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Io .ß l 3fV Vj. -v*v )•> 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# 3fOfflS8Ì®l[ 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 ô o Ilian tu Revenu Service territ ie S Is of Si rennes: Tha* sioner Men salary: teases | | | as zation Sector jurisdi year, flieca of exec fepres Î by L $ k p] kroliij lieorgii àcHj i ruli Bii Han ( P d P» that ficesgj Qploj ¡jp |f| liiti appeals ® fa cas Ai. ionor ¡¡g rui sshing K sa l ffice : 1 ® in eac ifrevq 1 I k th ffic I bc ri 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  --- — 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 - 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 - 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 - ) 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 o f .................. - 19 4 6 , m ay be th e ^ N O ffic ia l s p e c ific a tio n s r \ fo llo w s : x / a re as ' 1 . I t re ve rs e s h a ll s id e s i t c o ve re d w ith I t s h a ll have 4 . I t s h a ll be 5* I t s h a ll n o t n o t v a ry z in c o . as s h a l l w e ig h th o s e s u a n t to t it l e 3 1, c o a tin g I t s h a ll used th e c o n ta in 19 0 9 , S e c tio n 3 1 7 ) . s h dde in w ith th e .0 0 0 2 5 o f o f .7 5 0 o fa w fe ^ g h t b y ^ y te o re exceed o b ve rs e in c h e s and o f z in c , fo r i th e \of in c h e s . d is c . m o re th a n \0 0 1 th e /s a m e 3 5 15 p ie c e g r a in s . d ia m e te r n o t o n e —c e n t * js te e l d ia m e te r v$ ry s h a ll s in c e am ended Sec. in in o f \ c o a t/ in g \ j 4 1 .5 a w a rtim e ' com posed 3* s h a ll th e I t ¡th e \ be • 2 . fo r *0 0 2 3 g r a in s ; in c h e s ; and in c h e s . \ d e s ig n , oneApent th e th a n d e v ic e s p ie c e R e v is e d and le g e n d s c o in e d S ta tu te s p u r (U .S .C . 2 - p u b lic ity M any p ro g ra m s in d iv id u a ls , m e n ts have A th e ir r a d io c o m m u n itie s s ta tio n s , and a t th e ir own c o m m e rc ia l expense* e s ta b lis h h e lp e d * huge a tte s ts in - v o lu m e to o f c o rre s p o n d e n c e th e e n th u s ia s m th e c o in s , w ith r e c e iv e d w h ic h th e a t th e s c h o o ls M in t have p a r tic ip a te d * S in c e packaged a c tu a l a re p ro m p tly fig u r e s on la s t w eek by P r o d u c tio n 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 new and* is copper la w i f a ls o been n e e d s, a ttra c te d no fro m 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 U n ite d 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 W ith a fte r a u th o rize s g iv e n in c o in , becom e th is p ro d u c tio n . c o in c o in dem and* be change M o rg e n th a u 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 R e w ly 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 , M o rg e n th a u w a r tim e p n e -c e n t s te e l* J U 4 v / U h The ' sam e ^ e J l d e s ig n N e llie o u t c o in s can be a lr e a d y re d u c e d S ch o o l m o n th in th e s a v in g s v e rt th e m has w h ile p ro ve d tin u in g s is ta n c e in g to c o in s , p ie c e o f 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 > £ * ^ , s h a ll p re s e n t D ire c to r o f th ro u g h o u t W ar s a id Fe b ru a ry c a m p a ig n b u s in e s s in c re a s in g th e 1 . to d ra w use w ill c irc u la tio n 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 in d u c e c o n v e rs io n and a v a ila b le changeover B onds, to th a t The penny th e i t o th e rw is e p ro g ra m , s to c k s new is o r jo in e d m e ta l b e in g o f to d i d e s ig n e d fo r is th is h o lid a y b e in g a d o p te d as m ade, a con p o lic y . th ro u g h o u t M rs . N a tio n c h a n n e ls . s u c c e s s fu l th e th e c a m p a ig n S ta m p s 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 new p re s e n t Ross T re a s u ry ’ s to o f s u b s ta n tia lly * in to in it ia lly is c h ild r e n c o in needs I t th e th e w ill c o in s o f th a t T a y lo e o u ts ta n d in g m ade > 0 ^ t suspended M rs . be - b o is tim e , c o n tin u e d . to s p e c ific a tio n s ctsnMovr as sam e be c o in C o in a g e p ie c e e s ta b lis h e d ***- p ro v id e s c o p p e r, o n e -c e n t th e y 1909 . s in c e p e rc e n t new c and M rs . A t ^ o rd e r s ize m in te d 95 J to d a y th e c a m p a ig n Ross c o u n try to s a id , have in c re a s e m any o f g iv e n s u b s ta n tia l c irc u la tio n th e m c a r ry in g as o f o u ts ta n d 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. $. & o*% ioo 19.U7-4, ** « m M &/ Tr#a#ur/ ¡>#©i#iaa >102, i# l'urtar «fc*aMi i>y lAi«rtltt| o% ia* ® M tfl«r*Of 4&# f©ll0f?ià$S (A« to ih« r#q«ur#%«£>t» ©f filili® p o ì i #M | i aartif!«**•• S o r b o a ti i n t t r o o i g*ft*rall/ in Ui* oftiitt o t & U Q & rooiO oot u l i v o , o &©2tre a l& « fit p*rta#r*Alp o t m p o o o é t u afte4+ o r i o p u r i o t &oar«ttid«&t o l i v o » , & M u m léo& % for«i$n «•rpsrftUefi ®r *&#r# Ui# o*ii#r i# ©ttiulowa, «ad «tilt r*#j*#9t ©ai/ i© iat#r«#i ou o&Ug*Uo&ft ©©Biaiaia# » tius-fr## o v f o m o ù *ad i ©*«©4 p v i o t %o /©amar/ 1, i.924 4* Ut© #©te ©f © aiti-.«» or rooléMOt ot % m Otti*«* utoomo, « rasiéaai fjariaar$ M ji ©a® B o ttito & léo o b partaérAàip ©il of ta# mmtsboro ot wtìioh oro or rovióo&bo ot w a© It e it é d &$©%#«, som o o o i i o u Ì$.X4>*4i • (fai* t r m o o w ^ o oioioo i o is m o O u m o r tuo o u ih m 'ii? aùui*oinoO iu oo«%iom ©a »»4 147 ot iti# l&torsol bovoum Qoéo {33 $ ’%&%• )2, 44)*> (Signed) Guy T. HeW« * * 0©*Mii*«i©*©r Appro».4i imerubuxy o t %m Iroom ucf* ot XatariaAi koimmo - I is») i*y lao o rti& g i » t o o i t o puf* * r * P * i« A t o o i o l y «ñor t o *©rá ^ t o b l y * tfeo fo U «« it¿# i t o ©olotor ? m t m j F « r . 3. fo r «a& «ab#«*oto «nitoar ^ § 1 % M iU M i 1 3 .H > 7 * »* « a o to é by fto o tir y $X?4» i « tu rto s * m m é * á **© f i U w « i (4) % in*nrli&£ t»!tooloXy aíV*!1 14« ©1*14 ••BtUfiO« tfe© to iio w lñ ^ j Eooooor, tor 1 Ao « «Xoiidor yo©r 1943 &Ad «ubaOjUto oalotor yoor» t o wltooldl*« *&*&%■ QAorlorXy rotura ©fc Io t a X0X2 ©0 ®r toXX a©*© « b«í©r« l&o ítfi doy ©í lito a t o b f©Uo«ia$ 14© t o a t o t t o o í iá© %iMur%©r fo r w&iofc 1 0 « r o lu ra i a a » &«• Tb© ©«Aoroblp © orli í lóala© » foroui 1000 » M 10019 au&l ©« forwordoé i© t o 0«ao4©«i©A©r « H A tb# ^uArtorly rotura. Jtotma XG01 tould b* Xiot©4 ©a Ib© rotura. to l a forma 1000 aood 3-aarUrly aoi b« ll»t©# ©a t o rol uro» id© Auaoor oí au©& topa© aulMiltioá aaú U so i o l o l aaoaat O í io to r o a t pold o*d O í 14© lo * * i t o o id && oooii oí 14« t o m a o» roport l&toroot írom to o á lA« w x lo lo 0# «i1*44*14 oliould 00 ©Atrorod lo 14« o^«i©oo ¿rotldod. 1 4 ) ¿»y l * o © r t l & g 1 a t o í o u r t a « © » t o e # © f tfc© « « © t o ^«rogrofífe ii©*©4ÍAt©l/ « íio r Ib© *mrd "jutethl/" 14« í©11©*1»íM "i^ o o rto rly, íor th© eoloadmr y«#r 1943 ©Ad ©aImmksu»flt •Al*Aé*r yeor»)*** P«nr* 4. booUoo i y . U > 9 1© ooofídoá by ©toag ©**** «14» %'m foilevtos * i«ad t for o laxadlo yoar oogitoS4& « f lo r © odio» 450)*• Ü # 194-2, t o V io lo «1/ 1 « lapo»«© by «ertificaie« ara requirc© lo te tiléé by omk oliiarac, renitest», Xiteelcrie» pertter* «alpe ©aìy «ite rccppei io U t « r « 0 i ©pop©»« m teste, mertgeg«« or date» #X truci, or ©iter «tellar ©PU$«ti©r.a iooute prlor io teau&ry 1, 1934, «te «oateiaiisg a tea-fr©« ©©roteai* Io t&« «ce© of i«taraci oc ©axigctioa* ©X ite irsiite Staio# or/«tty cgcaer or iaeiniAoatclilr taor©of | rcgcerdlcoc of ite tei© ©X le cucaco \ ttercof t oasiorchip ©erllXiecl©# càci! Oc fiIte 0/ cute «UlsitM, reeiteatii, fi©telarle© «te pturta«jrafeipc ©aiy im ite ©eco of iatcrpct pei4 oc or ©fior testerf 1» 19*2 cs4 prior io J m m r y 1, m$' CBJ clriii«^ out ite memé «catenoc of Ite tal te paragrafa «ad incprlittg la Ileo thorcof ite Xpllowlag* Yte ©oaorcaip «©rttXtcet© 1« ro^uirte la ©te& •eco» «hotsor or coi ite PlllgaUo« tostala« c ta*~fro© coronasi. (€} % «»#»4lag ite test »««tote« of ite taira paregrapi io re«© c» folio««s Oiracreaif ©ortifi©aie* ( F o m 1001) «teli eleo te fllte la ite cete ©X latereet pelo ©a ©r «iter J'mmry 1» 1942, ©a oillgetiQn« of ih« Halite ¿»tatoa or my agate* or itetrua&osielity itercoX, remerai•«« ©X ite tele of 1«cuccee of eueb olligatlo&a, if cuoi ofelifaiioa» ere owaod ly ih» parco»* teseritea la ite fi rei costoso© ©X tale paragrapfc. (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 mmm 1 » ü ®§fcifei S^feiSÉÂîiSI m » ÜgSfi ®«SS ¡-#is® is V -a- ifcawsa because th is requirement could be changed only by Congress. Kp^Âf *ââj r Æ 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: p H L iaâ läK^ts RgXSg ;g||:p: ^¡¡¡§i II P EfS' BMifl (¡Dûlà « I K M l I l»fe ;3o ilI Hé t®P*£ | mMm Rtes iHL mm mmm v jj w^fv1; «M m S I ;¿¿c-> ¡¡¡Hl 'Pi Hgt ^ pv;-g a 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 ®si 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 f/erag prie mm m w l I ■mi ■ m 1 S p R WÉM&i' m m ¡¡¡ì ! ; r t Ä 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 ms V I È « Hi ;rict Boi ¡on York adelpk reland mond nta Louis »poll as Citi as Î mm m phi B Sancii m g K perce ■ 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% o f d is c o u n t a p p ro x . 0 .3 6 8 /c o f d is c o u n t th e a p p r o x . 0 .3 6 3 /6 lo w p r i c e w as a c c e p t e d . ) T o ta l A cc e p te d 2 9 ,5 6 0 ,0 0 0 7 8 5 .6 8 4 .0 0 0 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 *o0o is made l i ght b y the real i z a t i o n that if it w i l l h e l p us obtain the t h i n g s w o r l d today^'1 he said. •o0o~ it is a small p r i c e t o that are at stake in the ’ y^àyC L««^a ^«—-A fit"4jL4*. T^s T r o n f l ll ir Q ffiM .n l cn m rv ^ ^ a x3 it w^ a&Pit£LfldMyiil'fe'i €fr«,»lIPlggfl””ll l!i(i I-j^u, CL^ aJ ^ " H l^ flA ^ r g S ' T n v B a ^ 00^ ^ ’ irn ji|iiff-iir—,J-*-■-■- Zz -j ..„‘¿I h «ji»t%»?»ijnitii.. i t i in itU L 'i» ^ 'A w cT I U t 1 * 1.111,1.1 '¿.'tl..r i i ' H ' 6" « i i ' i , i U ! ^ ^ A m a n u f a c t u r e r 's t a x w o u ld p l a y h a v o c w i t h p r i c e and a r e t a i l s a le s v e r y h ig h c o n t r o ls , t a x w o u ld y i e l d .¿.mo & g la g g e s n i^f*Trrn“ hiane.w lo ejgtf—j.toufr■«&« jpgiftlly,,............................ and h a s *1® ..... ..¿ i ^ The r e t a i l : 4 H a n ^ a l e s and h e n c e n e ce ssa ry in t o l i t t l e , re v e n u e e x c e p t a t ra te s. »-»i.iifl . b a s is it account e s s e n t ia l cannot e x e m p t io n f a m ily g A g y y r ^ N e it h e r ca n ta x ta xe d a t d if f e r e n t tn ro u g h th e se In In c o m e , except b e tw e e n lu x u r y on t h e h o w e v e r, e x e m p t io n s c o n t e m p la t i n g n o r ta k e s p e n d in g and c ru d e a n d w h o lly of o p e ra te s and p r o g r e s s i v e a r t ic le s to be on a n o v e r a ll b a s is ra te s, c a n a cco m r e a d ily " .M th e w e ig h t o f th e ch at b a c k o f th e b u rd e n h p . S u rre y th e ra te s. en d s q u it e b e re m e m b e re d (| on a p ie c e m e a l in c o m e b r a c k e t s , d if f e r e n t ia t e f,T n e s p e n d i n g s t a x , and t h u s , p r o v id e ^ a n d d e p e n d e n c y s t a , t u s - -i4,,'*£p|» *# w i^w *r s iz e e x p e n d it u r e s w o p e ra te s s a t is f a c t o r ily f o r t h e lo w e s t it § 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 p lis h o r a wholesaler's sum m ed u p . is ta x b u rd e n , it a r e c o r d f lo w 11And e v e n t h e h e a v i e s t m ust of o f b u rd e n s o th e n a t io n 's s t a b iliz a t io n aa.1iu iiiui1 p i s ¿g" ift p ro g ra m . &""^trgrgrs i s i : s r r a s r a r w ^ a fl rrtv» _ m. ff " The h as s a id fo r tax Incom e som e t i m e th a t th e b est T re a su ry D e p a rt m e n t m e th o d -o f p la c in g th e on a c u r r e n t b a s i s i s th ro u g h c o lle c t io n a t th e r. o^ ^ ¿6? cI ^ u l JL *- ,fr j > p iiC T T c o l l e c t i o n we 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 it so u rc e * M p lu s f i r s t b ra ck e t su rta x ra te , th e v a s t m a jo r it y t a x p a y e r s w o u ld b e p l a c e d on a c u r r e n t b a s i s — of our about 25 ■J o f th e e s t im a t e d 3 5 ,0 0 0 ,0 0 0 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 p a y e r s . in c o m e t a x e s In a d d it io n a u t o m a t ic a lly b u d g e te d f o r t h e m . 11 The f o u n d a t io n s been l a id s a la r ie s M r. in th e w h ic h i s o f a c o lle c t io n 5 p e r c e n t w it h h o ld in g a fe a tu re at th e so u rc e s y ste m have t a x on w a g e s a n d o f t h e f* V ic t o r y t a ^ " , a c c o r d in g to S u rre 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 t o t h e V i c t o r y t a x a n d ¿j 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 , ^incom e t a x a t i o n i s now on a s h i r t s le e v e s ra th e r th a n a s i l k s t o c k in g > f o r c o lle c t io n at th e so u rc e b a s is ^ h e ">bkjL p o in t e d o u t^ " '^ s ^ ^ c a s e re s t e d upon t h is in e s c a p a b le fa c t S u r^ fe y s u g g e s - t ^ d t h a t fro m w a g ^ op(d s a l a r y d i v i d e n d ^ \a n d a lo n e ." \ tp e x t e n c l^ c u r r e n t /c o l^ e a r n e r s , y^hd p e r h a p s thNe r 6 c i p i e n ' in t e r e s t , to V ^ h e p r o f e s s io n a l/n v a n . th e . n d e p ^ n d e n t \ c o n t r a c t o r , ftae \ n d i v i d u a l p r a i r i e t & r , i gHggSI] lu n a e r w h i c h 'p i »rat c a n be p r o >?6s e d s o \ f a £ 5 w o u ld bi is th e b 4 |t 1m e a u a r t e * ly p & y m e h t, ia d e 01/ a t e n t a t i v e t New Y o r k , m e th o d o f p l a c i n g c u rre n t b a s is in c o m e , h e re is Jan . in d iv id u a l c o lle c t io n th e N a t io n a l The s im p le s t , in c o m e t a x p a y m e n t s o f th e S. S u rre y , ta x e s a t th e ta x o f th e w as t o l d le g is la t iv e a s s o c ia t io n T he P r e s i d e n t 1s b u d g e t m e ssa g e t o 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 c o lle c t io n s s t u d ie s , th e w h ic h M r. S u r r e y The’ f ir s t s u p p ly c a llin g "b y t a x a t io n , f i s c à l p r o b le m s to so u rc e counsel on th e s u b je c t ^ t h e 1 9 4 3 T a x P i c t u r e . 11 "Som e A s p e c t s o f ta x on a 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 m o st e f f e c t i v e R e t a i l D r y G -oods A s s o c i a t i o n to d a y b y S t a n le y o f th e 13 — of se rv e a s f o r e c a s t in g #1 0 0 , 0 0 0 , 0 0 0 , 0 0 0 fo r s a v in g s C o n g re ss, in # 1 6 ,0 0 0 ,0 0 0 ,0 0 0 o r "b o th ", in new p r e s e n t e d tw o a b a c k g ro u n d f o r a l l 1943 s a id . t h e s e p r o b le m s , h e \e x p la in e d , 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 Œ RELEASE 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