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Ponivi 5030
JUN 141972
TREASURY DEPARTMENT
EOR RET EASE, MORNING PAPERS,
.MONDAY, January 9, 1928.
TREASURY DEPARTMENT
STATEMENT BY SECRETARY MELLON. i
The Tt*eASJiry- announces that on January 16th it will issue
new 3^- per cent Treasury notes, Series C-1930-32, in exchange for
Third Liberty Loan 4-|- per cent bonds of 1928.
The new notes will be dated and bear interest from January
16, 1928, will mature December 15, 1932, and will be callable on and
after December 15, 1930.
These notes will be issued only in exchange
for the Third Liberty Loan bonds, and the amount to be issued Will be
limited by the amount of such bonds tendered and accepted.
The Third Liberty Loan bonds mature on September 15, 1928, and
will not bear interest after that date.
The present exchange offering
gives holders of the Third Liberty ioan bonds an opportunity to exchange
their bonds as of January 16, 1928, par for par, for Treasury notes bear
ing 3^- per cent interest from January 16, 1928.
Those taking advantage
of this offer will receive, when the new notes are delivered, interest
in full to March 15, 1928, on their Third Liberty Loan bonds, without
deduction because of the earlier redemption.
This interest payment will
compensate holders of these bonds for the premium at which the bonds are
now selling.
The Secretary of the Treasury reserves the right to close the
offering at any time without notice.
The toxV of the official circular follows:.
-
li
2
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The Secretary of the Treasury offers for subscription,
at par, through the Federal Reserve Banks, in exchange for Third Liberty
Loan 4^ per cent bonds of 1928 (hereinafter referred to as Third
s),
Treasury notes of Series C-1930-32 of an issue of gold notes of the
United States authorized by the act of Congress approved September 24,
1917, as amended.
The amount of the issue will be limited to the amount
of Third 4^*s tendered and accepted»
2.
Third Liberty Loan 4^ per cent bonds of 1928 will mature
on September 15, 1928, and will not bear interest after that date.
In
terest on any Third 4-^’s surrendered and accepted in exchange for the
Treasury notes herein offered will be paid in full to March 15, 1928,
DESCRIPTION OE NOTES
3. The notes will be dated January 16, 1928, and will bear
interest from that date at the rate of 3^- per cent per annum payable
on June 15, 1928, and thereafter semiannually on December 15 and June
15 until the principal amount becomes payable.
The notes will mature
December 15, 1932, but may be redeemed at the option of the United States
on and after December 15, 1930,, in whole or in part, on any interest day
or days, on six months* notice of redemption given in such manner as the
Secretary of the Treasury may prescribe.
In Case of partial redemption
the notes to be redeemed will be determined by such method as may be
prescribed by the Secretary of the Treasury.
Erom the date of redemption
designated in any such notice, interest on the notes called for redemp
tion shall cease.
Th.e principal and interest of the notes will be
3
-3-
payable in United States gold coin of the present ct&ndard of value.
4.
Bearer notes with interest coupons attached will "be issued
in denominations of $50, $100, $500, '$1,000, $5,000, $10,000 and $100,000.
The notes will not he issued in registered form.
The notes will he ac
ceptable to secure deposits of public moneys, hut will not hear the cir
culation privilege.
5»
and interest,
The notes of this series shall he exempt, both as to principal
from all taxation now or hereafter imposed by the United
States, any State, or any of the possessions of the United States, or by
any local taxing authority, except (a) estate or inheritance taxes, and
(h) graduated additional income taxes, commonly known as surtaxes, and
excess-profits and war-profits taxes, new or hereafter imposed by the United
States, upon the income or profits of individuals, partnerships, associa/
tions, or corporations*
5.
The notes of this series will be accepted at par during
such time and under such rules and regulations as shall be prescribed or
approved by the Secretary of the Treasury, in payment of income and profits
taxes payable at the maturity of the nofies, and, with respect to any such
notes that may be called for prior redemption, will be receivable in like
manner and for the same purpose at the redemption date fixed.
APPLICATION AND ALLOTMENT
7.
Applications will be received at the Federal Reserve Banks,
as fiscal agents of the United States.
Banking institutions generally
will handle applications for subscribers, but only the Federal Reserve
Banks are authorized to act as official agencies.
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8.
The right is reserved to reject any subscription,
in
whole or in part, and to allot less than the amount of notes applied
for, and to close the subscriptions at any time without notice, and the
act of the Secretary of the Treasury in these respects will he final,
PAYMENT
9.
Payment for any notes allotted may he made only through
the surrender of a like principal amount of Third 4jls which will he
accepted at par, and, at the time of delivery of the notes, interest
on any such Third 4 ^ s so surrendered and accepted will he paid in full
to March 15, 1928.
.Third Liberty Loan 4| per cent bonds tendered in
payment for notes subscribed for should be presented when the subscrip
tion is tendered.
If any subscription is rejected in whole or in part,
any bonds which may have been tendered and not accepted will be returned
to the subscriber,
SURRENDER OF BONDS
10.
Surrender of coupon bonds. - Third 4 ^ s in coupon form
tendered for exchange for Treasury Aotes issued hereunder should be
presented and surrendered to a Federal Reserve Bank.
be delivered at the expense and risk of the holder.
The bonds must
facilities for
transportation ef bonds by registered mail insured may be arranged be
tween incorporated banks and trust companies and the Federal Reserve
Banks, and holders may take advantage of such arrangements when avail
able, utilizing such incorporated banks ^pd trust companies as their
agents.
Incorporated banks and trust companies are not agents of the
United States under this circular
11.
Coupons dated March 15, 1928, and September 15, 1928, must
be attached to such coupon bonds when presented*
At the time of delivery
of the Treasury notes of Series C-1930-32 (or interim certificates) upon
allotted subscriptions, Federal Reserve Banks will pay to the subscriber
or his authorized agent the interest from September 15, 1927, to March 15,
1928, on the coupon Third 4j!s surrendered in exchange*
12.
Surrender of registered bonds. - Third 4-^-t s in registered
form, tendered for exchange for Treasury notes issued hereunder, should
be assigned by the registered payee or assigns thereof to 1lTHE SECRETARY
OF THE TREASURY FOR REDEMPTION, n in accordance with the general regula
tions of the Treasury Department governing assignments for transfer or
exchange into coupon bonds, and thereafter should be presented and sur
rendered to a Federal Reserve Banjo.
expense and risk of the holder.
The bonds must be delivered at the
At the time of delivery of the Treasury
notes of Series C-193C— 32 (or interim certificates) upon allotted subscrip
tions, Federal Reserve Banks will pay to the subscriber or his authorized
agent the interest from September 15, 1927, to March 15, 1928, on the
registered Third
13.
s surrendered in exchange.
The Federal Reserve Banks, as fiscal agents of the United
States, are hereby authorized and requested to receive subscriptions for
Treasury notes hereunder, to receive Third 4^*s tendered in exchange, to
make allotments of subscriptions on the basis and up to the amounts in
dicated to them by the Secretary of the Treasury, and to make delivery
of Treasury notes on full-paid subscriptions allotted, and, pending delivery
é
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of definitive notes, to issue interim certificates.
FURTHER DETAILS
14.
Any further information which may be desired as to the
exchange of Third 4^’s for Treasury notes under the provisions of this
circular may he obtained upon application to a Federal Reserve Bank.
The Secretary of the Treasury may at any time, or from tine to time,
prescrioe supplemental or amendatory rules and regulations governing
the exchange, and may terminate the offer at any time iii his discretion.
A. W. MELLON,
Secretary of the Treasury
7
FOR RELEASE, 3:00 P.M. OR AFTER
DELIVERY IS BEGUN, SATURDAY,
JANUARY lH, 192S.
treasury department
Speech of
Hon. A. W. Mellon,
Secretary of the Treasury,
at the seventh Annual Luncheon
of the Women's National Republican Club
at the Waldorf-Astoria Hotel,
New York,
January l4, 192S.
Note:
For full text of speech see Subject File:
Secretary's Speeches
TREASURY DHPAllTI’EFT
FOIL RELEASE ROKFIFG PAPERS
SUFDAY, JAFUARY 15, 1928.
SPEECH TO BE DELIVERED BY IPDESSEOAET-AHY OP THE TREASURY
OoPEII L. MILLS,. AT THE "SATURDAY DISCUSSIONS» LUFCHEOF
OP THE FATIOFAL REPUBLICAIT CLUB
AT 54 UE,ST 40th ST., JEW YORK CITY,
OF SATURDAY, JAFUARY 14, 1928.
In considering any program of tax reduction or reform, it is
.always well to direct one’s attention, first, to the existing tax system
as a whole, with a view to ascertaining the principles upon which it is
based, anc. determining whether the burdens are distributed with some de
gree of equity, and in accordance with the ability of the various taxpaying groups to contribute to the support of government.
This would
appear to be obvious, and yet this preliminary step is frequently over
looked, and nearly always impatiently brushed aside by those who desire
to concentrate attention on some particular tax which, for selfish reasons,
they desire to see reduced or repealed.
Of some 4 billion 129 million dollars of receipts collected last
year by the United States Government, approximately 605 million were re
ceived from customs duties, 2 billion 225 million dollars from the income
tax, 644 million from miscellaneous Internal Revenue or excise taxes, and
654 million dollars
from a number of miscellaneous items such as the
proceeds of sales of government owned securities and of the sale of surplus
property, Panama Canal tolls, etc., which cannot be classified as tax
revenue, but which, nevertheless, constitute an important resource.
Tax
revenues, strictly speaking, aggregated 3 billion 470 million dollars.
Of
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this amount, direct taxes, that is, income and estate taxes, contributed 2
billion 320 million dollars; and indirect taxes, that is, customs and miscel
laneous Internal Revenue, approximately one billion 150 million dollars.
3y
direct taxes I mean those taxes that are not, generally speaking, passed on
to the consumer; and, by indirect taxes, I mean those tha.t are passed on.
It thus appears that the scales lean very definitely in favor of those who
are not subject to direct taxes— that is, the great mass of the people.
This is as it should be, if the principle of taxing in accordance with
ability to pay is to have adequate recognition, and is in marked contrast
with the situation which exists in the States and municipalities, where chief
reliance is placed on the real property tax.
Under existing conditions in
our large cities, this form of tax is unquestionably passed on to the rentpayer.
tion.
We have, therefore, in the United States to-day an anomalous situa
The decreasing Federal tax burden tends to be borne more and more
by a limited number of people who, on the whole, are those best able to sup
port the burden; while the constantly increasing burden of State and local
taxes is distributed among those having a small tax-paying capacity.
It is
for this reason that the tax problem in States and municipalities is of
infinitely more vital importance to the great mass of the people than any
contemplated changes in our Federal revenue laws.
If, on the first of
February next, in the rent bill presented to the millions of tenants in
New York City, that part of the rent which represents taxes could be segre
gated and clearly indicated this statement of mine would arouse in this
great city of our« universal attention, but, as matters now stand, as in the
past it will probably fall on deaf ears.
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Conceding that, generally speaking, our Federal tax system
is, on the whole, a well-balanced and equitable one, there do exist
certain inequalities that are hard to justify.
They are traceable,
in the main, to two causes: first, the number of direct taxpayers
making a real contribution to the support of government is too limit
ed; and, in the second place, the rates imposed on some classes of
direct taxpayers are out of line.
Under the first head, I classify
individual income taxpayers; under the second, corporations or their
stockholders.
For the calendar year 1925, 9,560 taxpayers returned
about 49 per cent, of the total individual income tax returned.
Out
of a total of some $734,000,000 returned by individuals, 327,000 in
dividuals returned $701,000,000, and 2,174,000 returned only $33,000,000.
These figures make it only too clear that, in so far as individuals are
concerned, the income tax has ceased to be a national tax and has become
a blass tax of a very limited character.
must be accepted.
This is a situation which
The water is over the dam, but, as between individual
income taxpayers, some of the inequalities should be ironed out by a re
vision of the rates applicable to the so-called intermediate brackets.
Turning, now, to our second group, that is to say, the corpora
tions of their stockholders, you will have noted that I treat the cor
poration income tax as a direct tax, which, according to the definition
I have given, implies that it is not passed on to the consumer, and must,
therefore, be paid by the stockholder.
I know that many business men will
challenge such a conclusion, but, leaving aside the indire'ct effects of such
a tax, more especially when levied at high or excessive rates, and admitting
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that there are exceptions to the rale, my opinion is that except under
unusual circumstances, a tax on net income cannot he shifted by the
person on whom it is laid in the form of an addition to price.
This,
conclusion is supported by competent authority.
It is in agreement with the work of the Committee on national
Debt and Taxation of O-reat Britain, charged with the duty of investigating
the incidence of income tax.
That Committee decided that the issue could
be reduced to a question of fact subject to statistical study.
Such a
study was made by them for the two fiscal years 1920-21 and 1922-23, the
income tax returns of a sample of all public companies or corporations
being used as a source for the necessary data.
The tabulated data indi
cated:(1)
A significant proportion of the total sales in each industry
were made at no profit or at a loss during each quarter of the
two years studied.
(2)
The median range of sales 7/ere made at no profit or at small
profit rates.
(3)
The trend of profits during the quarter periods studied follov/ed
the trend in prices.
The conclusion of the committee was that prices are determined in the im
mediate market, and that the marginal producers— those making no profits—
control a significant proportion of the volume of sales at ary time.
such circumstances, it would be impossible to shift the tax.
Under
The Committee
stated, "We conclude that the broad economic argument is true over the
whole field, and for approximately the whole of the time, any exceptions
o
being local or temporary and insufficient to invalidate it."
Conditions in this Country do not seen to be essentially dif
ferent«
preliminary Statistics of Income for 1936 show that, whereas
249,000 corporations reported a profit, no less than 164,000 reported
deficits aggregating
over two billion dollars.
It seens probable, therefore, that in the main our present
tax of 13|- per cent, on the net income of corporations ultimately comes
out of the pockets of the owners of the corporations, the stockholders.
It has been estimated that there are some 3,000,(100 stockholders in
the United States.
There are probably more.
These 3,000,000 stock
holders pay more than their just share of taxes not only as compared
with other income taxpayers, but as compared with all other classes
of taxpayers.
In so far as the individual income taxpayers are conbe
cerned, it mast/remembered that there are only 2,500,000 of them,
that the average rate of tax on their income has been reduced to 4.20
per cent; that less than 9,000 pay at the rate of 13|- per cent, on
their taxable income; whereas the 3,000,000 stockholders are taxed
at the rate of 13§- per cent, on their proportionate share of the in
come of the corporation, and this irrespective of whether their in
dividual income is sufficiently great to subject them to the individual
income tax at that rate, or, for that matter, to any individual income
tax at all.
6
Comparing the tax paid by corporations, that is, by their
stockholders, with all other classes of taxpayers, it will be found
that last year, exclusive of back taxes, the former as such contributed
$1,125,000,000 to the Federal Government, as contrasted with $763,000,000
paid by individual income taxpayers, many of them, of course, stockholders,
and with $1,150,000,000 paid through indirect taxes by our entire population of 114,000,000 people.
crimination.
There is no logic or justice in such a dis
There are, to be sure, many advantages in the corporate form
of conducting business, but these certainly do not constitute sufficient
justification for such a disporportionate tax burden.
Looking, then, at the whole picture, and not just selfishly at
some particular part, the most important feature of any tax revision program
should be a reduction of the corporation tax rate, and, from a negative
standpoint, if we desire to retain some measure of balance between direct
and indirect taxes, there should be no further repeal at present of exist
ing excise or indirect taxes.
In taxation there are certain ideals that should be aimed at: a
broad base, low rates, reasonable-diversification, and not too great reliance
on one or two taxes, particularly when their yield is susceptible to wide
variations, owing to changing business conditions.
There is very real danger
at the present time that some of these sound principles m y be disregarded,
and that, should some of the existing excise taxes,, that
applied at a low
rate and on the very broad base impose no hardship on anyone, he repealed,
our revenue system may become unduly concentrated.
This will be unsatisfactory
from the standpoint of the budget because, subject as they are to wide fluctua
tions, one or two sources on which chief reliance will be placed will constant
ly subject the revenue of the G-overnment to sweeping variations, resulting in
periodical deficits or excessive surpluses.
From the standpoint of the in
dividuals and business affect&d, the situation will be undesirable, since it
will necessarily result in a constant shifting of rates.
In so far as I am concerned, I would limit tax reduction at the
present time to a revision of the rate on corporation income, a revision of
the rates applicable to the intermediate brackets, some provision for the relief
of the small corporation that really is equivalent to a partnership, and the
repeal of the Federal Estate Tax.
.Having disposed of the question of what tax reforms are desirable,
the next question is, what reductions do the revenue needs of the Government
permit?
There has been a vast amount of discussion, and there exist miscon
ceptions that should be corrected.
It has been suggested in some quarters
that the interests of the taxpayers have been sacrificed to a program of exe
cessive debt reduction.
Yet the fact is that, since 1921, the taxpayers
have benefited by three sweeping tax reductions which aggregate approximately
one billion 600 million dollars a year.
It is true that from June 30, 1921,
to June 30, 1927, the public debt has been reduced by 5 billion 466 million
dollars, but of this amount o2,390,000,000 only were from surplus funds,
and in this item of surplus there are to be found a number of items of a non-
recurring character, such as hack tax collections and receipts from the dis
posal of such capital assets as railroad securities, Farm Loan Bonds, assets
of the War Finance Corporation, and surplus war material.
Taking the last five years as typical, it is interesting to note
that, if these items he excluded, in the year 1923 there would not have been
a surplus hut a deficit of Sj>89,000,000; in the year 1924, a surplus of hut
ipl69, ,000,000; in the year 1925, a deficit of :193,000,000; in the year 1926,
a surplus of ¿162,000,000;>and, in the year 1927, a surplus of ^221,000,000,
instead of 8635,000,000; or an average surplus of 174,000,000 for the five
years.
Of the two billions, approximately, of debt retirement from surplus
during the five fiscal years ending June 30, 1927, one billion 700 million
dollars is accounted for by,these special temporary items, including no less
than )900,000,000 from the realization of capital assets.
It must be conceded
that there could be no better application of the proceeds of capital assets
than to the reduction of the national Debt.
These figures present a pretty
complete example, to those people who, far from rejoicing over the existence
of these surpluses and our consequent ability to reduce the national Debt,
deplore them as evidences of an imaginary injustice to taxpayers.
Few people ever stop to consider what a colossal burden our public
debt constitutes.
Since 1917 we have paid out over 8 billions in interest,
and that means that we have had to raise, 8 billions in taxes.
Continued
heavy interest charges necessarily mean heavy taxes to meet them.
interest charges spell reduced tax charges.
Reduced
Debt reduction means, therefore,
tax reduction, and, what is better still, permanent tax reduction.
It means something more.
It means a steadily improving government
credit and the enhanced value of government securities, owing to their in
crossing scarcity.
This, in turn, enables the Government to horror.' at lower
interest rates, and the reduction can be translated into further tax reduction.
From 1921 to the present tine, the average interest rate on our public debt
decreased from 4.29 to 3.88.
On our interest bearing debt Dec. 31, 1927,
of 17 billion 685 millions, this decrease in the rate amounts to $72,500,000
per annum.
For further illustration, let us consider the refunding of the
Second Liberty Loan Bonds.
The annual interest saving on the securities is
sued, as contrasted with an equivalent amount of Second Liberty Loan Bonds,
«-mounts to over ^21,000,000, and if to this be added the annual interest
saving on the,. Second Liberty Loan Bonds retired, which amounts to $24,000,000,
the total annual interest saving resulting from the refunding and retiring
operations conducted during the last twelve months in respect of this single
issue, aggregates ;45,000,000.
It is estimated that from June, 1921, to June, 1928, interest pay
ments on the public debt will have diminished by approximately j275,000,000.
Some people may represent this to be against the interest of the taxpayer.
I clcim without qualification it to be in his interest.
There is another misconception, more or less widespread in character*
Many people are still thinking in terms of post-war adjustment.
Ever since
1921 we have been making sweeping reductions in taxes that ran not into
scores of millions but hundreds of millions.
Our ability to do so was due* '
in the first place, to the drastic cut in expenditures inaugurated in 1921;
in the second, because the rising tide of prosperity brought a n ‘increase in
revenues, in spite of reduced tax rates; and, thirdly, due to the fact that
10
our revenues were augmented by the proceeds of the sale of capital assets,
acquired as a result of the % r f and from hack taxes that had accumulated
owing, largely, to the excess profits taxes and to the difficulty of adminis
tering new complicated tax laws carrying very high rates*
All of this was
abnormal, but since the abnormal situation continued over a number of years,
it resulted in the very definite impression that tax reduction was hardly
worthy of consideration unless it ran into hundreds of millions.
Those who
have been urging excessive reduction of taxes do not talk in the moderate terms
that would ordinarily satisfy.
They talk sweepingly and generally of three
or four hundred million dollars of reduction.
They are still using the terms
and the figures we were accustomed to in 1921, 1924 and 1926, neglectful of
the fact that the picture has been changing.
Except for the one big item of
the public debt, it can be fairly said that we have come back to normal, with
expenditures and receipts about balanced.
Again, excepting the public debt
item which offers the greatest possibility for tax reduction in the future,
from now on when we discuss reduction in taxes we will have to use moderate
figures and. face the fact that we must so adjust our public economy that the
savings of a few millions, yes, thousands, will seen well worth while.
Against this sober and prosaic background, let us now consider what
can be done in the immediate future.
The estimated surplus for 1928 is .¿454,000,000, including all items,
and -8136,000,000, exclusive of extraordinary items.
There is no great dispute
as to the 1928 figures, but the correctness of the surplus of $252,000,000 in
the fiscal year 1929 has been challenged, on the ground that the Treasury has
underestimated
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the revenues.
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It is, of course, very easy for gentlemen who have no
particular responsibility to affirm that there will he $i4-00,000,000
available for tax reduction.
Their position is entirely different
from the financial officer of the Government on whom is nlaced the
great responsibility of submitting accurate estimates upon which the
Congress may rely.
The former can afford to make their estimates confom
to their wishes; the latter is bound to make his program fit the facts*
The Treasury Department in making up its estimates of revenue for
1929
estimated that $6^0,000,000 would be received from miscellaneous
Internal Revenue, which is only $H,000,000 less than receipts from this
source in 1927*
It estimated customs receipts at $600,000,000, which
is within $5,000,000 of the largest amount ever collected; current income
tax receipts at one billion
$180,000,000.
885
million dollars, and back tax receipts at
Our critics have not been specific in their criticisms,
but, as I understand it, it is to the income tax estimates, both current
and back, to which they are in the main directed.
There is no mystery
whatsoever connected with the Treasury estimates.
Based on the best
available information, the calendar years
income tax returnsin the fiscal year
good business years— in fact,
record year.
1926
1927
1925
and
1926,
on which they
were based, were exceptionally
may fairly be said to have been a
In estimating revenue from current income tax in the
fiscal year 1929, the Treasury Department took the actual yield for the
'fiscal year
1927 .
the calendar year
■
’did this on the assumption that the tax base in
1927
would probably not equal the tax base in the
calendar year 1926, and there would, therefore be a falling off in
revenue during the first half of the fiscal year
1929,
but that a business
resumption and the normal growth of the Country in 1928 wduld more than
offset this loss, which would thus be made up during the second six
12
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months of the fiscal year 1929In this connection, it is significant that current income tax receipts
for the full calendar year
1927 ,
received in the calendar year
dollars.
which are, of course, b 3sect, on the income
1926,
aggregated one billion
1926 was, admittedly, a record year.
of current income tax revenue for
dollars.
1929
897
million
The Treasury estimates
amounts to one billion
8S5
million
In other words, the Treasury estimates that income tax revenue
for the fiscal year
1929
calendar ycum receipts.
will be within twelve million dollars of the peak
Some people may characterize such estimates as
”excessively” conservative.
I don*t.
One word about back tax collections.
will amount to $130,000,000 in
1929.
We have estimated that these
Some gentlemen say that this figure
is too low, and see no reason why back tax collections shouldnrt come up
to the yield in 1927»
There is a very simple answer.
The Bureau of
Internal Revenue has been disposing of its old cases at an extremely rapid
rate.
On June 30> 1926, that is, the beginning of the fiscal year 1927,
there were on hand '437,3^9 cases for all years prior to 1925*
On
December 31 last, there were only 66,936 such cases on hand, and if we ex
cept 12,000 claims for abatement or refund, which will not produce any
additional tax, only 5^,936.
If the progress made during the past few
months can be continued, this group of cases which, from the standpoint of
back tax collections is the most fruitful, will have been largely eliminated
at the beginning of the fiscal year 1929*
fall off?
Why will back tax collections
They will fall off for the very simple reason that the vast
number of cases which produced them will have been disposed of.
For my part, I believe that the Treasury estimates are correct, but the
failure of the House of Representatives to accept them created a new
situation.
It is well to remember that ’the estimated surplus of $252,000,000
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did net take into consideration any legislation for increased naval
expenditures, the Boulder Canyon and Muscle Shoals developments,increased
and farm
appropriations for public Buildings, the Alien Property Bill, and fliod/
relief.
Should these measures Become law, it is impossiBle to say what
surplus will Be available, and it is rather significant that the first
three Bills which passed the House of Representatives after the passage
of the Tax Bill all provided for increased expenditures»
Moreover, the controlling factor in the revenue field is the income
tax.
Even
The income tax yield is Based almost entirely on Business conditionswith the vast amount of statistical information available these days,
it is difficult to compare in advance of the actual figures the taxable
income of one year with that of a prior year.
Our Best judgment is that
the taxable income in 1927 will net equal the taxable income in
however, is But an estimate.
After March
15
1926.
This,
it will cease to Be an estimate.
We shall then Be in a position to know, and with that knowledge on hand,
our estimate of the current income tax yield during the fiscal year
will Become increasingly accurate.
widsom to wait until after the
15 th
1929
It is obviously, then, the part of
of March, first to ascertain what new
expenditures will Be incurred By reason of new legislation, and, in the
second place, in order that our estimates may Be Based on more adequate
information.
This is the course which the Secretary of the Treasury has
advised Senator Smoot 'should Be followed.
I think it will appeal to all
reasonable men as a wise and prudent one.
Certainly, if there is any
doubt as to what surplus is available for tax reduction purposes, it is far
wiser to wait two months, when we shall be cn surer ground, than to rush
ahead, repudiate the official estimates, and enact a tax reduction Bill
which will produce inadequate revenue and sc prepare for an upward revision
next year.
T;ts&sosr
defaltmeijt
Secretaj.y Mellon today stated that the privilege of exchanging Third
Liberty Loan 4j per cent bonds f o r .the new 3§ per cent Treasury Notes of
Series C-1S30-32 will terminate at the close of business on Monday, January
¿3rd.
Exchange subscriptions in the mails or otherwise in transit before
midnight on January 23rd will be' accepted.
Holders of Third 4j»s have,
therefore, only one week within which to avail themselves of the current
offering.
Third Liberty Loan
per cent bonds of 1928 will mature on
September 15, 1928, and will cease to bear interest oh that date.
The
current exchange privilege was announced by the Treasury on January 9, 1928.
The new 3j per cent Treasury notes offered in exchange for Third
s will
be dated and bear interest from January 16, 1928, will mature December 15,
1932, and will be callable on and after December 15, 1930.
Under this
exchange offering holders of Third Liberty Loan bonds are given an oppor
tunity to exchange their bonds, par for par, for the new Treasury notes,
and those taking advantage of the offer will receive, at the time the new
notes are delivered, interest in full to March 15, 1928, on their Third
Liberty Loan bonds, without deduction because of the earlier redemption.
Banks and trust companies have been fully advised of the terms of
the offering, and the Treasury has utilized every other available means of
informing holders of Third 4jM s of the exchange privilege.
’
FOxl RELEASE, M.ORRIFS- TAIERS,
Friday, January 20, 1928.
TREASURE DBIARÜR'EFT
celebrating the establishment
of the Charlotte Branch of the
Federal Reserve Bank of Richmond,
held at the Hotel Charlotte,
Charlotte, Forth Carolina
January 19, 1928
I have long Wanted to visit this part of the South, where so many
of your traditions are the same as my own*
Here in this piedmont
section of the Carolinas, you have many close ties with my native State
of Pennsylvania*
Your part of the country was settled, as mine was,
largely by Scotch-Irish, and also by Germans and Quakers.
They came
in great numbers during the 18th century, landing in Philadelphia and
then spreading westward to settle the country around Pittsburgh.
Many
of these same men pushed on through the valleys of the Appalachian Moun
tains to Virginia, North and South Carolina, bringing with them such
names as G-raham, Alexander and Polk, which were later to become so famous
in your history.
They brought also their sturdy qualities of independence, love :,of
civil ana religious liberty, and a sense of thrift and order that enabled
them to build up a civilization out of a wilderness.
Wherever they went,
they set up their educational and religious institutions.
Mecklenburg
County soon became a center of Scotch-Irish civilization, so that it was
not strange that the liberty—loving men of this and the surrounding coun
ties should resist the oppressive and
ill-advised measures of the British
Government and, in the Mecklenburg Declaration of 1775, should be the first
to give formal utterance to American independence.
Nearly a century later, when the War between the States, which was
so gloriously fought by both sides, had come to an end, and the South was faced
not only by a loss of man power but by a disruption of her social and economic
life as complete as anything caused in Europe by the last war, the descendants
of these same pioneers set to work at once to rebuild their shattered fortunes.
They showed the same indomitable courage as in the early days and, on the
-
2
-
foundation of the old agricultural order, they built up a nev; agricultural
and industrial Southj whose rapid increase in wealth has been one of the
outstanding achievements in this country in recent years.
v
The South is fortunate in that the period of her industrial expansion
|
'
j
I
,-i
coincided with advances in the field of electricity, which made possible
the development of the vast sources of water power in this part of the
country.
The production of cheap electric current has not only proved
a great stimulus to industrial expansion but has also brought about a
greater diversification of industry, so that today, in addition to being
the center of the textile industry, the South is forging rapidly ahead in
the production of knitted goods, silk, furniture, tobacco and many other
commodities.
In no other part of the country has this industrial advance been more
marked than in the two Carolinas.
These States in the past have been pre
dominantly agricultural and have usually been associated in the uublic mind
with the production of cotton and tobacco.
But in recent years the value
of the manufactures of these two States combined has '7 exceeded even the value
of their agricultural output; and, as a result, there has come about an in
crease in wealth, which has necessitated a rapid expansion of their banking,
resources.
It is in recognition of this fact that a branch of the Federal Reserve
Bank of Richmond has been established in Charlotte.
Under the wise guidance
of Governor Seay and his able Board of Directors, the Richmond Bank has had a
/
most gratifying growth and has shown at all times a sympathetic understanding o
the need^ of this section.
The establishment of a branch bank at Charlotte
should, still further increase the usefulness of the Federal Reserve System by e
fecting a valuable saving of time in bank clearings aid currency shipments.At t
/ i
/
/
- 3 -
s^Tne time it should make for greater efficiency in operation, because the
men in enarge of the bank will be nearer to the territory vhich it serves
pnd c^n bpro, therefore,
7
more accurate knowledge of local conditions.
Furthermore, ''here ^ branch bonk is actually needed,
03
in this cose, its
establishment is in line vith the principle of local self-government in
oankingj "aiilc at the s^me time bringing to you the vast resources of the
Federal deserve System.
Thot System lies mode it possible, for the first time in our history,
to mobilize the bonking resources of the country end to place them et the
service of ony section thet hos need of them.
For the first time business
coyn go forward, freed from the foor that at ony moment, from causes remote
or unforeseen, a ilnancial crisis might develop and threoten every one vith
ruin.
The old system, under which we operoted prior to the possogc of the
Federal reserve ^ct,
t .
s
notable for its scattered "nd immobile banking
reserves and a credit inelasticity which rendered it totally inodcauate
for the country1s needs.
It *7as unequal evon to meeting the seasonal de
mands during the crop-moving period; and, in times of financial stringency,
it operated to aggravate, rather than to relieve, panic symptoms*
national banks could issue currency only when secured by Government
bonds; consequently they were una.blc to increase the currency in times when
it eas most needed,
hanks outside of the great financial centers could ex
pand their credit facilities only by borrowing from the larger metropolitan
banks, with the result that all loans in the end converged on Her; York.
In
stead of ~ coordinated system of banks, with a common reservoir of credit, we
mad a large number of independent banking units, which in times of stress
struggled
gainst each other, and never worked together a.g part of one grca.t
financial structure.
4
Thcsv_ defects mere cured by tlic cst"\blishnent of the fcdcrul Reserve
System.
The tv/olvc rcgi;|fr 1 b'-rks, under the responsible coordinating
influence of the Federal deserve Rourd, cun effect tlrt prompt mobiliza
tion of reserves ’mien is so essential in preventing p°nfcs.
Those bunks
uro ulso hblc to provide the country v.'ith un clustic currency, vdiich expends
or contracts vritn scnsonul nnd trn&c needs.
It is possible to supply the
farmers °nd the trndc vith ndcquntc currency during the crop-moving ucriod
end to effect the nccossnry contrnction -hen the sensonnl requirements hnvo
been met.
The reserves of onch rcgionnl bulk nrc nvnilnble, through the
discounting privilege, to nil other Fodornl Reserve “'nnks.
The funds of
the central reservoir cun. be diverted to rn$ V n k in the System -hieh hrs
need of them, so th-'t the finnneing of ''.n incronsing or decrcnsing volume
of business c^n bo ^cdomplished -rith cnsc.
Tnc ITodcrnl deserve System pus put into operation just prior to the
outbreak
of the ..orld m r dnd vrus obliged to establish itself in public
confidence during n period of unprecedented strnin in the finnncinl horld*
Tnc cnnnncls of norId tr^dc hnd been suddenly nnd violently disorgnnized.;
The outbre.nk of -'nr stopped the flon r.brord of nuny exports nnd this country
v;ns flooded with n surplus of cotton nnd other commodities, vdiich to n grent
extent proved unnurkctublc until the ncu trndc currents hnd established them
selves.
Then cotton nnd food nnd mnnufncturcs vhich v/crc needed for wnr
purposes begun to flov: nbrond in even grenter quantities thnn before,
-agriculture nnd industry expanded rnpidly, necessitating nn enormous incrensc in credits, vhich fortunntcly the bunks of the Fcdorul Reserve System
nnd the other bunks of the country mere ublc to supnly.
- 5 -
When this country entered the war in 1917, the strain upon the hanking
structure became even greater.
It was necessary to support our military
establishment and at the same time to make advances to the nations associ
ated with us in carrying on the war.
Our national debt increased frôm
$1,281,000,000 on April 5, 1917, to $25,484,000,000 on June 30, 1919.
In
the floating of the Liberty Loans the Federal Reserve Ranks acted as the
fiscal agents of the G-overnment and their assistance in this and many other
ways proved invaluable.
When the war was over and the nation was obliged to adjust itself to
new conditions,/it was the steadying influence of the Federal Reserve System
that brought the country safely through the necessary period of post-war
readjustment with a minimum derangement and prevented the financial crisis
from degenerating into a panic.. As a result there was no serious impairment
in our financial structure at jk time when such a calamity would have had most
disastrous consequences throughout the entire world*
wv'\â
y
The service whicjr the Federal Reserve System rendered to the country
during this period can not be overestimated.
And yet, the System, as you
know, has been violently attacked because it failed to do the impossible and
to avert the losses suffered in getting the overexpanded agencies of pro
duction, both agricultural and industrial, back on a normal, peacetime basis.
As bankers you know how groundless is the charge that the Federal Reserve
Ë
i
è
W
Ê
M
¡111 .fü§j
,
ft
_ ...... .............. - - ■ ------------ — — — -—
>
Ranks contracted agricultural credits. CAs a matter of fact, far from con-
Î
tracting agricultural credits during the period of falling prices, the Federal
Reserve Ranks expended bank credits and increased the volume of circulating
notes in the agricultural States.
6
The Federal Heserve Bank of Richmond, for instance, during the
calendar year 1920 increased its rediscounts by more than 10 million
dollars and expanded its note issue by nearly the same amount.
A
similar expansion of credits was made by the Federal Reserve Bank of
Atlanta and the other banks in the great agricultural areas.
These facts speak for themselves and justify the assertion that,
without the assistance rendered by the Federal Reserve Banks, it would
have been difficult, if not impossible, for the country to have come
safely through the period of deflation or for our financial structure
to have weathered the enormous strain to which it was subjected at that
time.
What the Federal Reserve System has been able to do for this country,
it is now doing to a lesser degree for the world at large.
It is today
one of the important factors in the effort which is being made to
achieve world stabilization.
When Great Britain made the momentous decision to re-establish
the pound upon a gold basis at its former value, it meant that the
old standard for financial transactions was to continue and that
America was not to be left holding the world’s supply of a metal for
which the other nations might be seeking a substitute.
Great credit
is due to the Federal Reserve Banks for the part which they played in bring
ing about this result.
These banks extended large credits to the Bank of
England, and the British Treasury arranged for additional credits with
7
private American bankers.
Great Britain has been on a gold basis now
for more than two years and has not used a single dollar of these credits;
nevertheless, without the support furnished by the Federal Reserve Banks,
I do not believe that stabilization would have taken place at the time
when it actually occurred.
The movement back to gold has continued steadily and other nations,
including Belgium and more recently Italy, have been added to the list of
countries maintaining the gold standard*
In the plans for the stabiliza
tion of the rest of Europe, the participation of the Federal Reserve System
is equally necessary; and in all this the interests of the American farmer
and manufacturer are vitally concerned.
The nations of the world must be re-established on a sound financial
basis, if our surplus products are to find an export market.
Only in this
way can business compute in advance the price which it must pay for raw ma
terials and figure more accurately on the price which can be secured for
the finished products.
If this can be done, business can operate on a
larger scale and increase its foreign purchases, which means a greater de
mand for our own surplus products and an expansion in business here and in
other countries as well.
■It is indeed fortunate in this disturbed period in monetary affairs,
when so large responsibility for world stability has been placed upon this
country, that we have in the Federal Reserve System an agency capable, not
only of exercising an important influence towards stability in our own
money markets, "but also of aiding in financial reconstruction abroad.
The work which the Federal Reserve System is doing is along sound,
constructive lines¿
impossible*
But the greatest mistake would he to expect the
It is not a panacea for all the financial and economic ills
which may befall the countryl
Neither the Federal Reserve System nor
any other system can control prices.
The most that System can do is to
influence to a limited extent, from time to time, the total volume of
credit and its cost*
While credit is one factor in influencing prices,
it is neither the only factor nor the controlling one; and it would be
asking the Federal Reserve System to perform the impossible if it is to
be charged with the responsibility for controlling prices merely because
it can exercise a limited control over the amount of credit available.
The Federal Reserve System has been in operation now for thirteen years*
During this time it has so established itself in the confidence of the country
that Congress last year extended the charters of the Federal Reserve Banks for
an indeterminate period.
This Act was one of the most important pieces of
legislation that has passed Congress since the war., for it insured the con
tinuance of the Federal Reserve System as an integral part of our banking
structure.
It is left for us to make certain that the System shall "not be endangered
by loading it down M t h extraneous or impossible tasks.
It has already jus
tified its existence and it will be indispensable in any future financial
crisis which may arise*
But if the System is to do this, it must never be
impaired by changes which interfere «with the twelve regional banks in the
exercise of their primary function as reserve institutions in providing
credit and currency for the country.
9
I know that you can he counted on always to give the Federal Reserve
System youf Strong and unqualified support.
It is a matter on which we
can all agree, regardless of politics, for the Federal Reserve System was
established under a Democratic President and its continued existence has
been assured under a Republican President.
In matters of such general
concern as banking - and may I add, taxation also - it seems to me that
partisan politics should not enter.
These are fundamental questions
which vitally affect the welfare of the whole country; and, when that
welfare is involved, we should think not of class or sectional or partisan advantage, but of what is economically sound and for the best
interest
of the country.
TREASURY DEPART? HFYT
FOK RELEASE, ?IORNINS PAPERS,
Saturday, January 21, 1928.
Secretary Mellon reminds holders of Third Liberty Loan bonds that,
as previously announced, the privilege of exchanging their bonds for the
new Treasury Notes will expire at the close of business on next Monday,
January 23, 1928.
Under this exchange privilege, which was first announced
on January 9th, holders of Tnird Liberty Loan bonds are given an ppportunity
to exchange their bonds for new 3f per cent Treasury Notes maturing in 1932
and callable in 1930.
Third Liberty Loan bonds will mature on September
15, 1928, and will not bear interest after that date.
While the new
notes oear interest from January 16-, 1928, simultaneously with the
deliver;/ of the new notes the Treasury will pay interest on the Third
4|-»s for the full six months* period from September 15, 1927, to
March 15, 1928.
Secretary Mellon further announced that according to the latest
reports received from the Federal Reserve Banks over $525,000,000 Third
s have thus far been exchanged for the new notes.
Complete figures
will be announced following the closing of the exchange offering on
Monday, January 23rd.
TREASURY DEPARTMENT
FOR RELEASE, MORFING- PAPERS,'
Thursday, January 26, 1938.
STATEMENT BY SECRETARY 1{ELLON.
In accordance with previous announcement, subscription books on the
offering of 3^ per cent Treasury notes, Series C-1930-32, in exchange for
Third Liberty Loan
January 23rd.
per cent bonds closed at the close of business Monday,
The total amount of subscriptions received by Federal Reserve
Banks and the Treasury Department was over $603,000,000.
Subscriptions, by Federal Reserve districts, together with those re
ceived direct by the Treasury Department, are set forth below.
These figures
are subject to slight increase due to the belated receipt of any subscriptions
which were in the mails or otherwise in transit before midnight on January 23rd:
Federal Reserve
District?
Total amount of
Subscriptions;
Boston ......
New Yerk ,...
Philadelphia
Cleveland ...
Richmond
Atlanta .....
Chicago •,...
St. Lapis.»..
Minneapolis .
Kansas City .
Dallas ,,,...
San Francisco
Treasury ....
$
Total
18,093,800
411,261,550
16,500,800
*38,559,400
6,995,300
2,908,900
59,042,550
12,514,200
6,139,500
9,389,150
5,182,600
7,941,350
9,097,550
$ 603,626,650
TREASURY DEPARTMENT
YOU RELEASE MORNING; PAPERS
FRIDAY, JANUARY 27, 1928*
SPEECH TO BE “
DELIVERED
BY THE UNDERSECRETARY OF THE TREASURY,
HON. OGDEN L. MILLS,
AT THE ANNUAL MEETING OF THE
FRANCO-AMSRICAN CHAMBER OF COMMERCE
TO BE HELD AT THE HOTEL
RITZ CARLTON,
NEW YORK CITY, ON THE EVENING OF
THURSDAY, JANUARY 26, 1928.
)
One hundred and fifty years ago, America entered into her first
treaty of amity and commerce.
Faris on February
6,
That treaty was with France.
It was signed at
1778, by Franklin, Deane and Lee, on behalf of the thirteen
Colonies, then struggling to become a nation.
It was due largely to the efforts
of Franklin, our first great Ambassador, who was as much loved and understood in
France as in America and typified in his person the friendship, sympathy and
understanding which were to exist between the peoples of the two countries.
At the same time a treaty of alliance was entered into, whereby France
agreed not only to recognize but to support American independence.
This she
did most generoiisly, both with force of arms and with financial aid; and the
assistance, which was thus rendered during a critical period in our history,
helped materially in establishing America as a free and independent nation.
It laid the foundation for a strong and lasting friendship, which brought
us over a century later to the side of France, and Americans and Frenchmen again
found themselves fighting side by side, in a terrible conflict which well nigh
wricked the world and imperilled mueh that had been built up by centuries of
effort.
Peace came at last and men turned homeward expecting to find their place
once more in the old world as it existed in
to have existed.
1914 ,
indeed as it seemed always
The threads of the old life could surely be picked up again.
The smooth running machine would again begin to function; the forward march
would be resumed.
But the old threads had been severed.
The delicate economic
machine, built up gradually through the years, had been wrecked.
road, with its many guide-posts, had been almost obliterated.
The broad high
The world
literally began to grope, and as it did, for a time at least fundamental
principles seemed to have been forgotten.
The common nature of the problem
was overlooked; the essential solidarity of'the world disregarded.
It soon ‘became evident that many of the things that had formerly "been taken
for granted as inevitably existent in a world as it ought to be, had to be
patiently relearned and laboriously and consciously applied.
What was formerly
the concern of but a few financiers and experts, .who themselves accepted the
whole compliCrated system with considerable complacency, became the intimate
concern of the people themselves.
Balanced budget, balance of trade, rate of
foreign exchange, stable currency, are now terms fc
amiliar to well nigh' every
household.
Even the experts and technicians have had to be reeducated.
The
*
situation before the war and that which developed during the post-war period
may be likened to the operation of the modern up-to-date automobile by the
average man before and after an accident.
He bays the car, he pours in some
oil and some gasoline, presses a button, shifts the gears with a lever, and
rolls to his destination with complete comfort and security, but with an
equally complete ignorance as to the motor which propels the car and the various
parts which cause it to function so smoothly.
That was the pre-war situation.
How our automobile owner in driving along the road exceeds on a lonely highway
the proper rate of speed, as a result of which he ends up in a ditch with a
wrecked car.
Assume that he is many miles away from any assistance, that this
is the only car available and the only means of reaching a given destination.
He
has to set to work and learn now in detail every part of the machine and its
relation to the whole.
He has to put it together piece-meal.
He has to do all
this laboriously and as part of a deliberate, conscious process; and when he
steps into the car again and it begins to move, he is no longer a mere passenger,
enjoying the benefits of a ready-made machine created and handed to him by
others, but an intelligent mechanic who has recreated his own complicated and
essential vehicle.
What a lesson in political economy the world has received in the last few
years.
We have been going to school again.
We have learned that there are
3
some otters which each nation must attend to itself and that- wise Internal
economy and putting one’s house in order are the first and indispensable steps.^
But we have learned much more.
We have learned that, divided as it is into
:pany countries and nations, the world is nevertheless, broadly speaking, a single
great economic unit; that its parts are in a large measure interdependent, and
that the prosperity of one or a number of them cannot be built up indefinitely
at the expense of that of the others, but rather that the prosperity of all
spells greater prosperity for each.
The corollary must be eaually evident that
the promotion of the economic well-being and strength of one’s own country is a
direct contribution to the well-being of other countries.
interest is an all important factor.
Enlightened self-
It may be true that one of the best ways
to help one’s self is to help others; it is equally true that the best way to
help others • is to help one’s self.
What serious student, for instance, can minimize the contributions which,
due to its fortunate situation, this country has been able to make to the
restoration of world economy, net only as a vast reservoir of liquid capital
which has been freely drawn on, but as a great market with vast purchasing
power,
While the first of these has been sufficiently emphasized, there has
been a tendency in some quarters to claim that in so far as the second is con
cerned, the benefits have been too restricted. . This point of view overlooks
the controlling fact that the maintenance of the present American standard of
living and of wages, accompanied by the wide-spread diffusion of prosperity, is
the.basis upon which the purchasing power rests, and that the maintenance of the
former is a prerequisite to the existence of the latter.
This point of view
overlooks the vast proportions which our .imports have assumed in the total of
world trade and the narrowing margin between our exports and imports.
Thus in
/
- 4 the fiscal year 1913 our imports were 75 per cent of our exports; in the last
fiscal year they were
stituted
8.2
86
per cent.
In the calendar year 1913 our imports con
per cent of total world imports; in the calendar year 1926 they
were 13.8 per cent.
For the five years ending June 30, 1927,European exports
to the United States increased 52.6 per cent, whereas exports from this country
to Europe increased hut 15.9 per cent.
While total trade between the United
States and Prance has increased in the five years ending June 30, 1927,by 6.5
per cent, imports from Prance have increased 15 per cent as compared with a 1.3
per cent increase of exports.
These are facts which critics of the American
system of protection would do well to bear in mind.
I have said that the world went to school and relearned^many a lesson in
political economy.
cleared away.
painfully slow.
But the ?/orld also went back to work.
Productive enterprise was resumed.
The wreckage was
Progress was at first
At times the obstacles seemed insurmountable.
Indeed they
were magnified, since they held the center of the stage, obvious to all, while
the silent work of reconstruction went on behind the scenes.
While statesmen
struggled to solve the grave problems of public finance, and economic argument
raged, millions whose immediate problem is their daily bread, toiled and again
began to save.
Pree from political controversy and publicity, everywhere the
business men of the world, working individually, and through such organizations
as this, and with a closer relationship and understanding than ever before, de
voted their energy and brains and experience to the common task.
There could be no better example of effective cooperation than has been
furnished by the level-headed and able men who manage the great central banks.
Thus when Poland recently had occasion to seek foreign credits, no less than
fourteen central banks participated, and this was again true when Italy a month
ago, on the occasion of her return to the gold standard, fortified her position
with credits obtained abroad.
This is the kind of team-work that counts*
- 5 -
Another fine example was furnished by the Economic Conference of last May, and
the a&eeting of the International Chamber of Commerce during the course of the
summer.
And so the world has definitely emerged from the World War chaos.
last three years have witnessed a steady march forward.
finance, the pace has indeed been rapid.
The
In the field of public
Budgets have been balanced, currencies
have become stabilized, and the wide fluctuations in foreign exchange, which
furnished such a terrible impediment to world commerce and the interchange of
goods» have in a great measure been-ironed out.
During the last eighteen months, Italy, Poland, India, Denmark, Estonia,
Argentina, Ecuador, and Brazil have been added to the countries whose currencies
are legally on a gold or a gold exchange standard.
The approach to parity with
prewar conditions is reflected in the recent advance of American prices of ex
change, nearly to par for Uorvfay and above par for Great Britain.
Definite
plans have been made and foreign loans are now pending to assist Greece in pro
posed currency reforms.
In the meanwhile, the production of major agricultural, mineral and manu
factured products of the world as a whole, and in a great majority of the in
dividual countries, now exceeds the prewar volume.
International trade, which
during and immediately after the war, fell far below normal levels, is now apin
preciably greater than/the immediate prewar period.
The total volume of world
trade in 1922 amounted to 46.9 billions, and in 1926 to over 60 billions, or an
increase of nearly one-third in four years.
The increase in the i;ate of growth
is particularly significant: thus, the total volume of trade in 1922 increased
8 per
cent over 1921; in 1923 the increase was 10 per cent; in 1924, 12-g- per
cent; and in 1925, 13^ per cent.
While several of the countries of Europe
have not yet recovered fully in production and trade, they have almost without
exception made marked progress in that direction.
Turning now to France, in which your organization is primarily concerned,
we find a situation which, if not wholly satisfactory, from the point of view of
the future presents elements indicating great economic strength as contrasted
with the temporary character of some of the difficulties.
And even in so far
as the latter are*concerned, we can note a most gratifying record of progress
during the last eighteen months.
The general economic position of France on its
static side may he summed up in the statement that she has an intelligent and
industrious population, a great abundance of natural resources, including coal
and hydraulic energy; that she is inproving definitely her capacity as an
agricultural producer; that she has vastly improved her industrial organization
and her equipment for large scale production; that she has developed and improved
foreign trade methods and so enhanced her ability to compete in the world,
markets, and that, already the principal world’s purveyor of fine quality in socalled luxury goods, France is now developing in many trades large scale and
standardized production of the ordinary goods of general consumption.
On the temporary or dynamic side, some of the problems which two years ago
seemed well nigh insoluble have to-day in fact been solved.
balanced.
The budget has been
The franc has been stable in value for over a year.
The Bank of
France has heavily increased its holdings of gold, while the flow of capital to
France has placed at its disposition an immense sum in the form of dollar and
sterling credits.
The recovery of the entire French financial situation, in
cluding the rise of the franc and its de facto stabilization since December,
19S6, is one of the most amazing chapters in financial history.
trade balance continues ,to be favorable.
The foreign
Here is a picture which no friend of
France can look at without experiencing a sense of gratitude and pride.
And so as we meet tonight to celebrate the century and a half of peace and
friendship that have existed between the United States and our first and oldest
friend, it is gratifying indeed to be able to do so under such hopeful circum
stances and to sound a note of confidence in the future.
i l l l l i
pup 1■ |.' ■
.
| v
- 7 It has "been a great pleasure to be with you this evening and to meet the
members of this organization, who not only devote their energies to the pro
motion of trade and commerce between these two great countries, but who, know
ing both are in a position to act year in and year out as messengers of good
will and to promote the friendship and mutual understanding which I am con
fident will result in at least another 150 years of expanding trade, peace* and
amity between the peoples of France and of the United States.
y/
TREASURY DEPART!,®?
FOR RELEASE UPON APPEARANCE OF THE
SECRETARY BEFORE TEE WAYS AND MEA1TS
COMMITTEE
FEBRUARY
15 ,
1928*
Statement by the Secretary of the Treasury before the
Ways and Means Committee with reference to the bill to
authorize the settlement of the indebtedness of the,
Greek Government to the Government of the United States
and of the differences arising out of the Tripartite
Loan Agreement of February 10, 1918»
The Secretary of State and the Secretary of the Treasury have for
some months past conducted conversations with the Greek Minister at
Washington looking to the settlement of the indebtedness of the Greek
Government'to the Government of the United States, which as of January ■
1,
192S, amounted, principal and interest, to the sum of $19,659,S36.
As a result of these conversations, a proposed plan of settlement was
agreed to which was embodied in notes exchanged between the Secretary
of State and the Greek Minister at Washington on January IS, 192S. The
President has recommended that the Congress authorise the Secretary of
the Treasury to sign, with his approval-, a definite agreement for the
settlement of the Greek debt and of the differences arising out of the
Tripartite Loan Agreement of February 10, 1918, which legislation is
now before your Committee for consideration.
The indebtedness arose by virtue of an agreement dated February
10, I9IS, under the terms of which the Governments of the United States,
/
Great Britain, and France agreed to advance to the Greek Government,
hy equal shares, not to exceed 7504000,000 francs. The object of this
; •" " ?■ - ■
iJ
agreement and the benefits to be derived by the United States
••/ere sot forth in a letter from Secretary of the Treasury McAdoo
to President Wilson dated December 2, 1917*
Quoting from a cable
from Assistant Secretary Crosby, the letter pointed out that it was
agreed that Greece should increase its active army from three divisions
to at least nine divisions, which would require about
600,000,000
francs for munitions and supplies for army and navy, and
750*000,000
francs for payment of soldiers, sailors, and other local military
expenditures.
Prance and Great Britain agreed to provide the munition
and supplies fund.
Conditioned upon their supplying this fund of
600,000,000 francs, the United States was to join with France and Great
Britain in supplying the 750*000,000 francs.
The cable further said:
"Colonel House and General Bliss' join in recommending our joining in sup
port of Greece in view of urgent military necessity and upon principle
that vie should join with Great Britain and France in supporting militaryprograms of weaker nations whose military cooperation may be of aid in
accomplishing desired victory, even though involving advance for expenditures
outside our country".
The loan was approved by President Wilson under
date of December 10, 1917*
750*000*000
Under the agreement Greece was to expend
francs of its own resources for the above-mentioned purposes.
The United States, France and Great Britain were to open on their books in
equal shares credits to the Greek Government amounting to 750,000,000 francs,
against which credits the National Bank of Greece was to issue its bank
notes. Actual advances on the credits v/ere to be made, during the war should
- 3 -
the
f o r e i g n "balances of
fall
oelow
available
10 0 ,000,000
six m o n t h s
Advances
Financial
francs,
after
were
Commission,
ports
of
the A m e r i c a n
on
the
reached
of
agreement
that a m o u n t
Greece
the
spe n t
to be
expressed
ment
o n e - t h i r d of
expended
it w a s
spent
10,
therefore,
as G r e e c e
the f u l l
who
The
represented
re
the
$ ^ 3 , 2 S 3 , 993* 6 2 .
though owing
to meet,
One-third
to the
the b a l a n c e
of
Actually,
failure
these
of
ex
checked.
1913,
this p o i n t
is
a g r e e d to a d v a n c e
francs,
providing
for w a r p u r p o s e s ,
an urgent mili t a r y necessity.
the m o n e y f o r
established.
this
Greek expenditures under
aggregates
fran c s ,
Inter-Allied
f r o m e a c h of the
of 6 S 2 , 1 3 ^ > £>93* 5^ d r a c h m a e .
Commission
1^0 ,000,0 0 0
that a m o u n t
that
of an
to b e c o n t r o l l e d b y
similarly
showed
immediately
pea c e .
approval
at A t h e n s ,
to e m p h a s i z e at
on February
the
the
of f u n d s w a s
in d o l l a r s
pendit u r e s was not f o rmally
of
be
to
one r e p r e s e n t a t i v e
General
1^0 ,000,000
I want
to
Commission
the t o t a l
Inter-Allied Financial
Government
of
Commission,
the f u l l
What
subject
a n d the u s e
Consul
this
?ny event,
in
the c o n c l u s i o n
a Military
U n i t e d States
and
composed
signatory governments,
Commission and by
the G r e e k T r e r s ir"7'' an d t he N a t i o n a l B a n k of G r e e c e
that
to
the U n i t e d S t a t e s
the G r e e k G o v e r n
the G r e e k G o v e r n m e n t
at a t i m e w h e n G e n e r a l B l i s s
No
those wa r purposes.
one d i s p u t e s
The U n i t e d
consideration contemplated by
that G r e e c e
States has
the a g r e e m e n t
stated
actually
received,
i n so
far
is c o n c e r n e d .
In a n y e v e n t ,
the F i n a n c i a l
upon
Commission,
the
credits
recommendation
to th e a m o u n t
o f the A m e r i c a n d e l e g a t e
of $ ^ 3 ,
236 ,o 2 9 -05
were
on
established by the Treasury of the United States with the approval
of President Wilson in favor of Greece, on the following dates:
June 20, 1 9 1 3 ................ $15,790,000.00
December 3, 1913. ............
23,764,036.00
March 25 , 1919 . . . . . . . .
3,^53,930.00
July 3 1 , 1919 . . .............
4,823,663.05
$4g,236,629.05
At the same time the obligations of the Greek Government in these
-amounts, bearing interest at
5
per cent from the date advances were
actually made, were received by our Government and are still held
by us.
Tne first actual advance was made by our Government to Greece
on December
15 ,
September 24,
1919, the second on January 16, 1920, and the third on
1920.
All told, we actually advanced $15,000,000.
The Greek Government has consistently contended that it is en
titled to further advances up to the full amount of the credits established
by the Treasury of the United States.
Both Secretary Houston and I, how
ever, assured the Congress that no further advances would be made without
bringing tne matter to its attention.
presented to the Debt Funding C0nanission in
The whole nroblem was
1926.
The Commission
took the position that events which transpired subsequent to November,1920,
from a legal standpoint relieved the United States from making any further
advances.
I may interject here, however, that I have submitted this pro
posed settlement to such members of the former Debt Funding Commission
as are in Wqsnington, namely, Secretary Kellogg, Secretary Hoover, Senator
i
- 5 -
Smoot, and. Representatives Burton and Crisp, and that with the ex
ception of the latter all agree as to the advisability of making the
agreement now before you.
Up to the present time, however, this dif
ference of opinion as to whether further advances should be made or not,
which existed between the Greek Government and our Government, has pre
vented the reaching of an agreement for the settlement of the indebted
ness of the Government of Greece to the Government of the United States.
It should be added that the Greek Government has been so convinced of the
soundness of its position as to express its entire willingness to submit
the question to arbitration.
After the Debt Funding Commission had failed to reach an agreement
with the Greek Debt Commission in
until the summer of
1926,
no further negotiations took place
1927 *
In April, 1927, the British and Greek Governments reached an
agreement for the settlement of the indebtedness of the Greek Govern
ment to the British Government which had arisen under the terms of the
agreement of February 10, 1918, Great Britain having advanced approxi
mately 6,5^0,000 ppunds, or $31*226,910.
Under the terms of this agree
ment the obligation is to be discharged over a
a low rate of interest, and all
claims
1918 agreement are waived by the Greek
period
of
62
years, at
for further advances under the
Government.
Our Government
notified the Greek Government that it expected as favorable treat
ment as that received by Great Britain.
Subsequently,
the Greek Minister
received instructions from his Government to take up th'4 question of the
- 6 -
settlement of the debt of his Government to the United States, and
conversations were begun between the Greek Minister and representatives
of the State and Treasury Departments.
Our position from the first
was that the United States was entitled to as favorable a settlement as
that accorded Great Britain.
The Greek Government conceded the
soundness of this contention, but pointed out that in order to enjoy
as favorable a settlement as that accorded Great Britain, the United
States Government should in fairness advance a sum as great as that
advanced by Great Britain under the terms of the 1918 agreement.
Great Britain having advanced the equivalent of approximately $31,826,910,
and the sum advanced by the United States Government being $15,000,000,
which with interest to January
1,
1928, at 5 per cent amounts to $19 ,659,836,
the amount of new money to be advanced by our Government in order to reach
the amount advanced by Great Britain is $12,167,07^.
The basis of the present proposed settlement is the very definite
proposition that while the United States have the right to demand that
Greece should settle with us on as favorable terms as those given Great
Britain, the United States on its part would certainly expect not to
fall short of any otner nation in carrying out the terms of an agreement
entered into in common, or to deal less fairly and generously with Greece
than Great Britain actually has.
Expressed generally, the terms of the proposed agreement are as
follows:
-
1.
7 -
The $15,000,000 of principal owed by the Greek Government
to the United States with interest at b l/b per cent up to December 15,
1922, and on the amount then due with interest at 3 per cent to January
1 , 192 S,
amounting in all to $12 ,127 ,922.67, less the sum of $2 ,922.67
to be paid in cash upon execution of the agreement, is to be funded over
a period of
62
years»
There are listed below the payments to be made
by the Greek Government to the United States under this settlement:
July 1, 1922...................... $ 20,000
J a n u a r y 1,
1929•
• • .............
20,000
July 1, 1929
25,000
January 1, 1930
.................
25,000
July 1, 1930
30,000
January 1, 1931• • • . ...........
30,000
July 1, 1931
110,000
January 1, 1932
................
110,000
July 1, 1932 .....................
130,000
January 1, 1933 * ...............
130,000
J u l y 1,
1933,
and semi-annually
t h e r e a f t e r to J a n u a r y
1,
1932» 1 0 p a y m e n t s
e a c h o f ...............
J u l y 1,
1932,
150 ,0 0 0
and semi-annually
t h e r e a f t e r to J a n u a r y
19 9 0 ,
1,
ments
10*1 p a y
e a c h of . . .
.
175»000
The funding of the existing indebtedness for a period of 62 years is in
accord with our debt settlements with other countries.
The proposed
settlement compares favorably with the settlements made with Italy
and Yugoslavia.
The nresent value of the payments to be received
under the proposed settlement, on a ba.si s of H per cent per annum,
payable semi-annually, amounts to $6,787.000t or about
of the original amount due.
represents
26J
3^
per cent
On the same basis, the Italian settlement
per cent; the Yugoslav settlement 33 per cent, and the
Belgian settlement U 9 per cent.
2*
The Greek Government is to forego all claims for further
advances under the Tripartite Loan Agreement dated February 10, 1$)18,
which agreement, in so far as the Governments cf the United States
and Greece are concerned, is to be regarded as terminated.
3.
The United States will advance to the Greek Governement
$12 ,167,000 at U per cent per annum, payable semi-annually, with
provisions for a sinking fund to retire the loan in
U.
20
years.
The service of this loan is to be administered and assured by
the International Financial Commission.
The Greek Government will fur
nish as securities for the new loan the revenues at present under the
control of the International Financial Commission in so far as the yield
of these revenues is not required for the service of the loans having a
prior charge upon the said revenues.
As of 1927. the excess of revenues
at present under the control of the International Financial Commission
over those reiquired for the service of the loans having a prior charge,
are estimated to amount to approximately $28,000,000.
Inasmuch as the
annual service of the new loan, principal and interest, will amount to
approximately $ 889,500, it is obvious that the loan will be amply secured.
- 9 5.
The proceeds of this loan are to he used entirely for
the work of the Refugee Settlement Commission.
Recent events in
the Near East have involved for Greece a very considerable displacement
of population.
The total number of refugees added to the population
of Greece amounts to about lg- millions, or more than 30 per cent of
the population.
In 1923 there was organized by formal and official
agreement, and according to the terms of a statute enacted by the Greek
Legislature, the Refugee Settlement Commission, of which the Chairman,
according to the organic articles, must always be an Timer!can citizen.
Mr. Henry Morgenthau was the first Chairman; and Mr. Charles B. Eddy
is now Chairman.
The task of this Commission is to establish the
refugees in productive work.
In 1924 a loan of over #59,000,000 was'
floated in the world markets for the purposes of the Refugee Settlement
Commission.
Great progress has been made, but much remains to be done
to complete this humanitarian work.
The proceeds of the #12,167,000 loan
to be made by the United States Government to the Greek Government are to
be applied in their entirety to the woik of the Refugee Settlement Com
mission.
The proposed settlement will assure to the United States the re
payment in full over a period of 62 years of the #18,125,000 to be funded.
It will discharge what may fairly be considered a moral obligation resulting
from the 1918 agreement by the advance of a sum of money to be wholly
devoted to constructive work of great humanitarian as well as economic
value, which loan will bear an adequate rate of interest and be amply
secured by pledged revenue.
10
-
But the Committee and the Congress may ask why they should vote to
authorize a further advance to Greece when in a memorandum prepared for,
the Debt Funding Commission considerable doubt is expressed as to the
legal obligation of the United States to make further advances under
the 1918 agreement in view of what had transpired since 1920?
The legal
points raised at that time may be summarized as follows}
(l)
That France had failed to make any advances under the 1918
agreement, and that in 1921 Greece agreed to forego any further claims
upon Great Britain, though it does not appear that this last mentioned
agreement was ever ratified by the Greek Parliament.
It was suggested
that the original agreement was a joint undertaking, and that the
failure of France and Great Britain to live up in full to their
share of the agreement would release the United States.
The agree
ment, however, was to make advances in equal shares, and to say the least,
it is very questionable whether such an agreement constituted a joint
undertaking.
To hold it to be a joint undertaking would be to admit
that the United States was liable for the full amount of 750,000,000
francs, which, of course, was never contemplated.
(2)
That under the terms of the 1918 agreement Greece undertook
to use no new security for an exterior loan without the assent of the
governments of the United Spates, France, and Great Britain; whereas,
m
1923 Greece funded a demand loan owed to the Canadian Government and
undertook to assign to the service of the bonds the surplus of revenues
received by the Greek Government from the International Financial Commissior
The Greek ^ e r n m e n t contends that the mere earmarking of certain revenues
-li
to the service of a particular loan does not constitute giving new
security, ana contends that there was no need of obtaining the assent
of the three countries in the case of the Canadian loan.
It points
out, furthermore, that the following year in the case of the Refugee loan,
where revenues were actually pledged, it did request and obtain the
assent of our Government and that our Government evidently considered
the agreement as still in effect at that time as its assent was given.
(3)
That Greece ceased payment of interest on the $1 5 >000,000
advanced by the United States.
The facts are that Greece continued
to pay interest for a year after we had ceased making advances.
(^-)
That under the agreement made in 1919» under the terms of
which Greece was to expend
in this country, all moneys advanced and
to furnish bi-monthly reports, Greece had failed to furnish adequate
reports.
There does not appear to be any dispute as to the funds hav
ing been expended in this country.
I
do not deem it necessary to discuss these points in detail
and from a legal standpoint.
It is apparent that each and every one of
them constitutes a legal defense which it is not too much to say is of a
highly technical character.
They furnish a field for interminable legal
controversy, with probably a good legal argument whichever side of the
question be taken.
I do not believe that our nation should interpret its obligations
under a contract to which it is a party on any such narrow basis, or be
influenced in its decision by legal considerations of so technical a
character.
The question to be determined is, did the United States
-
12-
undertake to make advances to the Greek Government provided the Greek
Government expended a given sum of money for war purposes?
Did the
Greek Government actually expend the funds for the purposes contem
plated by the agreement?
In other words, has the Greek Government
fulfilled the essential parts of the original contract?
The expenditure
of the 750,000,000 francs for war purposes was the essential considera
tion received by us in return for our promise to make the advances. - No
one disputes that the expenditures were made for the purposes contem
plated.
It is clear, therefore, that the United States Government has
received the consideration in return for which it undertook to make the
advances.
We have steadfastly, and some times in the face of severe criticism,
maintained the principle of sanctity of international obligations.
When
it comes to interpreting our own, we should not construe them too narrowly.
As Secretary Houston stated before a Senate Committee ,fWell, I think
if this government made its commitment to do a certain thing during the
war, for war purposes, and had a certain agreement, if the terms were
conplied with and they should come forward with a request for the ad
vance, in strict conpliance it would be bad faith not to make it. ’1
(Asked if he cited the Greek agreement with reference to the statement
just made, Secretary Houston replied in the affirmative.)
»1
should
find difficulty, myself, in refusing to comply with the commitments.
If
we made a commitment and they satisfy the terms of it, I do not see how
we can refuse to comply with it.
And, furthermore, to put it on the
very lowest plane, I think it would be very bad business for this
country to commence to fail to keep commitments, because we have very
large amounts due us."
Even admitting that Greece was guilty of infractions of the letter
of the agreement such as to relieve us, from a strict legal standpoint,
-13of any further obligation-, there remains nevertheless a moral obliga
tion which should not be ignored, particularly when we consider that we have
received in full the consideration originally contemplated and that the in
fractions of the agreement occurred at a subsequent date.
While these
violations of the original agreement might well justify our refusal to
recognize in full its existing validity, there would nevertheless remain
the moral factor, which should be recognized in the concluding of a new
agreement*
This is in effect what we are doing by granting to Greece
those credits which she heeds at present for the humanitarian work of
refugee settlement, and the granting of which the Greek Government admits
will discharge in full any obligations tha.t may have arisen by virtue of
the 1918 agreement.
After a painstaking study of the entire record, my conclusion is that,
while the events of the last ten years may have modified and altered the
nature of the original obligations, there nevertheless remains a commit
ment of a moral character of sufficient weight to justify our making an
advance to Greece in the very moderate amount which the Greek Government
now asks for, for the highly humanitarian purpose specified in this
agreement,
Greece on her part recognizes her obligation by making a
definite commitment as to the payment of her debt.
Thus this agreement
adjusts all differences between the two countries*
Should it fail, these
differences must remain unadjusted for years, a constant source of irrita
tion, particularly as they will necessarily involve a feeling on both
sides that something in the nature of a breach of faith is involved.
The settlement of the Greek debt will conclude, so far as is possible
at this time, the funding of all the war debts owing to the United States,
There, will remain the debts of Armenia, Austria, and of Russia,
There is attached as "Exhibit A" the letter from Secretary McAdoo
to President Wilson dated December
8,
1917.
EXHIBIT A
secretary of
Tim
treasury
Washington
December
8,
1917*
Dear Mr. president*
I have received, through the State Department, a cable from
Assistant Secretary Crosby containing the following passage with
reference to Greece;
Referring to G-reece Supreme War Council at Ver
sailles# Meeting concluded, “louse voting affirmative
ly that it is of prime military importance that VenizqI os
should return to Greece# Satisfied with support
Allies and asked Finance section of Inter-Allied Con
ference to prepare plan for such support# After pro
longed conference following plan satisfactory to Venizelos and his Finance Minister piomides is unanimous
ly recommended to Governments of United States, France
and Great Britain Military requirements of Greece for
coming year based on report of France Finance and Mili
tary Missions involving promptly increasing active army
from present three divisions to at least nine divisions
will require about six hundred million francs for muni
tions and supplies for Army and llavy herein called muni
tion and supplies fund and seven hundred fifty million
francs for payment of soldiers and sailors and ether
local military expenditures, including certain arrears
herein called military funds# France and Great Britain
have agreed to provide munition and supply fund reserv
ing for determination until after conclusion of peace
extent and manner of their reimbursement by Greece in
light of various considerations, including results of
terms of peace to Greece# I have declined to recommend
participation by the United States in this advance be
cause of extent to which European political questions
which do not concern us may be involved in ultimate
settlement. Representatives of Great Jritain and France
recognize fairness of this position but may later urge
that we share this burden# Conditioned upon this fund
being supplied by France, Great Britain recommends that
United States join with France and Great Britain in
supplying military fund of seven hundred fifty million
francs upon following terms: advances to be provided
as required under supervision of military and financial
commissions sitting at Athens, including representatives
of United States, France and Great Britain and Greece#
I believe our present Minister and Military Attache if
-
2
-
there is one will be sufficient representation for us
in commissions above mentioned. Advances to take form
of credits in dollars., francs and sterling which will
serve as basis for Greek banknotes, Greece to have right
actually to draw against these credits during the War
only in case balances abroad of Greev. treasury and Na
tional Dank should fall below one hundred million francs.
Six months after conclusion of peace credit can be drawn
upon without restriction* The three Powers joining in
advances are to receive Greek five per cent obligations
loan fifteen years after cessation of hostilities Greece
agreeing that no pledges shall be created in favor of any
subsequent exterior loan without consent of three lending
Governments, So long as and to extent that Greece does
not draw against credits interest on obligations will be
remitted. Obligations to be received by United States
to contain special provisions meeting the requirements
of our September law. Agreement contains other details
for protection of lenders. Colonel House and General
Bliss join in recommending our joining in support of
Greece in view of urgent military necessity and upon
principle that we should join with Great Britain and
Prance in supporting military programs of weaker na
tions whose military cooperation important to aid in
accomplishing desired victory even though involving
advance for expenditures outside our country» If plan
approved will agree upon precise amount dollar credit
to represent our third in the aggregate advance herein
for convenience expressed as seven hundred fifty million
francs, Greek Minister at Washington will be authorized
to sign obligations,
I am disposed to feel that,in view of the' joint recommendation
of Colonel House, General Bliss and Mr. Crosby, that this be done,,
we should join with Great Britain and France and advance one-third
of the 750,000,000 francs to Greece although this does involve ex
penditures outside of our country.
If you approve, may I ask that
3 -
you indicate your approval upon this letter, carrying as it will
the establishment of a credit for Greece of 250,000,000 frames,
or approximately
*1-4,000,000 at the current rate of exchange.
Cordially yours,
W. G. McADOO
Secretary .
The President
The White House.
THE WHITE HOUSE
Approved:
10 December, 1917*
Woodrow Wilson,
February 17, 1S28
To Heads of Bureaus and Offices, and
Chiefs of Divisions, Secretary^ Office,
treasury Department*
It is directed that hereafter all communications
addressed to Senators and Congressmen or to the Chairman of
Committees of Congress he transmitted in duplicate, an addi
tional carbon copy of each such communication being prepared
for this purpose*
A. W. MELLON
Secretary of the Treasury
TREASURY DEFARTliENT
FOR I1C-EDIATE RELEASE
TUESDAY, FEBRUARY 21, 1928.
Statement by Secretary of the Treasury Mellon:
The G-overnment of the United States holds a bond of the Austrian
Government in the principal sum of $24,055,708.92, given in payment for
supplies, furnished for Austrian relief in 1919 and 1920.
The bond is
by its terms
dated September 4, 1920, and/matured January 1, 1925, but under the terms
of the so-called Lodge Resolution of April
6,
1922, the Secretary of the
Treasury extended the maturity date until June 1, 1943, and at the same
time subordinated the lien enjoyed by the United States for the purpose
of permitting the reconstruction loan of 1923.
Certain other governments, namely, Denmark, France, Great Britain,
Italy, The Netherlands, Norway, Sweden, and Switzerland, hold relief
bonds of similar character in the sum of about $85,000,000.
They like
wise agreed to subordinate their liens to the reconstruction loan of 1923,
which in addition was guaranteed by several of these governments.
The relief bonds enjoy "a first charge upon all the assets and
revenues of Austria".
The principal exception to this first charge is
that in favor of the 1923 reconstruction loan.
The relief bonds rank
ahead, of Austrians reparation obligations.
The Austrian Government now desires to float a new loan of about
$100 ,000,000 for the continuation of the program of reconstruction.
The proceeds would be applied to the repair, improvement and re-equipment
of the Austrian railway, telegraph, and telephone systems.
The lien enjoyed by the relief bonds makes it difficult, if not im
possible, for Austria to obtain the necessary funds for this purpose.
Accordingly the Austrian Government has requested the governments
-
2
-
holding Austrian relief bonds and also the Reparation Commission to
subordinate their liens in favor of the new loan.
The Treasuryr is advised that all of the foreign governments con
cerned have already informed the Austrian Government that they aro will
ing to take the desired action, providing that all of the governments
in a similar position do likeT/ise.
Reparation Commission has
similarly
It is further understood that the
agreed to subordinate the reparation
lien on Austria's assets and revenues in favor of the new loan.
The
Austrian Government has requested the Government of the United States
to take similar action.
Since unanimous consent is required, failure
of the United States to join the other governments concerned in grant
ing Austria's request would constitute a barrier to the floating of the
new reconstruction loan.
The matter has been carefully considered by the Secretary of State
and the Secretary of the Treasury, and it is proposed to recommend to
Congress that tho Secretary of the Treasury bo granted the authority
in his discretion to subordinate the lien of the United States on
Austria's assets and revenues to the extent necessary to permit the
flotation of the loan now proposed, subject, of course, to satisfactory
notification that the other governments and the Reparation Commission
agree to take similar action,
POR IMMEDIATE RELEASE
Monday, March 5, 1928
TREASURY DEPARTI.iSlTT
The Secretary of the Treasury announced:
Pinal steps were taken today in connection with the funding of
the indebtedness of the Kingdom of Belgium to the United States.
Viscount de Lantsh.eere, Pirst Secretary of the Belgian Embassy at
Washington, delivered to the Treasury 120 gold bonds of his Government
in the principal amount of $413,580,000, receiving in exchange the
original obligations given by his Government in connection with cash
advances and surplus war materials sold by the United States Liquidation
Commission (ïïar Department).
Thé difference between the principal
amount of the bonds delivered and the principal amount of the debt as
funded represents the principal amount of $4,200,000 of such bonds paid
off since the date as of which the funding agreement became effective.
The Act approving the Belgian settlement was signed by the
President April 30, 1926*
The debt funding agreement has likewise been
approved by the Belgian Government.
TREASURY DEPARTMERT
EOR tlMB'IATE RELEASE,
Tuesday, March 6 , 1928.
Statement by Secretary of the Treasury Mellon;
Some days ago there arrived in Hew York from the Rational Rank of
Soviet Russia some ^5,000,000 of gold, half of which was consigned to the
Chase Rational Rank and the other half to
agents*
the Equitable Trust Company as
Since 1920 the Treasury Department has refused to accept at the
United States mints and assay offices gold coming from Soviet Russia, the
State Department having declined to give assurances that the title to
Soviet gold will not he subject to attack internationally or otherwise*
In this particular instance the Treasury Department asked the Equitable
Trust Company and the Chase Rational Bank whether they were ready to purchase
the gold from the Rational Dank of Soviet Russia and present it to the assay
office at Rev/ York as owners.
The two banks have just informed this Depart
ment that they are unwilling to purchase Soviet gold before presenting the
same at the assay office and that the presentation, if made, would be solely
as agent for the Russian Dank*
The provisions of law under which the Treasury acts in purchasing gold
or bullion through the United States mints and assay offices are as follows;
Section 3519, Revised Statutes; "Any owner of gold
bullion may deposit the same at any mint to be formed into
coin or bars for his benefit * * * * "
Inasmuch as provision is made by law only for deposits by owners of gold,
and since the Equitable Trust Company and the Chase Rational Dank are un
willing to present the gold as owners, the Hew York assay office will decline
to receive this $5,000,000 of gold.
TREASURY DEPARTMENT
FOR RELEASE, M O V I N G PAPERS,
THURSDAY, ¡¿ARCH 8, 1928.
STATEirETIT 3Y SECRETARY MELLON
The Treasury is today announcin'' its regular March financing,
which takes the form of an offering of Treasury certificates of indebted
ness in two series, both dated and bearing interest from March 15, 1928,
one series at 3-1/4 per cent, being for nine mont-is, maturing December
15, 1S28, and the other series at 3-3/8 per cent, being for one year,
maturing March 15, 1929,
The amount of the nine months1 offering is
$200,000,000, or thereabouts, and the amount of the one year offering
is $360,000,000, or thereabouts.
The Treasury will accept in payment
for the new certificates, at par, Treasury certificates of indebtedness
of Series TM-1928 and TM2-1928, both maturing March 15, 1928.
Sub
scriptions for which payment is to be tendered in certificates of indebted
ness maturing March 15, 1928, will be allotted in full, up to the amount
of the respective offerings.
About $514,000,000 of Treasury certificates of indebtedness
become payable on March 15, 1S28.
Also, about $83,000,000 in interest
payments on the public debt become payable on that date.
The present offering, with tax and other receipts, will cover
the Treasury* s cash requirements until June.
A copy of the official circular is attached.
UNITED STATES OF AMERICA
TREASURY CERTIFICATES OF INDEBTEDNESS
D ated and bearing interest from M a rch 15, 1928.
Series T D 2 -1 9 2 8 , V /i per cen t, due D ecem ber 15, 1928.
Series T M -1 9 2 9 , 3 ^ per cent, due M a rch 15, 1929.
The Secretary of the Treasury, under the authority of the act approved September 24, 1917, as
amended, offers for subscription, at par and accrued interest, through the Federal Reserve Banks, Treas
ury certificates of indebtedness, in two series, both dated and bearing interest from March 15, 1928, the
certificates of Series TD2—1928 being payable on December 15, 1928, with interest at the rate of three
and one-quarter per cent per annum, payable on a semiannual basis, and the certificates of Series TM-1929
being payable on March 15, 1929, with interest at the rate of three and three-eighths per cent per annum,
payable semiannually.
Applications will be received at the Federal Reserve Banks.
Bearer certificates will be issued in denominations of $500, $1,000, $5,000, $10,000, and $100,000.
The certificates of Series TD2-1928 will have two interest coupons attached, payable June 15, 1928, and
December 15, 1928, and the certificates of Series TM-1929 two interest coupons attached, payable Sep
tember 15, 1928, and March 15, 1929.
The certificates of said series shall be exempt, both as to principal and interest, from all taxation now
or hereafter imposed by the United States, any State, or any of the possessions of the United States, or
by any local taxing authority, except (a) estate or inheritance taxes, and (b) graduated additional income
taxes, commonly known as surtaxes, and excess-profits and war-profits taxes, now or hereafter imposed
by the United States, upon the income or profits of individuals, partnerships, associations, or corpora
tions. The interest on an amount of bonds and certificates authorized by said act approved September
24, 1917, and amendments thereto, the principal of which does not exceed in the aggregate $5,000, owned
by any individual, partnership, association, or corporation, shall be exempt from the taxes provided for in
clause (6) above. The certificates of these series will be accepted at par during such time and under
such rules and regulations as shall be prescribed or approved by the Secretary of the Treasury, in pay
ment of income and profits taxes payable at the maturity of the certificates. The certificates of these series
will be acceptable to secure deposits of public moneys, but will not bear the circulation privilege.
The right is reserved to reject any subscription and to allot less than the amount of certificates of either
or both series applied for and to close the subscriptions as to either or both series at any time without
notice. The Secretary of the Treasury also reserves the right to make' allotment in full upon applications
for smaller amounts, and to make reduced allotments upon, or to reject, applications for larger amounts,
and to make classified allotments and allotments upon a graduated scale; and his action in these respects
will be final. Allotment notices will be sent out promptly upon allotment, and the basis of the allotment
will be publicly announced.
Payment at par and accrued interest for certificates allotted must be made on or before March 15, 1928,
or on later allotment. After allotment and upon payment Federal Reserve Banks may issue interim receipts
pending delivery of the definitive certificates. Any qualified depositary will be permitted to make payment
by credit for certificates allotted to it for itself and its customers up to any amount for which it shall be
qualified in excess of existing deposits, when so notified by the Federal Reserve Bank of its district. Treas
ury certificates of indebtedness of Series TM—1928 and TM2—1928, both maturing March 15, 1928, will be
accepted at par in payment for any certificates of the series now offered which shall be subscribed for and
allotted, with an adjustment of the interest accrued, if any, on the certificates of the series so paid for.
As fiscal agents of the United States, Federal Reserve Banks are authorized and requested to receive
subscriptions and 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.
A. W. M ELLON,
S e c r e ta r y o f the T r e a s u r y .
T
r e a s u r y
D
e p a r t m e n t
,
O ffic e o f the S e c r e t a r y ,
M arch 8 , 1928.
Department Circnlar N o . 395
(Public Debt)
TO T H E IN V E S T O R :
Almost any banking institution in the United States will handle your subscription for you, or you may make subscription
direct to the Federal Reserve Bank of your district. Your special attention is invited to the terms of subscription and allotwent as stated above. I f you desire to purchase, at the market price, certificates of the above issues after the subscriptions
c ose, or certificates of any outstanding issue, you should apply to your own bank, or, if it can not obtain them for you, to the
federal Reserve Bank of your district, which will then endeavor to fill your order in the market.
» — 14603
U . S . G O V E R N M E N T P R IN T IN G O F F IC E : 1928
Lismir LPPAkTLIEMT
POxi nhLEASK : tOKOTM PArlkS
SUiiDAY, MAKCM lX , 1928.
March 10, 1928.
Uy dear Senator Walsh*
I "beg to acknowledge receipt of yours of March 10th enclosing the exhibits
which were introduced at the hearing before the Public Lands Committee this
morning with reference to certain transactions of the late Mr. John T. Pratt.
I
know nothing whatsoever concerning these transactions, nor do I have any knowledge
as to contributions to the Kepublican National Committee made by Mr. Pratt.
Among the papers which you sent me is a pencil memorandum containing what
I assume you to believe to be a reference to me, inasmuch as it appears to be
the occasion for sending me these papers.
I have no knowledge as to the occa<*i
si on for making this memorandum, nor, of course, do I know what Mr. Pratt had
in mind in making the notation.
I desire to take this occasion, however, to state to 3^ou all facts relating
to my contribution to the kepublican 1'Taticnal Committee.
Sometime in 1923 I was asked to contribute to the fund then being raised to
clean up the deficit of the Kepublican national CcmmiW’ee.
but no amount was specified.
I said I would help
Subsequently Mr. Hays telephoned me one day that
he was sending me by messenger a package containing valuable documents and that
he would see me shortly and explain what was involved.
nearly as I can remember $50,000 of Liberty pends.
The package contained as
There had been no previous
understanding of any -kind as to sending me bends, and until I saw Mr. Mays later,
I had no knowledge as tc the purpose in sending them to me.
knowledge as tc contributions in the form cf bonds.
Her did I have any
When Mr. Mays called shortly
thereafter, he told me he had received these bends from Mr. Sinclair and suggested
-
2
-
that I held the lends and ccntribute an equal amount to the fund.
clined tc do.
This I de
Accordingly I at once returned the "bends to fir. Hays,
At the
same time, or shortly thereafter, I made a contribution of «$50,000 of my own
funds, which was the amount I had intended to contribute; and which, incidental
ly, is the only contribution made by me to the national Campaign fund, of 192*0,
exclusive of $2,000 contributed during the campaign;
I am returning herewith the exhibits.
Sincerely yours,
(Signed)
'Ion. Thomas J. Ualsh,
United States Senate
A. W. Mellon.
TREASURY DEPARTMENT
FOR RELEASE, MORTOIO PAPERS
Tuesday, March 13, 1928.
Secretary Mellon announced that subscriptions for the two issues of
Treasury certificates of indebtedness, Series TD2—1928, 3^ per cent, dated
March 15, 1928, maturing December 15, 1928, and Series TM-1929, 3 3/8 per cent
dated March 15, 1928, maturing March 15, 1929, closed at the close of business
on March 10, 1928,
Reports received from the twelve Federal Reserve Banks show that for the
offering of 3J- per cent certificates of Series TD2-1928, which was for
vj200,000,000,
or thereabouts, total subscriptions aggregate some $340,000,000,
and that for the offering of 3 3/8 per cent certificates of Series TM-1929,
which was for $360,000,000, or thereabouts, total subscriptions aggregate some
$660,000,000.
As previously announced, subscriptions in payment of which
Treasury certificates of indebtedness of Series TM-1928 and Series TM2-192G,
both maturing March 15, 1928, were tendered, wore allotted in full.
Upon
these exchange subscriptions about $107,000,000 have been allotted.
Allot
ments on the cash subscriptions for
were made as follows:
per cent certificates of Series TD2-1928
All subscriptions in amounts not exceeding $10,000
for any one subscriber were allotted in full#
Subscriptions in amounts over
$10,000^ but not exceeding $100,000 for any one subscriber were allotted 80
per cent, but not less than $10,000 on any one subscription;
subscriptions
in amounts over .¿100,000 but not exceeding $500,000 for any one subscriber
were allotted 70 per cent but not less than $80,000 on any one subscription;
subscriptions in amounts over $500,000 but not exceeding $1,000,000 for any
one subscriber were allotted 50 per cent but not less than $350,000 on any
one subscription;
ard subscriptions in amounts over $1,000,000 were allotted
‘*0 per cent but not less than $500,000 on any one subscription.
Allotments
- 2 -
on cash subscriptions for 3 3/8.per cent certificates of Series TU-1929 were
made as follows;
All subscriptions in amounts not exceeding ('1,000 for any
one subscriber .were allotted in full.
Subscriptions in amounts over $1,000
but not exceeding $10,000 for any one subscriber were allotted 80 per cent,
but not less than $1,000 on any one subscription;
subscriptions in amounts
over $10,000 but not exceeding $100,000 for any one subscriber were allotted
70 per cent, but not less than $8,000 on any one subscription*
subscriptions
in amounts over $100,000 but not exceeding $1,000,000 for any one subscriber
were allotted 50 per cent, but not less than $70,000 on any one subscription;
and subscriptions in amounts over $1,000,000 were allotted 40 per cent, but
not less than $500,000 on any one subscription,
Further details as to subscriptions and allotments will be announced when
final reports are received from the Federal Reserve Banks,
TREASURY DEPARTMENT
FOR IMMEDIATE RELEASE,
Wednesday, March 14, 1928.»
Secretary Mellon today announced that the total amount of subscrip
tions received for the two issues of Treasury certificates of indebtedness,
Series TD2-1928, 3|- per cent, dated March 15, 1928, maturing December 15,
1928, and Series TM-1929, 3-3/8 per cent, dated March 15, 1928, maturing
March 15, 1929, was $1,000,773,000.
The total amount of subscriptions
allotted was $562,491,500, of which $107,058,500 represents allotments
on subscriptions for which Treasury certificates of indebtedness of
Series TM-1928 and TM2-1928, maturing March 15, 1928, were tendered in
payment*
All of such exchange subscriptions were allotted in full, while
allotments on other subscriptions were made on a graduated scale.
The subscriptions and allotments were divided among the several
Federal Reserve Districts as follows:
SERIES TD2-1928
Federal Reserve
District;
Total Subscrip
tions Received:
Total Subscrip
tions Allotted:
Boston
New York
Philadelphia
Cleveland
Richmond
Atlanta
Chicago
St. Louis
Minneapolis
Kansas City
Dallas
San Francisco
$
$
Total » . . . *
12,883,500
155,325,000
26,570,500
16,360,000
25,658,500
17,419,000
23,628,500
6,974,000
1,929,500
7,371,500
9,646,000
36,304,000
$ 340,070,000
9,335,000
90,450,500
14,255,500
9,585,000
15,522,000
12,983,000
15,631,500
3,784,500
1,504,500
4,604,000
6,279,500
17,609,500
$201,544,500
(See following page for figures covering Series TM-1929)
f
SERIFS TM-1929
Federal Reserve
District:
Total Subscrip
tions Received:
Total Subscrip
tions Allotted:
Boston
Hew York
Philadelphia
Cleveland
Richmond
Atlanta
Chicago
St. Louis
Minneapolis
Kansas City
Dallas
San Francisco
$
$
Total .
.
49,162,500
251,182,000
44,850,000
32,608,500 25,326,000
39,696,000
95,031,500
18,827,000
7,770,500
13,003,000
19,103,000
64,143,000
$ 660,703,000
27,124,000
140,222,500
26,255,500
15,412,000
15,134,000
24,277,000
51,570,500
9,283,500
5,112,500
7,700,000
11,202,500
27,653,000
$ 360,947,000
Total Subscriptions, both series..,...$1,000,773,000
Total Allotments, both series ....
562,491,500
FOB. RELEASE, SATILTAY MOBY ILL,
MARCH 17, 1928.
speech
* m m t BELIVERED BY HON. OGDEN L. MILLS
AT THE FIFTEENTH ASSEMBLY DISTRICT REPUBLICAN CLUB
Oil FRIDAY EVENING-, MARCH 16, 1S28,
AT THE MEETING- OF THE CLUB HELD TO DISCUSS PRESIDENTIAL CANDIDATES.
- - - - - - - -
oOo - - - - - - - -
There is no more important event than the nomination by one of the
t'
¿
to great Parties of a candidate for the presidency.
It is of greater im-
portance almost than the election proper, for the people then are limited to
the choice of one of two men*
There rests on National Conventions, there
fore, a particularly solemn and patriotic duty.
They should perform that
duty in a manner commensurate with its importance, and with a view to en
suring that the nominee selected will be the real choice of the ranh and
file of Republicans throughout the Country.
There must be no secret meet
ings; there must be no delivered delegates.
We want our candidate for the
Presidency nominated in open convention by the delegates themselves, voting
in accordance with their own individual judgment and the wishes of their
constituents.
This is the only way to ensure that the choice of the Con
vention will be the choice of the Party.
Now, this cannot be brought about at the last minute.
It must be
preceded by free, open, frank discussion of the merits of the available
candidates; b:/ an expression of opinion of the Party members, through
primaries, meetings, conventions and individual declarations; and by the
statement of their attitude on the part of the delegates themselves.
Thus,
by the time the Convention meets, a background of public opinion has been
formed whereby the delegates may be enlightened and guided in making their
- 2 ~
choice.
It does not seem to me that it is necessary to instruct or pledge
the latter though it is quite proper to dc sc.
They should retain their
freedom, subject to the solemn obligation fairly to represent the views of
their constituents; and, in fairness to the latter, they should be willing to
state their views and should not expect to receive a general and blind power
of attorney.
If these essential preliminaries are dispensed with; if there are no con
tests, no open and frank discussions, no declarations by leaders and delegates;
no opportunity given to the rank and file to express themselves, the road
leads inevitably to a managed Convention,to the hotel parlor rather than to
the convention hall, and to disaster on election day.
It is for these reasons that I congratulate this District most heartily
on holding a meeting of this character.
We are going to discuss candidates
frankly, in the expectation that such a discussion will help develop a definite
opinion on the part of the Republicans in this District, which will, in turn,
help our delegates properly and faithfully to represent us.
That there are a number of candidates for the Republican nomination, is
a wholesome and desirable situation.
That men of talent, service and ambition
should aspire to this great office, is natural and proper.
That men should
differ as to their availability and qualifications, is equally natural.
But
the fact that one man is favored ahead of others, should not be interpreted
by them or their
supporters as in any sense a reflection on them.
After all,
only one man can be chosen, and the best way of arriving at an intelligent
choice is by friendly debate and argument,
I favor Mr. Hoover because, by reason of his natural ability and genius;
^he extent and character of his training, knowledge and experience; his
courage, decisiveness and resourcefulness; and his record of service, he is
supremely well qualified to fill the office of President at this particular
time*
the problems of this day and generation, it looks almost
a kind Providence had fashioned and furnished the nan to meet them.
if
As
Will Rogers tersely said, "The Republican Convention will determine this year
whether qualifications are an asset or a liability".
Begin by applying this simple test»
if the United States were a great
business corporation, on which you were bofccpietely dependent for your prosper
ity and well-being* and you were a stockholder uninfluenced by any other con
siderations, other than the wish to ensure the successful operation of the
corporation, whom would you hire as your manager for the next four years?
The answer, I think, is Hoover.
Well, the problem before you is not funda
mentally different from the one I have just described.
When you think in
terms of approval of the Coolidge Administration, you unquestionably have the
economic policies principally in mind, and in assigning credit for those
policies, three names stand out above all others— Coolidge, Mellon, and Hoover.
Of tjie three only one has avowed his readiness to carry on.
Tnis is an economic age, in the sense that the peace, prosperity and hap
piness of this generation of human beings depend on the wise solution of
economic rather than, any other problems.
Organized society has brought into
being mighty economic forces which, if they make possible the structure and
organization of modern society, at the same time need constant and intelligent
control and direction.
Before them the individual is helpless.
Standing'
alone, he is nearly at all times the creature of conditions beyond his ken
mad grasp*
All he knows is that at times he has ample opportunity for work
at ample wages, for saving and progress, and that at other times, without ary
fault on his part, lie has been largely deprived of these opportunities.
reads
01
He
expanding or contracting production, increased or decreased prices,
car-loadings, delivery contracts, manufacturing activities, bank credits,
agricultural prices and crops, exports and imports, and of expanding or con—
- 4 -
tracting foreign markets.
They represent the intricate and comprehensive sys-
tem of statistics we have set up to measure and gauge the direction and volume
of tne various forces that in the aggregate spell prosperity or hardship to
120,000,000 people, and possibly to control them.
They represent the guide
and sign-posts whereby those who study and understand the interplay of the
various forces that are at work in the economic field seek to guide and di
rect thorn*
To the individual standing alone they mean nothing, since he
cannot affect their course.
But individuals once properly organized and
intelligently led can effect a measure of control.
Just as in the past the problems of the hour called for varying types of
men, whether lawyers, legislators, politicians, soldiers, or diploma/ts, so
to-day we need at the head of the United States a man whose training, abilities
and broad experience enable him to grapple with and understand these intricate
and world-wide forces, and to furnish the leadership and direction that will
enable the nation to control and direct,them for the common good.
the men in public life, Mr. Eoover is supreme in this line.
Of all
If there is a
major economic problem in the life of this nation with which his vigorous and
resourceful mind has not already become thoroughly familiar, I have yet to'
discover it#
In fact, it is in connection with just such problems that I came to
knc’w Hoover*
When I was in Congress we were called upon at one time or
another to deal with problems relating to agriculture, railroads, foreign
debts, foreign trade, the tariff, and other kindred questions*
I soon dis
covered that if one wanted one*s ideas clarified by a simple statement of the
essence of uhe problem, if one wanted to lay oners finger on the fundamentals,
if one wanted one* s imagination stimulated by constructive suggestion, one
had hat to trace one*s steps to the office of the kindly, modest, soft-spoken
man who presided over *he Department of Commerce*
I,4y extraordinarily high
opinion of Mr. Hoover is not founded on impulse or on second-hand knowledge—
it is "based on long observation and direct contact.
I believe him to he one
of those rare individuals who appear from time to time as necessity calls
them forth, and who, if given the opportunity* profoundly modify for the
better the course of human events;
I am speaking now of the things that
count in life, not of the shallow and inconsequential concerns of those who
think simply in political terms of the conflicting issues of the hour*
The opinion of one man counts hut little, hut surely the almost fanatical
veneration in which Mr. Hoover is held by every man that has worked under and
with him while he performed the mighty tasks of the last fourteen years, their
unbounded enthusiasm for the "Chief'’, their unlimited faith in him and his
ability, is more eloquent testimony in behalf of ny contention than any
words could be.
much*
Some people have the ability to work alone and accomplish
Par fewer in addition to what they accorqplish by their own efiorts,
are able to magnify and increase their accomplishments many times by sup
plementing what they do themselves with the inspiration and leadership
that impel thousands of others to give their best-.
Hoover.
This is the way of
My friend, William Hard, who is a singularly keen-minded
journalist, with an unusual sense of humor, has described the Hoover
method much better than I can.
Says Mr. Hard:
"7/e were already familiar» in 1917, with Mr, Hoover’s Belgian
Belief*
Yet I remember that not once did I really penetrate the
Hoover mythology on towards Some comprehension of the Hoover reality
till in 1920 1 happened to be in Vienna, Austria» and happened to
observe Mr. Hoover’s American Belief Administration at work feeding
Viennese children.
”1 noted then, if I may put it with exaggeration, that just about
everybody in Vienna who y/as not occupied in being fed by Mr, Hoover
was occupied in helping Mr* Hoover to do tho feedingi
For every
American serving as an assistant to ilr* Hoover in Vienna there were
literal^, more than one thousand Austrians so serving him.
The
American ’overhead’ waC» in hulk, nothing.
The massive phenomenon
was the use of» and the reiedse of, Austrian initiative, Austrian
energy» Austrian goodwills
,fMr. Hoover, I began to think to ryself, is not precisely figured
forth by the image of a machine.
Ho seems more to resemble a
bacillus.
He gets cast into this Austrian culture and medium, and
loi swarms and swarms of Bacilli Kooveriani swimming about and doing
his vsorx for him and propagating Hooverism.
I1I let rny mind turn back then to Mr. Hoover’s Belgian Belief.
On reflecting, and on further inquiry, I noted that in feeding
Belgium Mr, Hoover did more than feed Belgium.
He brought a vast
multitude of people together in ah association which could not
perish.
*
*
*
*
*
»1« *
nX note that the swarms of Bacilli Ho over ian i propagating
Hooverism in Belgium and in Austria and in other European countries
have now been succeeded and supplemented by innumerable similar
swarms in the United States of America.
/
- 7 -
’’Does Mr. Hoover find in his Department of Commerce a Bureau of
Fisheries? He persuades Congress to pass a law establishing an advisory committee of* rivdto citizens to help him manage it.
$
4s
*
sfr
*
*
’’Does he find in his Department a Bureau of Standards? It now
is blessed with some eighty advisory committees of technical reuresontafives of private industrial groups.
* * * * * *
»Does ho get fascinated by the glamorous idea of saving large
sums of money annually for American business by standardizing the
sizes and the verbal forms of warehouse receipts? Presently there
is a committee of warehousemen and bankers and shippers and carriers
struggling with the idea in the light of their practical knowledge
of its difficulties and of its benefits.
* * * * * *
”Mr. Hoover has evolved the public-private Department. He has
evoked the private-public citizen. This is his genuinely unique con
tribution to our governmental scheme. And it is not merely a method.
It flows from a convinced philosophy.”
Stated in a few words, all this means organizing ability of a very
high order.
This, indeed, in large measure is the secret of Hoover*s
success, whether in Europe feeding the starving millions or in the
Mississippi Valley saving the victims of a great flood.
It is the complete answer to those Republicans who ask me anxiously
what will become of the party organization under Mr. Hoover.
Let them
study his record, let them realize that organization and collective ef
fort ,arc his mainstays, and they will appreciate that, after four years
of Hoover -s president, the Republican Party will be better organized,
mor,
effective, and more vigorous than in many a long year.
He will in
spire it with a. new life and spirit, and will make a. particularly strong
'ppcal to men and women of the younger generation who do not seem fully
to appreciate ho1-' import, wit a p.art of the machinery of government our
parties are .
As one Republican sold to me last week, ”If we can elect
7P
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Hoovrr for four, years,
to
- can keep th‘
. party in power for fifty.”
Ho
is on optimist, but there is a great measure of truth in whht he says.
Lei ns consider briefly the record of the man.
I am not so much
concerned with his early life, though the fact that he was the son
of
an Iowa blacksmith, orphaned at an early age, and that ho began, earning
his own living it thirteen, will seem of importance to those who delight
. and
in the contrast between a humble beginning/a subsequent dazzling success.
Suffice it to say that his existence has never been a sheltered one.
is where he is to-day because he had it in him to get there.
He
Ho was al
ready a self-ma.de, successful man before the world heard of him, with'’a
high standing in a most exacting profession.
Moreover the comprehensive
knowledge of international. conditions and affairs obtained by him the
world over in his engineering and later in his public work, under war
conditions, will be of inestimable v.aluc to a President of the United
States during the next four yo.ars.- 7c are no longer isolvated.
Our own
future and prosperity are inextricably bound up with the future .and
prosperity of other nations, .and under modern conditions no man can
adequately protect and promote the interests of our own people without
.a clear understanding of the problems and conditions which exist in the
rest of the world.
For me Hoover’s life begins in 1914, when he stepped full-grown on
the world’s stage.
From then on his career is .almost epic in character*,,
He is first heard of organizing the relief of 160,000 Americans stranded
in Europe.
He then became head of the Commission for the Relief of Belgium,
formed under his chairmanship, which for over four years was to feed and
provision a, nation of over ten million people.
of a government than a private enterprise .
This Commission was more
It purchased quantities of
food in the world markets; it operated, its own fleet of 200 ships, to¿oth.^r with canal boats, railways, warehouses, slaughter houses, bnkorios and flour mills; it expended a billion five hundred million dollars;
its overhead was only one and r. half per cent., and its final statement
of accounts was accepted without question by all governments.
fretty good for the hitherto unknown son of the Iowa blacksmith,
aged forty.
Pretty good for the country that breeds such men.
Better
still if that country will recognize such a son and give him the oppor
tunity to servo commensurate with his abilities.
The Belgian story is typical of all that follow.
Returning in 1917,
he organized the United States Pood Administration, which promoted and
directed our fcod exports, which rose from six million tons annually be
fore the Par to twenty million tons, and handled food purchases to the
va.luu of over seven billion dollars, without a. breath of.scandal«
1919
found him in Burope organizing and. directing the food supply of enemy
and liberated countries, directing many activities looking to the economic
restoration of that continent, organizing the American Relief Adminis
tration for thu care of destitute children of enemy a.nd liberated countries
feeding, clothing and giving medical care through American charity to over
ter, million of them; organizing the campaign against the typhus epidemic,
then raging in Eastern Europe, a campaign which reduced the number of af
flicted from 600,000 to 10,000 in six months.
It is no exaggeration to
say that he in these six years rendered greater direct service to more
human beings than any other individual since the world began.
TThatever
the future holds for him, one legend is already indelibly engraved on the
pages of history:
This mam served humanity.
It is not unworthy of note that, though some eleven billion dollars
of public money passed through tnc hands of tho Hoover organizations dur
ing these years, there has never been a complaint, never an investigation,
never h suspicion connected with these transactions.
The name of Hoover
has been sufficient, in all instances to^guarantee thoir integrity*
Fron IS21 to the present day lie has served the people of the United
States nr Secretary of Commerce*
Hr has transformed an obscuro depart
ment of government into one of tuo most useful agencies for the promotion
of industrial efficiency at home and of our trade «aboard.
Seven years
ago the individual demands of our merchants vr.d manufacturers for specific
services numbered but two hundred thousand annually, to-day they number
two million.
There has been no limit to tho Department’s «activities:
The dovo1oornent of our navigable rivers, the conservation of our fish, the
fight against high prices fixed unon us by foreign combinations, the pro
motion of Federal regulation and encouragement of aviation, the regulation
of radio broadcasting, the encouragement of legitimate trade .associations
among business men, the simplification of our patent laws, the standard
ization of basic commodities, the campaign against industrial vaste, the
camnaign against seasonal operation and employment in the construction
industry, the relief of the Hu'ssinn famine, which prevented the starvation
of fifteen million human beings in 1922; and last, but not least, the
direction of Mississippi flood relief, rrhich provided for tho rescue, care
and rehabilitation of 650,000 of our people,— are all deserving of mention,
but by no means exhaust the list of Hoover activities or fully enumerate
his record of oublic service.
They explain in part his comprehensive grasp
of our economic'and social problems, pnich, combined with M s knowledge of
w o M d conditions, will enable him to bring to the Presidency «an unrivaled
equipment*
11
The danger cf such a picture as I have described is that you will
fora the impression of some super-man, towering so far above the rest of
us as to be out of touch with daily human needs and wants.
miss it.
You can dis
There never was a more.human, approachable and understanding
individual than this man Hoover who, starting at the bottom, learned
early that life is a field of battle and not a bed of roses, and through
sheer ability and character has fought his way to the top.
He is a
typical self-made American of the kind we are familiar with,-—
one of
those quiet, unassuming men of tireless energy, of unbounded faith and
vision, who have made our Country what it is and will continue to make
it greater as long as we continue to recognize and reward energy, ability
and character.
Hoover is the man for us to nominate because, as patriotic Americans,
we are bound to present our best man; he is the man to nominate because he
is the one candidate for whom there is nation-wide popular support; he is
the man to nominate because, as one of the leading members of the Coolidge
Administration, he has helped to shape its policies and can be relied upon
to continue them; he is the man to nominate because of his ability, experi
ence, record, character and personality; and, finally, he is the man to
nominate because I have a very definite conviction that the .American
people look to the Republiban Party to give him to the Ration, and we dare
not disappoint them.
TREASURY DEPARTMENT
FOR IMMEDIATE RELEASE
TUESDAY, MARCH 20, 1928.
Message of the President to the Congress submitting a copy of
report of the Secretary of the Treasury regarding the Austrian re
lief debt to this G-overnment:
To the Congress of the United States:
I am submitting herewith for your consideration a copy of a
report of the Secretary of the Treasury regarding the action pro
posed to be taken by the G-oyernment of the United States in respect
of the debt of Austria to this G-overnment,
The action proposed by the Secretary of the Treasury has my
approval#
I recommend that the Congress enact the legislation
necessary to enable the United States to join with the other relief
creditors in permitting Austria to obtain the additional capital
urgently needed for continuing its economic reconstruction, and to
authorize the Secretary of the Treasury to conclude an agreement
for the settlement of Austrians debt to the United States.
(Signed)
The White House,
March 20th, 1928
Calvin Coolidge.
March 19, 1928.
My dear Mr. president:
I have the honor to submit the following report in respect of the debt
of Austria to the United States government, with particular reference to the
request submitted "by the Austrian government for the subordination of the
lien enjoyed by the Government of the United States under the terms of the
relief bond of the Austrian Government held by the Treasury Department to a
new loan to be issued for reconstruction purposes, and other questions re
lated thereto.
It will be recalled that during 1919 and 1920 conditions in Austria
were so serious that the United States and a number of European governments
found it necessary to furnish foodstuffs and other relief supplies on credit.
The Act of Congress approved March 30, 1920, authorized the United States
Grain Corporation, with the approval of the Secretary of the Treasury, to
furnish flour on credit H o relieve populations in the countries of Europe
or countries contiguous thereto suffering for the want of food”.
Pursuant
to that legislation, flour was sold to Austria, and the Government of the
United States now holds an Austrian bond in the principal sum of
$24,055,708.92, given in payment therefor*
Certain other governments,
namely, Denmark, Prance, Great Britain, Italy*
The Netherlands, Norway,
Sweden and Switzerland,'hold relief bonds of similar character in the sum
of about $95,000,000.
The relief bonds of 1920 enjoy, ba first charge upon
all the assets and revenues of Austria”.
reparation obligations.
They rank ahead of Austria’s
2
The b one. held by the United States is dated September 4, 1920, and
by its terms matured January 1, 19251
In 1922, conditions in Austria
were such as to necessitate financial assistance from abroad in order
to permit the stabilization of the currency, the balancing of the Budget,
and the resumption of the economic life of the country.
Austria was at .a-low ebb*
The credit of
Uo exterior loan could be floated as long as
relief loans and r eparations constituted prior charges on Austria1s
assets and revenues.
Accordingly, the relief creditors, including the
United States* and the Reparation Commissionr agreed to subordinate their
lions to permit the flotation of a reconstruction loan.
Under the terms
of the so-called Lodge Resolution of April 6, 1922, the Secretary of the
Treasury extended the maturity date of the relief bond held by the United
States Government until June 1, 1943, and at the same time agreed to sub
ordinate the lien enjoyed by the United States for the purpose of permit
ting the reconstruction loan of 1923.
The Lodge Resolution, which set
forthlthe urgent need for relieving Austria from the immediate burden of
the lien, reads as follows:
"Whereas the economic structure of Austria is approach
ing collapse and great numbers of the people of Austria are,
in consequence, in imminent danger of starvation and threat
ened by diseases growing out of extreme privation and starva
tion; and
•'Whereas this Government wishes to cooperate in reliev
ing Austria from the immediate burden created by her outstand
ing debts; Therefore be it
"Resolved
the Senate and House of Representatives of
the United States of America in Congress assembled, That the
Secretary of the Treasury i<s hereby authorized to extend, for
a period not to exceed twentj^-five years, the time of payment
of the principal and interest of the debt incurred by Austria
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for the purchase of flour from the United. States Grain Cor
poration, and to release Austrian assets pledged for the
payment of such loan, in whole or in part, as may in the
judgment of the Secretary of the Treasury he necessary for
the accomplishment of the purposes of this resolution: Pro
vided, however. That substantially all the other creditor
nations, to wit, Czechoslovakia, Denmark, Prance, Great
Britain, Greece, Holland, Italy, Norway, Rumania, Sweden,
Switzerland, and Yugoslavia shall take action with regard
to their respective claims against Austria similar to that
herein set forth. The Secretary of the Treasury shall he
authorized to decide when this proviso has heen substan
tially complied with.”
The action of the Secretary of the Treasury under the authority of the
resolution was taken on June 9, 1923.
In 1923 a reconstruction loan amounting to about $125,000,000 was
floated by Austria in the United States and European countries.
loan was guaranteed by several of the European governments.
This
It saved
Austria from economic and social disintegration and collapse.
The pro
gram of reconstruction led to the stabilization of Austrian currency
during 1923 and the balancing of the Austrian budget by 1924.
It has
been balanced ever since.
Austria1s economic reconstruction, however, has not been completed
and the capital resources of the country are not adequate to the task.
The Austrian Government now desires to float a new loan in the net amount
of 725 million Austrian schillings, or about $100,000,000, for the con
tinuation of the program of reconstruction.
The proceeds would.be applied
to capital expenditures, that is, to the repair, improvement and re-equip
ment of the Austrian railway, telegraph and telephone systems.
The lien
enjoyed by the relief bonds makes it difficult, if not impossible, for
Austria to obtain the necessary funds for these purposes*
Accordingly,
the Austrian Government has requested the Governments holding Austrian
relief "bonds and the Reparation Commission to subordinate their liens
in favor of the new loan for a period not exceeding thirty years*
The Treasury Department is advised by the Department of State that
all of the foreign governments concerned have already informed the
Austrian Government to the effect -that they are willing to subordinate
their liens, providing all of the governments in a similar position, and
the Reparation Commission, do likewise.
It is further understood that
the Reparation Commission has agreed to subordinate the reparation lien
on Austria's assets and revenues in favor of the new loan.
The Austrian
Government ha,s requested the Government of the United States to take
similar action.
Since unanimous consent is required, f,ailure of the
United States to join the other governments concerned in granting Austria
request would constitute a Darrier to the flooding of the new reconstruc
tion loan.
Since the proposed loan would be for a term of thirty years, and
the relief bonds mature in 1943, the mere subordination of the lien may
not be sufficient to permit the flotation of the new loan.
The Austrian
Government is at present negotiating with the Government of the United
States and the other relief creditor governments terms of payment of the
relief bonds so as to provide for the liquidation of the indebtedness
over a period of years.
All of the relief bonds are of similar tenor
and contain the following clause:
’’The Government of Austria agrees that no payment will
be made upon or in respect of any of the obligations of said
Series issued by the Government of Austria before, at or
after, maturity, whether for principal or for interest, un
less a similar payment, shall simultaneously be made upon all
obligations of the said Series issued by the Government of
Austria in proportion to the respective obligations of said
Serieé.M
_
■
The Austrian Government has assured the Government of the United
States that it intends to make a settlement of the relief debt at the
earliest practicable date, and that it is prepared to make with the'
United States a settlement on a ba„sis no less favorable to the United
States tnan that made with the other relief creditor governments, or
any of them.
In view oi the terms of the bond, as set forth above, Austria can
not make a.definitive settlement of the relief obligations without the
agreement of all nine of the creditor governments.
Such .a settlement
ooviously may take some time, and it might well be impossible to submit
tno terms of settlement to the Congress at this session.
This in turn
might mean the indefinite postponement of the flotation of the new loan,
y/hich is urgently needed.
Under these circumstances it is extremely
desirable that the Executive Branch of the Government should have the
authority to clean up tne whole matter, with the limitation that our.
debt shouldibe settled on terms no less favorable than those granted
the other governments, and on the understanding that the security now
enjoyed oe not released except in so far as necessary to permit the
flotation of the contemolated reconstruction loan.
I am strongly of the ojnnion that the United States should not take
a position that would obstruct any proper and well-considered Measures
for iurtnoring Austrians reconstruction, particularly since such measures
will tend to promote our commercial intercourse with Austria and should
increase Austria's capacity to repay its indebtedness to the United
States
The natter has been given careful consideration by the Secretary
of State.and myself, and I suggest that, if you approve, legislation
be sought from Congress authorizing the Secretary of the Treasury, in
his discretion, to subordinate, for a period not exceeding thirty years
from January 1, 1929, the lien of the United States on Austria's assets
and revenues to the extent necessary to permit the flotation of the
loan now proposed, subject, of course, to satisfactory notification
tnafc the other governments and the Reparation Commission agree to take
similar action; and authorizing the. Secretary of the Treasury,, with the
•approval of the President, to conclude an agreement for the settlement
of the indebtedness of Austria to the United States upon terms and
conditions ho less favorable than the terms and conditions granted by
Austria to any of tne other relief creditor governments.
Paithfully yours,
(Signed)
A. W. MELL01T
Secretary of the Treasury.
The President,
The White House.
l’or release, morning papers,
Tuesday, March 27, 1928,
Treasury Department
Speech of
Hon. Ogden I. Mills,
Undersecretary of the Treasury,
at the
Fiftieth
Annual Dinner of the Yale Daily Hews,
Hew Haven, Connecticut,
March 26, 1928.
THE PRESS A33D PUBLIC OFIHIOH.
I feel greatly honored that you have invited me, a Harvard man,
to be here this evening and to join with you in celebrating the
fiftieth anniversary of the founding of the Yale Daily Hews.
When the first number of the Hews appeared half a centum ago,
newspapers were entering upon a stage in their development which was
to affect profoundly not only the character of the papers themselves
but also their relation to public opinion. The day of the one-man
newspaper, dominated by a brilliant and forceful editor, was rapidly
passing.
There had been a time when the opinions of a paper, such as
the Hew York Tribune, were widely accepted largely because they were
written by Horace Greeley; and it has been said by a recent writer
that, even after Greeley's death, the upstate farmer kept up his sub
scription because he believed that in some supernatural way the great
editor still directed the paper's policy.
with the growth of the country, and especially with the increase in
wealth and population in the great cities, changes and readjustments in
the field of journalism were inevitable.
Modern inventions had already
revolutionized the printing and distribution of newspapers. Better transV
portation facilities had made it possible for a paper to serve a wider
territory; and telegraphic and cable service made available news from
all parts of the world.
But the newspapers were finding that all of these new developments
cost money.
It was necessary to have larger outlays of capital to secure
the services of the great news-gathering associations and to bay
the
mechanical equipment and to pay the wages of the large staff required for
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2
-
writing, editing, printing and distributing the modern city newspaper.
In other words, newspapers became great corporate business enterprises.
A period of financial .readjustment followed; and with these financial
readjustments came also many changes in journalistic methods and in the
services rendered by newspapers to their readers.
They became, as someone has said, a sort of intellectual department
store; or, to put it more accurately, the press evolved into a great educa
tional institution.
From the earliest times, when the first "tabloid”
newspapers were published in Rome under the direction of Julius Caesar,
business and politics have always been the most important topics of general
news value.
But today the press gives information on an infinite variety
of topics and embraces every subject of human interest.
The public now can be fully and accurately informed of events through
out the world almost as soon as they have taken place.
77e read tonight
in New Haven what happened this afternoon in London or Fekin. All the
questions of the day are covered in great detail in the daily press. The
actions of governments are reviewed; the speeches of public officials are
reported, so that the average man at his breakfast table can learn what
those in charge of his government are doing and what reasons actuate the
line of action which his government may take— that is, if the speeches
contain the information, which is not by any means uniformly true. It is
a healthy development that the government today must justify itself
in the eyes of its own people, and that, even in this country where
there is a fixed tenure of office, a government must have the support of
public opinion in undertaking any major policy.
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All this means that we have today a public opinion of a sort which
can hardly he said to have existed at all a hundred years ago.
I do not
mean to say that even now we have a coherent body of public opinion, in
formed and interested in all questions of public concern.
To most of the
questions on which the Government has to act, the average reader is more
or less indifferent— and indeed he can hardly be expected to be other
wise, for under the pressure of modern life he has little time to devote
to serious matters outside of the conduct of his own business.
As a re
sult, he only too frequently confuses noise and display with action and
constructive effort.
There is no escaping the conclusion that, while a free and highly
organized press has given us the means to an enlightened and informed
public opinion, it has ,not given us an aroused or even an interested one.
The newspapers themselves .are quite aware of this and almost every paper
is on the alert to devise hew methods whereby the public cam be interested,
at least to the extent of buying that particular newspaper.
Here we find
one explanation of that sensationalism in Journalism which all of us and
many newspapers themselves so greatly deplore; and yet, it is the logical
outgrowth of modern newspaper tendencies.
The art of news gathering and especially the use of great syndicated
services make it possible for both large and small papers to print all the
facts of news interest.
But if all the facts are available to everyone
and all newspapers publish them and nothing more, then what has one paper
to offer in preference to another?
The consequence is that the less
scrupulous papers are tempted to print something more or something less
than the actual facts warrant, and to accentuate the minor dramas of in
dividual lives rather than those more prosaic questions and events which
are of vital importance to the many.
In their search for the sensational,
they lower the standard not only for themselves "but for other papers which
must compote with them.
In the matter of reporting crimes and sensational trials, many papers
go to groat lengths.
Just how far they should go is a mooted question, for
there are two schools of thought as to whether publicity is a promoter or
a deterrent of crime.
ITo less an authority than Doctor Charles ¥. Eliot
of Harvard "believed that publicity is an agency for promoting the public
we Ifare. He said:
"The newspapers, which arc the ordinary instruments of this
publicity, are as yet very imperfect instruments, much of their
work being done so hastily and so cheaply as to preclude accuracy;
but as a means of publicity they visibly improve from decade to
decade and, taken together with the magazines and the controversial
pamphlet, they shed more light on the social, industrial, and
political life of the people of the United States than was evershed before on the doings and ways of any people. This force is
distinctly new within the century, and it affords a new and strong
guarantee for the American Hepublic*"
There are many, however, who will not agree with Doctor Eliot.
One
well-known editor in the Middle T7est even goes so far as to say that "the
wages of sin is publicity."
But that we will .admit to be h a r d l y more than
a half-truth, when we remonberthat publicity, like rain., falls alike on the
just and the unjust.
The degree of publicity which surrounds any person or
event is rather a question of what appeals to the public interest at that
particular moment, which might be well enough if the interest were not so
frequently artifically stimulated.
The press, as Halter Lippmann says, is like "the beam of a searchlight
that moves restlessly about, bringing one episode and then another out of
darkness into vision."
He concludes that, "Man cannot do the work of the
world by this light alone"; and certainly, in most cases, a closer knowledge
_ 5 -
or examination of a nan or an event mill .give a totally different im
pression from the one that wo receive in the "brief moment when the glare
of publicity "beats upon them.
To-day a public man, to accomplish real results, must.be something
more than a great administrator or statesman.
He must have those almost
indefinable qualities that inspire confidence, beget a following, and make
him politically potent.
He must be in constant touch with the people, and
in national affairs that contact can only be maintained through the press.
A good or a bad press can make or break him.
He needs a mighty personality
indeed to overcome the latter and get through to the people.
I have been
discussing legitimate publicity, but publicity of any kind is deemed indis
pensable by the politicians of the day, in spite of the to them inexplicable
fact that many a time the most modest «and the quietest of men seem to go
farthest.
This craving for publicity accounts for much of what is said and
done in public life, as well as for those comparatively new figures, the
publicity agents and even photographers, attached to the staffs of minor but
ambitious statesmen.
Certain public men have a genius for publicity, or per
haps it would be better to say that they have a personality which gives every
thing they do or say a news value.
President Roosevelt liad this quality,
The prince of -Tales has it, and so has Colonel Lindbergh.
In the case of the
~ 5 Plying Colonel, he tries hard enough to avoid publicity; and yet that fact
itself and everything else that he does or says is of interest to the reading
public.
In his case, however, let us he thankful that it is so, for the in
fluence of such a character and such achievement is a potent force for good
and has already had a profound effect in calling to the surface the best in
people everywhere throughout the world.
And so v/c find that publicity has both its good and evil side.
Quite
apart from that, it has come to stay, whether we like it or not, so it only
remains for us to make sure that it shall be used as a force, not acknowledged
as a master.
The newspaper has been frequently called a mirror not only of events
but of its readers.
Whitelaw Beid, as editor of the Hew York Tribune,, once
said;
"The thing always forgotten by. the closest critic of the newspapers
is that they must be immeasurably what their audiences make them; what
their constituencies call for and sustain.
The newspaper cannot uniformly
resist the popular sentiment any more than the stream can flow above its
fountain.
To say that the newspapers are getting worse is to say that the
people are getting worse.
They may work more evil now than they have ever
wrought before, because the influence is more widespread; but they also work
more good, and the habitual, attitude of the newspaper is one of effort toward
the best its audiences will tolerate.11
It is true that the press is a business and it must not be forgotten that
it is a private business which must be conducted at a profit.
But it is also
something more than just that; it is an instrument of public service, necessary
to the life of the nation, with corresponding responsibility because it has the
power either to raise or to lower the tone of our national life.
America be today without the cement of public opinion?
What would
For one thing she
would have developed, as other continents have developed before, into a mass
of isolated coniminities,e&3i£m^&foriae& and prejudiced and antagonistic one
to the other,
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The majority of us are for the most part inarticulate.
And so a newspaper
must express for the average man the thoughts which he is unable to express for
himself.
When it does that, accurately and forcefully, it fills a very real
need and achieves enormous influence among its readers.
That newspaper has
the greatest, weight which best interprets public opinion and, by getting not
too far out of step, is able to guide and direct it along sound lines.
We
are constantly hearing the question debated as to whether the power of the
press is greater today than in former times..
It is not a question, I think,-
of greater power but of a different kind of power that it exercises at the
present time.
Hews today is far more comprehensive than it ever was before.
It is better written and more people get their ideas from the papers for they
cater not only to the reader of news and events, as formerly, but also to
those interested in an infinite variety of subjects and especially to women
readers..
The conclusion may be fairly reached, I think, that while the
power of the press today may be more diffused, it is certainly as great as ever
and, on the whole, as wholesome as might reasonably be expected.
We must remember that, important as is the newspaper as an instrument of
public opinion, its primary function is to supply news.
What the average man
wants is an accurate and reliable presentation of facts on which he can base
his own conclusions.
He feels, as -did the Scotsman, who said;
news, not your opinions”.
"Give us your
The modern newspaper goes to enormous trouble and
expense in securing timely information for its readers on any topic of the
moment.
It will obtain interviews or articles by men who can speak author
itatively on the subject or are prominently identified with the movement under
discussion; and the public will read with eagerness anything written by such a
man.
If the topic of the moment is the breaking of a great dam, the
newspaper will call on an eminent engineer to furnish a special article
dealing with causes and prevention of such catastrophes4
, or if it is a
shipwreck, a naval constrictor or a well, known naval officer may be called
on*There was a time when the editor looked up his facts in the
encyclopaedia and after infinite pains produced a leader article containing
fairly accurate information on the subject. But today the public wants the
word of someone who can speak with authority, and will accept the views
only of a man who is well known in the particular field under discussion.
It may be partly a question of thè reader's time. The average man has
little time in which to inform himself; and he wants to be sure that, in
spending a few minutes reading a technical discussion in his newspaper,
he is being correctly informed by a man who can be quoted as an authority.
Newspapers today are willing to pay well for such articles and can
secure them from the most eminent men.
Whereas it was once considered
beneath the dignity of famous men to write for the newspapers, particularly
if any question of remuneration were involved, now the most distinguished
figures in the scientific, educational, religious, business or governmental
Worlds are glad té give the public the benefit of their knowledge, provided
that a real reason exists for such an article and the eminent man is not
made to feel that he is lending himself to self-advertisement.
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0
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As a result of all these innovations, the average newspaper reader is
far better informed than even the most intelligent and highly placed in
dividuals were a hundred or two hundred years ago.
Then the average man had,
aoout as clear an idea of public issues as had a colored soldier at one of the
Southern training camps during the last war.
This particular soldier had been
to a camp lecture on the cause of the war and, on returning to his quarters,
his tent mate, another colored boy, also from the cornfields and totally un
acquainted with newspapers, asked him what the lecture was about.
^Thereupon
tne enlightened one replied: n0h! it was about the war and some people named
Germans and how us Angry-Saxons has got to fight to make the world safe for the
Democrats
There is no question as to the difficulty of arousing an intelligent pub
lic opinion.
For this reason it seems to me all the more remarkable that during
tne last war we had in this country such unanimity of opinion and such unity of
action in supporting a war which was being fought more than three thousand miles
from our nearest shores and over six thousand miles from our farthest one.
In
many of the rural districts thoughout the country the great metropolitan news
papers hardly ever penetrated.
Local and county
newspapers, published sometimes
once or twice a week and containing mostly news of interest in the locality,
were the only means of furnishing information of the great events happening
in Surope.
It was not strange, therefore, that the war spirit was slow to
arouse and did not manifest itself generally until this country itself became
involved and the question of patriotism entered into the situation.
Then we
had the spectacle of an aroused public 'opinion, which supported the-wax-.magnif
icently and did more than anything else to make our partic 1;>ation effective.
It is at times like that that one*s faith is renewed and we can again
believe passionately in our o?/n institutions and the reality of a public
opinion that sustains them*
In times like the present, when the unity of
purpose which animated the nation in time of war seems to be dissipated in
the conflicting interests of the peace, it is well to remember that ouu
country can txiihk and act as a unit, and that, in helping her to see the issues
involved and to formulate a sound public opinion, we have a press which, as a
whole, can be counted on to realize and measure up to its responsibilities*
It is very different in some other countries, as you know*
I fear we do not
altogether appreciate our own good fortune in this respect; but at any rate,
I, for one, am glad of this opportunity to acknowledge the great service which
the American press is rendering in giving the people an accurate and honest
presentation of the facts on which public opinion can be based.
for release, morning papers,
treasury department
FRIDAY, MARCH 30, 1928.
SPEECH TO BE DELIVERED BY THE
• UNDERSECRETARY OF THE TREASURY,
Honorable OGDEN L. MILLS,
BEFORE THE
CHICAGO AND COOK COUNTY BANKERS' ASSOCIATION
CHICAGO, MARCH 29, 1928.
Notej
For full text of speech see Subject File: Taxation
1
I
li
/ot
Ä I Si H fil I I ilil
FOR RELEASE UPON APPEARANCE OF
THE SECRETARY BEFORE THE SENATE
FINANCE COMMITTEE, WHICH WILL
BE ABOUT 10:00 A.M..TUESDAY
APRIL 3, 1928.
treasury department
STATEMENT BY THE SECRETARY OF
THE TREASURY MELLON, BEFORE THE
SENATE FINANCE COMMITTEE,TUESDAY
APRIL 3, 1928.
Note:
For full text of statement see Subject File:
Revenue
TREASURY DEPARTMENT
FOR IMMEDIATE' RELEASE
TUESDAY, APRIL 10, 1928.
Statement "by Acting Secretary of the Treasury Mills
"before the Nays and. Means Committee in connection with
H.. J., Resolution 247 concerning Austria’s debt to the
United States.
During 1919 and 1920 conditions in Austria were so serious that
a large portion of the population was threatened with starvation.
The
United States and a number of European governments as a humanitarian
measure furnished the necessary foodstuffs and other relief supplies,
and since the economic condition of Austria, was such as to preclude
tne possibility of payment in cash, these supplies were furnished on
credit.
This was done in accordance with an Act of C.ingress approved
March 30, 1920, which authorized the United States Grain Corporation,
with the approval of the Secretary of the Treasury^. to furnish flour
on credit ”to relieve populations in the countries of Europe or
countries contiguous thereto suffering for want of food”.
The Govern
ment of the United States received and now holds an Austrian bond in
tne principal sum of $24,055,708.92, given in payment of the supplies
above mentioned,
The other governments concerned, namely, Denmark,
France, Great Britain, Italy, The Netherlands, Norway, Sweden, and
<{>
Switzerland, hold relief bonds of similar character in the sum of about
95,000,000.
The relief bonds of 1920 enjoyed
11a
first charge upon all
of the assets and revenues of Austria11. They rank ahead of Austria1s
The "bond held by the United States by its terms matured January 1,
1925«
In 1922, however, Austria was threatened with a complete economic
collapse.
Financial assistance was necessary to permit the stabilization
of the currency, the balancing of the budget, and the resumption of the
economic life of the country.
Ho exterior loan, however, could be floated
as long as Relief loans and Reparations constituted prior charges on
Austria* s assets and revenues.
Accordingly the Relief creditors, including
the United States, and the Reparation Commission, agreed to subordinate
their liens to permit the flotation of a reconstruction loan.
Under the
terms of the so-called Lodge Resolution of April 6, 1922, the Secretary of
date
the Treasury extended the maturity/of the relief bond held by the United
States Government until June 1, 1943, and at the same time agreed to sub
ordinate the lien enjoyed by the United States for the purpose of permitting
the reconstruction loan of 1923.
The Lodge Resolution reads as follows:
’’Whereas the economic structure of Austria is approaching
collapse and great numbers of the people of Austria are, in
consequence, in imminent danger of starvation and threatened
by diseases growing out of extreme privation and starvation*
and
*
’’Whereas this Government wishes to cooperate in relieving
Austria from the immediate burden created by her outstanding
debts; Therefore be it
’’Resolved by the Senate and .House of Representatives of
the United States of America in Congress assembled. That the
Secretary of the Treasury is hereby authorized to extend, for
a period not to exceed twenty-five years, the time of payment
of the principal and interest of the debt incurred by Austria
for the purchase of flour from the United States Grain Corpora
tion, and to release Austrian assets pledged for the payment
of such loan, in whole or in part, as may in the judgment of
the Secretary of the Treasury be necessary for the accomplish
ment of the purposes of this resolution: Provided, however.
That substantially all the other creditor nations, to wit,
Czechoslovakia, Denmark, France, Great Britain, Greece, Holland,
Italy, Horway, Rumania, Sweden, Switzerland, and Yugoslavia,
shall take action with regard to their respective claims against
Austria similar to that herein set forth. The Secretary of the
Treasury snail be authorized to decide when this proviso has
been substamtially complied with.”
/* 1
- 3 In 1923 | reconstruction
loan amounting to about $125,000,000
’.
ra,s floated by Austria in the United States and European countries.
The loan was a 7¡o loan, maturing in twenty years.
It was guaranteed,
principal and interest, by several European governments, as follows:
Or eat Britainto the extent of
France,
Czechoslovakia,
Italy,
Belgium,
Sweden,
Denmark,
Holland,
■
24*$,
24J4,
24^
2oJf$
2'fo
2 d0
1
i $
The loan saved Austria from economic and social disintegration and
collapse.
The program of reconstruction led to the stabilization of
Austria's currency during 1923 and the balancing of the Austrian
budget by 1924.
It has been balanced ever since.
About $75,000,000
Ox tne $12 o,000,000 was applied for urgent purposes such as stabiliza
tion and budgetary needs.
Approximately $50,000,000 has been expended
for capital purposes of a productive character.
Austria's economic
reconstruction, however, has not been completed and the capital
resources of the country are not adequate to the task.
The Austrian
Government now desires to float a new loan in the amount of 725 million
Austrian schillings, or about $100 ,000,000, for the continuation of the
program of reconstruction.
It is our understanding that the proceeds
of tne loan will be devoted to the following purposes:
$41»000,000 for telegraph and telephone systems,
$62,000,000 for realways.
The telephone and telegraph expenditures are to be largely applied
to the construction of long-distance cables and installations connected
10 ê~
WmÈ ¡1 HMjjjj
!
;i
- 4 -
therewith,
The construction program is intended to extend over a
period of five years and it is planned W'put the Austrian telephone
and telegraph systems in a position to handle through.-'business which
it is believed 'will be of a profitable character#Railway expenditures are subdivided as follows;'
$7,000,000 for electrification,
$19,000,000 for heavier rails, bridges, and general
reconstruction,
$23,000,000 for rolling stock,
$10 ,000,00.0 for automatic brakes.
As in the case of the telegraphs and telephones,' these expenditures
are to extend ever a five-year period.
The necessity of repairing and
modernizing
all of Austrians communcation systems during the next
five years is stated to be so outstanding that it overshadows all other
considerations.
One of the most important of the very few assets left
to Austria by the Peace Treaty is undoubtedly its geographical and con
sequently its commercial position,
Austria is conpelled to make the
utmost use thereof if it intends to assure its future,
Austrians rail
ways, roads., and other means of communication must be brought up to date..
Backwardness in this respect, it is argued., would mean a gradual elimi
nation of Austria from the main system of European traffic*-
In this con
nection, it is obviously to the interests of the United States as one of
Austrians creditors that the necessary capital should be made available’
to Austria for productive purposes of this character.
The strengthening
of Austria*s economic organization must of necessity increase her ability
to meet her obligations,
Austria, however,.,As-not in a position' to float the proposed loan
¿"
- 5 -
as long as the Relief bonds and reparation obligations have a prior
lien over Austria*s assets.
Accordingly the Austrian Government has
requested the governments holding Austrian Relief bonds and the
Reparation Commission to subordinate their liens in favor of the new
loan for a period not exceeding thirty years.
Wo understand that all of the other Relief creditors have agreed
to subordinate their liens, providing all of the governments in a
similar position and the Reparation Comission do likewise.
It is
further understood that the Reparation Commission has agreed to sub
ordinate the Reparation lien on Austrians assets and revenues in favor
of the now loan.
The Austrian Government has requested the Government
of the United Sta/tes to take similar action, and one of the provisions
of the bill now before you will give to the Secretary of the Treasury
the authority to do so.
consent is required.
Let me malee this entirely clear*
Unanimous
If the United States refuses to join the other
governments concerned in granting Austrians request, it will be impossible
for Austria to float the new reconstruction loan and the United States
Government will have to assume full responsibility for the failure*
But the Austrian Government has not simply come forward with a
request that the lien which we hold on Austrian assets be subordinated
to the new loan.
Austria has at the same time made an offer to settle
the outstanding Relief obligations.
The proposed terms of settlement
have been submitted not only to the United States Government but to all
of the Relief creditors.
It is understood that they have received favor
able consideration; in fact, the majority of the Relief creditors have
already stated that they are acceptable.
Ihe Treasury Department would have preferred to follow in this instance
the course pursued in the case of other debt settlements and to have sub
mitted to the Congress a definite debt settlement agreement either for
ratification or for the purpose of obtaining the necessary authority to
make such an agreement.
We are, however, not in a position to do this while
negotiations are still proceeding with some of the other creditor govern
ments.
There are nine Relief creditors, which means that Austria must
deal with nine separate governments.
It is obvious that the same terms
of settlement must be granted to all of the Relief creditors and no one
Relief creditor can be favored at the expense of the others.
This, in turn,
implies that there must be agreement on the part of nine governments, and
while progress is being made as rapidly as could be expected, complete
agreement among all concerned may take a little time.
In the meanwhile, the Congress may have adjourned and unless the au
thority is granted the Secretary of the Treasury to effect a settlement
on behalf of the United States, the whole question will have to go over
for another year.
In the meanwhile Austria will find herself unable to
float the contemplated loan and to obtain funds urgently needed for the
capital expenditures above described.
The bill now before you provides that:
’’The Secretary of the Treasury, with the approval of
the President,is hereby authorized to conclude an agreement
for the settlement of the indebtedness of Austria to the
United States, but the terms and conditions of such settle
ment shall not be less favorable than the terms and condi
tions granted by Austria to any of the other Relief creditor
governments,M
With this limitation, the Congress should be willing to grant this au
thority to the Secretary of the Treasury, even if it is not possible at
this time to submit in detail the terms of the proposed settlement.
The
¿
- 7 r
position of the United States oust bo largely governed "by the attitude of
our fellow creditors.
It is quite proper to insist that the United States
shall in no event receive less favorable terns of settlement than any other
creditor, hut it is fair to assume that the people of the United States will
not insist on more exacting terns of settlement than those demanded by
Austria*s European creditors, many of whom are debtors to the United States,
In this connection it should be noted that the United States Government
only holds 2G)0 of the Role if bonds whereas the European creditors hold 80^,
In considering this whole proposition, it should not bo forgotten that
the loan originated largely from humanitarian and charitable motives.
We
furnished the food supplies on credit in order to save millions from star
vation.
The economic condition of Austria was such at the time that it
could not reasonably have been anticipated that the amount of the credit
would ever be .recovered in full.
In this respect, this loan is on a differ
ent basis from war and post-war loans made to countries whose economic
position was in no wise comparable to that of Austria,
Wo. arc now in a position to clean up this whole matter upon reasonable
terms and at the same time to put Austria in a position whore she can float
a new loan for the purpose of completing the reconstruction program which
has to date yielded such satisfactory results.
The Treasury Department is
strongly of the opinion that the United States Government should join the
other Relief creditors in effecting a prompt settlement and should not under
any circumstances take a position that would obstruct proper and well-con
sidered measures for furthering Austria*s reconstruction.
TREASURY DEPARTMENT
FOR RELEASE, MORNING PAPERS,
Friday, April 1 3 , 1928.
SPEECH TO BE DELIVERED BY
DEPUTY COMPTROLLER OF THE CURRENCY,
F.G. AWALT,
BEFORE THE
DETROIT CHAPTER OF THE AMERICAN INSTITUTE OF BANKING,
DETROIT, APRIL 12, 192S.
Note:
For full text of speech see Subject File:
Taxation
TREASURY DEPARTMENT
EOR RELEASE* MORNING PAPERS
Monday*.May 7 , 1928*
STATEMENT BY SECRETARY MELLON 4
Secretary Mellon has just made public the findings of the
Board appointed by him to inquire into all of the facts and circum
stances surrounding the loss of the U.S.S# S5~.4, which occurred off
Province town, Massachusetts, on December 17, 1927*
That Board was ap
pointed by him for the purpose of determining what responsibility for
the collision, if any, rests upon the Commanding Officer of the Coast
Guard Destroyer PAULDING or upon any officer or man on board that ves
sel*.
The Board of Inquiry consisted of Captain Aaron L. (ramble*
TJ* S.. Coast Guard* as President; and of Captain William J.. Wheeler,
IT«. S'* Coast Guard, Engineer in Chief Robert B. Adams, UV S'* Coast
Guard* and Commander (engineering) Charles S. Root, U- S- Coast Guard*
as members;, also of Commander Russel R. Waesche, U* S. Coast Guecrd* .as
member and recorder*.
The findings and recommendations of the Board have been a p
proved by Rear Admiral F. C- Billard,. U. S . Coast Guard Commandant,,
and by Secretary Mellon*
It will be recalled that Secretary of the Navy Wilbur,, in
announcing the findings of the Navy Department r stated that the matter
of the responsibility of the PAULDING for the collision was being re**
ferred to the. Treasury Department for attention*
The conplete findings of the Board, are set forth below*:
FINDING OF FACTS III REGARD TO THE COLLISION
BETWEEN THE PAULDING AND THE U. S. S. 4.
The Board finds that:
1. The S-4 left Provincetown Harbor at about 12:30 p, m.,
on 17 December, 1927, to commence her submerged standardization
trials in obedience to lawful orders of the Navy Department.
2. The submarine course used by the S-4 was the inner trial
course on the approach to Provincetown Harbor,marked by white buoys
designated as CAA CB3 SCC. Neither Coast and Geodetic Survey Charts
1208 nor 341 (Provincetown Harbor) carries any notation indicating
that the course used by the S-4 is an official submarine trial course
maintained by the Navy. The Buoy List published by the Lighthouse
Service, referring to four white trial course buoys on the outer
3ne u'sed
the S-4), carries the following remarks:
U.S. Navy trial course. In fairway from Race Point to Provincetown
Haroor; masters of vessels must keep clear of them.»» The same Buoy
List, rexe ring to three white submarine trial course buoys along the
■ b ^ q f “n£2t ^
^
’ contains the remark:'»Maintained
vCrH-n-,. Ii
.7 *
It doss not contain any injunction relative to
iceppijix, clear oi tnese buoys.
of I n n A f A w 0? - fr°m ,
thS testimony ta&en before the Naval Court'
i
, *nis trial course was established by the ilavy in 1909
or ar a v e ^ f rdiZati°^
agears f ^ the
o g ^ ^ r s Z e S e d ^
f°r 49
thS P™
been L i d there,
& “
—
*•“
• submarine
unde A " h i r A tA 1t e d S ta*es Coast Pilot, Atlantic Coast, Section A,
X r toDN A 0tl0n? * i P°VlnCet0Wn
" 0OT-tains no reference whitinto P r b f i n c N o ^ v ?
tPlal Courses* » Erects the mariner bound
wood *nd k f T
?
t0 f°llow tlle trend of the A o r e between
The A A i ”d LonS Poy t lignthouses, giving it a berth of 3/8 mile.
of
?
G tnat was used by the S-4 runs oarallol to the stretch
the beach riercfL°f ??d and.LonS Poijlt and about half a mile from
contained'^
o ’* S e1mari,
ner wh° oarries out the instructions
uroceed in clo’
ee C°aSt U 1“* ”nlle enterinS Provincetown Harbor would
or comoftoow?ed-e f w ty.i° ihiS sald trial °ourse* It is a matter
armind s,
„ ' f
*hat all shipping coming into Provincetown from
around *acc Point, or bound out of Provincetown around Race Point, will
pass closely adjacent to this trial course, there "being no
inhibitions, whatever, against such action, but, on the con
trary, such action being suggested by the Coast Pilot.
5* According to the testimony of the officer in charge
of the Wood End Coast Guard Station who quoted from official
records, there came in and out of Provincetown Harbor in the
years 1925» 1926, and 1927 , approximately 33» 000 boats of
more than J*ive tons, and approximately as many boats of less
than five tons; that schooners, destroyers, ships, barges,
and, last summer, the battleship TEXAS, anchored there, and
quite often large freight steamers came in and anchored
from stress of weather.
Oi Since 1907 the monthly pilot charts published by
the Hydrographic Office of the Navy have borne a United
States submarine warning flag with the following legend;
"The submarine distinguishing and warning flag is hoisted
on the tender or parent ship of the United Spates submarine
to indicate that submarines are operating in that vicinity.
It consists of a rectangular red flag with white center* on
which is the profile of a torpedo in black. Launches ac
companying submarines also fly this flag. Vessels seeing
this signal should give the escorting vessel a wide berth
and keep a good lookout for submarines.
7» The Navy Signal Manual, 1920, Navy Department, C.S.P.
293» page 125, Section 66l, has the following:
f,The submarine
warning flag is hoisted on the tender or parent ships of sub
marines or on launches accompanying them to indicate that
submarines are operating submerged in that vicinity.1’
S» No submarine warning flag was displayed anywhere in
the vicinity of the trial, course during the trials of the S-*+.
9* The Navy tug WANDANK was at Province town during the
trials of the S-H, under the orders of the representativev. of
the Board of Inspection and Survey, and was available to
display the submarine warning flag.
10. According, to testimony given before the Naval Court
of Inquiry, owing to modern developments and improvements in
submarine constructions, particularly since thw World War, enabling
these vessels to look out for themselves, the use of special warn
ings regarding the proximity of submarines has not in recent years beaa
considered necessary or desirable by officers of submarine
experience. However, the fact that the submarine warnings were
no longer regarded as necessary by the Navy was not published,
not was the fact that practice had been discontinued communicated
to the Coast Guard.
11. On the day of the collision, the PAULDING- in the
usual course of her duties of inspecting a large area, including
Provincetown Harbor, for violation of Customs and other laws,
rounded Cape Cod shortly after 3;00 o ’clock in the afternoon. A
strong wind was blowing with heavy swell and white-capped waves*
the sky oeing overcast. The destroyer followed»'' the course
prescribed by the published manuals for approaching Provincetown
Harbor, using the fairway indicated and in regular.use by all
vessels bound for Provincetown.
,12. On the oridge of the PAULDING were the commissioned
officer of the deck, the junior officer of the deck ( the latter
a chief quartermaster of ten years’ experience mostly on Navy
destroyers), the quartermaster, and the man at the wheel. Moreover,
the commanding officer was. on the bridge at the time of the
collision, although he had stepped into the chart enclosure for
an instant to consult the chart a few seconds before the presence
of the submarine periscopes was observed» The officer of the deck,
junior officer of the deck, and quartermaster were actively and
vigilllntly maintaining a lookout in the direction in which they
were proceeding. The lookout maintained was a proper and sufficient
lookout under the circumstances.
lo. The PAULDING followed a course parallel to the outer
trial course buoys at a distance of two to three hundred yards.
She passed the buoy CD on the port beam, at a distance of 500 yards,
and changed course to 94° true at 3:33 p.m.
14. While on course 94° true, between buoy CD and CAA
and to southward of them, making speed 18 knots, at about
3:37 p.m., the PAULDING sighted two periscopes of a submarine one
point on her port bow distant about 75 yards from the bow of the
PAULDING.
15. The periscopes were moving towards and a„cross the
PAULDING'S ISr&w and rising.
-p. 16* . I™&©31ately 'before sighting the periscopes, the
officer of the deck had given orders to the helmsman to
cnange course five degrees to the left, but before the destroyer had started to swing to the left the order was given
"right full".
Jll*
As a r©sult of commands given on the bridge, the
fAULLING was given “full right rudder" and backed at full
speed.
«
A t .3:37» when the- superstructure was showing about
one third of its height above the water, the S-4 was struck
just forward of the 4-inch gun on the starboard side by the
U. S. Coast Guard Destroyer PAULDING and sank with all hands
on board, going down by the bow.
19.
The PAULDING at once lowered a boat to search for and
rescue possible survivors, dropped a buoy to mark the spot of
sinking, and took cross bearings.
„„
f*20’ , At, tJlis time the visibility was excellent for surface
9 f iresh breeze was blowing, the sea choppy and con
siderable white-caps.
21.
The PAULDING was damaged to the extent of $19,765*00,
u a e to proceed unassisted to an anchorage in Provincetov/n
Harbor and later went to the Boston Navy Yard for repairs.
„
x T^e testimony indicates that the S-4 was completing
certain standardization runs between buoys on the trial
course and was accustomed to swing out into fairway at the
end of each run before circling on the return run. The runs
were being made at prescribed depth, which means that the
periscopes, painted in war colors and designed to make them
nvisi e, were from two to four feet above water in a choppy
ea. At each periscope there was supposed to be an observer
on watch, one of them especially charged with the duty of
scanning the horizon for approaching vessels.
Under the con
ditions named the destroyer would be visible to this officer
at a distance of about 5000 yards.
, f3*
?xperts 11376 testified that it is the duty of a subrunning at Perlsoope depth to keep clear of surface
™! ‘
f -4 had the
on her starboard bow at all
imes prior to the collision, and in this situation was also
required by the International Rules for the Prevention of
Collisions at Sea to keep clear of the PAULDING.
m
24. The collision occurred approximately 400 yards southeast of the ex
tension of the line of buoys and was approximately 440 yards 174 degrees
true from buoy CAA, indicating that the PAULDING was following a course well
clear of the line of buoys and outside of the course prescribed by the
United States Coast Pilot for vessels entering Provincetown Harbor.
25. The Coast Guard District Commander and the warrant officer in charge
of the Wood End Station knew of the operations of the submarines simply by
personal observation. Neither of them, and, indeed, nobody in the Coast
Guard, was officially informed by anyone in the Navy of these submarine op
erations, or when they would begin or conclude, or at what hours of the day
they would operate, or, indeed, anything about the matter.
26. The commander of the CONYNGHAM, also commanding the Coast Guard di
vision to which the PAULDING was attached, and the commander of the PAULDING
testified that they had no knowledge that submarines were operating in the
vicinity of Provincetown during those days.
SUMMARY OF FINDINGS.
The Board, In summarizing the foregoing facts, finds that?
1. On the afternoon of December 17, 1927, the S-4 and the Coast Guard
Destroyer PAULDING were in collision while the submarine was on a submerged
run over the measured mile course off Provincetown, Mass., resulting in the
sinking of the 3-4 with loss of all on board.
2. The PAULDING was keeping a sharp and efficient lookout, as required
by law, Coast Guard Regulations, and the practice of seamenj but, owing to
shoppy sea, the extreme difficulty of picking up an object purposely de
signed and painted to avoid detection, and the fact that no notice had been
given of the operation of submarine in that vicinity, the periscopes were
not identified in time to avert the collision.
3. The doctrine of the Naval Submarine Service as testified to by Naval
expert witnesses is to the effect that the responsibility rests upon a sub
merged submarine to keep clear of all surface craft.
4.
It was the duty of the S-4, under the International Rules for
the Prevention of Collisions at Sea, to keep clear of the PAULDING*
OPINION
The Board is of the opinion that:
1. Eighteen knots in this fairway, in the open sea, and in the day
time, is not a high rate of speed for a destroyer, the testimony show
ing such speed to he normal and usual for Coast Guard destroyers on
patrol duty.
2. The officers of the submarine had every opportunity "by obser
vations to see the destroyer at a considerable distance and seek immedi
ate safety at a greater depth. A destroyer on the other hand, approach
ing a vessel admittedly designed to see and not be seen, and evidenced
only by two periscopes a little above water in a choppy sea with con
siderable white-caps, and those on the bridge of the destroyer having
no reason to anticipate the presence of a submarine, can not be held to
be negligent in failing to observe the periscopes in time to avoid
collision as they approached slowly through the water.
3. The cause of the failure of the S-4 to sight the PAULDING and
take action in time to avoid collision must remain indeterminate since
there are no survivors to testify.
It is the experienceof the members
oh the board that no mechanical appliance is infallible.
It appears to
be impossible to determine whether or not there was a failure on the
part of the mechanical appliances of the S-4 prior to the collision.
4. The action of the PAULDING in swinging right full rudder and back
ing her engines was the correct one as giving the greatest promise of
passing clear.
5. When the S-4 was sighted by the PAULDING upon its emergence 75
yards on the destroyer’s port bow, collision was inevitable notwith
standing the immediate and correct maneuvers undertaken in accordance with
the orders of the officer of the deck.
6. The failure to recognize the periscopes at a greater distance
than 75 yards did not indicate an inefficient lookout since the diffi
culty of picking up and distinguishing small objects was greatly en
hanced by the choppy sea and strong wind that covered the surface with
whitecaps.
7» Had a submarine warning flag been displayed as shown on the
Hydrographic Office Pilot Charts and in the Navy Signal Manual, or had
the commanding officer of the PAULDING- knowledge of the operations of
submarines in this vicinity at that time, no collision would have occurred.
8. The conduct of Lieutenent Commander Baylis in a most trying
situation, attending and following the collision, not knowing whether
his own vessel was in a sinking condition, was highly commendable in
that he neglected no precautions for rescuing possible survivors of
the S-M-.
vi)
PAULDING was maintaining a proper lookout. The PAULDING
was navigating in the open sea, in the daytime, in a fairway, with good
visibility. The chief petty officer (junior officer of the deck) and
the quartermaster were on the bridge^ and were regularly assigned to
act as general lookouts, and they were actively and vigilantly maintaining
a lookout in the direction in which the ves*sel was proceeding.
The
officer of the deck was also vigilantly maintaining a lookout.
(2 ) Furthermore, the position of the lookouts, though not on
the forward deck, was a proper one for the observation of all vessels
which might pass and of all obstructions to navigation; the bridge of
the PAULDING being located well forward.
On this clear, cold December
day, with a strong breeze blowing and a choppy sea, with spray coming
over the bow occasionally, the bridge was the most favorable position
on the destroyer for a lookout to effectually perform his duty.
(3) The bridge of the PAULDING afforded the lookouts a clear
and unobstimcted view of the direction in which the vessel was proceeding.
10. The submarine is a distinctly unusual typeof vessel, and if
the person in charge of a surface vessel cruising on the open sea in the
daytime in clear weather, with the sea choppy, were held to have incurred
serious blame if he fails to sight the periscope of
a submarine operating
at periscope depth, he not kppwing of the presence of the submarine in
the vicinity, and there being no warnings displayed of any kind, and
collides with such submarine as she suddenly 'emerges under the bows of
his vessel, then, indeed, are the masters of all surface craft subject
to unreasonable concern, responsibility, strain and danger, to which, in
the interests of commerce and safety to life, they should not be subjected.
11. Under the International Pules for the Prevention of Collisions
at sea, vessels - when they can not be readily seen, such as at night,
in a fog, or in thick weather - are required to make their presence known
in a clear and unmistakable manner, that is, by lights, horns, bells, etc.
Since a submarine has been so designed as ”to see and not be seen” when
operating submerged, this Board is of the opinion that it would be in
accordance with the principle upon which the International Rules in this
respect are based to require a submarine operating submerged to make its
presence known in some clear and unmistakable manner, or to assume the
risk in the event a collision results from its failure to do so.
RESPONSIBILITY
The Board finds that:
1,
No responsibility and no blame is to be attached to the com
manding officer, the officer of the deck, or any other person on board
the PAULDING.
RECOMMENDATION
1*
It is recommended that no further action be taken and that
Lieutenant Commander J. S. Baylis, U. S. Coast Gnard, be advised by
appropriate offical communication that neither he nor any person on
the PAULDING is held responsible for the collision between the PAULDING
and the S-4.
__________ A« L. Gamble____________
Captain, U. S. Coast Guard.
__________ Wm, J. Wheeler______ _
Captain, U. S. Coast Guard.
__________ Robert B. Adams__________
Engine or in Cfhief, U. S. Coast Guard.
___________Chas. S. Root___________
Commander (E), U. S. Coast Guard.
__________ R. R. Waesche____________
Commander, U. S. Coast Guard.
May 1, 1928.
The proceedings, findings, opinions, conclusion as to
responsibility, and recommendation of the foregoing Board of In
quiry are approved and respectfully forwarded to the Honorable
the Secretary of the Treasury,
E. C. BILLARD,
Rear Admiral, U.S.Coast Guard,
Commandant.
APPROVED: May 5, 1928.
A. I. Mellon,
Secretary of the Treasury.
TREASURY DEPARTMENT
FOR RELEASE, H O M I N G PAPERS,
Friday, May 11, 1928*
Secretary Mellon to-day announced that he has authorized the
Federal Reserve Banks to purchase, at the option of holders, up
to $50,000,000 aggregate face amount of Third Liberty Loan 4*
per cent bonds, which mature September 15, 1928, at 100-®/32 and
accrued interest to the date of such optional pruchase*
This
offer will remain open until the close of business on Friday, May
18, 1928, and without further notice will terminate on May 18,
1928, or at such earlier date as the full amount shall have been
tendered.
TREASURY DEPARTMENT
FOR IMMEDIATE RELEASE,
Wednesday, May 16, 1928
Secretary Mellon announced that the privilege of tendering Third
Liberty Loan 4J- per cent bonds for sale to the United States, under
authorizations as publicly announced on M&y 1.1th, expired yesterday,
May 15th, and no further tenders will be accepted.
Under the terms of the Departments announcement of May 11th,
the Federal Reserve Banks were authorized to purchase, at the option of
holders, up to $50,000,000 aggregate face amount of Third
s, which
mature September 15, 1928, at 100-8/32 and accrued interest to the date
of such optional purchase*
The announcement further provided that the
offer would be terminated without further notice on May 18, 1928, or on
such earlier date as the full amount shall have been tendered.
Since
the Federal Reserve Banks had received tenders of bonds aggregating the
required amount, the Treasury exercised its right to terminate the offer,
and accordingly no further tenders of Third 4^* s under this authorization
will be accepted.
TREASURY DEPARTMENT
EOR RELEASE, MORNING PAPERS
THURSDAY, MAT 24, 1928,
OR AFTER DELIVERY HAS BEGUN
ADDRESS OE
HON. A* W. MELLON
SECRETARY OF THE TREASURY,
AT THE UNVEILING OF THE
COAST GUARD WORLD WAR MEMORIAL,
ARLINGTON NATIONAL CEMETERY,
i
We have come today to dedicate a memorial to the men of the Coast Guard
who died in the World War*
lives for their country*
It is erected in gratitude to those who gave their
In the hour of her great need, when danger threat
ened and civilization itself seemed in the balance, these men laid down their
lives in order that you and I and future generations might find the world a
better place to live in.
Their work has been accomplished, but ours is yet to be done.
We must
be ready to live, as they were ready to die, for the things that America be
lieves in and for the principles for which she stands.
It is not an easy task.
War is a supreme effort, in which the individual
subordinates everything to the one end of winning the victory.
has come, this union of all in a common cause disappears.
But when peace
Selfishness and
controversy again arise; personal animosities, political advantage, business
competition and the struggle for existence absorb our time and divide our
allegiance*
In the general confusion, the sense of national unity disappears
and men forget the duty that they owe to each other and to the nation*
But that duty the Coast Guard never forgets.
In peace as in war, in the
language which has become traditional in the service, »the Coast Guard never
fails”*
Its business is to serve the nation and it does so in a way that gives
a heroic quality to its whole existence.
tasks*
We inpose upon it many and varied
Nearly all are difficult and some are far from pleasant.
But the
Coast Guard never refuses to undertake any. duty inposed upon it and holds
itself always in readiness to face any emergency that may arise.
It has had a long and honorable record of useful service to the country*
is the oldest of all the nation* s sea^-going forces.
It was first organized
It
MJ
j|| III -"H|
- 2 «
(j§| | 13 / | I '. ■
L |||
during the administration of President Washington when the first Congress
passed a law creating a Revenue Cutter Service.
The Continental Uavy had been
disbanded at the close of the Revolutionary War; and, in organizing the Treasury
Department, Alexander Hamilton found no sea forces available for the protection
of tho coasts or the prevention of smuggling into the country.
Until the creation of the Uavy several years later, the Revenue Cutter
Service was the nation* s only arm of defense on the sea.
The life-saving
Service was created afterwards and still later combined with the Revenue Cutter
Service to form the Coast Guard.
Coast Guard vessels have always been armed and during time of war have
operated as part of the Uavy.
They have rendered distinguished service in all
the wars in which the country has been involved and in the World War played an
important part, particularly in that vital and successful operation of trans
porting our troops abroad.
Some of the Coast Guard vessels operated as part of the patrol forces of
the Atlantic Pleet off Gibraltar, while others performed patrol and escort duty
in home waters»
One of the Coast Guard ships, the Tampa, was sunk by an enemy
submarine on September 26, 1918, in the Bristol Channel, carrying down with her
111 Coast Guard officers and men.
With one exception, this was the heaviest
single loss of life suffered by our naval forces during the war.
Besides this
heavy toll, the Coast Guard suffered other losses at various times, maTHng a
total loss during the war of 192 officers and men.
It is to the undying
memory of these men that we have met here today to erect this monument.
Such has been the splendid record of the Coast Guard in time of war.
its duties in time of peace are no less dangerous and each year are growing
But
fZ*f
- 3
more difficult of performance.
-
One of its many duties is to patrol the
coasts during stormy weather in order to rescue ships and persons in distress
at sea*
The performance of this duty is hazardous in the extreme*
It in
volves acts of heroism which are looked upon by the Coast Guard as merely
part of the day*s routine*
Last year there was not a single day when the
Service did not render some manner of assistance to vessels or persons in
distress*;
And yet these deeds, often dangerous and even heroic, are recorded
in the newspapers with perhaps two or three lines, whereas some incident of a
more sensational nature involving the Coast Guard is given prominence out of
all proportion to its real importance.
It seems superfluous to comment on the value of such a Service, not only
as regards lives saved and property rescued, but in its humanitarian aspects.
In its traditions and in its record of achievement, it is typical, I think,
of the nation which it serves.
It has shown that it will fight hard and
gloriously when an enemy threatens and will kill and destroy when necessaiy
in time of war*
But it will also fight equally as hard against the greater
odds of wind and sea in order to save life and to protect the nation against
those who defy her laws and threaten her authority in time of peace.
Of such a Service, the nation can well be proud.
In its daily life,as in
the death of its heroes, the Coast Guard exenplifies the qualities of courage,
loyalty and belief that nothing must interfere with the performance of duty.
Throughout its history, the country has shown that these qualities are basic
also in the national character; and, so long as this remains true and we have
men like those in the Coast Guard ready to prove it with their lives if neces
sary, we have no cause for worry about either the present or the future of
the country.
FOR IMMEDIATE RELEASE,
Tuesday, June 5, 1928*
TREASURY DEPARTMENT.
A Joint Resolution, approved May 4, 1928, provides for the strik
ing of a medal in commemoration of the achievements of Colonel Charles
A, Lindbergh.
The Secretary of the Treasury has today announced that sculptors
are invited to submit designs in the form of plaster models which must
be from eight to twelve inches in diameter.
The models must be in coi>-
dition to be used by the Mint in preparing the master dies.
The fin
ished medal will be approximately three inches in diameter.
The models
will be received at the Office of the Director of the Mint up to the
close of business August 31, 1928#
They should be submitted without
indent if ic at ion marks on tho model but with a transmittal letter#
The Secretary of the Treasury and the Fine Arts Commission will
pass upon the merits of the models on or before September 15, 1928#
The Act provides $1,500 for the cost of the medal.
One thousand
dollars ($1,000) will be paid to the sculptor whose design is accepted,
but the Treasury reserves the right to reject all designs.
Tho balance
of the appropriation will be used to cover the cost of the preparation
of the dies and the manufacture of the gold medal to be presented to
Colonel Lindbergh.
There will be no remuneration for the rejected models.
Designs submitted in the form of sketches or drawings will not be
considered,
for release, morning papers,
WEDNESDAY, JUNE 6, 1928.
TREASURY DEPARTMENT
STATEMENT BY SECRETARY MELLON
The Treasury is today announcing its regular June financing,
which takes the form of an offering of Treasury certificates of in
debtedness in two series, both dated and bearing interest from June
15, 1928, one series at 4 per cent, being for six months and maturing
December 15, 1928, and the other series at 3-7/8 per cent, being for
nine months and maturing March 15, 1929*
The amount of each of these
two offerings is $200,000,000, or thereabouts.
The Treasury will accept in payment for the new certificates,
at par, Treasury certificates of indebtedness of Series TJ-1928, maturing
June 15, 1928«
Subscriptions for which payment is to be tendered in
certificates of indebtedness maturing June 15, 1928, will be allotted
in full, up to the amount of the respective offerings.
A copy of the official circular is attached.
About $400,000,000 of Treasury certificates of indebtedness
become payable on June 15, 1928.
Also, about $85,000,000 in interest
payments on the public debt become payable on that date.
The Treasury e j e c t s at an early date this month to invite
tenders of Third Liberty Loan bonds for purchase by the Treasury on
account of surplus money*
/■*
-2~
TEXT OF CIRCULAR
The Secretary of the Treasury, under the authority of the act
approved September 24, 1917, as amended, offers for subscription, at
par and accrued interest, through the Federal Reserve Banks, Treasury
certificates of indebtedness, in two series, both dated and bearing
interest from June 15, 1928, the certificates of Series TD3-1928 being
payable on December 15, 1928, with interest at the rate of four per
•cent per annum, payable on a semiannual basis, and the certificates
of Series TM2-1929 being payable on March 15, 1929, with interest at
the rate of three and seven-eighths per cent per annum, payable on a
semiannual basis#
Applications will be received at the Federal Reserve Banks,
Bearer certificates will be issued in denominations of $500,
$1,000, $5,000, $10,000, and $100,000*
The certificates of Series
TD3-1928 will have one interest coupon attached, payable December 15,
1928, and the certificates of Series TM2-1929, two interest coupons
attached, payable September 15, 1928, and Iferch 15, 1929,
The certificates of said series shall be exempt, both as to
principal and interest, from all taxation now or hereafter imposed by
the United States, any State, or any of the possessions of the United
States, or by any local taxing authority, except (a) estate or inheritance
taxes, and (b) graduated additional income taxes, commonly known as
surtaxes, and excess-profits and war-profits taxes, now or hereafter
imposed by the United States, upon the income or profits of individuals,
partnerships, associations, or corporations.
The interest on an amount
of bonds and certificates authorized by said act approved September 24,
-3 1917, and amendments th e re to , the p r in c ip a l o f which does not exceed
in the aggregate $5,000, owned "by any in d iv id u a l, p a rtn e rsh ip , a s so c ia
tio n , or co rp o ratio n , s h a ll he exempt from the taxes provided fo r in
clau se (h) above.
The c e r t if i c a t e s o f these s e r ie s w il l he accepted
a t par during such time and under such ru le s and re g u la tio n s as s h a ll
he p rescrib ed or approved by the Secretary o f the Treasury, in payment
o f income and p r o f it s taxes payable a t the m aturity o f the c e r t i f i c a t e s .
The c e r t if i c a t e s of these s e r ie s w ill be accep tab le to secure deposits
o f p u b lic moneys, but w il l not bear the c ir c u la t io n p r iv ile g e .
The r ig h t is reserved to r e je c t any su b scrip tio n and to a l l o t
le s s than the amount o f c e r t if i c a t e s o f e ith e r or both s e r ie s ap p lied
i
fo r and to c lo s e the su b scrip tio n s as to e ith e r or both s e r ie s a t any
time w ithout n o tic e .
The Secretary o f the Treasury a ls o reserves the
r ig h t to make allotm en t in f u l l upon a p p lic a tio n s fo r sm aller amounts,
and to make reduced allo tm en ts up@n, or to r e j e c t , a p p lic a tio n s fo r
la rg e r amounts, and to make c l a s s i f i e d allo tm en ts and allo tm en ts upon
a graduated s c a le ; and h is a c tio n in these respects w ill be f i n a l .
A llotm ent n o tice s w ill be sent out promptly upon a llo tm e n t, and the
b a s is o f the allo tm en t w i l l be p u b lic ly announced.
Payment a t par and accrued in te r e s t fo r c e r t if i c a t e s
a llo t t e d must be made on or befo re June 15, 1928, or on l a t e r a l l o t
ment,
A fte r allo tm en t and upon payment Federal Reserve Banks may
issu e in terim re c e ip ts pending d e liv e ry o f the d e f in it iv e c e r t i f i c a t e s .
Any q u a lifie d dep ositary w i l l be perm itted to make payment by c r e d it
fo r c e r t if i c a t e s a llo t t e d to i t fo r i t s e l f and i t s customers up to
any amount fo r which i t s h a ll be q u a lifie d in excess of e x is t in g
d e p o s its, when so n o t ifie d "by the Federal Reserve Bank o f i t s d is
tr ic t, .
Treasury c e r t i f i c a t e s o f indebtedness o f S e rie s TJ-1928,
maturing June 15, .1928, w il l he accepted a t par in payment fo r any
c e r t if i c a t e s o f the s e r ie s now o ffe r e d which s h a ll he subscribed
fo r and a l l o t t e d , w ith an adjustm ent o f the in te r e s t accrued, i f
any, on the c e r t if i c a t e s o f the s e r ie s so p a id f o r .
As f i s c a l agents o f the U nited S t a te s , Federal Reserve Banks
are au th orized and requested to re ce iv e su b scrip tio n s and to make
allo tm en ts on the b a sis and up to the amounts in d ica te d by the Secre
ta ry o f the Treasury to the Federal Reserve Banks o f the re s p e c tiv e
d is t r ic t s
/So
TFture
TKEASÜBY DEPAÎMEKT
release
OBSERVE DATE
,
Speech of
Hon. A . W* Mellon
Secretary
of
the
at
P h ila d e lp h ia
June 6, 1928
Treasury
FOR RELEASE M031OTG- PAPERS
June 7, 1928# or a f t e r de
liv e r y has ‘begun.
In g iv in g n s t h is ‘b e a u tifu l f ountain, I t a ly has made one of those rare
g estu re s o f frie n d sh ip which n atio n s sometimes make towards one another.
i s a frie n d sh ip which i s recip ro cated *
It
America is hound to I t a l y not only
hy clo se t ie s of "blood and fr ie n d s h ip , hut hy a sense o f g r a titu d e fo r the
b e n e fits we have received from th a t old er c i v i l i z a t i o n o f which modern I t a ly
is the cu sto d ia n .
But I t a ly i s f a r more than the custodian of an an cient c i v i l i z a t i o n .
Notw ithstanding the f a c t that the I t a l i a n people are the rep rese n tativ es of
one of the o ld est continuous c i v i l i z a t i o n s in the world, with an unequaled
a r t i s t i c and in t e lle c t u a l h e r ita g e , I t a l y , lik e Am erica, i s e s s e n t ia lly a
young n atio n and i t s outlook is towards the fu tu re rather than the p a s t .
No where is there a c le a r e r ap p reciatio n than in I t a l y of the f a c t th a t
progress today i s con dition ed on whether or not a n a tio n can organize i t s e l f
on modern lin e s and can make the necessary adjustm ents to the- requirements
o f the new in d u s tr ia l e ra .
I t a l y has determined to make those adjustm ents;
and there are many sign s th at she i s succeeding.
Around M ilan and throughout
northern I t a l y are g reat in d u s tr ia l establishm ents which remind one of America
and in d ica te that I t a l y has alread y entered upon what might he c a lle d an
economic ren a issan ce,
I t a l y has g iv e n another p ro o f of t h is in h er recent return to the go ld
standard o f valu e in her currency..
That was an event fo r which lon g and care
f u l preparation had to he made; and i t has had fa r -r e a c h in g e f f e c t s , not alone
on the fin a n c ia l and economic development o f I t a l y hut on the s t a b iliz a t io n of
trade r e la tio n s throughout the w orld.
A l l t h is is an in d ic a tio n of the progress which I t a l y is making in so lv in g
the problems in h e rite d from the war.
In no p a rt of the world has th a t progress
been follow ed w ith g re a te r in te r e s t than in Am erica.
Here in t h is countly we
have m illio n s o f men and women, who came themselves or in the persons o f th e ir
an cesto rs from I t a l y to "become Americans*
lo y a l or in d u strio u s c itiz e n s *
nowhere can there "be found more
While re ta in in g always a deep a f fe c t io n fo r
the lan d of th e ir o r ig in , they have "become Americans in the "best sense o f the
word*
They have id e n t ifie d themselves and th e ir in te r e s ts with th e ir adopted
country and have devoted themselves to i t s upbuilding*
During the World War
they gave splendid evidence o f t h e ir p a tr io tism and d id much to make America* s
p a r tic ip a t io n in the war more e ffe c tiv e *
America f i r s t , l a s t and always*
They have shown th at they are fo r
In th e ir ca se , as in the case o f those who
have come to America from other c o u n tr ie s , there i s no question o f d ivid ed
a lle g ia n c e *
On th at score we have no cause fo r worry*
They have proved to us th a t
America can a s s im ila te many races and n a t io n a li t ie s , each with th e ir own
tr a d itio n s and customs, and th a t in t h is country they can "be fused in to a s in g l
p e o p le, who» in th e ir sense o f common d e s tin y , s a t is f y the accepted d e fin itio n
o f what c o n s titu te s a n a tio n .
As each new wave o f immigration has come to us
from I t a l y or from any other p art o f the w orld, they have become a p a rt o f us
and have absorbed our t r a d itio n s and made them t h e ir own*
The ease with which they have been a s sim ila te d can be explain ed in many
ways*
I t has been due in p a rt to the f a c t th at we are not y e t overcrowded and
th at o p p o rtu n ities here are s t i l l f a i r l y p le n t ifu l*
But i t i s due also and in
la r g e r measure to the fa c t that those coming here have found a s p i r i t o f
to leran ce which i s r e fle c t e d not only in our a ttitu d e towards them
but in our
0
in s t it u t io n s o f government*
I t i s a to le ra n ce th at allow s one*s neighbors to enjoy the same degree o f
freedom th at we demand fo r ourselves*
We must be c a r e fu l to preserve that
to leran ce and to remember th at America w ill lo s e something v i t a l to her e x is t
ence i f personal lib e r t y and the to lera n ce th at goes with i t ever disappear
from our n a tio n a l l i f e -
FOR RELEASE, MORNING- PAPERS
TREASURY DEPARTMENT
Saturday, June 9 , 1928.
Secretary Mellon announced th at su b scrip tio n s fo r the two issu e s o f
Treasury c e r t i f i c a t e s of indebtedness, S e rie s TD3-1928, 4 p er c e n t, dated
June 15, 1928, maturing December 15, 1928, and S e r ie s TM2-1929, 3 7 / 8 per
c e n t, dated June 15, 1928, maturing March 15, 1929, clo se d a t the clo se of
,
June
business on
\ 7, 1928.
Reports received from the tw elve Federal Reserve Banks show th at fo r
the o ffe r in g o f 4 per cent c e r t i f i c a t e s of S e rie s TD3-1928, which was fo r
$200,000,000 or th ereabou ts, t o t a l su b scrip tio n s aggregate some $738,000,000,
and th at fo r the o ffe r in g of 3 7/8 per cent c e r t i f i c a t e s o f S e rie s TM2-1929,
which was «Iso fo r $200,000,000, or thereabouts, t o t a l su b scrip tio n s aggre
gate some $254,000,000.
As p re v io u sly announced, su b scrip tio n s in payment
of which Treasury c e r t if i c a t e s o f indebtedness of S eries TJ-1928, maturing
June 15, 1928, were tendered, were a llo t t e d in f u l l .
Upon these exchange
su b scrip tio n s about $135,000,000 have been a llo t t e d .
A llotm ents on the cash
su b scrip tio n s f o r 4 per cent c e r t i f i c a t e s o f S e rie s TD3-1928 were made as
fo llo w s :
Su b scrip tio n s in amounts not exceeding $10,000 fo r any one sub
s c rib e r were a llo t t e d 50 per c e n t, but not le s s than $500 on any one sub
s c r ip tio n ;
su b scrip tio n s in amounts over $10,000, but not exceeding $100,000
fo r any one subscriber were a llo t t e d 40 per c e n t, but not le s s than $5,000
on any one su b scrip tio n ;
su b scrip tio n s in amounts over $100,000, but not
exceeding $500,000 fo r any one subscriber wore a llo t t e d 20 per c e n t, but not
le s s than $40,000 on any one su b scrip tio n ;
and subscriptions in amounts over
$500,000 were a llo t t e d 10 per c e n t, but not le s s than $100,000 on any one
su b scrip tio n .
Allotm ents on cash su b scrip tio n s f o r 3 7 / 8 per cent c e r t if i c a t e s
-
2
-
o f S e rie s TM2-1929 were made as fo llo w s;
A l l su b scrip tio n s in amounts not
exceeding $10,000 fo r any one subscrib er were a llo t t e d in f u l l .
A ll sub
s c r ip tio n s in amounts over $10,000 fo r any one subscriber were a llo t t e d
80 p er ce n t, but not le s s than $10,000 on any one subscription#
Further d e t a ils as to su b scrip tio n s and allo tm en ts w ill be announced
when f in a l rep orts are received from t|ie Federal Reserve Banks#
TREASURY DEPARTMENT
FOR RELEASE,-MORTOTG PAPERS,
Monday, June; 11, 1928*
Secretary Mellon^ to-day announced .that he has au th orized
the Federal Reserve B an ks'to purchase, at 100 2/32 and accrued
in te re s t,, at the option o f h o ld e r s , up to $125,000,-000, or there
abouts, aggregate fa ce amount o f Third L ib e r ty Loan 41 per cent
bonds, which mature September 15* 1928*
This o ff e r w ill remain
open u n t il the clo se o f b u sin ess on Tuesday, June 19, 1928, and
without fu r th e r n o tice w ill term inate on th at d a te , or on such
e a r lie r date as the full-am oun t s h a ll have been tendered*
Pay
ment fo r coupon bonds tendered and accepted, .w ill be made on
June 20.
Payment fo r re g is te r e d bonds tendered and accepted w ill
be made on June 20j# or on such l a t e r date as r e g is tr a tio n s h a ll
have been discharged*
POH IMMEDIATE RELEASE,
Tuesday, June 12, 1928
TREASURE DEPARTMENT
A ctin g Secretary Schuneman today announced th a t the t o t a l amount o f
su b scrip tio n s rece iv ed fo r the two is su e s o f Treasury c e r t i f i c a t e s o f
indebtedness, S e rie s TD3-1928, 4 per c e n t, dated June 15, 1928, maturing
Decfembet* 15, 1928, and S e rie s TM2-1929, 3-7/8 per c e n t, dated June 15, 1928,
maturing Inarch 15, 1929, was $992,363,500.
The t o t a l amount o f su b scrip tio n s
a llo t t e d was $428,148,000, of which $134,833,000 represents allo tm en ts on
su b scrip tio n s f o r which Treasury c e r t i f i c a t e s o f indebtedness o f S e rie s TJ-1928
maturing June 15, 1928, were tendered in payment.
A l l o f such exchange sub
s c r ip tio n s were a llo t t e d in f u l l , w hile allo tm en ts on other su b scrip tio n s
were made on a graduated s c a le .
The su b scrip tio n s and allo tm en ts were d iv id ed among the sev eral Federal
Reserve D is t r ic t s as fo llo w s:
SERIES TD3-1928
T o tal su b scrip tio n s i Received:
T o tal Su bscriptio n s A llo tte d :
Boston
Hew York
P h ila d e lp h ia
Cleveland
Richmond
A tla n ta
Chicago
S t . Louis
M inneapolis
Kansas C ity
D a lla s
San Fran cisco
$ 41, 225,,500
336, 854,,000
54, 453,,500
28, 428,,000
18, 229,,500
36, 045,,000
57, 295,,000
15, 391,,500
9 , 685,,500
11, 360,
27, 333,,000
101, 965,,500
$ 12,457,500
129,181,000
9.677.500
5.960.000
5.032.500
10,999,000
12.149.500
4.109.500
3.708.500
3.728.000
8.065.000
11.313.500
T otal . .
$738,266,000
$216,381,500
8
O
Federal Reserve
D is tr ic t:
(See fo llo w in g page fo r fig u r e s co v erin g S e rie s TM2-1929.)
,3 7
-
2
-
S3RISS TM2-1929
Federal ReserYë
D is tr ic t;
T o tal Subscriptio n s Received:
T ô tai Subscriptioris A llo tte d ;
Boston
ITew York
P h ila d e lp h ia
C leveland
Richmond
A tla n ta
Chicago
St* Louis
M inneapolis
Kansas C ity
D a lla s
San Fran cisco
$
$
T otal . .
92.432.000
10.814.000
12.031.000
5.818.500
14.428.500
18.258.000
8,875,'000
2,832,000
4.586.500
17.361.500
61.750.000
4,161,500
79.856.000
8.977.000
9.808.000
4.947.500
11,993,500
15.065.000
7.254.500
2.353.000
3.900.500
14.009.000
49.441.000
$254,097,500
$211,766,500
4,910*500
T o tal S u b s crip tio n s , both s e r ie s * •••••••••••• $992,363,500
T otal A llo tm en ts, both s e r ie s ........................................ $428,148,000
TREASURY DEPARTMENT
FOR IMMEDIATE RELEASE,
June 15, 1928*
The Treasury today received payments amounting to $90,757,665.01
from the fo llo w in g fo re ig n governments on account of th e ir indebtedness
to the United S ta te s :
GREAT BRITAIN:
The eleventh semi-annual payment o f in te r e s t on the funded
indebtedness o f Great B r ita in to the United S ta te s under the terms of the
debt settlem ent approved by the Act o f February 28, 19230 The t o t a l pay
ment amounted to $67,200,000, and as authorized by the terms of the s e t t le
ment, was made in o b lig a tio n s of the U nited S ta te s which were accepted at
par and accrued in te r e s t with a sm all cash adjustm ent.
The o b lig a tio n s were
$66,617,100 fa c e amount o f 3 -l/2 $ Treasury n o tes, S e r ie s "A*1 1930-32, the
accrued in te r e s t being $582,899.63 and the cash adjustment 37 c e n ts .
FRANGE:
A payment o f $11,250,000 by France on account o f i t s e x is tin g debt
to the U nited S t a te s , e x clu siv e o f the debt a r is in g from the purchase of
surplus war m a te r ia ls , on the same co n d itio n s as se t out in the excharg.e of
l e t t e r s of March 1 , 1927, between the T reasuries of the two co u n tries con
cerned, covering the payment made June 15, 1927.
The amount has been ap-
p lie d as a payment on account of the p r in c ip a l a f the demand o b lig a tio n s
g iv en by France fo r cash advances under the L ib e r ty Bond A c ts .
ITALY:
The th ir d annual in stallm en t o f p r in c ip a l on the funded indebtedness
o f I t a ly to the U nited S ta te s under the terms of the debt settlem ent approved
by the Act o f A p r il 28, 1926.
was made in cash,
The to t a l payment amounted to $5,000,000, and
-
BELGIUM;
2
-
Hie s ix th semi-annual x>ayment o f in te r e s t and the th ir d in stallm en t
o f p r in c ip a l on the funded indebtedness o f the Government of Belgium to the
U nited S ta te s under the terms o f the debt settlem ent approved by the A ct of
A p r il 30, 1926.
Hie t o t a l payment amounted to $3,575,000, and, as authorized
by the terms o f the settlem en t, was made in o b lig a tio n s of the U n ited S t a te s ,
which were accepted a t par and accrued in te r e s t w ith a small cash adjustm ent.
Hie o b lig a tio n s were $3,543,950 fa c e amount o f 3~l/2$ Treasury n otes o f S e rie s
»AM 1930-32, the accrued in te r e s t being $31,009*56 and the cash adjustment
$40»44.
$1,125,000 was fo r in te r e s t and $1,200,000 fo r p r in c ip a l on the
P o st-a rm istice deb t, and $1,250,000 fo r p r in c ip a l on the p re -a rm istic e d eb t.
CZECHOSLOVAKIA:
The s ix th semi-annual in sta llm e n t o f p r in c ip a l on the funded
indebtedness o f the Government o f Czechoslovakia to the U nited S ta te s under
the terms o f the debt settlem ent approved by the A ct o f May 3 , 1926#
The
payment amounting to $1,500,000 was made in cash .
ESTHONIA;
The f i f t h semi-annual payment on account of the funded indebtedness
o f the Government o f E sth o n ia to the U nited S ta te s under the terms of the debt
settlem ent approved by the Act o f A p r il 30, 1926.
$100,000, which was made in cash*
The payment amounted to
The balance w ill be funded in accordance
w ith the option given the Government o f E sth o n ia in the debt settlem ent agree
ment.
FINLAND;
The eleven th semi-annual payment o f in te r e s t on the funded indebted
ness of the Government o f F in lan d to the U nited S ta te s under the terms o f
the debt settlem ent ax>proved by the Act o f March 12, 1924.
Hie to t a l payment
amounted to $131,460, which was made in cash.
HUNGARY;
The n in th semi-annual payment of in te r e s t on the funded indebtedness
o f the Government o f Hungary to the U nited S ta te s under the terms o f the debt
settlem ent approved by the Act of May 23, 1924.
to $29,133.01, which was made in cash .
The to t a l payment amounted
- 3 LATVIA:
The f i f t h semi-animal payment on account o f the funded indebtedness
of the Government o f L a t v ia to the U nited S ta te s under the terms of the debt
settlem ent approved by the Act o f A p r il 30, 1926*
$40,000 and was made in cash*
The payment amounted to
The balance w ill be funded in accordance with
the option g iv en the Government o f L a tv ia in the debt settlem ent agreement*
LITHUANIA:
The eig h th seiai-annual payment of in t e r e s t , except th at £>art to
be funded, and the fo u rth annual in stallm en t of p r in c ip a l on the funded in
debtedness of the Government o f L ith u a n ia to the U nited S ta te s under the
terms o f the debt settlem ent approved by the Act o f December 22, 1924.
The
t o t a l payment amounted to $82,072, of which $48,564*50 was f o r in te r e s t anA
$33,507.50 fo r p r in c ip a l.
The payment was made in cash .
The balance o f the
in te r e s t amounting to $44,542.50 w ill be funded in accordance w ith the option
g iv e n the Government o f L ith u a n ia in the debt settlem ent agreement.
POLAND:
The seventh semi-annual payment on account of the funded indebtedness
o f the Government o f Poland to the U nited S ta te s under the terms of the dobt
settlem ent approved by the Act o f December 22, 1924.
$1,250,000 which was made in ca sh .
The payment amounted to
The balance due w il l be funded in accord
ance with the option given the Government o f Poland in the debt settlem ent
agreement,
RUMANIA:
The t h ir d annual in sta llm e n t o f p r in c ip a l on the funded indebtedness
o f the Government o f Rumania to the U nited S ta te s under the terms of the debt
settlem ent approved by the Act o f May 3 , 1926*
The payment amounting to
$400,000 was made in cash.
YUGOSLAVIA:
The th ir d annual in sta llm e n t o f p r in c ip a l on the funded indebted
ness o f the Government o f Y u g o slav ia (Serb s, Croats and Slovenes) to th e Ijfoitec5
S ta te s under the terms o f the debt settlem ent o f May 3 , 1926.
The payment
amounting to $200,000 was made in cash .
ghe o b lig a tio n s o f the U nited S ta te s accepted in connection with the
B r it is h and B e lg ia n payments have been c a n c e lle d and r e t ir e d and the p u b lic
debt reduced a c c o r d in g ly .
i
FOR RELEASE, MORNING PAPERS,
MONBAT, JUNE 18, 1928.
TREASURE DEPARTMENT
The Socretary o f the Treasury has today announced th a t the
$6,000,000 of 50-year f i r s t mortgage 5 per cent gold "bonds, issu ed
by the B oston, Cape Cod and New York Canal Company and secured hy
an indenture o f mortgage executed January 1 , 1910, to the O ld Colony
Trust Company as tr u s te e , are c a lle d fo r payment on January 1 , 1929.
Payment w ill he made a t the p a r value o f such bonds, p lu s accrued
in te r e s t to January 1 , 1929.
The coupon fo r the p e rio d from J u l y 1 ,
1928, to January 1 , 1929, should he attached to the bonds when pre
sented,
The bonds must be presented to the Federal Reserve Bank of
New York, New Y o rk , N. Y . , fo r payment.
In te r e s t on the bonds w ill
cease w ith the e x p ira tio n o f the s ix months p e rio d ending January 1 ,
1929.
The U nited S ta te s assumed payment o f th ese bonds as p a rt of
the purchase p r ic e o f the B oston, Cape Cod and New York C a n a l, pursu
ant to the p ro v isio n s o f the co n tract executed by and between the
Boston, Cape Cod and New York Canal Company and the U nited S ta te s ,
dated Ju ly 29, 1921, as r a t i f i e d by Act o f Congress approved January
21, 1927.
TREASURE DEPARTMENT
FOR IMMEDIATE r e l e a s e ,
Monday, June 18, 1928*
Secretary M ellon today c a lle d a tte n tio n to the fa c t th at the
Treasury’ s o ffe r to purchase Third L ib e rty Loan 41 per cent bonds
a t 100 2/32 and accrued in t e r e s t , w ill clo se a t the clo s e of b u si
ness tomorrow, Tuesday, June 19-, 1928«
Under the terms o f t h is o f f e r , p u b lic announcement o f which was
made on June 11, 1928, the Federal Reserve Banks are au th o rized to
purchase, a t 100 2/32 and accrued in t e r e s t , at the option of h o ld e rs,
up to $125,000,000, or thereabouts, aggregate face amount of Third
L ib e rty Loan 41 per cent bonds which mature September 15, 1928#
Pay
ment fo r coupon bonds tendered and accepted w ill be made on June 20th*
payment fo r re g iste re d bonds tendered and accepted w ill be made on
June 20th, or on such la t e r date as r e g is tr a tio n s h a ll have been d is
charged*
Holders of Third L ib e r ty Loan bonds who d esire to take ad
vantage o f t h is p r iv ile g e should submit t h e ir a p p lic a tio n to a Federal
Reserve Bank before the clo se of business tomorrow, June 19, 1928»
TREASURT DEPARTMENT
FOR IMMEDIATE RELEASE,
Thursday, June 21, 1928
Secretary M ellon announced th a t under the Treasury* s recent
o ffe r to purchase Third L ib e r ty Loan 4 J per cent bonds at 100-2/32
and accrued in t e r e s t , Federal Reserve Banks have received tenders
o f such bonds aggregatin g approxim ately $75,000,000#
The Secretary fu rth e r sta te d th a t w hile the p r iv ile g e o f tender
ing these bonds fo r sale had fo rm a lly expired at the c lo se o f b u si
ness on June 19th, in accordance w ith previous announcement, Federal
Reserve Banks have today been authorized to purchase a t the option
of the holders u n t il fu rth e r n o tic e , at 100-2/32 and accrued in te r e s t
to date o f payment, any a d d itio n a l Third L ib e r ty Loan 4 j* s which may
h e r e a fte r be tendered.
Third
L ib e r ty Loan
p e r cent bonds w ill mature on September 15
1928, and w ill cease to bear in te r e s t on th a t date*
TIŒASLÏÏIY DEPARTMENT
POR M E D I A T E RELEASE
Friday, Jane 22, 1928
The Treasury Department today announced the issuance of
regulations dealing with the taxation of incone fror.i property in
the custody of the United States under the Trading with the Enemy
Act, these regulation's being issued in accordance with the
provisions of the Settlement of War Claims Act of 1928.
, (T. D. Ho. 4168)
Income," P r o f i t s , and E s ta te Taxes
Computation o f income, war p r o f i t s , e x c e s s -p r o fits , and e s ta te
taxes in cases where property i s or has been in the custody
o f the U nited S ta te s under the Trading w ith the Enemy A c t,
and the c o lle c t io n and payment o f in te rn a l-rev en u e taxes
from such pro p erty.
TREASURY DEPARTMENT,
O f f ic e o f Uommissoner o f In te r n a l Revenue,
Washington, D. C.
TO COLLECTORS OF INTERNAL REVENUE AND OTHERS CONCERNED:
Sectio n 24, Trading with the Enemy A c t, as amended (as
amended fcy S e c tio n 18, Settlem ent o f War Claim s Act o f 1928),
(40 S t a t i L . 411, as amended by 42 S t a t . D. 1511» as amended
by P u b lic No. 122, 70th Congress), provides as fo llo w si
"S e c . 24. (a) The A lie n P roperty Custodian i s
authorized to pay a l l taxes (in c lu d in g s p e c ia l
assessm ents), h ereto fo re or h e r e a fte r la w fu lly
assessed by any body p o l i t i c a g a in s t any money
or other property held by him or by the Treasurer
o f the U nited S ta te s under t h is A c t, and to pay
the n ecessary expenses in curred by him or by
any d ep o sitary fo r him in securin g the p o sse ssio n ,
c o lle c t io n , or co n tro l o f any such money or other
p ro p erty , or in p ro te c tin g or ad m inisterin g the
same. Such taxes and expenses s h a ll be p a id out
o f the money or other property a g a in s t which such
taxes are assessed or in resp ect o f which such
expenses are in cu rred , or ( i f such money or
other property i s in s u f fic ie n t ) out o f any other
money or property h eld fo r the same person,
notw ithstanding the f a c t th at a claim may iiave
been f i l e d or s u it in s t it u t e d under th is A c t.
-
2-
,f ("b) In the case o f income, w a r -p r o fits , excessp r o f i t s , or e s ta te taxes imposed by any Act o f Congress,
the amount th ereo f s h a ll, under re g u la tio n s prescrib ed
by the Commissioner o f In te r h a l Revenue w ith the
approval o f the S ecre ta ry o f the Treasury, be computed
in the same manner (except as hbheiH after in th is
Sectio n provided) as though the money or other property
had hot been Seised by or paid to the A lie n Property
Custodian* and s h a ll be p a id , as fa r as p r a c tic a b le ,
in accordance 7/ith subsection (a) o f th is s e c tio n .
Pending f i n a l determ ination o f the ta x l i a b i l i t y
the A lie n P roperty Custodian i s authorized to retu rn ,
in accordance with the p ro v isio n s o f t h is A c t, money
or other property in any tr u s t in such amounts as
may be determ ined, under re g u la tio n s p rescrib ed by
the Commissioner o f In te r n a l Revenue with the approval
o f the S e cre ta ry o f the Treasury, to be co n siste n t
w ith the prompt payment o f the f u l l amount o f the
in te rn a l-rev en u e ta x e s.
«(<?) So much o f the net income o f a taxpayer
fo r the ta xa b le year 1917, or any succeeding taxable
y e a r, as represents the gain derived from the s a le
or exchange by the A lie n P roperty Custodian o f any
property conveyed, tr a n s fe r r e d , a ssign ed , d e liv e re d ,
or p aid to him, or seized by him, may a t the option
o f the taxpayer be segregated from the net income
and sep a rate ly taxed a t the rate o f 30 per centum*
This subsection s h a ll be ap p lied and the amount o f
net income to be so segregated s h a ll be determined,
under re g u la tio n s p rescrib ed by the Commissioner o f
In te r n a l Revenue with the approval o f the Secre ta ry
o f the Treasury, as n ea rly as may be in the same manner
as provided in se ctio n 208 o f the Revenue A ct o f 1926
( r e la t in g to c a p ita l net g a in s ) , but without regard to
the period fo r which the property was h e ld by the
A lie n Property Custodian before i t s sa le or exchange,
and whether or not the taxpayer i s an in d iv id u a l.
” (d) Any property sold or exchanged by the A lie n
Property Custodian (whether before or a ft e r the d ate
o f the enactment o f the Settlem ent o f War Claims Act
o f 1928) s h a ll be considered as having been com pulsorily
or in v o lu n ta r ily converted, w ithin the meaning o f the
income, e x c e s s -p r o fits , and w a r-p ro fits tax laws and
re g u la tio n s ; and the p ro v isio n s o f such laws and regu
la tio n s r e la t in g to such a conversion s h a ll (under
re g u la tio n s prescrib ed by the Commissioner o f In te r n a l
/V 7
-3-
Revenue with the approval of the Secretary of the
Treasury) apply in the case cf the proceeds of such
sale or exchange. For the purpose of determining
whether the proceeds of such conversion have been
expended within such time as will entitle the taxpayer
to the benefits of such laws and regulations relating
to such a conversion, the date of the return of the
proceeds to the person entitled thereto shall be
considered as the date of the conversion,
” (©) In case of any internal-revenue tax imposed
in respect of property conveyed, transferred, assigned,
delivered, or paid to the Alien Property Custodian, or
seized by him, and imposed in respect of any period
(in the taxable year 1917 or any succeeding taxable
year) during which such property was held by him
or by the Treasurer of the United States, no
interest or civil penalty shall be assessed upon,
collected from, or paid by or on behalf of, the
taxpayer; nor shall any interest be credited or
paid to the taxpayer in respect of any credit or
refund allowed or made in respect of such tax.
,f(f) The benefits of subsections (c), (d), and
(e) shall be extended to the taxpayer if claim therefor
is filed before the expiration of the period of limita
tions properly applicable thereto, or before the e v i r a
tion of six months after the date of the enactment of
the Settlement of War Claims Act of 1928, whichever
date is the later. The benefits of subsection (d)
shall also be extended to the taxpayer if claim therefor
is filed before the expiration of six months after the
return of the proceeds.”
Pursuant to the above-quoted provisions and the provisions
of the various Internal Revenue laws, the following Regulations
aro hereby prescribed:
-4 -
art.
i - Dsmnrious
Ihen used in these R egu latio n s —
(a) The term “property” in clu d es money, the proceeds o f
p ro p erty, income, d iv id en d s, in t e r e s t , a n n u itie s , and other
earnings (in clu d in g amounts a llo c a te d or payable out o f the
u n a llo c a te d * in te r e s t fu n d ), income payable under se ctio n 23,
and amounts payable under S e ctio n 10, o f the Trading with the
Enemy A c t.
(b) The term “ property seized by the A lie n Property
Custodian“ in clu d es property conveyed, tr a n s fe r r e d , a ssign ed ,
d e liv e re d , or p aid to the A lie n Property Custodian or to the
Treasurer o f the U nited S t a t e s , under the Trading with the
Enemy A c t.
(c) The term “property held by the A lie n Property
Custodian“ in clu d es property held by the Treasurer o f the
U nited S ta te s under the Trading w ith the Enemy A c t.
(d) The term “u n a llo cated in te r e s t fund“ has the meaning
assign ed to such term by the Trading with the Enemy A c t.
(e) The term “ Trading with the Enemy A c t” in clu d es a l l
amendments o f such A c t, and a l l orders, ru le s and re g u la tio n s
issued or p re scrib ed under such A ct or any such amendment.
m
- 5 -
ART. II - APPLICATION
OP REGULATIONS
(a) Income or Profits Taxes.
These Regulations are applicable to any income, warprofits, or excess-profits tax imposed by any Act of Congress
and payable by any person whose property is or has been held
by the Alien Property Custodian, whether or not such tax is
imposed in resnect of such property or in respect of the
period during which any of such property has been held by
the Alien Property Custodian.
(b) Estate Taxes.
These Regulations are applicable to any estate tax im
posed by any Act of Congress upon the transfer of the estate
of-any decedent if any of the property of such estate is or
has been held by the Alien Property Custodian or if any of
such tax is payable by any person whose property is or has
been held by the Alien Property Custodian.
(c) Citizens of the United States.
Any property held by the Alien Property Custodian may
be returned, prior to any computation or payment of internalrevenue taxes, to any individual who at the time of the seizure
of such property was a citizen of the United States.
ART. I l l - COMPUTATION OF TAX
(a) Income or P r o f it s Taxes*
The amount o f any income, w a r -p r o fits , or e x c e s s -p r o fits
ta x payable fo r any taxable period s h a ll be computed in accord
ance w ith the Revenue A ct and the re g u la tio n s promulgated there
under a p p lic a b le to such p eriod (in clu d in g a l l amendments enacted
or promulgated p rio r to the com putation), except as s p e c if ic a lly
otherwise provided by these R egulations*
(b) S s ta te Taxes.
The amount o f any e s ta te ta x s h a ll be computed in accordance
w ith the Revenue A ct and the re g u la tio n s promulgated thereunder
a p p lica b le a t the time o f the death o f the decedent (in clu d in g
a l l amendments enacted or promulgated p r io r to the com putation)*
except as s p e c if ic a lly otherwise provided by these R e g u la tio n s.
(c) G-eneral.
In mailing any such computation, the seizu re o f property
from the owner s h a ll be considered as not a f f e c t in g the owner
ship thereof* the seizure o f property from any person not the
owner s h a ll be considered as the r e c e ip t o f such property by
the owner; and any a ct o f the A lie n Property Custodian, the
Treasurer o f the United S t a te s , or the S ecre ta ry o f the
Treasury, in resp ect o f such property (in clu d in g any in v e s t
ment, s a le , or other d is p o s itio n and ary payment or other ex
penditure) s h a ll be considered as the a ct o f the owner.
- 7 -
(d) T en tative Comput a t io n s .
In order th at the retu rn o f property hy the A lie n Prop
e r ty Custodian may not "be delayed u n t il the amount o f taxes
payable by the person to whom such property i s retu rn ab le, or
out o f the property to be return ed, is f i n a l l y computed and
p a id , a, te n ta tiv e computation o f such amount w ill be made in
every case, u n less such person or the A lie n Property Custodian
n o t if ie s the Commissioner o f In te r n a l Revenue in w ritin g th at
he p re fe rs th at the return o f h is property be postponed tm t il
the amount o f such taxes can be f i n a l l y computed or u n less
the Commissioner o f In te rn a l Revenue b e lie v e s th at a f i n a l
computation w ill not postpone the return o f the property«
In making any such te n ta tiv e computation, the gross income or
the gross e s ta te (as the case may be) as shown by the records
o f the A lie n Property Custodian (excluding therefrom items ex
empt from ta x a tio n ) s h a ll be considered as the net income or net
e s ta te (as the case may b e ), u n less a return has been f i l e d or
f a c t s are a v a ila b le upon which a more accurate computation o f
the amount o f such taxes can be made.
(e) P in a l Compuations.
A f i n a l computation o f the amount o f taxes, payable by
the person to whom property i s returnable by the A lie n Property
Custodian, or out o f property to be returned, w ill be made as
soon as p r a c tic a b le in every c a s e .
In any case in which the
amount shown by a te n ta tiv e computation has been p a id , a refund
or c r e d it o f any amount paid in excess o f the amount properly due,
will "be made in accordance with the fiftal computation, even
though a claim therefor has not been filed, if the period of
limitation applicable to the filing of such claim has not
expired.
If, however, the taxpayer desires to protect his
right to any credit or refund determined to be due* a claim for
credit or refund should be filed*
Any such claim in respect of
the amount paid in accordance with a tentative computation will
be accepted even though it does not clearly set forth in detail
all the facts upon which the claim is based.
Any such claim
in respect of an amount paid in accordance with a final com
putation, however, must clearly set forth in detail under oath
all the facts relied upon in support of the claim and must
conform to the regulations applicable to an ordinary claim for
refund or credit (See, for example, Article 1304, Regulations 69).
(f) Information Required— Income and Profits Taxes.
The following information submitted under oath is neces
sary in each case for a final computation, for each taxable
year for which -the computation is to be made:
(l)
All income (other than income received by the
Alien Property Custodian) regardless of amount received during
such taxable year from sources within the United States, or if
no such income has been received, then a statement to that ef
fect;
(2)
If a return of such income has been made, then
the following data in respect of such return:
(A)
The taxable year for which the
return was made, and the tax (whether
income, war-profits or excess-profits)
- 9 ,
paid;
(B) The name of the taxpayer for whom
the return was made;
(C) The name of the agent or other
person (if any) “by whom such return was made;
(d )
The office of the collector in which
such return was filed,
(3)
Such other facts as may he required, from time
to time, by the Commissioner of Internal Revenue,
(g) Information Required - - Estate Taxes.
In order to make a final computation of the amount of
estate taxes payable in any case, the usual estate tax return
should be filed, together with the supporting documents re
quired by the regulations.
(h) Re turns.
It should be noted that in many cases allowance of
deductions and credits will be contingent upon the making
of a return in accordance with the applicable revenue act.
The submission of information in accordance with subdivision
(f) above will be considered as the making of the return
required by such revenue act.
(i) Taxable Years.
The amount of income, excess—profits, and war-profits
taxes will be computed for each taxable year prior to the
return of all the property out of which the tax is payable
or to the person by whom the tax is payable, unless the amount
of any tax paid would be considered an overpayment under sec-
tion 607 of the Revenue Act of 1928 (providing for the credit
or refund of amounts paid after the expiration of the period of
limitations).
However, unless facts are available indicating
a liability for taxes for a taxable year ending prior to the
seizure of the property by the Alien Property Custodian or be
ginning after the return of all the property out of which the
tax is payable, or to the person by whom the tax is payable,
the computations (both tentative and final) will be made only
in respect of periods during Which the property is held by the
Alien Property Custodian.
In any case in which a duly authorized
officer or employee of the Bureau of Internal Revenue has com
puted the amount of taxes payable in respect of any such period,
such computation will be accepted as a tentative computation,
unless the facts clearly indicate that a more accurate computa
tion can be made.
(j) Detail of officials of the Bureau of Internal Revenue.
The Commissioner of Internal Revenue will detail to the
office of the Alien Property Custodian such officers and em
ployees of the Bureau of Internal Revenue as may be necessary
to make the computations under these regulations promptly and
accurately.
An officer or employee of the Collector of Internal
Revenue, Baltimore, may be detailed by the Collector, for such
periods of time as may be necessary, to receive payments at the
office of the Alien Property Custodian.
11
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ART. IV - PATMMT OP TAXES
(a) T en tative Computations.
The amount o f taxes shown by a te n ta tiv e computation
s h a ll be p aid by the A lie n Property Custodian to the C o lle c to r
o f In te rn a l Revenue, B altim o re, or to a rep rèèen tativ e o f such
c o lle c t o r , as soon as p r a c tic a b le a ft e r the te n ta tiv e computa
tio n has been made.
I t w ill not be n ecessary, however, fo r
the payment to be made p r io r to the return o f property i f an
amount s u f f ic ie n t to make the payment is re ta in e d by the A lie n
Property Custodian out o f the property which would otherw ise
be re tu rn a b le .
(b) P in a l Computations.
I f a f i n a l computation shows th at the f u l l amount o f
in te rn a l-rev en u e taxes p roperly payable i s in excess o f the
amount ( i f any) p re v io u sly p a id , the amount remaining unpaid
s h a ll be p a id by the A lie n Property Custodian to the C o lle c to r
o f In te rn a l Revenue, B altim o re, or to a rep re se n ta tiv e o f such
c o lle c t o r , as soon as p r a c tic a b le a ft e r the f i n a l computation
has been made.
I f the f i n a l computation shows th at the f u l l
amount o f in tern al-reven u e taxes properly payable i s le s s
than the amount p re v io u sly p a id , the d iffe r e n c e s h a ll be
cre d ite d or refunded in accordance w ith the p ro v isio n s o f
these r e g u la tio n s .
A f i n a l computation w ill not p r o h ib it a
subsequent computation i f i t i s determined th at the amount
shown by the f i n a l computation i s erroneous.
(c) Punds A v a ila b le Por Payment.
I f the property h eld by the A lie n Property Custodian i s
in s u f f ic ie n t to make the payment, payment s h a ll be made by the
A lie n Property Custodian to the extent o f the property h e ld by
him ( i f an y), in clu d in g any property subsequently received by
him, and the amount remaining unpaid may be c o lle c te d from the
person l ia b le th erefo r in the same manner as a d e fic ie n c y in ta x
(d) G ivin g o f Bond P r io r to Computation.
I f i t appears in any case th at n e ith e r a te n ta tiv e nor
a f i n a l computation o f the amount o f taxes pro perly payable can
be made w ithin two months a f t e r the date on which the A lie n
Property Custodian would otherw ise return the p roperty, and
i f the A lie n Property Custodian deems i t ad v isab le not to
postpone the retu rn o f the property u n t il a computation can
be made, the property may be returned in accordance with sub
d iv is io n (a) i f a bond is f i l e d w ith the c o lle c to r in such
amount (or u n lim ited in amount) and with such s u r e tie s as the
Commissioner o f In te rn a l Revenue deems necessary (or c o lla t e r a l
authorized by law deposited in l i e u o f s u r e ty ), conditioned upon
the payment o f the f u l l amount o f the in tern al-reven u e taxes
f i n a l l y computed to be due.
Only surety companies holding
c e r t if i c a t e s o f a u th o rity from the Secretary o f the Treasury
as accep tab le s u re tie s on Federal bonds w ill be approved as
s u r e t ie s .
(e) D e fic ie n c y L e tte r s and N otice and Demand.
A l l payments by the A lie n P ro p erty . Custodian s h a ll be
made without regard to the p ro v isio n s o f law r e la t in g to the
m ailin g o f a d e fic ie n c y l e t t e r or to n o tice and demand, and
a l l refunds s h a ll be made d ir e c t ly to the A lie n Property
Custodian
- ■■
- 13 -
/f?
'
ART. V * SEGREGATED CAPITAL NET GAINS ■
(a) Tax on Gains from Sales by Alien Property
Custodian.
In any case in which a claim therefor (as prescribed
in section 24(f) of the Trading with the Enemy Act) is
filed by the taxpayer (or as prescribed in Article Vili,
in making a tentative computation), so much of the net
income of a taxpayer for the taxable year 1917, or any
succeeding taxable year, as represents gain derived from
the sale or exchange by the Alien Property Custodian of
any property held by him, shall be segregated and separately
taxed in the manner hereinafter provided in this Article.
(b) Definitions,
For the purposes of this Article (1) The term "segregated capital gain" means
taxable gain from the sale or exchange by the Alien Property
Custodian of segregated capital assets;
(2) The term "segregated capital loss” means
deductible loss resulting from the sale or exchange by the
Alien Property Custodian of segregated capital assets;
(3) The term "segregated capital deductions" means
such deductions as are allowed by the income, excess—profits
and war-profits tax laws for the purpose of computing net
income, and are properly allocable to or chargeable
against segregated capital assets sold or exchanged by
the Alien Property Custodian during the taxable year;
. •
- 14 (4) The term "ordinary deductions" means the deductions
allowed by the income, excess-profits and war-profits tax
laws for the purpose of computing net income, other than
segregated capital losses and segregated capital deductions;
(5) The term "segregated capital net gain" means the excess
of the total amount of segregated, capital gain over the sum of
(A) the segregated capital deductions and segregated capital
losses;' plus (B) the amount, if any, "by which the ordinary
deductions exceed the gross income computed without including
segregated capital gains;
(6) The term "ordinary net income" means the net income
computed in accordance with the income, excess-profits, and
war-profits tax laws- applicable to the taxable year, after
excluding all items of segregated capital gain, segregated
capital loss and segregated capital dediictions; and
(7) The term "segregated capital assets" means any property
held by the Alien Property Custodian other than (the seizure by
the Alien Property Custodian being disregarded and the property
regarded as in the possession of the taxpayer) stock in trade
of the taxpayer, or other property of a kind which would
properly be included in the inventory of the taxpayer if on
hand at the close of the taxable year, or property held by the
taxpayer primarily for sale in the course of his trade or
business
15 (c) Computation of Tax.
In any case in which gain derived, from the sale or
exchange by the Alien Property Custodian of any property
held "by him is segregated and separately taxed, the aggregate
of the amount of income, excess-profits, or war-profits taxes
shall he computed as follows:
(1) An income tax shall he computed upon the basis of the
ordinary net income;
(2) The war-profits and excess-profits taxes shall he computed
upon the basis of the ordinary net income;
(3) A tax of 30 per centum shall he computed upon the basis
of.the segregated capital net gain;
(4) ' The amount of income, excess-profits and war-profits taxes
shall he the sum of the amounts determined under paragraphs (1)
(
to (3), inclusive.
(d) Partners, Estates, Trusts, and Beneficiaries.
If any member of a partnership, any estate or trust, or any
beneficiary of an estate or trust, complies with the provisions of
subdivision (a) of this article, he shall be entitled to the
benefits of the provisions of this article, and the propert part
of the share of the net income which consists, respectively, of
ordinary net income, or segregated capital net gain, shall be
computed by the Commissioner of Internal Revenue, and taxed to
the member or beneficiary or to the estate or trust as provided in
the provisions of the applicable income, war-profits, and excessp rofits tax, laws with respectóte partnerships, estate or trusts,
Änd the members or b e n e fic ia r ie s th ereo f*
ifa
-
16
-
'a r t . vi-ummmm: ooimmxoN
(a) Computation o f T ax,
In the case of any property sold or exchanged by the Alien
Property Custodian, no gain or loss shall be recognized, for the
purposes of the income, war-profits, and excess-profits tax
laws, if the owner of the property thus sold or exchanged, forth
with upon the return of the proceeds (or such part thereof as
is returned) of the sale or exchange to him, in good faith
expends such proceeds in the acquisition of other property
similar or related in service or U 3© to the property sold or
exchanged, or in the acquisition of control of a corporation
owning such other property, or in the establishment of a replacemend fund (described in subdivision (b) of this Article).
If
any part of such proceeds is not so expended the gain, if ary,
shall be recognized but in an amount not in excess of the money
which is not so expended.
Any income derived from such proceeds
in the interim between such sale or exchange and such expenditure
shall, however, not be considered within the provisions of this
Article.
As used in this Article the term ’’control of a corpora
tion” means the ownership of at least 80 per centum of the voting
stock and at least 80 per centum of the total number of shares
of all other classes of stock of the corporation.
In any case
where the proceeds of the property sold or exchanges are not
identifiable when returned to the owner, the money or property ■
first returned to him (not including amounts payable under
section 23, Trading with the Eneny Act, or otherwise identifiable
as not the proceeds of such property,) shall be deemed the
proceeds of the sale or exchange.
17 -
("b) Replacement Fund.
In any case where the owner elects to replace the property
sold or exchanged hut it is not practicable to do so immediately,
he may obtain permission to establish a replacement fund in his
accounts in which part or all of the proceeds returned shall be
held, without deduction for the payment of any mortgage.
In
such case the owner should, In connection with his claim for the
benefits of thés Article, make application to the Commissioner
on Form 1114 for permission to establish such a replacement
fund and in his application should recite the matters required
in subdivision (e) of this Article and declare that he will
proceed as expeditiously as possible to replace such property.
In each case the owner will be required to furnish a bond as
provided in subdivision (f) of this Article.
(c) Claims Prior to Return of Proceeds.
In any case where the proceeds of the sale or exchange have
not yet been returned by the Alien Property Custodian, and the
owner elects to replace the property sold or exchanged upon the
return of the proceeds to him, the owner may obtain the benefits
of this Article by filing a proper claim therefor (as set forth
in subdivision (e) of this Article) declaring that he will
forthwith upon the return of the proceeds to him expend the
proceeds as required in subdivision (a).
In such a case the
owner will be required to furnish the bond prescribed in sub
division (f) of this Article.
If the provisions of this sub
division are complied with, the benefits of subdivision (a) shall
be applied both in the tentative and the final computation of
the taxes
- 18 -
(d) Preliminary Claims.
Section 24(f), Trading with the Enen§r Act, prescribes
definite periods of time within which claims for the benefits
of this Article may be filed.
Where it is not possible to file
within such period the complete claim as prescribed in this
Article, a preliminary claim for the benefits of this Article
should be filed within such period.
If within six months after
the filing of such preliminary claim, or within such further
period as the Commissioner shall upon application allow, the
complete claim is filed in accordance with subdivision (e) of
this Article, the claimant shall be entitled to the benefits of
this Article.
Upon failure to file such complete claim within
such period the preliminary claim shall become null and void.
(e) Complete Claims.
No person shall be entitled to the benefits of this Article
unless he files a complete claim therefor as prescribed herein
and agrees to file at the time prescribed by law a true and
correct return of all income for the taxable period in which
the property, in the acquisition of which the proceeds have been
expended, is soli or otherwise disposed of, and to pay all
internal-revenue taxes in respect of such income.
Each complete cl aim must contain under oath the following
information;
(l) In respect to the property sold or exchanged by the
Alien Property Custodian (A)
A description thereof (including specifi
cally the .kind and the service and use to which the
owner devoted the property
t■
|; i
v-'¡SIW
V
j.
'*
^
- 19 -
(B)
The date and mode of acquisition;
(C)
The cost thereof,, and, if acquired prior
to March 1,
(2)
19 13 ,
the value thereof on that date.
In respect of the property in the acquisition of
which the proceeds have "been expended (or if the proceeds have
not yet "been return -d, or if the establishment of a replacement
fund is contemplated, the property in the acquisition of which
the owner undertakes to expend the proceeds) (A)
A description thereof (including specifically
the kind and the service and use to which the owner
is devoting or proposes to devote the property);
(1+)
(B)
The cost or contemplated co*st thereof';
(C)
The date or contemplated date of acquisition.
All other necessary information in respect of the
transaction and/or contemplated transaction.
Each such claim must be accompanied by the statements under,
oath of three competent witnesses to each material fact set
forth in the claim.
(f)
Bonds.
In any case where a bond is required under this Article,
the bond must be filed with such surety as the Commissioner may
require in an amount not in excess of double the estimated
additional income, war-profits, and excess-profits taxes which
would be payable if the benefits of this Article were not claimed.
The estimated additional taxes, for the amount of which the
claimant is reouired to furnish security, should be computed at
the rates at which the claimant would have been obliged to pay,
- 20 -
taking into consideration the remainder of his net income
and r©golving against him all matters in dispute affecting
the amount of the tax.
Only surety companies holding
certificates of authority from the Secretary of the Treasury
as acceptable sureties on Federal bonds will be approved as
sureties.
The claim and/ or application accompanying the bond
should be executed in triplicate so that the Commissioner,
the claimant, and the surety or depositary may each have a
copy.
(g)
Applicability of Law and Regulations.
Except as otherwise specifically provided in these Regu
lations the provisions of the internal-revenue laws and regu
lations in respect of the basis for determining gain or loss
from the sale or other disposition of property acquired by
the expenditure of the proceeds of an involuntary conversion
and all matters incident* related* or consequent to such a
conversion or to the expenditure of the proceeds thereof*
shall apply in ail cases where the benefits of this Article
are claimed.
(See inter alia, Section 2Ob (a) (6), Revenue Act
of 1926, and section 113 (a) (10), Revenue Act of 1928.)
ART-. VII - INTEREST AND PENALTIES
.(a) Liability for Interest and Civil Penalties.
Liability for interest or civil penalties is governed
by section 2U(e) of the Trading with the Enemy Act.
This
subsection is not applicable to interest or civil penalties
payable in respect of any internal-revenue tax imposed in
respect of any period prior to the seizure of the property
by the Alien Property Custodian, or after the return of the
property, or in respect of property not seized by the Alien
Property Custodian.
(b) Retroactive Adjustments.
In any case in which interest or a civil penalty has
been assessed contrary to the provisions of section 24(e),
the assessment thereof shall be abated.
In any case in which
interest or a civil penalty has been collected from or paid
by or on behalf of the taxpayer, or in which interest has
been credited or paid to the taxpayer in respect of any
credit or refund, contrary to the provisions of section 24 (e),
proper adjustment shall be made therefor in
full
am ount
of
in t e r n a l'- r e v e n n ie t a x e s
d e te r m in in g
p r o p e r ly
payable.
the
22
ART. VIII - CLAIMS FOR EEFUUD OR CREDIT
AHD FOR OTHER RE REFITS
(a)
Claims for the "benefits of subsections (c),(d) and (e)
of section 24 of the Trading with the Enery Act must be filed
within the period prescribed by subsection (f).
Ary such claim
must contain a statement in detail under oath of all the facts
relied upon in support of the claim and should be filed with the
Collector of Internal Revenue, Baltimore, Md., or with his repre
sentative in the Office of the Alien Property Custodian.
In
making any tentative computation, it will be assumed that a claim
for the benefits of section 24(c), if the rate of tax is in excess
of 30 per centum, and for the refund or credit of interest or
civil penalties paid contrary to section 24(e), will be duly filed.
A claim for the benefit of section 24(e) is necessary only in case
an amount of interest or civil penalties has actually been paid by
the Alien Property Custodian or by the taxpayer.
(See, also,
Article VI (d), above, relating to preliminary claims for the
benefits of section 24(d)).
(b)
Any act of the Alien Property Custodian for, or on behalf
of, a taxpayer' in respect of any claim under these regulations will
be considered as the act of such taxpayer, unless such taxpayer noti
fies the Commissioner of Internal Revenue in writing that ho does not
ratify such act.
~ 23 -
ART. IX - CLOSING- AGREEMENTS
(a)
Section 606 of the Hevenue Act of 1928 authorizes clos
ing agreements to he entered into as to the entire tax liability,
any part of the tax liability, or any method to be followed in
computing the liability, of any person.
A closing agreement may
bq entered into in respect of the computation of the tax under
Article VI (relating to involuntary conversion), either before or
after the expenditure of the proceeds*
If, however, the closing
agreement is entered into prior to the expenditure of the pro
ceeds, the terns of the agreement will provide for compliance with
the requirements of Article VI, and for the agreement becoming
final only upon the actual expenditure of the proceeds (as distin
guished from the establishment of a replacement fund).
It is be
lieved that the final settlement of tax liabilities will be material
ly expedited and will prove a benefit to both the Government and the
taxpayer.
In order to facilitate closing agreements, one or more of
the officers or employees of the Bureau of Internal Revenue detailed
to the Office of the Alien Property Custodian will be authorized to
enter into any closing agreement and to advise and assist the tax
payer in respect thereof.
(b)
The effect of a duly executed closing agreement is pre
scribed by section 606 (b) as follows:
If such agreement is approved by the Secretary, or
the Undersecretary, within such time as may be stated in
such agreement, or later agreed to, such agreement shall
be final and conclusive,, and, except upon a showing
24 -
of f r a u d or ¿ n a i f e a s a r c e , or m.is r opr e s e nt a t i o n of a
material fact—
(l)
the co.se s h a l l n o t h e
r e o p e n e d as
to
the m a t t e r s a g r e e d u p o n or th e a g r e e m e n t
m o d i f i e d , "by an?/ o f f i c e r , e m p l o y e e , or
a g e n t o f the U n i t e d Stat e s , a n d
{2)
in a n y suit,
agreement,
collection,
action,
or p r o c e e d i n g ,
or a n y d e t e r m i n a t i o n ,
payment,
abatement,
such
assessment,
refund,
or
c r e d i t m a d e i n a c c o r d a n c e t h e r e w i t h , s h a l l no t
"be a n n u l l e d , m o d i f i e d , set .aside, or d i s r e g a r d e d .
v#
\
ifr?
~ 25 ART. X - RESERVATION OE POWER TQ AMEND
Tne power to amend or repeal these regulations or any nrovision
thereof is expressly reserved.
H. E. MIRES,
Acting Commissioner of Internal Revenue.
APPROVED:
June 21, 1928.
OGDEN L. MILLS,
Acting Secretary of the Treasury.
FOR RELEASE, MORNING PAPERS,
WEDNESDAY, JUNE 27, 1928.
TREASURY DEPARTMENT
SPEECH TO BE DELIVERED BY HON. OGDEN L. MILLS
AT THE RATIFICATION MEETING
OF THE
REPUBLICAN COUNTY COMMITTEE OF KINGS COUNTY
HELD AT KISMET TEMPLE
ON THE EVENING OF
TUESDAY, JUNE 26, 1928.
Note:
For full text of speech see Saibject File;
Secretary>s Speeches
Ill
TREASURY BEPAREMEEE
IQR SBIBASE MOREIHG PAPERS
MOEDAY, JULY 2, 1928.
Secretary Mellon made the following announcement in connection with the
close of the fiscal year of the Government on June 30th:
Ehe fiscal year Just closed has witnessed a further improvement in the
financial position of the Government.
receipts over expenditures.
Ehere was a substantial surplus of
Ehe national debt was reduced by over $900,000,000,
accompanied by a material cut in interest charges,
Ehe vast refunding opera
tions begun in 1927 were continued and have been well nigh brought to a suc
cessful conclusion.
Taxes were again cut by over $220,000,000.
Ehe total ordinary receipts amounted to $4,042,000,000, as compared with
the estimate submitted to the Congress by the Ereasury last October of
$4,076,000,000, and as compared with $4,129,000,000 in the fiscal year 1927.
Ehe expenditures chargeable against such receipts were $3,644,000,000, as com
pared with the Budget estimate of $3,621,000,000 (exclusive of $50,000,000
under War Claims Act), and expenditures in 1927 of $3,494,000,000.
Ehe sur
plus amounted to $398,000,000, as compared with the Ereasury estimate of
$405,000,000 and with a surplus of $635,000,000 in 1927.
keceipes
Ehe a b r o g a t e of tax receipts, that is, customs, income tax, and miscel
laneous internal revenue receipts, was $3,364,000,000, or $111,000,000 less
than receipts from these sources in 1927, and $41,000,000 less than the amount
estimated by the Ereasury last October, a difference of 1.2^ per cent.
Income tax receipts aggregate $2,174,000,000, as cospared with
$2,225,000,000 in 1927 and as against an estimate of $2,165,000,000.
In view
of the amount of discussion that has taken place as to the accuracy of the
Ereasury*s estimate of income taxes, it is worthy of note that, with collections
- 2 aggregating over $2,000,000,000, they exceeded estimates by the narrow margin
of $9,000,000, or an error of #42 of 1 per cent.
Customs yielded $569,000,000, as compared with an estimate of $602,000,000,
and receipts last year of $605,000,000*
The latter were record figures*
This
year*s are about normal.
Miscellaneous internal revenue receipts were $621,000,000, as compared
with an estimate of $638,000,000, and actual receipts last year of
$645,000,000.
The falling off in revenue, both as compared with the estimate
and last year*s receipts, is due in the main to a sharp diminution in the
receipts from the estate tax and in part to the Revenue Act of 1928, which
repealed the excise tax on the sale of automobiles*
Miscellaneous receipts yielded
of
$670,000,000
$678,000,000,
and a y ie ld la s t year of
as compared with an estimate
$654,000,000*
As compared with 1927, the principal items of decrease were $36,000,000
in customs receipts, $51,000,000 in income tax receipts, due, as anticipated,
to the falling off of back tax collections, and $24,000,000 in miscellaneous
internal revenue receipts, resulting in the main from reduced estate taxes*
The principal item of increase is $24,000,000 in miscellaneous receipts,
resulting from an increased liquidation of the obligations of railroads to
the Government, which, however, was in a large measure offset by a decrease in
receipts from the realization on other assets*
BggHPIgQHES
Total expenditures chargeable against ordinary receipts amounted to
$3,644,000,000, as compared with an estimate of $3,621,000,000, the latter
being exclusive of expenditures under the Settlement of War Claims Act, and
of $3,671,000,000 including the said expenditures*
The total expenditures,
therefore, show a decrease of $27,000,000 as compared with estimates, or
less than 3/4 of 1 per cent*
amounted to $3,494,000,000*
The total expenditures in the fiscal year 1927
It should he noted, however, that “ty reason of
the failure of the Deficiency Bill in 1927 and a change in the revenue law,
a substantial amount of expenditures properly chargeable to the fiscal year
1927 was carried over into 1928*
The Treasury Department estimated the surplus at $455,000,000, exclusive
of payments under the Settlement of War Claims Act, which in fact amounted
to $50,000,000, or, in other words, a surplus of $405,000,000*
The actual
surplus was $398,000,000, or within 1 3/4 per cent of the estimate.
$367,000,000
of the surplus has already been applied to the retirement of public debt
obligations, and the balance, which has been tenporarily carried over as an
increase in the net balance in the General 2Hind at the close of the year over
the balance at the beginning, will be used for debt retirement purposes early
in the fiscal year 1929.
THE PUBLIC DEBT
The total gross debt at the close of the fiscal year amounted to
$17,604,000,000, as eonpared with $18,511,000,000 at the close of the fiscal
year 1927, or a decrease of $907,000,000.
Of this amount, $540,000,000 is to
be attributed to the sinking fund and other debt retirements chargeable
against ordinary receipts, and $367,000,000 to debt retirement from the surplus
of receipts over expenditures*
The annual interest rate on the interest-bearing debt on June 30, 1928,
was 3*87 per cent, as compared with 3*96 per cent at the close of the fiscal
year 1927, and 4*29 per cent in 1921*
Total interest payments in the fiscal
year 1928 were $732,000,000, as compared with $787,000,000 in 1927, or a re
duction of $55,000,000*
During the fiscal year 1928, the treasury Department practically com
pleted the retirement «.«d refunding of the Second Liberty Loan bonds, of which
on March 1, 1927, there were outstanding $3,104,000,000*
there were still outstanding $1,308,000,000,
$33,000,000 had been retired*
On June 30, 1927,
By June 30, 1928, all but
In the fiscal year just closed, the Treasury
began refunding operations in anticipation of the maturity on September 15th
next of $2,147,000,000 of Third Liberty Loan bonds outstanding on January 1,
1928,
On June 30, 1928, this amount, by retirement and refunding, had been
reduced to $1,228,000,000,
During the course of the 18 months beginning on March 15, 1927, and
ending on September 15, 1928, the Treasury will have retired or refunded
into securities bearing a lower rate of interest over $5,000,000,000^ of
Second and Third Liberty Loan bonds*
(TREASURY DEPARTMEÌTT
POR IMMEDIATE RELEASE,
(THURSDAY, JULY 5, 1938
Secretai^ Mellon announced thàt the authorization given federal
Reserve Banks under date of June 21, 1928, to purchase, at the option
of the holdersj until further notice, at par and 2/32 and accrued i n
terest, any (Third Liberty Loan 4A per cent bonds that might he tendered,
was terminated at the close of business (Thursday, July 5, 1928,
FOR RELEASE, MORNING PAPERS,
THURSDAY, July 5, 1928,
TREASURY DEPARTMENT
STATEMENT BY SECRETARY MELLON
The Treasury announces an offering of Treasury Bonds of
1940-43, dated and Bearing interest from July 16, 1928, at the rate
of 3-3/8 per cent, maturing June 15, 1943, and callable on four
months* notice, in whole or in part, on and after June 15, 1940.
The offering will Be a combined offering for cash and in exchange
for outstanding Third Liberty Loan Bonds.
The amount of the cash offering will Be $250,000,000, or
thereabouts.
The Books for cash subscriptions will open on July 5,
1928, and may close without notice within a few days thereafter.
Cash subscriptions are invited as of August 1, 1928, at par and
accrued interest.
In other words, payment upon allotted cash sub
scriptions should not be made until August 1, 1928, and should include
not only the par amount of bonds allotted but also the accrued interest
thereon from July 16, 1928, to August 1, 1928.
The Treasury will not
make delivery of the new bonds on allotted cash subscriptions until
August 1st.
The amount of the exchange offering will be limited by the
amount of the Third 4^*8 tendered and accepted.
tions are invited at par.
Exchange subscrip
Interest on any Third 4^*s surrendered
and accepted upon allotted exchange subscriptions will be paid in
full to September 15, 1928.
Accordingly, at the time of delivery
of the new Treasury bonds the Federal Reserve Banks will pay to the
subscriber or his authorized agent the interest from March 15, 1928,
to Septomber 15, 1928, on the Third 4j!s surrendered in exchange#
Delivery of the now bonds on exchange subscriptions will be made on
and after July 16, 1928, upon acceptance of the Third 4 ^ fs tendered
in exchange#
The exchange offering will be kept open for a limited
period - probably until July 31st - but the Secretary of the Treasury
reserves the right to close the exchange offering, as well as the
cash offering, at any time without notice#
Attention is invited to the fact that the Third Liberty
Loan bonds mature September 15, 1928, and that interest thereon will
cease on that date#
If the amount of exchange subscriptions received by the
Treasury is such that the allotted subscriptions to the combined
offering aggregate $500,000,000, or thereabouts, there will be no
further offering of long term bonds in connection with the maturity
of the Thirds.
A copy of the official circular is attached#
UNITED STATES OF AMERICA
THREE AND THREE-EIGHTHS PER CENT TREASURY BONDS OF 1940-43
OFFERED FOR
CA SH
AND
IN
EXCHANGE
F O R T H IR D L IB E R T Y L O A N B O N D S
D ated and bearing interest from Ju ly 16, 1928
D u e Ju n e I S , 1943
R E D E E M A B L E AT T H E O P T IO N O F T H E U N IT E D S T A T E S AT P A R A N D A C C R U E D IN T E R E S T
O N A N D A F T E R J U N E IS , 1940
Interest Payable June 15 and December IS
The Secretary of the Treasury invites subscriptions, from the people of the United States,
for three and three-eighths per cent Treasury bonds of 1940-43, of an issue of Gold Bonds of
the United States authorized by the act of Congress approved September 24, 1917, as amended.
Cash subscriptions are invited at par and accrued interest. The subscription books for
the cash offering will open on July 5, 1928, and may close without notice within a few days
thereafter. The Treasury will not make delivery of the new bonds on allotted cash subscrip
tions until August 1, 1928, at which time payment at par with accrued interest from July 16,
1928, to August 1, 1928, must be made. Payment should not be made upon allotted cash
subscriptions until August 1, 1928. The amount of the issue for cash will be $250,000,000,
or thereabouts.
Exchange subscriptions, in payment of which only Third Liberty Loan 434 per cent bonds
of 1928 (hereinafter referred to as Third 434’s) may be tendered, are invited at par. Interest
on any Third 434’s so surrendered and accepted will be paid in full to September 15, 1928
On and after July 16, 1928, delivery of the new bonds on exchange subscriptions will be made
upon acceptance of the Third 434’s tendered in exchange. The amount of the issue upon
exchange subscriptions will be limited to the amount of Third 4 3 4 tendered and accepted.
D E S C R IP T IO N O F B O N D S
The bonds will be dated July 16, 1928, and will bear interest from that date at the rate
of three and three-eighths per cent per annum payable on December 15, 1928, on a semi
annual basis, and thereafter semiannually on June 15 and December 15 in each year until
the principal- amount becomes payable. The bonds will mature June 15, 1943, but may
be redeemed at the option of the United States on and after June 15, 1940, in whole or in
part, at par and accrued interest, on any interest day or days, on four months’ notice of
redemption given in such manner as the Secretary of the Treasury shall prescribe. In case
of partial redemption the bonds to be redeemed will be determined by such method as may
be prescribed by the Secretary of the Treasury. From the date of redemption designated
in any such notice, interest on the bonds called for redemption shall cease. The principal
and interest of the bonds will be payable in United States gold coin of the present standard
of value.
Bearer bonds with interest coupons attached will be issued in denominations of $50,
$100, $500, $1,000, $5,000, $10,000, and $100,000. Bonds registered as to principal and
interest will be issued in denominations of $50, $100, $500, $1,000, $5,000, $10,000, $50,000,
3— 14709
2
and $100,000. Provision will be made for the interchange of bonds of different denomina
tions and of coupon and registered bonds and for the transfer of registered bonds, without
charge by the United States, under rules and regulations prescribed by the Secretary of the
Treasury.
The bonds shall be exempt, both as to principal and interest, from all taxation now or
hereafter imposed by the United States, any State, or any of the possessions of the United
States, or by any local taxing authority, except (a) estate or inheritance taxes, and (b) grad
uated additional income taxes, commonly known as surtaxes, and excess-profits and war-profits
taxes, now or hereafter imposed by the United States, upon the income or profits of individuals,
partnerships, associations, or corporations. The interest on an amount of bonds and certifi
cates authorized by said act approved September 24, 1917, and amendments thereto, the princi
pal of which does not exceed in the aggregate $5,000, owned by any individual, partnership,
association, or corporation, shall be exempt from the taxes provided for in clause (b) above.
The bonds will be-acceptable to secure deposits of public moneys, but do not bear the
circulation privilege and are not entitled to any privilege of conversion. The bonds will be
subject to the general regulations of the Treasury Department, now or hereafter issued,
governing United States bonds.
A P P L IC A T IO N A N D A L L O T M E N T
Applications will be received at the Federal Reserve Banks, as fiscal agents of the XJnited
States. Banking institutions generally will handle applications for subscribers, but only the
Federal Reserve Banks are authorized to act as official agencies. With respect to subscrip
tions to the cash offering, attention is invited to the fact that while delivery of the new bonds
and payment therefor are not to be made until August 1, 1928, applications must nevertheless
be submitted promptly after the opening of the subscription books on July 5, 1928.
The right is reserved to reject any subscription and to allot less than the amount of bonds
applied for and to close the subscriptions at any time without notice, and the act of the
Secretary of the Treasury in these respects will be final. The Secretary of the Treasury also
reserves the right to make allotment in full upon applications for smaller amounts, and to
make reduced allotments upon, or to reject, applications for larger amounts, and to make
classified allotments and allotments upon a graduated scale; and his action in these respects
will be final.
PAYM ENT
C a s h s u b s c r ip t io n s .—Payment
at par and accrued interest from July 16, 1928, to August
1 , 1928, for any bonds allotted on cash subscriptions must be made on August 1, 1928.*
Any qualified depositary will be permitted to make payment, as of August 1, 1928, by credit
for bonds allotted to it for itself and its customers up to any amount for which it shall be
qualified in excess of existing deposits, when so notified by the Federal Reserve Bank of its
district.
E x c h a n g e s u b s c r ip t io n s .—Payment for any bonds allotted on exchange subscriptions may
be made only in Third 43^’s, which will be accepted at par. Interest from March 15, 1928, to
September 15, 1928, on the Third 4 % ’s so accepted will be paid in full at the time of delivery
of the Treasury bonds of 1940-43 (or interim certificates) upon allotted subscriptions. Pay
ment for bonds subscribed for should be made when the subscription is tendered. If any
subscription is rejected in whole or in part, any bonds which may have been tendered and not
accepted will be returned to the subscriber.
* The accrued interest for this period for each $1000 face amount of bonds is $1.47540976.
2 I 14709
3
SU R R EN D ER OF BO N D S
S u r r e n d e r o f c o u p o n b o n d s. —Third 4M’S in coupon form tendered in exchange for Treasury
bonds issued hereunder should be presented and surrendered to a Federal Reserve Bank.
The bonds must be delivered at the expense and risk of the holder. Facilities for transporta
tion of bonds by registered mail insured may be arranged between incorporated banks and
trust companies and the Federal Reserve Banks, and holders may take advantage of such
arrangements when available, utilizing such incorporated banks and trust companies as their
agents. Incorporated banks and trust companies are not agents of the United States under
this circular.
Coupons dated September 15, 1928, must be attached to the coupon bonds of the Third
4M ’s when presented. At the time of delivery of the Treasury bonds of 1940-43 (or interim
certificates) upon allotted subscriptions, Federal Reserve Banks will pay to the subscriber or
his authorized agent the interest from March 15, 1928, to September 15, 1928, on the coupon
Third 4M’s surrendered and accepted in exchange.
S u r r e n d e r o f reg istered b o n d s. —Third 4M’s in registered form, tendered in exchange for
Treasury bonds issued hereunder, should be assigned by the registered payee or assigns thereof
to “ The Secretary of the Treasury for exchange for Treasury Bonds to be delivered to
---------------------------------” (name of person to whom delivery is to be made to be inserted
in assignment), in accordance with the general regulations of the Treasury Department
governing assignments for transfer or exchange into coupon bonds, and thereafter should
be presented and surrendered to a Federal Reserve Bank. -The bonds must be delivered at
the expense and risk of the holder. At the time of delivery of the Treasury bonds of 1940-43
(or interim certificates) upon allotted subscriptions, Federal Reserve Banks will pay to the
subscriber or his authorized agent the interest from March 15, 1928, to September 15, 1928,
on the registered Third 4M’s surrendered in exchange.
The Federal Reserve Banks, as fiscal agents of the United States, are hereby authorized
and requested to receive subscriptions for Treasury bonds hereunder, to receive Third 4M’s
tendered in exchange, to make allotments of subscriptions on the basis and up to the amounts
indicated to them by the Secretary of the Treasury, and to make delivery of Treasury bonds
on full-paid subscriptions allotted, and, pending delivery of definitive bonds, to issue interim
certificates.
F U R T H E R D E T A IL S
Any further information which may be desired as to the issue of Treasury bonds under
the provisions of this circular may be obtained upon application to a Federal Reserve Bank.
The Secretary of the Treasury may at any time, or from time to time, prescribe supplemental
or amendatory rules and regulations governing the exchange, and may terminate the offer
at any time in his discretion.
A. W. MELLON,
S e c re ta r y o f the T r e a s u r y .
T
r e a s u r y
O
D
e p a r t m e n t
f f ic e
o f
t h e
,
S
e c r e t a r y
,
J u ly 5, 1928.
Department Circular N o. 405.
(Public Debt)
TO T H E IN V E S T O R :
Almost any banking institution in the United States will handle your subscription for you, or you may
make subscription direct to the Federal Reserve Bank of your district. Your special attention is invited to
the terms of subscription and allotment as stated above, and to the fact that Third Liberty Loan bonds
may be exchanged for the Treasury Bonds offered. Further attention is directed to the fact that the Third
Liberty Loan bonds of 1928 mature on September 15, 1928, and will cease to bear interest on that date.
U. S. GOVERNMENT PRINTING OFFICE:
2— 14709
TREASURY DEPARTMENT
FOR RELEASE, MORNING- PAPERS,
FRIDAY, JULY 6, 1928.
The following address, regarding the Treasury’s offering of 3 3/8 per cent
Treasury Donds of 1940-1943, was broadcast last evening (Thursday, July 5th) by
Honorable Ogden L. Mills, Undersecretary of the Treasury, through a nation-wide
chain of the National Broadcasting Company and associated radio stations:
I am bringing you to-night a message which is of interest to all investors,
and more particularly to those who, either during the war or since, have invested
their savings in Third Liberty Loan bonds.
On September 15th next, the Third Liberty Loan bonds will mature.
That is
to say, on September 15th next the Government will pay the principal of these
bonds and the final interest.
On September 15th, therefore, these bonds will
cease to bear interest.
This is the first of the great series of bonds, issued by the United
States Government during the war, to mature.
It does not seem so long ago that
the Government was calling on all patriotic citizens to subscribe to its bonds
to enable us to do our share in the mightiest war of all time.
You will all
remember the Liberty Loan committees, on which many of you doubtless served,
the Liberty Loan rallies and parades, the Liberty Loan posters, the Liberty Loan
buttons, the house to house canvasses, and the enthusiasm which greeted the
final announcement that the Third Liberty Loan had been oversubscribed.
Sub
scriptions had been received from 18,600,000 individuals, and the total amount
subscribed was over, $4,176,000,000.
* Now?ten-years JiQ-va..elapsed and we are re—
tiring such of these bonds as are still outstanding, for in the* course of the
last few years the Treasury has refunded or retired all but approximately
$1,225,000,000 of the original issue of Third Liberty Loan bonds.
There is a certain dramatic quality in the maturity date and final payment
of a great war issue, but the process of reducing the war debt has been proceeding
steadily and rapidly, year in and year out.
From 1919 to June 30, 1928, our
public debt bas been reduced from $25,484,000,000 to $17,604,000,000, or a ré
duction of almost $8,000,000,000.
One-third of the war debt has already been
disposed of, and it will not be many years before United States Government bonds,
which since the war have come to be looked upon as the safest and in many respects
one of the most desirable forms of investment, will cease to be available for in
vestment purposes.
Last year, over $3,000,000,000 of Second Liberty Loan
per cent bonds were either retired or refunded, but of those refunded about
$2,000,000,000 were exchanged for securities with a maturity date of not exceed
ing five years and which will be paid off during the course of the next five years
In addition, therefore, to the intrinsic value which they possess from the
standpoint of safety and ready marketability, long-term United States Government
bonds are yearly becoming increasingly valuable because of their scarcity,
is one of the reasons why the Treasury
This
per cent bonds, issued at par in
October, 1922, are now selling at 114; the Treasury 4»s, issued in December, 1924,
at par, with an. additional issue in March, 1925, at par and one-half, are now
selling at 109-4/32; the Treasury 3f*s, issued in March, 1926, at par and
at
106-6/32; and the Treasury 3-3/8 per cent bonds, issued just a year ago in ex
change for Second Liberty Loan bonds, par for par, and for cash at par and onehalf, now command a premium of a dollar and 16/32,
As I have stated, the bonds of the Third Liberty Loan will mature and be
come payable on the 15th of September.
Those of you who hold Third Liberty Loan
bonds are perhaps already wondering how you can reinvest the proceeds of your
bonds so as to enjoy for the next ten years at least the same ^character of se
curity and marketability that you have enjoyed during the last ten years.
You
can, of course, purchase outstanding United States Government bo-nds in the market,
but this would meaner under present conditipns, the payment of a high premium.
- 3 You will, therefore, I "believe be veiy rmich interested indeed in the message
which I bring you from the Treasury Department*
The Secretary of the Treasury
this morning announced a new issue of Treasury bonds, which is specially available
to holders of Third Liberty Loan bonds*
The new Treasury bonds bear interest at
the rate of 3-3/8 per cent from July 16, 1928.
They have a life of fifteen
years, but may be called for redemption after twelve years, but not before
twelve years*
Third Liberty Loan bonds may be exchanged for the new bonds par for par or
bond for bond*
In addition, though the new bonds bear interest from July 16th,
tho Treasury will pay interest in full to September 15th on the Third Liberty
Loan bonds offered in exchange.
In other words, at the same time that the Government delivers your new bonds
to you, it will hand you a check covering the interest on your Third Liberty Loan
bonds for the full six months* period ending September 15, 1928*
Here, then, is the opportunity for those of you who have kept your funds
invested in United States Government bonds for the last ten years to continue to
keep them so invested for the next twelve or fifteen years*
It is true the in
terest rate is somewhat lower, but this is equally true of the return on all
first-class investments as compared with ten years ago*
In the public announcement of this morning, the Secretary of the Treasury
stated that if the allotted cash and exchange subscriptions for this new issue of
Treasury bonds aggregate approximately $500,000,000, there will in all probability
be no further issue of long-term Treasury bonds in connection with the maturity of
the Third Liberty Loan*
In other words, this is probably the last opportunity
open to Third Liberty bond holders to obtain a new long-term United States
Government bond through the medium of offering their Third Liberty Loan bonds in
exchange*
The value which the market places on the exchange privilege is in
dicated by the fact that whereas Third Liberty Loan bonds were selling on Tuesday
Its
- 4 - .
at about par, upon the announcement of the exchange offering they at once went
to a premium of a dollar a hundred*
My allotted time will not permit me to give you further details to-night*
But your local "banker has to-day "been furnished with full information concerning
the Treasury's exchange offering, and he will, I am sure, "be pleased to instruct
you as to the surrender of your Third Liberty Loan "bonds for exchange*
Please, however, remember these facts!
Your Third Liberty Loan bonds will become payable on September 15th of this
year, and will not bear any interest after that date.
You are now offered the privilege of exchanging your Third Liberty Loan
h
bonds for a new issue of United States Treasury three and three-eighths per cent
bonds which will not be callable for redemption for twelve years#
And at the time of the exchange the Government will pay you the full six
months* interest on your Third Liberty Loan bonds.
The exchange offer is open for only a limited period.
I may add that those who do not hold Third Liberty Loan bonds may subscribe
to the new bonds for cash at par and accrued interest as of August 1st next.
The
cash offering will remain open in all probability but a few days, but you will
be interested to know that heavy cash subscriptions have already been'received
to-day, though the subscription
books were only opened this morning.
Whether* you are a holder of Third Liberty Loan bonds and desire to-exchange,
or whether you are simply an investor desiring to sub sc ribe jt.o-a'new~i ssue of
United States- Government long-term bonds, in either event you sjaould, not -delay
/
seeking advice*
/
-■ I
You should consult your local banker tomorrow,- or'd'f not' tomorrow^the next
day.
/
/
/
/
/
TREASURY DEPARTMENT
FOE RELEASE, MORNING PAPERS,
MONDAY, JULY 9, 1928.
Secretary Mellon announced that subscriptions for the cash offering of
3-3/8 per cent Treasury Bonds of 1940-43, dated,July 16, 1928, closed at
the close of business on Saturday, July 7, 1928.
Although final reports
from the twelve Federal Reserve Banks have not been received, it is in
dicated that the cash subscriptions for this offering will aggregate
at least
$725,000,000.
The current offering of Treasury Bonds of 1940-43 was announced on
July 5th.
The new bonds are dated and bear interest from July 16, 1928, at
the rate of 3-3/8 per cent.
They mature on June 15, 1943 and are callable
on and after June 15, 1940.
The offering was a combined offering for cash
and in exchange for outstanding Third Liberty Loan bonds.
The amount of
the cash offering was announced to be $250,000,000, or thereabouts.
Cash subscriptions were invited as of August 1, 1928, and payment upon
allotted cash subscriptions will not be required to be made until August 1,
1928.
The Treasury will not make delivery of the new bonds on allotted
cash subscriptions until August 1, 1928.
The closing of the cash subscriptions does not affect the privilege of
exchanging Third Liberty Loan bonds for the new bonds* The exchange privilege
remains open and will continue to be available until about July 31st. Exchange
subscriptions are invited at par.
Interest on any Third 4j*s surrendered
and accepted upon allotted exchange subscriptions will be paid in full to
September 15, 1928.
The#Secretary of the Treasury further called attention to the fact that
Third Liberty Loan bonds mature on September 15, 1928, and that interest
thereon will cease on that date.
TREASURE DEPARTMENT
pop release, morning-papers,
Wednesday, July 11, 1928*
Secretary Mellon announced that the allotment of cash subscriptions
for the issue of 3-3/8 per cent Treasury bonds of 1940-43, dated July 16,
1928, maturing June 15, 1943, and callable on and after June 15, 1940, has
boon made on the following basis:
All cash subscriptions in amounts not exceeding $1,000 for any one
subscriber were allotted in full. Cash subscriptions in amounts over $1,000
but not exceeding $100,000, were allotted 60 per cent, but not less than
$1,000, on any one subscription; cash subscriptions in amounts over$100,000
but not exceeding $500,000, were allotted 50 per cent, but not less than
$60,000 on any one subscription; cash subscriptions in amounts over$500,000
but not exceeding $1,000,000, were allotted 30 per cent, but not less than
$250,000 on any one subscription; and cash subscriptions in amounts over
$1,000,000 were allotted 20 per cent, but not less than $300,000 on ary one
subscription. Cash subscriptions for this issue of Treasury bonds were
invited as of August 1, 1928, at par and accrued interest. The offering was
a combined offering for cash and in exchange for outstanding Third Liberty
Loan bonds. The amount of the cash offering was $250,000,000, or thereabouts
and the total cash subscriptions received aggregated $743,767,700*
The exchange offering will remain open until about July 31, and holders
of Third Liberty Loan 4j per cent bonds may still exchange their bonds for
the new 3-3/8 per cent Treasury bonds of 1940-43, at par, bond for bond* As
previously announced, interest on any Third 4j*s surrendered and accepted on
allotted exchange subscriptions will be paid in full to September 15, 1928.
Holders of Third Liberty Loan bonds are urged to consult their banker at the
earliest opportunity, in order that they may avail themselves of the exchange
privilege.
TREASURY
DEPARTMENT
\
POE IMMEDIATE RELEASE,
Thursday, July 12, 1928«
Acting Secretary Mills to-day announced that the total amount
of cash subscriptions received for 3—3/8 per cent Treasury bonds of
1940-43, dated July 16, 1928, maturing June 15, 1943, and redeemable at
the option of the Secretary of the Treasury on and after June 15, 1940,
was $743,367,700, and the total of cash subscriptions allotted was
$251,528,600.
The subscriptions and allotments were divided among the several
Federal Reserve districts as follows:
Federal Reserve
District:
Total Cash Subscriptions Received!
Total Cash Subscriptions Allotted:
Boston
Hew York
Philadelphia
Cleveland
Richmond
Atlanta
Chicago
St. Louis
Minneapolis
Kansas City
Dallas
San Francisco
Treasury
$ 92,982,750
203,924,450
123,734,150
62,202^150
36,395,250
32,304,850
98,553,400
21,260,750
7,549,850
13,622,350
13,248,850
37,581,550
7,350
$ 43,109,600
55,504,550
32,888,000
21,548,650
13,972,900
15,279,150
35,020,800
7,559,700
4.484.450
6,052,250
6.472.450
9,630,350
5,750
Total
$743,367,700
$251,528,600
The above figures relate to cash subscriptions only.
The ^privilege
of exchanging Third Liberty Loan bonds for the new 3-3/8 per cent
Treasury bonds of 1940-43 is still available and will remain open until
on or about July 3ist.
TREASURY”DEPARTMENT
FOR RELEASE, MORNING PAPERS
FRIDAY”, July 27, 1928*
Acting Secretary Mills today announced that the privilege of
exchanging Third Liberty Loan 4j per cent bonds for the new 3-3/8 per
cent Treasury bonds of 1940-43 will definitely expire on Tuesday, July
31, 1928*
Exchange applications in the mails or otherwise in transit
before midnight on July 31st will be accepted*
The offering of 3-3/8 per cent Treasury bonds of 1940-43 was
first announced on July 5th*
The offering was a combined offering for
cash and in exchange for outstanding Third Liberty Loan bonds*
The
books upon the cash offering closed on July 7th, when cash subscriptions
aggregating over $743,000,000 had been received*
tions $251,528,600 have been allotted*
Of these cash subscrip
Under the exchange offering,
which as above stated will close on July 31st, interest on any Third 4j*s
surrendered and accepted upon exchange subscriptions will be paid in
full to September 15, 1928*
interest from July 16, 1928*
The new bonds issued upon exchange bear
Through the use of the radio, newspaper
advertisements, placards, and other methods of publicity, the Treasury
has endeavored to inform every holder of Third 4J-1s of the exchange
privilege, and banks throughout the country have lent their assistance
in communicating Information to their customers*
Acting Secretary Mills further called attention to the fact
that the Third Liberty Loan bonds will mature on September 15, 1928,
and will cease to bear interest on that date*
FOR RELEASE, MORNING- PAPERS
Wednesday, August 1, 1928»
TREASURE DEPARTMENT
Acting Secretary Mills today announced that beginning today and
continuing until further notice, he has authorized the Federal Reserve
Banks to purchase, at the option of holders, Third Liberty Loan 4j
per cent bonds, for account of the sinking fund. Such purchases will
be made at 100-1/32 to August 15, 1928, and thereafter at par, together
with accrued interest to the date of such optional purchase. Coupon
bonds presented for purchase must have September 15, 1928 coupons
attached. Registered bonds presented for purchase must be assigned
to “The Secretary of the Treasury for purchase’1 in accordance* with
established regulations, and accrued interest thereon will be paid
to date of discharge of registration.
In making this announcement the Acting Secretary again called
attention to the fact that Third Liberty Loan bonds are due for payment
on September 15, 1928, and will cease to bear interest after that date,
and further, that in accordance with prior announcement, the privilege
of exchanging such bonds for 3-3/8 per cent Treasury bonds of 1940-43
expired at the close of business last evening. Preliminary figures
received from Federal Reserve Banks indicate that exchange subscriptions
aggregating approximately.$106,500,000
were received. Allotted cash
subscriptions to this issue of Treasury bonds amounted to $251,528,600.
The total amount of the issue of 3-3/8 per cent 1940-43 Treasury bonds
will therefore be approximately $358,000,000.
TREASURT DEPARTMENT
FOR RELEASE, MORNING PAPERS,
Monday, August 13, 1928,
Acting Secretary- lowman today in referring to the offer made hy
the Treasury on August 1 to purchase, through Federal Keserre Banks,
at the option of holders, Third Liberty Loan 4* per cent bonds, for
account of the sinking fund, called particular attention to the fact
th at the p ric e fix e d by the Treasury fo r such purchases would change
on August 15.
He stated that any bonds tendered under this offer
before the close of business August 15 would be purchased at
100-1/32,
to geth er with accrued in te r e s t to date o f purchase, and th a t any bonds
tendered after that date would be purchased at par, together with accrued
interest to date of purchase.
He further stated that .ary tenders
a c t u a lly in tr a n s it up to midnight August 15 would be accepted a t the
August 15 p r ic e .
TREASURT DEPARTMENT
EOR IMMEDIATE RELEASE
Tuesday, August 14, 1928#
The Revenue Act o f 1928 imposes upon the Treasury the duty to p re scrib e
r e g u la tio n s , fo r the ta x a b le year 1929 and th e r e a fte r , fo r the f i l i n g o f con
s o lid a te d returns by a f f i l i a t e d corporations and the determ ination o f the ta x
l i a b i l i t y o f , and the c o lle c tio n o f the ta x from, a f f i l i a t e d corporations
f i l i n g con solidated returns»
The Treasury ap p reciates keenly1 the importance and d i f f i c u l t y o f the ta s k
with which i t is confronted^ and b e lie v e s th at the p re se n tatio n o f the views
and suggestions o f persons fa m ilia r w ith co n so lid ated return problems o f the
taxpayers w ill be o f in v alu a b le assista n ce »
A cco rd in gly , i t i s proposed to
hold p u b lic h e a rin g s, beginning September 10, 1928, and continuing through
September 15, 1928, or u n t il the hearin gs may properly be closed»
The hearings
w ill be sten o g rap h ically rep orted, and w ritten memoranda may be f ile d »
The h earin gs w ill be h e ld in Room 276 o f the Treasury B u ild in g and w ill be
g in each morning a t 9:30 and continue u n t il 5 ;3 0 , w ith an adjournment fo r one
hour at 12:30»
They w ill be h e ld before a committee composed o f Henry H errick
Bond, A s s is ta n t Secretary o f the Treasury, David H. B l a i r , Commissioner o f In
te rn a l Revenue, Clarence M. C h arest, -General Counsel o f the Bureau o f In te rn a l
Revenue, and E llsw o rth C* A lvord , S p e c ia l A s s is ta n t to the Secretary o f the
Treasury*
Every e f f o r t w ill be made to arrange hours in conform ity w ith the
expressed d e sire s o f those to be heard, although i t can w e ll be appreciated th at
departures may p o s sib ly be n ecessary.
Communications should be addressed
d ir e c t ly to A s s is ta n t Secretary Bond, Treasury Department, Washington, D* C#
Persons requesting a h earin g w ill be advised as soon as p o ssib le o f the date
and hour assigned*
*
TREASURY DEPARTMENT
FOB RELEASE, MOHNING PAPERS,
FRIDAY, September 7, 1928.
STATEMENT BY SECRETARY MELLON
The Treasury is today announcing i t s September fin a n c in g , which
takes the fo r a o f an o ffe r in g o f nine months 4gr per cent Treasury c e r t i f i
cates o f indebtedness, dated and bearin g in te r e s t from September 15, 1928,
and maturing June 15, 1929.
The amount o f the o ffe r in g is $525,000,000,
or thereabouts,
The Treasury w ill accept in payment fo r the now c e r t i f i c a t e s , a t
p a r, Third L ib e rty Loan bonds, m aturing September 15, 1928.
Su b scrip tion s
fo r which payment is to be tendered in Third L ib e rty Loan bonds maturing
September 15, 1928, w ill be a llo t t e d in f u l l up to the amount o f the o ffe r in g .
About $970,000,000 o f Third L ib e rty Loan bonds are s t i l l outstand
in g and become payable on September 15, 1928.
A ls o , about $70,000,000 in
in te r e s t payments on the p u b lic dobt become payable on th at d ate.
The f i n a l redemption o f the Third L ib e rty Loan bhin^s to a c lo s e the
v ast operations begun by the Treasury in 1927, which, in the course o f
eighteen months, have re su lte d in the refunding or retirem ent o f over f iv e
b i llio n s o f L ib e rty Loan bonds accompanied by important reduction in in te r e s t
charges.
Of $5,264,000,000 o f Second and Third L ib e rty Loan bonds outstand
ing in February, 1927, a l l but $20,000,000 o f which bore a 4^ per cent rate
Ox in te r e s t , about $1,300,000,000 w ill have been r e tir e d from sin k in g fund
and su rp lu s.
The balance have been replaced by bonds bearin g 3 3/8 per cent
in te r e s t , by th r e e -fiv e year notes bearin g 3^ p er cent in t e r e s t , a l l w ith
m aturity or c a l l dates convenient fo r sin k in g fund purposes,, and by short
term c e r t i f i c a t e s , in clu d in g the issu e now o ffe r e d , a l l m aturing on
q u arterly tax payment d ates.
The te x t o f the o f f i c i a l c ir c u la r fo llo w s:
The Secretary o f the Troasury, under the au th o rity o f the Act
approved September 24, 1917, as amended, o ffe r s fo r s u b s c rip tio n , a t par
and accrued in t e r e s t , through the Federal Reserve Banks, Troasury c e r t i
f ic a t e s o f indebtedness o f S e rie s T J -1929, dated and b earin g in te r e s t
from September 15, 1928, payable Juno 15, 1929* w ith in te r e s t a t the rate
o f four and o n e -h a lf per cent per annum, payable on a semiannual b a s is .
A p p lica tio n s w ill bo rece iv ed a t the Fodoral Reserve Banks.
Bearer c e r t if i c a t e s w ill bo issu ed in denominations o f $100, $500,
$1,000, $5,000, $10,000, and $100,000.
The c e r t if i c a t e s w ill have two
in te r e s t coupons a tta ch e d , payable December 15, 1928, and Juno 15, 1929.
The c e r t i f i c a t e s o f sa id s e r ie s s h a ll be exempt, both as to p r in c ip a l
and in t e r e s t , from a l l ta x a tio n now or h e r e a fte r imposed by the United
S t a te s , any S t a te , or any o f the possessions o f the U nited S t a te s , or by
any lo c a l ta xin g a u th o r ity , except (a) e s ta te o r .in h e r ita n c e ta x e s , and
(b) graduated a d d itio n a l income ta x e s, commonly known as s u rta x e s, and
e x c e s s -p r o fits and w a r-p ro fits ta x e s , now or h o re a fte r imposed by the
U nited S ta te s , upon the income or p r o f it s o f in d iv id u a ls , p a rtn e rsh ip s,
a s s o c ia tio n s , or co rp o ratio n s.
The in te r e s t on an amount o f bonds and
c e r t if i c a t e s authorized by s a id a c t approved September 24, 1917, and
amendments th e re to , the p r in c ip a l o f which does not exceed in the aggre
gate $5,000, owned by any in d iv id u a l, p a rtn e rsh ip , a s s o c ia tio n , or
co rp o ratio n , s h a ll be exempt from the taxes provided fo r in cla u se (b)
above.
-3 Tlio c e r t if i c a t e s o f th is s e rie s w ill ho accepted a t par during
such tin e and under such ru le s and re g u la tio n s as s h a ll he pro scrib ed or
approved by the Secretary o f the Treasury, in paynent o f incone and p r o f it s
taxes payable a t the m aturity of' the c e r t ific a t e s »
The c e r t if i c a t e s o f
th is s c r ie s w ill bo accep tab le to secure d ep osits o f p u b lic moneys, but
w il l not bear the c ir c u la tio n p r iv ile g e .
The r ig h t is reserved to r e je c t ary su b scrip tio n and to a l l o t le s s
than the amount o f c e r t if i c a t e s apx>lied fo r and to c lo s e the su b scrip tio n s
a t any time w ithout n o tic e .
The Secretary o f the Treasury a ls o reserves
the r ig h t to make allotm en t in f u l l upon a p p lic a tio n s fo r sm aller amounts,
to make reduced allo tm en ts upon, or to r e je c t , a p p lic a tio n s fo r la r g e r
amounts, and to make c l a s s i f i e d allotm en ts and allotm en ts upon a graduated
s c a le ; and h is a c tio n in these resp ects w ill be f i n a l .
payment fo r which Third L ib e rty Loan
Su b scrip tio n s in
per cent bonds o f 1928 (herein
a f t e r referre d to as Third 4^*s) are te n d e re d ,w ill be a llo t t e d in f u l l
up to the amount o f the o ffe r in g .
Allotm ent n o tic e s w il l bo sent out
promptly upon a llo tm e n t, and the b a sis o f the allo tm en t w il l be p u b lic ly
announced.
Payment a t par and accrued in te r e s t fo r c e r t if i c a t e s a llo t t e d
must be made on or before September 15, 1928, or on la t e r a llo tm e n t.
A ft e r allotm ent and upon payment, Federal Reserve Banks may issu e interim
re c e ip ts pending d e liv e ry o f the d e f in it iv e c e r t i f i c a t e s .
Any q u a lifie d
dep ositary w ill be perm itted to make payment by c r e d it fo r c e r t if i c a t e s
a llo t t e d to i t fo r i t s e l f and i t s customers up to any amount fo r which
i t s h a ll be q u a lifie d in excess o f e x is tin g d e p o s its, when so n o t ifie d
■by the Fedoral Reserve Bank o f i t s d i s t r i c t .
Bonds o f the Third
s,
maturing on September 15, 1928, w i l l he accepted a t p a r, in payment fo r
any c e r t if i c a t e s o f the s e rie s now o ffe re d which s h a ll ho subscribed
fo r and a llo t t e d , w ith an adjustm ent o f accrued in t e r e s t , i f any, on the
c e r t i f i c a t e s o f the se rie s so p a id fo r .
Bonds o f the Third 4 j ! s tendered in payment fo r any c e r t if i c a t e s
o f the s e rie s now o ffe re d should bo presented when the su b scrip tio n is
tendered.
h o ld e r.
The bonds mast be d e liv e re d a t the expense and r is k o f the
Coupons dated September 15, 1928, which become payable on th at
d a te , should be detached from any bonds o f the Third
in coupon form
so tendered, and such coupons should be c o lle c te d by the hold ers th ereof
in reg u la r course.
Third 4^*s in ro g iste re d form tendered in payment
fo r c e r t if i c a t e s subscribed fo r must bo duly assign ed to ’’The Secretary
o f the Treasury fo r payment” , in accordance w ith the general re g u la tio n s
o f the Treasury Department governing such assignm ents.
P in a l in te r e s t
due September 15, 1928, on r e g is te r e d bonds o f the Third 4 j* s so
tendered w ill not be p a id by in te r e s t checks in regu lar course but w ill
be covered by payments to be made sim ultaneously w ith the d e liv e r y o f
the c e r t if i c a t e s (§r in terim re c e ip ts ) upon a llo t t e d s u b s c rip tio n s.
F a c i l i t i o s fo r tra n sp o rta tio n o f bonds by r e g is te r e d m ail insured may
be arranged between incorporated banks and tr u s t companies and the
Federal Reserve Banks, and ho ld ers may take advantage o f such arrange
ments, when a v a ila b le , u t i l i z i n g such incorporated banks and tr u s t
companies as th e ir ag en ts.
Incorporated banks and tr u s t companies
are not agents o f the U nited S ta te s under th is c ir c u la r .
-5~
As f i s c a l agents o f the U n ite d S ta te s , Federal Reserve Banks
are authorized and requested to rece iv e su b scrip tio n s and to make
allo tm en ts on the b a s is and tip to the amounts in d ic a te d by the Secre
ta ry o f the Treasury to the Federal Reserve Banks o f the re sp e ctiv e
d is tr ic ts
EOR RELEASE, MOEHUG PAPERS,
SATURDAY, September 8, 1928,
TREASURY DEPARTMENT
STATEMENT BY SECRETARY MELLON
R eferrin g to the Treasury*s curren t o ffe r in g o f 4-| per cent c e r t i f i c a t e s
o f indebtedness o f S e rie s TJ-1929, 'dated September 15, 1928, and maturing June
15, 1929, a tte n tio n i s d ire c te d to the f a c t th at the su b scrip tio n books fo r
t h is issu e may c lo s e w ith in a few days without fu r th e r n o tic e , and fo r th is
reason h o ld ers o f Third L ib e rty Loan
per cent bonds who d esire to exchange
t h e ir bonds fo r the new c e r t i f i c a t e s , as w e ll as cash su b scrib ers, should enter
th e ir su b scrip tio n s a t the e a r lie s t p o s s ib le o pportun ity.'
In view o f the f a c t
th at Third L ib e rty Loan bonds w ill mature on September 15, h o ld ers o f such bonds
may have gained the erroneous im pression th at they w ill have u n t il th a t date to
make the exchange, b u t, as above s ta te d , the su b scrip tio n books w ill be open
fo r only a lim ite d p e rio d , p o ssib ly a few days, and any a p p lic a tio n s received
a ft e r the c lo s in g o f the books w ill be rejected *
In a n tic ip a tio n o f the m aturity o f the Third L ib e r ty Loan on September 15,
1928, many h olders o f these bonds have already forwarded th e ir bonds, e ith e r
d ir e c t or through th e ir lo c a l banks, to a Eederal Reserve Bank or the Treasury
Department fo r payment on September 15.
Holders o f Third 4^* s who have already
surrendered th e ir bonds fo r payment, but who now d esire to exchange th e ir bonds
fo r the new 4^ per cent Treasury c e r t i f i c a t e s o f indebtedness, may do so pro
vided th e ir a p p lic a tio n i s received before the c lo s in g o f the su b scrip tio n books.
In such cases they should f i l e th e ir a p p lic a tio n f o r the new c e r t i f i c a t e s
through the same agency which they u t i l i z e d in surrendering th e ir Third L ib e rty
Loan bonds fo r payment, in order th at the necessary change o f tra n sa c tio n may
be made*
FOR IMMEDIATE RELEASE,
Tuesday, September 11, 1928,
Statement by Undersecretary o f the Treasury Ogden L* M i l l s ,
In t h is morning* s papers, Governor Smith accuses me o f m isrepresenting the
fa c t s as to NeY/ York S ta te fin a n ce s when I sa id , in a recent speech, th at the
huge in crease in resources due to p ro sp e rity had been ap p lied under Governor
Smith n e ith e r to ta x reduction nor to debt red u ctio n , but spen t,
I .stand by
ny statem ent.
As to m isrep resen tation , i f there i s any, i t w ill be found in the statement
issued by Governor Sm ith,
For in sta n c e , the Governor s ta te s th at "from J u l y 1 ,
1927, to J u l y 1 , 1928, the State debt was reduced by $3,742,000,,.
Any one read-*
ing these words would conclude th at the debt o f the Sth te o f New York had a c tu a lly
been reduced during th at 12 months* p e rio d , and the statement was undoubtedly in t
tended to g iv e th at in p re ssio n .
What are the fa c ts ?
During the year 1927-1928
the gross debt increased by over $18,000,000 ard the net debt by over .$15,000,000,
What Governor Smith has done is to g iv e the fig u r e o f bonds r e tir e d from the sink
ing fund as c o n s titu tin g debt retirem e n t, but he has f a i l e d to g iv e the fig u r e s
for the new bonds issu ed during the same y e a r, which v a s tly exceed in amount
those r e t ir e d .
This method o f p re se n tin g a fin a n c ia l p ic tu r e h a rd ly needs to be
c h a ra cte rize d .
What are the f a c t s on which I based ny statement th at there had been n eith er
tax redu ction nor debt reduction?
The to t a l revenues o f the S ta te of New York
increased from $76,000,000 in 1918 to $218,000,000 in 1928.
T o tal expenditures
I
~
2
-
fo r gen eral purposes
/increased year by year, except during the two years when Miller was Governor,
from $73,000,000 in 1918 to $212,000,000 in 1928*
Total taxes increased from
$69,000,000 in 1918 to $184,000,000 in 1927 (I have not as yet seen the 1928
figures)*
in increase of 166 per cent in total taxes collected would seem to
justify the statement that there had been no tax reduction, in spite of the fact
that in certain selected years a slight rebate may have bpen given on income
taxes, which is no longer true to-day.
In so far as the direct State tax is
concerned, to which Governor Smith refers, from 1918 to 1928 there was an in
crease and not a decrease*•
Turning now to the debt q u estio n , we fin d th a t the net S ta te debt in 1923,
when Smith became Governor the second tim e, was $181,000,000, or about what i t
had been in 1918*
By 1928 i t had grown to over $258,000,000*
But t h is does not t e l l the whole s to r y , fo r under Governor Sm ith*s le a d e r
ship during h is l a s t two terms o f o f f ic e $465,000,000 o f bonds have been
authorized*
Governor Smith says “ by whom?”
He cannot d is c la im r e s p o n s ib ility *
Ho went from one end o f the S ta te to the other t e l l i n g the people th a t th is
borrowing was necessary — something which events have since shown to be quite
otherwise — e x t o llin g the m erits o f borrowing as co n trasted with the pay-as-you*r
go p o lic y and r id ic u lin g the la t t e r *
This i s the record*
I t e s ta b lis h e s beyond
dispute the f a c t th a t Governor Smith i s the g r e a te s t spender and borrower the
S tate o f Hew York has ever .seen*
Wednesday, September 12,1928*
Secretary Mellon announced that the su b scrip tio n books fo r the
current o ffe r in g o f nine-months 4r% per cent Treasury c e r t if i c a t e s of
indebtedness, S e rie s TJ-1929, closed at the c lo s e o f business Tuesday,
September 1 1 th.
Su b scrip tion s received in the m ails up to 10
o»clock Wednesday morning w ill be accepted.
The o ff e r in g , v fa ich was fo r $525,000,000, or th ereab o u ts, was
p u b lic ly announced on September 7 th .
The c lo s in g of the su b scrip tio n books a p p lie s not only to cash
s u b s c rip tio n s, but also to those su b scrip tio n s in payment fo r .which
Third L ib e rty Loan 4^ per cent bonds might be tendered, and accord in gly
any su b scrip tio n s entered a ft e r the c lo s in g date w ill be r e je c te d .
The Secre ta ry fu rth e r sta te d th at w hile f in a l su b scrip tio n
fig u re s had not been received from the Fed eral Reserve B arks, pre
lim inary rep orts in d ica te th at the t o t a l su b scrip tio n s w ill aggregate
over $960,000,000*.
Of these s u b s c rip tio n s, at le a s t $150,000,000
represent su b scrip tio n s in payment fo r which Third 4fc per cent bonds
W6re tende**ed.
As p re v io u sly announced, such la t t e r su b scrip tio n s
w ill be a llo t t e d in f u l l .
The b a lan ce, or approxim ately $880,000,000,
represent cash s u b s c rip tio n s, subject to la t e r a llo tm e n t.
Allotm ents
on these cash su b scrip tio n s w ill be made at an e a rly d a te , at which
time f u l l d e t a ils as to the b a sis o f allotm ent and the f in a l amount
o f aggregate su b scrip tio n s w ill be announced*
TREASURE DEPARTMENT
FOR RELIASE, MORNING- PAPERS,
Thursday, September 13, 1928*
Secretary M ellon today announced th a t according to the f i n a l reports re
ceiv e d from the twelve Federal Reserve Banks the t o t a l su b scrip tio n s fo r the
new o ffe r in g of 4 j per cent treasu ry C e r t ific a t e s of indebtedness, S e rie s
TJ-1929, aggregate $1,019,699,800.
Of t h is amount $102,821,300 represent
su b scrip tio n s in payment fo r which Third L ib e r ty Loan 4A per cent bonds were
tendered.
The l a t t e r su b scrip tio n s have been a llo t t e d in f u l l , and a l l o t
ments on the $916,878,500 cash su b scrip tio n s were made as fo llo w s :
A ll
cash su b scrip tio n s in amounts not exceeding $10,000 fo r any one subscriber
were a llo t t e d in f u l l .
Cash su b scrip tio n s in amounts over $10,000 but not
exceeding $100,000 fo r any one subscrib er were a llo t t e d 80 per c e n t, but not
le s s than $10,000 on any one su b scrip tio n ; cash su b scrip tio n s in amount s, over $100,000 but not exceeding $500,000 fo r any one subscrib er were a llo t t e d 60
per cent but not le s s than $80,000 fo r any one subscription*
cash sub
s c r ip tio n s in amounts over $500,000 but not exceeding $1,000,000 fo r any one
subscrib er were a llo t t e d 40 per cent but not le s s than $300,00©on any one
su b scrip tio n ; and cash su b scrip tio n s in amounts over $1,000,000 were a llo t t e d
30 per cent but not le s s than $400,000 on any one su b scrip tio n .
On the above
b a s is the to t a l amount o f c e r t i f i c a t e s to be issu ed w ill aggregate approxi
mately $550,000,000.
Further d e t a ils as to su b scrip tio n s and allo tm en ts by Federal Reserve
D is t r ic t s w ill be announced w h en -final rep orts are- received from the Federal
Reserve Banks.
TREASURY EËPARTLIE1TT
FOR BiMEDIATE RELEASE
Thursday, Sop tomb or 20, 1928
Secretary M ellon today announced the d e t a il fig u r e s o f su b scrip tio n s
received and a llo t t e d fo r the o ffe r in g o f 4fy per cent Treasury c e r t if i c a t e s
o f indebtedness of S e rie s TJ-i-1929.
Cash su b scrip tio n s fo r the o ffe r in g
aggregated $916,880,500, and the to t a l o f such cash su b scrip tio n s a llo t t e d
v/as $446,462,000*.
As p re v io u sly announced the exchange su b scrip tio n s
fo r which Third L ib e rty Loan 4^ per cent bonds were tendered in payment
were a llo t t e d in f u l l and these su b scrip tio n s aggregated $103,153,900.
The su b scrip tio n s and allo tm en ts were divid ed among the several Federal
Reserve d i s t r i c t s as fo llo w s;
Federal Reserve
D is tr ic ts
T otal Exchange
Su b scrip tio n s •
R eceived.
T otal Cash
Su b scrip tion s
R eceived.
Boston
hew York
P h ild d e lp h ia
Cleveland
Richmond
A tla n ta
Chicago
S t . Louis
M inneapolis
Kansas C ity
D a lla s
San Fran cisco
Treasury
$ 5,493,600
31,560,500
4,921,700.
10,912,000
2,977,600
1,240,400
13,455,900
7,711,100
4,796,700
8,862,500
3,149,800
5,095,300
2,976,800
$ 76,499,200
287,153,100
63,045,400
59,099,000
23,949,400
47,971,300
96,126,500
30,331,100
14,311,400
22,547,800
43,338,900
152,230,500
276,900
$ 49,694,900
141,367,100
37,721,700
43,370,500
20,175,500
34,661,200
67,452,400
25,442,000
14,965,700
24,473,400
29,537,900
57,533,900
3,219,700
$103,153,900
$916,880,500
$549,615,900
T otal
Total Subs c r ip tio n s
A llo t t e d .
(Cash & Exchange
T otal Su b scrip tio n s R eceived * ♦. . . . . . . . . . . $ 1 *020,034,400
Total Su b scrip tion s A l l o t t e d . . . . . . . . . . .
549,615,900
The above fig u r e s are su b ject to s lig h t change due to subsequent ad
justm ents in exchange su b scrip tio n s.
TREASUHT DEPARTMENT
FOR RELEASE, MORNING- PAPERS,
September 27, 1928,
S e c r e t a ^ M ellon today announced th a t, in accordance with e s ta b lis h e d pro
cedure, n o tice has been given to the banks of the country, through the Federal
Reserve Banks, th at there w ill be an o ffe r in g o f Treasury s e c u r itie s e a rly in
O ctober.
This new issu e w ill conplete the program o f fin a n cin g occasioned by
the m aturity of the Third L ib e rty Loan on September 15th l a s t .
Experience
has demonstrated th at in the case o f the long-term war is s u e s , which were
widely d is tr ib u te d , maturing bonds are not a l l presented on the m aturity date
but a la rg e number are presented fo r redemption over a considerable p erio d o f
tim e.
In the case o f the Third L ib e r ty Loan bonds, $955,000,000 were out
standing on September 1 4th.
Only $475,000,000 were presented on September
15th, and up to and including- September 25th $733,000,000 had been presented.
A cco rd in gly , in order to avoid borrowing in excess o f a c tu a l needs and to
save unnecessary in te r e s t charges, the Treasury Department on September 15th,
in cpnnectioii with i t s usu al q u arterly fin a n c in g , made p ro v isio n fo r the re
demption o f such Third L ib e rty Loan bonds as might reasonably be a n tic ip a te d
would be presented fo r payment p r io r to October 1 5th.
The October issu e o f
s e c u r it ie s , which in amount w ill be s u b s ta n tia lly sm aller than the o ffe r in g
uated September 15th, i s intended to fu r n is h the necessary funds to redeem
the Third L ib e rty Loan bonds s t i l l o u tstan d in g, as w ell as to provide f o r the
fin a n c ia l needs o f the Government up to December 15th, 1928.
TREASURY DEPARTMENT
p b i ê è i â a M m m i m p a p er s,
Thursday, October 4 , 1928.
b t n
L e tte r o f Secretary M ellon in rep ly po a l e t t e r
from Senator Caraway.
Washington, D .C .,
October 2, 1928.
Dear Senator Caraway :
Your l e t t e r o f the 28th u ltim o , which appeared in the p r e s s , has
been re ce iv e d .
You ask me to t e l l you:
“ e x a ctly how many g a llo n s o f in to x ic a tin g liq u o r s you or the
company or conpanies 'in which you are in te re ste d owned when
the 18th Amendment was r a t i f i e d and the V o lste ad Act became
e ffe c t iv e and how many g a llo n s have been disposed o f s in c e ,
and what your present ownership e ith e r in person or through
companies i s . “
A1 so;
“I f you were never engaged in the liq u o r b u sin e ss, w ill
you p le a se say why you bought a d i s t i l l e r y ? Was i t your in
te n tio n to engage in th at b u sin ess, i f not why was the d is
t i l l e r y purchased?“
In so f a r as present ownership e ith e r in person or through companies i s
concerned, the answer i s th at n e ith e r today nor fo r several years have I had
any d ir e c t or in d ir e c t in te r e s t in any d i s t i l l e r y or in the manufacture o f
liq u o r or in any sto ck o f liq u o r h e ld fo r s a le .
Several y ears before the p r o h ib itio n amendment went in to e f f e c t , the
O verholt d i s t i l l e r y , in which I owned an in t e r e s t , a b so lu te ly ceased from the
manufacture o f whiskey and from doing any b u sin ess; and, before I took o ff ic e
as Secretary o f the Treasury, the e n tir e p ro p erty, re a l and p e rso n a l, was
by a l l o f the stockholders or p a r tie s in te re ste d conveyed to a tr u s t company
— 2 **•
by irrev o cab le deed as tru ste e with d ir e c tio n s to dispose o f the property
and business a t i t s d is c r e tio n (the owners r e ta in in g no d ir e c tio n or au th o rity
whatsoever in the m atter) the tru ste e to account and pay the p a r tie s in te re ste d
the net proceeds o f s a le , le s s commission and expenses*
Since th a t time
I have had no concern or connection w ith the property or business*
The
tru ste e executed the tr u s t by d isp o sin g o f the r e a l e s t a t e , stock on hand,
and other property in i t s e n tire ty *
I do not know how many g a llo n s o f
liq u o r were h e ld a t the time when the 18th Amendment and V olstead A ct
became e ffe c tiv e *
in f a c t , I have never known*
I have never had any other
in te r e s t connected with liq u o r or i t s d i s t i l l a t i o n and never a t any time
was I p e rso n a lly engaged in the d i s t i l l e r y or liq u o r business*
In answer to your fu rth e r question "why was the d i s t i l l e r y purchased",
ny rep ly i s th a t the .d i s t i l l e r y sto ck was acquired years ago ju s t as I
bought stock in any other business*
My
e n tire investment was only $2 5 ,OCX)*
I have never a t any time g iv en personal a tte n tio n to the Company^ bu sin ess;
in f a c t , have devoted more tim e, since I have been Secretary o f the Treasury,
rep ly in g to in q u ir ie s , as now, than in a l l the y ea rs o f the business*
If I
had bought $25,000 o f stock in a tobacco company, would i t be sa id th a t I
was a tob accon ist?
This m atter was e x p lo ite d f i r s t when my name was under co n sid eratio n
by P resid en t Harding fo r appointment to the Treasury, and then p u b lic ly ex
plained*
I t was rev iv ed and r e ite r a te d in the Senate and House; i t was re
vived again by Governor Pinchot o f Pennsylvania; and in the Coolidge campaign;
then revived fo r the present campaign*
However, the a g ita tio n w ill cease on
November sixth *
Yours very t r u ly ,
Honorable T* H. Caraway,
U nited S ta te s Senate.
A* W* Mellon*
TREASURÏ DEPARTMENT
POR IMMEDIATE RELEASE,
Thursday, October 4 , 1928
Under a R esolution o f Congress approved May 29, 1928, the Secretary
o f the Treasury was authorized and d ire c te d to cause to he stru ck and
presented to Thomas A . Edison a g o ld medal, with s u ita b le emblems and
in s c r ip tio n s , in commemoration o f the achievements o f Mr.. Edison '‘in
illu m in a tin g the path o f progress through the development and a p p lic a tio n
o f in ven tio n s th at have re v o lu tio n ize d c i v i l i z a t i o n in the la s t ce n tu ry ".
Several designs were submitted to the Treasury fo r co n sid e ra tio n .
Secretary M ellon has approved the d esign executed by Mr. John R. Sinnock
o f 2022 Spring Carden S t r e e t , P h ila d e lp h ia , P en n sylvan ia, and such
approval is concurred in by the Commission, o f Pine A r t s .
. The medal is
now being prepared in the U nited S ta te s Mint at P h ila d e lp h ia .
Formal p re se n tatio n of the medal w ill be made in Mr. Edison1s
la b o ra to ry , West Orange, New Je r s e y , on Saturday evening, October 2 0 th.
Preceding the ceremonies in West Orange, a short address Y/ill be broad
c a s t by P residen t Coolidge over a nation-w ide hookup of radio s ta t io n s ,
co n trib u ted by the Ceneral E le c t r ic Conpany, and the program w ill then be
tra n sfe rre d to the Edison lab o ra to ry a t West Orange from which the
remainder o f the program w ill be b ro ad cast.
P resen tatio n o f the medal
w ill be made by Secretary M ellon, and the ceremony in West Orange w ill
a lso in clude an address by a person o f n a tio n a l prominence.
The
ceremonies w ill probably occupy the p erio d of one hour, beginning a t 9 P.M .
E astern Standard time
TREASURY DEPARTMENT
FOR RELEASE, MORNING PAPERS,
Saturday, October 6, 1928*
In view o f the a ctio n taken yesterday by the Board o f Estim ate and Apportion
ment o f New York C it y , as reported in the p r e s s , and the statement a ttr ib u te d to
Mayor W alker, the Secretary o f the Treasury makes p u b lic the correspondence between
Mayor Walker and the Treasury Department in r e la tio n to a new United S ta te s Court
gouse and the removal o f the Eodoral B u ild in g from i t s present s it e ;
MSeptember 4 , 1928,
Honorable Andrew W. M ellon,
Secretary o f the Treasury,
Washington, D. C* *
My dear Mr* S e cre ta ry :
In reply to your l e t t e r o f August 24, 1928, regarding the s it e fo r
a new b u ild in g f o r the U nited S ta te s Courts in New York C ity , you i n
quire i f The C ity o f New York w ill s e l l to the U nited S ta te s a s it e in
i t s c iv ic center and *at what p rice ?*
On the 15th of August, in an execu tive sessio n o f the Board o f
Estim ate and Apportionment, I again asked fo r advice on the su b je ct o f
tra n s fe r r in g the necessary s it e in our c iv ic cen ter fo r the purpose o f
co n stru ctin g a new Federal courts b u ild in g*
The members o f the board
on th a t occasion unanimously r e ite r a te d th e ir o p in io n , which I had
p re v io u sly brought to you in Washington, namely, th at they would indeed
be very g la d on b e h a lf o f the c it y to g iv e to the Federal government
the d esired s it e fo r a new court b u ild in g *
F a rth e r, the members o f the
board stated they would require but one c o n sid e ra tio n , the e n tire re
moval from C ity H a ll Park in the C ity o f New York o f the present Post
O ffic e and Federal courts b u ild in g *
The s ite proposed i s adjacen t
to the State and C ity co urts and i s valued a t n ea rly two and one-quarter
m illio n d o lla r s .
This opinion was f o r t i f i e d by innumerable communications from
various a s s o c ia tio n s and c it iz e n s asking fo r the dem olition o f the
present Post O ffic e b u ild in g .
I t i s generally f e l t th at the b u ild in g
has become an eyesore and charges are f r e e ly made by members of the bar
and c it iz e n s who are compelled to use i t that i t i s in sa n ita ry and, to
say the l e a s t , u n su ited fo r i t s present purposes*
There i s an over
whelming demand in th is c it y fo r the removal o f th is u n s ig h tly and
obsolete structure*
«I !
.áíl
-
2
-
We want to a s s is t and, in f a c t , expedite the m atter "by g iv in g
the s ite to the Federal government without any cost*
The c i t y might
s e l l t h is property fo r p riv a te development and o b ta in , a t le a s t the
v a lu a tio n mentioned, or might a v a il i t s e l f o f your o ffe r to purchase
i t , hut i t p re fe rs to o ffe r the ground to the Federal a u th o r itie s
f r e e , in the b e li e f th at in turn the government would provide a new
branch p o st o f f ic e fo r the convenience o f the people o f t h is c ity *
Very tr u ly yours,
(Signed)
James J * Walker,
Mayor.»
»September 12, 1928*
My
dear Mr* Mayor;
I have yours o f September 4 , 1928, in answer to mine o f March
22, 1928, in which I p o in ted out th a t the need o f the Federal Courts
in Hew York C ity fo r adequate quarters i s p re ss in g , and in qu ired i f
the C ity o f Hew York would s e l l to the U nited S ta te s a s it e in i t s
c iv ic c e n te r, and at what p rice *
In your answer you say th at the
members o f the Board o f Estim ate and Apportionment are w illin g to
s e l l the d esired s it e fo r a new court house to the Federal G-overnment, but only on co n d itio n that the Federal G-overnment abandon the
present s it e o f the Post O ffic e B u ild in g fo r a new s ite *
The s itu a tio n appears to be as fo llo w s; There i s urgent need
fo r a new b u ild in g fo r the U nited S ta te s Courts, and both thé Federal
G-overnment and the C ity of Hew York are agreed th a t a d esira b le s it e
fo r such a b u ild in g can be found in the s o -c a lle d c iv ic center*
The
C ity o f Hew York, however, d e s ire s the Federal G-overnment to abandon
the present Post O ffic e B u ild in g fo r some other s u ita b le s ite *
This
the Post O ffic e Department i s qu ite w illin g to agree t o , p rovid in g a
s it e eq u a lly su ita b le and adequate fo r the e f f i c i e n t carry in g on o f the
p o s ta l b u sin e ss, so v i t a l to the in te r e s ts o f the People o f the C it y ,
can be found, and i s o ffe re d by the c it y in exchange fo r the present
post o ff ic e b u ild in g on an eq u itab le b a sis*
- 3 -
To dater the c it y a u th o r itie s have not been able to suggest such a s i t e ,
nor have the independent e f f o r t s o f the p o s ta l a u th o r itie s succeeded in
lo c a tin g one*
The b u ild in g o f a new U nited S ta te s Court b u ild in g and the r e lo c a
tio n o f the present Post O ffic e are two separate and independent propo
s itio n s • There i s no reason why the carry in g out o f the f i r s t should
be made dependent upon the immediate carry in g out o f the second»
It
i s adm itted th at the need fo r a b u ild in g fo r the U nited S ta te s Courts
i s immediate and pressing»
The s it e fo r such a b u ild in g i s a v a ila b le »
I f the C ity i s w illin g to s e l l the s i t e to the Federal Government, the
program can be submitted to the Cougress at the coming session and neces
sary ap propriation s obtained»
I t i s not apparent how e ith e r the C ity
or the Federal Government can b e n e fit by d elayin g the carryin g out o f
such a program u n t il i t has been found p o s sib le to fin d a s u ita b le
s it e fo r a Post O ff ic e building*I tr u s t that in the li g h t o f these circum stances the Board o f
Estim ate ana Apportionment w ill recon sid er i t s d e c isio n o f August 15th
and w ill l e t me know at what p r ic e the C ity o f New York w il l s e l l to
the Feaeral Government a s it e in i t s s o -c a lle d c i v i c cen ter fo r the
co n stru ctio n o f a U nited S ta te s Courts B uilding»
Very tr u ly yours»
(Signed)
A . W. Mellon
Secretary o f the Treasury*
Honorable James J . Walker»
Mayor o f the C ity o f Hew York,
Hew York, Hew York»**
TREASURY DEPARTMENT
FOR RELEASE, ^ORNMGIPAlPERS
Mondajl, *c|clib e r 8 , 1928 •
STATEMENT BY SECRETARY MELLON
Th© Treasury is today o ffe r in g fo r su b s c rip tio n , a t par
and accrued in t e r e s t , through the Federal Reserve Banks, an issu®
o f eleven months 4-J per cent Treasury c e r t if i c a t e s o f indebtedness
o f S eries TS-1929, dated and bearin g in te r e s t from October 15, 1928,
and maturing September 15, 1929.
The amount o f the o ffe r in g is
$300,000,000, or thereabouts.
A p p lica tio n s w ill be received a t the Federal Reserve Banks.
Bearer c e r t if i c a t e s w i l l be issued in denominations o f $500,
$1,000, $5,000, $10,000, and $100,000.
The c e r t if i c a t e s w i l l have
two in te r e s t coupons attached payable March 15 and September 15, 1929.
About $150,000,000 o f Third L ib e rty Loan bonds, which became
payable on September 15, 1928, are s t i l l o utstan d in g.
A ls o , about
$150,000,000 in in te r e s t payments on the p u b lic debt become payable
on October 15, 1928.
This is s u e , together w ith cash now on hand,
w i l l provide fo r the Treasury» s requirements up to December 15, 1928.
The tex^t o f the o f f i c i a l c ir c u la r follow s»
-
2-
The Secretary o f the Treasury, under the a u th o rity o f the
A ct approved September 24, 1917, as amended, o ffe r s fo r su b sc rip tio n ,
a t par and accrued in t e r e s t , through the Federal Reserve Banks, Treasury
c e r t if i c a t e s o f indebtedness o f S e rie s TS-1929, dated and b earin g in
te r e s t from October 15, 1928, payable September 15, 1929, w ith in te r e s t
a t the ra te o f fou r and th ree-q u arters per cent per annum, payable on
a semiannual b a s is .
A p p lica tio n s w il l be received a t the Federal Reserve Banks.
Bearer c e r t if i c a t e s w i l l be issued in denominations o f $500,
$1,000, $5,000, $10,000, and $100,000.
The c e r t if i c a t e s w i l l have two
in te r e s t coupons a tta ch ed , payable March 15, 1929, and September 15,
1929.
The c e r t if i c a t e s o f s a id s e r ie s s h a ll be exempt, both as to
p r in c ip a l and in t e r e s t , from a l l ta x a tio n now or h e re a fte r imposed by
the U nited S t a te s , any S ta te , or any o f the possession s o f the U nited
S ta te s , or by any lo c a l ta x in g a u th o r ity , except (a) e s ta te or in
h e rita n ce ta x e s , and (b) graduated a d d itio n a l income ta x e s, commonly
known as su rta x e s, and e x c e s s -p r o fits and w a r-p ro fits ta x e s , now or
h e re a fte r imposed by the U nited S t a te s , upon the income or p r o f it s o f
in d iv id u a ls , p a rtn e rsh ip s, a s s o c ia tio n s , or co rp o ratio n s.
The in te r e s t
on an amount o f bonds and c e r t if i c a t e s au th orized tiy sa id a c t approved
September 24, 1917, and amendments th e re to , the p r in c ip a l o f which
does not exceed in the aggregate $5,000, owned by any in d iv id u a l,
p a rtn e rsh ip , a s s o c ia tio n , or co rp o ratio n , s h a ll be exempt from the taxes
provided fo r in clau se (b) above.
-3 Tlie c e r t if i c a t e s o f t h is s e r ie s w i l l he accepted, a t par during
such time and under such ru le s and re g u la tio n s as s h a ll he p rescrib ed
or approved by tho Secretary o f the Treasury, in payment o f income and
p r o fit s taxes payable a t the m aturity o f the c e r t i f i c a t e s .
The c e r t i
f ic a t e s o f th is se rie s w ill be acceptable to secure deposits o f p u b lic
moneys, but w ill not bear tho c ir c u la tio n p r iv ile g e *
The r ig h t is reserved to r e je c t any su b scrip tio n and to a l l o t
le s s than the amount o f c e r t i f i c a t e s a p p lie d fo r and to c lo s e the sub
s crip tio n s a t any time without n o tic e .
The Secretary o f the Treasury
a ls o reserves the rig h t to make allotm ent in f u l l -upon a p p lic a tio n s fo r
sm aller amounts, and to make reduced allo tm en ts upon, or to r e je c t , ap
p lic a tio n s fo r la r g e r amounts, and to make c l a s s i f i e d allo tm en ts and
allo tm en ts upon a graduated s c a le ; and h is a c tio n in these respects w ill
be f i n a l .
Allotm ent n o tice s w i l l be sent out promptly upon a llo tm en t,
and the b a s is o f the allotm ent w ill be p u b lic ly announced.
Payment a t par and accrued in te r e s t fo r c e r t if i c a t e s a llo t t e d
must be made on or before October 15, 1928, or on la t e r a llo tm e n t.
A fte r
allotm en t and upon payment, Federal Reserve Banks may issu e in terim
re c e ip ts pending d e liv e ry o f the d e fin it iv e c e r t i f i c a t e s .
Any q u a lifie d
depositary w ill be perm itted to make payment by J r a l i t fo r c e r t if i c a t e s
a llo t t e d to i t fo r i t s e l f and i t s customers up to any amount fo r which
i t s n a il be q u a lifie d in excess o f e x is tin g d e p o s its, when so n o tifie d
by the Federal Reserve Bank o f i t s d i s t r i c t .
As f i s c a l agents o f the U nited S t a te s , Federal Reserve Banks
I || | .
;
!
I
-4~
are authorized and requested to receive su b scrip tio n s and to make
allo tm en ts on the b a s is and up to the amounts in d ica te d by the Secretary
o f the Treasury to tho* Federal Reserve Banks o f the re sp e ctiv e d is t r ic t s *
i
TREASURY DEPART!,CERT
EOR IMMEDIATE RELEASE,
Thursday, October 11, 1928
Secretary M ellon announced th a t su b scrip tio n s fo r the issue
o f Treasury c e r t if i c a t e s of indebtedness, dated October 15, 1928,
S e rie s TSr»1929, 4 j per c e n t, maturing September 15, 1929, clo sed a t
the clo se o f business on October 9 th , 1928#
The rep orts received
from the twelve Federal Reserve Banks show that fo r the o ffe r in g ,
y/hich was fo r $300,000,000, or thereabouts, t o t a l su b scrip tio n s
aggregate some $838,000,000,
A llotm ents on su b scrip tio n s were made as fo llo w s:
Su b scrip tion s
in amounts not exceeding $1,000 were a llo t t e d in f u l l ; su b scrip tio n s in
amounts over $1,000 but not exceeding $10,000 were a llo t t e d 80 per c e n t,
but not le s s than $1,000 on ary one su b scrip tio n ; su b scrip tio n s in amounts
over $10,000 but not exceeding $50,000 were a llo t t e d 70 per c e n t, but not
le s s than $8,000 on any one su b scrip tio n ; su b scrip tio n s in amounts over
$50,000 but not exceeding $500,000 were a llo t t e d 50 per c e n t, but not le s s
th an $35,000 on any one su b scrip tio n ; su b scrip tio n s in amounts over
$500,000 but not exceeding $1,000,000 were a llo t t e d 30 per c e n t, but not
le s s than $250,000 on any one su b scrip tio n ; and su b scrip tio n s in amounts
over $1,000,000 were a llo t t e d 20 per c e n t, but not le s s than $300,000 on
any one su b scrip tio n .
Further d e t a ils as to su b scrip tio n s and allo tm en ts w ill be announced
when f i n a l reports are received from the Federal Reserve Banks.
%
'
M 311S •I■/
1REASUEST DEPARTMENT
FOR RELEASE, MORNING- PAPERS,
October 12, 1928, or when
d e liv e r e d .
Speech o f
Honorable A* W. Mellon
Secretary o f the Treasury,
from S ta tio n WRC,
Washington,
October 11, 1928.
1
Republ ican Accorrpl ishments
"
In the f in a l a n a ly s is , there i s only one issu e in th is campaign.
That i s
whether the lead ersh ip o ffe re d "by the Republican or by the Democratic Party is
b e tte r q u a lifie d to assume the burden o f carryin g on the Government and o f
solvin g the problems which w ill a r is e in the next fo u r y e a r s.
That i s the
real issu e to be decided on November 6 .
The Democratic candidate has told you what he proposes to do.
The Republ
lican candidate, Mr. Hoover, is in the fortunate position of being able to tell
you not only what he will do but what he and the Administration, of which he
He offers you an unparalleled
has been an irportant part, have already done.
record of constructive achievement; and, on that record, he and the Republican
Party ask for your continued confidence and gnippnrtf.-— --- ' "
What has th at record b e e n rt^ ^ ^ In th e f i r s t place», frt hsis Vedn & c o ip le te
\
\
_ r* ■ D
-rJlDV
H
M
\
\
fulfillment of the promise whi<|h t&ieL l^publican Party made that tme Government
\* v
t r
\ .
should be administered economically and in accordfWitlh s^c4p¥ed business
\
a q q
p r in c ip le s , and th at the a f f a i r s o^jtiLf
Fr
Y E
™
'shou ld be
T
.on-a' sound b a s is ,
so th at confidence might retunnWnd.,vJ^^-«i^fiS ?rw p rogress might be resumed
a fte r the lon g in te r v a l o f the war#
That the A d m in istration has made good i t s promise i s best a tte s te d by the
fa c t th a t today the fin a n ce s both of the Government and o f the country are in
a sound condition#
Under the present A dm inistration taxes have been m a te ria lly
lo?/ered on fou r o cca sio n s.
Expenditures have been cut#
The p u b lic debt has
been reduced so th at i t i s no lon ger a heavy burden on the taxp ayers.
The na
tio n has been given the b e n e fit o f a p r o te c tiv e t a r i f f ; and during the e n tire
period the country has moved s te a d ily forw ard, g e ttin g fu rth e r and fu r th e r
away from the u n s e ttle d co n d itio n s which p re v a ile d in 1921, when the present
Republican A d m in istration took o ffic e #
- 2 -
At that time the whole economic structure seemed in need of readjust
ment,
How, after nearly eight years, it is possible to judge of what has
been accomplished.
Hot only has the nation passed through this difficult
period of post-war readjustment, but during the last three or four years
it has enjoyed one of the most prosperous periodsin its history.
In no other nation and at no other time in the history of the world
have so many people enjoyed such a high degree of prosperity or maintained
a standard of living comparable to that which prevails throughout this
countly today.
There are, of course, some localities and some industries,
just as there are always some individuals, who from time to time do not
share equally in the prevailing prosperity.
The task of government should
be to lessen that inequality wherever possible; and this the present Ad
ministration has tried to do.
The test, however, of whether a nation is
prosperous or not depends upon whether it can be shown that the average pan
and woman, or the majority of them, share in that prosperity and are able
not merely to maintain but to raise their standard of living.
In the United States today conditions as a whole meet that test.
Our
highways are crowded with automobiles, and statistics show that the number of
passenger.car registrations have mare than doubled in the last seven years.
Savings deposits have nearly doubled; and bank deposits have increased from
- 3 -
39 "billion dollars in 1921 to 56 billion in 1927.
Our foreign trade now
amounts to nearly 9 billions a year, and each year since 1924 we have invested
a billion dollars in foreign securities#
In 1921, 6g- million individuals reported for Federal tax purposes a total
income of 19jy billion dollars.
In 1927, 4 million individuals reported an
income of 22|r billion dollars.
During this period, as a result of the Admin-*
istration*s tax reduction program, more than 2g- million individuals v/ero re
lieved entirely of all liability for Federal income taxes; and yet, due to in
creased prosperity, the income reported by the decreased number of taxpayers
was 3 billion dollars more than was reported in 1921.
Furthermore, the Pre—
liminaiy Statistics of Income for the year 1927, which are now being conpiled
by the Treasury, show that in the year 1927 there was a substantial movement
of taxpayers from the lower grades into the higher ones, a thing which could
not have occurred if there had not been an increasing volume of earning during
the year, as well as a fairly uniform and widespread prosperity.
The Administrations tax policy has been a material factor in this situa
tion.
of taxes.
Within a period of seven years there have been four sweeping reductions
In 1921, 1924, 1926, and 1928 Congress passed revenue bills at
the strang urging of the Administration reducing taxes about 1800 million
dollars a year or about 5 million dollars a day as compared with what would
have been collected under the 1918 law.
Back in 1921, although the war had
been over nearly three years, taxes were levied on many commodities such as
railroad and Pullman tickets, victrolas, pianos, automobiles, candy, chewinggum, soft drinks, ice cream, and many other things besides.
these things are taxed.
Today none of
When the present Administration took office in 1921,_
a married man with a salary of $250* a month was paying an income tax of $40;
today he pays nothing.
A man earning $4000 a year was paying $80; today he
pays $5.63, and so on up to $10,000, on which the tax in 1921 was $590, v/hereas
- 4 -
today it is less than one-fifth of that amount«
These are examples of the very real "benefits which the taxpayers enjoy "by
reason of the Administration* s tax policy.
ministration has "been able to accomplish.
But this is not all that the Ad
It has also made use of the oppor
tunity offered by tax réduction to effect that reform of the tax system which
has been one of the objectives of the present Administration.
When the Admin
istration came in, it found an elaborate war-time system with numerous and
heavy taxes on many commodities and activities*
were discouraged.
Enterprise and initiative
Today there is an internal revenue system of few and
relatively light taxes.
Moderate rates have been substituted for excessive
ones and, true to sound tax principles, have proved more productive in revenue
than were the higher rates.
By raising exemptions and credits, the small
taxpayer has been almost entirely relieved of the burden of Federal taxes.
Productive business, by being freed of oppressive rates, has been taken out of
a straitjacket and permitted to expand in an orderly manner, unhampered by
artificial restrictions of the tax laws.
Capital is no longer driven into
such channels as tax-exempt securities in order to avoid payment of the tax.
As a consequence business has expanded; the national income has increased; and
adequate revenues for the Government have been realized, even with lower rates
and fewer taxpayers.
Not only have taxes been lowered but great reductions have been made in
expenditures*
One of the first acts of the new Administration was the estab
lishment of the Budget System, under which the Governments spending departments
have been organized and the budget has been reduced by nearly 1900 million
dollars as compared with the last fiscal year of the preceding Democratic
Administration*
At the same time the public debt has been reduced over six billion dollars,
That debt is represented principally by war loans, which the Government borrowed
~ 5 from the people of the country in order to carry on the war.
These loans mast
"be repaid; and it is the part of wisdom to pay them off as quickly as possible,
for the interest charges constitute a heavy burden on the taxpayers.
During
the last eight years the average interest rate on the entire debt has been
materially lowered and over eleven billion dollars of securities have been paid
off or exchanged for securities bearing lower rates of interest*
All of this
has resulted in a saving in interest payments of not less than 268 million
dollars a year.
Another important policy of the Administration has been to provide adequate
credit for agriculture.
Through the War Finance Corporation* the Intermediate
Credit Banks, and the banks of the Farm Loan System, ample credit has been pro
vided on easy terms and at low interest rates.
This is one of the vital
elements in the farm problem and places at the farmer* s disposal adequate banking
facilities.
It does not, of course, solve those other problems of organization,
distribution, and disposal of the* surplus, which are responsible for so many of
the farmer* s present troubles.
These problems mast and will be solved in other
ways.
The disposal of the farm surplus is closely bound up with conditions abroad.
American agriculture was greatly expanded during the war to meet the new demands
made by Europe, and since the war unsettled conditions there have had their ef
fect on this country.
One of the elements of uncertainty in the situation was
the war debts owed to this country by foreign governments.
So long as they
remained unsettled they constituted an unknown quantity in the balance sheets
of both debtor and creditor governments.
Currencies could not be stabilized;
credit was affected; and extension of trade among the various countries was
seriously retarded.
In order to put an end to such uncertainty, this Government
proceeded at once to a settlement of the debts owed to this country by foreign
nations and reached agreements with all the principal debtor nations for amounts
sxceeding eleven billion dollars.
Today we are receiving payments regularly on
- 6 account of principal and interest and these payments are "being applied in re
daction of oar debt*
. There are three other things which should he mentioned in connection with
the Government's financial policies*
The war claims against Germany and
Austria have been settled in a way satisf actory to those nations as well as to
ourselves; the loons made to our railroads during the war have been nearly all
repaid; and the charters of the Federal Reserve Banks have been renewed, thus
insuring a continuation of the banking system under which we were able to
finance the war and to pass safely through the reconstruction period without
any sharp and disastrous money panics such as visited the country after the
Civil and Spanish Wars#
X would like to make it clear that in the renewal of the charters of the
Federal Reserve Banks, the Administration had the cooperation and support of
Democrats as well as Republicans in Congress#
There is no desire on the part
of the Administration to claim exclusive credit for a measure which was and
should have been non-partisan in its character and supported by thinking men in
both parties#
What the Administration does claim, however, is that it was on
its initiative and at its strong and insistent urging that such measures as the
renewal of the bank charters were enacted into law, and that these measures form
a part of the general policy which the Administration has undertaken to carry out
and for which it is responsible#
Such is the record of the Administration as regards its financial policies#
It is a constructive record and one that speaks for itself#
And yet Governor
Smith and other Democratic speakers not only seek to withhold credit from the
Coolidge Administration for its undisputed achievements, such as reducing debts,
taxes, and expenditures, but apparently do not approve that record#
They are
careful not to specify in what respect they would change it but content them
selves with the charge that nearly eight years of good government and mounting
prosperity do not, in their opinion, constitute a record of "constractive11
achievement#
- 7■ «,
I submit that it is a constructive record in the host sense of the word.
What more constructive service can a political party render than to give a
sound Administration, under4 which economy is substituted for extravagance in
government and a feeling of confidence for the confusion which formerly existed
throughout the .country?
Construction does not consist, as the opponents of
the Administration seem to think, in following every new and untried social
and economic theory that may he presented.
The extent to which the present Administration has succeeded in carrying
out its general policy is an instance of what can he acconplished hy an Adminis
tration which adopts a definite policy and adheres to it until it has been put
into effect.
Success, however, can not he achieved and was not achieved in
this instance without a fight.
Take the question of reduction of taxes and
reform of the tax system, or reduction of the public debt, or the settlement of
the foreign debts.
All of these measures helped in building up that feeling
of confidence which has been no small factor in promoting prosperity during the
last three or four years.
general policy.
AL1 were an essential part of the Administrations
Looking at them in retrospect each one of these steps would
seem not only simple and logical but inevitable; and yet it would be the
greatest mistake to.assume that these results came about without effort.
did not just happen.
They
On the contrary, the Administration was opposed at each
step of the way in trying to carry out these policies.
The fight for a sound
tax system is so recent that it is unnecessary for me to call it to your atten
tion.
The same thing can be said of the debt settlements.
There was
violent opposition in Congress to the settlements recommended by the Debt Com
mission; and, even in the case of debt reduction, there were those who would
have attacked the integrity of the Sinking Fund and would have reduced the
amount paid each year into the fund, regardless of the increased cost to the
taxpayers of debt payments long deferred.
- 8 -
In these, and in other matters, the Administration claims to have done
only what seemed to he the sound and sensible thing to do under the circum
stances.
It has indulged in no unsound experiments nor has it sought to bring
about the millennium by committing the country to financial heresies.
On the
contrary, the men in charge have tried to conduct the public business on the
same sound business principles which they would have applied to their own affairs.
In doing this, the Republican Party has given a notable instance of plat
form promises which have been carried out.
Under the leadership of President
Ooolidge, it has proved itself a party of constructive ability.
In Mr. Hoover,
it offers to the country an able and experienced leader, who will carry on the
work of the present Administration.
After a long and successful business
career, he has held many public and official positions of the greatest responsi
bility.
He has proved himself a great organizer, a far-seeing and resourceful
executive, and has discharged every duty in a way to merit the highest praise
and admiration.
Based on nearly eight years of close association with him, I
am convinced that he will give the nation a sound and successful administration
of the government and that he is supremely well qualified to deal with those
great economic problems that influence so directly and to such a very large ex
tent the prosperity of the country and the comfort, welfare and happiness of
the people.
TREASURY DEPARTMENT
FOR IMMEDIATE RELEASE,
MONDAY, October 15, 1928
S e cre ta iy Mellon today announced that the to t a l amount o f su b scrip tio n s
received f o r the issu e o f 4 f per cent Treasury c e r t i f i c a t e s of indebtedness,
S e rie s TS—1929, dated October 15, 1928, maturing September 15, 1929, aggre
gated $838,700,000, and th at the t o t a l o f su b scrip tio n s a llo t t e d was
$308,807,500.
Su b scrip tio n s in amounts not exceeding $1000 were a llo t t e d
in f u l l , while allo tm en ts on su b scrip tio n s in amounts over $1000 were made
on a graduated s c a le .
The su b scrip tio n s and allo tm en ts were d ivid ed among the several Federal
reserve d i s t r i c t s as fo llo w s;
Federal Reserve
D is t r i c t
T o tal Subscrip
tio n s Received:
T o tal Subscrip
tio n s A llo t t e d ;
Boston
$
$
New York
61,512,500
23,716,500
319,928,000
83,797,000
P h ila d e lp h ia
76,092,500
29,700,000
Clevelan d
57,601,500
24,898,500
Richmond
34,479,500
17,568,500
A tla n ta
42,662,500
23,356,000
Chicago
70,027,000
32,111,500
S t , Lo u is
24,233,000
11,888,000
M inneapolis
y , 11,077,500
6,834*500
Kansas C ity
27,838,500
13,020,500
D a lla s
38,174,000
20,306,000
San Fran cisco
74,637,500
21,299,000
436,000
311,500
Treasury
T otals
. . . ....
$308,807,500
FOR IMMEDIATE RELEASE,
WEDNESDAY, OCTOBER 17, 1928
TREASURY DEPARTMENT
ADDRESS DELIVERED BY
HONORABLE HENRY HERRICK BOND
ASSISTANT SECRETARY OF THE TREASURY
AT THE
ANNUAL MEETING
OF THE
ASSOCIATED INDUSTRIES OF MASSACHUSETTS
10 A.M . , BOSTON, MASSACHUSETTS, OCTOBER 17, 1928.
Note:
For f u l l te x t o f speech see Su bject F i l e ;
Taxation
WASHINGTON, October 17, 1928,
FOR RELEASE, MORNING PAPERS,
Thursday, October 18, 1928*
TREASURY DEPARTMENT
STATEMENT BY THE SECRETARY.
Under ordinary circum stances I would not th in k i t worth w hile to
answer a purely p o l i t i c a l speech.
But in the address d e liv e re d a t
S e d a lia , M isso u ri, l a s t n ig h t, by the Democratic candidate f o r the
P resid en cy , he undertook to ch a lle n g e ny good f a i t h and to accuse me o f
p re se n tin g a f a ls e p ic tu r e to the n a tio n .
He included in th is charge
the D ire cto r o f the Bureau o f the Budget and the Undersecretary o f the
Treasury.
In other words, Governor Smith accuses the fin a n c ia l o ffic e r s
o f the Government o f carryin g on a d e lib e ra te campaign of m isrepresenta
tio n intended to conceal the true p ic tu r e o f the n atio n *s fin a n c e s .
w ill not do.
This
Before a resp o n sib le man makes such a charge he should
have a thorough and intiifiate knowledge of a l l the f a c t s , and be ab le to
support i t with c le a r and convincing p r o o f.
Now, perhaps the most
accu rate statement in Governor Smith* s e n tire speech i s the one in which
he said th at the f i s c a l reports o f the Federal fin a n ce s were a Chinese
puzzle to him .
H is whole address e x h ib its the most s u p e r fic ia l knowledge
o f what has a c t u a lly taken p la c e , and in c it in g fig u r e s he has been
g u ilt y of what even the most charitably-m inded would have to describe as
Hin accurac ie s ” •
Let me begin by co rre ctin g Governor Smith*.s conception o f what th is
A d m in istration understands by econony in government.
Econon$ i s not ju s t
sav in g, but wise spending; the e lim in a tio n of waste; the promotion o f
e ffic ie n c y and b u sin e ss lik e methods; the b u ild in g up o f a sense o f
r e s p o n s ib ility to the taxpayer on the p a rt o f a l l p u b lic servan ts; the
c a r e fu l management o f the Government*s fin a n c e s , as ex e m p lifie d , fo r
in sta n c e , by a p o lic y o f steady debt reduction w ith consequent r e l i e f
from the heavy burden o f in te r e s t charges*
Under such a d e f in it io n ,
expenditures might a c t u a lly in crea se from year to year and y e t the n atio n
receive an economical and b u sin e ss lik e ad m in istratio n o f i t s p u b lic
a f f a ir s *
I f Governor Smith understood the meaning o f economy in government
in t h is sense, he would not p o in t the fin g e r o f scorn and r id ic u le at the
item s o f minor savings e ffe c te d by in d iv id u a ls h o ld in g subordinate p o si
tio n s in the Federal Government*
For in sta n c e , he r id ic u le d the saving
o f $14 by the American Consul a t Curacao*
I t might have occurred to
the Governor th at the o p p o rtu n ities fo r saving were probably lim ite d
in t h is small o f f i c e and th a t the $14 represented a l l th at th a t par
t i c u l a r in d iv id u a l could save by the proper ad m in istratio n o f h is o ffic e *
Governor Smith th in k s th at the savin gs e ffe c te d by another o f f i c e r o f the
Government by tu rn in g out l ig h t s when they were not needed is f i t only
f o r comedy and lau gh ter*
Doesn*t he r e a liz e th at these examples o f minor
savings e ffe c te d by people h o ld in g subordinate p o s itio n s , sometimes
in a d is ta n t p a rt o f the world, are simply p ro o f th at the example set
by the Presid en t a t the top has reached down u n t il i t has permeated the
whole C i v i l Service and re v o lu tio n iz e d th e ir a ttitu d e toward the ex
penditure o f the p u b lic funds*
I t i s the b e st example o f the h ig h morale
th a t has "been b u il t up under P resid en t Coolidge* s le a d e rsh ip , and nothin
th a t I know o f i s more conducive to the d e stru c tio n o f th at morale than
to have a candidate fo r the presidency o f the U nited S tate s ho ld up to
r id ic u le and contempt the e f f o r t s o f p u b lic servants to save the money
o f the taxpayers«»
Governor Smith sought to e s ta b lis h h is case by claim ing that the
redu ction in expenditures e ffe c te d since 1921 was not due to economy
and good a d m in istra tio n , but to the autom atic d em o b ilization o f the
war-time machine*
The trouble w ith th at contention is th at the war
had been over fo r 2-J- years when the Hepublican A dm inistration took
co n tro l o f the Government in March, 1921»
I f these savings were
in e v ita b le as Governor Smith would have us b e lie v e , why hadn* t they
alrea d y been more la r g e ly
e ffe c te d ?
The Governor s ta te s th at the
war-time expenditures dropped g ra d u a lly during 1921, 1922, and 1923*
The f a c t i s th a t in the f i r s t year in which i t was e sta b lish e d the
Budget Bureau succeeded in paring and pruning c o s ts th at had alread y
a c t u a lly been appropriated fo r the f i s c a l year 1922 to the extent of
$755,000,000»
There was nothing very grad u al, autom atic, or in
e v ita b le about t h a t .
Something ev id e n tly had taken p la ce other
than simply an ad d itio n o f twelve months to the post-w ar p e rio d .
What had taken p la c e was th at a new A dm in istration had come in ; the
Budget System had been e s ta b lis h e d , and fo r the f i r s t time the
Government found i t s e l f equipped w ith an agency fo r carry in g out
a system atic p o lic y o f retrenchment and fo r a tta c k in g the problem
o f w aste.
I take i t from Governor Smith1s remarks th a t he considers
a comparison between 192X and 1928 as an u n fa ir b a sis o f comparison,
and he h im self suggests the years 1924 and 1927 as o ffe r in g a f a i r
b a s is .
To be sure, he does not h e s ita te to use the 1921 b a sis when
the fig u r e s happen to be fav o rab le to h is co n ten tion , as he did in
the case of the executive department and the D is t r ic t of Columbia,
O verlooking, however, th is in co n siste n cy , and overlooking minor
in accu racies l e t me come to the c e n tr a l p o in t of the Governor’ s
speech, to the statement which he says is “ a p r e tty good, c le a n ,
c le a r -c u t statem ent0, made ’’without eq u iv o calio n ” , from which he has
°got nothing to subtract or deduct11, and made •’’w ith the knowledge that
the fig u r e s are r i g h t ,”
What is th at statem ent?:
’’A l l of the depart
ments of the Government in 1927 co st $200,000,000 more than they did
in 1924,”
I am a fr a id Governor Smith has been g r o s s ly m isinform ed.
The t o t a l ordinary expenditures of the Government, which does not in
clude the expenditures payable from p o sta l revenues, aggregated in
1924 $1,828,000,000, and in 1927, $1,85$,000*000, or an in crease of
$29,000,000, and not $200,000,000.
The p o s ta l expenditures are not
included fo r the very good reason th at they are met from p o s ta l rece ip t
which the law requires s h a ll be kept separate and earmarked fo r p o sta l
expen ditures.
Except to the extent that there is a d e fic ie n c y , they
do not c o n s titu te a drain on the general resources of the Government,
P o s ta l expenditures n e c e s s a r ily increase from year to year w ith the
growth of the country, hut increased p o sta l business is accompanied, of
course, by increased p o s ta l revenues.
T o tal governmental expenditures,
in clu d in g p u b lic debt item s, the p o sta l d e fic ie n c y and operations in
s p e c ia l accou nts, amounted to $3,506,000,000 in 1924, and in 1927 to
%
$3,493,000,000, or a decrea.se of $13,000,000, in s p ite of the f a c t that
in 1927 there was expended $115,000,000 fo r account of the Adjusted Ser
v ic e C e r t ific a t e Fund, intended fo r the b e n e fit of our v e te ra n s, an ex
penditure which was not made in 1924, and in s p ite of the f a c t th at debt
retirem ent from ordinary r e c e ip ts increased by $62,000,000*
This is the second time th a t Governor Smith has been g u ilt y of an
error of th is c h a ra c te r.
In h is speech o f acceptance, in charging the
Republican A d m in istration w ith the maintenance of u se le ss o ff ic e s and
commissions merely fo r the b e n e fit of patronage seekers, he makes th is
statem ent:
nThe ap propriation s fo r independent bureaus and o ff ic e s not
respon sible to any Cabinet o f f ic e r increased from $3,400,000 in 1914 to
$163,000,000 in 1921, and to $556,000,000 in 1928*u
stopped th e re .
Governor Smith
He did not say th at of the $556,000,000 expended in 1928
$500,000,000, or a l l but $56,000,000 can be accounted fo r by the United
S ta te s Veterans* Bureau, which had not come in to e x isten ce in 1914, and
whose expenditures in 1921 were com paratively sm all because the United
S ta te s Government had. not then begun to meet i t s o b lig a tio n s to it s
wounded and m u tilated v e te ra n s .
Governor Smith cannot be ignorant of
the fa,ct th at these la rg e expenditures on the part of the Government are
not only j u s t i f i a b l e but in e v ita b le and ir r e d u c ib le in amount - and yet
he would create the im pression th at these expenditures were due to the
maintenance of jobs fo r patronage seek ers.
This is a good example of
the use of fig u r e s , not to present an accurate and tr u th fu l p ic tu r e , but
q u ite the o p p o site .
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And now l e t me turn tothe Governor's th ir d charge, th at p u b lic
works have been neglected e n t ir e ly , postponed, or s ta r te d w ith g ro s s ly
inadequate ap p ro p ria tio n s.
The Governor s ta te s th at there is e s ta b lis h
ed in Washington what he c a l l s a t r i c k bookkeeping system under which
la rg e amounts are au th o rized , while only sm all amounts are appropriated
year by y e a r.
He is apparently under the im pression th at th is p r a c tic e
was re ce n tly inaugurated fo r p o l i t i c a l purposes.
Since 1837 the House
o f R epresentatives has follow ed the sound ru le of not p erm ittin g an
ap p ro p riatio n fo r any given purpose unless th at purpose had p re v io u sly
been a u th o rized .
Moreover, the Governor by the use of a l i t t l e d ilig e n c e
could have ascertain ed th at in so fa r as p u b lic b u ild in g s are concerned,
i t i s not necessary th at the amounts authorized s p e c if ic a l l y fo r p ro je c ts
be appropriated fo r in th e ir e n t ir e ly at once, as the Secre ta ry of the
Treasury is given a u th o rity to enter in to co n tracts to the f u l l lim it of
cost in each in s ta n c e .
Therefore, the estim ates submitted to Congress
are simply in such amounts as w ill provide adequate funds to carry each
p ro je ct u n t il the fo llo w in g ap propriation can have become law .
I t is
a l l simple and r e a d ily understandable by those having knowledge of the
Government b u sin e ss.
The Governor c it e s a number of in stan ces in which b u ild in g s ite s
were acquired some years ago on which no b u ild in g has to date been con
s tru c te d .
The fa c t is th at the la s t omnibus p u b lic b u ild in g b i l l , the
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*
items fo r which were made up by the committees of the House and Senate, be
came a law on March 4, 1913.
Work under that b i l l progressed s te a d ily u n t il
the co n d itio n s brought about by the World War caused the then Secretary of
the Treasury, in the in te r e s t of conserving manpower, m a te ria ls and tran s
p o r t a t i o n - f a c il it ie s fo r war purposes, to suspend the le t t i n g of co n tracts
fo r new b u ild in g s .
When the new A dm in istration came in to power in 1921, the immediate ta sk .
to be undertaken was p u ttin g the Government’ s own house in order; the re sto ra
tio n of economical and b u s in e s s lik e p r in c ip le s of ad m in istra tio n ; the re
duction of the co st of government, n e c e s s a r ily follow ed
by r e l i e f from the
f r i g h t f u l burdens of ta x a tio n under which the country was stag g erin g and
which formed so serious an impediment to the r e s to ra tio n o f the economic
p ro sp erity of the N atio n ,
U n t il th is v i t a l ta sk had been accom plished, no
thought co uld .b e given to expanding the p h y sica l p la n t of the Government,
Once accom plished, the P resid en t recommended to the Congress th at the
time had come fo r expanding the p h y sic a l f a c i l i t i e s o f the Federal Govern
ment, but he was u n w illin g th at we should return to the old pork b a rre l
p ra c tic e s of an omnibus p u b lic b u ild in g s b i l l .
A cco rd in gly , a law was en
acted under the terms o f which, fo r the f i r s t time in i t s h is to r y , the
p h y sica l p la n t o f the Government would be constructed on the b a sis of a c tu a l
requirem ents, rather than by v ir tu e of the p o l i t i c a l needs of con gressional
d is tr ic ts .
Since th at time and in the course of the la s t three years a gen
e ra l a u th o riza tio n of $298,000,000 has been made fo r p u b lic b u ild in g s pur
poses, of which $77,000,000 have been appropriated, and o f which $50,000,000
approximately are being an n ually expended.
To date 251 p r o je c ts have been
authorized, 244 fo r the country a t la r g e , and 7 fo r the D i s t r i c t of Columbia,
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The Governor gave what he c a lle d a few sh in in g examples of mismanage
ment.
He sta te d that in the Borough of Brooklyn, the Government acquired
a s it e as fa r back as 1915 an& th at up to and in clu d in g th is year not a
s in g le d o lla r has ever been appropriated to put a b u ild in g on i t . How
what are the f a c t s ?
When the land in question was acquired, there were
b u ild in g s on i t and the very a c t which authorized i t s a c q u is itio n provided
fo r the remodeling o f those b u ild in g s .
They have sin ce been remodeled
and have been in use by the Federal Government ever s in c e .
s ta te d , there was no P u b lic B u ild in g s Act u n t il 1926.
As already
At the present time
$2,700,000 has been authorized fo r the dem olition o f the o ld b u ild in g s and
the extension and remodeling of the main b u ild in g .
I t is expected to
ad v e rtise the foundations in January and the superstructure in A p r i l ,1929*
In Chicago, Governor Smith s ta te s th at a s it e was acquired a t a co st
o f clo se to $4,000,000, th at the new Federal b u ild in g is designed to
co st $14,250,000, and that a t the la s t sessio n Congress appropriated
ju s t $300,000, not enough fo r the fou n d ation .
From which he would have
the people in fe r that th is p r o je c t is being handled in a w a stefu l and
u n b u sin esslike manner.
Here again the Governor has been g u ilt y o f
making charges without a c a r e fu l ascertainm ent of the f a c t s . I t i s true
th at a s it e has been acquired in 1928 a t a co st o f $3,890,000, but th at s it e
does not include a l l o f the land required fo r the new b u ild in g .
The
Government was not ab le to purchase the balance o f the property fo r what
i t conceived to be a reasonable p r ic e .
had to be reso rted to .
Condemnation proceedings have
U n til th is needed property has been acq uired , i t
i s in p o ssib le to begin co n stru c tio n , and the $300,000 appropriated is
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a l l th at can p o s s ib ly be expended t h is f i s c a l y e a r.
Moreover, I again
in v ite a tte n tio n to the f a c t th a t the Secretary of the Treasury
i s authorized to enter into b u ild in g co n tracts up to the f u l l lim it o f
$1^,250,000 as soon as the t i t l e to the land becomes vested in the
U nited S tate s and the plans fo r the b u ild in g are completed.
In P ittsb u rg h , in 1913 the Congress d ire c te d the s a le of a s it e
p re v io u sly acq uired.
Not u n t il 1917 was the Treasury * department able
to consummate a s a le .
At th a t time the s it e was so ld to the Pennsylvania
R ailro ad Company under a co n tra c t which gave the United S ta te s an option
to purchase a new s it e near the Pennsylvania R ailro ad s ta t io n on Grant
S tre e t.
However, due to a p lan of the C ity o f P ittsb u rg h fo r r e lo c a tin g
Grant S tr e e t, the Government was not in a p o s itio n to co n tract fo r the
purchase o f the new s it e u n t il 1926.
the end o f th at year*.
T it le was f i n a l l y acquired towards
During the la s t sessio n of Congress the con struc
tio n o f the new b u ild in g was authorized a t a cost o f $6,^25,000, and
$300,000 was a c tu a lly appropriated.
In view o f the f a c t th a t the ser
v ic e s o f outside a r c h ite c ts are being employed in th is case and th at they
have not yet been in a p o s itio n to submit th e ir plans and draw ings,
the $300,000 is adequate to cover such expenditures as may be incurred
th is y ea r.
These examples a re , I th in k , s u ffic ie n t to demonstrate that Governor
Smith has been le d to draw rash conclusions from in s u f fic ie n t d ata and
inadequate study.
The business o f the U nited State s Government is the g r e a te s t
business e n terp rise in the w orld.
Knowledge o f i t i s not to be acquired
h a s t ily during the course o f a few months’ campaign. I t is no r e fle c tio n
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on Governor Sm ith’ s a b i l i t y th at he is inadequately informed as to the
business o f the Federal Government.
What might reasonably be asked o f
him, however, is that he r e fr a in from charging others with m isrepresenta
tio n and bad f a i t h u n t il by study and f a m ilia r it y with h is su b ject
he has placed h im se lf in a p o s itio n to deal w ith i t in terms o f f a c t .
t
TREASURY DEPARTMENT
FOR RELEASE, MORNING PAPERS,
October 19* 1928, or when
delivered.
S ecre ta ry of the Treasury
a t the Annual Pounder’ s Day E xercises
of the Carnegie I n s t it u t e ,
P ittsb u rg h ,
October 18, 1928
Developing the Nation* s C a p ita l
I an g la d to "be here fo r t h is occasion*
Dor many y e a rs, in my
cap acity as a tru stee of the Carnegie I n s t it u t e , I have attended the Founders*
Day e x e r c is e s ; and, sin ce I have "been in Washington, I have looked forward,
each year to retu rn in g home and jo in in g w ith you in c e le b r a tin g the found
ing o f th is in s t it u t io n , which i s doing so m ch fo r the cause o f education
and in tr a in in g the youth o f the country in a knowledge o f the a r ts and
sciences*
I t i s because o f your in te r e s t in such th in g s , th at I want to speak to you
on a su bject somewhat d iffe r e n t from those u s u a lly a sso c ia te d with the work of
government a t Washington*
I t has to do with the b e a u tify in g o f the Nation* s
C a p ita l and the ca rry in g out o f the o r ig in a l p lan whereby the C ity o f Washington
s h a ll become not only one o f the most im pressive c a p it a ls in the world but one
which s h a ll be rep rese n tativ e o f the b est th at i s in America*
The importance
of the ?/ork was stresse d by P resid en t Coolidge in h is la s t annual message to
Congress, in which he sa id ;
'*• • • * I f our country wishes to compete with o th e rs, l e t i t
not be in the support o f amarauihs but in the making o f a b e a u tifu l
C a p ita l C ity *
L et i t express the soul o f America*
Whenever an
American i s at the seat o f h is Government, however tra v e le d and c u l
tured he may b e , he ought to fin d a c it y of s ta t e ly p ro p o rtio n ,
sym m etrically l a i d out and adorned with the b est th a t there i s in
a r c h ite c tu r e , which would arouse h is im agination and s t i r h is
p a t r io t ic p rid e • • • • »
Congress has made the necessary ap propriation to i n i t i a t e t h is work and
to carry out the most important fe a tu r e s o f th at lon g n eglected p la n o f Wash
ington and L*Enfant fo r the development o f the c it y *
The r e s p o n s ib ility fo r
carryin g out t h is p la n , by the purchase o f s it e s and the e re ctio n o f b u ild in g s ,
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was placed "by Congress on the Secretary of the Treasury and has become, th ere
fo r e , an in te g r a l o art of Treasury a c t iv it i e s ..
Before en terin g upon a d iscu ssio n of what is to be undertaken, i t is neces
sary to have a c le a r understanding of the h is t o r ic background ag a in st which
th is work must be done.
Washington, as you know, was founded fo r the ex
press purpose of being the n a tio n ’ s c a p it a l.
There have been only two
other world c a p ita ls so founded - the former Russian c a p ita l of Petrograd , and
the newly created c it y of Canberra in A u s t r a lia .
To me there ha,s always
seemed something h eroic about the e a rly beginning of Washington.
When we
remember that a t* th a t time the e n tire country had a population of le s s than s ix
m illio n ; that communication was d i f f i c u l t and the Government almost without
f in a n c ia l reso urces, we marvel a t the courage and v is io n of men who proceeded
to b u ild a c it y in a w ilderness and to p ro je c t i t along lin e s so m agnificent
that even today we do not fin d i t easy to carry th e ir plans to com pletion.
The new c a p it a l was e s ta b lis h e d in accordance with a p ro v isio n in se rted in
the C o n s titu tio n ; and i t thus became one of the f i r s t d u ties of the newly formed
government to carry th is p ro v isio n in to e f f e c t .
You remember ho?/ both the
Northern and the Southern S ta te s desired th at the Federal C a p ita l should be lo
cated in th e ir t e r r it o r y .
The f i n a l d e c is io n was made in a way th at s e ttle d
another question then a g it a t in g the p u b lic mind.
Alexander Ham ilton, as
Secretary of the Treasury, had succeeded in having the Fed eral Government assume
the payment o f a l l debts incurred by th at government in the prosecution of the
R evolutionary War.
was another m atte r.
But the assumption o f the debts incurred by the S ta te s
The S ta te s w ith sm all debts f e l t th at i t v/as u n fa ir to
ask them to h elp discharge the la rg e r debts incurred by other S ta te s , and op
posed assumption by the Federal Government.
As i t happened, the S ta te s w ith
sm all debts ?/ere m ostly in the South, where i t was ard e n tly d esired that the
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c a p ita l should ho lo c a te d .
Hamilton f e l t th at assumption o f the debts was a
v i t a l part not only of h is f in a n c ia l p o lic y fo r e s ta b lis h in g the p u b lic c r e d it
hut of th at la rg e r purpose involved in ty in g the S ta te s together in a firm and
in d e s tr u c tib le union.
He determined, as some one has remarked, to reso rt to
the expedient of ’’g iv in g a c i v i l i t y in exchange fo r a lo a f of bread” .
He
asked Je ffe r s o n , who represented the Southern p a rty , to giv e a d in n er.
JLt
th is d in n er-p a rty , i t was arranged th at the c a p ita l c it y should be located in
the South and in return the South agreed to support assumption o f the S ta te
debts by the Federal Government,
Subsequently Congress authorized the c a p ita l to be e s ta b lis h e d on the
Potomas R iver and th at P resid en t Washington be allowed to s e le c t the exact
sp o t.
He did so, with the a id of Je ffe r s o n and Madison; and these two,
with the three Commissioners appointed to prepare the new seat o f government,
gave to the c i t y the name of Washington ajnd to the D is t r ic t the name of
Columbia,.
Washington, h im s e lf, throughout h is l i f e always modestly re
ferred to the new c a p ita l as ’’The Federal C it y ” .
The P r e s id e n t’ s next step was to secure the se rv ice s of a man who should
design the c i t y .
Ho chose Major P ie rre Charles L ’E n fan t, a young French
engineer o f f i c e r , who liad served in the army during the R evolutionary War.
L i n f e s t was eminently su ite d fo r the ta s k .
He knew Europe and was un
doubtedly fa m ilia r with landscape a rc h ite c tu re as p ra ctice d there by that
g reatest of a l l landscape a r c h it e c t s , Le H otre, whose designs at V e r s a ille s
and elsewhere have been follow ed throughout the c i v i l i z e d w orld.
L'E n fan t threw h im self in to the work w ith enthusiasm .
With Washington
and Je ffe r s o n he worked out a plan fo r a splendid c i t y , w ith a system of
s tre e ts running from north to south and from east to y^est.
Superimposed
upon th is r e c t ilin e a r arrangement were those d iagonal a.venues r a d ia tin g from
i
the Capitol and the White House, as do the spokes from the hub of a wheel*
lie sought to locate all public buildings in appropriate landscape settings and
with especial regard to preserving the axial treatment, which is an outstanding
feature of Le Hotre*s work*
These buildings were to be grouped along a
beautiful park a mile long, connecting the Capitol building with the presidents
park south of the White House*
A great avenue was to border this park,
flanked on one side by public buildings; and, at the point where the axis of the
l|iite House intersected the axis of the Capitol, was to arise the monument to
Washington already voted by the Congress*
It was a noble plan; and, if
carried out, will give to the City of Washington that sense of unity and
grandeur which so impresses one in Paris today*
During its first hundred years, the City of Washington suffered many
vicissitudes#
It struggled into existence as best it could with little
regard for the plan of L !Enfant or any other plan*
On the removal of the
Federal Government from Philadelphia in 1800, the new city was almost as much
of a wilderness as it had been a little earlier when the Indians of the Pow
hatan Tribe held their councils at the foot of Capitol Hill#
Fortunately
the Capitol building and the White House had been started before the death of
Washington, and so the main axes of the new city had been fixed#
Both
buildings were badly burned during the British raid on Washington in 1814, but
were soon restored in accordance with the original designs; and, in the case of
the Capitol, the wings and dome were added a few years later.
During
this same period of good taste, the patent Office was built and also the present
Treasury building, two of the architectural glories ff Washington*
I would like to say a word about the Treasury*
The building in which
it was originally housed was destroyed by the British in 1814#
The new
building, erected in its place, was destroyed by fire in 1833; and finally, in
- 5 1836, the present b u ild in g was b egik on the s i t e designated by P resid en t
Ja ck so n .
I t was commonly reported th a t, becoming wearied of the d elay in
s e le c tin g the lo c a tio n , General Jackson planted h is cane one morning at. the
northeast corner of the present s it e and said »Here, r ig h t h e re, I want the
corner-stone la id » .
And i t was la id th ere, notw ithstanding the f a c t th a t ,
when f i n a l l y completed in 1869, the south wing was interposed between the
C a p ito l and the White House, and thus shut o f f the v is t a a t th at end of
Pennsylvania Avenue.
Before le a v in g th is subject* I would lik e to say A word a ls o about the
White House.
I t is so p e r fe c t, in proportion and d esign , th at i t m erits
s p e c ia l comment.
But what has seemed to me remarkable is th a t a b u ild in g ,
which was planned fo r a sm all and s tr u g g lin g n atio n and s itu a te d in what was
a t th at time a backwoods c a p it a l, should have proved adequate fo r the needs of
one of the g re a te s t and most powerful n ations in the world to d ay.
things do not come about by a c c id e n t.
Such
I t was su rely due to the e x tra o rd i
nary fo r e s ig h t of some one, and th at person, i t is in te r e s tin g to know, was
Washington, h im s e lf.
Follow ing the adoption of Hoban’ s plan fo r the White
House, Washington d ire cte d th at the s iz e of the b u ild in g be enlarged o n e - fift h
over the o r ig in a l p la n , notw ithstanding the d i f f i c u l t y of meeting the increased
co st in v o lv ed .
The P r e s id e n t’ s reason shows h is in te n s e ly p r a c tic a l mind$
He said »1 was led to th is id ea by co n sid erin g th at a House which would be very
proper fo r a Presid en t o f the U nited S ta te s fo r some years to come, might not
be considered as corresponding with other circum stances a t a more d is ta n t period ;
and, th e re fo re , to avoid the inconvenience which might a r is e h e r e a fte r on th at
s u b je c t, I wished the b u ild in g to be upon the plan I have mentioned».
Wash
in g to n ’ s views were ca rrie d out; and so we owe one more debt to th at great man,
who* more than any other s in g le in d iv id u a l, gave us not only our country hut
. . ...
'*
)
pur n a tio n a l c a p ita l as w e ll.
IJn fo rtu n ately , a f t e r h is death th ere was no d r iv in g fo r c e , e ith e r in
Qongress or elsew here, which could carry out h is p la n s fo r the c i t y f s development
The end o f the C i v i l War found i t a badly b u i l t , s tr a g g lin g town, la r g e ly unpaved
with a few s tr e e ts lig h te d by o il lam ps, and the areas reserved fo r parks over
grown and n e g le cte d .
L a te r p re sid e n t Grant induced Congress to g iv e the c it y
a t e r r i t o r i a l form o f government; and under Alexander B . Shepherd, a man of extra o rd in aiy energy, courage and v is io n , who became Commissioner o f P u b lic Works,
the c i t y was transform ed.
He succeeded in g rad in g , p avin g, and lig h t in g the
s tr e e ts ; the o ld Tiber Creek was in clo se d in a sewer; and thousands o f tre e s
were p la n te d , thus la y in g the foundation fo r th at growth of tre e s which is now
one o f the g lo r ie s o f Washington.
During th is p e rio d , one great work, the
h a l f - b u il t Washington Monument, was c a r r ie d to com pletion in 1884.
But the
M a ll, on which i t was p la ce d , had never been properly developed; and throughout
the e n tir e c it y the e f f e c t fo r which Washington and L ^ n fa n t strove was e n tir e ly
la c k in g .
Such was the co n d itio n o f the n a tio n 1s c a p ita l in 1900, when the one
hundredth anniversary o f the establishm ent o f the seat o f government in the
D is t r ic t o f Columbia was ce le b ra te d .
At the in v it a t io n o f P resid en t
McKinley a meeting was h e ld in the White House attended by many h ig h o f f i c i a l s
o f the Government and by the members o f the American I n s t it u t e o f A r c h ite c ts
then meeting in Washington.
In te r e s t in the L ’ Enfant P lan was revived;
and sh o rtly afterw ards Senator McM illan secured a u th o rity from Congress
fo r the appointment of a sp e c ia l commission of e x p e rts, who should
recommend .a p lan fo r the b e a u tific a t io n and development of W ashington.
That Commission included D an iel H* Burnham
and Charles F . McKim,
a r c h ite c ts ; Augustus S a in t G-audens, scu lp to r; and F red erick Law Olmsted,
landscape a r c h it e c t .
I t was a notable group,, such as has seldom been
brought together in one u n d ertak in g.
Burnham, McKim and S a in t Caudens
and the fa th e r o f Olmsted had brought about those b e a u tifu l a r c h ite c tu r a l
and landscape e f f e c t s a t the Chicago World*s F a ir in 1893, which gave an
impulse to c ity .p la n n in g and to the re b ir th of beauty and good ta s te in
t h is country.
A fte r a c a r e fu l study o f Washington and i t s p o s s ib ilit ie s ,t h e s e
men presented a re p o rt, known as the Plan of 1901*
In i t they recom
mended a return to the o r ig in a l p la n o f Washington and L fE n fan t, with
such extension of i t as might be required to meet modern co n d itio n s
and the c it y * s growth.
A fte r subm itting t h e ir re p o rt, the Commission
passed out of e x iste n ce ; but i t s members were consulted u n o f f i c i a l ly
by P resid en ts R oosevelt and T a ft w ith regard to the lo c a tio n o f p u b lic
b u ild in g s and m emorials.
L a te r Mr. Burnham and Mr. Olmsted, who were
the only members then l i v i n g , were made members o f the Commission o f
Fine A r t s , a body created by Congress in 1910 to serve in an expert
and advisory ca p a city regarding questions a f f e c t in g the development
o f Washington.
This Commission, which was e s ta b lis h e d during the
A dm in istration o f P resid en t T a ft , owes much to the backing which he
gave i t and a lso to the in te r e s t and understanding o f Mr. R oot.
Under
the chairmanship o f Mr. Charles Moore, i t i s now doing splendid work
fo r Washington and the coun try.
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The Commission has adhered to the Plan o f 1901 as a restatem ent
o f the a u th o rity o f the L ’Enfant Plan and has in s is te d th at th is plan
mast ao ntinue as fundamental in the development o f Washington.
In more
than a quarter of a century sin ce the Plan o f 1901 was presented, much
has "been accom plished.
The u n s ig h tly r a ilr o a d tracks have been removed
from the M a ll; and, due la r g e ly to the cooperation and p u b lic s p i r i t
o f a d istin g u ish e d son o f Pennsylvania, P resid en t A. J . C assa tt o f the
Pennsylvania R a ilro a d , a g re a t Union S ta tio n has been b u ilt in accord
ance with the plans o f the Commission.
The S ta tio n and also the beau
t i f u l C ity Post O ffic e a d jo in in g i t , have been p laced in a p o s itio n
subordinate to the b u ild in g s "on C a p ito l H i l l , but in a harmonious and
v i t a l r e la tio n to them.
In th is way a tr a v e le r a r r iv in g in Washington
gazes f i r s t acro ss a b e a titifu l p la z a to the g re a t Dome o f the C ap ito l
and the Lib rary o f Congress beyond.
Today th is S ta tio n stands lik e a
great c it y gate at the entrance to the c i t y ; and, while much remains
to be done in c le a r in g o f f the space in terv en in g between i t and the
C a p ito l, the Union S ta tio n , i t s e l f , in i t s a r c h ite c tu r a l and landscape
treatm ent, has already helped to e s ta b lis h a precedent by which r a ilr o a d
s ta tio n s in th is country have come to be recognized as p u b lic b u ild in g s
o f the f i r s t importance.
Tlie Plan of 1901 considered the Capitol as the dominating feature
to which all structures in the legislative group must be subordinated.
The Lib rary o f Congress fa c in g the C a p ito l, had been b u ilt in 1597» but
in the la t e r s tr u c tu r e s , such as the white marble o f f ic e b u ild in g s fo r
the use o f Senators and Congressmen, the p r in c ip le o f subordimbion in
grouping has been observed.
I t w ill be c a rrie d out in the e r e c tio n o f a
b u ild in g fo r the Supreme Court in the vacant space fa c in g the east fron t
o f the C a p ito l and fla n k in g the Lib rary o f Congress.
- 9 At the fo o t of C a p ito l H i l l , loo kin g toward the Treasury and the
White House, the Plan of 1901 contemplates th at there s h a ll he a great
open p la za w ith monuments and fou n tain s somewhat lik e the P lace de l a
Concorde in P a r is .
I t was intended th at th is space should provide a
d ig n ifie d entrance to Pennsylvania Avenue and a ls o in to the M all lead
in g westward to the Washington Monument a m ile away.
The memorial to
General Grant has been lo ca te d in th is space in accordance w ith these
p la n s , hut there progress has stopped.
The development o f the p la za
and the M all has been 'delayed u n t il arrangements could he made fo r the
removal of the Botanic Gardens to la r g e r and more s u ita b le quarters on
land to he acquired on the west fr o n t of the C a p ito l.
The S ta te of
Pennsylvania has erected a memorial to General George Gordon Meade, as
a companion to the Grant Memorial, and in doing so has a ls o urovided fo r
s u ita b le Landscape s e ttin g in accordance with the M all p la n .
Thus
these two memorials w ill stand in the great Union P la za a t th.e head of
the M all and the way w ill be open a t la s t to complete the developments
required to make the M all in to a b e a u tifu l pax:k.
F ir s t i t w ill be necessary to demolish the temporary b u ild in g s and
the smokestacks erected during the War#
Then a great avenue of green
sward, bordered by d rives and lin e d with fou r rows o f s t a t e ly tr e e s ,
w ill be p ro jecte d through the M a ll, lead in g westward from the C a p ito l
and the Union P la za to the Washington Monument and the L in co ln Memorial
boyondi,
Along th is avenue, a t in te r v a ls , w ill be such b u ild in g s as
the A g r ic u ltu r a l Department, the Freer G a lle r y , the n a tio n a l Museum, and
10
tlie Smithsonian I n s t it u t e .
-
This avenue w ill end a t the Washington
Monument; and, beyond the Monument, a t the point where the new a x is
meets the Potomac, has been placed th at b e a u tifu l' white marble stru c tu re ,
the memorial to Abraham L in c o ln .
Prom the fo o t: of the L in co ln Memorial a great B rid ge, commemorating
the Union o f the Uorth and South, is now in process of b u ild in g .
When
completed i t w ill lead across the Potomac to the slones of A rlin g to n ,
where, surrounding a mansion once the home of General Robert E . Lee, are
tne graves of those who died in th e ir co u n try’ s s e r v ic e , in clu d in g that
newly erected n atio n a l sh rin e , the Tomb of the Unknown S o ld ie r .
Prom
A rlin g to n a boulevard w ill s tr e tc h to Mt* Vernon, the home of Washington;
and a l l of th is region and the se c tio n known as Potomac P ark, with i t s
r iv e r drives and famed cherry tr e e s , w ill be jo in e d , under plans now
being ca rrie d out, with Rock Creek Park and th at se c tio n o f the c i t y
where the g re a t Gothic Cathedral is r is in g on the wooded h e ig h ts of Mount
S t . A lban.
How, I $u st ask you to return fo r a moment to a co n sid eratio n of
another v ast p ro je ct which w ill e v e n tu a lly r e a liz e L ’E n f a n t c lr o a n » f o r
a great avenue bordering the M all and lead in g from the “C a p ito l to the
White House.
You are fa m ilia r w ith the d is tr e s s in g s p e cta cle which
Pennsylvania Avenue presents tod ay.
I t is perhaps our most important
s tr e e t and c e r t a in ly there is no avenue of corresponding importance in
any c a p ita l which can compare w ith i t in sheer u g lin e s s or la c k of a r c h i
te c tu r a l d ig n it y .
I t is the s tr e e t over which our great processions
pass in triumph to the C a p it o l,
Yet never, in the days of e ith e r the
an cien t or the mcilern world, has any one seen before a g re a t triumphal
way bordered, throughout much of i t s le n g th , by g a so lin e s ta t io n s , lod g-
11
-
in g houses, and Chinese la u n d rie s.
This s ta te o f a f f a i r s , I am g la d to say, w ill soon be remedied.
Congress has determined that the C a p ito l s h a ll be approached by an
avenue commensurate in d ig n ity w ith i t s im portance.
Senator Smoot,
who has such a c le a r conception o f the fu tu re p o s s i b i l i t i e s o f Washington,
has taken the lead in th is work; and he has been ably seconded by Senator
Swanson, Senator Bruce, Congressmen E l l i o t t , Lanham and o th ers.
An
appropriation of $50»000,000 has been made, supplemented la s t w inter by an
a d d itio n a l $25,000,000, and other amounts w ill be forthcom ing as the work
p ro g resses.
The amounts alread y appropriated w ill be used to i n i t i a t e
the most important fe a tu re s o f the plans fo r Washington’ s development,
w ith s p e cia l regard fo r th e .M a ll and fo r improving Pennsylvania Avenue.
The Secretary o f the Treasury was authorized to use th is money in
the purchase or condemnation o f land and the e r e c tio n o f p u b lic b u ild
in g s .
I t is intended to carry through, as ra p id ly as p o s s ib le , the
most p ressin g needs as regards housing o f government departments and ac
tiv itie s .
These w ill in clud e a new and la r g e r b u ild in g fo r the increased
a c t i v i t i e s o f the Department of Commerce; a Supreme Court b u ild in g ; a b u ild
in g fo r the Byreau o f In te rn a l Revenue; an A rchives B u ild in g ; a b u ild in g
fo r the Department of A g r ic u ltu r e ; s t i l l another fo r the Department of Labor,
and several others b e sid e s.
One of these b u ild in g s , th at fo r the Supreme
C ourt, w ill be p laced on C a p ito l H i l l fo r reasons already g iv en ; b u t, as
regards the o th ers, advantage w ill be taken o f th is opportunity to group
them together in such a way as to co n trib u te in the g re a te st measure pos
s ib le to the beauty o f Washington.
The p la c in g o f these b u ild in g s is a
g re a t r e s p o n s ib ility , fo r on the proper determ ination of th is question
la r g e ly hinges the fu tu re development o f Washington.
- ia Before coming to a d e c is io n , the Secretary o f the Treasury con
s u lte d with Mr. Edward H. Bennett of Chicago, who has had so la rg e a
p a rt in b rin g in g to completion the extensive plans fo r b e a u tify in g th at
c ity .
Mr. Bennett was appointed C o n su ltin g A r c h ite c t to the Secretary
o f the Treasury; and, under h is a d v ice , and a lso in co n su lta tio n with the
f in e A rts Commission, Colonel U. S. G-rant, 3r &*
the O ffic e o f P u b lic
B u ild in gs and P u b lic Parks, and A s s is ta n t Secretary o f the Treasury
Schuneroan and Supervising A r c h ite c t o f the Treasury Wetmore, the general
p r in c ip le has been e sta b lish e d th at no larg e departmental b u ild in g s are
to be placed in the M a ll, as was at f i r s t proposed, but th at the M all is
to be reserved fo r park purposes and as a s it e fo r b u ild in g s o f a museum-like
ch a ra cte r.
Departmental b u ild in g s are to be p laced along the south sid e o f
Pennsylvania Avenue from the Treasury to the C a p ito l.
In ad d itio n to
fa c in g on Pennsylvania Avenue, these b u ild in g s w il l face also on a grand
boulevard, which is to be cut through the c i t y , bordering the M all and
s tre tc h in g from the C ap ito l to the new Memorial Bridge on the Potomac near the
base of the L in co ln Memorial.
Plans are now being made to secure a com-,
prehensive treatment o f th is e n tir e area between Pennsylvania Avenue and the
new boulevard both as regards the lo c a tio n and the grouping o f the various
b u ild in g s .
A group o f the lead in g a r c h ite c ts o f the country has been
formed to study th is problem and to submit .designs fo r a l l the b u ild in g s in
th is area.
I t is intended th at these b u ild in g s , while having each a
separate and d is t in c t iv e a r c h ite c tu r a l treatm ent, s h a ll be o f harmonious
design and grouped around two larg e in te r io r courts or p lazas somewhat a fte r
the arrangement of the Louvre in P a r is .
- 13 -
I t i s easy to see what the e f f e c t w ill be*
As one proceeds down
Pennsylvania Avenue towards the C a p ito l, on the south side w ill be a
succession of b e a u tifu l and harmonious b u ild in g s , a l l o f a design in keeping
with the s e m i-c la s s ic a l tr a d itio n so w ell e s ta b lis h e d in Washington*
On
the north sid e v is ta s w ill be opened up, so th at groups o f b u ild in g s , such as
the b e a u tifu l D is t r ic t o f Columbia Court House on John M arshall P la c e ,
s h a ll be brought in to the general p la n o f Pennsylvania Avenue.
At the
same time the M all w ill present the sp e cta cle o f a g reat park bordered
on one side by the new boulevard lin e d w ith b e a u tifu l b u ild in g s , and on
the other side by a wide park-way o f greensward w ith i t s fou r rows o f tr e e s ,
i t s d riv es and w alks, statu e s and d e fle c tin g p o o ls , a l l arranged in such a
way th at long v is t a s w ill be opened up fo r views o f the C a p ito l in one
d ir e c tio n and o f the Washington Monument and L in c o ln Memorial in the other*
A l l o f th is w ill take tim e, o f course*
day, nor fo r th at m atter was P a ris*
each d is t in c t from the other*
But Rome was not b u i l t in a
P a r is has passed through many stag es,
The Gothic P a r is i s as d iffe r e n t from the
P a r is o f the Renaissance as the P a r is o f Louis XIV d if f e r s from th a t of
Hapoleon I I I *
Go about in modem P a r is and i t i s w ith d i f f i c u l t y that
one can tra ce the landmarks o f the p ast*
*
Y et somehow, in s p ite o f her
v ic is s it u d e s and o f having no fundamental p lan from the beginning as
Washington had, P a r is possesses th a t sense o f u n ity and completeness so rare
in any g re a t and growing c i t y .
A l l i t s p r in c ip a l b u ild in g s seem to f i t
in to the landscaioe and to be p a rt o f a general p la n so m agnificent in con
cep tio n and execution th at i t makes one wonder whether an e f f e c t eq u a lly
s a tis fa c to r y and on a scale and design su ite d to our needs, can ever be
produced in Washington.
- 14 '*
And y e t , Washington has many advantages in so f a r as i t s fu tu re develop?4
ment i s concerned#
I t s l i f e cen ters around the Government, as those
who planned the c i t y intended i t should do#
There i s no m anufacturing;
and the engineering and in d u s tr ia l problems, which have to he met at such
expense and e f f o r t in g reat in d u s tr ia l cen ters l i k e P ittsb u rg h and Chicago,
are e n tir e ly absent#
Washington i s s t i l l a c it y o f moderate s iz e , not
w ithstanding the f a c t th at i t s p o p u latio n has giown from s e v e n ty -fiv e ,
thousand a t the time o f the C i v i l War to about a h a l f a m illio n today#
But
so lon g as i t remains c h ie fly a seat o f Government, i t w ill r e ta in i t s
unique ch aracter among the c i t i e s o f the country#
More and more i t w ill
be v is it e d by people who w ill go to Washington, because o f i t s beauty and
th e ir f e e lin g o f p rid e and personal ownership in the nation* s C ap ital#
With
the ra p id growth in the use o f autom obiles a n d .o f aerop lan es, la r g e r and
la r g e r numbers w ill v i s i t Washington each year#
As i t becomes more
b e a u tifu l and i t s fame grows, people w ill v i s i t i t from a l l p a r ts o f the
world and Washington w ill fin d , as P a r is has done, th at a r c h ite c tu r a l and
landscape beauty can be a source o f p r o f i t , as w ell as pride and s a t is f a c
t io n , to a city#
But there are w e ig h tie r reasons than th at why we should g iv e our
support to the e f f o r t to re b u ild our n atio n a l c a p ita l#
U n t il r e c e n tly ,
America has been in the fr o n t ie r stage as n atio n s go#
We were too busy
about the hard r e a l i t i e s o f e x isten ce to have much time fo r the amenities#
But now ,we have the opportunity and we have a ls o the resources to r a is e
the standard o f ta s te in t h is country; and the exten t to which t h is i s being
done has no p a r a lle l at present in any country in the world#
No where
are the a r ts o f a rc h ite c tu re and landscape engineering being p r a c tic e d more
e x te n s iv e ly and s u c c e s s fu lly than in America#
- 15 -
I t has been said th at in ev o lv in g the skyscraper, we have made the
only o r ig in a l co n trib u tio n to a r c h ite c tu r e since the G o th ic .
Cer
t a in ly , in adapting a rc h ite c tu r e to the needs of modern co n d ition s and
crowded spaces,, we have produced something th at is expressive of human
a s p ira tio n and human need.
Judged by th at standard, the Woolworth
B u ild in g is a work of a r t , both because i t is b e a u tifu l in i t s e l f and
because i t expresses the needs and a sp ira tio n s of a great people#
I f wo can g iv e to our o f f ic e b u ild in g s something of the beauty of Gothic
cath ed rals or model our banks and r a ilr o a d s ta tio n s a ft e r Greek tem ples,
we s h a ll, in tim e, provide a m agnificent s e ttin g fo r the requirements
o f modern c iv iliz a t io n #
But we must remember th a t, ju s t as these th in gs are a r c h ite c tu r a l
expressions o f the nation on i t s commercial s id e , so should the c it y of
Washington, as P resid en t Coolidge has said» express the soul of America#
We do w e ll, th e re fo re , to g iv e to i t that beauty and d ig n ity to which i t
i s e n t it le d .
In doing so , we are not only carry in g out those plans
which Washington mado so long ago fo r the c i t y which he founded b u t, at
the same tim e, we are ju s t if y in g th at f a i t h which he had from the beginning
in the fu tu re greatness of Am erica.
FOR IMMEDIATE RELEASE,
October 19, 1938.
TREASURY U S B A m m T
Statement of the Undersecretary of the Treasury»
In answer to in q u ir ie s made to him by the p re ss today, Mr. M ills made
the fo llo w in g statem ent:
Mr. M ellon i s away today, but even i f he were h e re , I question whether
he would consider i t d e sira b le to rep ly fu rth e r to Governor Sm ith.
Governor Smith re fu se s to con fin e h im se lf to the record as made and, when
h is statem ents o f f a c t are d ir e c t ly ch allen g ed , simply r e a sse rts them
without supporting p r o o f.
For in sta n c e , in h is Chicago statement he
accuses Mr. Mellon o f s h ift in g the issu e and o f d is c u s s in g , not expen d itures,
but ta x red u ctio n .
The f a c t i s th a t , in the statement issued by the
Secretary o f the Treasury the day before y esterd ay , there was no d iscu ssio n
o f ta x red u ctio n , but the statement was confined to an answer to the
G o v e rn o rs loo se charges regarding exp en d itu res.
A gain , as a sample o f
Governor Sm ith's ig n o rin g the f a c t s , he makes the sweeping a s s e r tio n :
"That th ere i s not a s in g le department of the Federal Government th a t shows
a decrease as between 1924 and 1928."
show d ecreases.
The f a c t i s th at three departments
As to h is charge, re a ffirm in g h is previou s statement
th at there was an in crease in 1927 o f $200,000,000 fo r a l l departm ents, I
repeat what the Secretary s a id .
There was no such in crease and, f a r from
showing an in c re a se , to t a l governmental expenditures show a decrease in 1927
&s conpared with 1924.
Governor Smith rep eats h is charge th at "Right in the o f f ic e of the Pres
iden t h im se lf there i s a 100 per cent increase in expenditure from 1921 to
1928".
He very conveniently fo r g e ts to mention th at p r a c t ic a lly the e n tire
,/y
ju-,
#0
f.
-
2
-
in crease is accounted fo r by two item s:
$155,000 fo r extraord in ary rep airs
to the White House, and $86,000 fo r the White House p o lic e , which in 1921
were fu rn ish ed by the D is t r ic t of Columbia*
How, no one expects Governor
Smith to know these f a c t s o ff-h a n d , but as a candidate fo r the p resid en cy ,
before he undertakes to make a sse rtio n s as to the co st o f the Federal (Govern
ment and to charge the P resid en t o f the U nited S ta te s with extravagance and
the resp o n sib le f in a n c ia l o f f ic e r s o f the (Government with m isrep resen tation ,
the le a s t th at might be expected o f him would be to lo o k up the fa c ts *
.
TREASURE DEPARTMENT
FOR RELEASE, MORNING PAPERS,
Sunday, October 21, 1928.
Speech o f
Secretary A« W. Mellon
p resen tin g to Mr, Thomas A . Edison the medal
"bestowed upon him by the Congress o f the U nited S ta te s
West Orange, ITew Je r s e y r
October 20, 1928,
Few men in the h is to r y o f the world have e ffe c te d profound changes
not only in the l i v e s o f th e ir contemporaries hut o f a l l succeeding
generations*
company*
Thomas A* Edison i s one of t h is sm all and i l l u s t r io u s
In the space of a s in g le lif e t im e , he has changed the con
d itio n s under which men l i v e ; and, more than any one e ls e now l i v i n g ,
has helped to b rin g about a new s o c ia l order, based upon the achieve
ments o f modern science*
E a rly in l i f e he acquired the h a b it o f doing what to other men
had seemed im possible*
Hot only d id he astound the world w ith h is
own in v en tio n s, but he was w illin g always to expend h is e f f o r t s in im
proving the work of others and h e lp in g to make th e ir in ven tio n s o f more
p r a c t ic a l u s e .
In t h is way he p e rfe c te d B o l l ’ s telephone by in ven tin g
a tra n sm itte r which in creased the volume of sound and gave the in ven tio n
a g r e a te r commercial value*
He a s s is te d the inventor of the typew riter
to make a su cce ssfu l working machine.
o f M orsels telegraph*
He g r e a tly developed the use
E d iso n ’ s own in ven tion s included the phonograph,
the mimeograph, the s to c k -t ic k e r , the a lk a lin e storage b a tte r y , the motion
p ic tu r e camera, and many others too numerous to mention here*
But h is
g r e a te s t achievements were in the f i e l d of e l e c t r i c i t y ; and so v ast and
v a rie d have been h is co n trib u tio n s to i t s use th at there are some men
who even b e lie v e th at e l e c t r i c i t y i t s e l f i s merely another one o f E d ison ’ s
inven tion s*
I t was ju s t f i f t y years ago th a t Edison set h im self the ta s k o f pro
ducing an incandescent lanp th a t would burn s t e a d ily , could be manufactured
cheaply* and used as e a s ily as g a s .
U n til th a t time the use of e le c -
2
-
tricity had. been very limited.«
-
There were arc lights in use for
street lighting and occasionally for very large interiors«
The dynamo
had also "been discovered, making it possible to transform mechanical energy
into electric current; but no way had been found to use this current for
lighting purposes except for arc lighting.
For more than a year Edison devoted himself to this problem«
Menlo Park was the scene of feverish activity; and the eyes of the world
were on that laboratory, especially during those autumn months forty-nine
years ago, when it was known that Edison was approaching nearer and nearer
to a solution«
of cotton*
By October 18th, he had succeeded in carbonizing a filament
It broke before it could be connected with an electric cu2>-
rent; but ne kept at his task without stopping for sleep and for three days
the battle went on.
At last, on the morning of October 21, 1879, just
forty—nine years ago tomorrow, the lamp glowed and a new light came into
the world«
Edison knew then that his patient struggle with Nature had
be^n rewarded; and the world knew that the new era of electricity had begun*
Other inventions and discoveries followed in rapid succession«
the electric lamp came improvements in the dynamo in order to furnish
the electric current needed«
,Edison organized and operated the first
commercial central station for distributing electric current for light,
power and heat, thereby proving the commercial possibilities of the new
invention of incandescent lighting*
a great industry•
; Prom this beginning has grown up
At the same time the first real impetus was given to
the new profession of electrical engineering«
3^
- 3 -
Time does not permit even a short review of Mr. Edison* s achievements.
Mention imist he made, however, of his great services to the country during
the war.
Eor more than two shears, throughout 1917-1918, he worked on
special experiments in connection with war problems and gave invaluable as
sistance to this Government in its conduct of the war.
Since that time,
he has continued work in experimenting on new commercial devices and further
developing the usefulness and efficiency of his great enterprises.
It would be impossible to estimate the value to the world of Mr.
Edison* s work.
We can only begin to appreciate what he has done if we
will think of the world as it existed before he appeared and then contrast
it with conditions as they exist today.
It is necessary only to point
out a few of the great industries, such as the phonograph, the moving
picture, and the electrical industries, which are based almost entirely
on Edison* s inventions.
In addition to these, must be mentioned such
industries as the telegraph and the telephone, which were materially
affected by improvements and new inventions made by him.
It is a formidable list.
But ¿just as one can not place a value
on Mr. Edison*s work, so it is likewise impossible to estimate the im
portance of those indirect influences which he has set in motion, not
merely by his inventions but by his example.
It has been said by
eminent scientists that Mr. Edison, himself, for more than a generation
has been an educational institution of the first rank.
Erom him
have emanated not only fresh ideas and new inventions but an influence
which has inspired countless young men throughout the world to serve as
he has done
b
ox
- 4 -
We like to think that Mr. Edison*s genius is peculiarly American#'
It is essentially practical and utilitarian.
He, himself, has refused
always to he rated as a pure scientist, hut has made it clear that he is,
before everything else, a practical worker in applied science and that he
will he satisfied with nothing less than practical results.
Ho man has
a more complete understanding of the necessities of modern life, nor has
any one else done so much hoth to create and to supply those necessities.
All his great inventive skill, his untiring energy, his immense knowledge,
his vast experience and his creative genius, have been used to invent "and
to perfect things which shall he not merely useful hut also commercially
available.
As a result, he has raised the standard of living and has
added to the comfort and wealth of humanity#
Mr. Edison has never sacrificed quality#
His has always been the
instinct of the g-ood workman, who felt that he mast give the best that was
in him to any task that he undertook#
In an age when quantity, rather
than quality, seems' to he the goal, the example of a man like Edison has
made for honesty throughout the whole fabric of modern industry.
All the world knows the Edison doctrine of hard work#
Ho one has
better exemplified that doctrine than Mr. Edison himself; and in no field
are patient application and persistent effort more essential to success than
in the field of applied science.
One instinctively remembers the thousands of
experiments which Edison made during more than half a century#
In the conquest
of natural forces, however, something more than hard work is needed.
There mast
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"be clear thinking and steady application; hut behind all this mast be that
spark of genius which tells a man what to do and how to go about doing it*
It is that genius which has made possible the achievements of Thomas
A* Edison*
It has set him apart as one of the few men who have changed
the current of modern life and set it flowing in new channels.
appear only at rare intervals in the world* s history*
Such men
They belong to no
nation, for their fame, no less than their achievements, transcends national
boundaries*
America is proud that she has given such a man to the world;
and, as an expression of what the nation feels, Congress has directed that
a gold medal be struck in commemoration of what Thomas A* Edison has done
11in illuminating the path of progress through the development and applicartion of inventions that have revolutionized civilization in the last
century11*
It is my privilege, Mr. Edison, to present to you this modal
as a token of the high esteem and grateful appreciation of your country*
FOR RELEASE, MORNING PAPERS,
OCTOBER 30, 1928, or when
delivered.
TRSASUEf DEPARTMENT
REPUBLICAN POLICIES.
Speech of
Honorable A. W. Mellon
Secretary of the Treasury,'
from Station WRC,
Washington,
October 29, 1928.
future releas
OBSERVE
date
I wish to speak tonight of the reasons why I consider the policies
of the Republican Party more sound and worthy of. support than those of
the Democratic Party.
I am, and always have been, a Republican by
conviction as well as by inheritance.
I have not, however, been such a
partisan as not to acknowledge Democratic support which the present Adminis
tration has received in putting through certain non-partisan measures, nor
have I ever been willing to see credit withheld for things achieved during
^he Administrations of Cleveland, Wilson, and other Democrats.
The true
ends of neither party nor country are served by denying credit where it is
due, and particularly are they not advanced by indulging in the sort of
misrepresentation and appeals to prejudice which have been such a regrettable
feature of this campaign.
As between the two parties -the line of cleavage comes - and it is a
cleavage as definite and distinct today as it has ever been - not merely in
the policies which they advance for attaining their ends, but more especially
in their general attitude on certain fundamental questions which will be
no less vital in their effect on the nation’s future development than they
have been in the past.
If any one will look back upon the position of the two parties upon
vital political issues which have arisen in the past and have had to be
determined by legislation or in the administration of government, the Repub
lican Party has, in general, been the constructive party, whose policies
have tended to build up and to promote stability, while the Democratic Party
has, not infrequently, championed measures which, if enacted into law, would
-
have had the opposite effect.
of Free Silver#
2
-
This was true of Bryan and his championship
'It was true, and it is true now, of the historic position
of the Democratic Party on the tariff#
The platform of that Party calls for
"duties that will permit effective competition"•
This must mean, if it
means anything, that duties shall he low enough to expose American goods in
our home market to the competition of foreign products on a large scale#
we are told that the Democratic candidate favors a protective tariff.
But.
Certain-*
ly up to this year his rare public utterances on the subject would'not so indi
cate, but quite the contrary.
In his acceptance speech he referred to the
Underwood tariff in a way that seemed to denote his agreement with the principle
of that bill#
Now he says he is opposed to a general tariff bill, but wishes
to take it out of politics and to revise it by piece-meal, on the recommenda
tions of an impartial tariff commission#
I doubt, to begin with, that business would find the prospect of constant
changing of tariff schedules a reassuring one#
It would be like cutting off
the dog*s tail by inches in order to save him pain#
So closely is the
tariff interwoven into the whole texture of our economic life, that no material
change could be made without necessitating far-reaching readjustments in
business in anticipation of such a change#
In the second place, the tariff
can never be taken entirely out of politics so long as Congress must legislate
on the subject; and
Congress#
authority to legislate, of course, must always reside in
While the Tariff Commission might report the facts directly to
Congress, after that has been done it is Congress who will decide how the tariff
will be revised and not any subordinate board or commission#
be added also
It might
that, if Governor Smith were elected, it would be the Democratic
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membership of the Ways and Means Committee of the House of Representatives
who would frame the tariff schedules in the first instance; and these gentle
men have given no evidence that they have been converted overnight to the
doctrine of protection*
The statement which the Democratic National Chair
man has induced some of his party1s candidates for the House and Senate to
sign, while intended to be reassuring to the country on the tariff* is not
convincing on this point*
No where in that statement is there a specific
pledge to enact a protective tariff.
To be sure those who signed it promisee*
to disturb neither business nor the wage scale; but so did the Democratic
platform
of 1912, in accordance with which the Underwood tariff law was sub
sequently enacted*
So much for the Democratic position on the tariff.
The Republican
Party has never deviated from its historic attitude on this subject*
It has
always believed, and it believes today, that the tariff should provide adequate
prorfeootion from foreign competition*
Only in this way can we prevent the'
inundation of the American market with cheap products both manufactured and
agricultural, so that the American manufacturer and the American farmer shall
have the full benefit of the great market which has been built up*
■■ Our tariff policy has been largely responsible for the development of man
ufacturing in this country*
Our tariff policy and our immigration policy
have brought to labor the highest real wages in its history*
We have found
that,by the use of labor-saving machinery and by manufacturing in quantity, we
can increase the productive capacity per capita of labor and also eliminate
waste*
In this way we can pay high wages and still reduce costs, so that
the finished products are priced low enough to stimulate further consumption*
High wages, in turn, have raised the country* s purchasing po?/er; and, as a re
sult, we have today a domestic market of more than 115,000,000 people of great
consumption capacity*
In this market lies the industrial power of
America«
*1
* *3
4
Here also lies the power of American agriculture.
That market is at
the "base of all our prosperity and makes us, to a large extent, independent
of conditions outside of our own borders.
Furthermore, a study of the
consumption of the more common commodities in the United States in compari
son with total world production shows what .America1s purchasing power means
not only to industry and agriculture here, but to the rest of the world
also.
The population of the United States is 7 per cent of the total world
population*
Yet that 7 per cent consumed last year 48 per cent of the
world*s total production of coffee, 53 per cent of all the tin, 56 per cent
of the crude rubber, 21 per cent of the sugar, 72 per cent of all the raw
silk, 36 per cent of the coal, 42 per cent of the pig-iron, 47 per cent of
the copper, 69 per cent of the crude petroleum; and, out of nearly 30,000,000
automobiles in the world on January 1, 1928, over 23,000,000 were owned
in the United States.
In other words, in this country there is an
automobile for every five persons as compared with one for every 40 in
France and one for every 148 in Germany.
These figures are conclusive
proof of a national prosperity and a standard of living worthy of most
careful guarding.
Furthermore, the fact that the 7 per cent of the world* s population,
who live in the United States, should supply a market for such large propor
tions of the world*s total production of principal commodities is a consider
ation of the greatest importance to the world*s commerce, industry and em
ployment of labor.
During the fiscal year ending June 30, 1928, more
than four billion dollars of merchandise was imported into the United
States.
To those who have been misled into the belief that at present
5
foreign countries can not sell to the United States, it will no doubt "bo a
surprise to know that during the fiscal year 1928 no less than 65 per cent
of our total inports were entirely free of duty; and the fact that these
imports free of duty exceeded the average yearly total of all imports both
dutiable and free in the period 1910 to 1914 by more than 60 per cent, will
come as a revelation*
The United States is the largest customer in the world today*
If
we were not prosperous and were not able to buy, industry both here and in
Europe would suffer*
It is inconceivable to me that American labor,will
ever consent to the abolition of protection and allow the American standard
of living to be brought down to the level of Europe, or that the American
farmer could survive if the enormous consuming power of this country we re
curtailed and his home market destroyed*
Certainly it will never pay
us to break down the tariff barriers or to put into any hands, except those
of the true friends of the protective principle, the determination of a
question so vitally bound up with our progress and prosperity*
There is another issue closely allied to the tariff.
question of restrictive immigration*
That is the
By a selective immigration law, the
present Administration has prevented the flooding of the American market with
cheap labor*
Only in this way can we preserve the high wage scale made
possible by the protective tariff.
Only in this way also can we make sure
that new infiltrations into our population will be of a character easily assim
ilated*
The Democratic candidate, while proclaiming his belief in a re
strictive immigration policy, is opposed to the existing quota basis*
But it
should be pointed out that the present law is working in a satisfactory manner*
- 6 There is no occasion for change, except in so far as provisions can he modified
in the interest of uniting families or other purely humanitarian motives*
Most assuredly, a modified quota basis should not be used as ah entering wedge
for reopening the whole immigration question*
The Republican Party can be
depended upon to adhere to its present sound policy on this subject.
Another problem which confronts the countiy is that of agriculture.
The
Republican Party and the Republican candidate have stated definitely what they
will do in trying to solve this question.
They have long recognized that it
is a matter for most serious national concern.
It involves not only the
livelihood and prosperity of nearly one-third of the population but, by reason
of that very fact, it must affect also the other two-thirds from whom the
farmers must buy and to whom they must sell their products.
If the farming population is prosperous, the nation*s purchasing power is
increased.
It if,: therefore, a matter of vital concern both to the farmer
and to tne country generally that some way be found whereby the farmer* s
products can be produced, marketed and distributed with the least duplication
of effort and cost, so that the farmer may receive a greater share of the profits
and yet the consumer need not be obliged to pay a price so high as to cut down
consumption.
A way will be found of working this out.
The present Republican Admin
istration might have been able to advance further in the solution of this problem
if some of the farmer* s friends had not blocked all efforts not based upon the
specific plan of the "equalization fee".
But the fact that the farmers them
selves and their friends in the Government at Washington have so far not been
able to agree upon a plan, does not mean that this deadlock will continue.
Mr. Hoover has stated that he will call a conference of those who best understand
the nature of this problem; and, after a sound program has been evolved, I am
confident that it will receive the strong and united support of all those'who
have the best interest of the farmers at heart.
7 the Democratic candidate has offered nothing more than this except in so
far as he has committed himself to the equalization fee, if that he the case*
In omaha he came out in favor of the principle of the McRary-Haugen hill, which
is to take care of the surplus by assessing the cost upon the commodities bene
fited*
This is the equalization fee, in so far as the public understands
it; and, if Governor Smith intends to commit himself to this program, then not
only will he involve the United States Government in the business of buying and
selling agricultural products but he will fasten on agriculture itself a prying
and all-pervasive governmental bureaucracy which is full of menace not only to
the farmer but to our traditions of government*
This the Republican Administration has refused to do*
I t i s the friend
of the farmer and will do whatever seems to be in his real interest and that of
the country of which he is such a vital and important part#
But as a
business man and a Republican, I am distrustful of any candidate or any party
when they offer some recently discovered and miraculous cure-all for economic
ills*
It is not the first time in the heat of
a political campaign that
such a cure-all has been offered by Governor Smith’s party.
I referred be
fore to the "Dree Silver1' movement which the Democratic Party championed in
1896 - and under circumstances very similar to the present ones*
Those of
us who lived through that period remember the increasing difficulties in which
agriculture found itself throughout the 80!s and early 9C»s*
t*» an over-expansion of production in this country, coupled with
Due largely
a falling off
in the European demand for grain, the price of agricultural products continued
to drop throughout this period; the mortgage indebtedness of farm lands nearly
doubled.; and by 1893 the cost of raising wheat, corn and cotton exceeded the
prices received for those products*
A wave of despair swept over the South and West.
The farmers demanded
relief; and the party of Governor Smith seized upon the slogan of »Free Silver»
as a cure-all for the conditions which then prevailed.
It offered this cure-
all to the country», as interpreted By William Jennings Bryan; and on that issue
the campaign of 18S6 was fought out.
You remember how the country rallied to
William McKinley and the gold standard; and how a short time later, with sound
legislation and Broadening world markets, there came an increased demand for the
farmer5s products, so that agricultural prices of "both products and land again
moved upward to more satisfactory levels.
That v\ras the last that was heard of »Free Silver».
peating itself.
How history is re
.Again there is trouble in the farming industry from over-
expansion and lack of organization, and also from a decrease in the purchasing
power of Europe.
Again a cure-all is proposed - the McHary-Haugen principle-
and again it is seized upon and offered to the country hy the Democratic
standard-Bearer.
The Republican Party offers the other road and promises
to work out a sound program under which agriculture may Be put more nearly in a
position to meet modern conditions and to Bring to the farmer a larger share of
the profits accruing from his products.
Which road shall we take?
Whose
leadership shall we trust to lead the nation to a sound solution of this
proBlem?
The Republican party is now, as it always hns Been, the party of progress.
It has kept abreast of the times and has Been prepared to meet new conditions
as they arose.
Rut it has tested each forward step By the light of sound
economic principles and of established American traditions.
It has jealously
guarded and promoted individual initiative, which is perhaps the most powerful
contributing factor in the forward march.
It has ever recognized that motion
is not synonymous with progress But that stability is essential to confidence and
that confidence is the very spirit of Business enterprise.
Ho where,is this
9 more true than in the field of credit»
Credit is a delicate structure»
It is easily impaired or broken down by injurious laws and ill-advised policies
of government*
Any measure that tends to impede or divert the ordinary
channels of trade and commerce, or unduly burden industry, or to break down
values and threaten stability, or any policy that places the Government in com
petition with private enterprise, immediately results in impairing confidence
and curtailing business progress and ultimately must have an adverse effect
upon the development of the country and the welfare and prosperity of its
people»
The policies of the present Administration have been in line with these
general principles»
Under a balanced program of debt reduction and tax re
duction, the debt has been reduced by over six billion dollars and expenditures
and taxes have each been cut by more than five million dollars a day»
The
Administration has taken the necessary steps to safeguard industry and labor by
sound tariff and immigration legislation; it has encouraged and promoted foreign
trade; it has pursued a consistent foreign policy, supported at home and re
spected abroad; and it has helped in the stabilization of foreign currencies
and has thereby made sure that, in the change and flux of post-war conditions,
the gold standard of value shall be restored and continued unimpaired*
By all of these measures the Administration has helped to build up and
maintain prosperity»
But what is equally important, perhaps, it has refused
either to sponsor or to follow any economic heresies which, if adopted, might
have wrecked the delicate mechanism of credit or disrupted the established
channels of trade.
It has fought off attacks on our banking system, and has
opposed attempts to load it down with extraneous or impossible tasks»
It has
refused to throw in our lot with Europe or to become a part of the European
System*
On the other hand, it has never failed to assert our rights or to
cooperate in advancing world progress»
While refusing always to barter away
<!; flM -
.
- 10 -
our means of self-defense or to allow others to place us in a disadvantageous
position, it has taken care not to he stampeded into an increase in armaments
which neither our needs nor world conditions justify.
Some of these things
which I have cited are on the negative as well as the positive side of the
ledger, for good judgment consists as often in knowing what not to do as it
does in taking affirmative action.
As a Republican, I find myself in complete accord with the program which
ny Party has advanced to solve
the problems that confront us.
is in line with the best traditions of the Republican Party.
That program
At the same
time it would seem that an old line Democrat, with a.desire for a continuation
of progress along sound lines, would feel more justified today in voting for
the policies which Herbert Hoover and the Republican Party represent than for
those which have been accepted by the Democratic Party under its new leadership.
It is, after all, largely a question of leadership.
If president
Coolidge and the Republican Party' have conducted the Government in a way to
merit your approval, and if you are satisfied with a continuation of the present
policies under Mr. Hoover, then why change?
In ny own business experience,,
when a management gave me a satisfactory balance sheet at the end of the ^ear,
showing a reduction in over-head, a decrease in indebtedness and at the same
time an increase in dividends, I would have been very unwilling to see a changein management so long as the condition of the business continued satisfactory.
The Government of the United States is the greatest business enterprise
in the world*
It is infinitely complex both in its effect on the individual
lives of its citizens and in its relation to those great economic forces by
which the average m a u ^ welfare is so greatly affected.
At the nead of
that business I want to see a man of ability, who is thoroughly familiar with
all of its phases; I want to see a man who understands those economic forces
with which he mast deal; and lastly I want him to he a man who has a feeling
for and Sympathy with the conditions under which the average man and woman
must live, whether it he in the city or in the small town or on the farm.
Herbert Hoover measures up to all of these qualifications.
The Government
will he safe in his hands; and as a Republican and as an American I shall
support him and vote for him because I believe his election will do most
for the progress and prosperity of the country and for the larger welfare of
the world
TREASURY DEPARTMENT
FOR R E L E A S E ,MORNING- PAPERS
Thursday, November 1, 1928»
Secretary Mellon today made public the two following letters:
"THE REPUBLICAN NATIONAL COMMITTEE
2315 Mass. Ave,,
Wathìngtòh, D»C.
October 31, 1928.
The Honorable,
The* Secretary of the Treasury,
Washington, D.C.
Dear Mr. Secretary:
Eor partisan political purposes certain persons are again cir
culating reports impeaching the Hon. Herbert Hoover* s American citi
zenship • ,
Although these campaign slanders have repeatedly been refuted
by the records both in Great Britain and the United States, Mr.
Hoover* s opponents still persist in their circulation.
Eor the purpose of their further refutation, the Republican
National Committee is anxious to secure from you, as Secretary of
the Treasury, an official statement as to whether or not Mr. Hoover,
as an American citizen, has filed returns and paid taxes under the
Federal income tax law for every year since the enactment of that
law in 1913.
While Mr. Hoover is well aware of the fact that such returns
were filed, and such taxes paid by him, he assents to this request
m order that the public may be officially informed on the subject.
Your reply will be appreciated by
Yours very truly,
(Signed)
James Francis Burke
General Counsel,
Republican National Committee
- 2 -
"TREASTJET DEPARTMENT
Washington, D.C*
October 31, 1928*
Hon* James Francis Burke,
General Counsel Republican national Committee,
2315 Massachusetts Avenue,
Washington, D. C*
My dear Mr* Burke:
I have your letter of even date inquiring, as to whether or not
Honorable Herbert Hoover has filed income tax returns and has paid
income taxes as an .American citizen under the Federal ineome tax
laws for every year since the enactment of the law in 1913.
The records
Hoover has filed
the enactment of
American citizen
of the Bureau of Internal Revenue show that Mr*
income tax returns for each and every year since
the law, and that he has paid his taxes as an
in accordance with those returns*
I have personally inspected the returns of Mr. Hoover for the
years 1914 to 1925, inclusive, and I am informed by the Commissioner
of Internal Revenue that the records of the Bureau show that the re
turns for the years 1926 and 1927 are now in the hands of the Internal
Revenue Agent in Charge for the usual checking up, and that the taxes
have been paid to date*
While it is not customary to give out information in regard to
the income tax returns of individuals, I note from your letter that
Mr* Hoover assents to the request and I am glad to furnish you the
information*
Very truly yours,
(Signed)
A* W. Mellon
Secretary of the Treasury."
TREASURE. DEPARTIIENT
\| U
FOR RELEASE, MORNING PAPERS,
■ ^ 1
Monday, November 5, 1928.
, :.Y
r\ ...& "T* -r^
I
Statem ent by s e cre ta A - M ello n .
iBSwlá
The Campaign is drawing to a close, and the voters of the Nation are
faced with a serious responsibility.
As we go to the polls on Tuesday, let
us lay aside all feelings of bitterness and prejudice engendered by a heated
Campaign.
Let us think only in terms of the real issues, and cast our
ballots in accordance with our calm, considered judgment as to what is best
for the Country and for the people who conpose it.
It is indisputable that the Country is enjoying a period of genuine
prosperity and well being, to which the policies of the present Administration
have made a substantial contribution.
The Government at Washington has been
conducted on a high standard, whether judged by the test of administrative
efficiency or soundness of policy, both in the domestic and foreign field.
If
the people are satisfied with the kind and quality of Government they have had—
and I believe they are— they should ensure a continuance of its benefits by
retaining the services of those who have made good.
When conditions are
satisfactory, there is nothing more disturbing and damaging than a change of
management or of policy*
This is all the more true when the alternative policies offered by the
opposition are of doubtful wisdom and carry with them a real threat to con
fidence and business stability.
I do not believe we should substitute a
competitive for a protective tariff.
I do not believe that the Government
should go into the business of buying and selling agricultural commodities or
fixing their price, or undertake to operate public utilities, such as power
plants and distribution systems.
Nor am I satisfied to see adopted the
Il
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2
~
financial policies that have prevailed at XL"bans'- in place of the prudent
management that has existed in Washington under President Coolidge.
It is
not a question of choice "between two roads of equal availability; it is a
question of choosing the right road or the wrong one*
Finally, the Campaign has demonstrated that, by reason of his broader
experience, training and knowledge, and his closer contact with national
affairs, Mr* Hoover has a ranch firmer grasp and a more conprehensive under
standing of the Nation’s business and problems than are enjoyed by Governor
Smith#
We have the opportunity, by electing Mr. Hoover, to carry on the policies
of President Coolidge*
Let us take advantage of that opportunity and make
sure that the high standards that have characterized his Administration of the
Federal Government will be maintained and further developed.
FOR IMMEDIATE RELEASE,
November 7, 1928*
TREASURY DEPARTMENT
Statement "by the Secretary of the Treasury*
I am much gratified at the outcome of the election*
The country has
spoken and has expressed its confidence in the policies of the Republican
Party, as outlined hy Herbert Hoover during the campaign*
extraordinary tribute to Mr» Hoover himself*
It is also an
He goes to the Presidency
with a strong and united backing from all sections, such as few men in our
history have ever received*
The country has shown its belief in him and
its confidence in his ability to work out the problems which are ahead*
I feel sure that he will measure up to these great expectations.
He brings
to his task an extraordinary equipment and a record of success in many
difficult undertakings*
He knows conditions both here and abroad*
He
has demonstrated on many occasionshis capacity to analyze and to apply'
the proper remedy; and, from ny knowledge of him and of what he has
already done, I am confident that under his leadership the country will
be in safe hands and that he will make a President of whom we will be
proud
TREASURY DEPARTMENT
FOR IMMEDIATE RELEASE,
Friday, November 16, 1928
At the conference of Governors of the Federal Reserve Banks the
Treasury today stated its tentative plans for the issuance of the small
size currency which are subject to modifications after -the Governors
of the Federal Reserve Banks have had an opportunity to study them*
July, 1929, has been fixed as the time for the initial issue.
All kinds
of currency except National bank notes and all denominations from $1 to
$20 will be included in the initial issue and it is probable that the
higher denominations of gold certificates and Federal reserve notes will
be issued at the same time.
Issues of old-size United States currency by the Treasury will cease
about April 30, 1929, and thereafter for two months the currency demands
will be met by Federal Reserve Banks from their stock of new or circulated
old-size currency.
This may involve for a short period the circulation
of notes that would ordinarily be retired from circulation because of
their condition, but it is believed that the public will accept this as
a temporary measure rendered necessary by the plans for the change to
new-size currency and in this way will cooperate in facilitating the
carrying out of the program.
On July 1, 1929, there will be in the hands of the Federal Reserve
Banks ready for distribution a sufficient number of small-size bills of
the various kinds and denominations to meet the reasonable demands.
It
will probably be necessary for a period of time to allocate distribution
so that for several weeks a certain proportion of old-size currency will
-
2
-
remain in circulation, due to the problems involved in the cancellation
and redemption of the old-size currency.
At as early a date as is possible,
however, the Treasury will require the redemption of all outstanding oldsize currency as rapidly as it reaches the Federal Reserve Banks.
The issuance of the new-size currency will be through the Federal
Reserve Banks and their branches.
The Secretary of the Treasury will later issue a further public
statement definitely fixing the issue date and method of distribution.
Full detal Is will thereafter be furnished the individual banks by the
Federal Reserve Bank of the district from time to time as required.
Advance orders for currency cannot be accepted by the Treasury
from individual banks or others, as the distribution will be handled
through the Federal Reserve Banks in the manner above indicated.
National bank currency will not be included in the initial dis
tribution.
It was originally contemplated at the time of the creation
of the Federal Reserve System that this currency should be retired.
However, since a considerable period of time has elapsed, the Secretary
of the Treasury 'deems it advisable to submit the matter to the Coigress
for its further consideration at the next session.
Should the Congress
determine that the National bank currency is to be continued in circula
tion, the Department will be prepared to begin production of National bank
currency in the reduced size early in the fiscal year
on July 1, next.
1930
which begins
THE TMDERSE CKETARY OF THE THEASUHI
Washington
November 26, 1928*
To Heads of Bureaus and Offices and Chiefs of Divisions,
Secretary*s Office, Treasury Departments
There appears to he a growing practice on the part of
certain administrative officers of dealing, hoth formally and
informally, with officials of the Bureau of the Budget on matters
concerning Treasury appropriations, estimates, receipts, expenditures
and related subjects*
Such practice should he discontinued, and in
future all such matters will he dealt with hy or through the Treasury
Department Budget Officer.
Where representatives of the Bureau of
the Budget deal informally with Treasury administrative officers,
report of the subject matter should he made to the Treasury Budget
Officer in order that he may he kept fully informed at all times
in all such matters*
Laxity has developed in the requirement that requests for
opinions of the Attorney General or for decisions of the Comptroller
General should he prepared for the signature of the Secretary of the
Treasury «»d routed through the Division of Bookkeeping and Warrants*
Administrative officers are cautioned to comply fully with this re
quirement*
OGDEN L* MILLS
Undersecretary of the Treasury and
Budget Officer*
TREASURE DEPART!'®HT
POE IMMEDIATE RELEASE
Saturday, December 1,1928
The Secretary of the Treasury announces:
Pinal steps were taken today in connection with the funding
of the indebtedness of the Kingdom of the Serbs, Croats and Slovenes to
the United States,
Mr. Bojidar Pouritch, Counselor of the Legation of the Serbs,
Croats and Slovenes and Charge d*Affaires ad interim at Washington delivered
to the Treasury sixty-two gold bonds of his Government in the principal
amount of $62,850,000, receiving in exchange original obligations given by
his Government in connect ion with cash advances and surplus war materials
sold by the United States Liquidation Commission (War Department).
The Act approving the debt settlement of the Government of
the Kingdom of the Serbs, Croats and Slovenes was signed by the President
on March 30, 1928,
The settlement has likewise been approved by the
Government of the Kingdom of the Serbs, Croats and Slovenes.
FOB KELEASE, MOBFIFO- PAPEBS
Friday, December 7, 1928.
THEAEUBY DEPARTO.IHIFT
STATE!ISFT BY SECBETABY KELLOF
The Treasury is today announcing its regular December finahc
ing, which takes the form of an offering of Treasury certificates of
indebtedness in two series, both dated and bearing interest from December
15, 1928, at the rate of 4J- per cent, one series being for 9 months,
maturing September 15, 1929, and the other series being for 12 months
and maturing December 15, 1929.
The amount of the nine monthsr offer
ing is $200,000,000, or thereabouts, and the amount of the twelve months1
offering is $300,000,000, or thereabouts.
The Treasury will accept in payment for the new certificates,
at par, Treasury certificates of indebtedness of Series TD-1928, TD2—1928
and TD3-1928, all maturing: December 15, 1928.
Subscriptions for which
payment is to be tendered in certificates of indebtedness maturing
December 15, 1928, will be allotted in full up to the amount of the
respective offerings.
About $570,000,000 of Treasury certificates of indebtedness
oecorae paya
payments on the publie debt become payable on December 15th.
the Treasury's requirements up to March 15, 1929
The text of the official circular follows:
~2~
The Secretary of the Treasury, under the authority of the Act
approved September 24, 1917, as amended, offers for subscription, at
par and accrued interest, through the Federal Reserve Banks, Treasury
certificates of indebtedness, in two series, both dated and bearing
interest from December 15, 1928, the certificates of Series T32-1929
being payable on September 15, 1929, with interest at the rate of four
and one-quarter per- cent per annum, payable on a semiannual basis, and
the certificates of Series TD-1929 being payable on December 15, 1929,
with interest at the rate of fodr and one-quarter per cent per annum,
payable semiannually.
Applications will be received at the Federal Reserve Banks.
Bearer certificates will be issued in denominations of $500,
$1,000, $5,000, $10,000, and $100,000.
The certificates of Series
TS2-1929 will have two interest coupons attached, payable March 15, 1929,
and September 15, 1929, and the certificates of Series TD-1929 two in
terest coupons attached/ payable June 15, 1929, and December 15, 1929.
The certificates of said series shall be exempt, both as to
principal and interest, from all taxation now or hereafter imposed by
the United States, any State, *r any of the possessions ef the United
States, or by any local taxing authority, except (a) estate or inheritance
taxes, and (b) graduated additional income taxes, commonly known as
surtaxes, and excess-profits and war-profits taxes, now or hereafter
imposed by the United States, upon the income or profits of individuals,
partnerships, associations, or corporations.
The interest on an amount
of bonds and certificates authorized by said act approved September 24,
3LS
-3-
1917, and amendments thereto, the principal of which does not exceed
in the aggregate $5,000, owned by any individual, partnership, associa
tion, or corporation, shall he exempt from the taxes provided for in
clause (h) above.
The certificates of these series will he accepted
at par during such time and under such rules and regulations as shall
he prescribed or approved by the Secretary of the Treasury, in payment
of income and profits taxes payable at the maturity of the certificates.
The certificates of these series will be acceptable to secure deposits
of public moneys, but will not bear the circulation privilege.
The right is reserved to reject any subscription and to allot
less than the amount of certificates of either or both series applied
for and to close the subscriptions as to either or both series at any
time without notice.
The Secretary of the Treasury also reserves the
right to make allotment in full upon applications for smaller amounts,
and to make reduced allotments upon, or to reject, applications for
larger amounts, and to make classified allotments and allotments upon
a graduated scale; and his action in these respects will be final*
Allotment notices will bo sent out promptly upon allotment, and the
basis of the allotment will be publicly announced.
Payment at par and accrued interest for certificates allotted
must be made on or before December 15, 1928, or on later allotment.
After allotment and upon payment Federal Reserve Banks may issue interim
receipts pending delivery of the definitive certificates.
Any qualified
depositary will be permitted to make payment by credit for certificates
allotted, to it for itself and its customers up to any amount for which
it shall he'qualified in excess of existing deposits, when so notified
by the Federal Reserve Bank of its district.
Treasury certificates of
indebtedness of Series TD-1928, TD2-1928, and TD3-1928, all maturing
December 15, 1928, will bo accepted at par in payment for any certifi
cates of the series now offered which shall be subscribed for and
allotted, with an adjustment of the interest accrued, if any, on tho
certificates of the series so paid for.
As fiscal agents of tho United States, Federal Reserve Banks
are authorized and requested to receive subscriptions and to make allot
ments on the basis and up to the amounts indicated by the Secretary of
the Treasury to the Federal Reserve Banks of tho respective districts.
TREASURE DEPARTMENT
FOR RELEASE '.THEN PRESENTED
Friday aL L£‘30 tk.lt?. f\ h T C
ft R h
P
Statement by Under sec re tary of the Treasury Mills "before the
Lays and Means Committee, Friday, December 7, 1928, submitting
a proposed agreement for the settlement of the Relief Indebted
ness of Austria to the United States.
At the last session of Congress, in response to a message from the president,
House Joint Resolution 247 was introduced by Mr. Burton and reported by the
and Means Committee to the House.
W ays
Under the terms of the resolution, the Sec
retary of the Treasury is authorized, in cooperation with the other so-called
Relief Creditor Governments, to subordinate the lien of the United States upon
the assets and revenues of Austria pledged for the payment of the Austrian Relief
Bond held by the United States to a lien upon such assets .and revenues as may be
pledged for^the payment of one or more loans floated by Austria in an aggregate
net amount of not more than 725,000,000 Austrian schillings and for a period of
not more than thirty years; and the Secretary of the Treasury is further author
ized, with the approval of the President, to conclude an agreement for the
settlement of the indebtedness of Austria to the United States.
At the time of the heading before the 'Jays and Means Committee on House
Joint Resolution £47 in April, 1928, negotiations for the settlement of the
Austrian debt with the Relief Creditors were proceeding, but inasmuch as there
are nine Relief Creditors, and Austria is obligated to settle with them all on
the same basis, until an agreement with other creditors was actually reached,
the Treasury Department' was not in a position to submit to the Congress the
terms of a proposed agre'ement for the settlement of the Relief indebtedness to
the United States.
2
Now, however, the settlement proposed "by the Austrian G-overnment has been
accepted by seven of the nine creditor nations, namely, Denmark, Prance, Great
Britain, The Netherlands, Norway, Sweden, and Switzerland*
Negotiations with
Italy, to whom Austria makes a similar offer of settlement, are now being carried
on.
So that the Secretary of the Treasury is at the present time enabled to
submit to the Congress the agreement for the settlement of the Relief indebted
ness of Austria to the United States, which he is prepared to execute should the
Congress grant him the authority*
The Committee will remember that all of the Relief Bonds are of similar
tenor and contain the following clause:
"The Government of Austria agrees that no payment will be made upon
or in respect of any of the obligations of said series issued by the
Government of Austria before, at or after, maturity, whether for
principal or for interest, unless a similar payment' shall simultan
eously be made upon all obligations of the said series issued by the
Government of Austria in proportion to the respective obligations of
said series*".
The terms of settlement, therefore, offered the United States are the
precise terms offered the other creditor governments and already accepted by
seven of them*
The principal of the indebtedness of Austria to the United States amounts
to $24,055,708*92.
The bond matures by extension in 1943 and bears 6vo interest.
With interest at 6$, the total indebtedness as of Januaryr 1, 1928, is
$34,630,968*68*
However, the other Relief Creditors reduced the interest
rate to 5^o on January 1, 1925*
If we make a corresponding adjustment in our
interest rate, the total indebtedness, principal and interest, as of January
1, 1928, amounts to $33,911,904.39.
In settlement of this indebtedness, Austria offers to pay, beginning on
January 1, 1943, twentjj^r^irly annuities of $1,337,140, reserving the option,
however, to substitute the following schedule of payments:
five yearly pay
ments of $287,556, beginning January 1, 1929; ten yearly payments of $460,093,
- 3 ■beginning January 1, 1934; and twenty-five yearly payments of $743,047, Pe
ginning January 1, 1944.
On a "basis of 5$, the present-day value of the smaller payments to he
begun on January 1st next under the alternative schedule is the same as that
of the larger and postponed payments to he begun January 1, 1943*
I may adcl that the Austrian (Government has informed us it means to exercise
the option*
In this event, the payments are to he subject to the following provision;
’’provided, however, That if Austria shall exercise this option
the obligation of Austria to pay annuities during the years
1929 to 1943 will in the case of each annuity not arise if the
Trustees of the Reconstruction Loan of 1923 prior to the preceding
December first have raised objection to the payment of the annuity
in question on the due da.te. To the extent, if any, that ary such
annuity is not paid by reason of such objection on the part of the
Trustees, the amount thereof together with interest p.% 5 per cent per
annum compounded annually to December 31, 1943, shall be repaid
together with further interest at 5 per cent per annum by twenty*1*
five equal annuities on January 1 of each of the years 1944 to 1968
inclusive. Austria shall issue its bonds to the United States for
each of the twenty—five annuities similar in form to the bonds first
to be issued hereunder, but dated January 1, 1943, bearing interest
at the rate of 5 per cent per annum, and maturing serially on January
1st of each succeeding year."
This provision is made necessary by the fact that under the terms of the
so-cailed.Lodge Resolution priority over the lien which the United States holds
was granted to the bonds of the so-called Reconstruction Loan of 1923, which
matures in 1943.
On a basis of 4~$, the present-day value of the payments proposed under
the option is 30.2$ of $33,911,904.39.
This total is reached, you will remember,
by figuring interest at 6$ to January 1, 1925, and 5$ to January 1, 1928*
This
compares favorably with the present-day value of 24.6$ of the amount due provided
for in the debt settlement agreement with Italy, and of 30.3$ in that with
Jugoslavia.
If, however, we figure past interest on the basis, let us say, of
the Belgian settlement, the total amount owed is $30,383,562.70 and the presentday value of the proposed payments is 33.7$ of this amount.
The Treasury feels that Austria’s offer of settlement is a fair and
reasonable one.
Austria is a small country with very limited resources.
Her
economic system was dislocated and torn apart by the dismemberment of the old
Austrian Empire.
‘»That was previously a large self-sufficient economic entity
became a number of independent units separated by political frontiers and trade
barriers.
About one-third of a population of some 6,500,000 is concentrated
in the city of Vienna.
About one-half of the total area of Austria is used
for agricultural purposes.
The rest consists of forests and unproductive land.
While progress is being made in agricultural development, Austria does not
produce enough for her own needs and has to import large quantities of foodstuffs.
There is iron ore in the country, but the development of the steel and iron in
dustry is handicapped by the entire lack of coal.
This shortage of coal is a
serious handicap to industry and the large coal imports exercise an adverse
effect on trade balances.
Austria has two important assets, extensive forests,
which have led to the building up of paper and paper products industry, and
abundant water-power, which, however, needs capital for development.
The trade balance has been consistently adverse.
exports by $156,000,000; in 1927 by $155,000,000.
In 1926 imports exceeded
This, of course, makes
foreign payments over a term of years difficult, if not impossible were it not
for the so-called invisible items, such as tourists’ expenditures, emigrant re
mittances, traffic receipts, etc*, which up to the present time have been
sufficient to offset the adverse trade balance, to which mast be added about
$30,000,000 a year which Austria has to send abroad to cover the service of
her foreign debts, including the Reconstruction Loan but not the Relief Debts.
Unemployment is a serious problem.
there were over 200,000 unemployed.
At the end of 1925, 1926, and 1927
How low the standard of living must be
- 5 is indicated by an estimated per-capita income of only $157 and the following
table of wages:
TTages of bricklayers and masons per week as of July, 1928:
Vienna,
$ 9.99
Berlin,
16.25
London,
20.20
Philadelphia, 78.00
Jages of metal workers in Vienna:
Skilled workers, per week,
Auxiliary workers,”
n
Unskilled workers,”
”
$10.00
9.00
7.p0
Relative real wages as of July, 1928, taken from the International
Labor Review, which uses the London figures as the standard, are;
London,
100
Philadelphia, 179
Prague,
48
V ienna,
48
The revenue of the federal government as estimated in the 1929 budget
amounts to $187,000,000, of which $38,000,000 are to be transferred to the
provinces and towns.
Approximately $46,000,000 are derived from direct taxes
and approximately $141,000,000 from indirect taxes.
The maximum income-tax
rate on individuals is 45$, and the exemption $200.
The corporation income-
tax rate is 25$.
Out of a population of some 6,500,000 there are 2,100,000
individuals pairing income tax as compared with 2,471,000 in the United States
out of a population of 120,000,000.
Of those paying income tax, 610,000
report an income of $286 or less, 525,000 an income of $430 or less, 462,000
an income of $686 or less, 357,000 an income of■$1,460 or less, 105,000 an in
come of $3,100 or less, and*42,000 people report an income in excess of $3,100.
The public debts of Austria are as follows:
Reconstruction Loan,
$139,000,000; pre-war debts, $33,000,000; Relief Creditors, $178,000,000; owed
to the national Bank, $16;700,000, or a total of $366,700,000, to which mast be
added the debts of the provinces and towns, amounting to $72,000,000.
The cost of the debt service amounts to $29,700,000 a year, of which
$22,700,000 must be paid abroad, to which foreign payments the payments on the
debts of the provinces and towns amounting to about $8,000,000 should be added.
— b —
The Budget has been "balanced for the last three years, if we exclude the
amounts set aside for capital investments*
Thus in 1927 the total revenue
amounted to $157,000,000, current expenditures amounted to $141,00€,-000* but *•>
020,000,000 in addition was spent on so-called productive investments such as
railroad reconstruction*
The currency has been stabilized and the position
of their national Bank has been inproving steadily.
The problem of payment of Austria’s foreign Relief Debt is not primarily
a budgetary but an economic one*
As already stated, in so far as current ex
penditures are concerned, the budget can fairly be said to be balanced*
The
difficulty is that, as explained to the Committee last spring, Austria needs
to expend a very considerable sum for the rehabilitation of her physical plant,
more particularly her railroad, telephone and telegraph lines*
budget is not adequate to furnish the necessary funds.
The Austrian
The private capital
available for investment in Austria is totally inadequate*
It is necessary,
therefore, for Austria to borrow the needed capital abroad, and this cannot be
done unless the investments are productive and secondly unless the character
of the investments themselves is such as to furnish the means of meeting in
terest and sinking fund payments s.broad in foreign currencies.
increase her productive capacity*
Austria must
In order to increase her productive capacity
she must have new capital from abroad*
She cannot obtain that new capital
from abroad, unless the Relief Creditors are willing to enable her to do so by :
making a reasonable settlement of the existing indebtedness.
From which it
follows that an unreasonable and exacting attitude on the part of her creditors
Eiay well inpair their own ability ultimately to collect their debt when it
falls due in 1943.
ïïo one knows better than the members of this Committee how impossible it
is to estimate with any exactitude capacity to pay*
The facts and figures
presented are not conclusive, but they do serve to outline the general situation
- 7 and indicate clearly enough that Austria is not in a position to meet heavy
payments*
In this connection, it cannot he overlooked that the European creditors,
who presumably are more familiar with Austria’s capacity than we are and whose
own needs are certainly greater than ours, have agreed that this is all that
Austria can fairly he asked to pay*
Taking this as well as all other circum
stances into consideration, the State and Treasury Departments are strongly of
the opinion that Austria1s offer should he accepted*
The proposed settlement has heen submitted to the former members of the
Foreign Debt Commission who are in Washington and met with their unanimous
approval*
I submit herewith the proposed agreement and the proposed terms of renewal
bonds, together with a list of Relief Creditors, the amounts owed each, and the
amounts they will receive under the terms of the settlement.
A G R E E M E N T ,
Made the
day of
, 1929» at the City ofWashington, District of Columbia, "between THE HEDERAL
GQ-rmz&m op
t h e u n i t e d s t a t e s o e Am e r i c a , hereinafter called the United States, party of the second
part.
WHEREAS, Austria is indebted to the United States
as of January 1, 192S, upon an obligation designated as
bondNo. 1, Relief series B of 1920 in the principal amount
of $2H,055>708.92, together with interest accrued and unpaid
thereon; and
WHEREAS, Austria
to the United States,
the issue of bonds to
is prepared to accept
after set forth;
desires to liquidate said indebtedness
both interest and principal, through
the United States, and the United States
bonds from Austria upon the terms herein
Now, therefore, in consideration of the premises and of
the mutual covenants herein contained, it is agreed as follows:
1.
Amount of Indebtedness.— The amount of indebtedness
to be liquidated is $3^> 630,968. 6S which has been computed
as follows:
Principal of relief obligations ....... *.... $2H,055*702.92
Accrued and unpaid interest from
September H, 1920 to January 1,
I 92S at 6fo per a n n u m .....
Total indebtedness as of
January 1, 1928
10,575,259-76
$34,630,968.68
~2>
2.
of th e
P a y m e n t .— I n o r d e r
indebtedness,
to p r o v i d e
Austria agrees
fo r t h e l i q u i d a t i o n
to p a y a n d t h e U n i t e d
S t a t e s to a c c e p t th e s u m o f $ 3 3 »428> 5^0, to h e p a i d i n
t w e n t y - f i v e e q u a l a n n u a l i n s t a l l m e n t s o f $l,337>l40 each,
o n the f i r s t d a y of J a n u a r y 1 9 4 3 & & & o n the f i r s t d a y o f
J a n u a r y o f e a c h o f th e s u b s e q u e n t y e a r s to 1 9 6 7 i n c l u s i v e .
I n l i e u of t h e s e
t w e n t y - f i v e p a y m e n t s A u s t r i a ma y ,
opti o n ,
the U n i t e d
i s s u e to
States,
at par ,
bonds
at
its
of Austria
i n th e a g g r e g a t e p r i n c i p a l a m o u n t of $ 2 4 , 6 l 4 , 2 2 5 , d a t e d
J a n u a r y 1, 1922, a n d m a t u r i n g s e r i a l l y o n the s e v e r a l d a t e s
a n d i n the a m o u n t s
.’.fixed i n t h e
January 1
1929
1930
1931
1932
1933
193*+
1935
1936
1937
193 s
1939
1940
19^1
19 U 2
19^3
1944
19H5
1946
U
19 7
1942
$ 227 ,556.00
227.556.00
227.556.00
227.556.00
227.556.00
4 60.093.00
460.093.00
460.093.00
460.093.00
460.093.00
460.093.00
460.093.00
460.093.00
460.093.00
460.093.00
743.047.00
743.047.00
743.047.00
743.047.00
743.047.00
following
schedule
:
January 1
19^9 .........
1950 .........
1951 .........
1952 ........
1953
1964 »........
1955 .........
1956
1957 ..........
1958 ..........
1959
i960 .........
1961 ..........
1962 .........
1963 .........
1964 -.........
1965 .........
1966
1967 .........
196S .........
$7^ 3 ,0^ 7.00
7^ 3 .0^ 7.00
7^ 3 ,0^ 7.00
7^ 3 »0H 7 .00
7^ 3 ,0^ 7.00
7U3,047.00
743,047.00
743,0^7.00
743,047.00
743,047.00
743,047.00
743,047.00
743,047.00
743,047.00
743,047.00
743,047.00
743,047.00
743,047.00
743,047.00
743,047.00
225.00
$24, ‘614' ,
PROVIDED, HOWEVER, That if Austria shall exercise this
option, the obligation of Austria to pay annuities during the
years 1929 to 1943 will in the case of each annuity not arise
if the Trustees of the Reconstruction Loan of 1 9 2 3 prior to
the preceding December first have raised objection to the payment
of the annuity in question on the due date. To the extent, if
any, that any such annuity is not paid by reason of such objection
on the part of the Trustees, the amount thereof together with
interest at 5 per cent per annum compounded annually to December Jl,
1943 shall be repaid together with further interest at 5 per cent
per annum by twenty-five equal annuities on January 1 of each of
the years. 1944 to 1968 inclusive. Austria shall issue its bond
to the United States for each of the twenty-five annuities
- 3 -
similar in form to the bonds first to be issued hereunder, but
dated January 1, 19^3» bearing interest at the rate of 5 P er cent
per annum, and maturing serially on January 1st of each succeeding
year.
Austria agrees that no payment shall be made upon or
in respect of any of its obligations issued to the Relief
Creditor Nations, to wit, Denmark, Prance, G-reat Britain,
Holland, Italy, Norway, Sweden and Switzerland before, at or
after maturity, whether for principal or for interest, unless
a similar and proportionate payment shall simultaneously be
made upon the relief indebtedness of Austria to the United
States as set forth above.
3. Form of Bond.— All bonds issued or to be issued
hereunder to the United States shall be payable to the
Government of the United States of America, or order, and
shall be signed for Austria by its duly authorized repre
sentative. The bonds to be dated January 1, 1928 and ma
turing January 1, 1929 and annually thereafter to January 1,
19^+3 inclusive shall be substantially in the form set forth
in the exhibit hereto annexed and marked ’’Exhibit A ” , and
shall be issued in fifteen pieces with maturities and in
denominations as hereinabove set forth and shall bear no
interest except that in the event that any bond is not paid
on the date of its maturity, interest shall be paid as
specified in paragraph 2 e.bove.
The bonds to be dhted
January 1, 1928 and maturing January 1, 1.04f and annually
thereafter to January 1, 1968 inclusive shall be substantially
in the fora set forth in the exhibit hereto annexed and marked
’’Exhibit 3.”, and shall be Issued in twenty-five pieces with
maturities and in denominations as hereinabove set forth
and shall bear no interest.
4. Method of Payment.— All bonds issued or to be issued
hereunder shall be payable, as to both principal and interest,
in United States gold coin of the present standard of .value, or
at the option of Austria, upon not less than thirty days’ advance
notice to the United States, in any obligations of the United
•States issued after April 6, 1917» to be token at par and accrued
interest to the date of payment hereunder.
All payments, whether in cash or in obligations of the
United States, to be made by Austria on account of the prin
cipal of or interest on any bonds issued or to be issued here
under and held by the United Stotes, shall be made at the
Treasury of the United States in Washington, or, at the option
of the Secretary of the Treasury of the United States, at the
Federal Reserve Bank of Hew York, and if in cash shall "be made
in funds immediately available on the date of maturity, or if
in obligations of the United States shall be in form acceptable
to the Secretary of the Treasury of the United States under
the general regulations of the Treasury Department governing
transactions in United States obligations.
5* Exemption from Taxation.— The principal and.interest
of all bonds issued or to be issued hereunder shall be paid
without deduction for, and shall be exempt from, any and all
taxes or other public dues, present or future, imposed by or
under authority of Austria or any political or local taxing
authority within Austria.
6. Security.— Austria represents that the Reparation
Commission, pursuant to the powers conferred upon it, has
recognized that the bonds to be issued under this Agreement
shall enjoy the same security as the bonds of Relief Series
B of 1920, and shall be a first charge up or. all the assets
and revenues of Austria, and shall have priority over costs of
reparation under the Treaty of Saint-Germain, or under any
treaty or agreement supplementary thereto, or under any arrange
ments concluded between Austria and the Allied and Associated
Powers during the armistice signed on November 3> 1912, and
the Austrian Government agrees that nothing in this agreement
shall prejudice or affect the provisions contained in the bonds
of Relief Series B of 1920 constituting such bonds a first charge
upon all the assets and revenues of Austria (without prejudice,
however, to the lien enjoyed by the Reconstruction Loan of 1923 ),
so that if the Government of Austria should at any time without the
assent of the holder of this bond pay or attempt to pay any sum
whether in respect of reparation or by way of compensation for any
non-fulfilment of the obligations of Austria under Article 18U
of the said Treaty, the amount owing under the terms of Bond No. 1,
Relief Series B of 1920 for principal moneys and for any arrears
of interest thereon at 6 per cent per annum, compounded semi
annually fro]*n September U, 1920 to January 1, 1925 and thereafter
at 5 P©r cent per annum, compounded annually, shall forthwith
be paid in cash by the Austrian Government in priority to any
such payments under the said Treaty.
7. Compliance with Legal Requirements.— Austria represents
and agrees that the execution and delivery of this Agreement
have in all respects *r been duly authorized and that all acts,
conditions, and legal formalities which should have been com
pleted prior to the making of this Agreement have been completed
as required by the laws of Austria and in conformity therewith.
- R -
8. Cancellation, and Surrender of Obligations — Upon the
execution of this Agreement, the delivery to the United States
of the principal amount of bonds of Austria to be issued here
under, together with satisfactory evidence of authority for the
execution of this Agreement by the representative of Austria and
for the execution of the bonds to be issued hereunder, the United
States will cancel and surrender to Austria at the Treasury of
the United States in Washington, the relief obligation of Austria
now held by the United States.
9.
’ Notices.— Any notice, request, or consent under the
hand of the Secretary of the Treasury of the United State*,
shall be deemed and taken as the notice, request or consent
of the United States, and shall be sufficient if delivered
at the Legation of Austria at Washington or at the office of
the Ministry of Finance at Vienna; and any notice, request, or
election from or by Austria shall be sufficient if delivered
to’the American Legation at Vienna or to the Secretary of the
Treasury at the Treasury of the United States in Washington.
The United States in its discretion may waive any notice re
quired hereunder, but any such waiver shall be in writing and
shall not extend to or affect any subsequent notice or impair
any right of the United States to require notice hereunder.
10. Counterparts.— This Agreement shall be executed in
two counterparts, each of which shall have the force and effect
of an original.
IN WITNESS WHEREOF Austria has caused this Agreement to
be executed on its behalf by its duly authorized representative
at Washington, and the United States has likewise caused this
Agreement to be executed on its behalf by the Secretary of the
Treasury, with the approval of the President, pursuant to the
Act of Congress approved
’
all on the day
and the year first above written.
THE FEDERAL GOVERNMENT OF THE REPUBLIC OF AUSTRIA
BY
THE GOVERNMENT OF THE UNITED STATES OF AMERICA
BY
Secretary of the Treasury.
Approved:
President.
6
EXHIBIT A.
(Form of Bond 1929-19^3)
THE REPUBLIC OF AUSTRIA
Series B-1920, Ho.
(Renewal Bond)
The Republic of Austria, hereinafter called Austria, for
value received, promises to pay to the Government of the
United States of America, hereinafter called the United States,
or order, cn January 1,
, the sum of
*
Dollars
($
).
Th?i 3 bond is payable as to both principal
and interest in gold coin of the United States of America of
the present standard of value, or, at the option of Austria, upon
not less than thirty days* advance notice to the United States,
in any obligations of the United States issued after April 6 , 1917»
to be taken at par and accrued interest to the date o f payment
hereunder, nevertheless, the obligation of Austria to pay this
bond shall not arise if the Trustees of the League of Rations Loan
have, prior to the first day of December preceding the maturity
date of this bond, raised objection to the payment of this bond
on the due date. If this bond is not paid on its due date by
reason of such objection on the part of the Trustees, the amount
thereof, together with interest at 5 P er cent compounded annually
to January 1, 19^3» shall be repaid, together with further interest
at 5 P er cent in twenty-five equal annual installments on the
first of January of each of the years 19^+ to I96S inclusive.
This bond is payable as to both principal and interest without
deduction for, and is exempt from, any and all taxes and other
charges, present or future, imposed by or under authority of
Austria or its possessions or any political or taxing authority
within Austria. This bond is payable as to both principal and
interest at the Treasury of the United States in Washington, D. C.,
or at the option of the Secretary of the Treasury of the United
States at the Federal Reserve Bank of Hew York.
This obligation is one of a series of obligations of similar
tenor but in different amounts and payable in different currencies,
designated as ’’Relief Series B of 1920 (Renewal Bonds)”.
Austria agrees that no payment will be made upon or in respect
of any of the obligations of the ’’Relief Bond Series B-1920” due
on January 1, '1925 ,or upon or in respect of any of the obligations
’’Relief Series B of 1920 (Renewal Bonds)” or of any other obliga
tions issued by Austria in renewal of the said ’’Relief Bonds Series
B-1920” before, at, or after maturity, whether for principal or for
interest, unless a similar payment shall simultaneoulsy be made
-
7 -
upon all the obligations of ’’Relief Series B of 1920 (Renewal
Bonds)” issued by Austria in proportion to the respective obliga
tions of said series.
The payment of this obligation is secured in the same manner
and to the same extent as the obligation of Austria in the prin
cipal amount of $24-,055*708*92* designated as Bond No. 1, Relief
Series B of 1920.
Austria agrees that if at any time it should pay or attempt
to pay any sum whether in respect of reparation or by way of
compensation for any non-fulfilment of the obligations of Austria
under Article 184 of the said Treaty, the emount owing under the
terms of Bond Ho. 1, Relief Series B of 1920 for principal moneys
and for any arrears of interest thereon at 6 per cent per annum,
compounded semi-annually ffom September ^4, 1920 to January 1,
1925 and thereafter at 5 per cent per annum, compounded annually,
shall forthwith be paid in cash by the'Austrian Government in
priority to any such payments under the said Treaty.
This bond is issued under an Agreement dated
between Austria and the United States, to which this bond is subject
and to which reference is made for a further statement of its terms
and conditions.
IH WITNESS WHEREOE, Austria has caused this bond to be executed
in its behalf at the City of Washington, District of Columbia, by
its duly authorized representative at Washington.
THE GOVERNMENT OE THE REPUBLIC OE AUSTRIA:
BY
Dated January 1, 1928.
- S EXHIBIT 3.
(Form of Bond
19HI+-19b3)
THE REPUBLIC OE AUSTRIA
Series 3-1920, Uo.
(Renewal Bond)
The Republic of Austria, hereinafter called Austria, for
value received, promises to pay to the Government of the
United States of America, hereinafter called the United States,
or order, on January 1,
, the sum of
Dollars
($
). This bond is payable as to both principal
and interest in gold coin of the United States of America of
the present standard of value, or, at the option of Austria,, upon
not less than thirty days’ advance notice to the United States,
in any obligations of the United States issued after April b, 1917»
to be taken at par and accrued interest to the date of payment
hereunder«
This bond is payable without deduction for, and is exempt from,
any and all taxes and other charges, present or future, imposed
by or under authority ox Austria or its possessions or any polit
ical or taxing authority within Austria«; This bond is payable
as to both principal and interest at the Treasury of the United
States in Washington, D. C., or at the option of the Secretary of
the Treasury of the United States at the Federal Reserve Bank of
Hew York,
This obligation is one of a series of obligations of similar
tenor but in different amounts and payable in different currencies,
designated as ’’Relief Series B of 1920 (Renewal Bonds)”.
Austria agrees that no payment will be made upon or in.respect
of any of the obligations of the "Relief Bond Series 3-1920” due
on January 1, 1925» or upon or in respect of any of the obligations
"Relief Series B of 1920 (Renewal Bonds)" or of any other obliga
tions issued by Austria in renewal of the said "Relief Bonds
Series 3-1920" before, at, or after maturity* whether for princi
pal or for interest, unless a similar payment shall simultaneously
be made upon all the obligations of "Relief Series B of 1920
(Renewal Bonds)" issued by Austria in proportion to the respective
obligations of said series.
The payment of this obligation is secured in the same manner
and to the same extent as the obligation of Austria in the prin
cipal amount of $2^,055»702.92, designated as Bond Ho. 1, Relief
Series 3 of 1920.
- 3 -
/
Austria agrees that if at any time it should pay or attempt
to pay any sum whether in respect of reparation or by way of
compensation for any non-fulfilment of the obligations of Austria
under Article 1SU of the said Treaty, the amount owing under the
terms of Bond No. 1, Relief Series B of 1920 for principal moneys
and for any arrears of interest thereon at 6 per cent per annum,
compounded semi-annually from September 4, 1920 to January 1» 1925
and thereafter at 5 per cent per annum, compounded annually, shall
forthwith be pa,id in cash by the Austrian Government in priority
to any such payments under the said Treaty.
This bond is issued under an Agreement dated
between Austria and the United States * to which this bond is subject
and to which refernce is made for a further statement of its terms
and conditions.
IN WITNESS WHEREOFi Austria has caused this bond to be executed
in its cehalf at the City of Washington, District of Columbia, by
its duly authorized representative at Washington.
TIE GOVERNMENT OR THE REPUBLIC OE AUSTRIA:
BY
D a t e d J a n u a r y 1,
1925.
debt on
January 1st
1928 *
■ 1929 - 33
321.613:
U76.833
19.032
60.99S
2U0.278
326.337
France
i7 .6O 7.33 i
26.O72.503
1 .0U2 .2b0
3*335*256
i3 .U66.O9O
i7 .jU3 .6lO
Ingland
UU.02U.6lS
65.Oll.6lO
2.598.S6S
S.316 .H15
33.577.5H
UU.U92.795
6.72O.97U
9.689.U25
387.3U0
I.239.U9U
5 .OOU.U55
6.631.2.39
Norway
U 15 .IS6
635*995
25.U2U
81*358
328.U 83
U35.265
Sweden
19.889
29*059
1.16 1
3.717
15 .00s
19.887
U.639.S98
6.893.33s
275*565
881.812
3 .560.315
U. 717*692
Italy
22 .210.897
3 1 .^27.617
1 .256.307
U.020.200
l6.23i.55O
2 1 .508.057
United States
2U.055.702
79.966.U6i
1.U87.7S0
U.bOO.950
18.876.175
Pd. b j-4.175.
120 .0l6.120
17U. 202.8U 1
7.0U3.737
22.5UO.2OO
91*005.865
original
debt
Denmark
Netherlands
Switzerland
* Interest included on basis of the rate of
and thereafter of the rate of %
sett lement
6;. per
193H
•
- H3
I9UU -
08
annum, comp'ounded semiannua lly to January
per annum, compounded annually
total
120.589.107
1,
1925
TdEASUDY DEPARTMENT
FOD I!MEDIATE RELEASE:,
Tuesday., December 11, 1928.
Secretary Mellon announced that subscriptions for the issue of 4§
per cent Treasury Certificates .of Indebtedness., dated December 15, 1928.,.
Series TS2-1929, maturing September 15, 1929, and Series TD-1929, maturing .
December 15, 1929, will close at the close of business tomorrow, Wednesday,
December 12, 1928.
Subscriptions which fail to reach a Federal Deserve
Dank or branch, or the Treasury Department, before the close of business
tomorrow will not be accepted'.
The practice of accepting mail subscriptions
received on the morning following the closing of the books will not be ob
served with respect to the current offering.
Í*
tf
FOR IMMEDIATE RELEASE,
Thursday, December IS, 1928
TREASURY DEPARTMENT
Secretary Mellon announced that subscriptions for the twq issues
of Treasury certificates of indebtedness, Series -TS2-19Í29, 4^ per cent,
dated December 15, 1928, maturing September 15, 1929, and Series TD-1929,
4^- per cent, dated December 15, 1928, maturing December 15, 1929, closed
at the close of busihess on December 12, 1928*
Reports received from the twelve Federal Reserve Banks show that
for the offering of 4^ per cent certificates
of Series TS2-1929, ?/hich
was for $200,000,000, or thereabouts, total subscriptions aggregate some
$262,000,000, and that for the offering of 4j per cent certificates of
Series TD-1929, which was for $300,000,000, or thereabouts, total sub
scriptions aggregate some $367,000,000.
As previously announced, sub
scriptions in payment of which Treasury certificates of indebtedness of
Series TD-1928, Series TD2-1928 and Series TD3-1928, all maturing
December 15, 1928, were tendered, were allotted in full.
Upon these
exchange subscriptions about $39,000,000 have been allotted.
Allotments
on the cash subscriptions for 4^ per cent certificates of Series TS2-1929
were made as follows:
All subscriptions in amounts not exceeding $50,000
for any one subscription were allotted in full.
Subscriptions in amounts
over $50,000 but not exceeding $1,000,000 for any one- subscriber were
allotted 80 per cent, but not less than $50,000 for any one subscription;
and subscriptions in amounts over $1,000,000 for any one subscriber were
allotted 70 per cent, but not less than $800,000 for any one subscription.
-Allotments on cash subscriptions for 4^ per cent certificates of
Series TD-1929 were: nade as follows:
All subscriptions in amounts not ex
ceeding $50,000 for any one subscriber were allotted in full.
Subscrip-
X 'f
/;
- 2 ~
tions in amounts over $50,000 "but not exceeding $1,000,000 for any one sub
scriber were allotted90 per cent, but not less than $50,000 for any one
subscription? and subscriptions in amounts over $1,000,000 for any one
subscriber were allotted 75 per cent, but not less than $900,000 for any
one subscription,
Further details as to subscriptions and allotments by Federal
Reserve districts will be announced when final reports are received from
the Federal Reserve Banks.
*
T3BASUJ»
D3EPJSSM
•?/ ™"~~ ”
FOR IMMEDIATE RELEASE
" i t15, 1928.
1928
1928,
December
The Treasury today received payments amounting to $98,612,203.02, from the
f o i l i n g foreign governments on accost Of their funded indebtedness to the
United States:
GREAT BRITAIN;
The twelfth semi-annual payment of interest and the sixth annual installraent of principal on the funded indebtedness of Great Britain to the United States
under the terms of tho debt settlement approved by the Act of February 28, 1923.
The total payment amounted to $94,200,000, of which $67,200,000 was for interest
and $27,000,000 for principal, and as authorized by the terms of the settlement,
was made in obligations of the United States which wore accepted at par and ac
crued interest.
The obligations were $90,540,000 face amount 3j* Treasury Uotes,
Series C-1930-33, maturing December 15, 1932; $3,628,050 face amount |j P Treasury
Uotes, Series B-1930-32, maturing September 15, 1932; accrued interest thereon,
$31,920.83, and cash adjustment of $29.17.
BELGIUM:
The seventh semi-annual payment of interest on the post-armistice funded
indebtedness of the Government of Belgium due the United States under the terms
of the debt settlement approved by the Act of April 30, 1926.
The payment
amounting to $1,250,000 as authorized by the terms of the settlement, was made
in obligations of the United States, which were accepted at par and accrued
interest.
The obligations were $1,000,000 face amount of 3j$ Treasury Notes,
Series A 1930-32, maturing March 15, 1932; $239,000 face amount 3|$ Treasury
Notes Series B-1930-32, maturing September 15, 1932; accrued interest thereon,
$10,901.14; and cash adjustment of $98.86.
CZECHOSLOVAKIA:
The seventh semi-annual installment of principal on the funded indebtedness
of the Government of Czechoslovakia due the United States under t,ie terras of the
debt settlement approved by the Act of May 3, 1926.
The payment amounting to
oi
-
CZECHOSLOVAKIA
✓
I*
2-
(continued)
$1,500,000, as authorized by the terms of the settlement, was made in obligations
of the United States which were accepted at par and accrued interest.
The
obligations were $1,486,500 face amount. 3^-^ Treasury Notes, Series B 1930-32,
maturing September 15, 1932; accrued interest thereon, $13,078.74, and cash ad
justment of $421.26.
ESTONIA;
The sixth semi-annual payment on account of the funded indebtedness of the
Government of Estonia to the United States due under the terms of the debt
settlement approved by the Act of April 30, 1926.
$100,000, which was made in cash.
The payment amounted to
The balance will be funded in accordance with
the option given the Government of Estonia in the debt settlement agreement.
FINLAND:
The twelfth semi-annual payment of interest and the sixth annual installment
of principal on the funded indebtedness of the Government of Finland due the
United States under the terms of the debt settlement approved by the Act of
March 12, 1924.
The total payment amounted to $183,460, of which $131,460 was.
for interest and $52,000 for principal, and as authorized by the terms of the
settlement, was made in obligations of the United States, which were accepted
at par and accrued interest.
The obligations were $181,800 face amount 3|$
Treasury Notes Series B 1930-32, maturing September 15, 1932; accrued interest
thereon of $1,599.54, and cash adjustment of $60.46.
HUNGARY:
The tenth semi-annual payment of interest and the fifth annual installment
of principal on the funded indebtedness of the Government of Hungary due the
United States under the terms of the debt settlement approved by the Act of
May 23, 1924.
The total payment amounted to $39,773.01, of which $29,133.01
was for interest and $10,640 was for principal.
The payment was made in cash.
■LATVIA:
■ 1 ...
The Sixth semi-annual payment on account of the funded indebtedness of
the Government of Latvia to the United States due under the terms of the debt
settlement approved by the Act of April 30, 1926.
$40,000, which was made in cash.
The payment amounted to
The balance will be funded in accordance with
the option given the Government of Latvia in the debt settlement agreement.
LITHUANIA:
The ninth semi-annual payment of interest, except that pent to be funded,
on the funded indebtedness of the Government of Lithuania to the United States
under the terms of the debt settlement approved by the Act of December 22,1924.
The total payment amounted to $48,970.01, which was made in cash.
The remainder
of the interest amounting to’ $44,302.50, will be funded in accordance with the
option given the Government of Lithuania in the debt settlement agreement.
POLAND:
Tne eighth semi-annual payment on account of the funded indebtedness of the
Government of Poland to the United States under the terms of the debt settle
ment approved by the Act of December 22, 1924.
$1,250,000, which was made in cash.
The payment amounted to
The remainder due will be funded in ac
cordance with the option given the Government of Poland in the debt settlement
agreement*
The obligations of the United States in the face amount of $97,075,350,
accepted in connection with the British, Belgian, Czechoslovak and Finnish
payments, have been cancelled and retired and the public debt reduced according
ly*
EOR IMMEDIATE RELEASE,
Thursday, December 20, 1928,
TREASURY DEPARTMENT
Secretary Mellon today announced that the total amount of subscriptions
received for the two issues of Treasury certificates of indebtedness, Series
TS2-1929, 4|- per cent, dated December 15, 1928, maturing September 15, 1929,
and Series TD-1929, 4| per cent, dated December 15, 1928, maturing December
15, 1929, was $631,182,000.
The total amount of subscriptions allotted was
$520,164,000, of which $39,473,500 represents allotments on subscriptions for
which Treasury certificates of indebtedness of Series TD-1928, TD2-1928 and
TD3-1928, maturing December 15, 1928, were tendered in payment.
All of such
exchange subscriptions were allotted in full, while allotments on other sub
scriptions were made on a graduated scale.
The subscriptions and allotments were divided among the several Federal
Reserve Districts and the Treasury as follows;
SERIES TS2-1929
Federal Reserve
District;
Total Subscriptions Received;
Total Subscription Allotted;
Boston
New York
Philadelphia
Cleveland
Richmond
Atlanta
Chicago
St, Louis
Minneapolis
Kansas City
Dallas
San Francisco
Treasury
$
$
Total . . . ,
"9,647,000
64,388,500
13,555,000
22,710,500
16,219,500
18,419,500
20,161,500
9,323,500
4,797,000
5,674,000
19,966,000
58,218,500
146.500
$263,227,000
8,617,500
48,968,500
10,778,000
17,854,500
14,866,500
15,961,500
16,708,500
7,905,500
4,352,000
4,737,000
17,141,000
41,881,500
14£u 500
$209,918s,500
(See following page for figures covering Series TD-1929)
-
2-
S3RI3SS ’ID-1929
Federal Reserve
District:
Total Subscrip
tions Received:
Total Subscrip
tions Allotted:
Boston
New York
Philadelphia
Cleveland
Richmond
Atlanta
Chicago
St. Louis
Minneapolis
Kansas City
Dallas
San Francisco
Treasury
$ 8,100,000
146,044,500
24,381,000
21,369,000
9,042,500
17,964,500
24,103,000
10,742,000
5,602,000
10,657,000
25,432,000
64,295,500
222.000
$367,955,000
$
Total • • . . .
7,826,500
116,700,000
21,063,500
18,748,500
8,565,000
16,635,000
21,867,500
9,664,500
5,339,000
9,723,000
23,929,500
49,969,000
214,500.
$310,245,500
Total Subscriptions, both series .. $631,182,000
Total Allotments, both series ... .. $520,164,000
@FedFRASER