gets full
credit in March, 1944, when he files his income and
Victory Tax return.

If the amounts withheld by employers

exceed the combined income and Victory Tax liability, the
employee will receive a refund from the Collector of
Internal Revenue.

The withholding feature was designed

to help the taxpayer pay his 1943 Victory Tax when it
falls due in March, 1944.
2.

The Revenue Act of 1942 specifically directs

that withholding shall be effective on January 1, 1943,

and th g » "e At M iu ia A ii» and shall apply "to all wages . . .
paid on

i

TREASURY DEPARTMENT
W ashing ton
FOR RELEASE, MORNING NEWSPAPERS,
Wednesday, January 13, 1943.
1-12-43

Press Service
No. 34-90

Treasury officials said today that the methods developed
for administering the withholding provisions of the new Victory
Tax were determined upon as the most equitable for all taxpayer
affected, under the terms of the statute imposing the tax.

The

Bureau of Internal Revenue has ruled that withholding from wage
for the tax is required if the established payroll period ended
on or after January 1, 1943.
Inaccurate and misleading statements as to the Bureau’s
procedure have been given circulation by a few writers who have
asserted that the law does not cover any money earned late in
1942.
The Internal Revenue ruling was based upon the following
considerations;
1, Withholding under the Victory Tax is a collec­
tion device rather than a tax in itself. It is merely
an advance collection for which the taxpayer gets full
credit in March, 1944, when he files his income and
Victory Tax return. If the amounts withheld by employers
exceed the combined income and Victory Tax liability, the
employee will receive a refund from the Collector of
Internal Revenue. The withholding feature was designed
to help the taxpayer pay his 1943 Victory Tax when it
falls due in March, 1944.
2, The Revenue Act of 1942 specifically directs
that withholding shall be effective on January 1, 1943,
and shall apply ”to all wages . . . paid on or after
such date,” Thus, the directive supplied by Congress
refers not to the period during which the wages were
earned but to the time when they were paid.

2

3. The Commissioner of Internal Revenue has inter­
preted "paid" liberally to give employees the fairest pos­
sible treatment. He ruled that all wages "constructively
paid" before January 1, 1943, would be exempt from with­
holding, That is, wages for payroll periods ending on or
before December 31, 1942, even if actually delivered in
1943, were held to be available in 1942 and therefore not
subject to Victory Tax withholding.
4. Where payroll periods overlapped 1942 and 1943 so
that the first wage payment in 1943 covered some income
earned at the end of 1942, withholding was required on the
whole amount, under the terms of the Revenue Act of 1942.

oOo-

-

2

-

Corporation returns: 1940 and 1939, number of returns,
net income, deficit, and tax

(Money figures in thousands of dollars)
1940

Number of returns
Returns with net income L/t
Number of returns
Net income 1/
Tax liability:
Income tax
Declared value excessprofits tax
Returns with no net income l/:
Number of returns
Deficit 1/
Returns of inactive
corporations

1939

Inorea8 e or
deoreas e (-)
Number or Per cent
amount

516,783

515,960

823

•16

220,977
11,203,224

199,479
8,826,713

21,498
2,376,511

10.78
26.92

2/ 2,144,292

1,216,450

927,841

76.27

30,744

15,806

14,938

94.51

252,065
2,283,795

270,138
2,092,148

- 18,073
191,648

- 6.69
9.16

43,741

46,343

-

- 5.61

3/

2,602

y

"Net income" or "Deficit." for 1940, is the amount reported for declared
value excess-profits tax computation adjusted by exoluding net operating
loss deductions for 1939, is the amount reported for declared value
excess-profits tax computation and is the difference between "Total
income" and "Total deductions."

2/

Includes income defense tax.

3/

Includes declared value excess-profits defense tax.

I

i

TREASURY DEPARTMENT
Washington
POR RELEASE

'Y

fi

%»

Press Service

||l

3 ^ - f/

Secretary of'the Treasury Morgenthau today made public the first
of a series of tabulations in advance of the report "Statistics of In­
come for 1940, Part 2, Compiled from Corporation Inoome, Declared Value
Excess-profits, and Defense Tax Returns and Personal Holding Company
Returns," prepared under the direction of Commissioner of Internal
Revenue Guy T. Helvering,
]

SUMMARY DATA
Ihe number of corporation inoome, declared value excess-profits,
and defense tax returns for 1940 is 516,783, of which 220,977 show net
inoome of 111,203,223,957, while 252,065 show a deficit of #2,283,795,190,
and 43,741 have no income data (inactive corporations),

ttie income

tax is #2,144,291,692, and the declared value excess-profits tax is
$30,743,550.
The increase or decrease, 1940 over 1939, in the number of returns,
net inoome, deficit, and tax, follows*

TREASURY DEPARTMENT
Washington
FOR RELEASE MORNING NEWSPAPERS
Tuesday, January 19, 1943

Press Serv ice
No. 34-91

Se cre ta ry o f the Treasury Morgenthau today made p u b lic the f i r s t
o f a s e rie s o f ta b u la tio n s in advance o f the report " S t a t i s t i c s o f In ­
come fo r 1940, P art 2 , Compiled from Corporation Income, D eclared Value
Excess—p r o f i t s , and Defense Tax Returns and Personal Holding Company
R etu rn s," prepared under th e d ire c tio n o f Commissioner o f In te r n a l
Revenue Guy T . H elv erin g .
SUMMARY DATA
The number o f corporation income, declared value e x c e s s - p r o fit s ,
and defense ta x return s fo r 1940 i s 516,783, o f which 220,977 show net
income o f $11,203,223,957, w hile 252,065 show a d e f i c i t o f $2,283,795,190
and 43,741 have no income data (in a c tiv e co rp o ra tio n s).

The income

ta x i s *2 ,14 4 ,2 91 ,6 9 2 , and the declared valu e e x c e s s -p r o fits ta x is
$30,743,550.
The in crease or d ecrease, 1940 over 1939, in the number o f r e tu r n s ,
net income, d e f i c i t , arid t a x , fo llo w s :

Corporation returns? 1940 and 1939, number o f re tu rn s ,
net income, d e f i c i t , and ta x
(Money fig u r e s in thousands o f d o lla r s )

1940
Number o f returns
Returns w ith net income l / :
Number o f returns
Net income 1/
Tax l i a b i l i t y ?
Income ta x
D eclared value e x ce ssp r o fit s ta x
Returns w ith no net income 1/?
Number o f returns
D e fic it 1/
Returns o f in a c tiv e
corporations

1939

In crease or
decrease
_________
Number or Per cent
amount
.1 6
823

j=)

516.783

515.960

220,977
11,203,224

199,479
8,826,713

21,498
2,376,511

10.78

2/

2,144,292

1 ,216,450

927,841

76.27

3/

30,744

1 5 ,8 0 6

14,938

94.51

252,065
2,283,795

270,138
2 ,092,148

- 18,073
191,648

- 6.69

43,741

46,343

-

- 5.61

2,602

2 6 .9 2

9 .1 6

1/ “Net income*1 or “ D e fic it,* * fo r 1940, i s the amount reported fo r declared
value e x c e s s -p r o fits ta x computation ad ju sted by exclu d in g net operating
lo s s deduction; fo r 1939, i s the amount reported fo r declared value
e x c e s s -p r o fits ta x computation and i s the d iffe re n c e between “ T o tal
income** and “ T o ta l d e d u ctio n s,”
2/ In clu d es income defense t a x ,
3/ In clu d es declared value e x c e s s -p r o fits defense t a x .

-3 RETURNS INCLUDED
The data presented in these tabulations are# in general, from returns
for the calendar year ending December 31, 1940. However, data from a con­
siderable number of returns for a fiscal year, ending within the period
July 1940 through June 1941, are tabulated with the calendar year returns*
There are also included part year returns with the greater part of the
accounting period in 1940#
Data are tabulated from returns, (l) Form 1120 filed by domestic
corporations and resident foreign’corporations other than those which are
exempt from tax under section 101, Internal Revenue Code as amended, and
(2) Form 1120L filed by domestic life insurance companies and by foreign
life insurance companies carrying on insurance business within the United
States or holding reserve funds upon business transacted within the United
States. The data are tabulated from the returns as filed by the taxpayer,
and prior to revisions that may be made as a result of audit by the Bureau
of Internal Revenue. Data from amended returns or tentative returns are
not included in the tabulations*
CHANGES IN LAW AFFECTING CORPORATION RETURNS
The Internal Revenue Code, as amended by the Revenue Act of 1939 and
the two Revenue Acts of 1940, introduces certain changes which affect the
computation of the taxable net income and the income tax of corporations
having taxable years beginning after December 31, 1939* The most significant
changes are: (l) Increase in the rates of income tax (including income
defense tax) for domestic corporations (other than mutual investment compa­
nies).
The rates are as follows:
Normal-tax
net'income of
$25,000 or less

14.85 per cent of the fii*st $ 5;000
16.5 per cent of the no?:t 15;000
5,000
18.7 per cent of the next

Normal-tax net
income over
$25,000 and not over
$31,964.30

38.3 per cent of ammmt over $25,000
plus U,-152.50

Normal-tax net
income over
$31,964.30 and not
over $3£,565.89

36.9 per cent of amount over $25,000
250
plus

Normal-tax net
income over
$38,565.89

24 per cent of the entire amount of
normal-tax net income

- AResident foreign corporations regardless of amount of normal-tax net
income, and mutual investment companies regardless of amount of adjusted
net income less the basic surtax credit are taxed at the 24 per cent rate.
(2) 11Net operating loss deduction** is allowed (except to mutual invest­
ment companies) for taxable years beginning after December 31, 1939, and
for the first such year represents the excess of statutory deductions
over statutory gross income of the preceding taxable year, subject to
certain exceptions and limitations*
(3) Gains and losses from sales or exchanges of capital assets are
classified as ’’short-term” or ’’long-term*” A short-term capital gain or
loss results from the sale or exchange of a capital asset held for 18
months or less$ a long-term capital gain or loss, from the sale or exchange
of a capital asset held for more tlian 18 months.
A net short-term capital gain and a net long-term capital gain or
loss are included in computing net income for the current yearj but a net
short-term capital loss is not deductible in computing net income for the
current year. Such loss may be carried over and treated as a short-term
capital loss in the succeeding taxable year, in an amount not in excess
of the net income for the year in which the loss was sustained.
For the previous taxable year a net capital gain was included in net
income, and the deduction for capital loss in excess of gain was limited
to $2,000.
(4)^ Amortization of the cost of emergency facilities necessary for
national defense may be deducted. In general, the cost of such facilities
completed or acquired after June 10, 194.0 may, at the election of the
corporation, be written off over a five-year period instead of through
the ordinary allowance for depreciation based on estimated useful life.
DEFINITIONS
HNet income’1 or ’’Deficit” for 1940 is the amount reported for
declared value excess-profits tax computation adjusted by excluding the
net operating loss deduction*
nIncome tax” for 1940 includes the income defense tax and does not
take into account any credit claimed for income tax paid to a foreign
country or United States possession*

- 5- '
The "Declared value excess-profits tax" for 1%0 is the amount
^Ixo-billtyand «eludes the declared value excess-profits
T
13 taken as a dedu°ti°n in the computation of
f°n income tax purposes unless the return-is rendered on a
thra^mt’o f ^ i 8 °^Sh ?aS1S °f acoounting is used, the deduction is
taxable ^ a f c ^ ^ r b y Vtte eree^ : " Fr0fitS * *

Within the

•tot-al compiled receipts** as tabulated consists of cross sal©«? hpq<?
returns and allowances), gross receipts from operations-(wLre inventorLs
„f
factor), taxable interest, rente S d r S
ties, net short-term capital gain, net long-term capital gain net cain
from sale or exchange of property other than capital assets, dividends
otner receipts required to be included in gross income, and tax^xernot'
interest received on Government obligations. "Total compiled receipts*»
excludes nontaxable income other than tax-exempt interest received on
certain Government obligations.
received on

DATA AND CLASSIFICATIONS
. **
*±TSt of the
attached tables, there are shown, by States
and Territories and by returns with net income and with no net income the
number of returns, total compiled receipts, net income, defSit tS^’and
dividends paid in cash and assets other thin own stock!
' d
taxabllTretern« ^ ble.si.
10WSi
of returns a n T n ^ f n c ^ f T r
lhc°T b T S i c i t l u ^ s ! * r e W
provision?*oft?? w
in ^ T O

returns, net income, and tax for
£ ? "
defl0it f°r r°turnS "ith n°

data» 1
consideration should be given the special

d ld u ctio n e 1
?TOnUe C° de a f f e c t i n S the computation o f gross
, dedu ctio n s, and net income o f insurance companies. Of r*ar*-Monia-r.

S deriurt^on»
tj-d
nds’ and rents in & oss income a«d allowing
as deductions the earnings needed to maintain reserve funds required bv
a ^ S g ’s o f f°T dlyldends: For W40, the deductions-for these reserves
wteh n S ’toco^ retUrnS Tath w t in°0TO ^ »33,215,101 for returns

6

Table 1. - Corporation returns, 1940, by States and Territories for returns with net income and with no net income:
returns, total compiled receipts, net income, deficit, income tax, declared value excess-profits tax,
and dividends paid in cash and assets other than own stock
—
States and
Territories 1/
1

(Money figures in thousand 9 of dollars!
Keturns w i t h nei. income 0 /
--- — --Returns with no net' Income
Declared Dividends
Total
Number Total
Net
Income value
paid in
Number Total
number
of
conpiled
income 5/
tax 5/ excess- cash and of
compiled
Deficit &
of re­
returns receipts 4/
profits
assets
returns receipts 4/
turns 2 /
tax 6 /
other
than own
stock

[ l Alabama
l 2 Alaska
! Arisons
4 Arkansas
{ California
g Colorado
7 Connecticut
8 Delaware
9 Diet, of Columbia
10 Florida
U Oeorgia
f 12 Hawaii
IS Idaho
14 Illinois
15 Indiana
16 Iowa
17 Kansas
1 |18 Kentucky
i 19 Louisiana
«0 Maine
! |1 Maryland
2 Massachusetts
i 15 Michigan
J4 Minnesota
is Mississippi
It Missouri
M Montana
f8 Nebraska
i Nevada
D New Hampshire
11 New Jersey
1 112 New Mexico
jtS New fork
I 154 North Carolina
! 55 North Dakota
1 56 Ohio
57 Oklahoma
58 Oregon
59 Pennsylvania
10 Rhode Island
11 South Carolina
12 South Dakota
IS Tennessee
14 Texas
! 15 Utah
16 Vermont
! 11 Virginia
[48 Washington
w9 West Virginia
SO Wisconsin
SI Wyoming

5,591
282
1,586
2,554
24,261
5,126
9,548
5,175
2,679
9,487
5,475
824
1,944
54,905
12,474
7,228
4,247
4,778
6,092
5,568
6,095
25,652
16,667
9,957
2,518
14,500
2,502
4,162
909
1,479
28,450
962
125,855
6,241
2,195
24,758
5,508
4,725
24,522
5,505
5,454
2,154
4,751
15,711
2,555

Total

516,785

1 ,2 2 0

7,085
10,524
4,748
14,767
1,152

[tor footnotes, see page g

I

II

Number of

1,761
109
564
1,582

575,655
10,695
128,255
295,576
5,615,856
574,166
2,257,519
1,755,006
610,596
744,815
1,078,685
556,626
142,945
15,711,900
1,955,174
1,055,549
605,960
1,006,456
854,898
400,511
1,224,592
4,956,909
9,026,052
2,095,059
251,675
5,521,044
191,688
490,250
272,115
201,076
5,625,179
71,615
52,827,987
1,571,579
86,561
8,405,811
942,768
529,060
10,414,579
705,255
529,699
100,816
972,702
5,125,556
265,558
156,587
1,278,754
1,069,557
659,082
2,178,269
52,101

45,682
1,525
8,226
19,509
499,055
51,056
224,109
488,952
51,559
54,776
85,692
55, 522
15,565
921,585
158,165
57,595
59,291
75,280
65,400
50,054
126,154
567,955
871,227
155,041
15,801
265,294
14,601
56,505
14,545
15,646
411,971
4,265
5,217,576
151,229
5,447
750,664
74,716
54,982
924,601
59,709
55,524
4,447
65,856
215,457
22,070
15,064
145,858
95,976
49,241
169,554
4,680

8,908
258
1,611
5,871
96,611
10,056
46,996
69,504
9,244
10,156
17,821
6,510
2,600
187,529
52,004
10,756
7,800
15,482
12,294
5,857
22,486
71,220
188,896
25,750
2,556
55,292
2,898
7,581
2,587
2,776
70,192
755
567,095
27,799
574
159,548
15,214
7,052
180,664
11,994
6,780
782
15,520
42,859
4,097
5,109
51,197
17,781
9,754
55,628
711

220,977 125,180,472 11,205,224

2,144,292

1 0 ,1 1 1

1,875
4,220
1,617
1,442
5,955
2,994
571
698
16,241
5,851
5,658
2,214
2,466
2,796
1,426
2,957
10,284
7,728
4,505
1,215
6,645
1,117
1,905
502
706
9,555
455
42,048
5,626
952
12,959
2,205
1,954
10,855
1,464
1,800
918
2,625
7,566
1,108
521
5,965
5,986
2,595
6,564
591

571
4
14
70
1 ,1 2 0

105
1,027
290
102

207
510
58
46
2,590
675
170
41
18$
255
282
404
1,655
1,780
217
64
468
58
58
11

56
795
21

14,165
561
5,547
7,127
504,849
51,886
94,954
555,715
51,102
21,990
58,408
19,554
7,785
451,962
62,542
26,550
21,405
58,795
57,284
15,721
71,515
198,578
595,222
61,545
6,245
159,841
8,625
19,696
8,050
8,485
221,591
1 ,6 8 6

6,579 1,899,785
511
59,155
16
1,409
5,500
555,201
49,205
105
145
12,452
420,788
5,299
516
28,924
157
9,161
2,566
12
27,052
516
456
142,958
56
12,598
5,677
70
884
62,415
47,256
589
149
25,565
64,162
955
2,525
25

1,455
125
625
908
11,105
2,556
4,565
1,?16
1,056
4,581
2,258
250
658
15,579
4,902
2,667
1,796
1,994
2,748
1,806
2,544
12,250
6,590
4,069
1,105
6,559
1,055
1,792
599
722
17,056
401
74,567
2,548
896
10,489
2,614
2,154
11,499
1,768
1,404
974
1,874
6,887
1,058
652
2,718
4,402
2,054
6,596
445

89,871
4,151
41,205
42,175
1,259,552
155,556
475,555
104,005
198,970
188,011
156,057
25,908
19,007
1,955,557
557,577
189,475
217,514
175,488
204,487
155,877
467,848
1,287,045
626,951
456,029
65,719
714,829
57,216
109,051
14,700
55,710
1,165,514
16,657
6,614,769
167,696
26,852
1,196,051
571,160
141,578
1,467,145
162,705
71,257
26,982
145,794
566,865
65,987
52,756
205,987
210,571
142,009
425,855
15,825

6,586
445
5,526
2^955
155,'229
14,420
44¡185
59',280
7,897
19,194
8,790
1,541
1,902
259,280
27,020
22,877
9,705
9,661
12,927
7,672
28,814
152,720
60,488
56,867
4,496
62,768
5,105
14,592
1,895
5,152
185,071
1,155
656,415
9,458
1,711
80,656
24,221
12,584
150,812
9,401
5,509
1,105
10,942
58,555
5,625
5,552
25,922
24,571
10,501
46,270
902

50,744 5,888,525 252,065 25,056,516 2,285,795

5/

Dividends
paid in
cash and
assets
other
than own
stock
875
51
447
155
20,641
'454
7,466
5^129
'507
1,275
706
555
277
8,955
948
1,507
2,646
2,679
1,420
655
4,875
6,675
2,881
2^167
451
4,674
551
729
178
505
16,511
101

52,128
2,527
225
11,742
6,690
1,646
9,720
1 ,0 2 1

151
40
2,152
7,127
159
175
1,956
1,689
1,024
5,252
157
200,457

1
2
5
4
5
6

7
8

9
10
11
12

15
14
15
16
17
18
19
20
21
22

25
24
25
26
27
28
29
50
51
52
55
54
55
56
57
58
59
40
41
42
45
44
45
46
47
48
49
50
51

- 7-

Tabi* 2. - Corporatton retoms, 1940, ^thnetincome by net income classe*: Taxable, by type of tax liability, showing number
of returns, net income, and tax; Nontaxable, showing number of returns and net income: and
corporation returns with no net income by deficit classes,
showing number of returns and deficit
iN»t Income and deficit classes and money figures in thmmanri» 0f dollars')
Returns with net income s7~_________
Total

I(etincome classes 5/

r

Number
of
returns

»

j

U n d er 1

1under 2
2under 3
< ; under 4
i4under 5
] $ under 10
10under 15
I IS under 20
20 under 25
25under 50
50under 100
100under 250
|250under 500
¡500under 1,000
jl,000 under 5,000
¡5,000under 10,000
20,000 and over

!
i

1

Total

220,977

¿Net income and
Ideficlt classes 3/

rader 1
iunder 2
¡under 8
under 4
under 5
under 10
jOunder 15
ISunder 20
0 under 25
ISunder 50
under 100
¡DO-under 250
I¡50 under 500
IlOOunder 1,000
[IjOOO under 5,000
¿000 under 10,000
¡^,000 and over
Total
■Rr footnotes

77,282
27,056
16,615
11,955
9,803
24,508
11,950
7,245
5,703
11,058
7,355
5,539
2,220
1,257
1,166
158
127

see page 8

Net
income

£ /

27,791
39,206
40,944
41,5a
44,047
174,912
146,761
125,475
128,152
388,485
515,462
858,466
782,570
871,395
2,424,760
1,137,565
3,455,712

Income
tax 5/

Declared
value
excessprofits
tax 6/
116
190
207
219
248
928
764
614
578
1,788
2,420
5,876
2,960
2,918
8,034
1,480
5,401

62,892
21,406
12,927
9,256
7,700
18,836
9,151
5,622
4,465
8,469
5,435
4,039
1,634
889
857
119

11,203,224 2,144,292

30,744

2,329
1,761
1,590
544
525
289
37
25

2,279
4,914
6,187
7,142
7,578
33,Ä 4
29,685
24,312
24,868
82,111
123,982
214,168
192,580
250,170
575,659
276,921
602,102

313
677
852
980
1,047
4,735
4,393
5,674
5,823
16,814
27,989
48,218
43,359
51,595
129,756
62,937
134,129

115
188
207
219
248
928
765
614
578
1,788
2,415
5,876
2,960
2,918
8,054
1,480
5,401

31,391

2,437,872

535,269

30,754

1,111

Income tax only 7/
Net
Income
income 3/
tax 5/

5,412
4,880
5,141
5,300
5,757
23,447
20,526
17,795
18,766
73,520
106,165
175,482
158,937
177,079
481,611
a9,a5
647,259

Taxable - Continued
Both Income and declared value
excess-profits tax
Number
Net
Income
Declared
of
income j/
tax 5/
value
returns
excessprofits
tax 6/
5,465
5,568
2,494
2,059
1,685
4,668
2,430
1,411

Number
of
returns

102

22,538
31,028
31,833
32,168
34,603
154,673
112,593
97,533
100,466
297,544
380,559
£27,226
574,933
624,687
1,798,070
844,675
2,853,609

3,099
4,203
4,289
4,320
4,710
18,712
16,133
14,121
14,942
56,706
78,177
127,264
115,598
125,485
351,855
156,278
515,130

173,799

8,598,738

1,609,023

Nontaxable 9/
Number
of
returns

Net
income £/

2,970
5,256
2,915
2,208
1,862
6,988
4,446
3,630
2,798
8,769
10,699
17,072
15,057
16,558
51,031
15,969

15,749

Declared value excess-profits
tax only 8/
Number
Net
Declared
of
income 3/ value
returns
excessprofits
tax 6/

38

Returns with no
net income 3/
Number
of
returns

146,742
52,995
17,160
10,475
7,059
16,443
6,601
5,505
2,153
4,448
2,287
1,554
454
201
179

22

a

Deficit 1/

43,090
47,285
42,074
36,298
51,484
115,442
80,490
60,635
48,203
155,092
157,125
206,150
154,145
138,088
567,625
160,337
440^256

166,205 LJ/ 295,806 2,283,795

409

Footnotes for tables 1 and 2
| JiJ Returns filed in a State may not be a
complete coverage of all corporations
whose principal place of business is
located therein, as a corporation may
■■
file an income tax return either in
the collection district in which it
has its principal place of business
j | or in the collection district in which
it has its principal office or agency,
and, conversely, a tabulation for a
given State may include data from
f
returns of corporations having their
principal place of business in another
State.

(

2j Includes

returns of inactive corpora­

6/

Includes declared value excess-profits
defense tax.

7/

Returns with income tax liability
but with no declared value excessprofits tax liability are those on
which the "Dividends received
credit" and the allowance of 10
percent of the declared value of
capital stock are in excess of "Net
income for declared value excessprofits tax computation" (item 30 ,
page 1, Form 1120).

8/ Returns with declared value excessprofits tax liability but with
no income tax liability are those
on which "Declared value excessprofits tax" and/or "Interest on
obligations of the Uhited States
subject to declared value excessprofits tax" are in excess of "Ret
income for declared value excessprofits tax computation" (item 30 ,
page 1, Form 1120).

tions.
j/ "Net income" or "Deficit11 is the amount
reported for declared value excessprofits tax computation (item 30 , page
I
1, Form 1120) adjusted by excluding net
operating loss deduction (item 26 ,
page 1, Form 1120).

if
I

"Total compiled receipts," as tabulated,
consists of gross sales (less returns
and allowances), gross receipts from
operations (where inventories are not
an income-determining factor), taxable
interest, rents and royalties, net
short-term capital gain, net long-term
capital gain, net gain from sale or
exchange of property other than capital
assets, dividends, other receipts re­
quired to be included in gross income,
and tax-exempt interest received on
Government obligations. "Total com­
piled receipts" excludes nontaxable
income other than tax-exempt interest
received on certain Government obliga­
tions.

Includes income defense tax.

9/

Returns with (1) "Ret operating loss
deduction" equal to or in excess of
"Ret income" or (2) net income for
declared value excess-profits tax
computation not in excess of either
(a) "Interest on obligations of the
United States subject to declared
value excess-profits tax" and (b) the
sum of "Dividends received credit"
and 10 percent of the declared value
of capital stock.

10/

Less than $500.

11/

Includes *+3,7^1 returns of inactive
corporations.

2

tax-exempt interest received on Government obligations.

"Total compiled

receipts" excludes nontaxable income other than tax-exempt interest re­
ceived on certain Government obligations.
Net income" or "Deficit" is the amount reported for declared
value excess-profits tax computation adjusted by excluding net operating
loss deduction.
Income tax" includes the income defense tax, and does not take
into allowance any credit claimed for income tax paid to a foreign
country or United States possession.
The "Declared value excess-profits tax" is the amount reported as
a tax liability and includes the declared value excess-profits defense
tax.

This amount is taken as a deduction in the computation of net

income for income tax purposes unless the return is rendered on a
cash basis.

If the cash basis of accounting is used, the deduction is

the amount of declared value excess-profits tax actually paid within
the taxable year covered by the return.
In analyzing the data, consideration should be given the special
provisions of the Internal Revenue Code affecting the computation of
gross income, deductions, and net income of insurance companies.

Of

particular importance are the provisions permitting life insurance
companies to include only interest, ^dividends, and rents in gross in­
come and allowing as deductions the earnings needed to maintain reserve
funds required by law and reserve for dividends.

For 1940, the deduc­

tions for these reserves are #29,804,967 for returns with net income
and #933,216,101 for returns with no net income.

TREASURY DEPARTMENT
Washington

F ΠRELEASE

Press Service

Secretary of the Treasury Morgenthau today made public the second
in the series of tabulations in advance of the report Statistics of
Income for 1940, Part 2, Compiled from Corporation Income, Declared
Value Excess-profits, and Defense Tax Returns and Personal Holding
Company Returns,” prepared under the direction of Commissioner of Internal
Revenue Guy T • Helvering,
The attached table shows by major industrial groups and minor in­
dustrial groups for returns with net income and with no net income,

\

the number of returns, total compiled receipts, net income, deficit,

j
income tax, declared value excess-profits tax, and dividends paid in
cash and assets other than own stock*
Corporations are classified industrially on the one business activity
which accounts for the largest percentage of receipts.

Therefore, the

industrial groups contain corporations not engaged exclusively in the
industries in which they are classified.
"Total compiled receipts” as tabulated consists of gross sales
(less returns and allowances), gross receipts from operations (where in­
ventories are not an income-determining factor), taxable interest, rents
and royalties, net short-term capital gain, net long-term capital gain,
net gain from sale or exchange of property other than capital assets,
dividends, other receipts required to be included in gross income, and

TREASURY DEPARTAIENT
' Washington
FOR RELEASE, AFTERNOON PAPERS
Thursday, January 21. 1943

Press Serv ice
No. 34-92

, Secretary o f the Treasury Morgenthau today made p u b lic the second in the
se n e s b f t a b u l a t e s in advance o f the rep o rt « 'S ta t is tic s o f Income fo r 1940,
Part 2, Compiled from Corporation Income, Declared Value .e x c e s s -p r o fits . and
Defense Tax Returns and Personal Holding Company Returns,«« prepared under the
d irectio n o f Commissioner o f In te r n a l Revenue Guy T. H elv erin g.
The attach ed ta b le shows by major in d u s t r ia l groups and minor in d u s tr ia l
groups fo r returns w ith n et income and w ith no n et income, the number o f
returns, t o t a l compiled r e c e ip t s , net income, d e f i c i t , income t a x , declared
value e x c e s s -p r o fits t a x , and dividends paid in cash and asse ts other than own
stock.
Corporations are c l a s s if ie d in d u s t r ia lly on the one business a c t iv it y
w iich accounts f o r the la r g e s t percentage o f r e c e ip t s . Therefore the indus­
t r i a l groups contain corporations not engaged e x c lu s iv e ly in the in d u s trie s
m which th ey are c l a s s i f i e d .
I

T o ta l compiled receipts«« as ta b u late d co n sists o f gross sa le s ( le s s
returns^and allo w an ces), gross re c e ip ts from operations (where in v en to ries are
not an income-determining f a c t o r ) , taxab le in t e r e s t , ren ts and r o y a lt ie s , net
short-term c a p ita l g a in , n et long-term c a p ita l g a in , net gain frcm sa le or ex­
change o f property other than c a p ita l a s s e t s , d ivid en d s, other re c e ip ts
required to be^included in gross income, and tax-exempt in te r e s t received on
Government o b lig a tio n s . »«Total compiled r e c e ip ts " excludes nontaxablc income
other than tax-exem pt in te r e s t received on c e r ta in Government o b lig a tio n s .
"Not income" or " D e f ic it " i s th e amount reported fo r declared value
e x c e s s -p r o fits ta x computation ad ju ste d by exclu d in g net operatin g lo s s deduc­
t io n .
Income tax'* in clu d es the income defense t a x , and docs not take in to
allowance any cre d it claimed f o r income t a x p aid to a fo re ig n country or United
S ta te s p o ssession .
^The "D eclared valu e e x c e s s -p r o fits tax" is th e amount reported as a ta x
l i a b i l i t y and in clu d es the declared value e x c e s s -p r o fits defense t a x . This
amount i s taken as a deduction in the computation o f n et income f o r income ta x
purposes un less th e return i s rendered on a cash b a s is . I f the cash b a sis o f
accounting is used, the deduction i s the amount o f declared value e x c e ssp r o fit s ta x a c t u a lly paid w ith in the taxab le year covered fcy the re tu rn .
In an aly zin g the d ata, co n sid eratio n should be given the s p e c ia l provisions
o i th e^ In tern al Revenue Code a f f e c t in g the computation of gross income,
deductions, and net income o f insurance companies. Of p a r tic u la r importance
arc the p ro v isio n s perm ittin g l i f e insurance companies to in clu d e only in t e r e s t ,

-

2

-

dividends, and ren ts in gross income and allow in g as deductions the oam ings
needed to m aintain r c s e r ve funds required by law and reserve fo r dividends* For
194-0, the deductions fo r th e se reserves are $29,804,967 fo r returns w ith net
income and $933,215,101 .fo r returns w ith no net income.

/

Corporation return», 1940, by major industrial group» and minor Industrial group» for returns with net Income and with no net incomes Number of returns, total compiled receipts,
net income, deficit, income tax, declared value excess-profits tax, and dividends paid in cash and assets other than own stock
(Money figures in thousands of dollars)

Major industrial groups and
minor industrial groups X/

1
2
3
4
5

6
7

8
9

10

11
12
13
14

IS
16
17
18
19
20

21

22
23
24
25
26
27
28
29
30
31
32
55
34

35
36
37
38
39
40

All Industrial groups
Mining and quarrying
Metal mining
Iron
Copper
Lead and sine
Cold and silver
Other metal mining
Metal mining not allocable
Anthracite mining
Bituninous coal, lignite, peat, etc.
Crude petroleum and natural gas production
Crude petroleum, natural gas and
natural gasoline production
Field service operations
Nonmetallic mining and quarrying
Stone, sand, and gravel
Other nonmetallic mining and quarrying
Nonmetallic mining and quarrying not
allocable
Mining and quarrying not allocable
Manufacturing
Food and kindred products
Bakery products
Confeetionexy
Canning fruits, vegetables, and sea
foods
Meat products
Grain mill products, except cereal
preparations
Cereal preparations
Dairy products
Sugar
Other food. Including ice, and flavoring syrup»
Food and kindred products not allocable
Beverages
Malt liquors and malt
Distilled, rectified, and blended
liquors
Wine
Nonalcoholic beverages
Beverages not allocable
Tobacco manufactures
Textile-mill products
Cotton manufactures
Woolen and worsted manufactures,
including dyeing and finishing
Silk manufactures
Rayon and other synthetic textilemill manufactures
Kbit goods
Hats, except cloth and millinery
Carpets and other floor coverings
Dyeing and finishing textiles,
except woolen and worsted
Other textile-mill products
Textile-mill products not allocable

Total
number
of
returns 2/

Number of
returns

Total
compiled
receipts 4/

.Returns with net income 3/
Net
Income
tax 5/
income 3/

Declared
value
excessprofits
tax &/

Number of
returns

Dividends
paid in
cash and
assets
other than
own stock

Returns with no net income 5/
Total
Deficit 3/
Dividends
compiled
paid in
cash and
receipts 4/
assets
other than
own stock

516,783
13,335
•2,680
115
111
234
1,510
207
503
145
1,965

220,977
3,956
380
26
24
61
*185
42
42
59
676

125,180,472
2,416,369
922,946
202,433
597,924
128,769
112,618
45,280
37,921
122,795
658,961

11,203,224
314,948
175,575
9,423
103,575
17,341
24,570
13,279
7,886
4,962
30,018

2,144,292
63,692
35,269
1,788
19,409
3,813
5,580
3,087
1,595
790
5,963

30,744
436
113
12
6
64
16
9
7
4
89

5,888,325
267,964
140,111
4,683
80,962
14,916
21,436
10,556
7,558
2,755
16,300

252,065
6,427
1,064
57
58
82
621
90
176
77
1,080

23,056,516
848,003
94,635
55,505
5,524
6,113
17,197
2,303
7,993
108,679
296,182

• 2,283,795
109,442
20,188
910
7,905
2,553
6,535
1,160
1,125
5,492
15,617

5,649

1,992

475,836

71,140

14,649

75

88,330

3,102

293,862

61,775

11,062

4,945
704
1,817
1,438
359

1,720
272
818
673
158

378,162
97,674
229,213
145,426
82,187

59,923
11,217
52,612
16,964
15,615

12,291
2,358
6,883
3,523
3,355

41
34
151
135
16

84,794
5,536
20,269
5,851
14,438

2,747
555
860
678
169

260,162
33,699
48,271
43,570
4,073

58,752
3,025
5,472
3,988
1,450

10,806
256
214
199
13

20
1,079
88,651
10,645
1,852
652

7
51
47,168
5,315
820
292

1,600
6,620
60,660,270
9,495,808
803,768
385,856

S3
646
5,631,949
444,517
48,932
37,759

5
187
1,215,160
95,794
10,957
8,664

•a
4
21,866
$98
18
24

•

198
2,376,783
243,634
29,582
22,987

13
244
38,420
4,934
965
324

627
6,374
6,530,512
1,115,677
148,016
55,691

34
897
325,409
36,523
4,932
1,867

2
7
22,844
2,071
55
48

13
14

1,521
1,001

786
586

818,096
5,908,577

66,822
59,819

13,555
11,279

155
95

26,987
23,191

643
381

101,033
305,141

4,503
4,071

lie
188

17
18

1,159
82
1,971
169

632
30
1,058
100

905,373
158,808
1,139,785
550,050

35,325
14,760
37,210
53,968

7,277
3,310
7,881
7,080

138
2
73
36

14,736
10,831
22,926
20,903

485
47
851
65

155,856
3,101
116,976
115,468

5,250
264
2,805
3,827

250
3
81
753

19

1,907
351
5,142
621

836
175
1,641
262

600,801
242,916
1,545,825
745,180

85,278
26,445
151,998
62,706

18,610
5,251
83,188
14,151

81
5
142
17

55,139
16,401
66,699
50,406

1,020
155
1,520
300

95,510
18,884
287,880
153,552

8,269
735
20,159
10,966

551
25
344
218

23
24

521
168
1,975
57
296
4,905
816

123
89
1,143
24
124
2,690
582

421,580
38,125
530,381
12,559
1,394,54$
5,486,113
1,087,181

30,226
2,908
55,602
554
145,279
229,746
78,599

6,211
608
12,094
123
38,667
49,109
16,357

16
60
48
2
29
988
344

12,080
372
23,730
108
89,296
77,485
27,287

116
71
805
28
162
2,109
221

74,966
4,756
47,362
7,265
25,714
745,445
180,843

4,025
385
4,656
146
5,250
37,202
7,321

88
10
22
7
864
1,458
157

26
27
28
29
SO

496
241

297
71

620,350
32,035

38,140
1,206

8,457
208

228
7

11,286
187

190
161

70,609
69,418

3,775
5,326

280
291

32
S3

98
1,297
524
121

60
610
144
74

206,301
550,525
87,097
209,691

18,962
23,235
5,875
19,295

4,448
4,902
723
4,570

36
59
11
98

5,448
7,278
1,592
6,604

37
663
175
42

28,554
200,428
24,175
6,465

866
10,768
519
472

34
435
19

54
35
36
37

527
526
459

281
348
223

208,265
239,538
265,129

13,288
20,652
12,495

2,797
4,241
2^606

115
53
57

3,815
7,649
5^559

239
163
220

49,635
56^ 529
77^006

5,140
Ij707
3'308

87
87
69

36
59
40

200,457
14,628
1,048
4
215
280
158
391

-

2,296

.1
2
S
4
S

6
7

8

9

10

11
12

15
16

20
21
22

25

31

Corpora+lon returns, 1940, by major Industrial groups and minor industrial groups for returns with net income and with no net income: Number of returns, total
net income, deficit, income tax, declared value excess-profits tax, and dividends paid in cash and assets other than own stock - Continued
(Money figures in thousands of dollars)

Major industrial groups and
minor industrial groups 1/ Continued

Total
number
of
returns Z/

Returns with net income 5/
Number of returns

Total
compiled
receipts y

Net
income 5/

Income
tax y

Returns with no
Dividends
paid in
cash and
assets
other than
own stock

Declared
value
excessprofits
tax 6/

# -

41
42
43
44
45
46

47
48
49
50
51
52

53
54
55
56
57
58
59
60
61
62
63

64
65

€6
67
68
69

70
71
72
75
74
75
76
77
78
79

Manufacturing - Continued
Apparel and products made from fabrics
Men's clothing
Women's clothing
Fur garments and accessories
Millinery
Other apparel and products made
from fabrics
Apparel and products made from
fabrics not allocable
Leather and products
Leather, tanned, curried, and
finished
Footwear, except rubber
Other leather products
Leather and products not allocable
Rubber products
Tires and inner tubes
Other rubber products, including
rubberized fabrics and clothing
Lumber and timber basic products
Logging camps and sawmills
Planing mills
Furniture and finished lumber products
Furniture (wood and metal)
Partitions and fixtures
Wooden containers
Matches
Other finished lumber products,
including cork products
Furniture and finished lumber
products not allocable
Paper and allied products
Pulp, paper, and paperboard
Pulp goods and converted paper
products
Paper and allied products not
allocable
Printing and publishing industries
Newspapers
Periodicals
Books and music
Commercial printing
Other printing and publishing
Printing and publishing industries
not allocable
Chemicals and allied products
Paints, varnishes, and colors
Soap and glycerin
Drugs, toilet preparations, etc.
Rayon (raw material) apd allied
products
Fertilizers
Oils, animal and vegetable, except
lubricants and cooking oils
Plastic materials
Industrial chemicals
Other chemical products
Chemicals and allied products not
allocable

4,198
943
1,726
415
156

1,955,655
719,083
771,873
79,068
31,145

59,092
27,561
15,946
, 1,257
412

11,520
5,519
5,029
190
56

1,522

772

294,446

12,560

451
2,145

186
1,159

58,041
1,059,205

1,575
48,074

324
981
80S
37
602
53

202
492
434
11
539
30

270,209
621,507
135,637
11,849
1,115,391
883,586

549
2,752
1,899
853
4,587
2,069
442
563
29

309
1,608
1,112
496
2,398
1,156
187
306
12

1,361
125
2,220
450

Number of
returns

Total
compiled
receipts y

241
68
66
15
2

19,756
10,031
4,452
225
55

4,239
799
1,839
549
291

555,638
151,436
267,617
25,651
25,236

2,458

77

4,629

727

60,827

267
9,110

IS
209

345
22,366

234
979

24,871
251,199

13,182
29,108
5,016
768
72,712
54,416

2,778
5,180
974
178
14,785
10,853

120
41
44
4
280
196

4,537
15,749
1,798
282
27,021
21,755

117
480
360
22
247
23

58,661
148,004
41,949
2,585
52,163
27,296

230,005
928,822
711,884
216,957
1,175,752
593,481
43,012
139,544
45,578

18,296
75,772
60,216
15,555
75,272
39,955
2,533
7,559
2,861

5,929
15,805
12,496
3,310
15,657
8,306
475
1,517
632

84
563
446
117
426
504
10
46
(10)

5,288
56,329
32,360
3,970
27,697
12,213
739
2,702
2,101

224
1,036
696
340
2,099
876
246
249
16

24,867
162,910
127,098
35,812
222,677
108,548
16,541
53,964
5,511

672

304,684

19,666

4,118

55

9,224

655

45,181

65
1,469
312

47,635
1,811,922
848,865

2,698
190,145
115,592

609
42,546
26,258

13
300
176

717
64,758
35,540

57
715
129

15,151"
235,510
152,696

1,750

1,146

911,462

71,270

15,602

124

28,096

578

80,131

20
11,795
2,635
920
605
3,491
2,165

11
5,612
1,434
420
242
1,704
1,077

51,595
1,940,992
728,681
278,463
125,944
457,640
210,924

3,281
178,515
87,777
25,947
9,069
30,110
15,280

687
36,993
18,472
5,575
1,736
6,119
2,952

226
50
13
10
65
37

1,102
88,342
48,587
12,871
5,522
11,536
6,364

6
5,819
1,148
475
330
1,749
1,038

2,684
470,778
162,304 .
65,623
31,323
103,018
51,069

1,977
7,136
957
229
2,532

735
3,484
569
107
978

139,341
4,640,910
584,252
484,835
623,946

10,532
683,168
58,359
58,549
108,651

2,162
145,106
7,561
15,344
24,107

50
734
60
25
109

3,663
335,405
19,840
25,468
60,871

1,079
3,350
561
118
1,418

57,435
228,344
56,678
12,561
45,676

10
350

9
189

115,629
171,266

19,927
9,513

4,700
1,869

(10)
40

9,529
4,245

1
130

534
16,329

286
109
7fc
1,257

194
50
483
617

351,512
59,469
1,659,916
306,271

17,416
8,066
347,148
35,112

3,664
1,881
71,113
7,690

25
18
311
55

5,898
1,919
179,383
11,841

86
52
239
601

31,559
2,953
29,048
56,851

672

288

304*014

40,627

9,176

94

16,411

344

16,155

8,5401,769
5,604
766
448

Corporation returns, 1940, by major industrial groups and minor industrial groups for returns with net incase and with no net income. Number of returns, total compiled receipts,
^
net income, deficit, income tax, declared value excess-profits tax, and dividends paid in cash and assets other than own stock - Continued
(Money figures in thousands of dollars)

Major industrial groups and
minor industrial groups X/ Continued

80
81
82

83
84
85
86
87
88
89
90

91
92
93
94
95
»
in
•

96
97

98
99
100
101
102

105

104
105
106
107
108

109

no
in
112

Manufacturing - Continued
Petroleum and coal products
Petroleum refining
Other petroleum and coal products
Petroleum and coal products not
aUocable
Stole, clay, and glass products
Cut-stone products
Structural clay products
Pottery and porcelain products
Glass and glass products
Cement
Concrete and gypsum products, wallboard
Abrasives and asbestos products
Stone, clay, and glass products not
allocable
Iron, steel, and products
Blast furnaces and rolling mills
Structural steel, fabricated;
ornamental metal work
Tin cans and other tinware
Hand tools, cutlery, and hardware
Heating apparatus, except electrical,
and plumbers' supplies
Other iron, steel, and products (not
classified below)
Iron, steel, and products not
allocable
Nonferrous metals and their products
Nanferrous metal basic products
Clocks and watches
Jewelry (except costume), silverware,
plated ware
Other manufactures of nonferrous
metals and their alloys
Nonferrous metals and products not
allocable
Electrical machinery and equipment
Electrical equipment for public
utility, manufacturing, mining,
,transportation (except automotive),
and construction use
Automotive electrical equipment
Communication equipment and
phonographs
Electrical appliances
Other electrical machinery and
equipment
Electrical machinery and equipment
not allocable
Machinery, except transportation
equipment and electrical
Special industry machinery
General industry machinery
Metal-working machinery, including
machine tools
Engines and turbines
For foo'bno'bes, see p. 9

Total
number
of
returns 2/

Returns wf;h no net income 3/
Dividends
Deficit 3/
Total
>aid in
compiled
'
cash and
receipts 4/
assets
other than
own stock

Returns with net incas» 5/
Total
compiled
receipts

Number of
returns

Net
income 3/

lacas»
tax 5/

Dividends
paid in
cash and
assets
other than
own stock

Declared
value
excessprofits
tax 6/

Number of
returns

715
509
198

334
231
101

5,045,667
4,801,472
243,217

267,700
246,429
21,255

44,751
40,725
4,023

119
45
74

175,246
167,006
8,240

321
251
84

639,284
615,502
23,582

19,885
17,880
1,998

10,603
10,563
40

2
1,940
182
470
147
267
87

978
1,577,687
26,297
168,620
101,254
536,804
206,204

16
215,456
1,294
17,295
7,917
69,185
36,421

47,294
224
3,673
1,712
15,503
8,315

952
4
91
59
227
52

102,537
745
7,148
3,026
37,881
25,863

6
1,550
358
336
72
200
24

201
136,444
18,592
39,716
10,216
19,670
14,002

7
12,244
2,517
4,019
715
1,030
883

«
277
13
131
43
31

82

8
5,601
553
830
222
480
114
988
339

542
209

238,055
287,110

27,559
52,951

6,034
11,662

105
391

10,755
18,745

407
121

25,674
7,122

2,128
811

20
39

88
89

75
6,782
178

36
4,552
138

13,342
7,125,364
3,421,881

834
616,352
229,370

171
137,191
51,103

5
4,798
1,722

579
191,262
61,934

32
2,069
34

1,653
454,623
57,957

140
21,283
1,376

486
9

91

31,216
14,099
20,466

1,724
483
1,389

43
(10)
30

92
93
94

80
81

83
84
85
86
87

90

917
89
888

583
59
559

511,135
386,855
358,497

20,686
40,411
44,847

4,390
9,505
9,813

113
5
394

4,530
20,556
17,593

524
28
297

1,255

721

811,557

76,643

17,138

335

26,716

464

66,218

9,959

168

95

2,145

58,123

870

265,761

5,789

255

96

564
4,776
2,263
166

1
59
8

97

3,258

2,334

1,757,814

196,486

43,574

1,812
68,367
53,164
4,629

52
938
81
30

20,906
83,419
35,535
1,795

97

5,716

242

14,957

828

15

100

184

26,817

578

29,974

1,509

36

101

79

219
2,593
329
105

158
1,596
252
72

97,627
1,928,199
888,704
117,241

7,910
219,064
80,526
13,863

1,668
48,749
18,397
3,167

86
651
251
75

612

365

148,798

10,889

2,451

1,527

918

670,848

106.983

23,158

98
99

102

20
1,863

11
1,059

102,607
2,580,418

6,803
825,740

1,616
74,139

23
1,245

40
147,142

7
728

1,158
110,653

10
7,286

586
106

424
57

1,083,544
108,766

175,427
15,166

39,269
3,452

675
150

73,314
8,006

148
41

22,172
4,876

1,144
392

58
2

103
104

388
179

190
86

557,891
158,990

64,858
18,050

15,006
4,255

119
39

30,435
7,298

174
89

54,790
9,452

5,070
1,289

6
9

105
106

476

230

175,398

14,725

3,257

56

5,639

227

14,700

1,079

3

107

128

72

335,829

39,553

8,940

228

22,452

49

4,662

312

-

108

185,716
39,701
41,890

13,628
2,888
3,351

470
254
32

109

7,503
5,725

1,016
578

19

6,042
1,285
1,930

3,853
774
1,209

4,458,849
528,695
996,117

651,485
67,850
159,275

143,896
14,425
51,355

5,299
271
1,158

217,668
32,319
48,309

2,006
479
665

902
107

724
63

738,609
174,741

175,674
25,715

40,650
5,800

2,529
386

36,159
5,307

158
34

no
in

n2

Corporation returns, 1940, by major industrial groups and minor industrial groups lor returns with net income and with no net income: Number of returns, total compiled receipts,
net income, deficit, income tax, declared value excess-profits tax, and dividends paid in cash and assets other than own stock - Continued
(Money figures in thousands of dollars)

Major industrial groups and
minor industrial groups \/ Continued

113
114
115
116
117

118
119

120

121
122

I
I

123
to 124
125
126
127
128

129
130
131
132
133
134
135
136
137
138
139
140
141
142
143
144
145
146
147
148

Manufacturing - Continued
Machinery, except transportation
equipment and electrical - Continued
Construction and mining machinery
Agricultural machinery
Office and store machines
Household and service-industry
machines
Machinery, except transportation
equipment and electrical,.not
allocable
Automobiles and equipment, except
electrical
Automobiles, trucks, bodies, and
industrial trailers
Automobile accessories, parts (except
electrical), and passenger trailers
Automobiles and equipment, except
electrical, not allocable
Transportation equipment, except
automobiles
Railroad and railway equipment
Aircraft and parts
Ship and boat building
Motorcycles and bicycles
Other transportation equipment,
except automobiles
Transportation equipment, except
automobiles, not allocable
Other manufacturing
Manufacturing not allocable
Public utilities
Transportation
Railroad, switching, terminal, and
passenger car service companies
Railway express companies
Railways, street, suburban, and
interurban, including bus lines
operated in conjunction therewith
Taxicab companies
Other highway passenger transportation
Highway freight transportation,
warehousing, and storage
Air transportation and allied services
Pipe line transportation
Water transportation
Services incidental to transportation
Transportation not allocable
Communication
Telephone (wire and radio)
Telegraph (wire and radio) and cable
Radio broadcasting and television
Other communication
Other public utilities
Electric light and power
Gas, distribution and manufacture
Water
Utilities not elsewhere classified
Other utilities not allocable
For footnotes, see p * 9

Total
number
of
returns 2/

Returns with net income 3/
Total
compiled
receipts 4/

Number of
returns

Net
income 3/

Income
tax 5/

Returns with no net income 3/
Declared
value
excessprofits
tax 6/

Dividends
paid in
cash and
assets
other than
own stock

Number of
returns

Total
compiled
receipts 4/

478
396
331

326
204
169

460,548
728,207
346,460

55,528
79,005
47,824

12,461
15,267
10,894

409
46
34

18,336
35,753
22,029

142
166
141

29,515
20,837
11,198

253

114

239,178

32,930

7,001

71

13,055

101

Deficit 3/

Dividends
paid in
cash and
assets
other than
own stock

1,174
872
1,481

88
62
•11

113
114
115

7,468

508

2

116

3.

117

-

380

250

246,294

27,685

6,041

396

6,401

122

23,881

1,759

851

498

4,678,608

576,796

127,709

743

249,282

310

118,190

9,411

354

201

3,995,132

490,910

108,447

343

221,897

134

102,539

7,176

56

118

482

293

679,239

85,623

19,200

400

27,341

169

15,471

2,205

(10)

119

15

4

4,236

263

62

(10)

44

7

180

30

850
123
234
444
21

426
79
101
214
16

1,545,560
485,967
645,283
376,733
33,526

256,431
55,798
152,055
45,170
3,132

57,402
11,929
34,500
10,308
610

1,856
88
630
1,128
10

71,181
25,041
36,166
8,840
1,029

361
35
100
211
5

49,255
3,752
31,477
12,482
663

7,776
202
6,097
1,353
36

53
1
2

123
124

23

15

3,596

251

52

1

6

324

66

51

125

5
4,210
2,381
23,670
15,631

1
2,030
883
11,479
7,317

455
1,028,994
368,008
10,441,901
5,195,366

24
122,453
28,407
1,592,069
583,306

4
26,740
6,011
347,346
124,052

740
266
1,195
8P5

45,547
10,002
1,053,670
320,023

4
2,045
1,085
10,574
7,332

554
140,573
60,428
3,268,471
2,993,458

21
9,690
6,588
279,029
253,143

406
78
21,658
11,491

798
11

576
4

2,736,695
120,572

269,052
70

54,612
9

85

169,571
5

345
5

2,156,042
409

168,047
7

6,480

129
130

229
653
1,702

69
260
837

124,531
49,276
231,646

5,183
2,948
33,223

958
532
7,183

4
7
40

2,952
843
15,556

128
548
820

330,350
24,053
45,839

53,149
805
3,827

1,788
(10)
65

131
132
133

7,899
687
241
1,751
1,435
225
3,906
3,172
75
650
9
4,133
1,207
769
1,775
241
141

3,705
230
147
955
659
75
1,784
1,373
21
389
1
2,378
761
460
977
112
68

603,748
118,155
253,986
731,581
208,586
16,608
1,508,654
1,226,118
129,245
153,273
18
3,737,881
2,829,974
786,482
82,113
22,687
16,626

37,363
13,230
81,579
108,610
31,002
1,046
286,242
254,077
5,418
26,746
(10)
722,521
574,760
124,713
18,883
1,816
2,349

7,366
3,056
19,450
23,712
6,979
215
65,055
57,876
1,103
6,075
(10)
158,238
124,757
28,609
3,986
355
531

144
39
10
428
100
8
100
15
39
45
231
95
44
85
5
1

12,927
1,119
49,691
46,960
19,877
523
200,957
185,177
2,835
12,944
3
532,690
430,745
86,294
13,419
615
1,617

3,854
354
71
651
673
83
1,890
1,638
47
197
8
1,352
523
273
605
109
42

204,376
15,326
41,549
141,639
29,917
3,858
55,073
24,107
21,£167
7,862
1,137
219,939
144,186
54,837
14,081
4,565
2,270

9,486
1,620
4,863
8,608
2,541
390
7,126
2,586
3,186
1,022
332
18,760
8,231
6,760
2,921
270
578

262
12
704
1,663
491
27
805
799

134
135
136
137
138
139

104’

57

120

121
122

126
127
128

6

140
141
142
143

9,362
7,744
506
832
204
76

144
145
146
147

148

Corporation returns, 1940, by major Industrial groups and minor industrial groups for returns with net income and with no net incomes Number of returns; total compiled receipts,
net income, deficit, income tax, declared value excess-profits tax, and dividends paid in cash and assets other than own stock - Continued
(lioney figures in thousands of dollars)

Major industrial groups and
minor industrial groups 1/ Continued

149
150
151
152
X53
154
155
156
157

158
159
160
161
1 162
o 165
i 164
165
166

167
168
169
170
171
172
175
174
175
176
177
178
179
180
181
182
185
184

185
186
187
188
189

Trade
Wholesale
Commission merchants
Other wholesalers
Food, including market milk
dealers
Alcoholic beverages
Apparel and dry goods
Chemicals, paints, and drugs
Hardware, electrical goods,
plumbing and heating equipment
Lumber and millwork
Wholesalers, not elsewhere
classified
Wholesalers, not allocable
Retail
General merchandise
Department, dry goods, other'
general merchandise
limited-price variety stores
Mail-order houses
Food stores, including market milk
dealers
Package liquor stores
Drug stores
Apparel and accessories
Furniture and house furnishings
Eating and drinking places
Automotive dealers
Automobiles and trucks
Accessories, parts, etc.
Filling stations
Hardware
Building materials, fuel and ice
Other retail trade
Retail trade not allocable
Trade not allocable
Service
Hotels and other lodging places
Personal service
Laundries, cleaners, and dyers
Photographic studios
Other personal service
Personal service not allocable
Business service
Advertising
Other business service
Business service not allocable
Automotive repair services and garages
Miscellaneous repair services, hand
trades
Motion pictures
Motion-picture production
Motion-picture theatres
Amusement, except motion pictures
Other service, including schools
Service not allocable

For footnotes, see p.9

Total
number
of
returns 2/

Returns with net income 3/
Number of
returns

Total
compiled
receipts 4/

Net
income 5/

Income
tax 5/

Returns with no net income 5/
Declared
value
excessprofits
tax 6/

Dividends
paid in
cash and
assets
other than,
own stock

Number of
returns

Total
compiled
receipts 4/

Deficit y

Dividends
paid in
cash and
assets
other than
own stock

145,022
58,525
4,778
55,545

71,766
22,296
2,406
19,890

40,022,105
19,088,709
516,858
18,571,851

1,270,122
496,601
59,026
457,575

262,928
100,142
7,076
95,066

4,915
2,557
185
2,172

504,738
170,054
17,362
152,692

68,085
15,206
2,233
12,973

7,193,940
2,800,950
121,604
2,679,347

187,899
60)229
5)258
54)972

7,727
2,946
*620
2,526

7,051
1,591
5,026
1,604

5,675
794
1,699
862

5,871,575
796,149
1,058,177
1,059,599

57,607
17,420
25,554
55,568

11,602
5,447
4,902
7,852

215
65
179
102

24,024
3,634
7,580
12,090

5,204
547
1,286
705

934,725
106)275
230^010
60 )855

15,757
2)990
5)984
2^000

647
15
280
61

150
151
152
155

2,821
1,265

1,955
869

1,554,665
457,718

54,961
15,826

11,912
2,645

255
155

18,609
5)604

829
573

111,095
52)025

3,227
l) 515

41
25

154
155

14,065
2,542
87,604
6,625

8,728
1,510
40,619
5,575

8,769,619
1,044,749
17,964,512
5,596,299

224,485
28,576
659,655
520,842

45,608
5,121
154,957
75,578

1,088
137
1,451
282

71,419
11,932
275,096
153,539

5,072
'957
45,179
2,927

1,007,446
'176)915
5,614,014
295)921

22,434
3)065
105)055
ll)163

1,030
*227
3,263
525

156
157

5,955
405
265

5,295
180
100

4,486,699
984,255
125,546

244,720
70,941
5,182

55,446
16,755
1,179

270
5
' 7

105,478
45,559
2)522

2,554
'217
156

272,903
8)788
12)250

10,205
^401
558

511

158
159
160

7,064
1,725
5,571
11,616
5,771
9,859
10,985
9,821
1,162
2,751
2,876
8,969
8,595
5,225
17,095
45,568
5,025
9,587
5,081
600
5,882
24
8,180
2,197
5,955
so
5,922

2,492
755
1,960
5,174
2,992
2,678
6,266
5,715
551
1,079
1,565
5,091
4,558
2,876
8,851
16,091
1,718
5,765
2,265
177
1,509
14
5,247
1,011
2,225
15
1,275

5,545,027
56,289
459,545
1,570,555
727,991
458,876
5,092,268
2,882,002
210,266
255,006
157,295
976,127
680,595
450,665
2,969,082
2,617,761
505,252
429,799
556,991
17,616
74,699
494
651,576
560,069
268,171
5,156
88,666

68,802
957
17,067
56,448
28,515
16,619
45,201
55,566
9,655
9,246
4,548
54,069
25,444
12,079
155,887
205,565
17,762
22,055
16,705
750
4,482
119
45,872
19,467
25,660
745
5,994

15,218
155
5,049
11,228
5,540
5,045
8,158
5,994
2,144
1,901
726
5,856
4,652
2,071
27,849
56,558
5,155
5,871
2,995
150
752
15
9,582
4,091
5,179
112
696

75
8
68
155
85
59
225
211
14
22
37
184
171
85
1,106
408
42
74
51
1
22
(10)
72
16
56
(10)
17

57,858
46
7,595
18,709
7,205
7)452
15,054
10,142
2,912
4,897
1,082
12)097
6,219
5,566
61,588
89,989
5,916
7,725
5,554
264
1,852
94
25,213
11,282
15,609
322
1,248

4,368
970
3,476
6)227
2,699
6)945
4)456
3,862
'594
1,596
l)485
3)721
4 )065
2 '244
7)698
25,294
3 )154
5'493
2'614
405
2,465
9
4,315
l)059
3 '259
17
2,550

592,285
4l)073
17l)706
588)049
167)lll
552)874
794)922
765)651
5l)271
82)984
5l)795
296)792
239)oi2
14l)492
778)977
1,228,371
*337)876
229)985
166)550
12)378
50*968
86
164,229
62)781
10l)243
205
79,066

12,566
882
4,046
14^825
7*330

241

1,445
4,682
655
4,049
5,492
6,809
228

591
2,555
189
2,164
1,528
1,550
68

44,425
810,515
546,668
465,848
157,155
146,947
5,627

2,246
78,985
55,554
45,629
19,467
12,755
252

416
12,525
4,179
8,546
4,025
2,445
45

18
74
51
43
50
52'
10

902
37,536
12,390
24)945
6,935
4)642
75

825
2,118
'568
1,750
3)330
3)438
'ill

17,046
196^338

749
10, 522
4*867
5*654
11*919
9^674
'217

72)242
124)096

86^242
115 )5 11

2)081

1 3 )1 3 4
1 1 )1 0 4
9)88 1

1*225
2 )12 7

2*157
10 )206
10 )9 57

4*759
22)617
95*351
51,753
9*876
6*347
783
2,744
z
16,863
7*804
8^092
*967
5 779

7

8
7

27
582
129
70
555
529
6
19
23
532
650
523
1,518
1*419
*232
290
218
11
62
205
114
91

149

161
162
165
164
165
166
167
168
169
170
171
172
175
174
175
176
177
178
179

40

180
181
182
185

24
329
201
129
206
86
6

185
186
187
188
189

184

Corporation returns, 1940, by major industrial groups and minor industrial groups for returns with net income and with no net incomet Number of returns, total compiled receipts,
net income, deficit, income tax, declared value excess-profits tax, and dividends paid in cash and assets other than own stock - Continued
(lloney figures In thousands of dollars)
Total
Major industrial groups and
minor industrial groups X/ Continued

190
191

192
193
194
195

196
197
198
199
200

201

202
203
204
205
206
207
208
209

210

211
212
213
214
215
216

217
218
219
220

221
222

Finance, insurance, real estate, and
lessors of real property
Finance
Banks and trust companies
Long-term credit agencies, mortgage
companies, except banks
Short-term credit agencies, except
banks
Sales finance and industrial credit
Personal credit
Other short-term credit agencies
Short-term credit agencies, except
banks, not allocable
Investment trusts and investment
companies 7/
Management type
Fixed or semifixed type
Installment investment plans and
guaranteed face-amount
certificates
Mineral, oil, and gas royalty
companies
Investment trusts and investment
companies not allocable
Other investment companies,
including holding companies
Holding companies 8/
Operating-holding companies 9/
Security and commodity-exchange
brokers and dealers
Other finance companies
Finance not allocable
Insurance carriers, agents, etc.
Insurance carriers
life insurance companies
Mutual Insurance, except life
Other insurance carriers
Insurance agents, brokers, etc.
Beal estate, including lessors of
buildings
Owner operators and lessors
of buildings
Lessee operators of buildings
Owners for improvement
Trading for own account
Real estate agents, brokers, etc.
Title abstract companies
Real estate, including lessors of
buildings, not allocable
Lessors of real property, except
buildings
Agricultural, forest, etc.
properties
Mining, oil, etc. properties
Railroad properties
Public-utility properties
Other real property, except
buildings
Lessors of real property, except
buildings, not allocable
For footnotei

P- 9

Returns with net income 3/

of
returns 2/

154,490
41,022
17,376

Number of
returns

58,988
22,398
11,422

Total
compiled
receipts \/

6,558,215
3,811,800
1,621,276

Net
income i/

2,030,903
1,630,210
319,297

Income
tax 5/

Returns with no net income $/
Declared
value
excessprofits
tax 6/

189,157
120,397
21,724

Dividends
.paid in
cash and
assets
other than
own stock

1,164
545
307

1,535,969
1,283,257
215,922

Number of
returns

Total
compiled
receipts 4/

85,614
15,064
4,451

Deficit 3/

5,355,013
577,755
312,267

1,162,538
458,552
80,306

Dividends
paid in
cash and
assets
other than
own stock

119,161
75,993
20,556

3,283

1,109

26,992

5,495

973

7

3,536

1,878

50,248

22,982

1,059

5,860
2,489
2,301
344

5,558
1,453
1,507
168

379,604
230,954
129,930
5,096

118,996
75,119
59,414
691

24,718
15,654
8,281
108

95
50
35
5

68,406
43,323
22,559
362

1,924
881
668
136

28,926
15,698
10,501
877

5,989
5,111
2,195
257

1,513
962
535
68

726

430

15,625

3,772

675

4

2,162

239

1,850

426

148

4,198
657
209

2,411
362
132

240,218
88,545
53,598

166,610
55,453
31,796

6,312
1,808
1,089

27
9
(10)

157,168
60,365
25,923

1,654
279
71

46,719
32,856
1,543

116,266
69,779
1,066

17,148
14,448
192

70

24

16,273

602

20

(10)

209

45

2,026

378

6

190

85

1,048

429

77

(10)

465

75

442

377

23

3,072

1,808

100,756

78,529

3,319

18

70,206

1,186

9,851

44,666

2,479

2,327
1,321
1,006

1,441
798
643

1,362,857
894,587
468,250

973,624
691,468
282,156

58,773
39,467
19,306

46
36
10

801,635
558,039
243,594

809
458
551

95,722
78,173
17,549

171,589
160,076
11,513

26,715
24,834
1,881

2,128
2,277
3,573
8,556
2,058
785
347
.926
6,478

886
618
953
4,007
780
155
57
568
5,227

99,565
53,738
27,569
1,669,442
1,505,024
46,349
28,952
1,429,722
164,418

16,900
22,054
7,235
163,639
134,555
4,702
1,482
128,570
29,084

2,764
4,157
975
23,217
17,744
758
107
16,898
5,473

22
28
IS
190
5
•
(10)
3
186

11,209
19,060
6,323
100,254
83,147
3,109
471
79,568
17,107

1,125
1,219
2,004
4,131
1,101
544
251
306
5,030

57,904
13,562
12,407
1,724,133
1,683,910
1,182,074
196,921
304,915
40,224

12,193
23,404
25,823
395,906
395,089
198,564
132,422
62,302
2,817

6,845
388
1,791
28,448
28,815
16,531
204
9,578
135

96,618

29,825

890,225

142,018

24,148

377

75,214

59,909

1,011,070

286,084

12,429

71,015
2,816
5,094
3,054
3,258
1,411

23,187
907
1,203
756
1,227
666

669,800
46,706
49,799
10,284
42,676
21,462

114,257
4,691
5,305
2,492
S, 51Q
2,755

19,881
790
854
337
562
443

213
7
46
19
17
12

61,008
1,597
1,468
964
1,805
2,361.

46,462
1,845
5,219
1,997
1,817
663

824,328
68,322
44,096
11,055
22,681
4,003

200,094
12,395
23,424
14,685
5,019
358

8,715
630
722
748
75
9

9,972

1,879

49,498

9,050

1,301

64

6,011

3,906

36,586

32,112

1,531

8,314

2,758

186,749

95,036

21,375

53

77,244

4,510

42,054

21,996

2,291

1,454
3,255
294
288

429
1,392
174
146

5,196
69,879
77,542
28,177

1,895
31,495
47,707
11,049

317
6,868
11,178
2,542

2
43
(10)
2

1,248
29,541
56,506
7,995

916
1,630
87
116

5,804
12,509
20i687
1,732

3,725
9,867
2,210
2,124

371
901
772
28

2,734

511

3,556

1,716

301

5

956

1,615

1,593

2,667

140

289

106

2,399

1,174

169

4

999

146

1,730

1,403

79

Corporation returns, 1940, fcy major Industrial groups and minor industrial groups for returns with net income and with no net income: Number of'returns, total compiled receipts,
net income, deficit, income tax, declared value excess-profits tax, and dividends paid in cash and assets other than own stock - Continued
(Honey figuras in thousands of dollars)

Major industrial groups and
minor industrial groups 1/ Continued

223
224
225
226
227
228
229

Construction
General contractors
Special trade contractors
Construction not allocable
Agriculture, forestry, and fishery
Agriculture and services
Forestry
Fishery
Nature of business not allocable,
except trade

"y

Total
number
of
returns y

Returns with net income 5/
Number of
returns 1

Total
compiled
receipts 4/

Net
income 5/

Income
tax fj

16,830
7,760
8,812
258
8,943
8,005
573
365

6,716
3,042
3,636
58
3,215
2,965
118
132

1,903,570
1,539,069
557,049
7,452
484,176
450,072
10,319
23,785

101,702
80,821
20,524
357
49,269
45,887
1,436
1,947

18,858
15,166
3,651
61
9,190
8,542
276
372

22,474

1,600

76,105

8,897

1,425

Corporations are classified industrially on the one business activity which
accounts for the largest percentage of receipts. Therefore, the indus­
trial groups contain corporations not engaged exclusively is the industries
in which they are classified. The industrial groups are based on the
Standard Industrial Classification, issued by the Division of Statistical
Standards, Bureau of the Budget, Executive Office of the President. Charts
showing the changes that occur between the industrial classifications in
this table and those for 1939 will be published in "Statistics of Income
for 1940, Part 2."

Returns with no net income 3/
Declared
value
excessprofits
tax 6/

934
625
303

Dividends
paid in
cash and
assets
.other than
own stock

Number of
returns

Total
compiled
receipts j/

Deficit 3/

9,053
4,009
„4,919
105
5,187
4,577
400

33,861
24,421
9,151
289
32,307
23,061
8,061
1,185

1,486
591
885

225

210

624,415
399,650
221,412
3,355
159,243
145,979
6,974
6,290

1,055
935

6
200
17
66

29,850
25,041
4,699
109
24,421
25,090
932
399

43

4,941

5,433

48,548

57,959

282

exempt interest received on Government obligations. "Total compiled re­
ceipts" excludes nontaxable income other than tax-exempt interest received
on certain Government obligations.
5/

Includes income defense tax.

y

Includes declared value excess-profits defense tax.

1/

Consists of corporations which derived 90 percent or more of receipts from
investments and which at no time during the taxable year had investments
in corporations in which they owned SO percent or more of the voting
stock.
Consists of corporations which derived 90 percent or more of receipts from
investments and which at some time during the taxable year had invest­
ments in corporations in which they owned SO percent or more of the
voting stock.

2/

Includes returns of inactive corporations.

5/

"Net income" or "Deficit" is the amount reported for declared value exeeas- profits tax computation adjusted by excluding net operating loss deduc­
tion (items 30 and 26, respectively, page 1, Form 1120).

§/

"Total compiled receipts," as tabulated, consists of gross sales (less re­
turns and allowances), gross receipts from operations (where inventories
are not an income-determining factor), taxable interest, rents and roy­
alties, net short-tens capital gain, net long-term capital gain, net
gain from sale or exchange of property other than capital assets, divi­
dends, other receipts required to be Included in gross income, and tax-

9/ Consists of corporations which derived less than 90 percent bat more than
SO percent of receipts from investments.

y

Dividends
paid in
cash and
assets
other than
own stock

10/ Less than $500.

121

223
224

10

226
227
228

10,479

229

2
companies to include only interest, dividends, and rents in gross
income and allowing as deductions the earnings needed to maintain
reserve funds required by law and reserve for dividends.

For 1940

the deductions for these reserves are #29,804,967 for returns with
net income and #933,215,101 for returns with no net income*

TREASURY DEPARTMENT
Washington
Prass Service

S e cre ta ry o f the Treasury Morgenthau today made p u b lic the th ird
in the s e r ie s o f ta b u la tio n s in advanoe o f the rep o rt “ S t a t i s t i c s of
Income fo r 1940, P a rt 2 , Compiled from Corporation Income, Declared
Value E x c e s s -p r o fit s , and Defense Tax Returns and Personal Holding
Company R e tu rn s,“ prepared under the d ir e c tio n o f Commissioner o f
In te rn a l Revenue Guy T . H e lv e rin g .
The fo llo w in g ta b le shows by major in d u s tr ia l groups the number
o f return s fo r corporations rep o rtin g income d a ta , items o f compiled
re c e ip ts and compiled d ed u ctio n s, compiled n e t p r o f it or n e t lo s s ,
n et income or d e f i c i t , income t a x , declared valu e e x c e s s -p r o fits ta x ,
t o t a l t a x , compiled n et p r o f it le s s t o t a l t a x , and dividends p a id .
Corporations are c l a s s i f i e d in d u s t r ia lly on th e one business
a c t i v i t y which accounts fo r the la r g e s t percentage o f r e c e ip t s .

There­

f o r e , the in d u s tr ia l groups co n ta in co rporations not engaged exclu ­
s iv e ly in the in d u s trie s in which they are c l a s s i f i e d .
In an aly zin g the d a ta , co n sid e ra tio n should be given th e sp ecial

1

p ro visio n s o f the In te rn a l Revenue Code a f f e c t in g the computation o f
gross income, d ed u ctio n s, and n et income o f insurance companies.
p a r tic u la r importance are the p ro visio n s p erm ittin g l i f e insurance

Of
i

TREASURY DEPARTMENT
Washington
EOR RELEASE, MORNING NEWSPAPERS
Monday, January 25. 19*4-3

Press Serv ice
3^-93

" Secretary o f the Treasury Morgenthau today made p u b lic the th ir d in
the s e r ie s o f ta b u la tio n s in advance“o f the report S t a t i s t i c s o f Income
fo r 19U0, P art 2, Compiled from Corporation Income, D eclared Value E xcessp r o f it s , and Defense Tax Returns and Personal Holding Company R e tu r n s ,n
prepared under the d ir e c tio n o f Commissioner o f In te r n a l Revenue
Guy T. H elvering*
The fo llo w in g ta b le shows by major in d u s tr ia l groups the number o f
returns fo r corporations rep o rtin g income d ata, item s o f compiled re c e ip ts
and compiled dedu ction s, compiled net p r o f it or net lo s s , net income or
d e f i c i t , income ta x , declarèd valu e e x c e s s -p r o fits ta x , t o t a l ta x , compiled
net p r o fit le s s t o t a l ta x , and dividends p a id .
Corporations are c l a s s if ie d in d u s t r ia lly on the one business a c t iv it y
which accounts fo r th e la r g e s t percentage o f r e c e ip t s . Therefore, the
in d u s tr ia l groups contain corporations not engaged e x c lu s iv e ly in the
in d u s tr ie s in which they are c l a s s i f i e d .
In an aly zin g the d ata, co n sid eratio n should be given thë s p e c ia l
p ro v isio n s o f the In te rn a l Revenue Code a f f e c t in g the computation o f gross
income, deductions, and net income o f insurance companies. Of p a r tic u la r
importance are the p ro v isio n s p e rm ittin g l i f e insurance companies to in ­
clude only in te re s t" d iv id en d s, and ren te in gross income and allo w in g as
deductions the earnings needed to m aintain reserve funds repuired by law
and reserve fo r d iv id en d s. Eor 19u0, the deductions f o r these reserves are
$ ,
fo r return s w ith net income and $933*215*101 fo r returns with
no net income.

29 80^,967

Corporation returns, 1940, by major industrial groups: Number of returns,-compiled receipts, compiled deductions, compiled net profit or net loss, net income
or deficit, income tax, declared value excess-profits tax, total tax, and dividends paid
_______ __(Money figures in thousands of dollars)
Major industrial groups \J
Manufacturing
All
Beverages
Food and
Mining and Total
ionAnthracite Bituminous Crode
Metal
Total
industrial
kindred
manufac­
quarrying
metallic
petroleum
coal,
mining
mining
mining
groups
products
turing
not
and natural mining
lignite,
and
allocable
peat, etc. gas produc­ and
quarrying
quarrying
tion

r_

Number of returns 4/
Receipts:
Gross sales §/
Gross receipts from operations 6/
Interest, not on Government obligations
Rents and royalties 7/
Net capital gain 8/
Net gain, sales other than capital
assets 9/
Dividends, domestic corporations 10/
Dividends, foreign corporations U /
Other receipts, not interest on
Government obligations
Interest on Government obligations:.
Subject to excess-profits tax 12/
Wholly tax-exempt 13/
13

Total compiled receipts 14/

Deductions:
Cost of goods sold 15/
Cost of operations 16/
Compensation of officers
16
Rent paid on business property
17
Repairs 17/
Bad debts
cu 19
Interest paid
Taxes paid 18/
Contributions or gifts lg/
Depreciation
Depletion
Amortization go/
Net long-term capital loss 8/
Net loss, sales other than capital
assets 9/
Other deductions
14

15

»ffg

•18

10,249

2,961

64,549,386 10,422,386
58.598
1,205, S U
9,832
103,534
18,029
216,317
1,044
28,834

1,806,302
6,294
1,740
3,895
285

1,404,342
1,502
1,158
2,491
453

22,557
378,957
121,460

2,389
29,282
16,535

498
2,564
577

59
5,027
595

95

347,568

49.599

U.078

4,097

5
(50)

12,198
10,466

903
950

228
244

335
199

66,990,782 10,609,486

1,833,704

1,420,259

473,042

10,383

1,444

136

1,756

5,094

1,678

275

114,641,817
24,482,535
2,495,828
2,023,567
188,347

2,896,828
217,077
9,270
48,573
8,411

956,954
12,542
2,542
5,340
882

216,247
4,865
403
4,806
25

878,103
38,032
2,044
22,232
1,167

577,493
146,779
3,833
14,181
5,650

256,774
13,409
409
1,945
686

U,252
1,449
40
69
1

178,273
2,020,731
844,874

4,969

333
30,443
1,695

222
101
1

773
3,845
38

3,347
7,206
46

213
1,510
1

82
1
1

1,177,423

31,638

5,676

4,595

8,407

10,464

2,395

370
331

92
51

i

Tobacco
manufac­
turers

85,588

667
506

198
10

148,236,787

3|264, 372 1,017,581

231,472

955,143

769,698

277,484

12,995

86,739,133
18,297,318
25/ 2,949,533
1,966,180
1,236,945
617,281
2,700,558
4,316,756
38,124
3,520,195
474,866
7,593
702,738

571,340
6'563
6,058
910
14,134
2,754
9,391
51,971
253
35,752
89,930
7
3,984

174,399
3,231
1,827
765
5,289
3,045
7,307
10,216
30
6,107
6,758

266,329
87,674
20,786
7,766
8,666
2,263
23,482
30,367
U7
71,620
Ul,055
54
8,285

148,653
7,044
10,779
2,051
9,325
1,063
3,822
8,664
96
14,499
8,752
1
1,206

8,736
896
301
35
244
15
125
480
2
708
526
13

47,037,648
678,400
1,076,801
309,569
859,909
141,327
358,058
1,831,396
18,530
1,530,482
196,253
5,980
Ul,068

8,398,792
12,930
99,101
34,212
$5,581
14,948
56,715
174,561
2,038
146,552
223
92
15,414

974,521
1,313
31,390
5,983
12,555
6,324
12,235
295,944
755
38,809

1,025,102
680
6,721
1,613
2,236
674
5,933
101,003
181
7,788

363

695,368
23,478
10,301
4,777
21,631
2,152
U,443
37,461
79
38,410
20,012
2
4,154

9
2,543

4,330

24
25
26

335,960
26/ 20,985,446

8,569
60,072

418
12,237

1,652
69,694

6,584
U4,973

670
33,669

89
1,074

59,934
7,414,430

7,267
1,172,317

3,767
315,476

2,338
121,412

27
28

1,280, O U

-

1

27/138,888,566

3,057,835

861,688

231,992

940,615

760,002

250,295

13,245

61,673,777

10,200,742

1,701,625

Compiled net profit or net loss
(13 less 89)
Net income or deficit 81/ (30 less 18)
Net operating loss deduction 28/

9,348,221
8,919,429
182,898

7
7

155,892
155,387
1,345

28/ 520
/ 530
1,381

14,529
14,396
1,644

9,695
9,365
1,638

27,191
27,140
824

28/ 250
28/ 250
14

5,317,005
5,306,540
42,122

408,744
407,794
3,678

132,079
131,834
494

140,248
140,049
156

Income tax 83/
Declared value excess-profits tax 24/

2,144,292
30,744

l
6

35,269
U3

790
4

5,963
89

14,649
75

6,883
151

157
4

1,815,160
21,366

95,794
598

33,188
142

33,667
29

Total compiled deductions

Total tax
Compiled net profit less total tax
(30 less 35)
Dividends paid:
37
Cash and assets other than own stock
38
Corporation's own stock

For footnotes, see page 9

U

354,600
488,798

369
133

2,175,035

64,1283

35,382

794

6,052

14,724

7,035

140

1,236,526

94,392

33,331

33,696

7,173,186

142,4099

120,510

£g/l,515

8,476

£9/5,029

20,157

£9/ 391

4,080,479

314,352

98,748

106,552

6,068,781
139,989

1
0

141,159

2,755

18,596
278

99,391
2,561

20,484
870

205

2,399,627
47,985

245,706
5,201

67,043
817

90,160

100

12

14
15
16
17
18
19
20

21
22
25

30
31
32

33
34

36

Corporation returns, 1940, by major industrial groups: Number of returns, compiled receipts, compiled deductions, compiled net profit or net loss, net income
or deficit, income tax, declared value excess-profits tax, total tax, and dividends paid — Continued
(Money figures in thousands of d o l l a r s ) ____________________________________ _
Major industrial groups 1/ - Continued
Manufacturing - Continued
Textilemill
products

1
2

3
4

5

6

7
8

9
10
il

12

Number of returns 4/
Receipts:
Gross sales ¡J
Gross receipts from operations 6/
Interest, not on Government obligations
Rents and royalties 7/
Net capital gain §/
Net gain, sales other than capital
assets 9/
Dividends, domestic corporations 10/
Dividends, foreign corporations 11/
Other receipts, not interest on
Government obligations
Interest on Government obligations:
Subject to excess-profits tax 12/
Wholly tax-exempt 13/

Apparel and Leather and
products
products
made from
fabrics

Furniture
Lumber and
timber basic and
products
finished
lumber
products

Rubber
products

Paper and
allied
products

Printing
and
publishing
industries

Chemicals
and allied
products

Petroleum
and coal
products

Stone, clay,( Iron, steel,
and products
and glass
products

. 4,799

8,437

2,118

586

2,644

4,497

2,182

11,451

6,834

655

3,490

4,112,537
67,132
3,808
12,343
613

2,459,666
33,238
962
4,290
120

1,275,556
3,868
1,149
1,559
172

1,142,983
2,334
1,578
2,331
48

1,044,443
19,560
1,765
5,994
2,687

1,370,708
8,791
1,522
2,347
447

2,005,728
4,248
8,711
5,914
1,576

2,238,654
115,146
4,426
12,634
1,064

4,700,640
32,552
8,293
15,079
2,194

5,208,535
279,520
15,016
44,078
2,543

1,663,251
7,425
2,336
6,087
858

1,335
5,106
1,076

203
1,345
57

406
1,507
19

136
5,950
7,572

1,599
2,737
15

573
1,777
615

807
6,161
1,377

789
15,224
1,476

738
70,370
16,216

1,976
101,749
5,599

1,289
9,514
11,736

24,580

9,103

6,025

2,513

12,657

9,043

12,046

20,174

20,141

26,820

10,650

90
48

67
44

197
77

377
209

615
249

1,145
1,034

1,551
1,680

526
590

630
354

554
473

178
131 .

4,229,556

2,509,293

1,290,402

1,165,553

1,091,731

1,396,408

2,047,433

2,411,766

4,869,254

5,684,951

1,714,131

3,340,922
43,784
71,476
13,143
43,984
5,537
21,995
80,881
941
88,585
10
52
6,372

1,994,988
24,393
86,894
25,300
4,055
6,667
7,865
30,264
570
11,008
2
10
648

1,060,258
1,942
27,748
7,623
7,959
2,781
4,355
19,269
288
11,662
57
2
528

811,211
99
9,690
5,033
17,485
6,266
7,543
51,442
176
27,630
8
5
273

763,235
12,279
23,164
3,162
8,464
5,054
9,858
25,006
201
27,796
26,461
59
8,232

1,017,383
3,374
44,516
9,694
12,262
5,078
6,518
27,077
306
22,241
1,494
8
2,221

1,426,506
1,203
41,710
9,820
43,598
6,094
21,884
43,586
745
67,003
3,015
100
3,595

1,465,244
56,465
107,803
31,260
9,775
11,385
15,243
52,265
1,282
46,007
9
8
5,775

2,949,305
5,690
81,180
15,367
59,564
12,129
20,354
106,170
1,501
131,608
5,531
575
6,067

3,746,715
156,664
14,286
56,646
78,678
11,568
37,965
202,681
840
271,062
149,056
4
16,277

1,083,693
4,586 ¡
38,550 I
5,983
38,668
4,580
9,546
39,164
633
62,178
1,713
149
4,282

6,378
312,479

824
272,378

682
107,455

542
157,396

1,871
118,049

1,820
179,291

2,372
194,684

5,479
454,543

2,988
803,427

2,347
691,757

2,215
216,826

4,036,539

2,465,865

1,252,609

1,094,795

1,032,891

1,333,283

1,865,912

2,262,542

4,201,452

5,436,546

1,512,565

30 Compiled net profit or net loss
(13 less 29)
31 Net income or deficit 21/ (30 less 12)
Net operating loss deduction 22/

193,017
192,545
2,686

43,428
43,297
1,043

37,793
37,745
632

70,758
70,715
199

58,840
58,763
3,049

63,125
62,916
1,094

181,520
181,271
1,303

149,224
148,190
1,870

667,802
666,122
2,056

248,405
247,815
805

201,566
201,212
1,062

33 Income tax 23/
34 Declared value excess-profits tax 24/

49,109
968

11,520
241

9,110
209

14,783
280

15,805
565

15,657
426

42,546
300

36,993
226

145,106
734

44,751
119

47,294
932

50,097

11,762

9,319

15,065

16,368

16,083

42,847

37,219

145,841

44,870

48,226

142,921

31,666

28,474

55,695

42,472

47,041

138,673

112,005

521,961

203,536

153,341

78,943
3,595

20,336
4,820

22,600
1,199

27,176
249

37,967
418

28,588
876

65,067
1,681

89,439
2,117

336,000
6,198

185,849
793

102,814
1,480

13
14
15
16
17
18
19
20
21
22

23
24
25
26
27
28
29

Total compiled receipts 14/ ■
Deductions:
Cost of goods sold. 15/
Cost of operations 16/
Compensation of officers
Rent paid on business property
Repairs 17/
Bad debts
Interest paid
Taxes paid 18/
Contributions or gifts 19/
Depreciation
Depletion
Amortization 20/
Net long-term capital loss 8/
Net loss, sales other than capital
assets 9/
Other deductions
Total compiled deductions

52

35

Total tax

36 Compiled net profit less total tax
(30 less 35)
Dividends paid:
Cash and assets other than own stock
37
Corporation's own stock
38

For footnotes, see page 9

Corporation returns, 1940, by major industrial groups: Number of returns, compiled receipts, compiled deductions, compiled net profit or net loss, net income
or deficit, income tax, declared value excess-profits tax, total tax, and dividends paid - Continued
(Money figures in thousands of dollars)
Major industrial groups 1/ - Continued
Public u bilities

Manufacturing - Continued
Nonferrous
metals and
their
products

1
2
3
4
S
6
7
8
9
10

11
12
15
14
15
16
17
18
19

20
21
22
23
24
25
26
27
28
29

Number of returns 4/
Receipts:
Gross sales §/
Gross receipts from operations 6/
Interest, not on Government obligations
Rents and royalties 7/
Net capital gain 8/
•
Net gain, sales other than capital
assets 9/
Dividends, domestic corporations 10/
Dividends, foreign corporations 11/
Other receipts, not interest on
Government obligations
Interest on Government obligations.
Subject to excess-profits tax 12/
Wholly tax-exempt 13/
Total compiled receipts 14/
Deductions:
Cost of goods sold 15/
Cost of operations 16/
Compensation of officers
Rent paid on business property
Repairs 17/
Bad debts
Interest paid
Taxes paid 18/
Contributions or gifts 19/
Depreciation
Depletion
Amortisation 20/
Net long-term capital loss 8/
Net loss, sales other than capital
assets 9/
Other deductions
Total compiled deductions

50 Compiled net profit or net loss
(13 less 29)
31 Net income or deficit 21/ (30 less 12)
Net operating loss deduction 22/

32

53 Income tax 23/
34 Declared value excess-profits tax 24/
35

Total tax

36 Compiled net profit less total tax
(30 less 35)
Dividends paid:
Cash and assets other than own stock
37
Corporation's own stock
38
For footnotes, see page 9

Electrical
machinery
and equip­
ment

Machinery,
except
transporta­
tion equip­
ment and
electrical

Automobiles
and equipment,
except
electrical

Transporta­
tion equip­
ment, except
automobiles

Other manu­
facturing

Manufactur­
ing not
allocable

Total
public
utilities

Transporta­
tion

Communica­
tion

Other
public
utilities

2,534

1,787

5,839

808

787

4,075

1,968

22,053

14,649

3,674

5,730

1

1,913,505
61,185
3,555
2,592
144

2,440,339
5,813
3,937
6,448
268

4,468,527
70,295
13,732
33,600
3,476

4,669,548
1,724
5,584
10,638
7,698

1,162,987
595,517
2,204
7,604
961

1,138,511
9,233
2,382
3,424
260

418,861
2,578
716
1,104
182

154,183
12,967,200
83,093
248,971
5,157

112,756
7,656,405
50,161
199,982
2,490

2,757
1,516,272
2,939
22,732
521

38,670
3,794,525
29,993
26,256
2,145

4
5
6

131
12,887
4,765

577
13,511
3,542

5,536
10,763
10,146

1,771
46,182
31,075

1,884
6,984
270

174
6,077
2,402

196
798
384

29,960
130,474
1,410

27,935
72,153
656

55
14,620
30

1,972
43,700
724

8

12,374

15,321

27,000

21,761

16,039

6,830

3,420

83,419

61,950

3,519

17,950

10

308
171

570
945

1,887
1,608

365
451

180
182

148
125

149
50

4,136
2,369

2,982
1,355

48
234

1,106
779

U

2,0U, 619

2,491,071

4,644,565

4,796,798

1,594,812

1,169,567

428,436

15,710,572

8,188,824

1,565,727

3,957,821

13

1,467,715
30,964
36,698
6,984
24,806
2,680
7,084
38,238
450
33,616
2,995
188
2,772

1,655,238
2,707
32*597
9,055
28,791
4,437
5,036
59,856
889
50,594
75
373
5,899

2,866,719
5,549
107,944
14,690
73,089
13,407
16,066
106,374
2,131
102,666
248
1,545
7,402

3,626,176
413
22,926
5,504
66,237
5,838
6,112
145,267
2,040
91,618
659
407
1,637

820,935
295,193
16,285
6,072
30,813
1,500
5,342
38,301
270
35,429
29
1,852
5,085

731,629
4,825
43,912
9,645
8,241
4,404
4,601
25,260
418
20,895
30
87
1,518

500,722
1,550
16,071
2,534
3,391
1,641
2,678
7,433
94
7,619
533
23
1,717

111,334
7,365,107
123,404
500,368
37,679
22,032
1,075,254
1,057,965
3,693
900,397
12,888
107
47,728

78,899
5,127,948
90,914
425,621
30,025
6,939
647,636
525,757
603
271,809
2,702
94
39,770

1,531'
705,120
9,156
33,258
2,091
5,449
48,684
138,926
885
188,055
(30)
6
1,409

30,905
1,532,040
25,534
41,489
5,562
9,643
578,934
395,282
2,205
440,536
10,186
7
6,548

14
15
16
17
18
19
20

2,604
139,366

967
315,165

3,392
683,886

1,979
254,148

3,004
87,865

1,009
200,224

678
59,884

26,425
1,110,582

21,764
588,827

1,251
148,557

5,411
373,198

27
28

1,797,159

2,171,672

4,005,105

4,228,963

i,345,975

1,056,698

406,567

12,394,963

7,867,506

1,284,377

3,255,280

29

214,460
214,289
744

319,399
318,454
927

639,460
637,858
4,486

567,836
567,385
1,104

248,838
248,656
4,117

112,868
112,743
933

21,869
21,819
334

1,315,409
1,315,040
33,001

351,517
330,163
10,225

279,550
279,116
1,596

704,541
703,761
21,180

30

48,749
631

74,139
1,245

143,896
5,299

127,709
745

57,402
1,856

26,740
740

6,011
266

347,346
1,195

124,052
865

65,055
100

158,238
231

33
34

49,380

75,383

149,195

128,452

59,258

27,480

6,277

348,541

124,917

65,155

158,469

35

165,079

244,016

490,265

439,384

. 189,579

85,388

15,592

966,868

206,600

214,196

546,072

56

68,427
822

147,221
2,248

218,139
7,210

249,339
473

71,234
208

45,753
2,025

10,080
337

1,075,328
11,316

331,514
1,272

201,762
605

542,052
9,439

37
38

2
3

7
9

12

21
22
25
24
25
26

31
32

Corporation returns, 1940, by major industrial groups: Number of returns, compiled receipts, compiled deductions, compiled net profit or net loss, net income
or deficit, income tax, declared value excess-profits tax, total tax, and dividends paid - Continued
(Money figures in thousands of dollars)_________________________________________________ __
Major industrial groups ¿/ - Continued
Trade
Total
trade

1
2
3
4
5
6
7
8
9
10
11
12
13
14
IS
16
17
18
• 19
20
• 21
22
23
24
25
26
27
28
29

Number of returns 4/
Receipts:
Gross sales 5/
Gross receipts from operations 6/
Interest, not on Government obligations
Rents and royalties 7/
Net capital gain §/
Net gain, sales other than capital
assets 9/
Dividends, domestic corporations 10/
Dividends, foreign corporations jjy
Other receipts, not interest on
Government obligations
Interest on Government obligations*
Subject to excess-profits tax 12/
Wholly tax-exempt 13/
Total compiled receipts 14/
Deductions:
Cost of goods sold 15/
Cost of operations 16/
Compensation of officers
Rent paid on business property
Repairs 17/
Bad debts
Interest paid
Taxes paid 18/
Contributions or gifts 19/
Depreciation
Depletion
Amortization 20/
Net long-term capital loss 8/
Net loss, sales other than capital
assets $/
Other deductions
Total compiled deductions

31
'32

Compiled net profit or net loss
(13 less 29)
Net income or deficit 21/ (30 less 12)
Net operating loss deduction 22/

S3
34

Income tax 23/
Declared value excess-profits tax 24/

30

35
36
37
38

Total tax
Compiled net profit less total tax
(30 less 35)
Dividends paid:
Cash and assets other than own stock
Corporation's own stock
For footnotes, see page J

Total
wholesale

Wholesale
Commission
merchants

Retail
Other wholesalers

Total
retail

General
merchandise

Food stores,
including
market milk
dealers

Apparel and
accessories

Drug
stores

Package
liquor
stores

Furniture
and house
furnishing8

Eating and
drinking
places

139,849

37,502

4,639

32,863

85,798

6,502

6,860

1,703

5,436

11,401

5,691

9,623

1

45,783,711
693,684
74,654
97,910
7,439

21^245,576
426,497
27,653
23,560
3,164

390,072
224,673
5,703
1,645
229

20,855,504
201,824
21,949
21,915
2,935

20,926,350
205,664
40,828
62,627
3,609

5,717,487
29,376
20,392
25,982
1,553

4,094,961
18,173
1,015
4,398
301

96,256
777
10
107
12

618,813
2,653
462
1, 535
455

1,892,685
13,803
1,348
7,954
185

790,921
10,061
2,728
2,309
89

752,263
29,130
443
4,279
62

2
3
4
5

205
2,228
(30)

179
479
(30)

313
1,155
(30)

7

6

7,073
48,893
40,071

2,278
27,569
11,055

177
6,649
117

2,101
20,920
10,938

3,562
19,030
8,514

368
8,898
8,481

870
1,755
8

32
i
•

122
1,497
(SO)

457,942

120,365

8,983

111,382

305,826

77,020

13,214

168

5,699

59,775

88,259

4,070

10

2,819
1,849

1,116
827

81
133

1,035
694

1,479
837

579
286

489
125

7
7

145
55

42
34

37
20

11
12

47,216,043

21,889,660

638,462

21,253.,198

21,578,326

5,890,220

4,185,310

97,362

631,249

1,958,384

895,102

791,751

13

36,788,065
231,423
901,592
704,239
97,694
159,136
134,357
467,894
8,523
292,145
1,023
858
34,139

18,545,444
109,258
366,161
98,948
19,905
62,793
51,529
130,203
2,813
68,576
431
369
16,397

359,473
22,944
40,470
9,405
550
4,369
3,706
6,777
281
3,312
33
229
2,285

18,186,971
86,314
325,691
89,543
19,355
58,424
47,823
123,426
2,532
65,264
398
140
14,112

15,383,965
100,193
436,090
563,374
68,é06
78,752
68,957
293,540
5,061
192,613
405
280
15,407

5,827,717
7,860
54,327
164,468
22,088
22,421
20,892
106,953
2,221
59,471
63
4
6,849

3,255,231
11,106
55,576
62,412
14,547
3,914
6,907
43,622
775
40,960
3
U
2,587

75,734
559
5,536
2,905
131
67
167
1,875
9
546
(30)
5
1

432,796
1,214
17,097
31,880
1,931
457
1,118
8,991
116
6,708
3
11
43

1,246,841
4,822
64,401
125,195
4,569
8,123
4,483
24,877
647
16,002
31
98
983

452,115
2,317
37,288
28,210
2,060
9,497
5,103
14,840
252
5,610
2
3
262

441,721
16,424
30,242
52,428
6,833
522
2,815
20,257
162
18,843
18
40
478

14
15
16
17
18
19
20

13,393
6,297,470

4,055
1,975,579

327
150,400

3,728
1,825,179

7,325
3,828,339

1,007
1,283,914

1,338
599,760

22
9,727

114
115,742

628
415,006

204
316,123

403
197,082

27
28

46,131,971

21,452,461

604,561

20,847,900

21,042,907

5,580,256

4,078,748

97,286

618,221

1,916,704

873,885

788,246

29

1,084,072
1,082,223
16,S69

437,198
436,371
6,948

33,901
33,768
496

403,297
402,603
6,452

535,419
534,582
7,770

309,965
309,679
1,148

56,562
56,436
677

75
75
49

13,028
13,021
168

41,680
41,625
1,205

21,218
21,184
857

3,505
3,485
511

30
31

262,928
4,913

100,142
2,357

7,076
185

93,066
2,172

134,937
1,451

73,378
282

15,218
73

135
8

5,049
68

11,228
153

5,540
83

3,045
59

S3
34

267,842

102,499

7,261

95,238

136,388

73,660

15,292

143

3,118

11,381

5,625

3,104

55

816,230

334,699

26,640

508,059

399,031

236,305

41,270

■gj 67

9,911

30,299

15,595

401

36

7,333
197

7,522
59

57
36

512,465
19,118

173,001
9,989

17,983
279

155,018
9,711

276,358
6,467

153,864
2,340

38,079
899

-

53
34

7,419
57

19,091
473

8

9

21
22
25
24
25
26

32

Corporation returns, 1940, by major industrial groups: Number of returns, compiled receipts, compiled deductions, compiled net profit or net loss, net income
or deficit, income tax, declared value excess-profits tax, total tax, and dividends paid - Continued
(Uoney figures in thousands of dollars)
_____________________
liajor industrial groups 1/ - Continued

< .
Service

Trade - Continued

1

Number of returns 4/

z 1

3
4
5
6
7
8
9
10
11
1?
13
14
IS
16
17
18
19
20
21
22
23
24
25
26
27
28

Receipts:
Gross sales 5/
Gross receipts from operations 6/
Interest, not on Government obligations
Rents and royalties 2/
Net capital gain 8/
Net gain, sales other than capital
assets 9/
Dividends, domestic corporations 10/
Dividends, foreign corporations 11/
Other receipts, not interest on
Government obligations
Interest on Government obligations:
Subject to excess-profits tax 12/
Wholly tax-exempt 13/
Total compiled receipts 14/

Deductions:
Cost of goods sold 15/
Cost of operations 16/
Compensatibn of officers
Rent paid on business property
Repairs 12//
Bad debts
Interest paid
Taxes paid 18/
Contributions or gifts 19/
Depreciation
Depletion
Amortization 20/
Net long-term capital loss § J
Net loss, sales other than capital
assets 9/
Other deductions

Personal
service

Business
service

4,852

9,256

7,562

3,803

1

409,854
3,265,240
7,985
78,270
2,460

178,118
423,535
813
30,490
498

72,109
580,312
452
1,805
144

36,253
728,488
2,717
14,093
390

45,261
116,881
175
4,920
28

2
3
4
5
6

1,232
2,294
20,502

2,935
23,033
4,540

364
1,450
27

376
552
85

421
2,822
490

283
128
-

7
8
9

12,421

31,751

50,882

7,783

5,824

9,701

2,048

10

22
31

224
184

352
582

28
21

49
74

150
80

3
7

11
12

919,607

592,155

3,748,058

3,846,133

643,128

659,782

795,605 .

167,732

IS

950,295
6,995
46,725
8,181
5,522
10,990
6,762
18,924
251
14,931
123
12
1,976

607,352
6,116
39,617
31,268
2,064
6,900
3,710
13,117
184
7,742
110
8
518

449,973
3,092
17,078
9,026
1,387
4,137
2,556
6,715
95
5,064
25
6
124

2,858,675
21,972
99,341
41,918
9,184
17,590
13,872
44,150
649
30,957
186
209
2,535

251,660
1,754,432
198,790
201,291
47,358
20,899
59,196
121,700
1,415
142,677
98
86
8,428

102,451
181,357
15,010
39,663
21,654
2,709
29,405
41,419
97
47,023
15
11
3,853

36,365
326,594
49,281
20,193
8,889
5,021
4,732
18,539
267
25,634
9
14
499

26,674
412,408
62,069
18,397
3,354
7,858
5,080
13,204
280
14,874
4
9
1,384

30,450
60,974
10,804
20,256
1,035
878
1,987
4,785
20
6,122
1
7
179

14
IS
16
17
18
19
20
21
22
23
24
25
26

81
24,898

1,081
176,227

1,517
184,837

196
85,330

2,013
493,552

6,010
923,499

1,902
170,528

527
150,987

404
202,517

503
29,511

27
28

3,737,537

657,098

647,551

766,516

167,511

29

108,595 28/15,969
108,013 ¿8/13,990
5,572
921

12,231
12,157
612

29,089
29,009
648

221
214
137

50
31
32

Retail - Continued
Building
-Hardware
materials,
fuel and ice

Retail
trade not
allocable

Trade not
allocable

Total
service

Automotive
dealers

Filling
stations

10,722

2,675

2,850

8,812

8,403

5,120

16,549

41,385

3,788,336
61,126
6,404
2,098
169

307,813
4,330
134
3,014
109

184,699
875
688
457
20

1,237,018
12,200
2,745
4,864
438

875,391
16,525
3,070
4,233
134

569,708
6,634
1,388
1,397
85

3,611,785
61,523
6,173
11,724
666

227
634
9

135
211
2

37
34
(30)

646
1,302
4

246
574
6

183
283
2

28,060

2,056

2,232

13,553

19,299

105
23

92
93

6
41

86
63

68
60

3,887,190

317,990

189,088

1,272,919

3,268,316
36,918
71,227
36,613
5,189
9,396
12,563
24,095
282
10,289
17
81
1,354

234,861
2,354
7,212
6,794
2,023
939
894
6,575
32
5,206
10
2
182

141,012
418
9,765
3,995
262
1,389
988
2,720
37
1,240
(30)
(30)
51

648
376,084

86
43,608

Other
retail
trade

Hotels and
other
lodging
places

Automotive
repair
services and
garages

3,853,070

310,778

186,856

1,248,993

905,060

584,804

3,636,604

30 Compiled net profit or net loss
(13 less 29)
31 Net income or deficit 21/ (30 less 12)
32 Net operating loss deduction 22/

34,120
34,097
1,178

7,212
7,119
213

2,232
2,191
76

23,926
23,864
800

14,547
14,487
691

7,351
7,319
196

111,455
111,270
1,851

33 Income tax 23/
34 Declared value excess-profits tax 24/

8,138
225

1,901
22

726
37

5,856
184

4,652
171

2,071
85

27,849
1,106

36,558
408

3,155
42

3,871
74

9,382
72

696
17

S3
54

8,363

1,923

762

6,040

4,824

2,156

28,954

36,966

5,196

3,945

9,455

712

35

29

35

Total compiled deductions

Total tax

36

Compiled net profit less total tax
(30 less 35)
Dividends paid:
37
Cash and assets other than own stock
38
Corporation's own stock
For footnotes, see page 9

25,757

5,289

1,469

17,886

9,723

5,195

82,500

71,629 ¿g/17,166

8,286

19,634

¿2/491

56

13,589
778

4,916
125

1,105
92

12,629
693

6,869
582

3,890
140

63,106
2,662

91,408
2,411

6,147
191

8,015
555

25,419
264

1,287
31

37
38

Corporation returns, 1940, by major Industrial groups: Number of returns, compiled receipts, compiled deductions, compiled net profit or net loss, net income
or deficit, income tax, declared value excess-profits tax, total tax, and dividends paid - Continued
(Money figures in thousands of dollars)
;

Major industrial groups 1/ - Continued
Service - Continued
MiscellaMotion
Amusement, Other serneous repair pictures
vice in­
except
motion
services,
cluding
schools
pictures
hand trades

1
2
3
4
5

6
7
8

9
10

11
12

Number of returns 4/
Receipts:
Gross sales £/
Gross receipts from operations 6/
Interest, not on Government obligations
Rents and royalties 7/
Net capital gain 8/
Net gain, sales other than capital
assets 9/
Dividends, domestic corporations 10/
Dividends, foreign corporations 11/
Other receipts, not interest on
Government obligations
Interest on Government obligations:
Subject to excess-profits tax 12/
Wholly tax-exempt 13/

Finance, insurance, real estate, and lessors^of real property
Service
Total
Finance
Total
Banks and
finance, in­
not
Long-term Short-term Investment Other in­
credit
trusts and vestment
allocable surance, real finance
credit
trust
agencies,
companies,
companies
estate, and
agencies,
investment
mortgage
including
lessors of
companies
except
real proper­
companies, banks
holding
Zj
companies
except
ty
banks
2/
2,987

5,482

4,065

2,250

2,o n

950
4,655
6
31
(30)

67,552
22,910
767,256
3,729,120
2,209,472 1,345,158
1,504,966
176,425
131,145
113,616

»
293,029
917,014
92,824
88,783

••
15,752
20,776
12,666
1,459

3,355
222,122
157,551
1,814
1,215

—
10,573
30,936
2,806
10,530

14,854
137,452
199,798
19,761
6,400

66,696
5,956
623
2,525

139
505
51

(30)
4

60,257
103,239
1,385,182 1,263,753
74,557
72,855

3,454
26,967
702

639
479
(30)

589
9,597
116

1,778
217,634
7,147

1,284
995,593
64,682

50,550
4,854
45

5,936

75

47,678

4,034

11,975

2,546

15,006

4,890

IO

11
18

4,858

4,988

179

14,652
46,102
38
120
6

27,258
920,286
2, 339
19,186
722

15,314
216,277
340
4,221
255

21,937
228,726
1,109
3,403
417

105
5
7

399
16,782
3,875

848
784
5

432

15,821

5,263

142,602

164,500

13
78

73
163

8

532,129
411,767

61,471

1,006,855

243,597

262,458

5,707

9,913,228

9,574
29,621
5,244
1,412
306
316
315
1*247
XL
1,279
7
17

20,655
532,233
20,934
78,125
6,086
1,553
14,285
24,229
144
28,486
19
17
1,038

9,253
107,989
11,922
12,510
3,970
541
3,305
11,696
527
12,641
11
13
686

15*595
101,172
22,551
10,492
2,037
1,999
2,031
6,446
66
6,486
31
16
740

31
10,593

358
210,080

1,255
59,472

59,972

938,241

30 Compiled net profit or net loss
(13 less 29)
31 Net income or deficit 21/ (30 less 12)
32 Net operating loss deduction 22/

1,499
1,498
63

33 Income tax 23/
34 Declared value excess-profits tax 24/

14
15
16
17
18
19
20

21

22
23
24
25
26
27
28
29

35

Deductions:
Cost of goods sold 15/
Cost of operations 16/
Compensation of officers
Rent paid on business property
Repairs 17/
Bad debts
Interest paid
Taxes paid 18/
Contributions or gifts 19/
Depreciation
Depletion
amortization 20/
Net long-term capital loss 3/
Net loss, sales other than capital
assets 9/
Other deductions
Total compiled deductions

Total tax

11

15,873

4,471

54
150

Total compiled receipts 14/

■

37,462

1,416

2
1

13

j
Security and
commodityexchange
brokers and
dealers

90,534

1 2
i3
4
5
6

7
8
9

262,816
200,276

529
1,106

78
123

1,541
1,648

1,638
2 ,111

1,208
2,123

4,389,556 1,933,545

57,241

108,530

286,937

1,458,559

137,469

12,542
56,499
17,598
16,757
898
15,175
218,500
27,068
774
22,803
718
(30)
114,471

16,633
28,173
6,958
145
1,764
4,105
4,725
108
824
57
2
1,478

U

267,907
209,107

** «i
1,160
8,506
916
297
24,472
31,929
7,549
329
768
424
6
118,841

12

14

52

50,168
219,958
2§/451,S72
204,849
107,887
244,619
991,995
644,256
4,856
417,285
24,456
425
439,200

18,735
84,077
287,186
82,183
16,388
217,847
558,525
168,256
3,627
88,191
1,392
177
336,325

222
192,255
44,755
12,532
126,692
228,975
108,140
2,059
52,129
89
8
78,409

963
6,144
1,200
1,066
7,557
14,057
4,417
25
2,584
37
10
2,171

2,755
2,893
25,558
9,617
642
25,786
50,690
11,467
270
3,366
4
15
3,456

1,051
88,501

(30)
1,309

193,929
22/4,637,664

102,715
1,045,566

19,216
628,801

5,242
28,148

914
157,969

3,534
36,214

61,755
89,055

3,696
61,994

27
28

235,771

259,214

5,665

£7/8,635,096

3,008,790

1,494,277

73,621

295,400

234,946

654,413

130,639

29

68,612
68,462
2,481

7,626
7,548
376

3,244
3,081
527

43
35
5

1,280,132
868,365
11,595

1,380,766
1,171,658
4,286

439,267
238,990
1,230

28/16,381
28/17.487
177

US, 130
U3,007
5U

51,991
50,344
833

804,146
802,035
757

6,830
4,708
282

50
31
32

' 416
18

12,525
74

4,025
50

2,443
52

45
10

189,137
1,164

120,597
545

21,724
307

975
7

24,718
95

6,312
27

58,773
46

2,764
22

53

434

12,599

4,075

2,495

55

190,301

120,942

22,031

980

24,813

6,339

58,819

2,786

1,064

56,014

3,551

749

¡ä / x z

1,089,831

1,259,824

417,235

22/17,361

88,317

45,652

745,327

4,044

36

926
9

37,665
294

7,141
952

4,728
115

79

1,655,150 1,’359,251
53,086
50,193

236,458
12,676

4, 595
2,651

69,918
320

174,316
5,586

828,348
28,702

18,054
215

37
j 38

\*

97i
24!
27
23
57
137,
2
132.

16
17
18
19

20
ZI
22
25
24
25
26

34

¡35
I

36 Compiled net profit less total tax
(30 less 35)
Dividends paid:
Cash and assets other than own stock
37
Corporation's own stock
38
' _ _ _
For footnotes, see page 9

é

Corporation returns, 1940, by ^ajor industrial groups: Number of returns, compiled receipts, compiled deductions, compiled net profit or net loss, net income
or deficit, income tax, declared value excess-profits tax, total tax, and dividends paid - Continued
___________________________________(Money figures in thousands of dollars)
Major industrial groups ¿/ - Continued
Finance, insurance, real estate, and lessors
Finance — Continued
Other
Finance
Total
Insurance
finance
not
insurance
carriers
companies
allocable
carriers,
agents,
etc.
Number of returns 4/
Receipts:
Gross sales £/
Gross receipts from operations 6/
Interest, not on Government obligati
Rents and royalties 7/
Net capital gain 2/
Net gain, sales other than capital
assets 9/
Dividends, domestic corporations 10/
Dividends, foreign corporations 11/
Other receipts, not interest on
Government obligations
Interest on Government obligations:
Subject to excess-profits tax 12/
Wholly tax-exempt 13/

U
14
IS
16
17
18
19

20
21
22
23
24
25
26
27
28
29
30

Total compiled receipts 14/
Deductions:
Cost of goods sold 15/
Cost of operations 16/
Compensation of officers
Rent paid on business property
Repairs 17/
Bad debts
Interest paid
Taxes paid 18/
Contributions or gifts 19/
Depreciation
Depletion
Amortization 20/
Net long-term capital loss g/
Net loss, sales other than capital
assets g/
Other deductions
Total compiled deductions

31
32

Compiled net profit or net loss
(13 less 29)
Net income or deficit £1/ (30 less 12)
Net operating loss deduction 22/

33
34

Income tax 23/
Declared value excess—profits tax 24/

35
36
37
38

Total tax
Compiled net profit less total tax
(30 less 35)
Dividends paid:
Cash and assets other than own stock
Corporation's own stock
For footnotes, a

page 9

1,837

2,957

of real property — Continued
etc«
Insurance
agents,
brokers,
etc.

Agriculture, forestry, and fishery

Beal
Lessors of
estate,
real
including
property,
lessors of except
buildings
buildings

Construc­
tion

Total
agriculture,
forestry,
and fishery

Agriculture
and
services

8,158

1,881

6,267

89,754

7,268

15,749

8,400

7,540

5i£

518

1

4,704
6,459
3,996
45,325
897

15,192
11,131
2,607
1,809

1,985,549
835,675
191,018
4,341

1,792,810
832^680
189,505
4,021

192,739
994
1,515
320

40,133
968,926
28,536
754,911
11,460

4,509
7,390
2,103
182,612
1,728

199,502
2,275,345
2,580
11,741
989

518,426
89,868
2,433
10,766
2,305

484,357
81,769
2,037
10,407
1,056

6

780
5,341
85

1,183
3,288
57

263
102,038
1,323

158
98,358
1,067

105
5,681
257

41,770
16,302
167

948
3,089
34

3,078
7,749
771

2,904
6,697
314

1,022
6,467
508

8
9

1,588

2,617

11,520

6,578

4,942

56,605

25,841

27,460

8,858

7,802

IO

46
81

452
1,640

62,691
201,156

62,644
201,113

47
42

1,201

351

1,284

220

346
424

743
108

728
99

U
12

67,500

39,976

3,393,575

3,188,933

204,642

1,901,294

228,803

2,527,985

643,420

596,051

854
21/12,910
15,015
1,844
3,498
49,651
106,681
264
42,153
7

27,713
114,211
102,287
96,498
87,718
19,434
531,355
342,609
775
275,098
661
230
36,738

5,721
629
5,178
3,754
1,660
2,199
51,356
22,140
43
10,165
22,393
7
4,441

156,165
1,888,391
111,961
13,945
7,560
8,373
32,657
396
38,299
183
57
4,974

581,217
25,432
20,788
14,751
12,078
3,746
13,166
16,590
85
27,504
2,604
7
8,188

352,926
21,781
19,173
14,401
11,444
3,297
11,635
14,830
76
25,933
717
7
6,595

2

S
4

5
7

IS

3,638
3,694
4,175
781
619
8,309
3, 515
2,538
46
4,940
22
139
4,861

12,637

60,703

20,168
44,011
7,399
277
1,640
1,328
4,570
149
1,677
4
10
993

5,856
25,435

2, 502
15,751

4,732
4,603
28/3,044,146 28/2,948,171

129
95,975

82,240
526,532

4,241
23,619

1,747
182,795

5,183
95,010

2,334
87,979

68,569

56,925

27/5,424,686

27/3,246,354

178,332

2,044,076

155,544

2,459,720

626,349

573,126

28/1,269
2g/l,350
356

28/16» 949
28/L8,588
140

28/31,111
28/232,267
922

œ/57,421
28/258,534
579

26,310
28/142,782
26,267 I 28/144,066
343
5,177

73,260
73,040
1,209

68,265
67,841
5,308

17,070
16,963
1,564

22,925
22,826
1,328

4,157
28

975
13

23,217
190

17,744
3

5,473
186

.24,148
577

21,375
53

18,858
934

9,190
282

8,542
200

4,185

988

23,406

17,747

5,659

24,525

21,428

19,792

9,472

8,742

22/5,455

22/17,937

22/54,517

22/75,168

22/167,307

51,831

48,473

7,598

14,183

22/6,913

19,447
10

8,114
32

128,702
1,314

111,460
534

87,643
1,465

79,535
114

30,905
2,009

25,907
115

23,681
113

1,817
(30)

2,013
4,778
1,221
189
8,092
6,557
2,332
15
777
61

-

«1,022
28/56,921
22,414
2,121
5,139
50,979
111,251
413
43,830
10
10
61,696

17,242
780

12,221

14

IS

1Ç
17
18
19
20

21
22

22/6,620
28/6,626
69

9

%

Footnotes
l/ Corporations are classified industrially on the one
business activity which accounts for the largest
percentage of receipts. Therefore, the industrial
groups contain corporations not engaged exclusively
in the industries in which they are classified.
The industrial groups are based on the Standard
Industrial Classification, issued by the Division
of Statistical Standards, Bureau of the Budget,
Executive Office of the President. A chart showing the industrial groups in which changes occur,
between 1940 and 1939, appears in the preliminary
report, "Statistics of Income for 1940, Part 2."

E:

I .

§

2/ Consists of corporations which derived 90 percent
or more of receipts from investments and which at
no time during the taxable year had investments
Tn corporations in which they owned 50 percent or
more of the voting stock.
3 / Consists of (a) corporations which derived 90 per­
cent or more of receipts from investments and whioh
at some time during the taxable year had invest­
ments in corporations in whioh they owned 50 percent
or more of the voting stock and (b) corporations
which derived less than 90 percent but more than
50 percent of receipts from investments.
4/

Excludes returns of inactive corporations.

5/ Gross sales less returns and allowances where inven­
tories are an income-determining factor. For "Cost
of goods sold," see "Deductions."

receiving a large portion of their gross income
from sources within a possession of the United
States) are included in "Other receipts."

m

Consists of amount reported in column 3, schedule E,
page 3, Form 1120, and not used for the computation
of dividends received credit.

}&/

Consists of interest on United States savings bonds
and Treasury bonds owned in principal amount over
$5,000, reported as item 8, page 1, Form 1120.

13/

Consists of interest on obligations of States,
Territories, and political subdivisions thereof,
the District of Columbia, and United States pos­
sessions;, obligations of the United States issued
on or before September 1, 1917, Treasury notes,
Treasury bills, and Treasury certificates of in­
debtedness; United States savings bonds and Treasury
bonds owned in principal amount of $5,000 or less;
and obligations of instrumentalities of the United
States.

14/

Exoludes nontaxable income other than interest on
wholly tax-exempt obligations reported in schedule
M, page 4, Form 1120.

15/

Includes taxes which are reported in "Cost of goods
sold."

16/ Includes taxes which are reported in "Cost of opera­
tions ."

6/ Gross receipts from operations where inventories are
not an income-determining factor. For "Cost of
operations," see "Deductions."

17/

The cost of incidental repairs, including labor and
supplies, which do not add materially to the value
of the property or appreciably prolong its life.

7/ Consists of gross amounts received. The amounts of
depreciation, repairs, interest, taxes, and other
expenses which are deductible from the gross amount
received for rents, and the amount of depletion
which is deductible from the gross amount of roval—
ties received, are included in the proper deduction
items.

18/

Excludes (1) Federal income tax and declared value
excess-profits tax, (2) taxes reported in "Cost of
goods sold" and "Cost of operations," and (3) in­
come and profits taxes paid to foreign countries and
United States possessions, if any portion is claimed
as. a credit against income tax.

19/

Limited to 5 percent of net income before deduction
of contributions or gifts.

20/

The deduction, provided by the Second Revenue Act of
1940, to allow for the amortization of the coat of emer­
gency facilities necessary for national defense. In­
asmuch as 1940 is the first year for which this provision
is operative the amounts reported under this caption on
the returns may include amortization other than the cost
of emergency facilities.

21/

"Net income" or "Deficit"fis the amount reported for
declared value excess-profits tax computation adjusted
by excluding net operating loss deduction (items 30
and 26, respectively, page 1, Form 1120).

22/

The net operating loss deduction is the carry-over of
the preceding year reduced by certain adjustments.
This deduction is first available in a taxable year
beginning after December 31, 1939.

23/

Includes income defense tax.

24/

Includes declared value excess-profits defense tax.

25/

Excludes compensation of officers of life insurance com­
panies which file Form 1120L.

26/

Includes special deductions of life insurance companies
relating to reserve for dividends and reserve funds
required by law.

27/

See notés 25 and 26.

28/

Compiled net loss or deficit.

29/

Compiled net loss after total tax payment.

30/

Less than $500.

8/ Net capital gain or loss is the amount from the sale
or exchange of capital assets. The term "Capital
assets" means property held by the taxpayer (whether
or not connected with the trade or business), but
excludes (1) stock in trade or other property which
would properly be included in inventory if on hand
at the close of the taxable year, (2) property held
primarily for sale to customers in the ordinary
course of trade or business, and (3) property, used
in trade or business, of a character which is sub­
ject to the allowance for depreciation. For tax­
able years beginning after December 31, 1939, sales
or exchanges of capital assets are divided as be­
tween short and long-term. "Short-t8rm" applies
to capital assets held 18 months or less. Unlike
a net short-term capital gain, which is taken into
account in computing net income, a net short-term
capital loss is not taken into account in computing
net income but is carried over as a short-term
capital loss in the succeeding taxable ’/ear (in an
amount not in excess of the net income for the year
in which such loss was incurred). This carry-over
is restricted to one year. "Long-term" gain or
loss applies to capital assets held over 18 months.
9/

10/

Consists of net gain or loss ,from property used in
trade or business of a character which is subject
to the allowance for depreciation.
Dividends from domestic corporations subject to in­
come taxation (column 2, schedule E, page 3, Form
1120) which is the amount used for the computation
of dividends received credit. Dividends from cor­
porations organized underjbhe China Trade Act, 1922,
and corporations entitled to the benefits of section
251 of the Internal Revenue Code (corporations

TREASURY DEPARTMENT
W ashington
FOR RELEASE, AFTERNOON NEWSPAPERS
W ednesday»January 2 7 , 1943 ________

pre s s S e rv ic e
i | | 34 - 94,

S e c re ta ry o f th e T re a s u ry M orgenthau to d a y made p u b lic th e fo u rt h in th e
s e rie s o f t a b u la t io n s in advance o f th e re p o rt " S t a t is t i c s . o f Incom e f o r 1940
P art 2 , C o m piled frcm C o rp o ra tio n Incom e, D e c la re d V a lu e E x c e s s - p r o f it s , and *
Defense T ax R e tu rn s and P e rs o n a l H o ld in g Company R e tu rn s ," p re p a re d u n d e r th e
d ir e c t io n o f C o m m issioner o f In t e r n a l Revenue Guy T . H e lv e rin g ".
F o r re t u rn s w it h b a la n c e s h e e ts , th e f i r s t o f th e two a tta c h e d ta b le s shows
by m ajor in d u s t r ia l g ro u p s, and th e seco n d t a b le by t o t a l a s s e t s c la s s e s , th e
fo llo w in g d a ta ; Ite m s o f a s s e t s and l i a b i l i t i e s a s - o f th e end o f th e ta x a b le
y e a r, ite m s o f co m p iled r e c e ip t s and co m p ile d d e d u c tio n s, co m p iled n e t p r o f it
o r n e t lo s s , n e t incom e o r d e f ic it , incom e t a x , d e c la re d v a lu e e x c e s s - p r o f it s
ta x , t o t a l t a x , co m p ile d n e t p r o f it le s s t o t a l t a x , and d iv id e n d s p a id .
A d ju stm e n ts o f a s s e t s and l i a b i l i t i e s a re made in t a b u la t in g th e d a ta , when
c e rt a in c o n d itio n s a p p e a r on th e b a la n c e s h e e t, a s fo llo w s ;
( 1 ) a n e g a tiv e
amount re p o rte d in a s s e t s i s t r a n s fe r r e d to i t s a p p ro p ria te p la c e u n d e r l i a ­
b i l i t i e s and " T o t a l a s s e t s " and " T o t a l l i a b i l i t i e s " a r c in c re a s e d by t h is
n e g a tiv e am ount, ( 2 ) a d e f ic it i n s u rp lu s shown u n d er a s s e t s i s t r a n s fe r r e d to
l i a b i l i t i e s and " T o t a l a s s e t s " and " T o t a l I n a b il i t ie s " a re d e cre a se d by th e
amount o f th e d e f ic it , and ( 3 ) re s e rv e s f o r d e p r e c ia t io n , d e p le t io n , and bad
debts when shown u n d e r l i a b i l i t i e s a re u se d t o re d u ce th e c o rre sp o n d in g a s s e t
a cco u n ts and " T o t a l a s s e t s " and " T o t a l l i a b i l i t i e s " a re re d u ce d by th e amount
o f su ch re s e r v e s .
C a p it a l a s s e t s c o n s is t o f ( l ) t a n g ib le a s s e t s , (2 ) in t a n g ib le a s s e t s , and
( 3 ) la n d . T a n g ib le a s s e t s c o n s is t o f su ch item s a s b u ild in g s , m a ch in e ry and
equipm ent, f u r n it u r e and f ix t u r e s , d e liv e r y equipm ent, and n a t u r a l re s o u rc e s .
In t a n g ib le a s s e t s c o n s is t o f su ch ite m s as p a te n ts , c o p y rig h ts , f r a n c h is e s ,
le a s e h o ld s , fo rm u la s , g o o d - w ill, and tra d e -m a rk s .
T a b le 1 o f t h is re le a s e shows g ro s s c a p it a l a s s e t s (e x c e p t la n d ) , re s e r v e s ,
and la n d , w h e re as, t a b le 2 shows n e t c a p it a l a s s e t s - th e n e t f ig u r e a f t e r
d e d u c tin g re s e rv e s f o r d e p r e c ia t io n , d e p le tio n , and a m o rtiz a tio n .
S u rp lu s re s e rv e s c o n s is t o f am ounts re p o rte d by c o rp o ra tio n s und er t h a t
c a p tio n .
S u rp lu s and u n d iv id e d p r o f it s c o n s is t o f p o s it iv e am ounts o f " P a id - in o r
c a p it a l s u rp lu s " and "E a rn e d s u rp lu s and u n d iv id e d p r o f it s . "
I f e it h e r o r
b o th o f th e se am ounts a re n e g a tiv e , th e y a re ta b u la te d as " D e f ic it . "
C o rp o ra tio n s a re c la s s if ie d in d u s t r ia lly on the one b u s in e s s a c t iv it y w h ich
a c c o u n ts f o r th e la r g e s t p e rce n ta g e o f r e c e ip t s . T h e re fo re , th e in d u s t r ia l
g ro u p s c o n ta in c o rp o ra tio n s n o t engaged e x c lu s iv e ly i n th e in d u s t r ie s in w h ich
th e y a re c la s s if ie d *

• • In
analyzing the d a ta , c o n s id e ra tio n sh o u ld bo g iv e n th e s p e c ia l p ro v is io n s o f th o In t e r n a l Rovenuo Code a f f e c t in g th e co m p utatio n o f g ro ss incom e
d e d u ctio n s, and n e t incom e o f in s u ra n c e com panies. Of p a r t ic u la r i m p o r t a n c e ’
are th e p r o v is io n s p e rm ittin g l i f e in s u ra n c e com panies to in c lu d e o n ly in t e r e s t
d iv id e n d s, and re n t s i n g ro s s incom e and a llo w in g a s d e d u c tio n s the e a rn in g s
’
needed t.° m a in ta in re s e rv e fu n d s r e q u ire d by la w and re s e rv e f o r d iv id e n d s . F o r
1940, th e d e d u c tio n s f o r th o se re s e rv e s a re $ 2 8 ,7 6 8 ,4 3 1 f o r re t u rn s w ith n e t
income and. $>930,125,255 f o r re t u r n s 'w ith no n e t incom e.

Table 1.

& JST-

•net Income or deficit, income tax, declared value excess-profits tax, total tax, and dividends paid
(Money figures in thousands of dollars)

All industrial groups

Number of returns with balance sheets V
Assets:
>
Cash 6/^
Notes and accounts receivable (less reserve)
Inventories
Investments, Government obligations 7/
Other investments
Gross capital assets 8/ except land
I
Less reserves
Land
Other assets
Total assets 9/
Liabilities:
Accounts payable
Bonds, notes, mortgages payable:
Maturity less than 1 year
Maturity 1 year or more
,
Other liabilities
Capital stock, preferred
Capital stock, common
Surplus reserves 10 /
Surplus and undivided profits 11/
Less deficit 12/
Total liabilities 9/
Receipts:
Gross sales 15/
Gross receipts from operations 14 /
Interest, not on Government obligations
Rents and royalties 15/
26
Net capital gain 16/
27
Net gain, sales other than capital assets 17/
28
Dividends, domestic corporations 18/
29
Dividends, foreign corporations 19 /
50
Other receipts, not interest on Government obligations
Interest on Government obligations:
51
Subject to excess-profits tax 20/
52
Wholly tax-exempt 21/
55
Total compiled receipts 22/
Deductions:
54
Cost of goods sold 25/
55
Cost of operations 24/
56
Compensation of officers
57
Rent paid on business property
58
Repairs 25/
59
Bad debts
40
Interest paid
41
Taxes paid 26/
42
Contributions or gifts 27/
45
Depreciation
44
Depletion
45
Amortization 28/
46
Net long-term capital loss 16/
47
Net loss, sales other than capital assets 17/
48
Other deductions
49
Total compiled deductions
50
Compiled net profit or net loss (55 less 49)
SI Net income or deficit l/ (50 less 52)
52
Net operating loss deduction 29/
55
Income tax 50/
54 Declared value excess-profits tax 51 /
55
Total tax
56 Compiled net profit less total tax (50 less 55}

¡l

57
58

Dividends paid:
Cash and assets other than own stock
Corporation's own stock
F or footnotes, see page

Is

--- •
1

207,270
55,548,069
55,966,7'
17.1KR-1

No net
income
206,446

Total mining and
quarrying

5,669

5,875,501
6,897,427
2,524,976
10,285,707
52,619,161
55,291,555
8,482,075
4,441,792
2,565,218
91,818,842

418,155
596,188
255,220
106,778
998,285
5,524,499
2,651,105
65,985
151,709
5,065,696

4,166,722

219,627

No net
income
5,216

Major industrial groups 2/
Mining and quarrying
Metal mining
Anthracite mining
Net income

Net income

4,985
17,021
7,655
1,486
24,616
511,286
208,096
19,089
15,575
591.592

12,268
12,092
5,280
4,565
25,592
269,901
150,675
2,750
7,045
204.816

90,461

57,768

15,607

50,897

155,700
14,652
568,216
100,445
122,418
109,860
98,444
27,487
1,064,157 1,046,255
50,178
55,254
482.121
956,452
515,057
50,082
2.298.788 2.548.724

10,569
54,584
16,005
6,582
217,950
2,505
128,157
82,505
591.592

5,472
55,509
10,927
125
75,544
7,866
59,159
16,974
204.816

599
52,855
127,855
160,572
21,555
26,925
4,255
86,801
58,956
556,441
4,961
25,052
4,895
590,058
40,175
64,061
175.541 1,045,478

86,799
5,155
28
1,606
48
52
105
(55)
542

114,590
5*709
110
2,675
1

100,782
1,156
292
2,114
21
106
50

69,541
242,125
159,597
102,944
56,148
157,914
11,416
52,061
259,020
644,589
2,907,522 2,182,154
1,294,196 1,145,574
79,274
21,772
70,866
88,760
2.298.788 2.548.724
272,615

719.122
69,455
2.179
17,558
2,559
1,828
5,012
7
11,892

866,975
8,915
2,499
5,684
796
269
50,559
1,695
4,987

278,580
.199,614
125,452,599

168
119
827,659

665
468
921,291

1,525,794
517,647
79,958
44,670
55,075
15,624
8,858
7.179
41,515
17,240
4,272
6,710
25,770
28,725
99,606
57,777
555
16
107,979
56,108
175,965
60,586
21
42
5,292
11,595
895
15,070
175,485
109,449
2,078,855
928,255
512,617 56/100,576
511,850 56/100,695
6,754
65,056
418
65,474
249,145 56/100,576

509,420
4,806
5,160
755
12,577
510
6,786
45,155
252
50,241
79,918
5
2,449
lès
47,498
745,471
175,820
175,552
1,558
55,229

5,857,806
127,586

181,260
8 ,8 8 8

15,781
2,056

1
56
92,568
59,055
1,595
772
155
1,681
2,204
2,520
6,705
(55)
5,178
9,767
4
1,551
6,989
11,487
109,258
56/16,870
56/16,906

110
55,559
140,482
140,024

56/16,870

58

No net
income
75

“““ “

Bituminous coal,
lignite, peat, etc.

No net
Income
781

99,251,078
17,842,555
1,410,254
1,242,248
155,941
127,285
1,806,262
257,225
925,805

74,421,455
8,752,951
52/2,259,406
1,564,752
1,054,112
579,090
1,608,400
5,550,549
56,761
2,769,766
565,922
6,512
252,850
52,601
55/15,571,502
5^112,184,590
11,268,009
11,068,595
120,406
2,125,442
50,170
2,155,612
9,114,597 56/1,796,597

’

Net income

Crude petroleum and
natural gas productioi

No net
Income
876

Net income

659

1,815

2,651

4,576
52,194
U,567
99,578
6,125
24,445
2,445
11,891
22,445
152,540
167,616 1,119,845
55,060
458,667
1,212
16,644
12,418
25,010
175.541 1,045,478

16,266
58,712
15,855
4,544
49,450
626,975
265,817
18,652
14,905
519,480

67,218
145,997
26,659
55,U 2
151,562
1,595,826
765,881
9,844
17,754
1,079,872

40,545
81,722
22,802
2,815
128,966
1,467,495
705,516
24,226
25,426
1,088,476

11

51,599

46,552

128,511

12

25,455
126,595
50,546
56,088
248,459
10,490
100,725
108,074
519,480

45,905
141,058
48,415
15,802
570,251
49,654
451,554
89,018
1,079,872

257,451
16,747
516
6,170
121
252
555
(55)
5,045

557,888
98,867
2,542
'6,651
5,227
1,558
4,851
59
5,845

227,829
45,174
1,255
6,950
2,288
1,559
2,257
6
4,528

10,684

NO net

ni,022
258,408
48,267
58,044
502,927
28,995
225,745
251,440
1,088,476

1,145

5,450

606,977
19,526
1,520
15,795
1,044
517
5,290
58
5,280

159
6
122,554

60
4
108,055

290
89
654,564

78
45
284,978

545
175
461,964

27
52
289,485

90,046
2,564
1,268
558
2,066
115
2,250
6,691
50
5,249
4,252

85,448
867
548
421
5,225
2,919
5,077
5,516
(55)
2,856
2,506

76
4
4,841
117,566
4,968
4,962
1,581
790
4
794
4,174

287
414
7,556
U5,440
56/5,405
56/5,408

468,981
10,858
6,691
5,507
15,877
1,659
6,495
24,929
76
25,449
15,461
654
155
46,156
624,707
29,657
29,-568
1,605
5,870
84
5,954
25,705

215,558
11,744
5,552
1,579
7,556
465
4,822
11,789
(55)
12,555
4,456
2
5,491
1,580
21,275
299,162
56/14.185
56/14,228

154,676
57,560
11,642
2,902
5,508
1,221
7,905
15,580
101
57,721
65,924
17
1,440
596
49,955
592,546
69,418
69,242
1,576
14,271
67
14,558
55,080

126,559
27,755
8,540
4,748
5,056
856
15,185
14,028
14
52,145
42^957
56
5,974
5,772
61,050
548,591
56/58¡906
56/58.958

n51o

i

2,755

56/5,405

15,901
278

-

’me
56/14,185
2,296
-

87,005
488

56/58,906
10,271
2,056

1
2
5
4
5
6
7
8
9
10

15
14
15
16
Ì7
18
19
20
21
22
25
24
SK

Table 1. - Corporation returns with balance sheets, 1940, by major industrial groups for returns with net income and with no net income l/i Number of returns, assets and liabilities
as of December 51, 1940 or close of fiscal year nearest thereto, compiled receipts, compiled deductions, ocmpiled net profit or net loss,
net income or deficit, income tax, declared value excess-profits tax, total tax, and dividends paid - Continued
(Honey figures in thousands of dollars)
Major Industrial groupe 2/ - Continued
Mining and quarrying - Continued
Nonmetallic mining and
Mining and quarrying
quarrying
not allocable
Net income

ss
54
35
56
57
38
59
40
41
42
43
44
45
46
47
48
49
50
51
52
55
54
55

Number of returns with balance sheets 5/
Assetsi
Cash 6/
Notes and accounts receivable (less reserve)
Inventories
Investments, Government obligations 7/
Other investments
Gross capital assets §/ except land
Less reserves
Land
Other assets
Total assets 9/
Liabilities:
Accounts payable
Bonds, notes, mortgages payable:
Maturity less than 1 year
Maturity 1 year or more
Other liabilities
Capital stock, preferred
Capital stock, common
Surplus reserves 10/
Surplus and undivided profits n /
Less deficit 12/
Total liabilities 9/
Receipts:
Gross sales 15/
Gross receipts from operations 14/
Interest, not on Government obligations
Rents and royalties 15/
Net capital gain 16/~^
Net gain, sales other than capital assets 17/
Dividends, domestic corporations 18/
Dividends, foreign corporations 197
Other receipts, not interest on Government obligations
Interest on Government obligations:
Subject to excess-profits tax 20/
Wholly tax-exempt 21/
Total compiled receipts 22/
Deductions:
Cost of goods sold 25/
Cost of operations 24/
Compensation of officers
Rent paid on business property
Repairs 25/
Bad debts
Interest paid
Taxes paid 26/
Contributions or gifts 27/
Depreciation
Depletion
Amortization 28/
Net long-term capital loss 16/
Net loss, sales other than capital assets 17/
Other deductions
Total compiled deductions
Compiled net profit or net loss (55 less 49)
let income or deficit ¿/ (50 less 52)
let operating loss deduction 29/
income tax 30/
Declared value excess-profits tax 51/
Total tax
Compiled net profit less total tax (50 less 55)
Dividends paid:
Cash and assets other than own stock
Corporation's own stock
F o r footnotes^ see pawe lg

---------------

No net
income

Net Income

Manufacturing

No net
income

Total manufacturing

Food and kindred
products

Nat income

Net income

No net
incase

Beverages

No net
income

Net income

Tobacco Manufactures

No- net
income

Net incase

No net
income

778

752

20

125

45,955

54,265

5,122

4,507

1,610

1,184

118

145

45,919
56,960
40,617
5,048
25,957
554,865
152,611
14,898
15,070
582,701

2,945
9,467
5,051
80
10,978
110,565
47,750
11,456
5,480
106,050

414
616
526
105
264
5,951
1,700
78
75
4,106

250
909
724
49
2,585
25,586
15,957
4,658
1,266
20,051

5,474,128
7,667,655
11,258,065
1,084,517
7,548,255
56,806,691
16,811,825
1,684,847
905,507
54,617,742

269,952
744,725
1,075,767
31,514
684,575
4,965,080
2,552,607
295,125
197,717
5,929,645

470,927
686,560
1,102,288
75,986
765,278
5,166,790
1,584,702
247,656
95,574
5,222,557

28,195
79,954
104,962
6,089
54,466
585,701
274,149
70,387
20,674
676,277

87,117
151,467
273,872
13,158
70,213
642,654
208,555
50,176
54,261
1,114,545

8,190
30,908
48,406
2,018
9,290
172,016
62,707
14,081
10,000
252,201

77,721
165,134
572,687
27,690
87,116
259,154
86,202
9,688
11,255
1,104,201

5,150
8,181
16,125
160
3,159
7,660
5,561
580
711
58,542

17,568

17,865

762

6,586

4,596,189

698,400

335,401

75,125

96,761

28,617

67,566

2,057

10,518
51,855
11,990
23,560
141,588
25,461
150,226
9,864
382,701

6,704
16,940
5,716
15,174
44,659
5,224
22,092
24,505
106,050

195
257
265
80
864
158
1,654
87
4,106

1,552
4,054
753
502
11,224
7
2,551
6,559
20,051

1,485,079
4,451,130
5,278,528
4,869,715
17,527,645
2,402,561
16,556,688
549,792
54,617,742

531,196
966,657
377,159
713,846
2,517,441
181,756
1,358,509
1,195,259
5,929,645

214,519
589,850
186,148
665,421
1,765,555
228,870
1,504,050
61,275
5,222,557

63,105
118,705
35,554
76,091
285,575
10,082
150,085
115,820
676,277

61,575
144,682
62,060
57,258
256,717
25,871
418,406
6,786
1,114,545

52,864
40,940
15,650
14,649
85,010
2,641
54,955
41,064
252,201

15,914
96,611
62,551
152,224
416,855
24,016
290,982
497
1,104,201

1,587
5,050
598
11,709
12,441
597
9,562
4,818
58,542

212,744
7,885
SIS
1,480
459
161
1,461
1
1,894

40,757
4,609
94
456
81
51
49

5,950
753
5
4
(55)
42
1

5,504
594
12
65

-

-

25

1
49

5,892,960
158,019
15,194
19,495
2,045
4,540
12,105
611
43,050

9,295,261
45,150
8,911
15,547
772
1,854
28,688
16,450
40,278

1,054,569
10,622
859
2,608
250
456
568
85
8,980

1,516,451
4,624
1,549
5,225
210
541
2,280
576
9,061

288,007
1,152
185
645
51
115
281
1
1,924

1,571,380
1,479
985
2,464
412
47
4,878
595
5,928

25,142
24
90
27
54
5
20

478

57,984,942
987,145
89,428
194,678
26,205
16,815
555,899
120,791
501,444

90
48
226,536

2
4
46,560

3
(55)
4,761

6,253

11,654
10,052
60,099,015

508
412
6,146,917

809
786
9,452,267

80
155
1,079,055

186
256
1,558,718

42
8
272,571

529
195
1,586,688

7
5
25,500

117,962
3,943
8,182
1,570
7,450
759
2,519
7,169
94
11,065
8,225
1
673
158
24,742
194,315
32,223
32,175
823
6,784
150
6,934
25,289

28,825
2,559
2,352
456
1,748
284
1,074
1,590
1
3,174
456

2,709
447
129
8
55
9
58
85
1
254
185

4,627
592
99
21
196
4
47
350
(35)
425
244

41,861,791
549,187
895,498
248,144
799,544
109,048
291,357
1,622,559
18,274
1,551,262
157,013
5,566
77,817
24,086
6,484,151
54,494,877
5,604,156
5,594,104
41,579
1,207,879
21,118
1,228,997
4,575,139

4,684,814
97,567
167,540
56,805
55,527
50,157
61,939
192,577
175
159,914
52,458
404
51,973
21,035
845,202
6,458,066
56/291,150
56/291,561

866,490
4,765
19,198
6,062
8,986
2,725
7,967
25,250
25
22,718
26
5
5,292
5,467
144,282
1,115,222
56/54.188
S6/ 54.544

815,666
679
25,181
4,522
10,475
4,525
8,948
252,258
745
29,821

1,001,852
680
5,767
1,587
2,134
524
5,565
99,618
181
7,455

17,988
(55)
865
189
101
109
202
1,271
(55)
508

i.

u
3,545
1,771
4,275
50,621
56/5.121
5§/5,126

56/54,188

2
1,586
805
251,975
1,586,966
151,752
151,516
485
55,098
142
55,240
118,513

142,790
552
5,748
1,526
1,957
1,705
5,087
62,422
9
8,623
1
8
901
1,602
58,767
289,498
56/17.127
5§^17,155

56/291,150

7,470,950
6,764
78,605
27,758
76,122
12,072
28,556
150,271
2,004
122,458
197
89
12,099
5,509
1,018,070
9,009,284
442,985
442,197
3,655
95,425
591
94,016
548,966

2,368,182
46,770

21,728
628

242,555
5,147

2,025
51

66,554
814

20,269
870

-

508
496
7,776
51,057
56/4.497
36/4.501

-

-

8
-

2
-

-

2
19
524
6,947
56/714
56/714

36/4,497

17
514
4,231
550
550
14
112
4
115
415

56/714

214

148

7

-

-

-

•

5§/l7,l27

785
495
115,685
1,242,125
144,564
144,571
156
55,478
29
35,506
111,057

559
5

88,776
100

-

-

-

149

_
_
_
56/5,121
864

Corporation returns with balance sheets, 1940, by major industrial groups for returns with net income and with no net income 1f\ Hunber of returns, assets and liabilities
as of December 31, 1940 or close of fiscal year nearest thereto, compiled receipts, compiled deductions, compiled net profit or net loss,
net income or deficit, income tax, declared value excess-profits tax, total tax, and dividends paid - Continued
________________ (Money figures in thousands of dollars1_____________ _______ _
_________________________________________________ Major industrial groups
- Continued
Manufacturing v Continued
Apparel and products
Lubber and timber
Furniture and finished
Textile-mil L products
made from fabrics
Leather and products
Rubber products
basic products
limber products
Net Income

9
10

11
12
13
14
IS
16
17
18
19
20

21
22
23
24
25
26
27
28
29
SO
31
32
S3

34
SS
56
57
38
59
40
41
42
43
44
45
46
47
48
49
50
51
52
S3
54
55
56
57
58

Number of returns with balance sheets §/
Assetst
Cash 6/
Notes and accounts receivable (loss reserve)
Inventories
Investments, Government obligations 2/
Other investments
Gross capital assets £/ except land
Less reserves
Land
Other assets
Total assets 9/
Liabilities!
Accounts payable
Bonds, notes, mortgages payable!
Maturity less than 1 year
Maturity 1 year or more
Other liabilities
Capital stock, preferred
Capital stock, common
Surplus reserves 10/
Surplus and undivided profits U /
Less deficit 12/
Total liabilities 9/
Receipts!
Gross sales 15/
Gross receipts from operations 14/
Interest, not on Government obligations
Rents and royalties 15/
Net cspital gain 16/
Met gain, sales other than capital assets 17/
Dividends, domestic oorporations 18/
Dividends, foreign corporations 19/
Other receipts, not Interest on Government obligations
Interest on Government obligations!
Subject to excess-profits tax 20/
Nholly tax-exempt 21/
Total compiled receipts 22/
toductionsi
Cost of goods sold 28/
Cost of operations 24/
Compensation of officers
Rent paid on business property
Repairs 25/
Bad debts
Interest paid
Taxes paid 26/
Contributions or gifts 27/
Depreciation
Depletion
Amortisation 28/
Net long-term capital loss 16/
Net loss, sales other than capital assets 17/
Other deductions
Total compiled deductions
lomplled net profit or net loss (35 less 49)
let income or deficit \J (50 less 32)
let operating loss deduction 29/
Income tax 50/
)eclared value excess-profits tax 31/
Total tax
Jompiled net profit less total tax (50 less 55)
dividends paid:
Cash and as set.a other than own stock
Corporation*s own stock
footnotes, see p a g e l g

2,630
219,903
400,909
80.8,994
36,257
170,266
2,130,466
1,094,426
63,631
44,655
2,790,655

No net
Net Income
income
1,961
4,112

No net
Net income
income
5,820
1,125

No net
Net income
incoas
922
524

No net
Net income
incoa*
1,555
220

No net
Net income
income
2,541
881

23,548
74,402
147,624
5,542
58,992
559,563
292,278
18,262
14,661
568,116

81,522
255,804
259,601
11,426
51,676
187,935
85,963
11,425
17,508
768,734

13,587
55,809
58,111
768
9,885
60,768
26,437
2,656
6,054
181,185

69,498
142,746
219,896
4,989
34,845
208,018
107,457
12,215
12,885
597,653

7,155
29,054
55,505
707
28,541
55,757
28,451
5,195
4,565
155,405

61,005
189,952
245,479
5,781
217,704
602,897
298,699
15,560
10,608
1,046,086

1,962
6,871
8,952
754
2,628
29,509
15,801
845
2,106
59,605

63,860
125,884
177,651
9,080
150,947
776,589
510,220
51,079
22,596
1,047,126

8,547
32,079
40,123
928
27,157
256,055
86,629
20,813
6,969
286,042

60,875
179,046
251,199
11,665
72,245
462,585
225,467
83,912
81,641
847,497

No net
Income
1,906
8,432
59,745
50,687
1,255
15,895
131,067
67,559
12,626
7,259
199,585

169,340

68,007

131,429

48,581

51,909

22,097

122,725

6,827

59,826

27,854

71,665

58,520

182,191
150,509
99,577
314,700
906,998
83,468
926,481
42,410
2,790,653

62,768
68,850
19,771
83,558
238,230
15,478
185,225
121,771
568,116

65,923
28,594
56,156
75,159
240,315
15,469
187,539
11,829
768,734

22,798
18,539
8,761
17,680
77,056
953
22,606
35,791
181,183

57,969
19,176
19,984
52,667
211,289
13,503
198,892
7,535
597,653

51,885
37,221
5,020
57,240
49,586
10,510
20,270
60,021
153,405

18,601
187,>16
33,056
280,246
215,122
48,666
199,078
6,828
1,046,086

8,936
4,018
1,677
7,309
14,430
169
5,250
4,014
59,603

«1,044
75,264
48,181
57,171
410,900
21,886
581,178
56,347
1,047,126

21,346
55,331
16,020
25,985
131,426
14,893
76,298
82,607
286,042

88,959
55,308
38,669
60,845
318,857
23,770
860,109
15,181
847,497

16,881
84,498
10,149
16,578
95,500
5,480
41,869
45,689
199,585

3,570,674
54,353
2,945
10,065
462
742
4,710
858
19,753

710,512
12,119
829
2,158
140
571
375
218
4,555

1,915,012
12,645
822
3,864
89
100
1,294
56
7,560

513,221
18,447
158
421
29
88
48
1
1,660

1,022,628
2,666
775
1,248
151
565
1,585
11
4,560

243,565
1,100
538
265
21
58
124
8
1,590

1,054,254
2,191
1,495
2,255
43
76
5,880
7,572
2,172

50,915
128
64
26
4
57
SO
•
137

876,810
16,267
1,487
4,601
2,422
1,077
2,625
15
10,000

148,966
2,868
267
1,524
236
472
111
(56)
2,480

1,138,896
7,315
1,268
1,685
259
449
1,588
615
7,188

211,8«.
728
841
eoe
147
101
19b
1
1,759

512
446
3,465,520

42
26
731,545

171
124
1,939,537

7
7
554,066

88
57
1,055,909

1
12
246,693

68
15
1,076,016

4
26
51,423

178
75
915,658

17
2
156,706

342
195
1,155,190

Ü8
14
215,653

2,689,561
34,252
58,785
9,198
37,594
3,151
14,862
66,137
926
70,162
52
5,318
1,892
246,412
3,236,297
229,225
228,777
2,571
48,953
977
49,910
179,513

624,657
9,017
13,920
5,744
6,205
2,301
6,866
14,121
11
17,708
10
1,026
2,401
63,160
765,128
56/55.584
36/55.610

427,076
13,659
21,157
7,910
846
2,189
2,477
6,765
S3
2,870
1
(35)
111
402
62,590
547,865
36/18,797
56/15,804

»
56/15,581

828,568
2,547
84,811
7,215
10,984
3,480
4,561
22,029
296
17,826
1,069
8
1,158
556
145,494
1,080,598
72,792
72,597
1,075
15,171
569
15,540
57,252

168,485
260
9,027
2,555
1,150
1,251
1,896
4,627
10
4,050
425
(55)
949
540
51,249
226,215
56/10.553
56/10.568

•
_
P'50

631,693
10,761
19,269
2,169
6,236
5,658
5,915
20,108
197
21,967
22,230
58
1,042
22S
94,998
840,511
75,147
75,071
3,051
15,661
558
16,220
58,927

116,572
1,545
5,458
956
2,165
1,522
5,812
4,544
2
5,516
5,955
2
6,754
1,156
80,992
172,287
56/15.581
56/15.585

_
56/9,901

742,603
25
7,929
4,671
16,506
5,809
7,079
47,455
166
25,559
6
5
191
518
146,557
1,004,675
71,541
71,525
199
14,511
280
14,792
56,549

40,586
68
1,292
312
679
263
372
1,817
(55)
1,298
2
81
4
6,542
55,512
56/1,890
56/1.918
-

•
5§/l5,797

857,861
1,464
21,128
5,079
6,817
2,029
2,652
15,525
286
8,950
49
1
168
254
85,908
986,115
47,797
47,760
620
9,041
205
9,244
58,555

214,479
470
6,279
2,395
1,088
726
1,669
5,605
2
2,650
8
1
558
450
22,459
256,594
56/9.901
56/9.913
•
-

36/35,584

1,539,052
9,237
64,221
16,757
5,124
4,524
5,296
25,081
532
7,998
1
10
517
542
206,004
1,880,496
59,040
58,917
1,052
11,497
259
11,736
47,504

. 77,224
3*564

1,367
IS

19,711
4,785

580
57

22,546
1,104

184
45

26,399
249

-

56,204
189

1,514
"

27,526
527

626
549

-

-

-

-

-

-

-

•
.
56/10,555

Table 1, - Corporation returns with balance sheets, 1940, by major Industrial groups for returns with net Income and with no net income j/i Number of returns, assets and liabilities
as of Deoember 31, 1940 or dose of fiscal year nearest thereto, compiled receipts, compiled deductions, compiled net profit or net loss,
net income or deficit, income tax, declared Talus excess-profits tax, total tax, and dividends paid - Continued
(Honey figures in thousands of dollars)
Major industrial groups 2/ - Continued
Manufacturing - Continued
Paper and allied
products
Net income

1
z

3
4

S
6

7
8
9
10

11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
50
31
32
33
54
35
56
37
38
39
40
41
42
43
44
45
46
47
48
49
50
51
52
53
54
55
56
57
58

Number of returns with balance sheets 5/
Assetst
Cash 6/
Notes and accounts receivable (less reserve)
Inventories
Investments, Government obligations Tj
Other investments
Gross capital assets 8/ except land
less reserves
Land
Other assets
Total assets 9/
Liabilitiest
Accounts payable
Bonds, notes, mortgages payables
Maturity less than 1 year
Maturity 1 year or more
Other liabilities
Capital stock, preferred
Capital stock, common
Surplus reserves 10/
Surplus and undivided profits 11/
Less deficit 12/
Total liabilities 9/
Receipts:
Gross sales 15/
Gross receipts from operations 14/
Interest, not on Government obligations
Rents and royalties 15/
Net capital gain 16/
Net gain, sales other than capital assets 17/
Dividends, domestic corporations 18/
Dividends, foreign corporations 19/
Other receipts, not interest on Government obligations
Interest on Government obligations:
Subject to excess-profits tax 20/
Wholly tax-exempt 21/
Total compiled receipts 22/
Deductions:
Cost of goods sold. 23/
Cost of operations 24/
Compensation of officers
Rent paid on business property
Repairs 25/
Bad debts
Interest paid
Taxes paid 26/
Contributions or gifts 27/
Depreciation
Depletion
Amortization 28/
Net long-term capital loss 16/
Net loss, sales other than capital assets 17/
Other deductions
Total compiled deductions
Compiled net profit or net loss (53 less 49)
Net income or deficit l/ (60 less 32 )
Net operating loss deduction 29/
Income tax 30/
Declared value excess-profits tax 51/
Total tax
Compiled net profit less!total tax (50 less 55)
Dividends paid:
Cash and assets other than own stock
Corporation* s own stock
F o r footnotaa. h p q

ig

Printing and publishing
Industries

No net
income

Het income

No net
income

Chemicals and allied
products
Net income

No net
income

Petroleum and coal
products
Net income

Stone, clay, and glass
products

No net
Net income
income

Iren, steel, and
products

No net Net income
income
1,407
4,471

No net
income

1,447

677

5,391

5,007

5,579

2,955

524

292

1,895

1,902

1

144,386
203,584
294,921
34,828
216,669
),642,700
745,803
56,415
37,277
1,886,775

14,958
25,575
36,445
606
251,205
229,424
112,198
8,774
10,749
465,537

160,727
320,211
158,961
85,858
377,649
1,205,370
457,358
86,752
67,763
2,005,894

18,230
82,604
31,906
4,923
46,042
329,025
128,706
16,797
24,663
425,485

568,269
633,888
816,451
120,381
883,435
3,093,997
1,511,963
122,841
72,432
4,999,730

10,498
56,668
39,815
2,243
35,124
157,249
60,120
11,550
13,112
244,159

459,956
645,699
816,807
55,233
1,544,057
6,743,896
3,505,915
278,018
80,271
7,116,004

47,407
55,642
102,107
596
78,680
1,202,927
569,142
29,827
20,069
966,114

202,747
202,587
275,968
58,774
219,600
1,461,228
695,946
62,250
29,509
1,816,717

8,130
22,424
29,599
710
10,504
241,242
106,874
17,789
7,370
230,695

622,596
895,924
1,600,873
67,458
649,341
5,795,705
2,780,301
258,134
96,027
7,183,558

19,610
55,204
115,696
2,519
27,629
426,884
238,545
51,705
8,304
447,004

2
3
4
5
6
7
8
9
10
11

84,668

21,162

168,509

58,278

403,307

31,972

449,365

52,493
218,077
78,411
276,716
612,487
42,411
551,109
9,595
1^886,775

17,924
104,546
68,161
123,815
78,484
14,264
103,675
66,495
465,557

51,889
159,918
119,858
211,560
580,860
38,511
709,684
54,835
2,005,894

47,576
79,664
38,553
45,599
156,545
10,550
106,524
117,784
425,483

1,768,978
3,040
2,074
4,711
1,340
713
5,651
1,377
10,853

215,977
1,088
6,654
1,138
128
35
503
(55)
1,096

1,795,427
77,229
3,564
10,556
926
558
14,784
1,403
16,037

594
234
1,799,546

22
15
224,635

1,233,203
1,016
36,358
7,541
39,510
5,400
13,145
38,354
732
59,471
2,538
69
1,960
1,153
171,891
1,610,536
189,210
188,976
1,296
42,510
294
42,604
146,606

174,779
137
5,122
2,185
3,858
2,505
7,904
4,894
13
6,820
377
SO
1,571
1,101
21,202
232,500
56/7.86S
36/7,879

64,688
1,681

—
me
.
-

56/7,865
147

75,502

110,875

18,819

904,151

70,015

12

106,282
286,769
226,272
524,829
1,525,489
296,495
1,660,099
29,813
4,999,730

21,569
115,369
878,419
35,102
10,952
153,527
26,437
218,190
130,171 3,173,897
258,266
5,625
44,556 1,940,328
71,357
60,205
244,139 7,116,004

71,245
159,478
45,068
55,884
300,782
62,775
287,219
89,841
966,114

23,106
104,996
85,557
155,665
708,351
62,647
596,894
29,574
1,816,717

15,506
48,288
15,422
28,694
103,698
5,980
56,594
60,108
230,695

164,994
1,115,298
377,965
580,166
2,151,789
188,498
1,768,402
45,633
7,183,558

37,803
50,417
15,995
68,906
202,511
7,147
81,556
87,344
447,004

13
14
15
16
17
IS
19
20
21

415,542
55,679
490
1,988
115
121
265
15
3,990

4,446,736
28,977
7,895
14,226
2,046
591
69,020
16,165
18,088

208,701 4,475,572
2,951
177,290
541
11,939
745
59,748
147
2,515
71
1,685
512
89,792
54
5,585
1,832
21,011

556,374
58,915
992
5,122
27
290
8,351
16
5,691

1,525,625
4,194
2,211
5,592
756
1,097
9,450
11,756
9,555

127,601
2,871
118
646
99
108
80
(35)
1,2«

6,996,935
17,485
10,709
12,706
1,620
1,541
17,237
5,206
24,614

441,975
1,566
409
1,119
115
108
170
206
1,545

22
25
24
25
26
27
28
29
30

1,044
1,000
1,920,528

84
33
456,524

1,505
1,642
4,606,888

43
519
31
583
215,427 4,826,037

6
7
655,792

620
540
1,570,757

10
14
152,795

1,127
641
7,089,821

59
14
447,285

51
32
33

1,160,539
38,758
80,771
21,395
8,095
7,984
10,605
41,688
1,245
56,340
6
2
2,495
1,295
333,604
1,744,820
175,709
174,709
1,843
36,157
219
56,376
139,332

285,785
15,782
25,005
9,206
1,479
3,189
4,102
9,751
29
8,971
3
6
3,183
856
114,480
481,829
56/25,505
56/25,538

151,855 5,136,150
1,404
101,225
10,015
11,978
2,287
48,815
1,430
72,770
5,144
9,812
2,287
30,116
178,572
4,103
8
839
5,502
229,251
66
115,587
37
1
771
11,965
558
1,443
47,459
618,831
230,525 4,567,151
36/15,098
258,905
56/15,129
258,523
—
805
45,241
109
•m
43,350
36/15,098
215,556

445,286
40,396
2,158
6,955
5,804
1,724
6,842
20,565
(55)
31,972
27,527
5
4,811
740
60,985
652,848
36/19,056
36/19,064

36/11,553

5,174,117
4,940
105,701
27,542
185,649
9,112
89,233
150,018
1,768
210,983
4,101
432
9,384
2,462
501,044
6,476,485
613,336
612,695
9,297
136,354
4,791
141,145
472,191

354,890
993
9,558
2,528
12,288
1,148
3,779
10,418
7
16,005
7
5
860
1,520
52,002
466,009
36/18.724
36/18,739

36/19,056

980,(311
1,820
52,599
4,775
56,113
5,829
6,865
55,090
625
54,711
"1,492
148
2,889
1,049
194,823
1,357,436
213,521
212,980
1,059
47,201
930
48,151
165,190

95,054
2,337
5,755
1,155
2,418
695
2,625
5,768
5
7,085
194
1
1,390
1,090
20,822
144,548
56/11,555
36/11.567

36/25,505

2,772,586
4,055
70,184
12,817
57,759
8,832
17,750
100,199
1,472
125,421
5,229
535
5,263
2,200
741,134
3,925,384
681,504
679,862
2,049
144,517
751
145,249
556,255

36/18,724

54
35
56
37
38
39
40
41
42
43
44
45
46
47
48
49
50
51
52
53
54
55
56

88,057
2,106

875
1

334,655
6,130

10,603
-

100,519
1,480

277
-

190,959
5,119

457
-

57
58

—
-

595

175,195
793

m.
•»

—
am
mm

—
me

Table 1. - Corporation returns with balance sheets, 1940, by major industrial groups for returns with net income and with no net income X/t Humber of returns, assets and liabilities
as of December 31, 1940 or close of fiscal year nearest thereto, compiled receipts, compiled deductions, compiled net profit or net loss,
net income or deficit, income tax, declared value excess-profits tax, total tax, and dividends paid - Continued
(Money figures in thousands of dollars)

Electrical machinery
and equipment

Nonferrous metals and
their products
Net income
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
51
32
33
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

Number of returns with balance sheets 5/
Assets:
Cash 6/
Notes and accounts receivable (less reserve)
Inventories
Investments, Government obligations 7/
Other investments
Gross capital assets 8/ except land
Less reserves
Land
Other assets
Total assets ft/
Liabilities:
Accounts payable
Bonds, notes, mortgages payable:
Maturity less than 1 year
Maturity 1 year or more
Other liabilities
Capital stock, preferred
Capital stock, common
Surplus reserves 10/
Surplus and undivided profits 11/
Less deficit 12/
Total liabilities 9/
Receipts:
Gross sales 13/
Gross receipts from operations 14/
Interest, not on Government obligations
Rents and royalties 15/
Net capital gain 16/~^
Net gain, sales other than capital assets 17/
Dividends, domestic corporations 18/
Dividends, foreign corporations l57

Other receipts, not interest on Government obligations
Interest on Government obligations:
Subject to excess-profits tax 20/
Wholly tax-exempt 21/
Total compiled receipts 22/
Deductions:
Cost of goods sold 25/
Cost of operations
Compensation of officers
Rent paid on business property
Repairs 25/
Bad debts
Interest paid
Taxes paid 26/
Contributions or gifts 27/
Depreciation
Depletion
Amortization 28/
Net long-term capital loss 16/
Net loss, sales other than capital assets 17/
Other deductions
Total compiled deductions
Compiled net profit or net loss (S3 less 49)
let income or deficit 1/ (50 less 32)
let operating loss deduction 29/
Income tax 30/
Declared value excess-profits tax 31/
Total tax
Compiled net profit less total tax (SO less 55)
Dividends paid 2
C a s h a n d assets other t h a n o w n stock
Corporation* a own atowir

1,562

No net
Net income
income
840
1,024

110,275
282,702
375,048
28,229
346,648
888,808
418,515
46,412
31,052
1,690,661

3,092
9,409
22,635
222
1,996
51,981
51,029
2,257
2,512
63,076

177,766
517,979
475,671
75,590
353,514
845,760
441,849
41,932
26,230
1,872,392

166,956

10,056

52,040
99,796
98,287
272,416
384,239
104,843
529,382
17,299
1,690,661

6,210
23,043
2,507
4,175
25,359
1,222
6,648
15,943
63,076

1,826,979
60,380
3,509
2,407
134
102
12,863
4,765
12,055

No net
income
657

Major industrial groups 2/ - Continued
Manufacturing - Continued
Machinery, except
Automobiles and
Transportation
Other manufacturing
transportation equip­
equipment, except
equipment, except
ment and electrical
electrical
automobiles
Net income
No net
Net income
No net
Net income
No net
Net income
No net
income
income
Income
income
3,768
1,825
491
276
412
314
1,983
1,844

5,477
15,252
24,360
254
3,246
73,305
40,438
2,538
5,395
87,389

553,949
893,105
1,148,588
120,857
541,450
2,302,748
1,126,487
119,104
67,128
4,600,240

165,896

15,905

38,808
46,714
167,696
75,500
694,471
116,715
574,965
8,574
1,872,392

12,397
6,991
4,851
8,679
53,722
4,174
20,599
19,930
87,589

80,576
662
44
177
8
10
24
(35)
239

2,510,718
5,078
5,795
6,066
255
354
13,480
5,541
14,423

305
169
1,923,668

3
2
81,745

1,396,167
30,537
32,494
6,012
24,287
2,440
6,646
36,583
446
31,842
2,992
176
2,560
887
130,538
1,704,605
219,063
2Í8,894
740
48,720
628
49,349
169,714

66,973
348
5,815
882
470
217
413
1,559
2
1,707
3
12
201
168
7,982
84,752
36/3.007
36/3,009
—
m

68,560

1

9,470
39,925
61,976
2,490
15,874
166,588
76,390
10,22S
9,870
240,029

722,505
477,107
600,287
198,934
462,661
1,934,938
912,976
57,246
48,715
5,589,416

6,289
8,176
15,164
37
3,299
105,567
52,163
6,907
15,658
106,735

456,980
300,849
492,789
14,693
184,824
920,817
351,573
53,785
53,669
2,126,834

13,982
6,936
28,261
63
3,272
58,587
10,392
3,539
3,343
87,591

99,944
173,355
231,501
24,891
128,214
396,509
191,152
18,299
18,685
900,246

2'
6,239
3
25,102
4
30,753
5
421
6
16,422
7
79,795
33,879 8
9
5,695
4,836 10
135,381 11

536,557

31,765

428,518

10,109

178,243

11,677

67,618

18,644 12

86,947
203,813
360,957
444,996
1,513,686
303,808
1,410,472
60,994
4,600,240

18,031
31,192
15,775
22,804
131,332
5,008
49,112
62,990
240,029

28,151
50,330
210,878
242,736
713,779
350,823
1,569,773
5,571
5,589,416

3,229
11,718
6,828
8,250
47,543
5,564
43,544
27,848
106,735

47,616
82,150
751,535
131,600
345,210
91,051
551,809
12,181
2,126,834

4,499
16,388
33,968
6,374
20,338
1,498
11,526
18,676
87,591

26,585
32,853
71,259
65,927
312,389
62,348
275,868
10,601
900,246

11,899
19,044
6,648
15,854
65,589
5,309
26,629
36,234
135,381

15
14
15
16
17
18
19
20
21

103,369
563
62
350
11
18
31
1
788

4,277,468
67,835
13,042
32,687
3,063
2,651
10,612
10,146
25,364

174,765
1,710
660
877
120
368
133
(35)
1,487

4,533,859
1,689
5,497
10,259
7,683
457
46,166
31,075
20,956

114,610
23
76
371
15
1,510
4

40,559
4,108
52
102
260
127
4

415

1,120,764
388,837
2,149
7,478
690
1,751
6,979
270
15,610

596

999,487
6,879
2,143
2,783
203
118
5,870
2,402
5,764

131,446
1,860
234
587
57
52
207
(35)
888

22
23
24
25
26
27
28
29
SO

570
943
2,359,221

(35)
1
105,195

1,852
1,571
4,446,291

31
SO
180,180

364
450
4,658,458

1
(35)
116,822

178
180
1,544,885

i
2
45,612

130
122
1,025,900

82,621
335
5,087
949
902
683
674
2,500
1
2,222
2
96
218
147
17,391
111,829
36/6,634
36/6.635

3,505,496
406
21,184
5,160
65,216
3,617
5,496
141,896
2,036
87,790
659
394
1,512
647
240,215
4,081,725
576,733
576,283
1,104
127,594
741
128,356
448,597

101,926
,7
1,599
320
743
215
595
2,900
1
3,505

630,932
3,507
55,359
7,167
7,656
5,175
3,152
22,171
413
18,155
5
85
1,130
258
170,470
903,615
122,286
122,164
919
26,685
740
27,425
94,861

95,698
1,039
7,954
2,323
555
1,187
1,374
2,941
5
2,627
25
2
584
725
27,733
144,572
56/9,120
35/9.123

36/8,937

783,707
289,210
14,761
5,649
30,108
1,398
4,889
56,644
270
54,064
29
1,818
2,990
775
81,985
1,288,315
256,570
256,390
4,114
57,597
1,854
59,251
197,320

55,827
3,266
1,336
385
668
100
399
1,585
1
1,250

36/6,634

2,722,565
4,104
99,032
15,161
71,605
11,116
13,949
101,764
2,122
96,984
243
1,394
6,875
2,451
648,562
5,795,925
650,366
648,795
4,295
143,332
5,209
148,540
501,825

132,705
1,059
8,194
1,441
1,584
2,212
1,993
4,239
7
5,305
5
148
467
590
32,846
192,594
36/12,415
3^12,443

36/3,007

1,554,780
2,298
28,864
7,909
27,773
3,709
4,299
56,906
885
47,967
70
276
5,630
629
293,007
2,035,001
324,220
325,277
927
73,572
1,222
74,794
249,426

36/9,120

54
35
36
57
38
39
40
41
42
43
44
45
46
47
48
49
50
51
52
53
54
55
56

49

146,941

78

216,300

57
(35)

71,181
208

45,268
2.013

391
12

57
58

-

-

-

—
•

36/12,415

249*282
277

-

13
122
1,258
12,555
125,759
36/8,937
35/8,937
—
-

mm
-

-

34
68
354
5,571
50,842
56/5,230
36/5,252
-

36/5,230
51

18 31
3 32
135,452 S3

_

Table 1. - Corporation returns with balance sheets, 1940, by major industrial groups for returns with net income and with no net income l/t ''Number of returns, assets and liabilities
as of December 51, 1940 or close of fiscal year nearest thereto, coapiled receipts, compiled deductions, compiled nei profit or net loss,
net incoae or deficit, income tax, declared value excess-profits tax, total tax, and dividends paid - Continued
(Money figures in thousands of dollars)

1
2
S
4
5
6
7
8

g
io
n
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
80
31
32
33
34
35
36
37
58
39
40
41
42
43
44
45
46
47
48
49
50
51
52
53
54
55
56
57

58

Nuaber of returns with balance sheets 5/
Assets s
Cash 6/
Notes and accounts receivable (less reserve)
Inventories
Investments, Government obligations 7/
Other investments
Gross capital assets 8/ except land
Less reserves
Land
Other assets
Total assets 9/
Liabilities >
Accounts payable
Bonds, notes, mortgages payablet
Maturity less than 1 year
Maturity 1 year or more
Other liabilities
Capital stock, preferred
Capital stock, common
Surplus reserves 10/
Surplus and undivided profits 11/
Less deficit 12/
Total liabilities 9/
Receiptst
Gross sales 15/
Gross receipts from operations 14/
Interest, not on Government obligations
Rents and royalties 15/.
Net capital gain 16/~~^
Net gain, sales other than capital assets 17/
Dividends, domestic corporations 18/
Dividends, foreign corporations .15/
Other receipts, not interest on Government obligations
Interest on Government obligations >
Subject to excess-profits tax 20/
Wholly tax-exempt 21/
Total compiled receipts 22/
Deductions!
Cost of goods sold 25/
Cost of operations 15/
Compensation of officers
Rent paid on business property
Repairs 25/
Bad debts
Interest paid
Taxes paid 26/
Contributions or gifts 27/
Depreciation
Depletion
Amortization 28/
Net long-term capital loss 16/
Net loss, sales other than capital assets 17/
Other deductions
Total compiled deductions
Coapiled net profit or net loss (S3 less 49)
Net Income or deficit 1/ (50 less 32)
Net operating loss deduction 29/
Income tax 50/
Declared value excess-profits tax 31/
Total tax
Coapiled net profit less total tax (50 less 55)
Dividends paid!
Cash and assets other than own stock
Corporation's own stock

Major industrial groups 2/ - Continued
Manufacturing - Cont'd.
Public utilities
Trade
Manufacturing
Total public
Transportation
Other public
Communication
Total trade
not allocable
utilities
utilities
Net income
Net income
No net
No net
Net income
Met income
No net
Met income
Ho net
Net Incoa»
No net
No net
income
income
lacerne
Income
income
income
853
945
10,577
8,103
6,876
5,976
1,486
1,041
1,086
68,425
2,215
57,049
22,023
47,362
68,851
6,799
42,104
157,269
72,518
10,560
7,990
290,440
26,921

2,006 1,425,273
427,761
588,115
781,989
8,821 1,170,620
269,585
520,831
218,504
10,978
556,063
168,328
188,993
262,897
210
117,514
18,372
47,667
16,859
3,291 3,814,018 1,293,276
1,981,500 1,243,870
44,811 58,901,115 15,997,631 16,242,958 14,492,035
17,358 7,792,422 1,868,226 3,557,805 1,633,683
2,104
375,987
563,514
157,457
357,672
5,058 1,057,809
433,114
567,606
380,044
57,921 39,625,976 17,123,818 16,817,517 15,599,083
11,053

855,568

759,934

475,434

90,940
162,882
66,029
1,725
281,308
6,558,247
1,629,255
13,837
52,819
4,498,550

5,626
550,545
7,285
486,907
4,786
227,157
68
68,124
5,143 1,551,211
213,863 17,299,929
59,598 2,705,582
1,266
204,693
624,946
5,052
183,492 18,507,909

694,691

95,582

16,105
28,291
Ì5,156
27,744
91,141
7,813
83,186
5,915
290,440

6,540
269,194
198,579
255,669
88,544
7,636 14,271,055 9,059,671
5,632,190 8,247,932
3,691 1,554,068
2,128,186
718,824
2,064,957
7,578 5,028,500
962,748
895,930
.827,595
34,497 13,142,789 4,527,154 i4,719,676 4,056,048
975
643,076
137,921
580,505
109,790
6,476 6,102,295
1,467,107 4,069,511 1,564,448
20,505
220,568 2,174,545
141,694
1,964,956
57,921 39,623,976 17,123,818 16,817,517 15,599,083

6,500
1,099,348
182,185
160,985
2,608,651
24,524
550,224
29,428
4,498,550

557,745
1,567
666
906
155
166
697
380
3,032

57,129
856
40
192
27
22
41
4
343

87,381
9,865,499
58,304
172,746
4,376
25,128
113,710
1,351
47,537

62,581
2,981,746
19,284
75,910
696
1,805
16,267
59
35,189

49,587
4,825,050
26,212
124,909
1,886
23,752
55,536
649
51,428

59,352
2,739,335
18,481
73,006
540
1,669
16,139
6
30,006

2,584
1,460,829
2,898
22,183
501
52
14,580
30
2,958

107
55,006
57
359
1
1
27

146
49
365,509

3
3,856
(35)
1,845
58,657 10,381,734

274
517
5,192,530

2,730
850
5,142,569

249
499
2,9*9,265

35,604
42,106
3,109,948 1,960,803
64,283
23,140
243,496
177,622
19,660
9,235
2,939
5,755
240,496
596,730
S11,l804
207,961
557
25
176,166
90,795
2,290
410
80
8
12,589
26,636
1,458
16j066
349,693
224,545
4,569,064 3,179,858
575,505 56/240,575
572,454 H/241,075
10,055
121,756
«
827
122,584
450,721 36/240,575

253,155
904
12,771
1,656
3,008
1,078
2,020
6,199
91
6,107
512
21
302
282
49,148
357,233
28,276
28,226
534
5,983
261
6,244
22,032

44,514
566
5,039
822
371
551
609
1,156
3
1,419
21
5
1,410
576
10,062
64,922
56/6,266
35/6,266

9,944
357

37

-

me
36/6,266

63,277
44,775
5,209,744
2,077,746
95,556
25,914
312,805
182,683
25,438
10,805
16,801
4,029
627,647
435,911
824,555
227,705
3,620
47
769,578
125,128
11,863
1,015
87
13
18,921
27,712
4,356
17,270
817,442
275,127
8,799,690
3,454,684
1,582,044 56/262,553
1,580,199 H/282,870
52,820
344,855
1,150
346,005
1,236,039 36/262,553
1,045,933
8,738

21,479
99

512,768
1,187

11,414
85

8,555

264,552

5,531
164,150
145,158
7,539,517
5,076
652,059
9,589 1,971,587
51,061
5,814,482
8,438
238,249
20,502, 1,712,758
69,799
49,446
183,492 18,307,909

1,493,648
34,022
43,996 4,837,285
15,878 4,689,688
1,465
187,080
44,262
1,757,600
1,291,734 4,295,138
174,945 1,844,192
24,576
744,257
60,455
582,529
1,341,244 16,543,032
56,688

3,197,677

1

190,292
2
789,089
5
832,070 4
13,678
5
244,528 6
1,116,805 7
471,198
8
162,074
9
94,070 10
2,971,208 11
726,057 12

51,760 1,105,694
666,601 1,081,670
58,171
788,334
125,761 1,033,955
42Q,025 4,994,525
19,695
365,245
82,557 4,350,550
159,811
352,412
1,541,244 16,543,032

358,845
455,658
156,200
213,070
1,252,285
48,977
447,015
666,874
2,971,208

13
14
15
16
17
18
19
20
21

465

55,410
5,579,640
29,194
25,654
1,989
1,525
43,594
671
15,151

5,142 58,184,533
207,406
506,280
766
65,567
77,717
565
155
5,229
155
4,603
101
46,615
53
59,983
4,718
587,661

6,495,527
146,615
8,267
17,670
2,053
1,774
1,999
88
65,893

22
23
24
25
26
27
28
.29
30

47
229
1,506,892

1
5
35,990

1,079
766
5,732,475

25
2,573
13
1,621
217,078 39,321,982

232
221
6,758,139

SI
32
S3

1,481
670,454
8,157
31,649
1,026
5,019
44,664
135,733
879
180,550

26
17,936
780
1,291
842
288
3,689
2,130
3
5,589
(35)
1
48
101
7,816
40,538
36/4,348
18/4,554

36/4,548

28,193
1,429,362
21,116
37,660
4,752
8,845
342,486
377,018
2,184
412,861
9,572
4
4,978
1,837
329,123
3,009,990
722^483
721,717
21,172
158^075
'224
158,299
564,184

2,640 30,587,696
5,277,222
99,008
154,169
75,599
1,995
674,0*9
198,375
3,776
527,805
149,390
728
78,435
16,827
787
118,691
36,618
55,492
30j580
100,874
17,615
75,561
382,219
19
8^010
356
26,944
226,674
58,577
604
619
347
3
494
337
1,028
21,550
12,284
4^132
1,105
7^270
42,766 5,205,011
963,738
234,508 58,068,059
6,902,680
56/17,430 1,253,943 56/164’542
164,762
^17,442
1,252,322
16,195
259^412
i,819
264^251
36/17,430
989,712 36/164,542

34
35
56
37
38
39
40
41
42
43
44
45
46
47
48
49
50
51
52
53
54
55
56

794
15

532,242
6,960

_

5
1,554
1,062
158,625
1,220,635
286,257
286,028
1,593
65,024
99
65,122
221,134
200,922
590

•

9,272

497,757
18,735

6,721
314

57
58

Table 1. - Corporation returns with balance sheets, 1940, by major industrial groups for returns with net Income and with no net Income l/t Number of returns, assets and liabilities
as of December 31, 1940 or close of fiscal year nearest thereto, compiled receipts, compiled deductions, compiled net profit or net loss,
net income or deficit, income tax, declared value excess-profits tax, total tax, and dividends paid - Continued
(Money figures in thousands of dollars)
Major industrial groups 2/ - Continued
Trade - Continued
Wholesale
Commission merchants

Total wholesale
Net income
1

2i,5l4

2
3
4
5
6
7
8
9
10
11

698,338
2,269,022
1,997,735
66,533
938,014
1,013,262
426,555
151,927
154,624
6,842,901

Number of returns with balance sheets 5/
Assets:
Cash 6/
Notes and accounts receivable (less reserve)
Inventories
Investments, Government obligations 7/
Other investments
Gross capital assets 8/ except land
Less reserves
Land
Other assets
Total assets 9/
liabilities t
12
Accounts payable
Bonds, notes, mortgages payable:
13
Maturity less than 1 year
14
Maturity 1 year or more
15
Other liabilities
16
Capital stock, preferred
17
Capital stock, common
18
Surplus reserves 10/
19
Surplus and undivided profits 11/
20
Less deficit 1tj
21
Total liabilities 9/
Receipts:
22
Gross sales 15/
23
Gross receipts from operations 14/
24
Interest, not on Government obligations
25
Rents and royalties 15/
26
Net capital gain \6/
27
Net gain, sales other than capital assets 17/
28
Dividends, domestic corporations 18/
29
Dividends, foreign corporations 19/
30
Other receipts, not interest on Government obligations
Interest on Government obligations:
31
Subject to excess-profits tax 20/
32
Wholly tax-exempt 21/
33
Total compiled receipts 22/
Deductions:
34
Cost of goods sold 23/
35
Cost of operations 2 y
36
Compensation of officers
37
Rent paid on business property
38
Repairs 25/
39
Bad debts
40
Interest paid
41
Taxes paid 26/
42
Contributions or gifts 27/
43
Depreciation
44
Depletion
Amortization 28/
45
46
Net long-term capital loss 16/
47
Net loss, sales other than capital assets 17/
48
Other deductions
49
Total compiled deductions
50 Compiled net profit or net loss (33 less 49)
51 Net income or deficit 1/ (50 less 32)
52 Net operating loss deduction 29/
53 Income tax 30/
54 Declared value excess-profits tax 51/
55
Total tax
56 Compiled net profit less total tax (50 less 55)
Dividends paid:
57
Cash and assets other than own stock
58
Corporation*s own stock

No net
Net income
income
13,422
2,234

Other wholesalers

No net
Net income
income
1,856
19,280

2,291

3,430

7,983
43,2 U
55,418
lioOO
10,466
67^232
31,233
8,607
4,534
165,220

121,568
72,U 3
247j714
46'548
55j957
442,519
193,167
59,829
29,321
862'201

n,596
26Î430
27,600
1^445
9'581
151j587
57,692
9,904
5'460
184j912

1,429,342

276,548

1,373,485

352,780

665,919

26,834

146,799

38,508

588,027
387,170
253,817
597,801
1,852,316
132,165
1,576,240
130,229
6,286,649

no, 519
142,855
38,486
64,357
380,528
9,092
133,952
203,623
952,715

395,599
580,963
442,443
520,369
2,548,422
197,696
2,526,628
160,070
8,223,535

179,076
238,669
93,456
109,248
675,401
32,030
228,951
361,807
1,527,805

58,112
292,076
152,528
274,777
1,164,572
U l , 481
1,091,001
17^853
3,792,413

14,926
29,655
7,317
15,491
85,707
2,6U
28,122
45,424
165,220

17,891
46,779
34,556
42j897
228,513
20j675
339,781
15,690
862,201

U,282
35,307
7^906
n ^ 276
73,405
3,295
34,098
30,165
184^912

77,546 17,944,575
33,233
148,581
592
19,659
448
17,672
72
2,422
27
1,476
185
20,243
43
10,907
2,892
95,359

2,465,099 17,no,308
44,451
130,406
2,041
35,650
5,881
49,893
487
2,139
474
2,302
642
18,055
31
8,506
14,640
261,054

3,245,958
53,729
4,681
n,042
1,395
'998
835
8
40,782

5,312,325
25,581
19Ï130
23,854
589
150
8,654
8,480
72^040

263,619
3,415
1^071
1,294
957
186
113
1
4,547

3,460,226
7,526
'862
2,999
245
678
1,508
6
10,888

559,887
7,ZS7
'l*7
1,282
56
166
245
2
2,005

76
128
507,963

5
757
606
5
115,049 18,262,037

73
1,371
88
746
2,531,908 17,620,408

100
86
5,359,614

363
277
5,471,443

15
275,225

466
88
3,485,490

21
37
551,104

280,142
13,059
29,727
7,229
398
2,838
2,850
5,497
267
2,509
4

72,022 15,596,577
8,563
53,920
8,983
266,636
1,921
70,264
15,990
1,292
43,816
789
37,880
1,088
104,857
10
2,430
710
51,271
29
340
218
99
777
8,370
42
1,279
23,089 1,555,325
U9,648 17,809,054
36/4.598
452,983
36/4,603
452,377
6,386
92,093
2,142
94,234
36/4,598
358,749

2,176,974 12,490,159
27,722
57,224
53,190
303,861
17,535
420,370
3,049
55,251
13,343
59,726
9,007
50,552
16,676
237,694
76
4,736
150,103
12,902
39
158
41
194
5,624
10,585
1,955
2,234
243,488
3,147,313
2,581,621 16,990,163
36/49,713
630,246
36/49.801
629,500
7,573
•
152,879
.
1,403
•
134,282
56/49,713
495,964

2,457,016
28,984
U3,588
n9,007
n,481
17,n 7
16,928
48,730
208
37,363
236
72
4,549
3,937
590,956
3,450,173
36/90.560
35/90.646

190,476
994
6,837
9,564
9n
3,461
1,498
4,531
18
2,540
1
2
1,624
'n3
62,557
284,927
36/9,704
55/9.710

3£/9,704

2,750,295
4,363
22,951
49'097
10,993
2,773
4,481
35^057
744
31,510
1
6
2,320
'406
502,674
5,417^631
67^858
67,770
641
15,001
69
15,071
52^787

428,718
4,196
10^751
n i 605
si057
li0O5
2i246
7i614

56/90,560

3,537,424
6,670
45,988
145,052
20,876
18,707
19,274
100,917
2,148
55,598
61
2
5,202
818
1,197,072
5,155,8U
515,633
315,356
1,139
72j108
280
72,388
243,244

2,870
94

151,440
2^319

269
2

37,216
'897

1,600,557

305,482

171,215

¿8,954

618,508
418,667
269,449
443,854
1,988,610
141,182
1,513,792
151,718
6,842,901

118,665
157,530
43,819
73,388
415,050
12,681
146,444
224,504
1,048,556

30,482
31,497
15,632
46,055
136,294
9,017
137,552
21,489
556,252

8,146
14,676
5,333
9,031
54,522
3,589
12,492
20,880
95,845

18,248,983
333,051
24,720
18,812
2,568
1,605
26,705
10,981
101,009

2,542,645
77,684
2,633
4,330
559
501
827
74
17,532

304,607
184,470
5,082
1,139
146
150
6,462
74
5,650

832
734
18,770,000

79
93
2,646,957

15,876,719
66,960
296,364
77,493
16,387
46,655
40,750
110,354
2,697
53,779
344

2,248,995
36,285
62,175
19,456
3,165
14,634
9,796
17,764

167,690
9,809

6,402
1,996
266,577
2,701,268
36/54.312
36/54,404

n

36/54,312

1,480
252
123,566
469,810
38,153
38,025
488
6,859
183
7,042
31,112

2,364
177

16,437
275

»
-

Food stores, including
market milk dealers
Net Income - No net

292,347
1,002,582
924,886
28,977
543,592
1,349,814
528,014
284,614
95,617
3,792,413

597,656
2,052,760
1,976,322
56,874
791,936
966,186
406,887
145,801
126,000
6,286,649

no

No net
income
2,505

83,054
355,600
443,364
6;412
106,668
683,100
288,005
89,533
48,079
1,527,805

10,818
54,533
4,606
561
25,478
14,925
4,369
2,589
6,705
95,843

9,850
1,531
1,678,891
18,278,864
491,156
490,402 •
6,875
98,952
2,324
101,276
389,860

No net
Net Income
income
57,100
8,40S

700,461
'2,169,942
2,278,412
108,657
596,537
2,8S4,7n
1,207,134
504,884
217,066
8,223,535

100,682
256,263
21,412
9,659
146,078
47,076
19,668
6,126
8,624
556,252

86
6
8
259

No net
Net income
income
11,566 —
s s ts pt
76,U 9
295,570
281,854
4,803
82,503
258,219
110,626
37,443
26,828
952,713

86,937
330,103
286,460
5,364
107,980
273,144
U4,995
40,052
53,531
1,048,556

13,612

Retan
General merchandise

Total retan

U6

219
4

151,253
9,534

2,144
175

269,153
6,352

_

6

' 15
8,488
1
5
232
833
83,210
56li974
36/l0i870
56/10,907

36/10,870
205

j

Table 1. - Corporation returns with balance sheets, 1940, by major industrial groups for returns with net income and with no net income l/i Humber of returns, assets and liabilities
as of December 51, 1940 or close of fiscal year nearest thereto, compiled receipts, compiled deductions, compiled net profit or net loss,
net income or deficit, income tax, declared value excess-profits tax, total tax, and dividends paid - Continued
(Honey figures in thousands of dollars)
industrial groups 2/ - Continued
Trade - Continued

X
2
S
4
S
6

7
8
9
10

11
12
IS
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
59
40
41
42
43
44
45
46
47
48
49
50
51
S£
S3
54
55
56
57
58

Humber of returns with balance sheets 5/
Assets:
Cash 6/
Notes and accounts receivable (less reserve)
Inventories
Investments, Government obligations 7/
Other investments
Gross capital assets 6/ except land
Lass reserves
Land
Other assets
Total assets 9/
Liabilitiest
Accounts payable
Bonds, notes, mortgages payablei
Maturity less than 1 year
Maturity 1 year or more
Other liabilities
Capital stock, preferred
Capital stock, common
Surplus reserves 10/
Surplus and undivided profits 11/
Less deficit 12/
Total liabilities 9/
Receipts t
Qroas sales 15/
dross receipts from operations 14/
Interest, not on Government obligations
Rents and royalties 15/
Net capital gain 16/
Net gain, sales other than capital assets 17/
Dividends, domestic corporations 18/
Dividends, foreign corporations l57
Other receipts, not interest on Government obligations
Interest on Government obligations*
Subject to excess-profits tax 20/
Wholly tax-exempt 21/
Total compiled receipts 22/
Deductions :
Cost of goods sold 25/
Coht of operations 24/
Compensation of officers
Rent paid on business property
Repairs 25/
Bad debts
Interest paid
Taxes paid 26/
Contributions or gifts 27/
Depreciation
Depletion
Amortisation 28/
Net long-term capital loss 16/
Net loss, sales other than capital assets 17/
Other deductions
Total compiled deductions
Compiled net profit or net loss (35 less 49)
Net income or deficit X/ (50 less 32)
Net operating loss deduction 29/
Income tax 50/
Declared value excess-profits tax 31/
Total tax
Compiled net profit less total tax (50 less 55)
Dividends paid:
Cash and -assets other than own stock
Corporation* s own stook
Fox* footnotes

see page It

583”

Apparel and
accessories
Net Income
No net
No net
income
income
5,212
2,685
4,969

Drug stores

Package liquor stores
Net income

Net income
No net
income
979“
377 I5"

Automotive dealers
gating and drinking
Furniture and house
plftoes
furnishings
No net
Net income
Net income
No net
let income
No net
income
Income
Incasm
3,899
5,307
6,055
2,390
2,502
2,852

1

23,518
314,816
122,952
2,540
17,605
75,928
29,905
14,133
9,826
551,414

4,743
64,840
51,728
652
5,237
24,169
10,064
6,161
3,956
131,401

22,114
9,497
12,171
1,188
22,742
155,908
71,786
21,685
6,390
179,909

7,718
4,415
6,976
489
9,924
113,798
47,134
11,074
6,072
113,532

51,464
135,153
271,181
5,100
18,840
123,252
55,145
22,475
22,930
595,231

2
8,184
3
55,779
4'
77,232
5
369
6
4,930
7
46,048
8
18,037
9,264 9
6,830 10
170,599 11
34,567 12

2,230
1,108
91574
12
163
5,433
937
175
469
16,226

1,194
697
5,896
8
202
3,584
759
86
495
11,422

20,462
19,445
68,551
540
8,086
70,211
51,284
3,387
4,694
164,092

3,385
5,582
25,517
251
1,555
28,492
12,850
639
1,640
54,169

11,612
72,757
164,582 * 37,709
220,845 » 68,987
413
10,555
15,946
50,079
54,532
188,842
26,695
86,651
2,368
16,861
4,494
20,640
169,166
658,290

5,851

4,841

25,569

16,060

108,103

49,791

89,454

27,161

21,795

29,962

96,883

1,62?
1,572
1,024
161
4,485
34
2,074
597
16,226

1,129
1,565
763
143
4,207
4
670
1,900
11,422

4,018
11,030
7,150
15,844
55,179
3,015
46,004
3,516
164,092

4,608
6,981
5,056
2,208
27,465
155
7,335
13,675
54,169

28,750
42,355
57,028
62,491
188,166
10,314
198,147
17,064
658,290

14,090
18,075
8,620
15,333
84,151
1,770
27,103
49,747
169,166

41,550
24,664
77,114
58,670
144,998
21,550
128,968
15,554
551,414

12,999
14,758
17,614
9,587
55,845
4,228
17,992
28,782
131,401

11,391
20,241
11,053
12,622
55,655
1,493
53,187
7,508
179,909

11,046
32,467
9,296
10,949
39,932
7,828
12,532
40,679
115,332

127,388
58,839
41,Q91
18,278
162,794
9,293
111,310
30,645
595,231

46,859
26,930
11,160
4,157
63,228
1,433
21,043
38,778
170,599

13
14
15
16
17
18
19
20
21

54,165
251
2
81
4
18
1

35,503
121
(55)
22
1
12

149,829
1,079
21
520
20
20
8
1,524

6,966

628,450
6,592
2,178
1,786
62
142
4SI
(35)
79,655

145,255
2,643
533
505
26
16
46

43

1,502,818
9,947
1,107
6,755
145
160
2,185
(55)
32,104

352,827
2,846
233
1,085
27
35
43

105

439,925
990
4SI
949
430
70
1,488
(35)
4,248

8,190

404,195
12,212
206
2,121
30
119
1,127
(35)
2,565

293,093
10,264
250
2,008
25
145
4
1,485

2,950,595
44,609
5,505
1,356
122
141
607
8
20,980

750,730
13,022
975
635
43
65
20
(55)
6,558

22
25
24
25
26
27
28
29
50

5
4
448,541

5
2
152,827

140
49
1,555,410

3
6
364,071

S3
21
719,530

9
12
157,233

22
15
422,415

IS
4
307,271

102
22
3,023,845

2 31
1 32
751,850 S3

107,986
442
6,524
9,081
407
157
397
2,381
18
1,919
2
6
24
26
26,472
155,841
36/5,014
36/3.016
-a
•
-

56/10,971

2,532,815
25,010
54,624
27,186
3,910
6,449
8,707
18,500
246
7,590
15
57
915
200
293,512
2,979,754
44,110
44,088
1,155
7,947
210
8,157
55,954

641,612
9,604
14,339
8,300
1,121
2,560
3,475
4,955
29
2,427

—
36/6,466

234,790
6,432
15,955
26,522
3,980
186
1,104
10,623
123
9,770
4
25
279
64
98,577
406,253
16,180
16,165
484
2,965
54
3,019
13,161

170,805
5,826
15,206
22,176
2,401
305
1,594
8,019
26
7,986
IS
13
185
235
85,451
318,245
36/10,971
35fa>,976
-

36/12,503

347,656
1,271
26,819
20,882
1,642
7,261
5,488
12,102
220
4,224
2
147
60
265,316
691,091
28,240
28,218
828
5,500
79
5,579
22,660

92,249
789
9,248
6,656
364
2,047
1,483
2,481
29
1,253
*
—
106
87
46,906
165,699
36/6,466
15/6,478

36/3,014

984,544
2,979
44,570
93,210
3,898
6,573
5,171
19,663
620
12,525
1
86
307
167
, 327,418
1,499,333
56,077
56,028
1,190
11,166
152
11,318
44,759

255,654
1,412
17,599
29,137
604
1,552
1,202
4,765
22
5,599
SO
8
658
295
80,256
376,573
36/12,503
35/12,508
-

36/739

302,548
375
8,857
21,434
1,445
267
653
6,188
92
4,527
(55)
3
5
57
85,253
431,664
16,877
16,872
159
5,022
66
3,088
13,789

7
-

7,389
57

27
-

18,650
473

362
-

7,178
179

129
18

7,045
57

44
2

12,547
725

_

_

54,627

35,502

42,787
138
2,936
1,393
65
26
89
934
5
267

27,592
73
2,221
1,256
51
55
71
775
3
245
(35)
1
1
13
5,923
36,241
36/739
3S/759

«

3
7
5,061
55,709
918
918
45
129
7
137
781
46
34

me

_

mm

mm

-

am

-

—

36/9,218

34
35
56
37
38
39
40
41
42
43
44
45
46
47
48
49
50
51
52
53
54
55
56

436
52

57
58

22
330
503
71,984
761,068
36/9,218
33/9,219

Table 1. - Corporation returns with balance eheets, 1940, by major industrial groups for returns with net income and with no net inoome l/t Humber of returns, assets and liabilities
as of December 31, 1940 or close of fiscal year nearest thereto, compiled receipts, compiled deductions, compiled net profit or net loss,
net income or deficit, income tax, declared value excess-profits tax, total tax, and dividends paid - Continued
(Money figures in thousands of dollars)

Net income

1 Humber of returns with balance sheets 5/
Assets<
Cash 6/
2
Notes,and accounts receivable (less reserve)
3
Inventories
4
Investments, Government obligations ij
5
Other investments
6
Gross capital assets 8/ except land
7
Lass reserves
8
Land
9
Other assets
10
Total assets 9j
11
Liabilitiesi
12
Accounts payable
Bonds, notes, mortgages payable:
Maturity less than 1 year
IS
Maturity 1 year or more
14
Other liabilities
IS
Capital stock, preferred
16
Capital stock, common
17
Surplus reserves 10/
18
Surplus and undivided profits 11/
19
Less deficit 12/
20
Total liabilities 9/
21
Receipts:
Gross sales 13/
22
23
Qross receipts from operations 14/
Interest, not on Oovernswnt obligations
24
Rents and royalties 15/
25
Net capital gain 16/'
26
Net gain, sales otter than capital assets 17/
27
Dividends, domestic corporations 18/
28
29
Dividends, foreign corporations 157
Other receipts, not interest on Government obligations
30
Interest on Government obligations:
31
Subject to excess-profits tax 20/
32
Wholly tax-exempt. 21/
33
Total compiled receipts 22/
Deductions:
Cost of goods sold 25/
34
35
Cost of operations t v
36
Compensation of offTcera
57
Rent paid on business property
Repairs 25/
38
39
Bad debts
40
Interest paid
Taxes paid 26/
41
42
Contributions or gifts 27/
43
Depreciation
44
Depletion
45
Amortization 28/
Net long-term capital loss 16/
46
Net loss, sales other than capital assets 17/
47
48
Otter deductions
49
Total couplied deductions
50
Compiled net profit or net loss (33 less 49)
51
Net inoome or deficit 1/ (SO less 32)
52
Net operating loss deduction 29/
S3
Income tax 30/
54
Declared value excess-profits tax 31/
55
Total tax
56 Compiled net profit less total tax (50 less 55)
57
58

Dividends paid:
Cash and assets other than own stock
Corporation1s own stock

1,009

Trade - Continued
Trade not
Retail - Continued
allocable
Other retail trade
Retail trade not
Building materials,
allocable
fuel and ice
Net income
No net
Net income
No net
Net income
No net
Net income
No net
No net
income
income
income
income
income
6,527
2,^23
8,474
1,92$
1,246
3,390
4,923
3,3Ç5
4,130

Hardware

Filling stations

Net Income
Ho net
income
1,29?
1,296

1

2
20,301
103,386
3
102,245
4
5
1,902
6
29,679
160,561
7
68,197
8
9
32,509
12,460 10
394,846 11

9,884
17,897
19,449
5,452
5,517
69,446
53,573
25,812
1,884
119,367

1,291
5,689
5,017
24
991
17,802
7,054
4,573
826
27,159

4,494
25,664
35,562
264
3,001
14,062
5,685
2,531
1,389
81,285

1,401
8,632
16,487
52
884
8,518
2,972
1,321
687
35,012

34,882
198,384
159,903
4,264
47,692
200,523
101,763
51,608
10,677
606,170

9,167
59,592
36,897
1,077
20,950
94,947
43,235
26,696
6,124
212,217

29,699
135,965
121,428
4,402
14,560
91,062
40,198
12,819
11,117
380,854

11,190
56,033
65,839
511
21,176
41,715
16,883
3,706
4,782
168,069

15,061
72,757
64,196
1,214
10,902
69,713
31,026
8,954
4,314
216,085

5,590
26,992
23,771
141
5,848
30,876
13,420
5,135
2,197
85,130

94,848
398,320
413,541
11,889
223,049
427,165
210,503
87,447
50,859
1,476,596

21,898

7,059

12,055

7,271

76,688

59,795

76,435

36,515

26,255

14,417

223,636

87,794

12

3,502
7,540
8,334
3,259
47,885
1,580
27,572
1,962
119,367

2,698
6,089
1,615
639
12,362
83
2,675
6,058
27,159

9,017
4,394
2,649
2,096
34,787
546
18,423
2,482
81,285

4,141
3,124
1,396
998
21,338
147
4,511
7,915
85,012

42,591
38,359
18,179
25,817
256,692
5,179
163,081
20,416
606,170

21,304
33,498
7,391
14,798
105,253
5,618
35,145
48,566
212,217

30,749
18,331
36,520
12,308
126,015
9,858
91,198
20,557
380,854

24,478
21,611
11,272
19,487
62,269
5,788
22,369
35,669
168,069

17,817
14,782
15,437
11,169
78,888
2,898
55,887
6,225
216,085

9,516
8,629
6,050
4,182
40,282
1,142
15,361
14,448
85,130

91,586
82,040
76,443
69,730
457,491
26,366
489,930
40,625
1,476,596

41,104
59,438
18,924
50,435
161,852
4,266
71,619
80,563
394,846

13
14
15
16
17
i8
19
20
21

224,890
1,580
111
2,484
73
97
196
1
1,534

70,841
1,545
23
469
31
SO
8
1
472

150,779
471
588
267
10
31
28
(35)
1,726

46,182
247
94
169
9
5
4
462

957,595
7,479
2,237
5,549
285
427
1,118
3
10,539

276,109
3,682
488
1,444
146
178
183
1
2,757

639,350
9,175
2,375
2,944
89
118
455
5
15,727

215*525
6,109
630
1,211
41
114
119
2
5,076

424,998
3,995
1,117
948
58
151
238
2
9,164

126,763
1,697
235
398
14
29
44
(35)
5,098

2,825,242
42,824
4,997
9,013
521
697
1,874
20,496
25,598

706,724
15,202
953
2,298
99
275
537
6
5,579

22
23
24
25
26
27
28
29
30

92
93
231,150

(35)

2
37
133,940

4
4
47,180

68
51
965,149

18
10
285,016

58
57
670,353

10
3
226,837

20
30
440,717

3
1
132,281

170
142
2,931,574

53
42
731,569

31
52
33

99,264
160
6,294
2,294
179
904
656
1,869
31
832

35,569
150
2,939
1,462
67
434
302
740
5
367
(35)
(35)
41
69
6,873
49,019
36/1,839
$5/1.843

215,510
2,559
11,458
2,758
1,483
2,974
2,163
4,438
18
4,163
74
7
952
462
45,375
294^195
36/9,179
■56/9.189

36/4,201

2,220,818
9,986
73,834
29,941
6,796
12,310
9,392
34,171
577
22,791
117
190
914
368
376,807
2,799,012
132,561
132,420
1,747
27,581
1,092
28,673
103,888

571,211
10,131
22,613
10,927
2,180
4,867
5,856
9,067
61
7,405
43
6
1,334
1,337
106,206
751,239
36/19,670
$5/19,712

56/10,065

554,574
1,579
11,707
5,890
995
5,010
1,645
4,681
80
3,575
17
1
78
40
60,967
428,840
11,878
11,848
187
2,056
76
2,112
9,765

100,299
761
4,562
2,816
345
1,041
845
1,820
12
1,341
(55)
4
58
138
22,460
136,481
36/4,201
$6/4.202

36/9,179

437,174
3,797
27,122
18,527
1,546
5,454
2,289
8,325
171
5,291
2
4
196
40
135,289
645,227
25,126
25,070
678
4,592
168
4,760
20,366

155,358
1,612
11,016
11,754
465
1,253
1,327
4,518
10
2,232
108
3
315
1,340
45,591
236,901
56/10,065
$6/10.068

36/1,839

716,222
3,831
54,251
5,216
5,950
7,715
4,480
14,178
230
10,518
49
4
989
352
127,399
929,384
33,765
33,714
787
5,804
183
5,987
27,779

23

11,979

521

6,154

507

3,538

523

60,914

1,487

73,219

65,187
170,064 '
786
620 ,
2,886
3,829 !
3,666
2,864
1,775
205
600
292
SIS
327
4,677
1,694
2
28
4,075
1,003
2
9
2
(35)
40
138
31
22
31,647
9,920
221,874
75,009
9,276
36/1,790
■56/1.790
9,183
—
206
1,893
21
.
1,915
7,561
36/1,790
4,888
125

19

-

9
11
17,129
129,652
4,308
4,271
73
715
36
751
5,557
1,082
86

-

-

-

—
-

-

34
35
36
37
38
59
40
41
42
43
44
45
46
47
48
49
50
51
52
53
54
55
36/19,670 56
57
58

Table 1. - Corporation returns with balance sheets, 1940, by major industrial groups for retains with net incone and with no net income 1/. Humber of returns, assets and liabilities
as of December 31, 1940 or close of fiscal year nearest thereto, compiled receipts, compiled deducUons, compiled net profit or net 1 s,
n- ruf-ti-it. t i c « tax. declared value excess-profits tax, total tax, and dividends paid - Continued
lgures m -tnousanas oi o

Hotels and other
lodging places

Total service
Net income
1 Humber of returns with balance sheets 5/
Assets i
Cash 6/
2
Notes and accounts receivable (lees reserve)
9
Inventories
4
Investments, Government obligations 7/
5
Other investments
6
Gross
capital assets 8/ except land
7
Less reserves
8
Land
9
Other assets
10
Total assets 9/
11
Liabilities>
Accounts payable
12
Bonds, notes, mortgages payable t
Maturity less than 1 year
13
Maturity 1 year or »ore
14
Other liabilities
15
Capital stock, preferred
16
Capital stock, comeon
17
Surplus reserves 10/
18
Surplus and undivided profits 11/
19
Less deficit 12/
20
Total liabilities 9/
21
Receipts«
Gross sales 13/
22
Gross receipts from operation