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JUN 141972
TREASURY DEPARTMENT

FOR RELEASE WHEN DELIVERER
AT ABOUT 2:00 P.M. , JANUARY 10, 1931

.1

ADDRESS TO BE DELIVERED BY HONv OGlfcÌTfÌ.^lILLp| £
UNDERSECRETARY OF ¿HE TREASURY,
CLUB
BEFORE THE WOMEN’S NATIÖNAL E m j M r € A N \CLUB;,
--AT THE COMMODORE HOTEL, N E T YORE- CITY,- *.
AT THE ANNUAL LUNCHEON,
JANUARY 10, 1931
0

TEN YEARS OF REPUBLICAN ADMINISTRATION

When your President, Mrs* Livermore, so courteously invited me
to participate in this celebration of the Tenth Anniversary of the founding
of this Club, that has proved such a useful medium in arousing and maintaining
an intelligent and patriotic ihteVest in government, she suggested it would
be most opportune for me to review ten years of Republican administration of
public affairs.

This is a large order, but with severe misgivings as to my

ability to perform the task with any degree of adequacy, I agreed to try,
I rejected at once- the temptation to point with pride to a long list
of achievements— and it is a long and impressive one— and to present you with
an abbreviated campaign text book.

But it occurred to me that it would be of

real interest to ascertain whether from a study of crowded events, many laws,
executive acts and pronouncements, there would emerge some discernible pattern
and fundamental lines of policy, or, in other words, a philosophy of government
that could be labeled Republican,
When you consider the many groups that go to make up a National Party
in a country as vast as ours, the diversity of interests, local and economic,
the succession, varity and novelty of events calling for immediate action, it
was by no means certain that any definite lines would emerge.
catastrophe

Moreover, the

of the War had brought to an .end the world of the nineteenth

-

century.

2

-

We faced the dawn of a new era, in which old landmarks had been

swept away and where everything had become plastic and flexible.

It would not

have been surprising to find that under such circumstances party doctrines and
principles, grounded in tradition, had been swept away, leaving but an organ!***
zation and a name, and that in the period of transition, new roots had not
sunk very deep.

Yet I believe that the fundamental attitude and approach

towards public questions— and these rather than any particular doctrine are
what give continuity to the life of a party— have not only carried over into
the new era, but proved as adequate and as sound as ever to meet the new and
highly novel problems of the day.
Prohibition doesn’t enter this picture, since by the action of ooth
parties the Eighteenth Amendment and the Volstead Act had been adopted pj.ior
to March 4, 1921, the date when this story begins.
The subject naturally divides itself into two main subdivisions,
our government abroad and at home.

Le.t us begin with a consideration of

foreign policy, realizing, of course, that I can but touch the high spots.
When the Republican Administration came into power on March 4, 1921,
the country had given a clear and unmistakable indication of the line which it
desired that our foreign policy should take.

The preceding campaign had been

fought largely on the issue of whether this country should abandon its tradi­
tional policy of independence in foreign affairs and should substitute for it
a policy under which our independence of action might be subordinated to tne
decision of other nations.
That policy, which had been firmly established during the Adminis­
tration of Y/ashington, was well described in the words of Jefferson as one
of "peace, commerce and honest friendship with all nations, entangling al­
liances with none."

Its underlying principles had always been independence

and cooperation.

But independence had never meant isolation, nor had co­

operation implied permanent alliances and special arrangements with other
nations.
Tie have followed this policy since the very Beginning of the govern*
ment, and so firmly had it become established that, when the World War came
to an end, the public had an instinctive feeling that the nation should get
back to first principles and continue to govern its conduct by the only
foreign policy it had ever known.
When the new Administration took office in 1921, the groundwork had
already been laid.
longer an issue.

The question of joining the League of Nations was no
The Treaty of Versailles had failed of confirmation and the

Senate had refused to accept for this country a mandate for Armenia or even
to consider a treaty of alliance with France.

America had declined to par­

ticipate in the various Allied Conferences and had made it clear* that she
would not be drawn into any of the post-war combinations and alliances.
While making clear our determination not to commit the United States
in advance to the employment of its power in unknown contingencies, this
Government has at all times pursued a policy of friendly cooperation with one
League and has taken part in the various international conferences called by
that organization.

It has also recognized the fact that we should omit no

opportunity to do our part for the advancement of peace and the limitation of
armaments, and particularly for the judicial settlement of international dis­
putes and of all questions which are justiciable.

Within the last month the

President has submitted to the Senate the protocol providing for the United
States becoming a member of the Permanent Court of International Justice at
The Hague, in accordance with the reservations adopted by the Senate in 1926,
while the peaceful settlement of international disputes has been promoted by

- 4 a series of arbitration treaties which embody the related processes of con­
ciliation and arbitration.

One of the most significant steps taken in the

cause of world peace was the Kiellogg-Briand Treaty, renouncing war as an
instrument of national policy.

This Treaty, which was initiated by Secretary

Kellogg with rare vision, was proclaimed by President Hoover in 1929 and is
now definitely incorporated as part of our national policy.
In addition to these well-directed efforts, the United States has
.worked steadfastly in other ways to bring about peace and stability in the
world.

Early in the Republican Administration, on the invitation of the Presi­

dent, a conference was called to meet in Washington in ilovember, 1921, to con­
sider the limitation of armaments and Pacific and Par Eastern questions which
were then threatening the good relations of this country with Japan.
At the outset, Secretary Hughes, with dramatic suddenness, made a
definite proposal for the limitation of naval armament, which, as regards
capital ships, was accepted with modifications.

Thus, at one stroke, an end

was made of existing competitive programs in capital ships.
In the settlement of Par Eastern questions, which included the PourPower Treaty and the Treaty Relating to Principles and Policies to be followed
in matters relating to China, definite, and perhaps even more important, re­
sults were achieved.
Altogether, the Washington Conference of 1921 will rank high among
the diplomatic achievements of this Government and will prove an important
landmark along the road to permanent peace.

The work of the Conference was

crowned last year by the London Uaval Limitation Treaty, which may fairly
be described as an epoch-making achievement in that it put an end to compet­
itive building of naval armaments among Great Britain, Japan and America,
the three great sea-powers of the world.

- 5 -

As regards financial questions, the foreign policy of this Govern­
ment has been aimed at helping to secure stability abroad and to bring order
out of the financial chaos existing when the Republican Administration took of­
fice.

If time permitted, I should like to discuss the clearing up one by one

of the enormously difficult questions inherited from the War, including the
settlement of our claims against Germany, reparations and inter-allied debts.
Suffice it to say that, as to the first group, we have maintained the prin­
ciples of the inviolability of private property, even in war-time.

As to the

last, I believe that the settlements protect American interests, on the one
hand, and, on the other, recognize our moral obligation -to help the world, so
far as we consistently can, in getting back on its feet again.
The financial aspects of our foreign policy have an important bearing
not only as regards Europe but also in promoting trade and closer relations
with the nations of Central and South America.

Eor these reasons, as well as

for reasons of friendship and mutual cooperation, our foreign policy towards
Latin-America should be clear-cut and give no grounds for misapprehension as
regards either the desires or the intentions of this country.
of this policy has always been the Monroe Doctrine.

Tne uorneisto^.e

We adhere to that doctrine

as a safeguard to the territorial integrity of all the western nations.
is nothing aggressive about it.

There

It is essentially defensive and confusion

arises only when it is sought to make this doctrine a cover for all our deal­
ings with the nations of the Western Hemisphere.
We do not wish to be forced ever to intervene in the affairs of other
nations.

There is no desire on the part of this country to dominate anywhere

outside its own borders.

We recognize the equality of all the American Repub­

lics and that, as sovereign powers, all enjoy equal rights under the law of
nations.

But sovereignty carries with it certain

obligations, and among these

. IS the duty of each State to protect the rights which the nationals of other
' States have acquired within its territory, in accordance with its laws.

We

cannot forego the right to protect, under well-established rules of interna­
tional law, the rights of our citizens.

Nor can we afford to allow other

nations to interfere in the affairs of this hemisphere under the pretext of
protecting the rights of their nationals.

We do not seek to evade these

responsibilities, but, at the same time, we expect on the part of others a
recognition of our position and a fair and unbiased interpretation of our
intentions.
Turning, now, to domestic policies, the picture becomes somewhat
more complicated, and the difficulty of distinguishing the governing principles
and controlling tendencies increasingly greater.
identified.

Nevertheless, they can be

Republicans have ever favored a strong central government, acting

vigorously in a large way in the more or less restricted sphere in which the
Federal Government can act effectively, though slow to extend that field
as to limit individual initiative, enterprise and resourcefulness; and with
a growing recognition that we are in serious danger of over-centralizing, with
a consequent breaking down of local self-government and sense of responsibility.
Our Party has always evinced a marked fondness for orderly progress, for
established principies, particularly in the field of public finance, and a
tendency to test new policies by the light of experience rather than to venture
on uncharted seas.

These underlying points of view can be traced m

the events

and policies of the last ten years.
Let us begin with a consideration of the record in what, for want of
a better definition, may be described as the strictly governmental sphere
of action, and then proceed to the zone in which, while government action
plays an enormously important role, there is an ever-present question as to
how far it should proceed in the direct assumption of responsibilities, a

I

if

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i
j._ fiaiino ■f-vip diffsTGiic© "between those
question which tends more ana more to define the a m e r e n c e
who-are Eepublicans and those of other political faiths.
Perhaps the outstanding achievement of the last ten years in the
field of government has been the management of our public finances.
we took control, their condition was chaotic.
debt of

about

'.Then

Tie were faced with a war

24 billion dollars, with early maturities aggregating

about 7 billion 500 millions, and high interest rates; our expenditures for
the fiscal year 1921 aggregated 5 billion 500 millions; we were burdened with
every variety of war tax, some imposed at rates so high as to dry up the
sources of revenue, and to furnish an insuperable handicap to the growth
and flow of industry and commerce.

These huge sums were be^ng appropriated

and expended without the benefit of an up-to-date businesslike budget system.
The first step was to establish a sound executive budget and
accounting system, which would permit not only the systematic setting up
of the actual needs and resources of the government before funds were
appropriated, but a rigid control of expenditures after the Congress had
acted.

Accompanied by an unyielding policy of economy, which received

general acclaim as exemplified under President Coolidge, this budget system
has been of inestimable benefit.
Prom the first, the Treasury Department addressed itself vigorous­
ly to the task of reducing the public debt, putting it into more manage
form, lowering the interest cost, and,’ with the cooperation of Congress,
sweeping away the multitudinous mass of war taxation, and of putting our
tax system on a sound peacetime basis.
accomplished.

The task has been in large measure

The public debt has been reduced by eight billions, annual

interest charges by about 430 millions, and annual taxes by about
billion 800 millions.

8
'

•

It is no answer to say that we were favored hy circumstances.

course, we were.

Of

But the savage political attacks made on the Secretary of

the Treasury, the fierce debates in Congress, the repeated raids on the p
treasury, all tend to demonstrate that these results did not just happen; they
were brought about, and brought about by men grounded in sound financial prii>ciples*
As was to be expected, the Republican Administration has steadfastly
adhered to the principle of protection.

This is not the occasion on which to

debate the merits of ¿free trade and protection, but the fact is inescapable
that our country has prospered under our system of protection.
cannot be too strongly emphasized!

One fact

The foundation of our prosperity is our

enormous domestic purchasing power, based in large measure on our ability to
maintain an extraordinarily high wage scale and standard of living, whicn,
in turn, have created an ever-expanding market for all manner of goods and
services.

We cannot afford to have our wage-scale or standard of living

threatened.
While there was nothing new in the readoption of the principle of
protection, the introduction of the flexible feature, which lays the foundartion for scientific tariff-making, and permits the modification of rates
to meet rapidly changing economic conditions, is a very important and constructive contribution.
Restrictions on the importation of foreign goods in the interest
of the protection of our wage-scale and high standard of living would have
been of little value were both to be threatened by an influx of millions of
immigrants fleeing from war-devastated Europe, and crowding into our country
at so rapid a rate as to make their absorption into our economic life well
nigh impossible, and their assimilation by the body of our population
extremely difficult.

Accordingly, we have adopted the principle of restricted

- 9 immigration, though every effort has been made to spare the hardships incident
to the division of families.
We have continued on an increasingly generous scale the development
of our inland waterway and highway systems, and we have embarked on a vast
public building program, free from the old pork-barrel practices, systematical­
ly planned and carried out, and one of the major features of which is to make
the nation*s capital one of the most beautiful cities in the world.
The development of our inland waterway and highway systems is
directly related to the economic welfare of our great agricultural regions.
The Republican Party, which has always prided'.it self on the soundness of
its economic program, hasn*t been slow to recognize that a well-balanced
national economy requires the placing of agriculture on an equality with other
industries.

Our national prosperity depends in large measure on the full

development of the purchasing power of our six and a half million farmers
and their families.

It isn*t surprising, therefore, to find that during the

decade just closed more legislation of a constructive character dealing with
agriculture has been enacted than ever before.
Ho other nation in the world has so liberally and so completely
provided for its veterans.

Through the Veterans* Bureau, created by a

Republican Congress, our veterans are enjoying the best possible hospital
and insurance service.

Liberal provision has been made for meeting all

death and disability claims.

Adjusted service certificates, aggregating

approximately $3,500,000,000 in value at maturity, have been distributed.
How liberally our World War Yeterans have been provided for is indicated
by the fact that up to June 30, 1930, $5,220,000,000 had been expended for
their benefit, and during this fiscal year no less than $576,000,000 will
be spent.

*-

10

Nor has so-called humanitarian legislation heen neglected, though
here the Federal Governmental field of action is strictly limited.

The

salaries of all Federal employees have heen substantially increased.
tirement pensions have been provided for.
has been broadened.
expanded.

Re­

The Federal Compensation Act

The employment service in the Labor Department has been

A Childrens Bureau has been created in the Department of Labor.

Liberal appropriations have been made in the way of aid to the States in the
encouragement of the better care of mothers and children.

The splendid work

of the Public Health Bureau has been steadily carried forward, with particular
emphasis on-':the encouragement and development of local county health units.
I haven't exhausted the list, and I do not pretend to have covered
the subject, but I have said enough to paint the picture of a government
acting vigorously and affirmatively along certain definite lines of policy
within a well-defined sphere of legitimate governmental activities.
We are now prepared to pursue our inquiry into that twilight sone
where political parties divide, and there is a very real diversity of
opinion as to what should be undertaken by government or left to private
enterprise and initiative under government regulation, supervision, assistance
and leadership.
No one in this day and generation would contend that government
should be limited to the narrow functions of earlier times.

The preserva­

tion of equrlity of opportunity, the maintenance of an open field, the
complexity and interdependence of our economic machine demand regula­
tions, restrictions and inhibitions, on the one hand, and, on the other,
leadership, direction and assistance.
line.

The problem is, where to draw the

For many of us, for instance, there is no question as to the

advisability of the supervision and regulation of public utilities

U
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i

rather than their operation hy the government.
cleanout and as simple.

But other problems are not as

It is not always so easy to determine how far the

government can and should go, particularly in so-cad.led emergencies, without
endangering the initiative, enterprise, resourcefulness and sense of indi­
vidual responsibility that have made this country what it is and yet fairly
measure up to its responsibilities, both social, and economic.

We run across

this question again and again during the period under review and on the wnole
find a rather genuine consistency in the answers*
Let me illustrate what I mean by direction and assistance on the
part of government by quoting Secretary Hoover’s description of the larger
purposes and activities of the Department of Commerceî
"It has been the effort of this Administration to incorporate
this large vision as the fundamental purpose of the Department of
Commerce.
Research and investigation in the laboratories* of the
department lead to the invention of more scientific and economical
methods of production.
Its statistical services develop a larger
understanding of our economic system and lead to the daily diffusion
of valuable information which makes for stability and progress in
business, and for the elimination of countless wastes whose costs
would ultimately fall upon the consumer.
Its constant conference
and cooperation with industry contribute directly to higher standards
of living and particularly to the establishment of the enduring
principles of helpful collaboration between government and business
as against paternalistic intrusion of the former into the latter,
with all of its unfortunate consequences for both.
Through the
promotion of scientifically and economically developed programs of
water and rail transportation based upon careful appraisal of busi­
ness trends and actual needs, the department contributes to a wider
and more economical distribution of the fruits of agricultural and
industrial production. The stimulation, encouragement, and protec­
tion of our merchant marine not only renders service to the effective
spread of our surplus products abroad but provides vital factors for
the national defense.”
Again, consider the Agricultural Marketing Act.

Its real and

fundamental purposes have been clouded and obscured by the emergency actions
of the so-called stabilization corporations, but the principle that underlies
the Act is to help American farmers to help themselves.

The problem was to

organize six and a half million farmers, scattered over a vast area, so that

-

12

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they could act effectively, as is done in other great industries, in the pro­
duction and marketing of their products. For them to organize themselves would
he altogether too slow a process.
and financial help.
mind:-

There was need of assistance, leadersnip

These the government is furnishing.

But hear this in

The Federal Farm Board is assisting farmers to set up their own cooper­

ative organizations.

It isn't doing the job for them.

These central associa­

tions are owned, controlled and operated hy the cooperatives that form them.
They are in no sense governmental.

It may he a long process, hut before many

years have uassed it isn’t unreasonable to hope that the government will nave
stepped completely out of the picture, that the agricultural industry in the
United States will he a self-organized, a self and well-managed industry, and
that agriculture will have attained the standard American measure of prosperity
There are those who would have a merchant marine government-owned
and government—operated.

Hot so the Republican Party.

The government has

devoted itself to the promotion of the development of our merchant marine
under private ownership and management.

Through liberal credit policies to

those who build American, ships, and, through assistance in the form of govern­
ment mail contracts, such help has been afforded as will enable our shipping
interests to meet world competition.

In the course of the last two years, tne

Shipping Board has sold 189 ships, while new routes established under private
auspices require 51 new ships, aggregating 467,000 tons, and costing approxi­
mately $200,000,000.
Through the development of proper landing facilities, lighted airways
and financial assistance in the way of mail contracts, remarkable progress has
been achieved in the development of American aviation.
You all remember how last fall, when the business depression first
came upon us, the President called in the leaders of great industrial

- 13-

enterprises , railways, "utilities and business houses, and the labor leaders,
how an agreement was reached to maintain the rate of wages, to distribute work
as evenly as possible, to urge effort in production and to prevent conflict
and dispute; and how the cooperative efforts resulting from those meetings,
and from the further leadership of the President with the help of the Federal,
State and municipal governments, resulted in the carrying out of a vast program
of public and other works effecting an expansion of the agencies for these
purposes exceeding those of even the boom year 1929, and doing mucn to alle
viate the downward swing of the depression then setting in.
And you surely will remember how more recently, in an entirely
different field, a great meeting was held at the White House to consider,
under the leadership of the President the problem of child health and protec­
tion, looking to better laws in their behalf, better-local agencies to safe
guard them and a larger opportunity for their development into sturdy, selfreliant and happy citizens.
Do you begin to get the drift of my thought?

Do you begin to sense

that, taken altogether, we can detect, underlying all these events, a very
definite philosophy of government?

If so, we are ready now to pull these

many strings together and to state our conclusionsi
In the field of foreign affairs, we recognize that the day of iso­
lation is definitely over, and there is no disposition on our part to seek an
aloofness which can never be anything more than imaginary.

We have not, and

shall not, shirk our responsibilities as a world power, but we still maintain
our right to define what those responsibilities are, and to decide under what
circumstances we shall use our power and resources.

We have striven, and

shall continue to strive, in cooperation with others and along lines of policyof our own, to establish the peace of the world on a stable and lasting basis,
and to promote a better understanding and greater friendship among, all men.

- 14 -

At home, we have the picture of a government addressing itself to
the task of putting its own house in order, ht a time when an example of order,
efficiency and economy was much needed; restoring the credit of the nation by
adherence to sound financial principles; rebuilding the national economy by a
return to the protective system; meeting the emergency of over-abundant im­
migration; encouraging and promoting the Welfare of agriculture; providing for
our veterans; embarking on a vast program of internal improvements; giving due
consideration to social legislation; meeting, in short, the problems of
government vigorously and decisively; and, most important of all, recognizing
the vital need of preserving local autonomy and the individual initiative,
enterprise and resourcefulness so characteristically American, and declining
to extend unduly the sphere of direct government operation while developing
a new technique, method and program of government service and leadership
which, placed at the disposal of the nation in many fields of endeavor, has
enabled our citizens to achieve an extraordinary progress-.

ADDRESS TO BE DELIVERED BI HON. OGDEN L. MILLS
UNDERSECRETARY OE THE TREASURY,
BEEORE THE BUSINESS POLICY EORUM OE
THE SCHOOL OE BUSINESS OP THE COLLEGE OE NEW YORK
ON
JANUARY 12, 1931

ADMIrTI STRATI ON OF FEDERAL FINANCES

In discussing this evening some of the problems involved in the
administration of our Federal finances I wish to preface my remarks with
a simple reminder as to* the magnitude of these operations and of the ac­
tivities of the Federal Government.

In the fiscal year ended June 30, 1930

total ordinary receipts amounted to almost $4,200,000,000 and expenditures
almost reached the same total.

This figure does not include public debt

refunding operations amounting to more than $3,700,000,000.
From the "point of view of the Treasury, the basic fiscal problem
of the Federal Government is the maintenance of a balanced budget.

Tnis

calls for the most careful advance planning of prospective receipts and
expenditures.

The Government’s receipts must balance its expenditures,

and although funds may be derived from the issuance of Government obligations,
in the long run Federal revenues must balance expenditures, unless one is
to accept the prospect of unlimited'growth in the public debt with the
consequent disturbance to financial and economic conditions.
In the commercial and business field, competition insures efficiency
and economy; in the field of government, we must look to the setting up of
public accounts in such a way that the public can readily grasp not only
what the routine administration of government is costing, but what is
involved in the way of expenditures by new policies suggested for their
approval.

Aside from eternal vigilance on the part of the public, control

of the purse-strings must be exercised in such a manner as to compel the

2 -

efficient and economical administration of the government machine.

What is

known as the Executive Budget System, properly organized and applied, meets
these fundamental requirements.
Stated from the point of view of our Federal experience, a "budget
system for government finance involves not only a systematic plan of i’eceipts
and expenditures, "but also the machinery for putting this plan into operation.
In the plan itself, the budget proper, the needs of the government are esti­
mated and balanced against anticipated income for a definite period in advance,
and are also conpared with the actual expenditures and actual receipts in pre­
ceding periods.

Such a plan, presented to the Legislature and to the public,

permits a careful survey of the needs of the various branches of the govern­
ment as a basis for legislation covering receipts and expenditures.

The

budget and accounting system further provides for a thorough and independent
audit of the expenditures.
Most important of all, when properly instituted, the budget system
is the most effective way of controlling current expenditures and providing
for administrative efficiency.

I have had first-hand opportunity to study the

old system of control through committees of Legislature, and control by
means of an executive budget system.

As a State Senator, I was a member of the

Finance Committee, and for the last four years, among other duties, I have
been the Budget Officer of the Treasury Department.

When I was in Albany,

the heads of the different Departments and Bureaus would appear before us and
present their needs as they saw them, in great detail.

We had available past

experience and figures of former years, and we had opportunity for crossexamination limited only by the time element.

We could check inordinate and

- 3 -

apparently unjustified increases, tout we had no machinery for ascertaining
whether the current needs were determined toy mere routine and perhaps a waste—
ful system of administration, or toy a high state of administrative efficiency.
Moreover, free from any current checking up on the conduct of his ofxice, and
of necessity knowing more of his Department's activities than we members of
the Legislature could possibly know, each administrative head was in an admir­
able position to make out the most plausible case in support of his estimates.
We did the best we could, and on the whole the system worked fairly ^ell,
though I never had the feeling that I had before me all of the information
necessary to form a sound business judgment.
Contrast such a system with that now functioning in Washington.
There we have a Budget Director who is in complete control of all administrative
requests for appropriations, since no estimates can go to Congress except
through the President, who acts, of coiirse, upon recommendation of the Budget
Director.

The latter is supported by an expert staff, the several members of

which are assigned to the various Departments and independent establishments of
the government.

They are expected to become thoroughly familiar with all phases

of the latter's respective activities and be prepared to advise the Budget Di­
rector as to what funds are actually needed for efficient operation.

In addi

tion, each Department and separate establishment has a budget ofxicer, xesponsi.
ble for all estimates submitted, and for the supervision of expenditures.

The

Budget Director, once his hearings are complete, has before him, on the one handT
the complete picture of the Government needs during the coming fiscal wear,
and, on the other, has the estimates submitted to him by the Treasury ana
other Departments of the probable receipts.

If the latter are not adequate

- 4 -

to cover all of the proposed expenditures, one or two courses are open —
either the revenues must "be increased "by new taxation, or the less necessary
of the proposed expenditures can be eliminated.

This is a question of policy

to be determined by the Chief Executive, but he is enabled to reach his con­
clusions and make his recommendations to Congress based, not on guesswork
or haphazard estimates, but on definitely ascertained figures, founded on a
thorough business procedure.
After the Congress has made the necessar3r appropriations, covering
the various activities of government, we in the Treasury, for instance,
require each one of our Bureaus to set up reserves out of its appropriations
and to allocate the balance to the four quarters.

They cannot, generally

speaking, exceed the allocation in any quarter or draw on the reserve without
the permission of the Budget Officer of the Department, who in turn reports
to the Budget Director.
Thus, you see, that from the day the first estimates are set up
to the day the last cent is expended, a control is in force designed to
protect the public funds from useless, wasteful or extravagant expenditure.
This, however, covers only one phase of the problem of Federal finance
A second and perhaps'more technical one has to do with the Treasury’s manage­
ment of receipts so as to be in position to meet requirements for current
expenditures, a task which involves (1) the estimating for a definite
period in advance the Government’s probable cash needs and its probable
receipts, and (2) the timing of receipts to match actual disbursements.
This Treasury problem resolves itself into the maintenance of a satisfactory

cash position from day to day, that is, the maintenance of sufficient hut
not more than sufficient cash on hand to meet current requirements including
the various debt retirement accounts, with receipts and expenditures running
in the hundreds of millions of dollars each month, and with very marked
differences as between the times at which ordinary revenue is received
and obligations for expenditures must be met.
Let us consider the Government's requirements for funds.

Most im­

portant among the expenditures are those which are designated in the Treasury
daily statement as ’'general expenditures.”

These include outlay for regular

governmental activities of the legislative, executive and judicial branches.
In the fiscal year 1930 this class of expenditures alone accounted for about
half of the $4,000,000,000 of expenditures chargeable against ordinary re­
ceipts.

Ordinarily these disbursements vary relatively little from month

to month, the range being from about 170 to 190 million dollars during the
fiscal year 1930.
regular.

Other expenditures are for the most part much less

For example, interest which must be paid on the public debt is due

largely in the six months April, October, March, June, September and December;
although there is some shifting between these months owing to refunding opera­
tions, the amounts due are readily calculable in advance.

Certain other large

payments must be met at various times during the 37ear, such as those resulting
from loans made by the Federal Farm Board under authority of the agricultural
marketing act, and by the Shipping Board, refunds of receipts erroneously
collected, and the covering of deficits of the postal service.

Such disburse­

ments may be relatively irregular both as to amount and the time at which they
must be paid.

This is in part true also of expenditures which the Treasury

/

6

-

-

is directed 1dv law to make each year in retirement of public debt, consisting
chiefly of sinking fund operations.
The Government’s revenue does not accrue precisely when it is needed
for expenditures.

Revenues from certain sources are received fairly regularly

month by month throughout the year.

This is true, for example, of customs

receipts^internal revenue collections other than income taxes and certain
miscellaneous items of receipts.
Federal revenue.

But these comprise less than half of the

Out of total ordinary receipts amounting to about

$4,200,000,000 for the fiscal year 1930, $2,400,000,000 or about 60 per cent
was derived from income taxes;tand almost 90 per cent of these taxes are paid
to the Government in the four quarterly tax payment months, March, June,
September and December.

The actual amount of income tax collections during

these months in the fiscal year 1930 varied from about 516 to 560 million
dollars.

Furthermore, payments by foreign governments which are now con­

siderably in excess of 200 million dollars each year, are received chiefly
in December and June.

As a consequence of the concentration of these important

items of revenue in a few months of the year, the Treasury receives over twothirds of its annual revenue during the four quarterly tax payment months —
March, June, September and December—

in amounts which in 1930 varied from

about 670 million dollars to about 800 million dollars as compared with
revenue varying from about 140 million to 175 million in the other eight
months of that year.
It is obvious that in each of the quarterly tax payment months the
Treasury has ordinary receipts considerably in excess of requirements for
current expenditures, whereas in the intervening months expenditures are

- 7 -

considerably in excess of ordinary receipts.

For example, during the

three months beginning September 1, 1930, current ordinary receipts
exceeded expenditures by 295 million dollars in September, but were 227
and 124 millions less than expenditures in October and November, respec­
tively.
In providing funds to meet current Federal expenditures, the Treasury
must find the means of distributing receipts which rise to a peak at quarterly
intervals, and avoid the disturbance to the financial market which would
result if they were withheld from the market until expended in defraying
the ordinary governmental costs as they accrue.

The Treasury meets these two

requirements largely through its short-term debt operations.
A part of the outstanding public debt is maintained in the form of
short-term obligations —

for the most part Treasury certificates of indebted­

ness issued for one year or less, maturing on quarterly tax payment dates.
These issues are significant in relation to the subject we are at the moment
considering because they are the principal means through which the Treasury's
cash position can be adjusted.

Attention should be directed in passing,

however, to a second reason for maintaining a part of the public debt in
the form of short-term securities.

Since the end of the World War tne

Federal Government has devoted a considerable part of its revenues to txie
retirement of the war debt, as provided by Congress,

The statutory require­

ment for the retirement of public debt and the orderly conduct of the program
for handling the outstanding debt both demand yearly maturities of govern—
ment obligations to the retirement of which the sinking fund may be applied.

The problem of arranging maturities to meet the requirements of an orderly
debt retirement program is a difficult one, and in dealing with it the
Treasury has found it necessary to employ not only long-term obligations,
that is, bonds, but Treasury notes of intermediate maturity and obligations
of short maturity.

Each form of obligation plays an important part in the

management of the public debt.
Returning now to the purpose which is served by the certificates of
indebtedness in the maintenance of the Treasury* s cash position, I have
indicated that the certificates are issued to mature on quarterly tax payment
dates*

They are issued in amounts which are intended to provide funds which

together with the ordinary receipts during the subsequent quarter will be
adequate to meet requirements for current expenditures during the period,
and to provide maturities on future tax payment dates sufficient to absorb
the temporary excess of funds made available through heavy quarterly income
tax payments.

Let me illustrate.

We receive, let us say, $500,000,000 in

income tax payments on or about December 15, and we have half a billion of
certificates maturing that day.

The cash received from the taxpayers is

almost simultaneously paid out to the certificate holders and while a billion
dollars has passed through the Federal Reserve Banks no funds have been taken
from the market.

The new certificates sold, together with current receipts,

will provide for the needs of the government until the next quarter day when
the operation will be repeated.

Payments on these new issues are for the

most part made by credits to the Government* s account on the books of sub­
scribing banks, known as special depositaries, the proceeds of these credit

- 9 -

sales being left on deposit with the purchasing bank until required by the
Treasury to meet its current expenditures, thus involving no withdrawal of
funds from the market until they can be returned through actual expenditures.
It will be seen that the arrangement of maturities to absorb the heavy
excess of receipts on quarterly tax-payment dates and the simultaneous sale
of new short-term obligations largely on credit is in effect somewhat the
some as though the Treasury were to redeposit its excess receipts at such
times with banks throughout the country, with these important differences
and advantages:

(l) It makes the selection of the depositary banks and

amount of the Government1s deposits depend not upon the discretion of the
Secretary of the Treasury but upon the amount of securities which any bank
sees fit to purchase;

(2) It encourages the banks to buy Government securities

for the sake of the resultant temporary deposit, thus giving the Government
a first class primary market for its securities and at the same time pro­
viding machinery through which a secondary distribution" can be made to
actual investors.

This means that the Treasury Department has at its command

a nation-wide sales organization;

(3) It permits large fiscal operations to

be conducted with the minimum of large transfers and withdrawals of funds on a
single day, thus avoiding disturbance to money and credit conditions.
In general it may be said that the amounts of new issues are determined
on the basis of estimates of the Government*s net cash needs until the next
tax payment date.

Until the mid-December financing in 1929 it had been the

practice to provide for the full quarterly requirements through an issue of
certificates of indebtedness.

Beginning in December 1929, however, certificates

-

10

-

were not invariably issued to meet the full estimated requirements between
quarterly tax payment dates.

Instead they were issued in somewhat smaller

amounts and were supplemented by subsequent sales of Treasury bills for cash,
as authorized by the act of June 17, 1929.

Treasury bills are, generally

speaking, sixty to ninety day obligations sold for cash on a discount basis
under competitive bidding at the most favorable prices bid by prospective
purchasers.

The chief advantages of this new instrument which is intended,

to supplement and not to supplant other Treasury issues- include (l) procurement
by the Treasury of the lowest discount rate consistent with market conditions
as a result of competitive bidding;

(2) the avoidance of the necessity for

the Treasury to estimaté thé rate at which its. current financing should be
undertaken;

(3) the opportunity of obtaining certain funds when needed

instead of "borrowing them' in advance of requirements with consequent additional
interest cost since they can'be'sold at any time when convenient.

These bills

obviously facilitate the difficult work of adjusting the Treasury1s cash
position either throughthe. issuance .of, new Treasury bills or by pemitting
outstanding Treasury bills, to run off at maturity ad the existing situation
may require.

Finally, these bills can be made to mature on days when income

tax checks are actually being collected rather than on the nominal dates
of tax collection.

In general, it. may be shid that this flexible supplement

to certificates of indebtedness should at times enable the Treasury more
promptly to take advantage of changing conditions in the money market.
Now let us see how the Treasury financial arrangements actually
worked out in the quarter September 1 - November 30, 1930*

On August 31,

the published daily statement of the Treasury showed in its general fund
a net balance of about $104,000,000.

The net balance represents from an

accounting point of view the Government*s "Cash till".
At the beginning of September the Government faced expenditures which
during September, October, and November were to aggregate 308, 375 and 245
million dollars, respectively, including purchases of 40 million dollars
of debt for the sinking fund in September, 135 millions of interest in
October and the payment in November of about 24 millions on account of
loans under the agricultural marketing act.

In addition to the above there

were 352 millions of certificates of indebtedness and 51 millions of Treasury
bills which matured on September 15, and 120 millions of Treasury bills which
matured on November 17.

For all purposes, therefore, the Treasury needed

711 millions in September, 375 millions in October, and 365 millions in
November, a total of about $1,450,000,000 for the quarter.

Receipts from

taxes and miscellaneous sources would total 871 millions for these three
months •
During the first half of September, the Governments expenditures
were met through customs, internal revenue and other current receipts and by
practically exhausting its current balances which had been calculated so as
to be just adequate to carry the Government until the middle of September.
The Treasury takes pride in never having on hand more funds than are actually
needed.

Idle money is Expensive.

The quarterly income tax payments of

almost 500 millions due on September 15, provided funds for the retirement
of 403 millions of debt, which matured on that date and something over for
current esnenditures.

The Treasury issued on the 15th of September 334

-

12-

millions of certificates of indebtedness maturing September 15, 1931*
As usual these issues were paid for largely by credit at the special
depositaries.

The Government had a net general fund balance at the end of

September of 227 millions more than at the beginning of the month, most
of the increase representing increase in its balances ,at depositary banks.
On October 15, interest payments on the Fourth Liberty Loan were due.
These, 7/ith other interest payments during that month, totaled 135 millions,
the largest payments of this kind in any month during the year.

Partly as a

result of these payments the Treasury faced expenditures during the month
in excess of receipts by almost 227 millions.

Although all of the additional

funds needed to meet this situation could have been obtained by a larger
issue of certificates in September, this was not done.

Inste,ad the Treasury

bills totaling 103 millions were sold on October 15.and 16, the cash proceeds
being returned to the market at once in interest payments.

The balance

required in excess of current revenues was met by withdrawals from the
special depositary banks.
The Treasury operations in October illustrate certain of the advantages
in the use of Treasury bills.

If funds had been secured in September to

cover the interest payments in October, the Government would have incurred
an additional cost amounting to the difference between 2 3 / 8 per cent, the
rate borne by the September certificóles, and the 2 per cent which was then
received on funds with depositary banks, or 3/8 of one per cent on 103
millions for 30 days.

Ihrthermore, with an ea,sing money market the bills

were sold at a bank discount rate of less than 2 per cent in October as
compared with a rate of 2 3/8 per cent on the September certificates.

- 13 -

In November expenditures again exceeded current revenues, this time
largely because of the maturity of Treasury bills on the 17th.

This debt

maturity was met by a new issue of bills, and additional funds needed for
other expenditures were met from the general fund balance.
the financial operations for one quarter.

This completes

At the beginning of December the

Treasury again made plans for adjusting receipts to expenditures for a
three-months1 period.

This illustrates how the Treasury meets the current

enormous needs of the Federal Government with a comparatively small
current cash balance, and receives and clears immense sums without any
disturbance of our delicate financial mechanism.
Let us conclude with a brief discussion of our war debt.
On June 30, 1920 our total interest-bearing debt outstanding amounted
to $24,061,000,000.

The average interest rate was 4.225$, and the annual

interest charge came to $1,016,000,000.

This constituted a colossal burden

even for so rich a country as ours.
Ten years later, on June 30, 1930, the total interest-bearing debt
had been reduced to $15,921,000,000, or by over $8,100,000,000.

The

average interest rate was 3.806$, and the total annual interest charge about
$606,000,000, an animal saving of approximately $410,000,000,

The Second

and Third Liberty Loan Bonds, aggregating on June 30, 1920, approximately 7
billion dollars, had been paid off, as had $827,000,000 of war savings
certificates.

Instead of approximately 8 billion dollars of short-term

obligations, there were outstanding $1,626,000,000 Treasury notes maturing
within

years, $1,264,000,000 of Treasury certificates, and $156,000,000

of Treasury bills, or a total of $3,046,000,000.

- 14 -

The striking differences between the national debt of a decade ago
and today are as follows:
and one-third per cent;

(l) a reduction in size of about thirty-three
(2) a marked lightening of the interest burden;

(3) a change in character that has resulted in infinitely more convenient
maturities and in a much better control over the time and rate of retirement;
and (4) the shrinkage in the volume of outstanding long-term obligations
of the United States Government.

Whereas ten years ago there were almost

16 billion of bonds not redeemable until after five years, today there are
only some 3 billion.

The time element has, of course, been an important

factor in effecting this reduction, in that through lapse of time the First
and Fourth Liberty Loan bonds, which in 1920 could be classed as long-term
bonds, are now callable inside of three years.
From June 30,: 1920, to June 30, 1930, the sinking fund contributed
$3,187,000,000 to debt retirement; foreign debt repayments, principal and
interest, $1,416,000,000; surplus funds, $3,247,000,000; and miscellaneous
$263,000,000.

Based on past experience, future prospects and existing

policy, it is not unreasonable to expect that our entire war debt may be
liquidated by 1949.
Let me now say a word or two about the rather simple principles
which govern Treasury refunding and retirement operations.
We have to start with a definite amount of outstanding obligations
extending over a period of years, with varying maturities, some of which the
Treasury controls by means of call provisions.

Second, we know the fixed

dates on which certain obligations have to be met; and there are, in addition,

- 15

a number of open dates which may he filled either by making use Ox
the call provision of a particular issue or by the issue of a new maturity
through a refunding operation.

It is these open dates that give tne

Treasury a very considerable measure of freedom as to the maturities of
Government obligations.
But there are limitations.

Bor instance, we must be careful in pre­

paring our schedule to see that enough securities either mature or are
callable every year to enable us to effect the retirements from the sinking
fund required by law.
Sinking fund retirements must be effected at an average cost of not
in excess of par, and the great majority of retirements from this source
from now on must be made at par.

This means that unless there are adequate

maturities in each year, the Treasury Department might find itself unable to
make any retirements from the sinking fund, for United States Government
securities have a tendency to mount to a premium.
We know, in the third place, though not quite so accurately, what
funds will be available for debt retirement from the sinking fund and
foreign repayments, and we must estimate as best we can what sums may be
expected by way of surplus, for it is obvious that this last item is
susceptible to very great variations.
With this information on hand, we are enabled to prepare what may
be called a timetable of payments which, in so far as the aggregate amount
to be retired over a given number of years is concerned, is probably faixly
accurate.

But should it prove otherwise, no difficulty need be experienced,

since it would always be possible, if necessary in the later years, to extend
the life of the debt by refunding maturing obligations.

16

-

TTithin the limits thus staked out, the Treasury, as stated aoove}
retains considerable liberty of action, having, as it has, the option of
filling the earlier open dates with short-term maturities, or the later
ones with securities of a longer life.

In reaching a decision on this

question from time to time and as occasion arises, the Treasury must be
governed, both as to rates and maturities, by current conditions, and these
conditions vary rapidly.

They do not permit a detailed program to be mapped

out in advance, but only a general one, embodying a number of alternative
propositions, the most appropriate one of which may be selected when the time
for action has come.
So much, then, for the conditions which determine the character
and maturity of a new issue.

The question of interest rates is one re­

quiring a greater degree of judgment, but here again current yield rates
for different maturities offer a fairly reliable guide, always taking
into consideration what the long-time trend is likely to be and never
forgetting that the volume of United States Government securities is con­
stantly and rapidly diminishing, and that not many more years will elapse
before this most convenient and safe form of investment which we have
become so thoroughly accustomed to during the last decade will be available
only in limited amounts, and that their scarcity value is a consideration
which cannot be neglected.

TREASURY DEPARTMENT

TOR IMMEDIATE RELEASE,

JANUARY 17, 1931.

Secretary Mellon announces today that the firm of Magney
and Tusler, Inc., of Minneapolis, Minnesota, has been selected
as architects for the proposed new post office building at
Minneapolis to be located at First Street, South, Hennepin
Avenue, High Street and Third Avenue.
Formal contract will be entered into with the above
firm as soon as title to the site is vested in the United States.

m i

FOR RELEASE, MORNING PAPERS,
Tuesday, January 27, 1931.

TREASURY DEPARTMENT

STATEMENT BY SECRETARY MELLON

The Secretary of the Treasury gives notice that tenders are invited for
Treasury hills to the amount of $60,000,000, or thereabouts.

They will be

90-day bills; and will be sold on a discount basis to the highest bidders.
Tenders will be received at the Federal Reserve Banks, or the branches thereof,
up to two o* clock P. M., Eastern Standard time, on January 30, 1931.

Tenders

will not be received at the Treasury Department, Washington.
The Treasury bills will be issued in two series, $30,000,000, or there­
abouts, to be dated February 3, 1931, and maturing on May 4, 1931, and
$30,000,000, or thereabouts, to be dated February 4, 1931, and maturing
May 5, 1931.

Bidders will not be required or permitted to bid for a particular

series, but the Treasury will apportion each accepted bid equally between the
two series in so far as the minimum denomination of $1 ,0 0 0 will permit,

At

maturity the face amount of the bills will be payable without interest,

The

bills will be issued in bearer form only, and in amounts or denominations of
$1 ,0 0 0 , $1 0 ,0 0 0 , and $10 0 ,0 0 0 (maturity value).
It is urged that tenders be made on the printed forms and forwarded in
the special envelopes which will be supplied by the Federal Reserve Banks or
branches upon application therefor.
No tender for an amount less than $1,000 will be considexed,
must be in multiples of $1,000.

¿ach tender

The price offered must be expressed on the

basis of 100, with not more than three decimal places, e. g. , 99.125.

Frac­

tions must not be used.
Tenders will be accepted without cash deposit from incorporated banks and
trust comoanies and from responsible and recognized deaders in investment

securities.

Tenders from others must he accompanied by a deposit of 10 per

cent of the face amount of Treasury hills applied for, unless the tenders are
accompanied hy an express guaranty of payment hy an incorporated hank or trust
company.
Immediately after the closing hour for receipt of tenders on January 30,
1931, all tenders received at the Federal Reserve Banks or branches thereof up
to. the closing hour will he opened and public announcement of the acceptable
prices will follow as soon as possible thereafter* probably on the following
morning.

The Secretary of the Treasury expressly reserves the right to reject

any or all tenders or parts of tenders, and to allot less than the amount ap­
plied for, and liis action in any such respect shall be final.

Those submitting

tenders will be advised of the acceptance or rejection thereof.

With respect

to bidders whose tenders have been accepted, such advice will state the amount
of each series allotted.

Payment at the price offered for Treasury bills al­

lotted must be made at the Federal Reserve Banks in cash or other immediately
available funds on February 3 , 1931, for the bills allotted bearing that date of
issue, and on February 4, 1931, for bills allotted bearing the latter date of
issue.
The Treasury bills will be exempt, as to principal and interest, and any
gain from the sale or other disposition thereof will also be exempt, from all
taxation, except estate and inheritance taxes.

No loss from the sale or other

disposition of the Treasury bills shall be allowed as a deduction, or otnerwise
recognized, for the purposes of any tax new/ or hereafter imposed by the United
States or any of its possessions.
Treasury Department Circular No. 418, as amended, dated June 25, 1930, and
this notice as issued by the Secretary of the Treasury, prescribe the terms of
the Treasury bills and govern the conditions of their issue.

Copies of the

circular may be obtained from any Federal Reserve Bank or branch thereof.

TRSisUHY D Ï& A É ÎM T

For release upon the Secretaries
appearance "before Senate Finance
Committee at about 10 A.M.,,
Wednesday, January 28, 1931.

Statement "by Secretary Mellon "before the Senate Finance Committee
in respect of "bills providing for the immediate payment to veterans
of the face value of their Adjusted Service Certificates.

The proposed measures now before the Finance Committee for consider­
ation provide for the payment of the face value of the veterans» adjusted
service certificates at a cost of approximately $3,400,000,000.

These

certificates do not mature, generally speaking, until 1945.
I am glad to appear before you to consider whether any such colossal
sum could be raised, and if so, what the effects would be on the finances
and credit of the Government and the economic situation of the countj.»vThe Finance Committee of the Senate shares with tne Treasury the great
responsibility of Protecting the integrity of our financial and economic
structure, end I am sure that you would not want to embark upon a project
that would affect them seriously, particularly in this period of depression.
The present condition of the public finances is far from being satis­
factory.

Expenditures are running considerably in excess of receipts.

We

will close the year with a deficit which, based on present indications,
will be not less than $375,000,000.

In saying this, you will appreciate

how difficult it is to make any accurate prophecy in view of the uncertainty
which surrounds prospective income-tax receipts.
they will net come up to the estimated figures.

We are apprehensive tnat
According to present

estimantes we will reduce our national debt by about $65,000,000 during tne
present twelve months period, an insignificant amount, and even this reduc
tion may melt away before June 30th, leaving us with an actual increase.
Obviously this is no time for the reckless and unwarranted abuse of tne
public credit.

-

2

-

Three "billion four hundred million dollars is an immense sum.
almost one-fourth of our outstanding interest-bearing debt.

It is

It is equal

to more than one-half of the average annual total of new capital issues
in the United States for both foreign and domestic purposes.

It exceeds

the total amount of long-term domestic and foreign bond issues, exclusive
of refunding, sold during the years

1919, 1920, and 1921, is about equal

to the total for 1922 and 1923, and .is about 85$ of those sold as recently
as 1929.

To find any Government offering comparable in size, we have

to go back to the war days and the Liberty bond issues, when, it will be
remembered, the entire country was organized even down to the smallest
hamlet and when people had the strongest urge to subscribe from a patriotic
motive.

Moreover, these earlier issues were marketed at a time when war in­

flation was under way, incomes appeared to be increasing, and there was no
unemployment, while at the present time the country is’going through a severe
economic depression and there is a large army of unemployed.

I can say with­

out qualification that the Treasury Department could not sell $3,400,000,000
of bonds at the present time except on terms which it would be very hard to
justify and without complete disorganization of the Government and other
security markets, With the most serious consequences not only to the public
credit but to our entire economic structure.

Coming at this time such action

would seriously retard a business recovery» and so prolong unemployment, which
to-day is bringing misery and want to so many of our fellow countrymen.
It is true that in the course of the last decade the Treasury Department
has successfully undertaken some very large credit operations, but they were
all in the nature of refunding operations which involved in every instance
the retirement of more outstanding securities than the amount of the new

J7

-3issues.

During every one of the ten years there was a substantial reduction

in the public debt, and the credit operations undertaken by the Treasury in
effect amounted simply to the replacing in constantly diminishing amount of
public debt obligations already outstanding.

But the proposals now before

you contemplate, not the replacement of outstanding securities, but a demand
for fresh money in the form of a $3,400,000,000 draft on the investment
funds of the country, accompanied by a huge increase in the public debt.
The additional cost due to the conversion of this debt payable fourteen
years in the future into an interest-bearing obligation as contemplated
would be approximately $262,000,000 a year, or an increase of $150,000,000
over the annual appropriation.now being made of $112,000,000.
not the whole story.

But that is

For some time to come every other issue of securities

which we must offer would as a result of this operation bear a higher in­
terest rate than it jj^Sfeerwise would*

In this

connection I must remind

you that we have a maturity of $1,100,000,000 on March 15th next, and that
within the next two and one-half years some $8 ,0 0 0 ,0 0 0 ,0 0 0 of securities,
mostly bearing a 4^¡o interest rate, become callable.

It is not easy to

estimate this increased interest charge accurately, but it would be a large
amount and the total annual increased debt-service charge would exceed

$ 2 0 0 , 00 0 , 000 .
But serious as would be the direct consequences to the Treasury and to
the public credit, the indirect consequences to the country would be even
more serious.
It must be obvious that the sale of Government securities in such
volume, at a much higher interest rate than the yield based on the price at
which Government bonds are now selling, must immediately depreciate very
materially the price of all United States bonds*

Although available figures

-4—
aro incomplete, it is estimated that well over $2,000,000,000 of Government
securities are held by individuals, who have invested their savings in what
they had tho right to believe was one of the safest and most stable securi­
ties in the world.

They will suffer a large loss in value.

The insurance

companies that are responsible for the savings of millions of Americans
aro substantial holdors of Government securities.

Millions of policy holders

will be compelled to make a heavy contribution in the way of depreciation
of capital values.

The member banks of the Federal Reserve System - without

considering the many state non-member banks - hold $4 ,0 0 0 ,0 0 0 ,0 0 0 of United
States securities as a secondary reserve.

They likewise will have to write

down the value of their Government securities, which will be particularly
serious in the case of many country banks.

Thus the effect of these measures

will be equivalent to a capital levy on the holders of all United States
Government securities.

X venture to say that if these bills Were framed m

this form you would not consider them*
But the effect on values would not he limited to Government securities.
The value of all other bonds would be affected, and the enactment of any one
of these bills into law would thus almost automatically destroy capital
values running into hundreds of millions of dollars.
The marketing of these bonds at the present time would kill the
bond market for any other kinds of securities.

One of the helpful aspects

of a period of inactive business and low money rates is that it offers
far-sighted business concerns opportunity for improving and moderniz­
ing equipment and reducing costs.

Impairment of the bond market would not

only interfere with this process, but would mean that many large undertakings,

- 5 especially public works and public utilities, which it is planned to
finance through the bond market, would be abandoned.

The market for

foreign securities would also be destroyed for a considerable period and
this would have a serious disturbing effect on the world situation.

Not

only would it interfere with the marketing of our surplus products, which
under present circumstances depends in large measure on foreign financing
in this country, but it would also greatly disturb world trade and world equili­
brium.

The serious consequences of a radical falling off in foreign financ­

ing were experienced in this country in 19 2 9 when our foreign trade diminished
and the world was forced to send us a great deal of gold, which it could ill
afford to spare.

The absorption of all available investment funds into

Government securities would kill the bond market, and yet it is to the
development of the bond market and of bond financed construction and related
activity that the country is looking as the principal hope for an early
recovery of business*

As I have already pointed out, $3>^00»000,000 of new

securities amounts to an issue equal to more than one—half of the total
average annual capital issues in the United States, exclusive of refunding,
both foreign and domestic.
It is in^ossible, of course, for the investment market to absorb the
proposed amount in toto.

To the extent that the amount is not absorbed by

the use of investment funds, the remainder would have to be obtained, if
at all, through the creation of bank credit or some other form of inflation.
There would probably be some rise in prices, with a further dislocation
of the price relationship between consumption goods and raw materials,
since the latter are more or less determined in world markets that
would be unaffected by our temporary inflation, though they would

suffer from the drying up of our market for foreign loans.

The rise in

the-prices of consumption goods would he followed hy a drop when the stimu­
lating effect of inflation will have worn off, and the drop, according to
the usual course of events, would bring prices to a lower level than that
prevailing at the present time.

There would after a while he a deepen

depression than the one from which the world is suffering to-day, emphasized
still further hy the temporary stimulation.
There is no economic merit in the proposal,

From the point of view of

stimulating business, it is a plan for unmitigated inflation, with the dis­
astrous results of which the world is only too familiar.

On the investment

side it means the exhaustion of the security markets and the creation of a
serious impediment to business recovery both here and abroad.

To the unem­

ployed it spells further retardation of the day when normal employment will
be available.

From the point of view of the United States Treasury it

represents complete disorganization of an orderly program for the refunding .
and retirement of our war debt and a tremendous increase in interest charges.
To the taxpayer it means the destruction of all hope of the lightening of
the load of taxation for years to come and a probable increase in taxes in the
very near future.

How the veterans and their families, who after all are an

inseparable part of the American people and whose prosperity and welfare are
inextricably bound up with the prosperity and welfare of all, can hope to
find relief and improvement in their condition from the universal and
destructive consequences which these measures would entail is beyond com
prehension.

TREASURY DEPARTMENT

FOR RELEASE, MORNING PAPERS,
SATURDAY, JANUARY 31* 1931*

STATEMENT BY SECRETARY MELLON

Secretary Mellon announced to-day that the tenders for $60,000,000
or thereabouts, of 90-day Treasury Bills which were offered on January 27
1931, were opened at the Federal Reserve Banks on January 30, 1931,

The

Treasury1 s earlier announcement provided that the bills would be issued
in two series, $30,000,000, or thereabouts, dated February 3, 1931, and
maturing May 4, 1931, and $30,000,000,. or thereabouts, dated February 4,
1931, and maturing May 5, 1931, the accepted bids to be apportioned by
the Treasury equally between the two series, in so far as the minimum
denomination of $1 ,0 0 0 will «permit.
The total amount applied for was $327,805,000,
made was

The highest bid

99,782, equivalent to an interest rate of about 7 / 8

cent on an annual basis,

of 1 per

Tbe lowest bid accepted was 9 9 ,7 5 3 , equivalent

to an interest rate of abou^ 1 per cent on an annual basis.

The total

amount of bids accepted was $60,000,000, which have been equally appor­
tioned between the two series.
be issued is about 99,763,
is about 0*95 per cent.

The average price of Treasury Bills to

The average rate on a bank discount basis

TREASURY DEPARTMENT

EOR IMMEDIATE RELEASE
JANUARY 29, 1931.

The Secretary of the Treasury announces the selection of
the firm of Voelcker and Dixon, Inc., of Wichita Falls, Texas,
as architects for the proposed new Post Office, Courthouse,
etc., "building at Wichita Falls, Texas.
Contract with the above-mentioned firm will be entered
into as soon as title to the site is vested in the United Stat

TREASURY DEPARTMENT

POE IMMEDIATE RELEASE,
SATURDAY, PEBRUAEY 7t 1931

Statement "by Secretary Mellon:

%

attention has been called to articles appearing in the

public press to-day’suggesting that the Treasury Department is
giving favorable consideration to a so-called compromise measure
looking to the amendment of the adjusted service certificate lav*
3To compromise measures informally suggested to the Treasury up
to the present time have received its approval*

FOR RELEASE, MORNING PAPERS,
SATURDAY, FEBRUARY 7, 1931.

TREASURY DEPARTMENT

11 THE PAPER MONEY OF THE UNITED STATES”.

Radio Address
^y
Kon. Walter Ewing Hope,
Assistant Secretary of the Treasury,
over
Station WMAL
under auspices of
"SCIENCE SERVICE",
Washington,D.C.

Friday afternoon, February 6 , 1931

In speaking of MThe Paper Money of the United States", I am not sure
that you will he as much interested in the scientific as in the practical
aspects of the subject.

I suspect that just at present some of my hearers

would prefer to he told how they can get some rather than how it is made.
In this connection I am reminded of the customer who went into the cheap
restaurant and ordered lobster a la ITewburg.

The waiter to whom he gave

the order was pretty hard-boiled, and his reply was "Gosh.’ if there was any­
thing like that in this dump I ’d eat it myself."
There are many points of interest, however, about our currency and I
shall try, in the brief time allotted me, to give you a few facts concerning
it.
As everyone knows, there are two kinds of money, paper currency and coins
Both kinds are manufactured by the Treasury Department - the coins at the
various mints and the paper money at the Bureau of Engraving and Printing at
Washington,

The public prefers paper money to coin, and except foil the

fractional parts of a dollar, paper money is generally used to the exclusion
of coin.

As paper naturally wears out from handling, it is constantly

necessary for the Treasury to replace the paper money by substituting new
bills for old.

The average life of a one dollar bill is about nine months.

Larger denominations last somewhat longer.

In order to replace the worn

out currency we must print one billion new bills a year.

End to end, even

though the size has been reduced, the annual output would reach around the
earth at the equator about four times.

The Bureau of Engraving and Printing

which prints the paper money, is a large sized manufacturing plant of the most
modern type, employing about 4,500 people.
public and a visit will well repay you.

It is open to inspection by the

-

2

-

The Government first issued paper money in the early days of the uivil
War in the form of United States Notes;

Later, other forms of paper money

were issued, and to-day five kinds are in use, - United States Notes, Gold
Certificates, Silver Certificates, Federal Reserve Notes, and National Sank
Notes.

The United States Notes were issued in 1862 at a time when coin had

largely disappeared from circulation, and they survive to this day.

The total

outstanding is $346*000,000, and the notes are protected hy a gold reserve of
$156,000,000 held in the Treasury.
posits of gold in the Treasury.

Gold certificates are issued against de­
They are in effect warehouse receipts for

gold and the gold is actually held for the payment of these certificates,
are now outstanding about one and three-quarters billion dollars.

xhe^e

Silver

certificates are likewise issued against deposits of standard silver dollars
the Treasury.
million dollars.

There are now outstanding about four nundred and ninety
These three varieties of paper money are issued directly by

the Treasury*
The tvro other kinds of paper money are oahk notes, those issued by the
National banks and those issued by the Federal Reserve Banks.

National bank

notes are issued to National banks against the deposit with the Treasurer of
the United States of a like amount of United States bonds bearing the circula­
tion privilege.

The only bonds now bearing this circulation privilege are the

2 per cent bonds issued before the War, the total amount now outstanding being
about $675,000,000, which limits the total amount of National bank notes that
may be issued to this figure.
money of the United States.

National bank notes are redeemable in lawful
If a National bank wishes to withdraw its notes

from circulation it must deposit with the Treasurer of the United States lawful
money equal to the amount of its notes outstanding.
the bonds

When this deposit is made

securing the bank notes will be returned by the Treasury.

Federal

y?
- 3 -

reserve notes are issued to Federal Reserve Banks against the deposit of col­
lateral of equal amount.

This collateral must include 40 per cent gold.

The

"balance may consist of eligible paper which has "been discounted or purchased in
the open market by Federal Reserve Banks and which meets certain legal require­
ments, or it may consist of gold or gold certificates.

Federal reserve notes

furnish the elastic element to our currency system, being issued when they are
required and subsequently retired when they are no longer needed.
One of the frequent questions asked at the Treasury is how money gets into
circulation.
money.

Of course this question applies to coins as well as to paper

There are many ways by which this is accomplished,

A holder

of

gold may deposit the gold at a Mint or Assay office and receive United States
gold coin of like value, or, if he prefers, he may receive gold certificates.
Money also gets into circulation through the payment by the Government of its
obligations in cash.

Rational banks and Federal reserve banks put their notes,

into circulation either by paying them out to investors oh in cashing checks,
or on account of loans granted by these banks.

Or these banks may pay out on

any account any form of United States money which they may have on hand.

Ordi­

narily the public is not conscious of increases or decreases of money in actual
use, for the process works automatically, and for the most part through deposits
in and withdrawals from banks, and banks in turn deal with other banks, and
finally

with the Federal Reserve Banks, and they in turn with the Treasury.

Including that in circulation and that held in "the reserves of the Federal
Reserve Banks, the total amount of all the paper money outstanding on December
31, 1930 was more than $5,450,000,000.
more than 900,000,000 separate bills.

This paper money was represented by
The paper money makes up something over

eighty per cent of the total amount of money in circulation.

Yet, notwitnstand-

ing the greater convenience and suitability as a medium of exchange, paper
money would not be so generally used iw* it were not for the fact that its

- 4 L

integrit3/r is maintained "by the United States and that as a practical matter it
has the same standing as gold coin.

The people of the United States are

fortunate in having a paper currency of unquestioned worth which does not
fluctuate as compared to coin.
Just a year and a half ago, the Treasury inaugurated
change ever made in the form of our paper currency.

the first important

First of all, the size was

reduced about one-third, and at the same time new designs were introduced.
Previous to that, it was the usual practice to issue paper money with a dif—
ferent design for each face and back of each denomination.

Moreover, changes

in the designs of outstanding issues were made from time to time.
ing multiplicity of designs was very confusing.

The result-

For one thing, the situation

favored counterfeiters and handicapped the Secret Service in their detection*
An exhaustive study was made and resulted-in the decision to reduce the size
and to make the designs uniform for bills of the same face value.
were made uniform for each denomination, irrespective of 'the kind.

The backs
Thus j'uu

can always tell a $5 bill from the back, although you would have to consult the
face in order to tell what variety of bill it is.

The face designs were also

made characteristic for each denomination but with enough variation in detail
to show the kind.

The same portrait is used on all bills of the same denomina­

tion, irrespective of kind.

Thus, in the small-size currency the portrait of

Washington appears on all $ 1 bills, the portrait of Lincoln on all $5 bills,
and the portrait of Hamilton on all $10 bills.

This feature is of great as­

sistance in detecting attempts at note-raising, for if the portrait of Washington
is found on any small-size bill of more than $1, it is clearly spurious.

To

test the observation of your friends, cover up the denomination of a small— size
$5 bill and merely show them the portrait of Lincoln.

It would be interesting

to find out how many of your acquaintances can state the value by the portrait.

It took over two years to prepare the new currency for issue, and its
actual use was inaugurated in July 1929, the small-size currency "being issued
as the old size was retired.

By the end of 1929 only small-size currency was

being issued by the Treasury, and it was surprising how rapidly the old largesize bills disappeared from circulation.

I venture to say that it has beer-

many months since you have encountered any of the old bills.

You will be sur­

prised to learn, therefore, that there remained outstanding on December 31st,
last, about one hundred million of the old size bills, of an aggregate face
value of over $800,000,000.

Where this currency is I do not know.

Of course,

the bills continue to come in steadily for exchange, but in lessening amounts.
Part of it is probably held as inactive reserves by banks which have not taken
the trouble to exchange it for the new size.
all oyer the world.

A part is hoarded or is in hiding

Part has been destroyed, although it is the experience of

the Treasury that much less is actually destroyed than is popularly assumed.
Part has been lost and may or may not be, recovered.
held by collectors.

And some small part is

Most of this currency will eventually reach the Treasury,

but only after many years.
It is to be noted in passing that the new small-size currency effected a
material saving in cost, both of materials and of labor.• We are now enabled
to print twelve notes to a sheet, where formerly we only printed eight.
Furthermore, from the standpoint of convenience, the smaller bills are more
satisfactory than the large size.

They seem to have met with almost universal

approval on the part of the public, and I do not now recall a single complaint,
nor do I believe the public would consider for a moment a return to the old size
currency which was in use for so many years.
There are two frauds that may be perpetrated against the paper currency,
one is counterfeiting and the other is the raising of the denominational value.
As to the raising of bills, I have already referred to the fact that the use of

the same portrait upon all hills of the same value has greatly increased the
possibility of quick detection.

As to counterfeiting, while the size of the

hills has been reduced and many wholly unnecessary ornamental details have been
eliminated, the same portraits as were formerly used and found so successful in
preventing counterfeiting have been retained without reduction in size, and the
currency is produced to-day by the Bureau of Engraving and Printing in exactly
the same manner as was the old, being printed from finely engraved plates by the
wet intaglio process with the highest degree of skill.

The new currency, there

fore, is quite as secure* as the old against counterfeiting, and the Chief of the
Secret Service informs me that most of the attempts at counterfeiting during the
past year have been extremely crude and easy of detection.

The use of the

finely engraved portrait is one of the chief protections, and, as I have stated,
if our citizens would take the pains to familiarize themselves with the portrait
which identify the respective denominations, note-raising, for example, would
soon become a lost art, and counterfeiters would have morh difficulty in passing
spurious bills.
Our experts in the Treasury Department have been repeatedly asked how to
detect counterfeit money.
is genuine”.

There is but one answer to this question,

hKxlow

what

To know what is genuine, one must familiarize himself with the

prominent features displayed on the currency.

As stated, the finely engraved

portrait prominently displayed in the center of each bill is the best guide in
the determination of the genuineness of the bill.

The counterfeiter no longer

resorts to hand—engraving, being aware that the majority of our people merely
glance at the figures on a bill to determine how much money it represents; and
it is this careless handling of currency that contributes to whatever success
attends a counterfeiting enterprise.

On the other hand, the success of the

Secret Service in keeping counterfeiting at a minimum is no doubt responsible
for the absende of suspicion and the feeling of security upon the part of the
public.

7

The orphan in our currency family is the two-dollar bill.

It is generally

unpopular, sometimes refused by the public, and there is a superstition that it
is unlucky;

The two-dollar denomination, moreover, is out of line with the

decimal system, and the Treasury has frequently been criticized for continuing
it.

However, it does circulate largely in Hew England, where, in these latter

days at least, they apparently defy superstition*

In any event, existing law

requires that it be issued, and there is no immediate prospect of its discon­
tinuance.
All worn-out paper money comes back to the Treasury where it is counted and^_
destroyed and new paper money issued in its place.

On an average more tnan

3,000,000 worn-out bills are received at the Treasury each day.

Every one of

these bills is examined to determine that the amount is correct, that the kind
is correct, and that the bill is genuine.

After they have been counted the

bills are destroyed by maceration, that is, they are subjected to a cooking pro­
cess which utterly destroys their identity as money.
paper money are so destroyed each day.

Several tons of worn-out

A worn-out bill, no matter what its

condition, will be honored at the Treasury if identification is possible, and
we have frequent instances of fragments of paper money being presented for
identification and redemption.

Several counters in the Treasurer's office a±e

very expert in identifying these fragments.

For example, almost invariably

they are able to identify charred fragments of bills which have been through a
fire.

In these cases, where the circumstances are made known and the fragments

are identified, full payment is made.

But if paper money is utterly destroyed,

so that sufficient fragments do not remain for identification purposes, the
Treasury of course cannot make payment.
I

think perhaps this will constitute a sufficient introduction to our

paper currency and I hope you will be fortunate in maintaining a continuing
and personal contact with it in ample amounts during the coming year.

EtfR RELEASE, MORNING PAPERS,
Monday, February 9, 1931.

TREASURY DEPARTMENT

STATEMENT BY SECRETARY MELLON

The Secretary of the Treasury gives notice that tenders are
invited for Treasury hills to the amount of $150,000,000, or thereabouts.
They will he 91-day hills; and will he sold on a discount basis to the
highest bidders.

Tenders will he received at the Federal Reserve Bahks,

or the branches thereof, up to two o'clock P. M., Eastern Standard time, ,
on February 13, 1931.

Tenders will not he received at the Treasury

Department, Washington.
The Treasury hills will he dated February 16, 1931, and will
mature on May 18, 1931, and on the maturity date the face amount will
he payable without interest.

They will he issued in hearer form only,

and in amounts or denominations of $1,000, $10,000, and $100,000
(maturity value).
It is urged that tenders he made on the printed forms and for­
warded in the special envelopes which will he supplied by the Federal
Reserve Banks or Branches upon application therefor.
Eo tender for an amount less than $1,000 will he considered.
Each tender must he in multiples of $1,000.

The price offered must he

expressed on the basis of 100, with not more than three decimal places,
e. g., 99.125.

Fractions must not he used.

Tenders will he accepted without cash deposit from incorporated
hanks and trust companies and from responsible and recognised dealers
in investment securities.

Tenders from others must he accompanied by

- 2 -

a deposit of 10 per cent of the face amount of Treasury hills applied
for, unless the tenders are accompanied hy an express guaranty of pay­
ment by an incorporated ba£tk or trust company.
Immediately after the closing hour for receipt of tenders on
February 13, 1931, all tenders received at the Federal Reserve Banks or
branches thereof up to the closing hour will be opened and public
announcement of the acceptable prices will follow as soon as possible
thereafter, probably on the following morning.

The Secretary of the

Treasury expressly reserves the right to reject any or all tenders or
parts of tenders, and to allot less than the amount applied for, and
his action in any such respect shall be final.

Those submitting tenders

will be advised of the acceptance or rejection thereof.

Payment at the

price offered for Treasury bills allotted must be made at the Federal
Reserve Banks in cash or other immediately available funds on
Feb ruary 16, 1931.
The Treasury bills will be exempt, as to principal and interest,
and any gain from the sale or other disposition thereof will also be
exempt, from all taxation, except estate and inheritance taxes.

No loss

from the sale or other disposition of the Treasury bills shall be allowed
as a deduction, or otherwise recognized, for the purposes of any tax
now or hereafter imposed by the United States or ary of its possessions.
Treasury Department Circular Do. 418, as amended, dated
June 25, 1930, and this notice as issued by the Secretary of the Treasury,
prescribe the terms of the Treasury bills and govern the conditions of
their issue.

Copies of the circular may be obtained from any Federal

Reserve Bank or branch thereof.

/V I
TREASURY DEPARTMENT

FOR RELEA.SE WHEN DELIVERED.

SPEECH TO BE DELIVERED BY HON. OGDEN L. MILLS,
UNDERSECRETARY OF THE TREASURY,
BEFORE THE BOND CLUB OF NEW YORK
AT A LUNCHEON AT THE BANKERS1 CLUB ON
FEBRUARY 11, 1931.

During the last few weeks you have heard and read much of various
proposals now pending in Congress looking to the amendment of the World War
Veterans1 Adjusted Service Compensation Act, with a view to making funds in
considerable amount immediately available to the veterans either through
redemption of the certificates or by increasing their loan value.

Some of

these proposals have aroused a justifiable apprehension on the part of all
who are interested in an early economic recovery of the country, and who
know how seriously progress would be affected by the huge bond issues con­
templated.

The question is an important and pressing one, and it will re­

pay us,‘ I think, to give a few minutes

consideration to the basic factors

involved.
It will be recalled that after some years of discussion, and after
extensive consideration, the Congress determined to grant to our World War
veterans adjusted compensation in the form of twenty-year endowment poli­
cies rather than the immediate payment of cash.

Each veteran was granted

a credit on the basis of a dollar a day for service in this country, and a
dollar and a quarter a day for service abroad, the credit in any one case
not to exceed $625.

The net basic amount due to each veteran, plus an.

additional credit of 25 per cent, to compensate for deferring the payment

- 2 -

r !>

for twenty years, was used to determine in each case the twenty-year endow­
ment policy that could be purchased on the date the certificate was issued
if the combined amount were applied as a single net premium in accordance
with accepted actuarial principles, with interest at 4 per cent per annum,
compounded annually.
It is important to note, however, that, while the amount of the
endowment insurance policy was determined on the basis of a single net pre­
mium, as a matter of fact Congress did not provide for the payment of a
single net premium, but for annual premiums in an amount which, invested
at 4 per cent compound interest, would provide the necessary funds at matu­
rity,

This last is important since the amount which the veteran can borrow

on his certificate is fixed on an annual premium basis, and this amount is
obviously very much smaller than the amount that could be borrowed on a
single premium basis.

The failure to make the distinction is responsible

for a great deal of the confusion which exists.

The present loan value of

all certificates on an annual premium basis amounts to $730,000,000, where­
as the present loan value based on a single premium of $1,320,000,000, which is
the amount of the basic service credit, would be approximately $1,600,000,000,
So that you may have the whole picture before you, may I add that the
maturity value of all certificates is approximately $3,400,000,000, or an aver­
age of about a thousand dollars a certificate; that about a million six hundred
thousand veterans are borrowing to-day, and that the total amount borrowed is
approximately $325,000,000, or some 44^ per cent of the present loan value,
With the passage of the Adjusted Service Compensation Law, the
veterans and the country had every reason to believe that the adjusted
service compensation problem had been finally settled, and, on the whole,
settled on a., sound basis, since the benefits of an endowment insurance

WMM

- 3 -

policy "both to the veteran and his family are too obvious to need emphasiz­
ing«

But, under the pressure of the present depression, which has serious­

ly affected thousands of veterans, as it has affected every other class of
our population, the suggestion was made that what the veterans needed was
not an endowment insurance policy hut cash.

Any number and every variety

of bill promptly made their appearance in Congress.
posals take two forms:

In the main, the pro­

the first providing for the immediate cash payment

of these certificates either at their face value or at some other value in
excess of their present worth;

the second

for increasing the present loan

value by a very wide margin, and with more or less disregard of sound
actuarial principles.
The proposition to pay the face value of these certificates now
is indefensible.

It would be using the present business depression as an

excuse for distributing about a billion six hundred and forty million dol­
lars to the veterans in the form of a donation over and above what they are
legally entitled to under the Adjusted Service Compensation Law.

To argue

that we are simply anticipating payment, as has been gravely done, is to
ignore a fact known to every highschool boy, that the payment of three Bil­
lion four hundred million dollars fourteen years from now is something very
different from its payment to-day.

Moreover, as the Secretary of the

Treasury has pointed out, and as you gentlemen well know, the United States
Treasury could not market $3,400,000,000 of bonds at the present time, except
at an interest rate that would be hard to justify, accompanied by a whole­
sale depreciation in the value of other securities, which in extent would
probably exceed the amount of the loan, the complete exhaustion of the in­
vestment market for a very long period of time, the retarding of business

7
- 4 -

recovery, and an inflation which would "be inevitably followed by the usual
retribution.

To impair the public credit, to deepen the business depression,

and to prolong unemployment, is to inflict far graver injury on the 3,400,000
veterans who hold these certificates than could ever be compensated for by the
payment of a few hundred dollars to each of them.
In the course of the last ten days, this, I think, has been made
clear to the veterans and to the country, but some, while admitting that the
Treasury couldn't borrow such a staggering sum as three billion and more,
ask, Would not it be possible to float a bond issue of, say, a billion dol­
lars or even a billion and a half without entailing such serious consequences?
These figures, compared with $3,400,000,000, appear relatively small, but they
constitute, nevertheless, immense sums.

The largest issue which has been sold

since the war-time issues was a little over a billion dollars, bearing a
4 per cent interest rate, and there was this vital difference between that
issue and, for that matter, all

other,.Government bond and nofte issues during

the last decade, and the suggested operation: it was a refunding issue and
in no sense an appeal for fresh funds.

In my opinion, it would be impossible

to induce new buyers to purchase a billion dollars of Government bonds at less
than a 4 per cent rate, and a billion and a half of Government bonds at less
than a 44 per cent rate.

The probable effect would be to reduce the value

of outstanding long-term Government bonds by anywhere from 8 to 10 points,
and, as you gentlemen know better than I do, there would be a corresponding
depreciation in general bond prices, or, in other words, a very large writingoff of capital values.

Moreover, it is to the bond market that we look in

times like these for the first stages of a business recovery.

Increased em­

ployment, restored payrolls, and the consequent enlarged purchasing power of
the people cannot be looked for to-day through increased production of con—

- 5 -

sumption goods; they must come, in the first instance, through capital expen­
ditures, the kind of capital expenditures in the way of improvement and de­
velopment of plant that can profitably be made in periods of cheap money.
They are dependent on the bond market.
As a result of the course which events have taken for the last year
or more, investors have become unusually timid.

There has been an excess of

short-term funds, but the market for long-term funds has until recently been
weak.

At the turn of the year we began to witness the gradual restoration of

confidence.

Then the country suddenly realized that the Congress was sex.ous

ly considering the borrowing and distribution of huge sums.
government bonds dropped sharply.

The bond market went flat.

The price of
This is a

sample of what may be expected if we are forced to issue bonds in any consid­
erable-.amount.' But, once this threat is removed, I am hopeful that in a com­
paratively short time a growing stream of investment funds may begin to ap­
pear, which, transformed into capital expenditures, will lay the foundation
for a gradual business recovery.

The sale by the Government of the United

States of as much as a billion dollars of long-term securities at a rate
sufficiently high to attract the savings of new buyers would paralyze this
process, while the funds so obtained would merely serve to stimulate tempo­
rarily a demand for consumption goods.

This must result inevitably in pro­

longing the period of depression and unemployment.
Moreover, the United. States Treasury is not in a position to under­
take such an operation except at an excessively high cost, which mast inevita­
bly he reflected sooner or later in an increased burden of taxation.

I am

not simply referring to the high interest costs of this particular issue, but
to the effects on the debt service charges of our entire national debt,
are faced, as you know, with a maturity of $1,100,000,000 on March 15 next.

In the next two and a half years over $8,000,000,000 of bonds, approximately
83^ of which hear a 4-4 per cent interest rate, become callable*

Large refund

ing operations, both in the immediate and the near future, are unavoidable.
We have some $2,800,000,000 of shott-term obligations outstanding, exclusive
of the bonds that may be called.

We will close this fiscal year with a

deficit which in my judgment will not be leas-than half a billion dollars, and,
far from reducing the national debt this year, it will actually be increased.
The deficit is due, in large measure, to the expansion of Federal constxuction
work, a great part of which may be attributed to the effort to relieve unem­
ployment.

We will expend on this account over $600,000,000 this fiscal year,

as compared with approximately $275,000,000 in 1928,

Against such a back­

ground, can anyone charged with the responsibility of managing the finances
of the United States look with anything but apprehension on a measure which
would compel the immediate sale of a billion or a billion and a half of long
term bonds?

Frankly, I don't see how we could Undertake to supply funds

for this purpose in excess of the amount that could be raised as part Oj. our
current financing program,
I need hardly say that we have all sympathy for the veterans who are
unemployed or whose resources have been so restricted by the present depression
as to cause them distress.

We fully understand how under these circumstances

these men, who have already borrowed on their certificates the full amount per.
mitted by law, would look hopefully to their certificates as a means of obtain­
ing further ready funds, even at the sacrifice of their ultimate redemption
value.

But, from the standpoint of all the veterans and of their families, it

is clear that it is not to their best interest for the Government to offer to
all, irrespective of need, an inducement to cash in their endowment policies
and forego the advantages of future protection, or even to offer them an in­
ducement to borrow and so deplete the value of their endowment policies.

The

*
- 7 -

great trouble with the measures so far introduced is that, while purporting
to be based on a desire to afford relief to veterans because of temporary
need, they have not been designed for meeting such a restricted purpose but
have gone much further.

They have not conformed to actuarial or other

principles which I believe to be sound, and have failed adequately to taske
into consideration the very serious economic effects of compelling the
Government to borrow immense sums at this time.

In so far as the Treasury

Department is concerned, it was and is our plain duty to point out to tne
Congress and to the country the very grave dangers involved in the proposals
heretofore submitted, no matter how well meant.

I am confident that tne

World War veterans themselres will be the first to recognize, as they tnemselves did in the past, that our first duty is to the country; and that what
is injurious to the country cannot be beneficial to the veterans.

FOR RELEASE, MORNING PAPERS
SATURDAY, FEBRUARY 14, 1931

TREASURY DEPARTMENT

STATEMENT BY SECRETARY MELLON

Secretary of the Treasury Mellon announced to-day that
the tenders for $150,000,000, or thereabouts, of 91-day
Treasury Bills dated February IS, 1931, and maturing May 18,
1931, which were offered on February 9, 1931 were opened at
the Federal Reserve Banks on February 13, 1931.
The total amount applied for was $346,532,000.

The

highest bid made was 99.783, equivalent to an interest rate
of about 0.86 per cent on an annual basis.

The lowest bid

accepted was 99.671, equivalent to an interest rate of about
1.30 per cent on an annual basis.
accepted was $154,281,000.
Bills to be issued is 99.695.

The total amount of bids

The’average price of Treasury
The average rate on a bank

discount basis is about 1.21 per cent.

TREASURY DEPARTMENT

FOE IMMEDIATE RELEASE
FEBRUARY- 18, 1931#

The Secretary of the Treasury announces the selection of
Lambert Bass indale, St* Paul, Minn., as the architect for the
proposed federal "building in St# Paul, Minn#

The Firm of Holabird

and Eott, of Chicago, 111#, will he associated as consultant
architects*

POR IMMEDIATE RELEASE,
FEBRUARY 20, 1931.

TREASURY DEPARTMENT

The following letters were made public today:

Assistant Secretary of the Treasury
Washington
February 20, 1931.

My dear Mr. Mellon:
It is a matter of great regret to me that, on account
of the reorganization of my law firm, I find it impossible
to extend further my leave of absence and must accordingly
relinquish my position here as Assistant Secretary of the
Treasury.
In so doing may I tell you how thoroughly I have en­
joyed the privilege of association with you and how deeply
I have appreciated the unfailing kindness and consideration
which you have shown to me.
The work has prbved absorbing­
ly interesting and stimulating, and I have particularly
valued the opportunity of observing, at close range, the
application of your sound judgment, rich experience and
keen insight to the problems of the Treasury.
It has
been an experience which I shall always prize, and I re­
gret that it must come to an end.
With warmest regards,

Yours faithfully,

(Signed) WALTER E. HOPE'
Assistant Secretary of t
Treasury.
Honorable A. W. Mellon,
Secretary of the Treasury,

-

2

-

The Secretary of the Treasury
Washington.

February 2 0 , 1931.

Dear Mr. Hope:
I have received your letter of February 20th, and it is with
great regret that I see you end your service at the Treasury. I
know that for some time past your plans have been made to return to
the practice of law and that you have remained at your post at a
personal sacrifice and only at the earnest desire of the President
and myself.
You have had supervision of important governmental activities,
including the Bureau of Internal Revenue with all the varied and
difficult problems that arise in the administration of the revenue
laws* You brought to your work experience and ability of the first
order and have shown a resourcefulness and devotion to duty which have
been of the greatest value to the Treasury and to me.
For all these and other services which you have rendered to
your government and for the assistance which you have given to me
personally, I wish to thank you. I would like to say also how much
I have enjoyed our association together and how greatly I shall miss
your pleasant and congenial companionship. I hope we shall have
many occasions to meet in the future, and with warm regards and best
wishes, I am
Sincerely yours,

(Signed)
Honorable Walter E. Hope,
Assistant Secretary of the Treasury.

A. W. MELLON
Secretary of the Treasury

TREASURY DEPARTMENT

FOR RELEASE* MORNING PAPERS,
Monday, March 2, 1931.

STAraiRHT BY SECRETARY MELLON

The Treasury is today offering for subscription at par and
accrued interest, through the Federal Reserve Banhs, a combined ofiering of 3-3/0 per cent Treasury bonds and of l|r per cent six-iaonth
certificates of indebtedness and 2 per cent twelve-month certificates
of indebtedness.
The Treasury bonds will be dated and bear interest from
March IS, 1931, will mature on March 15, 1943, and will be redeemable
at the option of the United States on and after Marcn 15, 1941*
The certificates of indebtedness are in two series, both
dated and bearing interest from March 16, 1931, one series, TS2-1931,
being for six months, with interest at who rate of 1 ^ per ceno, and
maturing September 15, 1931, and the other series, TM—1932, being for
twelve months, with interest, at the rate of 2 per cent, and maturing
March 16, 1932.
The amount of the Treasury bond offering is $500,000,000, or
thereabouts, the amount of the offering of six-month certificates of
indebtedness is $300,000,000, or thereabouts, and the amount of the
twelve-month offering of certificates is $600,000,000, or thereabouts.
Applications will be received at the Federal Reserve Banhs.
The Treasury will accept in payment for the new Treasury bonds and

-

2

>

certificates of indebtedness, at par, the 3^ Treasury notes of Series
A-1930-32 and Series B-1930-32, which become due and payable on March
15, 1931.
Subscriptions for the 'Treasury Bonds and the twelve-month
series of certificates of indebtedness, Series TM-1932, in payment of
which 3-J per cent Treasury notes of Series A-1930-32 and Series B—1930-32
are tendered, will be given preferred allotment.

With respect to the

six-month series of certificates of indebtedness, Series TS2-1931, sub­
scriptions in payment of which 3§ per cent Treasury notes are tendered
will not be given preferred allotment*
The Treasury bonds will be issued both in bearer and registered
form, in denominations of $50, $100, $500, $1,000, $5,000, $10,000, and
$100,000.

The registered bonds will also be issued in the $50,000 de­

nomination.

The certificates of indebtedness of both series will be

issued in bearer form only, in denominations of $500, $1,000, $5,000,
$10,000, and $100,000, the certificates of Series TS2-1931 having one
interest coupon attached, payable September 15, 1931, and the certifi­
cates of Series TH-1932 two interest coupons attached, payable September
15, 1931, and March 15, 1932.
The certificates of indebtedness will be exempt, both as to
principal and interest, from all taxation, except estate and inheritance
taxes.

The Treasury bonds will be exempt, both as to principal and

interest, from all taxation now or hereafter imposed by the United States,

3-

any Stats, 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 Imov/n as surtaxes and
excess-urofits and par-profits taxes, nov or hereafter imposed by the
United States, upon the income or profits of individuals, partnerships,
associations or corporations..

The interest on an amount ox bonds and

certificates (but not including any certificates of indebtedness issued
after June 1?, 1929, because they v/ere on that date made exempt from all
taxation except estate and inheritance taxes) authorized by the Act approved September 24, 1917, as emended, the principal of v/hich does not
exceed in the aggregate $5,000, ov/ned by ¿-my individual, partnership,
association, or corporation, shall be exempt from the taxes provided
for in said clause (b) above.
About $1,100,000,000 of 3^S Treasury notes of Series A-1930-32
and Series 3-1930-32, and about $30,000,000 in interest payments on the
public debt , become due and payable on march 15, 1931,
The texts of the official circulars follow:

THREE AND THREE-EIGHTHS PER CENT
TREASURY BONDS OF 1941-43

The Secretary of the Treasury invites subscriptions, at par
and accrued interest, from the people of the United States, for three
and three-eighths per cent Treasury bonds of 1941-43, of an issue of
gold bonds of the United States authorized by the Act of Congress ap­
proved September 24, 1917, as amended.

The amount of the offering

will be $500,000,000, or thereabouts.

DESCRIPTION OF BONDS
The bonds will be dated March 16, 1931, and will bear interest
from that date at the rate of three and three-eighths per cent per
annum, payable on September 15, 1931, on a semiannual basis, and
thereafter semiannually on March 15 and September 15 in each year
until the principal amount becomes payable.

The bonds will mature

March 15, 1943, but may be redeemed at the option of the United States
on and after March 15, 1941, in whole or in part, at p8-*1 and- accrued
interest, on any interest day or days, on four months1 notice of redemp­
tion given in such manner as the Secretary of the Treasury shall pre­
scribe.

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.

-5-

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, and $100,000.

Provision will be made for the interchange

of bonds of different denominations 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) 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 (but not including any certificates
of indebtedness issued after June 17, 1929) authorized by said Act
approved September 24, 1917, as amended, the principal of which does
not exceed in the aggregate $5,000, owned by any individual, partner­
ship, association, or corporation, shall be exempt from the taxes
provided for in said clause (b) above.

-o-

The "bonds will be acceptable to secure deposits of public
moneys, but do not bear the circulation privilege and are not en­
titled to any privilege of conversion..

The bonds will be subject

to the general regulations of the Treasury Department, now or here­
after issued,, governing United States bonds.
APPLICATION AND ALLOTMENT
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.

«

The right is reserved to reject any subscription, in whole or
in part, and to allot less than the amount of bonds applied for and
to olose the subscriptions at any time without notice; the Secretary
of the Treasury also reserves the right to make allotment in full
upon applications for smaller amounts, 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 allotment will be
t
publicly announced.
PAY! ENT
Payment at par and accrued interest for any bonds allotted
must be made on or before March 16, 1931, or on later allotment.

After

allotment and upon paym.ent Federal Reserve Banks may issue interim

-7*

receipts pending delivery of the definitive bonds.

Any qualified

deioositary frill he permitted to make payment by credit for bohds al­
lotted to it for itself and its customers up to any amount for which
it shall be qualified in excess of existing deposits, when

go

notified

by the Federal Reserve Bank of its district.
The 3p- jo Treasury notes of Series A-1930-32 and B-1930-32,
which were called for redemption on March 15, 1931, by Treasury
Department Circular No. 428, dated September 10, 1930, will be ac­
cepted at oar in payment .for any Treasury bonds of the issue now
offered which shall be subscribed for and allotted, with an adjust­
ment of the interest accrued, if any, on the bonds so paid for.

Sub­

scriptions for which payment is to be tendered in 3\ *jo Treasury notes
of Series A-1930-32 and B-1930-32, will be given preferred allotment
up to the amount of the offering.
GENFML PROVISIONS
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.
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 offering.

TREASURY CERTIFICATES OF INDEBTEDNESS
Series T82-1931 - ij- per cant
Series TM -1932 - 2 per cent

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 March 16, 1931., the certificates of Series TS21931 being payable on September 15, 1931, with interest at the rate of
one and one-half per cent per annum, payable on a semiannual basis, and
the certificates of Series TM-1932 being payable on March 15, 1932,= with
interest at the rate of two 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 TS2-

1931 will have one interest coupon attached, payable September 15, 1931,
and the certificates of Series TM-1932, two interest coupons attached,
payable September 15, 1931, and March 15, 1932.
The certificates of said series shall be e x e m p t b o t h as to
principal and interest, from all taxation (except estate and inheritance
taxes) 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.

-9-

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 payment
of income and profits taxes payable at the maturity of the certifi­
cates.

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 thr Treasury also reserves the

right to make allotment in full upon applications for smaller amounts,,
to make reduced allotments upon, or ta reject, applications for larger
amounts, and to make classified allotments arid 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 16, 1931, or on later allotment.
After allotment and upon payment federal Beserve 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

-

10-

deposits, when so notified by the Federal Reserve Bank of its dis­
trict.

The 3§ 7o Treasury notes of Series A-1930-32 and B-1930-32,

which were called for redemption on March 15, 1931, by Treasury
Department Circular No. 428, dated September 10, 1930, will be
accented at par, in payment for any certificates of the series now
offered which shall be subscribed for and allotted, with*an adjust­
ment 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.

FOR IMMEDIATE RELEASE,
THURSDAY, MARCH 5, 1931,

TREASURY DEPARTMENT

STATEMENT BY SECRETARY MELLON

On Monday afternoon, March 2, 1931, the U. S. Supreme Court rendered
decisions in the cases of Burnet v. Northern Trust Company, Executor of Van
Schaick; Morsman, Administrator, v, Burnet; and McCormick, et al,, Executors,
v. Burnet, holding in effect that where property was conveyed in trust "by a
transferor who reserved to himself for life the income from the property or
the right to designate who should enjoy the income therefrom, the value of
such property at the date of the transferor’s death should not "be included
in computing his Federal estate tax, the transfer of such property not "being
in contemplation of or intended to take effect in possession or enjoyment
at or after his death'* within the meaning of the Federal estate tax laws.
As a result of these decisions, a "bill (H. J. Res. 529) was introduced in
the House of Representatives on March 3, 1931, to amend section 302(c) of
the Revenue Act of 1926, the section of the existing Federal estate tax law
which it was theretofore "believed covered cases such as the three above re­
ferred to, to provide specifically for including in the gross estate of a
decedent, for Federal estate tax purposes, the value of property which may
have "been transferred "by the decedent in trust or otherwise where "the
transferor has retained for his life or any period not ending "before his
death (l) the possession or enjoyment of, or the income from, the property
or (2 ) the right to designate the persons who shall possess or enjoy the
property or the income therefrom."

The "bill was passed unanimously "by

"both Houses of Congress with commendable expedition and signed "by the
President on the same day it was introduced in the House, thus becoming a

-

2

-

part of the existing Federal estate tax law on March 3, 1931.

This legis­

lation will make more effective the operation of the Federal estate tax
law.

Without such legislation it was possible for a person, by making a

conveyance of property for the use after his death of those who he intended
should ultimately have it, to put the property beyond the reach of the
Federal estate tax law and at the same time to reserve to himself the income
or enjoyment of the property just as if no conveyance had been made.

Under

the legislation enacted on March 3, 1931, a conveyance of this kind would be
ineffective as a means of escaping the imposition of the Federal estate tax.

TREASURY DEPARTMENT

FOR RELEASE, MORNING PAPERS,Fridayr.March 6 ,. 1931*.

STATEMENT' BY SECRETARY MELLON*

Secretary Mellon announced that' subscriptions for the March 16th offer­
ing of 3—3/8 per cent Treasury Bohds of 1941-43, l-l/2 per cent six-months
Treasury Certificates of Indebtedness of Series TS2-1931, and 2 per cent
twelve months Treasury Certificates of Indebtedness of Series TM—1932, closed
at the close of business on March 3, 1931*
3-3/8 PER CENT TREASURY BONDS OE 1941-43*
The offering of 3-3/8 per cent Treasury Bonds of 1941-43 was primarily
in the nature of a refunding operation, since holders of $1,109,000,000
Treasury Notes maturing March 15th were given preferred allotment up to the
amount of the new issue.

Note-holders took advantage of the offering in

an amount in excess of the total amount offered*
available for cash subscribers.
$742,000,000*

No bonds were therefore

The exchange subscriptions aggregate over

All of such exchange subscriptions were allotted 80 per cent,

and all cash subscriptions

were rejected.

On this basis, the total amount

of 3-3/8 per cent Treasury Bonds of 1941-43 to be issued will be approximately
$593,000,000.

Total subscriptions aggregate some $2,111,000,000.
j-l/2 PER CENT TREASURY CERTIFICATES
OF SERIES TS2-I831.

Reports received from the Federal Reserve Banks show that for the offer­
ing of l-l/2 per cent Certificates of Series TS2-1931, maturing September 15,
1931, which was for $300,000*000, or thereabouts, total subscriptions aggregat
some $400,000,000*

As previously announced, subscriptions for this series

in payment of which 3—1¡2 per cent Treasury Notes maturing March 15, 1931,
were tendered, were treated as cash subscriptions#
scriptions were made as follOWsi

Allotments on all sub­

-2

-

All subscriptions in amounts not exceeding $10,000 for any one subscriber
were allotted in full;

subscriptions in amounts over $1 0 ,0 0 0 but not exceeding

$1 0 0 ,0 0 0 were allotted 90 per cent, but not less than $1 0 ,0 0 0 on any one sub­
scription;

subscriptions in amounts over $1 0 0 ,0 0 0 but not exceeding

$1,000,000 were allotted 80 per cent, but not less than $90,000 on any one
subscription; and subscriptions in amounts over $1,000,000 were allotted 70
per cent, but not less than $800,000 on any one subscription.

2 PER CENT TREASURY CERTIFICATES
........O F SERIES TM-1932
Reports received from the Eederal Reserve Banks show that for the offering
of 2 per cent Certificates of Indebtedness of Series TM—1932, maturing March
15, 1932, which was for $600,000,000, or thereabouts, total subscriptions aggre­
gate some $1,223,000,000*

Of these subscriptions about $72,400,000 represent

subscriptions for which 3—l/2 per cent Treasury Notes of Series A—1930—32 and
Series B-1930-32, maturing March 15, 1931, were tendered in payment, all of
which were allotted in full*
Allotments on the cash subscriptions for the 2 per cent certificates of
Series TM-1932, were made as follows:
$1,000 were allotted in full.

Subscriptions in amounts not exceeding

Subscriptions in amounts over $1,000 but not

exceeding $50,000 were allotted 80 per cent, but not less than $1 ,0 0 0 on any
one subscription;

subscriptions in amounts over $50,000 but not exceeding

$100,000 were allotted 70 per cent, but not less than $40,000 on any one sub­
scription;

subscriptions in amounts over $100,000 but not exceeding $500,000

were allotted 60 per cent, but not less than $70,000 on any one subscription;
subscriptions in amounts over $500,000 but not exceeding $1,000,000 were al­
lotted 50 per cent, but not less than $300,000 on any one subscription;

and

subscriptions in amounts over $1,000,000 were allotted 35 per cent, but not
less than $500,000 bn any one subscription.

Further details as to subscriptions and allotments will be announced when
final reports are received from the Federal Reserve Banks.

>7

TREASURY DEPARTMENT

FOR IMMEDIATE RELEASE,
TUESDAY, MARCH 10, 1931.

Gloucester, Mass**
March 9, 1931,

Wm. T. Aldrich, 30 Newberry St,, and Wm. C. Chase, associate,
Boston, Mass., have been selected for architectural services in
connection with the post office, etc,, at Gloucester, Mass.

POR IMMEDIATE RELEASE,
Wednesday, March 11, 1931«

TREASURY DEPARTMENT

Secretary Mellon today announced that the total amount of subscriptions
received for 3—3/8 per cent Treasury Bonds of 1941—43, dated March 16, 1931,
was $2,111,871,300„

Of this amount, $742,723,100 represented exchange sub­

scriptions in payment for which 3—1/2 per cent Treasury Notes, maturing March
15, 1931, were tendered.
80 per cent, or $594,193,650.

Such exchange subscriptions were allotted
All other subscriptions were rejected.

The total amount of subscriptions received for the two issues of
Treasury Certificates of Indebtedness, Series TS2—1931, 1—l/2 per cent, dated
March 16, 1931, maturing September 15, 1931, and Series TM-1932, 2 per cent*
dated March 16, 1931, maturing March 15, 1932, was $1,623,733,000.

The total

amount of subscriptions allotted for Scries TS2—1931 was $300,176,000, w±iich
included both cash and exchange subscriptions, the latter being treated as
cash subscriptions.

The total amount of subscriptions allotted for Series

TM-1932 was $623,891,500, of which $72,482,500 represented allotments on ex­
change subscriptions for which 3—1/2 per cent Treasury Notes maturing March
15, 1931, were tendered in payment.
lotted in full.

Such exchange subscriptions were al­

Allotments of all subscriptions for Series TS2-1931 and

allotments of cash subscriptions for Series TM-1932 were made on a gruduated
scale.
Subscriptions and allotments were divided among the several Federal
Reserve Districts and the Treasury as follows?

. ¿1 .
~ 2 -

3-3/8 PER CENT TREASURY BONDS OF 1941-43
Federal Reserve
District:

Total Subscrip­
tions Received:

Total Cash
Subscriptions
Received:

Boston
New York
Philadelphia
Cleveland
Ei chmond
Atlanta
Chicago
St. Louis
Minneapolis
Kansas City
Dallas
San Francisco
Treasury

$

$

Total

110,126,750
965,613,850
165,014,000
180,753,900
93,733,550
62,071,300
198,350,750
40,928,700
31,861,850
48,671,750
60,862,750
145,006,450
8,875,700

$2,111,871,300

Total Exchange
Subscriptions
Received:
$

104,416,800
440,635,150
139,638,950
167,338,000
79,983,900
56,321,850
123,357,150
36,253,750
23,371,050
30,917,850
49,814,250
116,723,100
376,400
1,369,148,200

5,709,950
524,978,700
25,375,050
13,415,900
13,749,650
5,749,450
74,993,600
4,674,950
8,490,800
17,753,900
11,048,500
28,283,350
8,499,300

$ 4,568,200
419,983,400
20,300,000
10,734,000
10,999,900
4,599,650
60,004,150
3,740,900
6,793,050
14,204,400
8,839,450
22,626,950
6,799,600

742,723,100

594,193,650

1-1/2 PER CENT CERTIFICATES OF INDEBTEDNESS
OF SERIES TS2-1931
Federal Reserve
District:

Total Sub scriptions Received:

Total Subscriptions Allotted •

Boston
New York
Philadelphia
Cleveland
Richmond
Atlanta
Chicago
St, Louis
Minneapolis
Kansas City
Dallas
San Francisco
Tr easury

$ 13,900,000
185,029,500
26,275,000
7,195,000
9,821,000
15,241,000
71,066,000
14,710,000
769,500
2,457,500
14,063,500
40,119,500

$

Total

9

11,996,500
132,472,500
19,930,000
5,605,000
8,445,500
13,475,500
54,021,000
11,005,000
644,500
2,042,000
12,041,500
28,496,000

1 ,0 0 0

1 ,0 0 0

$400,648,500

$ 300,176,000

Total Exchange
Subscriptions
Allotted:

2 PER CENT CERTIFICATES OF INDEBTEDNESS
OF SERIES TM-1932

Federal Reserve
District:

Total Subscrip­
tions Received:

Total Exchange
Subscriptions
Allotted:

Total Cash
Subscriptions
Allotted:

Total Subscr
tions Allots

Boston
New York
Philadelphia
Cleveland
Richmond
Atlanta
Chicago
St. Louis
Minneapolis
Kansas City
Dallas
San Francisco
Treasury

$ 128,815,000
590,377,000
106,406,000
49,902,000
59,120,500
53,139,000
99,906,500
17,881,000
2,725,500
11,016,500
27,491,500
76,189,000
25,000

$ ...........
62,644,000
46,000
•

$ 68,515,500
223,737,000
52,704,000
25,124,000
34,257,500
34,451,000
48,953,000
9,354,500
1,523,500
5,011,500
17,163,500
30,594,000

$ 68,515,500
286,381,000
52,750,000
25,124,000
34,413,500
34,451,000
54,112,500
11,379,500
1,573,500
7,273,000
17,213,500
30,684,500

2 0 ,0 0 0

2 0 ,0 0 0

551,409,000

623,891,500

Total

$1,223,084,500

156,000
5,159,500
2,025,000
50,000
2,261,500
50,000
90,500

72,482,500

POR RELEASE, MORNING PAPERS,
Wednesday, March 18, 1931.

TREASURY DEPARTMENT

In response to inquiries as to the immediate cash requirements of the
Veterans Bureau for adjusted service certificate loans, Secretary of the
Treasury Mellon made public the following letter received from General Hines:

"VETERANS ADMINISTRATION
Washington
March 17, 1931.

The Honorable
The Secretary of the Treasury
Washington, D. C.
Sir:
In compliance with your request I have the honor to submit
the foll®wing information and data in regard to the effect of the
recent amendment to The World War Adjusted Compensation Act.
Prom the date of the enactment increasing the loan values on
adjusted service certificates to fifty per cent of the face value
there had been received by the Bureau, up to March 14, 1931,
1,372,006 applications for the additional benefits granted; of
this number 282,874 had been disposed of by the action of granting
the loan and dispatching the check.

The total value of the checks

so issued amounted to $104,035,366.24, the checks averaging $367,78
a piece.

On this basis I estimate that the Administration will

require from your Department, for the purpose of making these addi­
tional loans, approximately $90,000,000 during the week ending March
21st, and $100,000,000 during each of the ensuing three weeks.

The

-

2

-

amount which will he required following this period is proble­
matical, as it is manifestly quite impossible to make an esti­
mate of any degree of accuracy as to the number of applications
which will be received in the future; however, I believe that my
original prediction that seventy-five per cent of the veterans
would avail themselves of the privileges of the amendatory legis­
lation will prove to be reasonably close to the actual experience.
On such a basis the Treasury will be called upon to finance addi­
tional loans under the amendment to an amount approximating one
billion dollars.
Respectfully,

J R A M T. HINES

Administrator.H
It appears from this letter that for the purpose of making the loans
applied for up to March 14th, the Treasury Department will be called upon
to furnish approximately $500,000,000 by April 11th, including the
$1 0 0 ,0 0 0 ,0 0 0 , more or less, loaned since the new law went into effect.

TREASURY DEPARTMENT

POR IMMEDIATE RELEASE
Wednesday, March 18, 1931,

The Secretary of the Treasury announces the selection of
Wm* E 4 Lehman and George Oakley Totten^ Jr., of Newark, N.J.,
as associate architects for the Post Office and Courthouse
Building, Newark, N*J.

FOR IMMEDIATE RELEASE,
Wednesday, March 18, 1931.

TREASURY DEPARTMENT

The Secretary of the Treasury announces the selection of
Seth J. Temple, Union Bank Building, Davenport, Iowa, for
architectural services in connection with the Post Office and
Courthouse Building, Davenport, Iowa.

*

TREASURY DEPARTMENT

FOR RELEASE, MORNING PAPERS,
Monday, March 23, 1931.

The Treasury to-day called attention to the fact that of
$1,109,000,000 3i per cent Treasury notes, Series A and B, 1930-32,
called for redemption on March 15, 1931, some $70,000,000 have not
yet been presented for redemption.

The holders of these notes

should understand that all interest on them ceased on March 15, 1931,
pursuant to the call for redemption,

In their own interest they are

urged* therefore, to present them for redemption.

TREASURY DEPARTME2TT

v

FOR RELEASE, MORNING- PAPERS,
Thursday, March 26, 1931.

STATEMENT BY SECRETARY MELLON

The Secretary of the Treasury gives notice that tenders are
invited for Treasury hills to the amount of $100,000,000, or thereabouts
They will be 90-day bills; and will be sold on a discount basis to the
highest bidders.

Tenders will be received at the Federal Reserve Banks

or the branches thereof, up to two o ’clock P. M. , Eastern Standard time,
on March 30, 1931.

Tenders will not be received at the Treasury Depart

ment, Washington.
The Treasury bills will be issued in two series, $50,000,000,
or thereabouts, to be dated April 2, 1931, and maturing on July 1, 1931,
and $50,000,000, or thereabouts, to be dated April 3, 1931, and maturing
July 2, 1931.

Bidders will not be required or permitted to bid for a

particular series, but the Treasury will apportion each accepted bid
equally between the two series in so far as the minimum denomination
of $1,000 will permit. . At maturity the face amount of the bills will
be payable without interest.

The bills will be issued in bearer form

only, and in amounts or denominations of $ 1 ,0 0 0 , $ 1 0 ,0 0 0 , and $1 0 0 ,0 0 0
(maturity value).
It is urged that tenders be made on the printed forms and
forwarded in the special envelopes which will be supplied by the
Federal Reserve Banks or branches upon application therefor.
No tender for an amount less than $1,000 will be considered.
Each tender must be in multiples of $1,000.

The price offered must be

-

2

-

expressed on the basis of 1 0 0 , with not mere than three decimal places,
e. g. , 99.125.

Fractions mast not be used.

Tenders will be accepted without cash deposit from incorporated
banks and trust companies and from responsible and recognized dealers
in investment securities.

Tenders from others must be accompanied by

a deposit of 10 per cent of the face amount of Treasury bills applied
for, unless the tenders are accompanied by an express guaranty of pay­
ment by an incorporated bank or trust company.
Immediately after the closing hour for receipt rf tenders
on March 30, 1931, all tenders received at the Federal Reserve Banks
or branches thereof up to the closing hour will be opened and public
announcement of the acceptable prices will follow as soon as possible
thereafter,' probably on the following morning.

The Secretary of the

Treasury expressly reserves the right to reject any or all tenders or
parts of tenders, and to allot less than the amount applied for, and
his action in any such respect shall be final.

Those submitting

tenders will be advised of the acceptance or rejection thereof.

With

respect to bidders whose tenders have been accepted, such advice will
state the amount of each series allotted.

Payment at the. price offered

for Treasury bills allotted must be made at the Federal Reserve Banks
in cash or other immediately available funds on April 2, 1931, for the
bills allotted bearing that date of issue, and on April 3, 1931, for
bills allotted bearing the latter date of issue.

-3-

Th.6 Treasury bills will be exempt, as to principal and
interest, and aiiy gain from the sale or other disposition thereof
will also be exempt, from all taxation, except estate and inheritance
taxes.

No loss from the sale or other disposition of the Treasury

bills shall be allowed as a deduction, or otherwise recognized, for
the purposes of any tax now or hereafter imposed by the United States
or any of its possessions.
Treasury Department Circular No. 418, as amended, dated June
25, 1930, and this notice as issued by the Secretary of the Treasury,
prescribe the terms of the Treasury bills and govern the conditions of
their issue.

Copies of the circular may be obtained from any Federal

Reserve Bank or branch thereof.

FOR RELEASE, MORNING PAPERS,
Tuesday, March 31, 1931.

TREASURY DEPARTMENT

STATEMENT BY SECRETARY MELLON.

Secretary of the Treasury Mellon announced to-day that the
tenders for $100,000,000, or thereabouts, of 90-day Treasury Bills
which were offered on March 26, 1931, were opened at the Federal Re­
serve Banks on March 30, 1931.

The Treasury’s earlier announcement

provided that the bills would be issued in two series, $50,000,000,
or thereabouts, dated April 2, 1931 and maturing July 1, 1931, and
$50,000,000, or thereabouts, dated April 3, 1931 and maturing July
2, 1931, the accepted bids to be apportioned by the Treasury equally
between the two series, in so far as the minimum denomination of
$1 ,0 0 0 will permit.
The total amount applied for was $343,857,000.

The highest

bid made was 99.695, equivalent to an interest rate of 1,22 per cent
on an annual basis#

The lowest bid accepted was 99,621, equivalent

to an interest rate of about 1.52 per cent on an annual basis.

The

total amount of bids accepted was $100,855,000» which has been equally
apportioned between the two series.

The average price of Treasury

Bills to be issued is about 99*634.

The average rate on a bank dis­

count basis is about 1*46 per cent.

POR RELEASE, MORNINO PAPERS,
Wednesday, April 8 , 1931.

TREASURY DEPARTMENT

STATEMENT BY SECRETARY MELLON

The Treasury is today offering for subscription, at par
and accrued interest, through the Federal Reserve Banks, an issue
of eight-month 1-7/8 per cent Treasury certificates of indebted­
ness of Series TD2-1931, dated and bearing interest from April 15,
1931, and maturing December 15, 1931.

The amount of the offering

is $275,000,000, or thereabouts.
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

will have two interest coupons attached payable June 15, 1931,
and December 15, 1931.
The text of the official circular follows:

The Secretary of the Treasury, under the authority of
the Act approved September 24, 1917, as amended, offers for sub­
scription, at par and accrued interest, through the Federal
Reserve Banks, Treasury certificates of indebtedness of Series
TD2-1931, dated and bearing interest from April 15, 1931, payable
December Id , 1931, with interest at the rate of one and seveneighths 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

will have two interest coupons attached, payable June 15, 1931,
and Decer:ber 15, 1931.
The certificates of said series shall be exempt, both as
to principal and interest, from all taxtion (except estate and
inheritance taxes) 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.
The certificates 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 certificates.

The certificates of this series will be

acceptable to secure deposits of public moneys, but will not bear
the circulation privilege.

3-

The right is reserved to reject any subscription and to
allot less than the amount of certificates applied nor and to
close the subscriptions at any time without notice.

The Secretary

of the Treasury also reserves the right to make allotment in full
upon applications tor smaller amounts, to make reduced allotments
upon, or to reject, applications for larger amounts, and to make
classified allotments and allotments uuon a graduated scale; and
his action in these respects will be final.

Allotment notices

will be sent out promptly u-;~on allotment, and the basis of the
allotment will be publicly announced.
Payment at par and accrued interest for eertiiicates al­
lotted must be made on or before April 15, 1931, 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, ?'hen so notified by the Federal Reserve
Bank of its district.
As fiscal agents of the United States, Federal Reserve Banks
are authorized and requested to receive subscrii. tions 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 respec­
tive districts.

EOR RELEASE, MORNING PAPERS,;
Saturday, April 11, 1931.

TREASURY DEPARTMENT

Secretary Mellon today announced that according to the final
reports received from the twelve Federal Reserve Banks the total sub­
scriptions for the offering of 1-7/8 per cent Treasury Certificates of
Indebtedness, Series TD2—1931, aggregate $908,688,000.
have been made as follows:

Allotments

All subscriptions in amounts not exceeding

$1,000 for any one subscriber have been allotted in full*.

Subscriptions

in amounts over $1 ,0 0 0 but not exceeding $1 0 ,0 0 0 for any one subscriber
were allotted 70 per cent but not less than $1 ,0 0 0 for any one subscription
subscriptions in amounts over $1 0 ,0 0 0 but not exceeding $10 0 ,0 0 0 for any
one subscriber were allotted 60 per cent but not less than $7 ,0 0 0 on any
one subscription; subscriptions in amounts over $10 0 ,0 0 0 but not exceeding
$1,000,000 for any one subscriber were allotted 40 per cent but not less
than $60,000 on any one subscription; and subscriptions in amounts over
$1,000,000 were allotted 20 per cent bat not less than $400,000 on 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..

TREASURY DEPARTMENT
*

FOR IMMEDIATE RELEASE,
Saturday, April 11, 1931*

Under date of April 8 , 1931, the Secretary of the Treasury announced the
selection of the United Engineers & Constructors, Inc., 112 North Broad Stree *
Philadelphia, Pa., for the design, working drawings, specifications, and super­
vision of the proposed Central Heating Plant, Washington, D. C.
The following additional information is furnished:
This new central steam heating plant will cost approximately $5,000,000#
It has "been under consideration for a period of years and the decision to
build it at this time has been reached because of the requirements for supp ying heat and power to the new government buildings recently completed, now
under construction, or contemplated in the district known as the Triangle,
bounded by Pennsylvania Avenue, Maryland Avenue and 15th Street.
The plant is planned ultimately t<^ furnish steam for twenty-six buildings,
which in an average year will consume approximately 1,500,000,000 pounds o
steam.
The present installation will be about twenty-five per cent less, and
the future increases in demand will be taken care of by extending the p an
and the mains to supply the additional load.
Steam will be distributed to the buildings through pipes varying in
diameter from 3 inches to 18 inches and having an aggregate length of approx­
imately five miles. These pipes will occupy underground pipe-ways in the form
of tunnels and conduits.
In connection with the heating plant, an electrical sub-station will be
built which will distribute power purchased from the Potomac Electric Company
The buildings which will be supplied with steam and electric light and
power in the initial installation will consume approximately 34,000,000
kilowatt hours of electric current in an arerage year with a maximum demand
on the electrical distribution system of approximately 18,000 kilowatts,
The
future extensions will increase these demands by about thirty-five per cen .
The design of the plant will embody the most modern features in the com­
bustion of fuels and production of steam together with electrical-design to
provide service of maximum reliability at minimum investment cost.
Special attention will be given to the architectural features of the plant
which will be approved by the Fine Arts Commission of Washington.
The site selected will permit of future extension of the plant as re­
quired and will provide for the supply of fuel by railroad connection.
United Engineers & Constructors Inc., the engineering firm retained by
the government to prepare the designs for the plant, is headed by Dwight P.
Robinson and has had a broad experience in general engineering and construction
practice.
This firm and their subsidiary companies have completed work in
the United States and abroad costing in excess of one billion dollars.
They
are particularly well qualified in the field of power plant construction be­
cause of their extensive experience in the public utility field in large power
station construction.
They have designed and built some of the largest
central heating plants in the country* having been associated with work of
this nature in New York, Philadelphia and Pittsburgh.

POR IMMEDIATE RELEASE,
MONDAY, April 13, 1931

TREASURY DEPARTMENT

Secretary Mellon to-day announced that the total amount
of subscriptions received for the issue of 1—7/8 per cent Treasury
Certificates of Indebtedness, Series TD2-1931, dated April 15, 1931,
maturing December 15, 1931, aggregated $908,688,000, and that the
total amount of subscriptions allotted was $275,118,000*
The subscriptions and allotments were divided among the
several Federal Reserve Districts and the Treasury as follows:

Federal Reserve
District

Total Subscriptions Received:

Total Sub scriptions Allotted:

Boston
New York
Philadelphia
Cleveland
Richmond
Atlanta
Chicago
St. Louis
Minneapolis
Kansas City
Dallas
San Francisco
Treasury

$

$

To 1/3*1 .•

•

58,618,000
374,288,500
101,093,000
53,912,500
51,587,000
45,383,000
76,347,500
19,645,000
6 ,2 2 1 ,0 0 0
19,064,500
30,028,500
71,799,500
700,000

$ 908,688,000

24,060,500
83,987,000
28,900,000
16,142,000
27,744,000
24,127,500
25,516,000
6,830,000
3,127,000
5,640,500
12,057,500
16,706,000
280 s000

$ 275,118,000

FOR RELEASE, MORNING PAPERS,
TUESDAY, April 21, 1931.

TREASURY DEPARTMENT

STATEMENT BY SECRETARY MELLON

The Secretary of the Treasury gives notice that tenders are
invited for Treasury "bills to the amount of $50,000,000, or tnereat)outs.
They will "be 91-day "bills; and will "be sold on a discount Basis to the
highest "bidders.

Tenders will be received at the Federal Reserve

Banks, or the branches thereof, up to two o ’clock P.M., Eastern Standard
time, on April 24, 1931.

Tenders will not be received at the Treasury

Department, Washington.
The Treasury bills will be dated April 27, 1931, and will
mature on July 27, 1931, and on the maturity date the face amount
4

will be payable without interest.

They will be issued in bearer form

only, and in amounts or denominations of $ 1 ,0 0 0 , $1 0 ,0 0 0 , and $ 10 0 ,0 0 0
(maturity value).
It is urged that tenders be made on the printed forms and
forwarded in the special envelopes which will be supplied by the
Federal Reserve Banks or branches upon application therefor.
No tender for an amount less than $1,000 will be considered.
Each tender must be in multiples of $1,000.

The price offered must be

expressed on the basis of 1 0 0 , with not more tnan tnree decimal places,
e. g., 99.125.

Fractions must not be used.

Tenders will be accepted without cash deposit from incorporated
banks and trust companies and from responsible and recognized dealers
in investment securities.

Tenders from others must be accompanied by

-

2-

a deposit of 10 per cent of the face amount of Treasury bills applied
for, unless the tenders are accompanied by an- express guaranty of pay­
ment by an incorporated bank or trust company*
Immediately after the closing hour for receipt of tenders on
April 24, 1931, all tenders received at the Federal Reserve Banks or
branches thereof up to the closing hour will be opened and public an­
nouncement of the acceptable prices will follow as soon as possible
thereafter, probably on the following morning*

The Secretary of the

Treasury expressly reserves the right to reject any or all tenders
or parts of tenders, and to allot less than the amount applied for,
and his action in any such respect shall be final*

Those submitting

tenders will be advised of the acceptance or rejection thereof*

Payment

at the price Offered for Treasury bills allotted must be made at the
Federal Reserve Banks in cash or other immediately available funds cn
April 27 , 1931*.
The Treasury bills will be exempt, as to principal and interest,
and any gain from the sale or other disposition thereof will also be
exempt, from all taxation, except estate and inheritance taxes*

No loss

from the sale or other disposition of the Treasury bills shall be allowed,
as a deduction, or otherwise recognized, for the purposes of any tax now
or hereafter imposed by the United States or any of its possessions.
Treasury Department Circular No.418, as amended, dated June 25,
1930, and this notice as issued by the Secretary of the Treasury, pre­
scribe the terms of the Treasury bills and govern the conditions of their
issue.

Copies of the circular may be obtained from any Federal Reserve

Bank or bfanch thereof.

POR RELEASE, MORNING PAPERS,
Saturday, April 25, 1931.

TREASURY DEPARTMENT

STATEMENT BY SECRETARY OP THE TREASURY MELLON

Secretary of the Treasury Mellon announced to-day that the
tenders for $50,000,000, or thereabouts, of 91-day Treasury Bills
dated April 27, 1931, and maturing July 27* 1931, which were
offered on April 21, 1931, were opened at the Pederal Reserve
Banks on April 24, 1931.
The total amount applied for was $343,739,000.

Except for

one bid for $1 0 ,0 0 0 at the rate of about 1 per cent, the highest
bid made was 99.674, equivalent to an interest rate of about
1.29 per cent on an annual basis.

The lowest bid accepted was

99,653, equivalent to an interest rate of about 1-3/8 per cent on
an annual basis.

The total amount of bids accepted was $53,510,000

The average price of Treasury Bills to be issued is 99.664.
average rate on a bank discount basis is about 1.33 per cent.

The

TREASURY DEPARTJCEET

1
I

%

FOB RELEASE, MOBNING PAPERS,
Tuesday, April 28, 1931.

STATELIEST 3Y SECRETAEY MELLON

The Secretary of the Treasury gives notice that tenders are
invited for Treasury hills to the amount of $60,000,000^ or thereabouts.
They will he 90-day hills; and will he sold on a discount basis to the
highest bidders.

Tenders will he received at the Federal Reserve

Banks, or the branches thereof, up to two o’clock P. M., Eastern
Standard time, on May 1, 1931.

Tenders will not he received at the

Treasury Department, Washington.
The Treasury hills will he dated May 5, 1931, and will mature
on August 3, 1931, end on the maturity date the face amount will he
payable without, interest.

They will he issued in hearer form only,

and in amounts or denominations of $ 1 ,0 0 0 , $1 0 ,0 0 0 , and $10 0 ,0 0 0
(maturity value).
It is urged that tenders he made on the printed forms and for­
warded in the special envelopes which will he supplied by the Federal
Reserve Banks or branches upon application therefor.
No tender for an amount less than $1,000 will he considered.
Each tender must he in multiples of $1,000.

The price offered must

he expressed on the basis of 1 0 0 , with not more than three decimal
places, e. g., 99.125.

Fractions must not he used.

Tenders will he accepted without cash deposit from incorporated
hanks and trust companies and from responsible and recognized dealers
in investment securities.

Tenders from others must he accompanied by

/ ¿*2.

- 2-

a deposit of 10 per cent of the face amount of Treasury hills applied
for, unless the tenders are accompanied hy an express guaranty of pay­
ment hy an incorporated hank or trust company.
Immediately after the Closing hour for receipt of tenders on
May 1, 1931, all tenders received at the Federal Reserve Banks or
branches thereof up to the closing hour will he opened and public an­
nouncement of the acceptable prices will follow as soon as possible
thereafter, probably on the following morning.

The Secretary of the

Treasury expressly reserves the right to reject any or all tenders
or parts of tenders, and to allot less than the amount applied for,
and his action in any such respect shall be final.

Those submitting

tenders will be advised of the acceptance or rejection thereof.

Payment

at the price offered for Treasury bills allotted must be made at the
Federal Reserve Banks in cash or other immediately available funds on
May 5, 1931.
The Treasury bills will be exempt, as to principal and interest,
and any gain from the sale or other disposition thereof will also be
exempt, from all taxation, except estate and inheritance taxes.

Uo loss

from the sale or other disposition of the Treasury bills shall be allowed
as a deduction, or otherwise recognized, for the purposes of any tax now
or hereafter imposed by the United States or any of its possessions.
Treasury Department Circular ITo. 418, as amended, dated June 25,
1930, and this notice as issued by the Secretary of the Treasury, pre­
scribe the terms of the Treasury bills and govern the conditions of their
issue.

Copies of the circular may be obtained from any Federal Reserve

Bank or branch thereof.

TREASURY DEPARTMENT

FOR RELEASE, EVENING PAPERS
WEDNESDAY, APRIL 29, 1 9 3 1

“THE TREASURY TO-DAYH

An
Address by
HONORABLE ARTHUR A. BALLANTINE
Assistant Secretary of the Treasury,
delivered
before the
Annual Meeting
of the
Chamber of Commerce of the United States
in
Atlantic City, N.J.

April 29, I9 3 I.

Note:
For full text of speech see Subject File: Secretary^ Speeches.

TREASURY DEPARTMENT

FOR RELEASE, MORNING PAPERS
SATURDAY, MAY 2, 1931,

STATEMENT BY ACTING SECRETARY MILLS

Acting Secretary of the Treasury Mills announced to-day that
the tenders for $60,000,000, or thereabouts, of 90-day Treasury
Bills dated May 5, 1931, and maturing August 3, 1931, which were
offered on April 28, 1931, were opened at the Federal Reserve Banks
on May 1, 1931,
The total amount applied for was $305,855,000»

The highest

bid made was 99.688, equivalent to an interest rate of about 1,25
per cent on an annual basis.

The lowest bid accepted was 99.671,

equivalent to an interest rate of about 1.32 per cent on an annual
basis.

In order to avoid exceeding the total required, only 25

per cent of the amount bid for at the latter price was accepted.
The total amount of bids accepted was $60,100,000.
price of Treasury Bills to be issued is about 99.676.

The average
The

average rate on a bank discount basis is about 1.29 per cent.

TREASURY DEPARTMENT

EOR RELEASE, EVENING- PAPERS
May 5, 1931, after delivery
has begun.

Remarks of
Hon. A. W. Mellon
Secretary of the Treasury
at a luncheon given by
the American Bankers Association
to Bankers from Foreign Countries
attending the Sixth Congress of the
International Chamber of Commerce
Willard Hotel
Washington
May 5, 1931

I am glad to be here today and to have a part in welcoming the
distinguished visitors who have come from other countries to be our
guests on this occasion*

I feel that you can be especially helpful

at this time when America and all the world are seeking a solution for the
problems which confront us.

You represent a cross section of the

world*s business and financial interests and are particularly well equipped,
by training and outlook, to make a study of the present situation*
As one who looks at the Situation from the government angle but who
also shares with you the business point of view, may I make one suggestion
and that is, do not lose sight of the fact that solutions which may seem to
you ideal can not always be put into effect for reasons which I am sure are
apparent to you.

One is that in each country governments must deal

primarily with the facts of their own case and are free to act only within
the bounds imposed by national traditions» economic organization, and the
limited understanding that exists in every country of other peoples* problems
and of the extent to which all of us are affected by conditions outside of
our own borders.
The troubles which all of us face at this time can not be cured by
any quick and easy method, or at some one else*s expense, and it is well to
face that fact.

The world is passing through one of the most extensive

depressions it has ever known.

In practically all countries we have had

~ 2 ~

falling prices, unemployment, decreased consumption, difficult problems
of government finance and, in some countries, political revolutions*
One must not underestimate the seriousness of the present situation.
And yet, we must not lose onr sense of perspective, for we know that the .
present crisis is not unprecedented hut that, on the contrary, the
world is going through one of those transition stages which come from
time to time and entail drastic and far-reaching economic readjustments*
Even while we meet here today, those readjustments are taking place the
world over and will continue until a balance has again been restored*
The present crisis is more severe because it follows a war in
which the whole world was involved.

The sweeping readjustments,

which were inevitable in a society that had witnessed revolutionary
changes in technology, would have come gradually and less painfully under
normal peace-time processes.

Unfortunately, they were first delayed by

the war and then precipitated suddenly on a world already thrown out of
balance by the vast and violent dislocations which the war left behind*
The economic depression that followed is, in part, the price we pay for
war and must be reckoned apparently as a seemingly unavoidable stage in
the sequence of events.
Recent economic history seems to confirm this.

Those of us

who lived through the Crisis of 1873 remember how both Europe and America
were affected by conditions which followed the too rapid expansion and
industrial development after the Civil War in this country and the Franco—
Prussian War in Europe.

I have lived through several crises since that

time and the conclusion I have come to is that they have been caused, either

- 3directly or remotely, "by serious dislocations which were due, as a rule,
to wars and their aftermaths.
Wars invariably cause waste.

They also cause monetary

inflation and rise in prices, followed hy a period of disorderly industrial
activity and too rapid and ill-balanced expansion in all directions, resulting
eventually in the production of goods and services out of line with the
world*s contemporary capacity to absorb.
must take place.

Eventually a readjustment

Prices must be revised, and costs of production and

output must be brought down to a point where the demand will again be
stimulated and goods will move into consumption.

In short, a balanced

condition must be restored; and this may be done without a general reduction
in wages, provided the period of readjustment is not too long drawn out and
on condition also that we reduce costs by yet greater efficiency in labor,
in management, and in distribution.
In this country there has been a concerted and determined effort
on the part of both government and business not only to prevent any
reduction in wages but to keep the maximum number of men employed and thereby
to increase consumption.

Every man that can be kept at work or put back

into employment adds to the nation*s buying power and so stimulates further
production.

Progress can be achieved only by a great onward movement

made up of a vast number of individual efforts and not by any single action
that governments or groups of men can take,
I do not believe in any quick or spectacular remedies for the ills
from which the world is suffering, nor do I share the belief that there is
anything fundamentally wrong with the social system under which we have
achieved in this and other industrialized countries a degree of economic
well-being unprecedented in the history of the world.

Capitalism or

- 4 -

whatever name may he applied to the system which has heen evolved in adapting
individual initiative to the machine age, has defects, of course, and may he,
as has heen suggested, still in its infancy.

But there is no disputing

the fact that it has produced an abundance of food and clothing and all the
necessities of life, so that our problem is not one involving basic inability
to produce the goods needed to satisfy human wants#

That, in itself, is

a fact of the greatest importance, for there was a time when crop failures,
floods and droughts brought on a serious shortage and even famines in Europe
and America, just as they do now almost periodically in China, India, and
other areas in which production and distribution are not so well organized#
Among Western nations we know that we can cope with such calamities, for
industry and human ingenuity have combined to provide ever more liberally the
goods and services which we need#
We still have much to learn in the maintenance of production on an
even keel and the achievement of a process of orderly and broad distribution
of products and services#

These defects in the present system we shall

overcome by degrees, as we find some way to achieve greater equilibrium
between production and consumption and a better distribution of labor, so
that we shall not always have the painful spectacle of men willing to work
but unable to find a market for the only commodity which they can exchange
for the food and clothing which they need and which the world can produce in
such abundance#

These are largely problems of distribution and

consumption, and I am confident they will be solved in time, as were those
earlier problems of industrialism when man first began to be displaced by the
machine#
Here in America our problems seem to us more acute perhaps than they
really are because they exist as the result of a vast, and at the same time
fairly recenti industrial development which has made necessary a change in

methods and outlook to which we have not yet had time to become accustomed.
We shall succeed in time in working out our economic salvation in accordance
with the special needs of our own people and the social and industrial system
which has been built up.

But it will be done in the future, as in the

past, by individual initiative and not by surrendering the management of
business and industry to the government or to any board or group of men
temporarily invested with over-head authority.

Conditions today are

neither so critical nor so unprecedented as to justify a lack of faith in our
capacity to deal with them in our accustomed way.
Since the war America has enjoyed a decade of industrial and economic
progress unequalled in the nation*s history.

Our present experience

indicates that the machine can not be made to function at full speed all the
time.

So closely knit is the modern industrial world that, when a lack

of balance develops, there is a general slowing up until a readjustment has
been effected and the balance restored.

Sopie day perhaps we shall have

mastered our economic machine so as to have it under better control.

But

until that day comes it is well to remember that these temporary set-backs do
not obliterate the progress made during the forward movements and that, when
the upward trend is resumed again, we shall start, not from the old level,
but from the new.
It would be difficult to believe that the progress made in this
country in the last ten years will not be consolidated and carried forward.
All the basic factors that made it possible are still here.

Many of

these same factors exist also in Europe; and, while the world lias passed
through a difficult period in the last eighteen months, we must not forget
that the difficulties encountered were less formidable than those confronted
and surmounted in the early post-war period.

Then the problems left by

the war had not "been settled; hanking and currency systems were in a
chaotic state; debts and reparations were a source of great uncertainty,
paralyzing action in every direction.

Since that time Europe has shown

recuperative powers that are amazing.

There has been a steady march

of reconstruction, o.f sound currency systems established, with close
cooperation between central banks and with the Eederal Reserve System in this
country.

Under the Young Plan and the coordinating influence of the

Bank of International Settlements, confidence has been established in the
willingness and the ability of Europe to honor its obligations, whether these
be debts arising out of the war or out of commercial undertakings started in
the post-war period.
There is much that still remains to be done.

The trade of

the world must settle into new channels and will increase in volume, notwith­
standing tariffs and other barriers.

We have all come to a realization

of the fact that, if world trade is to be built up, there must be give and take
among nations.

But it must be remembered that the all-important factor

is purchasing power; and purchasing power, in so far as America is concerned,
is dependent to a great extent on the standard of living which obtains in this
country.

That standard of living must be maintained at all costs; and

certainly the present is no time to undertake drastic and doubtful experiments
which may even conceivably result in breaking down the standard of living to
which we have become accustomed.

What we must strive for is to improve

the standard both here and in other countries as conditions warrant.

In

fact, the ultimate solution of the world*s difficulties would seem to lie in
the possibility of building up a higher standard, especially in the great and
as yet undeveloped consumer areas, and in creating there and throughout the

world a steadily increasing demand for the goods and services which Europe
and America are prepared to supply.
No one should he discouraged about the ultimate outcome.

We are,

as I said at the beginning, passing through a transition period, and such
periods are always difficult to understand because we are too close to events
to see the direction in which they are moving or to discern the outline
of developments which will characterize the new era.

But any one who

has witnessed the new inventions, the birth of new industries, the acceleration
of production and consumption, and the structural changes which have so
vastly increased the wealth of the world and altered our entire mode of living
within the memory of those present, can not be discouraged about either the
immediate or the distant future.

The opportunities which have so

multiplied in the last generation are only the forerunners of others, and
perhaps greater ones, which will come as the result of forces now at work
and constantly being discovered, so that it is impossible to predict what
may be the opportunities that lie immediately ahead.
I have no means of knowing when or how we shall emerge from the
valley in which we are now traveling.

But I do know that, as in the

past, the day will come when we shall find ourselves on a more solid economic
foundation and the onward march of progress will be resumed.

EOR RELEASE, MORNING PAPERS,
Tuesday, May 5, 1931.

TREASURY DEPARTTTENT

STATE' ,TENT BY SECRETARY MELLON

The Secretary of the Treasury gives notice that tenders are
invited for Treasury bills to the amount of $50,000,000, or there­
abouts.

They will be 91-day bills; and will be sold on a discount

basis to the highest bidders.

Tenders will be received at the Eederal

Reserve Banks, or the branches thereof, up to two oTclock P. M . ,
Eastern Standard time, on May 7, 1931.

Tenders will not be received

at the Treasury Department, Washington.
The Treasury bills will be dated May 11, 1931, and will mature
on August 10, 1931, and on the maturity date the face amount will be
payable without interest.

They will be issued in bearer form only,

and in amounts or denominations of $ 1 ,0 0 0 , $ 1 0 ,0 0 0 , and $ 10 0 ,0 0 0
(matur it y valu e).
It is urged that tenders be made on the printed forms and for­
warded in the special envelopes which will be supplied by the Eederal
Reserve Banks or branches upon application therefor.
No tender for an amount less than $1,000 will be considered.
Each tender must be in multiples of $1,000.

The priceoffered must

be expressed on the basis of 1 0 0 , with not more than three decimal
places, e. g., 99.125.

Fractions must not be used.

Tenders will be accepted without cash deposit from incorporated
banks and trust companies arid from responsible and recognized dealers
in investment securities.

Tenders from others must be accompanied by

c
-

2-

a deposit of 10 per cent of the face amount of Treasury bills applied
for, unless the tenders are accompanied by an express guaranty of pay­
ment by an incorporated bank or trust company.
Immediately after the closing hour for receipt of tenders on
May 7, 1931, all tenders received at the Federal Reserve Banks or
branches thereof up to the closing hour will be opened and public an­
nouncement of the acceptable prices will follow as soon as possible
thereafter, probably on the following morning.

The Secretary of the

Treasury expressly reserves the right to reject any or all tenders
or parts of tenders, arid to allot less than the amount applied for,
and his action in any such respect shall be final.

Those submitting

tenders will be advised of the acceptance or rejection thereof.

Pay­

ment at the price offered for Treasury bills allotted must be made at
the Federal Reserve Banks in cash or other immediately available funds
on May 11, 1931.
The Treasury bills will be exempt, as to principal and interest,
and any gain from the sale or other disposition thereof will also be
exempt, from all taxation, except estate and inheritance taxes.

No loss

from the sale or other disposition of the Treasury bills shall be allowed
as a deduction, or otherwise recognized, for the purposes of any tax now
or hereafter imposed by the Unit' d Stages or any of its possessions.
Treasury Department Circular No. 418, as amended, dated June 25,
1930, and this notice as issued by the Secretary of the Treasury, pre­
scribe the terms, of the Treasury bills and govern the conditions of their
issue.

Copies of the circular may be obtained from any Federal Reserve

Bank or branch thereof.

TREASURY DEPARTMENT

FOR RELEASEr MORNING PAPERS,
Friday, May 8 , 1931. •

STATEMENT BY SECRETARY MELLON

Secretary of the Treasury Mellon announced to-day that the tenders
for $50,000,000, or thereabouts, of 91-day Treasury Bills dated May 11,'
1931, and maturing August 10, 1931, which were offered on May 5, 1931,
were opened at the Federal Reserve Banks on May 7, 1931.
The total amount applied for was $291,690,000.-

Except for one

bid for $30,000 at the rate of about 3/4 of 1 per cent, the highest bid
made was 99.715, equivalent to an interest rate of about 1-1/8 per cent
on an annual basis*

The lowest bid accepted was 99.701, equivalent to

an interest rate of about 1.18 per cent on an annual basis.*
amount of bids accepted was $50,000,000.
Bills to be issued is 99.701^
basis is about 1,18 per cent.

The total

The average price of Treasury

The average rate on a bank discount

FOR RELEASE* EVENING PAPERS,
May 9, 1931, at 1:00 P.M.

Remarks of
Andrew W. Mellon
on receiving the
American Institute of Chemists^ Modal
awarded for 1931
jointly to
Andrew W. Mellon and Richard B. Mellon
at a luncheon at
The Carlton Hotel,
Washington,
May 9,

1931

In accepting this medal, my "brother and I do so with a deep
appreciation of the honor which the American Institute of Chemists
has conferred upon us.

It symbolizes to us your approval of what

we have tried to do for public health and industry and for the great
profession which you represent.

We feel privileged to have been

given this opportunity of service; and it is an additional happiness to
"both of us that in this, as in so many of the other affairs of life,
we should "be associated together and receive this joint honor at your
hands.
I can not let this opportunity pass without a reference to Robert
Kennedy Duncan, who introduced my brother and me to the limitless
possibilities of scientific investigation, particularly in the field of
chemistry and chemical engineering, as applied to the development of
industry.

Dr. Duncan was one of the pioneers in industrial

research; and the System of Industrial fellowships, which he evolved
and. which has been farther developed by his worthy successor, Dr, Ueidlein,
has furnished a practical method of placing scientific investigation at
the service of business and industry.
We have found the chemist to be a valuable guide in the world of
business.

He has shown us that the use of the sciences and of

chemistry in particular is essential in maintaining both human and
industrial health and strength.
confidence in the chemist and his work.

We have all learned to have
We have seen that his

methods, based on the results of diligent research, are sound and, when
followed, introduce correct practicesinmanufacturing and other undertakings

Industrial research today is discovering new materials, new
processes, and finding new uses for by-products many of which in the
past have "been discarded as of no value.

It has opened up new

vistas of what the future has in store for us — a future holding
infinite promise as we increase our knowledge of the elements which
compose the earth and of the uses which can he made of them.
Again I wish to thank the American Institute of Chemists for
the honor which you have conferred on my brother and me and to say
that it fills us with a sense of gratitude that we have been privileged
to provide a few of the tools which Science needs in the great work
which it is doing.

TREASURY DEPARTMENT

EOR RELEASE, MORNING PAPERS,
Tuesday, May 12, 1951.

STATEMENT BY SECRETARY MELLON

The Secretary of the Treasury gives notice that tenders are
invited for two series of Treasury bills to the aggregate amount of
$100,000,000, or thereabouts.

One series will be 60-day bills and

the other series will be 91-day bills.

Both series will be sold on

a discount basis to the highest bidders.

Tenders will be received

at the Federal Reserve Banks, or the branches thereof, up to two
o ’clock P. M. , Eastern Standard time, on May 14, 1931.

Tenders will

not be received at the Treasury Department, Washington.
The Treasury bills will, as stated, be issued in two series,
$50,000,000, or thereabouts, to be dated May 18, 1931, and maturing
on July 17, 1931, and $50,000,000, or thereabouts, to be dated May
18, 1931, and maturing on August 17, 1931.

Bidders will be required

to specify the particular series for which each tender is made,

¿he

face amount of the bills of each series will be payable without interest
on their respective maturity dates.

The bills will be issued in bearer

form only, and in amounts or denominations of $ 1 ,0 0 0 , $ 1 0 ,0 0 0 , arid
$ 1 0 0 ,0 0 0 (maturity value).
It is urged that tenders be made on the printed forms and for­
warded in the special envelopes which will be supplied by the federal
Reserve Banks or branches upon application therefor.

-

2

-

No tender for an amount less than $ 1 ,0 0 0 will be considered.
Each tender must be in multiples of $1,000.

The price offered must

be expressed on the basis of 1 0 0 , with not more than three decimal
places, e. g. , 99.125.

Fractions must not be used.

Tenders will be accepted without cash deposit from incor­
porated banks and trust companies arid from responsible and recognized
dealers in investment securities.

Tenders from others must be ac­

companied by a deposit of 10 per cent of the face amount of Treasury
bills applied for, unless the tenders are accompanied by an express
guaranty of payment by an incorporated bank or trust company.
Immediately after the closing hour, for receipt of tenders on
May 14, 1931, all tenders received at the Federal Reserve Banks or
branches thereof up to the closing hour will be opened and public
announcement of the acceptable prices for each series will follow as
soon as possible thereafter, probably on the following morning.

The

Secretary of the Treasury expressly reserves the right to reject any
or all tenders or parts of tenders, and to allot less than the amount
applied for, and his action in any such respect shall be final.

Any

tender which does not specifically refer to a particular series will
be rejected.

Those submitting tenders will be advised of the acceptance

or rejection thereof.

Payment at the price offered for Treasury bills

allotted must be made at the Federal Reserve Banks in cash or other
immediately available funds on May 18, 1931.

-3-

The Treasury bills will be exempt, as to principal and
interest, and any gain from the sale or other disposition there­
of will also be exempt, from all taxation, except estate arid
inheritance taxes.

No loss from the sale or other disposition of

the Treasury bills shall be allowed as a deduction, or ©ther./ise
recognized, for the purposes of any tax now or hereafter imposed
by the United States or any of its possessions.
Treasury Department Circular No, 418, as amended, dated
June 25, 1930, and this notice as issued by the Secretary of the
Treasury, prescribe the terms of the Treasury bills and govern the
conditions of their issue.

Copies of the circular may be obtained

from any Federal Reserve Bank or branch thereof.

FOR RELEASE, MORNING PAPERS,
FRIDAY, MAY 15, 1931.

TREASURY DEPARTMENT

STATEMENT BY ACTING SECRETARY MILLS

Acting Secretary Mills announced to-day that tenders for $100,000,000,
or thereabouts, of two series of Treasury Bills dated May 18, 1931, which
were offered on May 12, 1931, were opened at the Federal Reserve Banks on
May 14, 1931.
60-day Bills.
■ With respect to the offering of $50,000,000, or thereabouts, of
60-day Bills dated May 18, 1931 and maturing on July 17, 1931, the total
amount applied for was $195,765,000.

The highest bid made was 99.837,

equivalent to an interest rate of about 0.98 per cent on an annual basis.
The*lowest bid accepted was 99.830, equivalent to an interest rate of about
1.02 perv cent on an annual basis.
latter price was accepted.

Only part of the amount bid for at the

The total amount of bids accepted for the

60-day Bills was $50,102,000.

The average price of the Bills to be

issued in this series is about 99,833.

The average rate on a bank dis­

count basis is about 1 per cent.
91-day Bills.
With respect to the offering of $50,000,000, or thereabouts, of
91-day Bills dated May 18, 1931 and maturing on August 17, 1931, the total
amount applied for was $263,301,000.

The highest bid made was 99.762,

equivalent to an interest rate of about 0.94 per cent on an annual basis.
The lowest bid accepted was 99.736, equivalent to an interest rate of about
1.04 per cent on an annual basis.
latter price was accepted.

Only part of the amount bid for at the

The total amount of bids accepted for the 91-day

Bills was $50,000,000.

The average price of the Bills to be issued in this

series is about 99.745.

The average rate on a bank discount basis is about

1 . 0 1 per cent.

TREASURY DEPARTMENT

FQR IMMEDIATE RELEASE
MAY 20, 1931.

The Secretary of the Treasury announces the selection of
Lescher and Mahoney, Phoenix, Arizona, for architectural services
in connection with the proposed Post Office Building, Phoenix,
Arizona.

FOR IMMEDIATE RELEASE,
Wednesday, May 20, 1931.

ÌRlAjSURY DEPARTMENT

"WAR POLICIES IF TAXATION"

Statement

*y
HOF.

ARTHUR

A.

BALLAST IFE,

Assistant Secretary of the Treasury
"before
the
WAR POLICIES COMMISSION,
Washington, D.C.

Wednesday,
May 20th, 1931.

WAR P0LICIS5 IN TAXATION

It was suggested to me by the Secretary of the Commission that I
appear here to say something from the standpoint of Treasury experience
as to taxation policies in time of war.

Complying with this request I

shall be glad to maire a brief statement and then to answer any questions
so far as I can.

The Treasury will be pleased to furnish to the Com­

mission any of its available information which the Commission may request.
My present connection with the Treasury is recent, but as Solicitor of
Internal Revenue in 1918 I had contact with the administration of the
war revenue laws and the development of war tax measures.
In the light of past experience any plan of war revenue legisla­
tion should include a war profits tax designed to bring into the Treasury,
so far as practicable, the entire amount of profits due to the war*

The

need of the Government for funds to support the war and the general desire
expressed before your Commission and by the formation of your Commission
to eliminate profit from war would both be furthered by such a measure.
What I wish principally to do is to discuss the formulation of such a
war profits tax suitable for a national war emergency.

Before doing this

I shall speak briefly of the taxation measures employed by our Government
in the great war.
Revenue Measures in the Great War
Material as to the Revenue Acts of 1917 and 1918 is set forth in
the reports of the Committees of Corgress as to those acts, in the records
of the Committee hearings, and in the Annual Reports of the Secretary of
the Treasury and of the Commissioner of Internal Revenue,

With that

material readily available to the Commission at any time I will merely
submit at this time four tables

~ 2 ~
Table 1 presents a summary of income taxes (including corporation
taxes) reported as due on incomes for the calendar years 1916 to 1928,
inclusive, and is followed hy a summary of statutory changes in income
tax revisions.

This table shows that total income taxes reported as due

on incomes for the calendar year 1916 (payable in 1917) amounted to
$345,000,000, and that the total amount due on incomes for the year 1917
amounted to $2,938,000,000, and the amount due on incomes for the year
1918 reached a total of $4,287,000,000.
Table 2 shows the miscellaneous taxes which were imposed under the
revenue acts of 1918 and 1928, together with the amounts collected under
each of the various items during the fiscal years 1930 and 1930.

Total

collections of miscellaneous internal revenue were $1,451,000,000 in
1920 as compared with $630,000,000 in 1930.
Table 3 shows amounts of Federal expenditures and of tax receipts
during the period of the world war.

For the three fiscal years 1917

to 1919, inclusive, expenditures exclusive of public debt retirements
amounted to $33,189,000,000.

Receipts from internal revenue and customs

for the same period amounted to $8,901,000,000, or about 27 per cent of
the expenditures.
Table 4 shows for the fiscal years 1917 through 1921 the ordinary
receipts of the Federal Government, changes in the public debt and in
the general fund balance; also total ordinary expenditures, that is,
expenditures exclusive of public debt retirements.

The table also

presents a classification of the outstanding gross public debt for these
same years.

It is apparent from this table that about 70 per cent of the

ordinary expenditures aggregating $33,189,000,000 for the three fiscal
years 1917 through 1919 were covered by borrowing.

The balance of about

3 per cent of the amounts expended was obtained from miscellaneous items

- 3of receipts, such as receipts from foreign governments, the proceeds of
sales of war supplies, discount on bonds purchased, surplus revenues for
prior years, and other smaller items.
As will he seen from these tables, and as you know, the funds for
financing the participation of our country in the great war were obtained
from two sources*

The first was taxation and the second was borrowing on

long-term bonds, notes and short—term certificates of indebtedness, the
latter usually issued in anticipation of the proceeds of bond issues or tax
receipts.

A third possible source sometimes employed by Governments in

national emergency, but not used by our Government in the late war, is the
direct issue of Government obligations in payment for goods and services.
A fourth method of finance which has never been used by our Government,
but which is suggested for your consideration by the resolution creating the
Commission, is the taking of private property for public use without compen­
sation.'

I take it that the object of the Fifth Amendment to the Constitution

requiring compensation for any such taking from a citizen is precisely that
indicated by another phrase of the resolution:

to equalize the burdens of the

public requirement by causing that burden to be apportioned among the citizens
generally through taxation instead of permitting the burden to rest on the
citizen owning the property taken, upon whom it happens to fall in the first
instance,

u

The method of finance which I have been a,sked to talk about is taxation.
The position of the Treasury as to taxation in the great war was broadly that
as large an amount should be raised currently by taxation as could be so
raised without disrupting the business or economic machinery of uhe country.
For the balance of the needed funds the Treasury advocated reliance upon loans
from citizens.

These loans were to be voluntary, but on the basis of the

fullest patriotic support of the Government in its supreme effort; were to

- 4 be drawn from past or anticipated future savings of the people, and to he
ultimately discharged from post-war taxation and such other funds as the
Government might have available•
On the question of the proportion of the war financial requirements
to be raised by taxation, the attitude of the Treasury was, I think:, based
mainly on its estimate of the tax burdens which the business structure
could bear without disruption*

It was desired to preserve that structure

and keep it functioning at maximum capacity for the maintenance of the
military effort and meeting the civilian needs, while at the same time
absorbing into the Treasury as much as possible from taxation.

The

Revenue Act of 1917 was designed to bring internal revenue collections
for the Government's fiscal year 1918 up to $3,400,000,000, as compared
with $809,000,000 actually collected in 1917.
1918 year was $3,699,000,000.

The actual yield for the

The Revenue Act of 1918, delayed of

enactment until 1919 largely because of the ending of the war, was designed
to yield about $6,000,000,000 in the fiscal year 1919.

In the discussion

of that measure before Congress the Treasury urged that current taxation
could and should be made to yield about one-third of total estimated
current expenditures for the year.
about that percentage.

So far as I know there was no magic
»

It represented an estimate of what could be

secured through taxation without disruption of the business machine.

The

tables show that the percentages of tax receipts to the Government's total
expenditures (exclusive of public debt retirements) during the war years
were as follows:
Fiscal year
1917
1918
1919

Per cent
52.4
26.5
24.3

In formulating the plans of taxation miscellaneous taxes, specified in
Table 2 , such as the transportation tax, manufacturers excise tax, stamp taxes,
and the like, were employed so far as they were thought to be fruitful#

In

another national emergency the general business situation existing at the time
would again have to be thoroughly canvassed to ascertain the full possi­
bilities of employing special taxes.

It might well prove that relatively

more could be accomplished in the development of excise or other special
taxes than was accomplished in the great war.
As the tables show, in the great war the chief reliance was placed
upon the income tax, including, of course, the corporation income tax
and the war and excess profits taxes.

By the Revenue Act of 1917 the

rates for individual taxes were increased as follows:

the normal rate

from 2 per cent to two rates of 2 and 4 per cent, and surtax rates beginning
with net incomes of $20,000 and graduated upward to 13 per cent to rates
beginning with net incomes of $5,000 and graduated upward to 63 per cent.
By the Revenue Act of 1918 the individual rates were raised as
follows:

Normal rates for 1918 incomes to 6 and 12 per cent and maximum

surtax rates to 65 per cent.
As to trades and businesses and corporations the Revenue Act of
1917 imposed the war excess profits tax.

This tax was designed to apply

to all business whether carried on by individuals, partnerships, or
corporations.

The tax was to be computed on the entire net business

income in excess of a specifically defined return on invested capital
plus a specific credit.

The rate of return on capital allowed as a

deduction before computing the tax, was the average rate of return of the

—

6

—

tra.de or "business upon capital in the pre-war period, 1911-1913, in­
clusive, "but was not to exceed 9 per cent or "be less than 7 per cent.
The rates of tax were graduated according to the amount "by which the
net income in excess of the designated normal return on invested capital
exceeded certain percentages, of the taxpayers invested capital, and ran
from a minimum rate of 20 per cent to a maximum rate of 60 per cent.

In

the case of trades or businesses having no invested capital, or not more
than a nominal capital, the war excess profits tax was levied at a flat
rate of 8 per cent.

The net income of the trade or business less the

war excess profits tax was subjected to income taxes which, in the case
of a corporation, consisted of a normal tax of 2 per cent and a war
income tax of 4 per cent.
By the Revenue Act of 1918 there was added the war profits tax
to be paid to the extent that it exceeded the excess profits tax, which
method of taxation was retained by that Act in somewhat revised form.
The war—profits tax for 1918 was 80 per cent of the excess of the net
income over the war profits credit.

This credit was $3,000 plus an

amount equal to the average net income of the corporation for the pre­
war period plus or minus 1 0 per cent of the difference between the
average invested capital for the pre-war period and invested capital
for the taxable year, but was not to be less than $3,000 plus 10 per
cent on invested capital for the taxable year.

The credit against

income for computing the excess profits tax under the 1918 Act was
$3 ,0 0 0 plus 8 per cent of the invested capital for the taxable year and
the maximum rate was 65 per cent for 1918 and 40 per cent for 1919 and 1930.
Under the 1918 Act the net income remaining after the deduction of the

I

- 7 war profits and excess profits taxes was subjected to a normal corporation
tax of 12 per cent for 1918 and 10 per cent for 1919 and 1920,

The war and

excess profits tax imposed by the Revenue Act of 1918 applied to corporar*
tions only.
After the Revenue Act of 1917 was enacted great doubt was expressed by
business executives and accountants as to whether the excess profits tax
could be administered, and whether amounts of tax at such high rates could be
collected without disrupting business and financial institutions.

The Act

was administered, notwithstanding gaps and uncertainties in its provisions.
The tax imposed by the 1918 Act at higher rates but under somewhat improved
provisions, was also shown to be capable of administration.

The high rates,

uncertainty as to the application and meaning of the Act in many connections,
and defects in the records and accounting systems of taxpayers resulted in
great delay in many instances in final determinations, in a great number of
additional assessments, and in numerous abatements and refunds.

Broadly

speaking, however, these acts were administered so as to furnish the Treasury
with the needed and expected funds.
1921 about $6,900,000,000.

They brought into the Treasury through

A comparison of the tabulated net income of all

corporations reporting net income for the three years before the war (the
calendar years 1914 to 1916, inclusive) with the net incomes of such corpora­
tions for the war years (1917 to 1919, inclusive) shows that the average
net income of corporations reporting net income was for the pre-war years
about $6,000,000,000 before taxes and about $5,900,000,000 after taxes and
that the average income of such corporations for the war years was
$9,500,000,000 before taxes and about $7,000,000,000 after taxes.
average net income of corporations reporting net income increased

Thus, the

/

-

8

—

$3,500,000,000 for the war years, while the average net income of such
corporations after taxes increased about $1,100,000,000«

According to this

calculation, based on reported incomes and taxes, the taxes during the war,
principally of course war and excess profits taxes, absorbed about 70 per
cent of the increase of the average profits of the war years over the
average profits for the years immediately before the war.
Future War Tax Legislation
What future war tax legislation would include in the way of mis­
cellaneous taxes and what rates of income tax would be suitable would
of necessity depend on conditions at the time of the emergency.

It is

clear, however, as I said at the outset, that any war revenue plan of which
we could now conceive suitable for a great national war emergency should
include the most effective war profits tax which it is possible to devise.
The ideal war income tax would bring into the Treasury the entire amount
of profits due to the war.

There is no reason to doubt that the business

men of the country would support a war profits tax properly framed to turn
over to the Government all actual war profits.

Business men share the

general opinion that the place for war profits is in the war chest of the
Government.

The problem here is not as to the principle to be followed,

for that is clear, but as to the technical difficulties of so formulating
a war profits tax that it will measurably accomplish its purpose without
preventing the necessary operation of the economic machine.

There is no

doubt that careful work in advance of the emergency upon such a measure
will make possible a much closer approach to the attainment of the ideal
war profits tax than would be possible if formulation is left to the time
of the emergency.

- 9-

It has been recognized in these hearings that war profits, at least
in some lines, are inevitable#

If it he assumed that the price structure

existing at the development of the emergency can he pegged or frozen, as
has heen so ably urged, it is recognized that to meet the increased war
demands for goods higher cost producers must be drawn into production and
such higher cost producers must receive higher prices than are needed for
low cost producers.
cost producers#

Such higher prices will increase the profits of the low

Mere increase in the volume of business at the old prices

would also greatly increase profits in many cases#

War profits will exist

as the subject of taxation and the limit of such taxation is of course the
amount of the profits#
In approaching the subject of war taxation it must be recognized
that any plan which would in fact operate to put necessary enterprises
out of business would be disastrous to the prosecution of the war.

If

private industry is to be left to function during the war, the necessary
production of munitions and goods and the financing of the war would be
frustrated by attempting to collect as a tax amounts which the taxpayer
could not draw out of the business while continuing to operate the business#
The first technical question to be faced is the problem of deter­
mining what the war profit is#
of the profit#

To begin with there must be a determination

In the case of any business which is at all complicated the

determination of the profit for a particular year can rarely be exact but
must rest in part upon assumptions and estimates.

Almost never does the

entire profit take the form of an actual excess of cash or securities at
the end of the year#

Generally speaking, part of the profit is in the

form of inventories and in the form of improvements or additions to factories#

-

10

-

Where the rate of tax is moderate, errors in determination do not have
vital consequences and average out over the years.

If, however, the

entire profit is to he taken out of the business errors in computation
might he disastrous.

Without elaborating on this difficulty, it may he

stated that to allow some margin for error, any workable tax would pre­
sumably have to be computed on some percentage less than 10 0 per cent say, 80 per cent, or perhaps at the outside, 90 per cent.

80 per cent

was the rate urged by the Treasury and adopted as the maximum in 1918 and
was the rate finally used in the British excess profits tax.

Leaving some

relatively small margin of profit also serves the purpose of furnishing a
guaranty to the Government that the taxpayer will see to the administra­
tion of the business with efficiency and economy.

This protects both

the revenue and the output.
Once the profit is determined there remains the question of how far
the profit is due to the war.
way.

The determination has to be made in a broad

There can be specific determination of the source of the profit in each

individual case.

In 1918 the Treasury earnestly advocated that the war ,

profits should be determined by comparison of the war income with pre-war
income - the entire excess over pre-war income to be regarded as war profits
and taxed at 80 per cent, which was the primary basis under the British system.
Congress, however, adhered mainly to the use of invested capital as the basis
of measuring excess income to be subjected to the tax.

Under the 1918 Act the

income subject to the 80 per cent war profits tax was in actual practice in
most cases the excess of the income after deducting a 1 0 per cent return on
invested capital.

As in the ordinary case the tax was based on the excess of

the net income over what was regarded as a normal business return upon capital,
instead of upon the net income over pre-war income, the tax was not a true
war profits tax but was an excess profits tax.

11

-

-

Apart from theoretical objections to an excess profits tax, the
use of invested capital as the basis for measuring the excess of income
resulted in very great practical difficulties*

The determination

of invested capital was all important in the actual fixing of the
tax but such determination was in many cases very difficult and in not
a few cases impossible*

Where a corporation had been formed by turning

in the property for stock the determination of invested capital depended
upon the valuation of the property at the time turned in.

Retroactive

valuations are difficult and were the subject of many controversies.

The

amount of invested capital was in many cases affected by the time of
organization of the corporation*

Where it happened that a corporation

had been reorganized or formed in a year shortly before our entry into
the weir, the valuation of its assets would be on a much higher basis than
if there had been no such reorganization*

The determination of invested

capital was also affected by accident or intercorporate relationships*
Problems as to the fixing of invested capital for consolidated groups
have not yet been actually solved*

In a good many cases also records

were not available to show the capital put in*

In every case current

invested capital was affected by the computation of surplus or deficit
resulting from the operation of prior years and such computation was, of
course, a fruitful source of controversy*

There is no question that

the experience of the Government and taxpayers with the determination of
invested capital was unsatisfactory and that this basis should not be
used again except as a last resort.
To relieve against arbitrary results flowing from disparity in
invested capital and income due to some abnormal condition or conditions
applying in a particular case, it was provided that where such abnormalities

IS
-

12

-

were found the taxes could he fixed on the basis of the rate of tax in the
cases of other representative concerns.

This special assessment provision,

while perhaps necessary, was found to he uncertain and vague in its appli­
cation and was one of the most troublesome features of the excess profits tax.
It must he admitted, however, that Congress had certain substantial
reasons for adhering to the use of invested capital for the purpose of
measuring income subject to special tax.

There had to be some method

for determining the application of the tax to new concerns which had no
pre-war income and also for determining the application of the tax in the
case of concerns the income of which in the pre-war period was clearly
sub-normal.

The necessity for meeting such cases was undoubtedly a

factor in the determination of Congress to use invested capital as a
measure of excess income.

The case of new corporations or new enter­

prises, and of enterprises which were operating on a sub-normal basis in
the pre-war period, would have to be provided for under any system.

It

is a matter for most careful consideration whether the application of the
war profits tax should be made to depend in the normal case on the mere
excess of war income over pre-war income, which would seem to be the
sound and satisfactory theoretical basis, and whether, if this were done,
the use of invested capital could be confined to the case of the new or
sub-normal enterprise.
Another consideration of great difficulty in the formulation of a
satisfactory war profits tax lies in the fact that the profit in a war
year is itself affected by war conditions and when those conditions have
culminated may prove to have been illusory.

Suppose that a business con­

cern to meet the demand for goods during the war purchases a new machine
or builds a new factory.

The amount so expended is normally treated as

- 13 -

an investment and not as an expense*

After the war, however, it may "be

that the additional machine or the new factory cannot he commercially
used and will have salvage value only*

If the war profits have been

reckoned without allowance for this loss they have been incorrectly
reckoned.

It was to meet this situation that the deduction of a

reasonable allowance for amortization was provided for by the 1918 Act.
The operation of that section also gave a great deal of difficulty.
In formulating a war profits tax it might be possible to avoid or lessen
the difficulty by providing that amounts expended for new facilities, if
approved by some proper government official or Board, could be temporarily
deducted in reckoning the profits, provided interest were paid on the amount
by which taxes were so reduced.

After the war the emergency value of the

additions so made would be reckoned once and for all and the taxes properly
adjusted.

Some similar provision might have to be made to protect the

enterprise against the ultimate loss in value of its basic inventories due
to post-war deflation.
There is a question whether a war profits tax would have to be
confined to business enterprises, whether it could be made to reach a
business enterprise carried on by individuals and partnerships as well as
by corporations, and whether it could be made to reach ordinary individual
income.

As to ordinary individual income, the determination in the last

war was that reliance should be placed on the income tax and that rates
should be made to begin at the right point in the scale and to reach
such a high percentage that the proper amounts would be drawn from in­
dividuals into the public Treasury.

The subject of the basis of income

taxes in the event of war, the exemptions and the point of beginning of
such taxes is one for the most careful study.

- 14 -

In summary:

the ideal war profits tax for a national war emergency

would "bring in to the Treasury of the Government the entire war profits.
Because of the margin of error in the determination of profits of a business
enterprise, because profits do not all or in the main take the form of money,
and the possibility of the destruction of the economic machine by taking more
than the profits, the measure of the tax could probably not in practice be
more than 80 per cent.

So far as possible war profits should oe broadly

treated as excess of income during a war year over pre-war income, the pre-war
period to be the nearest representative period not vitally affected by
conditions of the war.

Special temporary deductions would have to be per­

mitted in the determination of the profits to take account of probable
results of post-war deflation.
taxed at a maximum rate.

With such allowances war profits should be

The amount of income remaining after the deduction

of the war profits tax should of course be subjected to income tax rates
framed to meet the then existing conditions.
would probably eliminate war profits.

A war profits tax so conceived

Post-war adjustments not taken into

account in reckoning the tax would be very likely to absorb all or a large
part of any amount of the profits which for practical reasons would not be
taken from the taxpayer in the first instance.
Working out a carefully formulated war profits tax is a matter calling
for the most careful effort on the part of some body of experts, who, unin­
fluenced by actual emergency conditions, could study, the problem in the
requisite detail and carefully formulate at least the framework of a statute
which would be both workable and effective.

TREASURY DEPARTMENT

PCR IMMEDIATE RELEASE
May 21, 1931.

The Secretary of the Treasury announces the selection of
Graham, Anderson, Probst and White, architects of Chicago, 111.,
for architectural services in connection with the extension, re­
modeling, and enlargement of the Post Office, Washington, D> C.
Mr* Graham is one of the architects of the Union Station
and the present Post Office, Washington, D. C.

FOR IMMEDIATE RELEASE,
THURSDAY, MAY 21, 1931

TREASURY DEPARTMENT

»THE FEDERAL BUDGET SITUATION”

Address
of
* HON. OGDEN L. MILLS,
Under Secretary of the Treasury
"before the
National Association of Mutual Savings Banks
Mayflower Hotel,
Washington, D.C.

Thur sday, May 21, 1931.

* NOTE:

This address was delivered "by Assistant Secretary Ballantine
in the absence of Mr. Mills.

« THE FEDERAL BUDGET SITUATION”

For the fiscal year 1931 the United States Treasury, will show the
first deficit since 1919, the year in which war financing reached its
peak.

In the intervening period revenues have each year shown a surplus

over expenditures; marked progress has "been made in the reduction of
the public debt; expenditures have been reduced from inflated war levels;
and the burden of taxes has been greatly diminished, although without a
corresponding reduction in revenue.

At present we are confronted with

the relatively new experience of marked increase in current expenditures
attended by a sharp decline in revenues, and with the prospect of a very
large deficit.
The change is so .abrupt that it is well to reexamine our present
situation and fixture prospects in the light of the experience of the
past few years and from the standpoint of the course which normal
expenditures and normal revenue may follow during the next few years.
We have seen a tax system which produced some $672,000,000 in 1914
expanded to produce $5,728,000,000 in 1920, the peak year of war levies,
and subsequently contracted through four continuing revisions and one
temporary reduction.
There is nothing extraordinary in all this, for invariably our
experience with wars has been that the expenditures of the Federal
Government mount sharply to a peak either during or shortly after the
period of war activity; subsequently expenditures decline, but not to
the prewar level, owing partly to continuing expenditures due to war

-

2

-

activities, such, as the service on the puDlic debt, outlays for military
establishments on an increased scale and the care of war veterans.
Also expansion in the civil functions of the government is accelerated
during war periods, as compared with the gradual increase in normal
peacetime.
The extent to which Federal financial operations are distorted
from normal trends by wars may be amply illustrated from the record of
Federal expenditures.

The average yearly expenditures of the Federal

Government for the decade 1810—1819, which includes the v7ar of 1812,
were 145 percent larger than for the preceding decade.

From that high

level expenditures for the period 1820-1829 showed a considerable decline
but the average yearly figure for this decade was still about 7o per cent
larger than for the decade preceding the war; subsequently, between the
decades 1820-1829 and 1830-1839 there was an increase of 43 per cent.
During the Civil War, the increase was of course more marked as compared
with the preceding period, due to the nature and duration of that con­
flict.

Average yearly expenditures for the decade 1860—1869 were 775

per cent greater than for the preceding ten—year period.

During the

years 1870-1879 there was a decline of only 46 per cent from the high
level of the preceding ten years, and this was followed by a decrease
of 4, and increases of 48 and 46 per cent, respectively, during the
three following decades ending 1909.

During and after the Great War,

we experienced even broader changes.

Average yearly expenditures for

the fiscal years 1917—1919 were more than 15 times as large as for the

-

5

five years preceding 1915, and for the decade 1920-1929 showed a
decline of 66 per cent.
The significant fact to he noted is that each war marks the
beginning of a permanently higher basis of expenditures, even after
the war and early post-war peaks have been passed.
Let us now consider briefly the major facts pertaining to
present Federal expenditures.

Expenditures in 1930 amounted to

$3,994,000,000, and for this year are estimated at $4,435,000,000,
The composition of these figures clearly indicates that the war
continues to influence our budgets.

Of total expenditures for

1930 about a billion and a half, or nearly 40 per cent, repre­
sented disbursements that may be classified as related directly
or indirectly to the military functions of the government.

This

item in turn includes about 835 million for military pensions
and the like, a class of expenditures which will not only con­
tinue for a considerable period of years but will inevitably
increase as time goes on.

Another major item in the budget for

the fiscal year 1930 which may be attributed in the main to the
war is the service on the public debt including interest and sink­
ing fund retirements totaling about $1,050,000,000,

This is

also a type of expenditure which will continue, that is, until

the debt has been extinguished.

These two items account for

nearly two—thirds of total expenditures chargeable against
ordinary receipts for the fiscal year 1930#

The remaining

expenditures represent largely the ordinary costs of govern­
ment.

In the present fiscal year present expenditures

include a number of unusual and temporary items.

These in­

clude disbursements under the agricultural marketing Act of
June 1929 and under more recent legislation providing for
emergency loans for agricultural relief, as well as expenditures
resulting from expansion and acceleration in governmental
construction activity.

A statement recently issued by the

President indicates that at the present rate the cost of all
governmental construction work represents a large increase over
the rate of such expenditures previous to the depression.
Although it is anticipated that most of these expenditures will
continue, some on a larger and some on a smaller scale, in 1932,
clearly both the new expenditures and the acceleration of others
involved in the emergency program do not constitute permanent
increases in the burden on the budget.
Viewing expenditures as a whole, while a decrease may be
expected under some heads, it is hardly likely, even after

-5eliminating temporary and extraordinary items, that any reduction under
the average of the last few years is to he anticipated.

On the con­

trary, the normal trend of government expenditures is upward.

The

annual average of expenditures for the eight years ending June 30,
1930, has been $3,662,000,000.
*

Turning now to the revenue side of the picture, there are two

obvious methods of financing the peaks of war expenditures —
increasing tax levies, the.other by borrowing.

one by

Usually both methods are

employed, but there was a marked difference during the recent war period,
as compared with the Civil War years.

We financed a relatively large

proportion of the expenditures of the last war through tax levies made
during the war period.
effectively.

Taxes were levied in great number, promptly and

Tax receipts during the Civil War totaled about 20 per cent

of the expenditures, whereas during the fiscal years 1917-1919 tax
receipts amounted to about 27 per cent of the total ordinary expenditure^
a proportion which reflects very prompt action for such a short emergency.
This was an unusual record in war financing, but the point w3*fch which m
are particularly concerned in this discussion is that, because we built
up a tax system to carry currently a relatively large proportion of the
cost of the war, we were thereby faced with a correspondingly serious
problem at the end of the war of revising this tax system to a peacetime
basis.
It has been the aim of the Treasury in recommending tax legislation
during the early post-war period to retain that part of the war revenue
system which would further the development of a sound and effective tax

structure to finance the Government over a period of years. The greater
proportion of the taxes levied during the war were suitable only for
emergency purposes and were levied with the single purpose of obtaining
as much revenue as possible, with, little regard ior other consequences of
the levies.

To meet the existing emergency was the major consideration

in comparison with which the type of the tax, the metxiod of administration
and the convenience of the taxpayer were secondary considerations.

Also no

one questioned whether the taxes could be adapted ea.sily to changes in tne
fiscal requirements of the Government over a period of years.
The number and rates of taxes to meet the war emergency reacned
their maximum in the revenue act of 1918.

Under this act single individuals

with incomes of $1,000 and over and married individuals with incomes of
$2,000 and over were tax®& at rates which were graduated upward in rough
proportion to the size of the income and ranged as high as 65 per cent sur­
tax and 12 per cent normal tax on amounts of income in excess of $1,000,000.
In addition, consumers, rich and poor, paid taxes on a great
variety of goods and services; and in levying many even of these indirect
taxes an effort was made, and with considerable success, to impose the
heavier burden upon the wealthy.

Tobacco taxes were increased some 50

per cent; on admissions to places of amusement one cent was paid to tne
Government for every ten cents.
tickets and reservations.

Those who traveled paid taxes on railway

Telephone calls and telegrams were taxeu, and

other taxes were levied on products as they left the hands of the manu­
facturer or dealer, and were, at lea.st in part, added to prices paid by

the conswer.

Thus individuals made contributions to the Government in

the purchases of automobiles, tires and accessories, candy,chewing gum,
drinks, photographic supplies, musical instruments, jewelry, perfumery,
cosmetics and medicinal articles.

The burden of these indirect taxes

was distributed fairly generally; other taxes, such as those on the estates
of decedents, club dues and a variety of consumption articles, such as
sporting goods, fire-arms, yachts, motor boats, hunting garments, articles
made of fur, and other wearing apparel, bore more heavily upon individuals
with relatively large incomes.
There were other taxes which reached the individual as a business
mqn through the income and war and excess profits taxes, the tax on
corporation capital stock, stamp taxes on documents and the special
occupational taxes.
After the close of the war these taxes were gradually revised and
reduced mainly through four revenue acts —
19 2 S —

those of 1 9 2 1 , 1 9 2 *+, 19 2 6 and J

until finally the elaborate wartime system of numerous, and in many

cases cumbersome, taxes on commodities and activities —
comparatively insignificant amount of revenue —

some yielding a

has been changed into an

internal revenue system of comparatively few taxes.

Individual incomes

have been relieved through three continuing and one temporary reduction
in normal rates, three reductions in surtaxes, a special rate for
income from sale of capital assets, increases in personal exemptions
and credit, and the addition of a credit for earned income.
excess profits taxes on corporations have been removed.
reduction has been made in estate taxes.

The war and

A substantial

The excise taxes on the sale

-

8-

price of a long list of articles, ranging from toilet articles and
jewelry to automobiles and sporting goods, has been virtually eliminated»
The special taxes included for corporation capital stock and a variety
of occupational taxes have all been repealed except the tax on brewers
and distillers and on the use of narcotics.

Some reduction has been

made in the tax on documentary stamps, admissions, dues, distilled
spirits and tobacco products.

Taxes on transportation, on telephone

and telegraph, on insurance and on non-alcoholic beverages have been
repealed.
In considering the present situation in regard to revenues I am
inclined to take as a point of departure the fact that during the past
decade, despite reductions in taxes, revenues have been fairly constant
at relatively high levels, although considerably below the peak reached
early in the postwar period.

Ordinary receipts have continued close to

the annual average of $4,018,000,000 for the pa.st eight years.

This

result is to be accounted for largely by the relatively high level of
business activity and generally prosperous conditions which prevailed
during the period, and in part by the increased productivity of taxes
which followed upon the elimination of the extremely high rates of the
war period.

It should be observed, however, that in considerable

measure the revenues of the period were considerably influenced by cer­
tain classes of receipts not of permanent character.

The immediate

postwar years are somewhat confused by numerous special items both of
receipts and expenditures which appeared during that period of broad

)y

-9-

readjustments.

The significance of non-recurring elements in Federal

receipts of past years may be readily indicated, however, by refer­
ence to the period beginning with the fiscal year 1923.

From 1923 to 1928,

inclusive, the net proceeds of sales of securities of the Federal Govern­
ment amounted to $642,000,000 and the proceeds of sales of war materials
to about $166,000,000, at the same time $254,000,000 was realized from
the liquidation of the War Finance Corporation.

Receipts

from these

three sources, aggregating $1,062,000,000 for the period, have now
become negligible;

they amounted bo only $18,000,000 and $17,000,000

for 1929 and 1930, respectively.

A somewhat similar influence has been

exerted on receipts of certain years by the collection of back taxes.
Although it is impossible accurately to measure the amount by which
receipts have been affected by nonrecurrent items, it can be said that
as much as half of the combined surplus of about; $2,800,000,000 for the
past eight fiscal years may be attributed to such receipts.
The post-war tax system evolved out of our war experience differs
materially from the pre-war days.

Then our revenues were derived

primarily from customs and other indirect taxes, chiefly taxes on
tobacco products, distilled spirits, and fermented liquors.

Customs

produced about half of the tax receipts , and the above taxes largely
accounted for the remainder of the pre-war tax receipts.

Now about

two-thirds of the taxes come from income taxes on corporations and

,,

-

individuals»

10

-

Tobacco taxes continue to yield large revenues and

except for income taxes are the most important source of internal
revenue.

Customs, also, still yield substantial receipts.

Distilled

spirits and fermented liquors are now, of course, a negligible eource
of revenue.
The current situation forces us to scrutinize carefully our
new postwar tax system.
business depression*

Receipts have declined seriously with the

We are faced with a large deficit.

Does this

mean that taxes have been reduced too far or that the taxes that have
been retained do not constitute a sufficiently well-balanced system
to provide an even flow of revenue from year to year?

History indicates

plainly enough that while during the first few years succeeding a war
expenditures may be rapidly reduced from the war level, they never return
to the prewar level, but remain on a substantially higher basis.

It

is impossible, therefore, to hope to return to the comparatively simple
system that existed before the World War.
to meet present or future needs.

It would be entirely inadequate

These are so vastly greater that what

is required is a modification of the war system of taxation rather than an
expansion and development of our pre-war system.

Wars do permit the

imposition of taxes which however sound could never be imposed as new
taxes in peace time.

It is the part of wisdom to retain some of them,

at least, after a war is over.
Our present situation raises the question, though it does not do
more than raise the question, as to whether some of the taxes developed

-

11-

in the war period have been repealed or modified perhaps a little tdo
rapidly.

Through successive revisions in the income tax laws, personal

exemptions and credits have been increased, and the income base, which
hears the major direct burden cf the individual income taxes, has been
greatly narrowed.

We have limited the incidence of the individual in­

come tax to some 2 ,5 0 0 ,0 0 0 taxpayers, a comparatively small number com­
pared to our total population and of this number some 3 8 0 ,0 0 0 pay about
97 per cent of the tax.

Partly in consequence of this fact the amount

of our revenue derived from income taxes is much more susceptible to
sweeping changes than would otherwise be the case.

Moreover, this sus­

ceptibility to change is emphasised by our treatment of capital gains and
losses, which tend to swell abnormally the current income in times of rising
prices and expanding business, and to depress it to an even greater ex­
tent in periods of falling prices and business contraction.

At the same

time we must realise that the concept of capital gains as taxable
income forms such an integral part of our income tax system that its
elimination would be nothing short of revolutionary and would involve a
pretty collets re-writing and re-interpretation of this complex law.
Tobacco taxes are at present our most stable form of revenue, though
customs duties may be relied on to produce relatively stable amounts
except in truly abnormal times.

But the fact that we rely for two-thirds

of our tax revenue on the income tax and that that income tax is so con­
structed as to be extremely sensitive, makes our whole revenue system
susceptible to very wide fluctuations, following in the main the curve
of "business peaks and depressions#

/«

-

12

-

It is true that from 1924 onward we were able steadily to
reduce rates and narrow the tax base, and still witness increasing
income tax collections during most of the period, since business and
the national income expanded more rapidly than taxes were reduced; and
at the same time governmental expenditures remained comparatively stable.
We know, furthermore, that our last revenue act, at least as it applied
to income in 1928 and 1929, was adequate for our needs for the first two
years it was in effect.

But under the present conditions of extreme

depression expenditures are exceeding revenues by a wide margin.
This would be a matter of very grave concern were it not for the
fact that conditions are so abnormal that they do not furnish any fair
test of the adequacy of a revenue system.,, On the one hand, expenditures
are swelled by emergency needs, and on the other hand, revenues are
depressed way below the normal point.

Moreover, the current deficit

appears less formidable when we realize that it includes some $440,000,000
of public debt retirements so that the actual net increase in the public
debt will be much less than the deficit figures themselves would seem
to indicate.

Undesirable as is any increase in the public debt in times

of peace, we can feel less concerned about it than we ordinarily would
because of the fact that during the last ten years public debt retire­
ments have been effective at a much more rapid rate than might have been
expected.

While, "therefore, we are not justified in looking upon the

present position of the Treasury with complacency, there is no occasion
for alarm unless it should appear that there is a reel danger of a series
of unbalanced budgets.

-13This Tarings us to the question of what is to be expected from
any revenue system*

Prom a theoretical standpoint, it may Tao argued

that all we should aim at is a balanced budget over a relatively short
period of years, the assumption being that if through a succession of
surpluses in years of prosperity the finances of the Government have
been greatly strengthened by public debt reductions, a sufficient
margin of safety has been provided to meet successive deficits during
lean years#

Prom a practical standpoint, however, it seems to me that

we should be guided by the sound principle of endeavoring to close
each fiscal year with a balanced budget#

While theoretically a series

of surpluses might be applied to the strengthening of the financial
structure, they are much more likely to be dissipated in increased
expenditures, while if once we admit the propriety of a deficit, -there
is a real danger that we might come to view them with such complacency
that we would shirk the disagreeable but essential duty of avoiding
them either by reducing expenditures or increasing taxes.

Insistence

on a balanced budget is the one means that I know of compelling a
government to live within its income and of making the people realize
that if they desire to expand the services of government they must
inevitably look to increased contributions in the form of taxes.
By a balanced budget I do not mean, of course, that it is possible
to devise a system which would provide revenues in exact balance with
current expenditures involved in the numerous and varied Federal
activities#

The achievement of such a precisely balanced budget would

-14be a natter of the rarest accident.

But I do mean that we should so

adjust our tax system that year in and year out there will "be no great
variation between receipts and expenditures, and that a comparatively
small deficit one year will "be offset by a comparatively small surplus
the next.
The establishment of such a system demands in the first place
the determination, after eliminating the unusual items that now distort
the picture, of what normal expenditures are likely to be for the next
few years, allowing, of course, for the inevitable upward trend.

The

second essential step is to ascertain whether our present tax system,
once business conditions have returned to normal, will be adequate to
furnish the necessary receipts*

The second problem is obviously an

enormously difficult one under existing conditions, and while the
Treasury Department is endeavoring to formulate some reasonable satis­
factory answer, our final conclusion should be based on further trial
and experience.

Certainly the present year taken by itself offers a

most inadequate criterion by which to judge the ability of the present
Federal revenue system to meet the governments normal requirements.

EOR RELEASE, MORNING- PAPERS,
SUNDAY, MAY 24, 1931,

TREASURY DEPARTMENT

TREASURY PROBLEMS

Speech of
Honorable A. W. Mellon
Secretary of the Treasury,
in the National Radio Forum,
over the Columbia Broadcasting System,
Washington
May 23,

1931,

at 8:30 P.M.

I
I

1L

TREASURY PROBLEMS

During the last two years the Treasury has faced a variety
of problems.

The Government *s financial position has changed

from one of great ease to one of increasing difficulty, due to the
widespread "business depression which has afflicted the world.
Revenues, particularly those derived from income taxes, have
abruptly declined, and at the same time expenditures have increased,
owing largely to measures undertaken to alleviate the depression in
agriculture and industry.
fiscal year with a large deficit.

As a result we shall close the current
We face the prospect of a deficit

again next year, although we do not yet know just how great that deficit
may be.
When the time comes, we shall be able better to assess the
situation and to determine what may be necessary for meeting our
immediate needs.

Meanwhile, it is well to remember that the

financial position in which the Government now finds itself is not
unfavorable for dealing with the present emergency and that it is due
largely to the fact that since the war, and particularly in the two
years since the present Administration began, the Government has
overlooked no opportunity to set its financial house in order and, in
a manner of speaking, to prepare for the rainy day that was sure to
come.

~ 2 -

First and foremost, we have pursued a sound policy of debt
retirement, with "beneficial results that are clearly apparent.
On June 30, 1919, our total interest-hearing debt outstanding amounted
to $25,235,000,000,

The average interest rate was 4,18 per cent,

and the annual interest charge came to $1,054,000,000, which constituted
a heavy burden even for so rich a country as this.

On June 30,

1930, the total interest-bearing debt stood at $15,922,000,000, showing
a reduction during the period of over $9,313,000,000,

Of this

latter amount $1 ,1 3 2 ,0 0 0 ,0 0 0 was retired since the beginning of the
present Administration,

The average interest rate had been

reduced to 3.81 per cent at the end of the eleven year period, and the
saving in annual interest charges accomplished by reduction and refunding
of the debt amounted to $448,000,000,
In the future we must look mostly to two sources of debt retirement:
the Sinking Fund and Foreign Debt repayments.

In view of the

interest which discussion of this subject has aroused, it is well to bear
in mind the provisions of law governing the payment of the public debt.
In the War Loan acts authorizing advances to foreign governments, it was
provided that repayments of principal made by foreign governments on account
of such loans should be applied to reduction of our debt.

In the

funding agreements subsequently entered into it was stipulated that foreign
governments may, if they so desire, pay both principal and interest on
their debt in certain interest-bearing obligations of the United States;
and such obligations as have been delivered to this Government have been

immediately retired and our public debt reduced by corresponding
amounts.

Interest paid by foreign governments in cash, as has

been done during the past year, automatically becomes available for
current expenditures.
During the fiscal year 1930 the Treasury received from all foreign
governments the sum of $239,565,000, on account of principal and
interest.

Of this amount the sum of $160,185,000 was paid by Great

Britain; $57,251,000 by France, $5,000,000 by Italy, and the remainder of
$17,129,000 was paid by Belgium, Poland, Rumania, and nine other debtor
nations.
The other basic provision for retirement of the debt is the
Sinking fnnd, established on July 1, 1920.

That Fund consists of a

permanent appropriation of amounts fixed by law and made annually from the
general revenues for the purpose of debt reduction.

For the current

fiscal year ending June 30th next the expenditures for this purpose will
amount to $391,660,000.
The* deficit for the current year will be such that for this year
there will be no net reduction in the debt.
contrary, be an increase.

There will, on the

But in bad times, as in good, like the man

who tightens his belt and keeps up payments on the mortgage, we shall continue
to make the payments provided by the Sinking Fund, as authorized by law.
By not deviating from that program, we have already lightened the burden of
the debt by reducing the annual interest charges by nearly half a billion
dollars, the effect of which is now felt at a time when such saving is most
welcome

- 4 -

It is not to "be expected, of course, that reductions can he
made in the future .at such a rapid rate as in recent years, when surplus
revenues have been available to be applied on the debt in addition to the
regular payments from the Sinking Fund,

The amounts to be provided

from the Sinking Fund are not so large as to be unduly burdensome; and by
adhering strictly to the Sinking Fund program, we shall maintain the principle
of orderly debt retirement and will in time eliminate the great drain which
the debt now makes on the revenues.
Along with debt retirement, the Government has pursued a steady
program of tax reduction during periods of prosperity so that today, when
adversity has come upon us, the burden of Federal taxes has been reduced
to a minimum.

In a ten year period there have been four continuing

reductions in taxes and one temporary reduction for the 1929 returns.
An elaborate war-time system, with heavy taxes on many commodities and
activities, has been gradually converted to a peace-time basis, with the
result that we have at the present time an internal revenue system of few
and relatively light taxes.

Lower 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 and allowing credit for earned income, the small taxpayer has been
almost entirely relieved of the burden of Federal taxes.

Both normal

rates and surtaxes have been reduced; the war and excess profits tax on
corporations has been removed; the estate tax has been lowered and excise
taxes on the sale prices of many articles have been eliminated.
In the successive revisions of the revenue law, the Federal Government
has not only relieved the taxpayers of a very large part of the burden of

- 5 taxation but has eliminated some of the most inequitable and unscientific
taxes inherited from the war.

In recommending tax legislation

during the post-war period, the Treasury has tried to retain only those
features of the war-time system which seemed most suited for a permanent
peace-time structure, designed not for one or two years but with regard to
the revenue requirements over a long period and with a view to its ultimate
effect on the country as a whole.
The situation in which we find ourselves at present, with a serious
deficit facing us at the end of the year, raises the question as to whether
we have yet developed a sufficiently well-balanced system to provide the
revenues on which the Government must be able to count from year to year.
We depend today largely on two sources of revenue; first, internal
revenue taxes, including individual and corporation income taxes and such
other taxes as those on tobacco and estate taxes; and, second, customs
duties.

Customs duties are fairly stable and, in spite of all we

hear to the contrary, may be relied on to produce an even flow of revenue
except in the most abnormal years.

Taxes on tobacco are also a

very dependable and important source of Government revenue.

The

individual income tax, however, has become so restricted in its application
that it has become a class rather than a general tax, with its incidence
limited to a comparatively small number of taxpayers.

Out of a total

population of 120,000,000 there are only 2,500,000 individuals and about
a quarter of a million corporations who pay an income tax.
Furthermore, some 380,000 individuals pay about 97 per cent of the total
amount received from individual income taxes*

Yet we depend

-

6

-

on this limited number of taxpayers for so large a part of the revenue
needed for the support of the Government•
In times like the present, when incomes have fallen off, such a
system inevitably results in a severe shrinkage in the Government's
revenues; and this fluctuation in the revenues is further increased by
our treatment of capital gains and losses, which tend to increase
abnormally current income in times of rising prices and business
expansion and to depress it in periods of falling prices and business
contraction.

The surpluses which have arisen in the past and the

deficit which we face today are due in large measure to the fact that
we rely for two—thirds of our tax revenue on the income tax, which is
subject to sweeping variations and depends on a variety of circumstances
but principally on the upward and downward swings of business.
The Treasury has for some time been aware of the defects in our
tax structure; and while, in my opinion, we could not possibly have
anticipated the extent to which revenues have fallen off, the Treasury
has not failed to call to the attention of Congress and the country
the advisability of providing safeguards against the very conditions
which have overtaken us.
Three years ago when Congress was being urged by organizations of
business men and other individuals to grant a greater reduction of taxes
than seemed warranted, the Treasury pointed out the danger of eliminating
certain excise taxes and depending for so large a part of our revenues
on a comparatively small number of taxpayers.

In this connection

the Treasury said:
"In prosperous years this revenue (from income
tax) is stable enough, and in an era of mounting pros­
perity we may expect an increase in the taxable

- 7 ~

income of this limited number of taxpayers who form the
base of the Federal tax structure.

But if the

situation should be reversed and prosperity should begin
to recede, it might result in such a shrinkage in incomes
# that the Government's revenue would be seriously affected.
Obviously, we should retain some other taxes which can
be relied on in times when a slowing up of prosperity
may cause a falling off in incomes and a consequent drop
in taxes from this source.H

I have referred to these views at this time, first, because they
seem to be pertinent now when the tax system must come under careful
scrutiny; and, second, because I do not wish the country to think
that the Treasury views with complacence the present situation in
which we find ourselves, either as regards the lack of balance in
our tax structure or the inadequate amount of revenue which it produces
under adverse conditions.
Any government deficit is a matter of grave concern.

The present

deficit may be met, as it is being met, through borrowing, but such a course
is only a temporary expedient.

The handling of the problem of

government revenues for the future must depend upon judgment at the proper
time, in the light of all possible information which can be developed,
as to how long the adverse conditions which have brought about the deficit
will continue,

Hie strong credit position of our government makes it

possible to take care of a temporary decrease in the revenues.

But the

continuing policy, addressed to conditions as they may be expected to
prevail over a considerable period of time, can only be the maintenance

of the sound principle of closing each fiscal year with a "balanced
budget.
The existence of a deficit has added materially to the problem
of current financing,

Fortunately, money conditions have been

unusually favorable, so that the suns needed have been obtained without
difficulty and at low cost to the Government,
How I would like to turn for a moment to another and happier
problem of the Treasury, having to do with a subject of general interest
throughout the country.

In many places public buildings are being

erected, or soon will be;

and even if one has no direct concern

with these projects, all of us feel a deep and proprietary interest in
what is being done at Washington to make the nation1s capital more
beautiful.
One of the subdivisions of the Treasury is the Office of the
Supervising Architect;

and it is in this office, in collaboration

also with the Post Office Department, that the plans are being made
for carrying through the extensive public building program authorized
by Congress,

Outside architects are being employed on many of

these projects, and contracts are being let as rapidly as possible
in order to provide employment and stimulate activity at the present
time in many lines which ere affected, directly or indirectly, by
the building industry.

Furthermore, by building now, when

contracts can be made on a basis materially lower than a few years ago,
the Government will save money in erecting needed and permanent improvement

- 9 -

It mast be "borne in mind that the building program is not in any sense an
unnecessary or extravagant use of the public funds merely for the purpose
of meeting an emergency situation.

On the contrary, the buildings

contemplated or now being erected in Washington and throughout the country
are needed to house the Government’s varied activities and will make it
possible to avoid the payment of expensive rentals, as at present, for
buildings which are frequently unsuited to the Government’s needs.
In accordance with the program carefully worked out by Congress,
$135,245,000 will be expended during the coming fiscal year.

One

hundred and forty-seven projects are nnder contract throughout the conntry;
and in the District of Columbia the long delayed plans for the City of
Washington are gradually taking form.
During the present calendar year the new building for the Department
of Commerce in Washington will be completed and occupied and work will be
started on the Post Office Department, the Labor Department, the Department
of Justice and the Archives Building.

All will form part of that

great composition of buildings which will be erected on Pennsylvania
Avenue and will help to transform that thoroughfare into a street of dignity
and beauty.

In addition, a building for the Supreme Court on Capitol

Hill will soon be under way? one will be started for the Public Health
Service; and the great Memorial Bridge across the Potomac River, leading
from the Lincoln Memorial to Arlington and symbolizing tne union of the
North and the South, will be completed in time for the celebration next
February of the Two Hundredth Anniversary of the birth of George Washington.

That, it seems to me, is as it should be.

In carrying forward

the development of Washington, we are doing something of permanent value
for the country.

Business depressions may come and go and the present

one will be forgotten as time goes on.

But the City of Washington

will remain, so let us go ahead with the building of it and, in so doing,
follow the example President Lincoln set when he insisted on carrying on
the work on the great dome of the Capitol even during the darkest days
of the Civil War.

That work, he felt, was a symbol that the

nation must go forward; and it was a symbol also of his unconquerable faith
which played so large a part in the outcome of the struggle in which the
nation was then involved.
We, at this moment, are engaged in another struggle, this time
against economic forces«
be no doubt about the outcome.

The trial is a severe one but there can
We know that we shall emerge not

only with unshaken faith in our country* s future but with renewed confidence
in our own capacity as a people to meet and overcome any obstacles that
may seem temporarily to impede our progress*

FOR RELEASE, MORNING PAPERS,
Tuesday, May 26, 1931.

TREASURY DEPARTMENT

STATEMENT BY SECRETARY MELLON

The Secretary of the Treasury gives notice that tenders are
invited for Treasury bills to the amount of $80,000,000, or there­
abouts.

They will be 91-day bills; and will be sold on a discount

basis to the highest bidders.

Tenders will be received at the Federal

Reserve Banks, or the branches thereof, up to two o ’clock P. M . ,
Eastern Standard time, on May 28, 1931.

Tenders will not be received

at the Treasury Department, Washington.
The Treasury bills will be dated June 1, 1931, and will mature
on August 31, 1931, and on the maturity date the face amount m i l be
payable without interest.

They will be issued in bearer form only,

and in amounts or denominations of $1,000, $10,000, and $100,000
(maturity value).
It is urged that tenders be made on the printed forms and for­
warded in the special envelopes which will be supplied by the Federal
Reserve Banks or branches upon application therefor.
No tender for an amount less than $1,000 will be considered.
Each tender must be in multiples of $1,000.

The price offered must

be expressed on the basis of 100, with not more than three decimal
places, e. g., 99.125.

Fractions must not be used.

Tenders will be accepted without cash deposit from incorporated
banks and trust companies and from responsible and recognized dealers
in investment securities.

Tenders from others must be accompanied by

i
\ v ;

-

2-

a deposit of 10 per cent of the face amount of Treasury bills applied
for, unless the tenders are accompanied by an express guaranty of pay­
ment by an incorporated bank or trust company.
Immediately after the closing hour for receipt of tenders on

May 28, 1931, all tenders received at the Federal Reserve Banks or
branches thereof up to the closing hour will be opened and public an­
nouncement of the acceptable prices will follow as soon as possible
thereafter, probably on the following morning.

The Secretary of the

Treasury expressly reserves the right to reject any or all tenders
or parts of tenders, arid to allot less than the amount applied for,
and his action in any such respect shall be final.

Those submitting

tenders will be advised of the acceptance or rejection thereof.

Pay­

ment at the price offered for Treasury bills allotted must be made at
the Federal Reserve Banks in cash or other immediately available funds
on June 1, 1931.
The Treasury bills will be exempt, as to principal and interest,
and any gain from the sale or other disposition thereof will also be
exempt, from all taxation, except estate and inheritance taxes.

No loss

from the sale or other disposition of the Treasury bills shall be allowed
as a deduction, or otherwise recognized, for the purposes of any tax now
or hereafter imposed by the United States or any of its possessions.
Treasury Department Circular No. 418, as amended, dated June 25,
1930, and this notice as issued by the Secretary of the Treasury, pre­
scribe the terms of the Treasury bills and govern the conditions of their
issue.

Copies of the circular may be obtained from any Federal Reserve

Bank or branch thereof.

TREASURY DEPARTMENT

FOR IMMEDIATE RELEASE,
May 27, 1931.

The Secretary of the Treasury announces the selection of Weston
and Ellington, 1507 Stroh Building, Detroit, Michigan, for architectural
services in connection with additional facilities at the Marine Hospital
Detroit, Michigan.

TREASURY DEPARTMENT

FOR RELEASE, MORNING PAPERS,
Friday, May 29, 1931.

STATEMENT BY SECRETARY MELLON.
Secretary of the Treasury Mellon announced to-day that the tenders
for $80,000,000, or thereabouts, of 91-day Treasury Bills dated June 1,
1931, and maturing August 31, 1931, which were offered on May 26, 1931,
were opened at the Federal Reserve Banks on May 28, 1931.’
The total amount applied for was $322,313,000«

The highest hid

made was 99,838, equivalent to an interest rate of about 5/8 of one
per cent on an annual basis*

The lowest bid accepted was 99.777,

equivalent to an interest rate of about 7/8 of one per cent on an
annual basis*
accepted.

Only part of the amount bid for at the latter price was

The total amount of bids accepted was $80,013,000.

average price of Treasury

Bills to be issued is 99,785.

rate on a bank discount basis is about 0,85 per cent.

The

The average

EOR RELEASE, MORNING PAPERS,
Monday, June 1, 1931.

TREASURY DEPARTMENT

STATEMENT BY SECRETARY MELLON

The Treasury is today offering for subscription, at par
and accrued interest, through the Federal Reserve Banks, an issue
of 3-1/8 per cent Treasury bonds of 1946-49.

The bonds will be dated

and bear interest from June 15, 1931, will mature on June 15, 1949,
and will be redeemable at the option of the United States on and after
June 15, 1946.

The amount of the offering is £ 8 0 0 ,0 0 0 ,0 0 0 , or there­

abouts.
Applications will be received at the Federal Reserve Banks.
The Treasury will accept in payment for the new Treasury bonds, at
par, Treasury certificates of indebtedness of Series TJ-1931 and
TJ2-1931, both maturing June 15, 1931.

Subscriptions for which pay­

ment is to be tendered in certificates of indebtedness maturing
June 15, 1931, will be given preferred allotment up to £325,000,000.
The Treasury bonds ■'¿Till be issued both in bearer ~-nd
registered form, in denominations of £50, £100, £500, «^1,000, ^5,000,
£10,000, and £100,000.

The registered bonds will also be issued in

the £>50,000 denomination.
These bonds will 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

///

-

2-

taxing authority, except (a) estate or inheritance taxes, and (b)
graduated additional income'taxes, commonly known as surtaxes, end
excess-profits end war-profits taxes, now or hereafter imposed by
the United States, upon the income or profits of individuals, part­
nerships, associations, or corporations.

The interest on an -mount

of bonds and certificates (but not including any certificates of
indebtedness issued after June 17-, 1929, because they were on that
|ito made exempt from all taxation except estate and inheritance
taxes) authorized by the Act approved September 24, 191V, as amended,
the principal of "hich does not exceed in the aggregate 05,000, earned
by any individual, partnership, association, or corporation, shall bo
exempt from the taxes provided for in said clause (b) above.
About 0589,000,000 of Treasury certificates of indebtedness
and about 090,000,000 in interest payments on the public debt become
due and payable on Juno 15, 1931*
The text of the official circular follows:

AM

-3The Secretary of the Treasury invites subscriptions, at par and
accrued interest, from the people of the United States, for three and oneeighth per cent Treasury bonds of 1946-49, of an issue of gold bonds of
the United States authorized by the Act of Confess approved September 24,
1917, as amended.

The amount of the offering will be $800,000,000, or

thereabouts.
DESCRIPTION OE BONDS
The bonds will be dated June 15, 1931, «id will bear interest
from that date at the

rate of three and one-eighth per cent per annum,

payable semiannually, on December 15, 1931, and thereafter on June 15 and
December 15 in each year until the principal amount becomes payable.

The

bonds will mature June 15, 1949, but may be redeemed at the option of the
United States on and after June 15, 1946, 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 maimer 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 c o m 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 denomina­
tions of $50, $100, $500, $1,000, $5,000, $10,000, $50,000, and $100,000.

r4-

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 arid 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) graduated ad­
ditional 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 cor­
porations.

The interest on an amount of bonds and certificates (but not

including any certificates of indebtedness issued after June 17, 1929)
authorized by said Act approved September 24, 1917, as amended, 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 said 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 regula­

tions of the Treasury Department, now or hereafter issued, governing
United States bonds.
APPLICATION AND ALLOTMENT
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.
The right is reserved to reject any subscription, in whole or
in part, and to allot less than the amount of bonds applied for and to
close the subscriptions at any time without notice; the Secretary of the
Treasury also reserves the right to make allotment in full upon applies
tions for smaller amounts, 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 allotment will be publicly announced.
PAYMENT

Payment at par and accrued interest for any bonds allotted must
be made on or before June 15, 1931, or on later allotment.

After allot­

ment and upon payment Federal Reserve Banks may issue interim receipts
pending delivery of the definitive bonds.

Any qualified depositary will

be permitted to make payment by credit for bonds allotted to it for itself
and its customers up to any amount for which it shall be qualified in
excess of existing deposits, when so notified by the Federal Reserve Bank
of its district.
Treasury certificates of indebtedness of Series TJ-1931 and
TJ2-1931, both maturing June 15, 1931, will be accepted at par in pay­
ment for any Treasury bonds of the issue now offered which shall be
subscribed for andallotted, with an adjustment of the interest accrued,
if any, on the bonds so paid for.

/A

-

6-

GENERAL IRONISIONS

As fiscal agents of the United States, Federal Reserve Banks
are authorized and requested to receive subscriptions and to make al­
lotments on the basis and up to the amounts indicated by the Secretary
of the Treasury to the Federal Reserve Banks of the respective districts.
Any further information uhich 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 amenda­
tory rules and regulations governing the offering.

f.

TREASURY DEPARTMENT

FOR IMMEDIATE RELEASE,
Thursday, June 4, 1931.

STATEMENT BY SECRETARY MELLON.

Secretary of the Treasury Mellon announced that subscriptions
for the offering of 3-l/8 per cent Treasury Bonds of 1946-49 closed
at the close of business last night, Wednesday» June 3rd.

Sub­

scriptions received by the Federal Reserve Banks and the Treasury
Department through the mails up to 10 o*clock this morning will
be considered as having been received before the close of the
subscription books.
Preliminary reports received from the Federal Reserve Banks
show that total subscriptions aggregate over $6,000,000,000.

An­

nouncement of the actual amount of subscriptions and of the basis
of allotment will be made within a few days, in all probability
for publication Saturday morning, June 6th.

TREASURY DEPARTMENT

FOR IMMEDIATE RELEASE
JUNE 5, 1931.

The Secretary of the Treasury announces the selection of
Peterson and Johnson» architects of Rockford, 111., with BenJ*
H. Marshall, Wilmette, 111.» as consultant, for architectural
services in connection with the proposed Post Office Building,
Rockford, 111.

The Secretary of the Treasury announces the selection of
Conrad and Cummings, Associated Architects, Binghamton., N. Y.,
with Lorimer Rich, 101 Park Ave., New York City, as consultant,
for architectural services in connection with the proposed
Post Office & Courthouse Building, Binghamton, N. Y.

FOR RELEASE, MORNING PAPERS,
Saturday, June 6, 1931.

treasury department

Secretary Mellon to-day announced that the total amount of subscrip­
tions received for 3-l/8 per cent Treasury Bonds of 1946-49* dated June 15,
1931, was $6,315,524,500.

Of this amount, $572,106,500 represented exchange

subscriptions in payment for which Treasury Certificates of indebtedness
maturing June 15, 1931, were tendered.

Such exchange subscriptions were

allotted 57 per cent, or about $326,000,000.

Allotments on cash subscrip­

tions were made as follows:
Subscriptions in amounts not exceeding $10,000 for any one subscriber
were allotted 30 per cent, but not less than $50 for any one subscriber,
subscriptions in amounts over $10,000 but not exceeding $100,000 for any
one subscriber were allotted 20 per cent, but not less than $3,000 for any
one subscriber; subscriptions in amounts over $100,000 but not exceeding
$1,000,000 for any one subscriber were allotted 10 per cent, but not less
than $20,000 for any one subscriber;

subscriptions in amounts over $1,000,000

but not exceeding $25,000,000 for any one subscriber were allotted 7 per cent
but not less than $100,000 for any one subscriber;
over $25,000,000 but not

subscriptions in amounts

exceeding$l00,000,000 for any one subscriber were

allotted 4 per cent, but not less than $1,750,000 for any one subscriber; and
subscriptions in amounts over $100,000,000 for any one subscriber were al­
lotted 3 per cent, but not less than $4,000,000 for any one subscriber.
Further details as to subscriptions and- allotments by Federal Reserve
Districts will be announced when final reports are received from the Federal
Reserve Banks*

TREASURY DEPARTMENT

EOR IMMEDIATE RELEASE,
Saturday, June 6, 1931.

STATEMENT BY SECRETARY MELLON
Secretary Mellon announced today that hereafter coupon "bonds in the
denomination of $100,000 will he available for three outstanding Liberty
issues, first 3i!s, first Converted 4j*s, and fourth 4i*s, and in addition
coupon bonds of the $5,000 and $10,000 denominations will be available
for the first 3^»s.

These denominations, of course, will be issued only

on exchange upon the surrender of a like face amount of other bonds of
the same issue.
The Secretary stated that the several series of "Treasury Bonds"
issued since 1922 for refunding purposes included the denomination of
$100,000, and accordingly the additional denominations now provided
for "Liberty Bonds" will accord to holders of the latter the same
convenience heretofore accorded to holders of "Treasury Bonds".

The

new denominations $5*000 and $10,000 now authorized for first 3^ s will
bring this issue into line with other issues of Liberty bonds and Treasury
bonds.

TREASURY DEPARTMENT

EOR RELEASE, MORNING PAPERS,
Monday, Juno 8, 1931.

STATEMENT BY SECRETARY MELLON

The Secretary of the Treasury announces that all 3-1/2 per
cent Treasury notes of Series C-1930-32 have been called for redemp­
tion on December 15, 1931, on which date the principal of any such
notes then outstanding will be payable, together with interest then
accrued thereon.

Accordingly, interest on all 3-1/2 per cent Treasury

notes of Series C-1930-32 will cease on said redemption date, December
15, 1931.
The Series C-1930-32 3-1/2 per cent notes were issued on
January 16, 1928, and were made redeemable on six months* notice on
any interest payment date on and after December 15, 1930.

Of the

$607,399,650 originally issued, there remain outstanding about
$451,000,000.
The text of the official circular calling the notes for
redemption follows:

-2-

To Holders of 3j|$ Treasury Notes of Series C-1930-32i
1.

Call for Redemption. - Public notice is hereby given

that, in accordance with the terms of their issue and pursuant to
the provisions of Treasury Department Circular No. 392, dated January
9, 1928, all of the 3g$ Treasury notes of Series C-1930-32, which by
their terms were made redeemable on arid after December 15, 1930, are
called for redemption on December 15, 1931, on which date the principal
of any such notes then outstanding will be payable, together with the
interest then accrued thereon.

Interest on all 3-|Treasury notes of

Series C-1930-32 will cease on said redemption date, December 15, 1931.
2.

Presentation for redemption on or after December 15, 1931.-

All 3-|$ Treasury notes of Series C-1930-32 should be presented and
surrendered for redemption to any Federal Reserve Bank or, branch, or to
the Treasurer of the United States at Washington, D. C.

The notes must

be delivered in every case at the expense and risk of the holder, and
should be accompanied by appropriate written advice.
Facilities for transportation of the notes by registered mail
insured may be arranged between incorporated banks and trust companies
end the Federal Reserve Banks, and holders may take advantage of such
arrangements, when available, utilizing such incorporated banks and
trust companies as their own agents.

Incorporated banks and trust com­

panies are not agents of the United States under this circular.

„

\
\

-3-

3.

Interest coupons. - Interest coupons dated December 15,

1931, should be detached and collected in regular course when due.
Coupons dated June 15, 1932, end December 15, 1932, must be attached
to the notes when presented.

In the event that any notes are presented

for redemption with the June 15, 1932, or December 15, 1932 coupons
detached, the notes will nevertheless be redeemed, but the full face
amount of any such missing coupons will be deducted.
4.

Any further information which may be desired as to the

redemption of 3’
tj$> Treasury notes of Series C-1930-32 may be obtained
from the Commissioner of the Public Debt, Treasury Department,
Washington, D. C . , or from any Federal Reserve Bank or branch.

The

Secretary of the Treasury may at any time or from time to time pre­
scribe supplemental or amendatory rules and regulations governing
the matters covered by this circular.

FOR IMMEDIATE RELEASE
TUESDAY, JUNE 9, 1931

TREASURY DEPARTMENT

Acting Secretary Mills today announced that the total amount of*
subscriptions received for 3-l/8 per cent Treasury Bonds of 1946-49, dated
Jime 15, 1931, was $6,315,524,500. Of this amount, $572,106,500 repre­
sented exchange subscriptions in payment for which Treasury Certificates
of Indebtedness maturing June 15, 1931, were tendered. Such exchange
subscriptions were allotted 57 per cent, or $326,110,,300, Allotments o
cash subscriptions were made on a graduated scale.
Subscriptions and allotments were divided among the several Federal
Reserve Districts and the Treasury as follows:
Federal Reserve
District

Total Exchange
Subscriptions
Received

Total Cash
Subscriptions
Received

Total
Subscriptions
Received

Boston
New York
Philadelphia
Cleveland
Richmond
Atlanta
Chicago
St. Louis
Minneapolis
Kansas City
Dallas
San Francisco
Treasury

$ 15,472,500
379,843,000
19.961.000
14.431.000
3.980.500
3.995.500
76.387.000
35.592.000
4.468.000
4.990.500
9.229.500
3.716.500
39,500

$ 390,097,550
2,455,702,100
491.167.250
420.162.650
194.848.650
186,677,750
693,453,700
82,696,700
46,071,400
114.090.150
128.641.150
537.387.250
2,421,700

$ 405,570,050
2,835,545,100
511.128.250
434.593.650
198,829,150
190.673.250
769.840.700
118.288.700
50,539,400
119.080.650
137.870.650
541,103,750
2.461,200

Total

$572,106,500

$5,743,418*000

$6,315,524,500

Federal Reserve
District

Allotted on
Exchange
Subscriptions

Allotted on
Cash
Subscriptions

Total
Allotted

Boston
New York
Philadelphia
Cleveland
Richmond
Atlanta
Chicago
St, Louis
Minneapolis
Kansas City
Dallas
San Francisco
Treasury

$ 8,819,400
216,511,250
11,377,950
8,226*300
2,269,050
2.277.400
43,542,000
20,287,500
2.551.000
2,845,700
5.261.400
2,118,750
,,22,600

$ 33,361,200
170,093,500
45,122,050
38,421,550
31.754.850
27,270,300
68.381.700
11.129.350
6,466,000
12.892.850
17.525.350
32.502.700
378,650

$ 42,180,600
386,604,750
.56,500,000
46.647.850
34,023,900
29,547,700
111,923,700
31.416.850
9,017*000
15,738,550
22,786,750
34,621,450
401,250

Total

$326,110,300

$495,300,050

$821,410,350

TREASURY DEPARTMENT

POR IMMEDIATE RELEASE
June 15, 1931.

The Treasury has received payments amounting to $111,835,549*53 due
June 15, 1931, from the following foreign governments on account of their
funded indebtedness to the United States, of which $19,962,525 was for
account of principal and $91,873,024.53 for account of interest.

All

payments were received in cash.

$ 4,050,000.00
Czechoslovakia......... . •

1,500,000.00
-

Interest
cn
CO
CJl
o
o
o
•
o
o

Principal

$ i,

246,990.19
129,060.00

1,350,000.00

19,,325,000.00

Great Britain . . . . . . . .

-

65 ,970,000.00

Hungary

-

28,628.40

12,100,000.00
37,525.00
-

1 ,260,625.00
103,337.. 84
93,528.10
3 ,090,855.00

700,000.00

-

225,000.00

-

$19,962,525.00

$91,873,024.53

Of the principal payments received, the sum of $18,766,906.69 was for
account of the obligations originally acquired for cash advanced under the

— 2—

authority of the Liberty bond acts.

Under the terms of these acts all

such cash payments of principal must be applied to debt retirement.

The

above-mentioned amount has been applied to the Treasury certificates
maturing today*

The balance of the payments amounting to $93,068,642 .84

is available to meet current expenditures of the Government,

TREASURY DEPARTMENT

EOR RELEASE, MORNING PAPERS,
Thursday, June 25, 1931.

STATEMENT BY ACTING SECRETARY OE TEE TREASURY MILLS

Acting Secretary of the Treasury Mills gives notice that
tenders are invited for two series of Treasury bills to the aggregate
amount of $100,000,000, or thereabouts.

One series will be 91-day

bills and the other series will be 90—day bills.

Both series will

be sold on a discount basis to the highest bidders.

Tenders will be

received at the Eederal Reserve Banks, or the branches thereof, up to
two o’clock P. M . , Eastern Standard time, on June 29, 1931.

Tenders

will not be received at the Treasury Department, Washington.
The Treasury bills will, as stated, be issued in two series,
$50,000,000, or thereabouts, to be dated July 1, 1931, and maturing on
September 30, 1931, and $50,000,000, or thereabouts, to be dated July
2, 1931, and maturing on September 30, 1931.

Bidders will be required

to specify the particular series for which each tender is made.

The

face amount of the bills of both series will be payable without in­
terest on September 30, 1931.

The bills will be issued in bearer

form only, and in amounts or denominations of $1,000, $10,000, and
$100,000 (maturity value).
It is urged that tenders be made on the printed forms and
forwarded in the specie! envelopes which will be supplied by the Eederal
Reserve Banks or branches upon application therefor.

-

2-

No tender for an amount less than $1,000 will be considered.
Each tender must be in multiples of $1,000.

The price offered must

be expressed on the basis of 100, with not more than three decimal
places, e. g. , 99.125.

Erections must not bo used.

Tenders will be accepted without cash deposit from incorporated
banks and trust companies arid from responsible and recognized dealers
in investment securities.

Tenders from others must be accompanied by

a deposit of 10 per cent of the face amount of Treasury bills applied
for, unless the tenders are accompanied by an express guaranty of pay­
ment by an incorporated bank or trust company.
Immediately after the closing hour for receipt of tenders on
June 29, 1931, all tenders received at the Eederal Reserve Banks or
branches thereof up to the closing hour will be opened and public an­
nouncement of the acceptable prices for each series will follow os soon
as possible thereafter, probably on the following morning.

The Secretary

of the Treasury expressly reserves the right to reject any or all tenders
or parts of tenders, and to allot less than the amount applied for, arid
his action in any such respect shall be filial.

Any tender which does

not specifically refer to a particular series will be subject to rejec­
tion.

Those submitting tenders will be advised of the acceptance or

rejection thereof.

Payment at the price offered for Treasury bills

allotted must be made at the Eederal Reserve Bonks in cash or other
immediately available funds on July 1, 1931, for the bills allotted

-3-

bearing that date of issue, and on July 2, 1931, for bills allotted,
bearing the latter date of issue.
The Treasury bills will be exempt, as to principal and
interest, and any gain from the sale or other disposition thereof
«rill also be exempt, from all taxation, except estate and inheri­
tance taxes.

No loss from the sale or other disposition of the

Treasury bills shall be allowed as a deduction, or otherwise recog­
nized, for the purposes of any tax now or hereafter imposed by the
United States or any of its possessions.
Treasury Department Circular No. 418, as amended, dated
June 25, 1930, and this notice as issued by the Acting Secretary of
the Treasury, prescribe the terms of the Treasury bills and govern
the conditions of their issue.

Copies of the circular may be obtained

from any Federal Reserve Bank or branch thereof.

/p
FOR RELEASE, MORNING PAPERS,
TUESDAY, JUNE 30, 1931.

TREASURY DEPARTMENT

STATEMENT BY ACTING SECRETARY OE THE TREASURY MILLS

Acting Secretary of the Tregj&ury Mills announced, to—day that tenders for
$100*000¿000, or thereabouts, of two series of Treasury Bills which were of­
fered on June 25, 1931, were opened at the Federal Reserve Banks on June 29,1931,

91-day Bills
With respect to the offering of $50,000,000, or thereabouts, of 91—day
Bills dated July 1, 1931 and maturing on September 30, 1931, the total amount
applied for was $201,227,000. - The highest bid made was 99.848, equivalent to
an interest rate of about *60 per cent on an annual basis.

The lowest bid

accepted was 99.833, equivalent to an interest rate of about .66 per cent on
an annual basis.
accepted.

Only part of the amount bid for at the lattefc price was

The total amount of bids accepted for the 91-day Bills was

$50,026,000.

The average price of the Bills to be issued in this series is

about 99.840.

The average rate on a bank discount basis is about 5/8 of one

per cent.
90-day Bills
With respect to the offering of $50,000,000, or thereabouts, of 90-day
Bills dated July 2, 1931 and maturing on September 30, 1931, the total amount
applied for was $180,034,000.
an interest rate of

The highest bid made was 99.850, equivalent to

.60 per cent on an annual basis.

accepted was 99.835, equivalent to an interest rate of *
annual basis.

The lowest bid
• .66 per cent on an

Only part of the amount bid for at the latter price was accepted.

The total amount of bids accepted for the 90—day Bills was $50,050,000.

The

average price of the Bills to be issued in this series is about 99,842.

The

average rate on a bank discount basis is about 5/8 of one per cent.

FOR IMMEDIATE RELEASE*
Wednesday, July 1, l93li

TREASURY DEPARTMENT

The following announcement is made today hy Acting Secretary Mills:
A considerable reduction in Federal revenues during the fiscal
year 1931 and an increase in expenditures resulted in a deficit of
$903,000,000. as compared with a surplus of $184,000,000 for 1930.

Re­

tirements of United States obligations to meet sinking fund and other
statutory retirements chargeable against ordinary receipts totaled
$440,000,000. so that the deficit exclusive of debt retirement amounted
to $463,000,000.
$616,000,,000.

The total gross debt outstanding was increased by

As the general fund balance increased $153,000,000.

the net debt increased but $463,000,000.
The total ordinary receipts amounted to $3,317,000,000 which
represents a decline of $861,000,000 from 1930.

The decline reflects

for the most part the effect of the depression on certain major sources
of Federal revenue - income taxes and customs receipts.

Expenditures

chargeable against ordinary receipts aggregated $4,220,000,000. and
were $226,000,000. larger than for the previous year.

The increase

was due largely to expenditures for agricultural aid and relief, for
additional benefits to war veterans, and for the accelerated govern­
mental construction activities which more than offset other reductions.
In the annual report of the Secretary for the fiscal year 1930
the deficit for 1931 was estimated at $180,000,000. or $723,000,000.

-

2

-

less than the actual deficit shown for the year*

Total ordinary

receipts were $518*000*000# less than the $3,835,000*000* estimated
last autumn.

The discrepancy was due to the difficulty at that time

of measuring the severity and duration of the business depression and
the extent to which internal revenue and customs receipts would he
affected*

^Expenditures exceeded the estimated $4,015,000,000 by

$205,000,000. largely as a result of emergency expenditures.

RECEIPTS
The aggregate amount of customs and internal revenue receipts
during the year was $2,808,000,000* or $818,000,000* less than for
1930*

Income tax receipts totaled $1,860,000,000* which was

$551,000,000. less than during the fiscal year 1930*
Preliminary reports from collectors of internal revenue indicate
that current collections of corporate income taxes totaled about
$892,000,000. and were about $226,000,000. smaller than for last
year.

Corporation taxes during the six months January to June, 1931,

which were collected on 1930 incomes, showed a decline of $206,000,000*
or about 38 per cent from collections during the corresponding months
of 1930, reflecting reduction in taxable corporate income during a
period in which the volume of industry and trade and the level of
most commodity prices were rapidly declining.

This decrease in col­

lections was not, however, as marked as the reduction in incomes, due
to the higher rates affecting collections during the calendar year
1931 as compared with the preceding year.

/fj*

- 3 -

Current individual income tax collections were $731,000,000#
or $330,000,000. less than during the fiscal year 1930#

The con­

trast with former years is accentuated by the fact that during
the period of rising security prices taxable incomes were largely
augmented by profits from dealings in securities#

Collections

during the six months January to June, 1931, based on 1930 incomes,
declined $258,000,000# or about 49 per cent, from the corresponding
period of the preceding year#

This comparison is also affected

by rate changes during the period#
Collections of back taxes showed little change as compared with
the fiscal year 1930.
Indicated income tax receipts of $1,860,000,000# for the fiscal
year 1931 compare with an estimate of $2,190,000,000# in the annual
report of the Secretary for 1930.

The Treasury underestimated the

severity of the depression and the effects which the fall in prices
of commodities and of securities and the reduction in the volume
of business operations would have on taxable incomes#
Receipts from customs duties including tonnage tax were
$378,000,000. as compared with $587,000,000 in 1930.

The decline

is to be accounted for primarily by a reduced volume of imports,
and in the case of commodities subject to ad valorem duties by the
lower prices of imported commodities#

For the ten months ending

April 1931, the value of dutiable imports fell off 43 per cent
and of nondutiable 35 per cent as compared with a like period in the

fiscal year 1930*

It may "be observed in addition that the marked

increase in dutiable imports just prior to the close of the fiscal year
1930, when the new tariff act was passed, doubtless affects the com­
parison of customs collections for the two fiscal year periods.
Customs receipts Were $134,000,000. below estimates.

At the

time the estimates were made in the autumn it seemed not unlikely
that the turn of the year would witness some business improvement
with corresponding increase in imports and customs receipts.
Miscellaneous internal revenue and other miscellaneous receipts
were also somewhat smaller than for the preceding year.

Miscellaneous

internal revenue receipts totaled $569,000,000. or about $59,000,000.
less than for 1930.

Reports through May indicate that tobacco tax

receipts, which account for over 70 per cent of the total, were slightly
smaller than in 1930; documentary stamp taxes declined about $30,000,000
primarily as a result of smaller receipts from taxes on capital stock
transfers and on capital issues; estates taxes declined by about
$15,000,000.
Miscellaneous receipts other than internal revenue amounted to
$509,000,000. and were $43,000,000. less than in 1930, reflecting
declines in numerous items throughout the various government
departments.

EXPENDITURES
Total expenditures chargeable aginst ordinary receipts were
$4,220,000,000. as compared with $3,994,000,000. for 1930, an
increase of $226,000,000.

Expenditures chargeable

-5-

against ordinary receipts do not include loans on adjusted service
certificates;

these are made, as provided fay law, from assets in

trust funds administered fay the Treasury, especially from the ad­
justed service certificate fund#

Additional loans to veterans,

recently authorized, are reflected in expenditures chargeable
against ordinary receipts only to the extent of the additional
appropriation to the adjusted service certificate fund which was
made in order to increase the assets of the fund fay advancing the
regular appropriation for the fiscal year 1932#
The preliminary information now available concerning the details
of expenditures shows the following principal items of increase:
for the War Department an increase of $25,000,000, representing
chiefly the cost of construction activities for the most part in con­
nection with rivers and harbors, flood control, the Army housing
program, and increased outlay for the Air Corps;

for the Department

of Agriculture an increase of $119,000,000 reflecting largely
additional outlays for Federal aid highway construction and for emergency
relief in drought— stricken areas;

for the Federal Farm Board for addi­

tional net loans under the agricultural marketing act in the amount
of $41,000,000;

an increase in the expenditures of the Department

of Commerce of $7,000,000;
postal

deficiency;

an increase of $54r000,000 in the

and the advance appropriation in 1931 of

$112,000,000 for the adjusted service certificate fund which ordinarily
would have been appropriated in 1932#

Expenditures of the Veterans*

Administration included an increase of about $53,000,000 as a result
largely of liberalized provisions for military and naval compensation
to war veterans«

The more important reductions in expenditures

for 1931 as compared with the previous fiscal year include a decrease
of $20,000,000 for the Navy Department due to a reduction in armaments;
a decrease of $48,000,000 in interest paid on the public debt;

and a

reduction in tax refunds of $64,000,000.
Expenditures exceeded the budget estimates by $205,000,000. The
major increases included an excess of $93,000,000 over estimated
expenditures of the Department of Agriculture, due largely to
activities under agricultural relief measures and Federal aid to
highways; an increase of $91,000,000 over the estimated amount of
loans under the agricultural marketing act;
$35,000,000 in the postal deficiency;

an increase of

and the advance appropriation

of $112,000,000 to the adjusted service certificate fund which
ordinarily would have been made in the fiscal year 1932.

The

major decreases from the estimates included $59,000,000 for the
Treasury Department, $21,000*000 for the Navy Department, $28,000,000
for tax refunds, and $14,000,000 for Shipping Board loans.
PUBLIC DEBT
The fiscal year 1931 closed with the total gross public debt .at
$16,801,000,000 as compared with $16,185,000,000 on June 30, 1930.
The net balance in the general fund was $472,000,000 on June 30, 1931,
than

or $153,000,000 more/at the end of the preceding fiscal year.

The

not increase in the public debt less the increase in the general
fund balance was, therefore, $463,000,000 as compared with an actu|
increase in gross public debt outstanding of $616,000,000.
Retirements of public debt wore made as required by law,
$393,000,000 from the sinking fund and $48,000,000 from other
receipts.

These reductions were, however, more than offset by

borrowing which was made necessary by the excess of current expend­
itures of the government over its receipts.

Moreover, Treasury

borrowing in the open market was further increased as a result of
the liquidation of special United States securities held for account
of the adjusted service certificate fund in order to finance the
additional loans on Veterans' adjusted service certificates authorized
by recent legislation.

The securities thus disposed of, which totaled

$745,000,000, resulted in an increase in the volume of United States
securities held outside the Treasury in addition to the net increase
in the gross public debt*
Money market conditions during the year pemitted the issue of
new debt at unusually low rates with consequent reduction in annual
interest charges on the public debt.
during the periods

There were two Issues of bonds

Treasury bonds of 1941-43 issued on March 16, 1931,

in the amount of $594,000,000 and bearing interest at 3 3/8 per cent;
and Treasury bonds of 1946-49 issued on June 15, 1931, in the amount of
$821,000,000 and bearing interest at 3 l/8 per cent*

On March 15th

$1,109,000,000 of 3| per cent Treasury notes series A and B,

.

maturing in March and September, 1932, were called and retired.

The

rate of interest on the interest-hearing, debt on June 30, 1931
was 3.56 as compared with 3.80 on June 30, 1930«

Total interest

payments during the year were $611,000,000 or $48,000,000 less than
during 1930,

FOR RELEASE, MORNING PAPERS,
Monday, July 13, 1931.

TREASURY DEPARTMENT

STATEMENT BY ACTING SECRETARY OF THE TREASURY MILLS

Acting Secretary of the Treasury Mills gives notice that tenders
are invited for Treasury bills to the amount of $50,000,000, or there­
abouts.

Thoy will be 90-day bills; and will be sold on a discount basis

to the highest bidders.

Tenders will be received at the Federal Reserve

Banks, or the branches thereof, up to two o ’clock P. M., Eastern Standard
time, on Wednesday, July 15, 1931.

Tenders will not be received at the

Treasury Department, Washington.
The Treasury bills will be dated July 17,1931, and will mature
on October 15, 1931, and on the maturity date the face amount will be
payable without interest.

They will be issued in bearer form only, and

in amounts or denominations of $1,000, $10,000, and $100,000 (maturity
value).
It is urged that tenders be made on the printed forms and for­
warded in the special envelopes which will be supplied by the Federal
Reserve Banks or branches upon application therefor.
No tender for an amount less than $1,000 will be considered.
Each tender must be in multiples of $1,000.

The price offered must be

expressed on the basis of 100, with not more than three decimal places,*
e. g., 99.125.

Fractions must not be used.

7
-

2-

Tenders will be accepted without cash deposit from incorporated
banks and trust companies and from responsible and recognized dealers
in investment securities.

Tenders from others must be accompanied by

a deposit of 10 per cent of the face amount of Treasury bills applied
for, unless the tenders are accompanied by an express guaranty of pay­
ment by an incorporated bank or trust company.
Immediately after the closing hour for receipt of tenders on
July 15, 1931, all tenders received at the Federal Reserve Banks or
branches thereof up to the closing hour will be opened arid public an­
nouncement of the acceptable prices will follow as soon as possible
thereafter, probably on the following morning.

The Secretary of the

Treasury expressly reserves the right to reject any or all tenders or
parts of tenders, and to allot less than the amount applied for, and
his action in any such respect shall be final.

Those submitting

tenders will be advised of the acceptance or rejection thereof.

Pay­

ment at the price offered for Treasury bills allotted must be made at
the Federal Reserve Banks in cash or ether immediately available funds
on July 17, 1931.
The Treasury bills will be exempt, as to principal and interest,
and any gain from the sale or other disposition thereof will also be
exempt, from all taxation, except estate and inheritance taxes.

No loss

from the sale or other disposition of the Treasury bills shall be allowed
as a deduction, or otherwise recognized, for the purposes of any tax now
or hereafter imposed by the United States or any of its possessions.

-3-

Treasury Department Circular No. 418, as amende3., dated June
25, 1930, and this notice as issued by the Acting Secretary of the
Treasury, prescribe the terms of the Treasury bills and govern the
conditions of their issue.

Copies of the circular may be obtained

from any federal Reserve Bank or branch thereof.

TREASURY DEPARTMENT

FOR IMMEDIATE RELEASE,
Wednesday, July 15, 1933*

STATEMENT BY ACTING- SECRETARY MILLS

Through the death of Robert G* Hand, the Commissioner of Accounts and
Deposits, the Government has lost a public servant of the finest type.
Mr, Hand had served in the Treasury Department for over thirty years, and
through successive assignments to the different offices in the Department
responsible for fiscal activities he had acquired an unrivaled knowledge
of the finances of our Government.

He rendered extraordinary service

during the period of war and post-war financing.

In the important position

which he had held for eleven years he was responsible for much of the
technical work in connection with the fiscal operations of the Government,
He had broad knowledge and sound judgment*

In all matters relating to

Government financing we all looked to him for guidance and counsel.
Devotion to duty and a high ideal of public service were the guiding
principles of his life.

His untimely death was due to a nervous breakdown

which unquestionably resulted from overwork and the inability of a frail
tody to stand the demands of an indomitable spirit.

In his death the

Treasury has suffered an irreparable loss and those of us who worked with
him a loyal and devoted friend.

POR RELEASE, MORNING PAPERS,
THURSDAY, JULY 16, 1931,

TREASURY DEPARTMENT

STATEMENT BY ACTING SECRETARY MILLS

Acting Secretary of the Treasury Mills announced today
that the tenders for $50,000,000, or thereabouts, of 90-day
Treasury Bills dated July 17, 1931, and maturing October 15,
1931, which were offered on July 13, 1931, were opened at the
Federal Reserve Banks on July 15, 1931*
The total amount applied for was $209,314,000*

The

highest bid made was 99,898, equivalent to an interest rate of
about 0*41 per cent on an annual basis.

The lowest bid

accepted was 99,875, equivalent to an interest rate of 1¡2 of
one per cent on an annual basis.
accepted was $51,200,000*
to be issued is 99.878,

The total amount of bids

The average price of Treasury Bills
The average rate on a bank discount

basis is about 0.49 per cent.

TREASURY DEPARTMENT

FOR IMMEDIATE RELEASE,
SATURDAY, JULY 18, 1931.

Statement by Acting Secretary Mills.

The position of Commissioner of Accounts and Deposits, recently
vacated "by the untimely death of Mr. Robert G-. Hand, has been filled
by the promotion of Mr. Daniel W. Bell, formerly Assistant Commissioner
of Accounts and Deposits*

Mr. Bell*s position has been filled by the

promotion of Mr. Edward F. Bartelt, formerly Chief of the Division of
Bookkeeping and Warrants*

:Mr* Andrew M. Smith, formerly Assistant

Chief of the Division of Bookkeeping and Warrants, has been appointed
Chief of the Division to succeed Mr. Bartelt, and Mr. Joseph Greenberg,
formerly Chief of the Section of Budget and Special Deposit Matters,
Division of Bookkeeping and Warrants, has been promoted to succeed
Mr. Smith as Assistant Chief of that Division.
In order that the services of the accountants in the Section of
Surety Bonds, Division of Appointments, may be available to the Com-»
missioner of Accounts and Deposits, the transfer of the administrative
supervision of that Section from the Chief of the Division of Ap*“
pointments to the Commissioner of Accounts and Deposits has been
ordered.

TREASURY DEPARTMENT

FOR RELEASE, MORNING PAPERS,
Wednesday, July 22, 1931.

STATEMENT BY ACTING SECRETARY OF THE TREASURY MILLS

The Secretary of the Treasury gives notice that tenders are
invited for Treasury bills to the amount of $50,000,000, or there­
abouts.

They will be 91-aay bills; and will be sold on a discount

basis to the highest bidders.

Tenders will be received at the Federal

Reserve Bonks, or the branches thereof, up to two o ’clock P. M . ,
Eastern Standard time, on Friday, July 24, 1931.

Tenders will not be

received at the Treasury Department, Washington.
The Treasury bills will be dated July 27, 1931, and will mature
on October 26, 1931, and on the maturity date the face amount will be
payable without interest.

They will be issued in bearer form only, and

in amounts or denominations of $1,000, $10,000, and $100,000 {maturity
value)•
It is urged that tenders be made on the printed forms and for­
ward ed in the special envelopes which will be supplied by the Federal
Reserve Bonks or branches upon application therefor.
No tender for an amount less than $1,000 will be considered.
Each tender must be in multiples of $1,000.

The price offered must be

expressed on the basis of 100, with not more than three decimal places,
e. g., 99.125.

Fractions must not be used.

Tenders will be accepted without cash deposit from incorporated
banks and trust companies and from responsible and recognized dealers
in investment securities.

Tenders from others must be accompanied by

-

2-

a deposit of 10 per cent of the face amount of Treasury bills applied
for* unless the tenders ore accompanied by an express guaranty of pay­
ment by an incorporated bank or trust company.
Immediately after the closing hour for receipt of tenders on
July 24, 1951, all tenders received at the Federal Reserve Banks or
branches thereof up to hhe closing hour will be opened and public an­
nouncement of the acceptable prices will follow as soon as possible
thereafter, probably on the following morning.

The Secretary of the

Treasury expressly reserves the right to reject any or all tenders or
parts of tenders, and to allot less than the amount applied for, and
his action in any such respect shall be final.

Those submitting

tenders will be advised of the acceptance or rejection thereof.

Pay­

ment at the price offered for Treasury bills allotted must be made at
the Federal Reserve Banks in cash or other immediately available funds
on July 27, 1931.
The Treasury bills will be exempt, as to principal and interest,
and any gain from the sale or other disposition thereof will also be
exempt, from nil taxation, except estate and inheritance taxes.

No loss

from the sale or other disposition of the Treasury bills shall be allowed
as a deduction, or otherwise recognized, for the purposes of any tax now
or hereafter imposed by the United States or any of its possessions.
Treasury Department Circular No, 418, as amended, dated June
25, 1930, and this notice as issued by the Secretary of the Treasury,
prescribe the terms of the Treasury bills and govern the conditions of
their issue.

Copies of the circular may be obtained from any Federal

Reserve Bank or branch thereof.

TREASURY DEPARTMENT

FOR RELEASE", MORNING- PAPERS ,
SATURDAY, JULY 25, 1931.-

STATEMENT BY ACTING SECRETARY MILLS

Acting Secretary of the Treasury Mills announced today that
the tenders for $50,000,000, or thereabouts, of 91— day Treasury
Bills dated July 27, 1931, and maturing October 26, 1931,. which
were offered on July 22, 1931, were opened at the Federal Reserve
Banks on July 24, 1931,
The total amount applied for was $179,310,000.-

The highest

bid made was 99.900, equivalent to an interest rate of about 0.40
per cent on an annual basis.

The lowest bid accepted was 99.868,

equivalent to an interest rate of about 0.52 per cent on an annual
basis.

The total amount of bids accepted was $51,806,000.

average price of Treasury Bills to be issued is 99, 885.
rate on a bank discount basis is about 0.46 per cent.

The

The average

TOR RELEASE, MORNING PAPERS
Monday, July 27, 1931.

TREASURY DEPARTMENT

STATEMENT BY ACTING SECRETARY OF THE TREASURY MILLS

The Secretary of the Treasury gives notice that tenders are
invited for Treasury bills to the amount of $50,000,000, or there*
abouts.

They will be 91-day bills; and will be sold on a discount

basis to the highest bidders.

Tenders will be received at the Federal

Reserve Banks, or the branches thereof, up to two o ’clock p. m . ,
Eastern Standard time, on Thursday, July 30, 1931.

Tenders will not

be received at the Treasury Department, Washington.
The Treasury bills will be dated August 3, 1931, and will
mature on November 2, 1931, and on the maturity date the face amount
will be payable without interest.

They will be issued in bearer form

only, and in amounts or denominations of $1,000, $10,000, and $100,000
(maturity value).
It is urged that tenders be made on the printed forms and forv/arded in the special envelopes which will be supplied by the Federal
Reserve Banks or branches upon application therefor.
No tender for an amount less than $1,000 will be considered.
Each tender must be in multiples of $1,000.

The price offered must be

expressed on the basis of 100, with not more than three decimal places,
e. g., 99*125.

Fractions mast not be used.

t

-S~

Tenders Trill be accepted without cash deposit from incorporated
banks and trust companies and from responsible and recognized dealers
in investment securities.

Tenders from others must be accompanied by

a deposit of 10 per cent of the face amount of Treasury bills applied
for, unless the tenders are accompanied by an express guaranty of pay­
ment by an incorporated bank or trust company.
Immediately after the closing hour for receipt of tenders on
July 50, 1931, all tenders received at the Federal Reserve Banks or
branches thereof up to the closing hour will be opened and public an­
nouncement of the acceptable prices will follow as soon as possible
thereafter, probably on the following morning.

The Secretary of the

Treasury expressly reserves the right to reject any or all tenders or
parts of tenders, and to allot less than the amount applied for,, and
his action in any such respect shall be final..

Those submitting

tenders will be advised of the acceptance or rejection thereof.

Pay­

ment at the price offered for Treasury bills allotted must be made at
the Federal Reserve Banks in cash or other immediately available funds
on August 3, 1931.
The Treasury bills will be exempt, as to principal and interest,
and any gain from the sale or other disposition thereof will also be
exempt, from all taxation, except estate and inheritance taxes.

No loss

from the sale or other disposition of the Treasury bills shall be allowed
as a deduction, or otherwise recognized, for the purposes of any tax now
or hereafter imposed by the United States or any of its possessions.

-3-

Treasury Department Circular No, 418, as amended, dated
June 25, 1930, and this notice as issued by the Secretary of the
Treasury, prescribe the terms of the Treasury bills and govern the
%
conditions of their issue.

Copies of the circular may be obtained

from any Federal Reserve Bank or branch thereof,

TREASURY DEPARTMENT

NOT TO BE RELEASED UNTIL DE­
LIVERED BY MR. MILLS, Y/HICH WILL
BE PROBABLY ABOUT 11:00 A. M . ,
FRIDAY, JULY 31, 1931.

Address By Acting Secretary of the Treasury Ogden L. Mills at the laying
of the cornerstone of the new "building for the United States Assay Office
at Old Slip and South Street, New York City, July 31, 1931.

We are laying the cornerstone of the new home for the United States Assay Of­
fice, a most important institution, established in 1853.
time it has occupied its present site on Y/all Street.

Prom 1854 to the present

This is a long period in the

life of New York City, which expands and transforms itself almost overnight.

It

is now moving because the old property has become too valuable for this particular
uso and a metal refinery is out of place in crowded Wall Street, particularly as
some of the neighboring tall buildings suffer somewhat from the fumes that are an
unavoidable incident to normal operations.

This new site offers equal facilities

to those doing business with the Assay Office, while it affords ample space for
future expansion,

Thera are, therefore, good business reasons for the disposal

of the old Assay Office and site and its relocation here, but it so happened that
the time for effecting this change coincided with the inauguration of a compre­
hensive building program undertaken by the Federal Government with a view to pro­
viding proper housing for all Federal activities.
This program is based on two very definite conceptions - first, that the
United States Government throughout the country should own rather than lease the
buildings necessary to carry on Federal activities, and, second, that provision
for an adequate Government plant in Washington affords an unrivaled opportunity
for carrying out on a magnificent scale the plans originally laid out for the de­
velopment of the National Capital.
plans can be carried out.
bilities.

The situation is such that these original

The Congress has had the vision to perceive the possi­

The genius of our best architects has been drafted to insure the

H

A //

- 2 -

successful completion of such a program*

WaThe
rndayBis not111
mBM
distant when those of

our citizens who visit Washington will see one of the finest and most attractive
capitals in the world.

This is as it should be*

government are entitled to an adequate setting*

The dignity and power of
Beautiful buildings not only

educate and inspire but they have a very distinct quality of impressiveness, as
any one who has obsorved the Parthenon at sunset will testify to.
All told, the Federal Government will expend about $700,000,000 on its
countrywide program, of which about $500,000,000 has «already been definitely
allocated to specific projects.

Projects representing an aggregate expenditure

of about $225,000,000 have either been completed, are under contract or have
reached the point of detailed specifications.

Projects calling for an additional

$190,000,000, approximately, are in the drawing stage, of which 78 are being
handled by private architects*
Our own State and City have not fared badly.

No less than 163 buildings

costing $84,000,000 have been recommended for New York State, while expenditures
of $47,000,000 are allocated to new buildings in New York City, in addition to
the building the cornerstone of which are are laying this morning.

They include

an addition to the Federal Building in Brooklyn; a large parcel post building to
be located between 9th and 10th Avenue and 29th and 30th Street; extensive re­
modeling of the old Appraiser1s Stores Building; a large annex to the postoffice
at the Pennsylvania Railroad Station; a new marine hospital on Staten Island;

a

Federal Courthouse to be located in the Civic Center, and the replacement of the
old City Hall fark postoffico building by a modern structure on a new site, thus
permitting the old site to revert to park purposes.
The last two items have a particular appeal.

The removal of the old City

Hall postoffice will not only eliminate an eyesore but permit a better appreciation
of the beauty of City Hall, while a monumental structure suitable for our Federal
Courthouse will not only lend greater dignity to the administration of justice but
add to the impressiveness of our Civic Center*

0

t-

y

- 3It is a great pleasure to be here to—day and to participate in this ceremony
for we in the Treasury Department have a very particular interest in the Assay
Office, which is one of our institutions, and take great pride in the carrying
out of the vast building program which has been entrusted to us#

EQR RELEASE, MORNING PAPERS,
FRIDAY, JULY 31, 1931,

TREASURY DEPARTMENT

STATEMENT BY ACTING SECRETARY MILLS
Acting Secretary of the Treasury Mills announced today that the
tenders for $60,000,000, or thereabouts, of 91-day Treasury Bills
dated August 3, 1931, and maturing November 2, 1931, which were offered
on July 27th, were opened at the Federal Reserve Banks on July 30th.
The total amount applied for was $221,171,000.

The highest

hid made was 99.896, equivalent to an interest rate of about 0.41
per cent on an annual basis.

The lowest bid accepted was 99.854,

equivalent to an interest rate of about 0.58 per cent on an annual
basis.

The total amount of bids accepted was $59,850,000.

average price of Treasury Bills to bo issued is 99.871.
rate on a bank discount basis is about 0.51 per cent.

The

The average

TREASURY DEPARTMENT

STATEMENT BY ACTING SECRETARY OF THE TREASURY MILLS

The Secretary of the Treasury gives notice that tenders are
invited for Treasury hills to the amount of $60,000,000, or there­
abouts#

They will he 91-day hills; and will he sold on a discount

basis to the highest bidders#

Tenders will he received at the Federal

Reserve Banks, or the branches thereof, up to two o’clock p# m. ,
Eastern Standard time, on Thursday, August 6, 1931#

Tenders will

not he received at the Treasury Department, Washington.
The Treasury hills will he dated August 10, 1931, and will
mature on November 9, 1931, and on the maturity date the face amount
will he payable without interest.

They will ho issued in hearer

form only, and in amounts or denominations of $1,000, $10,000, and
$100,000 (maturity value)#
It is urged that tenders he made on the printed forms and
forwarded in the special envelopes which will he supplied "by the
Federal Reserve Banks or branches upon application therefor#
No tender for an amount less than $1,000 will he considered#
Each tender must ho in multiples of $1,000#

The price offered must

he expressed on the basis of 100, with not more than three decimal
places., e# g., 99.125.

Fractions must not he used.

A/3

-

2-

Tondors will bo accepted without cash deposit from incor­
porated hanks and trust companies and from responsible and recognized
dealers in investment securities.

Tenders from others must ho ac-

comphniod by a deposit of 10 per cent of the face amount of Treasuryhills applied for, unless the tenders are accompanied hy an express
guaranty of payment hy an incorporated hank or trust company,
, Immediately after the closing hour for receipt of tenders
on August 6, 1931, all tenders received at the Federal Reserve Banks
or branches thereof up to the closing hour will ho opened and public
announcement of the acceptable prices will follow as soon as possible
thereafter, probably on the following morning.

The Secretary of the

Treasury expressly reserves the right to reject any or all tenders
or parts of tenders, and to allot less than the amount applied for,
and his action in any such rospoct shall ho final.

Those submitting

tenders will he advised of the acceptance or rejection thereof.
Payment at the price offered for Treasury hills allotted must he
made at the Federal Roservo Banks in cash or other immediately avail­
able funds on August 10, 1931,
The Treasury hills will he'exempt, as to principal and
interest, and any gain from the sale or other disposition thereof
will also he oxer.pt, from all taxation, except estate and inheri­
tance taxes,

Ro loss from the sale or other disposition of the

Treasury hills shall ho allowed as a deduction, or otherwise recog­
nized, for the purposes of any tax now or hereafter imposed hy the
United States or any of its possessions.

A/4

*v;'

-3~

Treasury Departnont Circular No. 418, as amended, dated
June 25, 1930, and this notice as issued by the Secretary of the
Treasury, prescribe the terns of the Treasury bills and govern the
conditions of their issue.

Copies of the circular nay be obtained

from any Federal Reserve Bank or branch thereof.

./

POR IMMEDIATE RELEASE,
TUESDAY, AUGUST 4, 1931

treasury department

Acting Secretary of the Treasury Mills has announced the resignation Of
Mr.- Harris F. Mires, Assistant to the Commissioner of Internal Revenue, ef-'
fective at the close of "business Saturday, August 8th.,

Mr*. Mires submitted

his resignation to the President early in June,, with the request that it "be
accepted as of June 30th, in order that he might return to the practice of
public accountancy.

In view, however, of the illness at that time of Com­

missioner Burnett, Mr. Mires consented to remain at his post until Mr* Burnetts
return.

The regret of the Treasury at Mr. Mires* resignation was expressed

in a letter from Secretary Mellon to Mr. Mires under date of June

6, in

which the Secretary commended him for the loyal and effective service which
he has rendered the Department.,
Mr.. Mires has served in the Bureau of Internal Revenue since January,
1920, and was appointed Assistant' to the Commissioner "by President Cooliage on
May 16,1928.

As Assistant to the Commissioner he ranked next to the Commis­

sioner in the supervision of administrative and fiscal affairs of the Bureau
of Internal Revenue.
The Acting Secretary further announced that Mr. Ralph E. Smith, Head of
the Civil Division, Office of the General Counsel, Bureau of Internal Revenue,
has been appointed to succeed Mr. Mires as Assistant to the Commissioner*.

Mr.

Smith is a native of Wisconsin, and a graduate of the College and Law School
of Wisconsin University.

From 1903 to 1925, he was engaged in the general

practice of law at Merrill, Wisconsin.

From 1911 to 1915, he was a member

and for three years president of the Wisconsin State Board of Control, having
charge of penal and charitable institutions*

In 1925 he was appointed a

Special Attorney in the General Counsel* s office and assigned to the Civil
Division.,

In November 1930 he was appointed Head of that Division*

ECR RELEASE, MORNING PAPERS,
FRIDAY, AUGUST 7, 1931.

TREASURY DEPARTMENT

STATEMENT BY ACTING SECRETARY MILLS

Acting Secretary of the Treasury Mills announced today
that the tenders for $60,000,000, or thereabouts, of 91—day
Treasury Bills dated August 10, 1931, and maturing November 9,
1931, which were offered on August 3rd, were opened at the
Federal Reserve Banks on August 6th.
The total amount applied for was $200,798,000.

The

highest bid made was 99.878, equivalent to an interest rate
of about 0.48 per cent on an annual basis.

The lowest bid

accepted was 99.846, equivalent to an interest rate of about
0.61 per cent on an annual basis.

Only part of the amount

bid for at the latter price was accepted.
of bids accepted was $60,005,000.

The total amount

The average price of

Treasury Bills to be issued is 99.858.

The average

on a bank discount basis is about 0.56 per cent*

rate

TREASURY DEPARTMENT

FOR RELEASE, MORNING- PAPERS,
Monday, August 10, 1931.

STATEMENT BY ACTING SECRETARY OE THE TREASURY MILLS

The Secretary of the Treasury gives notice that tenders are
invited for Treasury "bills to the amount of $60,000,000, or there­
abouts.

They will be 91-day bills; and will be sold on a discount

basis to the highest bidders.

Tenders will be received at the Federal

Reserve Banks, or the branches thereof, up to two o ’clock p. m . ,
Eastern Standard time, on Thursday, August 13, 1931.

Tenders will not

be received at the Treasury Department, Washington.
The Treasury bills will be dated August 17, 1931, and will
mature on November 16, 1931, and on the maturity date the face amount
will be payable without interest.

They will be issued in bearer form

only, and in amounts or denominations of $1,000, $10,000, and $100,000
(maturity value).
It is urged that tenders be made on the printed forms and for­
warded in the special envelopes which will be supplied by the Federal
Reserve Banks or branches upon application therefor.
No tender for an amount less than $1,000 will be considered.
Each tender must be in multiples of $1,000.

The price offered must be

expressed on the basis of 100, with not more than three decimal places,
e. g. , 99.125.

Fractions must not be used.

-

2-

Tenciers will be accepted without cash deposit from incorporated
banks and trust companies and from responsible, and recognized dealers
in investment securities.

Tenders from others must be accompanied by a

deposit of 10 per cent of the face amount of Treasury bills applied for,
unless the tenders are accompanied by an express guaranty of payment by
an incorporated bank or trust company.
Immediately after the closing hour for receipt of tenders on
August 13, 1931, all tenders received at the Federal Reserve Banks or
branches thereof up to the closing hour will be opened and public an­
nouncement of the acceptable prices will follow as soon as possible
thereafter, probably on the following morning.

The Secretary of the

Treasury expressly reserves the right to reject any or all tenders or
parts of tenders, and to allot less than the amount applied for, and
his action in any such respect shall be final.

Those submitting tenders

will be advised of the acceptance or rejection thereof. - Payment at the
price offered for Treasury bills allotted must be made at the Federal
Reserve Banks in cash or other immediately available funds on August
17, 1931.
The Treasury bills will be exempt, as to principal and interest,
and any gain from the sale or other disposition thereof will also be
exempt, from all taxation, except estate and inheritance taxes.

No loss

from the sale or other disposition of the Treasury bills shall be allowed
as a deduction, or otherwise recognized, for the purposes of any tax now
or hereafter imposed by the United States or any of its possessions.

-3-

Treasury Deportiaent Circular No. 418, as amended, dated
June 25, 1930, and this notice as issued by the Secretary of the
Treasury, prescribe the terns of the Treasury bills and govern the
conditions of their issue.

Copies of the circular may be obtained

from any Federal Reserve Bank or branch thereof.

TREASURY DEPARTMENT

FOR RELEASE, MORNING- PAPERS,'
FRIDAY, AUGUST 14, 1931.

STATEMENT BY ACTING SECRETARY BALLANTINE

Acting Secretary of the Treasury Ballantine announced today
that the tenders for $60,000,000, or thereabouts, of 91-day
Treasury Bills dated August 17, 19-31, and maturing November 16,
1931, which were offered on August 10th, were opened at the
Federal Reserve Banks on August 13th.
The total amount applied for was $211,160,000.

The

highest bid made was 99.870, equivalent to an interest rate of
aoout 0.51 per cent on an annual basis.

The lowest bid accepted

was 99.833, equivalent to an interest rate of about 0.66 per cent
on an annual basis.

Only part of the amount bid for at the

latter price was accepted.
$60,280,000.
is 99.841.

The total amount of bids accepted was

The average price of Treasury Bills to be issued
The average rate on a bank discount basis is about

0.63 per cent.

EOR RELEASE, MORNING PAPERS,
Monday, August 17, 1931.

TREASURY DEPARTMENT

STATEMENT BY ACTING SECRETARY OE THE TREASURY BALLANTINE

The Secretary of the Treasury gives notice that tenders are
invited for Treasury bills tc the amount of $60,000,000, or thereabouts.
They will be 91-day bills; and will be sold on a discount basis to the
highest bidders.

Tenders will be received at the Eederal Reserve Banks,

or the branches thereof, up to two o’clock p. su, Eastern Standard tine,
on Thursday, August 20, 1931.

Tenders will not be received at the

Treasury Department, Washington.
The Treasury bills will be dated August 24, 1931, and will
mature on November 23, 1931, and on the maturity date the face amount
will be payable without interest.

They will be issued in bearer form

only, and in amounts or denominations of $1,000, $10,000, and $100,000
(maturity value).
It is urged that tenders be made on the printed forms and for­
warded in the special envelopes which will be supplied by the Eederal
Reserve Banks cr branches upon application therefor.
No tender for an amount less than $1»000 will be considered.
Each tender must be in multiples of $1,000.

The price offered must be

expressed on the basis of 100, with not mere than three decimal places,
e. g., 99.125.

Erections must not be used.

Tenders will be accepted without cash deposit from incorporated
banks and trust companies and from responsible and recegnized dealers in
investment securities.

Tenders from others must be accompanied by a

-

2-

deposit of 10 per cent of the face amount of Treasury bills applied for,
unless the tenders are accompanied by an express guaranty of payment by
an incorporated bank or trust company.
Immediately after the closing hour for receipt of tenders on
August 20, 1931, all tenders received at the Federal Reserve Banks or
branches thereof up to the closing hour will be opened and public an­
nouncement of the acceptable prices will follow as soon as possible
thereafter, probably on the following morning.

The Secretary of the

Treasury expressly reserves the right to reject any or all tenders or
parts of tenders, and to allot less than the amount applied for, and bis
action in any such respect shall be final.

Those submitting tenders will

be advised of the acceptance or rejection thereof.

Payment at the price

offered for Treasury bills allotted must be made at the Federal Reserve
Banks in cash or other immediately available funds on August 24, 1931.
The Treasury bills will be exempt, as to principal and interest,
and any gain from the sale or other disposition thereof will also be
exempt, from all taxation except estate and inheritance taxes.

No loss

from the sale or other disposition of the Treasury bills shall be allowed
as a deduction, or otherwise recognized, for the purposes of any tax now
or hereafter imposed by the United States or any of its possessions.
Treasury Department Circular No. 418, as amended, dated June 25,
1930, and this notice as issued by the Secretary of the Treasury, prescribe
the terms of the Treasury bills and govern the conditions of their issue.
Copies of the circular may be obtained from any Federal Reserve Bank or
branch thereof.

TREASURY DEPARTMENT

FOR RELEASE*. MORNING- PAPERS,
Friday, August 21, 1931. .

STATEMENT BY ACTING SECRETARY BALLANTINE

Acting Secretary of the Treasury Ballentine announced today
that the tenders for $60,000,000, or thereabouts, of 91—day
Treasury Bills dated August 24, 1931, and maturing November 23,
1931, which were offered on August 17, 1331, were opened at the
Federal Reserve Banks on August 20th*
The total amount applied for was $224,974,000.

The highest

bid made was 990877, equivalent to an interest rate of about 0*49
per cent on an annual basis*

The lowest bid accepted was 99«844,

equivalent to an interest rate of about 0*62 per cent on an annual
basis.

Only part of the amount bid for at the latter price was

accepted* . The total amount of bids accepted was $60,001,000. , The
average price of Treasury Bills to be issued is 99*852.•„

The

average rate on a bank discount basis is about 0.59 per cent.-,

TREASURY DEPARTMENT

FOR RELEASE, MORNING PAPERS,
Monday, August 24, 1931.

STATEMENT BY ACTING SECRETARY OF THE TREASURY BALLANTINE

The Secretory of the Treasury gives notice that tenders are
invited for Treasury hills to the amount of $80,000,000, or thereabouts.
They will be 91-day bills; and will be sold on a discount basis to the
highest bidders.

Tenders will be received at the Federal Reserve Banks,

or the branches thereof, up to two o ’clock p. n . , Eastern Standard tine,
on Thursday, August 27, 1931.

Tenders will not be received at the

Treasury Department, Washington.
The Treasury bills will be dated August 31, 1931, and will
mature on November 30, 1931, and on the maturity date the face amount
will be payable without interest.

They will be issued in bearer form

only, and in amounts or denominations of $>1,000, £10,000, and $>100,000
(maturity value).
It is urged that tenders be made on the printed forms and for­
warded in the special envelopes which will be supplied by the Federal
Reserve Banks or branches upon application therefor.
No tender for an amount less than £1,000 Will be considered.
Each tender must be in multiples of £l,000.

The price offered must be

expressed on the basis of 100, with not more than three decimal places,
e. g. , 99.125.

Fractions must net be.used.

Tenders will be accepted without cash deposit from incorporated
bonks and trust companies and from responsible and recognized dealers in
investment securities.

Tenders from others must be accompanied by a

-

2-

deposit of 10 per cent of the face mount of Treasury bills applied for,
unless the tenders are accompanied by an express guaranty of payment by
an incorporated bank or trust company.
Immediately after the closing hour for receipt of tenders on
August 27, 1931, all tenders received at the Federal Reserve Banks or
branches thereof up to the closing hour will be opened and public an­
nouncement of the acceptable prices will follow as soon as possible
thereafter, probably on the following morning.

The Secretary of the

Treasury expressly reserves the right to reject any or all tenders or
parts of tenders, and to allot less than the amount applied for, and his
action in any such respect shall be final.

Those submitting tenders will

be advised of the acceptance or rejection thereof.

Payment at the price

offered for Treasury bills allotted must be made at the Federal Reserve
Banks in cash or other immediately available funds on August 31, 1931.
The Treasury bills will be exempt, as to principal end interest,
and any gain from the sale or other disposition thereof will also be
exempt, from all taxation except estate and inheritance taxes.

No less

from the sale or other disposition of the Treasury bills shall be allowed
as a deduction, or otherwise recognized, for the purposes of any tax new
or hereafter imposed by the United States or any of its possessions.
Treasury Department Circular No. 418, as amended, dated June 25,
1930, and this notice as issued by the Secretary of the Treasury, prescribe
the terms of the Treasury bills and govern the conditions of their issue.
Copies of the circular may be obtained from any Federal Reserve Bank or
branch thereof.

TREASURY DEPARTMENT

FOR RELEASE, MORNIUG PAPERS,
Friday, August 28, 1931.

STATEMENT BY SECRETARY MELLON

Secretary of the Treasury Mellon announced to-day that
the tenders for $80,000,000, or thereabouts, of 91-day Treasury
Bills dated August 31, 1931, and maturing November 30, 1931,
which were offered on August 24, 1931, were opened at the
Federal Reserve Banks on August 27th.
The total amount applied for was $269,021,000.

Except

for one bid for $2,000 at the rate of about 0.50 per cent, the
highest bid made was 99.856, equivalent to an interest rate of
about 0.57 per cent on an annual basis.

The lowest bid

accepted was 99.838, equivalent to an interest rate of about
0.64 per cent on an annual basis.

Only part of the amount

bid for at the latter price was accepted.
of bids accepted was $80,019,000.

The total amount

The average price of

Treasury Bills to be issued is 99,844.

The average rate on

a bank discount basis is about 0.62 per cent.

TREASURY DEPARTMENT

EOR RELEASE, MORNING- PAPERS,
Monday, August 31, 1931.

STATEMENT BY SECRETARY MELLON

The Treasury is today offering for subscription at par and
accrued interest, through the Federal Reserve Banks, $800,000,000,
or thereabouts, of 3 per cent £0-24 year Treasury bonds and
$300,000,000, or thereabouts, of 1-1/8 per cent twelve-month certi­
ficates of indebtedness.
£he Treasury bonds will be dated and bear interest from
September 15, 1931, will mature on September 15, 1955, and will be
redeemable at the option of the United States on and after September
15, 1951.
The certificates of indebtedness will be a single series,
TS-1932, and will be for twelve months, dated and bearing interest
from September 15, 1931, and will mature on September 15, 1932.
Applications will be received at the Federal Reserve Banks.
The Treasury will accept in payment for the new Treasury bonds and cer­
tificates of indebtedness, at par, the 2-3/8 per cent Treasury certificates
of indebtedness of Series TS-1931 and the 1-1/2 per cent Treasury certifi­
cates of indebtedness of Series TS2-1931, which become due and payable
September 15, 1931.

Subscriptions for the twelve-month certificates of
I

indebtedness, in payment for which Treasury certificates of indebtedness
of Series TS-1931 and TS2-1931 are tendered, will be given jroferred

II

%

\ •'

-

allotment.

2-

No such preference will be given in the case of subscrip­

tions for the Treasury bonds.
The Treasury bonds will be issued both in bearer and registered
form, in denominations of $50, $100, $500, $1,000, $5,000, $10,000, and
$100,000.
ination.

The registered bonds will also be issued in the $50,000 denom­
The certificates of indebtedness will be issued in bearer form

only, in denominations of $500, $1,000, $5,000, $10,000, and $100,000,
and will have two interest coupons attached, payable March 15, 1932 and
September 15, 1932.
The certificates of indebtedness ?/ill be exempt, both as to
principal and interest, from all taxation, except estate and inheritance
taxes.

The Treasury bonds will 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,
^3- (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 (but not including any certificates of indebtedness issued
after June 17, 1929, because they were on that date made exempt from all
taxation except estate and inheritance taxes) authorized by the Act
approved September 24, 1917, as amended, the principal of ^iiich does not

AJ /
-3-

exceed in the aggregate 4-5,000, armed by any individurl, partnership,
association, or corporation, shall be exempt from the taxes provided
for in said clause (b) above.
About 4334,211,000 of 2-3/8 per cent certificates of indebted­
ness of Series TS-1931, about 0300,176,000 of 1-1/2 per cent certificates
of indebtedness of Series TS2-1931, and about (-30,000,000 in interest
payments on the public debt, become due and payable on September 15,
1931.
The texts of the official circulars follow:

-4-

THREE PER CENT TREASURY BONDS OF 1951-52

The Secretary of the Treasury invites subscriptions, at par and
accrued interest, from the people of the United States, for three per
cent Treasury bonds of 1951-55, of an issue of gold bonds of the United
States authorized by the Act of Congress approved September 24, 191V,
as amended.

The amount of the offering will be $800,000,000, or

thereabouts.
DESCRIPTION OE THE BONDS
The bonds will be dated September 15, 1931, and will bear interest
from that date at the rate of three per cent per annum, payable semi­
annually on March 15 and September 15 in each year until the principal
amount becomes payable.

The bonds will mature September 15, 1955, but

may be redeemed at the option of the United States on and after Septem­
ber 15, 1951, 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 denomina­
tions of $50, $100, $500, $1,000, $5,000, $10,000, $50,000, and $100,000.

-5-

Provisicn will be wade for the interchange of bonds of different denom­
inations arid 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) graduate
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 cr profits of individuals, partnerships, associations,
or corporations.

The interest on an amount of bonds and certificates

(but not including any certificates of indebtedness issued after June
17, 1929) authorized by said Act approved September 24, 1917, as amended,
the principal of which does net exceed in the aggregate 0 5 ,0 0 0 , owned
by any individual, partnership, association, cr corporation, shell be
exempt from the taxes provided for in said clause (b) above.
The bonds will be acceptable to secure deposits of public moneys,
but do not bear the circulation privilege and are net entitled to any
privilege of conversion.

The bonds will be subject to the general regu­

lations of the Treasury Department, new or hereafter issued, governing
United States bonds.
APPLICATION AND ^ALLOTMENT
Applications will be received at the Federal Deserve Banks, as
fiscal agents of the United States,

Banking institutions generally will

-

6-

hancle applications for Subscribers, but only the Federal Reserve Banks
afe authorized tc act as official agencies.
The right is reserved to reject any subscription, in whole or
in part, and to allot less than the amount of bonds applied for arid to
close the subscriptions at any time without notice; the Secretory of the
Treasury also reserves the right to make allotment in full upon appli­
cations for smaller amounts, to make reduced allotments upon, or to
reject, applications for larger amounts, and tc make classified allot­
ments 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 allotment will be publicly announced.
PAYMENT
Payment at par and accrued interest for any bonds allotted must
be made on or before September 15, 1931, or on later allotment.

After

allotment and upon payment Federal Reserve Banks may issue interim
receipts pending delivery of the definitive bonds.

Any qualified

depositary will be permitted to make payment by credit for bonds allotted
to it for itself and its customers up to any amount for which it shall
be qualified in excess of existing deposits, when so notified by the
Federal Reserve Bank of its district.
Treasury certificates of indebtedness of Series TS-1931 arid
TS2—1931, both maturing September 15, 1931, will be accepted at par in
payment for any Treasury bonds of the issue now offered which shall be
subscribed for and allotted, with an adjustment of the interest accrued,
if any, on the bonds so paid for.

GENERAL H aOVISICES

As fiscal agents of the United States, Federal Reserve Banks
are authorized and requested tc receive subscriptions and to make
allotments on the basis and up tc the amounts indicated by the Secretary
of the Treasury to the Federal Reserve Banks of the respective districts.
Any further information uhich may be desired as to the issue of
Treasury bonds under the provisions of this circular nay be obtained
upon application to a Federal Reserve Bank.

The Secretary of the Treasury

nay at any time, or from time to time, prescribe supplemental or amend­
atory rules and regulations governing the offering.

TREASURY CERTIFICATES OP BBEBTEDKESS
SERIES TS-1932

The Secretary cf 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 of Series TS-1932, dated and bearing
interest from September 15, 1931, payable September 15, 1932, With
interest at the rate of one and one-eighth per cent per annum, payable
semiannually.
Applications will be received at the Federal Reserve Banks.
Bearer certificates will be issued in denominations of &500,
spl,000, ^5,000, &10,000, and ^100,000.

The certificates will have

two interest coupons attached, payable March 15, 1932, and September
15, 1932.
The certificates cf said series shall be exempt, both as to
principal and interest, from all taxation (except estate and inheritance
taxes) now or hereafter imposed by the United States, any State, cr any
of the possessions of the United States, or by any local taxing auth­
ority.
The certificates 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 certificates.

The certi­

ficates cf this series will be acceptable to secure deposits of public
moneys, but will not bear the circulation privilege.

-9-

The right is reserved to reject any subscription and to allot
less than the amount of certificates applied for and to close the sub*
scriptions at any time without notice.

The Secretary of the Treasury

also reserves the right to make allotment in full upon applications for
smaller amounts, to make reduced allotments upon, or to reject, appli­
cations for larger amounts, and to make classified allotments and allot­
ments upon a graduated scale; and his action in these respects will be
final.

Allotment notices will be sent out promptly upon allotment,

arid the basis of the allotment will be publicly announced.
Payment at par and accrued interest for certificates allotted
must be made on or before September 15, 1931, 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.

Treasury

certificates of indebtedness of Series TS-1931 and TS2-1931, both
maturing September 15, 1931, 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 allot­
ments on the basis and up to the amounts indicated by the Secretary of
the Treasury to the Federal Reserve Banks of the respective districts.

TREASURY DEPARTMENT

FOR RELEASE, MORNING PAPERS,
Wednesday, September 3, 1931,

Secretary Mellon announced that subscriptions for the offering
of 1-1/8 per cent twelve-month Treasury Certificates of Indebtedness
of Series TS-1932, dated September 15, 1931, maturing September 15,
1932, closed at the close of business yesterday, Tuesday, September 1,
1931,

Subscriptions for the Certificates which did not reach a

Federal Reserve Bank or branch, or the Treasury Department, before
the close of business yesterday will not be considered.
The reports received from the twelve Federal Reserve Banks show
that for the offering of Certificates of Indebtedness, which was for
$300,000,000, or thereabouts, subscriptions aggregate over $1,200,000,000
Of these subscriptions, about $500,000,000 represent subscriptions in
payment for which Treasury Certificates of Indebtedness of Series TS—1931
and Series TS2-1931, both maturing September 15, 1931, were tendered.

In

accordance with the Treasury* s previous announcement that exchange sub­
scriptions would be given preferred allotment, the $500,000,000 in ex­
change subscriptions will be allotted about 60 per cent.

No allotment

will be made upon other subscriptions.
The subscription books for the $800,000,000 offering of 3 per cent
20-24 year Treasury Bonds of 1951-1955, in denominations ranging from
$50 upwards, will remain open until further notice.

The above announce­

ment with respect to the closing of subscription books relates only to
the 1—1/8 per cent Certificates of Indebtedness*

EOR RELEASE MORNING- PAPERS,
ERIDAY, SEPTEMBER 4, 1931.

TREASURY DEPARTMENT.

STATEMENT BY SECRETARY MELLON.

Secretary of the Treasury Mellon announced that the sub­
scription books for the offering of $800,000,000 three per
cent 20-24 year Treasury Bonds of 1951-1955 will close at
the close of business Saturday, September 5, 1931.
Announcement of the amount of subscriptions and the
basis of allotment will be made in all probabilty for
publication Wednesday morning, September 9th,

TREASURY DEPARTMENT

EOR RELEASE, MORNING- PAPERS,
Wednesday, September 9, 1931,

Secretary Mellon to-day announced that the total amount of sub­
scriptions received for three per cent Treasury Bonds of 1951-55,
dated September 15, 1931, was $940,559,550*

As previously announced,

subscriptions in payment for which Treasury Certificates of Indebted­
ness maturing September 15, 1931, were tendered, were treated as cash
subscriptions.

Allotments on all subscriptions were made as follows!

Subscriptions in amounts not exceeding $100,000 were allotted
in full.

Subscriptions in amounts over $100,000, but not exceeding

$500,000, were alloted 90 per cent, but not less than $100,000 on
any one subscription';

subscriptions in amounts over $500,000, but

not exceeding $1,000,000, were allotted 80 per cent, but not less than
$450,000 on any one subscription;

and subscriptions in amounts over

$1,000,000 were allotted 75 per cent, but not less than $800,000 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,
Thursday, September 10, 1931,

STATEMENT BY SECRETARY MELLON.
Secretary Mellon to-day announced the final subscription and allot­
ment totals, by Federal Reserve Districts, for the September 15th offering
of 3 per cent Treasury Bonds of 1951-55 and l-l/8 per cent Treasury Certifi
cates of Indebtedness of Series TS-1932.

3 PER CENT TREASURY BONDS OF 1951-55.
The total amount of subscriptions received for 3 per cent Treasury
Bonds of 1951-55, dated September 15, 1931, was $940,559,550.

Sub­

scriptions in payment for which Treasury Certificates of Indebtedness,
maturing September 15, 1931, were tendered were treated as cash subscrip­
tions,

All subscriptions were allotted on a graduated scale.

Federal Reserve
District

Total Subscriptions Received.

Total Subscriptions Allotted.

Boston
New York
Philadelphia
Cleveland
Richmond
Atlanta
Chicago
St. Louis
Minneapolis
Kansas City
Dallas
San Francisco
Treasury

$ 43,982,050
282,237,900
98,072,350
145,608,200
46,118,100
55,827,800
64,304,550
32,575,250
19,187,900
32,947*100
57.385.150
60.512.150
1.801.050

$ 39,375,050
228,950,850
80,100,000
121,633,200
42.605.600
51,032,800
60,286,550
29.762.600
17,771,000
30.^065*900
50.295.150
49.774.150
1.641.550

Total

$940,559,550

$803,294,400

2

1-1/8 PER GENT CERTIFICATES OF INDEBTEDNESS
OF SERIES TS-1932.

The total amount of subscriptions received for Treasury Certificates
of Indebtedness of Series TS-1932, dated September 15, 1931, maturing
September 15, 1932, was $1,251,196,000.

Of this amount, $523,786,000

represented exchange subscriptions in payment for which Treasury Certificates
of Indebtedness of Series TS-1931 and Series TS2-1931, both maturing
September 15, 1931, were tendered.
lotted 60 per cent.

Such exchange subscriptions were al-

All other subscriptions wore rejected.

Federal Reserve
District.

Total Subscrip­
tions Received.

Total Cash
Subscriptions
Received.....

Total Exchange
Subscriptions
Received*

Total Exchange
Subscriptions
Allotted.

Boston
Hew York
Philadelphia
Cleveland
Richmond
Atlanta
Chicago
St. Louis
Minneapolis
Kansas City
Dallas
San Francisco
Treasury

$

29,677,000
731,985,500
33,865,000
26,835,500
33,958,500
46,582,000
240,461,500
31,751,000
1,239,000
11,982,000
33,706,500
29,151,500
1.000

$ 25,586,000
404,329,500
23,045,000
19,160b500
30,008?500
39,232,000
114,706,500
20,716,500
866,500
4,414,500
30,229,500
15,115,000

$ 4,091,000
327,656,000
10,820,000
7,675,000
3,950,000
7,350,000
125,755,000
11,034,500
372,500
7,567,500
3,477,000
14,036,500
1.000

$ 2,455,000
196,597,000
6,492,000
4,605,500
2,370,000
4,410,000
75,455,000
6,620,000
223,500
4,540,500
2,088,000
8,422,000
1.000

$1,251,196,000

$727,410,000

$523,786,000

$314,279,500

Total

TREASURY DEPARTMENT

FOR RELEASE, MORNING PAPERS,
Thursday, September 24, 1931.

STATEMENT BY SECRETARY MELLON

The Secretary of the Treasury gives notice that tenders are
invited for Treasury bills to the amount of $100,000,000, or there­
abouts.

They will be 91—day billsj and will be sold on a discount

basis to the highest bidders.

Tenders will be received at the Federal

Reserve Barks, or the branches thereof, up to two o’clock p. m.,
Eastern Standard time, on Monday, September 28, 1931.

Tenders will

not be received at the'Treasury Department, Washington.
The Treasury bills will be dated September 30, 1931, and
will mature on December 30, 1931, and on the maturity date the face
amount will be payable without interest.

They will be issued in

bearer form only, and in amounts or denominations of $1,000, $10,000,
$100,000, $500,000, and $1,000,000 (maturity value).
It is urged that tenders be made on the printed forms
and forwarded in the special envelopes which will be supplied by
the Federal Reserve Banks or branches upon application therefor.
No tender for an amount less than $1,000 will be considered.
Eacn tender must be in multiples of $1,000.

Tho price offered must

bo expressed on the basis of 100, with not more than throe decimal
places, o. g., 99.125.

Fractions must not be used.

4 y?

~2-

Tenders will bo accepted without cash deposit from incor­
porated banks and trust companies and from responsible and recognized
dealers in investment securities*

Tenders from others mast be ac­

companied by a deposit of 10 per cent of the face amount of Treasury
bills applied for, unless the tenders are accompanied by an express
guaranty of payment by an incorporated bank or trust company*
Immediately after the closing hour for receipt of tenders on
September 28, 1931, all tenders received at the Federal Roserve Banks
or branches thereof up to the closing hour will be opened and public
announcement of the acceptable prices will follow as soon as possible
thereafter, probably on the following morning,.

The Secretary of the

Treasury expressly reserves the right to reject any or all tenders or
parts of tenders, and to allot loss than the amount applied for, and
his action in any such respect shall be final.

Those submitting

tenders will be advised of the acceptance or rejection thereof.

Pay­

ment at the price offered for Treasury bills allotted must bo made at
the Federal Reserve Banks in cash or other immediately available funds
on September 30, 1931.
The Treasury bills will be exempt, as to principal and
interest, and any gain from the sale or other disposition thereof
will also be exempt, from all taxation, except estate and inheritance
taxes.

Ho loss from the sale or other disposition of the Treasury

bills shall be allowed as a deduction, or otherwise recognized, for
the purposes of any tax now or hereafter imposed by the United States
or any of its possessions.

~3~

Treasury Department Circular No. 418, as amended, and
this notice prescribe the terms of the Treasury hills and govern
the conditions of their issue*

Copies of the circular may he

obtained from any Federal Reserve Bank or branch thereof*

TREASURY DEPARTMENT

EOR IMMEDIATE RELEASE,
Eriday, September 25, 1931*

STATEMENT IN REGARD TO STUDY MADE ON AUTOMOBILE PARKING
EOR THE TRIANGLE AREA.

The Board of Architectural Consultants of the Treasury
Department, which has been holding sessions for several days
past* had before it for consideration among other things, the
preliminary report of the engineers of the National Garages, Inc*.,,
engaged by the Treasury Department to make a study of automobile
parking as it is affected by the Triangle development in Washington*.
This report included a survey of present conditions, estimate
of future conditions and demands, the question of the extent to
which parking should be provided and the most advantageous loca­
tion for such parking as the Government may decide to furnish*,
Realizing that it may be some years before parking to the
ultimate necessity is reached, the report divides the problem
into several phases, the first to meet the immediate parking
requirements, and, in successive stages, the expansion necessary
as each succeeding year adds to the population of the Triangle
up to its ultimate figure*
The problem differs somewhat from
ordinary commercial conditions for several reasons, among which
are that the parking facilities must be so disposed that the
peak loads which occur within a relatively short space of time
morning and evening, can be adequately handled*
The report
expresses the opinion that this feature talcing into account
the necessity for avoiding over—congestion in the streets,
leads to the conclusion that the parking units should be kept
within very reasonable limits as to the number of cars,, thus
providing a number of relatively smaller units instead of a
very few large units*
The report also makes an analysis of the question of the
residential location of the homes of employes in relation to
the location of the Government buildings where they perform their
daily work, this question having a bearing on the ratio of auto­
mobile parking actually required, to the number of employes who
live within a reasonable distance of their place of work and
could therefore use traction lines and busses if necessary, as
against those whose homes are further distant and to whom the
use of automobiles is a great convenience in goind to and from
their work*

In general terms the report divides the facilities for
parking into two classes, namely parking spaces below ground,
and those erected above ground* Investigation by the engineers
has indicated to their satisfaction that one— story sub— surface
garages could, under some conditions be economically constructed
in certain areas where this is possible, while the garages con­
structed above ground may be multi-story buildings, though kept
however within restricted limits as to number of cars to avoid
over-concentration in any one unit.
In its final analysis the question of the extent to which
parking can be furnished to employes of the Government rests with
Congress, as the authorization for the construction of garages
was not included in the present authorizations under which the
buildings are being erected in the Triangle arear and the matter
will be presented at the proper time to Congress for its consid­
eration*
The general parking treated in the report is in any
case rcroplementary to the restricted official parking which is
being furnished for official cars in each of the buildings now
constructed in the Triangle as well as those under construction
and to be constructed in the future*

TREASURY DEPARTMENT

EOR RELEASE, MORNING PAPERS,
Tuesday, September 29, 1931.

STATEMENT BY SECRETARY MELLON.

Secretary of the Treasury

Mellon announced today that

the tenders for $100,000,000, or thereabouts, of 91-day Treasury
Bills dated September 30, 1931, and maturing December 30, 1931,
which were offered on September 24, 1931, were opened at the
Federal Reserve Banks on September 28th.
The total amount applied for was $213,103,000.

Except

for ono bid for $1,000 at the rate of about one-fifth of one
per cent, the highest bid made was 99.876, equivalent to an
interest rate of about 0.49 per cent on an annual basis.

The

lowest bid accepted was 99.647, equivalent to an interest rate
of about 1.40 per cent on an annual basis.
bids accepted was $100,761,000*
Bills to be issued is 99,692,

The total amount of

The average price of Treasury
The average rate on a bank dis­

count basis is about 1.22 per cent.

TREASURY DEPARTMENT

EOR RELEASE, MORNING PARERS,
Thursday, October 8, 1951.

STATEMENT BY SECRETARY MELLON

The Secretary of the Treasury gives notice that tenders are
invited for Treasury bills to the amount of $50,000,000, or there­
abouts.

They will be 90-day bills; and will be sold on a discount

basis to the highest bidders.

Tenders will be received at the

Federal Reserve Banks, or the branches thereof, up to two o Tclock
p. m. , Eastern Standard time, on Tuesday, October 13, 1931.

Tenders

will not be received at the Treasury Department, Washington.
The Treasury bills will be dated October 15, 1931, and will
mature on January 13, 1932, and on the maturity date the face amount
will be payable without interest.

They will be issued in bearer form

only, and in amounts or denominations of $1,000, $10,000, $100,000,
$500,000, end $1,000,000 (maturity value).
It is urged that tenders be made on the printed forms and
forwarded in the special envelopes which will be supplied by the
Federal Reserve Banks or branches upon application therefor.
No tender for an amount less than $1,000 will be considered.
Each tender must be in multiples of $1,000.

The price offered must

be expressed on the basis of 100, with not more than three decimal
places, e. g. , 99.125.

Fractions must not be used.

-

2-

Tonders will be accepted without cash deposit from incorpor­
ated banks and trust companies and from responsible and recognized
dealers in investment securities.

Tenders from others must be accoin-

pallied by a deposit of 10 per cent of the face amount of Treasury bills
applied for, unless the tenders are accompanied by an express guaranty
of payment by an incorporated bank or trust company.
Immediately after the closing hour for receipt of tenders an
October 13, 1931, all tenders received at the Federal Reserve Bante
or branches thereof up to the closing hour will be opened and public
announcement of the acceptable prices will follow as soon as possible
thereafter, proj^bly on the following morning.

The Secretary of the

Treasury expressly reserves the right to reject any or all tenders or
parts of tenders, and to allot less than the amount applied for, and
his action in any such respect shall be final.

Those submitting

tenders will be advised of the acceptance or rejection thereof.

Pay­

ment at the price offered for Treasury bills allotted must be made at
the Federal Reserve Banks in cash or other immediately available finds
on October 15, 1931.
The Treasury bills will be exempt, as to principal and interest,
and any gain from the sale or other disposition thereof will also be
exempt, from all taxation, except estate arid inheritance taxes.

No

loss from the sale or other disposition of the Treasury bills shall be
allowed as a deduction, or otherwise recognized, for the purposes of
any tax now or hereafter imposed by the United States or any of its
possessions.

*<
-3-

Treasury Department Circular No. 418, as amended, and this
notice prescribe the terms of the Treasury bills and govern the con­
ditions of their issue.

Copies of the circular may be obtained from

any Federal Reserve Bank or branch thereof.

TREASURY DEPARTMENT

FOR RELEASE, MORNING- PAPERS *
Wednesday, October 14, 1931.

STATEMENT BY SECRETARY MELLON

Secretary of the Treasury Mellon announced today that the
tenders for $50,000,000, or thereabouts * of 90~day Treasury Bills
dated October 15, 1931, and maturing January 13i 1932, which were
offered on October 8th, were opened at the Federal Reserve Banks
on October 13th,
The total amount applied for was $127,834^000,

Except for

three bids aggregating $304,000 at prices averaging about 1 per cent,
the highest bid made was 99.625, equivalent to an interest rate of
l~l/2 per cent on an annual basis.

The lowest bid accepted

was 99.313, equivalent to an interest rate of about 2—3/4 per cent
on an annual basis.

The total amount of bids accepted was $51,641,000

The average price of Treasury Bills to be issued is 99.404.
average rate on a bank discount basis is about 2—3/8 per cent.

The

TREASURY DEPARTMENT

EOR RELEASE, MORNING PAPERS
Saturday, October 17, 1931.

STATEMENT BY SECRETARY MELLON.

Secretary Mellon today announced that the gold notes
of the National Credit Corporation, created at the suggestion
of President Hoover, will be accepted by the Treasury as
collateral to secure any deposits of public moneys in deposi­
taries designated by the Secretary of the Treasury.
The notes will be accepted at the same collateral value
now accorded by the Treasury to commercial paper and bankers1
acceptances, which, under existing regulations governing de­
posits in special depositaries, are accepted at 90 per cent
of face value.
The Treasury regulations with respect to deposits of
public moneys will be amended accordingly.

TREASURY DEPARTMENT

EOR RELEASE, MORNING PAPERS,
Monday, October 19, 1931.

STATEMENT BY SECRETARY MELLON

The Secretary of the Treasury gives notice that tenders are
invited xor Treasury hills to the amount of $50,000,000, or thereabouts.
They will be 91-day bills; and will be sold on a discount basis to
the highest bidders.

Tenders will be received at the Eederal Reserve

Banks, or the branches thereof, up to two o^lock p. m . , Eastern
Standard time, on Thursday, October 22, 1931.

Tenders will not be

received at the Treasury Department, Washington.
The Treasury bills will be dated October 26, 1931, and will
mature on January 25, 1932, and on the maturity date the face amount
will be payable without interest.

[They will be issued in bearer

form only, and in amounts or denominations of $1,000, $10,000, $100,000,
$500,000, and $1,000,000 (maturity value).
It is urged that tenders be made on the printed forms and
forwarded in the special envelopes which will be supplied by the
Eederal Reserve Banks or branches upon application therefor.
No tender for an amount less than $1,000 will be considered.
Each tender must be in multiples of $1,000.

The price offered must

be expressed on the basis of 100, with not more than three decimal
places, e. g., 99.125.

Fractions must not be used.

Tenders will be accepted without cash deposit from incor­
porated banks and trust companies and from responsible and recognized

dealers in investment securities

Tenders from others must he accom­

panied by a deposit of 10 per cent of the face amount of Treasury hill
applied for, unless the tenders are accompanied by an express guaranty
of payment hy an incorporated hank or trust company.
Immediately after the closing hour for receipt of tenders
on October 22, 1931, all tenders received at the Federal Reserve Barks
or branches thereof up to the closing hour will he opened and public
announcement of the acceptable prices will follow as soon as possible
thereafter, probably on the following morning«

The Secretary of the

Treasury expressly reserves the right to reject any or all tenders or
parts of tenders, and to allot less than the amount applied for, and
his action in any such respect shall be final.

Those submitting

tenders will be advised of the acceptance or rejection thereof.

Pay­

ment at the price offered for Treasury bills allotted must be made at
the Federal Reserve Banks in cash or other immediately available funds
on October 26, 1931.
The Treasury bills \7ill be exempt, as to principal and
interest, and any gain from the sale or other disposition thereof will
also be exempt, from all taxation, except estate and inheritance taxes,
Ro loss from the sale or other disposition of the Treasury bills shall
be allowed as a deduction, or otherwise recognized, for the purposes
of any tax now or hereafter imposed by the United States or any of its
possessions

treasury Department Circular No, 418, as amended, and this
notice prescribe the terms of the Treasury bills and govern the condi bions 0 1 tlxeir issue.

Copies of the circular nay be ootained from

any Federal -Reserve Bank or branch thereof.

TREASURY DEPARTMENT

FOR RELEASE, MORNING- PAPERS,
Friday, October 23, 1931.

STATEMENT BY SECRETARY MELLON

Secretary of the Treasury Mellon announced to-day that the
tenders for $50,000,000, or thereabouts, of 91-day Treasury Bills
dated October 26, 1931, and maturing January 25, 1932, which were
offered on October 19th, were opened at the Federal Reserve Banks
on October 22nd.
The total amount applied for was $227,253,000.

Except

for two bids amounting to $3,000 at the rate of about 2 per cent,
the highest bid made was 99,411, equivalent to an interest rate
of about 2-1/3 per cent on an annual basis.

The lowest bid accepted

was 99.241, equivalent to an interest rate of about 3 per cent on an
annual basis.

The total amount of bids accepted was $51,338,000.

The average price of Treasury Bills to be issued is 99.321.
average rate on a bank discount basis is about 2.69 per cent.

The

TREASURY DEPARTMENT

FOR RELEASE, MORNING PAPERS,
Monday, October 26, 1931.

STATEMENT BY SECRETARY MELLON

The Secretary of the Treasury gives notice that tenders are
invited for Treasury hills to the amount of $60,000,000, or thereabouts.
They will be 91-day bills; and will be sold on a discount basis to the
highest bidders.

Tenders will be received at the Federal Reserve

Banks, or the branches thereof, up to two o*clock p.m., Eastern Standard
time, on Thursday, October 29, 1931.

Tenders will not be received at

the Treasury Department, Washington,
The Treasury bills will be dated November 2, 1931, and will
mature on February 1, 1932, and on the maturity date the face amount
will be payable without interest.

They will be issued in bearer form

only, and in amounts or denominations of $1,000, $10,000, $100,000,
$500,000, and $1,000,000 (maturity value).
It is urged that tenders be made on the printed forms and
forwarded in the special envelopes which will be supplied by the Federal
Reserve Banks or branches upon application therefor.
No tender for an amount less than $1,000 will be considered.
Each tender must be in multiples of $1,000.

The price offered mast

be expressed on the basis of 100, with not more than three decimal
places, e. g., 99.125.

Fractions must not be used.

Tenders will be accepted without cash deposit from incor­
porated banks and trust companies and from responsible and recognized
dealers in investment securities.

Tenders from others must be accom­

panied by a deposit of 10 per cent of the face amount of Treasury bills

-2-

appliod for» unless the tenders are accompanied by an express guaranty
of payment by an incorporated bank of trust combany*
Immediately after the closing hour for receipt of tenders on
October 29, 1931, all tenders received at the federal Reserve Banks or
branches thereof up to the closing hour will be opened and public an­
nouncement of the acceptable prices will follow as soon as possible
thereafter, probably on the following morning.

.The Secretary of the

Treasury expressly reserves the right to reject- any or all tenders or
parts of tenders» and to allot less than the amount applied for, and
his action in any such respect shall be final.

Those submitting tenders

will be advised of the acceptance or rejection thereof«,

Payment at

the price offered for Treasury bills allotted mast be made at the
federal Reserve Banks in cash or other immediately available funds on
November 2, 1931*
The Treasury bills will be exempt, as to principal and interest,
and any gain from the sale or other disposition thereof will also bo
exempti from all taxation, except estate and inheritance taxes.- No loss
from the sale or other disposition of the Treasury bills shall be allowed
as a deduction, or otherwise recognized,' for the purposes of any tax now
or hereafter imposed by the United States or any of its possessions.
Treasury Department Circular No«> 418, as amended, and this
notice prescribe the terms of the Treasury bills and govern the con­
ditions of their issue.

Copies of the circular may be obtained from

any federal Reserve Bank or branch thereof.

V

TREASURY DEPARTMENT

FOR RELEASE, MORNING PAPERS,
Friday, October 30, 1931.

STATEMENT BY SECRETARY MELLON

Secretary of the Treasury Mellon announced to-day that the
tenders for $60,000,000, or thereabouts, of 91—day Treasury Bills
dated November 2, 1931, and maturing February 1, 1932, which were
offered on October 26th, were opened at the Federal Reserve Banks
on October 29th.
The total amount applied for was $328,027,000.

The highest

bid made was 99,500, equivalent to an interest rate of about 1.98
per cent on an annual basis.

The lowest bid accepted was 99.373,

equivalent to an interest rate of about 2,48 per cent on an annual
basis.
accepted.

Only part of the amount bid for at the latter price was
The total amount of bids accepted was $60,921,000.

The average price of Treasury Bills to be issued is 99.410.
average rate on a bank discount basis is about 2-l/3 per cent.

The

TREASURY DEPARTMENT

FOR RELEASE, MORNING PAPERS,
Monday, November 2, 1951.

STATEMENT BY SECRETARY MELLON

The Secretary of the Treasury gives notice that tenders are
invited for Treasury bills to the amount of $75,000,000, or there­
abouts.

They will be 91-day bills; and will be sold on a discount

basis to the highest bidders.

Tenders will be received at the Federal

Reserve Banks, or the branches thereof, up to two ©»clock p. m . ,
Eastern Standard time, on Friday, November 6, 1931.

Tenders will not

be received at the Treasury Department, Washington*
The Treasury bills will be dated November 9, 1931, .and will
mature on February 8, 1932, and on the maturity date the face amount
will be payable without interest.

They will be issued in bearer form

only, and in amounts or denominations of $1,000, $10,000, 4 1 0 0 ,0 0 0 ,
$500,000, and $1,000,000 (maturity value).
It is urged that tenders be made on the printed forms and
forwarded in the special envelopes which will be supplied by the
Federal Reserve Banks or branches upon application therefor.
No tender for an amount less than $1,000 will be considered.
Each tender must be in multiples of $1,000.

The price offered must

be expressed on the basis of 100, with not more than thfee decimal
places, e. g., 99,125.

Fractions must not be used.

Tenders will be accepted without cash deposit from incor­
porated banks and trust companies and from responsible and recognized
dealers in investment securities.

Tenders from others must be accom­

panied by a deposit of 10 per cent of the face amount of Treasury bills

JL

-

2-

applied for, unless the tenders are accompanied by an express guaranty
of payment by an incorporated bank or trust company.
Immediately after the closing hour for receipt of tenders on
November 6, 1931, all tenders received at the Federal Reserve Banks
or branches thereof up to the closing hour will be opened and public
announcement of the acceptable prices will follow as soon as possible
thereafter, probably on the following morning.

The Secretary of the

Treasury expressly reserves the right to reject any or all tenders or
parts of tenders, and to allot less than the amount applied for, and
his action In any such respect shall be final.

Those submitting

tenders will be advised of the acceptance or rejection thereof.

Pay­

ment at the price offered for Treasury bills allotted must be made at
the Federal Reserve Banks in cash or other immediately available funds
on November 9, 1931.
The Treasury bills will be exempt, as to principal and interest,
and any gain from the sale or other disposition thereof will also be
exempt, from all taxation, except estate and inheritance taxes.

No

loss from the sale or other disposition of the Treasury bills shall be
allowed as a deduction, or otherwise recognized, for the purposes of
any tax now or hereafter imposed by the United States or any of its
possessions.
Treasury Department Circular No. 418, as amended, and this
notice prescribe the terms of the Treasury bills and govern the con­
ditions of their issue.

Copies of the circular may be obtained from

any Federal Reserve Bank or branch thereof,

TREASURY DEPARTMENT

EOR RELEASE, MORNING PAPERS,.
Saturday, November 7, 1931.

STATEMENT BY SECRETARY MELLON

Secretary of the Treasury Mellon announced to-day that the
tenders for $75,000,000, or thereabouts, of 91-day Treasury Bills
dated November 9, 1931, and maturing February 8, 1932, which were
offered on November 2nd, were opened at the Federal Reserve Banks
on November 6th.
The total amount applied for was $301,633,000.

The highest*

bid made was 99.550, equivalent to an interest rate of about 1.78
per cent on an annual basis.

The lowest bid accepted was 99.458,

equivalent to an interest rate of about 2.14 per cent on an annual
basis. . The total amount of bids accepted was $75,173,000.
average price of Treasury Bills to be issued is 99.492,
average rate on a bank discount basis is about 2 per cent.

The

The

EOR RELEASE, AFTERNOON PAPERS
.OR WHEN DELIVERED,
SUNDAY, NOVEMBER 8 , 1931.

Remarks of
Secretary Mellon
at The Welfare EuncL Emergency Association Mass Meeting
at
Syria Mosque
Pittsburgh,
November 8, 1931

This meeting is one of many that are being conducted in cities and
tomis throughout the country for the purpose of organizing to meet their
local unemployment problems in the way which they know to be most effective.
By President Hoover!s direction a national organization has been
created

which,in the President's words, is to cooperate with "the State

and local agencies, and with the many national organizations of business,
labor, and welfare, with the churches and other societies so that the
countless streams of human helpfulness which have been the mainstay of our
country in all emergencies may be directed wisely and effectively."
Tne meeting this afternoon is the opening of the campaign in
Pittsburgh by which we expect to raise the funds needed to finance the
city's regular charitable organizations and also to meet the special problems
with which we are faced this winter by reason of the unemployment situation.
It combines in one appeal the amounts to be raised both for the Welfare
Fund and for the Allegheny County Emergency Association,

The funds

thus provided will insure the operation of all the permanent charitable
organizations represented in the Welfare Fund, and will also make it possible
for the Emergency Association to continue to operate "the Pittsburgh Plan"
which proved so helpful last winter in meeting the unemployment problem here.
Under that Plan labor supplied by the Association and paid for out
of the Unemployment Fund will be available for work in any part of Allegheny
County where materials and supervision can be furnished,,

Such a plan,

it seems to me, is the best possible way to meet.the present emergency.
It confers a double benefit on the community, for it not only makes possible
needed improvements and provides employment but at the same time helps to
maintain that self-respect which is so essential if people who are able and

~ 2 willing to work are to "be spared tlie titter experience of receiving mon^y
for which no compensating labor has "been given in return.

If the

work of the Emergency Association can "be carried on this winter, in addition
to the help rendered "by the charitable organizations participating in the
Welfare Fund, the most pressing needs of the local situation can be met.
This is based on the assumption that the full amount proposed
to be raised in this campaign shall be realized.

It is extremely

important that this be done and that a prompt and generous response be made
to this appeal.

Other cities are responding most generously to the

demands tnat are being made upon them.

Each day reports come to

Washington of the splendid response which is being made in local campaigns
throughout the country; and while our problems here in Pittsburgh as a great
industrial center have been and are particularly difficult and are accentuated
by the very vastness of our industrial development which in ordinary times
makes for the city!s prosperity, no one can doubt that Pittsburgh will give
with customary generosity and will see that none in our midst shall suffer
this winter for lack of help which any of us can give.
It is an opportunity for service such as may not come to us again in
our lifetime.

I can think of no cause that would have a greater appeal

not only to our sympathy but to our sense of civic responsibility.
problem, after all, is our problem.

The

The men and women who temporarily

find themselves in difficulties because they are deprived of their usual
means of livelihood are not strangers but our own people who work in our
shops and our industries*

We owe it to them, and more especially we

owe it to ourselves, to see them through their difficulties until better
times return again, as return they will.

Let us prove by our actions

in this campaign that Pittsburgh, which has always responded so generously
to every call for help in this and other countries, will never fail her own
people in their time of greatest need.

TREASURY DEPARTMENT

POR RELEASE, MORNING PAPERS,
Monday, November 9, 1931.

STATEMENT BY SECRET.ffiY MELLON

The Secretary of the Treasury gives notice that tenders are
invited for Treasury bills to the amount of $75,000,000, or thereabouts
They will be 91-day bills; and will be sold on a discount basis to the
highest bidders.

Tenders will be received at the Eederal Reserve Banks

or the branches thereof, up to two o fclock p. m. , Eastern Standard time
on Eriday, November 13, 1931.

Tenders will not be received at the

Treasury Department, Washington.
The Treasury bills will be dated November 16, 1931, and will
mature on February 15, 1932, and on the maturity date the face amount
will be payable without interest.

They will be issued in bearer form

only, and in amounts or denominations of $1,000, $10,000, $100,000,
$500,000, and $1,000,000 (maturity value).
It is urged that tenders be made on the printed forms and for­
warded in the special envelopes which will be supplied by the Federal
Reserve Banks or branches upon application therefor.
No tender for an amount less than $1,000 will be considered.
Each tender must be in multiples of $1,000.

The price offered must be,

expressed on the basis of 100, with not more than three decimal places,
e. g., 99.125.

fractions must not be used.

Tenders will be accepted ?;ithout cash deposit from incorporated
banks and trust companies and from responsible and recognized dealers
in investment securities.

Tenders from others must be accompanied by

-

2-

a deposit cf 10 per cent of the face amount of Treasury hills applied
for, unless the tenders are accompanied by an express guaranty of pay­
ment by an incorporated bank or trust company.
Immediately after the closing hour for receipt of tenders on
November 13, 1931, all tenders received at the Federal Reserve Banks
or branches thereof up to the closing hour will be opened and public
announcement of the acceptable prices will follow as soon as possible
thereafter, probably on the following morning.

The Secretary of the

Treasury expressly reserves the right to reject any or all tenders or
parts of tenders, and to allot less than the amount applied for, and
his action in any such respect shall be final.

Those submitting

tenders will be advised of the acceptance or rejection thereof.

Pay­

ment at the price offered for Treasury bills allotted must be made at
the Federal Reserve Banks in cash or other immediately available funds
on November 16, 1931.
The Treasury bills will be exempt, as to principal and interest,
and any gain from the sale or other disposition thereof will also be
exempt, from all taxation, except estate and inheritance taxes.

No loss

from the sale or other disposition of the Treasury bills shall be allowed
as a deduction, or otherwise recognized, for the purposes of any tax
now or hereafter imposed by the United States or any of its possessions.
Treasury Department Circular No. 418, as amended, and this
notice prescribe the terms cf the Treasury bills and govern the con­
ditions of their issue.

Copies of the circular may be obtained from

any Federal Reserve Bank or branch thereof.

TREASURY DEPARTMENT

FOR RELEASE, MORN!EG PAPERS
Saturday, November 14, 1931

STATEMENT BY SECRETARY MELLON

Secretary of the Treasury Mellon announced to-day that the
tenders for $75,000,000, or thereabouts, of 91-day Treasury Bills
dated November 16, 1931, and maturing February 15, 1932, which were
offered on November 9th, were opened at the Federal Reserve Banks
on November 13th,
The total amount applied for was $255,289,000.

The highest

bid made was 99.550, equivalent to an interest rate of about 1.78
per cent on an annual basis.

The lowest bid accepted was 99.469,

equivalent to an interest rate of about 2.10 per cent on an annual
basis.

The total amount of bids accepted was $75,410,000.

average price of Treasury Bills to be issued is 99.489.

The

average rate on a bark discount basis is about 2.02 per cent.

The

¿7 0

TREASURY DEPARTMENT

FOR RELEASE, MORNING PAPERS,
Monday, November 16, 1931i

STATEMENT BY SECRETARY MELLON

The Secretary of the Treasury gives notice that tenders are
invited for Treasury bills to the amount of $60,000,000, or thereabouts.
They will be 93-day bills; and will be sold on a discount basis to the
highest bidders.

Tenders will be received at the Federal Reserve Banks,

or the branches thereof, up to two ofclock p.m., Eastern Standard time,
on Friday, November 20, 1931.

Tenders will not be received at the

Treasury Department, Washington.
The Treasury bills will be dated November 23, 1931, and will
mature on February 24, 1932, and on the maturity date the face amount
will be payable without interest.

They will be issued in bearer form

only, and in amounts or denominations of $1,000, $10,000, $100,000,
$500,000, ands$1,000,000 (maturity value).
It is urged that tenders be made on the printed forms and
forwarded in the special envelopes which will be supplied by the Federal
Reserve Banks or branches upon application therefor.
No tender for an amount less than $1,000 will be considered.
Each tender must be in multiples of $1,000.

The price offered must bo

expressed on the basis of 100, with not more than three decimal places,
e. g., 99.125#

Fractions must not be used.

Tenders will be accepted without cash deposit from incorporated
banks and trust companies and from responsible and recognized dealers in
investment securities.

Tenders from others must bo accompanied by a

■

-

2-

dapoait of 10 per cant of the face amount of Treasury tills applied for,
unless the tenders are accompanied by an express guaranty of payment by
an incorporated bank or trust company.
Immediately after the closing hour for receipt of tenders on
November 20, 1931, all tenders received at the Federal Reserve Banks or
branches thereof up to the closing hour will bo opened and public announce­
ment of the acceptable prices will follow as soon as possible thereafter,
probably on the following morning,

The Secretary of the Treasury expressly

reserves the right to reject any or all tenders or parts of tenders, and
to allot less than the amount applied for, and his action in any such
respect shall be final.

Those submitting tenders will be advised of the

acceptance or rejection thereof.

Payment at the price offered for

Treasury bills allotted must be made at the Federal Reserve Banks in cash
or other immediately available funds on November 23, 1931*
The Treasury bills will bo exempt, as to principal and interest,
and any gain frok the sale or other disposition thereof will also be
exempt, from all taxation, except estate and inheritance taxes.

No loss

from the sale or other disposition of the Treasury bills shall be allowed
as a deduction, or otherwise recognized, for the purposes of any tax now
or hereafter imposed by the United States or any of its possessions.
Treasury Department Circular No. 418, as amended, and this
notice prescribe the terms of the Treasury bills and govern the condi­
tions of their issue.

Copies of the circular may be obtained from any

Federal Reserve Bank or branch thereof.

37/

TREASURY DEPARTMENT

POR RELEASE, MORNING PAPERS,
Saturday, November 21, 1931.

STATEMENT BY SECRETARY MELLON

Secretary of the Treasury Mellon announced to-day that the tenders
for $60,000,000, or thereabouts, of 93-day Treasury Bills dated November
23, 1931, and maturing February 24, 1932, which were offered on November
16th, were opened at the Federal Reserve Banks on November 20th.
The total amount applied for was $173,213,000.

Except for two bids

for an aggregate of $115,000 at prices averaging about 0.70 per cent,
the highest bid made was 99.500, equivalent to an interest rate of about
1.94 per cent on an annual basis.

The lowest bid accepted was 99.381,

equivalent to an interest rate of about 2.40 per cent on an annual basis*
Only part of the amount bid for at the latter price was accepted.
total amount of bids accepted was $60,182,000.
Treasury Bills to be issued is 99.411.
count basis is about 2.28 per cent*

The

The average price of

The average rate on a bank dis­

TREASURY DEPARTMENT

FOR RELEASE, MORNING' PAPERS,
Monday, November 23, 1931.

STATEIviENT BY SECRETARY MELLON

The Secretary of the Treasury gives notice that tenders are
invited for Treasury bills to the amount of $100,000,000, or there­
abouts.

They will be 93-day bills; and will be sold on a discount

basis to the highest bidders.

Tenders will be received at the Federal

Reserve Banks, or the branches thereof, up to two o ’clock p. m . ,
Eastern Standard time, on Friday, November 27, 1931.

Tenders will

not be received at the Treasury Department, Washington.
The Treasury bills will be dated November 30, 1931, and will
mature on March 2, 1932, and on the maturity date the face amount will
be payable without interest.

They will be issued in bearer form only,

and in amounts or denominations of $1,000, $10,000, $100,000, $500,000,
and $1,000,000 (maturity value).
It is urged that tenders be made on the printed forms and
forwarded in the special envelopes which will be supplied by the
Federal Reserve Banks or branches upon application therefor.
No tender for an amount less than $1,000 will be considered.
Each tender must be in multiples of $1,000.

The price offered must

be expressed on the basis of 100, with not more than three decimal
places, e. g., 99.125.

Fractions must not be used.

Tenders will be accepted without cash deposit from incorpor­
ated banks and trust companies and from responsible and recognized
dealers in investment securities.

Tenders from others must be accom­

panied by a deposit of 10 per cent of the face amount of Treasury bills

applied for, unless the tenders are accompanied by an express guaranty
of payment by an incorporated bank or trust company.
Immediately after the closing hour for receipt of tenders on
November 27, 1931, all tenders received at the Federal Reserve Banks
or branches thereof up to the closing hour trill bo opened and public
announcement of the acceptable prices trill follow as soon as possible
thereafter, probably on the following morning.

The Secretary of the

Treasury expressly reserves the right to reject any or all tenders or
parts of tenders, and to allot less than the amount applied for, and
his action in any such respect shall be final.

Those submitting

tenders will be advised of the acceptance or rejection thereof.

Pay­

ment at the price offered for Treasury bills allotted must be made at
the Federal Reserve Banks in cash or other immediately available funds
on November 30, 1931.
The Treasury bills will be exempt, as to principal and interest,
and any gain from the sale or other disposition thereof will also be
exempt, from all taxation, except estate and inheritance taxes.

No

loss from the sale or other disposition of the Treasury bills shall be
allowed as a deduction, or otherwise recognized, for the purposes of
any tax now or hereafter imposed by the United States or any of its
possessions.
Treasury Department Circular No. 418, as amended, and this
notice prescribe the terms of the Treasury bills arid govern the con­
ditio: sof their issue.

Copies of the circular may be obtained from

any Federal Reserve Bank or branch thereof.

TREASURY DEPARTMENT

EOR RELEASE, MORNING PAPERS
Saturday, November 28, 1931

STATEMENT BY SECRETARY MELLON

Secretary of the Treasury Mellon announced to-*day that
the tenders for $100,000,000, or thereabouts, of 93—day Treasury
Bills dated November 30, 1931, and maturing March 2, 1932, which
were offered on November 23rd, were opened at the federal Reserve
Banks on November 27th.
The total amount applied for was $235,485,000.

Except

for one bid for $50,000 at the rate of about 1.78 per cent, the
highest bid made was 99.430, equivalent to an interest rate of
about 2.21 per cent on an annual basis.

The lowest bid accepted

was 99.296, equivalent to an interest rate of about 2.73 per
cent on an annual basis.
latter price was accepted.

Only part of the amount bid for at the
The total amount of bids accepted

was $100,490,000.

The average price of Treasury Bills to be

issued is 99.332.

The average rato on a bank discount basis

is about 2.59 per cent

EOR RELEASE, MORNING PAPERS,
Monday, December 7, 1931,

TREASURY DEPARTMENT

STATEMENT BY SECRETARY MELLON

The Treasury is today offering for subscription at par and
accrued interest, through the Federal Reserve Banks, an offering of
3-1/4 per cent one-year Treasury notes, and of 2-3/4 per cent six
months’ certificates of indebtedness, and 3 per cent nine months’ certi­
ficates of indebtedness.

The amount of the Treasury note offering is

$600,000,000, or thereabouts; the amount of the offering of six months’
certificates of indebtedness is $300,000,000, or thereabouts; and the
amount of the offering of nine months’ certificates of indebtedness is
$400,000,000, or thereabouts.
The Treasury notes will be dated December 15, 1931, and will
boar interest from that date at the rate of 3-l/4 per cent per annum,
payable semiannually.

They will mature on December 15, 1932, and will

not be subject to call for redemption prior to that date.
Both series of certificates of indebtedness will be dated and
bear interest from December 15, 1931,

One series, TJ-1932, for six

months, with interest at the rate of 2-3/4 per cent per annum, will
mature on June 15, 1932, and the other series, TS2-1932, for nine
months, with interest at the rate of 3 per cent per annum, will mature
on September 15, 1932.
The principal and interest of the Treasury notes and of both
series of certificates of indebtedness will be payable in United States
gold coin of the present standard of value.

-

2-

The Treasury notes and Treasury certificates of indebtedness
of both series will be exempt, both as to principal and interest, from
all taxation (except estate or inheritance taxes) 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.
Applications will bo received at the Federal Reserve Banks,
The Treasury will accept in payment for the new Treasury notes and
certificates of indebtedness, at par, the

per cent Treasury notes

of Series C-1930-32, with coupons dated June 15 and December 15, 1932,
attached, which were called for redemption on December 15, 1931, by
Treasury Department Circular Do, 439, dated June 8, 1931, and Treasury
certificates of indebtedness of Series TD-1931 and TD2-1931, both
maturing December 15, 1931,
Subscriptions for the Treasury notes for which payment is
to be tendered in 3j- per cent Treasury notes of Series C-1930-32 (called
for redemption on December 15, 1931) and Treasury certificates of in­
debtedness of Series TD-1931 and TD2-1931 (both maturing December 15,
1931) will be given preferred allotment up to the amount of the offering
of Treasury notes.

Subscriptions for the Treasury certificates of

indebtedness for which payment is to bo tendered in 3-J per cent Treasury
notes of Series C-1930-32 and Treasury certificates of indebtedness of
Serios TD-1931 and TD2-1931 will be given preferred allotment up to the
amount of each offering.
The Treasury notes will be issued in bearer form only, in
denominations of $100, $500, $1,000, $5,000, $10,000, and $100,000,
with two interest coupons attached payable on June 15, and December

-3~

15, 1932.

The certificates of indebtedness of both series will be

issued in bearer form only, in denominations of $500, $1,000, $5,000,
$10,000, and $100,000.

The certificates of Series TJ-1932 will have

one interest coupon attached, payable Juno 15, 1932, and the certifi-*
cates of Series TS2-1932 two interest coupons attached, payable March
15, and September 15, 1932.
The 3-| per cent Treasury notes of Series C-1930-32 were
called for redemption on December 15, 1931, and will cease to bear
interest on that date.
outstanding.

About $452,000,000 of those notes are now

Xn addition, about $543,000,000 of Treasury certificates

of indebtedness, and about $95,000,000 in interest on the public debt,
become due and payable on December 15, 1931.
The texts of the official circulars follow:

-4-

THREE AND ONE-QUARTER PER CENT TREASURY NOTES OF SERIES 1932

The Secretary of the Treasury offers for subscription,
at par and accrued interest, through the Federal Reserve Banks,
$600,000,000, or thereabouts, three and one-quarter per cent Treasury
notes of Series 1932, of an issue of gold notes of the United States
authorized by the Act of Congress approved September 24, 1917, as
amended.
DESCRIPTION OF NOTES
The notes will be dated and bear interest from December 15,
1931, will be payable on December 15, 1932, and will bear interest
at the rate of three and one-quarter per cent per annum, payable semi­
annually on June 15, and December 15, 1932.

The notes will not be

subject to call for redemption prior to maturity.

The principal

and interest of the notes will be payable in United States gold coin
of the present standard of value.
Bearer notes with interest coupons attached will be issued
in denominations of $100, $500, $1,000, $5,000, $10,000, and $100,000.
The notes will not be issued in registered form.

The notes will be

acceptable to secure deposits of public moneys, but will not bear the
circulation privilege.
The notes of this series shall be exempt, both as to
principal and interest, from all taxation (except estate

or inheritance

-5-

taxes) now or hereafter imposed by the United States, any State, or
any of the possessions of the United States, or hy any local taxing
authority.
The notes of this series will "be accepted at par, with an
adjustment of accrued interest, 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 notes.
APPLICATION AND ALLOTMENT
Applications will be received at the Pederal Reserve Banks,
as fiscal agents of the United States.

Banking institutions generally

will handle applications for subscribers, but only the Pederal Reserve
Banks are authorized to act as official agencies.
Subscriptions for which payment is to be tendered in
Treasury notes of Series C-1930-32 (called for redemption on December
15, 1931) and Treasury certificates of indebtedness of Series TD-1931
and TJ52-1931 (both maturing December 15, 1931) will be given preferred
allotment up to the amount of the offering.
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; the Secretary of the
Treasury also reserves the right to make allotment in full upon applica­
tions for smaller amounts, to make reduced allotments upon, or to reject,
applications for larger amounts, and to make classified allotments and

ballotments upon a graduated scale; and his action in these respects will
he final.

Allotment notices will he sent out promptly upon allotment,

and the basis of allotment will he publicly announced.
PAYMENT
Payment at par and accrued interest for any notes allotted must
he made on or before December 15, 1931, or on later allotment.

Any qualified

depositary will he permitted to make payment by credit for notes 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.

The 3-g$ Treasury notes of Series C-1930-32,

with coupons dated June 15 and December 15, 1932, attached, which were called
for redemption on December 15, 1931, by Treasury Department Circular No. 439,
dated June 8, 1931, and Treasury certificates of indebtedness of Series
TD-1931 and TD2-1931, both maturing December 15, 1931, will be accepted at
par in payment for any notes of the series now offered which shall be sub­
scribed for and allotted, with an adjustment of the interest accrued, if
any, on the notes of the series so paid for.
(Ge n e r a l

provisions

The Federal Reserve Banks, as fiscal agents of the United States,
are authorized and requested to receive subscriptions for Treasury notes
hereunder, to make allotments of subscriptions on the basis and up to the
amounts indicated to them by She Secretary of the Treasury, and to make
delivery of Treasury notes on lull—paid subscriptions allotted, and,
ponding delivery of definitive notes, to issue interim certificates.

FURTHER DETAILS
Any further information which, may be desired as to the issue
of Treasury notes 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, and may terminate the offer at any time in his
discretion,

TREASURY CERTIFICATES OF INDEBTEDNESS
SERIES TJ-1932
SERIES TS2-1932

The Secret.ary 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 certi­
ficates of indebtedness, in two series, both dated end bearing interest
from December 15, 1931, the certificates of Series TJ-1932 being payable
on June 15, 1932, with interest at the rate of two and three-quarters
per cent per annum, payable on a semiannual basis, and the certificates
of Series TS2-1932 being payable on September 15, 1932, with interest
at the rate of three per cent per annum, payable on a semiannual basis.
The principal and interest of the certificates will be payable in
United States gold coin of the present standard of value.
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

TJ-1932 will have one interest coupon attached, payable June 15, 1932.,
and the certificates of Series TS2-1932, two interest coupons attached,
payable March 15,raid September 15, 1932.
The certificates of these series shall be exempt ,v both as to
principal and interest, from all taxation (except estate and inheritance
taxes) 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.

-9The 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 cither or both series at any time without
notice.

The Secretary of the Treasury also reserves the right to main*

allotment in full upon applications for smaller amounts, 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 December 15, 1931, or on later allotment.

After allot­

ment and upon payment Federal (Reserve Banks may issue interim receipts pend­
ing delivery of the definitive certificates.

Any qualified depositary will

be permitted to make payment by credit for certificates allotted to it for
itsolf 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.

The

Treasury notes of Series C-1930-32, with

coupons dated June 15 and December 15, 1932, attached, which were called
for redemption on December 15, 1931, by Treasury Department Circular
No. 439, dated Juno 8, 1931, and Treasury certificates of indebtedness

c-

-

10-

of Series ED-1931 and iD3*-1931, both maturing Decembor 15, 1931* will
be accepted at par in payment for any certificates o.f. the series now
offered which shall be snoscribod 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 Bunks
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 the respective districts.

TREASURY DEPARTMENT
Washington, D. C.
December 8, 1931.
FOR RELEASE SUBJECT TO RESTRICTIONS IDENTICAL WITH
THOSE DESIGNATED IN RESPECT OE THE ANNUAL REPORT
OF THE SECRETARY OF THE TREASURY FOR THE FISCAL YEAR
ENDING JUNE 30, 1931. THE SECRETARY’S REPORT IS NOT
TO BE RELEASED UNTIL THE READING OF THE PRESIDENT’S
BUDGET MESSAGE HAS BEEN COMMENCED IN THE SENATE OR
HOUSE OF REPRESENTATIVES WHICH PROBABLY WILL BE AT
NOON DECEMBER 9, 1931.

PROPOSED REVISION OF INDIVIDUAL INCOME TAX RATES AND EXEMPTIONS
Among other revenue proposals, the Treasury has recommended that,
effective on incomes for 1931, individual income tax rates and exemptions be
revised to conform to the revenue act of 1924.

Under the 1924 plan normal

rates applicable to individual incomes would be fixed at 2, 4 and 6 per cent,
instead of the present rates of 1§, 3 and 5 per cent; surtax rates would
be graduated from 1 per cent on incomes in excess of $10,000 up to 37
per cent on incomes between $100,000 and $200,000, reaching 40 per cent
on incomes in excess of $500,000, compared with present rates graduated
from 1 per cent on incomes in excess of $10,000 up to 20 per cent on
incomes in excess of $100,000.

Personal exemptions would be fixed at $1,000

for single individuals and $2,500 for married individuals, compared with
$1,500 and $3,500 respectively under the existing law, the present credit
of $400 for each dependent and the earned income provisions of the revenue
act now in effect remaining unchanged..
The effect of this proposed revision of the individual income tax
rates and exemptions is illustrated by the accompanying table which shows the
amount of tax which would be paid, under the present act and under the act
as revised according to the Treasury’s proposal, by a married individual
with one dependent and by a single individual with no dependents, assuming
various amounts of income

COMPARISON OF TOTAL INDIVIDUAL INCOME TAX PAYABLE UNDER THE PRESENT LAW (1928 REVENUE ACT) AND UNDER PROPOSED
RATES (192U REVENUE ACT) BY A MARRIED INDIVIDUAL WITH ONE DEPENDENT AND BY A SINGLE INDIVIDUAL WITHOUT
DEPENDENTS.
(It is assumed that all net income not in excess of $10,000 is earned and in addition one-half of the net income in excess
of $10,000'until the statutory limit of $30,000 earned income is reached.
It is also assumed that net income includes
no dividends, no_ capital net gains or losses and no interest on Government Bonds.)
Net income

Normal. tax

Surtax

pjptf
act

Present
rates

Present
rates

Earned income
credit
I9 2 U
Present
act(1)
rates

act

Total tax
Present
I9 2 4
act
rates

Increase in
Rate of tax on
net income
amt.of tax
1924
Present
.rates
. .act
(per cent)(per cent)

Married individual, one dependent
$

1 ,0 0 0
2 ,0 0 0
3 ,0 0 0
U ,0 0 0
5 ,0 0 0

10,000
1 5 ,0 0 0

20,000
2 5 ,0 0 0
5 0 ,0 0 0

100,000
5 0 0 ,0 0 0

$

1,000
2,000

—

------$

I .5 0
I6 .5 O
I 2 3 .OO
3 3 5 .OO
585.00
8 3 5 .OO
2,085.00
U, 5 8 5 .0 0
2^,585.00

$

- ~ - —

2 .0 0
2 2 .0 0

>+2.00
20>+.00
>+86.00
786.00
1,086.00
2 ,5 8 6 .0 0
5 , 5 S 6 . oo
2 9 ,5 2 6 .0 0
- - - —
$ 20.00
>+0.00

— — — —
— — — —
— _ _ ^
$
6 O.OO
220.00
5 IO.OO
2 ,9 2 0 .0 0
1 1 ,6 6 0 .0 0
9 1 ,6 6 0 .0 0
- - - —
- - - - - ----- ---$ 6 O.OO
220.00
5 IO.OO

— _ — —
— _ _ _
— — — —
6 0 .0 0
2 2 0 .0 0
5 1 0 .0 0
3 ,5 >+o.oo
1 7 ,0 2 0 .0 0
1 7 0 ,0 2 0 .0 0

$

$
$

.3 7

>+.12
3 O .7 5
52.75
92.75
1 H 6 .2 5
>+91.25
>+91.25
U9 I . 2 5

$

*50

5 .5 O
IO.5 O
5 I.OO

90.25
1 3 6 .5 0
I9 O . 2 5
5 7 6 .5 0
5 7 6 .5 0
5 7 6 .5 0

$

I.I3
I2 .3 8
92.25
3 3 6 .2 5
7 0 6 .2 5
1 ,1 9 2 . 7 5

1+.573.75
15,753.75
115,753.75
Single individual, :
no dependents

— - — —
-• - -

— —
- — —
- —.
6O.OO
220-00
5 IO.OO

- — —
$ 1.87

—

-- -- _

----: : : :

- - $ 5 .OO
10.00

- - - —

I .5 0
I6 .5 O
3 I.5 O
I5 3 .OO
4 5 5 .7 5
S6 9 .5 O
1 ,4 0 5 .7 5
5 ,5 4 9 .5 0

$

J .05
.hi

I.5 &
1 5 .3 7
I9 .I2
6 0 .7 5
II9 .5 O
1 6 3 .2 5
2 0 7 .OO

$

.6 3
1 .5 3

3.o>+

22,029.50
199,029.50

15,75

4 .3 5
5 .6 2
1 1 .1 0
2 2 .0 3

2 3 .1 5

39.21

23,275.75

— -- - I5 .OO

- .28

- • .75

-- ---

.5 6

1 .0 0
1 .1 3

$
7 .5 0
$
5,63
3 0 .0 0
I6 .8 8
2 2 .5 0
5 .6 2
U 5 .OO
6 0 .0 0
28.13
>+,000
1 5 .0 0
3 7 .5 0
9-37
6 O.OO
5 ,0 0 0
80.00
5 2 .5 0
20.00
1 3 .1 2
39.32
2 2 5 .OO
10,000
2 0 5 .0 0
3 OO.OO
75.00
5 1 .2 5
15 3 .7 5
>+5 5 .0 0
6OO.OO
1 5 ,0 0 0
$
5>+1.25
>+26.25
22.75
118.75
955.00
7 0 5 .0 0
1
6
5
.OO
20,000
9 OO.OO
7
9
6
.2
5
128.75
1 ,200.00
85,000
1 7 6 .2 5
9 5 5 .0 0
1 ,4 9 1 .2 5
1 , 288.75
212.75
5
,6 3 5 .0 0
50,000
2 ,2 0 5 .0 0
2 ,7 0 0 .0 0
2 ,9 2 0 .0 0
605.OO
3,5>+o.oo
5 2 1 .2 5
U, 6 6 3 .7 5
2
2
,1 1 5 .0 0
100,000
u , 70 5.0 0
5 ,7 0 0 .0 0
1 1 ,6 6 0 .0 0
1 7 ,0 2 0 .0 0
605.OO
1
5
,3
4
3
.7
5
5 2 1 .2 5
199
,
1 1 5 .0 0
2 ^ ,7 0 5 .0 0
2 9 ,70 0 .0 0
9 1 ,6 6 0 .0 0
17 0 ,0 2 0 .0 0
605.OO
500,000
5 2 1 .2 5
115 , 843-75
..( l l P r e s e n t maximum, earned, in e ome allow ance-' of* $30,000 r e t a i n e d i n s t e a d , o f $ 10 ,0 0 0 a s -ander th e 192>+ a c t .
3 ,0 0 0

. .03
-25
•92
2.24
3.53
>+.80
9 .1 5

.70
.75
1.5-+
g.SU'
3 .9 s
5 .1 6
9 .3 3
15.8Ï+
2 3 .1 7

IS.20
2.25
3 .6 1

U .7 8
5.»9 7
1 1 .2 7
2 2 .1 2

3 9 .2 2

975.75
6 ,2 7 5 . 7 5

$

9 .3 7

I3 .I2
16.87
2 0 .6 2
7 1 .2 5 .
1 1 5 .0 CP
1 5 2 .7 5
202.50
9 7 I .2 5
6 , 271.25
23 , 271.25

TREASURY DEPARTMENT

FOR RELEASE., MORNING PAPERS,
Friday, December 11,.1931..

STATEMENT BY SECRETARY MELLON.

Secretary Mellon today announced that the subscription books
for the current offering of twelve-month 3 l/4 per cent Treasury
Notes of Series 1932, maturing December 15, 1932, for $600,000,000;
nine-month 3 per cent Treasury Certificates of Indebtedness, Series
TS2—1932, maturing September 15, 1932, for $400,000,000; and six-month
2 3 / 4 per cent Treasury Certificates of Indebtedness, Series TJ-1932,
maturing June 15, 1932, for $300,000,000, closed at the close of
business today, Thursday, December 10, 1931.
Subscriptions received through the mail by Federal Reserve
Banks or the Treasury up to 10:00 a.m., Friday, December 11th, will
be considered as having been received before the close of the sub­
scription books.

TREASURY DEPARTMENT

FOR RELEASE, MORNING- PAPERS,
Saturday, December 12,. 1931,

Statement by Secretary Mellon.

There should he no misinterpretation as to the Administration's recom­
mendations to the Congress relating to the debts due us from foreign governments
and the recreation of the World War Foreign Debt Commission,
tion is opposed to cancellation.
plication,

The Administra­

No recommendation made carries any such im­

It is, however, the duty of those in authority to deal with reali­

ties, and there is no escaping the fact that some of our debtors cannot meet in
full the payments due us until there has been a substantial measure of economic
recovery, and that the position of others is so changed as to call for consid­
eration of their present situation in the light of existing circumstances.

Our

debt settlements were effected on the basis of the capacity of the debtors to
pay.

As the President said in his statement of June 20th, uas the basis of

the settlement of these debts was the capacity under normal conditions of the
debtor to pay, we should be consistent with our own policies and principles if
we take into account the abnormal situation now existing in the world,5.
Take the case of Great Britain, our best customer, which even in the
depression year 1930 took $678,000,000 worth of American agricultural and
industrial products.

The economic and financial changes of the past year have

immensely increased the burden of her payments to us.

The series of events

through which Great Britain was forced off the gold standard are too recent to
require enumeration.

To-day the pound sterling is selling at $3,315 to the

pound, which is a 32 per cent discount as compared with last year when it stpod
at parity or $4,866.

All. debts to Great Britain from foreign governments, ex­

cept reparation payments, which are not being collected at all this year and are
not likely to be collected in full next year, are payable in sterling.

Her debt

to us is payable in gold dollars.

The combined effect of these unfavorable

factors results in an enormously increased burden for the people of Great
Britain,
Payments due during the present fiscal year will serve to exemplify the
magnitude of the additional burden.

With the pound sterling at par, the

British treasury needs 32,800,000 pounds in order to pay us $159,500,000*

With

the pound sterling at the rate at which it sold on December 10, 1931, it would
take 48,100,000 pounds, or an increase of 15,300,000 pounds, or 47 per cent.
Or in other words, the burden on the British taxpayer is increased by almost
one-half.
When the British debt settlement was made it was estimated that its
present value at a 4^ per cent interest rate was 80 per cent of the total amount
due prior to funding.

If the amount to be raised in pounds sterling to meet

the obligations to us in dollars is increased by 47 per cent, it becomes
apparent that from the standpoint of the British taxpayer he is asked to meet
not the obligation as established by our Debt Commission but an amount consider­
ably in excess of such obligation,
Nothing could more forcibly illustrate the changed situation which places
on the Executive as well as the Legislative Branches of Government the duty of
reexamining the obligations of our debtors and their ability to meet them dur­
ing a period of world-wide economic depression.
Does any one believe that Austria or Hungary should be asked to pay the
installments due from them in view of the extraordinarily straightened cir­
cumstances in which the people of those two countries find themselves and the
great difficulty which they experience in obtaining foreign exchange for the
purpose of carrying on even the minimum of essential commerce with the rest
of the world?

Does any one believe that Germany should be asked by the United States
Government to meet her payments on the costs of the Army of Occupation when
such a demand by us must be inevitably followed by demands of other creditors
to pay her reparations in full?
These instances should suffice to demonstrate that to-stand on the letter
of our bond, and to refuse to investigate or to consider the facts, is to fail
in our responsibility to the American people whom we represent and to the
debtors whose capacity to pay we ourselves undertook to determine.
What intelligent business man or banker would blindly refuse to investi­
gate or to consider the altered circumstances of a debtor whose unsecured
obligation he held?
The situation of our debtors has been immensely altered during the course
of the last two years.

New questions in relation to these debts are bound to

arise in the course of the next few months.

The Congress should be in a posi­

tion through a commission created by it and composed in part of its own members
to ascertain what the facts actually are and to deal with these new problems
as they arise.
It is with such thoughts as these in mind that the President recoranended
the recreation of the World War Foreign Debt Commission.

I am confident that

upon mature consideration this recommendation will commend itself to the
Congress

( iH

^.TREASURY DEPARTMENT

FOR RELEASE, MORNING- PAFERS,
Saturday, December 12, 1931.

STATEMENT BY SECRETARY MELLON

Secretary Mellon to-day announced the subscription figures and the
"basis of allotment for the December 15th offering of Treasury Notes and
two series of Treasury Certificates of Indebtedness.
5-1/4 PER CENT TREASURY NOTES OF SERIES 1932
For the offering of 3-1/4 per cent Treasury Notes of Series 1932,
maturing December 15, 1932, which was for $600,000,000, or thereabouts,
total subscriptions aggregate some $703,703,400.

Of these subscriptions

about $225,500,000 represent exchange subscriptions in payment for which
3-1/2 per cent Treasury Notes, called for redemption on December 15,
1931, and Treasury Certificates of Indebtedness of Series TD-1931 and
Series TD2-1931, both maturing December 15, 1931, were tendered.
exchange subscriptions were allotted in full.

Such

Allotments on cash sub­

scriptions for the 3-1/4 per cent Treasury Notes of Series 1932 were
made as follows:

Subscriptions in amounts not exceeding $100,000 were

allotted 90 per cent, but not less than $100 on any one subscription;
..subscriptions in amounts over $100,000, but not exceeding $1,000,000
were allotted 80 per cent, but not less than $90,000 on any one sub­
scription; and subscriptions in amounts over $1,000,000 were allotted
75 per cent, but not less than $800,000 on any one subscription.
3. PER CENT TREASURY CERTIFICATES OF INDEBTEDNESS
OF SERIES TS2-1932
For the offering of 3 per cent Treasury Certificates of Indebted­
ness of Series TS2-1932, maturing September 15, 1932, which was for

IB
~

2

-

$400,000,000, or thereabouts, total subscriptions aggregate some $460,650,000.
Of these subscriptions about $31,000,000 represent exchange subscriptions
in payment for which 3-l/2 per cent Treasury Notes, called for redemption
on December 15, 1931, and Treasury Certificates of Indebtedness of Series
TD-1931 and Series TD2-1931, both maturing December 15, 1931, were tendered.
Such exchange subscriptions were allotted in full,

Allotments on cash

subscriptions for 3 per cent Treasury Certificates of Indebtedness of
Series TS2-1932 were made as follows:

Subscriptions in amounts not

exceeding $1,000,000 were allotted in full.

Subscriptions in amounts

over $1,000,000 were allotted 80 per cent, but not less than $1,000,000
on any one subscription.
2-3/4 PM

CENT TREASURY CERTIFICATES OF INDEBTEIMBSS
OF SERIES TJ-1932

For the offering of 2-3/4 per cent Treasury Certificates of Indebted­
ness of Series TJ-1932, maturing June 15, 1932, which was for $300,000,000,
or thereabouts, total subscriptions aggregate some $619,715,500.

Of these

subscriptions about $324,500,000 represent exchange subscriptions in payment
for which 3-1/2 per cent Treasury Notes, called for redemption on December 15,
1931, and Treasury Certificates of Indebtedness of Series TD-1931 and
Series TD2-1931, both maturing December 15, 1931, were tendered.

In accord­

ance with previous announcement, exchange subscriptions were given preferred
allotment.

All of such subscriptions were allotted in full, and all cash

subscriptions were rejected.

Further details as to subscriptions and allotments will be
announced when final reports are received from the Federal Reserve Banks.

'TREASURY DEPARTMENT

EOR RELEASE, MORNING PAPERS,
Monday, December 14, 1931,

Statement by Under Secretary of the Treasury Mills.

Tiiere seems to be some confusion as to the discussion of yesterday
between several Senators and myself, accompanied by Mr. Peis of the State
Department, in respect of the postponement of payments on foreign debts
during this fiscal year.
Installments are due on December 15th from a number of debtor nations.
Since the appropriate committees of the Congress cannot hold hearings on
the proposed legislation until next week, it is obvious that the Congress
cannot act by the 15th.
However, inasmuch as 68 Senators and 276 members of the House have
already pledged themselves to support the legislation, it is equally
obvious that when circumstances permit the action of Congress will be
favorable.
In the meantime, some answer has to be given to representatives of
foreign debtor governments in response to their inquiries as to the exist­
ing situation.
Should such inquiries be made, the Secretary of State proposed to say
verbally something along the following lines:
“The Presidents proposal for a debt suspension of one
year has been submitted to the Congress.

Owing to the fact

that the Congress only met last Monday and that the appropriate
committees of the Senate and of the House of Representatives
are not in a position to consider the proposed legislation
prior to the 15th of December, it will be impossible for the

- 2
debt suspension legislation to be enacted by that date.
While recognizing that neither the President of the United
States nor any of the executive departments of the Govern­
ment has power to alter the terms of the debt agreements
now in force, I desire to advise you that under the special
circumstances in which the proposal was made and accepted
and without intending in any way to vary the legal rights
of this country, it appears to this Government that a post­
ponement on the part of your Government of December 15th
payments pending action by the Congress would not be sub­
ject to any just criticism11.
As a matter of courtesy, and in order to keep members of Congress
fully informed, this proposed answer was shown by me to the Senators
attending the meeting yesterday, as it had previously been shown to some
members of the House.
Ho Senator or Representative was asked to sign or approve such
statement yesterday or at any time,

Ho Senator was asked to commit

himself, and this seemed to be fully understood,

I simply told them

that I was there to keep them informed and to ascertain whether anyone
saw any objection to a statement made verbally in that form.

Ho objection

was voiced by anyone present.
Subsequent to the meeting this was fully explained to the represen­
tatives of the press in the presence of Senator Watson and Senator Smoot*
May I add that there has never at any time been any intention of
coupling the President’s proposal to recreate the World War Foreign Debt
Commission with the proposal for a one year’s suspension of payments on

- 3 -

foreign delfts.

The 'bill introduced by Senator Smoot and Representative

Collier covering the latter proposal was prepared in the Legislative
Drafting Bureau of the House at the suggestion of the Treasury, given
by the Treasury to Senator Smoot and Representative Collier, and con­
tains no reference to the recreation of a Debt Funding Commission.

POR IMMEDIATE RELEASE,
Monday, December 14, 1931

TREASURY DEPARTMENT

Secretary Mellon today announced the final subscription and allotment
figures on the December 15th offering of 3-l/4 per cent Treasury Notes of
Series 1932, maturing December 15, 1932, 3 per cent Treasury Certificates of
Indebtedness of Series TS2—1932, maturing September 15, 1932, and 2—j| per cent
Treasury Certificates of Indebtedness of Series TJ-1932, maturing June 15, 1932.
Subscriptions and allotments were divided among the several Federal
Reserve Districts and the Treasury as follows:

3-1/4# TREASURY NOTES OF SERIES 1932
Federal Reserve
District

Total Subscrip­
tions Received

Total Cash
Subscriptions
Received

Total Exchange
Subscriptions
Received

Total Sub­
scriptions
Allotted

Boston
New York
Philadelphia
Cleveland
Richmond
Atlanta
Chicago
St, Louis
Minneapolis
Kansas City
Dallas
San Francisco
Treasury

$ 24,081,300
355,290,600
37,743,000
32,639,100
32,628,700
18,066,800
89,102,000
14,388,000
4,689,400
6,807,200
22,705,400
63,755,500
1.806.400

$ 15,360,100
211,961,200
36,014,100
29,060,800
29,930,500
16,580,800
57,980,800
5,230,200
3,530,600
4,055,800
21,213,700
47,167,100
86.900

$ 8,721,200
143,329,400
1,728,900
3,578,300
2,698,200
1,486,000
31,121,200
9,157,800
1,158,800
2,751,400
1,491,700
16,588,400
1.719.500

$22,007,000
305,476,400
29,429,700
26,748,500
26,746,500
15,776,300
76,495,700
13,592,600
4,130,800
6,162,800
19,380,300
52,805,600
1.798,000

$703,703,400

$478,172,600

$225,530,800

$600,550,200

Total

3$ TREASURY CERTIFICATES 0? DIDEBTEDKESS OF SERIES TS2-1932
Federal Reserve
District
______________ _

Total Subscriptions Received
_______________

Total Cash
Subscriptions
Received_____

Total Exchange
Subscriptions
Received_____

Boston
Hew York
Philadelphia
Cleveland
Richmond
Atlanta
Chicago
Sts Louis
Minneapolis
Kansas City
Dallas
San Francisco
Treasury

$ 1 2 3 0 6 6 ,500
292 , 272,500
24 3 5,000
20 . 014.500
7 . 229.000
i T , 355 ,ooo
2 3 .2 1 7 .5 0 0
6 .16 9 .0 0 0
3 ,0 0 5 ,5 0 0
3 . 41 7 .000
16 .2 9 6 .5 0 0
3 4 ,10 7 ,0 0 0

$ 10 , 373,500
2 7 4 ,2 1 9 ,5 0 0
24 . 287.000
19 .9 8 1.0 0 0
7 .7 0 1 .0 0 0
1 7 .0 3 2 .5 0 0
1 9 .1 9 4 .5 0 0
5 . 148.000
1 .7 7 6 .0 0 0
2 .5 9 7 .5 0 0
1 6 ,2 3 3 ,5 0 0
3 0 ,5 2 1 ,0 0 0

$ 1,6 9 3 ,0 0 0
17 .4 5 3 .0 0 0
58 .0 0 0
3 3 ,5 0 0

Total

$4 6 0 ,6 5 0 ,0 0 0

,^

5 5 5 ,0 0 0

$ 4 2 9 ,6 6 5 ,0 0 0

Total Subscriptions
Allotted

$ 12 ,0 6 6 ,5 0 0
2 4 1 ,7 7 2 ,5 0 0
2 1 .0 4 5 .0 0 0
18 . 084.500

128,000

7 , 829,000

3 2 2 ,5 0 0

16 .9 5 0 .0 0 0
2 2 .1 5 7 .5 0 0
6 .16 9 .0 0 0
3 ,0 0 5 ,5 0 0
3 .4 1 7 .0 0 0
16 .2 9 6 .5 0 0
2 9 .0 0 7 .0 0 0

4 . 023.000
1 ,-021,000

1 ,2 2 9 ,5 0 0
819,500

.

6 3.0 0 0

3 586.000
..... 555,000

$ 3 0 ,9 3 5 ,0 0 0

555,000

$ 393 , 355,000

2-5/4$ TREASURY CERTIFICATES OF IHDEBTEDHESS OF SERIES TJ-1932
Federal Reserve1 Total Subscrip­
District
tions Received

Total Cash
Subscriptions
Received

Boston
Hew York
Philadelphia
Cleveland
Richmond
Atlanta
Chicago
St, Louis
Minneapolis
Kansas City
Dallas
San Francisco
Treasury

$ 11,830,500

$

15*000

3 5 ,2 4 3 ,0 0 0
1^ ,9 2 9 ,5 0 0
5 ,4 3 7 ,0 0 0
15 , 430,000
14 , 081,500
8 ,6 0 2 ,5 0 0
1,4 9 5 ,0 0 0
3 ,1 0 8 ,5 0 0
4 ,3 2 1 ,0 0 0
n , 339 ,ooo
15 ,0 0 0

Total

$ 619 , 715,500

$ 295 , 137,000

*

400 , 911,500
43 , 699,000

1 5 ,1 3 9 ,5 0 0
5 , 447,000
1 5 ,6 3 1 ,5 0 0
78 , 621,000
9 , 392,000
4 , 519,000
1 5 ,1 2 5 ,5 0 0
it ,3 3 1,0 0 0
15 , 055,000

9 ,2 6 2 ,5 0 0
171 , 872,500

Exchange subscriptions were allotted in full.
rejected.

Total Exchange
Subscriptions
Received

$ , 2 ,5 6 8 ,0 0 0
229,039,000

8 , 456,000
210,000
10,000

2 0 1,5 0 0

♦Total Sub­
scriptions
Allotted

$

2 ,5 6 8 ,0 0 0
2 2 9 ,0 3 9 ,0 0 0
8 , 456,000
210,000
10,000

2 0 1,5 0 0

34 , 539,500
789,500

64 , 539,500
789,500

3 ,0 2 4 ,0 0 0
1 2 ,0 1 7 ,0 0 0
3 ,7 1 4 ,0 0 0

3 ,0 2 4 ,0 0 0
1 2 ,0 1 7 ,0 0 0
10 ,0 0 0
3 , 714,000

$ 3 2 4 ,5 7 8 ,5 0 0

$ 324 , 578,500

10,000

All cash subscriptions were

TREASURY DEPARTMENT

EOR RELEASE, MORNING PAPERS
Tuesday, December 15, IS31,

Speech
to "be delivered by
EON. OGDEN L. MILLS,
Under Secretary of the Treasury
before the
Economic Club of New York
at the
Hotel Astor,
Monday evening, December 14, 1931

THE NATIONAL BUDGET
and
THE PUBLIC CREDIT

You have invited me to discuss this evening the financial
position of the United States Government and the many fiscal problems
which confront our Government in these difficult times.

I was very

pleased indeed to accept, for I know of no subject in which all of our
people, irrespective of whether they contribute directly to the Federal
Government or not, are more vitally interested, or one which it is more
important that they should understand.

Adequate comprehension and

support on the part of the Nation is essential to the Government in
the performance of its fiscal functions.
We closed the last fiscal year with a deficit of $903,000,000,
We are confronted this year with a prospective deficit of $2,123,000,000,
and it is estimated that expenditures will exceed receipts by no less than
$1,417,000,000 in the fiscal year 1933,

If we contrast these figures with a

surplus of $184,000,000,in 1930, one of $185,000,000, in 1929, and of
$399,000,000, in 1928, we are shocked at the violence and suddenness of the
change.

For, while I am sorry to say that a falling off in income is an all

too common experience these days, yet our Federal Government is so strong,

and our national resources are so great, that somehow or other we feel that
our Government should "be superior to the ills to which individual citizens
are subject.

Indeed, there is so much truth in this conception, that, as we

shall see, the Government has hut to make a further call upon available re­
sources to put its financial house in order.
To grasp not only what has happened in the immediate past, hut what
should he done in the immediate future, it is necessary to understand our
revenue system, and to note the essential fact that it rests on a very narrow
base.

Take the fiscal year 1930 as an example:

We find that in that year,

out of total receipts from taxation of $3,626,000,000, no less than
$2,411,000,000, or two-thirds was contributed by income taxpayers, corporate
and individual, $587,000,000, or 16 per cent, from customs duties, and
$628,000,000, or 17 per cent, from miscellaneous internal revenue taxes, of
which the tax on tobacco contributed $450,100,000, and the stamp taxes
chiefly on the issue and transfer of securities about $69,000,000,
These taxes are comparatively few in number, and all, with the
exception of the tobacco taxes, which have steadily grown in years of
prosperity and remained comparatively stable even under adverse conditions,
are susceptible to very wide variations, in accordance with changing business
conditions.

This is obviously true in the case of customs receipts, which,

with imports reduced both in quantity and value, fell from $587,000,000, in
the fiscal year 1930, to $378,000,000, in 1931.

The direct relationship

between business prosperity and the net income of corporations, upon which
the income tax is based, needs no elaboration, and the sharp drop from
$1,118,000,000, collected in 1930, to the $550,000,000 which it is estimated
we will collect in 1932 is but another indication of the extent of the
depression,

A falling off in activity in the security markets must be

accompanied by a sharp reduction in receipts from stamp taxes.

But it is when we come to the income tax on individuals that
the dangers incident to too narrow a tax base are most strikingly
exemplified.

The number of individual returns for the calendar year 1928

aggregated 4,071,000.

Of this number, 382,000 taxpayers contributed

$1,128,000,000 and the other 3,689,000 individuals who made returns
contributed but $36,000,000.

Clearly, under our system, large and

moderately large incomes, bear practically the full burden of the individual
income tax,

How, these incomes, as we shall see, are the very ones subject

to the widest fluctuations, since they include business profits, and more
particularly because in recent years the element of gain and loss resulting
from the purchase and sale of capital assets has had on them a preponder­
ating influence.

In so far as tax receipts are concerned, these fluctu­

ations are magnified by our progressive rates which necessarily result in
taxes rising at a more raioid rate than incomes as the latter move forward
into higher, and, on the other hand, falling with greater abruptness as
they recede into lower brackets.
Taxes returned on individual incomes fell from $1,164,000,000
for the calendar year 1928 to $474,000,000 according to available infor­
mation for 1930,

The number of returns of those with incomes of from

$5,000 to $10,000 fell from 561,000 to 506,000, while the tax paid fell
from $21,000,000 to $17,000,000, or 22 per cent.

Of those with incomes

from $105000 to $100,000, the number fell from 360,000 to 252,000, and
the tax from $409,000,000 to $208,000,000, or 49 per cent; while of those
with incomes of $100,000 and over, the number fell from 15,780 to 6,152,
and the tax from $700,000,000 to $238,000,000, or 66 per cent.
While income from all sources declined, the one chiefly
responsible for this almost perpendicular drop was gains from the sale
of capital assets

-U-

If \ve take the returns of individuals with net incomes of $5*000 and over,
we .find .that the aggregate net income returned fell from $16,299,000,000, in
19 2 8 , to $1 0 ,1 1 9 ,0 0 0 ,0 0 0 , in 1 9 3 0 , or & decrease of $6,180,000,000, and of

this amount no less than

,2 3 O ,0 0 0 ,0 0 0 , or about 58 per cent, is accounted

for by the reduction in net profits in excess of losses, resulting from the sale
of capital assets.
The question of taking into consideration, in the determination
of taxable income, gains and losses from the purchase and rale of capital as­
sets, has been the subject of much discussion*

?.any people believe that this

feature of our income tax law should be eliminated, on the ground that it
tends to promote, rather than to discourage, speculation in periods of expan­
sion, and that it has a depressing effect in times of recession.

I am in­

clined to think that this criticism is too sweeping, and that the supporting
data is inadequate., Does anyone really believe that events would have been
very different if we had had no income tax°
similar experiences in the past?

If so, how are we to account for

And if it be urged that the magnitude of this

folly was greater than ever before, my answer is that we made bigger fools of
ourselves this time because our resources and the opportunities afforded us
were infinitely greater.

Certain it is that over a ten-year period this parti­

cular provision of our income tax law has been extremely fruitful.

Moreover,

we must not forget that our conception of capital gain as income is an integral
part of our income tax law, woven into its structure, and that it cannot be
eliminated without a complete re-writing of the law, and undoing the results
of many years of trial and uncertainty, during which the interpretation of the
law became clarified through administrative and court decision, and its

administration readied a point where certainty "began to take the place of
arbitrariness and "blind groping.

Do we want to travel "back over that long

hard trail for so doubtful a benefit?

Tor who can contend, as a matter of

principle, that the handsome gain yielded without effort by a quick turn in
the 'narket is a less legitimate object of taxation than a hard-earned salary
or the remuneration of doctors, lawyers, engineers and other professional men,
whose earning capacity is developed only through years of constant application
i
and unremitting effort?
In passing, while we are on the subject of income tax statistics,
there is a fallacy which I wduld like to correct.

When the figures for the

calendar year 19 2 9 were published, a number of gentlemen who think that all is
for the worst in the worst of worlds claimed th&t here at last was the final de­
cisive proof of the concentration of wealth in the United States in a few hands.
They eagerly seized on the fact that 50^- individuals reported incomes of a mil­
lion and over, and that no less than 9^7 individuals had reported incomes of be­
tween $5 0 0 ,0 0 0 and a million; but when the returns for 19 3 0 came in, we found
that the former group had shrunk to 1 U9 , and the latter to 3 1 1 , as compared with
206 and 376, respectively, in 1 9 1 6 .

On the other hand, the number of

individuals returning incomes of from $5,000 to $10,000 had grown from
150,000, in 1 9 1 6 , to 505,000, in 1930.

The truth is that income tax returns in

any given year are unreliable guides in estimating the distribution of national
income or wealth.
Tc summarize, our Federal Government relies on a very limited number
cf taxes, subject, generally speaking, to extreme fluctuations-'

It places its

chief reliance on an income tax which, because of the character of its structure

and the narrowness of its "base, is susceptible to s h a m increases and
precipitous drops.

As a result, our budget lacks stability, and is par­

ticularly vulnerable to a depression as sweeping as the one which has
overtaken us.

In consequence, our total receipts from taxation have

shrunk from $3,626,000,000, in the fiscal year 1930, to an estimated
$2,094,000,000, in the current fiscal year.

Of this loss of $1,530,000,000,

no less than $1,271,000,000 is accounted for by a falling off in income
tax collections.
In the meanwhile, expenditures are estimated at $4,482,000,000
for 1932 compared with an actual total of $3,994,000,000 for 1930, an
increase of about $490,000,000.

Of this increase approximately $350,000,000

is attributable to the estimated increase in expenditures for construction
activities, including additional work on roads, public buildings and a
variety of emergency construction activities.

It is estimated that the

Veterans’ Administration will require $231,000,000 more in 1932 than in
1930 reflecting an increase of $88,000,000 in funds required to meet loans
to veterans on adjusted service certificates and an increase of $143,000,000
for military and naval compensations and other services for veterans.
Expenditures for the postal deficiency will be $103,000,000 larger than
in 1930.

The more important decreases include $54,000,000 for interest

paid on the public debt, largely as a result of lower interest rates;
$145,000,000 for public retirement principally due to the proposed post­
ponement cf payments by foreign governments ^or 1932, and $63,000,000
for refunds of receipts«

It should be observed that total expenditures

.ting almost $4,500,000,000,
include about $1,000,000,000
$4
32, aggrOjgating
.terest on the public debt
amount to cover expenditures for veterans of all wars.

Neither of these

major outlays is subject to reduction at will, so that the opportunity

for reducing expenditures is limited to the "balance of some $2,500,000,000«
Present estimates indicate a reduction in expenditures "between 1932 and
1933 of alout $370,000,000.
It is estimated that we will close the fiscal year 1932 with a
deficit of $2,123,000,000.
more cheerful.

The outlook for 1933 is, however, a little

Revenue from taxation rises from $2,094,000,000 to

$2,168,000,000, and total receipts from $2,359,000,000 to $2,696,000,000,
whilej as I have pointed out, expenditures are cut "by about $370,000,000,
still leaving, however, an estimated deficit of $1,417,000,000«

The combined

deficits for the three years aggregate approximately $4,400,000,000, and
after deducting debt retirements effected through the sinking fund and by
virtue of other statutory requirements, indicate an increase in the public
debt of approximately $3,250,000,000,
There is the situation.

Before discussing, however, why something

must be done about it, and what that something should be, let us glance
briefly at our public debt figures.
national credit.

These have a direct bearing on the

The problem of inadequate revenue and excessive expenditures

cannot be considered solely from the standpoint of providing for our immediate
needs.

The effect which these two diverging factors, unless remedied,

will have on the public credit is of infinitely greater concern.

Its main-

tenance is of supreme importance to us all.
Our gross debt, which had fallen steadily from $25,485,000,000, on
June 30, 1919, to $16,185,000,000, on June 30, 1930, increased to
$17,310,000,000 on November 30, 1931.

In additioir, during the past 17 months,

Government securities in the hands of the public were increased by
$850,000,000 through the liquidation of Treasury notes held in the adjusted
service certificate fund in connection with the financing of additional
loans to veterans, chiefly as a result of the legislation enacted at the
last session of Congress,

Of the total interest-bearing debt, aggregating

$17,040,000,000, $14,310,000,000 consists of long-term "bonds, some of which
are callable in 1932, others in 1933; after the December financing, about
\■
$2,200,000,000 of open market issues of certificates and notes having maturi­
ties of a year or less; and some $576,000,000 of 90-day issues of Treasury
bills.

These last may he rolled over, and offer, therefore, no particular

problem.

Thanks to three bond issues, made in March, June and September,

and the reduction effected in our short-term debt since January 1, 1931, the
difficulties of financing the deficit in the current year have been lessened.
The $2,200,000,000 of certificates and notes can readily be handled in
quarterly tax-payment months, particularly as all of the quarter-days, be­
ginning January 1, 1933, are open.

But if we are called upon to finance,

through.borrowing, another huge deficit in 1933, and all manner of unwise
and uneconomic expenditures in the meanwhile, leaving aside for the moment
the general effect on the credit of the Government, our difficulties become
very serious indeed.

In November, 1933, $6,268,000,000 of Fourth Liberty

Loan 4|- per cent Bonds become callable.

They mature as early as 1938, and

this immense issue must be retired or refunded over the comparatively short
period of five years0
If, on the other hand, the increase in the public debt can be ar­
rested during the fiscal year 1933, the Treasury*s general debt retirement
and refunding program, somewhat modified, of course, by the events of the last
two years, is definitely manageable.
I do not mean to suggest that the addition of $3,000,000,000, or
even $4,000,000,000 to our national debt could conceivably impair the nation­
al credit.

That debt stood at $25,000,000,000 a decade ago, and the national

credit was unimpaired, but I do S'oy, with all the force at my command, that any
temporizing with this situation, any failure to take the steps necessary to
bring our budget into balance within a reasonable time, any misuse of the

- 9 public credit, would furnish such evidence of lack: of sound financial
as
principles,/might well result in shaken confidence and in apprehension lest
these conditions prevail long enough to result in real damage.

Our long­

term bonds are selling to-day at a discount, even those hearing as high an
interest rate as 3-3/4 per cent.

Allowing for tightened money conditions,

and for all the unusual circumstances which surround us, there is no doubt
hut that some of the weakness manifested reflects the response of the investing
public to the possibility that we may be confronted with a rapid increase
in the public debt, and in the volume of Government securities outstanding.
There is fear of further huge grants to veterans, there is fear of major
drains on the Treasury through uneconomic expenditures, there is fear of
growing and unremedied deficits.

All of this fear can be swept away only

by adherance to sound financial principles and the development of a program
of restricted expenditures and of increased revenues*, which, if they do call
for temporary sacrifices on the part of our people, will, in the long run,
bring them infinite benefit.
In this period of deep uncertainty, the unimpaired credit of the
Federal Government is the most priceless possession of the people of the
United States.

We assume its existence as we assume the continuance of

unlimited supplies of air and sunlight.

It has been established through

the pursuance of sound fiscal policy in the past and so must it now be pre­
served.

The immediate cost in increased taxes is small in .comparison with the

immediate and lasting benefit to the nation.

■

10-

Let me at this point take the liberty of quoting briefly from
the speech of a very great man, the late Senator Dwight Morrow, who, in de­
scribing how individuals take their own money with its present command ©ver
goods and services, and surrender it not only to their own Government, but to
the governments of nations on the other side of the earth, and receive in ex­
change for it a promise, went on to say:
■’The question may be asked: Nothing more than a promise?
which answer may be made: nothing less than a promise.

To

I11 remember reading some years ago a letter of Thomas Bailey
Aldrich written to William Dean Howells. Aldrich is writing of
a friend who has just di^d, and whose body is resting in *a dis­
mal London burying ground.* He says to Howells that it is not
worth three pins to be a great novelist, or a great general or
a great anything else. Then he winds up his letter with this
whimsical expression:
’Yet with a sort of hopeful vivacity I
have just bought two 5 percent’railway bonds that expire in
1 9 6 7 . Who will be cutting off the coupons long before that?
Not I.* There was Aldrich, despondent because of the transi­
toriness of life, taking his savings and putting them in rail­
way bonds that matured long after his life would end. Every day
investors are buying bonds, domestic and foreign, although they
have every reason to v/onder who will collect the coupons. Human
lives stop. Premises go on. The civilized world today is run on
the basis of a belief in promises. Whatever our doubts about the
meaning of modern civilization, we may at least take some comfort
in the trust which men show in each other *s promises.M
Now, this belief in promises, this credit structure of ours,
depends to a very great extent upon the confident belief that the Government
will meet its financial obligations promptly and punctiliously, on every occas­
ion and in every emergency.
of the United States.
tainted with suspicion.

Our currency rests predominately upon the credit

Impair that credit and every dollar you handle will be
The foundation of our commercial credit system, the Fed­

eral Reserve Banks, and all other banks which depend upon them, are inextricably
tied into and dependent upon the credit of the United States Government, Impair
that credit today, and the day after, thousands of development projects—
they are still going on— will stop; thousands of business men dependent upon

-

11

-

credit renewals will get refusals from their hankers; thousands of mortgages
that would otherwise he renewed or extended, will he foreclosed*

Merchants

who would buy on credit, "will cancel orders; factories that would manufacture
on part capacity at least will close down.
It is true that a distressingly large minority of the wage earners
®f this country are now out of work, \ But we must not forget that a majority
still have enough work to make a living*

We have lost much; hut we have in­

finitely more to lose.
What we still have, what we hope for in the future, are dependent
in a large degree upon the preservation, unimpaired, of the credit of the
United States.
tional taxation.

It will cost something to preserve it.

The cost is addi­

The wealthy, the captains of industry, the hankers, must

contribute to meet this cost; hut the small business man, the white-collar
man, the farmer, and the wage earner, have an equally vital stake in the
preservation of the Nation's credit.

The new taxes will cut into the in­

comes of the rich, and they will affect by some small amount the contribu­
tions made to the Government by those in moderate circumstances.

But the

result— the preservation, of the Nation1s credit— is worth this cost, and
for that matter, an even much greater one, to all who are called upon to
make some temporary sacrifice.
It is sometimes urged that, since in the course of eleven years
prior to the fiscal year 1931 we had retired some $3,460,00.0,000 of debt
from surplus receipts, we are justified in incurring deficits up to that
amount.

There is some force to the argument.

We have created something

in the nature of a reserve which we are warranted in drawing on, certainly
to some extent.

But there are definite limitations.

In the first place,

in the early years of the decade, a large part of the current surpluses were
due to the sale or other disposal of capital assets, the returns from which

12

-

could most properly "be applied to debt reduction, and other receipts of a
non-recurring character*

In the second place, when the sinking fund was

created, it was assumed that loans to foreign governments would he repaid in
full, and would "be applicable to the retirement of a very large part of our
public debt; whereas the amounts due us from abroad have since then been
whittled down by the debt funding agreements.

And, finally, even if we

assume that we are justified in borrowing up to the full amount of
$3,460,000,000, that sum will be almost absorbed by last year Vs and this
year*s deficits.
As the Secretary of the Treasury pointed out in his Annual Report,
there are certain basic principles in the conduct of public finances whicn
cannot be disregarded by any nation*

Rirst, the sinking fund, designed for

gradual retirement of the public debt, must be maintained, and when of ne­
cessity the public debt is increasing, the regular sinking fund appropriations
must be accepted in the accounts of the Government as fixed charges against
revenues.
tures.

Second, over a period of years, revenues must be equal to expendi­
Deficiency for a time may be inevitable, but the principle of a

balanced budget must never be abandoned, and when emergency conditions upset
the balance, every effort must be made to restore it at the earliest possible
opportunity.
Bearing constantly in mind that additional taxes should not be so
great as to retard the business recovery, upon wnich the restoration of the
normal flow of revenue depends, the Treasury program submitted to the Congress
last Wednesday has three definite objectives: Dirst, a reduction in the pro­
spective deficit this fiscal year; second, no further increase in the public
debt in the fiscal year 1933; third, a balanced budget in 1934,

We do not

feel justified in asking for more; we would have failed in our duty had we rec­
ommended less

\

- 13 The attainment of our goals necessitates additional revenue in
excess of $900,000,000 in the year 1933,
we considered many forms of taxation.

In the development of a program,
We weighed, for instance, the merits

of the general sales or turn-over tax, "but rejected it, not only "because it
"bears no relation to ability to pay, and is regressive in character, but
"because of the enormous administrative difficulties and the almost inevitable
pyramiding of the tax in the course of successive sales.
We studied the limited manufacturers* or producers* sales tax,
which is being administered with a fair degree of success in Canada.

In

Canada a tax is imposed at the rate of 4 per cent on the manufacturers* sale
price, or the import value of all goods not exempt, which are produced or man­
ufactured in Canada or imported into Canada.
distinctly not a turn-over tax.

Retailers are exempt.

It is

Practically all raw materials of farms,

mines, fisheries, etc., are exempt, as are most small manufacturers and
producers, such as customs tailors, shoemakers, plumbers, opticians, et al.
The extent of the exemptions is very great.

They fill ten closely printed

pages, and cover thousands of specific items and classes of items.
ing is avoided by/mechanism of licenses and certificates.
and wholesaler is required to take out a license.

Pyramid­

Every manufacturer

If one licensed manu­

facturer buys from another licensed manufacturer, or licensed wholesale a , j.aG
notes his certificate number on the order; this is noted on the sales invoice,
and the sale is exempt.

When the last licensed taxpayer sells to an un­

licensed purchaser, the tax is collected.

Administrative discretion is

granted to an extent unheard of in this country, and which I doubt whether
our Congress would ever be willing to grant.

Wot only has the Minister of

Finance final power to fix the wholesale price or value to which the tax
is applied in uncertain cases, not only are deductions and refunds dis­
cretionary, but from 1922 until 1931 the Governor-in Council had power to

rate

/,
~ 14 -

exempt articles from the sales tax.

The success of the tax appears to he

due not only to good administration, hut to this very wide administrative
discretion.

The tax is unquestionably passed on, and adds, therefore, to

the cost of living.
With some 200,000 manufacturing establishments in the United States,
our much more extensive and complicated industrial mechanism, our tendency
to set out administrative procedure with almost meticulous accuracy in our
statutes, and our reluctance to grant administrative discretion, or the
authority to administrative officers to make final decisions, it is more
than doubtful whether the Canadian sales tax would meet with the success in
our country that in has across the border.

Certain it is that many months

would alapse before the necessary administrative machinery could be set up,
and a number of years before such a new form of taxation could be firmly
established in this country.

And we are in need of additional revenue now.

In any event, we concluded that, on the whole, it is wiser for
us to resort to those forms of taxation with which we have had experience and
are thoroughly familiar, rather than to embark on new and untried ventures.
If this conception is sound, we have but to take a step backward and to re­
linquish temporarily the benefits of the tax reductions effected in the period
of expanding revenues.

It isn*t necessary to' retrace many steps and to

return either to the Revenue Act of 1918 or of 1921, but what we desire can
be accomplished by returning in principle to the general plan of taxation
existing under the Revenue Act of 1924, with such changes as are appropriate
in the light of existing conditions.
manifest,

The advantages of such a program are

From an administrative standpoint, we have not only had the

necessary experience, but we are so organized as to take on this new burden
without difficulty.

From the standpoint of the taxpayer and of the nation,

there is no occasion for alarm for we are simply reimposing upon ourselves,

- 15 for the time "being, taxes which we didn’t find too "burdensome, and the
existence of which proved no impediment to business expansion and growing
prosperity*
It is unnecessary to describe the program in detail, for I doubt not
all of you have read it with interest, and I trust without concern*

Generally

speaking, it provides for the retention, and in some instances, an increase in
existing excise taxes, a restoration of the manufacturers’ sales tax on auto­
mobiles, trucks and accessories, of the stamp tax on conveyances of realty, and
of the tax on telephone, telegraph, radio and cable messages, and the imposi­
tion of new taxes on manufacturers’ sales of radio and phonograph equipment,
and on checks and drafts.

The rate of tax on corporate income is increased

but slightly from 12-12-| per cent.

We have refrained from recommending the

restoration of the capital stock tax, which was in the 1924- law, not only be­
cause it was an unfair and unequal tax, involving most difficult administrative
problems, but with a view to placing not too great a burden on business at
the present time,

A return to the 1924 Act necessarily involves a sharp in­

crease in the rates applicable to individual incomes and the taxing of many
taxpayers, who since 1924, owing to very high exemptions, have been relieved
from the obligation of contributing to the support of their government, trough
enjoying a very genuine ability to contribute certainly the very moderate
amounts demanded by the 1924 Act,
When the 1924 Act was before the House of Representatives, no one
fought harder than I did to reduce the rates to the point later established
by the 1926 :Adt;.

I believed then, and I believe now, that under normal

conditions a 20 per cent rate is sounder than a 40 per cent rate, not only
from the standpoint of our general economy, but, in the long run, from the
standpoint of productivity.

But these are not normal times.

emergency, and we are proposing emergency measures to meet it.

Tnere is
Men who

still have very large incomes cannot reject, under the circumstances, to

~ 16 contributing largely.

Men with comparatively large incomes should be willing

to do their share, and those in more moderate, but comfortable, circumstances
will surely feel that they can spare something for the support of their
government,*

I am confident that, if only there be a proper understanding of

the necessities of the case, the temporary sacrifices demanded will be met, if
not joyfully at least wholeheartedly, and with philosophy and good humor.
After all, even in these days which appear so dark, we are still
fortunate as contrasted with other nations.

After a hard-boiled Treasury has

done its worst, and when you gloomily view the approach of the Ides of

March,

I suggest that you place these figures on your desk as you make out your in­
come tax return:

A married man with one dependent, and with an income of

$5,000, will pay, under our Treasury’s proposal, $31,50 in taxes; a man
similarly situated in Great Britain pays, under Mr, Snowden’s latest budget
proposals, $650,

A man with an income of $10,000 pays $153 in the United

States and $1800 in Great Britain.

One with $100,000 pays $22,030 in the

United States and $48,000 in Great Britain.

We would grant an exemption of

$1500 for a single man, $2500 for a married man and $400 for each dependent.
Great Britain’s exemptions are as follows:

for a single man, $485, for a

married man, $730, for the first dependent child,$245, and for each other
child, $195,
If our program is adopted, it is estimated that we shall obtain
during the full fiscal year 1933 an additional $60,000,000 from corporations,
$185,000,000 from individual income taxpayers, $11,000,000 additional from
estates, and $514,000,000 additional from miscellaneous internal revenue
taxes.

In addition, we have recommended that postal rates be so adjusted

that the Post Office Department’s reyenues will cover, by a reasonable margin,
its expenditures, exclusive of such special services as the cost of free postal
services performed for Government Departments and agencies, the excess of the
cost of air mail services over revenues, and the cost of special rates paid

A| <

- 17 -

to ocean mail carriers wider American registry*

There is no reason why the

public should not pay the cost of the service it receives from the Post Office
Department, or why the latter, as an essentially "business institution, should
not "be self-supporting.
I have no illusions as to the feelings with which a program of
drastic tax increases is received, and I can assure you that it is anything
hut' a pleasant task to participate in the preparation and submission of such
a program, hut no man, whether he he a Treasury official or a taxpayer, can
open—mindedly examine the existing situation and not reach the conclusion that
the alternative for increased taxation is infinitely worse for the Hation.
I find some consolation in the thought that the contribution to he made by
people with moderate incomes is still fairly light, and that those whose in­
comes remain in the upper brackets in times like these are in such a, preferred
class as to occasion little concern for them, though if circumstances per­
mitted I should much prefer to see them buy bonds rather than pay additional
income taxes.

When we come to the miscellaneous group, the rates are not so

high as to interfere with the flow of goods or services, or to constitute a
real burden on those who buy or enjoy them.

Can we seriously complain if

cigarettes and radios and admissions to places of amusement— *yes, even semenecessities such as automobiles— arc to cost a trifle more, or if we are to
pay 2$ for the privilege of using checks and an additional cent on transfer
of securities?

These are not intolerable burdens, particularly when we are

asked to assume them to meet the necessities of a real emergency.
But, let me add that if the people of the United States make this
sacrifice and furnish almost a billion dollars of additional fund3 to their
government, they have the right to insist, and I hope that they will, that
not one penny is expended extravagantly, politically or unwisely, but that
just as enforced rigid economy prevails throughout the country, so will
it be observed in Washington,

-

18

-

Let me close with, a general observation or two«
home and abroad which appear so great are not insoluble«

The problems at
They will yield

readily enough to a resolute, courageous and intelligent attack.

The real

difficulties in the present situation are those inherent in human nature, in
the element of fear which seems to possess the souls of men in the face of an
uncertain future and in fixed conceptions and attitudes.
fear from frozen minds than frozen assets.
to a few leaders.

There is more to

We cannot look to governments or

The necessary measures mast be taken and the recuperative

forces mast be set in motion by the great masses of the people themselves.
But if the nations and the individuals who compose them, laying
aside preconceived notions, prejudices, and above all, fear, will face the
realities of the situation and Ítí.11 look to the future rather than to the
past, then we can fairly hope to emerge from this deep valley at a compara­
tively early period.

There must, of course, be guidance and leadership,

but the real responsibility rests on each and every one of us, and our
failure to meet our daily problems with intelligence and courage is not only
a betrayal of others, but of our own cause.

\ /
*/ >//
l*iucÁSURY DEPARTMENT

FOR RELEASE, MORNING PAPERS,
Wednesday, December 23, 1931.

STATEMENT BY SECRETARY MELLON

The Secretary of the Treasury gives notice that tenders are
invited for Treasury bills to the amount of $100,000,000, or thereabouts.
They will be 91-day bills; and will be sold on a discount basis to the
highest bidders.

Tenders will be received at the Federal Reserve Banks,

or the branches thereof, up to two o ’clock p. m , , Eastern Standard time,
on Monday, December 28, 1931.

Tenders will not be received at the

Treasury Department, Washington.
The Treasury bills will be dated December 30, 1931, and will
mature on March 30, 1932, and on the maturity date the face amount
will be payable without interest.

They will be issued in bearer form

only, and in amounts or denominations of $1,000, $10,000, $100,000,
$500,000, and $1,000,000 (maturity value).
It is urged that tenders be made on the printed forms and
forwarded in the special envelopes which will be supplied by the Federal
Reserve Banks or branches upon application therefor.
No tender for an amount less than $1,000 will be considered.
Each tender must be in multiples of $1,000.

The price offered must be

eapressed on the basis of 100, with not more than three decimal places,
e. g., 99.125.

Fractions must not be used.

Tenders will be accepted without cash deposit from incorpor­
ated banks and trust companies and from responsible and recognized
dealers in investment securities.

Tenders from others must be accom­

panied by a deposit of 10 per cent of the face amount of Treasury bills

|ff

1I

-2-

applied for, unless the tenders are accompanied by an express guaranty
of payment by an incorporated bank or trust company*
Immediately after the closing hour for receipt of tenders on
December 28, 1931, all tenders received at the Federal Reserve Banks
or branches thereof up to the closing hour will be opened and public
announcement of the acceptable prices will follow as soon as possible
thereafter, probably tn the following morning.

The Secretary of the

Treasury expressly reserves the right to reject any or all tenders or
parts of tenders, and to allot less than the amount applied for, and
his action in any such respect shall be final.

Those submitting

tenders will be advised of the acceptance or rejection thereof.

Pay­

ment at the price offered for Treasury bills allotted must be made at
the Federal Reserve Banks in cash or other immediately available funds
on December 30, 1931.
The Treasury bills will be exempt, as to principal and interest,
and any gain from the sale or other disposition thereof will also be
exempt, from all taxation, except estate and inheritance taxes.

Ho loss

from the sale or other disposition of the Treasury bills shall be allowed
as a deduction, or otherwise recognized, for the purposes of any tax now
or hereafter imposed by the United States or any of its possessions.
Treasury Department Circular Ho. 418, as amended, and this
notice prescribe the terms of the Treasury bills and govern the conditions
of their issue.

Copies of the circular may be obtained from any Federal

Reserve Bank or branch thereof.

TREASURY DEPARTMENT

FOR RELEASE,. MORNING PAPERS,
Tuesday, December 29, 1931.

STATEMENT BT ACTING SECRETARY MILLS

Acting Secretary of the Treasury Mills announced to-day that
the tenders for $100,000,000, or thereabouts, of 91—day Treasury
Bills dated December 30, 1531,■ and maturing March 30, 1932, which
were offered on December 23rd, were opened at the Federal Reserve
Banks on December 28th.
The total amount applied for was $190,072,000.

The highest

bid made was 99,550, equivalent to an interest rate of about
1.78 per cent on an annual basis.

The lowest bid accepted was

99.077, equivalent to an interest rate of about 3.65 per cent on
an annual basis.

Only part of the amount bid for at the latter

price was accepted.
$101,332,000,
is 99.178.

The total amount of bids accepted was

The average price of Treasury Bills to be issued

The average rate on a bank discount basis is about

3-1/4 per cent.

TREASURY DEPARTMENT

FOR RELEASE, MORNING PAPERS,
Wednesday, December 30, 1931

Statement by Acting Secretary Mills.
The morning papers of December 29th report that the Democratic leaders
have finally decided on their tax program.
no broadening of the'income tax base.

Under this program there is to be

There Vis to be no return to supple­

mentary excise taxes along the lines of the 1924 Act.

The increased taxes

are to be confined to higher surtaxes on larger incomes and to increased
estate taxes.
The outstanding defect in such a program is that it is wholly inadequate
to meet the fiscal situation.
The deficit for the fiscal year 1932 is estimated at $2,123,000,000.

It

is estimated that current collections from individual income taxes during
the calendar year 1932 will not exceed $300,000,000, of which a little more
than half will be collected during the fiscal year 1932.
amount,, approximately $210,000,000 is from surtaxes.

Of this estimated

If we should increase

surtaxes by 100 per cent, we would collect only about $200,000,000 additional
during the calendar year 1932, and probably the amount would be considerably
less.

Even if we should triple the surtax rate on income over $100,000,

which would mean a 60 per cent maximum rate, we would, even from a theo­
retical standpoint, collect only an additional $120,000,000 during the cal­
endar year 1932,

Only half of these amounts would be available during the

present fiscal year to lessen an estimated deficit of $2,123,000,000.

m

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2

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It may be disappointing to realize that there is so little profit
in Msoaking the rich,T, but the truth of the matter is that the large
incomes are no longer there and cannot, therefore, be made to produce the
needed revenue.

The number of incomes of $100,000 and over fell from

about 16,000 in 1928 to about 6,200 in 1930.

There will unquestionably

be a further substantial reduction in the calendar year 1931.
When we come to the fiscal year 1933, doubling surtax rates on all
incomes of $10,000 and over, effective on 1931 incomes, would probably
not yield more than $280,000,000 additional revenue to meet an estimated
deficit of about $1,417,000,000, and but an insignificant sun could be
realized from sweeping increases in estate taxes.
Ho matter to what extent our Democratic friends are ready to increase
estate taxes, such taxes cannot be made to yield any additional suns in the
fiscal year 1932 or more than a limited amount in the fiscal year 1933,
for the very obvious reason that the new taxes would only apply to the
estates of those dying after the passage of the act.

There would be a

year from that date in which to make a return and three years from the date
of making the return in which to pay the tax.
To put the matter bluntly, aside from the attempt to collect
at best comparatively small amounts by a drastic increase in taxes
on the so-called rich, what the Democratic leaders propose is to
finance not only this but next yearrs deficit through borrowing

- 3 and. to continue this course»

There is apparently to be no serious

effort made to arrest the steady increase in the public debt during
the next eighteen months or to work towards the attainment of a
balanced budget in the hear future.
This will not do.

There is nothing so important to the people

of the United States in this period of deep depression as the main­
tenance unimpaired of the credit of the United States Government,
It stands high because of the sound fiscal policies pursued in the
past.

It can only be preserved by a like observance of sound

financial principles in the future.

Borrowing over $3 >000,000,000

to meet current expenditures without a vigorous effort to tap
available tax sources is indefensible.

The issuance of securities

on any such scale must not only result in depreciation of all
outstanding Government securities, with a corresponding loss to
investors, but in an unjustified increased interest cost to be
borne over many years.
It is not a question of taxing or not taxing the riqh.
The rich must in any event bear additional burdens.

The question

is whether others in more moderate circumstances are to be asked to
contribute their share based on their capacity to pay, and whether
other taxes imposed in the past without hardship to anyone are
to be resorted to during this emergency, or whether readily avail­
able resources are to be ignored for reasons which bear no
relation to economic effects or the fiscal needs of the Government,

-

4

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The Treasury has suggested a program intended to reduce the
deficit this fiscal year, to put an end to the increase in the public
debt next year, and to balance the budget in 193^*
falls short of these objectives is inadequate.

Any program that

To attain them will

require additional taxes amounting to approximately $9 0 0 ,0 0 0 ,0 0 0
in the fiscal year 1933»

In providing for this increased revenue we

have endeavored to prepare a reasonable pro-gram which would not entail
hardship to any class of taxpayers.

We have by no means spared

those with large incomes, as is indicated by the fact that the maximum
normal and surtax rates applicable to those with incomes of $5 0 ,0 0 0 are
increased by over 25 per cent,, and the maximum normal and surtax rates
applicable to incomes in excess of $100,000 are almost doubled.

At the

same time, it is undeniable that those with moderate incomes have some
capacity at lea,st to contribute small amounts to the support of their
Government.

Can it fairly be said that a man with an income of

$5,000 cannot afford to pay $3 1 . 5 0 in taxes to the Federal Government,
or one with an income of $10,000, as much as $1 5 3 .0 0 ?

This is all that

would be demanded of them under, the individual income tax rates included
in the Treasury*s program.
As has already been pointed out, it is entirely out of the
question to obtain from income taxes alone anything like the total
amount of additional revenue needed.

If it was wise and proper to

impose certain excise taxes in I92 U, and I may say in passing that
the present Democratic leaders thought it was wise and proper, what

- 5 conceivable objection can there be to such taxes to-day when our
needs are far greater?

The rates suggested are not so high as to

interfere with the flow of goods and services or to constitute a
real burden on those who buy or enjoy them.

Can anyone seriously

conrplain if cigarettes and radips and admissions to places of
amusement, even euitomobiles, are to cost a trifle mare, or if we
are to pay 2 cents for the privilege of using checks and an
additional cent on the transfer of a share of stock?

These are

not intolerable burdens, particularly when we are asked to assume
them to meet the necessities of a real emergency#
Passing over for the time being the doubtful morality in­
volved in the suggestion that we eliminate retroactively deductions
for capital losses, after profiting largely for many years by the
taxation of capital gains, and the extremely doubtful principle
of exempting speculative profits from taxation while sharply in­
creasing the rates applicable to the hard earned income of doctors,
lawyers, and of the professional and salaried classes, the statement
of the Democratic leaders raises squarely the all-important issue
now before the people.

The country must decide whether it means

resolutely to put its financial house in order, or instead to
follow the treacherous and demoralising course of borrowing, which
has led governments as well as individuals to disaster#


Federal Reserve Bank of St. Louis, One Federal Reserve Bank Plaza, St. Louis, MO 63102