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U,S.
T r ^ s s
i »•
LIBRARY
UOAM
£030
JUN 1 41972
treasury department
mxbbl
- 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*
rami
-
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 ---- January 20 } 1943------ .
W
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
Washington
EOR RELEASE, MORNING NEWSPAPiRS,
tg
Friday, January 15» 1943______ •
The Secretary of the treasury, hy this public notice, invites tender;
,
for $700.000.000
S
, 1
~
or thereabouts, of
...91—
Treasury hills, to he issued
g'lW -reasuxy
,
on a discount basis under competitive bidding.
be dated
January 20, 1943
The Dills of this series wi
, and will mature
when the face amount will he payable without interest.
April 21. 1943
They will he issued in
hearer form only, and in denominations of $1,000, $5,000, $10,000, $100,000,
«»tint
Hylpi
to
$500,000, and $1,000,000 (maturity value).
Tenders will he received at Federal Reserve Banks and Branches up to the
4k
War
closing hour, two o'clock p. a., Eastern atsoOwSL time,
Monday,
lisand
toto'I
J m g r y 18, 19.4 1 ^
Tenders will not he received at the Treasurer Department, Washington.
Bach tender
is® }
must he for an even multiple of $1,000, and the price offered must he expressed
on the basis of 100, with not more than three decimals, e. g., 99.925.
may not he used.
slewir
¡spie
lappi
ratic
Fractions
It is urged that tenders he made on the pointed forms and for
warded in the special envelopes which will he supplied hy Federal Reserve Banks
iWUCIc
or Branches on application therefor.
pfj(j
Tenders will he received without deposit from incorporated hanks and
trust companies and from responsible and recognized dealers in investment securi
ties.
Tenders from others must he accompanied hy payment of 2 percent of the
face amount of Treasury hills applied for, unless the tenders are accompanied hy
| H
an express guaranty of payment hy an incorporated hank or trust company.
Immediately after the closing hour, tenders will he opened at the Federal
TREASURY DEPARTMENT
Washington
y
; ;■
POR RELEASE, M O R N I N G NEWSPAPERS,
Friday* J a n u a r y 15*. 1945*
. 1-14-43•
......
—
"
^ The S e c r e t a r y of the Treasury,
tenders
f o r '$>700,000,000,
b y this p u b l i c ‘notice,- invites
or thereabouts,
of 9 1 -day T r e a s u r y - b i l l s ,
to be issued on a di s c o u n t basis u n d e r .c o m p etitive bidding* • The'
bills o f this
series w ill be d a t e d J a n u a r y
mature April 21,
20,
1943,- and will
1943, w h e n the face a m o u n t will be- p a y able w i t h
out i n t e r e s t 4 . ‘T h e y will be issuèd in b e a r e r f o r m oiily,- and in
d e n o m i n a t i o n ^ o f $1,000, $5,000,
$ 1 ,000,000 (maturity value) .
$10,000>
.
Í 1 0 0 > Ó Ú 0 , ' $ 5 0 0 ^ 0 0 0 ,■ and
•
T e n d e r s will be r e c e i v e d a t ; P e d e r a l ‘ Reserve Banks and Branches
up to the c l o s i n g . h o u r A ,;ÿwb 'oT c l o c k 1 p V m . , E a s t e r n - W a f 'time, Monday,
J a n u a r y ' 1 8 , ,1943*; .T e n ders will n ot be r e c e i v e d at the T r e a s u r y
Department,. Wash i n g t o n ,
E a c h t é n d e r niUst be f o r ’a n even m u l t i p l e
of il ,00Ó , and the price o f f e r e d m u s t be e x p r e s s e d on the b a sis o f
100, w i t h not m o r e t h a n three d é c i m a i s > e* g*,.* 99*925* Practions
m a y . n o t be used*
It is u r g e d that, t e n d e r s be m a d e on the p r i n t e d
forms and f o r w a r d e d .i n .the special e n v e lopes w h i c h . w i l l be s u p
plied by Pederal ;Reservé B a nks Or B r a n c h e s 'on a p p l i c a t i o n therefor*
T e n d e r s will be rec e i v e d 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 '
banks a nd trust companies and f r o m resp o n s i b l e and rec o g n i z e d
dealers in i n v e stment securities*
Tenders f r o m others m u s t be
a c c o m panied b y p a y ment o f 2 p e r c e n t o f the face amount of T r e a s u r y
bills a p p l i e d for* u n l e s s the''tenders are a c c o m p a n i e d by an express
guara n t y of p a y m e n t by an i n c o r p o r a t e d b a n k or trust company.
I m m e d i a t e l y a f ter the closing hour, tenders will be O p e n e d at
the Pederal Reserve- Banks and Branches, f o l l o w i n g w h i c h public
announcement will be m a d e by the S e c r e t a r y of the T r e a s u r y of the
amount and p r ice range of a c c e p t e d b i d s *
T h o s e s u b m itting tenders
will be a d v i s e d o f the acce p t a n c e or r e j e c t i o n thereof*
The S e c r e
tary of the T r e a s u r y e x p r e s s l y reserves the right to accept or
reject any or all tenders, in w h ole or in part, and his a c tion in
any such respect shall be final*
P a yment of accep t e d tenders at
the prices o f f e r e d m u s t be m a d e or co m p l e t e d at the Pederal Reserve
Bank in cash or o t her i m m e d i a t e l y a v a i l a b l e funds on J a n u a r y 20 ,
1943,
35-0
(Over)
2 ~
f
The Income d e r i v e d f r o m T r e a s u r y bills, w h e t h e r i n t e r e s t or
g a i n f r o m the sale o r o t h e r d i s p o s i t i o n of the bills, shall not
have any exemption, as such, and Idss from the sale or o t h e r dispo- W
sition of T r e a s u r y bills shall n ot hav e any special treatment, as
such, u n d e r Federal tax Acts, n o w or h e r e a f t e r enacted.
The b i lls
shall be subject to estate, inheritance, gift, or o t h e r excise
taxes, w h e t h e r Federal o r State, b u t shall be exempt f r o m all
|
t a x a t i o n n o w or h e r e a f t e r im p o s e d on the p r i n c i p a l or interest
t h e r e o f b y a ny State, or a ny of the p o s s e s s i o n s of the U n i t e d
States, or b y any local taxing authority.
For pu r p o s e s o f t a x a
tion the a m ount of d i s c o u n t at w h i c h T r e a s u r y bills are o r i g i n a l l y
sold b y the U n i t e d S t a t e s shall be c o n s i d e r e d to be interest.
U n d e r Secti o n s 42 and 117 (a) (1) of the Int e r n a l R e v enue Code,
as am e n d e d b y S e c t i o n 115 of the Re v e n u e A c t of 1941, the amount
of d i s c o u n t at w h i c h bills Issu e d h e r e u n d e r are sold shall n ot be
c o n s i d e r e d to accrue until s u c h b i lls shall be sold, re d e e m e d or
o t h e r w i s e d i s p o s e d of, a nd suc h b i lls are e x c l u d e d f r o m c o n s i d e r a
tion as capital assets.
A c c o r d i n g l y , the o w n e r o f T r e a s u r y b i lls
(other than life I n s u r a n c e companies) i s s u e d h e r e u n d e r n e e d i n
clude in his income tax r e t u r n o n l y the d i f f e r e n c e b e t w e e n the
p r ice p aid for s u c h bills, w h e t h e r on or i g i n a l Issue o r on s u b
sequent purchase, a nd the amount 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
J|
sale or r e d e m p t i o n at m a t u r i t y d u r i n g the taxable y e a r for w h i c h
the r e t u r n is made, as o r d i n a r y g a i n or loss.
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 No. 418, as amended, and this
notice, p r e s c r i b e the terms of the T r e a s u r y b i l l s and g o v e r n the
con d i t i o n s of t h eir issue.
Copies of the c i r c u l a r m a y be obtalned fro m any Federal Reserve B a n k or Branch.
oOo**
3
of the Treasury, and the Director of the Bureau of the Budget
with reliable, current Information urgently needed in the conduct
of such a large expenditure program*
tiernas
________
^
Mr. Bell______
added that.a-fe
_ r^not generally known
abou^Ttha**8ervi ce/ performed by the Treasury* s accounting organization involved the maintenance of pay-roll flow records which
were instrumental in eliminating delays in making payments to
I
,....»■»■"""....
workers all over the countrycMLndeperuìont-audit of*
.tftn
^
qi,c
i^ u t d a t e d n Jb T î^ i r T d l îi^ ^ a y ' I W ^ i^ e h e ti^ o a d g r in il^ t r g ^ ve a g e n c i e s ^
»
«
awwHBIIWKfWtt
16 emergency Treasury ACco”
organization irereMo rgen t h a u l a s t iilL^ril with the statement that it had compie
^ S I c F T r w r - w t a b a A a h ed ’
-
2
*
-
accounting for relief and work-relief money during the past six
years*
The report showed the following totals:
Appropriated
Obligated
Expended • •
e # • # e
Unobligated
Unexpended •
$15,243,092,663
15,144,839,147
15,084,249,294
98,253,516
158,843,369
Tn commenting upon th. report, AulSHtg Secretary of the
"Treasury Bell sal(0**wt""^he report Is significant of what can he
done In the Government through a properly organized accounting
staff equipped with m o d e m accounting equipment«
"It is the most remarkable accounting performance I have
witnessed during thirty years of public service",
^ T in h n n si
r
h a u l lii j .
_j Y
r
"While there may have been some differences of opinion concern-
1
* V.
ing certain types of work carried on in the work-relief program,
r
no question has ever been raised concerning the integrity of the
accouniittLd disbursing work done by the Treasury Department".
To Mr. Be l l ’s accolade has been added many others.
Typical
/N,
ifc o n K fr^m A V R. Hatton, chairman of the Department of Political
\
Science a^ Northweajiem University ii^<^eiSed the reports
V
^remarkable" which left him "amazed and jubilant",
£-~
As a consequence of difficulties experienced in procuring
current financial information involving large expenditure proà !
— r"10
1935,
grams, -Mr
SUL
^
vleftd President Hoosevelt
the need for establishing an account-
ing organization which would enable not only effective control
over the limitations fixed by the Congress and the President on
the amounts to be expended for different projects or classes of
projects, but which would also provide the President, the Secretary
■IMU
accounting jobs
After completing one of the largest
ever undertaken, the Treasury’s Emergency Accounting Organisa
it
ft*
tlon, set up by executive order in 1935 to svACftr expenditures
for relief and work-relief, closed its books0 M i y
The agency
r\
has been in process of dissolution since last July and earlier
this week the President sent to Congress its final report on
disbursements of more than $15,000,000,000 made available under
the series of Emergency Relief Appropriation Acts*
V~When it became evident last summer that the organization1 s
tremendous nation-wide task^wtis being-tegmina ted, Commissioner
E* P* Bartelt of the Treasury’s Bureau of Accounts, who also
headed up the emergency activity, began to respond to Army and
Navy requests to transfer his expertly-trained accountants.
He
was thus able to find positions for almost all of the members of
t|
his staff*
Under UTlWainn g i
i
n
/
c
t
s
,
and accounted for more than $15,000,000,000.
the group disbursed
Against these dis<^**a“rir'
,
‘“*m,nm'*™n'..*s.
bursements the "
^lomptrei 1 era G onofal^’C ^exceptions Outstanding)are
less than $3,500,000 or equivalent to 2/lOOths of one per cent*
Even these suspensions do not indicate erroneous payments since,
for the most part, they will be cleared up through further
written explanations concerning the transactions*
And, in addi*"
tleB, the agency saved the Government more than $12,000,000 in
discounts through prompt payment of bills«
1
i1flrnt sent to the Congress,
"The Fr»i
Pnegia
y
O f
m&m t h e --fin»!
N
repo r t pi iepa rq d ,l^ >
^ ttr,,i ?r eaeu«»y*riepftrf.miiat c o n t a i n ! ^ a complete
V
vtCuT
I1
^-
TREASURY DEPARTMENT
Washington
FOR RELEASE, M O R N I N G NEWSPAPERS,
Saturday, J a n u a r y 16, 1945.______
1 - 1 5-43
Press Service
No. 35-1
A f t e r c o m p l e t i n g one o f the l a r gest a c c o u n t i n g jobs ever
undertaken,
the T r e a s u r y 1s E m e r g e n c y A c c o u n t i n g Organization,
set up b y e x e c utive o r d e r in 1935 to account for e x p e n ditures
for r e l i e f and w o r k - relief,
has c l o s e d its books.
The a g e n c ÿ
has b e e n in p r ocess of d i s s o l u t i o n since last J uly and ea r l i e r
this w e e k the P r e s i d e n t
disbur s e m e n t s o f mor e
sent to C o n g r e s s its final report on
than $ 1 5 , 0 0 0 , 0 0 0 , 0 0 0 m a d e ava i l a b l e u n d e r
the series o f E m e r g e n c y Relief A p p r o p r i a t i o n Acts.
W h e n it b e c a m e evident last s u mmer that the o r g a n i z a t i o n ’s
tremendous n a t i o n - w i d e task w o u l d soon be completed, C o m m i s
sioner E. P. B a r t e l t of the T r e a s u r y ’s B u r e a u of Accounts, who
also h e a d e d up the e m e r g e n c y activity, b e g a n to r e s p o n d to A r m y
and N a v y requests to t r a n s f e r his expertly-rtrained accountants.
He was thus able to find pos i t i o n s for almo s t all of the m e m
bers of his staff.
U n d e r various r e l i e f acts, the group d i s b u r s e d and a c c o u n t e d
for mor e than $ 1 5 , 0 0 0 , 0 0 0 , 0 0 0 *
A g a i n s t these d i s b u r s e m e n t s o u t
standing e x c e p t i o n s are less than $ 3 , 5 0 0 , 0 0 0 or equi v a l e n t to
2/l00ths of one p e r cent.
Eve n these s uspensions do n o t indicate
erroneous p a y m e n t s since, for the m o s t part, they will be cleared
up through fu r t h e r w r i t t e n e xplanations c o n c e r n i n g the t r a n s a c
tions.
The a g e n c y saved the G o v e r n m e n t m o r e than $ 1 2 , 0 0 0 , 0 0 0
in discounts t h r o u g h p r o m p t p a y m e n t of bills.
F o l l owing the g e n eral for m of previous annual reports pre
pared by the T r e a s u r y the report sent to the C o n gress e a r l i e r
this w e e k b y the P r e s i d e n t contains a complete a c c o u n t i n g for
relief and w o r k - r e l i e f m o n e y d u r i n g the pas t six years.
The
report s h owed the f o l l o w i n g totals:
Appropriated
Obligated
,
Expended ♦ ,
Unobligated
Unexpended .
$15,243,092,663
15,144,839,147
15,084,249,294
98,253,516
158,843,369
2
In c o m m enting u p o n the report, U n d e r S e c r e t a r y of the T r e a s u r y
Bell said ”It is the m o s t rema r k a b l e a c c o u n t i n g p e r f o r m a n c e I have
w i t n e s s e d d u r i n g t h irty years of public service.
The report is
significant of w h a t can be done in the G o v e r n m e n t th r o u g h a p r o p
erly o r g a n i z e d a c c o u n t i n g staff eq u i p p e d w i t h m o d e r n acco u n t i n g
equipment.
’’W h i l e there m a y
cerning certain types
gram, no qu e s t i o n has
of the a c c o u n t i n g and
ment .”
hav e b e e n some diff e r e n c e s of o p i n i o n c o n
of w o r k c a r ried on in the w o r k - r e l i e f p r o
ever b e e n raised concerning the i n t e g r i t y
d i s b u r s i n g w o r k done b y the T r e a s u r y D e p a r t
As a consequence of d i f f i c u l t i e s e x p e r i e n c e d in p r o c u r i n g
current financial i n f o r m a t i o n i n v o l v i n g large expe n d i t u r e programs
prior to 1935, Pre s i d e n t Roosevelt r e c o g n i z e d - the n e e d for e s t a b
lishing an a c c o u n t i n g o r g a n i z a t i o n w h i c h w o u l d enable n ot onl y
effective control over the limi t a t i o n s f i xed b y the Congress and
the P r e s i d e n t on the amounts to be ex p e n d e d for d i f ferent projects
or classes o f projects, b u t w h i c h w o u l d also provide the President,
the S e c r e t a r y of the Treasury, and the D i r e c t o r of the B u r e a u of
the Budget w i t h reliable, current i n f o r m a t i o n u r g e n t l y n e e d e d in
the conduct of such a large expenditure program.
Mr, Bell added that an imp o r t a n t m a t t e r not g e n e r a l l y k n o w n
about the p u b l i c service p e r f o r m e d b y the T r e a s u r y ’s emergency
accounting o r g a n i z a t i o n involved the m a i n t e n a n c e of pay - r o l l flow
records w h i c h were instr u m e n t a l in e l i m i n a t i n g delays in m a k i n g
payments to w o rkers all o v e r the country.
- 0O 0-
W
TREASURY REPARTIERT
Washington
P O E I M M E D I A T E R E L E A S E ^ . _____
T u o o d a ÿ y Dooerabcr- 15 r 1 9 4 2 »-
D u r i n g the- m o n t h of
Press Service
No..-34==£äi
f i »
«
iivvemitwjp-no m a r k e t t r a n s
a c t i o n s t o o k p l a c e in dire c t a n d g u a r a n t e e d s e c u r
ities of t h e G o v e r n m e n t
o t h e r accounts,
for Treasury investment and
Secretary Morgenthau announced
ft
today..
- 0O 0-
TREASURY" D E P A R T M E N T
Washington
FOR IMMEDIATE RELEASE,
Friday, January 15, 1945.
Press Service
No. 35-2
D u r i n g the m o n t h o f D e c e m b e r no m a r k e t
transactions
took place in direct and g u a r a n t e e d securities of the
G o v e r n m e n t for T r e a s u r y i n v e s t m e n t a nd o t h e r accounts,
S e c r e t a r y M o r g e n t h a u a n n o u n c e d today.
oOo-
2
The Secretary also called attention to the
joint statement issued on Friday by Chairman Doughton of
the House Ways and Means Committee and Cj^airmai George of
the Senate Finance Committee, the legislative groups that
consider tax measures.
They said:
«The committees having to do with tax
legislation have been advised that reports are coming from
over the country to the effect that a change w ill be made
in the tax law which would preclude the ^ 2
necessity of
filing the 1942 return due on March 15,^k0i$ 1943*
«This assumption on the part of any taxpayer
that he will not be required to file his 1942 return on
March 15, 1943, is erroneous*
In all cases, that return
will have to be filed and at least the first quarter payment
will have to be paid.
"Those filing early returns will be in no
danger of being penalized.
Whatever decision may be m de
as to future *ax legislation will not affect that taxpayer’s
obligation to file his 1942 return as usual and pay his tax.”
00O 00
For Sunday a m ’s
An appeal for early filing of tax returns
on 1942 income was made today to 35,000,000 Americans by
Secretary Morgenthau.
Although elaborate preparations for the
convenience of taxpayers have been made by the Bureau of
Internal Revenue, the Secretary said that, w i t h more than
8,000,000 additional individuals required to make returns,
last-minute jams would swamp collectors’ offices and
consume valuable man-hours of taxpayers, many of w hom
will be workers in war production.
Revenue officials recalled the help given
last year by taxpayers infuriated by the attack on Pearl
Harbor.
Eager to file their returns and pay their taxes,
they began streaming to the cashiers’ windows as soon as
the returns were receivable early in January.
A total
of 26,369,044 individuals made returns on 1941 income
and the spreading o ^ w o r k through early filing eased
what would otherwise have been a terrific strain on the
tax-collecting machinery.
Profiting by that experience, collectors
have arranged wherever possible for ground-floor booths
for cashiers and a one-way flow of taxpayers to and from
the booths.
TREASURY DEPARTMENT
Washington
T OR RELEASE, M O R N I N G NEWSPAPERS,
Sunday, J a n u a r y 17, 1943.________
1- 1 6 - 4 3
P r e S s Service
No# 35_3
A n appeal for e a rly f i ling of tax returns on 1942 income
was m a d e
today to 3 5 , 0 0 0 , 0 0 0 A m e r i c a n s b y S e c r e t a r y Morgenthau.
A l t h o u g h elaborate p r e p a r a t i o n s for the convenience of
™
y e r s ,hav e b ?en m a d e b Y the B u r e a u of Internal Revenue,
the S e c r e t a r y said that, w i t h m o r e than 8 , 0 0 0 , 0 0 0 additional
i ndividuals re q u i r e d to m a k e returns, l a s t - m i n u t e jams w o uld
swamp c o l l e c t o r s ’ offices and consume valuable m a n - h o u r s of
taxpayers, m a n y of w h o m will be wo r k e r s in w a r production.
Revenue officials r e c a l l e d the hel p g i v e n last y e a r b y
axpayers i n f u r i a t e d b y the a t t a c k on Pearl Harbor.
E a g e r to
file their returns and p ay their taxes, they b e g a n streaming
to the c a s h i e r s ’ w i ndows as soon as the returns were r e c e i v
able early in January.
A total of 2 6 , 3 6 9 , 0 4 4 individuals m a d e
returns on 1941 income and the s p r e ading of w o r k t h r o u g h early
f i ling eased what w o u l d o t h e rwise have b e e n a terrific strain
on the t a x - c o l l e c t i n g mach i n e r y *
P r o f i t i n g by that experience, collectors have arranged
w h e r e v e r pos s i b l e for g r o u n d - f l o o r b o oths for cashiers and a
o n e - w a y flow of taxpayers to and f r o m the booths.
The S e c r e t a r y also called a t t e n t i o n to the joint statem e '?t„ 1SSUed o n .p r i day b y C h a i r m a n D o u g h t o n of the House Ways
and Means Committee and Cha i r m a n George of the Senate Finance
Committee, the l e g i s l a t i v e groups that c o n s i d e r tax measures.
They said:
The committees h a v i n g to do w i t h tax l e g i s l a t i o n have
b ® en a d v d s e d that reports are coming from, ove r the country to
the effect that a change will be m a d e in the tax law w h i c h
w o uld p r e c l u d e the n e c e s s i t y of filing the 1942 r e t u r n due on
M a r c h 15, 1943.
This a s s u m p t i o n on the part of a ny ta x p a y e r that he will
not be r e q uired to file his 1942 r e t u r n on M a r c h 15, 1943, is
erroneous.
Inwall cases, that r e t u r n will have to be filed and
at least the first q u a r t e r p a y ment will have to be paid.
Those f i ling early returns will be in no d a n g e r of b e i n g
penalized.
W h a t e v e r d e c i s i o n m a y be made as to future tax
l e g i s l a t i o n will not affect that t a x p a y e r ’s o b l i g a t i o n to file
his 1942 retu r n as usual and p ay his t a x . ”
-oOo
Press Service
FOR RELEASE, MORNING NEWSPAPERS
Tuesday, January 19. 1943.
The Secretary of the Treasury announced last evening that the tenders for 1700,000,00»
or thereabouts, of 91-day Treasury bills to be dated January 20 and to mature April 21,
IIP
6
1943, which were offered on January 15, 1943, were opened at the Federal Reserve Banks on
(M1w
January IS.
I os1
The details of this issue are as follows:
fei
*
Total applied for - #1,306,648,000
Total accepted
701,511,000
fota’
foia'
Range of accepted bids:
m
High
Low
Average price
- 99.940 Equivalent rate of discount approx. 0.237$ per annum
- 99.906
»
»
»
«
»
0.372$ «
M
- 99.907
tt
n
w
»
«
0.366$ M
11
(24 percent of the amount bid for at the low price was accepted.)
Federal Reserve
District
Total
Applied For
Boston
New Tork
Philadelphia
Cleveland
Richmond
Atlanta
Chicago
St. Louis
Minneapolis
Kansas City
Dallas
San Francisco
$
TOTAL
Total
Accepted
23 ,200,000
834,872,000
38,281,000
42,131,000
34,345,000
17,965,000
162,493,000
21,315,000
11,695,000
32,580,000
19,030,000
68.7U..OOO
• 15,689,000
311,909,000
24,128,000
32,273,000
33,358,000
14,930,000
139,077,000
19,226,000
11,650,000
31,437,000
18,421,000
49.U3.000
#1,306,648,000
#701,511,000
Ei$
i?
los
«rie
nerce:
Istrici
Iste
ilo r'î
IpSß'jSTifS
«WA
l ik i s
isseapo]
issCi
111
T R E A S U R Y DEPA R T M E N T
Washington
Press Service
No. 35-4
jrWB. uj ^ u EASE, M O R N I N G NEWSPAPERS,
Tuesday, January 19? 1 9 4 3 * _____
T he S e c r e t a r y of the T r e a s u r y a n n o u n c e d last
tenders f or $700,000,000,.
or thereabouts,
of 9 1 - d a y T r e a s u r y bills
to be dated Ja n u a r y 20 a nd to m a t u r e A p r i l 21,
offered on J a n u a r y 15,
Banks
1943,
evening that the
1943,
w h i c h w ere
w e r e o p e n e d at t he Federal R e s e r v e
on J a n uary 18,
T he details of this
issue a re as follows!
T o t a l a p p l i e d for - $ 1 , 3 0 6 , 6 4 8 , 0 0 0
Total accepted
701,511,000
R a n g e of a c c e p t e d bids:
9 9 .940 Equivalent fc rate of discount approx,
low
99.906
!»
I!
!»
«
Average
price
99> 907
n
!»
!»
11
(24
percent
«
'
0*237$ P er
annum
0-,372$ per
annum
0.366$
tf
p er
annum
of the a m o u n t b id for at the l o w price was accepted,)
10 bciJL
Federal R e s e r v e
District
A p p l i e d For
$
Boston
Ne w Y o r k
Philadelphia
Cleveland
Richmond
Atlanta
Chicago
S t , Louis
Minneapolis
Kansas C i t y
Dallas
San Francisco
TOTAL
23 ,2-00,000
834,872,000
38,281,000
42,131,000
34,345,000
17,965,000
162,493,000
2 1 ,315,000
11,695,000
32 ,580,000
19 ,030,000
68,741,000
$1,306,648,000
oOo-
r
pU
A*udl
fn1
J.
Accepted
$
1 5 ,689,000
3 11,909,000
.24 ,128,000
32, 2 7 3 , 0 0 0
3 3 , 3 58,000
1 4 , 9 30,000
139,077,000
19 ,226,000
1 1 ,650,-000
31 ,437^,000
18 ,421,000
49 ,413,000
$ 701 ,511,000
-
QUESTION:
u -
Is the amount paid to the beneficiary of a deceased
officer or enlisted man representing six months’
pay, known as "gratuity pay” , taxable income to
the beneficiary?
ANSWER:
No.
This amount represents a gift by the United
States and need not be included in income.
/
- 3 -
ANSWER:
The entire amount of the family allowance is exempt
from tax on the part of the beneficiary.
A portion
is contributed by the Government and part is withheld
from the pay of the enlisted man.
The portion con
tributed by the Government is considered to be a gift
and the amount withheld from the pay of the enlisted
man is part of his taxable income.
QUESTION:
Is the pay allotted by the personnel of the armed forces
to designated beneficiaries taxable to the beneficiaries?
ANSWER:
No.
The amount allotted is taxable income to the person
making the allotment.
QUESTION:
Is any part of the pay received in the year 1942 by the
personnel of the armed forces for active service during
the present war exempt from Federal income tax?
ANSWER:
Yes.
If the person is not a commissioned officer and
then only to the following extent —
the person must
be a member of the military or naval forces of the
United States below the grade of commissioned officer
on December 31, 1942, in which event he should not in
clude in gross income the first $ 250.00 if he were single
on such date or the first # 300.00 if married or the head
of a family on such date.
These exclusions from gross
income are in addition to the personal exemption of
$ 500.00 allowed single persons and $1,200.00 allowed
married persons.
-
2
-
otherwise be due, is serving on sea duty or out
side the United States, the collection of the tax
is postponed until the fifteenth day of the third
month (approximately 75 days) following the end of
the month in which the individual ceases to be in
such service outside the United States or ceases
to be on sea duty.
In such cases it will be un
necessary to establish inability to pay the tax.
QUESTION:
Are members of the armed forces serving outside the
United States required to file their income tax
returns on March 15, 1943?
ANSWER:
The due date for the filing of income tax returns is
postponed in the case of any person in the military
or naval forces of the United States, who at the
time the return would otherwise be due, is serving
on sea duty or outside the United States.
The term
"United States" means the States and the District of
Columbia.
The time within which a return may be filed
in such cases is the fifteenth day of the third moniih
(approximately 75 days) following the end of the month
in which the individual ceases to be in such service
outside the United States or ceases to be on sea duty.
QUESTION:
Is the family allowance made to the dependents of the
members of the armed forces of the United States exempt
from Federal income tax?
TREASURY DEPARTMENT
Bureau of Internal Revenue
Washington
Press Service
No. ^ JrS S ~
FOR IMuIEDIATE RELEASE^
Commissioner of Internal Revenue Guy T. Helvering said today
that certain questions have arisen with regard to the Federal
income tax liability for the year 1942 of the personnel of the
armed forces of the United States.
The questions and answers
thereto are as follows:
QUESTION:
When may the payment of income tax be postponed
by reason of a person being in the armed forces
of the United States?
ANSWER:
If such a person is serving in the United States,
the collection of the tax (whether the tax falls
due prior to or during his period of military
service) is deferred without interest for a
period up to six months after the termination of
his military service if he establishes by a state
ment of his financial condition filed with the
collector of internal revenue that his ability to
pay is materially impaired on account of such
service.
The form of statement may be obtained
from the collector.
In the case of a person in the military forces
of the United States, who at the time the tax would
TREASURY DEPARTMENT
Bureau of Internal Revenue
Washington
FOR IMMEDIATE RELEASE
Wednesday, January 20, 1943*
Press Service
No 4 35-5
Commissioner of Internal Eevenue Guy T. Helvering said today
that certain questions have arisen with regard to the Federal
income tax liability for the year
armed forces of the United States.
1942
of the personnel of the
The questions and answers thereto
Are as follows:
QUESTION:
When may the payment of income tax be postponed
by reason of a person being in the armed forces
of the United States?
I
Answer:
If s#ch a person is serving in the United States,
the collection of the tax (whether the tax falls
due prior to or during his period of military
service) is deferred without interest for a period
up to six months after the termination of his
military service if he establishes by a states
ment of his financial condition filed with the
collector of internal revenue that his ability to
pay is materially impaired on account of such
service* The form of statement may be obtained
from the collector*
In the case of a person in the military forces
of the^United States, who at the time the tax would
otherwise be due, is serving on sea duty or outside
the United States, the collection of the tax is
postponed until the fifteenth day of the third
month (approximately 75 days) following.the end of
the month^in which the individual ceases to be in
such service outside the United States or ceases
to be on sea duty* In such cases it will be un-rnecessary to establish inability to pay the tax*
QUESTION:
Are members of the armed forces serving outside the
United States required to file their income tax
returns on March 15,. 1943?
ANSWER:
The due date for the filing of income tax returns is
postponed in the case of any person in the military
or naval forces of the United States, who at the
2
time the return would otherwise be due, is serving
on sea duty or outside the United States* Ihe term
’•United States” means the States and the District of
Columbia* Hie time within which a return may be filed
in such cases is the fifteenth day of the third month
(approximately 75 days) following the end of the month
in which the. individual ceases to be in such service
outside the United States or ceases to be on sea duty*
QUESTION:
Is the family allowance made to the dependents of the
members of the armed forces of the United States exempt
from Federal income tax?
ANSWER:
The entire amount of the family allowance is exempt
from tax on the part of the beneficiary* A portion
is contributed by the Government and part is withheld
from the pay of the enlisted man. The portion con
tributed by the Government is considered to be a gift
and the amount withheld from the pay of the enlisted
man is part of his taxable income*
QUESTION?
Is the pay allotted by the personnel of tho armed forces
to designated beneficiaries taxable to the beneficiaries?
ANSWER:
No* The amount allotted is taxable income to the person
making the allotment*
QUESTION:
Is any part of the pay received in the year 194.2 by the
personnel of the armed forces for active service during
the present war exempt from Federal income tax?
ANSWER:
Yes* If the person is not a commissioned officer and
then only to the following extent — the person must
be a member of the military or naval forces of the
United States below the grade of commissioned officer
on December 31, 194-2, in which event he should not in
clude in gross income the first $250*00 if he were single
on such date or the first $300*00 if'married or the head
of a family on such dat£* These exclusions from gross
income are in addition to the personal exemption of
$ 500.00 allowed single persons and $1 ,200*00 allowed
married persons*
QUESTION i
Is the amount paid to the beneficiary of a deceased
officer or enlisted man representing.six months’
pay, known as ’’gratuity pay”, taxable income t© the
beneficiary?
ANSWER?
No. This amount represents a gift by the United States
and need not be included in income*
ooOoo-
\
TREASURY DEPARTEMENT
Bureau of Internal Revenue
Washington
Press Service
Ho.
3
Commissioner of Internal Revenue Guy T. Helvering said today
that inquiries have heen received "by the Bureau concerning the
deductibility from gross income of investments in German Interna
tional Bonds on which no interest has been paid since June 1, 1941.
Mr. Helvering said that the Bureau had ruled that for Federal
income tax purposes the bonds became worthless in the year 1941,
and in accordance with section 23(k) and section 117(b) of the
Internal Revenue Code, the resulting loss is considered as a loss
from the sale or exchange* on the last day of such taxable year, of
capital assets.i^The events establishing the worthlessness in 1941
were the declarations of war between the United States and Germany,
the default of interest payments, and the disappearance of a public
market for the bonds.
If the owner of such bonds failed to claim
the deduction in his income tax return for 1941, resulting in an
overpayment of his income tax for that year, he should file a claim
for refund with the collector of internal revenue for the district
in which he filed his return for 1941.
TREASURY DEPARTMENT
B u r e a u of Internal Revenue
Washington
FOR RELEASE, M O R N I N G N EWSPAPERS,
Thursday, Ja n u a r y 21, 1943,
1- 2 0 - 4 3
C o m m i s s i o n e r of Internal
Press Service
No. 35-6
Revenue Guy T. H e l v e r i n g said
today that inquiries have b e e n re c e i v e d by the B u r e a u c o n c e r n
ing the d e d u c t i b i l i t y f r o m gross
income o f i nvestments
in
G e r m a n I n ternational Bonds on w h i c h no interest has b e e n paid
since June 1, 1941,
Mr. H e l v e r i n g said that the B u r e a u h a d ruled that for
Federal income tax p u r p o s e s the b o n d s b e came w o r t h l e s s in the
y e a r 1941, and in acc o r d a n c e w i t h s e ction 23(k) and section
117(b) of the Internal Revenue Code, the r e s u lting loss is
c o n s i d e r e d as a loss f r o m the sale or exchange, on the last
day of such taxable year, of capital assets,
The events e s t a b l i s h i n g the w o r t h l e s s n e s s in 1941 were
the decla r a t i o n s of w a r b e t w e e n the U n i t e d States and Germany,
the de f a u l t of interest payments, and the di s a p p e a r a n c e of a
public m a r k e t for the bonds.
If the o w n e r of such bonds failed
to claim the d e d u c t i o n in his income tax r e t u r n for 1941, r e
sulting in an o v e r p a y m e n t of his income tax for that year, he
should file a claim f or refund w i t h the c o l l e c t o r of internal
revenue for the district in w h i c h he filed his r e turn for 1941.
FCR IMMEDIATE RELEASE
January 19a 19ii3* ?
The Bureau of Customs announced today preliminary figures showing the quantities
of coffee authorized for entry for consumption under the quotas for the twelve months
commencing October 1, 19U2, provided for in the Inter-American Coffee Agreement,
proclaimed b y the President on April
Country of
Production
19U1, as follows:
*
* Quota Quantity
* (Pounds) 1 /
*
"
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, Yemen, and Saudi
Arabia
)
Other countries not signa- )
tories of the Inter)
American Coffee Agreement)
V
V~>,
1 ,5 3 5 ,3 6 7 ,0 8 3
5 2 0 , 0 8 1 « ,6 2 9
3 3 ,0 1 9 ,2 6 1 *
1 3 ,2 1 2 ,9 1 7
1 7 ,5 3 3 ,7 1 3
2 1 * ,7 6 7 ,0 9 1 *
9 9 ,6 8 0 ,2 8 1 *
8 8 ,3 3 1 * ,1*1*2
1 * 5 ,1 * 0 0 ,2 9 8
3
Authorized for entry
:
for consumption
*
*
(Pounds)
: As of (Date)
Jan. 9 , 191*3
1 7 2 ,1 * 0 7 ,6 1 * 1
ft
If
ft
It
ft
ft
If
ft
1 3 2 ,7 8 9 ,9 7 3
2 ,1 * 7 7 ,9 7 5
6 ,0 6 1 * ,9 3 2
5 ,1 7 3 ,5 5 5
6 ,8 8 2 ,7 3 0
3 2 ,1 * 6 2 ,5 1 5
1 * ,1 2 7 ,2 7 6
6 1 ,2 5 1 * , 1 0 6
ft
ft
ft
If
tf
5 1 ,6 5 3 ,7 7 8
If
2 ,9 0 8 ,6 1 7
7 8 ,7 5 8 ,0 5 6
Quotas revised*
—oOo'
8 ,7 1 * 0 ,3 7 5
1 0 ,8 0 3 ,0 1 5
1 9 ,6 1 * 9 ,3 5 2
9 9 1 ,3 2 7
6 ,6 3 0 ,0 5 6
1 0 1 ,2 1 9
2
1 1 * ,8 1 6 ,2 1 5
1 7 ,9 2 7 ,9 0 7
TREASURY DEPARTMENT
Washington
EOR IMMEDIATE RELEASE,
Wednesday, Januaiy 20, 1943.
"
Press Service
' "J r 1 ' 0' ■"“'r'■V"
WO«- 3&**7
Ihe Bureau of Customs announced today preliminary figures showing the
quantities of coffee authorised for entry for consumption under the quotas
for the twelve months commencing October 1, 1942, provided for in the Intertaerican Coffee Agreement, proclaimed by the President on April 15, 1941, as
follows?
Countpy of
Production
*
?
: Quota Quantity ?
? (Pounds) 1/ ?
Signâtoiy Countries?
Brazil
Colombia
Costa Rica
Cuba
Dominican Republic
Ecuador
El Salvador
Guatemala
Haiti
Honduras
Mexico
Nicaragua
Peru
Venezuela
Non-signatory Countries:
British Thipire, except
Aden and Canada
Kingdom of the Netherlands
and its possessions
Aden, Yemen, and Saudi
Arabia
Other countries not signal
tories of the Inter-*
American Coffee Agreement
1/
1,535,367,083
520,084,629
33,019,264
13,212,917
17r533*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.
~o0o**
Authorized for entiy
for consumption
of (Ifete)
i
(Pounds)
Jan. 9, 1943
it
it
tr
it
it
w
n
»
«
it
«
it
it
172,407,641
132,789,973
2,477,975
6*064,932
5,173,555
6,882,730
8*740*375
10,803,015
19,649,352
991,327
6*630,056
101,219
2
14,816,216
17,927,907
basis, to ha publicly announced.
Allotment notice# will ba sant out
promptly upon
allotment.
IV.
I.
fatmekt
Payment at par and accrued intarast, if any, for certificates allotted
ha rounder mist ba made or completed
allotment.
on
or before February I, 1943#
oja later
In every case where payment ia not so completed, the payment with
application-up to 2 percent of the amount of certificates applied for shall, upon
declaration made by the Secretary of the Treasury in hie discretion, be forfeited
to the United States.
Treasury Certificates of Indebtedness of Series A-1943,
maturing February 1, 1943, will be accepted at par in payment for any certificates
of the series now offered whioh shall be allotted.
v.
1.
m n m k t provisions
Ae fiscal agents of the United States, Federal Reserve hanks are author«
lzed 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 Re
serve Banks of the respective districts, to issue allotment notices, to receive
payment for certificates allotted, to make delivery of certificates on full-paid
subscriptions allotted, and they may issue interim receipt# pending delivery of
the definitive certificates.
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 Reeerve Banks.
D. W. BKXX,
Acting Secretary of the Treasury.
2
4.
j
Dearer certificated with two interest coupon* attached will be issued in
denominations of $1,000, #5,000, #10,000, 1100,000 and #1,000,000,
The certificat«
t
'111 I
will net be issued in registered form.
5,
The certificates will be subject to the general regulations of the
Treasury Department, now or hereafter prescribed, governing United States certifia
ill
cates*
HI.
1*
SUBSCRIPTION AND AUimffiNT
Subscriptions will be received at the federal Reserve Besiks and Branches
•nd at the Treasury Department, Washington.
Subacribera mist agree not to sell
or otherwise dispose of their subscriptions, or of the securities which may b#
allotted thereon, prior to the closing of the subscription books.
Banking insti
tutions 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 official agencies.
Others then banking institutions and
securities dealer# will not be penaitted to enter subscriptions except for their
own account.
Subscriptions from banka and trust companies for their own account
will b# received without deposit.
Subscriptions from all others must be accom
panied b y payment of 2 percent of the amount of certificates applied for.
2.
The Secretary of the Treasury reserves th# right to reject any subecrip-
tion, in whole or in part, to allot lass than the amount of certificate» applied
for, and to close the books as to any or all aubacriptlon# at any time without
noticej and any action he may take in these respecte shall be final.
Subject to
these reservations, subscriptions for amounts up to and including » 0 0 , 0 0 0 from
banka which accept demand depoaits, and subscriptions in any amount from all other
subscribers, will be allotted in full* subscriptions for amounts over » 0 0 , 0 0 0
from banks which accept demand deposits will be allotted on an equal percentage
BHITKD STATES OF-AMERICA
7/6 PERCENT TREASURY CERTIFICATES OF IBDSKPSDRESS OF SERIES A-1944
Due February 1, 1944
Dated and bearing Interest frat February l f 1941
TREASURY DEPARTMENT,
1943
Department Circular Ho* 705
Office of the Secretary,
Washington, January 21, 1943*
Fiscal Service
Bureau of the Public Debt
I.
1*
OFFERING! OF CERTIFICATES
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 of the United States for certificates of indebtedness of the
United States, designated 7/8 percent Treasury Certificates of Indebtedness of
Series A-1944.
The amount of the offering is $2,000,000,000, or thereabouts.
II.
1.
DESCRIPTION OF CERTIFICATES
Ths certificates will be dated February 1, 1943# and will bear interest
from that date at the rat© of 7/8 percent per annua, payable semiannually on
August 1, 1943 and February 1, 1944*
They will mature February 1, 1944# end will
not be subject to call for redemption prior to maturity.
2.
The income derived from the certificates shell be subject to all Federal
taxes, now or hereafter imposed.
The certificates shall be subject to estate,
inheritance, g i f t 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.
3.
The certificates will be acceptable to secure deposits of public moneys»
They will not be acceptable in payment of taxes and will not bear the circulation
privilege.
-
2~
account will be received without deposit« but subscription* fro® all others
aaist be accompanied by payment of 2 percent of the M o u n t of certificates
applied for*
O b j e c t to the usual reservations, subscriptions for amounts not exceeding
$100,000 fro® banks which accept demand deposits, and subscriptions in any aiaount
from*all other subscribers, will be allotted in full! subscriptions for amounts
over 1100,000 from banks which accept demand deposits will be allotted on an
equal percentage basis, to be publicly announced*
Payment for any certificates allotted must be mad* or completed on or
before February 1, 1943, or on later allotment*
As previously announced,
Treasury Certificate® of Indebtedness of Series A-1943, which mature February 1,
carry no exchange privileges, but such maturing certificats* will be accepted
at par in payment for any certificates ©f the series now offsrsd which may be
allotted«
The text of the official circular follow«!
fÜSÜÜT
nmm m m
'V"
Washington
Pres» ¿Service
TOR RRLSASS, MOSUfUC ¡ » P A P E R S
Thuraday. January 21. I9/.3.____
J^t>, H ' - f
The Secretary of the Treasury today announced the offer!ng§ through the
11 i
W
Federal fteserve Banks t for cash subscription at par and accrued Interest, of
ill #2,000,000,000, or thereabouts, of 7/8 percent Treasury Certificat^a/cf In-
-©■
§§§1 debtedneas of Serie* A~1944.
In order to insure widespread participation not
5 only on th« part of banks, but by Corporation» and others who » l b« intereated
in thi» typ« of security, th« subacription Book* «111 roiaain open thr«« öays«
<< y\
Th«r« will toe no reatrieUona a® to th« basla for aubseribing to this issu«,
V \
]
\ Ät th«lr maturity, th« certific&tes will be rede«med in c&ah, and will carry
sVf I \
/K
no axchenge Privileges«
Th« c«rtiflcat«a will ba dated February 1, 1943# "ill be payable on February 1, 1944, and will bear interest at the rate of sev
one percent
per annusa, payable aeidannually on August 1, 1943 and February 1, 1944*
They
will be itimed in bearer for® only, with two interest coupon» attached, in
denoiiinaiio»» of $1,000, $5,000, $10,000, $100,000 and $1,000,000«
Pursuant to the provi®lone of the Public Debt Act of 1941# interest upon
the certificate« now offered shall not have any exemption, as such, under
Federal Tax Acta now or hereafter enacted*
The full provision« relating to
taxability are set forth in the official circular released today«
Subscriptions 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
official agencies.
Subscriptions from banks and trust companies for their own
TREASURY DEPARTMENT
Yiashington
FOR RELEASE, MORNING NEWSPAPERS,
Thursday, January 21, 1943*
Press Servi op
No. 35-8
The Secretary of the Treasury today announced the offering, through the
Federal Reserve Banks, for cash subscription at par and accrued interest, of
$2,000,000,000, or thereabouts, of 7/8 percent Treasury Certificates of
Indebtedness of Series A—194-4« In order to insure widespread participation not
only on the part of banks, but by corporations and others who may be interested
in this type of security, the subscription books will remain open three days*
There will be no restrictions hs to the basis for subscribing to this issue.
At their maturity, the certificates will be redeemed in cash, and will carry
no exchange privileges*
The certificates will be dated February 1 , 1943, will be payable on
February 1 , 1944, and will bear interest at the rate of seven-eighthsobf one
percent per annum, payable semiannually on August 1, 1943 and February 1 , 1944.
They will be -issued in bearer form only, with two interest coupons attached, in
denominationa of $1 ,000, $5,000, $10,000, $100,000 and $1 ,000,000*
Pursuant to the provisions of the Public Debt Act of 1941, interest upon
the certificates now offered shall not have any exemption, as such, under
Federal Tax Acts now or hereafter enacted* The full provisions relating to
taxability are set forth in the official circular released today.
Subscriptions 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
official agencies. Subscriptions from banks and trust companies for their own
account will be received without deposit, but subscriptions from all others
must be accompanied by payment of 2 percent of the amount of certificates
applied for*
Subject to the usual reservations, subscriptions
$100,000 from banks which accept demand deposits, and
from all other subscribers, will be allotted in full;
over $100,000 from banks which accept demand deposits
equal percentage basis, to be publicly announced.
for amounts not exceeding
subscriptions in any amount
subscriptions for amounts
will be allotted on an
Payment for any certificates allotted must be made -or completed on or
before February 1 , 1943, or on later allotment. As previously announced,
Treasury Certificates of Indebtedness of Series A--1943, which mature
February 1 , carry no exchange privileges, but such maturing certificates will
be accepted at par in payment for any certificates of the series now offered
which may be allotted*
The text of the official circular follows:
UNITED STATES OF AMERICA
7/8 PERCENT TREASURE CERTIFICATES OF INDEBTEDNESS OF SERIES A-1944
Dated and bearing interest from February 1, 1943
1943
Department Circular No* 705
Due February 1, 1944
TREASURY DEPARTMENT,
Office of the Secretary,
Washington, January 21, 1943«
Fiscal Service
Bureau of the Public Debt
I*
1 . The Secretary of the
Liberty Bond Act, as amended,
from the people of the United
United States, designated 7/8
Series A—1944» The amount of
II.
OFFERING OF CERTIFICATES
Treasury, pursuant to the authority of the Second
invites subscriptions, at pair and accrued interest,
States for certificates of indebtedness of the
percent Treasury Certificates of Indebtedness of
the offering is 42,000,000,000, or thereabouts*
DESCRIPTIONS OF CERTIFICATES
1* The certificates Twill be dated February 1, 1943* add will bear interest
from that date at the rate of 7/8 percent per annum, payable semiannually on
August 1, 1943 and February 1, 1944* They will mature February 1, 1944* and will
not be subject to call for redemption prior to maturity*
2* The income derived from the certificates shall be subject to all Federal
taxes, now or hereafter imposed* The certificates 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*
3* The certificates will be acceptable to secure deposits of public moneys*
They will not be acceptable in payment of taxes and will not bear the circulation
privilege.
4* Bearer certificates with two interest coupons attached will be issued in
denominations of 41*000, 45*000, $10*000, 4100,4)00 and 41*000,000. The certifi
cates will not be issued in registered form.
5* The certificates vo.ll be subject to the general regulations of the
Treasury Department, now or hereafter prescribed, governing United States
certificates.
III.
SUBSCRIPTION AND ALLOTMENT
1. Subscriptions will be received at the Federal Reserve Banks and
Branches and at the Treasury Department, Washington* Subscribers must agree
not to tell or otherwise dispose of their subscriptions, or of the securities
which may be allotted thereon, prior to the closing of the subscription books*
-
2-
< w k= 8 inft:L^ut;L0”s 311(1 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 official agencies. Others than banking
institutions and securities dealers will not be permitted to enter sub§
thSir 0W1 aooount* Subscriptions from banks and trust
companies for their own account will be received without deposit. SubT r ® fr°“ 311 others must be accompanied by payment of 2 percent of the
amount of certificates applied for*
. .
2!
.^
Secretary of the Treasury reserves the right to reject any
appliedPforn,airi to ? °r tK
t0 31101 leSS than the amount of certificates
iof? and
close the books as to any or all subscriptions at any time •
without notices and any action he may take in these respects shall be final.
flnm'1 * 5 thSuS fes®ryrtions, subscriptions for amounts up to andincluding
from banks which accept demand deposits, and subscriptions in any
amount from all other subscribers, will be allotted in full: subscriptions for
^ ^ ^ a u i r n ^100^ 00 flom.hanks ^hich accept demand deposits will be allotted
hP ¡ L q l Percentage basis, to be publicly announced. Allotment notices will
be sent out promptly upon allotment.
IV.
PAYMENT
hprp1mripr.P^yni+ni! at
and accrUiijd interest, if any, for certificates allotted
hereunder must be made or completed on or before February 1 , 1943, or on later
allotment. In every case where payment is not so completed, the payment with
application up to 2 percent of the amount of certificates applied for shall,
upon declaration made by the Secretary of the Treasury in his discretion, be
forfeited to the United States. Treasury Certificates of Indebtedness of
, ^ ieS
February 1 , 1943, m i l be accepted at par in payment for
any certificates of the series now offered which shall be allotted.
V.
GENERAL PROVISIONS
^dscad' a6 ents
the United States, Federal Reserve Banks 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 certificates allotted, to make delivery of certificates on full-paid
^-k^ted, and they may issue interim receipts pending delivery of
the definitive certificates.
*
2.
The Secretary of the Treasury may at any time, or from time to time,
prescribe supplemental or amendatory rules and regulations governing the offering,
which will be communicated promptly to the Federal Reserve Banks.
?
D. V¡m BELL,
Acting Secretary of the Treasury.
- 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 Reserve Bank or Branch*
-
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 — January
V i k a ----- --iftà
The income derived from Treasury bills, whether interest or gain
21 r
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
m
TREASURY DEPARTMENT
Washington
EOR RELEASE, MORNING NEWSPAPERS,,
Friday. January 22. 1943----
&afc
The Secretary of the treasury, hy this public notice, invites tenders
for fe 700,000.000
,,
T. 4._ ^4?
or thereabouts, of
on -dav Treasury "bills, to "be issued
VL- Y
on a discount basis under competitive bidding.
he dated
The M i l s of this series will
April 28«_JJ£43-
January 27. 1943---- . and will mature
jilin»
±Si
vt
h n j * khfiyHbt
when the face amount will be payable without in
.
^hey will be issued in
W
ÜlOjCOOi.
. , .
r. ftj-i non
000 $ 1 0 .0 0 0 , $ 1 0 0 ,0 0 0 ,
hearer form only, and in denominations of »1,000, «5,000, *iu,
,
$500,000, and »1 ,000,000 (maturity value).
Tenders will he received at Federal Reserve Banks and Branches up to the
closing hour, two o'clock p. m., Bastern i S a x *
time, Monday. January 25. 1942 ^
Tenders will not he received at the Treasury Department, Washington.
Each tender
must he for an even multiple of »1 ,000, and the price offered must he expressed
on the basis of 100, with not more than three decimals, e. g., 99.925.
may not he used.
Fractions
It is urged that tenders he made on the printed forms and for
warded in the special envelopes which will oe supplied hy Federal Reserve
a
i
or Branches on application therefor.
Tenders will he received without deposit from incorporated hanks and
trust companies and from responsible and recognized dealers in investment securi
ties.
Tenders from others must he accompanied hy payment of 2 percent of th
face amount of Treasury hills applied for, unless the tenders are accompanied hy.
an express guaranty of payment hy an incorporated hank or trust company.
Immediately after the closing hour, tenders will he opened at the Feder,
T R E A S U R Y DEPARTMENT,
Washington
.‘
POR RELEASE, MORNING NEWSPAPERS
■ . Priday,. .January 22, .1943¿
1 / 2V 43
‘The Secretary "of the Treasury,
vites tenders for $.700,000,000,
1
—
by this public notice, in
or thereabouts, of
91-day
Treas
ury bills, to be issued on a discount basis under competitive
bidding.
The bills of this series will be dated January 27, 1943,
and will mature April 28, 1943? when the face amount will be pay
able 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 1 0 the closing hour, two o ’clock, p* m., Eastern War
time,- Monday, January 25,-• 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 ex
pressed on 'the basis of <100, 'with not more- than three decimals*
.e- |4\ 99*925.
fractions may not be used;. It is urged that ten
ders 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 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 his action
in any sucn resj)ect 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
January 27, 1943*
35-9
(O v e r )
«'*„•** -J «.
' 1 -P 7- V¿
% ~
-
’ ■•
.bills, whether interest or
g ain f r o m t he sale or o t her d i s p o s i t i o n of t h e bills, shall not I
hav e a n y exemption, as such, a n d los s f r o m t h e sale or other dis- |
p o s i t i o n >of T r e a s u r y b i lls s h all -not h a v e . a n y s p e c i a l treatment,
as*'súch,' u n d e r F e d e r a l t a x A c t s h o w or h e r e a f t e r enacted.
The■
{3i l l s s h a l l be subject to- estate, inheritance^ gift, or other ex-!
cisé 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 I
■ States, or. by any .local taxing authority.
For-purposes, of taxa- !
tioh the amount of discount at which Treasury bills aré origin
a l l y 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
i! of discount at which bills issued hereunder are sold shall not be
considered to accrue un^il such .bills shall be sold, redeemed.-,or
othefwísá disposed’of, and such* bills are excluded from consider
ation as capital assets.
Accordingly, the owner of .Treasurybills (other than life insurance companies) issued hereunder need I
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
ordinary gain on loss.
, p. /‘V- •'•CDrpa.sury. D e p a r t m e n t C i r c u l a r lío, 418, as amended* anc|- this
notice, p r e s c r i b e t h e terms,,-of t h e T r e a s u r y b i l l s and..govern/the
conditions' of. t h e i r issue.
C o p i e s o f th e c i r c u l a r may be o b
t a i n e d from a n y F e d e r a l R e s e r v e R a n k or •Branch.
; . > p ,
TREASURY DfiPARTMKIfT
Washington
Presa Service
POR RELEASE, HORMBìG HPfSPAPSRS,
1 '*
January 22, 1943,------
3 r - / o
The Secretary of the Treasury announced last night that the sub
scription books for the current offering of 7/8 percent Treasury Certifi
cates of Indebtedness of Series A-1944 will close at the close of business
tomorrow, January 23*
Subscriptions addressed to a Federal Reserve Bank or Branch, or to
the Treasury Department, and placed in the m i l
before 12 o *clock mid
night, Saturday, January 23, will be considered as having been entered
before the close of the subscription books*
Announcement of the amount of subscriptions and the basis of allot
ment will probably be made on Tuesday, January 26*
TREASURY DEPARTMENT
Washington
FOR RELEASE, M O R N I N G NEWSPAPERS,
Friday, January 2R, 1943 .
1 / 21/43
P r ess Se r v i c e
No. 35-10
I
T h e S e c r e t a r y of t he T r e a s u r y a n n o u n c e d last night
that th e s u b s c r i p t i o n books f or the current offering of
percent Treasury Certificates
of I ndebtedness
7/8
of,Series
A--1944 will close at the close of business tomorrow, January
23.
S u b s c r i p t i o n s a d d r e s s e d to a F e d e r a l R e s e r v e B a n k or
Branch,
or to t he T r e a s u r y Department,
m a i l b e f o r e 12 o * c l o c k midnight,
be c o n s i d e r e d as h a v i n g been
a n d p l a c e d in the
Saturday,
J a n u a r y 23, w i l l
entered b e f o r e t h e close of
t h e s u b s c r i p t i o n books..
A n n o u n c e m e n t of t he amount
basis
of su b s c r i p t i o n s a nd t he
of a l l o t m e n t w i l l p r o b a b l y be mad e on Tuesday,
26 ^
oOo-i*
January
TRjgASUR? fiSPA B SU SI?
BSBSUS
XI^IEUL BETOIUB
IMBXSKSMI
. JOB. XUslRDI^TB M M M M
Fr©s® S e rv ice
H o. 3 f - / /
, %*+*****!
Coprdesiocer of Internal B w
J
m
Guy T. Belvering ruled today that
wag* and salary adjustments retroactive to established payroll psrioda
wtdod prior to Jnmicry
1 , 1943.
er* not subject to the withholding pro
vision* of f e e Victory tax » h e « such adjustments sere not peid until
1943 because of consideration by the national ter Labor Boerd/or by the
Comlsaioner of Internal Sevomi®, under the authority of the regulations
issued by th® Economic Stabilisation Director*
9*-
j
could not b e m d o until the issuance of m order of
‘#
^
approval by the ter Labor Board or fee Gaasieeionor of Internal Kevsnue
end the required order was not
fortfaeosing until 1943»
TREASOHÏ DEPABTMT
BOïés# OP I0 M Ê & L REVENUE
FOR IMMEDIATE RELEASE
Press Service
NO. ? r V /
Commissioner of Internal Revenue Guy T* Helvering ruled today that
wage and salary adjustments retroactive to established payroll periods
ended prior to January lj 1943»
not subject to the withholding pro
visions of the Victory tax where such adjustments were not paid until
1943 because of consideration by the National War Labor BoarcJ^ or by the
Commissioner of Internal Revenue, under the authority of the regulations
issued bv the Economic Stabilization Director*
^ ^ ^ ^ ^ ^ ^ T S S n V s ^ c o i l d not be made until the issuance of an order of
A
approval by the War Labor Board or the Commissioner of Internal Revenue,
6
i
0
T R E A S U R Y DEP A R T M E N T
B u r e a u of Infernal R e v e n u e
Washington
POR i m i E D I A l B RELEASE,
Saturday, J a nuary 23,
Press Service
,I o . 35-11
194.5 .
C o m m i s s i o n e r of In t e r n a l R e v e n u e G u y T . Hel v e r i n g r u l e d
t o d a y that w age a n d s a l a r y a d j u s t m e n t s r e t r o a c t i v e to e s t a b
l i s h e d p a y r o l l periods
ended p r i o r to J a n uary
not subject to t he w i t h h o l d i n g p r o v i s i o n s
w h e r e suc h a d j u s t m e n t s w e r e not, p a i d u n t i l
'.consideration by t he
Rational
of t he V i c t o r y tax
1943
because of
u n d e r the a u t h o r i t y of the
issu e d by the E c o n o m i c S t a b i l i z a t i o n
In these cases p a y m e n t s
are'
W a r Labor Board or by the C o m
m i s s i o n e r of I n t ernal Revenue,
regulations
1 , 1943 ,
Director»'
could not be m a d e until the i s
s uance of an o r d e r of a p p r o v a l by thè W a r L a b o r Board or. the
C o m m i s s i o n e r of Inter n a l R e v e n u e a n d t h e r e q u i r e d order w a s 1
not f o r t h c o m i n g ,until
1943 ,.
-0 O 0 -
— --- ---- —---------------<*»----- *%mmm--- — ..... ......... .. --------.INSOLVENT NATIONAL BANKS LIQUIDATED AND FINALLY CLOSED
_________ DURING THE MONTH OF DECEMBER, 1942__________ .
_________ - *■...
Percent
Dividends
Declared
to all
Claimants
Nflmfi and Location of Bank
Date of
Failure
Total
Disbursements
to Creditors
Including
Offsets Allowed
Washington Park NB
Chicago, Illinois
6-9-31
| 5,641,807
71.22
1,600,993
83.87
Ozone Park NB
New York, N.Y.
V
10-30-34-
$
2/
•**"
Capital
Stock at
Date of
Failure
Cash, Assets
Uncollected Stock
Assessments, etc.
Returned to
Shareholders
600,000
t
-0-
200,000
-0-
200,000
-0-
Nat*l Bk of Ridgewood in
New York, N.Y.
7-12-37
69,4-00
First Nat*l Bank
Clarion, Penna.
1/
4.-16-34
1,341,692
87.2
2/
100,000
-0-
Second Natfl Bk
Erie, Penna,
1/
8-13-34
7,459,931
67.45
2/
500,000
-0-
5-15-31
2,14-5,128
50.77
500,000
-0-
Overbrook NB
Philadelphia, Penna •
17.58
1 / Formerly in conservatorship
2 / Including Dividends paid thru or by purchasing bank
2J
Receiver appointed to levy and collect stock assessment covering deficiency in
value of assets sold, or to complete unfinished liquidation
TREASURY DEPARTMENT
Comptroller of the Currency
Washington
X
PRESS SERVICE
LEASE, MORNING NEWSPAPERS
3
o-"/
0_
During the month of December, 1942, the liquidation of
six 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 six receiverships, amounted
to $1 8 ,258 ,9 5 1 , while dividends paid to unsecured creditors amounted
to an average of 69*43 percent of their claims*
liquidation of these receiverships averaged
Total costs of
8*42 percent of total
collections from all sources, including offsets allowed.
Dividend distributions to all creditors of all active
receiverships during the month of December, amounted to |1,189,247.
Data as to results of liquidation of the receiverships finally
closed during the month are as follows:
TREASURY DEPARTMENT
C o m p t r o l l e r of the C u r r e n c y
Washington
FO R RELEASE, M O R N I N G NEWS P A P E R S ,
Sunday, J a n u a r y 24 , 1943*
Press Service
No. 33-12
During the month of December, 1942, the liquidation of
six insolvent national banks was completed, and the affairs
of such receiverships finally closed.
Total disbursements,
including offsets allowed, to de-
positors and other creditors of these six receiverships,
amounted to $18,2.38,951, while dividends paid to unsecured
creditors amounted to an average of 69*43 percent of their
claims*
Total costs of liquidation of these receiverships
averaged 8*42 percent of total collections from all sources,
including offsets allowed.
Dividend distributions to all creditors of all active r e
ceiverships during the month of December, amounted to
$1,189,247#
Data as to results of liquidation of the r e
ceiverships finally closed during the month are as follows:
Date of
Failure
Washington Park NB
Chicago, Illinois
6-9-31
$ 5,62+1*807
0 zone Park NB
New York, N.Y.
IO-3O-32+
i f
Percent
Dividends
Declared
to all
Claimants
71.22
1 ,600,993
$
Capital
Stock at
Date of
Failure
Cash, Assets
Uncollected Stock
Assessments, etc.
Returned to
Shareholders
600*000
011
Name and Location of Bank
Total
Disbursements
to Creditors
Including
Offsets Allowed
<&■
INSOLVENT NATIONAL BANKS LIQUIDATE® AND FINALLY CLOSED
DURING THE MONTH OE DECEMBER, 19*+2___________
S3,87 2/
200,000
-0-
17*5«
200,000
-0-
Nat1! Bk of Ridgewood in
New York, N. Y, j/
7-12-37
69,1*00
First Nat1 1 Bank
Clarion, Penna, i
f
2+-16-32+
1 ,31*1,692
87,2 2/
100,000
-0-
i f
8- 13-31*
7.^59.931
67.1*5
2/
500,000
-0-
5- 15-31
2,12+5*128
5O .77
500,000
-0-
Second Nat1! Bk
Erie, Penna,
Overbrook NB
Philadelphia,, Penna,
i f
2 f
J>/
Formerly in conservatorship
Including Dividends paid thru or by purchasing bank
Receiver appointed to levy and collect stock assessment covering deficiency in
value of assets sold, or to complete unfinished liquidation
— 0O 0—
"The Chairmen of the Ways and Means Committee and of the Senate
Finance Committee have not, however, limited their contacts with the
Treasury Department to formal hearings.
They have followed consistently
the courteous and practical procedure of conferring informally with
the Secretary of the Treasury and his representatives in advance of
hearings on tax legislation, “ffiiir'Mutually cooperative procedure has
been in effect this year, beginning with consultations between Secretary
Morgenthau and the two Chairmen prior to the organization of the present
Congress and it has been continued in frequent conferences between
Treasury representatives and the Chairmen of the two Committees and the
staff of the Committees.
In the course of these conferences the two
staffs, at the instance of Chairman Doughton, have been studying the
pay-as-you-go problem with the object of expediting the work o T the
Committees.
These studies are near completion.”
-
h On
2
-
the pay-as-you-go principle as applied to the collection of
income taxes the Treasury Department's record is quite clear.
It has
long favored putting income tax payments on a more current basis.
The
need for doing this has become much more acute as the number of tax
payers and the burden of taxes have increased over the last two years.
More than 14 months ago, in November, 1941> Secretary Morgenthau
appeared before the Ways and Means Committee to suggest a plan for
current payment through collection at the source of the major portion
of new taxes to be imposed.
He advanced a similar suggestion at a
public hearing by the Committee in March of 1942#
The Department has
taken the position that any plan proposed must be closely scrutinized
to determine whether it will result in substantial loss of revenue or
inequities as between taxpayers at a time when the need both for great
additional revenues and the greatest possible equity in the tax structure
has been most urgent.
"It is the responsibility of Congress to initiate tax legislation.
The Secretary of the Treasury has the traditional and legal duty to
present upon the request of the proper committees of Congress plans for
levying additional revenue or making changes in the tax structure.
The
Treasury stands ready at all times to present-such plans or to give any
advice or information desired by the committees.
present specific suggestions for
It is prepared to
1943 tax legislation to give effect to
the recommendations contained in the President's Budget Message whenever
they may be requested.
Randolph E. Paul, General Counsel of the Treasury Department,
issued the following statement today;
’’In view of speculative and contradictory stories in the press
on the subject of the Treasury Department’s attitude toward pay-as-you-go
tax legislation by the present Congress, it seems desirable to clarify
the Treasury’s position,
’’I have already informed Chairman Doughton of the Ways and Means
Committee that Secretary Morgenthau has authorized me to state that
the Treasury Department favors early enactment of legislation designed
to put the payment of income taxes on a current or more nearly current
basis.
”The Treasury Department is holding itself ready to respond to
invitation by the Committee at any time either to present its own views
on this subject or to give its advice on any plans devised by the Com
mittee.
The Department has no desire and has expressed no desire to
delay consideration of this subject until general tax legislation can
be formulated.
On the contrary, it believes that many advantages will
accrue from disposal of the pay-as-you-go matter as soon as possible.
’’One of the advantages of such consideration would be to refute
most effectively the entirely baseless rumors that have been circulating
that some form of tax forgiveness would be adopted which would make it
unnecessary for taxpayers to meet their March 15 instalments on tax
liabilities for the calendar year 1942.
Chairman George and Chairman
Doughton have both stated that nothing of the sort is in contemplation.
TREASURY DEPARTMENT
Washington
F O R I M M E D I A T E RELEASE,
Saturday, J a n u a r y 25, 1943.
R a n d o l p h E.
ment»
Paul,
Press Service
No. 35-13
G e n eral Co u n s e l
i s s u e d the f o l l o w i n g s t a t e m e n t
of the T r e a s u r y D e p a r t
today;
"In vie w of s p e c u l a t i v e a n d c o n t r a d i c t o r y stories
in the
p r ess o n the s u b ject of the T r e a s u r y D e p a r t m e n t ’s at t i t u d e
toward pay-as-you-go
it seems d e s i r a b l e
tax l e g i s l a t i o n b y the p r e s e n t Congress,
to c l a r i f y the T r e a s u r y ’s position,
"I hav e a l r e a d y i n f o r m e d C h a i r m a n D o u g h t o n o f the W a y s and
M e a n s C o m m i t t e e that S e c r e t a r y M o r g e n t h a u h as a u t h o r i z e d me to
state that the T r e a s u r y D e p a r t m e n t favors e a r l y e n a c t m e n t o f
l e g i s l a t i o n d e s i g n e d to p ut the p a y m e n t of income taxes on a
current or m o r e n e a r l y c u r r e n t basis.
"The T r e a s u r y D e p a r t m e n t is h o l d i n g i t s e l f r e a d y to r e
spond to i n v i t a t i o n b y the C o m m i t t e e at any time e i t h e r to
p r e s e n t its ow n views on this s u b j e c t o r to giv e its advice on
a n y plans d e v i s e d b y the C ommittee,
T he D e p a r t m e n t has no
desi r e and has e x p r e s s e d no desire to d e l a y c o n s i d e r a t i o n of
this subject u n t i l g e n e r a l tax l e g i s l a t i o n can be formulated.
On the contrary, it b e l i e v e s that m a n y a d v a n t a g e s will accrue
from d i s p o s a l o f the p a y - a s - y o u - g o m a t t e r as soon as possible,
"One o f the a d v a n t a g e s of s u c h c o n s i d e r a t i o n w o u l d be to
refute m o s t e f f e c t i v e l y the e n t i r e l y b a s e l e s s rumors that have
b e e n c i r c u l a t i n g that some f o r m of tax f o r g i v e n e s s w o u l d be
a d o p t e d w h i c h w o u l d m a k e it u n n e c e s s a r y for taxpayers to mee t
their M a r c h 15 i n s t a l m e n t s on tax l i a b i l i t i e s for the cal e n d a r
y ear 1942.
C h a i r m a n G e o r g e a nd C h a i r m a n D o u g h t o n hav e b o t h
stated that n o t h i n g of the sort is in contemplation.
"On the p a y - a s - y o u - g o p r i n c i p l e as a p p l i e d to the c o l l e c
tion o f income taxes the T r e a s u r y D e p a r t m e n t ’s record is quite
clear.
It has l ong f a v o r e d p u t t i n g income tax pay m e n t s on a
more current basis.
T h e n e e d for d o i n g this has beco m e m u c h
more acute as the n u m b e r of ta x p a y e r s and the b u r d e n o f taxes
have i n c r e a s e d o v e r the last two years.
More tha n 14 m o n t h s
ago, in November, 1941, S e c r e t a r y M o r g e n t h a u a p p e a r e d b e f o r e
2
the W a y s and M e ans C o m m i t t e e to suggest a p l a n for current p a y
m e n t t h r o u g h c o l l e c t i o n at the source o f the m a j o r p o r t i o n of
n e w taxes to be imposed.
He a d v a n c e d a s i m i l a r s u g g e s t i o n at
a p u b l i c h e a r i n g b y the C o m m i t t e e in M a r c h o f 1942.
The D e p a r t
m e n t has taken the p o s i t i o n that any p l a n p r o p o s e d m u s t be
c l o s e l y s c r u t i n i z e d to d e t e r m i n e w h e t h e r it will result in s u b
stantial loss of r e v enue or i n e q u i t i e s as b e t w e e n taxpayers at
a time w h e n the n e e d b o t h for g r e a t a d d i t i o n a l revenues and the
g r e a t e s t p o s s i b l e e q u i t y in the tax structure has b e e n m o s t
urgent.
nIt is the r e s p o n s i b i l i t y of C o n g r e s s to i n i tiate tax
legis l a t i o n .
The S e c r e t a r y of the T r e a s u r y has the traditional
and legal d u t y to p r e s e n t u p o n the r e q u e s t of the p r o p e r c om
m i t t e e s of Co n g r e s s p l ans for l e v y i n g a d d i t i o n a l revenue or
m a k i n g changes in the tax structure.
The T r e a s u r y stands ready
at all times to p r e s e n t such plans o r to give any advice or
'information d e s i r e d by the committees.
It is p r e p a r e d to p r e
sent specific s u g g e s t i o n s for 1 9 4 3 tax l e g i s l a t i o n to give
effect to the r e c o m m e n d a t i o n s c o n t a i n e d in the P r e s i d e n t ’s
B u d g e t M e s s a g e w h e n e v e r they m a y be r e q u e s t e d *
"The C h a i r m e n of the l a y s and M e a n s C o m m i t t e e and of the
Senate Finance C o m m i t t e e have not, however, l i m i t e d their c o n
tacts w i t h the T r e a s u r y D e p a r t m e n t to formal h e a r i n g s * T h e y
have f o l l o w e d c o n s i s t e n t l y the courteous a nd p r a c t i c a l p r o c e
dure of c o n f e r r i n g i n f o r m a l l y w i t h the S e c r e t a r y of the T r e a s
u r y and his r e p r e s e n t a t i v e s in advance of h e a r i n g s on tax
l egislation.
Thi s m u t u a l l y c o o p e r a t i v e p r o c e d u r e has b e e n in
effect this year> b e g i n n i n g w i t h c o n s u l t a t i o n s b e t w e e n
S e c r e t a r y M o r g e n t h a u and the two C h a i r m e n p r i o r to the o r g a n i
z a t i o n of the p r e s e n t C o n g r e s s and. it has b e e n c o n t i n u e d in
fre q u e n t c o n f erences b e t w e e n T r e a s u r y r e p r e s e n t a t i v e s and the
C h a i r m e n of the two C o m m i t t e e s a n d the staff of the Committees.
In the course o f these c o n f e r e n c e s the two staffs, at the i n
stance of C h a i r m a n Doughton, have b e e n s t u dying the p a y - a s - y o u go p r o b l e m w i t h the o b j e c t of expediting' the w o r k of the
Committees.
T h e s e studies are n e a r c o m p l e t i o n . "
-oOo-
TREASURY DEPARTMENT
Washington
Press S e n d e e
FOR RELEASE, MORNING NEWSPAPERS,
Tuesday. January 26« 1943»_____
I ¡¡¡||I
The Secretary of the Treasury announced last evening that the tenders for
$700,000,000, or thereabouts, of 91-day Treasury bills to be dated January 2? and to
faature April 28, 1943, which were offered on January 22, 1943# were opened at the
Federal Reserve Banks on January 2$.
The details of this issue are as follows:
Total applied for - $1,016,768,000
Total accepted
702,344#000
Range of accepted bids:
Hip-h
Low
Average price
- 99.940 Equivalent rate of discount approx. 0.236$ per annua
- 99.905
*
«
«
«
0.376$ «
«
— 99»906
*
»
*
»
»
0.370$ **
(32 percent of the amount bid for at the low price was accepted)
Federal Reserve
District
Total
A d d lied For
Total
Accepted
Boston
New York
Philadelphia
Cleveland
Richmond
Atlanta
Chicago
St. Louis
Minneapolis
Kansas City
Dallas
San Francisco
TOTAL
f
$ 21,826,000
426,811,000
13,610,000
25,036,000
10,865,000
23,522,000
77,000,000
14,294,000
5,739,000
7,296,000
9,020,000
67.325.000
$702,344,000
29,3X9,000
707,975,000
21,770,000
29,235,000
12,630,000
23,840,000
86,652,000
15,844,000
5,745,000
7,313 ,000
9,120,000
67.325,OQQ
$1,016,768,000
1taflnj
TREASURY DEPARTMENT
Washington
FOR RELEASE, M O R N I N G N E W S PAPERS,
T u e s d a y , J a n u a r y 26, 1945.
1-25-43
----------------
Ifor
'Ml
ÖÖp#
W
««
Press Release
No. 35-14
The S e c r e t a r y of the T r e a s u r y a n n o u n c e d last e v e n i n g that
the tenders
bills
fo r $ 7 0 0 , 0 0 0 , 0 0 0 ,
or thereabouts,
of 91-day Treasury
to be d a t e d J a n u a r y 27 and to m a t u r e A p r i l 28, 1943,
were o f f e r e d on J a n u a r y 22,
R e s e r v e B a nks
1943,
which
w e r e o p e n e d at the Federal
on J a n u a r y 25.
.
The d e t a i l s o f this issue are as follows}
T o t a l a p p l i e d for - $ 1 , 0 1 6 , 7 6 8 , 0 0 0
T o tal a c c e p t e d
702,344,000
Range of a c c e p t e d bids:
High
Low
Average
P r ice
- 9 9 . 9 4 0 E q u i v a l e n t rate of d i s c o u n t approx. 0 . 2 3 6 $
per annum
- 9 9 . 9 0 5 E q u i v a l e n t rate of d i s c o u n t approx. 0 . 3 7 6 $
per annum
- 9 9 . 9 0 6 E q u i v a l e n t rate of d i s c o u n t approx. 0 . 3 7 0 $
per annum
(32 p e r c e n t o f the a m o u n t b i d f o r at the l o w p r ice was
Federal Reserve
D i s t r i c t ________
Boston
N e w ^Tork
Philadelphia
Cleveland
Richmond
Atlanta
Chicago
St. L o uis
Minneapolis
Kansas C i t y
D a llas
San F r a n c i s c o
TOTAL
T o tal
A p p l i e d for
29.319.000
707,975,000
21.770.000
29.235.000
12.630.000
23.840.000
86.652.000
1 5 , 8 4 4 *000
5.745.000
7.313.000
9.120.000
67.325.000
$1,016,768,000
v
*»o0o-
accepted)
Total
Accepted
$ 21,826,000
426,811,000
13.610.000
25.036.000
10.865.000
23.522.000
77,000,000
14.294.000
5.739.000
7.2 9 6 . 0 0 0
9.020.000
67.325.000
$702.344.000
fHKABUHX D&PABTKiCHT
Washington
Press Service
~rytsB
$
The Secretary of the Treasury today announced the subscription figures
and tha basis of allotment for the each offering of 7/8 percent Treasury
Certificate# of Indebtedness of Series A-1944*
deports received from the Federal iieserve Banks show that subscrip
tions aggregate $6,403,000,000*
Of this amount $1*163*^00,000 were
allotted in full to all subscribers other than banks accepting demand
deposits, 1309,000,000 were allotted in full to banks entering subscrip
tions for not more than #100,000, and the remainder, representing sub
scriptions from banks for more than $100,000, were allotted 14 percent,
but not less than $100,000 on any one subscription, with adjustments,
where necessary, to the $1,000 denomination*
Details as to subscriptions and allotments will be announced shea
final reports are received from the Federal Beserve Banke.
a
Ü o
j
.
I
TREASURY IEPARTMYNT
Washington
FOR miEDlATS R2I3ASE,
. Tuesday, January 26. 1943,
Press Service
No. 35-15
The Secretary oi the Treasury today announced the subscription
figures and the basis of allotment for the cash offering of
7/8
percent
Treasury Certificates of Indebtedness of Series A-1944.
Reports received from the Federal Reserve Banks show that subscrip
tions aggregate ^>6,403,000,000.
Of this amount Hi>l,l63,000,000 were
allotted in full to all subscribers other than banks accepting demand
deposits, 0309,000,000 were allotted in full tp banks entering subscrip
tions for not more than
0100,000,
and the remainder, representing
subscriptions from banks for more than
0100,000,
were allotted
14
per
cent, but not less than *>100,000 on any one subscription, with adjustments,
where necessary, to the -¿1,000 denomination.
Itetails as to subscriptions and allotments will be announced ?ihen
xinal reports arc received from the Federal Reserve Banks.
ouo
y
IMMEDIATE RELEASE
January 26 a 19h3*
é
S S " /
'-------- — — -
--
for
(
The Bureau of Customs announced today preliminary figures showing the
quantities of coffee authorized for entry for consumption under the quotas
for the twelve months commencing October 1, 191*2, provided for in the InterAmerican Coffee Agreement, proclaimed by the President on April l£, 19l*l, as
follows:
Country of
Production
:
: Quota Quantity
: (Pounds) 1/
•
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, Yemen, and Saudi
Arabia
Other countries not signatories of the InterAmerican Coffee Agreement
1,535,367,083
520,08!*,629
33,019,261*
13,212,917
17,533,713
21*,767,091*
99,680,281*
88,331*,1*1*2
1*5,1*00,298
2,908,617
78,758,056
32,1*62,515
1*,É>,276
61,251*,106
)
)
)
)
)
)
)
)
)
)
51,653,778
Quotas revised.
-oOo-
Authorized for entry
for consumption
As of (Date)
: (Pounds)
Jan. 16, 19l*3
tt
n
it
n
tt
tt
tt
tt
n
tt
n
tt
tt
n
171*,683,Oil*
139,530,719
5,778,773
6,061*,980
5,529,1*58
8,078,973
9,120,236
12,058,656
20,511*,977
1,059,255
8,512,187
101,369
152
1 7 ,3 3 0 ,0 1 * 9
17,965,21*1*
i
TREASURY DEPARTMENT
Washington
FOP IMMEDIATE RELEASE,
Wednesdays January 27,
1943 ,
Press Service
No. 35-16
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 . 1943, provided for in the Inter-Anerican Cof-
fee Agreement, proclaimed by the President on April 15, 1941, as follows*
Country of
Production
Brazil
Colombia
Costa Rica
Cuba
Dominican Republic
Ecuador
El Salvador
Guatemala
Haiti
Honduras
Mexico
Nicaragua
Peru
Venezuela
|on~signatory Countriesi
)
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 Inter—
)
•American Coffee Agreement)
1/
Quota Quantity
(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
Authorized for entry
for consumption
«-ft*. '°5 (^a^..e)
.*1
(Pounds)
<Tan, 16, 1943
if
n
ti
h
it
tt
h
'it
it
it
n
n
n
174,683,014
139,530,719
5,778,773
6,064,980
5,529,458
8,078,973
9,120,236
12,058,656
20,514,977
1,059,255
8,512,187
101,369
152
17,330,049
51,653,778
17,965,244
Quotas revised.
oOo-
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*
_
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 --- February^,
-----
*
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
1
Washington
JOB RELEASE, MOBBING- HEWSPAPIBS,,
Friday, January 29, 1943------ •
4*
i
The Secretary of the Treasury, ty this public notice, invites tenders
fnr s» 700.000.000
, or thereabouts, of __21— -day Treasury balls, to be issued
on a discount basis under competitive bidding.
be dated
The bills of this series will
February 2. 19A3--- , and will mature
4**
when the face amount will be payable without interest.
t*ay
.TQAi
4a*
They will be issued in
bearer form only, and in denominations of H.OOO, $5,000, $10,000, $100,000,
$500,000, and ¡¡>1 ,000,000 (maturity value).
Tenders will be received at Federal Kesorve Banks and Branches up to the
closing hour, two o'clock p. m., Eastern S f a m t a t time, Monday, February 1, 114? t-j
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
It is urged that tenders be made on the printed forms and for-
j
I
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 after the closing hour, tenders will be opened at the Federfj
TREASURY DEPARTMENT
Washington
f o r RELEASE, M O R N I N G N E W S P A P E R S
Friday, J a n u a r y 29. 1943.
1-28-43 ^
------ :-- -r~ --------
The S e c r e t a r y o f the Treasury,
vites
tenders
u r y bills,
bidding.
f or $ 7 0 0 , 0 0 0 , 0 0 0 ,
b y this p u b l i c notice,
o r thereabouts,
of 9 1 - d a y T r ias,
to be i s s u e d o n a d i s c o u n t basis u n d e r ' c o m p e t i t i v e
The b i lls o f this
a nd will m a t u r e M a y 5, 1943,
w i t h o u t interest.
in d e n o m i n a t i o n s
series w i l l be d a t e d F e b r u a r y
3 , 1943
w h e n the face a m o u n t will b e pa y a b l e
T h e y will be i s s u e d in b e a r e r f o r m only,
o f $1,000,
$5,000,, $10,000,
and $ 1 ,000,000 (ma t u r i t y value),
and
$100,000, 4 5 0 0 , 0 0 0 ,
■
'
B r a n c h e s ^ ^ t n 1^ ^ 06! r e ? e i v ®d at Federal
time
in
.
.. .
Reserve B a n k s and
M o n d ^ : ° F S u ^ r i ? S 1943!'
ev: n Tm u l U p L D o ? % T S S o ’ W a f “ S t o n :
S f ? c S i o n b t h S r ! d b 7 ' P9deral
E a c h t e n d e r must" be for an
ReSerVe B a n k s
Branches P -
b a n k s ^ n d 6^ , ' ^ 11 be r ? c e l v e d w i t h o u t d e p o s i t from i n c o r p o r a t e d
d e alers i n ^ v L ?
P ^n i e S a? d, f rora r e s p o n s i b l e and r e c o g n i z e d
accomoanied
n J e SU r l t i e S - T e n d e r s f ™
o t h e r s m u s t be
umr h ? i u i b ^ P^
ent D f 2 p e r o e n t O f the face amount o f T r e a s
u r y b i lls a p p l i e d for, u n l e s s the tenders are a c c o m p a n i e d b v an
company.SUaranty ° f payMent
an i n c o r p o r a t e d b a n c o r
trust
„ 1 i-v.omlSe^ i a t ?'Ln a f t e r the c l o s i n g hour, tenders will be o p e n e d
at the Federal Reserve B a nks a nd Branches, f o l l o w i n g w h i c h public
a n n o u n c e m e n t will be m a d e b y the S e c r e t a r y o f the “ r e a s ^ y of
the amount an d price r a nge o f a c c e p t e d bids.
T h ose s u b m i t t i n g
T h f l e c r l ai ho6 / ^ 3? " ° f £ “ 1 a C o e p t —
£ £ & i ? S S S o f .
otrL ^ ret
o f th
T r e a s u r y e x p r e s s l y re s e r v e s the richt to
accept o r reject a ny or all tenders, in w h o l e or in part
and
his a c t i o n in a ny such r e s pect shall be f i n a l . P e n m e n ? of
a c c e p t e d tenders at the prices o f f e r e d m u s t be m a d e ^ o r completed
able iunds
?undef on
raV F erb r u
erV9
in °8 S h o r o t h e r i ^ e d i a ^ e l yJ avai l !
aoie
ary S
3“, *1943.
35-17
(Over)
■
2
The Income d e r i v e d fro m T r e a s u r y bills, w h e t h e r interest or
g a i n fro m the sale or o t h e r d i s p o s i t i o n of the bills, shall not
h ave ..any exemption, ..as such,, and loss f r o m the sale or other
d i s p o s i t i o n of T r e a s u r y bills shall n ot h a v e any special treat
m e nt, as such, u n d e r Federal tax Acts n o w or h e r e a f t e r enacted.
The bills shall be s u b ject to estate, inheritance, gift, or
o t h e r excise taxes, w h e t h e r Federal or State, but shall be exempt
f r o m all t a x a t i o n n o w or h e r e a f t e r i m p o s e d on the p r i n c i p a l or
Interest t h e r e o f b y a ny State, or a n y of the p o s s e s s i o n s of the
U n i t e d States, or b y any local taxi n g a uthority.
For purposes
of ta x a t i o n the- a m ount of d i s c o u n t .at w h i c h T r e a s u r y bills areo r i g i n a l l y sold b y the U n i t e d States shall be c o n s i d e r e d to be
interest.
Under- Sec t i o n s 42 a nd 117 (a) (1) o f the Internal
Revenue Code, as a m e n d e d b y S e c t i o n 115 of the Re v e n u e Act of
1941, the a m o u n t of d i s c o u n t at w h l c h b i l l s i s s u e d h e r e u n d e r
are sold shall no t be c o n s i d e r e d to accr u e u n til s u c h bills
shall be sold, r e d e e m e d or o t h e r w i s e disposed- of, and such bills
are e x c l u d e d from c o n s i d e r a t i o n as capital assets.
Accordingly,
the o w n e r o f T r e a s u r y b i lls (other than life i n s u r a n c e companies)
.issued h e r e u n d e r n e e d include: in his i n come tax r e t u r n only the
d i f f e r e n c e b e t w e e n the price p a i d for .such bills, w h e t h e r .oh
original issue o r on s u b s e q u e n t purchase, a nd the a m o u n t actually
r e c e i v e d e i ther u p o n sale or r e d e m p t i o n at .maturity d u r i n g the
taxable .year for w h i c h the r e t u r n is made, .as o r d i n a r y g a i n or
loss.
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 No. 418, as amended, and this
notice, p r e s c r i b e the terms of the T r e a s u r y .b i l l s and. g o v e r n the
c o n d itions o f their issue.
Copi e s of the c i r c u l a r m a y be o b
tained f r o m any Federal Reserve B a n k or Branch.
-oOo-
TREASURY DEPARTMENT
✓>
Washington
3
5
Press Service
FOR IMMEDIATE RELEASE,
Saturday. January 30, 1941*
The Secretary of the Treasury today announced the final subscription and
allotment figures with respect to the current offering of 7/8 percent Treasury
Certificates of Indebtedness of Series A—1944*
Subscriptions and allotments were divided among the several Federal
Reserve Districts as follows*
Federal Reserve
District
Total Subscriptions Received
Total Subscriptions Allotted
Boston
New York
Philadelphia
Cleveland
Richmond
Atlanta
Chicago
St* Louis
Minneapolis
Kansas City
Dallas
San Francisco
Treasury
TOTAL
*
$
333,798,000
2,839,741,000
220,076,000
324,876,000
247,490,000
287,316,000
921,018,000
242,691,000
109,775,000
196,283,000
150,953,000
528,061,000
15,000
*6,402,093,000
103,061,000
1,090,810,000
72,815,000
114,020,000
87,062,000
79,951,000
302,885,000
72,541,000
41,222,000
65,077,000
46,559,000
135,208,000
15,000
$2,211,226,000
TREASURY DEPARTMENT
Washington
FOR I M M E D I A T E RELEASE,
Saturday, J a n u a r y 50. 1943
Press Service
No. 35-18
The S e c r e t a r y o f the T r e a s u r y t o day a n n o u n c e d the final
s u b s c r i p t i o n a nd a l l o t m e n t figures w i t h r e s pect
to the current
o f f e r i n g o f 7/8 p e r c e n t T r e a s u r y C e r t i f i c a t e s o f I n d e b t e d n e s s
of Series A-1944.°
Subscriptions
Federal
Reserve D i s t r i c t s
Federal Reserve
District
Boston
New York
Philadelphia
Cleveland
Richmond
Atlanta
C h i cago
St. L o u i s
Minneapolis
Kans a s C i t y
Dallas
an Francisco
reasury
TOTAL
t-3t/3
and a l l o t m e n t s w e r e d i v i d e d a m ong the several
as follows:
Total S u b s c r i p tions R e c e i v e d
Total Subscriptions A l l o t t e d
$
$
333,798,000
2,839,741,000
220.076.000
324.876.000
247.490.000
287.316.000
921.018.000
242.691.000
109.775.000
196.283.000
150.953.000
528.061.000
1 5 f000
$0,402,093,000
-oOo-
103,061,000
1,090,810,000
72.815.000
114.020.000
87.062.000
79.951.000
302.885.000
72.541.000
41.222.000
6 5 . 0 77.000
46.559.000
135.208.000
1 5 . 0 00
$2,211,226,000
t
...
%
- 3 -
been adopted as textbook material by 9?000 high schools,
for study by 3,000,000 students.
A "Know Your Money” ed
ucational movie was exhibited nearly 10,000 times, to
000,000 spectators.
To emphasize potential dangers of counterfeit money
being used as a weapon of war, the Secret Service, in co
operation with the Chase National Bank and Rockefeller
Genter, established a huge educational display in New
J U * ~ r U ^ JtjUsC
York City, and smaller exhibits were conducted ¡hi) target cities throughout the nation.
-oOo-
%
the ice he loved,
A "figure eight" on the links at Flush
ing Meadows, Hew York, ended figuratively, with a glide
into the arms of waiting agents, and, it later turned out,
was prophetic of the eight-year sentence he received.
Kerr jumped his bond while awaiting trial.
Knowing
his weakness for gambling on horses, agents watched the
tracks, and picked him up again at the mutuel windows at
Miahleah, Florida.
The coiner promptly worked his way
out of Coral Gables jail with a key fashioned irom a
stolen spoon.
The thorough Secret Service agents had
learned of Kerr’s ice skating accomplishments as well as
his love of the horses, and circulated his picture to em
ployees at various rinks.
The ice at Flushing Meadows
proved exceedingly thin for the fugitive when he at last
donned his skates.
The Secret Service, cooperating with Mexican author
ise
. m a plot to flood that Republic with counter
feit money, with the arrest of Iuis Eduardo DeShelley.
DeShelley, who has served more than 20 years in United
States prisons for counterfeiting, was operating a plant
in Mexico City for the manufacture of bogus #50 and #100
American bills and false Mexican currency.
The Service’s educational campaign was intensified
during 1942,
Its 32-page booklet "Know Your Money" has
3 for six months for contributing to the delinquency of a
minor,
A
h
a
d
negotiated two forged governe*A4&&* m
ment checks in tnemerchant*s establishment^
HI***
Judge Bfehrai
warned the dealer that loss of American boys through im
prisonment was far worse than the loss of a few dollars
by the merchants.
Since the Secret Service educational program was in^¡¡3|5wE^fn 193^, there has been a 60 percent reduction
One of the most notorious counterfeiters convicted
in 1942 now is a fugitive from justice.
Nick tfedich,
sentenced in North Dakota in December to serve
ears
imprisonment, escaped from a deputy United States mar
shal.
Ifedich was given a long prison term in 1933 for
counterfeiting.
He was released in 1940» finally re
turned to counterfeiting, and was captured again shortly
after his new product reached circulation.
On the other hand, another veteran coin counterfeiter,
long a fugitive, is behind bars.
Alexander Kerr, alias
Bdward Wellman, who found relaxation from his counter
feiting labors in fancy skating, wrote his own ticket on
/
-
to $23,000.
2
-
Prior to institution, in 193^> of the "Know
Your Money" campaign, bogusTS^^losses exceeded $|b0,000
yearly.
j
?
The arrests for making or passing counterfeit bills
and coins during 1942 represented © decline of 59 percent
from the previous year.
The Treasury campaign to protect recipients and han*
dlers of government checks takes two lines.
First, those entitled to the checks are urged to take
precautions against their mail being pilfered, or their
otherwise getting into unscrupulous hands.
Second, merchants, bankers, and other handlers are
being urged to demand positive identification of every
person presenting a check for cashing.
The "Know Your
Endorsers” theme is being hammered home by widespread
publicity, through posters, magazines, newspapers, radio
p&Ajpvs
and aovi¿jgygdctures. Army and Navy publications have co
operated whole-heartedly in carrying the precautionary
program to military personnel and their dependents.
One unusual incident in the 1942 war against forgers
saw the establisnw^ of a legal precedent for imposing
criminal penalties for careless acceptance of a forged
check, as well as for actually passing the document.
Judge G . L. Schram^or XlIegHeny County, Pennsylvania,
Juvoni-l-e-Gouasi- placed a Pittsburgh merchant on probation
I
PP
3 ^ / 1
The United States Secret Service, riding the crest
of the most successful campaign against counterfeiting in
its history, has turned its big guns against the forger
of government checks in a drive designed to protect, parill£
ticulerly, men in the armed services and their dependents.
Using the same "Crime Prevention Through Education"
technique which has cut losses of victims of bogus cur
rency 93 percent in five years, the Service now is out to
make theft and forgery of government checks as unhealthy
as counterfeiting.
With millions of Army and Hsvy allotment and allow
being mailed to dependents of 4)«si1yi'CtT*
fry?
^ Chi ef Fra nk Wilson is determined that there shall be
ance checks
scant opportunity for ■irhoe»■
criminals who
7
Elmer L. Irey, Coordinator of Treasury Law Enforcement activities, summarised the work of the Secret Serv
ice in one of a series of reports to Secretary Morgenthau
on 1942 activities of his agencies.
He reported that victims of counterfeit bills lost
59 percent less money in 1942 than they did in 1941, and
that victims of bogus coins lost 39 percent less.
Losses
from phoney bills dropped to $29,000, and from bogus coins
TREASURY DEPARTMENT
Washington
F O R RE1EA.SE, M O R N I N G N E W S P A P E R S
Tuesday, F e b r u a r y 2 , 1943 .
1/30/43
'
~
P r ess S e r v i c e
Wo. 35-19
------
T h e U n i t e d S t a t e s S e c r e t Service,
most s u c c e s s f u l c a m p a i g n a g a i n s t
r i d i n g t h e crest of the
c o u n t e r f e i t i n g in its history,
has t u r n e d its b ig guns a g a i n s t t he f o r g e r of G o v e r n m e n t
in a drive d e s i g n e d to protect,
particularly,
checks
men in t he a r m e d
s e r vices a n d t h e i r dependents.
Mw SSS.’ S . ’ SR E S S S r e S S ”
cent in five years
+>t
f o r g e r y of G o v e r n m e n t
checks
o f h L
U
?
f
5 0gus
E d u c a t i o n " t,chcur r e n c y 93 per-
checks as u n h e a l t h ^ a s ° c ^ n t e r f e i t i n g !
1 b e i n g 1 m a i l e d ° + n A flrn^
t ? d + a v y allotmen1; a n d a l l o w a n c e
C o o r d i n a t o r of T r e a s u r y l a w E n f o r c e m e n t
summarizedw o r k of t he Secret S e r v i c e in one
of a N e f f
ities
f
agencies!
t0
S e 0 r e t a r y M o r g e n t h a u on 1942 activ-
He r e p o r t e d that victims of c o u n t e r f e i t billp i nq+ c q ~
cent less m o n e y in 1942 t h a n -they d i f in 1 9 4 1 H i
£9 p e r bills “d r o p p e d to f e q f o o 39
losses N o r n p h o n U
P r i o r to f L t u ! + ,00° \ an d f r o m bogus coins to $23,000.
t * t 1 0 ? ’ ln 1937’ ot t he "'K n o w Y o u r Money" c a m
paign, bogus m o n e y losses ex c e e d e d ¡$800,000 yearly.
Y
oein
n r i9
pc r
v is oTd
u sf ?year.
4 2 f fe?per se seenn tt eerd aa Pd
0f f.59 p e r c ebn itl l sf r oand
d eec!li ?in
n ee ° of
m the
of G o v e r a m e n f c h e c k f t a l c e s t
First,
those
w
/
l
r e ° ipientS a n d h a n d ^ s
en t i t l e d to t h e checks arp nraori
-+-0
o t f e ? f " l e t f f ' r L f i L S u L f f h f d s f !r e d ’ °r t h e l r °becks
- a -
ue
r ngtexdn\geraS ecih a
o f of
S ha
dlers
ao
re
bei n «
s
e cnkf pf o
o rs ?cWavs e
h ibnMgO T wnk
i c a? t
3-ion
e y"
ery
pers
n prels b e ing h a m m e r e d h o m e by f i d e i n r i>a f ’°W i J ° U r E n d o r sers" t h e m e
ers, m a g a z i n e s , n e w s m p e L
r l l ? ? ^ / Ub ^ ° i t y > t t o o u g h posta n d N a v y p u b l i c a t i o n s b a v e ’c o o n ^ a t p i i n.
0ti 0n P i c t u r e s . A r m y
r y m g the P r e c a u t i o n a r y p r o g r a m to nfi 7ï=
eartedly in o a r '
depe n d e n t s ,
J p s r a m t0 M i l i t a r y p e r s o n n e l and t h e i r
One u n u s u a l i n c i d e n t in 4-1-10 io/io
t h e e s t a b l i s h m e n t of a l e gal r,reeidf2+ W $r a 6a i n s t forgers s a w
p e n a l t i e s fo r careless a c c e p t a n c e ni"! i ° r ^ P ^ i n g criminal
as f or a c t u a l l y p a s s i n g t he d o c u m e n t . 3
°r g e d o h e o k > as w e l l
C o u n t y dd p O T n ^ y l v a n i ^ ap i a L r a P i + t n h le i ° U rt o;C A l l e s h e n y
f or s i x m o n t h s for c o n t r i b u t i n g H -,n e r o h a n t °n p r o b a t i o n
A b o y had n e g o t i a t e d t w o fn-r&Jrt r
"i6 ^ e- ^ n<Iue n c y of a minor,
c h a n t !s e a t a b U s h m a n t ^ b ^ Î u ï î L f m f S S enî °hecks in t he ^ r did n o t r e q u i r e p r o n e r ideni-i-fi
r
w as car e less and
t he d e a l e r t h a t loss o f ' A m e r i c a n b o v t + h JUd S i ? c h r a m w a r n e d
f a r w o r s e t h a n t h e loss of a f e w d & | ^ M , 1^
lsi!a m “ rt was
-cvv uoxrars by t he mer c h a n t s f
S i n c e the S p n ^ p t
-,
..
r a t e d in 1937, t h e r e \ L been ® dg S aP o n a l .Pr ° g r a m was inaugun u m b e r of juveniles a r r e s t e d f o v 6v i n ® h ent r e d u c t i o n in the
utes, a l t h o u g h t h e r e has been »
i b “ S t he r e l a t e d stat-
period in total law violations by j a y L S e s ® 336 dUring that
1942 n S w is a h| u g i W v e ° l r o m 0 n s t ° c e t e r w eiv ei S co? v i o t ed in
m N o r t h D a k o t a in D e c e m b e r to s e rvO f N l °+ Iaedici:1> s e n t e n c e d
ment, e s c a p e d f r o m a d e p u t e TTn-1+ e ! ve f o u r t e e n y e ars imprisonwas g i v e n a l o n g p r i s o n t e - m i n l o y t ^ h 63 m a r s h a l - . M e d i c h
was r e l e a s e d in 1 9 4 0
citing.
He
was c a p t u r e d a g a i n s h o r t l v a f t e r ^ l ! 65 t0 0°nn t e r feiting, a n d
culation.
a l t e r hls n e w p r o d u c t r e a c h e d cir-
long a f u g h i v e H i s 3b e h i n d ° b a r s V e H rarl ° oin 7rc o u nterfeiter,
bellman, w ho f o und r e l a x a t i o n fromA h ? X a n d e h Jlerr’ a l ias Edwa r d
in f a ncy skating, w r o t e h S own
COU 2berflsiting labors
f i g u r e eight" on t h e links a+ t u ,
the ioe he loved.
A
ended f i g u r atively, w i t f a g l L e i n t T + h
°W S ’/ eW Y o r k >
agents, and, it l a t e r turned ™,+ lnbo t he arms of w a i t i n g
y e a r s e n t e n c e he r e c e i v e d " ^
P r o p h e t i c of the eight-
weakness for gambling^on^horses ^svent” 2
d e w i n g his
a nd p i c k e d h i m u p a g f i n at t h e ™,?n ? t S -W f t c h e d t he bracks,
Ho»,..
* * oofoe?
- 3 -
a .^ey fashioned from 'a stolen spoon. The thorough
Secret Service agents had learned of Kerr’s ice skating accnm
hisSM
c ? u r Pa?nWelV
S hlSat
}°VB
0t the
^ r s e sThe
M a nice
f circulated*'
nXB
picture
to employees
various
rinks.
at Flushing
s ? o” « s r s L ' s s i 8ii tMn ror tta
-» »
«
heip«ah??B? I S \ sj K i ”a S S T i S S ' s S S ^ f S S S S S
money, with the arrest of Luis Eduardo DeShellev
ISttrt?«*
S
t s a n ’k r
n
i s
, »
s
s
tta n
i
f
1»
D n itS
s i s ; ,
nRrmfai'+nv
§ \ ° °£e'^a ^ns a Riant in Mexico City for the
Mexican currenc^T8 *5 “ ** $1°° American bills and false
1 QA9 Th!f'Service's educational campaign was intensified during
32-page booklet Know Your Money*’ has been adopted
f 0 0 0 X0 0 n ° ^ f f " i 131 h « 9 ’ 000 h i ®h s c h o o ls ^ f o ? stu d y by P
e x h ib ite d n e a r lv f o non ? 30W Y°2 X M° ney" e d u c a tio n a lm o v ie was
ta to rs *
n
l y 1 0 ’ 000 tam es, to more th an 2 ,0 0 0 ,0 0 0 s p e c -
To emPhasise potential dangers of counterfeit money being
a Weapon of war, the Secret Service, in cooperation
It It
■ntvL'ihe £hase National Bank and Rockefeller Center estab
lished a huge educational display in Rew ynnk fM-Hr *Qri/q
nn
■ s“ “ g — •
? ^ “ . 2 j ' S t S s v s i s s ; 1"
-oOo-
-
6
-
soft metal tubes packaged in Singapore and distributed
to oriental opium monopolies.
However, aside from the
Mexican types, most seizures now are of raw opium in the
form of small sticks apparently originating in Persia.
Humorous lots have been taken from ships arriving
r&est sb
at our
I i| | | g | g |
taken from a Dutch «Vessel in extended searches
z£?
and 55$ ounces taken from Chinese crew memDutch vessel at Hew York.
An interesting angle in these cases was that the
sticks had outer wrappers upon which were imprinted
Arabic characters which proved to be Persian versions
of certain verses from the Bible Book of Luke.
Agents
have been unable to develop any particular significance
to these quotations, which were in addition to the
usual labels of the Iranian Government Opium Monopoly.
Combined seizures by Customs and Harcotics Bureaus
during the year were 5*15B ounces of opium, morphine,
heroin, and similar narcotics, against 4,962 ounces in
1941*
Marihuana seizures fell off sharply to
ounces, against
22,376
ounces in
12,830
1941.
The Bureau of Harcotics reported
2,635
arrests
under Harcotics laws and the Marihuana Tax Act, against
2,824
in
1941.
Harcotics arrests increased slightly,
and Marihuana arrests were somewhat fewer.
oOo-
- 5 -
The conspiracy involved the roost extensive Illegal,
commercial marihuana enterprise so far discovered in the
Eastern United States,
Penitontiary néantenc-es-w ere-
The Bureau of Narcotics won a major court victory
in its efforts to prevent dissipation of medicinal nar
cotic drugs through unscrupulous practicionera.
The
United States Circuit Court of Appeals upheld the con
viction of the Direct Sales Company, Inc., of Buffalo,
which sold drugs directly to a physician engaged in il
legally dispensing them to addicts.
Phillip Chatard, alias Phillip Chadwick, gunman
and desperado, who forfeited bond and disappeared while
his conviction on narcotics charges was being appealed,
was captured by Narcotics officers in Tacoma, Washington,
after a series of spectacular drug company robberies,
and committed to a Federal penitentiary.
The major seizure by Customs officers during the
year was a lot of (2 7 pounds of Mexican smoking opium
taken from a bus passenger at Yuma, Arizona.
Destina
tion was reported to be a Chinese in San Francisco, The
Bureau reports that curtailment of shipping from the Par
East has practically dried up traffic in the familiar
5-tael and 1-tael factory-made tins of opium, but that
there have been occasional seizures of smoking opium in
%
* 4 ~
they had hoped to realize #8,000.
They promptly pleaded
guilty in Federal court, and were sentenced each to five
years in prison and fines of $5» 000.
More arrests were made in El Paso of alleged wr u n
ne r s ” for "La Hacha" and total seizures r e a c h e d 125
ounces of smoking opium and 78 ounces of morphine.
Narcotics Bureau officers carried out another of
fensive during the year against one of the most persist
ent centers of internal distribution, a segment of the
Kansas City underworld.
Successful prosecutions of im
portant members of this gang/ were effected in 1939 and
1940.
The syndicate was revived, however, and twelve
additional indictments were obtained in 1942, among
those accused being Carl Carramusa, alleged director of
the illicit business, Nicole Impastato, Joseph Be Luca,
and Charles Benjamins of Kansas City, and Paul and
Joseph Antinori of Tampa, Florida.
High spot of this investigation was the solving of
a secret wall panel in the basement of a Kansas City
[11fu'lffirirrg house, which netted a large quantity of heroin.
Narcotics officers, after a two-year Investigation,
found on a cluster of little cabin-studded farms in the
green hills of North Carol!nay the source of much of
the demoralizing marihuana peddled in the Harlem dis
trict of New York.
- 3 continued scarcity of illicit narcotic drugs with prices
beyond the reach of many addicts.
Breaking of the "la Nacha" gang was considered a
major enforcement accomplishment by the two services.
How the Juarez woman acquired her colorful nickname is a
matter of dispute*
Border agents say "la Hacha" can be
interpreted as Spanish slang for "pug nose"; but another
r fu k Jit »w:
school of thought believes the term a porvor d i w *of
"Ignaeia", her given name.
The characters in "la Nacha1s" entourage might have
been taken from Alice in Wonderland.
The case reports
of investigating officers list the conspirators by such
titles as "The Lawyer", and "The Chemist", and "The In
terpreter", and "The Chauffeur", and "The Old Kan", and
"The Old Woman".
The undercover agent© were taken on a trip into the
mountains of Guadalajara where "la Hacha" introduced
them to "The Chemist" and "The lawyer", the processors
of the flowers growing in the isolated mountain country.
"The lawyer", Alberto Torres Ybarra, and "The
Chemist", Luis Manuel Vazquez, were arrested subsequently
by Customs and narcotics agents near Ban Antonio, Texas.
A secret compartment in the gas tank of their automobile
yielded 55 ounces of morphine, for which they admitted
~
2
-
to customers as- far removed as Hew York, San Francisco
and Seattle*
United States officials termed cooperation of Mex
ican officers in this case particularly significant since
gangster elements had attempted to organize traffic from
the poppy fields of interior Mexico to replace illegal
sources dried up by the war*
Customs and Narcotics of
ficers , with the aid of Mexican officials, effected sev
eral other major prosecutions in 1942 involving border
narcotics smuggling*
One of these cases involved eight Hew York hoodlums,
said by officers to have been recruited from remnants
of the old ”Dutch" Schultz and "Lucky” Luciana gangs.
They were convicted in Hew York of conspiracy charges
and in Arizona on smuggling counts*
A similar case de
veloped in California, involving charges against ten
persons *
There was a continued trickle of marihuana into
the United States from Mexico, too, but most of these
seizures were small.
However, several ”trouble spots”
of what appeared to be organized addiction to the weed
appeared, and resulted in prosecutions on both coasts.
Both H, J. Anslinger, Commissioner of Narcotics,
and W* R. Johnson, Commissioner of Customs, reported
Treasury officials revealed today how undercover
officers kept a dangerous rendezvous with international
opium smugglers deep in the mountains of Mexico, and
with the help of Mexican officials, plugged one of the
major sources of illicit dope traffic in the United
States*
Details of the nstory-booktt investigation, which
has just culminated in a series of convictions in Federal
court, are contained in a report to Secretary Morgenthau
by Elmer I*. Irey, Chief Coordinator of the Treasury’s
Enforcement Agencies.
The review covered 1942 activ
ities of the Bureau of Narcotics and the drug control
work of the Bureau of Customs.
Mrs* Ignacia Jasso Gonzales, widely known on the
border as nLa Nacha”, alleged by the officers to have
been for years the largest distributor of illicit drugs
on the Mexican frontier, and thirteen others were in
dicted at EL Paso as a result of the investigation con
ducted jointly by the two agencies.
Several principals already have been given stiff
sentences, but "La Nacha" has not been brought to trial
as she faces charges in Mexico.
Treasury officers say
this woman was the "brains” of a gang making deliveries
TREASURY DEPARTMENT
Washington
POR RELEASE, AFTERNOON NEWSPAPERS,
Wednesday, February 3 , 1943.
2/ 1 / 4.3
~
’
— —
Press Service
No. 35-20
Treasury officials revealed today how undercover officers
kept a dangerous rendezvous with international opium smugglers
deep in the mountains of Mexico, and with the help of Mexican
*officials, plugged one of the major sources of illicit dope
traffic in the United States.
Details of the story-book” investigation, which has just
culminated in a series of convictions in Federal Court, are
contained in a report to Secretary Morgenthau by Elmer L. Irey,
Chief Coordinator of the Treasury’s Enforcement Agencies, The
review covered 1942 activities of the Bureau of Narcotics and
the drug control work of the Bureau of Customs
Ignacia Jasso Gonzales, widely known on the border
as La Nacha , alleged by the officers to have been for years
he largest distributor of illicit drugs on the Mexican frontier, and thirteen, others were indicted at El Paso as a resul0
x_e investigation conducted jointly by the two agencies.
Several principals already have been given stiff sen
tences, but La Nacha” has not been brought to trial as she
5rooe+v,CnSiSeS
Maxico- Treasury officers say this woman
was the brains of a gang making deliveries to customers as
far removed as New York, San Francisco and Seattle.'
United States officials termed cooperation of Mexican of
ficers in this case particularly significant since gangster
elements had attempted to organize traffic from the poppy
y}rQ+tS °f int®rjf r Mexico bo replace illegal sources dried up
by the war•^ Customs and Narcotics officers, with the aid of
officials, effected several other major prosecutions
m 1942 involving border narcotics smuggling.'
L,
°ne of ihefe cases involved eight New York hoodlums, said
§2 ,
?? have been recruited from remnants of the old
Dutch Schultz and Lucky” Luciana gangs.' They were convictea in New York of conspiracy charges and in Arizona on
smuggling counts. A similar case developed in California in
volving charges against ten persons.
*
’
-
2
-
c, 4.
wfs ^ continued trickle of marihuana into the United
States from Mexico, too, but most of these seizures were small
However several, ’»trouble spots’’ of what appeared to be organ
ized addiction to the weed appeared, and resulted in prosecu
tions on both coasts.
H*
Anslinger, Commissioner of Narcotics, and
W. R._Johnson, Commissioner of Customs, reported continued
narcotic druss with prices beyond the reach
u xriQiX-i^i aciaxcus $
Breaking of the ”La Nacha” gang was considered a major
enforcement accomplishment by the two services» How the Juarez
woman acquired her colorful nickname is a matter of dispute,
Border agents say La Nacha” can be interpreted as Spanish ■
slang for pug nose ; but another school of thought believes
the term a corruption of ’’Ignacia”, her given name.
The characters in ”La Nacha's” entourage might have been
taken from Alice in Wonderland. The case reports of investi
gating officers list the conspirators by such titles as ’’The
Lawyer , and The Chemist”, and ’’The Interpreter”, and ’’The
Chauffeur”, and ’’The Old Man”, and ’’The Old Woman”,
^nd^rcover agents were taken on a trip into the moun
tains of Guadalajara where ”La Nacha” introduced them to ’’The
Chemist” and ’’The Lawyer”, the processors of the flowers grow
ing m the isolated mountain country,
. "The Lawyer”, Alberto Torres Ybarra, and ’’The Chemist”,
Luis Manuel Vazquez, were arrested subsequently by Customs and
Narcotics agents near San Antonio, Texas. A secret compart
ment in the gas tank of their automobile yielded 55 ounces of
*prnnnne,mi°r
’theY admitted they had hoped to realize
$ ,000,. They promptly pleaded guilty in Federal Court, and
were sentenced each to five years in prison and fines of $5 ,000 .
More arrests were made in El Paso of alleged ’’runners”
lor La Nacha' and total seizures reached 125 ounces of smok
ing opium and 78 ounces of morphine.
7 Narcotics Bureau officers carried out another offensive
during the year against one of the most persistent centers
of internal distribution, a segment of the Kansas City under
world. Successful prosecutions of important members of this
gang were effected in 1939 and 1940. The syndicate was re
vived,^ however, and twelve additional indictments were obtamea m 1942, among, those accused being Carl Carramusa, alTnfe\ d^re5t0r °f the illicit business, Nicolo Impastato,
Joseph De Luca, and Charles Benjamina of Kansas City, and
laul and Joseph Antinori of Tampa, Florida,
- 3 High spot; of "this investigation was "the solving of a
secret wall panel in the basement of a Kansas City house,
which netted a large quantity of heroin.
Narcotics officers, after a two-year-investigation, found
on a cluster of little cabin-studded farms in the green hills
of North Carolina the source of much of the demoralizing ma
rihuana peddled in the Harlem district of New York.
The conspiracy involved the most extensive illegal, com
mercial marihuana enterprise so far discovered in the Eastern
United States.
The Bureau of Narcotics won a major court victory in its
efforts to prevent dissipation of medicinal narcotic drugs
through unscrupulous practicioners♦ The United States Cir
cuit Court of Appeals upheld the conviction of the Direct
Sales Company, Inc., of Buffalo, which sold drugs directly to
a physician engaged in illegally dispensing them to addicts.
Phillip Chatard, alias Phillip Chadwick, gunman and des
perado, who forfeited bond and disappeared while his convic
tion on narcotics charges was being appealed, was captured
by Narcotics officers in Tacoma, Washington, after a series
f
spectacular drug company robberies, and committed to a
I Federal penitentiary.
The major seizure by Customs officers during the year was
I a lot of twenty-seven pounds of Mexican smoking opium taken
f
a bus passenger at Yuma, Arizona. Destination was re—
ported to be a Chinese in San' Francisco. The Bureau reports
:that curtailment of shipping from the Far East has practically
dried up traffic in the familiar 5 -tael and 1 -tael factoryl made tins of opium, but that there have been occasional seiz
ures of smoking opium in soft metal tubes packaged in Singapore
. and distributed to oriental opium monopolies. However, aside
| £:fom
Mexican types, most seizures now are of raw opium in
■ the form of small sticks apparently originating in Persia,
I
Numerous lots have been taken from ships arriving at our
ports, the largest shipment being a total of more th^h fiftyone pounds taken from an American vessel in extended searches
at Hoboken, and 16? ounces taken from Chinese crew members of
a Dutch vessel at New York.
An interesting angle in these cases was that the sticks
had outer wrappers upon which were imprinted Arabic characters
which proved to be Persian versions of certain verses from
the Bible Book of Luke* Agents have been unable to develop
any particular significance to these quotations, which were
- 4 -
umMonopoly,"*"0
^
USUal labels of the Iranian Government Opi-
the veafwere
by Cu!toms a«* Narcotics Bureaus during
^milar narcotics5 a ^ n l l f q $ iU“‘ fflor?hi?e< heroin, and
8
s e iz u r e s f S r o f l ’ s t o i f t o ’ ? ?
ounces in 1941,
were somewhat fewer,
“ 1 9 4 1 ' M arih»a^
Ply to 12,830 ounces,
against 22,376
slightly, and marihuana arrests
oOo-
k
i
■ i in
i ni
i
n_a
Amount of taxes forgiven
as a p e r c e n t ^ ©
nf .fiiniTTUii. net income after taxes,/at selected levels
'
of net income
Married person
- No dependents
X
Net income
*
v*~-K .
■
tw
p\
before
Income
after
:
Amount of , «
personal 8
tax
jbax ÌJ
t*
exemption i(exclude^Victory*
t
$ 1,200
1,300
1,500
2,000
2,500
3,000
4,000
5,000
10,000
15,000
20,000
tax)
:
$ 13
48 ^
140"
232^
324
532 '
746 ■
2,152 J
4,052 ^
6,452
9,220 y
25,328 '
64,060y
414,000"
854,000 J
4,374,000 ^
50,000
100,000
500,000
1,000,000
5,000,000
# 1,200
1,287
1,452
1,860
2,268
2,676
3,468
4,254
7,848
10,948
13,548
15,780
24,672
35,940
86,000
146,000
626,000
feksi:
~ff-
|
yf“»Ìf
■»
.
1.056
3*3
7*5
10*2
12*1
15*3
17.5
27.4
37.0
47.6
58.4
102.7
178*2
481*4
584.9 '
698.7 '
A
J a n u a r y 29 ,
- Treasury- Department
Pi vision21of-ffax*R es earch
J,CrQ->
forgiven
* rwMisi» Rn«i plan ^
1 as a percent^gjr^
1
of ^income
1
after tax
1
mm
25,000
s
JjC>T
__|St
i//)4ximum earned income credit and no Jlong—term capital gains ,^tssuusd.
h
?■
(b-
r(0
MFrsecm - 1/29/43
Table 3
,« «
, i
».»..... . . y » «
without certain tax increases after 1935. at selected xevexb u
s
i
o°’ p“ ‘ 1
Married person r* no. dependents
Income tax liability on selected net income l/
$25.000: $100.000t$1.000 »000
:Taxable year:. $2 >000 ^ $3,000 » $5.000.» $10,00.0
$ z M 3 $ 32.^69 $ 679.044
$
415
80
$
193«
679,044
32.^69
2.US9
4i5
80
1939
717.584
3»sU3
1+3 .^76
528
110
1940
732,554
52,?o!+
6,861+
1.305
375
$
42
1941
654,000
6
i+,o
6
o
9,220
2,152
746
l40‘
1942
3
,662,226
225
.
17
s
2^,905
4,815
391
1S2
Total
vW
1.
Actual tax liability,
years 1938-1942
Total‘tax liability 193&~1942£^*»*'
iBeWwsg' 1942 liability
:w * d
'‘
' <3
3 ^ Total ta*liability 5.1938^1943 assuming no tax
increases under Revenue Acts of.
A. 1942
B. 19 Ì+I and 1942
C. 1940* 1941. and 1942
D. 1936 , 1940,. 1941. and 1942
2m
$
4 . Cmnnilative increase id tax liability.
5»
A.
Under
iaer Revenue
xievtsuuo Acts^>f 1940.»
IQ)IlT~»nd--194g - ^ > “
B.
Under Revenue Acts«
1^36
$
ijaXm
ì ..iiJwg-iQ
Tax liability forgiven -«tóarfssaaà^:
(1942 taxes) as a percent off
A* Increase in tax^Revenue Acts
1940-1942 X
B. Increase in JPax Revenue Acts
1936-1942
______ ___ ______ __
Til.auu.ij> Dujjart m c n t . D i v i s i on uf T a ^ R e n w«.riiL.
84
$
$161,118
645
$ 2.669
$15.685
$ 1 ,0 2 0
490
$ 3.9^8
2.4x4
400
400
2.075
2.075
$ 22,549
lé,507
12.445
12.445
$ 12,460 $
182
$
469
$
991
*
2.740
182
$
469
$
991
$
2,740
$213.822 $3.540,780
195,366 3.510,840
162,345 3.395.220
152,970 2,856,970
62,233 $ 267,006
12,460 $
Ì2,20g $
74,05k
102.0^
74.0
anuapy^Z
z&z
earned. ,m o.e c e « » anA
^
8 8 .7
805,256
319.
fable
2
Statement for quarter ending June 30,YÌlled
&
on June 1%* j/
'
*_r~
1#
Income from all source» during the quarter
2*
Income from wages and salaries
3#
emptied and dependent credit
(OnshSiwsatooi1 off mommi — tfitlta) n
ty*
Larger of (2) or (3)
3«
Balance
6.
Payment due: _ _ _ _ percent of (5) (p«rci
to he same as that used for collect!©
gl)
»I»“» ( 4 7
-Ja»uaryJg9*JLSfci
1/
* final adjustment would, of course, be made the
following March*
Table 1
Individual net income
:; $ Estimated number of taxpayers
surtax net income and type of income
for^ll9U2 and !9*+3f
4Uc
Humber of taxable income recipients
jun.
A
XAiriT |
28 ^
All o t h e r ^
u
Total
^
2 6 .5 ^
9 * o *"
35*5
3 9 -
^
1*5
^
CM
K 1
Wages and salaries
pl»e>a nominal
amount of other
income
30 ^
2 ^
2 * 0 •-
12 ^
10 ^
2 ^
3*5 y
hh ^
ho
h
^
27 ^
2
^
9 '
2
^
3/
j
I vh
Humber of taxable returns
I Wages and salaries
V_-^piue- a nominal
- amount of, other
income
All other 3 ^
Total
25
✓
2 3 t5 -
10 /
8,0 *'
35
^
31*5
/
s
1*5 ^
29
2 ,0
1 1 V-
^
3*5 ^
ho
36
^
h x
«C
\J L
A^txaJx^ m^
J
^
o^- t>-^WfiAv \>ve>trwUi
MJrsmw
1/29/k}
G>- ^ 4 A
^ m JLaj UX**3 ^
;
Telile 1
IIS
JEndisidual net income iais )( Estimated number of taxpayers
feriiI9U 2 and 19 ^ 3* by/surtax aet income and type of income
■4U*
k^J&OL/V-O
'***£¡¡£2
Crv^Uw^X >
l»"' 'vjbh^ M
Type of income
(2
*
V Sort ax a et income
1fetal £
._
s #2,000
,0bcT
>W
L^CvVut
V.
t e a
Sort an aet income
STotal :^fceea^than :
s
:
~^r\'
$2,000
Humber of tamable income recipients
1
Wages and salaries
plns>a nominal
amount of other
Income
All o t h e r ^
Total
28 ^
26*5 ^
1.5
11 ^
%o"
2*0
39'
35.5 '
{-r M T
,lU~ ■*(&*+**
I
32
«"
12 ^
3*5 ^
30 ^
2
10
2 ^
Ho ^
ii ^
Jlumber of taxable returns
Wages and salaries
a nominal
^ amount ojT other
income
All e t h e r ? /
Total
*-***
'
25
/
10 /
35
»/
83*5 '
1*5 ^
29 ^
27y
8*0
2*0 ^
11 ^
9 '
2 -
3*5 ^
ho '
36 /
h '
31*5
/
2
s
1^/ Humber of individuals receiving net income in excess of exempti on.
Zj Including sources other than wages and salaries, and also wages
and salaries combined with more than a nominal amount of other in
come •
Zj Humber of returns that will be filed on which a tax will be due.
This is less than the number of taxable income recipients because
of the filing of joint returns including the income of more than
one taxable income recipient, particularly in the smaller income
classes.
¿ L
l
35
Collection at the source^shoul^ certainly not begin later than
July 1 of this year.
7.
March 15, 19^3 returns
It should he emphasized that no matter when the system of
current collection is established and »hat that system may be, returns
on March 15, I9U3 , must be filed as usual.
If the taxpayers do not
clearly understand this point, great confusion will certainly result.
current are cLeem©^ tool gr^at, substantial currency for the great
\
/
majority of taxpayers can be achieved by making the basic liability
current with payment of the balance in the same manner as the whole
tax is collected at present, namely» in the following year*
5*
The transition -problem*
Another question is whether the transition to current payment
should be made by forgiving a year*s liability, by paying two year's
taxes in one, or by postponing or deferring one year's taxes feN*
M i i S t f f i i S I o v e r several years.
In the light of the revenue
needs of the Government, and the equitable distribution of the tax
burden^fbrgiveness seems very undesirable*
Complete doubling up
would undoubtedly be too harsh for some taxpayers.
i
Accordingly,r^ ss^L
'*
payment of taxes for the transition year^Sppears
:o<ifrt d e s i r a b l e ^ T h i s
discount or even a
v a r * ^ * * m
is not to say that some
amount of forgiven©ssynay not be found to
be desirable
"celleet^eftt1
“*■
6 . Time schedule.
A further question relates to the timing of a current collection
system
seems desirable to
pass legislation as soon as possible and to make it effective as
soon thereafter as possible.
/
Jt
pnrhanw 4iei't uptlinieiAo trCT*
Taìfr^rr
£
CONCLUSION
In this discussion of current income tax collection, or
pay— as—you—go, I have endeavored to indicate the principal
problems
■»**: in designing a satisfactory^system.
These problems are admittedly difficult.
i +
t
tawt
tLb..£4g.fe t-t.
»
A summary of the
issues, together with the best judgment of the Treasury as to
their solution, may be helpful.
1.
The rate of collection atAsource.
" mm “
iAA**
The question arises whether /collection at^source should be
sufficiently large to collect the basic liability,
>w«io I
or should be high enough to collect the whole
liability on the larger incomes at progressive rates. It wouljl
ojC
seem preferable to collect 4ßk the full basic liability, thui
^
'to
aid.
raakingfcu^ent jjlkpercent
jfc^pen
of «weg
/V
N
A A
!
For the
sake of simplicity and to^avoid unnecessary refunds, it seems
desirable, at least.»**
not tof attempt collection at
source at progressive rates.
2 . Exemptions under withholding,
:jjuAb A ' •' "■
Another question is whether t*me»tr"should be exemptions
^»
,
' \ a,
A
under a syétem of collection at source and^if so, whether they
should be uniform for all salary and wage earners or should take
Vài.j.j
- 31 -
have confused and demoralized the public and caused them
to doubt whether they will really have to bear tax burdens
as high as those imposed by the Revenue Act of 194<c,
- S O Td © r e q u i r e d in "the coining years.
It seems m o r e e q u i t a b l e
to collect at l e ast to a s u b s tantial d e g r e e the t ax
l i a b i l i t i e s w h i c h h a v e b e e n i m p o s e d b y p ast l e g i s l a t i o n
tha n t
o
a
y e a r !s l i a b i l i t y and r a ise the add i t i o n a l
revenue by increases
in rates.
fIhe—inethoo_ Ox T a t e xncrrea S d s ,
c o m b i n e d w i t h c a n c e l l a t i o n , w o uld
lrgej_y ±rce h i g h e r i n c omes
f r o n a y e a r !s taxes w h i l e i m p o s i n g the a d d i t i o n a l b u r d e n more
h e a v i l y on the low i n come
groups,
since it is at this level
that the'"income t a x is capable of f u r t h e r expansion, / * * *
addition,
tft& i n c r e a s e
yti rates v ^ L i a invoJpflafia ±s,r#e/L
CQii^ibut^on frto n e ^ ^ a x p a y e r j / t h a n
alteratives.
w ho w e V e \ o t
I'h^^e wrill be^Torne 5y^nilli^n
hdm&C
of p e r s o n s nfw$.y e n t e r i p g S ^ e
&&&£& ino.iviu.aols
T
predoj^Jinn
‘
i'his ^roup coi/sists p r i m a r i l y
labor/ m a r k e t ,
and hairier at war
w i l l be w o r k i n g X l o
x
p e r s o n s who w i l
h a v e to
VnM other
t ^ ^ i b l e ^ t o tin
ta x a b l e on theftr 1343
group,
e^tne^f of
p e r s o n s w ho
jobs,' and
shifting fro^w c i v i l i a n to w a r work,
i'his
iy i n the lower i n come classes, w p u l d
t Vigher
rates t h a n i£ c u r r e n t ' c o l l e c t i o n
w e r e ac h i e v e d e i t h e r X b y c o n t i n u i n g pay m e n t s on 194 2 liabilities
ofr >y p o s t p o n i n g t h e s \ payments,
-&nd t h i s N g r o u p h a s not
)Itobion»..
Lounterba.:
_
MO*#
j~Further, in v i e w of \our r e v e n u e needs, the forgiveness
A
of a y e a r ’s t a x l i a b i l i t y m i g h t be g e n e r a l l y m i s c o n s t r u e d
as an indfcation that
tax b u r d e n s c o u l d be m a d e l i g h t e r
i n s t e a d of b e i n g m a d e heavier.
Indeed,
there is considerable
e v i dence that even the r e c e n t d i s c u s s i o n s of t ax forgiveness
29
3.
T he P o s t p o n e m e n t of 1942 l i a b i l i t i e s
In v i e w of the h a r d s h i p s for
i n v o l v e d in the s i m u l taneous
some i n d i v i d u a l s
c o l l e c t i o n of 194 2 and 1943
t a x es,it m a y he des i r a b l e to p o s t p o n e or defer
of part of the 1942 l i a b i lities.
the p o s t p o n e d
tax w o u l d be
On e m e t h o d of c o l l e c t i n g
s i mply to r e q u i r e the t a x p a y e r
to p a y the p o s t p o n e d tax at hi s
n u m b e r of years,
the p a y m e n t
discretion within a certain
say b e f o r e M a r c h 15,
1945-.
A second m e t h o d
w o u l d b e to d i v i d e the p o s t p o n e d t a x into f i x e d i n s t a l l m e n t s
source or b y q u a r t e r l y payments,
and t r e a t i s e the additiona l
a m ount collected# as an o f f s e t to the p o s t
tpon
p o n e d l i aabbiilliittiieess
^^ ' ^
I should like to r e p e a t that the m e t h o d of t r a n s i t i o n
be d e t e r m i n e d in the l i ght of the r e v e n u e p r o b l e m of
the F e d e r a l government,
to w h i c h I h a v e p r e v i o u s l y referred.
V e r y great i n c f e a s e s in G o v e r n m e n t r e v e n u e are going to
28 £/be d e r i v e d f r o m i n d i v i d u a l s in the f i nal analyslli^'v.
R e v e n u e m e a s u r e s to m e e t the P r e s i d e n t * s r e q u e s t w o u l d take
f r o m i n d i viduals in the f i s c a l year 194 4 an a d d i t i o n a l
a m o u n t larger tha n the total e x p e c t e d 1943 i n c o m e
at p r e s e n t rates.
Clearly,
b u d g e t m e s s a g e into
carrying
taxes
the P r e s i d e n t s
effect w i l l m e a n p a r t i a l or com p l e t e
d o u b l i n g of p a y m e n t s for i n d i v i d u a l tax p a y e r s generally.
Of course,
the do u b l i n g w o u l d n o t
fall on the same taxpayers
in the same p r o p o r t i o n s as w o u l d r e sult f r o m c o l l e c t i n g
1942 income taxes in 1943.
Under these
circumstances,
c o l l e c t i o n syst e m and at the
shifting to a current
same t ime r e q u i r i n g that
i n d i v i d u a l s c o n t i n u e to p a y t h e i r l i a b i l i t i e s on 1942 income
is one w a y of r a i s i n g
need.
The
some of the a d d i t i o n a l r e v e n u e we
extra b u r d e n i n v o l v e d in p a y i n g p a r t or all of
1 942 tax l i a b i l i t i e s m u s t n o t be compared w i t h no b u r d e n
at all.
T he c o r r e c t c o m p a r i s o n is b e t w e e n that b u r d e n and
the- b u r d e n of other m e t h o d s of r a i s i n g the same a m ount of
a d d i t i o n a l revenue.
Accordingly,
the s i m u l t a n e o u s collection
of 1942 and 1 9 4 3 taxes s h o u l d n o t be c o m p a r e d w i t h complete
*4l€bM*©3a and no change in tax rates;
Q^ncGllrrMon
but w i t h c o m plete
c o m b i n e d w i t h a r ise in t a x rates.
Otherwise,
the c o m p a r i s o n is s i m p l y b e t w e e n m o r e taxes and less taxes.
- 27 t a x payers to p a y
v a r y widely.
two(yeaf1j?J$a.x l i a b i l i t y in one year would
S«www'****^'^
Those w h o h a d a c c r u e d their t a xes during 1942
and saved to p a y them c o u l d p a y the twc^year^ s ^ j ^ x e s in
1943 w i t h no d i f f i c u l t y whatever.
Others,
w ho h a d n o t accrued
or saved e s p e c i a l l y to m e e t taxes, but w h o h a d other credlj^-«^.
or a c c u m u l a t e d liqu i d savings could also m e e t the two /yea r i r J
V
Jk*0*
l i a b i l i t y in 1 943 w i t h o u t u n d u e hardship.
Still other
taxpayerthe
small,
the
and
amounts of w h o s e income
taxes w e r e
subject to t a x were
small, m i g h t b e able to m e e t
tfio yearfs J&hxes out of 1943 income w i t h o u t
mu
ftlwLi cl
Ht
V
diff i c t e t y C
T h e r e v/ould be, h o w e v e r ,
a c c u m u l a t e t a x re s e r v e s
|*7
¿taxpayers who f a i l e d to
in 1942,
and w h o c o u n t e d on p a y i n g
1 Q4.3 innnmp.
.tkain nnt
out of
of 1943
income* w h ^ & Q
e .raTfS
r a t g s of
of tax
tax w
would be
A
\
and w k os <
s> f in ancial^dTr'p urnstances
so high
so p r e s s i n g that the
p a y m e n t o.f
Lka ^ t.\
aAx a sA in| one year w o u l d be a severe
A twjo y e1a'
liSmmrr
i
h a r d s h i p $1 svjMa&
i£.
J / A c c o r d i n g l y , a p o l i c y of p a y i n g 1942 and 1 9 4 3 taxes all in
1/
a/
m o d e r a t e d in v i e w of the s u b s t a n t i a l
19'43 « a y n e e d to be» i
h a r d s h i p it w o u l d cause,
1C In this c o n n e c t i o n ^ i t ie- i m p r ; r ^ i v e ”^u/note^jthat
in h is B u d g e t message, ^fhe~"FresicLen’^ ^ s k e ^ ^ ^ - ^ T f d i l e c t i o n s
for the f i s c a l year 1 9 4 4 ^ b e i n c r e a s e d b y $,16. b i l l i o n dollars.
P r a c t i c a l l y all of this f l B ^ b i l l i o n i n c r e a s e in coll e c t i o n s
26
a l most 600 pe r c e n t of a y e a r Ts i n c o m e after taxes.
x'he
f o r g i v e n e s s of a y e a r fs taxes enables h i m to add to his
w e a l t h at one stroke as A m c h as he could a dd in 6 years
i
L.
^
A
md
b y saving every flOfirt* h e h a d left after p a y i n g taxe:
spending nothing,
and as m u c h as he c o u l d add: in 12 years
b y saving h a l f of w h a t he ha d left after p a y i n g taxes.
It h as
a o m o M 'MfrC- b e e n u r g e d that the gai n f r o m f o r
g i v eness is o f fset by the re s u l t i n g i n c r e a s e in e s tate
w h e n the i n d i v i d u a l dies.
tax
B u t t h e gain w o u l d be s u b j e c t to
the estate t ax o n l y if it is not
m e a n t i m e * a n d if the estate is
spent or g i v e n away in the
s u f f i c i e n t l y large to be taxable
under the l i b e r a l estate t ax exemptions.
subject to the estate tax,
A n d eve n if
the o f f s e t is o n l y partial,
reaching
50 per cent o n l y for n e t estates in excess of $2,500,000.
A
A special estate tax could,
of course,
be de v i s e d to recapture
a larger p a r t of the f o r g i v e n a m o u n t if it w e r e n o t
g i v e n a w a y in the m e a n time.
clos e d by s t i l l other
T h e s e loopholes,
special taxes.
too,
spent or
c o u l d be
B ut a n y of these devices
for r e c a p t u r i n g . t o the e x t e n t that t h e y are e f f e c t i v e ^ a m o u n t
s i mply to n o t fo r g i v i n g as ranch i n the first place.
2.
Simultaneous aollection of 1942 and 1945 taxes.
A
second m e t h o d of a c h i e v i n g t r a n s i t i o n is to
re q u i r e i n d i v i d u a l s to p a y their 1 942 t a xes at t h e
t h e y are p a ying their 1 9 4 3 taxes.
The
same time
a b i l i t y of particular
- 25 -
*
y
a net income of $ 1 0 0 , 0 0 0 he owes $64,060,
of his net income;
J.
$854,000,
or 64 p e r c e n t
w i t h a n et i n c o m e of $ 1 , 0 0 0 , 0 0 0 he owes
J
or 85 p e r c e n t of his n e t income.
The i n c r e a s e in i n c o m e taxes for the 5-year p e r i o d
..
/
1 9 4 0 - 4 2 amounts to $ 182 for a m a r r i e d p e r s o n w i t h no
dependents
and a n e t i n c o m e of $2,000.
i‘he amount that
K»
w o u l d he f o r g i v e n this i n d i v i d u a l is $140,
of the i n c r e a s e for the three years.
At
IS*'
or 77 p e r c e n t
the $ 1 0 0 , 0 0 0 level,
the a m ount f o r g i v e n equals 102 p e r c e n t of the i n c r e a s e
in taxes and at the $ 1 , 0 0 0 , 0 0 0 level,
320 percent.
F o r an
i n d i v i d u a l w i t h a $ 1 , 0 0 0 , 0 0 0 i n come in e a c h of the five
years 1 9 5 8 - 1 9 4 2 the r e d u c t i o n in tax l i a b i l i t i e s r e s u l t i n g
from c o m p l e t e f o r g i v e n e s s w o u l d m o r e t h a n o f f s e t all tax
i n c r e a s e s e n a c t e d since 1935.
»
The a t t a c h e d T a b l e 4 shows the effe c t of c a n c e l l a t i o n
/OfetZh
on the i n d i v i d u a l ’s w o a l t h in another way.
The a m o u n t
A
a v a i l a b l e to an i n d i v i d u a l each yea r to u s e for c o n s u m p t i o n
or to add to this w e a l t h is the inco m e he has left after
taxes.
T a b l e 4 shows the
amount of tax f o r g i v e n as a
p e r c e n t a g e of the i n c o m e lef t after
taxes.
For the
i n d i v i d u a l w i t h $ 2 , 0 0 0 i n c o m e the f o r g i v e n tax r e p r e s e n t s
only
about 7 1/2 p e r c e n t of a y e a r ’s i n c o m e
after taxes —
or the e q u i v a l e n t of less than one m o n t h ’s income.
i n d i v i d u a l w i t h $ 1 , 0 0 0 , 0 0 0 income,
F or the
the f o r g i v e n t a x represents
Insert in page 25
jrc-tLr**'
These results JO»*, of course, from the nature of the tax
increases that have heen imposed to finance the war»
These increases
have had to come primarily from the low and middle income groups.
The rates on the upper surtax brackets could not be increased corresDondingly.
At the same time, the amount of tax forgiven is
greatest for the highest income groups.
In consequence, the forgiveness
of I9 U2 taxes, urged as a means of adjusting payment methods to war
time, tax rates, would benefit most just those groups who have been
called upon to make the smallest relative addition to their tax payments
to finance the war.
- 94 -
have been computed on a liability basis; that is, we have
taxes for the year 1942, for the year 1945, and s.o forth,
measured by the incomes of those years.
The tax liability
for each year depends on the income of that yea.r and the
rates applicable to' that year.
Under standard accounting
practice they must be accrued for that year.
A shift to
the current collection basis wiping out a yearTs liability,
adds that much to the a-asets of each person by diminishing
his liability,
in tfee" only
a?®*»■
pie result is a real gain to the taxpayer.
<Ch,rt m
-regarded
haen
■
enly-Try LilU"%UdUTlh Lcurls, bu5~~by tho gcmoral
A
■ fidM TW .JI
t h e —gw jgn.'^ y '^ o i1
One way to judge the effect of forgiving the 1942 ta:
is in terms of the increases in tax liability which have
been imposed to finance the war and which have given rise to
the need to shift to a current collection system.
‘
This is
shown in the attached table 3, where it appears that the
complete forgiveness of the 1942 tax liability would, in
these terms, benefit persons with large incomes relatively
more than persons, with small incomes.
A married person with
no dependents having a net income of $2-,000 owes $140 tax
U-'*'
for 1942, or 7 percent of his' income; with a $10,000 net
income, he owes $S^150, or ^SjMpercent of his net income; with
- 23 o t h e r w i s e would.
Th e f o r g i v e n e s s of 1942 l i a b i l i t i e s
thus
a f f e c t s tax p a y m e n t s in d i f f e r e n t y e a r s for d i f f e r e n t
taxpayers.
So long as an i n d i v i d u a l ’s income is stable,
f o r g i v e n e s s c o m b i n e d w i t h c o r r e s p o n d i n g c u r rent collection,
w i l l n o t i m m e d i a t e l y a f fect his' tax -payments.
H o w ever,
if he has a c c u m u l a t e d l i q u i d funds.to d i s c h a r g e his
l iabilities,
And,
tax
these w i l l be a v a i l a b l e to h i m for other uses.
in any event,
of a y e a r 1S A t a x » ,
he w i l l u l t i m a t e l y escape the p a y m e n t
w h e n he
dies or his i n c o m e ceases.
W h i l e the effect of f o r g i v e n e s s on t a x p a y m e n t s is not
felt u n t i l the i n d i v i d u a l dies or his i n come dec l i n e s or
ceases,
A
c a n c e l l a t i o n ha s a s i g n i f i c a n t . i m m e d i a t e e f f e c t on
his economic
status.
The amount of t a x e s
c a n celled represents
a n 'irnmediatedadditiorifco the i n d i v i d u a l ’s n e t w e a l t h .
This,
addition, w h i c h de p e n d s on the i n c o m e of t h e - i n d i v i d u a l in
the year for w h i c h ' t a x e s
i n d i v i d u a l to i n d i vidual.
in that year,
and w a s n ot
are c a n c e l l e d ,
If an i n d i v i d u a l h a d no income
subject to tax, his economic^
p o s i t i o n w o u l d n o t be improved.
and the entire t a x was
v a ries w i d e l y from
I f ^ g J ' h a d an i n c o m e of $3,000,
cancelled,
h a d an income of $1,000,000,
he w o u l d g a i n $324.
If he
he w o u l d gai n $854,000.
T h e e x i s t e n c e of an imm e d i a t e
gain has b e e n d e n i e d on
the ground, that t ax pay m e n t s continue.
The fact is,
that t h r o u g h o u t the h i s t o r y of the income tax,
however,
our t a xes
change.
If they a re y e a r s o f lower n a t i o n a l income,
governmental receipts ^ o u l d l f e c r e a s e j e a - J a w a ^
the
A
change.
gSriih-kQ..t h e .Tr earsnry
ustomers
had
m u c h money
l i a b i lities,
offsetting
r e f l e c t s l a rger p a y m e n t s b y
smaller p a y m e n t s b y others.
some taxpayers,
I’he t a x p a y e r s wh o
p a y less are those w h o s e incomes h a v e d e c l i n e d or ceased.
T he
t a x payers w ho p a y m o r e are those w h o s e in c o m e s h a v e
increased
so that t h e y b e c o m e t a x a b l e for the f i r s t time
or h a v e to • p a y
a l a rger
amount of t a x sooner t h a n the y
change.
If they a re y e a r s o f lower n a t i o n a l income,
g o v e r n m e n t a l r e c e i p t s ttKould^Secrease^^wa-
the
A
change.
rt3^tr^^fesTiih.to,--the.Treasury
^
ir~S!(r^ffect "of Ç)rgiveness on the economic
status of individuals.
¿5* K' ,
,'~<Ufrhe effect of wiping out an income tax asset through forgiveness
^
I 4 <f
^
can be more readily visualized and measured in terms of its relative
-1
I'1'-- ';/ ''
•' '■
w-:'
Ja
f V effect on the different groups in the community who will he called
\ --.,m
upon to maintain the flow of revenue.
O "billion d o l l a r s —
T he fa 4 y t h a t
i n a f i s c a l year,
liabi l i t i e s ,
offsetting
the G o v e r n m e n t m a y take in as m u c h m o n e y
d e s p i t e the f o r g i v e n e s s ox a y e a r ' s .tax
r e f l e c t s larger p a y m e n t s b y
smaller p a y m e n t s b y others.
p a y less are those w h o s e
T he
some taxpayers,
Th e t a x p a y e r s who
incomes h a v e d e c l i n e d or ceased.
t a x p ayers w h o p ay m o r e are t h ose w h o s e i n c o m e s h a v e
i n c r e a s e d so that t h e y b e c o m e t a x a b l e for the f i r s t time
ox^have^o
A
p ay a l a r g e r amount of t a x sooner t h a n t h e y
the Eederrrl treasury ¡resulting from placing the income tax
A
'
L-
on a current basis and forgiving a year s taxes can not be
determined except by comparing this treatment with some
alternative.
If the comparison is with the present payment
method at existing rates, the cancellation of 1943Lliabilitie
combined with current collection of subsequent liabilities
need not involve either an increase or decrease in the amount
of money taken into the Treasury in any given span of years.
Each individual subject to taxation in 1942 has one yearTs
liability cancelled, but he is at the same time required
to pay another ye a r fs liability sooner than he otherwise
w ould.
Individuals who were not taxpayers In 1942 but who
become taxpayers subsequently will be obliged to pay
their liabilities one year sooner than under existing law.
Individuals who die, or who cease receiving an income, pay
the Government one yearns less1taxes, but the money loss
on their account is o f f s e t ( ^ y ^ n T T a r g ^ by the i S o T iiisrtP'"
new taxpayers iregin paying their taxes a year e a r l i e r T h e
net result in money paid jpto the Government depends on
whether the payments dropped out exeed or fall short of
the payments added in the same year.
The payments dropped
out will be spread over a period of years.
L S
If these years
a t * UhlLJu&#***.
a r e in general years of higher national income..thanJ^EI42
actual receipts of the Government yefeould be increased by the
-
;S
H
I
U
i
aMHppPI^
flv/m?; r s*
6 *
■
m£m mm
mm
m
fhe
tm
Ui^iiUr
of
the taxpayer 1 «
m mmm% #f fht
| although it iff K>t Counted US W^ 1 iw til© general
account s #f the SoTeraaente ftagriiftfiee»nef fbt&irltog a f#«»' •
wipe out assets oi this kin
tax would h ejjlft'i
bwii
ul ten-
agaountimg te elose to $10 hill lex **** the eeti*»ted
o«
x^sineose. $ U
tm i
■ mtirurra
would
19^ forglTiag a year's tax llahtliiiee^he discarding
iiwd—
m n II assets Jpfr as M
R
a toutlaeas^that cancelled
Ilf. its account« reeeivshlelfre» euetoaers.
'dg>
$ueh a hu»i»e«e
alght he able te maintain it« receipt» hy gcing on a «**h
Tet no one would nay that the husinee« had set
lest assets te the exteat of the accounts csaeeUed.
& •
% n f i s * t dlffere fro® the business la that It ha* the power
to «she up the loss by i m p e l l i n g quicker eelleetlcac sad hy
imposing additional taxes en the earn« or other people*
fhroa#
the resulting partial redistribution of the tax harden the ea*h
though
reeeip«» of «ha
UidlUtr
m m
Am
eoald he «eietelned evwy^flMN «he »«*
c
Lm
m
*
>
■ 11
iriirienirnini
■MM
sales hasls*
1.
F o r g i v e n e s s of a y e a r fs t a x e s .
A m e t h o d of a c h i e v i n g t r a n s i t i o n that has b e e n w i d e l y
d i s c u s s e d is to f o r g i v e a y e a r ’s liability.
of two y e a r ^
l‘he overlapping
t a x l i a b i l i t i e s ca n b e c o m p l e t e l y eliminated
o n l y t h r o u g h f orgiveness,
T he a m o u n t of f o r g i v e n e s s would
be g e a r e d to the d e g r e e of c u r r e n t c o l l e c t i o n achieved.
If c u r rent c o l l e c t i o n w e r e to a p p l y to the t o t a l liability,
the c o m plete e l i m i n a t i o n of o a r - l a p p i n g w-ould r e q u i r e the
f o r g i v e n e s s of the wrh o l e of a y e a r * s tax.
If c u r r e n t
c o l l e c t i o n ware' to a p p l y to the b a s i c l i a b i l i t y - the normal
t a x a n d 1 the
surtax at the f i rst b r a c k e t rate - the complete
e l i m i n a t i o n of o v e r - l a p p i n g w o u l d r e q u i r e the f o r g iveness
of a y e a r 1à b a s i c liability,
bu t n o t of thé rest of the
tax.
C o n s i d e r a b l e c o n f u s i o n h as a r i s e n in the c o u r s e of
the w i d e s p r e a d d i s c u s s i o n of p r o p o s a l s t o . f o r g i v e
a y e a r !s
taxes as a m e a n s of shifting to c u r r e n t c ollection.
m a i n points n e e d clarification:
on F e d e r a l revenue;
and
its
(l)
Two
the effect of forgiveness
effect on the
economic
D o s i t i o n of i ndividuals.
a.
The E f f e c t of F o r g i v e n e s s on F e d e r a l
ievenues.
a
T he effect on the a m o u n t of .money t a ken into _
19
d i s c u s s i n g the first problem.
to the seco n d p r o b l e m —
T should like n o w to t u r n
that of transition.
A t r a n s i t i o n p r o b l e m a r ises b e c a u s e if we
start collecting
this year the t a x on this y e a r fs income w i t h o u t any other
action,
t a x p a y e r s w i l l be o b l i g e d to m e e t i n a single year
b o t h the t a x on last year n s i n c o m e and the t a x on this year s
income.
To the extent t h a t we go on a c u r r e n t b a s i s in 1943,
w i l l c l e a r l y be a d o u b l i n g up of t a x payments.
The extent
of the d o u b l i n g - u p depends on the amount c o l l e c t e d currently.
F or example,
if current c o l l e c t i o n a p p lies to n o r m a l t ax
and the s u r t a x at the f i r s t b r a c k e t rate,
t h ere is doubling-up
w i t h r e s p e c t to this par t of the tax, b u t t h e r e is no
d o u b l i n g — u p w i t h respect to the higher
s u r t a x rates.
c u rrent c o l l e c t i o n applies to the entire tax,
If
there is
d o u b l i n g - u p w i t h r e s p e c t to one year *s w h o l e t a x T ^
B.
I
P o s s i b l e m e t h o d s of A c h i e v i n g T r a n s i t i o n .
One m e t h o d of a c h i e v i n g t r a n s i t i o n is to forgive part or
all of a y e a r 1s tax liabilities.
A second m e t h o d is to require
1
i n d i v i d u a l s to continue to p a y their 1 942 taxes as at present,
and at the same time* b e g i n cu r r e n t c o l l e c t i o n of 1943 taxes.
A third m e t h o d is to p o s t p o n e par t or all of a y e a r fs liabilities,|
p e r m i t t i n g the p o s t p o n e d amounts to be a m o r t i z e d over a period
longer
than a year.
18 -
C o n t i n u i n g the p r e s e n t m e t h o d of c o l l e c t i n g liabilities
in excess of the n o r m a l t ax and s u r t a x at the first b r a c k e t
rate would,
as p r e v i o u s l y mentioned,
o n l y 10 p e r c e n t of the taxpayers.
leave n o t f u l l y current
Of these n i n e - t e n t h s
w o u l d h a v e m o r e ^ han t h r e e - q u a r t e r s of their t o tal l i a b i l i t y
c u r r e n t l y paid.
F or o n l y one t a x payer
in a h u n d r e d w o u l d
the t ax l i a b i l i t y n ot p a i d c u r r e n t l y amount to m o r e tha n
one q u a rter of his total liability.
F u l l c u r rent p a y m e n t w i t h o n l y m i n o r a d j u s t m e n t s
after
the end of the year c o u l d be d e v i s e d for all t a x p a y e r s if
this w e r e desired,
To a c c o m p l i s h this the c u r r e n t q u a r terly
p a y m e n t s p r e v i o u s l y d i s c u s s e d w o u l d be e n l a r g e d to include
n o t only the b a sic liability,
higher
s u rtax brackets.
bu t also l i a b i l i t y in the
E a c h q u a r t e r l y p a y m e n t could be based
either on an estimate of income for th e year or. on an estimate
of income for
the quarter,
in either case w i t h appr o p r i a t e
a d j u s t m e n t s d u r i n g and after the year.
IV.
A.
The p r o b l e m of t r a n s i t i o n .
T h e n a t u r e of the p r o b l e m
Two d i s t i n c t p r o b l e m s are i n v o l v e d in p u t t i n g the income
t ax o n a p a y — as— y o u — go b a s i s — - first,
p a y m e n t that is b e s t for
second,
the m e t h o d of current
steady y e a r - i n y e a r - o u t use;
h o w to shift to that method.
So far,
and
I have been
- 17
adopted,
o nly a small m i n o r i t y of taxpayers w o u l d n ot become
c u r rent w i t h r e s p e c t to the greater p art of their liabilities.
Of the 4 4 m i l l i o n t a x p a y e r s e s t i m a t e d for 1943,
w o u l d hav e
o n l y 4 million
surtax n et i n comes in excess of $2,000,
i n excess of the first s u rtax bracket.
that
Is;
To p r o v i d e complete
current c o l l e c t i o n for this group in the h i g h e r inco m e brackets
prese n t s o b v i o u s d i f f i c u l t i e s b e c a u s e of the g r a d u a t i o n of
the t a x r a tes d e p e n d i n g on the amount of i n c o m e received.
F o r t u n a t e l y this is also the g r o u n for w h o m ful l cu r r e n t
col l e c t i o n is l e ast essential.
Theo » tasssayers hav e b e e n
a c c u s t o m e d to paying taxes for m a n y years,
the r e s o u r c e s and fhe e x p e n d i t u r e h a b i t s
A
a d vance a c c u m u l a t i o n of t a x funds.
suddenly,
they w o u l d g e n e r a l l y
a nd t h e y h a v e
suitabl e to an
If their income
stops
still be in a p o s i t i o n to
m e e t their ta x l i a b i l i t i e s over and above the c u r r e n t l y paid
basic l iability.
Moreover, m o s t of this g r o u p of h i g h e r
bracket taxpayers would become
s u b s t a n t i a l l y c u r rent if the
m e t h o d s p r e v i o u s l y d e s c r i b e d for c o l l e c t i n g c u r r e n t l y the
n o r m a l t a x and m i m i m u m s u r t a x w e r e put into operation.
It
0,
should be o b s e r v e d that s u c h c u r r e n t c o l l e c t i o n m e t h o d s would
a p ply to all of the inco m e of the t a x p a y e r r e g a r d l e s s of
/
uui
\M
rh i c h it fell.
Thu s a vtssesm* w i t h /vmt—
svuCX
tTfo
ooQ J
■4» oonc of if11 0 , Of^r aby yo oiirfjjiptidoi»g would, at a 19 percent
4
basic l i a b i l i t y rate,
Q
pay currently
Jd
f~zr£*d&
of a
total
^
¿r-y-
Ojooq
UnrvjLfl /h IM
H S" /$&&*%
j
16
businessmen —
to gear their
t a x /payments m u c h m o r e closely
to income t h a n is p o s s i b l e u n d e r the p r e s e n t
q u a r t e r l y i n stallments.
system of equal
The q u a r t e r l y sta t e m e n t of current
i n c o m e w o u l d be simple in form,
as shown in T a b l e 2.
It
should be n o t e d that similar sta t e m e n t s w o u l d be n e c e s s a r y
under
the m e t h o d of b a s i n g p a y m e n t s on last y e a r * s income.
3.
Q u a r t e r l y s t a t ement m e t h o d for i n c o m e f r o m
sources o t her t h a n w a g e s and s a l a r i e s .
P e r s o n s of small m e a n s w i t h i n c o m e f r o m such sources
as b u s i n e s s profits,
p r o f e s s i o n a l fees,
and f a r m incomes,
c o uld be put on a p a y - a s - y o u - g o b a s i s b y the f o l l o w i n g
steps:
fjjxAX&k» E v e r y three m o n t h s the y w o u l d file a
simple
statement of their b e s t es t i m a t e of n e t
inco m e f r o m sources n o t subject to c o l l e c t i o n
at source.
O n the b a s i s of such i n come less p r o r a t e d
exemptions,
they w o u l d p a y a t e n t a t i v e
tax e a c h
q u a rter at the b a s i c - l i a b i l i t y rat e u s e d in
c o l l e c t i n g taxes at source.
^■ngar After the close of the year,
r e p o r t a c tual income,
they w o u l d
compute the a c t u a l liability,
and m a k e the n e c e s s a r y adjustment.
C.
The t r e a t m e n t of t a x p a y e r s w i t h higher..incomes..
If c u r r e n t c o l l e c t i o n at the b a s i c - l i a b i l i t y r a t e were
p r e sent
system that we
It m a y he
seek to avoid.
suggested that the defects of such a system
can h e p a t c h e d h y a r e l i e f p r o v i s i o n w h i c h w o u l d perm i t
adju s t m e n t s in the ten t a t i v e
tax w h e n the c u r rent y e a r ? s
income is ex p e c t e d to diff e r f r o m the prior y e a r 1s income.
But since f l u c t u a t i o n in i n c o m e is the rule,
a provision
de s i g n e d to h a n d l e e x c e ptions w o u l d to the extent it was
f o l l o w e d a c t u a l l y b e c o m e the rule.
T a x p a y e r s m i g h t he
expected to take a d v a n t a g e of a p e r m i s s i v e p r o v i s i o n w h e n
their in c o m e s w e r e declining,
b.
h u t they coulu
A
uc expected
Tentative payments based on quarterly
statements of this year*s income.
Since c o r r e c t i o n s to take care of fluctuations
in incomes wnuld. depart in so m a n y cases f r o m the p r ior year s
income,
it m a y h e h e l p f u l to consider a m e t h o d w h i c h w o u l d
go mor e d i r e c t l y to c u r r e n t income.
Thus,
a system of
q u a r t e r l y p a y m e n t b a s e d on q u a r t e r l y s t a t ements of current
income m i g h t h e put into effect.
and p a y m e n t
S u c h a q u a r t e r l y statement
s y stem w o u l d h e a supplement to c o l l e c t i o n at
source on w a g e s and salaries.
seasonal i n c o m e s —
for
It w o u l d e n able t a x payers with
example,
farmers
and m a n y types of
14
G o ins on
u p o n w h a t his income w a s in Y e ars 1, 2, and
to Year 4, w h e n the t a x p a y e r fs i n c o m e is a c t u a l l y $2,000,
n
he w i l l p a y a t e n t a t i v e ta x of ft-,
i n c o m e of Year 3, and,
serf on the $8,000
in addition,
he w a l l also h a v e to
p a y a d e f i c i e n c y of alii,39-g for Yea r 3 b e c a u s e in that year
he h a d pai d -a t ax m e a s u r e d b y the Year
2 .income of $4,000,
w h i l e his actual Year 3 income w as $8,000.
r e q u i r e d in Year 4 to p a y a total of
than his income in that year.
rise or fall,
0 jifi.#*, or
Thus, w h e n i n c omes
more
either
the ta x p a y ments in a given year are b a s e d
on the income of the two preceding years
*
He is thus
and are not
r e l a t e d to the inco m e of the c u r r e n t year.
As has b e e n p o i n t e d out,
stable incomes,
this m e t h o d w o r k s w e l l for
b u t w i t h o u t f u r t h e r r e f i n e m e n t does not
w o r k w e l l for f l u c t u a t i n g incomes.
A t a b i l i t y is the
exc e p t i o n r a t h e r than the rule. M o s t i n c o m e s are
c h a r a c t e r i z e d b y f l u c t u a t i o n - up one year,
or up for
d o w n the next,
several years,
and then d o w n for s e veral years.
A JL'itvut* yAvtl
It is e s t i m a t e d that the incomes of -n
o
W
onfr»
of the tax p a y e r s for 1943 w i l l v a r y substantially,
either
up or down, f r o m their 1942 incomes.
To b ase the t e n t ative p a y m e n t s on l a s t y e a r * s income
w h e n that i n come w i l l g e n e r a l l y b e
something h i g h e r or lower
/ a
//.
Example of tax payments under a system of current
collection ‘based on previous year1s income l/
Married person - No dependents
Year
: Net income
2/
Year 1
$2,000
Year 2
^,000
Year 3
Year H
>
: Deficiency
:Tentative tax:due to under: payment in
:
11
; prior year
y
y
y
$
1U0
8,000
53 s
2,000
1.562
$
Total
payments
during
year
y
$
1U 0
398
936
1,02H
2,586
»ffiiTjgiugry■»; 1 ^ 3
l/ Under rates and exemptions of the Revenue Act of 19^2, excluding
Victory tax.
2 j Assumed to he derived from items not subject to collection at
source; minimum earned income assumed.
3 / The tentative tax is the same as the tax payable under the present
method of payment on the income received in the previous year.
It is assumed that the taxpayer had no taxable income for years
prior to Year 1. Therefore, there is no tax payable in Year 1
and no deficiency or credit in Year 2.
13
pr e v i o u s year d i f f e r e d in tur n f r o m the i n c o m e of the year
prior to it.
If a p e r s o n 1s i n c o m e wer e
stable f r o m year
to year,
his t a x p a y m e n t s u n d e r this p l a n w o u l d be substantially
current.
If, however,
his income w e r e n o t
be v e r y far f r o m b e ing c u r rent
stable, he m i ght
since his t ax p a y m e n t s in
any year w o u l d not be g e a r e d to the inco m e of that year.
Thus,
a p e r s o n w h o s e pi n c o m e i n c r e a s e d from yea r to year
w o u l d hav e d e f i c i e n c i e s to m a k e up e ach year, w h i l e a
p e r s o n w h o s e income d e c r e a s e d from year to year w o u l d have
c r edits or r e f u n d s due hita eac h year.
in income w e r e
If the f l u c t u a t i o n s
such that i n c r e a s e s and d e c r e a s e s alternated,
the d e v i a t i o n f r o m c u r r e n t p a y m e n t wrould be all the.greater.
To i l l u s t r a t e the i n a d e q u a c y of this m e t h o d w i t h
an extreme, let us a s s u m e that a tax p a y e r in four successive
A
years h a d income of $ 2 , 0 0 0 i n Year 1, 44,Q00 in Y e a r 2,
4po,000
in Year 3, a nd $ 2 ,000 in Yea r
4pg
‘p a y m e n t in
1U J S 3 8
ar 3
w o u l d b e - e (tentative) a m o u n t ¿¡¡T ffooa?
b a s e d on the $ 4 , 0 0 0 i n c o m e for Year 2.
In addition,
he w rould
also in Year 3 h a v e to p a y a d e f i c i e n c y o f ^ 4 ^ in taxes
for Year 2, b e c a u s e in that year he h a d pai d a t e n t a t i v e
tax b a s e d on an i n come of o nly $2,000,
his i n come in Year
1, w h e r e a s his a c t u a l i n come in Year 2 w a s $4,000.
Thus,
the p a y m e n t s w h i c h the taxpayer m u s t m a k e in Year 3 depend
12
be put on a current basis,
m a y be employed.
one of two a l t e r n a t i v e m e t h o d s
One m e t h o d w o u l d bas e t e n t a t i v e c u r rent
p a y m e n t s on p r i o r - y e a r income.
The other m e t h o d w o u l d base
t e n t a t i v e c u r r e n t p a y m e n t s on simple q u a r t e r l y s tatements
of income r e c e i v e d in the current year.
A fu r t h e r discussion
of these two m e t h o d s m a y be helpful.
2.
A l t e r n a t i v e A p p r o a c h e s to a S o l u t i o n
a.
T e n t a t i v e Pay m e n t s B a s e d on last y e a r Ts income
U n der the first of the two m e t h o d s for collecting
taxes on n o n - w a g e i n c omes the taxpa y e r w o u l d be r e q u i r e d to
m a k e t e n t a t i v e p a y m e n t s in the c u rrent year on the b a s i s
of the p r e v i o u s y e a r Ts i n come and to m a k e an a d j u s t m e n t ih
the f o l l o w i n g year for o v e r p a y m e n t or u n d e r p a y m e n t . F o r example,
thé t e n t a t i v e t a x for 1 9 4 4 w o u l d be b a s e d on the i n c o m e of
1943 as r e p o r t e d on M a r c h 15, 1944.
year,
on M a r c h 15, 1945,
w o u l d be made.
too small,
After
the end of the
a f i n a l c a l c u l a t i o n of 1 944 income
If the t a x p a y m e n t s in 1 9 4 4 p r o v e d to be
the d e f i c i e n c y w o u l d be p a i d at this time.
the p a y m e n t s p r o v e d to b e too large,
If
the t a x p a y e r w o u l d
re c e i v e a c r e d i t or r e f u n d of the excess payment.
U n der this
system the tax pa y m e n t s m a d e i n . e a c h year
would d e p e n d n o t o n l y on w h a t the i n come h a d b e e n In the
previous year, b u t also on h o w m u c h the i n c o m e of that
11
t a x p ayers w i l l be in this group.
Their p r o b l e m is different
f r o m that of w a g e and salary earners,
and the s y s t e m of
c u rrent c o l l e c t i o n w h i c h is set up for the m m u s t differ
accordingly.
1. P a y m e n t P r o b l e m
The i n c o m e s of several m i l l i o n small t a x p a y e r s consist
of b u s i n e s s profits,
receipts.
p r o f e s s i o n a l fees,
rents,
and f a r m
The f l o w of i n come f r o m most of these
f l u c t u a t e s w i d e l y from y ear to year,
fro m s e ason to season.
sources
and f r e q u e n t l y eve n
Under our p r e s e n t
system these
tax p a y e r s o f t e n f i n d that their tax -payments are b a d l y out
of step w i t h income.
and e ven hardship.
T h e r e sult in m a n y cases is d i f f iculty
Mor e o v e r ,
the tax p a y m e n t s of
such
p e r s o n s on a q u a r t e r l y b a s i s m a y n ot at all c o i n c i d e w i t h
the r e c e i p t of cash income,
w h i c h m a y be l u m p e d in one
q u a r t e r or two qu a r t e r s of the year.
off or
stops entirely,
same d i f f i c u l t i e s as
these t a x payers
are f a ced w i t h the
small w a g e and s a lary earners.
n e e d for a p a y - a s - y o u - g o
as p r e s s i n g
A n d w h e n i n c o m e drops
The
system of tax c o l l e c t i o n is fully
for t h e m as for w a g e and s a lary earners.
S i nce the i n c o m e s of these p e o p l e come in i r r e g u l a r
a m o unts
and f r o m m a n y d i f f e r e n t payors,
the n e e d for
c u r r e n t p a y m e n t c a n n o t b e met by c o l l e c t i o n at the source.
If p e r s o n s w i t h small incomes f r o m n o n - w a g e
sources are to
10
c o l l e c t i n g the V i c t o r y T a x on w a g e s and salaries.
/Collection
1
at source of the V i c t o r y T a x shou l d be i n t e g r a t e d with
c o l l e c t i o n at source of the r e g u l a r income tax.
However,
abs o r b i n g the V i c t o r y t ax into the r e g u l a r i n c o m e t a x system.
The C o m m i t t e e m a y w i s h to co n s i d e r the d e s i r a b i l i t y
of c o l l e c t i n g at sourde the b a s i c l i a b i l i t y on dividends,
as w ell as on w a g e s and salaries.
the n o r m a l and first b r a c k e t
the gross amount.
of course,
In the case of dividends
s u r t a x could be
c o l l e c t e d on
The a d m i n i s t r a t i v e p r o b l e m s will,
h a v e to b e weigh e d ,
but
since d i v i d e n d r e c eipts
I
r e p r e s e n t a sizea b l e p o r t i o n of the i n come of m i l l i o n s
of tax p a y e r s for 1943,
c o l l e c t i n g the t a x cm suc n income at
the source w o u l d be a c o n s i d e r a b l e c o n t r i b u t i o n to a pay*~
The in c o m e s of m a n y t a x p a y e r s do n o t r e a d i l y fit into
a syst e m of c o l l e c t i o n at the source.
B y far the largest
group of such t a x p ayers c o n sists of those w h o r e c e i v e ^ d m c o m ^ ^ i
f r o m sources o t her than w a g e s or salaries,
and w h o s e
total
i n c o m e is n o t in excess of the f i r s t s u r t a x bracket.
.
194 3 it is e s t i m a t e d that 10 m i l l i o n of the 44 m i l l i o n
For
's/J
9
cases u n der a w i t h h o l d i n g
s y s t e m n o t g e a r e d to a c t u a l incane
"to-x exemptions •
Second.
T he rate a p p l i e d to the w a g e an d salary payments
after t h e s e ^ a l l o w a n c e s w o u l d b e set so as to
a p p r o x i m a t e l y t he b a s i c t ax liability,
t h a t is,A the n o r m a l
t a x o f 6 p e r c e n t p l u s the m i n i m u m surtax r a t e of 13 percent.
However,
the r a t e w o u l d be
s l i g h t l y "lower t h a n the sum of
the n o r m a l t ax and the first b r a c k e t s u r t a x i n o r der to make.
for ded u c t i o n s and to a l l o w for vacations
w i t h o u t pay,
o c c a s i o n a l p e r i o d s of u n e m p l o y m e n t ,
a nd possible
f l u c t u a t i o n s in i n c o m e a b ove a nd b e l o w the t a x a b l e limit.
In this way,
r e f u n d s for o v e r - p a y m e n t at the
source w o u l d be
h e l d to a minimum.
Third.
A f t e r the c l o s e of the year,
w o u l d file afrirolr r e t urns
these taxpayers
s h o wing their a c t u a l i n c o m e and
f i nal l i a b i l i t y for the year.
A d j u s t m e n t s of a c t u a l collections
at source to the f i n a l l i a b i l i t y w o u l d b e m a d e b y m e a n s of
a d d i t i o n a l p a y m e n t or refunds.
earners,
For
the v a s t m a j o r i t y of wage
such a d j u s t m e n t s w o u l d i n v o l v e a d e f i c i e n c y or
r e f u n d of o n l y a f ew dollars,
j
F o u r t h . A p a r t f r o m the a l l o w a n c e of e x e m p t i o n s according
to m a r i t a l a nd d e p e n d e n c y status,
the e s s e n t i a l m e c h a n i s m
for s u c h a m e t h o d of c o l l e c t i o n at source is a l r e a d y
e s t a b l i s h e d u n d e r the w i t h h o l d i n g m a c h i n e r y a d o p t e d for
-
liabilities.
8
-
'
Thi s o b j e c t i v e can b e A achieved b y collecting
at source o n l y on amounts of i n c o m e in excess of* an allowance
for e x e m ptions and deductions.
of e a c h wag e or s a l a r y p a y m e n t
I n other words,
the amount
subject to c o l l e c t i o n at
source w o u l d be d e t e r m i n e d b y s u b t r a c t i n g f r o m the gross
p a y m e n t an a l l o w a n c e for p e r s o n a l exe m p t i o n s and n o r m a l
d eductions.
T h e s e all o w a n c e s w o u l d be p r o r a t e d a c c ording
to the l e n g t h of the p a y period,
monthly,
or other period.
that is, weekly,
F o r example,
semi-monthly
under existing
e x e m p t i o n s the w e e k l y al l o w a n c e m i g h t be $ 1 1 . 0 0 for a
single person,
¥ 2 6 . 0 0 for a m a r r i e d couple,
a d d i t i o n a l for e a c h dependent.
and $ 8 . 0 0
T h e s e amounts are m ade
s o m e w h a t l a r g e r t h a n the p r o r a t e d annual e x e m p t i o n in order
to i n c o r p o r a t e an a l l o w a n c e for average dedu c t i o n s .
The
a l l o w a n c e for p e r s o n a l e x e m p t i o n s w o u l d be b a s e d on a simple
sta t e m e n t f u r n i s h e d b y the e m p l o y e e to his employer.
It is i m p o r t a n t to n o t e that a ny s y s t e m of w i t h h o l d i n g
i n c o m e t ax w h i c h d oes not a l low exemptions,
or w h i c h allows
o n l y a u n i f o r m e x e m p t i o n for all e m p l oyees w i t h o u t regard
to their m a r i t a l or d e p e n d e n c y status, w o u l d n o t m e e t the
need.
S u b s t a n t i a l u n d e r - c o l l e c t i o n ^ w i t h r e s u l t i n g large
deficiency payments^or
substantial over-collections with
r e s u l t i n g l a r g e r e f u n d s or both, w o u l d r e s u l t in numerous
n
It should he keot in mind that collection at source does not
in itself increase or decrease the tax liability of the taxoayer.
Collection at source is merely a device designed to helo the
individual pay his income tax currently as'he earns his income.
The individual receives full credit for the amounts collected at
source when he files his tax return at the end of the year.
The
amount of the tax liability is determined by the rates imposed on
everyone, whether the liability* is collected at source or not.
Conseouently, it is the rate of tax liability that determines the
rate of collection at source* ajaAwftflA fete1*
l D lMjTTSjSCr»
- 7 s a lary e a r n e r ^ ? " t a x e s w o u l d be a u t o m a t i c a l l y b u d g e t e d
b e c a u s e t ax pay m e n t s w o u l d c o i ncide w i t h the r e c e i p t of
income.
At
the same time the p r o b l e m of income t a x debt
w o u l d be e l i m i n a t e d for thjsc'taxpayer
and the first b r a c k e t surtax,
If the n o r m a l tax
that is,
the «basic l i a b i l i t y ”
w e r e c o l l e c t e d at source i n this manner,
50 m i l l i o n of the
44 m i l l i o n taxpayers
or n e a r l y 7®/ percent,
w o u l d be current.
e s t i m a t e d for 1945,
(Table l)
No p a y - a s - y o u - g o p l a n is
:e u n l e s s it m a k e s ■actfrnarfim n i
$y cu r r e n t at least
this g r oup of w a g e and salary earners.
( A c o l l e c t i o n at source system m u s t b e f r a m e d w i t h
these c r i t e r i a in views
T he c u r r e n t c o l l e c t i o n s m u s t
a p p r o x i m a t e as c l o s e l y as po s s i b l e the e m p l o y e e ^
for the year;
liability
the e m p l o y e e mus t n o t be r e q u i r e d to m a k e
q u a r t e r l y or other u n n e c e s s a r y returns;
the m a c h i n e r y of
c o l l e c t i o n m u s t be m a d e as a d a p t a b l e as p o s s i b l e to the
accounting
and b u s i n e s s m e t h o d s of the employer.
The
p r i n c i p a l elements of a c o l l e c t i o n at source p l a n that
w o u l d m e e t these c r i t e r i a m a y b e s u m m a r i z e d as follows:
¿2* /oJaXszj» j
First.
WMfce^fcny p a y - a s - y o u - g o p l a n should currently
d i s c h a r g e as m u c h ' a s p o s s i b l e of the t a x p a y e r s
liabilities^
it should also b e so a d j u s t e d as n o t to c o l lect mor e than the
- 6 J
This group covers, single persons with net incomes up to
+fési
*
$2500, married couples with net incomes up to $3200, and
married couples with two dependents with net incom^ up to
$3900.
It is this group which is hit hardest by the
defects in our present payment system.
Taxpayers in this group are accustomed to weekly or
monthly budgeting under which expenditures are directly
governed by the pay envelope.
They are under considerable
pressure to use their income wfrregi it ¿«^available* t.hat—¿s-y
ms
U iwr
pt?Lv
They find it extremely difficult to
make adequate provision for meeting lump-sum tax bills
which fall due a' year after the receipt of the income being
taxed.
Because of uncertainty of employment, they can not
escape uncertainty about future income.
Moreover, if their
income stops because of unemployment, entrance into the
armed forces, sickness, or death, the income tax debt for
the last year of income m ^ become a crushing burden.
2.
P a y - a s - y o u - g o for W a g e and S a l a r y E a r n e r s .
'I
Under
**
conditions collection at source proviaes the
only adequate answer to the tax payment problem.
Under such
a system the income tax on these wages and salaries would be
paid by withdrawing it week by week and month by month when
the pay envelope is handed to the employee.
The wage and
5
ceases entirely,
or death,
as at u n e m p l o y m e n t ,
r e t i rement,
dis a b i l i t y
the o v e r h a n g i n g tax deb t m a y cause r e a l hardship.
Ill.
Th e P a y m e n t P r o b l e m As It A f f e c t s
Specific T a x p a y e r G r o u p s
The p r o b l e m f a c e d b y t a x p ayers in m e e t i n g their ta x
bills
and the n a t u r e of the s o l u tions that can b e p r o v i d e d
¿[Qp0;Qc[ j_n l a r g e part on the size ana source of their incomes.
F o r p r e s e n t p u r poses
the e s t i m a t e d 44 m i l l i o n i n d i v i d u a l s
o b l i g a t e d to p a y taxes o n 1943 i n c o m e m a y be c l a s s i f i e d
into three d i s t i n c t groups:
(l)
30 m i l l i o n w a g e a n d salary
e a r n e r s w h ose incomes after e x e m p t i o n s do n o t go above the
first
s u r t a x bracket^;
(2 )
10
m i l l i o n t a x p a y e r s w h o s e incomes
also do no t go above the first s u r t a x bracket, b u t w h o
r e c e i v e m o r e t h a n a n o m i n a l amount of inco m e f r o m ^ourceo
o t her t h a n w a g e s or salaries^
and
(3) 4 m i l l i o n p e r s o n s
w h o s e incomes f r o m all sources e x c e e d the first
surtax
y
bracket.
(Table l) .
A. W a g e and S a l a r y E a r n e r s .
1.
The Payment Problem
The o v e r w h e l m i n g m a j o r i t y of the 44 m i l l i o n taxpayer:
for 1943 w i l l be w a g e and s a lary earners w h o s e incomes after
cXaaA
e x e m p t i o n s w i l l n ot exceed the f i rst s u r t a x b r a c k e t of $ 2000.
4 with relatively large incomes.
But in recent years the
d e f e c t has b e e n g r e a t l y magnified.
The tax has b e e n broadened
to r e a c h m a n y m i l l i o n s of a d d i t i o n a l t a x payers w i t h small
incomes
and l i ttle
exp e r i e n c e in p l a n n i n g their f i n a n c e s to
m e e t l a r g e b i l l s at i n f r e q u e n t intervals.
Moreover,
the
burden of the tax has been greatly increased for all taxpayers.
A suitable pay-as-you-go method will be of great assistance
to m i l l i o n s of p e r s o n s
tnmiftfr
B.
1v
*
»
i
I
i
.TH
uPr1-p
Tli
iMiiiiiiifflliip T i|_n______________________.
Another difficulty of our existing method of payment,
from the standpoint of the vast majority of taxpayers, is
The resultant lag caused no serious payment problem as long
as the income tax burden was relatively lowland the persons
principally affected by the'tax were accustomed to. saving
and budgeting for various obligations, including taxes.
But
w i t h the e x p a n s i o n of the i n come t a x t h e j B P R M p * 1
*
lag has b e c o m e a v i t a l problem.
To b e
sure,
the lag does
n o t cause the ta x p a y e r d i f f i c u l t y as long as h i s income
continues at a steady pace.
f r o m year to year,
r e c e i p t of income.
his
If, however, his income varies
taxes w i l l be p o o r l y g e a r e d to his
A n d if his i n c o m e d e c l i n e s
s h a r p l y or
of reaching taxpaying ability,
bince
it is, and
must remain, the backbone of the Federal tax system, every
attention should be given to improving its structure and
application.
For the great masses of taxpayers the present
method of collecting the income tax payment has the basic
defeet that tax payments are not synchronized with the
receipt of the income on which the tax is based.
This
defect arises partly because installment payments are not
timed to fit the receipt of income and partly because the
taxes on a given year*s income are not payable until the
following year.
A.
Poor Adaptation to Taxpayers1 ludgets and Flow
of Income.
A system of equal quarterly installments ignores the
basic fact that most people "Nprrni nr
r~t jn- fb"ti niim
tikoy budget on a weekly, semi-monthly, or monthly basis
according to the interval between pay-checks,
buch a system
also ignores the wide variations in income receipts from
one quarter to the next for such persons as farmers and
seasonal workers.
Equal quarterly installments are^4~
thep-ef o r q J > ill-adapted
both to prevailing budget habits and
to the flow of income.
This defect was not serious when income tax rates were
low and the tax reached only the minority of our population
-
2
-
of the flow of revenue into the treasury.
Over-all revenue
needs, therefore, should he kept clearly in mind in drawing
up the specific provisions of a new income tax payment plan.
Owing to the great expansion of the individual income
tax now taking place in response to war needs, the
strengthening of our system of income tax^ i ^ o t d ^ H ^ has
become a first order of business.
/u
a i m a m
taxpayers paya^
The 39 million individual
"As- ^Ay-
income taxes of almost $10 billion for
1942 under the present law must be afforded a way of meeting
their tax obligations with a maximum of convenience and a
minimum of hardship.
In addition, the Treasury should be
protected from taxpayer delinquency and resultant loss of
revenue.
And, finally, the Government needs a flexible
instrument of fiscal policy under which revenues will react
speedily to changes in tax rates and exemptions and in the
national income.
I'M»
The Treasury Department.]»* been acutely awan& of
O
Hvi
these needs, Fnrnrinr^ fhnp n y°?r-4ir b?° u r g ^
r^nTcroion
a substantial part of the income tax
by means of collection at source.
current basis
The purpose of my statement
today is to review the income tax payment problem and to
analyze briefly methods which may be helpful in its 'Solution.
TT•
Defects in Our Present System of Payment
The income tax is the most direct and equitable method
*u
UÉif«j L ;
s 5***
V
36 I
U bbu*
Statement* to House Ways and Means Committee on
Revision of Income Tax Payment Methods
I. Introduction
solvi;
pgr !
vili
In response to a request of the* Committee, I am here
to discuss the income tax payment problem.
[oftlibin
letotcl
The problem
of putting income taxes on a pay-as-you-go basis was
fi:;§etalpa
J
President Roosevelt in his recent Budget
itova
(
Message?) in connection with his request to Congress for
$16 billion of additional collections for
the fiscal year 1944.
It is my understanding that the
Committee desires at this time to consider the pay-as-you-go
question, and my statement today will, therefore, be limited
to this subject.
It will not deal with other phases of our
tax problem.
mai
Ireasi
of re’ !
1*Alley und
rates^
tong th
ti t
lx on a c
P |i j! to u t t
I should like to say in passing, however, that what
n,
the Congress does in solving the payment problem will have
a direct bearing on the overall revenue program^
prernv>r'
-I I-
nrniiii<iiifiwTriinmrTrrcrTmiiMraimiiTi»T^
1 1 1 1 i i n n —n i
»
«XHP
iit-----riiirinwTwrmiiffKaMliiiii
are
method:
>he method employed to
put the income tax on a pay-as-you-go basis will directly
affect the dollars-and-cents yield of the tax and the timing
Étheii
I | i ief(
f e tte
•Vt
j
Statement TBy Randolph E. Paul,
Tax Adviser to the Secretary of the Treasury,
"before the Ways and Means Committee of the House of Renresenta
tives* on inventory reserves
M U N 1 5 1M8
y*
The enactment of high corporate tax rates necessitated "by
the war makes the correct determination of the income to which
these rates are applied of fundamental importance, TTnder the
present treatment of inventories for tax nurposes, in periods
is taxable income may include profits that re-
J]
.
feujJbr* -i &
¡g|S
-vP0u4-CX.
X-^-SL
/j
tl^
<|
(jbujuxlt^i
¿ Tx
l\v
£W^o
tauuuo
^
^'cin^C&S'sJi T a ^
.X^Grtt rl<?
W'tfS
i
I. I n t r o d u c t i o n
I n r e s p o n s e to a r e q u e s t of ^tee*Committee,
to di s c u s s the income t a x p a y m e n t problem.
I am here
The p r o b l e m
of p u t t i n g income taxes o n a p a y - a s - y o u - g o b a sis wa s
P r e s i d e n t R o o s e v e l t i n his r e c e n t B u d g e t
M e s s a g e ^ i n c o n n e c t i o n w i t h his r e q u e s t to C o n g r e s s for
$16 b i l l i o n of a d d i t i o n a l c o l l e c t i o n s for
the f i s c a l y ear 1944.
It is m y u n d e r s t a n d i n g that the
C o m m i t t e e d e s ires at this time to co n s i d e r the pay-as-you-go
question,
to this
and m y sta t e m e n t t o day will,
subject.
therefore,
be limited
It w i l l n o t deal w i t h other p h a s e s of our
tax problem.
i s h o u l d like to say in passing, ho w e v e r ,
that w hat
le C o n g r e s s does i n s o l ving the p a y m e n t p r o b l e m w i l l have
d i r e c t b e a r i n g o n the o v e r a l l re v e n u e p r o g r a m
e
m e t h o d e m p l o y e d to
put the i n c o m e t ax o n a p a y - a s - y o u - g o b a s i s w i l l di r e c t l y
a f f e c t the d o l l a r s - a n d - c e n t s y i e l d of the t a x and the timing
Statement of
for the Treasury,
of the
Revision
U
Randolph E.'Paul, General Counsel
before the Committee on Ways and Means
House of Representatives on
of Income Tax Payment Methods
February 2* 19^*3
Introduction
In response ip the request of your Committee* i am here to discuss tne
income tax payment nroblenu The problem of putting indome taxes on a pa#>-asyou^ go “
basis was emphasized by President Roosevelt in his recent Budget
Message in connection witR his reqUest t6 Congress for $l6 billion of
additional collections fof the fiscal year 195b* It is my understanding
that the Committee desires at this time to consider the pay-as-you-go
question, and my statement today will, therefore, be limited to this
subject* It will not deal with other phases of our tax problem*
I should like to say in passing, however, that what the Congress does in
solving the payment problem will have a direct bearing on the overall revenue
program* The method employed to put the income tax on a pay-as-you-go basis
will directly affect the dollars-and-cents yield of the tax and the timing
of the flow of revenue into the Treasury* Over-all revenue needs, therefore,
should be kept clearly in mind in drawing up the specific provisions of a
new income tax payment plan*
Owing to the great expansion of the individual income tax now taking place
in response to war needs, the strengthening of our system of income tax
payment has become a first order of business* The 39 million individual
taxpayers required to pay ihcome taxes of almost $10 billion for 19^2 under
the present law must be afforded a way of meeting their tax obligations with
a maximum of convenience and a minimum of hardship. In addition, the
Treasury should be protected from taxpayer delinquency and resultant loss
of revenue* And, finally, the Government needs a flexible instrument of
fiscal policy under which revenues will react speedily to changes in tax
rates and exemptions and in the national income.
The Treasury Department and the Congress have been acutely aware of these
needs. During the course of the Revenue Revision of 19^2 there was general
agreement that it would be highly desirable to put a substantial part of the
income tax on a current basis by means of collection at source. The purpose
of my statement today is to review the income tax payment problem and to
analyze briefly methods which may be helpful in its solution.
II.
Defects, in JDur Ere sent
of Payment
The income tax is the most direct and equitable method of reaching
taxpaying ability. Since it is, and must remain, the backbone of the Federal
tax system, every attention should be given to improving its structure and
application* For the great masses of taxpayers the pesent method of
collecting the income tax payment has the basic defect that tax; payments
are not synchronized with the receipt of the income on which the tax is
based. This defect arises partly because installment payments are not
timed to fit the receipt of income and partly because the taxes on a
given year’s income are not payable until the following year.
35-21
-
A*
2
-
froo* Adaptation to Taxpayers’ Budgets and Flow pflhcome.
A system of equal quarterly installments ignores the "basic fact
that most people "budget on a weekly, semi-monthly, or monthly basis
according to the interval between pay-checks* Such a system also ignores
the wide variations in income receipts from one quarter to the next for
such persons as farmers and seasonal workers* Equal quarterly installments
are accordingly ill—adapted both to prevailing budget habits and to the
flow of income*
This defect was not serious when income tax rates were low and the
tax reached only the minority of our population with relatively large
incomes* But in recent years the defect has been greatly magnified.
The tax has been broadened to reach many millions of additional tax
payers with small incomes and little experience in planning their
finances to meet large bills at infrequent intervals* Moreover, the
burden of the tax has been greatly increased for all taxpayers,» A suitable
pay-as-you-go method will be of great assistance to millions of persons*
B.
The Lag in Payments.
Another difficulty of our existing method of payment, from the
standpoint of the vast majority of taxpayers, is that this year’s tax
payments are based on last year’s income. The resultant lag caused no
serious payment problem as long as the income tax burden was relatively
low, and the persons principally affected by the tax were accustomed to
saving and budgeting for various obligations, including taxes* But with
the expansion of the income tax the payment lag has become a vital problem.
To be sure, the lag does not cause the taxpayer difficulty as long as his
income continues at a steady pace* If, however, his income varies from
year to year, his taxes will be poorly geared to his receipt of income*
And if his income declines sharply or ceases entirely, as at unemployment,
retirement, disability or death, the overhanging tax debt may cause real
hardship.
III.
The Payment Problem As It Affects
Specific Taxpayer Groups
The problem faced by taxpayers in meeting their tax bills and the
nature of the solutions that can be provided depend in large part on the
size and source df their incomes* For present purposes the estimated
million individuals obligated to pay taxes on 19^*3 income nay be
classified into three distinct groups*
(l) 30 million wage and salary
earners whose incomes after exemptions do not go above the first surtax
bracket of $2 ,000 ; (2 ) 10 million taxpayers whose incomes also do not go
above the first surtax bracket, but who receive more than a nominal
amount of income from sources other than wages or salaries; and (3 ) ^
million persons whose incomes from all sources exceed the first surtax
bracket* (Table l),
A.
Wage and Salary Sarners.
1.
The Payment Problem
The overwhelming majority of the k k million taxpayers for 19 I+3 will
toe wage and salary earners whose incomes after exemptions and credits
will not exceed the first surtax bracket of $2000# This group covers,
for example, single persons with net incomes up to $2500 , married
couples without dependents with net incomes up to $3200 , and married
couples with two dependents with net incomes up to $3900. It is this
group which is hit hardest toy the defects in our present payment system.
Taxpayers in this group are accustomed to weekly or monthly
budgeting under which expenditures are directly governed toy the*pay
envelope. They are under considerable pressure to use their income as
soon as it becomes available.
They find it extremely difficult to make
adequate provision for meeting lump-sum tax bills which fall due a year
after the receipt of the income being taxed* Because of uncertainty
of employment, they can not escape uncertainty about future income.
Moreover, if their income stops because of unemployment, entrance into
the armed forces, sickness, or death, the income tax debt for the last
year of income may become a crushing burden.
2 . A Pay-as-you-go Method for Wage and Salary Earners.
Under these conditions collection at source provides the only
adequate answer to the income tax payment problem. Under such a system
the income tax on these wages and salaries would be paid by withdrawing
it week by week and month by month when the pay envelope is handed to
the employee. The wage and salary, earners’ taxes would be automatically
budgeted because tax payments would coincide with the receipt of income.
At the same time the problem of income tax debt would be eliminated
for these taxpayers. If the normal tax and the first bracket surtax,
that is, the ’’basic liability” were collected at source in this manner,
30 million of the k k million taxpayers estimated for 19^3. or nearly
70percent, would be current. (Table l) Wo pay-as-you-go plan is
adequate unless it makes current at least this group of wage and salary
earners.
It should be kept in mind that collection at source does not in
itself increase or decrease the tax liability of the taxpayer.
Collection at source is merely a device designed to help the individual
pay his income tax currently as he earns his income. The individual
receives full credit for the amounts collected at source when he files
his tax return at the end of the year. The amount of the tax liability
is determined by the rates imposed on everyone, whether the liability
is collected at source or not. Consequently, it is the rate of tax
liability that determines the rate of collection at source.
*
% 1
A collection fet source system mudt be framed with these criteria in
view; The current collections must approximate as closely as possible
the employee s liability for the year; the employee must not be required
to make quarterly or other unnecessary returns; the machinery of collection
must be made as adaptable as possible to the accounting and business
methods of the employer. The principal elements of a collection at
source plan that would meet these criteria may be summarized as follows»
First, As ^stated, any pay-as-you-go plan should currently discharge
as much as possible of the taxpayer’s liabilities; it should also be so
adjusted as not to collect more than the liabilities» This objective
can be readily achieved by collecting at source only on amounts of in
come in excess of an allowance for exemptions and deductions» In other
words, the amount of each wage or salary payment subject to collection
at source would be determined by subtracting from the gross payment an
allowance for personal exemptions and normal deductions. These allow
ances would be prorated according to the length of the pay period,
that is, weekly, semi-monthly, monthly, or Other period» For example,
under existing exemptions the weekly allowance might be $11.0 0 for a
single person, $26.00 for a married couple, and $ 8.00 additional for
each dependent. These amounts are made somewhat larger than the pro
rated annual exemption in order to incorporate an allowance for average
deductions. The allowance for personal exemptions would be based on a
simple statement furnished by the employee to his employer.
It is important to note that any system of withholding income tax
which does not allow exefaptions, or which allows only a uniform exemption
for all employees without regard to their marital or dependency status,
would not meet the need. Substantial under-collection with resulting
large deficiency payments, or substantial over-collections with resulting
large refunds, or both, would result in numerous cases under a withhold
ing system not geared to actual income tax exemptions*
Second. The rate applied to the wage and salary payments after these
allowances would be set so as to collect approximately the basis tax
liability, that is, under present law the normal tax of 6 percent plus
the minimum surtax rate of 13 percent. However, the rate would be
slightly lower than the sum of the normal tax and the first bracket surtax
in order to make further allowance for deductions and to allow for
vacations without pay, occasional periods of unemployment, and possible
fluctuations in income above and below the taxable limit. In this way,
refunds for over-payment at the source would be held to a minimum.
Third. After the close of the year, these taxpayers would file
returns showing their actual income and final liability for the year.
Adjustments of actual collections at source to the final liability would
be made by means of additional payment or refunds. For the vast majority
of wage earners, such adjustments would involve a deficiency or refund
of only a few dollars.
- 5 ~
Fourth. Apart from the allowance of exemptions according to marital
and dependency status, the essential mechanism for such a method of col
lection at source is already established under the withholding machinery
adopted for collecting the Victory Tax on wages and salaries. Such col
lection at source of the Victory Tax should be integrated with collection
at source of the regular income tax. However, the Committee may wish to
consider the possibility of absorbing the Victory Tax into the regular
income tax system.
The Committee may wish to consider the desirability of collecting
at source the basic liability on dividends, as well as on wages and
salaries. In the case of dividends the normal and first bracket surtax
could he collected on the gross amount. The administrative problems will,
of course, have to be weighed, but since dividend receipts represent a size
able portion of the income of millions of taxpayers for 19^3, collecting
the tax on such income at the source would be a considerable contribution
to a pay-as-you-go system of tax collection.
B.
Persons Subject only to First Bracket Rate, With Income from
Sources Other Than Salaries and Wages.
The incomes of many taxpayers do not readily fit into a system of col
lection at the source. By far the largest group of such taxpayers consists
of those who receive more than a nominal amount of income from sources other
than wages or salaries, and whose total income is not in excess of the first
surtax bracket. For 19^+3 it is estimated that 10 million of the Ub million
taxpayers will be in this group. Their problem is different from that of
wage and salary earners, and the system of current collection which is set up
for them must differ accordingly.
1.
Payment Problem
The incomes of several million small taxpayers consist of business
profits, professional fees, rents, and farm receipts. The flow of income
from most of these sources fluctuates widely from year to year, and
frequently even from season to season. Under our present system these
taxpayers often find that their tax payments are badly out of step with
income. The result in many cases is difficulty and even hardship.
Moreover, the tax payments of such persons on a quarterly basis may not
at all coincide with the receipt of cash income, which may be lumped in
one quarter or two quarters of the year. And when income drops off or
stops entirely, these taxpayers are faced with the same difficulties a.s
small wage and salary earners. The need for a pay-as—you-go system of tax
collection is fully as pressing for them as for wage and salary earners.
Since the incomes of these people come in irregular amounts and from
many different payors, the need for current payment can not be met by
collection at the source. If persons with small incomes from non—wage
sources are to be put on a. current basis, one of two alternative methods
may be employed. One method would base tentative current payments on
prior—year income, The other method would base tentative current payments
on simple quarterly statements of income received in the current year.
A further discussion of these two methods may be helpful.
-
2.
6
-
Alternative Approaches to a Solution
a,
Tentative Payments Based on Last Year’s Income
Under the first of the two methods for collecting taxes on
non-wage incomes the taxpayer would "be required to make tentative payments
in the current year on the "basis of the previous year’s income and to make
an adjustment in the following year for overpayment or underpayment*
For example, the tentative tax for 19 UU would "be "based on the income of
19^3 as reported on March 15# 1 9 ^ * After the end of the year, on
March 15, 19^5* a final calculation of 19*+H income would "be made. If the
tax payments in 19 ^ proved to he too small,' the deficiency would "be paid
at this time. If the payments proved to "be too large, the taxpayer would
receive a credit or refund of the excess payment.
Under this system the tax payments made in each year would depend not
only on what the income had "been in the previous year, but also on how
much the income of that previous year differed in turn from the income
of the year prior to it. If a person’s income were stable from year to
year, his tax payments "under this plan would be substantially current.
If#,however, his income were not stable, he might be very far from being
current since his tax payments in any year would not be geared to the
income of that year. Thus, a person whose income increased from year to
year would have deficiencies to make up each year, while a person whose
income decreased from year to year would have credits or refunds due him
each year, If the fluctuations in income were such that increases and
decreases alternated, the deviation from current payment would be all the
greater.
To illustrate the inadequacy of this method with an extreme example,
let us assume that a taxpayer in four successive years had income of
$2,000 in Year 1, $l+,000 in Year 2, $8,000 in Year 3, and $2,000 in
Year U.
- 7 Example of tax payments under a system of current
collection based on previous year*s income 1/
Married person - No dependents
•
•
:
Deficiency
Tentative tax : due to under-.;
payment in
:
3/
•
•
;
«
• prior year
£>2,000
kJ
Year 2
4.,000
$ H0
Year 3
8,000
Year 4-
2,000
Total
payments
during
year
4/
u
kJ
ip
00-
Year 1
VJl
Year : Net income;
O/
2/
% 398
936
1, 562
1,024
2,586
l/ Under rates and exemptions of the Revenue Act of 1942, excluding
Victory tax.
2/ Assumed to be derived from items not subject to collection at
■ source; minimum earned income assumed.
3/ The tentative tajt is the same as the tax payable under the present
method of payment .on the income received in the previous year.
4/ It is assumed that the taxpayer had no taxable income for years
.¿prior to fear 1. Therefore, there is no tax payable in Year 1 and
no deficiency or credit in Year 2.
* g ^
This taxpayer’s tentative payment in Year 3 at present tax rates
would ©mount to $538 "based on the $4,000 income for Year 2. In addition,
he w'ould also in Year 3 have to pay a deficiency of $398 in taxes for
Year 2, because in that year he had paid a tentative tax based on an
income of only $2,000, his income in Year 1, whereas his actual income
in Year 2 was $4,000. Thus, the payments which the taxpayer must make
in Year 3 depend upon what his income was in Years i and 2*
Going on to Year 4, when the taxpayer’s income is actually $2,000,
he will pay a tentative tax of $1 ,562 , based on the $8,000 income of
Year 3* and, in addition, he will also have to pay a deficiency of
$1,024 for Year 3 because in that year he had paid a tax measured by
the Year 2 income of $4,000, while his actual Year 3 income was $S,000.
He is thus required in Year 4 to pay a total of $2,586, or $586 more
than his income in that year. Thus, when incomes either rise or fall,
the tax payments in a given year are based on the income of the two
preceding years and are not related to the income of the current year.
is has been pointed out, this method works well for stable incomes,
but without further refinement does not work well for fluctuating incomes.
It should be noted t&at stability is the exception rather than the rule.
Most incomes are characterized by fluctuation — up one year, down the
next, or up for several years, and then down for several years. It is
estimated that the incomes of about two-thirds of the taxpayers for
1943 will vary substantially, either up or down, from their 1942 incomes.
To base the tentative payments on last year’s income when that
income will generally be something higher or lower than this year’s
income, is not pay-as-you-go but pay^as-you-went. It is just this
pay-as-you-went aspect of our present system that we seek to avoid,
It ma y b e suggested that the defects of such a system can be patched
by a relief provision which would permit adjustments in the tentative
tax when the current year’s income is expected to differ from the prior
year’s income. But since fluctuation in income is the rule, a provision
designed to handle exceptions would to the extent it was followed actually
became the rule. Taxpayers might be expected to take advantage of a per
missive provision when their incomes were declining, but they could
scarcely be expected to make the correction when their incomes were in
creasing, unless the provision were made mandatory through severe
penalties for understatement of income,
b.
Tentative payments based on quarterly
statements of this year’s income.
Since corrections to take care of fluctuations in incomes
would depart in so many cases from the prior year’s income, i M W
helpful to consider a method which would go more directly to current
income. Thus, a system of quarterly payment based on quarterly statements
of Cerent income might he put into effect. Such a quarterly statement
and°payment system would he a supplement-to collection at^ource on wages
and salaries. It would enable taxpayers with seas°“^;
t„
example, farmers and many types of businessmen
-
- 9 -
payments much more closely to income than is possible under the present
system of equal quarterly installments. The quarterly statement of current
income would be simple in form, as shown in Table 2 . It should be noted
that similar statements would be necessary under the method of basing
payments on last year’s income*
3*
Quarterly statement method for income from
sources other than wages and salaries.
Persons of small means with income from such sources as business profits,
professional fees, and farm incomes, could be put on a pay-as-you-go basis by
the following steps:
First. Every three months they would file a simple statement of their
best estimate of net income from sources not subject to collection at
source.
Second. On the basis of such income less prorated exemptions, they
would pay a tentative tax each quarter at the basic-liability rate used
in collecting taxes at source.
Third. After the close of the year, they would report actual income,
compute the actual liability, and make the necessary adjustment*
C.
The treatment of taxpayers with higher incomes.
If current collection at the basic-liability rate were adopted, only
a small minority of taxpayers would not become current with respect to the
greater part of their liabilities. Of the
million taxpayers estimated
for 19 ^ 3 , only U million would have surtax net incomes in excess of $ 2 ,000 ,
that is, in excess of the first surtax bracket. To provide complete
current collection for this group in the higher income brackets presents
obvious difficulties because of the graduation of the tax rates depending
on the amount of income receifed.
Fortunately this is also the group for whom full current collection is
least essential. Most of these taxpayers have been accustomed to paying
taxes for many years, and they have the resources and in general the ex
penditure habits suitable to an advance accumulation Of tax funds. If their
income stops suddenly, they would generally still be in d position to meet
their tax liabilities over and above the currently paid basic liability.
Moreover, most of this group of higher bracket taxpayers would become^
substantially current if the methods previously described for collecting
currently the normal tax and minimum surtax were put into operation.
It*should be observed that such current collection methods would-apply^
to all of the income of the taxpayer regardless of the surtax bracket in
- lie -
v;hich it fell. Thus a married couple with no dependents and a net income
of $5*000 would at a 19 percent basic liability rate, pay currently $692
of a $746 total liability or 93 percent; a married couple vriLth no dependents
and a net income of $10,000 would pay currently $1 ,6 1 2 out of a $2 ,1 5 2
total liability, or 75 percent*
Continuing the present method of collecting liabilities in excess of the
normal tax and surtax at the first bracket rate would, as previously
mentioned, leave not fully current only 10 per cent of the taxpayers# Of
these nine-tenths would have more than three-quarters of their total liability
currently paid# For only one taxpayer in a hundred would the tax liability
not paid currently amount to more than one quarter of his total liability.
Full current payment with only minor adjustments after the end of the
year could be devised for all taxpayers if this were desired# To accomplish
this the current quarterly payments previously discussed would be enlarged
to include not only the basic liability, but also liability in the higher
surtax brackets# Each quarterly payment could be based either on an estimate
of income for the year or on an estimate of income for the quarter, in
either case with appropriate adjustments during and after the year.
IV#
A.
The problem of transition.
The nature of the problem
Two distinct problems are involved in putting the income tax on a payas-you-go basis — first, the method of current'payment that is best for
steady year-in yoar-out use; and second, hot; to shift to that method# So
far, I have been discussing the first problem. I should like now to turn
to the second problem — that of transition.
A transition problem arises because if we start coliccting^this year the
tax on this year’s income without any other action, taxpayers will be
obliged to meet in a single year both the tax on last year’s income and the
tax on this year’s income* To the extent that we go on a current basis in
1943, taxpayers will be paying in 1943 their liabilities on 1943 income
while still owing their 1942 liabilities# If they arc required to pay both
year’s liabilities this year, there will clearly be a doubling up of tax
payments# The extent of the doubling-up depends on the amount collected
currently# For example, if current collection applies to normal tax and
the surtax at the first bracket rate, there is doubling-up with respect to
this part of the tax, but there is no doubling—up writh respect to the
higher surtax rates# If current collection applies to the entire tax, there
is doubling-up with respect to one year’s whole tax.
-
B.
11
-
Possible methods of Achieving Transition.
One method of achieving transitioh is to forgive part or all of a
year’s tax liabilities, A second method is to require individuals to
continue to pay their 1942 taxes as at present, and at the same time
begin current collection of 1943 taxes, A third method is to postpone
part or all of a year’s liabilities, permitting the postponed amounts to
be amortized over a period longer than a year,
1,
Forgiveness of a year’s taxes.
A method of achieving transition that has been widely discussed
is to forgive a year’s liability. The overlapping of two years1 tax
liabilities can be completely eliminated only through forgiveness.
The amount of forgiveness would be geared to the degree of current
collection achieved. If current collection were to apply to the total
liability, the complete elimination of over-lapping would require the
forgiveness of the whole of a year’s tax. If current collection were
to apply to the basic liability - the normal tax and the surtax at the
first bracket rate - the complete elimination of over-lapping would
require the forgiveness of a year’s basic liability, but not of the rest
of the tax.
Considerable confusion has arisen in the course of the widespread
discussion of proposals to forgive a year’s taxes as a means of shifting
to currant collection. Two. main points need clarifications (1) the effect
of forgiveness on Federal revenues; and (2) its effect on the economic
position of individuals.
a.
The Effect of Forgiveness on Federal Revenues.
The tax liabilitjr of the taxpayer is an asset of the Government,
although it is not counted as such in the general accounts of the Government.
Forgiving a.year’s tax would wipe out assets.of this kind amounting to
close to (¿10 billion — the estimated amount of individual tax liabilities
on 1942 income. The Government by forgiving a year’s tax liabilities
would bo discarding assets as a business would that cancelled its accounts
receivable from customers. Such a business might be able to maintain its
receipts by going on a cash sales basis. Yet no one would say that the
business had not lost assets to the extent of the accounts cancelled. The
Government differs from the business in that it has the power to make up
the loss by compelling quicker collections and by imposing additional taxes
on the same or other people. Through the resulting partial redistribution
of the tax burden the cash receipts of the Treasury could be maintained
oven*though the tax liability was forgiven.
Accordingly it is not correct to assume that the forgiveness of a
year’s tax liability combined with corresponding current income tax
collection would reduce the cash flow into the Treasury. The effect on
the amount of money taken into the United States Treasury resulting from
-
12
-
placing the income tax on a current basis and forgiving a year’s taxes
can not be determined except by comparing this treatment with some
alternative. If the comparison is with the present payment method at
existing rates, the cancellation of 19^2 liabilities combined with current
collection of subsequent liabilities need not involve either an increase
or decrease in the amount of money taken into the Treasury in any given
span of years. Each individual subject to taxation in 19^2 has one year’s
liability cancelled, but he is at the same time required to pay another
year’s liability sooner than he otherwise would. Individuals who were
not taxpayers in 194 2 , but who become taxpayers subsequently, will be
obliged to pay their liabilities one year sooner than under existing law.
Individuals who die, or who cease receiving an income, pay the Government
one year’s less taxes, but by and large the money loss on their account is
offset by the gain from new taxpayers who begin paying their taxes a year
earlier.
The net result in money paid to the Government depends on whether
the payments dropped out exceed or fall short of the payments added in
the same year. The payments dropped out will be spread over a period of
years. If any given year is a year of higher national income than the war
boom year of 19^2, the actual receipts of the Government for that span
of years would be increased by the change. If it is a year of lower
national income, governmental receipts would be decreased by the change.
b.
The Effect of Forgiveness on the Economic
Status of Individuals
Since the cash receipts of the Treasury could^be maintained
>ven though the tax liability was "forgiven, the effect of wiping out an
ncome tax asset through forgiveness can be more readily visualized and
leasured in terms of its relative effect on the different groups In
;he community who will he called upon to maintain the flow of revenue.
Fhe fact that the Government may take in as much money m a fis
y
»
Lespite the forgiveness of a year’s tax liabilities, reflects larger
Dayments by some taxpayers, offsetting smaller payments.by others.
Dhe taxpayers who pay less are those whose incomes have declined or
leased. The taxpayers who pay more are those whose incomes ha e
'¿eased so that they become taxable for the first time or those who
nave to pay a larger amount of tax sooner than they otherwise would.
Ihe -forgiveness of 19^2 liabilities thus affects tax payments in
iifferent years for different taxpayers. So long as an mdividua
income is stable, forgiveness combined with c o r r e s p o n d s u ^
lection will not immediately affect his tax payments. However, if he
has accumulated liquid funds or has purchased tax^ ^ 0^ % o r oth L
discharge his tax liabilities, these will be available to him for other
uses. And, in any event, he will ultimately escape the payment of
a year’s income tax when he dies or his income ceases.
- 13 -
While the effect of forgiveness on tax payments is not felt until
the individual dies or until his income declines or ceases, cancellation
has a significant immediate effect on his economic status. The amount of
taxes cancelled represents an immediate addition to the individual’s
net wealth. This addition, which depends on the income of the individual
in the year for which taxes are cancelled, varies widely from individual
to individual. If an individual had no income in that year, and was not
subject to tax, his economic position would not he improved. If a married
person without dependents had an income of $3 ,000 , and the entire tax
was cancelled, he would gain $32 H. If he had an income of $1 ,000 ,000 ,
he would gain $85 ^,000 .
The existence of an immediate gain has been denied on the ground
that tax payments continue. The fact is, however, that throughout the
history of the income tax, our taxes have been computed on a liability
basis; that is, we have taxes for the year 19 ^ 2 , for the year 19 ^ 3 » and
so forth, measured by the incomes of those years. The tax liability
for eadh year depends on the income of that year and the rates applicable
to that year. Under standard accounting practice they must be accrued
for that year. A shift to the current collection basis wiping out a
year’s liability, adds that much to the wealth of each person by
diminishing his liability, The result is a real gain to the taxpayer.
One way to judge the effect of forgiving the 19^2 tax liability is in
terms of the increases in tax liability which have been imposed to finance
the war and which have given rise to the need to shift to a current col
lection system. This Is shown in the attached Table 3, where it appears
that the complete forgiveness of the I 9 U 2 tax liability would, in these
terms, benefit persons with large incomes relatively more than persons
with small incomes. A married person with no dependents having a net
income of $ 2,000 owes $lU0 tax for 19 *+2 , or 7 percent of his income;
with a $10,000 net income, he owes $ 2 ,1 5 2 , or 22 percent of his net income;
with a net income of $100,000 he owes $6 ^-,060 , or 6 ^ percent of his net
income; with a net income of $1 ,000,000 he owes $85^,000 , or 85 percent of
his net income.
The increase in income taxes for the 3~year period 19 HO-A2 amounts
to $182 for a married person with no dependents and a net income of $2,000.
The amount that would be forgiven this individual is $140, or 77 percent
of the increase for the three years. At the $100,000 level, tfee amount
forgiven equals 102 percent of the increase in taxes and at the, $1*000,000
level, 320 percent. J o r an individual with a
$1 *000,000 income in each of
the five years 19 3 S-19 U 2 the reduction in tax liabilities resulting from
complete forgiveness would more than offset all tax increases enacted
since 1935»
These results follow, of course, from the nature of the t a x increases
that have been imposed to finance the war. These increases have had to
come primarily from the low and middle income groups, The rates on the
unner surtax brackets could not be increased correspondingly. At the same
time, the amount of tax forgiven is greatest for the highest income groups.
In consequence, the forgiveness of 19^2 taxes, urged as a means of adjusting
~
I k
~
■payment methods to war-time tax rates, would "benefit most just those groups
who have "been called upon to make the smallest relative addition to theii*
tax payments to finance the war.
The attached Table U shows the effect of cancellation on the
individual's economic status in another way. The amount available to
an individual each year to use for consumption or to add to his wealth
is the income he has left after taxes,. Table k shows the amount o f tax
forgiven as a percentage of the income left after taxes. Tor the indivi
dual with $2,000 income the forgiven tax represents only about 7i percent
of a year’s income after taxes — or the equivalent of less than one
month’s income. Tor the individual with $1 ,000,000 income the forgiven
tax represents almost 600 percent of a year’s income after taxes.
The forgiveness of a year’s taxes enables him to add to his wealth at one
stroke as much as he could add in nearly 6 years by saving every dollar
he had left after paying taxes and spending nothing, and as much as he
could add in 12 years by saving half of what he had left after paying
taxes.
It has been urged that the gain from forgiveness is offset by the
resulting increase in estate tax when the individual dies, But the gain
would be subject to the estate tax only if it is not spent or given away
in the meantime, and if the estate is sufficiently large to be taxable
under the liberal estate tax exemptions, And even if subject to the
estate tax, the offset is only partial,' reaching 50 percent or more only
for net estates in excess of $ 2 ,500 ,000., A special estate tax could, of
course, be devised to recapture a larger part of the forgiven amount if
it were not spent or given away in the meantime. These loopholes, too,
could be closed by still other special taxes, But any of these devices
for recapturing, to the extent that they are effective, amount simply to
not forgiving as much in the first place.
2,
Simultaneous Collection of 19^2 and 19^3 Taxes,.
A second method of achieving transition is to require individuals
to pay their 19^2 taxes at the same time they are paying their 19^3 taxes,
The ability of particular taxpayers to pay two years4 tax liability in one
year would varv widely. Those who had accrued their taxes during 19 2
and saved to pay them could pay the two years4 taxes in 19^3 *ith
difficulty whatever. Others, who had not accrued or saved especially to ,
meet taxes, but who had other credit or accumulated liquid savings could
also meet the two years4 liability in 19^3 without undue hardship.
Still other taxpayers, the amounts of whose income subject to tax were
small, and whose taxes were small, might be able to meet the two years
taxes out of 19^3 income without substantial difficulty.
There would be, however, numerous taxpayers who failed to accumulate
tax reserves in 19 ^2 , and who counted on paying 19^2 taxes out of 19^3
income. Tor many of these the rates of tax would be so high and financial
circumstances so pressing that the payment of two years4 taxes in one year
would be a severe hardship, if uot an impossibility, Accor ing^y,
P
T
of paying 19^2 and 19 U 3 taxes all in 19^3 w u t t undoubtedly need to be
moderated in view of the substantial hardship it would cause.
15 -
în this connection it should he noted that the President, in hife Budget
Messie Ì L e H h a t collation, forche fiscal year l 9 f be increased by
16 b f n i o h dollars. Practically all of this $16 u n i o n in c re a se in
collections will have to he derived from individuals in the fin
analysis Whatever forms the levies may take. Revenue measures to
meet the’Presideht1 s request would take from:
4 ig^j,
year 19 UU an additional amount larger than the total expecte 1 9 3
income taxes at present rates. Clearly, carrying the Resident's
Budget Message into effect will mean partial or complete
of payments for individual taxpayers generally. Of course, th
doubling would not fall on the same taxpayers in the same Pro
portions as would result from collecting 19^2 income taxes in 19*3.
Under these circumstances, shifting to a current collection
system and at the same time requiring that individuals continue to
nnv their liabilities on 19*2 income is one way of raising some of
the additional revenue we need. She extra burden
P R ins
cart or all of 19*2 tax liabilities must not be compared with no
burden at all. The correct comparison is between that burden “
,
the burden of other methods of raising the
‘
ighf
revenue. Accordingly, the simultaneous collection of 19*2
^3
taxes should not be compared with complete forgivenes
a
in tax rates: but with complete forgiveness combined with a rise m
taxantes. Otherwise, the comparison is simply between more taxes and
less taxes*
3,
The Postponement of 19^-2 Inabilities
In view of the hardships for some individuals involved in the
simultaneous collection of 19*2 and 19*3 » f f f ^ ^ i U U e s f
postpone or defer the payment of part of the
■_
Htìp mpthnd of collecting the postponed tax would he simply to require
S e tairoaver to pay the^ostponed tax at his discretion within a certain
n ^ b e H f years, w
before March 15, 19*5- A second method would be to
divide S e postponed tax into fixed installments
th
have to meet. A third method would be to increase the rate of current
collection, whether at source or by quarterly payments, and treat the
additional amount collected as an offset te tta
with appropriate provision for persons not having any 9
I should like to repeat that the. method of transition must he
trart
revenue are going to be required in the coming years. It seems more
editable to collect at least to a substantial degree the tax liabilities
which have been imp'osed by past legislation than to fqrgive a year s
liahilitv and raise the additional revenue hy increases in rates,
T h e S e t h o d S f rate increases, combined with cancellation would largely
free higher incomes from a year's taxes while imposing he addi i o n £
burden more heavily on the low income groups, since it is at this level
that the income tax is capable of further expansion.
- i6 -
Furthermore, in view of our revenue needs, the forgiveness of a year’s
tax liability might be generally misconstrued as an indication that tax
burdens could be made lighter instead of being made heavier. Indeed,
there is considerable evidence that even the recent discussions of tax
forgiveness have confused and demoralized the public and caused them to
doubt whether they will really have to bear tax burdens as high as those
imposed by the Revenue Act of 19^-2,
V.
CONCLUSION
In this discussion of current income tax collection, or pay-as-you-go,
I have endeavored to indicate the principal problems in designing a satis
factory system. These problems are admittedly difficult. A summary of the
issues, together with the best judgment of the Treasury as to their
solution, may be helpful*
1.
The rate of collection at the source.
The question arises whether the withholding rate under collection at
the source should be sufficiently large to collect the basic liability,
or should be high enough to collect the whole liability on the larger in
comes at progressive rates* It would seem preferable to collect at the
source the full basic liability (normal tax plus surtax at first bracket
rates), thus by this step alone making fully current 70 percent of all
income taxpayers* For the sake of simplicity and to avoid unnecessary re
funds, it seems desirable, at least in the beginning, not to attempt
collection at source at progressive rates,
2,
Exemptions under withholding,
Another question is whether allowance should be made for exemptions
under a system of collection at source and, if so, whether they should
be uniform for all salary and wage earners or should take into account
marital and dependency status. The problem of collection at source is to
collect the income tax which is computed on the basis of exemptions,
varying according to marital and dependency status, It seems imperative
that the collection at source system should be based on such exemptions,
since otherwise the amounts collected would be so far from the amounts due
as to fail to meet the objectives of collection at source in any
satisfactory manner. Such a collection at the source system can be
readily handled by employers.
3,
The method of handling other income.
Another question is whether the tax on income from sources not adapted
to withholding procedure should be tentatively based on the previous
year’s income or on the current year 1 s.income, It seems very desirable
that the tax be based on the current year’s income, Further exploration
may be needed to determine whether this could be done more simply by an
annual estimate in March with periodic adjustments, or by a quarterly state
raent of income.
3-7 -
1|.
The current collection for higher 'brackets*
Another question is whether an attempt should he nude to bring completely
current the tax on the incomes which extend into the higher surtax brackets*
It seems desirable that they should be made as nearly current as possible,
subject to inevitable adjustments which cannot be made until the following
year. But if the compliance difficulties of making taxes on such incomes fully
current are deemed to# great, substantial currency for the great majority of
taxnayers can be achieved by making the basic liability current with payment
of the balance in the same manner as the whole tax is collected at present,
namely, in the following year.
5.
Tfte transition problem.
Another question is whether the transition to current payment should he
made by forgiving a year's liability, by paying two years' taxes in one, or
by postponing or deferring one year's taxes over several years. In the light
of the revenue needs of the Government, and the equitable distribution of the
tax burden, complete forgiveness seems very undesirable. Complete doubling
up would undoubtedly be too harsh for some taxpayers. Accordingly, deferment
of payment of taxes for the transition' year to the extent necessary to
relieve such hardships appears to be desirable. This is not to say that some
discount, or even a certain amount of forgiveness, may not be found to e
desirable for the same reason.
5,
Time schedule.
A further question relates to the timing of a current collection system,
[t seems desirable to pass legislation as soon as possible and to make it
effective as soon thereafter as possible. Collection at the source should .
certainly hot begin, later than July 1 of this year.
7,
March 15. 19U5 returns
It should be emphasized that no matter when the system of current col
lection is established and what that system may be, returns on March 15,
I9U 3 , must be filed as usual. If the taxpayers do not clearly understand
this*point, great confusion will certainly result.
1
Table- 1
Individual net income tax: Estimated number of tax
payers for the income years 1942 and 1943, by size of
surtax net income and tyoe of income
t
•
Type of income :
«
•
Total
CO
1943
:
: Surtax net income
:
Over
:Total :Fot over :
: $2.000
:
J
Estimated number of taxable income recipients
o
o
o
(in millions)
1942
Surtax net income
Fot over : Over
$ 2.000
: $2.000
1/
Fages and salaries
with not more
than a nominal
amount of other
income
28
26,5
1,5
32
30
2
All other 2/
11
9,0
2,0
12
10
2
Total
39
35,5
3,5
44
40
4
Estimated number of taxable returns 3 /
Wages and salaries
vrith not more
than a nominal
amount of other
income
25
23.5
1,5
29
27
2
All other 2 /
10
8.0
2 ,0
11
9
2
Total
35
31.5
3.5
40
36
4
Fumber of individuals receiving net income in excess of exemp
tion,
2/ Including sources other then wages and salaries, and also wages
and salaries combined with more than a nominal amount of other
income,
3,/ Fumber of returns that will be filed on which a tax will be due.
This is less than the number of taxable income recipients
because of the filing of joint returns including the income of
more than one taxable income recipient, particularly in the
smaller income classes.
i f
'Table 2
Statement for quarter ending Jupe 30, to be filed on June 15
by individuals whose tax is not withheld at source. 1 /
1 , Income from all sources during the quarter
2,
Income from wages and salaries
3 , Quarterly exemption and dependent credit
4*
Larger of (2 ) or (3)
5 . Balance
F
(l) minus (4)
J
6 . Payment due*
_______ percent of (5) (percentage
to be same as that used for collection at source)
1J
A final adjustment would, of course, be made the
following March,
3
Table
Tax liability for the period 1938-19^2 if 19^2 tax liability is forgiven» compared with tax
liability computed without certain tax increases after 19 3 5 » at selected levels of net income
Married person - Ho dependents
9>
p
1.
Actual tax liability for
income years 1938- 19^2
•Income tax liability on selected net income 1 J
: Taxable year: $2,000 : $3*000 : $5,000 : $10,000 : $25 ,000‘ : $100,000 :$1 ,000,000
1938
$
8 $ 80 $ 1+15 $ 2,1+89 $ 32,1+69 $ 679 ,01+1+
1939
8
80
1+15
2,1+89
32 .*+69
679,01+1+
110
31
528
19^0
3 .S63
43.^76
717.586
$
1+2
138
19^1
6 ,861+
52,706
375
732,55^
19^2
ll+0
32l+
71+6
2,152
9,220
6i+,o6o
851+.000
Total
182
509
1*391
M 15
26,905
3 ,662»226
225,178
2. Total tax liability 1938-191+2 if
the
19^2
liability is forgiven
3.' Total tax liability 1938- 191+2
assuming no tax increases under
Revenue Acts of:
A. I9U2
B. I9I+I and 19 I+2
C* I94O, 19l+lr and I9I+2
3V 1936 , I9I+0 , 191+1 , and I9I+2
Cumulative increase in tax
liability:
A, Under Revenue Acts of
l9l+0-19i+2
B* Under Revenue Acts of
1936-191+2
%
Tax liability forgiven (19 I+2 taxes)
as a percent of:
A* Increase in tax Revenue Acts
19l+0-191+2
B. Increase in tax Revenue Acts
1936-191+2
$
$
1+2
$
185
$
61+5
$
81+
$
323
109
1+0
$1,020
$
1+0
1+00
-
1+90
1+00
2,663
$15,685
$16 1,118
$2,808,226
3.962
$22 ,51+9
$213,822
2.075
2,075
1 2 ,1+1+5
152,9 70
$3 ,560,720
3,510,81+0
3,395*220
2 ,856,970
2,1+11+
16,507
12 ,1+1+5
195.366
162 ,3U 5
-
$
182
$
I+69
%
991
$
2.76 0
$1 2 ,1+60
$
62.233
$
267,006
$
182
$
669
$
991
$
2 ,71+0
$1 2 ,1+60
$
72,208
$
805,256
76 . $
6 9 ,1 $
75.3*
78.5#
76 .9
69 .I
75-3
78.5
~
Iti,of
71+.0
102 .0$
88.7
3 19 .8$
10 6 .1
1 / Het income before personal exemption, assuming maximum earned income credit and no net long-term capital gains.
Table 1+
Amount of taxes forgiven as a percent of annual net
income after taxes, if 19 U 2 tax liability is
forgiven, at selected levels of net income
Married person - No dependents
Net income
before
nersonal
exemption
$ 1,200
1,3 0 0
1,5 0 0
2,000
2,500
3,000
b ,000
5,000
10,000
15,000
20,000
25,000
50,000
100,000
500,000
1,000,000
5 ,000,000
Amount of
tax l/
(excluding Victory
tax)
$ 13
bs
lbo
232
32)4
532
7 b6
2 ,1 5 2
U.052
6 ,1+52
9,220
25,32S
6b,o6o
bib , 000
35 b , 000
i+,37U,ooo
Net income after
tax
$ 1,200
1,287
1,1+52
1,8 6 0
2 ,26 S
2.6 76
3.1+68
Hr 25 U
7.S1+S
io,9 bs
1 3 ,51+8
15.7SO
2b , 672
3 5 .91+0
86,000
ib 6 ,ooo
626,000
Tax forgiven
as a percent
of net in-*come after
tax
1.0$
3.3
7.5
10.2
12.1
15.3
I 7 .5
2 7 .b
37*0
i+j.6
58 .b
102.7
1 7 8 .2
bSl.b
58 b. 9
698.7
(
Revenue Act of 19U2, assuming maximum earned income credit and ‘
no net long-term capital gains.
f
TREASURY D ^ A R I M E N T
Washington
Press Service
FOR RELEASE, MORNING NEWSPAPERS
Tuesday, February 2, 1943.
3
ó~-
the Secretary of the Treasury announced last evening' that the tenders for 1700,OCX),(K
or thereabouts, of 91-day Treasury bills to be dated February 3 and to mature May 5, 1943 Hersi
which were offered on January 29, 1943, were opened at the Federal Reserve Banks on
February 1,
The details of this issue are as follows:
feonJ
Total applied for - #1,301,770,000
Total accepted
—
701,811,(XX)
Iota!
Total
Range of accepted bids:
High
Low
Average price
- 99.925 Equivalent rate of discount approx. 0.2973t per annua
- 99.906
»
»
»
«
»
0.3723t w
H
- 99.907
*
»
»
»
«
0.3695t "
tt
te e
High
(99 percent of the amount bid for at the low price was accepted.)
price
Federal Reserve
District
Total
Applied For
Total
Accepted
Boston
New York
Philadelphia
Cleveland
Richmond
Atlanta
Chicago
St. Louis
Minneapolis
Kansas City
Dallas
San Francisco
$
40,635,000
803,810,000
42,043,000
32,195,000
21,650,000
18,985,000
149,182,000
25 ,650,000
75,252,000
26,063,000
12,660,000
53,645,000
♦ 25,891,000
287,249,000
31,245,000
22,404,000
18,693,000
12,627,000
134,360,000
16,317,000
75,132,000
24,285,000
12,300,000
41.308,000
#1,301,770,000
#701,811,000
TOTAL
perced
¡¡ISee
TREASURY DEPARTMENT
Y/ashington
FOR RELEASE, M O R N I N G NEWSPAPERS,
Tuesday, F e b r u a r y 2, 1943,
2 /1 /4 3
Press Service
No. 35-22
T h e S e c r e t a r y of t he T r e a s u r y a n n o u n c e d last
tenders
for $700,000,000,
or thereabouts,
of 9 1 - d a y T r e a s u r y bills
I to be d a ted F e b r u a r y 3 a n d to m a t u r e M a y 5, 1943,
fered on Ja n u a r y 29,
1943»
evening that the
which were of
w e r e o p ened at the F e d eral R e s e r v e
Banks on F e b r u a r y 1,
The details
of this
issue a re as follows:
T o t a l a p p l i e d f or - $ 1 , 3 0 1 , 7 7 0 , 0 0 0
Total, a c c e p t e d
701,811,000
R a n g e of a c c e p t e d bids:
High
- 99*925 E q u i v a l e n t r a t e of discount approx.
L ow
- 99.906
w
”
M
p
Average
p r i c e - 99.907
(99 p e r c e n t
"
0.297% per
annum
0 . 3 7 2 % per
annum
0.369% per
annum
of t he a m o u n t bid for at the l ow p r i c e was a c c e p t e d . )
Federal R e s e r v e
District ______
Total
A p p l i e d Fo r
Boston
Dew Y o r k
> Philadelphia
! Cleveland
‘ Richmond
Atlanta
I Chicago
lSt. Louis
& Minneapolis
I Kansas C i t y
I Dallas
San Francisco
635,000
810,000
043.000
195.000
650.000
985,000
182,000
650,000
252,000
063,000
OTAI,
Total
Accepted
891,000
249.000
245.000
404.000
693.000
627.000
360,000
317,000
660,000
645,000
13 2 ,0 0 0
285,000
300,000
308,000
$1,301,770,000
$701,811,000
oOo-*
FOR IMMEDIATE RELEASE,
February 2, 19^3_____
The 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, 19U2, provided for in the Inter-American Cof
fee Agreement, proclaimed by the President on April 15, 19U1, as follows:
Country of
: Quota Quantity :
Authorized for entry
Production
: (Pounds) 1/ :__________ for consumption
___________________ !___________ ~
;~~As of (Date)
:
(Pounds)
Signatory Countries:
Brazil
Colombia
Costa Rica
Cuba
Dominican Republic
Ecuador
El Salvador
Guatemala
Haiti
Honduras
Mexico
Nicaragua
Peru
Venezuela
1,535,367,083
520,081*,629
33,019,261*
13,212,917
17,533,713
21*,767,091*
99,680,281*
88,33U ,1*1*2
1*5,1*00,298
2,908,617
78,758,056
32,1*62,515
i*,127,276
61,25U,106
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/
Quotas revised
51,653,778
Jan. 23, 191*3
If
It
tt
171*,627,851
163,671*,258
6,756,385
6,065,060
6,367,917
10,299,196
15,722,765
16,162,620
22,282,717
1,091,206
10,205,881
11*3,506
155
19,192,618
tl
17,965,350
tl
It
It
tf
tt
tt
tt
It
tt
ft
;
I
TREASURY DEPARTMENT
Washington
FOR IMMEDIATE RELEASE,
Wednesday. February 3. 1943.
Press Service
No. 35-23
The Bureau of Customs announced today preliminary figures showing the
quantities of coffee authorized for entry for consumption under the qubtas for
the twelve months commencing October 1, 1942, provided for in the InterAmerican Coffee Agreement, proclaimed by the President on April 15, 1941, as
follows*
Country of
Production
: Quota Quantity :
: (Pounds) 1J
:
... ‘
:As of
Signatory Countries:
Brazil
Colombia
'Costa Rica
Cuba
Dominican Republic
Ecuador
El Salvador
Guatemala
Haiti
Honduras
Mexico
Nicaragua
Peru
Venezuela
Non-signatory Countries:
)
British Etapire, 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)
1,535,367,083
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
1/ Quotas revised.
-o0o‘
Authorized for entry
for consumption
(Date)
; (Pounds)
Jan. 23, 1943
it
H
174,627,851
163,674,258
6,756,385
6,065,060
6,367,917
10,299,196
15,722,765
16,162,620
22,282,717
1,091,206
10,205,881
143,506
155
19,192,618
11
17,965,350
it
h
it
it
it
ir
it
ti
it
it
it
G e o r g e W.
eight others
Alabama»
tlona*
Burk»
were
sheriff of Talledega
convicted
In Federal
in a c a s e I n v o l v i n g
Burk was
hie deputies
to t w o y e a r s *
tilleries»
sentenced
to f o u r years' i m p r i s o n m e n t »
and
sixteen unregistered dis
and produced 20,000 gallons
of high-proof whiskey.
—
of
Illinois,
illicit alcohol
Iowa,
owners
taxes.
syndicate,
to p u r c h a s e
This
Michigan
Rlcchio a n d
In
end Wisconsin
sixteen others*
imposed*
convicted
of New Yoxk on charges of conspiracy
States o f liquor
combine operating
Minnesota,
totalling 23 years were
Forty-five persons were
Pezzulo
•»
operators*
was b r o k e n w i t h c o n v i c t i o n o f B u l l
Sentences
two o f
former sheriff Sam B u m s
syndicate operated
Another interstate
the States
and
court at Anniston»
" ‘" " a * * “
the still
Alabama,
interstate moonshine whiskey opera
to t h r e e y e a r s e a c h »
The
county»
in t h e S o u t h e r n D i s t r i c t
to d e f r a u d
was k nown as
which made arrangements
the United
the A l l e s s i o - t i v o l s l
with
output of finished a l c o h o l •
various
still
— 4 -
Gordon,
were
ing
notorious
p r o h i b i t i o n ors
sentenced on
charges
of conspiracy
regulations o n evidence
A d m i n i s t r a t i o n b y the
racketeer,
tions
to v i o l a t e
t u r n e d o v e r to
sugar ration
the O f f i c e o f P r i c e
Revenue a g e n t s *
Gordon and his associates were
soft d r i n k c o m p a n y
and a confederate
”front"
charged w i t h setting up a
for prospective black-market
opera
in s u g a r i n v o l v i n g 5 0 0 , 0 0 0 p o u n d s *
The agents
smashed an Alabama
that had plagued
the G o v e r n m e n t
Thirty-six persons were
with sentences
six years
country moonshine
convicted
in Federal
court at Birmingham,
of imprisonment
suspended,
mostly related by blood or b y marriage,
remote
section o f Sh e l b y County,
agents
stills w i t h c a p a c i t y o f
to b e
served,
and. 9 7 y e a r s p r o b a t i o n *
group,
sive u n d e r c o v e r wçrk,
ring
since R a t i o n a l p r o h i b i t i o n days*
total/lng 42 years
imprisonment
hill
Alabama.
closed In and
resided
This
in a
After months
of inten
in f o u r days
destroyed
2 0 , 3 0 0 g a l l o n s a day.
A
Sentencing o f ten more defendants
conspiracy brought
The
trials
total
involved Marco LIMandri
outgrowth of what
series of cases drew
in the L I M a n d r i
convicted*
total prison
case disclosed
of sugar were
in the y e a r s
in the case
to 9 8
and associates,
is k n o w n a s t h e S t a h l - P e l l e g r i n o
w h i c h 74 pe r s o n s w e r e
pound bags
convictions
in a n o t o r i o u s H e w Y o r k
1939-40 when
The
defendant©
and was
furnished weekly
the o p e r a t i o n s
an
conspiracy
in
terns of 4 6 years*
that more
persons•
the
in
two
Evidence
than a thousand
100-
to i l l i c i t d i s t i l l e r s
flourished*
- 3 -
during, til« y e a r .
These
defendants
also were
engaged
In s e l l i n g
casualty
Insurance, d e a l i n g in automobiles, and In a u t o m o b i l e
" (ivt C
M
y
financing*
M t h ^ t h e i r a c c o u n t a n t , J o s e p h X* E u c k e r , t h e t w o
diverted
corporate
funds
so as
to e n a b l e
t h e m to u n d e r s t a t e
their income over a period of years*
Olassman was
#10,000.
years
s e n t e n c e d to f i v e y e a r s
Ostrow drew
In p r i s o n a n d
three years a nd #10,000?
fined
and Zuckcr
three
and #5,000*
W.
years
L.
Mix,
former Texas
oil operator,
In p r i s o n a f t e r h a v i n g b e e n
pleaded guilty in 1957
was
a fugitive
sentenced
to
two
for five years.
to c h a r g e s o f g a s o l i n e
tax evasion,
disappeared after receiving a suspended prison
He
and
term and a
# 1 0 , 0 0 0 fine.
A s a n a f t e r m a t h to p r o s e c u t i o n s
J o s e p h M.
guilty
Schenck,
in 1 9 4 2
motion picture executive,
to a c h a r g e
in 1 9 4 1
Evidence
ceedings
social
income
gathered by
©gainst numerous
to i m
tax evasion c o n
tax,
Intelligence agents
resulted
individuals
charges
on
re-use of used
such
security and
tobacco
as
evasion
and evasion of
taxes.
the Alcohol Tax Unit
old customer during
in p r o
or washed documentary
possession of unregistered firearms,
Agents of
sentenced
attracted nation-wide publicity.
of motor vehicle use
stamps,
His
against
Schenck pleaded
of perjury and was
p r i s o n m e n t f or a y e a r a n d a day*
viction
Instituted in 1941
the year,
ran «cross
Irving Waxier,
the
.I lf .
trail o f an
W«xey
Gordon.
2
At the s u m
time,
extraordinary expansion of
Indyatrial
alcohol
made it necessary to utilize additional personnel for the super-
prouuctlon/
vision of 13»
T p © mu&t)or o f i l l i c i t
n e a r l y 55 percent,
theless
and
stills
Never
the n u m b e r o f a r r e s t s 41 percent.
some 14,000 persons were
fhe
aelzed during 1942 dropped
recommended
for prosecution.
volume o f m a s h seised at illicit distilleries,
one of
the b e s t m e a s u r e s o f t h e p r o d u c t i o n o f n o n - t a x - p a id l i q u o r ,
dropped
58 percent.
tions was
achieved
The
reduction In illicit distillery o p e r a
in the face o f s h a r p l y h i g h e r taxes
tilled
spirits,
pected
to p r o v e a n i n c e n t i v e
Instead,
level
since
W.
a facto i ^ ^ u n S e r some
E. W o o l f ,
to e f f o r t s
of national
d u r i n g 1942,
A c t i n g C h i e f o f the
O f 125 persons going
120 were
assessed by the
out.
convicted.
courts
at evasion*
to t r i a l
rep o r t e d a t the l o w e s t
Intelligence U n i g ^ e p o r t e d
from cases prepared
to
trial
Fines
in income
on miscellaneous
sentences
charges,
handed
and 59 w e r e
con
\
C o n v i c t i o n o f H e r b e r t C l a s s m a n a n d E d w a r d C.
and
tax cases
agents brought 48 other
victed.
controlled corporations
for
total/lng #178,000 were
in a d d i t i o n to p r i s o n
Evidence gathered b y the special
individuals
ex
prohibition.
continued high ratio of convictions
prosecution.
condltlor^g^mlght be
bootlegging operations were
repeal
on dla-
operating
in Beltimoré, cu l m i n a ted one
of
taxicabs
the
Ostrow,
in Washington,
who
Ï3# C*,
important investigations
Intelligence «gents
of the Bureau o f Internal
p r e s s i n g the fight a g a i n s t e v a ders o f the
of wartime needs
penalties
for revenue,
tax laws
r e c o v e r y to t h e T r e a s u r y n e a r l y d o u b l e s
tax e v a s i o n
in the 116
in n e w cases,
the promised
similar 1941 assessments*
Prominent business and professional men,
Included
in the li g h t
tional assessments end
in excess o f # 6 1 , 0 0 0 , 0 0 0 d u r i n g 1942.
eeffc, w e r e
Revenue,
individuals
as well
indicted
while 120 persons were
as
racket*
for income
convicted during
the period*
D u r i n g the year,
agents
of the Alcohol T ax Unit,
e n f o r c e m e n t d i v i s i o n o f the B u r e a u o f I n t ernal
several
gangs of liquor tax law evaders
running back
Revenue,
that had
smashed
criminal
records
to p r o h i b i t i o n days*
E l m e r L.
Xrey,
the a c t i v i t i e s o f
Chief Coordinator of Enforcement,
the two u n i t s
Secretary Morgenthau
Investigative
the
detailed
in o n e o f a series o f reports
covering 1942 calendar y e a r work of
agencies u n d e r his direction.
narcotics,
another
family are
the
O t h e r members o f the T r e a s u r y
the B u r e a u o f Customs,
Foreign Funds
to
Control Division,
the B u r e a u of
and
the U n i t e d
States Secret Service.
Stewart Berkshire,
an overall
improvement
with prosecutions
tinued
tire
Intense
reported
In the b o o t l e g l i q u o r s i t u a t i o n p a r a l l e l
involving large groups
enforcement
rationing and
making
head o f the Alcohol Tax Unit,
efforts,
of conspirators.
wartime
sugar,
Con
gasoline and
improved employment opportunities were
for a falling off of illicit distilling operations.
factors
TREASURY DEPARTMENT
Washington
FOR RELEASE, AFTERNOON NEWSPAPERS,
Friday, February 5> 1 9 4 3 « ________
Press Service
No. 35-24
2/4/43
Intelligence agents of the Bureau of Internal Revenue,
pressing the fight against evaders of the tax laws in the
light of wartime needs for revenue,
developed additional as
sessments and penalties in excess of $61,000,000 during
1942.
The promised recovery to the Treasury nearly doubles similar
1941
assessments.
Prominent business and professional men, as well as
racketeers, were included in the 116 individuals indicted
for income tax evasion in new cases, while 120 persons were
convicted during the period.
During the year,, agents of the Alcohol Tax Unit, another
enforcement division of the Bureau of Internal Revenue,
smashed several gangs of licjuor tax law evaders that had
criminal records running back to prohibition days.
Elmer L. Irey, Chief Coordinator of Enforcement, detailed
the activities of the two units in one of a series of reports
to Secretary Morgenthau covering 1942 calendar year work of
the agencies under his direction.
Other members of^the
Treasury investigative family are the Bureau of -Customs, the
Bureau of Narcotics, the Foreign Funds Control Division, and
the United States Secret Service.
Stewart Berkshire, head of the Alcohol Tax Unit, re
ported an overall improvement in the bootleg liauor situation
parallel with prosecutions involving large groups of con
spirators.
Continued intense enforcement eiforts, wartime
sugar, gasoline and tire rationing and improved employment
opportunities were factors making for a falling off of il
licit distilling operations.
At the same time, extraordinary
expansion of industrial alcohol production made it necessary
to utilize additional personnel for the supervision of output
for war purposes.
The number of illicit stills seized during 1942 dropped
nearly 35 percent, and the number of arrests 41 percent*
j^q y 0pbheless some 14*000 persons were recommended for prose
cution .
The volume of mash seized at» illicit distilleries, one
of the best measures of the production of non-tax-paid liq
uor, dropped 58 percent.
The reduction in illicit distill
ery operations was achieved in the face of sharply higher
taxes on distilled spirits, a factor which under some con
ditions might be expected to prove an incentive to efforts
at evasion.
Instead, bootlegging operations were reported at the
lowest level since repeal of national prohibition.
W. H. 'Woolf, Acting Chief of the Intelligence Unit, re
ported continued high ratio of convictions from cases pre
pared for prosecution.
Of 125 persons going to trial in in
come tax cases during 1942, 120 were convicted.
Fines total
ing $175,000 were assessed by the courts in addition to
prison sentences handed out.
Evidence gathered by the spe
cial agents brought 48 other individuals to trial on mis
cellaneous charges, and 59 were convicted.
Conviction of Herbert Classman and Edward.0. Ostrow, who
controlled corporations operating taxicabs in Washington,
D. C., and in Baltimore, culminated one of the important in
vestigations during the year.
These defendants also were
engaged in selling casualty insurance, dealing in automobiles
and in automobile financing.
With the assistance of their
accountant, Joseph I. Zucker, the two diverted corporate
funds so as to enable them to understate their income over a
period of years,
G-lassman was sentenced to five years in prison and fined
$10,000.
Ostrow drew three years and $10,000; and Zucker
three years and $5,000.
Y/, 1. llix, former Texas oil operator, was sentenced to
two years in prison after having been a fugitive for five
years.
He pleaded guilty in 1937 to charges of gasoline tax
evasion, and disappeared after receiving a suspended prison
term and a #xo, 000 fine.
As an aftermath to prosecutions instituted in 1941
against Joseph $U Schenck, motion picture executive, Schenck
pleaded guilty in 1942 to a charge of perjury and was sen
tenced to imprisonment for a year and a day.
His income tax
evasion conviction in 1941 attracted nation-wide, publicity.
Evidence gathered by Intelligence agents resulted in
proceedings against numerous individuals on such charges as
evasion of motor vehicle use tax, re-use of used or washed
documentary stamps, possession of unregistered firearms, and
evasion of social security and tobacco taxes.
Agents of the Alcohol Tax Unit ran across the trail of
an old customer during the year, Irving Wexler, alias Waxey
G-ordon, Gordon, notorious prohibition era racketeer, and a
confederate were sentenced on charges of conspiracy to vio
late sugar rationing regulations on evidence turned over to
the Office of Price Administration by the Alcohol Tax Unit
agents•
Gordon and his associates were charged with setting up
a soft drink company "front” for prospective black-market
operations in sugar involving 500,000 pounds#
The agents smashed an Alabama hill country moonshine
ring that had plagued the Government since national, prohibi
tion days. Thirty-six persons were convicted in Federal
court at Birmingham, with sentences totaling 42 years o f .im
prisonment to be served, six years imprisonment suspended,
and 97 years probation.
This group, mostly related by blood
or by marriage, resided in a remote section of Shelby County,
Alabama.
After months of intensive undercover work, agents
closed in and in four days destroyed stills with total cubic
capacity of 20,300 gallons a day.
Sentencing of ten more defendants in a notorious Hew
York conspiracy brought total convictions in the Case to 98
persons. The trials involved Marco LiMandri and associates,
and was an outgrowth of what is known as the Stahl-Pellegrin©
conspiracy in which 74 persons were convicted.
The defend
ants in the two series of cases drew total prison terms of
46 years,
Evidence in the Liliandri case disclosed that more
than a thousand 100-pound bags of sugar were furnished weekly
to illicit distillers in the years, 1939-40 when the opera
tions flourished,
George W. Burk, sheriff of Talledega Count 3r, Alabama,
and eight others were convicted in Federal court at Anniston,
Alabama, in a case involving interstate ’moonshine whiskey op
erations.
Burk vras sentenced to four years1 imprisonment,
two of his deputies to three years each, and former sheriff
Sam Burns to two years.
The syndicate operated sixteen un
registered distilleries, and produced 20,000 gallons of highproof whiskey.
The sheriff was charged with receiving "pro
tection" money from the still operators.
Another interstate illicit alcohol combine operating in
the States*of Illinois, Iowa, Minnesota, Michigan and Wis
consin was broken with conviction of Emil Ricchio and sixteen
others.
Sentences totaling 23 years Viere imposed.
/
Forty-five persons were convicted in the Southern Dis
trict of N.ew York on charges of conspiracy to defraud the
United States of liquor taxes. This was known as the AllessioLivolsi-Pezzulo syndicate, which made arrangements with var
ious still owners to purchase output of finished alcohol,
-oOo-
-
2
-
It was pointed out that since this property would not otherwise
be brought into the United States, the General Ruling works no hardship
on American creditors. Also, it was stated by Treasury representatives
that this Ruling protects only Mexican railroad property, as defined
therein, and does not apply to any other assets.
It is anticipated that this General Ruling will pave the way for
immediate and effective cooperation in getting much needed materials to
their ultimate destination with a minimum of delay and wastefulness.
General Ruling No. l£ was issued pursuant to section 5(b) of the
Trading with the enemy Act as amended by the First War Powers Act, 19 Ù1.
00O00
TREASURY DEPARTMENT
FOR XMeSBIiiTE RELEASE
/ A . fee
Press Service
No.
9 *T*"
The Treasury Department today issued regulations barring all
legal and other proceedings which might interfere with^the free and
unrestricted use and operation of Mexican railroad equipment within
the United States. This action was taken at the request of the ^Govern
ment of Mexico, the State Department, the Board of Economic Warfare,
and other interested Government agencies.
t1
i "ri.1
i~ri'tft1 nnifrv*ff af^'inuended to remove
an important bottleneck in the transportation of materials from Mexico
to the United States. At the present time there is a large volume of
war materials which is brought to the Mexican border on Mexican freight
cars and there unloaded and reloaded into United States freight cars.
This procedure, officials stated, is both ^time-consuming and wasteful
of the nation*s wartime freight car capacity.
Treasury officials
that this Government has been negotiating
with the Government of Mexico for several months regarding the possibility
of materials moving from Mexico to the United States on Mexican railroad
equipment. One of the major stumbling blocks to this important wartime
measure, however, has been the fear that such equipment might be, seized
by creditors. Unless this factor is eliminated, the war effort will be
impaired and the entire program of direct shipment m i l be
To meet this wartime necessity, the^Treasury""Department, after full
consultation with the State Department, the Board of Economic Warfare^ and
the Mexican authorities, today issued General Ruling No. Ip. Under unis ^
Ruling, all Mexican railroad equipment -within the United States is accorded
immunity against claimants seeking to attach or otherwise seize such property
Moreover, under this Ruling no legal, equitaole^ or possessory interest can
be obtained in such rolling stock and equipment by virtue of any judicial
process unless a Treasury license is first obtained.
Officials stated that a specific exemption from the immunity granted
by this Ruling is made in favor of service and repair charges and other
claims arising out of the operation vfithin the United States of .Mexican
railroad property on or after the date of this Ruling.
T R E A S U R Y 'DEPARTMENT
Washington
FOR IMMEDIATE RELEASE,
Thursday, February 4, 1943»
.. ;.r
Press Service
No*. 35-25
The Treasury Department today issued regulations barring all
legal and other proceedings which might interfere with the free
and unrestricted use and operation of Mexican railroad equipment
within the United States. . This action was taken at the request
of the Government of Mexico, the State Department, the Board of
Economic Warfare, and other interested Government agencies.
The new regulations are intended to remove an important
bottleneck in the transportation of materials from Mexico to the
United States. At the present time there is a large volume of
war materials which is brought to the Mexican .border on Mexican
freight cars and there unloaded and reloaded into United States
freight cars. This procedure, officials stated, is both timeconsuming and wasteful of the nation’s wartime freight car
capacity.
Treasury officials said that this Government has been nego
tiating with the Government of Mexico for several months regard
ing the possibility of materials moving from Mexico to the United
States on Mexican railrpad equipment.
One of the major stumbling
blocks to this important wartime measure, however, has been the
fear that such equipment might-be seized by creditors. Unless
this factor is eliminated, the war effort will be impaired and
the entire program of direct shipment will be defeated.
To meet this wartime necessity, the Foreign Funds Control
of the Treasury Department, after full consultation with the
State Department, the Board of Economic Warfare and the Mexican
authorities, today Issued General Ruling No. 15. Under this
Ruling, all Mexican railroad equipment within the United States
is accorded immunity against claimants seeking to attach or
otherwise seize such property.
Moreover, under this Ruling no
legal, equitable or possessory interest can be obtained in such
rolling stock and equipment by virtue of any judicial process
unless a Treasury license is first obtained.
(Over)
Officials stated that a specific exemption from the immunity
granted by this Ruling is made in favor of service^and repair
charges and other claims arising out of the operation within the
United States of Mexican railroad property on or after the date
of this Ruling.
It was pointed out that since this property would not other
wise be brought into the United States, the General Ruling works
no hardship on American creditors.
Also, it was stated by Treas
ury representatives that this Ruling protects only Mexican rail
road property, as defined therein, and does not apply to any
other assets.
It is anticipated that this General Ruling^will pave the way
for immediate and effective cooperation in getting^much needed
materials to their ultimate destination with a minimum of delay
and wastefulness.
General Ruling No. 15 was issued pursuant to section 5(b)
of the Trading with the Enemy Act, as amended by the First War
Powers Act, 1941.
- 0O 0-
TREASURY DEPARTMENT
Office of the Secretary
February 4, 1943,
GENERAL RULING NO. 15
UNDER EXECUTIVE ORDER NO. 8389, AS AMENDED,
EXECUTIVE ORDER NO. 9193, SECTIONS 3(a) AND
5(b) OF THE TRADING WITH THE ENEMY ACT, AS
AMENDED BY THE FIRST WAR POWERS ACT, 1941,
RELATING TO FOREIGN FUNDS CONTROL.*________
(1)
Unless authorized by license issued by the Secretary
of the treasury expressly referring to this general rulings
(a) No person shall exercise within the United States
any right, remedy, power, or privilege (by self-help,
judicial process, or otherwise), directly or indirectly
against or with respect to any Mexican railroad property; and
(b) Any seizure by attachment or otherwise of Mexican
railroad property, and any judgment, decree, lien, execution,
garnishment, or other judicial process against or with respect
to such property is null and void.
(2)
The provisions of (l)(a) and (l)(b) above shall not
apply to claims arising out of, or with respect to, current repair,
maintenance, and similar charges, in connection with the operation
or servicing, within the United States, of Mexican railroad property
on or after the date of this general ruling.
(3 )
As used in this general ruling, the term ’’Mexican railroad
property” shall include*
(a) All railroad rolling stock and equipment brought
into the United States from Mexico or acquired in the United
States by a railroad in Mexico, and with respect to which
Mexico or a national thereof has an interest;
(b) All earnings, income, or other rights, payable to,
or in favor of, Mexico or a national thereof and created by
reason of, or otherwise resulting from, the employment or use
of such rolling stock or equipment within the United States
after the date hereof.
Randolph Paul
Acting Secretary of the Treasury
* Part 132; — Sec. 5(b), 40 Stat. 415 and 966; Sec, 2, 48 Stat. 1;
54 Stat. 179; Public No. 354, 77th Congress, 55 Stat. 838; Ex.
Order 8389, April 10, 1940, as amended by Ex. Order 8785, June 14,
1941, Ex. Order 8832, July 26, 1941, Ex. Order 8963, December 9,
1941, and Ex. Order 8998, December 26, 1941; Ex, Order 9193,
July 6, 1942; Regulations, April 10, 1940, as amended June 14,
1941, and July 26, 1941f
- 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*
10 a?
t
-
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
February 1 0 * 1 9 4 3 ------------•
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 11? (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
(,
3^
Washington
EOR RELEASE, MORNING NEWSPAP®§,
Friday « February 5, 1943______ .
0ut? bill
The Secretary of the treasury, hy this public notice, invites tenders
for $ 700*000,000
, or thereabouts, of
91 -"day Treasury bills, to be issued
•
The Dills of this series will
^
on a discount basis under competitive bidding.
be dated
February 10. 1943
.
.
.
» and will mature
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
P/ar
closing hour, two o'clock p. m., Eastern ¿ I W s a Ä time, Monday, February 8, 1941-,
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
It is urged that tenders be made on the pointed forms and for
Piersi
iaä tra
b in in 1
Isnied b;
¡pis app!
# arai
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
w ia t
federa
pncem
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
idMs
face amount of Treasury bills applied for, unless the tenders are accompanied by
accep
M at
an express guaranty of payment by an incorporated bank or trust company.
Hail
Immediately after the closing hour, tenders will be opened at the Federi
TREASURY DEPARTMENT
Washington
FOR RELEASE, M O R N I N G N E W S PAPERS,
Friday, F e b r u a r y 5, 1943.
'2-4-43
;
A
;
.The
S e c r e t a r y o f the Tr e a s u r y ,
'invites tenders
for $ 7 0 0 , 0 0 0 , 0 0 0 ,
Tre a s u r y bills,
to be
tive bidding.
1943,
or thereabouts,
The b i l l s o f this
a nd will m a t u r e M a y 12,
series w i l l be d a t e d F e b r u a r y 10,
1943,
w h e n the face a m o u n t will b e s
• T h e y will be i s s u e d in b e a r e r f o r m
and in d e n o m i n a t i o n s of $1,000,
$500,000,
o f 91-day'
i s s u e d on a d i s c o u n t basis, u n d e r c o m p e t i
payable w i t h o u t interest.
only,
b y this p u b l i c notice,
and $1,000,000
$5>000,
( m a t u r i t y value)."
$10,000,
£100,000,
‘ ’5
T e n d e r s wil l be r e c e i v e d at Federal Reserve. B a n k s and'
Branches up to the c l o s i n g hour, two o ’ c l o c k p. 'm.„,.E a s t e r n W a r
time, Monday, F e b r u a r y 8, 1943.
T e n d e r s wil l not* b e ,r e c e i v e d
at the T r e a s u r y D e p a r t m e n t , W a s h i n g t o n .
E a a h tend e r m u s t be for
an even m u l t i p l e o f $ 1 , 0 0 0 , and the p r i c e o f f e r e d m u s t be e x
pressed on the b a sis of 100, w i t h n o t m o r e than three decimals,
e. g., 99.925.
F r a c t i o n s m a y n o t be used.
It is u r g e d that
tenders be m a d e o n the p r i n t e d forms and f o r w a r d e d in the s p e
cial e n v e l o p e s w h i c h w i l l be s u p p l i e d b y Federal Reserve Banks
or B r a n c h e s on a p p l i c a t i o n therefor.
T e n d e r s will be r e c e i v e d 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
banks and trust c o m p a n i e s a nd f r o m r e s p o n s i b l e and r e c o g n i z e d
dealers in i n v e s t m e n t securities.
T e n d e r s f r o m others m u s t be
accompanied b y p a y m e n t o f 2 p e r c e n t of the face a m o u n t of T r e a s
ury b i lls a p p l i e d for, u n l e s s the tenders are a c c o m p a n i e d b y an
express g u a r a n t y of p a y m e n t b y an i n c o r p o r a t e d b a n k or trust
company.
I m m e d i a t e l y a f t e r the cl o s i n g hour, tenders wil l be o p e n e d
at the Federal Reserve B a nks and Branches, f o l l o w i n g w h i c h p u b
lic a n n o u n c e m e n t will be m a d e b y the S e c r e t a r y of the T r e a s u r y
of the a m o u n t and p r ice range of a c c e p t e d bids.
Those sub
mitting tenders will be a d v i s e d of the a c c e p t a n c e or r e j e c t i o n
thereof.
The S e c r e t a r y o f the T r e a s u r y e x p r e s s l y reserves the
right to accept o r r e j e c t a ny or all tenders, in w h o l e or in
part, and his a c t i o n in a n y such re s p e c t shall be final.
Pay
ment of a c c e p t e d t e n ders at the p r i c e s o f f e r e d m u s t be m a d e or
completed at the Federal Reserve B a n k in c a s h or o t h e r i m m e
diately a v a i l a b l e funds on F e b r u a r y 10, 1943.
35-26
(Over)
2
The income d e r i v e d f r o m T r e a s u r y bills, w h e t h e r interest or
g a i n fro m the sale or o t h e r d i s p o s i t i o n of the bills, shall not
hav e any exemption, as such, and loss f r o m the sale or o t h e r d i s
p o s i t i o n of T r e a s u r y b i lls shall not h a v e a n y special treatment,
as such, u n d e r Federal tax Act s n o w or h e r e a f t e r enacted.
The
bills shall be subject to estate, inheritance, gift, or o t h e r
excise taxes, w h e t h e r Federal or State, b u t shall be exempt from
all taxation n o w or h e r e a f t e r im p o s e d on the p r i n c i p a l or i n t e r
est t h e r e o f b y any State, or a n y of the p o s s e s s i o n s of the United
States, or b y an y local taxing a u t h ority.
For p u r p o s e s of t a x a
tion the a m o u n t of d i s c o u n t at w h i c h T r e a s u r y b i l l s are originally
sold b y the U n i t e d S t ates shall be c o n s i d e r e d to be interest.
U n d e r S e c t i o n s 42 and 117 (a) (1) o f the Internal R e v enue Code, as
a m e n d e d b y S e c t i o n 115 of the R e v enue A ct of 1941, the amount of
d i s c o u n t at w h i c h b i l l s issu e d h e r e u n d e r are sold shall n ot be
c o n s i d e r e d to accrue u n t i l such bills shall be sold, r e d e e m e d or
o t h e r w i s e d i s p o s e d of, and s uch b i l l s are e x c l u d e d f r o m considera
tion as capital assets.
A c c o r d i n g l y , the o w n e r o f T r e a s u r y bills
(other than life i n s u r a n c e companies) i s sued h e r e u n d e r n e e d i n
clude in his income tax r e t u r n o n l y the d i f f e r e n c e b e t w e e n the
p r ice pai d for suc h bills, whether' on o r i g i n a l issue o r on s u b
sequent purchase, a nd the a m ount 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
sale or r e d e m p t i o n at m a t u r i t y d u r i n g the t a x able y e a r for w h i c h
the retu r n is made, as o r d i n a r y g a i n or loss.
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 No. 418, as amended, and this
n o t ice, p r e s c r i b e the terms o f the T r e a s u r y bills a n d g o v e r n the
c o n d itions o f their issue.
Copies of the c i r c u l a r m a y be o b
t a ined f r o m any Federal Reserve B a n k or Branch.
-oOo-
February 3» 19**3
STATUTORY DEB g? LIMITATION
AS OF JANUARY 31. 19**3.
Section 21 of the Second Liberty Bond Act, as amended, provides that the
face amount of obligations issued under authority of that Act, "shall not exceed
in the aggregate $125,000,000,000 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 January 3*-» 19^3*
Interest-bearing:
Bonds $^9,273,^73.150
Treasury
Savings (maturity
19,gte,606,000
value)*
136,863,000
Depositary
7gU.179.607
Adjusted Service
Treasury notes
Certificates of
indebtedness
Treasury bills
(maturity value)
$125*000,000,000
$70,077,121,757
21,63S,6Uo,950
lkt386,0^,000
Matured obligations, on
which interest has ceased
Bearing no interest (U,S.
War Savings stamps)
6^,9S^,650
22U.901.2U7
Face amount of obligations
issuable under above authority
il3.giU.38l.60U
$ 11.185,618.396
Reconcilement with Statement of the Public Debt
(On the basis of daily Treasury Statements)
January 31. 19U3
Total face amount of outstanding public debt obligations
issued under authority of the Second Liberty Bond Act,
as amended
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:
195,960, **20
Interest-bearing (Pre-War, etc.)
Matured obligations on which
interest has ceased
Bearing no interest
$ 113 ,81**,381,60**
3.696.U83.6U9
110,117,897,955
95l.te6.H35
8m.o6q.32it.39H
Total gross public lebt outstanding January 31, 19^3
* Approximate maturity value. Principal amount (current redemption value)
according, to statement of the public debt on the basis of daily Treasury
Statements $l6,2**6,122,351
February 5, 1943.
STATUTORY DEBT LIMITATION
AS OF JANUARY 31. 1943.
Section 21 of the Second Liberty Bond Act, as amended, provides that
the face amount of obligations issued under authority of that Act, ’’shall
not exceed in the aggregate $125,000,000,000 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
$125,000,000,000
Outstanding as of January 31, 1943:
Interest-bearing:
Bonds $49,273,473,150
Treasury
Savings (maturity
19,942,606,000
value)*
136,863,000
Depositary
724.179.607
Adjusted Service
Treasury notes
Certificates of
indebtedness
Treasury bills
(maturity value)
$70,077,121,757
21,638,640,950
14,386,044,000
7.422,689,000,
43.447.373.950
113,524,495,707
Matured obligations, on
which interest has ceased
Bearing no interest (U. S.
War Savings stamps)
64,984,650
113.814.381.604
224.901.247
Face amount of obligations
issuable under above authority
$
618,39j6
Reconcilement with Statement of the Public Debt
(On the basis of daily Treasury Statements!
January 31. 1943
Total face amount of outstanding public debt obligations
issued under authority of the Second Liberty Bond Act,
as amended
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.)
195,960,420
Matured obligations on which
interest has ceased
10,303,595
Bearing no interest
____ 745,162,424
$113,814,381,604
3.696.483.649
110,117,897,955
951,426.439
Total gross public debt outstanding January 31, 1943
$111,069,324,394
* Approximate maturity value. Principal•amount (current redemption value)
according to statement of the public debt on the basis of daily Treasury
Statement $16,246,122,351
35-27
oOo—
ing n o n e o f the nic k e l
mind#
that
P r o d u c t i o n of this
cal w a r m e t a l s ,
volume of more
Also*
preliminary
coin,
was begun
the
save
criti
a n d h a s n o w r e a c h e d the
than $2,000,000 worth a month#
the
Commissioners will be
stages o f production
able
of zinc-coated,
steel
year* s p r o d u c t i o n #
i n the
dpie-cent p i e c e ,
from any coin in o u r history.
strips,
to f r e e
T h i s year* s c o m m i s s i o n w i l l
silv e r coins
to w i t n e s s
a new wartime
w i t h the f a m i l i a r L i n c o l n design,
263.000
coin in the p o p u l a r
its a l l o y c h a n g e d to
in October,
of a composition different
coin,
identifies
is b e i n g
specimens
taken at
The n u m b e r to b e
stamped out
copper for munitions#
inspect
that have been
This
of more
than
r a n d o m f r o m the
t e s t e d is t h e l a r g e s t
in
h i s t o r y as w a r s t i m u l a t e d b u s i n e s s h a s m a i n t a i n e d d e m a n d f o r
coins at u n p r e c e d e n t e d
Coins
r ates#
f r o m the D e n v e r a nd S a n F r a n c i s c o Mints
s e n t t o P h i l a d e l p h i a u n d e r s eal,
the o u t p u t
At
2.000
of
the p a r e n t
tested,
along with
institution.
all U n i t e d States Mi n t s
d e l i v e r e d f r o m the
and will be
have been
one
silver coin out of each
c o i n i n g r o o m to
m u s t be p r e s e r v e d for test b y
the S u p e r i n t e n d e n t
t he C o m m i s s i o n #
- 2
Washington;
George
O l i n R. H i g g i n s ,
C. D a v i s ,
Norwich,
The
chemist,
fruit grower,
Philadelphia;
Hurlock,
A r t h u r E.
Maryland;
Story,
hanker,
Connecticut*
statutory
W i l l i a m H.
Preston Delano,
Joseph Buford,
ex-officio members
Kirkpatrick,
are:
federal district
C o m p t r o l l e r o f the C u r r e n c y ,
assayer,
judge,
Philadelphia;
Washington;
U nited States A s s a y Office,
and
New York
City.
D r.
Bearce will
States Mint weights
take
to P h i l a d e l p h i a
the official U n i t e d
that have b e e n calibrated b y
the B u r e a u
of
Standards•
Under Mint
ceives
a special medal.
a likeness
first
regulations,
of Lincoln on
coinage press,
Members
for their
the
T h i s y e a r the b r o n z e p i e c e w i l l
the face,
installed
serve without
re
have
a n d a r e p r o d u c t i o n o f the
in 1793,
on the
compensation,
but
reverse
are
side.
reimbursed
expenses.
Mrs. N e l l i e T a y l o e
vene
e a c h m e m b e r o f the C o m m i s s i o n
Ross, D i r e c t o r o f
the A n n u a l A s s a y C o m m i s s i o n ,
existence
o f the U n i t e d
to l o o k a b o u t a b i t
"pyx” boxes
of coins
unusual business,
Their
able
outside
sampled,
reflecting wartime
testing will be
they will be
cent piece,
to b e
in this,
States Mint.
bers desire
to
see
the Mint,
And
the
should
copper,
its m e m
carefully guarded
they will witness
changes
c o n f i n e d to
the
con
the 1 5 0 t h y e a r of
some
in coinage.
silver coinage,
in p r o d u c t i o n the n e w
m a d e o f silver,
will
but
" V i c t o r y ” 5-
and manganese,
and
contain-
On Wednesday,
venerate
institution,
the U n i t e d States M i n t at Philp^diphia,
a committee, o f p r o m i n e n t
citizens
a l o n g w i t h thrbe^ statutory,
The
sixteen members
appointed by^the
e x - o f f i c i o mjmroers,
of this y e a r * s
President,
to e x e r c i s e
on
Commission appointed
V
b y the President
ares
Charles Diébold,
Russell Hopkins,
dent, U n i t e d
Jr*,
attorney,
manufacturer,
Public Markets,
Mrs*
R i c h a r d J*
Miss
Josephine
Reynolds,
Philadelphia;
Inc*,
Jr*,
Buffalo,
Ne w York;
S a m Shore,
Providence,
Winston-Salem,
Hhode
N e w Y o r k City;
s.
Rough Diamond Company,
N e w Y o r k City;
Prank Cosgrove,
van Berg,
president,
and treasurer of Johnson and Johnson, N e w Brunswick,
Chicago;
J u d g e H e n r y D. H a r l a n ,
Hospital,
Baltimore;
J o h n P.
Fitzgerald,
Finn, W e ehawken,
N e w Jersey;
sion of weights
and measures,
Great Neck,
Dr*
H e n r y W.
secretary
New
Jersey;
former mayor,
p r e s i d e n t o f the board,
B e n Grey,
Island;
N o r t h Carolina;
Schain,
George Crowley,
presi
Bosto
John Hopkins
New York;
Bearce,
Mrs*
chief,
Neil
divi
National Bureau of Standards,
The annual
" trial of the c o i n s ” , r e q u i r e d by law to
insure that the n a t i o n ’s m o n e y comes u p
fineness and weight, wil l
Wedne sday and T h u r s d a 5>'
be held
at the U n i t e d States M i n t at
to standards of
Philadelphia,
the T r e a s u r y announced
today.
Aq A s s a y C o m m i s s i o n of s i x t e e n m e m b e r s a p p o i n t e d by
t h e j n r e ^ i d e n t and three e x - o f f i c i o m e m b e r s d e s i g n a t e d by statute
wil l
p e r f o r m the t i m e - h o n o r e d function,
w i t h o u t l a pse
under
w h i c h has b e e n carried out
since 1*792. An A s s a y C o m m i s s i o n is r e q u i r e d
the st a t u t e s
to m e e t on the second W e d n e s d a y of F e b r u a r y
li Presi
sixteen members
b y the President
o f this year* s C o m m i s s i o n a p p o i n t e d
ferles
tp, man
Pròli
Ip U . E
are:
pe Sc
C h a r l e s Diefbold,
IN Coirne
*tireroi
Russell Hopkins,
Jr*,
attorney,
manufacturer,
dent, U n i t e d Public Markets,
Miss
M.
mm
V
Mrs.
Iperfore
rthe si
each year.
The
IdIssi
R i c h a r d J.
Reynolds,
Philadelphia;
Inc.,
Jr.,
Buffalo,
Ne w York;
S a m Shore,
Providence,
Winston-Salem,
Rhode
N e w Y o r k City;
s.
Rough Diamond Company,
N e w Y o r k City;
Prank Cosgrove,
van Berg,
president,
and treasurer of Johnson and Johnson, N e w Brunswick,
Chicago;
J u d g e H e n r y D. H a r l a n ,
Hospital,
Baltimore;
J o h n P. F i t z g e r a l d ,
Great Neck,
peilPi
divis
K
ì
Pi; de
banke
secretary
New
Jersey;
former mayor,
p r esident o f the board,
B e n Grey,
Island;
N o r t h Carolina;
Josephine Schain,
George Crowley,
presi
sllillian
Boston;
John Hopkins
New York;
Mrs.
Neil
Dr Jjfic
16i
Finn, Weeha w k e n ,
N e w Jersey;
sion of weights
and measures,
Dr.
H e n r y W.
Bearce,
chief,
divi
National Bureau of Standards,
Nart
TREASURY DEPARTMENT
Washington
POR R E L E A S E M O R N I N G NEWSPAPERS,
Sunday, F e b r u a r y 7, 1943.
2/5/43
Press Service
No. 3 5 - 2 8
T h e a n n u a l "trial of t he c o i n s " , r e q u i r e d b y l a w to insure "that; t he n a t i o n ' s m o n e y
ness a n d weight,
comes up to s t a n d a r d s
of f i n e
w i l l be h e l d W e d n e s d a y and T h u r s d a y at the
U n i t e d Stat e s Mint at P h i l a d e l p h i a ,
the T r e a s u r y a n n o u n c e d t o
day.
A n A s s a y C o m m i s s i o n of s i x t e e n m e m b e r s a p p o i n t e d by the
P r e s i d e n t a n d t h r e e ex- o f f i c i o m e mbers d e s i g n a t e d by s t a tute
will p e r f o r m the t i m e - h o n o r e d function, w h i c h has been c a r ried
out w i t h o u t l a pse s i nce 1792,
An A s s a y C o m m i s s i o n is r e q u i r e d
u n d e r t he s t a tutes to meet on the s e c o n d W e d n e s d a y of F e b r u a r y
each year.
T he s i x t e e n m e m b e r s
by the P r e s i d e n t arei
of this y e a r ' s C o m m i s s i o n a p p o i n t e d
C h a r l e s Diebold, Jr., attorney, Buffalo, N e w York; R u s s e l l
Hopkins, m anufacturer, Ph i l a d e l p h i a ; S a m Shore, president,
U n i t e d P u b l i c Markets, Inc., Providence, R h o d e Island; Mrs.
R i c h a r d J. Reynolds, Jr., W i n s t o n - S a l e m , N o r t h Carolina; Miss
Jos e p h i n e Schain, N e w Y o r k City; S, van Berg, president, R o u g h
D i a m o n d Company, N e w Y o r k City; F r a n k Cosgrove, s e c r e t a r y a nd
t r e a s u r e r of J o h n s o n and Johnson, N e w Brunswick, N e w Jersey;
G e orge Crowley, Chicago; John F. Fitzgerald, f o r m e r mayor,
Boston; Judge H e n r y D. Harlan, p r e s i d e n t of the board, Johns
Hopkins Hospital, Baltimore; Ben Grey, G r e a t Neck, N e w York;
Mrs, N e i l Finn, Weehawken, N e w Jersey; Dr. H e n r y W. Bearce,
chief, di v i s i o n of w e i g h t s a n d measures, N a t i o n a l B u reau of
Standards, Wash i n g t o n ; Olin R. Higgins, f r uit grower, Hurlock,
Maryland; G e o r g e C. Davis, chemist, P h iladelphia; A r t h u r E,
Story, banker, Norwich, Conn e c t i c u t .
The statutory
e x - o f f i c i o m e m b e r s aret
W i l l i a m H. Kirkpatrick, f e d e r a l district judge, P h i l a
delphia; P r e s t o n Delano, C o m p t r o l l e r of the Currency, W a s h i n g
ton; a n d J o s e p h Buford, assayer, U n i t e d States A s s a y Office,
N e w Y o r k City,
Dr. B e a r c e w i l l t a k e to P h i l a d e l p h i a t he official U n i t e d
States Mint w e i g h t s t hat have been c a l i b r a t e d by the B u r e a u
of Standards,
r
2
-
U n d e r M i n t regulations, e a c h m e m b e r of t he C o m m i s s i o n
r e c e i v e s a s p e c i a l medal.
This y e a r t he b r o n z e p i e c e w i l l
have a liken e s s of L i n c o l n on; the face, a n d a r e p r o d u c t i o n of
t he first c o i n a g e press, i n s t a l l e d in 1793, on the r e v e r s e
side •
M e m b e r s serve w i t h o u t
for t h e i r expenses.
compensation,
but a re r e i m b u r s e d
Mrs. N e l l i e T a y l o e Ross, D i r e c t o r of t he Mint, w i l l c o n
ven e t h e A n n u a l A s s a y Commission, in this, t he 1 5 0 t h y e a r of
t h e existence of the U n i t e d States Mint.
A n d should its m e m
bers desire to l o o k a b o u t a bit outside t h e c a r e f u l l y g u a r d e d
up y x ,! boxes of coins to be sampled, t h e y w i l l w i t n e s s some
u n u s u a l business, r e f l e c t i n g w a r t i m e changes in coinage.
T h e i r t e s t i n g w ill be c o n f i n e d to the s i l v e r coinage, but
t h e y w i l l be a b l e to see in p r o d u c t i o n t h e n e w ”Victorjr fivecent piece, made of silver, copper, a n d manganese, and c o n
t a i n i n g n one of the n i c k e l t h a t i dentifies the coin in the
p o p u l a r mind.
P r o d u c t i o n of this coin, its a l l o y c h a n g e d to
save c r i t i c a l w a r metals, was b e g u n in October, a n d has n o w
r e a c h e d t he v o l u m e of mor e than $ 2 , 0 0 0 , 0 0 0 w o r t h a month.
Also, t h e C o m m i s s i o n e r s w i l l be a b l e to w i t n e s s in the
p r e l i m i n a r y stages of p r o d u c t i o n a n e w w a r t i m e one-cent
piece, of a c o m p o s i t i o n d i f f e r e n t f r o m a n y coin in our history.
This coin, w i t h the f a m i l i a r L i n c o l n design, is b e i n g s t a mped
out of zinc-coated, steel strips, to f ree copper f or munitions.
This y e a r ’s c o m m i s s i o n w i l l inspect specimens of more than
2 6 3 . 0 0 0 s i l v e r coins t hat h a v e been t a k e n at r a n d o m from the
y e a r ’s prod u c t i o n .
T h e n u m b e r to be t e s t e d is the largest in
h i s t o r y as w a r s t i m u l a t e d b u s i n e s s has m a i n t a i n e d d e mand for
coins at u n p r e c e d e n t e d rates.
Coins f r o m the D e n v e r and San F r a n c i s c o Mints have been
sent to P h i l a d e l p h i a u n d e r seal, and w i l l be tested, along
w i t h th e output of t h e parent institution,
At al l U n i t e d States M i n t s one s i l v e r coin out of each
2 . 000
d e l i v e r e d f r o m the co i n i n g r o o m to the S u p e r i n t e n d e n t
must be p r e s e r v e d f o r test by t h e C o m m ission.
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T R E A S U R Y DEP ARTMENT
WASHINGTON
OFFICE O F
CO M M ISSIO N ER OF IN TER N A L REVENU E
~~— :
February
6,• 1943
W
A D D R E SS R E P LY TO
C O M M IS S IO N E R O F IN T E R N A L REVE N U E
AN D R E F E R T O
TO:
MR. SURREY
FROM:
MR. C A M
I enclose herewith a supply of I* T. 3599 on the subject
of Section 722 of the Internal Revenue Code.
There is also
enclosed a proposed press release which should, if possible,
be released Monday.
Will you review same and then transmit
it to Mr. Sullivan for any comments that he deems appropriate.
In the interests of time, if you have any corrections you
care to make in the press release, please return same this
P. M.
Enclosures.
six months after tha date presoribed for tha fiiing of tha exeesa
profits tax ratura.
Tha ruXing elso deaXs with tha requiramants
whara corporations eXaim tha benefits of section 7X0(a}(5) of tha
InternaX Revenue Goda, as addad by section 222(b) of tha Ravema
Aot of X942, which raXata to dafarmant of payaient of axoaaa profits
tax shown on tha X942 raturn based upon a daim that suoh taxes ara
excessive and diseriminatory.
TSmsmCf CHPAB'MNT
Bureau of Internal Revenue
Washington, D. C,
FOR
m m m m
msaai
f m #
Release No.
Cona&issioner of Internal Bereaue Guy T. Hslvcrlng today called
attention to a ruling which will he published la the Internal Revenue
Bulletin, relative to the general relief provisions of seotion 728 of
the Internal Revenue Code, as amended by section 228 of the Revenue
Act of 1942.
fhe Commissioner stated that the ruling sets forth oertaln con
ditions under which applications for relief on fora §91 (revised
January 1948), which oust he filed on or before April 21, 1943 in order
to obtain relief for the tenable years 1940 and 1941, may be supple
mented within a reasonable time after the time prescribed for filing
if it is not poeeible for the corporation to obtain and present ell
the detailed information required to fully establish its eligibility
for relief end the raount of its constructive average base period net
income.
fhe Commissioner stated, however, that the corporations appli
cation for relief must set forth in detail and under oath each ground
under section 722 and the factors upon which tha application is based
with sufficient data end information to apprise the Coralssioner of
the exact basis thsrsof.
Ths same conditions apply to applications for rslisf for the taxsbls ysar 1942
subsequent years which must be filed not later than
2
six months after the date prescribed for the filing of the excess
profits tax return.
'The ruling also deals with the requirements
where corporations claim the benefits of section 710(a)(5) of the
Internal Revenue Code, as added by section 282(b) of the Revenue
Act of 1942, which relate to deferment of payment of excess profits
tax shown on the 1942 return based upon a claim that such taxes are
excessive and discriminatory.
TREASURY DEPARTMENT
Bureau of Internal Revenue
Washington, D. C.
FOR IMMEDIATE RELEASE
^-^vTv €_jl
Press Roloaso
-—
J
2f
Commissioner of Internal Revenue Guy T. Helvering today called
attention to a ruling which will he published in the Internal Revenue
Bulletin, relative to the general relief provisions of section 722 of
the Internal Revenue Code, as amended by section 222 of the Revenue
Act of 1942.
The Commissioner stated that the ruling sets forth certain con
ditions under which applications for relief on form 991 (revised
January^1943), which must be filed on or before April 21, 1943^ in order
to obtain relief for the taxable years 1940 and 1941, may be supple
mented within a reasonable time after the time prescribed for filing
if it is not possible for the corporation to obtain and present all
fie Coi
nation
ijpind
the detailed information required to fully establish its eligibility
itiOD
for relief and the amount of its constructive average base period net
income.
The Commissioner stated, however, that the corporation’s appli
cation for relief must set forth in detail and under oath each ground
under section 722 and the factors upon which the application is based
with sufficient data and information to apprise the Commissioner of
the exact basis thereof.
Hie same conditions apply to applications for relief for the tax
able year 1942 and subsequent years which must be filed not later than
| of tb
ireo
Midi
TREASURY DEPARTMENT
B u r e a u of Int e r n a l R e v e n u e
Washington
FOR I M M E D I A T E RELEASE,
Monday, F e b r u a r y 8, 1943.
•
. Press
No.
S e rvice
35-29
C o m m i s s i o n e r of I n t e r n a l R e v e n u e B u y T , H e l v e r i n g t o d a y
called a t t e n t i o n to a r u l i n g w h i c h w i l l be p u b l i s h e d in t he I n
ternal R e v e n u e Bulletin,
visions
of section
r e l a t i v e to the g e n eral r e l i e f p r o
722 of t h e I n t ernal R e v e n u e Code,
by s e c t i o n 222 of the R e v e n u e Act
as a m e n d e d
of 1942,
T h e C o m m i s s i o n e r s t ated that t h e r u l i n g sets f o rth certain
conditions u n d e r w h i c h a p p l i c a t i o n s for r e l i e f on f o r m 991 (re
vised January, 1943), w h i c h mus t be f i led on or befo r e A p r i l
21, 1943, in order to obtain r e l i e f f o r t h e t a x a b l e years 1 940
and 1941, m ay be s u p p l e m e n t e d w i t h i n a r e a s o n a b l e t ime a f t e r
the time ^p r e s c r i b e d for filing if it is not p o s s i b l e for the
corporation to obtain and p r e s e n t all t h e detai l e d info r m a t i o n
re q u i r e d to f u lly e s t a b l i s h its e l i g i b i l i t y f o r r e l i e f and t h e
amount of its c o n s t r u c t i v e a v e r a g e b ase p e r i o d net income.
T h e C o m m i s s i o n e r stated, however, that t he c o r p o r a t i o n ’s
a p p l i c a t i o n f o r r e l i e f mus t set f o r t h in deta i l and u n d e r oath
each g r o u n d u n d e r s e c tion 722 a n d t h e factors upon w h i c h the
a p p l i c a t i o n is b a s e d w i t h s u f f i c i e n t data a n d i n f o rmation to
apprise the C o m m i s s i o n e r of t he exact basis thereof.
T h e same c o n d itions a p p l y to a p p l i c a t i o n s for r e l i e f f or
the t a x a b l e y ear 1942 a n d s u b s e q u e n t years w h i c h must be filed
not l a t e r t h a n s ix months a f t e r the date p r e s c r i b e d for the
filing of the excess p r o f i t s t a x return.
T h e r u l i n g also deals
with th e r e q u i r e m e n t s w h e r e c o r p o r a t i o n s c l a i m the benefits of
section 710(a)(5) of t h e In t e r n a l R e v e n u e Code, as a d d e d by
section 222(b) of the R e v e n u e A ct of 1942, w h i c h r e l a t e to d e
ferment of pa y m e n t of excess p r o f i t s t a x shown on t h e 1942 r e
turn b a s e d up o n a claim that suc h taxes a re e x c essive a n d d i s
criminatory.
T h e text of the r u l i n g
is as followsi
SECTION
722.— GENERAL RELIEF— CONSTRUCTIVE
A V E R A G E B A S E B E R I O E NET INCOME.
Regulations
109.
1SH3-3-11344
I n t e r n a l B e v e n u e Code
T i m e f o r f i l i n g a n d i n f o r m a t i o n t o -be
c o n t a i n e d in F o r m 991 (revised J a n uary
1943) - A p p l i c a t i o n f o r relief u n d e r
s e c tion 722 of t he I n t ernal B e v e n u e Code.
A d v i c e has b een r e q u e s t e d r e l a t i v e to section 722 of
t h e I n t e r n a l B e v e n u e Code, as a m e n d e d by se c t i o n 222 (a)
of t he B e v e n u e Act of 1942, w h i c h extends g e neral r e lief
to c o r p o r a t i o n s w h e r e t h e i r excess p r o fits taxes are de
t e r m i n e d to be e x c e s s i v e a n d di s c r i m i n a t o r y . ■ The r e l i e f
is g r a n t e d to c o r p o r a t i o n s w h i c h e s t a b l i s h w h a t w o u l d be
a f air a n d just a m ount r e p r e s e n t i n g n o r m a l earnings to
be u s e d as a c o n s t r u c t i v e a v e r a g e b ase p e r i o d net income
f o r th e pur p o s e s of an excess p r o fits t a x b a s e d u p o n a
c o m p a r i s o n of n o r m a l earnings a n d earnings during the e x
cess p r o fits t a x t a x a b l e year.
T his r e l i e f has been made
r e t r o a c t i v e to t a x a b l e years b e g i n n i n g in 1940 a nd 1941*
In order to obtain r e l i e f w i t h r e s pect to the t a x
shown on the excess p r o fits t a x r e t u r n f o r t a x a b l e years
b e g i n n i n g in 1 9 4 0 or 1941, an a p p l i c a t i o n on F o r m 991
(revised J a n u a r y 1943) m ust be f i led on or b e f o r e A p r i l
21, 1943, w i t h the C o m m i s s i o n e r of I n t ernal Bevenue,
Wash i n g t o n , D. C.
However, if the t a x p a y e r has a l r e a d y
f i l e d a claim for r e l i e f u p o n F o r m 991 u n d e r s e ction 722
p r i o r to its a m e n d m e n t by the B e v e n u e A c t of 1942, the
data a nd i n f o r m a t i o n s u b m i t t e d w i t h s u c h ea r l i e r form
n e e d not be r e p e a t e d in F o r m 991 (revised J a n u a r y 1943)>
p r o v i d e d r e f e r e n c e is made to s u c h ea r l i e r f o r m as c o n
s t i t u t i n g a part of the r e v i s e d form*
T he c o r p o r ation's
a p p l i c a t i o n for r e l i e f must set f o r t h in detail a n d u n d e r
o a t h each g r o u n d u n d e r s e c t i o n 722 u p o n w h i c h the a p p l i
cation for r e l i e f is based, a n d facts suf f i c i e n t to a p
p r ise t h e C o m m i s s i o n e r of t h e exact basis thereof*
T he
mere s t a t e m e n t of t he p r o v i s i o n or p r o v i s i o n s of l a w ^ u p
on w h i c h a c l a i m for r e l i e f is based shall n o t ^ c o n s t i
t u t e an a p p l i c a t i o n fo r r e l i e f w i t h i n th e m e a n i n g of
section 722:.
If a c l a i m f or r e l i e f is based u p o n s e c
t ion 722 (b) (5 ) (relating to factors other than t h ose
e x p r e s s l y p r o v i d e d by s e c t i o n 722 (b)( 1 ), (2 ), (3)> and
(4 )), the a p p l i c a t i o n must s t a t e the f a c tors w h i c h affect
t h e c o r p o r a t i o n ’s b u s i n e s s a n d w h i c h m a y r e a s o n a b l y be
c o n s i d e r e d as r e s u l t i n g in an i n a d e q u a t e s t a n d a r d of
(over)
n o r m a l .earnings d u r i n g t h e base period.
However, if it is
not p o s s i b l e for th e t a x p a y e r on or b e f o r e A p r i l 21, 1943»
to o b t a i n a nd p r e s e n t all th e d e t a i l e d i n f o r m a t i o n r e
q u i r e d to e s t a b l i s h its e l i g i b i l i t y f o r reli e f an d t h e
a m o u n t of its c o n s t r u c t i v e a v e r a g e bas e p e r i o d net income,
s u c h d e t a i l e d i n f o r m a t i o n ma y - be* s u b m i t t e d l a t e r as a s u p
p l e ment to t h e appl i c a t i o n .
If the b e n e f i t s of section 722 are c l a i m e d w i t h respect
to t h e t a x shown on t he r e t u r n for a t a x a b l e y e a r beginning
in 1942 or a s u b s e q u e n t year, an a p p l i c a t i o n must be f i led
in t he same m a n n e r as is p r e s c r i b e d w i t h r e s p e c t to a p p l i
cations f i l e d f o r years b e g i n n i n g in 1 9 4 0 or 1941, except
t h a t t he a p p l i c a t i o n for a t a x a b l e yea r b e g i n n i n g in 1942
or a s u b s e q u e n t y e a r mps t be f i l e d not l a t e r than six
m o n t h s a f t e r t h e date p r e s c r i b e d b y l aw f o r the f i l i n g of
t he excess p r ofits t a x r e t u r n . S u c h dat e includes t he
p e r i o d of a n y extension of tim e g r a n t e d for the f i l i n g of
s u c h return.
C o r p o r a t i o n s cl a i m i n g t he b e n e f i t s of s e c
t ion 710 (a) (5) of t he Inter n a l R e v e n u e Code, as a d d e d
by s e c t i o n 222 (b) of the R e v e n u e Ac t of 1942, r e l a t i n g
to d e f e r m e n t of p a y m e n t of excess p r o fits t a x shown on
the return, m u s t a t t a c h F o r m 991 (revised J a n u a r y 1943) to
t h e i r excess profits t a x r e t u r n s at t he t i m e of the filing
of s u c h returns.
In s u c h case, t h e r e must be set f o r t h in
t he f o r m th e data a nd i n f o r m a t i o n relied'upon, in s u f f i
cient detail to e s t a b l i s h e l i g i b i l i t y for relief, the
a m o u n t of c o n s t r u c t i v e a v e r a g e bas e p e r i o d net income
claimed, t h e a m ount of t a x r e d u c t i o n c l a i m e d by t h e u s e of
s e c t i o n 722, a nd the a m o u n t of t a x def e r m e n t c l a i m e d on
the return.
A c o r p o r a t i o n may, w i t h i n a r e a s o n a b l e tim e a f t e r the
t i m e -prescribed fox the f i l i n g of F o r m 991 (revised January
1943), s u p p l e m e n t its a p p l i c a t i o n f o r r e l i e f b y furn i s h i n g
a d d i t i o n a l data a n d i n f o r m a t i o n to p r o v e the g r o u n d s for
r e lief s t a t e d in s u c h a p p l i c a t i o n a n d to e s t a b l i s h the
a m o u n t of the c o n s t r u c t i v e a v e r a g e b a s e p e r i o d net income*
However, no n e w g r o unds for r e l i e f p r e s e n t e d by a c o r p o r a
tion a f t e r the d ate p r e s c r i b e d f o r the f i l i n g of its a p p l i
cation f o r r e l i e f wil l be c o n s i d e r e d . -
-oOo-
TREASURY DEPARTMENT
Washington
FOR RELEASE, MORNING NEWSPAPERS,
Tuesday. February 9, I943_.----2/8/43
Press Service
3
The Secretary of the Treasury announced last evening that the tenders for
1700,000,000, or thereabouts, of
to mature May
91-day Treasury bills to be dated February 10 and
12, 1943, which were offered on February 5, 1943, were opened at the
Federal Reserve Banks on February 8»
The details of this issue are as follows:
Total applied for - $1,041,767,000
Total accepted
704,732,000
Range of accepted bids:
High
Average price
- 99.940 Equivalent rate of discount approx. G.237$ per annua
_ 99.905
»
«
»
»
«
0.376$ per annua
- 99,906
»
»
»
«
«
0.372$ per annua
(54 percent of the amount bid for at the low price was accepted)
Total
Ad d lied For
Federal Reserve
District
Boston
New York
Philadelphia
Cleveland
Richmond
Atlanta
Chicago
St. Louis
Minneapolis
Kansas City
Dallas
San Francisco
TOTAL
22,826,000
750,785,000
25,214,000
34,104,000
23,374,000
10,040,000
72,167,000
1 7 ,035,000
4,877,000
14,480,000
13,120,000
53.745.000
*1,041,767,000
$
Total
Accepted
* 1 9 ,356,000
444,874,000
20,223,000
28,929,000
22,362,000
9,764,000
60,021,000
15,839,000
4,868,000
14,075,000
13,028,000
_5 1 .393.000
170 4 ,732,000
\
TREASURY DEPARTMENT
Washington
FOR RELEASE, M O R N I N G N E W S P A P E R S ,
Tuesday, F e b r u a r y 9, 1 9 4 5»_______
2-8-43
Press Se r v i c e
No. 35-30
T he S e c r e t a r y of the T r e a s u r y a n n o u n c e d last evening
the tenders
bills
for 0 7 0 0 , 0 0 0 , 0 0 0 ,
or thereabouts,
of 9 1 - d a y T r e a s u r y
to be d a t e d F e b r u a r y 10 and to m a t u r e M a y 12,
were o f f e r e d on F e b r u a r y 5, 1943,
w ere
that
1943,
which
o p e n e d at the Federal
Reserve B a n k s on F e b r u a r y 8.
The details
T o tal
Total
of this issue
are as follows:
a p p l i e d for - 0 1 , 0 4 1 , 7 6 7 , 0 0 0
accepted
704,732,000
Range of a c c e p t e d bids:
High
L ow
Average
price
9 9 , 9 4 0 E q u i v a l e n t rate of d i s c o u n t approx. 0 . 2 3 7 %
p er a n n u m
.
9 9 .905 E q u i v a l e n t rate of d i s c o u n t approx. 0.376,6
per annum
.
9 9 . 9 0 6 E q u i v a l e n t rate of d i s c o u n t approx. 0 . 3 7 2 /o
per annum
(54 p e r c e n t of the a m o u n t b i d for at the l o w price was accepted)
Total
A p p l i e d For
Federal Reserve
District
Boston
New York
Philadelphia
Cleveland
Ri c h mond
P tlanta
Chicago
St. L o u i s
Minneapolis
Kansas C i t y
Dallas
San Fra n c i s c o
TOTAL
0
22,826,000
750,785,000
25.214.000
34.104.000
23.374.000
10.040.000
72.167.000
17.035.000
4,877,000
14.480.000
13.120.000
53.745.000
01,041,767,000
-oOo
Total
Accepted
0 19,356,000
444,874,000
20.223.000
28.929.000
22.362.000
9.764.000
60.021.000
15.839.000
4.868.000
14.075.000
13.028.000
51.3 9 3 . 0 0 0
0704,732,000
FOR IMMEDIATE RELEASE,
February 9, 19U3»
òS
The Bureau of Customs announced today preliminary figures showing the quantities
of coffee authorized for entry for consumption under the quotas for the twelve months
commencing October 1, 19U2, provided for in the Inter-American Coffee Agreement,
proclaimed b y the President on April 15, 19Ul, as follows:
Country of
Production
IJin'®®
Authorized for entry
_____ for consumption_____
Quota Quantity
(Pounds) 1/
As of
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, Yemen, and Saudi
)
1,535,367,083
520,08U,62p
33,019,261;
13,212,917
17,533,713
2U,767,09U
99,680,281;
88,33U,là2
U5 ,1*00,298
2,908,617
78,758,056
32,1*62,535
U,127,276
61,251;,106
(Date)
Jan« 30, 19U3
it
:
(PoundsJ
17 l*,627 , 881*
170,558,972
6 , 921,611
6 ,065,102
6,81*0,1*79
1 0 , 31*9 , 611*
22 ,381*,lai
19,175,912
22,1*1*5,857
1 , 162,376
11,605,51*8
361*,770
155
20,588,667
îroducti
IlfliOl
Èlica
fa
»a
51,653,778
Arabia
)
Other countries not signa- )
tories of the Inter)
American Coffee Agreement)
17,937,561*
patoiy
a aur
pandCa
jfiortii
¡pits pos
1/
ile ie n ,
pia
Quotas revised«
Icoltri
fies of t
pitan Cc
-oOo-
tes revis
TREASURY DEPARTMENT
Washington
FOR IMMEDIATE RELEASE,
Wednesday. Eehruarv 10, 1943.
,•
Press Service
^°*
The Bureau of Customs announced today preliroinaiy figures showing the
quantities of coffee authorized for entry for consumption under the quotas
for the twelve months commencing October 1, 1942, provided for in the InterAmerican Coffee Agreement, proclaimed hy the President on April 15, 1941, as
fallows i
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, Yemen, and Saudi
Arabia
)
Other countries not signa- )
tories of the Inter)
\
American Coffee Agreement)
Quota Quantity
(Pounds) 1J
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
1/ Quotas revised.
oOo-
;
:
: As of
Authorized for entry
for consumption
(Date)
; (Pounds)
J su# 301 1943
M
ItA
It
It
It
It
It
tl
It
tl
It
174,627,884
170,558,972
6,921,611
6,065,102
6,840,479
10,349,614
22,384,411
19,175,912
22,445,857
1,162,376
11,605,548
364,770
155
20,588,667
It
17,937,564
h
h
Commodity
•
•
Established Quota.
:
#
Period
and Country : Quantity
•
Silver or black
foxes, furs, and
articles:
Foxes valued under
$250 ea. and ■whole
furs and skins
Tails
Month of Jan.
Canada
Other than Canada
12 months from
Dec. 1, 1 9 h 2
Unit
of
Quantity
:
:
:
Imports as o f -1
January 30 191*3.
17 ,5 0 0
Number
6 ,3 5 5
7,50 0
Number
5,1*38
5,000
Piece
U62
500
Pounds
U62
None
Silver or black foxes,
furs, and articles:
Paws, head, or other
separated parts
12 months from
Dec. 1, 1 9 k 2
Piece plates
n
550
Pounds
Articles, other
than piece plates
it
500
Unit
Molasses and sugar
sirups containing
soluble nonsugar
solids equal to
more than 6% of
total soluble
solids
Calendar year
1 ,500,000
Gallon
18
20,218
I
s/
b
n/
FOR IMMEDIATE RELEASE,
February 9» 19U3»
The Bureau of Customs announced preliminary figures for imports of commodities
within quota limitations provided for under trade agreements, from the beginning
of the quota periods to January 30, 19U3, 3.nclusive, as follows1
:
i
Commodity
Established Quota
:
•
• Period and Country : Quantity
Cattle less than 200
pounds each
Calendar year
Unit
: Imports as of
of
: January 30, I9U3
:
s Quantity :
100,000
Head
1,093
60,000
Head
10,700
Cattle, 700 pounds
or more each
(other than dairy
cows)
Quarter year from
January 1, 19U3
Whole milk, fresh
or sour
Calendar year
3 ,000,000
Gallon
363
Cream, fresh or sour
Calendar year
1,500,000
Gallon
56
Fish, fresh or
frozen filleted,
etc., cod, haddock,
hake, pollock,
cusk and rosefish
Calendar year
15,000,000
Pound
572,721;
White or Irish
potatoes
certified seed
Other
12 months from
Sept. 15, 19^2
12 months from
Sept. 15
90,000,000
60,000,000
Pound
Pound
30,71*3,351*
563,257
Pound
(unstemmed
equivalent)
Cuban filler tobacco,
unstemmed or stemmed
(other than
cigarette leaf
tobacco), and
scrap tobacco
Calendar year
22,000,000
Red cedar shingles
Calendar year
Undetermined
Square
2,793,272
81,031*
TREASURY DEPARTMENT
Washington
FOR IMMEDIATE RELEASE,
Wednesday. February 10» 1943»,
Press Service
No*
The Bureau of Customs announced preliminary figures for imports of
commodities within auota limitations provided for under trade agreements,
from the Beginning of the quota periods to January 30, 1943, inclusive, as
follows*
Commodity
Cattle less than 200
pounds each
Unit
: Imports as of
of
:January 30,
Established Quota
:
Quantity
:1943.
Period and Country ; Quantity:
Calendar year
100,000
Head
1,093
60,000
Head
10,700
Cattle, 700 pounds
or more each
(other than dairy
cows )
Quarter year from
January 1, 1943
Whole milk, fresh
or sour
Calendar year
3,000,000
Gallon
363
Cream, fresh or sour
Calendar year
1,500,000
Gallon
56
Pish, fresh or
frozen filleted,
etc,, cod, haddock,
hake, pollock,
cusk and rosefish
Calendar year
15,000,000
White or Irish
potatoes
certified seed
Other
12 months from
Sept, 15, 1942
12 months from
Sept. 15
90.000.
60.000.
Cuban filler tobacco,
unstemmed or stemmed
(other than
cigarette leaf
tobacco), and
scrap tobacco
Calendar year
Pound
(unstemmed
22,000,000 eauivalent)
Red cedar shingles
Calendar year
Undetermined
Pound
572,724
000
Pound
000
Pound
30, 743,354
563,257
Square
s, 793,272
81,034
2 -
t
Commodity
•
Silver or "black
foxes, furs, and
articlesi
Foxes valued under
$250 ea. and whole
furs, and skins
Tails
Unit
:Imports as of
of
:January
30,
Established QilOta
*
Quantity
:1943.
Perind and Country i Quantity :
Month of ¿an.
Canada
Other than Canada
17,500
Number
6,355
7,500
Number
5,438
5,000
Piece
462
500
Pounds
462
550
Pounds
None
500
Unit
12 months from
Dec. 1, 1942
Silveh or "black foxes
furs, and articles?
Paws, head, or other
separated parts
Piece plates
Articles, other
than piece plates
Molasses and sugar
sirups containing
soluble nonsugar
solids equal to
more t h a n 6$ of
total soluble
solids
12 months from
Dec. 1, 1942
ii
,i
ti
1,500,000
Calendar year
oOo^
Gallon
18
20,218
m
t m m u m mwàM*
ffe# Sarte* *f % ti« tt «ir»m **Ì itiajr prmXlmtmry f l p w i tfetvlag %hm «n«*-
t u l l i ot «fatti affli «fatti n « ttr « a t « n l f «r «itfaérmnt
mmpUm M
frm wtrthottt®,
f m
\0jj-
ts a -
j|e,M
f ifat b o a tti «Mta« t t it f a llt fa t i im tu# ^ r t i i i t a i 1# ftM M N ri&ft* t f
iggf P i, if iH , a* a t ilflw ft fajr I to
p r a ti* » * * ita t f ¿ p r ll 15» l$ *t* i t i
jjpiihip
1)1« t v t l w tNM$fe* « w t i i t l S f & tf t f , lf% Ì # * t
turo*
ùf
tri«1»
illaa, ovattati 9t trattati «fa#*t iielve ne
«fotti
w
Otuiir
s
I
tifarti
i K » *e !» U « h « d I
!..
ftwt»
|pj
. »
t
f
fthg$ , I f W , | *
■»«».y .
« M
«___ fato»»
ffafoèftt
M
U tM
t K * jr S f ,
i ^ . 30, i?93.
Pmmàn)
Canti»
china
Mtatarjr
I«ttf Ita*
1«
V t t M SlmgiUm
Anatrali*
0 ar»»ajr
%?ri*
fa» Sttltad
Otti»
XitlMflftii^»
Arganti**
Itali
fatta»
1
u.faJpMfa
■3
«»taBjfa
IIMIt
tifo
m.ooo
m
«0
m
i)«
♦
m
m
100
09
m
<m
ti»'
xm
im
m
09
m
m
m
100
f t00O
100
m
m
m
tir
m
1,0 0 0
m
ìli'
tttxltt
fatta*
Wmm&f
Palatili ausi Stttig
Statiti»
faittlwis
»amtjr
Caiaarjr talatti
fatatala
0 * * t* * tl*
Bratti
Batta a£ issiti
i t t laUtl taapafalitt
Btl£Ìtt*t
m
100
m
4»
♦
4»
m
*
«i»
«4»
m
m
09
m
09
*
09
1 ,0 0 0
100
100
i
p
5. «lf ,000
13,000
13,000
i ,000
??,0M
1,000
09
m
09
09
3,000
5*000
09
m
09
49
1,000
1,000
1,000
■09
%k
19,000
f *000
13,000
*
m
1,0 0 0
1,000
1,000
1,000
1,0 0 0
1,0 0 0
1,000
1,000
1,000
m
X ,0 0 0
09
09
09
ÉIÉ
li
m
09
m
m
09
09
09
m
m
m
*N§0t-
llM
09
m
09
•09
09
m
* „ 000,000
Origin
09
09
r
joi
09
*
100
100
«oo.oòo
I» «if.tt»
29,000
y
R i Dai
|.ÌfiÌb®g,
bOVi
salisti
TREASURY DEPARTMENT
Ifashington
Press Service
No. 35-33
FOR M E D I A T E RELEASE,
Wednesday. February 10, 194-3-
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 iiaport quotas established in the Presidents proclamation of
May 28, 194.1, 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
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
Canary Islands
Rumania
Guatemala
Brazil
Union of Soviet
Socialist Republics
Belgium
Wheat, wheat flour, semo
lina, crushed or cracked wheat
WHEAT
: and similar wheat products
Imports
:
Imports
:
May
29, 1942,
Established
:
Established :May 29, 1942, to:
Jan.
30. 1943
Quota
i
: Jan, 30. 1943 :
Quota
(Pounds)
(Pounds)
(Bushels)
(Bushels)
795,000
—
100
-
795,000
—
—
—
—
3,815,000
24,000
13,000
13,000
8,000
75,000
1,000
5,000
5,000
1,000
1,000
1,000
14,000
100
100
100
2 ,0 0 0
3,815,000
—
.
m-m
44
2 ,0 0 0
12,000
100
1,000
1,000
1,000
1,000
1,000
1,000
1,000
1,000
1,000
1,000
1,000
100
100
100
100
800,000
795,000
4 , 000,000
3,815,044
-2-
2/
COTTON CARD STRIPS, COMBER WASTE, LAP WASTE, SLIVER WASTE, AND ROVING WASTE,
WHETHER OR NOT MANUFACTURED OR OTHERWISE ADVANCED IN VALUE. Annual quotas
commencing September 20, by Countries of Origin:
2/
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/ 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)
•
•
•
# TOTAL IMPORTS :ESTABLISHED:Imparts Sept. 21,
Country of Origin: Established : Sept. 21, I9U2 :33— 1 /3^ of :lÿ+2 , to
: TOTAL QUOTA : Jan. 30 5 19k3 :Total Quota: Jan, 30* 191+3*
United Kingdom.... .
Canada,.............
France
British India,,.,..,
Netherlands,..... ..
Swit zerland,........
Belguim. ......... ..
Japan...............
China,
Egypt..............
Cuba............
Germany,••«••«•••••.
Italy,.,............
TOTALS
-
l,UUl ,152
75,807
61,823
-
«
-
22,71+7
lH.796
12,853
mm
8 1 ,k9$
*+.323.*+57
239,690
227 ,1+20
69,627
68 ,2U0
n#%,388
38.559
3>+l,535
17,322
8 .135
6 ,51+U
4m
-
*»
25.1+U3
7 ,OSS
«
76,329
21,263
-
5 ,1+82,509
Ili3,3l8
1 ,599.886
-
mm
m
«
-
mm
-
m
m
-I ;
lj
Included in total imports, column 2.
2/
The President’s proclamation, signed March 3^» 19^2, exempts from import
quota restrictions card strips made from cottons having a staple 1 -3/16
inches or more in length.
-oOo~
1/
FOR IMMEDIATE REIEASE,
February
191+3
The Bureau of Customs announced todgy 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»
v-and December 19t
follows, during the period September 21, 19 *+2 , to
January 30, 191+3, inclusives
COTTON HAVIiJG A STAPLE OF LESS THAN l-ll/l6 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 LINTERS). Annual quotas
commencing September 20 , by Countries of Origin:
Country of
Origin
__ _ .... -„- . ... _
(in Pounds)
1
Staple length less
•
•
than l-l/8w
:
:Imports Sept.
:Established:21, I9I+2 , to
Quota
i Jan* 30,191+3
f•
Egypt and the Angl0Egypt ian Sudan........
Peru..,,..,............
British India.
China, ..................
Mexico.................
Brazil.... ........... .
Union of Soviet
Socialist Republics.,,.
Argent ina,.............,
Haiti...................
Ecuador..........
Honduras...............
Paraguay,
Colombia.
Iraq.
British East Africa....
Netherlands East Indies.
Barbados........ .
Other British West
Indies
•••••«•
Nigeria...........
Other British West
Africa j2/„...........
Other French Africa ¿/,
Algeria and Tunisia.....
i f
2/
3/
Staple length 1-1/8" or more
but less than 1-11/l6*
Established : Imports Sept,
Quota
* 21, 19^2, to
1+5.656,1+20 : Jan, 30, 19li3
783,816
2U?,952
2 .003.US3
1,370,791
8 ,883,259
618,723
U 75 ,12 U
5,203
237
9,333
752
871
12 U
195
2 ,21+0
71,388
—
30,611,350
889,231+
21*7,952
99»
8 ,883,259
mm
«,
618,723
mm
m
237
9,263
9m
mm
mm
^
21,321
5.377
l6 ,00l+
689
4
—
^
M,
1^, 516,882
9 ,759 ,1+31+
1+5 ,656 ,1+20 3 1 ,500,581*
Other than Barbados, Bermuda, Jamaica, Trinidad, and Tobago,
Other than Gold Coast and Nigeria,
Other than Algeria, Tunisia, and Madagascar.
JlffS
TREASURY DEPARTMENT
Washington
FOR BEIEDIATE RELEASE
Wednesday, February 10, 1943*
Press Service
No* 35-34
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,
and December 19, 1940, as follows, during the period September 21, 1942, to
January 30, 1943, 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
(In Pounds)
Staple length less : Staple length l-l/8n or more
but less than 1—11/16”
s
than 1-1/3"
Imports Sept.: Established : Imports Sept*
:
Quota
: 21, 1942, to
:Established: 21, 1942, to :
Quota
:Jan. 30. 1943: 45.656.420 : Jan. 30. 1943
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
l/........ *
Nigeria.
Other British best
Africa
2/........ .
Other French Africa 3/♦
Algeria and Tunisia...••
1/
2/
3/
783,816
'247,952
2,003,483
1,370,791
8,883,259
618,723
-
30 ,6 1 1 ,3 5 0
2 4 7 ,9 5 2
889,234
—
—
—
—
'
8,883,259
618,723
—
—
—
—
—
—
871
124
'195
2^240
71,388
-
237
9,263
—
—
21,321
5,377
~
-
—
—
16,004
689
—
14,516,882
—
—
. 9,759,434
—
4.7 5 ,1 2 4
5,203
■237
9,333
752
—
—
—
—
—
•
—
.45,656,420
Other than Barbados,- Bermuda, Jamaica, Trinidad, and Tobago*
Other than Gold Coast and Nigeria.
Other than Algeria, Tunisia, and Madagascar.
31,500,584
2/
:
A:*
COTTON CARD STRIPS,/-COMBER BASTE, LAP BASTE, SLIVER ViASTE, AND ROVING BASTE,
¡¡■fill
---- h— — IN VALUE, Annual quotas
WHETHER OR NOT MANUFACTURED
OR OTHERWISE ADVANCED
commencing September 20, by Countries of Origins
2/
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/ 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)________
•
_______ _...________1.
:
: TOTAL IMPORTS sESTABLISHED:Imports Sept. 21,
Country of Origin: Established : Sept. 21,
o f
:194-2, to
_______________ : TOTAL QUOTA : Jan. 30. 1913 :Total Quota:Jan. 30. 1943— 1Z
United Kingdom..... .
.
Canada.•
France............ .
British India...... .
Netherlands......
Switzerland....... .
Belgium. ....... . •
China............ .
Egypt..............
Cuba. ....... ..... .
.
Germany.
Italy............ ,
TOTALS
4*323*4-57
239,690
227,420
69,627
63,240
44*338
33,559
341,535
17,322
8,135
6^544
76,329
21,263
81,495
61,823
-
5,432,509
143*318
1,441,152
—
—
75,807
—
—
—
—
22\747
14;796
12,853
—•
—
—
— ,
***
25*443
7,083
•—
m
m
.
—
1,599*336
1/
Included in total imports, column 2.
2/
The President’s proclamation, signed March 31* 194-2, exempts from import
quota restrictions card strips made from cottons naving a staple 1—3/16
inches or more in length.
-oOo-
- 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 Reserve Bank or Branch*
-
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
February 17. 1943,------- •
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
Washington
EOR RELEASE, MORNING- NEWSPAPERS,,
Friday. February 12 f 19A 3____ .
The Secretary of the treasury, hy this public notice, invites tenders
for fr 700,000,000
or thereabouts, of
91-day Treasury bills, to be issued
on a discount basis under competitive bidding.
>m risted February 17, 1943
The bills of this series will
, and will mature _May 19, .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 tbf 1
war
closing hour, two o'clock p. m., E a s t e r n t i m e ,
Monday, F e b g a r y 15» A 3 4 L -..
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
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
trust companies and from responsible and recognized dealers in investment securi- I
ties.
Tenders from others must be accompanied by payment of
Z 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 Federi
)
TREASURY DEPARTMENT'
Washington
P O R RELEASE, M O R N I N G N E W S PAPERS#
Friday, Fe b r u a r y 12, 1943.
2- 1 1 - 4 3
The S e c r e t a r y of the Treasury,
invites
tenders' for $7 0 0 , 0 0 0 , 0 0 0 ,
T r e a s u r y bills,
|
by
this p u b l i c notice,
or thereabouts,
to be i s s u e d on a d i s c o u n t basis u n d e r com-
pe t i t i v e bidding.
The b i l l s o f this series will be dated
Febru a r y 17,
a n d will m a t u r e M a y 19,’. 1943, w h e n the face
1943,
amount will be p a y a b l e w i t h o u t interest.
in b e a r e r form only,
$10,000,
I
}
of 9 1 - d a y
$100,000,
T h e y will be i s sued
and in d e n o m i n a t i o n s of $1,000, $5,000,
$500,000,
and $ 1 , 0 0 0 , 0 0 0
(maturity value).
T e n d e r s will be r e c e i v e d at Federal Reserve Banks and
B r a n c h e s u p to the closing hour, two o ’clock p. m . , E a s t e r n
W a r time, Monday, F e b r u a r y 15, 1943.
T e n d e r s will not be
r e c e i v e d ' a t the T r e a s u r y Depa r t m e n t , ’W a s h i n g t o n * E a c h tender
m ust be for an even m u l t i p l e of $1,000, and the' price of f e r e d
m u s t be e x p r e s s e d on the b a sis of 100, w i t h not m o r e than
three decimals, e. g., 99.925.
Fractions m a y not be used.
It is u r g e d that tenders be m ade on the p r i n t e d forms and f o r
w a r d e d in the special e n v e lopes w h i c h will be supplied b y
Federal Reserve B a nks or B r a n c h e s on a p p l i c a t i o n therefor.
T e n d e r s will be r e c e i v e d w i t h o u t d e p osit f r o m •i n c o r p o
rated b a n k s and ti*ust.companies and f r o m resp o n s i b l e and r e c
o g n i z e d dealers in Inv e s t m e n t securities.
Te n d e r s fro m others
m u s t be a c c o m p a n i e d b y p a y m e n t of 2 p e r c e n t of the face amount
of T r e a s u r y bills a p p l i e d for, u n l e s s the tenders are a c c o m
p a n i e d b y an express g u a r a n t y of p a y m e n t b y an i n c o r p o r a t e d
b a n k or trust company.
I m m e d i a t e l y after the c l o sing hour, tenders will be opened
at the Federal Reserve B a nks and Branches, f o l l o w i n g w h i c h p u b
lic a n n o u n c e m e n t will be m a d e b y the S e c r e t a r y of the T r e a s u r y
of the amount and price range o f a c c e p t e d bids.
Those s u b
m i t t i n g tenders will be a d v i s e d of the a c c e ptance or r e j e c t i o n
thereof.
The S e c r e t a r y of the T r e a s u r y e x p r e s s l y reserves the
right to accept or reject any or all tenders, in whole or in
part, and his a c t i o n in any s u c h respect shall be final.
Pay
m e n t of a c c e p t e d tenders at the prices o f f e r e d m u s t be m a d e or
35-35
(Over)
. .
•** v
”2 -
c o m p l e t e d at the Federal Reserve B a n k in c a s h or o t h e r i m m e
d i a t e l y ava i l a b l e funds o n (F e b r u a r y 17, 1943.
The income d e r i v e d f r o m T r e a s u r y bills, w h e t h e r interest
or g a i n from -the sale or o t h e r d i s p o s i t i o n of the bills, shall
not hav e any exemption, as. such, a nd loss f r o m the sale or
o t h e r d i s p o s i t i o n of T r e a s u r y b i l l s shall not hav e any special
treatment, as such, u n d e r Federal tax Acts n o w or h e r e a f t e r
enacted.
The b i lls shall be subject to estate, inheritance,
gift, or o t h e r excise taxes, w h e t h e r F e d e r a l .or S t a t e , but
shall be exempt fro m all t a x a t i o n n o w or h e r e a f t e r imposed on
the p r i n c i p a l or interest t h e r e o f b y .any State, o r an y of the
p o s s e s s i o n s of the U n i t e d States, or b y any local ^taxing
authority.
For p u r p o s e s of t a x a t i o n the a m ount oi discount
at w h i c h T r e a s u r y bills are o r i g i n a l l y sold b y the U n i t e d
States shall be c o n s i d e r e d to be interest,
U n d e r Sections 42
and 117 (a); (1) o f the I n t e r n a l Revenue Code, as a m e n d e d by
S e b t i o n 115 of the Revenue A c t o f 1941, the a m ount of discount
at w h i c h b i l l s issued' h e r e u n d e r are sold shall n o t be c o n
s i d ered ■to accrue u n t i l such b i lls shall be sold, re d e e m e d or
oth e r w i s e d i s p o s e d of, and s u c h b i lls are e x c l u d e d f r o m con
s i d e r a t i o n as capital assets, .Accordingly, the o w n e r of
T r e a s u r y b i lls (other than life ins u r a n c e companies) issued
h e r e u n d e r n e e d i n c lude in his income tax r e t u r n o n l y the dif
ference b e t w e e n the.'price p a i d for suc h bills, w h e t h e r on
ori g i n a l issue or on sub s e q u e n t p u r c hase, and the amount actu
all y r e c e i v e d e i ther u p o n sale o r r e d e m p t i o n at m a t u r i t y during
the taxable y e a r for w h i c h the r e t u r n is made, as o r d inary gain
or l o s s ,
i
t->
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 No. 418, as amended, and this
n o t i c e , p r e s c r i b e the t e r m s . o f the T r e a s u r y b i lls and govern
the .conditions of their issue#
Copi e s of the c i r c u l a r m a y b©
o b t a i n e d f r o m any Federal Reserve B a n k or Branch*
j
AMD Tlim-ijItlHTHiì
m
fo
H o lx U u r *
194J-4?
ISE 0? ftULL roti M M a m o »
of 3-3/i perenni
trm
tm
r j
Bende of 1943"4?» «uad
O th
ere
Q o z 'im r m & i
1# Public notìo* le hereby g&vm thet eli w tot&nding 3~3/8 perc«nt Trecce?? Bornie of 19*43-47» detedi «lune 15» 1927» ere hereby cclied
Ter redessption o« A m
15» 1943» on whteh dei# ìntersct on cuch bende
«dii cocce»
2«
Full lnfoxwctlon re$ejrcling thè preeentetien end «urreoder ol
thè bende fer redeqptlon under tuie celi « H I foe round In Deperii» ni
Clreulcr Me» 666» dateci «lui? 21» 1961«
3«
off©red
Theee bende « H I fc#
other obllgctlone
of
tw&mmmé
et per» end holdere « H I net be
thè United State« In exehen^e
t&r
thelr
c&ìled bende»
Henry Morgenthau, Jr.,
Secreta*? of thè Treeeury*
tmAsm mpMmmm,
W a s h in g t o n ,
Febraer? 13» 1943«
\
TREASURY DEPARTMENT
Washington
RELEASE, MORNING NEWSPAPERS,
Sunday. February 14. 1941»-----
for
press Service
76«.
'if' U >
Secretary of the Treasury Morgenthau announced today that all out
standing > 3 / 8 percent Treasury Bonds of 1 9 4 > 4 7 are called for redemp
tion on June 15, 1943.
Approximately $454,000,000 of these bonds are
now outstanding*
The Secretary stated that the bonds will be paid off in cash, and
holders will not be offered other obligations of the United States in
exchange for their called bonds.
The text of the formal notice of call is as follows:
TREASURY DEPARTMENT
Washington
FOR RELEASE, MORNING NEWSPAPERS,
Sunday, February lH, 19^3.
Press Service
No. 35—36
Secretary of the Treasury Morgenthau announced today that all out
standing 3 -3/8 percent Treasury Bonds of I9 U3 -H7 are called for redemp
tion on June 15, 19 U3 . Approximately $1+5^,000,000 of these bonds are
now outstanding.
The Secretary stated that the bonds will be paid off in cash, and
holders will not be offered other obligations of the United States in
exchange for their called bonds.
The text of the formal notice of call is as follows;
THREE AND THREE-EIGHTRS PERCENT TREASURY BONDS OP 19HVU7
NOTICE OP CALL FOR REDEMPTION
To Holders of
3 -3/8 percent Treasury Bonds of 19 U3 -H7 , and Others Concerned:
1. Public notice is hereby given that all outstanding 3 -3/8 per
cent Treasury Bonds of I S k ^ k f t dated June 15, 1927, are hereby called
for redemption on June 15, 19^3* on which date interest on such bonds
will cease.
2, Pull information regarding the presentation and surrender of
the bonds for redemption under this call will be found in Department
Circular No. 666 , dated July 21, 19 U1 .
3. These bonds will be redeemed at par, and holders will not be
offered other obligations of the United States in exchange for their
called bonds.
(Signed)
TREASURY DEPARTMENT,
Washington, February
1 3 , 19 U3 .
Henry Morgenthau, Jr.
Secretary of the Treasury.
For-itoleaüë "Suiidciy .^eUrua'Jiy "IAT
The Treasury Department announced yontciTH^ffi- that through the
cooperation of the mombwn:
r’
mrHTTTTTrrffii
Waah-i ngrhnn T D. C.
Clearing House Association, negotiations had been completed whereby
government checks will be cashed by 4M»> Washington banks for individuals
who do not maintain checking or commercial account^)[this new service
become effective
\ February 15, at the fifty—two banking locations
throughout the city
) It will be necessary for the individual to whom the check
I
iS
y
payable to fully identify himself,/and checks will only be cashed for
persons to whom they are payable*
It has boon learned UliAt a number of
institutions are establishing separate windows to handle the increased
volume,
g e
question of facilitating the cashing of payroll checks has been
carefully studied for several weeks by officials of the Treasury and a special j m
committee of the Wniiihlngtoij D * 0».^Tearing ¿ o u s e l s sociain.on.
A short while
ago the Department announced that pay days had been further staggered and
the departments are now disbursing on twenty different days per month*
A number of the departmental executives have co-operated with
the Treasury Department and have agreed to have disbursements made
to employees below grade 5*
approximately 35,000 more of
in cash
This program enabled the department*? to pay
employees in cash*
The change over was
commenced in December and was completed a few days ago*
It is believed by the Treasury Department that as a result of the
cooperation of the banks the above program will materially assist employees
who have heretofore experienced difficulties in cashing their checks.
TREASURY DEPARTMENT
?iashington
Press Service
No.
FC®. RELEASE MORNING NEWSPAPERS,
SUNDAY. FEBRUARY H , 1 9 4 3 * __
3
The Treasury announced today that beginning tomorrow all
local banks will cash Government checks for individuals who do not maintain
checking or commercial accounts.
The new service, which will be rendered at fifty^two
Treasury officials and the Washington Clearing House Association.
It will be necessary for the individual to whom the check
is payable to
identify himself fully, officials said, and checks will
be cashed only for persons to whom they are payable.
A number of
institutions are establishing separate windows to handle $he increased
volume.expe ct ed •
The facility of cashing Government payroll checks has been
^Treasury /
studied carefully for several weeks by/oinciais and a special committee
of the clearing house association with the view of ironing out problems
rendered more acute by the staggered payroll plan which now has departments
disbursing on twenty different days each month.
Officials said a number of Government departments have
cooperated with the Treasury and have agreed to make disbursements in cash
to employees earning less than $2,000 annually.
This program, which was
begun in December and completed a few days ago, enables the departments to
pay approximately 35^000 of their employees in cash/
Treasury officials believe the new program will assist
materially employees who have heretofore experienced difficulties in cashing
their checks.
oOo
S ’I
TREASURY DEPARTMENT
Washington
FOR RELEASE, M O R N I N G N E W S P A P E R S
Sunday, F e b r
''
" 045.______
2-12-43
The T r e a s u r y a n n o u n c e d
local banks will
Press Service
No. 35-57
today that b e g i n n i n g
tomorrow all
cash G o v e r n m e n t checks for individuals who
do not m a i n t a i n checking or commercial
accounts.
The n e w serArice, w h i c h w i l l be re n d e r e d at fifty-two b a n k
ing l o c ations throughout the city, is the result of n e g o t i a
tions b e t w e e n T r e a s u r y o f f i c i a l s a n d the W a s h i n g t o n Cle a r i n g
House Association,
It will be n e c e s s a r y for the individual to w h o m the check
is p a y a b l e to i d e ntify h i m s e l f fully, officials said, and
checks will be cashed o n l y for persons to w h o m they are payable.
A n u m b e r of i nstitutions are e s t a b l i s h i n g separate w i n dows to
h a ndle the i n c r e a s e d volume expected.
#The fa c i l i t y of cashing G o v e r n m e n t payroll checks has b e e n
studied c a r e fully for several weeks b y T r e a s u r y officials and a
special committee of the c l e aring h o u s e a s s o c i a t i o n w i t h the
view of ironing out p r o blems ren d e r e d m o r e acute b y the s t a g
gered payroll p l a n w h i c h n o w has d e p a r t m e n t s d i s b u r s i n g on
twenty d i f f e r e n t days e ach month.
O f f i cials said a n u m b e r of G o v e r n m e n t d e p a r t m e n t s have
cooperated w i t h the T r e a s u r y and hav e agreed to m a k e d i s b u r s e
m e n t s in cash to employees earning less than $>2,000 annually.
This program, w h i c h was b e g u n in D e c e m b e r and c o m p l e t e d a few
days ago, enables the d e p a r t m e n t s to pa y a p p r o x i m a t e l y 62,000
of their employees in cash.
T r e a s u r y of f i c i a l s b e l i e v e the n e w p r o g r a m will assist
m a t e r i a l l y employees w ho hav e h e r e t o f o r e e x p e r i e n c e d d i f f i
culties in cashing their checks.
(The f o l l o w i n g in o o m e t a x d i s c u s s i o n b y S E C R E T A R Y
M O R G E N T H A U , C H A I R M A N D O U G H T O N of t h e W a y s a n d
M e a n s C o m m i t t e e of t h e H o u s e o f R e p r e s e n t a t i v e s
a n d C H A I R M A N G E O R G E of t h e S e n a t e F i n a n c e C o m
m i t t e e is s c h e d u l e d to be b r o a d c a s t i ^ S I o v e r t h e
C o l u m b i a B r o a d c a s t i n g S y s t e m n e t w o r k a t 6 : 1 5 P«m*
I E a s t e r n W a r T i m e , M o n d a y , F e b r u a r y 15« 1 9 4 3 # a n d
I is f or r e l e a s e at t h a t t i m e , )
T R E A S U R Y DEPARTMENT
FISCAL SERVICE
BUREAU O F ACCO U N TS
WASHINGTON
O F F IC E O F TH E CO M M ISSIO N ER
February 6,
1 9 ^3 *
Baring the month of January, the following
market transactions took place in direct and guaran
teed securities of the Government:
S a l e s .........................$1^,500,000
Purchases .......................
Het sales ...........
FQBJ/ICTORY
BUY
U NITED
STATES
WAR
BO N D S
AND
STAMPS
-_
$1 ^, 500,000
MR. SCHWARZ
February
Ü in. || w. sill;
Darla« tho »®»th of
Jm m u e y ,
the fellonia«
market transactions took plaoo la ilroot «ad «uarsa*
teed securities of the ©oreraaeat*
Sal«« « « » » * * » * * * » •
Purchase* » . « • • • • • • «
Dot sole« » * « t . »
ll^i^O^OOO
.-,
.f*.,.r....—
$lk§<
500,Q00
fi
gm
Copy to: G r *
S c h w a b
Mr. Heffelfinger
Miss Sanford
File
19^3*
TREASURY DEPARTMENT
Washington
P r ess Service J *>
N<^. ?5fg.
FOR I M M E D I A T E RELEASE,
Jgawwgy.15, 1945.
market
D u r i n g the m o n t h o f
trans a c t i o n s
twpfoufiiafrce in dire c t a nd g u a r a n t e e d s e c u r i t i e s o f the
G o v e r n m e n t for T r e a s u r y i n v e s t m e n t a n d o t h e r a c c o u n t s
syjtft
f / \^ A
W ,
«^Secretary Morgen1±nra“- ^ n n d u n c ^ today.
-oOo-
'3
TREASURE DEPARTMENT
Viashing ton
EOR I M I ^ D X A T ^ RELEASE,
M o nday.#- Febru a r y 15, 1 9 4 3,
During
tions
Press Service
No. 35-38
the m o n t h of January*
1943,
market
in d i rect and g u a r a n t e e d securities
of the G o v e r n
m e n t for T r e a s u r y inve s t m e n t and o t her accounts
in net
sales of (>14,500,060,
announced
today.
-oOo
transac
re s u l t e d
Secretary Morgenthhu
unusual for them to work 12 or 14 or even 16 hours a ¿ay
ana from now u n til March 1 5 th , the load they w ill carry
becomes heavier and heavier*
F ile your re tu rn , th e re fo re , as soon as you can.
I t w ill be a se rv ice both to y o u rself and to your
country*.
the C o lle c to r’ s O ffice i f you have any questions to ask .
And the longer you wait in l i n e , the longer the man
behind you w ill have to w ait.
He may very well be a
war worker who is losin g valuable time from h is job
because you delayed so long.
In individual oases th is
may not seem serious , but in the aggregate i t can add
up to l i t e r a l l y m illion s of man-hours of working time
thrown away.
This is an extravagance we can i l l afford
in these days of t o t a l war.
F in a lly , the prompt f i l i n g of your retu rn —
tomorrow, i f possible — w ill he an immeasurable help
to the men and women in the C o lle c to rs ’ O ffices throughout
the country*
The period ju st before March 15th is a
time of tremendous s tr a in fo r a l l of u s, and e sp e cia lly
for them.
During the f ilin g period i t is not a t a l l
SECRETARY MORGENTHAU:
I want to express my thanks to Senator George and
to Congressman Doughton fo r th e ir remarks th is evening.
The country is indeed fortun ate to have a t th is time
two so able and distinguished public serv an ts.
A ll w ill
ag ree, I am su re, th at there should be no fu rth er doubt
or h e sita tio n about the o b lig atio n of every American to
f i l e a retu rn on his 1942 income before March 15th and
to pay a t le a s t one-quarter of his ta x a t or before th a t
tim e.
But I hope you wonH w ait u n til March 15th to f i l e
your re tu rn .
Delay can gain you nothing; on the co n trary ,
i t can cause you inconvenience, and cause your Government
a lo t of unnecessary tro u b le .
The longer you w ait before
you f i l e , the longer you w ill have to w ait in lin e a t
I
increasing from day to day, the Government needs more
not l e s s , revenues.
Even ca n ce lla tio n in whole or in
. p art of 1942 l i a b i l i t i e s w ill only make i t so much more
necessary to increase taxes on 1943 incomes
Our country today is fig h tin g fo r i t s l i f e .
Our
fellow c itia e n s In the Armed S ervices are giving a l l
they have to make th is a b e tte r world fo r you and me.
To Americans in coming weeks the payment of ta x e s w ill
not be a burden or a re s p o n s ib ility .
I t w ill be, as
the President has so well said , a p riv ile g e .
/
\
/
3
fa rth e r from the tru th .
Pay-as-you-earn w ill make the
payment of taxes more convenient, to be su re.
But i t is
p re cise ly because taxes are high and, what i s more,
going higher, th at the need for a more convenient method
of payment is today so g r e a t.
I t i s day-dreaming to
believe th at a change-over in our method of ta x c o l le c
tio n s means paying le s s ta x e s .
The change-over w ill
undoubtedly be followed by s t i l l higher ta x e s .
I t is
of the utmost importance, th e re fo re , th a t you make as
large a payment as you possibly can on 1942 l i a b i l i t i e s .
Every d o lla r oredited to your account on March 15th means
so much le s s to pay l a t e r on when the burden w ill
undoubtedly be g r e a te r.
This i s c e rta in ly no time fo r illu s io n s - - esp e cially
for illu sio n s on the su b ject of t a x e s .
With war expenditures
- 2 -
and the Senate Finance Committee have already gone on
record to th at e ffe ct#
I t may be th a t Congress l a t e r on may read ju st 1942
ta x l i a b i l i t i e s .
But by paying your taxes on or before
March 15th you have nothing to fe a r.
lour payment w ill
be cred ited to your account, reducing by so much the
taxes you w ill l a t e r have to pay.
con sid eration to keep in mind.
This Is an important
The more you pay up
now, the le s s you w ill have to pay in the fu tu re.
You
have everything to gain ^y paying; and you have every
thing to lose by not paying.
U nfortunately, there are some people who do not
re a liz e t h i s .
They have gotten the fa ls e and erroneous
idea that pay-as-you-earn w ill reduce — some way, somehow —
the amount of taxes they have to pay.
Nothing could be
I want to endorse completely the remarks th at have
ju st been made by Congressman Doughton and S ecretary
Morgentbau.
The Senate Finance Committee and the House
Ways and Means Committee re c e n tly adopted unanimously
id e n tic a l resolu tion s informing the American people that
no pending tax~plan w ill re lie v e them of the n e ce ssity
of f ilin g an income ta x retu rn and paying th e ir f i r s t
q u arterly instalment on March 15th*
There should be
no fu rth e r grounds fo r doubt or h e sita tio n *
do not pretend to know what Congress w ill do
about a l l
and I emphasize the word a l l — of our
1942 ta x l i a b i l i t i e s .
I do know t h i s , however.
Congress
has not ca n ce lle d , and w ill not ca n ce l, the f i r s t instalment
on those l i a b i l i t i e s due March 1 5 th .
on or before th at d a te .
They must be paid
The House Ways and Means Committee
SECRETARY MORGENTRADS
A fter a distinguished ca re e r as a judge in his
native S ta te , Senator George f o r years has been giving
unsparingly of h is g reat ta le n ts and a b i l i t i e s to the
nation as a whole.
I have the honor to present vsy good
frie n d . Senator W alter F . George, Chairman of the Finance
Committee of the S enate.
"#r-
SENATOR GEORGE:
not dealing w ith an inmediata problem alone*
We are
dealing with a system of c o lle c tio n s for permanent use*
Meanwhile, l e t there be no misunderstanding or
confusion*
the f i r s t q u arterly income ta x payment on
1942 Income is due on or before March 15th*
must be file d on or before th at date*
Tax retu rn s
3
mm
taxpayers on a pay-as-you-earn b a s is .
I t is g e ttin g
the advice and counsel of the Treasury.
testimony from w itn esses.
I t is gathering
I t is conducting i t s own
independent in v e stig a tio n s.
As Chairman of the Ways
and Means Committee, I can assure you the b est plan
fo r making the bulk of taxpayers current w ill be
introduced a t the e a r l i e s t possible tim e.
Taxpayers — and today th a t means p r a c tic a lly a l l
Americans — w ill r e a lis e th a t the change-over from
the present system of co lle c tio n s to p ay-as-you-eam
is no simple ta sk .
I t rep resen ts a b asic change in our
machinery of c o lle c tio n .
We must secure the best
system for y e a r-in y ear-o u t u se.
For when pay-as-you-eam
is once introduced i t w ill be the p a tte rn of c o lle c tio n s
for many y ears to come, i f not f o r a l l tim e.
We are
2
e ffe c tiv e prosecution of the war*
And no American wants
to l e t that happenl
Let m make th is f a c t cle a r*
There has been no
ca n ce lla tio n of taxes on 1942 income*
There has been
no postponement of ta x e s on 1942 income• There has been
no change in the time or place of payment*
The f i r s t
q u arterly instalment of the income t a x is due on or
before March 15th«
We a l l know what has given r is e to the confusion
and misunderstanding*
There has been g re a t in te re s t
in the country in making the income ta x r e f l e c t more
a ccu ra te ly the needs of the tim e.
Vfhe Ways and Means Committee of the House of
R epresentatives is giving the most serio u s a tte n tio n
a t the present time to various proposals fo r putting
A nation a t war cannot discharge i t s proper functions
when a larg e number of i t s people labor under confusion
and misunderstanding about v i t a l issues*
Such mis
understandings play unw ittingly in to the hands of the
enemy*
Doubt and u n certain ty in our ranks are Ju st what
the enemy is hoping for*
There has been misunderstanding on the p a rt of large
numbers of Americans in regard to income ta x payments
due on March 18th .
Many people have g o tten the idea
th at they w ill not have to make t h e i r f i r s t q u arterly
instalment payment on or before th a t d ate.
This con
fusion is very embarrassing to the Government.
are the lifeb lo o d of a nation a t war.
Taxes
Tbe fa ilu re to
pay ta x e s when due would in te rfe re se rio u sly with the
Doughton and Senator George to Join me In talk in g to
you th is evening.
And nee? I take g reat pleasure in introducing to you
my old frien d , Congressman Robert X»* Doughton, Chairman
t
of the Ways and Mean* Committee of the House of
R ep resen tatives. the Committee in which a l l ta x le g is la tio n
o rig in ates,
i
A
I m illion income ta x re tu rn s ; th is year th ere w ill be
an estim ated 85 m illion re tu rn s,
th is gives you some
idea of the magnitude of the problem on which we are
working.
How th a t the income ta x is re a lly a people’ s t a x ,
there i s obvious need to re-examine i t .
E sp e cia lly ,
there is need to make the ta x payable on cu rren t earnings,
not past earnings*
The Treasury was one of the e a r l i e s t
advocates of pay-as-you-earn*
For the past eighteen
months the Treasury has advocated putting the income ta x
on a pay-as-you-earn b a s is .
But in the d iscu ssio n of
how to put taxpayers on a cu rrent b a s is , a misunderstanding
has a rise n over the question of the ta x payment due on
March 15th ,
To help c le a r th is up, I have asked Congressman
SECRETARY MORGENTHAUs
I welcome th is opportunity to speak to so many of
my fellow Americans on the v i t a l problem of income ta x
c o lle c tio n s in wartime.
I welcome too the opportunity
of sharing th is program w ith ay good frie n d s, W alter F.
George, the distinguished Chairman of the Senate Finance
Committee, and Robert L. Doughton, the distinguished
Chairman of the House Ways and Means Committee.
As
Chairmen of the Congressional Committees delegated with
the task of drawing up revenue measures, these gentlemen
have worked without s tin tin g th e ir time or th e ir thought
or th e ir knowledge to give to the country the kind of ta x
program which w ill b est f i t a g re a t n a tio n 's wartime needs.
Our Inoome ta x today is no longer a ta x on the few;
-•
i t i s a ta x on the many.
j g g
¿1
In 1940 there were le s s than
TREASURY DEPARTMENT
Washington.
(The following income tax d i s c u s s i o n by S E C R E T A R Y
M O R G E N T H A U , C H A I R M A N D O U G H T O N of the W a y s and
M e a n s Committee of the H o u s e of R e p r e s e n t a t i v e s
a n d CHAIRIvIAN G E O R G E of the Senate F i n a n c e Com
m i t t e e is s c h e d u l e d to be b r o a d c a s t o v e r the
C o l u m b i a b r o a d c a s t i n g S y s t e m network at 6?15 p . m * P
E a s t e r n W a r Time. Monday. February 15. 1945. and
is for release at that t i m e . )
SECRETARY M O R G E N T H A U J
I
welcome
this o p p o r t u n i t y
Americans
on the vital
wartime*
I welcome
to speak to so m a n y of my fellow
p r o b l e m of income tax coll e c t i o n s in
too
the o p p o r t u n i t y of sh a r i n g this p r o g r a m
w i t h my g o o d friends,
W a l t e r F. George,
of the S e n a t e Finance
Committee,
the d i s t i n g u i s h e d
a n d Robert L*
Doughton,
d i s t i n g u i s h e d Chairman of the H o u s e Ways and M e a n s
Chairmen of
the
Committee*
these g e n t l e m e n h a v e w o r k e d
st i n t i n g their time or their thought or their k n o w l e d g e
to give to the country
the k i n d of t a x p r o g r a m w h i c h will b e s t
fit a great nation*s w a r t i m e needs*
Our Inco m e tax today is no l o n g e r a tax on the few; it is
a tax on the many.
In 1 940 there wer e about 4 m i l l i o n taxable
individual income tax returns; this year there w ill be an
e s t i mated 35 million t a x able returns.
This g i v e s you some idea
of the m a g n i t u d e of the p r o b l e m on w h i c h we are working*
35-39
As
the Congr e s s i o n a l C o m m i t t e e s e n t r u s t e d with the task
of d r a w i n g up revenue measures,
w i thout
Chairman
2
\
¡1
Now that the inco m e tax is r e a l l y a p e o p l e ’s tax, there
is o b v ious need to r e - e x a m i n e it.
Especially, there is nee d
to make the tax p a y a b l e on current earnings, not past earnings,
The T r e a s u r y was one of the earliest advocates of pay-as-you-earn.
For the p a s t eighteen m p n t h s the T r e a s u r y h a s adv o c a t e d p u t t i n g
the income tax on a p a y - a s - y o u - e a r n basis.
B ut in the discussion;
of h o w to put taxpayers on a cu r r e n t basis, a m i s u n d e r s t a n d i n g
ha s a r i s e n o v e r the q u e s t i o n of the tax p a y m e n t due on M a r c h 15th.
To h e l p clear this up, X h a v e a s k e d C o n g r e s s m a n D o u g h t o n
and S e n a t o r George to Join me in ta l k i n g to y ou this evening.
A n d n o w I take g r e a t pleasure i n I n t r o d u c i n g to you my old
friend, C o n g r e s s m a n R o b e r t L. Doughton, C h a irman of the W a y s
a nd M e a n s Committee of the H o use of Representatives, the Committee
in w h i c h all tax l e g i s l a t i o n originates.
C O N G R E S S M A N DOUGHTON:
I
i
A n a t i o n at w a r c a nnot d i s c h a r g e its p r o p e r functions w h e n
a large n u m b e r of its people l a b o r u n d e r c o n f u s i o n and m i s u n d e r
standing a b o u t vital issues.
S u c h m i s u n d e r s t a n d i n g s play
u n w i t t i n g l y into the h a n d s of the enemy. Doubt a n d u n c e r t a i n t y
in our ranks are Just w h a t the e n emy is h o p i n g for.
There h a s b e e n m i s u n d e r s t a n d i n g on t h e p a r t of large numbers
of A m e r i c a n s in r e gard to income tax payments due on M a r c h 15th.
Many p e o p l e h a v e g o t t e n the idea that they wil l not h a v e to make
their f i rst quarterly inst a l m e n t p a y m e n t on or b e f o r e that d a t e . ■
This c o n f u s i o n is ver y e m b a r r a s s i n g to the Government.
Taxes
are the l i f e b l o o d of a n a t i o n at war.
The f a i l u r e to pay taxes
when due w o u l d i n t e r f e r e seriously w i t h the effective p r o s e c u t i o n
of the war.
A n d no A m e r i c a n wants to let that h a p p e n !
Le t me make
of taxes on 1942
on 1D4 2 income.
of payment.
The
due on or b e f o r e
this fact clear.
There has b e e n no c a n c e l l a t i o n
income.
There h a s bee n no p o s t p o n e m e n t of taxes
There h a s b e e n no change in the time or place
first quarterly i n s t a l m e n t of the income t ax is
M a r c h 15th.
We all k n o w what h a s given r ise to the c o n f u s i o n and
misu n d e r s t a n d i n g .
There h as b e e n great Inter e s t in the c o u ntry ;
in m a k i n g the income tax reflect m o r e a c c u r a t e l y the needs of
the t i m e .
The W a y s and M e a n s Committee of the H o u s e o
f Representatives
is g i v i n g the most s e r ious a t t e n t i o n at the pres ent time to
various p r o p o s a l s for putting t a x p a y e r s on a pay ~ a s - y o u - e a r n
oasis.
It is getting the advice a n d counsel of the Treasury,
It is g a t h e r i n g t e s t i m o n y from witnesses.
It is c o n d u c t i n g its
own i n d e p e n d e n t investigations.
A s Chairman of the Ways and
Means Committee, I can assure you the best p lan for m a k i n g the
bulk of t a x payers c u r rent will be introduced at the earliest
possible time.
will refill7 fi thflt
y thiat a ®an s p r a c t i c a l l y all A m e r i c a n s
c o l L i t f n i o tih 1 th
c h a n g e - o v e r f r o m the p r e s e n t system of
c o l l e c t i o n s to p a y - a s - y o u - e a r n is no simple task.
It r e p r e s e n t s
theabefit°iiife * £ °U r m a °kl n ery
collection.
We must secure
tne b e s t system for y e a r - i n y e a r - o u t use.
For when pay-as-vouf n i m ^ n o n ° e I n t r o d u c e d it will be the p a t tern of coll e c t i o n s
for m a n y y e a r s to come, if not f or all time.
We are not de a l i n g
if
c oolllle e
s ^ / p e r mlaen
me nai
neoi c
c tcitoin o
s n for
t ° use.
W e are b a l i n g
with a system
Thn / ! i £ W h ,U < 3 i 1 ? t !:here l=e no m i s u n d e r s t a n d i n g or confusion,
ir b i f O i i I f c / i ei’si>,i n 0 S m0 ta? p a y m e n t °n 1942 income is due on
that date ^
h 1 5 t h ‘ T a X returnR m u e t be filed on or b e f o r e
SECRETARY M O R S E N T K A U :
S t a t e ^ ? « / ^ 1^
°a r e e r as a Jud Se 1« h i s native
state, S e n a t o r George f or years h a s b e e n g i v i n g u n s p a r i n g l y of
his g r e a t t a l ents a nd a b i l ities to the nation f s a
have
the h o n o r to pr e s e n t my goo d friend, S e n a t o r W a l t e r F.
George,
Chairman of the F i n ance Committee of the Senate.
SENATOR GEORGE:
hpon
m
tn en dorse c o m p l e t e l y the remarks that have lust
b y C o n g r e s s m a n Dou g h t o n a n d S e c r e t a r y M o r g e n t h a u
The
l l a
diiLdC“
/ e a?d
/ UE e Ways a « d M e a n / c o m m i t J e
r / / Tly a d ° P ^ ed u n a n i m o u s l y i d e n t i c a l r e s o l u t i o n s informino' th«
SSiV-ssrsaaasr«
Ä
4
I
do n ot pretend to k n o w what Congress wil l do about all
and X e m p h a s i z e the w o r d all —
of our 1942 tax liabilities.
I do k n o w this, however.
Congress h a s not cancelled, a n d will
not cancel, the first instalment on those l i a b i l i t i e s due
M a r c h 15th. . They mus t b e paid on or before that date.
The
House W a y s a n d M e ans C o m m ittee and the Senate Finance C o m m ittee
have a l r e a d y gone on r e c o r d to that effect.
It m ay be that C o n g r e s s l a t e r on may r e a d j u s t 1942 tax
liabilities.
But by p a y i n g y o u r taxes on or b e f o r e M a r c h 1 5 t h
you h a v e n o t h i n g to fear.
Y o u r p a y m e n t will be credited to
your account, r e d ucing b y so m u c h the taxes yo u will l a t e r hav e
to pay,
This is an i m p o r t a n t c o n s i d e r a t i o n to k e e p in mind.
The
©ore you pay up now, the less you wil l have to p a y in the future.
You h ave ever y t h i n g to g a i n b y paying; and yo u h a v e e v e r y t h i n g
to lose by not paying.
Unfortunately, there are some people who do not realize
this.
They hav e g o t t e n the false a n d erroneous idea that payas-y o u - e a r n will reduce —
some way, somehow —
the amount of
taxes they h a v e to p a y . Nothing c o u l d be f a r t h e r from the truth.
P a y - a s ~ y o u - e a r n will mak e the p a y m e n t of taxes m ore convenient,
u *!e s u r e *
Xt is p r e c isely b e c a u s e taxes are high and,
W iv
more, going higher, that the need for a mor e con v e n i e n t
method of p a y m e n t is today so great.
It is d a y - d r e a m i n g to
believe that a c h a n g e - o v e r in opr m e t h o d of t ax c ollections
means p a y i n g less taxes.
The c h a n g e - o v e r will u n d o u b t e d l y be
foilowed by still h i g h e r taxes.
It is of the u t m o s t importance,
therefore, that you m a k e as large a payment as you possibly can
on 1 ^ 4 cj liabilities.
E v ery d o llar credited to y o u r account* on
March 1 5 t h means so m u c h less to pay later on xvhen the b u r d e n
will u n d o u b t e d l y be greater,
■p^Xs is certainly no time for illusions — — especially for
illusions on the subject of taxes,
W i t h w ar e x p e nditures
i n c r e a s i n g from day to day, the Government? needs more, not less
revenues.
Even c a n c e l l a t i o n in w h o l e or in part of 1942
l i a b i l i t i e s will only m a k e it so m u c h more n e c e s s a r y to increase
taxes on 1 9 4 3 incomes,
O ur c o u ntry today is fighting for its life.
Our f e llow
citizens in the A r med Services are giving all they have to make
this a eet-ter world for you and me.
To A m e r i c a n s in coming weeks
p a y m e n t of taxes w i l l not bo a b u r d e n or a r e s ponsibility.
It will be, as the P r e s i d e n t h a s so well said, a privilege.
—
~ 5 -
SECRETARY MORGENTHAU:
I w a n t to express m y thanks to Senator G e o r g e and. to
C o n g r e s s m a n D o u g h t o n for, their r e m a r k s this evening#
The
country is indeed f o r t u n a t e to h a v e at this time two so able
p u b l i c servants.
All. will agree. I am sure,
that there should be no further d o u b t or h e s i t a t i o n a b out the
obligation, of every A m e r i c a n to file a return on h i s 1942
^ n come b e f o r e M a rch 1 5 t h and to pa„y «at least o n e - q u a r t e r of
his tax at or before that time.
Bu t I hope you w o n ' t wait u n t i l M a r c h 1 5th to file y o u r
return#
D e l a y can g a i n you nothing; on the contrary, it can
cause you inconvenience, and cause y o u r G o v e r n m e n t a lot of
u n n e c e s s a r y trouble#
The longer y ou wait b e f o r e you file, the
l o nger you will have to wait in line at the C o l l e c t o r ' s O f f i c e
il you h a v e any q u e s t i o n s to ask.
A n d the l o n g e r you wait in
line, the l o n g e r the m a n b e h i n d you will have to wait.
He may
very w e n be a war w o r k e r who is l o s i n g va l u a b l e time fro m h is
job b e c a u s e you d e l a y e d so long.
In i n d i vidual cases this may
not seem serious, but in the a g g r e g a t e it can a dd up to literally
millions of man-hours of working tlmd thrown away.
This is an
extr a v a g a n c e we can ill e„fford in these days of total w a r ,
Finally, the p r o m p t filing of y o u r return ~~ tomorrow
if
possible — will be an imme a s u r a b l e h e l p to the m e n and w o m e n in
k o f i ! 11
11e 0 t f , 8c R f l 0 e 8 . thr0Ugh0Ut ths c°untry.
The p e r i o d just
b e f o r e M a r c h 15th is a time of trem e n d o u s strain for all of us
a nd e s p e c i a l l y for them#
D u ring the filing p e r i o d it is not at
a j u n u s u a l for them to work 12 or 14 or even 16 hours a dav
and from h o w until M a r c h 15th, the l o a d they wil l carry b e c o m e s
h e a v i e r a n d heavier.
File y o u r return, therefore, as soon as you can.
be a service b o t h to y o u r s e l f and to your country.
oOo
It w ill
' w & ^7
TREASURY D E P A R T I T
Washington
Press Service
FOR RELEASE, MORNING NEWSPAPERS
Tuesday, February 16, 1943»
3S-^o
The Secretary of the Treasury announced last evening that the tenders for $700,000,0$
or thereabouts, of 91-day Treasury bills to be dated February 17 and to mature May 19, Xty|
which were offered on February 12, 1943» were opened at the Federal Reserve Banks on
February 15.
'Hie details of this Issue are as follows:
Total applied for - $1,114,274,0(X)
Total accepted
703,107,000
I ¿eta:
Range of accepted bids:
ut
High
low
Average price
- 99.935 Equivalent rate of discount approx. 0.257^ per 1
t*
ft
It
ft
»
0.376Jf "
- 99.905
«
m
It
ft
ft
- 99.906
0.3733f "
ttalap]
liai acc
teeof
(50 percent of the amount bid for at the low price was accepted.)
Federal Reserve
District
Total
Applied For
Total
Accepted
Boston
New Tork
Philadelphia
Cleveland
Richmond
Atlanta
Chicago
St, Louis
Minneapolis
Kansas City
Dallas
San Francisco
»
30,635,000
768,759,000
20,745,000
25,995,000
22,505,000
16,080,000
72 ,599,000
29,361,000
8,936,000
21,734,000
14,410,000
81,715.000
» 23 ,743,000
412,857,000
14,915,000
22,178,000
17,858,000
14,280,000
57,577,000
24,149,000
8,856,000
21,469,000
14,310,000
70 ,915,000
»1 ,1 1 4 ,274,000
»703 ,107,000
sent of
TOTAL
leservi
City
cisco
TREASURY DEPARTMENT
Washington
|
FOR RELEASE, M O R N I N G NEWSPAPERS,
Tuesday, F e b r u a r y 16, 1943.
ii
2/15/43
Press S e r vice
No* 35-40
T h e S e c r e t a r y of the T r e a s u r y a n n o u n c e d last evening that the
tenders f or #700,000,000,
or thereabouts,
of 9 1 - d a y T r e a s u r y bills
I
to be dated F e b r u a r y 17 a n d to n a t u r e M a y 19,
I
fered on F e b r u a r y
12,
Banks on F e b r u a r y
15,
The details
1943,
of this
1943,
w h i c h were of-
w e r e o p e n e d at the F e d eral R e s e r v e
issue a r e as follows:
T o t a l a p p l i e d for - $ 1 , 1 1 4 , 2 7 4 , 0 0 0
Total accepted
~
703,107,000
?
Range
of a c c e p t e d bids:
High
- 99*935 E q u i v a l e n t rate
of d i s count approx.
0.257$
Low
- 99-9°5
"
"
"
«
0.376™per
»
»
»
»t
n
"
Average
P r i c e - 99.906
7
§
(50
percent
per
annum
^
0. 373$ p er
annum
of t h e amount bid fo r at t he l o w p r i c e was accepted.)
Federal R e s e r v e
District
Total
Applied For
Boston
New Y o r k
P h i l a delphia
C l e v eland
R i c hmond
Atlanta
Chicago
St. Louis
Minneapolis
Kansas C i t y
Dallas
San F r a n c i s c o
#
TOTAL
30,635,000
768,759,000
20. 745.000
25.995.000
22.505.000
16.880.000
72.599.000
29.361.000
8,936,000
21.734.000
14.410.000
81.715.000
#1,114,274,000
- 0O 0-
T o tal
Accepted
#
23 ,743,000
412,857,000
14.915.000
2 2 . 1 78.000
17.858.000
1 4 . 2 80.000
57.577.000
24.149.000
8,856,000
21.469.000
14.310.000
7 0 . 9 15.000
#703,107,000
m
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,
-
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
February 24 , 1943------•
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 exei*npt from all
taxation now or hereafter imposed on the prinbipal 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
Washington
EOR RELEASE, MORNING NEWSPAPERS,
Wednesday« February 17. 1943— •
¿¿bit
The Secretary of the treasury, hy this public notice, invites tenders
fnr *700,000,000
, or thereabouts, of
91 -day Treasury hills, to he issued
on a discount basis under competitive bidding.
be dated
The Dills of this series wi 1
February 24, 1943
and will mature
¿2&£x
when the face amount will be payable without interest.
is dene
May 26. 1943
They will be issued m
bearer form only, and in denominations of ^1,000, $5,000, $10,000, $100,000,
fender
liliesup
Irida
$500,000, and $1,000,000 (maturity value).
mders will be received at Federal Reserve Banks and Branches up to JjM
closing hour, two o'clock p, m., Eastern ^ B C & a e S K time, Friday, Fet o p y 19, 194?...,,
Tenders will not he received at the Treasury Department, Washington,
Each tender
dopes w
l i s on'
must be for an even multiple of $1,000, and the price offered must be expressed
on the basis of 100, with not mors 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.
Tan&ers 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 Federafhl
3
r - f f
TREASURY D E P A RTMENT
Y/ashington
FOR RELEASE, 'MORNING NEWSPAPERS,
F e b r u a r y 17, 1943« _
Y/ednesday,
_____
The .Secretary of the Treasury, by this public notice, in
vites tenders for $700,000,000, or thereabouts, of 91-day Treasury
bills, to be issue! on a discount basis under competitive bid
ding. /The bills of this series will be dated February 24, 1943,
and viill mature May 26, 1943, when the face amount will be pay
able 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, Friday, February 19, 1943* Tenders will not;be received
at the Treasury Department, Y/ashington. Each tender must' be for
an even multiple, of $1,000, and the price offered must be ex
pressed on the basis of 100, with not mpre than three decimals,
e. g., 99*925. Fractions may not be used. It is urged that ten
ders 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.
r
*
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
company.
I m m e d i a t e l y a f t e r the c l o sing hour, tenders will be opened
at the Federal R e s e r v e Banks an d Branches, following w h i c h p u b
lic a n n o u n c e m e n t w ill be m a d e by the S e c r e t a r y of the T r e a s u r y
of the a m ount and p r ice r a nge of a c c e p t e d bids.
Those s u b
mitting tenders w i l l be a d v i s e d of the a c c e p t a n c e or r e j e ction
thereof.
The S e c r e t a r y of the T r e a s u r y expressly reserves the
right to accept or reject a n y or all tenders, in w h o l e or in
part, and his acti o n in a n y s uch r e s pect shall be final. . P a y
ment of a c c e p t e d tenders at the prices offered must be m a d e or
c o m p l e t e d at the Fe d e r a l R e s e r v e B a n k in cash or other i m m e d i
ately a v a i l a b l e funds on F e b r u a r y 24, 1943»
35-41
(O v e r )
2
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 laxes, whether federal or .State, but. shall b.e exempt from '
all taxation now or hereafter imposed on the principal or interest 1
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 l
sold by the:United States shall be considered" to be interest. Under
Sections 42 and 117 (a) (1) of the Internal Revenue. Code, as amende!
by Sectiop 115.of the Revenue Act o f 1941, the amount of discount 1
at which bills issued hereunder are sold shall, n o t b e 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 companies) issued hereunder need include in
his income tax return only the différence .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, tha, return '.!
is made, as ordinary gain *or lo s s .
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-
j
TREASURY DEP A R I M I
Washington
FOR IMMEDIATE RELEASE,
«Tuesday. February IE6^ 1943.
Press Service
No* 35-^ A— *
The Bureau of Customs announced today preliminary figures showing the
quantities of coffee authorized for entry for consumption under the quotas
for the twelve months commencing October 1, 1942, provided for in the InterAmerican 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
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)
Quota Quantity
(Pounds) i./
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-
:
Authorized for entry
i_____________for consumption
: As of (Date) : (Pounds)
Feb. 6, 1943
n
179,823,406
173,391,797
6,921,911
6,065,114
10,533,699
10# 582,8'61
22,537,528
20,606,318
24,441,354
1,162,067
15,284,310
364,770
155
20,759,291
it
17,938,471
ti
it
it
it
it
ti
it
it
R
H
It
ft
i
TREASURY DEPARTMENT
Washington
|| FOR IMMEDIATE REDEAoE,
Thursday, February 18, 1943.
V
■ *W t
Press Service
Uo. 35-42
The Bureau of Customs announced today preliminary figures showing the quan
tities of coffee authorized for entry for consumption under the quotas for the
I twelve months commencing October 1, 1942, provided for in the Inter-American
| Coffee Agreement, proclaimed by the President on April 15, 1941, as follows;
.9
Country of
Production
1
Signatory Countries;
Brazil
Colombia
Costa Rica
Cuba
Dominican Republic
Ecuador
El Salvador
Guatemala
Haiti
Honduras
Mexico
Nicaragua
Peru
Venezuela
Non-signatoiy 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 Agree- )
ment
)
1/
Quota Quantity
(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
51,653,778
Quotas revised.
-oOo-
Authorized for entry
for consumption
As of (Date")
:
(Pounds)
Feb.
6
,
«
11
ti
11
it
it
11
11
it
H
II
It
II
It
1943
179,823,406
173,391,797
6,921^911
6,065,114
10,533^699
10^582^861
22,537,528
20,606^318
24,441,354
1,162,067
15,284^310
364,770
155
20,759,291
17,938,471
INSOLVENT NATIONAL BANKS LIQUIDATED AND FINALLY CLOSED
_________ DURING THE MONTH OF JANUARY, 19A3____________
Percent
Dividends
Declared
to all
Claimants
Gash, Assets
Uncollected Stock
Assessments, etc.
Returned to
Shareholders
Name and Location of Bank
Date of
Failure
Total
Disbursements
to Creditors
Including
Offsets Allowed
Capital National Bank
Lansing, Michigan l/
3-13-34-
$ 12,614,809
New Jersey Nat!l Bk.& Tr.Co<►
6-11-32
Newark, New Jersey
14,352,569
109.83$
2,800,000
-0-
Jefferson County Natfl Bank
Brookville, Penna, l/
11-9-33
1,254,109
63.95%
125,000
-0-
Farmers Nat’l Bank & Tr,Co.
Reading, Penna. 1/
11-8-34
8,190,799
76.35^
1,000,020
-0-
Penn Natfl Bank & Tr. Co.l/
Reading, Penna.
11-26-34
4,993,480
1,000,000
-0-
l/
2/
Formerly in conservatorship
Including Dividends paid thru or by purchasing bank
89.83$ 2/
/ /
100.15$ 2/
Capital
Stock at
Date of
Failure
1
600,000
1
- 0-
TREASURY DEPARTMENT
Comptroller of the Currency
_______Washington__________
FOR RELEASE, MORNING NEWSPAPERS
PRESS SERVICE
3
During the month of January, 1943, 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 $41,4-05,766, while dividends paid to unsecured creditors amounted
to an average of 90.73 percent of their claims.
liquidation of these receiverships averaged
5*95
Total costs of
percent of total
collections from all sources, including offsets allowed.
Dividend distributions to all creditors of all active
receiverships during the month of January, amounted to $1,424,654*
Data as to results of liquidation of the receiverships finally
closed during the month are as follows:
TREASURY DEPARTMENT
C o m p t r o l l e r of the C u r r e n c y
_________ W a s h i n g t o n ___________
FOR RELEASE, M O R N I N G N E W S P A P E R S ,
Friday, F e b r u a r y 19, 1943#
2-18-43
During
Press Se r v i c e
No. 35-43
the m o n t h o f January,
1943,
6f five i n s o l v e n t n a t i o n a l b a n k s was
a f fairs o f s u c h r e c e i v e r s h i p s
Total
depositors
ships,
disbursements,
a nd o t h e r
c r e ditors
i n c l u d i n g of f s e t s allowed,
c r e d itors
lections
f r o m all
Total
sources,
receiverships
amounted
five r e c e i v e r
w h ile d i v i d e n d s p a i d to
costs of l i q u i d a t i o n of
a v e r a g e d 5.95 p e r c e n t of total
Dividend distributions
active
of these
to
a m o u n t e d to an a v e r a g e of 9 0 . 7 3 p e r
cent of their claims.
these r e c e i v e r s h i p s
c o m p l e t e d a nd the
f i n a l l y closed.
a m o u n t e d to $ 4 1 , 4 0 5 , 7 6 6 ,
unsecured
the l i q u i d a t i o n ;
to all
creditors
allowed.
of all
d u r i n g the m o n t h of January,
to $ 1 , 4 2 4 , 6 5 4 .
D a t a as
d a t i o n of the r e c e i v e r s h i p s
m o n t h are as follows:
including offsets
col
to results of l i q u i
f i n a l l y c l osed d u r i n g the
INSOLVENT NATIONAL BANKS LIQUIDATED AND ElNALLY CLOSED
_________DURING THE MONTH OE JANUARY» 19^3______ _
Name and Location of Bank
Date of
Eailure
Total
Disbursements
to Creditors
Including
Offsets Allowed
Capital National Bank
Lansing, Michigan l/
3-13-3^
$ 12,614,809
New Jersey Natrl Bki& Tr.Co,i
Newark, New Jersey
6- 11-32
1^,352,569
109.83$
2*800,000
Jefferson County Natfl Bank
Brookville, Penna. 1/
11-9-33
1 ,25^,109
63.95^
125,000
-
0-
Earmers Nat’l Bank & Tr.Co.;
Reading, Penna, ij
11- 8-34
8,190,799
76.35$i2/
1 ,000,020
-
0-
Penn Nat *1 Bank & Tr. Co.lJ
Reading, Penna.
11- 26-34
i+,993.“+80
1J
2/
Eormerly in conservatorship
Including Dividends paid thru or by purchasing bank
Percent
Dividends
Declared
to all
Claimants
89.83$ 2/
Capital
Stock at
Date of
Eailure
$
600,000
100.15$ 2/ 1 *000,000
Cash* Assets,
Uncollected Stock
Assessments, etc.
Returned to
Shareholders
$
-0-
-0-
-0-
DIVIDEND PAYMENTS TO CREDITORS OF INSOLVENT NATIONAL
BANKS AUTHORIZED DURING THE MONTH ENDED
JANUARY 31« 1943
Name and Location of Bank
The First National Bank of
Darby, Penna.
Nature of
Date
Dividend Authorized
Final
1-28-43
Number and
Percentage
of Dividend
Authorized
2nd
3*03%
Distribution
of Funds by
Dividend
Authorized
$ 91,600
Total
Percentage
Authorized
Dividends
to Date
Number of
Claimants
28.83%
8,309
Amount
Claims
Proved
$ 2,392,500
TREASURY DEPARTMENT
Comptroller of the Currency
Washington
]
----- NEWSPAPERS
Press Service
During the month ended January 31, 194-3, authority was
granted for payment of a dividend to the creditors of one insolvent
national bank.
The dividend so authorized, a second (final) payment
of 3.S3 percent, represented a distribution of $91,600 to S,309
claimants who had proved claims aggregating $2,392,500.
The dividend
payment authorized during the month ended January 31, 194-3, was as
follows:
TREASURY DEPARTMENT
C o m p t r o l l e r of the C u r r e n c y
Washington
FOR RELEASE, M O R N I N G N E W S P A P E R S ,
Friday, F e b r u a r y 19, 1943.
2-18-43
During
was
Press Service
No. 35-44
the m o n t h e n d e d J a n u a r y
31,
g r a n t e d for p a y m e n t of a d i v i d e n d
of one i n s o l v e n t n a t i o n a l bank.
ized,
a s e cond
(final)
1943,
to the creditors
The d i v i d e n d
payment
1943,
claims
a g g r e g a t i n g «¡>2,392,500.
authorized during
was as follows:
so a u t h o r
p a y m e n t of 3.83 percent,
s e nted a d i s t r i b u t i o n of {(¿91,600 to 8 , 3 0 9
had proved
authority
repre
c l a imants who
The d i v i d e n d
the m o n t h ended J a n u a r y 31,
DIVIDEND PAYMENTS TO CREDITORS OE INSOLVENT NATIONAL
Ba n k s a u t h o r i z e d d u r i n g t h e m o n t h e n d e d
________________ JANUARY 31.19^3___________________
Name and Location of Bank
The Eirst National Bank
•f Darby, Penna.
Nature of
Dividend
Einal
Date
Authorized
1-28-ÌI3
Number and
Distribution
Percentage
of Eunds by
of Dividend Dividend
Authorized
Authorized
2nd
3*83$
$91,600
Total
Percentage
Authorized
Dividends
to Date
28.83$
Amount
Number of Claims
Claimants Proved
8.309
$
2,392,500
treasury
dsparthmt
Washington
M3
FOR RELEASE, M08KING NEWSPAPERS
Saturday. February 20, 1943.
Press S e n d e e
n r*'
3
1
The
the Secretary of the Treasury announced last evening that the tenders for #700,000,00 p #
or thereabouts, of 91-day Treasury bills to be dated February 24 and to mature May 26,
which were offered on February 17, 1943, were opened at the Federal Reserve Ranks on
February 19«
1% $ to
-off«
✓
The
the details of this issue are as follows:
Total applied for - #1,053,727,000
Total accepted
700,206,000
Tota
Tota
Range of accepted bids:
lang
High
High
Low
Average price
- 99*925 Equivalent rate of discount approx. 0.297$ per annua
- 99.905
*
•
*
•
»
0.376$
»
"
- 99.906
»
*
n
*
«1
o.374$
*
*
Low
(59 percent of the amount bid for at the low price was accepted.)
Federal Reserve
District
Total
Applied For
Boston
Renr fork
Philadelphia
Cleveland
Richmond
Atlanta
Chicago
St. Louis
Minneapolis
Kansas City
Dallas
San Franc!sco
#
èra! 5
strict
17,452,000
749,022,000
19.315.000
t U , 301,000
438,164,000
13.343.000
3 0 260.000
2 7 618.000
1 :i!adelp
18,270,000
14,120,000
92.566.000
21.281.000
2,549,000
33.667.000
17.445.000
14,210,000
1 2 ,204,000
76.058.000
j iIinland
17 721.000
] {¡■ »go
2,449,000
32.473.000
16.128.000
j Incapo!
...37,780.000
,..¿¿■»¿27*230
«1,053,727,OCX)
#700 ,206,000
.
TOTAL
Total
Accepted
.
.
! jÄ
I lïork
■■.tisond
; tanta
I Louis
m C:
lias
IIFran
TREASURY DEPARTMENT
Washington
FOR RELEASE, M O R N I N G N E W S P A P E R S ,
Saturday, F e b r u a r y 20., 1943.
2-19-43
Press Service
No. 35-45
The S e c r e t a r y of the T r e a s u r y a n n o u n c e d last e v e n i n g that
the tenders
bills
were
for $ 7 0 0 , 0 0 0 , 0 0 0 or thereabouts,
of 9 1 - d a y T r e a s u r y
to be d a t e d F e b r u a r y 24 and to m a t u r e M a y 26,
o f f e r e d on F e b r u a r y 17,
Reserve Banks
1943,
1943,
which
w e r e o p e n e d at the Federal
on F e b r u a r y 19.
The de t a i l s
of this
issue are as follows;
T o tal a p p l i e d for - $ 1 , 0 5 3 , 7 2 7 , 0 0 0
T o tal a c c e p t e d
700,206,000
Range of a c c e p t e d bids;
High
L ow
Average
price
- 9 9 , 9 2 5 E q u i v a l e n t rate of d i s c o u n t approx.
per annum
- 9 9 . 9 0 5 E q u i v a l e n t rate of d i s c o u n t approx.
•p e r a n n u m
- 9 9 , 9 0 6 E q u i v a l e n t rate of d i s c o u n t approx.
per annum
(59 p e r c e n t of the a m o u n t b i d for at the l o w price was
Federal Reserve
D i s trict ________
Boston
New York
Philadelphia
Cleveland
Richmond
At l a n t a
Chicago
S t . L o uis
Minneapolis
Kansas C i t y
Dallas
San F r a n c i s c o
TOTAL
Total
A p p l i e d For
$
0.297%
0.376%
0.374%
accepted.)
Total
Accepted
' 17,452,000
749,022,000
19.315.000
30.260.000
18.270.000
14.120.000
92.566.000
21.281.000
2,549,000
33.667.000
17.445.000
57.780.000
$ 14,301,000
438,164,000
13.343.000
27.618.000
14.210.000
12.204.000
76.058.000
17.721.000
2,449,000
32.473.000
16.128.000
55.557,000
$1,053,727,000
$700,206,000
-oOo-
Im u $ - 7 4 4 1 1
add t¥0
She sense» amounts varied with the financial status
of the person Involved*
In some oases a reduoed rate was
offered In the Iona o f a lump sum which would pay to r the
exit permits o f a group of people*
In one of these wholesale
deals» .partietvlae iffisfmieej the emigration of several hundred
people was at stake and the sum requested ran into millions
of Swiss franos*
Most of the vmmmm victims however» were
selected from those with friends known or reputed to have a
certain amount of wealth#
the Hassle apparently made a care*
ful check of people with funds on deposit in neutral countries
These deposits were jfii.pcfflCfty specifically referred to in a
number of the extortion notes*
Although n o money which might possibly find its way
into German coffers is being released from
the
United States»
financial aid is still permitted 4 ° he sent to bona fide re
fugees stranded in neutral countries*
Lang »7443A •
add on#
the racket, which had Its variation#! usually operated
rxiLn^ >
this way*
Messages were sent by Reich agents to 2^jOattoe# In
fr e e countries to the effect that If a certain amount of
money were not Immediately paid either to the credit of ^|hjy^
agent or his intermediaryf the wife* children ¿a* parents! of
the shakedown victim would be Reported to PolafiT where a mass
*4e$ogHtf£tde?i* process is taking place#
If the money were
paid, the endangered relative would then receive an “exit permit*
which the ore tically entitled him to leave the Belch domain and
somehow make his way to his benefactor#
there is evidence,
however, that the Germans frequently backslid on their agree»
ment and, Instead of granting the “exit permit“ , asked for
additional ransom«
the rates ranged fro© $4,000 to $75,000
for a single exit permit#
^ « £ ^ J f £ & v e i agencies and various Individuals In neutral
and Allied countries acted as the intermediaries for the
German-sponsored SOS messages to worried relatives#
A number
of these acted Innocently enough, believing that they were
expediting the release of a $asi prisoner# the majority of
V:
■. Ipll |p . ,
• •U.^
the go-betweens, however, consisted of veteran Nasis or willing
helpers, completely aware of what they were doing#
Requests for
ransom payments were also often signed by relatives within Ger
man territory who pleaded for their liberation#
(More)
TREASURY DEPARTMENT
Washington
hang-74411
FCR RELEASE SUNDAY NEWSPAPER^
“ S & - ì * _ ì à £ « „ --------------- a m m iiiim m m iM B ttm d m iM
Press Service
No.
3i
4
10
10
An
international Nasi ransom racket Involving the sale
in inti
\i
of German exit permits in exchange for money exported from United
iperm
it5
Nations territory has recently been stopped as the result of a
Bias I
three-way agreement between the Netherlands Government, Great
a—
¿ ¿ S t * - * U , sCfA $811ti®
Britain and the United Statesi the
treasury
|eagri
lion of
I for noo1
She agreement9 put into effect November 24f 1942, calls
for the rtmfSAAe cessation of the transfer of money for the pur
United States, the three nations chiefly affected by Germany *s
le feti
¡»is chie:
issued s
its for :
lug in thi
çrdeâ es e
device for bolstering its finances, have Issued announcements
tels ire
that all individuals willing to buy such exit permits for friends
I fore
i l Stfi
{aitile i
iti farti
ip credi
fcic sii
ut bonore
pose of buying exit permits for people within Belch-held territory
who wish to emigrate« [the Netherlands, Great Britain and the
S?3>,i
or relatives and all brokers, agents or individuals aiding in
s
the transfer of such monies will be placed on a black list and
regarded as enemies«
Since the announcements were sent out,
nearly three months ago, the number of messages
received by
Rei
Dutch, British and American nationals from within Bermany
has dwindled sharply#
.
fessaci
!|ect ü
ir to th<
its or öl
M ratioi
__
The Foreign Funds C k m t r S ^ o r the Treaeur^andTState
d as the United State sagencJU.^
J Issisti
% r e ì ri
of " M a «
/1^
(che oounfrry
^or^mery
-ehargcHof preventing mandy from-lw/i.hg ..fehe
counery^oy~wn!Briy
Départi ¿ente# hai* been
Ifactor,
useev*
1
I
m
TREASURY DEPARTMENT
Washington
FOR RELEASE SUNDAY NEWSPAPERS *
EED 281943
Press Service
No. 35 —^-6
An internetionel Nazi ransom racket involving the sale of German
exit permits in exchange for money exported from United Nations ter
ritory has recently been stormed as the result of a three-way agreement
between the Netherlands Government, Great Britain and the United States,
the Treasury announced today.
The agreement, put into effect November 2b, 19b2, cells for the
cessation of the transfer of money for the purpose of buying-exit per
mits for peonle within Reich-*held territory who wish to emigrate.
The Netherlands, Great Britain and the United States, the three
nations chiefly affected by Germany’s device for bolstering its finances,
have issued announcements that all individuals willing to buy such exit
permits for friends or relatives and all brokers, agents or individuals
aiding in the transfer of such monies will be placed on a black list and
regarded as enemies. Since the announcements were sent out, nearly three
months ago, the number of messages received by Dutch, British and American
nationals from within Germany has dwindled sharply.
The Foreign Funds Control division of the Treasury, acting in unison
with the State Department, has been designated as the United States agency
responsible for preventing any transactions of this nature which might be
used to further enemy operations, particularly along the lines of creating
foreign credits to finance espionage, sabotage, and the m u rcfta.se of
strategic military materials in foreign countries where the Reichsmark
is not honored.
The racket, which had its variations, usually onerated this way:
Messages were sent by Reich agents to persons in free countries to
the effect that if a certain amount of money were not immediately paid
either to the credit of the agent or his intermediary, the wife, children,
parents or other relatives of the shakedown victim would be sent to a
concentration camp or deported to Poland where a. mass ’’denooulation”
process is taking place. If the money were paid, it was indicated, the
endangered relative would then receive an ’’exit permit” which theoretically
entitled him to leave the Rpich domain and somehow make his way to his
benefactor. There is evidence, however, that the Germans frequently
-
2
-
"backslid on their agreement and, instead of granting the "exit permit",
asked for additional ransom. The rates ranged from $U,000 to $75*000
for a single exit permit.
Some travel agencies and various individuals in neutral and Allied
countries acted as the intermediaries for the German-sponsored SOS^ mes
sages to worried relatives, A number of these acted innocently enough,
believing that they were expediting the release of a Nazi prisoner. The
majority of the go-betweens, however, consisted of veteran Nazis or will
ing helpers, completely aware of what they were doing. Bequests for
ransom payments were also often signed by relatives within German ter
ritory who pleaded for their liberation.
The amounts varied with the financial status of the person involved.
In some cases a reduced rate was offered in the form of a lump sum which
would pay for the exit permits of a group of people, In one of these
wholesale deals, the emigration of several hundred people was at stake
and the sum reouested ran into millions of Swiss francs. Most of the
victims however, were selected from those with friends known or reputed
to have a certain amount of wealth, The Nazis apparently made a care
ful check of people with funde on deposit in neutral countries. These
deposits were specifically referred to in a number of the extortion notes.
Although no money which might possibly find its way into German
coffers is being released from the United States, financial aid is still
permitted to be sent to bona fide refugees stranded in neutral countries,
-o0o~
FOR IMMEDIATE RELEASE,
February 2 3 » 19U3»
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,
1 9 k 2 ,
provided for in the Inter-American
Coffee Agreement, proclaimed by the President on April
s
Country of
Production
Signatory Countries:
Brazil
Colombia
Costa Rica
Cuba
Bominican Republic
Ecuador
El Salvador
Guatemala
Haiti
Honduras
Mexico
Nicaragua
Peru
Venezuela
1?1|1, as follows)
s
:
s
i
Quota Quantity t
Authorized for entry
(Pounds) 1 / t
for consumption
i T s off (Date)
i
(Pounds)
1,535,367,083
Non-signatory Countries»
)
British Empire, except
)
Aden and Canada
)
Kingdom of the Netherlands)
and its possessions
)
Aden, Yemen, and Saudi
)
Arabia
)
Other countries not sigaa-)
tories of the Inter)
American Coffee Agree- )
ment
)
1/
1 $ ,
520, 081»,62?
33, 019, 261»
13,212,917
17,533,713
21»,767,091»
Feb
13, 19li3
»
"
»
»
180,1*01,885
195,161»,691
7,297,71*8
6,065,11*5
10,816,689
»
11,253,1*86
■
"
«
«
23,371,181*
23,365,859
32,61*2,691
1,162,067
"
1 7 , 063,862
1»,127,276
61, 251»,106
■
■
«
361»,770
155
21, 21*9 ,981*
51,653,778
*
18,1(59,883
99, 680, 281»
88,33l»,W*2
1»5 , 1*00,298
2,908,617
78,758,056
32,1*62,515
Quotas revised»
—oOo—
TREASURY DEPARTMENT
Washington
FOR IMMEDIATE RELEASE,
Wednesdaty« February 24, 1943,
Press Service
No. 35-47
The Bureau of Customs announced today, preliminary figures showing the
quantities of coffee authorized for entry for consumption under the quotas
for the twelve months commencing October 1, 1942, provided for in the InterAnerican 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/
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
Non-*signatory Countries:
)
British Empire, except
)
Aden and Canada
)
Kingdom of the Netherlands)
and its possessions
)
Aden, Yemen, and Saudi
)
Arab ia
)
Other countries not signa-0
tories of the'; Inter)
American Coffee Agree- )
ment
)
51,653,778
Authorized for entry
for consumution
As of (Date)
:
(pounds)
Eeb. 13, 1943
if
<tr
ft
ti
fi
IT
It
ft
it
rt
ft
it
it
n
180,401,885
195,164,691
7,297,748
6,065,145
10,816,689
11,253,486
23,371,184
23,365,859
32,642,691
1,162,067
17,063,862
364,770
155
21,249,984
18,459,883
10
our revenues.
-
Indeed, we are faced with the necessity
of raising additional revenue in a time of national:
peril.
Should we forgive taxes on persons who had
1942 incomes when we shall be obliged to increase
greatly the taxes to be paid out of the incomes of
1943 and subsequent years?
The decision we make on
this question will determine to a considerable extent
who will pay this increase in taxes.
—
9 —
These are the reasons why it has not been pos
sible for the Treasury to recommend to the Congress
the complete cancellation of taxes on 1942 incomes.
It has not been possible for the Treasury to recom
mend legislation which will benefit a few at the
expense of the many.
In discussions of this problem some consideration
has been given to partial cancellation of 1942 taxes.
In so far as such partial cancellation bestows bene
fits on substantially all taxpayers, and distributes
those benefits among taxpayers equitably, some of the
objections to complete cancellation do not apply.
The revenue which would be lost by the Government
could be made up by increased taxation from sub
stantially the same individuals who benefited by
cancellation.
In conclusion, let me restate In exact terms
the issue involved in forgiveness of taxes on 1942
incomes.
There Is no issue between the Treasury and
taxpayers.
payers.
There is an issue between different tax
It concerns their share of the tax burden.
We have to maintain
our revenues.
have already inposed or by cancalling these taxes
and laposlng others?
There are taro isportant ways
In which our choice of oethod sill affect the dis
tribution of the tax burden*
In the first place,
if ee cancel 1342 taxes, the additional revenue
sill be raised solely on the basis of the lncoaes
of 1343 and subsequent years without regard at all
to the 1342 incoas*
Those who had substantial io
c s » in 1342, but who receive little or no ineoa©
in 1343 and subsequent years, will contribute such
less to the war costs than those whose position la
reversed*
In the second place, and noro inportant,
rates on the higher incomes are already so high that
they can scarcely be increased sufficiently to oako
/
up for the aaount of 1342 taxes forgiven#
Tbs
greater pert of any Increase in tax. rates will have
to fall
groups*
an
taxpayers in the low and niddle income
it Is not difficult to recover the taxes
forgiven at the bottoa, but it is practically lapossible to recover froa the top incases tlio amounts
they would be forgiven* These are t he
tax would be the equivalent of almost two years'
Income after taxes,
in the case of a million dollar
Income, the forgiveness of a year's taxes would add
to the taxpayer's wealth at one stroke as much as
he could add la nearly 6 years by saving every dollar
he had left after paying taxes and spending nothing.
Is it reasonable to suppose that certain indi
viduals can gain while nobody loses?
can we add to
the wealth of one taxpayer the equivalent of 6 years'
income after taxes without being obliged as a conse
quence to Impose additional taxation on other tax
payers?
I think we all know enough about arithmetic
to know that this is impossible.
When ease people
get something from the Government other people must
pay for it.
We can see this by turning to the question of
how we can get the additional rovenue that we so
badly need, if we cancel 19lt2 taxes.
We will, of
course, have to raise income tax rates.
But, it may
be asked, what difference does it make whether we
raise additional revenue by collecting the taxes we
have already
194-2 and was not subject to tax.
A married person
without dependents with a net income of 32,000 would
gain 3140 if the entire tax were cancelled.
If he
had a net income of $100,000, he would gain $64,000.
If he had a net income of $1,000,000, he would gain
$850 , 000 .
The cancellation of taxes on 1942 income would
In effect wipe out much of the tax increases imposed
to finance the war.
In the case of a person with a
$2,000 net income, it would wipe out
of the tax
increases imposed in the last three years.
At the
$100,000 level, the amount forgiven equals 102 per
cent of these tax increases and at the $1,000,000
level,
percent.
Another way to Judge the effect of cancellation
on the individual’s economic status Is in terms of
the income he has left after taxes.
This is the
amount he may spend or save each year.
For the indi
vidual with $2,000 income the forgiven tax would be
the equivalent of less than one month’s income.
For
the individual with a 3100,000 income, the forgiven
tax would
- S'
This solution has deceptive appeal.
Most of
us are human enough to be pleased at the prospect
of escaping tax on one year’s income.
The appeal
is deceptive because over a period of years the
Government has to raise a given amount of taxes;
either the same people will have to pay the same
amounts despite the forgiveness or the forgiveness
will require that son® pay more and others pay less.
If we cancel a year’s taxes in getting to a pay-asyou-go system, the important question is:
How will
that affect individual taxpayers, and who will pay
the additional taxes we need?
While the effect of forgiveness on an individ
ual’s tax payments Is not felt until his income
declines or ceases, it has a significant inirnod late
effect on his econoaic status.
The amount of taxes
cancelled represents an Immediate addition to the
taxpayer’s wealth.
This addition, which would de
pend on his income in 1942, varies widely from indi
vidual to individual,
cancellation would not improve
the position of the individual who had no income in
1942 and
4
You may asic the question:
Why not start the
system by collecting 1943 taxes in 1943?
This would
neon that in 1943 w© could pay taxes on 1943 income
and also taxes on 1942 income.
This we night do
without difficulty if rates were lower than they
are.
indeed, our pressing revenue necessities are
a strong argument for doing so.
However, it must
be recognised that m n y of our taxpayers failed to
accumulate funds out of 1942 income for the payment
of tax on that income.
The level of rates is such
that considerable hardship sight result from paying
in full two years’ taxes out of 1943 income, partic
ularly in the case of those taxpayers whose incomes
will have declined in 1943.
One plausible solution that lias been offered
is to forgive taxes on 1942 incone.
Fay not,let by
gones be bygones, it is argued, and forget about
taxes on 1942 incooB?
Since In 1943 an individual
will be paying a tax on his 19*13 Inc coo, why require
him to pay a tax as well on his 1942 Income?
Why
not skip a year’s taxes?
rpv *«
■Jk ' 4»* M-.JL
I
** W
■*9
**
Installments Is o b so le te for an Income tax which Is
imposed on millions of individuals who base their
budgeting on weekly, semi-monthly, or monthly pay
checks.
Paying in the year following receipt of
Income is likewise obsolete when the tax is imposed
on millions of people «hose incomes fluctuate violently
,
from one year to another, and who may have no income
when the tax has to be paid.
To meet the needs of these millions of people
we need a system which will collect income taxes bit
by bit as the income i s earned.
We need a system
which will collect the taxes on 1343 income in 1043,
and which will to a large extent collect it out of
each paycheck.
taxation.
This is the heart of pay-as-you-go
This is what we need to make the income
tax a more flexible Instrument in combating infla
tion.
This la what the taxpayer needs to make the
payment of tho income tax convenient.
are agreed up to t i l l s point.
center upon the question:
Most of us
Differences of opinion
How can wo get such a
system started?
You may
1
2
It Is only In the light of these urgent revenue nec
essities that I can intelligently approach my sub
ject of this morning —
pay-as-you-go taxation.
At the outset of my discussion, I want to make
it clear that the Treasury is in complete agreement
with the objective of putting our tax system on a
pay-as-you-go basis.
Indeed, the Treasury has been
recommending pay-as-you-go taxation for a long time.
Congress has been awake to the same need for a long
time.
Public interest has not lagged far behind and
has recently acquired great momentum.
Today the question
lsnot illllili w®
Should have pay-as-you-go taxation,
but |}P$i/7e sftsll get to such a system.
The growing interest in this subject is very
natural,
The income tax reaches ten times as many
people today as it reached five years ago, and the
r
rates are higher than they have ever been in American^
history.
Under the existing method of income tax
^
payment the tax for any year is pa id in four installmente during the following year.
Paying in quarterly
installments
PAT-AS-YOtt-Oe TAXATIOH
I had the opportunity of participating In your
Forum a year ago, and It
m
that I accepted your chairman's invitation to Join
you again this year.
3«ao of you sill recall that last year I dis
cussed with you tho Government's critical need for
raising $0 billion in additional taxes.
Today the
Government's revenue needs are even more critical.
The reason is not far to seek,
While our war
effort has been greatly intensified during the past
12 months, the strain upon our economy has been
correspondingly aggravated.
Immediately after Pearl
Harbor we were spending for wax’ at tho rate of $2
now
billion a month. Our war expenditures have /-cached
37 billion a month.
In the next fiscal year average
monthly expenditures will top S§ billion.
In early
1942 our revenue goal, as set forth by the President
was an additional $9 billion.
Today our sights are
set by the President's budget message for ai» swii„„m&ml.
$16 billion ir~n:iiiiiiiiminipl collections.
This
increase is necessary to raise annual collections
to $50 billion.
I review these figures deliberately
It is
with ge
Pay-as-you-go Taxation
An atureas by Randolph 1. Paul, General
Counsel of tno Treasury, before the Seventh
Annual ¡'’or® on iSorlo■A*.fairs, Arranged by
the Brooklyn Suction of %?L&S& h Is#* * n n l rVviiw/
of Jewish bouen, Brooklyn,
Ifw fo r k ,
Sched
uled for Delivery at 11;15 A.M., February 2|
1 9'i3
(The following address by Randolph E. Paul, General Counsel
for the Treasury, is scheduled to be delivered before the
Forum on World Affairs arranged by the Brooklyn Section of
the National Council of Jewish Women in the Academy of
Music, Brooklyn, N. Y*, at 11$15 a, m*, Eastern War Time,
Wednesday, February 24, 1943. and is for release upon
delivery at that time.)
PAY-AS-YOU-GO TAXATION
I had the opportunity of participating in your Forum a year ago,
and it was with genuine pleasure that I accepted your chairman’s invi
tation to join you again this year*
Some of you will recall that last year I discussed with you the
Government's critical need for raising $9 billion in additional taxes*
Today the Gover,nment rs revenue needs are even more critical*
The reason is not far to seek* While our war effort has been
greatly intensified during the past 12 months, the strain upon our
economy has been correspondingly aggravated* Immediately after Pearl
Harbor we were spending for war at the rate of $2 billion a month*
Our war expenditures have now reached the rate of §6-l/2 billion a
month* In the next fiscal year average monthly expenditures will top
$8 billion* In early 1942 our revenue goal, as set forth by the
President, was an additional $9 billion* Today our sights are set by
the President's budget message for an additional $16 billion of col
lections* This increase is necessary to raise annual collections to
$50 billion* I review these figures deliberately* It is only in the
light of these urgent revenue necessities that I can intelligently
approach my subject of this morning — pay-as-you-go taxation.
At the outset of my discussion, I want to make it clear that the
Treasury is in complete agreement with the objective of putting our
tax system on a pay-as-you-go basis* Indeed, the Treasury lias been
recommending pay-as-you-go taxation for a long time. Congress has been
awake to the same need for a long time* Public interest has not lagged
far behind and has recently acquired great momentum*' Today the question
is not whether we should have pay-as-you-go taxation, but how we shall
get to such a system*
The growing interest in this subject is very natural. The income
tax" reaches ten times as many people today as it reached five years
ago, and the rates are higher than they have ever been in American
-
2
-
history. Under the existing method of income tax payment the tax for
any year is paid in four installments during the following year*
Paying in quarterly installments is obsolete for an income tax which
is imposed on millions of individuals who base their budgeting on
weekly, semimonthly, or monthly pay checks. Paying in the year
following receipt of income is likewise obsolete when the tax is
imposed on millions of people whose incomes fluctuate violently from
one year to another, and who may have no income when the tax has to
be paid*
To meet the needs of these millions of people we need a system
which will collect income taxes bit by bit as the income is earned.
We need a system which Yd.ll collect the taxes on 1943 income in 1943>
and which wall to a large extent collect it out of each paycheck.
This is the heart of pay-as-you-go taxation. This is what we need to
make the income tax a more flexible instrument in combating inflation.
This is That the taxpayer needs to make the payment of the income tax
cdhvenient. Most of us arc agreed up to this point. Differences of
opinion center upon the question: How can we get such a system started?
You may ask the question: Why not start the system by collecting
1943 taxes in 1943? This would mean that ,in 1943 we would pay taxes on
1943 income and also taxes on 1942 income. This we might do without
difficulty if rates Yrere lower than they are. Indeed, our pressing
revenue necessities are a strong argument for doing so. However, it
must be recognized that many of our taxpayers failed to accumulate funds
out of 1942 income for the payment of tax on that income. The level of
rates is such that considerable hardship might result from paying in full
two years’ taxes out of 1943 income, particularly in the case of those
taxpayers whose incomes will have declined in 1943«
One plausible solution that has been offered is to forgive taxes
on 1942 income. Why not let bygones be bygones, it is argued, and forget
about taxes on 1942 income? Since in 1943 sri individual will be paying
a tax on his 1943 income, Y/hy require him to pay a tax as well on his
1942 income ? Why not skip a year’s taxes ?
This solution has deceptive appeal. Most of us are human enough
to be pleased at the prospect of escaping tax on one year’s income.
The appeal is deceptive because over a period of years the Government
has to raise a given amount of taxes; either the same people will have
to pay the same amounts despite the forgiveness or the forgiveness ’»'rill
require that some pay more and others pay less. If we cancel a year’s
taxes in getting to a pay-as—yoYt—go system, the important---question is:
How will that affect individual taxpayers,, and who will pay the addi
tional taxes we need?
- 3 -
While the effect of forgiveness on an individual’s tax payments is
not felt until his income declines or ceases, it has a significant
immeqiate effect on his economic status# The amount of taxes cancelled
represents an immediate addition to the taxpayer’s wealth. This addition,
which would depend on his income in 1942, varies widely from individual
to individual# Cancellation would not improve the position of the
individual who had no income in 1942 and was not subject to' tax#
A married person without dependents with a net income of $2,000 would
gain'$140 if the entire tax'weré cancelled# If he had a net income of'
$100,000, he would'gain $64,000. If he had a net income of $1,000,000,
he would gain $850,000#
The cancellation of taxes on 1942 income would in effect wipe out
much of the tax increases imposed'to finance the war# In the case of
a person with a $2,000 net income, it would wipe out 11% of the tax
increases imposed in the last three years# At the $100,000 level, the
am6unt'forgiven equals 102 percent of these tax increases and at the
$1,000,000 level, 320 percent#
Another viay to judge the effect of cancellation on the individual’s
economic status is in terms of the income he has left after taxes. This
is'the amount he may spend or save each year. For the individual with
$2,000 income the forgiven tax would be the equivalent of less than one
month’s income. For the individual with a $100,000 income, the forgiven
tax would be the equivalent of almost two years’ income after taxes# In
the case of a million dollar income, the forgiveness of a year’s taxes
would add to the taxpayer’s wealth at one stroke as much as he could add
in nearly 6 years by saving every dollar he had left after paying taxes
and spending nothing#
Is it reasonable to suppose that certain individuals can gain •
while nobody loses? Can we add to the wealth of one taxpayer the
equivalent of 6 years’ income after taxes without being obliged as a
consequence to impose additional taxation on other taxpayers? * I think
we all know enough about arithmetic to know that this is* impossible.
When some people get something from the Government other people must
pay for it#
We can see this by turning to the question of how we can get the
additional revenue'that we so badly need, if we cancel 1942 taxes#
We will, of course, have to raise income tax rates# But, it may be
asked, what difference does it make whether we raise additional revenue
by collecting the taxes we have already imposed or by cancelling these
taxes and imposing others? There are two important ways in which our
choice of method will affect the distribution of the tax burden. In
the first place, if we cancel 1942 taxes, the additional revenue will
be raised solely on the basis of the incomes of 1943 and subsequent
years without regard at all to the 1942 income# Those who had ^substantial
q u e X v c L - 9^diT>UínWt0-he+eÍVe Jittle or no income in 1 9 « and subseeontrlbf e W cb less to the mar coats than those ■
rateo S the M K reversed- In the second place, and more important,
«ÍI2 Í? bil8.hlshM' incomes are already so high that they can
o
c c - ® increased sufficiently to make up for the amount of 1942
h ^ - ; ° ^ T n- +ThS 8reatSr ^
of a*y increase in tax r a t e ^ f Z
m t difficult0?
T
aOÍ middle lncome g
lm
feLMwIft
*?lQV<3f
taxes iorgiven at the bottom, but it is
L y l o u l d ^ b e forgiven.
reC°W
t0p ****** the
"w o o TheS! ar® the reasons
it ha® not been nossible for the
taxeoTí
If®!?« t0T^h° Concross
c° ^ t e cancellation of
taxc. on 1942 incomes. It has not been nossible for the Trc-asu-v
tlT'T^r
legiSlation
a few at the e^ensTof
to n - T ^ 1S™ SST nS+?f this
problem.sow* consideration has
to partial cancellation w: 1942 taxes. In so far as such cartiai
cancellation bestows benefits on substantially all taxpayers, and
distributes those benefits among taxpayers equitably, some of the obwouldTp w T T t T ban0#natfon Ao not apply* The revenue which
would be lost by uhe Government could be made up by increased tavat-inn
xrom substantially the same individuals who benefited by cancellation.
| In conclusion, let me'restate in exact terms the issue involved
r| I°rg:i-veness o i^ n x e s on 1942 incomes. There is no issue between
S L ¿ r aST+y and oa^
e^3- T1^ re is ** issue between different tax******* It concerns their share of the tax burden. I7e have to maintai
ur revenues. Indeed, we are faced with the necessity of raising addi
tional revenue m a time of national peril. Should we forrive tlxes
-reftiv°^e^ had 19^ incomes when we shall be obliged to increase
vears^ S í h
• be Paia out oi the incomes of 1943 and subsequent
J . f \ ilie decision, v/e make on this question will determine to a "con
siderable extent who will pay this increase in taxes!
u r a
-
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*
o 0»
Reserve Banks and Branches^*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
March 3, 1943 ---------•
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 *orice *oaid for such bills, whether on original
TREASURY DEPARTMENT
Washington
FOR RELEASE, MORNING NEWSPAPERS,,
Friday. February 26, 1943_____ •
¿dt
The Secretary of the treasury, hy this public notice, invites tenders
for $ 700.000.000
_, or thereabouts, of
91 -day Treasury hills, to he issued
on a discount basis under competitive bidding.
be dated
March 3. 1943
The bills of this series will
, and will mature
when the face amount will be payable without interest.
June 2, 1943__________
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., Eastern jataodsocdc time, Monday. March 1. 1943
.
íMk
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 10 0 , 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 after the closing hour, tenders will be opened at the Federal
T REA SiteY DEPA R T M E N T
Washington
FO R RELEASE, M O R N I N G NEWSPAPERS,
Friday,, F e b r u a r y 26, 1943.
2-25-43
-------------
The S e c r e t a r y of the Treasury,
invites
tenders
T r e a s u r y bills,
for $ 7 0 0 , 0 0 0 , 0 0 0 ,
by this p u b l i c notice,
or thereabouts,
to be i s s u e d on a d i s c o u n t basis u n d e r c o m
pe t i t i v e bidding.
The b i lls of this
M a r c h 3, 1 9 4 3 , . and will m a t u r e
series will be d a t e d
June 2, 1943,
a m o u n t - w i l l be p a y a b l e w i t h o u t interest.
Issued in b e a r e r for m only,
$5,000,
$10,000,
rity v a l u e ) .
of 9 1 - d a y
$10 0 , 0 0 0 ,
when
the face
T h e y will be
a nd in d e n o m i n a t i o n s of $1,000,
$ 5 0 0 ,000,
and $ 1 , 0 0 0 , 0 0 0
(matu
'
T e n d e r s will be r e c e i v e d at Federal Reserve Banks and
Br a n c h e s up to the c l o sing hour, two o ’clock p. m . , E a s t e r n
W a r time, Monday, M a r c h 1, 1943.
T e n d e r s will not be r e
c e i v e d at the T r e a s u r y Depa r t m e n t , W a s h i n g t o n .
E a c h tender
m u s t be for an even m u l t i p l e of $1,000, and the p r ice o f f e r e d
m u s t be e x p r e s s e d on the basis o f 100, w i t h n ot m ore than
three decimals, e. g., 99.925.
Fractions m a y n ot be used.
It is u r g e d tha’t tenders be m a d e on the p r i n t e d forms and
f o r w a r d e d in the special env e l o p e s w h i c h will be s u p p l i e d
b y Federal Reserve B a nks o r B r a n c h e s on a p p l i c a t i o n therefor.
T e n d e r s will be r e c e i v e d w i t h o u t d e p o s i t from i n c o r p o
r a ted banks and trust companies a nd from r e s p o n s i b l e and
r e c o g n i z e d dealers m
I n v e s t m e n t securities.
T e n d e r s f rom
o t hers m u s t be a c c o m p a n i e d b y p a y m e n t of 2 p e r c e n t of the
face a m o u n t of T r e a s u r y bills a p p l i e d for, u n l e s s the t e n
ders are a c c o m p a n i e d b y an express g u a r a n t y of p a y m e n t by
an i n c o r p o r a t e d b a n k or trust company.
I m m e d i a t e l y a f t e r the c l o s i n g hour, tenders will be
o p e n e d at the Federal Reserve B a n k s and Branches, fo l l o w i n g
w h i c h p u b l i c a n n o u n c e m e n t will be m a d e b y the S e c r e t a r y of
the T r e a s u r y of the a m ount and price range of a c c e p t e d bids.
T h o s e s u b m i t t i n g tenders will be a d v i s e d of the a c c e ptance
or i e j e c t i o n thereof.
The S e c r e t a r y of the T r e a s u r y e x
p r e s s l y reserves the right to accept or reject a n y or all
tenders, in w h ole or in part, and his a c t i o n in any such
35-49
(Over)
2
P a y m e n t of a c c e p t e d tenders at the
respect shall he final.
o
f
f
e
r
e
d
m
u
s
t
be
m
a
d
e or com p l e t e d at the Federal Reserve
prices
c
a
s
h
or
o
t
h
e
r
i
m
m
e
d i a t e l y a v a i l a b l e funds on M a r c h 3,
Ban k in
1943.
The income d e r i v e d fro m T r e a s u r y bills, w h e t h e r interest
or g ain f r o m the sale or o t h e r d i s p o s i t i o n of the bills, shall
n o t ' h a v e - a n y exemption, as such, and loss from the sale or
o t her d i s p o s i t i o n of T r e a s u r y b i lls shall not. h ave any special
treatment, as such, u n d e r Federal tax A cts n o w or h e r e a f t e r
enacted.
The "bill's shall be subject to estate., inheritance,
gift, or o t h e r excise taxes, w h e t h e r Fe d e r a l or State, out
shall be exempt fro m all ta x a t i o n n o w or h e r e a f t e r imposed on
the p r i n c i p a l or i n t e r e s t t h e r e o f by a ny State, or a ny of the
p o s s e s s i o n s of the U n i t e d States, or b y .any local taxing
authority.
F o r p u r p o s e s of t a x a t i o n the amount of discount
at w h i c h T r e a s u r y b i l l s are o r i g i n a l l y sold b y the U n i t e d
States shall be c o n s i d e r e d to be interest.
U n d e r Sections 42
and 117 (a) (1) of the Internal Revenue Code, as a m e n d e d by
S e c t i o n 115 of the Revenue Ac t of 1941, the a m o u n t of discount
at w h i c h bills i s sued h e r e u n d e r are sold shall n ot be c o n
sidered to accrue u n t i l suc h bills shall be sold, re d e e m e d or
o t h e r w i s e d i s p o s e d of, a nd s u c h bills are e x c l u d e d fro m con
s i d e r a t i o n as capital assets.
A c c o r d i n g l y , the o w n e r oi
T r e a s u r y bills (other than life i n s u r a n c e companies) issued
h e r e u n d e r n e e d include in his income tax r e t u r n onl y the dif
ference b e t w e e n the price pa id for s u c h bills, w h e t h e r on
o r i ginal issue or on sub s e q u e n t purchase, a nd the amount
.
a c t u a l l y r e c e i v e d e i ther u p o n sale or r e d e m p t i o n at maturity
d u r i n g the taxable y e a r for w h i c h the r e t u r n is made, as ordi
n a r y g a i n or loss.
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 No. 418, as amended,
this notice,' p r e s c r i b e the terms of the T r e a s u r y bills and
g o v e r n the c o n d itions of their issue.
Copies of the circular
m a y be o b t a i n e d f r o m any Federal Reserve Ban k or Branch.
oOo
demandy Pilled by",
ltheco agencies; Ifa1* jMaete,',eaii
dy!,',ai
rO‘,''fls'<yt
ocurement is now the paramount job of the
Treasur y - P r o c u r e m e n t
Division, Mr* Mack pointed out that the peacetime
job of the Division included regular and continuous purchase of about
22,000 items used by two or more governmental agencies* t War has
accelerated this operation, Mr. Mack said, in explaining the
technical operations involved in effecting this type of purchasing.
He told the class that the Washington warehouse of the
Division handled fifteen tons of goods every hour, and that other
warehouses were maintained in field cities*
"Government procurement is now at quick—step," he said*
"Speed of delivery is the first essential in all war procurement,
ana red tape is a matter of history."
He concluded by petting
J
III,, niurrii that the service of procurement originated on the home
front, and that it must be supplemented by the efforts of every one
of the millions of men and women not in uniform*
—
2
■»
"Magnitude in procurement assignments has ceased to be
remarkable, n he told the class« explaining that Treasury<9MMPNHMk
purchases of steel shapes and castings were measured in units often
amounting to whole freight trains*
Last year, —
^'pivision
acquire!
and moved more than eight million tons of steel»- nine percent of
the national output—
and it made purchases of used sawmills for India,
tire|'machines iretreadingj for China, sewing machines for Iceland,
*^’**’'*"....—
..■■■*
artificial dentures for Great Britain.
"And we must expect requisitions for artificial limbs, however
pathetic that seems,"
he added grimly*
Another illustration of mass purchasing was revealed when
Mr* Mack told the class that the Treasury Procurement Division has
performed, at least six times, the function of buying a big industrial
plant, taking it apart piece by piece and transporting it to docks for
shipment to the other side of the world*
He pointed out that this
operation involved the services of engineers and technicians and that
the technical differences encountered in manufacturing operations
between, for example, Russia and the United States, sometimes
necessitate the radio transmission of complete factory plans to Moscow
so that certain difficulties could be ironed out*
He emphasised, however, that the cooperation between foreign
purchasing missions in this country and government J^roeurement services
alone had
was of the highest degree, and.that
bdbrû.
already handled approximately t M i l w s â e M ^ w o r t h of Lend-Lease
requisitions submitted through Foreign Purchasing Commissions to the
Lend-Lease Administration
Y &
2
5
f^br
1 ’tyLyAtS&ijfk
Russia was hable to hold important pWtac^fbrts last autumn
partly becaus
lr4l& ju t t'H ■_k ___ _______ ^ ___ »,
» Jt*»Jt~Qe*A
>|4i it purchasing officers handled
U ft& #*‘SC£(|
requisitions with uui/ilut**
>eed, 4me«m**|e*Procurement Director
Clifton £• Mack iev sati^ tonight*
Addressing a graduate class in purchasing at Harvard
University, Mr* Mack said it was imperative last summer to get
quantities of material "so varied that they could serve as a capsule
record of today*s civilization" to the Russian bases before ice locked
the convoy routes for the season*
Hr illustrating the mechanics of government buying under
pend-^ease, Mr* Mack told how a large number of men and women in
Washington were involved in the Russian operation, some of them in
important purchasing capacities^ ethers bundling Uliu iuul,
tttudg,~of
tasks which must be don't!).tBTV large"buying job of thia^type»--^
He emphasised the importance of the service of procurement
by naming it one of the three prime factors in wrenching Victory from
global war*
He said that manpower and efficient leadership, the other
two primes, were dependent upon supply«»and that supply was the
responsibility of the service of procurement*
TREASURY DEPARTMENT
Via shing ton
FOR RELEASE, M O R N I N G N E W S P A P E R S ,
Friday, Fe b r u a r y 26, 1943.
2-25-43
Cambridge,
Massachusetts,
Press Release
No. 35-50
F e b r u a r y 25 -- Russia was able
to hol d i m p o r t a n t n o r t h e r n forts last a u t u m n p a r t l y b e c a u s e
T r e a s u r y p u r c h a s i n g of f i c e r s handled, l e n d - l e a s e r e q u i s i t i o n s
with unprecedented
speed,
P r o c u r e m e n t D i r e c t o r C l i f t o n E. Mack,
d e c l a r e d tonight.
A d d r e s s i n g a g r a d u a t e class in p u r c h a s i n g at H a r v a r d UniI , versity, Mr. M a c k said it was i m p e r a t i v e l a s t s u m m e r to get
q uantities o f m a t e r i a l w so v a r i e d that the y could serve as a
capsule^ r e c o r d of today*s c i v i l i z a t i o n ” to the R u s s i a n bases
before ice l o c k e d the c o n v o y routes f or the season.
[
I l l u s t r a t i n g the m e c h a n i c s o f G o v e r n m e n t b u y i n g u n d e r l end
lease, Mr. M a c k told h o w a large n u m b e r o f m e n and w o m e n in
W a s h i n g t o n wer e i n v o l v e d in the R u s s i a n operation, some of them
in im p o r t a n t p u r c h a s i n g capacities.
He e m p h a s i z e d the imp o r t a n c e of the service of p r o c u r e
m ent b y n a m i n g it one of the three prime f a c tors in w r e n c h i n g
V i c t o r y f rom global war.
He s a i d that m a n p o w e r and efficient
leadership, the o t h e r two primes, w e r e d e p e n d e n t u p o n supply-and that supply w a s v the r e s p o n s i b i l i t y of the service of p r o
curement •
I
’’M a g n i t u d e in p r o c u r e m e n t a s s i g n m e n t s has ceas e d to be
r e m a r k a b l e , ” he told the class, e x p l a i n i n g that T r e a s u r y p u r
chases of steel shapes and castings were m e a s u r e d in u n its
o f ten a m o u n t i n g to w h o l e freight trains.
L ast year, he said,
the P r o c u r e m e n t D i v i s i o n a c q u i r e d and m o v e d m o r e than eight
m i l l i o n tons o f steel -- nin e p e r c e n t of the n a t ional o u t p u t —
and it m a d e p u r c h a s e s of u s e d sa w m i l l s for India, tire r e t r e a d
ing m a c h i n e s for China, sewing m a c h i n e s for Iceland, arti f i c i a l
dentures for Great Britain,
’’A n d we m u s t expect r e q u i s i t i o n s for a r t i ficial limbs,
ever p a t h e t i c that s e e m s , ” he a d d e d grimly.
how
2
A n o t h e r i l l u s t r a t i o n of m a s s p u r c h a s i n g was r e v e a l e d w h e n
Mr. M a c k told the class that the T r e a s u r y P r o c u r e m e n t D i v i s i o n
has performed, at least six times, the f u n c t i o n of b u y i n g a big
industrial plant, taking it apart p i ece b y piece an d t r a n s p o r t
ing it to docks for shipment to the o t her side of the world.
He p o i n t e d out that this o p e r a t i o n i n v o l v e d the services of e n g i
neers and t e c h nicians and that the technical d i f f e r e n c e s e n
c o u n t e r e d in m a n u f a c t u r i n g o p e r a t i o n s between, for example, Russia
and the U n i t e d States, sometimes n e c e s s i t a t e the radio t r a n s m i s
sion of complete f a c t o r y p l ans to M o s c o w st that certain d i f f i
culties could be i r o n e d out.
He emphasized, however, that the c o o p e r a t i o n b e t w e e n f o r
eign p u r c h a s i n g m i s s i o n s in this c o u n t r y and G o v e r n m e n t p r o c u r e
m e n t services was of the h i g h e s t degree, and said that his
d i v i s i o n alone h a d a l r e a d y h a n d l e d a p p r o x i m a t e l y $ 2 , 0 0 0 , 0 0 0 , 0 0 0
w o r t h of l e n d - l e a s e r e q u i s i t i o n s s u b m i t t e d t h r o u g h F o r e i g n P u r
chasing C o m m i s s i o n s to the L e n d - L e a s e A d m i n i s t r a t i o n .
A l t h o u g h l e n d - l e a s e p r o c u r e m e n t is n o w the p a r a m o u n t job of
the T r e a s u r y - P r o c u r e m e n t D i v i sion, Mr. M a c k p o i n t e d out that the
p e a c e t i m e job of the D i v i s i o n i n c l u d e d r e g u l a r a nd continuous
pu r c h a s e of about 2 2 , 0 0 0 items u s e d b y two or m o r e g o v e r n m e n t a l
agencies.
W a r has a c c e l e r a t e d this operation, Mr. M ack said,
in e x p l a i n i n g the technical o p e r a t i o n s i n v o l v e d in e f f ecting
this type of p u r c hasing.
He told the class that the W a s h i n g t o n w a r e h o u s e of the
D i v i s i o n h a n d l e d f i f t e e n tons o f goods e v ery hour, and that
o t h e r w a r e h o u s e s w e r e m a i n t a i n e d in field cities,
"Gov e r n m e n t p r o c u r e m e n t is n o w at q u i c k - s t e p , " he said,
"Spe e d of d e l i v e r y is the first essential in all w a r p r o c u r e
ment, and red tape is a m a t t e r of h i s t o r y . "
He con c l u d e d b y
p o i n t i n g out that the service of p r o c u r e m e n t o r i g i n a t e d on the
home front, and that it m u s t be s u p p l e m e n t e d b y the efforts of
every one of the m i l l i o n s o f m e n a n d w o m e n n ot in uniform.
-oOo-
3 4,r - ^
S i l e r - draft of S u n d a y r e l ease
FO R RELEASE,
Sunday,
MORNING NEW SPAPERS
F e b r u a r y 28,
1943
Income t a x matters
G 0lurnbia
broadcasting
w i l l be
d i s c u s s e d over the
system at 10:50 P.M.
M a r c h 2, w i t h Se n a t o r A r t h u r H.
Tuesday,
V a n d e n b e r g of Michigan,
R e p r e s e n t a t i v e H a r o l d K n u t s o n of n ^ o h i g a n , an d A s s i s t a n t
A
S e c r e t a r y of the T r e a s u r y J o h n L .vS u l l i v a n p a r t i c i p a t i n g .
S e n a t o r V a iidenberg is
R e p u b l i c an memb e r
of
the Senate Finance Co m m i t t e e a n d R e p r e s e n t a t i v e ICn u t s o n
one of the seni o r R e p u b l i c a n m e m bers
Means C o m m ittee.
These two c o m m i t t e e s deal w i t h all tax
f i ling r e t u r n s
on 1942
1 ^ g rr r H n >Tfi gf
n r o ^ n s rl s
~
/
/
of t he H o u s e W a y s
incomes not later
_¿rTfior^-refin t o
i*n^orr[V-' cayc raw s an cl c(
- o -
than M ar c h li
r a v l B ft-tji
is
and
/
TREASURY DEPARTMENT
Washington
Press Service
No, 35-51
FOR RELEASE, M O R N I N G NEWS P A P E R S ,
Sunday, F e b r u a r y 28, 1 9 4 5 . ______
2-26-43
Income tax m a t t e r s will- be d i s c u s s e d o v e r the C o l u m b i a
B r o a d c a s t i n g S y s t e m at 1 0 :30 P.M.
Tuesday,
S e n a t o r A r t h u r H, V a n d e n b e r g o f Michigan,
H a r o l d K n u t s o n of
T r e a s u r y John L,
M a r c h 2, w i t h
Re p r e s e n t a t i v e
Minnesota, and A s s i s t a n t S e c r e t a r y of the
Sullivan participating.
S e n a t o r V a n d e n b e r g is r a n k i n g R e p u b l i c a n m e m b e r of
the Senate
Finance C o m m i t t e e
and R e p r e s e n t a t i v e K n u t s o n is
one of the senior R e p u b l i c a n m e m b e r s of the H o use Ways
M e a n s C ommittee.
legislation
The
T h ese
two c o m m ittees
deal w i t h all
tax
in Congress.
three •speakers will
filing returns on 1942
emp h a s i z e
the n e c e s s i t y of
incomes n ot l a t e r than M a r c h 15.
-oOo-
and
/ Aju»—
«
y
I 0
The B u r e a u of the M i n t
T r e a s u r e r of the U n i t e d States
p e nny made of z i n c - c o a t e d
today d e l i v e r e d to the
first supplies of the new wartime
steel.
T h e coins w ill go into c i r c u l a t i o n throughout the
c o u n t r y as b a nks r e q u i s i t i o n supplies
Re s e r v e
t h r ough the Federal
System.
Mrs.
the new coin,
N e llie T a y l o e Ross,
D i r e c t o r of the Mint,
said
j
d e v e l o p e d by M i n t c4ieml™sl-Vj 'will save moingteiatts
of copper for w a r use.
Last year,
coinage of the one-cent
piece requi r e d 4 , 6 0 0 tons of crpper.
Th e w a r t i m e penny,
authorized
bears the f a m iliar L i n c o l n design.
copper cent,
by the last Congress,
It is the
same size as the
but is slightly li g h t e r in weight.
Newly struck,
it has a s i l v e r y a p p e a r a n c e no t u n l i k e that of a dime,
but the
cent - p i e c e d a r k e n s q u i c k l y w i t h handling.
The
penny is stamped fro m
stt/Sekr steel strips that have
bee n given "ajf jaacfcrrosly thin c o a t i n g of zinc
• Mrs.
Ros s
to prevent rust.
said the p r e v a i l i n g copper piece now
—
—.
in u s e w o u l d r e main in circulation,
but that no m ore would
be s t r u c k during the shortage of str a t e g i c materials.
o &&
TREASURY DEPARTMENT
Washington
FOR IMMEDIATE RELEASE,
Saturday, February 27, 1945.
Press Sonvic©
No. 35-52
The Bureau of the Mint today delivered to the Treasurer
of the United States first supplies of the new wartime penny
made of zinc-coated steel.
The coins will go into■circulation throughout the country
as banks requisition supplies through the Federal Reserve
System.
Mrs. Nellie Tayloe Ross, Director of the Mint, said the
new coin, developed by Mint metallurgists, will save large
amounts of copper for war use.
Last year, coinage of the one-
cent piece required 4,600 tons of copper.
The wartime penny, authorized by the last Congress, bears
the familiar Lincoln design.
It is the same size as the copper
cent, but is slightly lighter in weight.
Newly struck, it has
a silvery appearance not unlike that of a dime, but the centpiece darkens quickly W&th handling.
The penny is stamped from steel strips that have been
given a thin coating of zinc to prevent rust.
Mrs. Ross said the prevailing copper piece now in use would
remain in circulation, but that no more would be struck during
the shortage of strategic materials.
-oOo-
I
TREASURY DEPARTMENT
Washington
(The following address by Randolph E. Paul, General
Counsel for the.Treasury, before the Economic Club
Detroit, Michigan, is scheduled for delivery at
12 o*clock noon. Eastern War Time, Monday, March 1,
1943, and is for release at that time.)
1943 TAX PROBLEMS
1
your President has invited me to discuss with you some of the tax problems
jjr facing our country in 1943? I accepted your invitation with genuine pleasure,
| considering it a privilege to join the distinguished list of speakers from our
I own country and from abroad who have participated in your civic luncheons*
War expenditures have now reached the rate of $6 l/2/billion a month. In
the coming fiscal year they are scheduled to average more than $8 billion a
I month* In the fiscal year 1944 the Federal Government is'expected to spend more
I than $100 billion, Tax collections under existing legislation will cover a third
of the^bill, The record level of individual and business incomes and the high tax
| raies imposed by the Revenue Act of 1942 will combine to produce an estimated $35
billion tax yield. Without further tax legislation— indeed, even with any conI templated tax legislation---the Government will have to borrow large sums from
individuals, banks, and other institutions to pay next yearns war bills* Without
| additional taxes, the public debt is expected to reach $210 billion by
P June 30, 1944?
1 ^
This is one aspect of our 1943 tax problems# Another is the threat of
■ inflation* You in Detroit know that America is shattering production records on
I all^sides. Our efforts, however,are directed primarily toward the production
I of instruments of war* Only about 40% of our men and machines are employed in
I making goods for civilians. This means that every dollar of income earned in
I American production today is matched by only about 40 cents worth of goods which
I these incomes can buy? The other 60 cents <is represented by guns, ships, and
I airplanes. Less than half of our total production is going to market; more than
I half is going to ?rari
I
The result is a curious economic paradox, America’s income is at record
I levels; at the same time the supply of civilian goods is dwindling. Too much
I money is competing for too few goods* Our pocketbooks are "all dressed up with
I no place to go," part of the surplus income is finding its ?<ray into war bonds,
debt reduction, life insurance and other forms of personal savings. However, a
I part of it— an uncomfortably large part of it— threatens our price structure; it
1 threatens us with inflation,
I
It would be carrying coals to Newcastle to come here to tell you that it is
important to avert inflation, I am sure that all of you share the president’s
I v^ew that the fight against inflation is a vital part of winning the war? You
Iknow that, aside from creating ruinous rises in the cost of living, inflation will
I increase the cost of the war, that it will raise the public debt, and that it will
I intensify the Government’s revenue needs, By distorting the whole price structure
I it will lead to waste and indiscriminate production, Bpeculation-minded business-*
I men will divert their interests from productive efforts to the money-making
1 35-53
-
2
-
possibilities afforded by price fluctuations and price disparities.
crack the war efiort on a broad front.
This will
P?;ay a" imP°rtant role in averting inflation by reducing the amount
of money people have to spend. It is one function of wartime taxation to drain
off the excess purchasing power which pushes up the price level. In this v.av
taxes reinforce the more direct inflation controls, such as price ceilings and
| |an scar?elysucceedIlth°Ut *** ^
°f additional taxeE> theEE direct controls
ftionalh« A rMT'?rt'SrBUd?®t “?ssage oalls for tax legislation to produce an addiI h
collections during the coming fiscal year. Added to the
}35 billion which it is estimated will be collected under the existing tax svstem
j a amount would mean annual collections of about $50 billion— almost enough to ’
cover half of our anticipated 1944 expenditures.
m
t. +The taEk oonfronting
the tax system is without
ill of necessity have to
he more complex because,
Congress in adding $16 billion to the annual yield of
precedent here or abroad. Some of the added revenue
come from the individual income tax. The problem is-all
in order that the individual income tax may do a bigger
£pioved foTit.sdc o l f "e-’ ^
[employed for its collection.
T
n0t ^ erative> to alter s u b s t a n t i a l l y ^ methods
I refer to pay-as-you-go taxation.
pay-as-you-go taxation
L
h^S^b!en aP P ^ n t ^ r a long time that the individual income tax should
aeTtVhe bulk of ? T aS-y°U-?° b?Sis’ Before
income tax can successfully
reach the bulk of income receivers, we have to make it possible for taxpayers to
|p y their taxes weekly or monthly as they receive their income, and not in quarttheir
!ieh incorae-ta5c rates taxpayers should be able to pay
M L
i8 es currently m the year they receive income and not a year later. These
n^eas have long been recognized by the Treasury and Congress. list year the
Treasury proposed that Congress place most of the incomf tax on a pay!as-you g3
basis for the vast maj.rity of taxpayers. .
P 7
7
g*
IDeri o ritur 18 Priroari,
ly 3 nation of wage earners who receive their income
perioificaHy— every week, every two-weeks, or every month. The most direct method
thePin7aS~y+U-gt t!-xaticn for thiE
is collection at the source. It enables
the income tax to be paid currently, week-by-week and month-by-month as the oav
envelope is handed to the worker. This is ihe method adopted by toe’C ongiess^Lt
y =.r in connection with the new Victory tax. It is the method the Treasury wants
to see extended to the individual income tax.
m ~ s u r y wants
)
3 ~
I
ram L PSk tk e <lu e stio n ?
^0t start the system by collecting 19 Ì+3 taxes
xn 19^3? This would mean that in I9 U3 we would pay taxes on 19 I+3 income and also
taxes on 19^2 income. This we might do without difficulty if rates were lower
than t ey are. Indeed, our pressing revenue necessities are a strong argument for
d^ing so
However, it must be recognized that many of our taxpayers failed to
accumulate funds out of 19 I+2 income for the payment of tax on that income. The
level of r^tes is such that considera,ble hardship might result from paying in
i full'
I f years« taxes out of I9 U3 income, particularly in the case of tta* taxpaj
yers'
whose incomes will have declined in I9 U3 ,
One plausible solution that has been offered is to forgive taxes on igl+2 inijE*. Why
be bygones, it is argued, and forget about taxes on
19 2 incomer Since in 19^3 a* individual will be paying a tax on his 1 9 U3 in
come, why require him to pay a tax as well on his I9 U2 income? Why not skip a
years taxes?
■■
*
This solution has deceptive appeal. Most of us are naturally pleased at the
prospect ^'f escaping tax on one year’s income and are not inclined to look a gift
horse in the mouth. The appeal is deceptive because over a period of years the
Government has to raise a given amount of taxes; either the same people will have
|§ pay the same amounts despite the forgiveness or the forgiveness will reouire
f that some pay more and others pay less,
|jg
x
|l I j l
V f ar,s tHXes in Siting to a pay-as-you-go system, the economic
f status f individual taxpayers will be affected in different ways, The amount of
taxes canceiled represents an immediate addition to the taxpayer’s wealth. This
addition, which would depend on his income in 1 9 >+2 , varies widely from individual
o individual,^ Cancellation would not improve the position of the individual who
had no income in 19*+2 and was not subject to tax. A married verson without
dependents with a net income of $ 2,000 would gain $lHo if the* entire tax w e can«
ceiled. If he had a net income of $100,000, he would gain $6 U,000, If he had a
net income of $1 ,000 ,000 , he would gain $850 ,000 .
Cancel lation would also affect the individual’s economic status as measured
by the inco me he has.^ left after taxes. This is the amount he may spend or save
each year, Tor the individual with $2,000 income the forgiven tax would be the
equivalent of less than one month's income. Per the individual with a $100,000
¡income, the forgiven tax would be the equivalent of almost two years’ income after
taxes. In the case of a million dollar income, the forgiveness of a'year’s taxes
would add tn tY}G taxpayer’s wealth at one stroke as much as he could'add in nearly
b years by
saving every dollar he had left after paying taxes apd spending nothing.
I
Is it reasonable to suppose that certain individuals can gain while nobody
gooses? That this cannot be so can be seen by turning to the question of how we
~ 4 ~
,c,an get the additional revenue that -we so badly need, if we cancel 1942 taxes. We
But, it may be asked, what
j||difference does it make whether we raise additional revenue by collecting the taxes
■we have already imposed or by cancelling these taxes and imposing others?
I f . , . will, of course, have to raise income tax rates.
There are two important ways in which our choice of method will affect the
|| distribution of the tax burden. In the first place, if we cancel 1942 taxes, the
|i additional revenue will be raised solely on the basis of the incomes of 1943 and
|| subsequent years without regard at all to the 1942 income. Those who had substan... tial income in 1942, but who receive little or no income in 1943 and subsequent
jt years, vdll contribute much less to the war costs than those whose position is re—
. versed. In the second place, and more important, rates on the higher incomes are
ji..already so high that they can scarcely be increased sufficiently to make up for the
amount of 1942 taxes forgiven. The greater part of any increase in tax rates will
i!| have to fall on taxpayers in the low and middle income groups. It is not difficult
|j: to recover the taxes forgiven at the bottom, but it is practically impossible to
|| recover from the top incomes the amounts they would be forgiven.
II
I
Jl
j.
These are the reasons why the Treasury cannot recommend the complete cancellation of taxes on 1942 incomes. It is unable to support a device which, as a price
for securing pay-as-you-go taxation, would so inequitably alter the distribution of
i/var costs among American people. We can shift to pay-as-you-go taxation without
complete cancellation of 1942 taxes.
k
Partial cancellation of 1942 taxes involves different consideration. If such
partial cancellation distributes benefits to substantially all taxpayers and dis
tributes those benefits equitably among different taxpayers, the cancelled taxes
j| could be replaced without an appreciable shift in the distribution of the war tax
burden. Those who receive the benefits could by and large be called upon to pay
j, the corresponding costs*
Business taxes
Before 1943 is too far advanced, the Congress will have to decide how much,
if any, of the additional $L6 billion revenue for fiscal year 1944 is to come from
1 corporations. . The decision will be based on the reasonableness of the burden of
I the present corporation tax structure. Corporate taxes are expected to yield $10
I billion this fiscal year and $15 billion in the next.
There are a' number of persuasive reasons why we make extensive use of
I corporation taxes in this war.
We initiated the defense program with a tax structure which depended on corpo—
j rations for a large part of its revenue. I believe you wall agree that in a fis( cal emergency we must not only look for new revenue sources, but vigorously exploit
I existing sources as well. The huge volume of corporation profits are an obvious
„
t: _
source of revenue.
Failure to tax them at wartime rates might result in their
escape from a fair share of the war burden*
Another reason for the use of corporation taxes at the present time is that
the majority of people consider excessive profits to be objectionable in time of
war. They consider it unfair to exact heavy sacrifices from some groups vdthout
imposing commensurate burdens on corporations. Indeed, all groups m i l make a
full contribution to the war effort only if they arc assured that ,other groups
arc bearing a fair share of the burden*
Some corporations must be shut down during the war* In fairness to them,
corporations fortunate enough to remain in profitable operation during the war
should bear additional tax burdens* without additional corporation taxes on
surviving firms it would be *hard to justify the sacrifice of the closed firms*
They may lose their markets, productive organization, capital-«*much greater
sacrifices than additional taxation of profits can impose* This regrettable
result is dictated by the necessities of securing maximum war production* Taxa
tion cannot prevent shutdowns but it can in some measure equalize this war
burden*
Although war has made these considerations of overwhelming importance, the
| Treasury has not been unmindful of the crudities of the corporation income tax.
The income of a corporation is only a rough measure of the taxpaying, ability of
the individual stockholder* Consequently, the corporation income tax inevitably
| burdens some stockholders more heavily than others. It exacts the'same amount
of taxation* from the -dollar of profits allocable to Ifr. Jones with an income of
only 1,000, as from till dollar allocable to Ur* Smith with an income of §100,000*
Alien the corporation income tax was first adopted, it m s regarded primarily
as a prior collection of the personal income tax on stockholders, and was levied
at the same rates as the personal income tax* But as revenue needs increased after
the first Acrid ’Tar, more and more reliance was placed on the corporation income
tax.’ You probably remember that Congress attempted to arrest this development in
1936, by passing an undistributed-profits tax which tried to look through the
corporation to the taxpaying ability of the stockholder. The experiment proved
unpopular and the undistributed-profits tax was abolished in 1939*
The corporation income tax is by its very nature a blunt tax instrument.
However, -it can be sharpened and refined* itefinement becomes a necessity when
raies arc raised to the levels they have been during this war* The ucvenue Act
of 1942 was a sharpening tool. It makes possible much greater precision in
corporation taxation. The two-pear carry-back of losses is a case in point*
Many corporations are currently being taxed on nomai and excess profits which
- 6 -
in th e p o s t -w a r p e r io d m a y b e w ip e d o u t b y l o s s e s .
The tw o -y e a r c a r r y -b a c k o f
lo s s e s p e r m it s c o r p o r a t i o n s w i t h l o s s e s t o o f f s e t th e m a g a i n s t in c o m e e a r n e d i n
p r o f i t a b l e y e a r ’s . T h i s a d j u s t m e n t s h o u l d b e o f g r e a t b e n e f i t t o c o r p o r a t i o n s
w ith h i g h l y f l u c t u a t i n g in c o m e s .
I n e q u it ie s a ls o a r is e in th e c a s e o f c o r p o r a tio n s w h ic h e a r n m o re th a n
n orm al p r o f i t s o n e y e a r , b u t lo s s th a n n o r m a l p r o f i t s a n o t h e r . I n a y e a r o f
h ig h p r o f i t s , p a r t ' o f th e m m a y b e t a x e d a t h i g h r a t e s . Y e t i f t h e s e v e r a l y e a r s
w ere ta k e n t o g e t h e r , n o e x c e s s iv e p r o f i t s w o u ld b e sh o w n . I n f a i r n e s s , c o r
p o r a tio n s s h o u ld b e a llo w e d to o f f s e t th e e x c e s s p r o f i t s ox o n e y e a r a g a in s t th e
su bn orm al p r o f it s o f a n o th e r . To a c h ie v e t h is r e s u lt th e R even u e. A c t o f 19 4 2
a llo w s th e u n u s e d e x c e s s - p r o f it s c r e d i t t o b e c a r r ie d b a c k t o th e tw o p r e v io u s
pears.
S t i l l o th e r
fo u n d i n t h e 1 9 4 2
c o r p o r a t io n in c o m
80 p e r c e n t . T h is
w ill n o t h a ve a l l
b u ild u p r e s e r v e s
m ean s o f e lim in a tin g in e q u it ie s an d p r o v id in g r
A c t . T h e h ig h e s t o v e r a l l r a t e w h ic h c a n b e a p
e ( b e fo r e a llo w a n c e f o r th e p o s t-w a r r e fu n d ) i s
m e a n s t h a t t h e p r o w in ;, c o r p o r a t i o n w i t h la r g e
o f t h i s in c o m e t a k e n a w a y b y w a r tim e t a x e s . I
fo r th e p o s t-w a r p e r io d .
S im ila r c o n s id e r a tio n s m o tiv a te d th e
p r o fits ta x e s fo r r e fu n d s in th e p o s t-w a r
O th e r m e a s u r e s c o n t a in e d i n t h e 1 9 4 2 R e t
p r o fits a s i f th e y w ere e x c e s s iv e p r o f it s
e lie f can be
p lie d to a l l
now lim ite d to
e x ce ss p r o fits
t w i l l b e a b le to
e a r m a r k in g o f 1 0 p e r c e n t o f e x c e s s
p e r io d o r f o r c u r r e n t d e b t r e p a y m e n t.
g u a rd a g a in s t -th e ta x a tio n o f n o rm a l
.
In s p it e o f th e s e r e fin e m e n ts a n d th e G o v e r n m e n trs r e v e n u e n e e d s , th e c o r p o r a
tio n t a x c o u ld h a r d l y b e j u s t i f i e d i f i t im p e d e d t h e w a r e f f o r t .
I am t h in k in g
now o f i t s e f f e c t s u p o n t h e e f f i c i e n c y w i t h w h ic h g o o d s a r e p r o d u c e d , t h e i r c o s t s
an d t h e i r p r i c e s . I am t h i n k i n g a l s o o f t h e v o lu m e o f p r o d u c t io n d u r in g t h e w a r
and th e a b i l i t y o f c o n c e r n s t o r e .c o n v e r t a f t e r th e w a r . p u c h h a s b e e n s a id a n d
w i t t e n a b o u t t h e 5 h a r m fu l e f f e c t s o f c o r p o r a tio n t a x e s . I t w o u ld , in d e e d , b e a
s e r io u s in d ic tm e n t o f o u r t a x s t r u c t u r e i f i t h in d e r e d o u r a l 1 - o u t w ar o f f a r t .
O ne im p o r ta n t c o n s id e r a t io n i s th e e f f e c t o f w a r tim e c o r p o r a t io n t a x e s o n
p r o d u c tiv e e f f i c i e n c y . Y o u h a v e a l l h e a r d m a n y tim e s th e a r g u m e n t t h a t h ig h
ta x r a t e s r e s u lt in h ig h p r o d u c tio n c o s t s .
I t is .p o in te d o u t th a t c o rp o r a te
m anagem ent h a s l i t t l e in c e n tiv e to c u t dow n w a s te fu l e x p e n d itu r e s ; an d th a t i t h a s
l i t t l e i n c e n t i v e to . o p p o s e w a g e i n c r e a s e s o r i n c r e a s e s i n t h e p r i c e s o f m a t e r i a l s ,
w hen ta x r a te s a r e h ig h , th e s e c o s t in c r e a s e s r e d u c e p r o f it s so l i t t l e th a t n o t
m uch e f f o r t i s m a d e t o k e e p th e m d o w n . I t i s a l s o s a i d t h a t h ig h t a x r a t e s d e t e r
th e i n t r o d u c t i o n o f n e w , m o re e f f i c i e n t t e c h n i q u e s .
I n m y. o p in io n , t h e s e v ie w s r e s t o n t h e a s s u m p t io n t h a t e v e n i n w a r tim e
c o r p o r a t e m a n a g e m e n t i s 'm o t iv a t e d e x c l u s i v e l y b y p r o f i t c o n s i d e r a t i o n s . I , f o r
- 7 one, am unprepared to accept the assumption# The business community is fully aware
that its responsibilities are heavy and its obligations largej it also knows that
its own fortunes are at stake in the war'■effort* It is determined to produce the
maximum amount of war goods with the minimum use of labor and other scarce re
sources* It has demonstrated that in furthering the war effort now and more
efficient methods of production are introduced as rapidly a*s they can be perfected#
Furthermore, I am sure that the business community is not as short-sighted
as those arguments would imply* Far-sighted business management is looking to the
list-war period* It is not smart business.to enter the post-war period with dis
torted wage structures and inefficient production methods* It will then be
necessary to compete not only for American markets, but also for ro—opened world
markets *
Looking at the matter from another viewpoint, corporation taxes tend to re
duce demands for wage increases# If corporation taxes did not recapture most of
the excess profits effective arguments could be made for high wages* The reduc
tion in these profits by wartime taxes almost certainly reduces the pressure for
higher wages. Moreover in time of war the Government itself takes a"strong hand
in the regulation of wages and in maintaining the efficiency of firms. The
Presidential Order stabilizing wages has certainly reduced the danger of an
inflated wage structure both during the war and in the post-war period.
Those factors are of great Importance. They warrant the conclusion
that our present tax rates are not proving a significant factor in encouraging
inefficient and high-cost operation*
Another broad basis on which to judge
upon the prices of goods and services*
taxes may simply be translated into higher
suppliesZ It has been argued by some that
taxes# These views should be subjected to
a wartime tax structure is its effect
it not possible that high corporation
prices both of consumers* goods and war
this, too, is the effect of corporation
the cynical test of distrust#
The Government, through its wartime regulatory powers, controls directly or
indirectly the prices of almost all goods produced in the economy# As a direct
buyer, it regulates the price of military supplies. The Office of Price
Administration regulates prices of consumers* goods and services* ■It is fair to
ask whether those Government agencies allow high wartime corporation taxes to be
passed on through higher prices*
\
r\
B e th th e m ilit a r y e s ta b lis h
I c le a r ly s ta te d th e ir p o s itio n .
I r e a s o n a b le p r i c e s a r e p r o f i t s b
■ to p r e s c r ib e w h a t c o n s t i t u t e s a
m ent
They
e fo re
reaso
an d th e O ffic e
h o ld t h a t f a i r
and n o t a fte r ,
n a b le p r e -fit a
o f P r ic e a d m in is tr a tio n h a ve
p r o f i t s u s e d in d e te r m in in g ' •
ta x e s . I t is fo r C on gress
fte r ta x e s .
T h e s e c e nsideration s Suggest that high wartime taxes d o not produce subspan—
t i a l p f ic o in c r e a s e s | H o w e v e r , I w o u ld l i k e t o h e d g e t h a t s ta te m e n t a l i t t l e 4
T h ose w h o r e g u l a t e p r i c e s a r e a w a r e t h a t w a r tim e t a x e s m i l r e c a p t u r e m o s t o f a n y
e x c e s s i v e p r o f i t s t h e y m a y a l l d w . T h e i r r e g u l a t i o n o f p r i c e s may .bo Somewhat m o r e
l a x than i f w c h a d n o w a r t i m e c o r p o r a t i o n t a x e s i
T o t h i s o i r b o n t p r i c e s may b e
Ih ig h e r a s a r e s u l t o x . c o r p o r a t i o n t a x e s .
I
■
■
I
In
I v o lu m e
Il a r g e ,
¡p u t. I
I e ffe c ts
w a r tim e , c o r p o r a tio n ta x e s m u st a ls o b
ox' p r o d u c tio n s A s I have- a lr e a d y s a i d ,
i s a t tn c p r e s e n t tim e m o tiv a te d b y th e
h a v e s e e n l i t t l e e v id e n c e t h a t w a r tim e
on p r o d u c tio n *
e .ju d g e d b y t h e ir e
th e b u s in e s s co m m
d e s ir e to p ro d u ce
c o r p o r a tio n ta x e s
ffe c t on
u n ity , b y
t h e m a x im
have had
th e
and
um o u t—
ad verse
f i n a l l y , w a x " tim e c o r p o r a t i o n in c o m e t a x e s m u s t b e j u d g e d i n t h e l i g h t o f
! th e ir e f f e c t o n th e a b i l i t y o f c o r p o r a tio n s t o c h a n g e o v e r to p e a c e tim e c o n d it io n s *
J in la r g e p a r t t h i s w i l l d e p e n d o n t h e i r w o r k in g — c a p it r .1 p o s i t i o n a n d th e r e s e r v e s
I b u ilt u p b y c o r p o r a tio n s in w ar y e a r s . I f n e t p r o f it s a f t e r ta x e s a r e a n y c r it e
r io n , th e a b i l i t y o f c o r p o r a tio n s g e n e r a lly t o r e c o n v e r t i s n o t b e in g s e r io u s ly
» i m p a i r e d b y w a r t a x i n c r e a s e s . I t i s e s t i m a t e d t h a t '.' i n . 1 9 4 2 t o t a l c o r p o r a t e
I p r o f i t s a f t e r t a x e s w i l l b e ‘) 7 * 4 b i l l i o n , n e a r l y t w i c e a s h i g h (183%) a s t h e y w e r e
I in 1 9 3 9 * ln d '1 9 3 9 > y o u w i l l r e c a l l , w a s - n o t a n a b n o r m a l ly b a d - y e a r i N o t a l l c o r f p o ra t io n s a r e , ox c o u r s e , in t i ll s e n v ia b le p o s it io n . H o w e ve r, i f C o r p o r a tio n s
I c o n tin u e t o p u r s u e c o n s e r v a t i v e d iv id e n d p o l i c i e s , t h e s e p o l i c i e s c o m b in e d w i t h
Ith e c a r r y p b a c k p r o v i s i o n s a n d p o s t - w a r r e f u n d s s h o u ld , a f f o r d a m p le c u s h i o n t o m e e t
I p o s t-w a r t r a n s i t i o n a l p r o b le m s *
I h a v e t r ie d to s t a t e b r i e f l y som e o f th e m ore im p o r ta n t c o n s id e r a tio n s
¡w h ic h d e t e r m i n e t h e u s e . w c m a k e o f b u s i n e s s t a x e s i n m e e t i n g o u i* w a r t i m e r e v e n u e
¡n e e d s , f o r th e d u r a tio n th e C o n g r e s s h a s n o c h o ic e b u t t o k e e p th e c o r p o r a tio n
¡ta x e s a t a l e v e l ju s t s h o r t o f d o in g in ju s t ic e an d im p a ir in g th e w a r e f f o r t .
¡L o o k in g f o r w a r d t o t h e y e a r s a f t e r t h e v :a r , I l i k e t o a n t i c i p a t e a c o m p le t e ,r e * Ia p p r a is a l o f th e r o le o f b u s in e s s ta x e s in o u r r e v e n u e s y s te m . T h e o b je c t iv e s
[o f s u c h a r e a p p r a is a l m ig h t w e l l b e b e t t e r in t e g r a t io n o f b u s in e s s t a x e s a n d
[ p e r s o n a l in c o m e t a x e s a n d i n c r e a s e d
s c o p e .fo r i n d i v i d u a l i n i t i a t i v e ; a n d b u s i n e s s
[e ffic ie n c y .
*
TREASURY DEPARTMENT
Washington
FOR RELEASE, MORNING NEWSPAPERS
Tuesday. March 2. 1943.________
Service
j
r^4i
The Secretary of the Treasury announced last evening that the tenders for #700,000,0
or thereabouts, of 91-day Treasury bills to be dated March 3 and to nature June 2, 1943,
which were offered on February 26, 1943# were opened at the Federal Reserve Banks on
March 1.
The details of this issue are as follows 1
Total applied for - 61,394,541,000
Total accepted
701,274,000
Range of accepted bides
Hish
Loi
Average price
- 99*930 Equivalent rate of discount approx. 0.277$ P*r annua
- 99.905
■
e
«
«
«
0.376$
■
■
- 99.907
*
.
.
.
"
0.369* *
"
(12 percent of the amount bid for at the
law
prioe was accepted.)
Federal Reserve
District
Total
Applied For
Total
Accepted
Boston
New York
Philadelphia
Cleveland
Richmond
Atlanta
Chieago
Ste Louis
Minneapolis
Kansas City
Dallas
San Francisco
I
t
TOTAL
44,370,000
815,555,000
33,555,000
30,109,000
18,784,000
18,160,000
196,306,000
146,209,000
6,905,000
26,738,000
9,995,000
47.855,000
H , 394,541,000
28,821,000
233,557,000
24,268,000
24,389,000
16,606,000
12,824,000
14 9 ,251,000
130,977,000
6,653,000
21,640,000
9,343,000
42.945.000
1701,274,000
TREASURY DEPARTMENT
Washington
FOR RELEASE, M O R N I N G NEWS P A P E R S ,
Tuesday, M a r c h 2, 1943.
_
3-1-43
Press Service
No. 35-54
The S e c r e t a r y of the T r e a s u r y a n n o u n c e d last evening that
the tenders fo r $7 0 0 , 0 0 0 , 0 0 0 ,
bills
or thereabouts,
to be dated M a r c h 3 and to m a t u r e
offered on F e b r u a r y 26, 1943,
of 9 1 -day
June 2, 1943,
lreasury
w h i c h were
w ere o p e n e d at the Federal Reserve
Banks on M a r c h 1.
The details
Total
Total
of this issue are as follows:
ap p l i e d for - $ 1 , 3 9 4 , 5 4 1 , 0 0 0
accepted
701,274,000
Range of a c c e p t e d bids:
High
- 9 9 . 9 3 0 E q u i v a l e n t rate of d i s count approx.
per annum
Low
- 99.9 0 5 E q u i v a l e n t rate of d i s c o u n t approx.
per annum
A v e rage - 99.907 E q u i v a l e n t rate of di s c o u n t approx.
price
p er a n n u m
0.277$
>
0.376%
0,369%
b i d for at the low price was accepted.)
(12 p e r cent of the a
Federal Reserve
District
Total
A p p l i e d For
Total
A c c e p t e d _____
Boston
New Y o r k
Phil a d e l p h i a
Cleveland
Richmond
Atlanta
Chicago
St. Louis
Minn e a p o l i s
Kansas City
Dallas
San F r a ncisco
$
44,370,000
815.555.000
33.555.000
30.109.000
18.784.000
18.160.000
196.306.000
146.209.000
6 . 9 0 5.000
26.738.000
9.995.000
47.855.000
$ 28, 8 2 1 , 0 0 0
233. 5 5 7 . 0 0 0
2 4.268.000
24. 3 8 9 . 0 0 0
16. 6 0 6 . 0 0 0
12. 8 2 4 . 0 0 0
149.251.000
130.977.000
6.653.000
2 1.640.000
9.343.000
42.945.000
$1,394,541,000
$701,274,000
TOTAL
-oOo-
TREASURY DEPARTMENT
W a s h i n g ton
(The fol l o w i n g income t a x d i s c u s s i o n b y Assistant
S e c r e t a r y of the T r e a s u r y J o h n L. Sullivan, Cong r e s s m a n
Harold
K n u t s o n ^ o f Minnesota, m e m b e r of the House Ways
and Means Committee, a n d ' S e n a t o r A r t h u r H . V a n d e n b e r g ^
of Michigan, m e m b e r of the Senate Fi n a n c e Committee,
is s c h e d u l e d to b e b r o a d c a s t o v e r the Columbia.
B r o a d c a s t i n g S y s t e m n e t w o r k at 1 0 : 5 0 P .H. E a s t e r n
W
ss day, M a r c h i ,
t
2
A b r o t h e r of the n e w A s s i s t a n t to
Robbins,
Mr.
the Secretary,
is v i c e p r e s i d e n t o f t h e Y o u n g s t o w n S t e e l D o o r Company.
Robbins*
father,
t h e l a t e E d w a r d E.
in Congress duri n g the First W o r l d War,
that b o d y at the time
Robbins,
c^
J-
E d w a r d E.
Sr. h a s
and was
of h i s d e a t h i n 1918.
continued h e r residence
Robbins,
served
a m e m b e r of
Mrs.
E d w a r d E.
in Washington.
W.
as
M.
Robbins,
appointed today by Secretary Morgenthau
c h a i r m a n o f t h e U n i t e d S t a t e s T r e a s u r y W a r F i n a n c e Committee,
is a s p e c i a l i s t i n m a s s
sales and d i s t r ibution methods*
He has b e e n a s s o c i a t e d w i t h the General
f o r n e a r l y 20 years,
is n o w v i c e p r e s i d e n t
He will be
a s s i s t i n g the T r e a s u r y
Mr*
Robbins has
on leave
i n i ts
from his
securities
f o r the p ast
Corporation
of that organization
a n d p r e s i d e n t o f its d i s t r i b u t i o n subsidiary,
Sales Company.
Foods
t h e G e n e r a l llbods
company while
sales program*
eighteen months
served in
v a r ious a d v i s o r y cap a c i t i e s w i t h the W a r P r o d u c t i o n Board.
He left
a p o s i t i o n as a c t i n g D e p u t y D i r e c t o r G e n e r a l
Operations
served
of WPB
to
c o m e to t h e T r e a s u r y ,
f o r Staff
w h i c h h e a l r e a d y has
s i n c e l a s t N o v e m b e r as a m e m b e r o f a c o m m i t t e e
consulting
w i t h the S e c r e t a r y o n securities m a r k e t i n g *
Mr.
Robbins will have
the
title
of Assistant
to t h e Secretary
o f the T r e a s u r y *
M r.
Robbins was b o m
He a t t e n d e d Hill
University,
School
where he was
in 1901,
at G r e e n b u r g ,
at Pottstown,
staff of
the
and Yale
He
and expansions
degree
j o i n e d the
this
company
l a t e r b e c o m i n g t h e General
Corporation.
M r.
home
in 1 9 2 4 .
Postum Company upo n graduation,
through various mergers
Foods
Pennsylvania,
awarded a Bachelor of Science
f r o m the S h e f f i e l d S c i e n t i f i c School
sales
Pennsylvania*
Robbins
is m a r r i e d a n d h a s
is a t G r e e n w i c h ,
the S h o r e h a m H o t e l
Connecticut.
four children.
The
family
I n W a s h i n g t o n h e l i v e s at
to fee
-
4
-
In announcing the new sales organization
Secretary Morgenthau said:
¿4
- 3 responsibility in their respective districts to
direct the drive.
The National Director of Sales is authorized
to deal directly with the Federal Reserve Banks
as Fiscal Agents of the United States in all mat
ters relating to the promotion and sale of Gov
ernment securities, and in this connection he has
■ authority to utilize all the facilities of the
War Savings Staff and the Victory Fund Committee,
coordinating their respective activities as he
may direct.
// A11 publicity, will be enlisted in the Joint
endeavor, and will include wherever possible the
continuous promotion activities of the War Savings
Staff.
Every function of the two organizations*will
be integrated in every productive way in prepar
ation for and during the April campaign.
The
entire basket of Treasury securities, including
E bonds, will be
part in the drive.
all forces taking
-
Fund Committee.
2
-
Additional members of the Com
mittee may be announced later by Secretary Morgenthau.
The new organization is being set up as the
Treasury prepares for its second big War financing
drive, to begin April 12.
Presidents of the Federal Reserve Banks have
been asked to serve as chairmen of district com
mittees to be organized on lines similar to the
War Finance Committee.
These district committees
will include representatives of the War Savings
Staff in each State and of the Victory Fund Com
mittee.
The Committee in Washington will act in an
advisory capacity to the National Director in the
formulation and execution of plans for sale of
Government securities, and the committees set up
in the Federal Reserve Districts will likewise
act in an advisory capacity to the Presidents of
the Federal Reserve Banks, who will act as chair
men of such committees, with full authority and\
f)
V\JU^o
~7u. S i r - y j~
/ f ¥ %t
Lb
Secretary Morgenthau today announced the
creation of a United States Treasury War Finance
Committee for overall direction of the Treasury’s
bond selling activities*
Designed to Integrate the work of the War
Savings Staff and the Victory Fund Committee in
the sale of all Government securities, the new
organization will be headed by W. M. Robbins who
is taking leave fj*o$ his duties
to ^SkS^a^ o a l U o n
s Assl-stant
to
the Secretary'*'
of the Treasury.
As chairman of the War Finance Committee,
Mr. Robbins will function with the operating
title of National Director of Sales.
He will re
port to the Secretary through the Under Secretary.
Other members of the Committee will be Harold N.
Graves, Assistant to the Secretary in charge of
the War Savings Staff, and George Buffington,
Assistant to the Secretary in charge of the Victory
TREASURY 03PARTMERT
W a sh in g to n
FOR R31EASS, MORNING NEWSPAPERS
W e d n e s d a y , March 3 , 1 9 4 3
Press Service
H o. P 5-55
Secretary Morgenthau today announced the creation of a United States
Treasury War Finance Committee for overall direction of the Treasury's
bond selling activities.
Designed to integrate the work of the War Savings Staff and the Victory
Fund Committee in the sale of all Government securities, the new organization
will be headed by W. If* Robbins who is taking leave from his duties as vice
president of General Foods Corporation, where he;has been responsible for
selling and marketing activities' to join the immediate staff of the Secretary
of the Treasury'.
As chairman of the War Finance Committee,, Mr. Robbins will function with
the operating title of National Director of Sales, He will report to the
Secretary through the Under Secretary. Other members of the Committee vdll
be Harold N. Graves, Assistant to the Secretary in charge of the war Savings
Staff, and George-Buffington, Assistant to the Secretary in charge of'the
Victory Fund Committee, Additional members of the Committee-may be announced
later by Secretary Morgenthau.
v
The new organization is being set up as the Treasury prepares for its
second big War financing drive, to begin April 12.
Presidents of the Federal Reserve Banks have been asked to serve as
chairmen of district committees to be organized on lines similar to the War
Finance Committee. Those district comraittoes will include representatives
of the War Savings Staff in each State and ,of the Victory Fund Committee,
The Committee in Washington will act in an advisory capacity to the
National Director in the formulation and execution of plans for sale of
Government securities, .end the committees set up in the Federal ReserveDistricts will likewise act in an advisor;/ capacity to the Presidents of
the Federal Reserve Banks, who will act as chairmen of such committees,
with full authority and responsibility in their respective districts to
direct the drive.
The National Director of Sales is authorized to deal directly with the
Federal Reserve Banks as Fiscal Agents of the United States in all matters
relating to the promotion and sale of Government securities, and in this
connection he has authority to utilize all the facilities of the War
Savings Staff and the Victory Fund Committee, coordinating their respective
activities as he may direct,
.
o
/C
All publicity will be enlisted in the joint endeavor, and will^include
wherever possible the continuous promotion activities ox tne
r Savings
Staff.
Every function of the two organizations will be integrated in every
productive way in preparation for and during the April campaign, Tne entire
basket of Treasury securities, including 2 bonds, will be sold by all
forces taking part in the drive.
In announcing the new sales organization Secretary Morgenthau said:
!iTlie general purpose of the new organization which Mr. Robbins is to
head is to coordinate more effectively the work ox selling Government
securities to finance the war. In this great task we shall continue to rely,
as we have in the past, on the patriotic cooperation of many willing
volunteers, including* all those Whose unscliisyi, efxorts nave set suen a
remarkable record, in the sale of War Savings Bonds and Stamps as well as
those whose intensive work made possible success in the first Victory Fund
drive. This makes us confident that they Till meet successfully the greater
tasks that lie ahead of us in this and succeeding campaigns., ■
"Nowhere is there better evidence that hero in the United States this
is a people's war than in the widespread participation in the purchase of
Gove mment sccurltie s.
"fie are perfecting our organization simply to give to the American
people better opportunities and facilities for putting their dollars to
work for victory."
W# M* Robbins, appointed today by Secretary Morgenthau as chairman
of the United States Treasury War Finance Committee, is a specialist in
mass sales and distribution methods#
He has been
20 years, is now
its distribution
be on leave from
sales program#
associated with the General Foods Corporation for nearly
vice president of that organization and president of
subsidiary, the General Foods Sales Company# He will
his company while assisting the Treasury in its securities
Mr# Robbins has for the past eighteen months served in various ad
visory capacities with the War Production Board# He left a position as
acting Deputy Director General for Staff Operations of WPB to come to
the Treasury, which he already has served since last November as a member
of a committee consulting with the Secretary on securities marketing#
Mr# Robbins will have the title of Assistant to the Secretary of the
Treasury.
Mr# Robbins was born in 1901, at Greenburg, Pennsylvania-# He attended
Hill School at Pottstown, Pennsylvania, and Yaie University, where he was
awarded a Bachelor of Science degree from the Sheffield Scientific School
in 1924# He joined the sales staff of the Postum Company upon graduation,
this company through various mergers and expansions later becoming the
General Foods Corporation#
Mr# Robbins is married and has four children# The family home is at
Greenwich, Connecticut. In Washington he lives at the Shoreham Hotel.
A brother of the new Assistant to the Secretary, Edward E# Robbins,
is vice president of the Youngstown Steel Door Company#
Mr. Robbins* father, the late Edward E. Robbins, served in Congress
during the First World T&r, and was a member of that body at the time of
his death in 1918# Mrs* Edward E* Robbins, Sr# has continued her
residence in Washington#
u
-
20
-
So don't wait u n til March 15th,
Get those d o lla rs
of yours into the fig h t tomorrow.
Then you w ill have the s a tis f a c tio n of knowing
th at you are matching, a t le a s t in some small degree,
the s a c r if ic e s of those who are bearing the b a ttle .
Thus can you help to preserve fo r y o u rself and
your children the things th at are more precious than
l i f e i t s e l f — freedom, and honor, and opportunity —
the p ric e le s s rig h t to liv e our own l iv e s , in our
own way, in our own land
- 19 MR. SULLIVAN:
Thank you, Senator Vandenberg, for your th r illin g
vision o f our Nation as one united mighty army —
some of us on the flaming b a ttle fro n t, others on
the home fro n t.
In th is unity o f e f f o r t , the one BIG question
in the mind of every loyal American must be not
"What can we g e t ," but " W hat can we GIVE"?
One thing we can a l l give Is the support of our
d o lla rs .
We can provide funds to build tanks, guns,
planes and ships, by buying War Bonds.
And In
*
Congressman Knutson’ s words, we "can keep f a ith with
our men on the fig h tin g fro n ts” b y paying our Federal
income tax NOW.
The e a r l ie r i t Is paid, the sooner
our d o lla rs w ill be with them in the f ig h t.
- 18 -
But nothing we do can make war inexpensive; and
nothing we do can a f f e c t your obligation to f i l e
your retu rn and make your f i r s t q u arterly payment
by next March 15th.
I f there are subsequent changes
in the tax law to your advantage, you w ill be wholly
p rotected by subsequent readjustments..
But there
is no recourse now except to rep ort and pay between
now and March 15th .
on the “home f r o n t .”
That’ s our indispensable job
To f a i l i t would he to f a i l
our fig h tin g sons, and to f a i l our sentry p ost.
There w ill be no f a ilu r e , my fellow countrymen,
because we are a l l e n liste d in th is war for our
triumphant Republic.’
~ 17 ~
They step to the music of the Union*
the S tars and Stripes*
They salu te
Under such circum stances,
who cares to say that ^paying ta x e s ” should not
he a proud p riv ile g e fo r proud Americans who crave
a p a rt in v icto ry ?
We, in the Congress, are under obligation s to
w rite a new 1943 tax b i l l which w ill equalize these
burdens so fa r as is humanly possible*
In my view,
we are under obligations to put taxes on a pay-as-we-go
basis*
We are under ob ligation s to reduce expenditures
to the l a s t possible degree not in co n sisten t with the
war e ffo rt*
tax methods.
We are under obligation s to sim plify
Tou may be sure of every possible
e f f o r t in these d ire ctio n s.
- 18 **
Every tax dollar answers r e v e il le .
fought a t Guadalcanal*
Tax d o lla rs
Tax d o lla rs bombed Tokio.
Tax d o lla rs are bivouaced tonight in Tunis*
d o lla rs w ill march on Rome*
Tax
Tax d o lla rs w ill be
in th at immortal B erlin parade.
Without them, there
could be no Army, no Navy, no armada of the skies*
Without them, unbridled in fla tio n would drive our
home-land to economic su icid e.
Without them,
n eedlessly and inhumanely accumulated debts would
curse our ch ild ren ’ s ch ild ren .
p a tr io ts .
Tax d o llars are
Tax d o lla rs are buddies to the A. E. F.
Tax d o lla rs are not ju st "ta x e s . n
ju st " d o ll a r s ."
They are not
They wear the uniform of freedom.
- 15 We need only to know the tru th .
Then we sh a ll
su stain our so ld iers and s a ilo rs and marines.
w ill s a c r if ic e our comforts to th e ir needs.
We
We w ill
s a c r if ic e our needs to th eir com forts.
Tonight, my frien d , Congressman Knutson, and
I are glad to cooperate with the Treasury Department
in emphasising one v i t a l phase of th is challenge
which comes to i t s next deadline on March 15th*
Taxes!
I t is never a pleasant su b ject a t b e st.
y e t I wonder!
And
I f th e r e 's an e x h ila ra tin g t h r i l l
for us in news of brave American triumphs a t the
fig h tin g fro n t, we are e n title d to an exh ilaratin g
t h r i l l when we pay our figh tin g taxes on the home
fro n t — because our taxes go to war.
Total war means th at a l l our resources in men,
machines, money and m a te ria ls, beyond what is needed
to maintain minimum c iv ilia n needs, must be devoted
j
to waging war.
This includes, of course, prudent
a llo ca tio n s to make c e rta in th a t our war economy in
munitions and in food is adequately sustained along
with adequate man-power a t the fig h tin g fro n t.
But
i t means, over a l l , th a t more than one-half of
everything we as a nation can produce must be
devoted to waging war.
I t means that every one
among us must e n li s t , each in his own way, fo r the
duration.
I am confident th a t those of us upon the
"home fro n t” w ill need no exh ortation s to these ends.
- 13 Total home "fid elity ® in maximum war production, in
the conservation of e ss e n tia l sup p lies, in the purchase
of the bonds th a t buy the b u lle ts , in the payment o f
hard ta x e s, in the r e la tiv e ly easy abandonment of
some creatu re com forts, and in devoted singleness of
purpose to win — th is t o t a l home "fid e lity ® is our
c iv ilia n contribution to the c o lo rs ; our c iv ilia n
partnership w ith the men who face our enemies on
land and sea and in the a i r ; our c i v i l ia n duty to
our c itiz e n sh ip ; our c iv ilia n p riv ile g e as Americans;
our c iv ilia n date with d estin y.
-
12
-
SENATOR VANDENBERG:
I am glad to join my able frie n d , Congressman
Knutson, and the distinguished A ssistan t S ecretary
of the Treasury, Mr* Sullivan, in th e ir vivid
sentiments in behalf of t o ta l American f i d e li ty
to t o t a l war in order th at we may achieve t o t a l
v icto ry as sw iftly as p ossib le.
Total "fid elity ®
on the "home fro n t" — no m atter what i t co sts —
involves an easy p rice compared with the ris k and
s a c r i f i c e , yes the blood and death, which are the
coin in which our fig h tin g sons pay for th e ir love
of our common h e rita g e .
But th is to ta l f i d e l i t y at
home is absolutely indispensable to v ic to ry abroad.
-
11
-
During h is s ix years on th a t Committee, and his
fifte e n years of distinguished serv ice in the
Senate, he has earned by h is t i r e l e s s e f f o r t s , by
the clearn ess of his v isio n , and the soundness of
his co u n se l, the resp ect and a ffe c tio n o f his
i
•; *
colleagues and the gratitu d e of the Nation —
Senator Arthur H. Yandenberg.
-
10
-
Ho s a c r if ic e s we w ill be ca lle d on to make here
a t home can begin to compare with those our brothers
are making day in and day out fo r you and me.
MR. SULLIVAN:
Thank you, Mr* Knutson, for your in sp irin g
message.
now have the honor to introduce the ranking
Republican member of the Senate Finance Committee*
/
- 9 Congress is a t present engaged in working out
some method of tax payment more convenient to the
taxpayer — some form of pay-as-you-earn.
No plan
th a t Congress may adopt w ill a l t e r in any way*
however, your obligation to f i l e a retu rn and make
a f i r s t q u arterly payment on or before March 15th.
When a more convenient method of c o lle c tio n
has been agreed upon, Congress then w ill have the
task of ra is in g ad d ition al revenues for the prosecution
of the war.
With tax ra te s what they a re , i t is n ’ t
going to be easy — n eith er fo r Congress nor for
the people as a whole.
But of th is I am c e r ta in .
-
8
-
The task of the Government today is to convert th is
expression of purpose into an expression of f a c t .
One of the methods by which the Government
gives blood and fle sh to the peoplefs determination
to win i 3 ta x e s.
Through taxes — taxes to beat
the Axis — we w ill keep f a ith with ourselves and,
more important, with the men on the fa r-flu n g
fig h tin g fro n ts of the world to whom we owe so much.
Taxes th is year, to be sure, are much heavier
than they were a few years ago.
They are t r i v i a l ,
however, in comparison to the s a c r i f ic e s others are
W
XT
making in our b eh alf, and to the s a c r if ic e s th at would
be imposed upon us i f — God forbid.' — we ever lo s t
the war.
- 7 We, however, w ill bring lib e ra tio n and comfort to
the peoples of Europe and Asia and A frica p re cise ly
because we struggle fo r our own freedom, our own
lib e r ty , our own way of l i f e .
Our lo ss is th e ir
lo s s ; and our gain , th e ir gain.
And here 1 would lik e to emphasize a f a c t th a t
is sometimes fo rg o tte n .
This business of winning
the war and estab lish in g a world in which men can
liv e and prosper in peace and s e c u rity is not any
one man’ s re s p o n s ib ility ; i t is not even the
re sp o n sib ility of Congress.
of 135 m illion Americans.
I t is the re sp o n sib ility
I t is the American people,
actin g through th e ir rep resen tativ es in Congress,
who pledged the n a tio n ’ s resources to the business
of winning the war.
- 6 -
CONGRESSMAN KNUTSON:
I am happy to speak to you tonight a t the
in v ita tio n of A ssistan t S ecretary Sullivan.
I want
you to know too th a t I share the views he has
expressed as to our fundamental Americanism.
I would go even fu rth e r, however.
A fter a l l i t is not only our Americanism which
unites us today in common brotherhood.
I t is also
our common humanity, our w ill to liv e and l e t liv e ,
our burning d esire to enjoy the comforts and
b lessings of lib e r ty in common with a l l the peoples
of the e a rth .
I t is th is which se ts us o ff from
our enemies.
They have enslaved th e ir own unhappy
people as a prelude to the enslavement of the r e s t
of the world.
- 5 We believe i t is very la rg e ly due to a b e lie f th a t
the Congress may re lie v e taxpayers of the obligation
to f i l e
th eir retu rn s before March 15th .
Hence,
some are holding back in the exp ectation th a t some
l a s t minute change w ill be made in th e ir re sp o n sib ility .
Our guests th is evening w ill t e l l you th a t no such
change w ill be made.
They w ill t e l l you th a t we
need our tax d o lla rs — and we need them now.
I t gives me g re a t pleasure to introduce to you
Congressman Harold Knutson.
For ten years Congressman
Knutson has been a member of the House Ways and Means
Committee.
He is a Congressional veteran who tomorrow
completes his 26th year of consecutive serv ice as a
member of the House of R ep resen tatives.
Knutson:
Congressman
** 4 This year the American taxpayer is not f i li n g his
retu rn or paying his taxes as promptly as he did
l a s t y ear.
We a l l know th a t the Government needs even
more revenue th is year than l a s t .
We a l l know th at
we must give our fig h tin g men and women every
m aterial aid to a s s i s t them to do th e ir job thoroughly,
quickly, and with the le a s t possible lo s s of l i f e .
This, the American people demand.
At the Treasury we are convinced th at the
slowness of taxpayers in f ilin g th e ir retu rn s th is
year is not due to any unwillingness to s a c r if ic e or
to pay th e ir share for the defense of th e ir freedom.
- 3In the m alarial sxmmps of Guadalcanal, in the.
treacherous ravines of Tunisia, on the death-laden
waters of the seven se a s, in the a i r over Europe,
A frica , the South P a c ific and Alaska our figh tin g
men tonight are paying the supreme s a c r if ic e for
you, fo r me, and for our ch ild ren .
The courage and
the determination of these v a lia n t men is ju st as
g re a t as i t was a year ago.
So, too, on most
se cto rs of the home fro n t the American people are
displaying the same determ ination, the same
w illingness to s a c r i f ic e they exhibited l a s t year.
In one resp ect — and in one, alone — can
anyone observe any diminution in the zeal of the
American people on the home fro n t to do th e ir p a rt.
- 2 -
When the peaceful n egotiation s between Japan
and the United S tates were sh attered by the infamous
attach on Pearl Harbor, our enemies achieved one
objective they did not desire*
Between dawn and
sunset of December ?th they forged a unity among the
American people which w ill continue u n til the Japanese
and th e ir Axis partners have been stripped of the
power to indulge in egression for many years to come*
One of the f i r s t m anifestations of our new
n ational un ity and determination was displayed l a s t
year in the unprecedented promptness and w illingness
with which American people paid th e ir income taxes*
Since th at time our Army, Bavy and Air Corps have
ca rrie d the fig h t to the Axis wherever we could get
a t them.
m . SULLIVAN:
Tonight i t is my p riv ile g e to present to you
two distinguished Republicans, Congressman Harold
Knutson, and Senator Arthur H. Vandenberg, who join
me in urging you to f i l e your income ta x return
promptly.
I think i t is most f i t t i n g th a t we should
hear from these outstanding Republican members of the
Congressional Taxing Committees.
Today i t Is obvious
th at the things which r e a lly m atter are the things
which bind us tog eth er, not the things which separate
us.
We must not permit our d iffe re n c e s ,—p o l i t i c a l ,
re lig io u s , or r a c i a l , — to d isru p t our unity or
impair our fundamental Americanism*
TREASURY DEPARTMENT
Washington
(The following income tax discussion by Assistant
Secretary of the Treasury John L. Sullivan* Congressman
Harold Knutson of Minnesota* member of the House Ways
and Means Committee* and Senator Arthur H. Vandenberg
of Michigan* member of the Senate Finance Committee*
is scheduled to be broadcast over the Columbia
Broadcasting System network at 10:30 P,M, Eastern
War TimejTuesday, March 2. 19A3. and is for release at
that time»)
MR. SULLIVAN:
’ Tonight it is my privilege to present to you two distinguished
Republicans* Congressman Harold Knutson* and Senator Arthur H.
VandOnberg* who join me in urging you to file your income tax return
promptly, I think it is most fitting that we should hear from these
outstanding Republican members of the Congressional Taxing Committees.
Today it is obvious that the things which really matter are the things
which bind us together, not the things which separate us,/ We must not
permit our differences* - political* religious* or racial* — to disrupt
our unity or impair our fundamental Americanisuf.
Then the peaceful negotiations between Japan and'the United States
were shattered by th$ infamous attack on Pearl Harbor* our enemies
achieved one objective they did not desire# Between dawn and sunset
of December 7th they forged a unity among the American people which
will continue until the Japanese and their Axis partners have been
stripped of the power to indulge in aggression for many years to come.
One of the first manifestations of our new national unity and
determination was displayed last year in the unprecedented promptness
and willingness with which American people paid their income taxes.
Since that time our Army* Navy and Air Corps have carried the fight
to the Axis wrh&rever we could get at them. In the malarial swamps
of Guadalcanal* in the treacherous ravines of Tunisia*'on the death
laden waters of the seven seas* in the air over Europe* Africa* the
South Pacific and Alaska our fighting men tonight are paying the
supreme sacrifice for you* for me* and for our children. The courage
and the determination of these valiant men is just as great as it was
a year ago. So* too* on most sectors of the'home front the American
people'are displaying the same determination, the same willingness to
sacrifice they exhibited last year*
35-56
2
In one respeet —
diminution in the zeal
Iheir part* This year
or paying his taxes as
~
and in one, alone — can anyone observe any
of the American people on the home front to do
the American taxpayer is not filing his return
promptly as he did last year*
We all know that the Government needs even more revenue this
year than last» Vie all know that we must give our fighting men and
women every material aid to assist them to do their job thoroughly,
quickly, and with the least possible loss of life. This, the American
people demand*
At the Treasury we are convinced that the slowness of taxpayers
in filing their returns this year is not due to any unwillingness to
sacrifice or to pay their share for the defense of their freedom. YTe
believe it is very largely due to a belief that the Congress may
relieve taxpayers of the obligation to file their returns before
March 15th. Hence, some are holding back in the expectation that
some last minute change will be made in their responsibility* Our
guests this evening will tell you that no such change will be made.
They will tell you that we need our tax dollars — and we need them
now*
It gives me great pleasure to introduce to you Congressman Harold
Knutson* For ten years Congressman Knutson has been a member of the
House Ways and Means Committee* He is a Congressional veteran who
tomorrow completes his 26th year of consecutive service as a member of
the House of Representatives. Congressman Knutson:
CONGRESSMAN KNUTSON:
I am happy to speak to you tonight at the invitation of Assistant
Secretary Sullivan* I Yrant you to know too that I share the views he
has expressed as to our fundamental Americanism. I would go even
further, hovrever.
After all it is not only our Americanism wrhich unites us today
in common brotherhood. It is also our common humanity, our Yirill to live
and let live, our burning desire to enjoy the comforts and blessings
of liberty in common i/vith all the peoples of the earth. It is this
which sets us off from our enemies. They have enslaved their own
unhappy people as a'prelude to the enslavement of the rest of the
world. We, however, will bring liberation and comfort to the peoples
of Europe and Asia and Africa precisely because y;e struggle for our
own freedom, our own liberty, our own yvey of life* Our loss is their
loss; and our gain, their gain.
- 3 ~
And here 1 would like to emphasize a fact that »is sometimes for-*
gotten* This business of winning the war and establishing a world
in whibti men can live and prosper in peace and security is not any
one man’s responsibility; it is not even the responsibility of
Congress* It is the responsibility of 135 million Americans. It
is the American people, acting through their representatives in
Congress, who pledged the nation’s resources to the business of win
ning the war. The task of the Government today is to convert this
expression of purpose into an expression of fact*
One of the methods by which the Government gives blood and flesh
to the people’s determination to win is taxes* Through taxes — taxes
to beat the Axis — we will keep faith with ourselves and, more impor
tant, with the men on the far flung fighting fronts of the world to
whom we owe so much*
Taxes this year, to be sure, are much heavier than they were
a few years ago* They are trivial, howeveh, in comparison to the
sacrifices others are making in our behalf, and to the sacrifices
that would be imposed upon us if — God forbid i — we ever lost the
war*
Congress is at present engaged in working out some method of tax
payment more convenient to the taxpayer — some form of pay—as-youearn. No plan that Congress may adopt will alter in any way, however,
your obligation to file a return and make a first quarterly payment
on or before March 15th*
When a more convenient method of collection has been agreed upon,
Congress then will have the task of raising additional revenues for
the prosecution of the war* vvith tax rates what they are, it isn’t
going to be easy — neither for Congress nor for the people as a whole*
But of this I am certain* No sacrifices we will be called on to make
here at home can begin to compare witn those our brotners are making
day in and day out for you and me*
MR. SULLIVAN:
Thank you, Mr. Knutson, for your inspiring message.
I now' have the honor to introduce the ranking Republican member
of the Senate Finance Committee* During his six years on that
Committee, and his fifteen years of distinguished service in the
Senate; he lias earned by his tireless efforts, by the clearness of his
vision, and the soundness of his counsel, the respect and affection of
his colleagues and the gratitude of the Natipn — Senator Arthur H*
Vandenberg.
SENA.TOR VANDENBERG:
I am glad to join my able friend, Congressman Knutson, and'the
distinguished Assistant Secretary of the Treasury, Mr, Sullivan, in
their vivid sentiments in behalf of total American fidelity to total
war in order that we may achieve total victory as swiftly as possible.
Total ’’fidelity” on the ’’home, front1* - no matter what it costs involves an easy price compared with the risk and sacrifice, yes the
blood and death, which are the coin in which our fighting sons pay
for their love of our common heritage. But this total fidelity at
home is absolutely indispensable to Victory abroad. Total home
’’fidelity51 in maximum war production, in the conservation of essential
supplies, in the purchase of the bonds that buy the bullets, in the
payment of hard taxes, in the relatively easy abandonment of some
creature comforts, and in devoted singleness of purpose to win — this
total home ’’fidelity” is our civilian contribution to the colors; our
civilian partnership with the men who face our enemies on land and sea
and in the air; our civilian duty to our citizenship; our civilian
privilege as Americans; our civilian date with destiny.
Total'war means that all our resources in men, machines, money
and materials, beyond what is needed to maintain minimum'civilian needs
must be devoted to waging war, 'This includes, of course, prudent
allocations to make certain that our war economy in munitions and in
food is adequately sustained along with'adequate man-power at the
fighting front. But it means, over all, that more than one-half of
everything we as a nation can produce must be devoted to waging war,
It means that every one among us must enlist, each in his own way, for
the duration, I am confident that those of us upon the ’’home front”
will need no exhortations to these ends. We need only to know tne
truth. Then we shall sustain our soldiers and sailors and marines.
We will sacrifice our comforts to their needs, We will sacrifice our
needs to their comforts.
Tonight, my friend, Congressman Knutson, and I are glad to
cooperate with the Treasury Department in emphasizing one vital phase
of this challenge which comes to its next deadline on Match 15th,
Taxes l It is never a pleasant subject at best. And yet I wonderJ
If there’s an exhilarating thrill for us in news of brave_ American
triumphs at the fighting front, we are entitled to an exhilarating
thrill when we pay our fighting taxes on the home front - because our
taxes go to war. Every tax dollar answers reveille. Tax dollars
fought at Guadalcanal, Tax dollars bombed Tokio, Tax dollars are
bivouaced tonight in Tunis, Tax dollars will march on Rome. 'Tax
dollars will be in that immortal Berlin parade. Without them, there
could be no Army, no Navy, no armada of the skies. Without them,
unbridled inflation would drive our home—land to economic suicide.
Without them, needlessly and inhumanely accumulated debts would curse
-mour children’s children. Tax dollars are patriots. Tax dollars are
buddies to the A.E.F. Tax dollars are not just ’’taxes”• They are not
just "dollars”. They wear the uniform of freedom. They step to the
music of the Union. They salute the Stars and Stripes* Under such
circumstances, vdio cares to say that "paying taxes" should not be
a proud privilege for proud Americans who crave a part in victory?
We, in the Congress, are under obligations to write a new 194-3
tax bill vfnich will equalize these burdens so far as is humanly
possible* In my view, we are under obligations to put taxes on a
pay~as-we~go basis. We are under obligations to reduce expenditures
to the last possible degree not inconsistent with the war effort.
We are under obligations to simplify tax methods. lou may be sure
of every possible effort in these directions. But nothing we do can
make war inexpensive; and nothing we do can affect your obligation
#to file your return and make your first quarterly payment by next
March 15th. If there are subsequent changes in the tax law to your
advantage, you will be wholly protected by subsequent readjustments.
But there is no recourse now except to report and pay bet¥raen now
and .March 15th.Tliat,s our indispensable job on the "home front". To
fail it would be to fail our fighting sons, and to fail our sentry
post. There will be no failure, my fellow countrymen, because we are
all enlisted in this war for our triumphant Republic l
MR. SULLIVANî
Thank you, Senator Vandenberg, for your thrilling vision of our
Natioh as one united mighty army — some of us on the flaming battle
front, others on the home front.
In this unity of effort, the one BIG question'in the mind of
every Iqyal American must be not "What can vre get", but "What can we
GIVE"?
One thing we can all give is the support of our'dollars. .We can
provide funds to build tanks, guns, planes'and ships, by buying War
Bonds. And in Congressman Knutson’s words, we "can keep faith with
our men on the fighting fronts" by paying our Federal income tax NOW.
The earlier it is paid, the sooner our dollars will be with them in
the fight*
So don’t wait until March 15th.
the fight tomorrow*
Get those dollars of yours into
Then you will have the satisfaction of knowing that you are
matching, at least in some ’small degree, the sacrifices of those
vfho are bearing the battle*
Thus can you help to preserve for yourself and your children
the things that are more precious than life itself — freedom, and
honor, and opportunity — the priceless right to live our own live
in our own way, in our owh land*
- 3 -
near Hannah, North Dakota, and found man and wife stricken with pneumonia^
the wife desperately ill. Wright wrapped the woman carefully to protect
her from the cold, and carried her to the nearest settlement«
The detection and prevention of smuggling is the primary function of
the service, hut now, in wartime, it also cooperates with the Canadian
Royal Mounted Police and United States Immigration and Naturalization
service officers in defense measures#
In addition to the Northwest and Northeast patrol districts, there
is a Southwest District, stretching from Brownsville, Texas, to San Diego,
where constant patrol is maintained along the hundreds of miles of
sun-baked desert and mesquite badlands. The men of the Customs Patrol«
remain long away from their posts, and frequently are in danger. The Bureau
has a long honor roll of officers who have lost their lives in line of duty.
Men of the patrol can build a fire without matches, read natural .
signs, and be self-supporting and self-sufficient with a minimum of
equipment. They wear a distinctive uniform, with sidearms, and are
equipped with horses, automobiles, speedboats; and in the winter resort
to snowshoes and snowcycles along the northern-border. They are on duty
day and night for long hours#
Service to the public beyond the call of official duty is traditional
with them. Virtually all are experts in administering first aid# Complete
first aid equipment is carried on all vehicles used by the Service. A
recent report from the Northwest district alone detailed fifty instances
of emergency treatment administered by Customs personnel within a period
of a few weeks, in a number of cases saving lives that otherwise would
have been lost.
Thomas J# Gorman, Deputy Commissioner, heads the Division of Investi
gations and Patrol of the Bureau of Customs. The Northwest Patrol with
headquarters at Havre, Montana, is headed by Otis M. Thompson, District
Superintendent» The Northeast District Superintendent is W. E. McKay,
with headquarters at Buffalo, New York. The Southwest District is
directed from El Paso by Superintendent Grover C. Webb. Each district
has a personnel of about 150 men, organized into companies along semi
military lines. Intelligence, courage, resourcefulness, trustworthiness,
physical stamina, and law enforcement experience are the qualities stressed
in enlisting men for this service.
ft
- 2 -
Turner, Montana - »Assisted, in getting fuel truck through in raging
storm. 3*uei was needed badly in town.»
Sumas, Washington - »Located a state highway crew to clear a road
to a farmer*s residence so that a physician could get through to perform
an emergency operation.»
Northport, Washington - »Helped carry a sick man from his residence
in the wooded hills over a snow covered trail to the main highway where an
ambulance was waiting.»
Opheim, Montana - »Assisted in opening roads to get a young girl to
a hospital for an operation*»
Westhope, North Dakota - »Bought and delivered a. pair of overshoes
to a farmer so that his son might get to school.» (What the boy thought
of this service is not reported.)
Goldbutte, Montana - »Assisted in getting badly needed food supply
from drift bound car to rancher*s home several miles away.»
Peskan, Montana - »Bode horse five miles to ranch through five feet
of snow to feed livestock as owner was unable to get home in storm.»
Warroad, Minnesota
treatment.»
r*
»Took three persons from wreck to a hospital for
Not all the unusual services were in behalf of humans. Stormscattered livestock were rounded up, and patrolmen on their treks scattered
food on the snow for pheasants and other birds.
The men maintained their regular patrols throughout the storm where
it was at all possible.
Throughout the years, the Patrol Service has built up an imposing
record of such exploits. Perhaps none is more remarkable than that
credited to Dana M. Wright, who five years ago, when he was 60 years old,
carried a stricken woman several miles on his shoulders, breaking through
drifts on snowshoes, to save her life.
Wright retired from service three years ago. He is a powerful
man, nearly six feet tall, and weighing, in the days of his rescue feat,
about 190 pounds. A veteran of the first world war, he prided himself
on his strength and vigor*
As Customs officials here recall the story, Wright was making his
patrol on ^nowshoes in a blizzard. He came upon an isolated farm house,
TREASURY DEPARTMENT
Washington
.EOR RELEASE, MORNING NEWSPAPERS
Sunday. March 7. 1943__________
Press Service
N o . 35-57
Braving 7-foot snow drifts and temperatures that ranged to 50 degrees
below zero, the Treasury’s Customs Patrol officers along 3 t600 miles of
our northern boundary became agents of mercy this winter, preserving
lives and property in scores of cases, Secretary Morgenthau revealed
today.
Particularly in the northwest, with the worst storm in thirty years
virtually paralyzing large areas, the patrolmen resorted to snowshoes,
horses and motor sleds where automobiles could not penetrate blocked roads.
They performed such services as getting food and fuel through to isolated
ranches and communities, providing medical attention for the sick, and
rescuing stranded travelers under conditions where death from freezing
was a very real danger.
The feat of Customs Patrol Inspector Eloyd E. Grimes of the Warroad,
Minnesota, unit is typicaJ of dozens of other rescue missions participated
in by the Treasury men. Enlisting the aid of two Minnesota game wardens,
he set out in a motor sled to search for a mail carrier missing five days.
The party made the search in a terrific blizzard and located the mail
carrier in a cabin on an island. His wind-sled had broken down, and he
had no means of communication with Warroad. Grimes gave first aid for
frost-bitten feet to the postal employe and another man; and driving
blind in the storm, with the aid of a compass, got the victims back to
the town.
Near St. Albans, Vermont, Inspector A. R. Sellers saved a motorist
and his five-year old daughter from possible death. The motorist only
a few days previously had been released from a hospital after a major
operation, and he and the child were suffering severely from the cold.
The Customs officer and associates pulled the car from a ditch, and
Sellers drove the pair to safety.
Terse accounts of such relief work fill the routine reports reaching
W* R. Johnson, Commissioner of Customs. It is all in the day’s work in
the eyes of the patrolmen and few of the incidents cited even mention the
names of the men who figured in them. Customs men accept no pay for their
extraordinary services to the public.
Here are just a few of the unusual services arising from the recent
storm.
Blaine, Washington - ’’Transported a man to a Bellingham Hospital where
he gave a blood transfusion, and then returned him to his home in Blaine.”
s
Braving
7 * * io o t
snow drifts and temperatures that ranged to
50 degrees below zero, the Treasury*s Customs Patrol officers along
3,600 miles of our northern boundary became agents of mercy this
winter, preserving lives and property in scores of cases, Secretary
Morgenthau revealed today*
Particularly in the northwest, with the worst storm in thirty
years virtually paralyzing large areas, the patrolmen resorted to
snowshoes, horses and motor sleds where automobiles could not penetrate
blocked roads.
V L ,
(J
tlirou-gh
f o r
They performed such services as getting food and fuel
isolated ranches and communities, providing medical attention
the sick, and rescuing stranded travelers under conditions where
death from freezing was a very real danger*
The feat of Customs Patrol Inspector Ployd E. Grimes of the
Warroad, Minnesota, unit is typical of dozens of other rescue missions
participated in by the Treasury men.
Enlisting the aid of two
Minnesota game wardens, he set out in a motor sled to search for a mail
carrier missing five days.
The party made the search in a terrific
blizzard and located the mail carrier in a cabin-on an island.
His
wind-sled had broken down, and he had no means of communication with
Warroad.
Grimes gave first aid for frost-bitten feet to the postal
employe and another man; and driving blind in the storm, with the aid
of a compass, got the victims back to the town.
2
Near St. Albans, Vermont, Inspector A. R. Sellers saved a motorist
and his five-year old daughter from possible death.
The motorist only
a few days previously had been released from a hospital after a major
operation, and he and the child were suffering severely from the cold.
The Customs officer and associates pulled the car from a ditch, and
Sellers drove the pair to safety.
Terse accounts of such relief work fill the routine reports
reaching W. R. Johnson, Commissioner of Customs.
It is all in the
day’s work in the eyes of the patrolmen and few of the incidents cited
even mention the names of the men who figured in them.
Customs men accept
no pay for their extraordinary services to the public.
Here are just a few of the unusual services arising from the recent
storm.
Blaine, Washington - ’’Transported a man to a Bellingham Hospital
where he gave a blood transfusion, and then returned him to his home in
‘ Blaine”.
Turner, Montana - ’’Assisted in getting fuel truck through in raging
storm.
Fuel was needed badly in town”.
Sumas, Washington - ’’Located a state highway crew to clear a road
to a farmer*s residence so that a physician could get through to
perform an emergency operation”.
Northport, Washington - ’’Helped carry a sick man from his residence
in the wooded hills over a snow covered trail to the main highway where
an ambulance was waiting.”
~ 3 ~
Opheim, Montana - ’’Assisted in opening roads to get a young
girl to a hospital for an operation.”
West hope, North Dakota — ’’Bought and delivered a pair of
overshoes to a farmer so that his son might get to school.”
(What
the hoy thought of this service is not reported.)
Goldbutte, Montana - ’’Assisted in getting badly needed food supply
from drift bound c§r to rancher’s home several miles away.”
Peskan, Montana - ’’Rodé horse five miles to ranch through five
feet of snow to feed livestock as owner was unable to .get home in storm.”
Warroad, Minnesota ** ’’Took three persons from wreck to a hospital
for treatment.”
Not all the unusual services were in behalf of humans.
Storm-
scattered livestock were rounded up, and patrolmen on their treks scattered
food on the snow for pheasants and other birds.
The men maintained their regular patrols throughout the storm where
it was at all possible.
Throughout the years, the Patrol Service has built up an imposing
record of such exploits.
Perhaps none is more remarkable than that
credited to Dana M. Wright, who five years ago, when he was 60 years old,
carried a stricken woman several miles on his shoulders, breaking through
drifts on snowshoes, to save her life.
Wright retired from service three years ago.
He is a powerful
man, nearly six feet tall, and weighing, in the days of his rescue feat,
about 190 pounds.
A veteran of the first world war, he prided himself
on his strength and vigor.
As Customs officials here recall the story, Wright was
making his patrol on snowshoes in a "blizzard.
He came upon an
isolated farm house, near Hannah, North Dakota, and found man and
wife stricken with pneumonia, the wife desperately ill.
Wright
wrapped the woman carefully to protect her from the cold, and carried
her to the nearest settlement.
The detection and prevention of smuggling is the primary function
of the service, "but now, in wartime, it also cooperates with the
Canadian Boyal Mounted Police and United States Immigration and
Naturalization service officers in defense measures.
In addition to the Northwest and Northeast patrol districts, there
is a Southwest District, stretching from Brownsville, Texas, to San Diego,
where constant patrol is maintained along the hundreds of miles of sun-baked
desert and mesquite badlands.
The men of the Customs Patrol remain long
away from their posts, and frequently are in danger. The Bureau has a
long honor roll of officers who have lost their lives in line of duty.
Men of the patrol can build a fire without matches, read natural
signs, and be self-supporting and self-sufficient with a minimum of equip
ment.
They wear a distinctive uniform, with sidearms, and are equipped
with horses, automobiles, speedboats; and in the winter resort to
snowshoes and snowcycles along the northern border.
day and night for long hours.
They are on duty
5
Service to the public beyond the call of official duty is
traditional with them*
first aid*
Virtually all are experts in administering
Complete first aid equipment is carried on all vehicles
used by the Service*
A recent report from the Northwest district alone
detailed fifty instances of emergency treatment administered by Customs
personnel within a period of a few weeks, in a number of cases saving
lives that otherwise would have been lost*
Thomas J. Gorman, Deputy Commissioner, heads the Division of
Investigations and Patrol of the Bureau of Customs*
The Northwest
Patrol with headquarters at Havre, Montana, is headed by Otis M.
Thompson, District Superintendent*
The Northeast District Superintendent
is W* E. McKay, with headquarters at Buffalo, New York.
The Southwest
District is directed from El Paso by Superintendent Grover C. Webb*
Each district has a personnel of about 150 men, organized into companies
along semi-military lines*
Intelligence, courage, resourcefulness,
trustworthiness, physical stamina, and law enforcement experience are the
qualities stressed in enlisting men for this service*
TREASUHÏ DEPARTMENT
Washington
I
FOR IMMEDIATE RELEASE*
Wednesday, March 3, 1943.
Press Service
Uo. 35-53
The Bureau of Customs announced today preliminary figures showing the
Quantities 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 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
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 Agree- )
ment
)
1/
Quota Quantity
(Pounds) 1 J
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
45,400,398
2,908,617
78,758,056
32,462,515
4,127,276
61,254,106
51,653,778
Quotas revised.
oOo-
Authorized for entry
for consumption
As of (Date)
¡
(Pounds)
Feb# 20, 1943
n
tt
197,992,218
200,098,859
7, 820,380
7,013,254
9,133,570
11,634,073
23,701,575
26,582,903
33,789,975
1,240,067
18,589,912
364,770
155
22,030,021
tt
19,088,310
n
s
»
tt
n
n
n
tt
tt
it
ft
for immediate r e l ea s e ,
3 ô ~- s
r '
March 2, 1 9 h 3 »
The Bureau of Customs announced today preliminary figures showing the
quantities of coffee authorized for entry for consumption under the quotas
for the twelve months commencing October 1, 19l*2, provided for in the InterAmerican Coffee Agreement, proclaimed b y the President on April l£, 19l*l> as
follows*
Country of
Production
Signatory Countries!
Brazil
Colombia
Costa Rica
Cuba
Dominican Republic
Ecuador
El Salvador
Guatemala
Haiti
Honduras
Mexico
Nicaragua
Peru
Venezuela
«
*
t
s
s
Quota Quantity *
Authorized for entry
/ (Pounds) X f } *
for consumption
* As of (Date)
*
(Pounds)
1.535,367,083
520,081»,629
33,019,261»
13,212,917
17,533,713
21»,767,091»
99,680,281»
88,33U,1»1»2
¡»5,1*00,298
2,908,617
78,758,056
32,1»62,515
1»,127,276
61,251»,106
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 Agree- )
ment
)
V
51,653,778
Quotas revised.
—oOo—
Feb. 20, 191*3
w
ti
«
ii
it
ti
a
H
II
!t
H
It
R
R
197,992,218
200,098,859
7,820,380
7,013,251»
9,133,570
11,631»,073
23,701,575
26,582,903
33,789,975
l,2l»0,067
18,589,912
361»,770
155
22 ,030,021
19,088,310
m 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*
<Q 0
(£>
-
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
March 10» 1943________ .
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
TREASURY DEPARTMENT
Washington
EOR RELEASE, MORNING NEWSPAPERS,
Friday. March 5. 19A3_________ .
The Secretary of the treasury, hy this public notice, invites tenders
for $ 7QQ jQQ0 jQQQ
_, or thereabouts, of
91
on a discount basis under competitive bidding.
\i be dated
0
March 10, 1943
__~day Treasury bills, to be issued
The bills of this series will
and will mature ____ June 9> 1-943
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
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
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 ly
an express guaranty of payment by an incorporated bank or trust company.
Immediately after the closing hour, tenders will be opened at the FedereJ
FOR RELEASE, MORNING NEWSPAPERS,
Friday, March 5. 1943-_________
TREASURY DEPARTMENT
Washington
The Secretary of the Treasury, by, this public notice, invites tenders
for $700,000,000, 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 March 10, 1943, and will mature June 9, 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 liar time, Monday, March 8, 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, ydth not more than three decimals, e. g.,
99.925, Fractions may not be used. It is urged that tenders be made on
the printed forms and forwarded in the special envelopes which will be
supplied by Federal Reserve Banks or Branches on application therefor.
Tenders will be received without deposit frcm incorporated banks and
trust companies and from responsible and recognized dealers in investment
securities.. Tenders from others must be accompanied by payment of 2 per
cent 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 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 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 March 10, 1943.
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 frcm the sale or other disposition 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,
(Over)
35-59
2
inheritance, gift, or other excise taxes, whether Federàl'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 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
rsuch 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 companies), issued
hereunder need include in his income tax return only the difference
between the price paid for such bills whether on original issue or on
subsequent purchase, and the amount actually received either upon sale
or- redemption at maturity during the taxable year for which the return
is made, as ordinary gain or loss.
Treasury Department Circular No. 41B, as amended, and this notice,
prescribe the ternis of the Treasury bills and govern the conditions
of their issue. Copies' of the circular may be obtained from any
Federal,Reserve Rank or Branch.
- oOo
March 3* I9U3
SMOTOBT DEBT LIMITATION
AS OF FEBRUARY 28, 19*13
Section 21 of the Second Liberty Bond Act, as amended, provides that the
face amount of obligations issued under authority of that Act, “shall not exceed
in the aggregate $125,000,000,000 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 February 28, 19 U 3 :
Interest-bearing:
Bonds Treasury
$*6 ,273.U 6 M 5 0
Savings (maturity
value)*
20.959.053.850
Depositary
ii&,l86,ooo
Adjusted Service
723.800,207
Treasury notes
Certificates of
indebtedness
Treasury bills
(maturity value)
$125,000,000,000
$71,100,50^,207
^2,15M76.350
15.059.710,000
_8 ,231,895,000
^■5.UH6.0S1.350
libi 5^6!585Ì 557
Matured obligations, on
which interest has ceased
Bearing no interest (U. S.
War Savings stamps)
69.^.850
22lt.356.2U8
116.8U0 .396.655
Face amount of obligations
issuable under above authority
$
8.159.603.3U5
Reconcilement with Statement of the Public Debt
(Oa the basis of daily Treasury Statements)
February 28, 19^3
Total face amount of outstanding public debt obligations
issued under authority of the Second Liberty Bond Act,
as amended
$ll6,8*10,396*655
Deduct unearned discount on Savings bonds (difference
between maturity value and current redemption value)
112!9^8!si5!298
Add other public debt obligations outstanding but not
subject to the statutory limitation:
Interest-bearing (Pre-War, etc.)
195*9^0»^20
Matured obligations on which
interest has ceased
10,290,275
Bearing no interest
868,622,802
1.07^873,1197
Total gross public debt outstanding February 28, 19^3
jllfy,023»688,795
* Approximate maturity value. Principal amount (current redemption value)
according to statement of the public debt on the basis of daily Treasury
Statements $17,067,U72,^93-
March 4, 1943
STATUTORY DEBT LIMITATION
AS OR FEBRUARY 38. 1943
Section 21 of the Second liberty Bond Act* as amended, provides that
the face amount of obligations issued under authority of that Act* "shall not
exceed m the aggregate $185,000,000,000 outstanding at any one time."
E
b l o w i n g table shows the face amount of obligations out standi tip- ¿ a
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 February 28* 1943j
Interest-bearing*
Bonds Treasuxy
$49,273,464,150
Savings (maturity
value)*
20,959,053,850
Depositary
144,186,000
Adjusted Service
- 723« 800.307
Treasury notes
Certificates of
indebtedness
Treasury bills
(maturity value)
$71,100,504,207
22,154,476,350
15,059,710,000
8,231.895.000
Matured obligations* on
which interest has ceased
Bearing no interest (u* S,
tar Savings stamps)
.-45,446,081'j350
116,546*585*557
69,454*850
224«356*248
116.840.396.655
Face amount of Obligations
issuable under above authority
1. 8,159,603,345
Reconcilement with Statement of the Public Seht
.(On the basis of daily Treasury Statements)
February 28. 1943
Total face amount of outstanding public debt obligations
issued under authority of the Second Liberty Bond Act*
as amended
$116,840,396,655
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, e m )
195,960,420
Matured obligations on which
interest has ceased
10 -390 275
Bearing no interest
868.622!502
— 3,891,581.357
112,948,815*298
1,074.873T497
ooo
$114,023,688.795
Approximate maturity value. Principal amount (current redemption valued
according to statement pf the public debt on the basis of daily Treasury
Statements $17,067,472,493.
^
ireasuiy
Total gross public debt outstanding February 28, 1943
35-60
Comparison of principal
items
of assets and. liabilities
of national banks —
continued
(in thousands of* dollars)
! Dec.3 1 ,
I9I+2 •
•
1
: June
:
t
•
30 »
19^2
:
|
Dec. 3 1 »
191+1
Increase or decrease! Increase or decrease
since June 30, 191+2 1 since Dec. 3 1 , I 9I+I
. Amount
: Percent? Amount
! Percent
LIABILITIES
Deposits of individuals, partner
ships and corporations:
Demand.......... .......... .
$20 ,1*80,952
$2 6 ,730 ,6 91 $2 1 ,9 ^ 5 .3 9 7
$1+,785*291+
Time...........................
8 ,3 0 7.519
7 ,8U1 , 032
1+6 6 ,1+87
7,961*,912
Postal Savings deposits......... .
9 ,0 7 3
1 U .196
15 ,0 6 1
-5.123
Deposits of U. S; Government......
*+,833,109
1 ,1 7 5 ,211*
1 ,12 7 ,6 7 3
3.657.895
Deposits of States & political
subdivisions...................
2 ,6 95 ,19 *+
2 ,71*1 ,7 2 0
2,590,91*0
- 1+6,526
Deposits of banks,............... . 1 / 7 ,1*0 1 ,531* 1 / 6 ,1*98,697
6,789,685
902,837
Other deposits (certified and
cashiers’ checks, etc.)........
6 7 1,6 9 6
1*1+2 ,8 6 1 _____
228,835
±*
m
519_
Total deposits................ 1 / 5 0 ,6 i+s,8 1 6 1 / 140,6 5 9 ,11 7
3 9 .5511.772
9.989.699
Bills payable, rediscounts & other
liabilities for borrowed money..
3 ,5 1 6
2 ,011 +
3,778
1,502
Other liabilities,............... .
39Q»291
3?g»3te
330,585
ll,9l*9
Total liabilities, excluding
capital accounts.............. 1 / 5 1 ,01*2 ,6 2 3 1 / 1*1 ,039 ,1*73
3 9 ,88 9,135
1 0 ,003,150
CAPITAL ACCOUNTS
Capital stock:
Preferred stock,...............
168 ,530
11+6 ,01+7
15 2 ,3 7 9
-6,332
Common stock...................
1,31*7,261*
1 .357,6 35
1 .3 55 ,2 9 1
2,31+1+
Total..... ....................
1 ,503,682
1 ,507,670
1 ,5 1 5 .791*
-3.988
Surplus...........................
1 ,1+38 ,61+5
1 ,1+1 1 ,1+07
1 ,388,672
27,238
Undivided profits & reserves.,.....
796,028
760 ,1+15
71*1*.633
3 5 .6 13
Total capital accounts,....... __J.73S.355 . 3.679.>+92
3,61*9,099
... 58,863
Total liabilities & capital
accounts,.................... . 1/5*1.780,978 l/i+U,716 ,9 6 5
1 0 ,0 62,013
1*3.538,231*
Reciprocal balances with banks in
the United States............ .
Ratio of loans to total deposits..*
NOTE: Minus sign denotes decrease.
3l+9»306
20,ll+$
1+1 0 ,2 2 1
26.81$
—Trrrm
- 6 0 ,9 15
21.81
5*95
-36.09
311.25
$6,21+9,739
31+2,607
-5,988
3.705.1+36
30.51
1+.30
-39,76
328.59
- 1 .7 0
13.89
10i+,25l+
6ll,8l+9
1+.02
51.67
21*.57
86,11+7
11+.71
1 1 ,091+,01+1+
28.05
9.01
7**.58
-262
3 .16
59.706
18 .0 6
2 U .3 7
1 1 ,1 5 3 ,1+88
27.96
-1+.16
.17
— .26
- 22 .I+83
10,371
- 1 2 ,1 1 2
- 1 3 .31*
.77
-.80
1 .9 3
" 1.6 0
1+9,973
51.395
89.256
2.1+5
22.50
11,21+2,7^
25.8 2
1+.68
-6.93
3.60
6.90
-11+.85
29•71$
l/ Excludes reciprocal interbank demand balances with banks in the United States, the amounts of which are shown above
♦ In call reports prior to June 30» 19^2, reciprocal balances were reported ’’gross”.
-oOo-
: Dec. 3 1 ,
: 1942
•
•
Number of banks....................
5,087
ASSETS
Loans on real estate..... ..........
Other loans, including overdrafts*..
Total loans.....................
TJ, S. Government securities:
Direct obligations..............
Obligations fully guaranteed.....
Obligations of States and
political subdivisions*.........
Other bonds, notes and
debentures..................... .
Corporate stocks, including stock
of Federal Reserve Banks........
Total investments..............
Total loans and investments....
Currency and coin..................
Reserve with Federal Reserve Banks..
Balances with other banks...... .
Total cash, balances with
other banks, including re
serve balances and cash
items in process of
collection.............
Other assets...............
Total assets...........
W
(in thousands of dollars)
: June 30 , '• Dec. 3 1 , : Increase or decrease • Increase or■ decrease
• I9I+2
!
• since Dec. 3 1 , i 9to
19 I+I
* since June 30 , 19 I+2
•
♦
t
•
•
• Amount
S Percent J Amount
* Percent
-20
5,107
5,123
«36
-.39 ——.. ■■■, .. ■■
,
....... -.70
9,
1 ..
$2 ,1 8 7 ,261+.
8.013.531*
10,200,798
$2 ,21+7 ,0 6 1 $2 ,2 5 5 ,1+08
9,1+96,381+
8.65H.731*
-$ 5 9 ,7 9 7
-61+1,200
10,901,795
11,751,792
2 2 ,2 6 1 ,1+10
1 .56 3 .9 to
13»299,723
1,629,269
2,022,1+93
1,1+1+1,181+
19 3 .76 0
27,1+82,788
3 7 .683,586
733.^99
8,21+9,513
1 / 7 ,267,258
-$68,11+1+
-1,1+82,850
- 3 .O2
-15.61
- 700,997
-2.66
-7.1+1
- 6 .1+3
-1,550,991+
-13.20
9 ,736 ,71*3
2 ,286,309
,8 ,9 6 1,6 8 7
- 65,328
6 7.3 2
1 2 ,1*71+,667
-l+.oi
-722,368
I 2 7 .I+6
-31.60
1.960.53U
2 ,02l* ,7 15
6 1,9 59
3 .1 6
-2,222
-.11
1,558,910
1 ,588,006
- 1 1 7 ,7 2 6
-7.55
-11+6,822
-9.25
19to952 ____261.735
18,61+3,388 1 5 ,687,508
2 9 .5n 5 .i83 2 7 .639.300
786,501
728,309
7 ,1*8 9 ,119
7,399,238
6,816,191
1 / 6 ,0 9 9 ,13 5
-1,192
8 ,839 ,1+00
8,138,403
- .6 1
1*7 ,1*1
-3.95
72.98
1 9 .1 5
-7,975
11,595,280
10,044,286
-53,002
850,275
1+51,067
1 3 .5 1
1 ,21+8 ,31+0
-1.18
-1+9,882
11,21+2,744
i/iH,3i6 ,5 6 3
857,219
i/i*i*, 718 ,9 6 5
1
5490
760 ,391*
,16 8 ,12 3
1 5 ,001,930
1 .933.70 7
8 9 7 ,001+
- 10 ,0 9 7
^ 3 .538 ,231* 1 0 ,0 62,013
27.55
.71
IO.I5
22.50
36 .3H
- 6 .71+
11,1+9
6 .6 2
8 .3 2
- 5 .5 6
25.82
- 2 -
$8,896,000,000 more than held by the banks on June 30, 19^2, and $11,752,000,000
more than held in December the year previous.
The direct and indirect obligations
held on December 31 last were $22,261,000,000 and $1 ,56*+,000,000, respectively.
Other bonds, stocks, and securities held totaling $3,657*000,000, including ob
ligations of States and political subdivisions of $2,022,000,000, showed decreases
in the six. and twelve month periods of $5 7 *000,000 and $157*000,000, respectively, 1
Cash of $733*000,000, balances with other banks, excluding reciprocal bal
ances, of $7,267,000,000, and reserve with Federal Reserve banks of $8,250,000,000, a total of $16,250,000,000, increased $1,93^*000,000 since June, and
$1,2^8,000,000 since December 19*+1.
Bills payable, rediscounts, and other liabilities for borrowed money of
$3*500,000 showed an increase of $1,500,000 since June, but a decrease of $262,000 in the amount reported as of December 19^1*
The unimpaired capital stock of the banks was $1,50*+, 000,000, including
$l*+6,000,000 preferred stock.
Surplus of $1, *+39»000,000, undivided profits of
$5^+1 ,000,000, and reserves of $255*000,0 0 0, a total of $2 ,235*000,000, increased
$63,000,000 and $101,000,000 in the six and twelve month periods, respectively.
The percentage of loans and discounts to total deposits on December 31,19^2,
was 20.1*+, in comparison with 26.81 on June 30, 19*^2, and 29.71 on December 31*
19^1.
TREASURY DEPARTMENT
Washington
FOR RELEASE, MORIQNG NEWSPAPERS,
I
___
Press Service
i9¥*.
Ho*
36S/
The total assets of national hanks on December 31 last amounted to
nearly $55»000,000,000, it was _announced today by Comptroller of the Currency
Preston Delano.
Returns from the call covered the 5*087 active national banks
in the United States and possessions.
The assets reported were greater by
$10,062,000,000 than those reported by the 5» 107 national banks on June 30, 19^2,
the date of the previous call, and showed an increase of $11,2^3 »000,000 over the
amount reported by the 5*123 active banks on December 3 1 * 19^1*
Since the cur
rent figures exclude $3^9 »0 0 0 ,000 of reciprocal interbank demand balances, re
ported gross on call dates prior to June 30, 19^2, the increase in the total
assets in December 19^-2 over December 19^1 on a comparable basis would be greater
by that amount.
Loans and discounts as of December 3 1 » 19^2 were $10,201,000,000, a decrease
of $701,000,000 since June 19^2 and a decrease of $1,551*000,000 since December
19^1 .
The deposits totaled $50,6^9*000,000, an increase since June of $9*990,000,000, and an increase over December 31» 19^-1 of $11,09^,000,000 which, on a com
parable basis, would be further increased by $3^9 *000,000 of reciprocal bank
balances.
Deposits at the latest call date consisted of demand and time deposits
of individuals, partnerships, and corporations of $26,731*000,000 and $8 ,308,000,-1
000, respectively, United States Government deposits of $^,833*000,000, deposits
of States and political subdivisions of $2,695*000,000, postal savings of $9*000,- 1
000, certified and cashiers* checks, etc. of $672,000,000, and deposits of banks,
excluding reciprocal balances, of $7 ,^0 1 ,000,000.
/
Investments by the banks in United States Government obligations direct and
guaranteed as of December 3 1 » 19^2, aggregated $23,825,000,000.
These were
\
TREASURY DEPARTMENT
Washington
FOR RELEASE, M O R N I N G NEWSPAPERS,
Tuesday, M a r c h 9, 1 943» ___________
3/ 6 / 4 3
The
Press
No.
Service
35-61
~
total
assets
of n a t i o n a l
banks
a m o u n t e d to n e a r l y $ 5 5 > 0 0 0 , 0 0 0 , 0 0 0 ,
Comptroller
on D e c e m b e r
it w a s
announced, t o d a y b y
of the C u r r e n c y Pres t o n Delano,
call c o v e r e d
5 ,087 a c t i v e
the
and p o s s e s s i o n s .
national
31 l a s t
Returns
banks
from the
in t h e U n i t e d
T h e a s s e t s .reported w e r e g r e a t e r
by
$ 1 0 , 0 6 2 , 0 0 0 , 0 0 0 t h a n t h o s e r e p o r t e d b y t h e 5 >107 n a t i o n a l
on J u n e
increase
30,
1942,
the
date
of t h e p r e v i o u s
of $ 1 1 , 2 4 3 , 0 0 0 , 0 0 0
active banks
on D e c e m b e r
c lude $ 3 4 9 , 0 0 0 , 0 0 0
ported gross
on
in t h e t o t a l
assets
parable basis
would
over the amount
31>
1941.
of r e c i p r o c a l
call
dates
call,
banks
a n d s h o w e d an
reported by the
Since the
current
in D e c e m b e r 1942
June
30,
1942,
the
o v e r D e c e m b e r 1941
by that
5,123
figures
i n t erbank demand balances,
p r i o r to
be greater
States
ex
re*
increase
on a c o m
amount,
L o a n s a n d d i s c o u n t s as o f D e c e m b e r 31» 1942 w e r e
$10,201,000,000, a d e c r e a s e of $ 7 0 1 , 0 0 0 , 0 0 0 s i n c e J u n e 1942 a n d
a d e c r e a s e of $ 1 , 5 5 1 >0 0 0 , 0 0 0 s i n c e D e c e m b e r 1941#
T h e d e p o s i t s t o t a l e d $50, 6 4 9 , 0 0 0 , 0 0 0 , a n i n c r e a s e s i n c e
June of $9,990 , 0 0 0 , 0 0 0 , a n d a n i n c r e a s e o v e r D e c e m b e r 31, 1941
of $ 1 1 , 0 9 4 , 0 0 0 , 0 0 0 w h i c h , on a c o m p a r a b l e basis, w o u l d b e f u r
t h e r i n c r e a s e d b y $ 3 4 9 , 0 0 0 , 0 0 0 of r e c i p r o c a l b a n k b a l a n c e s .
De
p o s i t s at t h e l a t e s t c a l l d a t e c o n s i s t e d of d e m a n d h n d t i m e d e
p o s i t s of i n d i v i d u a l s , p a r t n e r s h i p s , a n d c o r p o r a t i o n s of
$26,731,000,000 an d $8,308,000,000, respectively, U n i t e d States
G o v e r n m e n t d e p o s i t s of $ 4 , 8 3 3 ,000,000, d e p o s i t s of S t a t e s a n d
p o l i t i c a l s u b d i v i s i o n s of $2, 6 9 5 , 0 0 0 , 0 0 0 , p o s t a l s a v i n g s of
$ 9 , 0 0 0 , 0 0 0 , c e r t i f i e d a n d c a s h i e r s T checks, etc., of $ 6 7 2 , 0 0 0 , 0 0 0 ,
a n d d e p o s i t s of ban k s , e x c l u d i n g r e c i p r o c a l b a l a n c e s , of
$7,401,000,000.
Investments- by the banks in U n i t e d States G o v e r n m e n t o b l i
gations direct a n d g u a r a n t e e d as of D e c e m b e r 31» 1942, a g g r e
gated $2:3,825,000,000.
T h e s e w e r e $ 8 , 8 9 6 , 0 0 0 , 0 0 0 m o r e tha n held
by the banks on June 30, 1942, a nd $ 1 1 , 7 5 2 , 0 0 0 , 0 0 0 m ore than
held in D e c e m b e r t he y e a r previous.
T he direct and indirect o b
ligations h e l d on D e c e m b e r 31 l ast w e r e $ 2 2 , 2 6 1 , 0 0 0 , 0 0 0 and
$1,564,000,000, r e s p e c t i v e l y .
O t h e r bonds, stocks, a nd s e c u r
ities h eld t o t a l i n g $3,657, 0 0 0 , 0 0 0 , i n c l u d i n g obli g a t i o n s of
States a nd p o l i t i c a l s u b d i v i s i o n s of $2,022,000,000, s h o w e d d e
creases in the s i x a n d t w e l v e m o n t h periods of $ 5 7 , 0 0 0 , 0 0 0 and
$157,000,000, respe c t i v e l y .
C a s h of $733, 0 0 0 , 0 0 0 , ba l a n c e s w i t h other banks, excluding
r e c i p r o c a l balances, of $7, 2 6 7 , 0 0 0 , 0 0 0 , a nd r e s e r v e w i t h F e d e r a l
Re s e r v e banks of $ 8 , 2 5 0 , 0 0 0 , 0 0 0 , a t o t a l of $ 1 6 ,250,000,000, i n
creased $ 1 , 9 3 4 , 0 0 0 , 0 0 0 s i n c e June, a n d $ 1 , 2 4 8 , 0 0 0 , 0 0 0 since
Decem b e r 1941.
Bills payable, rediscounts, a n d other l i a b i l i t i e s for b o r
rowed m o n e y of $ 3 , 5 0 0 , 0 0 0 s h o w e d an in c r e a s e of $ 1 ,500,000
since June, but a d e c r e a s e of $ 2 6 2 , 0 0 0 in the a m o u n t r e p o r t e d
as of D e c e m b e r 1941.
T h e u n i m p a i r e d capital s t o c k of the banks was $1,504,000,000,
including $ 1 4 6 , 0 0 0 , 0 0 0 p r e f e r r e d stock.
S u r p l u s of $ 1 , 4 3 9 , 0 0 0 , 0 0 0
u n d i v i d e d pr o f i t s of $541,000,000, a nd r e s e r v e s of $255,000,000,
a total of $ 2 ,235 ,000,000, i n c r e a s e d $ 6 3 , 0 0 0 , 0 0 0 an d $ 1 0 1 , 0 0 0 , 0 0 0
in t h e s ix a n d t w e l v e m o n t h periods, r e s p e c t i v e l y .
T h e p e r c e n t a g e of loans a nd dis c o u n t s to t o t a l deposits on
De c e m b e r 31, 1942, was 20.14, in c o m p a r i s o n w i t h 26.81 on June
30, 1942, a nd 29.71 on D e c e m b e r 31, 1941,
Page 3
Statement showing comparison of principal items of assets and liabilities of active national
banks as
es of
December 31?* 19b2, June 30 , I9b2, and December 3 !, 19bi.
Humber of banks.... ............
ASSETS
Loans on real estate.......... .
Other loans, including overdrafts...
Total loans........ .
U. S. Government securities
Direct obligations..
Obligations fully guaranteed.....
Obligations of States and
political subdivisions.
Other bonds, notes and
debentures. .* ••.. .« ... ....... ......
Corporate stocks, including stock
of Federal Deserve Banks.
Total investments.... .
Total loans and investments.••••
Currency and coin.................
Deserve with Federal Deserve Banks..
Balances with other banks...........
Total cash, balances with
other banks, including reserve balances and cash
items in process of
collection......... ..
Other assets.......... .
TO tell ciSSB t»S*
••+»••+•••••
(In thousands of
i Dec. 31,
; June 30 ,.
i 19^2
i
I9b2
♦
*■
5.087
5,107
dollars)
t
:
i
Dec. 31, i Increase or decrease îIncrease or decrease
19 bl
: since June 30. 19b2 :since Dec. 31- 19bl
• Amount
î Percent 1 Amoun t
*■ Pprc^nt
5 ,12 3
-20
-.39
------.70
- * t '- '
$2 ,1 8 7 ,26 b
8 ,0 13 .63 b
10,200,798
$2 ,2 b 7 ,o6 l
8 ,65 b,73 b
10 .9 0 1.79 5
$2 ,255 ,b08
9,b9b,38b
1 1 ,7 5 1,7 9 2
22 ,26 l,bl0
1 ,563 ,9bi
1 3 ,299,723
1 ,629,269
9 ,786 ,71*3
2 ,286,309
2,022,b93
1 .960 ,53 b
i,bbi,l8b
.193*760
27,Usg,78S
37.683.586
/33.UÙ9
g, 21*9 ,5 13
1 / 7 *2 6 7,2 5 8
— 2 .6 6
-$ 6 s,ibb
- 7 .bi
-l,b82,850
- 6^ 3 “ •-i.5 p;o.9 Qb
-3.0 2
-I 5 .6 I
-13.20
8 ,961,68 7
67.38
-65,328
-b.òi
1 2 .u7 u .667
--72 2 ,36 s
1 2 7 .b6
-31-60
2 ,02 b,7 i5
6 1,9 59
3 .1 6
- 2,22 2
- .1 1
1 ,55 8 ,9 10
1 ,588,006
- 1 1 7 ,7 2 6
-7 .5 5
-lb6,822
-9.25
19b,952
18,61*3.388
. 29,5b5,183
728,309
7,1*89,119
1 /6 ,0 9 9 ,13 5
201,735
15,887,508
27,639.300
- .6 1
-1.192
8 ,839 ,boo ~ b 7 .bi
78 6,50 1
5 ,19 0
.7 1
760 ,391+ 1 0 .1 5
1 *16 8 ,12 3 1 9 .1 5
-7-975
11,595.280
10,0bb,286
- 53,002
-3.95
72.98
36 .^b
850,275
b 5 i,o67
1 1 .b9
6 .6 2
8 ,3 2
- 5 .5 6
25 «82
7,399,238
6 ,8 1 6 ,1 9 1
-$5 9 ,79 7
-6 bi,2oo
-700,997
8,138,b03
27.55
1 /1 6 ,250,270 1 / ib,3 16 ,5 6 3
15,001,930
1 ,933.70 7
1 3 .5 1
l,2bg,3b0
847,122
1/54,780,978
897,00b
b3 ,538 ,23 b
-10,097
10,062,013
¿1.18
.-b9,882
n,2b2,7bb
857.219
1 /44 ,718 ,9 0 5
22.50
- é ljïi-
Page 4
Comparison of principal items of assets and liabilities of national banks - continued
(In thousands of dollars)
: Dec* 31»
: . 19*4-2
June 30 ,
19*4-2
;
2
♦
•
Dec. 31, : Increase or decrease: Increase or decrease
: since June 30* 19*4-2 : since Dec. 31 * 19*41
19*41
Amount
2 Percent
2 Amount
¡Percent :
LIABILITIES
Deposits of individuals, partnerships and corporations:
21*81
$20,480,952
$2 6 ,73 0 ,6 9 1 $2 1 ,945,39 7
Demand......... .
$*4,785,29**
$6,2*49,-739
30.51
*4.30
7,964,912
7,
s
4
i
,032
3
*
42,607
*466,
*487
Time...........................
5-95
8 ,3 0 7 .5 19
-5,988
1
4
,19
6
3
9 .76
1
5
,0
6
1
36.09
Postal Savings deposits.......... .*
-5,123
9.0 73
1,175.214
4 ,833,109
3,705,*436
311.25
Deposits of U. S* Government.......
328.59
3,^57,895
1 ,1 2 7 ,6 7 3
Deposits of States & political
-*46,526
2,590,940
2,741,720
*4.02
- 1 .7 0
10*4,25*4
2,695.194
subdivisions............... .
9*01
6
1
1
,
8*49
6,789,685
902,837
Deposits of banks............. .
1/7,401,534 1 /6 ,498,697
13.89
Other deposits (certified and
1*4.71
86 *1*47
228,835
442,861
6 71,6 9 6
51*67
585.549
cashiers* checks, etc.)....... .
1
1
,
09
*
4
,
0
*
4
*
4
"
1
/
50
,
6
*
48,816
l/*+o,
6
5
9
,1
1
7
28.05
39.554,772
Total deposits..... ....... .
9 ,989,699
24-57
Bills payable, rediscounts & other
-262
2,01*11,5 0 2
74-58
liabilities for borrowed money...
- 6 .9 3
3.778
3 .5 16
IS.0 6
59.70
6
3
.I
6
378,342
Other liabilities...... ........
330,585
11,9*49
390,291
Total liabilities, excluding
11,153,488
2 7 .9 6
10,003,150
capital accounts............... 1/51,0*4-2,623 1/^1,039,^73
39,889.135
24.37
CAPITAL ACCOUNTS
Capital stock:
-*4*l6
-22, *483
168,530
Preferred stock..................
1*4-6,0*47
- 1 3 .3 4
152,379
-6.332
2,344
Common stock.....................
1
,
347,264
a 7 .
>77
10,371
1,355,291
1,357,635
-.80
-3.988
-12,112
-* 26
1 ,50 7,670
Total............ ............
1,503,682
1,515,79*4
3.60
1,1+38,61+5
27,238
1,388*672
1,*4-11,*407
Surplus............................
l>93
*+9^973
6*90
¿4*68
796,028
Undivided profits & reserves..... .
51.395
760,*4-15
7*+*+,633
3 5 .6 13
1.6 0
89,256
2**45
Total capital accounts.........
3 .679,492
58,863
3,649,099
3,738,355
Total liabilities & capital
25.82
1/54,780,978 1/1+4,718,965
11,-2*42,7*4*4
^CCOUHl;
22.50
*43,538*23*410,062,013
Reciprocal balances with banks in
—
—
—
-1*4.85
the United States............. .
349.306
*410,221
-60*915
Ratio of loans to total deposits...
20.1*$
26.81$
29 .7 1 $
ROTE: Minus sign denotes decrease.
I f
Excludes reciprocal interbank demand balances with banks in the United States, the amounts of which are shown above.
,
In call reports p r ior to Ju n e 30 , 19*+2, recipr o c a l b a l a n c e s were r e p o r t e d w g r o s s M .
rvQn.
if
TREASURY DEPARTMENT
Washington
I !'
FOR RELEASE, MORNING NEWSPAPERS
Press Service
Tuesday, March 9. 1943»________
3s-6 ^
The Secretary of the Treasury announced last evening that the tenders for $700,00Q,0(
S<
or thereabouts, of 91-day Treasury bills to be dated March 10 and to mature June 9, 1943,
which were offered on March 5, 1943, were opened at the Federal Reserve Banks on March 8,
i¿ated
The details of this Issue are as follows;
ich 5f
oi
Total applied for - $1,382,297,000
Total accepted
705,256,000
Range of accepted bids;
High
Low
Average price
ersfoi
|Ihe de'
- 99-930 Equivalent rate of discount approx. 0,277% per annum
- 99.905
■
■
*
«
*
0.376% "
"
- 99.906
*
"
*
"
0.371* »
"
(9 percent of the amount bid for at the low price was accepted.)
fötal <
fötal!
J llig ti ■
¡if ■
Federal Reserve
District
Total
Applied For
Total
Accepted
Boston
New Tork
Philadelphia
Cleveland
Richmond
Atlanta
Chicago
St. Louis
Minneapolis
Kansas City
Dallas
San Francisco
$
$
TOTAL
52,400,000
862,806,000
24,731,000
24,631,000
29,275,000
13,935,000
169,025,000
46,242,000
20,828,000
26,599,000
10,178,000
101,645.000
$1,382,297,000
37,502,000
328,292,000
18,985,000
21,628,000
25,806,000
12,093,000
82,294,000
26,655,000
20,755,000
21,076,000
9,894,000
100.276.000
Hrerage
! price -
it
! or;
lelphii
$705,256,000
m
TREASURY DEPARTMENT
Washington
FOR RELEASE, MORNING- NEWSPAPERS,
Tuesday, M a r c h 9, 1943.
3/8/43
P r ess Se r v i c e
No. 35-62
-------------------
T h e S e c r e t a r y of the T r e a s u r y a n n o u n c e d last
tenders for $700.,000,000.,
or thereabouts,
of 9 1 - d a y T r e a s u r y bills
to be d a t e d M a r c h 10 a n d to m a t u r e June 9,
on M a r c h 5»
1943»
were
evening that the
1943,
w h i c h w e r e offered
opened at t he F e d e r a l R e s e r v e Banks
on M a r c h
8,
T h e details
of this
issue a r e as follows: -
T o t a l a p p l i e d for - $ 1 , 3 8 2 , 2 9 7 , 0 0 0
Total accepted
705,256,000
Range
of a c c e p t e d bids:
High
- 9 9 * 9 3 0 E q u i v a l e n t r a t e of di s c o u n t approx*
0.211% per
low
- 99.905
0,316% per
.
Average
price
»
«
"
«
annum
- 9 9 .906
"
,f
§
|
»
0.311% per
annum
(9 percent of the a m o u n t bid for at th e l o w p r i c e was a c c e p t e d * )
Federal R e s e r v e
I District________
Total
A p p l i e d F or
I Boston
I New Y o r k
■Philadelphia
1 Cleveland
1 Richmond
I Atlanta
I Chicago
I St. Louis
I Minneapolis
IKansas Cit y
IDallas
[San Francisco
#
TOTAL
T o tal
Accepted
52 ,400,000
862 ,808, 000
U »731, 000
24 ,■631, 000
29 ,275, 000
15 ,935, ■000
169 ,025, 000
46 ,242,■000
20 ,828, 000
2:6 ,599, 000
10 ,178, 000
101 ,645, 000
$ 37,502,000
328.292.000
18.985.000
21.628.000
25,806,000
12.093.000
82.294.000
26.655.000
20.755.000
21.076.000
9,8 9 4 , 0 0 0
100 .276.000
$1,382,297,000
#705,256,000
- 0O 0 -
fmstmt Bwjrnnmn
Bureau of Internai levenue
Washington, B. 0,
F01 i m m u s ì m i n
Monée?, March 8 , 1943
i*rees lelease »0 .
Con® lesionar of Internai Sevenae Ouy T. Helvering tede? «nphaeiied
that there vili not he a blanket extensión for thè flllng of 1942
individuai and corporation tacóme tax returna.
Be pelmted out that
penaltiea and intereet vili attacfe if thè retarne are not tlnely filed.
Sene reporte heve heen reeeived hy thè Bureau of Internai levenue
that a inali nunber of taxpayere are flllng retarne vithout renlttlng
thè firet quarterly payaent.
thè Oomalesloner advisee that where a
taxpayer falle to pay thè firet «parterly paynent, thè %&ole anount of
thè tax liability nuet be paid upon notiee and denand fron thè Colleetor
thè Conniesioner etated that there wae no reaeon for nleonderetanding on thè part of taxpayere einoe repreeeatativee of thè Settate and of
thè House of Representativos ♦ ef thè Treasury Department and of thè
Bureen of Xntornal levenue, bave repeatedly, over thè tedio and
through thè publlc prese, advieed thè taxpeyere of tho country that
retarne nuet he filed and tax pald on or before March 15th.
In merltorieus nuoce thè locai Colleetor of Internai levenue hai
authority te grant a eixty-day extensión.
It le felt that all taxpaytr*
ae a part of thè var effort, vili cooperate in filing tinely retarne.
TREASURY BIPARTMOT
Bureau of Internal Revenue
Washington, R. C.
FOR IMMEDIATE RELEASE
Monday, March 3, 1943
Pro«« Release So.
Commissioner of Internal Revenue
Guy
3 ^
~
T* Helvering today emphasized
that there will not he a blanket extension for the filing of 1943
individual and corporation income tax return»*
Re pointed out that
penalties and interest will attach if the returns are not IHUrty filed«#*Some reports have been received by the Bureau of Internal Revenue
that a snail number of taxpayers are filing returns without remitting
the first quarterly payment*
The Commissioner advise¿¿that where a
taxpayer fails to pay the first quarterly payment, the whole amount of
the tax liability must he paid upon notice and demand from the Collector«
The Commissioner stated that there was no reason for misunderstand
ing on the part of taxpayers since representatives of the Senate and of
the Rouse of Representatives» of the Treasury Department and of the
Bureau of Internal Revenue, have repeatedly, over the tmdlo and
through the public press, advised the taxpayers of the country that
returns must he filed and tax paid on or before March 15th*
In meritorious cases the local Collector of Internal Revenue has
authority to grant a sixty-day extension*
It is felt that all taxpayers,
as a part of the war effort, will cooperate In filing timely returns*
TREASURY DEPARTMENT
Bureau of Internal Revenue
Washington, D. C.
Press Release No*
K m IMMEDIATE RELEASE
Monday, March 8» 1943
3 vf- 6 3
Commissioner of Internal Revenue Guy T* Helvering today emphasized
that there will not he a blanket extension for the filing of 1942
individual and corporation income tax returns*
He pointed out that
penalties and interest will attach if the returns are not CIMUlj filed*-*.
Some reports have been received by the Bureau of Internal Revenue
that a small number of taxpayers are filing returns without remitting
the first quarterly payment*
The Commissioner advisej^ that where a
taxpayer fails to pay the first quarterly payment, the whole amount of
the tax liability must be paid upon notice and demand from the Collector.
The Commissioner stated that there was no reason for misunderstand
ing on the part of taxpayers since representatives of the Senate and of
the House of Representatives, of the Treasury Department and of the
Bureau of Internal Revenue, have repeatedly, over the radio and
through the public press, advised the taxpayers of the country that
returns must be filed and tax paid on or before March 15th*
In meritorious cases the local Collector of Internal Revenue has
authority to grant a sixty— day extension*
It is felt that all taxpayers,
as a part of the war effort, will cooperate in filing timely returns*
TREASURY DEPARTMENT
B u r e a u of Internal Revenue
Washington
Press Service
No. 35-63
FOR I M M E D I A T E RELEASE,
Monday, M a r c h 8, 1945.
C o m m i s s i o n e r of Internal
Revenue G uy T. H e l v e r i n g t o d a y
e m p h a s i z e d that there will n o t be a b l a n k e t e x t e n s i o n for
the f i l i n g of 1942 i n d i v i d u a l
turns.
and c o r p o r a t i o n income
He p o i n t e d out that p e n a l t i e s
tax r e
and interest will a t
tach if the returns are n ot f i l e d on time.
Some r e p orts hav e b e e n r e c e i v e d b y the B u r e a u of Internal
Revenue that a small n u m b e r of t a x p a y e r s are filing returns
w i t h o u t r e m i t t i n g the first q u a r t e r l y payment.
The C o m m i s
sioner a d v i s e d that w h ere a t a x p a y e r .fails to p ay the first
q u a r t e r l y payment, the w h o l e a m o u n t of the tax l i a b i l i t y
m u s t be p a i d u p o n n o t i c e and d e m a n d f r o m the Collector*
The C o m m i s s i o n e r stated that there was no r e a s o n for
m i s u n d e r s t a n d i n g on the part of taxpayers since r e p r e s e n t a
tives of the Senate and of the H o u s e of R e p r e s e n t a t i v e s , of
the T r e a s u r y D e p a r t m e n t and of the B u r e a u of Internal R e v
enue, hav e repeatedly, over the radio and t h r o u g h the p u b
lic press, a d v i s e d the taxpayers of the c o u n t r y that returns
m u s t be f i l e d and tax p a i d on or b e fore M a r c h 15th.
In m e r i t o r i o u s cases the local C o l l e c t o r of Internal
Revenue has a u t h o r i t y to grant a s i x t y - d a y extension.
It
is felt that all taxpayers, as a par t of the war effort,
w i l l cooperate in f i l i n g t i m e l y returns.
-oOo-
»"U
FOR IMMEDIATE RELEASE
March 9. 19U3.
The Bureau of Customs announced today preliminary figures showing the
quantities of coffee authorized for entry for consumption under the quotas for
the twelve months commencing October 1, 19i*2, provided for in the Inter-American
Coffee Agreement, proclaimed by the President on April 15>, 191*1> as follows*
Country of
Production
:
* Quota Quantity
t
(Pounds) 1/
*
#
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, Yemen, and Saudi
)
Arabia
)
Other countries not signa-)
tories of the Intel—
)
American Coffee Agree- )
ment
)
l/
1,535,367,083
520,081»,629
33,019,261»
13,212,917
17,533,713
21»,767,091»
99,680,281»
88,33l»,W»2
1»5,1*00,298
2,908,617
78,758,056
32,1*62,515
1»,127,276
61,251»,106
51,653,778
Quotas revised.
-oOo-
:
:
Authorized for entry
:
for consumption
: As of (Date;
: (Pounds;
Feb. 27, 19l»3
tt
tt
210 ,¡»20,323
219,788,391
9,616,691*
8,126,755
9,3U9,179
12,192,231
29,935,091»
30,727,098
33,789,977
1,239,899
20,ll»5,2l»3
2,357,71*0
155
22,029,625
tt
19,529,387
n
n
h
it
it
tt
n
tt
tt
tt
n
TREASUKY DEPARTMENT
Washington
POR IMMEDIATE RELEASE,
Wednesday, March 10, 1943.
Press Service
No. 35-64
The 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 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
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 Agree- )
ment
)
U
Quota Quantity
(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
51,653,778
Quotas revised.
-oOo-
Authorized for entry
for consumât ion
As of (Date)
t (pounds)
Peb. 27, 1943
it
ti
n
it
it
it
ti
it
fi
hh
h
a
h
H
210,420,323
219,788,391
9,616,694
8,126,755
9,349,179
12,192,231
29,935,094
30,727,098
33,789,977
1,239,899
20,145,243
2,357,740
155
22,029,625
19,529,387
~2~
COTTON CARD STRIPS,/~COMBER WASTE, LAP WASTE, SLIVER WASTE, AND ROVING WASTE,
WHETHER OR NOT MANUFACTURED OR OTHERWISE ADVANCED IN VALUE. Annual quotas
commencing September 20, by Countries of Origin:
Sj
Total quota, provided, however, that not more than 33"*l/3 percent/ of 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)
:
: TOTAL IMPORTS :ESTABLISHED:Imports Sept. 21,
Country of Origin: Established : Sept. 21, 19^2:33~l/3$
*19^2»
___________________ : TOTAL QUOTA t Feb. 27*
:Total Quota: Feb. 27« 19li3.
1/
United Kingdom..........
Canada,........... .
.
France
British India,..,.. .
Netherlands...... .. .
Swit zerland.. . . . . . . .
Belguim. . . . . . . . . . . . .
«1apan.. . . . . . . . . . . . . .
China,.... ..
Egypt.... ..........
.
Cuba...... ..
Germany.
.
Italy.,................
TOTALS
323 ,1*57
-
239,690
2 2 7 ,1+20
81,1*95
6 9,627
6s 2 U0
61,823
-
-
,
W+.3SS
-
-
38,559
3^1,535
1 7 ,3 2 2
8.135
6 .5 UU
76,329
-
75*807
2 2 ,7^7
lit,796
12 ,8 5 3
-
—
-
-
mm
-
-
2 1,2 6 3
5 ,1*82,509
1 ,1*1*1 ,1 5 2
11*3,318
2 5 ,1*1*3
7 ,OSS
-
-
-
«•
1 ,599.886
] J
Included in total imports, column 2.
2/
The President*s proclamation, signed March 31» 19^2, exempts from import
quota restrictions card strips made from cottons having a staple l~3 /l6
inches or more in length.
-oOo-
PCB IMMEDIATE RELEASE
March 9, 191+3»
3
6^6
The Bureau of Customs announced todpy that preliminary reports from the
collectors of customs show imports of cotton and cotton waste chargeable to the
imppa*^ quotas established by the President1s proclamations of September 5» 1939,
end December 19 , 19^0,-as followst during the period September 21, 19^2 , to
February 27» 19ii3*
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 20, by Countries of Origins
Country of
Origin
rounds;
1
Staple length less : Staple length l-l/8" or more
•
f
but less than 1-11/l6"
than 1-1/8"
♦
:
:Imports Sept,: Established : Imports Sept,
:Established:21, 19I+2 , to :
Quota
: 21 , 19U2 , to
•
«
Quota
:Feb,27» 19k3 : 145,656,1420 : Feb. 27. 19U3.
Egypt and the AngloEgyptian Sudan,.... .
Peru,,,...............
British India,,,,,,.,,,,
China,.,,,,,......
Mexico ................ .
Brazil,,,.............
Union of Soviet
Socialist Republice,.,,
Argent ina, ......... ....
H a i t i , ......
Ecuador
Honduras,...... .......
Paraguay,
Colombia,......... .
I r a q , . ............
British East Africa,,.,,
Netherlands East Indies,
Barbados...............
Other British West
Indies
Nigeria..........
Other British West
Afrirt«
Pfj| ----------Other French Africa j/*
Algeria and Tunisia,. , . .
783,816
2U7.952
2,003,1483
1 *370,791
8,883,259
612,723
1+75 ,12U
5.203
237
9.333
752
871
33,lU»,755
889,231»
m
2l»7,952
—
8,883,259
618,723
mm
mm
«V
•
237
9,263
mm
mm
•1
mm
w
12U
195
2,2k0
mm
-A
M
m
-
mm
mm
mm
71,388
mm
-
21,321
_
5.377
-
16 ,001+
689
mm
mm
rnm
-
lV,516,882
mm
mm
9,759,l»3l»
i»5 ,656,i»20
Other than Barbados, Bermuda, Jamaica, Trinidad, and Tobago,
Other than Gold Coast and Nigeria,
Other than Algeria, Tunisia, and Madagascar,
3^,003,989
'_r ■
TREASURY DEPARTMENT
Washington
FOE IMMEDIATE RELEASE,
Wednesday, March 10. 1943»
Pr®ss ®®r^ Ce
0*
The Bureau of Customs announced today that preliminary reports from
lectors of customs show imports of cotton and cotton waste chargeable to
port ouotas established by the President’s proclamations of September 5,
and December 19, 1940, as follows, during the period September 21, 1942,
February 27, 1943.
the col
the im
1939,
to
COTTON HAVING A STAPLE OP 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
(In Pounds)
:
Staple length less ! Staple length 1-1/8" or more,
but less than 1-11/16"
:
than 1-1/8"
:
:Imports Sept.: Established : Imports Sept.
Quota
î 21, 1942, to
:Established:21, 1942, to :
:
Quota
:Feb.27, 1943 ! 45,656,420 : Feb. 27, 1943.
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
1/,..«■.......
Nigeria...... ........ .
Other British West
Africa
2/........... .
Other French Africa
..
Algeria and Tunisia...,. .
1/
2/
3/
783,816
247,952
2,003,483
1,370,791
8,883,259
618,723
247,952
8,883,259
618,723
475,124
5,203
237
9,333
752
871
124
195
2,240
71,388
—
237
9,263
—
—
—
—
—
—
33,114,755
889,234
—
—
—
—
—
—
**
**■*
—
•—
21,321
5,377
-
—
16,004
689
-
—
—
—
14,516,882
9,759,434
**
45,656,420
Other than Barbados, Bermuda, Jamaica, Trinidad, and Tobago.
Other than Gold Coast and Nigeria.
Other than Algeria, Tunisia, and Madagascar.
34,003,989
2
COTTON CARD STRIPS, 2/ COMBER TASTE, LAP TASTE, SLIVER WASTE, AMD ROVING WASTE,
WHETHER OR MOT MANUFACTURED OR OTHERWISE ADVANCED IN VALUE-. Animal quotas
commencing September 30, by Countries of Origin:
Total cruota, provided, however, that not more than 33-1/3 percent of the auotas
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, France, Netherlands, Switzerland,
Belgium, Germany and Italy:
Countly of Origin
United Kingdom....
Canada............
Franee............
British India......
Netherlands.......
Switzerland.......
Belgium...........
Japan..............
China...... .
Egypt,.............
Cuba..............
Germany,..........
Italy..... ........
(in Pounds)
TOTAL IMPORTS :ESTABLISHED:Imports Sept. 21,
:¡Established : Sept. 21, 1942 :33-1/3$ of $1942, to Feb. 27,
: TOTAL O.UOTA : Feb. 27. 1943 :Total Quota:1943,
1/
1,441,152
81,495
61,823
-
68,240
m
-
—
—
22,747
14,796
12,853
#
—
—
17,322
—
—
—
-
-
—
-
~
u
-
25,443
7,088
—
1,599,886
-
21,263
5,482,509
1/
—
75,807
143,318
—
Included in total imuorts, column 2,
8/ 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,
-oOo’
2
e
a
Commodity
Silver or black
foxes, furs, and
articles*
Foxes valued under
$ 2i?0 ea. and whole
furs and skins
Tails
Paws, head, or other
separated parts
*
Unit
timports as of
Established Quota
2
of
2February 27,
* Period and Country * Quantity 2 Quantity « 191*3
1
Month of Feb*
Canada
Other than Canada
12 months from
Dec. 1, 19U2
12 months from
Dec. 1, 19l*2
17 ,5 0 0
Number
5,098
7,50 0
Number
5
5,000
Piece
1*62
500
Pounds
1*62
None
Piece plates
it
550
Pounds
Articles, other
than piece plates
it
500
Unit
-oOo-
25
FOE IMMEDIATE RELEASE,
March 9, 19U3*
The Bureau of Customs announced preliminary figures for imports of
commodities within quota limitations provided for under trade agreements,
from the beginning of the quota periods to January 30, 19l*3, inclusive, as
follows:
:
Commodity
:
:
llnit
: Imports as of
Established Quota
:
of
: February 27,
Period and Country : Quantity: Quantity : 19H3 ♦
Miole milk, fresh
or sour
Calendar year
3,000,000
Gallon
873
Cream, fresh or sour
Calendar year
1,500,000
Gallon
83
Fish, fresh or
frozen filleted,
etc., cod, haddock,
hake, pollock,
cusk and rosefish
Calendar year
1 5 ,000,000
Pound
1,272,877
White or Irish
potatoes
certified seed
Other
12 months from
Sept. 15, 191*2
12 months from
Sept» 15
90,000,000
60,000,000
Pound
Pound
3U,U70,70l>
576,891
Red cedar shingles
Calendar year
Cuban filler tobacco,
unstemmed or stemmed
(other than
cigarette leaf
tobacco), and
scrap tobacco
Calendar year
Molasses and sugar
sirups containing
soluble nonsugar
solids equal to
more than 6% of
total soluble
solids
Calendar year
2,506,072
Square
182,388
Pound
(unstemmed
22,000,000 equivalent) 5*188,006
1 ,500,000
Gallon
2l*,0l8
TREASURY DEPARTMENT
Washington
Press Service
No. 35-66
FOR IMMEDIATE RELEASE,
Wednesday, March 10, 1943.
The Bureau of Customs announced preliminary figures for imports of commod
ities within ouota limitations provided for under trade agreements, from the be
ginning of the ouota periods to January 30, 1943, inclusive, as follows;
Commodity
:
?
Unit
; Imports as of
Established Quota
’
of
; Eebruary 27,
1943
Period and Country Î Quantity l Quantity :
Whole milk, fresh
or sour
Calendar year
3,000,000
Gallon
873
Cream, fresh or sour
Calendar year
1,500,000
Gallon
83
Fish, fresh or
frozen filleted,
etc,, cod, haddock,
hake, -pollock,
cusk and rosefish
Calendar year
15,000,000
White or Irish
potatoes
certified seed
Other
12 months from
Sept, 15, 1942
12 months from
Sept, 15
90.000.
60.000.
Red cedar shingles
Calendar year
Pound
1,272,877
000
Pound
000
Pound
34,470,704
576,891
2,506,072
Sauare
Cuban filler tobacco,
unstemmed or stemmed
(other than
cigarette leaf
tobacco), and
scrap tobacco
Calendar year
22,000,000
pound
(unstemmed.
eouivalent)
Molasses and sugar
sirups containing
soluble nonsugar
solids eoUal to
more than 6^ of
total soluble
solids
Calendar year
1,500,000
Gallon
182,388
5,188,006
24,018
2
Commodity
Silver or "black
foxes, furs, and
articles:
Foxes valued under
$250 ea, and whole
furs and skins
Tails
Paws, head, or other
separated parts
:
:Imports as of
Unit
{February 27,
Established Quota
:
of
1943.
Period and Country i Quantity: Quant ity :
Month of Feb,
Canada
Other than Canada
12 months from
Dec, 1, 1942
12 months from
Dec, 1, 1942
17,500
Number
5,098
7,500
Number
5
5,000
Piece
462
500
Pounds
462
None
Piece plates
i
550
Pounds
Articles, other
than piece plates
ti
500
Unit
-oOo-
25
FOR IMMEDIATE RELEASE,
March 9 » l$ii3 *
* ---
f i t %mmm #f
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temi«sai*
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7f5,000
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ti
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100
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ti
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««a-
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m
m
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m
m
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aa
m
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ti
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ti
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m
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m
ti
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100
100
'm
ti
ti
ti
100
100
Ì M foS&
ti
»
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3 , n f.o o o
a ,o o o
il,###
13,000
«,000
?5f0©0
1,000
3,000
5,000
1,000
1,000
1,000
19,000
«,000
lftf006
1,000
1,000
1,000
1,000
1,000
1,000
1,000
1,000
1,000
1,000
Ü
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ti
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H
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y
y
TREASURY DEPARTMENT
Washington
I** ¡FOR IMMEDIATE RELEASE,
¡1Thursday, March 11, 1943.
Press Service
No. 35-67
The Bureau of Customs announced today preliminary figures showing the quanif tities of wheat and wheat flour entered, or withdrawn from warehou se, for conif
sumption under the import quotas established in the President’s proclamation of
May 28, 1941, as modified by the Pres ident’s proclamation of April 13, 1942, for
►i
il *
iif the twelve months commencing May 29, 1942, as follows
* i
Irti
'1
4
■Conntry
of
Origin
f
i
!
:
Wheat, wheat flour, semolina
crushed or cracked wheat and
similar wheat products
:
Imports
Established ; May 29, 1942,
Quota
: Feb. 27. 19*3.
WHEAT
Imports
i Established ; May 29, 1942, to
î
Quota
t Feb, 27, 1943
: Canada
1 China
1 Hungary
[ Hong Kong
:1 Japan
JJUnited Kingdom
I Australia
il Germany
]1 Syria
1 New Zealand
j Chile
I Netherlands
1 Argentina
Italy
1 Cuba
1 France
1 Greece
j | Mexico
|Panama
•
1jUruguay
|J[ Poland and Danzig
il Sweden
; Yugoslavia
Norway
k.Canary Islands
•Rumania
Guatemala
I Brazil
i Union of Soviet
Socialist Republic s
^Belgium
(Bushels)
(Bushels)
795,000
-
795,000
-
§
~
100
100
100
100
2,000
100
1,000
100
1,000
100
100
100
100
800»000
*
■.m
~
'—
—
—
- '
_
795,000
•o0o~
(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
12,000
1,000
1,000
1,000
1,000
1,000
1,000
1,000
1,000
1,000
1,000
—
—
-
3,815,000
—
—
ü
4,000,000
**
44
.
—
—
—
-**
—
—
—
-
3,815,044
- 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.
-
2
-
Reserve Banks and Branches,following which public announcement will he made
hy 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
March 17, 1943________ •
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
j t
c f
Washington
POR. RELEASE, MORNING NEWSPAPERS.,
Friday, Mhrch 12, 1943_______ _.
to
The Secretary of the Treasury, by this public notice, invites tenders
for $ SOO 000 000
. or thereabouts, of
91 -day Treasury bills, to be issued
*~15S
to
on a discount basis under competitive bidding. The bills of this series will
be dated
March 17» 1943
, and will mature
t o '
when the face amount will be payable without interest.
l6> 1943_______ 1.
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 sgBlJboflt time, Monday, March 15> 1943 . ,
to
Tenders will not be received at the Treasury Department, Washington. Each tender j
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 secun- j
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 toy
an express guaranty of payment by an incorporated bank or trust company.
Immediately after the closing hour, tenders will be opened at the Federal
FOR RELEASE, M O R N I N G NEWS P A P E R S ,
Friday, M a r c h 12, 1945.___________
3-11-43
TREASURY DEPARTMENT
Washington
The S e c r e t a r y of the T r e asury,
invitejs tenders
for $ 8 0 0 , 0 0 0 , 0 0 0 ,
T r e a s u r y bills,
to be
p e t i t i v e b i d ding.
M a r c h 17,
1943,
b y this p u blic notice,
or thereabouts.,
of 9 1 - d a y
i s s u e d on a d i s c o u n t b a sis u n d e r c o m
The b i lls
of this
and will m a t u r e
series will be d a ted
June 16,
1943,
w h e n the face
amount w i l l be p a y a b l e w i t h o u t interest.
T h e y will be i s sued
in b e a r e r f o r m only,
of $1,000,
$10,000,
$ 1 0 0,000,
and in d e n o m i n a t i o n s
$ 5 0 0,000,
a nd $ 1 , 0 0 0 , 0 0 0
$5,000,
( m a t urity value).
T e n d e r s will be r e c e i v e d at Federal Reserve B a nks and
B r a n c h e s up to the c l o sing hour, two o ’clock p. m . , E a s t e r n
W a r time, Monday, M a r c h 15, 1943.
T e n d e r s will n ot be r e
ceived at the T r e a s u r y Depa r t m e n t , W a s h i n g t o n . ' E a c h t e n d e r
m u s t be for an even m u l t i p l e of $1,000, and the price o f f e r e d
m u s t be e x p r e s s e d on the b a s i s of 100, w i t h n ot m o r e than
three decimals, e. g,, 99.925.
Fra c t i o n s m a y n o t be used. It
is u r g e d t h a t ' t e n d e r s be m a d e on the p r i n t e d forms and f o r
w a r d e d In the special envelopes w h i c h will be s u p p l i e d b y
Federal Reserve B a n k s or B r a n c h e s on a p p l i c a t i o n therefor.
T e n d e r s will be r e c e i v e d 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 ted b a n k s and trust companies and f r o m r e s p o n s i b l e and r e c
o g n i z e d d e a lers in i n v e s t m e n t securities.
T e n d e r s frdm others
m u s t be a c c o m p a n i e d ' b y p a y m e n t of 2 p e r c e n t of the face amount
of T r e a s u r y bills a p p l i e d for, u n l e s s the tenders are a c c o m
p a n i e d b y an express g u a r a n t y of p a y m e n t b y an i n c o r p o r a t e d
b a n k or trust company.
;
I m m e d i a t e l y a f t e r the closing hour, tenders will be o p e n e d
at the Federal R e s erve B a nks and Branches, f o l l o w i n g w h i c h p u b
lic a n n o u n c e m e n t will be m a d e b y the S e c r e t a r y of the T r e a s u r y
of the amount and price range of a c c e p t e d bids.
Those s u b
m i t t i n g tenders will be a d v i s e d of the a c c e p t a n c e or r e j e c t i o n
thereof.
The S e c r e t a r y of the T r e a s u r y e x p r e s s l y reserves the
right to accept or r e ject a ny or all tenders, in whole or In
part, and his a c t i o n in any s u c h r e s p e c t shall be final.
Pay
m e n t of a c c e p t e d tenders at the p r ices o f f e r e d m u s t be m a d e or
c o m p l e t e d at the Federal R e s e r v e B a n k in c ash or o t her i m m e
d i a t e l y ava i l a b l e funds on M a r c h 17, 1943.
35-68
(Over)
2
The income d e r i v e d .¡from T r e a s u r y bills, whether'interest
or g ain from the sale or:'other d i s p o s i t i o n of the bills-, shall
not have a ny exemption, as such, and loss fro m the sale or
o t h e r d i s p o s i t i o n of T r e a s u r y bills shall not have any special
treatment, as such, u n d e r Federal tax Acts n o w or-hereafter en
acted.
The bills, shall b e subject to estate, inheritance, gift, |
or other excise taxes, w h e t h e r * F e d e r a l or State, but shell be
exempt from all t a x ation n o w or h e r e a f t e r im p o s e d on the prin
cipal or i n t e r e s t th e r e o f b y any'State, or any of the posses
sions of the U n i t e d States, or b y any local taxing authority.
For purposes of tax a t i o n the' amount- of d i s c o u n t at w h i c h Treas- |
u r y bills are o r i g i n a l l y sold b y the U n i t e d States shall be con- j
sidered to be interest.
Und’
e r Se c t i o n s .42- and 117 (a) (1) of
the Internal Revenue Code, as a m e n d e d b y S e c t i o n 115 of the
Revenue Act of 1941, the 'amount of d i s count at w h i c h bills issued
h e r e u n d e r are sold shall n o t be considered- to accrue until such
b i l l s shall be s o l d , 'r e d e e m e d or o t h e r w i s e d i s p o s e d of, and suchj
b i lls are ex c l u d e d from c o n s i d e r a t i o n as capital assets.
Accord»:
ingly, the o w n e r of T r e a s u r y b i l l s - ( o t h e r than life insurance
companies) i s s u e d h e r e u n d e r n e e d include in his income tax return
o n l y the: dif f e r e n c e b e t w e e n ’the price p a i d for suc h bills,
w h e t h e r on original issue or on subsequent p u r c h a s e , ^ a n d the
amount a c t u a l l y re c e i v e d ‘e i t h e r u p o n sale, or r e d e m p t i o n at matu
r i t y d u r i n g the taxable y e a r for w h i c h the retu r n is made, as
o r d i n a r y g a i n or loss.
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 No. 418,. as .amended, and this
notice, pre s c r i b e the terms of the T r e a s u r y b i lls a nd govern
-the conditions of,,.their issue..
Copies of the c i r cular may be
o b t a i n e d f r o m any Federal Reserve B a n k or Branch.
-oO o-
j
Circulation,
a n d a m e m b e r o f t he A d v e r t i s i n g Council,
'i
wY*?" YY 1 )|
t he o f f i c i a l a d v e r t i s i n g bod y w h i c h coo p e r a t e s w i t h
G o v e r n m e n t agencies.
- 0O 0
f\JLA^O^i
(/>
'~yu, s 6
'^Ukj^ L //, >9 Y3
S e c r e t a r y M o r g e n t h a u a n n o u n c e d t o d a y the appoint
men t of Stuart Peabody,
d i r e c t o r of a d v e r t i s i n g for
th e B o r d e n C o m p a n y of N e w Y o r k City,
as A d v e r t i s i n g
S p e c i a l i s t in c h a r g e of p r o m o t i o n in c i d e n t to the
S e c o n d W a r Loan
c a m paign w h i c h begins
In his n e w capacity,
W i l l i a m M. Robbins,
on A p r i l 12.
Mr. P e a b o d y w i l l a s s i s t
n a m e d r e c e n t l y by Mr. M o r g e n t h a u
to h e a d t he n e w U n i t e d States
T r e a s u r y W a r F i n ance
Committee.
f i l i a t e d w i t h the Borden C o m p a n y f o r the last
n i n e t e e n years,
a l l of w h i c h h a v e been spent in t he
a d v e r t i s i n g field,
a b s e n c e to ai
a n d has b e e n g r a n t e d a leave of
,sury.
He i s ^ p r e s i d e n t of the A s s o c i a t i o n of N a t i o n a l
Advertisers,
a d i r e c t o r of the A u d i t B u reau of
TREASURY DEPARTMENT
Washington
F O R I M M E D I A T E RELEASE,
Thursday, M a r c h 11. 1945.
P r ess S e r v i c e
p ,
| 5 -69
S e c r e t a r y M o r g e n t h a u a n n o u n c e d t o d a y the a p p o i n t m e n t
of S t u a r t Peabody,
d i r e c t o r of a d v e r t i s i n g for th e Borden
C o m p a n y of N e w Y o r k City,
charge of p r o m o t i o n
p a i g n w h i c h begins
i n c ident to t he S e c o n d W a r Loan
in
cam
on A p r i l 12,
. In his n e w capacity,
M* Robbins,
as Advertising. S p e c i a l i s t
Hr*
P e a b o d y w i l l a s sist W i l l i a m
n a m e d r e c e n t l y by Hr. M o r g e n t h a u to hea d the
n e w U n i t e d S t ates T r e a s u r y W a r F i n a n c e Committee.
Mr,
P e a b o d y w i l l serve for t he d u r a t i o n of t he drive.
H e has been a f f i l i a t e d w i t h the B o rden C o m p a n y
last n i n e t e e n years,
a d v e r t i s i n g field.,
for the
all of w h i c h have been spent
in the
a n d has been g r a n t e d a l e ave of a b
sence to a i d t he Treasury.
He
is a f o r m e r p r e s i d e n t
Advertisers,
of t he A s s o c i a t i o n
a d i r e c t o r of the A u d i t Bureau
a nd a m e m b e r of t he A d v e r t i s i n g Council,
the
of N a t i o n a l
of Circulation,
official a d
v e r t i s i n g b o d y w h i c h coo p e r a t e s w i t h G o v e r n m e n t agencies.
-0O0-
E f f e c t of R u m i Pla n
All I n c o m e Groups
T h e t o t a l e s t i m a t e d a m o u n t of income t a xes to be reported by
i ndividuals on 1942 incomes is $ 9 , 8 1 5 , 0 0 0 , 0 0 0 .
U n d e r t he o r i ginal
Ruml Plan, this r e p r e s e n t s t h e a m o u n t to be cance l e d in order- to
place al l t a x p a y e r s on a p a y - a s - y o u - g o basis.
T h e d i s t r i b u t i o n by net i n c o m e
T a b l e 1,
a n d t a xes
a g e tax
H u m b e r of
taxpayers
Under $1, 000
§1,000 - 2,000
§2,000 - 3,000
§3,000 - 4,000
§4,000 - 5,000
§5,000 - 10,000
§10,000 - 25,000
§25,000 - 100,000
§100,000 - 2GO, 000
§200, 000. - 500, 000
§500,000 - 1,000,000
§1,000,000 and. over
9*385, 000
ITv 363, 000
6, 887, 000
2, 697, 000
1, 176, 000
943, 000
299, 000
75, 000
4, 300
1, 200
200
60
i
—O!
C
CO
-
is as follows;
E s t i m a t e d n u m b e r of taxpayers, net income,
¿or 1942, by net i n c o m e classes; a n d a v e r
P e t income
classes
Total
classes
58,
560
Be t
Income
income
tax
(In m i l l i o n s
of d o l l a r s )
1 7,518
1
•16,564
9,349
5 , 252
6,178
4,369
3,051
568
345
147
99
318
2,170
1,176
927
645
1,024
1,193
1,470
397
275
126
94
33.88
124.98
170.76
343.72
548.47
1,085.90
3 , 9 89.97
19,600.00
92, 3 2 5 . 5 4
•229,166.67
630,000.00
5
1, 6 6 , 666.64
$79,242-
$9,815
I
252.76
25,802
$
Average
tax per
taxpayer
- 2 Table 2#
Amount of taxes to be canceled at selected levels
of net income.
Married persons - No dependents
Net income
before personal
exemption
$
'
1,200
1,300
1, 500
2,000
2,500
3,000
4,000
5,000
10,000
15,000
20,000
25,000
50,000
100,000
500,000
1,000,000
5,000,000
1/
.amount of
tax at 1942
rates.1/
4>
Net income
after tax
4
—
13
48
.
1,200
1,287
1,452
140
232
324.
1,860
2,268
2,676
3,468
532
746
4,254
2,152
4,052
.6,452
9,220
25,328
7,848
10,948
64,060
414,000
854,000
4,374,000
13,548
3
•
15,780
24,672
35,940
86,000
146,000
626,000
Excludes Victory Tax* Rates based on 1942 Revenue Act,
assumes maximum, earned income credit and no net long-term
gains.
M a r c h 11,
1943?
RBB
IS
y
TREASURY DEPARTMENT
Washington
FCR R E L E A S E , M O R N I N G N E W S P A P E R S ,
S a t u r d a y , M a r c h 13» 1 9 4 3 * ______
Press
*>•
Service
%
(The f o l l o w i n g a d d r e s s b y S E C R E T A R Y M Q R G E N T H A U
at c e r e m o n i e s c e l e b r a t i n g c o m p l e t i o n of a War
Savings Bond c a m p a i g n for a new c r u iser A T L A N T A
is p a r t o f a p r o g r a m t h a t w i l l b e b r o a d c a s t at
10:30
E a s t e r n War Time, Friday, M a r c h 1 ? ,
1943, f r o m the C a p i t a l C ity Auditorium, A t l a n t a ,
Ge o r g i a , o v e r the Blu e Netw o r k * )
7j ~
t-' /
'tté
TREASURY IEiARTMENT
Washington
FOR REIEA.SE, MORNING NEWSPAPERS,
Saturday, March 13, 19A3»______
3/11/43
Press Service
No# 35-70
(The following address by S3CRSIARX MORGEHTHA.U
at ceremonies celebrating completion of a Wan
Savings Bond campaign for a new cruiser ATLANTA
is part of a program that will be broadcast at
10:30 p«in,, Eastern War Time, Friday, March 12,
1943« from the Capital City Auditorium, Atlanta,
Georgia, over the Blue Network.
Secretary
Morgenthau will Speak from Washington.)
I welcome the opportunity to join the Secretary of the Navy in con
gratulating the people of Atlanta and the people of Georgia on putting
their dollars to work for victory. I regret greatly that circumstances
which arose at the last moment have made it impossible for me to be
present in person with you in Atlanta tonight, as I had planned.
I have watched with admiration on other occasions the contributions
made by the people of Georgia to meeting the wartime needs of their
country. And now the people of Atlanta and their neighbors have respond
ed with the unconquerable Georgia fighting spirit to a now challenge.
They have made it certain that our flag will proudly fly again on a new
ATLANTA to take the honored place of that other ATLANTA which went down
in glorious combat off the coast of Guadalcanal.
The people of other communities can — and I hope they will —
follow your example. Not all will be able to pay for cruisers or bat
tleships, but all can buy implements of war according to their abilities,
from the groat battleship down to the humble but mightily useful jeep.
All these are tools of freedom.
So, too, arc. dollars the tools of freedom. The dollars you save
and turn over to the use of your government today arc fighting dollars.
This is true of tax dollars as well as of bond dollars. Out of every
hundred dollars of taxes paid on March 15, ninety-five dollars will go
directly to pay the costs of this war, to supply our men at the front,
to smash the Axis.
Next Monday night is the zero hour when billions of these dollars
are due to go over the top to battle.. There have been baseless rumors
that somehow this zero hour will never come off; that somehow the taxes
due on March 15 arc to be forgiven or forgotten. It would be tragic for
our war effort if these rumors should be widely believed. They arc
utterly .false* Wo have ruthless enemies to fight and your tax dollars
are desperately needed in the battle* Any American who wilfully neglects
to pay his taxes on time or to invest every cent he can in War Bonds is
surely giving aid and comfort to the enemy.
Even as you meet in Atlanta tonight your dollars are fighting the
enemy. They are also fighting an important battle here on the home front.
Every dollar you put into war bonds or taxes helps to keep prices down*
Every dollar put into war bonds also creates future purchasing power
that will mean jobs for our fighting men when they return. lour bond
dollars and your tax dollars are double duty dollars.
Yiie have a job to do and we are all called for service to our
country* Our dollars are called to service too.
/
Let us all ask ourselves, "Shall we be more tender with our dollars
than with,the lives of our sons?"
Only a great outpouring of the people’s money can provide a sufficient
answer to our war needs* It is by such democratic initiative and community
spirit as you of Atlanta have shown that a great democracy will meet the
challenge of the enemy and keep faith with our men who fight on land and
sea and in the air.
In addition to the foregoing securities offered during the month
of April* the Treasury will offer on April 20, outside of the Second
War Loan campaign, a 7/8 per cent one-year certificate of indebtedness
dated May 1, in exchange for the Treasury certificates of indebtedness
in the amount of $1,508,000,000, and Commodity Credit Corporation notes
in the amount of $289,000,000, all maturing on that day.
This exchange
offering should not be considered as a precedent for future refunding
operations of the treasury.
i
On individual subscriptions of $1*000 or less, no accrued
interest will be charged on the 2$ or
Bonds during the period
of the drive, but accrued interest from April 15 will be collected
on all subscriptions in excess of that amount entered after that date.
3.
A 7/8 per cent Certificate of Indebtedness dated April 15,
1943» due April 1» 1944«
This security will be available
for subscription by comaeroial banks for their own account
for the first th^ee days of the drive, namely, April 12,
13 and 14, and will be available for subscription by all
classes of Investors during the entire period of the drive.
Sales to commercial banks will be limited to $2,000,000 , 000
or thereabouts.
Applications fro# commercial banks up to
$100,000 will be allotted In full and larger bank subscriptions
on an equal percentage basis, and all applications from other
than commercial banks will be allotted in full.
The
oertiflcates will be in denominations of $1,000 to
$1 ,000,000 and will be Issued in coupon form only.
4.
Tax Savings Botes of Series G.
5.
Series B War Savings Bonds.
6.
United States Savings Bonds, Series F and 0.
Any bank or trust company qualified to hold war loan deposits will
be permitted to make payment by credit for securities, whether for its
own account or that of its customers up to any amount for which it shall
be qualified In excess of existing deposits.
application« from other than commercial hanks will
he allotted in full.
These bonds will he in
denominations of from $500 to $1*000(000 and will he
issued in coupon or registered form at the option of
the buyer*
The offerings to be sold under the direction of the War Finance
Committee will consist oft
X.
Twenty-six year 2j per cent bonds dated April 15, 1943,
due «Tune 15,'1969, callable June 16, 1964, to he issued
in coupon or> registered form at the option of the bnyers.
Commercial hanks, which are defined for this purpose at
hanks accepting demand deposits, will not he permitted
to own these bonds until April 16, 1953.
There will he
no limit to the amount of this issue and no restriction
upon the issuance excepting the temporary exclusion of
A 9.
/
commercial hanks from ownership for their own account.
Subscription hooks will he opened April 12 and will
remain open several weeks*
The bonds will he sold in
denominations from $500 to $1,000,000.
■A
2.
Two per cent Treasury bonds dated April 15, 1943, due
September 15, 1952, callable September 15, 1950.
This
security will he available for subscription by
commercial banks for their own account for the period
April 38 , 29 and 3C\ iaeluiive.
It will be available for
subscription by all other classes of Investors for the
entire period of the drive.
Sales to commercial banks
will be limited to $2,000,000,000 or thereabouts.
Applications from commercial banks in amounts up to
$100,000 will be allotted in full and larger bank
subscriptions on an equal percentage basis.
All
'
j)
3
y h c x z t* %
^
y t^
JU k ^
i t
y i/ t f lA <
e &
~
/ **3
i
5 '-
7/
r
Secretary Morgenthou announced today that the United States
Treasury will borrow during the month of April the huge sum of
$13,000,000,000 in its Second War Loan drive.
“Sight billion dollars of this total,“ he said, “will come from
non-bcnking Investors and the balance from banking sources, including
the ra increased weekly offerings of Treasury Bills.
“This money, which is needed to back up our armed forces, will be
raised through the continuing sale of War Savings Bonds, and Tax
Savings Notes, Treasury bills, and the offering of a number of new
Treasury issues designed for every class and type of investor.
"As we move forward into full production in the war effort, It is
increasingly Important that every American invest in his Governments
securities to the limit of his or her ability.
“As announced on March 3, a new organisation under the title of
United States Treasury War Finance Committee, will conduct the sales
campaign beginning April 12 on the several Issues of securities offered.
In order to combine all of our forces behind the Second War Loan drive,
this organisation will bring together the Victory Fund Committees, which
so successfully carried out the December campaign, and the War Savings
Staff organisations, which have done such a grand job in the sale of
War Savings securities.
The President of the Federal Reserve Bank in
each of the twelve districts is Chairman of the War Finance Committee in
his district and will be in complete charge of the drive for that area.“
TREASURY DS PARTI,ENT
Washington
For Release, Horning Newspapers
Friday» Parch 12, 1943
Press Service
No. 35-71
Secretary Morgenthau announced today that the United States
Treasury will borrow during the month of April the huge sum of
$13 ,000,000,000 in its Second War loan drive.
nEight billion dollars of this total,” he said, "will come from
non-banking investors and the balance from banking sources, including
the increased weekly offerings of Treasury Bills.
»»‘PM"« mrvruav which is needed to back up our armed forces, will
continuing sale of War Savings Bonds, and Tax
Savings Notes, Treasury Bills, and the offering of a number of new
Treasury issues designed for every class and type of investor«
"As we move forward into full production in the war effort, it
is increasingly important that every American invest'in his Govern
ment’s securities to the limit of his or her ability.
"As announced on March 3, a new organization under the title
of United States Treasury War.Finance Committee, will conduct the
sales campaign beginning April 12 on the several issues of securities
offered.. In order to combine all of our forces behind the Second
War Loan drive, this organization will bring together the Victory
Fund Committees, which so successfully carried out the December
campaign, and the War Savings Staff organizations, which have done
such a grand job in the sale of War Savings securities. The
President of the Federal Reserve Bank in each of the twelve districts
is Chairman of the War Finance Committee in his district and will
be in complete charge of the drive for that area."
The offerings to be sold under the direction of the War Finance
Committee will consist o f :
1.
Twenty-six year 2^ per cent bonds dated April 15, 1943,, due
June 15, 1969, callable June 15, 1964, to be issued in
coupon or registered form at the option of the buyers.
Commercial banks, which are defined for this purpose as
banks accepting demand deposits, will not be permitted to
own these bonds until April 15, 1953« There will be no
limit to the amount of this issue and no restriction upon
the issuance excepting the temporary exclusion of commercial
banks from ownership for their own account« Subscription
books 'wall be opened April 12 and will remain open several
weeks. The bonds will be sold in denominations from $500
to $1,000,000.
~ 2 -
2.
Two per cent Treasury bonds dated April 15, 1943, due
September 15, 1952, callable September 15, 1950. This
security will be available for subscription by
commercial banks for their own account for the period
April 23, 29 and 30. It will be available for sub~
scription by all other classes of investors for the
entire period of the drive. Sales to commercial banks
will be limited to $2,000,000,000 or thereabouts'.
Applications from commercial banks in amounts up to
$100,000 will be allotted in full and larger bank
subscriptions on an equal percentage basis. All
applications from other than commercial banks will be
allotted in full. These bonds will be in denominations
of from $500 to $1,000,000 and will be issued in coupon
or registered form at the option of the buyer.
On individual subscriptions of $1,000 or less, no accrued interest
will be charged on the 2 cjo or 2jg jk Bonds during the period of the drive,
but accrued interest from April 15 will be collected on all subscriptions
in excess of that amount entered after that date,
3.
A 7/8 per cent Certificate of Indebtedness dated April 15,
1943, due April 1» 1944. This security will be available
for subscription by commercial banks for their own account
for the first three days of the drive, namely, April 12,
» 13 and 14, and will be available for subscription by all
classes of investors during the entire period of the
drive. Sales to commercial banks will be limited to
$2,000,000,000 or thereabouts. Applications from
commercial banks up to $100,000 will be allotted in full
and larger bank subscriptions on an equal percentage basis,
and all applications from other than commercial banks will
be allotted in full, The certificates will be in
denominations of $1,000 to $1,000,000 and will be issued
in coupon form only.
4.
Tax Savings Notes of Series C.
5.
Series E War Savings Bonds.
6.
United States Savings Bonds, Series E and G-.
Any bank or trust company qualified to hold war loan deposits will
be permitted to.make payment by credit for securities, whether for its
own account or that of its customers up to any amount for which it shall
be qualified in excess of existing deposits.
- 3 ~
In addition to the foregoing securities offered during the month
of April, the Treasury will offer on April 20, outside of the Second
War Loan campaign, a 7/8 per cent one-year certificate of indebtedness
dated May 1, in exchange for the Treasury certificates of indebtedness
in the amount of $1,506,000,000, and Commodity Credit Corporation notes
in the amount of $289,000,000, all maturing on that day. This exchange
offering should not be considered as a precedent for future refunding
operations of the Treasury.
oOo
MPhis year for the first time it is not necessary
for you to have your tax return notarized*
It can be signed
and mailed along with the first quarterly payment*
So if
you c a n H get to the Collector's office, be sure to mail
your return in time so that it will be postmarked before
midnight Monday* March 15*
on time*
That will be accepted as filed
And remember that in addition to filing your
return, at least one-quarter of the tax must be paid by
midnight Monday* *
tmstJHT
mpxmpm
m )
Washhgton
K
01
ÈÊÉ
& & S F ¿M 4 f^h/ fJV & /V £
''
à
./ . _ :^
pfi^pf* a r
*"V
zPress Service
Congressional tax leaders united today in an appeal to last«
minute income tax filers to get their returns in before the Monday
midnight deadline*
Senators Walter F* George and Arthur H* Fandenberg of the
Senate Finance Committee and Representatives Robert L* Boughton
and Allen T. Treadway of the House Ways and Means Committee made
the following joint statementt
«Monday is the last day for getting in your income
tax returns on 1942 income and paying the first quarterly
installment of your tax*
HP new revenue plan now before
Congress or that might cense before Congress changes or
postpones that obligation in the sli^itest*
It is the
duty and the privilege of every one of us to send our
fighting dollars into battle along side of our fighting
men*
''This is a legal and patriotic responsibility on
all single persons who received $500 or more last year
and on all married people who received, together,
$1,200* The nation needs your taxes to smash the Axis*
For the benefit of late filers, all Internal Revenue
offices will be kept open until midnight Monday* Be
sure that your return is in before that time*
TREASURY DEPARTMENT
Washington
FOR RELEASE, MORNING- NEWSPAPERS*
Sunday, March 14. 1943»_______ _
3/15/43
*
1
^
Press Service
Nof 35-72
Congressional tax leaders united today in an appeal to last-minute income
tax filers to get their returns in before the Monday midnight deadline*
Senators Walter F« George and Arthur K* Vandonberg of the Senate Finance
Committee and Representatives Robert L, Doughton and Allon T* Treadway of the
House Ways and Moans Committee mado the following joint statement«
^Monday is the last day for getting in your income tax
returns on 1942 income and paying the first quarterly install
ment of your tax« No new revenue plan now bofore Congress
or that might come before Congress changes or postpones that
obligation in the slightost^ It is the duty and the privilege
of every one of us to send our fighting dollars into battle
alongside of our fighting men„
*!This is a legal and patriotic responsibility on all
single persons who received $500 or more last year and on all
married people who received, together, $1,200* The nation
needs your taxes to smash the Axis* For tho benefit of late
filers, all Internal Revenue offices will be kept open until
midnight Monday* Be sure that your return is in before that
time*
,rThis year for the first time it is not necessary for you
to have your tax return notarized* It can be signed and mailed
along with tho first quarterly payment* So if you can!t get to
the Collectors offico, bo sure to mail your return in time so
that it will be postmarked bofore midnight Monday, March 15*
That will be accepted as filed on time* And remember that in
addition to filing your return, at least one-quarter of the tax
must be po.id by midnight Monday*”
0O0'
.4.
Maröh
6, I9H3
%) MR. D. V* BBI&I
During the »oath of February, the following
market trän«actione took place is direct and guaran
teed eecrorltiee of the öoreniaeat«
S a l o * ....................................................W l»**23»9°0
Pureiui*»*
...........
1.150.0Q0
i*t tai............. ...
(Initialed) R. ?, &
gwm:eal
Copy to:
Mr* Schwarz
Mr* Heffelflnger
Mise Sanford
File
TREASURY DEPARTMENT
Washington
TOR I M M E DIATE RELEASE,
Monday, ■ Feteruory--3rfr, 1945.
Press Service
No. 33= 33^-
/J/
JL
During
' tions
the m o n t h of
1945,
market
in direct and g u a r a n t e e d securities
transac-
of the Govern
men t for T r e a s u r y i n v e stment and o t h e r accounts
resulted
f fo/i 73, 9oa
in net
sales of
Secretary Morgenthau
a n n o u n c e d today.
-oOo-
TREASURY DEPARTMENT
Washington
F’
O R I M M E D I A T E RELEASE,
Monday, M a r c h 15, 1945.
During
transactions
the m o n t h of February,
Press Service
No. 35-73
1943., m a r k e t
in dire c t and g u a r a n t e e d securities
of the G o v e r n m e n t for T r e a s u r y i n v e s t m e n t and
o t h e r a c c ounts
$>90,273,900,
r e s u l t e d in net sales of
Secretary Morgenthau announced
today.
-oOo-
TREASURY DEPARTMENT
Washington
FOR RELEASE, MORNING NEWSPAPERS
Tuesday, March 16, 1943«
Press Sendee
The Secretary of the Treasury announced last evening that the tenders for $800,000,00
or thereabouts, of 91-day Treasury bills to be dated March 17 and to mature June 16, 1943
which were offered on March 12, 1943» were opened at the Federal Reserve Banks on March ij
the details of this issue are as follows:
Total applied for - $1,302,725,000
Total accepted
802,171,000
Range of accepted bids:
High
Low
Average price
- 99.925 Equivalent rate of discount approx. 0.297$ per annua
«
tt
it
tt
*
0.376$ »
»
- 99.905
Cl
tt
«
t
t
- 99.906
*
0.373$ *
"
(40 percent of the amount bid for at the low price was accepted.)
Federal Reserve
District
Total
Applied For
Total
Accepted
Boston
Mew York
Philadelphia
Cleveland
Richmond
Atlanta
Chicago
Sta Loui3
Minneapolis
Kansas City
Dallas
San Francisco
$
28,695,000
848,282,000
33 ,625,000
18 ,440,000
27,435,OCX)
13 ,121,000
189,778,000
28,695,000
4,193*000
26 ,636,000
16,422,000
67 ,401^000
$ 22 ,083,000
452,804,000
23,787,000
17,700,000
23 ,910,000
10,621,000
127,970,000
14,593,000
4,117,000
23,783,000
15 ,262,000
65.541,000
«.,302,725,000
#802,171,000
TOTAL
TREASURY DEPARTMENT
Washington
FOR RELEASE, M O R N I N G N E W S P A P E R S ,
Tuesday, M a r c h 16, 1943,
3 - 1 5-43
Press Service
No. 35-74
The S e c r e t a r y o f the T r e a s u r y a n n o u n c e d last ev e n i n g that
the
tenders f or $ 8 0 0 , 0 0 0 , 0 0 0 ,
b i lls
or thereabouts,
to be d a t e d M a r c h 17 an d to m a t u r e
w e r e o f f e r e d on M a r c h 12,
1943,
of 9 1 - d a y T r e a s u r y
June 16,
1943,
which
were o p e n e d at the Federal R e s erve
B a n k s on M a r c h 15.
The d e t ails of this issue are as follows:
T o tal
T o tal
applied for - $1,302,725,000
accepted
802,171,000
Range of a c c e p t e d bids:
High
- 9 9 . 9 2 5 E q u i v a l e n t rate of d i s c o u n t approx, 0 . 297%
pe r a n n u m
Low
- 9 9 . 9 0 5 E q u i v a l e n t rate of d i s c o u n t approx. 0 . 3 7 6 %
per annum
9 9 . 9 0 6 E q u i v a l e n t rate of d i s c o u n t approx. 0 . 3 7 3 %
Average
price
p er a n n u m
(40 p e r c e n t of the amount b i d for at the l ow price was accepted.)
Federal Reserve
District
Total
A p p l i e d For
Total
Accepted
Boston
New York
Philadelphia
Cleveland
Richmond
Atlanta
Chicago
St. L o uis
Minneapolis
K a n s a s Cit y
Dallas
S a n Francisco
$
28,695,000
848.282.000
33.625.000
18.440.000
27.435.000
13.121.000
189.778.000
28.695.000
4,193,000
26.638.000
16.422.000
67.401.000
$ 22,083,000
452.804.000
23.787.000
17.700.000
23.910.000
10.621.000
127.970.000
14.593.000
4,117,000
23.783.000
15.262.000
6 5 . 5 41.000
$1,302,725,000
$802,171,000
TOTAL
-oOo-
S e c r e t a r y M o r g e n t h a u t o d a y a n n o u n c e d the a p p o i n t m e n t of
W i l l i a m H. W o o l f as
of Internal
C h i e f of the
Revenue.
Intelligence Unit
The appointment was made u p o n
dation of Commissioner of Internal
Mr.
Woolf,
who
came
Revenue
Guy.
T.
o f t h e Bureau
the r e comm e n
Helvering.
to t h e T r e a s u r y i n 1 9 1 9 w i t h t h e estab
l i s hing o f the I n t e l l i g e n c e Unit,
h a s b e e n A c t i n g C h i e f since
April
I rey,
o f last year,
w h e n E l m e r L.
for twenty-three years,
to h i s
w h o w a s h e a d o f the Unit
r e l i n q u i s h e d the p o s t to dev o t e
full time
position of Chief Coordinator of Treasury Enforcement
Agencies.
f r o m the P o s t a l
Inspection
for prosecuting income
service
in 1919
tax frauds against
H e w a s A s s i s t a n t C h i e f u n d e r M r.
his
responsibilities
unit grew into one
to o r g a n i z e machi n e r y
the G o v e r n m e n t .
I r e y f r o m the
s p r e a d i n g as t h e f l e d g l i n g
o f the m o s t
start,
with
investigative
effective of Federal
l a w enforc e
ment organizations.
Mr-s~Wo«p.fr s t e n u r e w i t h t B e U n i t h a s
y
/
y
/
•
Mr. W o o l f b e g a n h i s G o v e r n m e n t
rary clerical
went
appointment
to t h e P o s t O f f i c e
nine years before
s e e n m a n y m i l l i o n s of
/
service
in the D e p a r t m e n t
in 1910,
t r a n s f e r r i n g to
and
y.
1
/
n
i n 1 9 0 9 w i t h a tempo
of Agriculture.
He
s e r v e d t h a t D e p a r t m e n t for
the Treasury.
MR. SCHWARZ
TREASURY DEPARTMENT
Washington
F O R I M M E D I A T E RELEASE,
Wedn e s d a y , M a r c h 17, 19 43 ,
Press S e r v i c e
No, 35-75
S e c r e t a r y M o r g e n t n a u todaj'' a n n o u n c e d t h e a p p o i n t m e n t
of V/illiam H. W o o l f as C h i e f of t h e I n t e l l i g e n c e U n i t of
t h e B u r e a u of I n t e r n a l R e v e n u e ,
T h e a p p o i n t m e n t was made
u p o n t h e r e c o m m e n d a t i o n of C o m m i s s i o n e r of I n t ernal R e v e n u e
G u y T.
H e l v ering,
Mr. Woolf, ¡who came to the T r e a s u r y in 1919 w i t h the
e s t a b l i s h i n g of the I n t e l l i g e n c e Unit, has b een A c t i n g Chied
2^ -^a s ^ Y e a r > w hen E l m e r L f Irey, who was hea d
of t h e Unit f o r t w e n t y - t h r e e years, r e l i n q u i s h e d the pos t
to d e v o t e full time to his p o s i t i o n of C h i e f C o o r d i n a t o r of
T r e a s u r y E n f o r c e m e n t Ag e n c i e s ,
lit, W o o l f is ond of the g r o u p r e c r u i t e d f r o m the
P o s t a l I n s p e c t i o n se r v i c e in 1 919 to o r g a n i z e m a c h i n e r y f o r
p r o s e c u t i n g .income t a x frauds a g a i n s t t h e G o v e rnment,
*
,
H e was A s s i s t a n t C h i e f u n d e r Mr. Ire y f r o m the start,
w i t h ^ h i s ^ r e s p o n s i b i l i t i e s s p r e a d i n g as the f l e d g l i n g in**
v e s t i g a t i v e u n i t g r e w into one of the mos t e f f ective of
F e d e r a l l a w e n f o r c e m e n t organi z a t i o n s ,
Mr, W o o l f began his G o v e r n m e n t s e r v i c e in 1909, w i t h
a ^ t e m p o r a r y cl e r i c a l a p p o i n t m e n t in t h e D e p a r t m e n t of Agw e n t to th e P o s t O f f i c e in .1910, and serv e d
that D e p a r t m e n t i o r nin e years b e f o r e t r a n s f e r r i n g to the
T r e asury, ..
;
TREASURY DEPARTMENT
Washington
FOR IMMEDIATE RELEASE,
Wednesday» March 17, 1943.
Press Service
$©. 35-76
The Bureau of Customs announced today preliminazy 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 15, 1941, as follows:
:
:
: Quota Quantity :
Authorized for entry
1 (Pounds) 1J
:
for consumption
:
î As of
(Date)
:
(Pounds)
Country of
Production
I
Signatory Countries?
Brazil
Colombia
Costa Rica
Cuba
Dominican Republic
Ecuador
El Salvador
Guatemala
Haiti
Honduras
Mexico
Nicaragua
Peru
Venezuela
. J i
Non-signatoiy 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 Agree- )
ment
)
1/
2
Î,172,359,753
735,840,277
46,718,031
18,692,451
25,752,947
35,041,235
140,776,585
124,978,598
64,236,136
4,278,467
111,292,661
45,818,819
5,839,588
90,021,490
75,969,017
Quotas revised as of March 5, 1943.
oOo*’*’
March 6, 1943
n
it
IT
If
»
1»
tr
»
t»
tt
«
if
if
it
H
249,516,091
238,840,849
10,099,826
8,368,522
9,469,084
12,351,655
31,858,489
34,065,185
35,645,271
1,239,899 *
23,163,752
3,042,702
159
27,658,687
20,549,221
\
i
JJ
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*
- 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
Marsh
? M%
------- *
5$
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
mm
TREASURY DEPARTMENT
Washington
ò $'-7 7
EOR RELEASE, MORNING NEWSPAPERS,
Friday, March 19» 1943________ •
The Secretary of the treasury, hy this public notice, invites tenders
for $ fiQQ.QQQ.OCX3
, or thereabouts, of
91 -day Treasury hills, to he issued
on a discount basis under competitive bidding.
be dated
The bills of this series will
March 24, 1943_____, and will mature _
June 23. 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
War
.
. 00
_Q ..
closing hour, two o lclock p. m., Eastern SbBDtondc time, Monday».March 22 9 .
4942—
x£x
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
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 after the closing hour, tenders will be opened at the Federal
TREASURY DEPARTMENT
Washington
The
Secretary
vites t e n ders
F O R R E D E A S B,. M O R N I N G N E W S P A P E R S ,
F r i d a y , M a r c h 19, 1943*________
of t h e T r e a s u r y ,
for $800,000,000,
T r e a s u r y bills,
to b e
The'bills
1 9 4 3 » .and w i l l
mature
b e payable, w i t h o u t
f o r m only,
$100,000,
and
in
of this
discount
in
of 9 1 - d a y
b à s i s •u n d e r
competi
s e r i e s w i l l .be d a t e d M a r c h 24,
J u n e .2.3, 1943» fwhen t h e f a c e a m o u n t w i l l
interest.
T h e y w ill be
denominations
$500,000,
public notice,
or t h e r e a b o u t s ,
i s s u e d on a
tive bidding*
by. t h i s
of $ 1 , 0 0 0 ,
and $1,000,000
issued
in .b e a r e r
$5,000,
$10,000,
( m a t u r i t y value):,
\ l e n d e r s w i l l be r e c e i v e d at F e d e r a l R e s e r v e B a n k s a n d
■ B r a n c h e s u p t o t h e c l o s i n g hour, two; o ’ clock, p, m , , E a s t e r n - W a r
t i me, M o n d a y , M a r c h '22, 1943# . Tenders- w i l l n o t be r e c e i v e d a t
the Treasury Department, Washington.
Bach t e n d e r must be f o r
an even m u l t i p l e of $1,000, a n d the price o f f e r e d must be e x
p r e s s e d on t h e b a s i s of 100, W i t h n o t ' m o r e t h a n t h r e e / d e c i m a l s ,
e-4 g , , 9 9 * 9 2 5 #
F r a c t i o n s m a y n o t be u s e d .
It is u r g e d t h a t
t e n d e r s b e m a d e on t h e p r i n t e d f o r m s a n d f o r w a r d e d in t h e s p e
c i a l e n v e l o p e s which, w i l l b e s u p p l i e d , b y F e d e r a l R e s e r v e B a n k s
or B r a n c h e s on. a p p l i c a t i o n t h e r e f o r .
'.
:
T e n d e r s w i l l be r e c e i v e d 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
banks and trust companies and from responsible and recognized
d e a l e r s in i n v e s t m e n t s e c u r i t i e s .
T e n d e r s f r o m o t h e r s m u s t be
accom p a n i e d by payment of 2 percent of the face amount of T r e a s
u r y b i l l s a p p l i e d for, u n l è s s t h e t e n d e r s a r e a c c o m p a n i e d b y
a n e x p r e s s g u a r a n t y of p a y m e n t b y a n i n c o r p o r a t e d b a n k o r t r u s t
company.
I m m e d i a t e l y a f t e r t h e c l o s i n g hour, t e n d e r s w i l l be o p e n e d
a t t h e F e d e r a l R e s e r v e B a n k s a n d B r a n c h e s , follo w i n g - w h i c h p u b
lic a n n o u n c e m e n t w i l l be m ade by th e S e c r e t a r y o f th e T r e a s u r y
of t h e a m o u n t a n d p r i c e r a n g e of a c c e p t e d b i d s .
Those submit
t i n g t e n d e r s w i l l be a d v i s e d of t h e a c c e p t a n c e o u r e j e c t i o n
thereof,
T h e S e c r e t a r y of t h e T r e a s u r y e x p r e s s l y r e s e r v e s t h e
r i g h t t o a c c e p t o r r e j e c t a n y or a l l t e n d e r s , in w h o l e o r in
p a r t , a n d his a c t i o n in a n y s u c h r e s p e c t s h a l l b e f i n a l .
Pay
m e n t o f a c c e p t e d t e n d e r s at t h e . p r i c e s o f f e r e d m u s t be m a d e or
c o m p l e t e d a t t h e F e d e r a l R e s e r v e B a n k in c a s h o r o t h e r i m m e
d i a t e l y a v a i l a b l e f u n d s on M a r c h 24, 1 9 4 3 #
35-77
(O v e r )
- 2 -
*..
!3>y&'"i-i^tìome *4eHiYed^tìozùfj!r easurÿ bills,
whe t her-inter eat-*
or 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 of t h e bills, shall
.not have.Any. exemption., a s such, a n d l o s s f r o m t h e s a l e or
o t h e r d i s positibif df:- t r e a s u r y - b i l l s ' s h à l l n o t ha*v$ifapy.-special
t r e a t m e n t , . as; such.,, under. 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
acted.
T h e 'bills''shall''be s u b jéct- t o i astato,-. .inheritance;, gift,
o r .o t h e r ..ex.c.isp. t a x e s , , w h e t h e r F e d e r a l o r State, b u t .shall be
e x e m p t f r o m a l l t a x a t i o n now'or' h e r e a f t e r .'imposed•o n t h e .pr.in:,cipal or. i n t e r e s t .thereof b y a n y S t ate, o r 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 a n y ' l o cal- t a x i n g •authority.
;Fop 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 of d i s c o u n t a t w h i c 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 soldv-by 'the-*Uhit ed S t a t e s ..shall §be con
s i d e r e d ,-tq-be. i n t e r e s t . . Under S e c t i o n s 42 a n d 1 1 7 (a) (1) of
t h e I n t e r n a l " R e v e n u e 'Còde,- âs ’amended' by.-'.Section 11.5.; of -the Rev
enu.^, A c t of 1941,■.-the a m o u n t of d i s c o u n t a t w h i c h b i l l s "issued
h e r e u n d e r a r e s ô l d s h a l l not' bè considered.; to .aç.çrue.•until.such
bills shall be sold, r e d e e m e d or oth e r w i s e dispos ed of, and
suc h billè' are e x c i u d é d ’f r o m considération; as.:.-capital assets,
A c cordingly, the o w n e r of. T r e a s u r y bills (other t h a n life" in, sur an ce .companies.) i s s u e d ’hereunder- n e e d I n c l u d e In-; his income
t ax return!onl^.: t h é diff erence betvveôh- the' prloe;-paid; for. such
•bills, w h e t h e r on,, original issue* or 'on? s u b s e q u e n t ..purchase, ■ •
.and the a m o u n t a c t u a l l y r e c e i v e d either u p o n s a l e or- redemption
,at. m a t u r i t y during' the t a x a b l e y e a r for -'which the-' return- is-..,
made, as o r d i n a r y g ain o r ’-lose.' •'-• '
..tr v
.
4"
.■
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 No; 418, as amended,-- and this
notice, p r e s c r i b e the 'terms of' the' T r e a s u r y bills ;and .govern
the conditions of t h e i r issue.
C o p i e s of the c i r cular may-.be
o b t a i n e d f r o m a n y Federal R e s e r v e B a n k or Branch.
* ~o0o-
"f.;*’"'»A'
.
5‘*r•>
- 3 ~
Meyror "irr TrrnTriüC'l Ull, JJ'l" t " "
H. W .
m a n a g e r o f the
Stodghill of Philadelphia,
Philadelphia
Pa.,
business
Bulletin.
F l em t u g - N ew b e l d ""uf W a s h i n g üonj
v ■b u e inesfl-^.
i, 11,
¡ftrln
■Mpaifiiitti
iRIHPP'11
1
'
Government
Secretary Morgenthau,
o f the Board
officials
of
the Federal Reserve
Jr., D e p u t y D i r e c t o r
Information in charge of domestic
J r . , of the O f f i c e
i n a d d i t i o n to
w i l l be Vice- C h a i r m a n Ronald H a n s o m
of Governors
Gardner Cowles,
present,
of Wa r
of
the Office
operations;
Information,
System,
Donald
of War
J a m e s C. Rogers,
Sterling,
s p e c i a l constiiitant t o C h a i r m a n D o n a l d N e l s o n of t h e W a r
P r o d u c t i o n Board;
Bell, A s s i s t a n t
Under
Secr e t a r y of the Treasury
W i l l i a m M. R o b b i n s ,
Finance Committee;
Assistants
advertising
Wesley
S e c r e t a r y o f t h e T r e a s u r y D a n i e l W.
C h a i r m a n o f the United
Harold
N.
t o the S e c r e t a r y
specialist
for
Graves
of the
the
H e r b e r t E. Gaston,
S t a t e s T r e a s u r y War
and G e o r g e Buffington,
Treasury;
Second
War
S t u a r t Peabody»
L o a n drive,
and
L i n d o w o f t h e T r e a s u r y ’s D i v i s i o n cf R e s e a r c h and
Statistics.
0O 0
2
and Linwood
S.
S, F r i e n d l y a n d C h e s t e r
I.
Noyes
of I r o n w o o d , Mich.,
Advertising Council,
E.
H.
LaRoche
o f N e w Y o r k City
r e p r e s e n t i n g the
Inc.
Abels
of Lawrence,
K a a . , president
of t h e
Ohio,
o f the
National Editorial Association.
A.
Inland Daily
C.
Hudnutt
of E l y r i a ,
president
Press Association.
0
„ G. A n d r e w s
of New London,
Conn.,
presiden
o f the N e w E n g l a n d D a i l y N e w s p a p e r A s s o c i a t i o n .
Charles
president
of the
P. M a n s h i p j â p M Ï ^ o f
Southern Newspaper
Cranston Williams
manager
Baton Rouge,
Publishers Association.
of N ew Y o r k City,
of the A m e r i c a n N e w s p a p e r
La.,
Publishers
/H.UJ, R * $ / c e r / i l( cQ ^oJL +i
cpv>^>twqo lYI111 ■ n f TTrnf jrnrlr iTItj
general
Association.
re p re s e n tin g
the H e a r s t Publications.
Gauaxgn E
I
I
I ]
I
Prrlr*i—
»hf
TTrtt.tr>r<1 .
E.
Frank/fGannett
of the F r a n k E.
f- Wnrrhingtnn,
of R o c h e s t e r ,
J
Q
, rtWrtwnr
,
N. Y . ,
president
Gannett Newspapers
&
g u o a n i o T '-T M'ii'mj-Mii1'Q
R o y D. M o o r e
and g e n e r a l m a n ager
Administrator
1
P»
for
ua
» r PUfroirr ' g m u 1;" pubiiuinu
of Canton,
Ohio,
vice-president
of the Brush-Moore Newspapers
Ohio of the W a r
Savings
Staff.
a nd State
For
immediate
release
Leaders
o f the A m e r i c a n press w i l l meet
w i t h G o v e r n m e n t o f f i c i a l s ' ,feiA<»!Pi®^^.n t h e
discuss
plans
for
cooperating
Second W ar Loan drive
Morgenthau announced
to b e
in the
over
of
publishers,
and
the
suggestions
for
the c a m p a i g n w i t h
advertising
the F e d e r a l R e s e r v e
War Information,
Goal
o f the
participation
in the w a r
officials
the
talk
of the
Office
of
and advertising
financing drive#
The f o l l o w i n g have
i n v i t a t i o n to the
W a l t e r M.
Dear
accepted
J o h n S. K n i g h t
Secretary
conferences:
of Jersey City,
of t h e A m e r i c a n N e w s p a p e r
of the A m e r i c a n Society
editors,
d i s c u s s i o n s w i l l be a
program for newspaper
president
Secretary
industry will
S y s t e m and
comprehensive
Morgenthau*s
12,
today.
chains
Treasury,
N.
J.,
Publishers Association,
of Miami,
Fla.,
vice
president
of N e w s p a p e r E d i t o r s #
B a s i l L. W a l t e r s
&
$13,000,000,000
launohed April
Representatives
newspaper
T r e a s u r y to
of Minneapolis,
secretary of the American Society
of Newspaper
Minn#,
Editors#
General Marshall
General
Surles
TREASURY
Secretary Morgenthau
Mr.
Bell
Mr.
Gaston
Mr.
Peabody
Mr.
Graves
Mr.
Buffington
Mr. L i n d o w
Mr.
Robbins.
FEDERAL RESERVE
Mr.
Eccles
(or alternate)
3 -
< -
PUBLISHERS
R o y D. M o o r e , P r e s i d e n t ,
Brush Moore Newspapers,
State Administrator, War Savings
Cleveland, Ohio.
Staff,
C r a n s t o n W i l l i a m s , Gen. Mgr.,
A m e r i c a n N e w s p a p e r Publishers AssJ
370 L e x i n g t o n Avenue,
N e w Y o r k City.
)
L i n w o o d I. N o y e s ,
Advertising Council,
The Globe,
Ironwood, Michigan.
E. S. F r i e n d l y ,
Advertising Council,
N e w Y o r k S un,
N e w Y o r k City.
W a l t e r M. D e a r , P r e s i d e n t ,
American Newspaper Publishers A s s n . ,
J e r s e y Journal,
J e r s e y C i t y , N. J.
C h a r l e s P. M a n s h i p , President, ;
S o u t h e r n N e w s p a p e r Publishers Assi
State Times and Advocate,
Baton Rouge, Louisiana.
0. G. A n d r e w s , P r e s i d e n t ,
N ew England D a i l y News p a p e r Assn.,
New London, Connecticut.
G e o r g e B. P a r k e r , E d i t o r in Chief
S c r i p p s - H o w a r d N e w s p a p e r Alliance
Wa shington, D . C .
( A l t e r n a t e o f M r . R o y Howard)
A. C. H u d n u t t , P r e s i d e n t ,
Inland D a i l y Press Assn.,
Chronicle-Telegram,
Elyria, Ohio.
F r a n k E. G a n n e t t ,
R o c h e s t e r Times Union,
Rochester, N e w York.
B a s i l L. W a l t e r s , M a n a g i n g E d i t o r ,
The Star Journal,
Minneapolis, Minnesota.
(Alternate of R o y Roberts,ASNE)
J o h n S. K n i g h t , V i c e President,
A m e r i c a n S o c i e t y o f Newspaper
Editors,
M i a m i H e r a l d , M i a m i , Florida.
E. H. A b e l s ,
National Editorial
The Outlook,
Lawrence, Kansas•
Thomas White,
Hearst Publications,
9 5 9 - 8 t h A v e n u e , N e w York City.
( A l t e r n a t e o f J.D.Gortatowsky)
Association,
G o v e r n o r J a m e s M. C ox,
Publisher, Miami D a ily News
D a y t o n (Ohio) D a i l y N e w s .
and
a W. I.
Mr.
Cowles
M r . Rogers
M r . H. W . S t o d g h l l l ,
Business Manager,
Philadelphia Bulletin,
P h i l a d e l p h i a , Pennsylvania.
- 4 specialist for the Second War Loan drive, and Wesley Lindow of
the Treasury1s Division of Research and Statistics«
- 0O 0-
3
-
P r a n k E.
Gannett of
-
Rochester,
N* Y . ,
p r e s i d e n t o f the
Gannett Newspapers*
R o y D. M o o r e
of Canton,
Ohio,
vice president
m a n a g e r o f the B r u s h - M o o r e N e w s p a p e r s
O h i o o f t he W a r S a v i n g s
H. W .
Stodghlll
and general
a n d S t a t e A d m i n i s t r a t o r for
Staff*
of Philadelphia,
P a*,
b u s i n e s s m a n a g e r of the
Philadelphia Bulletin»
Government officials present,
Morgenthau,
Governors
were Vice-Chairman
of the Federal
i n a d d i t i o n to S e c r e t a r y
R o n a l d R a n s o m o f t h e B o a r d of
Reserve
System; Gardner Cowles,
Jr*,
JfifrlìniÉy D i r e c t o r o f t h e O f f i c e o f W a r I n f o r m a t i o n
; J a m e s C*
Information;
Assistant
Rogers,
J r •f o f th e O f f i c e o f W a r
U n d e r S e c r e t a r y o f the T r e a s u r y D a n i e l W*
S e c r e t a r y o f t h e T r e a s u r y H e r b e r t E*
“
G a s t o n ; W i l l i a m M*
>asury W a r F i n a n c e Com-
Buffington,
the S e c r e t a r y o f t h e T r e a s u r y ;
Bell;
Stuart Peabody,
Assistants
advertising
to
B a s i l L. W a l t e r s
of Minneaoplis,
Minn.,
s e c r e t a r y o f the
American Society of Newspaper Editors.
E.
S. F r i e n d l y a n d C h e s t e r L a R o e h e
L i n w o o d I. N o y e s
Council,
E.
of Ironwood,
Mich.,
of Lawrence,
Kan.,
of N ew York City and
r e p r e s e n t i n g the Advertising
Inc.
H.
Abels
p r e s i d e n t o f the National
c
Editorial
A.
C.
Association*
Hudnutt of Elyria,
Ohio,
p r e s i d e n t o f the
I n l a n d Daily
Press Association*
0.
G. A n d r e w s
of New London,
Conn.,
p r e s i d e n t o f the New
England Dally Newspaper Association*
Charles
P. M a n s h i p o f B a t o n R o u g e ,
La.,
p r e s i d e n t o f the
Southern Newspaper Publishers Association.
Cranston Williams
o f N e w Y o r k City,
g e n e r a l m a n a g e r o f the
American Newspaper Publishers Association*
W*
M*
Baskervill
Publications*
of Baltimore,
r e p r e s e n t i n g the Hearst
TREASURY DEPARTMENT
Washington
FO R RELEASE, M O R N I N G NEWSPAPERS,
S u n d a y , M a r c h 21, 1 9 4 3 . ___________
Leaders
officials
Press Service
N o * 35-78
of the American press
conferred w i t h Government
y e s t e r d a y in the T r e a s u r y
to d i s c u s s p l a n s
e r a t i n g I n t he $ 1 3 , 0 0 0 , 0 0 0 , 0 0 0 S e c o n d W a r L o a n d r i v e
launched April
12,
to b e
Secretary Morgenthau announced*
Representatives
of publishers,
the a d v e r t i s i n g i n d u s t r y s t u d i e d
w ith officials
for coop
o f the Treasury,
editors,
suggestions
the
Goal
Federal
n e w s p a p e r ch a i n s and
f o r the
campaign
R e s e r v e S y s t e m and
the O f f i c e
of W a r Information.
o f the m e e t i n g w a s
a com
prehensive
program for newspaper and advertising participation
in the w a r f i n a n c i n g drive.
The
the
f o l l o w i n g a c c e p t e d S e c r e t a r y M o r g e n t h a u 1s i n v i t a t i o n to
conference :
W a l t e r M*
D e a r of J e rsey City,
American Newspaper Publishers
J o h n S. K n i g h t
of Miami,
N.
J.,
p r e s i d e n t o f the
Association*
Fla.,
can Society of Newspaper Editors.
v i c e p r e s i d e n t o f the Ameri
TREASURY DEPARTMENT
Washington
POR RELEASE, M O R N I N G NEWSPAPERS,
Sunday, M a r c h 21, 1943.
3-20-43
-----------------
Leaders
of the A m e r i c a n press
Press Service
No. 35-78
c o n ferred w i t h G o v e r n
m e n t o f f i c i a l s y e s t e r d a y in the T r e a s u r y to discuss plans
for c o o p e r a t i n g in the $ 1 3 , 0 0 0 , 0 0 0 , 0 0 0 S e c o n d W a r L o a n
drive
to be l a u n c h e d A p ril 12,
Secretary Morgenthau
announced.
R e p r e s e n t a t i v e s of publishers, editors, n e w s p a p e r
chains and the a d v e r t i s i n g i n d u s t r y s t u died suggestions
for the c a m p a i g n w i t h o f f icials of the Treasury, the FedReserve S y s t e m a nd the O f fice of W a r Information.
Goal
of the m e e t i n g was a c o m p r e h e n s i v e p r o g r a m for n e w s p a p e r
and a d v e r t i s i n g p a r t i c i p a t i o n in the w a r fin a n c i n g drive.
The f o l l o w i n g a c c e p t e d S e c r e t a r y M o r g e n t h a u ’s i n v i
t a t i o n to the conference:
W a l t e r M. D e a r of J e r s e y City, N. J., p r e s i d e n t of
the A m e r i c a n N e w s p a p e r P u b l i s h e r s A s s o c iation.
Joh n S. K n i g h t of Miami, Fla., vice p r e s i d e n t of the
A m e r i c a n S o c i e t y of N e w s p a p e r Editors.
Basil L. W a l t e r s o f M i n n eapolis, Minn.,
the A m e r i c a n S o c i e t y of N e w s p a p e r Editors.
sec r e t a r y of
E. S. F r i e n d l y a nd C h e s t e r L a R o c h e of N e w Y o r k C i t y
and L i n w o o d I. N o yes of Ironwood, Mich., r e p r e s e n t i n g the
A d v e r t i s i n g Council, Inc.
E. H. A b els of Lawrence, Kan.,
National Editorial Association.
p r e s i d e n t of the
A. C. H u d n u t t o f Elyria, Ohio,
I n l a n d D a i l y Press A s s o c i a t i o n .
p r e s i d e n t o f the
0,
G. A n d r e w s of N e w London, Conn,,
New England Daily Newspaper Association.
p r e s i d e n t of the
2
C h a r l e s P. M a n s h i p of B a t o n Rouge, La., p r e s i d e n t of
the S o u t h e r n N e w s p a p e r P u b l ishers A s s o ciation.
C r a n s t o n W i l l i a m s of N e w Y o r k City, general m a n a g e r
of the A m e r i c a n N e w s p a p e r P u b l i s h e r s A s s o c iation.
W. M. B a s k e r v i l l
Publications.
of Baltimore,
Frank E. G a n n e t t of Rochester,
Gannett Newspapers*'
representing
the H e arst
N. Y., p r e s i d e n t o f the
Roy D. M o o r e of Canton, Ohio, vice p r e s i d e n t and g e n
eral .manager of the B r u s h - M o o r e N e w s p a p e r s and State A d m i n i s
trator for Ohio of the W a r Savings Staff.
H. W. S t o d g h i l l of P h iladelphia,
of the P h i l a d e l p h i a Bulletin.
Pa., b u s i n e s s m a n a g e r
G o v e r n m e n t officials present, in a d d i t i o n to S e c r e t a r y
Morgenthau, were V i c e - C h a i r m a n Ronald R a n s o m of the B o ard
of Gov e r n o r s o f the Federal Reserve System; G a r d n e r Cowles, Jr.,
D o m e s t i c D i r e c t o r of the Office of W a r Information; James C.
Rogers, Jr., of the O f fice of W a r Information; U n d e r S e c r e
tary of the T r e a s u r y Daniel W. Bell; A s s i s t a n t S e c r e t a r y , o f
the T r e a s u r y H e r b e r t E. Gaston; W i l l i a m M. Robbins, C h a i r m a n
of the U n i t e d States T r e a s u r y W a r Finance Committee;
T h e o d o r e R. Gamble and George B u f f ington, A s s i s t a n t s to the
S e c r e t a r y o f the Treasury; Stuart Peabody, a d v e r t i s i n g sp e
cialist for the S e c o n d W a r L o a n drive, and Wesley L i n d o w of
the T r e a s u r y ’s D i v i s i o n of R e s e a r c h and Statistics.
-0O 0 -
- 4 -
uarelehfclng m aptm ia upon the necessity for laore taxes* more saving*
m i m m sacrifice* the Treasury is today laying the basis for a iaore
prosperous and dora&te peace • The same policies* moreover* mill give
the Treasury in the postwar period that freedom of action and that
flexib ility of maneuver so vital for coping v&th unforeseen developsente bound to arise»
The vwx has oponed our eyee to ti» uidmginsd productivity o£
Industrial and Agrieultmsl a r le a » wartirae shortage# of peacetis*
acode and aervloea heve not blindad us to the ©rtonacua potentiaHtles
f^abun&snoe In car dynaxaic Industrial eodety. I t la preclsely this
cepacity to produce* shsm of i te fetters* upon ehlch the
futiré tselfsre and prosperlty of mrr pecple uXtiraateíy depend* If in
the penco to come m realice the potentiallties for abandono* Inhtrent
in otar great productivity and do not penait our precióte? resoufees to
lia idle in atagmnt pools* m heve l iitle to fear as a natlon» The *
presáis® of pXenty exista todayj the ftect of pdenty m ita m the m vrm*
•■oDo»*
to mp&mm incurred in securing mr'ixmm and variations in the cost
oT providing a basic living standard* The post-war period nag* require
a etfbsttfiaUd reorientation in our business and mnma^lÆ&tfiocaa* It
«111 uidoubtedly lavdve action effort to avoid ^nterimtioaai) double
taxation and better integration of tbs Federal tèïnttywéMrmtl} those
of State and local gcvernaenta* Vldle we « ill want to shun taxée that
binder business enterprise* we will also want to employ the toe system
to its utmost as an instrument for stimulating business enterprise la
areas required by the public interest* Finally* we w ill have the
fx*e6Ss® o f making certain that our taxes do not place unnecessary Coapitance zxcoMmm on taxpayer© or entail unmeessasy public expense*
These are bit a fear of the post-war problems suggested by our
prospective debt*
In the frnedlate post-war period there is a strong probability
that the reconversion of industry from wartime to peacetime m
the
development of new industries* the satisfaction of the acciwCUtlng
fiommtti for peacetime coiiEunarG* goods* the need, far capital replacement© which are anticipated in the anpOs depreciation and depletion
reserves now accumulating* and the satisfaction of at least minim m
èmmtids from abroad far relief and rehabilitation will oonstituie
collectively an effective buffer to a possible postwar depression.
The bugs backlog of post-war purchasing power exemplified in our own
Y&r Bonds is indeed added assurance in this respect*
These factors making for industrial revival ore by no means free
of certain dangers* however* It took us months to mobilise our peace
time industries for war} it w i n take months in turn to complete the
process of industrial demobiliaatioft for pesos* H m t this involves for
the .aasrioan people if fairly clear* It means that we must reorient
our wartime way© of doing things* our wartime ways of buying and living*
not all at once* but gradually} it means we must be on mar guard against
post-war inUMiojl in the msm m y that today we ore on guard against
mrtlse inflation* 'in intemperate buying-spree immediately upon the
termination of the w r might have precisely that sas» effect as that at
the close of the last war* when the cost of living (spiraled upward 29
percent between Bovwaber 1913 and June 1920* We must not permit «
marines© and a désir» to return to »xwnvialsnr« to rob us of the very
fruits of victory# This w i n not happen if the dembiliaattcn of war
time Mbits of spending and saving proceeds at the pace of our in&*striaX
dsaoblliaetlnn,
But we must look beyond the period of transition from war to peace,
to the period when our peooe*eoonoay will once more be reestablished to
perfora its normal fhastdons* The outlines of th a t longer period are
not as d early defined as we should life» them to be* To some extent*
however* we are shaping the character of that lon^ar period by the juans*
and especially the activities* m are now undertaking#
its constant,
*** 2 —
smoothly# Its peacetime purpose is to provide the American people
with a backlog of savings that will come In good stead indeed when
once again the sword is beaten into the ploughshare« The fact that
at the present time there are over 50 million investors in Viar Bonds,
and 2$ million participants in payroll savings plans alone, is an
eloquent tribute to the contribution *that wartime financing is making
to the solution of post-war problems#
It would be easy to exaggerate, however, the contribution of war
time financing to the solution of post-war problems# this X have no
intention of doing# The fact is that the war, in spite of all that m
may do now, will leave us heir to a host of problems long after the
guns have ceased firing and the world has settled down to the quiet
pursuits of peace# These problems are by no means insoluble} near are
they so intractable or laden with heavy forebodings as some presentday Cassandras would have us believe# To their solution, however, we
will have to bring intelligent insight and sympathetic understanding«
I
can raise here only one of the domestic problems that will face
s in, the post-war period — the problem of the debt. By the end of
,
0to»,'l944. we will have a federal debt of something like 210 billion
dollars* The mere servicing of this debt will involve interest pay
ments of b&ym&rt 4 aad-£. billion dollars — approximately equal to the
total receipts of the Federal Government in 1936, And if the war
continued beyond the middle of 1944, the debt of course will continue
mount#
ihile
enrich nor
debt being
does‘raise
them#
an internal debt, such as ours will be* servi
:sed to service the
the
to impoverish a nation
interest payments — it
restored to the people
can do no more than pose
a number of serious problems
There will be the problem of what kind of taxes to employ to
service and repay the debt# This will be Important because it w i n
involve’a possible redistribution of the costs of the war among indi
viduals# It will also involve the impact of taxés on investment,
consumption, and. therefore, the national income* The magnitude of
the debt will likewise affect the Government's freedom of action and
raise problems in regard to banking and currency policy# Above all,
a debt as large as we are likely to (have will make it more imperative
than ever that reasonably full employment with a high national income
be preserved in the post-^war period# Otherwise, it is not difficult'
to contemplate how oppressive the burden of debt might easily become#
The magnitude of the Government's fixed obligations together with
Its current revenue requirements in the post-war period will raise
other problems relating to the tax system# The principle of abilityto-pay must be preserved« It should be possible, however, to go beyond
the present techniques for measuring personal taxpaying ability toward
a more accurate concept of net income giving more adequate recognition
there can be no hard and fast boundary line between the policies
necessary for winning the war and those for winning the peace* the
character of our problems in the post-war period will be determined
in large measurd by the plane, and especially the activities, we
undertake today* War policies that also contribute to the solution
of post-war problems are better policies, therefore, than those that
do not*
Our present struggle against wartime inflation is a signal example
of the contribution that can be made b y a policy designed for w i m i n g
of the war to the winning of the peace* Fiscal and non-fiscal measures
designed to prevent inflation will aid us in winning the war — by
forestalling a ruinous rise In the cost of living, b y keeping down
Government costs, by encouraging production and not speculation, by
maintaining the public debt within manageable bounds* By the same
token, however, these very wartime measures are contributing greatly
to the prevention of post-war deflation with its attendant chain of
personal tragedy, economic chaos, and social unrest*
Taxes provide another case in point* At a time when about sixty
cents of every dollar of income earned in the country is represented
by Government purchases of tanks, ships, and planes, it is Impossible
to exaggerate the Government fs needs for additional revenues * It can
not be stressed too often also how vital these additional revenues are
for apportioning the costs of the war fairly and equitably, preventing
rises in the cost of living, and maintaining morale* let, it is not
the contribution of taxes to the more effective prosecution of the war
that is alone involved) it is also the beneficent effects of
taxes today on the world of tomorrow* Wartime taxes mean we
war once and for all now) wartime borrowing means we postpon
final redistribution of the costs of the war until the postBy taxing ourselves to the utmost today, when few civilian g
available for purchase anyway, m reduce b y so much the taxes we will
have to impose on ourselves tomorrow, when plenty of goods will be
available for purchase.
Finally, w© have the case of wartime borrowings, While the
Treasury’s policy is to tax more and borrow less, it is impossible,
let alone desirable, to finance the gigantic costs of [this war from
taxes alone, Government borrowings are therefore necessary. The
policy of the Treasury has been to raise as large a proportion of
the borrowed funds it requires from individuals, -fiduciaries, trusts,
and corporations rather than from the banks) to borrow old money father
than new money. This policy, like the others, has a dual purpose. Its
wartime purpose is to match the diversion of our production from peace
time to wartime use b y corresponding diversion of our income and savings
from peacetime to wartime use, thereby contributing to the prosecution
of the war b y seeing that our production and financial gears mesh
B i t -
Secretary M o r gent h a u today made
the f o l l o w i n g s t a t e m e n t ,
United Press
Treasury
w r i t t e n at t h e
for a discussion under
Prepares
request
t he caption,
for P o s t - W a r P r o b l e m s " :
/
public
of the
"The
TREASURY DEPARTMENT
Washington
F OR RELEASE, A F T E R N O O N NEWSPAPERS,
Monday, M a r c h 22, 1 9 4 3 « __________
Press Se r v i c e
No. 35-79
S e c r e t a r y M o r g e n t h a u t o d a y made p u b l i c the f o l l o w i n g s t a t e
ment,
w r i t t e n at the r e q u e s t
u n d e r the caption,
of the U n i t e d Press for a d i s c ussion
"The T r e a s u r y P r e p a r e s
for P o s t - W a r P r o b l e m s ’':
T h e r e can be no h a r d a n d fast b o u n d a r y line between the
po l i c i e s n e c e s s a r y f o r w i n n i n g the w a r a n d t h ose for w i n n i n g the
peace*
The c h a r a c t e r of our pr o b l e m s in th e p o s t - w a r p e r i o d
w ill be d e t e r m i n e d in l a rge m e a s u r e by the plans, an d especially
the activities, we u n d e r t a k e today,
W a r policies that also c o n
tr i b u t e to t he so l u t i o n of p o s t - w a r problems a re b e t t e r policies,
therefore, than t h o s e that do not.
Our p r e s e n t s t r u g g l e a g a i n s t w a r t i m e inflation is a signal
example of t h e cont r i b u t i o n tha t can be made by a policjr d e
s i gned f or w i n n i n g of t he w a r to t he w i n n i n g of t he peace*.
F i s c a l a n d n o n - f i s c a l measures d e s i g n e d to prevent inflation
w i l l a id us in w i n n i n g the w a r -- by f o r e s t a l l i n g a ruinous rise
in t he cost of living, by ke e p i n g down G o v e r n m e n t costs, by en
cou r a g i n g p r o d u c t i o n a nd not speculation, b y m a i n t a i n i n g the
p u b l i c debt w i t h i n m a n a g e a b l e bounds,
By the same token, h o w
ever, t h e s e very w a r t i m e m e a sures a r e c o n t r i b u t i n g g r e a t l y to
the p r e v e n t i o n of p o s t r w a r d e f l a t i o n w i t h its a t t e n d a n t chain
of p e r s o n a l tragedy, economic chaos, a n d s o c i a l unrest,,
Taxes p r o vide a n o t h e r case in point.
At a t i m e when a b out
s i xty cents of every dollar of income earned in t h e c o untry is
r e p r e s e n t e d by G o v e r n m e n t p u r c h a s e s of tanks, ships, and planes,
it is i m p o ssible to exaggerate the G o v e r n m e n t ’s needs for a d d i
t i o n a l revenues.
It cannot be s t r e s s e d too often als o h ow vital
t h e s e a d d i t i o n a l revenues a r e for a p p o r t i o n i n g the costs of the
w a r f a i r l y a n d equitably, p r e v e n t i n g rises in the cost of l i v
ing, and m a i n t a i n i n g morale.
Yet, it is not the c ontribution of
taxes to the more eff e c t i v e p r o s e c u t i o n of the w a r that is alone
involved; it is also t he b e n e f i c e n t effects of i n c r eased taxes
t o d a y on t h e w o r l d of tomorrow,
Y/artime taxes mean we p a y f or
w a r once a n d f o r a l l now; w a r t i m e bo r r o w i n g means we p o s t p o n e
t he final r e d i s t r i b u t i o n of t he costs of t he w a r u n til the p o s t
war future.
By t a x i n g ourselves to the u t m o s t today, when f ew
civilian goods are a v a i l a b l e for p u r c h a s e anyway,, we r e d u c e by
so m u c h the taxes we w i l l hav e to impose on ourselves tomorrow,
when p l e n t y of goods w i l l be a v a i l a b l e for purchase.
Finally, w e h a v e the case of w a r t i m e borrowings.,
Y/hile the
T r e a s u r y ’-s p o l i c y is to t a x m o r e a nd b o r r o w less, it is i m p o s
sible, let a l o n e desirable, to f i n a n c e the g i g a n t i c costs of
-
?
-
this war from taxes alone.
Government borrowings are therefore
necessar 5r. The policy of the Treasury has been to raise as
large a proportion of the borrowed funds it requires from indi
viduals, fiduciaries, trusts, and corporations rather than from
the banks; to borrow old money rather than new money. This
policy, like the others, has a dual purpose.
Its wartime pur
pose is to match the diversion of our production from peacetime
to wartime use by corresponding diversion of our income and sav
ings from peacetime to wartime use, thereby contributing to the
prosecution of the war by seeing that our production and finan
cial gears mesh smoothly.
Its peacetime purpose is to provide
the American people with a backlog of savings that will come in
good stead indeed when once again the sword is beaten into the
ploughshare.
The fact that at the present time there are over
50 million investors in War Bonds, and 25 million participants
in payroll savings plans alone, is an eloquent tribute to the
contribution that wartime financing is making to the solution
of post-war problems.
It would be easy to exaggerate, however, the contribution
of wartime financing to the solution of post-war problems.
This
I have no intention of doing. The fact is that the war, in
spite of all that we may do now,' will leave us heir to a host of
problems long after the guns have ceased firing and the world
has settled down to the quiet pursuits of peace.
These problems
are by no means insoluble; nor are they so intractable or laden
with heavy forebodings as some present-day Cassandras would have
us believe.
To their solution, however, we will have to bring
intelligent insight and sympathetic understanding.
I can raise here only one of the domestic problems that will
face us in the post-war period -- the problem of the debt.
By
the end of June, 1944, we will have a federal debt of something
like 210 billion dollars unless additional tax legislation is
passed.
The mere servibing of this debt will involve interest
payments of more than 4 billion dollars — approximately equal
to the total receipts of the Federal Government in 1936* Änd if
the war continues beyond the middle of 1944 , the debt of course
will continue to mount.
While an internal debt, such as ours will be, serves neither
to enrich nor to impoverish a nation -- the taxes raised to
service the debt being restored to the people by why of interest
payments -- it does raise a number of serious problems,
I can
do no more than pose them.
There will be the problem of what kind of taxes to employ
to service and repay the debt. This will be important because
it will involve a possible redistribution of the costs of the
war among individuals.
It will also involve the impact of taxes
on investment, consumption, and, therefore, the national income.
The magnitude of the debt will likewise affect the Government's
freedom of. action and raise problems in regard to banking and
currency policy.
Above all, a debt as large as we are likely to
- 3
-
have will make it more imperative than ever that reasonably full
employment with a high national income be preserved in the post
war period.
Otherwise, it is not difficult to contemplate how
oppressive the burden of debt might easily become.
The magnitude of the Government’s fixed obligations together
with its current revenue requirements in the post-war period
will raise other problems relating to the tax system.
The prin
ciple of ability-to-pay must be preserved.
It should be pos
sible, however, to go beyond the p resent,techniques for measur
ing personal taxpaying ability toward a more accurate concept
of net income giving more adequate recognition to expenses in
curred in securing our income and variations in the cost of pro
viding a basic living standard. The post-war period may^require
a substantial reorientation in our business and consumption^
taxes*
It will undoubtedly involve active effort to avoid in
ternational double taxation and better integration of the Fed
eral tax system with those of State and local governments, While
we will want to shun taxes that hinder business enterprise, we
will also want to employ the tax system to its utmost as an in
strument for stimulating business enterprise in areas required
by the public interest.
Finally, we will have the problem of
making certain that our taxes do not place unnecessary com
pliance problems on taxpayers or entail unnecessary public ex
pense ,y
These are but a few of the post-war problems suggested by
our prospective debt.
In the immediate post-war period there is a strong probabil
ity that the reconversion of industry from wartime to peacetime
uses, the development of new industries, the satisfaction of the
accumulating demand for peacetime consumers’ goods, the need for
capital replacements which are anticipated in the ample depre
ciation and depletion reserves now accumulating, and the satis
faction of at least minimum demands from abroad for relief and
rehabilitation will constitute collectively an effective buffer
to a possible post-war depression.
The huge backlog of post
war purchasing power exemplified in our own War Bonds is indeed
added assurance in this respect.
These factors making for industrial revival are by no means
free of certain dangers, however.
It took us months to mobilize
our peacetime industries for war; it will take months in turn to
complete the process of industrial demobilization for peace.
What this involves for the American people is fairly clear.
It
means that we must reorient our wartime ways of doing things,
our wartime ways of buying and living, not all at once, but
gradually; it means we must be on our guard against post-war in
flation in the same way that today we are on guard against war
time inflation. An intemperate buying-spree immediately upon
the termination of the war might have precisely the same effect
as that at the close of the last war, when the cost of living
-■4 -
spiraled upward 29 percent between November 1918 and June 1920.
We must not permit war weariness and a desire to return to
normalcy” to rob us of the very fruits of victory. This will
not happen if the demobilization of wartime habits of spending
and saving proceeds at the pace of our industrial demobilization.
But we must look beyond the period of transition from war
to peace, to the period when our peace economy will once more
^ e s t a b l i s h e d to perform its normal functions.
The outlines
01 that longer period are not as clearly defined as we should
like them to be, To some extent, however, we are shaping the
UiiC
character 01 that longer period by the plans, and especially the
activities, we are now undertaking.
By its constant, unrelent
ing emphasis upon the necessity for more taxes, more saving, and
more sacrifice, the Treasury is today laying the basis for a
more prosperous and durable peace.
The same policies, moreover,
will give the Treasury #in the post-war period that freedom of
action and that flexibility of maneuver so vital for coping with
unforeseen developments bound to arise.
The war has opened our eyes to the unimagined productivity
of Industrial and Agricultural America.
Wartime shortages of
peacetime^goods and services have not blinded us to the enormous
potentialities for^abundance in our dynamic industrial society.
It is precisely this unexampled capacity to produce, shorn of
its fetters, upon which the future welfare and prosperity of our
people ultimately depend,
If in the peace to come we realize
the potentialities for abundance inherent in our great produc
tivity and do not permit our precious resources to lie idle in
stagnant pools, we have little to fear as a nation, The prom
ise of plenty exists today; the fact of plenty waits on the mor
row.
-o0o~
TBEASUHX DEPABTMBHT
Washington
Á
,A °
'
K
W
Press Service
FOB RELEASE, UOHHIMG H S U S ’APERS
!r Ä
! Ä
I#
t m t o . March 23. 1943.
I P
the Secretary of the Treasury announced last evening that the traders for 0800,000,0
or thereabout«, of 91-day Treasury bills to be dated «arch 24 and to nature June 23, 1943
which were offered on March 19, 1943, were opened at the Federal Eeserve Banks on March 22
lilts
The details of this issue are as follows:
Total applied for - H , 329,071,000
Total accepted
002,051,000
Bange of accepted bids:
High
Low
Average price
■- 99.925 Equivalent rate of discount approx. 0.297% per annua
« 99.905
•
m •
•
*
0.376% *
*
- 99.906
■
■
•
•
*
0.373% *
*
pnci
(37 percent of the anount bid for at the low price was accspted.)
Federal Reeerve
District
Total
Applied For
Total
Accepted
Boston
Mew Tori:
Philadelphia
Cleveland
Richmond
Atlanta
Chicago
St. Louis
Minneapolis
Kansas City
Balias
San Francisco
,
47,009,000
908,946,000
26,470,000
27,781,000
26,642,000
12,730,000
136,838,000
30,464,000
7,798,000
18,451,000
13,597,000
73.145,000
1 36,104,000
477,130,000
19,572,000
22,776,000
23,390,000
9,963,000
96,9a , 000
16,192,000
7,707,000
15,728,000
12,108,000
64.420.000
<1,329,871,000
1802,051,000
TOTAL
pereei
eral R<
strict
Ifor
Is
iieapol;
as Ci
as
franc
TREASURY DEPARTMENT
Washington
FOR RELEASE, MORNING- NEWSPAPERS,
Tuesday, March 23, 1943.
3-22-43
”
---------
Press Service
N o . 35-80
The Secretary of the Treasury announced last evening that
the tenders lor $>800,000,000, or thereabouts, of 91-day Treasury
bills to be dated March 24 and to nature June 23, 1943, which
were offered on March 19, 1943, were opened at the Federal Reserve
Banks on March 22.
The details of this issue are as follows:
Total applied for - $>1,329,871,000
Total accepted
802,051,000
Range of accepted bids:
High
- 99.925 Equivalent rate of discount approx. 0,297%
* per annum
Low
- 99,905 Equivalent rate of.discount approx. 0 f376%
per annum
Average - 99.906 Equivalent rate of discount approx. 0.373%
price
per annum
(37 percent of the amount bid for at the 1ow price was accepted.)
Federal Reserve
District
Total
Applied For
Total
Accepted
Boston
New York
Philadelphia
Cleveland
Ri chmond
A tlanta
Chicago
St, Louis
Minneapolis
Kansas City
Dallas
San Francisco
I
47,009,000
908,946,000
26,470,000
27,781,000
26,642,000
12,730,000
136,838,000
30,464,000
7,798,000
.18,451,000
13,597,000
73,145,000
® 36,1Q4,00®
477,130,000
19,572,000
22,776,000
23,390,000
9,983^000
96,941,000
16,192,000
7,707,000
15,728,000
12,108,000
64,420,000
$1,329,871,000
$802,051,000
TOTAL
TREASURY DEPARTMENT
Y/ashington
FOR IMMEDIATE RELEASE*
Monday, March 22* 1943.
Press Service
Ho, 35-81
Reports from the sixty-four collection districts of the
Bureau of Internal Revenue showed a total of $3*545,818,548
in income and excess profits taxes had been collected and
deposited this month through March 20, Commissioner Guy T#
Helvering reported to Secretary Morgenthau today,
This com
pares with a total of $>2,572>644>577 for the same period a
year ago.
as follows:
The amounts deposited by collection districts are
i
Total Income and
Excess Profits Tax
Collected and Deposited
March 1 - 2 0 , 1943
Districts
Alabama
Arizona
Arkans as
1st California
6th California.
Colorado
Connecticut
Delaware
Florida
Georgia
Hawaii
Idaho
1st Illinois
8th Illinois
Indiana
Iowa
Kansas
Kentucky
Louisiana
Maine
Maryland
Massachusetts
Michigan
Minnesota
Mississippi
1st Missouri
6th Missouri
Montana
Nebraska
Nevada
New Hampshire
1st New Jersey
5th New Jersey
New Mexico
1st New York
2nd New York
3rd New York
14th New York
21st New York
28th New York
North Carolina
North Dakota
1st Ohio
10th Ohio
11th Ohio
18th Ohio
Oklahoma
Oregon
1st Pennsylvania
12th Pennsylvania
23rd Pennsylvania
Bhode Island
South Carolina
South Dakota
Tennessee
1st Texas
2nd Texas
Utah
Yermont
Virginia
Washington
West Virginia
Wisconsin
Wyoming
.
16,730,145
6,.486,415
11.651.419
102,463,663
81,486,446
22,897,700
80,670,928
80,305,583
32,140,589
27,893,889
16,587,981
6,619,373
273,483,252
57,236,629
43,487,383
31,823,428
40,538,001
17,855,333
34,799,349
15,013,313
84,962,902
124,590,197
88,974,034
71,961,912
12,538,813
77,157,205
33,442,090
9,985,948
16,419,427
5,257,214
7,877,522
16,966,758
80,402,955
5,176,506
65,447,407
364,638,606
252,130,138
111,168,363
34,794,571
65,631,613
55,060,931
5,175,224
71,196,395
19,738,039
24,759,850
145,485,711
25,659,693
13,709,287
152,212,500
49,724,747
150,061,326
23,920,532
18,789,415
5,250,687
22,489,989
47.059.419
23,355,488
8,315,117
8,056,521
38,976,444
22,829,406
19,905,303
60,106,261
4,285,263
Total Income and
Excess Profits Tax
Collected and Deposited
March 1 - 2 0 , 1942
13,292,088
4,758,779
8,779,398
72,875,535
47,742,134
13,235,350
85,778,097
65,562,667
25.035.965
17,217,132
8,073,641
3,969,588
193,601,116
26,804,428
53,180,449
16,196,508
16,328,365
14,089,637
25.178.966
9,528,248
57,546,496
49,171,279
145,031,041
32,413,064
8,239,692
45,615,854
15,611,102
5,500,815
8,873,705
3,076,778
6,657,990
16,546,422
71,561,406
2,839,103
54,871,202
251,970,900
176,725,147
72,959,313
25,492,323
40,859,104
29,051,060
1,679,068
51,756,353
26,326,055
15,245,119
103,516,573
18,751,918
10,066,278
86,761,980
31,744,169
124,943,615
16,592,611
11,676,146
2.069.911
22,518,770
43,203,997
23,573,593
5.407.912
4,570,449
31,514,026
34,454,400
19,489,294
42,258,292
2,682,161
f h ® C o m m i t t e e r e c o g n i s e s t h a t the i d ® « o f a J o i n t
federal-State «gooey 1 « not new ©r original,
The
c r e a t i o n of ««eh a n a g e n c y ha® bees w i d e l y endorsed,
t h e C o m m i t t e e t a k e s t h e v i e w t h a t the c r e a t i o n o f a n
A u t h o r i t y w o u l d p r o v i d e the s t i m u l u s n e c e s s a r y to
g e t coordination a c t i v e l y u n d e r way.
Other
Subjects
Covered by
t he E s c o r t
t h e R e p o r t o f the C o m m i t t e e e x a m i n e s a w i d e
v a r i e t y of p r o b l e m s within the g e n e r a l f i e l d o f f e d e r a l *
State-local fiscal relations.
I n t o n e e a s e s it m a k e s
s p e c i f i c r e c o m m e n d a t i o n s f o r the e l i m i n a t i o n o f c o n
f l i c t s ; in o t h e r s , it c o n f i n e s I t s e l f to s u g g e s t i n g
poselble method« of approach.
t h e R e p o r t c o n s i d e r s i n d e t a i l the c o o r d i n a t i o n
o f f e d e r a l a n d St a t e taxes In the f i e l d s of income,
d e a t h , tobacco, liquor, automotive/ sale«, business,
e t o o k *transfer, and payroll taxation.
In c o n n e c t i o n
w i t h s e v e r a l o f t h e s e ta x e s , It s t r e s s e s t he n e e d
f o r F e d e ral-State c o o p e r a t i o n in tax a d m i n i s t r a t i o n
a s a m e a n s of a c h i e v i n g c o o r d i n a t i o n .
I n the a r e a
o f t a x i m m u n i t i e s , it d i s c u s s e s p a y m e n t s i n l i e u o f
taxes, State and local t a x a t i o n o f g o v e rnment contracts,
a n d tax-exempt securities.
I n a d d i t i o n , the E e p o r t e x a m i n e s ( 1 ) t he n e e d f o r
independent sources of local revenue,
t he r e a l l o c ation of functions among layers of government,
( 3 ) t h e n e e d f o r f e d e r a l p a r t i c i p a t i o n l a the f i n a n c i n g
o f p u b l i c e d u c a t i o n , (k) the r e m o v a l o f t r a d e b a r r i e r «
a n d the c o o r d i n a t i o n o f o t h e r I n t e r s t a t e relations,
a n d ( 5 } the c o s t o f t a x a d m i n i s t r a t i o n a n d t a x p a y e r s *
compliance.
xx 'so xne Frees on AprO>S.,^
sathori as its
publication as a Congressioqhl- foc\iment later this spring
A memorandum to the frecJRtSnt, M k l e l n g him of the statue
of the E e p o r t and t r a n s m i t t i n g a c o p y f o f his e x a m i n e l e t t e r t r a n s i t ! l u g ; the E e p o r t to t he m e m b e r ® o f the
Senate finance Comm i t t e e a&d o f t h e F t o u f i e Mays and Means
C o®lttt«e''dd:;'llso a t t a c h e d .
1
I^ i" ^
3Major Heeommendation
To s a t i s f y t h e s e r e q u i r e m e n t s , t h e C o m m i t t e e p r o p o s e s t h a t the C o n g r e s s , w i t h the a c t i v e s u p p o r t o f
the States, c r e a t e a joint f e d e r a l - s t a t e F i s c a l A u t h o r
ity.
The A u t h o r i t y w o u l d a d m i n i s t e r no taxes and w o u l d
d i c t a t e n o d e c i s i o n s to e i t h e r the F e d e r a l G o v e r n m e n t
o r the States.
It w o u l d h e a c o n t i n u o u s , o f f i c i a l
a d v i s o r y a n d n e g o t i a t i n g b o d y , q u a l i f i e d to m a k e
Impartial suggestions on matters of conflicting taxation
a n d J o i n t f i s c a l p o l i c y t o the C o n g r e s s , to the T r e a s u r y
a n d t o the G o v e r n o r s , t a x o f f i c i a l s a n d l e g i s l a t o r s o f
the S t a t e « • The A u t h o r i t y w o u l d e x p r e s s a d v i s o r y
o p i n i o n s on p r o p o s a l s f o r I n t e r g o v e r n m e n t a l fiscal
c o o r d i n a t i o n a n d f r o m t i m e to ifclme w o u l d h e r e q u i r e d to
m a k e r e c o m m e n d a t i o n f o r t h e s o l u t i o n of s p e c i f i c
problems.
The A u t h o r i t y w o u l d d e v e l o p a p r o g r a m f o r
d e a l i n g s y s t e m a t i c a l l y w i t h l o c a l t a x a t i o n of F e d e r a l
properties and Federal transactions.
It w o u l d g a t h e r
and disseminate Information on Intergovernmental fiscal
relations, conduct necessary research, end facilitate
the improvement of public financial reporting by g overn
m e n t a l units.
The C o m m i t t e e s u g g e s t s that the A u t h o r i t y be c o m
p o s e d o f t h r e e f u l l - t i m e m e m b e r s , o n e to b e a p p o i n t e d
b y t h e P r e s i d e n t , o n e to be d e s i g n a t e d b y t h e S t a t e s ,
a n d the third to be selected by these two m e m b e r s .
The
S t a t e m e m b e r w o u l d be s e l e c t e d b y a c o n f e r e n c e o f
d e l e g a t e s n a m e d f o r t h a t p u r p o s e b y t h e Governors. T h e
C o m m i t t e e s u g g e s t s t h a t the A u t h o r i t y b e a s s i s t e d b y
an advisory council representing Congressional Committees
a n d r e c o gnised o r g a n i s a t i o n s of State, l ocal an d F e d e r a l
officials.
The Committee p r oposes that an initial annual budget
o f a p p r o x i m a t e l y $ 1 5 0 , 0 0 0 to I P O O , 0 0 0 b e a u t h o r i s e d : that
h a l f of this f u n d be a p p r o p r i a t e d b y the Federal G o v e r n
ment without any contingent (matching) requirements; and
that the o t h e r half be raised from State leg i s l a t u r e s
t h r o u g h thejm*( g o v e r n o r s a n d t h e i r d e l e g a t e s .
The C o m
m i t t e e f o r e s e e s t h a t t h e p r o c e s s of p r o v i d i n g S t a t e
f i n a n c i a l support will involve d e l a y a n d u n c e r t a i n t y ,
a n d p r o p o s e s t h a t t h e f e d e r a l s h a r e be s u f f i c i e n t to
e n a b l e the A u t h o r i t y to m a k e a s h o w i n g .
I n f o r m a t i o n w h i c h w i l l he h e l p f u l to m e m b e r s of
C o n g r e s s a n d to o t h e r s c o n c e r n e d w i t h t h e p r o b l e m o f
i n t e r g o v e r n m e n t a l fiscal relations.
Thesis
of the
Beport
The Commi t t e e r e p orts that the area an d v o l u m e
of o v e r l a p p i n g Federal, State, an d l o c a l taxes c o n
t i n u e to i n c r e a s e i n s p i t e o f t h e u n i v e r s a l r e c o g n i
t i o n t h a t t a x c o n f l i c t s a r e b a d f o r the t a x p a y e r , b a d
f o r t he g o v e r n m e n t s i n v o l v e d , a n d b a d f o r the F e d e r a l
s y s t e m of* g o v e r n m e n t i t s e l f .
It e x p r e s s e s t he v i e w
t h a t t h e a n s w e r to the p r o b l e m o f i n t e r g o v e r n m e n t a l
f i s c a l r e l a t i o n s w i l l not b e found in a g r a n d f o r m u l a
w h i c h e n d e a v o r s to s o l v e t he p r o b l e m f o r a l l t i m e o r
e v e n f o r a decade, because there can be no final solu
tion for a continually shifting problem.
T he C o m
m i t t e e t a k e ® the v i e w t h a t t h e a n s w e r w i l l be f o u n d I n
coordination and cooperation rather than subordination
and coercion.
Th e p r o b l e m calls for a h i g h degree of
g e n u i n e m u t u a l i t y a n d the S t a t e s l i s t b e a s s u r e d t h a t
I n t e r g o v e r n m e n t a l c o o p e r a t i o n w i l l n o t t a k e the f o r »
of federal domi n a t i o n .
In the o p i n i o n o f the C o m m i t t e e , a
the p r o b l e m of In t e r g o v e r n m e n t a l fiscal
s a t i s f y three c onditions:
s o l u t i o n to
relations must
(1) It m u s t b e m t r u l y c o o p e r a t i v e e f f o r t ,
w i l l i n g l y j o l n f d l in b y b o t h the F e d e r a l O o v e r n m e n t a n d t h e States;
(2) It m u s t u t i l i s e l e g i s l a t i v e a n d
a d m i n i s t r a t i v e , not c o n s t i t u t i o n a l channels,
In o r d e r to p e r m i t c o n t i n u a l a d a p t a t i o n to
c h a n g i n g needs; and
(J5 It m u s t u t i l i s e c h a n n e l s w h i c h a r e
permanent, not temporary; g o v e r n m e n t a l , not
private; sad Impartial and expert, not partisan.
MMCRANDIM CONCïRNBjG REPORT TO SECRETARY MORGENTHAU
BY THE COMMITTEE ON INTÎRG01ERNMENTAL FISCAL RELATIONS
tl
I K
j fee,
ïommlttee o n I n t e r g o v e r n m e n t a l F i e n a i Relatio n s ,
Cfhe Ao\
which
h yefai
imm &d e s i g n a t e d In J u n e , 1 9 dl, to e x a m i n e t h e p r o b l e m
of Ie d e r a ! - State-local fiscal relations, has submitted
i t ® (leport.
I
Conclu
iat the
R m M «
IGoverni
The Report consists of six volumes, Volume I
contains the Major Conclusions and Recommendatlon® of.
the Committee, These are «ammariaed/i n 1mrm& of £r
a c t i o n p r o g r a m f o r e a c h l e v e l o f d omm
v e r a m e nt /jsfcdfem-ma d
>af IciltimerTt
V o l u m e s II t h r o u g h f l c o n t a i n t he R e p o r t
of the Committee.
i c e M m a i .i*§£tô o»y>Im »
he Coi
m sent
ftp
thapi»epip|pr T h e C o m m i t t e e h a s a l s o s u b m i t t e d a n u m b e r
o f sp e c i a l s t u d i e s p r e p a r e d b y m e m b e r s of it« staff, wit h
the u n d e r s t a n d i n g tha t tho s e f o u n d s u i t a b l e for p u b l i c a
t i o n w o u l d b e e d i t e d b y t he D i v i s i o n of f a x R e s e a r c h a n d
m a d e a v a i l a b l e f o r d i s t r i b u t i o n b e f o r e the e n d o f 1^§§§,
merit h a s b e e n dl.acya^a d ^ w i t h ^ ^ i ^ « a h a 4 . m m a ^ ^ . o ^ ^ t h e ^ ^ 4 l o ^ e , ^ ^
e Report was
p r e p a r e d w i t h i n t he T r e a s u r y a n d w i t h t h e c o o p e r a t i o n
o f r e s p o n s i b l e o f f i c i a l s of the T r e a s u r y , b u t t e s t the
f i n d i n g s end r e c o m m e n d a t i o n s a r e t h o s e o f the C o m m i t t e e
an d d o not n e c e s s a r i l y r e f l e c t Tre a s u r y views.
:
¿ana tor.,j
4 * e .tlaflu
'
rnmmX
* U ai>.to. rthg
w
f.«.tlaa
T h e R e p o r t m a k e s a n i m p o r t a n t c o n t r i b u t i o n t o the
p r o b l e m o f f e d e r a l - S t a t e - l o c a l f i s c a l r e l a t i o n s i n the
U n i t e d States and b r i n g s t o g e t h e r a body of current
for put
availat
h
|of reap*
'dations
views,
i Rk
: itate-lc
j iody of
ijilli'tO0
ji llation
to
o
ill The
j| late, a
11ploa.t
R ed*
! ; iView
¡tiensi
j|;obleju:
!lation
atthe
bordini
«ffiltui
«ratìoi
MEMORANDUM C0HC3R1TIHS REPOST TO SECRETARY MORQEKTHXU
BY THE COMMITTEE OK IUTSRGOVESHMSHTA1 FISCAL ffiUMOHS
S e c r e t a r y I n t e r g o v e r n m e n t a l Fiscal Relations, which the
secretary of the Treasury designated in June, IdUl. to eramine tv,»
Report?
Feieral-State-local fiscal relations; has submitted its
C n „ M Ihe Eepor!' consists of six volumes. Volume I contains the Malor
at the e?dSo?nv f'00»?8“4» « « » » °f « » Committee, These are summarised
-n of Volume I m terms of an action urogram for each level of
Tr c
~
; v°lume1
s 11 through VI contain the Renort of the Committ4
The Committee has also submitted a number of special studies preoared
y members of its staff, with the understanding that those found’suitable
available0fo r ° r M b8 editsd ^ th® ^vision of Tax Research and made
available for distribution before the end of 19 4 3 ,
. , .
aatlon, are those sf the Connlttee and do net n o e e e s e n i f r e n e e t “^
^
State TlocalP? ^ ff'98,a?.ini>ortallt contribution to the problem of FederalState-local fiscal relations in the United States and brings together a
a ^ t o ot°Lrrent inforffiatlon
to helpful to members o ^ c ^ e s s
relations. 8 ooncernei wlth the Problem of intergovernmental fiscal
Thesis of the Re-oort
for
ifl co
Stn+oTilf C o m m i t t e e reports that the area and volume of overlapping Federal
State, and local taxes continue to increase in spite of theuniversalr??n’
involv j"
*13,4
80"f U c t * are bad
the taxpayer, bad
the go??rnmen?
the vi?,d\ w
iad f°r th® Federal s*
vstera of government itself. It exores^e'
lations W U ? no?6b?nf ■'erst° the proble”* of intergovernmental fiscal re?
» ,
°Und “ a e r e t A f0rmula which endeavors to solve the
2
* f" a11
°r CTen for a decade, because there can be no final
that th? ;!?, 3
sllimne Problem. The Committee takes the view
subordination8? ^
1 be .f0UIld in coordination and cooperation rather than
aad coercion. The problem calls for a high degree of e-enu
ins mutuality and the States must be assured that lntergoverSe?t?l f T
operation will not take the form of Federal domination,
erMental 00
.
tiie °Pini°n Of the Committee, a solution to the problem of
intergovernmental fiscal relations must satisfy three conditions:
. ^ (I) it must be a truly cooperative effort, willingly
joined in by both the Federal Government and the States;
(2) it must utilize legislative and administrative,
not constitutional channels, in order to permit continual
adaptation to changing needs; and
^ ^^ must utilize channels which are permanent,
not temporary; governmental, not private; and impartial
and expert, not partisan.
Major Recommendation
To satisfy these requirements, the Committee proposes that the
Congress, with the active support of the States, create a joint Federald i c t a t e ^ ^ e r ^ ^ 1*?'
Authority would administer no taxes and would
L ! decLs:vons t0 eltber the federal Government or the States, It
to make imrartÌ aV°,US ’ °.f10lal aivi£>0I-y and.negotiating tody, qualified
f i s o a f p o H c v to theSf
°? ma!teiS 0f oonfli ^ i n g taxation and joint
V°±lcy to the Congress, to the Treasury, and to the Governors tax
would
visoryaopinions6f Slat°rS f f ® States- Ihe
would express adfrom time ?o t
proposals for intergovernmental fiscal coordination and
from time to time would be required to make recommendation for the solution
specific problems. The Authority would develop a program for dealing
lllìTnt
Ì S f 1 taf ti0n °f
p r ° p e m e s eand Federi trfnsfiscarreliiiouf
f * * dlaseraiaate information on intergovernmental
ment of
f necessary research, and facilitate the improvement of public financial reporting by governmental units.
The Committee suggests that the Authority be composed of three full- '
J
"member would L
by Ìhe Z v e v n l r ^
y the Governors.
W
*
* the
selected
to be designated by
these
members. The State
£
C * 7 * c o n i e v e n e e of delegates named for that purpose
The Committee suggest that the Authority be assisted bv
organizations°of°St
Congressional Committees and recognized
rgamzations of State, local and federal officials,
$1-50 000 t o ^ P O O ^ o n T 088! ^ ^ ^ inltlal annttal
approximately
authorized; that half of this fund he appropriated
and that t h r h ? Ve£“
without any contingent (matching) requirements;
nd .hat the ether half be raised from State legislatures through their
providing Statehf-T delef tes' The CoW Ù « e e foresees that the process of
proposes^that th,
sdPport will involve delay and uncertainty, and
»SeTsho^ng!
Shar®
suffioient to eaabda
Authority to
The Committee recognizes that the idea of a joint Federal-State
IT
ne
4
a m
j
— -1
mi
. .
-
~—
„ v«uviOW4
4.i«3 vomna^Lee xauzes the view that til
of an Authority would provide the stimulus necessary to set
actively under way.
P^^er Subjects Covered by the, Report
... .
rt of the Committee examines a wide variety of problems
within the general field of Federal-State-local fiscal relations*
In
some cases it makes specific recommendations for the elimination of conij.icts; in others, it confines itself to suggesting possible methods of
ï
ReP°rt considers in detail the coordination of Federal and State
taxes in the fields of income, death* tobacco, liquor, automotive, sales,
business, stock-transfer, and payroll taxation* In connection with sever*
ai. of these taxes, it stresses the need for Federal-State cooperation in
tax administration as a means of achieving coordination.
In the area of
tax immunities, it discusses payments in lieu of taxes, State and local
taxation of government contracts, and tax-exempt securities.
In addition, the Report examines (1 ) the need for independent
sources of local revenue, (2 ) the reallocation of functions among layers
° ; ? r eT ent*
nee{i
federal participation in the financing of
public education, (4) the removal of trade barriers and the coordination
of other interstate relations, and (5) the cost of tax administration and
taxpayers*
compliance.
Treasury Department
Division of Tax Research
March 2 k t 1 9 U3
TREASURY DEPARTMENT
Washington
POR RELEASE» AFTERNOON NEWSPAPERS
Thursday« March 25. 1945
Presa
Servio«
Ho* 35“82
Secretary of the Treasury Morgenthau today made public statis
tics from the preliminary report, Statistics of Inoome for 1941,
Fhrt 1, compiled from individual income tax returns and taxable
fiduciary income tax returns for 1941 filed in the period January
through June 1942, prepared under the direction of Commissioner of
Internal Revenue Guy T. Helvering,
The total number of returns filed is 25,618,013, of which
15,477,996 are individual returns, Form 1040; and 10,057,299 are
the optional form. Form 1040A, filed by individuals with oertain
gross income of #3,000 or less; and 82,718 are taxable fiduciary re
turns, Form 1041«
The total net inoome reported is #58,862,154,484 and total tax
is #3,892,410,074«
There are 17,417,215 taxable returns ofkwhich 17,416,919 show
net income of #45,986,130,727, and 296 show deficit of #7,557,945,
owing to net long-term eapital loss but with #2,303*376 alternative
tax«
Of the nontaxable individual returns, 8,101,499 show net inoome
of #12,876,023,757, — nontaxable because exemptions and credits ex
ceed income? and 99,299 show a deficit of #284,023,492, — returns
on which deductions equal or exceed total income«
For all returns with net inoome, the average tax is #152 and
the effective tax rate is 6«6 per cent; for the taxable returns with
net inoome the average tax is #223 and the effective tax rate is 8*5
per cent«
The increase or decrease in the number of returns, the net in
come, deficit, and taxes in this report compared with the same items
in the preliminary report for 1940, is shown in the following table*
-
2
-
Individual return® and taxable fiduciary returns, 1941 and 1940;
Number of returns, net income, deficit, and taxes
(Money figures in thousands)
Preliminary report
1941
Total individual and tax
able fiduciary returns *
Number of returns
Net income
Deficit
Total tax
Taxable individual and
fiduciary returns*
With net income*
Number of returns
Net income
Tax
Normal tax
Surtax
Alternative tax 3/
Defense tax 4/
Optional tax
Individual returns with
no net income*
Number of returns
Deficit
Alternative tax
Nontaxable individual
returns *
With net income 6/*
Number of returns
Net income
With no net income 7/*
Number of returns
Deficit
For footnotes, see p. 11
1940
Inorease or decrease
1941 over 1940
Amount
Percent
1/25,618,013
58,862,154
291,581
2/3,892,410
14,475,740
36,231,054
244,555
1,494,139
11,142,273
22,631,100
47,026
2,398,271
76,97
62,46
19.23
160.51
17,416,919
1/45,986,131
Z / 3,890,107
556,586
1,903,558
1,067,959
1,142
360,861
7,389,271
23,418,412
1,493,666
403,434
425,012
536,802
128,418
10,027,648
22,567,719
2,396,441
153,152
1,478,546
531,158
- 127,276
135.71
96.37
160.44
37.96
?A7.88
98.95
-99.11
296
7,558
5/2,303
46
2,551
473
250
5,007
1,830
543.48
196.31
387.02
8,101,499
12,876,024
7,020,355
12,812,642
1,081,144
63,381
15.40
.49
99,299
284,023
66,068
242,005
33,231
42,019
50.30
17.36
« 3 •
The major changes in law affecting the income data on returns
for the taxable year 1941, arej Elimination of the defense tax; im
position of surtax upon the entire surtax net income with an increase
in the surtax rates; provision for an optional tax on individuals with
certain gross income of $3,000 or less, in lieu of the normal tax and
surtax; reduction in the amount of gross income for which a return is
required to be filed (l) from $2,000 to $1,500 for a married person
living with husband or wife for the entire taxable year, or a person
who is head of a family, and (2) from $800 to $750 for a single person,
a married person not living with husband or wife, or an estate; re
duction of the personal exemption (1) from $2,000 to $1,500 for a
married person living with husband or wife for the entire taxable year
or a person who is head of a family, and (2) from $800 to $750 for a
single person, a married person not living with husband or wife, or
an estate; and disallowance of credit for one dependent when taxpayer
i® head of a family by reason of one or more dependents for whom he
would be entitled to credit*
The Public Debt Act of 1941 provides for the taxation of inter
est on obligations issued on and after March 1, 1941 by the United States
or any agency or instrumentality thereof.
The returns inoluded in this report are, in general, for the
calendar year ended December 31, 1941; however, there are included
a number of returns for a fiscal year, other than a calendar year,
ending within the period July 1941 through June 1942, and part year
returns for which the greater part of the accounting period fall?
in 1941. Returns from which data are tabulated are Forms 1040, 1040A,
10408, and 1041. Tentative returns and amended returns are excluded.
The statistics are taken from the returns as filed by the tax
payer, prior to any revisions that may be made as a result of audit
by the Bureau of Internal Revenue. Data for taxable fiduciary re
turns, for individual returns with net income of $25,000 and over,
and for individuals with no net income are completely tabulated from
each such return. Data for individual returns with net income under
$25,000 are estimated on basis of samples.
Data for individual returns, Form 1040A, are tabulated separately
from data for returns, Form 1040, for the first time. Form 1040A,
for 1941, is an optional return which may be used by individuals with
oertain gross income of $3,000 or less. The amount of net income is
not reported, therefore a distribution by net income classes is not
possible. Oros8 income is tabulated both as total income and net income
- 4 and the optional tax, paid in lieu of normal tax and surtax, is entered
as total tax« The amount of personal exemption is determined from the
taxpayer's status as indicated on the return. Earned inoorae credit is
computed as 10 percent of the gross income•
The four tables in this release present information by net income
classes« Composite data for individual and taxable fiduciary returns
are shown in tables 1 and 2, while data for individual returns, ex
clusively, are shown in tables 1-A and 2-A.
Income from the various sources in tables 2 and 2<»A is the net
amount, that is, the excess of gross receipts over deductions, as re
ported in 'the schedules on the returns, and the aggregate tabulated
for eaoh source is the sum of the net amounts of income from that source*
negative amounts reported under "Income11 are transferred in tabulation
to deductions, and included in the amount tabulated for a specified
deduction or in "Other deductions«"
Table 1. - Individual returns and taxable fiduciary returns, with net income, 1941, by taxable and nontaxable returns, by net income classes, and taxable returns by type of tax liability;
also aggregates for taxable and nontaxable individual returns with no net income: Number of returns, net income, personal exemption, credit for dependents,
earned income credit, total tax, normal tax, surtax, alternative tax, defense tax, average total tax, and effective tax rate
(Returns filed in period January ihrough June 1942)
____________________________________________ (Net income classes and money figures, except average total tax, in thousands of dollars)
—
Credit for Earned
Returns with normal tax and surtax 1 1 /
Number
Net
1 er sonai
dependents income
Ibtal
Number
Net
Tax
Net income 8/ classes
of
income
exemption
(individual credit 10 /
tax 2/
of
income
■total
Normal
Defense
returns
returns)
(individual
returns
i/
(Col. 11 +
tax
Surtax
2/
tax $/
§/
returns)
12 + 13)
(1 )
(2 )
(3)
(4)
(6)
(5)
(8 )
(7)
6,099,518
10,714,216
5,963,720
333,310
1,071,422
360,861
_
10,384,633
623,770
241,388
48,318
14,514
2,658
1,551
357
161
51
23,943,978
4,192,036
3,563,744
1,632,764
971,327
320,137
308,500
135,829
110,305
93,292
12,650,787
846,438
308,489
60,371
17,832
3,220
1,844
431
182
57
1,745,034
255,166
96,614
18,654
6,526
948
551
124
49
16
2,344,402
329,833
207,528
47,534
15,550
2,809
1,571
337
136
40
882,151
391,289
678,242
560,403
452,337
174,116
179,352
81,385
69,224
60,746
10,384,291
622,000
204,773
28,661
6,739
915
426
69
18
12
17,416,919
45,986,131
19,853,369
2,455,991
4,021,161
296
13/ 7,556
278
52
17,417,215 14/ 45,978,573
19,853,647
Ibtal returns with net income
13
With no net income, fbrm 1040 ¿/
14
Total taxable returns
(10 )
(9)
Taxable individual and fiduciary
returns:
With net income:
1
Form 1040A (est. ) 12/
Fbrm 1040 and 1041:
2
Under 5 (est.)
S
5 under 10 (est.)
4
. 10 under 2b (est.)
S
2S under 50
6
SO under 100
7
100 under 150
8
150 under 300
9
300 under 500
10
500 under 1,000
11
1,0 00 and over
(1 1 )
(12 )
(15)
1
10
23,942,637
4,177,173
2,924,533
953,570
444,533
109,761
83,297
25,816
11,942
15,312
880,837
386,945
525,246
315,640
203,751
59,982
50,695
17,238
8,937
11,530
289,487
110,014
95,446
34,928
16,973
4,244
3,358
1,024
499
611
591,340
276,891
429j650
280,540
186,613
55,675
47,302
16,214
8,416
10,918
3,890,107
11,247,902
32,688,573
2,460,800
556,586
1,903,558
19C
2,303
-
-
-
-
-
2,456,044
4,021,351
3,892,410
11,247,902
32,688,575
2,460,800
556,586
1,903,558
9
40
149
172
165
63
36
2
3
4
5
6
7
8
9
22
10
- 11
655 12
-
13
655 14
Nontaxable individual returns:
With net income 6/:
Form 1040A(est.; 12/
Fbrm 1040:
16
Under 5 (est.)
3,957,781
6,977,203
5,773,358
3,127,887
697,720
-
-
4,143,718
5,898,820
5,631,015
1,742,513
51,483
-
-
17
8,101,499
12,876,024
11,404,373
4,870,400
749,203
T1
-
-
99,299
13/ 284,023
(15)
(15)
(15)
-
-
-
-
-
-
- 18
8,200,798 14/ 12,592,000
(15)
(15)
(15)
-
-
-
-
-
-
-
25,618,015 14/ 58,570.573
(15)
<l1 5 l
)
(15)
3,892,410
11,247,902
32,688,573
2,460.800
556.586
1.903.558
655
31,257,742
7,326,392
4,770,364
3,890,107
11,247,902
52,688,573
2,460,800
556,586
1,903,558
655 21
(15)
2,303
*
“
IS
Ibtal returns with net income
18
With no net income, Form 1040 2/
19
Total nontaxable returns
20
Grand total (14 ♦ 19
or 21 + 22 )
.
21
22
'
Individual returns and taxable
fiduciary returns with net income
(12 + 17)
Individual returns with no net income
(13 + 18)
25,518,418
58,862,154
99,595
13/ 291,581
(is)
(IS)
'
F'or footnotes, see page U .
-
-
-
- 16
-
-
- 17
—
15
19
20
22
Table 1. - Individual returns and taxable fiduciary returns, with net income, 1941, by taxable and nontaxable returns, by net income classes, and taxable returns by type of tax liability;
also aggregates for taxable and nontaxable individual returns with no net income: Number of returns, net Income, personal exemption, credit for dependents,
earned income credit, total tax, normal tax, surtax, alternative tax, defense tax, average total tax, and effective tax rate — Continued
(Returns filed in period January through June 1942)
_______________________________________ (Net income classes and money figures, except average total ax, in thousands of dollars)
Returns with alternative ÜSTI7---------Effective tax
Number of
Net
Tax
Average
rate, percent
Net income §/ classes
returns
income §/
Total
Alternative
Defense
total tax
(returcs with
tax
(col. 17 + 18)
tax £/
(col. 7 j 2)
net income)
(col. 7 1 3)
(1 )
Taxable individual and fiduciary
returns:
With net income:
form 1040a (est.) 12/
form 1040 and 1041:
Under 5 (est.)
5 under 10 (est.)
10 under 25 (est.)
25 under 50
50 under 100
100 under 150
150 under 300
300 under 500
500 under 1,000
1,0 00 and over
(14)
(is)
(16)
(17)
(18)
(20)
(19)
-
-
•
«
-
59
3.37
342
1,770
36,615
19,657
7,775
1,743
1,125
288
143
41
1,341
14,864
639,211
679,194
526,795
210,376
225,204
110,013
98,363
77,980
1,314
4,344
152,997
244,763
248,586
114,133
128,657
64,147
60,288
49,216
1,314
4,344
152,995
244,709
248,508
114,114
128,574
64,060
60,256
49,085
_
3
54
79
19
83
87
32
131
85
627
2,810
11,598
31,166
65,506
115,636
227,969
429,965
1,191,098
3.68
9.33
19.03
34.32
46.57
54.39
58.14
59.92
62.76
65.11
69,499
2,583,342
1,068,446
1,067,959
487
223
8.46
12
276
13/7,558
2,308
2,303
-
7,782
-
13
Total taxable returns
69,795
14/2,575,784
1,070,750
1,070,263
487
223
-
14
Nontaxable individual returns:
With net income 6/:
15
form 1040A (est.) 12/
Form 1040:
16
Under 5 (est.)
-
-,
-
_
-
-
-
-
-
-
-
16
17
-
-
-
-
-
-
-
17
-
1
2
S
4
5
6
7
8
9
10
11
12
13
14
18
Total returns with net income
With no net income, form 1040 £/
Total returns with net income
With no net income, form 1040 7/
19
Total nontaxable returns
20
Grand total (14 + 19
or 21 ♦ 22 )
1
2
3
4
5
6
7
8
9
10
11
15
-
-
-
-
-
-
-
-
-
-
-
-
69,795
14/2,575,784
1,070,750
1,070,263
487
(16)
-
69,499
2,583,542
1,068,446
1,067,959
487
152
6.61
21
296
12/7,558
2,303
2,303
M
22
18
19
20
2 1 Individual returns and taxable
fiduciary returns with net income
(12 ♦ 17)
22 Individual returns with no net income
(13 + 18)
for footnotes, see page 1 1 ,
(16)
Tfcble 1 -A.
"J* inco»e, not including fiduciary returns, 1941, by taxable and nontaxable returns, by net incone classes, and taxable returns by type of tax liability*
also aggregates for taxable and nontaxable individual returns with no net incomes Number of returns, net income, personal exemption, credit for dependents, earnedincome credit
^
tax, normal tax, surtax, alternative tax, defense tax average total tax. and effective tax rate
’
(Returns filed in period January through June 1942)
Net income classes
(1)
Number
of
returns
(2 )
Net
i coma i/
(5)
Personal
exemp
tion 9/
Earned
Credit for income
dependents credit 10 /
(5)
(4)
(6 )
Tbtal
tax 2/
(7)
Net
income
(8 )
(9)
Taxable individual returns)
With net incomes
X
Form 104QA (est.) 12/
fbrm 1040:
Under 5 (est.)
5 under 10 (est.)
S
4
10 under 25 (est.)
5
25 under 50
6
50 under 100
7
100 under 150
8
150 under 500
9
500 under 500
10
500 under 1,000
U
1,0 0 0 and over
6,099,518
10,714,216
5,965,720
555,510
1,071,422
560,861
10,514,559
617,512
257,406
47,016
14,051
2,555
1,477
559
146
44
25,858,505
4,146,980
5,505,428
1,587,972
959,924
507,890
295,748
129,246
98,985
81,650
12,651,260
844,071
507,074
59,914
17,670
5,181
1,821
425
178
55
1,745,054
255,166
96,614
18,654
5,526
948
551
124
49
16
2,544,402
529,855
207,528
47,554
15,550
2,809
1,571
557
156
40
875,261
585,140
664,801
544,622
458,551
168,109
171,887
77,992
65,860
54,526
10,514,009
615,600
201,488
27,940
6,519
874
408
12
17,554,201
45,662,524
19,829,568
2,455,991
4,021,161
5,805,589
2
IS
14
Total returns with net income
With no net income, fbrm 1040 £/
Total taxable returns
Nontaxable individual returns:
With net income 6/:
15
fbrm 10401 (est.) 12/
fbrm 1040:
16
Under 5 (est.)
17
18
Total returns with net income
With no net income, fbrm 1040 7/
19
Total nontaxable returns
20
Grand total (14 ♦ 19
or 2 1 ♦ 22 )
21
22
Individual returns with net income
(12 ♦ 17)
Individual returns with no net income
(15 ♦ 18)
fbr footnotes, see page II
Returns with normal tax and surtax Jl/
Tbtal
(col. 1 1 ♦
Normal
Surtax
12 ♦ 15)
tax
Number
of
returns
(10 )
di)
Defense
tax 4 /
(12 )
(15)
1
8
25,857,000
4,152,591
2,876,199
928,914
429,810
105,050
79,826
24,742
10,420
15,161
875,961
580,990
514,944
506,975
196,885
57,598
48,592
16,525
7,426
9,944
286,922
108,559
95,591
55,960
16,594
4,057
5,221
981
414
526
587,055
272,595
421,225
272,870
180,555
55,292
45,550
15,542
7,012
9,418
11,166,927
52,457,715
2,415,656
548,425
1,864,695
66
15
296
15/7,558
278
52
190
2,505
-
17,554,497
14/45,654,766
19,829,646
2,456,044
4,021,551
5,807,895
11,166,927
-
V-
-
52,457,715
2,415,656
548,425
-
-
-
-
-
-
-
6
2
56
128
144
154
48
5
4
22
10
518
-
1,864,695
S
6
7
8
9
11
12
15
518
14
5,957,781
6,977,205
5,775,558
5,127,887
697,720
4,145,718
5,898,820
5,651,015
1,742,515
51,485
8,101,499
12,876,024
11,404,575
4,870,401
749,205
99,299
15/284,025
(15)
(15)
(15)
-
-
-
-
8,200,798 14/12,592,000
(15)
(15)
(15)
-
-
-
•
25,555,295 14/58,246,766
(IS)
(15)
(IS)
5,807,895
11,166,927
52,457,715
2,415,656
548,425
1,864,695
518
20
21
22
15
-
'
-
_
-
-
-
16
_
17
-
18
_
19
25,455,700
58,558,547
51,255,740
7,526,592
4,770,564
5,805,589
11,166,927
52,457,715
2,415,656
548,425
1,864,695
518
99,595
15/291,581
(15)
(15)
(IS)
2,505
-
-
-
-
-
-
liable 1-A. - Individual returns with net income, not including fiduciary returns, 1941, by taxable and nontaxable returns, by net income classes, and taxable returns by type of tax liability}
also aggregates for taxable and nontaxable individual returns with no net income: Number of returns, net income, personal exemption, credit for dependents, earned income credit,
tax, normal tax, surtax, alternative tax, defense tax, average total tax, and effective tax rate — Continued
(Returns filed in period January through June 1942)
(Net income classes and money figures, except average total tax, in thousands of dollars)
Returns with alternative tax 2/
Net income classes
Number of
returns
Net income
Total
(col. 17+18)
(1 )
1
2
S
4
5
6
7
8
9
10
11
12
Taxable individual returns:
With net income:
Fbrm 104QA (est.) 12 /
Form 1040:
Under 5 (est.)
5 under 10 (est.)
10 under 26 (est.)
2 S under 50
50 under 100
100 under ISO
150 under 300
300 under 500
500 \inder 1,000
1,0 0 0 and over
■total returns with net income
(14)
(16)
(15)
Tax
Alternative
tax
Defense
tax £/
(18)
(17)
1,305
14,389
627,229
659,058
510,113
202,840
213,922
104,504
88,565
68,468
1,300
4,150
149,857
23?,648
241,648
110,711
123,295
61,468
56,434
44,582
1,300
4,150
149,855
237,605
241,587
110,698
123,237
61,381
56,402
44,540
67,756
2,490,395
1,031,092
1,030,754
Effective tax
rate, percent
(returns with
net income)
(col. 7 ; 3)
(19)
(20)
1
59
3.37
43
61
14
58
87
52
42
85
624
2,800
11,584
31,210
65,848
116,376
230,064
437,399
1,239,220
5.67
9.29
18.98
34.30
46.66
54.80
58.52
60.34
64.52
66.80
10
11
338
220
8.33
12
330
1,712
35,918
19,076
7,532
1,679
1,069
273
131
36
Average
total tax
(col. 7 * 2 )
2
2
3
4
5
6
7
8
9
296
12/7,558
2,303
2,303
-
7,782
-
13
14
Total taxable returns
68,052
¿4/2,482,837
1,033,396
1,053,057
338
220
-
14
IS
Nontaxable individual returns:
Aith net income 6/»
Form 104QA (est.) 12/
Form 1040:
Under 5 (est.)
-
-
-
-
-
-
13
16
17
18
With no net income, Farm 1040 £/
Total returns with net income
With no net income, Form 1040 2/
19
lbtal nontaxable returns
20
Grand total (14 + 19
or 2 1 + 22 )
21
22
Individual returns with net income
(12 + 17)
Individual returns with no net income
(13 + 18)
Fbr footnotes, see page 1 1
-
-
15
-
16
-
-
-
-
-
-
17
-
-
-
-
-
-
-
18
-
-
-
-
-
-
19
(16)
-
20
150
6.50
21
68,052
14/2,482,837
1,033,396
1,033,057
338
67,756
2,490,595
1,031,092
1,030,754
338
296
12/7,558
2,303
2,303
(16)
22
Net income 8/ classes
Table 2,. - Individual returns and taxable fiduciary returns, with net income, 1941, by net Income classes; also aggregate for individual returns with
no net incomes Number of returns, sources of income and deductions, and net income
(Returns filed in period January through June 1942)
(Net income classes and money figures in thousands of dollars)__________
Sources of income
Salaries
Interest
Dividends
Dividends
___
' Capital gain 72/
and other from dom Bank
Government
on share
Annui
Short-term 23/
Net gain
compensa estic and deposits,
obligations
accounts
ties
Net short Net short Current Net
from sales
tion (in foreign
Number of
Partially Taxable in Federal
notes,
Rents and (indivi term capi term capi year
long of prop
corpora mortgages, tax-exempt (subject savings
dividual
returns
royalties dual
tal gain
tal loss net
term
erty other Business
tions 17/ corpora
returns)
(subject
to nor and loan
returns) (included
of preced short capital than capi profit
tion bonds to surtax mal tax associations
22/
in total
ing tax
term
gain
tal assets 28/
only) 18/ and sur (subject to
income and able year capital 26/
27/
tax) 19/ surtax only)
net income) deducted
gain
20/
24/
15!
Individual returns and taxable fiduciary
returns with net incomes
Foni 1040A (est.) 12/
Form 1040 and 1041:
Under 5 (est.)
5 under 10 (est.)
10 under 25 (est.)
25 under 50
50 under 100
100 under 150
150 under 300
500 under 500
500 under 1,000
1,0 0 0 and over
Total returns with net income
Individual returns with no net income 7/
Grand total
(36)
(36)
(36)
(36)
14,528,351 25,624,691 1,260,915
623,770 2,452,130
473,879
241,388 1,723,855
626,362
48,318
435,516
649,935
14,514
520,575
328,469
2,658
79,992
134,016
1,551
57,442
138,456
357
14,830
64,468
161
4,974
63,741
51
1,242
60,848
10,057,299 17,440,340
577,958
125,177
117,174
49,894
23,808
7,292
6,574
1,801
1,834
674
41,213
13,996
17,138
7,792
4,382
1,570
1,438
378
12 1
15,818
1,612
1,461
644
198
90
93
28
14
56
8
25,518,418 48,369,987
3,586,670
912,185
88,084
19,966
57,477
86,129
19,957
731
1,350
25,618,013 48,427,464
3,672,799
932,142
88,815
21,315
99,595
(36)
5,582 1,451,877
Individual returns and taxable fiduciary
returns with net incomes
Form 104QA (est.) 12/
Form 1040 and 1041s
Under 5 (est.)
5 under 10 (est.)
10 under 25 (est.)
25 under 50
50 under 100
100 under 150
150 under 300
300 under 500
500 under 1,000
1,0 0 0 and over
Total returns with net income
Individual returns with no net income 7/
Grand total
For footnotes, see p. 11.
Income from Other
fiduciaries income 31/
30/
-
145,506
Total
income
251,079 17,691,420
173,519
117,845
88,995
35,874
42,835
24,098
23,260
22,770
197,938
58,727
53,256
21,328
10,919
2,218
2,295
489
636
46
795,802
598,952 64,534,177
12 1,10 0
14,414
810,217
33,685,163
4,841,527
4,137,022
1,906,085
1,131,006
372,857
363,500
158,333
131,385
115,881
-
-
-
36,114
9,624
7,007
2,592
1,358
397
206
108
51,033
15,959
17,696
9,518
6,387
2,178
2,965
1,219
767
2,613
202
42
42,430
24,565
27,156
14,598
9,291
2,623
2,920
1,272
326
1,579
150,131
126,758
2,145
4,487
5,597 1,483,355
152,276
131,245
Net long- Net loss
term
from sales
capital
of prop- Business Partnership
loss
erty other loss 28/ loss 29/
22/ 26/
than capital assets
27/
302,989
130,179
150,734
72,943
38,320
9,970
9,667
3,507
1,962
3,316
_
(36)
31,478
15
Sources of Income - Coiltinued
Net income 8/ classes
(36)
452 1,063,978 120,083
161,227
1,2 2 0
13,040
1,197
130,021
9,224
2,322
53,108
4,019
355
24,510
2,300
15
7,551
521
10
6,938
492
10
2,449
262
2,204
64
(37)
92
127
56,998
32,375
44,340
34,578
35,373
19,179
35,132
26,899
24j598
25,075
29,842 3,920,341
11,851
927,513
9,410
662j310
2,328
218,294
1,340
98,769
28'972
245
246
25,316
23
7(866
4
3,144
30
1,720
587,000
423,117
540^618
293*884
181,722
52^899
43,314
13,461
6^466
1,614
4,519 131,277 354,547
55,318 5,894,245
2,144,094
8
2
23
4,510
4,329
4,542 135,787 338,876
2,410
18,852
12,428
57,728 5,913,097
2,156,522
TÜKÏ
Other
deductions
tions
35/
35/
Amount
distribto bene- Net income 1/
ficiaries
(fiduciary returns)
_
6
2
715,936
90,559
74,810
38,254
27,399
11,397
12,655
5,957
6,506
6,950
728,539
105,544
73,559
27,360
15,023
4,957
4,350
1,424
904
766
1,225,786
166,068
139,113
68,106
42,380
14,010
13,227
6,194
4,698
3,964
723,587
57,649 110,335
27,335
990,424
962,428
1,683,545
260,428
200,481
35,194
103,268
24,124
5,287
26,929
30,058
603,160 64,794,606
924,068
92,843
213,603
51,459
995,710 989,357
1,713,603
4,228
_
42,670
25,244
28,752
15,197
9,843
3,254
3,091
1,310
334
1,581
Deductions
Losses
Bad
Contribu- Interest
from fire, debts
tions 32/ paid
Taxes paid storm,
33/
(individ- 33/
33/
etc. 33/ (Indiviual re34/ (indi- dual
turns)
vidual
returns]
returns)
_
9,173
5,493
5,994
2,857
1,654
753
1,156
246
240
681
1,596
599
552
632
172
38
Partnership
profit 29/
17,691,420
38,569 54,046 497,045
5,962 19,557 74',615
4,430 19,470 53,337
1,286 10,284 21,884
795
5,134 12,793
178
1,791
3,855
159
3,207
5,147
26
1,0 02
2,074
345
937 1,663
98
326
1,961
3,659,230
623,559
546,150
255,085
151,242
49,485
52,738
21,757
17,990
20,038
183,135
25^931
27,127
18,235
8,436
3,256
2,261
'747
3,090
2,550
51,848 115,752 674,372
5,397,275
274,748
58,862,154
-
15/291,581
12,520
57,439
56,710
552,010
64,369 173,192 731,082
5,949,285
29,842,798
4j192^056
3,563,744
1^632^764
971,327
520j137
308j500
135^829
110j305
93,292
274,748 1^58,570,573
Table 2-*. - Individuai returns with net income, not including fiduciary returns, 1941, by net income classes) also aggregate for individual
returns with no net incomes Number of returns, sources of income and deductions, and net income
(Returns filed in period January through June 1942)
(Net income classes and money figures in thousand« nr
Net Income classes
Returns with net incomes
Form 1040A (est. ) 12/
Form 1040 and 1041s
Under S (est.)
5 under 10 (est.)
10 under 25 (est.)
25 under 50
50 under 100
100 under 150
150 under 300
' 300 under 500
500 under 1,000
1,0 0 0 and over
Total returns with net income
Individual returns with no net income 7/
■
Grand total
Number of
returns
Salaries
and other
compensa
tion
10,057,299 17,440,340
Dividends
from dom
estic and
foreign
corpora
tions 17/
Bank
deposits,
notes,
mortgages,
corpora
tion bonds
(36)
(36)
(36)
(36)
14,458,057 25,624,691 1,102,219
617,312 2,452,150
426,449
237,406 1,723,835
566,896
47,016
649,935
390,650
14,051
320,575
502,303
2,553
79,992
124,130
1,477
57,442
127,555
339
14,830
59,544
146
4,974
56,094
44
1,242
53,291
514,083
116,728
109,006
46,140
22,369
6,669
6,136
1,641
1,763
663
31,653
12,518
15,386
7,156
4,080
1,468
1,363
373
103
54
15,176
1,509
1,368
584
190
82
25,435,700 48,369,987
3,209,132
825,198
74,155
19,042
57,477
86,129
19,957
731
1,350
25,535,295 48,427,464
5,295,261
845,155
99,595
H
1
Net income classes
Returns with net Incomes
Form 1040A (est.) 12/
Form 1040 and 1041s
Under 5 (est.)
5 under 10 (est.)
10 under 25 (est.)
25 under 50
50 under 100
100 under 150
150 under 300
300 under 500
500 under 1,000
1,0 0 0 and over
Total returns with net income
Individuiti returns with no net income 7/
Grand total
For footnotes, see p. 11,
Government
ODJ.1R&cions
Partially Taxable
tax-exempt (subject
(subject to nor
to surtax mal tax
only) 18/ and sur
tax) 19/
Income from Other
fiduciaries income 51/
30/
Total
income
Net long
term
capital
loss
22/ 26/
86
27
11
8
Dividends
Capital gain 22/
on share
Short-term 2'¿/
accounts
Net short Net short Current
in Federal Rents and Annui term capi term capi year
savings
royalties ties 21 / tal gain
tal loss
net
and loan
(included of preced short
associations
in total
ing tax term
(subject to
income and able year capital
surtax only)
net income) deducted gain
20/
24/
25/
(36)
(36)
(36)
316 1,030,796
1,199
153,509
1,182
122,299
2,321
49,020
341
22,649
15
6,829
9
6,466
10
2,228
2,204
(37)
92
120,083
13,040
9,224
4,019
2,300
521
492
262
64
127
36,239
22,504
24,290
12,582
7,509
2,331
2,801
1,088
322
561
5,394 1,396,092 150,131
110,228
15
31,478
2,145
Deductions
Net loss
from sales
of prop Business Partnership Contribu Interest
erty other loss 28/ loss 29/
tions 32/ paid 33/
than capi
tal assets
27/
4,487
Taxes
paid 33/
155
644
1,509
584
478
630
169
38
5
36,394
23,148
25,799
15,166
7,987
2,961
2,970
1,125
327
563
Net
long
term
capital
gain
26/
Net gain
from sales
of prop
Business
erty other profit 28/
than capi
tal assets
27/
42,606
27,568
37,739
28,721
29,837
15,968
30,216
24,332
17,382
19,264
28,258
11,321
9,042
2,205
1,218
218
243
19
4
30
3,912,197
924,362
658,881
216,225
97,376
28,633
24,495
7,866
3,067
1,720
4,214 114,442 273,633
52,558
5,874,821 2,126,707
2
23
4,510
Losses
from fire Bad
storm,
debts
etc.
33/
33/ 34/
4,329
2,410
17,691,420
194,391
57,343
52,037
20,414
10,434
2,003
2,146
475
636
46
591,004
33,377,976
4,760,437
4,038,668
1,835,926
1,087,840
355,912
545,152
150,251
116,350
101.482
63,861,394
298,594
128,113
148,690
71,173
37,803
9,661
9,496
3,488
1,959
3.278
712,254
50,802
15,844
17,530
9,426
6,286
2,171
2,965
1,219
767
202
2.613
42
56,945 109,623
27,053
14,414
4,228
260,428
200,481
35,194
103,268
24,124
5,287
26,929
30,058
595,232 64,121,822
912,735
92,137
212,890
51,177
995,710
979,695
1,691,416
797,727
18,852
Other Total
Net income 1/
deduc deduc
tions tions 55/
35/
251,079 17,691,420
141,367
119,132
171,383
115,608
88.153
35.154
42,389
24,097
23,260
22.770
783,313
35,762
9,489
6,873
2,517
1,350
396
206
108
9,050
5,432
5,908
2,851
1,650
751
1,155
246
6
2
715,936 724,530
90,559 104,582
74,810
71,830
38,254
25,988
27,399
14,405
11,397
4,642
12,655
4,144
5,957
1,205
6,506
880
6.950
759
990,424 952,765
1,213,547
163,388
136,243
66.398
41.398
13,590
12,789
5,882
4,174
3.947
1,661,357
Partner
ship prof
it 29/
38,569 54,046 480,014
5,962 19,557 70,732
4,430 19,470 49,455
1,286 10,284 19,778
795
5,134 11,696
178
1,791
3,445
159
3,207 4,608
26 1,0 0 2
1,873
937 1,588
545
3,620,850
613,457
535,240
247,954
147,916
48,022
51,585
21,005
17,365
29,757,125
4,146,980
3,503,428
1,587,972
939,924
307,890
293,748
129,246
98,985
51,848 115,752 645,026
5,323,047
58,538,347
552,010
13/291,581
12,520
57,439
56,710
64,369 173,192 701,736
583,899
421,124
536,098
290,347
178,505
51,900
43,294
13,461
6,466
1,614
12,428
-
11-
Footnotes
3/
income Is the sum of (1) net income on Form 1040,
(2) gross income on Form 1040A, and (3) on tables in
cluding fiduciary returns, Form 1041, the net income
taxable to the fiduciary,
or any political subdivision thereof, or the District of
Columbia, issued on or after March 1, 1941, on a discount
basis and payable without interest at a fixed maturity
date not exceeding one year from date of issue. The t-a'm lated amounts include each participant's share of net oax»
ital gain or loss to be taken Into account from partner
ships and common trust funds.
2/ Aggregate of normal tax, surtax, alternative tax, defense
tax, and the optional tax reported on Form 1040A.
3/ Alternative tax is reported on (1 ) returns with net long
term capital gain when such alternative tax computed on
ordinary net income is less than the combined normal tax
and surtax computed on net income including net long-term
capital gain, and (2 ) returns with net long-term capital
loss when such alternative tax computed on ordinary net
income is greater than the combined normal tax and surtax
computed on net income after deducting net long-term capi
tal loss.
.
4/ Defense tax is ten percent of the total income tax before
deducting any credit, but not in excess of ten percent of
the amount by which the net income exceeds such income tax.
Reported only on returns with taxable year beginning prior
to January 1, 1941.
5/
Alternative tax is reported on 296 individual returns with
no net income due to net long-term capital loss. On such
returns the combined normal tax and surtax computed on
ordinary net income exceeds SOjf of the net long-term capi
tal loss.
6/
Personal exemption, credit for dependents, and earned incane credit exceed net income. A negligible number of
nontaxable individual returns in net income classes of
$5,000 and over are tabulated with taxable returns.
1/
Total deductions equal or exceed total income.
0/
For taxable fiduciary returns, the net income used for classi
fication and tabulation is the net income taxable to the
fiduciary.
9/ For 1941, the personal exemption allowed the head of a family
and a married person living with husband or wife for the
entire year, was reduced from $2,000 to $1,500, and that
of a.single person, a married person not living with husband
or wife, and an estate was reduced from $800 to $750. A
trust is allowed, in lieu of the personal exemption, a
credit of $100 against net income. The personal exemption
tabulated for individual returns, Form 1040A, is determi
ned from the taxpayer's status indicated on the return.
20/
On Form 1040A, earned income is computed as 10 percent of the
gross income.
U/
Returns with normal tax and
long-term capital gain or
long-term capital gain or
tax and surtax instead of
surtax are (1) returns without net
loss, and (2 ) returns with net
loss, which are subject to normal
alternative tax*
12/ Form 1040A, the optional return which may be filed if gross
income from certain sources is not more than $3 ,000, does
not provide for the amount of net income. Gross income
is tabulated both as total income and as net income*
IS [K t£ l£
13/ Deficit.
2S/
Net income less deficit.
Not available.
Excludes dividends received through partnerships and fiduci
aries, and dividends on share accounts in Federal savings
and loan associations.
Partially tax-exempt interest on Government obligations is in
terest on United States savings bonds and Treasury bonds
owned in excess of $5,000, and obligations of instrumental
ities of the United States other than those issued under the
Federal Farm Loan Act or that act as amended, all of which
were issued prior to March 1, 1941; such interest indud-s
that received through partnerships and fiduciaries.
19/ Taxable interest on Government obligations is interest on
Treasury notes issued on or after December 1, 1940 and on
obligations of the United States or any agency or instru
mentality thereof, issued on or after March 1, 1941.
20/ Dividends on share accounts includes such dividends received
through partnerships and fiduciaries. Fbr 1940, these divi
dends were reported in "Other income."
Fbr prior years in
22/ Capital gain or loss is the net gain or loss from sales or
exchanges of capital assets, i.e., property held by the tax
payer (whether or not connected with his trade or business),
but not (1 ) stock in trade or other property which would prop
erly be included in inventory if on hand at the dose of the
taxable year, (2 ) property held primarily for sale to customers
in the ordinary course of trade or business, (5 ) property used
in trade or business of a character which is subject to the
allowance for depreciation, or (4) an obligation of the United
States or any possession thereof, or of a State or Territory
"Short-tem" applies to capital assets held 18 months or less.
Net short-term capital loss of preceding taxable year deducted
is the amount deducted under the net short-term loss carry
over provision of the Internal Revenue Code. The amount
carried over cannot exceed the net income for the year in
which the loss is sustained, and can be deducted only to the
extent of the current year net short-term capital gain.
22/
Current year net short-tem capital gain before deducting net
short-term capital loss of preceding taxable year. This
amount would have been reported for computation of net income if the net short-term capital loss of preceding tax
able year had not been deductible.
26/
"Long-term" applies to capital assets held over 18 months.
Losses, from worthless stocks and bonds which are capital
assets, are deducted in computing "Net long-term capital
gain" and "Net long-term capital loss."
27/ Net gain or loss from the sales of (1) property used in trade
or business of a character which is subject to the allow
ance for depreciation, and (2) obligations of the United
States or any of its possessions, a State or Territory or
any political subdivision thereof, or the District of Colum
bia, issued on or after March 1, 1941, on a discount basis
and payable without interest at a fixed maturity date not
exceeding one year frai date of issue.
2§/ Current year business profit or loss. Net operating loss deduc
tion i® reported in "Other deductions."
2£/ Partnership profit or loss, as reported on the <ni-mn.
turn of the partner, excludes (1 ) partially tax-exempt in
terest on Government obligations issued prior to March 1,
i^41, and (2 ) net gain or loss from sales or exchanges of
capital assets, each of which is reported in its respective
source of income or deduction, and (3) dividends on share
accounts in federal savings and loan associations which
are reported in the schedule for interest on Government
obligations but are tabulated separately. Charitable contri
butions and net operating loss deduction, not being deduc
tible in computing partnership profit or loss, are reported
on the partner's income tax return in "Contributions" and
"Other deductions" respectively.
30/ Inccme from fiduciaries, as reported on the return of the
beneficiary, excludes (1 ) partially tax-exempt interest
on Government obligations issued prior to March 1, 1941,
and (2 ) net gain or loss from sales or exchanges of capital
assets received from common trust funds, each of which is
reported in its respective source of income or deduction,
(3) dividends on share accounts in Federal savings and loan
associations which are reported in the schedule for interest
on Government obligations but which are tabulated separately.
The net operating loss deduction, not being deductible in
computing income from common trust funds, is reported on the
beneficiary's return in "Other deductions," however, the net
operating loss deduction is deducted from all other fiduci
ary income reported on the beneficiary's return.
23/
Not computed.
21/ Tabulated separately for the first time.
cluded in "Other income."
22/
Includes dividends, interest, rents, annuities and royalties,
reported on Form 1040A. Unlike 1940, excludes annuities
and dividends on share accounts in Federal savings and
loan associations reported on Form 1040, both of which are
tabulated separately*
32/ Include each partner's share of charitable contributions of
partnerships.
52/ Excludes amount reported in schedule for (1) income from rents
and royalties, and (2 ) profit or loss from business,
2i/ Losses from fire, storm, shipwreck, or other casualty, or
from theft, not compensated for by insurance or other
wise.
5§/ Include net operating loss deduction. In table 2 amount
includes losses from fire, storm, etc., and bad debts
reported on fiduciary returns.
36/ Included in "Other inccme."
37/ Less than $500.
2.
a period in 1 9 3 4 ,when he served with the National
Recovery A dm inistration, and fo r the g re a te r p art of
the past year during which time he has been w ith ‘the
Special War P o lic ie s Unit of the Department of J u s t i c e .
He is married and has two ch ild ren .'
Mr. Luxford has been with the Treasury since 1935,
except fo r a b rie f period in 1939 and 1940 when he was
engaged in the p rivate p ra c tic e of the law in S t. Paul,
Minnesota.
Mr• Luxford received h is undergraduate
train in g ^ S ^ i ^ U n i v e r s i t ^ ^ l T w a C ity , Iowa;
Creighton U n iversity, Omaha, Nebraska, and the C atholic
U niversity of America in Washington, D. C ., receiv in g
a *S *
received
d e g ^ ^ In tiS -fe ^ io n e d
Idl a jJ S S f c .
/
school.
He also
S'
from the 2aw »chool of
C atholic U n iv ersity , having graduated in 1935.
He
received a fo u r-y ear scholarship a t the C atholic U niversity
from the John K. Mullen of Denver Foundation.x
i s married and has one ch ild .
Tmrfrrrl
S ecretary Morgenthau today announced the appoint
ment of Thomas J . Lynch of Toledo, OhioJ Eugene F . Roth
of New York C ity , and Ansel F . Luxford of S t. Paul,
Minnesota, as A ssistan ts General Counsel in the Treasury
Department.
Mr. Lynch attended the U niversity of Michigan
School of Engineering and School of Law, receiv in g a
ifefe- degree^rom the l a t t e r 'i n 1925.
He comes to
the Treasury from the War Production Board, where he
was an A ssistant General Counsel.
His Government
experience includes service in the A nti-Trust Division
of the Department of Ju s tic e and in the S e cu ritie s and
Exchange Commission.
From tne time of h is graduation
from Law School u n til he entered the Government service
in 1934^Mr. Lynch was associated with the Toledo, Ohio,
law firm of M arshall, Melho.rn, Morlar and M artin.
He
is married and has three ch ild ren .
Mr. Roth i s a graduate of Columbia Guttege and of
Columbia Law School, having graduated from the l a t t e r in
1926.
Since graduation he has been engaged in the n riv at
p ra c tic e of
* '
f
)V;
\ J \ M A
r
J
law in feasSi±y=a$‘ New York/\ except fo r
TREASURY DEPARTMENT
Washington
FOR IMMKDIATE RELEASE,
T u e s d a y , M a r c h 23« 1 9 4 5 *
Press
No,
Service
35-83
S e c r e t a r y M o r g e n t h a u t o d a y announced' t h e a p p o i n t m e n t
Thomas
City;
J,
l y n c h of Toledo,
and Ansel
F,
luxford
ants General Counsel
Ohio;
of
E u g e n e F, R o t h of l e w Y o r k
of S t ,
Paul,
Minnesota,
as A s s i s t
in t h e T r e a s u r y D e p a r t m e n t ,
Mr* L y n c h a t t e n d e d t h e U n i v e r s i t y o f M i c h i g a n S c h o o l of
E n g i n e e r i n g a n d S c h o o l of Law, r e c e i v i n g a d e g r e e ' o f d o c t o r of
j u r i s p r u d e n c e f r o m t h e l a t t e r in 1 9 2 5 «
H e c o m e s to t h e T r e a s
u r y f r o m t h e W a r P r o d u c t i o n Board, w h e r e h e w a s a n A s s i s t a n t
General Counsel,
His G o v e r n m e n t e x p e r i e n c e includes s e rvice
in t h e A n t i - T r u s t D i v i s i o n of t h e D e p a r t m e n t of J u s t i c e a n d in
the Securities and Exchange Commission,
F r o m t h e t i m e of h i s
g r a d u a t i o n f r o m La w School until he entered the G o v e r n m e n t
s e r v i c e in 1934^ Mr, L y n c h w a s a s s o c i a t e d w i t h t h e T o l e d o ,
Ohio, l a w f i r m of Marshall, Melhorn,
m a r r i e d a n d has t h r e e children.
M o r l a r and Martin,
He is
Mr, R o t h is a g r a d u a t e of C o l u m b i a U n i v e r s i t y a nd of
C o l u m b i a L a w School, h a v i n g g r a d u a t e d f r o m t h e l a t t e r in 1926.
S i n c e g r a d u a t i o n he has been engaged in t h e p r i v a t e p r a c t i c e
of l aw in H e w Y o r k City, except f o r a p e r i o d in 1934, w h e n he
s e r v e d w i t h t he n a t i o n a l R e c o v e r y Administration', an d for the
g r e a t e r part of the past year, d u r i n g w h i c h tine he has been
w i t h t he S p e c i a l W a r Po l i c i e s U n i t of the D e p a r t m e n t of Justice*
He i s _m a r r i e d a n d has two children,
Mr, L u xford has been w i t h the T r e a s u r y since 1935» except
for a b r ief p e r i o d in 1 939 and 1 9 4 0 w h e n he was engaged in the
p r i v a t e p r a c t i c e of t he l a w in St. Paul, Minnesota.
Mr. Luxford
r e c e i v e d his u n d e r g r a d u a t e t r a i n i n g at the U n i v e r s i t y of Iowa
in Iowa City, Iowa; C r e i g h t o n University, Omaha, Nebraska, and
the C a t h o l i c U n i v e r s i t y of A m e r i c a in Washington, D* C., r e
c e i v i n g a degree of b a c h e l o r of s c i e n c e f r o m t h e last m e n t i o n e d
school.
He a lso r e c e i v e d a b a c h e l o r 1of laws degree f r o m the
l a w school of C a t h o l i c U niversity, h a v i n g g r a d u a t e d in 1935.
He r e c e i v e d a f o u r - y e a r s c h o l a r s h i p at t he C a t h o l i c U n i v e r s i t y
f r o m t he John K . M u l l e n of D e n v e r F oundation.
He is m a r r i e d
an$ has one child.
-oOo-
FOR IMMEDIATE RELEASE,
March 23, 19li3«______
*3 b
The 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, 19h2, provided for in the Inter-American
Coffee Agreement, proclaimed by the President on April 1$, l?Ul, 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/
f
2,172,359,753
735,81(0,277
1(6,718,031
18,692,1(51
25,752,9U7
35,OUl,235
11(0,776,585
12U,978,598
61(,236,136
U,278,U67
1 U , 292,661
1(5,818,819
5,839,588
90,021,1(90
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 Agree- )
ment
)
1/
Quotas revised as of March
75,969,017
19k3 .
:
:
Authorized for entry
:
for consumption
• As of (bate) :
•
(Pounds)
March 13, 19k3
H
n
n
H
tt
ti
n
M
it
it
it
it
263,70l(,502
21(2,00U,816
12,076,31(7
8,368,539
9,513,19k
12,350,1(91
1(2,671,971
36,737,893
1(6,1(58,1(65
l,3l(l(,991
25,82l(,370
5,306,728
159
29,350,632
it
22,921,1(71
h
f
!§g i
l | |mm ¡¡|| gg I¡jjf
TREASURY DEPARTMENT
Washington
POR IMMEDIATE RELEASE,
Wednesday, March 24. 1943.
Press Service
No. 35—84
The Bureau of Customs announced today preliminary figures showing the
quantities of coffee authorized for entry for consumption under the quotas
for the twelve months commencing October 1, 1942, provided for in the InterAmerican 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) 1J
2, 172,359,753
735,840,277
46,718,031
18,692,451
25,752,947
35,041,235
140,776,585
124,978,598
64,236,136
4,278,467
111,292,661
45,818,819
5,839,588
90,021»490
Non-signatoiy Countries;
)
British Empire, except
)
Aden and Canada
)
Kingdom of the Netherlands)
and its possessions
)
Aden, Yemen, and Saudi
)
Arabia
)
Other countries not signa-0
tories of the Inter)
American Coffee Agree- )
ment
75,969,017
- -r;
1/
Quotas revised as of March 5, 1943.
<-?o0o-
Authorized for entry
for consumption
As of (Date)
J (Pounds)
March 13, 1943
it
263,704,502
242,004,816
12,076,347
8,368,539
9,513,794
12,350,491
42,671,971
36,737,893
46,458,465
1,344,991
25,824,370
5,306,728
159
29,350,632
tf
22,921,471
if
tf
ti
n
n
if
it
if
if
ti
it
h
- 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 H©serve Bank or Branch,
-
2
-
Reserve Ranks 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
March 31# 1943________ .
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
r
TREASURY DEPARTMENT
Washington
.'een
EOR RELEASE, MORNING NEWSPAPERS,
Friday, March 26, 19A3________ .
sîllft)iH!
bidding'
The Secretary of the treasury, hy this public notice, invites tenders
for S 800,000,000
or thereabouts, of
91
;endWll-i
-day Treasury bills, to be issued
palile.
on a discount basis under competitive bidding.
The bills of this series will
.siine
be dated
March ßl, 194-3
_, and will mature
June 30 » 1943
Isanti
when the face amount will be payable without interest.
They will be issued in
Mers i
bearer form only, and in denominations of ^1,000, $5,000, $10,000, $100,000,
I s up tc
j In d a y ,
$500,000, and Si,000,000 (maturity value).
tai? I
i ¡mil t i p
Tenders will be received at Federal Reserve Ranks and Branches up to the don the
War
closing hour, two o*clock p, m,, Eastern S&ssfc&iSGfc time, Monday, March 29 s 1943
Tenders will not be received at the Treasury Department, Washington,
! 99.925.
be¡y.o
ST6lO’)6S
Each tender ite on
must be for an even multiple of Si,000, and the price offered must be expressed
on the basis of 100, with not more than three decimals, e. g., 99,925,
eM ers s
sandtrus
Fractions «ininv
Wed to
may not be used.
It is urged that tenders be made on the pointed forms and for—
Billsappl
p ss p
warded in the special envelopes which will be supplied by Federal Reserve Banks
or Branches on application therefor.
j^(
«late
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 f 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.
»' file
p ficcep
|iandhis
Ijf...
■ ficept
;4li(jg£f
Huilai
Immediately after the closing hour, tenders will be opened at the Federa
treasury
f o r
r e l e a s e , m o r n i n g NEWSPAPERS^.
Friday, M a r c h 26, 1943.
3- 2 5 - 4 3
department
Washington
'
'
The S e c r e t a r y of the Treasury,
invites
tenders /or- $ 8 00,000,000,
by, this public notice,
or thereabouts,
of 9 1 - d a y
T r e a s u r y bills,
to be- issued on a d i s c o u n t basis u n d e r compel-
itive bidding.
The b i l l s : o f this series w ill be date.d M a r c h '31,
1943,
and will m a t u r e
June 30,
be payable, w i t h o u t .-interest«
only,
1943,
when
the face', amount will
T h e y will be issued in b e a r e r form
and in d e n o m i n a t i o n s o f $l-,000-, $5,0*00, $ 10 ,000, $ 100 ,000,
$500,000;,^-and $ 1 , 0 0 0 , 0 0 0
(maturity value)...'
T e n ders will be r e c e i v e d at Federal Reserve R a n k s and
Bra n c h e s u p to the closing hour, two o ’clock p. mA, E a s t e r n iW a r
time, Monday, M a r c h 29, 1943.
T e nders will not be. received at'
the T r e a s u r y Department, Wash i n g t o n .
E a c h tender m u s t be for
an even m u l t i p l e * o f $ 1 ,000, and the price o f f e r e d mus t be ex
p r e s s e d on the basis of 100 , w i t h n o t more than three decimals,
e. g., 99.925.
Fractions m a y n o t be used.
It is u r g e d that
tenders be m a d e on the p r i n t e d forms and 'forwarded in the s pe
cial envelopes w h i c h . w i l l ^ b e s u p olied b y Fe d e r a l Reserve Banks
or Br a n c h e s on a p p l i c a t i o n therefor.
Tenders will be r e c e i v e d w i t h o u t d e p o s i t :f r o m .incor p o r a t e d
b a nks and trust companies and f r o m r e s p o n s i b l e and r e c o gnized
dealers in. in v e stment securities.
Tenders f r o m others m u s t be
a c c o m p a n i e d b y payment of 2 p e r c e n t of the face amount of T r e a s
u r y bills a p p l i e d f o r , unle s s ..t h e . tenders are a c c o m p a n i e d by
an express g u a r a n t y of pa y m e n t by. an i n c o r p o r a t e d b a n k or trust
company,
I m m e d i a t e l y after the closing hour, tenders will be opened
at the Federal R e s erve Banks and Branches, following w h i c h pub-»
lie a n n o u n c e m e n t will be m ade b y the S e c r e t a r y of the T r e a s u r y
of the amount and price range of a c c e p t e d bids.
Those s u b m i t
ting tenders will be a d v i s e d of the acce p t a n c e or r e j e c t i o n
thereof.
The S e c r e t a r y of the T r e a s u r y e x p r e s s l y reserves the
right to accept or reject any or all tenders, in whole or in
part, and his a c t i o n in any such respect shall be final.
Pay
men t of a c c epted tenders at the prices o f f e r e d m u s t be mad e or
com p l e t e d at the Federal Reserve B a n k in cash or other i m m e
d i a t e l y ava i l a b l e funds on M a r b h 31, 1943.
35-85
(Over)
2
" T h e income d e r i v e d f r o m T r e a s u r y bills, w h e t h e r interest
or g a i n f r o m the sale or o t h e r d i s p o s i t i o n of the bills, shall
n ot have, a ny exemption, as ,such, and loss f r o m the sale or
other ‘
d i s p o s i t i o n of Treasury- bills shall 'nat have,.any special 5
treatment, as such, u n d e r Federal tax Acts n o w or h e r e a f t e r
enacted.
The b i l l s shall be sub je at-to. estate,, inher i t a n c e ,
gift, or o t her ex.cise taxes, w h e t h e r Federal or State, but
shall be e x empt f r o m all taxation- n o w or- h e r e a f ter i m p o s e d on
the p r i n c i p a l or i n t e r e s t t h e reof by an y State, or a ny of the
p o s s e s s i o n s of the U n i t e d States, or b y any l o c a l ^ t a x i n g
authority.
For p u r p o s e s of t a x a t i o n the a m o u n t oi d i s c o u n t
at w h i c h T r e a s u r y b i l l s are .originally sold b y the United.
States shall be c o n s i d e r e d to be interest.
U n d e r S e c t i o n é 42
and 117 (a) (1) of the Internal Revenue, C o d e , as a m e n d e d b y
S e c t i o n 115 of the Revenue A ct of 1941, the a m o u n t of d i s c o u n t j
’at w h i c h b i l l s i s s u e d h e r e u n d e r are sold shall n o t be c o n
sidered, to accrue u n t i l suc h b i l l s shall be sold, r e d e e m e d or
g t h e r w i s e d i s p o s e d ofj and such'-bills .are e x c l u d e d f r o m c o n
s i d e r a t i o n as capital assets.
A c c o r d i n g l y , thé o w n e r of'
T r e a s u r y b i lls (other than life insurance-^ companies), i s sued
h e r e u n d e r n e e d include in h is income tax .return o n l y .the d i f
ference b e t w e e n the price p a i d f o r such Jpills,. w h e t h e r on
o r i ginal issue or on sub s e q u e n t purchase;, and the a m o u n t
a c t u a l l y r e c e i v e d either u p o n sale or r e d e m p t i o n a-t m a t u r i t y
duri n g the taxable y e a r for w h i c h the r e t u r n is made, as
o r d i n a r y g a i n or loss**
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 No. 41:8, as amended, and
this notice, p r e s c r i b e the -terms of the T r e a s u r y b i l l s and
..govern the c o n d itions of their issue. * Copi e s of the c i r c u l a r
"may be o b t a i n e d from any Federal R e s e r v e B a n k or B r a n c h .
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ar# v * U
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p*»Mnt ioac M i l « *
à i m m l t io 9*r ih e lr
Many «re paying !•**• »at of «»all laeoaoo or fio*
11 .ftoaootafy io im » «pò» pool enrtag».
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moot»«
i
I ftftftnet oe*r~«aoh.*»ite the importa»**
i*.«k*
«amé Alffiaalty
o aro toalla« vith a l U t o o » of people »at billion» of tallar»«
i* ar» toallttir t* aggregate* «o root that for
Chea,
of thi*
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*a «
«oaorsfcoaâ
r» er# ¿««¿tag vith h o m » beine* rho** rovello»« »r* not wholly
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is ih# »»»eiIm».
I#r#r before ho« a. fatto» b»»» «allei enea io beati*
a probi#» of then* preparile» e «a* io «et» *a«h * * ¿ a a t m a t a ih *© short
.
The»* are ih# r*«***» rhy «or probi e» le diffidali.
da ih« other fc**A. ih* eery faat that w* se»*
billion of
«sol rer »m&e p H aeri ly for ■aCI-laflaCtoaarr porp*•*« a*«*» that
ve »r» roll »bl* to pay ti.
fa me#* war* termite» beami*» ear l a m m e «
«y* *® ssatoh larger; re vmilt a»#* la** CecsaCloa If ear laoaa** rere
«»aller,
f -
l U M U l i t « *Hay ara auuf»tag tutti! th# foilowing &»rah
i w * »
Itiär tu* M l á n i t
a
tê&m
thay
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that ihay u»lur**tt«s»tuä th#ir iura# aa if%f Isiaossaa.
Tbl*
%mm*
taataaA #£
that
p*r%
of thalr #a*i**&# p?êf#â te %t 1U u * o ry.
turali*« aut
i*
be ravi»«*, they had to ba mead far
%fet
uagmaut di’ tara#*
A* raum ** ih* O n a g r e « bu* W
tira «tt#r #
â
M
«*
psy*»*-yra^d
thu I « liability of fh« v&et majority o£ tmapayar#
utll b* auileotêd ut «aurea*
mmrimm*
will Va bailar «felá ta guar
liâiif M a t n g a ta tha Irara# ai thatr diorami* th# trauma
After payaaut #£ Isitt*
flit** I hallara* util fsurra*#
vomì
j m m m m
stag
I.
raring* »bar« what they would ha In th# abaauua of aal&autlaa at raeraa*
I hura e*»e*i#r*t*d a ttassbaf of fan tara «hiato ara halpiag to arart
f»fiatila*
lavorar* aura orata tu ha Ira# and with tfea usa of th* tas
arata» fura eac ha tosa*
fusa# ami uley au t a r a r t i » i p a r t is là # ì i i «
uafg» a ra la * t la f la tla a by v i b r a v i » « pprahfcatag ravor fra » ounwamar#.
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##■ ♦ « o a a M a H u g th* ftret of oar war tas laaraaaia«
«tderiag
It ira* t a» if
m
bto ara »uw eoa-
adding lió billion tu a lar «yeta» wfetuh will alraady m i t a
$35 billion during th# o#*l»g flieftl year*
fra## Ararle*»« afea## trauma#
rnnrmmmmi Mr&mtlm of
in v tiif Ha» lvtar«*»*& In d iro o i r»»t»aa»» ie ©1«
«al» «f t e r &*«$»«
fa r IH»
Is lf%t* IttdtvtAi»»!»
In
( lij
fa tte d liai# » ««ooriite*.
War M t e w W
fa s * U fea#» IH»I ih» fr# a» srr
i
Ü M
fm $**
i l l »,
tmo te ta p m m tim oyoteoollo
isvootooot i» Ik#*« te s i» Hr fO fo te r M H u tila n s fr m psy mmlmpm»
fh t* prmgtm 1» wmmmêlm*
hiumm ^H
II H*» Hass I» »por»ito» only
» I t it i# mar# temi » y«&r, 20 « tilt» « voltear» in 115*000 fir m i or#
mAv paliti potto#*
A» *ddllte**l ÿjfe »tillas foêoPol* ila!» «ad l©»al
«*r>iojn**» m û mm osti va»»» 1® IH» «rood fare«« ar» teiyiac Hand» to
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P ^ K 'mS y t
TREASURY DEPARTMENT
Washington
(The following address "by Randolph E. Paul,. General
Counsel for the Treasury, before the Schoolman*s
Week Convention at the University of Pennsylvania,
is scheduled for delivery at It30 P.M.f Eastern War
Time, Friday, March 26, 1943 f andis for release at
that time,.)
The Impact of Taxation on Consumer Spending
Your Chairman has asked me to discuss with you the impact of taxation on
consumer spending. The reason for his selection of this particular topic is
easy to see* There is a very close relationship between taxation and consumer
spending.
Much of the economic discussion of the past dozen years deals directly
with the subject. We talked a good deal about the impact of taxes on consumer
spending all through the 30*s. At that time we were concerned with a lack of
balance between savings and investment, and sought to increase employment and
national prosperity by increasing consumers* expenditures*
X,
The New Problem
Today, we are confronted with the converse of that problem, We are trying
to find ways and means to discourage consumer spending, and to encourage saving.
Today*s problem is a direct by-product of the war effort* The record
level of production is creating larger incomes than the American people have
ever enjoyed. At the same time we are able to devote only about 40 percent of
our men and machinery to the production of civilian goods* The other 60 per
cent is producing guns, ships, planes, and the other instruments of war* As
a result, some of the dollars in America*s bulging pocketbooks find nothing to
buy* A prosperity level' of individual incomes is finding only a depression sup
ply of consumers* goods* The excess purchasing power is exerting an inflation
ary pressure on prices* To relieve that pressure, consumer spending has to be
reduced*
In the current year, income payments to individuals will amount to about
$135 billion. Direct personal tax payments will reduce this sum by about
$15 billion, so that consumers will have about $120 billion to spend and to save*
On the supply side, it is unlikely that more than $75 billion worth of goods and
services will be available for consumers to buy. This $45 billion difference
between the $120 billion and the $75 billion must be saved or taxed away if the
cost of living is to be safeguarded*
35—86
-2 ~ '
The Presidentts Budget Message
This is the problem the President had in mind in his recent Budget Message,
when he called upon Congress for revenue legislation which will not only provide
revenue hut will also support the stabilization program by deterring luxury or
non-essential spending« I quote the President:
nA large portion of ¿thismJ excess buying power must be
recovered into the Treasury to prevent the excess from being used
to bid up the price of scarce goods and thus undermine the
stabilization program by breaking price ceilings, creating black
markets, and increasing the cost of living*B
The tax system can be used, and indeed should be used, as one of the
instruments of public policy for protecting t!he standard of living by deterring
consumer spending-» I take it that we are all agreed that inflation must be
prevented, and that we want the Government to use all the implements at its
disposal for this purpose«* To successfully combat inflation will require a
Herculean effort on the part of everyone# The effort, however, will be well re
warded, if inflation is prevented*
The Bffects of Inflation
To consumers, inflation means ruinous increases in the cost of living* It
means a shrinkage in the purchasing power of their current earnings and the con
fiscation of much of their past savings#
Wartime inflation piles additional hardships on top of these evils* By
increasing the cost of the war it expands the public debt and intensifies the
Government1s revenue needs# By distorting the whole price structure it leads
to waste and misdirected production and seriously disrupts the war economy# In
addition, it makes post-war adjustment considerably more difficult and painful#
Some of the consequences of inflation are less tangible* Morale is under
mined# War workers become involved in a struggle for high©** wages to which they
feel entitled because of the spiralling cost of living# Businessmen become
absorbed in price variations and price disparities to the detriment of their
productive efforts# In short, seeds of destruction are sown beneath the whole
war effort*
The Steps That Have Been Taken
America is determined to avoid inflation and its consequences# Almost a
year ago the President set forth a seven-point cost-of-living program# Since
that time the Government has taken action along many fronts* Almost all prices
were brought under price ceiling regulations, measures were adopted to stabilize
3
wages and salaries, important rationing programs were instituted, consumer
credit controls were tightened, and new taxes levied« Nevertheless, firmer
measures are necessary if we are to succeed in stabilizing the cost of living*
In this connection, increased taxation will perform an important function*
n.
factors Contributing to a Solution
At the same time I do not wish to imply that taxation alone must do the
job* A number of other factors contribute to its solution by helping to keep
consumer spending at safe levels,
The Savings Pattern
If the income of the American people is exceeding all records, so is the
amount of their savings# Recent studies have brought this forcibly to our
attention# It is estimated that in the year just past liquid savings of
individuals amounted to about $25 billion# This compares with $10 billion for
1941 and $5 billion for 1940# What savings will amount to this year depends on
a number of interacting factors, such as the volume .of production, the availa
bility of consumers* goods and services, the success pf price control and rationing programs, the stability of wage and salary rates, and the tax program itself*
The unprecedented volume of savings by individuals can be accounted for by
a number of factors, some of which reflect the traditional habits of the
American people, Others are the result of the war.
The Habit to Save
Hie American people traditionally save a substantial proportion of their
income* Contractual commitments on insurance policies and repayments of
mortgages and similar obligations absorb much of their income* Appreciable
amounts are normally saved automatically out of the excess of income over current
living requirements# Each additional dollar of income makes it easier to save
more and permits the individual to get a better and wider view of the opportuni
ties and benefits of investment# This is a normal development and would take
place even if there were no war-time scarcities and,special motivations to save
more and spend less.
Difficulty of S-pending
-/ r
-■ ' ■ . 1 --’
<■„, *, 'r*.'V*/ h*.n " L:% {
> I'
^'r T , • j
War-time scarcities and rationing make it impossible to spend as much as
one would like. Many of the durable goods which became the symbol of the
American standard of living have been taken off the market as plants and
materials were diverted to war production*
V
I
- 4-
I
^ ^ ^ l , the American people*spent over $11 billion on automobiles,
I; electrical appliances and other durable consumers* goods» By 1942, total
BI expenditures for these items declined to $7*6 billion, despite the higher l.evel
I; of incomes# Today, most of those durable goods, which symbolized the American
| stfmdard
& T & n° longer being produced^
Expenditures are being
I limited to those small scattered stocks which still remain in the hands of
I dealers#
1 Ho Substantial Reduction in Standard of Living
I
Despite these curtailments in production, the standards of living and com—
j|fort have not declined as radically as one might expect* Americans have been
|able to get along with the old model a little longer without great hardship*
IPersonal inventories have been called into the breach^ ,A. little patching apd a
|;little extra care in use of these precious hold-overs have helped the consumer
¡ to get along and save his current income# The old American proverb **Eat it up,
wear it out, make it do,*1 has become the order of the day*
v: Simpler Ways of hiving
These fa.ctors add up to simpler ways of living# Americans have been ready
f and willing to accept and even devise simpler ways of living. Hot the ways of
| our forefathers, to be sure; in many respects our standard of livi&g in this
critical war period is higher than it was in the boom years following the first
World War* Americans are better housed, for example, than they were then* But
; they have accepted simpler ways* We walk instead of ride, we travel less, we
| gave up long vacations, and dropped a lot of the frills that are out of keeping
i: in time of war#
Keeping up with the Joneses .> has changed to keeping down with the Joneses*#
itKeeping up appearances in war-time means keeping appearances correct in terms
II °f the personal sacrifices which the war demands* This is a kind of voluntary
|i sharing of civilian resources on a more equal basis*- It also means added
jl savings*
I think that in this war, America*s consuming habits are benefiting from| the experiences of the last war and the last depression* Unemployment and inI security is still fresh in the minds of millions of workers* They are less
| inclined to put their higher. fearnitigs into- silk shirts and more._inclined
.
|l -to’put them, into savings-than than'they* were-a generation ago*;.-. Farmery,
j[ have
memories:and are apparently using some 'of their present prosperity
[ to get out of debt•
Government Promotion of Savings
;
Saving has increased in direct response to the campaign for the sale of
War Bonds# In 1942, individuals invested $10*2 hill ion in United States securi*
ties. War Savings Bonds accounted for $8.5 billion. You all know that the
Treasury Department has been promoting systematic investment in these bonds by
regular deductions from pay envelopes* This, program is succeeding#1 Although
it has been in operation only a little more than a year, 20 million workers in
175,000 firms are n o w participating# Ah additional 5*4 million Federal, State
and local employees and men and women in the armed forces are buying bonds in
this manner*
The Treasury has announced a n e w Victory Loan drive for April to raise
$13 billion. The success of the drive Will depend on public participation
since it is planned to raise almost two«*thirds of the total from outside the
banking system* Savings in all forms are valuable; put. into w a r bonds, they are
most directly helpful to the war effort#
'
Pay-as-you- go Taxat ion
A satisfactory pay-as-you-go income tax plan should also encourage people
to save systematically. At present, with year-to-yea.r changes in tax rates and
exemption levels and with rapid changes in individual incomes, millions of tax
payers have no accurate conception of the tax liabilities they are accruing until
the following March when they prepare their tax returns* A large number of them
very recently discovered that they underestimated their taxes on 1942 incomes*
This means that part of their savings proved to be illusory* Instead of turning
out to be savings, they had to be used for the payment of taxes*
As soon as the Congress he,s exacted an adequate pay-as-you-go plan under
which the tax liability of the vast majority of taxpayers will be collected at
source, Americans will be better able to gear their savings to the income at
their disposal, the income remaining after payment of taxes*. This, I believe,
will increase personal savings above what they would be in the absence of
collection at source#
III#
The Function of Taxes
I have enumerated a number .of factors which are helping to avert inflation#
However, more needs to be done and with the use of the tax system more can be
done# Taxes can play an important part in the campaign against inflation by
withdrawing purchasing power from consumers* Taxes, however, are powerful
instruments and must be used w i t h great care*
*
6
We are not imposing taxes for tho first time* It isn’t as if we were
considering the first of our war tax increases* We are now considering adding
$16 billion to a tax system which will already raise $35 billion during the
coming fiscal year* Those Americans whose incomes have declined as a result
of war and, to a lesser degree, those whose ine-omes have remained stable (a
group with which you are well acquainted) are already finding it difficult to
pay their present tax bills* Many are paying taxes out of small incomes or
find it necessary to draw u£>on past savings, For these réasons, we must use
the tax system as we would a delica,te surgical tool and try to adjust it to the
economic and family status of 135 million Americans with widely varying incomes,
fixed commitments, and spending requirements*
The Complexity of the Task
I canhot over^-emphasize tho importance and difficulty of this task* We
are dealing with millions of people and billions of dollars# We are dealing in
aggregates so vast that few among us can comprehend them* We are dealing with
human beings whose reactions are not wholly predictable* At every step we must
make allowance for the human clement in the equation* Never before has a Nation
been called upon to handle a problem of these proportions and to make such
adjustments in so short a time* These are the reasons why our problem is
difficult*
On the other hand, the very fact that we need $l6 billion of additional
revenue primarily for anti-inflationary purposes means that we are well able to
pay it* We need more taxation because our incomes are so much larger; we would
need less taxation if our incomes were smaller*
In 1943 individual incomes after direct personal taxes wilt aggregate
$120 billion# In prosperous 1940 we had left only $74 billion after paying
taxes, and in 1932, the corresponding figure was $46 billion# In other words,
despite the substantial tax increases of the past few years, the American people
will ha.ve considerably more money to-spend and to save in 1943 than they had^at
any time before — $46 billion more than in 1940, and $74 billion more than in
1932*
Hardships unavoidable
By citing these figure.s I do not mean to imply that the war is not imposing
economic hardships* On the contrary,, it is inevitable that hardships become
the general rule rather than the exception* They áre one of the inescapable
costs of war* I believe, however, that if we use the tax system wisely# un
necessary hardships can be prevented and the burden more fairly distributed*
The reduction in'consumption which is imposed on us "by iwar is the cost we
I civilians must hear#- To limit consumer expenditures, on the average, to $500
H per capita — the supply of civilian goods and services which the President
tells us will he available for the average American next, year - in a year when
;l our incomes are very high, will require very drastic pruning* However, in
■[.making the additional cuts in consumption we must be doubly sure that sub«
! sistence living standards are not impaired* This is an essential part of the
1 problem and we dare not overlook it. Such impairment would have a direct
1; effect on the productive efficiency of the American people and could have
j
i disastrous results in terms of the war effort*
XV*
The Impact of Various Taxes
In selecting the kind of taxes we will’.use, we can no longer be governed
! by revenue considerations alone* We must assign much weight to the effectiveness
| of the particular tax in reducing consumer spending and in allocating that
reduction among the people,
; Individual Income Tax
The effectiveness of the income tax in restricting consumer spending varies
considerably at different.income levels* In the income bracket just above
personal exemptions it is likely that the tax achieves a dollar-for—dollar re
duction in spending, In the upper brackets, however, consumer spending is
probably curtailed only slightly and the tax kis probably absorbed in large part
out of savings* Those with small incomes usually save very little and when
their taxes are raised have no choice but toi reduce their spendings* Taxpayers
j| with large incomes can adjust for the higher taxes by reducing current savings
and liquidating accumulated assets* Placing the income tax on a pay-as-you-go
basis with provision for substantial collection—at—the— source also would enhance
the anti-inflationary effects of the income tax*
Individual Excess Income Tax
life have devoted considerable thought to a special kind of war-time income
tax* I have reference to an excess income tax which would tax increases in
individual incomes in a manner comparable to the way corporation income is.
taxed under the excess profits tax, I know that many of you here have dis
cussed such a tax from, time to time* Vor the most part, you^are members of a
fixed income group and have not received war-time increases in earnings com
parable to the increases enjoyed by many others, I have brought a-long a
number of copies of a memorandum in which the cane for a special tax on in
creases in income is considered, which I’ll be glad, to leave with you,
n that
memorandum we, conclude that there are a number of objections to such a tax*
t
would not be very effective from an anti-inflation viewpoint, would discriminate
against many groups, and would be difficult to administer.
-
8
-
if Sales Tax
The sales tax is urged as an effective means of checking consumption* Its
l.| capacity to do this lies in its peculiar ability to tap low incomes which cannot
jl "k® reached efficiently by the income tax* However, there appears to be little
virtue aud much objection to curtailing the purchasing power necessary to
I! maintain minimum health standards of these low— income people# Its cost in
p terms of physical efficiency and morale would be very great#
In addition a sales tax itself is likely to generate an increase in prices
wnich would reduce its anti— infla.tionary effects# Unless the taxi were
jj eliminated in computing farm parity prices, many farm prices and therefore food
.'|j costs would be increased^ The effect of a sales tax in generating wage increases
iji to compensate for the higher cost of living must also be recognized*
Some of the objectionable features of the sales tax as we know it in this
jj country could be mitigated by the allowance of personal exemptions* Last year
[the Treasury suggested a special kind of progressive sales tax with personal
Ijrexempt ions, which would be very effective from the point of view of controlling
p
^ refer to the spendings tax* In many ways, a spendings tax is
especially suited to the needs of the present situation# It places a direct
¡I penalty on spendings in excess of the exempted minimum and encourages savings#
Because the tax is adaptable to the use of exemptions and graduated rates, it
; can take into account differences in family status and general taxpaying
,j capacity*
Selective Excises
Increases in the rates of excises offer only a limited opportunity for
[reducing general consumption* Since the commodities are largely non-necessities,
the taxes have no particularly harmful effects on minimum living standards#
l While^payment of the tax may be at the expense of goods more vital to health and
efficiency, the consumer is given the opportunity of choosing his own necessities#
The fact that excises are selective enables them to be used with more discretion
than a general sales tax in discouraging the use of scarce goods and services^
such as transportation and communication#
Corporation T^xes
The tax on corporation income at first sight seems only remotely related
I to the control of inflation* There are nevertheless close connections* On the
| one hand high excess profits tax rates reduce the incentive to keep business
costs- at a minimum since such increased costs have a relatively small effect on
I profits remaining after taxes* On the other hand, however, corporation taxes
) ^en(i to curb purchasing power in the hands of the public* ( They reduce the in[ come available for dividends#
f
I
9 -
Compulsory Lending and Saving
Two measures which assign tomorrow a prominent place in the framing of
today1s fiscal program are compulsory lending and compulsory saving* These
measures are like taxes in that they compel the taxpayer to do specified things
with his money. They are unlike taxes in that they give him a financial claim
against the future* Therefore, they preserve the incentive to work hy post
poning rather than taxing away the rewards of labor,
Compulsory lending is an effective anti-inflation device only to the
extent that it applies to the low income groups who otherwise would do little,
saving. Other income groups can-meet their compulsory lending requirements hy
diverting their savings to the Government rather than hy curtailing their
consumption. In other words, instead of reducing spending, lending rriay merely
replace other investments.
Compulsory saving, on the other hand, imposes a legal obligation to save
a specified fraction of income. The only way to meet the savings requirement
is to spend less«, While a firm compulsory saving mea-sure offers a comprehensive
solution to the problem of inflation, the plan is subject to formidable
administrative difficulties.
V*
Conclusion
I have indicated in general terms the impact of taxes on consumer spendings*
The problem is one of immobilizing purchasing power in the hands of consumers,
to prevent high incomes from exerting inflationary pressures on the cost of
living* Many measures have already been tekren to this end and substantial
assistance in combatting inflation is afforded us by the rising volume of savings
and wide public acceptance of the need to refrain from spending* Nonetheless,
much of the burden for combatting inflation must fall to the tax system. In
deciding what particular taxes we will use for this purpose, it will be well to
keep in mind that our taxes today affect consume*1 spendings not only this year
and not only during the'war, but will have a very direct effect on consumer
spendings after the war* If we use them wisely, the war bonds, the liquid
balances, and the post-war credits accumulated during the war can provide
America with aqi instrument for sustaining a high level of consumer spending after
the war.
I
-0O 0-
4
Demand more equitable distribution of shared revenues,
particularly motor vehicle taxes.
Provide for more adequate governmental accounting and
reporting.
Cultivate an attitude which regards all governments as
partners in a joint enterprise.
po
Labj
re inve:
with,
program
*pg
In
Collaborate with the Federal G-overnment on a. broader and
more generous program of Federal aids, accepting controls
but insisting that they be cooperatively applied rather
than dictated.
\J
X .
if
Cultivate an attitude that regards all governments as
partners in a joint enterprise.
Collaborate with the .Foeoral Government on a broader and
more generous program of Federal aids, accepting controls,
put insisting that they be comierative1v applied rather
/
p thnn dictEted54*5r.
flunic
unic ipa1 Government s
negotiate with Federal representatives and collaborate in
the development of a Federal-State Fiscal Authorit:
negotiate with Federal officials and Congress to inaugurate
a program for the elimination of tax-exempt securities that
will not fiscally embarrass States and municipalities.
In collaboration with States, refrain from demanding
unreasonable war time aid from the Federal Government, thus
recognizing the importance of local independence.
Apply-surplus revenues, where possible., to the elimination
of debt and the development of a reserve against war time
loss of revenue and post-war need f o r public w o r k s .
Broaden tne property tax program by supplementing the
property tax with a rental tax on occupiers,
V
Strictly interpret property tax exemptions.
Inaugurate a thoroughgoing study of possible new sources
A
01 independent local revenue,
De ye 1
Idug^rn
trop o,
\
0peraj^#fi ancyfbhe use,
tfinancdny
iz e * * ¥ P M
dist:
iecau s
e sei
rdeirv
L
tJ
Demand more equitable representation in Stain
legislatures.
pro<
|C5
In collaboration with municipalities, refrain from
demanding unreasonable war time aid from the Federal
Government, thus recognizing the importance of local
independence.
Apply surplus revenues, where possible, to the elimination
of debt and the development of a reserve against war time
loss of revenue and post-war need for public works.
When revenues v/ill permit, allow Federal income taxes as
a deduction in calculating State income taxes.
Redouble attack on trade barriers, multiple taxation, and
special inducements for the location of industry; use of
education, reciprocal agreements, and interstate compacts
toward these ends; pass legislation allowing credit to
new residents for automobile license taxes paid in the
same year to other States.
Collaborate with the Federal Government looking toward
Federal arbitration of jurisdictional disputes and joint
determination and promotion of uniform practices in
income and business taxation especially with regard to
questions of jurisdiction.
Further collaborate with the Federal Government in the
joint administration of overlapping taxesD
Adopt legislation on their own initiative that would
make payment of Federal automobile use tax a*, condition
for the receipt of a State license.
Mitigate the rotten borough system by providing more
adequate representation for cities in State legislatures.
Give more consideration to cities in the distribution of
shared taxes, particularly motor vehicle taxes.
Adopt enabling legislation that would permit cities to
suPpleraent the general property tax with a rental tax
on occupiers.
Adopt enabling legislation that would facilitate
surplus financing durirg war time.
Adopt legislation requiring more adequate and more
uniform governmental accounting and reporting.
]/b. Broaden Federal aid to include relief and elementary
'i?
education.
Broaden the Social Security program to include uncovered
groups under old-age insurance and unemployment compensa
tion. This would not only provide more equitable coverage
but would also make possible some simplification of payroll
tax© s.
Provide controls which. will insure improvement in the
division of educational revenues, local districting, and
the quality of the educational product, at the same time
insuring against coercive interference with local autonomy
and minority views concerning education.
Provide for Federal scholarships to insure the ad.equate
development of talent through higher education.
In the interest of simplification, repeal Federa.1 liquor
license feesy retaining licenses where needed for
administration.
&f
o / F e d j g r a l jmtpAlj ales y f i s er^,teà^0rovijtê
1 eman atUm and adjrnhi^#ative
l|$fis1 a$i
insure
fulles# c Operative u s ^ i T S t a t e pe^onnel
Negotiate with Federal representatives and collaborate
in the development of a Federal-State Fiscal Authority.
Negotiate with Federal officials and Congress to ina.ugura.te
a program for the elimination of tax-exempt securities in
such manner as not to embarrass States and municipalities
fiscally.
'.Lighten property exemption provisions; relax ceiling and
uniformity requirements as to local property tax levies;
develop more adequate supervision of property tax
administration.
i
/^vvC
*
Cultivate an attitude which regards States and localities
as partners in a joint enterprise.
For immediate or future actio
Develop in consultation with the States, standard rules
for income and death tax jurisdiction; develop suitable
rewards for State compliance with these rules and other
suitable procedures so that the Federal Government raa.y
serve as an umpire in multiple taxation disput es 0
Develop in consultation with the States rules of uniform
income tax procedure; promote the adoption of such rules
looking toward single administration of a relatively
uniform State and Federal income tax.
Adopt a, Federalj/j/ollection-State^
tobacco tax.
laring program for the
Enact legislation providing for Federal incorporation of
corporations doing an interstate business.
Provide distribution of welfare grants to the States
through a graduated bracket system as suggested in the
Connally amendment,
b
For future action
M *
Abandon motor vehicle taxes to the States»reserving the
right to tax motor fuel used in aviation.
Inaugurate a, thorough study of the cost of tax compliance
and tne burden of multiple taxation on interstate
companies; reserve action on centralization of business
taxes until this evidence is available.
IS.
vestme nip t èchni
f necess^
•w a ^ ^ ^ n L a t i on a ¿ ^ ^ n e m p l o ^ j ^ n ^
reatiy^^pTjín.ic
3gl<
w o »í£b
Í(iíealtl
ful IV
lidati on'
to
dual
'ition.
Reduce repressiveness of the tax system by deemphasizing
business taxes and by equalizing burden upon equityfinanced companies compared with those financed by means
of indebtedness (through a partial credit to the
corporation for dividends paid out).
and improve the coordination a n d efficiency
ployment compensation by increasing the federal
from 90 to 100 p e r c e n t and requiring the States
ish part of the cost of administration.
uno:
Pay more heed to cost of compliance in framing tax laws.
Extend the Civil Service coverage to include all personnel
engaged in Federal tax admini stra.tion.
erne
Continue and enhance cooperative efforts to improve State
and local accounting and reporting; provide annual compila'
tion of cost of government and^ total taxes.
.6 .
7.
expend more effort on Federal—Sta,te collaboration in the
administration of overlapping taxes.
hepeal the automobile use tax» or, if it is retained,
require receipt as a condition for obtaining a. State
license.
te Jeetiber
la jee
resuons
aine
orra^Eov arnme
tins
1 cule
acJT)
haii— g d » njgjmmim1d i m if?1on-. .
Negotiate with State representatives and pass legisla
tion to create a Federal-State Fiscal Authority«
Amend the income tax law to make State income taxes
deductible on an accrual basis even though other expenses
are reported on a cash b a s i s *
Revise, modernize, and broaden the death tax credit«
Give the Federal estate# tax a thorough overhauling,
integrating death and gift taxes, substantially reducing
exemptions and coordinating the Federal and State taxes*
Eliminate tax-exempt- securities in a manner to secure
States and municipalities against loss arising from the
taxability of their securities*
Defeat discrimination resulting from State communityproperty laws by providing that they shall not apply
in the operation of Federal, tax laws*
Provide a clearing house and "board of appeals"
(Federal-State Fiscal Authority) for more careful and
consistent treatment of payments in lieu of property
taxes on Federally owned property* Such payments
should be generous, especially during the war*
Provide a special joint committee of Congress to
consider legislative proposals for payments in lieu
of taxes; provide facilities for maintaining a
permanent inventory of Government property.
Allow State sales tax application to contractors
working on Government orders.
>•»<*
-
-
r- - ■ * > «> J ® r i;;
v.'-
■
¡¡S
,1 «.*•
such vital subjects as the overlapping of Federalist at e-local
taxes
and the
need for
coordination of tax levies
/
-V
provides
a basic fund of knowledge never before available to
»
legislative and administrative bodies«
From the starting point of creation of a Federalist ate
Fiscal Authority, recommendations of the committee as embodied
in its "notion program for each level of Government* move
across a broad
They
range of intergovernmental fiscal relations.
deal with such important phases
as overlapping tax
systems, overlapping expenditures and debt systems, Interstate
u
’
cooperation, State-municipal relations, and the coordination
of governmental operations generally.
Running through, all
the recommendations is the theme of cooperative endeavor,
with all governments
regarded as partners in a Joint
enterprise.
/
Following are the principal features of the action
program
as the committee summarised
them!
4
Commission provided Dr, Groves with
qualifications
committee^
for
part of his many
the responsibility of directing the
endeavors.
Long a recognized authority
on
public finance, he is author of an outstanding textbook
in
this field, titled "Financing Government• * In the committee
sessions Dr* Groves was prepared to speak
knowledge
of
with particular
State affairs*
FyJt^Guliek, who is director of the Institute of
Public Administration, has been a professor of munlolpal
science and administration, a participant fin
much research
by
legislative committees and tax departments, and counsel
to
numerous public agencies on tax matters. He has been
prominently identified with
the
Tax Research ffottft&ntlon
League.
activities of such bodies as
and the National Municipal
1^
Dr. Newcomer, professor of economics at Vassar College,
has studied intergovernmental fiscal problems for many years,
in the United States and abroad*
She took an Important p a r t
in the Twentieth Century Fund study,
"Facing the Tax Problem **
A small full-tin® staff of economists and tax specialists
had the assistance of the Treasury Department1g Division of
Tax Research in making the factual surveys on which the report
was based. Intergovernmental relations in several Foreign countries
were studied for ideas applicable to the American intergovernmental
scene* The statistical material assembled by the committee
t
on
Insert Fiscal Relations report release, p*5
i mSB
®
i
Considered in much detail in the report are problems
of coordinating Federal and State taxes in the fields of
MSBBÈ
income, death, tobacco, liquor, automotive, sales, business,
stock transfer, and payroll levies* The need for Federal-State
cooperation
in tax administration as a means of achieving
coordination is stressed in connection with several of these
taxes*
Federal payments in lieu of taxes,
State and local taxation of Q-overnment contracts, and tax-exempt
securities
are dealt
wit h in the
relating to tax immunities*
w
Ê
m
m
m
é \
&?i|
portion of the report
In urging the importance of “coordination and cooperation
rather than subordination and coercion11 in attacking the
intergovernmental problems, the committee rejected the idea that
«a group of specialists could draft a formula or a set of
specifications to satisfy all parties and resolve all the
conflicts* * Rather, it said, the unspeofea^lar method of
“nibbling*1 at the task, b & by bit, (^romlaes^nost in the way of
rogress in what must be a cooperative venture*“
The committee informed the Secretary that its report was
“based on the assumption the United
will be on the
winning side of the war and that the struggle will not be so
long and exaoting that all our institutions will need to be
revolutionised to conform to military necessity*“
\ /
Special funds were provided by Congress to meet part
of the cost of the committee*© study* Aid of the Institute of
Public Administration, of New York, was made possible by
a grant from the Carnegie Corporation* State and local governmental
agendas gave the committee ready oooperatlon , and assistance
came from many Federal sources*
Inquiries already made indicate that the report will be
given widespread a tte n tio n *
Dr* droves served as the committee *0 ch ie f o f s ta ff# He i s
professor of economics at the University of Wisconsin* Experience
as a Wisconsin legislator and as a member of the Wisconsin Tax
a
The three members of the commi t t e e ^ Dr. Harold M* Groves,
Í? Luther (*ulloj£)and Hr, Mabel N©weomer, were asked by the
Secretary
to reexamine the entire subject of Intergovernmental
fiscal relations, giving attention to both temporary wartime
and permanent peacetime aspects of the subject*s manifold
»questions. In making its report, the committee explained to
Secretary Morgenthau that its research programóla» to-bo
curtailed because of wartime exigencies. Nevertheless, Its
inquiry Into the field of Interrelated governmental financial
affairs
\
has been one of the most vigorous and comprehensive
ever made* 1
%
The report lays the groundwork for possible legislative
and administrative efforts to remedy a len thy list of economic
VI
ills to which the diversity of government in this country has
;jj
given birth. Included in the scope of the inquiry were the affairs t
of about 165,000 American governments *of all shapes, sizes,
populations, and degrees of sovereignty*, the committee
observed. Conflicts between these 165,000 Jurisdictions,
[particularly conflicts growing out of revenue-raising enterprises,
are numerous and many of them are deep-seated.
The committee pointed out that President Roosevelt
repeatedly had expressed the belief that *no really satisfactory
tax reform can be achieved without readjuteting the PederaX-Statelooal fiscal relationship/and Secretary Morgenthau asked the
committee to direct its work toward that goal
insert Fiscal Relations report, page 1
Copies of the report are being submitted by Secretary
Morgenthau to President
Roosevelt, to th© Governors of the
............................................................
„
States, and tooths House ways and Keans Committee and the
A
.•
Senate Finance Committee#
TREASURY DEPARTMENT
Washington
NEWSPAPERS
FOR RELEASE,MORN3
r cch
h 51, 1 9 4 5
W e d n e s d a y . M a?r
3/ 2 6 / 4 3
P r e s s S e rvice
No. 35-37
An action program for Federal, State and local governments
designed to resolve conflicts between them over taxation and to
improve all intergovernmental relations in fiscal affairs has
been laid before Secretary of the Treasury Morgenthau by the
Committee on Intergovernmental Fiscal Relations, it was
announced at the Treasury Department today.
The committee completed two years* work by submitting an
exhaustive report analyzing existing problems of Federalistatelooal fiscal relations, stressing the importance of coordination
and cooperation in dealing with these problems, and recommending
speolflc steps to be taken by governmental agencies of all
s^^__three levels, some immediately and others when circumstances permit
Establishment of a Federal-State Fiscal Authority to
stimulate efforts toward better coordination of related fiscal
functions of governments is one of the committee*a chief
suggestions. T^e report presents a plan of organization for the
Authority, calling for Congress to take the lead in providing
legislative approval. Personnel of the Authority would consist
conference of delegates named by State Governors, and a third
named by the first two.
ÏStëASTJftY B1^AHTMFN$
Washington
FOH HELHASB, T O N I N G I^TOAPEHS,
Wednesday, March 31, 10A” .
Press Service
No. 35-87
An action program for Federal, State and local governments designed
to resolve conflicts between them over 'taration and to Improve all inter
governmental relations in fiscal affairs has been laid before Secretary
of the treasury Korganthau by the Committee on Intergovernmental Fiscal
Halations, it was announced at the Treasury Department today.
The committee completed two years' work by submitting an exhaustive
report analysing existing problems of Federal—State-local fiscal rela
tions, stressing the importance of coordination and cooperation in deal-r
ing with these problems, and recommending specific steps to be taken by
governmental agencies of aXI three levels, some immediately and others
when circumstances permit.
Copies of the report are being submitted by Secretary Morgentfc.au to
President Hoosevelt, to the Governors of the States, and to members of
the House Ways and Means Committee and the Senate Finance Committee,
Establishment of a Federal-State Fiscal Authority to stimulate efforts
toward better coordination of related fiscal functions of governments is
one of the committee's chief suggestions. The report presents a plan of
organization for the Authority, calling,for Congress to take the lead in
providing legislative approval, Personnel of the Authority would consist
of one member appointed by the President, one selected"by a conference of
delegates named by State Governors, and a third, named by the first two.
The three members of the committee, Fr» Luther Oui irk, Hr, Harold M,
Groves, and Dr. Mabel Newcomer, ware asked by the Secretary to reexamine
the entire subject of intergovernmental fiscal relations, giving atten
tion to both temporary wartime and permanent peacetime aspects of the
subject's manifold questions. In making its report, the committee ex
plained to Secretary Morgenthau that its research program was curtailed
because of wartime exigencies, Nevertheless, its incuiry into the field
of interrelated governmental financial affairs has been one of the most
vigorous and comprehensive ever made.
The report lays the groundwork for possible legislative and adminis
trative efforts to remedy a lengthy list of economic ills to which the
diversity of government in this country has given birth, Included in the
scope of the inquiry were the affairs of about 165,000 American govern
ments "of all shapes, sizes, populations, and degrees of^sovereignty", the
committee observed. Conflicts between these 165,000 jurisdictions*
particularly conflicts growing out of
numerous and many of them are deep-seated.
enterprises, are
The committee pointed out that President Roosevelt repeatedly had ex
pressed the belief that ”no really satisfactory tax reform can he achieved
without readjusting the Pederal^State-loeal fiscal relationship”, and
Secretary Morgenthau asked the committee to direct its work toward that
goal*
In urging the importance of Coordination and cooperation rather than
subordination and coercion” in attacking the intergovernmental problems,
the committee rejected the idea that ”a group of specialists could draft
a formula or a set of specifications to satisfy all parties and resolve
all the conflicts.” Rather, it said, the unspectacular method of ”nibr
bling” at the task, bit by bit, ”promises most in the way of progress in
what must be a cooperative venture.”
Considered in much detail in the report are problems of coordinating
Federal and State taxes in the fields of income, death, tobacco, liquor,
automotive, sales, business, stock transfer, and payroll levies. The
need for Federal-State cooperation in tax administration as a means of
achieving coordination is stressed in connection with several of these
taxes. Federal payments in lieu of taxes, State and local taxation of
Government contracts, and tax-exempt securities are dealt with in the por
tion of the report relating to tax Immunities*
The committee informed the Secretary that its report was ”based on
the assumption the United States will be on the winning side of the war
and that the struggle will not be so long and exacting that all our in-^
stitutions will need to be revolutionized to conform to military necessity.”
Special funds were provided by Congress to meet part of the cost of
the committee*s study. Aid of the Institute of Public Administration, of
New York, was made possible by a grant from the Carnegie Corporation*
State and local governmental agencies gave the committee ready coopera
tion, and assistance came from many Federal sources*
Inquiries already made indicate that the report will be given wide
spread attention.
Dr* Groves served as the committee*s chief of staff* He i^s professor
of economics at the University of Wisconsin.
Experience as a Wisconsin
legislator and as a member of the Wisconsin Tax Commission provided U*.*^
Groves with part of his many qualifications for the responsibility of di
recting the committee's endeavors. Dong a recognized authority on public
finance, he is author of an outstanding textbook in this field, titled
fin a n c i n g Government.” In the committee sessions Dr. Groves was pre
pared to speak with particular knowledge of State affairs*
Dr. Gulick, who is director of the Institute of Public Administration,
has been a professor of municipal science and administration, a participant
- 3 ~
in much research by legislative committees and tax departments, and counsel to numerous public agencies on tax matters. He has been prominently
identified with activities of such bodies as the Tax Research Foundation,
and the National Municipal League.
Dr, Newcomer, professor of economics at Vassar College, has studied
intergovernmental fiscal problems for many years, in the United States and
abroad.
She took an. important part in the Twentieth Century Fund study,
“Facing the Tax Problem,“
A small full-time staff of economists and tax specialists had the as
sistance of the Treasury D e p a r t B e n t D i v i s i o n of Tax Research in making
the factual surveys on which the report was based.
Intergovernmental re
lations in several foreign countries were studied for ideas applicable to
the American intergovernmental scene. The statistical material assembled
by the committee on such vital subjects as the overlapping of FederalState-local taxes and the need f$r coordination of tax levies provides a
basic fund of knowledge never before available to legislative and admin
istrative bodies.
From the starting'point of creation of a Federal-State Fiscal Author
ity, recommendedions of the committee as embodied in its “action program
for each level of Government“ move across a broad range of intergovern
mental fiscal relations.
They deal with such important phases as over
lapping tax systems, overlapping expenditures and debt systems, inter
state cooperation, State-municipal relations, and the coordination of
governmental operations generally.
Running through all the recommendations
is the theme of cooperative endeavor, with all governments regarded as
partners in a joint enterprise.
Following are the principal features of the action program as the
committee summarized them!
For immediate aption "by the Federal Government;
Negotiate with State representatives and pass legislation to
create a Federal-State Fiscal Authority.
Amend the income tax law to make State income taxes deduct**
lble on an accrual basis even though other expenses are re
ported on a cash basis.
Revise, modernise, and broaden the death tax credit.
Give the Federal estate tax a thorough overhauling, integrat
ing death and gift taxes, substantially reducing exemptions
and coordinating the Federal and State taxes.
Eliminate tax-exempt securities in a manner to secure States
and municipalities against loss arising from the taxability
of their securities.
Defeat discrimination resulting from State community-property
laws by providing that they shall not apply in the operation
of Federal tax laws.
Provide a clearing house and nboard of appeals*1 (FederalState Fiscal Authority) for more careful and consistent
treatment of payments in lieu of property taxes on Federally
owned property.
Such payments should be generous, especially
during the war.
Provide a special joint- committee of Congress to consider
legislative proposals for payments in lieu of taxes; provide
facilities for maintaining a permanent inventory of Govern
ment property.
*
Allow State sales tax application to contractors working on
Government orders.
Modify and improve the coordination and efficiency in un
employment compensation by increasing the Federal credit
from 90 to 100 percent and requiring the States to furnish
part of the cost of administration.
Pay more heed to cost of compliance in framing tax laws.
Extend the Civil Service coverage to include all personnel
engaged in Federal tax administration.
Continue and enhance cooperative efforts to improve State
and local accounting and reporting; provide annual compila
tion of cost of government and total taxes.
7
-
5
-
S^pend more effort on Federal-State collaboration in the ad
ministration of overlapping taxes*
Repeal the automobile use tax, or, if it is retained, require
receipt as a condition for obtaining a State license*
Cultivate an attitude which regards States and localities as
partners in a joint enterprise*
For immediate or future action by the Federal Government;
Develop in consultation with the States, standard rules for
income and death tax jurisdiction; develop suitable rewards
for State compliance with these rules and other suitable
procedures so that the Federal Government may serve as an
umpire in multiple taxation disputes* *
Develop in consultation with the States rules of uniform
income tax procedure; promote the adoption 6f such rules
looking toward single administration of a relatively uniform
State and Federal income tax.
Adopt, a Federal eollection-State sharing program for the
tobacco tax*
Enact legislation providing for Federal incorporation of cor
porations doing an interstate business*
Frovi&e distribution of welfare grants to the States through
a graduated bracket system as suggested in the Connelly
amendment*
For future action by the Federal Governments,
Abandon motor vehicle taxes to the States, reserving the
right to tax motor fuel used in aviation*
Inaugurate a thorough study of the cost of tax compliance
and the burden of multiple taxation on interstate companies;
reserve action on centralization of business taxes until
this evidence is available.
Reduce repressiveness of the tax system by deemphasizing
business taxes and by equalizing burden upon equityfinanced companies compared with those financed by means of
indebtedness (through a partial credit to the corporation
for dividends paid out)#
- 6 -
Broaden Federal aid to include relief and elementary educa
tion
Broaden the Social Security program to include uncôvered
groups under old-age insurance and unemployment compensa
tion. This would not only provide more equitable coverage
but would also make possible some sirsplification of payroll
taxes.
Provide controls which will insure improvement in the divi
sion of educational revenues, local districting, and the
quality of the educational product, at the same time insur
ing against coercive interference with local autonomy and
minority views concerning education.
Provide for Federal scholarships to insure the adequate de
velopment of talent through higher education,
In the interest of simplification, repeal Federal liquor
license fees, retaining licenses where needed for adminis
tration»
Action by State Governments;
Negotiate with Federal representatives and collaborate in
the development of a Federal-State Fiscal Authority.
Negotiate with Federal officials and Congress to inaugu
rate a program for the elimination of tax-exempt secur
ities in such manner as not to embarrass States and
municipalities fiscally.
Tighten property exemption provisions; relax ceiling and
uniformity requirements as to local property tax levies;
develop more adequate supervision of property tax admin
istration.
In collaboration with municipalities, refrain from demand
ing unreasonable war time aid from the Federal Government,
thus recognizing the importance of local independence.
Apply surplus revenues, where possible, to the elimination
of debt and the development of a reserve against war time
loss of revenue and post-war need for public works.,
When revenuès will permit, allow Federal income taxes as a
deduction in calculating State income taxes.
7
Redouble attack on trade barriers, multiple taxation, and
special inducements for the location of industry; use of ed
ucation, reciprocal agreements, and interstate compacts to
ward these ends; pass legislation allowing credit to new
residents for automobile license taxes paid in the same year
to other States*
Collaborate with the Federal Government looking toward Fed*
eral arbitration of jurisdictional disputes and joint deter*
mination and promotion of uniform practices in income and
business taxation especially with regard to questions of
jurisdiction*
Further collaborate with the Federal Government in the
joint administration of overlapping taxes*
Adopt legislation on their own initiative that would make
payment of Federal automobile use tax a condition for the
receipt of a State license.
Mitigate the rotten borough system by providing more ade
quate representation for cities in State legislatures*
Give more consideration to cities in the distribution of
shared taxes, particularly motor vehicle taxes.
Adopt enabling legislation that would permit cities to sup
plement the general property tax with a rental tax on oc
cupiers.
Adopt enabling legislation that would facilitate surplus
financing during war time.
Adopt legislation requiring more adequate and more uniform ,
governmental accounting and reporting.
Cultivate an attitude that regards all governmehts as part
ners in a joint enterprise.
Collaborate with the Federal Government on a broader and
more generous program of Federal aids, accepting controls,
but insisting that they be cooperatively applied rather
than dictated*
Action by Municipal Governmentsi
f 4Negotiate
with Federal representatives and collaborate ia
the development of a Federal-State Fiscal Authority*
- 8 ■A
*.SA
Negotiate with federal, officials and Congress to inaugurate
a program for the elimination of tax-exempt securities that
will not fiscally embarrass States and municipalities»
In collaboration with States, refrain from demanding un
reasonable war time aid from the federal Government, thus
recognizing the importance of local independence*
Apply surplus revenues, where possible, to the elimination
of debt and the development of a reserve against war time
loss of revenue and post-war need for public works*
Broaden the property tax program by supplementing the
property tax with a rental tax on occupiers*
Strictly interpret property tax exemptions*
. | l|jj- I Inaugurate a thoroughgoing study of possible new sources
of independent local revenue*
Demand more equitable representation in State legislatures*
Demand more equitable distribution of shared revenues, par
ticularly motor vehicle taxes.
Provide for more adequate governmental accounting and re
porting*
Cultivate an attitude vrhich regards all governments as
partners in a joint enterprise.
Collaborate with the Federal Government on a broader and
more generous program of Federal aids, accepting controls,
but insisting that they be cooperatively applied rather
than dictated*
- 0O0-
TREASURY DEPARTMENT
Washington
(The following address "by John Xr* Sullivan, Assistant
Secretary of the Treasury, at the Portsmouth Navy Yard,
Portsmouth, New Hampshire, is scheduled for delivery at
1«30 P*M». Monday, March 39, 1943f and is for release
at that time«)
I am sure that you folks here today can appreciate how very, very
happy I am to "be able to meet with you upon this occasion^ 1 It is
always a joy for a New Hampshire man to return here and to meet again
with his old friends from Maine and New Hampshire. But today I have
the unique privilege of representing two personal friends who are
among the outstanding members of oun Q-overnment in its fight for the
survival of Democracy — - two men who, each in his own way, is doing
so much to speed the day ''of v i c t o r y t h e Secretary of the Treasury,
Henry Morgenthau, Jr,, and the Secretary of the Navy, Prank Knox.
Moreover, as an official of the Treasury Department I have wanted for
a long while to face some Navy people and tell them of the grand job
they are doing on.their War Bond campaign» You are doing a grand job,
Navy, a job of which we at the Treasury are mighty proud*
Navy*s War Bond sales record of $104,000,000 in 1942 led all other
Government departments* Navy pioneered the payroll savings plan in i
the Pederal service, and your original goal of 1,90*»10#
at least
90 percent of employees investing more than 10 percent of payrolls in
bonds -*-? has been attained and surpassed*
I borrow a commendatory term of the Navy itself when | deliver to
you workers of the Portsmouth Navy Yard, as representatives of the entire
Navy, a richly^deserved ^Well Done!* All of the 475,000 civilian
workers of the Navy who are participating in the War Bond program through
the payroll savings plan
who are investing a portion of their earnings regularly so that the war may be financed
deserve that praise*
I have seen here today men in uniform, men and women in working
clothes, other men and women attired for office duties* But whatever
your uniform, all of you are a part of the Navy* Whether on a battle
front half way around the world, or engaged in production here in the
Portsmouth Yard, or working in a Navy office, you are all engaged in a
common undertaking
defeat, utter defeat
for a deadly and treacherous
enemy — and glorious victory for America!
35-88
■2'
Never forget, and never doubt, you men and women of Portsmouth, that
the battle of production is just as important as any other battle.
A breakdown in production mivht bring defeat to our forces 10,000 miles
away — a speedup in production is certain to speed the day of victory.
Without the ships, the guns, the tanks and the planes that"American
labor is producing, our men who serve them would be helpless.
I think that this ceremony here today bears testimony to the fact
that the Commandant and the personnel of this Portsmouth Navy Yard
appreciate the urgency of maximum production, and I want to congratulate
Admiral Withers, upon the realistic arrangements he has made for this
occasion* No more fitting observance of this award can be imagined than
that it should be conducted as it is conducted today without stopping for
one moment the production of this great Yard*
The submarines that you build here are the means by which we are
softening the supply lines of the enemy
choking off his replacements,
his food, his^ammunition — softening him for the final blow. The ships
that you repair, whose battle wounds you heal, return to all the oceans
of the world to do battle for us once again* Truly, yours is a great
and highly important part in this war*
You have not only a great and important part to play — * but here
at Portsmouth you have a glorious Navy tradition to emulate. In all
our nation, no Navy Yard is so rich in its history of great men, and
great ships, and great events* From the very beginning of our nation,
Portsmouth has contributed to making our country free and keeping it free#
In this very harbor General John Sullivan, in capturing Fort William
and Mary, committed the first overt act of the Revolution that made the
United States a free nation, Here, 167 years ago the frigate Raleigh
was built. Here in 1777 John Paul Jones took command'of the Ranger
and hoisted the first American flag to fly over an American warship.
In this southeast corner of New Hampshire nineteen days before
the 4-th day of July 1776, New Hampshire declared its independence of
Britain, Here too, New Hampshire adopted the first constitutional form
of civil government, again serving as a model for the other colonies
and for this new nation. Through the years and through many wars
the names bf various ships are iinked with Portsmouth.’ Admiral Farragutfs
flagship tne Franklin was built here* The Constitution
and the Kearserge were no strangers to these waters. It was at this
Yard that the defeated Spanish admiral arid the men of his destroyed
fleet were landed* It was here at Portsmouth that the delegates of
Russia^and Japan met to draft a peace treaty. Surely yours is a great
tradition and it is altogether fitting and proper that at this historic
- 3 -
place you men and women should be making one of the more effective
weapons that will result in another Japanese peace treaty, but one
which this time will be dictated strictly in accordance with American
terms,
•
The loyalty, determination and enthusiasm with which you have
tackled your production jobs has been duplicated in your acceotance of
and support of the War Bond program, which is another vitally important
phase of America’s war effort.
In this, you are not only giving much needed assistance to your
Government in the financing of the war, but you also are helping your
selves. You are making one of the soundest of investments, and you are
building for yourselves savings accounts that will guarantee your own
personal security after the war is won.
You of Portsmouth should take special pride in the bond record you
have established, because this Navy Yard was a ’’charter member” of the
program. Your Bond sales organization got under full steam in October
194-1, the.month the campaign was launched*
Since that time, employees of Portsmouth have invested the magnifi
cent sum of $4,099,000 in War Bonds. That sum is growing fast, in fact
at such speed that now in March of 1943 your Bond purchase rate is nearly
twice as high as it was just a few months ago in the latter part of 1942*
In employee participation, Portsmouth now is the top navy yard of
the nation, with 96 percent of all workers enrolled on the payroll
plan. The 12.1 percent of payroll that you are investing monthly in
bonds puts you well up among the leaders on that score also, Fine
work, Portsmouth, But where are those other 4 percent? Let’s see
you make it 100 percent within the next month.
By maintaining a standard of employee and payroll participation
higher than the minimum standard of ”90-10” for two successive months,
January and February, you have qualified for the Secretary of the Navy’s
War Bond honor flag, and you are entitled to fly it as long as you
maintain those percentages.
As a Treasury official, I should also like to compliment the
employees of Portsmouth Navy Yard on the extremely.low record of redemptto* of'-Bondw, Records for December indicate that Portsmouth cashed
in less than 1 percent of the number of bopds issued in that month — a
percentage well below the national average.
That fact Indicates conclusively that you people are really using
your bonds to create a nest egg for the post-war period, and.that you
are determined not to cash them short of dire necessity or real emergency.
- 4 -
It has been a long hard fight for you to win the Secretary’s flag
for the honor purposely was made difficult to attain, And while as
it flies above the lard, it will be a sign of oast achievement, ]Ut it
also be a challenge to still greater effort in the future.
Credit for the award that you are receiving today is difficult to
assign, because all of you are entitled to a share. But certainly the
flag could not have been won without the keen interest and, active
support of Mmiral Withers and other officers of the lard
without '
months of hard work on the part of Captain Hunt and the members of the
ommandant’s bond committee **-*• without the complete backing and help
of department heads, shop masters and key civilian emoloyees — and
finally and most important — without the loyal and generous coooeration of more than 19,000 employees of Portsmouth N a w Yard who ar*
buying bonds through the payroll savings plan.
Admiral Withers, in behalf of the Seorbtary of the Navy, and with
the sincere personal congratulations of the Secretary of the Treasury
I take great pride in presenting to you, to the Postsmouth Yard and to
its employees the Secretary of the Navy’s War Bond Honor Flag, Fly this
lag proudly as visible evidence of your record, as convincing oroef
that Portsmouth is doing more than its share. To all the employees of
is lard who made this award possible I extend the hearty thanks of
your Navy, your Treasury and your Nation,.
, ■}!" ii“ ■if
- l i
the nest-egg -which -will enable them to buy ,a new home after the war,
to put their children through school, or to provide that contentment
in later years that can come only from a sense of personal financial
security. At the Treasury, we are proud not only of the way the
American people are purchasing these Bonds but are also proud and
gratified at the way they are holding onto them.
On April 12th, the Second War Loan starts. The goal in this
drive is $13 billion — the biggest single peice of financing in
the world’s history. Of this $13 billion, the Treasury hopes and
expects to raise $8 billion from non-banking investors. This campaign
should represent the biggest
sales campaign this
country has ever experienced. There will be types of Federal securities
tailored to meet the needs of every type of investor. There will be
300,000
and thousands of pages of sponsored advertising.
I hope that during this campaign every citizen in America and every
business concern will take advantage of this opportunity to join
with their fellow Americans in helping to finance this war.
X submit to you that the conduct of the American people in the
field of both taxes and Bonds should make us proud, of the land in
which we live and proud of our fellow citizens. Taxes and War Bonds.
They represent a small price to pay for freedom of speech, freedom
of worship, freedom from want, and freedom from fear. Taxes proudly
paid and War Bonds bought without the argument- of a gun at the head
or a bayonet at the back. This is the war financing of a democracy
at work — the American people proudly, happily, ungrudgingly paying
for the high privilege-of being free and of being Americans.
-
10
Granted that this be done, I believe there is nothing the American
people in their turn will not do to speed the day of victory»
I hope no one interprets my remarks as indicating that the
Treasury is convinced that everyone who was legally obliged to file
a return did so* We know that they didn’t» We know that we will
catch up with that very small group — and soon.
To those few who
because of procrastination, or indieision, or the temptation to try
to get away with something failed to file their returns, I would like to
give a word of friendly advice. They should get that return in NOT.
We’ll find them sooner or later» That’s our business. And the sooner
they get their returns in, the better off they will be, even now»
There is one field apart from taxation in which the American
people are likewise making an inspiring record.
I refer to the
voluntary purchase of War Bonds, which is now going on at*a scale
unprecedented in this or any other land. Right today there are almost
26 million people who are setting aside, out of their payroll for the
direct purchase of War Bonds, almost 9 per cent of their pay* Almost
50 million people in this country are buying War Bonds under one method
or another» Furthermore, the great bulk of these people are purchasing
these Bonds for good.
They are holding onto them not only because they
know it is harmful to the war effort for them to redeem these Bonds, but
because they have faith in this country’s future* They know that these
Bonds are the safest, finest investment in the world
that the Bonds that they purchase are not only an anchor to windward
against whatever rainy days are ahead of -us, but that these Bonds are
quarter of this year income and excess profits taxes in the sum
as against $3,218,000,000
of $4»633,000,000, /for the same period last year. I can tell you
that we believe that more than 40 million people filed returns.
I
can tell you that right here in the State of Massachusetts there
-was collected and deposited in the first 20 days of this month
#124,0>45,000 as against $49,000,000 for the comparable period
last year.
Of far greater importance than any of the facts or the figures
1 have given you was the spirit of willingness which characterized
income tax payments this year.
last year.
There was even less complaining than
Nowhere was there any sign of reluctance, nowhere any
visible shirking of responsibility.
The American people who, through
their own Congress, had levied on themselves these heaviest taxes
in our history, stepped up promptly and paid then, proudly.
They did
so because they knew that in this emergency their country needs their
money.
They understand there is no cheap way to vfin the war and that
it is far better and far cheaper to win it than to lose it.
and low, rich and poor, they wanted to hold up their end —
High
to match
in some small degree the sacrifices of the men who are actually
xigating the battles all around tne world.
this month won over the skeptics.
That is the spirit under—
I believe the moral to be learned
from this March experience is that, in this Democracy of ours, the
American people can be counted upon to make any sacrifice that
t is
is rere'
\
*
-
in doubt.
8
-
The percentage of American citizens and American business
men who try to chisel on Uncle Sam is gratifyingly low.
Before leaving the subject of income taxes, I would like to
extend to the press, the radio, and the motion picture and outdoor
advertising industries the appreciation and gratitude of the
Treasury Department for the assistance they gave us in advising
the American people that returns would have to be filed and quarterly
payments have to be made on March 15th,
tribute to the
I would like also to pay
cooperative spirit of the Congress.
Yfithout thought
of partisanship, the Senate Finance Committee, consisting of
14
Democrats, 6 Republicans and one Independent, and the House Ways
and Means Committee, consisting
of 15 Democrats and 10 Republicans,
unanimously passed a resolution warning the people of America that
no bill then under consideration by the Congress would change or
postpone any taxpayer1s obligation to file a return and make the
first payment.
Here, truly, was an example of Democracy facing a
crisis and meeting it efficiently and promptly.
I am sorry that
because of the unprecedented flood of returns which have not yet
been completely tabulated it is impossible for me today to give you
a complete report on the amount of money paid in this first quarter
or the total number of people who paid those returns.
some time before the final figures are available/
It will be
I can tell you,
however, that at the close of business on March 25, 1943, there had
been deposited with the Federal Reserve Banks during the first
v"
information return, and through Social Security records, we have
\
'
.
»
S
'
ways and means of checking almost everyone ■who w ae* liable to pay
an income tax.
And we do check them.
For the year 1940, a check
/
of the information returns and the follow-up of the delinquents
showed that of the total number who filed taxable returns an
■ 521
\
\
m
r*
additional 1 percent had been delinquent, and the taxes owed by
that additional 1 percent amounted to less than 1/10 of 1 percent
of the total amount collected.
I believe these figures should convince you of one outstanding
fact which has long been apparent to all of those engaged in the
collection of taxes:
that 99—9/10 of the American people are
thoroughly honest with their Government and are willing and anxious
to pay their share.
So much of the publicity about income taxes
is devoted to the A1 Capones and the Nucky Johnsons that the
public itself is apt to overlook the essential honesty of the
American citizen and the average American businessman.
from one who has had an opportunity to know:
Take it
The American people
not only discharge their income tax liabilities promptly and honestly,
but they give their .Government the benefit of'the break when they are
-
6
—
Lately there has been a great deal of talk about the amount of
individual income taxes that have been uncollectible.
This talk has
grown to such proportion that I think I should give you a report on
the actual amount of taxes that have been formally abated over the
last 22 fiscal years from 1921 through 1942, inclusive.
In weighing
these figures, you will consider, I am sure, that the tax rates in
those 22 years were very much lower than they are now.
I would
suggest that you also consider that that 22-year period included two
depressions.
During the last two months, many people have told me
ji |
if jljf |
new income tax payers,
Insert K
If ve compare the rate of tax abatement year by
year since 1940 a highly significant fact appears^<*■
$t the very time when the number of individuals
filing tax returns was increasing by leaps and bounds
tne rate of tax abatement actually declined/
¡I we failed to collect
¡¡rho was not astonished
le Federal Government
|053,345,361.
ibated as uncollectible
average of $12,637,470.
fy one year represents
taxes that became due one or two or three years before the year of
formal abatement.
while the number of individual tax filers increased from less than
8 million in 1940 to almost 15 million in 1941 and to almost 26j£million
in 1942, the amount abated in 1941'was slightly in excess of $7,000,000
(0.5$ of the amount collected), and the amount abated in 1942 was
____
just under $10,000,000 (0.3% of the amount collected).. Judge these
in comparison with the yearly average of more than $12,637,470.
^~But someone may ask, ”How about the people who filed no
/
returns at all?” My answer to them is that through,Form 1099, the
<0
Lately there has been a great deal of talk about the amount of
individual income taxes that have been uncollectible.
This talk has
grown to such proportion that I think I should give you a report on
the actual amount of taxes that have been formally abated over the
last 22 fiscal years from 1921 through 1942, inclusive.
In weighing
these figures, you will consider, I am sure, that the tax rates in
those 22 years were very much lower than they are now. I would
suggest that you also consider that that 22-year period included two
depressions.
During the last two months, many people have told me
how difficult it would be to collect taxes from nevi income tax payers.
I have asked many of them how much they thought we failed to collect
in the average year, and I have never met one who was not astonished
at the actual figures.
Here they are:
In the 22 years from 1921 through 1942, the Federal Government
collected in income taxes from individuals $22,053>345,361»
During those same years we have formally abated as uncollectible
the total amount of $273,024,325, —
a yearly average of $12,637,470.
You must remember that the amount abated in any one year represents
taxes that became due one or two or three years before the year of
I
i
formal abatement^ Novortholegypirt■
while the number of individual tax filers increased from less than
8 million in 1940 to almost 15 million in 1941 and to alme-ot 26j£million
in 1942, the amount abated in 1941’was slightly in excess of $7,000,000
(0.5$ of the amount collected), and the amount abated in 1942 was
¡ust under $10,000,000 (0.3% of the amount collected).. Judge these
in comparison with the yearly average of more than $12,637,470.
But someone may ask, 11How about the people who filed no
returns at all?11 My answer to them is that through,Form 1099> the
___
_
p,
—
the Federal Income Tax payers are an exclusive group nor that the
great bulk of the American people are not contributing liberally to
the support of their Government and the financing of the war.
There
are some other facts about this development of the Federal Income Tax
that may be of interest to you.
Ten years ago, in the fiscal year 1933,
while we were collecting $747 million from 2 million individual and
corporate taxpayers, the Bureau of Internal Revenue had a total of
11,500 employees.
This year when we hope to collect 17-1/2 billions
from more than 40 million taxpayers, the Bureau personnel is only
34,000. vvs-CAJL
o
’ iX jl
|
--------- ---__________________ __________________
I ^
1
V
welir aware that in every weil-conaucted~TU"sinelT=unit= costs
decrease as production mounts.
tion of Federal taxes.
This has been the case in the collec
During the first two months of this year, a
vicious rumor was circulated in certain parts of this country that
the costs of collection of Federal taxes were fantastic.
Because
of that, rumor and because of a general feeling that collection costs
are in fact, high, I would like to tell you just how much it has cost
tne Treasury to collect your tax dollars.
In the fiscal year 1940,
it cost us $1.12 for every $100 we collected.
89 cents for every $100 collected.
In the fiscal year 1941,
Last year, the cost of collection
was 57 cents for every $100, and in the year which closes June 30,
1943, we expect the xinal analysis will show that for every $100
collected we will have spent less than 50 cents to collect it.
Let
this figure be the answer to all who talk of Federal inefficiency and
extravagance in the collection of the Federal revenues.
Jjl
to file a return and pay their quarterly installment, they did so
in a manner that was heartening and inspiring.
I believe that when the history of this war is written, one of
the facts that will amaze and mystify not only the peoples but the
leaders of our enemies and allies alike is the degree to -which all
people of America have helped our Government finance this war.
I
predict to you today that during this war more American people,
through taxes willingly paid and through Bonds voluntarily purchased,
■will have participated in financing this war more completely than
any other people in any land in history.
I would like to give you a few facts and figures demonstrating
the growth and popularization of the Federal Income Tax as an
instrument in supporting the Federal Government.
the
Ten years ago, in
fiscal year 1933, total individual income tax collections yielded
$352,573,000.
That year 3,723,558 people filed a return.
Never until
1940 did we receive as many as 8 million individual income tax returns.
In 1941, more than 15 million individuals filed returns.
26-1/2 million'people filed income tax returns.
In 1942,
This year, more than
40 million people have filed income tax returns.
The revenue received from corporate and individual tax returns
10 years ago in the fiscal year 1933 amounted to $74-6,791,000.
In the
fiscal year 1940, they yielded $2,121,000,000; in 1941,13,462,000,000;
in
1942, $8,002,000,000/
and for the current fiscal year, we estimate
they will yield $17,567,000,000.
Surely no one can now charge that
- 3 -
fortnight they attested their faith and love of their country by
•willingly and gladly pouring into their Federal Treasury the greatest
flood of income taxes in the history of this or any other nation.
There was a sweep and vastness about it that no one could
mistake.
It was as if these millions of Americans were saying,
“we’-re in this, too.
This is our country and our war.
can’t battle in the front line with the fighting men.
Maybe weBut we want
them to know that we can.and do stand here shoulder to shoulder
with them —
helping the best we can, serving with our hands and
our hearts and our dollars.”
A year ago when our entire land was blazing in the first white
heat of war, and raging, mad at the treachery of Pearl Harbor —
ago such a demonstration was to be expected.
/
But this ye< i
first flush of excitement had gone, the war had settled down to a
deadly unglamorous matter of every-day routine.
The entire question
of taxes was complicated and confused as never before by a series
of proposals which contemplated the present or future forgiveness
of taxes.
I douot if ever before any group of taxpayers faced such
confusion or would have had a better excuse for failing in their
responsibilities.
Yet the American people with that same under
standing and unity that is so surprising to the people of other
nations realized how their government needed money to finance this
war.
And when the word finally got through to them that despite
any proposal pending in the Congress it was their duty as citizens
-
2
-
not fight, that democracy cannot survive in a regimented world of
so-called supermen.
That challenge we are answering now with growing power and
confidence.
We are answering it in the Solomons, in Tunisia, in
the Bismarck Sea, in the sky and on the land, and on the seven
seas.
We are answering it right here at home in the raising and
training of a great army, in the building of a mighty fleet of
ships to transport that army, in production of war goods on a
scale so vast that our enemies actually do not believe us when
we tell them the true figures.
Now today I would like' to tell you about still another of those
victories of democracy light here on the home front —
one of the inspiring events in our 15 months of war.
to my mind
I am going to
tell you a few simple facts which make me more certain than ever
of the invincible greatness of our country; and I think they will
make you a little bit.prouder of these United States of America.
I want to tell you a few solid truths that speak louder than
words of the morale here on the home, front —
facts which prove
that in spite of bickerings and crabbings and recriminations and
second guessings, the American people are in complete and active
partnership with their government to win this war.
In the first two weeks of March the American people gave a
tremendous, overwhelming proof of unity and loyalty.
During that
Draft of Speech for Mr. Sullivan
Boston
Advertising
----------------Club March 30th/
Perhaps it is only natural that in wartime there should be a
surplus of gloom in circulation.
disorder.
Headlines wail of dissension and
The papers are full of things left undone which ought
to have been done, and things done which ought not to have been
done.
The radio is loud with querulous scolding voices.
And many
speakers feel the urge to don sack-cloth and ashes and view with
alarm.
W H
Probably a certain amount of this is good for us.
abuses that need to have the light turned on them.
There are
There are errors
of omission and commission which need publicity before they can be
corrected.
Complacency and over-confidence are dangers which do
need combatting.
But for all that, there is one glorious fact that
far outshines the troubles that fret us, and the delays and mistakes
that properly make us impatient:
That is the unmistakable truth, which grows clearer each month
and week, that DEMOCRACY IS EFFECTIVE in war as in peace.
For day by day it becomes more surely apparent that a free
people planning their own plans, making up their own minds, taking
their own decisions and putting them into effect by their own
methods, will make fewer mistakes and get surer results than any
Fuehrersnr Daces or self-appointed dictator leaders under any name.
In 1943 we are successfully answering the slave-world's sneering
hallenge that democracy is decadent, that democracy cannot and will
II____
«BBH
TREASURY DEPARTMENT
Washington
(The following address by John 1, Sullivan, Assistant Secretary of
the Treasury, before the Boston Advertising Club, Boston«
Massachusetts, is scheduled for delivery at 12:30 P, M,, Easter^.
War Tjmet Tuesday, March 30r 1943. and is for release at that
Perhaps it is only natural that in wartime there should he a
surplus of gloom in circulation,
disorder.
Headlines wail of dissension and
The papers are full of things left undone which ought
to have been done, and things done which ou$it not to have been
done.
The radio is loud with querulous scolding voices,
Aud many
speakers feel the urge to don sack-cloth and ashes and view with
alarm.
Probably a certain amount of this is good for us. There are
abuses that need to have the light turned on therar There are errors
of omission and commission which need publicity before they can be
corrected, Complacency and over-confidence are dangers which do
need combatting, But for all that, there is one glorious fact that
far outshines the troubles that fret us, and the delays and mistakes
that properly make us impatient*
That is the unmistakable truth, which grows clearer each month
and week, that DEMOCRACY IS EFFECTIVE in war as. ¿n oeacp.
For day by day it becomes more surely apparent that a free
people planning their own plans, making up their own minds, taking
their own decisions and putting them into effect by their own
methods, will make fewer mistakes and got surer results than any
Fuehrers or Duces or self-appointed dictator leaders under any name,
35**89
- 2 -
In 194-3 we are successfully answering the slave-wo rid ’s sneering
challenge that democracy is decadent, that democracy cannot and will
not fight, that democracy cannot survive in a regimented world of
so-called supermen,
That challenge we are answering now with growing power and
confidence, Ue are answering it in the Solomons, in Tunisia, in
the Bismarck Sea, in the sky and on the land^ and on the. seven
seas.
Vie are answering it right here at home in
training of a great army, in the building of a
ships to transport that-army, in production of
scale so vast that our enemies actually do not
we tell them the true figures,
the raising and
mighty fleet of
war goods on a
believe us when
Nov/ today I would like to tell you about still another of those
victories of democracy right here on the home front — to my mind
one of the inspiring events in our 15 months of war, I am going to
tell you a few simple facts which make me more certain than ever
of the invincible greatness of cur country; and I think they will
make you a little bit prouder of these United States of America,
I want to tell you a few solid truths that speak louder than
v/ords of the morale here on the home front — facts which' prove
that in spite of bickerings and crabbings and recriminations and
second guessings, the American people are in complete and active
partnership with their government to win this war.
In the first two weeks of March the 'American neople gave a
tremendous, overwhelming proof of unity and loyalty. During that
fortnight they attested their faith and love of their country by
willingly and gladly pouring into their Federal Treasury the greatest
flood of income taxes in the history of this or any other nation.
There was a sweep and vastness about it that no one could
mistake. It was as if these millions of Americans were saying,
"We’re in this, too. This is our country and our war. Maybe we
can’t battle in the front line with the fighting men? But we want
them to know that we can and do stand here shoulder to shoulder
with them — » helping the best we can, serving with our hands and
our hearts and our dollars ,t?
A year ago when our entire land was blazing in the first white
heat of war, and raging mad at the treachery of Pearl Harbor — a
~ 3 -1
year ago such a demonstration 7ms to be expected. But this year, the
first flush of excitement had gone, the war had settled down to a
deadly ungiamorous matter of every-day routine. The entire question
of taxes 7ms complicated and confused as never before by a series
of proposals which contemplated the present or future forgiveness
of taxes, I doubt if ever before any group of taxpayers faced such
confusion or would have had a better excuse for failing in their
responsibilities, let the American people with that same under
standing and unity that is so surprising to the people of other
nations realized how their government needed money to finance this
war. And when the word finally got through to them that despite
any proposal pending in the Congress it was their duty as citizens
to file a return and pay their quarterly installment/ they did so
in a manner that was heartening and inspiring,
1 believe that when the history of this war is written,, one of
the facts that will amaze and mystify not only the peoples but the
leaders of our enemies and allies alike is the degree to which all
people of America have helped our Government finance this war, I
predict to you today that during this war more American people,
through taxes -willingly paid and through Bonds voluntarily purchased,
will have participated in financing this -'Tar more completely than
any other people in any land in history,
I would like to give you a few facts and figures demonstrating
the growth and popularization of the Federal Income Tax as an
instrument in supporting the Federal Government, Ten years ago. in
the fiscal year 1933, total individual income tax collections yielded
$352,573*000, That year 3,723,550 people filed a return. Never until
1940 did }ve receive as many as 8 million individual income tax returns.
In 1941, more than 15 million individuals filed returns. In 1942,
26-1/2 million people filed income tax returns. This year, more than
40 million people have filed income tax returns.
The revenue received from corporate, and individual tax returns
10 years ago in the fiscal year 1933 amounted to $746,791,000, In the
fiscal year 1940, they yielded $2,121,000,000,* in 194X, $3,462,000,000$
in 1942, $8,002,000,000, and for the current fiscal year, we estimate
they will -meld $17,567,000,000. Surely no one can now charge that
the Federal Income Tax payers are an exclusive group nor that the
great bulk of the American people are not contributing liberally to
the support of their Government and the financing of the war. There
are some other facts about this development of the Federal Income Tax
that may be of interest to you. Ten years ago, in the fiscal year 1933,
vdiile we were collecting $747 million from 2 million individual and
corporate taxpayers, the Bureau of Internal Revenue had. a total of
il,500 employees. This year when we hope to collect 17-1/2 billions
from more than 40 million taxpayers, the Bureau personnel is only
34,000, Thus while collections increased 23 times and the number of
returns increased 20 times the Bureau personnel increased only 3 times.
- 4 -
X am well aware that in every well-conducted business unit costs
decrease as production mounts« This has been the case in the col
lection of Federal taxes. During the first two months of this year,
a vicious rumor was circulated in certain parts of this country.that
the costs of collection of Federal taxes were fantastic* Because
of that rumor and because of a general feeling that collection costs
are in fact high, X would like to tell you just how much it has cost
the Treasury to collect your tax dollars. In the fiscal year 1940,
it cost us $1*12 for every $100 we collected. In the fiscal year
1941, 89 cents for every $100 collected* Last year, the cost of
collection was 57 cents for eyery $100, and in the year which
closes June 30, 1943, we expect the final analysis will show that
for every $100 collected we will have spent less than 50 cents to
collect it. Let this figure be the answer to all who talk of Fed
eral inefficiency and extravagance in the collection of the Federal
revenues*
Lately there has been a great deal of talk about the amount of
individual income taxes that have been1uncollectible. This talk has
grown to such proportion that X think I should give you a report on
the actual amount of taxes that have been formally abated over the
last 22 fiscal years from 1921 through 1942, inclusive* In weighing
these figures, you will consider, I am sure, that the tax rates in
those 22 years were very much lower than they are now. I would
suggest that you also consider that that 22-year period included two .
depressions, During the la„st two months, many people have told me
how difficult it would be to collect taxes from new income tax
payers. I have asked many of them how much they thought we failed
to collect in the average year, and I have never met one who was not
astonished at the actual, figures. Here they rare*
In the 22 years from 1921 through 1942, the Federal Grovernment
collected in income taxes from' individuals $22,053,845,361,
During those sc
?me years we have formally abated as uncollectible
the total amount of $278,024,325, — a yearly average of $12,637,470.
You must remember that the amount abated in any one year represents
taxes that became due one or two or three years before the year of
formal abatement* If we compare the ra„te of tax abatement year by
year since 1940 a highly significant fact appears* At the very time
when the number of individuals filing tax returns was increasing by
leaps and bounds the rate of tax abatement actually declined* Here
are the figures? while the number of individual tax filers in
creased from less than 8 million in 1940 to almost 15 million in
1941 and to 26 1/2 million in 1942, the amount abated in 1941 was
slightly in excess of $7,000,0Q0 (0*5$ of the amount collected),
and the amount abated in 1942 was just under $10,000,000 (0*3$ of
the amount collected), Judge these in comparison with the yearly
average of more than $12,637,470*
5r
;-
But someone may ask, nHow about the people who filed no
returns at all?” Hy answer to them is that through Form 1099» the
information return, and through Social Security records, we have
ways and means of checking almost everyone who is liable to pay
an income tax-. And we d© check them» For the year 19^+0» .a check
of the information returns and the follow-up of the delinquents
showed ^that of the total number who filed taxable returns an
additional 1 percent had been delinquent, and the taxes owed by
that additional 1 percent amounted to less than l/lO of 1 percent
of the total amount collected*
I believe these figures should convince you of one outstanding
fact which has long been apparent to all of those engaged in the
collection of taxes; that 99*^9/10 of the ^American people are
thoroughly honest with their Government and are willing and anxious
to pay their share. So much of the publicity about income taxes
is devoted to the Al Capones and the Wucky Johnsons that the
public itself is apt to overlook thè essential hohes^y of the
American citizen and the averàge ifleficaA businessman* Take it
from one who has had ap opportunità' to khOWt The Jynerican people
not only discharge their income tax liabilities prdmptly and honestly,
but they give their Government the beHefit Of the break when they are
in doubt. The percentage of Ameridah citizens and American business
men who try to chisel on Uncle Sam Is gratifyingly low.
Before leaving the subject of income taxes, X would like to
extend to the press, the radio, and the motion picture and outdoor
advertising industries the appreciation and gratitude of the
Treasury Department for the assistance they gave us in advising
the American people that returns would have to-be filed and quarterly
payments have to be made on March l^th. X would like also to paytribute to the cooperative spirit of the Congress. Without thought >
of partisanship, the Senate Finance Committee, consisting ,p.f_Xb— ~—
Democrats, 6 Republicans and one *Iad5iq©ends»rt-i----and the House Ways
and Means Committee, consisting of 15 Democrats and 10 Republicans,
unanimously passed a resolution warning the people of America that
no bill then under consideration by the Congress would change or
postpone any taxpayer’s obligation to file a return and make the
first payment. Here, truly, Was an example of Democracy facing a
crisis and meeting it efficiently and promptly. X am sorry that
because of the unprecedented flood of returns which have not yet
been completely tabulated it is impossible for me today to give you
a complete report on the amount of money paid in this first quarter
or the total number of people vrho p&id those returns. It will be
some time before the final figures are available, X can tell yoti,
however, that at the close of business on March 25» 19^2» there had
been deposited with the Federal Reserve Banks during the first
6
-
quarter of this year income and excess profits taxes in the sum
of $4,633,000,000, as against $3,3X8,000,000 for the same period
last year, I can tell you that we believe that more than 40 mil
lion people filed returns, I can tell you that right here in the
State of Massachusetts there was collected and deposited in the
first 20 days of this month $124,000,000 as against $49,000,000 for
the comparable period last year,
Of far greater importance than any of the facts or the figures
; have given you was the spirit of willingness which characterised
income tax payments this year, There was even less complaining
than last year. Nowhere was there any sign of reluctance, nowhere
any visible shirking of responsibility. The .American people who,
through their own Congress, had levied on themselves these heaviest
taxes in our history, stepped Up promptly and paid them proudly,
hey did so because they knew that in this emergency their country
needs their money. They understand the^e is no cheap way to win the
war and that it is far better and far cheaper to win it than to lose
it. High and low, rich and poor, they wanted to hold up their end to match in some small degree the sacrifices of the men who are
actually fighting the battles all around the world, That is the
spirit underlying this decisive silent victory whichthe whole Amer
ican people this month won over the skeptics,
I believe the moral
to be learned from this March experience is that, in this Democracy
of ours, the American people can be counted upon to make any sacri
fice that is required, They ask only that the necessity of this
sacrifice be explained. Granted that this be done, I believe there
is nothing the American people in their turn will not do to speed
the day of victory*
I hope no one interprets my remarks as indicating that the
Treasury is convinced that everyone who was legally obliged to file
a return did so, We know that they didn’t* We know that we will
catch up with that very small group -r- and soon. To those few who
because of procrastination, or indecision, or the temptation to try
to get away with something failed to file their returns, X would
like to give a word of friendly advice. They should get that re
turn in NOW. We’ll find them sooner or later. That’s our business.
And the sooner they get their returns in, the better off they will
be, even now.
There is one field apart from taxation in which the American
people are likewise making an inspiring record, I refer to the
voluntary purcha.se of War Bonds, which is now going on at a scale
unprecedented in this or any other land. Right today there are al
most 26 million people who are setting aside, out of their payroll
for the direct purchase of War Bonds, almost 9 percent of their pay.
Almost 50 million people in this country are buying War Bonds under
one method or another, Furthermore, the great bulk of these people
are purchasing these Bonds for good. They are holding onto them not
*
h ~
only because they know it is harmful to the war effort for them to
redeem these Bonds, but because they have faith in this country^
fixture* They know that these Bonds are the safest, finest invest
ment in the world today. They know that the Bonds that they pur
chase are not only an anchor to windward against whatever rainy days
are ahead of us, but that these Bonds are the nest-egg which will
enable them to buy a new home after the war, to put their children
through school, or to provide that contentment in later years that
can come only from a sense of personal financial security. At the
Treasury, we are proud not only of the way the American people are
purchasing these Bonds but are also proud and gratified at the way
they are holding onto them*
On April 12th, the Second War loan starts. The goal in this
drive, is $13 billion
the biggest single piece of financing in
the world*s history. Of this $13 billion, the Treasury hopes and
expects to raise $8 billion from non-banking investors, This cam
paign should represent the biggest securities sales campaign this
country has ever experienced. There will be types of Federal se
curities tailored to meet the needs of every type of investor.
There will be 300,000 volunteer workers and thousands of pages of
sponsored advertising* X hope that during this campaign every
citizen in- America and every business concern will take advantage
of this opportunity to join with their fellow Americans in helping
to finance this war*
I submit to you that the conduct of the American people in the
field of both taxes and Bonds should make us proud of the land in
which we live and proud of oxir fellow citizens, Taxes and War Bonds.
They represent a small price to pay for freedom of speech, freedom
of worship, freedom from want, and freedom from fear. Taxes proudly
paid and War Bonds bought without the argument of a gun at the head
or a bayonet at the back. This is the war financing of a democracy
at work -** the American people proudly, happily, ungrudgingly paying
for the.high privilege of being free and of being Americans*
—oO 0”!"
Secretary Morgenthau announced today that Frank
Ser York, has agreed to a s m
Trtpp
of Elmira,
as C h a i n » * of ^Allied Wewapaper Council la
connection with the sale of treasury bonds*
?ripp# *h© is General Manager of The Gannett newspapers and
Chairman of the Burma« of Advertising of the AiWiPnfT was the unanimous
choice of the publishers and editors who attended a meeting Saturday,
& r e h 20, «4 the Treasury to consider what newspapers might do to help
the Second War Loan Drive starting April 12.
The goal of the drive is 111 b i m e a ^ F which it is intended
«MM/, 07*, 0r*“O
'
that l ^ b i l l i e n will be obtained from non-banking sources.
largest w
It is the
financing campaign in history*
Don Bridge, well-known newspaper advertising executive, formerly
of the Sew York Times and of the Indianapolis lews, has been assigned
b y the Treasury War Finance Committee to work with Hr. Tripp.
Jerome
T* Barnum, former publish«* of the Syracuse Best-Standard, also » m
give his time to the effort, directly representing Mr* Tripp*
o
(ftA^U
\
TREASURY DEPARTMENT
Washington
FOR IMMEDIATE RELEASE,
Monday, March 29, 1943*
Press Service
No, 35-90
Secretary Morgenthau announced today that Prank Tripp
of Elmira, New York, lias agreed to serve as Chairman of <
the Allied Newspaper Council in connection with the sale
of Treasury bonds,
Mr* Tripp, who is General Manager of The Gannett
Newspapers and Chairman of the Bureau of Advertising
of the American Newspaper Publishers Association, was
the unanimous choice of the publishers and editors who
attended a meeting Saturday, March 20, in the Treasury
to consider what newspapers might do to help the Second
War Loan. Drive starting April 12.
The goal of the drive is $13,000,000,000, of which
it is intended that $8,000,000,000 will be obtained from
non-banking sources.
It is the largest war financing
campaign in history.
Don Bridge, well-known newspaper advertising execu
tive, formerly of the New York Times and of the Indian
apolis News, has been assigned by the Treasury War
Finance Committee to work with Mr, Tripp,
Jerome T,
Barnum, former publisher of the Syracuse Post-Standard,
also will give his time to the effort, directly repre
senting Mr, Tripp,
-oOo-
TREASURY DEPARTMENT
Washington
FOR RELEASE, MORNIRC NEWSPAPERS
Press Service
Tuesday, March 30« 1943.
3<r-?/
The Secretary of the Treasury announced last evening that the tenders for 1800,000,00
or thereabouts, of 91-day Treasury bills to be dated March 31 and to mature June 30, 1943
which were offered on March 26, 1943, were opened at the Federal Reserve Banks on March 29
«lìprs fO
ite¿ate
¡redon I
The details of this Issue are as follows:
1larch 2
Total applied for - #1,101,144,000
Total accepted
805,048,000
fhed
Range of accepted bids:
High
Low
Average price
;fileS
- 99*925 Equivalent rate of discount approx* 0.2975& per annum
- 99*905
*
m m
m
n
0.376% *
«
- 99.906
•
■
•
«
n
0.371*% ”
»
Total
Total
Range
Sigh
Low
(66 percent of the amount bid for at the low price was accepted.)
Federal Reserve
District
Total
Applied For
Total
Accepted
Boston
Rew York
Philadelphia
Cleveland
Richmond
Atlanta
Chicago
St. Louis
Minneapolis
Kansas City
Dallas
San Francisco
i
29,541,000
762,519,000
33,795,000
41,00,000
20,310,000
20,660,000
82,670,000
10,813,000
5,908,000
20,603,000
9,665,000
63.220.000
# 26,580,000
502,978,000
26,681,000
34,973,000
17,648,000
19,154,000
73,864,000
10,329,000
5,881,000
19,318,000
9,233,000
58^409.000
$1,101,144,000
$805,048,000
TOTAL
Averag
me
p e re
tel L
istrict
liladelp]
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TREASURY DEPARTMENT
Washington
POR REIEASE, MORNING NEWSPAPERS,
T u e s d a y , M a r c h 30, 1943.
Press
No.
Service
35-91
3/29/43
The Secretary
Renders
to
be
fered
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
f o r 4*800,000,000,
dated March
or t h e r e a b o u t s ,
31 a n d t o m a t u r e
on M a r c h 26,
1943»
were
June
evening that
the
of 9 1 - d a y T r e a s u r y b i l l s
30,
1943»
which were
o p e n e d at t h e F e d e r a l R e s e r v e
of
Banks
on M a r c h 29.
The
details
of t h i s
i s s u e . a r e as
follows?
Total applied for - | l , 101,144,000
Total accepted
805,048,000
Range
of a c c e p t e d
b ids:
High
99*925
low
99.905
"
99*906
”
Equivalent rate
of
discount
approx.
«
«
ft
tt
»
»
ti
tf
Average
price
(66 p e r c e n t
of
the amo u n t
b i d , f o r at t h e
Federal Reserve
District
Total
Applied For
Boston
New York
Philadelphia .
Cleveland
Richmond
Atlanta
Chicago
St. L o u i s
Minneapolis
Kansas City
Dallas
San Francisco
1
0.374% per
annum
accepted.)
Total
Accepted
29 ,541,000
$ 2 6 , 580,000
762,519,000
33.795.000
41.440.000
502,978,000
26,681,000
34.973.000
17.648.000
19.154.000
73.864.000
20 . 310.000
20,660,000
8 2 , 670,000
1 0 , 813,000
5 , 908,000
2 0 , 603,000
9 , 665,-000
63 , 220,000
TOTAL
low p r i c e was
Q.297% per
annum
0.376% per
annum
$1,101,144,000
- 0O 0 -
10.329.000
5,881,000
19.318.000
9,233,000
58.409.000
$805,048,000
tmpetition,
and costs of a d m i n i s t r a t i o n a n d c o m p l i a n c e . . . »These
|-e only a f ew of the m a n y
reasons
f or c o n c e r n about
a. r e v e n u e
system
tiau iis3
.j3 d e v e l o p e d p i e c e m e a l and is l a rgely u n c o o r d i n a t e d . 11
hie c o m m i t t e e
said it h a d s o u g h t a middle g r o u n d in tne
0*
[oordination problem,
Ind
between extremes
of “strong c e n t r a l i z e r s
“those w h o are s a t i s f i e d w i t h what w e h a v e
“E a c h specific p r o b l e m
jrlts,11 the
report added.
function may
|i others,
ty be
has to b e
“In some
c o n s i d e r e d o n its o w n
cases f e d e r a l i z a b i ô n
of
(by a b a l a n c e of the interests) be warranted;
r e t e n t i o n of the 'function b y Spat e s a n d m u n i c i p a l i t i e s
c a l l e d for;
and most
often
joint p a r t i c i p a t i o n ,
in one way
JL another, m ay b e the best s o l u t i o n ..... State s u s p i c i o n that
|iter^gvernmental c o o p e r a t i o n w i l l be
I d i s t illed.
feasible'.
“
F e d e r a l d o m i n a t i o n must
À p r o g r a m of full a n d g e n uine m u t u a l i t y
is e n t i r e l y
✓ V
f!
The scheme
for the
f u n c t i o n i n g of the A u t h o r i t y w&s^i****
in full k e e p i n g w i t h the
# i i c h is that
rel a t i o n s
g e n e r a l t h e m e of the ^committee1s report,
the m a n y p r o b l e m s of
w i l l not he s e t t l e d a ll at once,
study a nd r e a d j u s t m e n t
P O S S IIhilities
D
co oner at ion
for
w i t h the whole
and a h i g h degree
constant
end e a v o r
oi m u t u a l i t y
/
selected
joint a d m i n i s t r a t i o n of. Federal-£>ta ^e
the r ep o rt s aid :
taxes
/
"Admin i s t r a t o r s h a v e
ax administration,
available
¡f
made
some p r o g r e s s
toward coordinated
n o t a b l y in m a k i n g F e d eral
to t he States.
Also
in tne
income t a x information
1 iquor tax field,
State a n d F e d e r a l officials
as
hut r a t h e r that
wil l he necessary,
liw '.'T
Of
i n t e r g o v e r n m e n t a l fiscal
is h i g h l y d e v e l o p e d a nd
p r o v e d m u t u a l l y s a t i s f a c t o r y ...... F e d e r a l - S t a t e
in a d m i n i s t r a t i o n
cannot be improvised,
cooperation
but r e q u i r e s
extensive
i e g o t i a t i o n and prepa r a t i o n . A Federal-State. Fisc a l
admirably
s u ited
oint audits,
for this
a n d joint
role...
collaboration
.Joint
Authority would
Inco m e tax returns,
use of a d m i n i s t r a t i v e p e r s o n n e l
offer
>ossibilities for fu t u r e d e v e l o p m e n t . "
Eventually,
light
the
committee
be g i ven p o w e r
said,
a F e d e r a l - S t a t e F i s c a l Au t h o r i t y
to a d m i n i s t e r some t a x e s in its o w n right.
Of i m p r o v e d c o o p e r a t i o n b e t w e e n the States,
‘Some of the
flight be
gravest p r o b l e m s
said;
in t he f i e l d of irtergovernmental relations
of I n t e r s t a t e
j ——■
cooperation. . . . .A F e d e r a l - S t a t e a g e n c y s h o u l d s u pply the f ac[o/ts n e e d e d
to lift
solv e d if there w e r e
tne r e p o r t
interstate
a sufficient
degree
c o o p e r a t i o n to a much m o r e a c t i v e
and m o r e
Iseful plane •11
The A u t h o r i t y w o u l d attack p r o b l e m s w h ich are
¿he r eport
^ut of
set forth,
with
"real an d urgent",
these p r o blems ‘" g r o w i n g ¡mrtBfc not
the o v e r l a p p i n g t a x system,
b u t also
out
only
of the
Increasing n a t i o n a l
ec o n o m i c i n t e g r a t i o n and interde p e n d e n c e .
i.evelopijient of h u g e
corporations,
only a little
powerful than the States which c h a rter them,
nterstate
trade,
travel,
t e n s i f i e d p r o blems
c o mmunication,
of mu l t i p l e taxation,
The
if at all less
and the growth, of
and migration,
allocation,
have
interstate
3^
6. D i s s e m i n a t e
and'e c o n o m i c
a m o n g the S t a t e s
trends as t h e y a f fect
i n f o r m a t i o n on F e d e r a l taxes
the
States.
7. P r o m o t e b e tter g o v e r n m e n t a l reporting, a c c o u n t i n g
and
statistics.
msjriLaaasa&Mt s u g g e s t e d that the A u t h o r i t y
The c o m m i t t e e
have
three members,
one to b e a p p o i n t e d b y the
be s e l e c t e d b y a c o n f e r e n c e of d e l e g a t e s
and a t h i r d to be
chosen b y the
President,
n a m e d b y State
first two,
the terms
one
u°
Governors,
of offi c e
to be staggered.
S e t t i n g u p of an a d v i s o r y c o u n c i l
also was
r e c o m m e n d e d b y the committee,
S*
the c o u n c i l e x t e n d e d to
organizations
Congressional
of Federal,
State
to
with the A u t h o r i t y
with representation
committees
on
and r e c o g n i z e d
and l o c a l officials.
The report p r o p o s e d an i n i t i a l budget
h a l f to be
for the Authority,
wor k
of $ 1 5 0 , 0 0 0 to # 2 0 0 , 0 0 0
provided b y Congress and half
b y the State
11The
original
number
go
i d e a of a F e d e r a l - S t a t e
FIs cal A u t h o r i t y
» the
"It has b e e n e n d o r s e d by a large
c o m mittee
of o r g a n izations
stated.
and i n d i v i d u a l s . . . .In our
is no t
op i n i o n
far t o w a r d a s s u r i n g tha t c o n t i n u a l p r o g r e s s in this
i n t e r g o v e r n m e n t a l fiscal rel a t i o n s
which,
n e w or
under m o d e r n
it w o uld
f i eld of
conditions,
is b e c o m i n g more and m ore n e c e s s a r y . "
ed out
co:
;he s cheme f or t he
inj^ee'oing w-
orit;
.he m?
rbobli
of in tej&rbvern
relations
rill n o t y be
^usT^nt
in intC«^?overumental
a r r a n g e m e n t s w i l l be
4 <2>
ir e/asury u'epajrtment/
/Vas'.i n g t o n
F O E RELEASE, A L L E D I T I O N S
Thursday, AD rìl 1
1 943 -
A large g a p in'this
he
Pr^¡s b
Ho.
Service
30".
nation's m a c h i n e r y of g overnment
f i l l e d b y a F e d e r a l - S t a t e F i s c a l A u t h o r i t y se r v i n g
between Federal
and State
and o t h e r f i s c a l matters,
has been
i n f o r m e d b y the
off i c i a l s and
Sec r e t a r y
of
agencies
(
could
as m e d i a t o r
on t a x a t i o n
the T r e a s u r y M 0r g e n t h a u
C o m m i t t e e on I n t e r g o v e r n m e n t a l F i s c a l
Relations.
A report
s u b m i t t e d by the
has b e e n t r a n s m i t t e d b y the
committee
after
two years'
work
S e c r e t a r y to P r e s i d e n t R o o s evelt,
to C o n g r e s s i o n a l c o m m i t t e e s d e a l i n g w i t h tsax matters,
a n d - t o the
Governors
the report
of the States.
The S e c r e t a r y
suggested
that
p r o v i d e d a b a s i s for a c t i o n to e nd i n t e r g o v e r n m e n t a l
over taxes
and to improve
all F e d e r a l - S t a t e - l o c a l
conflicts
f i s c a l relations
.|—“***
»the
A n A u t h o r i t y such
in an a d v i s o r y
as the c o m m i t t e e
capacity.
r e c o m m e n d e d w o u l d function
It w o u l d be set
up b y F e d e r a l and State
fl#
.....f
and^ j o i n t l y f i n a n c e d b y Co n g r e s s end the
legislation,
State
A
l e g i s l atures.
these
The c o m m i t t e e
said
it c o uld b e e x p e c t e d . t o p e r f o r m
functions:
1. P r o m o t e
close c o l l a b o r a t i o n b e t w e e n S t a t e
adm in i at r alors,
wi tl
and Federal
joirib administra.tion of
s e l e c t e d o v e r l a p p i n g taxes.
2. F a c i l i t a t e
with existing
legislation,
3. A ct
interstate
agencies,
c o o p e ration;
the A u t h o r i t y
as in t h e l i c e n s i n g
f o r example,
could p r o m o t e reci p r o c i t y
of o u t - o f - 3 t a t e
as a c l e a r i n g hous è for* p r o p o s a l s
p a y ment s i n -lieu-of p r o p e r t y
working
trucks.
r e l ating
ts-xes on - F e d e r a l l y
to Fe d e r a l
o w ned prppérty.
? 4M
5. Create p u b l i c
interest
in i n t e r g o v e r n m e n t a l r e l a t i o n s
A large g a p in 'this n a t i o n 1a m a c h i n e r y of g o v e rnment
be
filled by a Federal-State Fiscal Authority serving
between Federal
and State
and o t h e r f i s c a l matters,
has bee n i n f o r m e d b y the
off i c i a l s and
Sec r e t a r y
of
agencies
could
as m e d i a t o r
on t a x a t i o n
the T r e a s u r y M 0r g e n t h a u
C o m m i t t e e on I n t e r g o v e r n m e n t a l F i s c a l
Heist i o n s .
A report
s u b m i t t e d by the
committee
after
two y e a r s ’ w o r k
has b e e n t r a n s m i t t e d b y the S e c r e t a r y to P r e s i d e n t Roo s e v e l t ,
to C o n g r e s s i o n a l c o m m i t t e e s d e a l i n g w i t h tsax.matters,
and,, to the
Governors
the report
of the States,
The S e c r e t a r y
suggested
that
p r o v i d e d a b a s i s for a c t i o n to e nd i n t e r g o v e r n m e n t a l
A n A u t h o r i t y such
conflicts
as the c o m m i t t e e r e c o m m e n d e d w o u l d function
in an a d v i s o r y capacity. It w o u l d be set up b y F e d e r a l and State
_
legislation, ana j o i n t l y f i n a n c e d b y Co n g r e s s and the State
le g i s l a t u r e s .
these
The ^committee
said
it c o uld b e e x p e c t e d , t o p e r f o r m
functions:
1. P r o m o t e
close c o l l a b o r a t i o n b e t w e e n S t a t e
adm in i gj r a t o r s , with
and Federal
joint a d m i n i s t r a t i o n of
s e l e c t e d o v e r l a p p i n g taxes.
2. F a c i l i t a t e
interstate
w i t h e x i s t i n g agencies,
legislation,
3. A c t
as in t h e
c o o p e ration;
the A u t h o r i t y
licensing
f o r example,
working
could p r o m o t e r e c i p rocity
of o u t - o f - S t a t e
as a c l e a r i n g house for p r o p o s a l s
trucks.
r e l ating
payments.-an -lieu-of p r o p e r t y taxes o n • F e d e r a l l y
to Federal
owned p r p p e r t y ,
45. Create p u b l i c
interest
in i n t e r g o v e r n m e n t a l ,r e l a t i o n s .
TREASURY DEPARTMENT
Washington
FOR RELEASE, ALL EDITIONS
Thursday, Aprii i, X9 U3
3/30/43
r"
■' ; '
Press Service
No. 35-92
A large gap in this nation's machinery of government could he filled
by a Federal-State Fiscal Authority serving as mediator between Federal
and State officials and agencies on taxation and other fiscal matters,
Secretary of the Treasury Morgenthau has been informed by the Committee
on Intergovernmental Fiscal Relations,
A report submitted by the Committee after two years' work has been
transmitted by the Secretary to President Roosevelt, to Congressional'
committees dealing with tax matters, and to the Governors of the States*
The Secretary suggested that the report provided a basis for action to end
intergovernmental conflicts over taxes and to improve all Federal-Statelocal fiscal relations.
An Authority such as the Committee recommended would function in an
advisory capacity. It would be set up by Federal and State legislation,
and be jointly financed by Congress and the State legislatures. The Com
mittee said it could be expected to perform these functions;
1. promote close collaboration between State and Federal adminis^
trators, with a view to facilitating joint administration of selected
overlapping taxes.
2,
Facilitate interstate cooperation^ for enamel©, working with existIng agencies, the Authority could promote reciprocity legislation, as in
the licensing of out-of-State trucks.
^3* Act as a clearing house for proposals relating to Federal paymentsin—Ixeu-of property taxes on Federally owned property.
U.
Investigate such problems as arise from time to time,
5?
Create public interest in intergovernmental relations,
6.
- Disseminate among the States’ information on Federal taxes and
economic trends as they affect the States.
7.
Promote better governmental reporting, accounting and statistics*
The Committee suggested that the Authority have three members, one to
be appointed by the President, one to be selected by a conference of delegates named by State Governors, and a third to be chosen by the first two,
the terms of office to be staggered.
- P
Setting up of an advisory council to work with the Authority also was
recommended by the Committee, with representation on the council extended
to Congressional committees and recognized organizations of Federal State
and local officials,
*
The report proposed an initial budget of $150,000 to $200,000 for
the Authority, half t© be provided by Congress and half by the States
without any «matching« provision,
«The idea of a Federal-State Fiscal Authority is not new or original, «
the Committee stated, «It has been endorsed by a large number of organizations and individuals,,,,In our opinion it would go far toward assuring
that continual progress in this field of intergovernmental fiscal relations
which, under modern Conditions,, is becoming more and more necessary,*1
The scheme for the functioning of the Authority was stated to be in full
keeping with the general theme of the Committee’s report, which is that the
many problems of intergovernmental fiscal relations will not be settled all
at once,, but rather that constant study and readjustment will be necessary, •
with the whole endeavor keynoted by cooperation and a high degree of
mutuality.
Of possibilities for joint administration of selected Federal-State
¡taxes, the report said*
«Administrators have made some progress toward coordinated tax administration, notably in making Federal income tax information available to
the States» Also in the liquor tax field, collaboration of State and
Federal officials is highly developed and has proved mutually satisfactory •*,
Federal-State cooperation in administration cannot be improvised, but re
quires extensive negotiation and preparation. A Federal-State Fiscal
Authority would be admirably suited for this role... Joint income tax re
turns, joint audits, and joint use of administrative personnel offer
possibilities for future development.«
Eventually, the Committee said, a Federal-State Fiscal Authority might
be given power to administer some taxes in its own right*
Of improved cooperation between the States, the report said;
«Some of the gravest problems in-the field of intergovernmental relations
might be solved if there were a sufficient degree of interstate cooperation »»»
A Federal-State agency should supply the factors needed to lift interstate
cooperation to a much more active and more useful plane,*1
The Authority would attack problems which are «real and urgent«,
the report set forth, with these problems **growing net only out of the over
lapping tax system, but also out of the increasing national economic inte
gration and interdependence, The development of huge corporations* only
a little if at all less powerful than the States whichr charter them, and
the growth of Interstate trade, travel, communication, and migration, have
intensified problems of multiple taxation, allocation, interstate compe
tition, and costs of administration and compliance,*»These are only a few
of the many reasons for concern about a revenue system that has developed
piecemeal and is largely uncoordinated»**
The Committee said it had sought a middle ground in the coordination
problem, between extremes of "strong centralizers» and »those who are
satisfied with what we have.»
»lach specific problem has to be considered on its own merits,"
the report added.
»In some crises federalization of a function may’
(by a balance of the interests) be warranted? in ethers, retention of
the function by States and municipalities may be called for? and most
often Joint participation, in one way or another, may be the best
solution...State suspicion that intergovernmental cooperation will be
Federal domination must be dispelled. A program of full and genuine
mutuality is entirely possible."
-0O 0-
O t h e r ways
report,
of -reaching ■the p r o p e r t y base are p o i n t e d out
i n c l u d i n g use
.development
of special
special benefits,
of u n e a r n e d i n c r ement
assessments.
a nd the cost
^through s p e c i a l assessments,
c o uld r e v i s e
t a x e s a n d the f u r t h e r
M a n y mun i c i p a l
services
yield
of these m i g h t r e a s o n a b l y be c o v e r e d
the c o m m i t t e e said.
their p u b l i c u t i l i t y charges,
e„lso,
e v e n to c o n t r i b u t e to the g e n e r a l t r e a s u r y , i t
Some municlpaiitiei
to c o v e r costs,
or
was s t a t e d .
In any event,
the c o m m i t t e e h e ld,
p e r m i t t e d to
manage
props; rty t a x a t i o n as t h e y see
offer no
constructive
"Rate l i m i t a t i o n s
in the
cities s h o u l d be.
fit.
s o l u t i o n to the p r o b l e m
of fin a n c i n g l o c a l g o v e r n m e n t . . . . . .Pr o p e r t y t a x exemet ions
b e e n too f r e e l y g r a n t e d and t oo g e n e r o u s l y interprejfcted,
have
"
it
said.
Muc h
of the blame
for the p r e d i c a m e n t
"can be p l a c e d at tne d o o r of the
councils
report
cities hav e
of the c i t y g o v e r n m e n t s
S t a t e s in w h o s e l e g i s l a t i v e
for years been u n d e r - r e p r e s e n t e d , "
statCities
the
have o f t e n s h a r e d v e r y i n a d e q u a t e l y in
n e w l y d e v e l o p e d State revenues,
particularly
in m o t o r - v e h i c l e
t a x revenues.
Tne
blame
cities in some
for part of
their
instances h a v e t h e i r own m i s m a n a g e m e n t
financial
r i s i n g c o m p e t e n c e of officials
nas b e e n one
A m e r i c an
of the
bright
g o v e r n m e n t «"
*
troubles.
i n .posts
spots
But the .generally
of m u n i c i p a l r e s p o n s i b i 1 i1y
in the r e v e n t
.
to
e v o l u t i o n of
There are "important possibilities11, the committee said
j*
redistriouting the
of
'
property tax burden among individual owners
o f real estate and their tenants.
"what is needed, apparently,
is
some new source of local revenue
Wuicij will (1) not overlap existing Federal and State taxes, (2)
enable the localities to tap their own resources without running
.u xn n.aold uo centra,! < over ninents,
• |li interested
citizenry ,
/ t
!
%zJL
i
report set forth.
- - àJL -.-
(o) cover all or a, vast ms wior it a
v
a
and (
(4)
not be regressive, 11 t
í
tne
f / £
l
£
r
-
m u & m rn m *,.!
■
H
I
b
I
Í
é
I
i
iI
I
*
The property tax might well be broken down into its
elements and ~oo u n i f o m application to all owners on the ba.sis o k>la mg: s
o e &bandone d . One way of recas t ing the fr agment s
wouId
coat emplace a coliectj.on from landlords jui the
service
ie .nature
n a t u r e of a
a servi
ce
charge for local ¡p
f u r t h e r col lection,
more personal in character, from occupants on. W m Sti rent al .
valuer m
b e a d d e d as
e i ther
rep la ceil
•operty tax;
and it
might be
a
. a n d e x p e r i m e n t a l basis."
T -f-
w
lib E
l
p r o p e r t y t.ax levie s ,
- the report suggested,
in view of tiie fact thatt these
t h e s e may
may
be partly capitalized and
because there is no
.o c e r t a i n t y that owners
.would- reduce rentals to tenants accordingly,
need for more municipal revenue,
^~ve 9OIl& i derat ion to
cities were a
advised
dvised
a. tax. on rentals,
One advantage of such a tax is that, bein
current income
But where
■
t here
is
by t he corniritte e
col-lected/ibom
occupant
in proportion to
ratiwr than expected future income,
it will spread
fme burden
over h e various p a r c e l s of real estete in a different
• r^
the committee
man. ei
xrom the. tax on capital values,
•
: explained. "Unused
properties, would: be exempt.... The tax on home rentals might be adjusted
to
take account of size of family, and, a progressive rate might be
i m o o e e a .... A business rental tax would be levied,
of course
at
3 I
of local revenue,
i'
ca,
“
u
.i.
>the C 0 n m ± t t e e
on I n t e r g o v e r n m e n t a l
JhzSL&j&A,
F i scal Relat
to S e c r e t a r y of t h e
Treasury
Uorgenth.au.
Trie committee,
*£P
which
spent two
years
investigating problems
fiscal r e l a tions b e t w e e n F e d e r a l , S t a t e a n d local
governments,
s aid the re organ! za.t ion of local r e v e n u e s o u r c e s
s h o u l d be
“in such m a n n e r as to p r e s e r v e
enable l o c a l g o v e r n m e n t s
according
and
to tax t h e i r
to t h e i r o m i discreti on,
overlapping
This,
restore l o c a l
of
effected
autonomy,
an d to
own re sou roes,
w i t h o u t the
development
of m o r e
¡¡1restore10'
¡tssarces,acc
is
the
isa t
Effective
iiieshash
Igoverns
icouldhe e
thetaxl
injcaration.11
the c o m .1 ttee added,
“ c a lls
for a b o l d
a t t a c k and s ome
f u n d a m e n t a l changes in a t i m e - h o n o r e d i n s t i t u t i o n —
the g e n e r a l
theprop<
Mstisues. V
ustpolitical
ISCistooIS
latitfalls
.property t a x . “
Effectiveness
providing
of t h e
local revenue s has b e e n
^committee's r e p o r t
on the
expanded,
general p r o p e r t y tax
set
forth.
reduced in recent
State g o v e r n m e n t s h a v e
extent to w h i c h
a n d have' further
therear
Icproperty
as a means of
the P r o p e r t y t a x
years
, the'
imposed
ceilings
c o uld be
tegressiTe,1
IMi fors
l i m i t e d it b y g r a n t i n g exemptions.
ius the t a x h a s b e e n “ s t r a i g h t - j a c k e t e d
"thepi
“
pdfonapp]
|
The p r o p e r t y t a x b r o k e " d o w n b a d l y d u r i n g the
the r e p o r t
was
continues.
said to be under
W i t h “m a n y t r a d i tional
It is a f f a c k e d
resented
“b e c a u s e
greatest w e ight
r e c e n t depression,
faults",
the
tax
incessant p o l i t i c a l a t t a ck b y S t a t e a n d l o c a l
leaders.
"Hatis
lill(l)not
itipMr
“b e c a u s e
its base is
of its regreesivity,
the
too narrov/“ a n d is
fact that it f a l l s
on r e l a t i v e l y p o o r t a x p a y e r s . “
with
T B B A J â W DEPARTMENT
Washington
F O R R E L E A S E , A L L iLi)JLI11 0 NS
Friday, A p r i l 2, 1 9 4 3
L o cal
“b a d w a y 11
calls for
Committee
report to
”
^°*
3 3 - ^ 3
governments, p a r t i c u l a r l y " c i t y g o v e r n m e n t s , are in- a
from the (fiscal
standpoint, and to extricate t h e m
r e o r g a n i z a t i o n of the s o u r c e s of l o c a l revenue, the
on I n t e r g o v e r n m e n t a l F i s c a l R e l a t i o n s d e c l a r e d in its
S e c r e t a r y M 0rgenthau.
^conimittee, w h i c h
fiscal
Press S e r v i c e
sperit' two" years I n v e s t i g a t i n g p r o b l e m s
relations b e t w e e n F e d e r a l , S t a t e a n d local
sai d the r e o r g a n i z a t i o n
in such m a n n e r as
of local r e v e n u e s o u r c e s
co p r e s e r v e
enable l o c a l g o v e r n m e n t s
and
1
* 1
J
of
governments,
should be
ef f e c t e d
r e s tore l o c a l autonomy,
to tax their, own r e s o u r c e s
a nd to
- .. J
WS£SiM&BBB!5i
I
according
go t h e i r
own discretion,
w i t h o u t the
development
of m ore
¿overlapping in'(taxation.11
-ij.i&, the coniui Guee added,
"calls
for a bol d a t t a c k and some
f u n d a m e n t a l changes in a t i m e - h o n o r e d i n s t i t u t i o n - - the g e n e r a l
p r o p e r t y t a x."
mrfecGiveness
of t h e
general -property-tax
MiiQw id nig l o cal r e v e n u e s has b e e n
as a -means- of
reduced in recent
^commiutee 1s r e p o r t
set forth.
36II89IS9I8^@I$£ on the
extent to wfiieh
years
State g o v e r n m e n t s h a v e
the p r o p e r t y t a x
, the'
imposed
ceilings
could be
expanded, a n d have f u r ther l i m i t e d it by g r a n t i n g exemptions.
;
:
7h ' - - -; , ^
ixius oiie t a x h a s b e e n 41straight- j a c k e t e d . "
Trie p r o p e r t y t a x b r o k e d o w n b a l l y d u r i n g the
the r e p o r t
continues.
was said to be under
W i t h "many t raditional
faults",
the
tax
incessant p o l i t i c a l a t t a c k b y S t a t e a n d local
leaders.
It is a f f a e k e d
"because
resented
"because
regressivity,
greatest weight
r e c e n t depression,
of its
its base is
the
too narrow"
fact t h a t
on r e l a t i v e l y p o o r t a x p a y e r s . "
a n d is
it f a l l s
with
1
TREASURY DEPARTMENT
Washington
FOR RELEASE, ALL EDITIONS
Friday, April 2, 1943 '
Press Service
N o • 35-93
3/30/43
Local governments, particularly city governments, are in a -bad way"
from the fiscal standpoint, and to extricate them calls for reorganisation
of the sources of local revenue, the Committee on Intergovernmental Fiscal
Relations declared in its report to Secretary Morgenthau,
relations^b™wffFederal I f L f L T ’f
tion of local revenue s ^ c f s s W d
and restore local autonomy and to
t « cnoiITmentS * T
Thus the tax h 2 t e e n ’"
b
1F es'tiSatl°S problems of fiscal
f
f
th°
&A such manner as to preserve
imp0S8d ceil^ s on the extent to L L T f epfuerty*
S
f
^
S“
“ ,S
b2e i f
a attr k * state 804 local leaders. It is attacked C o f se i f
base is too narrow" and is resented "because of its regress ivity, thefact
at it falls with greatest weight on relatively poor taxpayers,"
the f f L t f t "important possibilities», the Committee said, of redistributing
P
3 ax burden among individual owners of real estate and their tenants,
will i v f - L f nef ei> aPPareatly, is some new source of local revenue which
tfi (
H u
°Verlap existine Federal and State taxes, (2) enable the l o c a l i t y
,
(3) 2verfil°2 r i f r f Wif 0Uf ri r lne hat in hand t0 oentral governments,
refrressivf* ft +v
a9i majority of the interested citi2 enry, and (4) not he
search f o r ' s u c h ' a ^ o ^ c e f ”^
SUgSe9ted
*
'
uniformfttmlicntin
f f ht wel1 be ljr<>ken d» ™ Into its elements and its
way of r e o a s t i n f t L f . f i T ® rS ?2 the basle of hidings be abandoned. One
way or recasting the fragments would contemplate a collection from landlords
iol
«* 2 ■—
n
0 a sei*vic® charge for local benefits to property, and a further
J ore F?1? 01121* in clmr®
i0ter» from occupants on rental values« The
** fou^
added as either a replacement or a supplement to the
experimental°taaIs?"' “ d “
” leht
introducad ateP
st«P on a gradual and
t0 r®^uc® current property tax levies, the report
* n V*6^ F
these may be partly capitalised and because
n ^ Certf lnty
owners would reduce rentals to tenants accordingly«
rnLTtf
Jher! iS n6e* foT mo*e wwaicipal revenue, cities were advised by the
ee o g ve consideration to a tax on rentals, collected from occupants#
tVia^A 4
advantage of such a tax is that, being in proportion to current in«*
come rather than expected future income, it will spread the burden over the
^arious parcels of real estate in a different manner from the tax on capital
values,
the Committee explained* «tJnused properties would be exempt*,•♦The
ax on home rentals might be adjusted to take account of size of family, and'
a p ogress ve rate might be imposed**#,A business rental tax would be levied,
of course, at a flat rate«»
9
Other ways of reaching the property base are pointed out in the report,
including use of unearned increment taxes and the further development of
special assessments* Many municipal services yield special benefits, and the
cost of these might reasonably be covered through special assessments, the
C/omraittee said* Some municipalities could revise their public utility charges.
also,, to cover costs, or even to contribute to the general treasury, it was
stated*
vr
Xn any event, the Committee held, cities should be permitted to manage
property taxation as they see fit. «Rate limitations offer no constructive
solution to the problem of financing local government*..♦Property tax exemptions
nave been too freely granted and too generously interpreted,« it said*
Much of the blame for the predicament of the city governments «can be
p aced at the door of the States in whose legislative councils cities have for
years been under-represented,« the report stated*
«Cities have often shared
very inadequately in newly developed State revenues, particularly in motorvehicle tax revenues^
cities in some instances have their own mismanagement to blame for
, , fcheir financial troubles* But the generally rising competence of
officials in posts of municipal responsibility has been one of the bright spots
in the recent evolution of American government*«
oOo
A l c o h o lic b e v er a g e
liquor m o n o p o l y p r o f i t s
taxes,
i n c l u d i n g excises,
- Federal
licenses,
$820,000,000,
and
S t a t e f 337,000,000,
local $ 3 5 , 0 0 0 , 0 0 0 .
M o t o r v e h icle l i c e n s e s
- State
#417, 0 0 0 , 0 0 0 ,
M o t o r fuel taxes - F e d e r a l #343, 0 0 0 , 0 0 0 ,
local
local # 2 4 , 0 0 0 , 0 0 0 .
State # 9 1 4 , 0 0 0 , 0 0 0 ,
#7,000,000.
S t o c k tra n s f e r taxes - F e d e r a l # 12,000,000,
State
#12,000,000.
M i s c e l l a n e o u s co r p o r a t i o n t a x e s - R e d e r a l # 1 6 7 , 0 0 0 , 0 0 0 ,
S t a t e # 2 03,000,000,
Payroll
taxes
local
#40,000,000.
- F e d e r a l # 9 9 3 , 000,000,
State
#901,000,000,
local #5,000,000.
The t o t a l s
#6,911,000,000;
of t h e s e o v e r l a p p i n g t a x p a y m e n t s are:
State,
#3,440,000,000;
4 r
Federal,
local # 1 3 4 , 0 0 0 , 0 0 0 .
*
-
licens.es,
but ar e in p r o c e s s of y i e l d i n g s u p r e m a c y
F e d e r a l Gov e r n m e n t
themselves
in the t a x ation of s t o c k transfers,
t h r e a t e n e d in the
field
11No. m a j o r source of t a x revenue,
peace,
to t h e
lias b e e n r e l i n q u i s h e d b y the
of motor ve h i c l e
and feel
taxation.
initiated during times
of
F e d e r a l G o v e r n m e n t to the
States.
"Among the 10 o v e r l a p p i n g F e d e r a l - S t a t e
m u n i cipal
(1)
o v e r l a p p i n g is
income
business
taxes,
(2)
licenses,
licenses,
and
t o b a c c o taxes,
(3)
t ax —
c o r p o r a t i o n and
(5) m o t o r vehicle
the m a j o r s o u r c e of l o c a l r e v enue
—
the
e x i s t s o n l y a m o n g S t a t e and l o c a l g o v e r n m e n t s ,
trend t o w a r d r e l i n q u i s h m e n t
of this
source
subdivisionsl!
U n d e r the
impetus
of the 9 0 - p e r c e n t
cred i t a l l o w e d against
F e d e r a l u n e m p l o y m e n t c a p e n s a t i o n p a y r o l l taxes,
e n a d^ed p a y r o l l taxes s i nce
%©
to
(6) l i q u o r taxes.
wit h a noticeable
to local
sources,
found to some d e g r e e w i t h respect
(4) m o t o r fuel taxes,
" O v e r l a p p i n g ih
property
tax
report
Federal,State
fiscal years
gives
1936.
the f o l l o w i n g figures
and l o c a l r e v e n u e s
ending in
a ll S t a t e s have
comparing
from o v e r l a p p i n g
sources f o r
1941;
D e a t h and gift t a x e s
'
- Federal $407,000,000.
State
$1 2 1 , 0 0 0 , 0 0 0 ,
l o c a l $1,000,000.
Corporation
$190,000,000,
taxes - F e d e r a l $2,053, 0 0 0 , 0 0 0 ,
State
l o cal # 2 , 0 0 0,000.
Individual
# 2 33,000,000,
income
income t a x e s
- Federal #1,413,000,000,
State
local # 2 0 , 0 0 0 , 0 0 0 .
Tobacco taxes - Federal
l o cal #155,000.
#698,000,000,
S t a t e #107,000,000,
TREASURY DEPARTMENT
. Washington
FOR RELEASE,ALL EDITIONS
Saturday, April 3,1943
Ho-
d O ' ? ¥
TREASURY DEPARTMENT
. Washington
Press S e r v i c e
FOR. BELEASE, A L L E D I T I O N S
Sat u r d a y , A P r i 1 3 , 1943
Federal,State
and local g o v e r n m e n t s have
o t h e r 1s sources of r e v e n u e
thr e e - w a y
the
“m u s c l e d i n 11 on
to such a n extent
o v e r l a p p i n g e x i s t s wit h
classifications
d s - ? y
Ho-
respect to
of A m e r i c a n taxation,
that
two-way
each
or ■
nearly all major
a c c o r d i n g to f i n d i n g s w h i c h
Com m i t t e e on Int e r g o v e f n m e n t a l 'Fiscal R e l a t i o n s has r e p o r t e d to
S e c r etary
of the
Treasury Morgenthau.
The fi n d i n g s have b e e n t r a n s m i t t e d b y S e c r e t a r y M o r g e n t h a u to
President
R oosevelt,
G o v e r n o r s of the States,
and C o n g r e s s i o n a l
c o m m i t t e e s on taxation. They I n c lude aA program of F e d e r a l - S t a t e - l o c a l
a c t i o n to
r e m e d y the o v e r l a p p i n g t a x
evils.
(“A l c o h o l i c b e v e r a g e and g a s o l i n e taxes are u n i v e r s a l a m o n g the
Sta-te-s a n d t h e d e a t h t a x e s n e a r l y so;
in about
two thirds,
on e l e c trical
t o b a c c o taxes
taxes
are l e v i e d
in. w e l l o ver half,
energy and amusements
the c o m m i t t e e ’s repo r t recited.
income
in s e v eral of the
“A l l these
s o u rces
and e x cises
States,“
are t a x e d
h e a v i l y b y t he F e d e r a l G o v e rnment ♦"
The c o m m i t t e e s u m m a r i z e d its d a t a on
si#*.
follows;
“O v e r l a p p i n g in F e d e r a l
s i g n i f i c a n t degree
and S t a t e
w i t h respect
i n c l u d i n g m o s t of the major
62 percent
sources
of all Federal,
to
of a l l F e d e r a l
as
in
10 sources of revenue,
and comprising approximately
and l o c a l t a x revenues.
jointly e p l o y e d b y Federal
for 88*4 p e r c e n t
tax s o u r c e s e x i s t s
some
sources,
State
tax overlapping
and State
governments
The
tax
accounted
t a x c o l l e c t i o n a n d 75*4 percent
of all S t a t e t a x c o l l e c t i o n s in 1941.
“Of the
10 sources in w h i c h F e d e r a l - S t a t e
yfoe -vederal gov e r n m e n t
dom i n a t e s
(that is,
o v e r l a p p i n g exists,
collects a major
p r o p o r t i o n of total r e v e n u e s
from t h e
) w i t h r e s pect to the
f o l l o w i n g : 4§i@y[
inco m e
(2$
tax,
(l)
the net
(4) a l c o h o l i c b e v e r a g e e x c i s e
taxes,
and
dominate
in
(6) p a y r o l l taxes.
(1)
m
r
SJajpe
fiiintL
s\
*, (2 ) m o t o r v e h i c l e
tax,
taxes,
(5)
d e a t h tax,
(3) gift
t o b acco e x c i s e
governments
continue
to
?
'
fuel taxes,
a nd
(3) m o t o r v e h icle
TREASURY DEPARTMENT
Washington
F O R RELEASE, A L L EDITIONS,
Saturday, A p r i l 3, 1943>
3 /3 0 /4 3
Federal,
~ ~
P r ess S e r v i c e
No » 35*94
’
S t a t e a n d l o c a l g o v e r n m e n t s h a v e " m u s c l e d in" on
each o t h e r 1s s o u r c e s
of r e v e n u e to s u c h an extent that t w o - w a y
or t h r e e - w a y o v e r l a p p i n g exists w i t h r e s p e c t to n e a r l y all
major
c l a s s i f i c a t i o n s of A m e r i c a n taxation,
a c c o r d i n g to f i n d
ings -which the C o m m i t t e e on I n t e r g o v e r n m e n t a l Fisc a l R e l a t i o n s
has r e p o r t e d to S e c r e t a r y of the T r e a s u r y Morgenthau.
The findings h a v e been t r a n s m i t t e d by S e c r e t a r y M o r g e n t h a u
to P r e s i d e n t R o o s e v e l t , G o v e r n o r s o f the States, a n d Congress i o n a 1 com m i t t e e s on taxati on.
T h e y in c l u d e a p r o p o s e d . p r o taxm
a c t i o n to r e m e d y the o v e r l a p p i n g
A l c o h o l i c b e v e r a g e a n d g a s o l i n e taxes a re u n i v e r s a l
a m o n g t h e S t a t e s a n d the, d e a t h t a xes n e a r l y so; income taxes
in a b o u t two-thirds, t o b a c c o taxes in wel l o v e r
h a l x , a n d excises on e l e c t r i c a l energy and a m u s e m e n t s in s e v
eral o r the States", t h e C o m m i t t e e ’s r e p o r t recited.
"All
t h e s e sources a r e t a x e d h e a v i l y by t he Fe d e r a l G o v e r n m e n t . "
T
h e* C o m m i t t e e s u m m a r i z e d its data on t a x o v e r l a p
p i n g as
wr&
j.j. -o
follow
.v,
.
in F e d e r a l a n d S t a t e t a x sources exists in
s i g n i f i c a n t d e g r e e w i t h r e s p e c t to some 10 sources of revenue,
i n c l u d i n g most of t h e m a j o r sources, a n d c o m p rising a p p r o x i
m a t e l y 62 p e r c e n t of a l l Federal, S t a t e a nd local t a x r e v
enues.
The t a x sources Jointly employed b y Fe d e r a l an d State
g o v e r n m e n t s a c c o u n t e d f or 88,4 p e r c e n t of a ll F e d e r a l t a x c o l
l e c t i o n s and /5*4 p e r c e n t of al l S t a t e t a x collections in 1941«
. ,
t h e 1° sources in w h i c h F e d e r a l - S t a t e o v e r l a p p i n g e x
ists, t h e F e d e r a l G o v e r n m e n t do m i n a t e s (that is, collects a
m a j o r p r o p o r t i o n of t o t a l r e v e n u e s f r o m the tax) w i t h r e s pect
^ N the/ ollowi?6 *
^
t h e net incorne tax,
(5; gift tax-, (4) a l c o h o l i c b e v e r a g e excise
acco excise taxes, a n d (6) p a y r o l l taxes,
c o n tinue to do m i n a t e in (1) business taxes
(2) death tax",
taxes, (5) toState g o v e r n m e n t s
(other than t h o s e
2
on income), (2) m o t o r v e h icle fue l faxes, a n d (3) m o t o r ve#
h i d e licenses, but a r e in pr o c e s s o f y i e l d i n g s u p r e m a c y to
t he F e d er al G o v e r n m e n t in t h e t a x a t i o n of s t o c k transfers,
a n d feel t h e m s e l v e s t h r e a t e n e d in t h e f i e l d of m o t o r v e h i c l e
taxation.
"Ho m a j o r s o u r c e of t a x r e v e n u e , i n i t i a t e d during times
of peace, has been r e l i n q u i s h e d b y the F e d e r a l G o v e r n m e n t to
t he States.
" A m o n g the 1 0 o v e r l a p p i n g F e d e r a l » S t a t e t a x sources, mu»
n i c i p a l o v e r l a p p i n g is f o u n d to s o m e d e g r e e w i t h r e s p e c t to
(1) income taxes, (2) to b a c c o taxes, (3) c o r p o r a t i o n a n d bus»
i n e s s licenses, (4) m o t o r fue l taxes, (5) m o t o r vehicle
licenses, a n d (6) l i q u o r taxes*
" O v e r l a p p i n g in t h e m a j o r s o u r c e of local r e v enue »» the
p r o p e r t y t a x -** exists onl y a m o n g S t a t e a n d local g o v e r n m e n t s »
w i t h a n o t i c e a b l e t r e n d t o w a r d r e l i n q u i s h m e n t of this source
to l o cal s u b d i v i s i o n s . "
U n d e r the impetus o f t he 9 0 » p © r c e n t credit a l l o w e d
ag a i n s t F e d e r a l u n e m p l o y m e n t c o m p e n s a t i o n pa y r o l l taxes,
States h a v e enacted p a y r o l l taxes s i n c e 1936.
all
T h e report gives the f o l l o w i n g figures c o m p aring Federal,
S t a t e a nd l o c a l r e v e n u e s f r o m o v e r l a p p i n g sources for fiscal
years ending in 1941:
D e a t h a nd gift taxes » F e d e r a l $ 4 0 7 * 0 0 0 , 0 0 0 ,
#121, 0 0 0 , 0 0 0 , local #1,000,000,
State
C o r p o r a t i o n income taxes - F e d e r a l #2,053,000,000,
#190,000,000, l o c a l # 2 , 0 0 0,000.
I n d i v i d u a l income taxes » F e d e r a l #1,418,000,000,
$ 233 ,000, 000, l o c a l $ 2 0 , 0 00,000.
T o b a c c o taxes - F e d e r a l $6 9 8 , 0 0 0 , 0 0 0 ,
l o cal $1 5 5 , 0 0 0 »
State
State
S t a t e $107,000,000,
A l c o h o l i c b e v e r a g e taxes, i n c l u d i n g excises, licenses,
a n d l i q u o r m o n o p o l y p r o f i t s - F e d e r a l $820,000,000, State
$337,000,000, l o c a l $ 3 5 , 0 0 0 , 0 0 0 ,
M o t o r v e h icle l i c e n s e s - S t a t e $417,000,000,
$2 4 , 0 0 0 , 0 0 0 .
M o t o r fuel t a xes r F e d e r a l $ 3 4 3 , 0 0 0 , 0 0 0 ,
$ 9 1 4 , 000,000, l o c a l $ 7,000,000.
local
State
* 3 -
«frio A ^ ° £ ^ transfer taxes “ Federal $12,000,000, State
yOOOyOOO •
. ^ i S S o 1! ^ 0 0 *5 c o r p o r a t i o n taxes - F e d e r a l $167,000,000,
S t a t e $ 2 0 8 , 0 00,000, local $ 4 0 , 0 0 0 , 0 0 0 *
l o o a l P| ^ 0 0 0 , 0 0 0 eS "
n
#993,000,000,
S t a t e $901,000,000,
5 hes 6 o v e r l a p p i n g t a x p a y m e n t s are?
¿il*
i000 j000 •
>^00; State, $ 3 , 4 4 0 , 0 0 0 , 0 0 0 ; l o cal
Fed-
EXTENT OF OVERLAPPING IN MAJOR TAX SOURCES
Fiscal Years Ending in 1941
PERCENT----------------------------------------------------------------------------------- PERCENT
Predominates
Predominates
Predominates
Source-. Table 2 , Property ta x fig ures adapted fro m Bureau 6 f the Census, Financing Federal, S tate and Lo cal Governments'. 1941.
B -3 9 7
FOR IMMEDIATE RELEASE,
March 30, 191*3«
The Bureau of Customs announced today preliminary figures showing the
quantities of coffee authorized for entry for consumption under the quotas
for the twelve months commencing October 1, 19l*2, provided for in the InterAmerican Coffee Agreement, proclaimed b y the President on April 15, 191*1, as
follows:
Country of
Production
Signatory Countries:
Brazil
Colombia
Costa Rica
Cuba
Dominican Republic
Ecuador
El Salvador
Guatemala
Haiti
Honduras
Mexico
Nicaragua
Peru
Venezuela
s
:
:
e
•
:
Quota Quantity :
Authorized for entry
(Pounds) V
:
for consumption
: As of (Date)
:
(Pounds)
2,172,359,753
735,81*0,277
1*6,718,031
18,692,1*51
25,752,91*7
35,Ola,235
11*0,776,585
121*,978,598
61*,236,136
1*,278,1*67
111,292,661
1*5,818,819
5,839,588
90,021,1*90
Non-signatory Countries:
)
British Empire, except
)
Aden and Canada
)
Kingdom of the Netherlands)
and its possessions
)
Aden, Yemen, and Saudi
)
Arabia
)
Other coimtries not signa-)
tories of the Inter)
American Coffee Agree- )
ment
)
3/
75,969,017
Quotas revised as of March 5* 191*3«
—oOo—
March 2 0 , 19l*3
tt
tt
tt
271,1*33,1*95
250,839,771*
12,071,311
8,368,551*
I5,2la,996
12,31*8,869
1*2,832,1*31
38,039,856
1*7,272,097
1,31*1*,991
28,631,771*
5,306,1*22
159
31*,083,960
tt
23,151*,572
N
tt
»
It
tt
tt
It
tt
tt
tt
TREASURY DEPARTMENT
Washington
POR IMMEDIATE RELEASE,
Wednesday, March 31, 1943.
press Service
N0. 35-9 5
The Bureau of Customs announced today preliminary figures showing the Quan
tities of coffee authorized for entry for consumption under the ouotas for the
twelve months commencing October 1, 1942, provided for in the Inter-American
Coffee Agreement, proclaimed "by the President on April 15, 1941, as follows?
J
Country of
Production
Signatory Countries;
Brazil
Colombia
Costa Rica
Cuba
Dominican Republic
Ecuador
El Salvador
Guatemala
Haiti
Honduras
Mexico
Nicaragua
Peru
Venezuela
*
; Quota Quantity ;
Authorized for entry
Î (pounds) 1 / ;
for consumption
:
; As of (Date)
;
(Pounds)
2,172,359,753
735,840,277
46,718,031
18,692,451
25,752,947
35,041,235
140,776,585
124,978,598
64,236,136
4,278,467
111,292,661
45,818,819
5,839,588
90,021,490
Non-signatory Countries;
)
British Empire, except
)
Aden and Canada
)
Kingdom of the Netherlands)
and its possessions
)
75,969,017
Aden, Yemen, and Saudi
)
Arabia
)
Other countries not signa-)
tories of the Inter)
.American Coffee. Agree- ) ■
ment
X .
»ni1 UI,.1.
1 ...
1J
rnmfi*
Quotas revised as of March 5, 1943.
o0 o~
March 2 0 , 1943
tf
»
n
it
it
if
it
,
it
it
«
it
if
it
271,433,495
250,839,774
12,071,311
8,368,554
15,241,996
12,348,869
42,832,431
38,039,856
47,272,097
1,344,991
28,631,774
5,306,422
159
34,083,960
ti
23,154,572
5
Gther
suggestions
u s e d in a v i a t i o n ,
in
trucks
exclusively Federal
and- m e d i a t i o n b y
such nroblems
against
were
as
that
u s e d in
interstate
tax system,
“d e - e m p h a s i z e d , H t h e
“T h e
confusion
c ons i d er a b l e ,
taxation
is
11 the
itself
considerably by
policy renders
coordination
B^ate
by the
The
becomes
such,
large a place
needs
effects
system
and
system
is at p r e s e n t
The
impressive
economy are
o f bus in ess
ordered
absence
of a Fjs&eral
for F-eder s i - S t a h e
taxation
said that
is
upon the
11T h e F e d e r a l
were
special
“b a s e d u p o n n o r e a s o n a b l e
said,
discussed retail
is
not
b y virtue
w i t h some
severely
State
principle
levies
criticized
on b u s i n e s s
of F e d e r a l
entrance
to be H i g h l y r e c o m m e n d e d
,adm ini s t r a t i on i n t h i s
in S t a t e
fie. Id., w o u l d
.Undes i r a b l e . “
Ci>
.
whatever.“
sales taxes briefly.
an o v e r l a p p i n g
diversities
in
to b e
“c h a r a c t e r i z e d b y g r e a t a r b i t r a r i n e s s “, w i t h
coordination device
Evan
the t a x
of p l a n s
i n "business
which
too
of t a x a t i o n
war finance.
practices
it
of
uncrystallized
the development
Committee
- n is tax,
r e p o r t s aid.
difficult.“
of th e m
form
of r e p r e s s i v e
e xigencies of
Committee,
relatively
reported.
doubly
a c tivity were
most
and this
in t i l s s e c t o r
and the p o s s i b i l i t i e s
o f •lie ens e f e e s
traffic.
found
Committee
fuel
a F e d e r & l - S t a t e -Fiscal A u t h o r i t y
o f m u l t i p l e a s s e s a m e nt
T a x a t i o n of b u s i n e s s h a s
the A m e r i c a n
t a x a t i o n of
laws,
>resent
into
is
the
"but
field,
i f it
the
joint " a d m i n i s t r a t i o n .
complete
be ..asteful a n d
duplication
otherwise
of
T he
report
increased
to t h e
the p o r t i o n
to the
tax
levies.
, .
"The
field.
tax
sharing,
is
curtailment
would
rave
cent s ’p e r
o n a. p
u p o n State
admirably
the
is
com
'
In a
the
study
it tee
cos
of the cost
tobacco
tj o n l y
taxes
18
is
it
from
the-
cigare t C C
in t h e i r
a n d State
objection
in its
in' t h i s i n s t a n c e
recommended
at l e a s t
as
said.
plan
w o u l d be
of c o l l e c t i n g
collecting
cents.
F o r the
motor
various
each $ 1 0 0
Sta t e s ,
considerably more
Of g a s o l i n e and
is
distribution
collection
to g e n e r a l
be
weighted in
favor
>
committee found that
taxes
this: i n c r e a s e
it'&"a p p l i c a t i o n
that
The p e r c a p i t a d i s t r i b u t i o n
ik.-
open
and that
withdrawal
for Federal
independence,
of< u r b a n p o p u l a t i o n s .
c ig a r
r c a p i t a b a s i s . The
adapted
so m a n y a d v a n t a g e s
an e x p e r i m e n t , "
on
standard package
and m u n i c i p a l
this d e v i c e
of State
tax
It at e s u s e t h e 2 - cent r a t e
Host
and while
Federal
revenue 'represented b y
States
conditional
tobacco
that the
ext ent" of 2
of F e d e r a l
distributed
v o u l d be
recommends
vehicle
Federal
taxe s ,
of F e d e r a l
tobacco
a d m ini s t r a t i oiv o f
expensive.
u s e taxes,
the r e p o r t
said
in
part;
"For the
here
motor
vehicle
tax field the coordination
r e c o m m e n d e d is s e p a r a t i o n
to ' w i t h d r a w f r o m t h e
exigencies
this
tax
revenue,
might
field
of s o u r c e s ,
as m u c h
w i l l permit-. . ..T h e - b asis
field forms
for
exploit
a
a n d as
of
the
Federal Government
s o o n as
this
its
f
and cue
adequately and
which
financial
recommendation
lucrative and badly needed
the S t a t e s ,
device
they are
*'
source
..-
.
satisfactorily."
i-m..»!. | ■»«—tnrry^n..
WW!t?.«
?e ± y F e d e r
nro:
a tat e
mediation
¡|tp§_
UC
ox
jVawrft-rpnfi g
Ox
q
tiple
assessment
terst a w a r a l l
of I j ^ e f i f ^ r e e s
of
exploiting* o r
gwwfeMj
W-- h
'H'lJJ,iftiwwwwwwi
is that
at c a c x .
the
-Ure5il
Partial
c o o r d i n a t i o n of F e d e r a l
ue e n accomp l i s h e d ,
and State
a c c o r d i n g to the
Federal tax
taxpayer
report,
d e a t h taxes
t h r o u g h a c r e d i t to the
.
for d e a t h t a x e s p a i d nine at
the
3* u n d e r t h e 1 926 F e d e r a l estate
the F e d e r a l
a d a p t e d to t h e most
«&b*w «5R
ter
Federal
very least the
redent
with applicability
exemptions
, and to the
still,
S i nce 1 9 2 6 / however,
estate
credit
to raise r a t e s a n d
s h ould be
ta x statute,
'Imssassmt in terms of the p r e s e n t rates aid
taxation o f g i f ts," t h e
committee
the e h t i r e estat e tsx syst'em"s h o u l d b e
exemptions
of Spate
tax.
Federal' tax^
l aw has b e e n a m e n d e d s e v e r a l t i m e s
l o w e r exem p t i o n s . }"At t he
l^iii11111
s h o u l d be r e d u c e d t o at least
exemptions;
th e
also has
estate an d gift
the
found.
overhauled;
av e r a g e
level
taxes s h o u l d be
i n t e g r a t e d . 11
The S t a t e d e a t h t a x e s
and m u l t i p l e
taxation,
are
"plagued b y interstate competition
a n d e s p e c i a l l y b y the' fact that estates'
are h i g h l y c o n c e n t r a t e d in a r e l a t i v e l y few States,
w e a l t h r e p r e s e n t e d m a y h ave b e e n a c c u m u l a t e d
.though the
over a m u c h w i d e r area,
••••
the r e p o r t
the <&Sa0fK
States.
related. "The Fe d e r a l (Government c o u l d a n d s h o u l d assume
A
t a s k of d e t e r m i n i n g the t a x p a y e r ’s l i a b i l i t y to the
O p b e t t e r still,
a d m i n i s t r a t f o r y T h e right
this mat t e r could b e
to d e t e r m i n e
handled by
jurisdiction
be i m p o s e d as a con d i t i o n u n d e r w h i c h the F e d e r a l
offer its a d m i n i s t r a t i v e
services
might als o be i m p o s e d as a
to
the
States.
joint
might w e l l
(Government w o u l d
G-0 lng further,
c o n d i t i o n for the c r e d i t
itself."
it
co m p u t i n g net income*'"for State
further
tax'"purposes.
The r e p o r t
improvements- b y which the F e d e r a l gov e r n m e n t
suggested
would
Htjote inco m e taxes d e d u c t i b l e on an a c c r u a l
basis,
expenses w e r e r e p o r t e d on a c a s h basis,
Stat e s w h i c h
allow reciprocal deductibility
it as
a l l o w the taxpay er ! in his
the State i n o o m e l t a x e s
uhe
w o u l d change
soon as r e v enue n e eds p e r m i t .
would
and
their
A c c r u a l basis
Federal
which were
■ make
eve n w h e n other
do not now
s t a t u t e s to
deductibility
ret urn^to"
toiaa.aa>: deduct
due -and p a y a b l e
ie time a#
re uurn . vra die r
m the t a x e s p a i d . d u r i n g the p r e v i o u s
A
M u tual d e d u c t i b i l i t y is a. f a i r l y effective p r o t e c t i o n
againsc exc e s s i v e
combinations
of F e d e r a l and
committee
an 30 p e r c e n t F e d e r a l a n d a 15 p e r c e n t
MWEGfc
a lie
report
Stale
T n a x t he
8 0 . 7 pe r c e n t
States
said,
when
sho .Id
out
not
there
rates,
year.
the
combined l o a d of
S t a t e rat e
is a c t u a l l y only
is r e c i p r o c a l d e d u c t i b i l i t y .
be a s k e d to
uhe S t a t e s
allow
s u r r e n d e r the' income
tax,
the
s a o u l d s u r r e n d e r to the F e d e r a l G-ov r u m e n
the r e s p o n s i b i l i t y of d e t e r m i n i n g
jurisdiction;
that
is,
w hat
is
w i t h i n - t h e t e r r i t o r i a l p r o v i n c e of e a c h S t a t e to tax. This w o u l d
a t r ike at, ~ — —
\■- g
multiple
multiple
income t a x a t i o n ^ n o t a b l y v b a x a t i o n o f the
incomes oi corpo r a t i o n s .
a p p r o a c h to f u r t h e r c o o r d i n a t i o n o:
111The m ost pro m i s i n g
net
income
•>
taxes is in a d m i n i s t r a t i o n , "it +
the
com
“U t i l i z a t i o n b y t he S t ates
of F e d e r a l
already d e v e l o p e d to s o m e extent
b e t w e e n pidniln 1str a t i v e
iA/»m
staffs
ittee observed.
income t a x 1 nformartioil i
and some i n f o r m a l
cooperation
now_o.ccure....But _ the f i e l d h as
miamimm -m§'careely b e e n s c r a t c h e d . Joint returns,
joint audits,
joint u s e of p e r s o n n e l and more u n i f o m
a dew of the
possibilities.
laws
are
A F e d e r a l - S t a t e F i s c a l A u t h o r i t y could
be o f i m m e n s e -usefulness in p a v i n g
the w a y
for this
p r o gram.
11
insert p-1,
S u n d a y release,
the
Fisc a l R e l a t i o n s r e p o r t
commit te e in' c h a r g e
L u t h e r G-ulich,
director
1.t i o n , N e w Yor k ; Dr.
of
economics,
of the
Har■old M.
U n i v e r s i t y of Wisconsin;
p r o f e s s o r of economics,
of the f i s c a l r elafi: ns
V a ssar College.
I n s t i t u t e of
Groves,
profe
and Dr. M a b e l N e w c o m e r
sor
TREASURY D E P A R T » ! T
Washington
F O R RELEASE, K0RRT1 !Or N E W S P A P E R S
A p r i l 4, 1945
__Sunday,
_____ &
4/1/43
i
There
Pre«s Service
1,0 •
is. comp e l l i n g n e e d f o r c o o r d i n a t i o n b y the F e d e r a l u
Government,
the States,
and l o c a l g o v e r n m e n t s ' of s u c h tax levies
as those on incomes,in h e r i t a n c e s ,
tobacco,liquor,gasoline,
vehicles
Secretary
and
liorgenthau
business
was
Fiscal Relations
activity,
in its r e p o r t
covering a
is m o s t
other problems,
pronounced.
the
C o m mittee
steps as m u t u a l a d j u s t m e n t s to
i n c o m e t ax laws;
t w o - y e a r inquiry.
tax a t i o n f i e l d s in w h i c h
Federal-State-local levies
State
the
c o l l ection
overlapping-of
To d eal with
un i f o r m F e d e r a l and
s u r r e n d e r b y the F e d e r a l G o v e r n m e n t
of al l t o b a c c o
p r o c e e d s to be s h a r e d w i t h
the
this
r e c o m m e n d e d such
atta i n m o r e
m o t o r v e h icle and g a s oline taxes e x c e p t taxes
aviation;
Treasury
a d v i s e d b y the C o m m i t t e e on I n t e r g o v e r n m e n t a l
These are some - of the
o v e r l a p p i n g and
of the
motor
of
on g a s o l i n e u s e d in
taxes by the
F e d e r a l Government,
States.
The C o m m i t t e e w o r k e d out its c o o r d i n a t i o n p r o g r a m from the
viewpoint
that Federal,State
a joint
ent e r p r i s e
rather
and l o c a l g o v e r n m e n t s are p a r t n e r s
than c o m p etitors,
of I n t e r g o v e r n m e n t a l f i s c a l r e l a t i o n s m a y best
c o o p e r a t i o n r a t h e r t h a n coercion,
has to be
and that
in
that the p r o b l e m s
be
each
solved by
specific p r o b l e m
c o n s i d e r e d " o n its own merits.
/ C o o r d i n a t i o n of F e d e r a l and S t ate
importance,
the
Committee
m u l t i p l e taxation,
said,
income t a x a t i o n is o f first-rate
because
it is in this
t e n d e n c i e s t o w a r d inte r s t a t e
w e a l t h and i n d u s t r y to
escape taxes,
and n i g h
f i e l d that
:
m i g r a t i o n of
compliance
costs are
nos1* p r o m i n e n t .
Some c o o r d i n a t i o n a l r e a d y has b e e n achieved, it w a s p o i n t e d out
£g§X:''-i U ' A Y
'2
n
.pv-p —■RO .* ■V'-gp
by. p r o v isions of l a w w hi oh permit income taxes p a i d to t h e ’ States to be - 3
d e d u c t e d in c o m p u t i n g n e t income
f o r F e d e r a l tax ourposes, -and the
r e c i p r o c a l p r a c t i c e in m o r e t h a n t w o - t h i r d s of the- S t a t e s
of, al l o w i n g F e d e r a l inco m e t a x
payments
to be d e d u c t e d in
-
TREASURY DEPARTMENT
T/ashington.
FOR RELEASE, MORNING NEWSPAPERS
Sunday, April A, 1943
Press Service
No. 35-96
There is compelling needl for coordination by the Federal Government,
the States, and local governments of such tax levies as those on incomes,
inheritances, tobacco, liquor, gasoline, motor vehicles and business
activity, Secretary of the Treasury Morgenthau was advised by the Committee
on Intergovernmental Fiscal Relations in its report covering a two-year
inquiry*
These are some of the taxation fields in which overlapping of FederalState-local levies is most pronounced# To deal with this overlapping and
other problems, the Committee recommended such steps as mutual adjustments
to attain more uniform Federal and State income tax laws; surrender by the
Federal Government of motor vehicle and gasoline taxes except taxes on
gasoline used in aviation; collection of all tobacco taxes by the Federal
Government, the proceeds to be shared with the States*
The Committee worked out its coordination program from the viewpoint
that Federal, State and local governments are partners in a joint enterprise
rather than competitors, that the problems of intergovernmental fiscal
relations may best be solved by cooperation rather than coercion, and that
each specific problem has to be considered on its own merits*
Members of the committee in charge of the fiscal relations survey were
Dr# Luther Gulick, director of the Institute of Public Administration,
New York; Dr. Harold M# Groves, professor of economics, University of
Wisconsin; and Dr* Mabel Newcomer, professor of economics, Vassar College#
Coordination of Federal and State income taxation is of first-rate
importance, the Committee said, because it is in this field that multiple
taxation, tendencies toward Interstate migration of wealth and industry to
escape taxes, and high compliance costs are most prominent*
Some coordination already has been achieved, it was pointed out, by
provisions of law which permit income taxes paid to the States to be
deducted in computing net income for Federal tax purposes, and the recipro
cal practice in more than two-thirds of the States of allowing Federal in
come tax payments to be deducted in computing net income for State tax
purposes# The report suggested further improvements by which the Federal
Government would make State income taxes deductible on an accrual basis,
even when other expenses were reported on a cash basis, and States which do
not allow reciprocal deductibility would change their statutes to allow it
-
2
-
asf-JPoon as revenue needs permit* Accrual basis deductibility would allow
the taxpayer to deduct in his Federal return the State income taxes which
were due and payable at the time the return is filed rather than the taxes
paid during the previous year*
Mutual deductibility is a fairly effective protection against exces
sive combinations of Federal and State rates* the Committee declared# It
pointed to the fact that the combined load of an 80 percent Federal and a
15 percent State rate is actually only 80*7 percent when there is recipro
cal deductibility*
The States should not be asked to surrender the income tax* the report
said* but the States should surrender to the Federal Government the
responsibility of determining jurisdiction} that is* what is within the
territorial province of each State to tax# ihis would strike at multiple
income taxation, notably multiple taxation of the inocmes of corporations*
’’The most promising approach to further coordination of net income
taxes is in administration,” the Gommittee observed# ’’Utilization by the
States of Federal income tax information is already developed to some
extent and some informal cooperation between administrative staffs now
occurs# But the field has scarcely been scratched* Joint returns* joint
audits* joint use of personnel and more uniform laws are a few of the pos
sibilities* A Federal-State Fiscal Authority could be of immense usefulness
in paving the way for this program*”
Partial coordination of Federal and State death taxes also has been
accomplished* according to the report* through a credit to the taxpayer
against his Federal tax for death taxes paid to the States# A credit for
taxes paid to States is allowed against the Federal tax up t o 80$ of the
taxes payable under the 1926 Federal estate tax# Since 1926* however* the
Federal law has been an ended several times to raise rates and lower exemp
tions*
”At the very least the credit should be adapted to the most recent
estate tax statute* with applicability in terms of the present rates and
exemptions* and to the taxation of gifts,” the Committee found* ”Bette*1
still* the entire estate tax system should be overhauled} Federal exemptions
should be reduced to at least the average leyel of State exemptions} the
estate and gift taxes should be integrated#” '
The State death taxes are ”plagued by interstate competition and
multiple taxation* and especially by the fact that estates are highly con
centrated in a relatively few States* though the wealth represented may
have been accumulated over a much wider area*” the report related «**•
’’The Federal Government could and should assume the task of determining
the taxpayer’s liability to the States* Qr better still* this matter could
be handled by joint administration#**♦The right to determine jurisdiction
might well be imposed as a condition under which the Federal Government
- 3 ~
•would offer its administrative services to the States« Going further,
it might also be imposed as a condition for the credit itself;"
The report recommends that the Federal tax on cigarettes be increas
ed to the extent of 2 cents per standard package and that the portion of
Federal revenue represented by this increase be distributed to the States
oh a per capita basis« The distribution would be conditional upon State
and municipal withdrawal from the tobacco tax field« Most States use the
2-cent rate in their cigarette levies;
-
"The tax is admirably adapted for Federal collection and State sharing,
and while this device is open to general objection in its curtailment of
State independence, its application in this instance would have so many
advantages that it is recommended at least as an experiment," the committee
said«
The per capita distribution plan would be weighted in favor of urban
populations;
In a study of the cost of collecting various Federal taxes, the
committee found that collecting each $100 of Federal tobacco taxes costs
only 18 cents* For the States, administration of tobacco taxes is con
siderably more expensive;
Of gasoline and motor vehicle use taxes, the report said in parti
"For the mo tor vehicle tax field the coordination device here recom
mended is separation of sources, the Federal Government to withdraw from,
the field as much and as soon as its financial exigencies will permit««’*'#
The basis of this recommendation-is that this tax field forms a lucrative
and badly needed source of revenue for the States, and one which they are
exploiting or might exploit adequately and satisfactorily,"
Other suggestions were exclusively Federal taxation of fuel used in
aviationj and mediation by a Federal*^ ta te Fiscal Authority in such problems
as that' of multiple assessment’of license fees against trucks used in
interstate traffic«;
Taxation of business has found relatively too large a place in the
American tax system, and this form of taxation needs to be "de—emphasized,"
the Committee reported*
"The confusion in this sector of the tax system is impressive and the
possibilities of repressive effects upon the economy are fconsiderable," the
report said* "The Federal system of business taxation is itself uncrystal—
lized and is at present ordered considerably by exigencies of war finance*
The absence of a Federal policy renders thé development of plans for
Federal-State coordination doubly difficult *"
- 4 ~
State practices in business taxation were severely criticized by the
Committee, which said that special State levies on business activity were
”characterized by great arbitrariness”, with most of them "based upon no
reasonable principle whatever,”
The Committee discussed retail sales taxes briefly. This tax, it said,
is not an overlapping tax at present, ”but if it becomes such, by virtue
of Federal entrance into the field, the coordination device to be highly
recommended is joint administration. Even vdth some diversities in State
laws, complete duplication of administration in this field would be waste
ful and otherwise undesirable,”
~ «Co -
r
f
1M S X
- 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*
oft*
f
I
Reserve Banks and Branches, 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 __
April 7, 1943________.
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
Washington
EOR RELEASE, MORNING NEWSPAPER,
Friday. April 2. 1943_________•
The Secretary of the treasury, hy this public notice, invites tenders
for $800,000,000
• or thereabouts, of
91 .-day Treasury bills, to be issued
—
'gJS
trie
on a discount basis under competitive bidding. The Dills of this series will
be dated
April
7> 1943
, and will mature
when the face amount will be payable without interest.
July 7. 1943
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
I
War
closing hour, two o!clock p. m., Eastern Steadbmfc time,
Monday, Appil 5,..19.43--
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
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...nnd 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 axe 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 I
J
FOR RELEASE, MORNING NEWSPAPERS
Friday, April 2t 1943
_____
TRE&SUHÏ DEPARTMENT
Washington
* - *; ;
•
...
. -, •.;cP
, ■
_ %'
\\\ ;jSs
The, Secretary" b£':‘the Treasury, by this .public notice,: •invites.'tenders
for $800,000*000,* or -thereabouts, of 91.*• day Treasury bills- to. be issued
;
^'"J| '‘■ •
.
on a discount basis under competitive biddings The. bills of this series
will ibe dated April 7J:;I943, and will mature i.Juiy 7, 1943, when the face
amount will b.e payable "without interest,..
They will be' issued in bearer
form only, and ’indenominations of $1,000, $5^000, $10,000, $100,000,
$300,000, and $1,000,OOO' (maturity value), >jr: : ; ■ ■ ■
Tenders .will be received at Federal Resery.e:Banks and Branches up
to the closing:'hour, 'two*-' o'clock p,m*, Easterner^tirne,-Monday,
April 5, 1943» Tenders will hot be received, .at, the Treasury Department,
Washington,* Each-tetider'must be for an even inultiple of $1,000, ^nd 'the
price offered must be expressed on the basis oî 100, with not more than
three decimals, e.tg#, 99,923» Fractions may not..be used. It is urged
that, tenders be made on't he printed forms and' forwarded in the special
envelopes which will be supplied by Federal Reserve,, Banks or Branches on
application,,ths refer
:
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 ty payment of 2 per
cent of the face amount of Treasury bills applied for, unless the tenders
are accompanied by an express guaranty ox payment ty an incorporated bank
or trust company.
Immediately after the closing hour, tenders will be^opened at the
Federal Reserve Banks and Branches, following which puolic announcement
will be made by the Secretary of the Treasury of tne amount and price
range of accepted bids, Those submitting tenders will be advised of the
acceptance or rejection thereof# The Secretary of the Treasury ex— ^
pressly reserves the right to accept or reject ary 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 oxfercd must be made or completed
at the Federal Reserve Bank in cash or other immediately available funds on
April 7, 1943*
35-97
(Over)
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 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) (1) of the Internal Revenue Code, as amended by
Section 115 of the Revenue Act of 194-1, 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 companies) issued
hereunder need include in his income tax return only the difference be
tween the price paid for such bills, whether on original .issue or on
subsequent purchase, and the amount actually received either upon sale or
redemption at maturity during the taxable year for which the return is
made, as ordinary gain or loss,
' Treasury Department Circular No, 418, 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,
Collections of income and excess profits
taxes deposited during March, 1943» amounted to $4,#82,184,543
and items still untabulated in some of the collectors’ offices
V £ o r the mont h>
will carry the total^over $5,00(3,000,000, Commissioner of
Internal Revenue Guy T. Helvering reported to Secretary
Morgenthau today*
Similar taxes collected and deposited
in March last year amounted to $>3,677 9
Comparative
reports from the sixty-four collection districts are as
follows:
TREASURY DEPARTMENT
Washington
F O R I M M E D I A T E RELEASE,
Thursday, A p r i l 1. 1 9 4 3
Collections
d u r i n g March,
untabulated
total
for
of i n come and excess p r o f i t s
1943,
taxes d e p o s i t e d
a m o u n t e d to $4,882,, 1 8 4 , 5 4 3 and itenis still
in some o f the c o l l e c t o r s ’ o f fices will
the m o n t h o v e r $ 5 , 0 0 0 , 0 0 0 , 0 0 0 ,
R e v e n u e G u y T.
Similar
Press Service
No. 55-98
taxes
c o l l e c t e d an d d e p o s i t e d in M a r c h last y e a r am o u n t e d
lection districts
Alabama
Arizona
Arkansas
1st C a l i f o r n i a
6th C a l i f o r n i a
Colorado
Connecticut
Delaware
F l orida
Georgia
Hawaii
Idaho
1st I l l inois
8 t h Illin o i s
Indiana
Iowa
Kansas
Kentucky
Louisiana
Maine
Maryland
C o m m i s s i o n e r of Internal
H e l v e r i n g r e p o r t e d to S e c r e t a r y M o r g e n t h a u . t o d a y .
to $ 3 , 0 7 7 , 9 3 1 , 9 7 6 .
Districts
carry the
Comparative reports
f r o m the s i x t y - f o u r c o l
are as follows:
.T otal Income and
E x c e s s Profits T a x
C o l l e c t e d a nd D e p o s i t e d
March 1 - 3 1 , 1943
$
32,890,974
9,400,783
13,155,553
147,495,495
123,402,568
25,419,604
125,539,362
81,870,806
34,127,356
42,174,874
20,499,659
9,351,415
363,553,508
59,822,920
95,266,270
42,656,723
41,974,486
41,146,288
38,942,125
17,303,887
117,166,338
T o tal Income and
E x c e s s Profits Tax
C o l l e c t e d and D e p o s i t e d
M a r c h 1 - 3 1 , 1942
$ 19,6 8 6 , 8 4 1
4,838,990
8,904,280
88,504,114
71,729,787
13,231,426
98,342,304
65, 6 9 4 , 6 2 2
27,435,392
23,200,750
5,465,441
4, 0 7 2 , 7 1 7
225,743,666
29,192,478
56,760,566
19,518,826
17,419,666
20,830,164
26,290,194
10,396,848
72,935,387
2
Districts
Massachusetts
Michigan
Minnesota
Mississippi
1st M i s s o u r i
6 th M i s s o u r i
Montana
Nebraska
Nevada
New Hampshire
1st N e w J e r s e y
5th New Jersey
New Mexico
1st N e w Y o r k
2nd N e w Y o r k
3rd N e w Y o r k
14th New York
21st N e w Y o r k
28th New York
Nor t h Carolina
N o r t h Dakota
1st Ohi o
1 0 t h Ohio
1 1 t h Ohi o
1 8 t h Ohio
Oklahoma Oregon
1st P e n n s y l v a n i a
12th Pennsylvania
23rd Pennsylvania
Rhode I s l a n d
South Carolina
South Dakota
Tennessee
1st T e xas
2 nd T e x a s
Utah
Vermont
Virginia
Washington
West Virginia
Wisconsin
Wyoming
TOTAL
T o t a l Income and
Excess Profits Tax
Collected and Deposited
March 1 - 3 1 , 1943
$178,741,041
221,911,627
79,145,409
13,529,536
80,839,235
34,709,487
11,728,966
22,834,411
6,481,496
10,929,279
28,529,763
146,417,614
5,609,206
119,418,563
378,625,842
319,137,650
115,582,345
'40,042,367
92,097,587
63,578,711
5,935,813
97.324.408
45.506.409
28,613,077
209,857,878
32,063,449
31,606,188
213,949,246
56,436,836
190,110,837
34,453,810
22,246,896
5,443,104
42,582,215
67,476,082
54,288,532
10,890,194
8,895,494
51,687,739
71,050,767
.27,184,183
116,081,244
5,449,013
$4,882,184,543
T o tal Income and
E x c e s s P r o fits T ax
C o l l e c t e d a nd Dep o s i t e d
M a r c h 1 - 31, 1942
I 98,919,558
213,259,980
33, 2 1 6 , 2 0 8
8,290,002
49,144,928
17,685,462
5,578,908
10,167,750
3,472,963
6,705,478
19,633,283
108,455,738
2,873,515
77,083,439
256>932,259
213,516,681
73,673,654
26,351,217
52,777,448
35,147,192
2,179,378
52,589,108
27,155,671
15,346,170
125,742,266
19,839,640
16,595,290
112,840,724
32,480,334
127,996,021
27,933,842
12,825,179
2,134,274
24,783,907
45,196,095
32,484,797
5,7 2 3 , 3 5 1
4,809,896
40,843,459
42,838,849
19,512,744
60,023,369
2,977,490
$3,077,931,976
OüPÍ
EXTENT OF OVERLAPPING IN MAJOR TAX SOURCES
Fiscal Years Ending in 1941
F ed era!
Corp.
Income
Tobacco
Death
and Gift
Individ.
Income
"V
Federal Tax
Predominates
V //////X
Alcoholic
Beverages
Payroll
S ta te
l
Stock
Transfer
~IL o c al
Mise.
Corp.
Motor
Fuel
Motor Veh.
Licenses
--
j
State Tax
Predominates
Source: Table 2 , Property ta x fig ures adapted from Bureau o f the Census, Financing Federal, S tate and Lo cal Governments'- 1941.
-
d-
-e
Property
Local Tax
Predominates
that
education
participation
minority
is-a p a r t
and i n t e r e s t s , " the
s h o u l d be made to
the o v e r w h e l m i n g
&"uhciris;n d a r d s
o
way of life
means r e g i m e n t a t i o n and the
r i ghts
cam , and
not
of their
this
na .tional interest
loss of important
report set
feel in U
in
and- that national,
f o r t h . ,"Concessions
£
t
tne
of e due at 1 on al op p o r t un it y , the
e x te nd
of F e d e r a l aid for
to: a. veto
e q u a l iza tion
features. ..Nor., should it block, a c o n t r o l p r o g r a m
n e c e s s a r y to
secure the F e d e r a l o b j e ctives.
a c c e p t a b l e f e a t u r e of our w a y of life
It is n o t an
to keep a l a r g e s e c t i o n
of our p o p u l a t i o n in i g n o r ance."
The C o m m i t t e e p r e s e n t e d
e x t e n s i v e dat a o n the
education
probiem.
Wit h f e w exceptions,
a b i lity
are m a k i n g the
it said,
the States
lowest
in
fin a n c i a l
greatest r e l a t i v e .efforts to s u p port
p u blie e due at i o n .
The r a n g e of
average
p l a c e d at 9§ to 6 ^ months,
school terms
while
for d i f f e r e n t
States was
in i n d i v i d u a l d i s t r i c t s
the terms
sometimes are less t h a n s i x months.
"Great
d i s p a r i t y " was r e v e a l e d in a v a i l a b i l i t y of s c h ools
. Ah
and libraries, in sa l a r i e s p a i d teachers, a n d i n e q u a l i t y of
A'
b u i l d i n g s anj^ f a c i l i t i e s . Values of
school p r o p e r t y p er p u p i l r a n g e d
jSB&gafcg
from $44 5 in the highest
ra n k i n g to $ 7 5
in the
l o w e s t r a n k i n g State.
F o r a t y p i c a l s c h o o l year, e x p e n d i t u r e per p u p i l
d a i l y attendance, r a n g e d from
pi54 in N e w Y o r k to P 25
"The m a r k e d l y l i m i t e d educ a t i o n a l
States,
of the
taxpaying- a b i l i t y
States,
for e q u a l i z a t i o n aid,"
"The S t a t e s of .lowest1 p e r
capita
in A r k a n s a s .
o p p o r t u n i t y in the S o u t h e r n
c o m p a r e d w i t h N o r t h e a s t e r n and Pacific
s t r o n g e s t arg u m e n t s
in average
has b e e n
the r e p o r t
w e a l t h ,income,
one
said.
and
ten d to hav e the la r g e s t n u m b e r s of c h i l d r e n
relative to adult p o p u l a t i o n , "
zag Bill li-felftilrfai
Although- the F e d e r a l G overnment
educational
contribution
pointed out.
s y s t e m for a lon g time , "
"lias h a d
one
its p r e s e n t
runs to o n l y 2 p e r c e n t of the t o t a l
finger in t h e
financial
cost,
it was
•elec e, F i s c a l Relations
report - Education
T R E ASURY D E P A R T M E N T
Washington
P r e s s S e r vice
___ ^
# A L L EDITIONS
Monday . A p r i l 5 t 194:5
No.
1
t j w w
Federal, a id
to. S t a t e a n d l o c a l g o v e r n m e n t s
for educational,
01
p u r p o s e s s h o u l d he e x p a n d e d to pro vie*,e f o ig m a i n t p nance
minimum
a national
of o p p o r t u n i t y for at le as;!?" element a ry^'tfuc at ion,
the
Oommittee on I n t e r g o v e r n m e n t a l Fiscal R e l a t i o n s d e c l a r e d in
report to S e c r e t a r y of the T r e a s u r y M 0rgenthau.
suggested'
that
through Federal
embodying d i f f e r e n t i a l s w h i c h n o t e
the
State a n d l o cal g o v e r n m e n t s
"Regarding i m p r o v e m e n t s
first that w h i l e the
u n d e r the p r e s s u r e
the
scope
of the
grants,
to finance
in the
"In m a n y States,
T he
balance by an
functions
such
vocational
State
l o c ally s u p p o r t e d
education,
insure
is, o-f fun c t i o n s
Government
undpie strain u p o n
to
include
of suc h stro n g
sho u l d
agitation f o r
persistent,
at the
and g e n e r a l
into
additional
by aid
differential
of a'national
national -interest t a t
u n d e r w r i t e a minimum,. pro g r a n and
l o c a l resources.
followed
t e n d e d to-
a n d l o cal support
eve r y w h e r e p r o v i d e d wi t h o u t
It seems that t h e .
s trongest
for p r e f e r r e d p o s i t i o n in this
^education,
h ave
s uch
is a c l e a r n a t i o n a l interest.
that the m i n i m u m s t a n d a r d be
claimant
functions,
functions as r e l i e f
its scope
co call
stated.
system s h o u l d be r e v i s e d and b r o ught
extension of*
is o b s e r v e d
it is a. m i s t a k e
"The "aid s y s t e m h as d e v e l o p e d no concept
the Federal
it
c e r t a i n Federally- s u p p o r t & d
in w h i c h there
:mln-iinum,- that
undertakings.
developed very rapidly
recent d epression,
get the lion's s h a r e of Federal,
expense of suc h
wit h the "grants
aid system,
of F e d e r a l A i d
as old-age a s s i s t a n c e a n d
ch i l d r e n
of v a r y i n g a b i l i t i e s of
existing p r a c t i c e s a s y s t e m , 11 the report
education.
^ The C 0mmittee
a n a t i o n a l m i n i m u m of a id to dependent
also could he''developed
its
respect
is
to d e p e n d e n t children.
elementary
Although
aid's for ol d - a g e a s s i s t a n c e
minimum-standards
2SB& here-
are not
"has
oeerr
so cl e a r l y of
natlo n a l in te r e s t ,"
Education
is a f u n c t i o n idiich
is t r a d i t i o n a l l y and l e g a l l y
a 'responsibility of »^tate and l o c a l g overnment,
said,
but calls
the Committee
for m ore g e n eral a n d more g e n e r o u s F e d e r a l aid
are b e c o m i n g m o r e and m o r e i nsistent.
"Much w e i g h t neeels to be
g i ven t-cMie v i e w H e l d b y m any
people
TREASURY DEPARTMENT
Washington
Bt)R RELEASE• A L L EDITIONS,
M onday, A p r il 5, 1 9 4 3
Press Service
No» 35-99
4/2/43
Federal a i d to State a nd local g o v e r n m e n t s
purposes
for educational
s h o u l d be e x p e n d e d to p r o v i d f for m a i n t e n a n c e
of a
n a t i o n a l m i n i m u m of o p p o r t u n i t y fo r at least e l e m e n t a r y e d u c a
tion,
the C o m m i t t e e on I n t e r g o v e r n m e n t a l
Fiscal Rotations d e
c l a r e d in its repo r t to S e c r e t a r y of the T r e a s u r y Morgenthau.
T he C o m m i t t e e s u g g e s t e d that a n a t i o n a l m i n i m u m of aid to
d e p e n d e n t c h i ldren also could be d e v e l o p e d th r o u g h Federal
grants, w i t h the g r ants emb o d y i n g d i f f e r e n t i a l s w h i c h take
4^
^
v a r y i n g a b i l ities of the State and local gove r n m e n t s
to f i n ance such under t a k i n g s .
■p-t
4. N j S ^ P d i n g i m p r o v e m e n t s in the aid system, it is o b s e r v e d
i i r s t that, w h i l e the scope of Federal aid d e v e loped v e r y
r a p i d l y u n d e r the p r e s s u r e of the r e c e n t depression, it is a
m i s t a k e to call the e x i s t i n g p r a c t i c e s a system/' the report
stated.
In m a n y States, certain F e d e r a l l y - s u p p o r t e d functions,
s u c h as o l d -age a s s i s t a n c e an d v o c a tional education, have
tended to g e t the l i o n ’s share of Federal, State and local suppor t at the expense of such l o c a l l y s u p p o r t e d functions as rel i e f and g e n eral education.
The s y s t e m should be r e v i s e d and
int0 ba l a n c e Ly an e x t e n s i o n of its scope to Include
a d d i t i o n a l f u n c tions in w h i c h there is a c l ear n a t i o n a l i n t e r
est.
. „
& 4 d s y s t e m has d e v e l o p e d no concept of a n a t i o n a l
m i n i m u m , that is, of fu n c t i o n s of suc h strong national interest
•cnat^tne federal G o v e r n m e n t should u n d e r w r i t e a m i n i m u m p r o g r a m
a nd insure that the m i n i m u m st a n d a r d be everywhere p r o v i d e d
w i t h o u t u n d u e s t r a i n u p o n local resources.
It seems that the
s t r o n g e s t cla i m a n t for p r e f e r r e d p o s i t i o n in this r e spect is
e<3ucation, f o l l o w e d by a id to d e p e n d e n t children.
A l t h o u g h a g i t a t i o n for d i f f e r e n t i a l aids for old-age assistance
has b e e n p e r s istent, m i n i m u m standards here are not so clearlv
of n a t i o n a l i n t e r e s t . ”
E d u c a t i o n is a f u n c t i o n w h i c h is t r a d i t i o n a l l y and l e g a l l y
a r e s p o n s i b i l i t y of State and local g o v e rnment, the Committee
2
said, b u t ^ c a l l s fo r m o r e g e n eral and m o r e generous
are b e c o m i n g m o r e and m o r e insistent.
Federal aid
" M u c h w e i g h t n e eds to be g i ven to the view hel d by m a n y
p e o p l e that e d u c a t i o n is a part of their w a y of life and that
n a t i o n a l p a r t i c i p a t i o n m e a n s r e g i m e n t a t i o n and the loss of im
p o r t a n t m i n o r i t y rights a nd i n t e r e s t s , ” the r e port set forth.
C o n c e s s i o n s can a nd should be m a d e to this feeling, out in
r e c o g n i t i o n of the o v e r w h e l m i n g n a t i o n a l int e r e s t in the m a i n
tenance^ of m i n i m u m standards of e d u c ational opportunity, the
c o n c e s s i o n s should not extend to'a veto of Federal aid for
ge n e r a l e d u c a t i o n w i t h e q u a l i z a t i o n features.
N o r should it
b l o c k a control p r o g r a m n e c e s s a r y to secure the Federal o b
jectives-.
It is n o t an a c c e p t a b l e feature of our w a y of life
to k e e p a large s e c tion of our p o p u l a t i o n in i g n o r a n c e . ”
The C o m m i t t e e p r e s e n t e d extensive data on the e d u c a t i o n
problem.
W i t h few exceptions, it said, the States l o w e s t in f i n a n
cial a b i l i t y are m a k i n g the g r e a t e s t relative efforts to sup-'
port p u b l i c education.
The range of a v e rage school terms for dif f e r e n t States was
p l a c e d at 9 1/2 to 6 1/2 months, w h i l e in individual districts
the terms sometimes are less than six months.
”Great d i s p a r i t y ” .was r e v e a l e d in a v a i l a b i l i t y of schools
and lib r a r i e s , in salaries p a i d teachers, and in the q u a l i t y
of b u i l d i n g s and facilities.
V a l u e s of school p r o p e r t y p e r
pupil rang e d fro m $ 4 4 5 in the h i g h e s t ranking to $75 in the
l o w e s t ranking State*
For a typical school year, expe n d i t u r e p er pupil in a v e r
age d a i l y a t t e n d a n c e r a n g e d f r o m $ 1 3 4 in N e w Y o r k to $2 5 in
A r k ansas,
■
”The m a r k e d l y l i m i t e d e d u c a t i o n a l o p p o r t u n i t y .in the
S o u t h e r n States, c o m p a r e d w i t h N o r t h e a s t e r n and P a cific States,
has b e e n one of the strongest a r g u ments for e q u a l i z a t i o n a i d , ”
the r e port said.
”T h e ^ S t a t e s of l o w e s t p e r capita wealth, income, and taxp a y i n g a b i l i t y tend to h a v e the largest n u m b e r s of children
r e l ative to adult p o p u l a t i o n . ”
A l t h o u g h the Federal G o v e r n m e n t ”has h a d one finger in the
e d u c a t i o n a l s y s t e m for a l ong t i m e , ” 'its p r e s e n t financial c on
t r i b u t i o n runs to only 2 p e r c e n t of the total cost, it was
p o i n t e d out.
- -roOo-
EXTENT OF OVERLAPPING IN MAJOR TAX SOURCES
Fiscal Years Ending in 1941
Federal
Corp.
Income
Individ
Income
Death
and Gift
Federal Tax
Predominates
Alcoholic
Beverages
V //////X state
Payroll
I: : : : : : : i^oca/
Stock
Transfer
Mise.
Corp.
*— .
Motor
Fuel
Motor Veh.
Licenses
Property
____ _______ J
State Tax
Predominates
Local Tax
Predominates
Source•• Table 2 ; Property ta x figures adapted from Bureau o f the Census, Financing Federal, S tate and Local Governments' 1941.
B -3 9 7
Wm
in iBiiiiiin¿1
@FedFRASER